1. After studying this chapter, students should be able to:
Define leadership and explain its importance for organizations.
 Describe how leadership is changing in today’s organizations, including Level 5 leadership, servant leadership, and authentic leadership.
 Discuss how women’s style of leading is typically different from men’s.
 Identify personal characteristics associated with effective leaders.
 Define task-oriented behavior and people-oriented behavior and explain how these categories are used to evaluate and adapt leadership style.
 Describe Hersey and Blanchard’s situational theory and its application to subordinate participation.
 Discuss how leadership fits the organizational situation and how organizational characteristics can substitute for leadership behaviors.
 Describe transformational leadership and when it should be used.
Explain how followership is related to effective leadership.
 Identify sources of leader power and the tactics leaders use to influence others.
Chapter 15
Leadership

2. The Nature of Leadership
Many styles of leadership can be effective
People, influence, and goals
Reciprocal, occurring among people
A “people” activity, different than administration and problem-solving
Leadership is the ability to influence people toward the attainment of goals
Ideas about effective leadership change over time. A recent view of leadership called Level 5 Leadership says that the most successful leaders have two prominent qualities: humility and will.
THE NATURE OF LEADERSHIP
There is probably no topic more important to business success than leadership because it occurs among people, involves influence, and is used to attain goals. Influence means that the relationship among people is not passive. Influence is designed to achieve some end or goal.
Leadership is defined as the ability to influence people toward the attainment of goals. Leadership is reciprocal, occurring among people. It is dynamic and involves the use of power to get things done.
Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.

3. Contemporary Leadership
Responding to the turbulence and uncertainty of the environment, Leadership evolves as the needs of the organization, technology, economy, labor, ethics, and culture change.
Humility – being unpretentious and modest rather than arrogant and prideful
Four approaches for today’s turbulent times:
Level 5 Leadership
Servant Leadership
Authentic Leadership
Interactive Leadership (gender differences)
CONTEMPORARY LEADERSHIP
The turbulence and uncertainty of the environment in which most corporations are operating in today’s world have had a significant influence on leadership thinking and styles. Ethical and economic difficulties, corporate governance concerns, globalization, changes in technology, new ways of working, shifting employee expectations, and significant social transitions have contributed to a shift in how we think about and practice leadership. During the 1980s and 1990s, leadership became equated with larger-than-life personalities, strong egos, and personal ambitions. In contrast, the post-heroic leader’s major characteristic is humility. Humility means being unpretentious and modest rather than arrogant and prideful.

4. Level-Five Leadership
Level-five leadership refers to the highest level in a hierarchy of manager capabilities
Lack of ego (humility)
Often shy and unpretentious (self-effacing)
Fierce resolve (WILL) to do what is best for organization
Credit other people
Level 5 Leadership Exhibit 15.1
A key characteristic of Level 5 leaders is an almost complete lack of ego, coupled with a fierce resolve to do what is best for the organization. In contrast to the view of great leaders as larger-than-life personalities with strong egos and big ambitions, Level 5 leaders often seem shy and unpretentious. Although they accept full responsibility for mistakes, poor results, or failures, Level 5 leaders give credit for successes to other people.
Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.

5. Level-Five Hierarchy

6. Servant Leadership
Give away — power, ideas, information, recognition, and credit for accomplishment.
Bring the follower’s higher motives to the work and connect them to the organizational mission and goals.
Nonprofit organizations
Servant Leadership
Servant leaders operate on two levels: for the fulfillment of the subordinates’ goals and for the realization of the larger purpose or mission of their organization. Servant leaders give things away—power, ideas, information, recognition, and credit for accomplishment. Servant leaders bring the follower’s higher motives to the work and connect them to the organizational mission and goals. Servant leaders often work in the nonprofit world because it offers a natural way to apply their leadership drive and skills to serve others.

7. Authentic Leadership Know and understand themselves
Espouse and act consistently with higher-order ethical values
Empower and inspire others with their openness and authenticity
Authentic Leadership Exhibit 15.2
Authentic leadership refers to individuals who know and understand themselves, who espouse and act consistently with higher-order ethical values, and who empower and inspire others with their openness and authenticity.

