CHAPTER I

INTRODUCTION
 CHAPTER I

INTRODUCTION

Leadership: The significance

Leadership is the art or process of influencing people so that they

will strive willingly and enthusiastically toward the achievement of
group goals (Heinz Weihrich and Harald Koontz: 2006)1. Leadership is
the ability to inspire confidence and support among the people who are
needed to achieve organizational goals (DuBrin: 1998)2. “Leadership is
influence, especially influence of the behaviour and thoughts of others.
Leadership can be brought to bear in many ways. Among the most
prominent types of leadership are the following three: Strong man
(Authoritarian), Transact or (Rewarding), and Visionary Hero
(Inspiring). A real leader might use all types at different times” (Manz
and Sims: 2001)3. “Leadership, to a great extent, is based upon the
consent of the participants” (Mason : 1984)4. Of the course, leader is a
person who inspires confidence and support among the people who are
supposed to achieve organizational goals.

The topic of leadership has always held a strong fascination for

man and has been an elusive subject for researchers. Management
literature abounds with prescriptions on how to be a good leader.
Directing others for the purpose of accomplishing a common task is
necessary and desirable as long as we must undertake tasks which one
man cannot accomplish without the assistance of others. Thus,
leadership has been recognized as one of the significant aspects of
human activity.

The word ‘leadership’ has been widely used by political orators,

business executives, social workers, philosophers and scholars both in
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 speech and writing, yet the real meaning has eluded almost everybody.
This is clear from the fact that a comprehensive volume summarising
research on leadership includes 150 pages of bibliography and cites
more than 2500 studies (Aran Kumar: 2000)5.

The concept of leadership has transformed radically since 1300

when the word “leader” first appeared in the English language, meaning
“to travel” or “show the way” (The Oxford English Dictionary).
Leadership as a word is said to have entered the lexicon much later
(Rajan: 2009)6.

Leadership is generally considered as a process of influencing the

activities of a group in an effort to achieve certain goals (Asha Hingar:
. 1986)7. It is all about shaping outcomes which, have positive influence
on overall human progress to awaken people towards a cause,
reinforcing concepts and uncovering properties of nature to raise overall
consciousness of society toward superior state of living (Prashanth
Kumar; 2009)8. It is about, passion, making the right decisions for
common good, taking everyone along on a journey and making a success
out of it. It is about challenging the status quo of improving each time
(InderWalia: 2009)9.

It is shifting a person’s vision to higher sights, the raising of a

person’s performance to a higher standard, the building of a personality
beyond its normal limitations (Inder Walia: 2G09)10 . Leaders adopt a
personal and active attitude towards goals. The influence a leader exerts
in altering moods, in evoking images and expectations, and in
establishing specific desires and objectives determines the direction a
business takes. The net result of this influence, changes the way people

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think about what is desirable, possible and necessary (Aswathappa:
2007) n.

Every organisation needs strong and able leaders for its success.
Leadership is an important aspect and essential ingredient of
management. Organisation would be merely a confusion of people and
machines without a leader.

Leadership styles:

The customary approach to the analysis of behavior is to classify

various types of leadership into styles. The style is the way in which the
leader influences followers (Abraham Zaleznik: 2004)12. It is the
behavior the leader exhibits during supervision of subordinates
(Mamoria and Gankar: 2008) . Leadership is the total pattern of
explicit and implicit leader’s actions as seen by employees. It represents
a consistent combination of philosophy, skills, traits and attitudes that
are exhibited in a person’s behavior. Each style also reflects, implicitly
or explicitly, a leader’s beliefs about a subordinate’s capabilities
(John,W. Newstrom and Keith Devis: 2002)14

Style is an important part of leadership, because it shapes a

manager’s approach to leadership. Different approaches to the subject
have led to various classifications of leadership styles. Although
behavior categories may be labeled similarly, their conceptualization and
operationalisation may be totally different in most cases. Leadership
style is in general of two types: the first one is the employee-centered
type, described as democratic or participative, and the second one is the
task-centered type, described as autocratic or authoritarian (Giritti and
Topcu Oraz: 2004)15'
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 Leadership in Indian organizations has generally been found to be
of the benevolent authoritarian type (Syed Vazith: 2002)16. In many
proprietary organizations, a certain amount of paternalistic attitude
prevails. As contrast to these, there are many organizations which put
high emphasis on supportive leadership. Thus the total position appears
to be a mixture, and the real situation in this context can be appreciated
only when a detailed account of various practices is taken for
consideration. Indian Work Organizations’ are classified into three parts
(Syed Vazith: 2002) , which have some distinctive features: a family
managed traditional organizations, professionally managed Indian
organizations and foreign owned organizations and public sector
enterprises. In family managed traditional organizations the most
prevalent style is autocratic. The organizations in the private sector,
owned by Indian or by multinationals have appreciable degree of
participation or democratic leadership. In the public sector organizations,
bureaucratic style is more prevalent owing to the work culture inherited
by public sector managers. The above discussion amply demonstrates
the fact that the leadership is all pervasive and entered every area of
activity.

In this research work the researcher has classified the leadership

styles into two categories; Employee oriented and Production oriented.
Employee oriented leaders are focused on interpersonal relations. They
are concerned with their employees' needs and tend to have empathetic
personalities. In contrast, production-oriented leaders tend to be more
technically focused and are mostly concerned with accomplishing tasks
and project outcomes. This type of leadership is less involved with
employees on a personal level, as their interest is outcomes-based.

