Authority and power

Authority relationships, whether horizontal or vertical, are the factors that

make organization possible and facilitate departmental activities providing
coordination and harmony to the enterprise. It is possible to make a clear
distinction between the concepts of authority and power: power is the ability
of an individual or groups to induce or influence the beliefs or actions of other
persons or groups while authority in organization is the right in a position to
exercise discretion in making decisions affecting others. In order to avoid
conflicts among the employees within the organization, authority is shown in
the organizational chart (formal organization). On the other hand power is not
detectable in the organization chart (informal organization). Obviously these
two key powers run in parallel: usually in fact the higher the position, the
higher the level of power. There are different bases of power:
- Legitimate power normally arises from position and derives from our
cultural system of rights, whereby a position is accepted by people as being
legitimate
- The power of expertness refers to the power of knowledge: the expertness
of a person may have considerable influence on others because respected for
its/their specialized knowledge.
- Referent power refers to the influence that people or groups may exercise
because people believe in them and in their ideas even if they have little or no
legitimate power.
- Reward power refers to the power to grant or withhold rewards.
- Coercive power normally arises from legitimate power and refers to the
power to punish. This power is the of opposite of the reward power.
Empowerment
Empowerment means that employees, managers, or teams at all levels in the
organization are given the power to make decisions without asking their
superiors for permission. Therefore empowerment of subordinates means that
superiors have to share their authority and power with such subordinates. In
order to be effective and sincere, empowerment shall be given to competent
people and should be based on mutual trust: the employees hold relevant
information regarding the firm while the firm strongly believes on the capacity
of the employees empowered. The concept of empowerment is strictly
connected to the idea of delegation and implies that the employees and teams
accept direct responsibility for their actions and tasks. The increasing interest
in empowerment is due in part to the need to respond quickly to the demands
and expectations of customers, to establish a better-educated workforce and to
the rise in global-competiveness. Empowerment has negative and positive
aspects: negative aspects regard accountability issues; thus the difficulty
that may arise in the control process directed to ensure that activities are being
carried out with efficiency and effectiveness. Positive aspects of
empowerment include time saving (no need to ask for permission) and
enhancement of creativity through the freedom to test experiments given to
employees (characterizes the R&D department).
Line/staff concepts and functional authority
Line authority is that relationship in which a superior exercises directs
supervision over a subordinate. Line authority therefore gives to a superior a
line of authority over a subordinate and it is present in all the organizations.
Line authority can be either direct, between top managers or middle managers,
or indirect that refers to the circumstance in which the lower level does not
report to the top-level manager. The clearer the line of authority form the

ultimate management position to every position, the clearer will be the

responsibility for decision-making and the more effective will be the
organizational communication (scalar principle). The person who is
subordinate to its superior has to report its activities to the latter due to the
hierarchical relationships within all the organizations.
On the other hand staff relationship is advisory: the function of people in a
pure staff capacity is to investigate, research and give advice to line managers.
Functional authority is the right delegated to an individual or a department
to control specified processes, practices policies or other matters relating to
activities undertaken by persons in other departments.
In conclusion the kinds of authority relationships, such as line, staff and
functional authority emphasizes the dispersion of authority in the organization.
Such concepts are strictly connected with the concept of decentralization of
authority.
Decentralization of authority
Decentralization is the tendency to disperse decision-making authority in an
organized structure. It is important to underline that absolute centralization
and decentralization are not present in any kind of organization because, in
both cases, a situation of no structured organization would arise.
Decentralization requires careful selection of which decisions to push down
the organization and which to hold near the top, specific policy-making, to
guide the decision-making process, proper selection and training of people
who will be empowered and an adequate overall control.
Delegation of authority
Authority is delegated when a superior gives to a subordinate discretion to
make decisions. Clearly, superiors cannot delegate authority they do not have
whether their role in the organization. The process of delegation involves:
- Determining the results expected from a position.
- Assigning tasks to the position.
- Delegating authority for accomplish such tasks
- Holding the person in that position responsible for the accomplishment of the
task.
Being delegated means also to be required to accept responsibility for
decisions, actions and accomplishment of the goals. In such matter power
should be equal to responsibility. If power is greater that responsibility, could
result in autocratic behaviour of the person who is not held accountable for its
actions. On the other hand if responsibility is greater than power, could result
in frustration because the person has not the necessary power to carry out the
tasks for which is responsible. Most of failure cases of delegation are not due
to insufficient knowledge of fundamental concepts but because superiors are
unable or unwilling to apply them. Thus, failure of delegation is due to personal
attitudes. In order to have successful delegation, the superior, giving the right
of discretion to a subordinate, must be receptive: It has in fact to show
willingness to listen, accept or give a chance to other persons ideas,
suggestions etc. A manager in order to delegate authority effectively must be
willing to release the right to make decisions to subordinates, must allow to
make certain mistakes (costs deriving from mistakes must be considered as
investment in personal development), must trust the subordinate, must
establish and use broad controls (to assure that the authority given is
being used to support the enterprise or departmental goals, policies and plans)
and finally establish proper controls (the delegator is responsible of the
delegated subordinates actions, decisions and tasks). Another fundamental

requisite to establish an effective system of delegation is the presence of open

lines of communication, characterized by a free flow of information
between the delegator and the subordinate.
Centralization of authority
Centralization is the systematic and consistent reservation of authority at a
certain point of the organization (top level). Thus all the decisions and actions
of any level need the approval of the persons who have full authority and
power. There are different kinds of centralization:
Centralization of performance (geographic concentration), departmental
centralization (concentration of specialized activities in departments) and
centralization of management (tendency to restrict delegation of authority).
Recentralization refers to the centralization of authority that was once
decentralized. Usually it is not a complete reversal of decentralization, as the
authority delegated is not completely withdrawn.
Human resource management and selection
People are probably the most important asset in almost any organization.
Nevertheless the human asset is never shown on the balance sheet as a
distinct category, even though a great amount of money is invested in the
recruitment, selection and training.
Staffing
The function of staffing is defined as filling and keeping filled positions in the
organization structure. Moreover staffing is closely linked to organizing, that is,
the setting up of intentional structures of roles and positions. Managers have
the task to fill the positions in their organization and to keep them filled with
qualified people. Staffing is a crucial function of managers that may determine
the success or failure of the enterprise and which affects leading and
controlling: proper staffing in fact facilitates leading and controlling.
Need for managers
The need for managers is determined by many factors such the organizational
plans, difficulty of tasks and size. Moreover present and projected organization
structures determine number and kinds of managers and employees required
to carried out the performance effectively. Inability to meet the demand for the
managers needed may influence the growing process and the overall
performance. Such demands are compared with the available talent through
the management inventory which is an inventory chart of a unit with
managerial positions indicated. On the basis of the demand analysis, external
and internal sources are utilized in the processes of recruitment, selection,
placement, promotion and separation. Other essential aspects of staffing are
appraisal (performance evaluation), career strategy (approach to developing
employees strengths and skills trying to overcome weaknesses) and training
and development of managers.
After the need for managerial personnel has been determined, a number of
candidates have to be recruited. The recruitment process involves
attracting qualified candidates to fill organizational roles. From such
candidates, managers or potential managers are selected: selection is the
process of choosing from among the candidates the most suitable ones. The
selection process is carried out to permit an effective placement that shall
allow managers to utilize their personal strengths and overcome their
weaknesses. With the term promotion, we refer to the process of placing a
manager already within the organization in a new position, which normally
involves more responsibility.

External and internal forces

Staffing requires an open system approach that interacts with both the internal
and the external environment. External and internal forces affect the process of
staffing. Internal factors include the organizational goals and tasks, the
organizational structure, the demand and supply of managers within the
enterprise, policies and the reward system. On the other hand external factors
include the level of education, economical conditions, the legal-political and
social cultural dimensions and the demand and supply of managers outside the
enterprise. All this factors must be taken into account to maximize the human
resources benefits.
Common aspects regarding staffing
There are common aspects, connected either to ethical or law reasons, which
are usually present in all the organizations. For example organizations, while
carrying out the staffing function have to provide equal employment
opportunities that prohibit employment practices that discriminate on the basis
of race, color, religion, national origin, sex. In such matter is important to
mention that women, in the last decade, have made significant progress in
obtaining responsible positions in organizations. Moreover most of the
organizations today present a deep diversity in the workplace. Diversity in the
work place has several advantages that include different perspectives to
management and non-management issues, learning to tolerate different views
and accepting that everyone is different.
Staffing in the international environment
Companies have 3 sources for staffing the positions in international operations:
(1) Managers from the home country of the firm, (2) managers from the host
country and (3) managers from third countries. Managers are often selected
from the home country because they have familiarity with products, personnel,
enterprise goals and policies and so on. Moreover managers of the home
country of the firm may be unfamiliar with the language or the environment of
the foreign country. It is important also to point out its usually more expensive
to send managers and their families abroad with the possibility that the
families find it difficult to settle in. Managers who are host-country nationals
speak the local language and are familiar with the countrys environment.
Employing them is generally less costly and it may not require relocating them
and their families. The problem is that those managers may not be familiar
with the firms products and operations making control more difficult. Mangers
from third countries are usually international career managers.
Skills needed in managers
To be effective managers they need to have various skills: technical, human,
conceptual and design. The importance of each skill depends on the relative
level within the organization. Moreover managers must be able to identify
problems, analyze complex situation and by solving the problems encountered,
exploit the opportunities presented. Moreover managers have to desire to
manage, have the ability to communicate with empathy, behave in accordance
to ethical standards and have past experiences as a manager.
Personality Variables
As we know, each and everyone of us has personal characteristics, attitudes,
skills, intelligence, knowledge, experience etc. However a manager must have
strong personality that has to be enough in order to lead subordinates in a
proper way. According to several studies about personal characteristics of

CEOs, emerged that narcissism is the most common. Narcissism people are
those who particularly admire their own attributes. Since they have self-views
and believe to have superior abilities has been proved that take care of their
organization and that are extremely concerned with the self-improvement.
Job Design
People spend a great deal of time working, and it is therefore important to
design jobs that individuals like and at the same time that contribute to the
overall mission of the organization
Selecting a manager effectively requires a clear understanding of the nature
and purpose of the position that has to be filled. The job must be designed to
meet organizational and individual needs as well. Other factors to consider are
the skills required (vary with the level in the organizational hierarchy) and the
additional personal characteristics desired by managers. In conclusion in order
to design a job the first step that has to be done is create the task. Then on
the basis of the task the job can be designed that answers to the question:
which kind of job should they create to accomplish a specific pre-created task?
. Conclusive step regards the selection process that aims to select the most
suitable person capable to accomplish the required task. Ways to enrich a
job
Moreover job design can be either for individual positions or work teams.
Individual jobs can be enriched through grouping tasks into works unit; in
words grouping related jobs into one category and assign responsibility to an
individual. A second related approach is to combine several tasks into one. A
third approach to enrich a job is to establish direct relationship with the
customer or client. Another way to enrich a job is to establish a feedback
mechanism within and outside the organization. Each role can be enriched
through vertical job loading, which means increasing individual responsibility
for planning, doing and controlling their own jobs. When someone is designing
a job, s/he must take into consideration the requirements as well as the
maximization of benefits of both the employees and the organization as whole.
Other aspects to be considered are technological constraint, costs and the
organization structure. The awareness that individual characteristics vary from
people to people is needed in order to design a job effectively.
Selection
Selection of managers is one of the most critical steps in the entire process of
managing. Selection is the process of choosing from among candidates, from
within the organization or from the outside, the most suitable person for the
current position or for the future position. The selection process must be done
taking into consideration both the internal (company policies, managers
demand and supply within the organization) and external forces.
There are two approaches to filling organizational positions:
1) Selection approach in which applicants are sought to fill a position with
rather specific requirements.
2) Placement approach in which the strengths and weaknesses of the
individual are evaluated and a suitable position is found or even designed.
Managerial performances are appraised and are the basis for rewards,
promotion, demotion, replacement and retirement decisions. In the selection
process the information about the applicant should be both valid and reliable.
In selection the validity is the degree to which the data predict the candidates
success as a manager. The information should also have a high degree of
reliability a term that refers to the accuracy and consistency of the
measurement.

The steps in selection process:

1) The selection criteria are established on the basis of job requirements.
2) The candidate is requested to complete an application form.
3) A screening interview follows to identify the more promising candidates.
4) Additional information may be obtained by testing the candidates
qualification.
5) Formal interviews are then conducted by the managers and other persons in
the organization.
6) The information provided by the candidate is checked and verified.
7) On the basis of the information provided the candidate is either offered the
job or informed that he or she has not be selected for the position.
Tests
The primary aim of testing is to obtain data about applicants that help predict
their probable success as managers. The aim of testing is to find the best
person for the job and reducing turnover. Here are some common tests:
- Intelligence tests: designed to measure mental capacity
- Proficiency and aptitude tests: constructed to discover interests, existing
skills and potential for acquiring skills.
- Vocational tests: designed to indicate a candidates most suitable
occupation.
- Personality tests: designed to reveal a candidates personal characteristics
and the way the candidate may interact with others.
Manager and organization development
Executives have to look to the future and be prepared for it. In such matter
development and training of managers are necessary in order to be able to
cope with new demands, new problems and new challenges. The term
manager development refers to long-term, future-oriented programs and the
progress a person makes in learning how to manage.
On the other hand managerial training pertains to the programs that
facilitate the learning process and is usually a short-term activity to help
managers do their job better.
Organization development is a systematic, integrated, and planned
approach to improving the effectiveness of groups of people and of the whole
organization. Organization development uses various techniques for identifying
and solving problems. Therefore organization development focuses on the total
organization (or a major segment of it), while manager development focuses
only on individuals.
Manager development process and training
Before specific training and development programs are chosen, three kinds of
aspects must be considered:
1) Objectives of the enterprise, the availability of managers and the turnover
rates.
2) Needs related to the operations that can be determined by job descriptions
and performance standards.
3) Data about individual training that can be provided from performance
appraisals, interviews with the jobholder, tests etc.
For what concern present jobs, managers development and training must be
based on a needs analysis derived from a comparison of actual performance
and behavior with the required performance and behavior. A similar process is
applied in the identification of the training needs for next job. Present
competency is compared with the competency demanded by the next job.

Training and development for future jobs and needs requires forecast which
new competencies will be demanded due to changing technology and methods.
Approaches to manager development: on-the-job training
There are several approaches that regard the manager development:
- Planned progression: is a technique that gives managers a clear idea of
their path of development. Managers know where they stand and where they
are going. The manager knows the requirements for advancement and the
means of achieving it.
-Job rotation: the purpose of job rotation is to broaden the knowledge of
managers or potential managers. Trainees learn about the different enterprise
functions by rotating into different positions. But the participants in the training
program may not remain long enough in each position to prove their future
effectiveness as managers.
-Creation of assistant-to positions: assistant-to position are frequently
created to broaden the viewpoints of trainees by allowing them to work closely
with experienced managers who can give special attention to the development
needs of trainees. This can be very effective where superiors are qualified or
able to teach.
-Temporary promotions: Individuals are frequently appointed as acting
managers when, for instance, the permanent manager in on vacation, is ill, or
is making an extended business trip, or even when a position is vacant. When
the acting manager is given the authority to make decisions and to assume full
responsibility, the experience can be valuable.
-Committees and junior boards: gives trainees the opportunity to interact
with experienced managers.
- Coaching: there must be on a climate of confidence and trust between the
superior and trainees. Patience and wisdom are required of superiors, who
must be able to delegate authority and give recognition for jobs well done.
Effective coaches will develop the strengths and potentials of subordinates and
help the overcome their weaknesses.
In general development objectives include: an increase in knowledge,
development of attitudes to manage, acquisition of skills, improvement of
management performance and achievement of enterprise objectives. Changes
in technology, internalization and the shift from manufacturing to service
industries affect both managers and organizations development. Top and
middle-level managers in situations in which changes may affect the current or
future overall performance have to create motivations for change (unfreezing),
assimilate new information and concepts or develop different prospective
(changing) and stabilize the change (refreezing).
There are many reasons why people resist change: for example what is not
known causes fear and induces resistance, not knowing the reason for the
change causes resistance and change may also result in a reduction of benefits
or power.
Leading
The managerial function of leading is defined as the process of influencing
people so they will contribute to organizational and group goals. Managing
requires the creation and maintenance of an environment in which individuals
work together in groups toward the accomplishment of common objectives.
Human factors in managing

