Description of Module Food Technology Food Business Management

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1 Subject Name Paper Name Paper No. 14 Module Name/Title Module Id Description of Module Food Technology Food Business Management Organizational Leadership FT/FBM/09 Objectives To know about difference between leadership and management, different theories i.e. trait theory, behavioral, situational or contingency and transformational theory of leadership. Keywords leadership and management, trait, behavioral, contingency, transformationaltheory of leadership Organizational Leadership Leadership is the art or process of influencing people so that they strive willingly and enthusiastically toward the achievement of group goals. In other words, it is a dialectical, proactive process wherein an individual persuades others to do something they would not otherwise do. Ideally, the people should be encouraged to develop not only willingness to work but also willingness to work with zeal and confidence. 9.1 Leadership vs. Management Leadership and management are two different terms relating to two different aspects and functions within an organization. The difference between them is highlighted below: Management Maintain the status quo Create order and consistency Doing things right Transactional (contractual) relationships Leadership Create vision Create change or movement Doing the right thing Transformational relationships (psychological contract) To have a better understanding of both the terms, let us consider an example to know how management and leadership come into picture in a particular situation.

2 Situation Management Leadership Creating an Plans and budgets: Establishes detailed Establishes direction: Develops a agenda steps and time table for achieving set vision of the future and strategies for result and allocates the necessary achieving that vision. resources. Developing a network for achieving the agenda Executing the agenda Outcomes Organizes and staffs: Establishes structure for achieving the plans, assigns staff, delegates, develops policies to guide subordinates and design control system. Controls and solve problems: Monitors results against plans, identifies deviations and then organize to close any gaps. Produce a degree predictability and order. Has the potential to produce key results expected by stakeholders. Aligns people: Communicates direction and duties to all whose cooperation is needed so as to create teams and coalitions that understand the vision and strategies and accept their validity. Motivates and inspires: By satisfying basic human needs, energizes people to overcome barrier to change. Produces change often to a dramatic degree. Has the potential to produce extremely useful change Leadership Theories Attempts to explain and understand leadership have led to the formation of various leadership theories. There are 4 basic categories of theories, namely: trait theory, behavioral, situational or contingency and transformational theory. 9.2 Trait Theory of Leadership Leader stressed attributes Universal Traits Type I: Trait Theories Behaviours Type II: Ohio State Studies, Managerial grid, Mich. study Contingent Type III: Fiedler Type IV: Hersey- Blanch., Path- Goal, Vroom Prior to 1949, the leadership studies were mostly based on an attempt to identify the characteristic traits that leaders possess. Many studies of traits have been made by several researchers and these were identified by Ralph M. Stodgill as follows: Five physical traits (such as energy, appearance, height). Four intelligence and ability traits.

3 Sixteen personality traits (such as adaptability, aggressiveness,enthusiasm, and selfconfidence). Six task related characteristics (such as achievement drive, persistence, and initiative). Nine social characteristics (such as cooperativeness, interpersonal skills and administrative ability). More recently, additional traits have been identified like drive (including achievement, motivation, energy, ambition, initiative and tenacity); leadership motivation; honesty and integrity; self confidence (including emotional stability); cognitive ability; understanding of the business and job related knowledge. This theory lost much of its acceptability with the rise of the behaviorist school of psychology. 9.3 Behavioral theories This theory highlights what effective leaders do (how they delegate tasks, how well they communicate with their subordinates) rather than who effective leaders are. Different studies were conducted by several universities in this regard and these were: Iowa studies A researcher at the University of Iowa concentrated on three leadership styles: autocratic, democratic and laissez-faire. Autocratic style of leadership: A leader, who centralizes authority, dictates work methods, makes unilateral decisions, and limits employee participation. Democratic style of leadership: A leader who involves employees in decision making, delegate s authority, encourages participation in deciding work methods and goals, and uses feedback to coach employees. A democratic-consultative leader seeks input and hears the concerns and issues of employees but makes the final decision him or herself. A democratic-participative leader often allows employees to have a say in what s decided. Laissez-faire style of leadership: A leader who gives employees complete freedom to make decisions and to decide on work methods. All the above listed styles were evaluated and it was concluded that: i. The laissez-faire leadership style is ineffective. ii. The Quantity of work is equal under authoritarian and democratic leadership styles. iii. The Quality of work and satisfaction is higher under democratic leadership.

4 9.3.2 Continuum of Leader Behaviors The findings from the Iowa studies put the managers in a dilemma over which style to choose and therefore, Robert Tannenbaum and Warren H. Schmidt devised a continuum of leader behaviors which depicts various gradations of leadership behavior, ranging from the bosscentered approach to the subordinate-centered approach. According to Tannenbaum and Schmidt, a manager should consider their comfort level, the situation and the subordinate forces while deciding which leader behavior pattern to adopt. In the long run, the managers should attempt to move towards the subordinate centered end of the continuum as this leader behavior has the potential to improve decision making, teamwork, employee motivation and morale Michigan studies Research conducted in the University of Michigan confirmed the presence of two types of approaches. Employee oriented: A leader who emphasizes interpersonal relations, takes a personal interest in the needs of employees, and accepts individual differences.

