Fundamentals of Organizational Behaviour: Key Concepts, Skill, and Best Practices

Kreitner/Kinicki/Cole

Fundamentals of Organizational Behaviour: Key Concepts, Skill, and Best Practices

Chapter 11

Leadership

Chapter Learning Objectives

· Explain the theory of leadership and discuss behavioural leadership theory.

· Explain, according to Fiedler’s contingency model, how leadership style interacts with situational control.

· Discuss path-goal theory.

· Describe how charismatic leadership transforms followers and work groups.

· Explain the leader-member exchange (LMX) model of leadership and the substitutes for leadership.

· Review the principles of servant-leader and superleadership.

Opening Case

Land of the Giant

This case profiles a visionary leader, Gwyn Morgan of EnCana Corp. in Calgary, know as the ‘philosopher-king’ of the oil patch. He exhibits charismatic qualities including a clear vision of a global energy giant headquartered in Canada, and strong communication skills to inspire others to work toward this vision. He appeals to ideological values through the ‘corporate constitution’, and provides intellectual stimulation for followers through the values such as ‘seize opportunities’, ‘teamwork and trust’, and ‘fear of the status quo’. He inspires followers to rise to new levels of performance by communicating his expectations for leadership ‘with character, competence, and humility’ to achieve ‘nothing less than the best effort’. His display of confidence in himself and in the employees of Alberta Energy Co. Ltd. and PanCanadian Energy Corp., led to the merger of these two companies to form EnCana Corp. – definitely performance beyond the call of duty.

Chapter Summary

Leadership

Leadership is defined as influencing employees to voluntarily pursue organizational goals. It is a social influence process in which the leader seeks the voluntary participation of subordinates in an effort to reach organizational goals.

Trait and Behavioural Theories of Leadership

A leader trait is a personal characteristic that differentiates leaders from followers. Although dozens of leadership traits were initially identified, researchers were unable to uncover a consistent set of traits that accurately predicted which individuals became leaders in organizations. A cross-cultural study of leadership found that universally favourable traits include dynamism, decisiveness, honesty, capacity to motivate, capacity to negotiate with others, and focus on performance. The International OB box provides more information on important skills for global managers – international business knowledge, cultural adaptability, perspective-taking, and innovation.

Gender and leadership. Research has uncovered the following differences:

(1) men and women were seen as displaying more task and social leadership respectively;

(2) women used a more democratic or participatory style than men, and men used a more autocratic and directive style than women;

(3) men and women were equally assertive; and

(4) women executives, when rated by their peers, managers, and direct reports, scored higher than their male counterparts on a variety of effectiveness criteria.

Does this not raise the question of why there are not more women as CEO or at least, in high positions? Yes, it is changing but is it changing fast enough to save some of our companies that are failing do to male infighting, e.g., Xerox and other autocratic problems?

Behavioural Leadership Theory. This is the approach that looks at behaviours rather than at traits. It began because trait theory did not answer the questions of who is a leader. Researchers have discovered two independent dimensions of leader behaviour. Consideration involves creating mutual respect and trust with followers, and initiating structure involves organizing and defining what group members should be doing.

The Leadership Grid is formed by the intersection of these two dimensions of leader behaviour, as shown in Figure 11-1. Five leadership styles can be identified using the Grid:

(1) impoverished - low concern for people and low concern for production;

(2) country club - high concern for people, low concern for production;

(3) authority-compliance - low concern for people, high concern for production;

(4) middle-of-the-road - moderate concern for people and moderate concern for production; and

(5) team management (or ‘high-high’) - high concern for people and high concern for production.

Although it was initially believed that the ‘high-high’ leadership style would be the most effective, researchers have concluded that there is no one best style of leadership and that the effectiveness of a given leadership style depends on the situation.

Behavioural style theories in perspective. These are approaches that can be learned and show that leaders are not born, as trait theory assumed. It also revealed there is no one best way of leading. The situation at hand is shown to be the key.

