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CHAPTER 11 - LEADERSHIP and TRUST

LEARNING OUTCOMES

After reading this chapter students should be able to:

1. Define leader and leadership.

2. Compare and contrast early leadership theories.

3. Describe the four major contingency leadership theories.

4. Describe modern views of leadership and the issues facing today’s leaders.

5. Discuss trust as the essence of leadership.

Opening Vignette—Employees First

SUMMARY

HCL Technologies, the “employee first” philosophy has helped catapult the company from peripheral player to center stage in the intensely competitive IT industry. HCL Technologies is headquartered in Noida, India. CEO Vineet Nayar is committed to creating a company where the job of company leaders is to enable people to find their own destiny by gravitating to their strengths. His goals for the “Employee First” program include creating a unique employee experience, inverting the organizational structure, and increasing transparency. The workplace reforms the company implemented involved better communication with the CEO and a pay scheme that gives workers more job security. A major part of the workplace company referred to as “trust pay.” Unlike the standard IT industry practice of having 30 percent of its engineers’ pay variable (that is, dependent on performance), the company decided to pay higher fixed salaries that included all of what would have been the variable component—essentially trusting that employees would deliver performance meriting that pay. These changes have helped the company grow and, more importantly, become a talent magnet.

How does Nayar view leadership? Nayar also believes that leaders should be open to criticism. He volunteered to share the information from his 360-degree performance feedback for all employees to see. One year, his team of 81 managers who rated him gave him a 3.6 out of 5 for how well he keeps projects running on schedule, one of his lowest scores—and everyone at HCL was able to see the score. Nayar believed that it was a good way to increase his accountability as a leader to his employees. Such an environment requires a lot of trust between leaders and followers.

Teaching notes

1. Why is leadership important?2. What style of leadership is the best?3. How is trust established?

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I. WHO ARE LEADERS, AND WHAT IS LEADERSHIP?

A. Introduction

1. A leader is someone who can influence others and who has managerial authority.

2. Leadership is a process of leading a group and influencing that group to achieve its goals. It’s what leaders do.

II. WHAT DO EARLY LEADERSHIP THEORIES TELL US ABOUT LEADERSHIP?

A. What Traits do Leaders Have?

1. The average person’s definition of leadership.

a) Qualities such as intelligence, charisma, decisiveness, enthusiasm, strength, bravery, integrity, and self-confidence.

b) These responses represent, in essence, trait theories of leadership.

2. If the concept of traits were to prove valid, all leaders would have to possess specific characteristics.

3. Research efforts at isolating these traits resulted in a number of dead ends.

4. Attempts failed to identify a set of traits that would always differentiate leaders.

5. However, attempts to identify traits consistently associated with leadership have been more successful.

a) Seven traits on which leaders are seen to differ from non-leaders include drive, the desire to lead, honesty and integrity, self-confidence, intelligence, job-relevant knowledge. and extraversion (see Exhibit 11-1).

6. Explanations based solely on traits ignore situational factors.

a) Possessing the appropriate traits only makes it more likely that an individual will be an effective leader.

b) He or she still has to take the right actions.

7. A major movement away from trait theories began as early as the 1940s.

B. What Behaviors do Leaders Exhibit?

1. It was hoped that the behavioral theories would provide more definitive answers.

a) If behavioral studies were correct, we could train people to be leaders.

2. We shall briefly review three of the most popular studies:

a) Kurt Lewin’s studies at the University of Iowa.

b) the Ohio State group.

c) the University of Michigan studies.

C. What Did the University of Iowa Tell Us About Leadership Behavior?

1. One of the first studies; Kurt Lewin and his associates at the University of Iowa.

a) Three leadership behaviors, or styles: autocratic, democratic, and laissez-faire.

2. An autocratic style tends to centralize authority, dictate work methods, etc.

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Chapter 11 - Leadership and Trust

3. The democratic style tends to involve employees in decision making, delegates authority, encourages participation in deciding work methods, and uses feedback to coach employees.

a) Further classified: consultative and participative.

b) A democratic-consultative leader seeks input but makes the final decision.

c) A democratic-participative leader often allows employees to have a “say.”

4. The laissez-faire leader generally gives employees complete freedom.

5. Which one of the three leadership styles was most effective?

a) The laissez-faire style was ineffective on every performance criterion.

b) Democratic leadership style could contribute to both quantity and high quality of work.

c) Later studies of autocratic and democratic styles of leadership showed mixed results.

d) Group members’ satisfaction levels were generally higher under a democratic leader.

6. Tannenbaum and Schmidt developed a continuum of leader behaviors.

a) See Exhibit 11-2.

7. Tannenbaum and Schmidt proposed that managers look at forces within themselves, forces within the employees, and forces within the situation when choosing their style.

8. Suggested that managers should move toward more employee-centered styles in the long run.

a) Such behaviors would increase employees’ motivation, decision quality, teamwork, morale, and development.

D. What Did the Ohio State Studies Show?

1. The most comprehensive and replicated of the behavioral theories.

2. These studies sought to identify independent dimensions of leader behavior.

3. Beginning with over 1,000 dimensions, they eventually narrowed the list down to two categories: initiating structure and consideration.

a) Initiating structure refers to the extent to which a leader is likely to define and structure his or her role and those of employees in the search for goal attainment.

b) Consideration is defined as the extent to which a leader has job relationships characterized by mutual trust and respect for employees’ ideas and feelings.

4. Research found that a leader high in initiating structure and consideration achieved high employee performance and satisfaction more frequently than one who rated low on either consideration, initiating structure, or both.

