The Economics of Happiness - The first of the series by Jolito Ortizo Padilla

"Solidarity and Economics"- Bahrain's Road To Progress and Happiness

One branch of this new type of economics is called the Economics of Happiness or Happiness Economics.One of the most often quoted comments about economics is that it is a dismal science. This came from Thomas Carlyle writing in 1849; " Not a gay science ", I should say ,like some we have heard of, no a dreary, desolate and, indeed, quite abject and distressing one; what we might call, by way of eminence, the dismal science." Thomas Carlyle was a famous writer and social commentator of the time. He was contrasting some of the negative predictions of economics of his age with a "gay science" which at the time referred to "life enhancing knowledge".

Jeremy Bentham was a philosopher who put forward the theory of utilitarianism.This stated that human being should act in a way that would cause "the greatest happiness of the greatest number". This was a philosophy which should guide the individual : should I spend $500 on a holiday for myself or should I use it to pay for the tuition fees of my child at university? It was also a philosophy which could guide government policy: should the government increase taxes on high income on high income earners to pay extra spending on health care stay the same?

An assumption of utilitarianism is that happiness can be measured in the same way that the weight of a loaf of bread can be measured. If happiness cannot be measured, then individuals, governments and other decision makers cannot make the calculations necessary to ensure "the greatest happiness of the greatest number". The whole theory then becomes useless as a basis for decision making. Following Bentham's death,the consensus view in neo-classical economics came to be that happiness could not be measured. Economics could say nothing about the happiness or value that one individual puts on consuming a good or taking a job compared to another individual.

Another criticism of utilitarianism was that happiness is not the only the only goal in life. There are many other goals that human beings might have. They might prefer to be rich and famous rather than happy. Their goal might be to uphold the honor of the family. Status, power, possessions, control and sex are other possibilities.People's goal differ from culture to culture and it is is arguably too simplistic to reduce everything to happiness.

The economics of happiness refutes these problems and argues that happiness can indeed be measured and that happiness should be seen as the most important goal of individuals whatever their culture.

• Surveys can validly be used to ask people about the extent to which they are happy. With a survey large enough to be statistically valid , survey results produce reliable evidence about states of happiness and satisfaction. Such survey methods have been used in psychology for decades.They are backed up by neuroscience. During the 1990's,it was discovered that happiness was associated with measurable electrical activity in the brain. This could be picked up by MRI scans. So it is possible to tell physiologically whether or not someone is telling the truth when they say they are happy.
• Looking across cultures, philosophies and religions, and using evidence form sociological and psychological studies, it is clear that happiness is a goal of human beings. It is true that happiness might be given different names such as well-being, satisfaction, fulfilment or utility. But for the economics of happiness , these different names are all pointing to the same goal. Happiness can then be argued to be the same important goal. If asked,"why do I want to be wealthy or powerful?", most people would say "because it leads to happiness".Wealth, power or status are not ends in themselves. They are stepping stones to happiness.Think too of the reverse questions: "Is the goal of life to unhappy?" Or "Does it matter that people are unhappy?"Few people would argue that they wanted to be unhappy and that it didn't matter whether their relatives and friends and other people were happy or not.

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Boredom in Business by Jolito Ortizo Padilla

There was a debate on boredom in business! That launched GA Consultancy on our shared interest that the best businesses to succeed would be those whose core characteristics were creativity, social responsibility, energetically ethical, supreme in service, with a robust reputation for respect for all their staff, suppliers and stakeholders.They would never be boring, but rather daring to be different and exceeding expectations.

Padilla mentioned that the best would have "mentoring programmes" . In these newcomers are paired with more experienced people, to obtain best practice and advice as they advance. Mentoring inspires individual to improve their learning so that they meet, even exceed,their potential, performance, philosophy and personality. Many of the world's most successful people have benefited from having a mentor. Today, mentors provides their expertise to less experienced individuals to help them advance their careers, enhance their education, and build their networks. Whenever I have met those in charge of creditable companies,leaders in organisations who are revered and respected and respected , they have all had a mentor. I mention this because their businesses also have a superior competence and consistency.

