ENGINEERING

MANAGEMENT
Lesson No. 9 - Leading
Specific Objectives of the Lesson

 At the end of the lesson, the student should be able to:

 Enumerate the major sources of leader power
 Describe the current state of efforts to identify leadership traits
 Learn the different studies of leadership behaviors
 Understand the different approaches to leadership
 Delineate the Fiedler’s contingency theory and other theories
regarding leadership
 Learn the different situational approaches to leadership
 Understand the contemporary perspective on leadership
Leadership
 Faced with the need to revitalize Mattel’s most
famous brand name, Barad took firm hold of the
reins and provided the leadership the Barbie product
area needed. She has played a critical leadership roll
in creating a new vision for Mattel and fashioning it
into the world’s largest toy maker.
 But what is Leadership?
 Leadership is the process of influencing others to achieve
organizational goals.
 It is considered the foundation of the management function known as
leading.
HOW LEADERS INFLUENCE
OTHERS
 Why do people accept the influence of a leader?
Often they do so because leaders have power.
 Power is the capacity to affect the behavior of others.
 Sources of Leader Power
 Legitimate power – stems from a position’s placement in the
managerial hierarchy and the authority vested in the position.
 Reward power – is based on the capacity to control and provide valued
rewards to others.
 Coercive power – depends on the ability to punish others when they do
not engage in desired behaviors.
 Expert power – is based on the possession of expertise that is valued by
others.
 Information power – results from access to and control over the
distribution of important information about organizational operations and
future plans.
 Referent power – results from being admired, personally identified with,
or liked by others.
Effective Use of Leader Power
 Although all six types of power are potential means of influencing
others, in actual usage they may elicit somewhat different levels of
subordinate motivation.
 Subordinate can react to a leader’s direction with commitment,
compliance, or resistance.
 With commitment, employees respond enthusiastically and exert high
level of effort towards organizational goals.
 With compliance, employees exert minimal effort to complete directives
but are likely to deliver average, rather stellar performance.
 With resistance, employees may appear to comply but actually do the
absolute minimum, possibly even attempting to sabotage the attainment
of organizational goals.
The relationship between a leader’s use of
different sources of power and likely subordinate
reactions is summarized in the table below.

LIKELY SUBORDINATE REACTIONS

RESISTANCE COMPLIANCE COMMITMENT

LEGITIMATE
POWER REFERENT
COERCION INFORMATION
SOURCE EXPERT
REWARD

As the table illustrates:

Expert power and referent power are most likely to lead

subordinate to commitment. Legitimate power, information
power and reward power tend to result in compliance.
Coercive power has the strong tendency to provoke resistance.
 For example:
 When Chicago scrap-metal czar Cyrus Tang bought the ailing
McLough Steel Products Corporation, he relied on legitimate and
coercive power to gain worker cooperation. Workers reacted with
production slowdowns and wildcat strike that eventually led to
the further deterioration of the company.
 Managers usually rely on several different types of power in order to
be effective.
 For example:
 This approach is evident in the leadership of Bill Walsh, who coached the
San Francisco 49ers to three Super Bowl Championships within an 8 year
period, and then became head football coach for Stanford University,
before returning to assist the 49ers again. Walsh clearly has the legitimate
power because of his coach’s position. However, he relies heavily on
expert power by knowledge of the game. Walsh drawn out the whole
season’s practices minute by minute to ensure that players learn the
individual and group skills necessary to be champion. He also uses
referent power in the sense of building a reputation for turning his team’s
disadvantages.
 For instance, to help overcome the disadvantage of playing on the road, a
situation in which the home team often has the disadvantage, Walsh uses
heroic stories form World War II to help his players condition themselves
for enter what is essentially an enemy’s territory. He uses international
power to talk with each player and help each one understand his
important role in the game. Yet he avoids coercion. According to one of
his assistant coaches at Stanford, “one of the primary concerns of that
Bill passes on to his assistant is that we never humiliate a player, and that
we don’t even shout. We must coach in a way that is respectful.” Instead,
he promotes closeness among team members.
LEADERSHIP TRAITS

 While power helps explain the inducements behind leader

influence, we need to look at additional concepts, such as
leadership traits and behavior, to help explain more fully how
leaders exert influence in organizations.
 Drive
 Desire to lead
 Honesty/integrity
 Self-confidence
 Emotional stability
 Cognitive ability
 Knowledge of the business
LEADERSHIP BEHAVIORS

 Why was Chairman Raymond L. Hizon able to build the

Bonneville Pacific Corporation into a thriving independent power
company, while John Kuhns, the Catalyst Energy Chief, ran into
difficulties leading a similar company?
 A number of researchers have focused on the intriguing prospect
that it may be specific behaviors that make some leaders more
effective than others.
 Whereas many inherent (natural) traits may be difficult to change,
it might be possible for most of us to learn universally effective
leadership behaviors – if they could be identified – and become
successful leaders.
Leadership Behaviors and Style

 Three types of leaders have been identified:

 Autocratic leaders – tend to make unilateral decisions, dictate work
methods, limit workers knowledge about goals to just the next step to
be performed and sometimes give punitive feedbacks.
 Democratic leaders – tend to involve the group in decision making,
let the group determine work methods, make overall goals known,
and use feedback as an opportunity for helpful coaching.
 Laissez-faire (lenient) leaders – generally gives the group complete
freedom, provide necessary materials, participated only to answer
questions, and avoid giving feedback – in other words, they do almost
nothing.
 Which of the leader mentioned above will be the most effective?
Continuum of Leader’s Behavior

 To help managers sort out dilemma, particularly with regards

to making decisions, management scholars Robert
Tannenbaum and Warren H. Schmidt developed the
continuum of leader’s behavior as shown:
Boss – Centered Subordinate – Centered
Leadership Leadership
(Autocratice) (Democratic)

Use of Authority
by the Manager

Area of Freedom
for Subordinates

Manager Manager Manager Manager Manager Manager Manager

makes sells process presents presents defines permits
decision and decision ideas and tentative problem limit; ask subordinates to
announces invites decision gets group to function within
it questions subject to suggestions make limits defined by
change and makes decision supervisor
decision
University of Michigan Study

 Further work on leadership at the University of Michigan seems

to confirm the usefulness of an employee-centered approach
when compared with a more job-centered, or production-
centered approach. With the employee-centered approach,
leaders focused on building effective work groups dedicated to
high performance goals.
 With the job-centered approach, leaders divided the work into
routine task and closely supervised workers to ensure that the
prescribed methods were followed and that productivity standards
are met.
Ohio State University Studies

 A group of researchers at Ohio State University developed

another strategy for studying leadership.
 They began by identifying a number of important leader’s
behaviors. Then they developed a questionnaire that enable them
to measure the behaviors of different leaders and track factors
such as group performance and satisfaction to see which
behaviors were most effective.
 Although the researchers isolated a number of different leader’s
behaviors, or styles, two stood out as particularly important:
Ohio State University Studies

 Initiating structure
 degree to which leader structures followers’ roles by setting goals,
giving directions, setting deadlines, and assigning tasks
 Consideration
 extent to which a leader is friendly, approachable, supportive, and
shows concern for employees
 In a major departure from the Iowa and Michigan, both of which
considered their leadership dimensions be opposite ends of the
same continuum, the Ohio State Study proposed the initiating
structure and consideration were two independent behaviors. This
means that the behaviors operated on separate continuum.
 A leader can be high on both, low on both, or high on one and
low on the other, or could display various gradations in between.
 The two dimensional approach is depicted in the figure in the
next slide:
OHIO UNIVERSITY TWO-DIMENSIONAL
MODEL OF LEADER’S BEHAVIOR

Low Initiating High Initiating

Structure Structure
C
O High
High
N Consideration High
Consideration
S
I
D
E
Low Initiating High Initiating
R Structure Structure
A
Low
T
I Low Low
Consideration Consideration
O
N

Low High

INITIATING STRUCTURE
 This configuration made sense, since many leaders seemed to
have a characteristics of both initiating structure and
consideration.
 For example:
 Lynn Shostack of Joyce International practices the initiating-structure
style but is known for encouraging and supporting good employees. On
the other hand, Ann Fudge of Maxwell House Coffee relies on the
consideration style, but she instituted a “Shape Up” program to eliminate
unnecessary reports and keeps her eyes solidly on the bottom line.
 The two dimensional approach led to the interesting possibility
that a leader might be able to place high emphasis on task issues
and still promote high levels of subordinate satisfaction by
simultaneously exhibiting considerations behavior.
 While initial studies supported the idea that a leader exhilarating
both high initiating structure and high consideration would
produce the best result, the notion of the great high-high leader
was later pronounced a myth.
The Managerial Grid

 One popularized outgrowth of the emphasis on leader behaviors

aimed at both task and people issues is the Managerial Grid.
 Rather than focusing directly on the leader behaviors addressed
by the Ohio State University study, the grid approach uses
parallel approach.
C 9
1. 9
9. 9
O TEAM MANAGEMENT
COUNTRY CLUB MANAGEMENT
Work accomplishment is from
N 8 Thoughtful attention to the needs of
committed people, interdependence
people for satisfying relationship leads
C to comfortable, friendly organization
through a “common stake” in
organization purpose leads to
E 7 atmosphere and work tempo
relationship of trust and respect
R
N 6
5. 5
F ORGANIZATION-PERSON
MANAGEMENT
O 5
Adequate organization performance is
R possible through balancing the necessity
to get out work with maintaining
4 morale of people at a satisfactory level
P
E
3
O 1. 1 9. 1
IMPROVERISHED MANAGEMENT AUTHORITY - OBEDIENCE
P Exertion of minimum effort to get Efficiency in operations results from
L 2 required work done is appropriate to arranging conditions of work in such a
sustain organization membership way that human elements interfere to
E a minimum degree
1

