MGMT 2008

Organisational Behaviour
Lectures 8 & 9: Leadership
Dr. Nicole Knight

1
 How Do We Develop Leaders?
Leadership cannot be taught but it can be learned
No substitute for learning from experience but needs
to be situated in a planned and integrated model of
leadership development
Learning from experience affected by the amount of
challenge, variety of task and feedback quality
Leadership theory helps leaders make sense of their
development as leaders, challenges their
assumptions and opens up new horizons

2
 Four Different Ways of Understanding
Leadership
Person: is it WHO ‘leaders’ are that makes them
leaders?
Result: is it WHAT ‘leaders’ achieve that makes
them leaders?
Process: is it HOW ‘leaders’ get things done that
makes them leaders?
Position: is it WHERE ‘leaders’ operate that makes
them leaders?
(Keith Grint, 2005)

3
The leadership role boils down to two
main issues:
Getting things
Figuring out what
done tothrough
do despite
a large
uncertainty,
and diverse
great
set of diversity,
people despite
and anhaving
enormous
little amount
direct of
potentially
control overrelevant
most ofinformation.
them.
(Strategic
(Power & Influence)
Thinking)

(+ Resilience)
4
 What is Leadership ?

“The process of influencing the activities of

an organized group in its efforts toward
goal setting and goal achievement”
(Stogdill, 1950, p. 3)

Three key components to this definition:

- an interpersonal process between one person and a
group
- can’t have ‘leaders’ without ‘followers’
- criterion for effective leadership = goal achievement
5
 What is Leadership ?
Leadership is persuasion, not domination, persons
who can require others to do their bidding because of
their power are not leaders. Leadership only occurs
when others willingly adopt, for a period of time, the
goals of a group as their own. Thus, leadership
concerns building cohesive and goal-oriented teams;
there is a causal and differential link between
leadership and team performance.
Hogan, Gordon, Curphy, & Hogan (1994)

6
 There are important distinctions between
management & leadership
LEADERS
MANAGERS
• Set
Plan:
direction:
create order,
disrupt,
eliminate
take risks,
risk longer
S/T term
• Align
Organise
Constituencies:
and staff: pull everyone together,
use formal structures, compliance
commitment
• Motivate
Control and
andSolve
inspire:
problems: stabilise
expand
CREATE energy
ORDER
PRODUCE CHANGE

7
 Leaders and Managers:
Distinguishing their roles
Establish
organizational
mission

Leader’s Job
Formulate
Strategy for
implementing
mission

Implement
Manager’s Job organizational
strategy

8
 What do you think are the key
qualities of effective leaders?
________________________________
________________________________
________________________________
________________________________
________________________________
________________________________

9
Does Leadership Matter in Organizations?

• Organization Bottom-line (Effectiveness)

• Team Performance
• Individual/Employee Performance
• Efficiency
• Quality
• Productivity
• Profit
• Growth
10
 Does Leadership Matter in
Organizations?
• Organizational Climate
• Organizational Culture
• Motivation
• Control
• Goal Consensus
• Employee Organizational Commitment
• Job Satisfaction
• Absenteeism
11
 Does Leadership Matter in
Organizations?
• Conflict/ cohesion
• Participation and Shared Influence
• Achievement Emphasis
• Communication
• Organizational Structure
• Organizational Politics
• Planning & Goal-Setting

12
 The Scientific Approach
 Deductive Approach
 Develop a theory of how leadership ought to
work
 Conduct rigorous analytical experiments to
test the theory
 Enormous effort put into this--yet results have
been disappointing
 Little in the way of consensus

13
 Traditional Leadership Theories
Leaders = ‘Influence Mandators’

Trait Theories
Style Theories
Contingency Theories

14
 Trait Theories

• Is there a set of characteristics

that determine a good leader?
– Personality?
– Dominance and personal presence?
– Charisma?
– Self confidence?
– Achievement?
– Ability to formulate a clear vision?

15
 The trait perspective of leadership –
The Great Man approach

• Traits = distinguishing personal characteristics that

are generally not mutable (changeable)

– Weak but consistent support for a variety of leadership

traits
Self-confidence Honesty/Integrity
Energy Need for achievement
Intelligence Dominance
Emotional stability Motivation to lead

16
 Trait Theories
– Are such characteristics
inherently gender biased?
– Do such characteristics
produce good leaders?
– Is leadership more than
just bringing about change?
– Does this imply that leaders are born not bred?

17
18
 Problems in Trait Theories of
Leadership

• No universal traits found that predict leadership in

all situations.
• Traits predict behavior better in “weak” than
“strong” situations.
• Unclear evidence of the cause and effect of
relationship of leadership and traits.
• Better predictor of the appearance of leadership
than distinguishing effective and ineffective
leaders.

19
 Behavioural Theories

• Imply that leaders can be trained – focus on the way

of doing things
– Structure based behavioural theories – focus on the leader
instituting structures – task orientated
– Relationship based behavioural theories – focus on the
development and maintenance of relationships – process
orientated
•• Trait
Traittheory:
theory:
Leaders
Leadersare
areborn,
born,not
notmade.
made.
•• Behavioral
Behavioraltheory:
theory:
Leadership
Leadershiptraits
traitscan
canbe
betaught.
taught.
20
 What are the trait and behavioral
leadership perspectives?
 Michigan leadership studies.
– Employee-centered supervisors.
• Place strong emphasis on subordinate’s welfare.
– Production-centered supervisors.
• Place strong emphasis on getting the work done.
– Employee-centered supervisors have more
productive work groups than production-centered
supervisors.

21
 What are the trait and behavioral
leadership perspectives?
 Ohio State leadership studies.
– Consideration.
• Concerned with people’s feelings and making things
pleasant for the followers.
– Initiating structure.
• Concerned with defining task requirements and other
aspects of the work agenda.
– Effective leaders should be high on both
consideration and initiating structure.

22
 What are the trait and behavioral
leadership perspectives?
 Leadership Grid.
– Developed by Robert Blake and Jane Mouton.
– Built on dual emphasis of consideration and
initiating structure.
– A 9 x 9 Grid (matrix) reflecting levels of concern
for people and concern for task.
• 1 reflects minimum concern.
• 9 reflects maximum concern.

23
What are the trait and behavioral leadership
perspectives?
 Leadership Grid — cont.
– Five key Grid combinations.
• 1/1 — low concern for production, low concern for people.
• 1/9 — low concern for production, high concern for people.
• 5/5 — moderate concern for production, moderate concern for
people.
• 9/1 — high concern for production, low concern for people.
• 9/9 — high concern for production, high concern for people.

24
 The Managerial
Grid
(Blake and Mouton)

EEXXHHI IBBI ITT

11–1
11–1
11–25
26
Types of Leadership Style

27
 Types of Leadership Style
• Autocratic:
– Leader makes decisions without reference to anyone else
– High degree of dependency on the leader
– Can create de-motivation and alienation
of staff
– May be valuable in some types of business where
decisions need to be made quickly and decisively

28
 Types of Leadership Style
• Democratic:
• Encourages decision making
from different perspectives – leadership may be
emphasised throughout
the organisation
– Consultative: process of consultation before decisions are
taken
– Persuasive: Leader takes decision and seeks to persuade
others that the decision is correct

29
 Types of Leadership Style
• Democratic:
– May help motivation and involvement
– Workers feel ownership of the firm and its ideas
– Improves the sharing of ideas
and experiences within the business
– Can delay decision making

30
 Types of Leadership Style
Laissez-Faire:
– ‘Let it be’ – the leadership responsibilities
are shared by all
– Can be very useful in businesses
where creative ideas are important
– Can be highly motivational,
as people have control over their working life
– Can make coordination and decision making
time-consuming and lacking in overall direction
– Relies on good team work
– Relies on good interpersonal relations
31
 Types of Leadership Style
Paternalistic:
• Leader acts as a ‘father figure’
• Paternalistic leader makes decision but may
consult
• Believes in the need to support staff

32
 Fiedler’s Contingency Model

The theory that effective groups depend

on a proper match between a leader’s
style of interacting with subordinates and
the degree to which the situation gives
control and influence to the leader.

33
 Fiedler’s Contingency Theory
– Least Preferred Co-worker (LPC) Scale
• Leaders who describe their least preferred coworker
favorably (pleasant, smart, and so on) are “high LPC”
and are considered more people-oriented.
• “Low LPCs” describe least preferred coworkers
unfavorably; they’re less people-oriented and more
task-oriented.

