Chapter 8 Leadership Michael A. Hitt C. Chet Miller Adrienne Colella Slides by Ralph R. Braithwaite

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Cathy Benko Cathy Benko at Deloitte Consulting

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What are your reactions to Cathy Benko’s story?

What are your thoughts about her quote at the end of the section?

“Life is not fair. Not everybody starts at the same place or has the same opportunities and support someone else might have. Don’t spend time wondering why you’re in the position you’re in. Just get out there and do as well as you can …” Exploring Behavior in Action

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The Strategic Importance of Leadership

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Is there a link between leadership and organizational performance?

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Do organizations do enough to develop leadership skills?

Strategic leadership involves developing a vision, empowering associates, building relationships, and building and maintaining a high-involvement, high-performance workforce.

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Knowledge Objectives 1. Define leadership and distinguish between formal and informal leaders.

2. Explain the trait concept of leadership.

3. Describe major behavioral theories of leadership and compare and contrast them.

4. Explain contingency theories of leadership and how they relate leadership effectiveness to situational factors.

5. Describe transformational leaders.

6. Discuss topics of current relevance, including leader member exchange, servant leadership, gender effects on leadership, and global differences in leadership.

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The Nature of Leadership The process of providing general direction and influencing individuals or groups to achieve goals.

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Warren Bennis Effective Leaders

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Effective leaders are concerned with “doing the right things” rather than “doing things right.” The right things are: Creating and communicating a vision of what the organization should be Communicating with and gaining support of multiple constituencies Persisting in the desired direction Creating the appropriate culture and obtaining the desired results

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Trait Theory of Leadership Concept that certain traits help make people effective leaders. Early research suggested that the traits fell into three categories: Physical Characteristics Personality Characteristics Some Criticism Abilities

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Traits Associated with Leadership Energy Appearance Intelligence Judgment Verbal fluency Achievement drive Adaptability Aggressiveness Enthusiasm Extroversion Initiative Insightfulness Integrity Persistence Self-confidence Sense of humor Tolerance for stress Interpersonal skills Prestige Tact Adapted from Exhibit 8-1: Common Traits Associated with Leadership

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Six Core Traits of Leadership Drive Leadership Motivation Integrity Self Confidence Cognitive Ability Knowledge of the Domain

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Reforming a “Rotten Apple” What are your thoughts regarding the leadership traits of Police Commissioner William Bratton?

What are your thoughts regarding the changes he made that earned him the “Police Executive of the 20 th Century” award and his face on the cover of Time?

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John F. Kennedy Charismatic leaders inspire their followers to change their needs and Adolf Hitler and sacrifice their Charisma for the good of the cause.

Martin Luther King, Jr. Ronald Reagan Barbara Jordan

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Behavioral Theories of Leadership University of Michigan Studies Ohio State University Studies

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University of Michigan Studies

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Job-Centered Leadership Style

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Employee tasks Methods for accomplishment Employee-Centered Leadership Style

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Employees’ personal needs Rensis Likert Development of interpersonal relationships Daniel Katz Robert Kahn

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Ohio State University Studies

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Consideration

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Leaders express friendship Develop mutual trust and respect Strong interpersonal relationships with staff Initiating Structure

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Well defined patterns of organization and communication

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Define procedures Delineate relationships with staff Emphasize goals and deadlines Assign tasks and identify performance expectations Ralph Stogdill Edwin Fleishman

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High Behavioral Theories of Leadership A (Employee-Centered Style) D B C (Job-Centered Style) Low High Initiating Structure Adapted from Exhibit 8-2: Comparison of Consideration and Initiating Structure with Employee Centered and Job-Centered Concepts

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Contingency Theories of Leadership Fiedler’s Theory Path-Goal Theory

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Fiedler’s Contingency Theory of Leadership

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Effectiveness depends on leader’s behavioral style and the situation Fred Fiedler Leader style measured by the LPC (least preferred co-worker) scale Situational favorableness assessed by three things: Leader-member relations Task structure Position power

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Fiedler’s LPC Scale

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Esteem for Least Preferred Co-Worker Cooperative ___:___:___:___:___:___:___:___ 8 7 6 5 4 3 2 1 Uncooperative Friendly ___:___:___:___:___:___:___:___ 8 7 6 5 4 3 2 1 Unfriendly

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Low LPC Score

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Negative adjectives Task-oriented leader (task achievement needs first) High LPC Score

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More positive adjectives Relationship-oriented leader (interpersonal relationship needs first)

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Situational Characteristics

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Leader-Member Relations

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The degree to which a leader is respected, accepted, and had friendly interpersonal relationships with followers Task Structure

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The degree to which tasks are broken down into easily understood steps or parts Position Power

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The degree to which a leader can reward, punish, promote, or demote individuals in the unit or organization

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Fiedler’s Contingency Theory of Leadership Effectiveness Adapted from Exhibit 8 3: Fiedler’s Contingency Model of Leadership Effectiveness

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Path-Goal Leadership Theory Leadership Style Contingency Factors Outcomes Martin Evans Robert House

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Leader Effectiveness Leadership can effect employees’ expectancies and valences in several ways:

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Assign tasks that have high value (valence) Support employees’ efforts (effort → performance expectancy)

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Tie rewards to goal accomplishment (performance→reward instrumentality)

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Path-Goal Leadership Theory Leader Behaviors

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Directive Leadership Supportive Leadership Achievement-Oriented Leadership

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Participative Leadership Situational Factors

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Subordinate Characteristics Work Environment Characteristics Effectiveness of leader behavior depends on these situational factors

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Interaction of Leader Behavior and Situational Factors Locus of Control Need for Affiliation Need for Security Participative, Directive or Supportive Leaders Need for Growth

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Interaction of Leader Behavior and Situational Factors Situational Factors Subordinate Characteristics Internal locus of control External locus of control High need for affiliation High need for security Strengths Characteristics of the Work Environment Structured task Unstructured task Effective Leader Behaviors Participative Directive Supportive Directive Supportive Directive High growth need Low growth need High growth need Low growth need Complex task Complex task Simple task Simple task Participative/ Achievement oriented Directive Supportive Supportive

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Adapted from Exhibit 8-4: Interaction of Leader Behavior and Situational Factors

Managerial Advice Phil Jackson

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Phil Jackson and Leadership Success

In terms of leadership, this means treating everyone with the same care and respect you give yourself – and trying to understand their reality without judgment. When we can do that, we begin to see that we all share human struggles, desires, and dreams.

What are your thoughts about this quote?

Have you ever worked for a leader who approached the job like this?

Does the leadership style one uses need to change based on each situation? Why?

When would a leader want to be “invisible”?

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Transactional Leadership A leadership approach that is based on the exchange relationship between followers and leaders. It is characterized by contingent behavior and active management-by-exception behavior.

It is the degree to which leaders provide what followers want in response to good performance.

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Four Characteristics of Transactional Leaders

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Understand what followers want to receive from their work, and attempt to give them what they desire, contingent on performance

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Clarify links between performance and reward Exchange rewards and promises of rewards for specified performance levels Respond to the interests of followers only if the followers are performing satisfactorily

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Transactional Leadership Contingent Reward Behavior

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Clarify performance expectations Reward followers when expectations are met Active Management-by-Exception Behavior

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Clarifies minimal performance standards Punishes when standards are not met Consistently Monitors Performance

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Transformational Leadership A leadership approach that involves motivating followers to do more than expected, to continuously develop and grow, to increase self confidence, and to place the interests of the unit or organization before their own.

Involves charisma, intellectual stimulation, and individual consideration.

