Running head: INFLUENCE OF LEADERSHIP1

Influence of Leadership on Employee Productivity

Tan Jun Yuan (SCSJ0014070)

Ngiam Ai Leng Alicia (SCSJ0007980)

Nicholas Goh Yoong Ern (SCSJ0011294)

Ng Chii Wai (SCSJ1105018)

Perananth a/l Chandran (SCSJ0014294)

BA210: Management Principles

SEGi College Subang Jaya

Norlinda Nordin

INFLUENCE OF LEADERSHIP 2

Abstract.

The willingness of a leader in communicating knowledge (de Vries, van

den Hooff, & de Ridder, 2006) with his subordinates actually increases

employees sense of motivation so they produce highly efficient and ’effective outcomes. Leadership styles have a huge impact on the

efficiency of a team and an organization as a whole, because they act as

(Gilley, Gilley, & McMillan, 2009) change agents. When leaders

communicate with their employees, (De Cremer, 2006) they have the

power to motivate them. This ability to motivate subordinates is related

to the three types of leadership styles: Theory X, Theory Y, and Theory Z.

According to Koontz & O Dennell (1970), leaders who utilize any forms of’leadership can be categorized into: (a) autocratic leaders, whereby leaders

have high concern for productivity but low concern for people, (b)

benevolent leaders, whereby leaders have a high concern for people but

low concern for productivity, and (c) team leaders, whereby leaders have

high concern for both productivity and their employees. In addition, the

three leadership styles are explored in depth along several theories of

motivation.

INFLUENCE OF LEADERSHIP 3

Contents.

Titles page . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . pg 1

Abstract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . pg 2

Contents page . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . pg 3

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . pg 4

Theory X . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . pg 4

Theory Y . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . pg 6

Theory Z . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . pg 8

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . pg 12

References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . pg 13

Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . pg 20

INFLUENCE OF LEADERSHIP 4

Introduction: A Word on Productivity

According to Husbands (Organisational productivity and factors that affect it, n. d.), the main

factors that influence work productivity not only curtains the employee himself but also

encompasses availability of the supervisors. Bala (2011) defined productivity as the ratio “of output (product) and input (performance) factors . Employees need ”to be more motivated

to do a specific task or achieve an organizational goal; they have to be (Husbands, n. d.) well-

informed about information pertaining to such objectives. Thus, managers must be able to

communicate clearly and allow their staff time to comprehend the job in detail. Assessment

points for managers and supervisors (Kimball & Nink, n. d.) to engage employees in their job

include developing strong relationships with them (the employees), settingdirect

INFLUENCE OF LEADERSHIP 5

communications systems, setting a clearly defined direction for their followers, instilling

strong commitment, and providing opportunities for learning and growth.

Theory X Leadership

Theory X is the theory of human motivation developed and

created by Douglas McGregor at the MIT Sloan School of

Management in the 1960s and the theory that has been proven

counter effective in most modern practice and was linked to the

management and leadership. The developer of Theory X, Douglas

McGregor states that the employees of Theory X are consider as

lazy or dislike the work and will avoid the job to the extent

possible. Therefore, the management believes that the workers

are need to be continually controlled, coerced, and threatened

with punishment to get the work done. Besides that, the

workers have or show little ambition or no ambition without an

enticing incentive program. They would like to prefer to avoid

the responsibility and choose security above everything else.

Theory X manager will blame the employees rather that the

processes when things were go wrong without consider the

causes. According to the Michael J. Papa, the Theory X manager

will rely on heavily on coercion and threat to gain their

employee’s compliance if the organizational goals are to be

INFLUENCE OF LEADERSHIP 6

met. Theory X manager think that the sole purpose of the

employee’s interest in the job is the money. The employees may

get the rewards from the organizations when they are performed

well and praise the employees in order to manipulate them.

Douglas McGregor also found that the theory X manager was

intolerant, poor listener, anti-social , does not team-build,

would like to issues threats to make people follow their

instructions and unconcerned about staff welfare or morale. The

one major flow of the theory X management style is more likely

to cause the diseconomies of scale in the large business.

Douglas McGregor’s work is based upon the Maslow’s

Hierarchy of Needs. In that he had assumed that the theory X

manager assumptions is related to Maslow’s hierarchy lower of

needs theory and grouped the theory X into the lower-order

needs which are the physiological needs, safety needs and

belongingness needs. Abraham Maslow assumes that the human

needs were arranged in a hierarchical order and could be

divided into two major groups which are the basic needs and the

meta-needs or the higher order needs (Clark, 1995). Theory X

of McGregor is the description of the characteristic of a

person that still at the first three needs level that in the

INFLUENCE OF LEADERSHIP 7

Maslow’s hierarchy. The basis of Maslow’s theory is that

people are motivated by unsatisfied needs and that certain

lower needs have to be satisfied before the higher needs can be

addressed. McGregor had explained that the assumptions of

Theory X were led to the ineffective management (Helms, 2006).

Abraham Maslow explained that a person would not be too much

interested in the higher level needs before the basic level

needs and the person’s interest towards lower needs which is

physiological would decreased. Physiological were the first

basic needs of human beings that related with the theory X

manager such as food, water, affection, self-esteem, basic

issues of survival. Because the person will strive to make up

the deficiency if they are not met by an individual, these

general needs also known as deficiency needs. These needs

often listed in the hierarchical order in order to show the

basic needs was on the bottom and was also the first basic that

need to be met before the higher order needs which is the

esteem needs and self-actualization needs.

The next basic needs in the Maslow’s hierarchy needs were

the safety needs. These needs are included the freedom from

the danger, cares or wants, anxiety. Other than that, this

INFLUENCE OF LEADERSHIP 8

needs was also reflected the needs for the safe jobs, job

security and the fringe benefits. The third lower basic needs

that need to be satisfied by the workers were the belongingness

needs. These needs are included the needs for the belonging,

affection and love (McLeod,S.A. 2007). These needs reflected

the desire of people that to be accepted by the peers, be a

part of group, have friendships and be loved. These needs

have also reflected the needs of workers in the organization

such as having participation in a work group and the good

relationships with the co-workers. Abraham Maslow described

that this social needs was the less basic than the

physiological and the security needs.

Theory Y Leadership

In this theory, management assumes employees may be

ambitious and self-motivated and exercise self-control. It is

believed that employees enjoy their mental and physical work

duties. According to them, work is as natural as play, it is

kind of work-life balance. They possess the ability for

creative problem solving, but their talents are underused in

most organizations. Given the proper conditions, Theory Y

managers believe that employees will learn to seek out and

INFLUENCE OF LEADERSHIP 9

accept responsibility and to exercise self-control and self-

direction in accomplishing objectives to which they are

committed.

With Theory Y assumptions, management's role is to develop

the potential in employees and help them to release that

potential towards common goals. Management is responsible for

organizing the elements of productive enterprise-money,

materials, equipment, and people in the interests of economic

ends. People are not by nature passive or resistant to

organizational needs. They have become so as a result of

experience in organizations. It is a responsibility of

management to make it possible for people to recognize and

develop these human characteristics for themselves. Thus,

Theory Y has at its core the assumption that the physical and

mental effort involved in work is natural and that individuals

actively seek to engage in work to achieve their goals.

Communication also plays an important role in this theory.

In Theory X, communication flow is more likely to be downward

from manager to the subordinates. Conversely, theory Y

leadership tends to have a upward direction. They empower

subordinates to seek responsibility and be more committed to

INFLUENCE OF LEADERSHIP 10

goal achievement. So what they need to do is wait for the

result and follow up.

McGregor called this style of leadership "soft" and

identified its methods as permissiveness and need satisfaction.

The manager is more likely to act as a coach rather than a

judge, focusing on how performance can be improved in the

future rather than on who was responsible for past performance.