34
 Fiedler’s Contingency Theory

• Leader motivation
– Relationship oriented - high LPC score
– Task oriented - low LPC score
• Situational conditions
– Leader-member relations – favourable when there
is support, trust, and cooperation
– Task structure – favourable when there is high task
structure: clear goals, procedures, and objective
measures of performance
– Position power – favourable when supported by
the organization hierarchy 35
 What are the situational or contingency
leadership approaches?
 Hersey and Blanchard’s situational leadership
model.
– Emphasizes the situational contingency of
maturity, or “readiness,” of followers.
– Readiness is the extent to which people have the
ability and willingness to accomplish a specific
task.

36
 What are the situational or contingency
leadership approaches?
 Hersey and Blanchard’s situational leadership
model — cont.
– Leader style and follower readiness.
• A telling style is best for low readiness.
• A selling style is best for low to moderate readiness.
• A participating style is best for moderate to high
readiness.
• A delegating style is best for high readiness.

37
 Hersey and Blanchard (1984)Situational
Leadership Theory

High ng Se
Relationship Behavior

pati l lin
c i g
arti
P

ng Tellin
ati g
le g
De
High
Task Behavior
Able and Able and Unable and Unable and
willing unwilling willing unwilling
High Follower Readiness Low
Moderate 38
 What are the situational or contingency
leadership approaches?
 House’s path-goal theory of leadership.
– Emphasizes how a leader influences subordinates’
perceptions of both work goals and personal goals
and the links, or paths, found between these two
sets of goals.
– The theory assumes that a leader’s key function is
to adjust his/her behavior to complement
situational contingencies.

39
 Path-Goal Theory by House & Dessler
(1974)
• Leader behaviour types
1. Directive behaviour – schedules work, sets
performance standards, gives direction
2. Supportive behaviour – friendly,
approachable, expresses concern
3. Participative behaviour – uses consultative
processes, shares work problems, considers
suggestions
4. Achievement oriented – demanding and
supportive, seeks continual improvement
40
 Path-Goal Theory
• Subordinate characteristics
– Locus of control
– Self-confidence - subordinate perception of
their abilities – skills and experience

• Situational characteristics
– Task structure– clear and routine versus
challenging and ambiguous
– Team dynamics - work group norms and
influence
41
The Path-Goal Theory

42
 What are the situational or contingency
leadership approaches?
 Path-goal theory predictions regarding
directive leadership.
– Positive impact on subordinates when task is
clear; negative impact when task is ambiguous.
– More directiveness is needed when ambiguous
tasks are performed by highly authoritarian and
closed-minded subordinates.

43
 What are the situational or contingency
leadership approaches?
 Path-goal theory predictions regarding
supportive leadership.
– Increases satisfaction of subordinates working on
highly repetitive, unpleasant, stressful, or
frustrating tasks.

44
Participative Leadership Model (Vroom
& Yetton)
• Purpose:

– To motivate – increases enrichment and

autonomy

– To increase acceptance of the decision – in

issues of fairness or change

– To create quality – adds more information into

the problem solving

45
 Participative Model
• Downsides

– Time and energy – involves a slower process

and less experienced participants

– Lack or receptivity or knowledge – not

everyone is interested or skilled enough

– Organizational climate or leader attributes –

the organization or leader may not be
predisposed to use participatory methods

46
Participative Leadership Theory
• Four key considerations:

1. Quality requirement – can the decision turn out

badly; are all options equal in quality (is one option
really just as good as any other)
2. Commitment/Acceptance decision - will employees
be committed enough to the decision to implement it
properly
3. How cohesive is the group – does everyone cooperate
or is there conflict among group members or
between group and leader
4. Time availability – how efficiently must the decision
be made
47
 leader participation contingency variables

• QR Quality Requirement–is the technical quality of this decision

important
• LI Leader information – does the leader have sufficient information
to create a high quality decision
• ST Problem Structure – is the problem well structure
• CR (AR) Commitment/Acceptance Requirement- is subordinate
commitment to the decision important
• CP (AP) Commitment/Acceptance Probability – if you made the
decision yourself, is it reasonably certain that subordinates
would be committed to the decision
• GC Goal Congruence – Do subordinates share the organizational
goals to be attained by solving this problem
• CO Subordinate Conflict – Is conflict among subordinates likely in the
preferred solution
• SI Subordinate Information – Do subordinates have sufficient
information to make a high quality decision
48
 leader participation contingency
variables
• Added considerations:

TC Time Constraint – Is there a time constraint

that limits your ability to involve subordinates

MD Motivation Development – Is it important to

maximize the opportunities for subordinate
development

49
 Participative Leadership
• Issues:

– Not all subordinates are equally skilled or

interested

– Not all managers are equally skilled or interested

– Not all organizational cultures support flexible

decision styles

50
 Leader-Member Exchange (LMX)
• Examines the dyadic relationship between
leaders and followers.
• In-group members versus out-group members
based upon compatibility
• In-group members do extra things for the
leader, perform beyond the requirements of
the job and the leader in turn gives rewards
beyond those allotted to out-group members

51
 How does attribution theory
relate to leadership?
 Attribution theory recognizes that leadership
and its effects may not be able to be identified
and measured objectively.
 Leaders’ and subordinates’ behaviors are
significantly influenced by the attributions
each makes about the other’s behavior.

52
 How does attribution theory
relate to leadership?
 Attribution theory recognizes that leadership
and its effects may not be able to be identified
and measured objectively.
 Leaders’ and subordinates’ behaviors are
significantly influenced by the attributions
each makes about the other’s behavior.

53
 How does attribution theory
relate to leadership?
 Leadership prototypes.
– People’s mental image of what a model leader
should look like.
– A mix of specific and more general characteristics.
– Some core characteristics — like integrity and self-
efficacy — are probably universal across
leadership situations.

54
 How does attribution theory
relate to leadership?
 Exaggeration of the leadership difference.
– CEOs, particularly of large corporations, may have
little leadership impact on profits and
effectiveness compared to environmental and
industry forces.
– Romance of leadership.
• People attribute almost magical qualities to leadership.

55
 ‘New’ Leadership Theories
Leaders = ‘Managers of Meaning’

Charismatic Approaches
Transactional Leadership
Transformational Leadership
Level 5 Leadership

56
 Inspirational Approaches to
Leadership
Charismatic Leadership Theory
Followers make attributions of heroic or
extraordinary leadership abilities when they observe
certain behaviors.

Charismatics
CharismaticsInfluence
InfluenceFollowers
FollowersBy:
By:
1.
1. Articulating
Articulatingthe
thevision
vision
2.
2. Setting
Settinghigh
highperformance
performanceexpectations
expectations
3.
3. Conveying
Conveyingaanew
newset
setofofvalues
values
4.
4. Making
Makingpersonal
personalsacrifices
sacrifices
57
What are the new leadership perspectives, and
why are they especially important in high
performance organizations?
 Charismatic approaches to leadership.
– Charismatic leaders, by force of their personal
abilities, can have a profound and extraordinary
effect on followers.
– Characteristics of charismatic leaders include:
• High need for power.
• High feelings of self-efficacy.
• Conviction in the moral rightness of their beliefs.

58
What are the new leadership perspectives, and
why are they especially important in high
performance organizations?
Charismatic behaviors include:
• Role modeling.
• Image building.
• Articulating goals.
• Emphasizing high expectations.
• Showing confidence.
• Arousing follower motives.

59
Key Characteristics of Charismatic
Leaders
1. Vision and articulation. Has a vision—expressed as an idealized
goal—that proposes a future better than the status quo; and is able
to clarify the importance of the vision in terms that are
understandable to others.
2. Personal risk. Willing to take on high personal risk, incur high
costs and engage in self-sacrifice to achieve the vision.
3. Environmental sensitivity. Able to make realistic assessments of
the environmental constraints and resources needed to bring about
change.
4. Sensitivity to follower needs. Perceptive of others’ abilities and
responsive to their needs and feelings.
5. Unconventional behavior. Engages in behaviors that are
perceived as novel and counter to norms.

60
What are the new leadership perspectives, and
why are they especially important in high
performance organizations?
 Dark side versus bright side of charismatic
leadership.
– Dark side.
• Emphasizes personalized power.
• Leaders focus on themselves.
– Bright side.
• Emphasizes socialized power.
• Leaders empower followers.