Situational Theories

Situational leadership theories grew out of an attempt to explain the inconsistent findings about traits and styles. Situational theories propose that the effectiveness of a particular style of leader behaviour depends on the situation. As situations change, different styles become appropriate. Is this common sense? Can leaders change their approaches with the situation? Is this a problem for many leaders that even though the organization has changed let’s say to teams, they still like autocratic leadership? What can be done to change a leader’s perception of her or his own leadership style?

Fiedler’s Contingency Model. Fiedler believes that leaders are either task motivated or relationship motivated, and bases his theory on the assumption that leaders have one dominant leadership style that is resistant to change. He suggest that leaders must learn to manipulate or influence the leadership situation in order to create a ‘match’ between their leadership style and the amount of control within the situation at hand. How can leaders do this in a crisis? Is this ethical? Are leaders manipulators or managers?

Situational control refers to the amount of control and influence the leader has in her or his immediate work environment. It ranges from high to low. There are three dimensions of control:

· Leader-member relations reflect the extent to which the leader has the support, loyalty, and trust of the work group.

· Task structure is concerned with the amount of structure contained within tasks performed by the work group.

· Position power refers to the degree to which the leader has formal power to reward, punish, or otherwise obtain compliance from employees.

Linking leadership motivation and situational control. See Figure 11-2 for the complete model, which involves eight different situations. Under high control and low control situations, task-motivated leaders are most effective, and under moderate control situations, relationship-motivated leaders are most effective.

Research and managerial implications. There is mixed support for this model, but it has reinforced the notion that there is no one best style of leadership.

Path-Goal Theory. Path-goal theory is a model that describes how expectancy perceptions are influenced by the contingent relationships among four leadership styles and various employee attitudes and behaviours. The full model is shown in Figure 11-3. According to this theory, leader behaviour is acceptable when employees view it as a source of satisfaction or as paving the way to future satisfaction. In addition, leader’s behaviour is motivational to the extent that it:

(1) reduces roadblocks that interfere with goal accomplishment;

(2) provides the guidance and support needed by employees;

(3) ties meaningful rewards to goal accomplishment.

Because the model deals with pathways to goals and rewards, it is called the path-goal theory of leadership. How does this compare with the other theories? Is it more complete or less? Of what use would it be to you as a leader?

Leadership styles. This theory proposes that leaders can exhibit more than one leadership style, a contrast to Fiedler. These are:

(1) Directive leadership,

(2) Supportive leadership,

(3) Participative leadership, and

(4) Achievement-oriented leadership.

How are these different or similar to other theories or models?

Contingency factors. Contingency factors are situational variables that cause one style of leadership to be more effective than another.

Research and managerial implications. The research supports the idea that leaders exhibit more than one leadership style, and that a small set of task and employee characteristics are relevant contingency factors. However, there is limited support for most of the moderating relationships predicted with the theory.

From Transactional to Charismatic and

Transformational Leadership

Transactional leadership focuses on the interpersonal transactions between managers and employees. Leaders are seen as engaging in behaviours that maintain a quality interaction between themselves and followers, using contingent rewards and corrective action when warranted. Charismatic leadership is defined as the use of interpersonal attraction, or ‘charisma’, to motivate employees to pursue organizational goals over self-interest. It emphasizes symbolic leader behaviour, visionary and inspirational messages, nonverbal communication, appeal to ideological values, intellectual stimulation of followers by the leader, display of confidence in self and in followers, and leader expectations for follower self-sacrifice and for performance beyond the call of duty. You might ask your students whom they think fit this description and what are the pros and cons of this form of leadership. Was Hitler a charismatic leader? Pierre Elliott Trudeau? Colin Powell?

Figure 11-4 illustrates the charismatic model of leadership. Charismatic leaders transform followers by creating changes in their goals, values, needs, beliefs and aspirations. They tend to engage in three key sets of leader behaviour. The first set involves establishing a common vision of the future. In the second set of behaviours there are two key components: high performance expectations and standards and the need to publicly express confidence in the followers’ ability to meet high performance expectations. The third set involves being a role model.

