Leadership in Organisational Settings McShane-Olekalns-Travaglione OB Pacific Rim 3e © 2010 The McGraw-Hill Companies, Inc. All rights reserved 1

New Zealand Post CEO John Allen New Zealand Post CEO John Allen is described as an effective leader. He energetically supports and communicates an appealing ‘customer- centric’ vision of the company’s future and anchors his decisions and actions around a set of core values aligned with the company. McShane-Olekalns-Travaglione OB Pacific Rim 3e 2 © 2010 The McGraw-Hill Companies, Inc. All rights reserved

Leadership Defined Leadership is the ability to influence, motivate, and enable others to contribute toward the effectiveness of the organisations of which they are members. McShane-Olekalns-Travaglione OB Pacific Rim 3e 3 © 2010 The McGraw-Hill Companies, Inc. All rights reserved

Shared Leadership The view that leadership is broadly distributed rather than assigned to one person. Employees are leaders when they champion change in the company or team. Shared leadership calls for:  Formal leaders willing to delegate power  Collaborative culture – employees support each other  Employee ability to influence through persuasion McShane-Olekalns-Travaglione OB Pacific Rim 3e © 2010 The McGraw-Hill Companies, Inc. All rights reserved 4

Leadershipperspectives Competency perspective Contingency perspective Implicit leadership perspective Transformational perspective Perspectives of Leadership McShane-Olekalns-Travaglione OB Pacific Rim 3e © 2010 The McGraw-Hill Companies, Inc. All rights reserved 5 Behavioural perspective

Competency Perspective  Competencies – personal characteristics that lead to superior performance in a leadership role (eg. skills, knowledge, values)  Early research – very few ‘traits’ predicted effective leadership  Emerging view – several competencies now identified as key influences on leadership potential and of effective leaders McShane-Olekalns-Travaglione OB Pacific Rim 3e © 2010 The McGraw-Hill Companies, Inc. All rights reserved 6

Self-concept Drive Positive self-evaluation High self-esteem and self-efficacy Internal locus of control Inner motivation to pursue goals Inquisitiveness, action-oriented Integrity Truthfulness Consistency in words and actions Personality Extroversion, conscientiousness (and other traits) Eight Leadership Competencies McShane-Olekalns-Travaglione OB Pacific Rim 3e © 2010 The McGraw-Hill Companies, Inc. All rights reserved 7 more

Cognitive/ practical intelligence Above average cognitive ability Able to solve real-world problems Knowledge of the business Understand external environment Aid intuitive decision making Eight Leadership Competencies (cont.) McShane-Olekalns-Travaglione OB Pacific Rim 3e © 2010 The McGraw-Hill Companies, Inc. All rights reserved 8 Leadership motivation High need for socialised power to achieve organisational goals Emotional intelligence Perceiving, assimilating, understanding, and regulating emotions

Competency Perspective Limitations 1. Implies a universal approach 2. Alternative combinations of competencies might work just as well 3. Assumes leadership is within the person But leadership is also about relations with followers 4. Competencies refer to leadership potential, not performance McShane-Olekalns-Travaglione OB Pacific Rim 3e © 2010 The McGraw-Hill Companies, Inc. All rights reserved 9

Leader Behaviour Perspective  People-oriented behaviours Showing mutual trust and respect Concern for employee needs Looks out for employee wellbeing  Task-oriented behaviours Assign specific tasks Ensure employees follow rules Set ‘stretch goals’ to achieve performance capacity McShane-Olekalns-Travaglione OB Pacific Rim 3e © 2010 The McGraw-Hill Companies, Inc. All rights reserved 10

Leader Behaviour Perspective Limitations  People-task categories mask subcategories of leader behaviour that may be distinct  Assumes best leaders display a high level of both people and task styles But best style seems to depend on the situation McShane-Olekalns-Travaglione OB Pacific Rim 3e © 2010 The McGraw-Hill Companies, Inc. All rights reserved 11

Striving to Become the Starbucks of Sushi Award-winning Singaporean entrepreneur Douglas Foo demonstrates plenty of achievement-oriented leadership by challenging staff to make Sakae Sushi the Starbucks of sushi. He also demonstrates supportive leadership by promoting family values and treating employees with respect. McShane-Olekalns-Travaglione OB Pacific Rim 3e © 2010 The McGraw-Hill Companies, Inc. All rights reserved 12 Douglas Foo

Path-Goal Leadership  Originated with expectancy theory of motivation Paths = employee expectancies Goals = employee performance  States that effective leaders ensure that employees who perform their jobs well receive more valued rewards than those who perform poorly McShane-Olekalns-Travaglione OB Pacific Rim 3e © 2010 The McGraw-Hill Companies, Inc. All rights reserved 13 Douglas Foo

Path-Goal Leadership Styles  Directive Provide psychological structure to jobs Task-oriented behaviours  Supportive Provide psychological support People-oriented behaviours  Participative Encourage/facilitate employee involvement  Achievement-oriented Encourage peak performance through goal setting and positive self-fulfilling prophecy McShane-Olekalns-Travaglione OB Pacific Rim 3e © 2010 The McGraw-Hill Companies, Inc. All rights reserved 14

Path-Goal Leadership Model McShane-Olekalns-Travaglione OB Pacific Rim 3e © 2010 The McGraw-Hill Companies, Inc. All rights reserved 15 EmployeecontingenciesEmployeecontingencies EnvironmentalcontingenciesEnvironmentalcontingencies Leader behaviours Directive Supportive Participative Achievement- oriented Directive Supportive Participative Achievement- oriented Leader effectiveness Employee motivation Employee satisfaction Acceptance of leader Employee motivation Employee satisfaction Acceptance of leader