They exude excellence -creating the culture- being right first time, on time, every time, exceeding customers' expectations.They believe instinctively there is always a good cause for treating all customers as number one. This is especially so when, all too often, new technology gives ways of avoiding the cost/benefit pressures to deal with only the most "important" customers. Top organisations realise that every customer is potentially their most important customer.

As an example, take the world renowned charity Oxfam.Oxfam works towards putting an end to poverty worldwide and believes poverty is not inevitable, it is inevitable, it is an injustice that can be tackled.Some years ago Oxfam received a legacy "out of the blue". They had never heard of the person who gave it. They checked with her family why she had given to them.They found that some time before , the woman had been shopping in an Oxam shop. She had a nasty turn on the stairs and the volunteers looked after her, made her tea, and wouldn't let her go until they were sure she was OK. Called her a taxi .. and then thought no more... it was just looking after their customers.One cup of tea... a six figure gift. You never know who you're being nice to!

Excellent organisations do this indistinctly. They mentor,manage  and motivate daily , in a manner essential to a charismatic culture in a competitive environment. This is especially so when their brand /product/service is under threat, or its reputation requires restoring. Thinking from the customer's perspective saves corporate money. Always viewing service from the outside in, improves the bottom line. Successful organisations all have innovative and inspiring climates. Their corporate culture-characteristic consistency of process, personality and performance-impacts the bottom line. Think of the companies you do repeat business with; they believe success need not be incompatible with a genuine improvement in the quality of life for all stakeholders.

Recently I asked  random sample form all walks of life which was their top UK retailer, and why? 90% said John Lewis, and also their flagship , Waitrose. John Lewis employees are Partners,or co-owners of the business. As such they are ambitious in their policies, the way they work and do business. As a Partnership the firm recognises that the management of social, ethical and environmental issues involves everyone. They believe that their long term future id best served by respecting the interests of all stakeholders: staff, suppliers, customers and the wider community. They are actively looking for opportunities to improve the environment and to contribute to the well being of the communities in which they trade.

John Lewis has seven business principles: purpose, power,profit, members, customers, business and relationships. These align perfectly with current thinking on corporate social responsibility (CSR). The board set out their responsibilities in terms of community investment protection , responsible sourcing, fair trading, workplace dignity, diversity and equality.

Building a corporate culture based on these principles ensures CSR issues are embedded in the way they run the business.They believe this culture ensures " we deal with our customers , suppliers and all stakeholders with integrity and respect; this is at the heart of out commercial success".

Today, this business brand has a CSR reputation covering all areas from animal testing to additives , carrier bags to climate change, product to packaging perfection , recycling to responsible resourcing. This is their brand and behavior. As such, they are trusted by consumers and customers- internal and external -recognised today as leaders in CSR, valuing the trust their customers have placed in them over the years especially as a result of taking a stand on issues that matter. As a responsible retailer, they believe it is important to communicate clearly what these issues are, how they impact their business and the position they take. They use every medium to do this with customers, communities, employees, environmentalists, suppliers and stakeholders.You seldom get a second chance to impress -with this operation there is no need to-their reputation precedes them.

Take another organisation with a product some may disagree with. However,their philantrophy and wide ethical expenditure ensures that they are admired; customers prefer to do business with them rather than alternatives. Ladbrokes plc. is a world-leader in the betting and gaming market. They take up to 10 million bets each week and over $14billion in stakes each year across Europe and Asia.They have a robust "Responsible Business" behavior,from the boardroom to their betting shops which, according to their CEO , " is not only central to our license to operate; it also fully supports our strategy for growth."

Professional and punters know the Ladbrokes brand is internationally synonymous with integrity and fair play, upholding best practice industry standards. This provides added assurance for their customers and employees. The company believes in social investment and encourages employees to become active members of their local communities. Today the Ladbrokes brand betting shops is at the heart of the communities where they operate; there are daily stories about their shops which are committed to supporting local people. They encourage healthier and safer places to live and work , as well as fund raise for community causes.

