Chapter one

General overview to leadership

Introduction

People are the most important source in an organization. To achieve organizational

objectives HR should be directed towards the accomplishment of goals. Hence, the
successful achievement of organizational objectives is greatly the manifestation of
the managers’ ability to lead employees. Effective leadership and good governance
determines the development of organizations and nations at large. Now, a good
leader or governor will not disappoint his followers, he must have the interest of
his people at heart, he must be passionate, feel the pains of the poor, hear the cry of
the helpless and come for help, create job opportunities for jobless people. A good
leader must be able to render selfless service and desist from selfishness, he must
make provision for training and empowering his people and encourage self-
employment, he must be serious with issues that concerns the youths as they are
the future leaders and should not look down on the adults.

By the way, what is leadership? What is the difference between leadership and
management? What are the characteristics of good leaders? What are the
contributions of effective leaders for good governance? Dear students! In this
chapter, you will get all the answers for the above questions. This chapter deals
with the meaning the nature, definition, the difference between leadership and
management, characteristics of good leaders and contribution of effective leaders
for good governance.

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 1.1 Meaning of Leadership

There are almost as many definitions of leadership. Dictionaries define leading as

"guiding and directing on a course" and as "serving as a channel." A leader is
someone with commanding authority or influence. For the longest time, leadership
was viewed as the domain of battle and sport fields. Researchers, for their part,
have developed many working definitions of leadership. Although these definitions
share much in common, they each consider different aspects of leadership. Some
define leadership as an integral part of the group process. Others define it primarily
as an influence process. Still others see leadership as the initiation of structure and
the instrument of goal achievement. Several even consider leaders to be servants of
their followers. Leadership is a process by which a person influences others to
accomplish an objective and directs the organization in a way that makes it more
cohesive and coherent.
Leaders carry out this process by applying their leadership attributes, such as
beliefs, values, ethics, character, knowledge, and skills.Therefore, Leadership can
be observed, studied, dissected, and learned from so many sources, angles, and
analogies.

Keeping the above definitions, there are other complementary definitions for
leadership which are forwarded by different scholars and researchers as they
depicted here under:

 “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.”(Hemphill & Coons, 1957, pg. 7)

 Leadership is “the influential increment over and above mechanical compliance

with the routine directives of the organization.” (Katz & Kahn, 1978, pg. 528)

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 “Leadership is exercised when persons . . . mobilize . . . institutional, political,
psychological, and other resources so as to arouse(kakaasu), engage, and satisfy
the motives of followers.” (Burns,1978, pg. 18)

 “Leadership is realized in the process whereby one or more individuals succeed

in attempting to frame and define the reality of others.” (Smircich& Morgan,
1982, pg. 258)

 Leadership is “the process of influencing the activities of an organized group

toward goal achievement.” (Rauch & Behling, 1984, pg. 46)

 “Leadership is about articulating visions, embodying values, and creating the

environment within which things can be accomplished.”(Richards & Engle,
1986, pg. 206)

 “Leadership is a process of giving purpose (meaningful direction) to collective

effort, and causing willing effort to be expended to achieve purpose.” (Jacobs
&Jaques, 1990, pg. 281)

 “Leadershipis the ability to step outside the culture . . . to start evolutionary

change processes that are more adaptive.” (Schein, 1992, pg. 2)

 “Leadership is the process of making sense of what people are doing together so
that people will understand and be committed.” (Drath&Palus, 1994, p. 4)

 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, pg. 184)

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These definitions suggest several components central to the phenomenon of
leadership. Some of them are as follows:
(a) Leadership is a process,
(b) leadership involves influencing others,
(c) leadership happens within the context of a group,
(d) leadership involves goal attainment, and these goals are shared by leaders and
their followers.
” Defining leadership as a process means that leadership is a transactional
event that happens between leaders and their followers i.e. leaders affect and
are affected by their followers either positively or negatively. It stresses that
leadership is a two-way, interactive event between leaders and followers
rather than a linear, one-way event in which the leader only affects the
followers. Defining leadership as a process makes it available to everyone
not just a select few who are born with it. More important, it means that
leadership is not restricted to just the one person in a group who has formal
position power (i.e., the formally appointed leader).
” Leadership is about influence-the ability to influence your subordinates,
your peers, and your bosses in a work or organizational context. Without
influence, it is impossible to be a leader. Of course, having influence means
that there is a greater need on the part of leaders to exercise their influence
ethically.
” Leadership operates in groups. This means that leadership is about
influencing a group of people who are engaged in a common goal or
purpose.
” Leadership includes the achievement of goals. Therefore, leadership is
about directing a group of people toward the accomplishment of a task or the
reaching of an endpoint through various ethically based means. Leaders
direct their energies and the energies of their followers to the achievement of
something together—for example, hockey coaches working with their

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 players to win a championship, to win their conference, to have a winning
(better than 0.500) season, or to have a better won-lost percentage than last
season. Thus, leadership occurs, as well as affects, in contexts where people
are moving in the direction of a goal.
” Leaders and followers share objectives. Leadership means that leaders work
with their followers to achieve objectives that they all share. Establishing
shared objectives that leaders and followers can coalesce(deggarsaa) around
is difficult but worth the effort. Leaders who are willing to expend time and
effort in determining appropriate goals will find these goals achieved more
effectively and easily if followers and leaders work together. Leader
imposed goals are generally harder and less effectively achieved than goals
developed together.

1.2 Leadership vs Management

Leadership is similar to, and different from, management. They both involve
influencing people. They both require working with people. Both are concerned
with the achievement of common goals. However, leadership and management are
different on more dimensions than they are similar.Because leadership is used to
describe both a process and a position, it is useful to remember that the distinction
is between leadership and management.While some may excel at one more than
the other, most persons in positions of responsibility within an organization,
whether described as ‘leaders’ or ‘managers’, exercise both leadership and
management in their roles.
For a quick review, the definition of leadership is a process whereby an individual
influences a group of individuals to achieve a common goal. Breaking this down
even more, while there are a variety of leadership definitions out there, there are

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specific components that are central to the majority of these definitions.
Leadership:
 Is a process
 Involves influence
 Occurs in a group context (you need to have at least one
constituent) AND
 Involves goal attainment.
For most, the definition of management is seen quite differently. This doesn’t
mean that an individual can’t hold both management and leadership
responsibilities simultaneously, but management is considered a term separate
from leadership. The definition of management is to exercise executive,
administrative, and supervisory direction of a group or organization. Leadership
and management share many similarities. Both leadership and management
involve influence, working with people, and working with effective goal
management. However, the fields of leadership and management can also be
considered very different.
According to John Kotter, leadership can be considered an age-old concept that has
been around for centuries, while management is a concept developed in the last
100 years, in part from the rise of the industrial revolution. Many other scholars
share Kotter’s viewpoint in differentiating between management and leadership:
Management means setting objectives and focusing on consistently producing key
results through planning and budgeting, organizing and staffing, and controlling
and problem-solving. Leadership focuses on potential - creating and supporting
change to vitalize the organization by establishing direction, aligning people, and
motivating as well as inspiring.
It is important for organizations to realize the distinction and balance between
leadership and management because today’s and tomorrow’s marketplace will

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demand firms to both thrive on challenges and deliver consistent results, to address
both the magnitude of change and the complexity of the environment.
The net result of the many forces increasing the change and complexity in the
business environment is that doing what was done yesterday, or doing it 5% better,
is no longer a formula for success. Organizational success today requires skills and
strategies that most people did not need in the relatively benign 1950s, 60s, and
70s. Firms do not appear to have the requisite leadership development practices
mostly because until recently organizations did not need that many people to
handle their leadership challenges. More change always demands more leadership,
balanced with effective management.

Table 1.1Summary of difference between leadership and management

Leadership Management

Create a vision Concentrate on doing things Efficiently

Leaders have followers Managers have subordinates

Leaders are inspirational

Managers are productive and Effective
&Charismatic

Manage the (external or Manage the complexity of tasks & the

internal) changes. organization structure.

Leaders empower followers Managers control subordinates

People are lead Projects are managed

Align the organization to the Organize teams, allocate resources, build &

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 Vision execute plans to achieve the objectives.

Synthesis, put together all the Analyzes the issues by breaking them into
issues and solve them smaller problems and then solve each of
holistically (bottom-up
them (top-down approach)
approach)

1.3 What Makes Effective Leader?

How often have you heard the comment, “He or she is a born leader?” There are
certain characteristics found in some people that seem to naturally put them in a
position where they’re looked up to as a leader.
Whether, in fact, a person is born a leader or develops skills and abilities to
become a leader is open for debate. There are some clear characteristics that are
found in good leaders. These qualities can be developed or may be naturally part of
their personality. Let us explore them further.

1.3.1Seven Personal Qualities Found In A Good

Leader

1. A good leader has an exemplary character. It is of utmost importance that a

leader is trustworthy to lead others. A leader needs to be trusted and be known
to live their life with honestly and integrity. A good leader “walks the talk” and
in doing so earns the right to have responsibility for others. True authority is
born from respect for the good character and trustworthiness of the person who
leads.  

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2. A good leader is enthusiastic about their work or cause and also about their role
as leader. People will respond more openly to a person of passion and
dedication. Leaders need to be able to be a source of inspiration, and be a
motivator towards the required action or cause. Although the responsibilities
and roles of a leader may be different, the leader needs to be seen to be part of
the team working towards the goal. This kind of leader will not be afraid to roll
up their sleeves and get dirty.  

3. A good leader is confident. In order to lead and set direction a leader needs to
appear confident as a person and in the leadership role. Such a person inspires
confidence in others and draws out the trust and best efforts of the team to
complete the task well. A leader who conveys confidence towards the proposed
objective inspires the best effort from team members. 

4. A leader also needs to function in an orderly and purposeful manner in

situations of uncertainty. People look to the leader during times of uncertainty
and unfamiliarity and find re-assurance and security when the leader portrays
confidence and a positive demeanor.  

5. Good leaders are tolerant of ambiguity and remain calm, composed and
steadfast to the main purpose. Storms, emotions, and crises come and go and a
good leader takes these as part of the journey and keeps a cool head. 

6. A good leader as well as keeping the main goal in focus is able to think
analytically. Not only does a good leader view a situation as a whole, but is
able to break it down into sub parts for closer inspection. Not only is the goal in
view but a good leader can break it down into manageable steps and make
progress towards it.  

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 7. A good leader is committed to excellence. Second best does not lead to success.
The good leader not only maintains high standards, but also is proactive in
Theseto
raising the bar in order seven personal
achieve characteristics
excellence areareas.
in all foundational to good leadership. Some
characteristics may be more naturally present in the personality of a leader.
However, each of these characteristics can also be developed and strengthened. A
good leader whether they naturally possess these qualities or not, will be diligent
to consistently develop and strengthen them in their leadership role.

1.4 Factors of Leadership

Follower:

Different people require different styles of leadership. For

example, a new hire requires more supervision than an
experienced employee. A person who lacks motivation
requires a different approach than one with a high degree of
motivation. You must know your people! The fundamental
starting point is having a good understanding of human
nature, such as needs, emotions, and motivation. You must
come to know your employees' be, know, and do attributes.

Leader:

You must have an honest understanding of who you are, what you
know, and what you can do. Also, note that it is the followers, not the
leader who determines if a leader is successful. If they do not trust or
lack confidence in their leader, then they will be uninspired. To be
successful you have to convince your followers, not yourself or your
superiors, that you are worthy of being followed.

— Communication:
You lead through two-way communication. Much of it is nonverbal. For
instance, when you "set the example," that communicates to your people
that you would not ask them to perform anything that you would not be
willing to do. What and how you communicate either builds or harms the
relationship between you and your employees.

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  Situation:

All are different. What you do in one situation will not always work in another. You
must use your judgment to decide the best course of action and the leadership style
needed for each situation. For example, you may need to confront an employee for
inappropriate behavior, but if the confrontation is too late or too early, too harsh or
too weak, then the results may prove ineffective.

1.5 Power as a Source of Leadership

Influence

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.Your capacity
to influence others is dependent on the power you have. 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 (French
& Raven, 1959).

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 1) Legitimate Authority

It refers to the power a leader possesses as a result of occupying a particular

position or role in the organization. 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 influence acknowledges that the influencer has
a "right" or is lawfully entitled to influence - within certain bounds. It is related to
the position not to the person, 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 to exist.

2) Reward Power

This refers to the leader's capacity to give or with hold 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, browses, interesting projects, promotion recommendations, a better office,
support for training programs, assignments with high risibility in the organization,
recognition, positive feedback etc. There are a manager’s controls over valued
rewards, the greater the manager's rewardpowers in the more power to influence.
For example, 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 Lecturers have considerable reward power; they can grant
or withhold high grades.

3) Coercive Power

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It is a power based on fear. It is the negative side of reward power. Coercive power
is the ability to coerce or punish the 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 with held pay rises, (Punishment
may range from loss of a minor privilege to loss of one's job).

The use of coercive power – that is negative consequences following undesirable

or unacceptable behavior has been shown to be effective in reducing the instances
of such behavior. It has a place in manager’s repertoire, yet it should be used with
care and judgment as it has also been shown to have a significant negative impact
on subsequent relationships.

4) Expert Power

It refers to a 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.

As leaders move to higher levels of leadership they find themselves leading people
whose functional expertise is different and superior to theirs. Expertise will not be
sufficient on its own, however leaders can continue build their expertise power
base by:
 Keeping up to date with and sharing information on strategic
initiatives.

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  Take part in all relevant development opportunities within your
organization.

 Read relevant leadership and professional magazines/books for

your industry.

 Progressively building your reputation as a competent leader.

5) Referent Power

It is one source of Power that results from being admired, personally identified
with or liked by there. It is your ability to influence others' behavior simply
because of the relationship they have with you. 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 is.

1.6 Leadership for Good Governance and

Development

The concept of "governance" is not new. It is as old as human civilization. Simply

put "governance" means: the process of decision-making and the process by which
decisions are implemented (or not implemented). Governance can be used in
several contexts such as corporate governance, international governance, national
governance and local governance.
Since governance is the process of decision-making and the process by which
decisions are implemented, an analysis of governance focuses on the formal and
informal actors involved in decision-making and implementing the decisions made
and the formal and informal structures that have been set in place to arrive at and
implement the decision

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Government is one of the actors in governance. Other actors involved in
governance vary depending on the level of government that is under discussion. In
rural areas, for example, other actors may include influential land lords,
associations of peasant farmers, cooperatives, NGOs, research institutes, religious
leaders, finance institutions political parties, the military etc. At the national level,
in addition to the above actors, media, lobbyists, international donors, multi-
national corporations, etc. may play a role in decision-making or in influencing the
decision-making process.
All actors other than government and the military are grouped together as part of
the "civil society." In some countries in addition to the civil society, organized
crime syndicates also influence decision-making, particularly in urban areas and at
the national level.
A key element in good governance is the quality of leadership as measured by the
degree of commitment, vision, transparency, efficiency and accountability in
discharging the responsibilities of an organization. Effective leadership contributes
to effective governance by encouraging cooperation. Good governance needs
leadership. Leadership is about having a clear sense of the right direction for an
organization and being able to guide others towards it. Therefore, Leadership is not
about power or control.
Good leaders are enablers and consensus builders who serve the interests of others,
whether it’s the members of a business or the citizens of a country. Leaders need to
earn confidence and trust if they are to win support for the direction they want to
set. We call this leadership by consent. In this manner, leadership and good
governance are inseparable in all respects of human life.
Effective leadership and good governance determines the development of
organizations and nations at large. Now, a good leader or governor will not
disappoint his followers, he must have the interest of his people at heart, he must

15
be passionate, feel the pains of the poor, hear the cry of the helpless and come for
help, create job opportunities for jobless people. A good leader must be able to
render selfless service and desist from selfishness, he must make provision for
training and empowering his people and encourage self-employment, he must be
serious with issues that concerns the youths as they are the future leaders and
should not look down on the adults.
At all costs, good governance and leadership promotes education, agriculture,
ensure stability of power, construct good roads for safe and easy transportation and
make the cost of transportation affordable especially for people in rural areas,
provide good water, good security system, and make the cost of living affordable
for the masses. Ensure peace, unity and maintain transparency. In business
organizations also, good leadership plays a pivotal role in that it makes sustainable
and socially responsible business.

 SUMMARY

 Leadership is a process by which a person influences others to accomplish

an objective and directs the organization in a way that makes it more
cohesive and coherent
 Leadership and management share many similarities. Both leadership and
management involve influence, working with people, and working with
effective goal management
 Seven Personal Qualities Found In A Good Leader:
1. A good leader has an exemplary character.
2. A good leader is enthusiastic about their work or cause and also about
their role as leader.

