1. Chapter 10: Leadership
The learning objectives for chapter 10 focus on leadership. As you read the chapter, try to keep in mind the following objectives: define leadership, power, and explain what role power plays in leadership. Describe the different types of power that leaders possess and when they can use those types most effectively. Explain what behaviors leaders exhibit when trying to influence others. Understand which of these behaviors is most effective. Explain how leaders use their power and influence to resolve conflicts in the workplace. Describe what it means for a leader to be “effective.” Explain the four styles leaders can use to make decisions. Describe which factors combine to make some styles more effective in a given situation. Describe the two dimensions that capture most of the day-to-day leadership behaviors that leaders engage in. Understand how transformational leadership differs from transactional leadership. Describe which kinds of behaviors underlie transformational leadership. Finally, explain how leadership affects job performance and organizational commitment.
McGraw-Hill/Irwin
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2. Leadership and Power
Leadership is the use of power and influence to direct the activities of followers toward goal achievement.
Power can be defined as the ability to influence the behavior of others and resist unwanted influence in return.
Just because a person has the ability to influence others does not mean he will actually choose to do so.
Power can be seen as the ability to resist the influence attempts of others.
It is fair to say that leaders within organizations do make a significant difference in the success of the organization. The subject of leadership has been widely researched and written about. Over 200,000 books on leadership can be found on amazon.com. We define leadership as the use of power and influence to direct the activities of followers toward goal achievement. This chapter focuses on how leaders acquire power and influence. Power is defined as the ability to influence the behavior of others and resist unwanted influence in return.

3. Types of Power Organizational Power Personal Power
Legitimate power is derived from a position of authority inside the organization and is sometimes referred to as “formal authority.”
Reward power exists when someone has control over the resources or rewards another person wants.
Coercive power exists when a person has control over punishments in an organization.
Personal Power
Expert power is derived from a person’s expertise, skill, or knowledge on which others depend.
Referent power exists when others have a desire to identify and be associated with a person.
Where does power come from? How do leaders acquire power? These are two central questions that we will now turn our attention to. It is important to understand that there are five major types of power. These five types of power are grouped along two dimensions: organizational power and personal power. Let's first turn to the dimension of organizational power. There are three types of organizational power which are considered more formal. Legitimate power is derived from an authority position inside the organization. It is sometimes called formal authority. Individuals with legitimate power usually have some title that suggests that they are high up in the organizational hierarchy. Reward power is somewhat intertwined with legitimate power. It exists when someone has control over the resources or rewards another person wants. Examples of reward power include managers with control over raises, evaluations, awards, promotions, and so on. Coercive power is also intertwined with legitimate power and exists when a person has control over punishments in an organization. It operates primarily on fear. The women listed in the Table 10-1 have organizational power which is legitimate. Chances are that they each have additional capabilities that help them influence others. These other capabilities fall into the category of personal power. There are two types of personal power, expert power and referent power. Expert power stems from the individuals expertise, skill and knowledge. When individuals have the ability to solve problems or a good track record of high performance, they are more likely to be able to influence others. Referent power exists when other people have a desire to identify and be associated with an individual. This desire is based on an affection, admiration, or loyalty toward a specific individual. We have seen in our discussion thus far, that there are five types of power that fall along two dimensions. Figure 10-1 illustrates this. Legitimate power, reward power, and coercive power fall under the dimension of organizational power; expert power and referent power is within the dimension of personal power. Of course, power, regardless of its source, leads to the ability to influence others.
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4. Contingency Factors
Substitutability is the degree to which people have alternatives in accessing resources.
Discretion is the degree to which managers have the right to make decisions on their own.
Centrality represents how important a person’s job is and how many people depend on that person to accomplish their tasks.
Visibility is how aware others are of a leader’s power and position.
The use of power by individuals to try to influence others depends on four factors. Substitutability is the degree to which people have alternatives to gain resources. Leaders that control resources that limits access to others can use their power to gain greater influence. Discretion is the degree to which managers have the right to make decisions on their own. If they are constrained by policies and rules, their ability to influence others is reduced. Centrality represents the importance of a person's job. Leaders who perform critical tasks and interact with others regularly have a greater ability to use their power to influence others. Finally, visibility is the extent to which others are aware of a leader's power and position. The four contingencies that limit or enhance an individual's ability to use his or her power to influence others, as we have seen, are substitutability, centrality, discretion, and visibility. These are summarized in Table 10-2 in the textbook.
