LITERATURE REVIEW OF THE EFFECT OF LEADERSHIP ON POLICY FORMULATION AND IMPLEMENTATION

CHAPTER TWO
REVIEW OF RELATED LITERATURE
This chapter reviews some works related to the subject matter to enable us have an in-depth knowledge of what the research is all about.   The review is presented along the following lines: The theoretical framework on leadership, conceptual framework, on role of policy formulation, leadership role on policy formulation, implication of policy formulation on the organization, optimization of resource and policy formulation, external environment challenges on policy formulation and manpower planning, and lastly, summary of the review of related literature.



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2.1       Theoretical Framework on Leadership
Behavioral Theories of Leadership
 These theories began when the ideas of unique leader traits were questioned in the 1940s. It was considered that the qualities of leaders could be analyses better by looking at their behavior or their behavioural style that cause others to follow them. A trait is a physical or psychological characteristic that accounts for the behavior of a person. Trait theories grew out of qualities found in great or well- known natural leaders, whom it was thought were born with leadership qualities. It was later considered that if traits of natural leaders were identified it would be possible for others to acquire them through learning and experience. Social psychologists were interested in leadership as an aspect of behaviour in the workplace and not just in personal characteristic. Two studies on leadership, which are important, occurred at the universities of Ohio and Michigan in the USA. These studies were led by stodgily and Likert and both concluded that there were two principal aspects of leadership behaviour - A concern for people and a concern for production.  These studies led to the developmental of a matrix to depict managerial leadership style. This was created by Blake and Mouton and called the Managerial Grid Penciled (2004:10) observers that Tannenbaum and Schmidt (2002: 114) found that mangers were often uncertain how to handle specific types of problem. In particular how to distinguish between the types of problem they should handle themselves and those that should be resolved with their subordinates. They concluded that in making an appropriate choice of how autocratic or democratic to be, a manager needed to consider three sets of issues:
·        Personal concerns: mangers had to consider their own values, their   inclinations towards leadership, and the level of confidence they had in their subordinates.
·        Subordinate concerns: managers had to consider their subordinates needs for responsibility and independence, their knowledge and interest of the problem, and the amount they desired to be involved in solving problems.
·        Concern for the situation: this concluded concern for the nature of the problem, the competence of the group in handing the problem, the time available and the type and history of the organization. 

They suggested a continuum of possible leadership behaviour which is available to manager, along which may be placed various styles of leadership. At one extreme, leadership was boss-centered (or authoritarian) and at the other extreme, leadership was subordinate–centered (or democratic) the continuum therefore, represents arrange of action which relates to the degree of authority used by manager and the area of freedom available to subordinates in arriving at decision. There is a relationship, therefore, to McGregor’s theory x and Y. Boss-centered leadership relates towards theory x and subordinate-centered leadership, towards theory Y.

A Continuum of Leadership Behaviour
Leadership styles as approached by D McGregor in the human side of Enterprise (Mc Graw- Hill 1960) has been misused and criticized a great deal. His assumption of human nature and behavior were expressed in an analysis of two theories of leadership, called theory X and Theory Y. This approach assumes:

·     the average person  dislike work and will avoid it if possible;
·     People therefore must be coerced, controlled and direct and threatened with punishment in order to get them to work towards organizational goals, the average person prefers to be directed and wants to avoid responsibility he has little ambition and desires security above all. MCgregor considered that this approach was based upon wrong assumptions about motivation and theory was preferred.
·     Expenditure of physical and mental effort in work is as natural as play or rest. Work can be a source of satisfaction’
·     People  can exercise self- direction and control to achieve objective to which  they are committed;
·     Commitment to objective is a function of the reward associated with their achievement;
·     Under proper conditions people can learn to accept and seek responsibility;
·     Ability to use imagination and creative thinking is widely distributed in population;
·     The intellectual potential of the average person in industrial life is only partially realized.

The practical manager can be helped by analyzing various approaches to leadership styles, but he must come to his own conclusions and adapt to the actual situation.

Contingency or Situational Theories of Leadership
The most recent approach to the understanding  of leadership builds on the previous behavioural theories state that appropriativeness of the action leader depend upon the actual situation in which  actions are taken.  Autocratic leadership approach may, for example be suitable for manager factory but not for manager of development and design staff. This is called the contingency or situational approach, and attempts to explain leadership within the context of the larger situation in which it occurs. This is in contrast to earlier theories which concentrated on the behaviour of leaders.

