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 it’s 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 country’s 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 firm’s 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 candidate’s 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 candidate’s 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 candidate’s most suitable occupation.
- Personality tests: designed to reveal a candidate’s 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 enterprise’s goal. Managers should thus
have an overall understanding of the personalities of people. It’s 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
people’s 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.
McGregor’s 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 self-direction 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.
Maslow’s hierarchy
Maslow’s 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 individual’s 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 self-expression is an example of this kind of needs.
Herzberg’s theory
Maslow’s 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 doesn’t exist the person will be dissatisfied. Instead, if one of the
Motivations factors doesn’t exist, person normally won’t feel dissatisfied, but if it does, it will
really motivate him/her.
Alderfer’s ERG theory
The Alderfer’s theory is similar to Maslow’s theory but presents only three categories that
include existence needs, relatedness needs and growth needs.
Vroom’s 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.
Vroom’s theory may be stated as Force= Valence x Expectancy where force is the strength
of a person’s motivation, valence refers to the strength of an individual’s 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 individual’s 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 wouldn’t occur if people perceived the rewards equitable. The essential
aspect of theory may be expressed as follow:

Skinner’s reinforcement theory

According to the psychologist B.F. Skinner’s 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.
McClelland’s 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 Herzberg’s 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 boss-centered 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.
Fielder’s 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 Fielder’s model of leadership (pag 307) is the summary of Fielder’s 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 relationship-oriented 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 it’s
 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 it’s the general manager who 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:
1. Create product ideas by examining consumer needs and screening the various alternatives
2. Select the product on the basis of the market and economic analysis
3. Prepare a preliminary design by evaluating various alternatives, taking into account
reliability, quality and maintenance requirements
4. Reach a final decision by developing, testing and simulating the processes to see if they work
5. Decide whether the enterprise’s current facilities are adequate or if new or modified facilities
are required
6. Select the process for producing the product, and consider the technology and the methods
available
7. 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 organization’s 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 one-time 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, pareto’s chart and Ishikawa’s diagram are techniques for analyzing six
sigma.
 Computer aided techniques: computer-aided design (CAD) and computer-aided
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 firm’s 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