Leading in organisations

Chapter summary

This chapter covers several important ideas about leadership. Early research on leadership
focused on personal traits such as: intelligence, energy and appearance. Research then shifted to
leadership behaviours that are appropriate to the organisational situation. Behavioural
approaches dominated the early work in this area. Consideration and initiating structure were
suggested behaviours that lead work groups toward high performance as described in the
following approaches:
• the Ohio State studies
• the Michigan studies
• the leadership grid.

Contingency approaches explain the relationship between leadership styles and specific
organisational situations. Contingency approaches include:
• Fiedler’s contingency theory
• Hersey and Blanchard’s situational theory
• path–goal model
• substitutes-for-leadership concept.

Leadership concepts have evolved from the transactional approach to charismatic,

transformational, interactive and servant leadership behaviours:
• Transactional leadership clarifies employees’ role and task requirements, initiates structure,
provides rewards and displays consideration for employees.
• Charismatic leadership is the ability to articulate a vision and motivate employees to make it a
reality.
• Transformational leadership extends charismatic qualities to guide and foster dramatic
organisational change.
• Interactive leadership, typical of many women leaders, involves consensus building,
empowerment, and sharing information and resources.
• Leaders in learning organisations have three distinct roles: to create a shared vision; to design
an appropriate horizontal structure to help achieve the vision, and to act as servant leaders.
• Servant leadership facilitates the growth, goals and empowerment of followers in order to
liberate their best qualities in pursuing organisational goals.

The post-heroic approach constitutes a shift in how we are thinking about leadership. It focuses
on the subtle, unseen and often unrewarded acts that good leaders perform. Approaches that are
in sync with post-heroic leadership are: servant leadership, interactive leadership, and moral
leadership.

Learning objectives

After studying this chapter, students should be able to: • define leadership and explain its
importance for organisations There is probably no topic more important to business success
today than leadership. Leadership occurs between people, involves the use of influence, and is
used to achieve goals. Thus leadership can be defined as the ability to influence people toward
the attainment of organisational goals. Leadership is dynamic and involves the use of power.
Power is the potential ability to influence the behaviour of others, and represents the resources
with which a leader effects changes in employee behaviour.

• describe how leadership is changing in today’s organisations

Ethical and economic difficulties, corporate governance concerns, globalisation, changes in

technology, new ways of working, shifting employee expectations, and significant social
transitions have contributed to a shift in how we think about and practise leadership. During the
1980s and 1990s, leadership became equated with larger-than-life personalities, strong egos, and
personal ambitions. In contrast, the post-heroic leader’s major characteristic is humility. A post-
heroic approach that focuses on the subtle, unseen, and often unrewarded acts that good leaders
perform every day, rather than on the grand accomplishments of celebrated business heroes

• identify personal characteristics associated with effective leaders

Traits are the distinguishing personal characteristics of a leader such as intelligence, values, and
appearance. Generally, research has found only a weak relationship between personal traits and
leader success. In addition to personality traits, physical, social and work-related characteristics
have been studied. The appropriateness of a trait or set of traits depends on the leadership
situation. Further studies have expanded the understanding of leadership beyond the personal
traits of the individual to focus on the dynamics of the relationship between leaders and
followers.

• explain the five sources of power and how each causes different employee behaviour

Power is the potential ability to influence the behaviour of others, and represents the resources
with which a leader effects changes in employee behaviour. Within organisations there are
typically five sources of power:

1 Legitimate power comes from a formal management position in an organisation and the
authority granted to it.

2 Reward power stems from the manager’s authority to bestow rewards on others.

3 Coercive power, the opposite of reward power, refers to the manager’s authority to punish or
recommend punishment.

4 Expert power results from a leader’s special knowledge or skill.

5 Referent power comes from leader personality characteristics that command subordinate’s
identification, respect, and admiration so they wish to emulate the leader.

• discuss how leadership fits the organisational situation and how organisational characteristics
can substitute for leadership behaviour

Another contingency leadership approach suggests that situational variables can be so powerful
that they actually substitute for or neutralise the need for leadership. A substitute for leadership
makes the leadership style unnecessary or redundant – for example, highly professional
employees who know how to do their tasks do not need a leader to initiate structure for them and
tell them what to do. A neutraliser counteracts the leadership style and prevents the leader from
displaying certain behaviours – for example, if a leader has no position power, or is physically
removed from subordinates, the leader’s ability to give directions to subordinates is greatly
reduced. Organisational variables that can substitute for leadership behaviour include group
cohesiveness and formalisation.

