Chapter 12

Leadership in organisational settings

Leadership
- The ability to influence, motivate and enable others to contribute towards the effectiveness of the
organisations of which they are members
- Leaders motivate others through persuasion and other influence tactics. They use their
communication skills, rewards and other resources to energise the collective towards the
achievement of challenging objectives.
- Leaders are enablers. They arrange the work environment such as allocating resources, altering
work relationships and buffering from outside interferences so employee can achieve organizational
objectives more easily.
- a leader is a person inspiring confidence within the followers and drives them to act whereas
leadership is the ability of leading other people
- Leadership styles have a huge role to play in enhancing employees’ motivation. Furthermore, the
success of an employee with that of an organization relies on the effectiveness of the leader’s
behaviour. The kind of leadership style the manager adopts further leaves either a positive or a
negative influence on the employees conferring to the situation. It is a proven fact that every
leadership style has a varied impact on the employee behaviour at the workplace.

Shared leadership (case study - how can John improve the shared leadership concept)
- Shared leadership views leadership as a role rather than a formal position, so employees
throughout the organization act informally as leaders as the occasion arises. These situations include
serving as champions for specific idea or changes, as well as filling leadership roles where it is
needed.

• This is the view that leadership is broadly distributed rather than assigned to one person.
• Employees are leaders when they champion change in the company or team.
• Shared leadership calls for:
– formal leaders willing to delegate power and encourage employees to take initiative
and risks without fear of failure (eg learning orientation culture)
– collaborative culture (employees support each other) rather than internally
competitive culture.
– Shared leadership lacks formal authority, so it operates best when employee ability
to influence through persuasion, enthusiasm, logical analysis and involvement of co-
workers in their idea or vision

Transformational leadership perspective (case study, how to become a transformational

leadership)
• This is one of the most popular views of leadership.
• Transformational leadership views leaders as change agents. They create, communicate and
model a shared vision for the team or organisation.
• They encourage experimentation so employees find a better path to future.
Transformational leaders also build commitment in followers to strive for that vision.
• Transformational leadership motivates followers through behaviours that persuade and earn
trust. Communicating an inspiring vision is a transformational leadership behaviour that
motivates followers to strive for that vision.
• Transformational leadership builds follower empowerment, which tends to reduce
dependence on the leader.
 • Subordinate are more satisfied and have higher effective organisational commitment,
perform jobs better, engage in more citizenship behaviours and make better or more
creative decisions.

Example:
 In this style, the leaders focus on accepting challenges to deliver best possible solutions and meet
the demands of change. Thus, focus is on achieving quality with excellence in productivity. This style
is suitable for CAPCO where changes are frequent and so risk taking element is encouraged among
employees to deliver possible outcomes. Thus, brain storming actions and decisions are made to
transform thinking and ability of employees and inspire them to meet challenges. Whereas, it is not
feasible for British Gas, which has tall structure and where there is less, need of change leadership.   

Four elements of transformational leadership to develop and communicate a strategic vision,

model the vision, encourage experimentation and build commitment to the vision.

• Create a strategic vision:

– image of company’s attractivefuture
– motivates and bonds employees
– leader champions the vision
• Communicate the vision:
– frame message around a grand purpose
– share mental model of the future
– use symbols, metaphors, stories

• Model the vision:

– walk the talk
– symbolise and/or demonstrate the vision through behaviour
– employees trust leader more
• Encourage experimentation:
– support a learning orientation
– question current practices
– experiment with new ways

• Build commitment to the vision:

– increased through communicating and modelling the vision
– increased through employee involvement in shaping the shared vision
Transformational leadership and charisma
• Emerging view: charisma differs from transformational leadership
• Charisma is a personal trait that provides referent power:
– does not necessarily attempt to change the organisation
– associated with narcissism

Evaluating the transformational leadership perspective

• Transformational leadership is important:
– higher employee satisfaction, performance, organisational citizenship, creativity
• Transformational leadership limitations:
– some models have circular logic:
 define transformational leaders by their success rather than their behaviour
(result: no predictive value)
– universal theory:
 need a contingency-oriented theory
 recognise differences across cultures

Managerial leadership perspective

• Leading (transformational leadership) differs from managing (managerial leadership).
• Managerial leadership: a leadership perspective stating that effective leaders help
employees improve their performance and wellbeing to support current objectives and
practices:
– depends on transformational leadership to set the right direction
Managerial leadership: interdependent perspective
Managerial leadership
• Assumes the organisation or departmental objectives are stable and aligned
• Focuses on continuous development
• More micro-focused and concrete
Transformational leadership
• Assumes the organisation’s current direction is misaligned and needs to change
More macro-focused and abstract

Task- and people-oriented leadership styles (case study, to discuss)

Task-oriented leadership
- include behaviours that define and structure work roles. Task oriental leader assign employees to
specific tasks, set goals and deadlines, clarify work duties and procedures, define work procedures
and plan work activities.
- Task-oriented leadership include assigning employees to specific tasks, clarifying their work
duties and procedures, ensuring they follow company rules and pushing them to reach their
performance capacity.

People-oriental leadership
- include behaviours such as listening to employees for their opinions and ideas, creating a
pleasant physical work environment, showing interest in staff, complimenting and recognising
employees for their effort and showing consideration of employee needs.
- People-oriented leadership behaviours include showing mutual trust and respect for
subordinates, demonstrating a genuine concern for their needs and having a desire to look out for
their website.

Servant leadership styles (case study: how to turn John to become a servant leader)

• Servant leadership defines leadership as serving others to support their need fulfilment and
personal development and growth. Servant leaders have a natural desire or ‘calling” to serve
others. They maintain a relationship with others that is humble, egalitarian, and accepting.
Servant leader also anchor their decisions and actions in ethical principles and practices.
• Servant leadership is an extension of people-oriented leadership, because it defines
leadership as serving others in ways that assist their need fulfilment and personal
development and growth.
• The main objective of servant leadership is to help other stakeholders fulfil their needs and
potential, particularly to become healthier, wiser, freer, more autonomous, more likely
themselves to become servants.
• The view that leaders serve followers, rather than vice-versa; leaders help employees fulfil
their needs and are coaches, stewards and facilitators of employee development:
– have a natural desire or ‘calling’ to serve others
– do not view leadership as a position of power
– decisions and actions bounded by ethical principles and practices

Path–goal leadership theory

• Effective leaders choose the most appropriate leadership style(s), depending on the
employee and the situation, to influence employee expectations about desired results and
their positive outcomes.
• Originated with expectancy theory of motivation:
– paths = employee expectancies
– goals = employee performance
• The theory states that effective leaders ensure employees who perform their jobs well
receive more valued rewards than those who perform poorly.

Path–goal leadership styles

• Directive leadership:
– Consists of clarifying behavious that provide a psychological structure to jobs
– same as task-oriented behaviours
• Supportive:
– provide psychological support for subordinates
– same as people-oriented behaviours
 – the leader is friendly and approachable, makes the work more pleasant, treats
employees with equal respect and shows concerns for the status, needs and
wellbeing of employees.
• Participative:
– encourage/facilitate employee involvement in decision beyond their normal work
activities. The leader consults with employees, asks for their suggestions and takes
these ideas into serious consideration before making decision.
• Achievement-oriented:
– encourage peak performance through goal setting and positive self-fulfilling
prophecy
– The leader set challenging goals, expects employees to perform at their highest
level, continuously seeks improvement in employee performance, and show high
degree of confidence that employees will assume responsibility and accomplish the
challenging tasks.

Path–goal leadership model

Situational leadership theory

• Effective leaders vary their style with the ability and motivation (or commitment) of
followers
• Four leadership styles: telling, selling, participating and delegating

Fiedler’s contingency model

• Leader effectiveness depends on whether the person’s natural leadership style (people-
oriented or task-oriented) is appropriately matched to the situation.
• The best leadership style depends on the level of situational control.
• Situational control is affected by three factors: leader–member relations, task structure and
position power.

Leader–member exchange theory (LMX)

 • Focuses on the relationship that exists between leaders and members
• May develop into trust in the long term
• Low LMX relationships:
– based on economic exchange
• High LMX relationships:
– based on social exchange
– increase employee commitment and organisational citizenship behaviours
– enhance job performance and retention

Leadership substitutes
• Contingencies that limit a leader’s influence or make a particular leadership style
unnecessary:
– e.g. training and experience replace task-oriented leadership
• Research evidence: substitutes help, but do not completely replace real leadership

Follower-centric perspective
• The romance of leadership: leaders have a sole impact on organisational success:
–  simplify life events
– life events are generated more by people than by uncontrollable natural forces

Implicit leadership theory

• People evaluate a leader’s effectiveness in terms of how well that person fits preconceived
beliefs about the features and behaviours of effective leaders (leadership prototypes);
people tend to inflate the influence of leaders on organisational events.
• Leadership exists in the mind of the followers.

Competency perspective
• Competencies: personal characteristics that lead to superior performance in a leadership
role (e.g. skills, knowledge, values)
• Emerging view: several competencies now identified as key influences on leadership
potential and predictors of effective leaders

Eight leadership competencies (case study)

1. Personality
– the big five personality dimension include conscientiousness, agreeableness,
neuroticism, openness to experience and extraversion are associated with effective
leadership to some extent.
2. Self-concept
– have a complex, internally consistent and clear self-concept as a leader. This leader
identity also includes a positive self-evaluation, high self-esteem, self-efficacy and internal
locus of control.
3. Drive
– related to their high conscientiousness and positive self-concept, successful leaders have
moderately high need for achievement.
4. Integrity
– have high moral capacity to judge dilemmas using sound values and to act accordingly.
 5. Leadership motivation
– Effective leader don see themselves as leaders. They are also motivated to lead others.
They have a strong need for socialised power, to lead others in accomplishing
organizational objectives and similar good deeds.
6. Knowledge of the business
– Good understanding of how their organizational works effectively.
7. Cognitive and practical intelligence
– Have above-average ability to process enormous amounts of information,
8. Emotional intelligence
– have a high level of emotional intelligence, able to recognize and regulate emotions in
themselves and in other people.

Authentic leadership
• Authentic leadership is the extent to which leaders are aware of, feel comfortable with and
act consistently with their self-concept.
• As people learn more about themselves, they gain a greater understanding of their inner
purpose and behave consistently with their self-concept and their value system.

Ethical leadership (case study, how can John become an ethical leader)
Good behavior is driven by ethical values and ethical values become embedded in organisation’s
dominant culture.
• Ethical leadership is vital for organisational conduct and effectiveness.
• Ethical leadership is determined by individual characteristics and demonstrated through
leaders’ behaviours.
• A strong sense of social obligation, an awareness of the impact of one’s behaviour on
others and a concern for followers are at the heart of ethical leadership.
• The ethical values and behaviours of leaders shape the behaviours of their employees.
• Leaders who have a strong moral identity reduce the unethical behavior within the groups.
Strong predictor of employees’ trust in their leaders.
• Ethical leaders tend to score high in agreeableness and conscientiousness. They have
characterised by a further four virutes, which are Prudence, Courage, Temperance and
Justice. These characteristics are associated with leaders who act in the best interests of
their followers and by respecting their rights, prevent harming them.
• The greater an organisation’s endorsement of ethical, respect and justice, through its
formal and informal policies, the stronger the ethical climate and support for ethical
leadership. Outside of organization, stakeholders play a key role in supporting ethical
leadership. Client, shareholders, investors and governmental and non-governmental
organization that make up a specific organisation’s stakeholder network vary in the extent
to which they endorse ethical values, and this turns affects the important that leaders
place on behaving ethically.

From google
Ethical leadership means to set high standards for ethical behavior and establish a corporate culture
that supports ethical values such as honesty, trustworthiness, responsibility, and accountability.

Ethical leaders have courage and moral compass. For example, an ethical leader may highlight that a
decision to do business in a certain country may not be illegal, but adhering to the country’s business
norms may violate the company’s code of conduct. It is critical for leaders to discuss ethics and
values, and how the decisions they make fit with the company’s espoused values and mission.

Develop an honest work environment where employees can report unethical behavior without fear
of punishment. which is that whistle-blowing is the key to improving the culture within
organizations.  it is important that the organization collectively communicates the importance of
ethical leadership and cognizance. 

Organisational culture and business ethics (case study)

• Ethical values become embedded in an organisation’s dominant culture.
• To create a more ethical organisation, leaders need to work on the embedded culture that
steers employee behaviour.

Offer an online platform, where employees can voice their concerns. also conduct town hall
meetings across our offices so employees can interact with management and give their feedback on
issues that affect them.

organizational leadership should both model and encourages ethics in the workplace due to its
ability to improve employee morale, increase organizational productivity, and ensure a healthy
corporate organization.
to promote ethical behavior throughout the organization, try to develop a transparent work
culture to both your employees and stakeholders. Make sure that company information is always
available to those who need it, and demonstrate transparency in your decision making process.
Employees are much more likely to reciprocate when managers exhibit trustworthy behavior.

ethical leadership in the workplace is challenging but a necessary component of every organization.
It is necessary not just to model and communicate ethical leadership, but feedback is equally
important. implement a multi-source feedback system. For example Procter & Gamble CEO A.G.
implements a system that enables employees to comment on his performance. When employees
see that there is a standardized process for providing such feedback that is a great start to building
organizational trust. However, this must simultaneously be combined with adherence to feedback as
mentioned throughout this report

Culture and leadership

• Societal cultural values and practices affect leaders:
– shape leaders’ values and norms
– influence decisions and actions
 – shape follower prototype of effective leaders
• Some leadership styles are universal, others differ across cultures:
– ‘charismatic visionary’ seems to be universal
– participative leadership works better in some cultures than others

Cultural competencies (GLOBE project)

Cultural competencies:
• assertiveness
• future orientation
• gender egalitarianism
• humane orientation

Leadership styles:
• charismatic and value-based
• team-oriented
• participative
• humane-oriented
• autonomous
• self-protective

Effective global leadership

• Lead with a culturally compatible style
• Universally endorsed style
• Match or exceed culture-specific expectations of leaders

Gender and leadership

• Male and female leaders have similar task- and people-oriented leadership
• Must be sensitive to follower expectations
• Participative leadership style is used more often by female leaders
• Evaluating female leaders:
– still receive negative evaluations as leaders due to prototypes and gender
stereotypes
– but evidence that they are good at emerging-leadership styles (coaching, teamwork)

Leadership in virtual settings

• Working across the globe and adoption of flexible working arrangements has led to virtual
teamwork and to a new leadership style.
• Leaders in virtual settings need to foster team trust and cohesion, provide support and
access to resources.