Leadership and Culture The Difficulty of Strategic Change

Approaches to the Study of Leadership Trait theories (emphasize HR selection?) Behavioral theories (emphasize HR training?) Contingency theories

Trait Theories No set of traits that always occurs These traits are more strongly and consistently present in effective leaders: –drive (high energy level) –desire to lead –honesty/integrity –self-confidence –intelligence –job-relevant knowledge

Behavioral Theories OSU (cont’d.) Rating high on both dimensions shows mostly positive results, however –high i.s. can lead to turnover, grievances –high consideration can lead to lower ratings by the leader’s manager

Behavioral Theories Ohio State Studies - two categories of behavior –initiating structure - imposing organization on a situation –consideration - concern for others; mutual respect

Behavioral Theories University of Michigan studies also found two general dimensions –employee-oriented actions that were relationship driven –production-oriented actions that concentrated on the task UM studies viewed employee-oriented leaders as the most effective

Behavioral Theories Blake and Mouton’s managerial grid –concern for people –concern for production Team management (considered best) Country club management Task management Impoverished management M-O-R management

Fiedler Contingency Model Match up the leader’s approach to employee interaction with position power and task structure Least-preferred coworker scale - determines basic style Diagnose: –leader-member relations –position power –task structure

Fiedler Contingency Model Leadership style may be –task-oriented –relationship-oriented A relationship-oriented style is best in moderately favorable situations A task-oriented style is best in either very favorable or unfavorable situations

Path-Goal Theory Ensure unit’s goal compatibility with those of the organization Facilitate the progress of employees toward their goals Make valued rewards available in the workplace

Path-Goal Theory Leader behavior may be: –directive –supportive –participative –achievement-oriented Assumes that leaders can change their styles to in view of the work situation (in contrast to Fiedler’s model)

Charismatic Leadership Charisma is a leader trait It is a form of interpersonal attraction that inspires support and acceptance Theory first proposed by House (path-goal theory)

Charismatic Leadership Three elements –leader must envision future, set high expectations, and model behaviors consistent with expectations –leader must energize others –leader must enable others

Transformational Leadership Goes beyond ordinary expectations Inspires new ways of thinking Stimulates learning by employees Transmits a sense of mission

Power Bases Reward Referent Coercive Legitimate Information Expert adapted from French and Raven

Organizational Culture Values, norms and beliefs that are shared among employees and passed along to new organizational members Culture evolves, but often slowly Strong or weak - strong cultures exercise control

Organizational Culture Cultures may manifest themselves in –jargon –dress codes –unwritten rules Many of you work – what are some of the aspects of your organization’s culture?

Succession Insiders vs. outsiders –Insiders represent a “promotion from within” –Outsiders come from outside the organization but not necessarily from outside the industry Outsiders are more likely to be chosen if: –the last CEO was fired –no internal heir apparent –board has a large % of outside directors

Organizational Decline Stages of organizational decline –blinded - decline begins –inaction - will things get better on their own? –faulty action - could be escalation of commitment or some other mistaken action (executive replacement most likely in this stage)

Organizational Decline Stages of organizational decline (cont’d.) –crisis - resources may be getting scarce; last chance for reversal in competitive environment; otherwise, slow decline continues; bankruptcy (for reorganization) an option –dissolution - sell company, its assets; bankruptcy (for disposal) possible

Downsizing: A Tool for Decline Planned elimination of positions or jobs - a retrenchment strategy Guidelines –Eliminate unnecessary work (not across the board cuts) –Outsource –Think in terms of investments –Communicate –Invest in remaining employees –Transfer employees