8. 15.2 Components of Authentic Leadership
Authentic leaders pursue their purpose with passion. When leaders demonstrate a high level of passion and commitment to purpose, they inspire commitment from followers.
Authentic leaders practice solid values. People come to know what the leader stands for, which inspires trust.
Authentic leaders lead with their hearts as well as with their heads. They maintain compassion for others as well as the courage to make difficult decisions.
Authentic leaders establish connected relationships. They surround themselves with good people and work to help others grow and develop.
Authentic leaders demonstrate self-discipline. They avoid excessive or unethical risks that could harm others and the organization, and openly admit their mistakes.

9. Interactive Leadership
Derived from studies of female leaders (gender differences)
Consistent with Level 5 leadership
Consensual and collaborative
Influence derived from relationships
Gender Differences Exhibit 15.3
Some of the characteristics associated with Level 5 leaders and authentic leaders are also hallmarks of interactive leadership, which has been found to be associated with female leaders. Interactive leadership means that the leader favors a consensual and collaborative process, and influence derives from relationships rather than position power and formal authority.
Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.

10. Gender Differences in Leadership Behaviors
According to surveys,
women rate higher than men on motivating others,
fostering communication,
producing high-quality work, and
listening to others,
while men and women rate about equally on strategic planning and
analyzing issues.

11. From Management to Leadership
Good management is essential to organizations, but good managers must be leaders
Management promotes stability, order, and problem solving
Leadership motivates toward vision and change
Leadership cannot replace management, there should be a balance of both
Good management  Meet current commitments
Good leadership  Moves into the future.
FROM MANAGEMENT TO LEADERSHIP Exhibit 15.4
Management and leadership are both important to organizations. Effective managers must also be leaders because of distinctive qualities associated with each that provide different strengths for the organization. Management and leadership reflect two different sets of qualities and skills that frequently overlap within a single individual. A person may have more of one set of qualities than the other, but ideally a manager develops a balance of both manager and leader qualities.
A primary distinction between management and leadership is that management promotes stability, order, and problem solving within the existing organizational structures and systems. Leadership promotes vision, creativity, and change. It means questioning the status quo so that outdated, unproductive, or socially irresponsible norms can be replaced.
Leadership cannot replace management. Good management helps the organization meet current commitments, while good leadership moves the organization into the future.

12. 15.4 Leader and Manager Qualities

13. Leadership Traits Traits: Distinguishing personal characteristics
Early research: Trait ↔ Leadership (Strong), Great Man Approach to leadership
Recent research: Trait ↔ Leadership (Weak), Combine trait research with other leadership ideas
Effective leaders possess varied traits and combine these with their strengths
Early efforts to understand leadership focused on the leader’s personal characteristics or traits. Traits are the distinguishing personal characteristics of a leader such as intelligence, values, self-confidence, and appearance.
Generally, research found only a weak relationship between personal traits and leader success. Physical, social, and work-related characteristics of leaders have also been studied. The appropriateness of a trait or set of traits depends on the leadership situation. The same traits do not apply to every organization or situation.
Rather than just understanding their traits, the best leaders recognize and hone their strengths. Strengths are natural talents and abilities that have been supported and reinforced with learned knowledge and skills and provide each individual with his or her best tools for accomplishment and satisfaction.
Discussion Question #2: Suggest some personal traits that you believe would be useful to a business leader today. Are these traits more valuable in some situations than in others? How do you think traits differ from strengths?

14. 15.5 Personal Characteristics of Leaders

15. Behavioral Approaches
Research beyond leadership traits
Defined two leadership behaviors:
Task-oriented behavior
People-oriented behavior
Foundation of important leadership studies
BEHAVIORAL APPROACHES
Task versus People
The inability to define effective leadership based solely on traits led to an interest in looking at the behavior of leaders and how it might contribute to leader success. Two basic leadership behaviors that have been identified as important for leadership are task-oriented behavior and people-oriented behavior.
Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.

