Leadership

Chapter 12

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 Learning Objectives
1 Discuss what it means to be a leader.
2 Summarize what people want and what organizations need from
their leaders.
3 Explain how a good vision in developing good leadership.
4 Identify sources of power in organizations.
5 Interpret the association between personal characteristics and
effective leadership.
6 Describe behaviors that will make you a better leader and
identify when the situation calls for them.
7 Distinguish between charismatic, transformational, and
transactional leadership.
8 Identifying additional aspects and points of attention regarding
leadership
©McGraw-Hill Education.
 Management in Action
Indra Nooyi leads Pepsico to performance with purpose

Points of debate
Characteristics of Nooyi’s leadership style

Meaning of ‘responsible leadership’

©McGraw-Hill Education.
 Leadership
Leading: one of the four
management functions
Leadership: set of activities that
managers carry out to influence
others in achieving the
organizational goals = providing
direction
Effective leader: supports
people (via pay, promotion,
personal growth,…) and
organization:
• in formulating and
implementing strategy
• achieving goals
©McGraw-Hill Education.
Broad interest in the topic
Diverse opinions, views and
interpretations
So, how does a manager become a
good leader?
“Leadership is the marshalling of
skills possessed by a majority but
used by a minority. But it’s
something that can be learned by
anyone, taught to everyone, denied
to no one.” (W. Bennis & D. Nanus)
=> Leadership can be taught
“Management is doing things right;
leadership is doing the right things”
(Peter F. Drucker)
 What do the best leaders do?
• Challenge the process and create constructive change
• Inspire a shared vision, in function of goals, values and
mission of organization
• Enable others to act, via better access to information and
power to perform to full potential
• Model the way and overcome obstacles, by being the
example
• Motivate people through appreciation, rewards and by
giving responsibility

“Not the cry, but the flight of a o ‘collective wins’ over personal ‘quick
wild duck, leads the flock to fly wins’
and follow” (Chinese proverb) o communicator
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 Vision
“The leader’s job is to create vision”
(R. Swiggett – Kollmorgen)
Vision
Desirable long-term perspective of
an organization.
Best visions:
Are ideal: “standard of excellence
and a clear choice of positive values” To make a jigsaw puzzle you need a
Are unique: “different from other picture in front of you
organizations”
Sketch the picture = where is the
company heading? Strategy

Inspire towards strategy

Vision Reality

©McGraw-Hill Education. Copyright Tetra Images/Getty Images RF

 Why do visions fail?
Visions can be inappropriate or can fail
when:
• they reflect merely the leader’s
personal need.
• they ignore stakeholders’ signals or
needs.
• they are outdated.

Inspiration for vision development

• Open to opportunities
• Avoid status quo
• Networks with inspiring people
• Accidental, trial-&-error, serendipity

©McGraw-Hill Education. SOURCE: Adapted from Conger, J. A., “The Dark Side of
 Behaviours of effective followers
1. Volunteering to handle tasks or help accomplish goals.
2. Accepting assignments in a willing manner.
3. Exhibiting loyalty to the group.
4. Voicing differences of opinions, while supporting the
group's decisions.
5. Making suggestions.
6. Maintaining a positive attitude, even in confusing times.
7. Working effectively as a team member.
“Great things in business
are never done by one
person” (Steve Jobs, Apple)

©McGraw-Hill Education. SOURCE: Adapted from Holden Leadership Center, University of

 Leadership and power
Power: ability to influence others
Sources of power:
• Legitimate
• Reward
• Coercive
• Referent: personal characteristics appealing to others
• Expertise and knowledge

Currents trends and scientific insights

Shared power = Empowerment

Þ Increased motivation and innovation
Þ Problem-solving attitude
Þ Reduced stress among employees
Þ Increased customer satisfaction

©McGraw-Hill Education. SOURCE: Adapted from French, J. R. P. and Raven, B., “The
 Theories of leadership
Traditional theories of leadership
• Personal traits/attributes
• Leadership behaviour and style
• Situation

Contemporary perspectives on leadership

• Charismatic
• Transformational
• Transactional

Other aspects of leadership

©McGraw-Hill Education.
 Traditional theories of leadership
(1) Theories of leadership
traits/attributes
Focus on personal characteristics,
traits of leaders
First ideas (first half of 20th
century): “leaders are born, not
made”
From mid-1970s:
• One is not born as a leader
• Weak relationship with
leadership success
• Characteristics no
guarantee for success
• Some specific
characteristics may lead to
effective leadership

Focus on who leaders are as a person

©McGraw-Hill Education. Copyright REUTERS/Alamy Stock Photo

 Personal characteristics
• Drive
• Motivation to lead and to exert authority
• Honesty, integrity and credibility
• Self-confidence
• Intelligence
• Empathy
• Self-knowledge
• Flexibility
= good leaders have different leadership styles
= adjusting style as the situation and goals warrant

