Leadership Styles are philosophies of leadership that guide the actions of the leader. There are different types of Leadership Styles based on culture, values, and the leader’s own personal character traits. There are several commonly accepted leadership styles, which include Transformational, Transactional,  Democratic, Bureaucratic, Servant, Authoritarian, and Laissez-Faire. Some elements of each type of Leadership styles are often combined in the same person as it is rare for a leader to neatly fit into only one category. Situational Leadership is the idea that the best leaders will use a blend of different Leadership styles to fit the situation.

Types of Leadership Styles

(1) Transformational Leaders are also known as Charismatic Leaders, who lead by inspiring others to create and innovate. These leaders are generally well-liked by staff but may think too broadly about their vision to successfully implement their ideas. Charismatic leaders, in particular, tend to have an almost cult-like following, which can be detrimental when they leave their position since their position of power is tied to the individual.

(2) Transactional Leaders assert their authority using exchanges of punishments and rewards with their staff. These leaders rely upon clearly established roles and boundaries in a hierarchy. This type of leader is typically seen as fair, but is usually too conventional to allow much creative innovation.

(3) Democratic Leaders or participative leaders tend to lead by consensus, asking subordinates for their opinions and information to come to more collective decisions. These processes ensure that staff voices are heard, but may spend too much time in a discussion when action is needed.

(4) Bureaucratic Leaders take policy and protocol seriously, following rules by the book and adhering to strict hierarchies in an established chain of command. These types of leaders tend to exist in environments that are already bureaucratic, like government or military, and though they are predictable and methodical they are generally not well-liked or fast moving.

(5) Servant Leaders do not like to assert authority over their subordinates and instead model leadership through self-sacrifice and prioritization of the needs of their staff. It can also be described as altruistic leadership. These leaders may be seen as generous and kind but can also be viewed as weak in authority and easily overcome by adversaries.

(6) Authoritarian Leaders are an extreme version of transactional leaders, with an emphasis on power and control over their staff. Authoritarian leaders are dictatorial, strict, and rarely take staff input into consideration. These leaders can be effective in military environments but tend to cause workers to leave organizations when this style is used in the office.

(7) Laissez-Faire Leaders are laid-back, allowing workers to lead themselves and rarely getting involved in day-to-day decision making. Deriving their name from the French phrase “laissez-faire” which means “to leave alone”, these leaders may give employees too little direction to be able to work effectively. This leadership style may function well in an environment where employees are highly skilled and self-motivated so little supervision is needed.

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A group is a collection of two or more individuals who interact with each other and are inter-dependent on each other for a common purpose, and hence perceive themselves as a group. 

Features of a group

• It consists of two or more people
• It involves interaction and communication between group members
• All members of a group have a collective identity
• All members share similar goals, interests and lifestyle

A group may be defined as two or more individuals, interacting and inter-dependent, who come together to achieve particular objectives.

Group Dynamics is concerned with interactions and forces among group members in a social situation. It refers to the social process by which people interact face to face in small groups. The Three major functions performed by a group in an organization are:

• Socialization of new employees
• Getting the job done – teaching new employees to cope up with the job
• Decision making

Reasons for Group Formation

• Warmth & support
• Power (bargaining strength)
• Security
• Recognition (opportunities for praise)
• Exchange ideas, thoughts, attitude
• Goal accomplishment
• Group activities

Types of Groups

Formal Groups

A group created by formal authority to accomplish a specific task.  A formal authority structure governs the behaviour and roles of members.  Rules, incentives, regulations & sanctions guide the action of members.

(1) Command Group – It consists of a supervisor and his/her subordinates.  Subordinates report to a common superior.  These groups form a permanent part of the organisational structure and remains intact even if a member leaves.

(2) Task Group – It consists of employees who work together to complete a particular task on project. Individuals from different divisions and departments come together and work on a particular task. A task group can be often called a committee – task force or project group

• Committee – It is a group of employees whose purpose is to exchange info, advice manager, making decisions.
• Task force – A group created to tackle a certain problem, it is action oriented.

(3) Project group – It consists of individual from many different backgrounds who come together to achieve predetermined objectives within predetermined time, cost & quality limits.  It consists of personnel from different areas of expertise who help to attain project goal.

(4) Committees – There are ad-hoc groups formed to examine, analyse and evaluate particular areas of organisational operations.  They usually have only advisory authority.  There are also standing committees like Board of Directors which exist indefinitely.

Informal Groups

Groups in which membership is voluntary are informal groups.  These groups evolve gradually among employees with common interests.

Informal Groups can be categorised into –

(1) Friendship group – People with common interests, social activities, political beliefs, religious values, opinions etc. form an association and extend their interaction to off the job activities.

(2) Interest group – Individuals who may or may not be members of similar task or command group may come together to achieve some mutual benefit.  Objectives of such a group are not related to the organisation’s objectives but are specific to each group.

(3) Reference group – It refers to a group of people, a person refers to while taking decisions and uses reference group’s opinion to evaluate himself.  It is a group that serves as a reference point for the individuals to evaluate and make decision regarding his/her belief, attitude and behaviour.

Difference between Formal Groups and Informal Groups

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Organizational Change refers to any modification or alternation in people, structure, job design or technology of an existing organization. An organization must make changes continuously in order to cope up with changes in —

• Customer needs
• Technological breakthrough
• Economic shocks
• Government regulations etc.

Organizational Change is required to maintain equilibrium between various external and internal forces, to achieve organization objectives. It helps an organization to be more effective and efficient for the purpose of achieving its objectives.

Types of Organizational Change

Anticipatory change – These are systematically planned changes intended to take advantage of expected future events or situations.

Relative change – Changes that become imperative due to changes in environment and unexpected events.

Incremental Change – It involves changes in the subsystem of an organization in order to keep it on the correct path / direction.

Strategic Change – These changes affect the overall working and direction of an organization.

Planned Change – It helps an organization to prepare and adapt to changes in organization goals and objectives. It seeks to –

• Improve the ability of an organization to adapt to changes in its environment
• Change employee behaviour
• Survive the competition

Proactive change – It takes place when forces for change lead an organization to make changes in its structure, technology or people as it is desirable.

Reactive Change – When forces for change make it necessary for a change to be implemented.

Process of Planned Change

Planned change is a deliberate and intentional change by the organization involving –

• structural innovation
• new philosophy, policy, goal
• change in operating philosophy
• change in climate and style

Kunt Lewin’s Force Field Analysis Model

According to Kurt Lewin, individual behaviour is the result of equilibrium between driving forces and restraining forces.

Driving forces – Tend to initiate change – Forces which affect a situation by pushing it in a particular direction.

Restraining forces – Forces acting to restrain or decrease driving forces.

An increase in the driving forces might improve productivity but it also might increase restraining forces. E.g. – Manager eliminating breaks for employees (Driving forces) Employees offering resistance (Restraining Forces)

Driving forces may also activate restraining forces therefore it is more effective to decrease the restraining forces to encourage change. To initiate planned changes managers have to remove restraining forces or make them weak and strengthen the driving forces.

Individuals experience two obstacles to change:

• They are unwilling to alter long established attitudes and behaviours
• They may try to do things differently but return to traditional ways in a short time.

Kurt Lewin introduced a three step sequential model of change process:

(1) Unfreezing – It is a process in which a person casts away his old behaviour which might be inappropriate or irrelevant to the changing demands of the situation.

Schien Hur suggested some measures for undertaking the unfreezing process –

• Physical removal of individuals from their accustomed routines, sources of information and social relationships.
• Undermining and destruction of social support
• Demeaning and humiliating experiences to help individuals see their old habits as unworthy and be motivated for change
• Linking reward with willingness to change and punishment with resistance to change

It involves discarding the orthodox and conventional ways of doing things and introducing new behaviour and accepting new alternatives.

(2) Changing – In this phase individuals learn new behaviour and learning process begins. Individuals start accepting change and learn to behave in a new way. The changing phase can be explained in terms of –

• Compliance or force – It occurs when individuals are forced to change either by rewards or punishment
• Internalization – It occurs when individuals are forced to encounter a situation that calls for a new behaviour.
• Identification – It occurs when individuals choose a particular behaviour model that suits his/her personality in the changed environment.

Guidelines for effective change

• Realize that the purpose of change is to improve performance results.
• Make individuals responsible for their own change
• Encourage improvisation, team performance, and coordinated activities.
• Encourage learning by doing, provide Just in Time (JIT) training
• Use positive energy, meaningful language, effective leadership

(3) Refreezing – It means what has been learned is integrated into actual practice. The individuals internalize the new beliefs, feelings and behaviour learned during changing phase. They accept and adopt these changes as a permanent part of their behaviour repertoire. There is a tendency that an individual might revert back to their old behaviour therefore reinforcement is necessary for the internalization of new behaviour.

Forces of Organizational Change

Internal forces

• Increased size
• Performance gap
• Employee needs & values
• Change in top management

External forces

• Technological changes
• Changing marketing conditions
• Social changes
• Political & legal changes

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Power is simply a means of influence. It refers to the capacity that a person has to influence the behaviour of another person for doing something he/she may not normally do. It can be understood in terms of an Agent(person with power) and a Target(person to be influenced by power). Hence, A Manager (Agent) has a potential influence over his subordinate (Target). The Agent and the target are in a mutually dependent relationship and the Target may have some discretion over his/her behavior.

Basis of power →

(A) Positional Power – It is also known as formal power. It emerges from the position that an individual holds in an organization. Such a power remains the same irrespective of who holds it.

— Legitimate Power – It is based on agreement and commonly held values allowing one person to have power over another. It may be formal like authority delegated to senior officials in an organization or informal like respect for the elderly in a social unit.

— Reward Power – It is based on one’s control and allocation of material resources and rewards. In an organization, power is based on control over salaries, wages, commission, amenities etc. People comply with power because they get benefits out of compliance.

— Normative Power – Such a power is based on allocation and manipulation of symbolic rewards. Eg. Prestige, Affection, Self- esteem, Ego

— Coercive Power – It rests upon the application or threat of application of physical sanctions. Eg. Infliction of pain, deformity, death etc. In an organization it may be in form of threat of dismissal, suspension, demotion or embarrassment.

— Informative power – Such a power comes from access and control of information. Eg. Information of future course of action, financial data, Secret knowledge.

(B) Personal Power – It is personal and resides with a person, regardless of his position in an organization. It emerges from the qualities that are unique within a person. It can inspire loyalty and dedication.

— Expert Power – It is the influence which one enjoys as a result of one’s experience, special skill or knowledge.

— Referent Power – It is based on identification i.e. a process where a person copies the behaviour of other person whom he takes as an idol. People want to identified as their idol therefore they copy the behavior of the people they idolize.

— Charismatic Power – It emerge from an individual`s charisma, It is a quality that is unique to a person. Visionaries and Risk takers like Martin Luther King and Mahatma Gandhi had much higher influence due to their charismatic qualities.

Contingency approach to power →

It suggests that no particular power base is effective in all situations. Effectiveness of power depends upon matching of the power base and the situation requirements prevailing at the time of use of power. A Successful Manager is one who is aware of existence of multiple bases of power in work situations. The effectiveness of different power depends on the nature of managerial, subordinate and organization variables. The variables that affect power effectiveness are:-

                          Contingency model of Power effectiveness

(A) Agent Characteristics → It determines the extent to which the influence exercised by an Agent will be effective or not. It may be a Manager, supervisor or a worker in a power relationship. The two characteristics of an agent that affects power effectiveness are:-

— Organization position – It determines his positional power. The higher a person is in the hierarchy of an organization the higher power he has.

— Personality –

(a) People with high mach score tend to use coercive and informational power more effectively.

(b) Conscientious people use legitimate and reward power more effectively.

(c) People with high self-esteem rely more on personal power than positional due to their expertise and skills.

(d) Extroverts influence with personal power more effectively.

(B) Target’s characteristics → There is a reciprocal relationship between Agent and Target. Therefore effectiveness of power also depends upon Target`s Characteristics. It is affected by the following power –

— Influenceability – Degree to which a person accepts influence.

— Dependency – Degree of Dependency of target on agent.

— Uncertainty – Uncertainty in the mind of the Target about his/her behavior.  

— Personality – People who are highly anxious and people with need for affiliation are more likely to be influenced than people with high self-esteem due to their personality.

— Intelligence – Intelligent people are less susceptible to influence.

— Culture – Depending upon the orientation of one`s culture towards authority a person may be more or less susceptible to influence.

(C) Organization Characteristics → An organization devises certain parameters within which power relation exists among people working together in an organization. The main factors that affect power relationships are:

— Organization structure – It prescribes relationships among different positions and delegates authority.

— Nature of task – The Autonomous nature and visibility of a task affects the power relationships. Individuals who work in autonomy are less susceptible to power influences. Tasks with High visibility (marketing) have more power than tasks with low visibility (human resource).

— Performance Evaluation and Reward system – If the performance evaluation and reward system is faulty people working will be highly susceptible to influence.

— Organization culture – Organization Culture refers to commonly held beliefs, values and norms in an organization. In an organization which creates a Conducive environment and adopts good management practices; personal power is more effective. Positional power is more effective in an organization with a rigid organization culture and processes.

Responses to Use of Power →

Resistance – A person may resist the influence and may not agree to behave according to the influencer`s wishes.

