Chapter 1

UNDERSTANDING LEADERSHIP PRINCIPLES

Learning Outcomes

At the end of this chapter, the students should be able to:

1) define leadership;
2) explore the nature of leadership;
3) discuss the theories on leadership;
4) identify the basic types/styles of leadership;
5) describe desired characteristics of effective leadership;
6) Identify attributes of remarkable leaders;
7) distinguish leadership versus management;
8) demonstrate the role of motivation in leadership;
9) identify personalities with distinctive leadership qualities; and
10) present remarkable leadership quotes

Lesson Proper

Lesson 1 – Defining leadership

Leadership principles are the set of actions or guiding beliefs that leaders
can implement to move them toward success. How well an organization,
company or business performs is directly related to how effectively the leader
motivates and guides their employees.

Like love, leadership is universally desired but difficult to define explicitly.

The way we define leadership, the words and phrases we use and their implied
meanings, unveils how we view leadership and what we value in a leader. Kouzes
and Posner (2017) say that leaders are attentive to the language and words they
use because these words are metaphors for concepts that define attitudes and
behaviors, among other things. When we are able to understand how we define
leadership for ourselves, it empowers us to put it into action.

The word “lead”, according to the Webster dictionary, means “to guide on
a way.” Moreover, “leader” is defined as “a person who leads and has
commanding authority or influence”. Furthermore, “leadership” is described as
“a position as a leader of a group, organization, or an institution. The authority
or ability to lead other people”.

Based on the above definitions, leadership is a method whereby an

individual influences a team to achieve a common goal. Therefore, leadership is
not only influence but also does not exist without influence. The leadership

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factors that create impact are within the letters that form the word leadership,
as follows:

L: Listen – leaders listen to communicate effectively. Great leaders are great

listeners; therefore, they speak less and listen more.

E: Enthusiasm - Great Leaders show great excitement for achievements.

A: Aspiring - Leaders having high ambitions and goal thriving to achieve with an
enormous desire

D: Decisive - To make tough decisions and be accountable.

E: Empower with encouragement - Give a greater responsibility to people and

give them the support they need

R: Responsible - Ability to take responsibility for actions

S: Supportive - helps to build and maintain effective interpersonal relationships.

A manager who is thoughtful, caring and friendly toward employees is more likely
to win their friendship and loyalty.

H: Humble - A humble, honest leader, tries to elevate everyone with his humility
and makes other to feel important and valued

I: Inspire with integrity - Motivate others with honesty and truthfulness.

P: Plan - Great leaders are excellent at strategic planning. They have the capacity
to plan ahead, and create a contingency plan.

Based on the above factors, it can be said that leadership is a position to Listen
with Enthusiasm, having an Aspiring mind to be able to make a Decisive action,
Empower and Encourage others in a Responsible, Supportive and Humble
manner to Inspire them to achieve set goals as Planned.

According to John C. Maxwell, there are different stages of leadership or

the 5-Ps of leadership. Therefore, one cannot become an effective leader unless
they go through these phases in order it is given:

1. Position/Entry level – starting point of leadership. Laying the ground.

2. Permission/Influence Level – building human relationships. Making

people follow because they want to.

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 3. Production/Result Level – achieving positive results. People follow because
of what the leader has done for the organization.

4. People Development/Reproduction Level – development and stimulating of

employees. People follow because of what the leader has done for them.

5. Pinnacle/Respect Level – people follow because of who the leader is and

what he or she represents.

However, even prominent leadership scholars do not agree on how

leadership is defined (Huber, 2002; Rost, 1991). Definitions of leadership have
evolved over time and leadership is complex, resulting in an array of
perspectives, frameworks, and concepts. Since there is no single definition of
leadership, how we define it becomes personal and reflects who we are, what we
value, and the message we want to send to others as we express our views about
leadership (Northouse, 2016).

At the end of the twentieth century, attempts were made to look at various
models of leadership to integrate and into a broader framework called “full range
theory of leadership” (Avolio, 1999 & Avolio.et.al., 2009).

Hereunder are some of the many definitions given by prominent leadership

scholars:

Leadership is the capacity to translate vision into reality. (Warren G. Bennis, 2003)

Leadership is the lifting of a man’s vision to higher sights, the raising of a man’s
performance to a higher standard, the building of a man’s personality beyond its
normal limitations (Drucker, P. F, 1974).

Leadership is a process of giving meaningful direction to collective effort, and

causing willing effort to be expended to achieve purpose (Jacobs & Jacques, 1990)

Leadership is the ability to step outside the culture to start evolutionary change
processes that are more adaptive (E.H. Schein, 1992)

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

environment within which things can be accomplished (Richards & Engle, 1986)

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)

Leadership is the ability of developing and communicating a vision to a group of

people that will make that vision true (Kenneth Valenzuela, 2007)

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Leadership is defined as a process of influencing others to accomplish the mission,
inspiring their commitment, and improving the organization. (Tom Peters, 1993)

Leadership is a communication process of influencing and directing people to

commit to and achieve a shared goal voluntarily, in a given situation (Aykut,
Apinya, Billy, Crystal, Gilbert, and Ritina 2008).

Leadership is the process of influencing the activities of an organized group toward

goal achievement (Rauch & Behling, 1984)

Leadership is a process of giving meaningful direction to collective effort, and

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

Lesson 2 – Nature of leadership

Leadership derives from the power and is similar to, yet distinct from,
management. In fact, “leadership” and “management” are different. There can be
leaders of completely unorganized groups, but there can be managers only of
organized groups. Thus it can be said that a manager is necessarily a leader but
a leader may not be a manager.

1. Leadership is essential for managing. The ability to lead effectively is one

of the keys to being an effective manager because she/he has to combine
resources and lead a group to achieve objectives.

2. Leadership and motivation are closely interconnected. By understanding

motivation, one can appreciate better what people want and why they act
as they do. A leader can encourage or dampen workers’ motivation by
creating a favorable or unfavorable working environment in the
organization.

3. The essence of leadership is followership. In other words, it is the

willingness of people to follow a person that makes that person a leader.
Moreover, people tend to follow those whom they see as providing a
means of achieving their desires, needs and wants.

4. Leadership involves an unequal distribution of power between leaders and

group members. Group members are not powerless; they can shape group
activities in some ways. Still, the leader will usually have more power
than the group members.

5. Leaders can influence the followers’ behavior in some ways. Leaders can
influence workers either to do ill or well for the company. The leader must
be able to empower and motivate the followers to the cause.

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 6. The leader must co-exist with the subordinates or followers and must have
a clear idea about their demands and ambitions. This creates loyalty and
trust in subordinates for their leader.

7. Leadership is to be concerned about values. Followers learn ethics and

values from their leaders. Leaders are the real teachers of ethics, and they
can reinforce ideas. Leaders need to make positive statements of ethics if
they are not hypocritical.

8. Leading is a very demanding job both physically and psychologically. The

leader must have the strength, power, and ability to meet the bodily
requirements; zeal, energy, and patience to meet the mental requirements
for leading.

Lesson 3 – Theories on Leadership

Understanding leadership have produced leader’s theories involving traits,

situational interaction, function, behavior, power, vision, values, charisma, and
intelligence among others. Various theories on leadership are as follows:

1. Great-Man Theory

Thomas Carlyle claimed in his “great man theory” that only those men who
are endowed with heroic potentials could ever become the leaders. He opined
that great men were born, not made. This theory of leadership simply stated that
leaders are destined by nature to be in their role at a particular time to a
reflection of certain traits that envisage a potential for leadership. This theory
often portrays great leaders as heroic, mythic and destined to rise to leadership
when needed.

2. Trait theory

Trait theory tries to describe the types of behavior and personality

tendencies associated with effective leadership. Similar in some ways to Great-
Man theory, trait theories assume that people inherit certain qualities and traits
that make them better suited to leadership. Trait theories often identify a
particular personality or behavioral characteristics shared by leaders. For
example, traits like extroversion, self-confidence, and courage are all traits that
could potentially be linked to great leaders.

3. Behavioral Theory

The behavioral theory of leadership is based upon the belief that great
leaders are made, not born. This leadership theory focuses on the actions of

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leaders, not on mental qualities or internal states. According to this theory,
people can learn to become leaders through teaching and observation.

David McClelland, in his research, claimed that successful leaders will

tend to have a high need for power, a low need for affiliation, and a high level of
what he called activity inhibition (one might call it self-control).

4. The Managerial Grid Model Theory

Managerial Grid Model is based on two behavioral dimensions. First,

concern for people. This is the degree to which a leader considers the needs of
team members, their interests, and areas of personal development when deciding
how best to accomplish a task. Second, concern for production. This is the degree
to which a leader emphasizes concrete objectives, organizational efficiency, and
high productivity when deciding how best to accomplish a task.

The managerial grid, which is also known as the leadership grid, can help
managers understand their management strengths and shortcomings, an
understanding that allows managers and their supervisors and human resource
partners to identify needed training and support to drive improvement.

5. Contingency and Situational Theories

The contingency theory of leadership focuses on particular variables

related to the environment that might determine which particular style of
leadership is best suited for the situation. According to this theory, no leadership
style is best in all situations.

The situational theory proposes that leaders choose the best course of
action based upon situational variables. Different styles of leadership may be
more appropriate for certain types of decision-making. This theory assumes that
different situations call for different characteristics; no single optimal
psychographic profile of a leader exists.

6. Management/Transactional Theory

The management theory, also known as transactional theory, focuses on

the role of supervision, organization and group performance. This theory based
leadership on a system of rewards and punishments. When employees are
successful, they are rewarded; when they fail, they are reprimanded or punished.

The transactional leader is given power to perform certain tasks and

reward or punish for the team’s performance. It gives the opportunity to the
leader to lead the group and the group agrees to follow his lead to accomplish a
predetermined goal in exchange for something else. Power is given to the

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manager to evaluate, correct and train subordinates when productivity is not up
to the desired level and reward effectiveness when expected outcome is reached.

7. Transformational/Relational Theory

The transformational theory, also known as relationship theory, focuses

upon the connections formed between leaders and followers. Transformational
leaders motivate and inspire people by helping group members see the
importance and higher good of the task.

Transformational leaders are focused on the performance of group

members, but also want each person to fulfill his or her potential. Leaders with
this style often have high ethical and moral standards. Transformational leaders
focus on the big picture, needing to be surrounded by people who take care of
the details. The leader is always looking for ideas that move the organization to
reach the organization’s vision.

8. Functional Theory

Functional leadership theory is a particularly useful theory for addressing

specific leader’s behaviors expected to contribute to organizational or unit
effectiveness.

This theory argues that the leader’s main job is to see that whatever is
necessary to group needs is taken care of; thus, a leader can be said to have
done their job well when they have contributed to group effectiveness and
cohesion. While functional leadership theory has most often been applied to team
leadership it has also been effectively applied to broader organizational
leadership as well.

9. Participative Theories

Participative leadership theories suggest that the ideal leadership style is

one that takes the input of others into account. These leaders encourage
participation and contributions from group members and help group members
feel more relevant and committed to the decision-making process. In
participative theories, however, the leader retains the right to allow the input of
others.

Lesson 4 – Leadership Types and Styles

For a leader to be effective among his followers is to consciously explore

one’s personal mastery of different leadership approaches and to adapt these
based on the given situation. Task and relationship behavior is central to the
idea of the leadership style of individual leaders and their effectiveness depends
on how they use their styles to the situation (Bruno, l2013).
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 According to Ojokuku, et.al, (2012), leadership style is a key determinant
towards the success or failure of the organization and is the behavioral approach
of the leader to provide motivation and direction to his people.

In organizations, leadership styles can affect the employees positively

(reward) and negatively (punishment) and also has its own consequences on the
employee behavior with respect to attitude, motivation, which in turn impacts
the organizational performance.

1. Democratic/Participative Leadership

Democratic leadership is exactly what it sounds like. The leader makes

decisions based on the input of each team member. Although the leader makes
the final call, each member or employee has given an opportunity to share their
thoughts. Democratic leadership is one of the most effective leadership styles
because it allows lower-level employees to exercise authority.

Participative leadership theory suggests that the ideal leadership style is

one that takes the input of others into account. The leaders encourage
participation and contributions from group members and help group members
feel more relevant and committed to the decision-making process.

2. Autocratic Leadership

Autocratic leadership is the inverse of democratic leadership. In this

leadership style, the leader makes decisions without taking input from anyone
who reports to them. Employees are neither considered nor consulted prior to a
direction, and are expected to adhere to the decision at a time and pace
stipulated by the leader.

Autocratic leaders are Strong-willed, domineering and to some extent

aggressive. Usually, they do not listen to views and suggestions of others if they
offer different opinions. The followers of autocratic leaders have a low level of job
satisfaction because they assert absolute power and influence (Kerfoot, 2013 &
Afshinpour 2014).

3. Laissez-Faire, Delegative or Free Reign Leadership

The laissez-faire leadership is the least intrusive form of leadership. The

French term "laissez faire" literally translates to "let them do," and leaders who
embrace it afford nearly all authority to their employees.

Although laissez-faire leadership can empower employees by trusting them

to work, however, it can limit their development and overlook critical company
growth opportunities. Therefore, it is important that this leadership style is kept
in check.
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 Laissez-faire leaders practice the art of delegation, in which they are
hands-off and allow group members to take a decision. There is not much
interference between leaders and followers, they usually avoid responsibility, do
not have feedback mechanism and delay the decision making (Bass & Riggio,
2006 &Samad.et.al, 2015).

4. Strategic Leadership

Strategic leadership is visionary. The Strategic leader needs to influence

others to enhance their performance towards the success of long-term
organizational goals by managing change, handling ambiguity and providing
right direction to the group by aligning workgroups to implement change. This
is a desirable leadership style in many companies because strategic thinking
supports multiple types of employees at once.

5. Transformational Leadership

Transformational leadership is always transforming and improving upon

the organization’s conventions. This is a highly encouraged form of leadership
among growth-minded companies because it motivates employees to see what
they are capable of.

According to Yukl (2011) transformational leadership seeks to raise the

consciousness of the followers by appealing to the ideals and moral values rather
than to materialistic desire’s or negative emotions. This leadership style helps
followers to accomplish their commitment and renew them. The leader motivates,
inspires and transforms followers to perform while transcending self-interest for
the betterment of the organization (Avolio et al., 2009).

Transformational leaders inspire their followers to go and achieve goals

beyond their personal interest for the benefit of the group or organization. He
also identified this style as a process where people engage with others in such a
way that they raise their level of motivation and morality. They promote
intellectual development, confidence in the team; build team-spirit and
enthusiasm by motivating and encouraging the followers towards achieving
organizational goals (Samad.et.al, 2015).

6. Transactional Leadership

Transactional leaders are fairly common today. These managers reward

their employees for precisely the work they do. A marketing team that receives a
scheduled bonus for helping generate a certain number of leads by the end of
the quarter is a common example of transactional leadership.

