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(MBA 612)

Berhanu Endeshaw

October 2015

 What is leadership?
 What is followership?
 Is leadership the same as management?
 What are the characteristics of successful
 Do leaders show distinctive patterns of
 What leadership styles are there?
 How does leaders’ behavior vary with the
 What sources of power and influence are
used by leaders?
 What are the effects of different types of
 Can we do without leadership?
 How can leadership skills be developed?
A Leadership Story
 A group of workers and their leaders are set a task
of clearing a road through a dense jungle on a remote island
to get to the coast where an estuary(section of a river
meeting the sea) provides a perfect site for a port. The
leaders organise the labour into efficient units and monitor
the distribution and use of capital assets – progress is
excellent. The leaders continue to monitor and evaluate
progress, making adjustments along the way to ensure the
progress is maintained and efficiency increased wherever
possible. Then, one day amidst all the hustle and bustle and
activity, one person climbs up a nearby tree. The person
surveys the scene from the top of the tree. And shouts down
to the assembled group below…“Wrong Way!”
 (Story adapted from Stephen Covey (2004) “The Seven
Habits of Highly Effective People” Simon & Schuster).

Question: What do you understand from this story?

Leadership Myths?
 Leadership is power (with people rather than over
 Leaders are born (but leaders are also “made”)
 All groups have leaders (large groups tend to
require a leader)
 People resist their leaders (most groups accept
the need for a leader)
 Leaders make or break their groups
The “romance of leadership” exaggerates the
impact of a leader
Leaders do make a difference (e.g., sports

.Chapter One:Introduction to Leadership
Chapter Objectives
 Students will be able to distinguish the difference between
leadership and management.
 Students will be able to identify how leadership is effective.
 Students will understand importance of leadership for profit and
non-profit organizations.
Definition of Management
 It is the process of assuring that the program and objectives of
the organizations are implemented as planned. Making sure the
work is done by others is the accomplishment of a MANAGER.
Definition of Leadership (LP)
• LP would mean different things to different people. There is no
universally accepted or a standard definition for leadership.
Some say: it is a process, and some say it’s ability and others
say the ability to obtain followers through INFLUENCE.
• Because of such factors as growing global influences and
generational differences, leadership will continue to have
different meanings for different people.
• Leadership is a dynamic relationship based on mutual influence
and common purpose between leaders and collaborators in
which both are moved to higher levels of motivation and moral
development as they affect real, intended change (Freiberg &
Freiberg, 1996).
 Leadership is the process of getting the cooperation of
others in accomplishing a desired goal.
 “The process of influencing the activities of an organized
group in its efforts toward goal setting and goal
achievement” (Stogdill, 1950:3).
 Leadership as” the art or process of influencing people
so that they will strive willingly and enthusiastically
towards the achievement of the organizational goals
(Koontz, et al; 1984:507). It includes making peoples
perform near to their full capacity.
Three key components to this definition:
- Leadership involves an influence in interpersonal process
between one person and a group
- Can’t have ‘leaders’ without ‘followers’
- Criterion for effective leadership = goal achievement
 Based on these components, the following definition of
leadership can be made: Leadership is a process
whereby an individual influences a group of individuals to
achieve a common goal.
 Leadership: guidance of others in their pursuits, often
by organizing, directing, coordinating, supporting, and
motivating their efforts.
• Inspiring others to do better work is the
accomplishment of a LEADER.
 “Management is doing things right, leadership is
doing the right things” (Warren Bennis and
Peter Drucker)
 Leadership & Management are distinct, yet
complementary systems of action.
 Proverb: He who thinks he leads and has no one
following him is only taking a walk.
What is a Follower?
 A follower is an individual who follows the ideas,
goals, or tasks of a leader.
 Followers are developed by working together to
identify goals and strategies for achieving the
organization goals.
The Significance of Leadership
• Research and opinion: Two perspectives
A. Leadership does make a difference
• Leadership had a direct impact on organizational climate,
and that climate in turn accounted for nearly one third of
the financial results of organizations (Goleman, 2000)
• Leadership behavior accounts for almost 50 per cent of
the difference between change success and failure
(Malcolm Higgs, 2006)
• Leadership accounted for more variations in performance
than any other variable (Northouse, 2006)
• Leadership is one of the many important factors.
• Leadership is key in providing vision and direction.
• Leadership can account for up to 44 percent of a firm's
• Leadership is critical in orchestrating (direct) change.
• Leadership's impact is moderated by situational factors.
B. Formal Leadership does not make a difference
– Argues LP has smaller impact on organizational
outcomes than do forces in the situation
– Raise three major arguments:
 Substitutes for leadership: closely knit (join) teams of
highly trained individuals, intrinsic satisfaction,
computer technology, & professional norms
 Leader irrelevance- LP is irrelevant for most
organizational outcomes. It is the situation that must be
carefully analyzed. Factors outside the leader’s control
have a larger impact on business outcomes than do LP
 Complexity theory- argues leaders and managers can
do a little to alter the course of the complex
organizational systems. Factors outside the leader’s
control determine the company’s fate (destiny).