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 3. A good leader is confident.
4. A leader also needs to function in an orderly and purposeful manner in
situations of uncertainty.
5. Good leaders are tolerant of ambiguity and remain calm, composed and
steadfast to the main purpose.
6. A good leader as well as keeping the main goal in focus is able to think
analytically.
7. A good leader is committed to excellence. Second best does not lead to
success.
 The factors of leadership are follower, power, source and leader.
 There are five potential sources of power:
1. Legitimate Authority
2. Reward Power
3. Coercive Power
4. Expertise power
5. Referent Power
 A key element in good governance is the quality of leadership as measured
by the degree of commitment, vision, transparency, efficiency and
accountability in discharging the responsibilities of an organization.

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 Chapter two

Leadership theories & styles

Introduction

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 Dear students, well come to the second chapter of the course leadership

and change management. Before directly moving in to the detail part of this
chapter I have a question. Which president/prime minister you appreciate among
the world countries either from the past or the present? Why? Yes, some of you
may say Obama, some of you may say P/m Meles Zenawi, D/r Abbiy, some others
may say Mengistu H/Mariam, others may say Mandela and so on. In whatever
cases you are appreciating these peoples leadership quality/way of influencing
others to accomplish an objective.

By the way, what is leadership style? What is the difference between good and bad
leaders? What are the characteristics of good leaders? What are the different types
of leadership skills and competencies? What are the different types of leadership
styles and theories? In this chapter, you will get all the answers for the above
questions. This chapter deals with the types of leadership skills and competencies,
different types of leadership styles and theories, characteristics of good leaders and
difference between good and bad leaders.
2.1 Types of leadership styles

Leadershipstyleistherelativeconsistentpatternofbehaviorthatcharacterizesaleader.Le
aders'stylesencompasshowtheyrelatetootherswithinandoutsidetheorganization,
howtheyviewthemselvesandtheirposition,and-toaverylargeextent-whetherornot
theyaresuccessfulasleaders.Ifataskneedstobeaccomplished,howdoesaparticular
leadersetouttogetitdone? Ifanemergencyarises,howdoesaleaderhandleit?Ifthe
organizationneedsthesupportofthecommunity,howdoesaleadergoaboutmobilizing
it? All of these depend on leadership style.

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Leadership style, more than leadership traits, determines leader effectiveness. Style
is related to one's model of organizational behavior. It is considered as pattern of
behavior a leader uses to influence employees to achieve organizational goals.
 Leadership style is the behavior exhibited by a leader during influencing
subordinates to accomplish organizational objectives.
 Leadership style also implies the ways in which the leaders exercise
leadership.
 Leadership style is the ways in which the functions of leadership are carried
out.
 Leadership style is the ways how the leaders behave towards their
subordinated in the accomplishment of the work.

No matter what their traits or skills, leaders carry out their roles in a wide variety
of styles. Therefore, there are many leadership styles from which to choose from a
very classical autocratic approach to a very creative, participative approach. Not
everything old was bad and not everything new was good. Different styles were
needed for different situations and each leader needed to know when to exhibit a
particular approach.

The leader's style or manner of dealing with the organization's members and
communicating with them contributes to or detracts from the group's overall
functioning. Leadership styles are also broadly classified based on three points of
view: Motivation, Authority and supervision.

 On the basis of motivation leadership style can be positive or negative style. In

positive style a leader motivates his followers to work hard by offering them

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 rewards, for example, higher bonus. In negative styles, a leader forces his
followers to work hard and punishes them for lower productivity.
 on the basis of Authority, the followings well known leadership styles will be
mentioned:

a) Bureaucratic Leadership style

(Max Weber, 1905) is very structured and follows the procedures as they have
been established. This type of leadership has no space to explore new ways to
solve problems and is usually slow paced to ensure adherence to the ladders stated
by the company. Leaders ensure that all the steps have been followed prior to
sending it to the next level of authority. It is also known as manages “by the
book”. Everything done according to procedure or policy if not covered by the
book, referred to the next level above.

 Staff performing routine tasks over and over

 Staff needs to understand certain standards or

procedures.

 Safety or security training conducted

 Staff performing tasks that require handling cash

 Work habits form those are hard to break, especially if they

are no longer useful.
 Staff loses their interest in their jobs and in their co-workers

 Staff do only what is expected of them and no more.

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Universities, hospitals, banks and government usually require this type of leader in
their organizations to ensure quality, increase security and decrease corruption.

b) Charismatic Leadership style

This type of leader has to be committed to the organization for the long run. If the
success of the division or project is attributed to the leader and not the team,
charismatic leaders may become a risk for the company by deciding to resign for
advanced opportunities. It takes the company time and hard work to gain the
employees' confidence back with other type of leadership after they have
committed themselves to the magnetism of a charismatic leader.
Assumptions
 Charm and grace are all that is needed to create followers.

 Self-belief is a fundamental need of leaders.

 People follow others that they personally admire.

c) Autocratic Leadership style

“Look, I’m the boss around here. I’ll make the decisions and I’ll tell you what I
want you to do. You’d better do your job because I’ll be watching your every
move.” Autocratic leadership is the classical approach to leadership
style.Autocratic leadership Style is also known as ‘’I’’ approach. This type of
leadership is practiced by the managers concentrating on power and authority
within themselves. Leader expects high degree ofcompliance by subordinates. A
Leader having this style does not consult staff, nor allowed to give any input. He is
dogmatic and positive in his approach. Manager exhibiting this type of style has
the ability and enforces decision by use of rewards and fear of punishment. As a
result, staffs are expected to obey orders without receiving any explanations.

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Communication tends to be primarily in one direction from manager to follower.
Some autocratic leaders are seen as “benevolent autocrat.” Though they listen
considerably to their followers’ opinion before making any decision, the decision
remains to be their own. They seemingly consider their subordinate’s ideas but
when it comes to decision making they are more autocratic than benevolent.
An advantage of autocratic leadership is the speed of decision-making, as the
leader does not have to obtain group members approval. However there appears to
be a low morale syndrome on the group members because their views are not given
due consideration and may resent the decision and support the same as little as
possible. An autocratic leader is one who dominates and drives his subordinates
through coercion, command and the instilling of fear in his followers.
An autocratic leader alone determines policies, plans and makes decisions. He
demands strict obedience. Such leaders love power and love to use it for promoting
their own ends.They never like to delegate their power for they fear that they may
lose their authority. The merits of this type of leadership is that, it can increase
efficiency, save time, and get quick results under emergency conditions, chain of
command and division of work are clear.

The demerits are people are treated as machine-like cogs without human dignity;
one way communication without feedback and the leader receives little or no input
from his sub-ordinates for his decision-making which is dangerous in the current
dynamic environment. Generally, this approach is nota good way to get the best
performance from a team.
Characteristics:
 Telling others what to do; dominating team members.
 Using unilateralism to achieve a singular objective.
 Limiting discussion on ideas and new ways of doing things.

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  Group does not experience teamwork and workers are not involved in
decision making.
 Most people are familiar with this style and easily adopt it.
 Studies show that productivity is highest under this leadership style
while the manager is present, but productivity slumps in the absence of
the manager.
Effective when . . .
 Time is limited and a call arises for urgent leadership.
 Individuals/group lack skill and knowledge.
 The group does not know each other.
 A new employee is just learning the job and is in a new environment; the
leader is competent and a good coach; the employee is motivated to learn a
new skill.
Ineffective when…

 Developing a strong sense of team is the goal.

 The group members have some degree of skill/knowledge.
 The group wants an element of spontaneity in its work.
 Such a leadership style is suitable when subordinates are basically lazy
and avoiding duties.
 It helps to make quick decisions as decision-making is the prerogative of
the leader alone.
 As subordinates are under constant threat of disciplinary action, they are
always cautious.
 Inefficient and insincere workers can easily be identified and removed
from service.

 Subordinates normally show resistance to this type of leadership style as it

curtails their freedom to act.

 It kills initiative to work and results in frustration among workers. 24

 d) Democratic Leadership style

This style of leadership is also known as participative leadership. As the name

itself indicates, in this style, the entire group is involved in goal setting and
achieving it. A democratic leader follows the majority opinion as expressed by his
group. Subordinates have considerable freedom of action. The leader shows greater
concern for his people’s interest, is friendly and helpful to them. He is always
ready to defend their subordinates individually and collectively. This type of
leadership encourages people to develop and grow, receives information and ideas
from his subordinates to make decisions, and boosts the morale of employees.
Characteristics:

 Involving group members in planning and carrying out activities.

 Asking before telling, valuing group discussion and input,
empowering.
 Promoting a sense of teamwork, encouraging participation and wise
delegation, but never losing sight of responsibilities as a leader.
 A sign of strength employees will respect.
 Studies show that productivity is high under democratic leadership—
not as high as in an autocratic situation, but the productivity does not
drop when the leader is absent.

25
Effective when . . .
 The situation allows sufficient time.
 The group members have some degree of skill or knowledge.
 The leader knows the problem well, but wants to create a team where the
employees take ownership of the project; the group is motivated and
team commitment exists.
 The employees know their jobs and want to become part of the team.

Ineffective when. . .

 The group is unmotivated.

 Group members lack skill and knowledge.
 A high degree of conflict is present.

 As the followers are able to participate in the decision-making

process, they feel motivated.

 The decision finally made is mutually acceptable. The followers,

therefore, work for its implementation wholeheartedly.
Merits:
 There is no resistance from the subordinates.

 It improves the job attitudes of the subordinate staff.

 As the subordinates do not have ill-feelings of any kind, the labour-

management relationship is bound to improve.

 There may be delay in arriving at a decision, as consensus among

the individuals is necessary.

 Democratic leadership is suitable only if the subordinates are all 26

capable of making worthwhile suggestions. If they are less efficient
Demerit:

e) Laissez-faire/Free-Rein Leadership style

In this type of leadership, the leaders exercise absolutely no control. He only

provides information, materials and facilities to his subordinates. This type of
leadership is employee centered and the subordinates are free to establish their own
goals and chart out the course of action. This type of leadership can be disaster if
the leader does not know well the competence and integrity of his people and their
ability to handle this kind of freedom. The Figure below shows the spectrum of
leadership styles where at one end there is no freedom for people and full freedom
at the other.

Characteristics:

 Noninterference in the affairs of others.

 Giving little or no direction to group/individuals and exercising little
control over the group.
 Offering opinion only when requested.
 A person does not seem to be in charge.

27
  Allowing the employees to make the decision.
 This has the lowest level of productivity of all styles of leadership.
Effective when . . .

 A high degree of skill and motivation is shown in your group or when an

employee is able to analyze the situation and determine what needs to be
done, as well as how to do it.
 A sense of team exists.
 The routine is familiar to participants; by handing over ownership, a leader
can empower his group to achieve their goals.
 The situation might call for the leader to be at other places doing other
things.
Ineffective when. . .
 A low sense of team/interdependence exists.
 Group members have a low degree of skill and knowledge.
 The group expects to be told what to do.
Merits

 Obviously, as the subordinates have full freedom to act, their level of

motivation is bound to be very high.
 Those subordinates, who are highly efficient, can make use of the freedom
given to them to excel.
 The superior-subordinate relationship is bound to be very good.

Demerits

28
  The laissez faire leadership style will produce good results only if the
subordinates are all highly efficient and capable of doing their work
independently.
 As the leader does not involve himself at all in the activities of his
subordinates, control may become difficult.
 The leader does not exercise his formal authority. As a result, the work place
may lose its official character.
 The subordinates are deprived of the expert advice and moral support of
their leader.

f) Situational leadershipstyle

The situational leadership style states that for a manager to be democrat,

autocratic or laissez-faire, situations force him/her. The manager behaves as per
the situations he/she is facing. If one leadership style is appropriate to a given
situation, that particular style may not be appropriate to another (different)

29
situation.
Whichstyle isthe best?
A good leader uses all styles, depending on what forces are involved between the
followers, the leader and the situation.Some examples include the following.

 Usinganauthoritarianstylewithanewgroupmemberwhoisjustlearningthe
job.Theleaderiscompetentandagoodcoach.Theindividualismotivatedto
learnanewskill.Thesituationisanewenvironmentfortheindividualin question.
 Usingaparticipativestylewithteammemberswhoknowtheirjob.Theleader
knowstheproblemwell,buthewantstocreateateamwherethememberstake
ownershipoftheproject.Themembersknowtheirjobsandwanttobecomepart of
the team. The situation allows time for group development.
 UsingaDelegativestylewithastaffmemberwhoknowsmoreaboutthejobthan
you.Youcannotdoeverything!Theindividualneedstotakeownershipofher
job.Inaddition,thesituationmightcallforyoutobeatotherplacesdoingother
things.
 Usingallthree:Tellingyourstaffthataprocedureisnotworkingcorrectlyanda
newonemustbeestablished(authoritarian).Askingfortheirideasandinputon
creatinganewprocedure(participative);Delegatingtasksinordertoimplement
the new procedure (Delegative).

Factorsforusingdifferentleadershipstyles

Hence thereisnoone
“right”waytoleadormanagethatsuitsallsituations.Tochoosethemosteffective
approach for you, you must consider:
 The skill levels and experience of your team
 The work involved (routine or new and creative)
 The organizational environment (stable or radically changing,
conservative or Adventurous)
 Your own preferred or natural style.

30
The Leadership Grid

Theleadershipgridisanotherbehavioralapproachofstylesofleadershipbasedontwo
dimensions i.e.concern for people and concern for production(job).
Peoplecenteredleadersaremoreconcernedfortheirsubordinate'sfeelingsand

Country club Team leaders

Impoverished Authoritarian

relationshipwhilejobcenteredleadersarethoseleaderswhoconsistentlyemphasize
getting the job done without much concern for their subordinates.

High

Concern for people

Low

Low Concern for task

High
 Authoritarian Leader (high task, low relationship)

Peoplewhogetthisratingareverymuchtaskorientedandarehardontheirworkers
(autocratic). There is little or no allowance for cooperation or collaboration.
Heavilytaskorientedpeopledisplaythesecharacteristics.Theyareverystrongon

31
schedules;theyexpectpeopletodowhattheyaretoldwithoutquestionordebate;when
somethinggoeswrongtheytendtofocusonwhoistoblameratherthanconcentrateon
exactlywhatiswrongandhowtopreventit. Theyareintolerantofwhattheyseeas
dissent(itmayjustbesomeone'screativity).Therefore,itisdifficultfortheir subordinates
to contribute or develop.

 Team Leader(high task, high relationship)

Thistypeofpersonleadsbypositiveexampleandendeavorstofosterateam
environmentinwhichallteammemberscanreachtheirhighestpotential,bothasteam
membersandasperson.Theyencouragetheteamtoreachteamgoalsaseffectivelyas
possible,whilealsoworkingtirelesslytostrengthenthebondsamongthevarious
members. They normally form and lead some of the most productive teams.

 Country Club Leader(low task, high relationship)

This person uses predominantly reward power to maintain discipline and to

encourage the
teamtoaccomplishitsgoals.Conversely,theyarealmostincapableofemployingthe
morepunitivecoerciveandlegitimatepowers.Thisinabilityresultsfromfearthatusing
such powers could jeopardize relationships with the other team members.

 Impoverished Leader(low task, low relationship)

Aleaderwhousesa"delegateanddisappear"managementstyle,sincetheyarenot
committedtoeithertaskaccomplishmentormaintenanceofrelationshipstheyessentially
allowtheirteamtodowhateveritwishesandprefertodetachthemselvesfromtheteam
processbyallowingtheteamtosufferfromaseriesofpowerstruggles.Accordingto
current definition of leadership, this type of manager does not qualify as a leader.

32
 2.2 Leadership Theories

For decades, leadership theories have been the source of numerous studies. In
reality as well as in practice, many have tried to define what allows authentic
leaders to stand apart from the mass! Hence, there are many theories on leadership
as there are philosophers, researchers and professors that have studied and
ultimately published their leadership theory. Every leader is different, and no
single theory works for all leaders Therefore, theories are commonly categorized
by which aspect is believed to define the leader the most. The most widespread
ones are the followings:

A) Great man theory:One of the early notions of leadership, which is still

popular in certain circle, is that leadership is an inborn quality. This theory is
often linked to 19th century philosopher and historian Thomas Carlyle, who
commented that "The history of the world is but the biography of great
men." This theory is usually contrasted with a theory that talks about events
occurring in the fullness of time, or when an overwhelming wave of smaller
events cause certain developments to occur.
The great man theory of leadership asserts that leaders in general and great
leaders in particular are born and not made. According to the theory,
leadership calls for certain qualities like charm, persuasiveness,
commanding personality, high degree of intuition, judgment, courage,
intelligence, aggressiveness and action orientation are of such nature that
they cannot be taught or learnt in a formal sense. In other words, they are
inborn or sometimes inherited in family from generation to generation.

Great Man theory of leadership is similar to the notion of divine right of

kings to ring and rule over their subjects on a perpetual hereditary basis.
King was supposed to acquire their elegancy from God himself.