Through the function of leading, managers help people satisfy their own needs
while utilizing their potential contributing to the achievement of an enterprises
goal. Managers should thus have an overall understanding of the personalities
of people. Its important to underline the fact that in all organizations there is
no an average person; each individual in fact is unique having different needs.
In such matter effective managers should make their best to align peoples
aims with those of the firm itself always taking into consideration that each is
different but all are human beings. Achieving the overall objectives is important
but managers should always take into consideration that they must never
violate the dignity of people. The concept of individual dignity means that
people must be treated with respect, no matter what is their position in the
organization structure. In managing human assets, managers must to focus on
the motivation of people. Motivation is a term applying to the entire class of
drives, desires, needs, whishes and similar forces. To say that managers
motivate their subordinates is to say that they do things which they hope will
satisfy these drives and desires and induce the subordinates to act in a desired
manner.
McGregors theory X and Y
Theories X and Y are two sets of assumption about the nature of people. It is
important to underline that such distinction between the natures of people
does not imply associations with being good or bad.
-Theory X involve the following characteristics about the nature of
people:
- Average human beings have an inherent dislike of work and will avoid it if
they can.
-Because of this previous characteristic most people must be coerced,
controlled, directed and threatened with punishment to push them to make
more efforts for the accomplishment of organizations objectives.
- Average human beings prefer to be directed, wish to avoid responsibility,
have relatively little ambition, and want security above all.
Theory Y involve the following characteristics:
- External control and the threat of punishment are not the only means for
producing effort toward organizational objectives. People will exercise selfdirection and self-control in the service of objectives to which they are
committed.
- The degree of commitment to objectives is in proportion to the size of the
rewards associated with their achievement.
- Average human beings learn, under proper conditions, not only to accept
responsibility but also to seek it.
- The capacity to exercise a relatively high degree of imagination, ingenuity,
and creativity in the solution of organizational problems is widely, distributed in
the population.
- Under the conditions of modern industrial life, the intellectual potentialities of
the average human being are only partially utilized.
It is important to underline that theory X and Y are only assumptions; they
depict different views and they are not prescriptions or suggestions for
managerial strategies.
Maslows hierarchy
Maslows hierarchy of needs describe how needs motivated us all. His theory is
well represented by a pyramid structure. Only when lower order needs are
satisfied we are concerned with higher orders.

The pyramid is divided in 5 levels:

1) Physiological needs = Basic needs necessary to survive. (Food, water)
2) Safety needs= Safety needs are given by the physical and emotional
protection of the individual. This kinds of needs are necessary for an individual
to feel safe and comfortable in any given environment. (Health, property)
3) Social needs: the individuals need for love and social acceptance including
love,friendship and respect.
4) Esteem needs. We can distinguish them into two categories: internal and
external needs. For what concern the former it includes self-respect, autonomy
and self-confidence while the latter includes respect of and by the others.
5) Self-actualization needs: the peak of this pyramid can never be fully
satisfied. An individual will continue in the process of personal growth to
achieve self-satisfaction. The hunger for more knowledge, creativity and selfexpression is an example of this kind of needs.
Herzbergs theory
Maslows theory has been considerably modified by Herzberg which introduced
a two-factor theory of motivation. Starting from the bottom of the hierarchy,
the first three steps are matched under the Maintenance factors, the last two
instead under Motivations. If one of the Maintenance factors doesnt exist the
person will be dissatisfied. Instead, if one of the Motivations factors doesnt
exist, person normally wont feel dissatisfied, but if it does, it will really
motivate him/her.
Alderfers ERG theory
The Alderfers theory is similar to Maslows theory but presents only three
categories that include existence needs, relatedness needs and growth needs.
Vrooms expectancy theory
Following Vroom theory people will be motivated to do things to reach a goal if
they believe in the worth of that goal and if they can see that what they do will
help them in achieving it.
Vrooms theory may be stated as Force= Valence x Expectancy where force
is the strength of a persons motivation, valence refers to the strength of an
individuals preference for an outcome (when a person is indifferent about
achieving a certain goal, we have a valence equals to zero) while expectancy
refers to the probability that a particular action will lead to a desired outcome.
The Porter and Lawler Model
As this model indicates, the amount of effort depends on the value of a reward
plus the amount of energy a person believes is required and the probability of
receiving the reward.
Equity theory
An important factor of motivation is whether individuals perceive the reward
structure as being fair. According to equity theory, motivation is influenced by
an individuals subjective judgment about the fairness of the reward he or she
gets, relative to the inputs, compared with the rewards of others. If people feel
they are inequitably rewarded, they may be dissatisfied, they may reduce the
quantity or the quality of output, or they may even leave the organization. This
wouldnt occur if people perceived the rewards equitable. The essential aspect
of theory may be expressed as follow:

Skinners reinforcement theory

According to the psychologist B.F. Skinners reinforcement theory individuals
can be motivated by proper design of their work environment and by praise for
their performance, while punishment for poor performance produces negative
results.
McClellands theory
McClelland to the understanding of motivation identifying three types of basic
motivating needs:
- Need for power: people with a high need for power have a great concern
with exercising, influence and control. They enjoy teaching and public
speaking.
- Need for affiliation: people with a high need for affiliation usually derive
pleasure from being loved and tend to avoid the pain of being rejected by a
social group.
- Need for achievement: people with a high need for achievement have an
take a realistic approach to risk.
Job enrichment
It is related to Herzbergs theory of motivation in which factors as challenge,
achievement, recognition and responsibility are considered as real motivations.
Job enrichment is the attempt to build into jobs a higher sense of challenge and
achievement: giving workers more freedom in deciding, encouraging
participation of subordinates, giving workers a feeling of personal responsibility
for their tasks, taking steps to ensure that workers can see how their tasks
contribute to a finished product and to the firm as a whole and giving people
their performance feedback.
Job enlargement
Enlarging the scope of the job by adding similar tasks without enhancing
responsibility. For example a production line worker may install not only the
bumper on a car but also the front hood.
Leadership
Although some people treat the terms managership and leadership as
synonymous, the two shall be distinguished since a manager can be a leader
while being leader does not imply to be manager. Such distinction permits to
study and analyze leadership without taking into consideration at which level of
the organization hierarchy the leader is involved.
The essence of leadership is followership that can express as the willingness of
people to follow a person which is consequently a leader. Following the
principle of leadership people tend to follow those whom offer them a
means of achieving their own desires, wants and needs. Thus the more
managers understand what motivates their subordinates, and the more they
reflect this understanding in carrying out their managerial actions, the more
effective they are likely to be as leaders. It emerges therefore that leadership
and motivation are closely interconnected. Leadership is defined as the art or
the process of influencing people so that they will strive willingly and
enthusiastically toward the achievement of group goals.

Ingredients of leadership
Usually every group of people that performs near its total capacity has some
person as its head who is skilled in the art of leadership. The art of leadership is
composed by the following abilities:
1) The ability to use power effectively and in a responsible manner
2) The ability to comprehend that human beings have different motivating
forces at different times and in different situations
3) The ability to inspire
4) The ability to act in a manner that will develop a climate conductive to
responding to and arousing motivations.
Leadership behavior and styles
There are several theories on leadership behavior and styles: 1) leadership
based on the use of authority, 2) the managerial grid, 3) leadership
involving a variety of styles.
Leadership based on the use of authority:
Autocratic leader: commands and expects compliance (disciplina), is
dogmatic and positive and leads by the ability to withhold or give
rewards and punishment.
Democratic, or participative, leader: consults with subordinates on
proposed actions and decisions and encourages participation from them
Free-rein leader: uses his or her power very little: givea subordinates a
high degree of independence in their operations. Such leaders depend
largely on subordinates to set their own goals and the means of
achieving them and they see their role as one of aiding the operations of
followers by furnishing them with information.
Leadership involves a variety of styles, ranging from one that is highly bosscentered to one that is highly subordinate-centered (Leadership continuum
concept). The styles vary with the degree of freedom a leader or manager
grants to subordinates. The appropriate leadership style depends on the
leader, the followers, and the situation.
The Managerial Grid (pag. 301)
A well-known approach to defining leadership styles is the managerial grid
designed by Robert Blake and Jane Mouton. This grid has been used
throughout the world as a mean of training managers and of identifying various
combinations of leadership styles.
The grid has two dimensions: concern for people and concern for production.
The use of the word concern is meant to convey how managers are
concerned about production and how they are concerned about people and not
things such as how much production they are getting out of a group. Concern
for production includes quality of policy decisions, procedures and processes,
creativeness of research, quality of service, work efficiency and volume of
output. Concern for people includes such elements as the degree of personal
commitment toward goal achievement, maintenance of self-esteem of workers
and maintenance of satisfying interpersonal relations. The grind provides four
extremes styles at different points:
Under the 1.1 style managers concern themselves very little with either
production or people.
Under 1.9 style: managers have little or no concern of production and are
concerned only with people.

Under 9.1 style: managers have little or no concern of people and are
concerned only with production.
Under 5.5 style managers have medium concern for production and people.
Under 9.9 style managers acts providing the highest possible dedication both
to people and production and are able to mesh the production needs of the
enterprise with the needs of individuals. As always the use of one style of the
grid depends on the situation.
Fielders contingency approach to leadership
The theory holds that people become leaders not only because of the attributes
of their personalities but also because of various situational factors and
because of the interactions between leaders and group members. He describes
three critical dimensions of the leadership situation that help determine
what style of leadership will be most effective:
1. position power: this is the degree to which the power of a position
enables a leader to get group members to comply with (attenersi a)
directions. A leader with a clear and considerable position power can
obtain good followership more easily than one without such power.
2. Task structure: if tasks are clear rather than vague and unstructured,
the quality of performance can be more easily controlled and group
members van be held more definitely responsible for performance.
3. Leader- member relations: the extend to which group members like
and trust a leader and are willing to follow the leader.
The Fielders model of leadership (pag 307) is the summary of Fielders
research, in which he distinguished between unfavorable and favorable
situations.
Favorableness of situation is defined by Fielder as the degree to which a
given situation enables a leader to exert complete influence over a group. On
the other hand when a leader position power is weak, the task structure is
unclear and the leader-member relations are poor; such situation is known as
unfavourable. At the other extreme, where all the parameters are strong, we
have a favorable situation for the leader, so the task-oriented leader will also
be most effective. However if the situation is only moderately unfavorable or
favorable (in the middle of the horizontal scale in figure), the relationshiporiented leader will be most effective.
Path-goal theory
Path goal theory suggest that main function of the leader is to clarify and set
goals with subordinates, help them find the best path for achieving the goals
and remove obstacles (best path depends on situations)
The theory categorizes leader behavior into four groups:
1. Supportive leadership: behavior gives consideration to the needs of
subordinates, shows concern for their well-being, and creates a
pleasant organizational climate.
2. Participative leadership: allows subordinates to influence the decisions
of their superiors, which may increase motivation.
3. Instrumental leadership: gives subordinates rather specific guidance
and clarifies what is expected of them.
4. Achievement-oriented leadership: involves setting challenging goals,
seeking improvement of performance, and having confidence that
subordinates will achieve high goals.

Transactional and transformational leadership

A distinction can be made between transactional and transformational leaders:
the former identify what subordinates need to achieve objectives, clarify
organizational roles and tasks, reward performance and provide for the social
needs of its followers. On the other hand transformational leaders articulate a
vision, inspire and motive followers and create a climate favorable for
organizational changes.
Women as leaders
According to several studies women usually use a different leadership style that
men. Women see leadership as changing the self-interest of the followers into
concern for the total enterprise by using personal skills in order to motivate
subordinates. This interactive leadership involves sharing information and
power, letting people know that they are important.
Productivity
Productivity is the output-input ratio within a time period with due
consideration for quality.
One of the major areas in any kind of enterprise is production and operations
management.
Production management deals with activities necessary to
manufacture products including activities such as purchasing, warehousing,
transportation and operations from the procurement of raw materials through
various activities until a product is available to the buyer. Operation
management instead refers to the activities necessary to produce and deliver
a service as well as a physical product. Service organizations do not produce a
physical output but provide some service as an output.
Operations management system
Operations management has to be seen as a system. The inputs include needs
of customers, information, technology, management and labor, fixed assets
and variable assets that are relevant in the transformation process. Managers
and workers use the information and physical factors to produce outputs. The
transformation process incorporates planning, operating and controlling the
system. There are many tools and techniques to facilitate the transformation
process. Outputs consist of products and services and may even be
information, such as that provided by a consulting organization. We know that
operations are influenced by external factors such as safety regulations or fair
labor practices. So its important saying that operations management must be
an open system interacting with its surroundings.
Planning operations
First of all an end product or service has to be selected. After an end
product/service has been selected, the specifications are determined and the
technological feasibility of producing it is considered. The design of an
operations system requires decisions concerning the locations of facilities, the
process to be used, the quantity to be produced, and the quality of the product.
One of the basic decisions an enterprise makes is selecting a product or
products that intends to produce and the relative market. This includes
gathering product ideas that will satisfy the needs of customers and contribute
to the goals of the enterprise while being consistent with the strategy of the
firm. In a product decision, the various interests of functional managers must
be considered. Those of the production managers, of the engineers, of sales or
marketing managers, of the finance managers and so on. The divergent
interests of these functionally oriented managers and professionals influence
what product will be produced and marketed, but its the general manager who

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has to integrate the various interests and balance revenues with costs, profits
with risks, and long-term with short-term growth.
The design of a product and its production requires a number of activities. Here
are the steps:
Create product ideas by examining consumer needs and screening the various
alternatives
Select the product on the basis of the market and economic analysis
Prepare a preliminary design by evaluating various alternatives, taking into
account reliability, quality and maintenance requirements
Reach a final decision by developing, testing and simulating the processes to
see if they work
Decide whether the enterprises current facilities are adequate or if new or
modified facilities are required
Select the process for producing the product, and consider the technology and
the methods available
After the product is designed, prepare the layout of the facilities to be used,
plan the system of production, and schedule the various tasks that must be
done
Operating the system
After a product has been selected and the system for producing it has been
designed and built, the next major step is to operate the system. This requires
setting up an organization structure, staffing the positions, and training people.
The aim is to obtain the best productivity ratio within a time period with due
consideration for quality.
Controlling operations
Controlling operations requires setting performance criteria, measuring
performance against them and taking actions to correct undesirable deviations.

There are several tools and techniques available for improving

productivity:
Inventory planning and control: It forces consideration of the goals desired
and the need for placing values on both outputs and inputs providing basis for
plans and standards by which measure performance
Just-in-time inventory system: the supplier delivers the components and
parts to the production line only when needed and just in time to be
assembled. Zero inventory and stockless production are other names or similar
methods. In order to be effective just in time requires dependable and
relationship and cooperation with the supplier which should be located near the
company and provide high quality products.
Outsourcing: production and operations are contracted to outside vendors
that have expertise in specific areas. The aim may be to reduce costs by saving
on personnel benefits, to reduce personnel, or to be able to reassign
employees to other tasks that are more important. Moreover outsourcing
grants access to the best sources available and it is charaterized by the fact
that the firm shares risks with its suppliers (Nike, Inc., uses outsourcing for all
of its shoe production, keeping only the production of the sophisticated Nike Air
system).
Operations research: it is the application of scientific methods to the study
of alternatives in a problem situation, with a view to obtaining a quantitative

basis for arriving at the best solution. Thus, the emphasis is on scientific
methods, on the use of quantitative data, on goals.
Value engineering: a product can be improved and its costs lowered through
value engineering, which consists of analyzing the operations of the product
or service, estimating the value of each operation, and attempting to improve
that operation by trying to keep costs low at each step or part.
Work simplification: work methods can be improved through work
simplification, which is the process of obtaining the participation of workers in
simplifying their work.
Quality circles: (QC) is a group of people from the same organizational area
who meet regularly to solve problems they experience.
Total quality management: TQM involves the organizations long-term
commitment to the continuous improvement of quality, throughout the
organization and with the active participation of all members at all levels, to
meet and exceed customers expectations. Such approach requires a careful
analysis of the customers needs, the degree to which these needs are currently
met and a plan to fill the possible gap between the current and the desired
situation. When done effectively TQM should result in greater customers
satisfaction, fewer defects, less wastes, increase of total productivity, reduced
costs and improved profitability. It is important to point out that the quality
improvement efforts need to be continuously monitored through data
collection, evaluation, feedback, and improvement programs. TQM is not a onetime effort but a long-term endeavor (sforzo). With Six Sigma, TQM is a pillar of
Lean manufacturing process.
Lean manufacturing: can gain a competitive advantage from the use of
fewer workers, a shorter development time, lower inventories, fewer suppliers,
less production and less investment to produce more models. It is
characterized by continuous improvements with strategic breakthroughs
aiming at zero defects, just-in-time inventory system and responsibility for
problems rests on everyone especially management.
Six Sigma: is a statistical term that tells us how far a given process deviates
from perfection. Sig Sigma seeks to improve the quality by identifying and
removing the causes of defects. After defects are measured they can be
eliminate, systematically approaching a process of zero defect. To achieve a
level of six sigma quality there must be no more than 3-4 defects per million.
Flow chart, paretos chart and Ishikawas diagram are techniques for analyzing
six sigma.
Computer aided techniques: computer-aided design (CAD) and computeraided manufacturing (CAM) are part of the cornerstones of the factory of the
future. CAD/CAM help engineers design products much more quickly than they
could with the traditional paper and pencil approach. Capturing the market
quickly is crucial in the very competitive environment

Supply chain management

Focuses on the sequence of getting raw materials and subassemblies through
the manufacturing process in an economical manner.
Value chain management
Involves analyzing every step in the process, ranging from the handling of raw
materials to servicing end users, providing them with the greatest value at the
lowest cost.
Thus supply chain management focuses more on the internal process with an
emphasis on efficient flow of resources, such as materials while value chain
management has similar aims with additional concern for the external
environment, such as customers.
Professor M.Porter popularized the value chain process model which
includes the primary activities of inbound logistics, operations, outbound
logistics, marketing/sales, and service. The process is supported by the
enterprise infrastructure, the management of human resources, technology
and procurement. The goal of value chain management is to create a seamless
chain of activities from the supplier, through the manufacturer, to the customer
to meet and exceed her expectations.
Turnaround management
Turnaround management is an approach to the recovery of a firms economic
performance following an existence-threatening decline. There are 5 areas that
might cause the decline of an organization and regards: marketing and
strategy, management team, information, efficiency and economy. The
turnaround process must be seen as a cycle and involve the following steps:
- Stabilizing
- Analyzing
- Repositioning
- Reinforcing