• describe Hersey and Blanchard’s situational theory and explain its application to employee
participation

Hersey and Blanchard’s situational theory is a contingency approach to leadership that links the
leader’s behavioural style with the task readiness of employees. Employees vary in readiness
level. People low in task readiness, because of little ability or training, or insecurity, need a
different leadership style than those who are high in readiness and have good ability, skills,
confidence and willingness to work. The leader should evaluate subordinates and adopt
whichever style is needed. If one or more followers are at low levels of readiness, the leader
must be very specific, telling them exactly what to do, how to do it, and when. For followers
high in readiness, the leader provides a general goal and authority to do the task as they see fit.

• describe transformational leadership and explain when it should be used

Managers deal with organisational complexity, leaders initiate productive change.

Transformational leaders are similar to charismatic leaders, but are distinguished by their special
ability to bring about innovation and change. They create significant change in both followers
and the organisation. Transformational leaders have the ability to lead changes in the
organisation’s mission, strategy structure, and culture, as well as to promote innovation in
products and technologies.

• explain the path–goal model of leadership

Path–goal theory suggests it is the leader’s responsibility to increase subordinates’ motivation to

attain personal and organisational goals. The leader increases their motivation by either
clarifying the subordinates’ path to the rewards that are available or increasing the rewards they
value and desire. The path–goal model of leadership is a contingency approach because it
consists of three sets of contingencies: leader behaviour and style, situational contingencies, and
the use of rewards to meet subordinates’ needs.

• explain servant leadership and moral leadership and their importance in contemporary
organisations. The concept of servant leadership is leadership upside down because leaders
transcend self-interest to serve others and the organisation. Servant leaders operate on two levels:
for the fulfilment of their subordinates’ goals and needs, and for the realisation of the larger
purpose or mission of their organisation. Servant leaders are important because they encourage
participation, share power, enhance others’ self-worth, and unleash people’s creativity, full
commitment, and natural impulse to learn and contribute. Moral leadership is about
distinguishing right from wrong and choosing to do right. It means seeking the just, the honest,
the good, and the decent behaviour in the practice of leadership. Moral leadership is important
because leadership can be used for good or evil, to help or to harm others. Consequently, all
leadership has a moral component and leaders carry a tremendous responsibility to use their
power wisely and ethically.

Lecture outline – Teaching points

The nature of leadership

Leadership can be defined as the ability to influence people towards the attainment of
organisational goals. Thus, leadership:

• occurs between people

• involves the use of influence

• is used to achieve goals.

Leadership is a ‘people’ activity, distinct from paper-shuffling or problem-solving activities.
Leadership is dynamic and involves the use of power.
Leadership for contemporary times
The environmental context in which leadership is practised influences which approach might be
most effective, as well as what kinds of leaders are most admired by society. A significant
influence on leadership styles in recent years is the turbulence and uncertainty of the
environment in which most organisations are operating. The following have contributed to a shift
in how we think about and practise leadership:
• Ethical and economic difficulties
• Corporate governance concerns

• Globalisation

• Changes in technology
• New ways of working

• Shifting employee expectations

• Social transitions

During the 1980s and 1990s, leadership became equated with larger-than-life personalities,
strong egos, and personal ambitions. In contrast, the post-heroic leader’s major characteristic is
humility and is an approach to leadership that focuses on the

Leadership versus management

Management and leadership are both important to organisations. Management power comes from
organisational structure. It promotes stability, order and problem solving within the structure.
Leadership power comes from personal sources that are not as invested in the organisation, such
as personal interests, goals and values. Leadership power promotes vision, creativity and change
in the organisation. Power is the potential ability to influence the behaviour of others. Power
represents the resources with which a leader effects changes in employee behaviour. There are
typically five sources of power: legitimate, reward, coercive, expert and referent. Sometimes
power comes from a person’s position in the organisation, while other sources of power are
based on personal characteristics. Position power The traditional manager’s power comes from
the organisation. The position gives managers power to reward or punish subordinates to
influence their behaviour. Forms of position power are:

 Legitimate power. Power and authority coming from a formal management position in an
organisation. Employees accept this source of power as legitimate, which is why they
comply.

 Reward power. Stems from the manager’s authority to bestow rewards on employees and
thus influence behaviour. Rewards may include:

− pay increases

− promotion

− praise

− recognition
• Coercive power. The opposite of reward power. Coercive power includes the manager’s

authority to:

− fire

− demote

− reprimand

− withdraw pay increases.

