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Instructor’s Manual

The Art and Science of Leadership


Seventh Edition

Afasaneh Nahavandi

Copyright © 2015 Pearson Education, Inc. 1


TABLE OF CONTENTS

SECTION ONE

_______________________________________________________________________Page
INTRODUCTION, COURSE OUTLINES 3

SUMMARY OF EXERCISES AND 10


SUGGESTED ASSIGNMENTS

SECTION TWO
_____________________________________________________________________________
CHAPTER MATERIALS 17

PART ONE
______________________________________________________________________________
BUILDING BLOCKS
Chapters 1 through 5 present the building blocks and foundational theories 18
of leadership.

CHAPTER 1
DEFINITION AND SIGNIFICANCE OF LEADERSHIP 19

CHAPTER 2
THE GLOBAL AND CULTURAL CONTEXTS 32

CHAPTER 3
THE FOUNDATIONS OF MODERN LEADERSHIP 54

CHAPTER 4
INDIVIDUAL DIFFERENCES AND TRAITS 74

CHAPTER 5 85
POWER

PART II
CONTEMPORARY CONCEPTS
Chapters 6 and 7 present theories that currently dominate the field of leadership including charismatic,
transformational, and authentic leadership, and a consideration of upper-echelon and nonprofit
leadership

CHAPTER 6
Current Era in Leadership: Inspiration and Connection to Followers 99

CHAPTER 7
Other Leadership Perspectives: Upper Echelon and Nonprofit Leadership 113

Copyright © 2015 Pearson Education, Inc. 2


PART III

LEADING
Chapters 8, 9, and 10 focus on key aspects of leading people and organizations including leading teams
and change and developing leaders.

CHAPTER 8
LEADING TEAMS 130

CHAPTER 9
LEADING CHANGE 146

CHAPTER 10
DEVELOPING LEADERS 160

Copyright © 2015 Pearson Education, Inc. 3


Copyright © 2015 Pearson Education, Inc. 4
INTRODUCTION
______________________________________________________________________________

The topic of leadership is challenging and stimulating for students and faculty. Whether the course is
offered as part of an undergraduate curriculum, as a graduate business elective, in an educational
leadership program, or in a public administration program, it is always popular. The newfound interest
in the topic, which has led to the publication of many widely available popular books, is further bringing
students back to leadership classrooms. It is easy for them to get frustrated and disappointed, however.
Leadership may appear easy to define and interesting to write about, but it is difficult to teach. It is a
field that contains many well-developed theories, is replete with empirical challenges, and continues to
be highly divided.
The goal of the “Art and Science of Leadership” is to move beyond the differences and the
divisions and to provide students with a theory- and research-based, integrative, hands-on, and practical
view of leadership. The seventh edition of the book builds on the strengths of the first six editions and
introduces some new emphasis and many updated theories, examples, and cases. The many debates and
controversies within the field of leadership are presented in this edition as they were in the previous
ones. As in previous editions, I continue to emphasize integration of the concepts and distilling useful
and practical concepts from each theory while taking a cross-cultural perspective. The guiding
philosophy and assumptions remain the same. These include:

 Leadership is about others. Leaders exist to help others achieve their goals.
 Leadership is a complex process that cannot be explained by one word, one concept, or through
a simple definition or action.
 We all can learn to become better leaders. For some of us, the learning is easier in certain areas
than in others, but with practice and support from our organizations, we all can improve our
leadership skills.
 A cross-cultural perspective is essential to understanding leadership. Leadership is not a
culture-free process.
 Theories are useful tools. Although they sometimes appear esoteric, complicated, and even
contradictory, theories are useful tools that help clarify the complex process of leadership.
 Application and practice are essential to learning. You cannot learn to lead from a book or in a
classroom alone. To learn to lead, you have to practice.

As is the case with every edition, extensive research has gone into this edition. I also had the
opportunity to teach several large undergraduate leadership classes for the past couple of years and my
students’ feedback has shaped many of the revisions that you will see in this edition. Although the
overall structure remains the same, the outline in many chapters has been changed, and several new
features have been added to ensure that students can learn more easily and apply what they learn more
readily. Specific changes include:
 Close to two hundred new references have been added throughout the chapters, almost all
dating from 2010 forward.
 Close to 150 references were removed either because newer, more current research was
available, the examples no longer fit, or leaders had left or retired.
 Updated and revised learning outcomes for each chapter.
 Two new pedagogical features in all the chapters:
o Each chapter starts with a “The Leadership Question” that focuses the student on the
theoretical or practical issues covered in the chapter. The question is specifically addressed
at some point in the chapter in “Leadership Question Revisited” segment.
o Each chapter includes a “What Do You Do?” feature that presents a brief action-oriented
scenario to help students connect the material with hands-on applications.
In addition to general updates of research and examples in all the chapters, six of the ten chapters have
been substantially revised. Changes include:
 In Chapter 2:
o A substantial revision of the presentation of the GLOBE research
o Substantial revision and of the material on gender and diversity

Copyright © 2015 Pearson Education, Inc. 5


o New exercise added—World Map
o Cultural Mindset self-assessment revised
 In Chapter 4:
o New material and new self-assessment on proactive personality
o New material on the Dark Triad replaces separate coverage of Machiavellianism and
Narcissism
o Extensive revision on the section on leaders who fail
o New case about Zhang Xi of Soho-China

 In Chapter 6:
o Chapter is retitled to address the new era in leadership research
o Extensively revised presentation of value-based leadership including servant, authentic,
and positive leadership
o New “Applying What You Learn: Balancing a Positive Approach with Realism”
o Revised self-assessment on authentic leadership
o Extensive revision of the Avon-Andrea Jung case to reflect her leaving the company

 In Chapter 7:
o New “Leading Change: Public Allies”
o Extensive revision of the Leadership in Action case to reflect changes in leadership at
P&G

 In Chapter 8:
o New Leading Change: Google”
o New material on helping teams become effective

 In Chapter 9:
o Structure of the chapter has been revised
o New Leading Change: Ford’s Alan Mulally”
o New exercise—The 6 hats
o Extensively revised Leadership in Action that reflects company’s change in policy

Regardless of the level at which leadership is taught, it is generally taught as an elective. Therefore, the
content of the course remains very much up to the instructor. Most faculty who teach a leadership
course have some degree of expertise in the topic. They are likely to have their own favorite materials
and lectures. I developed the contents of this handbook based on those assumptions. In addition to the
multiple choice and true/false questions that are provided for this edition, you will find potential
assignments throughout the handbook. I also provide a summary and detailed outline of every chapter
for quick review.
I focused on providing the instructor with directions and ideas for the exercises and other
activities presented in the text. I have tested all of the exercises at the end of the chapters in my classes
over the past 30 years. Many are appropriate for all students; some work better with students with more
work experience. In spite of some differences, however, they are all accessible and relatively easy to
use. The clear majority are designed to be used as a brief supplement to a topic during a class period; a
few are lengthy enough to take up a whole class. I provide two brief course outlines along with a table
of activities to help instructors design their courses and decide which activities are appropriate for their
class.

Copyright © 2015 Pearson Education, Inc. 6


SAMPLE COURSE OUTLINES
______________________________________________________________________________
Sample course outline for 15 weeks with one-150 minute period a week

Week Topic Reading and other Class activities


assignments
1. Introduction: Definitions and Chapter 1 Exercise 1.1: More than
significance of leadership meets the eye
Exercise 1.2: What is
leadership?
Exercise 1.3: Images of
leadership
Exercise 1.4: Understanding
the leadership context
Case analysis: David
Neeleman
2. The global context: National Chapter 2 Exercise 2.1: World map
culture Self-assessment 2.1: Exercise 2.2: Proverbs
What is your primary Exercise 2.3: Narian bridges
cultural background? Case analysis: Leadership
Self-assessment 2.2: Do based on ancient principles
you have a cultural
mindset?
3. The cultural context: Gender and Chapter 2 Exercise 2.4: Leadership
diversity Self-assessment 2.3: and gender
Exploring views of Exercise 2.5: Is this sexual
women harassment?

Copyright © 2015 Pearson Education, Inc. 7


4. Foundations of modern Chapter 3 Exercise 3.1: The toy factory
leadership I Self-assessment 3.1: Exercise 3.2: Using the
Determining your LPC normative decision model
Self-assessment 3.2:
Assessing a leadership
situation
5. Foundations of modern Self-assessment 3.3: Case analysis: The caring
Leadership II Identifying your in- dictator
group and out-group
6. Individual differences and traits Chapter 4 Exercise 4.1: Your ideal
Self-assessments 4.1 to organization
4.6 Case analysis: Zhang Xin

7. Power Chapter 5 Exercise 5.1: Words of


Self-assessment 5.1: wisdom
Understanding your Exercise 5.2: Who holds
sources of power and power
influence Case analysis: the last CEO
Self-assessment 5.2: of Lehman Brothers
Views of power
Self-assessment 5.3:
Recognizing blocks to
empowerment
8. Midterm exam
9. Current approaches: Chapter 6 Exercise 6.1: Do you know a
Charismatic leadership charismatic leader
Exercise 6.2: Charismatic
speech
Exercise 6.3: Analyzing a
charismatic speech
10. Contemporary concepts Chapter 6 Case analysis: The rise and
Transformational leadership and Self-assessment 6.1: fall of Andrea Jung
value-based approaches Authentic leadership
Self-assessment 6.2:
Positive leadership
11. Upper-echelon and nonprofit Chapter 7 Exercise 7.1: Understanding
leadership Self-assessment 7.1: strategic forces
Strategic leadership Exercise 7.2: Your
type organization
Exercise 7.3: The influence
process
Case analysis: Leadership
musical chairs at P&G
12. Leading teams Chapter 8 Exercise 8.1: To delegate or
Self-assessment 8.1: not to delegate
Delegation Exercise 8.2: Strategies for
Self-assessment 8.2: becoming a self-leader
Are you a team leader? Case analysis: John Mackey

13. Leading change Chapter 9 Exercise 9.1: Analyzing and


Self-assessment 9.1: planning for change
Building credibility Exercise 9.2: Creativity and
Self-assessment 9.2: parallel thinking

Copyright © 2015 Pearson Education, Inc. 8


Creativity Case analysis: Best Buy’s
almost transformation
14. Developing leaders Chapter 10 Case analysis: Developing leaders
Exercise 10.1: at Southwest Airlines
Identifying your
mentoring needs
Self-assessment 10.1:
My personal mission
statement

15. Final examination

Copyright © 2015 Pearson Education, Inc. 9


Sample course outline for 15 week with two 75 -minute periods a week

Session Topics Readings Class activities


1. Introduction: Definitions Exercise 1.1: More than meets the
eye
Exercise 1.2: What is leadership?
2. Significance of leaders Chapter 1 Exercise 1.3: Images of
leadership
Exercise 1.4: Understanding the
leadership context
3. Obstacles to leadership Chapter 1 Case analysis: David Neeleman
Leadership and management
4. The global context: National Chapter 2 Exercise 2.1: World map
culture Self-assessment Exercise 2.2: Proverbs
2.1: What is your
primary cultural
background?
5. The global context: National Chapter 2 Exercise 2.3: Narian bridges
culture Self-assessment
2.2: Do you have a
cultural mindset?
6. The cultural context: Chapter 2 Exercise 2.4: Leadership and
Gender and diversity Self assessment gender
2.3: Exploring Exercise 2.5: Is this sexual
views of women harassment?
7. The global and cultural Chapter 2 Case analysis: Leadership based
contexts on ancient principles
8. History and foundations Chapter 3 Exercise 3.1: The toy factory
9. Theoretical foundations: Chapter 3 Exercise 3.2: Using the normative
Fiedler and Normative Self assessment decision model
decision model 3.2: Assessing a
leadership situation
Self assessment
3.1: Determining
your LPC
10. Theoretical foundations: Chapter 3
Path-goal, substitutes, Self assessment
attribution, and Leader- 3.3: Identifying
member exchange your in-group and
out-group
11. Theoretical foundations: Chapter 3 Case analysis: The caring dictator
Comparison of the models and
their contribution
12. Individual differences: Chapter 4 Exercise 4.1:Your ideal
demographic factors, values, Self-assessments 4.1 organization
abilities, and skills and 4.2
13. Individual differences: Big Chapter 4 Case analysis: Zhang Xin
Five, proactivity, type A, and Self-assessments 4.3 to
self-monitoring 4.5
14. Individual differences: The Chapter 4
Dark Triad and destructive Self-assessment 4.6
leadership
15. Understanding power Chapter 5 Exercise 5.1: Words of wisdom
Self-assessment 5.1: Exercise 5.2: Who holds power
Understanding your
sources of power and

Copyright © 2015 Pearson Education, Inc. 10


influence
Self-assessment 5.2:
Views of powers
16. Changing faces of power Chapter 5 Case analysis: The last CEO of
Self-assessment 5.3: Lehman Brothers
Recognizing blocks to
empowerment
17. Midterm examination
18. Current approaches: Chapter 6 Exercise 6.1: Do you know a
Charismatic leadership charismatic leader?
Exercise 6.2: Charismatic speech
Exercise 6.3: Analyzing
charismatic speech
19. Current approaches: Chapter 6 Case analysis: The rise and fall
Transactional and of Andrea Jung
transformational leadership
20. Current approaches: Value- Chapter 6
based leadership Self-assessment 6.1:
Authentic leadership
Self-assessment 6.2:
Positive leadership
21. Upper-echelon leadership Chapter 7 Exercise 7.1: Understanding
Self-assessment 9.1: strategic forces
Strategic leadership Exercise 7.2: Your organization
type
22. Upper-echelon and nonprofit Chapter 7 Exercise 7.3: The influence
leadership process
Case analysis: Leadership
musical chairs at P&G
23. Participative leadership Chapter 8 Exercise 8.1: To delegate or not
Self-assessment 8.1: to delegate?
Delegation
24. Teams and superleadership Chapter 8 Exercise 8.2: Strategies for
Self-assessment 8.2: becoming a superleader
Are you a team leader? Case analysis: John Mackey of
Whole Foods

25.2 25. Leading change: Models of Chapter 9 Exercise 9.1: Analyzing


change and planning for change
26. Leading change: Managing Chapter 9 Exercise 9.2: Creativity
change Self-assessment 9.2: and parallel thinking
Creativity
27. Leading change: Visionary Self-assessment 9.1: Case analysis: Best Buy’s
leadership Building credibility almost transformation
28. Developing leaders Chapter 10
Exercise 10.1:
Identifying your
mentoring needs
29. Developing leaders Chapter 10 Case analysis: Developing
Self-assessment 10.1: leaders at Southwest
My personal mission Airlines
statement
30. Final
examination

Copyright © 2015 Pearson Education, Inc. 11


SUMMARY OF EXERCISES AND
SUGGESTED ASSIGNMENTS
______________________________________________________________________________

The following table presents a summary of all the self-assessments and exercises at the end of each
chapter in the text. The table indicates 1) whether the activities require individual or group work, in
some cases both, 2) whether they can be done in class or require work at home, 3) the approximate time
needed to complete the activity, 4) the complexity level, and 5) whether the activity can be used as a
course assignment.

Individual or group
The rating of individual (I) or group (G) indicates whether students have to work on this activity by
themselves or in groups. In many cases both are required, as students have to complete an individual
section before moving to group activities (e.g., Exercise 5.3 “Recognizing blocks to empowerment”).
Some activities require no prior individual work or are too complex for individual students to complete
alone. Others, such as the self-assessments, require only individual work.

In class or at home
Some of the activities can be assigned as homework for students to complete outside of class. These are
marked “H.” Others require work in class either individually or in groups; they are indicated by “C.”

Time needed
The time estimates provided are approximate minimum time required to complete an activity. Ten
minutes is used as the base minimum, although many of the self-assessments are likely to take the
students less than 10 minutes to complete. The majority of exercises requires around 30 minutes. The
time needed often varies depending on class size.

Complexity level
A rating of 1, 2, and 3 is used to evaluate the complexity level of each activity.
o 1 = Low complexity
This rating indicates simple exercises that do not require a high level of skill or major time
commitment. For example, the first two activities (Exercise 1.1 and 1.2) are both rated as a “1.”
They are both appropriate for getting the faculty and the student used to experiential exercises.
Most of the self-assessments, which the students will be doing on their own, are also rated as
low complexity.

o 2 = Moderate complexity
This rating indicates that the activity requires some skills and generally a time commitment of
30 minutes or longer. For example, Exercise 2.3 “Leadership and gender,” and 5.2 “Who holds
power in your organization?” are rated as a “2” because they require students to integrate
information from the chapters in order to complete the exercise.

o 3 = High complexity
A rating of 3 indicates that the activity is complex and time consuming. Activities rated as a
“3” either require complex role plays (e.g., Exercise 2.2 “Narian bridges”) or complex
integration and application of course concepts (e.g., Exercise 3.2, “Using the normative
decision model,” and 6.2 “Charismatic speech”).

Course assignment

 This symbol in the table and in the Leader’s Handbook indicates that the activity is well suited
for use as a course assignment, graded or otherwise. The assignments are described throughout
the handbook.

Copyright © 2015 Pearson Education, Inc. 12


Activities and Assignments
Activity and page Individual Home (H) Time Complexity Appropriate
number (I) or or in class needed level for course
Group (G) (C) assignment
Chapter 1: Definition and significance of leadership
What do you do? I and G H or C 10 minutes 1

Leadership challenge: I and G H or C 15 minutes 1
Moving to leadership 
Exercise 1.1: More than I or G H or C 20 minutes 1
meets the eye: 
characteristics of leaders
Exercise 1.2: What is I and G C 25 minutes 1
leadership?
Exercise 1.3: Images of G C 25 minutes 1
leadership
Exercise 1.4: I and G H or C 25 minutes 3
Understanding the 
leadership context
Leadership in action: I or G H or C 25 minutes 3
David Neeleman 
reinvents airlines
Chapter 2: The global and cultural contexts
What do you do? I and G H or C 10 minutes 1

What do you do? I and G H or C 10 minutes 1

Leadership challenge: I and G H or C 15 minutes 1
Juggling cultures 
Exercise 2.1: World map I and G C 10 minutes 1

Exercise 2.2: Proverbs as I and G H or C 20 minutes 1


a window to leadership
Exercise 2.3: Narian G C 60 minutes 3
bridges
Exercise 2.5: Is this G C 30 minutes 2
sexual harassment? 
Self-assessment 2.1: What I H 20 minutes 2
is your primary cultural 
background?

Activity and page Individual Home (H) Time Complexity Appropriate


number (I) or or in class needed level for course
Group (G) (C) assignment
Self-assessment 2.2: Do I H 5 minutes 1
you have a cultural 
mindset?
Self-assessment 2.3: I H 15 minutes 2
Exploring view of women 
Leadership in action: I or G H or C 25 minutes 3
Leadership based on 
ancient principles
Chapter 3: The foundations of modern leadership

Copyright © 2015 Pearson Education, Inc. 13


What do you do? I and G H or C 10 minutes 1

Leadership challenge: the I and G H or C 15 minutes 1
in-group applicant 
Exercise 3.1: The toy G C 75 minutes 3
factory
Exercise 3.2: Using the I and G H and C 45 minutes 3
normative decision model 
Self-assessment 3.1: LPC I H 10 minutes 2

Self-assessment 3.2: I H or C 20 minutes 2


Assessing a leadership 
situation
Self assessment 3.3: I H 15 minutes 2
Identifying your in-group 
and out-group
Leadership in action: The I or G H or C 25 minutes 3
caring dictator 
Chapter 4: Individual differences and traits
What do you do? I and G H or C 10 minutes 1

Leadership challenge: I and G H or C 15 minutes 1
Using psychological 
testing
Exercise 4.1: Your ideal I and G C 30 minutes 2
organization

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Activity and page Individual Home (H) Time Complexity Appropriate
number (I) or or in class needed level for course
Group (G) (C) assignment
Self-assessment 4.1: I H 5 minutes 1
Value systems 
Self-assessment 4.2: I H 10 minutes 1
Emotional intelligence 
Self-assessment 4.3: I H 5 minutes 1
Proactivity 
Self-assessment 4.4: Type I H 5 minutes 1
A 
Self assessment 4.5: Self I H 5 minutes 1
monitoring 
Self-assessment 4.6: I H 5 minutes 1
Narcissism 
Leadership in action: I or G H or C 25 minutes 3
Zhang Xin: The humble 
Chinese billionaire
Chapter 5: Power and leadership
What do you do? I and G H or C 10 minutes 1

Leadership challenge: I and G H or C 15 minutes 1
How much is enough? 
Exercise 5.1: Words of I and G C 20 minutes 1
Wisdom 
Exercise 5.2: Who holds I H 15 minutes 2
power in your 
team/organization?
Self-assessment 5.1: I H 10 minutes 2
Understanding your 
sources of power and
influence
Self assessment 5.2: I H 10 minutes 1
Views of power
Self-assessment 5.3: I H 10 minutes 2
Recognizing blocks to 
empowerment
Leadership in action: The I or G H or C 25 minutes 3
last CEO of Lehman 
Brothers: Richard Fuld

Copyright © 2015 Pearson Education, Inc. 15


Activity and page Individual Home (H) Time Complexity Appropriate
number (I) or or in class needed level for course
Group (G) (C) assignment
Chapter 6: Current era in leadership
What do you do? I and G H or C 10 minutes 1

Leadership challenge: I and G H or C 15 minutes 1
Standing up to a 
charismatic but unethical
leader
Exercise 6.1: Do you I or G H or C 10 minutes 2
know a charismatic
leader?
Exercise 6.2: Charismatic G H and C 60 minutes 3
speech 
Exercise 6.3: Analyzing G H and C 60 minutes 3
charismatic speech 
Self-assessment 6.1: I H 10 1
Authentic leadership 
Self-assessment 6.2: I H 10 1
Positive leadership 
Leadership in action: I or G H or C 25 minutes 3
Andrea Jung’s rise and 
fall at Avon
Chapter 7: Other leadership perspectives
What do you do? I and G H or C 10 minutes 1

Leadership challenge: I and G H or C 15 minutes 1
BODs and CEOs 
Exercise 7.1: G C 30 minutes 2
Understanding strategic 
forces
Exercise 7.2: Your I and G C 25 minutes 2
organization
Exercise 7.3: Influence I and G C 30 minutes 2
process 
Self-assessment 7.1: What I H 15 minutes 1
is your strategic
leadership type?

Activity and page Individual Home (H) Time Complexity Appropriate


number (I) or or in class needed level for course
Group (G) (C) assignment
Leadership in action: I or G H or C 25 minutes 3
Leadership musical chairs 
at P&G
Chapter 8: Leading teams
What do you do? I and G H or C 10 minutes 1

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Leadership challenge: I and G H or C 15 minutes 1
Who gets the project 
Exercise 8.1: To delegate G C 45 minutes 3
or not delegate
Exercise 8.2: Strategies I H 45 minutes 3
for becoming a self-leader 
Self-assessment 8.1: I H 5 minutes 1
Delegation scale
Self-assessment 8.2: Are I H 5 minutes 1
you a team leader?
Leadership in action: John I or G H or C 25 minutes 3
Mackey of Whole Foods 
Chapter 9: Leading change
What do you do? I and G H or C 10 minutes 1

Leadership challenge: I and G H or C 15 minutes 1
Implementing unpopular 
change
Exercise 9.1: Analyzing G C 45 2
and planning for change
Exercise 9.2: Creativity G H or C 60 to 75 2
and parallel thinking the minutes
six hats method
Self-assessment 9.1: I H 15 minutes 2
Building credibility 
Self-assessment 9.2: I H 15 minutes 2
Creativity 

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Activity and page Individual Home (H) Time Complexity Appropriate
number (I) or or in class needed level for course
Group (G) (C) assignment
Leadership in action: Best I or G H or C 20 minutes 3
Buy’s almost 
transformation
Chapter 10: Developing leaders
What do you do? I and G H or C 10 1
minutes 
Leadership challenge: I and G H or C 15 1
Finding the right fit minutes 
Exercise 10.1: I H 30 3
Identifying your minutes 
mentoring needs and
potential mentors
Self-assessment 10.1: I H or C 30 3
My personal mission minutes 
statement
Leadership in action: I or G H or C 25 3
Developing leaders at minutes 
Southwest Airlines

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SECTION TWO
_____________________________________________________________________________
CHAPTER MATERIALS

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PART ONE
______________________________________________________________________________
BUILDING BLOCKS

Chapters 1 through 5 present the building blocks and foundational theories of leadership.

Copyright © 2015 Pearson Education, Inc. 20


CHAPTER 1
DEFINITION AND SIGNIFICANCE OF LEADERSHIP
__________________________________________________________________

Chapter Overview
This chapter introduces students to the concepts of leadership and leadership effectiveness by providing
working definitions and limitations of the concepts. The applicability and limitations of existing models
and theories are discussed. Obstacles to effectiveness and the differences between leadership and
management are presented. Roles and functions of leaders are outlined followed by a presentation of the
arguments regarding the importance of leadership in organizational performance. Current trends and
changes in organizations are considered along with the factors that are leading to those changes with a
focus on demographic trends. Barriers to effective leadership are considered.

Chapter Objectives

OBJECTIVES THROUGH THROUGH FEATURES, THROUGH


BASIC TEXT TABLES, and FIGURES EXERCISES
Define leadership
effectiveness
and
 The Leadership Question, The
Leadership Question Revisited
Exercise 1.1
Exercise 1.2
Leading Change: The Container Exercise 1.3
Store”
Table 1.1: Significance of
leadership
Discuss
obstacles
the
to
major
effective  Applying What You Learn:
Leadership Basics
leadership
Compare and contrast
leadership and  Table 1.2: Managers and
leaders
Exercise 1.3

management
List the roles and functions
of leaders and managers  Figure 1.1: Leader’s functions
in shaping organizational
Exercise 1.1
Exercise 1.2
culture Exercise 1.3
Applying What You Learn:
Leadership Basics
Explain the changes in
organizations and how they  What do you do?
Figure 1.2: Control versus
Exercise 1.1
Exercise 1.2
affect leaders results-oriented leadership Exercise 1.3
Figure 1.3: Factors fueling Exercise 1.4
changes in organizations and
their leadership
Figure1.4: Diversity in the U.S.
population
Table 1.3: U.S. demographic
highlights and trends
Summarize the debate over
the role and impact of  Applying What You Learn:
Leadership Basics)
Exercise 1.3

leadership in organizations Table 1.1: Significance of


leadership

Chapter Outline

The Leadership Question Some leaders are focused on getting things done while others put taking
care of their followers first. Some look at the big picture, and others hone in on the details. Is one
approach better than the other? Which do you prefer?

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1. Effective leadership

a. Who is a leader?

A leader is defined as any person who influences individuals and groups within an organization, helps
them in the establishment of goals, and guides them toward achievement of those goals, thereby
allowing them to be effective.
The definition includes four elements: 1) group process; there are no leaders without followers, 2)
leadership involves interpersonal influence, 2) action and goal orientation, and 3) hierarchical
relationship.

b. When is a leader effective?

The issue of effectiveness is complex and multifaceted with different theories focusing on different
aspects including group performance, employee satisfaction, and organizational change.

c. Effectiveness vs. success

Luthans’s research on the difference between effective and successful leaders is presented. In many
cases, those who are effective are not always successful. Effective leaders communicate with followers,
manage conflict, and train and develop subordinates; successful leaders focus on networking and taking
care of their supervisors.
Ideally, effectiveness should include both elements of taking care of followers and also external factors.
The case of the New York Times illustrates the possible dichotomy.

d. An integrative definition

Definition includes internal stability and health, external adaptability, and goal achievement.
A leader is effective when his or followers achieve their goals, can function well together, and can adapt
to the changing demands from external forces.

Leadership Question Revisited Summarizes the complexity of the definitions of leadership and
effectiveness and emphasizes the importance of the context and situation in determining what
effectiveness is.

e. Why do we need leaders?

Leadership is a universal concept that has existed throughout history and in all cultures. People need
leaders: 1) because groups need to stay orderly and focused, 2) to accomplish tasks, 3) to make sense of
the world, and 4) as a romantic ideal.

f. Research on significance of leadership

Arguments over the impact of leadership in organizations are presented in this section. In spite of strong
popular beliefs that leaders are important, research findings have not been very supportive of the
concept (Table 1.1). The impact of the leader is often affected by situational characteristics that limit his
or her power and discretion. These factors are described in detail in chapters 6 and 7. The view that
leaders impact their organizations directly through their actions and decisions, or indirectly through the
vision they provide, is reaffirmed.

Leading Change The Container Store is an organization with a unique culture focused on customers
and on taking care of employees who are the ones who deal with the customers. Its definition of
effectiveness is “making the customer dance” from delight at having a product that fits her needs. They
create their culture through careful selection, extensive training, high pay, taking care of employees
through work-life balance, and a family-friendly environment. The leaders are focused on the culture
and on maintaining it.

Copyright © 2015 Pearson Education, Inc. 22


2. Obstacles to effective leadership

Discussion of obstacles to effective leadership focuses on the need to practice various leadership skills
in an atmosphere that encourages experimentation and tolerates mistakes. Organizational rigidity, lack
of opportunity for practice, uncertainty, organizational complexity, and inaccessible academic research
are all obstacles to effective leadership.

3. Leadership and management

Arguments about the difference between leadership and management are presented. Leaders are
considered by some to be visionary and future oriented, whereas managers focus on day-to-day routine
activities (Table 1.2). The section concludes that effective managers often perform many of the duties
and activities ascribed to leaders thereby making the distinction between the two concepts somewhat
unnecessary.

4. Roles and functions of leaders

a. Managerial roles

This section presents Mintzberg’s research on managerial roles and discusses cultural and gender
differences in those roles. Research has found that female managers work at a calmer pace and have
closer contact with their followers and where a more reflective approach is presented. The concept of
web structure is used to describe the style and structure used by female managers.

b. Function of the leader: creation and maintenance of an organizational culture

The key role of leaders in the creation and maintenance of an organization’s culture are discussed. The
processes used by leaders to shape culture are role modeling, setting up the reward system, hiring
decisions, and decisions regarding strategy and structure (Figure 1.1).

Applying What You Learn: Leadership Basics Focuses on leadership as a long-term journey rather
than a destination and emphasizes learning. Basic leadership factors include finding your passion,
learning about yourself, experimenting with new situations, getting comfortable with failure, paying
attention to the environment, and keeping a sense of humor.

5. Changes in organizations and expectations of leaders

The current trends and changes in the United States and many other Western organizations are described
with focus on the quality, empowerment, and participative management movements.
What do you do? The short scenario illustrates the ongoing challenges organizations and leaders face
in adapting to new leadership models that recommend participation, openness, and flexibility. Although
many organizations state such approaches as their practice or their goal, many continue to implement
more traditional models that may not fit well with some employees and managers. As a practical matter,
one leader, especially one who is not at the highest levels of an organization, cannot push for rapid
change. The most reasonable approach is to “nudge” for small changes, demonstrate their success, and
build on such success. In some cases, though, organizations and their leaders do not welcome change. If
there is not room for change, employees need to reevaluate the fit between them and the organization.

a. New roles for leaders

New roles are presented (Figure 1.2).

b. Factors fueling changes

Copyright © 2015 Pearson Education, Inc. 23


Factors fueling those changes (Figure 1.3) are summarized including demographic changes (Figure 1.4
and Table 1.3), globalization, characteristics of a new generation of employees, increased level of
education, and the quality movement.

c. Barriers to change

Focuses on the difficulties faced by many organizations in moving toward new leadership and
management models. Increased financial pressures, focus on individuals, and absence of teams at higher
levels of decision-making, as well as the difficulty leaders have in giving up control after having been
trained in a top-down style for many years, are discussed as the primary barriers to change in
organizations.

6. Summary and conclusions

Review and Discussion Questions

1. What are the essential components of the definition of leadership?


 First, leadership is a group and social phenomenon; there can be no leaders without followers.
Leadership is about others.
 Second, leadership necessarily involves interpersonal influence or persuasion. Leaders move others
toward goals and actions.
 Third, leadership is goal directed and action oriented; leaders play an active role in groups and
organizations. They use influence to guide others through a certain course of action or toward the
achievement of certain goals.
 Fourth, the presence of leaders assumes some form of hierarchy within a group. In some cases, the
hierarchy is formal and well defined, with the leader at the top; in other cases, it is informal and
flexible.

A leader is a person who influences individuals and groups within an organization, helps them establish
goals, and guides them toward achievement of those goals, thereby allowing them to be effective.

2. What are the essential components of the definition of leadership effectiveness?


 Achieving goals
 Maintaining internal stability and health
 Adapting to the external environment

Leaders are effective when their followers achieve their goals, can function well together, and can adapt
to changing demands from external forces.

3. Why do we need leaders?


 To keep groups orderly and focused. Whereas individual
group members may have common goals, they also have individual needs and aspirations. Leaders
are needed to pull the individuals together, organize, and coordinate their efforts.
 To accomplish tasks. Groups allow us to accomplish tasks
that individuals alone could not undertake or complete.
 To make sense of the world. Groups and their leaders
provide individuals with a perceptual check.
 To be romantic ideals. Leadership is needed to fulfill our
desire for mythical or romantic figures who represent us and symbolize.

4. Provide one example each of an effective leader and a successful leader. Consider how they
differ and what you can learn from each.

Copyright © 2015 Pearson Education, Inc. 24


Examples students provide should include one or more of the elements that define both leaders and
leadership effectiveness.

5. What are the obstacles to effective leadership? How have the nature and occurrence of such
obstacles changed in recent years? Why?

 Organizations face considerable uncertainty that creates pressure for quick responses and solutions.
External forces, such as voters and investors, demand immediate attention. In an atmosphere of
crisis, there is no time or patience for learning. Uncertainty creates a vicious cycle that allows no
time for the learning that would help current crises continue. The lack of learning and
experimentation in turn causes the continuation of the crises, which makes the time needed to learn
and practice innovative behaviors unavailable.
 Organizations are often rigid and unforgiving. In their push for short-term and immediate
performance, they do not allow any room for mistakes and experimentation. The rigidity and
rewards systems of many institutions discourage such endeavors.
 Organizations fall back on old ideas about what effective leadership is and, therefore, rely on
simplistic solutions that do not fit new and complex problems.
 Organizations develop a particular culture that strongly influences how things are done and
what is considered acceptable behavior. As leaders try to implement new ideas and experiment with
new methods, they may face resistance generated by the established culture.
 The difficulty involved is understanding and applying the findings of academic research.

6. Based on your knowledge of the field of management and your personal definition of
leadership, how are management and leadership similar or different? How can the differences be
reconciled? How do these differences add to our understanding of leadership?

Students should address one or more of the following:

Management Leadership
Focus on the present Focus on the future
Maintain status quo and stability Create change
Implement policies and procedures Initiate goals and strategies
Maintain existing structure Create a culture based on shared values
Remain aloof to maintain objectivity Establish an emotional link with followers
Use position power Use personal power

7. What are the ways in which leaders influence the creation of culture in their organizations?

Leaders influence their organization’s culture through:


 Role modeling
 Setting up and enforcing the reward system
 Making hiring decisions directly and indirectly
 Setting the strategy and structure

8. What are the elements of the emerging leadership styles? What are the factors that support such
styles?

The roles of leaders are changing demanding new styles of leadership that focus more on results than on
control (Figure 1.2). Increasingly, leaders give up many of their traditional managerial roles and focus
more on providing vision, guidance, and leadership. They allow employees to organize and plan
activities and even control their own work while sharing responsibility for the results with their leaders.
Some of the primary factors fueling theses changes include: demographic changes, employee
expectations, worldwide political changes, and increased globalization (Figure 1.3).
9. What obstacles do new leadership styles face in traditional organizations? How can obstacles

Copyright © 2015 Pearson Education, Inc. 25


to new models be overcome?
Some of the barriers or obstacles to the use of new leadership styles are:
 Seeking quick results
 Financial pressures
 Lack of teams in upper management
 Relying on old methods
 Fear of experimentation
 Rewards for status quo
 Rewards for individual performance only

The Leadership Challenge: Moving the Leadership

The leadership challenge for this chapter focuses the challenges people face when they move to a
leadership role. The dilemma is to how maintain existing relationships with those who used to be your
equals while establishing authority and fulfilling leadership roles. This is a common challenge that
many students face as they are promoted to supervisory positions, often over their friends or individuals
who are much older than they are. Some of the issues that students must consider are:

 How to establish authority.

