Michael A. Hitt C. Chet Miller Adrienne Colella Chapter 8 Leadership Michael A. Hitt C. Chet Miller Adrienne Colella Slides by Ralph R. Braithwaite

Cathy Benko at Deloitte Consulting What are your reactions to Cathy Benko’s story? What are your thoughts about her quote at the end of the section? “Life is not fair. Not everybody starts at the same place or has the same opportunities and support someone else might have. Don’t spend time wondering why you’re in the position you’re in. Just get out there and do as well as you can …” Exploring Behavior in Action

The Strategic Importance of Leadership Is there a link between leadership and organizational performance? Do organizations do enough to develop leadership skills? Strategic leadership involves developing a vision, empowering associates, building relationships, and building and maintaining a high-involvement, high-performance workforce.

Knowledge Objectives Define leadership and distinguish between formal and informal leaders. Explain the trait concept of leadership. Describe major behavioral theories of leadership and compare and contrast them. Explain contingency theories of leadership and how they relate leadership effectiveness to situational factors. Describe transformational leaders. Discuss topics of current relevance, including leader-member exchange, servant leadership, gender effects on leadership, and global differences in leadership.

The Nature of Leadership The process of providing general direction and influencing individuals or groups to achieve goals.

Warren Bennis Effective Leaders Effective leaders are concerned with “doing the right things” rather than “doing things right.” The right things are: Creating and communicating a vision of what the organization should be Communicating with and gaining support of multiple constituencies Persisting in the desired direction Creating the appropriate culture and obtaining the desired results

Trait Theory of Leadership Concept that certain traits help make people effective leaders. Early research suggested that the traits fell into three categories: Physical Characteristics Some Criticism Personality Characteristics Physical characteristics such as height and appearance Personality characteristics such as self-esteem and dominance Abilities such as intelligence and verbal fluency Criticized because the methodology used to identify traits was poor, list of traits associated with leadership grew so large it became meaningless, the results of the research were inconsistent, and no leadership trait was found to relate consistently to unit or organizational performance and different situations seemed to require different traits. Abilities

Traits Associated with Leadership Energy Insightfulness Appearance Integrity Intelligence Persistence Judgment Self-confidence Verbal fluency Sense of humor Achievement drive Tolerance for stress Adaptability Interpersonal skills Aggressiveness Prestige Enthusiasm Extroversion Tact Initiative Adapted from Exhibit 8-1: Common Traits Associated with Leadership

Six Core Traits of Leadership Drive Leadership Motivation Integrity Self- Confidence Cognitive Ability Knowledge of the Domain Drive – Ambition, persistence, tenacity, initiative Leadership motivation - Desire to lead, influence others, assume responsibility, and gain power; two types - socialized power motive, personalized power motive Integrity – Truthfulness, honesty, maintain consistency between what they say and what they do Self-confidence - Confident in their actions and show that confidence to others, learn from their mistakes, react positively to stress, even-tempered, display appropriate emotions Cognitive ability - High degree of intelligence, process complex information, deal with changing environments Knowledge of the domain - Knowledge of business in which they are engaged, make better decisions, anticipate future problems, understand implications of their actions

Reforming a “Rotten Apple” What are your thoughts regarding the leadership traits of Police Commissioner William Bratton? What are your thoughts regarding the changes he made that earned him the “Police Executive of the 20th Century” award and his face on the cover of Time?

Charismatic leaders inspire their followers to change their needs and values, follow visionary quests, and sacrifice their own personal interests for the good of the cause. John F. Kennedy Adolf Hitler Winston Churchill Eleanor Roosevelt Charisma Martin Luther King, Jr. Ronald Reagan Barbara Jordan

Behavioral Theories of Leadership University of Michigan Studies Ohio State University Studies

University of Michigan Studies Rensis Likert Daniel Katz Robert Kahn Job-Centered Leadership Style Employee tasks Methods for accomplishment Employee-Centered Leadership Style Employees’ personal needs Development of interpersonal relationships Job-centered leadership style – a behavioral leadership style that emphasizes employee tasks and the methods used to accomplish them Employee-centered leadership style - a behavioral leadership style that emphasizes employees’ personal needs and development of interpersonal relationships

Ohio State University Studies Edwin Fleishman Ralph Stogdill Consideration Leaders express friendship Develop mutual trust and respect Strong interpersonal relationships with staff Initiating Structure Well defined patterns of organization and communication Define procedures Delineate relationships with staff Emphasize goals and deadlines Assign tasks and identify performance expectations Consideration - a behavioral leadership style demonstrated by leaders who express friendship, develop mutual trust and respect, and have strong interpersonal relationships with those being led Initiating structure - a behavioral leadership style demonstrated by leaders who establish well-defined patterns of organization and communication, define procedures, and delineate their relationships with those being led

Behavioral Theories of Leadership Initiating Structure Consideration High Low A (Employee-Centered Style) C (Job-Centered Style) Adapted from Exhibit 8-2: Comparison of Consideration and Initiating Structure with Employee-Centered and Job-Centered Concepts

Contingency Theories of Leadership Fiedler’s Theory Path-Goal Theory

Fiedler’s Contingency Theory of Leadership Fred Fiedler Fiedler’s Contingency Theory of Leadership Effectiveness depends on leader’s behavioral style and the situation Leader style measured by the LPC (least preferred co-worker) scale Situational favorableness assessed by three things: Contingency theory – a theory of leadership that suggests the effectiveness of a leader depends on the interaction of his or her style of behavior with certain characteristics of the situation Leader-member relations – the degree to which a leader is respected, is accepted as a leader, and had friendly interpersonal relations Task structure – the degree to which tasks can be broken down into easily understood steps or parts Position power – the degree to which a leader can reward, punish, promote, or demote individuals in the unit or organization Leader-member relations Task structure Position power

___:___:___:___:___:___:___:___ Fiedler’s LPC Scale Esteem for Least Preferred Co-Worker Cooperative Uncooperative ___:___:___:___:___:___:___:___ 8 7 6 5 4 3 2 1 Friendly Unfriendly Low LPC Score Negative adjectives Task-oriented leader (task achievement needs first) High LPC Score More positive adjectives Relationship-oriented leader (interpersonal relationship needs first)

Situational Characteristics Leader-Member Relations The degree to which a leader is respected, accepted, and had friendly interpersonal relationships with followers Task Structure The degree to which tasks are broken down into easily understood steps or parts Position Power The degree to which a leader can reward, punish, promote, or demote individuals in the unit or organization

Fiedler’s Contingency Theory of Leadership Effectiveness Adapted from Exhibit 8-3: Fiedler’s Contingency Model of Leadership Effectiveness

Path-Goal Leadership Theory Leadership Style Contingency Factors Outcomes Martin Evans Robert House Path-goal leadership theory – a theory of leadership based on expectancy concepts from the study of motivation, which suggests that leader effectiveness depends on the degree to which a leader enhances the performance expectancies and valences of his or her employees.

Leader Effectiveness Leadership can effect employees’ expectancies and valences in several ways: Assign tasks that have high value (valence) Support employees’ efforts (effort → performance expectancy) Tie rewards to goal accomplishment (performance→reward instrumentality)

Path-Goal Leadership Theory Leader Behaviors Situational Factors Directive Leadership Supportive Leadership Achievement-Oriented Leadership Participative Leadership Subordinate Characteristics Work Environment Characteristics Effectiveness of leader behavior depends on these situational factors Leader Behaviors: Directive Leadership – Leadership behavior characterized by implementing guidelines, providing information on what is expected, setting definite performance standards, ensuring individuals follow rules Supportive Leadership - Leadership behavior characterized by friendliness and concern for individuals’ well-being, welfare, and needs Achievement-Oriented Leadership - Leadership behavior characterized by setting challenging goals and seeking to improve performance Participative Leadership - Leadership behavior characterized by sharing information, consulting with those who are led, and emphasizing group decision-making Situational Factors: Subordinate Characteristics – Needs, Locus of control, Experience, Ability Work Environment Characteristics - Task structure, Interpersonal relations in the group, Role conflict, Role clarity

Interaction of Leader Behavior and Situational Factors Locus of Control Need for Affiliation Need for Security Participative, Directive or Supportive Leaders Need for Growth Employee with Internal Locus of Control – Participative Leader Employee with External Locus of Control – Directive Leader Employee with High Need for Affiliation – Supportive Leader Employee with High Need for Security – Directive Leader Structured Task Work Environment – Supportive Leader Unstructured Task Work Environment – Directive Leader Employee with High Growth Need Strength – Complex Task Work Environment – Participative and Achievement Oriented Leader Employee with Low Growth Need Strength – Complex Task Work Environment – Directive Leader Employee with High Growth Need Strength – Simple Task Work Environment – Supportive Leader Employee with Low Growth Need Strength – Simple Task Work Environment – Supportive Leader

Interaction of Leader Behavior and Situational Factors Characteristics of the Work Environment Subordinate Characteristics Effective Leader Behaviors Situational Factors Internal locus of control External locus of control High need for affiliation High need for security High growth need Strengths Low growth need Structured task Unstructured task Complex task Simple task Supportive Directive Participative/ Achievement oriented Participative Adapted from Exhibit 8-4: Interaction of Leader Behavior and Situational Factors

Phil Jackson and Leadership Success Managerial Advice Phil Jackson and Leadership Success In terms of leadership, this means treating everyone with the same care and respect you give yourself – and trying to understand their reality without judgment. When we can do that, we begin to see that we all share human struggles, desires, and dreams. Phil Jackson What are your thoughts about this quote? Have you ever worked for a leader who approached the job like this? Does the leadership style one uses need to change based on each situation? Why? When would a leader want to be “invisible”?

Transactional Leadership A leadership approach that is based on the exchange relationship between followers and leaders. It is characterized by contingent behavior and active management-by-exception behavior. It is the degree to which leaders provide what followers want in response to good performance.

Four Characteristics of Transactional Leaders Understand what followers want to receive from their work, and attempt to give them what they desire, contingent on performance Clarify links between performance and reward Exchange rewards and promises of rewards for specified performance levels Respond to the interests of followers only if the followers are performing satisfactorily

Transactional Leadership Contingent Reward Behavior Clarify performance expectations Reward followers when expectations are met Active Management-by-Exception Behavior Clarifies minimal performance standards Punishes when standards are not met Consistently Monitors Performance

Transformational Leadership A leadership approach that involves motivating followers to do more than expected, to continuously develop and grow, to increase self-confidence, and to place the interests of the unit or organization before their own. Involves charisma, intellectual stimulation, and individual consideration.

Transformational Leaders Do Three Things Increase followers awareness of the importance of pursuing a vision or mission and the strategy required Encourage followers to place the interests of the unit, organization, or larger collective before their own personal interests Raise followers’ aspirations so they continuously try to develop and improve themselves while striving for higher levels of accomplishment

Intellectual Stimulation Individual Consideration Characteristics Charisma Intellectual Stimulation Individual Consideration

Charismatic Leaders Charisma Inspire emotion and passion in followers Get followers to identify with the leader Display confidence Communicate and live up to organizational values Optimistic and enthusiastic Charisma

Intellectual Stimulation Increase the followers’ focus on problems and develop new ways to solve them Reexamine assumptions Seek out different views Work to be innovative

Individual Consideration Support and develop followers to improve self-confidence and a desire to improve performance Provide individualized attention to followers Focus on followers’ strengths Act as teachers and coaches Individual Consideration

Common Behaviors Articulate clear, appealing vision Communicate the vision Delegate significant authority and responsibility Eliminate unnecessary bureaucratic restraints Provide coaching, training and developmental experiences Encourage open sharing of ideas and concerns Encourage participative decision making Promote cooperation and teamwork Modify structure to promote key values and objectives

Laissez-Faire Leadership Opposite approach to transformational leadership Not proactive React only to failures or chronic problems Avoid making decisions Often absent or uninvolved in followers’ activities Typically do not have positive outcomes

