Page 293 - Introduction to Business

CHAPTER 7 Motivating and Leading Employees 267

complex and operate in a disorderly environment. An leadership style is obviously the strong participation of
external event can shock a stable business environment all concerned, the drawback is the likely slowdown of
and lead to chaos in the short term, which can impact the decision-making process. In the free-rein style of
the organization. Leaders in this chaotic world are management, employees are given complete freedom
called on to manage their organizations through to perform their jobs the way they want within the
predetermined governing principles that emphasize framework of company rules and regulations.
vision, values, and organizational beliefs. When crises Management informs the employees or employee
occur, effective leadership is exercised by enforcing teams on what is expected of them and when. Then it is
agreed-on corporate governing principles, which left to the employees to decide on how they want to
should then lead to acceptable solutions. perform their jobs to meet corporate goals.
The FT/PwC report on the world’s most respected
companies clearly shows that for corporate success, an
LEARNING OBJECTIVE 10
honest, nonconformity style of management is
Identify how leadership impacts corporate success, preferred to conventional management styles. This is
and critically discuss the various leadership styles primarily for two reasons. First is the attitude of the
used today.
employees or subordinates to the three leadership
Leaders are admired precisely because of their adaptive styles. Second is from the manager’s perspective. Each
capacity, the way they react to the individual conventional management style has its own strengths
circumstances of their companies, their industries, and and weaknesses. Most managers like to make the
the global economy. Leadership style is the behavior decision-making process short, so they can implement
that managers exhibit when dealing with their their plans quickly to achieve corporate goals. The
employees and professional staff. It is influenced by the autocratic leadership style offers speed in decision
character of the managers as well as the circumstances making at the expense of employee participation, and
of the company that is being managed. the reverse is the case with the participative leadership
In general, leadership styles fall within a spectrum style. The drawback of the free-rein leadership style is
that ranges from autocratic style at one end to free-rein that the number of companies where it can be used
style on the other, with participative, or democratic, may not be large. Studies have shown that leadership
style falling in between. An autocratic style of style has to be flexible, since the reaction to certain
leadership is a top-down approach to management policies or incentives in one company may not give
with decisions made by the top manager with little similar results elsewhere, especially internationally. A
input from subordinates. Autocratic leaders do not single company operating internationally may have to
tolerate dissent and rarely seek employee participation adopt different management styles in different
in the decision-making process. A purely democratic countries. The contingency approach to leadership
style of leadership is practiced in only a few types of accepts the fact that companies cannot use a “one size
organizations, most of which are professional. fits all” approach to management given the complex
Management receives input from its members and business environments in which they operate.
major policies are accepted for implementation on the Management styles need to be adapted to the specific
basis of majority vote. While the advantage of such a circumstances of the organization.

Chapter Questions 4. What are Theory X and Theory Y? What do you fall
under, and why?
1. What is motivation? Why do managers spend so 5. Type Z firms are a hybrid of Type A and Type J
much time designing different types of employee firms. What type of firm would you rather manage,
motivation programs? and why? Substantiate your case fully.
2. Is the scientific management theory of motivation 6. Why are expectancy, equity, and reinforcement
a thing of the past? Why? If it is not a theory of the theories called contemporary motivation theories?
past, give two examples, one domestic and the Which of these theories appeals to you most, and
other international, where scientific management why?
is currently used. 7. Compare MBO and participative management.
3. What is Maslow’s hierarchy of needs? Do you agree Which would you prefer, and why? Identify a
with his study? Is the hierarchy of needs universally company that fits into each category and explain
applicable? fully.

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