61
62
 Transactional and
Transformational
Transactional Leaders
Leadership
• Contingent Reward
Leaders who guide or • Management by
motivate their followers in Exception (active)
• Management by
the direction of established
Exception (passive)
goals by clarifying role and • Laissez-Faire
task requirements.

Transformational Leaders • Idealized Influence

Leaders who provide • Inspiration Motivation

• Intellectual Stimulation
individualized consideration
• Individual Consideration
and intellectual stimulation,
and who possess charisma.
63
What are the new leadership perspectives, and why are they
especially important in high performance organizations?

 Transactional leadership.
– Involves leader-follower exchanges necessary for
achieving routine performance agreed upon
between leaders and followers.
– Leader-follower exchanges involve:
• Use of contingent rewards.
• Active management by exception.
• Passive management by exception.
• Abdicating responsibilities and avoiding decisions.

64
Characteristics of Transactional
Leaders
Contingent Reward: Contracts exchange of rewards for
effort, promises rewards for good performance, recognizes
accomplishments.
Management by Exception (active): Watches and
searches for deviations from rules and standards, takes
corrective action.
Management by Exception (passive): Intervenes only if
standards are not met.

65
 Transactional Theories
– Focus on the management
of the organisation
– Focus on procedures and efficiency
– Focus on working to rules
and contracts
– Managing current issues
and problems

66
 Transactional Leaders

• Power is derived through our acceptance of

organizational structures and hierarchy
• Through the ability to reward and punish

• The leader clears and defines the pathway so that

followers know what is expected
• Takes into consideration followers needs

67
What are the new leadership perspectives, and why are they
especially important in high performance organizations?

 Transformational leadership occurs when

leaders:
– Broaden and elevate their followers’ interests.
– Generate awareness and acceptance of the
group’s purposes and mission.
– Stir their followers to look beyond their own self-
interests to the good of others.

68
 Transformational leaders

• Influence comes from follower acceptance

of values and vision which guide all
decisions and behaviours

• Transformational Leaders:
– Intellectually stimulate followers
– Give individualized consideration
– Are charismatic

69
What are the new leadership perspectives, and why are they
especially important in high performance organizations?

 Dimensions of transformational leadership.

– Charisma.
• Provides vision and a sense of mission; and instills
pride, respect, and trust in followers.
– Inspiration.
• Communicates high expectations, uses symbols to
focus efforts; expresses important purposes in simple
ways.

70
What are the new leadership perspectives, and why are they
especially important in high performance organizations?

 Dimensions of transformational leadership —

cont.
– Intellectual stimulation.
• Promotes intelligence, rationality, and careful problem
solving.
– Individualized consideration.
• Provides personal attention, treats each employee
individually, and coaches and advises.

71
What are the new leadership perspectives, and why are they
especially important in high performance organizations?

 Transformational leadership is likely to be

strongest at the top-management level.
 Transformational leadership is found through
the organization.
 Transformational leadership operates in
combination with transactional leadership.

72
 Transformational Leaders…
 Do not accept the status quo
 Create a graphic and compelling vision of the future
 Act as role models
 Are often referred to as “tough”
 Energise and inspire others
 Are said to be “charismatic” (Greek = gift)
 Are very instrumental in times of turbulence / crises
 Provide sense of individual consideration
 Provide stimulation (intellectual and emotional)
 May be able to train people in transformational
characteristics
(James MacGregor Burns, 1978)

73
Full Range of Leadership Model

13–74
 Level 5 Leadership Hierarchy
Level 5: Executive builds enduring greatness through a paradoxical
blend of personal humility and professional will
Level 4: Effective Leader catalyses commitment to vigorous
pursuit of a clear and compelling vision, stimulating higher performance
standards
Level 3: Competent Manager organises people and
resources toward the effective and efficient pursuit of predetermined
objectives
Level 2: Contributing Team Member contributes
individual capabilities to the achievement of group objectives and works
effectively with others in a group setting
Level 1: Highly Capable Individual makes productive
contributions through talent, knowledge, skills and good work habits
(Jim Collins, 2001, Good to Great)