5. However, leader behavior characterized as high on initiating structure led to greater rates of grievances, absenteeism, and turnover etc., for workers performing routine tasks.

6. Other studies found that high consideration was negatively related to performance ratings of the leader by his or her manager.


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E. How Did the University of Michigan Studies Differ?

1. Two dimensions of leadership behavior, employee-oriented and production-oriented.

a) Employee-oriented leaders emphasized interpersonal relations, took a personal interest in employees’ needs, and accepted individual differences among members.

b) The production-oriented leaders emphasized the technical aspects of the job, focused on accomplishing their group’s tasks, and regarded group members as a means to that end.

2. The Michigan researchers strongly favored leaders who were employee-oriented.

F. What Is the Managerial Grid?

1. A two-dimensional view of leadership style developed by Robert Blake and Jane Mouton.

a) Based on the styles of “concern for people” and “concern for production.”

b) Essentially represent the Ohio State dimensions of consideration and initiating structure and the Michigan dimensions of employee orientation and production orientation.

2. The grid depicted in Exhibit 11-3 has nine possible positions along each axis, creating 81 different positions into which a leader’s style may fall.

3. The grid shows the dominating factors in a leader’s thinking in regard to getting results.

a) The five key positions are focused on the four corners of the grid and a middle-ground area. (See Exhibit 11-3.)

4. Blake and Mouton concluded that managers perform best using a 9,9 style.

5. The grid offers only a framework for conceptualizing leadership style—it offers no answers to the question of what makes an effective leader.

Teaching Notes _________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

From the Past to the Present

Both the Ohio State and Michigan studies have added a lot to our understanding of effective leadership. The research showed, both leader behavior dimensions—job-centered and employee-centered in the Michigan studies, and initiating structure and consideration in the Ohio State studies— are necessary for effective leadership. Leaders are expected to focus on both the task and on the people he or she is leading. Finally, these early behavioral studies were important for the “systematic methodology they introduced and the increased awareness they generated concerning the importance of leader behavior.” The behavioral theories “served as a springboard for the leadership research that followed.”



III. WHAT DO THE CONTINGENCY THEORIES OF LEADERSHIP TELL US?

A. Introduction

1. Predicting leadership success involved something more complex than isolating a few traits or preferable behaviors.

2. It was one thing to say that leadership effectiveness depended on the situation and another to be able to isolate situational conditions.

B. What was the First Comprehensive Contingency Model?

1. The first comprehensive contingency model for leadership was Fiedler's Model.

2. Effective group performance depends on the proper match between the leader’s style of interaction and the degree to which the situation gives control and influence to the leader. See Exhibit 11-4.

3. Fiedler developed an instrument, the least-preferred co-worker (LPC) questionnaire, that measures the leader’s behavioral orientation—either task oriented or relationship oriented.

a) He isolated three situational criteria—leader-member relations, task structure, and position power—that can be manipulated to create the proper match with the behavioral orientation of the leader.

b) This contingency leadership model is an outgrowth of trait theory.

c) Fiedler, however, attempted to isolate situations, relating his personality measure to his situational classification, and then predicting leadership effectiveness.

4. Fiedler argued that leadership style is innate to a person—you can’t change your style.

5. It is necessary to match the leader with the situation based on three criteria.

a) Leader-member relations—The degree of confidence, trust, and respect subordinates have in their leader.

b) Task structure—The degree to which the job assignments of subordinates are structured or unstructured.

c) Position power—The degree of influence a leader has over power variables such as hiring, firing, discipline, promotions, and salary increases.

6. The next step is to evaluate the situation in terms of these three contingency variables.

a) The better the leader-member relations, the more highly structured the job, and the stronger the position power, the more control or influence the leader has.

b) Fiedler concluded that task-oriented leaders perform best in situations that are very favorable or very unfavorable to them.

c) A moderately favorable situation, however, is best handled through relationship-oriented leadership.

7. Problems exist with the Fiedler model.

a) The LPC is not well understood and scores are not stable over time.

b) The contingency variables are complex and difficult for practitioners to assess.


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C. How do Followers' Willingness and Ability Influence Leaders?

1. Paul Hersey and Kenneth Blanchard developed the Situational Leadership model.

a) Called situational leadership (SL), it shows how a leader should adjust leadership style to reflect what followers need.

2. A contingency theory that focuses on the followers.

a) Successful leadership is contingent on the follower’s level of readiness.

3. Why focus on the followers? And what do they mean by the term readiness?

a) This emphasis reflects the reality that it is the followers who accept or reject the leader.

b) Regardless of what the leader does, effectiveness depends on the actions of his or her followers.

4. The term “readiness” refers to the extent that people have the ability and the willingness to accomplish a specific task.

5. Hersey and Blanchard identify four specific behaviors.

6. Telling (high task–low relationship): The leader defines roles and tells people what, how, when, and where to do various tasks.

Selling (high task–high relationship): The leader provides both directive and supportive behavior.

Participating (low task–high relationship): The leader and followers share in decision making; the main role of the leader is facilitating and communicating.

Delegating (low task–low relationship): The leader provides little direction or support.

7. The most effective behavior depends on a follower’s ability and motivations.

a) If a follower is unable and unwilling, the leader needs to display high task orientation.

b) At the other end of the readiness spectrum, if followers are able and willing, the leader doesn’t need to do much.

8. SLT has an intuitive appeal—it acknowledges the importance of followers and builds on the idea that leaders can compensate for the lack of ability and motivation of their followers.

9. Research efforts to test and support the theory have generally been mixed.

D. How Participative Should a Leader Be?

1. Back in 1973, Victor Vroom and Phillip Yetton developed a leader-participation model.

a) It related leadership behavior and participation to decision making.

