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Business Decision MakingADMN 2167
Professor: Bob Carpenter
Many of the slides in this presentation are from Nancy Langton and Stephen P. Robbins, Organizational Behaviour, FourthCanadian Edition .
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Chapter Outline
Are Managers and Leaders the Same?
Leadership as Supervision A Myriad of Leadership Theories Charasmatic Leadership
Dispersed Leadership: Spreading LeadershipThroughout the Organization Leading Ones Self
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When the effective leader is finished with his work, the people say it happened naturally.
- Lao Tse 604-531 B.C.
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Leadership
The ability to influence a group toward theachievement of goals
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Distinguishing Leadership from Management
Management1. Engages in day-to-day caretaker activities:
Maintains and allocates resources2. Exhibits supervisory behaviour: Acts to make
others maintain standard job behaviour 3. Administers subsystems within organizations4. Asks how and when to engage in standard practice5. Acts within established culture of the organization6. Uses transactional influence: Induces compliance
in manifest behaviour using rewards, sanctions,and formal authority
7. Relies on control strategies to get things done bysubordinates
8. Status quo supporter and stabilizer
Leadership1. Formulates long-term objectives for reforming the
system: Plans strategy and tactics2. Exhibits leading behaviour: Acts to bring about
change in others congruent with long-term objectives
3. Innovates for the entire organization4. Asks what and why to change standard practice5. Creates vision and meaning for the organization6. Uses transformational influence: Induces change in
values, attitudes, and behaviour using personalexamples and expertise
7. Uses empowering strategies to make followers
internalize values8. Status quo challenger and change creator
People love to work for well-organized managers who facilitate getting the jobdone by coordinating the work of various people
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Trait Theories
Traits are characteristics of the person: Physical characteristics Abilities
Personality traits Traits consistently associated with leadership: Ambition and energy The desire to lead Honesty and integrity
Self-confidence Intelligence Job-relevant knowledge
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Leadership Attributes: A Cross-Cultural View
Source: D. N. Den Hartog, R. J. House, P. J. Hanges, S. A. Ruiz- Quintanilla, and P. W. Dorfman, Culture Specific and Cross -culturally Generalizable Implicit LeadershipTheories: Are Attributes of Charismatic/Transformational Leadership Universally Endorsed? Leadership Quarterly 10 no. 2 (Summer 1999), pp. 219-256.
Leader Attributes UniversallyLiked
Trustworthy
Dynamic
Motive arouserDecisive
Intelligent
Dependable
Plans ahead
Excellence orientedTeam builder
Encouraging
Leader Attributes UniversallyDisliked
Noncooperative
Irritable
EgocentricRuthless
Dictatorial
Loner/self-centred
Leader Attributes Over WhichThere Was Most Disagreement
Subdued
Intragroup conflict avoider
CunningSensitive
Provocateur
Self-effacing
Willful
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What CEOs Identify as Key Leadership Qualities
Source: Survey conducted by American Express for th e National Quality Institute. Reported in R. Nutt, Survey Finds Leadership Key, Vancouver Sun , June 1, 2000, p. D6.
Quality
Communication skills
Ability to motivate people
Honesty
Ability to listen
Team-building expertise
Analytical skills
Aggressiveness in business
CEOs Rating It Most Important (%)
52
47
34
25
24
19
10
Quality
Communication skills
Ability to motivate people
Honesty
Ability to listen
Team-building expertise
Analytical skills
Aggressiveness in business
CEOs Rating It Most Important (%)
52
47
34
25
24
19
10
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Emotional Intelligence and Leadership EI is the best predictor of who will emerge as a leader. IQ and technical skills are threshold capabilities.
Theyre necessary but not sufficient requirements for leadership.
Leaders need: self-awareness, self-management, self-motivation, empathy, and social skills to become a star
performer. These are the components of EI.
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Management Live Video
Watch the following video.
Comment on the performance and style of PatCariggan. (EI? People Orientation? Traits?) Watch the next video. Comment on the performance and style of
Admiral Hyman Rickover (EI? Peopleorientation? Traits?)
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History of Leadership Theories
1900s: the great man theories -- its aninnate ability; who is born to lead?
1930s: group theory -- how leadershipemerges and develops in small groups.
1940s -50s: trait theory -- what universal traits
are common to all leaders. 1950s -60s: behavior theory -- what key behavioral patterns result in leadership.
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History of Leadership Research
1960s -70s: contingency/situational --establish which leadership behaviorssucceeded in specific situations.
1980s: excellence -- what interaction of traits, behaviors, key situations, and groupfacilitation allows people to lead organizationsto excellence?