Different types of position power elicit different responses from followers. Legitimate power and
reward power are most likely to generate follower compliance; that is, workers carry out
instructions, even though they may disagree with them. Coercive power most often generates
resistance (i.e. workers deliberately try to avoid carrying out instructions).
Personal power Personal power most often comes from internal sources, such as a person’s
special knowledge or personality characteristics. Examples of personal power are:
• Expert power. Results from a leader’s special knowledge or skill regarding the tasks
performed by
followers. When the leader is a true expert, employees go along with recommendations because
of her/his superior knowledge.
• Referent power. Comes from leader personality characteristics that command followers’
identification, respect and admiration so they wish to try to be like the
leader. Employee response will be commitment (i.e. workers will enthusiastically carry out
instructions).
Empowerment A significant recent trend is for top management to empower employees at lower
levels in the organisation. Executives are more participative, more concerned with consensus
building, and more reliant on communication than command.
Leadership traits
Early efforts to understand leadership success focused on the leader’s personal characteristics or
traits. Traits are the distinguishing personal characteristics of a leader such as intelligence, values
and appearance. Generally, research found only a weak relationship between personal traits and
leader success. Physical, social and work-related characteristics of leaders have also been
studied. The appropriateness of a trait or set of traits depends on the leadership situation. The
same traits do not apply to every organisation or situation.
Autocratic versus democratic leaders
One way of looking at leader characteristics is to examine autocratic and democratic leaders. An
autocratic leader tends to centralise authority and rely on legitimate, reward and coercive power.
Employees perform highly as long as the leader is present. Members are frequently displeased
with the close autocratic leadership and feelings of hostility frequently arise. A democratic
leader delegates authority, encourages participation, and relies on expert and referent power to
influence subordinates. Employees perform well even when the leader is absent. The group is
characterised by positive feelings rather than hostility. These characteristics of democratic
leadership explain why the empowerment of lower employees is a popular trend. Research
suggests the extent to which the leader is autocratic (boss-centred leadership) or democratic
(subordinate-centred leadership) depends on organisational circumstances. The leader tends to be
autocratic if: there is a time pressure; employees are slow to learn to make decisions; or there is a
great skill difference between leader and employee. The leader tends to be democratic if
employees are able to learn decision-making skills.

Behavioural approaches

The focus of research has shifted from leader personality traits toward the behaviours successful
leaders display. The significance of the following three streams of research is that each stream
discovered similar dimensions of leadership style.
Ohio State studies
The Ohio State studies of leader behaviour identified two major leadership behaviours called
consideration and initiating structure. Consideration is the extent to which the leader:
• is considerate of subordinates

• respects their ideas and feelings

• establishes mutual trust.

Considerate leaders tend to:
• be friendly
• provide open communication
• develop teamwork
• be oriented toward their subordinates’ welfare.

Initiating structure is the extent to which a leader is task oriented and directs subordinate
activities towards goals. Leaders with this style typically:
• give instructions
• spend time planning
• emphasise deadlines
• provide schedules of work activities.

Michigan studies The University of Michigan studies compared the behaviour of effective and
ineffective supervisors. Employee-centred leaders were the effective leaders who:
• established high performance goals

• displayed supportive behaviour towards employees

• built effective work groups.

Job-centred leaders were the ineffective leaders and tended to be:

• less concerned with goal achievement and human needs

• more concerned with meeting schedules, keeping costs low and achieving production

efficiency.

The leadership grid

Blake and Mouton at the University of Texas developed the leadership grid. This is a two-
dimensional leadership model that measures a leader’s concern for production and concern for
people on a scale from 1 (low concern) to 9 (high concern). Team management (9,9) is when
organisation members work together to accomplish task outcomes, and is often considered the
most effective style for all managers. Country-club management (1,9) occurs when primary
emphasis is given to people rather than to work outputs. Authority-compliance management (9,1)
occurs when efficiency in operations is the dominant orientation. Middle-of-the-road
management (5,5) reflects a moderate concern for both people and production. Impoverished
management (1,1) means managers exert little effort towards work accomplishment or
interpersonal relationships.