2. Recognizing that task structures have varying demands for routine and nonroutine activities, these researchers argued that leader behavior must adjust to reflect the task structure.

a) Vroom and Yetton’s model was normative—it provided a sequential set of rules to be followed in determining the form and amount of participation in decision making in different types of situations.



3. The model was a decision tree incorporating seven contingencies and five alternative leadership styles.

a) More recent work by Vroom and Arthur Jago revised that model.

4. The new model retains the same five alternative leadership styles but expands the contingency variables to twelve. (See Exhibit 11-5.)

5. Research testing the original leader-participation model was very encouraging.

a) But the model is far too complex for the typical manager to use regularly.

b) The model has provided us with some solid, empirically supported insights into key contingency variables related to leadership effectiveness.

c) The model confirms that leadership research should be directed at the situation rather than at the person.

d) Vroom, Yetton, and Jago argue against the notion that leader behavior is inflexible.

E. How Do Leaders Help Followers?

1. One of the most respected approaches to leadership is path-goal theory.

2. Developed by Robert House, a contingency model of leadership that extracts key elements from the Ohio State leadership research and the expectancy theory of motivation.

3. The essence of the theory: the leader’s job is to assist followers in attaining their goals and to ensure that their goals are compatible with the overall objectives of the group or organization.

4. A leader’s behavior is acceptable to employees to the degree that they view it as an immediate source of satisfaction or as a means of future satisfaction.

5. A leader’s behavior is motivational to the degree that it

a) makes employee need-satisfaction contingent on effective performance.

b) provides the coaching, guidance, support, and reward necessary for effective performance.

6. House identified four leadership behaviors:

a) The directive leader tells employees what is expected of them, schedules work, and gives specific guidance as to how to accomplish tasks. It parallels initiating structure.

b) The supportive leader is friendly and shows concern for the needs of employees. It is essentially synonymous with the dimension of consideration.

c) The participative leader consults with employees and uses their suggestions before making a decision.

d) The achievement-oriented leader sets challenging goals and expects employees to perform at their highest levels.

7. In contrast to Fiedler, House assumes that leaders are flexible.

a) Path-goal theory implies that the same leader can display any or all leadership styles, depending on the situation.


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8. Exhibit 11-6, path-goal theory proposes two classes of contingency variables:

a) Those in the environment that are outside the control of the employee (task structure, the formal authority system, and the work group).

(1) Environmental factors determine leader behavior required if employee outcomes are to be maximized.

b) Those that are part of the personal characteristics of the employee (locus of control, experience, and perceived ability).

(1) Personal characteristics determine how the environment and leader behavior are interpreted.

c) The theory proposes that leader behavior will be ineffective when it is redundant to sources of environmental structure or incongruent with subordinate characteristics.

9. Research to validate path-goal predictions is encouraging, although not all support is positive.

a) The majority of the evidence supports the logic underlying the theory.

Teaching Notes _________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

IV. WHAT IS LEADERSHIP LIKE TODAY?

A. What Do the Three Contemporary Views of Leadership Tell Us?

1. Leaders who primarily use social exchanges (or transactions) are called transactional leaders. They guide or motivate followers to work toward established goals by exchanging rewards for their productivity.

2. Transformational leaders inspire followers to transcend their own self-interests for the good of the organization and are capable of having a profound and extraordinary effect on his or her followers.

a) Transformational leaders pay attention to the concerns and developmental needs of individual followers; they change followers’ awareness of issues by helping those followers to look at old problems in new ways; and they are able to excite, arouse, and inspire followers to put out extra effort to achieve group goals.

3. Transactional and transformational leadership are not opposing approaches.

4. Transformational leadership is built on transactional leadership.

a) Transformational leadership produces higher levels of employee effort and performance.

b) It is more than charisma.

c) The transformational leader will attempt to instill in followers the ability to question not only established views but eventually those established by the leader.

5. The evidence supporting the superiority of transformational leadership over the transactional variety is overwhelmingly impressive.



6. In summary, the overall evidence indicates that transformational leadership is more strongly correlated with lower turnover rates, higher productivity, and higher employee satisfaction.

B. How do Charismatic and Visionary Leaders Differ?

1. Charismatic leadership theory is an extension of attribution theory.

a) It says that followers make attributions of heroic or extraordinary leadership abilities when they observe certain behaviors.

2. Several authors have attempted to identify personal characteristics of the charismatic leader.

a) Robert House has identified three: extremely high confidence, dominance, and strong convictions.

b) Warren Bennis found that they had four common competencies: they had a compelling vision or sense of purpose; they could communicate that vision in clear terms that their followers could readily identify with; they demonstrated consistency and focus in the pursuit of their vision; and they knew their own strengths and capitalized on them.

c) Jay Conger and Rabindra Kanungo at McGill University—charismatic leaders have an idealized goal that they want to achieve and a strong personal commitment to that goal; they are perceived as unconventional; they are assertive and self-confident; and they are perceived as agents of radical change rather than as managers of the status quo.

3. Charismatic leaders influence followers by a four-step process

a) Stating an appealing vision

b) Communicating high expectations and expressing confidence in followers

c) Conveying a new set of values and role models behaviors

d) Making self-sacrifices and engaging in unconventional behavior

4. Most experts believe individuals can be trained to exhibit charismatic behaviors.

5. There is an increasing body of research that shows impressive correlations between charismatic leadership and high performance and satisfaction among followers.

a) Charismatic leadership may be most appropriate when the follower’s task has an ideological component.

b) Second, charismatic leaders may be ideal for pulling an organization through a crisis but become a liability to an organization once the crisis and the need for dramatic change subside.

6. Visionary leadership goes beyond charisma.

7. Visionary leadership is the ability to create and articulate a realistic, credible, attractive vision of the future for an organization or organizational unit, that grows out of and improves upon the present.

8. A vision differs from other forms of direction setting in several ways:


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a) “A vision has clear and compelling imagery that offers an innovative way to improve, which recognizes and draws on traditions, and connects to actions that people can take to realize change.”

b) Vision taps people’s emotions and energy.

9. The key properties of a vision seem to be inspirational possibilities that are value centered, realizable, with superior imagery and articulation.

a) Visions should be able to create possibilities that are inspirational, unique, and offer a new order that can produce organizational distinction.

b) Desirable visions fit the times and circumstances and reflect the uniqueness of the organization.

c) People in the organization must also believe that the vision is attainable.

10. Examples of visions.

a) Rupert Murdoch had a vision of the future of the communications industry by combining entertainment and media.

b) Mary Kay Ash’s vision of women as entrepreneurs selling products that improved their self image gave impetus to her cosmetics company.

c) Michael Dell has created a vision of a business that allows Dell Computer to sell and deliver a finished PC directly to a customer in fewer than eight days.

11. What skills do visionary leaders exhibit?

a) The ability to explain the vision to others.

b) The ability to express the vision not just verbally but through the leader’s behavior.

c) The third skill is being able to extend the vision to different leadership contexts.

C. What About Leaders and Teams?

1. Leadership is increasingly taking place within a team context.

2. As teams grow in popularity, the role of the team leader takes on heightened importance.

3. Many leaders are not equipped to handle the change to teams.

4. One prominent consultant estimates: 15 percent of managers are natural team leaders; another 15 percent could never lead a team because it runs counter to their personality.

5. The challenge for most managers is in becoming an effective team leader.

a) Effective leaders have mastered the difficult balancing act of knowing when to leave their teams alone and when to intercede.

b) New team leaders may try to retain too much control or they may abandon their teams.

6. A study of 20 organizations that had reorganized themselves around teams found certain common responsibilities that all leaders had to assume.

a) These included coaching, facilitating, handling disciplinary problems, reviewing team/individual performance, training, and communication.

7. A more meaningful way to describe the team leader’s job is to focus on two priorities: managing the team’s external boundary and facilitating the team process.

(See Exhibit 11-7.)



8. First, team leaders are liaisons with external constituencies.

a) The leader represents the team to other constituencies, secures needed resources, clarifies others’ expectations of the team, gathers information from the outside, and shares this information with team members.

9. Second, team leaders are troubleshooters.

a) When the team has problems and asks for assistance, team leaders sit in on meetings and help try to resolve the problems.

b) This rarely relates to technical or operation issues.

10. Third, team leaders are conflict managers.

a) When disagreements surface, they help process the conflict. What’s the source of the conflict? Who is involved? What are the issues? What resolution options are available? What are the advantages and disadvantages of each?

11. Finally, team leaders are coaches.

a) They clarify expectations and roles, teach, offer support, cheerlead, and whatever else is necessary to help team members improve their work performance.

Right orWrong?

The definition of “friend” on social networking sites such as Facebook and MySpace is so broad that even strangers may tag you. But it doesn’t feel weird because nothing really changes when a stranger does this. However, what if your boss, who isn’t much older than you are, asks you to be a friend on these sites? What then?

1. What are the implications if you refuse the offer?2. What are the implications if you accept?3. What ethical issues might arise because of this?4. What would you do?

D. What Issues do Today's Leaders Face?

1. Technology continues to change rapidly—almost daily

2. Business costs continue to rise.

3. Empowerment involves increasing the decision-making discretion of workers.

4. One reason more companies are empowering employees is the need for quick decisions by those people who are most knowledgeable about the issues—often those at lower organizational levels.


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MANAGING DIVERSITY | Do Men and Women Lead Differently?

Summary

Are there differences in leadership styles based on gender? The evidence indicates that the two sexes are more alike than different in how they lead. Much of this similarity is based on the fact that leaders, regardless of gender, perform similar activities in influencing others. The most common difference lies in leadership styles. Women tend to use a more democratic style, influence others best through their “ability to be charmingly influential.” Men, on the other hand, tend to typically use a task-centered leadership style, relying on positional power. But surprisingly, even this difference is blurred. All things considered, when a woman leads in a traditionally male-dominated job, she tends to lead in a manner that is more task-centered.

Further compounding this issue are the changing roles of leaders in today’s organizations. With an increased emphasis on teams, employee involvement, and interpersonal skills, etc., leaders need to be more sensitive to their followers’ needs, be more open, and so on; many of these are behaviors that women have typically grown up developing.

1. So what do you think? Is there a difference between the sexes in terms of leadership styles?2. Do men or women make better leaders? Would you prefer to work for a man or a woman? What’s

your opinion? Explain.

Teaching notes

1. Taking note of the author’s opening statements, monitor the discussion for the level of feelings generated. This discussion could easily become heated.

2. Consider using one or more team exercises in class to create a basis for the discussion.3. Placing the students in teams, choosing women as leaders for some teams and men as leaders for

other teams.4. After the exercise, process their experience as teams and see what differences, if any, that they

experienced.5. Ultimately, be sure to discuss what the point is. Does gender matter? If so, why?

E. Does National Culture Affect Leadership?

1. National culture is an important situational factor determining which leadership style will be most effective.

a) We propose that you consider it as another contingency variable.

2. National culture affects leadership style by way of the follower.

3. Leaders’ choice of styles is constrained by the cultural conditions that their followers have come to expect. See Exhibit 11-8.

a) Korean leaders are expected to be paternalistic toward employees.

b) Arab leaders who show kindness or generosity without being asked to do so are seen by other Arabs as weak.

c) Japanese leaders are expected to be humble and speak infrequently.

d) Scandinavian and Dutch leaders who single out individuals with public praise are likely to embarrass those individuals rather than energize them.

4. Most leadership theories were developed in the United States, using U.S. subjects.



a) They emphasize follower responsibilities rather than rights; assume hedonism rather than commitment to duty or altruistic motivation; assume centrality of work and democratic value orientation; and stress rationality rather than spirituality, religion, or superstition.

5. As a guide for adjusting your leadership style, you might consider the value dimensions of national culture presented in Chapter 2.

a) Manipulative or autocratic style is compatible with high power distance (Arab, Far Eastern, and Latin countries).

b) Power distance rankings should also be good indicators of employee willingness to accept participative leadership.

c) Participation is likely to be most effective in such low power distance cultures (Norway, Finland, Denmark, and Sweden).

F. How Does Emotional Intelligence Affect Leadership?

1. Recent studies indicating that EI—more than I.Q., expertise, or any other single factor—is the best predictor of who will emerge as a leader.

a) I.Q. and technical skills are “threshold capabilities.”

b) It’s the possession of the five components of emotional intelligence—self-awareness, self-management, self-motivation, empathy, and social skills—that allows an individual to become a star performer.

2. Evidence indicates that the higher the rank of a person considered to be a star performer, the more that EI capabilities surface as the reason for his or her effectiveness.

a) When star performers were compared with average ones in senior management positions, nearly 90 percent of the difference in their effectiveness was attributable to EI factors rather than basic intelligence.

b) Example, the maturing of Rudolph Giuliani’s leadership effectiveness.

c) EI appears to be especially relevant in jobs that demand a high degree of social interaction.

d) EI should probably be added to the list of traits associated with leadership.

Technology and the Manager’s JobVirtual Leadership

Most research on leadership has been done with face-to-face interaction, not virtual. Non-verbal communication cannot be viewed, but managers still have choices regarding their words and structure in digital communication. Managers need to 'read between the lines' when communicating in a virtual environment. Writing skills will likely become an extension of interpersonal skills.

Teaching Notes _________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________


Part 4 – Leading

V. WHY IS TRUST THE ESSENCE OF LEADERSHIP?

A. What is Trust?

1. Trust is a positive expectation that another will not act opportunistically.

a) Most important, trust implies familiarity and risk.

2. Trust is a history-dependent process based on relevant but limited samples of experience.

a) It takes time to form, building incrementally and accumulating. (See Developing Your Trust-Building Skill.)

3. Trust is defined as the belief in the integrity, character and ability of the leader.

4. Trust involves making oneself vulnerable.

a) By its very nature, trust provides the opportunity to be disappointed or to be taken advantage of.

b) But trust is not taking risk per se; rather it is a willingness to take risk.

5. What are the key dimensions that underlie the concept of trust?

6. Recent evidence has identified five: integrity, competence, consistency, loyalty, and openness.

a) Integrity refers to honesty, conscientiousness, and truthfulness.

(1) This one seems to be most critical when someone assesses another’s trustworthiness.

b) Competence encompasses an individual’s technical and interpersonal knowledge and skills.

c) Consistency relates to an individual’s reliability, predictability, and good judgment in handling situations.

d) Loyalty is the willingness to protect and save face for another person.

e) The final dimension of trust is openness—can you rely on the person to give you the full truth?

B. Why Is it Important that Followers Trust Their Leaders?

1. Trust appears to be a primary attribute associated with leadership.

2. Research has shown that trust in leadership is significantly related to positive job outcomes including job performance, organizational citizenship behavior, job satisfaction, and organizational commitment

3. Part of the leader’s task has been, and continues to be, working with people to find and solve problems, but whether leaders gain access to the knowledge and creative thinking they need to solve problems depends on how much people trust them.

4. When followers trust a leader, they are willing to be vulnerable to the leader’s actions.

5. Honesty consistently ranks at the top of most people’s list of characteristics they admire in their leaders.

6. Now, more than ever, managerial and leadership effectiveness depends on the ability to gain the trust of followers.



7. In times of change and instability, people turn to personal relationships for guidance, and the quality of these relationships is largely determined by level of trust.

Developing Your Trust-Building Skill

About the Skill

Given the importance trust plays in the leadership equation, today’s leaders should actively seek to build trust with their followers. Here are some suggestions for achieving that goal.

Steps in Practicing the Skill

1. Practice openness. 2. Be fair. 3. Speak your feelings.4. Tell the truth.5. Be consistent.6. Fulfill your promises. 7. Maintain confidences.8. Demonstrate confidence.

The Situation

You are a new manager. Your predecessor, who was very popular and who is still with your firm, concealed from your team how far behind they are on their goals this quarter. As a result, your team members are looking forward to a promised day off that they are not entitled to and will not be getting.

It’s your job to tell them the bad news. How will you do it?

Practicing the Skill

Brainstorm with students as a class on how to give the bad news.

Once a strategy is developed, ask for volunteers to come forward and “fish bowl” it. Role play the manager and an employee in front of the class.

After the “fish bowl,” ask students how they felt, if there is some way they would improve the process.

Have the student(s) with ideas for improving the process come up front and demonstrate.

Teaching tips

While this exercise is mostly about individuals’ feelings and whether or not they trust someone depending on how bad news is delivered, instructors can steer students to the steps of trust building above. Students can consider which steps were exhibited by the manager, and how the steps that were not included could be integrated into the news delivery.

C. A Final Thought Regarding Leadership.

1. The belief that a particular leadership style will always be effective regardless of the situation may not be true.

2. Data from numerous studies demonstrate that, in many situations, any behaviors a leader exhibits are irrelevant.

3. Certain individual, job, and organizational variables can act as substitutes for leadership, or neutralize the leader’s ability to influence his or her followers.

4. Characteristics of employees such as experience, training, professional orientation, or indifference toward organizational regards can neutralize the effect of leadership.


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5. Jobs that are inherently unambiguous and routine or that are intrinsically satisfying may place fewer demands on the leadership variable.

6. Organizational characteristics such as explicit formalized goals, rigid rules and procedures, and cohesive work groups can substitute for leadership.

Teaching Notes _________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

REVIEW AND APPLICATIONS

CHAPTER SUMMARY11.1 Define leader and leadership. A leader is someone who can influence others and who has

managerial authority. Leadership is a process of leading a group and influencing that group to achieve its goals. Managers should be leaders because leading is one of the four management functions.

11.2 Compare and contrast early leadership theories. Early attempts to define leader traits were unsuccessful although later attempts found seven traits associated with leadership. The University of Iowa studies explored three leadership styles. The only conclusion was that group members were more satisfied under a democratic leader than under an autocratic one. The Ohio State studies identified two dimensions of leader behavior—initiating structure and consideration. A leader high in both those dimensions at times achieved high group task performance and high group member satisfaction, but not always. The University of Michigan studies looked at employee-oriented leaders and production-oriented leaders. They concluded that leaders who were employee oriented could get high group productivity and high group member satisfaction. The managerial grid looked at leaders’ concern for production and concern for people and identified five leader styles. Although it suggested that a leader who was high in concern for production and high in concern for people was the best, there was no substantive evidence for that conclusion. As the behavioral studies showed, a leader’s behavior has a dual nature: a focus on the task and a focus on the people.

11.3 Describe the four major contingency leadership theories. Fiedler’s model attempted to define the best style to use in particular situations. He measured leader style—relationship oriented or task oriented— using the least-preferred co-worker questionnaire. Fiedler also assumed a leader’s style was fixed. He measured three contingency dimensions: leader-member-relations, task structure, and position power. The model suggests that task-oriented leaders performed best in very favorable and very unfavorable situations, and relationship-oriented leaders performed best in moderately favorable situations. Hersey and Blanchard’s situational leadership theory focused on followers’ readiness. They identified four leadership styles: telling (high task–low relationship), selling (high task–high relationship),participating (low task–high relationship), and delegating (low task–low relationship). They also identified four stages of readiness: unable and unwilling (use telling style); unable but willing (use selling style); able but unwilling (use participative style); and able and willing (use delegating style). The leader-participation model relates leadership behavior and participation to decision making. It uses a decision tree format with seven contingencies and five alternative leadership styles. The path-goal model developed by Robert House identified four leadership behaviors: directive, supportive, participative, and achievement-oriented. He assumes that a leader can and should be able to use any of these styles. The two situational contingency variables were found in the environment and in the follower. Essentially the path-goal model says that a leader



should provide direction and support as needed; that is, structure the path so the followers can achieve goals.

11.4 Describe modern views of leadership and the issues facing today’s leaders. A transactional leader exchanges rewards for productivity where a transformational leader stimulates and inspires followers to achieve goals. A charismatic leader is an enthusiastic and self-confident leader whose personality and actions influence people to behave in certain ways. People can learn to be charismatic. A visionary leader is able to create and articulate a realistic, credible, and attractive vision of the future. A team leader has two priorities: manage the team’s external boundary and facilitate the team process. Four leader roles are involved: liaison with external constituencies, troubleshooter, conflict manager, and coach. The issues facing leaders today include employee empowerment, national culture, and emotional intelligence. As employees are empowered, the leader’s role tends to be one of not leading. As leaders adjust their style to the situation, one of the most important situational characteristics is national culture. Finally, EI is proving to be an essential element in leadership effectiveness.

11.5 Discuss trust as the essence of leadership. The five dimensions of trust include integrity, competence, consistency, loyalty, and truthfulness. Integrity refers to one’s honesty and truthfulness. Competence involves an individual’s technical and interpersonal knowledge and skills. Consistency relates to an individual’s reliability, predictability, and good judgment in handling situations. Loyalty is an individual’s willingness to protect and save face for another person. Openness means that you can rely on the individual to give you the whole truth.

To check your understanding of objectives 11.1 – 11.5, go to mymanagementlab.com and try the chapter questions.

UNDERSTANDING THE CHAPTER

1. Discuss the strengths and weaknesses of the trait theory.

Answer: The average person’s definition of leadership is essentially a trait approach. If the concept of traits were to prove valid, all leaders would have to possess specific characteristics. Research efforts at isolating these traits resulted in a number of dead ends. Attempts failed to identify a set of traits that would always differentiate leaders. Six traits on which leaders are seen to differ from non-leaders include drive, the desire to lead, honesty and integrity, self-confidence, intelligence, and job-relevant knowledge. These traits are briefly described in Exhibit 11-1.

Explanations based solely on traits ignore situational factors. Possessing the appropriate traits only makes it more likely that an individual will be an effective leader. He/she still has to take the right actions.