A variation of charismatic leadership is known as transformational leadership, which is a leadership style involving the creation, communication, and modeling of a vision, and behaviours aimed at building commitment to the vision on the part of their followers. The Focus on Diversity box provides some interesting research results regarding the transformational leadership style demonstrated by ‘thirtysomething’ women.

Research and managerial implications. Research has found that the best leaders are not just charismatic; they are both transactional and charismatic. Charismatic leadership is most likely to be effective when the situation offers opportunities for moral involvement, and when exceptional effort, sacrifices and performance are required of both leaders and followers. Employees at any level can be trained to be more transactional and charismatic. Charismatic leaders can be ethical or unethical. The Ethics at Work box illustrates a current example of an ethical dilemma involving charismatic leader Jack Welch, former CEO of General Electric.

Additional Perspectives on Leadership

Four other approaches to leadership will be reviewed.

The Leader-Member Exchange (LMX) Model of Leadership. The model revolves around the development of dyadic relationships between managers and their direct reports. It focuses on the quality of relationships between managers and subordinates as opposed to the behaviours or traits of either leaders or followers. There is the in-group exchange where a partnership is characterized by mutual trust, respect, and liking and out-group exchange that is a partnership characterized by a lack of mutual trust, respect and liking. You might ask your students to think of supervisors with whom they have had in-group and out-group exchanges.

Research findings. The research has shown that an in-group exchange is positively related to job satisfaction, job performance, goal commitment, trust between managers and employees, work climate, and satisfaction with leadership. Also, personality similarity and demographic similarity influence the quality of an LMX.

Managerial implications. There are three managerial implications:

(1) leaders are encouraged to establish high performance expectations for all their direct reports because setting high-performance standards fosters high-quality LMXs;

(2) because personality and demographic similarity between leaders and followers is associated with higher LMX, managers need to be careful not to avoid a heterogeneous work environment just to have good relationships with direct reports (How does this finding impact employment equity and discrimination?); and

(3) those who find themselves in a poor LMX need to take action to improve the quality of their LMX situation.

Substitutes for Leadership. Substitutes for leadership are situational variables that can substitute for, neutralize, or enhance the effects of leadership. They increase or decrease a leader’s ability to exert influence on the work group.

Kerr and Jermier’s substitutes for leadership model. Table 11-1 lists the various substitutes for leadership ranging from ability, experience, training and knowledge to spatial distance between superior and subordinate. There are more substitutes for task-oriented leadership than for relationship-oriented leadership. You might have your students analyze the list and see what they think and how it compares to the other theories on leadership.

Research and managerial implications. Research has shown that substitutes for leadership were more important that leader behaviours in accounting for employee attitudes and behaviours. Thus managers should be attentive to the substitutes for leadership because they have such a strong impact on employees.

Servant-Leadership. Servant leadership refers to a focus on increased service to others rather than to oneself. What are the cultural implications of this approach? This approach is more of a philosophy of management than a testable theory. Table 11-2 lists characteristics of servant leaders, ranging from listening to empathy to foresight to building community. Is this the approach or philosophy relevant in a competitive, globalized economy of now and in the future?

Superleadership. A superleader is someone who leads others to lead themselves. The leader empowers followers by acting as a teacher and a coach rather than a dictator and autocrat. Productive thinking is the cornerstone of superleadership and managers are encouraged to teach followers how to engage in productive thinking.

Internet Exercises

1. Evaluating Leadership Styles

The purpose of the exercise is for student to evaluate the leadership style of an historical figure. They are directed to go to the Internet homepage for Leadership Values (www.leader-values.com) and to select the subheading ”4 E’s” on the left side of the screen. This section provides an overview of leadership and suggests four essential traits/behaviours that are exhibited by leaders to envision, enable, empower and energize. After reading the material, they then go back to the home page and select the subheading “Historical Leaders” from a list on the left-hand side of the page, choose one of the leaders and read the description about his or her leadership styles. You might want your students to do additional research on the person and present it in class to see more sides than can be presented in one site. You might first go to the site yourself and then assign or have the students pick different leaders or work in teams of 2-3 on a leader. The questions asked are: