LEADERSHIP AND DECISION-MAKING 9 LEADERSHIP AND DECISION-MAKING © 2007 Prentice Hall, Inc. All rights reserved.

After reading this chapter, you should be able to: L E A R N I N G O B J E C T I V E S After reading this chapter, you should be able to: Define leadership and distinguish it from management. Summarize early approaches to the study of leadership. Discuss the concept of situational approaches to leadership. Describe transformational and charismatic perspectives on leadership. Identify and discuss leadership substitutes and neutralizers. © 2007 Prentice Hall, Inc. All rights reserved.

L E A R N I N G O B J E C T I V E S (cont’d) After reading this chapter, you should be able to: Discuss leaders as coaches and examine gender and cross-cultural issues in leadership. Describe strategic leadership, ethical leadership, and virtual leadership. Relate leadership to decision making and discuss both rational and behavioral perspectives on decision making © 2007 Prentice Hall, Inc. All rights reserved.

What’s in It for Me? Why does understanding leadership matter to you? By mastering the material in this chapter, you’ll benefit in two ways: You’ll better understand how you can more effectively function as a leader You’ll have more insight into how your manager or boss strives to motivate you through his or her own leadership © 2007 Prentice Hall, Inc. All rights reserved.

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. © 2007 Prentice Hall, Inc. All rights reserved.

TABLE 9.1 Kotter’s Distinctions Between Management and Leadership 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, 1990. Copyright 1990 by John P. Kotter, Inc. © 2007 Prentice Hall, Inc. All rights reserved.

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 © 2007 Prentice Hall, Inc. All rights reserved.

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 © 2007 Prentice Hall, Inc. All rights reserved.

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 © 2007 Prentice Hall, Inc. All rights reserved.

FIGURE 9.1 The Leadership Continuum 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. © 2007 Prentice Hall, Inc. All rights reserved.

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) © 2007 Prentice Hall, Inc. All rights reserved.

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 © 2007 Prentice Hall, Inc. All rights reserved.

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 © 2007 Prentice Hall, Inc. All rights reserved.

TABLE 9.2 Leadership Substitutes and Neutralizers Individual Factors Individual professionalism Individual ability, knowledge, and motivation Individual experience and training Indifference to rewards Job Factors Structured/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 © 2007 Prentice Hall, Inc. All rights reserved.

The Changing Nature of Leadership Leader as Coaches 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 © 2007 Prentice Hall, Inc. All rights reserved.

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 © 2007 Prentice Hall, Inc. All rights reserved.

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 © 2007 Prentice Hall, Inc. All rights reserved.

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 © 2007 Prentice Hall, Inc. All rights reserved.

K E Y T E R M S behavioral approach to leadership charismatic leadership coalition decision making employee-focused leader behavior escalation of commitment ethical leadership intuition leadership leadership neutralizers leadership substitutes risk propensity situational approach to leadership strategic leadership task-focused leader behavior trait approach to leadership transactional leadership transformational leadership virtual leadership © 2007 Prentice Hall, Inc. All rights reserved.