Leaders and Leadership (Topic 5 Chapter 10)

The Nature of Leadership

1. Leadership
The process by which a person exerts (use) influence over other people and inspires (encourage),
motivates and directs their activities to help achieve group or organizational goals
2. Leader
An individual who is able to exert influence over other people to help achieve group OR organizational
goals

Leadership Styles across Cultures

Leadership styles may vary (different) among different countries or cultures.

• European managers tend to be more people-oriented than American or Japanese managers.

• Japanese managers are group-oriented. Time horizon differences: The United

• U.S managers focus more on short-term profitability. States focuses on short-term profit
orientation unlike in Japan were their
• Managers in different time horizons also are affected by cultures. leadership styles emphasize long-
term performance.

Sources of Managerial Power

referent
expert
legitimate

POWER: The Key

to Leadership coercive
reward

Legitimate Power --The authority that a manager has by virtue (because) of his or her position in an organizational
hierarchy (example of Carol Loray)

Reward Power --The ability of a manager to give or withhold (stop) tangible and intangible rewards (common in sales
department –commission)

Coercive Power --The ability of a manager to punish others (Coercive power includes frequent verbal criticisms, personal
attacks, and manipulation. The text uses the example of William J. Fife who was fired from Giddings and Lewis Inc. for
this type of behavior.)

Expert Power --Power that is based on special knowledge, skills, and expertise that a leader possesses

Referent Power --Power that comes from subordinates’ and coworkers’ respect, admiration, and loyalty

Trait and Behavior Models of Leadership

Trait Model ~

• This model focuses on identifying personal characteristics that cause effective leadership.
 • Many “traits” are the result of skills and knowledge and effective leaders do not necessarily possess all
of these traits.

Behavior Model ~ Identifies the two basic types of behavior that many leaders engage in to influence their subordinates:
consideration and initiating structure

Consideration ~ Behavior indicating that a manager trusts, respects, and cares about subordinates

Initiating Structure ~ Behavior that managers engage in to ensure that work gets done, subordinates perform their jobs
acceptably, and the organization is efficient and effective

Contingency Models of Leadership

Contingency Models >>Whether or not a manager is an effective leader is the result of the interplay (interaction)
between what the manager is like, what he or she does, and the situation in which leadership takes place

Fiedler’s Model >> (A manager might be effective in one situation and ineffective in another)

• Personal characteristics can influence leader effectiveness.

• Leader style is the manager’s characteristic approach to leadership.

Relationship-Oriented Leaders >>Leaders whose primary concern is to develop good relations with their subordinates
and to be liked by them

Task-Oriented Leaders >>Leaders whose primary concern is to ensure that subordinates perform at a high level and
focus on task accomplishment

Fiedler’s Model

Leader–Member Relations >>The extent to which followers like, trust, and are loyal to their leader; a determinant of
how favorable a situation is for leading

Task Structure >>The extent to which work is clear-cut so that a leader’s subordinates know what needs to be
accomplished and how to go about doing it

House’s Path-Goal Theory

Path-Goal Theory states that effective leaders motivate subordinates to achieve goals by:

• Clearly identifying the outcomes that subordinates are trying to obtain

• Rewarding workers with these outcomes for high-performance and goal attainment

• Clarifying the paths to the attainment of the goals

Directive Behaviors

• Setting goals, assigning tasks, showing subordinates how to complete tasks, and taking concrete (visible)steps to
improve performance

Supportive Behavior

• Expressing concern for subordinates and looking out for their best interests
Participative Behavior

• Giving subordinates a say in matters that affect them

Achievement-Oriented Behavior

• Setting very challenging goals, believing in workers’ abilities

Leadership behavior Situation (Kind of work they do)

Directive workers have difficulty completing task
Supportive workers faced high level of stress
Participative worker’s support of a decision is required
Achievement highly capable workers

The Leader Substitutes Model

Leadership Substitute (replace)

A characteristic of a subordinate or characteristic of a situation or context (surrounding) that acts in place (replace) of
the influence of a leader and makes leadership unnecessary

Possible substitutes can be found in:

• Characteristics of the subordinates (workers): their skills, experience, motivation

• Characteristics of context (situation): the extent to which work is interesting and fun

