B: LEADERSHIP

“Good leaders are made not born”.

Definition of Leadership
Leadership is a process by which a person
influences others to accomplish an
objective and directs the organization in a
way that makes it better in achieving its
vision, mission, objectives and goals.

Furthermore, leadership is a process

whereby an individual influences a group
of individuals to achieve a common goal.

Four Factors of Leadership

There are four major factors in leadership:

Leader
You must have an honest understanding of
who you are, what you know, and what
you can do.

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Also, note that it is the followers, not the
leader or someone else who determines if
the leader is successful.

To be successful you have to convince your

followers, not yourself or your superiors,
that you are worthy of being followed.

Followers
Different people require different styles of
leadership.
For example, a new staff requires more
supervision than an experienced employee.
You must know your people!
You must come to know your employees'
attributes/characteristics.

Communication
You lead through two-way communication.
Much of it is nonverbal.
For instance, when you “set the example,”
that communicates to your people that you
would not ask them to perform anything
that you would not be willing to do.

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Situation
All situations are different.
What you do in one situation will not
always work in another.
You must use your judgment to decide the
best course of action and the leadership
style needed for each situation.

Bass' Theory of Leadership

Bass' theory of leadership states that there
are three basic ways to explain how people
become leaders.

The first two explain the leadership

development for a small number of people.

These theories are:

 Some personality traits may lead people
naturally into leadership roles. This is
the Trait Theory.
 A crisis or important event may cause a
person to rise to the occasion, which

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 brings out extraordinary leadership
qualities in an ordinary person.
This is the Great Events Theory.
 People can choose to become leaders.
People can learn leadership skills.
This is the Transformational or
Process Leadership Theory. It is the
most widely accepted theory today.

Total Leadership
When a person is deciding if she respects
you as a leader, she does not think about
your attributes, rather, she observes what
you do so that she can know who you
really are.

She uses this observation to tell if you are

an honorable and trusted leader or a self-
serving person who misuses authority to
look good and get promoted.

Be/Know/Do
The basis of good leadership is honorable
character and selfless service to your
organization.
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In your employees' eyes, your leadership is
everything you do that effects the
organization's objectives and their well-
being.

Respected leaders concentrate on:

 what they are (such as beliefs and
character)
 what they know (such as job, tasks,
and human nature)
 what they do (such as implementing,
motivating, and providing direction).

The Two Most Important Keys to

Effective Leadership

Trust and confidence in top leadership

is the single most reliable predictor of
employee satisfaction in an
organization.
Effective communication by leadership
in three critical areas is the key to

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 winning organizational trust and
confidence:
1. Helping employees understand the
company's overall business strategy.
2. Helping employees understand how
they contribute to achieving key
business objectives. : The toilet cleaner
and astronauts story: Even a toilet
cleaner has a big role to play for
astronauts to reach the space!
3. Sharing information with employees
on both how the company is doing and
how an employee's own division is
doing — relative to strategic business
objectives.

Therefore, a leader must be trustworthy

and have to be able to communicate a
vision of where the organization needs to
go.

Principles of Leadership
There are eleven principles of leadership.

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1. Know yourself and seek self-
improvement;
In order to know yourself, you have to
understand your attributes.
Seeking self-improvement means
continually strengthening your attributes.
This can be accomplished through self-
study, formal classes, reflection, and
interacting with others.

2. Be technically proficient
As a leader, you must know your job and
have a solid familiarity with your
employees' tasks.

3. Seek responsibility and take

responsibility for your actions
Search for ways to guide your organization
to new heights.
And when things go wrong, do not blame
others.
Analyze the situation, take corrective
action, and move on to the next challenge.

4. Make sound and timely decisions

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Find and use good problem solving,
decision making, and planning tools and
techniques depending on the situation.

5. Set the example

Be a good role model for your employees.
They must not only hear what they are
expected to do, but also see.
We must become the change we want to
see (Mahatma Gandhi)

6. Know your people and look out for

their well-being
Know human nature and the importance of
sincerely caring for your workers.

7. Keep your workers informed

Know how to communicate with not only
them, but also seniors and other key
people.

8. Develop a sense of responsibility in

your workers

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Help to develop good character traits that
will help them carry out their professional
responsibilities.

9. Ensure that tasks are understood,

supervised, and accomplished
Communication is the key to this
responsibility.

