OL Final Material (2) - 1

ORGANIZATIONAL LEADERSHIP
Semester – IV
B.com
Edition: 2024
#44/4, District Fund Road, Behind Big Bazaar, Jayanagar 9th Block, Bengaluru,
Karnataka -560069
INDEX
SL NO. Content Page No.

Module –1: Leadership Traits & Ethics
1.1 • Leadership- Concepts of Leadership, Comparing Management 1
and Leadership, Followership – Roles, styles
1.2 • Leadership- Traits & Personality – The Big Five Model of 8
Personality, Personality Profiles, Derailed Leadership Traits
1.3 • Leadership Attitudes –Theory X & Theory Y, The Pygmalion 12
Effect, Self-Concept
1.4 • Ethical Leadership -Impact of Personality Traits and Attitudes, 18
Moral Development and the situation on Ethical Behaviour.
How people Justify Unethical Behaviour
1.5 • Micro & Macro Environmental Factors impacting organisation 22
and leadership
1.6 • Leadership Communication 26
Module- 2 LEADERSHIP THEORIES

2.1 Introduction 30
2.2 Behavioral Approaches 31
2.3 IOWA studies 31
2.4 Michigan model 32
2.5 Ohio model 34
2.6 Leadership Grid 37
2.7 Contingency Approach 40
2.8 Fiedler Contingency Model 41
2.9 Situational Theories 46
2.10 Hersey & Blanchard 47
2.11 Path Goal Theory 50
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SYLLABUS
Course: B.Com Semester: VI

No. of Hours: 60 Hours Credits: 04
Subject: ORGANIZATIONAL LEADERSHIP
Course Objectives:
• To Clearly articulate the distinctions between leadership and management, understanding their
unique roles, functions, and implications within an organizational context.
• To Develop a holistic understanding of leadership by integrating multidimensional
perspectives, considering the interplay between various environmental factors and leadership
strategies.
• To Evaluate ethical considerations within leadership roles, recognizing the importance of
ethical decision-making in complex organizational environments.
To Understand the theories that drive Leadership practices and evaluate change management
Module –1: Leadership Traits & Ethics 14 Hours
2 Leadership- Concepts of Leadership, Comparing Management and Leadership, Followership –

Roles, styles
3 Leadership- Traits & Personality – The Big Five Model of Personality, Personality Profiles, Derailed
Leadership Traits
4 Leadership Attitudes –Theory X & Theory Y, The Pygmalion Effect, Self-Concept
5 Ethical Leadership -Impact of Personality Traits and Attitudes, Moral Development and the
situation on Ethical Behaviour. How people Justify Unethical Behaviour
6 Micro & Macro Environmental Factors impacting organisation and leadership
7 Leadership Communication
Module – 2: Leadership Theories 14 Hours
• Behavioral Approaches - IOWA studies, Michigan model, Ohio model, Leadership Grid
• Contingency Approach-Fiedler Contingency Model
• Hersey & Blanchard Situational Theory, Path Goal Theory
Module – 3: Charismatic & Transformational Leadership 12 Hours

• Charismatic Leadership – Charisma, Charismatic Leadership
• Transformational Leadership – Charismatic Versus Transformational Leader
Transformational Leader Behaviors and Attributes
Transformational Versus Transactional Leadership
• Stewardship & Servant Leadership – Nature, Framework
Module – 4: Team Leadership 10 Hours

• Use of Teams in Organizations – Groups Versus Teams – Advantages & Disadvantages of
Teamwork
• Types of Teams- Decision making in Teams
• Leadership skills for Effective Team Meetings
• Self-Managed Teams
Module – 5: Strategic Leadership and Crisis Management 10 Hours

• Strategic Leadership: Vision, Mission, and Values,
• Strategic Formulation, Implementation & Evaluation
• Crisis Leadership- Pre crisis Planning, 5 Step process for Crisis Risk Assessment & Crisis
Management
Leading Change- Need for Change, Change Process & Role of Leader in Leading Change
Reference Books:
• HBR’s 10 Must Reads on Leadership – Harvard Business Review Press
• Emotional Intelligence 2.0 – Travis Bradberry, Jean Greaves, Patrick M. Lencioni
• Leading Change – John P. Kotter
• Organization Theory, Design and Change – Gareth R. Jones
• Geeks & Geezers – How Era, Values & Defining Moments Shape Leaders – Warren
G. Bennis
• Great by Choice – Uncertainty, Chaos, and Luck – Why some thrive despite them all – Jim
Collins and Morten T. Hansen
• Personal and Organizational transformations – David Rooke and Bill Torbert
• Authentic Leadership: Rediscovering the Secrets to Creating Lasting Value – Bill
George
• X-Teams: How to Build Teams that Lead, Innovate and Succeed – Deborah Ancona
and Henrik Bresman.
• "Leadership and Self-Deception: Getting Out of the Box" by The Arbinger Institute
• "The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail" by
Clayton M. Christensen
• "Blue Ocean Strategy: How to Create Uncontested Market Space and Make the
Competition Irrelevant" by W. Chan Kim and Renée Mauborgne
• "Good to Great: Why Some Companies Make the Leap...And Others Don't" by
Jim Collins
Course Outcomes:
• Demonstrate a clear understanding of the concepts of leadership and management (3)
• Discover global Leadership theories and practices (3)
• Identify emerging Organisational Leadership practices (4)
• Discover team dynamics and team diversity management (3)
• Examine the need of change management though strategic leadership (3)

Module - 1: Introduction to International Finance
Structure
Module –1: Leadership Traits & Ethics
1.1 • Leadership- Concepts of Leadership, Comparing Management 1

and Leadership, Followership – Roles, styles
1.2 • Leadership- Traits & Personality – The Big Five Model of 8
Personality, Personality Profiles, Derailed Leadership Traits
1.3 • Leadership Attitudes –Theory X & Theory Y, The Pygmalion 12
Effect, Self-Concept
1.4 • Ethical Leadership -Impact of Personality Traits and Attitudes, 18
Moral Development and the situation on Ethical Behaviour.
How people Justify Unethical Behaviour
1.5 • Micro & Macro Environmental Factors impacting organisation 22
and leadership
1.6 • Leadership Communication 26
1.1 LEADERSHIP CONCEPTS

Leadership is the process of influencing and guiding individuals, groups, or organizations toward
achieving common goals. It involves the ability to inspire, motivate, and coordinate the efforts of others
to work collaboratively and effectively. Leadership goes beyond formal authority and is often
characterized by a combination of interpersonal skills, vision, strategic thinking, and the capacity to make
decisions that drive positive outcomes.
Leadership can take various forms, ranging from charismatic and transformational leadership to
situational and servant leadership. The most effective leaders often tailor their approach to the specific
needs of the situation and the individuals they lead. Leadership is a dynamic and evolving process that
plays a crucial role in the success of teams, organizations, and communities.
Leaders perform various roles such as planning and implementing, evaluating, monitoring, controlling,
motivating, managing conflicts, organizing task groups, mobilizing human and financial resources, and
above all, setting an example to the group. We recognize that leadership is necessary for efficiency, but
because of our egalitarian tradition, we are uncomfortable with any suggestion of superiority. There are
a number of major theories about leadership. Each theory focuses on a different aspect of human
behaviour, and provides useful insights into what makes a good leader.
Leadership has been defined as “the process of influencing the activities of an individual or a group in
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efforts towards the achievement of goals in a given situation” . The source of influence may be formal,
or informal. Leaders can emerge from within a group as well as being formally appointed.
Defining Leadership
The topic of leadership has generated excitement and interest since ancient times. When people think
about leadership, images come to mind of powerful dynamic individuals who command victorious armies,
shape the events of nations, develop religions, or direct corporate empires. How did certain leaders build
such great armies, countries, religions, and companies? Why do certain leaders have dedicated followers
while others do not? How did Adolf Hitler rise to a position of great power? It wasn't until the twentieth
century that researchers attempted to scientifically answer such questions, using many different
definitions. Today, we understand better the answers to some of these research questions; but much of
the research generates more questions, and many questions surrounding the mystery of leadership remain
unanswered.
There are many definitions of leadership. Here are just a few:
The process of persuasion or example by which an individual (or a leadership team) induces a group to
pursue objectives held by the leader or shared by the leader and his or her followers. (John Gardner)
The reciprocal process of mobilizing, by persons with certain motives and values, various economic,
political and other resources, in a context of competition and conflict, in order to realize goals
independently or mutually held by both leaders and followers. (James McGregor Burns)
Leadership involves influencing task objectives and strategies, influencing commitment and compliance
in task behaviour to achieve these objectives, influencing group maintenance and identification and
influencing the culture of an organization. (Gary Yuke)
Leadership is the ability to get men to do what they don't like to do and like it. (Harry S Truman)
Why Leadership?
During the 1970s and for much of the early 1980s and '90s, developing people for top jobs was seen to
be a process of management or executive development, and the process of face-to-face interaction with
groups of workers at shop-floor level was referred to as supervision or foremanship.
Today, it is quite different. Leadership is on the agenda in a big way. Books on the subject are streaming
on to the market, top industrialists are hailed as great leaders alongside the great military and political
leaders of the age, and leadership 'gurus' have emerged from academic obscurity.
Management is perfectly adequate when things are routine and predictable; but when the organization
hits turbulence and uncertainty, leadership is called for. This idea has been confirmed in our minds as we
have observed dramatic transformations in British industry in recent times which appear to be more due
to inspirational leadership than to good management as traditionally conceived. British Airways under

Colin Marshall, and ICI under John Harvey-Jones are often-quoted examples.
Key elements of leadership include:
Leadership, a multifaceted concept that transcends mere authority, is a delicate orchestration of various
elements that harmonize to propel individuals, teams, and organizations towards success. In the intricate
dance of leadership, five key elements emerge as the pillars upon which effective leadership stands tall.
1. Influence
At the heart of leadership lies the profound ability to influence. True leaders don't just command; they
inspire, motivate, and guide. Influence is not wielded through coercion or force but is earned through
credibility, empathy, and a genuine connection with those being led. The art of influence transforms a
leader into a beacon, attracting others to a shared vision and fostering a collective commitment to common
goals.
2. Followers
Leadership is not a solitary journey; it is a symbiotic relationship between the leader and their followers.
A leader's efficacy is gauged not only by their own actions but by the engagement and dedication they
inspire in their team. Followership is not merely compliance; it is a dynamic partnership built on trust,
mutual respect, and a shared understanding of the mission at hand. A leader's success is intrinsically
linked to the collective achievements of their followers.
3. Organization Objectives
A compass in the leadership toolkit is a keen alignment with organizational objectives. Effective leaders
comprehend the broader mission and strategically steer their teams toward fulfilling organizational goals.
They articulate a clear vision, set objectives, and navigate the team through challenges, ensuring that
every action resonates with the overarching purpose of the organization. Leadership becomes a conduit
for translating vision into reality.
4. Change
In a world marked by constant evolution, leadership is inseparable from the ability to navigate change.
True leaders embrace change as an opportunity, not a threat. They are adept at leading their teams through
transitions, inspiring adaptability, and fostering a culture that thrives on innovation. The resilience to
change becomes a hallmark of effective leadership, ensuring that the team evolves and prospers in an
ever-shifting landscape.
5. People
At its core, leadership is fundamentally about people. Leaders recognize the unique strengths, talents, and
aspirations of each team member. They invest in building relationships, fostering a positive and inclusive
culture, and promoting the well-being of their people. Genuine leadership goes beyond tasks and charts a

course that values the growth and development of individuals, ultimately enhancing the collective strength
of the team.
In the symphony of leadership, these key elements blend seamlessly to create a melody of success. The
true essence of leadership lies not in the mere exercise of authority but in the profound impact a leader
has on the lives of those they lead. Aspiring leaders would do well to understand and embody these
essential elements, for it is in their mastery that
Leadership vs. Management:
Criteria Leadership Management
Innovation and Change: Leaders

focus on inspiring and guiding Efficiency and Control: Managers
people towards a shared vision, focus on planning, organizing, and
fostering innovation, and navigating controlling resources to achieve
Focus change. specific goals efficiently.
Sets the Direction: Leaders Implements the Vision: Managers

establish a compelling vision for the execute the vision set by leaders,
future, providing a sense of purpose ensuring that plans are implemented
Vision and direction. effectively and efficiently.
Directs and Coordinates: Managers

Inspires and Influences: Leaders organize, direct, and coordinate tasks,
build relationships, inspire trust, and ensuring that individuals perform
People influence individuals to contribute their duties according to plans and
Orientation voluntarily. policies.
Embraces Change and Risk: Risk-Averse: Managers seek to

Leaders are comfortable with minimize risks, adhering to
ambiguity, take calculated risks, and established procedures and processes
Risk-Taking encourage innovation. to maintain stability and control.
Operational and Short-Term:

Strategic and Long-Term: Managers make decisions based on
Leaders make strategic decisions established processes, focusing on the
Decision-Making that align with the overall vision, day-to-day operations and short-term
Approach even if they involve uncertainty. goals.

Criteria Leadership Management
Passionate and Inspirational:

Leaders often display passion, Objective and Rational: Managers
enthusiasm, and charisma, fostering maintain a more objective and
Emotional an emotional connection with their rational demeanor, emphasizing
Involvement followers. efficiency and productivity.
Adapts to Change: Leaders are

adaptable and thrive in dynamic Maintains Stability: Managers seek
environments, promoting a culture to maintain stability and control,
of flexibility and continuous ensuring that established procedures
Adaptability improvement. are followed for consistency.
Pioneers and Innovators: Leaders Organizers and Implementers:

are seen as visionaries and pioneers, Managers are seen as organizers and
challenging the status quo and implementers, ensuring that plans are
Role Perception inspiring change. executed and goals are achieved.
Instructive and Clear: Managers

Inspires and Motivates: Leaders communicate task-related
use inspirational and motivational information clearly, providing
Communication communication to align individuals instructions and guidelines for
Style with the vision. execution.
Develops People: Leaders focus on Develops Systems: Managers

developing individuals, concentrate on developing and
Development empowering them to reach their full optimizing processes and systems for
Focus potential. increased efficiency.
In summary, while leadership and management are complementary, they involve distinct focuses,
approaches, and skill sets. Leadership is about inspiring and influencing people toward a shared vision,
fostering innovation, and navigating change. On the other hand, management is about planning,
organizing, and controlling resources to efficiently achieve specific goals. Both roles are essential for
organizational success, each contributing its unique strengths to the overall effectiveness of an enterprise.
FOLLOWERS
Followership is a critical aspect of leadership that focuses on the individuals or team members who follow
and support a leader. While much emphasis is traditionally placed on leadership qualities, understanding
followership is essential for a comprehensive view of group dynamics and organizational success.
THE ROLE OF FOLLOWERS
Followership is important in the discussion of leadership for several reasons. First, leadership and
followership are fundamental roles that individuals shift into and out of under various conditions
Everyone-leaders included is a follower at one time or another. Indeed, most individuals, even those in a
position of authority, have some kind of boss or supervisor. Individuals are more often followers than
leaders.
In a position of leadership, an individual is influenced by the actions and the attitudes of followers. In
fact, the contingency theories are based on how leaders adjust their behavior to fit situations, especially
their followers. Thus, the nature of leader-follower relationships involves reciprocity, the mutual
exchange of influence.) The followers' influence upon a leader can enhance the leader or underscore the
leader's shortcomings.
Third, many of the qualities that are desirable in a leader are the same qualities possessed by an effective
follower. In addition to demonstrating initiative, independence, commitment to common goals, and
courage, a follower can provide enthusiastic support of a leader, but not to the extent that the follower
fails to challenge the leader who threatens the values or objectives of the organization. This is not very
different from the role of leader. Both leader and follower roles are proactive; together they can achieve
a shared vision. The military often provides insight into the interaction of leadership and followership. A
performance study of U.S. Navy personnel found that the outstanding ships were those staffed by
followers who supported their leaders but also took initiative and did not avoid raising issues or concerns
with their superiors. D. Michael Abrashoff, former commander of the USS Benfold, recognized as one of
the best ships in the Navy, always encouraged his followers to speak up. To Abrashoff, the highest boss
should be the sailor who does the work-the follower-not the person with the most stripes on his or her
uniform. In any organization, leaders can help develop effective followers, just as effective followers
develop better leaders. The performance of followers, leaders, and the organization are variables that
depend on one another.
FOLLLOWER STYLES
The concept of follower styles refers to the various ways individuals approach and engage with leadership
within a group or organization. Different followers may exhibit distinct styles based on their attitudes,
behaviors, and interactions with leaders. While there are several models to categorize follower styles,
here are four common types:
1. Alienated Followers:

• Characteristics:
• Disengagement: Alienated followers exhibit a sense of disconnection and disengagement
from the organization and its leadership.
• Cynicism: They may express cynicism, skepticism, or negativity towards the
organization's goals or leadership decisions.
• Low Commitment: Alienated followers may have low levels of commitment and may not
actively contribute to the group's objectives.
• Leadership Implications:
• Leaders need to address concerns and actively involve alienated followers to understand
and mitigate their dissatisfaction.
• Establishing open communication channels and addressing issues can help in re-engaging
alienated followers.
2. Conformist Followers:
• Compliance: Conformist followers are characterized by their tendency to conform to
established rules, norms, and authority without questioning.
• Reluctant Autonomy: They may prefer guidance and direction from leaders and may feel
uncomfortable with autonomy.
• Avoidance of Conflict: Conformist followers may avoid conflict and prioritize
maintaining harmony within the group.
• Leaders should provide clear expectations and guidelines for conformist followers.
• Encouraging open communication and creating a supportive environment can help
conformist followers feel secure in expressing their perspectives.
3. Pragmatic Followers:
• Adaptive: Pragmatic followers are adaptive and flexible in their approach, adjusting to
different leadership styles and situations.
• Problem-Solving: They may actively engage in creative problem-solving and contribute
practical solutions to challenges.
• Task-Oriented: Pragmatic followers focus on the tasks at hand and align their efforts with
the goals of the organization.

• Leaders can leverage the adaptability of pragmatic followers by providing them with
challenging tasks that require creative problem-solving.
• Recognizing and appreciating their contributions can foster a positive working
relationship.
4. Exemplary Followers:
• Initiative: Exemplary followers take initiative and go beyond their assigned tasks,
demonstrating a high level of commitment.
• Leadership Support: They actively support and contribute to the leader's vision and
organizational goals.
• Independent Thinkers: Exemplary followers may engage in independent thinking,
offering insights and feedback to improve processes.
• Leaders should provide opportunities for exemplary followers to take on leadership roles
or additional responsibilities.
• Acknowledging their contributions and creating a collaborative relationship can enhance
the motivation and commitment of exemplary followers.
Understanding follower styles is essential for leaders to tailor their approaches, communication, and
engagement strategies. Effective leaders recognize the diversity in follower styles within a group and
employ adaptive leadership practices to build positive relationships and maximize the potential of each
follower type.
1.2 LEADERSHIP- TRAITS & PERSONALITY

Leadership Trait Theory is a school of thought that suggests certain inherent qualities or traits differentiate
effective leaders from non-leaders. The theory proposes that individuals possess specific characteristics
that predispose them to leadership roles. Key points of Leadership Trait Theory include:
1. Innate Traits: Leadership is believed to be influenced by inherent qualities such as intelligence,
confidence, decisiveness, integrity, and sociability.
2. Identifiable Traits: Researchers aimed to identify a set of traits common among successful
leaders to create a profile of the "ideal" leader.
3. Limitations: The theory has faced criticism for oversimplifying leadership by focusing solely on
traits. Critics argue that situational factors and skills are equally crucial for effective leadership.
4. Trait Lists: Over time, various trait lists have been proposed, but there is no universally agreed-

upon set of traits that definitively predicts leadership success.
5. Foundational Research: Leadership Trait Theory gained prominence in the mid-20th century
through studies that sought to identify the personality characteristics of successful leaders.
While Leadership Trait Theory laid the groundwork for leadership research, contemporary perspectives
acknowledge the importance of situational factors, skills, and behaviors in conjunction with traits for a
comprehensive understanding of effective leadership.
THE BIG FIVE MODEL OF PERSONALITY
Trait theories of personality have long attempted to pin down exactly how many traits exist. Earlier
theories have suggested various numbers. For instance, Gordon Allport's list contained 4,000 personality
traits, Raymond Cattell had 16 personality factors, and Hans Eysenck offered a three-factor theory.
Many researchers felt that Cattell's theory was too complicated and Eysenck's was too limited in scope.
As a result, the Big 5 personality traits emerged and are used to describe the broad traits that serve as
building blocks of personality. Several researchers support the belief that there are five core personality
traits
The Big Five Model, also known as the Five-Factor Model (FFM) of personality, is a widely accepted
framework in psychology that categorizes human personality traits into five broad dimensions. These
dimensions are considered to encompass the majority of personality traits and provide a comprehensive
understanding of an individual's personality. The Big Five Model includes the following five factors:
1. Openness to Experience:
• Description: This dimension reflects the extent to which an individual is open-minded,
imaginative, and open to new ideas and experiences.
• Characteristics: High scorers tend to be creative, curious, and open to change, while low scorers
may prefer routine, tradition, and familiarity.
2. Conscientiousness:
• Description: Conscientiousness measures the degree to which a person is organized, responsible,
and goal-oriented.
• Characteristics: Individuals high in conscientiousness are typically reliable, diligent, and focused
on achieving their objectives. Those low in conscientiousness may be more spontaneous and less
structured in their approach.
3. Extraversion:
• Description: Extraversion refers to the level of sociability, assertiveness, and enthusiasm a person
exhibits.
• Characteristics: Extraverts are outgoing, energetic, and enjoy social interactions. Introverts, on
the other hand, are more reserved, reflective, and may prefer solitary activities.
4. Agreeableness:
• Description: Agreeableness measures the degree to which an individual is cooperative,
empathetic, and considerate of others.
• Characteristics: Highly agreeable individuals are often compassionate, understanding, and
cooperative. Those low in agreeableness may be more competitive or skeptical.
5. Neuroticism (Emotional Stability):
• Description: Neuroticism gauges emotional stability and the tendency to experience negative
emotions such as anxiety, depression, and stress.
• Characteristics: Individuals with high neuroticism may be more prone to mood swings, anxiety,
and stress. Low scorers tend to be more emotionally stable and resilient in the face of challenges.
How the Big Five Model Works:
• Scoring: Each dimension is measured on a scale, with individuals falling somewhere along the
continuum for each trait.
• Combinations: People's unique personalities are often described in terms of their scores on each
of the five dimensions. For example, someone might be high in openness, moderate in
conscientiousness, high in extraversion, high in agreeableness, and low in neuroticism.
• Stability: While individual scores may change over time, the Big Five traits are generally
considered stable across the lifespan.
Significance and Applications:
• Research and Psychology: The Big Five Model is widely used in psychological research to study
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personality traits and their impact on behavior, mental health, and relationships.
• Personality Assessment: It serves as a foundation for various personality assessments, such as
the NEO-PI-R and the Big Five Inventory (BFI).
• Employment and Organizations: The model is applied in organizational settings for employee
selection, team building, and leadership development.
• Understanding Behavior: It provides a useful framework for understanding and predicting how
individuals are likely to behave in different situations.
The Big Five Model is considered one of the most comprehensive and robust models for understanding
personality due to its broad coverage of human traits. It has become a cornerstone in personality
psychology, influencing research across diverse fields.
PERSONALITY PROFILES
Personality profiles identify individual stronger and weaker traits, Personality profiles are used to
categorize people as a means of predicting job success. Many organizations (such as the National Football
League teams, including the Giants, 49ers, and Dolphins) give personality tests to ensure a proper match
between the worker and the job. For example, a study reveals that personality profiles of engineers and
accountants tended to be lower in the trait of surgency but higher in the trait of dependability. Marketing
and salespeople were lower in dependability but higher in surgency, Forty percent of organizations give
personality tests to determine if a person has the personality profile that can predict job success.
The Big Five model has universal application across cultures. Studies have shown that people from Asian,
Western European, Middle Eastern, Eastern European, and North and South American cultures seem to
use the same five personality dimensions. However, some cultures do place varying importance on
different personality dimensions. Overall, the best predictor of job success on a global basis is the
conscientiousness dimension.
DERAILED LEADERSHIP TRAITS
A study was conducted that compared 21 derailed executives with 20 executives who had successfully
climbed the corporate ladder to the top." The derailed executives had prior success and were expected to
go far, but they were passed over for promotion again, were fired, or were forced to retire early.
None of the derailed executives had all six weaknesses. Overall, their problem was poor human relations
skills; they did not treat people as valuable assets. Derailed executives failed to make the paradigm shift
from management to leadership. Destructive narcissistic (adjustment trait) managers cause significant
damage to an organization. Greed and resistance to change also lead to failed leadership. Successful
leaders have a range of stronger and weaker dimensions in the Big Five. However, as our definition of
leadership indicates, they are relatively strong on all five dimensions and avoid derailment.

Why executives are derailed.
• They used a bullying style viewed as intimidating, insensitive, and abrasive
• They were viewed as being cold, aloof, and arrogant
• They betrayed personal trust.
• They were self-centered and viewed as overly ambitious and thinking of the next job.
• They had specific performance problems with the business.
• They overmanaged and were unable to delegate or build a team.
1.3 LEADERSHIP ATTITUDES
Leadership attitudes encompass the beliefs, values, and perceptions that leaders hold, influencing their
behavior and decision-making. These attitudes play a crucial role in shaping a leader's approach to leading
and interacting with others. Key aspects of leadership attitudes include:
1. Positive Outlook: Effective leaders often maintain a positive and optimistic attitude, inspiring
confidence and motivation among their team members.
2. Adaptability: Successful leaders exhibit an attitude of adaptability, embracing change and
navigating uncertainties with resilience.
3. Open-mindedness: A leader's openness to new ideas and diverse perspectives fosters innovation
and inclusivity within the team.
4. Proactive Problem-Solving: Leaders with a proactive attitude toward problem-solving tackle
challenges head-on, seeking solutions and turning obstacles into opportunities.
5. Ethical Orientation: Strong leaders demonstrate an ethical attitude, emphasizing honesty,
integrity, and a commitment to ethical decision-making.
6. Empathy: Empathetic leaders understand and consider the feelings and needs of their team
members, fostering a positive and supportive work environment.
7. Accountability: Effective leaders take responsibility for their actions and decisions, cultivating a
culture of accountability within the team.
8. Collaboration: A collaborative attitude involves valuing teamwork, encouraging open
communication, and promoting a sense of shared ownership among team members.
9. Inclusivity: Inclusive leaders value diversity and create an inclusive environment where all team
members feel heard, respected, and valued.
10. Continuous Learning: Leaders with a positive attitude toward continuous learning embrace
opportunities for personal and professional growth, setting an example for their team.
Leadership attitudes are dynamic and can be cultivated over time through self-awareness, learning, and a
commitment to ongoing development. Positive attitudes contribute to effective leadership by fostering a
healthy organizational culture and promoting the well-being and engagement of team members.
MCGREGOR’S THEORY X AND THEORY Y
The idea that a manager’s attitude has an impact on employee motivation was originally proposed
by Douglas McGregor, a management professor at the Massachusetts Institute of Technology during the
1950s and 1960s. In his 1960 book, The Human Side of Enterprise, McGregor proposed two theories by
which managers perceive and address employee motivation. He referred to these opposing motivational
methods as Theory X and Theory Y management. Each assumes that the manager’s role is to organize
resources, including people, to best benefit the company. However, beyond this commonality,
the attitudes and assumptions they embody are quite different.
Theory X
According to McGregor, Theory X management assumes the following:
• Work is inherently distasteful to most people, and they will attempt to avoid work whenever
possible.
• Most people are not ambitious, have little desire for responsibility, and prefer to be directed.
• Most people have little aptitude for creativity in solving organizational problems.
• Motivation occurs only at the physiological and security levels of Maslow’s hierarchy of needs.
• Most people are self-centered. As a result, they must be closely controlled and often coerced to
achieve organizational objectives.
• Most people resist change.
• Most people are gullible and unintelligent.
Essentially, Theory X assumes that the primary source of employee motivation is monetary, with security
as a strong second. Under Theory X, one can take a hard or soft approach to getting results.
The hard approach to motivation relies on coercion, implicit threats, micromanagement, and tight
controls— essentially an environment of command and control. The soft approach, however, is to be
permissive and seek harmony in the hopes that, in return, employees will cooperate when asked. However,
neither of these extremes is optimal. The hard approach results in hostility, purposely low output, and
extreme union demands. The soft approach results in a growing desire for greater reward in exchange for
diminished work output.
It might seem that the optimal approach to human resource management would lie somewhere between
these extremes. However, McGregor asserts that neither approach is appropriate, since the basic
assumptions of Theory X are incorrect.