Commander Abrashoff Demonstrated confidence Focused on the vision D. Michael Abrashoff Demonstrated confidence Focused on the vision Linked tasks to the vision Went beyond self-interest Created intellectual stimulation Displayed individual consideration Would you want to work for someone like Abrashoff? Why or why not? Would his approach work in most work environments? Why or why not? USS Benfold

Some Conclusions Leaders can be trained to exhibit transformational leadership behaviors Leaders can display both transformational and transactional leadership styles Both transformational and transactional leadership can be positive

The Effects Transformational Leadership Outcomes Charisma Intellectual Stimulation Individual Consideration Outcomes Individual Outcomes Unit/Organization Outcomes Transactional Leadership Contingent Reward Behavior Active Management by Exception Dynamism of the task/organizational environment Adapted from Exhibit 8-5: The Effects of Transformational and Transactional Leadership

Ethical Leadership? Authentic Leadership! Thoughts? Dennis Kozlowski Experiencing Strategic OB

Ethical Leadership? Authentic Leadership! Ken Lay Jeff Skilling Andrew Fastow Thoughts? Experiencing Strategic OB

Ethical Leadership? Authentic Leadership! Martha Stewart Samuel Waksal Ryan Brant Thoughts? Thoughts? Experiencing Strategic OB

Experiencing Strategic OB Thoughts? Authentic Leaders Guided by values that focus on doing what’s right for their constituencies Try to act in accordance with their values Remain transparent “Walk the talk” Place equal weight on getting the task accomplished and developing associates Continuously develop themselves Have developed values and personal strengths they need to deal with ambiguous ethical issues Experiencing Strategic OB

Leader-Member Exchange (LMX) Different relationships with different followers – not all are treated the same High level of contribution is a factor Similarity to the leader is a factor Two groups - an In-group and an Out-group Mutual trust and support Levels of satisfaction Leader-member exchange – a model of leadership focused on leaders developing more positive relationships with some individuals, and having more positive exchanges with these individuals

Leader-Member Exchange (LMX) In Group Leader Exchange Follower Leader-member exchange – a model of leadership focused on leaders developing more positive relationships with some individuals, and having more positive exchanges with these individuals The in-group consists of a small number of trusted followers with whom the leader usually establishes a special higher quality exchange relationship. The out-group includes the followers with whom the relationship of the leader remains more formal. Out Group

Former CEO of Herman Miller Servant Leadership Valuing individuals Developing people Building community Conceptualizing Exhibiting foresight Displaying wisdom Desire to serve others Max De Pree Former CEO of Herman Miller

Gender Effects on Leadership Do women lead differently than men? Structural-cultural model of leader behavior Socialization model Structural-cultural model of leader behavior – A model holding that because women often experience lack of power, lack of respect, and certain stereotypical expectations, they develop leadership styles different from those of men Socialization model – A model proposing that all leaders in a particular organization will display similar leadership styles because all have been selected and socialized by the same organization. Thus, men and women will display similar leadership styles Both women and men may be effective leaders when style matches the situation

Global Differences Anglo cluster (ideal leader) Charismatic influence and inspiration, encouraging participation Diplomatic, delegating authority, allowing everyone to have their say Arabic cluster (ideal leader) Need to balance paradoxical set of expectations Anglo cluster – Australia, Canada, England, Ireland, New Zealand, South Africa (white sample), and the United States Arabic cluster – Egypt, Morocco, Kuwait, Qatar, and Turkey Expected not to differentiate themselves from others and have modest styles and Expected to have great deal of power and control, and to direct most decisions and actions

Global Differences Germanic cluster (ideal leader) Charismatic Highly team-oriented Participative Southern Asia cluster (ideal leader) Humane, participative, and charismatic Expected to be benevolent while maintaining a strong position of authority Germanic cluster – Austria, Germany, the Netherlands, and Switzerland South Asia cluster – India, Indonesia, Iran, Malaysia, Philippines, and Thailand

The Strategic Lens How should leaders approach individuals, units, and organizations suffering from poor performance? Why is ethical leadership often of utmost importance to various shareholders? Should women and men lead in different ways?

Questions