Chapter Nine
Leadership
Chapter Contents
Overview of the Chapter 2
Learning Objectives 2
Key Terms 2
Lecture Outline 3
Learning Objectives Revisited 14
Lecture Enhancers 17
Notes for Topics for Discussion and Action 19
Notes for Building Management Skills 21
Notes for Management For You 22
Notes for Small Group Breakout Exercise 22
Notes For Managing Ethically 23
Notes For Web Exercises 24
Notes for You’re the Management Consultant 24
Notes for Management Case 24
Notes for Management Case in the News from the pages of the National Post 25
Overview of the Chapter
Leadership is a key ingredient in effective management. When leaders are effective, their subordinates are highly motivated, committed, and high performing. When leaders are ineffective, chances are good that their subordinates do not perform up to their capabilities, are demotivated, and may be dissatisfied.
This chapter describes what leadership is and examines the major leadership models that shed light on the factors that contribute to a manager being an effective leader: trait and behaviour models, which focus on what leaders are like and what they do, and contingency models, each of which takes into account the complexity surrounding leadership and the role of the situation in leader effectiveness. It also describes how manager can have dramatic effects in their organizations by means of transformational leadership. Finally, it examines how gender and national culture affect leadership.
Learning Objectives
1. Describe what leadership is, when leaders are effective and ineffective, and the sources of power that enable managers to be effective leaders.
2. Identify the traits that show the strongest relationship to leadership, the behaviours leaders engage in, and the limitations of the trait and behaviour models of leadership”
3. Explain how contingency models of leadership enhance our understanding of effective leadership and management in organizations
4. Describe what transformational leadership is, and explain how managers can engage in it.
5. Characterize how gender and national culture affect leadership.
Key Terms
charismatic leader
coercive power
developmental consideration
emotional intelligence
employee-centred behaviour
empowerment
expert power
intellectual stimulation
job-oriented behaviours
leader
leadership
leader substitute
legitimate power
path-goal theory
position power
referent power
reward power
situational leadership theory (SLT)
task structure
transactional leadership
transformational leadership
Lecture Outline
A CASE IN CONTRAST. “Levy Fosters Growth While Irwin Fosters Decline.” Dr. Julia Levy, president and CEO of Vancouver-based QLT (www), has created a company that is a world leader in photodynamic therapy, while George Irwin, who was CEO of Toronto-based Irwin Toy Ltd. (www) until November 2000, oversaw the demise of what was once the biggest toy company in Canada. The leadership styles of these two CEOs explain these differences in outcomes.
I. THE NATURE OF LEADERSHIP.
A. Key Concepts.
1. Leadership is the process by which a person exerts influence over other people and inspires, motivates, and directs their activities to help achieve group or organizational goals.
2. The person who exerts such influence is a leader.
3. When leaders are effective, the influence they exert helps a group achieve its performance goals.
4. Effective leadership increases an organization’s ability to meet all challenges, including:
a. The need to obtain a competitive advantage.
b. The need to foster ethical behaviour.
c. The need to manage a diverse workforce fairly and equitably.
B. Personal Leadership Style and Managerial Tasks.
1. A manager’s personal leadership style—the specific ways in which a manager chooses to influence other people—shapes the way that manager approaches the principle tasks of managing.
2. Managers at all levels have their own personal leadership styles, which determine not only how they lead but also how they perform the other management tasks.
Table 9.1 “Some Thoughts About What It Means to Be a Canadian Leader” provides some quotes from various Canadian leaders in business, sports and government.
C. Power: The Key to Leadership.
1. A key component of effective leadership is found in the power the leader has to affect other people’s behaviour and get them to act in certain ways.
a. There are several types of power.
b. Effective leaders take steps to ensure that they have sufficient levels of each type and that they use the power in beneficial ways.
Figure 9.1: “Sources of Managerial Power” diagrams the 5 sources of power.
2. Legitimate Power.
a. Legitimate power is the authority a manager has by virtue of his or her position in an organization’s hierarchy.
3. Reward Power.
a. Reward power is the ability of a manager to give or withhold tangible rewards and intangible rewards.
b. Effective managers use their reward power so that subordinates feel that their rewards signal that they are doing a good job.
c. Ineffective managers use rewards in a more controlling manner that signals to subordinates that the manager has the upper hand.