16. Ohio State Studies aka OSU Model
Identified two major behaviors of leader:
Consideration; people oriented
Mindful of, sensitive to subordinates
Respects ideas and feelings of subordinates
Establishes mutual trust
Friendly; Open communication, Develop teamwork; Care for subordinates’ welfare
Initiating structure; task behavior
Task oriented
Directs work activities toward goals
Studies of leader behavior at The Ohio State University identified two major leadership behaviors called consideration and initiating structure.
Consideration is the extent to which the leader is sensitive to subordinates, respects their ideas and feelings, and establishes mutual trust. Considerate leaders are friendly, provide open communication, develop teamwork, and are oriented toward their subordinates’ welfare.
Initiating structure is the extent to which a leader is task oriented and directs subordinate activities towards goal attainment. Leaders with this style typically give instructions, spend time planning, emphasize deadlines, and provide schedules of work activities.

17. Michigan Studies, aka UM Model
Compared the behavior of effective and ineffective supervisors
Employee-centered leaders (most effective)
Establish high performance goals
Display supportive behavior
Job-centered leaders (not effective)
Less concerned with goal achievement/human needs
Focus on meeting schedules, cost-management, and efficiency
Studies at the University of Michigan compared the behavior of effective and ineffective supervisors.
Employee‑centered leaders were the effective leaders who established high performance goals and displayed supportive behavior toward subordinates.
Job‑centered leaders were ineffective and less concerned with goal achievement and human needs in favor of meeting schedules, keeping costs low, and achieving efficiency.

18. Texas Model - The Leadership Grid
The Leadership Grid Exhibit 15.6
Researchers at the University of Texas developed the Leadership Grid®, a two‑dimensional model that measures concern for people and for production. Each axis on the grid is a nine-point scale, with 1 meaning low concern and 9 meaning high concern.
Team management (9,9) is often considered the most effective style for all managers; organization members work together to accomplish task outcomes.
Country-club management (1,9) occurs when primary emphasis is given to people rather than to work outputs.
Authority-compliance management (9,1) occurs when efficiency in operations is the dominant orientation.
Middle-of-the-road management (5,5) reflects a moderate concern for both people and production.
Impoverished management (1,1) means the absence of a management philosophy; managers exert little effort toward interpersonal relationships or work accomplishment.

19. Contingency Approaches
How do situations influence leader effectiveness?
Hersey & Blanchard Model - Situational Model of Leadership
Fiedler Model - Leadership Model
Substitutes for leadership concept
Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.

20. Extension of behavioral theories Focus on characteristics of followers
Contingency Approaches: Situational Model aka Hersey and Blanchard Model
Describes the relationship between leadership styles and specific organizational situations.
Links the leader’s behavioral style with the task of readiness of subordinates.
Extension of behavioral theories
Focus on characteristics of followers
Seek appropriate leadership behavior
In short, leadership is based on relationship with followers and readiness level of followers
CONTINGENCY APPROACHES
The Situational Model of Leadership Exhibit 15.7
The situational model of leadership, which originated with Hersey and Blanchard, is a contingency approach to leadership. That is, it describes the relationship between leadership styles and specific organizational situations. A situational theory is a contingency approach to leadership that links the leader’s behavioral style with the task of readiness of subordinates.