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5. Using Influence
Influence is the use of an actual behavior that causes behavioral or attitudinal changes in others.
Influence can be seen as directional.
Most frequently occurs downward (managers influencing employees) but can also be lateral (peers influencing peers) or upward (employees influencing managers).
Influence is all relative.
Absolute power of the “influencer” and “influencee” isn’t as important as the disparity between them.
Leaders depend on a variety of tactics to influence others. There are ten types of tactics that leaders use. The four most effective tactics are rational persuasion, inspirational appeals, consultation, and collaboration. We will discuss each in the following slides.
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6. Influence Tactics
Rational persuasion is the use of logical arguments and hard facts to show the target that the request is a worthwhile one.
An inspirational appeal is a tactic designed to appeal to the target’s values and ideals, thereby creating an emotional or attitudinal reaction.
Consultation occurs when the target is allowed to participate in deciding how to carry out or implement a request.
A leader uses collaboration by attempting to make it easier for the target to complete the request.
Rational persuasion uses logical arguments and facts to influence others. Research suggests that rational persuasion is most effective when it helps show that a proposal is important and feasible. An inspiration appeal is a tactic designed to appeal to an individual's ideals and values creating an emotional reaction. Consultation occurs when an individual is allowed to participate in deciding how to carry out a request. This tactic increases the commitment of the individual who has a stake in the outcome. A leader uses collaboration by attempting to make it easier for an individual to complete a request.
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7. Influence Tactics, Cont’d
Ingratiation is the use of favors, complements, or friendly behavior to make the target feel better about the influencer.
Personal appeals are when the requestor asks for something based on personal friendship or loyalty.
An exchange tactic is used when the requestor offers a reward or resource to the target in return for performing a request.
Apprising occurs when the requestor clearly explains why performing the request will benefit the target personally.
There are four other influence tactics that may or may not be effective. Sometimes they are, and sometimes they are not. The first is ingratiation and is the use of favors or complements or friendliness to make someone feel better about the person trying to influence. This is sometimes called sucking up especially when used in an upward influence sense. Personal appeal as a tactic are used when the requestor asks for something based on personal friendship or loyalty. An exchange tactic is used with an individual offers a reward in return for performing request. And finally apprising occurs when the individual clearly explains why performing the request will be beneficial to the one being influenced.
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8. Influence Tactics, Cont’d
Pressure is the use of coercive power through threats and demands.
Coalitions occur when the influencer enlists other people to help influence the target.
Influence tactics tend to be most successful when used in combination.
The influence tactics that tend to be most successful are those that are “softer” in nature.
Rational persuasion, consultation, inspirational appeals, and collaboration
The final two tactics that have been shown to be least effective and can actually result in resistance are called pressure and coalitions. Pressure is the use of coercive power through threats and demands. This is a poor way to try to influence the other. The last tactic is the formation of coalitions. These occur when the individual enlists other people to help influence someone. Our previous discussion on influence tactics are summarized in Figure The influence tactics are ordered in terms of their effectiveness.
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9. Response to Influence Tactics
Engagement occurs when the target of influence agrees with and becomes committed to the influence request (behaviors and attitudes).
Compliance occurs when targets of influence are willing to do to what the leader asks, but they do it with a degree of ambivalence (behaviors but not attitudes).
Resistance occurs when the target refuses to perform the influence request and puts forth an effort to avoid having to do it.
We have seen that there are 10 different influence tactics. We have also discussed the relative effectiveness of each. There are three possible responses people have to these influence tactics. The first is called engagement and occurs when the person being influenced agrees with an commits to the request. Engagement represents a shift in both behavior and attitude of the individual who has been influenced. The second response is compliance and occurs when people are willing to do what the leader asks, but do it reluctantly or with ambivalence. Compliance reflects a shift in behavior but not attitudes. Finally, individuals can engage in resistance to influence tactics where they refuse to perform the request and exert efforts to avoid having to do it. The three possible responses to influence tactics are summarized in Figure The figure illustrates that the responses are largely influenced by the effectiveness of the influence tactics that are being used by the leader.
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10. Conflict Resolution
There are five different styles a leader can use when handling conflict, each of which is appropriate in different circumstances.
The five styles can be viewed as combinations of two separate factors: how assertive leaders want to be in pursuing their own goals and how cooperative they are with regard to the concerns of others.
