THE DIRECTING / LEADING

and Controlling FUNCTION

Compiled by Mohammed Jemal

DEFINITIONS

 “Leadership is a process whereby an individual

influences a group of individuals to achieve a common
goal”. (Northouse, 2004)
 “Leadership is about articulating visions, embodying
values, and creating the environment within which
things can be accomplished” (Richards & Engle, 1986)
DEFINITIONS

 “Leadership is the ability of an individual to influence,

motivate, and enable others to contribute toward the
effectiveness and success of the organization…”
(House et al., 1999)
DEFINITION… CONT’D
 Therefore, Leadership is the function of
The Leader
 The Follower and
 The Situation
• L= f(L,F,S)
 Leading is the management function aimed at
setting the members of an organization move in the
direction that will achieve its objectives
LEADERSHIP VS MANAGEMENT

 Management and Leadership are not the same

 In deed, managers and leaders share a number of traits.
 Leadership and management are two distinctive and
complementary systems of action…… Both are
necessary for success in an increasingly complex and
volatile business environment.
LEADERSHIP VS. MANAGEMENT…CONT’D

 Strong leadership with weak management is no better,

and is sometimes actually worse, than the reverse.
 Management is about coping with complexity…..
Without good management, complex enterprises tend
to become chaotic… Good management brings a
degree of order and consistency….
 LEADERSHIP VS. MANAGEMENT…CONT’D

 Leadership, by contrast, is about coping with change…. More

change always demands more leadership.
 Companies manage complexity by planning and budgeting,
by organizing and staffing, and by controlling and problem
solving. By contrast, leading an organization to constructive
change involves setting a direction (developing a vision of
the future and strategies to achieve the vision), aligning
people, and motivating and inspiring them to keep moving in
the right direction.
 POWER AND INFLUENCE
 To fully understand leadership, it is necessary to understand
power.
 Power is the ability to affect the behavior of others.
 In organizational settings, there are usually five kinds of
powers: legitimate, reward, coercive, referent, and expert
power and these powers usually classified into position
power and personal power.
POWER AND INFLUENCE

 Accordingly, legitimate, reward and coercive power are

related to positional power and referent and expert
power are related to personal power.
 POWER AND … CONT’D
1. Referent power: based on followers’ identification and
liking for the leader.
2. Expert Power: based on the followers’ perceptions of the
leader’s competence and expertise skill.
3. Legitimate Power: associated with having status of
formal job authority.
4. Reward Power: Derived from having the capacity to
provide rewards to others.
5. Coercive Power: Derived from having the capacity to
penalize or punish others.
 THEORIES OF
LEADERSHIP
Trait Theory
Assumptions
 People are born with inherited traits.
 Some traits are particularly suited to leadership.
 People who make good leaders have the right (or sufficient)
combination of traits.
Description
 Early research on leadership was based on the psychological
focus of the day, which was of people having inherited
characteristics or traits.
 Attention was thus put on discovering these traits, often by
THEORIES OF LEADERSHIP…CONT’D

Behavioral Theory
Assumptions
 Leaders can be made, rather than are born.
 Successful leadership is based in definable, learnable behavior.
Description
 Behavioral theories of leadership do not seek inborn traits or capabilities.
Rather, they look at what leaders actually do.
 If success can be defined in terms of describable actions, then it should
be relatively easy for other people to act in the same way. This is easier
to teach and learn then to adopt the more ephemeral (short-lived) 'traits'
or 'capabilities'.
LEADER–MEMBER EXCHANGE (LMX) THEORY

• This contemporary leadership theory argues that,

because of time pressures, leaders establish a special
relationship with a small group of their followers.
• These individuals make up the in-group they are trusted,
get a is proportionate amount of the leader’s attention,
and are more likely to receive special privileges.
• Other followers fall into the out-group.
LEADER–MEMBER EXCHANGE (LMX)
THEORY

• The theory proposes that early in the history of the

interaction between a leader and a given follower, the
leader implicitly categorizes the follower as an “in” or an
“out” and that relationship is relatively stable over time.
• Leaders induce LMX by rewarding those employees with
whom they want a closer linkage and punishing those
with whom they do not. But for the LMX relationship to
remain intact, the leader and the follower must invest in
the relationship.
THEORIES OF LEADERSHIP…CONT’D

