1. McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved. 12 - 1

2. McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved. 12 - 2 Chapter 12 Leadership

3. McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved. 12 - 3 Learning Objectives After studying Chapter 12, you will know: what it means to be a leader how a good vision helps you be a better leader how to understand and use power the personal traits and skills of effective leaders the behaviors that will make you a better leader what it means to be a charismatic and transformational leader how to further your own leadership development

4. McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved. 12 - 4 Vision Vision a mental image of a possible and desirable future state of the organization having a vision and communicating it to others are essential components of great leadership the best visions are both: ideal - communicates a standard of excellence and clear choice of positive values unique - communicates and inspires pride in being different from other organizations

5. McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved. 12 - 5 Vision (cont.) Important points about visions a vision is necessary for effective leadership a person or team can develop a vision for any job many people, including managers who do not develop into strong leaders, do not develop a clear vision Visions can be inappropriate may reflect merely the leader’s personal needs may ignore stakeholders’ needs the vision must change when circumstances change

6. McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved. 12 - 6 Leading And Managing Ability to lead effectively sets excellent managers apart from average ones managers deal with ongoing organizational activities planning and budgeting routines, structuring the organization leadership includes orchestrating organizational change creating a vision for the firm and inspiring people to attain it management and leadership are both vitally important supervisory leadership - provides guidance, support, and corrective feedback for day-to-day activities of work unit members strategic leadership - gives purpose and meaning to organizations

7. McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved. 12 - 7 Leading And Following Organizations succeed or fail because of how well followers follow effective followers: are capable of independent thinking are actively committed to organizational goals are enthusiastic about ideas and purposes beyond their own self interest master skills that are useful to the organization hold performance standards that are higher than required

8. McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved. 12 - 8 Power And Leadership Power ability to influence other people Sources of power legitimate power - leader has organizational authority employees are obligated to comply with legitimate orders reward power - leader has control over valued rewards coercive power - leader has control over punishments referent power - leader has personal characteristics that appeal to others and make them desirous of the leader’s approval expert power - leader has knowledge that others feel will be of benefit to them

9. McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved. 12 - 9 Sources Of Power Control over punishments Appealing personal characteristics Authority Power Control over rewards Expertise

10. McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved. 12 - 10 Traditional Approaches To Understanding Leadership Leader traits trait approach - focussed on individual leaders to determine the personal characteristics that great leaders share characteristics that distinguish effective leaders drive - characteristics that reflect a high level of effort leadership motivation - they want to lead integrity - actions correspond to words self-confidence - expectation that one is able to overcome obstacles and make good decisions in the face of uncertainty knowledge of the business - ability to interpret information ability to perceive the needs of others and to adjust one’s behavior accordingly

11. McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved. 12 - 11 Traditional Approaches To Understanding Leadership (cont.) Leader behaviors behavioral approach - sought to identify what behaviors good leaders exhibit task performance - leader’s efforts to ensure that the work unit reaches its goals focus on work speed, quality and quantity of output, and rules group maintenance - actions taken to ensure satisfaction develop and maintain harmonious work relationships leader-member exchange theory - focuses on the leader’s behavior toward individuals focus is primarily on group maintenance behaviors potential for cross-cultural differences

12. McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved. 12 - 12 Traditional Approaches To Understanding Leadership (cont.) Leader behaviors (cont.) participation in decision making - leader behaviors that managers perform in involving their employees in making decisions autocratic leadership - makes decisions and then announces them to the group democratic leadership - solicits input from others uses consensus or majority vote to make the final choice

13. McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved. 12 - 13 Traditional Approaches To Understanding Leadership (cont.) Leader behaviors (cont.) effects of leader behavior decision styles democratic approach resulted in the most positive attitudes autocratic approach resulted in somewhat higher performance laissez-faire - leadership philosophy characterized by an absence of managerial decision making characteristics of the situation, leader, and the follower determine the appropriate decision-making style

14. McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved. 12 - 14 Traditional Approaches To Understanding Leadership (cont.) Leader behaviors (cont.) effects of leader behavior (cont.) performance and maintenance behavior - are independent of each other Ohio State studies - grievances and turnover: were lower when supervisor was high on maintenance behavior were higher when supervisor was high on task performance behavior when leader must be high on performance-oriented behavior, s/he should also be maintenance-oriented

15. McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved. 12 - 15 Traditional Approaches To Understanding Leadership (cont.) Leader behaviors (cont.) effects of leader behavior (cont.) performance and maintenance behavior (cont.) Michigan studies - most effective managers were task oriented effective managers also were relationship oriented taken together, Ohio State and Michigan research suggested that the ideal leader is always both performance and maintenance oriented Blake and Mouton’s Leadership Grid described a wide range of leadership styles recommended a 9,9 style that is high on concern for people and high on concern for production ignores the effect of the situation

16. McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved. 12 - 16 1 2 3 4 5 6 7 8 9 Concern for Production High Low 1 2 3 4 5 6 7 8 9 Concern for People High Low The Leadership Grid Team Management (9,9) Middle of the Road Management (5,5) Impoverished Management (1,1) Country Club Management (1,9) Authority- Compliance (9,1)

17. McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved. 12 - 17 Traditional Approaches To Understanding Leadership (cont.) Situational approaches to leadership leadership perspectives proposing that universally important traits and behaviors do not exist, and that effective leadership behavior varies from situation to situation requires the leader to first analyze the situation and then decide what to do Tannenbaum and Schmidt - three factors must be considered before deciding how to lead forces in the manager forces in the subordinate forces in the situation arguments remain valid today

18. McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved. 12 - 18 Traditional Approaches To Understanding Leadership (cont.) Situational approaches to leadership (cont.) Vroom model - focuses on how leaders go about making decisions seven situational factors used to analyze problems each based on a problem attribute scored as either high or low answering a series of questions about the problem attributes leads one to 14 possible endpoints of the analysis each endpoint recommends one of five decision styles decision styles indicate that there are several shades of participation use of the model ensures that important situational factors are considered

19. McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved. 12 - 19 Vroom’s Situational Factors For Problem Analysis DECISION SIGNIFICANCE IMPORTANCE OF COMMITMENT LEADER’S EXPERTISE LIKELIHOOD OF COMMITMENT GROUP SUPPORT FOR OBJECTIVES GROUP EXPERTISE TEAM COMPETENCE The significance of the decision to the success of the project or organization The importance of team members’ commitment to the decision Your knowledge or expertise in relation to this problem The likelihood that the team would commit itself to a decision that you might make on your own The degree to which the team supports the organization’s objectives at stake in this problem Team members’ knowledge or expertise in relation to this problem The ability of team members to work together in solving problems

20. McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved. 12 - 20 Vroom’s Model Of Leadership Style Importance of Commitment Decision Significance Team Competence Group Expertise Group Support Likelihood of Commitment Leader Expertise

21. McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved. 12 - 21 Vroom’s Model Of Leadership Style Instructions: The Matrix operates like a funnel. You start at the left with a specific decision problem in mind. The column headings denote situational factors which may or may not be present in that problem. You progress by selecting High or Low (H or L) for each relevant situational factor. Proceed down from the funnel, judging only those situational factors for which a judgment is called for, until you reach the recommended process.

22. McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved. 12 - 22 Use of authority by manager Area of freedom for subordinates Decide Consult Individually Consult GroupFacilitateDelegate 501037 Vroom’s Leader Decision Styles

23. McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved. 12 - 23 Traditional Approaches To Understanding Leadership (cont.) Situational approaches to leadership (cont.) path-goal theory - concerns how leaders influence subordinates’ perceptions of their work goals and the paths they follow toward attainment of those goals four pertinent leadership behaviors directive leadership - task performance-oriented behavior supportive leadership - group maintenance-oriented behavior participative leadership - decision style achievement-oriented leadership - behavior geared toward motivating people

24. McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved. 12 - 24 Traditional Approaches To Understanding Leadership (cont.) Situational approaches to leadership (cont.) path-goal theory (cont.) factors that determine appropriate leader behavior include: personal characteristics of the followers authoritarianism - degree to which individuals see the environment as responsive to their own behavior locus of control - extent to which individuals see the environment as responsive to their own behavior - internal - believe that what happens to them is their own doing - external - believe that luck or fate controls their lives ability - beliefs about their own abilities to do their assigned jobs

25. McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved. 12 - 25 Traditional Approaches To Understanding Leadership (cont.) Traditional Approaches To Understanding Leadership (cont.) Situational approaches to leadership (cont.) path-goal theory (cont.) factors that determine appropriate leader behavior include: environmental pressures with which followers must cope people’s tasks formal authority system of the organization primary work group theory suggests that the leader should: make the path to work goals easier to travel by providing coaching and direction reduce frustrating barriers to goal attainment increase opportunities for personal satisfaction by increasing payoffs to people for achieving performance goals

26. McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved. 12 - 26 Appropriateness of 1.Directive, 2.Supportive, 3.Participative, or 4.Achievement leader behaviors Characteristics of followers Environmental factors determine Followers’ goals and performance leading to The Path-Goal Framework

27. McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved. 12 - 27 Traditional Approaches To Understanding Leadership (cont.) Situational approaches to leadership (cont.) substitutes for leadership - factors in the workplace that can exert the same influence on employees that leaders would provide certain follower, task, and organizational factors are substitutes for task performance-oriented and group maintenance-oriented leader behaviors practical implication of this idea create situations in which substitutes for leadership operate leader will require less time in attempts to influence people

28. McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved. 12 - 28 Contemporary Perspectives On Leadership Charismatic leadership dominant and exceptionally self-confident, with a strong conviction in the moral righteousness of their beliefs communicate high expectations for and confidence in followers articulates ideological goals inspire their followers’ trust, confidence, acceptance, obedience, emotional involvement, affection, admiration, and higher performance

29. McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved. 12 - 29 Contemporary Perspectives On Leadership (cont.) Transactional leadership traditional management through business transactions leaders who manage through using their legitimate, reward, and coercive powers to give commands and exchange rewards for services rendered dispassionate leadership that does not inspire people to focus on the interests of the organization Transformational leadership moves beyond transactional leadership transforms a vision into reality and motivates people to transcend their personal interests for the good of the group

30. McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved. 12 - 30 Contemporary Perspectives On Leadership (cont.) Transformational leadership (cont.) generating excitement - three ways they are charismatic provide individualized attention - do not treat everyone alike assign challenging work to deserving people provide one-on-one mentoring to develop their people they are intellectually stimulating - arouse an awareness of problems and potential solutions articulate the organization’s opportunities, threats, strengths, and weaknesses stir the imagination and generate insights

31. McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved. 12 - 31 Transformational leadership (cont.) skills and strategies - rely on four have a vision communicate their vision build trust have a positive self-regard recognize their personal strengths and compensate for weaknesses know how to learn from failure transforming leaders - training available to stimulate transformational leadership research indicates that about half of trainees become transformational Contemporary Perspectives On Leadership (cont.)

32. McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved. 12 - 32 Contemporary Perspectives On Leadership (cont.) Post-heroic leadership even great top executives can’t solve all problems on their own effective leadership must permeate the organization leader must spread leadership abilities throughout the firm make heroes out of those who figure out what needs to be done and then do it A note on courage need courage to: create and execute a vision of greatness for your unit take reasonable risks

33. McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved. 12 - 33 Developing Your Leadership Skills People must work at developing their leadership abilities developmental experiences you should seek include: assignments build something from nothing take on project or task force responsibilities other people exposure to positive role models and people of diverse backgrounds hardships overcome failing ideas and deals confront others’ performance problems other events formal courses and experiences outside of work

34. McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved. 12 - 34 Classic Contingency Models Of Leadership Fiedler’s contingency model leader effectiveness depends on two factors the personal style of the leader task-motivated - primary emphasis on completing the task low least preferred coworker (LPC) relationship-motivated - emphasizes maintaining good interpersonal relationships high LPC degree to which the situation gives the leader power, control, and influence over the situation different situations dictate different leadership styles

35. McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved. 12 - 35 Fiedler’s Analysis Of Situations PoorGood Leader- member relations Structured Unstructured Structured Unstructured Task structure HighLowHighLowHighLowHighLow Leader position power Task- motivated Task- motivated Task- motivated Relation- ship- motivated Relation- ship- motivated Relation- ship- motivated Relation- ship- motivated Task- motivated Most effective leader in the situation Favorable for leader Unfavorable for leader

36. McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill© 2003 The McGraw-Hill Companies, Inc. All rights reserved. 12 - 36 Classic Contingency Models Of Leadership (cont.) Hersey and Blanchard’s situational theory manager should consider an employee’s psychological and job maturity job maturity - level of the follower’s skills and technical knowledge relative to the task performed psychological maturity - follower’s self-confidence and self- respect determines the degree to which task performance or maintenance behaviors are important maintenance behaviors are not important with followers of low or high levels of maturity performance behaviors important for followers with low maturity