75
 View from the Top:
‘Level 5’ Leaders
“Are a study in duality: they are modest and willful, shy and
fearless. They act with quiet, calm determination and they rely
principally on inspired standards, not inspiring charisma, to
motivate. They channel their ambition into the company, not
the self. They also ‘look in the mirror, not the window, to
apportion responsibility for poor results, never blaming other
people, external factors or bad luck. Similarly, they look out of
the window to apportion credit for the company’s success to
employees, external factors or good luck.” (Jim
Collins, 2001, Good to Great)

76
 Neutralizers of leadership
People oriented Task oriented
leadership leadership

-Knowledgeable, experienced subordinates x

-Subordinates with high need for independence x x
-”Professional” subordinates x x
-Subordinates indifferent to organizational rewards x x

-Subordinates doing routine or standardized work x

-Task has built in feedback x
-Task is intrinsically satisfying x
-Organization is highly formalized (written rules) x
-Work group is cohesive x x
-Rewards cannot be affected by the supervisor x x
-Large distance between supervisor and subordinate x x

77
 Exercise: What are the
neutralizers/substitutes?

• Dwayne is an extremely experienced sales

person of sophisticated electronic equipment.
He has a M.Sc. in electrical engineering and is
on the road 11 months of the year. He really
enjoys his job and likes the commissions he
receives.

78
 Four Important
New Directions in Leadership

Leadership and Emotions

Leadership and Culture
Shared Leadership
Authentic & Moral Leadership

79
 Leadership and Emotions
“An emotionally intelligent leader can monitor
his or her moods through self-awareness,
change them for the better through self-
management, understand their impact
through empathy, and act in ways that boost
others’ moods through relationship
management”

(Goleman, Boyatzis & McKee, 2001)

80
 Leadership and Culture
“Theoretical work and and practical application
in non-American contexts will inevitably move
leadership theory away from its overly
American emphases and biases towards a
more international perspective”

(James
MacGregor Burns, 2005)

81
 Trust: The Foundation of
Trust
Leadership
A positive expectation that another will not—
through words, actions, or decisions—act
opportunistically.
Trust is a history-dependent process (familiarity)
based on relevant but limited samples of
experience (risk).

82
 Dimensions of Trust
• Loyalty
Integrity
– the
honesty
willingness
and truthfulness.
to protect and save face for another person.
• Openness
Competence
– reliance
an individual’s
on thetechnical
person toand
giveinterpersonal
you the full truth.
knowledge and skills.
• Consistency
– an individual’s reliability, predictability, and good judgment in handling
situations.

83
Trust and Leadership

Leadership
Leadership

TRUST
TRUST
and
and
INTEGRITY
INTEGRITY

13–84
 Three Types of Trust
Deterrence-based Trust
Trust based on fear of reprisal if the trust is violated.

Knowledge-based Trust
Trust based on behavioral
predictability that comes
from a history of interaction.

Identification-based Trust
Trust based on a mutual understanding of each
other’s intentions and appreciation of the other’s
wants and desires.
13–85
Contemporary Leadership Roles:
Mentor
Mentoring
A senior employee who Mentoring
MentoringActivities
Activities: :
sponsors and supports a •• Present
Presentideas
ideasclearly
clearly
less-experienced
•• Listen
Listenwell
well
employee (a protégé).
•• Empathize
Empathize
•• Share
Shareexperiences
experiences
•• Act
Actas
asrole
rolemodel
model
•• Share
Sharecontacts
contacts
•• Provide
Providepolitical
political
guidance
guidance

13–86
Contemporary Leadership Roles:
Self-Leadership
Self-Leadership
A set of processes Creating
Creatingself
selfleaders
leaders: :
• • Model self-leadership.
through which Model self-leadership.
individuals control • • Encourage employees to
Encourage employees to
create
createself-set
self-setgoals.
goals.
their own behavior.
• • Encourage the use of self-
Encourage the use of self-
rewards.
rewards.
• • Create positive thought
Create positive thought
patterns.
patterns.
• • Create a climate of self-
Create a climate of self-
leadership.
leadership.
• • Encourage self-criticism.
Encourage self-criticism.

13–87
Factors Affecting Style

88
 Factors Affecting Style
• Leadership style may be dependent
on various factors:
– Risk - decision making and change initiatives
based on degree of risk involved
– Type of business – creative business
or supply driven?
– How important change is –
change for change’s sake?
– Organisational culture – may be long embedded
and difficult to change
– Nature of the task – needing cooperation? Direction? Structure?

89
90