Drawing on Maslow’s hierarchy of needs, McGregor argues that a need, once satisfied, no longer
motivates. The company uses monetary rewards and benefits to satisfy employees’ lower-level needs.
Once those needs have been satisfied, the motivation disappears. Theory X management hinders the
satisfaction of higher-level needs because it doesn’t acknowledge that those needs are relevant in the
workplace. As a result, the only way that employees can attempt to meet higher-level needs at work is to
seek more compensation, so, predictably, they focus on monetary rewards. While money may not be the
most effective way to self-fulfillment, it may be the only way available. People will use work to satisfy
their lower needs and seek to satisfy their higher needs during their leisure time. However, employees
can be most productive when their work goals align with their higher-level needs.
McGregor makes the point that a command-and-control environment is not effective because it relies on
lower needs for motivation, but in modern society those needs are mostly satisfied and thus are no longer
motivating. In this situation, one would expect employees to dislike their work, avoid responsibility, have
no interest in organizational goals, resist change, etc.—creating, in effect, a self-fulfilling prophecy. To
McGregor, a steady supply of motivation seemed more likely to occur under Theory Y management.
Theory Y
The higher-level needs of esteem and self-actualization are ongoing needs that, for most people, are never
completely satisfied. As such, it is these higher-level needs through which employees can best be
motivated.
In strong contrast to Theory X, Theory Y management makes the following assumptions:
• Work can be as natural as play if the conditions are favorable.
• People will be self-directed and creative to meet their work and organizational objectives if they
are committed to them.
• People will be committed to their quality and productivity objectives if rewards are in place that
address higher needs such as self-fulfillment.
• The capacity for creativity spreads throughout organizations.
• Most people can handle responsibility because creativity and ingenuity are common in the
population.
• Under these conditions, people will seek responsibility.
Under these assumptions, there is an opportunity to align personal goals with organizational goals by
using the employee’s own need for fulfillment as the motivator. McGregor stressed that Theory Y
management does not imply a soft approach.
McGregor recognized that some people may not have reached the level of maturity assumed by Theory
Y and may initially need tighter controls that can be relaxed as the employee develops.
If Theory Y holds true, an organization can apply the following principles of scientific management to
improve employee motivation:
• Decentralization and delegation: If firms decentralize control and reduce the number of levels of
management, managers will have more subordinates and consequently need to delegate some
responsibility and decision making to them.
• Job enlargement: Broadening the scope of an employee’s job adds variety and opportunities to
satisfy ego needs.
• Participative management: Consulting employees in the decision-making process taps their
creative capacity and provides them with some control over their work environment.
• Performance appraisals: Having the employee set objectives and participate in the process of self-
evaluation increases engagement and dedication.
If properly implemented, such an environment can increase and continually fuel motivation as employees
work to satisfy their higher-level personal needs through their jobs.
THE PYGMALION EFFECT
The Pygmalion Effect, also known as the self-fulfilling prophecy, is a psychological phenomenon where
the expectations of a leader can influence the performance and behavior of their subordinates. The concept
is named after the myth of Pygmalion, a sculptor who fell in love with a statue he created and, through
his intense belief, brought it to life.
In the context of leadership, the Pygmalion Effect operates as follows:
1. Positive Expectations:
• If a leader has high expectations for the performance of their team members, these positive
expectations can influence the individuals to perform better.
• The leader's belief in the team's capabilities sets a standard, and individuals may internalize
these expectations, striving to meet or exceed them.
2. Increased Motivation:
• Positive expectations from a leader can enhance the motivation of team members. The
belief that their efforts will be recognized and rewarded drives individuals to put forth
greater effort and dedication.
3. Feedback Loop:
• As team members respond to the leader's positive expectations with improved
performance, the leader is more likely to provide positive reinforcement and recognition.
• This creates a reinforcing loop where positive expectations lead to better performance,

which, in turn, reinforces the leader's positive expectations.
4. Improved Confidence:
• The Pygmalion Effect can boost the confidence of team members. When leaders express
confidence in their capabilities, individuals are more likely to believe in their own abilities
and take on challenges with a positive mindset.
5. Negative Impact of Low Expectations:
• Conversely, if a leader has low expectations for their team, it can result in poorer
performance. This negative expectation can create a self-fulfilling prophecy where
individuals internalize the low expectations and underperform as a result.
The Pygmalion Effect highlights the powerful role that leadership expectations and beliefs play in shaping
the performance and behavior of a team. It underscores the importance of positive leadership, effective
communication, and the impact of a leader's mindset on the overall success of a group or organization.
Leaders who are aware of the Pygmalion Effect can use it to their advantage by setting high but realistic
expectations, providing support and encouragement, and fostering a positive and empowering work
environment. This, in turn, can contribute to enhanced team morale, increased productivity, and improved
overall performance.
SELF CONCEPT
So far, we have discussed the leaders' attitudes about followers. Now we will examine leaders' attitudes
about themselves. Self-concept refers to the positive or negative attitudes people have about themselves.
If you have a positive view of yourself as being a capable person, you will tend to have the positive self-
confidence trait. A related concept, self-efficacy, is the belief in your own capability to perform in a
specific situation. Self-efficacy is based on self-concept and is closely related to the self-confidence trait,
because if you believe you can be successful, you will often have self-confidence.
Developing a More Positive Attitude and Self-Concept
Your behavior and performance will be self. You cannot be an effective leader, or consistent with the
way you see your follower, if you don't have a po tive self-concept. The environment around us influences
our attitudes. Usually tive selfor control our environment, but we can control our attitudes, Think and act
like a winner, and you may become one. Following are some ideas to help you change your attitudes and
develop a more positive self-concept:
1. Consciously try to have and maintain a positive, optimistic attitude, If you don't have a positive attitude,
it may be caused by your unconsciou thoughts and behavior. Only with conscious effort can you improve
your self-concept.
2. Realize that there are few, if any, benefits to negative, pessimistic attitudes about others and yourself.

Do holding a grudge, worrying, and being afraid of failure help you to succeed?
3. Cultivate optimistic thoughts. Scientific evidence suggests that your thoughts affect every cell in your
body. Every time you think positive thoughts, your body, mind, and spirit respond. You will likely feel
more motivated and energetic. Use positive self-talk-I will do a good job; it will be done on time; etc.
Also use mental imagery-picture yourself achieving your goal.
4. If you catch yourself complaining or being negative in any way, stop and change to a positive attitude.
With time, you will catch yourself less often as you become more positive about yourself.
5. Avoid negative people, especially any that make you feel negative about yourself. Associate with
people who have a positive self-concept, and use their positive behavior.
6. Set and achieve goals. Set short-term goals (daily, weekly, monthly) that you can achieve. Achieving
specific goals will improve your self-concept, helping you to view yourself as successful.
7. Focus on your success; don't dwell on failure. If you achieve five of six goals, dwell on the five and
forget the one you missed. We are all going to make mistakes and experience failure. Winston Churchill
defined success as the ability to go from failure to failure without losing your enthusiasm. The difference
between effective leaders and less-effective leaders is that the successful ones learn from their mistakes.
They bounce back from disappointment and don't let it affect them negatively in the future. Lou Holtz
says happiness is nothing more than a poor memory for the bad things that happen to you.
8. Accept compliments. When someone compliments you, say thank you; it builds self-concept. Don't
say things like it was nothing, or anyone could have done it, because you lose the opportunity for a
buildup.
9. Don't belittle accomplishments or compare yourself to others. If you meet a goal and say it was easy
anyway, you are being negative. If you compare yourself to someone else and say they are better, you are
being negative. No matter how good you are, there is almost always someone better. So focus on being
the best that you can be, rather than putting yourself down for not being the best.
10. Think for yourself. Develop your own attitudes based on others' input; don't simply copy others'
attitudes.
11. Be a positive role model. If the leader has a positive attitude, the followers usually do too.
12. When things go wrong and you're feeling down, do something to help someone who is worse off than
you. You will realize that you don't have it so bad, and you will realize that the more you give, the more
you get. Volunteering at a jail, hospital, soup kitchen, or homeless shelter can help change your attitude.
1.4 ETHICAL LEADERSHIP

Ethical leadership involves leading with integrity, moral principles, and a commitment to ethical behavior.

Ethical leaders prioritize values, fairness, and transparency in their decision-making processes, fostering
a positive organizational culture and earning the trust and respect of their followers. Here are key aspects
of ethical leadership:
1. Integrity:
• Definition: Ethical leaders uphold honesty, transparency, and a strong moral code.
• Leadership Impact: Integrity forms the foundation of ethical leadership, as leaders who
demonstrate honesty and consistency set a standard for ethical behavior within the organization.
2. Respect for Others:
• Definition: Ethical leaders treat all individuals with respect, regardless of their position or
background.
• Leadership Impact: Respectful leaders create an inclusive and supportive work environment.
Valuing diversity and acknowledging the contributions of each team member fosters a positive
organizational culture.
3. Fairness and Justice:
• Definition: Ethical leaders strive for fairness and justice in their decision-making processes.
• Leadership Impact: Fairness builds trust among team members. Ethical leaders ensure that
policies, procedures, and resource allocation are equitable and that everyone is held to the same
standards.
4. Honest Communication:
• Definition: Ethical leaders communicate truthfully, openly, and transparently.
• Leadership Impact: Honest communication builds trust and credibility. Ethical leaders share
information openly, even when the message may be challenging, fostering a culture of
transparency.
5. Accountability:
• Definition: Ethical leaders take responsibility for their actions and the outcomes of decisions.
• Leadership Impact: Accountability reinforces trust. Leaders who acknowledge mistakes, learn
from them, and take corrective action demonstrate accountability, setting a positive example for
the team.
6. Ethical Decision-Making:
• Definition: Ethical leaders prioritize ethical considerations when making decisions.
• Leadership Impact: Ethical decision-making involves considering the consequences of actions on
all stakeholders. Leaders who make decisions based on ethical principles contribute to a culture
of integrity and trust.

7. Ethical Role Modeling:
• Definition: Ethical leaders serve as role models for ethical behavior.
• Leadership Impact: Leaders who exemplify ethical conduct set the tone for the entire organization.
Their actions speak louder than words, influencing the behavior and attitudes of others.
8. Promoting Ethical Culture:
• Definition: Ethical leaders actively promote and reinforce an ethical organizational culture.
• Leadership Impact: Ethical leaders create an environment where ethical behavior is expected and
rewarded. This involves fostering a culture of openness, learning, and continuous improvement.
9. Balancing Stakeholder Interests:
• Definition: Ethical leaders consider the interests of all stakeholders, balancing the needs of
employees, customers, and the broader community.
• Leadership Impact: Balancing stakeholder interests contributes to long-term organizational
success and sustainability. Ethical leaders recognize the interconnectedness of various
stakeholders and strive to create win-win situations.
10. Courage and Moral Courage:
• Definition: Ethical leaders exhibit courage, particularly moral courage, to stand up for what is
right.
• Leadership Impact: Leaders with moral courage confront unethical practices, even when it's
challenging. This courage fosters a culture where individuals feel empowered to voice concerns
without fear of reprisal.
Ethical leadership is not only about adhering to rules and regulations but also about creating a moral
compass that guides decision-making and actions. Ethical leaders are instrumental in building a culture
of trust, accountability, and ethical conduct, which, in turn, contributes to the long-term success and
sustainability of the organization.
HOW PERSONALITY TRAITS AND ATTITUDES, MORAL DEVELOPMENT, AND THE
SITUATION AFFECT ETHICAL BEHAVIOR
Personality Traits and Attitudes
Our ethical behavior is related to our individual needs and personality traits, Leaders with surgency
(dominance) personality traits have two choices: to use power for personal benefit or to use socialized
power. To gain power and to be conscientious with high achievement, some people will use unethical
behavior; also, irresponsible people often do not perform to standard by cutting corners and other
behavior which may be considered unethical. An agreeableness personality sensitive to others can lead
to following the crowd in either ethical or unethical behavior; having a high self-concept tends to lead to

doing what the person believes is right and not following the crowd's unethical behavior. Emotionally
unstable people and those with external locus of control (they do not take personal responsibility for their
behavior- it is not their fault) are more likely to use unethical behavior. Being ethical is part of integrity.
People open to new experiences are often ethical. People with positive attitudes about ethics tend to be
more ethical than those with negative or weak attitudes about ethics.
Moral Development
A second factor affecting ethical behavior is moral development, which refers to understanding right from
wrong and choosing to do the right thing. Our ability to make ethical choices is related to our level of
moral development. There are three levels of personal moral development, as discussed. At the first level,
preconventional, you choose right and wrong behavior based on your self-interest and the consequences
(reward and punishment). With ethical reasoning at the second level, conventional, you seek to maintain
expected standards and live up to the expectations of others. At the third level, postconventional, you
make an effort to define moral principles regardless of leader or group ethics. Although most of us have
the ability to reach the third level of moral development, postconventional, only about 20 percent of
people reach this level. Most people behave at the second level, conventional, while some have not
advanced beyond the first level, preconventional. How do you handle peer pressure? What level of moral
development are you on? What can you do to further develop your ethical behavior? We will discuss how
to be an ethical leader.
The Situation
Our third factor affecting ethical behavior is the situation. Highly competitive and unsupervised situations
increase the odds of unethical behavior. Unethical behavior occurs more often when there is no formal
ethics policy or code of ethics, and when unethical behavior is not punished, and it is especially prevalent
when it is rewarded. People are also less likely to report unethical behavior (blow the whistle) when they
perceive the violation as not being serious and when the offenders are their friends.
To tie the three factors affecting ethical behavior together, we need to realize that personality traits and
attitudes and moral development interact with the situation to determine if a person will use ethical or
unethical behavior.
HOW PEOPLE JUSTIFY UNETHICAL BEHAVIOR
Most people understand right and wrong behavior and have a conscience. So why do good people do bad
things? When most people use unethical behavior, it is not due to some type of character flaw or being
born a bad person. Few people see themselves as unethical. We all want to view ourselves in a positive
manner. Therefore, when we do use unethical behavior, we often justify the behavior to protect our self-
concept so that we don't have a guilty conscience or feel remorse. Let's discuss several thinking processes

used to justify unethical behavior.
Moral justification is the process of reinterpreting immoral behavior in terms of a higher purpose. The
terrorists of 9/11 killed innocent people, as do suicide bombers, yet they believe their killing is for the
good and that they will go to heaven for their actions. People state that they have conducted unethical
behavior (lie about a competitor to hurt its reputation, fix prices, steal confidential information, etc.) for
the good of the organization or employees.
People at the postconventional level of moral development may seek higher purpose (Martin Luther King,
Jr.), as well as those at lower levels. How- ever, people at the preconventional and conventional levels of
moral development more commonly use the following justifications.
Displacement of responsibility is the process of blaming one's unethical behavior on others. "I was only
following orders, my boss told me to inflate the figures."
Diffusion of responsibility is the process of the group using the unethical behavior with no one person
being held responsible. "We all take bribes/ kickbacks; it's the way we do business," or "we all take
merchandise home (steal)." As related to conventional morality, peer pressure is used to enforce group
norms.
Advantageous comparison is the process of comparing oneself to others who are worse. "I call in sick
when I'm not sick only a few times a year; Tom and Ellen do it all the time." "We pollute less than our
competitors do."
Disregard or distortion of consequences is the process of minimizing the harm caused by the unethical
behavior. "If I inflate the figures, no one will be hurt and I will not get caught. And if I do, I'll just get a
slap on the wrist anyway." Was this the case at Enron?
Attribution of blame is the process of claiming the unethical behavior was caused by someone else's
behavior. "It's my co-worker's fault that I repeat- edly hit him and put him in the hospital. He called me/did
xxx, so I had to hit him."
Euphemistic labeling is the process of using "cosmetic" words to make the behavior sound acceptable.
Terrorist group sounds bad but freedom fighter sounds justifiable. Misleading or covering up sounds
better than lying to others.
1.5 IMPACT OF PESTEL on Leadership
The impact of the external environment, often analyzed through the lens of the PESTEL framework
(Political, Economic, Social and Cultural, Technological, Ecological, and Legal factors), has a profound
influence on organizational leadership. Here's a detailed exploration of how each of these environmental
factors can affect leadership within an organization:
1. Political Environment:

• Impact on Leadership: Political stability, government policies, and regulations directly
influence leadership decisions and strategies.
• Leadership Responses:
• Leaders need to navigate and adapt to changes in political landscapes, anticipating
and mitigating risks associated with policy changes or political instability.
• Developing relationships with key political stakeholders and engaging in advocacy
efforts may be essential for organizational success.
2. Economic Environment:
• Impact on Leadership: Economic conditions, such as inflation, interest rates, and overall
economic growth, shape the financial landscape in which organizations operate.
• Leaders must make financial decisions in response to economic fluctuations, such
as budget adjustments, cost-cutting measures, or strategic investments.
• Adapting business models to changing economic conditions and identifying new
revenue streams become critical leadership tasks.
3. Social and Cultural Environment:
• Impact on Leadership: Societal values, demographics, and cultural norms influence
employee expectations, consumer behavior, and organizational culture.
• Leaders must be culturally competent, understanding and respecting diverse
perspectives within the organization and the broader society.
• Creating an inclusive organizational culture, aligning leadership styles with
cultural expectations, and addressing social issues affecting employees are
essential.
4. Technological Environment:
• Impact on Leadership: Rapid technological advancements influence how organizations
operate, communicate, and innovate.
• Leaders need to embrace and leverage technology to enhance organizational
efficiency and competitiveness.
• Encouraging a culture of innovation, fostering digital literacy, and making strategic
technology investments are crucial leadership actions.
5. Ecological Environment:

• Impact on Leadership: Environmental sustainability concerns and regulations affect
organizational operations and reputation.
• Leaders are increasingly expected to integrate sustainability into organizational
strategies, considering environmental impacts in decision-making.
• Adopting eco-friendly practices, implementing green technologies, and
communicating a commitment to sustainability become leadership imperatives.
6. Legal Environment:
• Impact on Leadership: Laws and regulations at local, national, and international levels
shape the legal context in which organizations operate.
• Leaders must ensure organizational compliance with relevant laws, staying
informed about changes in regulations that may impact business operations.
• Establishing robust legal frameworks, ethical standards, and compliance
mechanisms are critical for effective leadership.
In summary, organizational leadership is intricately linked to the external environment. Successful leaders
recognize the dynamic nature of these factors and adapt their strategies and decision-making processes
accordingly. They engage in continuous environmental scanning, assess the impact of these factors on
the organization, and proactively respond to challenges and opportunities. A strategic and adaptive
leadership approach is essential for navigating the complex and ever-changing external landscape.
MICRO ENVIRONMENT FACTORS WHICH INFLUENCE LEADERSHIP REQUIREMENTS
Microenvironmental factors refer to the specific and immediate external influences that directly affect an
organization and its leadership. These factors are typically closer to the organization and have a more
direct impact on its day-to-day operations. Here are several microenvironmental factors that influence
leadership requirements in detail:
1. Organizational Culture:
• Description: Organizational culture encompasses the shared values, beliefs, and practices
within a company. It shapes how employees interact, make decisions, and approach work.
• Impact on Leadership:
• Leaders need to understand and align with the existing organizational culture or
lead efforts to cultivate a desired culture.
• Adapting leadership styles to resonate with the prevailing culture is essential for
effective leadership.

2. Team Dynamics:
• Description: Team dynamics involve the interactions and relationships among team
members. It includes communication patterns, collaboration, and the overall functioning
of teams.
• Leaders must be adept at building and managing high-performing teams.
• Understanding team dynamics helps leaders identify and address conflicts,
promote effective communication, and foster a positive team culture.
3. Employee Relations:
• Description: The quality of relationships between leaders and employees, as well as
among employees, contributes to the overall work environment.
• Leaders need strong interpersonal skills to build positive relationships with
employees.
• Effective leadership involves addressing employee concerns, providing feedback,
and creating an environment of trust and respect.
4. Communication Channels:
• Description: Communication channels refer to the methods and pathways through which
information is shared within the organization.
• Leaders must be skilled in utilizing various communication channels to
disseminate information and engage with employees.
• Effective communication is crucial for aligning teams with organizational goals
and fostering transparency.
5. Leadership Styles of Peers:
• Description: The leadership styles of colleagues and peers within the organization
influence overall leadership dynamics.
• Leaders need to be aware of the leadership styles of their peers and coordinate
efforts to maintain a cohesive leadership approach.
• Collaboration among leaders with different styles requires adaptability and
effective communication.
6. Employee Skills and Competencies:

• Description: The skills and competencies of employees directly impact the organization's
ability to achieve its goals.
• Leaders must assess and leverage the skills of their team members effectively.
• Identifying skill gaps and providing training opportunities are critical leadership
responsibilities.
7. Customer Feedback:
• Description: Customer feedback provides insights into customer satisfaction, preferences,
and areas for improvement.
• Leaders need to listen to customer feedback and make informed decisions to
enhance products or services.
• Customer-centric leadership involves aligning organizational strategies with
customer needs and expectations.
8. Competitive Landscape:
• Description: The competitive landscape includes other organizations and businesses
operating in the same industry or market.
• Leaders must stay informed about the competitive environment and make strategic
decisions to maintain or enhance the organization's competitive position.
• Strategic leadership involves assessing market trends, identifying opportunities,
and responding to competitive threats.
9. Regulatory Compliance:
• Description: Regulations and compliance requirements set by external entities, such as
government agencies, impact how the organization conducts its operations.
• Leaders must ensure that the organization complies with relevant regulations.
• Managing regulatory risks and adapting to changes in compliance requirements are
essential for effective leadership.
Understanding and responding to these microenvironmental factors are integral to effective leadership.
Leaders who can navigate and leverage these factors contribute to organizational success by creating a
positive work environment, fostering collaboration, and adapting strategies to meet the dynamic needs of
the organization and its stakeholders.

1.6 LEADERSHIP COMMUNICATION
Communication is the process of conveying information and meaning. True communication takes place
only when all parties understand the message formation from the same perspective At all organizational
levels, 75 percent of each workday is consumed has been estimated that at least communication. Thus,
every successful person is in the communication speak, read, and write will have a direct impact on your
ness. Your ability to career success: Organizations recruit people with good communication and
organizations offer communication training programs. discuss the importance of communication in
leadership and examine the communication process of sending and receiving messages.
Communication is a major competency for leaders, because effective commnication is part of leadership.
Empirical research supports the statement the effective leaders are also effective communicators; there is
a positive relationship between communication competency and leadership performance
Good communication skills drive effective leadership. Leaders play informational roles, and the shift in
paradigm from management to leader includes differences in communication skills.
PLANNING THE MESSAGE
Before sending a message, you should plan it, answering these questions:
What is the goal of the message? Is it to influence, to inform, to express feeling, or all of these things?
What do you want as the end result of the communication? Set an objective. After considering the other
planning dimensions, determine exactly what you want to say to meet your objective. In today's diverse
global economy, you also need to be culturally sensitive in deciding what to say in a message.
Who should receive the message? Have you included everyone who needs to receive your message?
How will you send the message? With the receivers in mind, plan how you will convey the message so
that it will be understood. Select the appropriate method for the audience and situation. As a general
guide, use rich oral channels for sending difficult and unusual messages, less rich written channels for
transmitting simple and routine messages to several people, and combined channels for important
messages that employees need to attend to and understand. You should also avoid giving too much detail.
When will the message be transmitted? Timing is important. For example, if it is going to take 15 minutes
to transmit a message, don't approach an employee 5 minutes before quitting time. Wait until the next
day. Make an appointment when appropriate.
Where will the message be transmitted? Decide on the best setting-your office, the receiver's workplace,
and so forth. Remember to keep distractions to a minimum.
LISTENING
Listening is the process of giving the speaker your undivided attention. At the speaker sends the message,

you should listen by:
Paying attention. When people interrupt you to talk, stop what you are doing and give them your complete
attention immediately. Quickly relax and clear your mind, so that you are receptive to the speaker. This
will get you started correctly. If you miss the first few words, you may mas the message.
Avoiding distractions. Keep your eye on the speaker. Do not fiddle with pens, papers, or other distractions.
For important messages, put your phone on "take a message." If you are in a noisy or distracting place,
suggest moving to a quiet spot.
Staying tuned in. While the other person is talking or the professor is lecturing, do not let your mind
wander to personal topics. If it does wander, gently bring it back. Do not tune out the speaker because
you do not like something about the person or because you disagree with what is being said. If the topic
is difficult, do not tune out; ask questions. Do not think about what you are going to say in reply, just
listen.
Not assuming and interrupting. Do not assume you know what the speaker is going to say, or listen to the
beginning and jump to conclusions Most listening mistakes are made when people hear the first few words
of a sentence, finish it in their own minds, and miss the second half. Listen to the entire message without
interrupting the speaker
Watching nonverbal cues. Understand both the feelings and the content of the message. People sometimes
say one thing and mean something else. So watch as you listen to be sure that the speaker's eyes, body,
and face art sending the same message as the verbal message. If something seems out of sync, get it
cleared up by asking questions. Asking questions. When you feel there is something missing,
contradictory, or you just do not understand, ask direct questions to get the person to es plain the idea
more fully.
Taking notes. Part of listening is writing important things down so you can remember them later, and
document them when necessary. This is especially true when you're listening to instructions. You should
always have
FEEDBACK
How to Get Feedback on Messages
Here are four guidelines you should use when getting feedback on messages, They are appropriate for
managers and nonmanagers.
Be open to feedback. There are no dumb questions. When someone asks a question, you need to be
responsive, and patiently answer questions and explain things clearly. If people sense that you get upset
if they ask questions, they will not ask questions.
Be aware of nonverbal communication. Make sure that your nonverbal communications encourage

feedback. For example, if you say, "I encourage questions," but when people ask ques questions you look
at them as though they are stupid, or you are impatient, people will learn not to ask questions. You must
also be aware of, and read, people's nonverbal communications. For example, if you are explaining a task
to Larry and he has a puzzled look on his face, he is probably confused but may not be willing to say so.
In such a case, you should stop and clarify things before going on.
Ask questions. When you send messages, it is better to know whether the messages are understood before
action is taken, so that the action will not have to be changed or repeated. Communicating is the
responsibility of both the message sender and receiver. So you should ask questions to check
understanding, rather than simply asking, "Do you have any questions?" Direct questions dealing with
the specific information you have given will indicate if the receiver has been listening, and whether he or
she understands enough to give a direct reply. If the response is not accurate, try repeating, giving more
examples, or elaborating further on the message. You can also ask indirect questions to attain feedback.
You can ask "how do you feel?" questions about the message. You can also ask "if you were me"
questions, such as, "If you were me, how would you explain how to do it? Or you can ask third-party
questions, such as, "How will employees feel about this?" The response to indirect questions will often
tell youother people's attitudes. •
Use paraphrasing. The most accurate indicator of understanding is paraphrasing. How you ask the
receiver to paraphrase will affect his or her attitude. For example, if you say "Joan, tell me what I just
said so that I can be sure you will not make a mistake as usual," would probably result in.

