An insight into the Path Goal Theory for leading your workforce

In the past ten years or so, we have seen an abundance of new management theories/models being introduced. However, there’s no management theory that’s worth calling a perfect one, also it is practically impossible for all managers to try and apply each of them. Does that mean, a manager should pay no attention to these theories? Well, the answer is in negative, for most of these models are laid down by successful managers or erudite scholars. Therefore, you must go through all of them once in a while, for the sake of learning one thing or two, even if you are not looking to adapt.

One of these management theories is referred to as the “Path-Goal theory of leadership” that has been jotted down by Robert House. In simple words, the theory describes the role of managers in setting goals and then laying down a roadmap to reach there, more importantly it discusses four different types of approaches that a manager could use according to different circumstances. The theory is a good reminder of the fact that management is much more than hiring and firing employees, or maintaining discipline in the office. The job doesn’t end on stating the desired results and pointing towards the resources; it actually starts from that point and remains a manager's duty to support, motivate and guide his/her workers all the way through. 

Following are the four different styles of management (or leadership, for that matter) described in the theory. Remember, you don’t need to choose and then stick with only one of them; an efficient manager should be able to adapt any of the following styles, according to specific situations or workforce.

Supportive approach:

A manager is ought to be supportive to his/her subordinates, right? Still, managers like to carry that “bossy aura” around them, most of the times. As a result, subordinates feel reluctant to speak to their managers. Now, managers are supposed to be the most experienced and well-versed person in the workforce, how efficient do you think will be the workforce, where the most qualified person is reduced to sit in his/her office and look into various reports once in a while?

Directive Approach:

This is the standard approach now days; managers set the targets, assign tasks and resources and provide the subordinates with guidelines. This approach is not bad, given that the workers are qualified and experienced enough.

Achievement Oriented Approach:

This approach is recommended in challenging projects (for example when you need to motivate your sales staff to introduce a new product in the market). At such instances, you need to raise the bar, and then push them to rise above by offering sufficient rewards and appraisals.

Participative Approach:

In this style of management, the manager encourages the participation of each and every member in the team, especially when implementing a change or making some important decision regarding business.

Alternative trading systems and organization

Fair trade is a relatively old phenomenon that presents an alternate trading system, which facilitates small scale producers and workers (mainly from undeveloped countries), so that they can sell their products in the developed markets without being duped by the middleman or the capitalist who pay these workers the smallest amount but sells the product to consumers at a hefty price. At the end of the day, it is the middlemen or industrialist, who takes home the larger profits while the real worker is left with little or no opportunities to grow, which is quite unfair. For that reason a fair trading system has been introduced that tends to be directed more by socialist viewpoint than the capitalist.

Alternative Trade Organizations:

Fair trade (also known as alternative trade) calls for market access for low level producers, so that they’ll be able to sell their products at reasonable price. This is what these alternative trade organizations (or fair trade organizations) works for. Fair trade movement, which was started back in 1940’s, was initially based on religious or ethical commandments. With the passage of time, as more and more people including NGO’s and students joined in the cause, it is now becoming more and more popular especially in Europe and North America. For the reason that it’s not only the worker who benefits, but the whole society, especially the consumers who will be paying fair price.

To achieve their ultimate goal (which is to empower destitute workers towards economic prosperity), fair trade organizations works toward promoting this trade system, and spreading awareness among consumers. Such products are not easily available in all markets, so these organizations have to endorse the locations and stores where such merchandise is available. There is a type of certification known as Fair trade Certification, granted to businesses who meet the standards (works pretty much the same like ISO certification). Some of these standards are no gender discrimination, decent wages for workers, no child labor and safe working conditions. Though there’s no restraint but till now the fair-trade is normally limited to simple household stuff like tea and coffee, fruits, chocolate or handicrafts. 

Alternate trading systems:

Some people confuse alternative trade with alternate trading system, because of the similarity in the names. Alternate trading systems are actually unconventional trading system set up for the convenience of stocks buyers and sellers. These are not necessarily stock exchange, though a set of regulations made by SEC applies on them. Online trading system is an example of alternate trading.