Fielder (2005:10) has been summarized in his book” A theory of leadership effectiveness”. Leaders are placed on a scale depending upon whether they are task orientated or people orientated.  Likert (2000:20) was involved in these investigation and the findings appear to confirm research by others. These are, when foremen created an atmosphere which contributed to discussion of work problems in a relaxed, natural way when they had time to discuss personal problems and stand up and support their men. Research by Fiedler can be of practical advantage to managers. He gave advice on what should be the appropriate leadership style or behaviour in various situations. He suggested that the extent to which a manager should be democratic or authoritarian in his leadership style related to the authority and power he had in his position as manager (right to hire, dismiss, reward).

The extent and nature of the interpersonal relations between the leader and members of the group is a function of how the leader relates with the led. In this contingency theory of leadership Likert suggests that where relations between members and leader are good the task basically unstructured and the power of the leader weak, his style should be more democratic and considerate. If the converse was the case, then a more authoritarian style would appear to be appropriate.

 Robert Tannenbaum and warren Schmidt (1973: 112) argue that the appropriateness of a leader’s actions depend upon the actual situation in which action are taken. They tried to distinguish between the types of problems mangers should handle themselves and those handled jointly with their subordinates. Their conclusions sought to guide a manager in making the appropriate choice of how autocratic or democratic to be in making a decision. Research into these areas has become more specific, and not just a listing of personal abilities Modern trait research is more scientific. These tests have shown that:

·     Leader show better judgment, they are better adjusted psychologically they interact more socially than non-leader;
·     Leader tends to ask for and give more information and take the lead in summing up or interpreting a situation.

This approach is still not considered really satisfactory.  One objection is that the degree to which a person exhibits leadership depends not only on his or her characteristic, but on the characteristics of the situation in which he or she finds him or herself.  A person, therefore, may show better leadership in hostile situation than in a group which is friendly and co-operative.

Peter Principle
There are people who arrive at senior position through their abilities but these abilities may not act to their advantage when they are there. This seems to reflect the approach taken by Peter (2004:90) in his book the Peter Principle which states in a hierarchy, each employee tends to rise to his level of incompetence. Every post tends to be occupied by an employee incompetent to execute his duties, he illustrates this by suggesting that usually competent workers become incompetent supervisor, and competent junior become incompetent senior executives. The fact is that there are competent ranks for them to have reached their level of incompetence. This idea has wide implication, particularly for management training, but must not be considered a universal statement applying to all organization or persons. 

Leadership Training
Some abilities as a leader may take person to the top but may not be to his or her advantage when they are there. From this approach there are points of view which suggest that in a group almost any member may become a better leader if there is circumstances him or her to perform the needed functions of leadership of the group. This implies that leadership is an organizational function’ rather than a personal quality.
A fairly successful model of leadership training used on some management course in the United Kingdom is by (Adair 2005:60).

The model is based upon three overlapping circles that form part of any leadership situation as a functional leadership approach, which identifies function of leader in relation to the basic needs which are common in all leadership situations. Individual needs are distinguished from group needs and the needs of the task to be done. There will never really be a perfect match between the three elements and the job of the leader is to be aware of these aspects and manager in each situation giving suitable priority to the variables. Adair considers that leadership variables differ according to situation.

Training is organized around the eight element of; defining objectives (tasks), planning, controlling, evaluating motivating, organizing, briefing and setting an example. The idea of the model is to encourage a flexible approach to leadership to be more in the adopting of appropriate behaviour than of personal traits.

Functional Leadership Approach
Ways of achieving co-ordination in leadership. In order to be successful, co-ordination must not be directed in an autocratic manner, but rather encouraged in democratic manner, everyone participating in a unified way. It operates vertically as well as horizontally and should be effected at the most appropriate time. In addition to these points, Follett (2006:93) suggests three more factors of effective co-ordination by direct contact between the persons immediately concerned it must commence at the earliest stages of planning and policy-making; it must be a continuous process. It is apparent that everyone is influenced by their colleagues and by the total environment; co-ordination will be easier to achieve if they understand each other’s jobs and they will compromise more if information is   exchanged. The ideal is for arrangements for co-ordination to be such that problem can be anticipated and therefore more easily prevented.

As previously stated, co-ordination exists horizontally and vertical and it is essential for authority and responsibility to be clearly delegated so that department heads know the limits of permissible behaviour. It can be appreciated that as more functions are self-contained the number of organizational relationships will be reduced and less co-operation will be required. If authority overlaps, co-ordination generally will be more difficult; but this may be permissible in some cases especially if the objectives of each department concerned were different.

Techniques Committee aid co-ordination is that they:
·     Pool resources to solve problems;
·     Co-ordinate overlapping or confecting functions;
·     Ensure prior consultation and lead to greater acceptance of decision;
·     Enable executives to be trained
·     Staff meetings are useful, particularly if they are informal.
·     Give a sense of unity to the work of the organization
·     provide an opportunity for subordinates to question superior and provide a forum for discussion;
·     Inform staff of new developments and problems. (Follett, 2006:99)

Conferences are another method of making a group decision. They aid free discussion and help to improve understanding of company matters and this face to face communication is an important factor in effective co-ordination. Programmes are instruments of co-ordination, i.e. a timetable or a production programmes enable results to be compared with standard and actions to be taken where necessary. These programmes register and communicate discussion, and hence allow them to be delegated.