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 (2) Theories of leadership behaviour
Focus on what leaders do and the way they act
Identify behaviour and style of leadership
Two dimensions of leadership behaviour:
• Task oriented = output-oriented (speed, quality, quantity), directive,
focus on task performance, procedures and structure of work
• Employee oriented = focus on group maintenance and group
satisfaction, relationships, wellbeing, consideration, supportive, listening
Leaders can rate: high on both behaviours, low on both, or high on one
and low on the other behavior
Research shows:
o In some cases: productivity of organization is enhanced when
leaders rate high on both
o In general: productivity of organization higher in case of task
oriented leadership; employee satisfaction higher with employee
oriented leaders
LMX (Leader-Member-Exchange)-theorie
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 Leadership behavior and employee participation in decision making

Autocratic leadership (dictating) Conclusions of research University

• Leader makes decisions and of Iowa (1938-1939)
announces them to employees Þ Somewhat higher performance
• Centralized decision making Þ Most positive attitudes
• Limited participation
Democratic leadership (involving)
• Leader considers input from Þ May be too slow when speed is
others key
• Delegation of authority
• Participation is encouraged
Laissez-faire (giving freedom) Þ More negative attitudes and
• Freedom to employees to make lower performance
decisions and complete work
Later: mixed results
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 The leadership grid (Blake & Mouton)
“training model”
9
Country club Team
management management
Friendly Efficiency, trust
“Relationship oriented”
Concern for people

Middle-of-the-
road
management
Adequate

Authority-
Impoverished compliance
management management
1 Minimum effort Efficiency
Concern for production
1 9
“Task oriented”

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 Critique to Blake & Mouton model
Leadership is more complex than that
(9,9) not ideal per se, leaders not necessarily succesful
(1,1) not inadequate per se
Not one best leadership style
Situation also plays a role

©McGraw-Hill Education.
 (3) Situational leadership theories
“Universally important traits and
behaviours do not exist”
“Leader behavior depends on the
situation.”
Theories considering:
• the influence of environmental
factors on leadership behavior and The Vroom model of leadership
style
Fiedler’s contingency model
• which leadership style is most
effective in different situations Hersey and Blanchard’s situational
leadership theory
= contingency theories
The path-goal theory by Robert
House
Situation determines which leadership is most effective
If this is the context or situation, then this is the best leadership style to use

©McGraw-Hill Education. Copyright monkeybusinessimages/Getty Images RF

 Fiedler’s contingency model of effective leadership
Effective leadership depends on personal style of the leader and leader’s degree of power,
control, and influence over situation
Leadership style is fixed and either relationship-motivated or task-motivated
Depending on situation, leader needs to seek out positions that fit his or her style
Three situations (contingencies) determine the best type of leader for a specific situation
o Leader-member relations: the degree of confidence, trust, and respect employees
have for their leaders
Are leader-member relations good or poor? Is leader accepted by group members?
Rated as either good or poor
o Task structure: the degree to which job assignments are formalized, structured and
well defined
Is task structured or unstructured? Do followers know what they need to accomplish?
Rated as either high (structured) or low (unstructured)
o Position power: the degree of influence a leader has over activities such as hiring,
firing, discipline, promotions, salary increases
Is leader’s position power strong or weak? Does s/he have the power to assign work
and to reward or punish?
©McGraw-Hill Education.
Situational analysis
Fiedler’s model

Appropriate style

If situation is either very favourable or very unfavourable => task-motivated leader most
successful

If situation moderately favourable => relationship-motivated leader most successful

Jump to Appendix 2 for long description of image.

©McGraw-Hill Education. SOURCE: Organ Dennis and Bateman, Thomas, Organizational

 Fiedler’s model
Strengths
• Highlights impact of situational factors on leadership effectiveness
• Emphasizes importance of finding a fit between the situation and the leader’s
style
• Shows that working as a leader in your areas of strength has benefits
• Helps company reflect on which type of leader should be assigned to specific
work to optimize goal attainment

Example:
If priority in organization is cost reduction and structural change => task-motivated
leader
Reorganisation requiring input from employees => relation-motivated leader

Weaknesses
Under criticism: “assumption of style being fixed”= leaders cannot change their
styles but must be assigned to situations that suit their styles

New research: style is not fixed and may adapt to situation

Jump to Appendix 2 for long description of image.

©McGraw-Hill Education. SOURCE: Organ Dennis and Bateman, Thomas, Organizational

 Theory of situational leadership
Hersey and Blanchard
Characteristics and maturity of employees will determine
appropriate leadership and are the key situational factor.
Leader should adjust style to employees’ characteristics and
maturity

Job maturity Psychological maturity

Skills and technical knowledge Self-confidence and self-respect
that determine motivation for a
to perform task
certain task
Competence (able)
Commitment (willing)

©McGraw-Hill Education.
 Þ Leadership style: task-oriented versus relation-oriented

Maturity of Task-oriented Relation-oriented

followers
Low X
Moderate X
High

Limited academic evidence

Key point: important to treat people differently, as well as an individual

as s/he changes jobs or acquires more maturity

Model: popular in management training seminars

©McGraw-Hill Education.
 The path-goal theory (Robert House)
Most comprehensive and generally useful situational leadership theory
Focuses on what leaders can do to motivate followers in attaining goals
States that leader’s role is motivational. It is the leader’s task:
(1) to guide followers in attaining the goals
(2) to make the path to goals easier by removing obstacles, and providing
coaching and direction
(3) to raise satisfaction by increasing payoffs and rewards for attaining goals
(4) to be flexible = use various leadership styles according to personal
characteristics of followers and environmental factors of organization
The style supplements the situation:
Analyze and adapt your style to situational factors =
• characteristics of the follower
• characteristics of the workplace (=environment)