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 When starting a job with a transactional boss, you might receive an
incentive plan that motivates you to quickly master your regular job
duties. Transactional leadership helps establish roles and responsibilities for
each employee, but it can also encourage bare-minimum work if employees know
how much their effort is worth all the time. This style is based on the exchange
of rewards contingent on performance (Avolio et al., 2009).

7. Coach-Style Leadership

Similarly to a sports team's coach, this leadership style focuses on

identifying and nurturing the individual strengths of each member on his or her
team. It also focuses on strategies that will enable their team work better
together. This style offers strong similarities to strategic and democratic
leadership, but puts more emphasis on the growth and success of individual
employees.

Rather than forcing all employees to focus on similar skills and goals, this
leader might build a team where each employee has an expertise or skillset in
something different. In the long run, the coach leader focuses on creating strong
teams that can communicate well and embrace each other's unique skillsets in
order to get work done.

8. Bureaucratic Leadership

Bureaucratic leaders go by the books. This style of leadership might listen

and consider the input of employees, it tends to reject an employee's input if it
conflicts with company policy or past practices.

Employees under this leadership style might not feel as controlled as they
would under autocratic leadership, but there is still a lack of freedom in how
much people are able to do in their roles. This can quickly shut down innovation,
and is definitely not encouraged for companies who are chasing ambitious goals
and quick growth.

9. Situational Leadership

Situational leadership is flexible. It adapts to the existing work

environment and the needs of the organization. Situational Leadership is not
based on a specific skill of the leader; instead, he or she modifies the style of
management to suit the requirements of the organization.

One of the keys to Situational Leadership is adaptability. Leaders must be

able to move from one leadership style to another to meet the changing needs of
an organization and its employees. These leaders must have the insight to
understand when to change their management style and what leadership
strategy fits each new paradigm.
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 Peretomode (2012) argues that effectiveness of successful leaders depend
on their ability to change their leadership style according to the situation and
their effectiveness depends on identifying the level of follower’s maturity and
adaptation to their leadership style. Leaders can use this style for learning and
development, as it develops independence and competence among employees to
communicate openly to fulfill organizational goals and employee satisfaction.
(Farmer, 2012)

Graeff (1997) concludes in his critical review of evolution of Situational

leadership theory that the multiple version of situational leadership may be more
beneficial to practitioners and if these versions are combined and fine-tuned into
a single theoretical approach it will less confusing to researchers.

Daniel Goleman, the author of emotional intelligence, defines six styles

within situational leadership:

1) Coaching leaders – who work on an individual’s personal development as

well as job-related skills. This style works best with people who know their
limitations and are open to change

2) Pacesetting leaders – who set very high expectations for their followers.
This style works best with self-starters who are highly motivated. The
leader leads by example. This style is used sparingly since it can lead to
follower burnout.

3) Democratic leaders – who give followers a vote in almost all decisions.

When used in optimal conditions, it can build flexibility and responsibility
within the group. This style is, however, time consuming and is not the
best style if deadlines are looming.

4) Affiliative leaders – who put employees first. This style is used when morale
is very low. The leader uses praise and helpfulness to build up the team’s
confidence. This style may risk poor performance when team building is
happening.

5) Authoritative leaders – who are very good at analyzing problems and

identifying challenges. This style is good in an organization that is drifting
aimlessly. This leader will allow his or her followers to help figure out how
to solve a problem.

6) Coercive leaders – who tell their subordinates what to do. They have a very
clear vision of the endgame and how to reach it. This style is good in
disasters or if an organization requires a total overhaul.

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 10. Servant Leadership

While servant leadership is a timeless concept, the phrase “servant

leadership” was coined by Robert K. Greenleaf. The king (leader) shall consider
as good, not what pleases himself but what pleases his subjects (followers). The
king (leader) is a paid servant and enjoys the resources of the state together with
the people. Servant leadership can be found in many religious texts. It is based
on concepts taken from religious faith (Samad.et.al, 2015).

A servant leader focuses on the needs of others, especially team members,

before they consider him as part of themselves. By leading the team members to
higher engagement, more trust and stronger relationships is built.

11. Spiritual Leadership

Spiritual leadership is a blending of natural and spiritual qualities utilized

for influencing God’s people to accomplish God’s purposes. Spiritual leadership
doesn’t focus on leader-centric approaches but more on “engaging all group
members to meet spiritual needs to enhance organizational commitment and
performance” (Fry. et, al., 2011). Besides the spiritual aspect, engaging followers
to achieving the desired goals is the key feature, which is common with both the
transformational and servant leadership theory (Samad.et.al, 2015).

12. Authentic & Ethical Leadership

Authentic leadership is another emerging and ethical leader behavior

which focuses on positive values. The theories talk about consistent values and
behavior of leaders. They include honesty, altruism, compassion, optimism and
resilience (Yukl 2011).

Ethical leaders seek to build mutual trust, respect and social justice
among the followers and find solutions to conflicts among the stakeholders. They
do not play favorites nor do they foster distrust. Values and integrity is the key
for ethical leaders (Yukl 2011).

13. Positive Leadership

Arakawa and Greenberg (2007) see positive leaders as those who influence
their team members positively and enhance their engagement and well-being. To
have an impact on the individual and the organization, leaders must create a
positive workplace and involve every employee in the organization to collectively
perform the positive practices and not leading only those individuals with a
vision (Roy Saunderson, 2013). Jay R. Tombaugh (2005) argue that two
important traits that leaders can and should develop are optimism (positivity)
and emotional intelligence. So they are able to bring out the creative power of
positivity from the employees.
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 Furthermore, Visser and Courtice (2011) identified the characteristics and
descriptions of global leaders, as follows:

1) Systemic thinker – The ability to appreciate the interconnectedness and

interdependency of the whole system, at all levels, and to recognize how
changes to parts of the system affect the whole.

2) Open-minded – Actively seeking new knowledge and diverse opinions,

questioning received wisdom, including being willing to have one’s own
opinions challenged.

3) Inclusive – Collaborative and participative, reconciling different world

views and belief systems, both within communities and across geographic,
cultural and political divides.

4) Navigates complexity – Analyzing, synthesizing and translating complex

issues, responding to risk, uncertainty and dilemmas, recognizing and
seizing opportunities and resolving problems or conflicts.

5) Thinks long term – Envisioning and using strategic, long thinking and
planning, seeing the whole, while not discounting the future.

6) Globally conscious – Understands economic, social and ecological system

pressures and the connections between these systems and political and
economic forces.

7) Interdisciplinary – Sees the relevance and interconnectedness of the

political governance, physical sciences, social sciences, technology,
business and other disciplines.

Lesson 5 – Characteristics of Effective Leadership

Irrespective of how you define the word leadership, you cannot deny that
certain individuals can greatly impact the lives of others based on their
experiences and insights.

While we are all living different timelines on the journey of life, we look to
leaders for guidance and advice. While some leaders seem like they were
naturally born that way, leadership skills can be learned. It does not matter if
you have not led before. There are certain characteristics, traits, and skills that
ultimately build the most effective leaders.

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 Here are the most important leadership qualities and skills to look for in a
great leader:

1. Integrity – Integrity is the cornerstone of all other leadership qualities. C.S.

Lewis said: “Integrity is doing the right thing, even when no one is
watching.” Without integrity, no real success is possible. You cannot
expect your followers to be honest when you lack integrity yourself. An
honest leader succeeds when they stick to their word, live by their core
values, led by example, and follow-through.

2. Communication – Communication is one most important qualities of being

a great leader. Good communication skills are absolutely crucial in
leadership role. The ability to express our ideas and to be understood by
others makes both interpersonal and public communication meaningful
and productive.

One famous quotes from Dale Carnegie from How to Win Friend and
Influence People is, “talk to someone about themselves and they’ll listen
for hours.” The more you make real eye contact and show sincere interest
in the lives of others, the more people will be magnetically drawn to you
and passionately speak about their lives. They will become inspired, feel
heard, and begin to know, like, and trust you.

3. Accountability – An effective leader needs to follow the advice of Arnold

Glasow when he said, “A good leader takes little more than his share of
the blame and little less than his share of the credit.” They give credit
where credit is due, and take responsibility for blame when necessary.
Being accountable and leading by example is one of the quickest ways a
leader can build trust with their team.

4. Empathy – A true leader has enough open-mindedness to understand their

followers’ motivations, hopes, dreams, and problems so that they can forge
a deep personal connection with them.

Empathy is understanding. Empathy isn’t just being a nice person. It is a

mindset that enables leaders to: make better predictions; improve work
strategies; inspire loyalty among their teams; better their negotiation
tactics; and increase creativity.

5. Humility – When it comes to leadership, it can be tempting to become

enamored with a new title or status. However, great leadership styles focus
on problem-solving and team dynamics much more than self-promotion.

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 A great leader will never be effective if they are more concerned with
themselves than with the well-being of their team. As Thomas Merton said,
“Pride makes us artificial and humility makes us real.” Being humble and
vulnerable with their team members will make a leader much more
relatable and effective.

6. Resilience – The true grit of a leader is not how they perform during good
times, but how they roll up their sleeves and produce when times get
difficult. Resilience is a leadership trait that comes with experience

Great leaders with positive attitudes lead by example and rally their team
no matter the circumstances. It is this inherent positivity that helps react
to situations with a calm, collected manner and focus on solutions rather
than on problems.

7. Influence – Some leaders believe that when they attain a certain level of
leadership status, respect will automatically be given to them. This is not
the case. Leadership and influence are not interchangeable and respect
has to be earned, not given.

Here are some things that leaders can do to increase their influence:
Clearly state what they want; connect with people emotionally; make
others feel important; be vulnerable and charismatic; work toward
commonly shared goals; ask for suggestions and input; build real, lasting
relationships; act professionally and have self-awareness.

8. Positivity – Leaders inspire their team not based on their own goals or
outcomes, but on their exhibited behavior, life outlook, and attitude in any
given situation.

It is often said that employees and direct reports exhibit the behavior of
their managers and good leaders need to lead by example at all times while
mirroring how they want their team to act. This comes down to positivity.

9. Delegation – A difficult transition for many leaders is shifting from doing to

leading. Many new leaders are accustomed to doing all the work
themselves and struggle to let others handle responsibilities on their own.
Great leaders must elevate their team; they must be more essential and
less involved.

Delegation requires leaders to shape others’ thoughts and ideas toward a

common goal. They give their team everything they need to be successful
and get out of the way, not directing their path, but setting clear
expectations and explaining where the finish line is.

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 10. Confidence – True leaders are the ones that do not just talk about
problems but come up with their own solutions fearlessly. The more that
you believe in yourself, the more you will be able to manage any stressful
situation.

To be an effective leader, you need to roll up your sleeves and take charge.
This includes being confident enough to lead, knowing that your plans
and vision are not only viable for the team but the absolute best decision
possible.

11. Vision – Jack Welch said, “Good business leaders create a vision,
articulate the vision, passionately own the vision, and relentlessly drive
it to completion.” Additionally, John C. Maxwell stated, “people buy into
the leader before they buy into the vision.”

A great leader clearly sets the organizational direction and exercises keen
decisiveness. Decision-making is key to new ideas, ensuring team
members know the bottom line, and understand the goals and the
mission in front of them.

A strong visionary leader presents and convinces followers that a new

course of action is needed for the survival and prosperity of the group in
the future. And once a goal is set, the leader assumes the role of ensuring
successful accomplishment of the goal.

Robin Sharma, in his book “Leadership Wisdom” presented important

skills needed for a leader in the corporate world. He called them “8 Rituals of a
Visionary Leader”:

1. The ritual of a compelling future focus – Link Paycheck to Purpose.

The ultimate task of the visionary leader is to dignify and honor the lives
of the people he leads by allowing them to manifest their highest potential
through the work they do.

2. The ritual of human relations – Manage by Mind, Lead by Heart.

Every visionary leader has mastered the principle of deeply connecting to

his followers. He has refined the art of clarifying his vision for the benefit
of his people in a way that fully engages and stirs them into action.
Through their people skills and talents as effective communicators,
visionary leaders touch the hearts of their team and earn long-term loyalty.
Simply put, when you enrich the relationship, you enhance the leadership.

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3. The ritual of team unity – Reward Routinely, Recognize Relentlessly.

Visionary leaders understand that employees who feel they are valued
members of an exciting team will go the extra mile and give their best. If
you practice ritual 2 by rewarding routinely and recognizing relentlessly,
they will invest their spirits in organization. They will begin to see
themselves as part of a larger whole. That is when company will become
unstoppable.

4. The ritual of adaptability and change management – Surrender to change.

Doing the same things every day cannot deliver new results. To change the
results you are getting, you need to change the things that you are doing.
You must transform the way you are leading.

5. The ritual of personal effectiveness – Focus on the worthy.

Never forget the importance of each and every one of your days. As you live
your days, so you live your life. Do not waster even one of them. The past
is history and the future is but a figment. This day, the present, is really
all you have.

6. The ritual of self-leadership – Leader Lead Thyself.

Do not be so busy striving that you miss out on living.

7. The ritual of creativity and innovation – See What All See, Think What
None Think.

Nourish your imagination and flex your mind. Let your natural creativity
out of the box. Dare to dream bigger and envision a higher future. Though
you might see what every other leader in the business world sees, start to
think what no one else thinks. Never forget that deep within the body of
every visionary leader lives the spirit of little child, full of excitement and
wonder.

8. The ritual of contribution and significance – Link Leadership to Legacy.

Your legacy will ultimately be a manifestation of the deepest and the best
that you had to give in life. It will be a reflection of the person you now are
and the person you aim to be. Leaving a legacy is not about impressing
your friends or reaching the top. It’s not about looking good but about
doing good. It’s about fulfilling your duty and actualizing your humanity.

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Lesson 6 – Attributes of Remarkable Leaders

Having the characteristics of a leader and being in the position are two
different things. People with strong leadership attributes use a specific set of
skills. It looks like charisma, but it is not. The good news is that leadership skills
can be learned, practiced, and mastered. Here are some remarkable
characteristics of great leaders:

1. Courageous – Courage does not mean that you never feel afraid. It means
acting in the face of fear. There is a reason courage is at the top of this list.
It is the foundation of many other leadership attributes. For example, you
cannot be a good communicator if you avoid conflict like the plague.
Leaders face fears every day:

• Fear of conflict – Telling people things they do not want to hear.

• Fear of vulnerability – Taking ownership of mistakes.

• Fear of failure – Making a decision when you cannot be sure of the

outcome.

2. Ethical – Ethical leadership is more than avoiding corporate crime or

avoiding getting caught. It’s also treating people fairly, and creating an
environment that encourages team members to do the right thing. As a
leader, it is your job to establish organizational values and model them.
For example, a code of ethics establishes the priority of values like
inclusivity and respect.

Sometimes doing the right thing for one person means offending another.
Competing values create ethical dilemmas; you have to make the call. The
best approach is to genuinely care about everyone’s best interest. When
you cannot give everyone what they want, you can make sure everyone
feels respected and understood.

3. Resilient – Leading when your seas are smooth is easy. A true test of
leadership comes in times of crisis. Resilience is a leadership quality that
enables you to bounce back when things fall apart. If your response to a
crisis is, well, falling apart, your employees will too. It is important to stand
strong during troubled times. Showing professionalism and confidence
helps your team stand strong with you.

4. Humble – Arrogant leaders make excuses, blame others, or even lie to save
face. This behavior not only erodes trust, but it kills creativity.

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 Humbly admitting when you are wrong shows strength in leadership. In
fact, it is what makes a great leader. Owning your mistakes models for
employees how to act when they screw up. The power of believing that you
can improve is what, for a leader, transforms a failure into a powerful force
of change.

5. Coachable – Great leaders have to know how to coach and how to be

coached. Coachability is self-awareness combined with the desire to
improve. A solid team works best with a leader who is open to changing
their attitude and behavior. If a leader isn’t coachable and lets their ego
dominate the conversation, team members won’t be inspired to give their
best.

There are a few specific ways you can work on being more coachable:

• Self-evaluate – Take stock of your strengths and weaknesses as a

leader.

• Seek feedback – Ask your team how you are doing and what you can
do better.

• Take action – Work to improve weak areas, and try new approaches.

6. Patient – Waiting too long to act can cause your business to stagnate.
Waiting for the right moment is something else entirely. This is the kind of
patience you need. Patience comes from your ability to endure short term
challenges for greater long term gains.

Leadership requires that you calmly evaluate problems, and locate the
source of dysfunction. Of course, even the most level-headed leaders feel
angry and impatient sometimes. But they take the time to calm down
before they act. Losing patience leads to poor thinking and rash decisions.

7. Problem-solver – Being able to solve problems quickly and creatively will

set you apart as a great leader. Each time something unexpected happens,
it is a valuable opportunity to learn how to better respond in the future.
However, if solving puzzles is not your strength, here are a few things to
work on:

• Analyze – Avoid using emotional reactions to guide your decisions.

Look at problems from as many angles as possible.

• Collaborate – Involve your team by communicating issues and

asking for input.

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 • Balance risk – Every solution will have risks and benefits. Look for
the best payoff with an acceptable level of risk.

8. Motivated – As a leader, you need to be internally motivated to achieve your

personal goals as well as the goals laid out for your organization. Having
strong internal motivation will push you to work hard and move forward.
This attitude will inspire your team as well. They will be more likely to
work harder along with you.

Motivation is not something you wake up with every day, and some days
you might not feel motivated at all. Fortunately, self-motivation can be
turned into a habit instead of a mood. If you are not feeling motivated, get
up, show up, and do the work anyway. Soon you can imagine.

9. Honest – Even when things are not going too well, it is necessary to be
honest with your team. Transparency is an important aspect of building
trust in those you want to lead. Be clear about your expectations so your
team members know what to aim for.

It is difficult to be honest and direct when giving critical feedback.

However, remarkable leaders are brutally honest with themselves. It is the
only way to grow and improve.

10. Determined – Challenges are not going to stop appearing, no matter how
successful you become. Employees can give up and look for another job
when things get difficult. Leaders can’t.

As a leader, you keep working through the tough spots. You steel your
resolve and inspire your team to keep going when they get discouraged.
Another word for this is grit — the combination of perseverance and
passion behind every great achievement.

11. Creative – Creative thinking leads to innovative ideas that can change the
world. It is also required to solve problems and improve operations.

In the daily grind of running a business, there are constant distractions

and demands on your attention. Stress and deadlines, although
sometimes unavoidable, destroy creative thinking. That is why it is
essential for leaders to take time out for deep work.

12. Decisive – Being confident in your decisions is a critical leadership

attribute, and a key habit of successful people in leadership positions.
Without it, you cannot expect buy-in from your team. Despite
uncertainty, leaders make decisions and move forward confidently. So,
even when you are questioning yourself, act with confidence.

20
13. Build trust – It is been proven that teams are most effective when there is
trust. When people feel threatened, they are afraid to make mistakes,
share opinions, and act on innovative ideas. Leaders who create a sense
of safety and belonging, using techniques like conversational intelligence,
are neutral when they approach criticism and conflict.

Instead of using blame and humiliation, collaborate and problem-solve.

Great leaders work with their team to find solutions when something goes
wrong.

14. Great communicator –This is a huge topic because there are many
channels and contexts for communication, and different people have
different communication styles. That means there are many
opportunities to get it wrong, or get it right. But, what makes a good
leader? Excellent communication skills.

To simplify this complex topic, focus on these principles of effective

communication:

• Consistency – Be clear and consistent in communicating

expectations and providing guidance.

• Listening – Give your team the attention they deserve by actively

listening.

• Safety – When you must initiate a difficult conversation, use non-

judgemental language. Do not attack just state your observations,
needs, and requests.

15. Positive outlook – One of the qualities of a good leader is pragmatism, but
that can easily turn into pessimism. Instead, focus on cultivating
positivity, to bring out the best in your team. When you shoot down ideas
without actively looking for potential, you destroy creativity.

Keeping a positive outlook does not mean that you have to be happy and
smiling all the time. Instead, a great leader acts from the core belief that
the business benefits people and will lead to success for the team. To
become a more positive leader, always look for possibilities.

16. Purposeful – Remarkable leadership is a by-product of learning how to

find your purpose in life. A leader acts with a purpose, a dream that the
world can be a better place. They seek to solve problems and help people
improve their lives.

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 A purposeful leader is not interested in business for the sake of business.
They see profit as simply a side effect of creating profound beneficial
change in the lives of others. Those on the team of a purposeful leader
work each day with a dream of a better world in their hearts. Here is
where the inner vision of an exceptional leader takes center stage.

17. Growth mindset – Maintaining a growth mindset is one of the

fundamental traits of a good leader. Instead of being stuck with an
existing set of skills, great leaders believe growth is always possible. With
this mindset, they have an intense desire to learn. They embrace effort
and pursue mastery. Modeling a growth mindset also encourages your
team to work through challenges, learn, and grow.

18. Agile – In sports, someone who is agile can move quickly, with precision
and flexibility. In leadership, it is exactly the same. Great leaders have
their fingers to the pulse of their market and can direct their team to
change course as needed. This could mean moving timelines because of
a changing market. The environment of business is constantly changing.
Being able to make these pivots in business can make or break a
company.

19. Emotional intelligence – The ruthless, domineering leader is becoming a

thing of the past. Leading with empathy gets much better results. To do
this, emotional intelligence is essential.

EQ is hard to define, but generally, it means awareness of emotions in

yourself and others. How good you are at regulating and managing
emotions is a measure of EQ. If you have good leadership skills, you read
emotional cues and respond appropriately.

That said, EQ can only take you so far. You can understand emotions but
still lack compassion. True leaders show how much they care. That is
how they win the love and devotion of their followers.

20. Confident – Great leaders exude confidence. They are self-assured and
have a charisma that is born from trusting themselves. The confidence of
a great leader radiates from them as calmness, sureness, and a sense
that success is inevitable. Confidence makes a leader easier to trust and
helps to strengthen the bonds of the team.

A confident mindset comes easier to some than others, but it is an

essential trait of a good leader. Confidence comes as you live according
to your values. It helps you to practice courage and honesty.

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 21. Accountable – A great leader is willing to accept responsibility for their
words and actions. Not every decision will be a smashing success. When
you make a bad call, whether large or small, you have to be willing to
admit your errors.

One of the characteristics of a good leader is also taking responsibility for

the actions of the team. It is not always your fault, but it is always the
leader’s responsibility to find a solution.

Lesson 7 – Leadership Style Assessment: Ways of Leading

Leaders can carry a mix of the leadership styles depending on their

industry and the obstacles they face. Bill Torbert and David Rooke called this as
the “leadership action logics”

These action logics assess how leaders interpret their surroundings and
react when their power or safety is challenged. This is the idea behind their
popular management survey tool called the Leadership Development Profile,
which yields the following ways of leading:

1. Individualist – Individualists are self-aware, creative, and primarily

focused on his own actions and development as opposed to overall
organizational performance. This action logic is exceptionally driven by the
desire to exceed personal goals and constantly improve their skills.

2. Strategist – Strategists are acutely aware of the environments in which

they operate. They have a deep understanding of the structures and
processes that make their businesses tick, but they are also able to
consider these frameworks critically and evaluate what could be improved.

The Strategist is also adept at creating shared visions across different

action logics; visions that encourage both personal and organizational
transformations. As a result, Strategists are highly effective change
agents.

3. Alchemist – Alchemist leaders are described as charismatic and are most

highly evolved and effective at managing organizational change. What
distinguishes alchemists from other action logics is their unique ability to
see the big picture in everything, but also fully understand the need to
take details seriously. Under an alchemist leader, no department or
employee is overlooked.

4. Opportunist – An opportunist leaders reflect on his tendency to focus on

personal wins and see the world and other people as opportunities to be
exploited. Their approach to the outside world is largely determined by

23
 their perception of control.in other words, how they will react to an event
depends primarily on whether or not they think they can direct the
outcome.

5. Diplomat –Diplomat leaders seek to cause minimal impact on their

organization by conforming to existing norms and completing their daily
tasks with as little friction as possible. The Diplomat makes sense of the
world around him in a more benign way. Diplomats provide social glue to
their colleagues and ensure that attention is paid to the needs of others.

6. Expert – Experts are a pro in their given field, constantly striving to perfect
their knowledge of a subject and perform to meet their own high
expectations. They are talented individual contributor and a source of
knowledge for the team. Experts are great individual contributors because
of their pursuit of continuous improvement, efficiency, and perfection.

7. Achiever – Achievers, as leaders create a positive work environment and

focus their efforts on deliverables. Achievers have a more complex and
integrated understanding of the world. They are open to feedback and
realize that many of the ambiguities and conflicts of everyday life are due
to differences in interpretation and ways of relating. They know that
creatively transforming or resolving clashes requires sensitivity to
relationships and the ability to influence others in positive ways.

Lesson 8 – Leadership and Management Perspectives

Abraham Zaleznik (1977), clearly delineated the differences between

leadership and management. He saw leaders as inspiring visionaries, concerned
about substance; while he viewed managers as planners who have concerns with
process.

Hersey and Blanchard claim that management merely consists of

leadership applied to business situations; or in other words: management forms
a sub-set of the broader process of leadership. They put it this way: “Leadership
occurs any time one attempts to influence the behavior of an individual or group,
regardless of the reason. Management is a kind of leadership in which the
achievement of organizational goals is paramount." Hence, one clear distinction
could provide the following definition: Management involves power by position;
whereas Leadership involves power by influence.

Paul Birch (1999) also sees a distinction between leadership and

management. He observed that, as a broad generalization, managers concerned
themselves with tasks while leaders concerned themselves with people. Birch
does not suggest that leaders do not focus on "the task." Indeed, the things that
characterize a great leader include the fact that they achieve. Effective leaders
create and sustain competitive advantage through the attainment of cost
24
leadership, revenue leadership, time leadership, and market value leadership.
Managers typically follow and realize a leader's vision. The difference lies in the
leader realizing that the achievement of the task comes about through the
goodwill and support of others (influence), while the manager may not.

Bruce Lynn postulates a differentiation between 'Leadership' and

‘Management’ based on perspectives to risk. Specifically,” A Leader optimizes
upside opportunity; a Manager minimizes downside risk." He argues that
successful executives need to apply both disciplines in a balance appropriate to
the enterprise and its context. Leadership without Management yields steps
forward, but as many if not more steps backwards. Management without
Leadership avoids any step backwards, but doesn’t move forward.

Warren Bennis (1989) further explicated a dichotomy between managers

and leaders. He drew twelve distinctions between the two groups:

1) Managers administer, leaders innovate

2) Managers ask how and when, leaders ask what and why
3) Managers focus on systems, leaders focus on people
4) Managers do things right, leaders do the right things
5) Managers maintain, leaders develop
6) Managers rely on control, leaders inspire trust
7) Managers have a short-term perspective, leaders have a longer-term
perspective
8) Managers accept the status-quo, leaders challenge the status-quo
9) Managers have an eye on the bottom line, leaders have an eye on the
horizon
10) Managers imitate, leaders originate
11) Managers emulate the classic good soldier, leaders are their own person
12) Managers copy, leaders show originality

According to Ogbonnia (2007), effective leadership is the ability to

successfully integrate and maximize available resources within the internal and
external environment for the attainment of organizational or societal goals.
Ogbonnia defines an effective leader as an individual with the capacity to
consistently succeed in a given condition and be recognized as meeting the
expectations of an organization or society. He identified a leader’s role, task,
responsibility, and source of power as:

1) The role of a leader is to inspire and create followers who are also self-
leaders;
2) The task of a leader is to bring about constructive and necessary
change;
3) The responsibility of a corporate leader is to bring about the change in
a way that is responsive to the true and long-term needs of all
stakeholders; and
25
 4) The greatest source of power available to a leader is the trust that
derives from faithfully serving followers.

Lesson 9 – Motivation in Leadership

Motivation is the basic psychological process. Many people equate the

causes of behavior with motivation. Motivation is the hypothetical construct that
is used to help explain behavior. Hence it should never be equated with the
behavior.

Technically motivation can be traced to the Latin word “MOVERE” which

means ‘to move’. Thus, a motive is an inner state that energizes, actuates,
activates or moves (hence motivation), that directs or channels the behavior
towards the goals.

Along with perception, personality and learning, motivation is a very

important process in understanding a behavior. The key to understanding the
motivation seems to lie in the meaning and relationship between needs, drives
and goals. Basic motivation process sets-up drives to accomplish goals.

Lesson 10 – Motivation Theories

1. Maslow Hierarchy of Needs

Maslow’s Hierarchy of needs must be one of the best known motivation

theories in the world. Maslow is a good starting point to start examining the
different motivation theories. Maslow starts with the idea that people always tend
to want something and what they want depends on what they already have.

Maslow proposed that there are five different levels of needs people have
to seek for satisfaction of their basic needs. (Mullins 2007, 258):

1) Physiological needs. The first or lowest level of needs. Before these needs
include food, water, shelter and clothing. When people do not feel hunger,
thirst or cold, their needs are go to a second level.

2) Security needs. The second lowest level. In that level a person needs to feel
secure in his/her family and in a society, and feel protected against
violence. The need for safety is manifested with job security, savings and
for insurances of health, mental health, old age and disability.

3) Love and belonging needs. The third level. After feeling secured, people
need to feel that they receive and give love, they are appreciated and they
have good friendships.

