Leadership and decision making
Management in the Philippine setting
(editor Ernesto Franco); 2005
Leadership
• An essential part of directing. To be a good
manager, one has to have leadership
capabilities.
• A good leader though, need not to be a good
manager. There is a difference between a
leader and manager.
• The leader is measured by how much
influence he has in stimulating people to
strive towards an objective.
• The manager is measured by how much he
has attained an objective using not only
human resources but nonhuman resources (
money, materials, methods, machines,
moment, or time etc.) as well.
• A leader is a good leader because he can
cause and direct people to move towards an
objective. But he can be at the same time the
lousiest manager because he is inefficient in
• the use of other resources. He does not have
any coherent plan. He has the slightest idea of
proper control and scheduling.
• Meanwhile, a manager who is super-efficient
but handicapped by poor leadership may not
stand a chance of becoming an effective
manager, especially if his job calls for a lot of
interacting with people. There is no way
• that he can cover up and ignore the deficiency
because to be able to use the nonhuman
resources for organization purposes, the
manager has first to activate or inspire the
people. It is his people that do the “dirty
work”, that actually and physically manipulate
the resources for a given goal.
• Contrary to this, the manager ceases to
function as manager. In the long run, a
manager desiring to keep his job or
anticipating to move up the organization
ladder, must learn and continue to sharpen
his leadership skill.
THE MANAGER-LEADER
• LEADERS
WHO ARE
NOT
MANAGERS
• MANAGERLEADER
• MANAGERS
WHO ARE
NOT
LEADERS
Defining Leadership
• 1. distinguished people in an organization or
group;
• 2. an ability;
• 3. a relationship
• In the first sense, leadership refers to those
who provide direction and guidance. Usually
once could allude to the pres. or the highest
ranking officer as the leadership
• The distinction may also be extended to such
persons in the position of executive, managers,
administrators, directors, chiefs, unit heads, and
bosses, either collectively or singularly. A leader is
the “individual in the group given task of directing
and coordinating relevant group activities or who, in
the absence of designated leader, carries the primary
responsibility of performing these functions in the
group” (Fiedler 1967).
• In the second sense, leadership is the “art of
inducing subordinates to accomplish their
assignments with zeal and confidence (Koontz
and O’Donnell, 1981)” and “the ability to
persuade others to seek defined objectives
enthusiastically” (Davis 1981).
• in the 3rd sense, it has been defined as “the
relationship in which one person (the leader)
influences others to work together willingly
on related tasks to attain goals desired by the
leader and/or group (Terry and Franklin
1982).”
Leadership is the state where a person or group
of persons is able to influence others to agree
on a goal and work towards it. It has the
following condition/ possibilities;
• 1. that we are using the first sense, i.e., people
distinguished (in the group/organization) for
their unique attributes such as having power,
authority, special skill/knowledge/ talent,
status, etc. either collectively (group of
persons) singularly (one person);
• 2. the 2nd sense, i.e., ability (to influence
others);
• 3. the 3rd sense, i.e., relationship (between person
influencing and others being influenced);
• 4. that leadership occurs only when the leader has
successfully influenced the follower towards
agreeing on a goal and working towards it; for
without the agreement and the effort of others to
pursue the goal, one cannot speak of any follower,
and the leader without followers is no leader and his
leadership is not established;
• In relation to the first condition above, a
person
• 5. assumes leadership of a group when an
occasion calling for his unique attributes
arises. often, the person who best satisfies the
needs of the individuals in a group will emerge
as leader (Kast and Rosenweig, 1970)
Leadership traits
• Philosophers were divided in their beliefs
about how men (Lincoln, Lenin, Hitler,
Napoleon, Alexander the Great, Gandhi)
became leaders. Some owed it to being born
with it (leadership). Others argued that these
men just happened to be in the right place at
the right time.
• Current thinking has given both explanations
credit, in that leaders should have leadership
qualities and he must, at the same time, be at
the right place at the right time.
• By studying the characteristics of people who
have been considered as leaders, researchers
identified the following as essential in the
making of a leader.