Establishing authority and hierarchy is necessary, but it is often overdone and exaggerated by
inexperienced leaders. Although followers must understand that the newly promoted person has
different roles and responsibilities, there is no need to completely separate from the group and become
overly autocratic, a mistake that many new supervisors make.

 Specific actions to help the transition:


o Get advice and help. It is essential that the new leader seeks advice from those with more
experience and training whenever available. Rely on old mentors or find new ones.
o Seek training. The training can be technical to help learn the task better so that he or she can
help the team, or understand the legal and operational aspects of the job or interpersonal to
learn to manage the team better, provide feedback, delegate, and so on.
o Practice your story. There may be some challenges about why you got the job over other
people. Prepare a clear explanation that outlines your strengths without putting down others
(e.g., “I have been going to school for that past two years while working with you and have
attended all the available training so that I could be ready to move up. It is important for all us
to keep up with our education and skills. I would be happy to help you figure out what you
need to do to get there.”)
o Network. Establish new contacts with other supervisors and leaders at the same level.
o Maintain friendly relationships with those who were your equals. The boundaries are sharper,
but there is no need to cut off previous friendships.
o Continue seeking help and advice from followers. Although the new leader has some new roles,
the previous relationships are still needed to get the job done.
o Clearly explain your new role to those who either do not understand (use the “story” you have
developed) it or prefer to ignore it.

 Things to avoid:
o Although maintaining good relationships is essential, trying to continue being “one of the
boys” is difficult. Some boundaries must be established.
o Overplaying the leader role. Becoming autocratic and heavy handed is not the solution and
likely to destroy productive relationships.
o Don’t pretend to know all the answers. Particularly in Western cultures, admitting to not
knowing something is fully acceptable for a leader. Rely on your team.

Copyright © 2015 Pearson Education, Inc. 26


Chapter 1 Experiential Exercises

Exercise 1.1: More than meets the eye—characteristics of leaders


This simple exercise is designed to demonstrate to students how complex leadership and its definitions
can be. Students often develop a long list of characteristics, traits, and behaviors, but cannot
agree on which ones are essential and necessary for effective leadership. Additionally, they
quickly realize that they do not have most of those characteristics and neither do many effective
leaders they may know.

Total time: Mininum 25 to 30 minutes.

Materials needed: paper and pencil for students; use of board; flip chart.

1. Characteristics essential to leadership (5 minutes)


Ask students individually to write down as many traits, behaviors, and characteristics of what they think
good leaders must have. Tell them to complete the phrase: “A good leader must/should, do, be . . .”

2. Essentials (7 minutes)
Assign students to groups, or let them pick their own, and ask them to pare down the list to 7 to 10
characteristics. What do they consider essential? Which ones make or break a leader?
This is a pretty lively stage because chances are that they will not easily agree on what is essential, a
fact that is partly the point of this exercise.

3. How do you match up? (7 minutes)


Instruct the students to discuss the following:
 How many of the characteristics do you personally have?
 Can you ever match up to the list you just developed?
 If you do not, how does that affect your ability to lead?
 Do you know any effective leader who lacks one or more of the characteristics?
 Do you think the characteristics are essential to that person’s effectiveness?

4. Complexity of leadership (5 to 10 minutes)


 There are many traits/behaviors associated with leadership
 Not everyone agrees on what is essential
 One person almost never has all the traits
 Having all the traits is not necessary for good leadership
 Traits alone do not make a leader—the situation is important
 Each person must consider their own strengths and capabilities and the situation when
addressing important traits and behaviors

Option: This exercise works very well as an in-class introductory activity, instead of students working
individually and in groups. The activity takes between 15 and 20 minutes.

Step 1: Solicit characteristics from students and record them on the board, developing a long list.
Encourage them to suggest behaviors and traits.

Step 2: Review each item on the list and ask students whether they consider it essential or optional and
delete those the class generally agree are optional. You are likely to get much disagreement. You should
keep any that the students think are essential or feel strongly about. This should result in a long list,
which is the goal.

Step 3: Lead a discussion starting with asking students:


How many of you have all these traits?
How many of you do all these things well?
Does that mean you cannot lead?

Copyright © 2015 Pearson Education, Inc. 27


The prompts in Step 4 above (Complexity) can be used to lead the discussion.

Copyright © 2015 Pearson Education, Inc. 28


Exercise 1.2: What is leadership?

This exercise is designed to help students develop a personal definition of leadership and understand
how their personal view of ideal leadership affects their assumptions and future behaviors as leaders.
The exercise can be used in a variety of ways, from a cooperative learning exercise as presented in the
text to an individual assignment focusing on only the first step.

Total time: Minimum 25 minutes; maximum time depends on number of students and groups.

Materials needed: Paper and pencil; use of board; flip chart can be useful for development of group
definitions and presentations.

Part 1: Describe Ideal Leader (Individual work; 5 to 10 minutes)


Either as a homework assignment or as an in-class exercise, ask students to list the desirable and
undesirable characteristics of their ideal leader. The desirable characteristics are sometimes easier than
the undesirable ones. You can help students with the second category by asking them to consider
characteristics and behaviors that their ideal leader would not have. For example: “My ideal leader
would not make arbitrary decisions or would not be indecisive.” Although some overlap is to be
expected, students should be encouraged to avoid simply listing opposite characteristics in the two lists.

Examples of typical items listed by students


Desirable Undesirable
Integrity Autocratic leadership
Good interpersonal skills No concern for others
Enthusiasm Dishonesty
Decisiveness Manipulativeness
Competence Arbitrariness
Charisma Self-centeredness
Good communication skills Unresponsiveness
Openness to others’ ideas Closed-mindedness
Participative decision-making Unwillingness to accept feedback
Vision

Option: The personal list developed by each student can be used as a basis for evaluating what students
have learned in class and how their thinking has evolved, their assumptions have been changed or
reaffirmed. The lists can be collected by the instructor and handed back the last week of class.

Part 2: Develop Group Definition (Group work; 10 to 20 minutes)


As with all group exercises in the book, the instructor has the option of either assigning groups or
allowing students to select their own groups. Groups of larger than six tend to be inefficient and often
have trouble reaching a group decision in the limited time allocated in class. Ideal size is four to five
members.
Ask students to keep their own list intact and write the group list on a separate piece of paper.
This part of the exercise often generates considerable in-group discussion as students compare their
lists. Although some common items are listed by different students, there are also many that show up on
only one or two people’s lists. Through the discussion, students realize the highly personal nature of
definitions of leadership. If the groups are culturally diverse, cultural differences in leadership may also
surface. Similarly, there often is a gender difference in images of ideal leadership. For example,
decisiveness and “in charge” characteristics are more often part of male students’ definitions than part of
female students’.

Option: Groups can be assigned based on gender or other cultural characteristics to accentuate cultural
differences and focus discussion on the cultural elements of ideal leadership.

Copyright © 2015 Pearson Education, Inc. 29


Part 3: Present and Defend (7 minutes per group)
Each group is asked to make a three-to-five-minute presentation listing their ideal leader’s desirable and
undesirable characteristics and briefly explaining the reason for their choices.

Option: Group presentations can be replaced by the instructor asking each group for their first, second,
third, and so forth characteristic in a round robin fashion until all items are recorded on the board.

Part 4: Common Themes (Class discussion; 10 to 15 minutes)


Part 4 focuses on in-class discussion of images of ideal leadership. The lists generated by the groups are
used as the basis for this discussion. The focus should be on the complexity and diversity of leadership
images and the implications for understanding the process of leadership.
With the recent push toward empowerment and participative decision-making, common themes among
students’ list often include issues of participation, autonomy, having a vision as essential to ideal
leadership. Undesirable characteristics often focus around lack of integrity, too much control, and
inability to motivate followers.
The discussion can include cross-cultural differences in leadership. The instructor or the students can
bring in material about how culture impacts our images of ideal leadership. Hosftede’s cultural
dimensions also provide a good basis for discussion. For example, in high power distance and
uncertainty avoidance cultures, ideal leaders are likely to be expected to provide answers to all follower
questions. Additionally, expectations of employee participation and empowerment are likely to be low.
In masculine cultures, the element of taking care of followers is likely to be less pronounced than in
feminine cultures. Concern for individuals and individual attention to followers is likely to be lower in
collectivist than in individualist cultures.

Overall: This is a very simple exercise for both students and faculty. It can serve as a nice ice breaker
the first week of class and help point out the richness of concept and process of leadership and prepare
students for the broad diversity of topics and issues that will be discussed throughout the term.

Copyright © 2015 Pearson Education, Inc. 30


Exercise 1.3: Images of Leadership

As with Exercise 1.1, this exercise is designed to help students clarify their personal assumptions about
leadership. It can be used alone or in conjunction with Exercise 1.1. Using images to clarify ideal
leadership is generally appealing to students. Although the exercise has a group-discussion component,
the exercise is not designed as a cooperative learning exercise. Group discussions help students fine-
tune and clarify their personal definitions.

Total time: Minimum 25 minutes.

Materials needed: Paper and pencil; use of board by instructor.

Part 1: Select your image (Individual work; 5 to 7 minutes)


Similar to the popular organizational metaphor exercise, students are encouraged to develop their
personal image or metaphor of leaders. Commonly used metaphors include leader as:

Sport coach Orchestra conductor Head of family


Team facilitator Jungle/safari guide Therapist
Train engineer Ringmaster Obstacle remover

Ask students to pick an image/metaphor and list the implications of that metaphor for the role and
behavioral expectations of leaders. For example, an orchestra conductor is the undeniable leader of the
orchestra; nothing happens without his or her direction. He or she is in full control and often dictates the
actions of others. The organization, on the other hand, is fully synchronized and acts in total
coordination and unison. The head of the family is similarly in full control, although the sense of total
cooperation and focused action is lacking. The head of a family has responsibility for the emotional and
psychological well-being of members, a factor that is lacking from an orchestra. The issue of conflict is
also part of a family much more so than an orchestra.
Students are often very creative with their images. The instructor’s goal should be to guide them in the
understanding of the implications of the image they select.

Part 2: Share and Clarify (Small group discussion; 10 to 15 minutes)


Small groups can be used as a sounding board for students to help them clarify the implications of the
image that appeals to them.

Option: This step can be skipped to move directly to class-discussion, especially in small classes (under
25 students) where whole-class discussions are possible. Having small group discussions allows
students to fine-tune their images and think about the consequences.

Part 3: Class Discussion (10 to 15 minutes)


The discussion questions allow for exploration of various images and their implications for
organizations. Some images are becoming obsolete while others are gaining ground. For example, team
facilitator is a very popular metaphor although students are often not fully aware of the implication of
such an image for the structure of an organization or its potential shortcomings. Namely, team
facilitators do not make decisions for their teams; their role is to support, guide, and encourage. The
implications of such a style in times of crisis when quick decision-making is essential need to be
explored.

Option: As with Exercise 1.1, discussion of cross-cultural differences in images of leadership is very
appropriate. Particularly, the diversity of images that are used in the United States can be pointed out as
resulting from the cultural diversity within the population.

Overall: As with Exercise 1.1, Exercise 1.2 is very simple and easy to execute. The development of
images triggers lively and interesting discussion among the students and makes this an ideal ice breaker
for the first week of class.

Copyright © 2015 Pearson Education, Inc. 31


Exercise 1.4: Understanding the Leadership Context
This exercise is designed to help students understand the various contextual factors that have the
potential to affect leadership. It presents a fairly complex concept and may be difficult for younger and
less experienced students to grasp. However, more experienced students with some work experience
should not have any difficulty picking a leader that they know or have known and to identify the various
contextual factors that affect the person’s leadership concept. This exercise can be used both
individually and for a group activity. The group discussions often allow students to grasp the concept of
context. It also can be assigned as part of graded class assignment.

Total time: Minimum 25 minutes.

Materials needed: Paper and pencil; use of board by instructor.

Part 1: Individual/Group work (15 minutes)


Student should select either a leader they know and have worked with or a business or political leader
with whom they are familiar. This can be done individually or as group. Once the leader is selected, the
students must consider the context in which the leader operates. Not all these factors may be relevant;
however, students should be encouraged to explore the context may be relevant and influence how the
leader makes decisions and acts.

1. Long-term historical, political, and economic forces include such factors as:
 The history of the organization if it has been around for a while
 The national history, if relevant (for example, the organization may
have a long-standing positive or negative reputation)
 Political factors (for example, the organization may be tied to a
particular political party or system)
 Long-term economic factors (for example, the steel industry has
long-term economic factors to consider

2. Current contemporary forces include such factors as:


 Cultural diversity (changes in the demographic and cultural makeup
of the organization’s customers and other stakeholders)
 Social values that may affect the organization, its products and
services (for example, fast-food companies are affected by the increase in obesity in the United States)
 Technology (for example, many organizations are seeing
competitors who operate online services similar to theirs; or organizations are expected to provide
online services for their customers)
 The economy
 Social changes (for example, a more conservative political and
social climate may affect the products and services an organization offers or how it advertises them)

3. The immediate context includes such factors as:


 The organizational culture and climate
 The structure of the organization
 The organization’s performance
 The products and services delivered
 The various suppliers
 The followers (their abilities, strengths, and weaknesses)

Copyright © 2015 Pearson Education, Inc. 32


Option: For students who have no or limited work experience, the instructor can assign a well-known
leader using articles for current headlines. I have successfully used President George W. Bush
and asked students to identify the contextual factors that have affected his decision to launch
the war with Iraq. You can also use President Obama’s leadership context with issues such as
health care or the budgetary disagreements. You can also compare the context two years ago to
the current context. Although the long-term and contemporary elements remain the same, the
immediate context has changed. The contextual factors to consider in this case are:

Long-term historical, political, and economic factors


The Middle-East situation (Arab-Israeli conflict; Iran)
Oil
History of Republican Party
The United States as the policeman of the world

Contemporary context
The first Gulf War
Conservative vs. liberals
The United States as the remaining superpower
Prior actions by Bill Clinton

Immediate context
The terrorist attacks of 9/11
The war in Afghanistan
The Iraq War
The Neoconservative agenda
The support and dissent from traditional allies
The conservative agenda
The concern of a legacy
How the task is defined (easy victory; welcome by Iraqis)
International goals
Domestic goals
Followers (voters on both sides of the political lines)
The 2008 U.S. presidential election

Part 2: Discussion and presentation (10 minutes)


Each group is asked to present their leader and outline the contextual factors that impact the leader’s
decisions and actions. Similarities and differences between the leaders’ different context can also be
discussed. The instructor can highlight how some of the contextual factors strongly influence and limit a
leader’s ability to make decisions or take certain course of action. For example, with President Bush as
the example, the first Gulf was, the 9/11 attacks, and the conservative agenda all provided a very strong
context that determined many of his actions.

Overall: The Leadership Context exercise is a powerful way to focus students’ attention on the
importance of the leadership context instead of looking only at the leader characteristics.

Copyright © 2015 Pearson Education, Inc. 33


David Neeleman Reinvents Airlines

Case summary

The case discussed David Neeleman founder of Morris Air, JetBlue, and most recently the Brazilian
airline Azul. JetBlue is one of the success stories in the U.S. airlines industry and Azul appears to be
following the same path. JetBlue has been very successful while breaking all the rules of the industry.
Its small size, dedicated staff, no-layoff policy, unusual routes, and willingness to innovate have allowed
it to achieve success. In spite of low prices, the airline pampers its customers with individual TV sets,
chocolate chip cookies, and outstanding service. JetBlue’s president David Neeleman relies on his
employees for ideas and innovation. The airline’s “can do” attitude and its reliance on innovation play a
great part in its success.

1. What are the key elements of JetBlue’s culture?

Focus on the customer, getting information from all sources, and maintaining a strong team spirit within
the company are the key elements of JetBlue’s culture. The company aims at pleasing its customers by
pampering them and addressing their needs. JetBlue also listens to its employees, tries to create an
egalitarian culture when participation is encouraged, and works on leaving the “we-they” attitude that
typifies management and labor in most company behind.

2. What role does the leader play in the development and maintenance of the culture?

Because JetBlue is still young, the impact of its founder, David Neeleman is still highly pervasive. His
entrepreneurial, high-risk approach to business is evident in all aspects of the company. He is present
and active in all aspects of the business. He serves as the formal leader, making key decisions, but he
also serves as a role model, through his interaction with customers, his willingness to listen to his
employees, his active engagement in the company, and his informal demeanor. The “image” of an
effective and engaged leader is further communicated from customers and from employee to employee
to reinforce his role and his power over the company. The company’s creativity and willingness not to
follow industry rules is also a reflection of Neeleman’s entrepreneurial spirit.

Copyright © 2015 Pearson Education, Inc. 34


CHAPTER 2
THE GLOBAL AND CULTURAL CONTEXTS
_______________________________________________________________

Chapter Overview
This chapter considers the cultural context of leadership at the national, small-group, and organizational
levels. After defining culture, four models of national culture are presented: Hall’s high- and low-
context, Hofstede’s five dimensions, Trompenaars’s dimensions, and the Global Leadership and
Organizational Behavior Effectiveness (GLOBE) research. The impact of group culture in terms of
gender and diversity is considered, and the causes and solutions to leadership differences based on
gender and other small-group membership are presented. The concept of developing a cultural mindset
is presented to provide leaders and organizations as a way of managing diversity.

Chapter Objectives

OBJECTIVES THROUGH THROUGH FEATURES, THROUGH


BASIC TEXT TABLES, and FIGURES EXERCISES


Define culture and its three Table 2.1 Exercises 2.1
levels and explain the role it Figure 2.1 through 2.3
plays in leadership What do you do?
Leadership Challenge


Apply Hall’s model of national Figure 2.2
culture to leadership situations


Apply Hofstede’s model of Table 2.2
national culture to leadership Table 2.3
situations


Apply Trompenaar’s model of Figure 2.3
national culture to leadership
situations


Apply the GLOBE model of Figure 2.4
national culture to leadership Table 2.4
situations


Identify the impact of gender Table 2.5 Exercise 2.4
on leadership Leading Change: Deloitte Exercise 2.5
Supports All Its Employees Self-assessment
2.3


Address how leaders can Applying What You Learn: Using Self-assessment
develop a cultural mindset Culture to Be Effective 2.1
Figure 2.5 Self-assessment
2.2


Present the steps organizations Figure 2.6
can take to become more What do you do?
multicultural Leadership in Action: Leadership
Based on Ancient Principles

Copyright © 2015 Pearson Education, Inc. 35


Chapter Outline

The Leadership Question provides a starting point for discussing the role of culture.

1. Definitions and levels of culture

a. Definitions and characteristics

Culture consists of the commonly held values within a group of people and includes norms, customs,
values, and assumptions that guide behavior (Table 2.1).

b. Levels of culture

Three levels of culture are identified. These are: national, ethnic or other cultural groups within a nation,
and organization culture (Figure 2.1).

2. Models of national culture

a. Hall’s high-context and low-context cultural framework

Hall’s model is based on the communication context. Members of high-context cultures rely on context,
nonverbal cues, and situational factors to communicate. Those from low-context cultures focus on
explicit messages. Examples of each type of culture are provided (Figure 2.2).

b. Hofstede’s five cultural dimensions

Hofstede’s model of culture classifies cultures based on five dimensions (Table 2.1). Harry Triandis
further refined the model by adding the concept of tight and loose cultures, and the vertical and
horizontal dimension to individual—collectivism (Table 2.2).

c. Trompenaars’s dimensions of culture

Trompenaars’s model focuses on cross-cultural organizational cultures (Figure 2.3).

What do you do? The scenario illustrates the challenges of leading a multicultural team where
members have different values and priorities and different approaches to work resulting in conflict and
discord. Although some the conflict may be related to individual differences rather than culture as the
group members think, culture may play a role in how each member sets priorities and how each prefers
to work. Providing cross-cultural awareness is a starting point to allow the group members to assess
where the origins of the conflict may be and moving toward using the differences as a strength rather
than as a source of conflict. Becoming aware that people behave the way they do partly because of their
values and culture, rather than to be disagreeable or because they are wrong, can help most reasonable
people adjust their reactions and responses. Cultural awareness training can help group members learn
about national and group cultural differences in values and can be a positive step in resolving the
conflict. It may also be helpful to train the group on conflict resolution methods that can help them put
their cultural knowledge to work.

d. GLOBE: Global leadership and organizational behavior effectiveness research

The GLOBE research is the most current most extensive research on cultural dimensions and proposes
nice cultural values to help understand different cultures. The research suggests that culture impacts, but
does not predict, leadership behavior through people’s expectations—what GLOBE has labeled
culturally endorsed theory of leadership (CLT). It provides many refined dimensions to classify and
understand cultures: power distance, uncertainty avoidance, humane orientation, collectivism I—
Institutional, collectivism II—In group, assertiveness, gender-egalitarianism, future orientation, and
performance orientation.

Copyright © 2015 Pearson Education, Inc. 36


The GLOBE country clusters and their cultural values are presented in Figure 2.4. These values
indicate country cluster practices as they are.
GLOBE’s six CLTs are: charismatic and value-based, team-oriented, participative, humane-
oriented, autonomous, and self-protective. Table 2.4 summarizes the CLTs that indicate what each
country clusters thinks is ideal leadership.

Applying What You Learn: Using Culture to Be Effective outlines the key factors for managers to
build the culture of their organization. They include: clear definition of desired culture, sharing with
employees, adjusting the reward system, attention to details, and “walking the talk.”

3. Group culture: gender and diversity

Anecdotes of gender differences and similarities are presented are presented.

a. Current state of women in organizations

Summarizes the various statistics that point to gender inequality in the United States and in other
countries.

b. Causes of gender inequality

Suggested reasons for gender inequality in leadership and in organizations are summarized in Table 2.5.
Factors that are likely to contribute to inequality include: challenges in balancing work life, persistent
stereotypes, and discrimination. Other factors that are mentioned but not likely to be the cause are:
gender differences in style and effectiveness, commitment to work, and level of education.

Leading Change Deloitte supports all its employees: Deloitte, one of the Big Four accounting firms, is
taking steps to increase the diversity of its employees, who are 92% white. CEO Barry Salzberg has
made diversity a major strategic focus. The company has broadened its recruiting base and has
implemented a program called Mass Career Customization that provides all employees, not just women
and minorities, with an opportunity to develop their own career path based on their needs and work-life
balance. Deloitte has received much recognition for the program.

The Leadership Question Revisited points out that there are some universal leadership ideals as
indicated by the GLOBE research, whereas others are culture-specific. Integrity seems to be one of the
universal desired leadership characteristics.

4. Developing a cultural mindset

To address the challenges of managing a diverse organization successfully, leaders have to develop a
cultural mindset which is a way of thinking and an outlook where culture is taken into consideration in
deliberations, decisions, and behaviors, and organizations have to become more multicultural.

a. Characteristics of a cultural mindset

A cultural mindset is the basis for cultural competence since it focuses on how one thinks. Figure 2.5
presents the cognitive, behavioral, and skill-based elements of a cultural mindset which allows for the
adoption of a multicultural approach in organizations.

b. The multicultural organization

The key factors in becoming a multicultural organization are presented in Figure 2.6.

What do you do? The scenario presents a recruiting dilemma that many organizations face. When
looking for new employees, many organizations rely on existing employees to recommend people they
know. Although the practice appears logical because it allows organizations to hire people they know

Copyright © 2015 Pearson Education, Inc. 37


they can trust, it poses a challenge related to diversity. If the organization is not diverse, relying on
recommendations of employees will simply reinforce the lack of diversity because research shows that
most people trust and interact with those who are similar to them. To make an organization more diverse
and multicultural, leaders often have to use novel techniques for recruiting employees, as is illustrated in
several examples in the chapter.

5. Summary and conclusions

Review and Discussion Questions

1. What are the four models of culture, and how do they affect leadership?

The four models of culture are: Hall’s cultural context, Hofsted’s five cultural dimensions,
Trompernaars’s dimensions, and GLOBE. All models, in different ways, address cultural differences and
values that affect social and interpersonal interactions. As such, they all address differences in who
people consider leaders and what traits and behaviors they consider to be effective leadership. For
example, Hall addresses communication context differences. Leaders from high and low-context
cultures approach their followers differently. Similarly, Hofstede’s five dimensions all deal with cultural
values that may impact leadership. Trompenaars’s model and GLOBE were specifically developed to
address organizational and leadership settings.

2. How are the different models of culture similar? What unique contributions does each model
make?

All four models address key national cultural differences that affect people’s behavior. They all
therefore assume that culture has a potential to affect behavior. Hofstede is one of the most often cited
and oldest models of the role of culture in organizational settings. His five dimensions provide a clear
and concise way to comparing cultures. Trompenaars provides a clear focus on how national culture
may impact organizational settings. GLOBE is the most comprehensive model to date with extensive
research based in more than 60 countries. GLOBE and Hofstede share several cultural dimensions.
GLOBE, however, provides more precise research and finer differences among cultural groups. GLOBE
further provides detailed research about cultural values as they actually are and leadership ideals (CLT)
that show what people would like their ideal leaders to be.

3. How would the definitions of leaders and effectiveness differ based on the different cultural
values presented by Hofstede, Trompenaars, and the GLOBE findings?

Trompenaars’s research and GLOBE address this issue most directly. Trompenaars provides a model of
four cross-cultural organizational cultures that each includes a different type of leadership (Figure 2.3).
GLOBE outlines CLTs described in Table 2.4 and describes not only how leadership actually differs
based on cultural values within each country cluster, but how people within each culture have different
ideals of leadership.
4. How does group membership impact leaders and leadership?

In addition to national culture, a person’s cultural background includes various groups such as gender,
ethnicity, religion, or other groups. Each cultural group develops unique characteristics that have the
potential to affect leadership. For example, research about gender differences shows that there may be
persistent differences in how men and women lead. Similarly, even if the leader is not affected by his or
her group membership, others may perceive him or her differently based on such membership. For
example, women and minorities may not be as easily accepted as leaders or their competence may be
challenged.
5. What are the factors that contribute to the inequality of men and women in the workplace?
Table 2.5 summarizes the research on the suggested causes of gender inequality in leadership and in
organizations. The often cited causes include: gender differences in leadership and management style,
difficulty of balancing work and life, gender differences in commitment to work, gender differences in
education, stereotypes, and discrimination. Among these, challenges of balancing work and life,

Copyright © 2015 Pearson Education, Inc. 38


stereotypes, and discrimination have been shown to be the cause of gender inequality. Other factors
have not been supported by research. Women may have different leadership style, but the difference is
often having a more participative and transformation style, which has been shown to be more effective.
Although women do take time to have children, they more often than not come back to work. The
gender differences in education actually favor women with a larger majority of women earning
undergraduate and graduate degrees in many areas.

6. What are the elements of a cultural mindset?

A cultural mindset is a way of thinking and an outlook where culture is taken into consideration in
deliberations, decisions, and behaviors. It is the basis for cultural competence and cultural literacy,
concepts that are often used in organizations. A cultural mindset includes cognition—a way of thinking
(self-awareness, curiosity, including culture in problem-solving, adopting a multicultural lens), behavior
—the way people act (self-presentation, verbal and nonverbal cues, interaction, and addressing cultural
issues), and skills (interpersonal, communication, language) (see Figure 2.5).

7. How can organizations become more multicultural?

The starting point to successfully becoming multicultural is a leadership with a cultural mindset. Other
factors include: accountability, proper recruiting, having role-models, education and training, research
and measurement, setting the right policy, and generally monitoring and implementing a supportive
culture (Figure 2.6).

8. Why are leaders so important in that process?

As illustrated in many of the examples in the chapter, organizations where the leader has a commitment
to diversity are more often successful in becoming multicultural. Having a leader with a cultural
mindset is key because the leader not only makes the key decisions, but also role models desired
behaviors, sets the reward system, and shapes the culture of an organization. Without support from
leadership and without leaders who have a cultural mindset, organizations will have difficulty becoming
and remaining multicultural.

The Leadership Challenge: Juggling Cultures

The leadership challenge for this chapter focuses on the impact of culture. The dilemma for the leader is
to balance culture, organizational needs, fairness, and legal standards. Some of the issues that students
must consider before making their decision are:
 The Saudi culture. Saudi Arabia is a Muslim country where because of religious traditions and
requirements, women have practically no role in public life and business transactions. Women are
not only covered from head to toe when out in public, they are also often segregated from men.
Although these standards are not as strictly enforced on non-Muslim and Western women, they still
find their freedom highly restricted when traveling or living in Saudi Arabia. In addition to the
limited role of women, the Saudi culture is generally high-context, collectivistic, power and status-
oriented, ascriptive in that who you are is more important than your performance, and with a long-
term orientation. Students should be directed to do some research regarding the culture. Web sites
such as www.executiveplanet.com can provide a quick overview.
 Legal requirements. Depending on the country, there may be clear antidiscrimination laws
protecting women and minorities. For example, antidiscrimination and equal opportunity apply to
all U.S. companies, regardless of where they operate. Other Western countries do not have as
specific legal requirements regarding discrimination. The argument that Saudi culture does not
welcome women may therefore, in and of itself, not be legally defensible. Managers are required, at
the very minimum, to uphold the laws of the country in which they operate.
 Company interest. It is in the company’s best interest to have its best and most experienced
negotiator represent it. Sending an inexperienced person may be highly detrimental.

Copyright © 2015 Pearson Education, Inc. 39


 Fairness and equity. Regardless of legal requirements, standards of fairness and equity should
prevent discriminating against a person based on sex. Not sending in the female executive to Saudi
Arabia, simply because she is female and she may encounter problems, is not fair or equitable and
may set a bad precedence, as well as open up the company to legal action.

Given the complexity of these issues, a simple solution of is not likely to work. Sending the female
executive to Saudi Arabia may not be feasible, although many foreign women function well in those
environments. They are often treated as a “third gender,” neither male, nor quite female. Whether this
would work in this case depends on the existing relationship with the Saudi clients. Some possible
solutions may be:
 Holding negotiations in another country, such as the United Arab Emirates, Egypt, or
Lebanon, which are all close to Saudi Arabia but not as restrictive concerning the role of women
and may provide a comfortable compromise.
 Sending the female executive’s manager, if it is a male, along as the front person. She
could then provide “support” to her boss.
 Hiring a local or third-party negotiator that would report to and work with the female
executive.

Powerpoints slides provide additional information about a further addition to the Hofstede’s
concept of individualism—collectivism proposed by Harry Triandis. The concept of Vertical and
Horizontal individualism—collectivism refines the dimension by introducing the issue of hierarchy vs.
egalitarianism. Vertical cultures are hierarchy based, whereas horizontal ones are egalitarian.

Copyright © 2015 Pearson Education, Inc. 40


Chapter 2 Experiential Exercises

Exercise 2.1: World Map

I have used this exercise as an introductory ice breaker in most of my culture classes or lectures. It is
simple and quickly illustrates the power of one’s cultural lens.

Total Time: 5 to 20 minutes (5 minutes to draw the map; another 5 to review or longer if you have
students work in groups).

Materials Needed: Paper and pencil.

Instructor preparation: You will need to have a world map available either in hard copy or online to
show students when they have completed their task.

Instruct the students to draw the 7 continents, or as many as they can, on a sheet of paper.
When they are done, show them the world map you have prepared. Discuss the following:

1. How many continents did you place correctly?

You can use a 1 to14 scale for them to score themselves—1 point for getting the continent, another for
placing it correctly.
Most U.S. students have limited knowledge of geography and many are not able to place all
seven continents, some cannot name all seven.

2. Where did you start your map? What’s the first place you drew? What continent is in the
center? Why?

Most students start with their own continent/country and place it in the center of page. I often have non-
U.S. students and there are clear differences among them regarding where they start and what is in the
center, allowing for a simple demonstration. My students have primarily been from the Northern
hemisphere, so the occasional Australian or other student from the Southern part of the globe provides
an additional perspective.

3. What does your map tell you about your knowledge of the world?

The way students draw their map reflects how they see their world with their own continent/country at
the center. Because many cannot accurately draw the map, their lack of knowledge of the physical
geography is likely to be matched by a lack of cultural knowledge. The exercise demonstrates the
limited world view that many of us have.
I often have students who are expert world travelers, for example military personnel or expats.
They often perform better at this exercise further demonstrating how travel can help in gaining a world
view, at least to some extent.

Exercise 2.2: Proverbs as a Window to Leadership


This is a simple and engaging exercise that relies on proverbs to demonstrate cultural differences and
their implications for management. Students can be assigned to complete the exercise either in class or
outside of class and discuss their views in class. You can also ask students to propose their own
proverbs; this could be particularly interesting if you have a culturally diverse group.

Total time: 20 to 30 minutes (10 minutes to complete exercise, individual 10–20 minute discussions to
review implications for leadership).

Materials needed: Paper and pencil; board for discussion.

Copyright © 2015 Pearson Education, Inc. 41


Instructor “Cheat” Sheet
U.S. Proverbs Implications for Leadership
Actions speak louder than words. Low-context, action-oriented culture. Leaders are
expected to clearly role-model expected behaviors.
Strike while the iron is hot. Short-term orientation. Expectation of quick decisions and
actions.
Time is money. Short-term and achievement orientation.
God helps those who help themselves. Masculine and individualistic culture based on self-
reliance. Leaders and followers are expected to take
action.

Other Countries Implications for Leadership


One does not make the wind, but is Clear indication of “being” culture with focus on fatalism.
blown by it (Asian cultures). Leader will not be expected to be strongly action-oriented;
expectations of harmony with the environment.
Order is half of life (Germany). Importance of structure. Leader expected to focus on
clarifying task.
When spider webs unite, they can tie up a Collectivistic culture where group effort is valued. Leader
lion (Ethiopia). is expected to lead teams not focus on individuals.
We are all like well buckets, one goes up Fatalistic culture. Things happen outside the control of
and the other comes down (Mexico). people. Leader must go with the flow.
Sometimes you ride the horse; sometimes Fatalistic culture. Events happen and life is cyclical.
you carry the saddle (Iran). Leader must accept such an approach and go with the
flow.
We will be known forever by the tracks Importance of harmony and long-term thinking. Leader
we leave (Native American—Dakota). must guard reputation, consider long-term impact of
actions.
One finger cannot lift a pebble (Hopi). Collectivist culture where group actions are valued over
individual achievement. Leader must work with group to
perform.
For, no matter how concealed, force Cooperative culture based on consensus. Leader must not
begets resistance (Lakota). be autocratic and must build group consensus.

Discussion Points
The key to this exercise is to explore the differences without considering what is right or wrong.
Students must, however, be encouraged to explore their own cultural values and consider their
implications for assumptions and expectations of leaders. The cultural values that may be unconscious
can become obvious by becoming aware of the assumptions of other cultures.

