Capitalism is followed by a large number of countries these days. The countries like USA that are following the capitalist system are leading the world in terms of the level of economic development.

Capitalism follows four basic principles
(i) The doctrine of self interest
(ii) Laisseze Faire policy
(iii) Theory of competitions
(iv) Profit Motive.

Free enterprise, competitions and private ownership of property are some of the features of capitalism. It is also known as the free enterprise economy. A policy of non-interference is adopted by the government in this system. Trade and industry are allowed to take their own course and the government is mainly concerned with the maintenance of law and order in the country.

Authority is binding force of an organization. Without authority a manager ceases to be a manager. In context of management authority can be described as the right to guide and direct the actions of others to secure responsive which are desirable for the achievement of the organizational goals. Authority is the right to decide and direct how others will perform their duties. It is also the right to make decisions and then get these decisions carried out.

Authority is formal in nature and is supported by either tradition, law or standards of authority. Authority is not unlimited, the limit and extant of authority are defined in advanced. It is a relationship between superior and his subordinates which is used to achieve the organizational goals. It is used to influence the behavior of the subordinates.

Group dynamic refers to the forces operating in groups. The group dynamics is a term concerned with the interaction forced with among the members of a group in social situations. The same concept is applicable to the groups in organization, whether these are formal or informal in nature. While some see group dynamics as describing the method of conducted and organizing group other say that it consists of set of techniques like role playing brain storming team building and transactional analysis.

From managerial point of view, work group is a primary means through which managers coordinate the behavior of individuals to achieve organizational goals. The managers direct the activities of the individuals and also direct and coordinate the interaction within the groups.

What is organizational cultural?
The concept of organizational cultural has gained a lot of acceptance during the last few decades and the examination of organization cultural has become evaluation. The cultural of a group has been defined as a pattern of shared basic assumption that this group learns while solving the problems of external adaptation and internal integration. These are to be taught to the new members as a correct way to perceive, think and feel in relation to these problems. Organizational cultural refer to a system of shared meaning held by the members that distinguished their organizational from others. This system of share meaning is a set of main characteristics that the organizational values.

How does organizational cultural starts?
Traditionally the founders of the organization have a major impact on the cultural of the organization. As the present customs traditions and general way of doing things a largely due to what it has done before and the degree of success it has achieved in those endeavors, the ultimate source of organizational cultural can be traced to its founders. The founders have a vision about what the organization should do and they are not tied on by previous ideologies or customs. The small size of the organization in the beginning also helps in the imposition of the vision of the founder on all the members of the organization. The organizational cultural is sustained through selection practices, action of the top management and socialization methods.

Several terms have been used to defined the leadership styles of individuals and the most commonly use terms to describe leadership styles are:

(i) Autocratic leader: The autocratic leader assumes all the responsibility for decision making, initiating action and directing and controlling the subordinates. Powers are centralized in the hands of the leader who wants obedience and adherence to his decisions from the subordinates. The autocratic leader reviews that performance level of his subordinates with a view to eliminate any deviations from his directives.

(ii) The participated leader: Leadership by consultation is practiced in this style of leadership. The leader does not delegate his powers to make final decision but he does seek the opinion of his subordinates on different matters that affect them. To be effective the participated leader should listen and accept the contribution of his subordinates wherever it is possible and practical to do so. Though the final authority lies with the leader he becomes more supportive rather than being dictatorial.

(iii) Free Rein Leader: Leaders following this style of leadership delegate the decision making authority to their subordinates to completely. The leaders accept the subordinates to take their responsibility of their motivation, guidance and control. Other than providing the basic rules the leader provides a limited amount of support to the subordinates. As the contact is limited the subordinates have to be high qualified and capable of doing their job of achieving successful results.