Chapter Ten Leadership in Organizations. Copyright © 2007 by Nelson, a division of Thomson Canada Limited2 Objectives After reading and studying this

Chapter TenChapter Ten

Leadership in Leadership in OrganizationsOrganizations

Copyright © 2007 by Nelson, a division of Thomson Canada LimitedCopyright © 2007 by Nelson, a division of Thomson Canada Limited 22

ObjectivesObjectives

After reading and studying this chapter, you should be able to:After reading and studying this chapter, you should be able to:

1.1. Differentiate between leadership & Differentiate between leadership & management.management.

2.2. Describe key leadership traits, styles & Describe key leadership traits, styles & behaviours.behaviours.

3.3. Explain the basics of four different Explain the basics of four different contingency theories of leadership.contingency theories of leadership.

4.4. Present an overview of transformational Present an overview of transformational and charismatic leadership.and charismatic leadership.

5.5. Identify forces that can sometimes Identify forces that can sometimes decrease the importance of leadership.decrease the importance of leadership.


The Nature of LeadershipThe Nature of Leadership

Leadership is defined as the ability to Leadership is defined as the ability to inspire confidence and support inspire confidence and support among the people on whose among the people on whose competence and commitment competence and commitment performance depends.performance depends.


Leaders and ManagersLeaders and Managers

Leaders:Leaders: Cope with changeCope with change Formulate a vision Formulate a vision

for the future & for the future & then persuade, then persuade, inspire, motivate inspire, motivate others to create others to create that visionthat vision

Managers:Managers: Cope with Cope with

complexitycomplexity Preserve order & Preserve order &

consistencyconsistency Develop & maintain Develop & maintain

a smoothly a smoothly functioning functioning workplaceworkplace


Leaders versus ManagersLeaders versus Managers

LEADER Visionary Passionate Creative Flexible Inspiring Innovative Courageous Imaginative Experimental Independent

MANAGER Rational Consulting Persistent Problem-solving Tough-minded Analytical Structured Deliberate Authoritative Stabilizing

Source: Exhibit 10.2 “Leaders versus Managers” pg. 199 Management Review by Capowski, Genevieve. Copyright 1994 by AM MGMT ASSN (J).


Both Leaders and Managers Both Leaders and Managers NeededNeeded

Research shows incompetent Research shows incompetent managers responsible for loss of managers responsible for loss of billions of lost productivity each yearbillions of lost productivity each year

Presence of charismatic leader can Presence of charismatic leader can contribute to firm’s net profit margincontribute to firm’s net profit margin


Leadership Traits and Leadership Traits and CharacteristicsCharacteristics

Cognitive skillsCognitive skills Mental abilities and Mental abilities and

knowledgeknowledge

Problem-solving skillsProblem-solving skills

Imagination ,creativity, Imagination ,creativity, and a willingness to and a willingness to experimentexperiment

Technical and Technical and profession competence profession competence (knowledge of the (knowledge of the business)business)

Personality/MotivesPersonality/Motives Self-awarenessSelf-awareness

Self-confidenceSelf-confidence

TrustworthinessTrustworthiness

Emotional intelligenceEmotional intelligence

Needs for power and Needs for power and achievementachievement

Five Factor research: Five Factor research: Low neuroticism, Low neuroticism, extraversion, openness, extraversion, openness, conscientiousnessconscientiousness


Behavioural Approaches to Behavioural Approaches to LeadershipLeadership

Assuming leaders show consistent Assuming leaders show consistent pattern of behaviourpattern of behaviour

Looking for style distinguishing Looking for style distinguishing effective leaderseffective leaders

Includes:Includes: Ohio State studiesOhio State studies University of Michigan studiesUniversity of Michigan studies Leadership GridLeadership Grid


Ohio State StudiesOhio State Studies Yielded two leadership dimensions:Yielded two leadership dimensions:

Initiating structureInitiating structure The degree to which the leader establishes structure for The degree to which the leader establishes structure for

group members: assigning task, specifying procedures, group members: assigning task, specifying procedures, scheduling work, and clarifying expectations.scheduling work, and clarifying expectations.

Consideration Consideration The degree to which the leader creates an environment The degree to which the leader creates an environment

of emotional support, warmth, friendliness, and trust.of emotional support, warmth, friendliness, and trust.

Research findings:Research findings: High consideration in leaders was associated with low High consideration in leaders was associated with low

turnover and high job satisfaction.turnover and high job satisfaction. Leaders high on initiating structure were rated highly by Leaders high on initiating structure were rated highly by

their superiors and had higher-producing work groups.their superiors and had higher-producing work groups.


University of Michigan University of Michigan StudiesStudies

Yielded two leadership dimensions:Yielded two leadership dimensions: Production-centered managersProduction-centered managers

Set tight work standards, organized tasks carefully, Set tight work standards, organized tasks carefully, prescribed work methods, and supervised closely.prescribed work methods, and supervised closely.

Employee-centered managersEmployee-centered managers Encouraged participative goal setting and decision-making, Encouraged participative goal setting and decision-making,

fostered high performance by engendering trust and fostered high performance by engendering trust and mutual respect.mutual respect.

Research findings:Research findings: Employee-centered managers had most productive work Employee-centered managers had most productive work

groups.groups.

The most effective leaders had supportive relationships The most effective leaders had supportive relationships with employees, used group decision making and with employees, used group decision making and encouraged employee goal setting.encouraged employee goal setting.


Managing PolaritiesManaging Polarities

Peter Koestenbaum on leadershipPeter Koestenbaum on leadership The central attribute of leadership is the The central attribute of leadership is the

ability to manage polarity - extremes of ability to manage polarity - extremes of positions and interests.positions and interests.


Leadership Leadership GridGrid®®

Describes leadership style as Describes leadership style as combinations of concerns (attitudes) combinations of concerns (attitudes)

Concern for productionConcern for production includes results, includes results, bottom-line performance, profits, and mission.bottom-line performance, profits, and mission.

Concern for peopleConcern for people includes group members includes group members and coworkers.and coworkers.

Claims best style is team management — Claims best style is team management — at 9,9 on the Grid (high concern for both at 9,9 on the Grid (high concern for both production and people).production and people).


Leader-Member Exchange Leader-Member Exchange ModelModel

Leaders develop unique working Leaders develop unique working relationships with each group member.relationships with each group member.

In-groupsIn-groups (chosen largely on basis of initial (chosen largely on basis of initial impression of competence) are given additional impression of competence) are given additional rewards, responsibilities, and trust in exchange rewards, responsibilities, and trust in exchange for their loyalty and performance.for their loyalty and performance.

Out-groupsOut-groups have a more formal (traditional) have a more formal (traditional) superior-subordinate relationship with the leader.superior-subordinate relationship with the leader.


Leader-Member Exchange Leader-Member Exchange ModelModel

Research findings:Research findings: In-group membership is beneficial to its In-group membership is beneficial to its

members; facilitates higher productivity & members; facilitates higher productivity & satisfaction, lower turnoversatisfaction, lower turnover

High-quality leader-member exchanges High-quality leader-member exchanges improve delegation.improve delegation.

Supervisors can overcome biases to make Supervisors can overcome biases to make objective performance appraisalsobjective performance appraisals


Contingency Theories of Contingency Theories of LeadershipLeadership

Look for conditions under which Look for conditions under which different leadership styles lead to different leadership styles lead to best results:best results: Fiedler’s Contingency TheoryFiedler’s Contingency Theory The Path-Goal Theory of LeadershipThe Path-Goal Theory of Leadership The Situational Leadership ModelThe Situational Leadership Model The Normative Decision ModelThe Normative Decision Model


Fiedler’s Contingency Theory Fiedler’s Contingency Theory of Leadershipof Leadership

Specifies conditions under which leaders Specifies conditions under which leaders should use task- and relationship-should use task- and relationship-motivated styles; depends on situational motivated styles; depends on situational controlcontrol

Measures style with LPC scaleMeasures style with LPC scale Leader’s situational control based on:Leader’s situational control based on:

