Chapter 12

Leadership in
organisational
settings
Learning objectives
12.1 Define leadership and shared leadership
12.2 List the main competencies of effective leaders and
discuss the limitations of the competency perspective of
leadership
12.3 Discuss the key elements of path–goal theory, Fiedler’s
contingency model and leadership substitutes
12.4 Describe the four elements of transformational
leadership, and distinguish this theory from transactional
and charismatic leadership
12.5 Describe the implicit leadership perspective
12.6 Describe ethical leadership
12.7 Discuss similarities and differences between the
leadership styles of women and men

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McShane, Olekalns, Travaglione, Organisational Behaviour, 4e 12-2
 Carolyn McCall, CEO of easyJet
• Transformed the British
discount airline into one of the
most successful in the world.
• McCall’s transformational
leadership is anchored on a
vision of easyJet as a low-cost
airline that delivers excellent
customer service.
• She replaced several
executives with leaders who
were more committed to that
vision.

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McShane, Olekalns, Travaglione, Organisational Behaviour, 4e 12-3
Leadership Defined
Leadership is the ability to
influence, motivate and
enable others to contribute
toward the effectiveness of
the organisations of which
they are members

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McShane, Olekalns, Travaglione, Organisational Behaviour, 4e 12-4
Shared Leadership
The view that leadership is broadly distributed
rather than assigned to one person
Employees are leaders when they champion
change in the company or team
Shared leadership calls for:
• Formal leaders willing to delegate power
• Collaborative culture (employees support
each other)
• Employee ability to influence through
persuasion
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McShane, Olekalns, Travaglione, Organisational Behaviour, 4e 12-5
Transformational Leadership
Perspective

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McShane, Olekalns, Travaglione, Organisational Behaviour, 4e 12-6
Transformational Leadership
Elements
• Develop/Communicate the strategic vision
– heart of transformational leadership is a strategic
vision
– strategic vision possesses several identifiable features
– vision’s effectiveness depends on how leaders convey
it to followers and other stakeholders
• Model the vision
– Leaders must “walk the talk”
– model the vision through significant events
– legitimizes and demonstrates what the vision looks like
in practice

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McShane, Olekalns, Travaglione, Organisational Behaviour, 4e 12-7
Transformational Leadership
Elements continued
• Encourage experimentation
– discovering new behaviours and practices that are better aligned
with the desired vision
– support a learning orientation
– encourage employees to continuously question current practices,
actively experiment with new ideas and work processes

• Build commitment to the vision

– build a contagious enthusiasm that energizes people to adopt the
vision
– Demonstrate a can-do attitude
– involving employees in the change process as a collective activity
– Provide rewards, recognition, and celebrations as they pass
milestones

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McShane, Olekalns, Travaglione, Organisational Behaviour, 4e 12-8
Transformational versus
Charismatic Leaders
• Some leadership models say charismatic
leadership is essential for transformational
leadership
• Emerging view: charisma differs from
transformational leadership
• Charisma is a personal trait that provides
referent power
– Does not necessarily attempt to change the
organisation
• Transformational leadership is a set of
behaviours to bring about change
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McShane, Olekalns, Travaglione, Organisational Behaviour, 4e 12-9
Evaluating Transformational
Leadership
• Transformational leadership is important
– Higher employee satisfaction, performance,
organisational citizenship, creativity
• Transformational leadership limitations
– Some models have circular logic
 Defines transformational leaders by their
success rather than their behaviour (result: no
predictive value)
– Universal theory
 Need a contingency-oriented theory
 Recognise differences across cultures
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McShane, Olekalns, Travaglione, Organisational Behaviour, 4e 12-10
Managerial Leadership
Perspective
• Task oriented vs
people-oriented
leadership
• Servant
leadership
• Path-goal
leadership Theory

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McShane, Olekalns, Travaglione, Organisational Behaviour, 4e 12-11
Task oriented vs people-oriented
leadership

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McShane, Olekalns, Travaglione, Organisational Behaviour, 4e 12-12
Servant Leadership

• Extension or variation of
people-oriented leadership
• Selfless, egalitarian,
humble, nurturing,
empathetic, and ethical
coaches
• Relies heavily on the idea
of authentic leadership

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McShane, Olekalns, Travaglione, Organisational Behaviour, 4e 12-13
Path–Goal Leadership Theory
• Originated with expectancy theory of motivation
– Paths = employee expectancies
– Goals = employee performance
• States that effective leaders ensure that employees who
perform their jobs well receive more valued rewards than
those who perform poorly

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McShane, Olekalns, Travaglione, Organisational Behaviour, 4e 12-14
Path-Goal Leadership Model

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McShane, Olekalns, Travaglione, Organisational Behaviour, 4e 12-15
Path–Goal Leadership Styles
• Directive
– Provide psychological structure to jobs
– Task-oriented behaviours
• Supportive
– Provide psychological support
– People-oriented behaviours
• Participative
– Encourage/facilitate employee involvement
• Achievement-oriented
– Encourage peak performance through goal setting
and positive self-fulfilling prophecy
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McShane, Olekalns, Travaglione, Organisational Behaviour, 4e 12-16
Path-Goal Contingencies