21. The Situational Model of Leadership
The focus of this theory is that subordinates vary in their readiness level. People low in task readiness need a different leadership style than those with high readiness. People have low task readiness due to limited skills, lack of training, or insecurity. People with high task readiness tend to have ability, skills, confidence, and willingness to work. According to situational theory, a leader can adopt one of four leadership styles, based on relationship (concern for people) and task (concern for production) behavior. The four styles include:
Telling style—a high concern for tasks and a low concern for people and relationships.
Selling style—a high concern for both people and tasks
Participating style—a combination of high concern for people and relationships and low concern for production tasks.
Delegating style—a low concern for both relationships and tasks.
Followers may be at low, moderate, or high levels of readiness.
Low Readiness Level. A telling style is appropriate when followers are at a low readiness level because of poor ability and skills, little experience, insecurity, or unwillingness. The leader tells followers what to do, how to do it, and when to do it.
Moderate Readiness Level. A selling style works best with moderate levels of readiness when subordinates are unable but willing to follow. In this case, subordinates might lack some education and experience for the job. The selling style gives direction but includes seeking input from others and clarifying tasks.
Moderate Readiness Level. A participating style is effective with moderate levels of readiness when subordinates are able but unwilling to follow. These subordinates have the necessary education, experience, and skills. For these followers, the leader provides a general goal, delegates’ sufficient authority to do the task, and expects followers to complete the task as they see fit.
High Readiness Level. When followers have high levels of education, experience, and readiness to accept responsibility for their own task behavior, the delegating style is effective.
The contingency model is easier to understand than Fiedler’s model, but it incorporates only the characteristics of followers, not those of the situation.

22. Fiedler’s Contingency Theory
Leader’s style is task oriented or relationship oriented
Relatively fixed leadership style difficult to change
Goal is to match the leader’s style with organizational situation
Analyze the leader’s style to the favorability of the situation
Fiedler’s Contingency Theory Exhibit 15.8
The cornerstone of Fiedler’s contingency theory is the extent to which the leader’s style is relationship oriented or task oriented. A relationship‑oriented leader is concerned with people. A task‑oriented leader is primarily motivated by task accomplishment.

23. How Leader Style Fits the Situation
Situation: Favorable or Unfavorable?
The suitability of a person’s leadership style is determined by whether the situation is favorable or unfavorable. Since leadership styles are considered to be difficult to change, the basic idea is to match the leader’s style with the situation most favorable for his or her effectiveness. The favorability of a leadership situation can be analyzed in terms of three elements.
Leader‑member relations refers to the quality of relationships between the leader and followers.
Task structure refers to tasks performed by the group that are defined, involve specific procedures, and have clear goals.
Position power refers to the extent to which the leader has formal authority over subordinates.
Discussion Question #1: Do you think leadership style is fixed and unchangeable for a leader or flexible and adaptable? Discuss.

24. Substitutes for Leadership
There are situations where leader style is unimportant
There are situations and variables that can substitute or neutralize leadership characteristics
A substitute = a situation variable that makes a leadership style unnecessary; example - highly professional subordinates.
A neutralizer = a situational variable that prevents a leader from displaying certain behaviors.
Substitutes for Leadership Exhibit 15.9
The contingency leadership approaches considered so far have focused on the leader’s style, the subordinates’ nature, and the situation’s characteristics. The final contingency approach suggests that situational variables can be so powerful that they substitute for, or neutralize, the need for leadership.
A substitute is a situational variable that makes a leadership style redundant or unnecessary. Highly professional subordinates do not need a leader to tell them what to do.
A neutralizer is a situational variable that prevents a leader from displaying certain behaviors. Situational variables include characteristics of the subordinate, task, and the organization.

25. Substitutes and Neutralizers for Leadership
Leaders should adopt a style complementary to the organizational situation to ensure that both task needs and people needs of the work group are met.
Discussion Question #11: Consider the leadership position of a senior partner in a law firm. What task, subordinate, and organizational factors might serve as substitutes for leadership in this situation?

26. Charismatic and Visionary Leadership
Charismatic leaders are skilled in the art of visionary leadership
Vision is an attractive ideal future
Inspire and motivate people to do more
A lofty vision
Ability to understand and empathize
Empowering and trusting subordinates
Visionary leaders speak to the hearts of employees to be a part of something big
RQ: Can a woman become a charismatic leader?
CHARISMATIC AND TRANSFORMATIONAL LEADERSHIP
Research has found that some leadership approaches are more effective than others for bringing about change in organizations. Two types of leadership that can have a substantial impact are charismatic leadership and transformational leadership. These are best understood in comparison to transactional leadership.
Charismatic and Visionary Leadership
The charismatic leader has the ability to inspire and motivate people to do more than they would normally do, despite obstacles and personal sacrifice.
Charismatic leaders are often skilled in the art of visionary leadership. A vision is an attractive, ideal future that is credible yet not readily attainable. Charismatic leaders have a strong vision for the future, almost an obsession, and they can motivate others to help realize it.
RQ: Can a woman become a charismatic leader?
Vision
Inspire
Motivate
Firm (strong) will to strive for the vision (strategy, goals)