Profit is too often proffered as the only measure by which businesses judge their success. Too often the pursuit of wealth -some would say, given 2012 events, global greed - has been deemed the dominant motivation of management. Some senior executives are seen to be constantly in pursuit of wealth at the expense of consumers and communities.As shown in the examples above, the creation of wealth is not the only valid business objective, albeit a vital and valuable one. Old beliefs are being challenged-2013 onwards will see societies , and conditions governing them, changing rapidly. In business there can be profit in building goodwill -enlightened enterprises and entrepreneurs know this: it is common sense. Sadly enough, common sense is not so common.

A final example,: global telecoms is a competitive market place, I call this the "stupid bills" story, which shows that approaching issues from the customer's perspective affects the bottom-line and can save money. Over recent years the telecoms market has opened up with some companies losing many customers. A particular telecoms giant chases them , even for $1! However many customers are in credit, I know people who have continued to receive this organization's multi page credit statements , for as little as 25 cents, for years -hardly a way of persuading people to come back.

This way of doing business suggests a wasteful company which never thinks of the customer. Just think: one person assigned to cleaning up this mess would save costs and gain brownie points. Try being creative, innovative; what if those customers got ONE letter saying " You're in credit but you've left us. We're going to give your 25 cents to Charity , unless you send us the enclosed saying you want it back". Ninety five percent would not respond and the company would gain goodwill , and save money as well as planet's paper! How many more cases like this are there? Think like a customer, behave with benevolence from the boardroom-then you can succeed in business and still get to heaven.

 

The Management Gurus by Jolito Ortizo Padilla

The most unlikely people can become management gurus,such as academics ,are already in position.Others, because of their job,say as head of a big business,are respected for their achievements,for what they preach in public about managing, or what they may written in articles or books. Our selection of gurus includes all categories,but more important is,what can we learn from them? Alfred Sloan was probably the founding father of modern industrial management systems. He became a very rich person; sufficiently so to endow a school of management named after him at M.I.T. Philip Kotler my mentor in marketing is again an originator; he didn't invent marketing , but he has codified it into a serious discipline which we can study and profit from it. Michael Porter is a kind of management deity , making pronouncements, often dense and difficult to understand , but acute and relevant. W. Edward Deming was an unassuming census clerk with a fascination for statistics. He transformed the industry of an entire country with his ideas on quality, so that Japan became a pre-eminent industrial power. Gary Hamel stirs up controversy, and thus makes people think. Finally Laurence Peter (and colleague Raymond Hull) wrote a book which took a sly at management , and came up with an uncomfortable truth. Although not really fitting into any of our guru categories. Peter has made us look at the way our organization (or is not) working. That is a great guru.

ALFRED SLOAN
The business of business is business

Alfred Sloan was the most original CEO and organizational thinker of the 20th century. He was also clever enough to set his record down in a book that has become a management classic: My Years with General Motors. Sloan became President of GM; it was there that his reputation was made. He recognised the company in a way that became a template for virtually every corporate entity for the rest of the century. He divided the company into separate autonomous divisions that were subject only to financial and policy controls from a small central staff.

The result of this "federal decentralization" were enduring and dramatic. Sloan also introduced systematic strategic planning procedures for the company divisions, the first CEO over to do such a thin. He was President of the company from 1923 to 1956, over 30 years with his hand effectively on the helm of one of the largest companies in the world. However he was known as "Silent Sloan" to the company's worker because he preferred to run the business from behind the scenes. His management style is well illustrated by his famous summing up the end of GM Senior executive meeting: "Gentlemen, I take it we are in complete agreement on the decision here", he stated , and everyone nodded their heads in agreement. "Then ," he went on, "I propose we postpone further discussion of this matter until the next meeting to give ourselves time to develop disagreement, and perhaps gain some understanding of what the decision is all about."

PHILIP KOTLER
Marketing is an art of finding clever ways to dispose of what you make. Marketing is the art of creating genuine customer value. It is the art of helping your customers become better off.

