DAMODAR VALLEY CORPORATION

A case on Situational Leadership

ABOUT THE CASELET…

Damodar valley Corporation! Case from the 1970’s Company in shambles

Nearly 300 strikes, lockout, dharnas etc P.C. Luther takes over as Chairman. After his assesment of the situation he decided to

use the Situational Leadership approach.

First thing he sought for – Discipline

• HE APPLIED THE 4 DIFFERENT STYLES OF THE SITUATIONAL THEORY APPROACH.

• Mr. Luther set targets for managers & closely monitored their progress. This is Style 1 of leadership.

• HE ALSO SOUGHT TO SOLVE THE GRIEVANCES OF LABOURS, THIS WAS STYLE 2 OF LEADERSHIP.

• Went on to bring an unexpected turnaround.

• With productivity increasing, he went ahead & involved managers into the functioning & diverted his attention on competency building & providing facilities. This was Style 3 of leadership.

• While Luther was proceeding to Style 4 of leadership, he was replaced by a new chairman.

SITUATIONAL LEADERSHIP THEORY

Developed by 

1. Paul Hersey. Professor and author of the book Situational

Leader.

2. Ken Blanchard Leadership guru and author of The One Minute

Manager.

HERSEY AND BLANCHARD CHARACTERIZED LEADERSHIP STYLE IN TERMS OF THE LEADERSHIP STYLE ITS ASSOCIATED LEVEL OF MATURITY AND DEVELOPMENT LEVELS.

Leadership Style

Level Of Maturity

Development level

S – 1 M - 1 D - 1

S – 2 M - 2 D – 1

S – 3 M - 3 D – 1

S – 4 M - 4 D - 1

4 Leadership Styles:

S1: Telling - • characterized by one-way communication in which the

leader defines the roles of the individual or group and provides the what, how, why , when, and where to do the task.

S2: Selling -• while the leader is still providing the direction, he or she is

now using two-way communication and providing the socioemotional support that will allow the individual or group being influenced to buy into the process.

S3: Participating -• Shared decision making about aspects of how the task is

accomplished and the leader is providing less task behaviors while maintaining high relationship behavior.

S4: Delegating -• The leader is still involved in decisions; however, the

process and responsibility has been passed to the individual or group. The leader stays involved to monitor progress.

The Hersey-Blanchard Situational Leadership Theory identified four levels of Maturity M1 through M4:

M1 - They generally lack the specific skills required for the job in hand and are unable and unwilling to do or to take responsibility for this job or task.

M2 - They are still unable to take on responsibility for the task being done; however, they are willing to work at the task.

M3 - They are experienced and able to do the task but lack the confidence to take on responsibility.

M4 - They are experienced at the task, and comfortable with their own ability to do it well. They are able and willing to not only do the task, but to take responsibility for the task.

Followed by 4 development levels

D1 - Low competence and high commitment.

D2 - Low competence and low commitment.

D3 - High competence and low/variable commitment.

D4 - High competence and high commitment.

ROOTS OF THE THEORY

The fundamental underpinning of the situational leadership theory is there is no single "best" style of leadership.

THE CASE QUESTIONS.

1. Which type of Leadership Theory is illustrated in this case?

Situational Leadership forms are demonstrated by Mr. PC. Luther, the chairman of the company DVC, in this case.

2. Can you consider Luther an authentic leader? Did he trust his

people? How are trust and leadership related?

He was definitely an authentic leader, not completely though as he believed in employee participation to some extent.

Yes he definitely trusted his people.

Trust is an integral part of leadership as it determines leadership style and many other factors emanating out of the trust levels.

3. What are the factors responsible for Luther’s success in turning

around DVC?

Firstly – Application of the required and apt Leadership style!

Next – Exact Identification & Prioritization of problem areas Discipline Staff Grievances and union issues!

Proactive approach!

CONCLUSION

• All the 4 types of Situational Leadership Forms are important at the rite situation.

• The manager needs to identify the form of leadership to be implemented at the suitable situation for betterment of the company.

• The manager should be selfless like Mr. Luther & have the company’s interest at the apex.