Chapter 3 Leading and trust

The Effect of Leadership Leadership – process of influencing employees to work toward the achievement of objectives Leader’s style affects the leader’s behavior Leadership and management are not the same Influencing employees is not the task of the manager alone Leadership is one of the five management functions

Leadership Theories Leadership Trait Theory Behavioral Leadership Contingency Leadership Theories Basic Leadership Styles Two-Dimensional Leadership Styles Leadership Grid Transformational Leadership Contingency Leadership Theory Leadership Continuum Normative Leadership Theory Situational Leadership Situational Supervision

Leadership Trait Theory Assumes that there are distinctive physical and psychological characteristics accounting for leadership effectiveness The Ghiselli Study is the most widely publicized trait theory study Identified six traits as being significant traits for effective leadership

The Ghiselli Study: Leadership Traits (1 of 2) Supervisory ability. Getting the job done through others Need for occupational achievement. Seeking responsibility Intelligence. The ability to use good judgment, reasoning, and thinking capacity

The Ghiselli Study: Leadership Traits (2 of 2) Decisiveness. The ability to sole problems and make decisions competently Self-assurance. Viewing oneself as capable of coping with problems Initiative. Self-starting in getting the job done with a minimum of supervision from one’s boss

Behavioral Leadership Theories Principal Theories Basic Leadership Styles Two-Dimensional Leadership Styles The Leadership Grid Transformational Leadership Assume that there are distinctive styles that effective leaders use consistently, or That good leadership is a rooted behavior

Basic Leadership Styles Autocratic The leader makes the decisions and closely supervises employees Democratic The leader allows participation in decisions and does not closely supervise employees Laissez-Faire The leader takes a leave-the-employees-alone approach

Two-Dimensional Leadership Styles University of Michigan Studies Job centered – same as initiating structure Concern for production Employee centered – same as consideration Concern for people Ohio State University Studies Initiating structure – the extent to which the leader takes charge as the employee performs the task Consideration – the extent to which the leader communicates to develop trust, friendship, support, and respect

Two-Dimensional Leadership Models High Consideration and Low Structure High Structure Low Consideration High Ohio State University 3 2 Consideration 4 1 Low Initiating Structure Low High Exhibit 8.1 University of Michigan Job-Centered Employee-Centered 4

Transformational Leadership (1 of 2) Focus is on top-level managers, primarily chief executive officers of large organizations Transformational leadership is about: Change Innovation Entrepreneurship

Transformational Leadership (2 of 2) Transformational leaders perform, or take the organization through, three acts, on an ongoing basis: Act 1. Recognizing the need for revitalization Act 2. Creating a new vision Act 3. Institutionalizing change

Charismatic Leadership Transactional Leadership

Contingency Leadership Theories Principal Theories Contingency Leadership Theory Leadership Continuum Normative Leadership Theory Situational Leadership Assume that the appropriate leadership style varies from situation to situation

Contingency Leadership Theory (1 of 2) Developed by Fred Fiedler Model is used to determine: if one’s leadership style is task or relationship oriented, and if the situation matches the leader’s style If there is no match, Fiedler recommends change the situation, rather than leadership style

Contingency Leadership Theory (2 of 2) Situational Favorableness The degree to which a situation enables the leader to exert influence over the followers Key variables 1. Leader-member relations 2. Task structure 3. Position power Leadership Style Determined by completing the Least Preferred Coworker (LPC) scales Determines if one’s leadership style is: task oriented or relationship oriented

Normative Leadership Theory Leadership Styles Decide Consult individually Consult group Facilitate Delegate Model developed by Vroom and Yetton Enables the user to select one of five leadership styles appropriate for the situation

Situational Leadership (1 of 2) Emphasis is on followers and their level of maturity Leader must properly judge or intuitively know followers’ maturity level and then use a leadership style that fits the level Readiness – the followers’ skills and willingness to do a job

Situational Leadership (2 of 2) Hersey and Blanchard developed four leadership styles: Telling. The leader defines the roles needed to do the job and tells followers what, where, how, and when to do the tasks Selling. The leader provides followers with supportive instructions, but is also supportive Participating. The leader and followers share in decisions about how best to complete a high-quality job Delegating. The leader provides little specific, close direction or personal support to followers

