The Nature and Importance of Leadership CHAPTER ONE The Nature and Importance of Leadership

Learning Objectives Explain the meaning of leadership and how it differs from management. Describe how leadership influences organizational performance. Pinpoint several important leadership roles. Copyright © by Houghton Mifflin Company, Inc. All rights reserved

Learning Objectives Identify the major satisfactions and frustrations associated with the leadership role. Describe a framework for understanding leadership. Recognize how leadership skills are developed. Copyright © by Houghton Mifflin Company, Inc. All rights reserved

Leadership The ability to inspire confidence and support among the people who are needed to achieve organizational goals May be considered a long-term relationship, or partnership, between leaders and group members Copyright © by Houghton Mifflin Company, Inc. All rights reserved

Partnership The power between leader and group members is approximately balanced Four things necessary in a partnership: Exchange of purpose A right to say no Joint accountability Absolute honesty Copyright © by Houghton Mifflin Company, Inc. All rights reserved

Leadership versus Management Leadership deals with: Change Inspiration Motivation Influence Management deals with: Planning Organizing Directing Controlling Copyright © by Houghton Mifflin Company, Inc. All rights reserved

Leadership Matters The results of one study showed transactional leadership was not significantly related to performance charismatic leadership was slightly, positively related to performance in an uncertain environment, charismatic leadership was more strongly related to performance Copyright © by Houghton Mifflin Company, Inc. All rights reserved

Attribution Theory The process of attributing causality to events To simplify and understand complex social systems of human interaction, people interpret events in human terms Most organizational successes are attributed to heroic leaders Copyright © by Houghton Mifflin Company, Inc. All rights reserved

Leadership Does Not Matter Three major arguments against the importance of leadership include: Substitutes for leadership Leader irrelevance Complexity theory Copyright © by Houghton Mifflin Company, Inc. All rights reserved

Substitutes for Leadership Copyright © by Houghton Mifflin Company, Inc. All rights reserved

Leader Irrelevance Situational factors, outside the leader’s control, have the largest impact on outcomes High-level leaders have unilateral control over only a few resources, and the control over these resources is limited by obligations to stakeholders Firms choose new leaders whose values and behaviors are similar to previous leaders Copyright © by Houghton Mifflin Company, Inc. All rights reserved

Complexity Theory Organizations are complex systems that cannot be explained by the usual rules of nature Leaders and managers can do little to alter the course of the complex organizational system A company’s fate is determined by factors outside the leader/manager’s control Copyright © by Houghton Mifflin Company, Inc. All rights reserved

Leadership Roles Figurehead Spokesperson Negotiator Coach and motivator Team builder Team player Technical problem solver Entrepreneur Strategic planner Copyright © by Houghton Mifflin Company, Inc. All rights reserved

Sources of Leader Satisfaction A feeling of power and prestige A chance to help others grow and develop High income Respect and status Good opportunities for advancement A feeling of “being in on” things An opportunity to control resources Copyright © by Houghton Mifflin Company, Inc. All rights reserved

Leader Frustrations Too much uncompensated overtime Too many “headaches” Not enough authority to carry out responsibility Loneliness Too many problems involving people Too much organizational politics Copyright © by Houghton Mifflin Company, Inc. All rights reserved

A Framework for Understanding Leadership Leader characteristics and traits Leader behavior and style Group member characteristics Internal and external environment Copyright © by Houghton Mifflin Company, Inc. All rights reserved

Summary Leading is a major part of a manager’s job Although some research supports the view that the leader affects organizational performance, the concepts of substitutes for leadership, leader irrelevance, and complexity theory suggest that leadership matters little Copyright © by Houghton Mifflin Company, Inc. All rights reserved

Summary Leadership involves carrying out at least nine different roles There are many sources of both satisfaction and frustration to leaders Leadership is a function of leader characteristics and traits, leader behavior and style, group member characteristics, and the internal and external environments Copyright © by Houghton Mifflin Company, Inc. All rights reserved