Competing (high assertiveness, low cooperation) occurs when one party attempts to get his or her own goals met without concern for the other party’s results.
Avoiding (low assertiveness, low cooperation) occurs when one party wants to remain neutral, stay away from conflict, or postpone the conflict to gather information or let things cool down.
Leaders use their power to shape office politics as we have seen. They also use their influence in the context of conflict resolution. Conflict arise when individuals perceive that their goals are in opposition. It should be clear to you that conflict and politics are clearly interconnected. The pursuit of one's self-interest often comes into conflict with the interests of another in the organization. When conflict does arise, it is often the leader's responsibility to manage it effectively. There are five different styles a leader can use when dealing with conflict, each style is appropriate to different circumstances. The conflict resolution style of competing is high in assertiveness and low on cooperation and occurs when one party attempts to get her own goals met without concern for the other party's results. It is considered a win-lose or zero sum approach to conflict management. The style of avoiding is low on assertiveness and low on cooperation. This occurs when one party wants to stay away from the conflict or perhaps let things cool down. Avoiding usually results in an unfavorable result for everyone and may lead to a negative view of the leader.
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11. Conflict Resolution, Cont’d
Accommodating (low assertiveness, high cooperation) occurs when one party gives in to the other and acts in a completely unselfish way.
Collaboration (high assertiveness, high cooperation) occurs when both parties work together to maximize outcomes.
Compromise (moderate assertiveness, moderate cooperation) occurs when conflict is resolved through give-and-take concessions.
Negotiation is a process in which two or more interdependent individuals discuss and attempt to come to an agreement about their different preferences.
The accommodating style of conflict resolution is low on assertiveness and high on cooperation and occurs when one party gives in to the other and acts in an unselfish way. Leaders will use an accommodating strategy when the issue is really not important to them but is very important to the other party. The accommodating style of conflict resolution is low on assertiveness and high on cooperation and occurs when one party gives in to the other and acts in an unselfish way. Leaders will use an accommodating strategy when the issue is really not important to them but is very important to the other party. Figures 10-4 presents the five conflict resolution styles along the dimensions of a concern for one's own outcomes and a concern for the other's outcomes. Each of the five conflict handling styles range in level of assertiveness, where the style of avoiding is the most unassertive and competing is the most assertive. Further, the level of cooperation is a dimension of concern for managing conflict.
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12. Decision-Making Styles
Decision-making styles capture how a leader decides as opposed to what a leader decides.
Autocratic style - the leader makes the decision alone without asking for the opinions or suggestions of the employees in the work unit.
Consultative style - the leader presents the problem to individual employees or a group of employees, asking for their opinions and suggestions before ultimately making the decision him- or herself.
Facilitative style - the leader presents the problem to a group of employees and seeks consensus on a solution, making sure that his or her own opinion receives no more weight than anyone else’s.
Delegative style - the leader gives an individual employee or a group of employees the responsibility for making the decision within some set of specified boundary conditions.
One of the most important responsibilities that leaders have is to make decisions. A leader's decision making style reflects the process the individual uses to generate alternatives and to select among them to solve a problem. Decision making styles capture how a leader decides as opposed to what a leader decides. The most important element of a leader's decision making style is captured in the question: "does the leader decide things for himself or does he involve others in the process?" If a leader has an autocratic style, she makes the decision alone without asking for opinions or suggestions from employees. If a leader uses a consultative style, she presents the problem to employees either individually or in a group, solicits their opinions and suggestions before making the decision. Here employees have a say in the process, but the ultimate authority and responsibility rests with the leader. When a leader presents a problem to a group of employees and seeks consensus on a solution, he is using a facilitative style of decision making. In this style, the leader is more of a facilitator than a decision maker. When a leader gives an individual employee or a group of employees the responsibility for making the decision, she is using the delegative style. Here the leader does not play a direct role in making the decision other than providing resources to the employees to assist in their deliberations. Figure 10-5 from the textbook summarizes the four leader decision making styles we have discussed. Note that the role of the follower is directly related to the type of decision making style used by a leader. The delegative style is characterized by high follower control at one end, and with an autocratic style, high leader control.
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13. Time-Driven Model of Leadership
The model suggests that the focus should shift away from autocratic, consultative, facilitative, and delegative leaders to autocratic, consultative, facilitative, and delegative situations.
The model suggests that seven factors combine to make some decision-making styles more effective in a given situation and other styles less effective.
Decision significance: Is the decision significant to the success of the project or the organization?
Importance of commitment: Is it important that employees “buy in” to the decision?
Leader expertise: Does the leader have significant knowledge or expertise regarding the problem?
Likelihood of commitment: How likely is it that employees will trust the leader’s decision and commit to it?
There is no one-best decision making style that is appropriate for all situations. Each decision making style has it pluses and minuses. Leaders can effectively manage their choice of decision making style thereby increasing the quality and efficacy of those decisions. The time driven model of leadership provides a guide for leaders in this regard. The model suggests that the focus should shift away from leaders in favor of a focus on situations. The model specifies seven factors that combine to make some decision making styles more effective in given situations and other styles less effective. The first four factors of the time driven model of leadership are displayed on this slide. Each factor suggests a question that needs to be evaluated in arriving at an appropriate decision making style. First is decision significance which considers whether the decision is significant to the success of the project or the organization. Next is the importance of commitment. It is important that employees buy in to the decision. Leader expertise is the third factor in the model. This is concerned with whether the leader has significant knowledge or expertise regarding the problem. The likelihood of commitment is next and assesses how likely it is that employees will trust the leader's decision and commit to that decision.
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14. Time-Driven Model of Leadership, Cont’d
Shared objectives: Do employees share and support the same objectives, or do they have an agenda of their own?
Employee expertise: Do the employees have significant knowledge or expertise regarding the problem?
Teamwork skills: Do the employees have the ability to work together to solve the problem, or will they struggle with conflicts or inefficiencies?
The remaining three factors of the time driven model of leadership are provided on this slide. Shared objectives evaluates whether employees share and support the same objectives or whether they have their own agenda. Employee expertise is an important consideration in gauging whether the employees have the knowledge or expertise regarding the problem. The final factor deals with teamwork skills and assesses whether employees have the ability to work together to solve problems or if there are relationships characterized by conflict and inefficiencies. The time driven model of leadership is displayed in Figure The model focuses on the degree to which one or more of the seven situational factors is important to the decision. Based on this situational analysis, a particularly decision making style is deemed to be more appropriate.
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15. Ohio States Studies
Initiating structure reflects the extent to which the leader defines and structures the roles of employees in pursuit of goal attainment.
Consideration reflects the extent to which leaders create job relationships characterized by mutual trust, respect for employee ideas, and consideration of employee feelings.
Initiating structure and consideration were independent concepts, meaning that leaders could be high on both, low on both, or high on one and low on the other.
What do leaders do on a day to day basis? In the 1950's, studies at Ohio State University attempted to answer that question. They began by generating a list of about 1,800 behaviors that leaders engage in. These behaviors were then reduced to about 150 examples and grouped into several categories. We will discuss each of these categories in turn. The first is initiating structure which reflects the extent to which the leader defines and structures the roles of his employees. Leaders who are high on initiating structure play a more active role in directing group activities including planning, scheduling, and trying out new ideas. The second category is called consideration. This reflects the extent to which a leader develops job relationships based on mutual trust, respect for employee ideas and their consideration of employee feelings. Leaders who are high on consideration tend to create a climate of good will and strong two way communication. They also tend to exhibit a deep concern for the welfare of their employees. While the Ohio Studies initially generated 1,800 behaviors, these were further trimmed down to about 150 and then grouped into categories. Further analyses showed that the eight categories can be reduced to the two dimensions that we've just discussed—initiating structure, and consideration. Table 10-3 provides examples of these two dimensions.
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16. Michigan Studies
Identified concepts similar to initiating structure and consideration, calling them production-centered (or task-oriented) and employee-centered (or relations-oriented) behaviors.
Framed their task-oriented and relations-oriented concepts as two ends of one continuum, implying that leaders couldn’t be high on both dimensions.
The Ohio Studies concluded that initiating structure and consideration were independent concepts where leaders could be high on one and low on the other or various combinations between. A series of studies conducted at the University of Michigan around the same time reached a different conclusion. The Michigan studies identified similar concepts as the Ohio Studies but referred to them as production or task oriented and employee centered or relationship oriented behaviors. The Michigan studies suggest that task oriented behaviors and relationship oriented behaviors are two ends of the same continuum. This suggests that leaders cannot be high on both or low on both. This differs significantly from the Ohio studies framework.
