Chapter 17

Leadership
Meaning
A leader is a person who guides and directs others, called followers. He gives
focus to the efforts of his followers. The manager, as a leader, influences his
subordinates to indulge in such activities as are vital for the accomplishment of
the enterprise goal. According to Allen, "a leader is one who guides and directs
other people. He must give effective direction and purpose".
Leadership is a force that binds a group together and motivates it towards the
desired goals.
Definitions of Leadership
Given below are some of the important definitions of leadership:
1. Leadership is the ability of a manager to induce subordinates to work with
confidence and zeal - Koontz and O'Donnell.
2. Leadership is the ability of a superior to influence the behaviour of his
subordinates and persuade them to follow a particular course of action -
Chester Barnard.
3. Leadership is the activity of influencing people to strive willingly for
mutual objectives -• George R. Terry.
4. Leadership is the process by which an executive imaginatively directs,
guides and influences the work of others in choosing and attaining
specified goals - Theo Haimann.
5. Leadership is a process of influence on a group in a particular situation at
a given point of time and in a specific set of circumstances that stimulates
people to strive willingly to attain organisational objectives - James
Gibbon.
It is clear from the above definitions that leadership is the act of guiding
and directing the subordinates in order to attain the desired goal.
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17.2
Nature and Characteristics of Leadership
The following are the characteristics of leadership:
1. // Is the personal quality of a person - Leadership, to a considerable
extent, is an in-born or an inherent quality of a person. It is also possible
to train a person to acquire leadership qualities. It is the potentials of the
manager that determine his ability to guide, direct and co-ordinate the
activities of his subordinates.
2. // is a process of influencing others - Leadership is a process of influencing
others to act. In an enterprise, the manager has to get things done by his
subordinates. For this, he has to influence their beliefs, behaviour and
attitudes. The success of leadership lies in the willingness of the
subordinates to comply with the directions of the manager.
3. // requires the confidence of followers/subordinates — To be accepted as
a leader, the manager must gain the confidence of his subordinates. For
this, he must be very knowledgeable, sincere and committed to his work.
He must be a role model for his subordinates. He must have certain beliefs
and values.
4. It requires motivation of subordinates — The leader is expected to motivate
or induce his subordinates to work. By giving directions, orders and
instructions alone, the manager may not be able to get things done. He
has to suitably motivate the subordinates to put in efforts. Motivation
need not always be in the form of offering certain monetary benefits. Even
a word of appreciation may induce the subordinates to work hard.
5. Varying leadership styles — The styles of leadership vary from person to
person. Some managers are, by nature, democratic leaders while there are
others who may follow the autocratic style of leadership.
6. Leadership is a continuous process - The presence of a leader is always
necessary in an organisation. The subordinates need to be guided,
influenced, controlled and induced to work continuously for the attainment
of the organisational goal.
Importance of Leadership Leadership is important in view of the
following reasons:
1. To have team work - Leadership makes it possible for the employees to
forget their individual differences and work as a team for the attainment of
the organisational objective. It develops co-operation and friendliness
among the staff.
?. To guide - Although the subordinates have potentials, they need to be
properly guided to contribute their best. The leader knows how to get
optimum performance from each of the subordinates working under him.
17.3 Principles of Management
3. To motivate - Leadership is necessary to induce the subordinates to put
in greater efforts. The leader constantly motivates his subordinates to
work for achieving the organisational goal.
4. To bring about changes- Any organisation has to be dynamic to accept
changes caused by political, economic, technological and scientific factors.
The leader of the enterprise knows how to bring about such changes in
his organisation by getting the consent of the subordinate staff.
5. To handle crisis - Leadership is essential for handling crisis of any kind.
When an organisation faces a critical situation, the leader knows how to
come out of it. The leader should be good at what is called 'crisis
management'.
Distinction between a Leader and a Manager
The points of distinction between a leader and a manager may be tabulated as
follows:
Leader Manager

1. A person becomes a leader by 1. A person becomes a manager

virtue of his personal qualities. 2. A by virtue of his official authority. 2. A
leader has followers. 3. The manager has subordinates. 3. The
relationship between a leader and his relationship between a manager
followers is generally informal. 4. A and his subordinates is formal. 4. A
leader may strive for personal goal. 5. manager has to strive to attain the
Leadership is part of management. A organisational goal. 5.
person with leadership qualities may Management is not a part of
not always be a manager of an leadership. A manager is a leader in
enterprise. 6. Leadership qualities view of his formal authority.