Module - 2: LEADERSHIP THEORIES
Structure
2.2 Introduction 30
2.2 Behavioral Approaches 31
2.3 IOWA studies 31
2.4 Michigan model 32
2.5 Ohio model 34
2.6 Leadership Grid 37
2.7 Contingency Approach 40
2.8 Fiedler Contingency Model 41
2.9 Situational Theories 46
2.10 Hersey & Blanchard 47
2.11 Path Goal Theory 50
2.1 Introduction
The study of leadership theories is an essential and dynamic field within the realm of organizational
behavior and management. Leadership, as a multifaceted and influential phenomenon, has garnered
substantial attention from scholars and practitioners alike seeking to understand the intricacies of effective
guidance, influence, and direction within diverse contexts. This chapter delves into various prominent
leadership theories that have evolved over time, each offering a unique lens through which to examine
the qualities, behaviors, and relationships inherent in successful leadership. From early trait-based
perspectives to contemporary theories emphasizing situational adaptability, this exploration aims to
provide a comprehensive overview of the major frameworks shaping our understanding of leadership. As
we navigate through trait theories, behavioral approaches, contingency models, and transformative
paradigms, the nuanced interplay between leaders and followers emerges, revealing the complex and
pg. 30
ever-evolving nature of effective leadership in the modern organizational landscape.
2.2 Behavioral Approach

The Behavioral Leadership Theory constitutes a pivotal dimension in the comprehensive landscape of
leadership studies, offering valuable insights into the observable actions and interactions that distinguish
effective leaders. Departing from earlier trait-based paradigms that posited leadership as an innate set of
qualities, behavioral theories focus on the behaviors exhibited by leaders in their interactions with
followers. This chapter explores the foundations of Behavioral Leadership, emphasizing the significance
of leaders' actions, decision-making processes, and communication styles in shaping organizational
outcomes. By examining the key tenets of various behavioral models, ranging from the Ohio State and
University of Michigan Studies to the Managerial Grid, this exploration aims to unravel the intricate
dynamics between leadership behaviors and their impact on team dynamics, organizational culture, and
overall effectiveness. In understanding how leaders engage with and influence their followers, the
Behavioral Leadership Theory contributes valuable perspectives to the broader discourse on leadership
efficacy and development.
2.2.1 IOWA Studies

Leadership is an integral part of a firms’ life. It impacts not only the culture of the organization but also
its ability to make profits and sustain. Hence, leadership has attracted scholarly attention for a very long
time. Many researchers have aimed to determine the “best” leadership strategy. The Iowa leadership
studies are one such study. We will discuss the Iowa leadership studies and their implications in this
article.
Background of Iowa Leadership Studies
A group of researchers: Lewin, Lippitt and White connected the Iowa leadership studies in the 1930s.
Their main motivation for this work was to find answers to the following key questions about leadership:
i. Why do groups rebel against authority?
ii. Is not a democratic style of leadership more pleasant than an authoritarian style of leadership.
If this is true, will not followers prefer a democratic leader over an authoritarian leader?
The group of researchers conducted a series of experiments on school children in order to answer these
questions. The result was the development of an interesting tripartite theory of leadership.
The three styles of leadership
i. Authoritarian
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An authoritarian leader is one who likes to exercise control over the followers. As per the Iowa leadership
studies, followers do not enjoy such a style of leadership. Such leaders make all decisions and expect
blind obedience from followers. Due to the inherent arrogance, decision-making may sometimes be
compromised as the diversity of opinions is not allowed.
Authoritarian leaders are most commonly seen in centralized and formalized organizations. Very few
people have decision-making power. Although it allows speedy decision-making, employees are mostly
unhappy.
ii. Democratic
Unlike an authoritarian leader, a democratic leader is more people-oriented. Democratic leaders do not
hoard power. Instead, they focus on developing cohesive group structures and participative decision-
making. They exercise control where required but let followers have their bit of autonomy. Followers are
seen to be confident, responsible and accountable. They like their boss and are much more productive.
Since followers have high autonomy, it is also important that the employees are competent enough to take
decisions. Therefore, if employees are not talented enough, the organization can land into trouble due to
democratic leadership. Democratic organizations have higher corporate costs. This is because the skilled
and talented employees need to be paid higher salaries.
In addition, decentralization of power may not be very useful and economical in large organizations.
However, it may prove very beneficial for small organizations.
iii. Laissez-fair
Laissez-fair leadership refers to the absence of leadership. The leader does not exercise any power or
authority. The group becomes a rudderless ship. There are a lot of followers but there is no one to guide
them in one direction. Hence such groups often tend to lack focus and direction. Their productivity and
creativity also tend to be low.
Laissez-fair leaders lack competence. A laissez-fair leader is not good for any type of organization
because they lack passion and initiative.
2.2.2 Michigan Model - University of Michigan: Job-Centered and Employee-Centered Behavior

The University of Michigan's Survey Research Center, under the principal direction of Rensis Likert,
conducted studies to determine leadership effective ness. Researchers created a questionnaire called the
"Survey of Organizations" and conducted interviews to gather data on leadership styles. Their goals were
to (1) classify the leaders as effective and ineffective by comparing the behavior of leaders from high-
producing units and low-producing units; and (2) determine reasons for effective leadership. The
researchers identified two styles of leadership behavior, which they called job-centered and employee-
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centered. The U of Michigan model stated that a leader is either more job- centered or more employee-
centered. The University of Michigan Leadership Model thus identifies two leadership styles: job-
centered and employee- centered.
Job-Centered Leadership Style
The job-centered style has scales measuring two job-oriented behaviours of goal emphasis and work
facilitation. Job-centered behavior refers to the extent to which the leader takes charge to get the job done.
The leader closely directs subordinates with clear roles and goals, while the manager tells them what to
do and how to do it as they work toward goal achievement. Review the odd numbered items in Self-
Assessment 1 for examples of job- (task-) oriented leadership behavior.
Employee-Centered Leadership Style
The employee-centered style has scales measuring two employee-oriented behaviors of supportive
leadership and interaction facilitation. Employee. centered behavior refers to the extent to which the
leader focuses on meeting the human needs of employees while developing relationships. The leader is
sensitive to subordinates and communicates to develop trust, support, and respect while looking out for
their welfare.
Advantages of the Michigan Model of Leadership:

• Empirical Foundation: One of the strengths of the Michigan Model is its empirical foundation.
The development of the model was grounded in extensive research and data analysis, providing a
scientific basis for its concepts.
• Clear Classification: The model provides a clear classification of leadership styles, simplifying
the understanding of leadership behavior into two distinct categories. This clarity can be helpful
for both researchers and practitioners.
• Focus on Relationships: The model highlights the importance of leader-subordinate
relationships. By emphasizing employee-oriented behavior, it recognizes the role of leaders in
creating positive work environments and fostering interpersonal connections.
• Applicability: The model's versatility allows for its application in various organizational contexts
and industries, making it accessible for a wide range of researchers and practitioners.
• Employee Satisfaction: The emphasis on employee-oriented behavior suggests a positive
correlation with employee satisfaction, as leaders who prioritize relationships and support may
contribute to a more positive workplace environment.
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Disadvantages of the Michigan Model of Leadership:
• Over-simplification: Critics argue that the model oversimplifies the complexities of leadership
by reducing it to just two behavioral styles. Leadership is a multifaceted phenomenon, and
reducing it to a binary classification may not capture its full complexity.
• Cultural Limitations: The model was developed primarily in a Western context and may not
adequately consider cultural variations in leadership preferences. Leadership expectations and
behaviors can vary significantly across cultures, and the model might not be universally
applicable.
• Limited Task Consideration: The model places a significant emphasis on interpersonal
relationships but may not provide sufficient guidance on task-related considerations. Effective
leadership requires a balance between people-oriented and task-oriented behaviors
• Lack of Contemporary Emphasis: Since its development, the business environment has evolved
considerably. The model may not fully address contemporary leadership challenges and dynamics,
such as the rise of digital technologies and remote work.
• Inflexibility: The model may be perceived as inflexible by categorizing leaders into two distinct
types. In reality, effective leadership often involves a blend of both employee-oriented and
production-oriented behaviors, and leaders may need to adapt their style based on situational
demands.
2.2.3 Ohio Model

The term "Ohio Model" is often associated with the Ohio State Leadership Studies, a significant
contribution to leadership research in the mid-20th century. The studies conducted at Ohio State
University aimed to understand leadership behavior and its impact on organizational outcomes.
Ohio State Leadership Studies states leaders exhibit two types of behaviors –
a. Initiating Structure and
b. Consideration in managing employees to achieve goals.
They found two critical leadership characteristics, either high or low or independent of one another. The
research was based on questionnaires to leaders and subordinates of the organizations. Ultimately, Ohio
state leadership studies narrowed the description of leader behavior into two dimensions; initiating
structure behavior and consideration behavior.
a. Initiating Structure Behavior – The behavior of leaders who define the leader-subordinate role
so that everyone knows what is expected establishes formal communication lines and determines
how tasks will be performed.
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b. The Consideration Behavior –behavior of leaders who are concerned for subordinates and
attempt to establish a warm, friendly, and supportive climate.
Ohio State Leadership Grid
The Ohio State Leadership Studies also showed that initiating structure and consideration are two distinct
dimensions and not mutually exclusive. A low score on one does not require a high score.
Hence, leadership behavior can be plotted on two separate axes rather than on a single continuum, as
shown in the following diagram;
From, the study the following facts are established.

• Leaders with low consideration and low structure become pessimistic and passive.
• Leaders with high consideration and low structure work for group harmony and benefits. They
become aware of fulfilling the social needs of employees but they are less concerned about
performance.
• Leaders with low consideration and high structure focus on productivity and performance. They
pay low interest for employee welfare.
• Leaders with high consideration and high structure focus on productivity, performance, group
harmony, and welfare. Theoretically, this is the best leadership style according to the Ohio State
Model of Leader Behavior but it is not possible practically to be high at initiating structure as well
as high at consideration.
The findings of Ohio State Leadership Studies suggest that effective leaders possess a strong ability to
work with others and build a cohesive team balanced with the capability to create a structure within which
activities can be accomplished.
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Advantages of the Ohio State Leadership Studies
• Dual Focus: One of the strengths of the Ohio State Leadership Studies is its dual focus on both
task-oriented and relationship-oriented behaviors. This recognition that effective leadership
involves addressing both the task and interpersonal aspects contributes to a more comprehensive
understanding of leadership.
• Empirical Foundation: Similar to the Michigan Model, the Ohio State Leadership Studies were
based on empirical research, providing a scientific foundation for the identified dimensions of
leadership behavior.
• Measurable and Observable: The model's dimensions, initiating structure and consideration, are
tangible and observable behaviors, making them easier to measure and study compared to more
abstract leadership qualities.
• Applicability to Various Contexts: The model's broad applicability makes it suitable for diverse
organizational contexts and industries. It provides a framework that can be adapted to different
leadership situations.
• Practical Implications: The identification of specific leadership behaviors (initiating structure
and consideration) has practical implications for leadership development and training programs.
It provides clear guidelines for leaders to enhance their effectiveness.
Disadvantages of the Ohio State Leadership Studies
• Simplicity: Like the Michigan Model, the Ohio State Leadership Studies are criticized for
oversimplifying leadership. By reducing leadership behavior to just two dimensions, it may not
capture the full complexity of leadership in different contexts.
• Potential Conflicts: The two dimensions (initiating structure and consideration) are not mutually
exclusive, and there can be situations where both are necessary. Overemphasis on one dimension
at the expense of the other might lead to conflicts in leadership approaches.
• Static Nature: The model suggests fixed dimensions of leadership behavior, which may not
adequately address the dynamic nature of leadership. Effective leaders often need to adapt their
behaviors based on changing circumstances.
• Cultural Bias: Similar to the Michigan Model, the Ohio State Leadership Studies may exhibit
cultural bias, as it was primarily developed in a Western context. Leadership expectations and
behaviors can vary significantly across cultures, and the model may not be universally applicable.
• Limited Individual Differences: The model does not delve deeply into individual differences
among leaders. Leadership effectiveness can also be influenced by personal traits, skills, and
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situational factors, which are not extensively explored in this model.
2.2.4 Leadership Grid

The Leadership Grid, also known as the Managerial Grid, is a management and leadership model
developed by Robert R. Blake and Jane S. Mouton in the 1960s. The grid is a visual representation that
assesses leadership styles based on two fundamental behavioral dimensions: concern for production (task-
oriented behavior) and concern for people (relationship-oriented behavior). The Leadership Grid became
a popular tool for understanding leadership styles and their impact on organizational effectiveness. It also
identifies five general styles of leadership that result from different combinations of the two types of focus
being measured. These styles are known as country club management, impoverished management,
middle-of-the-road management, produce or perish management, and team management.
This leadership theory is also commonly referred to as the leadership grid since it portrays the leadership
styles in a grid. They argued that a leader’s behavior can be a point in a grid. Where in the horizontal axis
of the grid leaders are concerned with production and on the vertical axis leaders are concerned about
people.
They took nine scales on each of these two dimensions i.e. concern for people and concern for production,
which form 81 possible combinations called leadership styles. Among 81 possible leadership styles, the
5 key styles are impoverished leadership, country club leadership, task leadership, middle-of-the-road
management, and team leadership.
Managerial Grid Leadership Styles
While defining leadership styles Blake and Mouton used 9 scales in which 1 means low and 9 means high
in both concerns for people and production. The below picture depicts it clearly.
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Impoverished Leadership Style (1,1)
Leaders with impoverished leadership styles show very little concern for both people and production.
Such leaders cannot satisfy the production requirements of the organization. They also do not care about
the employee’s needs.
Country Club Leadership Style (1,9)
In the country club style, leaders have a high concern for people i.e. employees’ needs but have a low
concern for production. This leadership style enhances the better leader-follower relationship, a good
working environment, and job security.
In addition, this managerial grid model of leadership claims that for a higher level of employee satisfaction
and loyalty, leaders should follow this country club style.
Middle of the Road Style (5,5)
Leaders with average concern for both people and production follow this style. Leaders with the middle-
of-the-road style can balance productivity as well as good human relations in the organization. This is the
best behavioral pattern of leadership to maintain organizational growth and employee loyalty.
Task Style (9,1)
Leaders with task styles have a high concern for production but a low concern for people. This style of
leadership encourages the maximization of production but ignores the leader-follower relationship. As
such, the task leadership style is not fit where maintaining good human relations is required.
Team Management Style (9,9)
Leaders with a team management style pay the highest concern for both production and people. As being
concerned for people, employee satisfaction will be high, at the same with the maximum concern for
production, production efficiency also remains high.
This style is the most effective leadership style among all the presented above in which a leader gives
equally high concern for people and production. The leader can achieve high productivity through the
participation and coordination of followers and the utmost use of their talents and skills.
Advantages of Managerial Grid Leadership Styles
• Visual Representation: The model provides a visual representation through the grid, making it
easy to understand and communicate the various leadership styles. This visual aspect enhances its
accessibility for both practitioners and scholars.
• Emphasis on Balance: The Managerial Grid emphasizes the importance of achieving a balance
between concern for people and concern for production. This recognition of the need for a dual
focus aligns with the idea that effective leaders should address both task and relationship aspects.
• Flexibility: The model allows for flexibility in leadership styles. Leaders can adapt their behavior
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based on situational needs, moving between different positions on the grid as circumstances
require.
• Diagnostic Tool: The Managerial Grid serves as a diagnostic tool for assessing an individual's or
a team's predominant leadership style. This can be valuable for leadership development and
training efforts.
• Practical Application: The model has practical applications in leadership training programs and
organizational development. It provides a framework for leaders to identify their predominant
style and work towards a more balanced approach.
Disadvantages of Managerial Grid Leadership Styles

• Over-simplification: Critics argue that the Managerial Grid oversimplifies the complex nature of
leadership by reducing it to a two-dimensional model. Leadership involves a multitude of factors
that may not be adequately captured by the grid.
• Cultural and Contextual Limitations: The model's applicability may be limited across different
cultures and contexts. Cultural variations in leadership expectations and behaviors may not align
with the model's Western-centric assumptions.
• Lack of Specificity: The model lacks specificity in terms of providing detailed guidance on
specific leadership behaviors. It offers broad categories but may not offer nuanced insights into
the intricacies of various leadership situations.
• Inadequate Consideration of Individual Differences: The Managerial Grid does not
sufficiently consider individual differences among leaders. Personal traits, skills, and experiences,
which can significantly impact leadership effectiveness, are not thoroughly explored.
• Static Nature: The model may give the impression of a static leadership style, whereas effective
leadership often requires adaptability to changing circumstances. The grid does not account for
the dynamic nature of leadership.
2.3 Contingency Approach

If you’re seeking the optimal way to guide your team and boost employee productivity, you might find
yourself overwhelmed by the multitude of theories on the best leadership style. It can be challenging to
discern which approach is truly the most effective. However, contingency theory proposes that there isn’t
a single “best” leadership style — rather, the ideal approach depends on the specific situation.
Contingency theory prompts managers to consider various aspects of their employees and the current
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circumstances. Equipped with this understanding, you can modify your leadership style to elicit the most
positive response from their team members.
Contingency Theory Definition

The core premise of contingency theory is that there’s no universally correct way to lead a team or make
decisions. Instead, it advocates for a strategy that’s flexible and adaptable to the situation at hand.
Leaders who embrace contingency theory adjust their leadership style based on factors such as
interpersonal relationships within the workplace or feedback from employees.
Origins of Contingency Theory
Contingency theory was first introduced by Fred Fiedler, a prominent researcher in organizational
psychology during the 20th century. Rather than categorizing leaders as either bad or good, Fiedler’s
contingency theory emphasized aligning necessary leadership traits with specific challenges.
Fiedler identified leaders as either relationship-oriented or task-oriented, asserting that success in
leadership depended on how favourable the situation was. In essence, contingency theory suggests that
numerous variables can alter the requirements of a scenario. Consequently, leaders need to adapt their
style or delegate tasks to individuals with suitable skill sets to navigate these challenges effectively.
2.3.1 Fiedler Contingency Model

Fiedler’s Contingency Theory, also known as Fiedler’s Contingency Model or Fiedler’s Theory of
Leadership, states that there is not one best style of leadership. Rather, the most effective leadership style
for any given situation is one that aligns with the situation at hand.
The theory was developed in the 1960s by Austrian psychologist, Professor Fred Fiedler. He studied
leaders’ personalities and characteristics and came to the conclusion that leadership style, since it is
formed through one’s life experiences, is incredibly difficult, if not impossible, to change.
For this reason, Fiedler believed the right leader must be chosen for each job based on their skill set and
the requirements of the situation. In order to best match leaders with situations, each leader must first
understand their natural leadership style. Then, they need to evaluate whether their leadership style is
right for the situation. To put it simply, Fiedler determined that a leaders’ ability to succeed rests on two
factors:
• Natural leadership style
• Situational favorableness
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Leadership style
To help you determine your leadership style, Fiedler developed the Least Preferred Coworker (LPC)
scale. The scale asks you to describe the coworker you least prefer to work with.
The more positively you rate your least preferred coworker on a variety of different criteria, the more
relationship-oriented you are. The less favorably you rate them on the same criteria, the more task-
oriented you are.
Essentially:
• If you’re a high LPC leader, you’re a relationship-oriented leader.
• If you’re a low LPC leader, you’re a task-oriented leader.
Relationship-oriented leaders are great at building relationships, facilitating team synergy, and managing
interpersonal conflict. Task-oriented leaders tend to be skilled at organizing projects and teams to
accomplish tasks efficiently and effectively.
The rationale behind these two leadership styles is pretty straightforward:

• Rating your least preferred coworker favorably means that you see the best in people—even those
who you wouldn’t necessarily choose to work with.
• Rating your least preferred coworker unfavorably suggests that you struggle to see their
contributions, since you value efficiency and effectiveness over other attributes.
There isn’t one “right” way to lead. While task-orientation may be preferable to the organization at large,
teammates themselves tend to prefer relationship-orientation. In fact, 79% of people who quit their jobs
cite lack of appreciation as a primary reason for leaving.
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Situational favorableness
Next, Fiedler’s model requires you to assess the situation at hand. Situational contingency theory, also
known as situational leadership, states that every situation that requires leadership is different and requires
a specific type of leader. The favorability of a situation depends on how much influence and power you
have as a leader.
Situational favorableness is determined by three variables:
• Leader-member relations
• Task structure
• Position power
Leader-member relations are all about trust. Does your team trust you as a leader? The more they do,
the higher your degree of leader-member relations and the more favorable the situation is.
Task structure refers to the clarity of the tasks required to complete a project. Higher task structure
results in a more favorable situation. The more clear-cut and precise tasks are, the higher the situation’s
task structure—whereas the vaguer they are, the lower the situation’s task structure.
Finally, position power refers to the authority you have over your team as a leader. If you can reward
them, punish them, or tell them what to do, your position power is high. As you can imagine, higher
position power makes the situation more favorable.
How to apply Fiedler’s Contingency Model to be a better leader

Now that we’ve established a basic understanding of Fiedler’s Contingency Theory, you can determine
what type of leader you are and start applying the model.
The following section will walk you through how to determine your natural leadership style and
understand the situation at hand. According to Fiedler, only then can you be an effective leader and make
the best decision in each situation—lead or delegate.
Step 1: Understand your leadership style
In order to identify your natural leadership style, we return to the LPC scale. It’s time to bring to mind
the person you least prefer working with. Copy the chart below into a separate document and use it to
mark the score that best fits how you’d describe your least preferred coworker.
Remember, understanding your leadership style is highly beneficial to you and your team. While you may
want to be generous with your answers, it’s important to respond honestly for the most accurate
understanding of your leadership style.
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Least preferred coworker (LPC) scale
Negative Score Positive
Unpleasant 1 2 3 4 5 6 7 8 Pleasant
Rejecting 1 2 3 4 5 6 7 8 Accepting
Tense 1 2 3 4 5 6 7 8 Relaxed
Cold 1 2 3 4 5 6 7 8 Warm
Boring 1 2 3 4 5 6 7 8 Interesting
Backbiting 1 2 3 4 5 6 7 8 Loyal
Uncooperative 1 2 3 4 5 6 7 8 Cooperative
Hostile 1 2 3 4 5 6 7 8 Supportive
Guarded 1 2 3 4 5 6 7 8 Open
Insincere 1 2 3 4 5 6 7 8 Sincere
Unkind 1 2 3 4 5 6 7 8 Kind
Inconsiderate 1 2 3 4 5 6 7 8 Considerate
Untrustworthy 1 2 3 4 5 6 7 8 Trustworthy
Gloomy 1 2 3 4 5 6 7 8 Cheerful
Quarrelsome 1 2 3 4 5 6 7 8 Harmonious
Determining your LPC score
Now that you’ve filled out the test, add up every number you marked to calculate your LPC score.
Interpret your score as follows:
• If you scored 73 and above (a high LPC score), you are a relationship-oriented leader.
• If you scored 54 and below (a low LPC score), you are a task-oriented leader.
• If you scored between 55 and 72, you have the qualities of both a relationship-oriented and a task-
oriented leader. Deciding which style fits you better will take further exploration through other
leadership theories.
Step 2: Assess the situation
In order to assess situational favorableness to determine leadership effectiveness in a specific
environment, Fiedler poses three questions.
On a scale of one to 10, with 10 representing the highest value…
• Are leader-member relations good and trustworthy (10) or poor and untrustworthy (1)?
• Are the tasks at hand clear and structured (10) or confusing and unstructured (1)?
• Is your authority and influence over your team strong (10) or weak (1)?
Don’t solely rely on your own judgment of the situation. Ask group members to anonymously answer
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these same questions and calculate the average of all answers to best understand the situation’s
favorableness. Seeking your team’s insight is a great way to empower them and improve team morale.
Step 3: Decide whether you’re the leader for the job
Now that you have a grasp on your leadership style and the favorableness of the situation, you can
determine whether you’re the right leader for the situation.
• If you’re a task-oriented leader, you’re the best fit to tackle highly favorable and highly
unfavorable situations. The extremes are where you’ll serve your team best.
• If you’re a relationship-oriented leader, your style is best suited to lead in situations with moderate
favorability.
The table below breaks down all of the different instances when each leadership style is the best fit.
Now for the trickier situations. If you’re a task-oriented leader in a moderately favorable situation or a
relationship-oriented leader in a highly favorable or unfavorable situation, your leadership style likely
isn’t the right fit for the situation. If this is the case, don’t panic—there are ways to make sure that your
team is still set up for success.
Step 4: Consider delegating to the right leader
According to Fiedler, leadership style is fixed and cannot be changed. This means that if a leader’s style
pg. 44
isn’t right for a situation, that leader may need to delegate leadership to the right person.
While it can be challenging to admit that your skillset isn’t right for a situation, there’s no shame in
delegating leadership to someone else. In fact, delegation is necessary for effective leadership. If you’re
a manager, consider promoting someone on your team with the opposite leadership style to supervise the
team wherever needed. Alternatively, if you’re overseeing a cross-functional project, see if one of the
cross-functional team members is a better fit for the situation.
Step 5: Try changing the situation
Another way to ensure that your team is set up for success if your leadership style doesn’t fit the situation
at hand is to try to change the situation. Here are a few ways to align situational favourableness with your
skillset:
• Improve leader-member relations: If it would help the situation to improve leader-member
relations, try focusing on your transparency with the team or entrusting team members with new
responsibilities. 60% of leaders worry about how their team perceives transparency. By improving
it wherever possible, leaders can feel confident that their team members will trust them, which in
turn improves leader-member relations.
• Level up task clarity: Are tasks unclear simply because that’s the nature of the job, or are there
processes that can be cleaned up a bit? Try outlining tasks to make them easier for your team to
accomplish.
• Increase your authority: If more power and influence could help you lead better, try formulating
an argument to present to upper management. You may come out of it with a promotion to a more
senior role.
Advantages of Fiedler’s Contingency Theory

• It provides a simple way to determine when a leader’s skills are most and least impactful.
• It encourages leaders to practice self-awareness, an essential quality for making decisions for a
team.
• It takes the situation into account, branching beyond many leadership theories that solely focus on
the leader themself.
• It’s straightforward—LPC and situational favorableness are both relatively easy to calculate.
Disadvantages of Fiedler’s Contingency Theory
• It’s far too rigid. If you can’t change the situation at hand, the theory states that the only option
you have is to give up leadership.
• It’s unclear what leaders who fall in the middle range of the LPC test should do. The theory
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essentially just says to “figure it out.”
• Self-assessment isn’t always reliable. Even when we try to be self-aware when completing the
LPC test, our egos and biases have a way of interfering, even subconsciously.
• The theory may discourage leaders who are doing a fine job, especially if they perceive their
leadership style and situation to be at odds when they actually aren’t.
2.4 Situational Theories

Situational theories of leadership work on the assumption that the most effective style of leadership
changes from situation to situation. To be most effective and successful, a leader must be able to adapt
his style and approach to diverse circumstances.
For example, some employees function better under a leader who is more autocratic and directive. For
others, success will be more likely if the leader can step back and trust his team to make decisions and
carry out plans without the leader’s direct involvement. On a similar note, not all types of industries and
business settings require the same skills and leadership traits in equal measure. Some fields demand a
large measure of innovation, whereas in others, personal charisma and relational connection with clients
are far more important.
Different theories have been developed that recognize the situational aspects of leadership. Each theory
attempts to provide its own analysis of how leadership can be most successful in various situations.
2.4.1 Hersey & Blanchard
The term “situational leadership” is most commonly derived from and connected with Paul Hersey and
Ken Blanchard’s Situational Leadership Theory. This approach to leadership suggests the need to
match two key elements appropriately: the leader’s leadership style and the followers’ maturity or
preparedness levels.
The theory identifies four main leadership approaches:
• Telling: Directive and authoritative approach. The leader makes decisions and tells employees
what to do.
• Selling: The leader is still the decision maker, but he communicates and works to persuade the
employees rather than simply directing them.
• Participating: The leader works with the team members to make decisions together. He supports
and encourages them and is more democratic.
• Delegating: The leader assigns decision-making responsibility to team members but oversees
their work.
In addition to these four approaches to leadership, there are also four levels of follower maturity:
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• Level M1: Followers have low competence and low commitment.
• Level M2: Followers have low competence, but high commitment.
• Level M3: Followers have high competence, but low commitment and confidence.
• Level M4: Followers have high competence and high commitment and confidence.
In Hersey
and Blanchard’s approach, the key to successful leadership is matching the proper leadership style to
the corresponding maturity level of the employees. As a general rule, each of the four leadership styles
is appropriate for the corresponding employee maturity level:
• Telling style works best for leading employees at the M1 level (low competence, low
commitment).
• Selling style works best for leading employees at the M2 level (low competence, high
commitment).
• Participating style works best for leading employees at the M3 level (high competence, low
commitment/confidence).
• Delegating style works best for leading employees at the M4 level (high competence, high
commitment/confidence).
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Identifying the employee maturity level becomes a very important part of the process, and the leader must
have the willingness and ability to use any of the four leadership styles as needed.
Advantages of Hersey and Ken Blanchard’s Situational Leadership Theory
• Flexibility: This model enables leaders to modify their leadership approach in alignment with
their team members’ maturity levels. This adaptable nature assists in skillful guidance and
motivation, ultimately amplifying individual performance and growth.
• Individualized approach: By recognizing that each team member is unique and may require
different levels of direction and support, the model encourages a personalized leadership
approach. Leaders can tailor their interactions to meet the specific needs of their followers.
• Improved communication: The model promotes open communication between leaders and
followers. Leaders need to understand the maturity level of their team members, which fosters
dialogue.
Disadvantages of Hersey and Ken Blanchard’s Situational Leadership Theory
• Complexity in assessment: Determining the maturity level of each team member can be
challenging. It requires continuous evaluation and understanding of their capabilities,
commitment, and experience, making the model somewhat subjective.
• Time-Consuming: Adapting leadership styles for each team member demands time and effort
from leaders. Constantly monitoring and adjusting leadership behaviors may be impractical in
time-sensitive situations.
• Overlooking other factors: The model focuses primarily on follower maturity, possibly missing
other essential elements that may influence team dynamics and performance, such as
organizational culture or external constraints.
pg. 48
2.4.2 Path Goal Theory
The path goal theory of leadership states that a leader’s behavior directly impacts the satisfaction,
motivation, and productivity of subordinates. This management theory was first developed in the 70s by
management theorists and psychologists and then finally refined by one of the original proponents, Robert
J. House in 1996.
According to the research, a leader’s attitude, behavior, and leadership style alongside environmental
factors influence the productivity and satisfaction of a team. They concluded that leaders need to adjust
dynamically depending on the needs of the team. They even created criteria for what leadership style
is most effective for different situations.
For example, an inexperienced team would need an assertive leader to take charge and assign tasks to
direct the team to its goals. But, if a team shares the same experience and expertise as their leader, a more
supportive and collaborative leadership style is more likely to work out.
This approach requires leaders to be highly adaptable since they need to tailor their leadership style
according to each individual’s needs. Leaders also need awareness of their employees’ skill sets and what
areas may require coaching for success.
Path Goal Theory scholars identified four management styles that can be used at any point in time and
even used in combination with each other. Having clearly defined styles will help leaders direct their
energies to specific aspects of their work.
Path-Goal model
Directive clarifying leader — This type of leader provides explicit instructions on specific tasks they
want their team members to accomplish. Teams with ambiguous or unstructured roles may benefit most
from this type of leadership
pg. 49
Achievement-oriented leader — Leaders who manage confident high-achievers may set high
expectations and goals while encouraging autonomy at work
Participative leader — These leaders solicit feedback from employees before making decisions —
typically effective in small teams or when employees have vested interest in outcomes
Supportive leader — Alongside productivity concerns, supportive leaders care about employees’ well-
being and mental health — taking into account individual employee preferences
Advantages of Path Goal Theory

