1. part Chapter © 2009 The McGraw-Hill Companies, Inc. All rights reserved. 1 McGraw-Hill Leadership and Culture 2 Chapter 6

2. © 2009 The McGraw-Hill Companies, Inc. All rights reserved. 2 McGraw-Hill Learning Objectives 1.Define leadership, power, and authority. 2.Discuss leadership as it relates to management. 3.Explain leadership attitudes. 4.Describe the differences between a Theory X and Theory Y manager. 5.Explain the differences between Transactional, Transformational, and Charismatic leadership styles. 6.Identify strategies for effectively managing corporate culture.

3. © 2009 The McGraw-Hill Companies, Inc. All rights reserved. 3 McGraw-Hill Power, Authority, and Leadership Power –Viewed negatively –Positive and negative form –Power can be exercised in all directions Authority –Function of position –Can be diminished Leadership –A leader

4. © 2009 The McGraw-Hill Companies, Inc. All rights reserved. 4 McGraw-Hill Leadership and Management Effective leadership Management is a process Leader Attitudes Douglas McGregor –Theory X –Theory Y –Self-fulfilling prophecy

5. © 2009 The McGraw-Hill Companies, Inc. All rights reserved. 5 McGraw-Hill Douglas McGregor’s Leader Theory Theory X Inherent dislike of work People must be coerced People prefer to be directed Theory Y Natural to want to work People will exercise self-direction People seek responsibility Intellectual potential only partially utilized

6. © 2009 The McGraw-Hill Companies, Inc. All rights reserved. 6 McGraw-Hill Framework for Classifying Leadership Studies Numerous studies Focus –Traits –Behaviors Approach –Universal approach –Contingent approach

7. © 2009 The McGraw-Hill Companies, Inc. All rights reserved. 7 McGraw-Hill Trait Theory At first glance, traits distinguish leaders from followers However, research has been fruitless Basic Leadership Styles Three basic styles –Autocratic –Laissez-faire –Democratic

8. © 2009 The McGraw-Hill Companies, Inc. All rights reserved. 8 McGraw-Hill Ohio State Studies Series of studies Leader Behavior Description Questionnaire Two leader behaviors –Consideration –Initiating structure Other studies Major conclusions –High on consideration = satisfied subordinates –Relationship depends on group led –No relationship between leader effectiveness and initiating structure

9. © 2009 The McGraw-Hill Companies, Inc. All rights reserved. 9 McGraw-Hill University of Michigan Studies Institute for Social Research Interviews Five Results Opposite techniques = low-producing groups Rensis Likert Four Patterns Results

10. © 2009 The McGraw-Hill Companies, Inc. All rights reserved. 10 McGraw-Hill The Managerial Grid Method of classification Two dimensional framework Five basic styles –Authority-obedience –Country club management –Team management –Impoverished management –Organization man management

11. © 2009 The McGraw-Hill Companies, Inc. All rights reserved. 11 McGraw-Hill Contingency Approach to Leadership Focus on style Fred Fiedler’s basic traits LPC Task-motivated Relationship-motivated Three major dimensions: – Leader-member relations – Task structure – Position power

12. © 2009 The McGraw-Hill Companies, Inc. All rights reserved. 12 McGraw-Hill Continuum of Leader Behaviors Different styles Forces : – In the manager – In the subordinate – In the situation One style not effective Behaviors depend on situation

13. © 2009 The McGraw-Hill Companies, Inc. All rights reserved. 13 McGraw-Hill Path-Goal Theory of Leadership Four role types – Role classification – Supportive leadership – Participative leadership – Autocratic leadership Situational Leadership Proposes progression

14. © 2009 The McGraw-Hill Companies, Inc. All rights reserved. 14 McGraw-Hill Transactional, Transformational and Charismatic leadership New approach Transactional leadership –Tell employees what they need to do to obtain rewards –Corrective action if performance fails Transformational leadership –Mutual encouragement Charismatic leadership –Heroic feats –Examples

15. © 2009 The McGraw-Hill Companies, Inc. All rights reserved. 15 McGraw-Hill Lessons from Leadership Studies Given the situational factors, a selection process is unlikely Changing nature of managerial role Most leadership remains situational Effectiveness Key determinant

16. © 2009 The McGraw-Hill Companies, Inc. All rights reserved. 16 McGraw-Hill Managing Corporate Culture Culture definition How people should behave Corporate culture Cultural Forms of Expression Two basic components – Substance – Forms

17. © 2009 The McGraw-Hill Companies, Inc. All rights reserved. 17 McGraw-Hill How does Culture Originate? One person Fewer than half Four distinct factors – History – Environment – Selection process – Socialization process Strong and Weak Corporate Culture

18. © 2009 The McGraw-Hill Companies, Inc. All rights reserved. 18 McGraw-Hill Identifying Culture Seven characteristics Continuum Types determined by factors Tough-person, Macho Culture Work-Hard/Play-Hard Culture Bet-Your-Company Culture Process Culture Organization Subcultures

19. © 2009 The McGraw-Hill Companies, Inc. All rights reserved. 19 McGraw-Hill Changing Culture 6 to 15 years 5 reasons for change Only when forced People believe its easier to replace people