1.1. Leader-member relationsLeader-member relations

2.2. Task structureTask structure

3.3. Position powerPosition power


Exhibit 10-3: Summary of Exhibit 10-3: Summary of Findings from Fiedler’s Findings from Fiedler’s

Contingency TheoryContingency Theory


Fiedler’s Contingency Theory Fiedler’s Contingency Theory of Leadershipof Leadership

Research suggests task-motivated style Research suggests task-motivated style yields best results when leader has high or yields best results when leader has high or low control; relationship-motivated style low control; relationship-motivated style best when moderate controlbest when moderate control

Suggests leader can look for ways to alter Suggests leader can look for ways to alter elements of control to make situation elements of control to make situation more favourablemore favourable


Path-Goal Theory of Path-Goal Theory of LeadershipLeadership

Focus on helping employees find correct path to Focus on helping employees find correct path to goal attainmentgoal attainment

Based on expectancy model of motivation:Based on expectancy model of motivation: Leaders perform a motivational function by increasing Leaders perform a motivational function by increasing

payoffs for achieving work objectives and by making the payoffs for achieving work objectives and by making the path to payoffs smootherpath to payoffs smoother

Choose amongst four styles depending on Choose amongst four styles depending on demands of situation:demands of situation: DirectiveDirective SupportiveSupportive ParticipativeParticipative Achievement-orientedAchievement-oriented

Contingencies refer to characteristics of group Contingencies refer to characteristics of group members & demands of the taskmembers & demands of the task


Exhibit 10-4:Exhibit 10-4:Path-Goal Theory of LeadershipPath-Goal Theory of Leadership


Exhibit 10-5Exhibit 10-5Contingency Relationships in Contingency Relationships in

Path-Goal LeadershipPath-Goal Leadership


Situational Leadership Situational Leadership ModelModel

Explains how a leader can choose a Explains how a leader can choose a leadership style that is appropriate to the leadership style that is appropriate to the readiness of group members.readiness of group members. Readiness:Readiness: the extent to which a group the extent to which a group

member has the member has the abilityability and and willingnesswillingness or or confidence to accomplish a task.confidence to accomplish a task.

As the readiness of group members increases, a As the readiness of group members increases, a leader should rely more on relationship-related leader should rely more on relationship-related leadership behaviours and less on task-related leadership behaviours and less on task-related leadership leadership behavioursbehaviours..


The Normative Decision The Normative Decision ModelModel

Views leadership as a decision-making process in Views leadership as a decision-making process in which the leader must examine situational factors which the leader must examine situational factors to choose the most effective decision-making to choose the most effective decision-making stylestyle

Five styles of decision-making:Five styles of decision-making: Decide (manager alone)Decide (manager alone)

Consult (members individually)Consult (members individually)

Consult (group advises)Consult (group advises)

Facilitate (decide together)Facilitate (decide together)

Delegate (group decides)Delegate (group decides)


The Normative Decision Model The Normative Decision Model (cont.)(cont.)

Model provides matrix through which leader Model provides matrix through which leader can diagnose situation, considering seven can diagnose situation, considering seven variables:variables: Decision significance to the success of the project.Decision significance to the success of the project. Importance of commitment of team members.Importance of commitment of team members. Leader’s expertise in relation to the problem.Leader’s expertise in relation to the problem. Likelihood of commitment by team to a solo Likelihood of commitment by team to a solo

decision.decision. Group support (team) for the organization’s Group support (team) for the organization’s

objectives.objectives. Group expertise in relation to the problem.Group expertise in relation to the problem. Team competence in working together to solve the Team competence in working together to solve the

problem.problem.


Exhibit 10-7: Time-Driven Exhibit 10-7: Time-Driven ModelModel


The Normative Decision Model The Normative Decision Model (cont.)(cont.)

Research shows:Research shows: Managers who follow these procedures Managers who follow these procedures

are likely to increase their decision-are likely to increase their decision-making effectivenessmaking effectiveness

Managers who make decisions Managers who make decisions consistent with model are perceived as consistent with model are perceived as effective managerseffective managers


Transformational Transformational LeadershipLeadership

Transformational leader helps people Transformational leader helps people & the organization make substantial & the organization make substantial changeschanges

More influence than transactional More influence than transactional leaderleader


Transformational Transformational LeadershipLeadership

Creates transformation through:Creates transformation through: Raising people’s level of consciousness.Raising people’s level of consciousness.