Leadership Is Insignificant
• Outside environmental factors affect organizations
more than leadership.
• Internal structure and strategy determine the course
an organization takes.
• Leadership accounts for only 7 to 15 percent of
financial performance.
• Leaders have little discretion to really make an impact.
• Leadership is a romantic myth rather a real
organizational factor.

Leadership vs. Management
• Management and Leadership are not the same thing (Van Fleet
• In deed, managers and leaders share a number of traits.
• Leadership and management are two distinctive and complementary
systems of action…… Both are necessary for success in an increasingly
complex and volatile business environment.”
• Strong leadership with weak management is no better, and is sometimes
actually worse, than the reverse.
• Management is about coping with complexity….. Without good
management, complex enterprises tend to become chaotic
(disordered)… Good management brings a degree of order and
• Leadership, by contrast, is about coping with change…. More change
always demands more leadership.
• “Companies manage complexity by planning and budgeting, by
organizing and staffing, and by controlling and problem solving. By
contrast, leading an organization to constructive change involves setting
a direction (developing a vision of the future and strategies to achieve
the vision), aligning people, and motivating and inspiring them to keep
moving in the right direction."
Managers vs. Leaders
 Understanding the distinctions between
management and leadership is a key step in
orchestrating change. Scholars defined managers
and leaders in the following ways.
- Provide vision and motivates people;
- Goal-oriented
- Make sure things happen through other

Managers vs. leaders
• Managers know how to plan,  Leaders create and communicate
budget, organize, staff, control, and visions and strategies
problem solving
 Managers deal mostly with the  Leaders deal mostly with change
status quo  Leadership deals with the top
 Management is a bottom line focus: line: What are the things I want
How can I best accomplish certain to accomplish?
things?  Leadership is doing the right
 Management is doing things right things
 Change is a threat to be  Change is a competitive
controlled advantage to be embraced
 Change is “managed” through  Change is “led” through the
methods and tools heart and mind
 Selected change managers are  A team of change leaders is
most qualified to handle change required to lead change
 Issues and problems can be  Issues and problems can be
cleaned up “after the fact” mitigated proactively
 Focus on managing work  Focusing on leading people

Covey, Stephen R., The 7 Habits of Highly Effective People, pg.101

Kotter, John P., Leading Change, pg.165
The Difference: John Kotter on Leaders
 .
Roles & Responsibilities Objectives

Seeing Enrolling Vision Leaders

Strategies Movement
Visioning Inspiring
Challenge Energy

Risk Passion
Strategizing Performing
Action Change

Risking Delegating
Adaptation: Leading Change, John Kotter, Harvard Business School Press, 1996.
The Difference: per Craig Hickman
(Experimental, visionary, flexible,
(Analytical, structured, controlled,
deliberate, orderly) unfettered/creative)
 Uses the power of intuition (ability to
 Uses the power and logic of understand immediately without the need to
the rational mind conscious reasoning) and logic of the heart

 Considers the dangers  Senses opportunity

 Concentrates on short-term  Focuses on long-term results
 Follows visions
 Creates visions
 Scrutinizes (examine)
performance  Searches for potential

 Pursues the tangible  Seeks the intangible

 Performs duties  Pursues dreams

 Controls  Inspires

 Depends on authority  Depends on influence

The Difference: per Manfred Kets de Vries
Managers Leaders
 Focuses on the present  Looks toward the future
 Prefers stability  Appreciates change
 Orients toward the short  Orients toward the long
term term
 Focuses on procedure  Engages in a vision
 Asks “what” and “how”  Asks “why” and “what”
 Prefers to control  Knows how to delegate
 Is happy in complexity  Prefers to simplify
 Uses the rational mind  Trusts intuition
 Works within the context  Takes social and
of the organization and environmental contexts
the business into consideration

.The Difference: John Kotter on Managers
Roles & Responsibilities Objectives

Planning Guiding Predictability

Budgeting Reassuring

Zero Deviations
Organizing Monitoring
Stable Performance

Staffing Controlling Short-Term Results


Adaptation: Leading Change, John Kotter, Harvard Business School Press, 1996.
The Difference: Accompli’s View
 Leadership is not a position/title: it is a state of mind
 We have all been leaders at one or more points in time,
and we constantly have leadership moments in life
 The positive/negative distinction between management
and leadership is misleading and not helpful
 What’s required for successful change is:

◦ Management and leadership roles are

◦ Requisite balance between leadership and
management is what wins the game.