Obedience – The person is influenced and behaves against their wishes in order to obey the influencer.

Compliance – A person may comply with the influencer in expectation of reward or due to fear of punishment.

Conformity – A person may behave according to the influencer`s wish in order to gain acceptance in a social group.

Commitment – The person shows commitment towards the influencer`s wish due to his passion for work and devotion for the influencer.

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Lifestyle of a person involves his consumption pattern, his behavior in the market place, practices, habits, conventional ways of doing things, allocation of income and reasoned actions. It reflects an individual`s attitudes, values, interests and his view towards the society.  

Characteristics of lifestyle

It is a group phenomenon i.e. It influences others in a social group.

It influences all areas of one’s activities and determines the buying behavior of a person.

It implies a central life interest – A person`s main interest or profession is influenced    by his core interests e.g. Food, Fashion, Music etc.

It is affected by the social changes in the society – A person`s standard of living  and quality of lifestyle increases with the increase in the standards and quality of the  society he/she lives in.

Lifestyle of a consumer depends upon various factors and any change in one of these factors leads to a change in the behavior of the consumer. These factors are as following:-

Age

Income

Occupation

Culture

Education

Social Group

Buying Power

Activities, Interests and Opinions [AIO] Model

The products we consume are a part of our lifestyle. Therefore, our lifestyle can be determined on the basis of our consumption pattern. Lifestyle segmentation is based on activities, interests and opinions of a group. Marketeers use the AIO Model to find out about the lifestyle of the consumers.

• Activities – How one spends his/her time
• Interests – A person’s priorities and preferences make up their interest
• Opinions – One`s Feeling towards different events in life

Self concept

Self concept can be described simply as how one perceives himself and his behaviour in the market place.  It is the attitude one holds towards himself. It is not a realistic concept as an unconscious component is always present. It is a social phenomenon.

Self-image

It refers to a person’s perception of his/her self. The six types of self image are:-

Actual self – How a person actually perceives himself.

Ideal self – How you would like to see yourself.

Social self – How you think others see you.

Ideal social self – How you would like others to see you.

Expected self – How you expect to be in the future.

Situational self – A person’s self image in a specific situation.

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An Organisation structure defines how functions, power and responsibilities are distributed and coordinated in an organization. It also determines the hierarchy within the organisation and the information flow between different levels of management.

An Organisation structure is the outcome of the organizing process and usually depends the objectives and strategy of an organization.  An effective structure will result in increased profitability of the enterprise.  The need for an adequate organisation structure is felt by an enterprise whenever it grows in size or complexity. When an organisation grows, coordination becomes difficult due to the emergence of new functions and increase in structural hierarchies.  Thus for an organisation to function smoothly and face environmental changes, it becomes necessary to pay attention to its structure.

 Peter Drucker emphasized on the importance of having an good organisation structure –

“Organisation structure is an indispensable means; and the wrong structure will seriously impair business performance and even destroy it.”

Types of Organisation Structure

The organisational structure can be classified under two categories which are as follows –

(A) Functional structures – It involves grouping of jobs of similar nature under functions and organizing these major functions into separate departments . All departments report to a coordinating head. For example – in a manufacturing concern division of work into key functions will include production, purchases, marketing, accounts and personnel.  These department may be further divided into sections.  Thus a functional structure is an organisational design that groups similar or related job together.

Advantages → 

(i) A functional structure leads specialization since emphasis is placed on specific functions. This promotes efficient utilization of manpower as employees perform similar tasks within a department .

(ii) It promotes control and coordination within a department due to similarity of tasks being performed.

(iii) It helps in increasing managerial and operational efficiency and thus results in increased profit.

(iv) It makes training of employees easier as the focus is only on a limited range of skills.

Disadvantages →

(i) A functional structure may place more emphasis on objectives pursued by a functional head and less emphasis on the overall objectives of the enterprise .

(ii) It may lead to problems in coordination as information has to be exchanged across functionally differentiated departments.

(iii) There may be a conflict of interest between of two or more departments.

(B) Divisional Structure – A divisional structure is usually found in large organisations which have more than one product category or product line. It involves grouping of all functions required to produce a specific product or product line into one division or department. Each division is headed by a president or general manager who is responsible for the working of that division and is also accountable for its profits or loss. Each division is self-contained with a separate business or profit center.

Advantages →

(i) Product specialization helps in the development of varied skilled in a divisional head and this prepares him for higher positions. This is because he gains experience in all functions related to a particular product.

(ii) It promotes flexibility because each division functions as an autonomous unit which leads to faster decision making.

(iii) Revenues and costs related to different departments can be easily identified and assigned to Divisional heads accountable for profits. This provides a proper basis for performance measurement.

Disadvantages →

(i) Conflict may arise among different divisions with references to allocation of funds and further a particular division may seek to maximize its profit at the cost of other divisions.

(ii) It may lead to increase in costs since there may be a duplication of activities across products.

(iii) There may be a conflict between organisational goals and divisional goals.

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Perception is the process by which an individual selects, organizes and interprets stimuli into a meaningful and coherent picture of the world. It is how we see the world around us.

Perception occurs when sensory receptors receive stimuli and categories them and assign certain meanings to them, depending on the person’s frame of reference.  A person’s frame of reference consists of all his previous held experiences, beliefs, likes, dislikes, feelings etc.

Elements of perception →

(i) Sensation – The immediate and direct response of the sensory organs to stimuli. A stimuli is any unit of input to any of the senses.

(ii) Absolute threshold – It is the lowest level at which an individual can experience a sensation. It is the difference between “something” or “nothing”.

(iii) Differential threshold – It is the minimal difference that can be detected between two similar stimuli.  Also known as the just noticeable difference.

Weber’s Law – A law of psychophysics stating that the change necessary to produce a just noticeable difference is a constant proportion of the original stimuli.

∆ 1 / 1 = K

Where ∆ 1 = the smallest increase in the stimuli intensity from existing

              1 = existing stimuli intensity

              K = constant that varies across senses

(iv) Sublimation Perception – Perception of very weak or rapid stimuli below the level of conscious awareness.

Information flow through frame of reference

Aspects of Perception →

(A) Selection – Consumers are subconsciously selective as to what they perceive stimulus selected depends on two factors –

Consumer’s previous experiences

Consumer’s motives

Selection depends upon :

Nature of stimulus

Expectations of the customer 

Motives of the customer

Concepts of selection →

Selective exposure – Consumers seek out messages which are pleasant, messages they can sympathize with or messages which reassure them

Selective attention – Heightened awareness when stimuli meet their needs. Consumers prefer different messages and medium.

Perceptual defence – Consumers screen out stimuli which they perceive as threatening

Perceptual blocking – Consumers avoid being bombarded by advertisements and protect themselves by tuning out i.e. blocking a stimuli from conscious awareness

Factors determining attention →

Stimulus factors – The stimuli present

Size and intensity – Size and intensity of the message

Colour, movement and contrast – Colour, movement and contrast of the advertisement

Situational factors – External environment of the consumer

Psychological factors – Consumers psychological make-up and internal factors

(B) Organisation – Consumers tend to organize different stimuli into groups and perceive them as separate and distinct sensations . They organize perceptions into figure-ground relationships and form a unified picture.

Principles of organisation →

Figure and ground relationship – People tend to organize perceptions into figure and ground relationship. The ground is usually hazy. Marketers design symbols and figure so it is noticed by the stimuli.

Grouping – People group stimuli to form a unified impression or concept. It helps memory and recall.

Closure – People have a need for closure and organize perceptions to form a complete picture and often fill the missing pieces. Incomplete messages are remembered more than complete.

(C) Interpretation – A stimuli may be weak or strong depending upon its visibility, exposure, noise level, distance and viewing angles. Therefore an individual`s interpretation of a stimuli may be  influenced by the strength and positioning of the stimulus.

Perceptual distortion – It refers to the distortion of information by consumers so that it conforms to their beliefs and attitudes.

Distorting influences →

• Physical appearance
• Stereotyping
• First impressions
• Jumping to conclusions
• Halo effect

Positioning – Establishing a specific image for a brand in the consumer’s mind.

Perceptual Mapping – A research technique that enables markets to plot graphically consumer’s perceptions concerning product attributes of specific branches.

Perceived Risk – The degree of uncertainty perceived by the consumer as to the consequences of a specific purchase decision.

Types of Risk →

Functional Risk – Risk that a product may not work as expected

Financial Risk – Risk that the product will not be value for money

Psychological Risk – Risk that the product may not solve a purpose or satisfy a need

Physical Risk – Physical threats a product may pose

Time Risk – Risk that the time spent on in the product may be wasted if the product does not perform as expected.

Consumer perception process 

How consumers handle risk →

• Consumers seek for more information when they associate high degree or risk  with the purchase.
• Avoid risk by staying brand loyal
• They select products by brand image
• They rely on store image
• They buy the most expensive model
• They seek reassurance when uncertain about the product choice

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