Getting people to transcend their self-interests.Getting people to transcend their self-interests.

Focusing people on the quest for self-fulfillment.Focusing people on the quest for self-fulfillment.

Helping to develop a long-range perspective.Helping to develop a long-range perspective.

Helping people understand the need for change.Helping people understand the need for change.

Investing managers with a sense of urgency.Investing managers with a sense of urgency.

Committing to greatness.Committing to greatness. Research shows transformational leadership Research shows transformational leadership

critical to successful implementation of changecritical to successful implementation of change


Exhibit 10-8 Dimensions and Exhibit 10-8 Dimensions and Corresponding Corresponding BehavioursBehaviours of of Transformational LeadershipTransformational Leadership

Vision:Vision: Communicates a clear and Communicates a clear and

positive vision of the futurepositive vision of the future Staff Development :Staff Development :

Treats staff as individuals; Treats staff as individuals; supports and encourages supports and encourages their developmenttheir development

Supportive leadership:Supportive leadership: Gives encouragement and Gives encouragement and

recognition to staffrecognition to staff Empowerment:Empowerment:

Fosters trust, involvement, Fosters trust, involvement, and cooperation among and cooperation among team membersteam members

Innovative Thinking:Innovative Thinking: Encourages thinking about Encourages thinking about

problems in new ways and problems in new ways and questions assumptionsquestions assumptions

Lead by Example:Lead by Example: Is clear about his or her Is clear about his or her

values, and practises what values, and practises what he or she preacheshe or she preaches

Charisma:Charisma: Instills pride and respect in Instills pride and respect in

others and inspires me by others and inspires me by being highly competentbeing highly competent


Charismatic LeadershipCharismatic Leadership

CharismaCharisma is ability to lead others based on is ability to lead others based on personal charm, magnetism, inspiration, personal charm, magnetism, inspiration, emotionemotion Major factor in success of transformational leadersMajor factor in success of transformational leaders Problem if use for personal gain (evil charismatics)Problem if use for personal gain (evil charismatics)

Key characteristics of charismatic leaders:Key characteristics of charismatic leaders: They have vision.They have vision. They are masterful communicators.They are masterful communicators. They inspire trust.They inspire trust. They are energetic.They are energetic. They manage their impressions.They manage their impressions.


Substitutes for LeadershipSubstitutes for Leadership

Some factors in work environment Some factors in work environment can provide guidance and incentives can provide guidance and incentives to perform well, negating or reducing to perform well, negating or reducing the need for a leaderthe need for a leader Group member characteristicsGroup member characteristics

Highly capable persons or groups can Highly capable persons or groups can function with less leadership.function with less leadership.

Experience, training, & professional Experience, training, & professional orientation mean people can self-manageorientation mean people can self-manage


Substitutes for Leadership Substitutes for Leadership (cont.)(cont.)

Task CharacteristicsTask Characteristics Highly standardized tasks that provide Highly standardized tasks that provide

feedback and are intrinsically satisfying can feedback and are intrinsically satisfying can substitute for leadership.substitute for leadership.

Organizational factorsOrganizational factors Explicit plans with well-defined goals that Explicit plans with well-defined goals that

are carried out by cohesive groups reduce are carried out by cohesive groups reduce the need for leadership.the need for leadership.


Choosing An Appropriate Choosing An Appropriate Leadership ModelLeadership Model

1.1. Carefully diagnose the situation.Carefully diagnose the situation.

2.2. Choose a leadership approach that best Choose a leadership approach that best fits the situational deficiencies or fits the situational deficiencies or opportunities.opportunities.

3.3. Observe the people to be led; come to Observe the people to be led; come to understand their interests, goals, and understand their interests, goals, and concerns.concerns.

4.4. Apply the chosen leadership approach.Apply the chosen leadership approach.

Documents

Chapter Ten Leadership in Organizations. Copyright © 2007 by Nelson, a division of Thomson Canada Limited2 Objectives After reading and studying this