1. Management, by Williams South-Western College Publishing Copyright © 2003 Chapter 17 Leadership

2. Management, by Williams South-Western College Publishing Copyright © 2003 2 What Would You Do? Leadership: Dealing with Tragedy 4Sandler O’Neill & Partners, L.P. is Investment banking firm located in World Trade Center on September 11 4Top leaders are lost in the tragedy 4Can new leadership help the firm survive this catastrophic event?

3. Management, by Williams South-Western College Publishing Copyright © 2003 3 After discussing this section, you should be able to: Learning Objectives What Is Leadership? 1.explain what leadership is 2.describe who leaders are and what effective leaders do

4. Management, by Williams South-Western College Publishing Copyright © 2003 4 Leadership Leaders versus Managers Substitutes for Leadership

5. Management, by Williams South-Western College Publishing Copyright © 2003 5 Managers versus Leaders Do things right Status quo Short-term Means Builders Problem solving Do the right thing Change Long-term Ends Architects Inspiring & motivating ManagersLeaders Adapted from Exhibit 17.1

6. Management, by Williams South-Western College Publishing Copyright © 2003 6 Substitutes for Leadership: Do Leaders Always Matter? 4Leadership substitutes Tsubordinate, task, or organizational characteristics that make leaders redundant or unnecessary âprofessional orientation, intrinsically satisfying work, cohesive work group, etc. 4Leadership neutralizers Tsubordinate, task, or organizational characteristics that interfere with a leader’s actions âsubordinate skills, abilities, unambiguous and routing tasks, intrinsically satisfying work, rewards not controlled by supervisor, etc. 4Leaders don’t always matter

7. Management, by Williams South-Western College Publishing Copyright © 2003 7 Leadership Substitutes & Neutralizers Adapted from Exhibit 17.2

8. Management, by Williams South-Western College Publishing Copyright © 2003 8 Who Leaders Are and What Leaders Do LeadershipBehavior LeadershipTraits

9. Management, by Williams South-Western College Publishing Copyright © 2003 9 Leadership Traits Desire to Lead Cognitive Ability Emotional Stability Drive Honesty/ Integrity Self- confidence Knowledge of the Business

10. Management, by Williams South-Western College Publishing Copyright © 2003 10 What Really Works? Dominance 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Probability of success 57% Probability of success 63% Extroversion 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Probability of success75% Traits & Perceptions of Leadership Effectiveness Intelligence

11. Management, by Williams South-Western College Publishing Copyright © 2003 11 What Really Works? (cont’d) Charisma & Perceived Leader Effectiveness 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Probability of success 89% Probability of success 90% Charisma & Leader Satisfaction 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Probability of success72% Charisma & Leadership Effectiveness Performance & Charisma

12. Management, by Williams South-Western College Publishing Copyright © 2003 12 Leadership Behaviors 4Initiating structure Tclarifies follower roles and duties Tjob-centered or concern for production 4Consideration Tcreating a supportive environment Temployee-centered or concern for people

13. Management, by Williams South-Western College Publishing Copyright © 2003 13 Blake/Mouton Leadership Grid 1,9 Country Club Management 9,9 Team Management 1,1 Impoverished Management 9,1 Authority- Compliance 5,5 Middle of the Road 123456789 1 2 3 4 5 6 7 8 9 Concern for Production Concern for People Adapted from Exhibit 17.4

14. Management, by Williams South-Western College Publishing Copyright © 2003 14 After discussing this section, you should be able to: Learning Objectives Situational Leadership 3.explain Fiedler’s contingency theory. 4.describe how path-goal theory works. 5.explain the normative decision theory

15. Management, by Williams South-Western College Publishing Copyright © 2003 15 Putting Leaders in the Right Situation: Fiedler’s Contingency Theory Leadership Style: Least Preferred Co-workerSituationalFavorableness Matching Leadership Styles to Situations

16. Management, by Williams South-Western College Publishing Copyright © 2003 16 Fiedler’s Contingency Theory GroupPerformance = SituationalFavorableness Leadership Style Adapted from Exhibit 17.5

17. Management, by Williams South-Western College Publishing Copyright © 2003 17 Leadership Style: Least Preferred Co-Worker 4Leadership style is the way a leader generally behaves toward followers Tseen as stable and difficult to change 4Style is measured by the Least Preferred Co-worker scale (LPC) Trelationship-oriented Ttask-oriented

18. Management, by Williams South-Western College Publishing Copyright © 2003 18 Situational Favorableness 4How a particular situation affects a leader’s ability to lead 4Three factors TLeader-member relations TTask structure TPosition power

19. Management, by Williams South-Western College Publishing Copyright © 2003 19 Situational Favorableness Adapted From Exhibit 17.7

20. Management, by Williams South-Western College Publishing Copyright © 2003 20 Matching Leadership Styles to Situations Good Task- Oriented Leaders Poor Relationship- Oriented Leaders Adapted From Exhibit 17.8

21. Management, by Williams South-Western College Publishing Copyright © 2003 21 Adapting Leader Behavior: Path-Goal Theory Four Leadership Styles SubordinateandEnvironmentalContingencies

22. Management, by Williams South-Western College Publishing Copyright © 2003 22 Path-Goal Theory Leadership Styles Directive Supportive Participative Achievement-Oriented Adapted From Figure 17.10 Environmental Contingencies Task Structure Formal Authority System Primary Work Group Subordinate Contingencies Perceived Ability Locus of Control Experience Outcomes Subordinate Satisfaction Subordinate Performance

23. Management, by Williams South-Western College Publishing Copyright © 2003 23 Leadership Styles 4Directive Tclarifying expectations and guidelines 4Supportive Tbeing friendly and approachable 4Participative Tallowing input on decisions 4Achievement-Oriented Tsetting challenging goals

24. Management, by Williams South-Western College Publishing Copyright © 2003 24 Subordinate & Environmental Contingencies Subordinate 4Perceived ability 4Locus of control 4Experience Environmental 4Task structure 4Formal authority system 4Primary work group

25. Management, by Williams South-Western College Publishing Copyright © 2003 25 When to Use Each of the Four Leadership Styles Adapted from Exhibit 17.11

26. Management, by Williams South-Western College Publishing Copyright © 2003 26 Adapting Leader Behavior: Normative Decision Theory DecisionStyles Decision Quality and Acceptance

27. Management, by Williams South-Western College Publishing Copyright © 2003 Style Explanation Style Explanation AI - AutocraticSolve the problem yourself using the information you have. AII - Less autocraticObtain the needed information from workers; then solve the problem yourself. Workers provide information but not alternatives. C1- ConsultativeShare the problem with workers individually (but not as a group), seeking suggestions & possible alternatives. Solve the problem yourself. CII - More consultativeShare the problem with workers as a group, seeking suggestions & possible alternatives. Solve yourself. GII - Group decisionShare the problem with workers as a group, seeking suggestions & possible alternatives. Attempt to reach a consensus & be willing to accept & implement the workers’ solution. Decision Styles Adapted from Exhibit 17.12

28. Management, by Williams South-Western College Publishing Copyright © 2003 28 Decision Quality and Acceptance 4Using the right amount of employee participation: T improves decision quality Timproves acceptance 4Decision tree helps leader identify optimal level of participation

29. Management, by Williams South-Western College Publishing Copyright © 2003 29 Decision Rules to Increase Decision Quality 4Quality Rule TIf the quality of the decision is important, then don't use an autocratic decision style 4Leader Information Rule TIf the quality of the decision is important, and if the leader doesn't have enough information to make the decision on his or her own, then don't use an autocratic decision style 4Subordinate Information Rule TIf the quality of the decision is important, and if the subordinates don't have enough information to make the decision themselves, then don't use a group decision style

30. Management, by Williams South-Western College Publishing Copyright © 2003 30 Decision Rules to Increase Decision Quality (cont’d) 4Goal Congruence Rule TIf the quality of the decision is important, and subordinates' goals are different from the organization's goals, then don't use a group decision style 4Problem Structure Rule TIf the quality of the decision is important, the leader doesn't have enough information to make the decision on his or her own, and the problem is unstructured, then don't use an autocratic decision style

