PRINCIPLES OF

MANAGEMENT

Lecturer: Ms. Maryam

Shakeel
 CHAPTER # 5

LEADING
INTRODUCTION:
 Leadership is the ability to develop a vision that motivates others to
move with a passion toward a common goal. Leadership is the
important function of management. It involves directing, influencing
& motivating employees to perform.
ACCORDING TO ALAN KEITH:
 “Leadership is ultimately about creating a way for people to
contribute to making something extraordinary happen”

 “Leadership is shifting of own vision to higher sights, the raising of

man’s performance to higher standards, the building of man’s
personality beyond its normal limitations” (Peter Drucker)
CONCEPT OF LEADERSHIP:
 Leadership is defined as the relationship in which one person
influences others to work together to reach a desired level of
achievement. If there is no follower, there is no leader.”
WHO IS LEADER?
 One that leads or guides.
 One who is in charge o in command of others.
 One who has a influencing power.
 One who empowers people with honesty.
IMPORTANCE OF LEADERSHIP:
 A clear vision
 Effective Planning
 Inspiration and Motivation
 New Ideas
 Employee Relations
 Crisis Management
WHY LEADERSHIP IS IMPORTANT IN AN
ORGANIZATION?
 Management requires utilization of various resources through human
resources.
 Therefore, it is essential element of management.
CHARACTERISTICS OF LEADERSHIP:
 Honesty
 Direction
 Communication
 Needs support from all
 Intelligence
 Self Confidence
TYPES OF LEADERSHIP:
1) Democratic Leaders
2) Autocratic Leaders
3) Bureaucratic Leaders
4) Delegate Leaders
AUTOCRATIC LEADERS:
 Autocratic leaders are an excessive form of transactional leadership,
where a leader makes use of high levels of power over his team
members. People within the team are given few opportunities for
making suggestions, even if these would be in the team’s
organizations interest. The authoritarian leader makes decisions alone
as power is centralized in one person.
DEMOCRATIC LEADERS:
 A democratic leader makes the final decision but he invites others
members to contribute to the decision making process, which
increases job satisfaction by involving team members and also helps
to develop people’s skills. Team members feel in control of their own
destiny and are motivated to work smart.
BUREAUCRATIC LEADERS:
 Bureaucratic Leaders work by the book, ensuring that their staffs
follow procedures accurately. This is a very right approach for work
involving serious safety risks (such as working with machinery
LEADERSHIP BEHAVIOR:
 Great leaders may not be born that way, but the behaviors that mark
the best and lead to success can be developed and refined over time.
Seven of the most important:
1) Being grounded in ethics and integrity. Both are hallmarks of the
most successful leaders – those who are deeply committed to doing the
right things for the right reasons, even when it is difficult or unpopular
to stay the course. This underscores the importance of adhering to high
principles and professional standards, and doing so with consistency.
2) Building trust. This isn’t something that just comes automatically to a
leader. It’s something the most successful know they must earn. To that end,
they take actions that gain them respect. They involve others in decisions that
affect them rather than making unilateral calls. They are transparent and
consistent, so subordinates know what to expect (and can count on it).
Successful leaders act in a way that makes others proud to be associated with
them.
3) Bringing others along. It’s important to help others grow and achieve, and
the best leaders serve as both coaches and teachers in pursuit of that goal. It
takes looking at individuals and treating them as such in understanding their
distinct needs, abilities and goals. At the same time, it takes working with
people to help them uncover what they do best and ways to strengthen their
assets.
4)Inspiring those around you. The most successful leaders have a vision
that motivates people to follow. But it’s not just the vision – for whatever
future or goal or purpose – that inspires. It’s expressing it with passion and
energy, and backing it with strong beliefs and values that count. It’s a matter
of exciting people to be equally engaged and uplifted at being a part of
something bigger and better.
5) Making decisions. Anybody can make a decision. But it takes a great
leader to take on the hard decisions with authority and confidence. Success
here comes from balancing emotion with reason, enlisting input from others
to ensure the move forward is well-informed, yet acting with authority. Even
when decisions may be unpopular, a leader who honestly communicates the
rationale behind them is in a better position for long-term success.
6) Encouraging innovation. Innovative organizations give their people the space to stretch
their creative wings. The culture to make this happen is set by leaders who encourage the art of
“possibility” thinking and looking at issues from different perspectives – and who share how
such practices have worked for them. The most successful leaders also understand the
importance of training people in being more innovative through questioning, observing,
experimenting and networking, and to that end ensure that employees get work time each
week to do outside-the-job creative endeavors.

7) Reward achievement. No one likes to see their hard work and accomplishments go
unrecognized. The best leaders make a habit of calling out people who make contributions to
the organization, and they do it in in both a timely and appropriate manner. This may be
expressed through a tangible reward or a public acknowledgement. Either way, it is a function
of a leader who not only sets and shares specific expectations, but shows what happens when
individuals meet them. Most importantly, the best leaders deliver what they promise when that
happens.
DIFFERENCE BETWEEN LEADERS &
MANAGERS?
 A manager fits in an organized structure.
 People have to work for a Manager.
 A manager is a person who plans details.
 A manager asks how and when.