• Higher skills, experience & motivation & work is interesting & fun = leader unnecessary

Transformational Leadership
transforms/change workers through 3 ways: -

• Makes subordinates aware (know about) of the importance of their jobs and performance to the
organization

• Makes subordinates aware of their own needs for personal growth and development

• Motivates workers to work for the good of the organization, not just themselves

Managers involved in transformational leaders engage in or involved in: -

1. Being a Charismatic (magnetic) Leader

Charismatic Leader

An enthusiastic, self-confident transformational leader who is able to clearly communicate his or her vision of
how good things could be

A charismatic leader is able to see beyond the usual and envision a better future. The process to achieve this
future might include dramatic changes in an organization’s structure, culture, strategy, decision making, and
other critical processes and factors.

^^Example -- Oprah Winfrey clearly communicates and is self-confident, dominant, and most definitely influences
others.
 2. Stimulating (encourage) Subordinates Intellectually (rationally)

Intellectual Stimulation

Behavior a leader engages in to make followers be aware of problems and view these problems in new ways,
consistent with the leader’s vision

3. Engaging in Developmental Consideration

Developmental Consideration

Behavior a leader engages in to support and encourage followers and help them develop and grow on the job

^^Example - Sue Nokes – T-Mobile - Engage and empowers subordinates to take personal responsibility for helping
to solve problems.

Transactional Leadership
Leaders who motivate subordinates by rewarding them for high performance and reprimanding (punish) them for low
performance

Employees with high ratings receive aggressive salary increases. Those with low ratings get below-average raises and,
just as important, are helped with strategies for improving their performance. If they aren’t able to bring up their rating
over time, they are encouraged to find another job that might be a better fit, be it inside or outside the company.

&& (Often transformational leaders and transactional leadership are closely linked. While envisioning a better future, a
transformational leader will reward their employees for good performance, as well as responding to substandard work.)

WHAT IS TRANSFORMATIONAL LEADERSHIP?

• Transformational leaders are the type of leaders who bring change in the individuals and the organizational structure. They
increase the motivation, morale, and performance of the followers.

• Transformational leadership may be found at all levels of the organization: teams, departments, divisions, and organization
as a whole. Such leaders are visionary, inspiring, daring, risk-takers, and thoughtful thinkers.

CHARACTERISTICS OF TRANSFORMATIONAL LEADERSHIP

• Inspirational Motivation – This is the very basic quality of the transformational leaders. The manager helps in setting a
compelling vision with meaning to challenge oneself. Motivates to work together as a team.

• Idealised Influence – Transformational leaders follow the method of practice what they preach. He follows the principles
and regulations strictly on his own before that is set out for the team. Being the role model, if he follows what he lays the
team as well will follow. This will win the trust, loyalty and respect from the followers which will take the team a long way.

• Intellectual Stimulation – Being innovative and creative among the team members is one of the characteristics.
Troubleshooting the problems innovatively just to see the outcome/solution in a different perspective from the member’s
side.

• Individual Consideration – Leaders being mentor to the team. Correcting the mistakes and failures with encouragement
and support, rewarding and recognizing the achievements, talents and knowledge are the essential parts of being a
transformational leader.

CHARISMATIC LEADERSHIP

• Charismatic leadership theory identifies the extraordinary characteristics that inspire devotion and motivation in followers
and highlights the relationship between charismatic leaders and their followers.
 • Studies describe charismatic leaders as highly influential and confident individuals who hold strong beliefs. They are change
agents who communicate (articulate) their vision to others, set high expectations, attend to the needs of their followers,
and behave in unconventional ways.

• Example of charismatic leaderships : Martin Luther King, Winston Churchill, Ronald Reagan, Mother Theresa

TRANSACTIONAL LEADERSHIP

• A transactional leader is someone who values order and structure.

• Example : They are likely to command military operations, manage large corporations, or lead international projects that
require rules and regulations to complete objectives on time or move people and supplies in an organized way.

• Transactional leadership is most often compared to transformational leadership :

 Transactional leadership depends on self-motivated people who work well in a structured, directed environment.

 By contrast, transformational leadership seeks to motivate and inspire workers, choosing to influence rather than
direct others