DirectiveSupportiveParticipativeAchievement Employee Contingencies Path-Goal Contingencies McShane-Olekalns-Travaglione OB Pacific Rim 3e © 2010 The McGraw-Hill Companies, Inc. All rights reserved 16  Skill/experience lowlowhighhigh  Locus of control externalexternalinternalinternal Task structure nonroutineroutinenonroutine? Team dynamics –ve norms low cohesion+ve norms? Environmental Contingencies DirectiveSupportiveParticipativeAchievement

Other Contingency Leader Theories  Situational Leadership Model Effective leaders vary style with follower ‘readiness’ Leader styles – telling, selling, participating, and delegating Popular model, but lacks research support  Fiedler’s Contingency Model Leadership style is stable – based on personality Best style depends on situational control Theory has problems, but uniquely points out inflexibility of leadership style McShane-Olekalns-Travaglione OB Pacific Rim 3e © 2010 The McGraw-Hill Companies, Inc. All rights reserved 17

Leadership Substitutes  Contingencies that limit a leader’s influence or make a particular leadership style unnecessary eg. training and experience replace task-oriented leadership  Research evidence: substitutes help, but don’t completely substitute for real leadership McShane-Olekalns-Travaglione OB Pacific Rim 3e © 2010 The McGraw-Hill Companies, Inc. All rights reserved 18

Transformational Leadership at P&G A. G. Lafley, CEO of Procter & Gamble, practises transformational leadership without using charisma. By forming and communicating a clear vision and modelling that vision, he has transformed the consumer goods company. McShane-Olekalns-Travaglione OB Pacific Rim 3e © 2010 The McGraw-Hill Companies, Inc. All rights reserved 19 A. G. Lafley

Transformational vs. Transactional Leaders  Transformational leaders Leading – changing the organisation to fit the environment Change agents  Transactional leaders Confusing definitions, but originally about seeking employee compliance through rewards, punishment, and negotiation  Managing – achieving current objectives more efficiently Link job performance to rewards Provide staff with necessary resources Relates to contingency leadership theories (eg. path-goal) McShane-Olekalns-Travaglione OB Pacific Rim 3e © 2010 The McGraw-Hill Companies, Inc. All rights reserved 20 A. G. Lafley

Transformational v. Charismatic Leaders  Some leadership models say charismatic leadership is essential for transformational leadership  Emerging view – charisma differs from transformational leadership  Charisma is a personal trait that provides referent power Doesn’t necessarily attempt to change the organisation  Transformational leadership is a set of behaviours to bring about change McShane-Olekalns-Travaglione OB Pacific Rim 3e © 2010 The McGraw-Hill Companies, Inc. All rights reserved 21 A. G. Lafley

Transformational Leadership Model McShane-Olekalns-Travaglione OB Pacific Rim 3e © 2010 The McGraw-Hill Companies, Inc. All rights reserved 22 Develop a strategic vision Communicate the vision Model the vision Build commitment to the vision Elements of transformational leadership

Transformational Leadership Elements  Create a strategic vision Image of company’s attractive future Motivates and bonds employees Leader champions the vision  Communicate the vision Frame message around a grand purpose Shared mental model of the future Use symbols, metaphors, stories McShane-Olekalns-Travaglione OB Pacific Rim 3e © 2010 The McGraw-Hill Companies, Inc. All rights reserved 23 Develop a strategic vision Communicate the vision Elements of transformational leadership

Transformational Leadership Elements (cont.)  Model the vision Walk the talk Symbolise/demonstrate the vision through behaviour Employees trust leader more  Build commitment to the vision Increased through communicating and modelling the vision Increased through employee involvement in shaping the shared vision McShane-Olekalns-Travaglione OB Pacific Rim 3e © 2010 The McGraw-Hill Companies, Inc. All rights reserved 24 Develop a strategic vision Communicate the vision Model the vision Build commitment to the vision Elements of transformational leadership

Evaluating Transformational Leadership  Transformational leadership is important Higher employee satisfaction, performance, organisational citizenship, creativity  Transformational leadership limitations Some models have circular logic - Defines transformational leaders by their success rather than their behaviour (result: no predictive value) Universal theory - Need a contingency-oriented theory - Recognise differences across cultures McShane-Olekalns-Travaglione OB Pacific Rim 3e © 2010 The McGraw-Hill Companies, Inc. All rights reserved 25

Implicit Leadership Perspective Follower perceptions of characteristics of effective leaders: 1. Leadership prototypes Preconceived image of effective leader, used to evaluate leader effectiveness 2. Romance of leadership effect Amplify effect of leaders on organisational results Fundamental attribution error Need for situational control McShane-Olekalns-Travaglione OB Pacific Rim 3e © 2010 The McGraw-Hill Companies, Inc. All rights reserved 26

Cultural Issues in Leadership  Societal cultural values and practices affect leaders Shape leaders’ values/norms Influence decisions and actions Shape follower prototype of effective leaders  Some leadership styles are universal, others differ across cultures ‘Charismatic visionary’ seems to be universal Participative leadership works better in some cultures than others McShane-Olekalns-Travaglione OB Pacific Rim 3e © 2010 The McGraw-Hill Companies, Inc. All rights reserved 27

Gender Issues in Leadership  Male and female leaders have similar task- and people-oriented leadership  Participative leadership style is used more often by female leaders  Evaluating female leaders Still receive negative evaluations as leaders due to prototypes and gender stereotypes But evidence that they are good at emerging leadership styles (coaching, teamwork) McShane-Olekalns-Travaglione OB Pacific Rim 3e © 2010 The McGraw-Hill Companies, Inc. All rights reserved 28

Leadership in Organisational Settings McShane-Olekalns-Travaglione OB Pacific Rim 3e © 2010 The McGraw-Hill Companies, Inc. All rights reserved 29