As a result, some critics have suggested that, rather than

concern for employees, Theory Y style managers were simply

engaged in a seductive form of manipulation. If Theory Y is

underused, this might lead a company to have ineffective and

inefficient productivity rendering, goals unachievable.

“I choose a lazy person to do a hard job. Because a lazy

person will find an easy way to do it.”― Bill Gates

This is the best example of Theory Y. If a manager can

manage his inappropriate workers to complete the hard job in

their own way, the manager has successfully utilize Theory Y

leadership.

Theory Z Leadership

William Ouchi, the formulator of Theory Z (Byron, 1981), took a different approach to

INFLUENCE OF LEADERSHIP 11

management. As a leadership style popularized during the economic

boom in the 1980 s (Biradar, n. d.), Theory Z was constructed as a ’fusion of Japanese and American leadership styles that explored a holistic

view to increasing work productivity. According to Pitsis (2008), Theory Z

does not only view the importance of employee productivity; it also takes

into consideration the areas that maintain or increase the nurturement of

the employee as a whole. Ouchi s approach was simple yet profound ’ –instead of concentrating directly on the amount and quality of the output,

Ouchi (England, 1983) suggested that output could be indirectly influenced

by fully engaging team members. Theory Z leaders (Northup, 2007)

understand that their employees favor flexibility in their jobs, and thus it

is no surprise that (B., 2013) some of the distinctive features these

managers utilize include gradual promotion, lifetime employment, as well

as supportive management. Also known as participative leaders because

(Ogbonna & Harries, 2000) they are able to work effectively with their

subordinates, Theory Z leaders take their time to listen to their

employees views and to empower them with encouragement. Because ’the effectiveness of an organization is mainly due to (Nwadukwe &

Tuninipere, 2012) manner of work coordination, level of worker s “ ’commitment to the organization, and cooperation with colleagues, the

organization, and the community , Theory Z leaders take care to engage ”their employees. Among the reasons why employees fail to achieve

organizational goals (Time Management Improvement, 2010) are

frustration, over-planning, discouragement, lack of deadlines, enthusiasm,

support, or commitment, and excessive vagueness, and Theory Z leaders

work hard at avoiding these pitfalls. They do so (Drushal, n. d.) by

actively participating with their group members, allowing them to make

their own decisions, solve problems, and involving in discussions. This

way, (Drushal, n. d.) the organization enjoys higher levels of satisfaction

of productivity among its employees. A leader has to be willing (de Vries

INFLUENCE OF LEADERSHIP 12

et. al., 2006) to share available knowledge with his subordinates, and vice

versa, so that the employees will be certain of the way they are handling

certain tasks; in actual fact, this system of active participation is also a

motivating factor that elevates employees sense of fairness and self-’efficacy. Because leaders are change agents (Gilley, 2009) of the “ ”organization, they must be able to clearly define organizational goals and

objectives in order to bring performance forward. Besides, De Cremer

(2006) claimed that achieving intrinsic motivation through pursuing the

employees welfare thus meeting the basic, lower level human needs ’ –according to renowned psychologist Abraham Maslow is an essential –aspect of increasing work performance.

Japanese management style, according to Chapagain (n. d.),

centralizes its management philosophy on corporate constitution (shage)

and code of behavior (shakun). It specifies the essence of the Wa

(harmony) among the employees of the institution. Activities of the day

are ritualized into the corporate culture, with a comprehensive horenso

(Chapagain, n. d.), or reporting system; employees of Japanese

corporations begin the day with a recitation of the organization s’philosophy. In the journal Organizational Dynamics (1993), Ouchi & Price

stated that the two ways an organization can actually group its employees

is through markets, whereby profit becomes an influencing factor in

productivity, or otherwise clans, which is more humanistic approach

because productivity is based on cooperation among colleaugues, the latter

of which results in Theory Z organizations. In turn, the organization

expects high levels of commitment, increased organizational performance,

and sustained economic wealth.

