CHAPTER 7

THE DIRECTING / LEADING FUNCTION

7.1 Meaning and Need for Leadership

Meaning: Leadership can be defined in different ways according to different writers. Some are:
Leadership is the process of influencing others toward the achievement of organizational
objectives. This definition recognizes that leadership is typically an on going activity, is oriented toward having
an impact on the behaviors of others, and is ultimately focused on realizing the specific aims of the
organization.
Leadership is the process of influencing a group or individual to set a goal or achieve a goal. It
is a process involving the leader, the led (group or individual), and a practical goal or a situation. It is
behavioral in nature and involves personal interaction.
Leadership is the art or process of influencing people so that they will strive willingly and enthusiastically
toward the achievement of organizational or group goals.
Leadership is the ability to secure desirable actions from a group of followers voluntarily without
the use of coercion or force.
As we can see from the above definitions, leadership has three ingredients: leader, led (follower) and goal
(situation) – organizational Environment.
Leader - the one with the ability/capacity to understand others’ motivation and to inspire them with the ability
to create a climate for motivation.
Follower (led) - the individuals being led or influenced
Environment- the working environment in which the leader interacts with the followers.
Leading is the management function aimed at setting the members of an organization move in the direction that
will achieve its objectives. Directing builds a climate, provides leadership and arranges the opportunity for
motivation. Leading is not deriving or pushing from behind; it is placing oneself before the group and
facilitating progress and inspires followers to accomplish organizational (group) objectives.

Leadership versus Management

Management is a broad subject that encompasses activities such as planning, organizing, staffing, directing, and
controlling. Leadership, on the other hand, focuses almost exclusively on the ‘people’ aspects of getting a job
done-inspiring, motivating, directing, and gaining commitment to organizational activities and goals.
Leadership accompanies and complements the management functions. In short, management influences brain,
while leadership encourages the heart and the spirit.

The Need for Leadership

The need for leadership can be explained by the fact that organizations will never be successful unless they
have effective and efficient leaders. The effectiveness and efficiency of leaders is nothing but to create
conducive environment in the organization. Whatever amount of capital invested and technology an
organization has, without effective leadership the organization will not be successful.
The importance of the directing function in the organization can be presented as follows:
• Directing initiates actions by giving directives and guidance to employees.

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• Directing integrates employees’ effort by coordinating actions of the members and leading
toward the objectives.
• Directing attempts to get the maximum output of individuals by providing ways to fully
utilize the potentials and capabilities of employees.
• Directing facilitates changes by incorporating (adopting) environmental and internal
changes into the organization
• Directing provides stability by balancing the different parts of the organization so that it
exists for a long period and its parts work in a harmonious ways.

The directing function enables subordinates to contribute their best to attain the goal of the organization. Thus,
managers should try to integrate both organizational and individual objectives in order to get the work done by
subordinates. Managers must be good leaders (by providing effective leadership) to guide, counsel, and
influence subordinates so as to win their confidence and acceptance.

How leaders influence others?

Why do people accept the influence of a leader? One major reason is that leaders have power.
Power is the capacity to affect the behavior of others, in other words, power is the ability of individuals or
groups to induce or influence the beliefs or actions of other persons or groups. It is a resource or patronage an
individual has at his/her disposal to stage-manage others towards a wanted behavior. Having power can increase
the effectiveness of a manager by enabling the manager to influence people to what is wanted. Leaders in
organizations typically rely on some or all of five major types of power: legitimate, reward, coercive, expert and
referent.

1. Legitimate power/position power refers to the power a leader possesses as a result of occupying a
particular position or role in the organization, i.e. it is a power that stems from a position’s placement in the
managerial hierarchy. It corresponds to authority. Legitimate power exists when a subordinate or the influenced
acknowledges that the influencer has a “right” or is lawfully entitled to influence within certain bounds. It is
related to the position, rather than to the person personality, so it is clearly a function of the leader's position in
the organization and is completely independent of any of the leader's personal characteristics. Thus, the higher a
manager is in the organizational hierarchy, the greater is the “perceived power” thought by subordinates.