His book , Marketing Management, is a classic textbook;it applies rigorous analysis and mathematical methodology to the practiced of marketing. Its influence has been monumental.Kotler was primarily responsible for lifting marketing out of disrepute in which it had once been held. He changed it from being part of sales to being a recognized strategic function in its own right. Kotler sees marketing as being about the exchange of values between two parties; a social activity , not just a business one. He coined the term " social marketing ", defined as " the systematic application of marketing to achieve specific behavioral goals for a social good".

Kotler sees marketing as something that evolves over time; at first focused on transactional marketing , but now with much more attention to relationship marketing. This is the idea of customer loyalty as the means to build a whole series of sales out of a single transaction.

MICHAEL PORTER
The Essence of Strategy is choosing what not to do.

Michael Porter has been criticised for his willingness to boil his thoughts down into a series of bullet points, each of them with a plodding unmemorable title. Nevertheless, Porter effectively redefined the way that businessmen think about competition. This was largely by introducing the language and concepts of economics into corporate strategy. He began by simplifying the notion of competitive advantage and then created a new framework for companies to think about how to achieve it. This has led him to another field of interest; clustering the extent to which industries of old and new stay geographically close to each other.Porter maintains that businesses do well economically because of this clustering of specialized skills and industries. This , through dynamic competition between them, produces superior products and processes.

Recently, Porter has started to write about corporate social responsibility , applying his thinking about competition to social issues.

W. EDWARDS DEMING
I think I was the only man in Japan in 1950 who believed my prediction -that within five years , manufacturers the world over would be screaming for protection (from Japanese imports).It took four years.

After the Second World War , Deming went to Japan to advise on a census that was taking place there. He stayed on to advise Japanese businessmen how to inject quality into manufacturing industry. At the time, Japan was notorious for the poor quality goods that it produced. By the late 1970s Japan was producing quality stuff.

Behind the Japanese quality miracle was W. Edwards Deming who had begun to teach middle managers about quality. Deming's approach involved demonstrating that all business processes are vulnerable to a loss of quality through statistical variation. Management, he argued , was responsible for 85 percent of that variation . Reduce the variation; increase the quality , was the foundation of his advice.

Deming's method for bringing this about was built on what became known as quality circle. These circles consisted of groups of workers who sought to improve the processes that they were responsible for, in four stages. First, the planning of how to do it, then the implementation of that plan. Then, workers would check variances from anticipated outcomes and take any corrective action that was necessary.

Over a number of years he came to distill his advice for managers into "14 points", which ranged from quality related items such as "cease dependence on mass inspection. Build quality into the product from the start", to more human issues such as remove barriers to pride workmanship".

GARY HAMEL
Strategy didn't start with Igor Ansoff neither did it star with Machiavelli. It did not even start with Sun Tzu. Strategy is as old as human conflict.

Gary Hamel brought a new focus to the subject of corporate strategy, building his reputation with the idea of core competencies. "Core competencies are the collective learning in the organization, especially how to coordinate diverse production skills and integrate multiple streams of technologies", they are the things that an organization does exceptionally well.

Hamel took corporate strategy away from the precision of traditional planning. Strategic innovation, he said , will be the main source of competitive advantage in the future. Traditional strategic planning , he argued , is not strategic ; rather it is a calendar driven ritual about plans and planning. Great strategies come from challenging the status -quo.In his recent book he argues: "Like the combustion engine , it's a technology that has largely stopped evolving and that's not good."  What then does the future management hold? Hamel doesn't say "My goal in writing this book was not to predict the future of management , but help invent it, he wrote. Useful things to bear in mind , he suggested , are the need for companies to have purpose  to seek out ideas from the fringes, and to embrace the democratising power of the Internet.

LAURENCE PETER
In a hierarchy, every employee tends to rise to his level of incompetence.

Not many management gurus have their name adopted for a principle, especially when they are not really a guru at all . The Peter Principle first appeared on the cover of the book of the same name;it has since become part of the English Language.