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 Further, employee oriented leadership style is subdivided into
Participative style and Relationship style and likewise production
oriented style is further divided into Task style and Setting Style.
Leaders with participative approach give more importance to employee
participation in decision making process, whereas relationship oriented
leaders are focused on interpersonal relations. Task style leaders are
mostly concerned with accomplishing tasks and project outcomes,
whereas setting style leaders are more focused on setting task, goals and
standards for their subordinates and will keep a continuous watch on the
performance of the employees.

Small scale Industries: The significance

Our Honourable President of India, (Pratibha Devisingh Patil:

2010) 18 at the presentation ceremony of the National Awards to Micro,
Small & Medium Enterprises, in New Delhi on August 31, 2010 said
that “The contribution of MSMEs to the economic growth of countries is
recognized worldwide. In India, these enterprises account for almost 45
percent of manufacturing output, 95 percent of the number of industrial
units and 40 percent of exports. Clearly they are engines of growth.
Besides, the sector provides employment to almost 60 million people,
making it the largest source of employment after the agriculture sector.
Moreover, many from the vulnerable and marginalized sectors of
society, as well as a large number of women workers are engaged in
MSMEs.”
One of the striking features of planned economic development in
India has been development of Small Scale Village and Tiny
Enterprises. The country accorded high priority to this sector on account
of its employment generation potential, comparatively low requirement
of capital, short gestation period, useful links with medium and large

5
sectors, promotion of balanced regional development, utilization of local
resources, production of exportable products, etc. In this context small is
really beautiful, efficient, innovative and creative where the pursuit for
progress is endless and growth is the way of life.

The small scale sector has emerged as a dynamic and vibrant

sector of Indian economy. The small scale sector accounts for 40% of
the industrial production, more than 30% of the total exports and
employs more than 192 lakh persons in about 34 lakh small scale
industrial units in the country. As per the third census of SSI conducted
in 2001-02, the size of registered SSI sector (working units) is estimated
to be 13,74,974, the proportion of SSIs is 65%, about 5.04% are
ancillary units and remaining 34.45% are Small Scale Business
Enterprises. The proportion of the units in registered SSI sector
operating in rural areas was 45.80%. The third census also indicates that
there are 91,46,216 units in Unregistered SSI sector, out of which
38.75% of the units were found to be SSIs, 61.25% Small Scale
Business Enterprises and 2.94% ancillary. Size of the unregistered SSI
sector is almost seven times that of registered SSI sector. Uttar Pradesh,
Andhra Pradesh, and Maharashtra constitute one-third of total SSI sector
of the nation, their respective contribution in Small Scale Sector was
found to be, 16.33%, 8.32%, and 7.64% respectively.

Small scale sector has been playing a prominent role in the socio­
economic development of the country for the past five decades. It has
direct impact on the growth of national economy through the
establishment of a more flexible, innovative and competitive structure.
In the context of liberalization as experienced through integration with
the global economy in a phased manner, and the national and
international competitive environment, prospective and strategies for

6
small industry development have undergone a sea change. The biggest
challenge for SSIs in the emerging market scenario is to fully exploit the
benefits of their product and process capabilities on a sustainable basis.
WTO norms such as safety, environment, labour and patenting are also
assuming great importance.

The potential of SSIs to generate employment has remained the

strongest argument in their favour. The sector now employs 17 million
persons and is the second largest employer of India’s workforce after
agriculture. About 7,500 products are manufactured in the small-scale
sector and the export share is 35%. The composition of exports shows
the largest shares of SSIs are in the industry groups: hosiery and
garments (29.0 percent), food products (21.4 percent) and, leather
products (18 percent). The industry groups which have recorded high
growth rates and a large share in total production of SSIs are: textile
products, wood, furniture, paper and printing, metal products etc.

Growth of Small-Scale industries in India

The Small-Scale Industrial Sector in India has been growing at a

very rapid scale. Despite the global and domestic recession, small-scale
industries registered a higher growth rate than the overall industrial
sector in terms of number of units, production, employment and exports.

As per the Third All India Census of SSIs held for the year 2001-
02, there were 105.21 lakh SSI units in the country, out of which 13.75
lakh were registered working units and 91.46 lakh unregistered units.
Under the Micro, Small, and Medium Enterprise Development Act,
2006, the definition and the coverage of the MSE sector have been
broadened significantly. The micro and small enterprises provide
employment to an estimated 31.2 million persons in the rural and urban

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areas of the country. During 2003-07, the MSE sector registered

continuous growth in the number of enterprises, production,

employment, and exports. The table No. 1.1 shows the performance of

MSEs.

