CHAPTER 11: LEADERSHIP AND INFLUENCE PROCESS

THE NATURE OF LEADRSHIP

Leadership

 As a process, the use of non-coercive influence to shape the group’s or organization’s goals, motivate behavior toward the achievement of those goals, and help
define group or organizational culture;
 As a property, the set of characteristics attributed to individuals who are perceived to be leaders

Leaders

 People who can influence the behaviors of others without having to rely on force; those accepted by others as leaders

DISTINCTIONS BETWEEN MANAGEMENT AND LEADERSHIP

LEADERSHIP AND POWER

Power

The ability to affect the behavior of others

In organizational settings, there are usually five kinds of power:

 Legitimate power

Power granted through the organizational hierarchy; the power defined by the organization to be accorded to people occupying a particular position

 Reward power

The power to give or withhold rewards, such as salary increases, bonuses, promotions, praise, recognition, and interesting job assignments

 Coercive power

The power to force compliance by means of psychological, emotional, or physical threat

 Referent power

The personal power that accrues to someone based on identification, imitation, loyalty, or charisma

 Expert power

The personal power that accrues to someone based on the information or expertise that they possess

GENERIC APPROACHES TO LEADERSHIP

Traits Approach to Leadership

 Assumed that a basic set of personal traits that differentiated leaders from non-leaders could be used to identify leaders and predict who would become leaders.

 The trait approach was unsuccessful in establishing empirical relationships between traits and persons regarded as leaders

LEADERSHIP BEHAVIOURS

Michigan Studies (Rensis Likert)

– Identified two forms of leader behaviour

Job-centered behaviour

—managers who pay close attention to subordinates’ work, explain work procedures, and are keenly interested in performance.

Employee-centered behaviour

—managers who focus on the development of cohesive work groups and employee satisfaction. – The two forms of leader behaviors were considered to be at opposite ends of
the same continuum.

Ohio State Studies

Did not interpret leader behavior as being one-dimensional as did the Michigan State studies.

Identified two basic leadership styles that can be exhibited simultaneously:

Initiating-structure behavior

The behavior of leaders who define the leader– subordinate role so that everyone knows what is expected, establish formal lines of communication, and determine how tasks
will be performed

Consideration behaviour

The behavior of leaders who show concern for subordinates and attempt to establish a warm, friendly, and supportive climate

Ohio State Studies (cont’d)

Initial assumption was that the most effective leaders who exhibit high levels of both behaviors. Subsequent research indicated that:

 Employees of supervisors ranked high on initiating structure were high performers, yet they expressed low levels of satisfaction and higher absenteeism.

 Employees of supervisors ranked high on consideration had low- performance ratings, yet they had high levels of satisfaction and less absenteeism.

 Other situational variables make consistent leader behavior predictions difficult. There is no universal or “one best way” model of leadership.
The Managerial Grid

 Provides a means for evaluating leadership styles and then training managers to move toward an ideal style of behavior.

 Concern for production

 The part of the Managerial Grid that deals with the job and task aspects of leader behaviour

 Concern for people

 The part of the Managerial Grid that deals with the human aspects of leader behavior

SITUATIONAL APPROACHES TO LEADERSHIP

Situational Models of Leader Behavior

Assume that:

 Appropriate leader behavior varies from one situation to another.

 Key situational factors that are interacting to determine appropriate leader behavior can be identified.

Least-Preferred Co-worker (LPC) theory

A theory of leadership that suggests that the appropriate style of leadership varies with situational favorableness.

 LPC theory, developed by Fred Fiedler, was the first truly situational theory of leadership.

 LPC measure The measuring scale that asks leaders to describe the person with whom he or she is able to work least well (the least-preferred coworker, or LPC)

 Least-Preferred Co-worker (LPC) Theory (cont’d)

 Contingency variables determining situational favorableness:

 Leader-member relations

 the nature of the relationship between the leader and the work group.

 Task structure

 the degree to which the group’s task is defined.

 Position Power

 the power vested in the leader’s position.

Path-Goal Theory

Associated most closely with Martin Evans and Robert House—is a direct extension of the expectancy theory of motivation

Theory of leadership

Suggesting that the primary functions of a leader are to make valued or desired rewards available in the workplace and to clarify for the subordinate the kinds of behavior that
will lead to those rewards

Path-Goal Theory (cont’d)

Leader Behaviors:

 Directive leader behaviour

letting subordinates know what is expected of them, giving guidance and direction, and scheduling work.

 Supportive leader behaviour

being friendly and approachable, having concern for subordinate welfare, and treating subordinates as equals.

 Participative leader behaviour

consulting with subordinates, soliciting suggestions, and allowing participation in decision making.