26
 4) Esteem needs. The fourth level. It is the need to be unique with self-respect
and to enjoy esteem from other individuals. People want to evaluate
themselves highly and based on their achievement receive appreciation
from other people. Lack of these needs may cause inferiority, helplessness
and weakness.

5) Self-actualization. The highest level. The development of this need is

based on the satisfaction at the other four lower levels. It refers to the need
of self-fulfillment and to the tendency to become actualized in what a
person has potential.

Figure: Maslow’s Hierarchy of Needs

The core of this theory lies in the fact that when one need is fulfilled, its
strength diminishes and the strength of the next level increases. (Latham 2007,
31) Maslow does note that one level of needs doesn’t have to be totally fulfilled
before a person moves to the next level. The individual can be partly satisfied
with one level and still seek for satisfaction at the next level. (Salanova &
Kirmanen, 2010)

2. Herzberg Motivation/Hygiene Theory

Herzberg’s motivation/hygiene theory is also known as the two-factor

theory. Based on his study, Herzberg created his theory of motivators and
hygiene factors. Both factors can motivate workers but they work for different
reasons. Hygiene factors tend to cause only short-term satisfaction to the
workers while motivators most probably cause longer-term job satisfaction.

27
 Motivators, or satisfiers, are those factors that cause feelings of
satisfaction at work. These factors motivate by changing the nature of the work.
They challenge a person to develop their talents and fulfill their potential.

Hygiene factors, or dissatisfiers, are those that the employee expects to be

in good condition. As motivators are those that at present cause satisfaction,
hygiene factors are those that do not cause satisfaction but if they are lacking,
it causes job dissatisfaction.

Figure: Herzberg’s Two Factor Theory

3. Expectancy Theory

The concept of expectancy was originally formulated by Vroom and it

stands for the probability that action or effort will lead to an outcome. The
concept of expectancy was defined in more detail by Vroom as follows: “Where
an individual chooses between alternatives which involve uncertain outcomes, it
seems clear that his behavior is affected not only by his preferences among these
outcomes but also by the degree to which he believes these outcomes to be
possible (Vroom, 1964).

Armstrong (2006), suggests that there are two factors determining the
effort people put in their jobs. The first is the value of the rewards to individuals,
and the extent to which these rewards satisfy their needs for security, social
esteem, autonomy, and self-actualization. The second is the probability that the
rewards depend on the effort, as perceived by individuals, their expectations
about relationship between effort and reward. Thus, the greater the value of a
set of the awards and the higher the probability that receiving each of these
rewards depends upon effort, the greater the effort will be in a given situation.

Figure: Expectancy Model

28
4. McClelland’s Theory

McClelland proposed that an individual’s particular needs are obtained

over time as a result of life experiences (Wood et al, 2004). Most of these needs
fall into three general categories of needs which can be class as need for
achievement, power, and affiliation.

The strengths of the McClelland’s acquired needs theory is that it provides

a clear picture for the organization and the managers to know which type of job
are suitable for the employees and which types of people that can make the
organizations more successful. Moreover, the strength of McClelland’s acquired
need theory is that it provides an understanding for the managers to deal with
different types of employees.

Hence, people with high level of achievement are suitable to become

salesperson as they prefer challenging task, whereas people with high need for
affiliation are suitable to hold a position of customer service
representative as they are good in maintaining interpersonal relationship and
people with high need of power are suitable to hold formal supervisory position
as they have influence over other people in the organization (Wood et al, 2004).

Therefore, human resource manager are able to benefit from this theory
as during the interview with the employee, the manager can ask question on
whether the employee like challenging task or whether the employees like to
interact with the other people, and from the answer the manager can determine
which type of job is suitable for the employee.

29
Figure: McClelland Theory

Post Learning Assessment:

1) In a short sentence, what is leadership to you?

________________________________________________________________________

2) Based on your understanding, list down at least three most important

leadership values. Justify each.
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________

3) Distinguish a manager and a leader.

________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________

4) Identify one most prominent international leader and describe his/her

characteristics and accomplishments.
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
_______________________________________________________________________

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 Chapter 2
DECISION-MAKING PROCESS

Learning Outcomes

At the end of this chapter, the students should be able to:

1) discuss the concept of decision-making;

2) identify the various models of decision-making;
3) present the basic principles of a sound decision;
4) illustrate the processes/steps of decision-making; and
5) evaluate the common challenges as well as impact of decision-making.

Lesson Proper

Lesson 1 – What is decision-making?

Decision Making is the essence of addressing a particular situation.

Decisions are made to solve problems, tackling the situations, handling crises
and resolving conflicts that are inevitable. Decision Making is at the core of
planning. The Concept of decision making involves defining the problem, finding,
comparing and choosing a course of action. It is a process or activity of choosing
an appropriate course of action from several alternative courses.

The term “decision making” has been defined as a process of judging

various available options and narrowing down choices to a situation one.
Decision making is a conscious and human process involving both individual
and social phenomena based on factual and value premises which concludes
with a choice of one behavioral activity from among one or more alternatives with
the intention of moving towards a desired state of affairs.”

According to Kreitner (1966) decision making is a process of identifying

and choosing an alternative course of action in a manner appropriate to the
demand of the situation. The act of choosing implies that an alternative course
of action must be weighed and weeded out.

Decision making is becoming the basis of competitive advantage and value

creation for individuals and organizations. Improving decision making, whether
collective or individual, could be the key to a superb performance. The quality of
decision making could become the key differentiator and link in the value chain
for achieving goals.

Lesson 2 – Various Models of Decision-making

Various views and theories of decision-making may be found in the

literature. The following list of views, supporting theories and models is based
31
upon categorizations provided by Keen and Scott Morton (1978), Huber (1981),
and Das and Teng (1999).

1. The Rational Model

The rational manager view assumes a rational and completely informed

decision-maker, “economic man”, as described by neoclassical microeconomic
theory around the middle of the previous century. The process of rational
decision-making comprises a number of steps, such as those given by Simon
(1977):

1) Intelligence: finding occasions for making a decision;

2) Design: inventing, developing and analyzing possible courses of action;
3) Choice: selecting a particular course of action from those available; and
4) Review: assessing past choices.

In classical or perfect rationality, methods of decision analysis are used to

attach numerical values or utilities to each of the alternatives during the “choice”
phase. The alternative with the highest utility (or maximum subjective expected
utility) is selected. When using the rational model in this fashion, it is assumed
that managers:

1) know of all possible alternatives;

2) know the consequences of implementing each alternative;
3) have a well-organized set of preferences for these consequences; and
4) have the computational ability to compare consequences and to determine
which is preferred.

2. The Model of Bounded Rationality

The “satisficing,” process-oriented view is based primarily on Simon’s

(1979) work on bounded rationality, admitting that the rational manager does
not always have complete information, and that optimal choices are not always
required. According to Simon (as quoted by Chase et al. (1998)), “human rational
behavior is shaped by a scissors whose two blades are the structure of task
environments and the computational capabilities of the actor.” These scissors
cut the problem space into a much smaller area that is feasible to search.
Bounded rationality is characterized by the activities of searching and satisficing.
Alternatives are searched for and evaluated sequentially. If an alternative
satisfies certain implicitly or explicitly stated minimum criteria, it is said to
“satisfice” and the search is terminated. The process of searching might be made
easier by the identification of regularities in the task environment.

Although Simon has been highly acclaimed for the theory of bounded
rationality, it still describes (albeit constrained) rational behavior. For this
reason, a number of researchers, such as Huber (1981) and Das and Teng
32
(1999), do not distinguish between perfect and bounded rationality in their
classification of decision-making models.

3. The Incrementalist View

The logical incrementalist view involves a step-by-step process of

incremental actions and keeps the strategy open to adjustment. Under
Lindblom’s (1959) disjointed incrementalism (“muddling through”) marginal,
feasible changes are made, working from the status quo to solve existing
problems rather than towards goals. Other researchers describe a process of
“muddling with a purpose”.

4. The Organizational Procedures view

The organizational procedures view seeks to understand decisions as the

output of standard operating procedures invoked by organizational subunits.
March (1988) contributed to this theory. Huber names this view the “program
model,” indicating that the decisions are pre-programmed in existing procedures
as well as the routinized thinking of the people involved. Das and Teng (1999)
refer to it as the “avoidance mode” which views decision-making as a systematic
process aimed at maintaining the status quo at the cost of innovation. On the
other hand, Krabuanrat and Phelps (1998) regard this view in a positive light,
namely as the use of codified organizational experience.

5. The Political View

The political view sees decision-making as a personalized bargaining

process, driven by the agendas of participants rather than rational processes.
People differ on the organization’s goals, values and the relevance of information.
The decision-making process never ends, but remains a continuous battle
between different coalitions. After one group wins a round of the battle, other
parties might regroup or become even more determined to win the next round.
Influence and power is wielded in a deliberate manner and to further self-
interest. The goals of the coalitions are defined by self-interest rather than by
what is good for the organization as a whole. Pfeffer (1981) is one of the major
contributors on politics and power in decision-making.

6. The Garbage Can Model

The garbage can view describes decision-making in an “organized anarchy”

and is based on the work of Cohen, March and Olsen (1972). Like the political
view, it assumes a pluralist environment with multiple actors, goals and views.
The garbage can model emphasizes the fragmentedness and chaotic nature of
decision-making in organizations, rather than the deliberate manipulations

33
implied by the political view. In the garbage can model, “a decision is an outcome
or interpretation of several relatively independent streams in an organization”.

The streams of problems (looking for solutions and opportunities to be

aired), of solutions (looking for issues to which they might provide an answer),
and of participants (whose attention is divided and who come and go) meet each
other at a choice opportunity, symbolized as a garbage can. When a decision is
made, the garbage can is removed. This might happen without having solved all
or some of the associated problems in the garbage can. Since participants are
the ones generating the garbage, or problems and solutions, the decision made
is totally dependent on the make-up of the team of participants in the can.

7. The Individual Differences Perspective

The individual differences perspective focuses the attention on the

problem-solving behavior of the individual manager, as influenced by the
manager’s decision-making style, background and personality. It tries to explain
how managers might use different methods or come to different conclusions
because of differing personalities, for example apart from Keen and Scott Morton
(1978), the individual differences perspective has not received much attention.
This is probably because of the overall emphasis elsewhere on organizational (or
group) rather than individual decision-making.

8. Naturalistic Decision-making

Naturalistic decision-making is concerned with investigating and

understanding decision making in its natural context. The empirical foundation
of naturalistic decision-making differentiates it from other descriptive models,
such as the organizational procedures, garbage can or political views. A recent
contribution to the field of naturalistic decision making is that of Klein’s (1998)
Recognition-Primed Decision (RPD) model. Klein observed and/or analyzed over
600 decisions made by people in life-or-death situations, such as firemen, nurses
and soldiers.

Central to the RPD model is the decision-maker’s ability to recognize a

situation as being similar to that of a previous experience. Part of what is
recognized are the appropriate goals associated with such a situation, as well as
important cues and what to expect. Decision-makers also recognize a course of
action that is likely to succeed. The course of action is evaluated by means of a
mental simulation, where the decision-maker visualizes how the action is
implemented.

9. The Multiple Perspectives Approach

Mitroff and Linstone (1993) propose the multiple perspectives approach to

decision-making as an attempt to “sweep in” all possible perspectives on a
34
problem. It is based on Singer and Churchman’s (1971) concept of unbounOded
systems thinking, which assumes that any problem is a member of any other
problem.

The multiple perspectives view classifies perspectives as either being

technical, organizational or individual in nature. Analytical models that collect
data as a basis of understanding the system, would all fall under the technical
perspective. Different analysts or modelling projects will come up with different
technical views, even if these projects claim to present an objective or rational
picture of the situation. Thus, it is encouraged that more than one technical view
of a system is obtained. In order to cover the organizational and individual
perspectives, as many as possible of the role players and stakeholders should be
investigated. Data collection is also to follow the “sweeping in” approach, and
especially the organizational and technical perspectives data need to be gained
in multiple modes and from as many sources as possible.

Apart from the technical, organizational and individual views, Mitroff and
Linstone (1993) advise that ethical and aesthetical perspectives should also be
kept in mind. Even if a decision makes sense from a technical perspective, or if
a particular group of organizations endorses it, the decision might not be ethical.

Lesson 3 – Basic Principles of Sound Decision making

Jim Suhr had designed and built a decision-making system called

Choosing-By-Advantages (CBA). The CBA System is also called sound decision-
making, reality-based decision-making, congruent decision-making, effective
decision-making, and so forth. It is also called integrity-based decision making
and successful decision-making.

Based on this decision-making system, there are basic principles to

consider to come up with a sound decision, such as:

1) decisions must be based on differences;

2) decisions must be based on advantages;
3) decisions must be based on the relevant facts; and
4) decision makers must learn how to use sound method;

Lesson 4 – Steps to Effective Decision-making Process

In our regular day to day activities whether in personal lives or in our

professional lives, we very often face situations filled with choices or alternatives.
Choices may involve options for solution to a problem in hand, choosing a path
at cross road (such as go or no-go decisions) etc. And we need to decide the
seemingly best option or alternative to move forward. Decision making is one of
the most important basic management skills for all of us. It is a cognitive ability.
It can differ from person to person.
35
 Making decision which are timely and which are based on careful analysis
of various information is critical to our success. Decision making is a habit as
well as a process. Decisions should neither be taken in haste nor be
procrastinated indefinitely. Decision making can be hard sometimes

While the individual cognitive ability for decision making will depend on
each individual, however, we can follow a well-structured process for decision
making as suggested below:

1. Identify the problem

Identifying the problem is also called framing the issue. Knowing what is
actually the problem or issue at hand will make you aware of the situation that
needs a decision.

2. Gather information

This step involves asking what you need to know in order to come with the
right solution or decision. Hence, facts and data which are relevant to the issue
or problem are critical in developing or identifying alternative solutions. This
involves the provision of insightful information to help the decision-maker’s
competitive position.

3. Identify alternatives

Once you have a clear understanding of the issue, it is time to identify the
various solutions at your disposal. It is likely that you have many different
options when it comes to making your decision, so it is important to come up
with a range of options or alternatives. This helps you determine which course
of action is the best way to achieve your objective or address the problem.

4. Weigh the evidence

In this step, you will need to evaluate for feasibility, acceptability and
desirability to know which alternative is best. According to management experts
Phil Higson and Anthony Sturgess. Managers need to be able to weigh pros and
cons, then select the option that has the highest chances of success. It may be
helpful to seek out a trusted second opinion to gain a new perspective on the
issue at hand.

5. Choose among alternatives

When it is time to make your decision, be sure that you understand the
risks involved with your chosen route. You may also choose a combination of
alternatives now that you fully grasp all relevant information and potential risks.

36
Alternatives should be selected on the basis of evidence and analysis rather than
personal opinion.

In addition, the decision maker(s) should have the authority to take the
decision. Role clarity and understanding is important here so that decisions are
reached efficiently and not delayed or swayed by other interested parties.