INFLUENCE OF LEADERSHIP 13

According to Biradar (n. d.), the characteristics of Theory Z are:

long-term employment, collective responsibility, implicit and informal

control with explicit, formalized measures, collective decision-making, slow

promotion, and concern for the well-being of the employee as well as his

family. In order to get employees to commit to their tasks, Leblebecí(2012) claims that, among other factors, maintaining role congruity and

consistent mentoring and coaching play important roles. Because the

main idea is surpassing organizational target, it is inherently crucial

(Dorsett, 2006) to focus on developing human capital through

experimenting, observing, inquiring, and analyzing.

The whole concept of Theory Z leadership rests on the fact that

listening effectively to an employee s needs is crucial by paying’ –attention to what an employee has to say, the employee s sense of’worthiness and value will go up, and he will be further motivated.

Motivation, an essential aspect and a pervasive theme in organizations“ ”(Durshal, n. d.), is largely responsible for influencing one s self-esteem;’how efficiently an employee performs his task is directly linked to

hygiene factors of the two-factor theory. That is, an employee works

because he wishes to satisfy intrinsic and extrinsic factors he works–(Stello, n. d.) because he favors growth, achievement, and responsibility,

and he works because he wants to satisfy supervisors and adhere to the

policies set by the organization. Thus, for the application of Theory Z

leadership, (Aydin, 2012) members of the organization must be well-versed

in matters pertaining to the organizational body, making effective

communication an important medium for all levels of employees of the

organization.

INFLUENCE OF LEADERSHIP 14

Maslow’s Heirarchy of Needs

Workplace Programs

The above image depicts how Maslow s Pyramid of Needs is related’to workplace programs as stipulated by Northup (2007). Among these

factors, Theory Z managers also are aware (Gong, Huang, & Farh, 2009)

of the differences each individual undergo to adopt new strategies and

invent new, original ideas. Therefore they try to provide such an

environment where outcomes would be maximised. Meeting an

employee s basic needs will mresult in an upward progression to higher-’order needs, allowing him to identify with himself along each stage, and

thereby (Hall, Schneider, & Nygren, 1970) elevating his commitment to his

organization.

Leaders can provide motivation in various ways, eg. (Lipman, 2013)

by drafting a new medical benefits scheme, demonstrating respect to

employees as individuals, providing ample support, and also providing

encouraging feedback on a regular basis (which is the cornerstone of“ ”effective management). When employees are motivated they are–provided with a motive (Shanks, n. d.) they tend to perform more–productively (Stringer, 2013) because they feel good about themselves.

According to Northup (2007), studies have shown that cultivating a

challenge people to outdo others

self-actualization

status, responsibility, reputationself-esteem

teamwork, industrial associationssocial

safe environment, health planssafety and security

competitive salaryphysiology

INFLUENCE OF LEADERSHIP 15

positive corporate culture can significantly increase employee performance

by at least 25%, which is a considerable amount.

On the other hand, to aid existing or new employees in performing

their tasks, leaders (Cothran & Wysocki, 2005) can actually utilize the

SMART goals mnemonic (SMART standing for Specific, Measurable,

Attainable, Relevant, and Time-Bound). Adhering to this mnemonic helps

keep leaders and subordinates alike from slacking too far from the

organizational objectives. Besides understanding what employees value

and how they differ, (Gittens, 2002), or otherwise providing appropriate

incentives, having constant simple, yet educational conversations with the

staff will also do good to strengthen the ties between them and the

organization, enhancing productivity in a way.

Conclusion

To conclude, interactive leadership is responsible for organizational

performance. There are three styles of leadership based on three

theories Theories X, Y, and Z and each have different characteristics.– –Leadership style depends on organizational factors and the knowledge of

the employees, among other aspects, and these are the key factors that

can shape an organization.

INFLUENCE OF LEADERSHIP 16

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Timmerman, M. (2012, October). How participative leadership powers a culture of

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INFLUENCE OF LEADERSHIP 24

managerial functions. McGraw-Hill, New York, 1976.