 Achievement

oriented leader behaviour setting challenging goals, expecting subordinates to perform at high levels, encouraging and showing confidence in subordinates.

Vroom’s Decision Tree Approach

Predicts what kinds of situations call for different degrees of group participation

Basic Premises

 The degree to which subordinates should be encouraged to participate in decision making depends on the characteristics of the situation.

 No one decision-making process is best for all situations.

Vroom’s Decision Tree Approach (cont’d)

 After evaluating the different problem attributes, a leader can choose a decision path on one of two decision trees that determines the decision style and specifies
the amount of employee participation.

Decision significance

 The degree to which the decision will have an impact on the organization. Subordinates are involved when decision significance is high.

Decision Timeliness

 The degree of time pressure for making a decision in a timely basis; may preclude involving subordinates.
 Vroom’s Decision Tree Approach (cont’d)

Decision-Making Styles

 Decide —manager makes decision alone and then announces or “sells” it to the group.

 Consult (individually) —manager presents program to group members individually, obtains their suggestions, then makes the decision.

 Consult (group) —manager presents problem to group at a meeting, gets their suggestions, then makes the decision.

 Facilitate —manager presents the problem to the group, defines the problem and its boundaries, and then facilitates group member discussion as they make the
decision.

 Delegate —manager allows the group to define for itself the exact nature and parameters of the problem and then develop a solution.

The Leader-Member Exchange (LMX) Approach

Conceived by George Graen and Fred Dansereau, stresses the importance of variable relationships between supervisors and each of their subordinates.

Stresses that leaders have different kinds of relationships with different subordinates

Substitutes for Leadership

A concept that identifies situations in which leader behaviors are neutralized or replaced by characteristics of the subordinate, the task, and the organization

RELATED APPROACHES TO LEADERSHIP

Charismatic Leadership

Assumes that charisma is an individual characteristic of the leader

Charisma

A form of interpersonal attraction that inspires support and acceptance

Transformational Leadership

Leadership that goes beyond ordinary expectations by transmitting a sense of mission, stimulating learning experiences, and inspiring new ways of thinking

EMERGING APPROACHES TO LEADERSHIP

Strategic Leadership

The capability to understand the complexities of both the organization and its environment and to lead change in the organization to achieve and maintain a superior
alignment between the organization and its environment

Ethical Leadership

Most people have long assumed that top managers are ethical people. But in the wake of recent corporate scandals, faith in top managers has been shaken. Perhaps now
more than ever, high standards of ethical conduct are being held up as a prerequisite for effective leadership.

POLITICAL BEHAVIOUR IN ORGANIZATIONS

Political Behavior

The activities carried out for the specific purpose of acquiring, developing, and using power and other resources to obtain one’s preferred outcomes

Common Political Behaviors

 Inducement

Offering to give something to someone else in return for that person’s support.

 Persuasion

Persuading others to support a goal on grounds that are objective and logical as well as subjective and personal.

Political Behavior (cont’d)

Creation of an obligation

Providing support for another person’s position that obliges that person to return the favor at a future date.

Coercion

Using force to get one’s way.

Impression management

Making a direct and intentional effort to enhance one’s image in the eyes of others

Managing Political Behavior

 Be aware that even if actions are not politically motivated, others may assume that they are.

 Reduce the likelihood of subordinates engaging in political behavior by providing them with autonomy, responsibility, challenge, and feedback.

 Avoid using power to avoid charges of political motivation.

 Get disagreements and conflicts out in the open so that subordinates have less opportunity to engage in political behavior.

 Avoid covert behaviors that give the impression of political intent even if none exists
CHAPTER 12: COMMUNICATIONS IN ORGANIZATIONS

COMMUNICATION AND THE MANAGERS JOB

A Definition of Communication

Communication

The process of transmitting information from one person to another

Effective communication

The process of sending a message in such a way that the message received is as close in meaning as possible to the message intended

Data

Raw figures and facts reflecting a single aspect of reality

Information

Data presented in a way or form that has meaning

THE ROLE OF COMMUNICATION IN MANAGEMENT

Characteristics of Useful Information

Accurate information

Provides a valid and reliable reflection of reality

Timely information

Available in time for appropriate managerial action

Complete information

Provides the manager with all the information that he or she needs

Relevant information

Information that is useful to managers in their particular circumstances for their particular needs

THE COMMUNICATION PROCESS

Steps in the Communication Process

 Deciding to transmit a fact, idea, opinion, or other information to the receiver.

 Encoding the meaning into a form appropriate to the situation.

 Transmitting through the appropriate

channel or medium.

 Decoding the message back into

a form that has meaning to the
receiver.