2.         Conceptual Framework

2.2.1   Roles of Policy Formulation
In the administration of business one of the most important tasks is to formulate policy; the work of planning and the determination of company objective become effective when expressed in policy form. A policy is a guide to the action or decision of people. Policies are directives, issued from a higher author, and provide a continuous frame work for the conduct of individuals in a business – they are in effect types of planning. Policies are expressions of a company’s official attitude towards types of behaviour with which it will permit, or desire, employees to act. They express the means by which the company’s agreed objectives are to be achieved and usually take the form of statements, telling members how they should act in specific circumstances. Lampard, (2008:44) reflect management thinking on basic matters and inform those interested in the activities of the company about the company’s intentions regarding them.

Formulation of policy
 Policy formulation may begin at any level of management and may flow upwards or downward along the levels of organization. Policy usually is formed by: The board of directors and senior management, who determine the main policies; being passed up the chain of command until someone takes responsibility for making a decision; External influences; like government legislation, may force a policy change. Policy formulated by executives is usually on broad lies and subordinates have scope in applying it. Any policy should be as specific as possible.

Specific Policies
 It is not always easy to be specific, words must be carefully chosen and policies must be basically sound and well administered. It may be difficult to state policies that will cover all eventualities and this therefore may tend to limit the range of the policies and therefore be unduly restrictive.

Advantages of Specific Policies
 They are easy to refer to and absorb, misunderstandings are relatively few. New employees can easily be made aware of them in their induction. They are a good exercise for management who must have thought about them seriously before writing them down. Media for communicating policy, like manuals letters, conferences, etc will be discussed later in the chapter on Directing.  Polices should be flexible and allow executives discretion in their application. They are more likely to be accepted if they are applied consistently and fairly.

Implied Policies
Policies regarding functional areas will be shown in more detail in the following chapter, but a brief indication will be given now of some of the major types of policy. Product policy involves deciding upon the products to make and depends upon many factors, particularly upon the productions. Such a policy in turn generates other polices, like marketing, finance and research. Production policy deals with, for example: what proportions of plant should be devoted to flow or job or batch production? Market policy involves determining distribution channels, pricing structure of products, volume and types of advertising, credit policy, method of subdividing territory and remuneration of salesmen. Purchasing policy involves notes Phillips (2008:34) what organizations buy and to what extent, and what are alternative sources of supply. Human resource policy involves methods of training, education, pension schemes, incentive plans, management succession and development, benefits, union relation. Another function need policies, but the above will serve to indicate the necessity for clear-cut policies in all section of an enterprise Rules and procedures are often confused with policies. Rules are more specific than policies and they usually entail penalties for misuse. Policy establishes a guiding framework for rules. Policies are broader the rules and are usually stated in more general language.

Procedures reflect policy and provide a standard method by which work is performed and provide   a check when events do not occur. They are subordinate to policy and are useful aid to training. A terminology in the area of planning can be little confusing as numerous terms are used loosely and have similar meanings. All managers plan, no matter at what level. Risk and uncertainty is minimized by planning and this is needed more today than before as social and economic condition alter very quickly and careful planning enables an organization to prepare for change.

Planning helps the organization to define its purposes and activities it enables performance standard to be set and results can therefore be compared with the standard to enable managers to see how the organization is proceeding toward its goals. Planning must be flexible to deal with a changing environment. When plans are made, for example, for addition to the fleet of cars of a transport firm they must take into account possible increases in fuel prices. (McBernards, 2001:77) The higher up the hierarchy of management, the more attention is paid to planning, particularly in setting out goal and strategies for a long period ahead. Managers lower in the hierarchy usually deal with section of the total plan and are concerned with shorter periods of time. Many persons may be involved in planning activities, which must be a continuous process, but the main point is that these activities must produce a specific plan; without plans planning activities have no real effect. One main feature of planning is to make a decision. This will involve assumption about the future and about many variable factors. Planning is essential for the long- term survival of any business enterprise as it helps to determine the most profitable way to allocate limited resources among competing ends. In Principles of Planning (Benson 2008;66) notes that Plans should be based upon clearly defined objectives and make use of all available information. Plans should consider factors in the environment which will help or hinder the organization in reaching its goal. They should take account of the existing organization and provide for control, so performance can be checked with establishment. They should be precise, practicable and simple to understand and operate. They should be flexible, to ensure that if circumstance s necessitate change this can be effected without disrupting the plan.

