1. Chapter 14 Copyright ©2009 by Cengage Learning Inc. All rights reserved 1 Chapter 14 Leadership

2. Chapter 14 Copyright ©2009 by Cengage Learning Inc. All rights reserved 2 What Would You Do? HP’s previous CEO left HP without a clear strategic vision, and confusing organizational structures and processes. As people have taken a backseat to profits, a deep sense of distrust has pervaded the company, affecting morale and performance. Hewlett-Packard Headquarters, Palo Alto, California. How do you clear up the company’s strategic vision? How do you regain employee trust?

3. Chapter 14 Copyright ©2009 by Cengage Learning Inc. All rights reserved 3 What Is Leadership? After reading these sections, you should be able to: 1.explain what leadership is. 2.describe who leaders are and what effective leaders do.

4. Chapter 14 Copyright ©2009 by Cengage Learning Inc. All rights reserved 4 Leadership Differences Between Leaders and Managers Substitutes for Leadership 1 1 Leadership is the process of influencing others to achieve group or organizational goals. Management is getting work done (efficiently and effectively) through others.

5. Chapter 14 Copyright ©2009 by Cengage Learning Inc. All rights reserved 5 Leaders versus Managers MANAGERS Do things right Status quo Short-term Means Builders Problem solving MANAGERS Do things right Status quo Short-term Means Builders Problem solving LEADERS Do the right thing Change Long-term Ends Architects Inspiring & motivating LEADERS Do the right thing Change Long-term Ends Architects Inspiring & motivating Adapted from Exhibit 14.1 1.1

6. Chapter 14 Copyright ©2009 by Cengage Learning Inc. All rights reserved 6 Leaders versus Managers 1.1 American organizations (and probably those in much of the rest of the industrialized world) are under led and over managed. They do not pay enough attention to doing the right thing, while they pay too much attention to doing things right. --Warren Bennis American organizations (and probably those in much of the rest of the industrialized world) are under led and over managed. They do not pay enough attention to doing the right thing, while they pay too much attention to doing things right. --Warren Bennis

7. Chapter 14 Copyright ©2009 by Cengage Learning Inc. All rights reserved 7 Doing the Right Thing 1.1 The Three M’s: Mission, Mentor, and Mirror  Business leaders can develop personal ethics by focusing on their mission, a mentor, and the mirror 1.Develop a personal mission statement. 2.Take care in choosing a mentor. 3.Stand in front of the mirror to assess your ethical performance as a business leader. The Three M’s: Mission, Mentor, and Mirror  Business leaders can develop personal ethics by focusing on their mission, a mentor, and the mirror 1.Develop a personal mission statement. 2.Take care in choosing a mentor. 3.Stand in front of the mirror to assess your ethical performance as a business leader.

8. Chapter 14 Copyright ©2009 by Cengage Learning Inc. All rights reserved 8 Substitutes for Leadership Leadership substitutes  subordinate, task, or organizational characteristics that make leaders redundant or unnecessary Leadership neutralizers  subordinate, task, or organizational characteristics that interfere with a leader’s actions Leaders don’t always matter  Poor leadership is not the cause of every organizational crisis 1.2

9. Chapter 14 Copyright ©2009 by Cengage Learning Inc. All rights reserved 9 Leadership Substitutes and Neutralizers Adapted from Exhibit 14.2 1.2

10. Chapter 14 Copyright ©2009 by Cengage Learning Inc. All rights reserved 10 Who Leaders Are and What Leaders Do Leadership Traits Leadership Traits Leadership Behavior Leadership Behavior 2 2 Trait theory: effective leaders possess a similar set of traits or characteristics. Also called the “great person theory. For example: good leaders are taller???

11. Chapter 14 Copyright ©2009 by Cengage Learning Inc. All rights reserved 11 Leadership Traits Desire to Lead Honesty and Integrity Drive Self- Confidence Emotional Stability Cognitive Ability Knowledge of the Business 2.1 Adapted from Exhibit 14.3 Drive=high level of effort, achievement, motivation, etc. Desire to lead=want to be in charge, influence others. Honesty/Integrity= being truthful and doing what they said they would do. Self confidence: believing in one’s abilityEmotional stability=even tempered and consistentCognitive ability=capacity to analyze complex information Business knowledge=lengthy experience in the industry, understand key decisions and concerns facing the company.

12. Chapter 14 Copyright ©2009 by Cengage Learning Inc. All rights reserved What aspects of leadership does Dahlgren say are important for submarine commanders? Which leadership behaviors or traits does he emphasize? Are these traits or behaviors right for the situation? Why or Why not? 12 Biz Flix: U-571 Take Two Video Click

13. Chapter 14 Copyright ©2009 by Cengage Learning Inc. All rights reserved 13 What Really Works: Leadership Traits Intelligence 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% probability of success75% Dominance 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% probability of success57% Extroversion 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% probability of success63% Traits and Perceptions of Leadership Effectiveness 2.1

14. Chapter 14 Copyright ©2009 by Cengage Learning Inc. All rights reserved 14 What Really Works: Leadership Traits Charisma and Performance 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% probability of success72% Charisma and Perceived Leadership Effectiveness 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% probability of success89% Charisma and Leader Satisfaction 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% probability of success90% Charisma and Leadership Effectiveness 2.1

15. Chapter 14 Copyright ©2009 by Cengage Learning Inc. All rights reserved 15 Leadership Behaviors 2.2 Initiating Structure The degree to which a leader structures the roles of followers by setting goals, giving directions, setting deadlines, and assigning tasks. Consideration The extent to which a leader is friendly, approachable, and supportive and shows concern for employees. Lee Scott, WalMart

16. Chapter 14 Copyright ©2009 by Cengage Learning Inc. All rights reserved 16 Blake/Moulton Leadership Grid Adapted from Exhibit 14.4 2.2 1,9 Country Club Management 9,9 Team Management 1,1 Impoverished Management 9,1 Authority- Compliance 5,5 Middle of the Road 5,5 123456789 1 2 3 4 5 6 7 8 9 Concern for People Concern for Production High Low High Which style of management is best?

17. Chapter 14 Copyright ©2009 by Cengage Learning Inc. All rights reserved 17 Situational Approaches to Leadership After reading these sections, you should be able to: 3.explain Fiedler’s contingency theory. 4.describe how path-goal theory works. 5.discuss Hersey and Blanchard’s Situational Leadership theory. 6.explain the normative decision theory.

18. Chapter 14 Copyright ©2009 by Cengage Learning Inc. All rights reserved 18 Putting Leaders in the Right Situation: Fiedler’s Contingency Theory 3 3 Group Performance = Leadership Style Situational Favorableness Situational Favorableness Adapted From Exhibit 14.5 Fiedler‘s theory says that leaders are effective when the work groups they lead perform well.

19. Chapter 14 Copyright ©2009 by Cengage Learning Inc. All rights reserved 19 Putting Leaders in the Right Situation: Fiedler’s Contingency Theory Least Preferred Coworker Situational Favorableness Matching Leadership Styles to Situations 3 3

20. Chapter 14 Copyright ©2009 by Cengage Learning Inc. All rights reserved 20 Leadership Style: Least Preferred Coworker Leadership style is the way a leader generally behaves toward followers  seen as stable and difficult to change Style is measured by the Least Preferred Co-worker scale (LPC)  relationship-oriented  task-oriented 3.1

21. Chapter 14 Copyright ©2009 by Cengage Learning Inc. All rights reserved 21 Leadership Style: Least Preferred Coworker Scale 3.1 Adapted From Exhibit 14.6

22. Chapter 14 Copyright ©2009 by Cengage Learning Inc. All rights reserved 22 Situational Favorableness 3.2 Situational Favorableness The degree to which a particular situation either permits or denies a leader the chance to influence the behavior of group members. Three factors:  Leader-member relations  Task structure  Position power Is the leader trusted? Subordinate tasks clearly defined? Can leader hire, fire, etc.?

23. Chapter 14 Copyright ©2009 by Cengage Learning Inc. All rights reserved 23 Situational Favorableness Adapted from Exhibit 14.7 3.2

24. Chapter 14 Copyright ©2009 by Cengage Learning Inc. All rights reserved 24 Matching Leadership Styles to Situations Adapted from Exhibit 14.8 3.3

25. Chapter 14 Copyright ©2009 by Cengage Learning Inc. All rights reserved 25 Path-Goal Theory 4 4 A leadership theory that states that leaders can increase subordinate satisfaction and performance by clarifying and clearing the paths to goals and by increasing the number and kinds of rewards available for goal attainment. In contrast to Fiedler’s contingency theory, path-goal theory assumes that leaders can change and adapt their leadership styles.

26. Chapter 14 Copyright ©2009 by Cengage Learning Inc. All rights reserved 26 Basic Assumptions of Path-Goal Theory Adapted From Figure 14.9 4 4 Clarify paths to goals Clear paths to goals by solving problems and removing roadblocks Increase the number and kinds of rewards available for goal attainment Do things that satisfy followers today or will lead to future rewards or satisfaction Offer followers something unique and valuable beyond what they’re experiencing

27. Chapter 14 Copyright ©2009 by Cengage Learning Inc. All rights reserved 27 Path-Goal Theory Adapted From Figure 14.10 Subordinate Contingencies Perceived Ability Locus of Control Experience Subordinate Contingencies Perceived Ability Locus of Control Experience Environmental Contingencies Task Structure Formal Authority System Primary Work Group Environmental Contingencies Task Structure Formal Authority System Primary Work Group Outcomes Subordinate satisfaction Subordinate performance Outcomes Subordinate satisfaction Subordinate performance Leadership Styles Directive Supportive Participative Achievement-Oriented Leadership Styles Directive Supportive Participative Achievement-Oriented 4 4

28. Chapter 14 Copyright ©2009 by Cengage Learning Inc. All rights reserved 28 Adapting Leader Behavior: Path-Goal Theory Leadership Styles Leadership Styles Subordinate and Environmental Contingencies Subordinate and Environmental Contingencies Outcomes 4 4

29. Chapter 14 Copyright ©2009 by Cengage Learning Inc. All rights reserved 29 Leadership Styles Directive  clarifying expectations and guidelines Supportive  being friendly and approachable Participative  allowing input on decisions Achievement-Oriented  setting challenging goals 4.1

30. Chapter 14 Copyright ©2009 by Cengage Learning Inc. All rights reserved 30 Leadership Styles Martin Winterkorn of Audi uses a directive style. His employees know exactly what is expected of them.

31. Chapter 14 Copyright ©2009 by Cengage Learning Inc. All rights reserved 31 Subordinate and Environmental Contingencies  Perceived ability  Locus of control  Experience  Perceived ability  Locus of control  Experience SubordinateEnvironmental Task structure Formal authority system Primary work group 4.2 How much ability subordinates believe they have for doing their jobs well. The extent to which people believe that they have control over what happens to them in life. The level of experience of the subordinates The degree to which the requirements of a subordinate’s tasks are clearly specified. The organizations established set of procedures, rule, and policies. The amount of work-oriented participation or emotional support that is provided by the employee’s immediate work group.

32. Chapter 14 Copyright ©2009 by Cengage Learning Inc. All rights reserved 32 Path Goal Theory: When to Use Leadership Styles Adapted from Exhibit 14.11 4.2

33. Chapter 14 Copyright ©2009 by Cengage Learning Inc. All rights reserved 33 Adapting Leadership Behavior Worker Readiness Leadership Styles Leadership Styles 5 5 Hersey and Blanchard’s Situational Leadership Theory Situational leadership theory states that leaders need to adjust their leadership styles to match their followers’ readiness.

34. Chapter 14 Copyright ©2009 by Cengage Learning Inc. All rights reserved 34 Worker Readiness The ability and willingness to take responsibility for directing one’s behavior at work Components of worker readiness:  Job readiness  Psychological readiness 5.1

35. Chapter 14 Copyright ©2009 by Cengage Learning Inc. All rights reserved 35 Worker Readiness R4 R3 R2 R1 confident willing able confident willing able insecure not willing able insecure not willing able confident willing not able insecure not able not willing 5.1

36. Chapter 14 Copyright ©2009 by Cengage Learning Inc. All rights reserved 36 Leadership Styles Telling (R1) Selling (R2) Participating (R3) Delegating (R4) high task behavior low relationship behavior high task behavior low relationship behavior high task behavior high relationship behavior high task behavior high relationship behavior low task behavior high relationship behavior low task behavior low relationship behavior 5.2

37. Chapter 14 Copyright ©2009 by Cengage Learning Inc. All rights reserved 37 Normative Decision Theory Decision Styles Decision Quality and Acceptance 6 6

38. Chapter 14 Copyright ©2009 by Cengage Learning Inc. All rights reserved 38 Decision Styles Adapted from Exhibit 14.12 6.1 Solve the problem yourself Solve the problem yourself Obtain information. Select a solution yourself. Obtain information. Select a solution yourself. Share problem, get ideas from individuals. Select a solution yourself. Share problem, get ideas from individuals. Select a solution yourself. AIAIICI Share problem with group, get ideas. Make decision, which may or may not reflect input. Share problem with group, get ideas. Make decision, which may or may not reflect input. Share problem with group. Together tries to reach a solution. Leader acts as facilitator. Share problem with group. Together tries to reach a solution. Leader acts as facilitator. CIIGII Leader solves the problem or makes the decision Leader accepts any decision supported by the entire group

39. Chapter 14 Copyright ©2009 by Cengage Learning Inc. All rights reserved 39 Decision Quality and Acceptance Using the right amount of employee participation:  improves decision quality  improves acceptance Decision tree helps leader identify optimal level of participation 6.2

40. Chapter 14 Copyright ©2009 by Cengage Learning Inc. All rights reserved 40 Quality Rule Quality Rule  If the quality of the decision is important, then don't use an autocratic decision style Leader Information Rule Leader Information Rule  If the quality of the decision is important, and if the leader doesn't have enough information to make the decision on his or her own, then don't use an autocratic decision style Subordinate Information Rule Subordinate Information Rule  If the quality of the decision is important, and if the subordinates don't have enough information to make the decision themselves, then don't use a group decision style 6.2 Normative Theory Decision Rules to Increase Decision Quality