2. Reward Power refers to the leader's capacity to give or withhold rewards for followers. It is
based on the capacity to control and provide valued rewards to others. Rewards that may be under the control of
individual manager include salary increases /pay raises, bonus, interesting projects, promotion
recommendations, a better office, support for training programs, assignments with high responsibility in the
organization, recognition, positive feedback etc. Purchasing agents, with little position power; might be able to
exercise considerable influence by their ability to expedite or delay a much-needed spare part. Or University
professors have considerable reward power; they can grant or withhold high grades. The greater a manager’s
control over valued rewards, the greater the manager's reward power and the more power to influence.

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3. Coercive Power is a power based on fear. It is the negative side of reward power. Coercive power is the
ability to coerce or punish the influencees/followers when they do not engage in desired behaviors. Forms of
coercion or punishment include criticisms, terminations, reprimands, suspensions, warning letters that go into
an individual’s personnel file, negative performance appraisals, demotions and withheld pay raises;
(punishment may range from loss of a minor privilege to loss of one's job). Coercive power is usually used to
maintain a minimum standard performance or conformity among subordinates. The greater the freedom to
punish others, the greater a manager’s coercive power. And the more coercive power a manager uses, the more
resentment and opposition s/he faces from subordinates.

4. Expert Power refers to power that a leader possesses as a result of his or her knowledge and expertise
regarding the tasks to be performed by subordinates. It is power based on the possession of expertise,
knowledge, skill or information. To the extent that a leader possesses expertise and information that is needed
or desired by others, the leader has expert power. Physicians, lawyers, and university professors may have
considerable influence on others because they are respected for their special knowledge. A manger who is
capable of achieving an important methodological break through that no other companies dreamed of and a
secretary who knows how to unreveal or reveal bureaucratic red tape all have expert power over any one who
needs that information.

5. Referent Power / Charismatic Power is power that results from being admired, personally identified with
or liked by others. When we admire people, want to be like them, or feel friendship toward them, we more
willingly follow their directions and exhibit loyalty toward them. For example, a Movie Star, a Great Athlete, a
Great Football Player, a Musician or a Military Hero might possess considerable referent power.

 The strength of referent power is directly related to such factors as the amount of prestige and admiration
the influence confers up on the influencer.
 The more that a leader is able to cultivate the liking, identification, and admiration of others, the greater
the referent power.
 The more power a leader has at his/her disposal, the more likely that s/he will be successful in
influencing followers to do the work assigned to them except coercive power.

Although all five types of power are potential means of influencing others, in actual usage they may engender
somewhat different levels of subordinate motivation. Subordinates can react to a leader’s direction with
commitment, compliance, or resistance. With commitment, employees respond enthusiastically and exert a high
level of effort toward organizational goals. With compliance, employees exert at least minimal efforts to
complete directives but are likely to deliver average, rather than stellar, performance. With resistance,
employees may appear to comply but actually do the absolute minimum, possibly even attempting to sabotage
the attainment of organizational goals.
Major sources of leader power and likely subordinate reactions
Authority versus Power
Authority Power

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1. It is positional – it will be there 1. It is personal-it exists because of the person.
when the incumbent leaves.
2. Narrower – it is one type of power 2. Broader
3. It changes with changes in position. 3. Some types of power do not change
(Expert, referent) but some change legitimate,
reward, coercive.
4. Authority is delegated to an individual 4. Not all power types can be delegated (Expert and referent).
by superiors.

7.2 Leadership Theories

A. Trait Theory
Traits are distinctive internal/personal qualities or characteristics of an individual, such as physical (height,
weight, appearance, health, etc), personal (self-confidence, dominance, adaptable, extroversion/sociability,
originality etc) and mental (intelligence, creativity, knowledge, technical competence etc). A leader trait is a
physical or personality characteristic that can be used to differentiate leaders from followers.

Trait theory attempts to find traits that make a leader. That is, it is a theory, the old approach, which focused on
identifying the personal traits that differentiated leaders from followers. Trait theory originated from an ancient
theory called “Great Man” theory that assumes that “leaders are born not made”-a belief dating back to the
ancient Greeks and Romans.
The idea in trait theory was to see whether certain traits would predict the individuals who would emerge (be
identified by members of the group) as leaders.
In searching for measurable leadership traits, researchers took two approaches:
1. They attempted to compare the traits of those who emerged as leaders with the traits of those who did
not.
2. They attempted to compare the traits of effective leaders with those of ineffective leaders.

