Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 7-1 Chapter 7 Other Leadership Perspectives: Upper Echelon and Leadership of Non-Profits

Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 7-2 Learning Objectives  Differentiate between micro and upper-echelon leadership  Describe the domain and roles of strategic leaders in the management of an organization  Identify the external and internal factors that impact strategic leaders’ discretion  List the individual characteristics of strategic leaders and their impact on leadership style  Contrast the four strategic leadership types and discuss the role of culture and gender in strategic leadership  Explain the processes through which strategic leaders manage their organization  Review issues of executive compensation and accountability  Describe the characteristics and challenges of leadership in nonprofit organizations

Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 7-3 Factors that Differentiate Micro and Macro Leadership  Who the leader is  Scope of responsibility  Focus  Effectiveness criteria

Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 7-4 The Domain of Strategic Leaders Structure Environment Strategy Leadership Technology Culture Strategic Leadership

Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 7-5 Dual Role of Strategic Leaders Leader Strategy Formulation Strategy Formulation Strategy Implementation Strategy Implementation Performance Moderating Factors Moderating Factors

Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 7-6 Moderators of Executive Discretion External Factors  Uncertainty  Type of industry  Market growth  Legal constraints Internal Factors  Stability  Size and structure  Culture  Stage of organizational development  TMT

Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 7-7 Characteristics of Upper Echelon Leaders: Themes Challenge Seeking  Risk taking  Openness to change  Willingness to innovate  Future orientation Need for Control  Delegation  Centralization  Uniformity of practices  Focus on process

Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 7-8 Four Strategic Leadership Types Desire for Control High Control Low Control Challenge Seeking High Challenge Seeking Low Challenge Seeking High-Control Innovator (HCI) Challenge-seeking leader who maintains tight control of the organization Participative Innovator (PI) Challenge-seeking leader who delegates control of the organization Status Quo Guardian (SQG) Challenge-averse leader who maintains tight control of the organizations Process Manager (PM) Challenge-averse leader who delegates control of the organization

Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 7-9 Culture and Gender  Culture  Different countries have different implicit leadership theories  Gender  Little research on role of gender in upper echelon  Fewer women in executive leadership positions

Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 7-10 How Executives Affect their Organization Leadership Direct decisions Allocation of resources Reward systems Selection of other leaders Promotions Role modeling Direct decisions Allocation of resources Reward systems Selection of other leaders Promotions Role modeling Environment Strategy Structure Technology Culture

Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 7-11 Direct Decisions  Vision  Mission  Strategy  Structure  Organizational culture  Selection of other leaders

Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 7-12 Allocation of Resources and Reward System  Decisions regarding funding and budgets  Allocation of resources to support goals  Formal rewards such as salary and bonuses  Informal rewards such as recognition  Promotion of other leaders and managers

Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 7-13 Setting the Norm and Role Modeling  Setting decision criteria and rules by which others make decisions  Active or subtle role modeling of wanted behaviors and style

Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 7-14 Responsibilities of Strategic Leaders  Organizational performance  Internal health – organizational culture  Accountability to internal and external constituents  Ethical behavior and role modeling

Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 7-15 Factors that Affect Executives’ Salaries  Size of organization  Industry competition  CEO power and discretion  Internationalization  High stress and instability

Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 7-16 Characteristics of Nonprofits  Operate without profit  Funds reinvested inside the organization  Public service mission  Voluntary board of directors  Funded through various private and public contributions

Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 7-17 Role of Leaders in Nonprofit Organizations Donors Individual donors Members Foundations Government grants Other contributors Donors Individual donors Members Foundations Government grants Other contributors Recipients Individuals Members Communities Other organizations Recipients Individuals Members Communities Other organizations LEADER

Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 7-18 Leadership Challenges in Nonprofits  Leaders must rely on participatory leadership to build consensus  Strong ethical requirements  Motivating and retaining employees  Finding and training future leaders

Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 7-19 Leadership Challenge  CEO involvement in nomination of board members helps assure that members with the right skills and expertise are selected  Those nominated by CEO may have a conflict of interest and a positive bias towards the CEO  Creation of a balance of members nominated by different stakeholders is essential

Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 7-20 Leading Change: Ramdas  CEO of the Global Fund for Women  Strong social mission to help women become independent  Tireless and passionate advocate  Strong presence and persuasive skills  Organization is tied to her own identity

Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 7-21 Leadership in Action: Leadership at P&G  P&G is well established in a highly competitive global market  Lafley and McDonald are both insider  Both focused on leadership development  McDonald is heavily invested in value- based leadership with emphasis on positive leadership and integrity  List of 10 leadership lessons  Focus on “changing people’s lives”

Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 7-22 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.