©McGraw-Hill Education.
 The path-goal theory

Personal characteristics of
followers
• Experience
• Locus of control Leadership behaviour
• Perceived ability • Directive
Results
• Supportive
• Performance
• Participative
• Job satisfaction
• Achievement-
Environmental factors oriented
• Task structure
• Authority system
• Work group

©McGraw-Hill Education.
 The path-goal theory
Two factors determine leadership style:
(1) Personal characteristics of followers
• Experience
• Locus of control: extent to which individuals see environment as
responsive to their own behaviour and have control over events
internal: ‘what happens to them is their own doing’
external: ‘no control over themselves; it is just luck or fate’
• Perceived ability: the way individuals perceive their own abilities to do the
job
(2) Environmental factors (workplace) experienced by followers in attaining
goals
• Task structure (routine? clearcut?…)
• Authority system (hierarchy? structured?…)
• Work group (conflictual? …)
©McGraw-Hill Education.
 The path-goal theory
Leaders are flexible and can change leadership style as needed

Style
Directive (telling what to do)
Supportive (showing concern)
Participative (consulting)
Achievement-oriented (setting
clear and challenging goals)
When?
Tasks ambiguous, unclear
People unexperienced
Boring jobs
Followers experience stress
Followers’ self-confidence needs a boost
Followers have strong internal locus of control
Tasks unclear
Employees are unexperienced or get bored

©McGraw-Hill Education.
 Contemporary perspectives on leadership
CHARISMATIC LEADERSHIP
Charisma
• Exceptional attractiveness - easy to spot, hard to define
• Emotional impact leading to admiration, trust, and beyond
• Can be taught
Charismatic leader
Dominant, self-confident, eloquent speaker, visionary
Personality and actions influence others to behave in certain ways
Þ Improved performance, which may enforce charisma
Willing to take (innovative) risk

Risk
Abuse of charismatic power; insecure followers more prone to abusive
charismatic leadership

©McGraw-Hill Education. Copyright Trinity Mirror/Mirrorpix/Alamy Stock Photo

 TRANSFORMATIONAL AND TRANSACTIONAL LEADERSHIP
Transformational leader Transactional leader
• Intellectually stimulating Sees management as a series of
transactions in which s/he uses her/his
• Motivates and inspires people to
power
develop extraordinary performance
in attaining goals Focuses on exchanges with other
members of organization
• Stresses empowerment and personal
development Guides employees towards
organizational goals by clarifying on task
• Offers new views on old problems
requirements, setting up structures,
• Key role in times of change and keeping things running smoothly
transformation
Less passionate
Approach:
• Communicating around vision => goals
• Confidence, perseverance, integrity
Transformational leadership may build
• Learning from mistakes
further upon transactional leadership.
Best leaders develop both.
Risk: temporary due to decline (arrogance,
hubris, corruption, financial issues,
controversies over rewards,…)
©McGraw-Hill Education.
 Other aspects of leadership
Level 5 leadership (“excellence”)
• Combining strong professional will and personal modesty
• Transformational and transactional combined
• Long-term, broad holistic focus
• Examples: Tim Cook, Satya Nadella
Authentic leadership
• Leader knows who s/he is, is trustworthy, ethically mature, sacrificing
individual interest for the common interest, self-critical.
• Examples: Margrethe Vestager, Michelle Obama

Note: Leadership position may be abused, by talking a good game, while

ignoring followers’ real needs, and putting self-interest first
=> Pseudo leadership
©McGraw-Hill Education.
 Other aspects of leadership in an organization

Servant-leadership Intergroup leadership

Serves others’ needs while
strengthening the organization,
through active listening, particularly
to disadvantaged stakeholders (e.g.,
concern for gender equality)
Leads collaborative performance
between different groups or
organizations
Example: joint-ventures, cross-
country collaborations, partnerships

Shared leadership Lateral leadership

Leadership rotates to the person Not a hierarchical relationship
with the key knowledge, skills, and
Invites colleagues at the same level
abilities at a particular time (in
to solve problems together
complex, creative environments)

©McGraw-Hill Education.
 Management in Action
Indra Nooyi leads Pepsico to performance with purpose

Points of debate
Characteristics of Nooyi’s leadership style

Meaning of ‘responsible leadership’

©McGraw-Hill Education.
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 In review
1 Discuss what it means to be a leader.
2 Summarize what people want and what organizations need from
their leaders.
3 Explain how a good vision in developing good leadership.
4 Identify sources of power in organizations.
5 Interpret the association between personal characteristics and
effective leadership.
6 Describe behaviors that will make you a better leader and
identify when the situation calls for them.
7 Distinguish between charismatic, transformational, and
transactional leadership.
8 Identifying additional aspects and points of attention regarding
leadership
©McGraw-Hill Education.