•
•
•
•
•
•
Ralph Stogdill (1948), listed;
1. intelligence and scholarship;
2. physical traits;
3. personality;
4. social status and experience;
5. task (or work) orientation
• In 1963, Edwin Ghiselli revealed a close
correlation between leadership traits and
effectiveness. By 1971, he was able to
separate those which are;
• 1. decisiveness, intellectual capacity, job
achievement orientation, feelings of selfactuation, self-confidence, and management
ability to build a team;
• 2. moderately important – affinity for the
working class, drive and initiative, need for a
lot of money, need for job security, and
personal maturity;
• 3. almost without importance – masculinity
versus femininity.
Behavior – What leaders do
• Leader’s style could either be employee-centered or
job-centered. The former style emphasizes concern
over the welfare, harmony, well-being, and
sensitivity to the needs of employees or
subordinates.
• A job-centered style is more concerned with
completing the job as scheduled or as specified
through proper planning and application of
appropriate managerial techniques.
• Early studies by White, Lewin, and Lippit in the
1930s indicated a continuum or range of styles
that leaders adopt. At one end of that
continuum is the autocrat whose
authoritarian style places the leader in total
control of his group.
• Power, authority and responsibility are his
monopoly.
• His orders are commands that do not expect
to be questioned. He has little trust in people,
and believes that money is the only motivator.
• Benevolent autocrat Robert McMurry (1958) –
he listens to his subordinates, appears to be
democratic or participative, but in the last
count it is his decision and will that must be
obeyed.
• A special variation of autocracy is bureaucracy.
According to Eugene Jennings (1962),
bureaucracy is a subtle form of autocracy as it
is the rules, policies, systems, and procedures
that keep the organization running. It is the
system, not the executive, that is
indispensable.
• At the extreme end of the continuum is the
laissez- faire (let the people do as they please)
leader who allows his group members to
exercise complete freedom to set goals and
make decisions, with little participation from
him in their activities. The study found this
style not effective.
• The democratic leader, whose style is
somewhere in between autocratic and laissezfaire, shares power, authority, and
responsibility with his followers or
subordinates. He encourages, promotes, and
practices participation in problem-solving,
decision-making, and general activities of the
group.
• The research concluded that the democratic
style would seem to be the best of all styles
because of its ability to transform leaders and
followers together into a cohesive and
cooperative group, whose collective
performance results into improved quality and
quantity of work.
• Tannenbaum and Schmidt (1982) – range of
possible leadership behavior based on the
ratio between how much authority is being
used by the manager and the amount of
freedom that subordinates can have in
performing their work.
• The manager can pick and exercise the
behavior most appropriate for the occasion.
• For instance, in an emergency or crisis
situation where time is extremely limited, the
manager may opt to make a quick decision
and announce it.
• Under normal conditions, subordinates may
be allowed to work independently, subject to
certain limits set by the superior.
Participative management
• In many models of leadership, the supremacy
of participative management over all other
styles has been recognized. According to Erwin
Stanton (1982), Chris Argyris “has urged the
integration of organizational and individual
needs through the introduction of job
enlargement and employee participation.”
• Rensis Likert stressed the superiority of a
highly participative approach as a means of
enhancing individual job satisfaction and
increasing organizational productivity.
• Toffler (1980) “the coming upheaval in the
political system…. Demands for participation
in management, for shared decision-making,
worker, consumer, and citizen control, and for
• anticipatory democracy are welling up in
nation after nation.”
• Scanlon, “workers participating in the
economic benefits generated by their cost and
labor-saving innovations.”
• Likert “a comprehensive system of
organization and management based on the
use of group methods in every feasible
operation and on thinking of the organization
One plus one equals more
• as a series of overlapping groups.”
• Synergism “various people working
simultaneously, which, together, have greater
total effect than the sum of their individual
effects. It is like adding one ( effort) plus one
(another effort) and the result equals more
(than two) if participation is observed.
• Ouchi (1981) “participative approach to
management asks all workers to give more.
They are not being asked to carry heavier
loads nor to exert themselves more physically.
The productive gains come from improved
coordination rather than from increased
physical effort…
• However, there is the chance that one will be
inadequate to the demands of participation,
that the new openness will lead to painful
criticism, that others will take advantage of
egalitarian relationships.
• The average employee will follow only when
led by a person who has sufficient personal
integrity to be counted on as honest and
reliable.
• Without an idea of what lies ahead,
employees look to a person who acts with
confidence.”
• As a guide to participative management,
Sashkin (1982), on 4 specific types of
participation to apply to the individual
subordinate, superior-subordinate, and group;
• 1. goal-setting. Workers and supervisors
together determine the goals that each or the
group intends to reach;
• 2.Decision-making. Participation of
subordinates may range from consultation to
actually taking responsibility for the decision;
• 3. problem-solving. Subordinates who have
analytical skills are required to develop new
• ideas on the basis of available information;
• 4. Change. This is the most difficult. Managers
and employees are required to participate in
generating, analyzing, and interpreting
organizational data in order to develop
specific innovative solutions to organizational
problems.
Decision-making
Objectives
• Define and explain the decision-making
process in management.
• Explain the non-quantitative and quantitative
bases for decision-making.
• Present the various decision-making
procedures.
• Present the decision-making systems
framework.
Decision-making
• Process whereby a course of action is selected
on the basis of 2 or more possible
alternatives.
• Decision-making is a process and is pervasive
in all the basic management functions of
planning, organizing, staffing, controlling,
directing and motivating.
• What plans or forms of organization should be
adopted?
• What control mechanisms should be
employed?
• What incentives systems should be used?
• These questions or problems require choosing
an alternative from a number of propositions.
• Koontz (1981) considered decision-making to
be the core of the planning function.
• Decision-making, accordingly, is defined as; (1)
premising; (2) identifying alternatives; (3) the
evaluation of alternatives in terms of the goal
sought; and (4) choosing of an alternative,
that is, making a decision.
• The formal decision process may be
summarized (Martinez, 1983):
• 1. recognition and definition of the problem;
• 2. development of an explanation of the
relationship between the factors relevant to
the problem;
• 3. construction of hypothesis or building a
model;
• 4. testing the hypothesis or model;
• 5. manipulation, stipulation and application of
the model.
Non-quantitative bases for
decision-making
• This decision tool is helpful for problems
dealing with objectives, and with the means
to achieve the objectives of the organization.
The tool is commonly used for problems or
issues which are practically near to impossible
to quantify or measure.
• 1. intuition – generally characterized by
hunches, feelings, and other psychological
factors.
Intuition
• Such a person is said to possess a
“precognitive ability” and is better able to
anticipate the future. He is said to be
influenced by his experience, training, and
knowledge of situations. His decisions are very
situational in character.
Intuition
• Franco (1979) described one type of Filipino
manager as “realist-manager”. One who has
“oido” or flashes of intuition which come from
many years of experience on the job.
• One who decides quickly even if not all the
facts are available. He decides on experience,
common sense, and proven intuitive feel of
the situation.
Intuition
• K. Matsushita (1984), founder of the world’s
largest industrial firms, “intuition makes
sense”. He said that while scientific methods
can be applied in most cases, in the end,
managers have to rely on their intuition.
• He believed that too much scientific precision
is deadening and even wasteful and there are
many occasions when intuition is valuable and
valid.
Intuition
• The following are suggested to sharpen
intuitive decision-making (Terry, 1982);
– 1. becoming more involved by filling their minds
with facts and experiences in the areas where
their future decisions will be made;
– 2. practicing intuitive decision-making and keeping
a score on how well such decisions turned out;
– 3. developing awareness that hunches can help in
decision-making.
Facts
• There seems to be no substitute for decisions
based on facts. However, all facts surrounding
a particular decision area may not be available
to the public manager.
• Advent of computer systems has allowed
systematization of info and available facts
• Facts must be analyzed, classified, and
interpreted.
Facts
• It minimizes subjectivity. However, they alone
are not sufficient to reach a decision.
• Imagination, experience, and beliefs are
usually required to interpret the facts in their
proper perspective and to use them
advantageously (Terry, 1982).
Experiences
• Public managers use largely the wealth of
their experiences in the decision-making.
Mistakes and sound decisions in the past
furnish decision-making guidelines and may
spell the difference between success and
failure in decision-making.
• However, situations are dynamic, caution
must be exercised on over-reliance on
experiences.
Opinions
• Opinions of others who may have similar
experiences, experts and consultants serve as
some of the bases in non-quantitative
decision-making. They may be structured or
non structured.
• Structured when public managers devise a
system whereby statistical techniques are
applied to a set of opinions.
Opinions
• Non-structured or informal opinions are
sometimes considered. Close family
relationship is considered one of the reasons
why it is common to seek opinions from
elders.
• It may be from friends, peers and relatives. In
our political context, little is known on how
much weight is given on opinions in the
decision-making process.
Effective management decisions
• Theoreticians and academicians often claim
that good management decisions come from
computer printouts or equations or deliberate
and detailed plans. This is quite accurate but
not necessarily realistic.
• The most effective management decisions
come from human contact, dealings between
people.
Effective management decisions
• They come from personal interfacing like advice
solicitations, face-to-face negotiations, persuasions,
sounding out, preliminary skirmishes or
investigations, consensus-building and consultations.
• The more experienced decision-makers trust human
contact. The empirical facts and studies serve as
inputs to the making of decisions. More useful
insights come from human consultations.
Decision-making framework
• The process of decision-making is a complex
process. Peter Drucker (1954) suggested;
• Define the problem
• Define expectations
• Develop alternative solutions
• Know what to do with the decision after it is
reached
Decision-making framework
• The process of decision-making is a complex process.
Earnest Archer’s (1980) 9 phase process;
• 1.monitor the decision environment
• 2. define the decision problem or situation
• 3. specify decision objectives
• 4. diagnose the decision problem or situation
• 5. develop alternative solutions or courses of action
• 6. establish methodologies or criteria for appraising
alternatives
Decision-making framework
• The process of decision-making is a complex process.
Earnest Archer’s (1980) 9 phase process;
• 7. appraise alternative solutions or courses of action
• 8. choose the best alternative solution or course of
action
• 9. implement the best alternative solution or course
of action
Decision-making framework
• The process of decision-making is a complex process.
Esdras Martinez (1983) suggested the following;
• 1. identify and define the problem; an appropriate
objective or criterion “the criterion for decisionmaking” or the “objective function”, by which
alternative solutions may be judged;
• 2. identify alternative courses of action (solution)
• 3. assess all factors entering into each course of
action, leading to an evaluation of each course
against the criterion for decision-making
Decision-making framework
• The process of decision-making is a complex process.
Esdras Martinez (1983) suggested the following;
• 4. choose one of the alternatives based on the
evaluation or each course of action, giving effect to
final judgment on the matter.
Decision-making framework
• The process of decision-making is a complex process.
Kepner-Tregoe (1965) proposed;
• 1. objectives of a decision must first be established
• 2. objectives are classified according to importance
• 3. alternative actions are developed
• 4. Alternatives are evaluated against established
objectives
• 5. the choice of the alternative best able to achieve
all the objectives represents the tentative
Decision-making framework
• The process of decision-making is a complex process.
Kepner-Tregoe (1965) proposed;
• 6. the tentative decision is explored for future
possible adverse consequences
• 7. the effects of the final decision are controlled by
taking other actions to prevent possible adverse
consequences from becoming problems, and by
making sure the actions decided on are carried out.
The decision-making systems
framework
INPUT
PROCESS
OUTPUT
Info about the environment
Scanning and environment
monitoring
Set of environmental conditions
Decision problem or situation
Defining decision problem
/situation
Definition of the problem requiring
decision
Specifications and requirements
for objective setting
Formulating objectives of the
decision
Objectives of the decision
Tools and techniques for evaluating
various decision alternatives
Stating various tools/techniques
for evaluation of decision
alternatives
Set of techniques and tools
Info and data for various decision
alternatives
Formulating and setting up
decision alternatives
Decision alternatives
Objectives and tools for decision
choice
Evaluating various decision
alternatives
Selected decision
Feedback of implementation of the
decision
Monitoring the process and
outcome of the decision taken
Validation of the decision taken