M A N A G E M E N T F U N D A M E N T A L SL E A D E R S H I P

G R A D U A T E D I P L O M A I N M A N A G E M E N T

Jeff Bezos is a pioneer in world of internet commerce, and was instrumental in defining this space that is now defining many aspects of

the internet world. It is Jeff Bezos who innovated the concept of “predictive analytics”–recommending products to customers based on

search history and buying habits. Whether you like the concept or you hate it, the idea has made online commerce more profit rich and

efficient, and is making online shopping a better experience for consumers throughout the world.

From his upbringing in a poor family in the Bronx to an athletic scholarship and eventually the head of Starbucks Howard Schultz is a

consummate example of courage, hard work, and the ability to achieve the American dream. Even in the glow of his own successes,

Howard is also interested in investing in others’ success and continues to invest actively in other business ventures, such as eBay.

Larry Page is another example of a businessperson who can persevere any challenge. Larry and his company have faced much criticism

and received ample praise over the years for his company’s actions. But in the midst of the storm, he has never let what others think sway

him from pursuing the course for his company that he considers the best.

Steve Jobs is a hard act to follow, but thus far, Tim Cook is doing a tremendous job. Rather than attempt to match the consumer-facing

innovations Steve Jobs had been known for, Tim Cook is forging into the future with his own new advances, such as Apple’s

newest innovative inventory management techniques.

Anyone who owns more than 400 companies and is worth billions of dollars is clearly doing many things right. I admire Richard Branson’s

tenacity, and I admire his personal brand—so much so, that when my paired leadership partner, Mary Michelle Scott, and I recently

travelled to Australia with several of our team in our launch of Fishbowl Australia, we made the effort and kept the commitment to fly with

Virgin Airlines every step of the way

THE NATURE OF LEADERSHIP

• Leadership is the ability to influence people towards the attainment of goals.

Influence: The relationship among people is not passive. Influence is designed to achieve some

end goal.

KEY FUNCTIONS OF A LEADER

• Directing

• Communicating

• Motivating

• Culture building

• Innovating and transforming

LEADERSHIP VS. MANAGEMENT

• Management is the process of getting things done through the efforts of other people.

• Leadership is influencing other to do what he or she wants them to do; it involves humaninteraction.

LEADERSHIP VS. MANAGEMENTManagement Leadership

Establish agenda’s Create a vision

Allocate resources Set strategies

Organizing and staffing Aligning people

Provide structure Communicate goals

Establish rules Build teams and coalitions

Controlling and problem solving Motivating and inspiring

Administers Innovates

Focuses on systems and structure Focuses on people

Accepts status quo Challenges status quo

MAJOR APPROACHES TO LEADERSHIP

• Trait approach

• Behavioural approach

• Contingency approach

• Contemporary approach

LEADERSHIP TRAIT THEORIES

• Theory was developed based on the characteristics of many leaders, successful and unsuccessful to

determine the most effective qualities that would differentiate leaders from non leaders.

01

Core traits for successful leadership

Achievement drive : High level of ambition, energy and initiative

Leadership motivation : An intense desire to lead others to reach shared goals

Honesty and integrity : Trustworthy, reliable and open

Self confidence : Belief in one’s self and ability

Cognitive ability : Capable of exercising good judgement, strong analytical abilities and

conceptual skills

Job relevant knowledge : Knowledge pertaining to the industry, job and company

CRITICISMS OF TRAIT APPROACH

• Some good leaders do not exhibit number of traits mention above

• Some traits are unclear & difficult to describe

• Role of leaders will be influenced by their behaviour

LEADERSHIP BEHAVIOUR THEORIES02

Bill Watkins : Seagate Technology

Q : How do you handle your BOD?

A : You never ask board members what they

think. You tell them what you’re going to do.

Joe Lee : Darden Restaurants

After the September 2011, was focussed only on

two things :

1) His employees travelling

2) His company’s Muslim colleagues

LEADERSHIP BEHAVIOUR THEORIES

• Focus on the behaviour of leaders

• Assume leaders are not born, leaders can be made

• Those theories isolate behaviours that differentiate effective leaders from ineffective

leaders.

• Defined two leadership behaviours:

– Task-oriented behaviour

– People-oriented behaviour

02

2.1 OHIO STATE STUDIES

• Identified two major behaviours:

– Consideration – people oriented

• Mindful of subordinates

• Respects ideas and feelings

• Establishing mutual trust

– Initiating structure – task behaviour

• Task oriented

• Directs work activities towards goal

2.2 MICHIGAN STUDIES

• Compared the behaviour of effective and ineffective supervisors

• Employee-centered leaders (most effective)

– Establish high performance goals

– Display supportive behaviour

• Job-centered leaders (not effective)

– Focus on meeting schedules, cost-management, and efficiency

– Less concerned with goal achievement/human needs

2.3 THE LEADERSHIP (MANAGERIAL) GRID

CONTINGENCY APPROACHES

• A model of leadership that describes the relationship between leadership styles and specific organisational situations.