Starting your own export business, The process explained

Whenever you decide to start something big, a little time spent on planning in the beginning will save you from lots of thinking sessions (filled with frustration, panic and disappointments) later on. You can make giant looking tasks a lot easier by dividing them in small, practical step-by-step procedures. Starting an export business is not a walk in the park, and when you decide to get into this business, you have to make quite a number of arrangements such as deciding your product, choosing shipment mode, arranging finance and much more.

Initial Stage:

Select your product

Determine potential buyers

Market research

Exporting method

Comprehensive business plan

First you have to select the product; in case you are not already involved in producing or exporting some product locally (even then you may need to improve its quality and features for international export). After choosing the product, you can now assess the targeted customers. Do some research on the market and analyze it carefully. Next step is to decide upon the exporting method. Remember, all of these decisions and selections should be based on some facts and figures, and not mere assumptions. As stated earlier, time spent in planning & research will save you from possible loss and failures in the future. You need to be watchful, alert and patient in the start, so that you don’t fall in hands of frauds and scams. 

Middle Stage:

Determine Price

Payment terms & conditions

Terms and conditions for delivery and shipment issues

Shipping mode

After you are done with initial research and planning work, you now have a plan in your hands. You know your potential customers by now. Next step is to determine prices, while doing this, keep all costs and expenses in mind, don’t try to take too much risk by offering extra ordinary low prices. Payment terms and the mode of payment is also an important decision, so is the selection of shipment mode you are going to use.

Final Stage:

Financing

Production/Manufacturing

Packaging

Shipment

Collection of payment through your bank or some payment processor

After all the planning and marketing, you will start receiving orders from interested customers. At this point, you need to have sufficient funds in hands to manufacture or arrange the products you are looking to export. Once you have got the funds, and you are done with the production work, you need to go through packaging and documentation work before making a shipment to the customers.

This is the basic framework for starting an export business, which will help you in starting smoothly and gradually growing.

Sorting out business failures, you haven't lost it all

Businesses may fail to prosper for many reasons, bad marketing, insufficient funding, poor customer service, non-supportive market conditions or incapable management. But this article is not about escaping business failures, because failures are a part of life and sometimes all the efforts and capital spent on planning/management can go in vain. If you are into reading success stories or biographies of successful businessmen, you'll note a common pattern in all of these memoirs i.e. they started, fell short, learn from their mistakes, tried again and carried on with the pattern until they accomplished their goals. They all seem to agree on this one point, that the secret to their success was their "never say die" approach.

No failure means No improvement:

It may sound quite idiotic, but the more failures you have in your early days the better, only as long as you are learning from these failures and constantly improving. Let the failures take care of your short comings and make sure you work on your weaklings once they have been revealed by some kind of failure. As a result, your chances of a slip-up decrease in later stages. What comes out of this string of "blunders and correction" is an experienced fellow who knows what's actually going to work and what's not.

You are not a failure just because your business fails:

Quite obvious, isn't it? Still many of us go down with their businesses and never recover. You need to realize that there are many other factors that will decide the fate of your business other than your personal skills, and many of these factors are not even in your control. Businesses should be treated like businesses, an investment or a gamble. Sure, you've got to work hard, give your 100 percent, apply all your experience and skills but please don't put your self-belief on stake.

Don't spend a lifetime in grieving over your failures:

In words of Marlon Brando, "That which does not kill us makes us stronger". Luckily business failures hardly kill anyone; they are not the end of the world even if you have lost it all. To tell the truth, financial deficit is the easiest to regain (you can't recapture youth, friends or time once you lose them). Getting into a mourning mode and staying like that forever will make the situation worse. Business failures (or any other failure) are just a stopover in the journey of your life; do not treat them as your final destinations. 

Role of distributors & agents in exporting business

As a manufacturer or exporter who is willing to step into some foreign market, you should better be starting in a safe and calculated manner. One relatively safe and secure method is to start with indirect exports and see the response. There are many ways to start indirect exports, but the most widely used method is to hire the services of commission agents or get into a contract with some distributor. Although, their roles may sound a bit similar, both of them differ at some points. Let’s look into the role of these two in detail.

Agents:

Also known as commission agents, they are responsible for selling your products in foreign market. They are experienced campaigners and quite familiar with the market you are going to target. They know the customers and their needs. However, the thing to remember is that they are solely responsible for selling your products. They do not buy from you directly; neither do they involve themselves in delivery or after sale services in most cases. Their source of earning is the fixed commission on every sale (or gross sales, they will make for you).

