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Principles of Management: Leadership

A. K. M. Tafzal Haque
Associate Professor
Department of Management Studies
University of Chittagong
Phone:01819-613 992

What is leadership?

The definition of leadership can sometimes seems esoteric and illusive; one of the many
reasons is the number of definitions, theories, and researchers that exists. Stogdill (1974),
a prominent leadership researcher said, “ …there are almost as many different definitions
as there are people who have attempted to define the concept.” Although the concept of
leadership can seem mystifying, its various definitions are critical to understand the
concept and principles of leadership.

Leadership has different meanings to various authors. Leadership is defined as influence,

that is, the art of influencing people so that they will strive willingly and enthustically
toward the achievement of group goals. (Koontz). Leadership is the process of
influencing the activities of either formal or informal group in the task of goal setting and
goal achievement. (Rue and Byers.) Hollander (1978) defined leadership as “a process
of influence between a leader and those who are followers”. Whereas Bennis (1959)
defined it as “a process by which an agent induces a subordinate to behave in a desired
manner”. Chemers (1997) argued “ A definition of leadership that would be widely
accepted by the majority of theorists and researchers might say that leadership is a
process of social influence in which one person is able to enlist the aid and support of
others in the accomplishment of a common task”. Leadership is “the ability to influence,
motivate, and enable others to contribute toward the effectiveness and success of the
organization....” ( House et al., 1999.p.184) .

Northhouse (2004, p. 3.), identified four basic components of leadership: “ a) leadership

is a process, b) leadership involves influence, c) leadership occurs within a group context,
and d) leadership involves goal attainment.”

Leadership is the ability to influence others towards the achievement of organizational

goals and objectives.

Ingredients of Leadership:

Every group of people that performs near its total capacity has some person as its head
who is skilled in the art of leadership. This skill seems to be a compound of at least four
major ingredients: a) the ability to use power effectively and in a responsive manner, b)

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the ability to comprehend that human beings have different motivation forces at different
situations, c) the ability to inspire and d) the ability to act in a manner that will develop a
climate conducive to responding to and arousing motivations.

Ingredients of leadership:
Coexistence with followers
Presence of authority in leadership
Understanding the feelings and problems of followers
Self -awareness
Recognition and spontaneous acceptance by followers

Power and Leadership:

To fully understand leadership, it is necessary to understand power. Power is the ability to
affect the behavior of others. One can have power without actually using it. In
organizational settings, there are usually five kinds of power: legitimate, reward,
coercive, referent and expert power.

Legitimate Power:

Legitimate power is power granted through the organizational hierarchy; it is the power
accorded people occupying positions as defined by the organization. A manager can
assign a subordinate tasks, and a subordinate who refuses to do them can be reprimanded
or even fired. All managers have legitimate power over their subordinates. Such
outcomes stem from the manager’s legitimate power as defined and vested in her or him
by the organization. Legitimate power, then, is authority. All managers have legitimate
power over their subordinates. The mere possession of legitimate power, however, does
not by itself make someone a leader. Some subordinates follow only those orders that are
strictly within the letter of organizational rules and policies. If asked to do something not
in the job description, they refuse or do a poor job. The manager of such employees is
exercising authority but not leadership.

Reward Power:

Reward power is the power to give or withhold rewards. Rewards that a manger may
control include salary increase, bonuses, promotions, praise, recognition, and interesting
job assignments. In general, the greater the number of rewards a manager controls and the
more important the rewards are to subordinates, the greater is the manager’s reward
power. If the subordinate sees as valuable only the formal organizational rewards
provided by the manager, then the manager is not a leader. If the subordinate also wants
and appreciate the manager’s informal rewards like praise, gratitude, and recognition,
however, then the manager is exercising leadership.

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Coercive Power:

Coercive power is the force compliance by means of psychological, emotional, or

physical threat. In the past, physical coercion in organizations was relatively common. In
most organizations today, however, coercion is limited to verbal reprimands, written
reprimands, disciplinary layoffs, fines, demotions, and terminations. The more punitive
the elements under a manager’s control and the more important they are to subordinates,
the more coercive power the manager possesses. On the other hand, the more a manager
uses coercive power, the more likely he is to provide resentment and hostility and the less
likely he is to be seen as a leader.

Referent Power:

Compared with legitimate, reward, and coercive power, which are relatively concrete and
grounded in objective facets of organizational life, referent power is abstract. It is based
on identification, imitation, loyalty, or charisma. Followers may react favorably because
they identify in some way with a leader, who may be like them in personality,
background or attitudes. In other situations, follower might choose to imitate a leader
with referent power by wearing the same kinds of clothes, working the same hours, or
espousing the same management philosophy. Referent power may also take the form of
charisma, an intangible attribute of the leader that inspires loyalty and enthusiasm. Thus a
manager might have referent power, but it is more likely to be associated with leadership.

Expert Power:

Expert power is derived from information or expertise. A manager who knows to interact
with an eccentric but important customer, a scientist who is capable of achieving an
important technical breakthrough that no other company has dreamed of, and a secretary
who knows how to unravel bureaucratic red tape all have expert power over anyone who
needs that information. The more important the information and the fewer the people who
have access to it, the greater is the degree of expert power possessed by any one
individual. In general, people who are both leaders and managers tend to have a lot of
expert power.

TYPES/ STYLES of Leadership:

Autocratic leadership:

Central and quick decision

Central authority

Coercion process

Downward communication

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Believer of theory X

Closed supervision

Lack of confidence in subordinate

Democratic Leadership:

Group decision

Decentralized power and authority

Overt manipulation

Two- way communication

Believer of theory Y

Normal supervision

Laissez-Faire Leadership:

Maximum delegation of authority

Minimum supervision

Open door communication

Paternalistic Leadership

Charismatic Leadership


Policy Solely by leaders By group decision No policy-
Determination complete freedom
for group or
Establishment of Solely by leaders Leader suggests- Up to individual
job techniques and group chooses

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Planning Solely by leaders Group receives No systematic

sufficient planning
information to
Establishment of Directed by leader Left to group Leaders not
division of labor decision involved
and job assignments
Evaluation Leaders evaluate Evaluation against No appraisal-
themselves objective standards spontaneous evaluation
by other group

Leadership's relation with management

Some commentators link leadership closely with the idea of management; some would
even regard the two as synonymous. If one accepts this premise, one can view leadership

• centralized or decentralized
• broad or focused
• decision-oriented or morale-centred
• intrinsic or derived from some authority

Any of the bipolar labels traditionally ascribed to management style could also apply to
leadership style. Hersey and Blanchard use this approach: they claim that management
merely consists of leadership applied to business situations; or in other words:
management forms a sub-set of the broader process of leadership. They put it this way:
"Leadership occurs any time one attempts to influence the behavior of an individual or
group, regardless of the reason. . . . Management is a kind of leadership in which the
achievement of organizational goals is paramount." (Hersey, P. and Blanchard, K. : 1982 :
page 3)

However, a clear distinction between management and leadership may nevertheless prove
useful. This would allow for a reciprocal relationship between leadership and
management, implying that an effective manager should possess leadership skills, and an
effective leader should demonstrate management skills.

Abraham Zaleznik (1977), for example, delineated differences between leadership and
management. He saw leaders as inspiring visionaries, concerned about substance; while
managers he views as planners who have concerns with process. Warren Bennis (1989)
further explicated a dichotomy between managers and leaders. He drew twelve
distinctions between the two groups:

• Managers administer, leaders innovate

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• Managers ask how and when, leaders ask what and why
• Managers focus on systems, leaders focus on people
• Managers do things right, leaders do the right things
• Managers maintain, leaders develop
• Managers rely on control, leaders inspire trust
• Managers have a short-term perspective, leaders have a longer-term perspective
• Managers accept the status-quo, leaders challenge the status-quo
• Managers have an eye on the bottom line, leaders have an eye on the horizon
• Managers imitate, leaders originate
• Managers emulate the classic good soldier, leaders are their own person
• Managers copy, leaders show originality

Paul Birch (1999) also sees a distinction between leadership and management. He
observed that, as a broad generalization, managers concerned themselves with tasks while
leaders concerned themselves with people. Birch does not suggest that leaders do not
focus on "the task." Indeed, the things that characterise a great leader include the fact that
they achieve. The difference lies in the leader realising that the achievement of the task
comes about through the goodwill and support of others, while the manager may not.

