Management Lecture 17 Leadership

							Principles of Management

  Leadership in Organizations
         Nature of Leadership
• Leadership
  – The ability to influence and to motivate others to
    achieve organizational goals.
  – The process by which a person exerts influence over
    others and inspires, motivates and directs their
    activities to achieve group or organizational goals.
     • Effective leadership increases the firm’s ability to meet new
       challenges.
• Leader
  – Someone who advances organizational goals by
    influencing the attitudes and actions of others.
  – An individual who is able to exert influence over other
    people to help achieve group or organizational goals.
                  Nature of Power
• Power
   – The capacity to affect the decisions, attitudes and behaviour of others
• Legitimate Power
   – Power derived from a specific position in the organizations structure and
     the formal authority vested in it
• Reward Power
   – Power derived from the ability to provide valued rewards to others
• Coercive Power
   – Power derived from the ability to penalize others
• Informational Power
   – Power derived from the ability to control access to important information
• Expert Power
   – Power derived from the manager’s personal skills, technical knowledge
     and experience
• Referent Power
   – Power derived from the ability to inspire respect, admiration and loyalty
Sources of Power
             Empowerment
• Empowerment
  – The process of giving workers at all levels
    more authority to make decisions and the
    responsibility for their outcomes.
• Organizational Politics
  – The pursuit, protection, and use of power to
    achieve individual or group goals not
    necessarily directly related to organizational
    goals.
         Theories of Leadership
• Personal Leadership Style
   – The specific ways in which a manager chooses to influence
     others shapes the way that manager approaches the other tasks
     of management.
       • Leaders may delegate and support subordinates, while others are
         very authoritarian.
   – The challenge is for managers at all levels to develop an
     effective personal management style.
• Leadership styles may vary among different countries or
  cultures.
   – European managers tend to be more people-oriented than
     American or Japanese managers.
   – Japanese managers are group-oriented, while U.S managers
     focuses more on profitability.
   – Time horizons also are affected by cultures.
     Theories of Leadership
• Trait Theories
• Behavioural Theories
• Contingency Theories
               Trait Theories
• Traits
  – An individual’s personal characteristics
• Trait Model
  – Attempted to identify personal characteristics
    that cause for effective leadership.
     • Research shows that certain personal
       characteristics do appear to be connected to
       effective leadership.
     • Many “traits” are the result of skills and knowledge
       and effective leaders do not necessarily possess
       all of these traits.
           Behavioural Theories
• Behavioral Model
   – Identifies the two basic types of behavior that many leaders
     engaged in to influence their subordinates
       • Consideration: employee-centered leadership behavior indicating
         that a manager trusts, respects, and cares about subordinates
       • Initiating structure: job-oriented leadership behavior that managers
         engage in to ensure that work gets done, subordinates perform their
         jobs acceptably, and the organization is efficient and effective.
       • Both behaviors are independent; managers can be high or low on
         both behaviors.
• Autocratic Leader
   – A manager who tends to centralize authority and to make
     unilateral decisions.
• Democratic Leader
   – A manager who tends to delegate authority and to encourage
     participation in decision making.
         Behavioural Theories
• The Michigan Studies
  – Employee-Centered Leader Behaviour
  – Job-Centered Leader Behaviour
• The Ohio State Studies
  – Initiating Structure
  – Consideration
• Blake and Mouton’s Managerial Grid
  – A method developed to analyze leader behaviour
    using a grid with two axes – concern for people and
    concern for production.
      Contingency Theories
• The Fielder Contingency Model
• Path-Goal Theory
• The Vroom-Yetton-Jago Model
• Hersey-Blanchard Situational Leadership
  Theory
• Substitutes for Leadership Theories
                Fiedler’s Model
• Effective leadership is contingent on both the
  characteristics of the leader and of the situation.
• Leader style is the enduring, characteristic
  approach to leadership that a manager uses and
  does not readily change.
      • Relationship-oriented style: leaders concerned with
        developing good relations with their subordinates and to be
        liked by them.
      • Task-oriented style: leaders whose primary concern is to
        ensure that subordinates perform at a high level so the job
        gets done.
• Least Preferred Co-worker Scale
   – A questionnaire that scores managers’ description of
     the one person they have least enjoyed working with.
      House’s Path-Goal Theory
•    A contingency model which hold that the
     leader effectiveness depends on the ability to
     motivate and to satisfy employees to they will
     perform
•    Proposing the effective leaders can motivate
     subordinates by:
    1. Clearly identifying the outcomes workers are trying
       to obtain from their jobs.
    2. Rewarding workers for high-performance and goal
       attainment with the outcomes they desire
    3. Clarifying the paths to the attainment of the goals,
       remove obstacles to performance, and express
       confidence in worker’s ability.
      Vroom-Yetton-Jago Model
• A contingency theory of leadership that
  examines how situational factors affect the
  degree of employee participation in decision
  making.
• Four types of situational factors that affect
  decision:
  –   Decision Quality
  –   Decision Acceptance
  –   Concern for Employee Development
  –   Concern for Time
   Hersey-Blanchard Situational
             Theory
• A contingency theory of leadership that
  contends that leader behaviour should be
  altered according to the employees’
  readiness to perform tasks.
• Leader Styles:
  – Telling
  – Selling
  – Participating
  – Delegating
  The Leader Substitutes Model
• Substitutes – Situational variables that make leader
  behaviour unnecessary or redundant.
• Neutralizers – Situational variables that negate leader
  behaviour or prevent leaders from exhibiting particular
  behaviours.
• Leadership Substitute
   – Acts in the place of a leader and makes leadership unnecessary.
     Possible substitutes can be found in:
      • Characteristics of the subordinates: their skills, experience,
        motivation.
      • Characteristics of context: the extent to which work is interesting
        and fun.
   – Worker empowerment or self-managed work teams reduce
     leadership needs.
   – Managers should be aware that they do not always need to
     directly exert influence over workers.
   Current Trends in Leadership
• Transactional Leadership
   – An approach in which managers motivate employees to perform as
     expected by clarifying task requirements and by providing rewards in
     return for employee efforts to achieve the goals.
   – Use their reward and coercive powers to encourage high performance—
     they exchange rewards for performance and punish failure.
   – Push subordinates to change but do not seem to change themselves.
   – Do not have the “vision” of the transformational leader.

• Transformational Leadership
   – Makes subordinates aware of the importance of their jobs and
     performance to the organization by providing feedback to the worker.
   – Makes subordinates aware of their own needs for personal growth and
     development.
   – Motivates workers to work for the good of the organization, not just
     themselves.
      Gender and Leadership
The number of women managers is rising but is
  still relatively low in the top levels of
  management.
  – Stereotypes suggest women are supportive and
    concerned with interpersonal relations. Similarly, men
    are seen as task-focused.
     • Research indicates that actually there is no gender-based
       difference in leadership effectiveness.
     • Women are seen to be more participative than men because
       they adopt the participative approach to overcome
       subordinate resistance to them as managers and they have
       better interpersonal skills.
      Emotional Intelligence and
             Leadership
• The Moods of Leaders:
  – Affect their behavior and effectiveness as leaders.
  – Affect the performance of their subordinates.
• Emotional Intelligence
  – Helps leaders develop a vision for their firm.
  – Helps motivate subordinates to commit to the vision.
  – Energizes subordinates to work to achieve the vision.