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17. Transformational Leadership Behaviors
Transformational leadership involves inspiring followers to commit to a shared vision that provides meaning to their work while also serving as a role model who helps followers develop their own potential and view problems from new perspectives.
Laissez-faire leadership (i.e., hands-off) is the avoidance of leadership altogether.
Up to this point, the leadership behaviors we have discussed explain why employees perform or don't perform consistent with expectations. We now turn to a discussion as how leaders motivate their employee to perform beyond those expectations. Transformational leadership focuses on inspiring follower to adopt a shared vision that provides meaning to their work while also serving as a role model to help followers develop their own potential and view problems from new perspectives. Transformational leaders increase employee confidence and help them view their work with a focus on the collective good rather than just on their own short term self interests. When this happens, employees tend to perform beyond expectations. Laissez-faire leadership (i.e., hands-off) is the avoidance of leadership altogether. Figure 10-7 in the text summarizes our discussion on transactional and transformational leadership.
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18. Transformational Leadership Behaviors, Cont’d
Transactional leadership occurs when the leader rewards or disciplines the follower depending on the adequacy of the follower’s performance.
With passive management-by-exception, the leader waits around for mistakes and errors, then takes corrective action as necessary.
With active management-by-exception, the leader arranges to monitor mistakes and errors actively and again takes corrective action when required.
Contingent reward happens when the leader attains follower agreement on what needs to be done using promised or actual rewards in exchange for adequate performance.
Transactional leadership exists when the leader rewards or disciplines employees depending on the adequacy of their performance. When a leader waits around for mistakes or errors and then takes corrective action, he is engaged in passive management by exception. If the leader arranges to monitor mistakes and errors and takes corrective action as required, he is engaged in active management by exception. Contingent reward represents a more active and effective brand of transactional leadership where the leader gets the employees agreement on what needs to be done using promised or actual rewards in exchange for performance.
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19. Dimensions of Transformational Leadership
Idealized influence involves behaving in ways that earn the admiration, trust, and respect of followers, causing followers to want to identify with and emulate the leader.
Inspirational motivation involves behaving in ways that foster an enthusiasm for and commitment to a shared vision of the future.
Intellectual stimulation involves behaving in ways that challenge followers to be innovative and creative by questioning assumptions and reframing old situations in new ways.
Individualized consideration involves behaving in ways that help followers achieve their potential through coaching, development, and mentoring.
Transformational leadership is a powerful model. The full spectrum of transformational leadership can be summarized using four dimensions: idealized influence, inspirational motivation, intellectual stimulation, and individualized consideration. The four dimensions of transformational leadership are called the Four I's. Causing followers to want to identify with the leader can be achieved by the leader behaving in ways that earns the admiration, trust and respect of followers. This is called idealized influence. A leader engages in inspirational motivation when he behaves in ways that fosters an enthusiasm for and commitment to a shared vision of the future. The dimension of transformational leadership called intellectual stimulation, involves behaving in ways that challenge followers to be innovative and creative by questioning assumptions and considering old situations in new ways. Finally, individualized consideration involves the leader behaving in ways that help employees achieve their full potential through coaching, development, and mentoring.
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20. How Important is Leadership?
Transformational leadership affects the job performance of the employees who report to the leader.
Employees with transformational leaders tend to have higher levels of task performance and engage in higher levels of citizenship behaviors.
Employees have higher levels of motivation and trust their leader more.
Employees with transformational leaders tend to be more committed to their organization.
Figure 10-8 shows how transformational leadership affects the job performance of the employees who report to the leader. Research has shown that employees with transformational leaders tend to have higher levels of task performance and engage in higher levels of citizenship behaviors. They also have higher levels of motivation and seem to trust their leaders more. Finally, employees with transformational leader tend to be more committed to their organizations.
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21. Substitutes for Leadership
Substitutes for leadership model suggests that certain characteristics of the situation can constrain the influence of the leader, making it more difficult for the leader to influence employee performance.
Substitutes reduce the importance of the leader while simultaneously providing a direct benefit to employee performance.
Neutralizers only reduce the importance of the leader—they themselves have no beneficial impact on performance.
The substitutes for leadership model offers a number of prescriptions for a better understanding of leadership in organizations. It can be used to explain why a leader who seemingly does the right things, doesn't seem to be making any difference. It can also be used to explain what to do if an ineffective person is in a leadership role with no immediate replacement waiting in the wings.
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