Commission agents must be able to meet following requirements before you hire their services.

Should be having loads of experience

Check to see if the agent also deals in some of your competitive products

Past record of sales and the stats for business they have provided to other exporters in the past

How much of the market that agent can cover on his/her own and to what extent

Do they sell to end users or businesses?


Distributors:

Unlike commission agents, distributors normally purchase the product from you (at low rates) and then sell it in the market, all the time maintaining some inventory with them. Given, they also provide after sale services, they are more suited if your product needs some installation work or requires after sale services.

Distributors should be financially stable

They must be good in inventory stocking and warehouse management

Should be having technical information about the product (train them if needed)

Should be ready to work at price margins you are willing to offer

Be careful when going into a contract and think over the clauses many times before signing

Distributor should be capable of running or managing the advertising campaign if needed





Now, whether you should go for agents or distributors? The answer to this question will depend on your product and preferences. 

Risks and challenges involved in international business

International businesses have to face risks and challenges at many fronts. Some are similar to the risks and challenges a domestic business confronts and some are unique. Even the challenges that are similar by definition differ in nature. For example both types of businesses have to face financial challenges, but an international business will be facing many factors related to global financial markets that don’t affect domestic businesses as much. They are more of a challenge in nature than risks and most of them can be handled through proper planning. Keep reading to understand these challenges better.

The challenge of international planning & strategy:
The first challenge for an international enterprise is to make a global strategy and then implement it. The managers and those at decision-making positions often find it difficult to change their thought pattern, which is not used to work in global paradigm. There are many international businesses but just some of them have truly adopted a proper global strategy. Though the situation is improving with more and more trained graduates and professionals taking on the management roles. Nevertheless, international business management requires extra ordinary management, foreseeing and leadership skills.

Financial and economic challenges:
It starts from arranging the funds to start international business and includes everything such as fluctuation in exchange rate, global economic crisis (or some economic crises in the host country), shift in oil prices, global inflation or tariff barriers imposed by the host government, also the export related policies of your own government.

International Politics:
Political know-how is a must for everybody but it becomes all so important when operating at international level. If some policies were suitable for your business, a change in ruling party can bring drastic changes in those policies. Political chaos will bring down the economy and with that your business. To prevent your business from such negative impacts, you need to make sound political judgments.

Environment, natural disasters and warfare:
Many multinational businesses have to face serious opposition by some environment friendly organizations. Citizens are more concerned about air and water pollution these days as it is becoming a serious threat to their health. Some natural disaster like floods and earthquake, or some kind of civil war breaking out in the host country is also in the list of possible challenges. A new challenge that an international business has to bear now days in some specific countries is the threat of terrorism.

Improving your personal productivity in this fast paced world

Just ask anyone around you, and you will find most of the people complaining about their low personal productivity. How they were not able to give their hundred percent and how much more they could have achieved only if they were able to utilize their full potential. How, for some reason they keep falling for the less important, insignificant activities every now and then? Isn’t it strange that the man has been inventing so many machines and devices to keep up with the time and complete lengthy, irksome tasks in shorter period; still the time manages to run faster?

In our effort to catch up with this fast paced world, and to meet all the expectations of the people around us, we pointlessly drift through the days and nights of our lives, years and years seem to pass in a twinkling of an eye and every time we look back, we are struck by a sense of guilt, realizing that we have spent most of our time in activities that were of no use to anybody. Even those who are relatively more successful than a common man will agree that they were capable of doing much more than what they have achieved so far. So what’s there to be done? Luckily, it’s never too late to start improving.

Time Management:

Good personal productivity is closely linked to better time management but good time management is something easier said than done. Who can deny the importance and scarcity of time, yet we continue to waste time, sometimes watching TV, going out and staying up late with friends, checking emails a thousand times on daily basis or just thinking how unfortunate we are for not having enough resources to fulfill our dreams (always forgetting that if we keep sitting idle like this, our dreams will just slip further away). To manage time effectively, you should carefully observe your daily routine. Sometimes we go through these time-wasting activities just out of habit. These habits are often not hard to break, and sometimes just knowing that you have already wasted so much time at something without getting anything out of it can make you quit that routine.

