Leadership in organisational settings Chapter 12 Leadership in organisational settings

Learning objectives 12.1 Define leadership and shared leadership 12.2 List the main competencies of effective leaders and discuss the limitations of the competency perspective of leadership 12.3 Discuss the key elements of path–goal theory, Fiedler’s contingency model and leadership substitutes 12.4 Describe the four elements of transformational leadership, and distinguish this theory from transactional and charismatic leadership 12.5 Describe the implicit leadership perspective 12.6 Describe ethical leadership 12.7 Discuss similarities and differences between the leadership styles of women and men

Naomi Simson, Founder of RedBalloon Naomi Simson had a vision: to create a gifts company that is about memories, not possessions. Through passion, vision and hard work she turned her dream into a successful business. RedBalloon has sold over 1.3 million experiences, attracted over 2500 corporate clients and Simson received the National Telstra Business Women’s award for innovation

Leadership Defined Leadership is the ability to influence, motivate and enable others to contribute toward the effectiveness of the organisations of which they are members Points for discussion: Ask the students to name great leaders (business, political, social, spiritual). What makes them great leaders? What is leadership?

Shared Leadership The view that leadership is broadly distributed rather than assigned to one person Employees are leaders when they champion change in the company or team Shared leadership calls for: Formal leaders willing to delegate power Collaborative culture (employees support each other) Employee ability to influence through persuasion

Perspectives of Leadership Competency perspective Contingency perspective Implicit leadership perspective Transformational perspective

Competency Perspective Competencies: personal characteristics that lead to superior performance in a leadership role (e.g. skills, knowledge, values) Early research: very few ‘traits’ predicted effective leadership Emerging view: several competencies now identified as key influences on leadership potential and of effective leaders Teaching note: The competency perspective is an improvement of the ‘great man theory’ which was popular before World War II. See http://en.wikipedia.org/wiki/Great_Man_theory.

Eight Leadership Competencies Self-concept Drive Positive self-evaluation High self-esteem and self-efficacy Internal locus of control Inner motivation to pursue goals Inquisitiveness, action-oriented Integrity Truthfulness Consistency in words and actions Personality Extroversion, conscientiousness (and other traits)

Eight Leadership Competencies continued Cognitive/ practical intelligence Above average cognitive ability Able to solve real-world problems Knowledge of the business Understand external environment Aid intuitive decision making Leadership motivation High need for socialised power to achieve organisational goals Emotional intelligence Perceiving, assimilating, understanding, and regulating emotions

Authentic Leadership How well leaders are aware of, feel comfortable with and act consistently with their self-concept As people learn more about themselves, they gain a greater understanding of their inner purpose, behave consistently with their self-concept and their value system

Competency Perspective Limitations Implies a universal approach Alternative combinations of competencies might work just as well Assumes leadership is within the person But leadership is also about relations with followers Competencies refer to leadership potential, not performance

‘Tiger Women’: New Leaders in China Zhang Lan runs the successful South Beauty empire. As a child she learned to chi ku (eat bitterness), a term that means enduring hardship. After saving money in Toronto, she returned to China and invested her savings in the restaurant business, recognising a niche for high-end Western style restaurants. Zhang now owns over 40 restaurants around China

Path–Goal Leadership Originated with expectancy theory of motivation Paths = employee expectancies Goals = employee performance States that effective leaders ensure that employees who perform their jobs well receive more valued rewards than those who perform poorly Points for discussion: Ask students to describe the expectancy theory and the goal-setting theory before you explain the path–goal theory. Teaching note: Contingency is an OB anchor, and in this theory we can see an example of it.

Path–Goal Leadership Styles Directive Provide psychological structure to jobs Task-oriented behaviours Supportive Provide psychological support People-oriented behaviours Participative Encourage/facilitate employee involvement Achievement-oriented Encourage peak performance through goal setting and positive self-fulfilling prophecy Points for discussion: Which leadership style works better? It depends. The next slide shows on what.

Path-Goal Leadership Model

Path-Goal Contingencies

Other Contingency Leader Theories Situational leadership model Effective leaders vary style with follower ‘readiness’ Leader styles: telling, selling, participating and delegating Popular model, but lacks research support Fiedler’s contingency model Leadership style is stable, based on personality Best style depends on situational control Theory has problems, but uniquely points out inflexibility of leadership style

Leadership Substitutes Contingencies that limit a leader’s influence or make a particular leadership style unnecessary E.g. training and experience replace task-oriented leadership Research evidence: substitutes help, but do not completely substitute for real leadership

Transformational versus Transactional Leaders Transformational leaders Leading—changing the organisation to fit the environment Change agents Transactional leaders Confusing definitions, but originally about seeking employee compliance through rewards, punishment and negotiation Managing—achieving current objectives more efficiently Link job performance to rewards Provide staff with necessary resources Relates to contingency leadership theories (e.g. path–goal) Pre-Lesson Activity: Activity 12.2: What is your boss's preferred leadership style? See Connect website http://www.mcgraw-hill.com.au/mcshane/selfassess/sa1403.html. This will allow you to discuss the differences between transformational and transactional leadership.

Transformational versus Charismatic Leaders Some leadership models say charismatic leadership is essential for transformational leadership Emerging view: charisma differs from transformational leadership Charisma is a personal trait that provides referent power Does not necessarily attempt to change the organisation Transformational leadership is a set of behaviours to bring about change

Transformational Leadership Model Teaching note: A good and popular example is Steve Jobs. You can show this clip, narrated by Jobs, to discuss the leaders shown in it and Jobs’s transformational leadership: http://www.youtube.com/watch?v=O6ZqAJoyVD0.

Transformational Leadership Elements Create a strategic vision Image of company’s attractive future Motivates and bonds employees Leader champions the vision Communicate the vision Frame message around a grand purpose Share mental model of the future Use symbols, metaphors, stories Teaching note: You can continue to illustrate the TL Model through the example of Steve Jobs

Transformational Leadership Elements continued Model the vision Walk the talk Symbolise/demonstrate the vision through behaviour Employees trust leader more Build commitment to the vision Increased through communicating and modelling the vision Increased through employee involvement in shaping the shared vision

Evaluating Transformational Leadership Transformational leadership is important Higher employee satisfaction, performance, organisational citizenship, creativity Transformational leadership limitations Some models have circular logic Defines transformational leaders by their success rather than their behaviour (result: no predictive value) Universal theory Need a contingency-oriented theory Recognise differences across cultures

Implicit Leadership Perspective Follower perceptions of characteristics of effective leaders Leadership prototypes Preconceived image of effective leader, used to evaluate leader effectiveness Romance of leadership effect Amplify effect of leaders on organisational results Fundamental attribution error Need for situational control Video clip: To discuss the role of the followers in creating a leader, you can show this youtube clip: http://www.youtube.com/watch?v=fW8amMCVAJQ.

Ethical Leadership Ethical leadership is vital for organisational conduct and effectiveness Ethical leadership is determined by individual characteristics and demonstrated through leaders’ behaviours A strong sense of social obligation, an awareness of the impact of one’s behaviour on others and a concern for followers are at the heart of ethical leadership They are characterised by four virtues: prudence, courage, temperance and justice

Cultural Issues in Leadership Societal cultural values and practices affect leaders Shape leaders’ values and norms Influence decisions and actions Shape follower prototype of effective leaders Some leadership styles are universal, others differ across cultures ‘Charismatic visionary’ seems to be universal Participative leadership works better in some cultures than others

Gender Issues in Leadership Male and female leaders have similar task- and people-oriented leadership Participative leadership style is used more often by female leaders Evaluating female leaders Still receive negative evaluations as leaders due to prototypes and gender stereotypes But evidence that they are good at emerging leadership styles (coaching, teamwork)

Summary Leadership is one of the most researched, and possibly the most complex, topics in organisational behaviour This has resulted in an enormous volume of leadership literature, most of which can be organised into four perspectives: competency, contingency, transformational and implicit Further attention needs to be given to the ethical aspects of leadership, as well as to cultural and gender issues

Leadership in organisational settings Chapter 12 Leadership in organisational settings