Chapter 14 Leadership Management 4th Edition Chuck Williams Prepared by Deborah Baker Texas Christian University

What Would You Do? 43rd Floor, Tyco Headquarters, New York City. The new CEO of Tyco is faced with $28 billion in debt, and the possibilities of bankruptcy Dennis Kozlowski’s reign as CEO is still embarrassing, when he used funds as his personal piggy bank How can you get people to see that with sound management, Tyco can be an exceptional company?

What Is Leadership? After reading these sections, you should be able to: explain what leadership is. describe who leaders are and what effective leaders do.

Differences Between Leaders and Managers Substitutes for Leadership 1

Leaders versus Managers Do things right Status quo Short-term Means Builders Problem solving LEADERS Do the right thing Change Long-term Ends Architects Inspiring & motivating 1.1 Adapted from Exhibit 14.1

Leaders versus Managers American organizations (and probably those in much of the rest of the industrialized world) are under led and over managed. They do not pay enough attention to doing the right thing, while they pay too much attention to doing things right. --Warren Bennis 1.1

Doing the Right Thing The Three M’s: Mission, Mentor, and Mirror 1.1 Business leaders can develop personal ethics by focusing on their mission, a mentor, and the mirror Develop a personal mission statement. Take care in choosing a mentor. Stand in front of the mirror to assess your ethical performance as a business leader. DOING THE RIGHT THING 1.1

Substitutes for Leadership Leadership substitutes subordinate, task, or organizational characteristics that make leaders redundant or unnecessary Leadership neutralizers subordinate, task, or organizational characteristics that interfere with a leader’s actions Leaders don’t always matter Poor leadership is not the cause of every organizational crisis 1.2

Leadership Substitutes and Neutralizers 1.2 Adapted from Exhibit 14.2

Who Leaders Are and What Leaders Do Leadership Traits Leadership Behavior 2

Knowledge of the Business Leadership Traits Leadership Traits Desire to Lead Honesty and Integrity Drive Self- Confidence Emotional Stability Cognitive Ability Knowledge of the Business 2.1 Adapted from Exhibit 14.3

What Really Works: Leadership Traits Intelligence 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% probability of success 75% Dominance probability of success 57% Extroversion probability of success 63% Traits and Perceptions of Leadership Effectiveness 2.1

What Really Works: Leadership Traits Charisma and Performance 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% probability of success 72% Charisma and Perceived Leadership Effectiveness probability of success 89% Charisma and Leader Satisfaction probability of success 90% Charisma and Leadership Effectiveness 2.1

Leadership Behaviors Initiating Structure Consideration The degree to which a leader structures the roles of followers by setting goals, giving directions, setting deadlines, and assigning tasks. Consideration The extent to which a leader is friendly, approachable, and supportive and shows concern for employees. 2.2

Blake/Moulton Leadership Grid High 1 2 3 4 5 6 7 8 9 1,9 Country Club Management 9,9 Team Management Middle of the Road 5,5 5,5 Concern for People 1,1 Impoverished Management 9,1 Authority-Compliance Low 1 2 3 4 5 6 7 8 9 Low Concern for Production High 2.2 Adapted from Exhibit 14.4

Situational Approaches to Leadership After reading these sections, you should be able to: explain Fiedler’s contingency theory. describe how path-goal theory works. discuss Hersey and Blanchard’s Situational Leadership theory. explain the normative decision theory.

Putting Leaders in the Right Situation: Fiedler’s Contingency Theory Group Performance = Leadership Style Situational Favorableness 3

Putting Leaders in the Right Situation: Fiedler’s Contingency Theory Least Preferred Coworker Situational Favorableness Matching Leadership Styles to Situations 3

Leadership Style: Least Preferred Coworker Leadership style is the way a leader generally behaves toward followers seen as stable and difficult to change Style is measured by the Least Preferred Co-worker scale (LPC) relationship-oriented task-oriented 3.1

Leadership Style: Least Preferred Coworker Scale 3.1

Situational Favorableness The degree to which a particular situation either permits or denies a leader the chance to influence the behavior of group members. Three factors: Leader-member relations Task structure Position power 3.2

Situational Favorableness 3.2 Exhibit 14.7

Matching Leadership Styles to Situations 3.3 Exhibit 14.8

Path-Goal Theory Path-Goal Theory A leadership theory that states that leaders can increase subordinate satisfaction and performance by clarifying and clearing the paths to goals and by increasing the number and kinds of rewards available for goal attainment. 4

Basic Assumptions of Path-Goal Theory Clarify paths to goals Clear paths to goals by solving problems and removing roadblocks Increase the number and kinds of rewards available for goal attainment Do things that satisfy followers today or will lead to future rewards or satisfaction Offer followers something unique and valuable beyond what they’re experiencing 4 Adapted From Figure 14.9

Path-Goal Theory 4 Subordinate Contingencies Leadership Styles Perceived Ability Locus of Control Experience Environmental Contingencies Task Structure Formal Authority System Primary Work Group Outcomes Subordinate satisfaction Subordinate performance Leadership Styles Directive Supportive Participative Achievement-Oriented 4 Adapted From Figure 14.10

Adapting Leader Behavior: Path-Goal Theory Leadership Styles Subordinate and Environmental Contingencies Outcomes 4

Leadership Styles Directive Supportive Participative clarifying expectations and guidelines Supportive being friendly and approachable Participative allowing input on decisions Achievement-Oriented setting challenging goals 4.1

Leadership Styles Martin Winterkorn of Audi uses a directive style. His employees know exactly what is expected of them.