Situational/ contingency Leadership Theory

Assumptions
• The best action of the leader depends on a
range of situational factors.
• Situational leadership has many variants as
discussed in the following slides.
CONTINGENCY THEORY OF
LEADERSHIP….
Fiedler’s Contingency Model of Leadership Effectiveness
• This model contained the relationship between leadership style
and the favorableness of the situation. Situational favorableness
was described by Fiedler in terms of three empirically derived
dimensions:
1. The leader-member relationship, which is the most critical
variable in determining the situation’s favorableness
2. The degree of task structure, which is the second most
important input into the favorableness of the situation
3. The leader’s position power obtained through formal authority,
which is the third most critical dimension of the situation
Contemporary leadership theory
CHARISMATIC LEADERSHIP STYLE

• He attended some middling college. Doesn’t have an

MBA. But he has an aura. He persuades people—
subordinates, peers, customers, even the S.O.B. you
both work for—to do things they’d rather not. People
charge over the hill for him. Run through fire. Walk
barefoot on broken glass. He doesn’t demand attention,
he commands it.
CHARISMATIC LEADERSHIP STYLE……..

• A leadership theory that states that followers make

attributions of heroic or extraordinary leadership
abilities when they observe certain behaviors.
CHARISMATIC LEADERSHIP STYLE……..

• charismatic leaders are characterized by self-

confidence and confidence in their associates, high
expectations for associates, ideological vision, and the
use of personal example.
• Followers of charismatic leaders identify with the
leader and the mission of the leader, exhibit extreme
loyalty to and confidence in the leader, emulate the
leader’s values and behavior, and derive self-esteem
from their relationship with the leader
CHARISMATIC LEADERSHIP STYLE……..
CHARISMATIC LEADERSHIP STYLE……..

• Research indicates that the impact of such charismatic leaders will

be enhanced when the followers exhibit higher levels of self-
awareness and self-monitoring, especially when observing the
charismatic leaders’ behaviors and activities and when operating in
a social network
TRANSFORMATIONAL LEADERSHIP

• Transformational leadership involves inspiring followers to commit

to a shared vision that provides meaning to their work while also
serving as a role model who helps followers develop their own
potential and view problems from new perspectives.
= exceeding expectations and setting challenging goals
TRANSFORMATIONAL LEADERSHIP

• Transformational leaders heighten followers’ awareness of the

importance of certain outcomes while increasing their confidence
that those outcomes can be achieved.
• Transformational leadership is viewed as a more motivational
approach to leadership than other managerial approaches.
DIMENSIONS OF TRANSFORMATIONAL
LEADERSHIP

These are the specific kinds of actions and behaviors that leaders can
utilize to become more transformational)
1. idealized influence,
2. inspirational motivation,
3. intellectual stimulation, and
4. individualized consideration
They are also known as the Four I’s.
LEADERSHIP STYLES
 There are a number of different 'styles' to leadership that
are based on different assumptions and theories.
 The style that individuals use will be based on a
combination of their beliefs, values and preferences, as
well as the organizational culture and norms which will
encourage some styles and discourage others.
LEADERSHIP STYLES…CONT’D

Some of these Styles are:

Autocratic/Authoritarian
Democratic/Participative Leadership Style
Laissez-fair/Free-Rein Leadership Style
 LEADERSHIP STYLES…CONT’D
Autocratic Leadership Style
 In the autocratic style, the leader takes decisions
without consulting with others.
 An autocratic style works when:
– There is no need for input on the decision
– where the motivation of people to carry out
subsequent actions would not be affected whether
they were or were not involved in the decision-
making.
 LEADERSHIP STYLES…CONT’D
Democratic Leadership Style
In the democratic style, the leader involves the people in the
decision-making, although the process for the final decision
may vary from the leader having the final say to them
facilitating consensus in the group.
LEADERSHIP STYLES…CONT’D

 Democratic decision-making is usually appreciated by

the people, especially if they have been used to
autocratic decisions with which they disagreed.
 It can be problematic when there are a wide range of
opinions and there is no clear way of reaching an
equitable final decision.
 LEADERSHIP STYLES…CONT’D