1 2 3 4 5 6 7 8 9

CONCERN FOR PRODUCTION

 Depending on the degree of concern for people and production, a
manager can fall anywhere on the grid. It was argued that the
most desirable leadership approach is 9.9 orientation which
involving a high concern for both people and production.
 The Ohio studies suggest that 9.9 orientation might not always be
the best. The grid does allow for flexibility in actual leader
behaviors, depending on a leader’s assessment of the people and
production issues in a given situation.
Female versus Male Leader
Behavior
 In the course of studying various leader behaviors, some researches
began to wonder whether female managers exhibit different leader
behavior than male managers.
 Early survey data indicated that a number of people viewed females
as being highly oriented toward interpersonal issues and, therefore,
possibly ill-suited for leadership position. Males were seen as more
oriented toward task issues and as better candidates for leadership
slots. As it turn out, neither stereotype is correct.
 Most studies indicate that female and male leaders are similar in the
amounts of interpersonal and task behaviors they exhibit or all that
differences tend to be small.
 Furthermore, they appear to be equally effective in terms of eliciting
subordinate job satisfaction and performance.
DEVELOPING SITUATIONAL
THEORIES
 Although they attempted to identify leadership behaviors that would
work in every situation, the various researchers pursuing the
behavioral view of leadership eventually found that leader behaviors
that worked well in one situation were often not as effective in
another situation.
 As a result, theories of leadership began to emerge that take into
consideration important situational factors. Such factors are called
situational theories because of their situational emphasis. They are
often called contingency theories of leadership because they hold
that appropriate leader traits or behaviors are dependent on relevant
situational characteristics.
 Since there are potentially many situational factors that can influence
the effectiveness of leaders, several different situational approaches
have evolved.
 Fiedler’s Contingency Theory

Exhibit 15.12
Putting Leaders in the
Right Situation:
Fiedler’s Contingency Theory
 Leadership style: Least preferred co-worker
 Situational favourableness
 Matching leadership styles to situations
Leadership Style: Least Preferred
Co-worker
 Leadership style is the way a leader generally behaves toward
followers
 leaders are generally incapable of changing their leadership styles
 Style is measured by the Least Preferred Co-worker scale
(LPC)
 relationship-oriented
 task-oriented
Situational Favourableness

 How a particular situation either permits or denies the leader’s

ability to lead
 Three factors
 leader-member relations
 task structure
 position power
 Situational Favourableness

Exhibit 15.14
 Matching Leadership Styles to
Situations

Exhibit 15.15
 Fiedler believes that managers cannot easily change their LPC
orientation or management style. As a result, he argues that leaders
need to understand their leadership style and analyze the degree of
favorability, or situational control. It the match between the two is
not good, a leader needs to either make changes (e.g., increase task
structure) or find a more compatible leadership situation. Fiedler
calls this approach “engineering the job to fit the manager”.
 One task-oriented leader who has been extremely successful is
Chung Ju-Yung of Korean Hyundai Group..
 Recent sophisticated analyses of various studies of Fiedler’s contingency model
support its usefulness for managers. However, these analyses suggest that there
are also other factors that are not accounted for it in the said model. Thus
managers need to rely to additional situational leadership theories, such as:
 Normative Leadership Model – this type of model helps leaders access
critical situational factor that affect the extent to which they should involve
subordinate in particular decisions.
 Situational Leadership Theory – this theory was based on the premise that
leaders need to alter their behaviors depending on one major situational
factor — the readiness of the followers.
 Path-Goal Theory – this theory attempts to explain how leader behavior can
positively influence the motivation and job satisfaction of subordinates. It is
called path-goal theory because it focuses on how leaders influences the way
that subordinates perceive work goals and possible paths to reaching both
work goals (performance) and personal goals (rewards).
 CONTEMPORARY
PERSPECTIVE ON
LEADERSHIP
 Substitute for Leadership
 Sometimes leaders don’t have to lead—or they can’t lead. The
situation may be one in which leadership is unnecessary or has little
impact. Substitute for leadership can provide the same influence on
people, that leaders otherwise would have.

Charismatic Transformational
leadership leadership
Charismatic Leadership

 Creates an exceptionally strong relationship between leader and

followers
 Charismatic leaders:
 articulate a clear vision based on strong values
 model those values
 communicate high expectations to followers
 display confidence in followers’ abilities
Types of
Charismatic Leaders
 Ethical charismatics
 provide development opportunities for followers
 open to positive and negative feedback
 recognize others’ contributions
 share information
 emphasize interests of the group
 Unethical charismatics
 control and manipulate followers
 do what is best for themselves not the organization
 only want positive feedback
 only share information beneficial to themselves
Transformational
Leadership

 Generates awareness and acceptance of group’s purpose and

mission
 Gets employees to see beyond their own needs and self-interest
 Goes beyond charismatic leadership
 Different from transactional leadership
Transformational Leadership

Transformational leaders are visionary and they use:

 Inspirational motivation
 Intellectual stimulation
 Individualized consideration
Post-Heroic Leadership

 A common view of leaders is that they are heroes. Phenomenally

talented, they step forward in difficult times and save the day.
 But in these complex times, it is foolhardy to assume that a great
executive can solve all the problems by himself or herself.
 No one person can deal with all of today’s rapid-fire changes,
competitive threats, and escalating customer demands.