Studies that were conducted on the first category have failed to distinguish/uncover any traits that clearly and
consistently distinguish leaders from followers. Leaders as a group have been found to be somewhat taller,
brighter, more extroverted, persistent and more self-confident than non-leaders. However, millions of people
have these traits, but most of them obviously will never attain a leadership position. In addition, many
established leaders did not and do not have these traits. (Napoleon, for example, was quite short, and Lincoln
was moody and introverted.) Interestingly enough, studies have also found that people who are too intelligent
compared with other group members do not emerge as leaders-perhaps because they are too different or too far
removed from the group.

Studies that were conducted on the second category have generally failed to isolate traits that are strongly
associated with successful leadership.
Generally, the efforts to identify universal leadership traits ran into difficulties for the following reasons:
1. Not all leaders possess all the traits and many non-leaders may possess most of the traits.
2. It gives no guidance as to the magnitude of each trait for a person to be a leader.

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3.No agreement has been reached as to what their relationships are to the actual instances of leadership.
4. Traits tend to be a chicken-and-egg proposition i.e. Successful leaders may display traits such as good
vocabulary, education and self-confidence after they have assumed leadership positions.

B. Behavioral Theories
When it became evident that effective leaders did not seem to have any distinguishing traits or characteristics,
researchers tried to isolate the behaviors that made leaders effective. In other words, rather than try to figure out
what effective leaders were, researchers tried to determine what effective leaders did, how they delegated tasks,
how they communicated with and tried to motivate their subordinates, how they carried out their tasks, and so
on. This tries to answer the questions “What do effective leaders do? What ineffective leaders don't do? How
do subordinate react emotionally and behaviorally (performance) to what the leader does?"

Two major dimensions of leader behavior emerged from this body of research; one deals with how leaders get
the job done and the other deals with how leaders treat and interact with their subordinates.

i. The University of Michigan Studies

Through interviewing leaders and followers, researchers at the University of Michigan identified two distinct
styles of leadership, referred to as .job-centered and employee - centered.
The job-centered leader practices close supervision on the subordinates’ performance. This leader relies on
coercion, reward, and legitimate power to influence the behavior and performance of followers.
The employee-centered leader believes in delegating authority and supporting followers in satisfying their
needs by creating a supportive work environment. The employee centered leader is concerned with followers',
their personal advancement, growth and achievement.
ii. The Ohio State Studies
These studies isolated two leadership factors, referred to as initiating structure and consideration.
Initiating structure involves behavior in which the leader organizes and defines the relationship in the
group, tends to establish well-defined patterns and channels of communication, and spells out ways of
getting the job done.
Consideration involves behavior indicating sensitiveness to subordinates, respect their ideas and feelings,
and establishes mutual trust and friendship between the leader and the followers.

In short, the behavioral theory attempted to identify effective leader behaviors that would work in every
situation. But researchers found that leader behaviors that worked best in one situation were not often as
effective in other situations.

C. The Contingency /Situational Leadership Theory

Situational leadership theory grows out of an attempt to explain the inconsistent findings about traits and
styles /behaviors. Situational theory proposes that the effectiveness of a particular style of leader behavior
depends on the situation. As situations change, different styles become appropriate. This directly changes the
idea of one best style of leadership. In other words, the contingency/situational theory holds that appropriate

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leader traits or behaviors are contingent or dependent on relevant situational characteristics. More specifically,
the contingency leadership theory states that, leadership is the result of the interaction of:
a.Leaders: behavior and competence
b.Followers: behavior and competence
c. Situations: situational variables such as job characteristics, organizational policies, leaders member
relations (the extent to which a leader has the support of group members), position power (the amount of power
that the organization gives the leader to accomplish necessary tasks).

Theory X and Theory Y Assumptions about People

A manager’s philosophy about work and the people who perform the work will influence his/her approach to
leadership. Douglas McGregor has hypothesized two sets of assumptions about people that serve as a
philosophical base for leadership action. These are Theory X and Theory Y Assumptions.

