McGraw-Hill/Irwin© 2008 The McGraw-Hill Companies, Inc. All rights reserved. 14 Leadership in Organizational Settings

McShane/Von Glinow OB4e© 2008 The McGraw-Hill Companies, Inc. All rights reserved. Slide 14-2 Leadership at Infosys “In essence, leadership is about dreaming the impossible and helping followers achieve the same,” says Nandan Nilekani, chief executive of Infosys, one of India’s largest and most successful information technology companies.

McShane/Von Glinow OB4e© 2008 The McGraw-Hill Companies, Inc. All rights reserved. Slide 14-3 What is Leadership? Leadership is the ability to influence, motivate, and enable others to contribute toward the effectiveness of the organizations of which they are members.

McShane/Von Glinow OB4e© 2008 The McGraw-Hill Companies, Inc. All rights reserved. Slide 14-4 Shared Leadership Leadership is not restricted to people in formal management positions. Anyone in the organization may -- and should -- be a leader in various ways and at various times. Effective companies encourage employees to be leaders when needed (e.g. change champions)

McShane/Von Glinow OB4e© 2008 The McGraw-Hill Companies, Inc. All rights reserved. Slide 14-5 LeadershipPerspectives CompetencyPerspective BehavioralPerspective ContingencyPerspective Implicit Leadership Perspective TransformationalPerspective Perspectives of Leadership

McShane/Von Glinow OB4e© 2008 The McGraw-Hill Companies, Inc. All rights reserved. Slide 14-6 Integrity Drive Truthfulness Translates words into deeds Inner motivation to pursue goals Need for achievement, quest to learn Leadership Motivation High need for socialized power to accomplish team’s or firm’s goals Emotional Intelligence Perceiving, assimilating, understanding, and regulating emotions Seven Leadership Competencies more

McShane/Von Glinow OB4e© 2008 The McGraw-Hill Companies, Inc. All rights reserved. Slide 14-7 Intelligence Above average cognitive ability Can analyze problems/opportunities Knowledge of the Business Familiar with business environment Aids intuitive decision making Self-Confidence Strong belief in one’s ability to lead others Seven Leadership Competencies (con’t)

McShane/Von Glinow OB4e© 2008 The McGraw-Hill Companies, Inc. All rights reserved. Slide 14-8 In Search of Leader Integrity Likely the most important leadership competency Also called “authentic leadership” –Individual acts with sincerity –Has a higher moral capacity to judge dilemmas Most people think business leaders lack integrity: –73% say CEOs of large firms can’t be trusted (US) –Less than one-third of Asian workers are satisfied with their level of trust in management

McShane/Von Glinow OB4e© 2008 The McGraw-Hill Companies, Inc. All rights reserved. Slide 14-9 Competency Perspective Limitations Implies a universal approach Alternative combinations of competencies might work just as well Some traits are subjective Several competencies indicate leadership potential, not actual leadership

McShane/Von Glinow OB4e© 2008 The McGraw-Hill Companies, Inc. All rights reserved. Slide Leader Behavior Perspective What makes Bruce Draper (shown here) one of the best bosses in Great Britain? He provides plenty of supportive leadership, says employee Hannah Delany. “Bruce cares about his staff and never takes them for granted…He appears friendly, approachable and kind and makes sure everyone is content in their job.”

McShane/Von Glinow OB4e© 2008 The McGraw-Hill Companies, Inc. All rights reserved. Slide Leader Behavior Perspective People-oriented behaviors –Showing mutual trust and respect –Concern for employee needs –Looks out for employee well-being Task-oriented behaviors –Assign specific tasks –Ensure employees follow rules –Set “stretch goals” to achieve performance capacity

McShane/Von Glinow OB4e© 2008 The McGraw-Hill Companies, Inc. All rights reserved. Slide Path-Goal Leadership Styles Directive –Task-oriented behaviors Supportive –People-oriented behaviors Participative –Encouraging employee involvement Achievement-oriented –Using goal setting and positive self- fulfilling prophecy

McShane/Von Glinow OB4e© 2008 The McGraw-Hill Companies, Inc. All rights reserved. Slide Path-Goal Leadership Model EmployeeContingencies EnvironmentalContingencies LeaderBehaviors DirectiveDirective SupportiveSupportive ParticipativeParticipative Achievement- orientedAchievement- oriented LeaderEffectiveness Employee motivationEmployee motivation Employee satisfactionEmployee satisfaction Leader acceptanceLeader acceptance