Short- vs. Long-Term: Accompli’s View
 No judgment should be applied to the
notions of “short-term” and “long-term” –
they are both necessary and need to be

 In general, it is the role of a leader to look

into the future and to provide vision

 In general, it is the role of the manager to

help achieve this vision through a series of
“short-term” and “medium-term” plans and
Transitioning from Manager to Leader
 The journey from manager to leader, and from leader to
executive, has 3 key transition points
◦ Manager: from individual performer to
managing a team; “what’s good for me” 
“what’s good for my team”
◦ Leader: from managing a team to orchestrating
groups of teams; “what’s good for my team 
what’s good for the organization”
◦ Executive: from groups of teams to complex
organizations; “what’s good for my organization
 what’s the larger, longer term context”
 Transitioning is situational as well as hierarchical

. Transitioning :The Challenge Points

Board of
President Executive

VP Leader

& Line

Short- vs. Long-Term: The Horizon Perspective

. Board of n

Chairman/CEO n

President n

Sr./Exec VP n

Vice President n

Director n

Manager n

Supervisor n

Clerical & Line

1 year 2 years 3 years 4 years 5 years 6 years 7 years 8 years 9 years 10 years
Adaptation: Jaques, Elliott, The Requisite Organization, Cason Hall & Co, Arlington, VA, 1996.
Leaders and Managers: Distinguishing their roles


Leader’s Job
Strategy for

Manager’s Job organizational

Overcoming the Challenges
-Why managers don’t make the transition to leader?
1. Overwhelmed (defeat 6. No clearly defined
completely; overpower)! organizational path

2. Need for control 7. No real leaders in the

3. Too focused on
operational and tactical 8. Performance not good
issues enough

4. Don’t understand how 9. Don’t want it !

5. Cannot get in . . .

 . . .and one more reason the ultimate challenge. . .
I do not know
how to change. . .
 “You must be the change you wish to see in the

Mahatma Gandhi –
Indian Leader

.The Difference: U.S. Examples

Henry Ford  Ray Kroc

(Ford Motor Company) (McDonald's)

 Harold Geneen  Walt Disney

(CEO of International Telephone and (Disney Studios)
Telegraph Corp (ITT))
 Katherine Graham
 John Akers (Washington Post)
 Ted Turner
Tom Landry (Turner Broadcasting)
(Dallas Cowboys)
 Steven Jobs
 Charles Knight (Apple Computer)
(Emerson Electric)
 Bill Clinton
George Bush (President of the U.S.)
(President of the U.S.)

Summary: Leadership vs. Management
The view of the differences between managers and leaders:
• The manager administers; the leader innovates.
• The manager is a copy; the leader is an original.
• The manager maintains; the leader develops.
• The manager focuses on systems and structure; the leader
focuses on people.
• The manager relies on control; the leader inspires trust.
• The manager accepts reality; the leader investigates it.
• The manager has a short-range view; the leader has a
long-range perspective.
• The manager asks how and when; the leader asks what
and why.
• The manager has his or her eye always on the bottom line;
the leader has his or her eye on the horizon.
• The manager imitates; the leader originates.
• The manager accepts the status quo; the leader
challenges it.
• The manager does things right; the leader does the right
 One of the most common costs of leadership is the
experience of rejection. If you are willing to accept the call to
leadership, at times, you may be rejected and misunderstood
 No leader is exempt! The very nature of effective leadership
involves taking a position on issues, making decisions, and
determining direction. These will always result in some form
of reaction from one’s environment.
 Leadership, at times, is lonely because you must be out front,
ahead of the followers. Also, because the leader is the one with the
guiding vision and purpose, he/she sees the end from the
beginning and must live both the process and destination, all at the
same time.
 Leaders must face the challenge of the responsibilities and
demands that come with leadership. These involve the need to
make critical decisions, often under constraints and external

 Leadership places heavy demands on the individual who
fills the position. There is no way to become an effective
leader and not be affected by its stress, physical demands,
and mental toll (charge).

 You must be aware of the tremendous cost which will be born by those
closest to you (for example, family members). Because leadership
demands the giving of oneself to others, your life becomes the
property of those whom you SERVE.
Reflect on the statement:
“Most organizations are over managed and
under led“
The New Reality for Leadership
Old Paradigm New Paradigm
• Stability • Change and crisis
• Control • Empowerment
• Competition • Collaboration
• Uniformity • Diversity
• Self-centered • Higher purpose
• Hero • Humble /modest