LEADERSHIP:
 A leader is a person who influences his subordinates to achieve a specified goals.
 People who wants to follow a leaders.
 Leaders ask what and why.
 A leader is a person who sets direction.
LEADERSHIP THEORIES:
 1) The Contingency Theory of Leadership
 2) Path-Goal Theory
 3) Transformational Leadership
 4) Entrepreneurial Leadership
1) CONTINGENCY THEORY:
 This theory focus on particular variables related to the environment.
This model explains a relationship between leadership style and the
favorableness of a situation. Fiedler described situational
favorableness in terms of 3 dimensions:
 The leader and member relationship
 The degree of task structure
 The leader’s position power
 Ifthe three dimensions are high , the situation can be said to be
favorable. If three dimensions are low, the situation in combination
with leadership style determines effectiveness.
2) Path Goal Theory:
 Itwas developed by Robert House. A theory which describes: How
leaders can motivate their followers to achieve group and
organizational goals and the kinds of behaviors leaders can engage
into motivate followers. It is about how leaders motivate followers to
accomplish designated goals. It emphasizes the relationship between
the leader’s styles and characteristics of the followers and the work
setting.
Transformational leadership:
 Itis a leadership style where one or more persons engage with others
in a such way that leaders and followers raise one another to higher
levels of motivation and morality.
ENTREPRENEURIAL LEADERSHIP:
 Entrepreneurial leadership defined as “organizing a group of people
to achieve a common goal using proactive entrepreneurial behavior
by optimizing risk, innovating to take advantage of opportunities,
taking personal responsibility and managing change within a
dynamic environment for the benefit of an organization”.
 Entrepreneurial leaders may work within a formalized organization
structure. But they use the skills and approaches associated with
successful entrepreneurs.
MOTIVATION
THEORY
1) NEED GOAL THEORY:
 It states that goal setting is linked to task performance & specific and
difficult goals with feedback lead to higher performance.
 A goal is an object or aim of an action.
 It involves establishing Specific, Measurable, achievable, realistic
and time targeted goals.
 Goal setting is an important tool for managers because goals have the
ability to function as a self regulatory mechanism that helps
employees prioritize tasks.
SEVEN STEPS FOR GOAL SETTING:
1) Identify Goals
2) Set Objectives
3) List Objectives
4) Identify People
5) List Benefits
6) Develop a Plan
7) List skills
2) VROOM EXPECTANCY:
 Itstates that behavior results from conscious choices among
alternatives whose purpose is to maximize pleasure and minimize
pain.
 The key elements to this theory are referred to as following:
 Valence
 Instrumentality
 Expectancy
VALENCE:
 The term refers to the emotional orientation people hold with respect
to outcomes. (rewards)
 Valence is negative if the individual prefers not attaining an outcome
compared with attaining it.
 Valence is zero if the individual is indifferent to the outcome.
 Valence is positive if the individual has the strong preference to the
outcome.
INSTRUMENTALITY:
 Itrefers to the belief that the first level outcome will lead to the
second level of outcome.
 The value of instrumentality varies from 0 to 1. If an employees sees
that promotions are based on performance, instrumentality will be
high rated.
 A low estimate of instrumentality will be made if the employee fails
to see link between performance & reward.
EXPECTANCY:
 It refers to the beliefs that an effort will lead to completion of task.
 The value of expectancy varies between 0 to 1.
 I an employee sees no chance that effort will lead to the desired
performance, the expectancy is zero.
 If the employee is confident that the task will be completed, the
expectancy has a value of 1.
3) EQUITY THEORY:
 A person feels equitably treated when his outcome/input ratio is
equal to other person’s outcome/input ratio.

INDIVIDUAL’S OUTCOME = OTHER’S OUTCOME

INDIVIDUAL’S INPUT OTHER’S INPUT
 Itis the concept that people derive job satisfaction and motivation by
comparing their efforts(inputs) and income(outputs) with those of
other people in the same or other firms.
4) MASLOW’S HIERARCHY THEORY:
 Abraham Maslow, a psychologist believed that all people have need
to be satisfied that they will work to satisfying those needs. A need is
what a person requires. He assumed these need could be arranged
according to their importance in a step known as Maslow’s hierarchy
of need.
5) ALDERFER’S ERG THEORY:
 A theory of motivation that focuses on three groups of needs that
form a hierarchy:
 Existence needs
 Relatedness needs
 Growth needs
6) MCCLELLAND’S ACQUIRED NEEDS
THEORY:
 David McClelland introduced this theory in 1960’s.
 It is based on Maslow’s hierarchy of needs.
 According to him individual posses three needs which are not innate
they are learned through culture, age and experiences.