6. Managerial qual ities are acqu ired.
are to a greater extent inherent or in-
born. 7. Leadership is possible both 7. Management is possible only in
in formal and informal groups. a formal structure.

*
Leadership

17.4
Qualities of a Leader
To be a successful leader, a person is expected to possess the following
qualities:
1. Ability to analyse — The leader must be able to analyse any problem and
offer an immediate solution. He should be alert mentally.
2. Emotional stability — The leader must not make decisions influenced by
emotions. He has to approach any problem intellectually and find a
solution.
3. Self-confidence - A person cannot be a successful leader if he lacks self-
confidence. If he has confidence in himself, he will be able to overcome
resistance from anyone for his proposals.
4. Foresight - The leader must foresee what is likely to happen. He must be
able to visualise the future events and prepare his followers to meet
challenges.
5. Sense ofjudgement-The leader mnsXbe able to judge what is good under
the given circumstances. Only then he will be able to evolve certain
practical decisions.
6. Understanding. - The leader must not always thrust his views on his
followers. He must also listen to their viewpoints particularly while making
decision in a critical situation.
7. Mental courage - The leader must be capable of takin; certain hold
decisions. For this he must have mental courage. He need not play safe
by just endorsing the decisions of others.
8. Capacity to motivate - Needless to say, the leader must be able to induce
and motivate his followers to work for the mission he has undertaken.
9. Ability to guide -The leader will be able to guide his followers in the
work process only if he himself is well versed in the actual work.
10. Communication skills - Successful leaders are always known for the
communication skills. Such skills are essential to direct the followers to
work for attaining the desired goal. Moreover, the leader will always be
able to defend himself if he possesses good communication ability.
11. Sociability - The leader should not be indifferent to the needs of his
followers. As his followers work wholeheartedly for fulfillingjiis mission,
the leader has the duty to reciprocate. If any follower has certain personal
problems, the leader must do his best to help him. The leader must make
himself accessible to his followers.
12. Sound physical health - The leader must possess robust physical health.
Mental health, no doubt, is important, physical health is equally important.
If only the leader has sound physical health, he will be able td work for his
mission with endurance. He will be able to travel extensively and also
speak for hours only if he has good physical health.
17.5 Principles of Management
13. Practising what is preached-The leader must be a person who practises
what he preaches. He can talk of commitment to work only if he himself is
committed to work. He can talk of honesty if only he is honest in his
dealings.
14. Ambitious — The leader must always be an ambitious person. Only then
his subordinates will be able to work with enthusiasm. He must always
have some novel plans to make things interesting for the followers.
15. Positive thinking - Last and not the least, the leader must be an optimist.
He must always have a positive attitude towards his work. Only then he
will be able to instil such a feeling in his followers.
Functions of a Leader
The following are the important functions of a leader:
1. Planning - He has to prepare suitable plans for the effective functioning
of his group/organisation. Planning enables his followers to work for the
attainment of the desired goal in a systematic manner.
2. Policy-making — The leader has to evolve suitable policies that guide his
group in arriving at decisions. Once he makes known to the followers the
fundamental policies, the stand of the group on certain matters will become
clear to everyone concerned. For example, the leader may evolve a policy
of favouring 'merit' in matters pertaining to selection of candidates to
various posts.
3. Execution of plans and policies - Preparing plans and formulating policies
by itself will not serve any purpose. What is actually important is execution.
The leader has to instigate his followers to work in accordance with the
plans and policies in order to achieve the desired goal.
4. Controlling internal relations - The leader has to ensure that there is
cordial relations among his group members and that they work in an
atmosphere of proper co-operation and co-ordination. If there there is
any misunderstanding among his followers, the leader must do his best to
set it right. He must always ensure that his followers repose faith in his
leadership.
5. Representing the group - The leader has to represent his group both
within and outside the organisation and convey the feelings, sentiments
and the stand of his group on important issues.