Table No.1.1: Performance of Micro and Small Enterprises at a

glance

Year Total Fixed Production Employment Exports

Units(in Investment (Rs.in crores) (in Lakhs) (Rs. in
Lakhs) (Rs.in crores) crores)
2001-02 105.21 1,54,349 2,82,270 249.68 71,244
(4.07) (5.11) (8.03) (4.44) (20.07)
2002-03 109.49 1,62,317 3,14,850 260.21 86,013
(4.07) ' (5.16) (11.54) (4.36) (20.73)
2003-04 113.95 1,70,219 • 3,64,547 271.42 . 97,644
(4.07) (4.87) (15.78) (4.31) (13.52)
2004-05 118.59 1,78,699 4,29,796 282.57 1,24,417
(4.07) (4.98) (17.90) (4.11) (27.42)
2005-06 123.42 1,88,113 4,97,842 294.91 1,50,242
(4.07) (5.27) (15.83) (4.37) (20.76)
2006-07 261.01 5,00,758 7,09,398 594.61 1,82,919
(111.4) (166.20) (42.49) (101.62) 21.50
2007-08* 272.79 5,58,190 7,90,759 626.34 2,02,017
(4.51) (11.47) (11.47) (5.34) (10.67)
2008-09* 285.16 6,21,753 8,80,805 659.35 N.A
(4.53) (11.39) (11.39) (5.35)
2009-10* 298.08 6,93,835 9,82,919 695.38 N.A
(4.53) (11.59) (11.59) (5.47)
Source: Annual Report (2009-10), Ministry of Micro, Small and Medium
Enterprises, Government of India,

* Denotes projected figures.

Note: Figures in parentheses indicate percentage growth over previous years.

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 Table 1.1 reveals that the number of micro and small industries
was increased from 105.21 lakh units in the year 2001 to 298.08 lakh
units in the year 2010 and the growth rate is 183.32 percent. Fixed
investment increased from Rs. 1,54,349 crores in the year 2001 to Rs.
6,93,835 crores at a growth rate of 349.53 percent. The value of
production increased from Rs.2,82,270 crores to Rs. 9,82,919 crores
during the period of 2001 to 2010. Employment had increased from
249.68 lakh people to 695.38 lakh people with the growth rate of 178.51
percent, similarly exports from small and micro industries increased
from Rs. 71,244 crores to Rs. 2,02,017 crores during the period 2000 -
08.

Dakshina Kannada is one of the most developing districts in

Karnataka State and housed 2,780 tiny, micro and small industries at the
end of year 2009. These industries are scattered around all the five
Taluks of Dakshina Kannnada District. Among these five Taluks,
Mangalore Taluk housed 1982 tiny, micro, and small scale industrial
units. Most of these industries are tiny and micro in nature. The total
small scale industrial units registered and located in Dakshina Kannada
District are only 146. Among these, Mangalore Taluk consists of 76
small scale industrial units. Most of the industrial units are family-
managed traditional organizations. The present study deals with the
leadership styles adopted by the Owner-Managers of small scale
industrial units of Dakshina Kannada District.

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Definitions of concepts used in research:

• Leader: A leader is a person who influences a group of people

towards the achievement of a goal.
• Leadership: Leadership is a process whereby an individual
influences a group of individuals to achieve a common goal.
• Style: The way of expressing something, i.e., a characteristic of a
person is called a style.
• Leadership style: Leadership style is the way in which the leader
behaves with his followers
• Autocratic leadership style: In a system of autocratic leadership,
one person has control over all the workers or followers. The
leader is in a complete control and no one is permitted to make
any suggestions or offer any opinions, no matter how it may
benefit the group.
• Democratic leadership style: Under democratic leadership, the
people have a more participatory role in the decision making
process. One person retains final say over all decisions but allows
others to share insight and ideas.
. Laissez-faire leadership style: Laissez-faire leadership, also
known as delegate leadership, is a type of leadership style in
which leaders are hands-off and allow group members to make the
decisions.
• Participative leadership style: Leader with participative
approach gives more importance to employee participation in
decision making process
• People - oriented leader: People oriented leaders are concerned
with their employees’ needs and tend to have empathetic
personalities.

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• Production - oriented leader: Production-oriented leaders tend to
be more technically focused, and are mostly concerned with
accomplishing tasks and project outcomes.
• Relationship style: Relationship oriented leaders are focused on
interpersonal relations.
• Setting style: Setting style leaders are more focused on setting
task, goals and standards for their subordinates and will keep a
continuous watch on the performance of the employees
• Task style: Task style leaders are mostly concerned with
accomplishing tasks and project outcomes
• Small scale industry: A small scale enterprise is one where the
investment in Plant and Machinery is more than Rs.25 lakh but
does not exceed Rs.5 crore in case of manufacturing industry and
more than Rs.10 lakh but does not exceed Rs.2 crore in case of
service industry.
• Tiny and Micro industry: A tiny and micro industry is one
where the investment in Plant and Machinery does not exceed
Rs.251akh in case of manufacturing industry and does not exceed
Rs.10 lakh in case of service industry.
• Medium scale industry: A medium enterprise is one where
investment in Plant and Machinery is more than Rs.5 crore
but does not exceed Rs.10 crores in case of manufacturing
industry and more than Rs.2 crores but does not exceed Rs. 5 core
in case of service industry.
• Large scale industry: A large scale industry is one where
investment in Plant and Machinery is more than Rs.10 crores in
case of manufacturing industry and more than Rs. 5 crores in case
of service industry.

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Review of Literature:

A review of literature is the mirror of earlier studies which

enriches the researchers and helps to identify the gaps for further
research. On the part of the researcher, it is incumbent to get himself
acquainted with the literature that has bearing and relevance in one form
or the other to the topic chosen for an in-depth study. This becomes
possible only when the review of the literature is carried out on the
research topic chosen. The review of literature serves more than one
purpose (Moses: 2006)19.

It is practically impossible to review all the available studies and

hence the review is confined to the major works in the area that have a
bearing on the present study and the presentation is based on
chronological order. These studies are in the form of doctoral thesis
articles, books etc.