Theory X – pessimistic and negative

A manager basing an operating philosophy on Theory X would impose a directive leadership style on the
individual or work group s/he is supervising. Coercion, negative motivation, and refusal to allow employee
participate in decision-making would probably be the actions of the manager.
Why? Because the manager assumes:
- The average human being has an inherent dislike of work and will avoid it if s/he can-workers are lazy.
- Because of this dislike, most people must be coerced, controlled, directed, and threatened with punishment to
get them to put forth adequate effort toward the achievement of organizational objectives.
-The average human being prefers to be directed, wishes to avoid responsibility, has relatively little ambition
and wants security above all.

McGregor’s Theory X view of human nature holds that the dislike of work is so great that even the promise of
rewards will not overcome it. “People will accept the rewards and demand continually higher ones, but these
alone will not produce the necessary effort. Only the threat of punishment will do the trick.

Theory Y- adopts a developmental approach/ modern + positive set of assumptions

A manager with Theory Y assumption will prepare him/herself to work with people as individuals, to involve
people in the process of decision-making, to openly encourage people to seek responsibility and to work with
people achieve their goals.
Why? Because the manager assumes:
- The average human being does not inherently dislike work; the physical and mental effort involved is as
natural as play or rest.
- External control and threat of punishment are not the only means for bringing about effort toward
organizational objectives. A person will exercise self-direction and self control in the service of objectives to
which s/he is committed.
- People generally become committed to organizational objectives if they are rewarded for doing so.
- The average human being learns, under proper conditions, not only to accept, but also they seek
responsibility.

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- Many people have a relatively high degree of imagination, ingenuity, and creativity in the solution of
organizational problems.
- The average person’s intellectual potential is only partially utilized under the conditions of modern
industrial life.
The assumptions in Theory Y have remarkably different implications for managers than do those of Theory X.
Instead of blaming poor performance on basic human nature, Theory Y places squarely on management the
responsibility for tapping the reservoir of creativity, hard work, and imagination. The worker’s performance is
limited only by management’s ability to use human resources effectively. Theory Y also has implications for
decision-making. Because it recognizes worker’s intellectual potential, this philosophy suggests that
organizational goals are best achieved if workers have voice in decisions. Participatory decisions making is
especially important as it relates to a person’s job. In addition, Theory Y view of human nature implies that a
manager’s role is not to manipulate workers; rather, it is to create an atmosphere in which workers can use their
commitment and involvement to satisfy their personal needs as well as those of the organization.

7.3 Leadership Styles

The focus on finding leadership style (behavior patterns of leaders) is on the relationship between leaders’
action and the reaction of subordinates emotionally and behaviorally. A manager’s leadership style is composed
of three parts:
i. How the manager chooses to motivate subordinates
Motivation approach
Positive Negative
Responsibility Threats
Recognition Coercion
Praise Fines
Security Suspensions
Monetary Rewards Termination
ii. His/her decision-making style: the degree of decision-making authority the manager grants to subordinates.
iii. His/her areas of emphasis (orientation) in the work environment: Task orientation, employee orientation

Based on the above points there are three types of leadership styles: Autocratic, Democratic, and Laissez-faire.
1. Authoritarian/Autocratic Leadership Style
It is closely associated with the classical approach to management. The manager who follows this style is
dogmatic and leads by the ability to withhold or give rewards and punishment, i.e. motivation is through
incentives and fear. In this style, decision-making is solely by the manager, in other words, the leader retains all
authority and responsibility. In the extreme case, the manager makes the decision and announces it to the work
group. There is no opportunity for input into the decision-making process by the subordinates and
communication is primarily downward. Variations of this approach find the manager making the decision and
then “Selling” it to employees or making the decision and allowing the group the opportunity to ask questions.
The autocratic leader is task-oriented and places little value on showing consideration to subordinations as a
leadership technique. The Autocratic manager uses Theory X assumption as his philosophical base for
leadership.