2. What would a manager need to know to use Fiedler’s contingency model? Be specific.

Answer: The Fiedler model was the first comprehensive contingency model for leadership. Effective group performance depends on the proper match between the leader’s style of interaction and the degree to which the situation gives control and influence to the leader. He isolated three situational criteria—leader-member relations, task structure, and position power—that can be manipulated to create the proper match with the behavioral orientation of the leader. This contingency leadership model is an outgrowth of trait theory. Fiedler believed that an individual’s basic leadership style is a


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key factor. Fiedler argued that leadership style is innate to a person—you can’t change your style. It is necessary to match the leader with the situation based on three criteria.

Leader-member relations—The degree of confidence, trust, and respect subordinates have in their leader.

Task structure—The degree to which the job assignments of subordinates are structured or unstructured.

Position power—The degree of influence a leader has over power variables such as hiring, firing, discipline, promotions, and salary increases.

3. Do you think that most managers in real life use a contingency approach to increase their leadership effectiveness? Discuss.

Answer: Yes, theories like Path Goal, which states that the leader’s job is to assist followers in attaining their goals and to provide direction or support needed to ensure that their goals are compatible with the goals of the group or organization, can be used by managers to increase their leadership effectiveness. Developed by Robert House, Path Goal theory is a contingency model of leadership that extracts key elements from the Ohio State leadership research and the expectancy theory of motivation. The essence of the theory—the leader’s job is to assist followers in attaining their goals and to ensure that their goals are compatible with the overall objectives of the group or organization. A leader’s behavior is motivational to the degree that it: 1) makes employee need-satisfaction contingent on effective performance and 2) provides the coaching, guidance, rewards, etc., necessary for effective performance. See Exhibit 11-6, path-goal theory proposes two classes of contingency variables: 1) Those in the environment that are outside the control of the employee—environmental factors determine leader behavior required as a complement. (2) Those that are part of the personal characteristics of the employee—personal characteristics determine how the environment and leader behavior are interpreted.

4. “All managers should be leaders, but not all leaders should be managers.” Do you agree or disagree this statement? Support your position.

Answer: The ability to influence others outside of one’s own authority and to perform beyond expectations are essential to high performing organizations and are characteristic of leaders, not managers. Hence, if a manager can do this, so much the better. However, leadership is a skill or ability set and having that set does not mean the individual has the other necessary characteristics to manage.

5. Do you think trust evolves out of an individual’s personal characteristics or out of specific situations? Explain.

Answer: Both, trust is in a person given certain circumstances. Some individuals are always trusted regardless of circumstances; others can be trusted to respond in predictable ways in different circumstances.

6. Do followers make a difference in whether a leader is effective? Discuss.

Answer: Student answers may vary. Followers are an integral piece in the leadership puzzle. Followers must believe in the leader's vision and help execute the strategies. They need to be effective communicators and dedicated to the vision and mission of the organization and its leadership.



7. How can organizations develop effective leaders?

Answer: From the early stages of recruiting to training and development, organizations need to identify future leaders early in their talent pool and then strategically integrate them in the succession plan. It is an imperative for organizations to maximize their human capital and consistently develop leaders at every level. Companies must cultivate leaders for successful organizations.

8. When might leaders be irrelevant?

Answer: Data from numerous studies demonstrate that, in many situations, any behaviors a leader exhibits are irrelevant. Certain individual, job, and organizational variables can act as “substitutes for leadership,” negating the influence of the leader. Characteristics of employees such as experience, training, “professional” orientation, or need for independence can neutralize the effect of leadership. Jobs that are inherently unambiguous and routine or that are intrinsically satisfying may place fewer demands on the leadership variable. Organizational characteristics as explicit formalized goals, rigid rules and procedures, or cohesive work groups can act in the place of formal leadership.

UNDERSTANDING YOURSELF

Do Others See Me as Trustworthy?

Effective leaders have built a trusting relationship between themselves and those they seek to lead. This instrument provides you with insights into how trustworthy others are likely to perceive you.

INSTRUMENT For each of the nine statements, respond using one of these answers:

1 = Strongly disagree2 = Disagree3 = Slightly disagree4 = Neither agree nor disagree5 = Slightly agree6 = Agree7 = Strongly agree

I am seen as someone who:1. Is reliable. 1 2 3 4 5 6 72. Is always honest. 1 2 3 4 5 6 73. Succeeds by stepping on other people. 1 2 3 4 5 6 74. Tries to get the upper hand. 1 2 3 4 5 6 75. Takes advantage of others’ problems. 1 2 3 4 5 6 76. Keeps my word. 1 2 3 4 5 6 77. Doesn’t mislead others. 1 2 3 4 5 6 78. Tries to get out of my commitments. 1 2 3 4 5 6 79. Takes advantage of people who are vulnerable. 1 2 3 4 5 6 7

SCORING KEY To calculate your trustworthiness score, add up responses to items 1, 2, 6, and 7. For the other five items, reverse the score (7 becomes 1, 6 becomes 2, etc.). Add up the total.

ANALYSIS AND INTERPRETATION Your total trustworthiness score will range between 9 and 63. The higher your score, the more you’re perceived as a person who can be trusted. Scores of 45 or higher suggest others are likely to perceive you as trustworthy; while scores below 27 suggest that people will not see you as someone who can be trusted. If you want to build trust with others, look at the behaviors


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this instrument measures. Then think about what you can do to improve your score on each. Examples might include: being more open, speaking your feelings, giving generous credit to others, telling the truth, showing fairness and consistency, following through on promises and commitments, and maintaining confidences.