• Clarify the path to goals for their followers - by providing clear expectations, providing support
when needed, and offering timely feedback on performance.
• Establish goals that are achievable and rewarding - by setting meaningful goals and providing
rewards that are meaningful and motivating.
• Set a good example - by demonstrating the behaviours and values that you want to see in your
followers.
• Provide support - by offering encouragement and providing resources.
• Recognize and reward good performance - by acknowledging achievement and providing rewards
that are meaningful.
Disadvantages of Path Goal Theory
• The theory does not address the influence of external factors such as the organization's culture,
environment, and resources on the leader's ability to provide a path to the goal.
• The theory only considers the leader-follower relationship, ignoring other relationships between
team members.
• The theory does not fully consider the complexity of different leadership styles and their effects
on team performance.
• The path-goal theory does not provide a comprehensive explanation of the dynamics of the leader-
follower relationship.
• The theory does not take into account the impact of individual and group differences on the
effectiveness of goal setting and attainment.
• The theory does not provide enough guidance on how to assess the level of effectiveness of a
particular leadership style and adapt it to the situation.
pg. 50
2.5 Summary
The chapter introduces the study of leadership theories as a crucial field in organizational behavior and
management. Leadership, a complex phenomenon, is explored through various lenses, from trait-based
perspectives to contemporary theories emphasizing situational adaptability. The chapter aims to provide
a comprehensive overview of major leadership frameworks, highlighting the evolving nature of effective
leadership in modern organizations.
The Behavioural Leadership Theory, emphasizing observable actions and interactions of leaders. It
explores the Iowa Studies, conducted in the 1930s, revealing three leadership styles: authoritarian,
democratic, and laissez-faire. The Michigan Model, anchored by the Competing Values Framework, is
introduced, recognizing the paradoxes of leadership. The Ohio Model identifies two critical behaviors:
initiating structure and consideration. The Leadership Grid, developed by Blake and Mouton, assesses
leadership styles based on task-oriented and relationship-oriented behaviors.
Contingency theory, introduced by Fred Fiedler, asserts that there is no universal best leadership style; it
depends on specific situations. The Fiedler Contingency Model evaluates leadership styles based on the
Least Preferred Coworker scale and situational favourableness. Situational Theory, in contrast to Fiedler’s
model, allows leaders to adapt their approach based on team maturity, presenting four leadership styles.
The Hersey-Blanchard Model, also known as the Situational Leadership Model, categorizes followers
based on ability and willingness. Leadership styles (directing, coaching, supporting, delegating) adapt to
follower development levels. The Path-Goal Theory centers around employees' individual goals, with
leaders adapting styles (directive clarifying, achievement-oriented, participative, supportive) based on
employee needs.
In summary, the chapter covers diverse leadership theories, from trait-based and behavioural approaches
to contingency and situational theories, providing a holistic understanding of effective leadership in
various organizational contexts.
2.6 Questions
Section A
1. Define the term "Leadership" and explain why it is considered a multifaceted phenomenon within
organizational behavior and management.
2. Summarize the key characteristics and evolution of leadership theories mentioned in the syllabus,
from early trait-based perspectives to contemporary theories emphasizing situational adaptability.
3. Using examples from the syllabus, illustrate how different leadership theories, such as trait-based
perspectives and behavioral approaches, can be applied in real-world organizational scenarios.
pg. 51
4. Compare and contrast the Iowa Studies' three styles of leadership (Authoritarian, Democratic,
Laissez-faire) and analyze their implications on organizational culture and productivity.
5. Develop a hypothetical scenario where the Michigan Model of Leadership is applied to improve
leadership skills within an organization. Justify your choice of leadership strategies based on the
Competing Values Framework.
Section B
1. Explain the key elements of the Ohio Model as discussed in the syllabus, focusing on the two
dimensions of leadership behavior (Initiating Structure and Consideration).
2. Summarize the Leadership Grid model, highlighting the five general styles of leadership and
explaining the situational contexts in which each style might be most effective.
3. Create a situational scenario where the Contingency Approach to leadership is applied. Describe
how a leader might adjust their style based on various factors, such as interpersonal relationships
and feedback from employees.
Section C
1. Analyze the Fiedler Contingency Model and discuss the significance of the Least Preferred
Coworker (LPC) scale in determining leadership style. How does situational favorableness impact
the effectiveness of different leadership styles?
2. Design a case study illustrating the application of the Situational Leadership Model (Hersey &
Blanchard) within an organization. Identify the different developmental levels of followers and
propose suitable leadership styles for each level.
pg. 52
MODULE -3 CHARISMATIC & TRANSFORMATIONAL LEADERSHIP
STRUCTURE
3.1 Charismatic Leadership – Charisma, Charismatic Leadership
3.1.1 Charisma & Charismatic Leadership
3.1.2 Characteristics of a Charismatic Leader
3.1.3 Advantages & Disadvantages of Charismatic Leadership
3.1.4 Differentiation of Charismatic Leadership and Other Leadership Styles
3.1.5 Five Famous Charismatic Leaders from History
3.2 Transformational Leadership – Charismatic VS. Transformational Leader
3.2.1 Four “I’s” of transformational leadership
3.2.2 Transformational Leadership Advantages and Disadvantages
3.2.3 Five Famous Transformational Leaders from History
3.3 Transformational Leader Behaviours and Attributes
3.3.1 Behaviours of the Transformational Leaders
3.3.2 Attributes of a Transformational Leader
3.4 Transformational Versus Transactional Leadership
3.5 Stewardship & Servant Leadership – Nature, Framework
3.5.1 Steward Leadership
3.5.2 Nature of Steward Leadership
3.5.3 Framework of Steward Leadership
3.5.4 Servant leadership
3.5.5 Principles of Servant Leadership
3.5.6 Nature of Servant Leadership
3.5.7 Framework of Servant Leadership.
3.6 Terminal Questions
pg. 53
3.1.1 Charisma
Charisma is the magnetic and charming personal quality that draws people to someone. People who
have an outgoing, energetic, and likable personality that seems to naturally draw other people to
them are said to have charisma. Such people are often described with the adjective form of the word,
charismatic. A person with charisma is thought to be able to easily influence others. Charisma is
most often used in a positive way as a compliment, but it is sometimes used to imply that someone’s
appeal is based entirely on their outgoing personality, rather than the substance of their actions or
their character.
The word is also used in a religious context in a more specific way to refer to a spiritual gift or a
special ability for leadership. This sense of the word is sometimes seen as charism, and can be
pluralized as charismata.
3.1.1 (a) Charismatic Leadership
Charismatic leadership is a type of leadership that combines charm, interpersonal connection,

and persuasiveness to motivate others.
➢ Charismatic leaders can motivate and inspire their teams toward a greater goal. They do this
by tapping into their team members’ emotions, creating a sense of trust, passion, and purpose
greater than themselves.
➢ Charismatic leadership differentiates from other leadership styles, like laissez -faire or
autocratic, by focusing more on the interpersonal relationship and how the leader interacts
with the people whom they lead.
➢ Many leaders are in some sense charismatic. People want to follow the leader as a person, in
one way or another, not just for the business goal they represent.
➢ However, charismatic leadership relies on multiple attributes of charisma to elicit desired
behaviors. Their charisma shapes growth in employees and the company and produces
specific outcomes.
pg. 54
3.1.2 Characteristics of a Charismatic Leader
Charismatic leadership is made up of a combination of characteristics. Many of them work together

and can be implemented at different times for better use.
Here are eight charismatic leadership characteristics to consider:
1. Communication
A charismatic leader can clearly communicate job duties and goals to their team. They speak openly,
in a professional way, and convey their exact thoughts without speaking too little or too much.
They also allow open communication between everyone. They encourage their employees to speak
freely without fear of repercussions.
They also have good listening skills so that their employees feel heard.
2. Empathy
By allowing their employees to speak openly, a charismatic leader must also make good use
of empathy and compassion. They are open to their employees’ concerns and passions, willing to
understand their feelings.
Charismatic leaders have high emotional intelligence. Because of this skill, they become well-liked
among their employees as great listeners and confidants.
3. Confidence
The idea of charisma often brings along the idea of self-confidence. Strong confidence in the
business world has many aspects. Proper posture and the right body language, such as maintaining
eye contact, create an image of confidence.
A leader who takes on challenges with strong reassurance that they and their team can finish
it presents themselves as confident. When issues arise, or problems are found, a charismatic leader
can confidently take control. They delegate tasks and clearly communicate their wishes and the
outcome they seek.
pg. 55
The main takeaway for confidence is to look and act as if no matter what someone goes through,
everything will result in a good outcome.
4. Humility
A charismatic leader understands that they aren’t perfect. Arrogance is one of the worst traits of
leadership.
Instead, a leader should be willing to accept their mistakes and take on mistakes from their team as
their own. They understand they can improve and strive to do so for the sake of their team.
They are also aware they are a part of the team. If a small job needs to be completed and they have
time to tackle it, they accomplish the job themselves instead of asking someone to d o it for them.
The leadership value of humility shows their employees that their leader is human, yet their other
traits are what gave them command.
5. Self-awareness
Regardless of how amazing a leader can be, they must also be aware of themselves and how others
react to them. Many erratic leaders don’t understand the stress they put on their employees. But a
charismatic leader focuses on understanding themselves and their roles within their team.
6. Maturity
A charismatic leader is someone who was put in their position due to their maturity.
They can develop and drive a team toward the business’ goals due to their expertise and experience.
They can accomplish this with a wise mindset when approaching everything they do. They are the
leader who directs and commands.
7. Optimism
A leader should be optimistic, a “glass half full” type of person. If an issue does come around, they
reassure their employees that the issue can be corrected. They can build a positive attitude for
everyone around them by always looking on the brighter side.
pg. 56
8. Passion
A charismatic leader always shows a great deal of passion in everything they do. They show great
enthusiasm for their work, genuinely. This passion should also bleed into other employees through
clear communication and how they act.
3.1.3 Advantages of Charismatic Leadership

A charismatic authority figure has many advantages that others do not. Here are some of the top benefits
of this approach to leadership:
Increased Loyalty
The charismatic approach to leadership often encourages loyalty among team members. Because
charismatic leaders know how to communicate in a way that motivates and inspires others, their
employees are more likely to stand by them and stay loyal to their companies. The best charismatic leaders
make their employees feel seen and appreciated. These efforts, in turn, help to increase employee
engagement and can reduce turnover rates. In other words, those who work under charismatic leaders are
less likely to jump ship and look for another job. They’ll want to stick around if they’re happy with their
team leader.
Inspires Other Leaders
In some cases, charismatic leaders can inspire others to try their hand at leadership positions. Their
infectious personalities and adept communication skills give team members something to work toward.
Ideally, charismatic leaders (and all leaders, for that matter) won’t hoard their power. They’re committed
to inspiring and motivating others — including those who hope to one day become leaders themselves.
When someone on their team rises through the ranks or expresses interest in a leadership role, the
charismatic leader sees that as a win and a sign that their approach is working.
Increased Productivity
Because charismatic leaders encourage motivation and engagement among their employees, their teams
often experience higher productivity rates. When employees believe in their leaders’ vision, they’re more
inclined to put their best foot forward and strive to get as much done as possible (while still producing
high-quality work, of course). Increased employee productivity typically leads to better overall results for
the team, their leader, and the company as a whole. By keeping everyone motivated and focused on a
singular goal, charismatic leaders can contribute to significant growth and long-term success.
Increased Innovation
Charismatic leaders are creative and unafraid of coming up with new, never-thought-of solutions. They’re
pg. 57
also willing to listen to innovative suggestions from team members. Both of these tenets of charismatic
leadership lead to increased innovation across the board. When employees feel safe to share new ideas
and try new things, they can help the company grow in ways it wouldn’t have otherwise.
Create a Learning-Centred Culture
The best charismatic leaders are humble and understand that they don’t know everything about their
employees or their field. That’s why they often prioritise additional training and learning opportunities –
and motivate their team members to do the same. Charismatic leadership can contribute to a learning-
centred company culture. Employees feel motivated to do whatever it takes to achieve their goals,
including completing management training courses, attending workshops, or using other modalities to
expand their knowledge and develop new skills.
Creates a Shared Identity
A charismatic leader understands the value of teamwork. They also know that to create a unified team,
they must develop a shared identity among their employees. When employees feel united by a specific
goal or mission, it’s incredible what they can achieve (especially when they have a charismatic and skilled
leader guiding and motivating them). When employees share a sense of identity, they also tend to work
together more effectively. Teamwork and collaboration improve and can lead to greater productivity and
better results in a shorter period of time.
Reduced Stress and Burnout

Employees led by charismatic leaders often experience less stress and burnout compared to those directed
by some other types of leaders. Since employees feel connected to their team and their leader and are
motivated to achieve a common goal they’re less likely to feel overwhelmed by their workload. They
want to work harder and meet their goals because they’re enthusiastic about their work. This enthusiasm
can help to stave off burnout and keep employees engaged long-term.
3.1.3 (a) Disadvantages of Charismatic Leadership
All the advantages of charismatic leadership discussed in the previous section are examples of what can
happen when a leader uses their charisma and magnetic personality for good. At the same time, there is
also the potential for charismatic leaders to abuse their powers. There are also situations in which
charismatic leadership simply isn’t the best fit.
Potential for Leaders to Focus on the Wrong Things
Ideally, charismatic leaders will focus on influencing others for good, helping them become better at their
jobs, and helping them take steps that increase the company’s performance and profitability. Some
charismatic leaders focus on the wrong things, though, especially if they lose their sense of humility.
pg. 58
These leaders may become arrogant or begin using their influence in harmful ways.
Potential to Create a Group of “Yes” Men
Charismatic leaders are known for their infectious personalities. They naturally draw people to them and
encourage others to follow in their footsteps. Charisma isn’t inherently a bad thing. However, it can
become problematic when a charismatic leader’s admirers turn into followers or “yes” men. When
employees stop thinking for themselves and start doing whatever the leader says without question, they
may go along with plans that aren’t ideal for the company’s long-term vision and goals. If no one speaks
up and questions the leader, the team’s productivity and performance could suffer.
Potential for Changed Value Systems
Similarly, charismatic leadership can also contribute to changed value systems among team members and
employees. People might initially be drawn to a charismatic leader because they share the same goals.
Over time, though, they may find their value systems and morals shifting to align with the leader’s (even
if they wouldn’t have normally agreed with those views). Employees led by a charismatic leader could
end up agreeing to and doing things they wouldn’t normally do — including compromising their morals
or the business’s values.
Potential for Unethical Behaviour
In extreme cases, a charismatic leader could convince employees or team members to engage in unethical
behaviour. If the leader is too focused on success, they might start to take unethical actions to increase
their chances of achieving a particular goal.
Potential for Excessive Dependency
Ideally, a charismatic leader will inspire others to step up and take on additional responsibility or a
leadership role. However, some charismatic leaders can create excessive dependency among their teams.
This dependency may mean that the company can’t function without a particular leader. If this person
decides to step down, everyone will be left scrambling to pick up the pieces and maintain the same level
of performance. Productivity will likely decrease as a result as well.
Reduced Clarity
In some situations, charismatic leadership can contribute to a lack of clarity among team members. A
charismatic leader may become arrogant, especially if they’ve produced more successes than failures
during their tenure. This arrogance may cause them to rest on their laurels and forget about the strategies
that helped them produce positive results in the first place.
For example, they might stop consulting with their team members regularly or remembering the
company’s mission and values. This is why humility is so essential in effective charismatic leadership.
pg. 59
Not Ideal for Rigid Structures
In some workplaces, charismatic leadership is highly effective and motivating. It doesn’t work in every
situation, though. For example, in industries that require a rigid structure and set of rules (such as
healthcare), a charismatic leader’s personality might not be the right fit. These leaders might feel that
their creativity is stifled or that they can’t communicate effectively without violating rules or norms. As
a result, they may struggle to keep their team members motivated.
3.1.4 Differentiation between Charismatic Leadership and Other Leadership Styles
There are some different traits between charismatic leadership and other leadership types.
Autocratic leadership vs. charismatic leadership
Autocratic leadership is a forceful leadership style. They command others to follow and expect their
commands to be followed to the letter. This can work well in some fields, such as high-level leadership
roles where a single person sends commands down the line.
Charismatic leadership focuses on appealing to employees instead of being a commanding presence.
Leaders are more focused on appealing, empathizing, and generating passion with confidence.
Democratic leadership vs. charismatic leadership
Democratic leadership follows the political nature of its terminology: it’s driven by rationality and goals.
Democratic leaders are focused on developing the group as a whole and act as the leader who the group
follows.
Charismatic leadership appeals more to the personal feelings of their team. They are more willing to
change and act toward what their employees feel rather than turning a blind eye to the overall picture.
Charismatic leaders also connect with their employees on an emotional level.
Laissez-faire leadership vs. charismatic leadership
Laissez-faire leadership has its place where the leader can allow the team to work autonomously without
much input. The team has more power in decision-making and their goals. But this can leave them to rely
on their own passion and drive for their work.
Though charismatic leaders acknowledge the employee’s thoughts on the work they are performing, they
take a more active role in influencing and developing group efforts.
3.1.5 Five Famous Charismatic Leaders from History
Charismatic leaders are often especially effective in times of uncertainty and existential threat. This
leadership style relies on being attuned to the emotions and needs of the people being led. Because of
this, examples of famous charismatic leaders tend to be people who lead through crises. Here are few
examples.
pg. 60
Martin Luther King Jr.
Martin Luther King Jr. empowered his people with hope. He did this by conveying his feelings clearly in
a storytelling-like language that resonated deeply in the hearts of millions of his time, and millions after
his time. He never used force or violence but acted against it with peace and a focus on prosperity.
Mahatma Gandhi
Mahatma Gandhi, much like MLK, focused on inspiring others to do what was good. He encouraged truth
and nonviolence in the face of opposition. He also didn’t command others to follow him, only allowing
those who wanted to follow his actions to accompany him as he was so committed he would have
performed them alone.
Winston Churchill
The outspoken UK Prime Minister during WW2 was very polarizing because he spoke openly, unlike
most politicians at the time. This act of confidence and personal touch made Winston Churchill greatly
charismatic to a nation that was beaten, but not down, in a time of strife and trouble.
Margaret Thatcher
The first female UK Prime Minister was well-loved during her duty and after. Margaret Thatcher was
strong and confident for a woman of her time. She was also an open communicator and willing to bend
to outside points of view and show humility when needed.
Mother Teresa
Mother Teresa was generous with her charity and offered courage in the face of opposition. She was
entirely selfless, fully committed to giving everything she had to help people in need. Others followed
her in her work despite difficult conditions and daily devastation.
3.2 TRANSFORMATIONAL LEADERSHIP

Transformational leadership is a management philosophy that encourages and inspires employees to
innovate and develop new ways to grow and improve the path to a company's future success. Using this
method, executives give trusted employees the independence to make decisions and support new problem-
solving approaches.
Transformational leaders are passionate about their work and the company's mission, while also helping
all employees succeed. Another key trait is their ability to identify business processes that no longer work
and focus on streamlining or changing them as needed.
While transformational leaders are often admired, they don't seek out praise or adulation because their
focus is on doing what's best for their organization. Risk taking is calculated based on gathering
intelligence from team members, the leader's own instincts and experience. Decisions are made with an
pg. 61
eye toward the organization's values, vision and objectives.
3.2.1 Four “I’s” of transformational leadership
Intellectual stimulation encourages innovative thinking by emphasizing new experiences and growth
opportunities.
Individual consideration builds positive relationships by mentoring employees and helping each person
understand their value and potential.
Inspirational motivation models a vision for the organization, the team and for employees to emulate
and make their own.
Idealized influence models expectations and actions for employees, earning their trust and respect.
These four “I’s” provide the foundational philosophy of transformational leadership, helping to
differentiate it from leadership philosophies with a similar style, such as visionary leadership, and even
complement those styles with opposite approaches, such as transactional leadership.
3.2.2 Transformational Leadership Advantages and Disadvantages
Getting employees to consistently meet and exceed goals is a key aspiration of leadership. Transactional
leadership accomplishes this with rewards and punishments, while transformational leadership is more
about inspirational motivation.
Advantages of transformational leadership
➢ These leaders have a less heavy-handed management approach, where employees are freer to
experiment and suggest new ideas and approaches.
➢ Employees are encouraged to focus on what's good for the organization rather than their own self-
interests.
➢ More new ideas and approaches come from the people doing the work, dealing directly with
customers and production issues.
➢ Employees have a personal interest in the organization's goals, leading to greater commitment and
effort in the workplace.
➢ An effective transformational leader unites the organization in a common cause.
Disadvantages of transformational leadership

➢ The transformational leader's inspiring, big-picture vision is not always paired with detailed
directions of how to get there.
➢ If the vision is too grand or aggressive, employees can burn out or get discouraged trying to
achieve it.
pg. 62
➢ By definition, a transformational leader brings change to an organization, but in some cases, that
change can be too disruptive. Leaders must focus on the benefit to the organization, not change
for the sake of change.
➢ There is always a risk that some employees won't agree with the transformational leader's vision.
It doesn't mean they won't do their jobs, but it could be in a less-than-optimal way.
➢ A key part of being a transformational leader is keeping enthusiasm levels high and engaging with
employees. This is best accomplished with ongoing proactive communication and encouragement,
which can be time-consuming.
3.2.3 Five Famous Transformational Leaders from History

Many transformational leaders have helped bring revolutionary products and services to the technology
market, while also boosting profits and performance. Here are several examples of transformational
leaders.
Steve Jobs
The late Apple co-founder and chief executive officer (CEO) was often referred to as a genius and
visionary and inspired a wave of innovative product development during two tenures at Apple. In Apple's
formative years, he inspired -- and demanded -- teams to create the most consumer-friendly hardware and
software designs. His return to Apple more than a decade later was highlighted by products such as the
iPod, iPhone and the iPad. He effectively communicated his vision that products meet high-quality
standards and be consumer-friendly.
Satya Nadella
When Satya Nadella took over as CEO of Microsoft in 2014, he transformed the company. What was
once a slow-moving tech giant focused on keeping its dominant position in the industry is a far nimbler
and more open supplier that moved quickly to make its software available on all platforms, including that
of its competitors.
Jeff Bezos
The industry Jeff Bezos transformed when he started Amazon is now but a footnote to its mega-success.
Amazon's initial success was as an online bookseller. As the company began selling other products,
Amazon quickly grew to become the e-commerce giant it is today. Encouraging a corporate culture that's
open to innovative approaches has paid off further. Amazon has helped launch the cloud computing
revolution with Amazon Web Services (AWS), which was initially a homegrown solution to Amazon's
own storage and computing needs.
pg. 63
Elon Musk
A key transformational leadership trait is establishing a vision an organization can understand and
enthusiastically adopt. Elon Musk had a vision for electric vehicles that withstood early struggles and
near-bankruptcy. Today, Tesla is one of the most valued companies in the world. His understanding of
software also redefined what it means to be a successful car company. He is also one of those rare
individuals to disrupt multiple industries, as Musk's SpaceX has been a leader in helping commercialize
space travel.
Reed Hastings
The co-founder and co-CEO of Netflix helped change entertainment forever with its namesake service
that has established streaming in the industry. Originally, the company shipped DVDs (digital video disc)
for a monthly fee and later transitioned to streaming. Under Hastings's leadership, Netflix grew beyond
being a delivery service to become a major provider of original content. Going a step further, Netflix
developed complex algorithms about viewer consumption to make relevant content recommendations. A
key element of Hastings's leadership has been his belief that the company needed to have the right culture.
After meeting with employees to hear how they thought the company could best operate, he created an
internal culture guide. Later, it was posted publicly online and became a screening tool that helped
dissuade incompatible people from applying to work at Netflix.
3.3.1 Behaviours of the Transformational Leaders
Transformational leaders have a set of distinct characteristics that, in a best-case scenario, build on and
play off one another to create the most effective leadership approach. Those characteristics include the
following:
Embracing change
Transformational leaders embrace change and anticipate the effect it will have on an organization so they
are prepared to handle challenges.
Emotional Intelligence
A willingness to collaborate, empathy and emotional intelligence are key traits of transformational
leaders. In practice, they are self-motivated, resilient, and able to build trust and respect from those around
them.
Adaptability
Transformational leaders in information technology (IT) have the capacity to deal with fast-paced
industry change and deploy complex technologies. They also recognize the implications of how these
changes will affect other technologies, anticipating problems before they arise.
Inspirational team player
pg. 64
Transformational leaders focus on the well-being of employees and the company instead of taking a me-
first approach. When the team succeeds, they celebrate as a team and give credit where credit is due.
Encouraging participation and communication
Transformational leaders take in ideas from all around them -- without judgment or knee-jerk reactions.
They're able to communicate openly and honestly with employees, which, in turn, builds long-lasting
trust.
3.3.2 Attributes of a Transformational Leader
To embody the four “I’s” of transformational leadership, the leader have to develop certain
transformational leadership attributes. These are not innate attributes or characteristics or personality
traits that one is either born with or not.
The following are the seven attributes of a transformational leader.
Openness to New Thinking
Transformational leaders are constantly open to innovation wherever it may arise. They constantly look
for opportunities to do things differently and are always open to new ideas, no matter where those ideas
may present themselves.
Henry Ford famously developed the concept of his car assembly line while visiting a meat-packing plant.
Ford’s open mindset allowed him to see the stepwise disassembly of animal carcasses and envisioned the
process in reverse, changing construction procedures so each worker was responsible for assembling a
single part. Within six years, his company’s output increased from 32,000 to 735,000 cars per year.
Talent for Broadening Minds
Transformational leadership often involves shifting people’s views on how things should work. To do so,
it’s necessary to understand the rationale behind people’s current mind-set and how to shift their thinking.
The transformational leader needs to understand where people are coming from and convince them to
step outside of their comfort zone. This requires two separate skills: empathy and the ability to inspire
confidence.
Commitment to Active Listening
It’s not enough for transformational leaders to request or even inspire ideas. They also need to make their
colleagues and team members feel bold enough to share those ideas. Transformational leaders hear ideas
with an open mind and respond without judgment or finality. They commit to employing active listening
techniques so that their team members feel seen, understood and respected. With these methods in place,
they inspire others to share their thoughts without self-censoring.
pg. 65
Tolerance for Intelligent Risks
No transformation happens without some risk of failure. A transformational leader needs to be willing to
consider those risks and what they might mean for the future of the organization. If the benefits of an idea
outweigh the risks, the leader must be willing to pursue it further if it seems feasible. The leader also has
to recognize when the risk is too great, and a different approach is needed.
Willingness to Accept Responsibility
Any innovator who ventures into uncharted territory must be willing to own the results of doing so, good
or bad. No leader inspires confidence if they demand that others take the fall when an idea fails.
Transformational leaders must assume responsibility for each of their decisions, including green lighting
the ideas of others.
Trust in Team Members
People need autonomy to develop and shape new ideas. The transformational leader understands this and
trusts team members to define their own steps to success. Take Reed Hastings, CEO of Netflix. Hastings
grants unlimited vacation time to Netflix employees as long as performance remains high and the team’s
well-being doesn’t suffer. Netflix’s unlimited vacation policy began in 2003. Just four years later, the
company had developed and launched its industry-disrupting streaming service.
Inspirational Motivation
For innovation to happen, it needs to be part of a team’s culture. The transformational leader needs to
expect creativity from everyone not just one or two “idea people.” The leader’s job is to model universal
creativity and innovation. There needs to be an established expectation that everyone including the leader
will think outside the box, recognizing thoughts and ideas, even when they don’t generate paradigm-
shifting results. Transformational leaders create transformational teams where everyone is an idea person.
pg. 66
3.4 TRANSACTIONAL VERSUS TRANSFORMATIONAL LEADERSHIP
Differences Transactional Leadership Transformational Leadership
Maintains the status quo and focuses Inspires change, innovation, and personal
Focus
on tasks and performance growth
Relies on rewards and punishments Motivates through vision, values, and
Motivation
to motivate followers personal development
Emphasizes a transactional
Transactional Fosters a transformational relationship
exchange between leaders and
Exchange based on trust and mutual respect
followers
Communication Communication is directive and Communication is open, empowering,
Style task-oriented and visionary
Centralized decision-making by Decentralized decision-making,
Decision-Making
leaders involving and empowering followers
Leadership Reactive and responsive to problems Proactive, anticipatory, and strategic
Approach and crises approach to leadership
Creativity and Limited focus on creativity and Encourages creativity, innovation, and
Innovation innovation new ideas
Maintains stability and efficiency in Inspires and transforms individuals and
Leadership Impact
established systems organizations for long-term success
Employee Less emphasis on individual growth Focuses on personal and professional
Development and development growth of followers
Directive and transactional Inspirational and transformational
Leadership Style
leadership style leadership style
3.5.1 Steward Leadership

