03- 4. Leadership Theories (2015 Update)

8/20/2019 03- 4. Leadership Theories (2015 Update)

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UNIVERSITY OF ABERDEEN MSC PROJECT MANAGEMENT

PAGE 1 | MANAGING PROJECT TEAMS

4.0 Leadership Theories

There is quite a long history of research on leadership; most textbooks review this history indetail. This chapter will not present a detailed review of traditional leadership theories. Itwill however, consider contemporary conceptualisations of leadership and give you the

knowledge base to reflect on your leadership development, for the purposes of PersonalProfessional Development and the Written Assignment.

4.1 Traditional Theories of Leadership (ref. L&C, p. 549)

As mentioned, this chapter will not present a detailed review of traditional leadershiptheories. There are however, three types of leadership theories of which you should beaware in order to appreciate the relevance of “new” leadership theories. The three types oftraditional leadership theories are: 1) The Trait Approach, 2) The Behavioural Approach, and3) The Contingency Approach.

4.1a The Trait Approach (ref. L&C, p. 537, 546, 575)

The Trait Approach attempts to show that leaders posses certain characteristics that non-leaders do not. This approach largely came to a dead end. Part of the problem was thatthere was little agreement amongst researchers about what these traits meant, and whatleadership outcomes should be measured and how they should be measured. Although nosingle characteristic or trait fully explains leadership, personal characteristics such asintelligence and personality appear to be important for the emergence of leaders and theeffectiveness of leaders (e.g. Judge et al., 2002).

It is important to distinguish between the concepts of Leader Emergence and LeadershipEffectiveness. Leader Emergence is the study of the characteristics of individuals whobecome leaders; it examines the basis on which they were elected, appointed, or simplyaccepted. Leadership Effectiveness is the study of which behaviours on the part of thedesignated leader (regardless of how that position was achieved) led to an outcome valuedby the work group or organization.

Judge et al. (2002) examined the relationship between leader emergence and the Big 5personality factors (openness, conscientiousness, extroversion, agreeableness, neuroticism/ emotional stability). They defined leader emergence as the extent to which an individual isviewed as a leader by others. They found that emotional stability (low neuroticism),extroversion, openness to experience, and conscientiousness were all positively associated

with those who emerged as leaders.

Studies on leader emergence tell us something about the characteristics of those whoeventually become leaders, but these studies do not tell us why the individual wanted tobecome a leader. House and Singh (1987) suggested that people who aspire to positions ofleadership have a high Power Motive coupled with high Activity Inhibition and low AffiliationNeeds. The Power Motive results from people learning that the exercise of control overothers or the environment is pleasing. Activity Inhibition is a psychological term to describea person who is not impulsive. A low Affiliation Need means that people do not have a greatdesire for approval or connections with others. Although you can probably think of individualleaders who appeared to be driven by a desire for power, were deliberate rather thanimpulsive, and maintained a certain distance from their followers, you have probably alsoseen other leaders who seem less motivated by power than by duty, or the need to help


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others. Thus, the experience of power or control is a reward for many people, but there areclearly other motivational bases for the desire to lead.

Chan and Drasgow (2001) proposed that there was not one motive to lead (i.e. just a powermotive) but three: 1) Affective-Identity, 2) Instrumental, and 3) Social-Normative. Thesethree motives and the characteristics that define them are shown in the following table.

Affective-Identity is a power motive characterized by a desire for control. The secondmotive, Instrumental, emphasizes the personal benefits that come with being a leader. Thethird motive, Social-Normative, is more unselfish, emphasizing the duty to lead when calledupon, and the honour and privilege of leading.

L&C Table 12.2, Motives to Lead


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Judge et al. (2002) also examined the relationship between personality factors and leadereffectiveness. Leadership effectiveness was determined by ratings of the leader’s managerand / or subordinate. They separated their analyses into studies from business settings,military / government settings, and with students. The following table shows their findings ofwhich Big 5 personality factors were positively associated with leader effectiveness bysector. Further analysis revealed that the most consistent correlate of both leader

emergence and leader effectiveness was extroversion.

