Chapter-7

Leadership

Leadership:
Leadership is the process of directing the behavior of others toward the accomplishment of some
objectives.

Leadership is defined as the art or process of influencing people so that they will strive
enthusiastically toward the achievement of group goal.

Leadership is defined as the process of influencing people so that they will contribute to
organizational and group goal.

Types of power
Power has been an important aspect of human civilization since time immemorial. Power might
be physical, political or social. In the context of business as well, power dynamics tend to
influence decisions and people transactions heavily. Power basically emanates from position or
authority which can influence people both positively and negatively. In 1959, social
psychologists John French and Bertram Raven identified five bases of power:
 Legitimate.
 Reward.
 Expert.
 Referent.
 Coercive.

Legitimate power:
Legitimate power also known as positional power and official power. Legitimate power is
granted through organizational hierarchy. As the power is defined by the organization, the leader
holds some lawful power because of his position in the organization.

Coercive Power- This kind of power involves the usage of threat to make people do what one
desires. In the organizational set up, it translates into threatening someone with transfer, firing,
demotions etc. it basically forces people to submit to one’s demand for the fear of losing
something.

Referent Power- This is a power wielded by celebrities and film stars as they have huge
following amongst masses who like them, identify with them and follow them. Hence, they exert
lasting influence on a large number of people for a large number of decisions.

Reward Power: Many employees are motivated by rewards and incentives to comply with
orders given by a superior. This motivation is an example of reward power. Additional examples
of reward power include public praise, wage increases, job promotions, new projects or training
opportunities, better roles and monetary benefits to influence people The purpose of reward
power is to trigger that part of human nature that appreciates being recognized for high
performance.

Expert Power
It is natural for people to respect and follow those who are experts in a given field or occupation.
Expert power results from the expertise a person has gained through the experiences and training

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that have marked her business career. Subordinates of a person who has gained expert power
believe that the leader will guide them correctly due to her vast expertise. In such a situation, the
person can exercise the power of knowledge to influence people

Leadership Types
Kurt Lewin's three leadership styles or behaviors, described below:
Authoritarian Leadership
Authoritarian leaders, also referred to as autocratic leaders, are characterized as domineering.
Authoritarian leaders make policies and decide appropriate division of labor from afar.
Authoritarian leadership is gained through punishment, threat, demands, orders, rules, and
regulations. The functions of authoritarian leadership include unilateral rule-making, task-
assignment, and problem solving while the roles of authoritarian followers include adhering to
the leader's instructions without question or comment.

Democratic Leadership
Democratic leaders are characterized by collective decision-making, active member or follower
involvement, fair praise, and restrained criticism; they facilitate collective decision-making.
Democratic leaders offer their followers choices and support. Democratic leadership, also
referred to as participative leadership, reflects democratic principles and processes including
self-determination, and equal participation.

Laissez-Faire Leadership
Laissez-faire leaders are characterized as uninvolved with their followers and members; in fact,
laissez-faire leadership is an absence of leadership style. Leaders of this style make no policies or
group-related decisions. Instead, group members are responsible for all goals, decisions, and
problem solving. Laissez-faire leaders have very little to no authority within their group
organization.

Theories of leadership
1. Trait theories of leadership:
Generally this theory is based on the qualities of leader. Researcher of leadership assumed that A
good leader is born not made. A good leader must have some qualities by which he will
influence on his subordinate or followers. Successful leaders tend to posses some characteristics.

Intelligence including judgments

Past achievement
Emotional maturity and stability
Dependability,
Persistence and a drive for continue achievement.
The skill to participate socially and adapt to various groups.

2) Situational theories of leadership:

Situational aspect of leadership assumes that appropriate leader’s behavior varies from one
situation to another. Successful leadership requires behavior that unites and stimulates follower
toward defined objectives in specific situations. All three elements leader, followers and situation
are variables that affect one another in determine appropriate leadership behavior.

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The interaction is expressed with formula

SL=f (L,F,S )
Where, F= Function
L= Leader
F= followers
S= Situation

3.Path-goal theory of leadership:

Path-goal theory of leadership is developed by Robert House. Path- goal leadership states that
the leader’s job is to use structure support, and rewards to create a work environment that helps
employees reach the organization’s goals.

The two major roles involved are to create a goal orientation and to improve the path toward the
goals so that they will be attained.

Blake and Mouton’s Managerial Grid

The treatment of task orientation and people orientation as two independent dimensions was a
major step in leadership studies. Many of the leadership studies conducted in the 1950s at the
University of Michigan and the Ohio State University focused on these two dimensions. Building
on the work of the researchers at these Universities, Robert Blake and Jane Mouton (1960s)
proposed a graphic portrayal of leadership styles through a managerial grid (sometimes called
leadership grid). The grid depicted two dimensions of leader behavior, concern for people
(accommodating people’s needs and giving them priority) on y-axis and concern for production
(keeping tight schedules) on x-axis, with each dimension ranging from low (1) to high (9), thus
creating 81 different positions in which the leader’s style may fall. (See figure 1).

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Impoverished Management (1, 1): Managers with this approach are low on both the
dimensions and exercise minimum effort to get the work done from subordinates. The leader has
low concern for employee satisfaction and work deadlines and as a result disharmony and
disorganization prevail within the organization

Task management (9, 1):  Here leaders are more concerned about production and have less
concern for people. The style is based on theory X of McGregor.

Middle-of-the-Road (5, 5): 

This is basically a compromising style wherein the leader tries to maintain a balance between
goals of company and the needs of people. Here neither employee nor production needs are fully
met.

Country Club (1, 9):

 This is a collegial style characterized by low task and high people orientation where the leader
gives thoughtful attention to the needs of people thus providing them with a friendly and
comfortable environment. The leader feels that such a treatment with employees will lead to self-
motivation and will find people working hard on their own.

Team Management (9, 9): 

Characterized by high people and task focus, the style is based on the theory Y of McGregor and
has been termed as most effective style according to Blake and Mouton. The leader feels that
empowerment, commitment, trust, and respect are the key elements in creating a team
atmosphere which will automatically result in high employee satisfaction and production.

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