6. Take action

Next, you will need to create a plan for implementation. This involves
identifying what resources are required and gaining support from employees and
stakeholders. Getting others on board with your decision is a key component of
executing your plan effectively, so be prepared to address any questions or
concerns that may arise.

Managing implementation requires that the decision should be clearly

communicated and the expected outcomes or impact should be readily
anticipated. Quantifying or describing potential outcomes and, if appropriate,
the potential next steps after each outcome, will enable implementation to be
managed and appropriate action taken promptly. This will ensure that goals are
achieved.

7. Evaluation

An often-overlooked but important step in the decision making process is

evaluating your decision for effectiveness. Ask yourself what you did well and
what can be improved next time.

Trial and error may be allowed as tactical experiments within acceptable

risk parameters, but repeating past mistakes should be inexcusable. The
decision and matters considered should be properly documented for post audit
or learning purposes. The outcome of past decisions should be captured as part
of the decision-maker’s memory to ensure that lessons are learned.

Lesson 5 – Common Challenges of Decision Making

Although following the steps outlined above will help you make more
effective decisions, there are some pitfalls to look out for. Here are common
challenges you may face, along with best practices to help you avoid them.

1. Having too much or not enough information

Gathering relevant information is key when approaching the decision

making process, but it’s important to identify how much background information
is truly required. “An overload of information can leave you confused and

37
misguided, and prevents you from following your intuition,” according to
Corporate Wellness Magazine.

In addition, relying on one single source of information can lead to bias

and misinformation, which can have disastrous effects down the line.

2. Misidentifying the problem

In many cases, the issues surrounding your decision will be obvious. However,
there will be times when the decision is complex and you are not sure where the
main issue lies. Conduct thorough research and speak with internal experts who
experience the problem firsthand in order to mitigate this. It will save you time
and resources in the long run, Corporate Wellness Magazine says.

3. Over-confidence in the outcome

Even if you follow the steps of the decision making process, there is still a
chance that the outcome would not be exactly what you had in mind. That is
why it is so important to identify a valid option that is plausible and achievable.
Being over confident in an unlikely outcome can lead to adverse results.

Decision making is a vital skill in the workplace, particularly for

managers and those in leadership positions. Following a logical procedure
like the one outlined here, along with being aware of common challenges,
can help ensure both thoughtful decision making and positive results.

Post Learning Assessment:

1) State the importance of decision making.

________________________________________________________________________
________________________________________________________________________

2) Discuss the decision-making process.

________________________________________________________________________
________________________________________________________________________
________________________________________________________________________

3) Identify common challenges in decision making and how they impact

decision making process.
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________

38
 Chapter 3
MANAGEMENT AND ADMINISTRATIVE PRINCIPLES

Learning Outcomes

At the end of this chapter, the students should be able to:

1) illustrate the basic distinctions between management from

administration;
2) discuss the fundamental theories on management;
3) explore management resources;
4) discuss the various levels of management and their functions; and
5) explicate the basic administrative principles.

Lesson 1 – Management and Administration Distinguished

A principle is a basic generalization that is accepted as true and that can

be used as a basis for reasoning or conduct. Administrative and managements
principles are useful guide in understanding and directing human behavior in
organization or in business enterprise.

Management and administration principles may seem the same, but there
are differences between the two. Administration has to do with the setting up of
objectives and crucial policies of every organization. What is understood by
management, however, is the act or function of putting into practice the policies
and plans decided upon by the administration.

Administration is a determinative function, while management is an

executive function. It also follows that administration makes the important
decisions of an enterprise in its entirety, whereas management makes the
decisions within the confines of the framework, which is set up by the
administration.

Administration is the top level, whereas management is a middle level

activity. If one were to decide the status, or position of administration, one would
find that it consists of owners who invest the capital, and receive profits from an
organization. Management consists of a group of managerial persons, who
leverage their specialist skills to fulfill the objectives of an organization.

Administrators are usually found in government, military, religious and

educational organizations. Management is used by business enterprises. The
decisions of an administration are shaped by public opinion, government
policies, and social and religious factors, whereas management decisions are
shaped by the values, opinions and beliefs of the mangers.

39
 In administration, the planning and organizing of functions are the key
factors, whereas, so far as management is concerned, it involves motivating and
controlling functions. When it comes to the type of abilities required by an
administrator, one needs administrative qualities, rather than technical
qualities. In management, technical abilities and human relation management
abilities are crucial.

Administration usually handles the business aspects, such as finance. It

may be defined as a system of efficiently organizing people and resources, so as
to make them successfully pursue and achieve common goals and objectives.
Administration is perhaps both an art and a science. This is because
administrators are ultimately judged by their performance. Administration must
incorporate both leadership and vision.

Management is really a subset of administration, which has to do with the

technical and mundane facets of an organization’s operation. It is different from
executive or strategic work. Management deals with the employees.
Administration is above management, and exercises control over the finance and
licensing of an organization.

Therefore, we can see that these two terms are distinct from one another,
each with their own set of functions. Both these functions are crucial, in their
own ways, to the growth of an organization. In addition, the American
Management Association provides a summary distinctions between management
and administration, as follows:

➢ Management is the act or function of putting into practice the policies and
plans decided upon by the administration.

➢ Administration is a determinative function, while management is an

executive function.

➢ Administration makes the important decisions of an enterprise in its

entirety, whereas management makes the decisions within the confines of
the framework, which is set up by the administration.

➢ Administrators are mainly found in government, military, religious and

educational organizations. Management, on the other hand, is used by
business enterprises.

In today's world, management and administration have become a

challenging task. New concepts, theories and techniques are emerging every day
all over the world to solve problems related to leadership, human values,
corporate social responsibility, ethics and values, culture and many more
management issues which are directly or indirectly affecting the sustainability
and growth of organizations, employees and nations as well.
40
Lesson 2 – Fundamental Theories on Management

Management theories are concepts surrounding recommended

management strategies, which may include tools such as frameworks and
guidelines that can be implemented in modern organizations. Generally,
professionals will not rely solely on one management theory alone, but instead,
introduce several concepts from different management theories that best suit
their workforce and company culture.

Management theories address how supervisors implement strategies to

accomplish organizational goals and how they motivate employees to perform at
their highest ability. Typically, leaders apply concepts from different
management theories that best suit their employees and company culture.

Until the day that machines are able to think, talk, and experience
emotions, humans will remain the most complicated beings to manage. Humans
can never achieve the kind of error-free performance that machines provide. On
the upside, there are tons of things that machines are not capable of doing,
making humans indispensable assets. For such reason, proper management is
one of the most crucial things for an organization.

For a long time, theorists have been researching the most suitable forms
of management for different work settings. This is where management theories
come into play. Although many management theories were created centuries ago,
they still provide many beneficial frameworks for leading teams in the workplace
and running businesses today.

1. Scientific/Classical Management Theory (Frederick W. Taylor)

The scientific management theory also called “classical” was developed by

Frederick Taylor, an American inventor and engineer. Taylor’s believed that the
scientific method, not judgment or discretion, is the best determiner of efficiency
in the workplace. Scientific management promotes standardization,
specialization, assignment based on ability, and extensive training and
supervision. Only through those practices can a business achieve efficiency and
productivity.

According to Taylor, money was the key incentive for working, which is
why he developed the “fair day’s wages for a fair day’s work” concept, which he
called it “Differential Piece Rate System”, of paying wages to the workers. If
efficiency is greater than the defined standard then workers should be paid 120
% of normal piece rate. If efficiency is less than standard then workers should
be paid 80% of normal piece rate. Taylor established four principles of scientific
management:

41
 1) Each task should be studied to determine the most efficient way to do the
task.
2) Workers should be matched to jobs that align with both their abilities and
motivation.
3) Workers should be monitored closely to ensure they only follow best
working practices.
4) Managers should spend time training employees and planning for future
needs.

There are a few positives of this theory. Maximizing efficiency is a great

idea. Assigning workers to jobs based on their abilities and motivation levels is
also an interesting idea that could have beneficial effects in some areas. Major
flaws in the theory, however, include the de-emphasis on teamwork. An
incredible focus on specific and individualized tasks eliminates creative problem-
solving and makes teamwork obsolete.

2. Bureaucratic Management Theory (Max Weber)

Max Weber, a German scientist, defines bureaucracy as a highly

structured, formalized, and also an impersonal organization. He said that
bureaucracy is the basis for the systematic formation of any organization and is
designed to ensure efficiency and economic effectiveness. He said that
bureaucracy is the basis for the systematic formation of any organization and is
designed to ensure efficiency and economic effectiveness. It is an ideal model for
management and its administration to bring an organization’s power structure
into focus.

He also instituted the belief that an organization must have a defined

hierarchical structure and clear rules, regulations, and lines of authority which
govern it. According to Max Weber, an ideal bureaucracy has the following
characteristics:

1) Specialization/division of labor;
2) A formal set of rules and regulations;
3) Well-defined hierarchy within the organization;
4) Impersonality in the application of rules; and
5) Accurate record keeping

3. Administrative Management Theory (Henry Fayol)

This theory of management is basically administrative in nature. It is

developed by Henri Fayol, an engineer and a miner, who believed that
organizational structure is vital to the success and productivity of a company.
Fayol established fourteen general principles management which he believed
outlined the basis for strong and successful companies:

42
1) Division of Work – Fayol presented work specialization as the best way to
use the human resources of the organization. Employees should be given
tasks responsibilities based on their skills and interests to make them
more effective and efficient.

2) Authority and Responsibility – Managers must have the authority to give

orders, but they must also keep in mind that with authority comes
responsibility. Authority is the right to give orders and the power to exact
obedience. Responsibility involves being accountable, and is therefore
naturally associated with authority. Whoever assumes authority also
assumes responsibility.

3) Discipline – According to this principle, employees should be respectful and

obedient, and an organization should outline rules and regulations that
clarify rules, good supervision and a reward-punishment system.

4) Unit of Command – This is the principle, which states that an employee

should receive orders from one superior only. This asserts that employees
must get orders from only one immediate supervisor and be accountable
to that person only.

5) Unity of Direction – Teams with the same objective should be working under
the direction of one manager, using one plan. This will ensure that action
is properly coordinated. There should be only one manager who is in
charge of coordinating the group activity to attain a single goal.

6) Subordination of Individual Interest to General Interest – In any group, the

interest of the group should supersede that of the individual. There must
be harmony between the interests of the individual and the organization,
although the organizational interest should be given priority since it will
bring rewards for the individual.

7) Remuneration of Personnel – Employee satisfaction depends on fair

remuneration for everyone. Monetary and non-monetary remuneration
based on performance levels to create a bond between the employee and
the organization.

8) Centralization – According to this principle, the topmost level of authority

should be centralized to the top level of management, who has the power
to make the most important decisions in an organization. This principle
refers to how close employees are to the decision-making process. It is
important to aim for an appropriate balance.

9) Scalar Chain – Fayol thinks of the scalar chain as a line of authority, a

chain of superiors from the highest to the lowest ranks. Employees should

43
 be aware of where they stand in the organization’s hierarchy, or chain of
command. He emphasized that there is no hard rule regarding the
communication process through the chain of command.

10) Order – This principle asserts that for an organization to run smoothly,
the right man must be in the right job and that therefore every material
and employee should be given a proper place.

11) Equity – This principle implies everyone in the organization should be

treated equally and that it should be an environment of kindness.
Managers should be fair to staff at all times, both maintaining discipline
as necessary and acting with kindness where appropriate

12) Stability of Tenure of Personnel – According to this principle, employees

must have job security to be more efficient.

13) Initiative – It is conceived as the process of thinking out and executing a

plan. This refers to the level of freedom employees should have to carry
out their responsibilities without being forced or ordered.

14) Esprit de corps – This principle implies that union is strength.

Organizations should strive to promote team spirit and unity. This
requires unified team contribution and that cooperation is always greater
than the aggregate of individual performances.

4. Behavioral Management/Human Relation Theory (Elton Mayo)

Elton Mayo was an Australian born psychologist, industrial researcher,

and an organizational theorist. In his research, he stipulated that an increase in
worker’s productivity was produced by the psychological stimulus of being
singled out, involved, and made to feel important (Hawthorne Effect). It is the
alteration of behavior by the subjects of a study due to their awareness of being
observed. It can be summarized as “Employees will respond positively to any
novel change in work environment like better illumination, clean work stations,
relocating workstations etc. Employees are more productive because they know
they are being studied.

Mayo concluded that employees are more motivated by personal attention

and being part of a group than they are by money or even working conditions.
When employees know that their employer is concerned about them their
productivity increases.

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 5. System Theory (Ludwig Von Bertalanffy)

Ludwig von Bertalanffy, a biologist, believed that your body is the sum of
all parts. The premise of general systems theory is that an organization or a
business enterprise is like a system that is is composed of interacting elements
that are affected by their environment. Because of this interaction, the system
as a whole can evolve (develop new properties) and self-regulate (correct itself).

Systems Theory encourages managers to realize that business is a system

and is governed by the same laws and behaviors that affect every other
organizational part. According to the theory, the success of an organization
depends on several key elements: synergy, interdependence, and interrelations
between various subsystems.

In practice, managers are required to evaluate patterns and events in their

companies so as to determine the best management approach. This way, they
are able to collaborate on different programs so that they can work as a collective
whole rather than as isolated units. The system theory introduces the following
concepts:

1) Entropy — The tendency for a system to run down and die; a thing to be
avoided in business

2) Synergy — Working together, the parts can produce something greater

than those same parts could produce on their own

3.) Subsystem — The whole is built on subsystems, which themselves are

built on yet more subsystems

6. Contingency Management Theory (Fred Fiedler)

Fred Fiedler was an Austrian Emeritus Professor who said that the main
concept behind the contingency management theory is that no one management
approach suits every organization. There are several external and internal factors
that will ultimately affect the chosen management approach.

Fiedler proposed that the traits of a leader were directly related to how
effectively he led. According to Fiedler’s theory, there is a set of leadership traits
handy for every kind of situation. It means that a leader must be flexible enough
to adapt to the changing environment. Fiedler’s theory suggests that there is no
one management approach that suits every situation and every organization. The
contingency theory identifies three variables that are likely to influence an
organization’s structure:
1) the size of an organization;
2) technology being employed; and
3) style of leadership.
45
The contingency management theory can be summed up as follows:

1) There is no one specific technique for managing an organization; and

2) A leader should be quick to identify the particular management style
suitable for a particular situation.

7. Theory X and Theory Y (Douglas McGregor)

Douglas McGregor, a social psychologist, outlined two drastically different

styles of management (theories X and Y). Each style is guided by a manager’s
perceptions of their employees’ motivations. More specifically, these theories
refer to two management styles: the authoritarian (Theory X) and participative
(Theory Y).

Theory X posits that employees are apathetic or dislike their work. Theory
X holds a pessimistic view of employees in the sense that they cannot work in
the absence of incentives. Managers who adhere to Theory X are often
authoritarian and will micromanage everything because they don’t trust their
employees.

Theory Y posits that employees are self-motivated, responsible, and want

to take ownership of their work. Theory Y holds an optimistic opinion of
employees. Managers who adhere to Theory Y include their employees in the
decision-making process and encourage creativity at all levels. In practice, small
businesses tend to operate on Theory Y while large businesses tend to operate
on Theory X.

8. Modern Management Theories

Modern management theories embrace the idea that people are complex.
Their needs vary over time, and they possess a range of talents and skills that
the business can develop through on-the-job training and other programs. It
offers some useful points that you can combine with other theories to create a
structure that is just right for your business. At the same time, management can
use mathematical techniques such as statistical, cost, revenue, and return-on-
investment (ROI) analysis to make rational decisions unaffected by emotion.

Modern management theories emphasize:

1) Using mathematical techniques to analyze and understand the

relationship between managers and employees;
2) That employees don’t work for money alone; and
3) Instead, they work for happiness, satisfaction, and a desired lifestyle.

46
9. Quantitative Management Theory

The quantitative management theory is an offshoot of modern

management theories in response to managerial efficiency. This theory has the
idea of bringing together experts from scientific disciplines to address staffing,
materials, logistics, systems, and organizational issues. The clear-cut, numbers-
oriented approach to management helped decision makers calculate the risks,
benefits, and drawbacks of specific actions.

This shift toward pure logic, science, and math is tempered by the belief
that these mathematical results should be used to support, not replace,
experienced managerial judgment.

Why are we studying management theories? The following are some of the
essential reasons:

1) Increased productivity – Using these theories, leaders learn how to make

the most of their team members, improving performances and increasing
productivity.

2) Simplified decision-making – Management theories give leaders strategies

that speed up the decision-making process, helping those leaders be more
effective in their roles.

3) Increased collaboration – Leaders learn how to encourage team member

participation and increase collaboration in the workplace.

4) Increased objectivity – Management theories encourage leaders to make

scientifically proven changes rather than relying on their judgment.

Lesson 3 – The M’s of Management

1. Money – Money is the most critical and all-purpose resource because it is used
to acquire or hire other resources. In organization, money is employed to
generate more money in the form of profits or surplus. A business firm or
enterprise requires money in the form of fixed capital and working capital.
Management is done to meet day-to-day business requirements and the funds
involved in meeting those requirements are known as working capital.

2. Manpower – Manpower refers to the managerial and non-managerial

personnel employed in an organization. Other resources cannot act by
themselves and have to be utilized by human beings. Therefore, human
resources mobilize, allocate and utilize the physical and financial resources of
an organization. Man in management is referred to as a human resource. It is
the recruitment, selection, training, promotion and grievances handling of

47
 personnel. Payment of compensation gratuity, termination of services are the
few issues that have to be dealt effectively to retain the talent within an
organization.

3. Materials – Materials represent the physical raw materials and intermediate

products (semi-finished goods) which are converted and/or assembled into
finished products with the help of certain processes and technology. Material
is a basic ingredient in management be it a service industry or a product
industry. Most of the industries locate themselves nearby to the availability of
material.

4. Machinery – Machines are the equipment used to process the materials into
finished or semi-finished products. Employment of modern machinery helps
to reduce costs and to improve the quality of output. Technology has therefore
become an important ingredient in the efficient management of organizations.
Machines are the basic tools to produce goods or to generate services.

5. Methods – Methods refer to the normal and prescribed ways of doing things
various operations are performed according to certain systems and
procedures. Use of right methods helps to increase efficiency of operations and
contributes to effective management. Methods determine how people work and
their work priorities. Methods link people to each other and link people to
materials. It assures quality work performance.

Every other factor which is a part of the five M's has its own dynamics. It
is the duty of management or managers to understand or analyze the basic
nature and the functions of each M and the source of its availability. Managers
must clearly know the purposes for which the other factors are employed and
coordinate them in such a way as to optimize their combined productivity. The
popular method of management is what is referred to as “management by
objective”. This involves setting objectives and targets for different aspects of the
organization.

Lesson 4 – Various Levels of Management

The various levels of management are:

1. Top Level

Top-Level Management is also referred to as the administrative level. They

coordinate services and are keen on planning. The Top-level management
controls the management of goals and policies and the ultimate source of
authority of the organization. They apply control and coordination of all the
activities of the firm as they organize the several departments of the enterprise

48
which would include their budget, techniques, and agendas. Takes all major and
crucial decisions and frames organization vision, mission, and objectives.

There are several functions performed by the top-level management, but

three of them are the most important, and they are:

• To lay down the policies and objective of the organization

• Strategizing the plans of the enterprise and aligning competent managers
to the departments or middle level to carry them out.
• Keeping the communication between the enterprise and the outside world.

2. Middle Level

Middle-level Management is also referred to as the executory level, they

are subordinates of the top-level management and are responsible for the
organization and direction of the low-level management. They account for the
top-level management for the activities of their departments.

The middle-level managers are semi- executives and are made up of the
departmental managers and branch manager. They could be divided into senior
and junior middle-level management if the organization is big. They coordinate
the responsibilities of the sub-unit of the firm and access the efficiency of lower-
level managers. They give management direction to the lower level.

The middle-level managers are in charge of the employment and training

of the lower levels. They are also the communicators between the top level and
the lower level as they transfer information, reports, and other data of the
enterprise to the top-level. Apart from these, there are three primary functions
of the middle-level management in the organization briefed below:

• To carry out the plans of the organization according to policies and

directives laid down by the top-level management.
• To organize the division or departmental activities.
• To be an inspiration or create motivation for junior managers to improve
their efficiency.

3. Lower/Bottom Level

The lower level Management is also referred to as the supervisory or the

operative level of managers. They oversee and direct the operative employees.
They spend most of their time addressing the functions of the firm, as instructed
by the managers above them.

The lower-level managers are the first line of managers as they feature at
the base of operations, so they are essential personnel that communicates the

49
fundamental problems of the firm to the higher levels. This management level is
made up of the foreman, the line boss, the shift boss, the section chief, the head
nurse, superintendents, and sergeants.

They are the intermediary, they solve issues amidst the workers and are
responsible for the maintenance of appropriate relationships within the
organization. They are also responsible for training, supervising and directing
the operative employees.

The lower level managers represent the management to the operative

workers as they ensure discipline and efficiency in the organization. The duty of
inspiration and encouragement falls to them, as they strengthened the
workforce. They also organize the essential machines, tools and other materials
required by the employees to get their job done. Briefed below are the primary
functions of lower-level management:

(1) To allocate tasks and responsibilities to the operative employees;

(2) To ensure quality and be responsible for the production quantity;

(3) To communicate the goals and objective of the firm laid down by the higher
level managers to the employees and also the suggestions,
recommendations, appeals and information concerning employee
problems to the higher-level managers;

(4) To give instruction and guided direction to workers on their day to day
jobs; and

(5) To give periodic reports of the workers to the higher-level managers.

Lesson 5 – The Management Goals, Objectives, Functions, Skills

The basic management goals include:

1) To establish an environment in which people can accomplish group goals

with the least amount of time, money, materials, and personal
dissatisfaction or in which they can achieve as much as possible of a
desired goal with available resources. A manager who achieves such an
aim is said to be a strategic manager.

2) To become productive. Indeed, government, and the private sector

recognize the urgent need for productivity improvement. Productivity
improvement is about effectively performing the basic managerial and non-
managerial activities. Simply defined, productivity is about the output-
input ratio within a time period with due consideration for equality.

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 3) To ensure effectiveness and efficiency in individual and organizational
performance. Effectiveness is the achievement of objectives. Efficiency is
the achievement of the ends with the least amount of resources. Managers
cannot know whether they are productive unless they first know their
goals and those of the organization.

The most common management objectives are:

1) To ensure organizational goals and targets are met with least cost and
minimum waste;

2) To look after health and welfare, and safety of the employees/staff; and

3) To protect the machinery and resources of the organization, including the

human resources.

The following are the typical management functions:

1. Planning – Planning involves selecting missions and objectives and the

actions to achieve them. It requires decision-making, i.e., choosing future
courses of action from among alternatives. Plans range from overall
purposes and objectives to the most detailed actions to be taken. No real
plan exists until a decision (a commitment of human and material
resources) has been made. In other words, before a decision is made, all
that exists is planning study, analysis, or a proposal; there is no real plan.

Planning is the determination of objectives and formulation of plans,

strategies, programs, policies, procedures and standards needed to
achieve the desired organization objectives. To implement the plans there
must be some organization structure.

2. Organizing – People working together in groups to achieve some goal must

have roles to play. Generally, these roles have to be defined and structured
by someone who wants to make sure that people contribute in a specific
way to group effort. Organizing, therefore, is that part of management that
involves establishing an intentional structure of roles for people to fill in
an organization. Intentional in that all tasks necessary to accomplish goals
are assigned and assigned to people who can do them best.

3. Staffing – Staffing involves filling, and keeping filled, the positions in the
organization structure. This is done by identifying work-force
requirements; inventorying the people available; and recruiting, selecting,
placing, promoting, appraising, planning the careers of, compensating,
and training or otherwise developing both candidates and current
jobholders to accomplish their tasks effectively and efficiently.

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 4. Leading – Leading is the influencing of people so that they will contribute
to organization and group goals; it has to do predominantly with the
interpersonal aspect of managing. Most important problems to managers
arise from people – their desires and attitudes, their behavior as
individuals and in groups. Hence, effective managers need to be effective
leaders. Leading involves motivation, leadership styles and approaches
and communication.

5. Controlling – Controlling, for example, budget for expense, is the measuring

and correcting of activities of subordinates to ensure that events conform
to plans. It measures performance against goals and plans, shows where
negative deviations exist, and, by putting in motion actions to correct
deviations, helps ensure accomplishment of plans. Although planning
must precede controlling, plans are not self-achieving. Plans guide
managers in the use of resources to accomplish specific goals; then
activities are checked to determine whether they conform to the plans.

6. Coordinating – Finally, coordination is the essence of manager-ship for

achieving harmony among individual efforts toward the accomplishment
of group goals. Each of the managerial functions discussed earlier on is an
exercise contributing to coordination. Because individuals often interpret
similar interests in different ways, and their efforts toward mutual goals
do not automatically mesh with the efforts of others, it, thus, becomes the
central task of the manager to reconcile differences in approach, timing,
effort, or interest, and to harmonize individual goals to contribute to
organizational goals.

Lesson 6 – Administrative Principles

Administrative theory is based on the concept of departmentalization,

which means the different activities to be performed for achieving the common
purpose of the organization should be identified and be classified into different
groups or departments, such that the task can be accomplished effectively.

Administration refers to the group of individuals who are in charge of

creating and enforcing rules and regulations, or those in leadership positions
who complete important tasks. According to Meriam-Webster Dictionary, the
term administration denotes the execution of public affairs as distinguished from
policy-making.

According to Gulick and Urwick, the design of an organization is very

important. A poorly-organized structure leads to dysfunctional departments and,
by extension, organization. This is why different activities must be grouped
together in the right way, so that departments can be created, each with their
own specialisms. If tasks overlap, this is indicative of an illogical, wasteful and
52
inefficient design. There must also be clarity about responsibilities and
hierarchical layers.

It was the American political scientist Luther Gulick and the British
management consultant Lyndall Urwick who elaborated Henri Fayol’s
management ideas in their management paper Notes on theory of Organizations,
which they published in 1937.

Their result was the acronym POSDCORB, which stands for Planning,
Organising, Staffing, Directing, Coordinating, Reporting and Budgeting. With the
POSDCORB concept, they demarcated the various important tasks of
supervisors, managers and directors. The concept lists all the tasks that
managers have to deal with on a daily basis. As such, POSDCORB is still relevant
today.

1. Planning

It is the task of managers not only to decide what to do, but also to plan
this in the agenda. Planning has to do with foresight. This includes short-term
planning (weekly, monthly and quarterly), medium-term planning (annual) and
long-term planning (looking ahead with a timeline of 3 years). Planning
determines the direction of the organization. On the other hand, a predetermined
time-span means that when time runs out, whatever result one has at the time
must suffice. The development of this timeline must be closely monitored.

2. Organizing

Managers not only have the task of assigning activities, but also have the
task of allocating these tasks to their respective departments and employees. To
achieve an end result, the manager needs the necessary resources, including
budget, raw materials, personnel and their expertise, technology and machines.
He/she will have to organize all sorts of things to achieve the end result. To get
started as efficiently as possible, it is important that the employees’ division of
labor suits the end goal and end result as well as possible.

3. Staffing

This section relates to the personnel policy and all related activities within
an organization. Good and competent personnel is crucial for an organization to
function optimally. It is the task of the manager to first identify the expertise,
skills and experiences required for certain positions. Based on this, job profiles
are drawn up and personnel can be recruited. The entire recruitment, selection
and training procedure falls under this staff policy and ensures that the right
type of employee is in the right place.

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4. Directing

Direction, of course, lies in the hands of the manager; he/she is the person
with final responsibility and is held accountable for this. In practice, this means
that the manager maintains control over all functions. In addition, the manager
monitors but also motivates his employees. He/ she tells them how best to do
their work, encourages them and drives them to take on certain challenges.

5. Coordinating

With this concept, it is the task of the manager to connect different

sections and to achieve cooperation. A good manager has a so-called helicopter
view, which gives him/her an overview of what is happening and what still needs
to be done. From this perspective, he/ she is able to coordinate tasks and
manage his employees. It is his/her task to synchronise different departments
and to bring them together with the right end goal in mind.

6. Reporting

Without reporting, there is no evidence. A clear report keeps

communication open throughout the entire organization. Reporting provides
insight into the progress and agreements can also be recorded in this way. Other
essential information, such as problems with employees, new processes,
performances interviews and sales figures, is also made transparent through
reporting. Involved parties can also quickly find archived reports.

7. Budgeting

Finance is the lifeblood of any organization. The manager is responsible

for the management, expenditure and control of the department’s budget and
also has to keep an eye on tax details. In addition to employee wages, it is the
task of the manager to also properly monitor other expenditures such as
materials and investments. If wasteful spending, overruns, errors or even fraud
are discovered, the manager is responsible for taking action.

With the POSDCORB concept, Gulick and Urwick took a number of facets
within organizational structure and coordination into account. In their opinion,
one is advised not to lose sight of the following:

1. Span of control

This entails the number of employees a manager actually manages. The

greater the scope of control, the more the manager has to supervise his/her
employees’ work. If the manager also has employees who are unable to work
independently, then it becomes quite the job to manage all employees in the right

54
way. Which is why Gulick and Urwick stated that the most effective way is to
assign 3 to 6 employees to each manager.

2. Unity of command

This allows an organization to function smoothly. The concept is simple:

every employee has one manager who gives him/her assignments and supervises
him/her. In all hierarchical levels of an organization, this concept should serve
as the yardstick. In practice, this means that each employee receives his/her
assignments from only one manager. Directions from multiple managers can
lead to confusion among staff.

The POSDCORB concept also recommends a delineation between the ‘line’

and ‘staff’ functions. This means that a line manager focuses on his/ her ‘unity
of command’ and is the only one who gives orders to his/her employees.
Conversely, he/she is solely responsible for the performance of his/her
employees.

As soon as there is an advisory staff department, with specialized

knowledge, it should become clear to employees how the role of these staff
managers is arranged. In the case of ‘functional authority’, these staff managers
also have the opportunity to get involved in departmental policy and support line
managers. This must be clear to employees, otherwise the ‘unity in command’
will be compromised.

Post Learning Assessment:

1) Distinguish management from administration.

________________________________________________________________________
________________________________________________________________________
________________________________________________________________________

2) Discuss the M’s of management.

________________________________________________________________________
________________________________________________________________________
________________________________________________________________________

3) Discuss the functions of management.

________________________________________________________________________
________________________________________________________________________
________________________________________________________________________

4) Discuss the principles of POSDCORB in administration by Gulick.

________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
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 Chapter 4
ETHICAL STANDARDS AND MORAL PRACTICES

Learning Outcomes

At the end of this chapter, the students should be able to:

1) elaborate the concept of ethics;

2) explain the sources of ethical standards;
3) explore the common principles of ethical standards;
4) evaluate the theories on moral practices;
5) establish a framework for ethical decision making; and
6) elucidate social decorum etiquettes.

Lesson Proper

Lesson 1 – The concept of Ethics and Ethical Standards

Ethics is the principle of right and wrong that is accepted by an individual

or by a social group. Ethics is a branch of philosophy that involves systematizing,
defending, and recommending concepts of right and wrong conduct. In brief,
ethics is understanding right from wrong.

To be ethical, one has to demonstrate respect, and responsibility. Ethical

means adhering to accepted standards of social or professional behavior. Ethical
Decision is a decision that generates trust, and indicates responsibility, fairness
and caring to an individual.

Ethical Dilemma is a complex situation that often involves an apparent

mental conflict between moral imperatives, in which to obey one would result in
transgressing another. Sometimes called ethical paradoxes in moral philosophy,
ethical dilemmas are often invoked in an attempt to refute an ethical system or
moral code, or to improve it so as to resolve the paradox.

We all have an image of our better selves, of how we are when we act
ethically, or are at our best. We probably also have an image of what an ethical
community or society, an ethical business or organization, an ethical
government or state should be. Ethics really has to do with all these levels. Acting
ethically as individuals, creating ethical organizations and governments, and
making our society as a whole ethical in the way it treats everyone.

Ethics is helpful to identify what ethics is NOT:

• Ethics is not the same as feelings. Feelings provide important information

for our ethical choices. Some people have highly developed habits that

56
 make them feel bad when they do something wrong, but many people feel
good even though they are doing something wrong. And often our feelings
will tell us it is uncomfortable to do the right thing if it is hard.

• Ethics is not religion. Many people are not religious, but ethics applies to
everyone. Most religions do advocate high ethical standards but sometimes
do not address all the types of problems we face.

• Ethics is not following the law. A good system of law does incorporate many
ethical standards, but law can deviate from what is ethical. Law can
become ethically corrupt, as some totalitarian regimes have made it. Law
can be a function of power alone and designed to serve the interests of
narrow groups. Law may have a difficult time designing or enforcing
standards in some important areas, and may be slow to address new
problems.

• Ethics is not following culturally accepted norms. Some cultures are quite
ethical, but others become corrupt or blind to certain ethical concerns (as
the United States was to slavery before the Civil War). When in Rome, do
as the Romans do is not a satisfactory ethical standard.

• Ethics is not science. Social and natural science can provide important
data to help us make better ethical choices. But science alone does not tell
us what we ought to do. Science may provide an explanation for what
humans are like. But ethics provides reasons for how humans ought to
act. And just because something is scientifically or technologically
possible, it may not be ethical to do it.

Lesson 2 – Five Sources of Ethical Standards

Standard is a basis for comparison and a reference point against which

other things can be evaluated. Ethical standards are a set of principles
established to communicate its underlying moral values. They are principles that
when followed, promote values such as trust, good behavior, fairness, and/or
kindness.

There are two fundamental problems in identifying the ethical standards

we are to follow: (1) on what do we base our ethical standards; and (2) how do
those standards get applied to specific situations we face?

1. The Utilitarian Approach

Some ethicists emphasize that the ethical action is the one that provides
the most good or does the least harm, or, to put it another way, produces the
greatest balance of good over harm. The ethical corporate action, then, is the one

57
that produces the greatest good and does the least harm for all who are affected.
The utilitarian approach deals with consequences; it tries both to increase the
good done and to reduce the harm done.

2. The Rights Approach

Other philosophers and ethicists suggest that the ethical action is the one
that best protects and respects the moral rights of those affected. This approach
starts from the belief that humans have a dignity based on their human nature
per se or on their ability to choose freely what they do with their lives. On the
basis of such dignity, they have a right to be treated as ends and not merely as
means to other ends. Also, it is often said that rights imply duties, in particular,
the duty to respect others' rights.

3. The Fairness or Justice Approach

Aristotle and other Greek philosophers have contributed the idea that all
equals should be treated equally. Today we use this idea to say that ethical
actions treat all human beings equally, or if unequally, then fairly based on some
standard that is defensible.

4. The Common Good Approach

The Greek philosophers have also contributed the notion that life in
community is a good in itself and our actions should contribute to that life. This
approach suggests that the interlocking relationships of society are the basis of
ethical reasoning and that respect and compassion for all others, especially the
vulnerable, are requirements of such reasoning.

5. The Virtue Approach

A very ancient approach to ethics is that ethical actions ought to be

consistent with certain ideal virtues that provide for the full development of our
humanity. These virtues are dispositions and habits that enable us to act
according to the highest potential of our character and on behalf of values like
honesty and integrity.

Putting each of the approaches together helps us determine what

standards of behavior can be considered ethical. Virtue ethics asks of any action,
"What kind of person will I become if I do this?" or "Is this action consistent with
my acting at my best?" There are still problems to be solved, however.

The first problem is that we may not agree on the content of some of these
specific approaches. We may not all agree to the same set of human and civil
rights. We may not agree on what constitutes the common good. We may not
even agree on what is a good and what is a harm.
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 The second problem is that the different approaches may not all answer
the question "What is ethical?" in the same way. Nonetheless, each approach
gives us important information with which to determine what is ethical in a
particular circumstance. And much more often than not, the different
approaches do lead to similar answers.

Lesson 3 – Common Principles of Ethical Standards

Ethical values, translated into active language establishing standards or

rules describing the kind of behavior an ethical person should and should not
engage in, are ethical principles.

The following list of principles incorporate the characteristics and values

that most people associate with ethical behavior:

1. Honesty – Ethical executives are honest and truthful in all their dealings
and they do not deliberately mislead or deceive others by
misrepresentations, overstatements, partial truths, selective omissions, or
any other means.

2. Integrity – Ethical executives demonstrate personal integrity and the

courage of their convictions by doing what they think is right even when
there is great pressure to do otherwise; they are principled, honorable and
upright; they will fight for their beliefs. They will not sacrifice principle for
expediency, be hypocritical, or unscrupulous.

3. Promise-Keeping & Trustworthiness – Ethical executives are worthy of

trust. They are candid and forthcoming in supplying relevant information
and correcting misapprehensions of fact, and they make every reasonable
effort to fulfill the letter and spirit of their promises and commitments.
They do not interpret agreements in an unreasonably technical or legalistic
manner in order to rationalize non-compliance or create justifications for
escaping their commitments.

4. Loyalty – Ethical executives are worthy of trust, demonstrate fidelity and

loyalty to persons and institutions by friendship in adversity, support and
devotion to duty; they do not use or disclose information learned in
confidence for personal advantage. They safeguard the ability to make
independent professional judgments by scrupulously avoiding undue
influences and conflicts of interest. They are loyal to their companies and
colleagues and if they decide to accept other employment, they provide
reasonable notice, respect the proprietary information of their former
employer, and refuse to engage in any activities that take undue advantage
of their previous positions.

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 5. Fairness – Ethical executives and fair and just in all dealings; they do not
exercise power arbitrarily, and do not use overreaching nor indecent
means to gain or maintain any advantage nor take undue advantage of
another’s mistakes or difficulties. Fair persons manifest a commitment to
justice, the equal treatment of individuals, tolerance for and acceptance of
diversity, the they are open-minded; they are willing to admit they are
wrong and, where appropriate, change their positions and beliefs.

6. Concern for Others – Ethical executives are caring, compassionate,

benevolent and kind; they like the Golden Rule, help those in need, and
seek to accomplish their business objectives in a manner that causes the
least harm and the greatest positive good.

7. Respect for Others – Ethical executives demonstrate respect for the human
dignity, autonomy, privacy, rights, and interests of all those who have a
stake in their decisions; they are courteous and treat all people with equal
respect and dignity regardless of sex, race or national origin.

8. Law Abiding – Ethical executives abide by laws, rules and regulations

relating to their business activities.

9. Commitment to Excellence – Ethical executives pursue excellence in

performing their duties, are well informed and prepared, and constantly
endeavor to increase their proficiency in all areas of responsibility.

10. Leadership – Ethical executives are conscious of the responsibilities and

opportunities of their position of leadership and seek to be positive ethical
role models by their own conduct and by helping to create an
environment in which principled reasoning and ethical decision making
are highly prized.

11. Reputation and Morale – Ethical executives seek to protect and build the
company’s good reputation and the morale of its employees by engaging
in no conduct that might undermine respect and by taking whatever
actions are necessary to correct or prevent inappropriate conduct of
others.

12. Accountability – Ethical executives acknowledge and accept personal

accountability for the ethical quality of their decisions and omissions to
themselves, their colleagues, their companies, and their communities.

Lesson 4 – A Framework for Ethical Decision Making

Making good ethical decisions requires a trained sensitivity to ethical

issues and a practiced method for exploring the ethical aspects of a decision and

60
weighing the considerations that should impact our choice of a course of action.
Having a method for ethical decision making is absolutely essential. When
practiced regularly, the method becomes so familiar that we work through it
automatically without consulting the specific steps.

The more novel and difficult the ethical choice we face, the more we need
to rely on discussion and dialogue with others about the dilemma. Only by
careful exploration of the problem, aided by the insights and different
perspectives of others, can we make good ethical choices in such situations.

The following framework for ethical decision making is a useful method for
exploring ethical dilemmas and identifying ethical courses of action.

1. Recognize an Ethical Issue

➢ Could this decision or situation be damaging to someone or to some

group? Does this decision involve a choice between a good and bad
alternative, or perhaps between two "goods" or between two "bads"?
➢ Is this issue about more than what is legal or what is most efficient? If
so, how?

2. Get the Facts

➢ What are the relevant facts of the case? What facts are not known? Can
I learn more about the situation? Do I know enough to make a decision?
➢ What individuals and groups have an important stake in the outcome?
Are some concerns more important? Why?
➢ What are the options for acting? Have all the relevant persons and
groups been consulted? Have I identified creative options?

3. Evaluate Alternative Actions

➢ Evaluate the options by asking the following questions:

✓ Which option will produce the most good and do the least
harm? (The Utilitarian Approach)
✓ Which option best respects the rights of all who have a stake?
(The Rights Approach)
✓ Which option treats people equally or proportionately? (The
Justice Approach)
✓ Which option best serves the community as a whole, not just
some members? (The Common Good Approach)
✓ Which option leads me to act as the sort of person I want to
be? (The Virtue Approach)

4. Make a Decision and Test It

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 ➢ Considering all these approaches, which option best addresses the
situation?
➢ If I told someone I respect or told a television audience which option I
have chosen, what would they say?

5. Act and Reflect on the Outcome

➢ How can my decision be implemented with the greatest care and attention
to the concerns of all stakeholders?
➢ How did my decision turn out and what have I learned from this specific
situation?

Lesson 5 – Theories on Moral Practices

Morality is knowing how to accurately calculate the differences between

right and wrong, and good and bad. There are many benefits of being right and
good, and there are many negative consequences that are the result of being bad
or wrong. The more you understand these differences, the more you will benefit,
and the less you will suffer from mistakes. Character is the inherent complex of
attributes that determines a person’s moral and ethical actions and reactions.

Morality is the differentiation of intentions, decisions, and actions between

those that are distinguished as proper and those that are improper. Morality
can be a body of standards or principles derived from a code of conduct from a
particular philosophy, religion, or culture, or it can derive from a standard that
a person believes should be universal.

Social Rule System Theory

The social rules system theory is an attempt to formally approach different

kinds of social rule systems in a unified manner. Social rules systems include
institutions such as norms, laws, regulations, taboos, customs, and a variety of
related concepts. Social rule system theory is fundamentally an institutionalist
approach to the social sciences, both in its placing primacy on institutions and
in its use of sets of rules to define concepts in social theory. Convention as a
norm is a set of agreed, stipulated, or generally accepted standards, norms,
social norms, or criteria, often taking the form of a custom.

The Honor System Theory

The honor system theory is a philosophical way of running a variety of

endeavors based on trust, honor, and honesty. Something that operates under
the rule of the "honor system" is usually something that does not have strictly
enforced rules governing its principles. In British English, it would more often
be called a "trust system". The honor system is also a system granting freedom
from customary surveillance with the understanding that those who are so freed
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will be bound by their honor to observe regulations and will therefore not abuse
the trust placed in them. A person engaged in an honor system has a strong
negative concept of breaking or going against it. The negatives may include
community shame, loss of status, loss of a personal sense of integrity and pride
or in extreme situations, banishment from one's community.

Some important concepts on morality:

1) Moral Absolutism – is an ethical view that particular actions are

intrinsically right or wrong.

2) Moral Compass – is an inner sense which distinguishes what is right from

what is wrong, functioning as a guide for morally appropriate behavior.

3) Moral Obligation – is conducting oneself based on their own set of values.

4) Moral Development – are principles for how individuals ought to treat one
another, with respect to justice, others' welfare, and rights.

5) Moral Responsibility – is the capability to reflect on your situation, to form

intentions about how you will act, and then to carry out that action.

6) Moral Agency – is an individual's ability to make moral judgments based

on some notion of right and wrong and to be held accountable for these
actions. A moral agent is "a being who is capable of acting with reference
to right and wrong."

7) Moral Psychology – refer to the study of moral development, moral

judgment, moral reasoning, moral sensitivity, moral responsibility, moral
motivation, moral identity, moral action, moral diversity, moral character,
altruism, psychological egoism, moral luck, moral forecasting, moral
emotion, affective forecasting, and moral disagreement.

8) Conscience – is an aptitude, faculty, intuition or judgment that assists in

distinguishing right from wrong. Awareness.

Moral Knowledge helps you to avoid regret, guilt, shame, remorse,

mistakes, abuse, grief, embarrassment, crime and disappointment, just to name
a few. Moral knowledge helps to guide you so that you can make good decisions.

Good things come from people when they know better. Bad things come
from people when they do not know any better. If everyone knew better then they
would not do bad things. Everyone has a right to know better.

People should not be good just because they fear punishment. That does
not work because people who feel they are above the law will most always commit
63
crimes, and people who do not fear punishment or consider punishment, will
also commit crimes. The same thing goes for being good. If people are only good
because they seek reward, then people will not be good all the time because they
believe that there is no benefit to being good. People will also never fully
understand the true impacts of their actions, whether those actions are good or
bad. Grateful.

Some Words that Describe Nice People

1) Friendly – is being nice to people; inline to help or give support; enjoying

others’ company.

2) Good-neighborliness – is a disposition to be friendly and helpful to

neighbors.

3) Affability – is a disposition to be friendly and approachable and easy to

talk to. Affable is someone who spreads kindness or shows warmth and
friendliness.

4) Salutation – is an act of honor or courteous recognition and an

acknowledgment or expression of good will, especially on meeting or
greeting someone.

5) Hospitality – refers to the relationship between a guest and a host, wherein

the host receives the guest with goodwill, including the reception and
entertainment of guests, visitors, or strangers. Hospitality is described as
“the virtue of a great soul” that cares for the whole universe through the
ties of humanity.

6) Civility – is formal politeness and courtesy in behavior or speech.

7) Cordial – is being politely warm and friendly.

Lesson 6. Some Verbal Habits of Highly Likable People

1. They are polite when then can be. Words like "please" and "thank you" might
be technically unnecessary but they're invaluable if you want to be more
charismatic.

2. They acknowledge small favors. Likable people appreciate being thanked, and
they pay it back verbally.

3. They offer meaningful praise. The key word here is "meaningful." Charismatic
people give sincere compliments.

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4. They express sincere empathy. Everybody wants to be understood. Phrases
like, "That must have made you feel proud," or "I can imagine you must feel
angry," thus both exploring and validating other people's feelings.

5. They share useful information. Some people like to hoard information because
they think it makes them more powerful.

6. They offer to help. The most charismatic people among us start simply by
looking for chances to help in their families, in their communities, and in the
small moments of their day-to-day lives.

7. They speak with justifiable confidence. When faced with challenging situations
especially things that affect other people they are the ones who approach the
problem with an air of calmness, curiosity, and confidence.

8. They use names and titles that connote respect. Charismatic people remember
other people's names, and use their titles in circumstances when it makes those
people feel good.

9. They express their faith in others. Four simple words: "I believe in you." That
kind of validation from others can inspire achievement and affection for the
person who gives the validation.

10. They remember that they are part of a team. A sense of camaraderie makes
tough situations bearable. Having a sense of humor can even make them fun.

11. They make introductions. Charismatic people are the ones who are out to
help others meet still more people rather than just building their own networks.

12. They take their turn. Likable people are not afraid to step up when it is their
turn to do something enjoyable, or even to bear the burden of something that
isn't so great.

13. They let others make their own decisions. Charismatic leaders are not afraid
to delegate, and then to trust others to accomplish what they have asked them
to do.

14. They listen and they want to hear more. Highly likable people are active and
sincere listeners. For any of us, our time is our most valuable resource, and yet
they're more than willing to give it to you.

15. They take Responsibility. When it is their job or their fault, they step up.
They take control of the things they are supposed to have control over.

16. They voice their support. We all appreciate people who stand by us and who
let us know that they are there. Think of someone who showed you support when
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you needed it and tell me you didn't think of him or her as highly likable in that
moment.

17. They ask, "Why not?" Likable people are often dreamers, optimists, and
doers.

Self-Expression Values

1. Compassion – is a deep awareness of and sympathy for another's suffering.

The humane quality of understanding the suffering of others and wanting
to do something about it. Compassion is the response to the suffering of
others that motivates a desire to help.

2. Empathy – is the capacity to understand or feel what another person is

experiencing from within the other being's frame of reference, i.e., the
capacity to place oneself in another's position. Empathy Quotient is the
ability to feel an appropriate emotion in response to another's emotion and
the ability to understand the others' emotion.

3. Reciprocity – is a social rule that says people should repay, in kind, what
another person has provided for them; that is, people give back
(reciprocate) the kind of treatment they have received from another.
Reciprocally is in a mutual or shared manner.

4. Charity – is an activity or gift that benefits the public at large. A kindly and
lenient attitude toward people. Donation is a gift given by physical or legal
persons, typically for charitable purposes and/or to benefit a cause. Gift
or a present is an item given to someone without the expectation of
payment in return.

5. Gratitude – is understanding the value of someone or something that has

benefited you, and then showing your appreciation by being thankful for
that person and reciprocating if possible. Appreciation is understanding
the true nature of things and understanding the meaning of life and how
much we need to depend on each other and our environment in order to
live, learn, love and progress.

6. Philanthropy – is the voluntary promotion of human welfare. The love of

humanity, in the sense of caring.

7. Good Samaritan – refers to people who give reasonable assistance to those

who are, or who they believe to be, injured, ill, in peril, or otherwise
incapacitated.

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 8. “Rule of Three” – is whatever energy a person puts out into the world, be
it positive or negative, will be returned to that person three times.

Productive citizens are not just smart people who know lots of facts, or
people who can reason in abstract and impressive ways. They also have the skills
and the mindset necessary for democratic citizenship. In other words, they have
civic character. This includes a commitment to the common good, a willingness
to enter the public sphere and debate political and ethical issues, and the skills
necessary for learning about, intellectually digesting, and responding publicly to
societal issues and challenges. (Dr. Marvin W. Berkowitz, Professor of Character
Education University of Missouri).

“Man has been called a rational being, but rationality is a matter of

choice... Man has to be a man–by choice; he has to hold his life as a value–by
choice; he has to learn to sustain it–by choice; he has to discover the values it
requires and practice his virtues by choice. A code of values accepted by choice
is a code of morality.” (Atlas Shrugged - (Part 3, Chapter 7, Page 1,013).

Lesson 7 – Social Decorum and Protocols

Social decorum sets down appropriate social behavior and propriety, and
is thus linked to notions of etiquette and manners. Decorum means propriety
and good taste in conduct or appearance.

According Webster dictionary, Decorum (noun) denotes propriety of

manner or conduct; grace arising from suitableness of speech and behavior to
one's own character, or to the place and occasion; decency of conduct;
seemliness; that which is seemly or suitable. Social Norms are informal
understandings that govern the behavior of members of a society. Rules that
help guide behavior in a certain situations or environments. They are sometimes
collective representations of acceptable group conduct as well as individual
perceptions of particular group conduct.

They can be viewed as cultural products which represent a person’s basic

knowledge of what others do and think that they should do. Rulemaking is one
of the basic systems that humans have for organizing and simplifying actions.
But it must be done without risking blind conformity, and without infringing on
individuality or freedoms of expressions.

There are certain accepted behaviors in all social situations that you need
to learn. With few exceptions, putting them into practice can make a big
difference in your social life.

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Social rules:

1. Easy to have good manners – These basic rules of proper etiquette are
mostly common sense with a healthy dose of the Golden Rule thrown in
for good measure.

2. Be on time – No one likes to wait for others who are chronically late.
However, there are times when being late is out of your control.

3. Personal space – When you see someone squirming as you step closer back
off a bit. Every culture has different comfort levels of personal space, so
before you travel, find out how close you can get to people without being
rude.

4. Men’s manners – This one is simple: All you have to do is be a gentleman.

Rudeness is never manly.

5. Women’s manners – You can be a lady and still show strength. Times have
changed, and some rules have become outdated, but it's always
appropriate to be mannerly.

6. Teens’ manners – Show everyone how grown up you are by demonstrating

good manners. Chances are, if you exhibit proper etiquette, you'll earn
respect and maybe even more privileges.

7. Children’s manners – Be the kid everyone wants to play with. Even

grownups will want to be around you if you're polite.

8. Host and Hostess Gift - Never show up empty-handed when you're a guest
in someone's home.

9. Dealing with a Flaky Friend - It's difficult to deal with someone who is
always late, forgets to show up, or can't be relied on.

Communication:

Regardless of who you are, you will have the need to communicate
throughout life. Being a good communicator can do a variety of things for you,
including sharing important information, winning people to your side, and
raising your children.

1. Conversation – Learn how to hold a decent conversation, with back-and-

forth dialogue. Never monopolize a discussion, or you may find yourself
stuck in a corner trying to figure out why others are walking a wide berth
around you.

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 2. Gossip – Never gossip. Not only is it bad form, if word ever got back to the
person you were talking about, you can pretty much be assured you’ll be
the subject of the next gossip session.

3. People’s names – Everyone has one, and most people appreciate your effort
to learn their names if you spend more than a minute or two talking with
them. This applies to social and business contacts.

4. Cell phones – In a nutshell, use your cell phone sparingly in public. No one
else wants to listen in on a private conversation or wait while you text
someone the latest Internet joke.

5. Email – Think before you hit “send.” Most electronic mail can never be
taken back.

6. Social media – Facebook, Twitter, and other social media are part of most
people’s lives. Remember that not only can your friends see what you post,
others can repost, copy, share, or retweet anything you put out there.

7. Rude questions – We have all gotten them. There are ways to deal with
them and not come across as snarky. If you are not sure how to answer a
rude question, do not say anything. Just smile and change the subject.

8. How to Graciously Change the Subject - There are times certain things
should not be discussed, and it is up to you to shift the conversation.

Table manners:

1. Basic table manners – Follow the basics that apply to almost every dining
situation. If having your elbows on the table makes it rock, take them off
the table. Put your napkin in your lap, use the flatware starting with the
one farthest from the plate, and don't talk with your mouth full.

2. Restaurant manners – Learn all about how to conduct yourself when dining
out. Arrive before your scheduled reservation, be polite to your server, keep
your voice at a conversational level, and be a generous tipper.

3. Formal dinner party – Know how to act at a formal dinner party, including
which utensils to use for each course. If you're ever in doubt about which
fork goes with each course, look to the host or hostess and follow them.

Business

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 Business is a funny animal. On the one hand, the bottom line is considered
the most important factor. However, if you get down to the nitty-gritty, most
people look at business etiquette and manners as essential to even get to the
bottom line. There is a social element to most offices, so observe protocol and
remember that your behavior will affect your future.

1. Business relationships – Knowing how to form and maintain business

relationships can provide job security and a healthy bottom line. It is a
good idea to limit personal conversations at the office on a need-to-know
basis. Be a good team player, and offer to assist coworkers if they need
help.

2. Proper attire – Know how to dress in any situation. If your office has casual
Fridays, do not dress like you are going to the beach. It is still a work
environment and should be treated with respect.

3. Getting ahead – Learn what is expected in order to get ahead in your

business. Show up on time, do a good job, and maintain a positive attitude.

4. Office cubicles – Cubicle-dwelling can be trying during the best of times.

Knowing how to work closely with others is essential for anyone in an
office. Be polite and respectful to those who work around you. Keep noise,
smells, and any other distractions to a minimum.

5. Shaking hands – A decent handshake can give someone a good first

impression, and we all know that you only have one shot at that.

6. Business gifts – It’s always fun to give someone a gift to celebrate a special
occasion, a promotion, or a job well done. Make sure your gift is
appropriate to the setting and occasion.

7. Acknowledge others – When someone comes up with a brilliant idea or

does something others need to know about, be the first to congratulate
him or her. Do this in meetings or in front of the boss to show that you are
a team player.

Etiquette:

1. Commuting – Know the proper rules of etiquette on buses, trains, and other
forms of public transportation. Keep your hands to yourself, don't stare at
others, and offer a seat to anyone who needs one.

2. Coffee Shop – Coffee shops are one of the most popular places to hang out,
so make it a pleasant experience for everyone.

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 3. In the air – Before heading to the airport, learn what is expected of air
travelers. Remember that you are still in a public space, so do not treat
your airplane seat as though it is a recliner in your living room.

4. Weddings – Show good manners while you help celebrate a couple’s union.

5. Funerals – Do not make a sad situation worse with bad manners. Learn
what is expected before, during, and after a funeral.

Post Learning Assessment:

1) Explain the basic principles of ethical standards.
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________

2) Discuss the sources of ethical standards.

________________________________________________________________________
________________________________________________________________________
________________________________________________________________________

3) What makes a decision ethical?

________________________________________________________________________
________________________________________________________________________
________________________________________________________________________

4) Explain what does this statement “Man has been called a rational being,
but rationality is a matter of choice” mean.
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________

5) What is social decorum, and what does it try to set up?

________________________________________________________________________
________________________________________________________________________
________________________________________________________________________

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References:

1. John Maxwell (2016). The 5 Levels of Leadership

https://www.johnmaxwell.com/blog/the-5-levels-of-leadership

2. David R. Kolzow (2014). LEADING FROM WITHIN:

Building Organizational Leadership Capacity
https://www.iedconline.org/clientuploads/Downloads/edrp/Leading

3. Darryl Plecas, et.al. (2018). The Essentials of Leadership in Government:

Understanding the Basics
https://cjr.ufv.ca/wp-content/uploads/2018/02/Essentials

4. The Art of Leadership

http://www.txcouncil.com/userfiles/file/The%20Art%20

5. Keith Grint (2005). Leadership: Limits and Possibilities,

Palgrave MacMillan

6. Ronald A Heifetz & Marty Linsky (2002). Leadership

on the Line: Staying Alive through the Dangers of Leading

7. Bill Hybels (2002). Courageous Leadership

8. Jo Owen (2017). The Leadership Skills Handbook

9. Jo Owen (2018). How to Lead: The definitive guide to effective leadership,

5th Edition

10. Dale Carnegie (1998). How to Win Friends & Influence People

11. Mason Carpenter, et.al. (2012). Management Principles

https://2012books.lardbucket.org/pdfs/management-principles

12. James McGrath, Bob Bates (2017). The Little Book of Big
Management Theories
https://www.perlego.com/book/500294/the-little-book-of-big

13. Abah E. Ojogwu (2017). Administrative And Management

Principles, Theories and Practice
https://Www.Researchgate.Net/Publication/317830043

14. S.K.Pokhriyal (2014) Management Theories: Principles and Practices

https://apps.aima.in/ejournal_new/articles

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15. Zhang, et.a.l (2015). Multi-Level Decision Making

16. Lu, et.al. (2012). Handbook on Decision Making

17. Republic Act No. 6713 - Code of Conduct and Ethical Standards for
Public Officials and Employees (1989).

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