Industry Government/Military Student

Emotional stability Emotional stability Emotional stability

Extroversion Extroversion Extroversion

Openness to experience Conscientiousness Openness to experience

Conscientiousness

Agreeableness

4.1b The Behavioural Approach

In the 1950s, one research team at Ohio State University and another at Michigan Universitylaunched independent projects on leader behaviour. Rather than focussing on thecharacteristics of leaders, they focussed instead on how leaders behaved. They did thissimply by asking primarily subordinates to describe the leader’s behaviour. This producedinitially a very long list of leaders’ behaviours, within which there seemed to be two separategroups of behaviours. One group of these behaviours focussed on how leaders facilitategroup maintenance, and the other on what leaders do to ensure task accomplishment.

The Ohio State Studies called these two groups of leader behaviour Consideration andInitiating Structure. Consideration included behaviour indicating mutual trust, respect, and acertain warmth and rapport between the supervisor and group. Initiating Structure includedbehaviour in which the supervisor organizes and defines group activities and his/her relation

to the group.

The University of Michigan Studies identified Task-Oriented behaviour (similar to InitiatingStructure) and Relations-Oriented behaviour (similar to Consideration) as an important partof a leader’s activities. What was different about the Michigan results was that ParticipativeBehaviour on the part of a leader (i.e. allowing subordinates more participation in decisionmaking and encouraging more two-way communication) was key to group effectiveness.

The concepts of Task-Oriented and Relations-Oriented behaviours have stood the test oftime in that they play a role in most modern theories of leadership, and have consistentlypredicted a wide range of work-related behaviours. Up to this point though, leadershiptheories only concentrated on the traits or behaviours of leaders, with little regard for theeffect of situational or environmental variables.


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4.1c The Contingency Approach

A number of contingency approach theories have been produced to take into account therole of the situation in leadership. Fieldler (1967) made the first attempt to explain leaderbehaviour from the contingency perspective; he argued that different leaders are needed fordifferent situations. Vroom and Yetton (1973) suggested that leaders are able to adapt their

behaviour from situation to situation and proposed a contingency theory of leader decision-making; Vroom and Jago (1988) updated this model. They identified five styles of leaderdecision-making that leaders might choose to use. The options on this menu of styles rangefrom autocratic to more participative styles:

Autocratic Type 1 (AI) – Leader makes his/her own decision using information thatis readily available to him/her at the time. This type is completely autocratic.

Autocratic Type 2 (AII) – Leader collects required information from followers, thenmakes decision alone. Followers’ involvement is just providing information; the leadermay or may not inform followers about the problem or decision.

Consultative Type 1 (CI) – Leader shares problem with relevant followersindividually, seeks their ideas and suggestions, and then makes decision alone.Followers’ involvement is at the level of providing alternatives individually, which mayor may not influence the leader’s decision.

Consultative Type 2 (CII) – Leader shares problem with relevant followers as agroup, seeks their ideas and suggestions, and then makes decision alone. Followers’involvement is at the level of helping as a group in decision-making, which may ormay not influence the leader’s decision.

Group-based Type 2 (GII) – Leader discusses problem and situation with followers

as a group, and seeks their ideas and suggestions through brainstorming. Thedecision accepted by the group is the final one; the leader does not try to forcehis/her idea.

The Vroom-Yetton model assumes that one of the most important duties of a leader is tomake decisions, and it suggests a way to choose a decision-making strategy. There aremany advantages associated with a participative leader style. For example, it helpssubordinates understand the circumstances requiring a decision, and makes potentialrewards (and punishments) clearer, thus increasing motivation. Although a completelyparticipative style (group decision making) might contribute to the satisfaction of groupmembers, it might lead to a poorer decision. For example, group members may lack theabilities or knowledge to make difficult decisions, or be at odds with each other or with the

leader about the decision. The following table summarizes the decision rules in the Vroom-Yetton model.


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Yukl Table 5-1, Decision Rules in Vroom-Yetton Decision Model


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As noted above, a completely participative style may not always be appropriate. Thefollowing table gives some guidelines for the implementation of the participative elements ofthe Vroom-Yetton model.

L&C Table 12.5, Guidelines for Participative Leadership


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4.2 New Approaches to Leadership (ref. L&C, p. 558)

New approaches to leadership represent a paradigm shift in that these theories considerfollowers’ perceptions of the leader / the social exchange between leader and follower. Wewill examine two of these theories in detail: Leader-Member Exchange theory andTransformational Leadership. You will be given the opportunity to experience these theories

in action by completing self-administered questionnaires and reflecting on the analyses aspart of your Written Assignment.

4.2a Leader-Member Exchange

One model of leadership, Leader-Member-Exchange (LMX) Theory (Danserau, Graen &Haga, 1975) is particularly relevant for managing groups / teams. LMX was introduced toyou in the Organizations & People module, but will also be considered here.

LMX theory describes the role-making processes between a leader and each individualsubordinate and the exchange relationship that develops over time. It was formerly calledvertical dyad linkage theory because of its focus on reciprocal influence processes withinvertical dyads composed of one person who has direct authority over another person.

Most leadership theories treat leadership as a one-sided action on behalf of the leader, whotreats all of his/her followers similarly. LMX theory proposes that leaders adopt differentbehaviours with individual subordinates. The particular behaviour pattern of the leaderdevelops over time and depends to a large extent on the quality of the leader-subordinaterelationship. According to this theory, subordinates fall into two distinct groups: In-groupmembers, and Out-group members.

In-group members are people who have high-quality relationships with their leader and highlatitude for negotiating their work roles. The leader tends to deal with in-group members

without resorting to the use of formal power or authority. Out-group members are peoplewho have low-quality relationships with their leader and little latitude for negotiating theirwork roles. The leader is more likely to rely on formal power and authority to influence theirbehaviour. In the following diagram, the two-headed arrows represent dyads, and theshorter arrows indicate in-group members, and the longer arrows indicate out-groupmembers.


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Only a small number of studies have measured LMX from the perception of both the leaderand the follower. It is reasonable to expect the two parties to agree about something asimportant and salient as the quality of their relationship. Surprisingly, these studies havefound a low correlation between leader-rated LMX and subordinate-rated LMX. This may

reflect measurement problems in the scales or actual differences in perception. Subordinateratings of LMX appear to be strongly influenced by the perception that the leader issupportive and fair, whereas leader ratings of LMX appear to be strongly influenced by theperception that the subordinate is competent and dependable. For the WrittenAssignment, you will complete an upward appraisal using the LMX 7 Questionnaire.

More recent versions of LMX theory describe a Life-Cycle of Leader-Follower Relationship.This begins tentatively and then either evolves into a more trusting, committed relationshipor remains fixed at the initial stage. The subordinates who experience the evolvedrelationship become in-group members and the subordinates who remain stuck at the initialstage become out-group members. Newer variations of LMX theory suggest that the task ofthe leader is to drive the relationship from the tentative first-stage relationship to a deeper,

more meaningful one.

The practical benefit of LMX theory is that it suggests what leaders can do to manage therelationship with their followers, and vice versa. It also suggests how the two roles, leaderand follower, can be integrated if one happens to be both (which is the case for most projectmanagers).

4.2b Transformational Leadership

Much of the early research on leadership viewed the leader as a tactician, not as aninspirational figure with a strategic role. If we consider successful leaders in business andpolitics, they are frequently portrayed as heroes and heroines who unite, inspire andmotivate their followers by offering attractive strategic visions of a better tomorrow. Thus, inthe 1990s, many researchers turned their attention to qualities like vision, and charisma,which added an important new element to the study of leadership.

Traditional theories of leadership largely ignored the issue of how a leader’s behaviour isperceived by followers. The way a leader influences followers’ perceptions of his/herbehaviour is an important part of LMX theory and Transformational Leadership.

Theorists in this area make a clear distinction between Transactional Leadership andTransformational Leadership. Transactional Leaders try to motivate subordinates by

observing their performance, identifying the rewards they desire, and distributing rewards fordesired behaviours. The underlying idea is that transactional leadership is based onexchanges, or transactions with subordinates.

There are two components of transactional leadership: 1) Contingent Reward, and 2)Management By Exception.

Contingent Reward: the leader provides rewards if and only if subordinates performadequately and / or try hard enough.

Management By Exception: the leader does not seek to change the existing workingmethods or subordinates so long as performance goals are met. He or sheintervenes only if something is wrong. This can be active, where the leader monitors

the situation to anticipate problems, or passive, where the leader does nothing until aproblem or mistake has actually occurred.


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Transformational Leaders go beyond the use of transactional leadership by developing,inspiring and challenging the intellects of followers so that they become willing to go beyondtheir self-interest in the service of a higher collective purpose, mission, or vision. To beeffective, this vision needs to be ambitious but realistic, and articulated clearly in inspirationalways. Transformational leaders encourage followers by setting a personal example andfollowers become motivated and emotionally attached to the leader. There are four

components of transformational leadership. These are:

Individualised Consideration: The leader treats each follower on his or her ownmerits, and to develop each follower through mentoring, coaching and delegation.

Intellectual Stimulation: The leader encourages free thinking, and emphasisesreasoning before any action is taken.

Inspirational Motivation: The leader creates an optimistic, clear and attainable visionof the future, thus encouraging others to raise their expectations.

Idealised Influence or Charisma: The leader makes personal sacrifices, takes

responsibility for his or her actions, shares any glory, and shows great determination.

Bass and Avolio’s (1994) Model of Transformational Leadership

Bass perceived transformational leadership as building upon transactional leadership in ahierarchy with respect to its effectiveness. This is shown in the following figure. This figureincludes Laissez-faire Leadership which Bass does not consider a leadership style, but heincluded it in the hierarchy to contrast it with legitimate leadership styles – transactional and

transformational. Laissez-faire Leadership is where the leader avoids decision-making andsupervisory responsibility, and is inactive. This may reflect a lack of skills and / ormotivation, or a deliberate choice by the leader.


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L&C Figure 12.4, Hierarchical Nature of Transformational Leadership

Bass developed a questionnaire called the Multifactor Leadership Questionnaire (MLQ) toassess the extent to which subordinates perceive their leader to exhibit different componentsof transformational and transactional leadership (as well as a laissez-faire approach). Forthe Written Assignment, you will complete a version of the MLQ and reflect upon theanalysis.

L&C Table 12.6, Guidelines for Transformational Leadership


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4.3 Cross-Cultural Studies of Leadership (ref. L&C, p. 576)

The globalisation of markets brought about by communication technology and the mobility ofproduction resources means that more and more people work in countries and cultures thatare novel to them. For many managers, this means leading people of different backgroundsand outlooks from their own. You may recall from the Organizations & People module that

Hofstede (1980)1 identified four cultural dimensions by collecting data from IBM employeesacross many countries. He has continued his research and has added to / updated histheory as follows:

L&C Table 1.5, The Five Dimensions of Hofstede’s Theory of Culture

1 Hofstede, G. (1980). Culture’s Consequences: International differences in work -related values. London: Sage.


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The following figure shows the differences between five countries on Hofstede’s culturaldimensions. These scores are indicative of the “personality” of a nationality as culture isessentially a “collective psyche.” The cultural dimension scores for the UK were consideredin the Organizations & People module; take a few moments to think about how the UKcompares with these countries on these dimensions.

L&C Figure 1.4, Cultural Differences among Countries


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As shown in the following table, each of the five cultural dimensions has implications for thework behaviour and leadership. For instance, in high power distance cultures like China andIndonesia, autocratic leadership is predominant. In low power distance cultures like theUnited States, more participative styles of leadership are predominant.

L&C Table 1.6, The Implications of Cultural Dimensions for Human Resource Management


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The GLOBE Project

It would be strange if there were not differences between countries with respect to thepreferred, most used and most effective leadership styles. The GLOBE (Global Leadershipand Organizational Behaviour Effectiveness) project, which began in 1991, is a large-scale

cross-cultural study of leadership by 170 social scientist and management researchers inover 60 countries. The following table lists some of the universally accepted leadershipattributes found by the GLOBE project, which fit neatly with the concepts of transformationaland charismatic leadership.

L&C Figure 12.7, Universal and Culture-Specific Aspects of Leadership

Brodbeck et al. (2000) examined GLOBE data from 22 European countries. They founduniversally accepted and rejected leader attributes and behaviours within the Europeanculture, as well as leader characteristics that were more acceptable in some countries thanothers. These universals and culture-specific characteristics are displayed in the following

table. As an example of a culture-specific characteristic, autonomous leaders wereperceived as more effective in Germany and Russia, but less effective in Great Britain andFrance.


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L&C Figure 12.8, Leadership Attributes by Region and Country Cluster

Although the GLOBE project is not yet complete, the implications of these early analysesseem clear; transformational and charismatic leader behaviours travel well. This is goodnews for the multinational company and the global manager. It means that selection andtraining can emphasize these leader behaviours, which appear relevant regardless of theculture.


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Mandatory Online Discussion Task 2: Thomas Scott

Instruct ions:

Read the following case study2. Enter the Discussion Forum (Online Discussion 2 – ThomasScott). In about 500 words:

1. How did Thomas Scott display effective leadership with his managers? Give specificexamples of his actions or behaviour and their consequences that illustrate effectiveleadership, with reference to the key theories and models we have discussed.

2. How could Thomas have been even more effective as a leader?

Talking to other students in the discussion forum will allow you to share experiences andlearn from each other. There is a wealth of experience here and you should take advantage

of it. See the Course Calendar for the deadl ine for this p osting.

Thomas Scott, General Manager of the plant at Greenock for the past two months, had justlearned from corporate headquarters in Edinburgh that his plant was one of those beingconsidered for a severe reduction in workforce or even closure because of the age of itsequipment and machinery. Headquarters were considering opening a new plant inLivingston, some 60 miles away and about 75 minutes by car, to replace the older plant’soutput. The product from the old plant was still in demand, but there was a chance that itwould fail to meet market prices and quality requirements in comparison with that from anewer plant. Some employees might be transferred from Greenock to Livingston, but manywould have to be made redundant.

Before taking any action, Thomas began to think about the problem over the weekend.Sitting back and not reacting at all was probably the worst thing he could do. Perhaps, if hecould show corporate headquarters a sustained if modest increase in productivity with theold equipment and machinery, they might conclude that the old plant should be retooled toretain the experienced workforce. Why would they risk going to Livingston and bringing inan untrained workforce or, for that matter, a workforce without proven capability? He knewthat most of his employees would not accept a transfer to Livingston. This community wastheir home. Thomas wondered if it would make sense simply to replace equipment andmachinery and add new facilities right here and continue to use a workforce that he knewcould produce.

After thinking about the problem in this way over the weekend, Thomas called his managerstogether the following Monday to raise the issue and discuss a plan for improving the productivity level in the plant. He explained the problem and its implications to the group ofmanagers. After giving them all an opportunity to express their frustration, Thomas tookcontrol of the meeting:

“I wanted to bring you all together to talk about our performance. Please listen carefully to what I think we need to consider. I’ve reviewed our productivity data and noticed a levelling-off and even a decline over the past several quarters, particularly on the oldest production lines. I realize,

2 Based on a real-life case in the USA by Bernard M. Bass and Bruce J. Avolio.


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as you do, that a lot of the problem rests with the old equipment andmachinery we have to wor k with, but I’m concerned about our overall performance and the message it sends to others. More importantly, Ibelieve that we all take a lot of pride in our plant and at being the best inthe system. I know that we have to put up with the old equipment andmachinery.

However, I want to explore what we can do together to make the head-quarters people take positive notice of this plant and provide us withthe tools we need to do the job right. Let’s challenge one another andset some new productivity goals. The goals we set should be challenging:they must push us to higher levels. In fact I would base them on the performance level of a competitor’s plant that has newer equipment andmachinery. I believe that, if we are successful, three years from now the people here will be working with brand-new equipment. I’m confidentthat, if we demonstrate the quality of the people here through improvementsin work productivity using old equipment and machinery, they would wantto invest in new equi pment and machinery in this plant.”

