1 Chapter 14 Leadership Designed & Prepared by B-books, Ltd. MGMT 2008 Chuck Williams

2 What Is Leadership? After reading these sections, you should be able to: 1.explain what leadership is. 2.describe who leaders are and what effective leaders do.

3 Leadership Differences between Leaders and Managers Substitutes for Leadership 1 1

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

5 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 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

6 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 Beyond the Book

7 Leadership Substitutes and Neutralizers Beyond the Book

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

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

10 Leadership Behaviors Initiating Structure 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

11 Blake/Moulton Leadership Grid1,9 Country Club Management 9,9 Team Management 1,1 Impoverished Management 9,1 Authority- Compliance 5,5 Middle of the Road 5, Concern for People Concern for Production High Low High 2.2

12 Situational Approaches to Leadership After reading these sections, you should be able to: 3.explain Fiedler’s contingency theory. 4.describe how path-goal theory works. 5.explain the normative decision theory.

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

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

15 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

16 Leadership Style: Least Preferred Coworker Scale 3.1

17 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

18 Situational Favorableness 3.2

19 Matching Leadership Styles to Situations 3.3

20 WellPoint CEO Adopts New Leadership Style Source: Fuhrmans, V. and Hymowitz, C. “WellPoint’s CEO Takes the Reins, Facing Challenge.” The Wall Street Journal. June 6, pg.B1. Beyond the Book The new WellPoint CEO Angela Braly had to manage the dismissal of finance chief David Colby, who violated company policy. Braly has taken a different approach to messy executive dismissals such as this by being open and up front about what occurred in order to quell rumors.

21 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 4

22 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 4

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

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

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

26 CEOs Promote Self, Brands Some top executives are achieving greater recognition for their own brands than for those of their companies. CEOs such as Martha Stewart and Oprah Winfrey have done this successfully. This can be dangerous when the person’s image competes with the company’s and when teamwork and innovation are stifled. Source: Hymowitz, C. “Some CEO’s Advertise The ‘Me’ Brand—With limited Success,” Wall Street Journal, 16 July Beyond the Book

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

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

29 Path Goal Theory: When to Use Leadership Styles 4.2

30 Adapting Leadership Behavior Worker Readiness Leadership Styles Leadership Styles Hersey and Blanchard’s Situational Leadership Theory Beyond the Book

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

32 Worker Readiness R4 R3 R2 R1 confident willing able confident willing able insecure not willing able insecure not willing able confident willing not able insecure not able not willing Beyond the Book

33 Leadership Styles Telling (R1) Selling (R2) Participating (R3) Delegating (R4) high task behavior low relationship behavior high task behavior low relationship behavior high task behavior high relationship behavior high task behavior high relationship behavior low task behavior high relationship behavior low task behavior low relationship behavior Beyond the Book

34 Normative Decision Theory Decision Styles Decision Quality and Acceptance 5 5

35 Decision Styles Solve the problem yourself Solve the problem yourself Obtain information. Select a solution yourself. Obtain information. Select a solution yourself. Share problem, get ideas from individuals. Select a solution yourself. Share problem, get ideas from individuals. Select a solution yourself. AIAIICI Share problem with group, get ideas. Make decision, which may or may not reflect input. Share problem with group, get ideas. Make decision, which may or may not reflect input. Share problem with group. Together tries to reach a solution. Leader acts as facilitator. Share problem with group. Together tries to reach a solution. Leader acts as facilitator. CIIGII Leader solves the problem or makes the decision Leader accepts any decision supported by the entire group 5.1

36 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 5.2

37  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 Normative Theory Decision Rules to Increase Decision Quality 5.2

38 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 5.2

39 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 5.2

40 Lightning-Fast Decisions May Be Wrong When Carl Camden became the CEO of Kelly Service, a staffing services provider, he quickly decided against placing substitute teachers. His team pitched him on the idea another 5 times, until he changed his mind. Kelly now places 3,700 substitute teachers per day and Camden acknowledges that he had fallen into the trap of trying to be all-knowing. Source: Lublin, J. “Recall the Mistakes of Your Past Bosses, So You Can Do Better,” Wall street Journal, 2 January 07, B1. Beyond the Book

41 Strategic Leadership After reading this section, you should be able to: 6.explain how visionary leadership (i.e., charismatic and transformational leadership) helps leaders achieve strategic leadership.

42 Visionary Leadership Charismatic Leadership Transformational Leadership 6 6

43 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 6.1

44 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 6.1

45 Ethical and Unethical Charismatic Leaders Exercising Power Power is used to serve others Creating the vision Followers help develop the vision Communicating with followers Two-way communication Accepting feedbackOpen to feedback Want followers to think and to questions the status quo Stimulating followers Developing followersFocus on developing followers Living by moral standards Three virtues: courage, sense of fairness, integrity Charismatic Leader Behaviors Ethical Charismatics 6.1

46 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 feedbackPrefer yes-men, punish candid feedback Don’t want followers to think, prefer uncritical acceptance of own ideas Stimulating followers Developing followersInsensitive to followers’ needs Living by moral standards Follow standards only if they satisfy immediate self interests 6.1

47 Reducing Risks of Unethical Charismatics 1.Have a clearly written code of conduct 2.Recruit, select, and promote managers with high ethical standards 3.Train leaders how to value, seek, and used diverse points of view 4.Celebrate and reward those who exhibit ethical behaviors 6.1

48 Transformational Leadership Generates awareness and acceptance of group’s purpose and mission Gets followers to accomplish more than they intended or thought possible 6.2

49 Components of Transformational Leadership 1.Charisma or idealized influence 2.Inspirational motivation 3.Intellectual stimulation 4.Individualized consideration 6.2

50 Leaders Need Peer Support, Just Like Their Employees CEOs say it’s tough to get advice they can trust: –consultants are too vague and interested in their contracts –lower-level executives are too deferential Some CEOs are starting to form peer groups to share advice and provide a sounding board for each other. As long as participants adhere to the SEC’s regulations, members can bring all kinds of issues before the group – and do. Source: P. Dvorak, “Do-It-Yourself Consulting: CEOs Gather to Swap Tips,” Wall Street Journal, 26 July 2007, A1. Beyond the Book