Contingency approaches

A contingency approach to leadership is a model that describes the relationship between

leadership styles and specific organisational situations. Several contingency models have been
developed, including:
Fiedler’s contingency theory Fiedler’s contingency theory attempts to match the leader’s style
with the organisational situation most favourable for a correct fit or success.
Leadership style diagnoses the leader’s style in terms of relation ship orientation or task
orientation. A relationship-oriented leader is concerned with people. A task-oriented leader is
primarily motivated by task accomplishment. Leadership style is measured using the ‘least
preferred co-worker’ (LPC) scale. Leadership situation can be analysed in terms of:
• Leader–member relations – group atmosphere and members’ attitudes towards and
acceptance of the leader.

• Task structure – extent to which tasks performed by the group are defined, involve specific
procedures, and have clear, explicit goals.

• Position power – extent to which the leader has formal authority over employees.

Combining the three situational characteristics results in a list of eight leadership situations.
Fielder proposes that:
• task-oriented leaders are more effective when the situation is either highly favourable
(everyone gets along, the task is clear and the leader has power) or highly unfavourable
• relationship-oriented leaders are more effective in situations of moderate favourability (human
relations skills are important in achieving group performance).

To use Fiedler’s contingency theory, a leader needs to:

• know whether he/she has a relationship- or task-oriented style; and
• diagnose the situation and determine if the leader–member relations, task structure and position
power are favourable or unfavourable.
Hersey and Blanchard’s Situational Leadership® Model Hersey and Blanchard’s Situational
Leadership® Model links the leader’s behavioural style with the task readiness of employees.
This approach focuses on the characteristics of employees in determining appropriate leadership
behaviour. People low in task readiness need a different leadership style than those high in
readiness. People have low task readiness due to:
• little ability
• limited skills
• lack of training
• insecurity.

People with high task readiness tend to have:

• good ability
• well-developed skills
• confidence

• willingness to work.

There are four leadership styles, the appropriateness of which depend on the readiness of
followers:
• telling (S1) – for low readiness (R1) employees; because they are unable and unwilling to take
responsibility for their own task behaviour, the leader must be very specific and tell employees
what to do, how to do it, and when to do it
• selling (S2) – for employees with moderate readiness (R2) who are unable but willing or
confident
• participating (S3) – for employees with moderate readiness (R3) who are able but unwilling or
insecure
 delegating (S4) – for high readiness (R4) employees; because they are both able and willing
or confident, the leader provides a general goal, delegates sufficient authority to do the task,
and expects followers to complete the task as they see fit.
Path–goal theory
Another contingency approach to leadership is the path–goal theory, in which the leader’s
responsibility is to increase subordinates’ motivation to achieve personal and organisational
goals. The leader increases followers’ motivation by either:
• path clarification – the leader helps subordinates learn the behaviours that lead to task
accomplishment and rewards; or

• increasing rewards – the leader talks with employees to learn which rewards are important to
them.

This model consists of three sets of contingencies:

• Leader behaviour is classified as follows:

− Supportive leadership. Involves leader behaviour that shows concern for employees’ wellbeing
and personal needs

− Directive leadership. Leader tells employees exactly what they are supposed to do

− Participative leadership. Leader consults with his or her employees about decisions

− Achievement-oriented leadership. Leader sets clear and challenging goals for employees.

• Situational contingencies. The two important situational contingencies are:

1 personal characteristics of group members, which include such factors as ability, skill, needs
and
motivations.
2 work environment, which includes such contingencies as the degree of task structure,
the nature of the formal authority system, and the characteristics of the work group itself.
• Use of rewards to meet subordinate needs. The leader’s responsibility is to clarify the path to
rewards for employees or to increase the amount of rewards to enhance satisfaction and job
performance.
Substitutes for leadership The contingency leadership approaches considered so far have
focused on the:
• leader’s style
• employees’ nature
• situation’s characteristics.

The substitutes contingency approach outlines the organisational settings in which a leadership
style is unimportant or unnecessary, and suggests that situational variables can be so powerful
that they substitute for or neutralise the need for leadership. A substitute is a situational variable
that makes a leadership style redundant or unnecessary – for example, highly professional
subordinates who know how to do their tasks do not need a leader to tell them what to do. A
neutraliser is a situational variable that prevents a leader from displaying certain behaviours –
for example a leader who has absolutely no position power or who is physically removed from
employees has reduced ability to give directions to employees.

Situational variables include characteristics of the:

• group, such as professionalism, training or experience, and low value of rewards

• task, such as highly structured, automatic feedback and intrinsic satisfaction

• organisation, such as group cohesiveness, formalisation, inflexibility, low positional power and
physical separation.