Review of Western Research Studies:

The following is the review of earlier studies carried out in the West:

An empirical study carried out by Cowley (1928)20 on “Three

distinctions in the study of leaders”, he used psychological testing to
ascertain the difference between leaders and followers, measuring traits
such as aggressiveness, self confidence, intelligence and emotional
stability. It was found in the study that leaders’ indeed possess different
traits than their followers. It was further found that there is a difference
between true leaders and those who hold leadership positions but who
are not leaders, a phenomenon described as headship rather than
leadership. There is a difference between individual leadership traits

12
and the leadership traits required for a specific situation. It was
concluded that there is a difference between natural leadership and
leadership in specific situation.

In their article on “Differences and disagreement as factors in

creative group problem solving” Hoffman, L. R., et.al. (1962)21, argued
that conflict of opinion increases the number of better quality decisions.
It was found in the study that when employees are given an opportunity
to participate in decision making, leader is able to generate multiple
ideas which in turn lead to better quality decisions.

Clark W. Alfred and Sue McCabe (1970)22 in their study on

“Leadership Beliefs of Australian Managers” investigated the
leadership beliefs of 1339 Australian managers with the objective of
comparing the leadership styles adopted by the Australian managers
with managers of other countries who is having similar culture and
found that the Australian Leaders behaviours are similar to the
leadership behaviours of Managers of UK and USA, rather than those
of managers from other cultural groups.

In a study on “ A study of Supervisor Subordinate Influence on

Satisfaction in Four Cultures” by Thiagrajan and Deep (1970)23 with
the objective of studying the supervisor - subordinate influence and
satisfaction in four cultures viz., Belgium, Italy, UK and USA, found
that the authoritarian supervisor was found to be most influential
whereas the participative supervisor was least influential. Further, the
involved subordinate was more influential than the neutral and non-
involved one.

Maier and Shashkin (1971 )24 in an article on “Specific Leadership

Behaviour that promote problem solving” said that Democratic

13
Leadership Style leads to better decision quality, because this leadership
style encourages group members to express their views and consider
conflicting points of view. These differences in opinion were promoted
through discussion, integration, and creative decision making

Ghiselli Edwin, E. and Wyatt Thomas, A (1972)25 in their

research study on “Need satisfaction, Managerial Success, and Attitudes
Toward Leadership” studied 145 Japanese managers with the objective
of studying the relationship between need satisfaction and Leadership
Styles, the researchers found that for those managers who favoured the
Authoritarian Leadership and Supervision, the relationship between
need satisfaction and success was higher than in the case for those who
favoured democratic leadership. Thus, in a fairly structured social
relationship, the successful Japanese Manager attains more need
satisfaction than would be the case in a relatively more ambiguous
superior - subordinate situation.

In an article on “Managerial Leadership: A review of theory and

research” by Yukl (1989)26, defined the concept “Leadership”. He
defined leadership to include influencing task objectives and strategies
influencing commitment and compliance in task behaviour to achieve
these objectives, influencing group maintenance and identification and
influencing the culture of an organization.

A study conducted by Steve Rowlinson, et.al. (1993)27 on

“Leadership Styles of Construction Managers in Hong Kong”, with a

sample of 28 medium and large size Construction Projects, identified
that project managers and project leaders in the Hong Kong Construction
Industry are generally relationship oriented and socio - independent and
their management style concerned with task accomplishment.

14
 Romig, D. A (2001)28 in her book titled “ Side By Side
Leadership” offered the definition of Leadership as: two way street;
interaction fields; visionary goals; focused creativity; structured
participation; proven knowledge; transferred authority. She then applied
the definition to the natural system theory and concluded that:

• Leadership is an interactive process

• The kind of leadership that achieves dramatically improved
performance is a two way street.
• Often the most effective way for leaders to influence
subordinates is to change their own behaviour
• Contributions have a great positive impact on result than
followers.

A research study conducted by Girilli. H and Topcu Oraz. G

(2002)29 on “Leadership Styles: Some Evidence from Turkish
Construction Industry” with the main objective of examining whether
there is a difference in the leadership styles adopted by the managers in
Construction settings and the extent of the ability to use variety of
leadership styles. Researchers have taken a sample of Construction firms
located in Istanbul and 43 individuals. The study revealed that managers
in higher positions are stronger in pace setting style than those in lower
management positions. It also showed that male managers are less
democratic than female managers.

John. D. Politis (2003)30 had undertaken a survey of 104 middle

level managers from a wide variety of United Arab Emirates Industries
who were engaged in Quality Management Programs (QMP) to
investigate the relationship between different leadership style
dimensions and a number of Quality Function Deployment (QFD)

15
methodologies. Results indicated that the leadership styles that involve
human interaction and encourage participative decision making are
supportive of open and collaborative QFD methodologies.

In an exploratory study undertaken by Antony T. S. Chan and

Edwin H. W. Chan (2004)31 with the purpose of empirically evaluate the
transformational and transactional leadership styles among building
professionals in the construction industry. This was part of a large-scale
research project undertaken by the writers. Bass’s transformational
leadership theory reported in 1985 was employed and tested in a sample
of 510 professional employees from a cross section of qualified building
professionals selected from four countries. The main objective of the
study was to examine the extent of leaders who are perceived to use
transformational and transactional leadership styles and their
effectiveness. Results of the study suggested that five of the
transformational factors and three of the transactional factors are
significantly correlated with leadership outcomes of leader effectiveness,
extra effort by employees, and employees’ satisfaction. The results
further supported that transformational leadership could augment
transactional leadership in producing greater amounts of performance
and satisfaction.

Ali Mohammed Mosadegh Rad and Mohammad Hossein

Yarmohammad (2004)32, did a research on the topic “A study of
relationship between Managers Leadership Style and Employees’ Job
Satisfaction” with a sample of 814 employees of Isfahan University
Hospitals, Isfahan, Iran, with an objective of exploring the relationship
between Managers’ Leadership Styles and Employees’ Job Satisfaction
is significantly correlated and is affected by leadership styles of
Managers especially employee - oriented dimension.

16
 Daniel Goleman (2004)33 in his article on “What makes a leader”
opined that most of the effective leaders are alike in one crucial way:
they all have a high degree of emotional intelligence. Emotional
intelligence includes self-awareness, self-regulation, motivation,
empathy, and social skill. Intelligence Quotient (IQ) and Technical skills
are also relevant. But they are the “threshold capabilities” i.e., the entry
level requirements.

Titus Oshagbemi and Roger Gill (2004)34 in their research on the

topic “ Difference in Leadership Styles and Behaviour Across
Hierarchical Levels in UK Organisation” collected data from 405
managers in UK with the objective of finding the differences in
leadership styles adopted by different levels of managers found that
generally there are significant differences in the leadership styles
between senior and first level managers but not between senior and
middle level managers or between middle level managers and first level
managers.

Jit. S. Chandan (2005) , in his book on “Organizational

Behaviour” stated that there are three different types of leadership styles.
Firstly, autocratic leaders, who make their own decisions and expect the
subordinates to implement these decisions and accept no deviation from
it. Secondly, democratic leaders, who ask the subordinates for input and
feedback before making decisions and such input and feedback is taken
into consideration very seriously. Finally, the laissez-faire style of
leadership, where the leader is simply the provider of information and
resources and the subordinates are free to chart their own courses of
actions and activities. The leader lets the subordinates to develop their
own techniques for accomplishing goals within the generalized
organizational policies and objectives.

17
 Hassan. A. As- Sadeq and Grace. C. Khourg (2006)36 conducted
an empirical study on “Leadership Styles in the Palestinian Large Scale
Industrial Enterprises” with the main objective of ascertaining and
describing the characteristics of Palestinion industrial leaders and their
leadership styles. The sample size of the study was 45 companies with
three respondents in each, besides the leader himself as a respondent to
the interview. It was found in this study that transformational leadership
is the most satisfactory style of leadership and it can be applied and
utilized successfully in Palestinian context.

In an empirical study on “Leadership Styles and Behaviour

Profiles of Managers” conducted by Titus Oshagbemi and Samual. A.
Ocholi (2006)37, with a sample of 409 managers working in U.K Key
British Enterprises to achieve an objective of meaningful grouping of
managers on the basis of the “Leadership styles and behaviour patterns”
which they exhibit in the performance of their jobs, they identified three
types of leaders, viz., Practical Leaders (Group 1), delegate leadership,
inspire the work force, individualise solutions to the workers’ problems.
Unity Leaders (Group 2), consult very often, much more than either of
two other groups. Uncaring Leaders (Group 3), do not practice any of
the leadership style and behaviour dimensions.
•>Q

Mann Buble and Ivana Pavic (2007) in a research study entitled

“Interdependence between Organisational Culture and Leadership
Styles: The Croatian case”, with a sample of 389 managers of 118
different Croatian Companies, identified that dominating leadership style
in Croatian Companies is much closer to the Consultative Style of
Leadership than to the Benevolent Authoritative.

18
Review of Indian Research Studies:

This part reveals the picture of Indian Research Studies relating to

the various dimensions of leadership.

Chowdhry (1953)39 conducted a study on “An analysis of the

Textile Workers and the effects of these attitudes on work efficiency”
with the objective of studying the difference in worker behaviour
associated with low and higher tension mills. The study came out with
interesting results regarding the nature of supervisory role. The low
tension mills had supervisors of understanding type who tended to take
work through persuasion and felt that workers understand the
supervisors’ message well and then addressed in a sweet tongue. The
supervisor of high tension mills used fear to motivate the workers and
often observed that he had to give suspension notices in order to warn
others to be careful.

In his article on “A comparison of two types of leadership” Shaw

(1955)40, argued that problems can be solved with greater speed and with
smaller number of errors under authoritarian leadership. The study
further revealed that independency and morale of the employees can be
improved through democratic style of leadership

Myers. C.A (I960)41 in his book on “Industrial Relations in India”

reported that after an interview with industrialists, government and
labour leaders and managers, in both Indian and foreign owned firms,
Indian top management are relatively authoritarian in their relationships
with lower management and labour.

Ganguli (1964)42 in his book on “Structure and Process of

Organisation” has stated that 46.9% of the managers, and 31% of the
workers of a factory preferred autocratic organizational climate while

19
only 12.30% of the managers preferred democratic climate. The existing
environment was perceived to be autocratic by 51% of the managers and
43.6% of the workers.