Laissez-Faire Leadership Style

 The laissez-faire style is to minimize the leader's
involvement in decision-making, and hence
allowing people to make their own decisions,
although they may still be responsible for the
outcome.
 Laissez-faire works best when people are:
 capable and motivated in making their own decisions
 where there is no requirement for a central coordination
 Highly skilled
MOTIVATION
 Motivation is the willingness to do something and is
conditioned by this action’s ability to satisfy some need
for the individual.
 psychological processes that cause effort, direction, and
persistence of voluntary actions that are goal oriented
MOTIVATION
 Need is a physiological or psychological deficiency that
makes certain outcomes appear attractive.
 Motivated employees are in a state of tension. In order to
relieve this tension, they engage in activity. The greater the
tension is the greater the activity.
 THEORIES OF MOTIVATION

Two sets of motivation theories

 Early theories (need based theories)
 Maslow’s hierarchy of needs theory
 Alderfer’s ERG theory
 Theory X and Theory Y
 Herzberg’s Two-factor theory
 McClelland's learned needs theory
 Contemporary theories
 Equity theory/Organizational justice
 Expectancy theory
 Goal setting theory
 Reinforcement theory
 Self-Determination Theory
MOTIVATION…CONT’D

To improve motivation:
 Leaders should recognize individual differences among
employees
 Match people to jobs and responsibilities
 Use goals
 Individualize rewards whenever possible
 Link rewards to performance
THEORIES OF MOTIVATION

CARROT AND STICK

 use of rewards and penalties in order to induce desired
human behavior.
 It comes from the old story that to make a donkey move
one must put a carrot in front of it and if it does not move
beat it with stick from behind.
 MASLOW’S THEORY OF
MOTIVATION
 In 1943, Maslow wrote five fundamental human needs and their
hierarchical nature.
 Maslow stated that individuals have five needs which he arranged in
a hierarchy from the most basic level to the highest: physiological,
safety, belongingness and love, esteem, and self-actualization.
 The lower the needs in the hierarchy, the more fundamental they
are and the more a person will tend to abandon the higher needs in
order to pay attention to sufficiently meet the lower needs.
MASLOW’S HIERARCHY OF
NEEDS
 EXPLANATIONS
 Physiological needs are to do with the maintenance of
the human body.
 Safety needs are about putting a roof over our heads
and keeping us from harm.
 Belonging needs introduce our tribal nature. If we are
helpful and kind, others want us as friends.
 Esteem needs are for a higher position within a group.
If people respect us, we have greater power.
 Self-actualization needs are our greatest achievement.
 HOW DO THESE NEEDS AFFECT HUMAN BEHAVIOR?

 Two principles:
• The deficit principle holds that a satisfied
need is not a motivator of behavior
• The progression principle holds that a
need at one level does not become
activated until the next lower level need is
already satisfied
TWO-FACTOR THEORY (FREDERICK HERZBERG)

2–41
HERZBERG’S TWO FACTOR
THEORY
• Two factors:
 The satisfier factors (Motivators) - things relating to
the nature of the job itself
 The hygiene (dis-satisfiers) factors - things relating
more to the work setting
HERZBERG’S TWO FACTOR
THEORY…….
• Moreover, according to this theory, the opposite of satisfaction is
not dissatisfaction. Job satisfaction factors are separate and distinct
from job dissatisfaction factors.
2–44
 HERZBERG’S…CONT’D
• The two factor theory remains a useful reminder that
there are two important aspects of all jobs:
 Job content (intrinsic)-what people do in terms of job tasks, and
 Job context (extrinsic)- the work setting in which they do it.
• Herzberg’s advice to leaders are:
 Always correct poor context to eliminate actual or
potential sources of job dissatisfaction, and
 Be sure to build satisfier factors into job content to
maximize opportunities for job satisfaction.
 THEORY X AND THEORY Y (DOUGLAS
MCGREGOR)
Theory X
Assumes that employees dislike
work, lack ambition, avoid
responsibility, and must be
directed and coerced to perform.