10. Train as a team

Although many so called leaders call their
organization, department, section, etc. a
team; they are not really teams...they are
just a group of people doing their jobs.

11. Use the full capabilities of your

organization
By developing a team spirit, you will be
able to employ your organization,
department, section, etc. to its fullest
capabilities.

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LECTURES 5
VALUE ADDING TRANSFORMATION
Appropriate technology
Appropriate technology is an ideological
movement that involves small-scale,
labor-intensive, energy efficient,
environmentally sound projects.
It is simple enough that people can
manage it directly and on a local level.
Appropriate technology (AT) makes use
of skills and technology that are
available in a local community to
supply basic human needs, such as gas
and electricity, water, food, and waste
disposal.
Appropriate
technology is technology that is
designed to be "appropriate" to the
context of its use.
In a nutshell, any technology is
appropriate at the time and place of
original application.

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 The technology is still appropriate at a
later time and/or at a different place if
the surroundings as well as the
objectives are similar to the origin.
The technology may not be appropriate
at a later time and/or at different place
due to three reasons:

 different or changed surroundings,

 different or changed objectives, and
 different or changed surroundings and
objectives

Technology Transfer: Some Basic Issues

Basically, there are two ways of acquiring
new technology: developing it or importing
it.

Importing technology is commonly called

technology transfer (TT).

Technologies are imported for the following

important reasons:
(a) Little or no R&D invested,
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(b) Usable immediately and often technical
and financial risks are very low.

There are also good reasons for selling

technology, such as:
(a) Increasing financial returns on R&D
investments;
(b) When the technology has no immediate
use to the developer; and
(c) When the technology has already been
utilized up to its limit.

Thus, technology importation or transfer

occurs because of the existence of buyers
and sellers.

The sellers are called transferors and the

buyers are called transferees of the TT
process.
Besides the transferor and transferee, the
third important element in the TT process
is the linkages between the two partners.

The linkages are the ways and means of

transferring technology.
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Many diversified linkages have been used
to transfer technology from the developed
to developing countries.

Among them, the following are the most

important;

 Direct Linkages
 Operation of trans-national
corporations
 Licensing arrangements

 Hiring of experts and contractors

 Training of technical staff abroad

 Indirect Linkages
 Purchase of machinery, equipment
and components
 Exchange of information at
international meetings - Flow of
books, journals and other
publications
 Exhibition and trade fairs.

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Pertinent Economic Issues

The TT process should be viewed as a deal

between the transferor and the transferee.
The former has a technology for sale and
the latter has a need to buy it.
There is no donor or recipient.
Like any other business deal, it is to be
formalized on the basis of the relative
bargaining positions of two parties.

From the transferor’s point of view,

technology is neither easy nor cheap to
transfer.
Transfer costs average about 20 per cent of
establishing an overseas plant in case of
an industrial project.
Such costs include management and
technological consultancy, training of local
managerial, technical and operating
personnel, know-how and licensing, etc.

Depending on the transferee’s in-house

capability, the ratio of payments made for
management and technical services to that
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of know-how and licenses can vary
considerably.

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Problems and Issues with TNCs

Trans-national corporations of developed

countries have moved and are moving into
developing countries.
Their main objective is increasing their
profits.
This search for profit, particularly using
the resources of appropriated technical
knowledge, guides their decisions.
Basically, the two ways in which TNCs
operate in developing countries are direct
investment package and licensing.

(a) Direct Investment

In some circumstances, the direct

investment package is the most practical
method of TT.
It is especially well suited to either the first
stage of industrial development of fast-
moving technologies.
Its main advantages for developing
countries are the minimization of risks and
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direct access to all supportive resources of
TNCs.

(b) Licensing Agreement

Many TNCs which favored only direct

investment, with sole ownership for
maximum control, are now entering into
joint ventures and licensing arrangements.
There are various reasons for their
decisions to license in developing
countries. Some of these are:
 To obtain additional earnings from
technologies whose period of
competitive advantage in the primary
home market is over.
 To lower production cost by capitalizing
on the new international division of
labor, and thereby maintaining
competitiveness in the world market.
 To gain access to markets with
protectionist barriers.

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  To take advantage of existing
surroundings for testing and improving
certain technologies.
 To improve their corporate image.