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There are situations where managers are compelled/ forced to use this leadership style. Some are:
a.When there is a need to influence subordinates in favor of organizational objectives which has an effect on
individuals.
b.When subordinates are new, they need to be directed.
c.When the situation calls for unilateral decision-making – perhaps there is no enough time for quality input
from subordinates or the subordinates may lack information.

Limitations
 Employees’/subordinates’ ideas will not be used to solve organizational problems, which in
some cases subordinates may have better ideas than the superior about a particular problem.
Subordinates would be demotivated, i.e. It may suppress individual initiative
 Poor implementation of decisions
2. Democratic/Participative Leadership Style
In this leadership style, the manager involves subordinates in making organizational decisions, shares problems
with them and shares authority to reach a decision. Subordinates take part in the decision-making process
through consultation. The leader delegates a great deal of authority while retaining ultimate responsibility.
Active two-way communication (upward and downward) exists. The democrat leader uses Theory Y
assumption as his/her philosophical base for leadership.

Limitations
1) Subordinates may be too involved to influence the manager even when there is no need.
2) The manager may not be able to influence the subordinates to the extent needed.
However, the major advantage of this leadership style is that, it enhances personal commitment through
participation.
The advantages of democratic leadership style are the disadvantages of the autocratic leadership style after we
make them opposite.

3. Laissez-Faire/Free-Rein Leadership Style

In this leadership style, leaders generally give the group complete freedom, provide the necessary materials,
participate only to answer questions, and avoid decision-making whenever possible. The leader either sets limits
and the followers work out their own problems, or the individuals set their own goals. In this style, leaders
depend largely on subordinates to set their own goals and the means of achieving them, and they see their role
as one of aiding the operations of followers by furnishing them information and acting primarily as a contact
with the groups external environment, i.e. the leader’s role is to serve as a logistics specialist or representative
of the group to outside groups. The leader denies responsibility and abdicates authority to the group.

The application of Laissez-Faire style can be found with individuals or groups that the manager views as being
knowledgeable, independent, or motivated. Additionally, if the work group is composed of high achievers, or is
highly research oriented, this style has potential benefits.
Primarily horizontal communication among peers exists.

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Limitations
• Group may drift aimlessly in the absence of direction from leader.
• It may make things out of control.

Advantages
-It gives quite freedom for subordinates
-It gives much responsibility and self guidance for subordinates
- It permits self-starters to do things as they see fit without leader
4. Situational Leadership style
The situational leadership style states that for a manager to be democrat, autocratic or laissez-faire, situations
force him/her.

7.4 Motivation
7.4.1 The Concept of Motivation
The term motivation derived from the Latin word movere meaning “to move.” In the present context,
motivation represents “those psychological processes that cause arousal, direction, and persistence of voluntary
actions that are goal oriented. Managers need to understand these psychological processes if they are to
successfully guide employees toward accomplishing organizational objectives.
 Motivation is an internal force that energizes behavior, gives direction to behavior, and underlies the
tendency to persist. This definition of motivation recognizes that in order to achieve goals, individuals must be
sufficiently stimulated and energetic, must have a clear focus or end in mind, and must be willing and able to
commit their energy for a long enough period of time to realize their aim. Since the leading function of
management involves influencing others to work toward organizational goals, motivation is an important aspect
of that function.

Because motivation is an internal force, we cannot measure the motivation of others directly. Instead, we
typically infer whether or not other individuals are motivated by watching their behavior. As managers analyze
their workforces, they can always see some people who outperform others of equal skill. A closer look might
reveal instances in which a person with outstanding talents is consistently outperformed by someone having
lesser talents. Why? These latter employees appear willing to exert more effort, to try harder, to accomplish
their goals, often these hard workers are described by their bosses as “motivated employees.” Motivated
individuals work hard, persist and are goal oriented.
Motivators
Motivators are things, which induce an individual to perform. While motivation reflects wants, motivators are
the identified rewards, or incentives that sharpen the derive to satisfy these wants. They are also the means by
which conflicting needs may be reconciled or one need heightened so that it will be given priority over another.
A motivator is something that influences an individual’s behavior. It makes a difference in what a person will
do.