The book was an instant hit. Peter's corollary stated:"In time , every post tends to be occupied by an employee who is incompetent to carry out its duties". One reviewer wrote at the time. "There is a chilling touch of truth behind the whole thing." Industrial organizations realized that it applied to many of them. Most hierarchies know the outstanding finance director who is promoted to be an outstandingly disastrous CEO. Taken to extremes , the Peter Principle is a deeply depressing idea. It means that all employees who are not already hopeless at their job are merely in transit to a desk where they will be. Peter's solution to this "philosophy of despair" was to recommend "creative incompetence" . Anyone can avoid disastrous promotion by creating " the impression that you have already reached your level of incompetence. Creative incompetence will achieve the best results if you choose an area of incompetence which does not directly hinder you in carrying out the main duties of your present position."While looking round your office , you may find yourself wondering who is practicing creative incompetence.

Leadership Development by Jolito Ortizo Padilla

Education and training in management needs to emphasise not only interpersonal skills but also a flexibility of approach, diagnostic ability and the realisation that the most effective form of leadership behavior is a product of the total leadership situation.

According to Investors in People,leadership development is not just a corporate issue: "The ability to create and communicate a clear vision ,and motivate people to deliver it, is as important to the small entrepreneur as to the leader of 1000 people. All organizations should be identifying the managers they will need in a few years' time and developing them. All top managers should be planning their succession and supporting the people who will step into their shoes when it's time to move on.

Extensive research undertaken by the GA Consultancy reveals that consistently poor ratings accorded to public sector leaders is a key cause for concern during a period of major reform.The survey of 1900 public sector managers, mostly at middle and junior level, reveals that only 33 percent of managers rate the leadership demonstrated by their most senior management team as high quality. Although a wide and varied range of training activities is taking place, the majority of managers perceive a low priority placed on leadership development. Only a quarter of respondents claimed their organizational budget for developing leaders is adequate and organizations are still tending to rely on traditional and formalized methods of developing leaders.

Referring to action centered leadership model, Padilla  identifies seven key principles of leadership development that can be applied successfully in different kinds of organizations in both public and private sectors:

• Development of strategy for leadership for each of the three level of leadership -operational, strategic and team.
• Selection of those with high potential for becoming effective leaders.
• Training for leadership that implies instruction with specific end in view. Identify your business training needs in the leadership context and assign priorities.
• Career development through giving person the right job at the right time. People grow as leaders through the actual practice of leading.
• Line managers as leadership developers by developing the individuals potential and sharing their knowledge of leadership.
• Corporate culture that is valued at all levels and should encourage a climate of self development in leadership.
• The chief who should be  leading from the front and who owns the problem of growing leaders.

The seven principles are complementary and are likely to have a synergistic effect if applied as a whole. Although a simple framework, Padilla maintains the seven the principles from the first coherent and effective approach for growing leaders.

GA Consultancy report found that around a third of employees surveyed had never worked for, or been motivated by an exceptional leader.

The leadership jigsaw has six interlinking pieces: vision , example , relationship, motivation, empowerment and communications as a guide to the measurement and development of leadership skills.

Vision -Do you:

• Work hard at communicating your vision for the organization to all staff at  all  levels?
• Understand that your vision must appeal to your staff at both an emotional and practical level if they are to join you on your journey?
• Understand the culture and value of your organization and their impact on its future development?
• Recognized blind alleys?

Motivation-Do you:

• Understand that every member has a different set of motivational stimuli?
• Explain your decisions in terms of their benefit to the organization and its members?
• Celebrate and reward individual and team achievements?
• Prefer offer carrot, rather than weird sticks?

Example- Do you:

• Match your words with your actions?
• Take full responsibility for organizational problems even if you were not directly responsible?
• Occasionally muck in when your staff are under pressure at work?
• Regularly consider what you see in the bathroom mirror?

Empowerment- Do you:

• Believe that people generally respond well when given greater responsibility for their own performance?
• Allocate sufficient resources to training and development?
• Get a buzz when staff set and achieve their own goal?
• Realize that the organization would still function if you were not there?

Relationship-Do you:

• Work hard at countering a them and u s' culture within your organization?
• Set clear codes of acceptable conduct and take action against breaches of them?
• Stress that everyone contributes to the success of the team(s) they belong to?
• Admit when you make a mistake?

