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Chapter 11 - Leadership and Trust: Learning Outcomes
Chapter 11 - Leadership and Trust: Learning Outcomes
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 todays leaders.
5. Discuss trust as the essence of leadership.
Opening VignetteEmployees 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 componentessentially
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 scoresand 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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16. 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.
17. The laissez-faire leader generally gives employees complete freedom.
18. 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.
19. Tannenbaum and Schmidt developed a continuum of leader behaviors.
a) See Exhibit 11-2.
20. Tannenbaum and Schmidt proposed that managers look at forces within themselves, forces
within the employees, and forces within the situation when choosing their style.
21. 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.
b) What Did the Ohio State Studies Show?
22. The most comprehensive and replicated of the behavioral theories.
23. These studies sought to identify independent dimensions of leader behavior.
24. 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.
25. 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.
26. However, leader behavior characterized as high on initiating structure led to greater rates
of grievances, absenteeism, and turnover etc., for workers performing routine tasks.
27. Other studies found that high consideration was negatively related to performance ratings
of the leader by his or her manager.
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56. 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.
57. The new model retains the same five alternative leadership styles but expands the
contingency variables to twelve. (See Exhibit 11-5.)
58. 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?
59. One of the most respected approaches to leadership is path-goal theory.
60. 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.
61. The essence of the theory: the leaders 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.
62. A leaders 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.
63. A leaders 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.
64. 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.
65. 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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66. 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.
67. 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
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68. WHAT IS LEADERSHIP LIKE TODAY?
a) What Do the Three Contemporary Views of Leadership Tell Us?
69. 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.
70. 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.
71. Transactional and transformational leadership are not opposing approaches.
72. 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.
73. The evidence supporting the superiority of transformational leadership over the
transactional variety is overwhelmingly impressive.
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74. In summary, the overall evidence indicates that transformational leadership is more
strongly correlated with lower turnover rates, higher productivity, and higher employee
satisfaction.
a) How do Charismatic and Visionary Leaders Differ?
75. 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.
76. 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 Universitycharismatic 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.
77. 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
78. Most experts believe individuals can be trained to exhibit charismatic behaviors.
79. 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 followers 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.
80. Visionary leadership goes beyond charisma.
81. 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.
82. A vision differs from other forms of direction setting in several ways:
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.
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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.
105. 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).
d) How Does Emotional Intelligence Affect Leadership?
106. Recent studies indicating that EImore 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) Its the possession of the five components of emotional intelligenceself-awareness,
self-management, self-motivation, empathy, and social skillsthat allows an
individual to become a star performer.
107. 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 Giulianis 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 Managers Job
Virtual 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
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121. 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, todays leaders should actively seek to build
trust with their followers. Here are some suggestions for achieving that goal.
Steps in Practicing the Skill
1.
2.
3.
4.
5.
6.
7.
8.
Practice openness.
Be fair.
Speak your feelings.
Tell the truth.
Be consistent.
Fulfill your promises.
Maintain confidences.
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.
Its 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.
a)
122. The belief that a particular leadership style will always be effective regardless of the
situation may not be true.
123. Data from numerous studies demonstrate that, in many situations, any behaviors a leader
exhibits are irrelevant.
124. Certain individual, job, and organizational variables can act as substitutes for leadership,
or neutralize the leaders ability to influence his or her followers.
125. Characteristics of employees such as experience, training, professional orientation, or
indifference toward organizational regards can neutralize the effect of leadership.
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126. Jobs that are inherently unambiguous and routine or that are intrinsically satisfying may
place fewer demands on the leadership variable.
127. Organizational characteristics such as explicit formalized goals, rigid rules and
procedures, and cohesive work groups can substitute for leadership.
Teaching Notes
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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 todays 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 teams 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
leaders 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 ones honesty and truthfulness.
Competence involves an individuals technical and interpersonal knowledge and skills. Consistency
relates to an individuals reliability, predictability, and good judgment in handling situations. Loyalty
is an individuals 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 persons 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 nonleaders include drive, the desire to lead, honesty and integrity, self-confidence, intelligence, and jobrelevant 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 Fiedlers 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 leaders style of interaction and the
degree to which the situation gives control and influence to the leader. He isolated three situational
criterialeader-member relations, task structure, and position powerthat 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 individuals basic leadership style is a
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Leader-member relationsThe degree of confidence, trust, and respect subordinates have in their
leader.
Task structureThe degree to which the job assignments of subordinates are structured or
unstructured.
Position powerThe 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 leaders 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 theorythe leaders 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 leaders behavior is motivational to the degree that it: 1) makes employee needsatisfaction 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 employeepersonal
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 ones 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 individuals 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.
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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 youre 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?
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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 Relations
From: Jan Plemmons, Customer Service Director
Subject: 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.
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Case Application
Growing 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. 3Ms 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 selfconfidence 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 Buckleys 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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