Initially proposed by Dr. Robert Clinton in 1987, a steward leader is “someone who manages the efficient
use and growth of organizational resources, and leads the staff and activities of the organization as a
steward, to achieve the mission according to the objectives of the owners or stakeholders.” Indeed, the
etymology of the word stewardship is to be a guardian of the home.
Thus, a steward leader operates with a different mind-set to fulfil the needs of different stakeholders and
according to the mission of an organization (or corporate enterprise). Although steward leadership may
benefit from the results of an effective leading style, the most important aspect to consider is the value
pg. 67
that this leadership style brings to the owner. Therefore, to act as a steward leader, a few attributes,
behaviors, and perspectives were considered.
3.5.2 Nature of Steward Leader
Knowing the owner's mind Steward Leaders are empowered by the owners, stakeholders, and
community when leading a project. Indeed they are empowered with a role, resources, and authority. This
means the capability of assuming responsibilities, empathy, and perceiving what the owner expects based
on their goals and resource management. Besides, they can foster a sense of humility and help while
preventing pride from taking over.
Accountability Being responsible for managing projects, a steward leader is accountable for managing
the resources and the operations of an enterprise. Accountability can refer to finances, managing people,
but also the achievement of the mission. Consequently, steward leaders must account for their actions and
outcomes (e.g., to a Board of Directors, the owner, or a large group of stakeholders/shareholders).
A modern way of being a “servant” differently from the past, steward leaders are no longer servants
but “serve” the owner to accomplish a mission and benefit others. Therefore, they are aware that their
role is “time bounded,” and they do not see their position as permanent. Instead, they are ready to leave
their role and pass it to another steward while transiting to another position.
Managing and exploiting resources: besides the interests of business growth, steward leadership also
involves personal development through learning new skills. In addition, this includes mentorship
activities to promote the organization (enterprise, small corporate) culture and the development of team
members. This requires a high responsibility and the capability of exploiting resources. In addition, they
focus on achieving long-term goals while managing short-term needs that will definitely lead to their
moon-shot.
Mentoring others: steward leaders collaborate within a team, and together they are driven by the same
mission and mindset, in which anyone has a role in accomplishing the goals of an organization (enterprise,
small corporate). Furthermore, their positive example guides and mentors, others to become future
stewards.
3.5.3 Framework of Stewardship
Leadership thinking based on stewardship prescribes a relationship between leaders and followers in
which leaders lead without dominating or controlling followers. Leaders who embody the stewardship
concept are sincerely concerned about their followers and assist them to grow, develop, and achieve both
personal and organizational goals. An effective steward leader creates an environment in which everyone
works together as a team to achieve organization Leadership goals. Stewardship is more about facilitating
than actively leading. We suggest four key values that describe stewardship.
pg. 68
Strong Teamwork Orientation
Stewardship works best in situations where self-managed teams of core employees and the leader work
together to formulate goals and strategies for a changing environment and marketplace. Here, the leader's
role is less dominant and more supportive of the process. Where a strong team spirit is absent, a leader
must play a dominant role to push individuals in the right direction. However, this defeats the purpose of
stewardship.
Decentralized Decision Making and Power
Stewardship is realized when authority and decision making or decentralised and brought down to where
work gets done and employees interact with customers. In this environment, stewardship has great chance
to succeed, given the empowered status of employees and the closer relationship between managers and
followers. The absence of this principle makes stewardship inseparable.
Equality Assumption
Stewardship works best when there is perceived equality between leaders and followers. It is a partnership
of equals rather than a leader-follower command structure. The applicability of stewardship is enhanced
as leaders find opportunities to serve rather than manage. Honesty, respect, and mutual trust prevail when
there is equality, and these are values that enhance the success of stewardship.
Reward Assumption
Stewardship puts greater responsibility in the hands of employees. Therefore, to realize successful
stewardship, the organization must redesign the compensation system to match rewards to actual
performance. Employees with more responsibility and authority who are compensated accordingly
flourish under stewardship because they are motivated and committed to the organization's mission.
Without this value, it is hard to sustain stewardship. Stewardship leaders are not known for their great
deeds but for empowering others to achieve great deeds. Stewardship leaders offer the best chance for
organizations to succeed and grow in today's dynamic environment, because these leaders don't just lead,
they coach followers to do the leading. This focus on people is what encourages followers to be more
creative, energetic, and committed to their jobs.
3.5.4 Servant Leadership
While servant leadership is a timeless concept, the phrase “servant leadership” was coined by Robert K.
Greenleaf in The Servant as Leader, an essay that he first published in 1970. “The servant-leader is servant
first… It begins with the natural feeling that one wants to serve, to serve first. Then conscious choice
brings one to aspire to lead. That person is sharply different from one who is leader first, perhaps because
of the need to assuage an unusual power drive or to acquire material possessions…The leader-first and
the servant-first are two extreme types. Between them there are shadings and blends that are part of the
pg. 69
infinite variety of human nature.
A servant-leader focuses primarily on the growth and well-being of people and the communities to which
they belong. While traditional leadership generally involves the accumulation and exercise of power by
one at the “top of the pyramid,” servant leadership is different. The servant-leader shares power, puts the
needs of others first and helps people develop and perform as highly as possible.
3.5.5 Principles of Servant Leadership
Robert K. Greenleaf established 10 principles of servant leadership. The former president of the Robert
K. Greenleaf Center for Servant Leadership, Larry C. Spears, breaks down these 10 principles as follows.
Listening: It’s important to fully listen to members of the team without interrupting.
Empathy: It’s important to get to know your team so that you can use empathetic leadership to help them
grow.
Healing: Members of your team may have trauma from previous toxic work experiences. Help others to
create a healthy work-life balance to give them the space to heal.
Self-awareness: A servant leader must also recognize their own strengths and weaknesses. This is to
understand how they fit within the overall team.
Persuasion: Servant leaders can use persuasion and influence instead of just power to get team members
to be on the same page.
Conceptualization: Servant leaders need to be able to use big-picture thinking. With this, they can
conceptualize plans for their team and their organization.
Foresight: It’s important to use what you and your team learn to improve in the future.
Stewardship: Lead by example so that your team can do what you do, not just do what you say.
Commitment to the growth of people: You need to allocate time and resources to help people and teams
grow. Tools like organizational training, development programs, and growth and transformation coaching
can help.
Building community: Servant leadership requires building relationships between co-workers. As a
result, team members learn to trust each other and become more productive.
3.5.6 Nature of Servant Leadership
1. Being an example humility, authenticity, and trust
Humility must be the foundation of your leadership. If you speak out of superiority and power, your
subordinates will do what you say out of fear. Instead, your actions and words should be a credible
and genuine model to follow.
pg. 70
2. Showing why the work is essential awareness and purpose
In the mechanism of a clock, each part is crucial. The same goes for any team. Each employee is
essential to the team’s operation. Making sure this message reaches employees can increase their
motivation. It can also enhance their performance. One way to do this is by talking explicitly about
the downstream impact of their work. You can show them the impact both inside the company and
out. Talk less about numbers and metrics and more about the person or people who’ll use and build
on what they’ve done. Always link their specific achievements to wider organizational goals. This
fosters a deeper connection to the company’s mission. Most importantly, recognize the good work
they are doing. Many workers consider recognition of their achievements to be the most important
aspect of a role.
3. Encouraging collaboration community building and commitment
As a servant leader, you’re the engine that generates a sense of community and teamwork.
Increase collaboration by encouraging employee commitment to each other. You can also encourage
them to delegate responsibility. Finally, you can involve team members in decision-making
processes.
For example, ask them what they’d like to do on that new project or how they think they can add
value to their work. The key here is to be patient and take the time to do this. It can be so tempting
in today’s busy world to just get through the day without caring for your employees and their needs
but servant leaders are different.
4. Supporting the team's growth and development foresight and resourcefulness
Identifying and anticipating the needs of employees is a major aspect of the servant leader’s role.
For example, when assigning project duties to each team member, make sure you provide the
resources or the ability to procure them. Act from a service-first mind-set, and you’ll truly empower
them to accomplish their tasks.
pg. 71
5. Caring for the members of the team empathy and compassion
Similarly, the servant leader will cultivate a friendly environment. In this environment, employees
should feel comfortable. They shouldn’t feel threatened by expressing specific complaints or asking
questions.
In this context, it seems especially important to favour empathy and understanding. For example,
when your employee comes to you with a complaint about a co-worker, you don’t dismiss it because
you’re busy. You take the time to help them work through the conflict and ultimately resolve it.
You’re compassionate.
6. Asking for feedback listening skills
Promote a sufficient level of relationship with the employee that favors active and close listening.
A servant leader asks open-ended and follow-up questions as a matter of course, not just when
something’s wrong. They’re receptive to feedback they don’t just give it.
3.5.7 Framework of Servant Leadership
Servant leaders approach leadership from a strong moral standpoint. The servant leader operates
from the viewpoint that we all have a moral duty to one another. Servant leadership emphasizes
fairness and justice as means for achieving productive organizational citizenship behavior. The
servant leader sees leadership as an opportunity to serve at the ground lev el, not to lead from the
top. An individual like Mother Teresa-through her humble and ordinary nature, strong moral values,
and dedicated service to the poor inspired hundreds of followers to join her order and emulate her
example. The framework for servant leadership consists of the following basic guidelines.
Helping Others Discover Their Inner Spirit

The servant leader’s role is to help followers discover the strength of their inner potential to make a
difference. This requires servant leaders to e empathetic to the circumstances of others. Servant leaders
are not afraid to show their vulnerabilities.
Earning and Keeping Others' Trust
Sevant leaders earn followers' trust by being honest and true to their word. They don't have any hidden
agendas, and they are willing to give up power, rewards, recognition, and control.
pg. 72
Service over Self-Interest
The hallmark of servant leadership is the desire to help others, rather than the desire to attain power and
control over others. Doing what's right for other takes precedence over protecting one's position. Such
leaders make decisions to further the good of the group rather than their own interests.
Effective Listening
Servant leaders do not impose their will on the group; rather, they listen carefully to the problems others
are facing and then engage the group to find the best course of action. Servant leaders are more likely to
express confidence and commitment in others than other types of leaders.
3.6 Terminal Questions
Section A
1. Contrast the charismatic and transformational leaders with examples.
2. Dissect Charisma and Charismatic Leadership.
3. Simply your interpretation with providing the five Famous Charismatic Leaders from History.
4. Question the attributes of a Transformational Leader.
5. Examine the framework of Servant Leadership.
Section B
1. Differentiation of Charismatic Leadership and Other Leadership Styles
2. Compare the Transformational Leadership Versus Transactional Leadership
3. Test the Four “I’s” of transformational leadership
pg. 73
MODULE - 4: TEAM LEADERSHIP
Structure
4.1 Introduction
4.2 Use of Teams in Organisation
4.3 Groups versus Teams
4.4 Advantages & Disadvantages of Teamwork
4.5 Characteristics of Effective Team
4.6 Types of Teams
4.7 Decision making in Teams
4.8 Leadership skills for Effective Team Meetings
4.9 Conducting Meetings
4.10 Summary
4.11 Questions
pg. 74
4.1 Introduction
The focus of this chapter is on how organisations can develop and use effective teams to achieve
organisational goals. We will explore the importance of incorporating teams into the organization's
structure and the different types of teams commonly found in organizations. Decision making in teams
and leadership skills for conducting effective team meetings is addressed. The chapter concludes with a
discussion of self-managed teams.
In the dynamic landscape of today's organizations, the concept of teams has evolved from a conventional
work structure to a strategic imperative. This introduction sets the stage for understanding the essence of
teams, their significance, and the transformative impact they wield within the fabric of modern
workplaces.
Defining Teams in Organizations
A team, in the organizational context, is more than just a group of individuals assigned to a common task.
It represents a dynamic synergy, a collective entity where members bring together diverse skills,
knowledge, and perspectives to collaboratively achieve shared objectives. Teams serve as the building
blocks of an organization's capacity for innovation, problem-solving, and adaptability.
4.2 Use of Teams in Organizations
Teamwork is a way of life in the postmodern organization. Early discussions of the concept came from
post-World War II Japanese management approaches, and led to greater academic scrutiny in the human
relations movement before being embraced by major U.S. corporations. Through the years, many studies
have documented the importance of teams for achieving organizational success. The basic premise of
teamwork is that teams offer the best opportunity for better corporate performance in the form of increased
productivity and profits. In other words, the synergistic benefits of teamwork are such that members of a
team working cooperatively with one another can achieve more than working independently.
Since the early 1990s, various studies have reported greater numbers of U.S. corporations using teams to
accomplish organizational tasks. The rea sons for this trend are obvious. Many companies, large and
pg. 75
small, face serious challenges from a dynamic and complex global economy-challenges that have put in
question the effectiveness of traditional management methods. Some of these challenges include growing
demands from customers for better quality products and services at lower prices, globalization,
technological advances, and pressure from competitors and suppliers. More than ever before, teams are
now an integral part of the workplace. One recent survey found that companies of all sizes rely on teams
to accomplish various business goals. According to some estimates, over 50 percent of all organizations
and 80 percent of organizations with more than 100 employees use some form of teams. Many
organizations have reengineered their work processes and procedures to accommodate teams. The
thinking behind the team approach is that teams form the basic unit of empowerment-large enough for
the collective strength and synergy of diverse talents and small enough for effective participation and
bonding.
Generally, research has been encouraging, showing that the use of teams has led to desirable performance
improvements for many organizations in a variety of industries, although teams have also not worked so
well in some cases. Some of the performance indicators include improved productivity, quality,
efficiency, employee satisfaction, and customer satisfaction. One study cites several examples of
organizational successes using teams:
• A large stamping plant created empowered maintenance teams that took it upon themselves to
improve the functionality of specific machines in the operation, for both preventive and rapid
response maintenance, resulting in a 28 percent reduction in machine downtime.
• Using self-managed teams, an appliance manufacturing plant increased

productivity by 22 percent.
• A large warehousing operation reduced the procurement cycle time by a full day through the
creation of an operational improvement team that by the full backing of top management.
• By creating and empowering a new safety team, a mid-sized furniture factory reduced lost time
for on-the-job injuries by 30 percent.
pg. 76
OPENING CASE APPLICATION
Why Has Saturn's Success with Teamwork and Customer Satisfaction Not Resulted in Financial Success
So Far? Saturn's mission and values statements focus on teamwork, operational excellence, and
innovation. Teamwork at Saturn has succeeded in many ways. It has tremendous brand equity in that
many of its customers are loyal to the brand. Saturn's conquest rate is 70 percent, which is its ability to
attract new buyers to GM-both import intenders and non-GM domestic buyers. Its demographic is
terrific: A Saturn owner is most likely a highly educated, affluent, 43-year-old and likely to be a
professional. With strong brand loyalty among its customers and more than 2.2 million cars sold, Saturn
attributes its success to two basic reasons: putting customers first and working as a team. The problem
has been with its parent company, GM. Lack of investment meant the portfolio did not grow and the
product didn't evolve. Saturn survived with only one vehicle for 10 straight years. Saturn's 2004 sales
dropped 21.8 percent to 2,12,017 units-the lowest level since 1992-from 2003, according to Autodata
Corp. GM blamed the sharp drop on the discontinuation of the midsize L-series last summer. Ultimately,
the automaker committed last summer to dig deep into its corporate kitty and make one more big push to
turn Saturn into a healthy brand that delivers cars and SUVs to match its sales and service quality. In all,
GM plans to spend $3 billion to double Saturn's product line to six models by the end of 2006. Last
summer, GM's board of directors approved a $400 million to $500 million investment to upgrade a Spring
Hill, Tennessee assembly plant to build new models.
However, not all team efforts have resulted in success. The use of teams has resulted in such negative
outcomes as increased costs, stress, and lower group cohesion. It is for this reason that some in the field
are calling for a "look before you leap" mentality. It is recommended that an organization ask critical
questions of itself before embarking on creating teams within its structure, such as whether teams will
diffuse important organizational capabilities, how much infrastructure realignment will be required,
whether leaders will embrace the team concept and change their styles to suit, whether teams can carry
out tasks previously performed by support departments, and how difficult it will be to develop teams'
problem-solving capabilities. Also, teams have failed for lack of training. Effective team training has been
found to improve collective efficacy and team performance. These issues will be addressed throughout
this chapter. This section will define what a team is, distinguish between the concept of a team and a
group, and examine the advantages and disadvantages of using teams.
pg. 77
4.3 Groups versus Teams: What Is the Difference?
All teams are groups, but not all groups are teams. A manager can put together a group of people and
never build a team. A team is a unit of two or more people with complementary skills who are committed
to a common purpose and set of performance goals and to common expectations, for which they hold
themselves accountable. This definition contains three key points to remember First, teams are made up
of two or more people. Teams can be large, but most tend to be small, with fewer than 15 people. Second,
a team is not just a group of individuals brought together at random. A team is made up of individuals
with complementary skills. Third, people in a team share common goals for which they are all
accountable. The goal could be to build a home, design a network system, or launch a space shuttle. Given
this background, it would appear that the terms "team" and "group" are not interchangeable, though
some authors have not distinguished between them. A group is simply a collection of people working
together. Extensive research in the workplace has confirmed that there do indeed exist some differences
between teams and groups. The team concept implies a sense of shared mission and collective
responsibility. Whereas groups focus on individual performance and goals, and reliance on individual
abilities, teams have a collective mentality that focuses on (1) sharing information, insights, and
perspectives; (2) making decisions that support each individual to do his or her own job better; and/or (3)
reinforcing each other's individual performance standards. Team members tend to have shared
responsibilities, whereas group members sometimes work slightly more independently with greater
motivation to achieve personal goals. The leadership style in a group tends to be very hierarchical, while
in a team it is more likely to be participative or empowerment-oriented. In a team, performance measures
create direct accountability for the team and incentives are team-based; in contrast, a group is
characterized by individual self-interest, with a mentality of "what's in it for me." Teams strive for equality
between members; in the best teams, there are no stars, and everyone suppresses individual ego for the
good of the whole. It is important to bear in mind that these distinctions probably reflect matters of degree.
One might consider teams to be highly specialized groups. In this chapter, the two terms will be used
interchangeably.
pg. 78
Aspect Groups Teams
Collection of individuals with a Cohesive unit of individuals working

Definition common purpose. collaboratively towards shared objectives.
Collective performance and achieving

Focus Individual contributions. common goals.
Accountability Individual accountability. Collective accountability.
Limited interdependence; tasks are Strong interdependence; success relies on

Interdependence often independent. effective collaboration.
Loosely defined roles; informal Well-defined roles; clear structure with

Roles and Structure structure. designated leadership roles.
Communication and Sporadic and task-oriented Frequent, open, and collaborative

Interaction communication. communication.
May share information or Formed with a specific purpose or project in

coordinate efforts without a mind; collective achievement beyond
Purpose and Outcome specific collective goal. individual contributions.
4.4 Advantages and Disadvantages of teamwork
Teamwork is an understanding and commitment to group goals on the part of all team members. The
increased acceptance and use of teams suggests that their usage offers many advantages. However, teams
also present organizations with many challenges, including the need for effective communication;
resolving personality conflicts and egos; establishing unifying goals, direction, and focus; establishing
appropriate rewards and incentives; clarity about team structure; effective leadership; and organizing the
team's work to ensure timely decisions. Failure to effectively handle these challenges often results in
dysfunctional teams, which means there are disadvantages that come with using teams in organizations.
This section discusses several of the advantages and disadvantages of teamwork.
Advantages of Teamwork
First, in a team situation it is possible to achieve synergy, whereby the team's total output exceeds the
sum of the various members' contributions. Synergy involves the creative cooperation of people working
pg. 79
together to achieve something beyond the capacities of individuals working alone. Second, team
members often evaluate one another's thinking, so the team is likely to avoid major errors. This tendency
of mutual support and peer review of ideas helps teams make better decisions and can provide immunity
for an organization against disruptive surprises. Third, teams can and do contribute well to continuous
improvement and innovation. For example, a number of companies worldwide have found that self-
managed teams create a work environment that encourages people to become self-motivated. Besides
speeding up decision making and innovation, team members report greater satisfaction with their jobs.
Job satisfaction is important because it has, in turn, been associated with other positive organizational
outcomes. For example, employees who are satisfied with their jobs are less likely to quit, are absent less,
and are more likely to display organizational citizenship behavior. Finally, being a member of a team
makes it possible to satisfy more needs than if one worked alone; among these are the needs for affiliation,
security, self-esteem, and self-fulfilment. Team members develop trust for each other and come to see the
team as a social unit that fulfils other needs. Research does provide support for the proposition that
people's perceptions of their own interdependence with others (such as in a team) influence both their
beliefs about group members' trustworthiness and their attitude toward group members. Thus,
interpersonal trust is seen as an important social resource that can facilitate cooperation and enable
coordinated social interactions. This adds to team member commitment and motivation. There is ample
research support for the position that employees who are more committed are less likely to leave their
jobs, less likely to experience stress, and more likely to perform well and behave pro-socially.
Teamwork offers a multitude of advantages in various contexts, whether it's within an organization, in
academic settings, or in other collaborative environments. The advantages of teamwork are:
1. Diverse Perspectives and Skills:
• Advantage: Teams bring together individuals with diverse backgrounds, experiences, and
skills.
• Benefit: This diversity fosters a broader range of perspectives and expertise, leading to
more creative problem-solving and innovative solutions.
2. Enhanced Problem-Solving:
• Advantage: Teams encourage collective brainstorming and analysis.
• Benefit: Multiple minds working together can identify and solve problems more
efficiently, leveraging the combined knowledge and skills of team members.
3. Increased Efficiency:
pg. 80
• Advantage: Dividing tasks among team members allows for simultaneous progress.
• Benefit: This parallel processing often leads to faster and more efficient completion of
projects and tasks compared to individual efforts.
4. Improved Decision-Making:
• Advantage: Teams can make more informed decisions through group discussions.
• Benefit: Combining different viewpoints and expertise helps in evaluating various
options, reducing the risk of biased or incomplete decisions.
5. Enhanced Learning and Skill Development:
• Advantage: Team members can learn from each other's experiences and expertise.
• Benefit: Collaboration facilitates continuous learning, skill-sharing, and professional
development among team members.
6. Increased Motivation and Job Satisfaction:
• Advantage: Working collaboratively can foster a sense of shared responsibility and
accomplishment.
• Benefit: Team members often experience higher motivation and job satisfaction due to
shared successes and a supportive team environment.
7. Better Communication:
• Advantage: Regular team interactions improve communication skills.
• Benefit: Clear communication within teams helps in avoiding misunderstandings,
enhances coordination, and ensures everyone is on the same page.
8. Adaptability and Flexibility:
• Advantage: Teams are often more adaptable to changes in tasks or project requirements.
• Benefit: The flexibility of teams allows for a quick response to unexpected challenges and
promotes resilience in the face of uncertainties.
9. Increased Innovation:
• Advantage: Collaborative environments foster creativity.
• Benefit: Teams are more likely to generate innovative ideas and solutions as members
build on each other's thoughts and perspectives.
10. Social Support and Team Bonding:
• Advantage: Teams provide a social support system within the workplace.
• Benefit: Team members often develop strong bonds, creating a positive work environment
and contributing to overall employee well-being.
pg. 81
In summary, teamwork can lead to improved outcomes, higher efficiency, and a more positive work
environment. The advantages of teamwork extend beyond the completion of tasks and projects, positively
impacting the professional growth and job satisfaction of individuals involved.
Disadvantages of Teamwork
Teamwork has some potential disadvantages for both organizations and individuals. A common problem
may be that members face pressure to conform to group standards of performance and conduct. For
example, a team member may be ostracized for being much more productive than his or her coworkers.
Also, there are situations in which working in teams is perceived by some individuals to impinge on their
autonomy, thus creating resistance to the team effort. Shirking of individual responsibility, also known
as social loafing, is another problem frequently noted in groups. Social loafing is the conscious or
unconscious tendency by some team members to shirk responsibilities by withholding effort towards
group goals when they are not individually accountable for their work. Many students who have worked
on team projects (like group term papers) have encountered a social loafer. Social loafing is likely to
result when individual effort is not recognized and assessed. Individual performance appraisal helps to
discourage social loafing by providing each team member with feedback on the quality of his or her work;
however, it goes against the popular view that implementing team-based performance measures is
necessary for a strong team identity, and a strong team identity leads to greater coordination. In other
words, individual-level performance appraisal helps reduce social loafing, but it risks jeopardizing the
interaction and synergy that characterizes excellent team performance.
Another well-known disadvantage associated with highly cohesive groups or teams is groupthink.
Groupthink is when members of a cohesive group tend to agree on a decision not on the basis of its merit
but because they are test willing to risk rejection for questioning a majority viewpoint or presenting s
dissenting opinion. The group culture values getting along more than getting things done. The group often
becomes more concerned with striving for unanimity than with objectively appraising different courses
of action. Dissenting views are suppressed in favour of consensus. These problems may explain why
some studies have not found consistent support for the strong belief in the effectiveness of teams. Some
scholars have argued that our "romance of teams" stems from the psychological benefits members derive
rather than the assumed link to high performance. The problem of groupthink can be remedied by training
team members to become effective participants in the decision-making process-something that is taken
for granted when a team is formed.
pg. 82
Though cohesiveness is a desirable quality of teams, teams that are extremely cohesive can also become,
at their worst, a source of conflict with other teams. They may become so cohesive that they resemble
cliques with minimal outside interaction or influence, thus creating the potential for significant intergroup
conflicts. There is pressure for workers to stand by their teammates and to achieve the team's goals. A
production team might devote significant energy to creating problems for the marketing team because the
latter requires constant changes in product designs that production finds impossible or difficult to meet.
From a leadership standpoint, effective team leaders find ways to maximize the advantages of teams and
to minimize the disadvantages of teams. Complete Self-Assessment 1 to evaluate teamwork from your
own work experience.
While teamwork offers numerous benefits, it also presents certain challenges and disadvantages that
individuals and organizations should be aware of. The disadvantages of teamwork are:
1. Conflict and Disagreements:
• Disadvantage: Differences in opinions, working styles, or personalities can lead to
conflicts within teams.
• Impact: Unresolved conflicts can disrupt team dynamics, decrease morale, and hinder
productivity.
2. Coordination Challenges:
• Disadvantage: Coordinating the efforts of multiple team members can be challenging,
especially in large or geographically dispersed teams.
• Impact: Poor coordination may result in delays, duplication of efforts, or inconsistencies
in work quality.
3. Free-Riding and Social Loafing:
• Disadvantage: Some team members may contribute less effort or rely on others to carry
the workload, a phenomenon known as free-riding or social loafing.
• Impact: Free-riding can lead to resentment among team members, unequal distribution of
work, and decreased overall team performance.
4. Groupthink:
• Disadvantage: Groupthink occurs when team members prioritize consensus and harmony
over critical thinking and dissent.
• Impact: Groupthink can stifle creativity, hinder innovation, and lead to poor decision-
making as alternative viewpoints are not adequately considered.
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5. Unequal Participation:
• Disadvantage: Not all team members may contribute equally to team tasks and
discussions.
• Impact: Unequal participation can create feelings of frustration, resentment, and
dissatisfaction among team members, leading to a breakdown in collaboration.
6. Dependency on Group Consensus:
• Disadvantage: Relying too heavily on group consensus can delay decision-making and
impede progress.
• Impact: In situations where quick decisions are required, consensus-building processes
may be time-consuming and inefficient, affecting overall productivity.
7. Loss of Individual Autonomy:
• Disadvantage: Teamwork often requires individuals to compromise on their autonomy
and decision-making authority.
• Impact: Some team members may feel constrained or disempowered, leading to decreased
job satisfaction and motivation.
8. Difficulty in Managing Conflicting Priorities:
• Disadvantage: Team members may have conflicting priorities or competing agendas.
• Impact: Balancing individual and team goals can be challenging, potentially resulting in
inefficiencies and tensions within the team.
9. Group Polarization:
• Disadvantage: Group discussions and interactions can reinforce extreme opinions or
attitudes, leading to polarization.
• Impact: Group polarization can escalate conflicts, reduce openness to alternative
viewpoints, and hinder constructive dialogue within the team.
10. Over-reliance on Group Decision-Making:
• Disadvantage: Teams may rely too heavily on group decision-making processes,
overlooking the expertise and insights of individual members.
• Impact: Individual contributions may be undervalued, leading to missed opportunities for
innovation and problem-solving.
In conclusion, while teamwork offers many benefits, it is essential for teams and organizations to be
mindful of the potential disadvantages and actively work to address them. Effective communication,
conflict resolution strategies, and fostering a culture of accountability can help mitigate the challenges
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associated with teamwork.
4.5 Characteristics of Effective Teams
Effective teams are those that meet their performance targets, such as quality, productivity, profitability,
worker satisfaction and commitment, and deadlines. Thus, team effectiveness is defined as having three
components: (1) task performance-the degree to which the team's output (product or service) meets the
needs and expectations of those who use it; (2) group process-the degree to which members interact or
relate in ways that allow the team to work increasingly well together over time; and (3) individual
satisfaction- the degree to which the group experience, on balance, is more satisfying than frustrating to
team members. This definition embodies a number of performances out-comes that others have used as a
basis for evaluating team effectiveness. These include innovation/adaptation, efficiency, quality, and
employee satisfaction. Innovative or adaptive teams are those with the capability to rapidly respond to
environmental needs and changes with creative solutions. Efficient teams enable the organization to attain
goals with fewer resources. Quality pertains to the team's ability to achieve superior results with fewer
resources, and exceed customer expectations. Satisfaction measures the team's ability to maintain
employee commitment to and enthusiasm for the team effort by meeting not just the team's goals but also
the personal needs of its members.
Teams vary in terms of their effectiveness. Some are effective and some are not. The obvious question
therefore becomes, what makes one team successful and another unsuccessful? Much of the literature
portrays team effectiveness as a function of both internal and external factors: task, group, and
organization design factors; environmental factors; internal and external processes; and group
psychosocial characteristics. Other scholars have focused on internal team processes: self-leadership,
interdependence, and team cohesion (also referred to as group potency). One model examined three
contextual factors- team design, organizational resources and rewards, and process assistance-as
determinants of team effectiveness. We believe organizational context, as well as internal team processes,
are contributing factors to determining team effectiveness. Understanding what makes teams effective is
of obvious importance to organizational leaders. In this section, the following six factors are described as
critical to team effectiveness: team norms, team leadership, team cohesiveness and interdependence, team
composition, team structure, and organizational support.
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i. Team Norms
Team norms are an important characteristic of effective teams because norms guide team members'
behavior. Norms determine what behavior is acceptable and unacceptable. Team norms are acceptable
standards of behavior that are shared by team members. Norms influence how a team's members perceive
and interact with one another, approach decisions, and solve problems. An effective team must possess
an appropriate set of norms that govern all members' behavior. A team's norms will influence how
members perceive and interact with one another, approach decisions, and resolve problems such as
conflict. For example, a team norm might specify cooperative over independent behavior; to the outside
observer, this may be reflected by the level of importance members place on shared pursuits, objectives,
and mutual interests rather than personal interests.
At the early stages of a team's formation, norms begin to develop and often gain acceptance and
significance in every team member's work life. Team leaders can play a major role in helping to shape
norms that will help the team successfully realize its goals and also keep members satisfied and committed
to the team. There are many ways by which team norms get formed; the two most common are critical
events and symbols. Norms often emerge out of critical events in the team's history and way(s) in which
team members responded. This sets a precedent and becomes the standard for future behavior.
ii. Team Leadership
Although an important goal of a team-based organization is for group members to participate in leadership
(such as is the case with self-managed teams or semiautonomous work teams), leaders still play an
important role in influencing team performance. Effective team leaders encourage norms that positively
affect the team's goals and alter those that are negative. The need for leadership still exists, because in
every work group someone will ultimately be responsible for the outcome. Instead of the leader's job
disappearing, leaders will learn to lead in new ways. To be an effective team leader requires a shift in
mind-set and behavior for those who are accustomed to working in traditional organizations in which
managers make all the decisions. Team-based organizations need leaders who are knowledgeable in the
team process and are capable of developing a productive and effective team. If they are to have satisfied,
productive, and loyal team members, team leaders must recognize that not everyone knows how to be a
team player. Some team members will look to the team leader to put together a game plan and lead the
team to success. The team leader must model the behavior that he or she desires. In order to foster the
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development of team spirit, leaders should observe with a keen eye what's going on in the team, make
contributions, when necessary, encourage a climate of dialogue, turn obstacles into opportunities, and see
themselves and others as part of the team's pool of knowledge, skills, and ideas. Therefore, an effective
team leader must be adaptive, knowing when to play different roles manager, facilitator, or coach.
Being an effective team leader means understanding people. This is also referred to as having social skills.
According to one study, there are four dimensions that determine whether an individual has high or
low social skills: influence, interpersonal facilitation, relational creativity, and team leadership.
Leaders with high social skills tend to have greater influencing abilities and interpersonal skills, and relate
well with team members. Without effective leadership, teams can get off course, go too far or not far
enough, lose sight of their mission, and become blocked by interpersonal conflict. Therefore, team leaders
have an important personal role to play in building effective teams. A leader's self-sacrificing behavior
and display of self-confidence does influence team members. Self-sacrificing leaders are those who go
above and beyond What's expected of them. They don't just issue orders; they get involved in making
things happen. The results of a laboratory experiment revealed that productivity levels, effectiveness
ratings, and perceived leader group-orientedness and charisma were positively affected by leader self-
sacrifice.
iii. Team Cohesiveness and Interdependence
Effective teams typically have high levels of cohesion, interdependence, and autonomy. Team cohesion
is the extent to which members band together and remain committed to achieving team goals. Highly
cohesive teams are also described as having high group potency (the collective belief of a group that it
can be effective) and a strong self-efficacy (an internal belief held by an individual or group about how
well an impending situation can be handled). Studies investigating the relationship between team potency
and team effectiveness have found the two to be strongly correlated. Some of the factors that have been
found to increase team cohesion include shared purpose and goals, team reputation for success, inter-team
competition, and personal attraction to the team. Team cohesion is increased when:
• Team members agree on a common purpose and direction.

