CHAPTER 14

DEVELOPING
LEADERSHIP SKILLS

McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.
Learning Objectives
• Define power
• Describe the sources of power in organizations
• Define leadership
• Describe the self-fulfilling prophecy in
management
• Define the trait theory of leadership
• List and define basic leadership styles

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Learning Objectives
• Understand the Managerial Grid
• Define the contingency approach to leadership
• Explain the path-goal approach to leadership
• Define the situational leadership theory
• Define transactional and transformational
leadership

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Learning Objectives
• Define servant leadership
• Discuss the importance of emotional
intelligence
• Discuss some of the lessons that can be learned
from leadership research

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Power
• Measure of a person’s potential to get others
to do what he or she wants them to do, as
well as to avoid being forced by others to do
what he or she does not want to do
• Positive power
• When the exchange is voluntary and both parties
feel good about it
• Negative power
• When an individual is forced to change
• Can be exercised upward, downward, or
horizontally
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Figure 14.1 - Sources of Power

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Authority
• Right to issue directives and expend
resources
• Is related to power but is narrower in scope
• For a manager, depends on the amount of
coercive, reward, and legitimate power
he/she can exert

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Authority
• Is a function of position in the organizational
hierarchy, flowing from the top to the bottom
of the organization
• Expert or referent- Have power without
formal authority

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Leadership
• Ability to influence people to willingly follow
one’s guidance or adhere to one’s decisions
• Leader- Obtains followers and influences
them in setting and achieving objectives
• Leaders use power in influencing group
behavior
• Informal leaders combine referent power
and expert power

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Leadership and Management
• Effective leadership
• Creates a vision of the future
• Develops a strategy for moving toward that
vision
• Enlists the support of employees
• Motivates employees to implement the strategy
• Can be taught
• Management- Process of planning,
organizing, staffing, motivating, and
controlling through the use of formal
authority
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Leader Attitudes
• Two attitude profiles, or assumptions, about
the basic nature of people
• Theory X
• Theory Y
• A Theory X leader would use a much more
authoritarian style of leadership than a
Theory Y leader

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Leader Attitudes
• Research indicates if a manager’s
expectations are high, productivity is likely to
be high, converse is also true
• Self-fulfilling prophecy: The relationship
between a leader’s expectations and the
resulting performance of subordinates

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Figure 14.2 - Assumptions About
People

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Figure 14.3 - Framework for Classifying
Leadership Studies

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Framework for Classifying Leadership
Studies
• Focus
• Whether leadership is to be studied as a set of
traits or as a set of behaviors
• Traits
• Characteristics a leader possesses
• Behaviors
• What the leader does

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Framework for Classifying Leadership
Studies
• Approach - Whether leadership is studied
from a universal or contingent approach
• Universal approach - One best way to lead
regardless of the circumstances
• Contingent approach - Best approach to
leadership is contingent on the situation

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Framework for Classifying Leadership
Studies
• Trait theory - Stressed on what the leader
was like rather than what the leader did
• Traits can be categorized as personality,
social and physical characteristics of an
individual
• Research indicates that traits have limited
influence on the capacity to lead

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Basic Leadership Styles
• Autocratic leader: Makes more decisions for
the group
• Laissez-faire leader: Allows people within
the group to make all decisions
• Democratic leader: Guides and encourages
the group to make decisions

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Figure 14.4 - Relationship Between Styles
of Leadership and Group Members

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Ohio State Studies
• Series of studies conducted at Ohio State
University to find out the most important
behaviors of successful leaders
• The study used Leader Behavior Description
Questionnaire (LBDQ) to determine what a
successful leader does, regardless of the type
of group being led

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Ohio State Studies
• Two types of leader behaviors that emerged
• Consideration: Showing concern for individual
group members
• Initiating structure: Leader behavior of
structuring the group members and directing
them towards group’s goals
• Conclusions of the Study
• Leaders scoring high on consideration tend to
have more satisfied subordinates than do leaders
scoring low on consideration

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Ohio State Studies
• A high score on consideration was positively
correlated with leader effectiveness for
managers and office staff in a large industrial
firm, whereas it was negatively correlated with
leader effectiveness for production foremen
• There was no consistent relationship between
initiating structure and leader effectiveness;
rather, it varied depending on the group that is
being led

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University of Michigan Studies
• Aimed to discover principles contributing to
the productivity of a group and to the
satisfaction derived by its members
• Results indicated that managers of high
producing groups were more likely to
• Receive general rather than close supervision
from their superiors
• Like the amount of authority and responsibility
they have in their job

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University of Michigan Studies
• Spend more time in supervision
• Give general rather than close supervision to
their employees
• Be employee oriented rather than production
oriented
• Supervisors of low-producing work groups had
opposite characteristics and techniques

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Styles of Leadership or Management

• Rensis Likert identified four styles of

management
• Exploitative authoritative- Authoritarian form of
management that attempts to exploit
subordinates
• Benevolent authoritative- Authoritarian form of
management, but paternalistic in nature