Communications- Do you:

• Use your influence to encourage two-way communications at all levels in your organization?
• Encourage personal contact rather than written, mechanical or technological alternatives?
• Encourage diversity of opinion and constructive criticism?
• Walk the talk!

Guidelines for Effective Strategic Management by Jolito Ortizo Padilla

Failing to follow certain guidelines in conducting strategic management can foster criticisms of the process and create problems for the organization. Issues such as as "Is strategic management in our firm a people process or a a paper process?' should he addressed.

An important guideline for effective strategic management is open-mindedness. A willingness and eagerness to consider new information, new viewpoints, new ideas, and new possibilities is essential; all organizational members must be share a spirit of inquiry and learning. Strategists such as chief executive officers, presidents, owners of small businesses,and heads of government agencies must commit themselves to listen to and understand managers' satisfaction. In addition, managers and employees throughout the firm should be able to describe the strategists' positions to the satisfaction of the strategists. This degree of discipline will promote understanding and learning.

No organization has unlimited resources. No firm can take on an unlimited amount of debt of issue an unlimited amount of stock to raise capital. Therefore, no organization can pursue all the the strategies that potentially could benefit the firm. Strategies decision thus always have to be made to eliminate some courses of action and to allocate organizational resources among others. Most organizations can afford to pursue only a few corporate level strategies at any given time. It is critical mistake for managers to pursue too many strategies at the same time, thereby spreading the firms resources so thin that all strategies are jeopardized.

Strategic decisions require trade-off such as long range versus short range considerations or maximizing profits versus increasing shareholders' wealth. There are ethics issues too. Strategy trade-offs require subjective judgments and preferences. In many cases, a lack of objectivity in formulating strategy results in a loss of competitive posture and profitability. Most organizations today recognize that strategic management concepts and techniques can enhance the effectiveness of decisions.Subjective factors such as attitudes toward risk, concern for social organizations need to be objective as possible in considering qualitative factors.

Jolito Ortizo Padilla on his book Strategic Management - Proper Perspectives-2nd Edition summarizes the important guidelines for the strategic planning to be effective;

1. It should be people process more than a paper process.
2. It should be a learning process for all managers and employees.
3. It should be words supported by numbers rather than number supported by words.
4. It should be simple and non routine.
5. It should vary assignments, team memberships, meeting formats, and even the planning calendar.
6. It should challenge the assumptions underlying the currently corporate strategy.
7. It should welcome bad news.
8. It should welcome open-mindedness and a spirit of inquiry and learning.
9. It should not be a bureaucratic mechanism.
10. It should not become ritualistic, stilted, or orchestrated.
11. It should not be too formal, predictable , or rigid.
12. It should not contain jargon or arcane planning language.
13. It should not be formal system for control.
14. It should not disregard qualitative information.
15. It should be controlled by "technicians".
16. Do not pursue too many strategy at once.
17. Continually strengthen the "good ethics is good business" policy.

Even the most technically perfect strategic plan will serve little purpose if it is not implemented. Many organizations tend to spend an inordinate amount of time, money, and effort on developing the strategic plan, treating the means and circumstances under which it will be implemented as afterthoughts. Change comes through the implementation and evaluation, not through the plan. A technically imperfect plan that is implemented well will achieve more than the perfect plan that never gets off the paper on which it is type.

Strategic management must not become a self perpetuating bureaucratic mechanism. Rather, it must be a self-reflective learning process that familiarizes managers and employees in the organization with key strategic issues and feasible alternatives for resolving those issues. Strategic management must not become ritualistic, stilted , orchestrated , of too formal, predictable, and rigid. Words supported by numbers, rather than numbers supported by words , should represent the medium for explaining strategic issues and organizational responses. A key role of strategists is to facilitate continuous organizational learning and change.

The Leadership Relationship by Jolito Ortizo Padilla

Whatever the perceived approach to leadership, the most important point is the nature of the leadership and the manner in which the leader influences the behavior and actions of other people.