• There is high praise and recognition by external parties for the team's success.
• The organization encourages and motivates teams to compete with each other for rewards.
• Members find they have common ground and similar attitudes and values and enjoy being on the
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team.
The presence of all these factors has been shown to have strong correlations with team member
satisfaction and commitment. Teams experiencing cohesion are less likely to engage in affective
disagreement and more likely to remain together longer and to make more effective decisions.
The degree to which team members depend on each other for information, resources, and other inputs to
complete their tasks determines the level of interdependence or mutual influences within the team.45 In
effective teams, interdependence is built into the team's goal, reward, and job structure. Among teams,
three types of interdependence have been identified: pooled, sequential, and reciprocal
interdependence. Without describing each type in detail, it should be noted that the level of team member
interaction and dependency increases successively as one goes from pooled, to sequential, to reciprocal
interdependence.
iv. Team Composition
Team composition focuses on the characteristics of team members. Effective teams must have the right
mix of complementary skills, knowledge, and ability to perform the team's job. Recognizing the
heterogeneous nature of today's workforce, organizational researchers have increasingly focused on teams
with multicultural, multifunctional, and multinational characteristics. According to one study, there are
three fundamental descriptors of team members- multifunctional knowledge, teamwork skills, and an
established good working relationship. To have a good working relationship requires high social skills.
According to one study, four dimensions determine an individual's level of social skills-influence,
interpersonal facilitation, relational creativity, and team leadership. These factors result in more effective
and efficient teams. Also, team diversity in skills, backgrounds, and perspectives increases creativity
because members bring diverse points of view to bear on problems. In general, there is a perception that
heterogeneous teams outperform homogeneous teams. Another benefit of diversity is the reduced
likelihood of groupthink because of greater opportunities for differing points of view. Groupthink, as
described earlier, is the tendency for members of cohesive teams to agree on a decision not on the basis
of its merit, but because they don't want to disagree with fellow teammates and risk rejection. However,
it should be noted that not all diverse teams perform well. Diversity, when not well managed, has
produced negative consequences. Teams that do not manage diversity well may suffer from intrateam
conflicts, lack of communication, an absence of collegiality, and ultimately lack of any team spirit.
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v. Team Structure
Team structure refers to interrelations that determine the allocation of tasks, responsibilities, and
authority. In other words, team structure may explain the hierarchical dynamics within the team. Also,
interdependence and autonomy have been identified as key structural components that influence team
effectiveness. Teams that possess high autonomy, broad participation in team decisions, and variety in
tasks performed by individual members, are said to have motivational job design characteristics. Team
structure will also determine the extent to which team members directly control the actions of each other
(horizontal incentive system) or report observations of their peers' efforts to management (vertical
incentive system). According to one study, team structures that allow for horizontal incentive systems
show higher levels of team identity and coordination than team structures that insist on vertical incentive
systems. When teams perceive their tasks as motivating, they are generally more effective.
vi. Organizational Support
Effective teams are those that have the strong support of the parent organization, that is, support from the
top of the organization. Assessing team effectiveness as it relates to the overall performance of the
organization is an important part of top management responsibility. When teams are not achieving
expected results, top management must ask itself some key questions. First, do the teams fully understand
their mission? Second, are teams getting enough support from top management in the form of training,
rewards, information, and material resources that they need? Third, have the appropriate leadership,
communication, and task structures been set up for team operations? And, finally, does the organizational
culture/environment support teamwork and have reward programs that motivate and reinforce team
behavior? These questions address the role of the organization in providing an infrastructure that supports
effective teamwork.
vii. Creativity Driven
Effective teams are also characterized by higher levels of creativity. Team creativity is the creation of a
valuable, useful, and novel product, service, idea, procedure, or process carried out via discovery rather
than a predetermined step-by-step procedure, by individuals working together in a complex social system.
Today's economy has been rightly described as a knowledge economy because more companies are
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gaining competitive advantages based on knowledge rather than physical or financial resources. The
companies that will survive and thrive will not be those that have the greatest financial resources, but
those that can make use of the creativity of their workforce. Besides the quality of the team itself, research
reveals that a number of enabling factors- team autonomy, performance measurement and incentive
systems, team bonuses, team continuity, a stable team composition, and sufficient resource endowment-
can assist in improving team knowledge management and thus creativity. These are the factors that
directly bear on the role that top leaders at the higher levels of the organization must play in designing
teams that exemplify creativity. For teams to maximize their creative potential, the organization must
rethink its work structures and leadership approaches. Creating an organizational structure and climate
that supports and encourages creativity provides the backdrop against which managerial practices can
take hold. With- out the appropriate organizational support, individual managerial attempts at
encouraging and fostering creativity will be ineffective and unsuccessful. The suggestions that follow are
ways by which an organization can make known its position on creativity throughout the organization.
• Provide adequate and quality resources- To achieve superior quality, teams need not just
adequate but also quality resources and state-of-the-art equipment. In allocating scarce resources,
top management has to make this a priority if it intends to stay innovative.
• Provide appropriate recognition and rewards- Organizations should be aware of the effect
various types of incentives or rewards can have on creativity; certain types of motivation are more
conducive to creativity than others. Research has shown that people tend to generate more creative
solutions when they are motivated by intrinsic (i.e., sense of accomplishment) as well as (or more
than) extrinsic (i.e., pay) rewards. To foster creativity, an organization and its leaders must find
the right balance of intrinsic-to-extrinsic rewards for team members because, despite the high
intrinsic motivation of creative teams, they also need extrinsic motivation.
• Provide flexibility and a minimum amount of structure- Many creative workers (whether in
teams or as individuals) regard the tall hierarchical structure as the death knell of creativity.
Structure for creative teams means rules and regulations, many layers of approval, strict dress
codes, fixed office hours, and rigid assignments. The organization must strive to provide greater
flexibility and a more decentralized, organic structure for creativity to take place. Some call this
organizational empowerment, which is the recognition that an untapped potential for creativity
exists in your employees and all you need to do is give them the opportunity to realize it.
pg. 90
Organizations can facilitate this process by creating a culture of empowerment that replaces
hierarchical thinking with self-managed teams.
• Provide supportive climate and culture- Employees need to be able to experiment and try out
their ideas. The organization can establish a culture in which team leaders can give members free
time for activities that are not officially sanctioned. One study of creativity found that in almost
every case the essence of the creative act came during the "unofficial" time period. One of the
best-known results of this practice is 3M's Post-it Notes, one of the five most popular 3M products
and one that resulted from an engineer's free-time experiments with another engineer's "failure"-
a not-very-sticky glue. 3M lets employees spend 15 percent of their time (also known as the 15
percent rule) on any projects of their own choosing, without management approval.
It should also be understood that a team leader's actions can support or kill creativity within the team
despite the organization's best intentions. Just because senior management establishes supportive policies
and practices does not mean that they will automatically be implemented at the team level. That's why it
is still important to emphasize team leader responsibilities, which must be carefully executed for creativity
to flourish. As mentioned earlier, a distinguishing characteristic of effective teams is the quality and
personality of the team leader. With respect to the role of the team leader in fostering creativity,
researchers have identified specific actions that can ensure that a creative team spirit is not squashed,
including: matching people with the right assignments; giving team members greater autonomy to do the
job; ensuring the availability of adequate time, money, and other resources for the team; paying careful
attention to the design of teams; emphasizing teamwork; and protecting against "creativity blockers,
While this list is not exhaustive, it highlights many the operational decisions and actions team leaders
have to make or take into account to fully realize their team's creative potential.
4.6 Types of Teams
Structural metamorphosis seems to be the one constant in organizational life today. Traditional
organizational structures, known for their stable designs, are changing in favor of more fluid designs that
can respond to external environmental trends. These flexible designs include a flatter and more
horizontal structure, a focus on new ways to motivate employees, and the use of teams instead of
functional structures. A manufacturing enterprise might, for example, make use of a variety of teams,
including quality improvement teams, problem-solving teams, self-managed productive teams, cross-
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functional teams, technology integration teams, virtual cross-functional teams, and safety teams. Over the
years, increasing competition stemming from the global and technological nature of markets has forced
organizations to adopt different team pes, going from functional teams to cross-functional teams and then
to self-managed teams. We will examine all three types in this section.
i. Functional Team
A functional team consists of a group of employees belonging to the same functional department, such as
marketing, R&D, production, human resources, or information systems, who have a common objective.
One hundred years ago, Frederick Taylor, called the "father of scientific management," espoused a
leadership approach whereby managers made themselves functional experts, divided work processes into
simple repetitive tasks, and treated workers as interchangeable parts. The functional team was mostly
made up of the functional manager and a small group of frontline employees within that department. Over
time, the drawbacks of this approach became evident, as workers suffered from boredom due to the
repetitive nature of their jobs. The structure of the functional team is generally more hierarchical with the
functional leader making all the decisions and expecting his or her followers to implement them. Another
drawback of the functional team, though unintended, is the tendency for team members to focus on their
local area of specialization and ignore or downplay the overall organizational mission. This can lead to a
lack of cooperation between functional groups, resulting in poor quality of decisions and overall
organization performance. In fact, rivalry rather than cooperation is what often happens between
functional groups that don't interact with each other. A study examining the quality of the relationship
between R&D and marketing in a functional organizational structure found that inter-functional rivalry
had the following consequences: it severely reduced R&D's use of information supplied by marketing
personnel, it lowered the perceived quality of information transferred between the two departments, and
it increased political pressures to ignore useful information provided by marketing.
Over the years, the use of functional structure has been in decline. Cross- functional teams became popular
in the late 1980s, when companies started to readjust their organizational structures to make them more
flexible and competitive.
ii. Cross-Functional Team
Increasingly, organizations are encountering complex and very dynamic exterijnal environments
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requiring flexible and less hierarchical structures. In today's flatter organizations, completing tasks often
requires cooperation across boundaries, such as functional areas or divisions. Individuals are continually
asked to cross functional boundaries and form teams with individuals of other functional disciplines for
the purpose of accomplishing a common objective. The multifunctional team is composed of various
members with different back grounds, knowledge, experience, and expertise, who can solve problems
and also help in decision making. Another name for this type of team is the cross-functional team. A
cross-functional team is made up of members from different functional departments of an organization
who are brought together to perform unique tasks to create new and nonroutine products or services. Team
member may also include representatives from outside organizations, such as suppliers, clients, and joint-
venture partners.
The premise behind the cross-functional team concept is that interaction, cooperation, coordination,
information sharing, and cross-fertilization of ideas among people from different functional areas
(production, marketing, R&D, etc.) produces better quality products/services with shorter develop mental
cycles. This is especially true for cross-functional teams charged with developing innovative
products/services or new technologies. Here, managing human interactions and coordinating the transfer
of knowledge and ideas among individuals and functional groups can be the most challenging aspect of
the job. Multifunctional teams are being formed across company lines. In one case, three companies
joined forces with the goal of synchronizing activities in software, electronics, and mechanical design, to
improve new product intro ductions and product development processes, better manage outsourcing and
lower manufacturing costs. Communication is the medium through which team members share the
information required for successful integration of ideas. Separate cross-functional teams may be formed
in an organization for different activities, projects, or customer groups. They may be either temporary or
permanent additions to the formal structure of the organization. An example of multifunctional team
application is found in concurrent engineering projects, in which team members from different
departments of a company simultaneously interact in every phase of project tasks to design products and
processes concurrently.
Cross-functional teams typically have a team leader selected by higher management. Team leaders play
a crucial role in cross-functional teams. They can affect a team's effort, cohesion, goal selection, and goal
attainment. The responsibilities of the cross-functional team leader include ensuring that everyone has the
same understanding of the team's objective, defining roles and deliverables up front with each team
member, negotiating with team members' managers to establish the amount of time and other resources
pg. 93
that members will give to the team, and dealing with all sorts of conflict. It is often difficult to develop
trust and cooperation across functional boundaries, because people frequently perceive individuals from
other groups or functional areas as potential adversaries with conflicting goals, beliefs, or styles of
interacting. There is the possibility that dysfunctional (or even toxic) group and individual dynamics can
impede the work of the team. Egos, political infighting, and factionalism on the part of individuals
suddenly thrown together to complete a task often keep from realizing their full potential and can
sometimes sabotage their objectives. Effective cross-functional team leaders understand this dynamic and
take proactive steps to develop a climate of trust and understanding within the team. They realize that
their role is to act more like coaches or facilitators than managers, share leadership responsibilities, be
willing to seek outside help, and empower followers.
iii. Self-Managed Team (SMT)
The challenges of succeeding in a global economy have reached new levels, as companies strive to
develop and sustain competitive advantages with an intensity not seen before, and with the knowledge
that the business environment has become ever more turbulent. To meet these challenges and become
more competitive, U.S. companies of all types and sizes are acknowledging the need for changes in their
internal structures and culture. They will have to create alter- natives to hierarchies, change the way
decisions are made, redefine jobs, and change assumptions people have about how to structure
organizations. To meet these challenges, one structural approach that has been gaining ground is the self-
managed work team (SMT). Self-managed teams (SMTs) are relatively autonomous teams whose
members share or rotate leadership responsibilities and hold themselves mutually responsible for a set of
performance goals assigned by higher management. Self-managed teams are usually cross- functional in
membership makeup, and have wide latitude in decision areas such as managing themselves, planning
and scheduling work, and taking action on problems. Within the team, members set task goals for their
specific areas of responsibility that support the achievement of overall team goals. There is a general
perception that these characteristics make self-managed teams more adaptive and proactive in their
behavior than the traditional team.
The amount of delegated authority varies from one organization to another. For example, in some
organizations, SMTs may be given the primary responsibility for personnel decisions such as selecting
the team leader, hiring and firing team members, and determining compensation rates (within specified
limits). In other organizations, such decisions are reserved for higher manage pent. Self-managed teams
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have been used most often for manufacturing work, but they are finding increasing application in the
service sector as well.
Companies are finding out that SMTs create a work environment that stimulates people to become self-
motivated. Besides speeding up decision making and innovation, SMTs inspire employees to connect
with the company's vision a very special way: they see the company as the means by which they can
affect key issues and develop their leadership skills.
Evolution of teams and team leadership
Functional Team
Leader-Dominated
Types of Teams
Cross-Functional Team
Team-Dominated
Self-Managed Team
In summary, the functional team represents grouping individuals by common skills and activities within
the traditional hierarchical structure. Leader- ship is based on command and control. In cross-functional
teams, members have more freedom from the hierarchy, but the team typically is still leader centered and
leader-directed. The leader is most often assigned by the organization and is usually a supervisor or
manager from one of the departments represented on the team. Leaders do, however, have to give up
some of their control and power in order for the team to function effectively. In the highest stage of
evolution, team members work together without the direction of these agers, supervisors, or assigned team
leaders. Self-directed teams are member- rather than leader-centered and directed. The in a team context.
next section examines creativity.
pg. 95
4.7 Decision making in Teams
The uncertainty, ambiguity, and ever-changing circumstances of today's environment require that leaders
have the courage to make difficult decisions. In this section, we will examine decision making in the
context of the team, including the advantages and disadvantages of team decision making relative to
decisions made by an individual leader, as well as the determinants of effective team decisions and the
leader's role in team decisions.
Team versus Individual Decision Making
When it comes to solving problems and making decisions, organizations have relied on both individuals
and teams. Teams are preferred over individuals when relevant information and expertise are scattered
among different people, when participation is needed to obtain necessary commitment, when
concentrating power in a single individual hurts the group, and when controversial decisions need to be
made. Using a group to make a decision under these types of circumstances has some definite advantages
and disadvantages.
Advantages of Team Decision:
i. Can improve decision quality by facilitating the pooling of relevant knowledge, and stimulating
creative ideas.
ii. Can improve decision quality when the problems and issues involve the participation of different
functions, subunits, or parties.
iii. Allow responsibility to be diffused among several people, thereby facilitating support some types
of unpopular decisions (such as budget cut- backs and disciplinary actions).
iv. Help members understand the nature of the problem and the reasons for the final choice of a
solution; this understanding helps members implement the decision effectively.
v. Are likely to result in higher commitment by team members to implement decisions as compared
to decisions made alone by a manager.
Disadvantages of Team Decision:
i. Usually take longer than decisions made alone by a manager, and the cost in terms of participant
time is greater.
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ii. Are not necessarily better than those made by a single manager who has all of the relevant
information and knowledge needed to make the decision, and in some cases team decisions will
be inferior.
iii. May be self-serving and contrary to the best interests of the organization, if team members have
objectives and/or priorities that are different from those of the leader.
iv. May end up being a poor compromise rather than an optimal solution, when team members cannot
agree among themselves about the team's objectives and priorities.
v. May symbolize a team's tendency to support each other in defensive avoidance of evidence
showing that existing policies are no longer valid or adequate.
4.8 Leadership skills for Effective Team Meetings
With a group structure, managers spend a great deal of time in management meetings. Most meetings
include employees, and it is common for teams to have daily meetings. With the trend toward teams,
meetings are taking up an increasing amount of time. Therefore, the need for meeting management skills
is stronger than ever. The success of meetings depends on the leader's skill at managing the group process.
The most common complaints about meetings are that there are too many of them, they are too long, and
they are unproductive, Meeting leadership skills can lead to more productive meetings. Ford Motor
Company spent $500,000 to send 280 employees to a three-day training session with three one-day
sessions to follow. After the training, fewer employees complained of meetings being too long or
unproductive. Managers had gained the necessary meeting leadership skills and were putting this
knowledge into practice. Ford's investment had obviously paid off. In this section, we learn how to plan
and conduct a meeting and how to handle problem group members.
i. Planning Meetings
Leader and member preparations for a meeting have a direct effect on the meeting. Unprepared leaders
tend to conduct unproductive meetings. There are at least five areas in which planning is needed:
objectives, selecting participants and making assignments, the agenda, the time and place for the meeting,
and leadership. A written copy of the plan should be sent to members prior to the meeting.
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ii. Objectives
Probably the single greatest mistake made by those who call meetings is that they often have no clear idea
and purpose for the meeting. Before calling a meeting, clearly define its purpose and set objectives to be
accomplished during the meeting. The only exceptions may be at regularly scheduled information-
dissemination or brainstorming meetings.
iii. Participants and Assignments
Before calling the meeting, decide who should attend the meeting. The more members who attend a
meeting, the less the chance that any work will get done. Does the full group/team need to attend? Should
some nongroup specialist be invited to provide input? On controversial issues, the leader may find it wiser
to meet with the key members before the meeting to discuss the issue. Participants should know in
advance what is expected of them at the meeting. If any preparation is expected (read material, do some
research, make a report, and so forth), they should have adequate advance notice.
iv. Agenda
Before calling the meeting, identify the activities that will take place during the meeting in order to
achieve the objective. The agenda tells the members what is expected and how the meeting will progress.
Having a set time limit for each agenda item helps keep the group on target; needless discussion and
getting off the subject is common at all meetings. However, you need to be flexible and allow more time
when really needed. Agenda items may also be submitted from members to include. If you get agenda
items that require action, they should have objectives.
Place agenda items in order of priority. That way, if the group does not have time to cover every item, the
least important items carry forward. In meetings in which the agenda items are not prioritized, the
tendency is for the leader to put all the so-called quick items first. When this happens, the group gets
bogged down and either rushes through the important items or puts them off until later.
v. Date, Time, and Place
To determine which day(s) and time(s) of the week are best for meetings, get members' input. Members
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tend to be more alert early in the day. When members are close, it is better to have more frequent shorter
meetings focusing on one or just a few items. However, when members have to travel, fewer but longer
meetings are needed. Be sure to select an appropriate place for the meeting, and plan for the physical
comfort of the group. Be sure seating provides eye contact for small discussion groups, and plan enough
time so that the members do not have to rush. If reservations are needed for the meeting place, make them
far enough in advance to get a proper meeting room.
With advances in technology, telephone conferences are becoming quite common. Videoconferences are
also gaining popularity. These techniques have saved travel costs and time and have resulted in better and
quicker decisions. Companies using videoconferencing include Aetna, Arco, Boeing, Ford, IBM, TRW,
and Xerox. The personal computer has been said to be the most useful tool for running meetings since
Robert's Rules of Order. The personal computer can be turned into a large-screen "intelligent chalkboard"
that can dramatically change meeting results. Minutes (notes on what took place during the last meeting)
can be taken on the personal computer and a hard copy dis- tributed at the end of the meeting.
vi. Leadership
The leader should determine the appropriate leadership style for the meeting. Each agenda item may need
to be handled differently. For example, some items may simply call for disseminating information; others
require a discussion, vote, or a consensus; while other items require a simple, quick report from a member,
and so forth. An effective way to develop group members' ability is to rotate the role of the group
moderator/leader for each meeting.
4.9 Conducting Meetings
i. The First Meeting
At the first meeting, the group is in the orientation stage. The leader should use the high-task role.
However, the members should be given the opportunity to spend some time getting to know one another.
Introductions set the stage for subsequent interactions. A simple technique is to start with introductions,
then move on to the group's purpose and objectives, and members' job roles. Some- time during or
following this procedure, have a break that enables members to interact informally. If members find that
their social needs will not be met, dissatisfaction may occur quickly.
pg. 99
ii. Leadership
The team leader needs to focus on group structure, process, and development. As stated, the leadership
style needs change with the group's level of development. The leader must be sure to provide the
appropriate task and/or maintenance behavior when it is needed."
iii. Handling Problem Members
As members work together, personality types tend to emerge. Certain personality types can cause the
group to be less efficient than possible. Some of the problem members you may have in your group are
the following: silent, talker, wanderer, bored, and arguer.
iv. Silent
To have a fully effective meeting, all group members should participate. If members are silent, the group
does not get the benefit of their input. It is the leader's responsibility to encourage the silent member to
participate without being obvious or overdoing it. One technique the leader can use is the rotation method,
in which all members take turns giving their input. This method is generally less threatening than directly
calling on people. However, the rotation method is not always appropriate. To build up the silent
member's confidence, call on them with questions they can easily answer. When you believe they have
convictions, ask them to express them. Watch their nonverbal communication as indicators of when to
call on them. If you are a silent type, try to participate more often. Know when to stand up for your views
and be assertive. Silent types generally do not make good leaders.
v. Talker
Talkers have something to say about everything. They like to dominate the discussion. However, if they
do dominate, the other members do not get to participate. The talker can cause intragroup problems, such
as low cohesiveness and conflicts. It is the leader's responsibility to slow talkers down, not to shut them
up. Do not let them dominate the group. The rotation technique is also effective with talkers. They have
to wait their turn. When not using a rotation effective, gently interrupt the talker and present your own
ideas or call on other members to present their ideas. Prefacing questions with statements like "let's give
pg. 100
those who have not answered yet a chance" can also slow the talker down If you tend to be a talker, try
to slow down. Give others a chance to talk and do things for themselves. Good leaders develop others'
abilities in these areas
vi. Wanderer
Wanderers distract the group from the agenda items, they tend to change the subject, and often like to
complain. The leader is responsible for keeping the group on track. If the wanderer wants to socialize, cut
it off. Be kind, thank the member for the contribution, then throw a question out to the group to get it
back on track. However, if the wanderer has a complaint that is legitimate and solvable, allow the group
to discuss it. Group structure issues should be addressed and resolved. However, if an issue is not
resolvable, get the group back on track. Griping without resolving anything tends to reduce morale and
commitment to task accomplishment. If the wanderer complains about unresolvable issues, make
statements like, "We may be underpaid, but we have no control over our pay. Complaining will not get
us a raise; let's get back to the issue at hand." If you tend to be a wanderer, try to be aware of your behavior
and stay on the subject at hand.
vii. Bored
Your group may have one or more members who are not interested in the job. The bored person may be
preoccupied with other issues and not pay attention or participate in the group meeting. The bored member
may also feel superior and wonder why the group is spending so much time on the obvious.
The leader is responsible for keeping members motivated. Assign the bored member a task like recording
ideas on the board and recording the minutes Call on bored members; bring them into the group. If you
allow them to sit back, things may get worse and others may decide not to participate either If you tend
to be bored, try to find ways to help motivate yourself. Work becoming more patient and in control of
behavior that can have negative effects on other members.
viii. Arguer
Like the talker, the arguer likes to be the centre of attention. This behavior can occur when you use the
devil's advocate approach, which is helpful in developing and selecting alternative courses of action.
pg. 101
However, arguers enjoy arguing for the sake of arguing, rather than helping the group. They turn things
into a for and selecting alternative courses of an approach, which is help enjoy ang win-lose situation,
and they cannot stand losing. way.
The leader should resolve conflict, but not in an argumentative way. Do not get into an argument with
arguers; that is exactly what they want to happen. If an argument starts, bring others into the discussion.
If it is personal, cut it off. Personal attacks only hurt the group. Keep the discussion moving on tar ger. If
you tend to be an arguer, strive to convey your views in an assertive argumentative exactly what they
want to debate format, not as an aggressive argument. Listen to others' views and be willing to change if
they have better ideas.
ix. Working with Group Members
Whenever you work in a group, do not embarrass, intimidate, or argue with any members, no matter how
they provoke you. If you do, the result will make a martyr of them and a bully of you to the group. If you
have serious problem members who do not respond to the above techniques, confront them individually
outside of the group. Get them to agree to work in a cooperative way.
4.10 Summary
The chapter opens with an introduction, setting the stage for the exploration of team leadership and the
dynamics of self-managed teams within organizational settings. The chapter delves into the significance
of teams within organizations, highlighting their role in achieving common goals, fostering collaboration,
and improving overall organizational performance. A distinction is drawn between groups and teams,
elucidating the characteristics that differentiate them. This section likely discusses how effective teams
go beyond mere collections of individuals. The chapter explores the pros and cons of teamwork, providing
insights into the potential benefits such as enhanced creativity and productivity, as well as the challenges
and pitfalls that may arise. Key characteristics contributing to the effectiveness of a team are discussed.
This may include elements like clear communication, trust, accountability, and a shared sense of purpose.
Different types of teams are examined, shedding light on the variations in team structures and functions
within an organization. This could encompass project teams, cross-functional teams, and self-managed
teams. The chapter delves into the intricacies of decision-making within a team context. It may cover
collaborative decision-making processes, consensus-building, and the factors influencing effective team
pg. 102
decisions. Leadership skills crucial for facilitating successful team meetings are outlined. This section
may touch upon communication, conflict resolution, and the ability to motivate and engage team members
during meetings. Practical guidance on conducting effective team meetings is provided. This could
include strategies for agenda-setting, time management, and fostering a positive and inclusive team
environment during meetings.
In summary, Chapter 4 comprehensively explores the use of teams in organizations, the nuances of
effective teamwork, various team types, decision-making processes, and leadership skills essential for
successful team meetings.
4.11 Questions
Section A (5 Marks)
i. Explain the significance of utilizing teams within an organizational framework.