41. Chapter 14 Copyright ©2009 by Cengage Learning Inc. All rights reserved 41 Normative Theory Decision Rules to Increase Decision Quality Goal Congruence Rule Goal Congruence Rule  If the quality of the decision is important, and subordinates' goals are different from the organization's goals, then don't use a group decision style Problem Structure Rule Problem Structure Rule  If the quality of the decision is important, the leader doesn't have enough information to make the decision on his or her own, and the problem is unstructured, then don't use an autocratic decision style 6.2

42. Chapter 14 Copyright ©2009 by Cengage Learning Inc. All rights reserved 42 Normative Theory Decision Rules to Increase Decision Acceptance Commitment Probability Rule Commitment Probability Rule  If having subordinates accept and commit to the decision is important, then don't use an autocratic decision style Subordinate Conflict Rule Subordinate Conflict Rule  If having subordinates accept the decision is important and critical to successful implementation and subordinates are likely to disagree or end up in conflict over the decision, then don't use an autocratic or consultative decision style Commitment Requirement Rule Commitment Requirement Rule  If having subordinates accept the decision is absolutely required for successful implementation and subordinates share the organization's goals, then don't use an autocratic or consultative style 6.2

43. Chapter 14 Copyright ©2009 by Cengage Learning Inc. All rights reserved 43 Strategic Leadership After reading this section, you should be able to: 7.explain how visionary leadership (i.e., charismatic and transformational leadership) helps leaders achieve strategic leadership.

44. Chapter 14 Copyright ©2009 by Cengage Learning Inc. All rights reserved Approaches to Leadership Traits Behaviors Situational theories Strategic leadership  Visionary Charismatic leadership Transformational leadership 44

45. Chapter 14 Copyright ©2009 by Cengage Learning Inc. All rights reserved 45 Visionary Leadership Charismatic Leadership Transformational Leadership 7 7

46. Chapter 14 Copyright ©2009 by Cengage Learning Inc. All rights reserved 46 Charismatic Leadership Creates an exceptionally strong relationship between leader and follower Charismatic leaders:  articulate a clear vision, based on values  model values consistently with vision  communicate high performance expectations  display confidence in followers’ abilities 7.1

47. Chapter 14 Copyright ©2009 by Cengage Learning Inc. All rights reserved 47 Kinds of Charismatic Leaders Ethical Charismatics  provide developmental opportunities  open to positive and negative feedback  recognize others’ contributions  share information  concerned with the interests of the group Unethical Charismatics  control and manipulate followers  do what is best for themselves  only want positive feedback  motivated by self-interest 7.1

48. Chapter 14 Copyright ©2009 by Cengage Learning Inc. All rights reserved 48 Ethical and Unethical Charismatic Leaders Exercising Power Power is used to serve others Creating the vision Followers help develop the vision Communicating with followers Two-way communication Accepting feedbackOpen to feedback Want followers to think and to questions the status quo Stimulating followers Developing followersFocus on developing followers Living by moral standards Three virtues: courage, sense of fairness, integrity Charismatic Leader Behaviors Ethical Charismatics 7.1 Adapted from Exhibit 14.15

49. Chapter 14 Copyright ©2009 by Cengage Learning Inc. All rights reserved 49 Ethical and Unethical Charismatic Leaders Charismatic Leader Behaviors Unethical Charismatics Exercising Power Power is used to dominate others Creating the vision Vision comes solely from the leader Communicating with followers One-way communication, not open to input from others Accepting feedbackPrefer yes-men, punish candid feedback Don’t want followers to think, prefer uncritical acceptance of own ideas Stimulating followers Developing followersInsensitive to followers’ needs Living by moral standards Follow standards only if they satisfy immediate self interests 7.1 Adapted from Exhibit 14.15

50. Chapter 14 Copyright ©2009 by Cengage Learning Inc. All rights reserved 50 Reducing Risks of Unethical Charismatics 1.Have a clearly written code of conduct 2.Recruit, select, and promote managers with high ethical standards 3.Train leaders how to value, seek, and used diverse points of view 4.Celebrate and reward those who exhibit ethical behaviors 7.1

51. Chapter 14 Copyright ©2009 by Cengage Learning Inc. All rights reserved 51 Transformational Leadership Generates awareness and acceptance of group’s purpose and mission Gets followers to accomplish more than they intended or thought possible 7.2

52. Chapter 14 Copyright ©2009 by Cengage Learning Inc. All rights reserved 52 Components of Transformational Leadership 1.Charisma or idealized influence 2.Inspirational motivation 3.Intellectual stimulation 4.Individualized consideration 7.2