2.3       Leadership Role on Policy Formulation
Some critics argue that the importance of leadership is greatly overrated and that in many contexts leaders make little or no difference. An interesting aspect of path-goal theory is the notion that situational factors may sometimes render certain leader behaviors unnecessary and/or ineffective. However, path-goal theory stops short of attempting to specify explicitly the conditions under which leader behavior may be unnecessary because of situational factors. According to (Moha, 2007:51), the substitutes for leadership approach attempts to specify some of the main situational factors likely to make leader behaviors unnecessary or to negate their effectiveness. According to this approach, neutralizers are situational factors that make it impossible for given leader behavior to have an impact on subordinate performance and/or satisfaction. In other words, they cancel out, or negate, the effects of a leader’s behavior. Examples of neutralizers that can negate the impact of both relationship-oriented and task-oriented leader behavior are high need for subordinate independence, low subordinate valence for available rewards and physical distance between leader and subordinates. Managers need to assess the presence of neutralizers and attempt to alter the situation, if possible, so that appropriate leader behaviors can have the intended effect. (for instance, a manager may develop new reward possibilities, such as training opportunities, if subordinates have a low valence for currently available rewards)

On the other hand, substitutes are situational factors that make leadership impact not only impossible but also unnecessary. Substitutes for relationship-oriented leader behavior include intrinsically satisfying work and subordinates who have a professional work orientation. Substitutes for task-oriented behavior include able and experienced subordinates and work that is routine, has clearly specified methods, and/or provide clear feedback. The presence of substitutes for leadership can enable a leader to concentrate on other areas in need of her or his attention. says Bass & Bernard (2000:31)  Aside from being concerned about the leadership needs of specific subordinates and work groups, managers also need to consider the broader per- sportive of the organizational life cycle.

2.4       Implication of policy Formulation ON ORGANIZATIONS
According to Mc Robins (2006:39), the view of organization as having life cycles, or predictable stages of development, provides some guidance about when either transactional or transformational leadership is likely to be most appropriate.  When an organization is at it entrepreneurial, or beginning, stage, transformational leadership is particularly instrumental in creating vision that allows the organization to be born and to take a few first steps. At the collectivity stage, additional workers begin to join the initial core group, and transaction leadership becomes an important aid in handling the accelerating growth. By the formalization and control stage, organizational growth requires even greater emphasis on transactional leadership to maintain direction and control. By the elaboration of structure stage, excessive formalization and control often reduce innovation to a low level, so heavy emphasis on transformational styles of leadership are likely to be utilized at every stage in effective organizations,. The amount of emphasis is different in each case. Thus managers need to understand both leadership approaches in order to function effectively. Inherent in putting these approaches into practice is the need to be well versed in organizational communication processes.

Table 1: LEADERSHIP and the Organization Life Cycle

Organization l life –cycle state
                              Most important leadership emphasis
Entrepreneurial                    Transformational
Collectivity                           Transactional
Formalization                                   Transactional
Elaboration of structure      Transformational


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2.5       Optimization of Resource and Policy Formulation
The co-operation workers must be obtained if the business is to run smoothly. The workers must have confidence in the firm and this may not be easy when technical advances produce a fear of unemployment and unrest. Policy must be determined by the board and must be clearly defined, and those employees who have to administer the policy should be given an opportunity to contribute. This may be done in joint consultative committees. In order to have a good policy, a knowledge of those factor an employee regards as important is essential. This involves knowledge of industrial application of sociological and psychological theories, and the force generated should be known and controlled in order to ensure effective collaboration of individuals and groups where company and individual goals can be reached.  Harmony of objective must be the goal. Social scientists are being enrolled in industry to examine sociological problems. A recent approach is to examine the organizational environment, the objectives and methods of management and the forms of company structure states, (Blair 2004:66). It may be that these conditions limit what the individual can achieve. Human resource policies, therefore, are concerned with providing and effective organizational structure, manning it with appropriate personnel and security optimum working condition; the object being to create and maintain a level where the company operates at maximum efficiency. The following factors may be regarded as important and necessary in a human resources policy (Bernard, 2007:56)

·     Remuneration. This must be at least the market rate for the job and give the employee a reasonable standard of living.
·     Security. This is vital to the average worker; it is not so important to the young, or where this full employment, but stability of employment is essential and there must be guarantees against unfair dismissal.
·     Opportunity. If this is not available, a worker may look elsewhere. Vacancies should therefore be filled within a firm wherever possible or practicable. This does emphasize the need for good education and training policies so that existing staff can be trained to fill vacancies.
·     Status. In-status-statement Captor.  It was stated that the Hawthorne Experiments showed that a person feeling that he mattered and that he was a respected member of a group can influence output which lead to the retention of workers or otherwise.
·     Justice. This can the simply defined as confidence in being treated fairly. The security of the worker must not be threatened and specific rules regarding punishment, judgment and appeals procedure must be invoke. These should include guarantees of confidential access to the human resource manager, (Jonah 2008:33)
·     Democracy. In a capitalist structure it may not be easy to invoke the idea that and man has the right to a voice in the way he is governed, and by whom his is governed. Attempts long these lines are the formation of joint consultative committees and the establishment of procedures for regular consultation between managers and employee.
·     General. To assist employee in developing social, educational and recreational amenities and to maintain polices without   discrimination between employees.

Manpower planning seeks to maintain and improve an origination’s ability to achieve corporate objectives by developing strategies which are designed to increase the present and future contribution manpower. There is great difficulty in forecasting future demand because of the changes in the following areas; (Peter, 2002:31).

·     technological- changes in materials technical systems and method power
·     economic – marketing, capital formation
·     social – population trends, social mobility and education
·     Political – industrial legislation (wages and salaries, monetary policy training, redundancy).  
·     The right number of staff is recruited at each level in the hierarchy.
·     Staffing requirements can be better balanced and movement of staff made easier. Areas of high labour turnover are highlighted.
·     Implication of changes in recruitment, promotion and succession plans are foreseeable.
·     Detailed records are needed plus expensive clerical staff.
·     Problems of forecasting changes, especially technological and government policy areas.
·     Forecasts can be uncertain even for few years ahead.

The traditional attitude to manpower is that it is a cost there is greater consideration now towards the idea that it is an investment. Therefore the best use of this investment should be made so as to ensure that manpower achieves personal satisfaction and the company achieves a maximum return on the costs’ it represents.
b.)       It is important to stress the problems of uncertainty today changes can occur in the following more detailed analysis (Montgmory, 2000: 86-87)
·        Production and sales targets and new products
·        Plans for diversifying, expanding or contracting production.
·        centralization or other organizational change;
·        technological changes, like mechanization, improved methods new management techniques; (Yusuf 2007:25-26) observes that:
·        changes in hours of work, holidays, negotiation with trade unions and collective agreements;
·        national policies regarding taxation and redundancy;
·         Changes within company, like retirements, age structure, promotions.

A company must be able to recruit and retain manpower of the type and caliber it requires for efficient operation. Change is a dominate factor today. Processes, products, systems and methods change quickly.  The role of the computer is increasing and there is at present a shortage of systems analysis and programmers, and this will continue for a number of years. New techniques, like operational research, influence the organizational structure of companies and alter the pattern of manning. Some jobs need increased skills, others need less. Thus a high standard of planning needed. The rewards to a company are high as a great reduction in costs is possible, reduction in one area in particular, labour turnover, can save a great deal of money.

Stages of Planning
1.            The existing situation is examined to see if the existing organizational and managing effectiveness can be improved. Procedure involved will include job analysis and grading, performance and potential appraisal.
2.            planning to asses and determine future objectives for all parts of the business
3.            Organization is then planned, breaking down the objectives into posts caption of activities.
4.            Precise requirements for all types for manpower are then identified.
5.            Planning the supply involves noting present stock and its potential and determining the basis for additional requirement. Organization charts can be projected to the future, noting possible promotion candidates and people earmarked for certain jobs.
6.            Career requirements with worth is an essential part of wages and salary administration  (Peter 2006.55)

Organization should be designed to attain the objectives of the company. Functional objectives are set and organization planned to attain them.  Each department must be staffed so that the available skills and abilities are equated with tasks to be done.  There may be changes in the external markets, in the supply of local labour skill, changes in comparative earnings for each category of employee. Other relevant information includes output per man hour and total man hours available. The manpower plan can then be prepared and will also include consideration of policies on: recruitment; promotion and career planning pay productivity industrial relations. Reviews of the progress of plans will take place periodically with yearly revisions a part of longer-term planning cycle.


The co-operation of workers must be obtained if the business is to run smoothly. The workers must have confidence in the firm and this may not be easy when technical advances produce a fear of unemployment and unrest. Policy must be determined by the board and must be clearly defined, and those employees who have to administer the policy should be given an opportunity to contribute. This may be done in joint consultative committees. In order to have a good policy, a knowledge of those factors an employee regards as important is essential. This involves knowledge of the industrial application of sociological and psychological theory, and the forces generated should be known and controlled in order to ensure effective collaboration of individuals and groups with that company and individual goals can be reached. Harmony of objectives must be the goal.