Theory Y
Assumes that employees like
work, seek responsibility, are
capable of making decisions,
and exercise self-direction and
self-control when committed to
a goal.
2–46
 Having Little Ambition
Theory X Disliking Work
Managers See Workers As…
Avoiding Responsibility

Self-Directed
Theory Y
Enjoying Work
Managers See Workers As…
Accepting Responsibility
 Managerial
Managerial
Managerial Implication
Implication
Implication
If Theory Y holds true:
Decentralization and Delegation
Job Enlargement - Broadening the scope of job
Participative Management
Performance Appraisals – self & peer
If Theory X holds true:
people may not have reached the level of
maturity assumed by Theory Y and therefore may
need tighter controls that can be relaxed as the
employee develops.
COGNITIVE EVALUATION THEORY/ SELF-
DETERMINATION THEORY

Providing an extrinsic reward for behavior that had

been previously only intrinsically rewarding tends to
decrease the overall level of motivation.

2–49
EQUITY THEORY

Individuals compare their job inputs and outcomes with

those of others and then respond to eliminate any
inequities.

Referent
Referent
Comparisons:
Comparisons:
Self-inside
Self-inside
Self-outside
Self-outside
Other-inside
Other-inside
Other-outside
Other-outside
2–51
THE CONTROLLIGN FUNCTION
 DEFINITION OF CONTROL
 Controlling
– The process of measuring performance and taking action to
ensure desired results.
– Has a positive and necessary role in the management process.
– Ensures that the right things happen, in the right way, at the right
time.
• Importance of Controlling
– Adapting to changing conditions
– Limiting the magnification of errors

53
THE CONTROLLING PROCESS

54
 CONTROLLING PROCESS…
CONT’D
 Step 1 — establishing objectives and standards
– Output standards
• Measure performance results in terms of
quantity, quality, cost, or time.
– Input standards
• Measure effort in terms of amount of work
expended in task performance.

55
CONTROLLING PROCESS…
CONT’D
 Step 2 — measuring actual performance

– Goal is accurate measurement of actual

performance results and/or performance efforts.
– Must identify significant differences between
actual results and original plan.
– Effective control requires measurement.

56
THE CONTROLLING PROCESS…

 Step 3 — comparing results with objectives and standards

– Need for action reflects the difference between desired
performance and actual performance
– Comparison methods:
• Historical comparison
• Relative comparison
• Engineering comparison

57
CONTROLLING PROCESS… CONT’D

 Step 4 — taking corrective action

– Taking action when a discrepancy exists between
desired and actual performance.
– Management by exception
• Giving attention to situations showing the
greatest need for action.
• Types of exceptions
– Problem situation
– Opportunity situation

58
TYPES OF CONTROLLING
 Feed forward controls/Preventive/Steering/ Preliminary
– Employed before a work activity begins.
– Ensures that:
• Objectives are clear.
• Proper directions are established.
• Right resources are available.
– Focuses on quality of resources.

59
TYPES OF CONTROLLING…
CONT’D

 Concurrent controls …
– Focus on what happens during work process.
– Monitor ongoing operations to make sure they are
being done according to plan.
– Can reduce waste in unacceptable finished products
or services.

60
TYPES OF CONTROLLING…
CONT’D

 Feedback controls/Post-Action/ Output Control

– Take place after work is completed.

– Focus on quality of end results.
– Provide useful information for improving future operations.

61
TYPES OF CONTROLLING…
CONT’D

Yohannes Neda
62
TYPES OF CONTROLLING… CONT’D

• Cybernetic and Non-cybernetic Controls

• A cybernetic control system is a self-regulating control system that, once
it is put into operation, can automatically monitor the situation and take
corrective action when necessary
• A non-cybernetic control system is a control system that relies on human
discretion as a basic part of its process.

<#>
CHARACTERISTICS OF AN EFFECTIVE CONTROL
SYSTEM
• Future–Oriented
• Multidimensional
• Economically Realistic/
Cost Effective
• Accurate
• Acceptable to
Organization Members
• Timely
• Organizationally
Realistic
• Flexible
• Focus on Critical
Control Points
• Easy to Understand
• Emphasis on Exception
• Reliability and Validity
<#>