27. Transformational vs. Transactional Leadership
Clarify tasks
Initiate structure
Provide awards
Improve productivity
Hard working
Tolerant & fair-minded
Focus on management
Transformational
Innovative
Recognize follower needs
Inspire followers
Create a better future
Promote significant change
Transformational versus Transactional Leadership
Transformational leaders are distinguished by their special ability to bring about innovation and change. They recognize followers’ needs and concerns, help them look at old problems in new ways, and encourage them to question the status quo.
Transformational leaders create significant change in both followers and the organization. They have the ability to lead changes in the organization’s mission, structure, and human resource management. They focus on intangibles, such as vision, shared values, and ideas to build relationships, give larger meaning to activities, and enlist followers in change.
A recent study confirmed that transformational leadership has a positive impact on follower development and follower performance. Transformational leadership skills can be learned and are not ingrained personality characteristics.
Transactional leaders clarify subordinates’ role and task requirements, initiate structure, provide appropriate rewards, and try to meet the social needs of subordinates. Transactional leaders excel at management functions, are hardworking, tolerant, and fair-minded. They stress the impersonal aspects of performance, such as plans, schedules, and budgets.
Discussion Question #7: What is transformational leadership? Give examples of organizational situations that would call for transformational, transactional, or charismatic leadership.
Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.

28. Followership Organization does not exist without followers
A leader must understand followers
2 Dimensions
Independent & Critical Thinker vs. Dependent, uncritical Thinker
Active Follower vs. Passive Follower
FOLLOWERSHIP Exhibit 15.10
Many of the qualities that define a good leader are the same qualities as those possessed by a good follower. One model of followership involves five follower styles, categorized according to two dimensions.
The first dimension is the quality of independent, critical thinking versus dependent, uncritical thinking.
Independent critical thinkers are mindful of the effects of their own and others’ behavior on achieving organizational goals. They can weigh the impact of their boss’s and their own decisions and offer constructive criticism, creativity, and innovation.
A dependent, uncritical thinker does not consider possibilities beyond what he or she is told, does not contribute to the cultivation of the organization, and accepts the supervisor’s ideas without thinking.
The second dimension is active versus passive behavior.
An active follower participates fully in the organization, engages in behavior that is beyond the limits of the job, demonstrates a sense of ownership, and initiates problem solving and decision making.
A passive follower is characterized by a need for constant supervision and prodding by supervisors.

29. 15.10 Styles of Followership
The combinations of critical thinker/uncritical thinker and active/passive behavior result in five types of followers.
The alienated follower is a passive but independent, critical thinker. Alienated employees are often effective followers who have experienced setbacks and obstacles, perhaps promises broken by their superiors.
The conformist participates actively in a relationship with the boss but doesn’t use critical thinking skills. A conformist typically carries out any and all orders regardless of the nature of the request.
The pragmatic survivor has qualities of all four extremes – depending on which style fits with the prevalent situation. This type of person uses whatever style best benefits his or her own position and minimizes risk.
The passive follower exhibits neither critical, independent thinking nor active participation. Being passive and uncritical, these people show neither initiative nor a sense of responsibility.
The effective follower is both a critical, independent thinker and active in the organization. Effective followers behave the same toward everyone, regardless of their position in the organization.