Social scientists are being enrolled in industry to examine sociological problems. A recent approach is to examine the organizational environment, the objectives and methods of management, and the forms of company structure, (Jonah 2008:29).  It may be that these conditions limit what the individual can achieve. Human resource policies, therefore, are concerned with providing an effective organizational structure, manning it with appropriate personnel and securing optimum working conditions; the object being to create and maintain a level of morale which evokes the full contribution of all employees in ensuring that the company operates at maximum efficiency.

2.6     External Environment Challenges on Policy Formulation and Manpower Planning

Manpower planning seeks to maintain and improve an organization’s ability to achieve corporate objective by developing strategies which are designed to increase the present and future contribution of manpower. Ufomba (2007:112-114) there is great difficulty in forecasting future demand because of the changes in the following areas:

·        Technological – changes in materials, technical systems and methods of power.
·        Economic – marketing, capital formation.
·        Social – population trends, social mobility and education.
·        Political – industrial legislation (wages and salaries, monetary policy, training, redundancy).

Advantages:
·        The right number of staff is recruited at each level in the hierarchy.
·        Staffing requirements can be better balanced and movement of staff made easier.
·        Areas of high labour turnover are highlighted.
·        Implications of changes in recruitment, promotion and succession plans are foreseeable.
·        Detailed records are needed plus expensive clerical staff.
·        Problems of forecasting changes, especially technological and government policy areas.
·        Forecasts can be uncertain even for a few years ahead. (Tebe, 2008:39)

The traditional attitude to manpower is that it is a cost; there is greater consideration now towards the idea that it is an investment. Therefore the best use of this investment should be made so as to ensure that manpower achieves personal satisfaction and the company achieves a maximum return on the ‘costs’ it represents. Yusuf (2007:25-26) observes that it is important to stress the problem of uncertainty today; changes can occur in the following more detailed analysis:

·        Production and sales targets and new products;
·        Plans for diversifying, expanding or contracting production;
·        Centralization or other organizational change;
·        Technological changes, like mechanization, improved methods, new management techniques;
·        Changes in hours of work, holidays, negotiations with trade unions and collective agreements;
·        National policies regarding taxation and redundancy;
·        Changes within company, like retirements, age structure, promotions.

A company must be able to recruit and retain manpower of the type and caliber it requires for efficient operation. Change is a dominant factor today. Processes, products, systems and methods change quickly. The role of the computer is increasing and there is at present a shortage of systems analysts and programmers, and this will continue for a number of years. New techniques, like operational research, influence the organizational structure of companies and alter the pattern of manning. Some jobs need increased skills, others needed less. Thus a high standard of planning is needed. The rewards to a company are high as a great reduction in costs is possible; reduction in one area in particular, labour turnover can save a great deal of money.

Stages of Planning
According to Pencil (2004:55), stages of planning include:
1.            The existing situation is examined to see if the existing organizational manning effectiveness can be improved. Procedure involved will include job analysis and grading, performance and potential appraisals.
2.            Planning to assess and determine future objectives for all parts of the business.
3.            Organization is then planned, breaking down the objectives into posts capable of being filled. The method of organization can greatly aid co-ordination of activities.
4.            Precise requirements for all types of manpower are then identified.
5.            Planning the supply involves noting present stock and its potential and determining the basis for additional requirements. Organization charts can be projected to the future, nothing possible promotion candidates and people earmarked for certain jobs.
6.            Career requirements of individual must be noted. The payment of salaries commensurate with worth is an essential part of wages and salary administration. (Peter 2006:55)

Organization should be designed to attain the objectives of the company. Functional objectives are set and organization planned to attain them. Each department must be staffed so that the available skills and abilities are equated with tasks. There may be changes in the external markets, in the supply of local labour skill, changes in comparative earnings for each category of employee. Other relevant information includes output per man hour and total man hours available. The manpower plan can then be prepared and will also include consideration of policies on: recruitment; promotion and career planning pay productivity industrial relations. Reviews of the progress of plans will take place periodically with yearly revisions a part of longer-term planning cycle. Monthly budgets will be prepared and a comparison of actual and planned targets will be made and variance noted. Information obtained will be feedback to earlier parts of the cycle which may then indicate the need for changes in the plans.
Manpower planning should be an integral part of corporate planning and top management backing is essential. The skills of individuals must be continually developed in order to meet the needs of technological, economic and social change.
The recruitment and selection processes must be high. Many company reports now contain the average numbers of persons employed over the year and the amount of wages and salaries paid to them. Labour turnover figures may also give valuable information. Figure 3 shows some of the more important aspects for the main stages in manpower planning. The starting points are the overall corporate objectives and plans of which manpower plans are part. The manpower demand forecast relies on sales forecasts. These are related to forecast production levels and required manpower is then determined. The manpower supply forecast requires information on the current labour force, labour turnover and retirement trends, training, and skills, available. Man hours available will vary with shift patterns, overtime, and sickness.