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Styles of Leadership or Management
• Consultative- Manager requests and receives
inputs from subordinates but maintains the right
to make the final decision
• Participative- Manager gives some direction, but
decisions are made by consensus and majority,
based on total participation
• Results of the Likert’s study indicated that
participative management was the most
effective style of leadership

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Managerial Grid
• Two-dimensional framework rating a leader
on the basis of concern for people and
concern for production
• Five styles of management on the basis of the
grid
• Authority-obedience - Assumes that efficiency in
operations results from properly arranging the
conditions at work with minimum interference
from other people

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Managerial Grid
• Country club management - Assumes that proper
attention to human needs leads to a comfortable
organizational atmosphere and workplace
• Team management - Combines a high degree of
concern for people with a high degree of
concern for production
• The other two styles are:
• Impoverished management
• Organization man management

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Figure 14.5 - The Managerial Grid

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Contingency Approach to Leadership

• Focuses on the style of leadership effective in

particular situation
• Fred Fiedler identified two basic personality
traits
• Task motivation
• Relationship motivation
• Task motivated leaders gain satisfaction from
the performance of a task

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Contingency Approach to Leadership

• Relationship motivated leaders gain

satisfaction from interpersonal relationships
• Least preferred co-worker scale (LPC),
measures whether a person is a task- or
relationship-oriented leader

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Leadership Situations

• Leadership situations are based on three

major dimensions
• Leader-member relations
• Degree others trust and respect the leader and to
the leader’s friendliness
• Task structure
• Degree to which job tasks are structured
• Position power
• Power and influence that go with a job

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Figure 14.6 - Fiedler’s Classification of
Situations

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Figure 14.7 - Leadership Style and
Leadership Situations

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Figure 14.8 - Forces Affecting the
Leadership Situation

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Figure 14.9 - Continuum of Leader
Behavior

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Path-Goal Theory of Leadership
• Attempts to define the relationships between
a leader’s behavior and the subordinates’
performance and work activities
• Leader behavior is acceptable to subordinates
to the degree they see it as a source of
satisfaction
• Leaders behavior influences the motivation of
the subordinates

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Path-Goal Theory of Leadership
• Four types of leader behavior
• Role classification leadership - Lets subordinates
know what is expected of them, gives guidance,
schedules and coordinates work, maintains
definite standards of performance
• Supportive leadership - Has a friendly,
approachable leader who makes the work
environment pleasant

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Path-Goal Theory of Leadership
• Participative leadership - Involves consulting
with subordinates and asking for their
suggestions
• Autocratic leadership - Leader gives orders that
are not to be questioned by subordinates
• Depending on the structure of work, each
leadership style results in different level of
performance and satisfaction
• Role classification - High satisfaction and
performance for subordinates engaged in
unstructured task
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Path-Goal Theory of Leadership
• Supportive leadership - High satisfaction on
highly structured tasks
• Participative leader - High performance and
satisfaction for subordinates engaged in
ambiguous tasks
• Autocratic leadership - Negatively impacts
satisfaction and performance in both structured
and unstructured task situations

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Situational Leadership Theory
• As the level of maturity of followers
increases, structure (task) should be reduced
while socioemotional support (relationship)
should first be increased and then gradually
decreased
• As the followers progress from immaturity to
maturity the leader’sbehavior should move
from:
• High task–low relationships to high task-high
relationships to low task–high relationships to
low task–low relationships
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Figure 14.10 - Situational Leadership
Theory

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Figure 14.11- Transformational and
Transactional Leadership

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Servant Leadership
• A servant leader
• Meets the needs of the people he/she heads
• Takes the fulfillment of the followers as the
primary aim
• Believes that one of the objective of the
business is to provide meaningful work to the
employees

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Emotional Intelligence (E.I)
• The ability to generate, recognize, express,
understand, and evaluate the emotions of
oneself, of others
• Is the ability to monitor emotions and to use
this information to guide our thinking and
actions
• Effective leaders have high degree of
emotional intelligence
• Research indicates that EI is twice as
important for career success as intelligence
or technical abilities
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Lessons From Leadership Studies
• A leader should be:
• Honest
• Forward-looking
• Competent
• Inspiring

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Lessons From Leadership Studies
• Following conclusions can be drawn on
effective leadership:
• High consideration and initiating structure often
provide a successful leadership style
• Under high-pressure situations, emphasis on
initiating structure is preferred by subordinates
• When the manager is the only information source
for subordinates regarding their tasks, they often
expect the manager to structure their behavior

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Lessons From Leadership Studies
• Subordinates have differing preferences
regarding the degree of consideration and
initiating structure exhibited by their managers
• Higher management often has set preferences
regarding the leadership styles employed by
lower-level managers
• Some managers can adjust their behavior to fit
the situation, while others, in attempting to
make this adjustment, appear to be fake and
manipulative

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