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McShane, Olekalns, Travaglione, Organisational Behaviour, 4e 12-17
Other Managerial Leadership
Theories
• Situational leadership model
– Effective leaders vary style with follower
‘readiness’
– Leader styles: telling, selling, participating and
delegating
– Popular model, but lacks research support
• Fiedler’s contingency model
– Leadership style is stable, based on personality
– Best style depends on situational control
– Theory has problems, but uniquely points out
inflexibility of leadership style
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McShane, Olekalns, Travaglione, Organisational Behaviour, 4e 12-18
Leadership Substitutes
• Contingencies that limit a leader’s influence
or make a particular leadership style
unnecessary
– E.g. training and experience replace task-oriented
leadership
• Research evidence: substitutes help, but do
not completely substitute for real leadership

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McShane, Olekalns, Travaglione, Organisational Behaviour, 4e 12-19
Implicit Leadership
Perspective
• Follower perceptions of characteristics of
effective leaders
• Leadership prototypes
– Preconceived image of effective leader, used to
evaluate leader effectiveness
• Romance of leadership effect
– Amplify effect of leaders on organisational results
– Fundamental attribution error
– Need for situational control

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McShane, Olekalns, Travaglione, Organisational Behaviour, 4e 12-20
Personal Attributes
Perspective of Leadership
• Personal characteristics that distinguish great leaders from the rest of us –
(result of earlier studies) NO consistent list of leadership traits could be distilled
from previous research.

• From researches a decade later – only a few traits are associated with effective
leaders (these nonsignificant findings caused many scholars to give up their
search for the personal characteristics of effective leaders)

• Later, leadership experts have returned to the notion that effective leaders
possess specific personal attributes.

• Most scholarly studies long ago were apparently plagued by methodological

problems, lack of theoretical foundation, and inconsistent definitions of
leadership. The emerging research has largely addressed these problems.

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McShane, Olekalns, Travaglione, Organisational Behaviour, 4e 12-21
Eight Leadership
Competencies
• Extroversion, conscientiousness
Personality
(and other traits)

• Positive self-evaluation
Self-concept • High self-esteem and self-efficacy
• Internal locus of control

• Inner motivation to pursue goals

Drive
• Inquisitiveness, action-oriented

• Truthfulness
Integrity
• Consistency in words and actions

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McShane, Olekalns, Travaglione, Organisational Behaviour, 4e 12-22
Eight Leadership
Competencies continued
Leadership • High need for socialised power to
motivation achieve organisational goals

Knowledge of • Understand external environment

the business • Aid intuitive decision making

Cognitive/
• Above average cognitive ability
practical
• Able to solve real-world problems
intelligence

Emotional • Perceiving, assimilating, understanding,

intelligence and regulating emotions

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McShane, Olekalns, Travaglione, Organisational Behaviour, 4e 12-23
Authentic Leadership
• How well leaders are aware of, feel
comfortable with and act consistently with
their self-concept
• As people learn more about themselves, they
gain a greater understanding of their inner
purpose, behave consistently with their self-
concept and their value system

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McShane, Olekalns, Travaglione, Organisational Behaviour, 4e 12-24
PERSONAL ATTRIBUTES PERSPECTIVE
LIMITATIONS AND PRACTICAL
IMPLICATIONS
1. Implies a universal approach
2. Alternative combinations of competencies
might work just as well
3. Assumes leadership is within the person
– But leadership is also about relations with
followers
4. Competencies refer to leadership potential,
not performance

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McShane, Olekalns, Travaglione, Organisational Behaviour, 4e 12-25
Cultural Issues in Leadership
• Societal cultural values and practices affect
leaders
– Shape leaders’ values and norms
– Influence decisions and actions
– Shape follower prototype of effective leaders
• Some leadership styles are universal, others
differ across cultures
– ‘Charismatic visionary’ seems to be universal
– Participative leadership works better in some
cultures than others

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McShane, Olekalns, Travaglione, Organisational Behaviour, 4e 12-26
Gender Issues in Leadership
• Male and female leaders have similar task-
and people-oriented leadership
• Participative leadership style is used more
often by female leaders
• Evaluating female leaders
– Still receive negative evaluations as leaders due
to prototypes and gender stereotypes
– But evidence that they are good at emerging
leadership styles (coaching, teamwork)

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McShane, Olekalns, Travaglione, Organisational Behaviour, 4e 12-27
Summary
• Leadership is one of the most researched,
and possibly the most complex, topics in
organisational behaviour
• This has resulted in an enormous volume of
leadership literature, most of which can be
organised into four perspectives:
competency, contingency, transformational
and implicit
• Further attention needs to be given to the
ethical aspects of leadership, as well as to
cultural and gender issues
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McShane, Olekalns, Travaglione, Organisational Behaviour, 4e 12-28
 Chapter 12

Leadership in
organisational
settings