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Transformational Leaders Do Three Things Increase followers awareness of the importance of pursuing a vision or mission and the strategy required Encourage followers to place the interests of the unit, organization, or larger collective before their own personal interests Raise followers’ aspirations so they continuously try to develop and improve themselves while striving for higher levels of accomplishment

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Characteristics Intellectual Stimulation Charisma Individual Consideration

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Charismatic Leaders

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Inspire emotion and passion in followers Get followers to identify with the leader Display confidence Communicate and live up to organizational values Optimistic and enthusiastic

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Charisma

Intellectual Stimulation Intellectual Stimulation

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Increase the followers’ focus on problems and develop new ways to solve them

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Reexamine assumptions Seek out different views Work to be innovative

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Individual Consideration

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Support and develop followers to improve self confidence and a desire to improve performance

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Provide individualized attention to followers Focus on followers’ strengths Act as teachers and coaches Individual

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Consideration

Common Behaviors

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Articulate clear, appealing vision Communicate the vision Delegate significant authority and responsibility Eliminate unnecessary bureaucratic restraints Provide coaching, training and developmental experiences Encourage open sharing of ideas and concerns Encourage participative decision making Promote cooperation and teamwork Modify structure to promote key values and objectives

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Laissez-Faire Leadership

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Opposite approach to transformational leadership Not proactive React only to failures or chronic problems Avoid making decisions Often absent or uninvolved in followers’ activities Typically do not have positive outcomes

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Commander Abrashoff D. Michael Abrashoff

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Demonstrated confidence Focused on the vision Linked tasks to the vision Went beyond self-interest Created intellectual stimulation Displayed individual consideration

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Would you want to work for someone like Abrashoff? Why or why not?

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Would his approach work in most work environments? Why or why not?

USS Benfold

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Some Conclusions

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Leaders can be trained to exhibit transformational leadership behaviors

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Leaders can display both transformational and transactional leadership styles Both transformational and transactional leadership can be positive

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Transformational Leadership Charisma Intellectual Stimulation Individual Consideration The Effects Outcomes Transactional Leadership Contingent Reward Behavior Active Management by Exception Individual Outcomes Unit/Organization Outcomes Dynamism of the task/organizational environment Adapted from Exhibit 8-5: The Effects of Transformational and Transactional Leadership

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Ethical Leadership? Authentic Leadership!

Thoughts?

Dennis Kozlowski Experiencing Strategic OB

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Ethical Leadership? Authentic Leadership!

Thoughts?

Ken Lay Jeff Skilling Andrew Fastow Experiencing Strategic OB

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Ethical Leadership? Authentic Leadership!

Thoughts?

Samuel Waksal Martha Stewart Thoughts?

Ryan Brant Experiencing Strategic OB

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Authentic Leaders

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Guided by values that focus on doing what’s right for their constituencies Try to act in accordance with their values Remain transparent “Walk the talk” Thoughts?

Place equal weight on getting the task accomplished and developing associates Continuously develop themselves Have developed values and personal strengths they need to deal with ambiguous ethical issues Experiencing Strategic OB

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Leader-Member Exchange (LMX)

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Different relationships with different followers – not all are treated the same High level of contribution is a factor Similarity to the leader is a factor Two groups - an In-group and an Out-group Mutual trust and support Levels of satisfaction

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Leader-Member Exchange (LMX) In Group Leader Exchange Follower Out Group

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Servant Leadership

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Valuing individuals Developing people Building community Conceptualizing Exhibiting foresight Displaying wisdom Desire to serve others Max De Pree Former CEO of Herman Miller

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Gender Effects on Leadership Do women lead differently than men?

Structural-cultural model of leader behavior Socialization model Both women and men may be effective leaders when style matches the situation

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Global Differences

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Anglo cluster (ideal leader)

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Charismatic influence and inspiration, encouraging participation

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Diplomatic, delegating authority, allowing everyone to have their say

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Arabic cluster (ideal leader)

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Need to balance paradoxical set of expectations

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Expected not to differentiate themselves from others and have modest styles and

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Expected to have great deal of power and control, and to direct most decisions and actions

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Global Differences

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Germanic cluster (ideal leader)

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Charismatic Highly team-oriented Participative Southern Asia cluster (ideal leader)

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Humane, participative, and charismatic Expected to be benevolent while maintaining a strong position of authority

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The Strategic Lens

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How should leaders approach individuals, units, and organizations suffering from poor performance?

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Why is ethical leadership often of utmost importance to various shareholders?

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Should women and men lead in different ways?

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Questions

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