1. Business Essentials, 7th Edition Ebert/Griffin
Leadership and decision-making
Business Essentials, 7th Edition Ebert/Griffin
Instructor Lecture PowerPoints
PowerPoint Presentation prepared by
Carol Vollmer Pope Alverno College
© 2009 Pearson Education, Inc.

2. The Nature of Leadership
What Is Leadership?
The processes and behaviors used by someone, such as a manager, to motivate, inspire, and influence the behaviors of others.
Are Leadership and Management the Same?
No. A person can be a manager, a leader, both, or neither.
First let’s look at the nature of leadership. Leadership is the processes and behaviors used by someone, such as a manager, to motivate, inspire, and influence the behaviors of others.
Are leadership and management the same? The answer to that question is no. A person can be a manager, a leader, both, or neither.
Teaching Tips:
In your student teams, please make a list of three key leaders you respect. Please discuss which of these three people your team chose are leaders, managers, both or neither. Please state reasons as to why you believe they are leaders. We will share our examples with the class.
Answers will vary but should address the same topics as in the definition of leadership.
© 2009 Pearson Education, Inc.

3. TABLE 9.1 Kotter’s Distinctions Between Management and Leadership
Let’s look at Kotter’s distinctions between management and leadership. Here we will first examine an activity. Then in the second column we see the management view of what is involved in this activity. In the third column we see the view from the perspective of a leader. Let’s look at the four examples:
Creating an agenda.
Management looks at this from the perspective of planning and budgeting.
Leadership looks on such an activity as establishing direction.
Developing a human network for achieving the agenda.
Management looks at this from the perspective of organizing and staffing such a network.
Leadership looks at such an activity as aligning people.
Executing plans.
Management looks at this as controlling and problem-solving.
Leadership, on the other hand, looks at this as motivating and inspiring others.
Outcomes.
Management looks at outcomes as producing a degree of predictability and order and as having the potential to consistently produce major results expected by various stakeholders.
Leadership looks at outcomes as producing change, often to a dramatic degree, and having the potential to product extremely useful change.
Teaching Tips:
In your student teams, choose one of these four activities we have just discussed. Please think of an example of both management and leadership points of view on the activity your team chose. We will share our answers with the class.
Answers will vary but should come back to the four views stated in the table.
Source: The Free Press, an imprint of Simon & Schuster Adult Publishing Group, from A Force for Change: How Leadership Differs from Management, by John P. Kotter, Copyright 1990 by John P. Kotter, Inc.
© 2009 Pearson Education, Inc.

4. Early Approaches to Leadership
Trait Approaches to Leadership
Focused on identifying essential leadership traits
Intelligence, dominance, self-confidence, energy, activity (versus passivity), and knowledge about the job
Physical traits (height, body shape, handwriting)
Yielded inconsistent results
Recent research has focused on a limited set of traits
Emotional intelligence, mental intelligence, drive, motivation, honesty and integrity, self-confidence, knowledge of the business, and charisma
Let’s take a moment to look at some early approaches to leadership. First, we will examine the trait approaches to leadership.
Trait approaches to leadership focused on identifying essential leadership traits. These included:
Intelligence.
Dominance.
Self-confidence.
Energy.
Activity (vs. passivity).
Knowledge about the job.
Physical traits, including height, body shape and handwriting.
The traits, however, yielded inconsistent results.
Recent research has focused on a limited set of traits. These include:
Emotional intelligence.
Mental intelligence.
Drive.
Motivation.
Honesty and integrity.
Knowledge of the business.
Charisma.
Teaching Tips:
In your student teams, please go back to the list of three leaders you prepared a few moments ago. Please look at the limited set of leadership traits we just discussed. Please discuss how you believe your leaders do or do not exhibit any of these traits. We will share our discussion with the class.
Answers will vary.
© 2009 Pearson Education, Inc.

5. Early Approaches to Leadership (cont’d)
Behavioral Approaches to Leadership
Focused on the behaviors of effective leaders versus ineffective leaders
Assumed that the behaviors of effective leaders would be the same across all situations
Task-focused leader behaviors related to increasing the performance of employees
Employee-focused leader behaviors related to job satisfaction, motivation, and well-being of employees
Another early approach to leadership was behavioral. Behavioral approaches to leadership focused on the behaviors of effective leaders compared to ineffective leaders. It was assumed, in this approach, that the behaviors of effective leaders would be the same across all situations. For example:
Task-focused leader behaviors related to increasing the performance of employees.
Employee-focused leader behaviors related to job satisfaction, motivation and well-being of employees.
Teaching Tips:
Once again in your student teams, please refer back to your three leaders. Taking the behavioral approach and its focus, do you believe your three leaders would have been considered true “leaders” by behaviorists? Why or why not? We will share our answers with the class.
Answers will vary but should focus on relating the chosen leader to the task- or employee-focused behaviors.
© 2009 Pearson Education, Inc.