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Contingency or Situational Leadership Theories
These stress the importance of considering thecontext when examining leadership. Fiedler Contingency Model Hersey and Blanchards Situational Theory Path-Goal Theory
Substitutes for Leadership
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Fiedler Contingency Model
Effective group performance depends upon the proper match between the leaders style and the degree towhich the situation gives control to the leader.
Least preferred co-worker (LPC) questionnairedetermined whether individuals were primarilyinterested in: good personal relations with co-workers, and thus
relationship oriented, or productivity, and thus task oriented.
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The ManagerialGrid
Source: Reprinted by permission of Harvard Business Review . Based on anexhibit from Breakthrough inOrganization Development,
by R. R. Blake, J. S. Mouton,L. B. Barnes, and L. E.Greiner (November-December 1964). Copyright 1964 bythe President and Fellows of Harvard College; all rightsreserved.
Exertion of minimum effort toget required work done isappropriate to sustainorganization membership.
Efficiency in operationsresults from arrangingconditions of work in such away that human elementsinterfere to a minimum degree.
9
2 3 4 5 6 7 8 9Low High
Concern for production
Low
High
8
7
6
5
4
3
2
1
1
Country club management1,9
Thoughtful attention to theneeds of people forsatisfying relationships leadsto a comfortable, friendlyorganization atmosphere andwork tempo.
Team management9,9
Work accomplishment is fromcommitted people who have a common stake in theorganization s purpose. Thisleads to relationships of trustand respect.
Impoverished management1,1
Authority-obedience9,1
Middle-of-the-road management5,5
Adequate organizational performanceis possible through balancing thenecessity to get out work withmaintaining morale of people at asatisfactory level.
C o n c e r n
f o r p e o p l e
Exertion of minimum effort toget required work done isappropriate to sustainorganization membership.
Efficiency in operationsresults from arrangingconditions of work in such away that human elementsinterfere to a minimum degree.
9
2 3 4 5 6 7 8 9Low High
Concern for production
Low
High
8
7
6
5
4
3
2
1
1
Country club management1,9
Thoughtful attention to theneeds of people forsatisfying relationships leadsto a comfortable, friendlyorganization atmosphere andwork tempo.
Team management9,9
Work accomplishment is fromcommitted people who have a common stake in theorganization s purpose. Thisleads to relationships of trustand respect.
Impoverished management1,1
Authority-obedience9,1
Middle-of-the-road management5,5
Adequate organizational performanceis possible through balancing thenecessity to get out work withmaintaining morale of people at asatisfactory level.
C o n c e r n
f o r p e o p l e
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Substitutes and Neutralizers for Leadership
Source: Based on S. Kerr and J. M. Jermier, Substitutes for Leadership: Their Meaning and Measurement, Organizational Behavior and Human Performance , December 1978, p. 378.
Characteristics of Individual
Experience/training
Professionalism
Indifference to rewards
Characteristcs of JobHighly structured task
Provides its own feedback
Intrinsically satisfying
Characteristics of organizationExplicit formalized goals
Rigid rules and procedures
Cohesive work groups
Effect on LeadershipSubstitutes for task-oriented leadership
Substitutes for relationship-oriented and task-oriented leadership
Neutralizes relationship-oriented and task-oriented leadership
Substitutes for task-oriented leadership
Substitutes for task-oriented leadership
Substitutes for relationship-oriented leadership
Substitutes for task-oriented leadership
Substitutes for task-oriented leadership
Substitutes for relationship-oriented and task-oriented leadership
Characteristics of Individual
Experience/training
Professionalism
Indifference to rewards
Characteristcs of JobHighly structured task
Provides its own feedback
Intrinsically satisfying
Characteristics of organizationExplicit formalized goals
Rigid rules and procedures
Cohesive work groups
Effect on LeadershipSubstitutes for task-oriented leadership
Substitutes for relationship-oriented and task-oriented leadership
Neutralizes relationship-oriented and task-oriented leadership
Substitutes for task-oriented leadership
Substitutes for task-oriented leadership
Substitutes for relationship-oriented leadership
Substitutes for task-oriented leadership
Substitutes for task-oriented leadership
Substitutes for relationship-oriented and task-oriented leadership
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Hersey and Blanchards Situational Leadership Theory
Able andwilling
Able andunwilling/
apprehensive
R3R4
Unable andwilling
Unable andwilling
Unable andunwilling/ insecure
Unable andunwilling/ insecure
ModerateHigh Low
Task behaviour
Leader Behaviours
S e l l i n g
T e l l i n g D e l e g
a t i n g
P a r t i c i p
a t i n g
(Low) (High)
S4
S3 S2
S1
(High)
Follower Readiness
R2 R1
R e
l a t i o n s
h i p B e
h a v
i o u r
Able andwilling
Able andunwilling/
apprehensive
R3R4
Unable andwilling
Unable andwilling
Unable andunwilling/ insecure
Unable andunwilling/ insecure
ModerateHigh Low
Task behaviour
Leader Behaviours
S e l l i n g
T e l l i n g D e l e g
a t i n g
P a r t i c i p
a t i n g
(Low) (High)
S4
S3 S2
S1
(High)
Follower Readiness
R2 R1
R e
l a t i o n s
h i p B e
h a v
i o u r
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Hersey and Blanchards Situational Theory
Follower: unable and unwilling Leader: needs to give clear and specific
directions. Follower: unable but willing
Leader: needs to display high task orientation andhigh relationship orientation.
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Hersey and Blanchards Situational Theory
Follower: able but unwilling Leader: needs to use a supportive and
participative style.
Follower: both able and willing Leader: a laissez-faire approach will work
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Path-Goal Guidelines to Be Effective Leader
Determine the outcomes subordinates want. e.g., good pay, job security, interesting work, and autonomy to
do ones job, etc. Reward individuals with their desired outcomes when they
perform well. Be clear with expectations.
Let individuals know what they need to do to receive rewards
(the path to the goal). Remove barriers that prevent high performance. Express confidence that individuals have the ability to perform
well.
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Path-Goal Leadership Styles
Directive Informs subordinates of expectations, gives
guidance, shows how to do tasks.
Supportive Friendly and approachable, shows concern for
status, well-being, and needs of subordinates.
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Path-Goal Leadership Styles
Participative Consults with subordinates, solicits suggestions, takes
suggestions into consideration. Achievement oriented
Sets challenging goals, expects subordinates to perform athighest level, continuously seeks improvement in
performance, has confidence in highest motivations of employees.
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Path-Goal Theory
CONTINGENCY FACTORS
Environmental
Task Structure Formal Authority System Work Group
Subordinate
Locus of control Experience Perceived ability
Leader Behaviour
Directive Achievement-oriented Participative Supportive
Outcomes
Performance
Satisfaction
CONTINGENCY FACTORS
Environmental
Task Structure Formal Authority System Work Group
Subordinate
Locus of control Experience Perceived ability
Leader Behaviour
Directive Achievement-oriented Participative Supportive
Outcomes
Performance
Satisfaction
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Burns (1978, historian/political scientist):
following exchange/transactional theories of leadership, Burns suggested that followers arecentral to leadership because a) they aresignificantly involved in the negotiationscentral to the transactions of power, and b)
they have minds of their own leaders transform groups in ethically and
morally uplifting ways.
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Warren Bennis and Burt Nanus, Leaders, 1985.
Leaders lead by pulling rather than pushing; by inspiring rather than ordering;
by creating achievable, though challenging,expectations and rewarding progress towardthem rather than by manipulating;
by enabling people to use their own initiativeand experiences rather than by denying or constraining their experiences and actions.
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Joseph C. Rost (1993) - Contemporary Theory
Rost's definition says that leadership is aninfluence relationship among leaders andfollowers who intend real changes that reflecttheir mutual purposes.
Leadership is what leaders and followers dotogether for the collective good.
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Contemporary Theory
Leadership is a relationship Characterized by collaboration, power sharing
facilitation, and empowerment.
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Contemporary Theory
There are 4 components each of which must be presentfor a relationship to be called leadership:
Relationship based on influence Leaders and followers are the people in the relationship Leaders and followers intend real (substantial) change The intended changes reflect their mutual purposes.
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Management vs. Leadership
Rost emphasizes that management should not bedenigrated to ennoble leadership:
People love to work for well -organizedmanagers who facilitate getting the job done
by coordinating the work of various people
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Leadership vs. Management according to Rost
Leadership Management
Influence relationship Authority relationship
Leaders and followers Managers and subordinates
Intend real changes Produce/sell goods/services
Intended changesreflect mutual purposes
Goods/services resultfrom coordinated activities
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John P. Kotter. Leading Change ,1996
establishing direction -- developing a vision of thefuture, and the strategies to create it;
aligning people -- communicating direction in wordsand deeds to everyone whose cooperation is needed tocreate the vision;
motivating and inspiring -- energizing people toovercome major political, bureaucratic, and resource
barriers to change by satisfying basic, but oftenunfulfilled, human needs.
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Can You Be a Better Follower?
Ineffective followers may be more of a handicap to anorganization than ineffective leaders.
What qualities do effective followers have? They manage themselves well. They are committed to a purpose outside themselves. They build their competence and focus their efforts for
maximum impact. They are courageous, honest, and credible.
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Characteristics of Transactional Leaders
Contingent reward Contracts exchange of rewards for effort, promises rewards for
good performance, recognizes accomplishments. Management by exception (active)
Watches and searches for deviations from rules and standards,takes corrective action.
Management by exception (passive)
Intervenes only if standards are not met. Laissez-Faire leader
Abdicates responsibilities, avoids making decisions.Source: B. M. Bass, From Transactional to Transformational Leadership: Learning to Sha re the Vision, Organizational Dynamics , Winter 1990, p. 22. Reprinted with permissionof the publisher. American Management Association, New York. All rights reserved.
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Characteristics of Transformational Leaders
Charisma Provides vision and sense of mission, instills pride, gains
respect and trust.
Inspiration Communicates high expectations, uses symbols to focus efforts,
expresses important purposes in simple ways.
Intellectual stimulation Promotes intelligence, rationality, and careful problem-solving.
Individualized consideration Gives personal attention, treats each employee individually,
coaches, advises.Source: B. M. Bass, From Transactional to Transformational Leadership: Learning to Sha re the Vision, Organizational Dynamics , Winter 1990, p. 22. Reprinted with permissionof the publisher. American Management Association, New York. All rights reserved.
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Charismatic Leadership
Leadership that critically examines the statusquo with a view to developing and articulatingfuture strategic goals or vision for theorganization, and then leading organizationalmembers to achieve these goals throughempowerment strategies.
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Practising to Be Charismatic
Project a powerful, confident, and dynamic presence.
Articulate an overarching goal. Communicate high-performance expectations
and confidence in others ability to meet theseexpectations.
Be sensitive to the needs of followers.
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Problems with the Charismatic Leader
When the events and rate of change for whichthey were needed are passed, they may be lesseffective Less of a listener Less able to respond to conflict
Single minded to a fault
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Dispersed Leadership
Mentoring Providing Team Leadership
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Providing Team Leadership
Leading teams requires new skills. e.g., patience to share information, trust others,
give up authority, and knowing when to intervene Leading teams requires new roles.
Liaisons with external constituencies Troubleshooters Conflict managers Coaches
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Team Leaders
Team leaders need to focus on two priorities: Managing the teams external boundary. Facilitating the team process.
Four specific roles Liaisons with external constituencies. Troubleshooters
Conflict managers Coaches
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Factors Calling for Self-Leadership
Reduced levels of supervision Offices in the home Teamwork Growth in service and professional
employment where individuals are oftenrequired to make decisions on the spot
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The reality of Self Leadership / Empowerment Dis-empowering organizations The empowerment blessing (Reading from Activation
by Ed Freedburg )
The shared management model Preparation Activation Evaluation
The Elements of Activation Self-confidence Self-direction Self-commitment
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How Do Leaders CreateSelf-Leaders?
Model self-leadership. Encourage employees to create self-set goals. Encourage the use of self-rewards to strengthen and
increase desirable behaviors. Create positive thought patterns.
Create a climate of self-leadership. Encourage self-criticism.
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Benefits of Leading Without Authority
Latitude for creative deviance Easier to raise questions.
Issue focus Freedom to focus on single issue, rather than
many issues.
Frontline information Often closer to the people who have theinformation.
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The Moral Foundation of Leadership Truth telling
Telling the truth as you see it, because it allows for a mutual, fair exchange to occur.
Promise keeping Leaders need to be careful of the commitments they make, and then
careful of keeping those promises. Fairness
This ensures that followers get their fair share for their contributions tothe organization.
Respect for the individual
Telling the truth, keeping promises, and being fair all show respect for the individual. Respect means treating people with dignity.
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Summary and Implications
1. What is the difference between a manager and aleader?
One theorist suggests that managers promote stabilitywhile leaders press for change.
2. Are there specific traits, behaviours, and situationsthat affect how one leads?
The research on this topic has been mixed. Contingencytheories suggest that leaders need to adjust their
behaviours, depending on the situation and employeeneeds.
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Summary and Implications
3. How does a leader lead with vision. Leaders that lead with vision are known as
transformational or charismatic leaders. They inspirefollowers to go beyond their own self-interests for thegood of the organization.
4. Can a person be an informal leader?
A person can be an informal leader. Such leadership cantake the form of mentoring. People can also be informalleaders of teams.
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Summary and Implications
5. What is self-leadership? With self-leadership, individuals and teams
set goals, plan and implement tasks, evaluate performance, solve their own problems, andmotivate themselves.
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Assignment
Read OB On the Edge about Trust Page 244 of text. In preparation for next Thursdays
Read Ch 12 Decision Making etc: