Chapter: 05

Leadership

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 LEADERSHIP
Leadership is the process of influencing and supporting others
to work enthusiastically toward achieving objectives.
According to Weihrich and Koontz, “Leadership is the art or
process of influencing people so that they will strive willingly
and enthusiastically toward the achievement of group goals.”

✓Influencing and supporting

others
✓ Others accept as leaders
✓ Achievement of group
goals

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Management and Leadership

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 Management and Leadership

1. Leadership is an important part of management, but it is not the

whole history.
2. The primary role of a leader is to influence others to
achieve the objective whereas managers role is to conduct
a set of activities including planning, organizing, staffing and
controlling.
3. Managers hold formal positions whereas any one who has
the ability to influence others can be a leader.
4. Managers achieve result by directing the activities of
others, whereas leaders create a vision and inspire others
to achieve this vision.

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 Trait Theory of Leadership
❑Trait theory of leadership states that physical, intellectual or
personal characteristic that differentiate between leader
and non-leaders or between successful and unsuccessful
leader.
❑In other word, physical characteristic such as height, body
size and shape, and personal attractiveness as well as
psychological factors such as intelligence, ambition and
aggressiveness will make a leader.
❑The current research on leadership traits suggests that
some factors do help differentiate leaders from non-
leaders.

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Trait Theory of Leadership
According to trait theory the leader must have the
following traits:
1) Honesty and integrity
2) Personal drive and energy
3) Desire to lead
4) Self-confidence
5) Charisma
6) Flexibility and adaptiveness
7) Cognitive ability
8) Creativity and originality

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Autocratic Consultative
leaders leaders

Participative Free-rein
leaders leaders

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1. Autocratic leaders
Autocratic leaders centralize power and decision making in
themselves. They structure the complete work situation for
their employees and they expect subordinate will do what they
are told.The leaders take full authority and full responsibility.

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 Autocratic leadership
Advantages
1. Satisfying for the leader
2. Permits quick decisions
3. Allows the use of less
competent subordinates
4. Strong direction and
structure for employees
Disadvantages
1. Most employees dislike it
2. Creates fear and
frustration
3. Seldom generate strong
organizational commitment
4. High turnover
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2. Consultative Leaders
These leaders ask employees for inputs prior to making a
decision. These leader may then choose to use or ignore
the information and advice received from employees.

If the inputs are seen as used, employees are likely to feel as

though they had a positive impact.

If the inputs are consistently rejected, employees are likely to

feel that their time has been wasted.

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3. Participative leaders
These leaders decentralize authority. They use input from
followers and participation by them. The leaders and groups
are acting as social unit. Employees are informed about
conditions and encouraged to express their ideas, make
suggestions, and take action.

The general trend is toward wider use

of participative practices because they
are consistent with the supportive and
collegial.

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4. Free-rein leaders
Free-rein leader uses his/her power very little and
subordinates get a high degree of independence in their
operations. Such leaders largely depend on subordinates to
set their own goals and the way of achieving them.
This leadership is effective when the subordinates are highly
knowledgeable, skilled and committed to take decision,
authority and responsibility to achieve goals of the
organization.

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Contingency Theory of Leadership
Fred E. Fiedler and his associates at the University of
Illinois came up with a contingency theory of leadership.
Contingency theory states that people become leaders
not only because of their personal attributes but also
various situational factors and the interactions between
leaders and group members.
On the basis of Fiedler’s studies, there are three critical
dimensions of leadership situation that help to determine
what style of leadership will be most effective.

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 Contingency Theory of Leadership
Three Critical Dimensions
1) Position power: This is the degree to which the power
of a position enables a leader to get group members to
comply with directions. In this case of managers, this is
the power arising from organizational authority. As Fiedler
points out, a leader with clear and considerable power
can obtain good followership more easily than one
without such power.

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Contingency Theory of Leadership
Three Critical Dimensions
2) Task structure: This is the extent to which task can be
clearly spelled out and people held responsible for them.
If the tasks are clear, the quality of performance can be
more easily controlled and group members can be held
more definitely responsible for performance.
3) Leader member relations: This is the degree to
which the group members like, trust and are willing to
follow the leader. This is most important dimension in
this approach of leadership.

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 Path Goal Theory by Robert House & Others
Robert house and others have developed the path goal
view the leadership. Path goal theory of leadership states
that leaders identify employee needs, provide appropriate
goals and connect goal accomplishment to rewards.
Here leaders provide both task support and psychological
support.
According to path goal theory the leaders roles are to help
employees understand--
➢ What needs to be done (The goals)
➢ How to do it (The path)

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 Path Goal Theory by Robert House & Others
The path goals theory identify four alternatives.
i. Directive leadership: The leader focuses on clear task
assignments, standards of successful performance, and
work schedules.
ii. Supportive leadership: The leader focuses on employees’
well-being and needs, and create comfortable work
environment.
iii. Achievement Oriented Leadership: The leader sets high
expectations for employee, and encourage the followers
that they should have the confidence to achieve these
goals.

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 Path Goal Theory by Robert House & Others
iv. Participative leadership: The leader invites employees
to provide input to decisions, and seriously seeks to
use their suggestions as final decisions are made.
The staff is given pertinent information regarding
company issues, and a majority vote determines
the course of action the company will take.

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 Full-range leadership theory (FRLT)
Full-range leadership theory (FRLT) is a well-
established leadership theory developed by Bass
and Avolio (1994) which consists of three
leadership behavior:
a) transformational leadership
b) transactional leadership and
c) laissez-faire leadership.

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 Transactional Leadership
❑ Bass (1985) added his points of view with the theory of
transactional leadership and stated the theory as an exchange
relationship between leaders and followers that exits as
rewards or requirements of the parties to satisfy the conditions
and achieve objectives.
❑ Followers meet the requirements of the leaders expecting praise,
rewards on fear of punishment (Bass et al., 2003).
❑ This theory is a realistic one as it gives importance on goal
accomplishment and exchange for both parties (Aarons, 2006).
❑ Transactional leaders are goal oriented rather focusing on the
development of the followers (Northouse, 2007).

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 Transactional Leadership
❑ Burns (1978) stated that they emphasize task clarification and
offer reward and punishment based on positive and negative
performance.
❑ Transactional leaders try to motivate followers by
providing clear set of goals, way to achieve goals, clarify
about performance appraisal, providing feedback on
performance and ensuring reward for if targets are achieved
(Bass, 1985).
❑ Contingent reward, active management by exception and
passive management by exception are the important
components of this style of leadership

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 Contingent reward
❑ It is the negotiation process between the leaders and the
followers as the leader’s exchange rewards to accomplish the task
by followers.
❑ Leaders develop specific goals and expectations and communicate
reward to stimulate followers (Bass et al., 2003). Contingent
reward is based on the level of employee performance.
❑ Leaders provide the reward if the followers meet the desired
performance level or expectation of the leaders. On the contrary,
followers will be criticised or punished if they cannot reach the
standard outcome (Yahaya and Ebrahim, 2016).
❑ Therefore, duties, responsibilities and work outcome are
determined by leaders and also by followers to gain rewards and
avoid punishment (Bass, 1985).

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 Active management by exception
❑ Active management by exception denotes to a leader who
plays an active role to find deviation comparing with the
standard, initiate corrective measures and implement rules and
regulations (Gill, 2006).
❑ Wu et al. (2006) illustrated that under this concept of
transactional leadership, leaders critically observe the behaviour
of employees and convict unwanted behaviours.
❑ Leaders take initiative to monitor the activities of the followers in
a systematic way and actively intrude when problems occur
(Yahaya and Ebrahim, 2016).
❑ Then, leaders try to find the reasons of the problems and
take required corrective action.

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 Passive management by exception
❑ When leaders do not actively involve and react to the
problems, then it is known as passive management by
exception.
❑ Here, leaders state the expectation and clarify the standard
and wait till the problem occurred but highly reluctant to
intervene into the problem (Yahaya and Ebrahim, 2016).
❑ Leaders allow the followers to do the job in their own way
and only intervene when any mistakes done by the
followers (Gill, 2006).
❑ So, they wait till the subordinates face any difficulties which are
visible and then interfere only due to the errors occurred.

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 Transformational Leadership
❑ The concept of transforming leader was first initiated by
Burns (1978) and he stated that transformational leadership
occurs when leaders can increase the level of followers’
motivation and morality.
❑ This leadership is more than the common exchange on
interest between leaders and subordinates.
❑ Transformational leaders focus on ideals and moral values
to involve followers and empower them to bring changes in
the organization.
❑ Transformational leaders emphasize on the development of
the followers based on their needs and encourage to
achieve more than the actual expectations (Bass, 1985).

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 Transformational Leadership
❑ Bass stated that transactional leaders achieve goals by making
aware the followers about the values of the target, encouraging
followers to think beyond the self-interest and focusing on
the high-level need of the employees.
❑ Empathising on collective interest rather than self-interest,
transactional leaders articulate a vision and inspire followers
to follow the vision (Lussier and Achua, 2007).
❑ Idealized influence, inspirational motivation, intellectual
stimulation, and individualized consideration are the four
important components of this style of leadership (Bass and
Avolio, 1994).

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 Idealized influence

❑ Idealized influence refers to the ability of the leader by which he

can be a role model for the followers and this is related to
charismatic power (Bass, 1985).
❑ Followers’ needs are prioritized over leaders’ need by idealized
influence leaders (Bass et al., 2003).
❑ Leaders with charisma have power to develop moral standard that
influence subordinates to pursue and admire leaders’ mission
(Northouse, 2007;Yahaya and Ebrahim, 2016).
❑ Leaders communicate a clear sense of goals, attach emotions and
shares potentials and perils with followers that become the
reasons of high commitment of the followers.

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 Inspirational motivation
❑ Inspirational leaders stimulate encouragement and boost
up confidence of the followers to achieve group goals and
perform the assigned task successfully (Yulk and Van Fleet, 1982).
❑ Leader sets high expectations, articulate a vision, communicate
the vision with followers, inspire to achieve goals which are
aligned to organizational goals and treat challenges as
opportunities (Gill, 2006).
❑ The spirits of employees are enhanced by providing meaningful
and challenging tasks (Bass et al., 2003) that will evolve a better
future.
❑ As a result, employees think to go beyond their own interest for
the sake of organizational or group interest.

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 Intellectual stimulation
❑ Intellectual stimulation refers that leaders arouse followers to
think creatively and believe on their ability to solve
problems (Bass,1985).
❑ In other words, it is the ability of the leaders to influence
followers to go extra mile, face challenges creatively and
intellectually involve in the decision making (Limsila and
Ogunlana, 2008).
❑ Intellectual stimulation includes new ideas, innovative solution,
new ways of doing things and solving problems, creative tactics
to face challenges and wisdom in making decision.

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 Individualized consideration
❑ Bass (1985) stated that consideration is an important base of
leader-follower relationship. When leaders focus on individualized
consideration, it leads to a strong relationship with each of the
subordinate (Yahaya and Ebrahim, 2016) and the relationship is
not limited to exchange of interest.
❑ Leaders, believe in individualized consideration, emphasize on
individual follower’ need and focus on personal development
(Limsila and Ogunlana, 2008).
❑ Delegation often contribute to develop the followers to current
level of solving problem and facing challenges, but leader also
involves as a guide or mentor.

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 Laissez-faire Leadership

❑ When there is an absent of effective leadership, it is denoted as

laissez-faire (Yulk, 2010).
❑ Under this leadership style, leaders avoid problem, less aware
about decision making, dislike to take feedback and refuse to
involve (Gill, 2006).
❑ They hardly interact with group members, don’t like to take the
responsibility and play a passive role in team activities (Sadler,
2003).
❑ In most of the cases, leaders ignore challenges and problems (Yulk,
2010) and don’t emphasize rewards and feedback regarding the
performance of the employees.
❑ Under this leadership style, leaders delegate most of the
decision to their subordinates (Zareen et al., 2015).

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 Laissez-faire Leadership

❑ Besides, subordinates suffer lack of guidance and

supervision and receives little support under the laissez-
faire leaders (Bradford and Lippitt, 1945).
❑ But, subordinates enjoy complete freedom to make decision
and use the required resources and materials.
❑ It is expected that followers will solve their own problem and as
a result they get a learning opportunity to develop
themselves (Eagly et al., 2003).
❑ However, laissez-faire leadership is considered as an effective
leadership approaches only when the followers are highly
skilled, knowledgeable, capable and belonging high
intention to do by their own (Chaudhry and Javed 2012).

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 Transactional VS Transformational Leader

COMPARISO TRANSACTIONAL TRANSFORMATIONAL

N LEADERSHIP LEADERSHIP

A leadership style in which the

A leadership style that employs
leader employs charisma and
rewards and punishments for
Meaning enthusiasm to inspire his
motivating followers is
followers is Transformational
Transactional Leadership.
Leadership.

Leader lays emphasis on the

Leader lays emphasis on his
Concept values, ideals, morals and
relation with followers.
needs of the followers.
Nature Reactive Proactive

Developing the existing Changing the existing

Works for
organizational culture. organizational culture.

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 Transactional VS Transformational Leader

COMPARIS TRANSACTIONAL TRANSFORMATIONAL

ON LEADERSHIP LEADERSHIP

Style Bureaucratic Charismatic

Focused on Planning and Execution Innovation

Attracting followers by putting

Motivational Stimulating followers by setting
their own self interest in the first
tool group interest as a priority.
place.
Transactional leaders emphasis on
Transformational leaders work
the role of supervision,
to enhance the motivation and
organization, and group
Emphasis engagement of followers by
performance and concerned
directing their behavior toward
about the day-to-day progress
a shared vision.
toward goals.

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 Charismatic Leadership
Martin Luther King, Bill Gates and Steve Jobs (co-
founder of Apple Computer) are frequently cited as
charismatic leaders.
What do they have in common?

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 Charismatic Leadership
Max Weber, a sociologist, defined charisma (from the Greek
for “gift”) more than a century ago as “a certain quality of an
individual personality, by virtue of which he or she is set
apart from ordinary people and treated as endowed with
supernatural, superhuman, or at least specifically exceptional
powers or qualities.
These are not accessible to the ordinary person and
are regarded as of divine origin or as exemplary, and on the
basis of them the individual concerned is treated as a leader.”
Weber argued that charismatic leadership was one of several
ideal types of authority.

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 Charismatic Leadership
The first researcher to consider charismatic leadership in
terms of OB was Robert House. According to House’s
charismatic leadership theory, followers attribute
heroic or extraordinary leadership abilities when they
observe certain behaviors.
A number of studies have attempted to identify the
characteristics of charismatic leaders:
➢ Articulate a vision
➢ Personal risk
➢ Sensitivity to follower needs
➢ Unconventional behavior

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 Charismatic Leadership
1. Vision and articulation: Has a vision—expressed as an
idealized goal—that proposes a future better than the
status quo; and is able to clarify the importance of the
vision in terms that are understandable to others.
2. Personal risk: Willing to take on high personal risk, incur
high costs, and engage in self-sacrifice to achieve the
vision.
3. Sensitivity to follower needs: Perceptive of others’
abilities and responsive to their needs and feelings.
4. Unconventional behavior: Engages in behaviors that are
perceived as novel and counter to norms.

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 The Managerial Grid
A well-known approach to defining leadership styles is the
managerial grid, developed decades ago by Robert Blake and
Jane Mouton.
The grid has two dimensions:
➢ Concern for people and
➢ Concern for production

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 The Managerial Grid
Concern for production
Concern for production includes the attitude of a
supervisor toward a wide variety of things, such as the
quality of policy decisions, procedures and processes,
creativeness of research, quality of service, work efficiency,
and volume of output.
Concern for people
Concern for people is likewise interpreted in a broad way.
It includes such elements as the degree of personal
commitment toward goal achievement, maintenance of the
self-esteem of workers, placement of responsibility on the
basis of trust, provision of good working conditions, and
maintenance of satisfying interpersonal relationship.
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The Managerial Grid

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 The Managerial Grid
The four extreme styles
Under the 1.1 style (referred to as impoverished
management), managers concern themselves very little with
either people or production and have minimum involvement
in their jobs; they have abandoned their jobs.
At the other extreme are the 9.9 managers, who display
in their actions the highest possible dedication both to
people and to production. They are the real “team
managers”, who are able to mesh the production needs of
the enterprise with the needs of individuals.

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 The Managerial Grid
Another style is 1.9 management (called country club
management by some), in which managers have little or no
concern for production but are concerned only for people.
They promote an environment in which everyone is relaxed,
friendly, and happy and no one is concerned about putting
forth coordinated effort to accomplish enterprise goals.

At another extreme are the 9.1 managers (sometimes

referred to as autocratic managers), who are concerned only
with developing an efficient operation, who have little or no
concern for people, and who are quite autocratic in their
style of leadership.

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 The Managerial Grid
By using these four extremes as points of reference, every
managerial technique, approach, or style can be placed
somewhere on the grid.
Clearly, 5.5 managers have medium concern for production
and for people. They obtain adequate, but not outstanding,
morale and production.

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