ii. Explain does the use of teams contribute to the overall efficiency of an organization?
iii. Differentiate between groups and teams, providing examples for each.
iv. Analyze the impact of having a team-oriented culture compared to a group-oriented culture in an
organization.
v. Evaluate the advantages of teamwork in the context of organizational performance.
Section B (9 Marks)
i. Critically assess the potential disadvantages of relying on teamwork within an organization.

ii. Create a list of characteristics that define an effective team based on the information provided in
the chapter.
iii. Develop a model illustrating how the characteristics of effective teams can be interconnected for
optimal performance.
iv. Apply the concept of different team types to a real-world scenario within an organization.
v. Propose a suitable team type for a project requiring diverse skill sets and collaboration.
Section C (12 Marks)

i. Break down the decision-making processes discussed in the chapter and identify key components.
pg. 103
ii. Analyze the factors that may influence decision-making in self-managed teams compared to
traditional hierarchical teams.
iii. Apply the leadership skills discussed in the chapter to plan and conduct an effective team meeting.
iv. Create a set of guidelines for conducting productive and inclusive team meetings.
v. Devise a strategy for overcoming common challenges associated with team meetings.
pg. 104
MODULE 5 - STRATEGIC LEADERSHIP
STRUCTURE
5.1 STRATEGIC LEADERSHIP
5.1.1 Analyzing the Environment
5.2 STRATEGIC VISION
5.3 STARTEGIC MISSION STATEMENT
5.3.1 An effective mission statement should be
5.3.2 Benefits of a Strategic Leadership Mission Statement
5.4 STRATEGIC LEADERSHIP VALUES
5.4.1 The Ethical Compass: Strategic Leadership Values
5.4.1 (a) Key Strategic Leadership Values
5.4.1 (b) Benefits of Strong Strategic Leadership Values
5.4.2 Living the Values:
5.5 STRATEGIC FORMULATION
5.6 STRATEGY IMPLEMENTATION
5.6.1 Key Steps in Strategy Implementation
5.7 STRATEGY EVALUTAION
5.8 METHODS FOR STRATEGY EVALUATION
5.9 CRISIS LEADERSHIP
5.10 PRE-CRISIS PLANNING
5.10.1 Why Pre-crisis Planning is Crucial?
5.10.2 Key Steps in Pre-Crisis Planning
5.11 CRISIS LEADER
5.12 CRISIS MANAGEMENT TEAMS
5.13 RISK ASSESMENT MODEL
5.14 CRISIS MANAGEMENT
5.15 LEADING CHANGE
5.16 NEED FOR CHANGE
5.17 CHANGE MANAGEMENT PROCESS
5.18 ROLE OF LEADER IN LEADING CHANGE IN AN ORGANISATION
pg. 105
5.1 STRATEGIC LEADERSHIP
The common usage of the term strategic is related to the concept of strategy—simply a plan of action for
accomplishing a goal. One finds both broad and narrow senses of the adjective strategic. Narrowly, the
term denotes operating directly against military or industrial installations of an enemy during the conduct
of war with the intent of destroying his military potential.1 Today, strategic is used more often in its
broader sense (e.g., strategic planning, decisions, bombing, and even leadership). Thus, we use it to relate
something’s primary importance or its quintessential aspect—for instance, the most advantageous,
complex, difficult, or potentially damaging challenge to a nation, organization, culture, people, place, or
object. When we recognize and use strategic in this broad sense, we append such meanings as the most
important long range planning, the most complex and profound decisions, and the most advantageous
effects from a bombing campaign—as well as leaders with the highest conceptual ability to make
decisions.
As mentioned earlier, strategy is a plan whose aim is to link ends, ways, and means. The difficult part
involves the thinking required to develop the plan based on uncertain, ambiguous, complex, or volatile
knowledge, information, and data. Strategic leadership entails making decisions across different cultures,
agencies, agendas, personalities, and desires. It requires the devising of plans that are feasible, desirable,
and acceptable to one’s organization and partners—whether joint, interagency, or multinational. Strategic
leadership demands the ability to make sound, reasoned decisions—specifically, consequential decisions
with grave implications. Since the aim of strategy is to link ends, ways, and means, the aim of strategic
leadership is to determine the ends, choose the best ways, and apply the most effective means. The
strategy is the plan; strategic leadership is the thinking and decision making required to develop and effect
the plan. Skills for leading at the strategic level are more complex than those for leading at the tactical
and operational levels, with skills blurring at the seams between those levels. In short, one may define
strategic leadership as the ability of an experienced, senior leader who has the wisdom and vision to create
and execute plans and make consequential decisions in the volatile, uncertain, complex, and ambiguous
strategic environment.
In the ever-evolving landscape of organizations, strategic leadership emerges as a crucial approach for
guiding them towards success. It's a multifaceted process that blends visionary thinking with analytical
prowess and decisive action. At its core lies the ability to craft a clear vision of the organization's desired
future, considering internal strengths and weaknesses, along with external opportunities and threats.
Through meticulous analysis, strategic leaders gain a deep understanding of their organization's position
within the market, allowing them to make informed decisions about resource allocation, strategic
partnerships, and operational changes necessary to achieve the envisioned future.
pg. 106
Effective communication plays a vital role in strategic leadership. Leaders must not only possess a clear
vision but also be adept at communicating it and the underlying strategy to all levels of the organization.
This fosters buy-in and alignment among stakeholders, creating a united front towards achieving the
common goal. However, the journey doesn't end with simply articulating the strategy. Strategic leaders
actively guide the implementation, closely monitoring progress and adapting to unforeseen
circumstances. This agility ensures the organization remains responsive to a dynamic environment and
can course-correct as needed.
The benefits of embracing strategic leadership are manifold. It provides a sense of clarity and direction,
eliminating ambiguity and keeping everyone focused on the shared vision. This, in turn, translates into a
competitive advantage, allowing the organization to anticipate and adapt to market shifts, staying ahead
of the curve. Furthermore, strategic leadership enhances overall performance by ensuring resources are
strategically allocated, leading to increased efficiency and effectiveness in achieving goals. Additionally,
it fosters a sense of purpose and direction among employees, boosting their motivation and engagement,
which are vital ingredients for organizational success.
To cultivate and refine one's skills in strategic leadership, continuous learning is paramount. Leaders must
remain updated on industry trends, best practices, and leadership development opportunities.
Additionally, self-awareness plays a crucial role. Reflecting on one's strengths and weaknesses as a leader
and actively seeking areas for improvement is crucial for growth. Engaging with experienced mentors
who can provide guidance and advice, coupled with seeking challenging roles and projects that offer
valuable experience in strategic thinking and decision-making, further hone the skills required for
effective strategic leadership. By embracing these core principles and continuously developing the
necessary skills, individuals can become transformative leaders, guiding their organizations towards a
bright and sustainable future.
5.1.1 Analyzing the Environment

One of the most important activities of strategic leadership is understanding the type of industry and
general environment in which the organization operates. This involves being able to identify and interpret
emerging trends before they become evident to everyone else. As mentioned, organizations operate in
highly uncertain and changing environments in which existing strategies quickly become outdated and
ineffective. Increasingly, leaders are confronted with environmental complexities, ambiguous situations,
and conflicting demands from multiple constituencies. To survive and thrive, strategic leaders must be
skilled at managing such environmental complexities and uncertainties. Some describe it as strategic
pg. 107
flexibility, which is an organization's capability to identify major changes in the external environment
and respond promptly. It is essential to learn and understand the concerns of customers, the availability
and bargaining power of suppliers and customers, the actions of competitors, market trends, economic
conditions, government policies, and technological advances. From a competitive standpoint, knowing
what your competitors are doing and how to respond is clearly important to a firm's suervival. It is no
surprise that competitive dynamics heavily influence the nature and content of a firm's strategies and its
outcomes. The underlying tenet of strategic management, therefore, is that organizations need to
formulate strategies to take advantage of external opportunities and to avoid or reduce the negative impact
of external threats.
Analyzing the internal environment focuses on assessing the organization's position in the market,
financial position, capabilities, core competencies, culture, and structure. This process reveals the
organization's strengths and weaknesses. The combined analysis of the external environment (i.e., to
identify opportunities and threats) and internal environment (i.e., to identify strengths and weaknesses) is
commonly referred to as SWOT (Strengths, Weaknesses, Opportunities, and Threats), or situation,
analysis. The effectiveness of an organization's strategies is influenced by the degree of fit or alignment
between the organization's internal capabilities/resources and its environmental opportunities.
Analyzing the environment for strategic leadership involves understanding the external and internal
factors that can impact an organization's ability to achieve its goals. This analysis typically includes
assessing the political, economic, social, technological, legal, and environmental (PESTLE) factors, as
well as industry-specific factors such as competitors, market trends, and customer preferences.
For strategic leadership, it's crucial to:
1. Understand the External Environment: This includes identifying opportunities and threats in
the market, understanding the competitive landscape, and analyzing the broader economic and
societal trends that could impact the organization.
2. Assess the Internal Environment: This involves evaluating the organization's strengths and
weaknesses, including its resources, capabilities, culture, and structure.
3. Identify Key Issues and Challenges: By analyzing the external and internal environments,
strategic leaders can identify key issues and challenges that need to be addressed to achieve the
organization's strategic goals.
4. Develop Strategies: Based on the analysis, strategic leaders can develop strategies to capitalize
on opportunities, mitigate threats, leverage strengths, and address weaknesses.
pg. 108
5. Implement and Monitor: Strategic leaders need to oversee the implementation of strategies and
monitor their effectiveness, making adjustments as needed to ensure the organization stays on
track to achieve its goals.
Overall, strategic leadership requires a deep understanding of the environment in which an organization
operates and the ability to make informed decisions to guide the organization toward its strategic
objectives.
5.2 STRATEGIC VISION
A strategic leadership vision serves as the guiding light for an organization, outlining its desired future
state and inspiring individuals to work towards its achievement. It's the foundation upon which strategic
planning and decision-making are built, providing a clear direction and fostering a sense of purpose.
Strategic leadership vision is a forward-looking perspective that outlines where an organization is headed
and how it plans to get there. It is a clear, compelling, and inspirational statement that defines the
organization's future state and aligns its efforts towards achieving specific goals and objectives. A
strategic leadership vision typically includes the following elements:
1. Purpose: It defines the organization's reason for existence beyond just making a profit. It clarifies
the impact the organization aims to have on its stakeholders and society at large.
2. Values: These are the fundamental beliefs that guide the organization's behavior and decision-
making. They form the foundation of the organizational culture and influence how employees
interact with each other and with external stakeholders.
3. Goals and Objectives: These are the specific outcomes that the organization aims to achieve.
They should be SMART (Specific, Measurable, Achievable, Relevant, Time-bound) to provide
clarity and focus.
4. Strategies: These are the high-level plans and approaches that the organization will use to achieve
its goals and objectives. They outline how the organization will allocate its resources and respond
to opportunities and challenges in its environment.
5. Implementation Plan: This outlines the steps that the organization will take to execute its
strategies. It includes timelines, responsibilities, and key milestones to track progress.
6. Monitoring and Evaluation: This involves regularly tracking progress towards the vision,
evaluating the effectiveness of strategies, and making adjustments as needed to stay on course.
Here's how a strategic leadership vision benefits an organization:
pg. 109
• Provides Direction: It acts as a compass, guiding decision-making and resource allocation towards
a common goal.
• Promotes Alignment: It fosters a sense of unity and alignment among stakeholders, moving the
organization forward in a unified manner.
• Motivates and Engages: A compelling vision inspires employees and stakeholders, driving
motivation, commitment, and a sense of ownership towards achieving the desired future.
• Attracts Talent: A clearly articulated vision can attract and retain top talent who identify with the
organization's aspirations.
5.3 STARTEGIC MISSION STATEMENT

While a strategic leadership vision outlines the desired future state of an organization, a mission
statement focuses on the present. It defines the organization's core purpose, values, and the impact it
aims to create. It serves as a guiding principle for daily operations and decision-making, ensuring
actions align with the overall vision and create value for stakeholders.
A strategic leadership mission statement is a concise description of an organization's purpose, goals, and
values. It outlines what the organization does, who it serves, and why it exists. A mission statement
typically includes the following elements:
1. Purpose: It describes why the organization exists and the fundamental reason for its existence. It
often highlights the impact the organization aims to have on its stakeholders and society.
2. Activities: It briefly describes the primary activities or services the organization provides to fulfill
its purpose.
3. Values: It outlines the core values and beliefs that guide the organization's behavior and decision-
making.
4. Customers or Stakeholders: It identifies the primary beneficiaries of the organization's

activities, such as customers, clients, or other stakeholders.
5. Distinction: It may include a statement that differentiates the organization from others in the same
industry or sector.
6. Aspiration: It may include a statement about the organization's long-term goals or vision for the
future.
pg. 110
5.3.1 An effective mission statement should be:
• Clear and concise: Easy to understand for everyone within the organization and external
stakeholders.
• Action-oriented: Inspire and guide daily operations and decision-making.
• Distinctive: Highlight what makes the organization unique and sets it apart from competitors.
• Timeless: While adaptable to changing circumstances, it should remain relevant over the long
term.
5.3.2 Benefits of a Strategic Leadership Mission Statement:

• Provides Clarity and Focus: Guides daily operations and decision-making by keeping the core
purpose and values at the forefront.
• Motivates and Engages Employees: A clear mission statement fosters a sense of purpose and
meaning in employees' work, leading to increased motivation and engagement.
• Builds Trust and Credibility: Communicating a clear mission statement to stakeholders builds
trust and strengthens the organization's reputation.
• Attracts and Retains Talent: A compelling mission statement can attract individuals who
identify with the organization's purpose and values, leading to a more engaged and talented
workforce.
5.4 STRATEGIC LEADERSHIP VALUES

In the realm of strategic leadership, values serve as the ethical compass that guides decision-making,
fosters trust, and shapes an organization's culture. These core principles define what matters most to the
organization and how it conducts itself internally and externally. Strategic leadership values are the
fundamental beliefs and principles that guide the behavior and decision-making of leaders in an
organization. These values are essential for creating a positive organizational culture and driving long-
term success. Some common strategic leadership values include:
1. Integrity: Acting with honesty, fairness, and transparency in all interactions and decisions.
2. Accountability: Taking responsibility for one's actions and ensuring that commitments are met.
3. Respect: Valuing the opinions, perspectives, and contributions of others, and treating them with
dignity.
pg. 111
4. Innovation: Encouraging creativity and embracing change to drive continuous improvement and
growth.
5. Excellence: Striving for the highest standards of performance and quality in all aspects of the
organization's operations.
6. Collaboration: Working effectively with others to achieve common goals and solve complex
problems.
7. Customer Focus: Understanding and meeting the needs of customers to deliver value and build
strong relationships.
8. Sustainability: Considering the long-term impact of decisions on the environment, society, and
the organization's stakeholders.
9. Empowerment: Encouraging and enabling others to take initiative and make decisions to drive
success.
10. Adaptability: Being flexible and responsive to changes in the internal and external environment
to stay competitive and relevant.
5.4.1 The Ethical Compass: Strategic Leadership Values

In the realm of strategic leadership, values serve as the ethical compass that guides decision-making,
fosters trust, and shapes an organization's culture. These core principles define what matters most to the
organization and how it conducts itself internally and externally.
5.4.1 (a) Key Strategic Leadership Values:
• Integrity: Upholding ethical principles and acting with honesty and transparency in all situations.
• Vision: Having a clear and inspiring vision for the future that guides strategic direction.
• Accountability: Taking responsibility for decisions and actions, both individually and
collectively.
• Collaboration: Working together effectively to achieve shared goals, fostering teamwork and
inclusivity.
• Innovation: Embracing creativity and encouraging new ideas to adapt to changing circumstances
and stay ahead of the curve.
pg. 112
• Customer Focus: Prioritizing customer needs and satisfaction, delivering value and exceeding
expectations.
• Sustainability: Operating with a long-term perspective, considering the environmental and social
impact of decisions.
• Diversity and Inclusion: Creating a culture that embraces different perspectives, backgrounds,
and experiences, fostering a sense of belonging and maximizing potential.
5.4.1 (b) Benefits of Strong Strategic Leadership Values:

• Guides Decision-Making: Provides a framework for evaluating options and ensuring decisions
align with the organization's core principles.
• Builds Trust: Demonstrates commitment to ethical behavior and fosters trust among
stakeholders, both internal and external.
• Attracts and Retains Talent: Creates a positive work environment that attracts individuals who
share the organization's values and are motivated by its purpose.
• Enhances Reputation: A strong value system contributes to a positive reputation and strengthens
brand image.
• Sustainable Success: Values shape the organization's culture and guide long-term decision-
making, leading to sustainable success in a rapidly changing world.
5.4.2 Living the Values:

It's not enough to simply articulate values; they need to be translated into action at all levels of the
organization. This can be achieved through:
• Leadership by Example: Leaders must embody the values in their own behavior and decision-
making.
• Rewarding Value-Driven Actions: Recognize and reward employees who demonstrate the
organization's values in their daily work.
• Integrating Values into Policies and Practices: Embed the values into corporate policies,
procedures, and decision-making frameworks.
• Open Communication and Continuous Learning: Foster open communication about values
and create opportunities for employees to learn and grow in alignment with them.
pg. 113
By prioritizing and actively integrating strong strategic leadership values, organizations can build a
foundation for ethical decision-making, attract and retain top talent, and cultivate a positive and
sustainable work environment, ultimately paving the way for long-term success.
5.5 STRATEGIC FORMULATION
Strategic Formulation can also be referred to as Strategic Planning. A strategy is a broad plan developed
by an organization to take it from where it is to where it wants to be. A well-designed strategy will help
an organization reach its maximum level of effectiveness in reaching its goals while constantly allowing
it to monitor its environment to adapt the strategy as necessary. Strategy formulation is the process of
developing the strategy. Strategy formulation refers to the process of choosing the most appropriate
course of action for the realization of organizational goals and objectives and thereby achieving the
organizational vision. Strategic Formulation is considered to be the first stage of Strategic Management
Process.
The process of strategy formulation basically involves six main steps:

1. Framing Mission and Objectives. A Mission id is the reason for the organization existence; A well
conceived mission statement defines the company's operation in terms of the products offered and markets
Served. Objectives are the end result of planned activity They state what is to be accomplished by when
and should be quantified if possible. The achievement of corporate objective should result in the
fulfillment of a corporate mission. The Mission & Objectives must be clearly defined.
2. Analysis of Internal Environment : After setting the objectives or goals, the management needs to make
an analysis of the Internal environment. The Internal Environment refers to manpower, machinery,
methods, procedures and other resources of the organization. A proper analysis of the Internal
environment revels strengths and weakness of the organization.
3. Analysis of External Environment : The Management must conduct an analysis of the external
environment. The external environment refers to government, competition, consumers, technological
developments and other environmental factors that affect the organization. . The purpose of such a review
is to make sure that the factors important for competitive success in the market can be discovered so that
the management can identify their own strengths and weaknesses as well as their competitors’ strengths
pg. 114
and weaknesses.
4. Gap Analysis The management must also conduct gap analysis, For this purpose, the management must
compare and analyze its present performance level and the desired future performance level. Such a
comparison would reveal the extent of gap that exists between the present performance and future
expectations of the organization. If there is sufficient gap, the management must think of suitable measure
to bridge or close the gap.
5. Framing Alternative strategies: After making SWOT analysis and the gap analysis, the management
needs to frame alternative strategies to accomplish the objectives of the firm. There is need to frame
alternative strategies, as some strategies may be put on hold, and other strategies may be implemented.
6. Choice of strategy: The organization cannot implement all the alternative strategies. Therefore, the firm
has to be selective. The organization must select the best strategy, the organization needs to conduct
costbenefit analysis of the alternative strategies. The strategies, which give the maximum benefits at
minimum cost, would be selected.
5.6 STRATEGY IMPLEMENTATION
Strategy implementation is the critical stage in the strategic process where the developed plans are
translated into concrete actions. It's the bridge between conceptualizing a desired future state and
achieving it. Strategy implementation involves translating strategic objectives into actionable plans,
aligning organizational structure and resources, fostering a supportive culture, and effectively
communicating the strategy to stakeholders. It requires careful planning, strong leadership, and
continuous monitoring of progress. By developing a detailed implementation plan, aligning the
organization's structure, allocating resources, building a supportive culture, communicating the strategy,
monitoring progress, and making adjustments as needed, organizations can successfully implement their
strategies and achieve their long-term goals.
5.6.1 Key Steps in Strategy Implementation:
1. Define clear goals and objectives: Break down the overall strategy into specific, measurable,
achievable, relevant, and time-bound (SMART) goals and objectives for different departments
and teams.
2. Develop an action plan: Outline the specific actions, resources, timelines, and responsibilities
needed to achieve each goal.
3. Align resources: Ensure the organization has the necessary resources, including personnel,
budget, and technology, to implement the plan effectively.
pg. 115
4. Communicate the strategy: Clearly communicate the strategy and its rationale to all levels of
the organization, fostering understanding and buy-in.
5. Monitor and adapt: Regularly monitor progress, track key performance indicators (KPIs), and
be prepared to adapt the plan as needed based on internal and external changes.
5.7 STRATEGY EVALUTAION

Strategy evaluation is a crucial step in the strategic process, involving the assessment of implemented
strategies to determine their effectiveness. This process begins by establishing clear criteria for
evaluation, such as financial performance, market share, and customer satisfaction. Data is then collected
and analyzed to measure the organization's performance against these criteria, comparing it with industry
benchmarks and competitors. The results are used to identify successes, areas for improvement, and
lessons learned. Based on the evaluation, adjustments may be made to the strategy to enhance its
effectiveness. Communicating the results of the evaluation to stakeholders helps maintain transparency
and alignment with organizational goals. Overall, strategy evaluation ensures that the organization
remains adaptive and competitive in its strategic approach. Strategy evaluation is a critical final phase
within the strategic process. It's the mechanism that helps organizations determine whether their chosen
strategy is achieving the desired results and whether modifications are needed to ensure continued
success.
• Measuring Performance: Establish key performance indicators (KPIs) that align with the
strategy's goals. Regularly track and analyze these metrics to assess progress against expectations.
• Identifying Deviations: Compare actual results against expected outcomes. Identify any
significant deviations and analyze the root causes of those deviations.
• Taking Corrective Action: Based on the analysis, take necessary corrective action to bring
performance back in line with the goals. This might involve adjusting tactics, resources, or even
the overall strategy.
• Continuous Feedback: Strategy evaluation should be an ongoing process. This allows for regular
feedback, course correction, and continuous improvement of the strategic plan.
5.8 METHODS FOR STRATEGY EVALUATION

1. Financial Analysis
• Tools: Financial ratios (e.g., profitability, liquidity, efficiency ratios), budgets, financial
statements (income statement, balance sheet, cash flow statement).
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• Focus: Assessing an organization's financial health, profitability, financial stability, and whether
financial resources are being effectively utilized.
• Advantages:
o Provides a quantitative snapshot of organizational performance.
o Identifies areas of financial strength and weakness,
o Can be readily compared to industry benchmarks.
• Considerations:
o Financial data might not fully reflect the impact of strategic decisions.
o Should be used in conjunction with other evaluation methods.
2. Benchmarking
• Tools: Industry data, performance reports from competitors, best practice analysis.
• Focus: Comparing the organization's performance metrics against those of competitors or industry
leaders.
• Advantages:
o Identifies areas of potential improvement.
o Provides a realistic view of where the organization stands relative to competitors.
o Can motivate performance improvement.
• Considerations:
o Finding reliable and comparable data can be challenging.
o May not reveal the underlying reasons behind performance differences.
3. Customer Feedback
• Tools: Surveys, focus groups, customer reviews, social media listening, Net Promoter Score
(NPS).
• Focus: Gathering insights into customer satisfaction and identifying areas where the organization's
products, services, or customer experience fall short of expectations.
• Advantages:
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o Provides direct insights into the needs and wants of customers.
o Identifies areas to improve customer loyalty and retention.
• Considerations:
o Requires careful design and analysis of surveys and feedback mechanisms.
o Could be impacted by biases in self-reported data.
4. Internal Audits
• Tools: Reviews of processes, procedures, resource allocation, policies.
• Focus: Assessing whether the organization's internal operations are aligned with strategic
objectives and whether they're efficient and effective.
• Advantages:
o Identifies bottlenecks and inefficiencies in internal processes.
o Highlights potential areas for cost reduction or resource optimization.
• Considerations:
o Can be time-consuming and resource-intensive.
o May require outside expert analysis for maximum benefit.
5. Balanced Scorecard
• Tools: A framework with four perspectives: Financial, Customer, Internal Processes, Learning &
Growth. Each perspective has its own KPIs.
• Focus: Provides a holistic view of an organization's performance, looking beyond just financial
metrics to include customer satisfaction, operational efficiency, and employee development.
• Advantages:
o Aligns performance measures with overall strategy.
o Offers a more balanced view of organizational health.
• Considerations:
o Can be complex to develop and implement effectively.
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o Requires careful selection of KPIs relevant to the organization.
5.9 CRISIS LEADERSHIP

Today, more than ever, there is a great need for leaders from all walks of life to show that they possess
the skills and competence to lead during times of crisis. In the wake of the September 11, 2001, World
Trade Center attacks, people are looking for leaders who can provide stability, reassurance, confidence,
and a sense of control during and after a crisis. In today's volatile global marketplace, many experts
believe that organizations (whether for-profit or not-for- profit) should recognize the inevitable-that crises
can and will emerge, Many proactive corporations are now putting in place strategic planning and crisis
readiness plans. Many organizations are taking appropriate steps to design systems and tools to respond
effectively to a crisis before it happens. The key, according to one expert, is to be proactive and build
your dream team before disaster hits, "because tough times won't create leaders, they show you what kind
of leaders you already have."A crisis is a low-probability, high- impact event that threatens the viability
of the organization and is characterized by ambiguity of cause, effect, and means of resolution, as well as
by a be lief that decisions must be made swiftly.
Crises come in many forms. There are natural disasters (hurricanes and tsunamis), terrorist attacks (9/11
and the 2005 London bombings), product failures (Firestone and Ford tire problems), human error
disasters (Bhopal and Exxon Valdez oil spill incidents), unexpected death of the CEO (McDonald's CEO
and Chairman, Jim Catalupo), and system failures (Challenger accident and Chernobyl nuclear plant
explosion). Also, there are the crises that don't always make the front pages of newspaper or feature in
the TV news, such as Sexual harassment, executive misconduct, product recalls, and computer hackings.
To address the crisis of the sudden demise of the CEO, some scholars recommend that companies develop
deep, enduring bench strength by combining succession planning and leadership development to create a
long-term process for managing the talent pool. Regardless of the nature of the crises, what they all have
in common is the stress and pressure they place on key organizational resources and systems. Any
weaknesses that may have been present in the system prior to a crisis are exacerbated at the very time
they are needed the most. Though suffering some loss is almost unavoidable, proper management can
reduce the duration of the crisis, enhance or retain a socially responsible corporate image, and secure
future profitability. Effective crisis management depends on planning and people. According to experts
in the field, an effective crisis management plan is one that is
(1) comprehensive, with clear leadership, team, and individual assignments in the form of roles and
responsibilities;
(2) up- graded frequently and supported by training and periodic drill sessions; and
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(3) coordinated and controlled across levels and units of the organization. Building from existing models,
a more recent comprehensive model of the crisis management process asserts that readiness to respond
appropriately at each stage of the crisis management process is a function of
(1) knowing and accepting one's assigned role in the crisis management plan,
(2) sufficient training specific to the assigned role to enable one to perform his or her responsibilities
competently, and
(3) complementary and integrated roles and responsibilities at all level of organisations.
5.10 PRE-CRISIS PLANNING

In the dynamic and often unpredictable world of leadership, unforeseen events can pose significant
challenges to an organization's stability and success. Pre-crisis planning, a proactive approach adopted by
strategic leaders, plays a vital role in mitigating the impact of these potential crises and ensuring the
organization's resilience.
5.10.1 Why Pre-crisis Planning is Crucial?
• Minimizes Damage: By anticipating potential threats and establishing response protocols, pre-
crisis planning helps organizations minimize the damage caused by a crisis, reducing financial
losses, reputational harm, and operational disruptions.
• Quick and Effective Response: A well-defined plan enables a faster and more effective response
to a crisis, allowing the organization to recover more quickly and efficiently.
• Enhances Decision-Making: The planning process itself stimulates critical thinking and scenario
planning, leading to more informed decisions when a crisis unfolds.
• Boosts Employee Confidence: Knowing that a plan is in place fosters a sense of security and
confidence among employees during a crisis, enabling them to remain focused and productive.
5.10.2 Key Steps in Pre-Crisis Planning:

1. Identify Potential Threats: Conduct thorough risk assessments to identify potential internal and
external threats that could disrupt your organization's operations.
2. Develop a Crisis Management Team: Establish a dedicated team composed of individuals with
diverse expertise and clear roles and responsibilities during a crisis situation.
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3. Create a Crisis Communication Plan: Develop a communication plan that outlines how the
organization will communicate with internal and external stakeholders during a crisis, ensuring
clear, consistent, and timely information dissemination.
4. Develop Response Protocols: Define specific protocols for responding to different types of
crises. This might involve evacuation plans, data backup procedures, or crisis communication
protocols.
5. Test and Refine the Plan: Regularly test the crisis management plan through simulations and
exercises to identify areas for improvement and ensure team members are familiar with their roles
and responsibilities.
6. Maintain Awareness: Stay informed about emerging threats and trends in crisis management
best practices.
5.11 CRISIS LEADER

Given the dynamic environment of business, proactive organizations have found it prudent to designate
one or more senior executives with the task of scanning and monitoring the internal and external
environments for potential threats on an ongoing basis. The crisis leader initiates the planning process
and sets the strategic objectives for the crisis management plan. Along with the cri sis management team
and other technical experts needed, the leader is responsible for keeping the team informed about changes
in the strategic plan and/or the organization's internal and external environments that might affect the
effectiveness of the plan. In the event of a crisis, the leader must be visible, in control, and overseeing all
aspects of the execution of the plan. The crisis leader may report directly to the CEO or to the head of
communications or public relations. The duties of the crisis leader may include activities such as the
following:
• Requiring individuals or departments to keep logs of complaints or incidents
• Monitoring customer and employee complaints and behavior
• Identifying emerging patterns or trends in the regulatory environment, competitive landscape, and
social environment
• Coordinating the activities of the crisis management team to ensure that the members work well
together.
The ability of crisis leaders to grasp the impact of events in the early stages of development has helped
some organizations avert a crisis and even helped others turn would-be threats into opportunities. The
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crisis leader who monitors the radar for the organization must have the power, resources, position, and
stature to influence events if a crisis is pending.
For example, an organization must empower the crisis leader to be able to make a critical decision such
as shutting down a product line if a defect is suspected, or halting operations on an assembly line if
multiple injuries or malfunctions have occurred.
5.12 CRISIS MANAGEMENT TEAMS
Crisis management teams are integral to strategic management, serving as the frontline defense against
unexpected events or crises that could disrupt an organization's operations and damage its reputation.
These teams are tasked with the critical role of identifying potential risks and vulnerabilities that could
lead to crises, assessing their potential impact, and developing strategies to mitigate these risks. One of
the key functions of crisis management teams is to establish a comprehensive crisis management plan.
This plan outlines the roles and responsibilities of team members, as well as the communication strategies
to be employed during a crisis. It also includes protocols for activating the plan and coordinating the
organization's response.
During a crisis, the crisis management team is responsible for implementing the plan, which may include
establishing a crisis command center, coordinating with relevant stakeholders, and ensuring that the
organization's response is swift, effective, and coordinated. This often involves making difficult decisions
under pressure, such as allocating resources, managing logistics, and communicating with the media and
other stakeholders.
After the crisis has been resolved, the crisis management team conducts a thorough review of the
organization's response. This includes identifying what went well and what could have been improved,
as well as developing strategies to prevent similar crises in the future. By learning from past experiences
and continuously improving their crisis management strategies and processes, organizations can better
protect their reputation, minimize financial losses, and maintain the trust of their stakeholders during
challenging times.
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5.13 RISK ASSESMENT MODEL
Five-Step Process for Crisis Risk Assessment

Ideally, every organization should follow a five-step process to develop a comprehensive precrisis risk
assessment plan.
The five-step process for risk assessment consists of
(1) risk identification,
(2) risk assessment and ranking,
(3) risk reduction strategies,
(4) crisis prevention simulations, and
(5) crisis management.
In step one, crisis team members will begin by first identifying the worst-case incidents that could have
severe consequences on people, the organization's financial position, or its image. This process is
described as risk identification and results in the creation of a risk chart. Next, these incidents are analyzed
and ranked using criteria such as loss of life, injuries, emotional trauma, or minimal inconvenience for
each incident's human impact. On the financial and image side, ranking criteria such as extraordinary
impact (i.e., will bankrupt the organization), serious but insured (i.e., we are covered), or small impact
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(i.e., nothing to worry about) may be employed. This information is then used as the basis for launching
the third step, which is risk reduction.
During the risk reduction step, the crisis leader shares the risk chart created during risk assessment and
ranking with team members or larger audiences, and they begin debating and formulating strategies for
countering each crisis or threat. SWOT analysis comes into play as a tool in determining what resources
and capabilities are available or needed to better manage each crisis. For instance, say the organization is
a chemical plant. An item on the risk chart may indicate the risk of a "poisonous gas leak" as a likely
event. A SWOT analysis of this particular risk may progress as follows: the crisis team would identify
capabilities the organization has if such an incident should occur (such as poison gas scientists and
materials), weaknesses (such as the present lack of a poisonous gas leak response plan), opportunities
(such as community support for the plant because of its economic impact on area), and threats (such as
environmentalists who are likely to protest and demand that the plant be closed). Based on this analysis,
the crisis team may recommend as a risk reduction plan that the organization begin safety awareness
programs and conduct joint meetings with local emergency response teams.
The fourth step in the risk assessment process is crisis prevention. Here, tests and simulations are
conducted to test employees under pressure. Again, SWOT analysis information is used to fine-tune this
step. This step helps to sensitize the organization to the need for crisis planning. After the tests and
simulations and the resulting discussions, evaluations, and feedback from managers at all levels of the
organization, the crisis team can then rest easy with the assurance that the organization is better ready to
handle a crisis. The fifth step of risk assessment is crisis management. A team is assembled and ready to
respond in the event of a real crisis.
Ultimately, the best gauge to determine an organization's readiness to respond to a crisis is how it rates
according to the following five factors:
• Quality of strategic crisis plan
• Awareness and access to crisis management information Readiness for a quick response
• Effective communication plan in place
• Effective crisis leadership
It is a fact of life that in spite of all the crisis prevention planning that organizations undergo, sooner or
later, a crisis will emerge and an organization will have to deal with it. The next section focuses on crisis
management.
pg. 124
5.14 CRISIS MANAGEMENT
Crisis management is a pivotal aspect of strategic management, deeply embedded in the overarching
planning and decision-making processes of an organization. It encompasses the strategic planning,
coordination, and execution of strategies aimed at effectively responding to and recovering from
unexpected events or crises that could jeopardize an organization's reputation, operations, or stakeholders.
Within the realm of strategic management, crisis management is not merely a reactive measure but an
integral part of proactive planning, ensuring that the organization is well-prepared to handle potential
crises and minimize their impact.
The effectiveness of crisis management in strategic management hinges on several key elements. Firstly,
a thorough risk assessment is crucial for identifying potential risks and vulnerabilities that could culminate
in crises, ranging from natural disasters to cybersecurity breaches or reputational issues. Subsequently,
organizations develop a comprehensive crisis management plan, delineating roles, responsibilities,
communication strategies, and protocols for responding to various types of crises. Regular preparedness
activities, such as training and drills, are conducted to ensure that employees are well-versed in crisis
response procedures and that the crisis management plan remains up to date.
When a crisis does occur, the organization must swiftly activate its crisis management plan. This involves
coordinating the response effort, communicating with stakeholders, managing resources, and making
critical decisions to mitigate the crisis's impact. Post-crisis, organizations engage in recovery efforts,
developing strategies to restore normal operations, repair any damage to the organization's reputation,
support affected stakeholders, and implement changes to prevent similar crises in the future.
A key aspect of effective crisis management within strategic management is the emphasis on learning and
improvement. Organizations conduct thorough post-crisis reviews to identify lessons learned and areas
for enhancement in their crisis management strategies and processes. By integrating crisis management
into strategic management, organizations can better shield themselves from potential crises, mitigate their
impact when they do occur, and emerge from crises stronger and more resilient, ultimately safeguarding
their long-term success.
5.15 LEADING CHANGE
Leading change management is a way to make change and transition to new approaches. Change
management is a framework or process that focuses on on managing people as they experience change.
It’s about ensuring that people have the right resources, knowledge, and support so that they can be
successful. Put simply, it’s about managing change. Change impacts employees of every level, from large
organizations with organizational coaching to independently owned businesses with few staff members.
But this framework isn’t possible without people leading it.
pg. 125
Poor or inexperienced leaders won’t recognize and uphold the needs of their team or inspire them to
embrace shifting ideals. Change management doesn’t work unless leaders do. That’s why learning how
to be an effective leader is an essential skill.
This process helps businesses cope with any challenges they encounter during growth. Plus, it ensures
that any change accommodates core values, technology, and other economic factors.
Let’s say your workplace is transitioning to working completely virtually. After many years of in-person
work, you’re bound to have some bumps in the road. Change management isn’t focused entirely on
equipping employees to work from home.
It’s focused on how the employees themselves will adapt to the change their workplace is experiencing,
a home office, and life without a commute. This also involves considering how to mitigate potential
distractions, what software or tools everyone will need to succeed, and how to maintain company culture
remotely. This type of management helps team members better adapt to change. And change can happen
any day of the week. It can involve significant alterations to the projects people work on or a change in
the roles and responsibilities that team members have.
5.16 NEED FOR CHANGE
1. Managing Resistance: Change management involves identifying potential sources of resistance
to change, such as fear of job loss, uncertainty about the future, or concerns about increased
workload. By understanding these concerns, organizations can develop strategies to address them,
such as providing clear explanations of the reasons for change, offering support and training to
help employees adapt, and involving employees in the change process to make them feel more
empowered and engaged.
2. Engaging Stakeholders: Change management emphasizes the importance of engaging

stakeholders at all levels of the organization in the change process. This includes not only
employees but also customers, suppliers, and other external partners who may be affected by the
changes. By involving stakeholders in the planning and implementation of strategic initiatives,
organizations can gain valuable insights, build support for the changes, and ensure that the changes
are aligned with the organization's overall goals and values.
3. Communicating Effectively: Effective communication is crucial in change management to

ensure that employees and stakeholders understand the reasons for change, the benefits it will
bring, and the steps involved in the change process. Communication should be clear, transparent,
and consistent, and should take into account the diverse needs and preferences of different
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stakeholders. By keeping stakeholders informed and involved throughout the change process,
organizations can reduce uncertainty and resistance and build trust and support for the changes.
4. Building Capability: Change management involves building the capabilities needed to

implement and sustain strategic changes. This may include providing training and development
opportunities to help employees acquire the skills and knowledge needed to adapt to new ways of
working, as well as creating a supportive environment that encourages experimentation and
learning. By investing in building capability, organizations can ensure that they have the resources
and skills needed to successfully implement strategic initiatives and achieve their long-term goals.
5. Monitoring and Evaluating Progress: Change management includes monitoring the progress of
strategic initiatives and evaluating their impact on the organization. This involves tracking key
performance indicators (KPIs) to assess the effectiveness of the changes, identifying any issues or
challenges that arise, and making adjustments as needed to ensure the success of the changes. By
regularly monitoring and evaluating progress, organizations can identify areas for improvement,
learn from their experiences, and make informed decisions about future strategic initiatives.
6. Maintaining Focus and Momentum: Change management helps organizations maintain focus
and momentum during the implementation of strategic initiatives. It provides a structured
approach to managing change, ensuring that the organization stays on track and remains
committed to achieving its goals, even in the face of obstacles or setbacks.
7. Managing Complexity: Strategic initiatives often involve multiple interconnected changes across
different parts of the organization. Change management helps organizations manage this
complexity by breaking down the change process into manageable steps, identifying dependencies
and interrelationships between changes, and ensuring that all changes are coordinated and aligned
with the overall strategic objectives.
8. Building Resilience: Change management helps build organizational resilience by fostering a

culture that is open to change, adaptable, and able to respond effectively to unexpected challenges
and disruptions. By developing the capability to manage change effectively, organizations can
become more agile and better prepared to navigate uncertain and turbulent environments.
9. Enhancing Stakeholder Relationships: Change management helps organizations build stronger

relationships with stakeholders by involving them in the change process, listening to their
feedback and concerns, and addressing their needs and expectations. This can lead to greater trust,
pg. 127
collaboration, and support for strategic initiatives, ultimately increasing the likelihood of their
success.
10. Sustaining Long-Term Change: Change management focuses not only on implementing change
but also on sustaining it over the long term. It involves developing strategies to embed new
behaviors, processes, and ways of working into the organizational culture, ensuring that the
changes become the new norm and are not just temporary fixes.
5.17 CHANGE MANAGEMENT PROCESS

Fundamental ideas exist about change and one fundamental is that change has always existed and will
always exist. According to Smith (1998), "Change starts with a goal, often called a vision ... and the
difference between the goal and the status quo is the intended change". Before affecting a change a proper
study must be made regarding all those who will be involved in the change process and all those who will
. be affected by the anticipated change .
Management of a change process involves four broad stages:
i) Planning - In the planning stage the organisation determines a need for change, creates a
change management team and develops a plan of action.
ii) Implementation and Management- In this stage the change plan is executed and the main focus
is on implementing, managing and maintaining the change process, so that the change is
affected smoothly. without hiccups.
iii) Development of Tracking and Monitoring Instruments - In this stage various tracking and
monitoring instruments are developed to assess the successes or failures of the change so that
necessary adjustments can be made. Likewise, precautionary measures, if required, can be
adopted.
iv) Tracking and Monitoring - This is the final stage and "consists solely of continuous tracking
and monitoring until the organisation has institutionalised the change" (Wilbur, 1992).
As Smith (1998) has stated, the change management team must be willing to "listen and monitor
constantly ... and ensure adjustments are made with the goal always in mind" throughout all
the four stages of the change process.
Kurt Lewin's Model Kurt Lewin had a profound influence on the theory and practice of change in
organisation. Most theories of organisational change originated from the landmark work of this social
psychologist. Lewin (1947) instituted a three-stage model of change which explained how to initiate,
pg. 128
manage and stabilize the change process. The three stages of change, according to this'model are,
unfreezing, changing, and refreezing. Let us fIrst go through the various assumptions underlying Lewin's
model of change (USDA). These are:
1) The change process involves learning something new, as well as discontinuing current attitudes,
behaviours, or organisational practices.
2) Change will not occur unless there is motivation to change. This is often the most difficult part of the
change process.
3) Individuals are the centre of all organisational changes. Any change, whether in terms of structure,
group process, reward systems, or job design, requires individuals to change.
4)' Resistance to change is found even when the goals of change are highly desirable.
5) Effective change requires reinforcing new behaviours, attitudes and organisational practices. Let us
now consider the three stages of change as suggested by Lewin:
Phase l-Unfreezing
This stage involves preparing the organisation for change. The main focus is on creating the motivation
to change. Change is more likely to be successful when those involved are prepared for what is to happen.
Therefore, individuals are encouraged to replace old behaviours and attitudes with those desired by the
management. In unfreezing stage organisation begins to encourage the employees to address the change,
inform employees of the process, and thus dispel false information. This stage thus helps in creating
conditions for the change to be implemented.
Phase 2-Changing
This stage involves planning and implementing the change. Once a change has been initiated it is
important not to lose momentum. As change involves learning, this stage entails providing employees
with new information, new behavioural models, or new way of looking at things. The main purpose is to
help employees learn new concepts or points of view. Role models, mentors, experts, training etc. are
various mechanisms employed to facilitate the Change. Gradually, the employee behaviour begins to
change, causing a change in organisational attitudes, corporate values and management practices. Thus,
the changing stage requires organizing and mobilizing the resources required to bring about the change.
Phase 3 - Refreezing
This stage involves embedding the new ways of working into the organisation. The main focus is on
consolidating the organisation in its new mode of operation. It can be all too easy for people to try to
return to the "old way of doing things", especially if the change is a bit difficult or uncomfortable to
achieve. Change is stabilised during refreezing by helping the employees integrate the changed behaviour
or attitude into their normal way of doing things. For accomplishing this, first the employees are given a
pg. 129
chance to exhibit the new behaviours or attitudes. Once exhibited, positive reinforcement is used to
reinforce the desired attitude. praising successful change in practice and attitude can assist the process of
refreezing. Coaching and training can also be used for reinforcing the change in the informal culture of
the organisation.
In his model Lewin identified three ways that organisational change could be accomplished:
i) Changing the individuals who work in the organisation (their skills, values, attitudes
and behaviour).
ii) Changing various organisational structures and systems like reward systems, work
designs, relationships etc.
iii) Directly changing the organisational climate or interpersonal style i.e., issues like how
often people are with each other, how the conflict is managed and how decisions are
made.
This model has attracted major criticisms. The key ones are that his work assumed
organisations operate in a stable state, was only suitable for small-scale change projects,
ignored power and politics, and was top-down and management driven. But rather than being
outdated or redundant, Lewin's approach is still relevant to the modern world.
According to Kotter and Schlesinger (1979) there are four basic reasons that people resist change.
i) Parochial self interest - Some people fear the implications of change for themselves. They feel
they will lose something they value such as power, status, money etc.
ii) Misunderstanding and lack of trust - At times people affected do not understand the actual
reasons and benefits of the change and mistrust the management initiating the change. This
situation could arise because of communication problems and the people in the organisation
getting inadequate information.
iii) Low tolerance to change - Some people are very keen on security and stability in their work,
and do not adapt to change by the very nature of their personality, or feel that they cannot cope
with the changes that will effect them.
iv) Different assessments of the situation - This condition arises when both the initiators of
change and individuals affected by it disagree on the reasons for the change and on the
advantages and disadvantages of the change process. Kotter and Schlesinger have suggested
six change approaches to deal with resistance to change:
Kotter and Schlesinger have suggested six change approaches to deal with resistance to change:
pg. 130
• Education and Communication This approach is useful whenever there is a lack of information
one of the ways to overcome resistance is to educate and communicate with the people affected
by the change so as to for change and increase their trust that the changes are in the organisation's
interests.
• Participation and Involvement This approach is useful when the management is not in a position
to introduce change. The management can involve the employees in the change process and
overcome resistance, if any.
• Facilitation and Support This approach helps to make people adapt to the affected change in
situations, where individuals affected by change fear the anticipated change. The best way to prove
their fears unfounded is to force them into the new situation, so that they can realise that they can
cope. Appropriate support by the management also helps employees deal with fear and anxiety
during the transition period. There should be provision of counseling, coaching, further training
etc.
• Negotiation and Agreement This approach can be employed in situations where some group or
people have fear of losing something (power, money etc.) in the affected change and, therefore
may resist the change. The way of lessening such resistance is to negotiate something in return
and offer incentives to those resisting change.
• Manipulation and Co-option This approach involves eo-opting with the resistors. Co-option
involves the patronising gesture in fringing a person into a change management planning group
first just for the sake of appearances rather than any substantive contribution.
• Explicit and Implicit Coercion This approach can be employed in situations where change is
imposed for the survival of the organisation and speed is essential. Management can explicitly or
implicitly force employees to accept change by 'making clear that any resistance to change can
lead to firing, transferring or losing jobs. This model of six approaches helps in identifying the
different types of resistance to change and in understanding different sources of resistance can be
overcome by different approaches. Often, a combination of these approaches can be employed.
5.18 ROLE OF LEADER IN LEADING CHANGE IN AN ORGANISATION

The role of a leader in leading change in an organization is crucial, as leaders play a key role in setting
the direction, inspiring others, and ensuring that change initiatives are successful. Here are some key
aspects of a leader's role in leading change:
pg. 131
1. Visionary Leadership: Leaders need to articulate a clear and compelling vision for change that
inspires and motivates others. This vision should outline why the change is necessary, what the
desired future state looks like, and how it aligns with the organization's goals and values.
2. Strategic Planning: Leaders are responsible for developing a strategic plan for implementing the
change, including setting goals, identifying key milestones, allocating resources, and establishing
timelines. They need to ensure that the plan is well-structured, realistic, and aligned with the
organization's overall strategy.
3. Communication: Effective communication is essential in leading change. Leaders need to

communicate the vision for change, the reasons behind it, and the expected benefits clearly and
consistently to all stakeholders. They also need to listen to feedback, address concerns, and keep
everyone informed throughout the change process.
4. Stakeholder Engagement: Leaders need to engage with stakeholders at all levels of the
organization to build support for the change. This involves involving stakeholders in the planning
process, addressing their concerns, and ensuring that they understand the impact of the change on
them.
5. Role Modeling: Leaders need to lead by example and demonstrate their commitment to the
change. This includes embracing the change themselves, following through on commitments, and
showing resilience in the face of challenges.
6. Empowerment: Leaders should empower employees to take ownership of the change and be
actively involved in the change process. This involves delegating authority, encouraging
innovation, and providing support and resources to help employees adapt to the change.
7. Monitoring and Adaptation: Leaders need to monitor the progress of the change initiative,
identify any issues or challenges that arise, and make adjustments as needed to ensure that the
change is successful. This requires being flexible, responsive, and willing to adapt to changing
circumstances.
8. Celebrating Success: Finally, leaders should celebrate successes and milestones along the way
to maintain momentum and morale. This helps reinforce the positive impact of the change and
encourages continued commitment to the change process.
pg. 132
TERMINAL QUESTIONS
SECTION A (5 MARKS)
1. Interpret the environment analysis in strategic Leadership for a sound organisational
establishment.
2. Illustrate the Strategic ledership vision of an organisation
3. Employ the strategic mission statement
4. Demonstrate the strategic leadership values
5. Dramatize the Strategic Formulation and its process.
6. Schedule the methods used for strategic evolution
pg. 133

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ORGANIZATIONAL LEADERSHIP

SL NO. Content Page No.

Module- 2 LEADERSHIP THEORIES

2.2 Behavioral Approaches 31

2.3 IOWA studies 31

2.4 Michigan model 32

2.5 Ohio model 34

2.6 Leadership Grid 37

2.7 Contingency Approach 40

2.8 Fiedler Contingency Model 41

2.9 Situational Theories 46

2.10 Hersey & Blanchard 47

2.11 Path Goal Theory 50

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Course: B.Com Semester: VI

2 Leadership- Concepts of Leadership, Comparing Management and Leadership, Followership –

Module – 3: Charismatic & Transformational Leadership 12 Hours

Module – 4: Team Leadership 10 Hours

Module – 5: Strategic Leadership and Crisis Management 10 Hours

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1.1 • Leadership- Concepts of Leadership, Comparing Management 1

1.1 LEADERSHIP CONCEPTS

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Leadership vs. Management:

Criteria Leadership Management

Innovation and Change: Leaders

Sets the Direction: Leaders Implements the Vision: Managers

Directs and Coordinates: Managers

Embraces Change and Risk: Risk-Averse: Managers seek to

Operational and Short-Term:

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Passionate and Inspirational:

Adapts to Change: Leaders are

Pioneers and Innovators: Leaders Organizers and Implementers:

Instructive and Clear: Managers

Develops People: Leaders focus on Develops Systems: Managers

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1.2 LEADERSHIP- TRAITS & PERSONALITY

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1.4 ETHICAL LEADERSHIP

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2.2 Behavioral Approaches 31

2.3 IOWA studies 31

2.4 Michigan model 32

2.5 Ohio model 34