Leadership and Management Chapter 10 Leadership and Management PowerPoint Presentation by Charlie Cook © Copyright The McGraw-Hill Companies, Inc., 2004. All rights reserved.

Learning Objectives After studying the chapter, you should be able to: Describe what leadership is, when leaders are effective and ineffective, and the sources of power that enable managers to be effective leaders. Identify the traits that show the strongest relationship to leadership, the behaviors leaders engage in, and the limitations of the trait and behavioral models of leadership. Explain how contingency models of leadership enhance our understanding of effective leadership and management in organizations. © Copyright 2004 McGraw-Hill. All rights reserved.

Learning Objectives (cont’d) Describe what transformational leadership is, and explain how managers can engage in it. Characterize the relationship between gender and leadership. © Copyright 2004 McGraw-Hill. All rights reserved.

The Nature of Leadership 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 An individual who is able to exert influence over other people to help achieve group or organizational goals. © Copyright 2004 McGraw-Hill. All rights reserved.

The Nature 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 other leaders are very authoritarian. The challenge is for managers at all levels to develop an effective personal management style. © Copyright 2004 McGraw-Hill. All rights reserved.

Leadership Across Cultures Leadership styles 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. U.S. firms focus on short-run efforts and results. Japanese firms have a longer-run perspective. European firms fall somewhere between the U.S. and Japanese orientations. © Copyright 2004 McGraw-Hill. All rights reserved.

Sources of Managerial Power © Copyright 2004 McGraw-Hill. All rights reserved. Figure 10.1

Power: The Key to Leadership Legitimate Power The authority that a manager has by virtue of his or her position in the firm. Example: the power to hire or fire employees. Reward Power The ability of a manager to give or withhold tangible and intangible rewards. Example: awarding pay raises or providing verbal praise for good performance. Effective managers use reward power to signal to employees that they are doing a good job. © Copyright 2004 McGraw-Hill. All rights reserved.

Power: The Key to Leadership (cont’d) Coercive Power The ability of a manager to punish others. Examples: verbal reprimand, pay cut, and dismissal. Is limited in effectiveness and application; can have serious negative side effects. Expert Power Power that is based on special knowledge, skills, and expertise that the leader possesses. First-line and middle managers have the most expert power; usually is technical ability. © Copyright 2004 McGraw-Hill. All rights reserved.

Power: The Key to Leadership (cont’d) Referent Power Power that comes from subordinates’ and coworkers’ respect for the personal characteristics of a leader who has earned their loyalty and admiration. Usually held by and available for use by likable managers who are concerned about their workers. © Copyright 2004 McGraw-Hill. All rights reserved.

Empowerment: An Ingredient in Modern Management The process of giving workers at all levels more authority to make decisions and the responsibility for their outcomes. Empowerment helps managers: Get workers involved in the decisions. Increase worker commitment and motivation. Have time to focus on other issues. Effective managers usually empower substantial authority to workers. © Copyright 2004 McGraw-Hill. All rights reserved.

Leadership Models Trait Model An attempt to identify personal characteristics that are the causes for effective leadership. Research shows that certain personal “traits” 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. © Copyright 2004 McGraw-Hill. All rights reserved.

Traits and Personal Characteristics Related to Effective Leadership Intelligence Dominance Self-confidence High energy Tolerance for stress Integrity and honesty Maturity © Copyright 2004 McGraw-Hill. All rights reserved.

Leadership Models (cont’d) Behavioral Model Identifies two basic types of behavior 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 use to ensure that work gets done, subordinates perform acceptably, and the organization is efficient and effective. Both behaviors are independent; managers can be high or low on both behaviors. © Copyright 2004 McGraw-Hill. All rights reserved.

Contingency Models of Leadership 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. © Copyright 2004 McGraw-Hill. All rights reserved.

Fiedler’s Model Situation Characteristics How favorable a situation is for leading to occur. Leader-member relations—determines how much workers like and trust their leader. Task structure—the extent to which workers tasks are clear-cut; clear issues make a situation favorable for leadership. Position Power—the amount of legitimate, reward, and coercive power leaders have due to their position. When positional power is strong, leadership opportunity becomes more favorable. © Copyright 2004 McGraw-Hill. All rights reserved.

Fiedler’s Contingency Theory of Leadership © Copyright 2004 McGraw-Hill. All rights reserved. Figure 10.2

Fiedler’s Model in Application Combines considerations of leader-member relations, task structure, and position power to identify leadership situations. Identifies situations where given types of managers might perform best. Leader style is a characteristic managers cannot change; managers will be most effective when: Placed in situations that suit their leader style. The situation can be changed to fit the manager’s leader style. © Copyright 2004 McGraw-Hill. All rights reserved.

House’s Path-Goal Theory A contingency model of leadership proposing the effective leaders can motivate subordinates by: Clearly identifying the outcomes workers are trying to obtain from their jobs. Rewarding workers for high-performance and goal attainment with the outcomes they desire Clarifying the paths to the attainment of the goals, removing obstacles to performance, and expressing confidence in worker’s ability. © Copyright 2004 McGraw-Hill. All rights reserved.

Motivating with Path-Goal Path-Goal identifies four leadership behaviors: Directive behaviors: set goals, assign tasks, show how to do things. Supportive behavior: look out for the worker’s best interest. Participative behavior: give subordinates a say in matters that affect them. Achievement-oriented behavior: Setting very challenging goals, believing in worker’s abilities. Which behavior to be used depends on the nature of the subordinates and the tasks. © Copyright 2004 McGraw-Hill. All rights reserved.

The Leader Substitutes Model 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. © Copyright 2004 McGraw-Hill. All rights reserved.

Transformational Leadership Leadership that: 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. © Copyright 2004 McGraw-Hill. All rights reserved.

Being a Charismatic Leader An enthusiastic, self-confident transformational leader able to clearly communicate his or her vision of how good things could be by: Being excited and clearly communicating excitement to subordinates. Openly sharing information with employees so that everyone is aware of problems and the need for change. Empowering workers to help with solutions. Engaging in the development of employees by working hard to help them build skills. © Copyright 2004 McGraw-Hill. All rights reserved.

Transactional Leadership Leadership that motivates subordinates by rewarding them for high performance and reprimanding them for low performance. Transactional leaders “exchange” rewards for performance and punish failure. Transactional leaders push subordinates to change but do not seem to change themselves. Transactional leaders do not have the “vision” of the transformational leader. © Copyright 2004 McGraw-Hill. All rights reserved.

Gender and Leadership The number of women managers is rising but is still 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 there is no gender-based difference in leadership effectiveness. Women are more participative than men because they adopt the participative approach to overcome subordinate resistance to them as managers and they have better interpersonal skills. © Copyright 2004 McGraw-Hill. All rights reserved.

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. © Copyright 2004 McGraw-Hill. All rights reserved.