After some agitated discussion by the managers, everybody became convinced about givingThomas’s challenge a try. Some became excited about the possibilities. It certainly couldnot hurt their image, and perhaps they would get the newer equipment and machinery morequickly while avoiding a reduction in workforce or closure.

Thomas believed that, if the plant could rise to greater heights of productivity, headquarterswould not reduce or close operations at Greenock. How would it look to the other plantsaround Scotland if a highly productive plant was reducing its workforce or being closed?Thomas began to believe that the plan could work and that it was well worth the risk.

In the days that followed, Thomas challenged his managers, in frequent meetings, to come

up with a plan to keep the machines running for as long as possible without a shutdown.Occasionally he met with resistance: “The machines are worn out; it takes too long to repairthem.” And “The maintenance people can’t keep up with calls for help as the machines arebreaking down too often.” Thomas encouraged his managers to “think outside the box” andto use not just their experience but also their imagination and intuition. Eventually they cameup with several plans.

One plan involved developing a mobile preventive maintenance team that continually movedthrough the plant attempting to identify problem areas, and additional work crews before anentire system needed to be shut down. Thomas allocated two people to this team who were particularly skilful in anticipating problems and who enjoyed the intellectual challenge. Two

additional emergency crews were formed that came in when a machine had to be shutdown. The emergency crews were able to begin work soon after the machine went down.There was no cumbersome paperwork and no bureaucratic steps that had to be followedany more. The emergency team leader made all of the decisions on the spot. The twocrews began a friendly competition to see how quickly a system could be brought up andhow long it would stay in operation. Bringing up a system quickly was seen as shoddy workif the system did not stay up. Thomas encouraged his managers to give feedback to thecrew members where this happened and coach them on how to ensure that systems wouldstay up.

When a system did shut down, the work crews focused on restocking their materials or,whenever possible, they would shift to another work station. Each work crew maximized its

time at work. Each work day became a test of total persistence in carrying out the job.


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Setting up additional work crews and eliminating the bureaucratic steps led to improvementsin productivity. Everybody became caught up in working smarter and more cooperatively. All managers came to work dressed in work clothes so that, if they were needed on the shopfloor to help bring up a system that had gone down, they were ready. Even Thomas kept aset of work clothes in his office in case he was needed. On a couple of occasions he was,because he was known to have special expertise with some of the machines even though he

had left that kind of work behind many years ago. His “hands-on” approach and willingnessto join in rapidly gained him the respect and trust of the crews.

The productivity at the plant continued to improve and levelled off at a point considerablyabove what was expected, given the old equipment and machinery. As soon as the plantreached what Thomas felt was its peak, he visited headquarters to discuss matters with theexecutive board.

Thomas took his managers to the meeting to symbolize the type of team effort indicative ofhis organization. Taking one’s managers to a meeting with top management was ratherunusual for this organization’s culture. At the meeti ng, Thomas displayed some charts thatrepresented the current productivity figures for the plant and compared them with those of a

competitor’s plant that had come on line just five years previously. He highlighted theinnovative approaches that were now being used to maintain the higher quality and productivity levels. He stressed the importance of adding new equipment and machinery tomaintain the improved levels of performance, which were placing considerable strain on hisworkforce:

“We are in the midst of a battle for survival at the Greenock plant. However,there is a lesson I’ve learned as a consequence of the threat confronting the people here today and those back at the plant. It has never been the equipmentand machines that have made the plant stand out in our company and amongour competitors. It has been the machine operators. With ‘dinosaurs’, my people have produced at levels close to those of our most modern plants.

It is with very special people that I hope you will allow me to retool our old plant while adding a new, specialized plant on our area. These people areour most valuable asset.”

Corporate headquarters quietly abandoned its plans for relocation and reduction of theworkforce or closure. Several years later, the plant was operating effectively andcompetitively with new equipment and machinery and with the same management team andoperators.

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03- 4. Leadership Theories (2015 Update)