(c) Defrayment of Cost of TT

There are a number of ways by which the

transferee pays for the cost of TT. Some of
these are:

 Direct payments for the purchase of

technologies
 Royalty payments under license and
contractual agreement
 Payment for technology by supplying
the raw materials needed by the owner
of the technology
 Payments by supplying the products
manufactured by the licensee
 Payments of profits on capitalization of
know-how and profit repatriation.
 Over-pricing of imports and
intermediate products and equipment
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  Inflated valuation (over-invoicing) of
imported capital and other technical
equipment, and
 Transfer of technology tied in with
export sales of the licenser (indirect
payment)

(d) Major Criticisms

Although TNCs have played a major role in

technology transfer to the developing
countries, there have been criticisms.
Some of the common criticisms are:

Skill transfer problems

 Lack of inadequate R&D
infrastructure in developing
countries.
 In many developing countries, R&D

activities are concentrated in national

institutions which are engaged in
non-relevant activities.
 Lack of qualified manpower for
training.

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(e) Static Transfer Vs Dynamic Transfer
TECHNOLOGY TECHNOLOGY
EXPORTING RECEPIENT
COUNTRY COUNTRY

FLOW A Hardware and service for

installation and start
No real transfer of technology
up

FLOW B Operation and maintenance of

Static transfer
production system
TECHNOLOGY
CAPACITY

FLOW C Technology capacity

design and reverse
including
Dynamic transfer engineering
Legend:

FLOW A: Technological services are capital goods

FLOW B: Static transfer: Skills and knowledge of operation and maintenance
FLOW C: Dynamic transfer: Knowledge, skills and experience to manipulate and
change the production systems and capacity to innovate

Figure 3.2: Illustration of Different

Technology Flows
 Static Transfer
Flow B of the diagram corresponds to the
concept of static technology transfer. It
includes skills and know-how required
only to operate and maintain the
production system.

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  Dynamic Transfer
Flow C corresponds to the concepts of
Dynamic technology transfer.
It includes the skills, knowledge and
experience required to implement technical
change either by altering the particular
production system created by a specific
transfer project, or by further investing in
new plants based on similar technology.

At least three different levels of categories

of skill and experience can be
distinguished within type C Flow:
 Skills and knowledge required to
improve and modify existing plants.
 Skills and knowledge required to
manage the transfer of technology for
new plants including those required to
monitor and supervise the design and
construction of those plants.
 Skills and knowledge required to supply
the core technology-intensive goods and
services for investment in new plants
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The Operations Systems
The operations system consists of inputs,
processing and outputs.
The three categories occur in all
enterprises, regardless of whether a
product is produced or a service is
provided, and is known as the operations
management system.
 Inputs
Without inputs, processing cannot
commence. Inputs consist of all the
resources used by an enterprise in order to
provide a service or produce a product.
Examples of inputs are human resources
(for example management, technical
knowledge and labor), equipment (such as
buildings and land owned or leased by the
enterprise) and capital. The inputs
influence processing as well as outputs
produced.

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  Processing
During processing, activities are carried
out which enable the enterprise to provide
a service or manufacture a physical
product. The aim of processing is to
transform inputs into a product or service
which will meet the consumer’s needs.
 Outputs
During processing, the inputs are
transformed into services and products
which are ready to be delivered to the
consumer.

Characteristics of Services
 Intangible
All services are intangible in the sense that
they cannot be touched. They can be
consumed but not possessed.
 Simultaneous
Unlike products, services are often
produced and consumed at the same time.
The provider is often involved one-on-one
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with the customer in performing their
service.
 Less Standardized and Uniform
If people play a large role in providing the
service, it will tend to vary. If the service is
primarily provided by machines (e.g.
telephone service), it may be more
standardized. However, in general services
are harder to standardize than products.

Improving Service Enterprises

1. Do Internal Marketing. Where there is
high contact between customer and
service provider, the enterprise benefits
from focusing its marketing efforts on its
own employees.

2. Customize the Service. This strategy

takes advantage of simultaneous
production and consumption.

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3. Manage the Evidence. Potential
customers must evaluate evidence or
clues about service quality when the
service is too intangible to evaluate
easily. Evidence may include the
environment in which the service is
provide, the appearance of the service
providers, and the price (higher price
must suggest higher quality).

4. Make the Services Tangible. A tangible

symbol or representation of an intangible
service can make the service seem
tangible - a membership card campaign,
for instance, can help perform this
function.

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