Subordinate and Environmental Contingencies Perceived ability Locus of control Experience Subordinate Environmental Task structure Formal authority system Primary work group 4.2

Path Goal Theory: When to Use Leadership Styles 4.2 Adapted from Exhibit 14.11

Adapting Leadership Behavior Hersey and Blanchard’s Situational Leadership Theory Worker Readiness Leadership Styles 5

Worker Readiness The ability and willingness to take responsibility for directing one’s behavior at work Components of worker readiness: Job readiness Psychological readiness 5.1

Worker Readiness R4 R3 R2 R1 confident willing able insecure not willing confident willing not able insecure not able not willing 5.1

Leadership Styles Telling (R1) Selling (R2) Participating (R3) Delegating (R4) high task behavior low relationship behavior high relationship behavior low task behavior high relationship behavior low task behavior low relationship behavior 5.2

Normative Decision Theory Decision Styles Decision Quality and Acceptance 6

Decision Styles Solve the problem yourself Obtain information. Select a solution yourself. Share problem, get ideas from individuals. AI AII CI Share problem with group, get ideas. Make decision, which may or may not reflect input. with group. Together tries to reach a solution. Leader acts as facilitator. CII GII Leader solves the problem or makes the decision Leader accepts any decision supported by the entire group 6.1 Adapted from Exhibit 14.12

Decision Quality and Acceptance Using the right amount of employee participation: improves decision quality improves acceptance Decision tree helps leader identify optimal level of participation 6.2

Normative Theory Decision Rules to Increase Decision Quality Quality Rule If the quality of the decision is important, then don't use an autocratic decision style Leader Information Rule If the quality of the decision is important, and if the leader doesn't have enough information to make the decision on his or her own, then don't use an autocratic decision style Subordinate Information Rule If the quality of the decision is important, and if the subordinates don't have enough information to make the decision themselves, then don't use a group decision style 6.2

Normative Theory Decision Rules to Increase Decision Quality Goal Congruence Rule If the quality of the decision is important, and subordinates' goals are different from the organization's goals, then don't use a group decision style Problem Structure Rule If the quality of the decision is important, the leader doesn't have enough information to make the decision on his or her own, and the problem is unstructured, then don't use an autocratic decision style 6.2

Normative Theory Decision Rules to Increase Decision Acceptance Commitment Probability Rule If having subordinates accept and commit to the decision is important, then don't use an autocratic decision style Subordinate Conflict Rule If having subordinates accept the decision is important and critical to successful implementation and subordinates are likely to disagree or end up in conflict over the decision, then don't use an autocratic or consultative decision style Commitment Requirement Rule If having subordinates accept the decision is absolutely required for successful implementation and subordinates share the organization's goals, then don't use an autocratic or consultative style 6.2

Strategic Leadership After reading this section, you should be able to: explain how visionary leadership (i.e., charismatic and transformational leadership) helps leaders achieve strategic leadership.

Charismatic Leadership Transformational Leadership Visionary Leadership Charismatic Leadership Transformational Leadership 7

Charismatic Leadership Creates an exceptionally strong relationship between leader and follower Charismatic leaders: articulate a clear vision, based on values model values consistently with vision communicate high performance expectations display confidence in followers’ abilities 7.1

Kinds of Charismatic Leaders Ethical Charismatics provide developmental opportunities open to positive and negative feedback recognize others’ contributions share information concerned with the interests of the group Unethical Charismatics control and manipulate followers do what is best for themselves only want positive feedback motivated by self-interest 7.1

Ethical and Unethical Charismatic Leaders Charismatic Leader Behaviors Ethical Charismatics Exercising Power Power is used to serve others Creating the vision Followers help develop the vision Communicating with followers Two-way communication Accepting feedback Open to feedback Want followers to think and to questions the status quo Stimulating followers Developing followers Focus on developing followers Living by moral standards Three virtues: courage, sense of fairness, integrity 7.1 Adapted from Exhibit 14.15

Ethical and Unethical Charismatic Leaders Charismatic Leader Behaviors Unethical Charismatics Exercising Power Power is used to dominate others Creating the vision Vision comes solely from the leader Communicating with followers One-way communication, not open to input from others Accepting feedback Prefer yes-men, punish candid feedback Stimulating followers Don’t want followers to think, prefer uncritical acceptance of own ideas Developing followers Insensitive to followers’ needs Living by moral standards Follow standards only if they satisfy immediate self interests 7.1 Adapted from Exhibit 14.15

Reducing Risks of Unethical Charismatics Have a clearly written code of conduct Recruit, select, and promote managers with high ethical standards Train leaders how to value, seek, and used diverse points of view Celebrate and reward those who exhibit ethical behaviors 7.1

Transformational Leadership Generates awareness and acceptance of group’s purpose and mission Gets followers to accomplish more than they intended or thought possible 7.2

Components of Transformational Leadership Charisma or idealized influence Inspirational motivation Intellectual stimulation Individualized consideration 7.2