What are the key assumptions in my culture that may guide what I expect of leaders and how they
should behave?
 How would such assumptions work or not work in other cultures?
 Which assumptions from other cultures would be hardest to work with? Why?

Overall: The proverb exercise is a simple and powerful introduction to revealing cultural assumptions
and their potential impact on leadership and to providing examples for the various cultural dimension
models discussed in the chapter. Being aware of the presence of cultural differences is the first step
toward cultural competence.

Copyright © 2015 Pearson Education, Inc. 42


Exercise 2.3: Narian Bridges

Narian Bridges is a very engaging cross-cultural role play designed to allow students to experience the
challenges of interacting with different cultures. Although no out-of-class preparation is needed for the
students, the instructor needs to decide on team assignments prior to class. You can expect considerable
frustration on the part of U.S. teams and lively discussion about how to deal with cross-cultural
differences and conflicting goals.

Total time: Minimum 60 minutes.

Materials needed: Access to 2 separate rooms (quiet hallway or sitting area) to allow for separate
planning for each cultural group.

Part 1: Background (Individual reading; 10 minutes)


Ask all students to read “Background” information on pp. 58–59.

Instructor’s preparation: The instructor needs to decide on team assignments prior to class. The only
restriction is that Mr. Dafti has to be male; all other roles can be assigned to either male or female
students. Selection of students to play Narian or U.S. roles can be made randomly or based on each
student’s personal characteristics. For example, students who show “typical” American characteristics,
such as assertiveness and directness, can be assigned to the U.S. team to emphasize those roles, or they
can be put in Narian teams to allow them to experience a different culture.
Both the Narian and U.S. team can function with just two members. Depending on class size, some
teams may have three members whereas others only two. Keeping the Narian and U.S. teams at no more
than three allows for all members to participate. Students assigned to teams larger than three are
unlikely to have the opportunity to role play.
For each role-play group, assign:
Narian Team U.S. Team
Mr. Dafti (male student) U.S. team leader
Naran Team member 1
Touran (optional) Team member 2 (optional)

Call students’ names and pair them up with their Narian and U.S. role play groups before you provide
further instructions. There is no restriction on the overall number of role play groups. Provide students
with role play instruction sheets appropriate for their role (see end of this chapter).

Part 2: Role Play (Preparation: 15 minutes; Role play: 15 to 20 minutes)

Preparation: Separate the Narian and U.S. teams by sending U.S. team to another room. Review
instructions on the role play sheets with Narian and U.S. teams separately, reminding each group about
basic role-play rules:
 Stay in the general guidelines provided by your role
 Improvise as needed while keeping goal in mind
 Practice role for a few minutes alone or with your team
 Provide rich role play so that others can respond to you
 Be as creative as you feel comfortable; some of the students will play roles more intensely than
others; differences are normal

In helping each group of students prepare for their roles while answering their questions, the instructor
can provide them with the following information.

Narian teams: The description of Narian culture matches that of a high power distance, feminine,
vertical collectivist culture with moderate uncertainty avoidance. The culture has many elements of
middle-eastern cultures. Students find the highly differentiated but equal gender roles both surprising
and comfortable. Issues that need to be emphasized in preparing students to role play Narians are:

Copyright © 2015 Pearson Education, Inc. 43


 Maintain good interpersonal relations in all situations
 Avoid open conflict and disagreement among yourselves and with U.S. teams
 Be very respectful and polite with one another and with U.S. team
 Appear confident, stick to your ground without being rude and confrontational
 Remember that you know the U.S. culture and language well
 Keep the social goal of the meeting in mind at all times; this is not a negotiation session

U.S. teams: Initially, the U.S. team members have an easier task because they are role-playing a culture
with which they are familiar. The U.S. culture is moderate-to-low power distance, masculine,
individualistic, and tolerant of uncertainty. Issues that need to be emphasized in preparing students to
role-play U.S. team members are:
 Remember that your goal is changing the contract and that your success depends on getting Dafti to
agree with the changes
 Appear confident and knowledgeable
 Rely on your relationship with the two Narian associates, Naran and Touran, and on your
information about Narian culture
 Remember that the Narians speak English well and are familiar with U.S. culture

Once both groups are prepared (approximately 15 minutes), invite the U.S. team back and inform them
that they have a maximum of 20 minutes for the role play. Each group of U.S. and Narian teams can sit
in clusters to start their interaction.

Part 3: Debriefing (Class discussion; 20–30 minutes)


The role-play is likely to cause much frustration for U.S. team members who will in most cases not
achieve their goals. The Narian members are likely to observe the pushiness of U.S. teams. Class
debriefing can start with allowing each role-play group to describe the interaction and the outcome
while students share their role-play instructions with their counterparts.
Discussion should include issues of goal differences, rudeness of one culture vs. the other’s
unwillingness to talk business, and potential solutions. Other discussion themes can include:
 Leadership differences. The Narians consider their leader to be the infallible head of their family.
There is strong loyalty and sense of respect. As a result, they will not disagree with their leader and will
not be co-opted by the U.S. team members even when their leader is “wrong.” Such views sharply differ
with those of the U.S. teams who have the “correct” solution and put the objective truth ahead of respect
for the leader.
 How to handle goal differences. All role-play groups are likely to have been frustrated because of
their divergent goals. Discussion of and solutions for how to handle such differences are often lively.
Many U.S. teams find a partial solution that satisfies the Narians by focusing on long-term
accomplishments.

Overall: The Narian Bridges is a powerful role-play that works even with students and instructors who
have limited experience at role play or cross-cultural situations. The issues at play tie in directly with the
cultural dimensions presented in the chapter.

Copyright © 2015 Pearson Education, Inc. 44


Exercise 2.4: Leadership and Gender

In the United States, as in many other, but not all, cultures, the images of leadership are closely tied to
typical male behaviors. For example, leaders and males are supposed to be aggressive, dominant, and
competitive. Females on the other hand are typically expected to be submissive, quiet, and cooperative.
The female gender roles are generally inconsistent with the traditional views of leadership.
Although some students are aware of the link between gender and leadership, many assume that
such links do not exist any longer. This exercise is designed to explore the relationship between gender
roles and leadership.

Total time: Minimum 30 minutes

Materials needed: Paper, pencil, use of board or flip chart.

Part 1: Assign groups and develop list (Group work; 10 to 15 minutes)


 Divide class into three groups; the composition can be random or based on existing groups
 Assign each group to develop a list of ten characteristics using the work sheet on p. 44 of the text
based on one of the three instructions provided at the end of chapter
 Allow each group 10–15 minutes to prepare their list
 Instruct them to be ready to make a brief 2–4 minute presentation to the class

Part 2: Presentation and discussion (In-class discussion; 10 to 15 minutes)


After the three groups have made their presentations, discussion should focus around:
 The relationship between leadership and the male and female gender roles
 Current changes in the definition of leadership and how they relate to gender roles
 Potential cross-cultural differences regarding views of both leadership and gender roles
In most cases, the majority of the traits and behaviors used to describe the male gender role are similar
to those used to describe leaders. Traditional female gender roles are typically not associated with
leadership. An interesting point of discussion is the similarity between many of the new leadership roles
of facilitator, motivator, and coach and the female gender role.

Overall: This relatively simple exercise can be a powerful demonstration of the strength of gender
stereotypes. Focus on the future and changes in our views of leadership allow for a view of the future
and the role of culture.

Copyright © 2015 Pearson Education, Inc. 45


Exercise 2.5: Is this Sexual Harassment?

Sexual harassment is considered a form of discrimination in the United States (although not in many
other countries). As such, it is one of the potential reasons why women do not achieve their full
potential in organizations. The exercise is designed to provide clarity regarding what sexual harassment
is. This is a sensitive topic and always engenders much heated discussion, sometimes some hostility.
Although students can be assigned to complete the exercise at home, classroom discussion, facilitated
by the instructor is essential to understanding the concept.

Total time: 5 to 10 minute per scenario

Materials needed: Paper, pencil, use of board or flip chart.

Procedure: You can assign a few or all of the scenarios. Each presents different cases, some clear and
some not so clear. Students can review the scenarios prior to class or during class, then be assigned to
small groups to further discuss them, before discussing them in class.

Scenarios
1. Clear quid-pro-quo situation involves grade in exchange for relationship. This is a simple and
undisputable case of sexual harassment with one person, in this case an instructor with power,
demanding a relationship from another with less power.
2. This is a case of harassment or “stalking” (as some students may call it). While clearly not
sanctioned by an organization and not involving a differential power, the unwanted attention of a sexual
nature, that makes the other person uncomfortable, can be considered harassment. This scenario
illustrates that harassment does not require a formal institutional setting, unequal power or quid-pro-
quo. Unwanted advances that make a person uncomfortable are considered harassment.
3. This is a case of sexual harassment. One person is the target of ridicule and unwanted action of
a sexual nature by co-workers. This case illustrates that men can also be the victim of harassment and
that there does not need to be a boss–employee relationship. In this case, co-workers are creating a
hostile work environment for Ricardo. Their actions should not be tolerated by the organization and they
provide Ricardo with a clear case of harassment.
4. While this case shows physical contact between a boss and an employee, it does not constitute
harassment. The physical contact is not unwelcome and is well accepted and understood by both parties.
A simple act of friendship, such as a hug, does not constitute harassment, unless it is unwelcome or
makes other people uncomfortable.
5. This is a complex situation that does not clearly involve harassment. Because the relationship
was consensual and both parties understood the challenges and consequences, it is not harassment. Two
employees engaged in a relationship that did not work out; both are uncomfortable with the aftermath;
one is complaining. Although their inability to work together is based on their past relationship, there is
no intentional or unintentional harassment. The organization can hold both of them responsible and
should take action to help solve the situation (e.g., move one or both to other departments or locations).
However, this situation is no different than two people simply not getting along based on various
personality differences. This scenario presents an example of why many organizations have a “no
dating” policy. Although such policies appear reasonable, they are difficult to enforce and maybe even
not reasonable considering how much time we all spend at work.
6. Although Nadine’s behavior may be somewhat sexual, neither she, nor her co-workers are
uncomfortable with their relationships. This does not constitute harassment. However, should other
people, for example people visiting the office, complain about the bantering, the situation may approach
a hostile environment.
7. Greece is a warm culture where physical contact between men is fully acceptable. Men often
walk hand-in-hand and embrace freely to express their friendship and affection. Such close physical
contact between men is uncomfortable and considered inappropriate in some other cultures. It is likely
that Nicholas was acting in accordance to his culture’s norms and not paying attention to U.S. norms.
While his actions made his co-workers uncomfortable, his intentions were most likely not what is
believed. This case illustrates the importance of being aware of basic cultural differences when
interacting with different cultures.

Copyright © 2015 Pearson Education, Inc. 46


8. This is a clear case of sexual harassment. Although the harassing behavior is not within an
organization and comes from “suppliers,” they are interfering with Kim’s ability to do her job and they
are creating a clear hostile work environment. Kim’s manager is responsible and liable to address the
issue with the construction company which is also both responsible and liable. The source of sexual
harassment can be internal (e.g., boss or co-workers) or external (e.g., customers, suppliers). In all
cases, when a hostile environment exists and one’s ability to work is affected, there is sexual harassment
and it must be addressed.
9. This is a clear case of sexual harassment from a customer. It is no different than the first case in
the series. The customer is pressuring an employee into a relationship with an implicit threat to
withdraw the contract. Gary is facing a hostile work environment through unwanted sexual attention
that interferes with his ability to get his job done. His manager must address the issue.

Other Key Points


Students may treat sexual harassment as a “joke.” They often see the victim as overly sensitive and not
tough enough to handle the “real world.” Such attitudes must be gently and firmly addressed.
Presenting a definition of sexual harassment may help:
Any action that creates a hostile work environment that interferes with accomplishing one’s job.
Managers and organizations must address the problem, and they are liable if they knew or should have
known, but took no action.
Some points to address during discussion:
 The majority of sexual harassment cases are against women, but men can be victims as well.
 Sexual harassment is about power, not sex.
 The standards set by the U.S. Supreme court are based on what a “reasonable person” would
find objectionable.
 Very few baseless cases of sexual harassment are filed.
 Victims of harassment, even when vindicated, often leave their organizations.
 Isolated cases of harassment if not addressed, can affect the culture of the organization.
 Implementing standards of collegiality, civility, and concern for others throughout the
organization can help create a positive culture.
 Training about sexual harassment (for example through scenarios such as these) can help
prevent its occurrence in many cases.

Overall: The scenarios are engaging and engender lively discussions. Instructors must be very careful
about monitoring their students and preventing the discussion to degenerate into sarcastic comments and
jokes and, in some cases, harassment of others who disagree. If the class does get out of control (it has
happened to me once), it can serve as a “teachable moment” to show the impact of a hostile
environment on expression of ideas and learning.

Copyright © 2015 Pearson Education, Inc. 47


Self-Assessment 2.1: What is Your Primary Cultural Background?

This self-assessment is designed to enhance students’ awareness of their own cultural background and
its potential influence on them. There are no right or wrong answers. It is a good assignment for students
to complete after reading the chapter and prior to coming to class for the discussion of culture. Because
many students come from multiple cultural backgrounds, they can be asked to identify their primary
background as well as others they believe are significant.

 Course Assignment
The self-assessment can be used as a course assignment asking students to apply the concepts they
learned in the chapter to analyze and understand their own cultural background. They could use any or
all the cultural values model and identify the values that they recognize and provide examples of each.
For example, a student with a Mexican background would address the importance of family and
community, the authority of male parents, recount stories they have heard that may reflect the
importance of community and respect of authority. They could also address to what extend they
personally rely on those values and how their own behavior may reflect them.
If students are from several different backgrounds, this self-assessment can help them identify
potential areas of agreement or conflict among the various cultural values they hold. In some cases,
students are keenly aware of the differences (e.g., traditional versus modern values; role of women, and
so forth). In other cases, this self-assessment may help them identify reasons why some of their values
are either very strong or less so.

Option: Students can be grouped during class and asked to compare their cultural backgrounds and how
they may influence their thinking and behavior. One alternative would be to create the teams based on
similar backgrounds.

Copyright © 2015 Pearson Education, Inc. 48


Self-Assessment 2.2: Do You Have a Cultural Mindset?

This self-assessment helps students evaluate the degree to which they have a cultural mindset. There are
no right or wrong answers. It should be assigned after reading the chapter, and preferably even after
class discussion, about the topic to assure that students have a solid understanding of the concepts
before completing the assignment.

 Course Assignment
Having an indication of the degree of cultural mindset can provide students a springboard for
identifying goals for change and improvement. They can be asked to review each of the questions on the
questionnaire and identify areas they may want to target for development. The assignment can serve as a
reflection and action plan to help students develop a stronger cultural mindset. The depth and richness
of their reflection, analysis, and action plan can be the basis for grading.

Copyright © 2015 Pearson Education, Inc. 49


Self-Assessment 2.3: Exploring Views of Women

The self-assessment can be assigned to be completed before or after class. It helps students explore their
personal views of women in various settings and helps them become aware of how such views may
impact them in the workplace. For example, although they may perceive women to have a right to work,
they also may believe that women’s primary responsibility is to their family. Such potential
contradictions can become the basis for self-awareness.

 Course Assignment
The self-assessments can be used to develop students’ self-awareness of their attitudes toward women
and begin to address what impact such attitudes may have in their work relationship or in their role as
leaders. Although one may expect male students to have more negative attitudes, female students may
also hold values about women that may prevent them from succeeding or from helping other women
succeed.

Copyright © 2015 Pearson Education, Inc. 50


Leadership in Action: Leadership Based on Ancient Principles

Case summary

The case presents the leadership and culture of the Tata group, India’s industrial conglomerate which
includes an informations system, steel, energy, consumer goods, and hospitality companies inside and
outside of India including Jaguar, Land Rover, and Daewoo Motors. The company is family-owned and run.
The leadership was recently transferred from Ratan Tata who led for 21 years to Cyrus Mistri. The strength
of the management of Tata came to light during the 2008 terrorist attack on one of the Tata-owned hotels in
Mumbai where employees selflessly helped trapped guests escape. The Tata group emphasizes cultural
diversity and aims at marrying Western capitalist principles with ancient traditions.

1. What are the characteristics of Tata’s leadership?

The Tata family and the company’s top leadership are Parsi’s who are related to Zorastrians, a religion that
dates back more the 2,500 years to ancient Persia. Zoroastrians are still practicing in parts of India and
modern Iran. Parsi cultural values include integrity, hospitality, humility, kindness, and selflessness. These
values are present in the leadership of Ratan Tata who is known for his humility, tolerance, and low-key, but
strong leadership.

2. To what extent do you think culture plays a role?

Within India, the Tata group heavily recruits from rural areas where people still hold the traditional values
that it emphasizes. However, a majority of the company’s business is outside of India. Therefore, Tata
focuses on cultural and global diversity as one of its strengths. The fact that India is a highly diverse culture
and the owner has strong cultural values both have influenced the emphasis on culture and diversity.

3. Can the management style be implemented elsewhere?

While the cultural values are unique, Tata has successfully married Western business practices and ancient
Indian principles. Many of the latter are consistent with current leadership theories such as those presented
in Chapter 6, particularly servant leadership and authentic leadership. Tata is not just an Indian company; it
is a global conglomerate. The principles it relies on have already worked in non-Indian cultures and
therefore are likely to be transferrable to non-Indian companies.

Copyright © 2015 Pearson Education, Inc. 51


Narian Bridges Role Play Instructions

Instructions for Mr. Dafti

Your culture focuses on harmony and respect for tradition and authority. You are taught from very early in
life that disagreeing with others is rude and a sign of selfishness. Differences in points of view are expressed
very gently and in an extremely roundabout way. As a result, business discussions are often veiled and
lengthy. Leaders and bosses do not discuss the details of business deals. Even major contracts operate on a
handshake from the leaders and there have been many conflicts with Western companies over the need to
draft precise legal contracts. Narians find this aspect of Western business insulting and accept it very
reluctantly.

You come from an old aristocratic Narian family with close ties to the monarchy. You have received your
higher education in Europe and Austria. As is the case with many wealthy Narians, you have traveled
extensively throughout the world and are very knowledgeable in the cultures and customs of European
countries. Your family spends a good deal of its time in Europe every year, and your two daughters are
currently going to college in France and Switzerland. However, you have less familiarity with the United
States, as you have only been there on two official trips.

Although you are aware of the importance of the United States to your country’s development, you are not
very fond of their presence in Nari. You would prefer working with Europeans whom you find more
cultured and more “civilized.” The King, however, would like closer ties with the United States and has
asked that U.S. companies be given every possible consideration. Americans seem to you to be rude, pushy,
and unruly and lacking proper respect for tradition and authority. Your dealings with U.S. companies have
led you to believe that their eagerness for contracts with your country often clashes with your culture and
way of life. However, the construction company you have been working with on the bridge project has, so
far, been easy to work with, and you have found the young engineer in charge of the project, whom you
have met once at a cocktail party, to be charming.

The bridge project is particularly interesting to you because one of the bridges that are planned is located
near a number of historical and religious sites and its placement and design need to be in harmony with the
environment. Therefore, you have personally made several key decisions regarding that one bridge. You are
aware that the U.S. construction company is not happy about your choices, but that does not concern you as
you believe that their role is to implement the wishes of your government. You have already made up your
mind based on the needs of your country. Naran and Touran have been instructed to carry out your wishes
and work on the details of the plans.

The head project U.S. engineer has asked for a meeting, and you are welcoming the opportunity to get to
know him/her better, particularly in light of your positive first impression and your two associates’
friendship with him/her.

During this meeting, your goal is to solidify the social relationship that is essential to a good business
relationship.

Copyright © 2015 Pearson Education, Inc. 52


Narian Bridges Role Play Instructions

Instructions for Naran and Touran

Your culture focuses on harmony and respect for tradition and authority. You are taught from very early in
life that disagreeing with others is rude and a sign of selfishness. Differences in points of view are expressed
very gently and in an extremely roundabout way. As a result, business discussions are often veiled and
lengthy. Leaders and bosses do not discuss the details of business deals. Even major contracts operate on a
handshake from the leaders and there have been many conflicts with Western companies over the need to
draft precise legal contracts. Narians find this aspect of Western business insulting and accept it very
reluctantly.

You are both from the higher levels of Narian society. You have traveled extensively around the world and
are both U.S.-educated with a BS in Engineering and a Masters in Business. Like many young Narians, you
find the excitement of the West, particularly the United States, appealing. You have many American and
other Western friends, and you enjoy the openness and relaxed interactions that you have with them. You
have a good relationship with the U.S. project head whom you have met on a number of work and social
occasions.

In spite of your interest in the West, you remain Narian at heart and you have no ambivalence about your
loyalties to your culture and country. The focus on harmony and civility in your culture remains a key focus
for you. Like all Narians, you have a strong respect for authority, particularly for Mr. Dafti who has been a
mentor for the two of you. You also know his family very well.

You are both aware of the potential problem with one of the bridges. The head U.S. engineer has mentioned
it to you. However, you have complete faith in Mr. Dafti’s skills as an engineer and a manager. You have
found the U.S. construction company’s insistence on change irritating and have interpreted it as a typical
sign of Western impatience and lack of knowledge of Nari. You have tried to explain the reasons to the U.S.
engineer without being rude, but you are not sure that you were able to get through. You are welcoming the
opportunity for Mr. Dafti to get to know the head project engineer in order to establish better relations. Your
role as Mr. Dafti’s associates is to hash out the finer details later.

During this meeting, your goal is to solidify the social relationship that is essential to a good business
relationship. You also want to avoid any potential conflict that may jeopardize Mr. Dafti’s trust of the new
U.S. associates.

Copyright © 2015 Pearson Education, Inc. 53


Narian Bridges Role Play Instructions

Instructions for the head U.S. engineer

The Narian Bridge Project is key to your company’s success. Although your company has done a lot of
business all over the world, this is the first time it has been able to win a contract in Nari by beating several
European firms in what appeared to be a secret, very confusing negotiation process. You are still not sure
why you were awarded the contract, but are confident that you can perform.

You have been with your company for eight years. As a result of your focus on international management in
your MBA, your excellent technical skills, your outstanding performance, and your interest in foreign
assignments, you have been put in charge of the key Narian project. You have already spent three successful
years overseas, six months of which were spent in another middle-eastern country. You have been in Nari
for two months and have very much enjoyed your stay. The culture is very warm and you have made friends
with many young Western educated Narians who seem to share many of your values. You have even been
trying to recruit several of them to leave Nari to join your firm, but have so far been unsuccessful.

You have instructions from your company to finalize the details of the bridges. Particularly, you need to
change the design on one of the bridges. Although you have not had the opportunity to go to the site, your
team has. Their analysis, and you agree with it, clearly shows that the location selected for one of the
bridges and the design that has been proposed is unworkable. You are proposing to move the location by
only three miles and build a much simpler and more functional bridge. Unless you can change the design,
you will not be able to complete the project.

Your associates have also been in Nari for more than six months. Like you, they speak a few words of
Narian and have found the culture to be welcoming. Their background is more technical and they have the
expertise to evaluate and change the design more than you, whereas you have expertise in international
negotiations.

You are very optimistic about being able to achieve your goal of reaching a clear final agreement. You have
had the contracts with the final changes drafted by your lawyers and reviewed by a Narian attorney. You
have them ready for Mr. Dafti. You have met Mr. Dafti once before and found him to be charming. You are
close friends with his two associates and, given their background, education, and your conversations with
them, you know that they are aware of the location problem. Although you have not been able to get a clear
commitment from them, you think that they will support you. You were granted the meeting with Mr. Dafti
within days of requesting it. You are ready to do some business!

Your goal is to obtain final agreements as soon as possible, including changes in design of that one bridge,
and succeed in this contract in the hope of continued cooperation.

Copyright © 2015 Pearson Education, Inc. 54


Narian Bridges Role Play Instructions

Instructions for the U.S. team members

The Narian Bridge Project is key to your company’s success. Although your company has done a lot of
business all over the world, this is the first time it has been able to win a contract in Nari by beating several
European firms in what appeared to be a secret, very confusing negotiation process. You are still not sure
why you were awarded the contract, but are confident that you can perform.

You each have been with your company for more than five years. As a result of your excellent technical
skills, your outstanding performance, and your interest in foreign assignments, you have already been
assigned to several foreign countries as technical advisors on a variety of projects. You both tend to spend a
limited time in each country, but you have gained considerably successful experiences. Nari has been one of
your longer assignments. You have been here for more than six months and have picked up some of the
language. You have found the culture to be welcoming. You have made friends with many young Western
educated Narians who seem to share many of your values.

Your role has been to hash out the technical details, and, in that capacity, you have worked with several
Narian engineers and have met Naran and Touran on many occasions. Your analysis clearly shows that the
location selected for one of the bridges and the design that has been proposed are unworkable. You have
proposed to move the location by only three miles and build a much simpler and more functional bridge.
Unless you can change the design, you will not be able to complete the project. Your attempts at discussing
the problem with your Narian counterparts have not been successful. You hope that the new head U.S.
engineer can negotiate the change during an upcoming meeting with Mr. Dafti.

During this meeting, your goal is to support the head U.S. engineer to obtain final agreements as soon as
possible, including changes in design of that one bridge and succeed in this contract in the hope of
continued cooperation.

Copyright © 2015 Pearson Education, Inc. 55


Instructions for LEADERSHIP AND GENDER

Male gender roles

Your team’s task is to list the typical personality traits and behaviors associated with the male gender
roles in the United States.

Be prepared to present your list to the class.

You have 15 minutes.


------------------------------------------------------------------------------------------------------------------------
Instructions for LEADERSHIP AND GENDER

Female gender roles

Your team’s task is to list the typical personality traits and behaviors associated with the female gender
roles in the United States.

Be prepared to present your list to the class.

You have 15 minutes.


---------------------------------------------------------------------------------------------------------------------------
Instructions for LEADERSHIP AND GENDER

Characteristics of leaders

Your team’s task is to list the typical personality traits and behaviors associated with traditional leaders
in the United States.

Be prepared to present your list to the class.

You have 15 minutes.

Copyright © 2015 Pearson Education, Inc. 56


CHAPTER 3
THE FOUNDATIONS OF MODERN LEADERSHIP
__________________________________________________________________________

Chapter Overview

This chapter presents an overview of the history of the field of leadership by dividing it into the three
eras of trait, behavior, and contingency. It also reviews the early theories of leadership with a focus on
contingency models that constitute the foundation of modern leadership. The following models are
considered: Fiedler’s Contingency model, the Normative Decision model, Path-goal theory, attributional
models, substitutes for leadership, and Leader-Member Exchange.

Chapter Objectives

OBJECTIVES THROUGH THROUGH FEATURES, THROUGH


BASIC TEXT TABLES, and FIGURES EXERCISES
Identify the three major
eras in the study of  Leadership in Action: the
Caring Dictator
Table 3.7
Exercise 3.1
leadership and their
contribution to modern
leadership
Present and be able to
evaluate the contributions 
of the early theories of
leadership including the
following:
Fiedler’s
Model
Contingency
 Table 3.1
Figure 3.1
Self-assessment 3.1
and 3.2
Table 3.2
Applying What You Learn
The Normative Decision
Model  Table 3.3
Table 3.4
Exercise 3.2

Figure 3.2
Path-Goal Theory
 Leading change: Jim
Goodnight of SAS
Substitutes for Leadership
 Table 3.5

Leader-Member Exchange
 Figure 3.3
Table 3.6
Self-assessment 3.3

Leadership Challenge: The in-


group applicant

Chapter Outline
The Leadership Question presents the age-old leadership questions about whether leaders are born or
made and what may be some key characteristics of leaders.

1. A History of Modern Leadership Theory: Three Eras


a. The trait era: Late 1800s to mid 1940s

A review of the methods and results of the early scientific approach to leadership focused on identifying
leadership traits is presented. The results of more than 50 years of research indicate that, although some
traits are correlated with leadership, no trait or combination of traits can be used to identify leaders.

Copyright © 2015 Pearson Education, Inc. 57


b. The behavior era: Mid 1940s to early 1970s
The behavior approach to leadership with its focus on measuring leadership behaviors is presented. The
results of the Ohio State research yielded the Leader Behavior Description Questionnaire are detailed.

c. The contingency era: Early 1960s to present

Elements of the currently dominant contingency approach to leadership are presented. They include:
 There is no one best way to lead.
 The situation and the various relevant contextual factors will help determine which style or
behavior is most effective.
 People can learn to become good leaders.
 Leadership makes a difference in the effectiveness of groups and organizations.
 Both the personal and situational characteristics affect leadership effectiveness.

2. Early Theories

a. Fiedler’s Contingency Model

i. Leader’s style
The Least Preferred Co-Worker scale (LPC) is presented as the measure of leader style in the
contingency model (Table 3.1).
Task-motivated/low LPC individuals are described as being primarily motivated by task
accomplishment.
Relationship-motivated/high LPC individuals are described as primarily motivated by good
interpersonal relationships.
The socio-independent/middle LPC individuals are described as generally being unconcerned
with others’ opinions.

ii. Situational control


Leader-member relations is the first and most important element of situational control in the
contingency model. It is defined as the overall level of trust and cohesion in the group. Without
good relations, the leader’s ability to act is seriously affected.
Task structure, which is the second element of situational control, refers to the degree to which
the task has clear goals, a clear answer, the number of possible solutions, and the availability of
feedback.
Position power is the least influential element of situational control and refers to the leader’s
ability to hire and fire and reward subordinates.
Putting it together: Situational control. The three elements described in this section are
combined to provide an indicator of the amount of control the leader has over the situation.

iii. Predictions of the model


The contingency model predicts that different leadership styles will be effective in different
levels of situational control. The task- and relationship-motivated leaders act differently in
different situations (Table 3.2). In high- and low-control situations, the task-motivated leader
groups perform best, whereas in moderate control, the relationship-motivated leader groups
perform well (Figure 3.1).

iv. Evaluation and applications


Critiques and support for the contingency model are presented.

Applying What You Learn: Putting the Contingency Model to Work presents the Leader Match
Concept which is the training method based on the contingency model. The focus is on learning to
recognize the various elements of situational control and on adapting the situation to match the leader’s
style. Fiedler assumes that the leader’s style is stable and not easily changeable; however leadership

Copyright © 2015 Pearson Education, Inc. 58


situations can change either randomly or as a result of the leader’s actions. The leader’s efforts should
be to adapt the situations to fit his/her style.

b. The Normative Decision Model


The Normative Decision Model focuses on decision making, assumes that the leaders can change
his or her style, and is concerned with decision quality as the criterion for effectiveness.

i. Leader’s decision styles


This section provides a description of the major leader decision styles and sub-styles used in
the normative decision model (Table 3.3). They range from autocratic, to consultative, to group
decision making.

ii. Contingency variables: Defining the problem


The quality of the decision and follower acceptance are the two situation variables in the
normative decision model. The questions and decision rules that are used to understand the
leadership situation are discussed (Table 3.4).

iii. The Normative Decision model’s predictions


The normative decision model is presented (Figure 3.2). The leader should make decisions
alone when there is no time, he or she has all the information that is needed, the leader has
support from the group, or followers cannot agree among themselves on a course of action. In
other situations, the leader should rely on participation to varying degrees.

iv. Evaluation and application


Critiques and support for the normative decision model are presented. The model has a narrow
focus on decision making, but has been well supported and has broad application to real-life
leadership decision making. The focus is on teaching the leader to understanding the leadership
situation.

c. Path-Goal Theory

i.The framework
The path-goal theory of leadership is presented with focus on the role of the leader to clear
paths for subordinates to accomplish goals. The exchange between the leader and followers
centers around this obstacle removal role and the exchange of guidance or support from the
leader for performance and satisfaction from followers.
The two central hypotheses of the model are discussed. These are: when the task is
structured, the leader’s supportive behavior leads to follower satisfaction, whereas when the
task is ambiguous, the leader’s structuring behavior leads to satisfaction.

ii. Evaluation and application


Lack of consistent research findings is suggested to be one of the major limitations of path-goal
theory. However, the model’s focus on followers’ perception of the task and the role of the
leader as obstacle remover provide interesting areas of applications.

Leading Change Jim Goodnight of SAS has built a company based on long-term thinking and taking
care of employees and customers. He believes that the company needs to remove day-to-day challenges
to allow employees to do their job. He sees the role of the leader as the facilitator of the creative
process.

d. Substitutes for leadership


The leadership substitutes model is presented (Table 3.5).

i. Evaluation and applications


The need for more extensive testing of the model and its components is suggested to be one of
the major limitations of the substitutes model. However, the model can be very useful in the

Copyright © 2015 Pearson Education, Inc. 59


current environment of self-managed teams and empowerment where the leader may
intentionally use the model’s findings to set up organizational and team substitutes to replace
the traditional leadership functions.

What do you do? presents the case of a new manager whose team members perform well, but do not
seem to rely on the manager. It is a textbook case for the Substitute for Leadership theory. The
employees are experienced, work away from the office, and perform well. All are factors that provide
leadership substitutes. Although the tendency of many managers would be to push for more contact, this
may be a good case of “not messing with success.” You should establish one-on-one connections and
establish trust to assure that team members know them can rely on you and on one another, and then
focus on strategic issues and on supporting the team members.

e. Leader-Member Exchange

i. The Framework
The LMX model (vertical dyad linkage) is presented with the focus on the impact of existence
of in-groups and out-groups on organizational performance and leadership effectiveness
(Figure 3.3). The three stages of development of the relationship between leaders and followers
are described (Table 3.6).
The effect of culture on in-group membership is presented. In many cultures in-group
membership is assumed to be based on performance. In collectivistic cultures such Malaysia
and many middle-eastern countries, in-group membership tends to be based on family and clan
membership.

ii. Evaluation and Application


The model’s lack of clarity regarding the factors that lead to the development of an out- vs. in-
group relationship and the scarcity of research regarding the impact of in- and out-groups on
organizations are presented as its major limitations.
The strength of the model is in its intuitive appeal and its potential use for making in- and
out-groups effective. Particularly, the use of in-groups can be highly beneficial when
membership is fluid and based on performance rather than personal factors.
Examples of the danger of selecting in-group members who are highly homogeneous are
presented with focus on top-level executive teams. This homogeneity can be partially blamed
for the recent lack of performance of many large U.S. businesses

Leadership Question Revisited clarifies the research findings that leaders are not born and that
leadership is much more than a collection of traits. Leaders are made from experience and from the
interaction of individual traits with contextual factors.

3. Summary and Conclusions

Table 3.7 provides a comparison of the models presented in this chapter.

Review and Discussion Questions

1. What are the similarities and differences between the trait and behavior approaches to
leadership?

Both the trait and the behavior approaches are looking for simple explanations of what defines
leadership and leadership effectiveness. Both approaches are focused on the leader. The trait approach
seeks to identify leader traits that differentiate between leaders and followers and that allow for
identification of who is an effective leader. Although the research identified some traits, it was generally
not successful in identifying one or a set of trait that define leaders.
The behavior approach is also focused on the leader, but considers behaviors rather than traits.
The advantage of behaviors is that they are more easily observed and measured and can be taught. The

Copyright © 2015 Pearson Education, Inc. 60


behavior approach identified two broad categories of behaviors, task-structuring and relationship-
consideration, as the two primary leadership behaviors. However, as was the case in the trait research, it
was not clear which set of behaviors is associated with effective leadership.

2. What are the major assumptions of the contingency approach to leadership?

The contingency approach to leadership states that understanding leadership requires consideration of
both the leader and the leadership situation. There is no single best way to lead and what makes a leader
effective depends on the characteristics of the leadership situation. For leaders to be effective they need
to match the situation either by having different traits, using different behaviors, or by changing the
situation.

