Course: Management Theory & Practice (8506) Semester: Autumn 2018

Level: MBA (B&F)

ASSIGNMENT No. 1 Shah Faisal (BT-582140)

Q. 1 What is Management and discuss evolution of management theories.

 What is Management?
Management involves coordinating and overseeing the work activities of others so that their
activities are completed efficiently and effectively.
Coordinating and overseeing the work of others is what distinguishes a managerial position
from a no managerial one.
Efficiency is getting the most output from the least amount of inputs in order to minimize
resource costs. Efficiency is often referred to as “doing things right” (see Exhibit 1-3).
Effectiveness is completing activities so that organizational goals are attained and is often
described as “doing the right things” (see Exhibit 1-3).
 Management Functions/Management Process.
Henri Fayol, a French industrialist in the early 1900s, proposed that managers perform five
management functions: POCCC (planning, organizing, commanding, coordinating, and
controlling).
Over time, Fayol’s five management functions have been reorganized into four functions,
which provide a foundation for the organization of many current management textbooks.
Planning involves defining goals, establishing strategies for achieving those goals, and
developing plans to integrate and coordinate activities.
Organizing involves arranging and structuring work to accomplish the organization’s goals.
Leading involves working with and through people to accomplish organizational goals.

Controlling involves monitoring, comparing, and correcting work performance.

In practice, managing is not always performed in a sequence as outlined above. Since these
four management functions are integrated into the activities of managers throughout the
workday, they should be viewed as an ongoing process.
 WHO ARE MANAGERS AND WHERE DO THEY WORK?
Managers may not always be what we expect. Today’s managers range from 18 to 80, they‘re
found in a variety of different types of organizations, and they perform a variety of jobs from

1
Course: Management Theory & Practice (8506) Semester: Autumn 2018

Level: MBA (B&F)

ASSIGNMENT No. 1 Shah Faisal (BT-582140)

the top to the bottom of the organization. Statistics show an increasing number of women in
management; however, while their number is increasing, it is mostly in the area of lower and
middle management, not top management. Similarly, only 20 (4%) were minorities.
 Who Is a Manager?
A. The changing nature of organizations and work often requires employees in formerly
no managerial jobs to perform managerial activities. Students who are preparing for careers
on any organizational level can benefit from acquiring management skills. Today’s employees
need to be cross-trained and multi-skilled.
B. How do we define a manager? A manager is someone who coordinates and oversees
the work of other people so that organizational goals can be accomplished. However, keep in
mind that managers may have additional work duties not related to coordinating the work of
others.
C. Managers can be classified by their level in the organization, particularly in
traditionally structured organizations—those shaped like a pyramid (see Exhibit 1-1).
1. First-line (or front-line) managers (often called supervisors) are typically involved
with producing the organization’s products or servicing the organization’s customers. These
managers are located on the lowest level of management.
2. Middle managers include all levels of management between the first level and the
top level of the organization. They may have titles such as regional manager, project leader,
store manager, or division manager.

3. Top managers include managers at or near the top of the organization who are
responsible for making organization-wide decisions and establishing plans and goals that
affect the entire organization.
 Where Do Managers Work?
A. An organization is a deliberate arrangement of people to accomplish some specific
purpose. Organizations share three common characteristics (See Exhibit 1-2): (1) each has a

Page 2 of 22
Course: Management Theory & Practice (8506) Semester: Autumn 2018

Level: MBA (B&F)

ASSIGNMENT No. 1 Shah Faisal (BT-582140)

distinct purpose; (2) each is composed of people; and (3) each develops some deliberate
structure so members can do their work.
Although these three characteristics are important in defining what an organization is, the
concept of an organization is changing. These changes include: flexible work arrangements,
employee work teams, open communication systems, and supplier alliances. Organizations
are becoming more open, flexible, and responsive to changes.
 HOW IS THE MANAGER’S JOB CHANGING?
Security threats, corporate ethics scandals, global economic and political uncertainties, and
technological advancements should be discussed. While all managers will not have to manage
under tragically demanding circumstances, how managers manage in today’s workplace is
changing. These issues are summarized in Exhibit 1-8.
 Focus on the Customer.
With all of the technology available to managers, it is possible now more than ever to lose
touch with customers. Face-to-face contact is being replaced by e-mails and text messages. In
a service-oriented economy, like the United States, the need to deliver high quality customer
service is the basis for competitiveness. As a result, many managers are re-discovering the
importance of a customer-responsive organization where employees are friendly, courteous,
accessible, and responsive to customer needs.
 B. Focus on Technology.
Cloud computing, social media, and robotics are all changing how things get done in the
workplace. Managers need to get employees on board with new technology and ensure that
they are comfortable with it, can use it, and understand how it improves their lives.
 C. Focus on Social Media.
The new frontier in communication is social media. Platforms such as Facebook and Twitter
have moved beyond personal uses to work and managers need to understand their power and
dangers. In some cases, social media can enhance customer relationships, help better manage
customers, and tap into talent. But, managers need to remember that social media is a tool
that needs to be managed to be beneficial.
 D. Focus on Innovation.

Page 3 of 22
Course: Management Theory & Practice (8506) Semester: Autumn 2018

Level: MBA (B&F)

ASSIGNMENT No. 1 Shah Faisal (BT-582140)

Innovation is critical to today’s organizations and managers. All organizations innovate;

however, a problem for organizations is working to get all employees involved in the
innovation process. Managers can respond to this need by creating a “team close,” a time
when all employees are scheduled to close the store and leave together. This helps create an
attitude of working together and commitment.
 E. Focus on Sustainability.
Today’s organizations agree that the time has come for managers to embrace both
sustainability and green management. Sustainability has been defined as a company’s ability
to achieve its business goals and increase long-term shareholder value by integrating
economic, environmental, and social opportunities into its business strategies.
 F. Focus on the Employee.
Companies like L.L. Bean recognize the importance of treating employees well not only
because it’s simply the right thing to do but also because it is good business. In these
progressive organizations, managers regularly provide performance feedback that serves as
an evaluation of an employee’s performance and provides the foundation for discussing
developmental opportunities. Successful managers often embrace work-life practices and
provide encouragement to employees who wish to use them.
Rewards and Challenges of Being a Manager (See Exhibit 1-10).
1. Challenges
a. Being a manager is hard work and often involves more clerical duties than managerial
responsibilities. Managers often must deal with a range of personalities, make do with limited
resources, and work in chaotic and uncertain situations.
b. Managers may have difficulty in effectively blending the knowledge, skills,
ambitions, and experiences of a diverse group of employees.
c. A manager’s success typically is dependent on others’ work performance.
2. Rewards
a. Managers have an opportunity to create a work environment in which organizational
members can do their work to the best of their ability and help the organization achieve its
goals.

Page 4 of 22
Course: Management Theory & Practice (8506) Semester: Autumn 2018

Level: MBA (B&F)

ASSIGNMENT No. 1 Shah Faisal (BT-582140)

b. Managers often receive recognition and status in the organization and in the larger
community; influence organizational outcomes; and receive appropriate compensation.
c. Knowing that their efforts, skills, and abilities are needed by the organization gives
many managers great satisfaction.
The Evolution of Management Theory
 Introduction
The first know management idea was recorded in 500B.C when Sumerian traders
develop written records for government and commercial use. The application of management
is also evident in the Egyptian civilization as early as 4000-3000 B.C. The pyramid of Egypt
built with millions of stone blocks by utilizing the services of people are the testimonials of a
coordinated effort on an extremely large scale .Creation of such huge structure would have
certainly required extensive planning ,decision-making, organizing men and materials and
supervision.
Early Writings on Management
People have been change shaping and reshaping organization for many centuries.
Works of several writers in the area of governance of kingdoms and man management created
a literature that assisted in the development of modern

management theories. The writers was writing about how to make organization effective and
efficient. The early leadership and management models were provided by military, political,
mythological and religious organizations. some early writing that subsequently influenced the
development of managerial thought are described below.
Sun Tzu’s The Art of War: This book on military strategy was written by Chinese
general Sun Tzu in the 16th century BC .But, the writings in the book very well been used for
managerial purposes. The book recommends that success can be archived by being aware of
utilizing the organization’s strength and utilizing them to exploit the weaknesses of the rival
or enemy. It emphasizes the importance of discipline in order to get the thing done through a
coordinated group effort.

Page 5 of 22
Course: Management Theory & Practice (8506) Semester: Autumn 2018

Level: MBA (B&F)

ASSIGNMENT No. 1 Shah Faisal (BT-582140)

Although Sun Tzu, Chanukah and Machiavelli was trying to development a theory of
management, insights teach us an important lesson about Management. And its help to think
about management of organization.
 Effect of the Industrial Revolution on Management
The industrial Revolution made a significant contribution to the development of
management thought before the 20th century. The substitution of human power with machine
power made it possible to manufacture goods in large numbers in factories more
economically. Consequently, there emerged large-scale business which required managerial
skills to produce goods in an efficient and profitable manner. The growing size and
complexity of business organization led to the requirement of managers to various business-
related task, like assessing the demand of goods, ensuring the availability of raw materials,
assigning the task to factory workers, supervising the production and sales of goods,
maintaining quality standard etc.
The first textbook of management was written by J. Duncan in 1911 and the early
comprehensive theories on management appeared around 1920.The discipline of management
got a strong foundation. When Harvard University became one of the first American
universities to offered graduate degree in business management in 1908.The curriculum for
teaching management was based on the analysis of relevant real situations in the business
world.

 Different school of management thought

Early Management Theory include Scientific management theory school, classical
organization theory school, the behavioral school, and management science school. Keep one
important fact in mind: The managers and Theorists who developed this assumption about
human relationship.

 The scientific Management school

Scientific Management theory arose in part of from the need to increase productivity.
In the United States especially, skilled labor was short supply at the beginning of the
twentieth century. To increase the productivity was to increase efficiency of workers. There

Page 6 of 22
Course: Management Theory & Practice (8506) Semester: Autumn 2018

Level: MBA (B&F)

ASSIGNMENT No. 1 Shah Faisal (BT-582140)

for, Frederick Taylor, Henry Gantt, and Frank and Lillian Gilbert devised the body of
principle know as scientific management theory.

Q. 2 Discuss steps involved for effective organizing.

 Introductions:
Main steps involved in the process of organizing an Organization are: 1. Identification
and Division of Work 2. Departmentalization 3. Assignment of Duties 4. Establishing
Reporting Relationships!
1. Identification and Division of Work:
The process of organizing starts with the identification and division of work. The
whole work is to be divided into manageable activities so that duplication is avoided and
work can be completed as per predetermined goals.
Division of work facilitates specialization in work and skills which are essential, as no
individual can perform the entire work efficiently and effectively.
For example, the work in a bank may be divided into four simple activities Mr. Rahim looks
after receiving cash, Mr. Jacob takes care of disbursing cash, Mr. Par minder gets involved in
processing of loan applications and Mr. Ram ensures sanctioning of loans
Here, work of Mr. Rahim and Mr. Jacob being similar in nature can be grouped under
job of Cash Clerk while work of Mr. Par minder and Mr. Ram can be grouped under job of
Loan Officer. This is how division of work in an organization can be accomplished.
2. Departmentalization:
Departmentalization refers to the process of grouping the activities of similar nature under
same departments. This facilitates specialization and coordination in the organization.
 Following are the various ways of departmentalization:
(i) On the basis of functions:
Here, activities are grouped into offices/branches on the basis of four directions (or locations)
North, East, West, South (NEWS) e.g., Southern Zone, Eastern Branch etc.
3. Assignment of Duties:
Once the departments have been formed; the next step is to assign the work to the
employees according to their skills and competencies. In order to ensure effective

Page 7 of 22
Course: Management Theory & Practice (8506) Semester: Autumn 2018

Level: MBA (B&F)

ASSIGNMENT No. 1 Shah Faisal (BT-582140)

performance in an organization, it is essential that a balance is created between the nature of a

job and ability of the employee responsible for that job.

4. Establishing Reporting Relationships:

Establishing responsibility relationships in an organization structure implies the
allocation of authority and responsibility among employees of the enterprise in such a way
that each person should know who is responsible to whom and for what.
It is essential that there should be no disparity between authority granted and responsibility
imposed. It further creates hierarchy management in which top management enjoys
maximum authority and as one moves downward, the authority decreases.
This step involves providing information to the workers regarding who they will be
receiving orders from and who they will be reporting to. This helps in creating hierarchy
structure among various departments. Further, establishing reporting relationships facilitates
coordination also amongst various departments.
For example, Sales Manager will inform about sales forecast to the General Manager
who will, on the basis of that forecast, direct Production Manager to arrange production of a
certain quantity within a specified period etc.

Q. 3 Describe rational model of decision making with any two suitable

examples.

 Introduction:
Rational decision making is an important skill to possess, especially in the digital
marketing industry. Humans are inherently emotional, so our biases and beliefs can blur our
perception of reality. Fortunately, data sharpens our view. By showing us how our audience
actually interacts with our brand, data liberates us from relying on our assumptions to
determine what our audience likes about us.

Page 8 of 22
Course: Management Theory & Practice (8506) Semester: Autumn 2018

Level: MBA (B&F)

ASSIGNMENT No. 1 Shah Faisal (BT-582140)

Rational Decision Making Model: 7 Easy Steps with an Example

 Verify and define your problem.

To prove that you actually have a problem, you need evidence for it. Most marketers
think data is the silver bullet that can diagnose any issue in our strategy, but you actually need
to extract insights from your data to prove anything. If you don’t, you’re just looking at a
bunch of numbers packed into a spreadsheet.
To pinpoint your specific problem, collect as much data from your area of need and analyze it
to find any alarming patterns or trends.
 Example:

“After analyzing our blog traffic report, we now know why our traffic has plateaued
for the past year -- our organic traffic increases slightly month over month but our email and
social traffic decrease.”

 2. Research and brainstorm possible solutions for your problem.

Expanding your pool of potential solutions boosts your chances of solving your
problem. To find as many potential solutions as possible, you should gather plenty of
information about your problem from your own knowledge and the internet. You can also
brainstorm with others to uncover more possible solutions.

 Example:

Potential Solution 1: “We could focus on growing organic, email, and social traffic all at the
same time."

Potential Solution 2: “We could focus on growing email and social traffic at the same time --
organic traffic already increases month over month while traffic from email and social
decrease.”

Page 9 of 22
Course: Management Theory & Practice (8506) Semester: Autumn 2018

Level: MBA (B&F)

ASSIGNMENT No. 1 Shah Faisal (BT-582140)

Potential Solution 3: "We could solely focus on growing social traffic -- growing social
traffic is easier than growing email and organic traffic at the same time. We also have 2
million followers on Facebook, so we could push our posts to a ton of readers."

Potential Solution 4: "We could solely focus on growing email traffic -- growing email
traffic is easier than growing social and organic traffic at the same time. We also have
250,000 blog subscribers, so we could push our posts to a ton of readers."

Potential Solution 5: "We could solely focus on growing organic traffic -- growing organic
traffic is easier than growing social and email traffic at the same time. We also just
implemented a pillar-cluster model to boost our domain’s authority, so we could attract a ton
of readers from Google."

 3. Set standards of success and failure for your potential solutions.

Setting a threshold to measure your solutions' success and failure lets you determine
which ones can actually solve your problem. Your standard of success shouldn’t be too high,
though. You’d never be able to find a solution. But if your standards are realistic,
quantifiable, and focused, you’ll be able to find one.

 Example:

“If one of our solutions increases our total traffic by 10%, we should consider it a
practical way to overcome our traffic plateau.”

 4. Flesh out the potential results of each solution.

Next, you should determine each of your solutions’ consequences. To do so, create a
strength and weaknesses table for each alternative and compare them to each other. You
should also prioritize your solutions in a list from best chance to solve the problem to worst
chance.

 Example:

Page 10 of 22
Course: Management Theory & Practice (8506) Semester: Autumn 2018

Level: MBA (B&F)

ASSIGNMENT No. 1 Shah Faisal (BT-582140)

Potential Result 1: ‘Growing organic, email, and social traffic at the same time could
pay a lot of dividends, but our team doesn’t have enough time or resources to optimize all
three channels.”

Potential Result 2: “Growing email and social traffic at the same time would marginally
increase overall traffic -- both channels only account for 20% of our total traffic."

Potential Result 3: “Growing social traffic by posting a blog post everyday on Facebook is
challenging because the platform doesn’t elevate links in the news feed

and the channel only accounts for 5% of our blog traffic. Focusing solely on social would
produce minimal results.”

Potential Result 4: “Growing email traffic by sending two emails per day to our blog
subscribers is challenging because we already send one email to subscribers everyday and the
channel only accounts for 15% of our blog traffic. Focusing on email would produce minimal
results.”

Potential Result 5: “Growing organic traffic by targeting high search volume keywords for
all of our new posts is the easiest way to grow our blog’s overall traffic. We have a high
domain authority, Google refers 80% of our total traffic, and we just implemented a pillar-
cluster model. Focusing on organic would produce the most results.”

 5. Choose the best solution and test it.

Based on the evaluation of your potential solutions, choose the best one and test it. You can
start monitoring your preliminary results during this stage too.

 Example:

“Focusing on organic traffic seems to be the most effective and realistic play for us. Let’s test
an organic-only strategy where we only create new content that has current or potential
search volume and fits into our pillar cluster model.”

Page 11 of 22
Course: Management Theory & Practice (8506) Semester: Autumn 2018

Level: MBA (B&F)

ASSIGNMENT No. 1 Shah Faisal (BT-582140)

 6. Track and analyze the results of your test.

Track and analyze your results to see if your solution actually solved your problem.

 Example:

“After a month of testing, our blog traffic has increased by 14% and our organic traffic has
increased by 21%.”

 7. If the test solves your problem, implement the solution. If not, test a new
one.

If your potential solution passed your test and solved your problem, then it’s the most
rational decision you can make. You should implement it to completely solve your current
problem or any other related problems in the future. If the solution didn’t solve your problem,
then test another potential solution that you came up with.

 Example:
“The results from solely focusing on organic surpassed our threshold of success. From
now on, we’re pivoting to an organic-only strategy, where we’ll only create new blog content
that has current or future search volume and fits into our pillar cluster model.”

As humans, it’s natural for our emotions to hijack your decision making process. And
that’s okay. Sometimes, emotional decisions are better than logical ones. But when you really
need to prioritize logic over emotion, arming your mind with the rational decision making
model can help you suppress your emotion bias and be as objective as possible.

Q. 4 Discuss organizational change and development.

Page 12 of 22
Course: Management Theory & Practice (8506) Semester: Autumn 2018

Level: MBA (B&F)

ASSIGNMENT No. 1 Shah Faisal (BT-582140)

 Nature of Organizational Change

The term change refers to an alteration in a system whether physical,
biological, or social thus organizational change is the alteration of work environment
in the organization. Organizational change may have following features:
 1. When change occurs in any part of organization it disturbs the old equilibrium of
organization.
 2. Any change in organization can effect either whole organization or some part of
organization directly or indirectly.
 3. Organizational change is a continuous process.

 Causes of Organization Change:

1. Government policies - sometimes the government policies change due to which an
organization has to bring change. For e.g. when computerization came into existence
government banks make their employee change from manual process to computerized so
organization has to go for a change.
2. Competition - in order to sustain in a market any organization has to be competitive in
nature as there is cut throat competition if one company is going for innovation other has to
also go for it. For example in case of Coke and Pepsi if one goes for new advertisement
another will also go for same and bring change in their advertisement policies.
3. Technology - today is the world of new innovation day by day new technologies are
emerging for example now a days computers have become obsolete and laptops and LCD’s
have emerged.so change is must.
4. Change in customer requirement - customer is a king.so these days companies produce
product as per customer demand. Accordingly every time a company makes changes in the
product so change is must.
5. Change in managerial personnel - employees come and leave organization every time a
new manager will bring his own new ideas and make employees according to that and this is
how change occurs in organization.
6. Deficiency in existing organization - sometimes the managers in the organization think
that there is deficiency in the existing organization system and in order to compete and to

Page 13 of 22
Course: Management Theory & Practice (8506) Semester: Autumn 2018

Level: MBA (B&F)

ASSIGNMENT No. 1 Shah Faisal (BT-582140)

survive there must be change in the organization. For example change in system from
centralization to decentralization.

 Human Reactions to Change

When change is initiated both manager and employees react to it. Though human
reaction to change depends on the outcomes of the change particularly its impact on their
need satisfaction, often the attitudes of people play as a significant role in deciding human
response to change.
 1. Resistance-people resist a change when they have a feeling that the change is
unfavorable for them. Resistance to change becomes more forceful when the people
have feeling that through resistance they may eliminate the change.
 2. Indifference-sometimes people don’t react to change either positively or
negatively. The reason may be that either they fail to interpret the outcome of the
change on their need satisfaction, or they feel that it has nothing to do with them.
 3. Acceptance-if they perceive that the change is favorable for them they will accept
the change. They can do it in two ways. First they may accept change and adopt it.
Second they may anticipate change and plan for it.

 Resistance to Change

Resistance to change is very common phenomenon. Not only employees but

organizational members such as top management people will also resist change

 Individual factors for resistance to change:

 1. Problem of adjustment - perhaps most important factor for resistance to change is
the problem of adjustment. Each individual tries to maintain a sort of equilibrium both at
formal level as well as at informal level.
 2. Economic reason - people resist to change if they feel that it is likely to affect
them unfavorably so far as their economic needs are concerned.

Page 14 of 22
Course: Management Theory & Practice (8506) Semester: Autumn 2018

Level: MBA (B&F)

ASSIGNMENT No. 1 Shah Faisal (BT-582140)

 3. Emotional factor - there are many emotional factors which resist change,
especially if the past experience with the change level not been positive.
 4. Fear of unknown - change is future oriented. Therefore some amount of
uncertainty is always there. People will not ready to accept change because of two reasons.
First, people may derive benefits or otherwise in future while they have to pay the cost at the
present. Second, future is uncertain and the impact may be different from the expectations.
 5. Ego defensiveness - sometimes people resist change because it is ego deflating.
Everyone has some ego it is the state of a person’s way of behaving, thinking, and feeling any
attack on ego will be resisted.
 6. Social displacements - whenever change take place it often results in social
displacement of people like breaking of informal groups and relationship.as a result there is a
possibilities for the employees to experience psychological let down therefore they dislike
change.

 Need of Organizational Development

Organizational development is a dynamic technique.it uses the behavioral science knowledge
to cope up with the change. Every organization wants to compete and to survive in the long
run so organizational development plays a vital role to fulfill the need of survival of
organization.
1. Training for change - change is compulsory in the organization to survive in the long run
so organizational development creates an easy environment in the organization to bring
changes that it supports training.
2. Responsive organizational culture - organizational development helps in making the
organizational culture more responsive.it works in the all the direction of organization.

 Benefits of organizational development

1. It gives more emphasis on human resources rather than any other physical resources.
2. It helps in development of human resources by initiating change.
3. It provides opportunities and challenge for the human beings to use their abilities.

Page 15 of 22
Course: Management Theory & Practice (8506) Semester: Autumn 2018

Level: MBA (B&F)

ASSIGNMENT No. 1 Shah Faisal (BT-582140)

4. It helps to achieve organizational effectiveness.

Limitation of Organizational Development
1. Organizational development based on behavioral science approach which itself has to
many limitations.
2. Organizational development is applicable on the basis of circumstances available in
organization.so if the circumstances are not proper, it can put limitation on effectiveness
of organizational development.

 Themes of Organizational Development

1. Planned change - change means the new state of things and is different from old state of
things. Change is everywhere due to internal as well as external factors. External factors may
include competition; customer and technology internal factor may include new market
opportunities, increasing diverse work force new direction etc.
2. Consultant’s role/distinctive consulting method - leader in organization hire
an organizational development practitioner to solve the problem. The expert establishes

relationship with the members of the organization. The practitioner does not provide any
solution to the problem but he provides the learning to the members that how they should
solve the problem by themselves.
3. Action research model - it is described as a process that involves series of events and
action.

 Key aspects of action research model:

1. Diagnoses.
2. Data gathering.
3. Feedback of the client group.
4. Data discussion.
5. Work by the client group.

Page 16 of 22
Course: Management Theory & Practice (8506) Semester: Autumn 2018

Level: MBA (B&F)

ASSIGNMENT No. 1 Shah Faisal (BT-582140)

6. Action plug.
7. Action.

Q. 5 Define leadership and discuss contingency approach of leadership.

 Contingency Approach Leadership

 Contingency Theory of Leadership.

This style of leadership deals with finding the best match between a leader and a
situation. How does the leader's style fit the context of the situation? Effective leadership is
contingent on matching a leader's style to the right setting. Contingency theory is concerned
with styles and situations and effectively matching the leader and the situation.

In contingency theory of leadership, the success of the leader is a function of various

contingencies in the form of subordinate, task, and/or group variables. The effectiveness of a
given pattern of leader behavior is contingent upon the demands

imposed by the situation. These theories stress using different styles of leadership appropriate
to the needs created by different organizational situations. No single contingency theory has
been postulated.

Within the contingency theory, leadership styles can be either task-motivated or

relationship motivated. Task leaders are primarily concerned with attaining a goal, whereas
relationship leaders are concerned with developing close interpersonal relations.

 Contingency theory suggests that situations can be characterized by

assessing three factors:

Page 17 of 22
Course: Management Theory & Practice (8506) Semester: Autumn 2018

Level: MBA (B&F)

ASSIGNMENT No. 1 Shah Faisal (BT-582140)

1. Leader-member relations refer to the group atmosphere and to the degree of

confidence, loyalty, and attraction that the followers feel for their leader.
2. Task structure refers to the degree to which the requirements of a task are clear and
spelled out. This includes:

Task requirements are clear and known by all.

The path to success has few alternatives.

The completion of the task can be clearly demonstrated.

Only a limited number of correct solutions exist.

A highly structured task is like cleaning a camera.

A highly unstructured task is like organizing a community vegetable garden.

3. Position power refers to the amount of authority a leader has to reward or to

punish followers. Does the leader have the power to hire and fire people? Can the
leader give something to the followers as a reward?

Favorable situations are when there is a positive relationship between the followers and
leader, the task is clearly defined, and there is a clear leader position power.

Unfavorable situations are when there is a disconnect between the followers and leader, task
is unclear, and the leader's position power is unclear.

Leader-
Member Good Poor
Relations
Task Structure High Structure Low Structure High Structure Low Structure
Strong Weak Strong Weak Strong Weak Strong Weak
Position Power
Power Power Power Power Power Power Power Power

Page 18 of 22
Course: Management Theory & Practice (8506) Semester: Autumn 2018

Level: MBA (B&F)

ASSIGNMENT No. 1 Shah Faisal (BT-582140)

1 2 3 4 5 6 7 8
Prefered Low LPCs High LPCs Low LPCs
Leadership Middle LPCs

 Style

The LPC refers to Least Preferred Co-worker measurement. The LPC assessment is done by
the leader to measure their leadership style preference. Leaders with a high LPC tend to
focus more on relationship behaviors and leaders with a low LPC tend to focus more on task
behaviors. A full explanation is below.

Contingency leadership will be effective in certain situations. People who are very
task oriented will do well when conditions are either very favorable or very unfavorable. In
favorable situations the leader can focus on the task and not pay

attention to the maintenance. When things are very unfavorable, a task related person can
provide order and structure to help the group get going again.

When conditions are in the middle, you want a leader that will focus on relationships
more than task. There is some degree of certainty but things are neither completely under
their control nor out of their control.

When a leader is in a mismatched situation, they will be less effective. Reasons for
this include an increase in stress, the leader reverting to less mature behavior, and this leads
to poor results.

A part of this theory is that leaders will not be effective in all situations.

This theory focuses on the importance of the relationship between the demands of
various situations and the leader's style.

Page 19 of 22
Course: Management Theory & Practice (8506) Semester: Autumn 2018

Level: MBA (B&F)

ASSIGNMENT No. 1 Shah Faisal (BT-582140)

This is a predictive approach that provides a framework for examining a situation and
then applying the right type of leadership. This will help organizations place leaders in
situations that are ideal for their leadership style.

 Fiedler's Least Preferred Co-worker (LPC) Theory

 Assumptions:

1. Leaders prioritize between task-focus and people-focus.

2. Relationships, power and task structure are the three key factors that drive effective
styles.

Fiedler identified the a Least Preferred Co-Worker scoring for leaders by asking them
first to think of a person with which they worked that they would like least to work with
again, and then to score the person on a range of scales between positive

factors (friendly, helpful, cheerful, etc.) and negative factors (unfriendly, unhelpful, gloomy,
etc.). A high LPC leader generally scores the other person as positive and a low LPC leader
scores them as negative.

High LPC leaders tend to have close and positive relationships and act in a supportive
way, even prioritizing the relationship before the task. Low LPC leaders put the task first and
will turn to relationships only when they are satisfied with how the work is going.

Three factors are then identified about the leader, member and the task, as
follows:

 Leader-Member Relations: The extent to which the leader has the support and
loyalties of followers and relations with them are friendly and cooperative.
 Task structure: The extent to which tasks are standardized, documented and
controlled.

Page 20 of 22
Course: Management Theory & Practice (8506) Semester: Autumn 2018

Level: MBA (B&F)

ASSIGNMENT No. 1 Shah Faisal (BT-582140)

 Leader's Position-power: The extent to which the leader has authority to assess
follower performance and give reward or punishment.
 The best LPC approach depends on a combination of their three. Generally, a high
LPC approach is best when leader-member relations are poor, except when the task is
unstructured and the leader is weak, in which a low LPC style is better.

Leader
# Task structure Position- power Most Effective
Member Rel
1 Good Structured Strong Low LPC

2 Good Structured Weak Low LPC

3 Good Unstructured Strong Low LPC

4 Good Unstructured Weak High LPC

5 Poor Structured Strong High LPC

6 Poor Structured Weak High LPC

7 Poor Unstructured Strong High LPC

8 Poor Unstructured Weak Low LPC

This approach seeks to identify the underlying beliefs about people, in particular whether the
leader sees others as positive (high LPC) or negative (low LPC). The neat trick of the model
is to take someone where it would be very easy to be negative about them.

 Contingency theory of decision making

According to this model, the effectiveness of a decision procedure depends upon a number of
aspects of the situation: the importance of the decision quality and acceptance; the amount of
relevant information possessed by the leader and subordinates; the likelihood that
subordinates will accept an autocratic decision or cooperate in trying to make a good decision

Page 21 of 22
Course: Management Theory & Practice (8506) Semester: Autumn 2018

Level: MBA (B&F)

ASSIGNMENT No. 1 Shah Faisal (BT-582140)

if allowed to participate; the amount of disagreement among subordinates with respect to

their preferred alternatives.

Page 22 of 22