• Key Assumption - Leaders must fit to situations; options to accomplish this:

– Select leader to fit situation

– Change situation to fit leader

• Main theories are,

– Hersey and Blanchard’s Situational Theory

– Fiedler’s Contingency Theory

– Path-Goal Theory

– Substitute for Leadership

03

3.1 HERSEY AND BLANCHARD’S SITUATIONALLEADERSHIP THEORY

Situational Leadership Theory (SLT)

A contingency theory that focuses on followers’ readiness

HERSEY AND BLANCHARD’S SITUATIONAL MODEL

FIELDER’S CONTINGENCY THEORY

• Leader’s style, is task oriented or relationship oriented

• Goal is to match the leader’s style with organisational situation

• Analyze the leader’s style to the favourability of the situation

• Leadership situations can be analyzed in terms of three elements.

– Leader-member relations – refers to group atmosphere and members’ attitude toward and

acceptance of the leader.

– Task structure – refers to the extent to which tasks performed by the group are defined, involve

specific procedures, and have clear, explicit goals.

– Position power – is the extent to which the leader has formal authority over subordinates

HOW LEADER’S STYLE FITS THE SITUATION

PATH GOAL THEORY

The theory that it is the leader’s job to assist followers

in attaining their goals and to provide them the

necessary direction and/or support to ensure that their

goals are compatible with the overall objectives of the

group or organisation.

PATH GOAL THEORY

SUBSTITUTE FOR LEADERSHIP

• Situational variables can be so powerful that they actually substitute for or neutralize the

need for leadership.

• Substitute – a situational variable that makes a leadership style unnecessary or

redundant.

• Neutralizer – a situational variable that counteracts a leadership style and prevents the

leader from displaying certain behaviors.

CONTEMPORARY APPROACHES

• Leadership evolves as the needs of the organisation change

• Leadership has evolved with technology, economic, labour, social, and cultural changes

• Responding to the turbulence and uncertainty of the environment new theories of leadership are developed

• Four approaches for today’s turbulent times:

– Level 5 Leadership

– Servant Leadership

– Authentic Leadership

– Interactive Leadership (gender differences)

LEVEL FIVE LEADERSHIP

SERVANT LEADERSHIP

• Work exists for the development of the worker

• Servant leaders transcend self-interest to serve

others

• Servant leaders give away power, ideas,

information, recognition, credit, and money

AUTHENTIC LEADERSHIP

• Leaders who know and understand themselves

• Inspire trust and commitment

• Staying true to one’s values and beliefs

• Respect diverse viewpoints

• Espouse and act with higher order ethical values

• Encourage collaboration

• Help others learn, grow, and develop as leaders

COMPONENTS OF AUTHENTIC LEADERSHIP

INTERACTIVE LEADERSHIP

• Derived from studies of female leaders (gender differences)

• Consistent with Level 5 leadership

• Consensual and collaborative

• Influence derived from relationships

GENDER DIFFERENCES IN LEADERSHIPBEHAVIOURS

CHARISMATIC AND VISIONARY LEADERSHIP

• Charismatic leaders are skilled in the art of visionary leadership

• Inspire and motivate people to do more

– A superior vision

– Ability to understand and empathize

– Empowering and trusting subordinates

• Visionary leaders speak to the hearts of employees to be a part of something big

TRANSFORMATIONAL VS. TRANSACTIONAL LEADERSHIP

Transactional

Clarify tasks

Initiate structure

Provide awards

Improve productivity

Hard working

Tolerant and fair-minded

Focus on management

Transformational

Innovative

Recognize follower needs

Inspire followers

Create a better future

Promote significant change

LEADERSHIP STYLES

• Autocratic:

– Leader makes decisions without reference to anyone else

– Can create de-motivation and alienation of staff

– May be valuable in some types of business where decisions need to be made quickly and decisively

• Democratic:

– Encourages decision making

– Leadership may be emphasised throughout the organisation

– May help motivation and involvement

– Workers feel ownership of the firm and its ideas

– Can delay decision making

LEADERSHIP STYLES CONTD.

• Laissez-Faire:

– ‘Let it be’ – the leadership responsibilities are shared by all

– Can be very useful in businesses where creative ideas are important

– Can be highly motivational, as people have control over their working life

– Can make coordination and decision making time-consuming and

lacking in overall direction

– Relies on good team work

– Relies on good interpersonal relations

POWER IN ORGANISATIONS

• Ability to influence others and to resist being influenced.

• Control of valuable resources.

• Capacity to affect another persons rewards and costs.

• Ability to control what happens to another

individual.

• Two bases of power

– Position

– Personal

SOURCES OF POWERSource of power Description

Legitimate

power/

Positional power

Power derived through organizational position.

Job descriptions, for example, require junior workers to report to managers and give managers the power to assign duties to

their juniors.

Expert power Power derived through possession of knowledge or expertise in a particular area.

For example, a person who holds expert power can be promoted to senior management, thereby giving him legitimate power

Referent power Referent power is derived from the interpersonal relationships that a person cultivates with other people in the organization.

People possess reference power when others respect and like them. Referent power arises from charisma, as the charismatic

person influences others via the admiration, respect and trust others have for her.

Coercive power Coercive power is derived from a person's ability to influence others via threats, punishments or sanctions.

A junior staff member may work late to meet a deadline to avoid disciplinary action from his boss. Coercive power is, therefore,

a person's ability to punish, fire or reprimand another employee.

Reward power Reward power arises from the ability of a person to influence the allocation of incentives in an organization. These incentives

include salary increments, positive appraisals and promotions. In an organization, people who wield reward power tend to

influence the actions of other employees. Reward power, if used well, greatly motivates employees

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