33
 The further implications of the theory that leaders are born and not made are,

1. Leaders are gift of god to mankind. A measure of divinity is attributed to

leaders and their actions
2. Everyone cannot inspire to become a leader and attain greatness
3. The inborn leadership qualities alone are necessary and sufficient for a
leader to exercise influence over his followers and to become successful.
4. Leadership qualities and effectiveness are independent variables. Situational
factors like the nature and needs of followers, the demands of task and the
general socio-economic environment have little or no influence on leader’s
emergence or effectiveness.
5. The theory discount the belief that individual can be trained for assuming
leadership position and roles. Leadership qualities can’t be transmitted
through education and exposure.

B) Trait theory:In the 1920's and 1930's, leadership research focused on trying
to identify the traits that differentiated leaders from non-leaders. These early
leadership theories were content theories, focusing on "what" an effective
leader is, not on 'how' to effectively lead.
The trait approach to understanding leadership assumes that certain
physical, social, and personal characteristics are inherent in leaders. Sets of
traits and characteristics were identified to assist in selecting the right people
to become leaders. Physical traits include being young to middle-aged,
energetic, tall, and handsome. Social background traits include being
educated at the "right” schools and being socially prominent or upwardly
mobile. Social characteristics include being charismatic, charming, tactful,
popular, cooperative, and diplomatic. Personality traits include being self-

34
 confident, adaptable, assertive, and emotionally stable. Task-related
characteristics include being driven to excel, accepting of responsibility,
having initiative, and being results-oriented.
Trait theories intended to identify traits to assist in selecting leaders since
traits are related to leadership effectiveness in many situations. The trait
approach to understanding leadership supports the use of tests and
interviews in the selection of managers. The interviewer is typically
attempting to match the traits and characteristics of the applicant to the
position. For example, most interviewers attempt to evaluate how well the
applicant can work with people.

Assumptions

 Assumes that people inherit certain qualities and traits that make them better
suited to leadership.
 Often identifies particular personality or behavioral characteristics shared by
leaders.
 People who make good leaders have the right (or sufficient) combination of
traits.
Stogdill (1974) identified the following traits and skills as critical to leaders.
Traits Skills
Persistent
Alert to social environment Self-confident
Ambitious and achievement Clever (intelligent)
Assertive Conceptually skilled
orientated
Cooperative Creative
Decisive Diplomatic and tactful
Dependable Fluent in speaking

35
Dominant (desire to influence Knowledgeable about group task
Energetic (high activity level) Organized (administrative ability)
others)
Persuasive
Socially skilled
C) Behavioral theory:Behavioral theory contains some very different
assumptions from trait theory. Trait theory assumes that a leader is born
with specific traits that make him or her good leader. Behavioral theory, on
the other hand, assumes that you can learn to become a good leader because
you are not drawing on personality traits. Leaders can be made, rather than
are born .Your actions—what you do—define your leadership ability.
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. The behavioral theorists identified
determinants of leadership so that people could be trained to be leaders.
They developed training programs to change managers' leadership behaviors
and assumed that the best styles of leadership could be learned.

D) Contingency theory: The leader's ability to lead is contingent upon various

situational factors, including the leader's preferred style, the capabilities and
behaviors of followers and also various other situational factors.
Contingency theories are a class of behavioral theory that contends there is
no one best way of leading and that a leadership style that is effective in
some situations may not be successful in others. An effect of this is that
leaders who are very effective at one place and time may become
unsuccessful either when transplanted to another situation or when the
factors around them change. This helps to explain how some leaders who

36
seem for a while to have the 'Midas touch' suddenly appear to go off the boil
and make very unsuccessful decisions.
It was firstly proposed by the Austrian psychologist Fred Edward Fiedler
(1922- ). Fiedler's theory posits two classifications of leaders: (1) those
motivated by the need to accomplish assigned tasks (task-orientated); (2)
those motivated by close and supportive relations with members of the
group (people-orientated). The effectiveness of the leader is contingent upon
both the leader's personality and the characteristics of the leadership
situation. Fielder (1964) felt that those leaders who managed to match the
requirements of the task with a dominant personality trait tended to be more
successful.  Dominant personality traits largely determine the approach
chosen by leaders i.e. either people oriented or task oriented approach.

In case leaders score highly, then they normally consider interpersonal

relationships as a crucial part of implementing tasks. However, those who
score low marks in the scale value task completion more than anything else
does. Consequently, most of them may not bother creating close
relationships with their employees.
Fielder (1964) was also concerned with the organizational environment or
what is also called the situational variable. According to him, the situational
variable can be defined as that aspect within the organization that can allow
leaders to exert influence within their team.He divided the situational
variables as follows;

 Task structure
 Position power
 Leader to member relationships

37
The leader-member structure is defined as the level of acceptance team
players have towards their leader. Task structures may be defined as the
level of job specificity among subordinates. Lastly, position power is
described as the level of authority attributed to a leader as result of his
position within the organization (Fiedler, 1964).

In the Leader-member situation, a leader would be more successful if he

establishes strong links between himself and the other people within the
organization; this is through trusting and respecting members of his
organization. Additionally, successful leaders in the task structure situation
are those ones that specify job detail well. Powerful leaders in the position
power situation are those ones that exercise their right to fire and hire or to
reward individuals within the organization.
All the latter three situations create eight leadership styles. These are then
divided into two important groups known as the relationship or task oriented
leaders. Five of the leadership styles fall under the latter category.
Fielder (1964) felt that task oriented approach were more appropriate in
disasters or extreme situations. In cases where a fire strikes an organization,
then leaders would be more efficient if they applied the task oriented
approach. At this time, the issue of position power is not very relevant and
neither are the relationships of the co-workers. In extreme cases or in
disasters, the individuals who direct tasks most efficiently become the
leaders. The opposite is true for leaders who try applying a people oriented
approach. This would mean considering what people think and this would
eventually delay outcomes. Such cases require only the fastest responses for
survival.

38
 Task oriented relationships are also important in blue collar jobs. This is
because such workers normally require direction and job specificity.
Therefore, this leadership approach would be most appropriate. On the other
hand, such scenarios may still be characterized by strong leader member
relationships. The latter situation can be effected when leaders reward
worker well for their efforts.
Relationship oriented leadership styles may be more favorable in situations
where the organizational environment is highly predictable. Some of the
most appropriate environments include research institutes. In such
circumstances, subordinates would not like it if their leaders interfered with
the nature of their task. Here, it would be more appropriate to work on
building relationships with subordinates.
It should be noted that Fielder's theory does not cover all the possible factors
affecting leadership. Some leaders may be more effective if they undergo
training or gain experience on the job. Such factors have not been accounted
for by the contingency theory.

2.3 Transformational, Transactional and Servant Leadership

A) Transformational Leadership:Transformational leadership is a theory of

leadership where a leader works with teams to identify needed change,
creating a vision to guide the change through inspiration, and executing the
change in tandem with committed members of a group. It is an integral part
of the Full Range Leadership Model.
Transformational leadership serves to enhance the motivation, morale, and
job performance of followers through a variety of mechanisms; these include
connecting the follower's sense of identity and self to a project and to the

39
collective identity of the organization; being a role model for followers in
order to inspire them and to raise their interest in the project; challenging
followers to take greater ownership for their work, and understanding the
strengths and weaknesses of followers, which allows the leader to align
followers with tasks that enhance their performance. It is also important to
understand the qualities a transformational leadership can bring to a work
organization. Transformational leaders are strong in the abilities to adapt to
different situations, share a collective consciousness, self-manage, and be
inspirational while leading a group of employees.

Transformational leadership is when leader behaviors influence followers

and inspire them to perform beyond their perceived capabilities.
Transformational leadership inspires people to achieve unexpected or
remarkable results. It gives workers autonomy over specific jobs, as well as
the authority to make decisions once they have been trained. This induces a
positive change in the followers’ attitudes and the organization as a whole.

Assumptions
 Association with a higher moral position is motivating and will
result in people following a leader who promotes this.
 Working collaboratively is better than working individually.
 People will follow a person who inspires them.
 A person with vision and passion can achieve great things.
 The way to get things done is by injecting enthusiasm and
energy.

40
Four elements of Transformational Leadership

Transformational leaders typically perform four distinct behaviors; also known as

the four I's. These behaviors are individualized consideration,intellectual
stimulation, inspirational motivation and idealized influence.

 Individualized Consideration– the degree to which the leader attends to

each follower's needs, acts as a mentor or coach to the follower and
listens to the follower's concerns and needs. The leader gives empathy
and support, keeps communication open and places challenges before the
followers. This also encompasses the need for respect and celebrates the
individual contribution that each follower can make to the team.The
followers have a will and aspirations for self-development and have
intrinsic motivation for their tasks.
 Intellectual Stimulation – It is when the leader encourages their
followers to think for themselves. These leaders are creative, innovative,
and are very open to new ideas. They tend to be tolerant of their
followers’ mistakes, and even encourage them as they believe they
promote growth and improvement within the organization. These leaders
create learning opportunities for their followers and abandon obsolete
practices.

 Inspirational Motivation– the degree to which the leader articulates a

vision that is appealing and inspiring to followers. Leaders with
inspirational motivation challenge followers with high standards,
communicate optimism about future goals, and provide meaning for the
task at hand. Followers need to have a strong sense of purpose if they are

41
 to be motivated to act. Purpose and meaning provide the energy that
drives a group forward. The visionary aspects of leadership are supported
by communication skills that make the vision understandable, precise,
powerful and engaging. The followers are willing to invest more effort in
their tasks; they are encouraged and optimistic about the future and
believe in their abilities.

 Idealized Influence – It is when the leader acts as a strong role model for
their organization and leads by example. These types of leaders consider
the needs of their followers and prioritize their needs.Provides a role
model for high ethical behavior, instills pride, gains respect and
trust.Followers of these leaders typically try to emulate their leader as
they tend to identify with them easily.

B) Transactional Leadership:It is defined as the influence of a leader toward

his subordinates using reward and punishment as a form of motivational
medium. The style is based on the concept that a leader has to give
something to his followers in exchange for performing certain tasks. In this
style, a leader may offer something valuable like increased salary,
incentives, and promotion to his subordinate, who in turn is expected to
fulfill his or her duties well. Otherwise, the leader provides his subordinate
less future opportunity and incentive or may use a demotion as a form of
punishment for not projecting a good performance. Unlike the rewards,
punishment is not often mentioned ahead, but subordinates already have the
general idea as it is usually stated and agreed in the terms and conditions of
the organization to successfully achieve its goals.

42
 Assumptions

 People are motivated by reward and punishment.

 Social systems work best with a clear chain of command.
 When people have agreed to do a job, a part of the deal is that
they cede all authority to their manager.
 The prime purpose of a subordinate is to do what their manager
tells them to do.
The transactional leader works through creating clear structures whereby it is clear
what is required of their subordinates, and the rewards that they get for following
orders. The early stage of Transactional Leadership is in negotiating the contract
whereby the subordinate is given a salary and other benefits, and the company (by
implication the subordinate's manager) gets authority over the subordinate.The
transactional leaders overemphasize detailed and short-term goals, and standard
rules and procedures. They do not make an effort to enhance followers’ creativity
and generation of new ideas. This kind of a leadership style may work well where
the organizational problems are simple and clearly defined. Such leaders tend to
not reward or ignore ideas that do not fit with existing plans and goals.

The transactional leaders are found to be quite effective in guiding efficiency

decisions which are aimed at cutting costs and improving productivity. The
transactional leaders tend to be highly directive and action oriented and their
relationship with the followers tends to be transitory and not based on emotional
bonds.The theory assumes that subordinates can be motivated by simple rewards.
The only ‘transaction’ between the leader and the followers is the money which the
followers receive for their compliance and effort.

43
In simplestterms,theattitudeis:
“Ileadthisorganizationbypayingyouandtellingyouwhatyouneedtodo;yourespond by
doing what you need to do efficiently and well and the organization will prosper”.

Difference between Transactional and Transformational Leaders

Transactional leadership Transformational Leadership

Leadership is responsive  Leadership is proactive
Works within the  Work to change the organizational
organizational culture culture by implementing new ideas
Transactional leaders make  Transformational leaders motivate and
employees achieve empower employees to achieve
organizational objectives company’s objectives by appealing to
through rewards and higher ideals and moral values
punishment.
Motivates followers by  Motivates followers by encouraging
appealing to their own self- them to transcend their own interests
interest for those of the group or unit

C) Servant Leadership: Servant-leadership incorporates the ideals of

empowerment, total quality, team building, participatory management, and
the service ethic into a leadership philosophy. In the words of the Greenleaf
Center for Servant-Leadership (1997, p. 4), this model of leadership
emphasizes "increased service to others; a holistic approach to work;
promoting a sense of community; and the sharing of power in decision

44
 making." Servant-leaders must be value and character-driven people who are
performance and process oriented. Thepeoplewhobecomeleadersoutofa
desire to serve more effectively are called servant leaders.
A servant-leader may be defined as a leader whose primary purpose for
leading is to serve others by investing in their development and wellbeing
for the benefit of accomplishing tasks and goals for the common good.
Being just a service-oriented person, in the traditional notion of servant-
hood, does not qualify one as a servant leader. Arlene Hall (1991, p. 14) has
observed that "Doing menial chores do not necessarily indicate a servant
leader. Instead a servant leader is one who invests himself or herself in
enabling others, in helping them be and do their best." In addition, servant-
leadership should not be equated with self-serving motives to please people
or to satisfy one's need for acceptance and approval.
At the very heart of servant-leadership is the genuine desire to serve others
for the common good. In servant-leadership, self-interest gives way to
collective human development.
Several authorities on servant leadership have suggested that to learn servant
leadership, individuals need to undergo a journey of self-discovery and
personal transformation. The secrets of servant leadership are gradually
revealed to them through listening to their inner voices as well as the voices
of those who have discovered the truth. In spite of these caveats about
understanding the true nature of servant-leadership, we must nevertheless
provide a clear and comprehensive, definition of servant-leadership in order
to measure it.

Assumptions

45
  The leader has responsibility for the followers.
 Leaders have a responsibility towards society and those who are
disadvantaged.

There are two criteria of servant leadership:

 The people served grow as individuals, becoming 'healthier, wiser, more

autonomous and more likely themselves to become servants' (Greenleaf,
1977).
 The extent to which the leadership benefits those who are least advantaged
in society (or at least does not disadvantage them).

“Qualitiesoftheservantleader”

Servant leaders emphasize some of the following ideas and actions.

 Theservantleaderbelievesher/him self as "the
firstamongequals."Thisideais
attheverycoreofservantleadership.Aservantleaderdoesnotconsider her/him
selfabovethoseheleads.Rather,heisprimusinterparesfromLatin,
meaning"firstamongequals."Thatis,heseesthoseheleadsaspeerstoteach andto
learn from. He is willing to leadothersin order to reachan agreedupon goal,
but he doesn't believe that being the leader makes him better than others.
Theservantleaderisateambuilder.She/hewilldrawonthestrengthsof
followersandbeafollowerherself/himselfwhenappropriate.Suchaleader
doesn'tleadbydecreeordictate.Instead,heorsheleadsbyallowing everyone to
do what he or she does well.

46
 Thestyleofguidanceofservantleader--wherepeople,asequals,areableto
voicetheirconcernsandworktotheirpotential--isnotaheavyweighton
followers.Instead,theservantleadersharesburdensandbenefitsequallywith
these peers. Everyone involved benefits.
 Theservantleaderusespowerhonestly.Aservantleaderusesleadership and
power legitimately,for thegood of the people he or she serves. The leader
seesleadershipasameanstoobtainthegeneralgood,notasadesired personal end.

Forthoseofuswatchingpeopleinpower,thedifferenceisveryclear.We
don'tlookuptotheloneleaderwhouseshismuscleandbragsofhisbrawn,
nortothepoliticianwhousespolishedtalkandbragsofhisskill.Welookup
tothe‘MotherTheresa's’andtheNelsonMandela'softheworld:theyare servant
leaders who have filled their positions with integrity.

 Theservantleaderunderstandstheimportanceofday-to-daydetails: A
servant leader is notapersonof"TheGreatTalk."only.Greatspeechesmake
upaverysmallportionofleadershipandtheirneedisevensmallerfora
servantleader.Beingaservantleaderismoreabouttheone-on-one discussions
and in taking care of the everyday details.
 Theservantleaderlistenstoandcaresforhisorherconstituents: Servant
leaders are willing totakethetime tolistentowhatothers have tosay.Infact,
theyaremorethanwilling--theyactivelyseekouttheopinionsandideasof
thesefollowers.Thisisoftopimportancetotheservantleader.Theservant
leaderisnotclosed-minded.She/helistensandlearnsfromher/his constituents.
She/he is opentoimprovement.

47
 Therefore, ifshe/heisconvinced that the other is right, he will gracefull y
accede to the other's suggestion.Listeningisinnatetotheservantleader--
caringaboutothersisapartofwho
theyare.Theycanusethatskillandlearnfromtheirfollowers;theyaren't only
teachers.

 Theservantleaderinvolvesothersandhelpspeoplegetwhattheywant:Theser
vantleadercaresaboutpeople;andsoshe/hewillnaturallyfindout what they
want, and help them toget it. A servantleader knows and uses the language
of his constituents.

 Theservantleaderstretcheshisorherconstituents: While,theservant leader

starts where people are, he doesn't stop there. Instead, the servant leader
helpsothersseethepotentialthatexists.Aservantleaderhelpspeopletodo
thingstheydidn'tknowtheycould.He/shesitsdownwithhis/herconstituents to
set goals that are both feasible and challenging.
 Theservantleaderpromotesteamworkandinspiresotherstoservice:
Finally,a servant leader knows she/he can'tdoitallalone andfrankly,she/he
wouldn'twanttoifshe/hecould.Aservantleaderwantstoworkwithandfor others.
To doso,then,theleadermustbeableto inspirethoseshe/he servesto serve
others.

 Aservantleaderadaptstofitthesituation.Aservantleadergaugeseach
situationandrespondstoeachindividually.Whenappropriate,she/hewill
passoverthereinstosomeonewhoseleadershipstyleismoreappropriateto
thesituation--she/heworkswithpeople'sstrengths.

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 A good leaderunderstands
whenshe/heisnotnecessarilythebestpersonforthejob;she/heknows
her/hisstrengthsaswellasweaknesses,andcangracefullypasson opportunities
best suited to other individuals.

2.4 Leadership Skills and Competencies

Competency is a skill that an individual has, which equips them to perform a

specific task. Just as a mechanic requires a precise set of skills to mend cars,
leaders require a certain array of competencies to enact effective leadership.

These are the skills needed to drive the organization onto the cutting edge of new
technologies. Leadership Competencies form the basic structure that separates
leaders from bosses. These skills create the walls and interiors of the pyramid.
Without them, a leader is just a hollow windbag, or as Scott Adams of Dilbert fame
best characterizes it, "a pointy-head boss."

Leadership Abilities
 Displays attributes that make people glad to follow.
 Provides a feeling of trust.
 Rallies the troops and builds morale when the going gets tough.
Visioning Process
 Applies effort to increase productiveness in areas needing the
most improvement.
 Creates and set goals (visions).
 Senses the environment by using personal sway to influence
subordinates and peers.
 Gain commitment by influencing team to set objectives and buy in
on the process.

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  Reinforces change by embracing it (prevents relapse into prior
state).

Create and Lead Teams

 Develops high-performance teams by establishing a spirit of
cooperation and cohesion for achieving goals.
 Quickly takes teams out of the storming and norming phases and
into the performing phase.
Assess Situations Quickly and Accurately
 Takes charge when the situation demands it.
 Makes the right things happen on time.
Foster Conflict Resolutions (win-win)
 Effectively handles disagreements and conflicts.
 Settles disputes by focusing on solving the problems, without
offending egos.
 Provides support and expertise to other leaders with respect to
managing people.
 Evaluates the feasibility of alternative dispute resolution
mechanisms.
Project Management
Tracks critical steps in projects to ensure they are completed on

time.
 Identifies and reacts to the outside forces that might influence or
alter the organization's goals.
 Establishes a course-of-action to accomplish a specific goal.
 Identifies, evaluates, and implements measurement systems for
current and future projects.
Implement Employee Involvement Strategies

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 Develops ownership by bringing employees in on the decision

making and planning process.
 Provides the means to enable employee success, while
maintaining the well-being of the organization.
 Develops processes to engage employees in achieving the
objectives of the organization.
 Empower employees by giving them the authority to get things
accomplished in the most efficient and timely manner.
Coach and Train Peers and Subordinates
 Recognizes that learning happens at every opportunity (treats mistakes as a
learning event).
 Develops future leaders by being involved in the company mentoring
program.
 Provides performance feedback, coaching, and career development to teams
and individuals to maximize their probability of success.
 Ensure leadership at every level by coaching employees to ensure the right
things happen.
 Ensures performance feedback is an integral part of the day-to-day activities.

2.5Good Leadership vs. Bad Leadership

Leadership applies to people, not things, and denotes the sending of value standard
messages that most people then use to conduct their work. This is how
industriously, cooperatively, openly, respectfully, caringly, honestly, neatly,
cleanly, and the like to perform their work. Thus we say that employees have been
led in the direction of those standards. Now, if value standards were a coin, one
side would be stamped leadership and the other side would be stamped
followership.

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An employee experiences leadership through the support provided by
management. The quality of this support dictates the quality of their work. The
support they use comes in two forms; tangible and intangible. Tangible support
consists of training, tools, material, protocol, direction, procedures, rules, technical
advice, documentation, planning, etc. Intangible support consists of feelings like
confidence, morale, trust, respect, relatedness, autonomy, ownership, engagement
and empowerment.

Leadership happens inexorably every minute of every day because the vast
majority of people are followers, some more, some less. Followers follow the
leadership of the boss. This is a Natural Law. The only choice available to a boss is
to set the standard employees will follow—will they be good, bad or mediocre
(somewhere in between)?

Good Leadership: In order to produce the finest goods and services, all
employees must treat their work and their customers with great respect, with tender
love and care as they say. It follows then that good leadership requires treating
employees with great respect and tender love and care; the better the respect and
caring, the better the outcome. Because of the Natural Law, treating employees as
if they are very important and valuable causes them to feel and become this way.
What then characterizes good leadership?
 Listening to your employees including subordinate managers/bosses
— addressing their complaints, suggestions, concerns, personal
issues.
 Coaching people when necessary to raise them to a higher standard.
 Allowing everyone to put in their two cents — you treat everyone
with respect.

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  Trusting them to do the work.
 Not giving orders or setting visions, goals and objectives, but instead
soliciting this from them so that everyone is fully involved in how the
company will be successful.
 Providing direction when needed to ensure that everyone is on the
same page (the one they devised). A good leader communicates the
vision that was set by all. If it is a vision of little interest, then
another one must be found.

Treating employees with great respect leads them to treat their work, their
customers, each other and their bosses with great respect. Every person wants to be
heard and respected. Everyone has something to contribute. Listening and
responding respectfully makes it worthwhile for employees to apply 100% of their
brainpower on their work thus unleashing their full potential of creativity,
innovation and productivity and making them highly motivated, committed and
productive. All of this gives them very high morale, enables them to take great
pride in their work and then they will literally love to come to work. Good
leadership multiplies whatever creativity, innovation and productivity top
management has by however many employees they have.
Bad Leadership: It is characterized by attempting to control employees through
orders, policies, rules, goals, targets, reports, visions, bureaucracy, and changes all
designed to almost force employees to work and to create what management
considers being satisfactory products. In this mode, management on its own
decides what to do, when to do it and how to do it and listens only perfunctorily, if
they listen at all, to what employees have to say.What is bad leadership?

 Attempting to control employees through orders, policies, rules, goals,

targets, reports, and changes designed to force employees to work what
management believes to be satisfactory.

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  Not listening or only perfunctorily listening to complaints and suggestions.
 Not trying to motivate employees.
 Exhibiting the ‘Do as I say, not as I do’ mentality
 Providing inadequate support
 Withholding information
 Treating employees as if they don’t want to do a better job, don’t care about
their work, don’t want to accept responsibility, or don’t really want to work.
 Treating them as if they are lucky to have a job
 Being afraid to discipline and never disciplining
 Staying in your office
 “Us versus them” mentality—“Why aren’t they performing better?”—
“What’s wrong with that person? Why don’t they know their job? They
should know their job”etc…

These actions are bad because they lead employees to believe that management
disrespects them and does not care a whit for them. It also puts employees in the
state of having to guess what management wants and management must be right
about everything because no one else is allowed to make decisions.
Bad leadership shuts off the natural creativity, innovation, and productivity of each
employee and slowly but surely demotivates and demoralizes them. With the “I
know better than you” and the “be quiet and listen to me” mentality being
projected from management, the majority will act like robots waiting for
instructions, even if that is not what bosses intended.

Most bad leadership is the result of a top-down, command and control style of
management, where the employee is rarely if ever listened to. This style ignores

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every employee's basic need to be heard and to be respected. It results in a
knowledge barrier and top management becoming ignorant of what is really going
on in the workplace, which in turn makes their directives misguided at best and
irrelevant at worst.

For example: An employee makes a mistake, or at least the boss, thinks they made
a mistake, and instead of finding out if it really was a mistake, the boss orders a
change or grills the employee as to why they made the mistake. “What went wrong
here?” Or “So and so said you were doing this instead of that, why are you doing
that?” This is pure disrespect. You would not want to be likewise grilled, would
you? But have you ever experienced such an exchange? Firstly, the employee does
not think they did anything wrong and secondly, due tosuch passive aggressive
behavior, can’t be certain what was really wrong. “Well, don’t do it this way, do it
that way,” you might hear the boss say after the grilling. The boss basically sets the
employee up for failure again, making them guess what the issue is or was. This is
bad leadership and it is top-down in style.

In the top-down model, nobody is really listening to employee ideas, valuing the
opinions of subordinates, or giving employees any recognition. The only way that
the workforce can deal with managers who treat them in this way is to disengage
and ignore the behavior of managers, bosses, and executives. In the workplace this
is seen as being sullen, uncommunicative, having a poor attitude, low morale or
apathy. Have you seen this? Have you used those words as a manager?Bad
leadership causes a huge amount stress for employees and managers too, and this
turns into poor performance, sick days, mistakes, lack of adherence to rules,
turnover and a whole host of other issues you may have seen in the
workplace.With management attempting to manage the work instead of the people,

55
much damage is done as managing the work requires a huge amount of time and
effort and leaves management little or no time to actually manage people.
Now, let’s look at the above example with good leadership. You think you have
heard that something is being done incorrectly. You trot down to observe, ask
some questions and listen. You say hello to the person involved, then “Hey, so tell
me, how you are going about this job?” You get an answer. “Okay, so why like this
and not like this?” If they are doing something that you really think is wrong, then
you point it out by saying, “What if you did it like this? What do you think about
that?” “Well, that doesn’t really work, because XYZ group doesn’t get us what we
need on time…” Ah, there you go, a support deficiency. That’s your job, dear boss.
Or maybe you find the way the person does something works better or that they get
their work done faster that way or that they were lacking some knowledge or
training, which again is support that you, as the boss, are responsible for providing.
Who knows what you will find out, but most assuredly, if you go in combatively or
passive aggressively, the person will shut down, because you are the boss, they are
taught to listen to you and wait for your decision when you treat them like a robot.
So, leaders lead in a good direction or a bad direction with a full spectrum existing
from exceptionally bad to exceptionally good. Every manager will by his or her
actions lead in some direction within this spectrum, though this direction may not
be understood or consciously chosen by the manager. Quite fortunately, we are all
human and we are all good. We can, therefore, consciously choose to adjust our
actions to always lead in the good direction to raise our performance and success in
managing people.

CHAPTER
SUMMARY

56
 Leadership style is a pattern of behavior exhibited by a leader during
influencing subordinates to accomplish organizational objectives.
 Leadership styles are divided in to bureaucratic, charismatic, democratic,
and autocratic, liaisez fair, people centered and task centered.
 Great man theory, trait theory, behavioral theory and situational theory are
among the most widespread theories that have been the source of
numerous studies.
 Transformational leadership enhances the motivation, morale and
performance of followers through a variety of mechanisms. Four elements
of transformational leadership: Individualized Consideration, Inspirational
Motivation, Idealized Influence Intellectual Stimulation
 Transactional leadership is defined as the influence of a leader toward his
subordinates using reward and punishment as a form of motivational
medium.
 Servant-leadership incorporates the ideals of empowerment, total quality,
team building, participatory management, and the service ethic into a
leadership philosophy.
 Competency is a skill that an individual has, which equips them to perform
a specific task.
 Good leadership requires treating employees with great respect and tender
love and care; the better the respect and caring, the better the outcome&
the reverse will be true for Bad leaders.

Chapter three

Overview of Change Management

57
Introduction

Dear students, welcome to the second part of the course. In this unit you will learn
about the meaning of change and change management, forces for organizational
change, process of organizational change, resistance to change and its
management, planned change and strategies for planned organizational change.

C
hange is inevitable. Nothing is permanent except the change. It is the
duty of the management to manage change properly. Organizations must
keep a close watch on the environment and incorporate suitable changes
if the situation so demands. Change is a continuous phenomenon.
Organizations must be proactive in affecting change. Even in most stable
organizations change is necessary just to keep the level of stability. The
major environmental forces, which make the change necessary, are
technology, market forces and socio-economic factors. Resistance to
change is not desirable. It is counterproductive for growth and destructive
in nature. Managers must evolve policies to affect change. According to
Barney and Griffin, “the primary reason cited for organizational problems
is the failure by managers to properly anticipate or respond to forces for
change.

As you can remember, Barak Obama started his election campaign with a plan to
renew America’s promise with the words “Change we can believe in”. His
presidential campaign was marked by changes. He wanted to change a nation and
its way of acting. Throughout the campaign, Obama’s change was aimed towards
bringing a rapid end to the war in Iraq, decreasing energy dependence, and
providing universal health care. In his victory speech Obama said, “Change has

58
come to America”.Up to now, not all of his plans and ideas have proven successful
and only the future will reveal their full potential. In an admittedly smaller world,
every person in his or her life as well as every manager of an organization is faced
with change or the requirement to make changes every day.

3.1 The meaning of Change and Change Management

Change refers to an alteration of a company’s strategy, organization or culture as a

result of changes in its environment, structure, technology, or people. A manager’s
job would be very straight forward. Good managers have a competence to manage
change in the company’s environment. These changes can be alterations in
structure (design of change, span of control, authority relationships or coordinating
mechanisms), in technology (equipments, work processes or work methods), as
well as in people (behaviors, perceptions, expectations or attitudes).

Introduction of change in one part in an organization forces change in other part. If

the change is beneficial people accept it willingly. If it is not desirable, there is
great resistance. If it is of no consequence to the people, they may adopt an attitude
of indifference. If they consider the change detrimental to their growth and
prosperity, they may resist through counter pressure. This reaction is based not
necessarily on the reality or facts but on their perception. The change therefore
should be sufficiently strong enough to overcome the counter pressure.

59
Due to advancement of technology and social environment change has become a
necessity. If the change takes place, a balance or equilibrium is achieved by the
organization. Thus people learn to expect various environment relationships within
the organization.
They learn adaptation. The essence is that when people feel that there is need to
change, and when they change, they actually are adjusting to changed situation
thus equilibrium is achieved with the changed environment. This process carries on
and is never ending because change takes place continuously.

Formally, change management is the approach to plan, design, implement, manage,

measure, and sustain changes in business processes and work.

3.2 Origins of Change Management

Change management has its origin in the 1950’s. In those days modern forms of
management were introduced (e.g. teamwork, autonomous groups) and the ‘war’
between followers of top-down (change) approaches and bottom-up (change)
approaches began.Top-down organizations are characterized by the relatively low
influence of subsystems with the exception of the top management, employees are
placed in a given process pattern. The organization’s units are coordinated within a
system of regulations and the organization’s development is steered from top
down.

Bottom-up organizations are characterized by the relatively high influence of

subsystems. The organization’s development is carried by involved employees. A

60
structural partial autonomy is conceded to the single subsystems. The
organization’s units are relatively independent in their execution of problems and
could be basically capable of surviving on their own. Regulations are found
primarily in the form of general behavioral instructions and the basis of “common
sense”. The organizations development is therefore developing itself bottom-up.

The best known concepts of top-down management are business process re-
engineering. The concept of Business Process Re-engineering (BPR) is aimed at
changes concerning quality, service, cost, and processing time. The core idea is
process orientation. The Business Process Re-engineering (BPR) takes into
consideration strategy creation as well as process creation without
describingmethods and instruments in detail. The documentation of the actual and
the planned process remain at a relatively coarse level and the main weight lies
with few identified core processes.

The best known concept of bottom-up management is kaizen. Kaizen (Japanese

for "improvement" or "change for the better") focuses upon continuous
improvement. Kaizen as a management approach is based on the idea that no
actual status (of a process or an organization) is good enough to be kept. It refers to
a continuous improvement of all functions and involves all employees from the
executive board to the assembly line workers. Kaizen was first implemented in
several Japanese businesses after the Second World War, influenced in part by
American business and quality management teachers who visited the country. It
has since spread throughout the world.

Nowadays, within modern change management approaches, top-down and bottom-

up approaches are mixed. As shown in Fig. 1, analysis and the strategy

61
development is mainly done top-down whereas continuous process improvement is
driven from the bottom-up. Constant dialogue between the involved parties
guarantees a constant improvement and focusing on the core requirements.