The Motivation Cycle

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The starting point in this cycle is a need or a deficiency or a state of felt deprivation an individual experiences at
a particular time. This deficiency causes tension (physiological or psychological in balance), which will be
modified by one’s culture and personality to cause certain wants leading /motivating the individual to some
kind of goal directed behavior. This leads to satisfaction and one cycle of motivation will be completed.
The Motivation Process
1
Need deficiency

3 2
Need Goal Directed behavior
satisfaction

From this we can understand that deficiency triggers a drive for need satisfaction, which causes an individual to
take a certain course of action that will alleviate a need and reduce a drive. The need for food for example will
result in hunger and hunger will drive or motivate the individual to take action (eating food), which will achieve
the goal. This goal attainment will restore the physiological or psychological balance and reduce or cutoff the
drive for food.

Motivation Vs Satisfaction
Motivation refers to the drive and effort to satisfy a want or a goal. Satisfaction refers to the contentment
experienced when a want is satisfied. In other words, motivation implies a drive toward an outcome, and
satisfaction is the outcome already experienced.
Motivation Results
Satisfaction

Motivation and Performance

All too often, motivation and performance are assumed to be one and the same. This faulty assumption can lead
to poor managerial decisions. The following formula for performance helps put motivation into proper
perspective:

Performance = Ability x Motivation x Environmental conditions

Thus, we see motivation is a necessary but insufficient contributor to job performance. The multiplication sign
is used to emphasize how a weakness in one factor can negate the other. The above relationship between
performance and motivation clearly shows us that managers should hire individuals who have the ability to do
what is required. After that, the management challenge is providing environmental conditions that nurture and
support individual motivation to work toward organizational goals. Keeping other variables constant,
motivation and performance have neither positive nor negative relationship. As motivation increases, job
performance increases, reaches its maximum and the decreases.
Look at the following graph, after the optimal point further motivation brings about anxiety, tenseness,
fretfulness, and the anxiety eventually decreases performance.

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 Performance
Optimal/maximum

Motivation

7.4.2 Theories of Motivation

A. Carrot and Stick Approach
This metaphor relates the 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.
Despite all the researches and theories of motivation that have come to the fore in recent years, reward and
punishment are still recognized/considered by strong motivators. For centuries, however, they were too often
thought of as the only forces that could motivate people.

Carrot - money in the form of pay or bonuses.

Stick – fear such as fear of loss of job, loss of income, reduction of bonuses demotion or some other penalty.
Failures of carrot and stick approach
1. Carrot can be obtained by any member of the organization without differentiation in
performance – through such practices as salary increases and promotion by seniority, automatic “merit”
increases, and executive bonuses not based on individual manager performance. It is as simple as this: If a
person put a donkey in a pen full of carrots and then stood outside with a carrot, would the donkey be
encouraged to come out of the pen?
2. Stick in the form of fear is not the best kind of motivating factor. It often gives rise to defensive
or refectory behavior, such as union organization, poor quality work, executive indifference, failure of a
manager to take any risk in decision-making, or even dishonesty.
B. Money as a Motivator
Even if under the carrot and stick approach money as a sole motivator has been criticized, it is used as a
motivator (motivating factor) but not the only one. Money can be used as a motivator under the following
conditions.
- For people who have low-level standards of living and who badly need it for their life.
- When the amount is so significant that the organization uses it for competitive purposes.
- When the payment is so differentiated that even at equal position discriminatory payment is made for
people with different levels of performance.
C. Maslow’s Need Hierarchy
One of the most widely mentioned theories of motivation is the hierarchy of needs theory put forth by
psychologist Abraham Maslow. Maslow proposed that motivation is a function of needs, and he also proposed

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that human needs are arranged hierarchically (in a form of hierarchy). The hierarchy of needs is based on four
premises:

1. Only an unsatisfied need can influence behavior; a satisfied need is not a motivator. What
motivates a person is what s/he does not have but not what s/he has.
2. A person’s needs are arranged in a priority order of importance. Thus, the priorities
(hierarchy) go from the most basic needs to the most complex.
3. As the person’s needs are met on one level, the person advances to the next level of needs.
S/he will focus on the first level need until it is minimally satisfied before moving to the next level.
4. If satisfaction is not maintained for a once-satisfied need, it will become a priority need
again.