6. The Situational Approach to Leadership
Assumes that appropriate leader behavior varies from one situation to another
Continuum of leadership behavior
Considers influences of the characteristics of the leader, subordinates, and the situation
Continuum ranges from having the leader make decisions alone (i.e., task-focused) to having employees make decisions with only minimal guidance from the leader
Let’s examine the situational approach to leadership. The situational approach to leadership assumes that appropriate leader behaviors vary from one situation to another and that there is a continuum of leadership behavior.
This continuum considers influences of the characteristics of the leader, subordinates and the situation.
This continuum ranges from having the leader make decisions alone (or task-focused) to having employees make decisions with only minimal guidance from the leader.
Teaching Tips:
In your student teams please make a few notes as to how you believe your three leaders fall on this continuum. We will hold our answers until we have viewed a graphic version of the situational approach on the next slide.
© 2009 Pearson Education, Inc.

7. FIGURE 9.1 The Leadership Continuum
Let’s take a look at the Leadership Continuum. This graphical view of the continuum balances boss-centered leadership and the increasing use of authority by a manager with a subordinate-centered leadership style with increasing use of freedom for subordinates. Let’s look at different steps in this continuum:
A manager makes a decision and announces it.
The manager then “sells” the decision.
The manager presents ideas and invites questions.
The manager presents a tentative decision subject to change.
The manager presents a problem, gets suggestions and makes a decision.
The manager defines limits, asks the group to make a decision.
The manager permits subordinates to function within limits defined by a superior.
Teaching Tips:
In your student teams, please refer back to the notes you made about where your three example leaders fall on this continuum. Based on seeing this continuum from a graphical perspective, please decide if you believe your sample leaders might use a more boss-centered or subordinate-centered leadership style. Be sure to have reasons for your choices. We will share our answers with the class.
Answers will vary but should focus back to the steps in this model.
Source: Harvard Business Review. An exhibit from “How to Choose a Leadership Pattern” by Robert Tannenbaum and Warren Schmidt (May-June 1973). Copyright 1973 by the President and Fellows of Harvard College; all rights reserved.
© 2009 Pearson Education, Inc.

8. Leadership Through the Eyes of Followers
Transformational Leadership
The set of abilities that allows a leader to recognize the need for change, to create a vision to guide that change, and to execute the change effectively
Transactional Leadership
Basic management involving routine, regimented activities (leading during a period of stability)
Now we will look at leadership through the eyes of followers. First we will look at transformational leadership and compare it to transactional leadership.
Transformational leadership recognizes the set of abilities that allows a leader to recognize:
The need for change.
The need to create a vision to guide that change.
How to execute the change effectively.
Transactional leadership addresses basic management involving routine, regimented activities, which could be used to lead during a period of stability.
Teaching Tips:
In your student teams, again examining your three leaders, discuss whether you believe they exhibit transformational or transactional leadership styles. We will discuss our answers with the class.
Answers will vary.
© 2009 Pearson Education, Inc.

9. Leadership Through the Eyes of Followers (cont’d)
Charisma
Charisma: A form of interpersonal attraction that inspires support and acceptance
Charismatic Leadership
Influence based on the leader’s personal charisma
Another method to look at leadership through the eyes of followers is through charismatic leadership.
What is charisma? It is a form of interpersonal attraction that inspires support and acceptance.
What, then is charismatic leadership? It is a leadership style based on the leader’s personal charisma. This includes three areas:
Envisioning:
Articulating a compelling vision
Setting high expectations
Modeling consistent behaviors
Energizing:
Demonstrating personal excitement
Expressing personal confidence
Seeking, finding and using success
Enabling:
Expressing personal support
Empathizing
Expressing confidence in people
Teaching Tips:
In your student teams, please examine your three leaders and determine whether they are charismatic leaders. Please be sure to include the traits we have just discussed in making your decision. We will share our decisions with the class.
© 2009 Pearson Education, Inc.

10. Special Issues in Leadership
Leadership Substitutes
Individual, task, and organizational characteristics that tend to outweigh the need for a leader to initiate or direct employee performance
Leadership Neutralizers
Various factors that neutralize leadership behaviors or render them ineffective
The norms of strongly cohesive groups
Elements of the job
Organizational factors
Now we will examine some special issues in leadership. These include leadership substitutes and leadership neutralizers.
Leadership substitutes are individual, task, and organizational characteristics that tend to outweigh the need for a leader to initiate or direct employee performance.
Leadership neutralizers include various factors that neutralize leadership behaviors or render them ineffective. These include:
The norms of strongly cohesive groups.
Elements of the job.
Organizational factors.
Teaching Tips:
In your student teams, please think of a situation within a company that might call for either leadership substitutes or leadership neutralizers. Before we share our answers, let’s take a look at specific examples.
© 2009 Pearson Education, Inc.