 “Noise” is anything disrupting the

communication process.

FORMS OF COMMUNICATION IN ORGANIZATION

Interpersonal Communication

Oral communication

Face-to-face conversation, group discussions, telephone calls, and other circumstances in which the spoken word is used to transmit meaning

Written communication

Memos, letters, reports, notes, and other circumstances in which the written word is used to transmit meaning

Communication in Networks and Work Teams Types of Communication Networks

Communication network

The pattern through which the members of a group communicate

Organizational Communication

Vertical communication

Communication that flows up and down the organization, usually along formal reporting lines; takes place between managers and their superiors and subordinates
and may involve several different levels of the organization

 Upward communication consists of messages from subordinates to superiors

 Downward communication occurs when information flows down the hierarchy from superiors to subordinates.

Organizational Communication (cont’d) Formal Communication in Organization

Horizontal communication

Communication that flows laterally within the organization; involves colleagues and peers

At the same level of the organization and may involve individuals from several different organizational units
Digital Communication

Information technology (IT) The resources used by an organization to manage information that it needs to carry out its mission

Information Systems Advances in IT have made it increasingly easy for managers to use many different kinds of information systems

Transaction-processing systems (TPSs) An application of information processing for basic day-to-day business transactions

Management information systems (MISs) An information system that supports an organization’s managers by providing daily reports, schedules,
plans, and budgets

Decision support systems (DSSs) An interactive system that locates and presents information needed to support the decision-making process

Personal Digital Technology

Telecommuting

is the label given to a new digital cottage industry. In telecommuting, people work at home on their computers and communicate with colleagues and co-workers
using electronic media

Digital Communication (cont’d)

Executive support system (ESS)

A quick-reference, easy-access application of information systems specially designed for instant access by upper-level managers

Artificial intelligence (AI)

The construction of computer systems, both hardware and software, to imitate human behavior— that is, to perform physical tasks, use thought processes, and learn

Intranets

A communication network similar to the Internet but operating within the boundaries of a single organization

Extranets

A communication network that allows selected outsiders limited access to an organization’s internal information system, or intranet

The Grapevine Common Grapevine Chains Found in Organizations

An informal communication network among people in an organization

INFORMAL COMMUNICATION IN ORGANIZATIONS

Informal Communication in Organizations

may or may not follow official reporting relationships or prescribed channels. It may cross different levels and different departments or work units, and it may or may
not have anything to do with official organizational business.

Management by Wandering Around

An approach to communication that involves the manager literally wandering around and having spontaneous conversations with others

Nonverbal Communication

Any communication exchange that does not use words or uses words to carry more meaning than the strict definition of the words themselves

 Images—the kinds of words people elect to use to give emphasis and effect to what they say.

 Settings—boundaries, familiarity, home turf (e.g., office location, size, and furnishings) are symbols of power and influence how
people choose to communicate in organizations.

MANAGING ORGANIZATIONAL COMMUNICATION

BARRIERS TO COMMUNICATION>>>>

Barriers to Communication (Cont’d)

Individual Barriers

Several individual barriers may disrupt effective communication. One common problem is conflicting or inconsistent signals

Organizational Barriers

 Other barriers to effective communication involve the organizational context in which the communication occurs.

 Semantics problems arise when words have different meanings for different people.

 Words and phrases such as profit, increased output, and return on investment may have positive meanings for managers but less positive meanings for
labor.

IMPROVING COMMUNICATION EFFECTIVENESS Improving Communication Effectiveness (cont’d) > Overcoming Barriers to Communication

More and Less Effective Listening Skills

CHAPTER 14: BASIC ELEMENTS OF CONTROL

THE NATURE OF CONTROL

Control

The regulation of organizational activities in such a way as to facilitate goal attainment

 Provides organizations with indications of how well they are performing in relation to their goals.

 Provides a mechanism for adjusting performance to keep organizations moving in the right direction.

The Purpose of Control

Control provides an organization with ways to adapt to environmental change, to limit the accumulation of error, to cope with organizational complexity, and to
minimize costs.

These four functions of control are worth a closer look.

 Adapting to Environmental Change

 Limiting the Accumulation of Error

 Coping with Organizational Complexity

 Minimizing Cost.

Areas of Control

Control provides an organization with ways to adapt to environmental change, to limit the accumulation of error, to cope with organizational complexity, and to
minimize costs.

 Control of Physical Resources includes inventory management (stocking neither too few nor too many units in inventory),

 Quality control (maintaining appropriate levels of output quality), and

 Equipment control (supplying the necessary facilities and machinery).

 Control of human resources includes selection and placement, training and development, performance appraisal, and compensation.