So change management is the:

 correct understanding of the organizations that want or need  to be
changed
 correct understanding of the people who are willing or forced to change
 the effective realization of change
 understanding the dynamics of change

Changes should be facilitated by the organizational structure because this enhances

adaptation and flexibility. A simple organizational structure will reach a simple
dynamic environment or, on the other hand, a simple dynamic environment needs a
simple structure only. For a complex dynamic environment an adhocracy will be
needed. Adhocracy means more democracy and less bureaucracy. One of the most
important points is the people, because they form the organization. The culture
of organization includes their way of working, attitudes and norms. These facts
are at the core of every change and they are difficult to handle. Personal
modifications regarding attitudes or skills in leadership or communication are hard

62
to identify but ineffectiveness can be indicated by problems and conflicts in the
management of human resources.

3.3 Forces for Organizational Change

Changes are triggered based on:

 The understanding of the macro-economic environments (E) and

developments,
 The analysis of the industry (I) practices and prospects and
 The assessment of company’s (C) performance, strength and weaknesses.

This can be coined as EIC (Environment-Industry-Company) drivers of Changes.

A) Environmental Change Drivers (External Factors): The PESTEL

framework facilitates identification of macro-environmental factors that may
affect business performance now and in the future.
 Political factors:Stability of government - Social policies, Trade
regulations,tax policies, consistent industry-friendly policies and
diligent workforce.
 Economic factors:Credit accessibility, Unemployment rates,
Interest rates, Inflation
 Social Factors: Population demographics: (e.g. aging population) -
Distribution of Wealth - Changes in lifestyles and trends -
Educational levels. Lifestyle products thrive when consumers are
more educated, socially connected and brand-aware and wealth is
widely distributed.

 Technological factors:New innovations and discoveries (e.g.

Walkman, convergence devices like I-phone) - Pace of

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 technological innovations and advances - Pace of technological
obsolescence - New technological platforms (e.g. internet).
 Environmental factors: Environmental protection (Carbon
Emission etc) laws - Waste disposal laws - Energy consumption
regulation - Popular attitude towards the environment Green
initiatives are forcing consumers to revise their choices of
automobiles, packaging stuff and appliances; and companies to
revisit their plant/building design and operational practices.
 Legal factors: Employment regulations - Competitive regulations -
Health and safety regulations - Product regulations the key for
business managers is to discover the degree of influence of main
environmental drivers and keep the strategic planning process
sensitive to current and future environment.

B) Industry-level Change Drivers (External Factors): Competitor’s

objective, assumption, strategies and capabilities are the elements of
competitor analysis. Similarly customer’s preferences, spending strategies
and pattern will form basis of market analysis. Both are dynamic and both
influence company-level changes through following competitive forces.

 Threat of New Entrants: It depends on economies of scale, capital

investment requirements, customer switching costs, access to industry
distribution channels, access to technology, brand loyalty, the
likelihood of retaliation from existing industry players, regulations.
Threat of new entrants may compel the company to invest in a change
initiative so as to increase the entry barrier.
 Threat of Substitutes:It depends on quality of the substitute, buyers'
willingness to substitute, relative price and performance of substitutes,
the costs of switching to substitutes. Threat of Substitutes may lead to
change initiatives that drive up the performance/price feature of the
product and services dealt by the company.

64
  Bargaining Power of Suppliers:It depends on concentration of
suppliers, branding of the supplier, profitability of suppliers, forward
integration by suppliers, role of quality and service, relative positioning
of customer, switching costs. Higher bargaining power of suppliers may
force the company to consider changes that reduces its business risk due
to relative weak position as a buyer.
 Bargaining Power of Buyers:It depends on concentration of buyers,
differentiation, role of quality and service, threat of backward
integration into the industry and switching costs. Higher bargaining
power of buyers may motivate the company to diversify the customer
base, improve the differentiating features of the product and cut cost to
reduce prices.
 Intensity of Rivalry:It depends on the structure of competition
(fragmented/concentrated), the structure of industry costs, degree of
product differentiation, switching costs, strategic objectives, and exit
barriers. It is quite common for a company to change its delivery
process, promotional and distribution practices, pricing and product so
as to respond to rival position of the competitor.

C) Company-level Change Drivers (Internal Factors): All external change

drivers will affect one or more perspectives of the company. Even when
there is no change in the environment or industry, the company may still
consider changes to improve one or more aspects of four perspectives
mentioned below.

 Customer Perspective: It deals with areas that affect customer

satisfaction, number of repeat customers, customer referrals, value
propositions, demographic, access to market, market share.
 Financial Perspective: It handles the concerns of the shareholders and
includes management of Return on Investment (ROI), Return on Asset
(ROA), profitability, stock price etc.
 Process Perspective: It deals with areas that affect process downtime,
work in process, backlog, defect rates, cycle times, operation &
maintenance expense, risks and corresponding mitigation measures.

65
  Learning Perspective:It deals with new products, number of patents,
number of employee suggestions, revenue per employee, development
plan, and qualification/certification in promotion etc.

Characteristics of change drivers are as follows:

1) Change drivers are myriad/numerous and dynamic.

2) Certain change drivers are ubiquitous and common to all organizations

irrespective of scale, sophistication and industry. E. g: Widespread use of
internet and globalization.

3) Certain change drivers are industry specific like regulation related to

Banking.

4) Perceived intensity of change drivers varies from one company to another.

5) Both external and internal change drivers may be related. External change
drivers are expected to impact at least one internal change driver perspective
and are initiated and implemented as Company-level Change drivers.

6) Presence of change driver is not a sufficient reason for a change. It also

depends on the mission, vision, SWOT (Strength, Weakness, Opportunity
and Threats) and priorities of an organization.

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 3.4 Benefits and Significance of Change Management

The subject matter holds a tremendous importance for both individual and
organization. Let us discuss some of the benefits from organization perspective.

 Understanding environment (society, government, customers): It is

important for organization to understand, assess and gauge the dynamics
in its external environment in order to envisage and establish an
appropriate relationship with various actors like government, customers
and society. Therefore managers by knowing the subject of change
management can better be prepared to understand whatever is going on in
the environment.
 Objectives, strategy formulation & implementation (to develop
competitive advantage): Second is consequent upon knowing the impact
of change at extraneous level on its own internal dynamics, and the
foremost is objective setting and seeking competitive advantage.
 Employees (trained, high performing work practices, reliable
organization):The employees are the recipient of change plan. One such
perpetual concern of senior managers is to make organization highly
reliable, therefore employees ought to be trained and high performing
one in today’s hyper competitive world.
 Technology Issues: Technology is considered the engine of growth in
today’s world. Perhaps the greatest challenge for contemporary
organizations is the acquisition and integration of technology in its
strategy, structure and process. As such the concern of top managers is
how to avoid organization being obsolete and how to cope and absorb the

67
 impact of changing information and communication technologies which
have decisively influencing production and consumption behavior?

 Globalization: The management of international economic and political

forces what is today known as internationalization and globalization is
yet another important factor influencing decision making of organization.
No organization or nation can stay independent and indifferent to
whatever is happening at international (political) level. For example the
compulsions and legal provisions of international treaties like WTO and
ISO certification regimes have decisively influenced the organizations
and economies of the developing world. Hence imperative for managers,
CEOs and entrepreneurs from smaller or larger organizations alike, of
different sectors of economy, is to understand the complexities of
globalization and its impact on organization’ business.

3.5 The Change Process

Accelerated by global competition, the pressure to change business strategy is

a worldwide phenomenon. Industrial activities are shifting from manufacturing to
service, globalization of markets, political realignments, technical advances in
management information systems, corporate alliances and downsizing of
organizations are changing the structures of corporations and projects. In parallel,
organizations are faced with global competition. This competition is becoming
more and more obvious in automobile manufacturing, consumer electronics,
computers and communications and household manufacturing. Increasingly, the

68
global heavyweight players of the world economy are large corporations involved
in international or multinational projects.

There is a global market and competition for most goods and services. In order to
effectively compete in it, organizations must use creativity and transform their
cultures, structures and operations. The emergence of these global organizations
creates pressure on domestic organizations and projects to restructure and
internationalize their outlook and operations. Because of these powerful forces
for globalization, organizations must explore project opportunities all over the
world.

Technology is changing at a rate greater than at any time in history. One of the

most dramatic technological changes affecting the work environment is the rapid
expansion of information system technology. This technological revolution is
having a profound impact on project structures, power relationships and the
management of complex project interfaces. Artificial intelligence, computer-
integrated manufacturing and virtual reality are creating new project opportunities
in terms of their development and applications. Technology eliminates the
problems of physical distance. Audio/Videoconferences create the personal and
direct interaction that is needed to work as a team.

The effects of rapid product obsolescence can be dramatic for organizations which
cannot adapt and quickly handle this situation. In the pharmaceutical and
electronics industries, some products become obsolete in as little six months.
Projects aimed at developing products and services in such industries must adapt to
this rate of change in a cost-effective manner to be successful.

Kurt Lewin, a prominent researcher, proposed the unfreeze/change/refreeze model.

According to his approach, firstly, staff must be convinced that change is actually

69
necessary. Managers need to highlight the areas of concern, or perhaps point out
where things are better in rival businesses. Next, the change itself requires a range
of solutions to be acted upon as soon as possible (before resistance builds
up).Finally, refreezing involves reinforcing and formalizing the change (written
down, repeated, and disseminated).

Figure 2:Unfreezing - Moving – Refreezing (the change process)

1) Unfreezing: The Process of unfreezing makes individuals ready for change.

Lewin believes that employees must be informed in advance of impending
change and that they should not be surprised. Unfreezing entails unfreezing
the old behavior or situation. Edgar Schein took this excellent idea
propagated by Lewin and improved by specifying psychological
mechanism involved in each stage of the model. Unfreezing involves
creating motivation and readiness to change by creating an environment of
disconfirmation of existing psychological safety in the changed pattern of
behavior. This can be achieved by making announcements, meetings and

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 promoting the idea throughout the organization through bulletin, boards,
personal contacts and group conferences.

For example, if an organization wants to undergo automation program, the

first thing is to unfreeze the mindset of managers by creating
dissatisfaction about the existing system file work or manual work. So
creating discomfort among members of organization about lower level of
productivity, creating sense of urgency and instilling fear of lagging behind
in competition and enlisting perceived benefits are various techniques for
unfreezing.

2) Moving: Once unfreezing process is completed, moving takes place.

Moving is about incorporating change. With respect to the above example,
once the decision is taken for automation leads to multiple problems of
learning, training, jobs and position displacements, hiring of computer
technologist, budgetary allocations etc will create unease and tensions in the
two types of system; manual and automated one.The process is carried out
by the following 3 methods:

 Compliance:Compliance is achieved by introducing rewards and

punishments. It has been established that individual accepts change
if he is rewarded or punished. This is a behavior modification tool.
 Identification:Members are psychologically impressed upon to
select their role model and modify behavior. If a leader can act as a
role model the change is easier.
 Internalization:It involves internal changing of individual’s thought
processes in order to adjust to a new environment. Members are
advised to carry out soul searching and adopt a new behavior.

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 The term 'change ready' is often used to describe people who are unfrozen and
ready to take the next step. Some people come ready for change whilst others
take a long time to let go of their comfortable current realities.

Here are some ways to make it happen:

 Burning platform: Expose or create a crisis.

 Challenge: Inspire them to achieve remarkable things.

 Command: Just tell them to move!

 Evidence: Cold, hard data is difficult to ignore.

 Destabilizing: Shaking people out of their comfort zone.

 Education: Teach them to change.

 Management by Objectives (MBO): Tell people what to do, but

not how.
 Restructuring: Redesign the organization to force behavior change.

 Rites of passage: Hold a wake to help let go of the past.

 Setting goals: Give them a formal objective.

 Envisioning: Done well, visions work to create change.

3) Transition: A key part of Lewin's model is the notion that change is a

journey rather than a simple step. This journey may not be that simple and
the person may need to go through several stages of misunderstanding
before they get to the other side. A classic trap in achieving change is for
leaders to spend months on their own personal journeys and then expect
everyone else to cross the chasm in a single bound.
Transitioning thus requires time. Leadership is often important and when
whole organizations change, the one-eyed person may consider himself a

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 “king”. In such a case, some form of coaching, counseling or other
psychological support will often be very helpful.

Although transition may be hard for the individual, often the hardest part
is to make a start. Even when a person is unfrozen and ready for change,
that first step can be very scary. Transition can also be a pleasant trap and,
as Robert Louis Stephenson said, 'It is better to travel hopefully than to
arrive.' People become comfortable in temporary situations where they are
not accountable for the hazards of normal work and where talking about
change may be substituted for real action.

4) Refreeze: It is related to integrating the new behaviors into the person’s

personality and attitude. It is referred to stabilization. The change behavior
must necessarily fit into the social surroundings. Refreezing takes place
when the new behavior is adopted in a normal way of life. New behavior
must replace the old on a permanent basis. New behaviors must be re-
enforced continuously so that it does not diminish. Change process is not a
onetime process but it is continuous hence unfreezing, change and
refreezing must also be continuous.

Once the new objective or desired state of affairs has been achieved the
problem with this phase is to institutionalize the new system so that people
might not revert back to the older ways of doing things. The purpose in this
phase is to stabilize new learning. This can be done through behavioral
reinforcement. In this stage again the effectiveness of performance –reward
linkage is considered to be the part of enabling environment. New behavior
is to be internalized. Important note here is that effects of many training

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 programmes and lectures are short lived when a person returns to the
environment that does not reinforce. Hence continuous and intermittent
reinforcement is needed.
Another example from real life is that Pakistanis are known as highly
productive abroad but back in their own society they are known as work
shruggers, the difference is on account of enabling environment. Therefore
in order to refreeze the new behavior, system or equilibrium we have to
provide enabling environment.

5) Application: The model can be applied to all three levels to explain change
management phenomenon; societal, organizational and individual. For
instance our society in over all analysis is in transition phase. Older things,
system and traditions have been unfrozen, but we have yet to learn the
dynamics of new systems as the productivity of newly learned behavior is
at lower level than the traditional system.
The society is in transition from agrarian to industrial, rural to urban and
traditional to modern. Members of such a society face a situation of role
overload and role conflict bears attributes of both systems. We have
unlearned our traditions but yet to learn modern productive traits. This
transition reflects what is identified by one author as ‘crazy period’.

3.6 Resistance to Change

Change is a constant phenomenon. Dynamic forces are always at play and

therefore individuals must adjust to it and carryout change. If the change is not
implemented, society will be stagnant and becomes hopeless. Individuals accept
change in the technical field but resist the other as it has far reaching consequences

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for the social change. Change no matter how beneficial, is generally resisted and is
always difficult to implement. It must be emphasized that change brings with it
new challenges, new experiences, spirit and associated rewards and therefore it
should be welcomed and implemented with positiveness and full support.
However, there are certain factors that resist change;

 Job Security:One of the major reasons for change is job security. In recent
times there has been the trend for downsizing the organization as a measure
of cost cutting. Introduction of modern technology and systems should lead
to the growth in productivity of the organization and should not lead to
employee turnover.

 Lack of Communication:Different people will see different meanings in

the proposed change. Management must communicate in advance the need
for change, process to adopt for implementation of change. Employees
should be co-opted right from the beginning in the process of change so that
they are party to change and resistance is reduced to a great extent.

 Rapidity and Extent of Change: Autocratic leader has a tendency to

introduce change abruptly with speed. Resistance therefore may be expected
to the degree that the persons influenced by the change have pressure put
upon them to make it happen. If the change is of a minor nature and involves
routine operations, the resistance would be minimal. If on the contrary the
change is major and involves large number of employees there could be
tremendous resistance to it. For example when Balco was privatized all
employees resisted it.

 Group Phenomenon:Individual on occasions resists change because group

wants it that way. Importance of group cohesion, group norms, code of
conduct and the security group provides to individuals play a dominant role
in individual behavior that makes them to resist change.

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 Emotions: Resistance can be expected when those influenced are caught in
a jam between forces of change and forces of resistance. Resistance may be
expected if the change is made on personal ground and past history of
change of identical emotions. If the experience has been pleasant, then the
resistance would be negligible. Workers willingly accept technical change if
it does not have adverse effect on social fiber of the group. Resistance can be
expected if the nature of the people who are going to be influenced by the
change. It is necessary that due care must be taken to protect the emotions of
people.
 Loss of Power: Downsizing of department or posting of an executive to
different department, where there is a reduction of power base will be
resisted by the affected individuals though it may be of overall interest to the
organization. For example superintendent of police of a district will resist
positing as an instructor to the police-training academy.

 Technology:Technology changes are required for the growth of

organization. People have now realized to be competitive. Latest technology,
which improves the human skill, must be introduced in the organization. It is
important to consider that no human resources should be replaced by these
changes. Certain amount of displacement should be taken in stride.
Introduction of technology that causes economic loss and disturb social
relationship are generally resisted.