4. Coercive Power.
a. Coercive power is the ability of a manager to punish others.
b. Managers who rely heavily on coercive power tend to be ineffective as leaders.
c. Excessive use of coercive power seldom produces high performance and is questionable ethically.
5. Expert Power.
a. Expert power is based in the special knowledge, skills, and expertise that a leader possesses.
b. Managers often have technical expertise that gives them expert power and considerable influence over subordinates.
c. Many top-level managers lack technical expertise and derive their expert power from their abilities as decision makers, planners, and strategists.
d. Expert power tends to be best used in a guiding or coaching manner rather than in an arrogant, high-handed manner.
6. Referent power is more informal than the other kinds of power.
a. Referent power is a function of the personal characteristics of a leader.
b. It is the power than comes from subordinates’ and coworkers’ respect, admiration, and loyalty.
c. In addition to being a valuable asset for top managers, referent power can help first-line and middle managers be effective leaders as well.
d. Managers can increase their referent power, by taking time to get to know their subordinates and showing interest in them.
D. Empowerment: An Ingredient in Modern Management.
1. Empowerment is the process of giving employees at all levels in the organization the authority to:
a. Make decisions.
b. Be responsible for their outcomes.
c. Improve quality.
d. Cut costs.
2. When leaders empower their subordinates, the subordinates take over some of the responsibilities and authority that used to reside with the leader.
3. Empowered subordinates are given the power to make some of the decisions that their leaders used to make.
4. Empowerment can contribute to effective leadership for several reasons:
a. Empowerment increases a manager’s ability to get things done.
b. Empowerment often increases workers’ involvement, motivation, and commitment.
c. Empowerment gives managers more time to concentrate on their pressing concerns.
5. The personal leadership style of managers who empower subordinates often entails developing subordinates so they can make good decisions.
6. Not all employees are good candidates for empowerment, as some experience stress with too much responsibility.
7. Not all companies do a good job of implementing empowerment. For employees to be empowered, four conditions need to be met:
a. There must be a clear definition of the values and mission of the company;
b. The company must help employees acquire the relevant skills;
c. Employees need to be supported in their decision-making, and not criticized when they try to do something extraordinary;
d. Workers need to be recognized for their efforts
II. MODELS OF LEADERSHIP.
A. The concept of ‘leadership’ must be distinguished from the concept of ‘supervision/management’.
1. Leaders look to the big picture, providing vision and strategy.
2. Managers implement the vision and strategy, co-ordinate the staff, and handle day-to-day problems.
III. TRAIT AND BEHAVIOUR MODELS OF LEADERSHIP.
A. Early approaches to leadership focused on the supervisory nature of leadership by taking three different approaches:
1. Do leaders have traits different from nonleaders?
2. Should leaders engage in particular behaviours?
3. Does the situation a leader faces matter?
B. The Trait Model.
1. The trait model of leadership focused on identifying the personal characteristics that are responsible for effective leadership.
Table 9.2: “Trait and Personal Characteristics Related to Effective Leadership” lists the descriptions for the most cited traits associated with effective leadership.
2. Decades of research indicate that certain personal characteristics do appear to be associated with effective leadership.
3. Traits alone are not the key to understanding leader effectiveness.
4. Some effective leaders do not possess all of these traits, and some leaders who do possess them are not effective in their leadership roles.
5. This lack of consistent relationship between leader traits and leader effectiveness led researchers to shift their attention away from traits to what effective managers actually do—their behaviours.
C. The Behavioural Models.
1. There are many models (Ohio Studies, Michigan Studies, Blake & Mouton’s Managerial Grid) that identify two basic kinds of leader behaviours that many managers use to influence their subordinates.
a. Leaders need to consider the nature of their subordinates when trying to determine which behaviours should be performed.
2. Employee-centred behaviour (also called consideration, concern for people and supportive behaviours).
a. Leaders engage in employee-centred behaviour when they show their subordinates that they trust, respect, and care about them.
b. Managers who truly look out for the well-being of their subordinates perform employee-centred behaviour behaviours.
c. Many managers are realizing that when they are considerate to subordinates, subordinates are more likely to be considerate to customers.
3. Job-oriented behaviours (also called initiating structure, concern for production and task-oriented behaviours).
a. Leaders engage in job-oriented behaviours when they make sure that work gets done, and the organization is effective and efficient.
b. Assigning tasks to individuals or work groups, making schedules, encouraging adherence to rules are examples of job-oriented behaviours.