Based on the above premises, Maslow proposed that human needs form a five-level hierarchy.
1. Physiological Needs: These are the basic needs for sustaining human life itself, such as food, water,
air, shelter, sleep, etc. Maslow took the position that until these needs are satisfied to the degree necessary to
maintain life, other needs will not motivate people. In other words, As Maslow points out, a person lacking
food, love and esteem wants food more than he/she wants acceptance or prestige. These other needs would be
unimportant. In the working environment, management tries to satisfy these needs primarily through salary and
by eliminating threats to physical safety.
2. Safety /Security Needs: When physiological needs are satisfied, safety needs become a priority as a
motivator. Safety needs include freedom from fear and anxiety, job security, desires for retirement and
insurance programs and so on. As with physiological needs, management attempts to satisfy safety needs
primarily through salary.
3. Social/ Love/ Affiliation Needs : Once we feel reasonably safe and secure, we turn our attention to
relationships with others in order to fulfill our belongingness needs, which involve the desire to affiliate with
and be accepted by others i.e. the need for friendship, companionship, and a place in a group. Love needs
include both giving and receiving. These needs are met by frequent interaction with fellow workers and
acceptance by others.
4. Esteem Needs: Esteem needs include the desire for both self-esteem (self respect) and public
esteem, and recognition by others. These needs take two different forms. First, we have a need for competency,
confidence and independence. We also want the prestige, status, recognition and appreciation that others bestow
on us. Satisfying esteem needs produces self-worth-pride, self-confidence, and true sense of importance; not
satisfying them produces feelings of inability and inadequacy- feeling of inferiority, weakness and helplessness.
Esteem needs can be met in an organization through recognition by peers and superiors of the person’s work, by
acquiring organizational titles and by the accomplishment of work projects.
5. Self-Actualization/Realization Needs
Refers to the need for fulfillment, the desire to become what one is capable of becoming-to maximize one’s
potential and to accomplish something. For the athlete, it may be breaking a world’s record; for the research
scientist, it may be finding a cure for HIV/AIDS; and for the physical therapist, it may be the satisfaction of
helping a child walk or laugh for the first time. In other words, these needs differ greatly from person to person.

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Maslow’s theory suggested that people must satisfy lower-level (physiological needs) before working toward
higher-level needs. Only when physiological, security, and social needs have been more or less satisfied do
people seek esteem. This theory also suggests that if a lower-level need is suddenly reactivated, the individual
will try to satisfy that need rather than higher-level needs.

Maslow’s hierarchy, although intuitively appealing and frequently used in management training, has not found
widespread support from management researchers. Beyond the first two basic needs, people vary in their need
emphasis. Some may seek social-need satisfaction, while others may emphasize esteem needs or self-
actualization needs. Thus, each individual may respond differently to organizational characteristics. Moreover,
the steps in Maslow’s hierarchy may not be necessarily experienced in a sequential manner. People may have
more than one need at the same time. Situations detect which needs are most important at a given point in time.

D. Herzberg’s Two Factor Theory

Herzberg developed a theory known as the two-factor theory of motivation. The initial framework for the
two-factor was derived from interviews with accountants and engineers using what is known as the critical-
incident method. The accountants and engineers were asked to provide interviewers with examples of time
they felt exceptionally good or exceptionally bad about their jobs or job related issues that made them feel
good or bad.

According to the analysis, although an unpleasant work environment might be a reason given for job
dissatisfaction, a pleasant work environment is rarely cited as a reason for job satisfaction. This suggested
that job satisfaction and job dissatisfaction are not simple opposites. Traditionally, managers viewed job
satisfaction and job dissatisfaction as opposite ends. In contrast, Herzberg's findings suggested the opposite
of satisfaction is not dissatisfaction, but rather ‘no satisfaction’. Herzberg believed that two entirely
separate sets of factors contribute to an employee’s behavior at work.