11. TABLE 9.2 Leadership Substitutes and Neutralizers
Leadership substitutes and neutralizers include individual, job, organization and group factors. Let’s examine some examples of each:
Individual factors:
Individual professionalism
Individual ability, knowledge, and motivation
Individual experience and training
Indifference to rewards
Job factors:
Structured or automated
Highly controlled
Intrinsically satisfying
Embedded feedback
Organization factors:
Explicit plans and goals
Rigid rules and procedures
Rigid reward system not tied to performance
Physical distance between supervisor and subordinate
Group factors:
Group performance norms
High level of group cohesiveness
Group interdependence
Teaching Tips:
Now, in your student teams, refer back to the situation you imagined for your example company. L ooking at these specific factors, please choose those which you believe would or could apply to the situation you discussed. We will share our answers with the class.
Answers will vary.
© 2009 Pearson Education, Inc.

12. The Changing Nature of Leadership
Leader as Coach
From directive overseer to mentor
Gender
Understanding the differences and dynamics in the approaches of women and men to leadership
Cross-Cultural Leadership
The effects of an individual’s native culture on his or her approach to leadership when functioning in another culture
Collectivism versus individualism
Now let’s look at the changing nature of leadership.
First let’s look at the leader as a coach. In this situation, the leader moves from the position of a directive overseer to a mentor.
Second, let’s think about gender. We need to understand the differences and dynamics in the approaches of women and men to leadership. How are they different?
Third, we now have cross-cultural leadership. We need to take into account the effects of an individual’s native culture on his or her approach to leadership when functioning in another culture.
For example, compare collectivism versus individualism. The U.S. is a very individualistic nation. Cultures such as China and Latin American countries are very collectivistic and care more about the group or family than the individual.
Teaching Tips:
In your student teams, go back and remember your three examples of leaders from earlier in this session. How might the changing nature of leadership apply to any or all of your chosen leaders? Please give examples. We will share our examples with the class.
Answers will vary.
© 2009 Pearson Education, Inc.

13. Emerging Issues in Leadership
Strategic Leadership
Leader’s ability to understand the complexities of the organization and its environment and lead change so as to enhance organizational competitiveness
Ethical Leadership
Leader’s ability to maintain high ethical standards for personal conduct, unfailingly exhibit ethical behavior, and hold others to the same standards
Virtual Leadership
Leading through effective communication and maintaining collaborative relationships at a distance
There are also some emerging issues in leadership that we will discuss.
Strategic leadership.
This is the leader’s ability to understand the complexities of the organization and its environment and lead change so as to enhance organizational competitiveness.
Ethical leadership.
This is the leader’s ability to maintain high ethical standards for personal conduct, unfailingly exhibit ethical behavior and hold others to the same standards.
Virtual leadership.
This is leading through effective communication and maintaining collaborative relationships at a distance.
Teaching Tips:
In your student teams, choose one of the three emerging issues we have just reviewed. Discuss an example of this type of leadership and examine if any of your three example leaders exhibit these traits. We will share our examples with the class.
Answers will vary based on leaders chosen; however, responses should include the characteristics of the three types of leadership discussed in this slide.
© 2009 Pearson Education, Inc.

14. Leadership, Management, and Decision-Making
Rational decision-making
Recognizing and defining the decision situation
Identifying alternatives
Evaluating alternatives
Selecting the best alternative
Implementing the chosen alternative
Following up and evaluating the results
We also need to examine rational decision-making. Rational decision-making includes the following elements:
Recognizing and defining the decision situation.
Identifying alternatives.
Evaluating alternatives.
Selecting the best alternative.
Implementing the chosen alternative.
Following up and evaluating the results.
Teaching Tips:
Let’s look at this type of decision-making in a graphical form now.
© 2009 Pearson Education, Inc.

15. FIGURE 9.2 Steps in the Rational Decision-Making Process
In this figure we see the six steps we just discussed but with details and examples for each.
Teaching Tips:
In your student teams, please review these six steps, the detail and the example. Then please come up with a new example for each step. We will share examples with the class.
Answers will vary.
© 2009 Pearson Education, Inc.

16. Behavioral Aspects of Decision-Making
Political Forces in Decision-Making
Coalition: An informal alliance of individuals or groups formed to achieve a common goal
Intuition
An innate belief about something, often without conscious consideration
Escalation of Commitment
Staying with a chosen course of action, even when it appears to have been wrong
Risk Propensity
The extent to which a decision-maker is willing to gamble when making a decision
There are also behavioral aspects of decision-making. Let’s examine these:
There are political forces at work in decision-making.
This may be called a coalition: An informal alliance of individuals or groups formed to achieve a common goal.
Intuition plays a part in decision-making.
Intuition is an innate belief about something, often without conscious consideration.
Escalation of commitment by a manager or leader.
This means staying with a chosen course of action, even when it appears to have been wrong.
Risk propensity plays a part in decision-making.
Risk propensity is the extent to which a decision-maker is willing to gamble when making a decision.
Teaching Tips:
In your student teams, please choose one of the four behavioral aspects of decision-making we have just discussed. Please come up with an example of your chosen behavioral aspect. How might one of your three example leaders respond based on what you know of their personality or behavior? We will share our examples with the class.
Answers will vary. You may want to have student prepare a brief profile of at least one of their three example leaders from the entire class discussion and share that with the class as well.
© 2009 Pearson Education, Inc.