Fig. 3 Stages of Manpower Planning
Stages of Manpower Planning

For all existing manpower strength and work volumes are analyzed and detailed forecasts made of future work volume are then related to past ratios to give a forecast. This is called ratio- trend forecasting. Another method is called theoretical requirements forecasting and involves assessing and defining the type and volume of activity needed to attain desired results. Specific objectives are given to management. Existing manpower and work volume are compared with forecasted future work volume and manpower noting any probable changes in methods. So, for each category of staff, there is a statement of present and future positions, and this enables manpower requirements to be calculated.
Personal records observe Ufomba (2007:112) must be adequate and kept up to date. Records containing relevant facts must be easily available: some firms have the details on computer files. Information may include these details:

A)         Identification- name, date of birth and service, nationality, reference number, home address and next of kin.
B)          Education- schools, universities, technical or professional training. Details of remuneration
C)          Experience – employment history and details of current job including details of remuneration.
D)         Potential- assessments, a note career development and training assignment  planned and completed
E)          General- leisure interests, armed forces, medical history. (Peter, 2006:80)

Employment inventories are useful, and analysis into male and female job categories, part- and full-time, is needed. The pattern of ages should be noted as it may be that many are retiring shortly or many are ready for promotion. Thus the problems which may arise can be dealt with if know in time. Turnover can be analyzed into reason for leaving, length of service, age group and type. The cost of turnover is great. An ordinary clerical job involves these costs- adverting, management time on interviewing, temporary help or overtime paid during staff shortage, reduced output during training time and    trainee’s time this could easily add up to 2000 per job vacancy. per reduction in job turnover from 10 per cent to 5 percent  in a firm is an  enormous saving. International Business Machines (IBM) has a five year forward plan, broken down into about fifteen  main occupational groups’ showing  numbers  to be recruited to replace predicted staff turnover and to meet the company’s growth plans, which are based upon market research and product development forecasts. The key is a very detailed job classification, which is expressed in a four- digit code for computer processing.   Nwakpuda (2003:214) involves the appraised of many factors in order to decide the broad principles which the company is to follow. Correct answers to the following important questions are needed:

·               What is the nature of completion and the present position in the life of existing products?
·              What are the most effective methods of distribution and advertising?
·              What methods of transport, wholesaling, allocation of sales quotas sales training and control of human resources should be adopted?

It is sometimes preferable for a committee comprising heads of production, finances and marketing to determine policy, to ensure complete co-ordination.

Marketing Plans
 Whatever plans are made to direct and control the marketing operation, they must be flexible, as there are many outside factor which can easily affect the plans, like government legislation. These plans can be set up for each aspect of marketing policy should be known by all the staff; this enables them to act in unified manner with wholesalers, retailers and customers. An organization’s reputation I largely built up on it s selling policy, like Marks and Spencer- the lowest price consistent with product quality and reliability. It is worthwhile considering an example of the need for careful forecasting. There is current trend to build hypermarkets on the outskirts of urban developments, where land is low in price and the site is convenient for consumers who are more mobile than in the past. Some of the points that will need to be considered include the estimates of:
·               The growth of the country’s economy (gross National product);
·              Availability of suitable sites and their cost
·              Changes in spending habits of consumers;
·               Attitude to self-service;
·              Population trends and the rate of  urban development;
·              Local plans for road building;
·              Availability of motor transport, especially for housewives. (Moha, 2008:16)
 The preparation of the marketing plan can be assisted by an analysis of the true position of the business in the market place. One method used in completing a marketing audit is the preparation of a SWOT analysis. Internal factors are the basic strengths, weaknesses, of company, like managerial, financial technical. External factor are the opportunities and threats outside a company’s direct control, like technology, competitors, government legislation. A  SWOT analysis seek to identify the strengths, weaknesses, opportunities and threats and presents such information  clearly to enable a company to state its position on key issues. For example, what do our customers need? What are our competitors doing? A marketing audit covers a wide area. In the business  and economic environment, there is  a wide range of areas to be examined, in order to isolate those factors considered critical to the performance  of a company, like economic  social, political, business , legal technologic , international.  In the competitive and company environment, the product range, market share, pricing, promotion and distribution need to be examined. The nature of supply and demand for the products and the markets size and trends are also part of the total audit checklist.

If a marketing audit is properly completed it will provide the basis for setting realistic marketing objectives and strategies.  It is important to note that customers are attracted to the benefits that a product will bring and not the product itself. So a customer- or market orientated approach is required to product development, rather than a product orientated approach. The needs and wants of the customer are of paramount importance.

Public Image policy
It is important that a company should decide, as an important matter of policy, what type of public image is required. To this end, all polices- marketing manufacturing and human resources- should reflect this overall policy of image. Then a basic public relations policy can be put forward to ensure  that the public  are influenced to react to the company in the desired way there are a number of publics, like shareholders, customers,  employees potential and present) suppliers and government . The various publics can be influenced by good public relations to regard the organization as (Benson, 2008:33)

·               Public spirited with civic responsibility;
·              A good organization to work for, invest in’
·              A company whose products can be purchased with confidence and reliability.
It is also important to increase morale both inside and outside the company. If employees are proud of the organization, its achievement and service to the community, this will be reflected in their daily work. This can, for example, help salespeople to be more confident in their approach to selling. Effective public relations can also be of help in the promotion of products the purpose being to back up advertising and to ensure the customer is more favourably disposed towards the product of the company which is to be advertised. So, in effect public relations promoters a company and it products to a wider range of public than normal advertising and sales promotion. There is a problem in trying to measure the effectiveness of public relations as its results may not be too evident or capable of measurement.

Management must ask itself a basic question about the present business of the company and its future plans. A close watch is need on existing product stages, to consider whether they need to be revitalized, dropped, or new product introduced. The answered obtained will form the basis for product planning decisions for the future profitability of the company. The various elements of product planning have to be modified or change during the various phases of the cycle, for example, policies for pricing, research and development, market research, packaging advertising sale promotion schemes….
The right mix of the marketing ingredients is vital.

2.7       Summary of the Review of Related Literature
One interesting issue involving leadership is the prospect that managers and leaders are not necessarily one and the same. According to one arguments, managers do the same things over and over (do things right), but it takes leaders to innovate (do the right things), bring about major changes, and inspire followers to pursue extraordinary levels of effort. In studying the issue, leadership expert have made a distinction between transactional and transformational leaders (Bernard 2000:12). Transactional Leaders motivate subordinates to perform at expected levels. They do this by helping them recognize task responsibilities, identify goals, acquire confidence about meeting desired performance levels, and understand how their needs and the rewards that they desire are linked to goal achievement. As you have probably recognized, transactional leadership is closely allied to the path-goal theory of leadership. The other situational leadership theories discussed in this chapter can also be characterized as transactional leadership approaches.
Transformational Leaders motivate individuals to perform beyond normal expectations by inspiring subordinates to focus on broader missions that transcend their own immediate self-interests, to concentrate on intrinsic higher-level goals (such as achievement and self-actualization) rather than extrinsic lower-level goals (such as safety and security), and to have confidence in their abilities to achieve the extraordinary missions articulated by the leader.  Transformational leadership is not a substitute for transactional leadership. It is a supplemental form of leadership with an add-on effect: performance beyond expectations. The logic is that even the most successful transformational leaders need transactional skills as well to manage effectively the day-to-day events that form the basis of the broader mission. According to Bass (2001:65), three leadership features are particularly important to transformational leadership: charisma, individualized consideration, and intellectual stimulation. Of these, charisma is the most important. Charisma is the leader’s ability to inspire pride, faith, and respect, to recognize what is really important, and to articulate effectively a sense of mission, or vision, that inspires followers. Individuals such as Martin Luther King, Mahatma Gandhi, John F. Kennedy, and Franklin D, Roosevelt have been described as charismatic.

Researchers have attempted to identify behavioral components associated with charismatic leaders. Their efforts suggest that such leaders strive to change the status quo, project future goals that are idealized visions very different from current conditions, and behave in somewhat unconventional ways and counter to existing norms. The studies also indicates that charismatic leaders rely heavily on referent and expert power and attempt to get others to share a radical vision of changes. The second factor associated with transformational leadership, individualizes consideration, and involves delegating projects to help develop each follower’s capabilities; paying personal attention to each follower’s needs, and treating each follower as an individual worthy of respect. The third factor, intellectual stimulation, involves offering new ideas to stimulate followers to rethink old ways of doing things, encouraging followers to look at problems from multiple vantage points, and fostering creative breakthroughs in obstacles that had seemed insurmountable. Not everyone agrees that transformational leaders must have charisma. There does, however, seen to be agreement that such leaders need to provide a vision of a desired future state, mobilize commitment, and bring about changes that enable followers to reach the vision. Norman (2000:115), engaged in these behaviors when he brought about major changes at an old-line insurance company that had run into trouble. (Martins, 2004:49)    

Figure: 2.4: Add-on effect of transformational leadership.

Source: Bass and Bernard Studies (2000) Transactional and Translational Leaders: Texas: Prentice Hall Inc.

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THE EFFECT OF LEADERSHIP ON POLICY FORMULATION AND IMPLEMENTATION IN THE MANUFACTURING FIRMS IN ENUGU STATE

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