Shanks, N. H. Management and motivation. Jones and Bartlett Publishers, chapter 2,

pp. 23 – 34. Retrieved from

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Images:

http://www.google.com/imgres?client=firefox-a&hs=NaF&sa=X&rls=org.mozilla:en-

US:official&biw=1366&bih=639&tbm=isch&tbnid=NCVCBWv211LLhM:&

imgrefurl=http://www.thebensonstreet.com/tag/goal

setting/&docid=InpwJyP4p6_XCM&imgurl=http://www.thebensonstreet.com/wp-

content/uploads/2012/12/SmartGoals.jpg&w=1500&h=1500&ei=

bGnSUbzLMMvarAes2YDoCA&zoom=1&ved=1t:3588,r:11,s:0,i:

123&iact=rc&page=1&tbnh=174&tbnw=174&start=0&ndsp=12&tx=65&ty=126.

http://www.google.com/imgres?client=firefox-a&hs=NaF&sa=X&rls=org.mozilla:

en-US:official&biw=1366&bih=639&tbm=isch&tbnid=NCVCBWv211

LLhM:&imgrefurl=http://www.thebensonstreet.com/tag/goalsetting/

&docid=InpwJyP4p6_XCM&imgurl=http://www.thebensonstreet.com/wp-

content/uploads/2012/12/SmartGoals.jpg&w=1500&h

=1500&ei=bGnSUbzLMMvarAes2YDoCA&zoom=1&ved=1t:3588,r:11

,s:0,i:123&iact=rc&page=1&tbnh=174&tbnw=174&start=0&ndsp=12&tx=69&ty=105.

INFLUENCE OF LEADERSHIP 25

Appendix.

Let’s Talk Business: No Pain, No Gain-With Lil’ Twaine!

Scene 1: [at the office] Everyone is kneeling down Japanese style, head to the ground. The

General Manager is speaking.

Dr Chandran: [muttering] Maintain the Wa. . . [breathing in] maintain the Wa. . .

[breathing out] maintain the Wa. . . [voice raising] Everybody kneel

down! [eyes open]

Suddenly, Mr Travis opens the door; he walks in hurriedly. Only Dr Chandran s head ’ is raised to have a good look at him; the rest of the people stillremain unperturbed,

their heads to the floor.

Dr Chandran: [steely gaze at Mr Travis] What brings you here, mi amigos?

Mr Travis: [frenzied expression] To do a job. To do a job. To work for the company.

Dr Chandran: [shaking head] Please –

INFLUENCE OF LEADERSHIP 26

Mr Travis: [standing straight] Allow me to introduce myself. My nameis Travis

Jenson, but you can just call me Travis. Mr Travis.

Everyone s heads remain bowed down. Silence echoes through ’the room as Dr

Chandran glares at him from across.

Mr Travis: [saying sheepishly] Uh, uh, sorry. Sorry Doctor. [kneels down with the rest]

Dr Chandran: [booming voice] In this organization, courage is favored among the rest of

The Qualities. [Mr Benson looks up] You need to keep the Wa! [hand

gestures]

Mr Travis: [hand gestures trying to be like Dr Chandran’s] Oh, you need to keep the Wa!

Dr Chandran: [demonstrates hand gestures] You need to keep the Wa!

Mr Travis: [looks at his hand gestures] I need to keep the Wa!

Dr Chandran: Yes, you need to keep the Wa. What is the Wa?

Mr Travis: I need to keep the Wa. What is the Wa? [shrugs shoulders; gives stumped

expression] Eeeeh. . .

Dr Chandran: [flips a card with a Japanese character] This is the Wa.

[clutches his stick

as he turns to everyone] The Wa is the symbol of harmony among the peoples

in this organization. You must keep it tight for — –once you break the Wa . . .

battles can result. Pain you shall foresee, and anguish and despise and

conspiracies. [suddenly closes both eyes in meditation mode]

INFLUENCE OF LEADERSHIP 27

Mr Travis: [face lights up; voice booming with excitement] Count me in!!