Herzberg labeled the factors that produced job satisfaction as motivators. His analysis indicated these
factors are directly related to job content. The absence of motivational factors may not result in
dissatisfaction, but their presence is likely to motivate employees to excel. When motivators are absent,
workers are neutral toward work, but when motivators are present, workers are highly motivated and
satisfied. Herzberg labeled the factors that led to job dissatisfaction as hygienes and found they are related
more to the work setting, or job context, than to job content. These factors do not necessarily motivate
employees to excel, but their absence may be a potential source of dissatisfaction, low morale, and high
turnover. When hygiene factors are poor, work is dissatisfying. However, good hygiene factors simply
remove the dissatisfaction; they do not by themselves cause people to become highly satisfied and
motivated in their work.

Herzberg's Motivators and Hygiene's

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Motivators Leading to Job satisfaction Hygienes Leading to Dissatisfaction

• Achievement • Policies and administration

• Recognition • Supervision
• Work it self • Relations with peers
• Responsibility • Working Condition
• Advancement
• Personal growth • Job Security

Thus, to the degree that motivators are present in a job, satisfaction will occur, when absent, motivators do
not lead to dissatisfaction. And, to the degree that hygienes are absent from a job, dissatisfaction will occur,
when present hygienes prevent dissatisfaction but do not lead to satisfaction.
Communication
Communication is the process of transmitting information among two or more people. It is the glue that holds
organizations together. Communication assists organizational member to accomplish both individual and
organizational goals, implement and respond to organizational change, coordinate organizational activities, and
engage in virtually all organizational relevant behaviors. It would be extremely difficult to find an aspect of a
manager's job that does not involve communication. In other words communication is unavoidable in an
organization's functioning. By its very nature a manager's job requires communication. The success of every
manager and every organization depends on communication because in any undertaking involving two or more
persons, it is essential for the coordination of individual activities.

Formal and Informal Communications

1. Formal communication
This is a communication, which is intentionally designed by the organization. Information flows through
the formally established channel and is concerned with work related matters. Formal communication
includes; Downward communications, Upward communication, Horizontal communication, and
Diagonal communication.

a. Vertical communication is communication that involves a message exchange between two or more
levels of the organization hierarchy. Vertical communication can involve a manager and a subordinate or can
involve several layers of the hierarchy. It includes downward and upward communications.

b. Downward communication occurs when information is transmitted from higher to lower levels in an
organization. Downward communication starts with top management and flows down through the management
levels to line workers and non-supervisory personnel. The major purposes of downward communication are to
provide organization members with information about organizational goals and policies. The kinds of media
used for downward communication include instructions, speeches, meetings, the telephone, grapevine,
memoranda, letters, handbooks, pamphlets, policy statements, procedures, etc.

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c. Upward communication – in such situations, the communicator is at a lower level in the organization
than the receiver. In other words, information flows from the subordinates to the superior. The main function of
upward communication is to supply information to the upper levels about what is happening at lower levels. It
includes the flow of opinions, ideas, complaints, progress reports, suggestions, explanations, and requests for
aid or decisions and other kinds of information from subordinates up to managers. Typical means for upward
communication besides the chain of command are suggestion systems, appeal and grievance procedures,
complaint systems, counseling sessions, group meetings, etc.

d. Horizontal communication is lateral message exchange either within work unit boundaries,
involving peers who report to the same supervisor, or across work unit boundaries, involving individuals who
report to different supervisors. It takes place among departments or people on the same level of hierarchy. It is
useful to coordinate activities. Horizontal communication can take many forms, including meetings, reports,
memos, telephone conversations, and face-to-face discussions between individuals.

e. Diagonal communication involves the flow of information among departments or individuals on

different levels of the hierarchy. This occurs often in the case of line and staff departments, in which the staff
has functional authority. It is also common to find diagonal communication among line departments, again in
which one of them has functional authority. The use of diagonal channel would minimize the time and effort
expended by the organization (upward and then horizontal).

2. Informal Communication
It is a communication, which is not deliberately designed by the organization. It is rather created by informal
groups in order to satisfy their need to interact and share information among themselves. In the informal
communication, information flows in unstructured and unpredictable ways. In other words, it is a structure
less network. Informal communication channel is commonly termed as grapevine because of its structure less
direction of flow. Normally the information which flow in grave vine is considered to be secret or
confidential.

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