30. Both leaders and followers use power to get things done
Power and Influence
Position Power
Legitimate Power
Reward Power
Coercive Power
Personal Power
Expert Power
Referent Power
Other Sources of Power
Personal Effort
Network of Relationships
Information
Both leaders and followers use power to get things done
POWER AND INFLUENCE
Power is the potential ability to influence the behavior of others. Influence is the effect of a person’s actions on the attitudes, values, beliefs, or behavior of others. Power is the capacity to cause a change in a person, influence may be thought of as the degree of actual change. Power results from an interaction of leader and followers.
Sometimes power comes from a person’s position in the organization, while other sources of power are based on personal characteristics. Within organizations, there are typically five sources of power: legitimate, reward, coercive, expert, and referent.
Position Power
The traditional manager’s power comes from the organization. The manager’s position gives him or her power to reward or punish subordinates to influence behavior. Examples of position power include:
Legitimate power comes from a formal management position in an organization and the authority granted to it. Subordinates accept this source of power as legitimate, which is why they comply.
Reward power stems from the manager’s authority to bestow rewards on other people. Legitimate power and reward power are most likely to generate compliance.
Coercive power is the opposite of reward power. Here, the manager has the authority to punish or recommend punishment, which often generates resistance. Resistance means workers tend to try to avoid carrying out instructions or will attempt to disobey them.
Personal Power
Personal power often comes from internal sources, such as a person’s special knowledge or personality. Examples of personal power include:
Expert power results from a leader’s special knowledge or skill regarding the tasks performed by followers.
Referent power comes from leader personality characteristics that command subordinates’ identification, respect, and admiration so they wish to emulate the leader. Subordinate response will be commitment, which means subordinates will enthusiastically carry out instructions. Leaders can increase their referent power when they share power and authority with employees. A significant trend is to empower lower employees.
Discussion Question #5: Suggest the sources of power that would be available to the leader of a student government organization. What sources of power may not be available? To be effective, should student leaders keep power to themselves or delegate power to other students?
Other Sources of Power
Personal effort results in gaining power when people show initiative, work beyond what is expected of them, take on undesirable but important projects, and show interest in learning about the organization and industry.
People who are enmeshed in a network of relationships have greater power.
Information is a primary business resource, and people who have access to information and control over how and to whom it is distributed are typically powerful.

31. 7 Interpersonal Influence Tactics for Leaders
Leaders often use a combination of influence strategies, and people who are perceived as having greater power and influence typically are those who use a wider variety of tactics. There are seven principles for asserting influence.
Use rational persuasion. Use facts, data, and logical argument to persuade others.
Make people like you. People would rather say yes to someone they like than to someone they don’t like.
Rely on the rule of reciprocity. Take advantage of the exchange of benefits and favors.
Develop allies. Develop networks of allies—people who can help you accomplish your goals.
Ask for what you want. Make a direct and personal request.
Make use of higher authority
. Gain the support of people at higher levels to back you up.
Reward the behaviors you want. Use organizational rewards and punishments to influence others’ behavior.

32. Review Questions
Define leadership and explain its importance for organizations.
 Describe how leadership is changing in today’s organizations, including Level 5 leadership, servant leadership, and authentic leadership.
 Discuss how women’s style of leading is typically different from men’s.
 Identify personal characteristics associated with effective leaders.
 Define task-oriented behavior and people-oriented behavior and explain how these categories are used to evaluate and adapt leadership style.
 Describe Hersey and Blanchard’s situational theory and its application to subordinate participation.
 Discuss how leadership fits the organizational situation and how organizational characteristics can substitute for leadership behaviors.
 Describe transformational leadership and when it should be used.
Explain how followership is related to effective leadership.
What are 5 components of authentic leadership?
Describe a substitute as a situation variable.
Describe a neutralizer as a situation variable.
Identify the influence that charismatic leader makes.
Identify sources of leader power.
Identify the tactics leaders use to influence others.
Describe 5 styles of followership.
Among 5 styles of followership, which style is the most harmful to the organization? Explain why.
Explain how a woman with a calm voice can become a charismatic leader.
What are 5 components of authentic leadership.
Describe a substitute as a situation variable.
Identify sources of leader power.
Identify the influence that charismatic leader makes.
Describe a neutralizer as a situation variable.
Describe 5 styles of followership.
Identify the tactics leaders use to influence others.