Management and Leadership Theories

in Entrepreneurship
 The Great Man Theory of Leadership espouses that great
leaders are born, not made. These individuals come into the
world possessing certain characteristics and traits not found
in all people.

The great man theory of leadership

states that some people are born with the
necessary attributes that set them apart
from others and that these traits are
responsible for their assuming positions of
power and authority.
 
 Behavioral Theories of Leadership
Behavioral Theory of leadership is a big leap from Trait Theory, as it was developed scientifically by
conducting behavior focused studies. The theory emphasizes that leadership capability can be learned, rather than
being inherent. This theory is based on the principle that a leader's behaviors can be conditioned in a manner that
one can have a specific response to specific stimuli.

Behavioral Theories of Leadership, also known as “The style approach to leadership” focuses on the
behavior of the leader and what leaders do and how they act. In the 1940s, two parallel studies on leadership were
in progress, one based on traits displayed by leaders, another on the behaviors exhibited by leaders.

 Traits theory assumes that leaders are born, rather than made.
 Trait theory concentrates on, what the leaders are.
 Great Man Theory and Traits Theory are focused on intrinsic personal characteristics
 Behavioral theories are based upon the belief that great leaders are made, not born.
 Behavioral theories concentrate on what leaders do.
 Behavioral approach is based on the leader's beliefs, values, and interpersonal relations.
 Considers the Leader's attitude, behavior, opinion, and concern about his followers/organization.
 Studies leadership behavior from the point of view of motivation, supervision, and authority.
 Behavioral theories assume that specific behavioral patterns of leaders can be acquired.
 People can learn to become leaders through teaching and observation.
 The contingency theory of leadership states the effectiveness of a leader is dependent on if
their leadership style and its appropriateness in the situation.

The contingency theory is an organizational theory that claims that there is no best way to
organize a corporation, to lead a company, or to make decisions. Instead, the optimal course of
action is contingent (dependent) upon the internal and external situation.

Contingency theories
Contingent leaders are flexible in choosing and adapting to succinct strategies to suit change
in situation at a particular period in time in the running of the organization.
Contingency Leadership Models

Fiedler’sContingency Theory
Situational Leadership Theory
Path-Goal Theory
Decision-Making Theory
 Fiedler’s Contingency Theory
 Fiedler's model assumes that personal leadership style can be either task-oriented or
relationship-oriented. Task-oriented leaders are focused on completing the job and tend to
be autocratic. Relationship-oriented leaders put people first and employ creativity and
teamwork to complete a project.
  Fiedler’s Contingency Theory of Leadership states that your effectiveness as a leader is
determined by how well your leadership style matches the situation.
 Situational Leadership Theory
 More formally called Hersey and Blanchard’s Situational
Leadership Theory, this contingency model focuses on
leadership style and the maturity of those being led. Situational
leadership theory puts forth the idea that leadership styles
hinge on four behaviors: telling, selling, participating and
delegating.
 The maturity levels range from an incompetence or
unwillingness to perform the task, to a willingness and ability to
perform.  The idea is that a successful leader will adapt
leadership techniques to fit the maturity level of the group in
question on a situational basis.
 Path-Goal Theory
 Path-Goal Theory combines two popular theories – goal-setting
and expectancy – into one.
 It puts forth the idea that effective leaders help those in their
direction attain their goals.
 Under this contingency model, leaders have the responsibility
of making sure their subordinates have the support and
information required to achieve the goals set forth.
 Essentially, this theory holds that effective leaders create
clear paths to help their subordinates achieve goals and that
they work to remove obstacles that stand in the way.
 How does
Path-Goal Theory Work?

1. The Leader’s job is to help

subordinates reach their goals
by directing, guiding, and
coaching them along the way.

2. Leaders must evaluate task and

subordinate characteristics and
adapt leadership style to these.

3. The theory suggests which style is

most appropriate for specific
characteristics.
 Decision-Making Theory

 Alsoknown as the Vroom-Yetton-Jago Decision-

Making Model of Leadership, this contingency
leadership model puts forth the idea that
effective leaders size up situations, assess them
and then determine how much support the group
will give toward the effort, adjusting their
preferred leadership style to fit.
 Charismatic leadership theory
Charismatic leadership theory is characterized by the structure where an influential
leader uses charm and appeal to stimulate others to act towards a common goal. This
shared goal or vision cultivates a strong foundation around the charismatic leader and molds
the group together to be more effective.
 Transactional leadership theory
 Transactional Leadership Theory was first described by Max Weber in
1947. He called it Legal – Rationality authority. He described that the
leaders are always – charismatic, authoritative, traditional, and
transactional by nature. This ideology was later developed by
MacGregor Burns and further expanded by Bernard Bass in his theory
of Leadership.

 Transactional leadership, also known as managerial leadership,

focuses on the role of supervision, organization, and group
performance. Leaders who implement this style focus on specific tasks
and use rewards and punishments to motivate followers.
 Transformational leadership theory

 Transformational leadership is a theory of
leadership where a leader works with teams or
followers beyond their immediate self-interests to
identify needed change, creating a vision to guide
the change through influence, inspiration, and
executing the change in tandem with committed
members of a group. This change in self-interests
elevates the follower's levels of maturity and ideals,
as well as their concerns for the achievement.