A field study carried out by Chatteijee and James (1965)43,

explored the relationship between effectiveness of supervision and the
supervisors’ behavioural orientation. Twelve supervisors from a private
metal process factory were studied. A total of 44 workmen from each of
the work groups under the respective supervisors were studied. The
results did not clearly favour any particular orientation on the part of
effective supervisors. The general finding was that the effective
supervisors had concern for production and paid equal orientation to the
welfare of workers. They put pressure, accepted suggestions of workers,
and promoted group cohesiveness in the work group.

Bhushan, (1968)44, conducted a research on “Leadership

Performance as related to Age, Education, Residence, and Sex” to
examine the effect of personal factors on the determination of leadership
choice. A sample of 100 was randomly drawn from different age groups,
sex, and educational status. A Likert type five-point Leadership
Preference Scale was developed to assess the individual’s preference for
authoritarian or democratic form of leadership. It was found that persons
of middle age and higher education, and those coming from the urban
areas had significantly greater preference for democratic style of
leadership. The sex of the respondents was not found to be important in
this regard.

Bayati (1969)45 in his article on “An investigation into the Leader

Behaviour Characteristics of Higher Secondary School Pupils”
investigated into the leader behavior characteristics of school pupils. He

20
found significant relationship of children’s age, parents’ income and
occupations to observed patterns of behaviours of the school pupils

Dhingra (1973)46 examined “Participative predisposition of

Managers in the Public Sector in India”. A personal value questionnaire
was administered to a randomly selected sample of 265 managers
working in the Public Sector Industry in India. It was found that 16.23%
of the managers studied had a clear participative predisposition. The rest
of them had either non - participative or mixed predisposition. The
incidence of non-participative predisposition was found to be higher
among the managers at the top level. Staff managers were more
participative as compared to Line managers.

Cascio, W.F. (1974)47, in his study on “Functional Specialization,

culture, and preference for Participative Management” took a sample of
627 managers from 21 countries and there were 37 managers from
Indian business organistions, with the purpose of studying the Indian
managers preference towards participative leadership style compared to
the managers of other countries and found that only 29.4% of the Indian
managers preferred participative style

Kakar (1974)48 in his book on “Personality and Authority in

work” has found that though both the assertive and nurturant superior
models exist in other areas of social relations in India, it is nurturant who
is held to be the most effective and under highly controlling superiors,
the organisational commitment of subordinates with high dependence is
positive.

Sinha and Chowdhary (1979)49 conducted a research on

“Perception of Subordinates as a Moderator of Leadership
Effectiveness” and studied 165 male executives in India with an

21
objective of testing the effectiveness of leadership style and concluded
that for less prepared subordinates, nurturant task leadership style is
expected to be used more often and with greater effectiveness, whereas
for better prepared subordinates, participative leadership style is
anticipated to be effectively used. An authoritarian leader is considered
to be ineffective. It was found that the nurturant task leader was rated to
be effective and somewhat satisfying to less prepared subordinates. The
participative leadership was unrelated to either subordinates’
preparedness or groups’ efficiency, but was positively associated with
subordinates’ satisfaction and his own effectiveness in conditions of less
prepared subordinates. On the other hand, the authoritarian leadership
was employed for less prepared subordinates but was found to be
detrimental to group’s efficiency and subordinate’s satisfaction.

Asha Hinger(1986)50, in her research work on “Leadership styles

and Job Satisfaction” covering a sample of 123 Engineers from various
divisions and 28 administrators drawn from administrative and accounts
division of Rajasthan State Electricity Board (RSEB), with an objective
to find out the various leadership styles prevalent among the engineers
and administrators of RSEB and their relationship with variables of
effectiveness and job satisfaction in operating functional areas, found
that some of the variables of effectiveness viz., effectiveness of
subordinates, efficiency of supervisor, effectiveness of superiors in terms
of his administrative and other abilities, efficiency of division and
efficiency of the organization are positively influenced by bureaucratic,
nurturant, participative and task orientation styles of leadership, where
as the authoritarian style of leadership is having negative impact on the
different variables of effectiveness.

22
 Bandana Nayak (1999)51 conducted an empirical study on
“Leadership Styles and Job Satisfaction among supervisors”, with the
objective of understanding the effect of influence and power to control
subordinates. The study was conducted at Rurkela Steel Plant, Rourkela,
with a sample of 80 supervisors and found that job satisfaction of the
workers is higher under relationship-oriented supervisors than task-
oriented supervisors.

A study conducted by Syed Vazith Hussain (2002)52 on

“Leadership Styles in Small Scale Industries: A case study of Kumool
District” covering a sample of 98 owner-managers of small scale
industries, with the main objective to identify various leadership styles
in small scale industries among the owner-managers, found that owner-
managers in small scale industries are adopting different styles
depending upon the situations, even though, they are free from adopting
any style.

Conclusion:

The review of past literature presented in the preceding pages

reveals that most of the studies are related to leadership and leadership
styles adopted by the leaders or managers of large and medium scale
industries. Hence, there are not many studies relating to the leadership
styles of owner-managers of SSIs. Even though SSIs plays an important
role in the growth and development of an economy and the leaders of
these units and their behaviors are the drivers of them, much research on
leadership styles of owner-managers of SSIs have not been done. Yet
some researches were done in western countries on the leadership styles
of owner-managers of SSIs. But such an attempt is very less in a country
like India. No attempt has been made to study the leadership styles of

23
SSIs in Dakshina Kannada District. Hence, the present study is
undertaken as a descriptive research to identify the leadership styles
adopted by the owner-managers of SSIs in Dakshina Kannada District.

Need for the present study:

Indian work organizations can be classified into three parts which

have some distinct features and consequently the different leadership
styles such as: a family-managed traditional organizations,
professionally-managed Indian organizations and foreign-owned
organizations and public sector organizations. In family-managed
traditional organizations, the most prevalent style is autocratic. The
organizations in the private sector owned by the Indian or by
multinationals have appreciable degree of participative or democratic
leadership. In the public sector organizations, bureaucratic style is more
prevalent owing to the work culture inherited by the public sector
managers. The various studies on leadership styles failed to give
generalized result. Since managerial styles are determined by a host of
factors such as forces in superiors, subordinates and situations, it is
unlikely to expect a uniform leadership style. Demographic
characteristics like age, experience, education and family background
also influence the style of leadership behavior.

Although several studies have shown that the survival and success
of firms depend to a large extent, on the effectiveness of their leadership,
most of the studies have focused on leadership styles of large
corporations. Very little research has been done on the leadership styles
adopted by small-scale industries, particularly in the developing
countries like India. Large and Small-Scale firms differ in respect of
resources and expertise. Since a small enterprise is not a mere

24
miniaturized form of a large firm, it needs unique and customized
leadership practices that suit its unique conditions, resource endowments
and environment.

The present study is designed to make an in-depth study of the

selected Small-Scale Industrial Units in Dakshina Kannada District. The
various facets of SSIs leadership and their implications are evaluated by
the researcher keeping in view the main and specific objectives. The
perceptions of the entrepreneurs of the sample units are weighed by
using statistical tools to draw conclusions. This empirical study is
expected to suggest suitable leadership styles for the SSIs.

Dakshina Kannada District is one of the most developed Districts

in Karnataka, blessed with natural resources. The district housed more
than 3,000 tiny, micro and small scale units whose production ranges
from automobiles to technical consultancy. Most of the SSIs in Dakshina
Kannada are family - managed traditional organizations. At present,
there is no research on leadership styles adopted by Owner - Managers
of SSIs in Dakshina Kannada District. Therefore, in view of this lacuna,
the present research study has been undertaken.

It can be further stressed that the findings of this research are not
only useful to the selected small scale business units but also to similar
enterprises, working elsewhere in the country. Since the entrepreneurs
hail from agriculture background and middle and upper middle classes,
this segment is very significant in the society and thus this study
conforms to the principle of social relevance too. Last but not least, this
inquiry, it is hoped, will draw the attention of other researchers to
undertake further studies on various leadership issues of SSIs.

25
Objectives of the study:

The main purpose of this study is to examine the existing

leadership styles and their working in the selected SSI units in Dakshina
Kannada District.

In order to achieve this main objective, the researcher has framed

the following specific objectives:

1. To identify the personality traits of the owner-managers of the

selected SSIs;

2. To explore the leadership skills of the sample units under

study;

3. To evaluate the perceptions of the owner-managers on their

existing leadership styles;

4. To study the perceptions of owner-managers’ on their

subordinates characteristics;

5. To ascertain whether there exists any relationship between the

perceptions of the owner-managers and their subordinates on
leadership styles;

6. To obtain the responses from the subordinates as followers on

their leaders’ style of leadership;

7. To suggest ways and means, if necessary, to make the existing

leadership styles more effective.

26
Hypotheses:

Against the background of the objectives cited above, the

following hypotheses were formulated by the researcher for the present
study:

Hi: There is a significant difference between various parameters of

participative style of leadership.

H2: There is a significant difference between various parameters of

relationship style of leadership.

H3: There is a significant difference between various parameters of

setting style of leadership.

H4t There is a significant difference between various parameters of task

style of leadership.

The above hypotheses have been statistically tested and the results
are depicted in Chapter IV (pp. 191 -197).

Nature and scope of the study:

The present study was confined to five taluks of Dakshina

Kannada District, Viz., Mangalore, Bantwala, Belthangady, Puttur,
Sullia and covered 146 industrial units. The study was conducted on
Automobiles, Chemical and Pharmaceutical, Electronics, Fisheries, Food
Agro Based, Forest Based, General Engineering, Glass Ceramics
Mineral Based, Jeweler, Medical Equipments, Plastic, Printing Paper,
Rubber, Miscellaneous industries. Small-Scale Industrial Units were
selected for an in-depth study on the basis of the magnitude of
investment in capital equipment and machinery confirming to the
definition of Small Scale Industrial Units as per the Micro, Small, and

27
Medium Enterprises Development (MSMED) Act, 2006. Since this
study is confined to Dakshina Kannada District, it is micro in nature.
Moreover, as the investigation is based on practical aspects, it can be an
empirical inquiry also. However, the whole study was executed in
Dakshina Kannada District and does not cover any other district from
outside for the field survey.

Research methodology:

The researcher has followed questionnaire method for conducting

this inquiry into “Leadership Styles in Selected Industrial Units in
Dakshina Kannada District”. Before the main study was conducted,
preliminary discussions were held with the entrepreneurs and also with
institutions connected with small industry development in Dakshina
Kannada District.

Two types of questionnaires were prepared by the researcher for

the study, first questionnaire was used for owner-managers of SSIs and
second questionnaire was used for the purpose of studying the
perceptions of the employees of SSIs about their leaders. The first
questionnaire contained multi-stage questions based on Likert’s 5-Point
Scale. It was designed by including various aspects concerning profile of
the SSIs, profile of the entrepreneur, personality profile, leadership
skills, leadership style, and subordinates characteristics.

The first questionnaire was divided into two parts. Part I covered
the profile of the respondents and Part II contained Five sections starting
from A to E (See Annexure I). The second part covered the information
relating to the entrepreneurs, their personality characteristics, type of
leadership skills, leadership style and their subordinates characteristics.

28
 The second questionnaire was divided into two parts. Part I
covered the profile of the employees/subordinates and Part II contained
the information relating to the perceptions of the employees towards
their leader/owner-manager.

The questionnaires were personally administered by the researcher

to each of the units and employees selected as sample. In all these cases,
the responses were obtained from the owner-managers who were
directly involved in the management of units and employees as
subordinates. The object of the study was to highlight the leadership
styles adopted by the Owner-Mangers of SSIs and also to obtain
perceptions of the subordinates on the styles of leadership of their
bosses.

Sources of data:

In view of multiple objectives, the data is collected from more

than one source. The study is based on both primary as well as
secondary data. The primary data was collected through questionnaires
which included various dimensions of SSIs. The secondary data is drawn
from the office of DIC, Dakshina Kannada District, Journals, published
and unpublished reports, dissertations and theses, etc., on the basis of
records maintained by the District Industries Centre (DIC). Dakshina
Kannada, the names and addresses were collected relating to the units
under study. Detailed discussions were also made with the entrepreneurs
to elicit accurate information on the topic of study.

Sample size:

The investigation was conducted during the years 2005-10. The

total number of SSI units in Dakshina Kannada District obtained from
the office of the Joint Director, District Industries Centre (DIC),
29
Mangalore was 146 out of which 50 units were selected as sample and
the sample size is 34 percent. The SSI units are broadly classified into
three types based on the type of ownership: Proprietary, Partnership and
Private. Judgmental Sampling Method has been used by the researcher
to select the SSI units under each type of SSIs. The sample units of 50
are chosen from the industries, viz., automobiles, chemicals, electronics,
fisheries, agro based, forest based, general electrical, glass ceramics,
rubber, plastic and miscellaneous. The sample units include all types of
Small-Scale industrial units as defined in Micro, Small, and Medium
Scale Industries Act 2006.

A list of the units selected based on the type ownership is given in

the following table.

Tablel.2: Sampling framework

Type of Ownership Total Units Sample Size

(No. of units)
Proprietary 96 33
Partnership 27 09
Private Ltd 23 08
Total 146 50
Source: List of small scale industries, DIC, Mangalore, as on
December, 2009.

Statistical analysis:

After the collection of data through questionnaires, a thorough

verification of the data was carried out. A master table was prepared to
consolidate the information so collected. Necessary tables were
constructed for further analysis. Statistical tools, such as, percentages,
arithmetic means and correlation were used to give a quantitative touch
30
and draw meaningful conclusions there from. Percentages were used to
analyse each question and thereby to give a comparative result there
from. Arithmetic mean has been calculated for the responses given by
the owner-managers to find out the quantum of leadership skills in
technical, conceptual, human skills. Likewise, the researcher has
computed mean scores of responses on various leadership styles to find
out the degree of the style of leadership exhibited by the leaders.
Similarly, mean scores of responses on employees characteristics has
been calculated to measure the efficiency level of the employees.
Correlation technique has been used to find out the degree of
relationship between ranks obtained on employers’ perception scores
and employees’ perception scores on leadership style.

In addition to the above statistical tools, a paired comparison test

has been used to test the hypotheses formulated by the researcher.

Limitations of the study:

In any academic research of this kind, there are bound to be

certain limitations. Since the private sector enterprises operate under a
cloak of secrecy, the information is not so easily divulged to the
researcher. The investigator has encountered the following limitations
during the study period.

1. The study has been restricted only to small-scale industries,.

The unregistered industries, micro and medium scale industries
are totally excluded from the purview of this study.

2. Time available for the study and collection of data is confined

to Dakshina Kannada District (Divided) only, though the SSIs,
are scattered all over the country.

31
 3. Information to the fullest extent could not be extracted from
some of the entrepreneurs as these industry respondents were
busy with their activities.

4. The present study is concerned only with small scale units. The
setting and management of large and medium scale units are
quite different from those of small scale units. Therefore, a
comparison is not possible.

5. The most disappointing feature was the lack of interest on the

part of entrepreneur respondents themselves who seem to think
that such surveys do not bring them any good. This attitude has
acted as a road block to the flow of data for research.

Despite the limitations cited above, the research work has kept the
quality as nerve centre.

Layout of the thesis:

Keeping in view the main and specific objectives and their

fulfillment, the researcher divided the entire study into Five chapters. A
chronological list with sub-titles of these along with a brief summery is
given below:

Chapter I is an Introductory Chapter, which deals with Birds eye-view

on leadership, importance of leadership, leadership styles, the overview
of previous studies, need, nature and scope, objectives, hypotheses
methodology and limitations of the study. At the end references are
given.

Chapter II presents a Conceptual Framework of the study. It depicts the

various dimensions of leadership, leadership theories, and also the
dimensions of Small Scale industry.

32
Chapter III sketches the general profile of Dakshina Kannada District
and the units selected for the study.

Chapter IV Analyses and evaluates field data generated through

research tools to arrive at meaningful conclusions.

Chapter V arrives at Major Findings, Suggestions, and Conclusion.

33
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38