This goodwill and support originates in the leader seeing people as people, not as another
resource for deployment in support of "the task". The manager often has the role of
organizing resources to get something done. People form one of these resources, and
many of the worst managers treat people as just another interchangeable item. A leader
has the role of causing others to follow a path he/she has laid out or a vision he/she has
articulated in order to achieve a task. Often, people see the task as subordinate to the
vision. For instance, an organization might have the overall task of generating profit, but
a good leader may see profit as a by-product that flows from whatever aspect of their
vision differentiates their company from the competition.

Leadership does not only manifest itself as purely a business phenomenon. Many people
can think of an inspiring leader they have encountered who has nothing whatever to do
with business: a politician, an officer in the armed forces, a Scout or Guide leader, a
teacher, etc. Similarly, management does not occur only as a purely business
phenomenon. Again, we can think of examples of people that we have met who fill the
management niche in non-business organisations. Non-business organisations should find
it easier to articulate a non-money-driven inspiring vision that will support true
leadership. However, often this does not occur.

Differences in the mix of leadership and management can define various management
styles. Some management styles tend to de-emphasize leadership. Included in this group
one could include participatory management, democratic management, and collaborative
management styles. Other management styles, such as authoritarian management, micro-
management, and top-down management, depend more on a leader to provide direction.
Note, however, that just because an organisation has no single leader giving it direction,
does not mean it necessarily has weak leadership. In many cases group leadership
(multiple leaders) can prove effective. Having a single leader (as in dictatorship) allows

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for quick and decisive decision-making when needed as well as when not needed. Group
decision-making sometimes earns the derisive label "committee-itis" because of the
longer times required to make decisions, but group leadership can bring more expertise,
experience, and perspectives through a democratic process.

Patricia Pitcher (1994) has challenged the bifurcation into leaders and managers. She
used a factor analysis technique on data collected over 8 years, and concluded that three
types of leaders exist, each with very different psychological profiles. She characterises
one group as imaginative, inspiring, visionary, entrepreneurial, intuitive, daring, and
emotional, and calls them "artists". In a second grouping she places "craftsmen" as well-
balanced, steady, reasonable, sensible, predictable, and trustworthy. Finally she identifies
"technocrats" as cerebral, detail-oriented, fastidious, uncompromising, and hard-headed.
She speculates that no one profile offers a preferred leadership style. She claims that if
we want to build, we should find an "artist leader"; if we want to solidify our position, we
should find a "craftsman leader"; and if we have an ugly job that needs to get done (like
downsizing), we should find a "technocratic leader." Pitcher also observed that a balanced
leader exhibiting all three sets of traits occurs extremely rarely: she found none in her

Zaleznik( 1977), who wrote a classic essay on the difference between managers and
leaders, noted that leaders are proactive. Rather than simply waiting to react to ideas,
leaders are foreward thinking; they initiate and shape ideas. leaders commnunicate ideas
that excite others, and they work with others to develop alterantives for how these future
images can be manifest. The following table summarizes the differences between leaders
and managers:

Contrasting Managers and Leaders

Managers Leaders
• Focus on goals that arises from • Adopt personal attitude toward
necessity goals
• Are reactive, focus on solving • Are proactive, shape ideas
problems • Look for potential future
• Ensure day-to-day business is opportunities
carried out • Tolerate chaos and lack of structure
• Seek order and control • seek opportunities to bring about
• Regulate existing order of affairs change
• Are able to tolerate mundane, • Inspire subordinates and fire up the
practical work creative process with their own
• Act to limit choices and coordinate energy
opposing views in order to get • Avoid premature closure, open
solutions accepted issues to new options, and develop
fresh approaches to longstanding
• Believe” If it ain’t broke, don’t fix problems

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• Believe “ “when it ain’t broke may

be the only time you can fix it”

Six Traits That Differentiate Leaders from Non-leaders:

• Drive. Leaders exhibit a high effort level. They have a relatively high desire for
achievement, they’re ambitious, they have a lot of energy, they’re tirelessly persistent
in their activities, and they show initiative.

• Desire to lead. Leaders have a strong desire to influence and lead others. They
demonstrate the willingness to take responsibility.
• Honesty and Integrity. Leaders build trusting relationships between themselves
and followers by being truthful or non-deceitful and by showing high consistency
between word and deed.
• Self-Confidence. Followers look to leaders for an absence of self-doubt. Leaders.
Therefore, need top show self-confidence in order to convince followers of the
rightness of goals and decisions.
• Intelligence. Leaders need to be intelligent enough to gather, synthesize, and
interpret large amounts of information; and to be able to create vision, solve
problems, and make correct decisions.
• Job-Related Knowledge. Effective leaders have a high degree of knowledge
about the company, industry, and technical matters. In-depth knowledge allows to
make well-informed decisions and to understand the implications of those decisions.


A common view of leadership is that there is something rare in the personality of an

individual who has the unique qualifications to ascend to leadership. Some people refer to
these unique qualifications as leadership traits. Because of the various internal and
external elements involved in leadership, it remains controversial and continues to be the
subject of many studies (Kirkpatrick and Locke, 2000).

Great Man Theory:

Nineteenth-century philosopher Thomas Carlyle offered the Great Man Theory, which
asserted that leadership qualities are inherited and that great men are born, not made. The
leader, who is endowed with unique qualities, contributes regardless of the situation. The
Great man Theory is a method used to select individuals who are perceived to be great
leaders to transform and inspire individuals and organizations (Bass, 1990). The theory
promotes the idea that6 anyone in a leadership position must deserve to be there by virtue

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of his or her characteristics or personal traits (Chemers, 1997). One weakness of this
theory is that there is little evidence to support the claim that inherited traits are good
predictors of leadership effectiveness. Currently, leadership is viewed as a complex
interaction between the leader and the social, organizational, and economic environment.
This interaction includes the leader’s ability to successfully integrate situational
components while transforming and inspiring individuals and organizations (Fiedler,


Before the 1950s, the study of leadership was based mainly on the Great Man Theory;
however, it later was challenged by the trait theory (Goldbach, 1989). Trait refers to a
person’s general characteristics, including his or her capacities, motives, or patterns of
behavior. The trait theory is derived from the statistical treatment of large numbers of
observations presented as norms. Kirkpatrick and Locke (1991) identified six traits that
differentiate leaders from followers. These traits include: (1) drive, (2) integrity, (3) self-
confidence, (4) cognitive ability, (5) desire to lead, and (6) knowledge. Jekins (1947) and
Stogdill (1948) found that selecting leaders by means of their traits met with little

One major weakness of the trait theory is that traits do not explain the complexity and
intertwined behavior of the total person (Allen, 1965). Additionally, this theory does not
take into account the interaction between the leader and his or her group. Another
weakness of the trait theory is that traits often are confused for being ski8lls. A Skill is a
technical ability, knowledge, or expertness; a trait is a characteristic (Stogdill, 1948).

Situational Leadership Theory:

The situational theory suggests that leadership styles should be matched to the maturity
of the subordinates (Hersey and Blanchard, 1997). The theory is primarily a model that
classifies the subordinate’s maturity in two dimensions: (a) psychological maturity and
(b) job maturity. Psychological maturity assesses the subordinate’s commitment,
motivation, and willingness to accept responsibility; job maturity examines the
subordinate’s experience, knowledge, and understanding of the job. As the subordinate’s
maturity grows, his or her relationship with the leader should be more relationship-
motivated than task-motivated. Little is known about the validity of this theory; however,
it has much in common with the path-goal theory.

Situational Approach to Leadership:

Rensis Likert developed a comprehensive leadership model that includes leadership styles
between two extremes of Theory X and Theory Y. The model represents four basic
leadership systems:
System 1 is an exploitative, authoritative style. This represents dictatorial
leadership behavior, with all decisions made by the manager and little employee
participation. A general attitude of distrust exists between parties.

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System 2 is a benevolent authoritative style; the leader while autocratic, tries to be

supportive of subordinates. Distrust between manager and employee is still

System 3 reflects consultative leadership behavior. Mutual regard is enhanced

because the manager solicits advice from those in subordinate roles while retaining
the right to make the final decisions.

System 4 is a participative leadership style. Subordinates are actively involved in

the decision making process. Consensus management is practiced by Japanese firms
is an example.

Research by Likert and others concluded that high productivity is associated with system
3 and system 4 while system 1 and 2 are characterized by lower output.

The Managerial Grid:

Robert Blake and Jane Mouton’s work in developing the Managerial Grid is another
behavioral approach to leadership. Blake and Mouton argue that managerial behavior is a
function of two variables: concern for people and concern for production.

Please refer to any book for figure.

The concern for people is shown in the vertical axis and the concern for production on the
horizontal axis of the grid. Each axis has a scale ranging from 1 to 9, with the higher
number indicating greater concern for specific variable. The grid that is developed
reflects five leadership styles:

Leadership style 9,1 is a task leadership based on authority and compliance. The
emphasis is on production, with little concern for people.

Leadership style 5,5 is organization man management. It is middle –of- the road
style that puts equal emphasis on people and production.

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Leadership style 1,9 by contrast, reverses the emphasis of style 9,1. This is also
called country-club management. This style concentrates on people, with little
emphasis on production.

Leadership style 1,1 is called impoverished management. It emphasizes neither on

people nor on production and little leadership is exhibited.

Leadership style 9,9 or team management emphasizes both people and

production. The managerial grid highlights the importance of moving leadership
toward a 9.9 format.

Least Preferred Co-worker Theory (LPC THEORY):

The LPC theory was the first true situational theory of leadership. It was developed by
Professor of Psychology and management at the University of Washington, Fred Fiedler.

Fiedler sought to evaluate the leadership success relationship between leadership style
and situational favorableness. He measured leadership style by asking leaders to rate their
least preferred co-workers. Leaders with high LPC score viewed their least preferred co-
workers more favorably then did those with low LPC scores. High LPC leaders were
considered relationship-motivated, while low LPC scores implied a task-motivated
leadership style. Fiedler points out that LPC does not actually measure behavior, but
personality attributes. Hence the leader cannot readily change personality or leadership
style, but can change the situation. Situational favorableness is affected by leader-
member relations, degree of task structure and the leader’s power.

A high degree of situational favorableness implies that employees can be led with relative
ease, while a low degree of situational favorableness suggests that it would be difficult
for the leader to direct and lead workers.

The essence of the theory is that people become leaders not only because of the attributes
of their personalities but also because of various situational factors and interactions
between leaders and group members.

Critical Dimensions of the Leadership Situations:

On the basis of his studies, Fiedler described three critical dimensions of leadership
situation that help determine what style of leadership will be the most effective.

Position power: This is the degree to which the power of a position, as

distinguished from other sources of power such as personality or expertise, enables a
leader to set group members to comply with directions, in the case of managers, this
is the power arising from organizational authority. As Fiedler points out, a leader with
clear and considerable position power can obtain good followership more easily than
one without such power.

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Task Structure: With this dimension, Fiedler had in mind the extent to which tasks
can be clearly be spelled out and people held responsible for them. If tasks are clear
(rather than vague and unstructured), the quality of performance can be more easily
controlled and group members can be held more definitely responsible for

Leader –member relations: Fiedler regarded this dimension as the most important
form of a leader’s point of view, since position power and task structure may be
largely under the control of an enterprise. It has to do with the extent to which group
members like and trust a leader and are willing to follow the leader.

The Path-Goal Theory:

The path goal theory is one of the more recent contributions to the study of leadership.
Robert House and Terence R. Mitchell have done considerable work in this area and a
general leader ship theory has emerged.

The path-goal theory suggests that the main function of the leader is to clarify and set
goals with subordinates, help them find the best path for achieving the goals and remove
obstacles. House and Mitchell describe the concept as follows:
The maturational function of the leader consists of increasing the number of kinds of
personal payoffs to subordinate for work- goal achievement and making paths to these
payoffs easier to travel by clarifying the paths, reducing the road blocks and pitfalls
and increasing the opportunity for personal satisfaction en route.

Expectancy theory is the theoretical basis of the path-goal concept of leadership.

Expectancy theory holds that a person’s perception of achieving a prized reward or goal
through effective job performance will motivate the individual. However, the person must
see clearly the relationship between his or her efforts and effective job performance
leading to desired objectives. Expectancy theory implies that employee motivation is
dependent on leader behavior influencing goal paths and the relative attractiveness of the
goals involved.

Two-general propositions have emerged for the path-goal theory, according to House and
Leader behavior is acceptable and satisfying to subordinate to the extent that
subordinate see such behavior as either or immediate source of satisfaction or as
instrumental to future satisfaction.
Leader behavior will be motivational to the extent that a) such behavior makes
satisfaction of subordinates’ needs on contingent on effective performance and , b)
such behavior complements the environment of subordinates by providing the
coaching, guidance, support, and rewards necessary for effective performance.

Two-contingency factors are hypothesized for the path-goals concept: a) the subordinates
personal characteristics such as their needs, self-confidence and abilities and b) the work

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environment; including such as the task, the reward, and the relationship with co-

The path-goal theory first considers leader behavior, and then considers the contingency
factors; their results and finally, the resulting subordinate attitudes and behavior.

Path-goal theory outlines four major leader behaviors that can affect subordinate
attitudes and behavior. First, the directive leader provides specific guidelines on what,
how and when work should be performed. The supportive leader considers the need of
subordinates and attempts to make a job more pleasant. The participative leader consults
with subordinates and uses their inputs when making decisions. Finally, the achievement-
oriented leader challenges subordinates to excel, conveying high expectations and

Charismatic Leadership Theory:

The current theories of charismatic leadership were strongly influenced by the ideas of an
early sociologist named Max Weber. Charisma is a Greek word that means, “divinely
inspired gift,” such as the ability to perform miracles or predict future events. Weber
(1947) used the term to describe a form of influence based not on tradition or formal
authority but rather on follower perceptions that the leader is endowed with exceptional
qualities. According to Weber, charisma occurs during a social crisis, when a leader
emerges with a radical vision that offers a solution to the crisis and attracts followers who
believe in the vision.

Charismatic leadership theory is an extension of attribution theory. It says that followers

make attributions of heroic or extraordinary leadership abilities when they observe
certain behaviors. Studies of charismatic leadership have, for the most part, been directed
at identifying those behaviors that differentiate charismatic leaders from their non-
charismatic counterparts. Conger and Kanungo (1987) proposed a theory of charismatic
leadership based on the assumption that charisma is an attributional phenomenon.
Subsequently, a refined version of the theory was presented by Conger (1989) and by
Conger and Kanungo (1998). According to the theory, follower attribution of charismatic
qualities to a leader is jointly determined by the leader’s behavior, expertise, and aspects
of the situation.

Several authors have attempted to identify personal characteristics of the charismatic

leader. Robert House has identified three: extremely high confidence, dominance, and
strong convictions in his or her beliefs. Warren Bennis, after studying ninety of the most
effective and successful leaders in the United States, 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 their pursuit of their vision; and they knew
their own strengths and capitalized on them. The most recent and comprehensive
analysis, however, has been completed by Jay Conger and Rabindra Kanungo at
McGill University. Among their conclusions, they propose that charismatic leaders have

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an idealized goal that they want to achieve and a strong personal commitment to that
goal, are perceived as unconventional, are assertive and self-confident, and are perceived
as agents of radical change rather managers of the status quo. The following table
summarizes the key characteristics that appear to differentiate charismatic leaders from
non-charismatic ones.


• Self-Confidence: Charismatic leaders have complete confidence in their judgment

and ability

• Vision. They have an idealized goal that proposes a future better than the status quo.
The greater the disparity between this idealized goal and the status quo, the more
likely that followers will attribute extraordinary vision to the leader.

• Ability to articulate the vision. They are able to clarify and state the vision in terms
that are understandable to others. This articulation demonstrates an understanding of
the followers’ needs and, hence, acts as a motivating force.

• Strong Convictions about the vision. Charismatic leaders are perceived as being
strongly committed, and willingly to take on high personal risk, incur high costs, and
engages in self-sacrifice to achieve their visions.

• Behavior that is out of the ordinary. They engage in behavior that is perceived as
being novel, unconventional, and counter to norms. When successful, these behaviors
evoke surprise and admiration in followers.
• Appearance as a change agent. Charismatic leaders are perceived as agents of
radical change rather than as caretakers of the status quo.
• Environment Sensitivity. They are able to make realistic assessment of the
environmental constraints and resources needed to bring about change.

Source: Based on Jay A. Conger and R. N. Kanungo, “Behavioral Dimensions of Charismatic Leadership,” in
Jay A. Conger and R. N. Kanungo, Charismatic Leadership (San Francisco: Jossey-Bass, 1988, p.91.)

****Indicators of Charisma:
Evidence of charismatic leadership is provided by the leader-follower relationship. As in
the earlier theory of House (1997), a charismatic leader has profound and unusual effects
on followers. Followers perceive that leader’s beliefs are correct, they willingly obey the
leader, they feel affection toward the leader, they are emotionally involved in the mission
of the group or organization, they have high performance goals and they believe that they
can contribute to the success of the mission. Attribution of extraordinary ability to the
leader is likely, but in contrast to the theory by Conger and Kanungo (1987), it is not
considered a necessary condition for charismatic leadership.

Leader Traits and Behaviors:

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Leader traits and behaviors are key determinants of charismatic leadership. Charismatic
leaders are likely to have a strong need for power, high self-confidence, and a strong
conviction in their own beliefs and ideals. The leadership behaviors that explain how a
charismatic leader influences the attitude and behaviors of followers include the
following: 1) articulating an appealing vision, 2) using strong, expressive forms of
communication when articulating the vision, 3) taking personal risks and making self-
sacrifices to attain the vision, 4) communicating high expectations, 5) expressing
confidence in followers, 6) modeling behaviors consistent with the vision, 7) managing
follower impressions of the leader, 8) buildi8ng identification with the group or
organization, and 9) empowering followers.


Prentice Hall, India 2006

Transactional Versus Transformational Leadership

Transactional leaders are leaders who guide or motivate their followers in the direction of
established goals by clarifying role and task requirement.

Transformational leaders are those who provide individualized consideration, intellectual

stimulation, and possess charisma.

Transformational leaders focus on developing others to their fullest potential. Their goal
is to change and transforms others in a positive way. Transformational leaders enable
others to achieve beyond what is expected. Northhouse’s (2004) description of one of the
main characteristics of transformational leadership-intellectual simulation –that provides
a direct link to creativity:

It includes leadership that stimulates followers to be creative and innovative, and to

challenge their own beliefs and values as well as those of the leader and the organization.
This type of leadership supports followers as they try new approaches and develop
innovative way of dealing with organizational issues. It promotes followers’ thinking out
on their own and engaging in careful problem solving.

With transformational leadership, the followers feel trust, admiration, loyalty, and respect
toward the leader, and they are motivated to do more than they originally expect to do.
According to Bass, the leader transforms and motivates followers by 1) making the more
aware of the importance of task outcomes, 2) inducing them to transcend their own self-
interest for the sake of the organization or team, and 3) activating their higher-order
needs. In contrast, transactional leadership involves an exchange process that may result
in follower compliance with leader requests but is not likely to generate enthusiasm and
commitment to task objectives.

For Bass (1985), transformational and transactional leadership are distinct but not
mutually exclusive process. Transformational leadership increases follower motivation

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and performance more than transactional leadership, but effective leaders use
combination of both types of leadership.

*Characteristics of Transformational and Transactional Leaders

• Idealized influence • Contingent reward
• Individualized consideration • Active management by exception
• Inspirational motivation • Passive management by exception
• Intellectual stimulation

*BASED ON B.M. Bass, A New Paradigm of Leadership: An Inquiry into Transformational

Leadership ( Alexandria, VA: U. S. Army Research Institute for the Behavioral and Social Sciences,

Characteristics and Approaches of Transformational versus Transactional Leaders.

Transactional Leaders

1. Contingent reward: Contracts exchanges for rewards for effort, promises reward
for good performance, recognizes accomplishments.
2. Management by exception (active): Watches and searches for deviations from
rules and standards, takes corrective action.
3. Management by exception (passive): Intervenes only if standards are not met.
4. Laissez Faire: Abdicates responsibilities, avoid making decisions.

Transformational Leaders
1. Charisma: Provides vision and sense of mission, instills pride, gains respect and
2. Inspiration: Communicates high expectations, use symbols to focus efforts,
expresses important purposes in simple way
3. Intellectual stimulation: Promotes intelligence rationality, and careful problem
4. 4. Individual Consideration: Gives personal attention, treats each employee
individually, coaches, advises.

Chararacteristics of transformational leaders:

1. They identify themselves as change agents
2. They are courageous
3. They believe in people
4. They are value-driven
5. They are lifelong learners
6. They have the ability to deal with complexity, ambiguity, and uncertainty.
7. They are visionaries.

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Development of Leaders:
On the job training
Role-playing method
Case study
Training arranged by specialized institutions
Sensitivity training
Game theory
University courses

Evaluation of Leaders:
Goal achievement
Motivational power
Influence over subordinates/followers/group members
Strong conviction about the mission
Environmental sensitivity

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