 New Practices: Due to advent of technology and education, more and more
female employees are joining organizations. Some of them are serving in the
position of top decision-making. Women domination is not liked by the
people and is therefore resisted. For survival, organizations have to adopt the
strategy of acquisitions and mergers, which is also resisted by the
employees.Generally, Resistance is expression of reservation which
normally arises as a response or reaction to change in an organization.
Resistance can emanate from individuals or organization itself. Here below
are individual and organization factors.

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 Individual Sources of Resistance Organizational Sources of
Resistance
 Fear of the Unknown  Structural Inertia (mechanisms
and
 Self-Interest  regulations established before)
 Habit  Group Norms
 Personality Conflicts A Resistant Organizational
Culture
 Differing Perceptions  Threatened Power
 General Mistrust  Threatened Expertise
 Social Disruptions  Threatened Resource allocation

3.6.1 Implications of Resistance

Resistance to change does not necessarily surface in standard ways. Resistance can
be overt, implicit, immediate, or deferred. It is easiest for management to deal with
resistance when it is overt and immediate. For instance, a change is proposed, and
employees respond immediately by voicing complaints, engaging in work
slowdowns, threatening to go on strike, or the like.
The greater challenge is managing resistance that is implicit or deferred. Implicit
resistance efforts are more subtle—loss of loyalty to the organization, loss of
motivation to work, increased errors or mistakes, increased absenteeism due to
“sickness”—and hence more difficult to recognize.

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For any change to be accepted by the employees cooperatively, it is important for a
manager to anticipate and handle the employees. Only looking at the technical and
logical dimensions of change will not help as change is finally to be accepted and
implemented by the employees themselves.

Recognizing the effect on social factors is extremely important for the success of
any change effort. It has to be borne in mind that as people are different; their
response to change would also be different which may range from moderate
support to weak support or even opposition to change. The managers responsible
for change need to develop a climate of trust with positive feelings towards most
changes. It is observed that when management is not able to win support of
employees they use authority but if it is over used it will defeat the purpose.
Therefore, authority needs to be used only sparingly and the other methods
handling resistance to change can be tried out.

3.6.2 Managing Resistance to Change

Change ultimately affects people in the organization. It is always better to explain

to them why change is necessary, what benefits are likely to accrue as a result of
change and how these benefits are to be shared by employees and the organization.
Free flow of information and two-way communication is necessary. If proper
communication is not maintained, negative attitudes are likely to be formed while
change is being implemented. There is a general impression that benefits from
change accrue to the organization and management at the cost of workers. It must
be remembered that without full cooperation of workers, no change can be

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planned, implemented and the benefits enjoyed. No growth of the organization can
take place unless workers bring it about.
Management must understand that workers are the key element of any organization
and that they must be involved from the planning stage of change. This will result
in increased productivity of the organization. Participation should not be simply a
mechanical act of calling upon employees to “Participate”. It should be clearly
understood that there is no one simple panacea to be used in all situations.
Participation is not being universally followed. The different combinations of
different methods, techniques and procedures may have to be tried. There may be
need for the counseling and training of people. If the situation warrants, the plan
even may have to be dropped. Conscious efforts must be made by the leader to
remove the fears of employees.Generally, resistance to change can be handled
using the following strategies:
 Communicate Effectively:One of the most effective ways to reduce
resistance is to communicate with the employees and help them see the logic
behind introducing a change. It is often observed that lack of knowledge and
ignorance is cause of individual resistance and this can be taken care of
through communication on one-on-one basis or through group presentations,
circulars or reports. This strategy would work where source of resistances is
lack of knowledge and inadequate management employee relations and
communications.
 Participative Decision-making:Since security and self-esteem are the
underlying fears for resistance to change, Involvement of employees in
decision-making will bring down resistance and they will get an opportunity
to express their opinion and views. Such an approach will work when the
employee sees that the management has employee interest in mind.

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 However, the flip side of this strategy is it is time-consuming and may
sometime lead to a poor quality decision.
 Negotiation: Another method used by change agent to deal with potential
resistance to change is to offer of something of value to reduce the
resistance. Negotiation is usually adopted when some powerful source is
behind resistance. Though negotiation helps overcome resistance in many
situations, one cannot ignore high cost involved in it and the risk of exposure
of the negotiator to the members of his group or other powerful position
holders.
 Providing Support:Resistance to change can be minimized by providing
support to employees to alleviate their anxiety and fear. Organizations use
employee counseling or mentoring and therapy to take care of negative
effects of change. The shortcomings of this tactic are that it is expensive and
there is no guarantee of success in adopting this tactic.
 Co-optation and Manipulation: Co-optation involves manipulation or
participation. Essentially it offers key role to the 'leaders of a group resisting
change in the decision-making process. In this method leader's opinion is
invited largely for endorsement of the change agent's views. Cooptation is
influencing resistant parties to endorse the change effort by providing them
with benefits they desire and non-influential role in the process.
Manipulation involves distorting facts or withholding unacceptable
information and malting facts in a way to look attractive and acceptable. In
such situation the change agent will lose its faith before the group.
Manipulation is framing and selectively using information and implied
incentives to maximize the likelihood of acceptance. An example would be

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 if the management tells employees that accepting a pay cut is necessary to
avoid a plant shut down, when plant closure would not really have to occur.
Both cooptation and manipulation are inexpensive method to win over
resistance. These two work so long as the affected party is not aware that
they are being exploited or cheated.
 Coercion:Coercion is applying threat or pressurizing the employees
implicitly or explicitly to accept (change under duress. Situations of closure
of a plant or downsizing or bankruptcy could be examples of implicit
coercion. Other examples of this found in organizations are adverse
performance evaluation, transfer or threat of transfer and depriving
promotion etc. Coercion should be used as the last resort.

3.6.3 Proactive and Reactive Resistance Management

Managing resistance during any business change should include both proactive
planning and reactive interventions. All too often, teams rely exclusively on
reactive measures when resistance has already resulted in productivity loss and
wasted time and resources.

Proactive resistance management involves systematically identifying where

resistance might come from and what it might look like. The team identifies
critical gaps and possible points of resistance, and addresses them before they even
emerge. Proactive resistance management requires planning by the team and
intervention from sponsors, managers and supervisors.

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Reactive resistance management is in response to specific points of resistance. In
the reactive situation, the team must listen to employees and identify the source of
the resistance. Specific action steps should be developed, communicated and
implemented.

3.7 Change management process

The change management process is the sequence of steps or activities that a

change management team or project leader would follow to apply change
management to a project or change. Based on Prosci's research of the most
effective and commonly applied change, most change management processes
contain the following three phases (see fig. 3):

Phase 1 - Preparing for change (Preparation, assessment and strategy

development)

Phase 2 - Managing change (Detailed planning and change management

implementation)

Phase 3 - Reinforcing change (Data gathering, corrective action and recognition)

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Figure3:Change Management Process

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 UNIT 4
TYPES OF CHANGE

1.1 Planned Vs Unplanned Change

1.1.1 Planned Change

Planned change occurs when leaders in the organization recognize the need for a
major change and proactively organize a plan to accomplish the change. Planned
change occurs with successful implementation of a Strategic Plan, plan for
reorganization, or other implementation of a change of this magnitude. Planned
organizational change is normally targeted at improving effectiveness at one or
more of four different levels: human resources, functional resources, technological
capabilities, and organizational capabilities.

Human Resources: Human resources are an organization’s most important asset.

Ultimately, an organization’s distinctive competencies lie in the skills and abilities
of its employees. Because these skills and abilities give an organization
competitive advantage, organizations must continually monitor their structures to
find the most effective way of motivating and organizing human resources to
acquire and use their skills. Typical kinds of change efforts directed at human
resources include : (i) new investment in training and development activities so

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that employees acquire new skills and abilities; (ii) socializing employees into the
organizational culture so that they learn the new routines on which organizational
performance depends; (iii) changing organizational norms and values to motivate a
multi-cultural and diverse work force; (iv) ongoing examination of the way in
which promotion and reward systems operate in a diverse work force; and (v)
changing the composition of the top-management team to improve organizational
learning and decision making.

Functional Resources: Each organizational function needs to develop procedures

that allow it to manage the particular environment it faces. As the environment
changes, organizations often transfer resources to the functions where the most
value can be created. Critical functions grow in importance, while those whose
usefulness is declining shrink. Organizations can improve the value that its
functions create by changing its structure, culture, and technology. The change
from a functional to a product team structure, for example, may speed the new
product development process. Alterations in functional structure can help provide a
setting in which people are motivated to perform. The change from traditional
mass production to a manufacturing operation based on self-managed work teams
often allows companies to increase product quality and productivity if employees
can share in the gains from the new work system.

Technological Capabilities: Technological capabilities give an organization an

enormous capacity to change itself in order to exploit market opportunities. The
ability to develop a constant stream of new products or to modify existing products
so that they continue to attract customers is one of an organization’s core
competencies. Similarly, the ability to improve the way goods and services are

85
produced in order to increase their quality and reliability is a crucial organizational
capability.

Organizational Capabilities: Through the design of organizational structure and

culture an organization can harness its human and functional resources to take
advantage of technological opportunities. Organizational change often involves
changing the relationship between people and functions to increase their ability to
create value. Changes in structure and culture take place at all levels of the
organization and include changing the routines an individual uses to greet
customers, changing work group relationships, improving integration between
divisions, and changing corporate culture by changing the top-management team.

These four levels at which change can take place are obviously interdependent, it is
often impossible to change one without changing another. Suppose an organization
invests resources and recruits a team of scientists who are experts in a new
technology – for example, biotechnology. If successful, this human resource
change will lead to the emergence of a new functional resource and a new
technological capability.
Top management will be forced to re-evaluate its organizational structure and the
way it integrates and coordinates its other functions, to ensure that they support its
new functional resources.

1.1.2 Unplanned Change

Not all forces for change are the result of strategic planning. Indeed, organizations
also must be responsive to changes that are unplanned. Such forces include

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changes in the demographic composition of the work force, performance gaps,
government regulation, and international competition. Unplanned change is
occurred with sudden changes in both internal and external factors. It is not a
change through strategic plan, rather it is a change either to tackle possible risks
due to environmental changes or exploit opportunities without prior plan.
Unplanned change might occur when the Chief Executive Officer suddenly leaves
the organization, significant public relations problems occur, poor product
performance quickly results in loss of customers, or other disruptive situations
arise.

1.2 Evolutionary or Revolutionary Change

Organizations face two types of changes, evolutionary and revolutionary.

Evolutionary change is change that happens over time to ensure the survival of the
organization. Evolutionary change is typically change brought about by either
outside pressure or incentives. For example, many hospital and healthcare
providers have evolved by transforming their paper medical record keeping to
electronic medical record keeping due to external financial incentives. Retail and
food chains typical evolve by outside pressure from competition. A new salad
offering at one chain of fast food restaurants and invariably a salad offering is
picked up by all the others. Whether healthcare, fast food, retail, or a service
industry, evolutionary change keeps everyone in the game.

In contrast, revolutionary change occurs when organizations make radical

transformations to their product or service in an effort to be on their game rather
than simply in the game. These organizations engage in revolutionary
transformations at key points of their evolution. Revolutionary change is when the

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organization anticipates a market change before it happens and views these
potential market changes as a business challenge. Example: Amazon is an
organization that engages in revolutionary change. The advent of the Kindle was
revolutionary to the book publishing and reading world. What was the result? The
result was a new market share and increased profit margin. Amazon’s competition
quickly engaged in evolutionary change, copying the Kindle with their own
version of an electronic reader in order to survive and remain competitive. Amazon
is just one example of an organization on their game. There are many other
outstanding organizations that engage regularly in revolutionary change. It is
revolutionary not evolutionary change that separates the winners from merely the
survivors.

1.3 Organization-wide Versus Subsystem Change (Based on scope of

change)

Examples of organization-wide change might be a major restructuring,

collaboration or “rightsizing.” Usually, organizations must undertake organization-
wide change to evolve to a different level in their life cycle, for example, going
from a highly reactive, entrepreneurial organization to one that has a more stable
and planned development. Experts assert that successful organizational change
requires a change in culture – cultural change is another example of organization-
wide change.
Examples of a change in a subsystem might include addition or removal of a
product or service, reorganization of a certain department, or implementation of a
new process to deliver products or services.

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 1.4 Strategic, Structural, People or Process Centered (Based on focus of
change)

 Strategic: Sometimes in the course of normal business operation it is necessary

for management to adjust the firm's strategy to achieve the goals of the company,
or even to change the mission statement of the organization in response to
demands of the external environments. Adjusting a company's strategy may
involve changing its fundamental approach to doing business: the markets it will
target, the kinds of products it will sell, how they will be sold, its overall strategic
orientation, the level of global activity, and its various partnerships and other
joint-business arrangements.

 Structural: Organizations often find it necessary to redesign the structure of the

company due to influences from the external environment. Structural changes
involve the hierarchy of authority, goals, structural characteristics, administrative
procedures, and management systems. Almost all change in how an organization
is managed falls under the category of structural change. A structural change may
be as simple as implementing a no-smoking policy, or as involved as restructuring
the company to meet the customer needs more effectively.

 Process-oriented: Organizations may need to reengineer processes to achieve

optimum workflow and productivity. Process-oriented change is often related to
an organization's production process or how the organization assembles products
or delivers services. The adoption of robotics in a manufacturing plant and laser-
scanning checkout systems at supermarkets are examples of process-oriented
changes.

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 People-centered: This type of change alters the attitudes, behaviors, skills, or
performance of employees in the company. Changing people-centered processes
involves communicating, motivating, leading, and interacting within groups. This
focus may entail changing how problems are solved, the way employees learn
new skills, and even the very nature of how employees perceive themselves, their
jobs, and the organization.

1.5 Business Process Reengineering (BPR)

1.5.1 The Concept of BPR

Business Process Reengineering (BPR) is the fundamental rethinking and radical

redesign of business processes to achieve dramatic improvements in critical,
contemporary measures of performance, such as cost, quality, service and speed
(Hammer &Champy, 1993).

Fundamental rethinking: Two questions are considered as being fundamental

and are addressing the company’s justification of existence: What are we doing?
And why are doing so? As Hammer points out, forcing people to question the way
they do business leads to rules turning out to be obsolete, erroneous and
inappropriate. Reengineering means starting from scratch, no assumptions given
and no current fact accepted and determines firstly what a company has to do, and
secondly how to do it.

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Radical redesign: BPR calls for getting to the root of issues and making far
reaching changes rather than superficial ones in order to effectively solve
problems. The power of modern information technology enables radical redesign
of business processes.

Dramatic Improvements: The purpose of conducting BPR is to achieve quantum

leaps in performance. BPR is not for organizations that need slight performance
improvements.

Business Processes: BPR focuses on business processes and not tasks.

Reengineered processes should be value adding, transcending departmental
boundaries. Process is a structured, measured set of activities designed to produce
a specified output for a particular customer or market. It implies a strong emphasis
on how work is done within an organization. Each process is composed of related
steps or activities that use people, information, and other resources to create value
for customers.
Business processes are characterized by three elements: the inputs, (data such
customer inquiries or materials), the processing of the data or materials (which
usually go through several stages and may necessary steps that turn out to be time
and money consuming), and the outcome (the delivery of the expected result). The
problematic part of the process is processing. Business process reengineering
mainly intervenes in the processing part, which is reengineered in order to become
less time and money consuming.

1.5.2 Historical Background of BPR

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The concept of reengineering traces its origins back to management theories
developed as early as the nineteenth century. Frederick Taylor suggested in the
1880's that managers use process reengineering methods to discover the best
processes for performing work, and that these processes be reengineered to
optimize productivity.

The later turning point was the article published by Michael Hammer, a former
professor of Computer Science at the Massachusetts Institute of Technology
(MIT), in the Harvard Business Review. In his Article, Hammer pointed out that
most organizations were using technology to automate non-value adding work. He
recommended the reengineering of business processes to weed out non-value
adding work before applying the power of technology to automate the processes.

Business process reengineering (BPR) is a popular term since the 1990s. Hammer
expounded his ideas on BPR in the book ‘Reengineering the Corporation: A
Manifesto for Business Revolution published in 1993.’ It began as a private sector
technique to help organizations fundamentally rethink how they do their work in
order to dramatically improve customer service, cut operational costs, and become
world-class competitors. The private sector in the United States of America was
the early adopter of BPR. Since then, BPR has gained acceptance as the main way
by which organizations (both private and public) become more efficient and
modernize. A key stimulus for reengineering has been the continuing development
and deployment of sophisticated information systems and networks.

1.5.3 Principles of BPR

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  Focus on the customer and generation of greater value for customers.

 Employees should be involved and empowered to make decisions for

improvement.

 Non-value adding processes must be removed.

 BPR should focus on networking people and integrating related processes.

 Harness the power of ICT but avoid over-sophistication. Software tools

should not replace creative thinking.

 Critical analysis of current rules, regulations, practices and legislation

1.5.4 Objectives of BPR

When applying the BPR management technique to a business organization the

implementation team effort is focused on the following objectives:
 Customer focus: Customer service oriented processes aiming to eliminate
customer complaints.
 Speed: Dramatic compression of the time it takes to complete a task for key
business organizing the processes a company develops transparency throughout
the operational level reducing cost. For instance the decision to buy a large
amount of raw material at 50% discount is connected to eleven cross checking’s
in the organizational structure from cash flow, inventory, to production
planning and marketing. These checkings become easily implemented within

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 the cross-functional teams, optimizing the decision making and cutting
operational cost.
 Flexibility: Adaptive processes and structures to changing conditions and
competition. Being closer to the customer the company can develop the
awareness mechanisms to rapidly spot the weak points and adapt to new
requirements of the market.
 Quality: Obsession with the superior service and value to the customers. The
level of quality is always the same controlled and monitored by the processes,
and does not depend mainly on the person, who servicing the customer.
 Innovation: Leadership through imaginative change providing to organization
competitive advantage.
 Productivity: Improve drastically effectiveness and efficiency.

1.5.5 Essential Requirements of Business Process Redesign

1. It requires the support of information technology. To gather and analyze

information efficiently and cost-effectively, Re-designed process need to be
verified for its practicality. Information technology makes it possible to put
process into visuals before it is implemented as wrongful implementation of
the process can be very costly in terms of time, money and reputation. 

2. Business process redesign requires decentralization, so that employs involved

in the process can take decisions, they are in better position to development
viable process as they aware of the risk and challenges faced in executing the
process in day to day operations. It permits fast implementation of processes
because information does not have travel upwards. 

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3. Horizontal communication (Communication between departments) is
necessary to employees involved in the process know the consequence of their
work on each other and whole business.

4. Multi-skilled workers more likely to understand and take the ownership of

whole process. They can understand the information needs of other workers.
Workers may have to be re-trained to carryout activities in different manner.

5.  Team working is necessary rather than separate department pursuing

their own objectives. This involves re-structuring of the business which is
operating in traditional tall and departmental business structures. Personnel
from each department which are expected to carry out the process are involved
in process redesign.

1.5.6 The BPR Process

Various organizations have provided different approaches to reengineering

processes. Thus, there is no distinct methodology for reengineering process. A
defined process for bringing about change can be useful. The model below, more
or less, depicts the process of reengineering business process.

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1. Preparing for Reengineering

Planning and preparation are vital for the successful implementation of a BPR
project. The following activities shall be carried out during the preparation phase:

Determine need for BPR: Justification for reengineering business processes

marks the initial step in preparing for BPR. Top-level management needs to agree
on the processes to be re-engineered and clearly define the project vision.

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Build a cross functional team: The next step is to build a committed cross-
functional team with a clear mandate to carry out the BPR exercise. This team
should be guided by the project vision, which is informed by the customer’s needs.

2. Mapping and Analyzing Current (“As Is”) Processes

Mapping: of the existing business processes facilitates understanding of the

process before the reengineering team proceeds to analyze them. Definition of “As
Is” processes involves drawing of process models and stating how long the process
takes as well as cost required by the process in terms of resources.

Analysis: of existing business processes is done to understand current processes

and to identify inefficiencies and bottlenecks. The analysis should include number
of procedures per process, length of process, service points, actors involved
(including physical location), the cost of the entire process, the cost of accessing
the service by the customer (fees charged), rules, regulations, practices, legislation
governing the process, impact of current processes and procedures on the firm’s
revenue. This step helps to identify the processes to be reengineered.

3. Designing “To Be” Processes

The objective of this phase is to propose one or more alternatives to the “As Is” or
existing business process, which satisfy the strategic business goals of the
organization. This step involves:

Benchmarking: This involves comparing the way an organization’s processes are

conducted as well as performance of those processes with those of peer

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organizations in order to obtain ideas for improvement. The peer organizations
need not be competitors or even from the same industry as innovative ideas may be
obtained from diverse sources. Combining benchmarking and reengineering
ensures that the best practices are in use and helps a firm seek out and eliminate
steps that waste resources.

Map “To Be” Business Processes: After potential improvements to the existing
processes are identified, envisaged (“To Be”) business process models are mapped.
Definition of the “To Be” business processes will also entail detailing the number
of procedures, the cost required by the process in terms of resources, length of the
process, service points, and also the actors involved.

Select “To Be” Business Processes: This shall only be done for those cases where
several “To Be” Business Processes have been proposed to resolve specific
challenges. Upon mapping of the “To Be” Business Process Model(s), the best
possible “To Be” business process is selected. At the end of this step, the team
should have a list of Reengineered Business Processes to be implemented.

4. Implementing Reengineered Processes

Reengineering efforts are likely to meet most resistance during this phase and
therefore implementation must be accompanied by effective leadership and
appropriate change management programmes to ensure smooth implementation of
Reengineered processes. It is prudent to initiate and run a change management
program concurrently with the reengineering effort from the beginning of the
exercise in order to adequately prepare the organization for change and to build a
culture where people accept change.

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5. Monitoring and Evaluation

Upon implementation of the Reengineered Business Processes, monitoring and

evaluation must be carried out to assess the progress and effectiveness of the
reengineered Business Processes in achieving the project vision. This should be
done on a continuous basis. Corrective action, where appropriate, should be taken
to ensure that reengineered processes are achieving the project vision and the
organization’s objectives.

1.5.7 BPR Vs Total Quality Management/TQM/

1.5.8 BPR Tools and Techniques

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There are different tools and techniques in business process redesign. The selection
of tools for BPR depends upon (i) the nature of decision areas, (ii) the nature of
data to be analyzed, and (iii) the background of users.

Decision support system

A decision support system (DSS) is a computer-based information system that

supports business or organizational decision-making activities. DSSs serve the
management, operations, and planning levels of an organization and help to make
decisions, which may be rapidly changing and not easily specified in advance.
Abbreviated DSS, the term refers to an interactive computerized system that
gathers and presents data from a wide range of sources, typically for business
purposes. DSS applications are systems and subsystems that help people make
decisions based on data that is culled from a wide range of sources.

DSSs include knowledge-based systems. A properly designed DSS is an interactive

software-based system intended to help decision makers compile useful
information from a combination of raw data, documents, and personal knowledge,
or business models to identify and solve problems and make decisions. DSS
models can be used to select suitable strategies and methods for reengineering
business process. This should be based on a set of performance measures and
metrics

For example: a national on-line book seller wants to begin selling its products
internationally but first needs to determine if that will be a wise business decision.
The vendor can use a DSS to gather information from its own resources (using a

10
tool such as OLAP) to determine if the company has the ability or potential ability
to expand its business and also from external resources, such as industry data, to
determine if there is indeed a demand to meet. The DSS will collect and analyze
the data and then present it in a way that can be interpreted by humans. Some
decision support systems come very close to acting as artificial intelligence agents.

DSS applications are not single information resources, such as a database or a

program that graphically represents sales figures, but the combination of integrated
resources working together.

There are fundamental components of DSSs.

Database management system (DBMS): A DBMS serves as a data bank for the
DSS. It stores large quantities of data that are relevant to the class of problems for
which the DSS has been designed and provides logical data structures (as opposed
to the physical data structures) with which the users interact. A DBMS separates
the users from the physical aspects of the database structure and processing. It
should also be capable of informing the user of the types of data that are available
and how to gain access to them.

Model-base management system (MBMS): The role of MBMS is analogous to

that of a DBMS. Its primary function is providing independence between specific
models that are used in a DSS from the applications that use them. The purpose of
an MBMS is to transform data from the DBMS into information that is useful in
decision making. Since many problems that the user of a DSS will cope with may

10
be unstructured, the MBMS should also be capable of assisting the user in model
building.

Analytical models such as Queuing and Simulation

Analytical models can be used for system design considering the objective of
eliminating non-value adding activities and focusing on value adding activities
with suitable changes in organizational structure, information systems and
technologies.

A queuing system consists of one or more servers that provide service of some sort
toarriving customers. Customers who arrive to find all servers busy generally join
one or more queues (lines) in front of the servers, hence the name queuing
systems. There are several everyday examples that can be described as queuing
systems, such as bank-teller service, computer systems, manufacturing systems,
maintenance systems, communications systems and so on.

Many authors argue that one of the major problems that contribute to the failure of
BPR projects is a lack of tools for evaluating the effects of designed solutions
before implementation (Paolucci et al, 1997), (Tumay, 1995). Mistakes brought
about by BPR can only be recognized once the redesigned processes are
implemented, when it is usually difficult and costly to correct wrong decisions.
Although the evaluation of alternative solutions might be difficult, it is essential in
order to reduce some of the risks associated with BPR projects. Simulation has
proven to be an effective tool in just about all facets of the reengineering process.
It allows BPR practitioners to determine which processes should be reengineered
and if proposed changes will have a productive impact.

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Simulation modeling appears to offer great potential for modeling and evaluating
alternative business processes. Simulation uses a symbolic representation of
processes in order to determine the path and flow of state transitions in ways that
can be made persistent, replayed, dynamically analyzed and reconfigured into
alternative scenarios (Scacchi, 1997).

For example, simulation models can dynamically model different samples of

parameter values such as arrival rates or service intervals which can help in the
discovery of process bottlenecks of and suitable alternatives. Simulation models
can provide a graphical display of process models that can be interactively edited
and animated to show process dynamics.

Activity-based analysis and work flow model including Flow Charts

A diagram that uses graphic symbols to depict the nature and flow of the steps in a
process. This can be used to analyze the business processes and identify the value
and non-value-adding activities in order to achieve a dramatic improvement in
business performance. They can also be used for the implementation of
reengineering business processes
 
Benefits of using Flowcharts

 Create visual maps of a process

 Help with planning a project

 Quality improvement tool

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 Identify processes that need improvement

 Identify unnecessary/ problem steps in a process

 Good communication tool

 Depict customer-supplier relationships

Benchmarking

Benchmarking is a systematic process of measuring your organization's

performance against toughest those companies recognized as the best in class. The
two major purposes of benchmarking are first to provide illumination of your
organization's practices and second, to get ideas on how to do them better.
Benchmarking is used in organizational analysis to determine the performance
gaps between an organization and the leaders in similar industries in the market
place.

Benchmarking compares both the performance of the organization's processes and

the way those processes compare with those of relevant peer organizations to
obtain ideas for improvement. The peer organizations may be within the same

10
corporate family, they may be comparable companies, industry leaders, or best-in-
class performers. The task consists of identifying relevant peers, determining their
process performance, and the primary differences in their processes that account
for the performance differences. Then assess the applicability of those process
differences to your processes.

UNIT 5
CONFLICTS AND CONFLICT MANAGEMENT

5.1 Meaning and Nature of Conflict

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Conflict can be defined (Thomas K.A.) as the “process that begins when one
party perceives that another party has negatively affected something that the
first party cares about.” Conflict must be perceived by either of the parties. Stiff
oppositiondue to incompatibility of organizational goals characterizes it. Conflict
can also be causeddue to difference about interpretation of facts or issues involved.
Conflict takes an uglyturn and takes a form of violence due to disagreement based
on behavioral expectations. It could be covert or overt and can be seen when one
observes violent acts of individual inorganizations.

Austin et al defines conflict “as a disagreement between two or more

individuals or groups, with each individual or group trying to gain acceptance
of its views or objective over others.”

Conflict can be considered as expression of hostility, negative attitude, aggression

and gross misunderstanding. It is caused due to varying interest of individual or
groups.

Every organization has its objective. It is further broken down as departmental

objectives, group goals and lastly individual goals. When individual interacts with
another individual, there is a perceptual and communication problem that causes
misunderstanding and leads to individual conflict situation. It is also true of
groups. Group conflicts indicate the way of inter-group behavior in an
organization.

Inter-group conflict occurs due to group competition and group cohesiveness. This
leads to a feeling of ‘we’ and ‘they’. “We are always right and they are always
wrong”; Hence, a beginning of conflict. Aims and objectives of various
organizations differ drastically that give rise to greater competition hence a high
level of conflict. Conflict can arise between employer and employees, management

10
and workers, one department and another, stakeholders, shareholders, producer and
customers and between various trade unions that are often politically motivated.

The overall problem, then, is how to establish high productive, collaborative

intergroup relations. Conflict can lead to breakdown in standard mechanism of
decision making so that an individual or group experiences difficulty in selecting
an alternative action. The breakdown may be because of competing demands on an
individual or group rivalry and competition. There can be vertical and horizontal
conflicts; or individual conflict, group conflict and organizational conflict.

5.2 Conflict Outcomes

5.2.1 Functional and Dysfunctional Conflict

Conflict that supports the individual and group goals, which leads to higher
performance is called functional conflict while the conflicts that hinders
individual or group performance is called dysfunctional conflict. The latter
generally takes destructive form. There is thin margin between the two types of
conflicts mentioned above. While evaluating the impact of conflict on goal
achievement, individual perception and effect of group performance should be
evaluated. If the conflict contributes towards higher performance then the conflict
should be called functional or otherwise dysfunctional.

Functional Outcomes
Conflict may stimulate innovation, creativity and growth.

Organizational decision making may be improved.

Alternative solutions to a problem may be found.

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 Conflict may lead to synergistic solutions to common problems.

Individual and group performance may be enhanced.

Individuals and groups may be forced to search for new approaches.

Individuals and groups may be required to articulate and clarify their

positions.

Dysfunctional Outcomes
 Conflict may cause job stress, burnout and dissatisfaction.

 Communication between individuals and groups may be reduced.

 A climate of distrust and suspicion can be developed.

 Relationships may be damaged.

 Job performance may be reduced.

 Resistance to change can increase.

 Organizational commitment and loyalty may be affected negatively.

5.3 Sources of Conflict

People will be in conflict because of the following reasons:

Scarcity of resources (finance, equipment, facilities etc.)

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 Different attitudes, values and perceptions

Disagreements on needs, goals, priorities and interests.

Poor communication

Poor organizational structure

Lack of team work

Role ambiguity, lack of clarity in roles and responsibilities

Status Inconsistencies and so on.

5.4 Types of Conflict

I. Intra-personal Conflict
Intra personal conflict is also called the conflict within the individual. This type of
conflict can be of two types:

(a) Value conflict: Every individual has to play certain roles, which conforms to
his value system. However, there are certain situations when an individual may
have to compromise on value system and beliefs.
For example, finance manager of an organization, while submitting tax returns
to the government may conceal some facts, which may go against his belief and
value system. This situation may cause tension and conflict within the
individual.

(b) Decision-making: Problem solving is one of the important jobs every

individual has to undertake in work environment. Every problem has various

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 courses open. At times, it is difficult for a person to select an appropriate course
of action. This situation causes conflict within the individual. He, therefore, will
have to take decisions based on the past experience and the knowledge. It may
be noted that decision-making has become simpler these days due to firstly;
information technology where required data is available and secondly, group
decision is the norm in most of the organizations.

According to Lewin (1948), there are three types of intrapersonal conflict:

1) Approach–Approach Conflict

This occurs when a person has to choose between two attractive alternatives.A
manager is confronted with an approach–approach conflict if he or she hasto
recommend one of two subordinates for promotion who are equally competentfor
the position. A job seeker who has two attractive job offers has to cope withthis
conflict.

2) Approach–Avoidance Conflict

This occurs when a person has to deal with a situation that possesses bothpositive
as well as negative aspects, that is, when a person feels similar degreesof attraction
and repulsion toward a goal or competing goals. A faculty membermay be in this
type of conflict if he or she wants to join a top school where theprospect of tenure
is uncertain.

3) Avoidance–Avoidance Conflict

This conflict occurs when each of the competing alternatives possesses negative
consequences, that is, they are equally repulsive. A manager will be inthis type of
conflict if he or she has to decide between accepting a salary cutor quitting his or
her job. The person is possibly distressed in his or her attemptto decide upon the
lesser of the two evils.

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II. Inter-personal Conflict

Inter-personal conflict relates to conflict between two or more individuals and is

probably the most common and recognized form of conflict. Interpersonal conflict
is caused due to disagreement over goals and objectives of the organization. These
are heightened due to difference of opinion of individuals and when issues are not
based on facts.

Every organization is full of unresolved issues, problems and differing situations

that lead to conflict. Conflict can also take place between one person of a group
with another person of the same group or another group on issues relating to
decision-making. Individuals may have a difference of opinion on the selection of
a particular course of action that will lead to disagreement and often result in the
conflict. It is the merit of the issue, and willingness of members of the organization
to accept the others point of view that will avoid the conflict situation.

III. Intra-Group Conflict

Intra-group conflict relates to values, status and roles played by an individual in the
group and the group norms. Individual may want to remain in the group for social
needs but may disagree with the methods and procedures followed by the group.
The conflict may arise when social changes are incorporated in the group.

When group faces new problems and when values are changed due to change in
social environment. Intra-group conflict is like Inter-personal conflict except that
the people involved in the conflict episode belong to a common group.

IV. Inter-Group Conflict

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Conflicts between different groups, sections and departments are called inter-group
conflict. For example, conflict between production and sales departments over the
quality being produced and the customer requirements. Inter-group conflict causes
due to factors inherent to the organizational structure like independence,
inconsistency in various policy matter, variance on promotion criteria, reward
system and different standards being adopted for different sub-units and
departments.

Organizational objectives can only be achieved when all departments work

towards attainment of organizational goals. This is possible when interactions
between departments are smooth and cordial. Conflict can be avoided by better
communication between departments, joint decision making, removing disparity in
group goals and paying due respect and displaying concern for other group’s
views.

V. Inter-Organizational Conflict

Inter-organizational conflict takes place between two dependent organizations.

Conflict can take place between government organization, unions and the operating
industry. Government organizations function to ensure that minimum standards are
followed by the organizations. Managers must try and reduce inter-organizational
conflicts by adopting positive approach and by following strictly, the rules and
regulations laid down by the government agencies. Conflict can also take place
between seller and buyer organizations.

VI. Intra-Organizational Conflicts

Intra organizational conflict encompasses horizontal, vertical and role based

conflicts. Let us briefly study these situations.

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  Horizontal Conflict:
Horizontal Conflict is caused due to incompatibility of goals, sharing limited
resources and difference in time orientation. It leads to tension, misunderstanding
and frustration on the part of both the parties. Horizontal conflict relates to
employees or group at the same level. Organizational goal at implementation level
vary from department to department. Finance department may not be able to spare
additional amount as may be required by research and development department for
new product development that may cause tension, misunderstanding between two
individuals or departments. Individuals may not be able to meet the targets of
production in given time due to variety of reason that may cause conflict with sales
department as the latter would like to flood the market with their product to make
the presence felt. It has been seen that due to increased interdependence of
individuals or groups to carry out various functions, situations do arise where there
is difference of opinion on issues that cause conflict between individuals or groups.

 Vertical Conflict
Vertical conflict refers to conflicts that might take place between different levels of
hierarchy. Conflicts between subordinates and superior occur due to
incompatibility. It is generally caused because of differences in perception, value
system, goals that may be assigned, cognition and difference in individual
behavior. Conflict is also caused due to inappropriate communication between
individuals at two different levels.

 Role Conflict
A person in an organization has to perform various roles. Conflict arises when
roles assigned to him have different expectation. ‘Time’ management may cause
conflict. A person may be asked to take care of an additional section in the absence
of section head. Value system in an organization is also a cause for conflict.

11
Supervisor is asked to be honest while he is dealing with sale of the product while
the same person may be asked to pay commission to an official from whom a
sanction is required to be obtained, thereby causing a conflict situation in the
ethical value system of an individual. When an individual is line or a staff
employee and also a union representative, has to perform duties of conflicting
nature hence a role conflict

5.5 Conflict Management

5.5.1 Conflict Analysis

Conflict analysis is a comprehensive look at all aspects of a particular conflict.

The purpose of doing a conflict analysis is for the mediator to get the "big
picture" and to understand the dynamics of the conflict. A mediator than uses the
information gathered in the conflict analysis to assist the parties in moving
toward settlement.
To do a conflict analysis, a mediator must gather much information from both
parties. This is usually done in the interview stage, before the parties come to the
table. By the time the parties reach the table, the mediator should have pretty
good idea of the different components to the conflict. Data collection is usually
done through the use of open-ended questions that are questions which do not
have a yes or no answer. By asking open-ended questions, a mediator allows the
party to relate everything he or she thinks is important, rather than simply
answering yes or no.
5.5.2 Conflict Stimulation

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Conflict improves group and organizational effectiveness. The stimulation of
conflict initiates the search for new means and goals and provides the stimulus for
innovation.

The successful solution of a conflict leads to greater effectiveness, to more trust

and openness, to greater attraction of members for each other, and to
depersonalization of future conflicts. In this write up we are discussing how the
stimulating conflict can provide benefits to the organization.

Conflict facilitates group cohesiveness. Whereas conflict increases hostility

between groups, external threats tend to cause a group to pull together as a unit.
Inter group conflicts raise the extent to which members identify with their own
group and increase feelings of solidarity.
Conflict brings about a slightly higher, more constructive level of tension. When
the level of tension is very low, the parties are not sufficiently motivated to do
something about a conflict.

Groups or organizations devoid of conflict are likely to suffer from apathy,

stagnation, groupthink, and other debilitating diseases. In fact, more organizations
probably fail because they have too little conflict, not because they have too much.
Take a look at a list of large organizations that have failed or suffered serious
financial setbacks over the past decade or two.

The common thread through these companies is that they are stagnated. Their
management became complacent and unable or unwilling to facilitate change.
These organizations could have benefited from functional conflict.

Conflict stimulation is also a measure to solve conflict. In traditional concept,

conflict was taken as dangerous factor. But in modern concept, conflict is not taken

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as dangerous all time. Nowadays, some institutes create conflict to find new way
and for innovation. If there is not created conflict in institute, manager should think
that there is some mistake. That’s why conflict is index of development. So that
while solving the conflict, it is necessary to create the conflict.

5.5.2.1 Conflict Stimulation Techniques

1. Use of Communication: Communication encourages and discourages the

conflict. So that, while creating conflict in required level unclear message
should be sent. Threatened and challenge to the workers also a measure to
create conflict.

2. Bringing in Outsider: Conflict also can be created by entering members

with different background, value, view and managerial skill. The discussion
with the person with different background helps to find new way. In this way,
orientation with different members from outsides provides creative way at
last.

3. Restructuring the Organization: By changing current design of

organization, functional conflict can be created. With the help of restructure,
the size of organization is changed. In this way with the help of restructure
different difficulties and problems are solved in current situation.

4. Appointing a Devil’s Advocate: Appointing a Devil’s Advocate, the

organization also can create the conflict. These types of person solve the
problems differently of the members of organization. He works as conflict

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 motivator. If he has good skill, knowledge and mind, can be good advocator
of organization.

5. Creating Competition: Creating competitions between players on team.

Who sells the most in retail? Usually everyone gains.   

5.5.3 Conflict Resolution Model

Conflict between parties can be resolved by five different modes. Parties involved
may adopt any
of the following
solutions.

 Avoidance
One or both parties could avoid facing the conflict. The situation pertains to un-
cooperative and unassertive behavior on the part of parties involved. A Party may

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avoid facing B Party. When situation reaches a point of negligence by A Party, B
Party may take advantage of the situation.

By avoiding, the individual might side step, postpone or even withdraw from the
conflicting situation. This strategy is useful when issues involved in conflict are of
a very minor nature or when more important issues deserve attention. This strategy
suits a manager whose power base is very low and there is no chance of satisfying
one’s own concerns. Avoidance strategy should be applied when one feels that
people in the organization should cool down so that the issue can be handled at a
later date in a better psychological environment.

 Competing
This strategy may be adopted when other strategies of conflict resolution are not
workable. Competing is also useful in emergencies where quick decisions are
required. In this strategy power must be used unilaterally as a weapon when
unpopular decisions like termination, pay cuts, layoffs, cost cutting and enforcing
discipline are required to be taken. This strategy is based on win-lose principle of
managing conflicts.

The managers who are high on power base have an added advantage in using
competing strategy because people from opposite side would not dare confront a
person who is so powerful. There is a tendency that managers using this strategy
should be careful about ‘yes’ men around them. They should identify conflicting
situations and take bold decisions based on win-lose strategy.

On the other hand there are managers who are low on competing mode, are likely
to feel powerless in many situations. Not realizing that though they have power but
they are not comfortable using it. By trying to use power, one could enhance one’s
achievement. Another drawback in scoring low is that such individuals find it

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difficult to take bold stand on various issues concerning organizations. In situations
when a manager is very low on ‘concern for the people’ may postpone vital
decisions on matters pertaining to subordinates that may be detrimental to
organizational effectiveness.

 Collaborating
Strategy of collaboration involves attempt of one party to work with the other party
in cooperative manner and find solutions to the problem for mutual benefits. The
strategy involves identification of areas of disagreement, examining the issue in
greater detail and a workable solution arrived at, which is for mutual benefit. This
strategy signifies when two sets of solutions are important for both parties to be
compromised.

Hence, finding integrated solution becomes imperative. This strategy signifies joint
efforts, gain for both parties and integrated solutions arrived at by consensual
decisions. Sekaran concluded that when people are high on collaborating, they
have to be concerned about how they spend their time and other organizational
resources. Collaboration is time and energy consuming. Not all situations need
collaborative solutions. Over use of collaboration and consensual decision-making
may reflect risk aversion tendencies or an inclination to defuse responsibility.

 Accommodating
In accommodating mode a person scarifies his own interest for accommodating
other person’s interest. It is form of selfless generosity, obeying other person’s

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point of view. This mode is usually adopted when other person’s view is stronger,
you want to achieve goodwill and indicate that you are reasonable. This strategy of
conflict resolution is important when you want other person to give at a later date
when it favors you. Sekaran concluded that when people are high on
accommodating score they might be differing too much to the wishes of others and
pay very little attention to their own ideas and concern even though they may
realize that they are not getting the attention they deserve. This might even lower
one’s self esteem in addition to depriving on the influence, respect and recognition
from others, since it negates the potential contribution that individuals are capable
of making to the organization.

 Compromising
It is a model when both parties try to find out some expedient, mutually acceptable
solution that sacrifices both the parties partially. In compromising, there is no clear
winner or loser. None of the party is fully satisfied as they ration the object of
conflict and accept the solution which is not complete to either of the parties.

There is also a possibility of compromising on certain principles of behavior which

is not desirable. Values, ethics, principles and long term objectives of the
organization must be protected while adopting compromising. When people are
tough to compromise, they find it hard to make concessions and land up in power
struggle that must be avoided. Compromising policies can easily be adopted when
competing or collaboration strategy fails.

5.6 Interpersonal Relationship Management

Performance of members of any organization depends on their ability to effectively
interact with their superiors, subordinates and co-workers within the organization

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and consumers, suppliers and general public outside. Interpersonal relation
therefore is a very important issue involving any organization.

Most organizations have people problems rather than business problems. People
problems are due to faulty interpersonal relations, which hinder the attainment of
organizational goal. Efforts are therefore made to enhance the interpersonal skills
of the people at work.

IPR is the association of individual working in one organization. It indicates the

degree to which members of an organization are associated each other.

IPR is important because of the following reasons:

An individual spends around eight to nine hours in his organization and it

is practically not possible for him to work all alone. Human beings are not
machines who can work at a stretch. We need people to talk to and share our
feelings. Imagine yourself working in an organization with no friends
around!!!!!!!!We are social animals and we need friends around. An individual
working in isolation is more prone to stress and anxiety. They hardly enjoy their
work and attend office just for the sake of it. Individuals working alone find
their job monotonous. It is essential to have trustworthy fellow workers around
with whom one can share all his secrets without the fear of them getting leaked.
We must have friends at the workplace who can give us honest feedback.

A single brain alone can’t take all decisions alone. We need people to discuss
various issues, evaluate pros and cons and reach to solutions benefiting not only
the employees but also the organization on the whole. Employees can
brainstorm together and reach to better ideas and strategies. Strategies must be
discussed on an open platform where every individual has the liberty to express

12
 his/her views. Employees must be called for meetings at least once in a week to
promote open communication. Interaction on a regular basis is important for
healthy relationship.
Interpersonal relationship has a direct effect on the organization culture.
Misunderstandings and confusions lead to negativity at the workplace. Conflicts
lead you nowhere and in turn spoil the work environment.

We need people around who can appreciate our hard work and motivate us from
time to time. It is essential to have some trustworthy coworkers at the
workplace who not only appreciate us when we do some good work but also tell
us our mistakes.
[
An individual needs to get along with fellow workers to complete
assignments within the stipulated time frame. An Individual working all
alone is overburdened and never finishes tasks within deadlines. Support of
fellow workers is important. You just can’t do everything on your own. Roles
and responsibilities must be delegated as per specialization, educational
qualification and interests of employees. An individual needs help of his fellow
workers to complete assignments on time and for better results.

some tips to improve interpersonal relationship at workplace:

 Do not treat office as your home. There is a certain way of behaving at

the workplace. It is essential to be professional at work. Never misbehave
with any of your colleagues.

 An individual should not interfere in his colleague’s work. Superiors

must formulate specific KRAs for all the employees and make sure job

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 responsibilities do not overlap. Overlapping of job responsibility leads to
employees interfering in each other’s tasks and eventually fighting over
small issues. One should be concerned only with his work rather than
trying to find out what the other employee is up to.
 Give space to your fellow workers. Giving space in fact is essential in
all relationships. Overhearing anyone else’s personal conversation is
strictly unprofessional. An employee must not open envelopes, couriers
or letters not meant for him. Such practices lead to severe displeasure
among employees and eventually spoil relationships.
 Do not spread baseless rumors at workplace. Even if you know
something about someone, learn to keep things to yourself. Organizations
are not private…
 Pass on correct information to others. If your superior has asked you to
share some information with any of your colleagues, make sure it is
shared in its desired form. Data tampering and playing with information
spoil relationships among colleagues and lead to confusions at the
workplace.
 Do not share all your secrets with your co workers. You never know
when they might misuse them. Even if you do, make sure you are doing it
with someone you trust blindly.
 Leave your ego behind. Do not bring your personal tensions to work.
Think before you speak. Making fun of colleagues is something which is
not at all expected out of a professional.
 A team leader should not scold any of his team members in front of
others. It might insult him/her. Call the individual concerned either to
your cabin or conference room. Avoid comparisons among team

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 members. The employees must be strictly judged according to their work
and nothing else.
 Stay away from nasty politics at workplace. Do not try to harm
anyone. It is absolutely okay to appreciate someone who has done
something exceptionally well. Avoid being jealous. It will harm you in
the long run. There should be healthy competition among the employees
for a healthy environment at the workplace.

5.6.1 Factors affecting interpersonal relationships

A. Personality Factors: 
When trying to understand your feelings and behavior, it helps to be aware that
how you think and feel about yourself and others may be very unlike how they
think and feel about themselves and you. These different evaluation and reactions
depend on each individual's self-concepts, value system; frame of reference,
defensiveness, interpersonal relationship needs and feelings.

 Self-Concept: Self-concept is a reflection of all the past experiences one has

with others and includes characteristics which differentiates from others.
Once self-concept is established and certain specific patterns of behaviour
are adopted, it tends to resist change. In order to maintain interpersonal
environment and to maximize congruence of harmony, certain mechanisms
are used.  
 Personal Frame of Reference: Self Concept and perception of other people
and things develop into a personal frame of reference for perceiving and
interpreting experiences.

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 Two people with different frames of reference may do very different things
in the same situation to try and satisfy the same need. Different needs, past
experience and cultural backgrounds are a frequent source of different
frames of reference.
 Defensiveness: Defense is a cognitive distortion that projects the self-
concept against being diminished. It occurs when one protects him or her by
denying, excusing or rationalizing one's action to protect self-concept
against the threat of being damaged by failure, guilt shame or fear.
 Feelings: How .one expresses ones feelings is a frequent source of difficulty
in interpersonal relationships. Rather than express them constructively,
people often deny or ignore their own and others' feelings in an attempt to
avoid rejection or struggle for control. It is the negative reaction that can
cause the most problems especially if they are directed at a person one is
interacting with far a long time like ones boss or a coworker. Maintaining a
productive relationship requires that first you look at yourself to understand
what it is about you that is carrying the negative feelings.
B. Interaction Setting

Often, what appears to be personality changes may just be two peoples' varying
responses to difference and incompatible job requirements. This frequently
happens when people work in different parts of the organization, under different
organizational cultures, for different bosses and in different jobs that make
different demands.

 Job Requirements: Job requirements determine how psychologically close

or distant two people need to be to perform their work. The depth of
interpersonal relationships required by a job depends on how complex the
task is, whether the people involved possess different kinds of expertise, the

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 frequency of interaction in the job, and the degree of certainty with which
job outcomes can be predicted. But Work situations that are simple and
familiar to both workers, don't require strong feelings, demand little
interaction, and have a high certainty of outcomes call for minimal task
relationships.

 Organizational Culture: The organization's culture influences the general

nature of employee relationships. People take cues from the culture they
work in and usually respond to what they perceive as general expectations.
Some cultures discourage intimacy and only allow distant, impersonal
relationships.

 Trust Level: Relationships do not grow and develop until individuals trust
each other. Trust is learned from past interactions with another. Trust is
developed as the parties self-disclose personal information and learn that
they will not be hurt by making themselves vulnerable to each other.

LEADINGis about
making your
subordinates to
LOVEtheir work,
family, community and
country!

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