McShane/Von Glinow OB4e© 2008 The McGraw-Hill Companies, Inc. All rights reserved. Slide DirectiveSupportiveParticipativeAchievementEmployeeContingencies Path-Goal Contingencies Skill/Experience lowlowhighhigh Locus of Control externalexternalinternalinternal Task Structure nonroutineroutinenonroutine? Team Dynamics –ve norms low cohesion+ve norms?EnvironmentalContingencies DirectiveSupportiveParticipativeAchievement

McShane/Von Glinow OB4e© 2008 The McGraw-Hill Companies, Inc. All rights reserved. Slide Other Contingency Leader Theories Situational Leadership Model (Hersey/Blanchard) –Effective leaders vary style with follower “readiness” –Leader styles – telling, selling, participating, and delegating –Theory 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 suggests that people have a preferred leadership style based on personality

McShane/Von Glinow OB4e© 2008 The McGraw-Hill Companies, Inc. All rights reserved. Slide Leadership Substitutes Contingencies that limit a leader’s influence or make a particular leadership style unnecessary. Examples: –Training and experience replace task-oriented leadership –Cohesive team replaces supportive leadership –Self-leadership replaces achievement-oriented leadership Research evidence: substitutes help, but don’t completely substitute for real leadership

McShane/Von Glinow OB4e© 2008 The McGraw-Hill Companies, Inc. All rights reserved. Slide Transformational Leadership at P&G Procter & Gamble CEO A. G. Lafley practices transformational leadership without using charisma. By forming and communicating a clear vision and modeling that vision, he has transformed the consumer goods company in recent years.

McShane/Von Glinow OB4e© 2008 The McGraw-Hill Companies, Inc. All rights reserved. Slide Transformational v. Transactional Leaders Transformational leaders –Leading -- changing the organization to fit environment –Change agents Transactional leaders –Managing -- linking job performance to rewards –Ensure employees have necessary resources –Apply contingency leadership

McShane/Von Glinow OB4e© 2008 The McGraw-Hill Companies, Inc. All rights reserved. Slide Transformational v. Charismatic Leaders Is charismatic leadership essential for transformational leadership? Some experts say yes, but emerging view is that: –Charisma is distinct from transformational leadership –A personal trait that might help transform, or might just help the leader –Charismatic leadership might have opposite effect -- creates dependence, not empowerment

McShane/Von Glinow OB4e© 2008 The McGraw-Hill Companies, Inc. All rights reserved. Slide TransformationalLeadership Communicating the Vision Modeling Creating a Strategic Vision BuildingCommitment Transformational Leadership Elements

McShane/Von Glinow OB4e© 2008 The McGraw-Hill Companies, Inc. All rights reserved. Slide Evaluating Transformational Leadership Transformational leadership is important –Higher employee satisfaction, performance, org citizenship, creativity Transformational leadership limitations –Circular logic -- leaders effective by definition –Universal theory Need a contingency-oriented theory Recognize differences across cultures

McShane/Von Glinow OB4e© 2008 The McGraw-Hill Companies, Inc. All rights reserved. Slide Implicit Leadership Perspective Attributing Leadership StereotypingLeadership Need for SituationalControl Implicit Leadership Perspective

McShane/Von Glinow OB4e© 2008 The McGraw-Hill Companies, Inc. All rights reserved. Slide Cultural Issues in Leadership Societal cultural values and practices affect leaders: –Shape leader’s values/norms –Influence decisions and actions 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/Von Glinow OB4e© 2008 The McGraw-Hill Companies, Inc. All rights reserved. Slide 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.

McShane/Von Glinow OB4e© 2008 The McGraw-Hill Companies, Inc. All rights reserved. Slide Evaluating Female Leaders Past evidence –Women rated less favorably than equivalent male leaders due to stereotyping Recent evidence –Women rated more favorably than men, particularly on emerging leadership styles (coaching, teamwork)

McGraw-Hill/Irwin© 2008 The McGraw-Hill Companies, Inc. All rights reserved. 14 Leadership in Organizational Settings