Situational Supervision (1 of 3) Adapted from the Situational Leadership model of Hersey and Blanchard Involves: Determining a preferred supervisory style Defining the situation Determining employee capability The effective supervisor adapts his or her style to meet the capabilities of the individual or group

Situational Supervision (2 of 3) Employee Capability Ability Do employees have the education, experience, skills, etc., to do the task without direction from the supervisor? Motivation Do the employees want to do the task? Supervisor-Employee Interactions Directive behavior The supervisor focuses on directing and controlling behavior to ensure the task gets done Supportive behavior The supervisor focuses on encouraging and motivating behavior

Situational Supervision (3 of 3) Supervisory Styles (S) Autocratic (S-A) High-directive / low-supportive behavior Consultative (S-C) High-directive / high-supportive behavior Participative (S-P) Low-directive / high-supportive behavior Laissez-Faire (S-L) Low-directive / low-supportive behavior Employee Capability Levels (C) Low (C-1) Employees can’t do the task without detailed directions Moderate (C-2) Employees have moderate ability and are motivated High (C-3) Employees are high in ability but may lack self-confidence or motivation Outstanding (C-4) Employees are very capable and highly motivated

Substitutes for Leadership (1 of 2) II. Characteristics of Task Clarity and routine Invariant methodology Provision of own feedback concerning accomplishment Intrinsic satisfaction I. Characteristics of Subordinates Ability, knowledge, experience, training Need for independence Professional orientation Indifference toward organizational rewards

Substitutes for Leadership (2 of 2) III. Characteristics of the Organization Formalization (explicit plan, goals, and areas of responsibility) Inflexibility (rigid, unbending rules and procedures) Highly specified and active advisory and staff functions Closely knit, cohesive work groups Organizational rewards not within the leader’s control Spatial distance between superior and subordinate

Diversity of Global Leadership (1 of 3) Most leadership theories were developed in the United States Thus, they have an American bias Key assumptions of American-based theories: Employee responsibility, rather than employee rights Self-gratification, rather than employee commitment to duty or altruistic motivation Democratic values rather than autocratic values Rationality, rather than spirituality, religion, or superstition

Diversity of Global Leadership (2 of 3) In the 1970s, Japan’s productivity rate was increasing faster than that of the United States Seven major differences between the two countries were identified. The Japanese: have a longer length of employment use more collective decision making use more collective responsibility evaluate and promote employees more slowly use more implicit mechanisms of control have more unspecialized career paths have a more holistic concern for employees

Diversity of Global Leadership (3 of 3) American-based theories may not be as effective in cultures based on different assumptions Autocratic leadership styles tend to be appropriate in high-context cultures e.g., Arab, Far Eastern, and Latin countries Participative leadership styles tend to be appropriate in low-context cultures e.g., U.S., Norway, Finland, and Sweden

Trust Levels of Trust 1. Deterrence-based trust 2. Knowledge-based trust 3. Identification-based trust Trust – is the positive expectation that another will not take advantage of you Trust is not simply given Trust is earned

Dimensions of Trust (1 of 4) Exhibit 8.8

Dimensions of Trust (2 of 4) Tips to Develop Your Competence Be conscientious Know your strengths and limitations Don’t brag Admit your mistakes Tips to Develop Your Integrity Tell the truth Keep your commitments Be fair

Dimensions of Trust (3 of 4) Tips to Develop Your Loyalty Invest heavily in loyalty Maintain confidences Don’t gossip negatively about individuals Be viewed as a collaborator, not a competitor Tips to Develop Your Consistency Keep your commitments Practice what you preach Be impartial

Dimensions of Trust (4 of 4) Tips to Develop Your Openness Self-disclose Accept others’ self-disclosure Accept diversity and conflict

Risk and Destroying Trust Developing trust through self-disclosure does include the risk of: being hurt disappointed taken advantage of The rewards of improved human relations and personal friendship are worth the risk