Leadership is a dynamic form of behavior and there are a number of variables that affect the leadership relationship. Four major variables are identified by McGregor as:

• the characteristics of the leader
• the attitude, needs and other personal characteristics of the followers
• the nature of the organization, such as its purpose, its structure, the tasks to be performed;and
• the social, economic and political environment

McGregor concludes that "leadership is not a property of the individual, but a complex relationship among these variables".

According to Kouzes and Postner, credibility is the foundation of leadership. From extensive research in over 30 countries and response to the question of what people " look for and admire in a leader, in a person whose direction they would willingly follow", people have consistently replied that they want;

" leaders who exemplify four qualities: they want them to be honest , forward -looking, inspiring and competent. In our research our respondents strongly agree that they want leaders with integrity and trustworthiness, with vision and a sense of direction , with enthusiasm and passion, and with expertise and a track record for getting things done".

Fullen refers to the importance of relationship building as a basic component of the change process and effective leadership: "Leaders must consummate relationship builders with diverse people and group-especially with people different from themselves.Effective leaders constantly foster purposeful interaction and problem solving, and are wary of easy consensus".

Within an organization, leadership influence will be dependent upon their type of power that the leader can exercise over the followers. The exercise of power is a social process which helps to explain how different people can influence the behavior/actions of others. Five main sources of power upon which the influence of the leaders is based have been identified by French and Raven as reward power, coercive, legitimate power and expert power. We shall consider these in terms of the manger and subordinate relationship.

• Reward Power is based on the subordinates perception that the leader has the ability and resources to obtain rewards for those who comply with directives, for example, pay promotion , praise, recognition , increased responsibilities , allocation and arrangement of work, granting of privilege.
• Coercive power is based on fear and the subordinates perception that the leader has the ability to punish or to bring about undesirable duties or outcomes for those who do not comply with directives; for example, withholding pay rises, promotion or privileges; allocation of undesirable duties and responsibilities; withdrawal of friendship or support; formal reprimand or possibly dismissal. This is in effect the opposite of reward power.
• Legitimate power is based on the subordinates perception that the leader has the right to exercise influence because of the leader's role or position in the organization. Legitimate power is based on authority , for example that of the managers and supervisors within the hierarchical structure of an organization. Legitimate power is therefore power because it is based on the role of the leader organization and not in the nature of the personal relationships with others.
• Referent power is based on subordinates identification with the leader. The leader exercises influence because of the perceived attractiveness, personal characteristics, reputation or what is called "charisma" . For example , a particular manager may not be in a position to reward or punish certain subordinates because the manager commands their respect or esteem.
• Expert power is based on the subordinates perception of the leader as someone who is competent and who has some special knowledge or expertise in a given area. Expert power is based on credibility and clear evidence of knowledge or expertise; for example, the expert knowledge of "functional" specialists such as the personnel manager, management accountant or systems analyst. The expert power is usually limited to narrow , well defined areas or specialisms.

Finlay suggests that in addition to the five sources of power identified by French and Raven can be added:

• personal power, supported and trusted by their colleagues and subordinates; and
• connection power,which results from personal and professional access to key people and information.

It is important to note that these sources of power are based on the subordinates perception of the influence of the leader, whether it is real or not. For example,if a leader has the ability to control rewards and punishments but subordinates do not believe this, then in effect the leader has no reward or coercive power. Similarly, if subordinates in a line department believe a manager, in a different staff department has executive authority over them then even if, de facto , that manager has no such authority there is still a perceived legitimate power.

French and Raven point out that the five sources of power are interrelated and the use of one type of power, for example, coercive may affect the ability to use another type of power for example. referent.Furthermore ,the same person may exercise different types of power, in particular circumstances and at different times.

" You have to look at leadership through the eyes of the followers and you have to live the message.What I have learned is that people become motivated when you guide them to the source of their own power and when you make out of employees who personify what you want to see in the organization".

                                                         Jolito Ortizo Padilla

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Organization and Judgement by Jolito Ortizo Padilla

The way in which we organize and make judgements about what we have perceived is to a large extent based on our previous experience and learning. It is also important at this point to be aware of the inferences and assumptions we make which go beyond the information given. We may not always be aware of our pre-set assumption but they will guide the way in which we interpret the behavior of others. There has been much research into the impact of implicit personality theory. In the same way that we make assumptions about the world of objects and go beyond the information provided, we also make critical inferences about people's characteristics and possible likely behaviors.