Overview

The link between leadership and trust is explored in this exercise. It would be interesting to administer this exercise to all the managers in a large-scale organization and see what would happen. We know from other research that those who do best in an organization are those that are good at networking and understand the use of power. Being a good manager and/or leader is not always the key to promotion or rewards.

Trust is an interesting word in terms of organizations in this country. We are the most individualistic nation on earth. We tend to look out for “number one.” Therefore, trust can be a scarce commodity in organizations, especially during turbulent and changing times.

As a point in fact, the downsizing of American companies has led to a lack of trust between and among managers and employees. The raging stock market has made some rich, many poorer, and some clearly missing out on the “money train.” In 2000, CEOs averaged pay of $13.1 million, despite downturns and layoffs in many companies in the first part of 2001. For example, Michael Eisner was paid $699.1 million, although his company (Disney) did not do well in terms of either return to the shareholder or average return on equity. This compensation trend continues to widen “still further the yawning gap between the boss and the rank and file” (Business Week, April 16, 2001, p. 78). These elements do not engender trust in the workplace and have only increased in disparity over the years.

Obviously, some degree of trust is needed in organizations to function. There is trust in many organizations on a more micro, departmental, or unit scale. However, it will be interesting to continue to see how trust grows or deteriorates in the coming years.

Teaching Notes

It might be a good time to discuss the concept of trust is and how the context surrounding it has changed over time. Is trust the same now as it was in the time of the Greeks? Is trust a key value in capitalism? Is trust the same now as it was in the 1940s? How does trust manifest itself in organizations? How important is it for the manager to trust the employees and vice versa? Who do you trust at work and why? What happens when trust is violated?

Exercises

1. Defining Trust. Ask the students to interview 20 people randomly, asking them what the concept of trust means to them. Then have the students report back to the class and compare their findings.

Learning Objective(s): To illustrate the wide variety of definitions of trust.

Preparation/Time Allotment: Students should have at least a week to do this exercise.

Advantages/Disadvantages/Potential Problems: You can then have the students discuss and summarize their findings in small groups, or do short presentations to the class. Ask them how the various definitions might affect people in organizations. What type of leader do the students think would match with a given view of trust?



2. Trust American-Style. Have a discussion or debate on the level of trust in American organizations. Then have the students research trust in other cultures and compare the results.

Learning Objective(s): To illustrate how trust is a cross-culture variable.

Preparation/Time Allotment: Give the students a couple of weeks to research the topic of trust. They can do this in small groups, and present the findings to the class. You might want to assign the groups certain cultures to prevent duplication.

Advantages/Disadvantages/Potential Problems: Students should have a fundamental background in international business prior to doing this research. If they do not, have them stick to examining American organizations.

FYIA (For Your Immediate Action)Preferred Bank Card Inc.

To: Pat Muenks, VP Employee RelationsFrom: Jan Plemmons, Customer Service DirectorSubject: Leadership Training I agree completely with your recommendation that we need a leadership training program for our customer service team leaders. These leaders struggle with keeping our customer service reps focused on our goal of providing timely, accurate, and friendly service to our bank card holders who call in with questions or complaints.

Can you put together a one-page proposal that describes the leadership topics you think should be covered. Also, give me some suggestions for how we might present the information in a way that would be interesting.


Part 4 – Leading

Case ApplicationGrowing Leaders

How important are excellent leaders to organizations? A company has to cultivate leaders who have the skills and abilities to help it survive and thrive. 3M has its own farm system., except its farm system is designed to develop company leaders. 3M’s leadership development program is so effective that in 2009 Chief Executive magazine and Hay Consulting Group named the company the best at developing future leaders. Former CEO Jim McNerney, agreed on six “leadership attributes” that they believed were essential for the company to become skilled at executing strategy and being accountable. Those six attributes included: the ability to “chart the course; energize and inspire others; demonstrate ethics, integrity, and compliance; deliver results; raise the bar; and innovate resourcefully.

Buckley said that he believes there is a difference between leaders and managers. “A leader is as much about inspiration as anything else. A manager is more about process.” He believes that the key to developing leaders is to focus on those things that can be developed— like strategic thinking.

Finally, when asked about his own leadership style. Buckley responded that, “The absolutely best way for me to be successful is to have people working for me who are better. Having that kind of emotional self-confidence is vital to leaders. You build respect in those people because you admire what they do. Having built respect, you build trust.

Discussion Questions

1. What do you think about Buckley’s statement that leaders and managers differ? Do you agree? Why or why not?

Answer: Student answers may vary, but they are different. Leaders and managers differ in a number of ways. Leaders have a long term perspective, they are the visionaries, managers are concerned about the day-to-day activities, the processes, etc.

2. What leadership models/theories/issues do you see in this case? List and describe.

Answer: Trait theory is the first answer since the attributes selected are base on leadership traits. Contingency and situational challenges can also play a part.

3. Take each of the six leadership attributes that the company feels is important. Explain what you think each one involves. Then discuss how those attributes might be developed and measured.

Answer: The attributes are chart the course; energize and inspire others; demonstrate ethics, integrity, and compliance; deliver results; raise the bar; and innovate resourcefully. Students can add their own ideas to define each one and design a program to develop and measure each one. Some of these are similar to other leadership inventories like Kouzes and Posner's Leadership Challenge.

4. What did this case teach you about leadership?

Answer: Student answers will vary. This case highlights the essential nature of leadership and the success that results from individual leaders. True leaders inspire and literally bring life to their respective organizations. The attributes of trust and respect are imperatives while the idea of surrounding yourself with bright and talented individuals often breeds success. A sound strategy is important with great people to execute it. Traits like emotional intelligence will contribute to good leadership.


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