Part 3.

Theories of Leadership
3.1. Path Goal Theory: is how leaders motivate subordinates to accomplish designated
goals. In contrast to the situational approach, which suggests that a leader must adapt
to the development level of subordinates, and unlike contingency theory, which
emphasize the match between the leader’s style and specific situational variables, path
goal theory emphasizes the relationship between the leader’s style and the
characteristics of subordinates and the work setting. The underlying assumption of
path-goal theory is derived from expectancy theory, which suggests that subordinates
will be motivated if they think they are capable of performing their work, if they believe
their efforts will result in certain outcome, if they believe that the payoffs for doing their
work are worthwhile.

 The Path-Goal Theory of Leadership was developed to describe the way that
leaders encourage and support their followers in achieving the goals they have
been set by making the path that they should take clear and easy.

In particular, leaders:

 Clarify the path so subordinates know which way to go.

 Remove roadblocks (obstacles) that are stopping them going there.

 Increasing the rewards along the route.

 Provide support

The different components of path goal theory include leader’s behavior, subordinates
characteristics, task characteristics and motivation.

House and Mitchell (1974) describe four styles of leadership:

1. Supportive leadership

2. Directive leadership

3. Participative leadership

4. Achievement-oriented leadership

Directive leadership

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  Telling followers what needs to be done and giving appropriate guidance along
the way.
 This includes giving them schedules of specific work to be done at specific times.
 Rewards may also be increased as needed and role ambiguity decreased (by
telling them what they should be doing).
 This may be used when the task is unstructured and complex and the follower is
inexperienced.
 A directive leader sets clear standards of performance and makes the rules and
regulations clear to subordinates.
 This increases the follower's sense of security and control and hence is
appropriate to the situation.
Supportive leadership

 Considering the needs of the follower, showing concern for their welfare and
creating a friendly working environment.

 This includes increasing the follower's self-esteem and making the job more
interesting.

 This approach is best when the work is stressful, boring or hazardous

 Leaders go out of their way to make work pleasant for subordinates.

Participative leadership
 Consulting with followers and taking their ideas into account when making
decisions and taking particular actions.
 Invites subordinates to participate (share) in decision making.
 This approach is best when the followers are expert and their advice is both
needed and they expect to be able to give it.
Achievement-oriented leadership
 Setting challenging goals, both in work and in self-improvement (and often
together).
 High standards are demonstrated and expected. The leader shows faith in the
capabilities of the follower to succeed.

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  Expects a lot from subordinates, and leaders show high degree of confidence that
subordinates are capable of establishing and accomplishing challenging work.
 This approach is best when the task is complex.
Leaders who show the way and help followers along a path are effectively 'leading'.
This approach assumes that there is one right way of achieving a goal and that the
leader can see it and the follower cannot. This casts the leader as the knowing person
and the follower as dependent. It also assumes that the follower is completely rational
and that the appropriate methods can be deterministically selected depending on the
situation.
Subordinate Characteristics: It determines how a leader behavior is interpreted by
subordinates in a given work context. Researchers have focused on subordinates’ needs
for affiliation, preference for structure, desire for control and self perceived level of task
ability. The characteristics and many others determine the degree to which subordinates
find the behavior of a leader an immediate source of satisfaction or instrumental to
some future satisfaction.
Path goal theory predicts that subordinates who have strong needs for affiliation prefer
supportive leadership because friendly and supportive leadership is a source of
satisfaction. For subordinates, who are dogmatic and authoritarian and have to work in
uncertain situation, path goal theory suggests directive leadership because that
provides psychological structure and task clarity.

Subordinates’ desire for control have received special attention in path goal research
through studies of a personality construct locus of control that can be subdivided in to
internal and external dimension. Subordinates with an internal locus of control believe
that they are in charge of the events that occur in their life, where as those with an
external locus of control believe that chance, fate or outside force determine life events.
Path-goal theory suggests that for subordinates with an internal locus of control,
participative leadership is most satisfying because it allows them to feel in charge of
their work and to be an integral part of decision making. For subordinates with an
external locus of control, directive leadership is best because it parallels subordinates’
feelings that outside forces control their circumstances.

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Another way in which leadership affects subordinates’ motivation is the subordinates’
perception of their own ability to perform a specific task. As subordinates’ perception of
their own abilities and competence goes up, the needs for directive leadership goes
down. In effect, directive leadership becomes redundant and perhaps excessively
controlling when subordinates feel competent to complete their own tasks.

Task Characteristics: Task characteristics include the design of subordinates’ task, the
formal authority system of the organization, and the primary work group of
subordinates. Collectively, these characteristics in themselves can provide motivation
for subordinates. When a situation provides a clearly structured task, strong group
norms and an established authority system, subordinates will find the paths to desired
goals apparent and will not need a leader to clarify goals or coach them in how to reach
these goals. Subordinates will feel as if they can accomplish their work and that their
work is of value. Leadership in these kinds of contexts could be seen as unnecessary,
un-emphatic and excessively controlling. In some situations, however, the task
characteristic may call for leadership involvement. Tasks that are unclear and
ambiguous call for leadership input that provides structure. A special focus of path-goal
theory is helping subordinates overcome obstacles. Obstacles could be just about
anything in the work setting that gets in the way of subordinates.
How does Path-Goal theory work?
It is an approach to leadership that’s not only theoretically complex, but also pragmatic.
In theory, it provides a set of assumptions about how various leadership interact with
characteristics of subordinates and the work setting to affect the motivation of
subordinates. In practice, the theory provides direction about how leaders can help
subordinates to accomplish their work in a satisfactory manner.
Leadership Behavior Subordinates Characteristics Task Characteristics
Directive Dogmatic Ambiguous
Provides guidance and Authoritarian Unclear rules complex
psychological structure
Supportive Unsatisfied Repetitive
Provides nurturance Need affiliation Unchallenging
Needs human touch Mundane

Participative Autonomous Ambiguous

Provides involvement Need for control Unclear
Need for clarity Unstructured

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Achievement Oriented High expectations Ambiguous
Provides challenges Need to excel Challenging
Complex
Strengths:

 It provides a useful theoretical framework for understanding how various

leadership behavior affect subordinates’ satisfaction and work performance.
 It attempts to integrate the motivation principles of expectancy theory in to a
theory of leadership.
 This theory as a greatest contribution provides a model that in certain ways is
very practical.

Criticisms:

 Path-Goal theory is so complex and incorporates so many different aspects

leadership that interpreting the theory can be confusing.
 The second criticism is that it has received partial support from the many
empirical research studies that have been conducted to test its validity.
 The other criticism is that it fails to explain adequately the relationship between
leadership behavior and worker motivation.
 A final criticism can be made path-goal theory concerns a practical outcome of
the theory. It suggests that it is important for leaders to provide coaching,
guidance and direction for subordinates, to help subordinates define and clarify
goals and to help subordinates around obstacles.

3.2. Leader-Member Exchange (LMX) Theory

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This theory conceptualizes leadership as a process that is centered on the interaction
between leaders and followers. It makes the dyadic relationship between leaders and
followers the focal point of the leadership process.

 Leader-Member Exchange Theory, also called LMX or Vertical Dyad Linkage

Theory, describes how leaders in groups maintain their position through a series
of tacit exchange agreements with their members.

 In-group (expanded and negotiated role responsibilities-extra roles)

and out-group 9based on formal employment contract)

 The LMX process:

 These relationships, if they are going to happen, start very

soon after a person joins the group and follow three stages.

1. Role taking

 The member joins the team and the leader assesses their abilities and talents.

 Based on this, the leader may offer them opportunities to demonstrate their
capabilities.

 Another key factor in this stage is the discovery by both parties of how the other
likes to be respected.

2. Role making

 In the second phase, the leader and member take part in an unstructured and
informal negotiation whereby a role is created for the member and the often-tacit
promise of benefit and power in return for dedication and loyalty takes place.

 Trust-building is very important in this stage, and any felt betrayal, especially by
the leader, can result in the member being relegated to the out-group.

3. Routilization

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  In this phase, a pattern of ongoing social exchange between the leader and the
member becomes established.

 Success factors

 Onwards and upwards

 So what?

Using it

 When you join a team, work hard to also join the inner circle.

 Take on more than your share of administrative and other tasks. Demonstrate
unswerving loyalty.

 See your leader's point of view. Be reasonable and supportive in your challenges
to them, and pick your moments carefully.

 As a leader, pick your inner circle with care. Reward them for their loyalty and
hard work, whilst being careful about maintaining commitment of other people.

 Defending

 If you want to be an 'ordinary' member of a team, play your part carefully. There
will be others with more power. If you want to lead an equal team, beware of
those who curry favor.

Leadership Making: Research on LMX theory focuses on how exchanges between

leaders and subordinates can be used for leadership making. Leadership making is a
prescriptive approach to leadership emphasizing that a leader should develop high
quality exchanges with all of the leader’s subordinates rather than just a few. It attempts
to make every subordinate feel as if he or she is part of the in group and by so doing,
avoids the inequalities and negative implications of being in an out-group. In general
leadership making promotes a partnership in which the leader tries to build effective
dyads with all employees in the work unit. Graen and Uhl-Bien (1991) suggested that
leadership making develops progressively over time in three phases

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Phase 1. The stranger phase: During this phase, the interaction in the leader-
subordinate dyad generally are rule bound, relying heavily on contractual relationships.
Leader and subordinate relate to each other within prescribed organizational roles.
They have lower-quality exchanges, similar to those out group members. The
subordinate complies with formal leader, who has hierarchical status for the purpose of
achieving the economic rewards the leader controls. The motive of the subordinate
during the stranger phase are directed towards self-interest rather than towards the
good of the group.

Phase 2. The acquaintance Phase: This phase begins with an offer by the leader or the
subordinate for improved career oriented social exchanges, which involve sharing more
resources personal or work related information. It is a testing period for both the leader
and the subordinate to assess whether the subordinate is interested in taking more roles
and responsibilities and to assess whether the leader is willing to provide new
challenges for subordinates. During this time, dyads shift away from interactions that
are governed strictly by job descriptions and defined roles and move towards new ways
of relating. As measured by LMX theory, it could be said that the quality of their
exchanges has improved to medium quality. Successful dyads in the acquaintance
phase begin to develop greater trust and respect for each other.

Phase 3. The mature Partnership Phase: It is marked by high quality leader-member

exchanges. People who have progressed to this stage in their relationships experience a
high degree of mutual trust, respect and obligation toward each other. They have tested
their relationship and found that they can depend on each other. In this relationship,
there is a high degree of reciprocity between leaders and subordinates: each affect and
is affected by the other. In this stage, members may depend on each other for favors and
special assistance.

How does the LMX theory work?

This theory works in two ways: it describes leadership and prescribes leadership. In
both instances, the central concept is the dyadic relationship that a leader forms with

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each of the leader’s subordinates. Descriptively, LMX theory suggests that it is
important to recognize the existence of in groups and out-groups within a group or
organization. Prescriptively, it is best understood within the leadership making model
of Graen and Uhl-Bien (1991).These two writes advocate that leaders should create a
special relationship with all subordinates, similar to the relationship described as in-
group relationships.

Strengths:

 It is a strong descriptive theory. Intuitively, it makes sense to describe work units

in terms of those who contribute more and those who contribute less to the
organization.
 LMX theory is unique because it is the only leadership approach that makes the
concept the dyadic relationship the center piece of leadership process.
 LMX theory is noteworthy because it directs our attention to the importance of
communication in leadership.
 LMX theory provides an important alert for leaders. It warns leaders to avoid
letting their conscious or unconscious biases influence who is invited in to the in-
group.
 The final strength of the theory is that it is supported by large body of research to
substantiate how the practice of LMX theory is related to positive organizational
outcomes.

Criticisms:

 The most obvious criticism is that it runs counter to the basic human value of
fairness. Throughout our lives, beginning when we are very young, we are
taught to try to get along with everyone equally.
 The second criticism of this theory is that the basic idea of the theory is not fully
developed. It fails to explain how high quality leader-member exchanges are
created.
 The third criticism has been raised about the measurement of leader-member
exchanges in LMX theory.

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