6. Providing reward and punishment — If any subordinate has performed
his task well and is sincere and committed to work, the leader shall reward
such a person suitably. It may be done by offering certain tangible or
intangible benefits. If, on the other hand, a subordinate is found to be
insincere and shirking duties, the leader has to initiate disciplinary action
against him.
Leadership

17.6
7. Settlement of disputes - The leader has the duty to amicably settle any
dispute between him and his group members and also among the group
members. He can always use his position to resolve any crisis.
8. Role-model - The leader must set an example to his followers. He must
practise what he preaches. He must say what he does and do what he
says. He must be such a person that his followers always want to emulate
him.
9. Inseparable from the group - The leader must so lead his followers that
he and his group must be considered as one and the same. He must be
seen as a symbol of the group.
10. Answerability - The leader becomes accountable or answerable not only
for his actions but also for those of his followers.
11- Adherence to Value system — The leader must have certain values and
beliefs and must adhere and also make his followers adhere to the same.
Different kinds of Leadership Styles
The following are the different kinds of leadership styles that have been
identified;
(0 Autocratic
G Democratic
O
(iii)Laissez Faire
(iv) Functional
(v) Institutional and
(vi) Paternalistic
Let us discuss each
Autocratic Leader
An autocratic leader wants his subordinates to work in the manner he wants.
He tells them what they should do, where, when and how. He does not let his
followers offer any suggestion. He specifies the goal, makes available the resources
that he thinks are enough and sets the deadline within which the subordinates
will have to complete the task. The subordinates have to report to him at regular
intervals to show the progress of work.
The autocratic leader thinks that his followers are incapable of making
decisions. To secure performance from his subordinates, he may use coercive
power. A subordinate, who performs as per the specifications of the leader, is
rewarded while the one who fails to perform is punished. The punishment may be
in the form of fines, suspension, transfer, demotion or dismissal.
 17 7 . Principles of Management
The autocratic leader does not have confidence in his subordinates. He thinks
that they are basically lazy, have an inherent dislike for work and are not ambitious
and creative.
The pros and cons of autocratic leadership style may be stated as follows:
Merits
1. Such a leadership style is suitable when subordinates are basically lazy
and shirking duties.
2. It helps to make quick decisions as decision-making is the prerogative of
the leader alone.
3. As subordinates are under constant threat of disciplinary action, they are
always cautious.
4. Inefficient and insincere workers can easily be identified and removed
from service.
Demerits
1. Subordinates normally show resistance to this type of leadership style as
it curtails their freedom to act.
2. It kills initiative for work and results in frustration among workers.
3. It often gives scope for conflicts between the leader and his followers
which is bad for the organisation.
4. At some stage, the subordinates may stop obeying the orders of the
leader and start showing their protest. If such a stage is reached, the
leader will become helpless.
Democratic Leader
Such a style of leadership is also known as 'participative leadership'.
A democratic leader does not make unilateral or one-sided decisions. He provides
scope for his followers to participate in the decision-making process. He allows
his subordinates to discuss the problem and put forth their views freely. The final
decision will be made based on the consensus of all. If any subordinate does
anything that is opposed to the interests of the group, the other members of the
group take the initiative to correct him.
Democratic leadership is based on the assumption that the followers are all
capable. ,
The merits and demerits of democratic leadership are as follows:
Merits
1. As the followers are able to participate in the decision-making process,
they feel motivated.
2. The decision finally made is mutually acceptable. The followers, therefore,
work for its implementation wholeheartedly.
Leadership "
17.8
3. There is no resistance from the subordinates.
4. It improves the job attitudes of the subordinate staff.
5. As the subordinates do not have ill-feelings of any kind, the labour-
management relationship is bound to improve.
Demerits
1. There may be delay in arriving at a decision, as consensus among the
individuals is necessary.
2. Democratic leadership is suitable only if the subordinates are all capable
of making worthwhile suggestions. If they are less efficient and prefer to
work as per the leader's directions, participative leadership will not serve
the purpose.
3. It may, sometimes, be very difficult to evolve a solution that is acceptable
to everyone.
Laissez Faire Leader
The dictionary meaning of laissez faire is policy of non-interference. Also
known as a 'free rein leader', a laissez faire leader gives full freedom to his followers
to act. He does not lay down guidelines within which his followers have to work.
He neither influences the subordinates' decisions nor does he interfere in the
process of decision-making. The laissez faire leader does not exercise the formal
authority of a leader. The merits and demerits of such a kind of leadership style
may be given as follows:
Merits
1. Obviously, as the subordinates have full freedom to act, their level of
motivation is bound to be very high.
2. Those subordinates, who are highly efficient, can make use of the freedom
given to them to excel.
3. The superior-subordinate relationship is bound to be very good.
Demerits
1. The laissez faire leadership style will produce good results only if the
subordinates are all highly efficient and capable of doing their work
independently.
2. As the leader does not involve himself at all in the activities of his
subordinates, control may become difficult.
3. The leader does not exercise his formal authority. As a result, the work
place may lose its official character.
4. The subordinates are deprived of the expert advice and moral support of
their leader.
17.9 Principles of Management
Functional Leader
A functional leader is one who is an expert in a particular field of activity. He
has risen to the position of a leader by virtue of certain special skills that he
possesses. He does not command any formal authority. Such a leader always
thinks of the task he has undertaken and spends most of his time finding out
ways and means of doing it better.
The functional leader will be able to offer help to his subordinates provided
the subordinates approach him for certain genuine job related problems. The
leader expects the subordinates to perform to his level and if the followers are not
very serious about their work, he may demand performance. If the subordinates
are sincere and committed as their leader is, they will be able to utilise his potentials
to the fullest extent. This will benefit the subordinates and the organisation as
well.
The pros and cons of functional leadership style are given below.
Merits
1. The very presence of an expert or a functional leader is beneficial to the
followers and the organisation.
2. As the functional leader is a specialist in a particular field of activity, the
subordinates can certainly enrich their job knowledge and skill, provided
they are as committed and sincere as their leader is.
Demerits
1. The functional leader is a taskmaster. He only believes in work. If only the
subordinate is very efficient, he will be able to put up with such a leader,
2. The functional leader will not be able to go down to the level of an average
worker and offer any help.
3. The leader may, sometimes, demand performance from his followers. This
may frustrate them.
4. Misunderstandings may also arise between the leader and his followers.
Institutional Leader
An institutional leader is one who has become a leader by virtue of his official
position in Jhe organisational hierarchy. For example, a person appointed as the
General Manger of a concern.
An institutional leader may not be an expert in his field of activity. He, therefore,
may not be able to provide expert guidance to his followers. But he has to secure
performance from them. He may, therefore, become demanding and thereby incut
the displeasure of his subordinates.
The merits and demerits of the institutional leadership style may be stated as
follows: I
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17.10
Merits
1. He has official authority to act.
2 He can demand performance from subordinates irrespective of his own
credentials and the subordinates are officially answerable to him. He may
initiate action against a subordinate who is shirking duties.
Demerits
1. As the institutional leader may not be an expert in his field of activity, he
will not be in a position to offer proper guidance to his followers.
2. Although the leader has the official right to demand performance from his
followers, he may not have the moral right, as his own credentials are less.
Paternalistic Leader
A paternalistic leader takes care of his followers in the way the head of a
family takes care of the family members. He is mainly concerned with the well
-being of his followers and is always ready to protect them. He may provide them
with all the physical amenities needed. But he will not be able to guide them to
perform their job well.
Thus, the paternalistic leader is able to be sociable but is not able to offer
intellectual help. The following are the merits and demerits of the paternalistic
leadership style:
Merits
1. He assumes a paternal role to protect his followers.
2. He is always ready to provide the necessary physical amenities to the
subordinates.
Demerits
1. He is not in a position to offer intellectual help to his followers.
2. Those followers, who are capable and achievement-oriented, do feel
frustrated, as the leader is not able to guide them to enrich their job
knowledge and skill.
Theories on Leadership
Research studies were conducted in the past to ascertain the emergence of
leadership. The researchers wanted to find out the determinants of leadership.
Three such determinants were studied, namely, the personality of the leader, his
behaviour and the situation. As a result, the following three theories came to be
developed:
(i) The Traits Theory,
(ii) The Behavioural Theory and
(iii) The Situational Theory.
Let us now discuss these theories.
17.11 Principles of Management
The Traits Theory
This theory is based on the assumption that a leader is a person who possesses
certain exceptional traits or qualities. Many such traits or qualities were identified.
Those, who were successful leaders in the past, were found to be having all such
traits. These are: (i) Intellige
(i) Intelligence Knowledge
(in) Communication skills (iv) Initiative
(v) Judgement (vi) Sincerity
(vii) Inquisitiveness (viii) Endurance
(ix) Integrity (x) Determination
(xQ Emotional stability (xii) Mental ability
(xiii) Imagination (xiv) Persuasion
(XV) Courage (xvi) Physical appearance

(in) Commui
(v) Judgemi
(vii) Inquisit
(ix) Integrity
(M) Emotion
(xiii) Imagina
(xv) Courage
A person with these qualities can certainly emerge as a successful leader.
These qualities need not always be inborn. These can be acquired through
proper training.
Evaluation of the Traits Theory
Merits
The following are the merits of the traits theory: 1.
It is simple to understand.
2. It makes it clear that a person who lacks certain qualities cannot be a
successful leader.
3. It guides management to develop leadership qualities of the staff through
proper training.
Demerits
The traits theory suffers from the following limitations:
1. It gives undue importance to the traits of a person. Many persons have
become leaders in politics and in such other spheres without possessing
most of the qualities highlighted by the theory.
2. If a person with the traits mentioned in the theory can become a leader,
there are many with such traits who have not become leaders.
3. The theory ignores the fact that a person may emerge as a leader due to a
particular situation. For example, when the leader of a political party dies,
someone from his family may takeover the party leadership.
4. The extent of certain personal qualities - intelligence, knowledge,
communication skills, etc., present in a person is sometimes more important
for leadership about which nothing is said in the theory.
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17.12
The Behavioural Theory
According to this theory, leadership depends more on the acts of a person
than on his personality traits. The behaviour of a person attracts many followers
towards him. These followers are ready to accept him as their leader as they are
influenced and impressed by his behaviour. The interaction between the leader,
the followers, the goals and the environment will bring out the right behaviour.
Certain leadership acts are favourable while others may be unfavourable. The
unfavourable acts are the outcome of the inability of a leader to accept the views
of his subordinates or his tendency to thrust his views on them and so on.
If the leader is able to give his followers what they want, he will be successful.
Evaluation of the Behavioural Theory
The behavioural theory is superior to the traits theory in so far as it gives
utmost importance to what the leader does rather than what he is. But its main
drawback is that it is not possible to determine the kind of behaviour that will be
ideal under all circumstances. A behaviour that is effective at a particular point of
time may not be so always.
Situational Theory
According to this theory, leadership is much influenced by the environment
or the situation in which it is exercised. The style of leadership should change
according to the situation. It, therefore, becomes clear that there is no particular
style of leadership that can be universally relevant. The leader, in order to be
successful, should adapt himself to the situation.
Three major situational variables are found to influence the leader's
effectiveness. They are:
(i) The leader-subordinate relationship,
(ii) The nature of the task of the subordinate and
(iii) The ability of the leader to influence the subordinates.
If the relationship between the leader and his subordinates is good, the leader
will be able to exercise influence. The same is true if the task to be accomplished
by the subordinate is easy for him. Above all, the leader himself must be in a
position to influence subordinates through his power. Thus, whether a given
situation is favourable for the leader or not is influenced by these three variables.
Evaluation of the Situational Theory
The theory considers the situation, in which the leader operates, as a key
factor determining success. Even if the leader has all the personality traits
necessary to excel, the environment should be conducive. Only then he will be
able to influence his followers. The theory also makes it clear that the same style
of leadership will not work in different situations.
17.13 Principles of Management
Applying the situational theory to practical work situations may be difficult.
Studying the environment each time and adapting to its needs may not always be
possible. A leader may find it difficult to change his style of leadership.
Review Questions
SECTION A
1. Define leadership.
2. What is laissez faire leadership?
3. Who is a functional leader?
4. Write a note on paternalistic leadership.
SECTION B
1. Explain the characteristics of leadership.
2. State the importance of leadership.
3. Distinguish a leader from a manager.
4. Bring out the salient features of autocratic leadership style.
5. Explain the 'traits theory' of leadership.
SECTION C
1. Discuss the qualities of a leader.
2. Explain the functions performed by a leader.
3. Discuss the different kinds of leadership styles with their relative merits and demerits.