Don't Panic:

No matter how much work is left, as the deadline keep nearing, do not panic. Panic or stress will do nothing except eating out your energy and the time that can be used for more preparation and work. That doesn’t mean you should stop worrying about the cut-off dates or targets at all, just don’t let the fear of not being fully prepared or not meeting the deadline overcome. In panic, you may push yourself a little too hard and as a result you will end up feeling depleted.

Be focused and keep challenging yourself:

Again, simple rule but really hard to abide by. Never loose your focus, even before doing something constructive; ask yourself if it is going to help your goals in any way or not? Keep challenging yourself on constant basis, never shy away from challenges because often a challenge is all you need to get yourself back on track.

How to manage negotiations and conflicts at workplace

It’s good to have diversity in your workforce where different types of people can bring different advantages to your company. But this diversity often results into difference of opinions between two employees or two different departments. Conflicts are a part of working environment and as a manager you don’t need to panic in such situations. You cannot eliminate the disagreements altogether; all you can do is to manage them in a way that it won’t affect your productivity levels. The sooner you deal with them, the better it is for your business; otherwise the conflicts will give way to negative behavior and lack of team efforts, and as a result low productivity.
Possible Causes:
Whenever you get to the bottom of any conflict, you will find the same old cause lying in the roots, and that’s poor (or the lack of) communication. Different types of personality clashes and characteristics are another common problem. Unfair handlings, unmerited promotions, lack of opportunities or any other thing that results into insecurity among employees can also lead to the conflicts. If the work expectations or production targets are too hard to achieve, the workers will get frustrated, outcome might be bullying or regular exchange of harsh words between workers.
What to do:
As a manager who is looking to resolve conflict, you should start with communicating with all parties involved. Be calm, and listen to the whole thing patiently. Encourage everyone to speak their heart out, especially those who are less conversational. When thinking of a solution, try to focus on the problem and not personalities. Keep your personal prejudice away from the decision-making. Be sincere to both parties when taking corrective measures. One thing you should do even before some conflict arise is to eliminate favoritism of any type.

Precautions:
Employees and workers should be well aware of their job descriptions and what the management expects out of them. The rewarding system should be clear and well communicated. Joint decision making at all levels will reduce negative feelings to a great extent. Keep an eye at bullying types, and never let anyone get away with any kind of harassment or discrimination. Try to avoid personality clashes as much as possible, when making teams. If you have this feeling that two persons can’t work together, change the individuals if possible. Interact with all employees every now and then and never rely completely on your sources for the input.

Globalization & making global strategies for your business

Globalization presents a whole new set of opportunities, a totally different type of threats and so many alternate options to do business. It is going to affect your business one-way or the other, that’s why the sooner you start thinking in a global perspective the better. Globalization has made the future even more uncertain for the businesses, raising the bar to a new level. If your business was somewhat secure in the old domestic setup, you should get ready for some competition coming from across the borders. Being the best in your country is not enough anymore. You need to look for improvement constantly, as a business and as an individual to be able to survive.

On the positive side globalization is not all about threats and insecurities; it also provides so many new lucrative markets and opportunities at the same time. But to avail these benefits you need to be proactive. Unlike most businesses that just go with the happenings; you should make a global strategy and then stick to it.

Internal & External Considerations:

Internal & external assessment is the first step towards making a global strategy. It starts from deciding if your product or service has got the potential to make it at international level. If the answer is in yes, then you must go for it. Other factors include available resources (capital, technology, and skills), environmental factors, global inflation, trade barriers or the alternates available worldwide. An example of these alternates is how globalization has made it so easy to outsource some of your tasks to a firm located in some low cost zone and save significant amounts.

Set Goals:

Keep in mind the availability of finance or the requisite like supplies in the host country, when setting goals. Don’t overlook the hurdles like host Government policies, political uncertainties or global inflation in your excitement of going global. Set priorities and the level of risk your business is capable of taking.

Long Term Planning

The formulation of long-term plan requires the managers to look into all departments, starting from entry method to diversification targets, product marketing and distribution. If you have been running or managing a business locally for some time, it may take time and effort before your mind can adapt an international approach while planning. It may be hard at first, but then that’s something you can hardly ignore in this age of globalization.