Leaders should adopt a style complementary to the organisational situation to ensure that both
task needs and people needs of the work group are met.
Leading change
Leaders in many organisations have had to reconceptualise almost every aspect of how they do
business to meet the needs of increasingly demanding customers, keep employees motivated and
satisfied, and remain competitive in a rapidly changing global environment. Research finds that
some leadership approaches are more effective than others for bringing about change in
organisations. Two types of leadership with a substantial impact are charismatic and
transformational. These types of leadership are best understood in comparison to transactional
leadership.
Transactional leaders
The traditional management function of leading applies to a leader who clarifies employees’ role
and task requirements, initiates structure, provides rewards and displays consideration for
employees. The transactional leader’s ability to satisfy employees may improve productivity.
Transactional leaders:
• excel at management functions
• are hardworking, tolerant and fair minded
• take pride in keeping things running smoothly and efficiently
• often stress the impersonal aspects of performance, such as plans, schedules and budgets
• have a sense of commitment to the organisation and conform to organisational norms and
values.

Charismatic leaders
The charismatic leader has the ability to inspire and motivate employees to transcend their
expected performance, to do more than they would normally do, despite obstacles and personal
sacrifice. The impact of charismatic leaders is generally from:
1 stating a lofty vision of an imagined future that employees identify with
2 shaping a corporate value system for which everyone stands
3 trusting employees and earning their complete trust in return. Charismatic leaders tend to be
less predictable than transactional leaders. They create an atmosphere of change, and they may
be obsessed by visionary ideas that excite, stimulate and drive other people to work hard.
Charismatic leaders have an emotional impact on employees.
Transformational leaders
Transformational leaders are similar to charismatic leaders, but are distinguished by their special
ability to bring about innovation and change in both followers and the organisation. They have
the ability to lead changes in the organisation’s mission, structure and culture, as well as to
promote innovation in products and technologies. Transformational leaders focus on intangible
qualities, such as vision, shared values and ideas to build relationships, give larger meaning to
separate activities, and provide common ground to enlist their followers in the changes.
Transformational leadership skills can be learned and are not ingrained personality
characteristics However, some personality traits may make it easier for a leader to display
transformational leadership behaviours.

Interpersonal influence tactics

Leaders often use a combination of influence strategies, and people who are perceived as having
greater power and influence typically are those who use a wider variety of tactics. These tactics
fall into basic categories that rely on understanding the principles that cause people to change
their behaviour and attitudes. The following is seven principles for asserting influence:

1 Use rational persuasion. The most frequently used influence strategy is to use facts, data, and
logical argument to persuade others that a proposed idea, request, or decision is appropriate.
Rational persuasion is most successful when a leader has technical knowledge and expertise
related to the issue at hand (expert power), although referent power is also used.

2 Make people like you. When a leader shows consideration and respect, treats people fairly,
and demonstrates trust in others, people are more likely to want to help and support the leader by
doing what he or she asks.

3 Rely on the rule of reciprocity. Leaders can influence others through the exchange of
benefits and favours. This unwritten ‘rule of reciprocity’ means that leaders who do favours for
others can expect that others will do favours for them in return

4 Develop allies. Effective leaders develop networks of allies; people who can help the leader
accomplish his or her goals. Leaders talk with followers and others outside of formal meetings to
understand their needs and concerns as well as to explain problems and describe the leader’s
point of view.

5 Ask for what you want. Leaders have to be explicit about what they want, or they aren’t likely
to get it. An explicit proposal is sometimes accepted simply because others have no better
alternative or their options are less well-defined.

6 Make use of higher authority. Sometimes to get things done leaders have to use their formal
authority, as well as gain the support of people at higher levels to back them up. Managers who
become known for their expertise, who are honest and straightforward with others, and who
inspire trust can exert greater influence than those who simply issue orders.

7 Reward the behaviours you want. Leaders can also use organisational rewards and
punishments to influence others’ behaviour. Leaders should not rely solely on reward and
punishment as a means for influencing others, but combined with other tactics that involve the
use of personal power, rewards can be highly effective. Research indicates that people rate
leaders as ‘more effective’ when they are perceived to use a variety of influence tactics. But not
all managers use influence in the same way.

Contemporary leaders
Local leaders in Australia, New Zealand and Asia are not dissimilar from those in Europe and
North America. Being a successful business leader today requires the right combination of both
personal abilities and strategic leadership capabilities. The characteristics that make for a great
leader are being able to:
• set vision and strategy

• communicate and inspire

• have complete integrity

• be tough and performance-oriented

• be and act humble: the leader as servant

• care personally and be empathetic

• be knowledge focused

• use energy and passion

• be smart and able to deal with complexity

• be agile and flexible

• always be customer-oriented

• deal effectively with adversity

• act on mistakes.
Australasian businesswomen as leaders
Asia–Pacific’s organisations, like those in the rest of the world, have women under-represented
in leadership roles. However, there are increasing examples of companies that are making the
best men and women available for senior leadership roles. Women leaders have been strong role
models in recent times.
Leaders in small Australasian businesses
Leadership can be even more challenging in smaller businesses than in larger ones. Small
business leaders often have to do a range of things themselves. In small businesses the resources
are not available to get substantial support from a range of experts. Successful business
organisations are being started by younger entrepreneurial leaders, even in mature, crowded
markets such as electricity marketing and magazine publishing. Many of the new business
leaders start their careers in big business, before they have a business idea that allows them to get
started, then lead and grow their enterprises.
Post-heroic leadership for turbulent times
The concept of leadership continues to grow and change. A recent significant influence on
leadership styles is the turbulence and uncertainty of the environment in which most
organisations are operating. The post-heroic approach to leadership focuses on the subtle,
unseen and often unrewarded acts that good leaders perform every day, rather than on the grand
accomplishments of celebrated business leaders. The post-heroic leader’s major characteristic is
humility, being unpretentious and modest rather than arrogant and prideful. Approaches that are
in sync with post-heroic leadership for turbulent times are:

Servant leadership

Servant leadership is leadership upside-down – leaders transcend self-interest to serve others and
the organisation. Servant leaders operate on two levels – for the fulfilment of their employees’
goals and needs, and for the realisation of the larger purpose or mission of their organisation.
They encourage participation, share power, enhance others’ self-worth, and unleash people’s
creativity, full commitment, and natural impulse to learn and contribute. Servant leaders often
work in the nonprofit world because it offers a natural way to apply their leadership drive and
skills to serve others. Level 5 leadership refers to the highest level in a hierarchy of manager
capabilities. A key characteristic of Level 5 leaders is an almost complete lack of ego. They give
credit for successes to other people, and accept full responsibility for mistakes, poor results and
failures. They want everyone in the organisation to develop to their fullest potential.

Interactive leadership

Interactive leadership is characterised by a focus on minimising personal ambition and

developing others. Interactive leadership means that the leader favours a consensual and
collaborative process, and influence derives from relation ships rather than position power and
formal authority. It has been found to be common among female leaders. Recent research
indicates that women’s style of leadership is particularly suited to today’s organisations.

E-leadership

In a virtual environment, leaders face a constant tension in trying to balance structure and
accountability with flexibility. Effective e-leaders set clear goals and timelines and are very
explicit about how people will communicate and coordinate their work; however, the details of
day-to-day activities are left up to employees. E-leaders need to take extra care to keep people
informed and involved with one another and with the organisation. Crucial leadership qualities in
a virtual environment are: building trust, maintaining open lines of communication, caring about
people and being open to subtle cues from others.

Moral leadership

Moral leadership is about distinguishing right from wrong and choosing to do right. Leaders
carry a tremendous responsibility to use their power wisely and ethically. Moral leaders
remember that business is about values, not just economic performance. Moral leadership
requires courage, the ability to step forward through fear and act on one’s own values and
conscience. Standing up for what is right is the primary way in which leaders create an
environment of honesty, trust and integrity in the organisation.
Discussion questions
1 Rob Martin became manager of a forklift assembly plant and believed in participative
management, even when one supervisor used Rob’s delegation to replace two competent line
managers with his own friends. What would you say to Rob about his leadership style in this
situation?

While Rob has a personal preference for participative management, it will not be the most
appropriate approach to use in all situations. Rob’s leadership style can be analysed using Hersey
and Blanchard’s situational leadership model. This approach focuses considerable attention on
the characteristics of employees in determining appropriate leadership behaviour. According to
Hersey and Blanchard, a delegating style of leadership is one where the manager turns over
responsibility for decisions and implementation, such as Rob has done with his supervisors.
Delegating is best when staff are high in readiness – that is, they are both able and willing or
confident enough to take on responsibility and need little support or direction. While most of
Rob’s supervisors may be high in readiness, a supervisor who replaces two competent line
managers with his own friends is obviously not in this category. This supervisor could perhaps
be categorised as unable and willing or confident – prepared to take on the responsibilities of
being a supervisor and make decisions, but with insufficient skills and experience at this stage to
do so effectively. Hersey and Blanchard argue that the most appropriate leadership style in this
situation would be selling – giving specific instructions, explaining decisions, providing
opportunity for clarification, and supporting the individual willingness and enthusiasm. As the
supervisor increases in ability, Rob can gradually adjust his leadership style to give the
supervisor more autonomy.

2 Suggest some personal traits that you believe would be useful to a leader. Are these traits more
valuable in some situations than in others?

This question is designed to stimulate student discussion, and there is no single correct answer.
The point of the question is to help students relate leader traits to specific situations. For
example, students may mention effective communication or good relationship skills as being
valuable traits for a leader. Upon reflection, they may realise that these traits may not be as
useful with difficult, immature employees who do not wish to cooperate.
3 What is the difference between trait theories and behavioural theories of leadership?

Traits are the distinguishing personal characteristics of a leader, such as values, personality
characteristics or intelligence. Traits are considered a rather permanent feature of the individual.
Trait theories of leadership are essentially proposing a relationship between certain personal
traits and leadership success. To date, however, research has established only a weak link.
Behavioural theories are concerned with specific behaviours displayed by a leader, such as
consideration or initiating structure. Behaviours are not considered a permanent part of the
leader, so leaders can adopt any leader behaviour with appropriate training. Behavioural theories
generally assume that leaders are flexible with respect to their leadership style.

4 Suggest the sources of power that would be available to the leader of a student union. To be
effective, should student leaders keep power to themselves or delegate power to other students?
Legitimate power would be one source because the position as leader of the student union would
have certain authority granted to it. The student leader would also be able to use reward power –
while she/he may not have access to formal rewards, praise, attention and recognition are also
effective rewards to influence others’ behaviour. Expert power and referent power would depend
on the leader’s knowledge of the student government process and his/her ability to command the
respect and admiration of others. Referent power could prove particularly potent for the student
leader as a way of getting other students to share her/his point of view. It would not be wise for
the student leader to make use of coercive power, such as criticism – use of coercive power on
followers tends to result in resistance so this could cause others to deliberately act against what
the student leader is trying to accomplish..
5 Would you prefer working for a leader who has a consideration style or an initiating-structure
leadership style? Discuss the reasons for your answer.
The point of this question is that one style is not preferable to the other. Consideration is the
extent to which the leader respects subordinates’ ideas and feelings, provides open
communication, develops teamwork, and establishes mutual trust. Initiating structure is the
extent to which the leader is task oriented, directs subordinates’ work activities, and plans and
emphasises deadlines. Both aspects of leadership are necessary. The point of the various theories
in this chapter is that both consideration and initiating structure are valuable. For example,
Fiedler proposes that task-oriented leadership (initiating structure) was more effective in highly
favourable or unfavourable situations, and relationship-oriented leadership (consideration) was
most effective in situations of moderate favourability. The substitutes for the leadership approach
suggest that consideration and initiating structure must both be present, but that the situation may
substitute for the leader characteristic. Thus, when the situation provides a characteristic, the
leader need not, and vice versa. Students can argue that both consideration and initiating
structure should be present, or they can argue for one characteristic or the other and explain why
each is appropriate in a specific situation.
6 Consider Fiedler’s theory as illustrated in Exhibit 12.5 (How often do very favourable,
intermediate or very unfavourable situations occur in real life? Discuss.
Fiedler’s theory uses three situational characteristics (leader–member relations, task structure,
and leader position power) to generate eight different leadership situations. Highly favourable
and highly unfavourable situations are probably rarer than situations of intermediate
favourableness. Highly favourable are those situations where the leader has a lot of support from
group members and where there are clear and explicit task goals, methods and performance
standards. Highly unfavourable are those situations where: the leader is getting little or no
support from group members, who tend not to carry out the leader’s instructions; and where there
is little or no clarity of task goals, methods and performance standards. For both highly
favourable and highly unfavourable situations, the amount of position power the leader has can
be either strong or weak. In a fast changing world it can be argued that these two extreme
situations would last only a short time. Thus the majority of situations (i.e. intermediate or
moderate favourability) probably do best with relationship-oriented leadership. Most of the
world would tend to revolve around the mean (average) of leader–member relations, task
structure and position power.

7 What is transformational leadership? Differentiate between transformational leadership and

transactional leadership. Give an example of each.

