1 Chapter One The Nature and Importance of Leadership © 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

2 Learning Objectives  Explain the meaning of leadership and how it differs from management.  Describe how leadership influences organizational performance.  Pinpoint several important leadership roles.  Identify the major satisfactions and frustrations associated with the leadership role.

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 3 Learning Objectives (cont’d)  Describe a framework for understanding leadership.  Recognize how leadership skills are developed.  Pinpoint several traits, behaviors, and attitudes of a successful follower.

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 4 The ability to inspire confidence and support among the people who are needed to achieve organizational goals Leadership

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 5 Leadership as Partnership  Leadership is a long-term relationship, or partnership, between leaders and group members.  The power between leader and group members is approximately balanced.

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 6 Leadership as Partnership (cont’d)  Factors necessary for a valid partnership to exist are: Exchange of purpose A right way to say no Joint accountability Absolute honesty

Table 1-1 Leaders versus Managers [INSERT TABLE 1-1]

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 8 Leadership Matters  The research shows that leadership is responsible for between 15-45% of a company’s performance; however, transactional leadership was not significantly related to performance charismatic leadership was slightly, positively related to performance in an uncertain environment, charismatic leadership was more strongly related to performance

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 9 Attribution Theory  Based on research, changes in leadership are followed by changes in company performance.  When change occurs, the perception is widely held that the cause is attributed to leadership  Most organizational successes are attributed to heroic leaders

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 10 Leadership Does Not Matter  Three major arguments against the importance of leadership include: 1. Substitutes exist for leadership 2. Leaders can be irrelevant; people lead themselves and outside influences can overwhelm 3. Organizational systems are far too complex to attribute success to leadership

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 11 Figure 1-1 Substitutes for Leadership

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 12 Leader Irrelevance  Situational factors, outside the leader’s control, have the largest impact on outcomes  High-level leaders have unilateral control over only a few resources, and the control over these resources is limited by obligations to stakeholders  Firms choose new leaders whose values and behaviors are similar to previous leaders

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 13 Complexity Theory  Organizations are complex systems that cannot be explained by the usual rules of nature  Leaders and managers can do little to alter the course of the complex organizational system  A company’s fate is determined by factors outside the leader/manager’s control

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 14 Leadership Roles An expected set of activities or behaviors stemming from one’s job  Figurehead  Spokesperson  Negotiator  Coach and motivator  Team builder  Team player  Technical problem solver  Entrepreneur  Strategic planner

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 15 Sources of Leader Satisfaction  A feeling of power and prestige  A chance to help others grow and develop  High income  Respect and status  Good opportunities for advancement  A feeling of “being in on” things  An opportunity to control resources

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 16 Leader Frustrations  Too much uncompensated overtime  Too many “headaches”  Facing a perform-or-perish mentality  Not enough authority to carry out plans  Loneliness  Too many problems involving people  Too much organizational politics  The pursuit of conflicting goals  Being perceived as unethical, especially if you are a corporate executive

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 17 Figure 1-2 A Framework for Understanding Leadership

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 18 Qualities of Effective Followers  Strong ability to self-manage  Commitment to something beyond themselves  Will take initiative to strengthen competencies and focus attention  Courageous and independent nature

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 19 Summary  Leadership is a long-term relationship between leaders and group members. When effective, it inspires confidence and support among people who are needed to achieve organizational goals  Although some research supports the theory leaders do affect organizational performance, the concepts of substitutes, leader irrelevance, and complexity theory suggest otherwise

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 20 Summary (cont’d)  Leadership involves carrying out at least nine different roles  There are many sources of both satisfaction and frustration to leaders  Leadership is a function of leader characteristics and traits, leader behavior and style, group member characteristics, and the internal and external environments  To be an effective leader, one needs good followers