 Control of information resources includes sales and marketing forecasting, environmental analysis, public relations, production scheduling, and economic
forecasting

 Control of financial resources is the most important area, because financial resources are related to the control of all the other resources in an
organization

Levels of Control

 Operations Control

Focuses on the processes that the organization uses to transform resources into products or services

 Financial Control

Concerned with the organization’s financial resources

 Structural Control

Concerned with how the elements of the organization’s structure are serving their intended purpose

 Strategic Control

Focuses on how effectively the organization’s strategies are succeeding in helping the organization meet its goals

Responsibilities for Control Steps in the Control Process

Controller

A position in organizations that helps line managers with their control activities

Steps in the Control Process

Establish Standards

Control standard - A target against which subsequent performance will be compared.

 Control standards should be expressed in measurable terms.

 Control standards should be consistent with organizational goals.

 Control standards should be identifiable indicators of performance.

Measure Performance

 Performance measurement is an ongoing process.

 Performance measures must be valid indicators (e.g., sales, costs, units produced) of performance.

Steps in the Control Process (cont’d)

Compare Performance Against Standards

 Define what is a permissible deviation from the performance standard.

 Utilize the appropriate timetable for measurement.

Determine the Need for Corrective Action

 Maintain the status quo (do nothing).

  Correct the deviation to bring operations into compliance with the standard.

 Change the standard if it was set too high or too low

OPERATIONS CONTROL

Operations Control Forms of Operations Control

Focuses on the processes the organization use to transform resources into products or services

FINANCIAL CONTROL

Financial control

Concerned with the organization’s financial resources

Budget

A plan expressed in numerical terms Developing Budgets in Organizations

Strengths and Weaknesses of Budgeting

Strengths:

 Budgets facilitate effective operational

controls.

 Budgets facilitate and communication

between departments.

 Budgets established records of

organizational performance, which can
enhance planning.

Weaknesses:

 Budgets can hamper operations if

applied too rigidly
Other tools for Financial Control
 Budgets can be time consuming to
Financial Statement develop
A profile of some aspect of an organization’s financial circumstances  Budgets can limit innovation and
change
Balance Sheet

List of assets and liabilities of an organization at a specific point in time ORGANIZATIONAL CONTROL

Income Statement

A summary of financial performance over a period of time, usually one year

Ratio Analysis

The calculation of one or more financial ratios to assess some aspect of the organization’s financial health

Audits

An independent appraisal of an organization’s accounting, financial, and operational systems

STRUCTURAL CONTROL

Bureaucratic Control

A form of organizational control characterized by formal and mechanistic structural arrangements

Decentralized Control

An approach to organizational control based on informal and organic structural arrangements

STRATEGIC CONTROL

Strategic Control

Control aimed at ensuring that the organization is maintaining an effective alignment with its environment and moving toward achieving its strategic goals

Control aimed at ensuring that the organization is maintaining an effective alignment with its environment and moving toward achieving its strategic plan.

 Focuses on structure, leadership, technology, human resources, and informational and operational systems.

 Focuses on the extent to which an implemented strategy achieves the organization’s goals

International Strategic Control

 Focuses on whether to manage the global organization from a centralized or decentralized perspective.

 Centralization creates more control and coordination, whereas decentralization fosters adaptability and innovation

MANAGING CONTROL IN ORGANIZATIONS

Characteristics of Effective Control

Integration with Planning

 the more control is linked to planning, the more effective the control system.

Flexibility

 the control system must be flexible enough to accommodate change.

Accuracy
  Inaccurate information results in bad decision making and inappropriate managerial actions

Timeliness

 A control system should provide information as often as necessary.

Objectivity

 A control system must be free from bias and distortion

Resistance to Control

Over-control

 Trying to control too many details becomes problematic when control affects employee behavior and employees perceive control attempts as
unreasonable.

Inappropriate Focus

 The control system may be too narrow or it may focus too much on quantifiable variables and leave no room for analysis or interpretation.

Rewards for Inefficiency

 Rewarding operational inefficiency can lead employees to behave in ways that are not in the best interests of the organization.

Too much accountability

 Efficient controls are resisted by poorly performing employees

Resistance to control can be overcome by:

 Designing effective controls that are properly integrated with organizational planning and aligned with organizational goals and standards.

 Creating controls that are flexible, accurate, timely, and objective.

 Avoiding over-control in the implementation of controls.

 Guarding against creating controls that reward inefficiencies.

 Encouraging employee participation in the planning and implementing of control systems.

 Developing a system of checks and balances in the control systems through the use of multiple standards and information systems that allow the
organization to verify the accuracy of performance indicators