Dr Chandran: [keeping silent, eyes still closed; crosses and raises two fingers]

Mr Travis: [faints]

Scene 2. In a dim-lit room.

Black slide. Theory Y manager.

Lil Twaine: ’ [writing in a journal] Today new guy arrived Mr Travis —Jenson. Looks

handsome. Don t know if he can do his job well.’Must keep an eye in him.

[gets up from the chair and leaves the office]

Lil Twaine walks into Mr Travis s office. Mr Travis is meditating.’ ’

Lil Twaine: ’ [knocking on Mr Travis’s table] Mr Travis?

Mr Travis: I must keep the Wa! [expression changes as he realizes it is Lil’ Twaine]

Lil Twaine: Excuse me. I am showing you the company profile. We’here at Braniac

Media we are like family. We treat you like —family, and in turn, we want you

to treat everybody like family. Yes. Even our clients. Our mission is this

[swipes card out]. And these are our goals [swipes outanother card].

Mr Travis reads out word by word as he studies the cards at each swipe.

Lil Twaine: Now! We are planning to venture into an entirely new ’line. The staff are all

yours to use. Guide them and show them how todo it.

Mr Travis: What line?

Lil Twaine: F and B. ’ [Mr Travis’s eyes grow visibly wider] Show them how it s going to ’

INFLUENCE OF LEADERSHIP 28

generate profit. Show how to revolutionalize the current business unit.

Mr Travis: How am I supposed to do that?

Lil Twaine: Use your creativity. Call me if and when you need help. ’I m busy most of ’

this week, but you can page me. [gets up and walksaway]

Mr Travis: [after thinking; snaps fingers] Aha! Unrelated diversification. Time to get to

work!

Scene 3. At another office.

Black slide. Theory X manager.

Mr Travis skips into the office; two clerks look at him.

Mr Travis: Hola! Let s do some business. Draft out a budget for an ’F and B outlet near

here. Quick! Get it done by next week. I got to show the boss after that.

[walks off]

Julie: What the-?

Max: Arigato. [bows head down]

Julie: I feel very inadequate and dumb when anyone just strikes out orders for us to do

without giving us the know-how. [puts head in hands]

Max: Everything will be all right. [puts arms around Julie’s shoulders]

Scene 4. At the lab where two scientists are working together.

Mr Travis: Guys! Guys! [scientists look up at him in astonishment] Look here, we are

going to do an F and B outlet somewhere nearby. Get a detailed demographic

report prepared by end of this week! [walks out]

Scientists stare at him with a puzzled expression.

Scene 5. Mr Travis is rushing up the staircase.

INFLUENCE OF LEADERSHIP 29

Black slide. One week later.

Dr Chandran: [looking through the report] Look at this. [shakes head] Call him in. [says

to Lil’ Twaine]

Mr Travis: [walks in to the office happily] Yes, Sir? Good morning.

Dr Chandran: [keeps quiet in meditation mode]

Mr Travis: Yes, Sir?

Dr Chandran: [eyes suddenly open] Where is your Wa?

Mr Travis: [taken aback; looks down on the floor]

Dr Chandran: Tell me where is your Wa? What is your job if you do not have your Wa

with your family? [unmoving glare at Mr Travis in increasing anger]

Mr Travis begins to become alarmed.

Mr Travis: [suddenly hugs Dr Chandran] Please, Sir. Give me another chance. Don t ’

kick me out of my family! [desperate voice]

Dr Chandran: [lifts up two crossed fingers again; swipes out a card] You see this? This is

Abraham Maslow s Model of Heirarchy Needs. ’People work because they

want air, food, water, a house, love-SEX-and fame. [stick moves up model as

he speaks] So treat them with respect. Go and find your shage and shakun.

Screen change: Braniac Media Logo