Transformational leadership goes beyond the traditional ideas for influencing people.
Transformational leaders can motivate people beyond what is normally expected. They motivate
people to transcend their own interests for the sake of the organisation. They have a special
ability to bring about innovation and change because they have visionary ideas that excite and
stimulate other people to work hard and attain the vision. Transactional leaders fill a more
traditional leadership role. They do not inspire or motivate people to transcend their own
interests. More methodical than inspirational, transactional leaders verify the task structure of
subordinates, initiate structure and motivate people by providing monetary rewards. They are
fair-minded and help subordinates improve productivity, but they do not inspire people with
exciting visions for the future. The best example of a transactional leader is a typical supervisor.
The supervisor works hard to manage the affairs of his or her department and to clarify
expectations for workers. On the other hand, transformational leaders like Jack Welch, Lee
Iacocca or Richard Branson do not focus on details, rules or specific directions but on intangible
qualities such as vision, shared values and ideas.

8 Some experts believe that leadership is more important than ever in a learning organisation.
Do you agree? Explain.

Leadership is particularly important in organisations trying to make the shift to a learning

organisation. It is argued that leadership is in fact the only means by which a company can
change into a learning organisation. Leaders in learning organisations help people see the whole
system, facilitate teamwork, initiate change and expand the capacity of people to shape the
future. Charismatic and, particularly, transformational leadership are crucial to this process. The
leader needs to create and communicate a shared vision to ensure that people are working in the
same direction, towards the same goal. The leader needs to create a horizontal organisational
structure that works towards the absence of boundaries, with people cooperating rather than
competing. The leader needs to bring their followers’ higher motives to the work and connect
them to the organisational mission and goals.

9 What is meant by ‘servant leadership’? Have you ever known a servant leader? Discuss.
Servant leaders are devoted to building the organisation rather than to acquiring things for
themselves. They operate on two levels: for the fulfilment of their employees’ goals and needs;
and for the realisation of the larger purpose or mission of their organisation. Servant leaders give
things away – power, ideas, information, recognition and credit for accomplishments. They truly
value other people, encourage participation, share power, enhance others’ self-worth, and
unleash peoples’ creativity, full commitment and natural impulse to learn.
10 Do you think leadership style is fixed and unchangeable for a leader or flexible and
adaptable? Discuss.

This question is designed to stimulate student discussion, and there is no single correct answer.
The issue of whether leadership style is fixed or flexible has been a fundamental debate in the
leadership literature. Trait theories assume that leadership style is fixed: people with the correct
traits will be good leaders. Fiedler’s work on least preferred co-worker also takes a trait approach
by assuming that the situation rather than the leader must be changed to suit the leader’s style.
Moreover, evidence in favour of the fixed leader style comes from work on inspirational leaders.
Inspirational leaders tend to have an inborn ability to motivate others that is difficult to attain by
training. In much the same way, transformational leaders and entrepreneurial leaders seem to
emerge in certain situations. These people seem to succeed because of personal characteristics
more than learned behaviours. Most other theories, however, assume that leaders are flexible
enough to adopt more than one type of leader behaviour. The two-dimensional theories, the
path–goal theory, the Vroom–Jago model, and substitutes for leadership all assume that leaders
can tailor their leadership behaviour to fit the organisational situation. In general, the weight of
evidence suggests that leader behaviour can be flexible. However, it may be that transactional
leadership behaviours can be flexible but that inspirational leader behaviour is less so.

11 Consider the leadership position of a senior partner in a law firm. What task, employee and
organisational factors might serve as substitutes for leadership in this situation?

With respect to the list of variables in Exhibit 12.10, the following variables can potentially act
as substitutes for leadership: – Organisational variables – group cohesiveness, formalisation –
Task characteristics – highly structured task, automatic feedback, intrinsic satisfaction –
Employee characteristics – professionalism, training or experience In a law firm there is likely to
be a reasonable degree of formalisation with the rules and procedures applicable to legal matters,
which is a substitute for task-oriented leadership. The same could apply to the structure of tasks.
Lawyers are likely to receive automatic feedback on how they are doing, such as winning or
losing a court case, which is a substitute for task-oriented leadership. Moreover, work in the law
firm is likely to be intrinsically satisfying, and this is a substitute for people-oriented leadership.
The group characteristics of professionalism and experience would also substitute for task-
oriented leadership and to some extent people-oriented leadership. The net effect is that the
senior partner in a law firm needs to provide only minimal leadership to employees because of
the nature of the task and the high professionalism of the other lawyers. Free of an active role in
directing subordinates or in meeting their task or people needs, the senior partner could spend a
substantial amount of time concentrating on his or her own law clients and on expanding the
practice.