The main aim of this report is to brief the board about leadership and its need in an organisation.

It discusses different perspectives when it comes to defining leadership. It gives us an idea as to what is the difference between managing and leading; a common miss-conception amongst the general public. Culture and climate in an organisation; the cusp on which leadership strategies are based, is discussed, after careful analysis of various articles. Types of leaderships are discussed, followed by behavioural theory and a conclusion which contains example, which explains why there is a need for leadership amongst organizations.

LEADERSHIP FOR ENTREPRENEURSHIP AND INNOVATION ASSIGNEMNT # 6

MUHAMMAD BABUR FARRUKH - 7441932

MUHAMMAD BABUR FARRUKH - 7441932 LEADERSHIP FOR ENTREPRENEURSHIP AND INNOVATION ASSIGNEMNT # 6

EXECUTIVE SUMMARY
The main aim of this report is to brief the board about leadership and its need in an organisation. It discusses different perspectives when it comes to defining leadership. It gives us an idea as to what is the difference between managing and leading; a common miss-conception amongst the general public. Culture and climate in an organisation; the cusp on which leadership strategies are based, is discussed, after careful analysis of various articles. Types of leaderships are discussed, followed by behavioural theory and a conclusion which contains example, which explains why there is a need for leadership amongst organizations.

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MUHAMMAD BABUR FARRUKH - 7441932 LEADERSHIP FOR ENTREPRENEURSHIP AND INNOVATION ASSIGNEMNT # 6

What is leadership
Leadership is, most fundamentally, about changes. What leaders do is create the systems and organizations that managers need, and, eventually, elevate them up to a whole new level or . . . change in some basic ways to take advantage of new opportunities. —John P. Kotter Leadership has long been a major area of interest among social scientists and in particular psychologists. However, the field of leadership in organisations seemed to be in a trough in the early 1980s. For some time there has been a feeling that the field had lacked an agreed upon framework (a paradigm) within which research took place and that the findings of a century of research were trivial or contradictory. Nonetheless, new approaches continued to surface (e.g. Hunt et al. 1982) but the field seemed to lack coherence and there was a sense of despondency about its future direction. There was even a call for the temporary abandonment of the concept (Miner 1982), but such extreme views did not find many adherents, because, for all the undoubted problems with the area in those years, the notion of leadership is one that continued to attract generations of writers, in large part because we tend to view leadership as an important feature of everyday and organizational behaviour. Leadership, as one might anticipate, is not an easy concept to define. Its widespread currency and use in everyday life as an explanation affects the way it is defined and indeed probably makes it more difficult to define than a concept that is invented as an abstraction ab initio (Latin term meaning "from the beginning"). Gary Yukl (2006) defines leadership as “the process of influencing others to understand and agree about what needs to be done and how to do it, and the process of facilitating individual and collective efforts to accomplish shared objectives”. Peter Northouse (2010) defines leadership as “a process whereby an individual influences a group of individuals to achieve a common goal”. These definitions suggest several components central to the phenomenon of leadership. Some of them are as follows: (a) Leadership is a process, (b) Leadership involves influencing others, (c) Leadership happens within the context of a group, (d) Leadership involves goal attainment, and (e) These goals are shared by leaders and their followers. The very act of defining leadership as a process suggests that leadership is not a characteristic or trait with which only a few certain people are endowed at birth. The Great man theory (Carlyle, 1888) concurs with the statement mentioned above. It assumes that the capacity for leadership is inherent – that great leaders are born not made. These theories often portray great leaders as heroic, mythic and destined to rise to leadership when needed. The term "Great Man" is used because, at the time, leadership was thought of primarily as a male quality, especially in terms of military leadership. Heads of organizations—be they popes, presidents, generals, CEOs, or general secretaries—must coordinate their followers to produce desired actions and outcomes. Their tools include coercion,

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incentives, and persuasion, but in what combination and to what effect leaders rely on these tools are variable. Look into the soul of any great leader and you will find a good leader. But if only that were the case! Some leaders, those who crave and bathe in the spotlight, are in fact not so great. Others, who are highly effective (and modest) and possess the five key characteristics this author describes, are good leaders first and foremost—which is what, in the end, makes them great! Look into the soul of any great leader and you will find a good leader. But if only that were the case! Some leaders, those who crave and bathe in the spotlight, are in fact not so great. Others, who are highly effective (and modest) and possess the five key characteristics this author describes, are good leaders first and foremost—which is what, in the end, makes them great! Difference between Management and Leadership: Leadership is similar to, and different from, management. They both involve influencing people. They both require working with people. Both are concerned with the achievement of common goals. However, leadership and management are different on more dimensions than they are similar. Zaleznik (1977) believes that managers and leaders are very distinct, and being one precludes being the other. He argues that managers are reactive, and while they are willing to work with people to solve problems, they do so with minimal emotional involvement. On the other hand, leaders are emotionally involved and seek to shape ideas instead of reacting to others’ ideas. Managers limit choice, while leaders work to expand the number of alternatives to problems that have plagued an organization for a long period of time. Leaders change people’s attitudes, while managers only change their behaviour. Mintzberg (1998) contends that managers lead by using a cerebral face. This face stresses calculation, views an organization as components of a portfolio, and operates with words and numbers of rationality. He suggests that leaders lead by using an insightful face. This face stresses commitment, views organizations with an integrative perspective, and is rooted in the images and feel of integrity. He argues that managers need to be two faced. They need to simultaneously be managers and leaders. Kotter (1998) argues that organizations are over managed and under led. However, strong leadership with weak management is no better and may be worse. He suggests that organizations need strong leadership and strong management. Managers are needed to handle complexity by instituting planning and budgeting, organizing and staffing, and controlling and problem solving. Leaders are needed to handle change through setting a direction, aligning people, and motivating and inspiring people. He argues that organizations need people who can do both—they need leader-managers. Leadership is; promoting new directions by example or advocating by a better way. It works through influence, not by making decisions for people. On the other hand management can be defined as getting things done in a way that makes best use of all resources. All employees can promote new directions. Leadership can be shown bottom-up or sideways. Northouse (2006) observes a tendency pro status quo present in management, while leadership is essentially committed to social change. He associates leadership with vision, inspiration,

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empowerment, coaching, opportunities and synergy, while management is linked to planning, directing, training, systems, procedures, schedules and coordination. In a similar way, it is also common to state that leaders do the right things while managers do the things right (Northouse, 2006 and Bennis, 1985). Similarly, Bennis (1989) argues that managers administer, while leaders innovate; managers control, whereas leaders inspire; managers maintain, while leaders develop, and so forth. Culture and Climate in an Organisation There are two distinct forces that dictate how to act within an organization: culture and climate. Each organization has its own distinctive culture. It is a combination of the founders, past leadership, current leadership, crises, events, history, and size (Newstrom, Davis, 1993). This result in rites: the routines, rituals, and the “way we do things.” These rites impact individual behaviour on what it takes to be in good standing (the norm) and direct the appropriate behaviour for each circumstance. The climate is the feel of the organization, the individual and shared perceptions and attitudes of the organization's members (Ivancevich, Konopaske, Matteson, 2007). While the culture is the deeply rooted nature of the organization that is a result of long-held formal and informal systems, rules, traditions, and customs; climate is a short-term phenomenon created by the current leadership. Climate represents the beliefs about the “feel of the organization” by its members. This individual perception of the “feel of the organization” comes from what the people believe about the activities that occur in the organization. These activities influence both individual and team motivation and satisfaction, such as: o o o o o How well does the leader clarify the priorities and goals of the organization? What is expected of us? What is the system of recognition, rewards, and punishments in the organization? How competent are the leaders? Are leaders free to make decisions? What will happen if I make a mistake? Organizational climate is directly related to the leadership and management style of the leader, based on the values, attributes, skills, and actions, as well as the priorities of the leader. Compare this to “ethical climate” — the feel of the organization about the activities that have ethical content or those aspects of the work environment that constitute ethical behaviour. The ethical climate is the feel about whether we do things right; or the feel of whether we behave the way we ought to behave. The behaviour (character) of the leader is the most important factor that impacts the climate. On the other hand, culture is a long-term, complex phenomenon. Culture represents the shared expectations and self-image of the organization. The mature values that create tradition or the “way we do things here.” Things are done differently in every organization. The collective vision and common folklore that define the institution are a reflection of culture. Individual leaders cannot easily create or change culture because culture is a part of the organization. Culture influences the characteristics of the climate by its effect on the actions and thought processes of the leader. But, everything you do as a leader will affect the climate of the organization.

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Types of leadership styles In order to make his or her team work efficiently and with self efficacy, leaders adopt different leadership styles, some of which are: The bureaucratic leader (Weber, 1905) is very structured and follows the procedures as they have been established. This type of leadership has no space to explore new ways to solve problems and is usually slow paced to ensure adherence to the ladders stated by the company. Leaders ensure that all the steps have been followed prior to sending it to the next level of authority. Universities, hospitals, banks and government usually require this type of leader in their organizations to ensure quality, increase security and decrease corruption. Leaders who try to speed up the process will experience frustration and anxiety. The charismatic leader (Weber, 1905) leads by infusing energy and eagerness into their team members. This type of leader has to be committed to the organization for the long run. If the success of the division or project is attributed to the leader and not the team, charismatic leaders may become a risk for the company by deciding to resign for advanced opportunities. It takes the company time and hard work to gain the employees' confidence back with other type of leadership after they have committed themselves to the magnetism of a charismatic leader. The autocratic leader (Lewin, Lippitt, & White, 1939) is given the power to make decisions alone, having total authority. This leadership style is good for employees that need close supervision to perform certain tasks. The democratic leader (Lewin, Lippitt, & White, 1939); this style involves the leader including one or more employees in the decision making process (determining what to do and how to do it). However, the leader maintains the final decision making authority. Using this style is not a sign of weakness; rather it is a sign of strength that your employees will respect. This is normally used when you have part of the information, and your employees have other parts. Note that a leader is not expected to know everything -- this is why you employ knowledgeable and skillful employees. Using this style is of mutual benefit -- it allows them to become part of the team and allows you to make better decisions. The laissez-faire ("let do") leader (Lewin, Lippitt, & White, 1939); in this style, the leader allows the employees to make the decisions. However, the leader is still responsible for the decisions that are made. This is used when employees are able to analyze the situation and determine what needs to be done and how to do it. You cannot do everything! You must set priorities and delegate certain tasks. This is not a style to use so that you can blame others when things go wrong, rather this is a style to be used when you fully trust and confidence in the people below you. Do not be afraid to use it, however, use it wisely! People-oriented leader (Fiedler, 1967) is the one who, in order to comply with effectiveness and efficiency, supports, trains and develops his personnel, increasing job satisfaction and genuine interest to do a good job. The task-oriented leader (Fiedler, 1967) focuses on the job, and concentrates on the specific tasks assigned to each employee to reach goal accomplishment. This leadership style suffers the same

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motivation issues as autocratic leadership, showing no involvement in the teams needs. It requires close supervision and control to achieve expected results. Another name for this is deal maker (Rowley & Roevens, 1999) and is linked to a first phase in managing Change, enhance, according to the Organize with Chaos approach. The servant leader (Greenleaf, 1977) facilitates goal accomplishment by giving its team members what they need in order to be productive. This leader is an instrument employees use to reach the goal rather than a commanding voice that moves to change. This leadership style, in a manner similar to democratic leadership, tends to achieve the results in a slower time frame than other styles, although employee engagement is higher. The transaction leader (Burns, 1978) is given power to perform certain tasks and reward or punish for the team’s performance. It gives the opportunity to the manager to lead the group and the group agrees to follow his lead to accomplish a predetermined goal in exchange for something else. Power is given to the leader to evaluate, correct and train subordinates when productivity is not up to the desired level and reward effectiveness when expected outcome is reached. The transformation leader (Burns, 1978) motivates its team to be effective and efficient. Communication is the base for goal achievement focusing the group on the final desired outcome or goal attainment. This leader is highly visible and uses chain of command to get the job done. Transformational leaders focus on the big picture, needing to be surrounded by people who take care of the details. The leader is always looking for ideas that move the organization to reach the company’s vision. The environment leader (Carmazzi, 2005) is the one who nurtures group or organizational environment to affect the emotional and psychological perception of an individual’s place in that group or organization. An understanding and application of group psychology and dynamics is essential for this style to be effective. The leader uses organizational culture to inspire individuals and develop leaders at all levels. This leadership style relies on creating an education matrix where groups interactively learn the fundamental psychology of group dynamics and culture from each other. The leader uses this psychology, and complementary language, to influence direction through the members of the inspired group to do what is required for the benefit of all. The Behavioral Theory On contrary to leadership as an inborn trait, whence disregarding situational factors and followers’ effectiveness as well as disregarding the dynamics of learning and change; behavioural theory believes that managers’ leadership potential can be trained into effective leadership competencies and leadership is to be combined with management to achieve the greatest possible outcome. Behavioural theories of leadership (Cherry 2010) are based upon the belief that great leaders are made, not born. Rooted in behaviourism, this leadership theory focuses on the actions of leaders, not on mental qualities or internal states. According to this theory, people can learn to become leaders through teaching and observation. In the early years (1940s – 1950s), historical studies on leadership tended to lean more towards Traits Theory or the Great Man theory which has been discussed. In about (1950s – 1960s), Behavioural leadership started to be more well-known. The former theory has over-crossed throughout the years

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into the 1980s however. Nowadays, we can see that more and more companies are hiring professional trainers to train managers’ leadership potential and some have proven to be effective. These companies are willing to spend a large sum of money to train their employees to be more effective in leadership and management. Behavioural is a big leap from Trait Theory (Behavioural Theory 2010), in that it assumes that leadership capability can be learned, rather than being inherent. This opens the floodgates to leadership development, as opposed to simple psychometric assessment that sorts those with leadership potential from those who will never have the chance. A behavioural theory is relatively easy to develop, as we simply assess both leadership success and the actions of leaders. With a large enough study, we can then correlate statistically significant behaviours with success. One can also identify behaviours which contribute to failure, thus adding a second layer of understanding. In a more straight-forward manner, I would try to simplify the difference of approaches between the two theories by simply stating that; Traits theory in leadership is an art form of approach in selecting or identifying potential leaders, whence Behavioural theory in leadership is a scientific approach to choices. (Ghee & Daft 2004) One study that served as a precursor to the behaviour approach recognized autocratic and democratic leadership styles.
Figure 1: Continuum Leadership Behaviour.

SOURCE: Tannenbaum, R., & Schmidt, W. H. (1973, May/June); How to choose a leadership pattern. Harvard Business Review Leadership researches have consistently found a strong positive relationship between charismatic leadership behaviours and follower performance (House 1988; Bass 1990). Specifically, by articulating a compelling vision of the future, communicating high expectations with respect to followers’ performance and displaying confidence in followers’ ability to meet these expectations, charismatic leaders have been found to positively influence follower performance. These findings have been supported in a variety of settings and using various research methodologies including laboratory experiments (e.g., Howell and Frost 1989; Kirkpatrick and Locke 1996), field research (e.g., Avolio, Waldman, and Einstein 1988; Hater and Bass 1988; Howell and Avolio 1993), and archival studies

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(e.g., House, Spangler, and Woycke 1991). Howell and Frost (1989), for example, found that individuals working under an actor trained to display charismatic leadership behaviours had higher qualitative and quantitative task performance, higher task faction, and lower role conflict and ambiguity in comparison to individuals working under considerate leaders; they also had higher quantitative task performance, greater task satisfaction, and less role conflict than individuals working under structuring leaders. More recently, in an experiment using 282 undergraduates carrying out a simulated production assignment, Kirkpatrick and Locke (1996) found a positive relationship between charismatic behaviours and performance, task satisfaction, and attitude toward the leader. Both Howell and Frost’s and Kirkpatrick’s studies found that individuals working under charismatic leaders reported that the task was more interesting, engaging, and satisfying than individuals working under non charismatic leaders; this was so in spite of the fact that all individuals performed the identical task. The above findings have been supported by the findings of studies conducted in the field. For example, in a study of 30 charismatic and 30 non charismatic leaders from a wide variety of organizations, Smith (1982) found that charismatic leaders could be distinguished from noncharismatic leaders based on their followers’ higher performances and higher levels of self-assurance. Based on these reports of higher self- assurance for followers of charismatic leaders, Smith postulated that charismatic leaders may produce their effects on followers by enhancing their self-efficacy beliefs. Conclusion A manager is characterized according to degree of control that is maintained by him. According to this approach, four main styles of leadership have been identified:  Tells: The manager identifies a problem, chooses a decision, and announces this to subordinates. The subordinates are not a party to the decision making process and the manager expects them to implement his decisions as soon as possible.  Sells: The decision is chosen by the manager only but he understands that there will be some amount of resistance from those faced with the decision and therefore makes efforts to persuade them to accept it.  Consults: Though the problem is identified by the manager, he does not take a final decision. The problem is presented to the subordinates and the solutions are suggested by the subordinates.  Joins: The manager defines the limits within which the decision can be taken by the subordinates and then makes the final decision along with the subordinates. According to Tannenbaum and Schmidt (1958), if one has to make a choice of the leadership style which is practicable and desirable, then his answer will depend upon the following three factors:  Forces in the Manager: The behaviour of the leader is influenced by his personality, background, knowledge, and experience. These forces include: i. Value systems ii. Confidence in subordinates

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iii. Leadership inclinations iv. Feelings of security in an uncertain situation  Forces in the subordinate: The personality of the subordinates and their expectations from the leader influences their behaviour. The factors include: i. Readiness to assume responsibility in decision-making ii. Degree of tolerance for ambiguity iii. Interest in the problem and feelings as to its importance iv. Strength of the needs for independence v. Knowledge and experience to deal with the problem vi. Understanding and identification with the goals of the organization If these factors are on a positive side, then more freedom can be allowed to the subordinate by the leader.  Forces in the situation: The environmental and general situations also affect the leader’s behaviour. These include factors like: i. Type of organization ii. Group effectiveness iii. Nature of the problem iv. Time pressure When the authors updated their work in 1973, they suggested a new continuum of patterns of leadership behaviour. In this, the total area of freedom shared between managers and non-managers is redefined constantly by interactions between them and the environmental forces. This pattern was, however, more complex in comparison to the previous one. To conclude this report, all I have to say is, successful leaders know which behaviour is the most appropriate at a particular time. They shape their behaviour after a careful analysis of self, their subordinates, organization and environmental factors, something that needs to be integrated amongst the management style that is present here. Each manager or person in power is doing a good job. Helping them reach their potential will make them do a fantastic job, something that distinguishes a good organisation from a great organisation. I would like to finish this report off with the example of late Darwin Smith; of how diversity of experience can be a critical factor resulting in leadership excellence. When Smith was in the U.S. Army’s officer training school, he was told, “You’ll never be a leader.” Smith graduated cum laude from Harvard Law School in 1955 and, after a short stint with a Chicago law firm, joined Kimberley-Clark’s legal department. He intended to stay only long enough to gain a little corporate experience but ended up rising through the ranks and becoming chairman and CEO of Kimberly- Clark in 1971. Soon after, he was diagnosed with nose and throat cancer, yet even from that experience he learned, telling his wife, Lois, “If you have a cancer in your arm, you’ve got to have the guts to cut off your arm.” At the time Smith took the reins at Kimberly-Clark, the company was mired in mediocrity. Rather than issue a vision statement or come up with an elaborate change program, Smith asked his employees what they could be most passionate about and what Kimberly-Clark could be best in the world at. In a bold move Smith then decided to sell many of Kimberly-Clark’s paper mills, in which most of the company’s capital had been tied up, and pushed

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Kimberly-Clark into new products (including Huggies disposable diapers). The action was derided by Wall Street analysts and disgruntled shareholders, but under Smith’s leadership Kimberly-Clark went on to become the world’s top paper-based consumer-products company before his retirement in 1991. It is important to ask whether those who have had power abused that power, and whether those who have made judgments made informed and just judgments. Did those who made mistakes admit them and bounce back? Is there concrete evidence that they were able to learn from their experiences—their successes as well as their failures? Did those who put forth policies speak the truth or just create fog? And finally, we are impelled to ask whether we ourselves have had enough experiences to choose our leaders wisely. I used to think that running an organization was equivalent to conducting a symphony orchestra. But I don't think that's quite it; it's more like jazz. There is more improvisation. — Warren Bennis

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26. Northouse, PG 2010, Leadership: Theory and practice 5th edn. 27. Northouse, PG 2006, Leadership: Theory and practice, 4th edn. 28. Rowley, RJR 1999, Organize with Chaos, Management Books 2000 Ltd. 29. Smith, B. J. (1982). An initial test of theory of charismatic leadership based on the responses of subordinates. Unpublished doctoral dissertation, Faculty of Management, University of Toronto. 30. Tannenbaum, ASaS, W.H 1958, 'How to choose a leadership pattern', Harvard Business Review on Leadership, vol. 36, pp. 95-101. 31. Weber, M 1905, the Protestant Ethic and the Spirit of Capitalism: and Other Writings, Penguin Group, New York. 32. Yukl, G 2006, Leadership in organizations 6th edn. Pearson-Prentice Hall. 33. Zaleznik, A 1977, 'Managers and leaders: Are they different?’ Harvard Business Review,, vol. 55, pp. 6778.

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