A manager might well know more the "type of person" A- a member of staff who has become or was already a good friend, who is seen in a variety of social situations and with whom there is a close relationship - than about B-another member of staff , in the same section as A and undertaking similar duties, but with whom there is only a formal work relationship and a limited social acquaintance. These differences in relationship, information and interaction might well influence the manager's perception if asked, fro example, to evaluate the work performance of A and B.

Judgement of other people can also be influenced by perceptions of such stimuli as:

• role or status
• occupation
• physical factors and appearance: and
• non-verbal communication and body language

In a discussion on managing people and management style, Padilla raises a question of how managers make judgements on those they are responsible including positive and negative messages.

   In my personal research people have admitted , under pressure that certain physical characteristics tend to convey a positive or negative message. For example, some people find red hair, earrings for men, certain scents and odors, someone too tall or too short; a disability; a member of a particular ethnic group and countless other items as negative .... Similarly there will be positive factors such as appropriate or dress for the occasion.... which may influence in a positive way.

A person may tend to organise perception of another person in terms of the whole mental picture of that person. Perceptual judgement is influenced by reference to related characteristics associated with the person and the attempt to place that person in a complete environment. In one example, an unknown visitor was introduced by the course director to 110 Singaporean students, divided into five equal groups. The visitor was described differently to each group as:

1. Ms. Alicando, a student from Harvard;
2. Ms. Alicando, demonstrator in psychology from Harvard;
3. Ms. Alicando, lecturer in psychology from Harvard;
4. Dr. Alicando, senior lecturer from Harvard;
5. Professor Alicando from Harvard.

Several popular surveys and newspaper articles appear to support the suggestion that tall men are more likely to be successful professionally and earn higher salaries than short men

Non-verbal communications and body language includes inferences drawn from posture, gestures, touch, invasions of personal space, extent of eye contact , tone, voice or facial expression. People are the only animals that speak, laugh and weep. Actions are more cogent than speech and human rely heavily on body language to convey their true feeling and meanings. It is interesting to note how emotions are woven creatively into email messages. Using keyboard signs in new combinations has led to a new e-language- to signal pleasure:), or unhappiness :-c, or send a rose @>---> encapsulate feelings as well as words. The growth of this practice has led to an upsurge of web replete with examples.

According to Mehrabian, in our face to face communication with other people the messages about our feelings and attitudes come only 7 percent from the words we use, 38 percent from our voice and 55 percent from body language, including facial expressions, Significantly, when body language such as gestures and tone of voice conflicts with the words, greater emphasis is likely to be placed on the non-verbal messages.

Padilla suggests that in the a sense, we are all experts on body language already and this part of the survival instinct:

Even in a "safe" environment like an office or meeting room you will feel a pull on your gaze each time someone new enters the room. And whether you want to or not, you will start to from opinions about a person in as little as three seconds. You can try to be fair and objective in your evaluation, but you will have little choice. This is an area where the subconscious mind bullies the conscious into submission. Like dislike, trust, love or lust can all be promoted in as long as it takes to clear your throat. In fact most of these responses will be based on your perception of how the person looks.

In our perceptions and judgment of others it is important therefore to watch and take careful note of their non-verbal communication. However, although body language may be a guide to personally, errors can easily arise if too much is inferred from a single message rather than related cluster of actions.According to Fletcher ,"You won't learn to interpret people's body language accurately , and use your own to maximum effect, without working at it. If you consciously spend half an hour a day analysing people's subconscious movements , you'll soon learn how to do it-almost unconsciously. However, as Mann points out, with a little knowledge about the subject is all too easy to become body conscious. Posture and gesture can unmask deceivers, but it would be dangerous to assume that everyone who avoids eye contact or rubs their nose is a fibber. Nevertheless an understanding of non-verbal communication is essential for managers and other professions where good communications skills are essential.