31. Management, by Williams South-Western College Publishing Copyright © 2003 31 Decision Rules to Increase Decision Acceptance 4Commitment Probability Rule TIf having subordinates accept and commit to the decision is important, then don't use an autocratic decision style 4Subordinate Conflict Rule TIf having subordinates accept the decision is important and critical to successful implementation and subordinates are likely to disagree or end up in conflict over the decision, then don't use an autocratic or consultative decision style

32. Management, by Williams South-Western College Publishing Copyright © 2003 32 Decision Rules to Increase Decision Acceptance (cont’d) 4Commitment Requirement Rule TIf having subordinates accept the decision is absolutely required for successful implementation and subordinates share the organization's goals, then don't use an autocratic or consultative style

33. Management, by Williams South-Western College Publishing Copyright © 2003 33 After discussing this section, you should be able to: Learning Objectives Strategic Leadership 6.explain how visionary leadership (i.e. charismatic and transformational leadership) helps leaders achieve strategic leadership.

34. Management, by Williams South-Western College Publishing Copyright © 2003 34 Visionary Leadership CharismaticLeadership TransformationalLeadership

35. Management, by Williams South-Western College Publishing Copyright © 2003 35 Charismatic Leadership 4Creates an exceptionally strong relationship between leader and follower 4Lead by: Tarticulating a clear vision, based on values Trole modeling values Tcommunicating high performance expectations Tdisplaying confidence in followers

36. Management, by Williams South-Western College Publishing Copyright © 2003 36 Been There, Done That 4Content employees produce happy customers 4Keeps offices at 50 people 4Encourages and rewards risk taking and creativity Richard Branson: Charisma without Hot Air

37. Management, by Williams South-Western College Publishing Copyright © 2003 37 Types of Charismatic Leaders 4Ethical Charismatics Tprovide developmental opportunities Topen to positive and negative feedback Trecognize others’ contributions Tshare information Tconcerned with the interests of the group 4Unethical Charismatics Tcontrol and manipulate followers Tonly want positive feedback Tmotivated by self-interest

38. Management, by Williams South-Western College Publishing Copyright © 2003 38 Ethical and Unethical Charismatics Exercising Power Power is used to serve others Creating the vision Followers help develop the vision Communicating with followers Two-way communication Accepting feedbackOpen to feedback Want followers to think and to questions the status quo Stimulating followers Developing followersFocus on developing followers Living by moral standards Three virtues: courage, sense of fairness, integrity Charismatic Leader Behaviors Ethical Charismatics

39. Management, by Williams South-Western College Publishing Copyright © 2003 39 Ethical and Unethical Charismatics Exercising Power Power is used to dominate others Creating the vision Vision comes solely from the leader Communicating with followers One-way communication, not open to input from others Accepting feedbackPrefer yes-men, punish candid feedback Don’t want followers to think, prefer uncritical acceptance of own ideas Stimulating followers Developing followersInsensitive to followers’ needs Living by moral standards Follow standards only if they satisfy immediate self interests Charismatic Leader Behaviors Unethical Charismatics

40. Management, by Williams South-Western College Publishing Copyright © 2003 40 Transformational Leadership 4Generates awareness and acceptance of group’s purpose and mission 4Gets employees to see beyond their own needs and self-interest 4Goes beyond charismatic leadership 4Different than transactional leadership

41. Management, by Williams South-Western College Publishing Copyright © 2003 41 Transformational Leadership Components 4Charismatic leadership/idealized influence 4Inspirational motivation 4Intellectual stimulation 4Individualized consideration

42. Management, by Williams South-Western College Publishing Copyright © 2003 42 What Really Happened? Leadership: Dealing with Tragedy 4Deceased employees’ families Tgiven pay check for the rest of the year Tinsurance coverage for five years 4Jimmy Dunne became manager and provided leadership that led to strong financial recovery Tdeveloped new skills in negoti- ation, calmness, patience, sup- port, while maintaining strong business focus