5 Production oriented: A leader who emphasizes technical or task aspects of a job, is concerned mainly with accomplishing tasks, and regards group members as a means to accomplishing goals. In some cases, Production oriented approach resulted in higher output than employee oriented and therefore, no definite conclusions could be drawn as to which style should be followed Ohio State Studies Studies at Ohio University identified two dimensions of leadership behavior: initiating structure and consideration. Initiating Structure is the extent to which a leader defines his or her own role and those of subordinates so as to achieve organizational goals. Consideration is the degree of mutual trust between leader and his subordinates; how much the leader respects subordinates ideas and shows concerns for their feelings. This orientation of the leader causes him to be friendlier towards his subordinates, encourage participation in decision-making and maintain good two way communication. This two-dimensional approach is illustrated as under: High consideration Low consideration Low Initiating Structure High Initiating Structure This two dimensional approach led to the probability that a leader might be able to place emphasis on both task- and people- related issues.

6 9.3.6 Managerial Grid It was prepared by Robert Blake and Jane Mouton and emphasized that managerial behavior is a function of two variables: concern for people and concern for production. The grid shown below is used all over the world for training managers and for identifying various combinations of leadership styles. Leadership style 1,1: impoverished management i.e. there is low concern for people and low concern for tasks or production Leadership style 1, 9: Country Club Management i.e. high concern for people and low concern for production. Leadership style 9, 1: Authority Compliance Management i.e. high concern for production and low concern for people. Leadership style 5, 5: Middle of the road management i.e. equal amount of concern for both people and production. Leadership style 9, 9: Team Management i.e. high concern for both production as well as employee morale and satisfaction.

7 9.4 Situational/ Contingency Theories A large number of theories have been made on the premise that leadership is strongly affected by the situations in which the leader emerges, and in which he or she operates. These theories constitute the contingency approach to leadership. The popular theories are: Fiedler s Contingency approach to Leadership It states that effective group performance depends on the proper match between the leader s style of interacting with employees and the degree to which the situation gives control and influence to the leader It uses Least-preferred co-worker (LPC) questionnaire, to measure the leader s task or relationship orientation. It identified three situational criteria leader member relations, task structure, and position power that could be manipulated to match an inflexible leadership style. The findings of the Fiedler Contingency approach are depicted as follows:

8 9.4.2 Path Goal Theory The theory states that it is a leader s job to assist followers in attaining their goals and to provide the necessary direction and support. A leader s motivational behavior: Makes employee need satisfaction contingent on effective performance. Provides the coaching, guidance, support, and rewards that are necessary for effective performance. This theory assumes that the leader s style is flexible and can be changed to adapt to the situation at hand. The different types of leadership styles include: Directive leader: Lets the employees know what is expected of them, schedules work to be done, and gives specific guidance as to how to accomplish tasks. Supportive leader: Is friendly and shows concern for the needs of employees. Participative leader: Consults with employees and uses their suggestions before making a decision. Achievement-oriented leader: Sets challenging goals and expects employees to perform at their highest levels. The path goal theory suggests that these four styles are used by the same leader in different situations.

9 9.4.3 Vroom-Yetton Model Vroom-Yetton Model provided a sequential set of rules for determining the form and amount of participation a leader should exercise in decision making according to different types of situations.the model was a decision tree incorporating seven contingencies (whose relevance could be identified by making yes or no choices) and five alternative leader ship styles which are: AI (Autocratic I) Leader makes decision alone AII (Autocratic II) Leader obtains information from subordinates, then makes decision alone CI (Consultative I) Leader obtains suggestions from subordinates individually, then makes decision alone. CII (Consultative II) Leader obtains suggestions from subordinates collectively, then makes decision alone. G II (Group II) Decision by group consensus Hersey and Blanchard s Situational Leadership Model It is based on the premise that leaders need to alter their behaviors depending on a major situational factor- the readiness of the followers i.e. their willingness to accept responsibility of the task. Hersey and Blanchard believe that the relationship between a leader and a follower moves through four phases as followers develop over time.

10 First Phase: The manager must spell out duties and responsibilities clearly for the group. Second Phase: the leader, at this stage, needs to improve the relationship behavior as the new employees are not very familiar with the way the organization functions. Third Phase: at this stage, the employees become more capable of handling responsibility and therefore the leaders can rest and reduce the amount of support and encouragement. Fourth Phase: The followers no longer need direction from their managers and can take their own decisions. 9.5 Transformational Leadership Theory It describes the leaders who inspire followers to transcend their own self-interests for the good of the organization and are capable of having a profound and extraordinary effect on followers. A transformational leader displays the following attributes: I. Charismatic Leadership People working for charismatic leaders are motivated to exert extra work effort and, because they like and respect their leaders, express greater satisfaction. The key characteristics of a charismatic leader are: a. Self-confidence b. Vision c. Ability to articulate the vision d. Strong convictions e. Behavior that is out of the ordinary f. Appearance g. Environmental sensitivity II. Intellectual Stimulation (offering new ideas to stimulate followers) The ability to create and articulate a realistic, credible, attractive vision of the future that grows out of and improves upon the present The other approaches to leadership such as behavioral or situational approaches typically focus on transactional leadership (Transactional leaders are those who guide or motivate their followers toward established goals by clarifying role and task requirements)

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