4. Job-oriented and employee-centred behaviours are independent of each other—leaders can be high on both, low on both, or high on one and low on the other.
5. The relationship between performance of employee-centred behaviour and job-oriented behaviours and leader effectiveness is not clear-cut.
Lecture Enhancer 13.1: “Type A Managers”
D. Contingency Models of Leadership.
1. What makes a manager an effective leader in one situation is not necessarily what that manager needs in order to be equally effective in a different situation.
a. The traits or behaviours that may contribute to a manager being an effective leader in one situation might result in the same manager being an ineffective leader in another situation.
b. Contingency models of leadership take into account the situation or context within which leadership occurs.
c. Whether or not a manager is an effective leader is the result of the interplay between:
i. What the manager is like.
ii. What he or she does.
iii. The situation in which leadership takes place.
d. Leadership models are complementary; each focuses on a somewhat different aspect of effective leadership.
2. Fiedler’s Contingency Model.
a. Fiedler’s contingency model helps explain which kinds of managers are likely to be most effective in which situations.
b. Fiedler identified two basic leader styles: relationship-oriented and task-oriented
i. Relationship-oriented leaders are primarily concerned with developing good relationships with their subordinates and being liked by them.
ii. Task-oriented leaders are primarily concerned with ensuring that subordinates perform at a high level and that the job gets done.
c. Fielder identified three situational characteristics that are important determinants of how favourable a situation is for leading.
i. Leader-member relations is the extent to which followers like, trust, and are loyal to their leader.
ii. Task structure is the extent to which the work to be performed is clear-cut so that the leader’s subordinates know what needs to be accomplished and how to go about doing it.
• When high, situations are favourable for leading.
• When low, the situation is unfavourable for leading.
iii. Position power is the amount of legitimate, reward, and coercive power a leader has by virtue of his or her position in an organization. Leadership situations are more favourable for leading when position power is strong.
Figure 9.2: “Fiedler’s Contingency Theory of Leadership” shows the combinations of the three situational characteristics along a continuum from very favourable to very unfavourable situations.
d. Fiedler determined that:
i. When a situation is favourable for leading, it is relatively easy for a manager to influence subordinates to perform well.
ii. In a situation unfavourable for leading, it is much more difficult for a manager to exert influence.
iii. Relationship-oriented leaders are most effective in moderately favourable situations.
iv. Task-oriented leaders are most effective in very favourable or very unfavourable situations.
e. According to Fiedler, individuals cannot change their leadership style, so managers need to be placed in leadership situations that fit their style or the situations need to be changed to suit the manager.
f. Research studies tend to support Fiedler’s model but also suggest that it is in need of some modifications.
3. Hersey-Blanchard’s Situational Leadership Theory (SLT)
a. Compares the leader-follower relationship to that between a parent and a child.
b. Leader should match behaviours to employees’ ability and motivation.
i. Unable and unwilling: give clear and specific directions (telling)
ii. Unable but willing: high task orientation and high relationship orientation (selling)
iii. Able but unwilling: supportive and participative style (participating)
iv. Able and willing: laissez-faire approach will work (delegating)
Figure 9.3: “Hersey-Blanchard’s Situational Leadership Theory” matches the leader styles (on a grid of relationship and task behaviours) to the four categories of follower readiness.
4. Path-Goal Theory.
a. Developed by Martin Evans and expanded on by Robert House, path-goal theory focuses on what leaders can do to motivate their subordinates to achieve group or organizational goals.
i. The premise is that effective leaders motivate subordinates to achieve goals by:
• Clearly identifying the outcomes that subordinates are trying to obtain in the workplace.
• Rewarding subordinates with these outcomes for high performance and the attainment of work goals.
• Clarifying for subordinates the paths leading to the attainment of work goals.
ii. Path-goal theory proposes that the steps that managers should take to motivate subordinates depend on both the nature of the subordinates and the type of work they do.
b. Path-goal theory provides managers with three guidelines to follow to be effective leaders.
i. Find out what outcomes your subordinates are trying to obtain from their jobs and the organization.
ii. Reward subordinates for high performance and goal attainment with the outcomes they desire.
iii. Clarify the paths to goal attainment for subordinates, remove any obstacles to high performance, and express confidence in subordinates’ capabilities.
c. Path-goal theory identifies four kinds of behaviours that leaders can engage in to motivate subordinates: