Topic 12: Leadership & Leadership Theories

Leader: Someone who can exert a high level of influence on a group of people. They can

influence them to reach a destination that is a common destiny for everybody. A leader is not a
formal managerial title. A leader can be a very informal person but has a tremendous ability to
influence others and control others. In the world of management, the words leaders and
managers are not the same. They are very close though but a leader may not necessarily be a
very good manager. Managers are not automatically very good leaders either.

Differences between managers and Leaders:

Managers: Managers usually copy others. They will look into how Taylor did it, Fayol did it,
and Steve Jobs did it. They want to be like them. A manager focuses on the systems and
structures of the organization. A manager relies on control. Managers have power and they rely
on them and other controlling mechanisms to make people behave in a way they want to
behave. A manager accepts the status quo. A manager does things right.

Leader: A leader does not copy others. A leader focuses on people. Their ultimate focus is
nothing but their followers. A leader relies on inspiration. Followers’ attachment to them is the
source of their power. A leader challenges the status quo. A leader does the right thing.

Power: Meaning it is the ability to control others. It is your ability to influence others. It is
your ability to alter others’ behavior. It is your ability to make people do things that they would
ordinarily not behave in.

Legitimate Power: A power that is attached to a formal managerial title/rank, not to the
person. One holds that position, one has that power, one no longer holds that position, and one
does not have that power. Exam: NSU does not give ShH any power but NSU has given a faculty
member some power, as long as he is a faculty member, he will exercise those power.
Reward Power: This allows someone to give others some rewards that result in a pleasant
experience for the recipient. The recipient will decide whether it is a reward or it is punishment.
It could be a verbal nod, money, appreciation, gift, etc. To have reward power, the power holder
must have 2 things. i. They must have the authority, and secondly, they must have the resource.
One without other reward power will not work.
Cohesive power: When power comes from cohesion. Cohesion means fear. It is the power
that is based upon fear meaning people will assume that punishment will be the consequence if
one does not comply. It is the power with which someone can punish others or someone can
make a threat to others that may result in punishment.

Expert Power: Power that is based on someone’s knowledge and expertise.

Reference Power: power that is based on followers’ identification with their leaders in other
words it means it is the power that is based on your faith and fortune. Example: Many brands
spend millions of dollars to promote their products through famous personalities when a
superstar wears particular sneakers or shoes, the idea is millions of his/her fans will do the same
thing.

Executive Power: a special power to make an important decision that is given to someone
that is highly privileged and with this power one can punish you, one can reward you, one can
save you from disaster.

Early Leadership Theory:

Trait Theory of Leadership: A great leader is born, not made. Traits mean characteristics.
Scholars said there are 6 traits to make a person great.

Drive: meaning it is your desire to lead people.

Integrity: means honesty and truthfulness. (The most important one)

Self-confidence: they have belief in themselves, and they have confidence that what they are
doing or saying is correct.
Knowledge: a sound understanding of their job, their firm, the organization where they have
to work, and the industry.

Intelligence: they seem to be very intelligent. It is their mental ability to deal with the
complexities of life.

Personal-behavioral Theory (P-B Theory): means the leadership style is not universal.
Leadership style should not remain the same rather leadership style should fall somewhere
between autocratic style and democratic style meaning a leader should not choose to be strictly
autocratic nor a leader should choose strictly democratic. Leadership styles vary from the two
ranges when the situation is needed.

Four main leader behavioral styles:

University of Iowa studies: Three styles of Leadership.

Autocratic style:
Democratic style: Allow to participate in decision-making and jointly solve the problem with
their leader.

Laissez-faire style:

Ohio State studies: The study proposes that there are two types of leaders.

Initiating structure: Meaning leaders who are extremely job focused.

Consideration style: leaders are very employee focused. It is the softer side of the
leadership style. They are very caring for their employees.

University of Michigan Study: introduced job-centered and employee-centered

leadership.
Job-centered leadership: means the managers are very job-focused, it is like initiating
structure. They mostly cared about production, and mostly cared about accomplishing the work.
Employee welfare is not their concern at this point.

Employee-centered relationship: They are more focused on employees’ mental state and
welfare and health rather.

Managerial-Grid Theory:

Contingency Theory of Leadership: Developed by Prof. Fred Fielder. This theory

deals with what the situation of a leader has to do with leadership style. How is your situation as
a manager or as a leader will influence your leadership style? The theory says the leader’s
leadership style will depend upon the favorableness or unfavorableness of their situations. Now
situations can be favorable if the leaders score high in all dimensions meaning leader-member
relationship is excellent, task is highly structured, and leaders enjoy tremendous power. If these 3
dimensions are high then leader’s situation is favorable but if not then leaders’ situation is
unfavorable. When the situation is highly favorable or highly unfavorable in both cases,
leadership style should be task oriented but if the situation falls somewhere between these two
extreme not very favorable or not very unfavorable, they are somewhere in between then
leadership style should be people oriented.The theory says a leader’s leadership style will depend
upon 3 situational dimensions.

i. Leader-member relationship: means it is the degree of trust, confidence, and loyalty

that followers have for their leaders.
ii. The task structure: means to what degree the leaders’ jobs are structured as opposed
to unstructured. Structured jobs mean leaders know how they will start the work and
 how they will finish it. Unstructured means leaders have to figure it out how these
problems have to be solved because there is no set solution for this one.
iii. Position power: refers it is the level of formal power vested onto the leaders meaning
do the leaders enjoy formal power given to them by the management or do they do
not have the formal power.

Path-Goal Theory:
This was introduced by Robert House. The theory is designed around 4 styles.
Directive: It means leaders will set clear dimensions for their employees and will not allow
any participation from their subordinates. Leaders behave in a way as if subordinates are passive
human beings, they are not qualified, and they are not worthy that I have to listen to them. So,
they have to be told what has to be done.

Supportive: Leaders show concern for the needs and follow and his friendly. Leaders will
allow everyone to share their opinion but leaders may not use those, leaders will make the final
decision. It is a Paternalistic way.
Participative: Leaders will deliberately ask for subordinates’ participation and opinion and
will use them. They will do things jointly.

Achievement-oriented leader: Leaders will set very challenging goals for their employees
that are difficult to achieve. They will require them to stretch beyond their limits but the leaders
will show their trust and confidence in them and the leaders will stay with the employees until
the job is done. Leaders will help them as well.

Transformational Leadership: Introduced by Max Weber. According to him, a

transformational leader is a charismatic person. Having charisma, the leader can have a
tremendous source of power to lead their subordinates. A transformational leader is someone
who can transform their followers to be charismatic and these leaders seem to be very brave and
courageous.