3. Define the leadership and situation factors included in Fiedler’s Contingency Model. What are
the primary predictions of the model?

The leader characteristic in Fiedler’s model is the style of the leader, either task- or relationship-
orientation as measured by the Least Preferred Co-Worker scale. The leader’s style indicates his/her
primary motivation and cannot be changed.
The situational characteristics are, in order of importance: the leader-member relations, the task
structure, and the position power of the leader. They are combined into situational control which
indicates the degree to which leaders have control over the leadership situation.
The model states that leadership effectiveness is a function of the match between leader’s style
and situational control. Leaders who are task-motivated are most effective when they have either high or
low control. Leaders who are relationship-motivated are most effective when they have moderate
control. Because leaders cannot change their style, nor should they according to Fiedler, they must learn
to change the situation to fit their style.

4. After assessing your own style, interview several people with whom you worked to determine
whether their perception match your score based on the LPC.

Students should focus on asking about how they behave under stress and in different situations rather
than ask others to fill out the LPC scale for them.

5. Provide examples for the situations in which each of the major decision styles of the Normative
Decision Model would be appropriate.

Autocratic styles are most effective when the leader has high expertise, little time, and the group is
supportive and likely to agree with the leader’s decision. Furthermore, if followers cannot agree on a
solution or course of action, the leader can use an autocratic style of decision making.
Consultation should be used when followers’ support is essential in accomplishing the goal,
there is time to consult, followers can agree on a solution, or when the leader does not have the
necessary information or expertise.
Group decision making should be used when there is time and followers work well together
and can agree on a decision.

6. Provide examples of how the Path-Goal Theory of leadership can be used to improve
leadership effectiveness.

The role of the leader according to Path-Goal is to remove obstacles that block the followers’ path to
accomplishing goals. If the goal is unclear, the leader needs to provide structure. If the task is
uninteresting and boring, the leader needs to be considerate. The leader must understand the needs of
followers and what motivates them.

7. How does the LMX Model differ from all the other contingency theories of leadership?

Copyright © 2015 Pearson Education, Inc. 61


The LMX proposes that leadership is not a group phenomenon, but rather it is a relationship between a
leader and individual followers. The focus therefore should be on the dyad not the group. LMX does not
fully consider the situation; however, it assumes that the leadership situation is different for each
follower.

8. What are the positive and negative impacts of substitutes on leaders and organizations? Provide
examples.

Substitutes for leadership can be used to improve the effectiveness of the leader and to free his/her time
for other tasks. Substitutes can be very positive if followers are able to do much of their tasks without
close supervision, or if the group provides sources of support and motivation. In the most positive
situation, substitutes can empower followers to do their job without having to constantly rely on their
leader.
In the most negative situation, substitutes can undermine the leaders’ ability to lead and guide
followers. If the group acts against accomplishment of goals, if the organization does not provide the
leader with enough power or resources to influence the group, if there is so much physical distance and
little contact to maintain close group cohesion, the leader will lose his/her ability to influence the group.

9. How can leaders use the LMX Model in improving their effectiveness?

The relationship with followers is a natural part of leadership as is the formation of in- and out-groups.
These can be used productively by assuring that membership in the in-group is fluid and based on
performance. Leaders should actively seek out new members and have different in-groups for different
situations and tasks. They also should avoid highly differentiated groups where the out-group members
feel highly disadvantaged compared to those who are in the in-group. Leaders should also be mindful of
the role of culture when forming in-groups.

10. Compare and contrast the contingency models of leadership. How do they each contribute to
our understanding of leadership?

Comparison of the Early Contingency Models of Leadership


Leader Follower Task Other Effectiveness
Characteristic Characteristic Factors Criteria
Fiedler’s LPC based on Group Task Position Group
Model motivation; not cohesion structure power performance
changeable
Normative Decision-making Group Available Agreement Quality of the
Decision style; can be cohesion information with goals decision
Model changed Time
Path-Goal Leader behavior; Individual Clarity and Follower
Theory can be changed follower need routineness satisfaction
to grow of task and
motivation
Substitutes Leader behavior; Group Clarity of Organization Need for
can be changed cohesion task; culture, leader
availability structure, and
of processes
information
LMX Quality of
relationship
with follower

Leadership Challenge
This challenge is related to the role of culture in determining in-group membership. India is a
collectivist culture where people are close to their family and clan members and trust them implicitly

Copyright © 2015 Pearson Education, Inc. 62


while also distrusting outsiders. Objective performance measures are less important than the ability to
trust family members. There are also no formal laws against nepotism.
In such circumstances, the office manager is behaving in good faith and trying to help his boss.
Although it is possible that he is just trying to find a job for an incompetent relative, it is more likely
that he would like to look good in front of the new boss, find a good assistant, and also help a relative.
He has a lot to lose from recommending someone who is not competent and the relative has a lot to lose
if he does not perform well.
The most prudent course of action is not to reject the “cousin” outright. Give him careful
consideration, interview him, test him out. You also should show appreciation to the office manager for
his initiative. If the cousin is a good fit, it’s an easy hire. If he is not a good fit, it is fine to seek out other
candidates without accusing the office manager of anything negative.
In a country where community is important and people tend to be polite and less direct
especially in the work place, it is important to tread lightly and make sure everyone saves face while
also assuring that you hire someone who can do the job.

Copyright © 2015 Pearson Education, Inc. 63


Chapter 3 Experiential Exercises

Exercise 3.1: The Toy Factory


This exercise uses the making of origami toy wolves as a setting to demonstrate the effect of the three
major leadership behaviors of autocratic, democratic, and laissez faire. Groups of students are assigned
a leader who has instructions to act in one of the three ways. The groups then compete for the
production of toys. The exercise is lengthy, but well worth the time. Issues of productivity, quality, and
satisfaction of leader and followers under different leadership behaviors can be discussed.
The different options in assignment of students (described below) can lead to a very effective
demonstration for both leaders and followers
.
Total time: Minimum 75 minutes

Materials needed: Paper, ruler, pencil/pen, and scissors.

Part 1: Preparation and leader training (10–15 minutes)


Instructor preparation:
 The instructor needs to become familiar with the steps in making the origami wolves (see instruction
sheet) before class. He/she also needs to either ask students to bring their own paper or provide 20–
30 sheets for each group.
 Group students in 6 teams of 4–6 (larger teams can be used in large classes), and select team leaders.
Making the assignments before class allows the instructor to select certain individuals with
particular styles and tendencies. For example, a student who has shown strong controlling and
domineering tendencies can be selected to act as an authoritarian leader or as a democratic leader.
Assigning him/her to either a comfortable or an opposite style yields different results and different
experiences for both the team leader and the followers.
 If the class is small, laissez-faire style can be skipped using only democratic and autocratic leaders.
 One or two students can be selected to assist the instructor in training the leaders, in quality control,
and as observers.

Leader training:
 The exercise starts with the instructor training the selected team leaders either before class or at the
beginning of class. The leaders have to be trained in wolf-making without their group being present.
Leaders can be trained by demonstrating wolf-making, sharing written instructions with team
leaders, and allowing them to make a practice toy with the instructor.
 Provide each team leader with their Leader Style instruction sheet.
 Remind them that the Leader Style instructions are confidential and that they should not share them
with their team or with other team leaders.
 Remind leaders that they should not provide their team members with the written instructions for toy
making, but rather, that they should train them on how to make the toys. This step forces the leader
to interact with followers rather than simply handing out the written instructions.

Part 2: Toy production (25–30 minutes)


Instructor needs to explain the purpose of the exercise as follows:
The goal of this exercise is to make as many high quality toy wolves as you can in a 15 minute
period. Your team leader has been trained in the skill of origami wolf-making and will provide
you with instructions. You have 5 minutes to set up your teams and 15 minutes to produce the
wolves.

The production run ends after 15 minutes. Instructor and assistant(s) check quality and count production
of each group.

Part 3: Debriefing and discussion (25–30 minutes)


Instruct team members to complete the Toy Factory worksheet on p. 43.

Copyright © 2015 Pearson Education, Inc. 64


Start discussion by asking each team, in a round-robin fashion to 1) describe their leader’s behavior and
style, 2) express their level of satisfaction, and 3) suggest improvements.

Ask each team leader to describe their style and express their views. Focus class discussion around
issues of differences among the leader behaviors and styles and their effect on subordinates’ satisfaction,
productivity, and quality.

In most cases, the exercise demonstrates, as research findings suggest, that:


 Followers of democratic leaders are more satisfied
 Teams led by autocratic leaders produce more
 Teams led by laissez-faire leaders are frustrated and are neither productive nor satisfied
If team leaders were assigned to styles that were “incongruent” with their personal style, they often
express frustration and difficulty in implementing the required styles. In that case, discussion of the
possibility of changing one’s leadership style can be undertaken.
Concepts of contingency leadership can also be introduced or discussed by analyzing the
leadership situation (short-term outcome, time pressure, no worry about follower satisfaction) and
analyzing why one style may work better than others.

Overall: The exercise provides a vivid demonstration of the different leader behaviors and potentially of
the difficulty and challenge leaders face when they attempt to change their behaviors.

Copyright © 2015 Pearson Education, Inc. 65


Exercise 3.2: Using the Normative Decision Model
The scenarios in this exercise are designed to demonstrate the various situations described in the
normative decision model. The questions following each scenario walk students through the problem
identification questions prescribed by Vroom and Yetton (see Table 3.4). The exercise works equally
well as an individual assignment after students have read Chapter 3 or as a group exercise to
demonstrate how to use the model.

Scenario Solutions

Centralizing Purchasing
1. What type of problem is it?

Group problem; decision will affect all purchasing managers.

2. Problem identification questions:


 Is there a quality requirement?

Yes; some decisions regarding both process and outcome are clearly better than others.

 Does the leader have enough information to make a high-quality decision?

Maybe, although individual managers may have other information that, at this point, is not available to
the manager.

 Is the problem clear and structured?

Yes; cost reduction and economies of scales are needed

 Is employee acceptance of the decision needed for its implementation?

Yes; acceptance and buy in of all individual managers are absolutely key.

 Would subordinates accept the decision if the leader makes it alone?

No; managers are used to independence and autonomy, they can drag their feet forever and sabotage any
decision they don’t agree with.

 Do subordinates share the organization’s goals for the problem?

Probably yes; the organization’s overall efficiency is at stake.

 Is there conflict among subordinates (are they cohesive) regarding the problem?

Probably yes; the larger facilities would like more autonomy than others.

3. Which decision rules apply?

The leader does not have all the information (AI is eliminated).
Subordinates have enough information and expertise and quality is important (CII and GII are
acceptable).
Quality is important, leader lacks information, problem is somewhat unstructured, and interaction
among subordinates is important (AI, AII, and CI are eliminated).
Subordinate buy-in is essential (AI, AII, and CI are eliminated).
Buy-in is important and subordinates are likely to disagree over solution; interaction among them is
encouraged (AI, AII, and CI are eliminated).

Copyright © 2015 Pearson Education, Inc. 66


Quality and buy-in are both important.
Acceptance is important but not guaranteed and subordinates share the goal of the organization (AI, AII,
CI, and CII are eliminated).

4. What are the acceptable decision styles?

GII, which applies to group decision and requires involvement of the group in decision making, is the
acceptable decision style. With some management of process and egos, CII may also be an option,
especially if managers cannot agree on a solution after extensive discussions.

Why?

The subordinates (managers in this case) have power and information and share in the organization’s
goals. Their expertise and buy-in are key to a successful decision.

5. What are unacceptable decision styles?

AI, AII, CI which apply to group decision, but involve leader making the decision alone, are not
acceptable.

Why?

The managers can easily sabotage the outcome through various direct and indirect means. The potential
change in the purchasing process affects their autonomy and constitutes a major change for them. Such
a change cannot succeed without their buy in.

Selecting the Interns


1. What type of problem is it?

Individual decision

2. Problem identification questions:


 Is there a quality requirement?

Yes; it is important to have good interns.

 Does the leader have enough information to make a high-quality decision?

Yes; the leader and the assistant know the job requirements and the candidates.

 Is the problem clear and structured?

Yes; the job is simple.

 Is employee acceptance of the decision needed for its implementation?

Not really; acceptance is likely to happen anyway.

 Would subordinates accept the decision if the leader makes it alone?

Yes; previous interns have been good and the position is temporary.

 Do subordinates share the organization’s goals for the problem?

Yes.

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 Is there conflict among subordinates (are they cohesive) regarding the problem?

No.

3. Which decision rules apply?

The leader and assistant have all the information.


Subordinate, in this case the assistant, has all the necessary information and expertise.
Subordinate has the same goal as the leader and the organization.
Subordinate buy-in is likely regardless of decision.
There is no conflict among the subordinates; only one person is really involved.
Quality is important and buy-in guaranteed.
Acceptance is important and very likely.

4. What are the acceptable decision styles?

All styles are acceptable in this case. AI and AII are more efficient ways of making the decision. DI is
probably the best style.

Why?

The assistant has all the information and the expertise. Delegation of the decision would free up the
leader’s time and provide a growth opportunity for the assistant while guaranteeing a quality decision.

5. What are unacceptable decision styles?

There really are no unacceptable styles, although group decision in this case would be unnecessary, and
inefficient.

Moving to a New Location


1. What type of problem is it?

Group problem; decision will affect all employees.

2. Problem identification questions:


 Is there a quality requirement?

No; both locations are equally acceptable.

 Does the leader have enough information to make a high-quality decision?

Yes; there are reports available.

 Is the problem clear and structured?

Yes; the two possible decisions are equally attractive.

 Is employee acceptance of the decision needed for its implementation?

Not really; the leader has the power to make the decision.

 Would subordinates accept the decision if the leader makes it alone?

Yes, although there may be some initial unhappiness.

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 Do subordinates share the organization’s goals for the problem?

Probably yes; the overcrowding problem is recognized and a solution is desired.

 Is there conflict among subordinates (are they cohesive) regarding the problem?

Yes; there is no agreement as to who should stay and who should move; there are also individual
differences within departments.

3. Which decision rules apply?

The leader has all the information and the expertise.


The subordinates are not likely to have all the information from all the departments.
Although there is agreement on the overall goal, there are differences on who should move.
Quality is not a central issue and the leader has information.
Subordinate buy-in is not required.
There is disagreement over the solution.
Quality is not a central factor and buy-in will follow.
Acceptance is desired and likely to happen given eventual outcome.

4. What are the acceptable decision styles?

AI, AII, CI are likely to be the best styles in this case. The leader needs to make a final decision.

Why?

The leader has all the necessary information and expertise; there is a genuine time pressure,
subordinates are not likely to agree on one solution although they will accept the leader’s decision. CI
may not be viable given the time pressure.

5. What are unacceptable decision styles?

CII and GII are not desirable.

Why?

Group decision making is inappropriate given that subordinates conflict on the desired outcome and
given the time pressure to make a quick decision.

Copyright © 2015 Pearson Education, Inc. 69


Self-Assessment 3.1: Determining Your LPC
This self-assessment is the LPC scale that students can use to determine their task or relationship-
motivation within the contingency model. It is beneficial for students to have completed the scale prior
to the lecture on the contingency model. However, they need precise instructions on how to fill out the
scale. These should mention:
 Select your LPC carefully; if you have several people in mind, select the one with whom you had the
most difficulty working.
 Select an LPC who is a real person; don’t make up an imaginary one.
 Your LPC has to be someone with whom you have worked on a task; it could be a work or social
situation.
 You may or may not like your LPC as well as not being able to work with them
 Rank your selected person based on your own perception; do not to worry about how he/she may
appear to others.

These instructions are important to assure that students complete the scale properly.
The score is interpreted as follows:
 If your score is 73 or above, you are a relationship-motivated (high-LPC) person.
 If your score is 64 or below, you are a task-motivated (low-LPC) person.
 If your score is between 65 and 72, you are a socio-independent (middle-LPC) person.

Relationship-motivated/high LPC
The students sometimes have trouble making the jump from describing another person to describing
their own style. It helps to point out to them that their perception and description of their LPC is a
reflection of their motivational preferences.

Copyright © 2015 Pearson Education, Inc. 70


Self-Assessment 3.2: Assessing a Leadership Situation
The three scales in this self-assessment measure leader member relations, task structure, and position
power. The students can use them to determine the level of situational control they face as a leader. The
scale can be used either before or after the lecture on the contingency model. Students who have no or
limited work experience should be encouraged to use a school work group, sports team, or community
or church group where they have been the leader as the basis for their self-assessment. This self-
assessment works well as a simple individual task to help students understand their leadership style and
the importance of situational contingencies in leadership effectiveness.
 It is important to remind students that the leader’s perception is important
 Check on student’s rating for the task structure scale to assure that they complete Part II correctly

Option: The self-assessment can be used as the basis for a group exercise. Students’ self-assessment can
be used as the basis of class discussion about the various aspects of the contingency model.

Total time: Minimum 35 minutes in class (15 minutes for completing self-assessment, 20 minutes for
group discussion); depends on the number of teams (5 minutes per team)

Materials needed: Paper and pencil; board or flip chart can be useful.

Step 1: Individual Description (Individual work; 10 minutes)


Assign the self-assessment to students preferably before class as a homework assignment or during
class. As noted above, it is most effective prior to the discussion about the contingency model.

Step 2: Group Discussion (Group work; 20 minutes)


The group portion of this exercise should be done after the discussion of the contingency model.
Students should have a good understanding of the model’s assumptions and predictions in order to
analyze each member’s leadership style, situational control, and the issue of fit.
The goal of this portion is to allow students a critical look at the contingency model. In some
cases, and for some students, the model predicts leadership effectiveness well. In other cases, the model
does not fit well. The focus of the discussion should not be to either propose the contingency model as
the “cure-all,” or to discard it if it does not fit. Instead, the instructor should encourage students to use
the model as a tool to understand their leadership situation and their style. Particularly, students can
discuss:
 What important components of each member’s leadership situation were (i.e., was having good
relations with subordinates more important than the leader’s power? What caused the most stress?
etc.)
 What factors made the effective situations effective and what made the ineffective ones difficult?
 Could each leader have behaved differently? Why or why not?

Step 3: Group Presentations (5 minutes per team)


Ask each group to prepare a brief 5-minute presentation that outlines:
1. What they have learned.
2. What they find most useful about the contingency approach.
3. What other information is lacking from the model that might have helped them.

Overall: This exercise, used as an individual assessment or as a group exercise can provide a hands-on
conclusion to the presentation of the contingency model. Given the complexities of the model, such
applied focus is very helpful to most students. In some cases, the situations described by the students do
not support the predictions of the model. I have used those situations as a springboard to presenting
other leadership theories such as the normative decision model, the LMX, or transformational
leadership, pointing out that no one theory or model will fit all situations.

Copyright © 2015 Pearson Education, Inc. 71


 Course Assignment
This self-assessment can be used as an assignment for the course. Students would complete the self-
assessment and provide an analysis of their own style and the situations in which they were effective
and ineffective.

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Self-Assessment 3.3: Identifying Your In-Group and Out-Group
This exercise looks at LMX and the impact of in-groups and out-groups from the leader’s point of view.
This self-assessment tends to be more appropriate and effective for students who have managed
subordinates. For those students, this self-assessment can be a helpful developmental tool to use to
understand the extent to which they use in- and out-groups and their potential impact on their followers
and co-workers. This assessment should be completed after students have a good understanding of the
LMX concept.

Overall: Students tend to find this assessment to be very informative. Although most have in- and out-
groups, few are aware of their impact or even think much about how membership is determined.

 Course Assignment
This exercise can be used as an assignment for the course. The students would be asked to record their
in-group and out-group as described by the exercise and provide a written analysis of the benefits and
disadvantages along with a plan for future action.

Copyright © 2015 Pearson Education, Inc. 73


Leadership in Action

The Caring Dictator

Case summary
The case of Jack Hartnett is an excellent illustration of contingency leadership concepts. Hartnett owns
54 restaurant franchises with outstanding financial performance. Additionally, his turnover and training
costs are lower than the industry average. Hartnett runs his organization as a benevolent dictator. He
demands loyalty and obedience and he takes a personal interest in the personal lives of his managers and
employees. The organization does not implement any of the current management methods and is, in
many ways, an anachronism. Nevertheless, it is very effective and successful.

1. How would you describe Jack Hartnett’s leadership style?

Jack Hartnett is a highly authoritarian leader who tolerates very little dissent. He does not allow for
participation and demands loyalty and obedience from his employees. Although he is highly
authoritarian, he also shows a high degree of care and concern about the lives of his employees. He does
not hesitate to get involved in their personal problems. He runs his organizations like a traditional,
patriarchal family where the father figure is both benevolent and the unquestioned leader.

2. Why is he successful? Would you work for him?

The success of Hartnett’s organization illustrates the concept of contingency leadership. Although his
style of leadership may appear to be outdated, it works for his organization and for the restaurant
franchise business. It is important to note that D. L. Rodgers Corporation is a small business.
Additionally, the restaurant franchise business requires tight financial control and a strong focus on
standardization and short-term results in order to be financially viable. Hartnett’s style fits the industry
and the culture he has created. Additionally, through careful recruiting and selection of employees, he
assures the continuation of the culture he has created. He picks people who can work with him and in
the organizational culture he has created. The key factor is the fit between the leader and the
organization.
Whether students decide if they would like to work for Hartnett or not is greatly dependent on
their personality and individual values. These topics are discussed in the next chapter. The Hartnett case
can be revisited after discussion of individual differences.

Copyright © 2015 Pearson Education, Inc. 74


Wolf-Making Instructions

1. Fold up one corner 2. Cut off top and 3. Fold to the left
of rectangular paper to Discard
make a square

4. Fold one flap up 5. Turn over 6. Fold other flap up

7. Rotate 45 8. Fold ends to center 9. Separate flaps


degrees

10. Fold center 11. Draw in eyes 12 Fold tail up and


point down ears forward

Copyright © 2015 Pearson Education, Inc. 75


Leader Style Instructions for TOY FACTORY

Democratic and participative

As the team leader, you are required to be open and participative. Consult with your team members, ask
for their input, treat them as equals, and encourage them to participate and provide suggestions.
Remember not to share these instructions or the written wolf-making instructions with your team
members.
----------------------------------------------------------------------------------------------------------------

Leader Style Instructions for TOY FACTORY

Autocratic and decisive

As team leader, you are the expert on this task. Provide the team members with directions and tell them
what you expect of them. There is not much time for participation and suggestions. Focus on the task
and get going.
Remember not to share these instructions or the written wolf-making instructions with your team
members.
----------------------------------------------------------------------------------------------------------------

Leader Style Instructions for TOY FACTORY

Laissez-faire

As the team leader, simply provide instructions on how to make the toys and then leave your team alone
to produce the items. Try to limit your contact with them and do not provide them with too many
instructions. Let them do their job.
Remember not to share these instructions or the written wolf-making instructions with your team
members.

Copyright © 2015 Pearson Education, Inc. 76


CHAPTER 4
INDIVIDUAL DIFFERENCES AND TRAITS
______________________________________________________________________________

Chapter Overview

This chapter discusses the role that individual differences and traits play in leadership. Individual differences
discussed include demographic factors, values, abilities (including intelligence and emotional intelligence) and
skills, and several personality traits including the Big Five, locus of control, Type A, self-monitoring,
Machiavellianism, and narcissistic personality. The chapter discusses how individual difference characteristics
provide limits to leaders’ behavior and ability and ease of learning new behaviors and styles. The focus is to view
individual difference characteristics as a self-assessment and developmental tools for identifying strengths and
weaknesses.

Chapter Objectives

OBJECTIVES THROUGH THROUGH FEATURES, THROUGH EXERCISES


BASIC TEXT TABLES, and FIGURES
Explain
elements and impact
the
 Figure 4.1 and 4.2 Exercise 4.1

of individual Leadership in Action: Zhang


difference Xin
characteristics in
leadership
Discuss the role
demographic  Table 4.1

characteristics play
in leadership.
Identify the impact
of values on  Self-assessment 4.1

leadership.
Present
relationship between
the
 Table 4.2
Table 4.3
Self-assessment 4.2

abilities and skills


and leadership
including emotional
intelligence and
creativity
Highlight the role of
the key personality 
traits relevant to
leadership. Big Five
and other
personality traits in
leadership

The Big Five


 Table 4.4

The proactive Figure 4.3 Self-assessment 4.3


personality
Type A Figure 4.4 Self-assessment 4.4
Leading Change

Copyright © 2015 Pearson Education, Inc. 77


Self-monitoring Self-assessment 4.5

The dark triad Table 4.5 Self-assessment 4.6


Figure 4.5
Applying What You Learn:
Dealing with Narcissistic and
Abusive Bosses
Be able to use Leadership Challenge: Using
individual Psychological Testing
characteristics
appropriately

Chapter Outline

The Leadership Question focuses on some personal characteristics that impact leadership.

1. Elements and impact of individual difference characteristics

A framework for understanding individual difference characteristics is presented where the effect of both heredity
and environment are emphasized. The major individual characteristics of personality, values, and abilities and
skills are defined. The combined role of individual differences and the situation are clarified by proposing a model
that defines behavioral zones of comfort and discomfort (Figure 4.1).

a. A discussion of dynamic nature of personality and the role and importance of the situation and
context is presented.

Individual characteristics play the strongest role in determining behavior when the situation does not
provide clear guidelines. They also set limits and create a behavioral range, rather than dictate behaviors
(Figure 4.2).

2. The Demographic Characteristics of Leaders

Research indicates that in spite of women and minorities entering the workforce in record numbers, the
strong majority of U.S. leaders are still male and white and forms a homogeneous group. This
homogeneity may provide some constraints in creativity.

3. Values

a. National culture and values

After defining values as long lasting beliefs about what is worthwhile and desirable, the impact of
culture on values is discussed. Cultural values introduced in Chapter 2 are used to explain cross-cultural
differences in value systems.

b. Generational differences in values

The role of age and generational differences are presented (Table 4.1). The different view of ethics as a
value is discussed.

c. Values and ethics

Ethics is one of the values that has strong impact on leadership. The relativist and universalist views of
ethics are presented and cultural differences in ethics are considered.

4. Abilities and skills

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The role of intelligence and technical, interpersonal, and cognitive skills are discussed.

a. Intelligence

The research on the link between intelligence and leadership is presented. Although intelligence and
leadership are generally found to be related, the relationship is complex and moderated by many
different factors.

b. Practical and emotional intelligence

Although cognitive ability is important, practical intelligence addresses the skills people use to solve
everyday challenges. Emotional intelligence which includes ability to relate to others (Table 4.2) may
have greater impact on leadership effectiveness.

c. Creativity

The four characteristics of creative people presented and their potential importance to leadership is
discussed. They include: Perseverance in the face of obstacles, willingness to take risks, willingness to
grow and openness to new experiences, and tolerance for ambiguity.

3. Skills

As leaders move up in their organization, they require more interpersonal and conceptual skills and less
technical skills (Table 4.3).

6. Personality traits that contribute to leadership

The interest in the role of traits has been revived, with research by Kirkpatrick and Locke in 1991 that
identified personal characteristics that are preconditions for rather than determinants of effective
leadership. These are: Drive, desire to lead, honesty, self-confidence, intelligence, and knowledge of the
business.

The rest of the chapter presents various other personality traits that may impact how leaders lead.

What do you do? The employee’s behavior may be as much a function of her personality as they are a
function of her environment. She has some of the preconditions for being a good leader including drive,
desire to lead, and knowledge of the business. However, working with others is also essential to
effectiveness as a leader or followers. Getting a strong performer on the team is always a good
opportunity. However, her potential weaknesses are likely to detract from her performance. Pointing that
out to her is the path to getting her to moderate or change her behaviors. It also may be that being in a
new environment will show a different side of her. In either case, you need to monitor the situation and
address issues that may arise objectively, quickly and consistently.

a. The Big Five personality dimensions

The Big Five personality dimensions, which have been found to be consistent components of
personality, are described (Table 4.4). Although none are strong predictors of leadership,
conscientiousness and extraversion have the strongest links to work-related behaviors.

b. Proactive personality

Proactive individuals take control to influence events in their lives and attribute things that happen to
them to their own efforts and abilities. The focus is on changing the environment rather than being
constrained by it. They tend to be more satisfied with their life and their work and be more

Copyright © 2015 Pearson Education, Inc. 79


entrepreneurial. All of these characteristics are likely to help those in leadership positions by allowing
leaders to focus on action and achieving goals (Figure 4.3).

c. Type A

Type A behavior pattern and its core element of need for control are described, and the research about
work-related behaviors is presented (Figure 4.4). Specifically, the Type A’s time urgency,
competitiveness, polyphasic behaviors, and hostility and their related behavior of poor delegation,
preference for working alone, action-orientation, high perception of stress, and harder work are
discussed.

Leading Change The case presents Jeffrey Katzenberg, co-founder of Dream Works Animation SKG
which has produced hits such as Monsters vs. Aliens and Shrek. It traces his early days as a demanding,
angry, and often unreasonable executive at Disney who pushed his employees beyond their limits.
Katzenberg, who was very publicly fired from Disney in 1994, has slowly evolved into a somewhat
calmer and more balanced person who is aware of his effect on followers and focuses on cultivating
them.

d. Self-monitoring

Self-monitoring refers to the degree to which people are capable of reading and using environmental
and social cues. This ability to perceive and evaluate situations correctly is suggested to be key to
leadership effectiveness.

e. The dark triad

The dark triad refers to a combination of three socially malevolent characteristics and behaviors that
include Machiavellianism, subclinical narcissism, and subclinical psychopathy, all described in Table
4.5. All three entail malevolent, self-promoting, disagreeable, emotionally cold and duplicitous
characteristics. Leaders with these characteristics get ahead without establishing connections with others
but by being manipulative and ruthless. (Figure 4.5)

Applying What You Learn: Dealing with Abusive Bosses provides advice on how to manage and
survive abusive leaders through careful documentation, keeping a cool head, and knowing when to
leave the situation.

Leadership Question Revisited emphasizes that no one trait or even a set of traits determines who will
lead and be effective. Because some characteristics are important and others may prevent effectiveness,
leaders need to be aware of their own traits, strengths, and weaknesses.

7. Using individual characteristics

This section focuses on the importance of self-awareness and the judicious use of individual
characteristics in identifying and training leaders. While various characteristics have links to leadership,
they are not appropriate for personnel decisions and should rather be used as developmental tools.

8. Summary and conclusions

Review and Discussion Questions


1. What is the impact of individual characteristics on behavior?

Individual characteristics include demographic, physical, psychological and behavioral factors that
make an individual unique. Although all of these can impact leadership, they are by no means the
strongest determinant of leadership effectiveness. The collection of many different individual
characteristics help determine what makes a person unique. They further provide a range within which

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people are comfortable. Behaviors that are closest to who a person is are easy to learn and comfortable.
Those that are far from the core of who we are, are hard to learn and perform; they are outside our
comfort zone.

2. How do values affect behavior, and what impact does culture have on our value system?

Values are long-lasting beliefs about what is worthwhile, right, and desirable. They have a strong impact
on our behavior. Values are strongly influenced by culture at all levels. National culture impacts whether
we value individuals or groups, focus on performance, consider time to be an asset, how important we
think directness is, and to what extent we emphasize honesty and integrity. Any of these factors can
impact a person’s leadership style. Furthermore, generational differences impact our value system and
focus. Therefore, awareness of one’s value system is an important part of leader development.

3. How do new approaches to leadership traits differ from those presented earlier?

The earlier approaches to leadership traits focused on identifying one or more traits that determined who
will be an effective leader. The more current approaches recognize the importance of individual
characteristics and propose a set of traits that are preconditions for effective leadership, but no required.
They include: Drive, desire to lead, honesty, self-confidence, intelligence, and knowledge of the
business.

4. What role do demographic factors play in leadership?

Demographic factors have not been found to have a direct impact on leadership. However, research
shows that the leaders of U.S. organizations share many characteristics and the group is generally highly
homogeneous. In one study, they were all male, majority first-born, in their late 50s, right-handed, taller
than average with graduate degrees. The fact that the leadership of organizations as a group is highly
homogeneous may be cause of concern when considering that it may prevent creativity and diverse
viewpoints.

5. How do emotional intelligence and general intelligence impact leadership?

Many of the components that define traditional intelligence, such as cognitive ability, ability to integrate
information, analyze problems, and so forth are related to leadership to some extent. However, research
does not indicate a strong relationship between traditional intelligence (IQ) and leadership. In some
cases, being too intelligent may impede effective leadership. However, other types of intelligence,
particularly emotional intelligence (EQ) have been found to have links to leadership effectiveness. EQ
consists of: self-awareness, self-regulations, self-motivation, empathy for others, and interpersonal and
social skills. Because EQ is more focused on people than traditional intelligence, it has a closer link to
leadership.

6. What role does creativity play in leadership?

The ability to think in new ways, think outside the box, and see problems from new and novel
perspectives are all important to leadership in today’s turbulent environment. Characteristics associated
with creativity include: perseverance in the face of obstacles, willingness to take risks, willingness to
grow, openness to new experiences, and tolerance for ambiguity. \

7. Describe the six personal traits and their implications for leadership.

No single individual trait defines leaders or leadership effectiveness. However, understanding


personality traits and being aware of their impact on leadership style is an important part of leader
development.

The Big Five personality dimensions have been found to be key components of personality. They are:
conscientiousness, extraversion/introversion, openness to experience, emotional stability, and

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agreeableness. A number of these traits have links to work-related behaviors; however, in spite of their
centrality to personality, they are not strongly related to leadership or leadership effectiveness.
Proactivity is an indicator of an individual’s sense of control over the environment and events.
Proactive people take action to change their environment rather than simply take events as they happen.
They are more satisfied with their life and their work. People who are proactive are likely to be more
action-oriented as leaders.
Type A individuals have a strong need for control and are trying to do more in less and less
time. The four characteristics of Type As are: time urgency, competitiveness, polyphasic behavior, and
hostility. The intense go-getter behavior of Type As stems from their need for control and impact their
leadership style. Although little evidence supports that Type A leaders are more effective or perform
better, they do set higher goals, work harder, and perceive more stress. Further, the trait impacts leaders’
ability to delegate, work in teams, and do careful and thoughtful planning.
Self-monitoring is an indicator of the extent to which people can read cues from others and the
environment and adjust their behaviors to the perceived situational requirements. High self-monitors are
chameleon-like and can adapt to many situations. Some research suggests that this openness to
experience and ability to adjust may be critical to leadership.
The dark triad describes a set of three malevolent and anti-social traits that are characterized
by manipulation, lack of empathy, and self-promotion. Although some of the traits, particularly some
degree of narcissism, may be associated with leadership or help some individuals with these traits get
ahead, people who have these traits are not able to establish the sincere connection with followers that is
at the heart of effective leadership. In your opinion (or based on your experience), do certain
characteristics have a greater impact on a person’s leadership style? Explain your answer.

8. What are the limitations of the personality approach presented in this chapter, and how should
the information about personal characteristics be used in leadership?

The information about individual characteristics should not be used for the selection or evaluation of
leaders. However, it is an excellent source of knowledge that can help in development. Although many
of the measures are robust and well developed, they are not intended for use in organizational or
leadership settings and should be used with caution in such settings, if at all.

9. After completing the personality self-assessment survey at the end of this chapter, consider
your personal profile. What is the impact of this profile on your leadership style?

The Leadership Challenge: Using Psychological Testing


The leadership challenge asks students to think about the use of psychological testing as a selection tool.
The key point is to reinforce the idea that psychological testing is not a reliable tool for managerial
decision making regarding selection and promotion of employees. They should instead be used as a
means of self-development. Factors students should consider:
 Depending on which tests are used and how they are administered, psychological tests of
personality can vary in the degree of reliability and validity. Although organizations use some tests
that are well developed, valid, and reliable, they also often use tests that do not satisfy these criteria.
In addition, even with well-developed tests, the link between personality and work-related
behaviors and performance is not well established and, in the case of management decisions, not
full defensible if challenged.
 Because of these, psychological tests should be used with caution. Their primary and safest use
is for development rather than selection or promotion. In this case, the test may be used to help the
team become aware of the strengths and weaknesses of its members and as a springboard for team
building.
o It is key to consider whether all the characteristics listed in the scenario are required for being a
good team player. Particularly are assertiveness and competitiveness highly desirable
characteristics for a team member. Although these characteristics may typically be important
for those in sales and marketing, they may not be necessary, and may even be detrimental for a
research team where cooperation and ability to compromise are key.

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o While individual characteristics are one factor that a leader must consider when selecting
followers and team members, issues of diversity should also be part of the criteria. Building
diversity is a social and managerial consideration that must be balanced with other needs.

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Chapter 4 Exercises

Exercise 4.1: Your Ideal Organization


This exercise allows students to experience the impact of personality on various organizational factors
first hand. It is most effective if Part I is assigned outside of class, prior to the students’ either reading
the chapter or completing the self-assessment at the end of the chapter. Part II can be completed after the
students have taken the self-assessments. Discussion can then focus on why student preferences are
different. This exercise is very effective as an opener to the personality lecture.

Total time: Minimum 30 minutes in class; an additional 15 minutes required if Part I is assigned in
class

Materials needed: Paper and pencil; board or flip chart can be useful.

Part I: Individual Description (Individual work; 10–15 minutes)


Assign students to complete Part I of this exercise prior to class and prior to reading the chapter or doing
the self-assessments. Instruct them to focus on what they would like to see in their ideal organization
rather than what they think is possible.

Part II: Group Work (Group activity; 30–40 minutes)


The instructor needs to form groups based on the students’ similar scores on the various personality
constructs. Depending on class size and composition, you may be able to represent all constructs. For
example, you could have a group of Type As and a group of Type Bs; a high- and a low-Mach group; an
ST and an NF group, and so on.
The constructs that work best are Type A, MBTI, and Mach. Locus of control can also be
effective; self-monitoring does not lead to interesting discussions.
After the groups are assigned, ask each to focus on the similarities of their answers (inside the
group) and draw up a brief description of their group’s ideal organization using the questions in Part I.
Each group then presents their ideal organization to the class.

Discussion items include the effect of personality on:


 Our world and organizational views
 Leadership styles and expectations
 Control, delegation, and structure
 The overall culture and climate of an organization
In most cases, the groups differ significantly on their organizational preferences. For example, Type A
groups create organizations that provide the leader control; structures are often centralized, whereas
issues of control are not as central to Type Bs. High-Mach organizations reflect the group’s suspicion of
others. The ST groups’ organizations focus on data, objectivity, and order, whereas the NFs are open and
flexible with strong focus on interpersonal relations.

Overall: With some luck and the right personality mix in the classroom, this exercise can provide a
vivid example of the impact of personality on organizations. As an introduction to the topic, it can be
used to help students understand the individual differences by tying them to a personal experience.

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Self-Assessment 4.1 to 4.6
The self-assessments should be assigned to be completed prior to class. Students having their score
on each of the scales allows for a much richer learning environment.
The instructor should take special care in the discussion of EQ, locus of control,
Machiavellianism, and narcissism. Students may be upset if their EQ score is low. Similarly, external
locus of control often carries negative connotations, as does both being a high or low Mach and high
narcissisms. Type A and self-monitoring do not present the same challenge as there is no strong
negative connotation associated with either end of the scale.
It is important to stress that these self-assessments are meant to develop a student’s self-
awareness. The EQ, proactive, Type A, and narcissism scales in this chapter have not been
scientifically tested and validated. They provide students with a general description of their
behaviors and preferences.

 Course Assignment
All the self-assessments in this chapter can be used to develop students’ self-awareness of their
personal characteristics. Students can be asked to describe and analyze each of the characteristics
measured in the self-assessments with a focus on identifying resulting strengths and weaknesses.
Students should be reminded that the changing personality is not the goal, rather understanding
should be their focus. By developing increasing self-awareness, they can build on their strengths and
compensate for their weaknesses.

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Leadership in Action

Zhang Xin: The Humble Chinese Billionaire

Case summary
Zhang Xin ranks fifth on the list of the world’s self-made female Chinese billionaires. She was raised by
educated parents who suffered persecution during the Mao’s revolution. Through her intelligence and hard
work, she was education in the United Kingdom and eventually started work for Goldman Sachs where,
although successful, she did not feel she fit in with the hyper-competitive environment. She returned to China,
married an entrepreneur, and together they founded Soho China, the largest commercial real estate company
in the country. In spite of her considerable wealth, she remains frugal and humble. She has been recognized
for her creativity.

1. What are Zhang’s key personal characteristics? How do they each contribute to her success?

Zhang is a proactive individual who does not let the situation constrain her progress. She has achieved her
success in spite of difficult circumstances and because of her hard work and perseverance. Her humility and
her tenacity have been key to her success.

2. What role does culture play in who she is?

Zhang’s family background, both her parent’s high level of education, and the hardships they experienced
during China’s revolution have continued to impact her outlook and behaviors. The hard work and humility
are key Chinese cultural values as is her desire to contribute to the good of her community.

Copyright © 2015 Pearson Education, Inc. 86


CHAPTER 5
POWER
_______________________________________________________________________
Chapter Overview
The chapter presents power as a tool that leaders need to use to influence their subordinates. The definition,
sources, and consequences of power are presented. The traditional sources of individual power are
described, along with power sources that depend on the organizational structure and the sources of power
for top executives. The elements of power for teams and team leaders are discussed. The causes,
consequences, and solutions to power corruption and abuse are presented along with the current views of
power. The concept of empowerment is discussed as a new approach to leaders’ power. The chapter has a
strong cross-cultural flavor with many examples of how power is perceived and used differently in
different cultures.

Chapter Objectives
OBJECTIVES THROUGH THROUGH FEATURES, THROUGH EXERCISES
BASIC TEXT TABLES, and FIGURES
Define power,
consequences, and
its
its  Figure 5.1
Figure 5.2
Exercise 5.1

cultural roots Leadership Challenge: how


much is enough
Apply the different sources
of individual and team  Table 5.1
Figure 5.3
Exercise 5.2
Self-assessment 5.1
power to achieve goals Table 5.2 Self-assessment 5.2
Figure 5.4
Table 5.3
Applying What You Learn:
Managing Power when You
Are a New Manager
Explain the sources and
process of power abuse,  Table 5.4
Figure 5.5
corruption, and destructive Table 5.5
leadership and how to Leadership in Action: The
prevent them last CEO of Lehman
Brothers
Analyze the changes in use
of power and the  Table 5.6
What do you do?
Self-assessment 5.3

development of Leading Change: Sharing


empowerment, and explain power and reaping profits
their consequences for
leadership

Chapter Outline

The Leadership Question Power is essential to leadership; but it can also be abused. How can leaders
use power to get things done without becoming autocratic or abusive?

1. Definition and consequences

Power is the ability of one person to influence another person. Authority is power vested in a position.

a. Consequences of using power

Commitment, compliance, and resistance are discussed as the three possible follower reactions to a leader’s use of
power. (Figure 5.1)

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b. Distribution of power

The concentration and distribution of power in organizations is discussed as source of effectiveness.

c. Power and culture

Power distribution and culture: The impact of power on culture is discussed (Figure 5.2). Hofstede’s
concept of power distance and tolerance for diversity and Trompernaars’ cultural organizational model
are used to explain cross-cultural difference in power. On the one hand, the Chinese, Mexican, French,
Italian, and German cultures all attribute considerably more power to their leaders than do U.S.
subordinates. On the other hand, Swedes have little need for hierarchy and authority and as a result can
function easily in leaderless team environments.

2. Sources of power

a. Sources of power related to individuals

Sources and consequences: French and Raven’s five sources of individual power are described (Table
5.1) and potential reactions to the use of each source by a leader are discussed (Figure 5.3). The sources
are: legitimate, reward, coercive, expert, and referent power. Whereas the first three depend on the
organization and are more likely to lead to either compliance or resistance, the last two depend on the
individual and are more likely to lead to follower commitment.

Using Individual sources of power: Power and influence are compared, and influence tactics and their
consequences are discussed. Research outlining the effect of influence tactics available to leaders is
summarized, (Table 5.2) and the work of Kotter on career stages and use of different power sources is
presented. In early career stages, leaders develop a base of power by building broad networks and
establishing credibility through their expertise and demonstration of competence. In middle career
stages, the challenge is to use power wisely and ethically, whereas in later stages the issue becomes
letting go gracefully (Figure 5.4).

b. Sources of power for teams

The sources of power stemming from organizational structures are presented. These sources are
suggested to be key to teams, and team leaders’ ability to achieve their goals (Table 5.3).

Coping with uncertainty: The first structural source of power for teams is their ability to help others
cope with uncertainty through obtaining information that they need, through preventing uncertainty by
predicting and forecasting events, and through absorption of uncertainty by preventing change from
affecting other parts of the organization.

Centrality: The second source of power for teams is the degree to which the team’s activities are key
and central to the overall mission and goals of the organization.

Dependability and substitutability: The third source of team power is the extent to which the team’s
expertise is needed by others.

Applying What You Learn: Managing Power When You Are a New Manager presents guidelines
for establishing and using power well when a person moves to a supervisory level. The focus is on
relying on broad sources of power, particularly on the personal one, using followers’ knowledge and
feedback, and setting boundaries.

c. Special power sources of top executives

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The sources of power of CEOs are described. These include: distribution of rewards and resources,
control of decision criteria, and centrality in the information flow.
3. The dark side of power: Abuse, corruption, and destructive leadership

The growing number of examples of abuse of power in organizations points to a potential problem with
having too much power without much accountability. Abuse involves taking advantage of one’s power
for personal gain. Corruption is abusing one’s power to benefit oneself or others. Destructive or toxic
leadership is leadership that violates the interests of the organization and the well-being of followers.
Abusive and destructive leadership may not be illegal; corruption is. Power tends to increase the
distance between leaders and followers and sets the stage for potential abuse.

a. Causes and processes

Both leader and organizational characteristics contribute to abuse of power (see Table 5.4 for a
summary).

Leader characteristics include factors such as arrogance, inflated view of self, inflexibility, ruthlessness,
and concern with power. Researchers have suggested that “evil” or destructive narcissist managers are
more likely to have these characteristics and therefore abuse their power.

Follower characteristics can contribute to corruption. Particularly, silence, agreement, and compliance
may feed into the leader’s sense of entitlement.

Organizational factors include the culture of the organization, hiring practices, and centralized structure
along with short-term rewards based on limited criteria.

b. The cycle of abuse, corruption, and destruction

The leadership and organizational factors combine to create a corruption cycle presented in Figure 5.5.
Follower compliance, dependence, and submission play a role.

c. Consequences of abuse and corruption

Poor decision making due to poor information is one of the major consequences of excessive power. The
development of a separate morality by the leader can also lead to unethical actions. Finally, devaluation of
subordinates can create a self-fulfilling prophecy that prevents delegation and empowerment and leads to
further isolation and poor decision making.

d. Solutions

In order to prevent power corruption organizations must: encourage open communication, involve
leader in day-to-day activities, reduce followers’ dependence on the leader, use objective measures of
performance, involve outsiders in decision-making, and change and monitor the culture (Table 5.5).

4. Empowerment: The changing face of power

a. Requirements of empowerment

Empowerment is defined as the giving away and sharing of power with those who need it to perform
their job. Factors involved in empowerment are presented in Table 5.6.

Leadership factors: To encourage empowerment, the leader must create a positive atmosphere, set high
standards, encourage initiative, reward followers, practice equity and collaboration, and have confidence
in followers.

Copyright © 2015 Pearson Education, Inc. 89


Organizational requirements that contribute to empowerment include: decentralized structures, training
for leaders and followers, removing bureaucratic barriers, appropriate reward structure, and fair and
open policies.

What do you do? presents a case of employees who are taking advantage of empowerment practices
and are not pulling their weight. Don’t ignore the problem; address it quickly and directly. The first
course of action is accurate data collection and documentation to assure that you have data to support
your assertions. Direct, but non-threatening discussion is the next step. You can explain the impact their
action is having on the group and involve their co-workers to help convince them of the impact. Make
sure that you hear their side of the situation as well. They may face challenges that prevent them from
doing their job well in the new environment. For example, having more autonomy may make it harder
for them do perform and they may need more directions or training. Empowerment does not mean lower
performance; the goal is to help employees become more effective.

b. Impact of empowerment

Much anecdotal evidence supports the positive benefits of empowerment. Empirical research is not as
clear. However, the concept is well established in the United States and several other Western countries.

Leading Change presents the case of Brazilian businessman Ricardo Semler who has championed the
concept of open book management and practices power sharing, participation management, and
empowerment in his company Semco. These practices require extensive training and have led to high
performance for the company.

Leadership Question Revisited Effective use of power is about balance and moderation. Leaders
should use all power sources depending on the situation and while maintaining integrity, concern for
achieving goals, and taking care of their followers.

4. Summary and conclusions

Review and Discussion Questions


1. How does power impact the power holders and those who are subject to it?

Power changes both the power holder and those who are subject to it. Having authority over others can
have both positive and negative consequences. People can become more action oriented, show more
interpersonal sensitivity, focus on rules, and become more generous. Research also shows that power
holders can focus on retaining their power, believe they are more in touch with others than they actually
are, become oblivious to the needs of others, and lose their ability to empathize.
Those subject to power have three typical reactions. First they can commit to the actions and
decisions of the power holder, believing in them and willingly carry out what is asked of them. Second
they can simply comply without having any personal commitment. Finally, they can resist power
actively.

2. Provide examples for each personal source of power. Why are some forms of power more
influential than others?

Legitimate power: Leaders, bosses, parents, elected officials


Reward power: Bosses, parents, clients, customers
Coercive power: Bosses, parents
Expert power: Specialists, people in all organizational ranks with special information or knowledge,
parents (up to a certain age of children!)
Referent power: Leaders, friends, parents
The last two do not depend on organizations but rather on the individual; they are therefore more
powerful and can be tapped even without a formal title.

3. Provide scenarios for the appropriate use of each source of power.

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All sources of individual power can be used by leaders to influence their followers. The first three
sources, legitimate, reward, and coercion, depend on access to formal titles and organizational
resources. While it is legitimate to use them, their use often leads to compliance rather than commitment
from followers. Coercion particularly may have negative consequences and should be used sparingly.
Referent and expert power depend on the individual and can be used with all groups at any time.
When using power with co-workers and other people at the same level, while legitimate power
(an official title) and reward power (giving them something they want) may work, again using referent
and expert power is more likely to lend desired results.

4. Provide examples of the use of different influence tactics.

Influence Tactic Power Source Appropriate to Use With . . . Effectiveness and


Commitment
Rational Expert and access to Supervisors Moderate
persuasion information
Inspirational Referent Subordinates and colleagues High
appeal
Consultation All Subordinates and colleagues High
Ingratiation Referent All levels Moderate
Personal appeal Referent Colleagues Moderate
Exchange Reward and Subordinates and colleagues Moderate
information
Coalition building All Subordinates and colleagues Low
Legitimate tactics Legitimate Subordinates and colleagues Low
Pressure Coercive Subordinates Low

5. Provide examples of how teams can use the sources of power available to them.

The key to the success of teams is for them to do “real” work that is significant and important and to be
empowered to implement their decisions. Therefore, having access to power is essential for their
success. The following are sources of power available to teams.

Coping with uncertainty Based on the ability to reduce uncertainty for others
Centrality Based on being central to how the organization achieves its mission and
goals
Dependency Based on others depending on power holder to get their work done
Substitutability Based on providing a unique and irreplaceable service or product to others

6. How are the team sources of power different from those available to individuals?

The sources of power for teams mirror those used by individuals to some extent. For example,
dependency and substitutability relate to expertise. However, the team sources of power depend on the
team fulfilling and supporting strategic actions for the whole organization. The ability to cope with
uncertainty, for example, helps the organization achieve its goals.

7. What are the factors that contribute to power abuse, corruption, and destructive leadership?

Leader, follower, and organizational characteristics can all contribute to corruption. Although followers
are almost never the starting point or the source of corruption and abuse, their actions or inactions
contribute to the cycle. Leader and organizational characteristics can have equal influence. An arrogant,
narcissistic, and unethical leader will not be able to abuse power as easily in an organization that does
not tolerate it and has in place ways to address power abuse. Similarly, a culture that may encourage
abuse and corruption is not likely to encourage all leaders to abuse power.

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Leader Characteristics and Follower Characteristics Organizational Factors
Behavior and Behavior
 Inflated view of self  Fear  Organizational culture
 Arrogant and controlling  Silence  Separation of leaders and followers
 Rigid and inflexible  Agreement  Hiring practices based on personal
 Sense of entitlement  Compliance relationships rather than objective
 Willing to use and exploit  Inaction criteria
others  Flattery  Short-term oriented reward system
 Lack of empathy and caring with limited criteria
for others  Centralized organizational structure
 Disinhibited, vicious,  High uncertainty and chaos
ruthless  Highly unequal power distribution
 Overly concerned with
power

8. What can be done to prevent or eliminate abuse of power and corruption?

Solutions to corruption and abuse must address the leader, followers, and organizational characteristics.
The following help:
 Clear message and consistency regarding a no tolerance policy
 Holding the leaders accountable for their decisions and actions
 Reducing uncertainty so that everyone knows what the goals and limits are and can follow rules
 Training for leaders and followers to be aware of corruption and organizational policies regarding
abuse and corruption
 Protecting employees by providing ways of reporting abuse and whistle-blowing without fear of
retribution
 Open communication at all levels that allow information to flow freely. A highly secretive
atmosphere and centralized information provides fertile ground for abuse
 Leader involvement in day-to-day activities to reduce the distance between leaders and followers as
much as possible; contact between them increases cohesion and allows for informal interaction

9. What are the key roles of a leader in implementing empowerment?

Leaders play a key role in creating a culture and environment where empowerment can flourish. It is the
leader who must share power in order to empower followers. Additionally, the leader must:
 Create a positive emotional atmosphere
 Set high performance standards to motivate followers
 Encourage initiative and responsibility
 Reward followers openly and personally
 Practice equity and encourage collaboration
 Carefully monitor and measure performance and provide feedback

10. Could empowerment lead to powerless leaders? Why or why not?

Although the leader must give away some of his power when empowering followers, and it may appear
initially that he/she does not have as much do to and as many responsibilities, empowering followers
actually increases the leader’s power and influence. While the leader may not be “doing” as many of the
same things, he/she will most likely increase his/her power by developing a performing and cohesive
group. The leader also will have more time to actually lead, and provide direction, inspiration, and
recognition, all of which increase his/her power with followers. If empowerment is implemented well, it

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is likely to lead to higher performance which also increases the leader’s credibility and status, therefore
power, in the organization.

The Leadership Challenge: How Much Is Enough?


The leadership challenge presents the highly controversial issue of executive salaries which, particularly
in the United States, have reached astronomical proportions. The key issues for students to consider in
the debate are:
 The reasons for high salaries. These include: market forces and competition for executive talent, the
need to retain top talent, the high risk and high responsibility that top level executives shoulder,
compensating executives in a way that will commensurate with the performance of their
organization and that encourages them to perform their best.
 The question of fairness and equity when compared to middle level management and lower level
salaries and wages is highly subjective. Students should be encouraged to debate what fairness
means. Their responses will reflect their personal values. The class is unlikely to come to a
consensus on what is fair; however, the exploration of various points of view are key.
 The need to attract the best talent to help an organization out of crisis.
 The impact of high salary differential on the morale of others in the organization.

In preparation for this assignment students should be encouraged to read articles about executive
salaries. Useful information can be found in several of the Web sites listed at the end of the chapter:
http://www.rileyguide.com/execpay.html
http://www.aflcio.org/corporateamerica/paywatch/index.cfm
http://bwnt.businessweek.com/exec_comp/2002/index.asp

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Chapter 5 Experiential Exercises

Exercise 5.1: Words of Wisdom


This exercise allows students to explore different views and definitions of power by considering quotes
about power. The quotes are from various cultures further allowing for an exploration of cultural issues
in power.

Option: The exercise can be done individually before class but is best done in a group setting in class
after students have reviewed the quotes individually either before class or in class. This type of activity
works equally well with younger students and those with some work experience.

Total time: Minimum 20 minutes in class

Materials needed: Paper and pencil

Part I: Individual review (Individual work; 5 minutes)


Ask students to complete part I either before class or during class. Ask them to think about what the
quote would mean if implemented in today’s organizations and explore why the quotes appeal to them.
It works well as an introductory exercise before the material on power is covered in class.

Part II: Group discussion (Group work; 15 to 20 minutes)


In this part of the exercise, groups of 5 to 7 students are asked to repeat their review and selection as a
group. The group discussions should consider the following:
 Different ways of using power
 The potential impact of power on followers and organizations
 Possible reasons why students prefer different quotes
 Cultural issues that may play a role
There are clearly no right or wrong answers. The point is to explore what power means, how people like
to use it, and how it impacts people. Each group can be given 4 to 5 minutes to present their favorite
quotes and explain their reasoning.

Overall: This exercise is an easy and effective way of introducing the complexity of power and its
importance to followers and organizations. It also allows for review and discussion of cultural factors
and their impact on leadership.

Quote Implications
Be the chief, but never the lord (Lao Egalitarian approach where the leader is seen as guide
Tzu)
There is danger from all men. The Indicates the typical U.S. ambiguous and sometimes difficulty
only maxim of a free government relationship with power. Recommends balance and egalitarian
ought to be to trust no man living with relationships
power to endanger the public liberty
(John Adams)
I know of no safe repository of the Another quote that indicates the U.S. difficult relationship
ultimate power of society but people. with power which is necessary, but should be watched. Strong
And if we think them not enlightened democratic view of power as necessary, but must be carefully
enough, the remedy is not to take the watched. Interesting possible link to how Semco is managed
power from them, but to inform them
by education (Thomas Jefferson)
Justice without force is powerless; Quote is from French philosopher Pascal who was part of the
force without justice is tyrannical enlightened movement that informed many of the principles
(Blaise Pascal) of the French and American revolutions. Emphasizes the
importance of power, and the need for careful handling of
power to assure fairness

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Knowledge is power (Francis Bacon) Links using information and expertise as a source of power
Power tends to corrupt, and absolute Famous quote about the potential for power to corrupt the
power corrupts absolutely. Great men power holder. Strong negative view of non-egalitarian power
are almost always bad men (Lord
Acton)
Power consists of one’s capacity to Precursor of empowerment concepts. Functional view of
link his will with the purpose of power as a tool to achieve goals in a cooperative manner
others, to lead by reason and a gift of
cooperation (Woodrow Wilson)
I suppose leadership at one time meant View echoed by early management theorist Chester Barnard
muscles; but today it means getting and other modern approaches to leadership that emphasize
along with people (Gandhi) relationship with followers
The problem of power is how to One more U.S. suspicious view of power emphasizes the
achieve its responsible use rather than importance of power with a function and a recognition of the
its irresponsible and indulgent use—of potential for abuse
how to get men of power to live for
the public than off the public (J. F.
Kennedy)
Those who seek absolute power, even U.S. negative view of power and its potential for abuse.
though they seek it to do what they Strongly worded statement from an icon of conservative U.S.
regard as good, are simply demanding politics. Emphasis on the need to control power
the right to enforce their own version
of heaven on earth. And let me remind
you, they are the very ones who
always create the most hellish
tyrannies. Absolute power does
corrupt, and those who seek it must be
suspect and must be opposed (Barry
Goldwater)
The first principal of nonviolent action View of power from non-power holders and the need to
is that of non-cooperation with resist power abuse
everything humiliating (Cesar
Chavez)
Authority doesn’t work without Focus on importance of power for leadership and governing
prestige, or prestige without distance and the need to maintain distance from follower to allow for
(Charles De Gaulle) authority. The quote disagrees with many of the current
views of power that emphasize equality. Interesting link to
French cultural values that focus on authority and hierarchy
(e.g., Tromprenaars’ Eiffel Tower)
Power is the ultimate aphrodisiac Quote focused on the impact of power on the power holder
(Henry Kissinger) who feels highly positive but also has potential for
addiction
If you can, help others; if you cannot Empowering and positive view of power that must be used
do that, at least do not harm them to help rather than harm others.
(Dalai Lama)
One of the saddest lessons of history Quote focused on the role of followers in allowing abuse
is this: if we’ve been bamboozled long and the importance of resisting abuse
enough, we tend to reject any
evidence of the bamboozle. The
bamboozle has captured us. Once you
give a charlatan power over you, you
almost never get it back (Carl Sagan)

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Exercise 5.2: Who holds power in your team/organization?
This exercise is designed to help students recognize the different sources of power that are used in
organizations. The exercise is best used for individual work after students have read the chapter. It tends
to work best for mature students who have some work experience. However, younger students often
have experiences with power in various settings including in their part-time work and in student and
volunteer organizations. Students should be reminded to select their examples carefully. They can focus
both on individual and groups.

Total time: 10 to 20 minutes

Materials needed: Paper and pencil

Overall: This exercise is an effective way for students to apply the concepts about sources of power and
influence to their personal experiences and thereby gain a deeper understanding of the concepts.

 Course Assignment
This exercise can be used as an assignment for the course. It allows students to demonstrate their
understanding of the sources of power and influence and apply their knowledge to a real-life situation.

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Self-Assessment 5.1: Understand your sources of power and influence
This is an individual exercise that allows students to identify the sources of power and influence they
use. The assessment is most effective when used after class discussion of power to assure that students
fully understand the concepts before they apply them. As is the case with the next exercise, any
debriefing should emphasize the viewpoint that effective leaders should be able to use different sources
of power and influence depending on the situational and contextual requirement.

Self-Assessment 5.2: Views of power


This is an individual exercise that allows students to identify their views toward the various sources of
power. The assessment should be completed before the class on power and used for discussions
regarding the consequences of each source of power. Debriefing should include a strong contingency
viewpoint whereby not one source is assumed to be better than others. However, it is essential that
students understand that the use of each source has consequences for their ability to influence followers.

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Self-Assessment 5.3: Recognizing blocks to empowerment
This exercise allows students to assess their organization’s readiness for implementation of
empowerment by identifying the leadership and structural blocks. It works best if completed after the
discussion of empowerment so that students have a clear understanding of the concept. It can also be a
very effective conclusion to the power lecture.

Option: The exercise can be used as an individual assessment to help students understand empowerment
better or as a group exercise (after the individual ranking). The group exercise focuses on devising
strategies for removing obstacles to empowerment. This type of activity works best with more mature
students who have some work experience. I have used it very successfully with part-time MBAs. The
group activity is not as effective with traditional undergraduates who have limited or no work experience.
The description below is for the group-based exercise.

Total time: Minimum 30 minutes in class

Materials needed: Paper and pencil; board or flip chart can be useful.

Part I: Individual Description (Individual work; 5 minutes)


Ask students to rate their organizations on the 16 questions and to calculate their score. They may need
your help with the reverse-scored items.

Part II: Strategies for removing obstacles (Group work; 15–20 minutes)
In this part of the exercise, groups of students select one of their members’ organizations, clearly identify
the blocks to empowerment, and develop strategies for their removal. Issues that they need to consider
before they embark in their search for strategies relate to readiness for change and include:
 If the group feels that the answer to these questions is generally positive, then they should develop
strategies to help move the organization toward empowerment.
 Is the leadership of the organization ready for moving toward empowerment?
 Are employees and managers ready for empowerment?
 Is empowerment appropriate given the culture, strategy, performance levels, and so on?
 Would the stress and pain of moving toward empowerment be worth the potential benefits?
The Instructor needs to point out to the students that their strategies do not have to solve all the problems;
each group can set priorities in what can and should be done.

Each group can be given 4–5 minutes to present their organization and their solutions or a general class
discussion of the solutions can take place.

Overall: This exercise is very effective with students who already have some experience with teams,
quality circles, or empowerment. Working on this exercise allows them to identify the obstacles and
understand why the strategies their organization has been trying to implement may not be working.
Discussions invariably turn toward the role of the leader in setting and encouraging a culture that would
support sharing of power.

 Course Assignment
This exercise can be used as an assignment for the course. The assignment uses the students’
organizations as live cases. The questionnaire is used as a tool to analyze the situation; other analysis can
be required along with a description of the organization or departments the student is rating. The
strategies portion involves developing and evaluating various alternatives for implementation of new
management techniques.

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Leadership in Action

The Last CEO of Lehman Brothers: Richard Fuld

Case summary
Richard (Dick) Fuld is the last CEO of Lehman Brothers, a financial services firm that was founded in
1850 and was one of the first companies to disintegrate and declare bankruptcy in 2008. The company
and its CEO have been accused of shady accounting practices that allowed it to hide risky investments.
Fuld has been the head of the company since 1994 and was well known for his expertise and
performance and his strong and bullying style. His nickname “the Gorilla” represents both his habitual
grunting and his domineering style.

1. What are the sources of Dick Fuld’s power?

Fuld based his power on developing considerable expertise early in his career. He also built a strong
network of friends and political allies who gave him referent power. As he gained official titles and
position in Lehmans, he accumulated legitimate power and considerable reward and coercive power
along with the official position. He, very astutely, used all the sources of power to build on one another.
He used his legitimate position and the privileges it brought to further develop friendships and contacts.
He used the same power to intimidate those who disagreed with him and reward those whom he liked.

2. What elements of power corruption are present in this case?

Dick Fuld shows many of the individual characteristics that may lead to abuse and corruption. As his
success increased, he developed an inflated view of himself, demonstrated considerable hubris, and
became arrogant. His temper further contributed to this. His treatment of subordinates shows his
rigidity, sense of entitlement, and willingness to use his power to achieve his goals or simply belittle
them. All the while, Fuld handsomely rewarded followers who performed and conformed.
The follower and organizational factors that lead to corruption are also present. Because of his
expertise and high performance, there was little accountability as Fuld refused to acknowledge
problems. He created a culture of intimidation that rewarded only financial performance while ignoring
other potential problems. The intimidation of those who disagreed with him further led to lack of dissent
and inflated his sense of power. Aside from bankruptcy, Fuld and the company are accused of financial
wrong-doing and subject to investigation.

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PART II
CONTEMPORARY CONCEPTS

Chapters 6 and 7 present theories that currently dominate the field of leadership including charismatic,
transformational, and authentic leadership, and a consideration of upper-echelon and nonprofit
leadership.

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CHAPTER 6
Current Era in Leadership: Inspiration and Connection to Followers
_________________________________________________________________________________
Chapter Overview
The theories that currently dominate the leadership field are presented. These include charismatic,
transformational, and value-based approaches. All focus on the connection between leaders and
followers. Charismatic leadership is defined as an intense emotional relationship between leaders and
followers where leader, follower, and situational characteristics all play key roles. Transformational
leadership, which uses charisma as one of its elements and is focused on large-scale change in
organizations, is discussed and contrasted with transactional leadership, which is primarily concerned
with exchange between leaders and followers. Value-based approaches include servant, authentic, and
positive leadership.

Chapter Objectives

OBJECTIVES THROUGH THROUGH FEATURES, THROUGH


BASIC TEXT TABLES and FIGURES EXERCISES
Discuss the distinguishing
elements of the new era in 
leadership research and
practice
Understand charismatic
leadership, explain the leader,  Figure 6.1
Table 6.1
Exercise 6.1
Exercise 6.2
follower, cultural, and Table 6.2 Exercise 6.3
situational characteristics that Table 6.3
contribute to its development, Table 6.4
and discuss its positive and Leadership challenge: standing
negative implications up to a charismatic but unethical
leader
Distinguish
transactional
between
and  Figure 6.2
What do you do?
transformational leadership Leading Change: The
and explain factors that Unconventional Sir Richard
contribute to transformational Branson
leadership Leadership in action: Andrea
Jung’s rise and fall at Avon
Describe the value-based
approaches to leadership,  Figure 6.3
Table 6.5
Self-assessment
6.1
including servant, authentic, Applying What You Learn: Self-assessment
and positive leadership Balancing a Positive Approach 6.2
with Realism
Figure 6.4
Figure 6.5

Chapter Outline

The Leadership Question Charisma is considered a positive trait for a leader, and charismatic leaders
are sought after. Are charismatic leaders always effective and desirable? Is it a necessary element of
leadership?

1. New era in leadership research

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The current era in leadership research is dominated by charismatic and transformational leadership
approaches and by the burgeoning interest in value-based perspectives. The benefits include:
consideration of leaders as inspirational visionaries, focus on followers’ emotional reactions,
consideration of top level leaders, and addressing the affective and cognitive aspects of leadership.

2. Charismatic Leadership: A Relationship between Leaders and Followers

Charismatic leadership is defined as a relationship between leaders and followers rather than a simple
collection of leader traits and behaviors. It involves leaders, followers, and the leadership situation
(Figure 6.1).

a. Characteristics of charismatic leaders

The personality and behavioral characteristics of charismatic leaders are presented (Table 6.1) along with
several U.S. and international examples of charismatic leaders. High self-confidence and excellent
articulation skills are central.

b. Characteristics of followers

The personality and behavioral characteristics of followers of charismatic leaders are discussed (Table
6.2). Loyalty to and obedience of leaders are essential elements.

c. The charismatic situation

Because charismatic leadership is defined as a relationship between leaders and followers, the elements
of a charismatic relationship and the situation in which it occurs are key.

External crisis and turbulence is key to the emergence of charismatic leaders (Table 6.3). Whether real or
perceived, a sense of crisis and ability for the leader to articulate his/her vision to resolve the crisis are
important.

Internal organizational conditions include: the organizational life cycle, the type of task, and the
organizational culture and structure. The more uncertainty, the more likely that a charismatic leader will
emerge.

Role of culture. The role of culture in charismatic leadership is explored. Some research suggests that
cultures with a strong prophetic salvation are more likely to give rise to charismatic leaders than those
without such views. These cultures include many with a Judeo-Christian tradition.

d. The dark side of charisma

This section discusses the characteristics of unethical charismatic leaders who use their relationship with
followers to pursue their personal goals and agenda. Negative charismatic leaders may also present a
flawed vision that is self-serving or unrealistic (Table 6.4).

e. Evaluation and application

The section ends with an evaluation of charismatic leadership concepts. A number of different
interpretations of charismatic leadership have been proposed. The concepts have a strong appeal although
charismatic leadership should not be viewed as a cure-all.

Leadership Question Revisited Although charisma can be a powerful leadership factor, it also has the
potential for being destructive. It is neither a requirement nor sufficient for effective leadership. Charisma
has to be accompanied by the other hard work of leadership.

3. Transactional and transformational leadership

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The concepts of transformational and transactional leadership are presented. Whereas transformational
leadership is focused on large-scale change in organizations, transactional leadership focuses on basic
exchanges between leaders and followers.

a. Transactional leadership

Contingency reward. Transactional leadership is based on the concept that the leader provides followers
with resources and rewards in exchange for motivation and productivity. When well implemented, this
exchange is at the heart of motivation and can lead to highly desirable results.

Management by exception (MBE). MBE is another type of transactional leadership where the leader only
intervenes when things go wrong, relying on discipline and punishment. MBE is usually associated with
follower dissatisfaction and poor performance.

b. Transformational leadership

Transformational leadership is concerned with inspiring followers to enable them to enact revolutionary
change in their organization. The components are presented in Figure 6.2.

Charisma and inspiration. The first component of transformational leadership is the creation of an
intense emotional bond between leaders and followers through charismatic leadership.

Intellectual stimulation. The second component of transformational leadership is the leader’s ability to
challenge followers intellectually to solve problems through new and creative means.

Individual consideration. The third component of transformational leadership is establishment of


personal relationships with each follower.

The three components combine to allow leaders to transform organizations.

What do you do? The scenario presents the case of leader who is effective but faces a change in upper
management that focuses on change and transformation. As a result, the leader no longer fits well. While
effectively managing the status quo is highly valuable, this leader is finding that it is not enough. It may
be that the organization actually needs change and transformation; or the new upper leaders simply may
want change for the sake of change. In either case, it is important to adjust and fulfill organizational
goals. You can try to manage the pace of change by negotiating with your supervisors, but if the lack of
fit continues, and if the high stress continues, it may be time to explore other options.

c. Evaluation and application

There are many studies of transformational leadership from those testing the basic hypothesis to several
others looking at the concepts across culture and gender. Although the model has been generally
supported, further research is needed in regards to the measurement of the concepts. Several
recommendations for application include: Projecting confidence, providing a clear vision, encouraging
creativity, setting high expectations, and establishing personal relationships with followers.

Leading Change presents the case of Sir Richard Branson, the founder and CEO of the Virgin Group, a
family of companies headquartered in London. Branson is a self-made entrepreneur with a flair for
outrageous marketing stunts. He has also built his company on the philosophy that leaders must like
people and focus on bringing out the best in every employee.

4. Value-Based Leadership: Servant, Authentic, and Positive Approaches

The theories presented in this section focus on more than leader behaviors and actions; they present a
highly emotional process based on fundamental values.

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a. Servant leadership

First proposed by Robert Greenleaf, servant leadership focuses on followers rather than the organization
or the leader. Service to followers and their development is essential to effectiveness. The traits and
behaviors associated with servant leadership are presented in Figure 6.3. The model is new and has
generated much interest, but is not yet well supported by research.

b. Authentic leadership

Authentic leadership focuses on the importance of self-awareness and leadership based on true values
and beliefs. The theory proposed that the most effective leaders are those who understand their strengths
and true purpose, develop them, and base their leadership on them.

Definition and elements of authentic leadership (Figure 6.4 and Table 6.5) include self-awareness,
balanced information processes, behaviors that are true to self, and relational transparency.

c. Positive leadership

The concept of positive leadership is based on a new approach in psychology and organizational
behavior that takes a strength rather than a deficit approach. The approach suggests that how one thinks
influences behaviors and outcomes and recommends that leaders remain positive and optimistic, focus
on strengths, create a positive climate while setting high standards, and dealing with negativity quickly.
The characteristics of positive leaders are presented in Figure 6.5.
Practicing positive leadership requires the following: Being optimistic, encouraging positive
deviance, focusing on strengths, creating a positive climate, maintaining positive relationships, having
positive communications, and dealing with negativity quickly.

Applying What You Learn: Balancing a Positive Approach with Realism While being positive is an
important tool for leaders and can be infectious, it is important for leaders to also be realistic, rely on
data, not overestimate strengths, allow for criticism, and push to get all sides and the good and bad
news.

d. Evaluation and application

The value-based approaches have yet to be fully and thoroughly evaluated and researched. There is
some evidence that they can have positive impact on followers and performance. The approaches
emphasize the relationship between leaders and followers.
Spiritual and authentic leadership are focused on an intense bond and relationship with
followers much the same way as charismatic leadership is. Some suggest that the root of the charismatic
and transformational leadership is authenticity which wins over followers based on the strength of
beliefs. The concept of positive leadership is new to the field and allows us to have a look at the way
leaders think about their situation and how the way they think may influence their leadership. All three
concepts are relatively new and provide ample opportunity for research.

e. A critical look at value-based model

There has been some critiques of value-based approaches that suggest that it can lead to delusional
optimism, poor performance when leaders and followers become overly and unrealistically positive,
overestimate their strengths, and have a bias for “brightsideness.”

5. Summary and conclusions.

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Review and Discussion Questions
1. What are the factors that gave rise to the development of neocharismatic leadership theories?

Neocharismatic leadership concepts address a side of leadership that previous theories do not. It looks at
the relationship and emotional bond between leaders and followers and allows us to study leaders who
are interesting and appear magical in their powers. The theories also allow us to address how leaders can
change organizations and also look at leaders in all levels of the organization.

2. Describe the elements of charismatic leadership.

Charismatic leadership requires the leader, followers, and the right situation. On the leader side,
charismatic leaders are self-confident and expressive, have strong convictions and high energy, and are
active image builders and role models. On the follower side, followers have a high degree of esteem and
affection for their leader, are loyal and devoted, identify with the leader, are confident in the leader’s
abilities, and have high performance expectations and unquestioning obedience. The charismatic
situation requires a sense of real or perceived crisis. The crisis can be internal due to poor performance,
or external due to a threat. Either way, there must be a sense that change is needed, there is availability
of dramatic symbols, and an opportunity for the leader to articulate the vision and the role of followers.

3. What are the cultural constraints on the development of charismatic leadership?

Charismatic leadership assumes the presence of a savior in times of crisis. The concept of savior is more
prominent in Judeo-Christian religions than in other ones. Therefore the concept of charisma is not
universal or at least, its presentation in Western research does not apply to all cultures. Many leadership
concepts are dependent on the cultural context. Specifically, there are universally positive, negative, and
contingent traits:

Universally Positive Universally Negative Culturally Contingent


• Being encouraging, positive, and • Being a loner • Risk taking
motivational • Being non-cooperative • Enthusiasm
• Having a vision and a plan and being • Being ruthless and dictatorial • How vision is
able to make decisions • Non-explicit communicated
• Being dynamic • Irritable • What constitutes good
• Having integrity and being communication
trustworthy • How much leader is seen
• Building teams as equal
• Intelligent
• Communicator
• Win–win problem solver

4. Describe the elements of transactional leadership.

Transactional leadership is made up of two concepts. Contingent reward is based on a formal or


informal contract between the leader and followers. The leader sets goals for followers who achieve
them in exchange for some reward. Contingent reward is an important and essential part of any good
management approach and can lead to positive results.
The second type of transactional leadership is Management by Exception (MBE) where the
leader does not engage with followers either through laissez-faire where there is little direction or
feedback, or through active MBE where engagement with followers is only to correct and provide

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negative feedback. Both types of MBE can have highly detrimental effects on performance and
satisfaction.

5. How is management by exception different from empowerment?

Some managers confuse MBE with empowerment. In both cases, it appears that the leader lets followers
do what they want. That comparison is not accurate. In MBE, the leader does not engage with followers
unless it is to criticize. In empowerment, the leader provides latitude for followers to do their job, but is
highly active in setting goals, providing guidelines, encouraging, and giving both positive and negative
feedback.

6. Describe the elements of transformational leadership and its role in enacting organizational
change.

Transformational leadership is geared toward large-scale change in organizations. Transformational


leaders are those who connect with their followers and help them implement change. It has three
elements:
 Charisma and inspiration that help the followers overcome resistance to change
 Intellectual stimulation that provides new ideas and empowers followers to implement change
 Individual consideration where the leader individually motivates and encourages followers to
implement the change
The combination of the three elements energizes followers to accept and implement change.

7. Compare and contrast value-based, authentic, and positive leadership concepts. Why do these
approaches have so much appeal?

The concepts of value-based, authentic, and positive leadership share common elements with other
approaches to leadership presented in this chapter. All focus on the relationship between leaders and
followers and on the sharing of a vision for the group. Some suggest that authentic leadership is at the
root of the other concepts. Although charismatic, transformational, spiritual, and positive leaders all
have to necessarily have some degree of authenticity, authentic leaders do not necessarily need to be
charismatic, transformational, spiritual, or positive.
Positive leadership offers a fresh approach in that the focus is more on how a leader thinks and
less on what he or she is—charismatic, value-based, or authentic, for example. Owing to its roots in
psychology, positive leadership has a cognitive approach that emphasizes the perspective leaders choose
to take, how they analyze and interpret the situation, and how those processes determine their behavior.
Specifically, positive leaders take on a positive perspective that guides their approach to leading
themselves and others.
Value-based, authentic, and positive leadership present opportunities and challenges. The
concepts add considerable richness to the study of leadership by introducing and considering the role of
emotions, in the case of value-based and authentic leadership, in the leadership process. Additionally,
the introduction of hope and optimism which is the basis of all three concepts, to understanding
leadership is a significant contribution.

8. What are the major contributions and shortcomings of neocharismatic approaches to our
understanding of leadership?

Charismatic, transformational, value-based, authentic, and positive leadership concepts contribute to the
demystification and understanding of leadership processes. They have a broad appeal and provide an
intuitive understanding of leadership that is applicable to large-scale leadership situations. They are also
responsible for resurgence in the interest in leadership. Because of their relatively recent development,
the concepts still require much refinement, and their use in training leaders needs further refinement,
particularly with regard to identification of various situations under which change-oriented leadership
might be more appropriate and more effective.

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The Leadership Challenge: Standing Up to a Charismatic but Unethical Leader
Students are presented with the difficult situation of how to handle a potentially unethical and abusive
leader. Issues of unethical charisma as well as “evil managers” (presented in Chapter 4 “Cutting Edge”)
are key. Issues students should consider are:
 What is objective data as compared to subjective information? Does the follower have enough
objective information?
 Personal values and priorities including the importance of career progress and the potential negative
consequences of standing up to the leader. Students’ personalities (for example their Mach score)
and personal values are key in this analysis.
 How to deal with abusive bosses including careful documentation, awareness of legal rights,
knowledge of company policy, as well as company culture.
The answer to this challenge is highly personal and individual. There clearly is no best or correct course
of action, except for careful documentation. Students differ considerably in their choice of course of
action. The case provides a good opportunity to discuss employee rights, organizational politics, and
career management.

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Chapter 6 Experiential Exercises

Exercise 6.1: Do you know a charismatic leader?


This exercise is based on the concepts of charismatic leadership. It is designed to allow students to
evaluate leaders they know and consider effective in terms of charismatic leadership. It can be used
either as an opening or as a conclusion to the topic of charismatic leadership.

Option: Step 4 can be used to make the exercise a group activity. Each group could then select one of
its members as leader, analyze his/her behavior, followers’ behavior, and the situational elements that
allow for the emergence and effectiveness of charismatic leadership.

 Course Assignment
This exercise can be used as an assignment for the course by asking students to describe and analyze a
charismatic leader, his/her followers, and the leadership situation.

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Exercise 6.2: Charismatic speech
This exercise focuses on the articulation skills of charismatic leaders. One of the major characteristics of
charismatic leaders is their ability to articulate their vision clearly and to inspire their followers through
their message. Although such skills often take much practice to develop, there are several specific
aspects of charismatic speech that can be identified and practiced. This exercise provides students with a
list of the major elements of charismatic speech and with an opportunity to practice those skills. It is
most effective when assigned after the discussion on charismatic leadership.

Because of the time required to complete this exercise, the groups should be required to do their
preparation outside of class after having been provided with the necessary information.

Total time: Minimum 50 minutes preparation (15 with the instructor; 35 in the group); 5 minutes per
group presentation.

Materials needed: Paper and pencil; use of board or flip chart.

Step 1: Preparation
Students should be assigned to groups of 3 to 5. Existing groups can be used.
 Each group must select a topic for a 5-minute speech. The topics should have the potential to inspire
and motivate. Good options are company or school mission statements. Other examples are the
introduction of a new product or service to a sales group, the presentation of a major strategic
change to a department or team, or the introduction (self or by someone else) of a new leader.
 Each group needs to select the target audience for their speech. All presentations will be made to the
class after informing them of the target audience. The intended audience will affect the speech and
therefore needs to be identified.

Following are definitions and examples of framing and rhetorical techniques to help the groups prepare
for their speeches (for more details see Conger 1989 and 1991).
Framing involves selecting a framework for the message around certain goals. For example,
the two statements “our company goal is to build communication devices,” and “our company goal is to
connect human beings to one another” deliver the same basic message with very different frames. Some
methods for framing are:
 Amplify values and beliefs: Select values and stories that illustrate the core higher values that
appeal to the audience.
 Bring out the importance of the mission: Emphasize and exaggerate the need for change and the
attractiveness of the solution.
 Clarify the need to accomplish the mission: Focus on the “good” of the mission and the dangers of
not accomplishing it.
 Focus on the efficacy of the mission: Provide examples of how the mission will work in order to
build the audience’s confidence in the correctness of the selected path.
All the above techniques are designed to provide the audience of followers with a reason for accepting
the proposed change or idea.

Rhetorical techniques are used to further emphasize the message. These include:
 Use of metaphors, analogies, and brief stories to make the mission and goals concrete, set them
apart for undesirable things or events that the audience is likely to know, and create the needed
emotional reactions in followers.
 Use of language that the audience will understand is key to an effective message.
 Repetition of the key message through various means and media emphasizes its importance.
 Alliteration is the repetition of initial consonants sounds (e.g., mighty mountains of Montana)
which provide a pleasing rhythm to the speech.

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 Nonverbal messages need to be consistent and support the spoken words. For example, the style of
dress, clear and confident voice, and lack of hesitation can all be used to further send a message of
confidence.

Overall: This exercise is often difficult for students, but it can be very effective. The ability to develop a
well crafted message is often closer than most students think and even partially succeeding in that task
demonstrates one of the major behavioral components of charismatic leadership. The fact that some
students are more comfortable with this exercise than others can also be used to point to the effect of
personality on one’s ability to practice and learn new behaviors.

 Course Assignment
This exercise can be used as an assignment for an oral presentation in the course. Because of its
difficulty, it may not be appropriate for a large percentage. I have used it as an alternative or addition to
class participation grade.

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Exercise 6.3: Analyzing a Charismatic Speech
This exercise is similar to the previous one, but easier for most students. They find it interesting and it
allows them to demystify what often looks like a magical process. It focuses on the articulation skills of
charismatic leaders. One of the major characteristics of charismatic leaders is their ability to articulate
their vision clearly and to inspire their followers through their message. This exercise provides students
with a list of the major elements of charismatic speech and with an opportunity to identify them in
charismatic and non-charismatic leaders. It is most effective when assigned after the discussion on
charismatic leadership.

Because of the time required to complete this exercise, students should be required to watch the
speeches outside of class after having been provided with the necessary information.

Total time: Minimum 30 minutes preparation individually; another 30 minutes in the group.

Materials needed: Paper and pencil; use of board or flip chart.

Step 1: Preparation
Students should be assigned to groups of 3 to 5. Existing groups can be used.
 Each group must select or be assigned the one or two speeches they will analyze. Each student
should then watch the speech or speeches outside of class and complete an initial assessment.
 In class, the groups can review the speech and complete the assessment again after discussion.
Following are definitions and examples of framing and rhetorical techniques to help the groups prepare
for their speeches (for more details see Conger 1989 and 1991).

Framing involves selecting a framework for the message around certain goals. For example, the two
statements “our company goal is to build communication devices,” and “our company goal is to connect
human beings to one another” deliver the same basic message with very different frames. Some methods
for framing are:
 Amplify values and beliefs: Select values and stories that illustrate the core higher values that
appeal to the audience.
 Bring out the importance of the mission: Emphasize and exaggerate the need for change and the
attractiveness of the solution.
 Clarify the need to accomplish the mission: Focus on the “good” of the mission and the dangers of
not accomplishing it.
 Focus on the efficacy of the mission: Provide examples of how the mission will work in order to
build the audience’s confidence in the correctness of the selected path.
All the above techniques are designed to provide the audience of followers with a reason for accepting
the proposed change or idea.

Rhetorical techniques are used to further emphasize the message. These include:
 Use of metaphors, analogies, and brief stories to make the mission and goals concrete, set them
apart for undesirable things or events that the audience is likely to know, and create the needed
emotional reactions in followers.
 Use of language that the audience will understand is key to an effective message.
 Repetition of the key message through various means and media emphasizes its importance.
 Alliteration is the repetition of initial consonants sounds (e.g., mighty mountains of Montana) which
provide a pleasing rhythm to the speech.
 Nonverbal messages need to be consistent and support the spoken words. For example, the style of
dress, clear and confident voice, and lack of hesitation can all be used to further send a message of
confidence

Overall: This exercise is interesting for students and is effective in demonstrating one of the powerful
tools charismatic leaders often use. It is important to emphasize that non-charismatic leaders can also be
highly effective.

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 Course Assignment
This exercise can be used as an assignment for an oral presentation in the course or written individual or
group assignment. In an oral presentation, each group can present their speech highlighting the areas
they have identified either by reading from the speech or showing clips. Many students have strong
technological ability and can put together a montage for their presentation. I have used it as an
alternative or addition to class participation grade.

If assigned as a written assignment, students can be asked to conduct the evaluation and write a 1–2
page analysis of the elements of charismatic speech.

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Self-Assessment 6.1 and 6.2: Authentic Leadership and Positive Leadership
The self-assessments should be assigned to be completed prior to class. Students having their score
on each of the scales allows for a much richer learning environment. It is important to stress that
these self-assessments are meant to develop a student’s self-awareness. They have not been
scientifically tested and validated. They provide students with a general description of their
behaviors and preferences and give directions for self-development.

 Course Assignment
The self-assessments in this chapter can be used to develop students’ self-awareness of their personal
characteristics. Students can be asked to describe and analyze the characteristics measured in the
self-assessments with a focus on identifying resulting strengths and weaknesses. Students should be
reminded that changing personality is not the goal, rather understanding should be their focus. By
developing increasing self-awareness, they can build on their strengths and compensate for their
weaknesses.

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Leadership in Action

Andrea Jung’s Rise and Fall at Avon

Case summary
Andrea Jung, Avon’s first female CEO, was highly celebrated as a charismatic transformational leader
until she left in 2011 under a cloud of poor performance and legal accusations. She was ranked as one of
the best and later one of the worst CEOs. For more than 10 years, she successfully changed Avon by
connecting with employees and investors and reinventing the company and herself. She was known for
her drive, enthusiasm, and passion for the company. She focused on internal and external
communication to build and share a vision of the company she is leading. However poor decisions and
not grooming a successor caused her to leave the leadership of Avon.

1. What are the key elements of Andrea Jung’s leadership style? Consider the various models
presented in this chapter.

A passion for her organization, a need for consensus building, high enthusiasm, and a focus on
communication are key to Jung’s leadership effectiveness. Her extensive experience in retail and tenure
with Avon provide her with the credibility she needs to run her organization. Her insistence on
developing a shared vision that fully includes the traditional backbone of the company—the Avon ladies
—is evidence of her awareness of the importance of forging a new organizational culture based on the
successful elements of the existing one.
A strong conviction and enthusiasm about Avon, high energy and enthusiasm, strong
communication skills, and active image building (such as leadership in charities focused on benefiting
women) are all elements of charismatic leaders that are present in Jung. Because of some decline in
sales and threats from new retail outlets such as the Internet, a sense of urgency and crisis is present.
Not as evident is the strong follower emotional reaction to Jung’s leadership.
In terms of transformational leadership, Jung has demonstrated her ability to intellectually
stimulate her followers by allowing and encouraging active participation and ownership of changes
implemented in the company. Her high enthusiasm and relentless confidence in the company, along with
her consensus building, further help her followers overcome resistance to change.
The most apparent elements of visionary leadership are enthusiasm, collaboration in the
development of a vision, and her focus on people.

2. How do you explain her success and her fall?

Although Jung showed elements of charismatic and transformational leadership and was popular, she
also made serious mistakes such as rejecting a potentially lucrative merger. Being charismatic and
transformational do not guarantee effectiveness. A leader can inspire and connect with followers, but
still make mistakes. Effective leadership is highly complex and no one factor, trait, or behavior predicts
how well a leader can do.

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CHAPTER 7
OTHER LEADERSHIP PERSPECTIVES: UPPER ECHELON AND NONPROFIT
LEADERSHIP
__________________________________________________________________________________
Chapter Overview
This chapter focuses on leadership at upper levels of organizations. While the models presented
throughout the book tend to be concerned with micro leadership (small groups and departments), upper-
echelon leadership is focused on macro levels. The differences between the two levels are presented and
the processes of strategic leadership are outlined. An integrated view of upper-echelon leadership, which
considers the leader to be both the creator and the implementer of culture and strategy is proposed, and
the moderators that limit the impact of the leader on the organization are discussed and the individual
characteristics of strategic leadership and the processes through which they impact their organization are
outlined. The characteristics and challenges of leadership of nonprofit organization are also presented.

Chapter Objectives

OBJECTIVES THROUGH THROUGH FEATURES, THROUGH


BASIC TEXT TABLES and FIGURES EXERCISES
Differentiate between micro and
upper-echelon leadership  Table 7.1
Figure 7.1
Exercise 7.1
Exercise 7.2
Figure 7.2
Table 7.2

List the individual characteristics


of strategic leaders and consider  Applying What You Learn:
Managing in Times of
Self-assessment
7.1
the role of culture Crisis
Figure 7.3
Table 7.3
What do you do?
Leadership in Action: P&G
Explain how top-level managers
affect their organizations  Figure 7.4
Table 7.4
Exercise 7.3

Leadership Challenge: The


BOD and CEOs
Analyze the unique challenges of
leadership in nonprofit  Leading Change: Public
Allies
organizations Figure 7.5

Chapter Outline

The Leadership Question Do you think there is a difference between leaders at different levels of the
organization and in different organizations? Besides size and number of people who report to you, is
leadership fundamentally different at top and lower levels or in different organizations?

1. Defintion and role of upper-echelon leadership

The major differences between micro and upper-echelon leadership are presented (Table 7.1). These are
scope, focus, effectiveness criteria, and level of decision-making. The new strategic focus for leaders at
all levels is discussed.

a. Strategic forces

The six strategic forces of environment, technology, strategy, culture, structure, and leadership are
proposed as the domain of strategic leaders (Figure 7.1). Leaders in the upper echelon of organizations
juggle these six forces to help organizations reach their goals.

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b. The role of strategic leaders

An integrated view of the role of leadership in strategic management is presented whereby the leader is
assumed to play a central role in the creation of the culture and strategy of an organization. Additionally,
when the organization is well established, the leader plays a role in the implementation of strategy
(Figure 7.2).

c. Factors that moderate the power of leaders

The external and internal factors that moderate the power and influence of upper-echelon leaders on
organizations are discussed (Table 7.2). These factors either limit the power and discretion of the leader
or limit the impact of the leader’s actions and decisions.

External environmental factors include environmental uncertainty, type of industry, market growth, and
legal constraints.

Internal factors include: Organizational stability, size and structure, culture, stage of organizational
development, and the presence, power, and makeup of a Top Management Team (TMT).

Applying What You Learn: Managing in Times of Crisis Leaders increasingly have to manage in
times of crisis. Some key guidelines are: Be realistic, face the situation directly, do research and gather
facts, seek help and support, be a role model, tell the truth, remain calm, practice kindness, listen and
have empathy, and take action.

2. Characteristics of upper-echelon leaders

The research on the impact of upper-echelon’s individual characteristic on their leadership style and
their organization is reviewed. Four strategic leadership types are proposed.

a. Demographic and personality traits

After a review of various individual characteristics of strategic leaders, two common themes that run
through the research emerge. These are the degree of the leader’s challenge seeking and his or her need
for control.

Challenge-seeking: The degree to which a leader seeks challenge, is a risk taker, and is open to change
and innovation is one of the key characteristics of upper-echelon leaders. This characteristic has the
most impact on the way a leader formulates the strategy of his/her organization. At one end are leaders
who seek challenge and are innovative, at the other end are leaders who are risk averse and
uncomfortable with change.

Need for control: Need for control is the second characteristic of upper-echelon leaders and includes
degree of delegation, participative leadership, and encouragement of as well as tolerance for diversity of
form and opinions. This characteristic has the most impact on the internal culture and structure of an
organization. High-control leaders push for uniformity and control, whereas low-control leaders allow
flexibility and openness.

b. Strategic leadership types

The combination of challenge-seeking and need for control yields four strategic leadership types (Figure
7.3). The type of leadership that is effective is contingent upon an organization’s environment, culture,
strategy, and structure. Additionally, each type of leader is likely to create a different type of
organization.

Strategic leadership types and their impact on organizations (Table 7.3)

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High-control innovator (HCI): HCIs are challenge-seekers who have a high need for control. They
select high-risk, innovative strategies while creating centralized structures with strong cultures.
Status quo guardian (SQG): SQGs are challenge-averse and need high control. They select strategies
that are tried and true and maintain high control over their organizations.
Participative innovators (PI): PIs seek challenge and innovation in their strategies while creating a
loose, open, and participative culture and structure inside their organizations.
Process manager (PM): PMs allow for openness of culture and structure while avoiding risky and
innovative strategies.

What do you do? The scenario provides an example of a leader whose strategic leadership type fits
more in SQG or PM and moves to an organization whose leadership is innovative, either HCI or PI.
While there may be an apparent lack of fit with other managers or the general style of the leadership,
organizations need all types of leadership to run smoothly and be effective. The complementary styles
allow the organization and its members to address different challenges they may face. Although the
SQG manager may not be the most innovative one, you can still contribute by helping the organization
run efficiently. It is important to be aware of strengths and weaknesses and work with them to contribute
to the organization.

c. Culture and gender

The effect of culture: Culture may have an impact on strategic leadership type. Using Trompenaars’
dimensions, an analysis of the potential impact of culture using the example of French top executives is
presented. Hierarchy, elitism, and focus on intellectual achievement are partly attributed to the French
cultural value of high power distance.

The effect of gender: Although there is limited empirical research regarding the effect of gender,
anecdotal and case studies of female executives are discussed pointing to many female executives using
a more participative style.

3. How do executives affect their organization?

The processes used by upper-echelon leaders to affect their organization are discussed (Figure 7.4)

a. Direct decisions

Direct decisions regarding all organizational factors including strategy, mission, culture, and structure is
one of the most obvious ways in which upper-echelon leaders impact their organizations.

b. Allocation of resources and control over the reward system

Control over resources and rewards provide upper-echelon leaders with considerable opportunities to
shape their organizations.

c. Setting the norms and modeling

Setting decision standards and behavioral norms and modeling of certain styles and actions are indirect
but still powerful means for upper-echelon leaders to impact the organization.

d. Strategic leaders’ accountability

The responsibilities of upper-echelon leaders are discussed with a focus on the need to match the
considerable power assigned to them with accountability for their own and their organizations’ actions
(Table 7.4).

4. Unique case of nonprofit organizations

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Although they may “make money”, nonprofit organizations reinvest all their proceeds back into the
organization. They are primarily focused on the public good and depend on various donations.

a. Characteristics of nonprofit organizations


b.
Nonprofits operate without profit, have a public service mission, are governed by a voluntary board of
directors, and are funded through contributions.

Leading Change Public Allies is a unique community-based nonprofit organization whose goal is to
develop leadership capabilities within a community by educating and training young volunteers who
return to their communities to lead and implement various projects. The organization runs on the basic
belief that leadership is an action (a verb), not a position (a noun). Since its creation in 1992 Public
Allies has established a considerable network of supporters, has won much praise, and has trained
thousands of leaders. Sixty-seven percent of whom are people of color and 60 percent female.

b. Leadership challenges of nonprofits

Leadership in nonprofits is the intermediary between donors and recipients (Figure 7.5). Their focus is,
more than other organizations, on integrity, trustworthiness, and collaboration. Because of their flat
structure and limited resources, many nonprofits have trouble recruiting, training, and retaining the
leadership they need. They therefore face a crisis in leadership with a significant shortfall in qualified
leaders.

Leadership Question Revisited Although leading involves the same basic processes of taking care of
task and taking care of people no matter what the level and the setting, leaders at different levels and in
different sectors need different types of skills and strengths. Connecting with followers is always
important, as are competence and knowledge of the task at hand. In all cases, leaders need to understand
their leadership context.

5. Summary and Conclusions

Review and Discussion Questions


1. What are the differences between micro and macro leadership?

The differences between micro and macro leadership focus on who the leader is, what the scope of
leadership is, what the primary focus is, and what the effectiveness criteria are.

Micro (Group) Strategic (Upper Echelon)


Who is the leader? One person heading a group, team, A person heading a whole
or department organization with a variety of titles
(president, CEO, COO); Top
Management Team (TMT);
governance body such as board of
directors
What is the scope? Small group, team, or department Entire organization
Where is the primary Internal External
focus?
What are the Productivity; quality; employee Stock prices and other financial
effectiveness criteria? satisfaction and motivation; measures; stakeholder satisfaction
turnover; absenteeism
2. What are the strategic forces that affect strategic leadership in organizations?

There are six strategic forces that upper-echelon leaders must pay attention to. They are the external
environment and the structure, strategy, technology, leadership, and culture of the organization. Various
strategic forces become important at different times, but leaders must pay attention to all of them as they

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lead their organization. The leader must also strive toward creating a fit among the strategic forces so
that the internal factors such as culture and leadership support the demands that come from outside the
organization.
3. What is the role of the upper echelon in managing the strategic forces in the formulation and
implementation of strategy?

Upper-echelon leaders formulate the strategy of organizations in cooperation with other top level leaders
and the top management team and they are then responsible for implementation of the strategy
throughout the organization. There are several internal and external factors that moderate the power,
discretion, and the impact of leaders on both formulation and implementation of strategy.
4. Provide examples for each of the moderating factors on the impact of leadership in
organizations.

External Environmental Factors Environment uncertainty


Type of industry
Market growth
Legal constraints
Internal organizational factors Stability
Size and structure
Culture
Stage of organizational development
Presence, power, and makeup of TMT
5. What are the major themes that are used to describe upper-echelon leaders?

The research on the characteristics of upper-echelon leadership falls into two categories:
Challenge-seeking: The degree to which a leader seeks challenge, is a risk taker, and is open to change
and innovation is one of the key characteristics of upper-echelon leaders. This characteristic has the
most impact on the way a leader formulates the strategy of his/her organization. At one end are leaders
who seek challenge and are innovative, at the other end are leaders who are risk averse and
uncomfortable with change.
Need for control: Need for control is the second characteristic of upper-echelon leaders and includes
degree of delegation, participative leadership, and encouragement of and tolerance for diversity of form
and opinions. This characteristic has the most impact on the internal culture and structure of an
organization. High-control leaders push for uniformity and control, whereas low-control leaders allow
flexibility and openness.
6. Describe each of the four strategic leadership types. Provide examples of each type.

The need for control and the degree of seeking challenge are combined to yield four distinct strategic
leadership types. They are:
High-control innovator (HCI): HCIs are challenge-seekers who have a high need for control. They
select high-risk, innovative strategies while creating centralized structures with strong cultures.
Status quo guardian (SQG): SQGs are challenge-averse and need high control. They select strategies
that are tried and true and maintain high control over their organizations.
Participative innovators (PI): PIs seek challenge and innovation in their strategies while creating a
loose, open, and participative culture and structure inside their organizations.
Process manager (PM): PMs allow for openness of culture and structure while avoiding risky and
innovative strategies.
7. How do culture and gender affect strategic leadership?

There is limited research about the role of culture and gender in strategic leadership. However, there is
some indication that culture may have an impact on strategic leadership type. Using Trompenaars’
dimensions, an analysis of the potential impact of culture using the example of French top executives is
presented. Hierarchy, elitism, and focus on intellectual achievement are partly attributed to the French
cultural value of high power distance. Similarly, in spite of limited empirical research regarding the

Copyright © 2015 Pearson Education, Inc. 119


effect of gender, anecdotal and case studies suggest that many female executives use a more
participative style.
8. Describe each of the processes used by leaders to influence strategic forces in their
organizations. Which of the processes is most important? Why?

Leaders use various processes to influence their organizations. These include:


Direct decisions regarding all organizational factors including strategy, mission, culture, and
structure is one of the most obvious ways in which upper-echelon leaders impact their
organizations.
Control over resources and rewards provide upper-echelon leaders with considerable opportunities
to shape their organizations.
Setting decision standards and behavioral norms and modeling of certain styles and actions are
indirect but still powerful means for upper-echelon leaders to impact the organization.

9. What is the upper echelon’s responsibility in organizational actions and performance?

Upper-echelon leaders have considerable power and privilege to lead their organizations. With such
power comes considerable responsibility for members of the organization and, some would argue, for
external constituents as well. However, increasingly, upper-echelon leaders are not held accountable for
their actions or for their organization’s performance. There are many instances of leaders being
rewarded handsomely while their organization performs poorly. The examples of outright fraud and
ethical violations also suggest that many leaders are not held accountable.
Although organizational performance should be one of the primary determinants of the
compensation of upper-echelon leaders, there are many other factors that determine the compensation.
They include: firm size, industry competition, CEO power and discretion, the extent of
internationalization, and high stress and instability.
For the benefit of organizational and social functioning and well-being, it is essential that the
tremendous power, influence, and status of CEOs be accompanied by accountability and responsibility
to their various constituents. Such accountability exists on paper but is hardly ever executed. The power
and impact of upper-echelon leaders are undeniable. Their credibility and ability to further affect their
organizations, however, can increase only with more accountability.

10. What are the unique characteristics and challenges of nonprofit leadership?

Nonprofit organizations have the following characteristics:


 They operate without profit. Although nonprofit organizations charge for services or membership
and many generate and use considerable sums of money, all the funds are reinvested to support the
operations of the organization. Many nonprofits are highly “profitable”; however, all excess funds
are reinvested to achieve their mission.
 They have a public service mission. The primary mission of a nonprofit organization is to serve the
public good, whether it is health care (hospitals), education (schools and universities), churches,
community improvement, or foundations with a broad purpose.
 They are governed by voluntary board of directors. As opposed to business organizations that have
paid board of directors, the governing boards of nonprofits are staffed by volunteers with a stake or
interest in the mission of the organization.
 They are funded through contributions. Whereas charging fees is a source of revenue for many
nonprofit organizations, their primary sources of funding are contributions, grants, and donations
from individuals, government agencies, and other foundations.

Nonprofits also face unique challenges:


 Leadership is often expected to lead in a collaborative and trust-based manner which may not
always fit the situation.
 There is a heavy burden on the leadership to act with integrity and accomplish the public mission.
Leaders are expected to embody the self-sacrifice that their organizations often support.
 Leaders play a difficult role of intermediary between donors and recipients. The leader guides the

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organization to allocate the resources, such as donations or grants, to various receivers turning the
resources that are trusted to the organization into social good.
 The recruitment, training, development, and retention of future leaders is a particular challenge.
Without the profit motive and with often limited resources, nonprofits are challenged in attracting
and preparing the leaders they need in the numbers they need.

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The Leadership Challenge: BOD and CEOs
This brief challenge presents the highly complex issue of the relationship between the board of directors
and company CEOs. The issue of corporate governance is one that students are likely to have or will
encounter when they take a strategic management class. The focus is on CEO accountability. Many
current business examples (e.g., Enron and Xerox) can be used to illustrate the complexity of these
concepts. Issues students should consider include:
 The importance of a cooperation and collaboration between the board and the CEO. This need
for harmony and collaboration has prompted CEO involvement in the selection of the board.
 The need to balance the board with members nominated by different constituents including the
upper management of the company.
 The fiduciary duty of the board and the CEO toward stockholders in the case of public
corporation.
 The lack of ideal solution and the importance of reaching a workable balance and constant
reevaluation and renegotiation.

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Chapter 7 Experiential Exercises

Exercise 7.1: Understanding the strategic forces


This exercise is designed to help students understand the role of leaders in managing the six strategic
forces of environment, strategy, culture, structure, technology, and leadership presented in the chapter.
The choices upper-echelon leaders make regarding which of the six to emphasize and how to manage
each depend to a great extent on the leader’s personality and background. The leader’s choices, on the
other hand, have a profound impact on organizations.

Total time: Minimum 30 minutes preparation; 5 minutes per group presentation.

Materials needed: Paper and pencil; use of board or flip chart.

After reading the scenario, assign students to groups of 3–5 to complete the worksheet and make a
recommendation regarding their choice of new principal.

Worksheet Sample
Strategic Forces J.B. Davison Jerry Popovich
Environment Defined primarily as school board and Defined broadly to include
parents community
Strategy Focus on basics (reading, writing, math, Focus on community
and discipline) partnerships including parents
and businesses
Culture Tight controls, paternalistic Open
Structure Centralized, formalized Fluid/organic
Technology Likely not major focus Major focus
Leadership Authoritarian; control-oriented Participative

Discussion items
1. How are the two candidates different?

Davison’s orientation to education is traditional with an emphasis on the basics and on discipline. His
education and background are also traditional. Popovich’s approach is more focused on community and
is likely to be more creative. Her background with computers and industry is less typical of a school
principal. They are both well qualified for the job.

2. What explains the differences between them?

The factors that explain the differences are:


 Their age: Davison is 15 years older than Popovich and almost from a different generation
 Their educational background: Davison is more traditional
 Their gender: Popovich seems to practice the interactive leadership often attributed to female leaders

3. The choice

Both candidates are good choices for the job. It is important for students to understand that there is no
right choice. Whom each group picks depends on how they view the situation at the school. Each
candidate brings a unique and different set of skills. Their approaches are very different. Davison’s may
have a quicker response whereas Popovich’s approach is likely to be more long term. The quick
response from Davison’s approach may not provide long-term solutions, whereas Popovich’s approach
may not have a chance to work without quick solutions.

Overall: The brief scenario provides a good mechanism for students to analyze the impact of upper-
echelon leaders. The major theme for this exercise is to realize that there is no right answer and to
understand the consequences of the choice that is made.

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 Course Assignment
This exercise can be used as an assignment for the course. The mini-case can be analyzed and students
can be asked to present their recommendations and justifications.

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Exercise 7.2: Your organization
This exercise is designed to draw students’ attention to the result of an upper-echelon leader’s influence.
When using the vignettes presented at the end of the chapter, it is most effective if students rate the
organization prior to the discussion of strategic leadership types. The discussion and predictions
regarding the leader’s strategic type should take place after coverage of the topic in class.

Option 1: Ask students to rate their own organization, department, or team. This option is most effective
with students with work experience.

Option 2: Provide students with the cases at the end of this chapter and ask them to rate the organization
and leaders described in the cases. This option is most effective with students with limited work
experience, or as a practice for rating their own organization.

Total time: Minimum 15 minutes for Option 1 (5 minutes for rating, 10 minutes for discussion);
minimum 25 minutes for Option 2 (15 minutes for rating, 10 minutes for discussion).

Materials needed: Paper and pencil

In-Class Discussion: Option 1


If students have rated their own organization, their ratings and their predictions regarding the leader’s
strategic type can be used as a basis of discussion of the chapter. Students can also be assigned to small
groups of 2–3 to predict one another’s leader’s style based on the organization rating.

Case Solutions for Option 2


Culture Structure Leadership
Southern Loose and fluid; Many Decentralized Process manager;
State University sub-cultures co-exist Low need for control
and challenge averse
Chip Factory Tight controls; no Centralized; formalized; High-control
tolerance for high control innovator;
differences; one way of High need for control
doing things and innovative
Northern Lights Tight controls; no Centralized; formalized; Status quo guardians;
tolerance for high control High need for control
differences; one way of and challenge averse
doing things
D.C. Medical Loose and fluid; Many Decentralized Participative
sub-cultures co-exist innovator; Low need
for control and
innovative

 Course Assignment
This exercise can be used as an assignment for the course. Students can be asked to either provide a
description of their own organization or use one or more of the cases at the end of the chapter to do a
case analysis of the organization, its culture, structure, and leadership.

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Exercise 7.3: Influence processes
This exercise is designed to help students identify the processes that upper-echelon leaders use to
impact their organization and most particularly its culture. The three vignettes provide simple case
studies of the different processes used. The exercise should be used after discussion of the processes
described in Chapter 10; it can be used as either a group or as an individual exercise.

Total time: Minimum 15 minutes per case

Materials needed: Paper and pencil

Case Solutions
J.C. Green Leslie Marks Joseph Hadad
Direct decisions Selection of replacement Work assignments and Compensation system
location her own office
Allocation of Based on performance
resources
Reward system Reward for intelligence, New compensation and
wit, and analytical skills benefit system
Selection of other Choice of Stanley Wang Focus on internal Based on performance
leaders promotions
Role modeling Running Open door; office Focus on financial
moved to first floor; factors
informal dress

 Course Assignment
This exercise can be used as an assignment for the course. Students can be asked to analyze, compare,
and contrast the influence processes used by the three leaders.

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Self-Assessment 7.1: What is your strategic leadership type?
This exercise is a self-rating based on the four strategic leadership types presented in the chapter. Students
can also use the scale to rate their organizational leaders. The quadrants are used to place students in one of
the four categories.

High Challenge Seeking


15
Control

Control
High

15 0

Low
0
Low Challenge Seeking

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Leadership in Action

The Leadership at Procter & Gamble

Case summary
P&G is one of the top consumer good companies in the world. Under the leadership of A.G. Lafley from
2000 to 2009 the company transformed itself and maintained a strong market position. His carefully
groomed successor Bob McDonald took over in 2009 when Lafley retired, but was not received well
causing the board of directors to call Lafley out of retirement in 2013 to once again head the company.
Lafley is known for quiet determination, decisiveness, a soft-spoken style, and focus on the customer
and the product. Throughout, his messages have been simple and repetitive making sure everyone
understood the importance of the customer. Although P&G has very well-designed succession plans,
McDonald’s departure leaves the company without an obvious leader after Lafley leaves. Additionally,
Lafley is now working with one of the most powerful board of directors in the world, many of whom
face considerable challenges in their own organizations.

1. What strategic forces impact P&G?

All the strategic forces presented in Figure 7.1 impact P&G. Particularly, the changing environment and
competition, and new technology have forced the company to look for new products and new markets.
Internally, the culture of the company played a significant negative role in preventing the necessary
changes. Lafley was instrumental in changing the culture and focusing it on the customer. Changes in
the structure, toward teams and decentralization, have further supported the new strategies. Leadership
has played a key role. Lafley’s leadership brought stability and hope. McDonald had a particular focus
on leadership, teaching it to others and practicing what he preaches. Lafley is now once again charged
with reviving the company in an increasingly competitive environment and has the added challenge of
grooming a successor, once again.

2. What are the factors that affect the leaders’ discretion?

P&G is a huge global conglomerate that faces constant uncertainty and a need for market growth. While
the culture is well set, it also is in need of continuous revitalization given the maturity of the
organization. In addition to these internal and external factors that affect the leaders’ discretion, the
presence of a very powerful BOD with many prominent members is a big challenge for the leaders.

3. What are the key elements of Lafley’s style?

Laflely, like most of P&G’s leadership, is a long-time company insider. He is known to be understated
and quiet with a passion for focusing on the customer. He is also highly decisive and strong but not
flashy. Lafley encouraged the use of teams, decentralized decision making, and encouraged increased
participation. His message was simple; he used dramatic symbols to make his point; he was a careful
listener; and he provided a clear focus. He seeks innovation, but has a relatively low need for control,
placing him in the PI category.

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Your Organization: Cases

Southern State University


The College of Foreign Languages at Southern State University has 15 full-time faculty and 4 support
staff. The College offers courses in French, Italian, Spanish, German, Japanese, and Mandarin Chinese.
Many of the faculty teach in more than one language program, and they are not divided into the typical
departments. More than half the faculty are tenured. The rest are at various career stages. The
atmosphere is generally collegial. The faculty associate with those who teach similar classes, and it
appears that everyone is left alone to do their “own thing” as long as the students are taken care of and
the quality of instructions stays high.
Most decisions are made by faculty committees, and the dean, Robert Hunt, is very supportive
of shared governance. He has been dean for seven years and is well-liked. For the past three years, there
has been much debate among the faculty regarding computerized language instruction. Several faculty
members have been very vocal in asking the dean’s support to write grants to obtain the necessary
equipment and training. Although the dean has not voiced his disagreement, he appears to be siding with
several of the more senior faculty who are strong proponents of traditional language instruction and
appear to be “computer phobic.” Several other issues regarding changes in tenure and promotion
procedures and criteria and curricular changes have also been at the dean’s desk for more than a year
after having been approved by faculty committees.

The Chip Factory


The Chip Factory is an entrepreneurial success story. The small company has become famous
throughout its Northwestern home state for the high quality cookies and cakes and the growth in sales
has been phenomenal. Since its creation four years ago, the one Chip Factory store has grown to 28
throughout the state, and there is much talk about franchising the operation to support the growth. The
stores are very cheap to operate. Each needs three to five low-skill employees, and two supervisors who
are trained for one week at the mother store by the owner and her husband. They are taught everything
they need to know, from how to dress (they all wear uniforms), to how to clean the stores, how to talk to
customers, how to arrange the display, and so on. The cookie and cake secret dough and ingredients are
shipped three times a week to all stores and require simple mixing and baking.
Almost every month, the stores offer new flavors and new goodies ranging from special
seasonal items to novelty containers and gourmet coffees. Most of the new items are very successful,
and they are regularly replaced. All employees receive thorough training on how to prepare and present
the new items, and very strict quality control is maintained through regular spot inspections, and a
variety of awards are handed down by the owners. The employees are generally high-school students
who are attracted to the flexible hours and the better than average pay.
Michelle Gerard and her husband, Alberto, are the sole owners of all the Chip Factory stores.
Michelle is responsible for all the recipes and the training. Alberto runs the other business aspects
including managing the three quality-control inspectors.

Northern Lights
Northern Lights utilities is one of two major utility companies in a three-state region in the Midwest. In
spite of the changes in the industry and the increasing competition as a result of new deregulation, the
publicly owned company continues to be successful as it has been for the past 35 years. The company is
known for its performance-based incentive system that focuses entirely on monetary rewards for
employees and managers. The system has been in place for almost the life of the company and has been
very effective. The turnover rate is considerably below industry averages. As a result, the average tenure
of employees and managers is more than 10 years. All of the managers are promoted from within, and
most have come up through the ranks with company-supported education. Productivity is high, and
profits have been good.
The organization has a strong family atmosphere. In spite of its size, most people know one
another and family members by name. The president, Thomas Wysocki, has also come through the
ranks. He is a “company man,” and both his sons also work for Northern Lights. Whereas many of the

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company’s competitors have ventured into acquiring other companies and new industries, Northern
Lights has stuck to its core business. Their growth has been due to the growth of their region.

D.C. Medical
As a result of the major changes in the health-care industry, D.C. Medical was divested by a major
hospital that owned this out-patient clinic. Instead of risking shut-down, the employees and managers of
the clinic decided to buy their own organization. Three years after the buy-out, the employee-owned
clinic is thriving. Its 20 physicians and 42 staff are known for quality, low-cost health care. Quality and
concern for their patients are the common threads for all the employee-owners who are managing the
clinic with the help of their administrator, Amy Hidalgo, one of the few people who is not an owner.
The employees have organized themselves into cross-functional teams that run the different departments
and report to Hidalgo. The employees see Hidalgo as the “obstacle remover.” Her role is to obtain
resources and facilitate providing quality health care. She has focused much of her attention on external
relations and marketing, which are her strong points. She has developed a number of very successful
P.R. campaigns and has established partnerships with several businesses. The various teams have been
very successful in running the facility. Each department has come up with many new procedures to
address their clients’ needs leading to considerable success for the clinic.

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PART III

LEADING

Chapters 8, 9, and 10 focus on key aspects of leading people and organizations including leading teams
and change and developing leaders.

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CHAPTER 8
LEADING TEAMS
__________________________________________________________________________________
Chapter Overview
The chapter tracks the evolution of participation in leadership by presenting the situations that make
participation desirable and outlining the benefits and disadvantages of employee participation.
Delegation is discussed as an application of participation concepts. The benefits and steps to proper
delegation are presented. The chapter ends with a focus on the current use of teams in organizations and
its effect on leadership roles. The concepts of self-managed teams and self-leadership are presented as
current forms of formalized participation in organization. The chapter has a strong cross-cultural focus
because the success of participative management depends to a great extent on cultural values of
collectivism and power distance.

Chapter Objectives

OBJECTIVES THROUGH THROUGH THROUGH


BASIC TEXT FEATURES, TABLES, EXERCISES
and FIGURES
Understand when and why
participation should be used to  Figure 8.1
Table 8.1
improve leadership effectiveness
Explain the benefits and provide
guidelines for delegation  Table 8.2
Table 8.3
Exercise 8.1
Self-assessment 8.1
Leadership Challenge:
Who gets the project
Apply the use of various types of
teams and self-leadership  Table 8.4
Leading Change: Google
Exercise 8.2
Self-assessment 8.2
Applying What You
Learn: Using Sports
Team In Management
Leadership in Action
Case: Whole Foods
Lead teams effectively and
manage and avoid team  Figure 8.2
Figure 8.3
dysfunctions Table 8.5
Figure 8.4
Figure 8.5

Chapter Outline

The Leadership Question What are the factors that make the implementation of teams so challenging
for many leaders? What can be done to improve the situation?

1. Participation and teams: Benefits and criteria for use

a. Benefits of participation and teams

This section discusses how organizations and leaders can use participation (Figure 8.1) and the potential
benefits it can have.

b. Criteria for participation

Table 8.1 outlines the criteria for using participation. Task complexity, employee commitment,
organization readiness, and task characteristics are some of the relevant criteria.

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c. The role of culture

The key role of culture in the use and success of participative management is discussed while pointing
out that high power distance and collectivism have a great impact on the leaders’ use of participation as
a management tool.

2. The issue of delegation

This section provides a detailed description of the advantages and disadvantages of delegation as a
leadership tool.

a. Benefits of delegation

The benefits of delegation include: Freeing up the leader’s time, providing employees with growth
opportunities, allowing them to be involved in tasks, providing the leader with opportunities to observe
employees, and increasing employee motivation and satisfaction.

b. Guidelines for good delegation

The steps to proper delegation are presented in Table 8.2.

c. Why do leaders fail to delegate?

The factors that cause many leaders to fail to delegate tasks and responsibilities to their followers are
presented in Table 8.3.

3. Evolution of participative management: Teams and self-leadership

The use of teams as a formal structure to encourage participation in decision making is discussed.

Leading Change Google presents the case of Google which aims to be the happiest place to work, not
just for the sake of employee satisfaction, but because the company has determined that keeping
employees engaged and satisfied is essential to its effectiveness and performance. By providing a fun,
pleasant, and highly engaging work environment that includes shops, terraces, play areas, and gourmet
free food, and removing physical barrier for cooperation and teamwork, Google encourages its
employees to work and play hard and cooperate. Extensive monitoring and measurement assures that
the various changes and activities are effective.

a. Characteristics of teams

Table 8.4 summarizes the difference between groups and teams. Commitment to common goals and
procedures, shared responsibility and leadership, and synergy are key elements of teams.

b. Self-managed teams

Elements of self-managed teams are presented. These include: the power to manage their own work, not
having an outside manager, coordination and cooperation with other teams, and internal leadership
based on facilitation.

Applying What You Learn: Using a Sports Team Model in Management The sports team model can
be used to improve team management. Specifically, leaders should: encourage both cooperation and
competition, provide early wins, break out through losing streaks with positive thinking, take time to
practice, keep membership stable, and review performance.

c. Self-leadership

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Super- and self-leadership are presented as one of the applications of participative management in
organizations. In team environment, the need for leadership is reduced. Therefore all team members
should be encouraged to become self-leaders. Self-leadership includes the following elements:
developing positive and motivating thought patterns, personal goal setting, observation and self-
evaluation, and self-reinforcement.
Strategies for the development of self-leaders include: listening, asking questions, sharing
information, encouraging independence, encouraging creativity.

4. Leading teams effectively

a. Size of the team

Size is one the structural factors that can affect the effectiveness of a team. Leaders should strive to keep
teams small enough to allow members to interact easily without creating dysfunctional subgroups.

b. Composition of the team

Selection of members is another key factor. The issue of group homogeneity or heterogeneity is key
(Figure 8.2).

c. Role of leaders in a team environment

The new roles of leaders in a team environment are presented (Figure 8.3) and the stresses and obstacles
associated with the new roles are discussed. A cultural analysis of teams is presented by focusing on the
U.S. and Australian individualism cultural value as the basis for the new concept of collaborative
individualism that is suggested to replace the eastern-based concept of cooperative and harmonious
teams.

What do you do? presents the case of forming a team with only top performers to address a challenging
task. Although it seems logical that the best and brightest are likely to perform well when all put
together, it is not necessarily the case. Issues of size and composition, and creating diversity on a variety
of dimensions including expertise, strength, and perspective are also essential. Additionally, teams can
be effective only if members work well together. Simply putting together high performers does not
guarantee that they can work well together.

d. Managing dysfunction in teams

Table 8.5 summarizes the four typical dysfunctions that teams face.

Groupthink is one of the most serious dysfunctions that teams can face. Cohesive teams strive for
agreement at the expense of critical evaluation and creative discussions. The antecedents, symptoms,
and consequences of groupthink are presented in Figure 8.4 and solutions are presented.
Free riders are members who benefit from the team without contributing. They can severely impact the
team’s cohesion and effectiveness.
Negativity and bad apples can quickly sap a group’s motivation and reduce its performance.
Lack of cooperation and trust is a key factor in poorly performing teams.

e. Helping teams become effective

In order for teams to be effective they must be created with a real purpose in mind, be empowered to
take action, and be supported by the organization. To make teams effective, leaders must continuously
monitor them and act quickly when problems and dysfunctions occur. Leaders must help the group to
develop trust (Figure 8.5). Additionally, teams require special training to become effective. The training
should include: team building, cross training, coordination training, self-guided correction, and
assertiveness. The importance of building trust and the elements that lead to trust in teams are presented.

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Leadership Question Revisited Although teams and participation can be effective tools when used in
the right context, they should not be overused. To succeed and be effective, teams must be managed
well and supported through training and proper leadership.

5. Summary and conclusion

Review and Discussion Questions


1. What are the factors that determine the use of participation and what are the potential benefits
and disadvantages of participation?

The factors that determine the use of participation are: task complexity, employee commitment,
organization readiness, and task characteristics. Participation is not a cure-all and does not always
constitute the best approach. Organizations vary in their use of participative management and the degree
to which they use teams.
Participation in decision making can have positive impacts on employee morale, performance,
and reduce turnover and absenteeism. However, participative management and teams can also provide
some challenges that include needing more time and dysfunctional teams.

2. How does culture affect an organization’s ability to implement employee participation?

Collectivism can have a strong impact on the use of participation by the leader and how well it is
accepted. Cultures with a strong collectivistic value tend to find team structures easier to use while
individualistic cultures may find them difficult. Additionally, power distance also affects how well
participation is accepted. In high power distance cultures, participation and empowerment may not be
easily implemented. In more egalitarian cultures, employees and leaders find participation more
comfortable.
3. What organizational strategies can be used to help leaders delegate more often and more
effectively?

As with any skill, delegation can be taught and developed in leaders. The benefits of delegation include:
 Freeing up the leader’s time for new tasks and strategic activities
 Providing employees with opportunities to learn and develop
 Allowing employees to be involved in tasks
 Allowing observation and evaluation of employees in new tasks
 Increasing employee motivation and satisfaction

Organizations and leaders should follow these guidelines in implementing delegation:

Delegate, do not dump Delegate both pleasant and unpleasant tasks; provide followers
with a variety of experiences.
Clarify goals and expectations Provide clear goals and guidelines regarding expectations and
limitations.
Provide support and authority As a task is delegated, provide necessary authority and resources
such as time, training, and advice needed to complete the task.
Monitor and provide feedback Keep track of progress and provide feedback during and after
task completion at regular intervals.
Delegate to different followers Delegate tasks to those who are most motivated to complete
them as well as those who have potential but no clear track
record of performance.
Create a safe environment Encourage experimentation; tolerate honest mistakes and worthy
efforts that may fail.
Develop your own coaching skills Take workshops and training classes to assure that you have the
skills to delegate.
4. Compare and contrast groups and teams. Provide an example of an effective team. What are the
elements that contribute to its success?

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The following differentiates between groups and teams:

Groups Teams
Members work on a common goal. Members are fully committed to common goals and a
mission they developed.
Members are accountable to manager. Members are mutually accountable to one another.
Members do not have clear stable culture Members trust one another and team enjoys a
and conflict is frequent. collaborative culture.
Leadership is assigned to single person. Members all share in leadership.
Groups may accomplish their goals. Teams achieve synergy: 2 + 2 = 5

Having a common goal and developing trust are key to the success of teams, as are the right types of
training and being empowered to work on meaningful tasks.

5. What is the difference between delegation and implementation of self-managed teams?

Delegation is an age-old management tool that allows for the development of followers and reduction of
the leader’s workload. Team-based organizations and self-managed teams are relatively new and go
hand-in-hand with the implementation of participative decision making and empowerment.
In delegation, leaders and managers retain responsibility and authority for all activities. While
followers are assigned tasks, the manager continues to have full responsibility for the outcome.
Additionally, the manager provides goals, guidelines, monitors activities and results, and so forth. In
self-management teams, the responsibility and authority rests with the team itself as does the goal-
setting and monitoring. Self-managed teams do not need a manager to oversee their activities. They
manage their own work, coordinate with other groups and lead themselves often through facilitative and
shared leadership.

6. What are the steps to self-leadership?


Self-leaders are those who:
 Develop positive and motivating thought patterns. Individuals and teams seek and develop
environments that provide positive cues and a supportive and motivating environment.
 Set personal goals. Individuals and teams set their own performance goals and performance
expectations.
 Observe their behavior and self-evaluate. Team members observe their own and other team
members’ behaviors and provide feedback and critique and evaluate one another’s
performance.
 Self-reinforce. Team members provide rewards and support to one another.

Some of the steps leaders can take to become self-leaders and encourage self-leadership in others are to:
listen more; talk less; ask questions rather than provide answers; share information rather than hoard it;
encourage independent thinking rather than compliant followership; and encourage creativity rather than
conformity.

7. What are some typical dysfunctions that teams may face? What is the role of the leader in
managing them?

Teams face many challenges. Primary ones include: developing groupthink, presence of free-riders,
negativity, and lack of trust.

Groupthink develops when team members’ desire for cohesion overrides their ability to think and
evaluate issues critically. Team members strive to get along, reduce conflict, and keep their membership
in the group. When cohesive groups face a complex situation, they insulate themselves from outsiders
and fail to consider alternatives instead reaching for quick agreement that protects the group sense of
cohesion. A key antecedent of Groupthink is directive leadership that further encourages quick

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agreement. Once these conditions are in place, groups that fall prey to Groupthink show a number of
symptoms including the illusion of invulnerability and unanimity, collective rationalization, self-
censorship and pressure on dissenters. As a result, alternatives are not evaluated, the group strives
toward quick agreement and fails to develop contingency plans, all leading to poor decision making.

Free Riders are people who are group members and benefit from their membership but do not contribute
to the group. Free-riders appear to be more common in individualistic cultures. In collectivistic cultures,
the sense of group and the need to be part of the group often prevents people from free-riding. In
individualistic cultures, the focus on individual contribution reinforces the need to have equal and
similar contributions from all team members, causing them to feel a sense of unfair advantage when
facing potential free-riders.

Negativity and Bad Apples can quickly spread and damage the cohesion, effectiveness, or even ethical
behavior of a team. One unhappy and unmotivated team member can have a disproportionate negative
effect on her team. The “bad apples” are often focused on their own goals, uncooperative or
domineering, and unwilling to contribute. Their constant complaining and lack of motivation draw the
group down and prevent other team members for achieving the group’s goals.

Lack of Cooperation and Trust can be highly detrimental to teams. An effective team is one where
members trust one another to work toward a common goal. Trust allows group members to safely
experiment, learn, and make mistakes without fear of ridicule and retribution. Lack of trust greatly
hampers the effectiveness of a team and prevents it from reaping benefits from having a team.

Team leaders and in some cases, outside leaders, have a great responsibility in monitoring teams to
assure that dysfunctions do not occur and in addressing them when they do. In the case of groupthink,
the presence of a strong leader can be a contributing factor, so leaders must keep their distance from the
team to help prevent groupthink. In other cases, quick action from the leader is essential to address the
problems.

8. How has the role of leaders changed in team environments? What functions remain?

Self-managed teams rely on their leader for things other than the traditional goal setting, monitoring,
and providing rewards. Those functions are achieved by the team members themselves. However, team
leaders continue to play a key role in the success of the team. Specifically, they must provide various
training including:
 Team building to clarify team goals and member roles and set patterns for acceptable
interaction
 Cross training to assure that team members understand one another’s tasks
 Coordination training to allow the team to work together by improving communication and
coordination
 Self-guided correction to teach team members to monitor, assess, and correct their behavior in
the team
 Assertiveness training to help team members express themselves appropriately when making
requests, providing feedback, and other interactions among themselves.

The Leadership Challenge: Who Gets the Project?


Students are asked to make a delegation decision while considering the issue of in- and out-group.
Factors that they must consider include:
 How was the original in-group formed and how can followers become part of the leader’s in-group.
 Reviewing the rules of delegation and objectively identifying candidates without the issue of in-
group. In the United States and many other Western cultures, the expectation is that the best person
for the project should be selected based on objective criteria.
 The information regarding a potential complaint should not interfere with the current decision.
However, the information is useful feedback for the leader to review his/her action and consider the
potential for bias. The potential complaint provides an opportunity for review and self-analysis.

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Chapter 8 Experiential Exercises

Exercise 8.1: To delegate or not to delegate?


This exercise is a role play that demonstrates the elements of good delegation by providing students
with various delegation options and requiring them to make a decision regarding which one of the
subordinates should be delegated a task. The role play situation requires no prior preparation from the
instructor or the students. Having students read the basic scenario prior to coming to class can help save
some in-class time. The role play works best after class discussion of delegation in order to allow
students to apply the knowledge they acquire through the text and the class.

Total time: Minimum 45 minutes in class (10–15 minutes preparation; 25 minutes role play; 10 minutes
debriefing)

Materials needed: Enough room for several groups to role play

Role Play (35 minutes minimum; includes preparation)


Instructions for each role and manager and observer worksheets are included at the end of this chapter.
The class should be divided in groups of five students each (one manager and four subordinates). All the
names used in the role play are androgynous allowing for roles to be assigned to either male or female
students. Students assigned to role play managers can use their own names.

Review the general scenario with the whole class reminding them of the role-play rules (used in Narian
Bridges):
 Stay in the general guidelines provided by your role
 Improvise as needed while keeping goal in mind
 Practice role for a few minutes alone or with your team
 Provide rich role play so that others can respond to you
 Be as creative as you feel comfortable; some of you will play your role more intensely than others;
differences are normal
The instructor then needs to review each role with students playing that role (i.e., all managers, all
Frans, all Gerrys, etc.).

The role play takes place in two stages.


Stage 1: In the first stage the manager meets with the four subordinates to describe the new client and
ask for ideas and input from the group. This provides an opportunity for team members to reveal as
much or as little as they want about their role and their motivation and for the manager to have more
information to make a decision on who gets the new account. This stage should last no longer than 10
minutes.
Stage 2: In the second stage the manager makes a selection alone, and prepares for the meeting with the
selected employee using the manager’s worksheet in the textbook (5–10 minutes). He/she then meets
with the selected employee to hand-off the account (5–10 minutes).

The other three employees will serve as observers in the meeting between the manager and the selected
employee using the observer worksheet to evaluate the process. The selected employee should also
complete the worksheet at the end of the meeting. Remind students that they will have to share their
comments with the manager and the employee and that therefore they need to:
 Focus on specific behavior
 Be critical but constructive
 Be professional (stay away from personal comments)

Debriefing (10 minutes)


The debriefing can be done either within the groups only or both in the groups and with the whole class.
Students are often interested in other managers’ choices and their reasons. The instructor may want to
put the choices and the justifications on the board. Although the choices are often similar, depending on

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how each student has played a role, there may be interesting differences. The evaluation of the
delegation should be done in each group with the instructor’s help.

Overall: I have a used this role play a number of times in my classes. It works well and provides
students with an experience with the nuts and bolts of delegation. As with many other role plays,
students with some work experience handle the task better, although the setting provides a nice
opportunity for practice for more traditional and younger students with limited or no managerial
experience. The only drawback of the exercise is its length.

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Exercise 8.2: Strategies for becoming a self-leader?
This exercise is based on the steps to self-leadership described in the chapter. It is designed as a
developmental tool for students. It is most effective if students have a good understanding of self-
leadership concept, so it should be completed after the class presentation on the topic.

 Course Assignment
The exercise works very well as a homework/journal-type assignment requiring students to track their
own behaviors and to perform basic goal-setting in regard to areas that they would like to change.

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Self-Assessment 8.1: Delegation scale
This self-assessment is based on the typical myths about delegation and allows students to evaluate their
level of comfort and inclination toward delegation. It should be assigned as a homework assignment
prior to class discussion on delegation and used as a tool to encourage student participation in such
discussion.

Self-Assessment 8.2: Are you a team leader?


This self-assessment is based on the team leader roles presented in the chapter. It allows students to
evaluate their general ability and level of comfort with the team leadership roles. It can be completed
either before or after the discussion of team leadership.

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Leadership in Action

Whole Foods

Case summary
The case describes John Mackey, the CEO of Whole Foods and the company he has created. Whole
Foods is changing the grocery business with its focus on nature foods, bright, well-decorated facilities,
and outstanding customer service. Mackey founded the company in 1980 and has created a culture that
reflects his own values of democracy and equality. A vegan, he emphasizes healthy foods, stays
involved in his business, and practices a frugal lifestyle in spite of the considerable success of his
company. Teams are the basis of all decision making at Whole Foods; they decided whom to hire, what
products to carry, and even how to allocate raises. The company prides itself on its “Declaration of
Interdependence” which affirms the importance of employees, customers, community, and all other
stakeholders. Whole Foods implements John Mackey’s democratic ideals by sharing decision making,
sharing profits with employees, making employee fun and happiness a priority, continuously training
employees, and promoting from within to encourage and develop talent. The team-based, employee-
focused culture and structure have allowed the company to thrive and grow.

1. What are the elements of John Mackey’s leadership?

John Mackey has stayed true to his roots as, what one person describes, an anarchist. His focus on
democracy, healthy foods, and the building of community permeates his company. Even with
considerable financial success, he remains accessible and involved in his business. His deep-seated
beliefs in equality and democracy have been translated into team-based approach to management. While
he remains involved in the company, the decisions are made by teams at all levels. With a focus on
employee empowerment and development, John Mackey appears to have instituted a sense of self-
leadership at Whole Foods.

2. What makes the teams at Whole Foods effective?

The teams at Whole Foods are an integral part of the culture and structure of the company. They are not
an afterthought; they are the company. The complete involvement at all levels of decision making makes
them central to the organization and allows them to be effective. The focus on interdependence among
employees, customers, and other stakeholders further emphasizes the importance of cooperation and
working together, further reinforcing the role of the teams. Overall, the teams at Whole Foods work well
because their task is complex, the employees are committed and highly competent, and the leader and
the organization are ready for empowerment.

Copyright © 2015 Pearson Education, Inc. 142


To Delegate or Not to Delegate

Instructions for the Team Manager


You come to Sunshine with an MBA from a major state institution. Your undergraduate background is
also in general business. After your BS, you started working for a major hotel firm and, as a result of
several mergers they experienced, you have worked in different aspects of the hospitality industry for
the past nine years. You managed to quit to go back for your MBA which you finished just over a year
ago. Sunshine offered you a great opportunity just before you finished, and you joined the organization
18 months ago. You have really enjoyed your job, although it is the first time you are actually managing
people. You are responsible for their growth and development, a responsibility you take very seriously.
Your boss is only interested in results. Like many others in the industry, Sunshine has been slow at
adopting new management techniques. Many of its employees move up through the ranks without major
formal training. You are actually one of the few outside managers but your career track is very attractive
and you know that the only way to move up is to deliver results without problems. Your boss leaves you
alone and expects no requests for help.

Your employees

Fran Smith has been with Sunshine for 8 years and has been a strong performer. S/he is one of your
trusted employees.
Gerry Narden has been with Sunshine for 5 years moving up through the ranks. S/he is very eager but
makes mistakes.
Terry Chan has a 9-year tenure at Sunshine. S/he is a high performer and seems to like to do her/his
own thing with personal contacts.
J.P. Ricci is the youngest member of the team with barely one year at Sunshine. S/he is very bright but
not always very motivated.

Copyright © 2015 Pearson Education, Inc. 143


To Delegate or not to Delegate

For Managers: Decision and Meeting Worksheet

Who are you selecting? What are your reasons?

Plan the meeting during which you will delegate the task. What do you need to say? What areas do you
need to cover? How are you addressing your employees’ needs?

Copyright © 2015 Pearson Education, Inc. 144


To Delegate or not to Delegate

Instructions for Fran Smith


You have enjoyed working at Sunshine for 8 years now, but you are getting bored with the job. You
have plans to go graduate school, but except for your current boss, not too many managers of the
organization have higher-level degrees, so you are not sure that the organization would value it. You
also have recently taken on several projects in your community that you are enjoying, and you have, as
a result, started to reduce your involvement with Sunshine. You would like to talk to your boss about
your loss of interest, but are afraid that it may affect your relationship.

------------------------------------------------------------------------------------------------------

Instructions for Gerry Narden


You consider yourself one of Sunshine’s most dedicated employees. The organization has been very
good to you since you joined 5 years ago, and you love your job. The career progression has been great,
and you have dreams of some day running this place! You are eager to learn and not afraid to make
mistakes. You have made some mistakes in your new job but are now getting the hang of it, and you are
feeling very good about your performance and looking for new challenges.

------------------------------------------------------------------------------------------------------

Instructions for Terry Chan


You have been a loyal Sunshine employee and a successful performer for 9 years. You were looking
forward to becoming the manager of the team before they brought in the new boss, and you have had
trouble getting over the resentment. By all accounts, you should have had the job! You have your own
sources and your own clients, and you particularly are plugged into several major corporations that just
bring you their business. You are not planning to help the new boss look good yet, but you are taking a
wait-and-see position for now.

------------------------------------------------------------------------------------------------------

Instructions for J.P. Ricci


You are still looking for something that would really turn you on, career-wise. You know you can do the
job at Sunshine with your hands tied behind your back, and you have for the past year, but you have not
found the right challenge yet. Things just have not been interesting enough. You really like the job and
your colleagues, but you are just not sure that this is the right thing.

Copyright © 2015 Pearson Education, Inc. 145


For Employees

Observer Worksheet

What does the selected employee need to do a good job?

Evaluate the manager based on:

1. Clarity of information about the task:

2. Clarity of expectations regarding the task:

3. What are the manager’s strengths?

4. What could have been done better?

Copyright © 2015 Pearson Education, Inc. 146


CHAPTER 9
LEADING CHANGE
_________________________________________________________________________________
Chapter Overview
The leadership factors in leading change in organizations are considered. Internal and external forces for
change are presented, followed by a description of the types of change organizations and their leaders
face. Lewin’s model for change and the process of planned changed is discussed. The reasons for
resistance to change along with possible methods for overcoming it are explored. The key to leading
change is providing a clear vision and developing an organizational culture based on flexibility,
openness, and learning.

Chapter Objectives

OBJECTIVES THROUGH THROUGH FEATURES, THROUGH


BASIC TEXT TABLES, and FIGURES EXERCISES
Identify forces for change
and the role of culture in  Figure 9.1
Leadership in Action case: Best
change Buy’s almost transformation
Describe the types of
change and apply Lewin’s  Table 9.1
Figure 9.2
Exercise 9.1

change model and explain Figure 9.3


the change process Figure 9.4
Leadership in Action case: Best
Buy (p. 306)
What do you do?
Summarize the reasons
for resistance to change  Table 9.2
Table 9.3
and apply possible Leadership challenge:
solutions Implementing unpopular change
Leadership in action: Best Buy’s
almost transformation
Present the practices
necessary to lead change  Figure 9.5
Leading change: Mulally takes on
Exercise 9.2
Self-
including: Ford assessment 9.1
 Creativity and Table 9.4 Self-
innovation, Figure 9.6 assessment 9.2
 Changing the Applying What You Learn: Change
organizational culture Agents and Peer Pressure (p. 298)
 The role of
vision and exemplary
leadership
 Creating learning
organizations

Chapter Outline

The Leadership Question Change is hard and most people will resist it. Given this, should leaders
simply push change through (get it over with) or should they take time, introduce things slowly, and
give followers time to adjust?

1. Forces for change

a. Internal and external forces

Copyright © 2015 Pearson Education, Inc. 147


Internal and external forces push organizations to change (Figure 9.1). External forces include
economic, political, social, and demographic factors as well as other organizations and technological
advances. Internal factors include the performance gap, which is the gap between expected and actual
performance, new leadership, low satisfaction, new mission, and conflict within the organizations. The
case of the FBI is introduced.

b. Culture and change

Culture at the national and organizational levels can affect how people and organizations manage
change. Tolerance for ambiguity and perceptions of times are two cultural values that impact how
people manage change.

2. Types and process of change

a. Types of change

Types of change include planned, unplanned, evolutionary, and revolutionary change (Table 9.1). Each
type requires different types of actions from leaders.

b. Lewin’s model for change

Lewin’s force field model for change is presented (Figure 9.2) and a three stage process is described.
The three phases of unfreezing, changing, and refreezing are presented (Figure 9.3). Each stage is
described with examples from 3M and Avon. The importance of the often-ignored unfreezing and
refreezing phases is highlighted.

c. Process of planned change

Planned change typically follows a six-step process that includes recognition of the need for change,
development of ideas, adoption of an idea, implementation, allocation of resources, and evaluation
(Figure 9.4). The case of the FBI and a GM plant are presented as examples.

d. Dealing with unplanned change

Steps for managing sudden change are presented including creating a flexible organization, being
proactive, rotating leaders, and experimentation.

3. Resistance to change and solutions

Change, no matter how positive, leads to some degree of resistance and stress.

a. Causes of resistance

Causes of resistance to change fall into the three categories of organizational, group, and individual
factors (Table 9.2). The example of Ford Motor Company is used to illustrate them.

What do you do? presents an example of a leader having to push through change that is not supported
unanimously but needs to be implemented quickly. Even when there is little time and not much
opportunity to prepare the team and establish the need for change (unfreezing), leaders can still seek to
involve their followers in other stages. For example it would help to get input into how to do what is
required to do, how to divide the task, how to minimize the negative impact, and so on. Any input helps
in reducing resistance. In addition, the leader has to communicate extensively and as openly as possible
with followers.

b. Solutions

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The solutions for resistance to change need to match the various causes. Possible solutions include:
education, participation, facilitation, negotiation, manipulation, and coercion (Table 9.3).

4. Leading change: Creativity, vision, organizational learning, and organizational culture

Leaders have a variety of tools and methods available to them to implement change.

a. Creativity

Creativity, also called divergent or lateral thinking, is the ability to link or combine ideas in new ways. It
is a key factor in generating and implementing meaningful change. Leaders can put in place several
processes to encourage creativity in their team or organization including: avoiding autocratic styles, an
open organizational culture, encouraging a questioning attitude, and tolerating mistakes and
experimentation.

b. Improvisation

Another related leadership factor in successful change is the leader’s ability to improvise, a process that
involves creation of something spontaneously without specific preparation, but with considerable
overall expertise and experience.

Leading Change: Mulally Takes on Ford presents the CEO of Ford who has changed the culture of
the car manufacturer and has helped it remain profitable. He faced a classic case of inertia and
complacent culture when he took over in 2006. Through communication, setting a new shared mission,
structural changes, and a personal approachable style, Mulally changed the culture of the company and
encouraged employees to be innovative.

c. Visionary and inspiration

The concept of visionary leadership focuses on providing a clear vision and inspiring followers as a key
to successful change. In addition, followers must be empowered, given flexibility, and encouraged to
cooperate.
A motivating vision is part of exemplary leadership that supports change (Figure 9.4). Such a
leader sets clear standards, expects the best from employees, encourages the heart, provides
personalized recognition, celebrates success, and role models desired behaviors.

d. Learning organizations

Organizations where people expand their capacity to create, where innovation and cooperation are
nurtured, and where knowledge is transferred are learning organizations that are likely to handle change
well (Table 9.4).
Several blocks to being a learning organization are presented (Figure 9.6). Organizations can
avoid such blocks by remaining open to new ideas, developing local solutions, providing time for
learning, and putting in place appropriate leadership. The example of 3M is presented.

e. Positive approach

The concept of positive leadership discussed in Chapter 6 is presented as an effective approach for
leading change. Knowledge alone does not change behavior; rather having examples and role models
that show a positive outcome can be used as a powerful tool to create and encourage change.

f. Changing organizational culture

Leaders have considerable influence on their organization. They can encourage change by
communicating priorities clearly, being a role model, and allocating resources and rewards to support
change.

Copyright © 2015 Pearson Education, Inc. 149


Leadership Question Revisited Although imposing change from the top and implementing it quickly is
tempting and may provide short term and rapid results, it often creates backlash and resistance.
Investing time and resources to prepare and involve followers is more likely to be effective on a long-
term basis.

Applying What You Learn: Guidelines for Change presents practical tips for changing organizations
including clear communication, relying on change agents, involving people in the change process, being
supportive, managing higher levels of the organization, and role modeling.

5. Summary and conclusions

Review and Discussion Questions


1. Describe the internal and external forces for change.

Organizations face pressure for change from both inside and outside. Internal factors include: low
performance, new leadership, low satisfaction, new mission, and conflict. Low performance, also
referred to as the performance gap, is the difference between expected and actual performance. Various
changes are implemented to address the gap. New leadership from either inside or outside the
organization is another factor that leads to pressure for change. Additionally, low satisfaction is likely to
push organizations to make changes, as are a new mission or on-going conflict inside the organization.
External forces for change include economic and political changes. Additionally, as cultures evolve and
social changes occur, organizations are often forced to change to address them. Demographic changes
such as an aging population or a more diverse workforce further pressure organizations to make internal
changes. Finally, technology and changes in an industry can force changes in organizations.

2. What role does culture play in how people perceive change?

Culture can impact how leaders view change, either as an opportunity or a threat. Tolerance for
ambiguity and the perception of time are two cultural values that impact how we view change. Not
tolerating ambiguity and being risk averse, which are values in cultures such as Greece, Portugal, and
Japan, can lead leaders to view change as a threat and look for ways to neutralize its impact. In other
cultures such as the United States and Canada, the short-term orientation and tolerance for ambiguity
leads leaders to manage change more easily and make adjustments as the need arises.

3. Describe the different types of changes organizations face.

Type of Change Description


Planned Change that occurs when leaders or followers make a conscious effort to
change in response to specific pressure or problem.
Unplanned Change that occurs randomly and suddenly without the specific intention of
addressing a problem.
Evolutionary Gradual or incremental change.
Revolutionary or frame- Change that is rapid and dramatic.
breaking

4. Explain Lewin’s model for change and its implications.

Lewin proposed that organizations face pressure for status quo and for change. When forces for change
are stronger than those opposing them, the organization will move toward making changes. When forces
for status quo are stronger, people will resist change. To implement change, leaders must either increase
the strength of the forces for change or decrease those that resist it. Additionally, Lewin proposed that
change occurs in three stages of unfreezing, change, and freezing. In the first stage, organizations
prepare for change and understand the need for change. After change is introduced in the second stage,
there must be a period during which change is allowed to freeze and settle down. Organizations often

Copyright © 2015 Pearson Education, Inc. 150


focus on the second stage and ignore the first and third, not taking enough time to prepare for change or
to support it once it has taken place. Successful change requires careful attention to all three stages.

5. Present the six steps in the process of planned change and describe the role of leaders in each
step.

The six steps are: recognition of the need for change, development of ideas, adoption of one or more
ideas, implementation, allocation of resources, and evaluation. In the first three stages, leaders must
prepare the organization for change (similar to Lewin’s unfreezing stage) and provide opportunities for
as much input as possible to develop the best alternatives and get as much buy-in as possible. Once an
idea is selected and implemented, leaders must support the change through allocation of resources such
as training, time to learn, and financial rewards. Finally, the leader must support evaluation of whether
the change has been effective and be ready to start the process over if the desired state is not achieved.

6. What can leaders do to prepare their organizations to deal with unplanned change?

Actions that leaders can take to prepare for unplanned change also support change in general. They
include:
 Avoid becoming too formal, hierarchical, rigid, and inflexible.
 Infuse moderate amounts of uncertainty, unpredictability, and spontaneity into decisions to help
prevent complacency.
 Stay on the offensive and be proactive with introducing new strategies, products, services, or
processes.
 Replace and rotate leaders to bring in fresh ideas, methods, and visions
 Experiment often with new methods, products, processes, structures, and so forth, to help

7. Present the organizational, group, and individual causes of resistance to change.

Organizational Causes Group Causes Individual Causes


Inertia Group norms Fear of the unknown
Culture Group cohesion Fear of failure
Structure Leadership Job security
Lack of rewards Individual characteristics
Poor timing Previous experiences

8. Describe ways in which resistance to change can be reduced and explain when each methods
can be used.

Method When to Use Advantages Disadvantages


Education and When there is Provide facts Time-consuming
communication: lack of and once when a large
Provide information and persuaded, number of
information fear of the people are less people are
unknown; in all likely to resist involved
phases of the
change process
Participation and When people do Lead to Time-
involvement: not have all the commitment and consuming; risk
Engage information or can provide of inappropriate
employees when they have richer change being
power to block alternatives and implemented
implementation; ideas
in all phases of
the change
process

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Facilitation and When people The only option Time-consuming
support: are resisting when adjustment and high-risk of
Understanding because of is the cause of failure
and various factors such as resistance
support fear; during the
change and
refreezing
phases
Negotiation and When there can Relatively easy Can be
agreements: be winners and to implement; expensive, time
Engage parties losers and only option to consuming and
who can block groups and balance power lead to continued
change individuals and further
have power; negotiation
during the
change and
refreezing
phases
Manipulation When nothing Relatively quick Can lead to
and cooptation: else works or and inexpensive mistrust and
Bypass resistance other options resentment
through promises are too
expensive;
during the
change phase
Explicit or When there is Can be fast and Can lead to
implicit coercion: no time and effective in short resentment and
Impose change nothing else term to end morale problems;
through authority works; when resistance only effective in
and fear others have the short run
power; use
occasionally;
during
unfreezing and
change

9. Compare and contrast creativity and improvisation and explain their role in leading change.

Creativity is the ability to link or combine ideas in novel ways. Improvisation is creating something
spontaneously without specific preparation. Both are essential in leading change. To encourage
creativity, leaders must be open to participation, create flexible structures, have an open culture,
encourage a questioning attitude, and tolerate mistakes. Improvisation can only happen with a
combination of planned and unplanned activities and requires expertise and perspective on the situation.
Leaders and followers must understand a situation before they can improvise and be creative.

10. What is visionary leadership and how does it relate to change?

Visionary leadership focuses on providing a vision to guide and inspire change. In addition to providing
a vision, visionary leaders empower followers and express confidence that they can achieve high results.
They encourage flexibility and are open to change. Finally, they encourage teamwork and cooperation to
implement change. Visionary leaders are those who challenge the process, create a shared vision, role
model the change they want, enable followers to implement change, encourage and motivate followers,
and celebrate successes at every stage.

11. How can positive leadership support implementation of change?

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Being positive is not going to prevent all resistance to change, but the leader’s optimism and passion can
be infectious and encourage followers to weather the challenges of implementing change. Additionally,
leaders’ role modeling of desired behavior is also powerful.

12. What are the elements of an organizational culture that support change, and what role do
leaders play in developing that culture?

An effective way to implement successful change is to develop a culture that accepts change and is
ready to learn. Such a culture is called a learning organization where people continually expand their
capacity to create, where innovation and cooperation are nurtured, and where knowledge is shared and
transferred throughout the organization. The elements of learning organizations are:

Element Description
Shared vision Using cooperation and openness to build a shared vision through a common
identity and a common goal of the future that leads to commitment.
System thinking Understanding inter-relations and the invisible and visible bonds that connect
people inside and outside the organization.
Mental models Being aware of stated and unstated assumptions and mental models that
guide behaviors and decisions and developing new ones based on openness
and cooperation.
Personal mastery Continually clarifying and developing personal visions and goals, and
expanding skills sets and levels of proficiency.
Team learning Developing synergy and the ability to think and work together to question
assumptions and build new processes.

Leaders play a key role in creating and supporting learning organizations by building an open and
supportive culture that supports transformation and change. Being open to new ideas, encouraging
followers to develop local solutions and providing time for learning and experimentation are part of the
leader’s role in learning organization.
Additional leaders can take a positive approach that is optimistic and supportive. Rather than
pushing change by providing more information and knowledge, a positive approach focuses on
providing examples of successful change and its positive impact that encourages followers to adopt
change.

The Leadership Challenge: Implementing Unpopular Change


The challenge for this chapter presents a case of a manager who must implement several unpopular
changes that he/she does not agree with and that come on the heels of other recent changes. There has
been no input into the change and it is implemented top-down. None of the recommended processes for
successful change in this chapter have been implemented. There has not been a period of unfreezing,
although some of the changes may be appropriate, and there was little freezing last time change was
announced.

The case is relatively typical of what mid-level leaders face in many organizations. They are charged
with putting in places changes without much warning or input.

1. How to approach the team?

The best strategy is presenting the facts clearly; give it to them straight. The plan required from upper
management must be presented as it is. The team leader should not either defend or oppose the plan. It
is important to retain “authenticity” without criticizing upper level decision making. The change is a
“fait-accompli.” There is not much discussion besides venting, which should be allowed, but controlled.
The challenge now is how to move to implementation. This is an area where the team can have input.
Within the limits set by upper level leadership and by the situation, what can the team do to make this
work? What are some strategies and processes they can implement? How can they reduce the negative

Copyright © 2015 Pearson Education, Inc. 153


impact? All these are areas of participation than can help reduce resistance and provide support within a
cohesive team.
2. How much of your personal feeling should you share?

Authenticity and honesty are important factors; however, it is important to keep the information sharing
to statements such as “I don’t like this much myself either” or “I know how you feel”. However, the
team leader’s behaviors and reactions are role models for the followers. Therefore, she/he must present
an optimistic and positive front to encourage the followers to accept and manage the change well.
Negativity from the leader is likely to feed into the team’s anger and be unproductive.

3. What are some key actions?

 Provide as much information as possible; ask your supervisor for information and share it with
the group in a timely basis
 Seek training and resources for the group
 Allow some venting, but keep it focused and limited
 Empathize and encourage the group to focus on what it can do rather than what it does not like
 Provide as many opportunities for participation and input into the implementation as is possible
 Seek support for the group from HR if available
 Help the two members who are let go through team support, recommendations, emotional
support, and through organizational support if available

Copyright © 2015 Pearson Education, Inc. 154


Chapter 9 Experiential Exercises

Exercise 9.1: Analyzing and Planning for Change


The exercise encourages students to consider the steps in planned change in a systematic way. It is
designed to familiarize them with those steps and teach them how they can be implemented to plan for
change.

Time needed: 30 to 40 minutes for preparation; 2–5 minutes per group for presentation if used as an in-
class assignment

Materials needed: Paper and pencil; room for teams to meet

Part I: Form teams and select a problem


Students form teams of 4 to 6 members either as assigned by instructor or based on previously existing
teams in class. Each team considers various problems that need change in their organization or other
settings they are familiar with. They then select one of the team members’ “problem” as the issue for
which they will plan a change process.

Part II: Define the problem


The second step involves a careful definition of the problem. In this step, team members should
consider all the different issues that may be involved with the problem and make sure that they have a
common understanding of what the problem really is.
For example, if the problem is that two departments do not cooperate well, they should
consider personal and organizational factors that may contribute to the lack of cooperation, the various
internal and external people who are affected, the impact on performance, the physical setting, and so
forth.
Another example would be poor performance of a sales team in a retail environment.
Considering the various employees, the context (e.g., time of year), the sales managers, the retail space,
the products they sell, the types of customers they serve, and so on, can all be important in
understanding the problem.
Careful problem definition will help the teams narrow their focus when planning for the change
and assure that their plans provide a possible solution to the problem.

Part III: Plan for Change


This section focuses on the actual implementation of the change and requires students to consider how
to manage the unfreezing, change, and refreezing phases. This is a brainstorming process where they
should be encouraged to consider as many issues and perspectives as possible rather than jump into
quick decision and action plan. This part should take them the longest to complete as it involves
multiple steps and consideration of many diverse factors.

Part IV: Presentation


Each group provides a 2 to 5 minute presentation of the issue they chose to address and their team’s plan
to implement a change to address the problem.

 Course Assignment
This exercise can be used as a team assignment for the course by asking teams to identify a problem and
present a plan for change to address the problem. The assignment can be as simple or as complex as an
instructor chooses to make it. It has the potential to be a highly involved assignment, even requiring
students to seek help and involvement from the organization, or it can be a simple hypothetical exercise
to make them familiar with the steps in the process of planned change. Because of the potential
complexity and the need to brainstorm, this is a team rather than an individual exercise.

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Exercise 9.2: Creativity and Parallel Thinking—The Six Hats Methods
This exercise is a highly engaging activity based on the work of Edward deBono. It teaches students a
method for encouraging creativity that uses parallel thinking and exploring “what can be” rather than
arguing. All of the group’s energy is focused on the same goal at any one time. It is time consuming, but
well worth the investment in class time.

Time needed: 60 to 75 minutes; 10 minutes for preparation, 45 minutes for the group process, 15
minutes for discussion and debriefing.

Materials needed: Time keeping tool; paper hats of different colors can useful and fun.

1. Instruct the students to follow the directions in the exercise and select a topic
2. Explain the meaning of each of the color hats and provide examples to assure that students
understand each:

White Hat: Neutral and objective: Focus on objectivity, facts and figures. Ask questions such as: What
information do we have? What do we know? Are there any data available on this? Are we sure this is a
fact, not just an opinion?

Red Hat: Anger (seeing red), rage, and emotions: Focus on the emotional view. Ask questions such as:
How does this make people feel? Why do people get so angry or happy?

Black Hat: Somber, serious, and cautious: Focus on pointing out weaknesses and problems. Ask
questions such as: What are the shortcomings? What are the problems? What is the negative impact?

Yellow Hat: Sunny and positive: Focus on hope and positive thinking; look at the best possible
outcome. Ask questions such as: What is the up side? What are the benefits and advantages? How can
this benefit us?

Green Hat: Abundance: Focus on creativity and new ideas. Ask questions such as: What are the
different ways of looking at this? What are some crazy approaches to this? What could we do if there
were not limits or restrictions?

Blue Hat: Sky view: Focus on control, integration, and putting together of ideas from a broad
perspective. Ask questions such as: What’s the view from 10,000 feet? How does it impact the overall
system or organization? What’s the big picture?

3. Review the rules with the students and insist that they follow them closely:
 Designate a facilitator who will keep track of time, direct the group to switch hats, reiterate
their function, and remind everyone of the rules. The facilitator will use language such as “now
let’s all put on our red hats” to transition from one hat to the other.
 Always refer to the hat colors, not the function. For example, you can say “Let’s put on our
white hats” not “Let’s look at the facts.”
 Begin and end with the Blue Hat. At the beginning, it allows you to address general issues and
what you are doing (i.e., reviewing the rules and deciding the order of the hats). At the end, it
allows you to review and sum up.
 You may put the other hats on in any order your group wants.
 Keep your “hat on” when you are in a color mode. For example, if the group is wearing the
green hat and focusing on creativity, members cannot decide in the middle of the green period
to put on their black hats and discuss the weaknesses of the ideas being proposed. You can only
switch hats when time is up and the whole group wears a different hat.
 You can also give each person a minute or two to think when you start and when you switch
hats. With the hats “on,” each member has about one minute to express his/her views under
each color. The total amount of time will depend on the number of people in your group. For
example, four people will take about 24 minutes to discuss an issue (6 x 4 = 24) + an extra 4

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minutes for the blue hat at the end + 6 minutes for reflection, for a total of 34 minutes
(approximately).
 Have fun!

4. Review and debrief

Review the process focusing on benefits and difficulties (what was easy, what was hard), what could
have been done differently and on applications to real life.

Overall: This can be an engaging exercise. The biggest challenge students have is keeping to the theme
of the hat and not arguing. If you have large groups, designating one facilitator who does not participate
can be helpful.

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Self-Assessment 9.1: Building Credibility
Having credibility is suggested to be one of the central factors in effective change-oriented leadership.
This self-assessment is designed to allow students to evaluate their credibility and identify areas where
their actions may be jeopardizing their credibility.
The first part includes a questionnaire based on elements of credibility identified by Kouzes
and Posner. The second part requires students to identify areas where they may be weak and develop an
action plan to enhance their credibility. Students should be encouraged to develop their action plan
following the principles of good goal setting. The goals should be: behavioral, specific, measurable,
achievable and reasonable, and have a clear timeline.
This is a very effective developmental exercise particularly for students who have some work
experience.

 Course Assignment
This exercise can be used as an assignment for the course by asking students to analyze the elements of
their credibility and present an action plan to improve it.

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Self-Assessment 9.2: Creativity
Creativity is an important part of the ability to manage change. Creative people are open to change and
new experiences and seek out moderate amounts of risk and challenge. Another component of
successful creative people is discipline and organization. Many students are under the impression that
creativity requires chaos and therefore see their own disorganization as a positive step toward being
creative. However, research about creative people shows that they often maintain considerable order in
aspects of their life that are not related to the creative expression. For example, writers will keep their
office fully organized, maintain a strict routine and discipline, and keep order around them so that they
are free from stress and can be creative in their writing.
This self-assessment should be assigned to be completed prior to class. Students having their
score on each of the scales allows for a much richer learning environment.
It is important to stress that the self-assessment is meant to develop a student’s self-awareness.
This scale has not been scientifically tested and validated. It provides students with a general description
of their behaviors and preferences.

 Course Assignment
Students can be asked to describe and analyze their scores on creativity with a focus on identifying
resulting strengths and weaknesses. Students should be reminded that the changing personality is not the
goal, rather understanding should be their focus. They can also identify behaviors they may want to
change, or actions they could take to become more creative. By developing increasing self-awareness,
they can build on their strengths and compensate for their weaknesses.

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Leadership in Action

Best Buy’s Almost Transformation

Case summary
For several years, the electronic store Best Buy instituted a flexible work schedule for its headquarter
staff and employees called ROWE (Results Only Work Environment). The program removed the time
clock and the traditional necessity to be in the office from the workplace. Employees were evaluated
based on their performance, the results they showed, and how well they met their goals rather than
based on the time they sat at their desk or spent in meetings. Considerable improvement in productivity
and morale indicated that the program was effective. The program was started by two mid-level HR
employees and for several years implemented in various parts of the organization before top-level
management was informed of it. However, Best Buy’s overall performance and sales lagged. Although
there was no evidence that ROWE was to blame, the new CEO Hubert Joly revoked the program in
2013 citing the need to have a discussion about flexibility. With or without ROWE, Best Buy continues
to struggle.

1. What are the internal and external forces for change at Best Buy?

ROWE was started because of considerable employee dissatisfaction with lack of work–life balance
which was the primary force for change. The availability of technology such as wireless access also
made the change possible allowing employees to stay connected to their office and their work almost
anywhere. Best Buy has been under pressure to improve productivity to stay competitive and respond to
the changing needs of its market which includes many more women making the technology purchase
decisions. The company had already implemented many other changes and therefore was used to
change. Joly revoked ROWE at the heels of poor overall performance, although there was no evidence
that the flexible schedule impact productivity negatively.

2. How were the two changes (ROWE and its removal) implemented?

ROWE started in middle levels of the organization, implemented by employees and managers who had
considerable input to customize it for their own needs. After several years of success and positive
results, upper management was finally brought in to assure their support. After they approved of the
program, it was then introduced to the whole company while still providing choices for various
managers to either adopt the program or stay with the old systems. The productivity data and the
testimony of the employees and managers who are on ROWE have been the main tool used to convince
others of the need to implement the new system and to complete the unfreezing phase. Education is the
primary tool used to overcome resistance to change.
The revocation of ROWE was a simple edict from the CEO with apparent support from the
leadership team. No discussions, no employee input.

3. What role did leaders play in the change?

When ROWE was implemented, the middle-managers were the ones who initiated and drove the change
process. Upper management was only involved when the program showed results. Their support is of
course essential to the success of the program. Many middle-level leaders, however, were still resisting
the change process whereas employees have been much more receptive. However, the program and its
implementation involved people at many different levels of the organization, leading to its eventual
success.
In the case of the revocation, the leaders took on all the responsibilities and simply imposed a
top-down change.

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CHAPTER 10
DEVELOPING LEADERS
_________________________________________________________________________________
Chapter Overview
The elements of leader and leadership development are presented along with the factors involved in
learning and the criteria for effective leader development programs. The methods used in developing
leaders are discussed, compared, and evaluated. The role culture can play in leader development is
explored and the overall effectiveness of development programs reviewed.

Chapter Objectives
OBJECTIVES THROUGH THROUGH FEATURES, TABLES, THROUGH
BASIC TEXT and FIGURES EXERCISES
Define the elements of
leader development  Figure 10.1
Leadership in action case: Developing
Self-
assessment
leaders at SW Airlines 10.1
Explain the factors
involved in learning  Figure 10.2

Review areas that are


addressed in leader  Table 10.1
Figure 10.3
development
Discuss the methods
used in leader  Table 10.2
Table 10.3
Exercise 10.1

development and the Figure 10.4


benefits and Table 10.4
disadvantages of each What do you do?
Leading Change: Howard Schultz
Consider the role of
culture in leader  Table 10.5

development
Summarize the role of
the person and the  Figure 10.5
Applying What You Learn: Personal
organization in effective Development
leader development Leadership Challenge: Finding the
right fit

Chapter Outline

The Leadership Question How successful is leader development? What can we teach and can people
really learn?

1. Basic elements of leader development

Leader development focuses on ongoing, dynamic, and long-term change or evolution that occurs as a
result of experience and on expanding a person’s capacity to be effective as a leader. Leadership
development considers the overall organization’s capacity to be effective through its leadership. The
levels of development are presented (Figure 10.1).

a. Factors in learning

Learning is defined as a relatively permanent change in behavior, knowledge, or skills that results from
experience. Learning requires awareness and willingness to learn, capacity to learn, the right
organizational climate, and exposure to the right experiences (Figure 10.2). It also requires persistence
and practice.

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b. What is developed: The content

Leader development addresses various areas including: basic knowledge, personal growth, skills,
creativity, and strategic issues (Table 10.1).

2. Required elements of effective development programs

Factors that should be used to determine the effectiveness of a development program include:
assessment, awareness, rich experiences, opportunity to practice, feedback and follow-up, support from
the organization, and fit with the organization (Figure 10.3). In addition, an effective program should
have clear goals, use a combination of methods, and conduct assessment and follow-up.

What do you do? presents the challenge of training a person to learn “soft” people skills. The first step
is to clearly and directly discuss the issue with the employee and explain how this weakness in people
skills can be an obstacle to his success and performance. The least costly method for training is having
the person work with a mentor who is a successful senior inside in the company. The person’s success
and tenure should provide the credibility needed. The shadowing and observation would provide the
basic information needed. Once the employee understands the methods that he needs to learn and
employ, coaching, again from an insider, would help practice and learn those behaviors. Classroom
instruction (such as seminars) can further reinforce the learning. Using inside mentors and coaches is
less costly than hiring external consultants, although having outside people could be more effective.

3. Methods of leader development

The various methods of leader development are presented and evaluated.

a. Self-awareness

Self-awareness is the first step in and the cornerstone of any development program. It involves
clarifying values and priorities, seeking new experiences, and seeking feedback through formal and
informal channels. Although it is an essential step in development, by itself it has limited effectiveness
(Table 10.2).

b. Experience

Experience is the core of any development program. On the job experience or experience through
various training provides opportunities to challenge the leader and stretch his/her abilities. It provides
one of the richest and most effective methods of leader development (Table 10.2).

c. Developmental relationships: Coaching and mentoring

Coaching and mentoring are powerful methods of leader development to help leaders grow both
personally and professionally. Coaching is individualized feedback on behavior and performance with
focus on future improvement. It is a highly effective method of leader development particularly when
combined with other methods (Table 10.2). Elements of effective coaching are presented (Table 10.3).
Mentoring is a supportive long-term formal or informal professional relationship. It is less focused and
specific than coaching, but can be helpful as part of a program (Table 10.2).

d. Feedback intensive programs

Providing comprehensive and extensive feedback from various sources to leaders about their behaviors
and performance can be key to their development (Figure 10.4). Such programs are highly popular and
can be effective if certain criteria are considered (Table 10.4).

e. Outdoor challenges

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Although popular and entertaining, the effectiveness of outdoor challenges as a leader development tool
is not well established (Table 10.2).

Leading Change: Howard Schultz presents the CEO of Starbucks and his focus on employees and on
their well-being and development. Such attention to employees is at the heart of the success of the
company.

4. Development and culture

The appropriateness and effectiveness of leader development programs depends on the cultural context
in which they take place. The communication context and cultural values of individualism, action-
orientation, tolerance of ambiguity, perception of time, and power distance can all impact what program
is effective (Table 10.5).

Gender and diversity are both factors to consider in leader development. Lack of opportunity to develop
leadership skills is often cited as the cause of poor representation of women and minorities in leadership
roles. Providing varied development opportunities, encouraging developmental relationship, and
developing networks are some of the solutions.

5. Effectiveness of development

The Leadership Question Revisited Reviews the importance of desire or motivation to learn and
opportunity to practice in development, along with the need for organizational support. There is a need
to carefully evaluate the effectiveness of various leader development programs. Several factors play a
key role in their effectiveness (Figure 10.4).

a. Organizational and personal factors in development

Personal commitment, organizational commitment, and the fit between the person and the organization
are key factors in making development succeed.

Applying What You Learn: Personal Development provides guidelines for individuals to develop
their own leadership skills. Openness to new experience, seeking volunteer work and feedback, focusing
on understanding one’s strengths, and persistence and practice are key.

6. Summary and conclusions

Review and Discussion Questions


1. What is the difference between leader and leadership development? Why is the distinction
important?

Development is an ongoing dynamic, long-term change or evaluation that occurs because of various
learning experience. Leader development focuses on the individual leader and providing him or her with
the tools to improve. Leadership development focuses on an overall organizations capacity to get the
work done through its many leaders. While the methods are sometimes similar, it is important for
organizations to be clear on which level they are focusing on and provide the appropriate program.

2. What are the five factors in learning? What role do they play in leader development?

Learning involves a relatively permanent increase or change in behavior, knowledge, or skill that comes
as a result of experience. There are five factors involved in learning. First, the person must be willing to
learn which requires an awareness of where they are and what they know. They must be both ready and
motivated. Second, the person must be able to learn through the right combination of intelligence and
personality traits. Third, the person must have access to the right opportunities to be able to learn.

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Fourth, is providing experience with success so that the person can achieve a sense of self-efficacy.
Finally, the formal and informal culture of the organization must support and encourage learning.

3. Describe the areas that are typically addressed in developing leaders.

Area Description
Basic knowledge Information about content of leadership; definitions; basic
concepts such as communication, feedback, contingent
rewards; typically through classroom education
Personal growth Self-awareness and understanding strengths and
weaknesses; getting in touch with personal values, dreams,
and aspirations
Skills development: supervisory, How to apply knowledge; includes supervisor and
managerial, and interpersonal skills managerial skills such as planning, goal setting, and
monitoring, as well as conceptual skills such as problem
solving and decision making, and skills related to managing
interpersonal relations
Creativity Expanding ability to think in novel and innovative ways
and to think “outside the box”
Strategic issues Developing mission; strategic planning

4. Explain the criteria for effective development programs. Which ones do you think are most
important? Why?

There are eight criteria that can be used to determine the effectiveness of a development program. First a
development program must provide leaders with assessment about their current abilities, strengths,
weaknesses, and so forth. The information leads to the second criteria which is self-awareness and
motivation. The third factor is availability of and exposure to rich experience that encourage learning.
Fourth, leaders must have opportunities to practice the behavior and skills they learn in the development
process. Fifth, there must be feedback about the progress and follow-up about what needs to be
adjusted. The other two factors that support effective development are presence of role models and
support from the organization. Finally, development cannot be effective if what is taught does not fit
well with the organization.
The self-awareness and fit can be argued to be the most important two factors. Without self-
awareness, there is not interest and motivation to learn. Without a good fit with the organization, any
learning will go to waste.

5. Compare and contrast the methods of leader development described in this chapter. What
advantages and disadvantages do they each provide? When should they be used?

Criteria Assessment Individual Rich Feedback on Support Fit and


Awareness Developmental Opport New from Integra-
Experience unity Learning and Organiz- tion
for Follow-up ation
Practice
Self-   __ __ ? __ __
awareness
Experience ?      
Coaching   __    
Mentoring   __ __ ?  
Feedback-   __ ? __ ? ?
intensive
programs
Classroom ?  __ ? ? ? ?
education
Outdoor __ ? __ __ __ ? ?
challenges

6. What are the core and cornerstone of development? How are they related?

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Self-awareness is the cornerstone of any development program. Leaders must be aware of their own
strengths and weaknesses, leadership style, skills, and behaviors before they undertake any
development. The core of development is being exposed to a variety of developmental experiences that
challenge leaders and help them learn and practice new behaviors. Self-awareness and experiences are
closely related in that without one or the other, learning and development cannot take place.

7. How are coaching and mentoring similar and different?

Coaching and mentoring are both developmental relationships. Coaching involves providing
individualized and constructive feedback about current behavior to improve the future. It is specific and
task-related. Mentoring is a supportive long-term, formal or informal relationships that also provides
feedback about behavior and performance but tends to be more generic and not as focused on specific
behaviors or skills. Both coaching and mentoring depend on establishing trust.

8. Describe the characteristics and benefits of feedback intensive programs.

Feedback intensive programs provide leaders with feedback about their style and behaviors from many
sources including followers, superiors and, in some cases, outsiders to the organization. The leader’s
self-assessment is also included. The feedback is provided objectively and sources remain anonymous.
Such programs are ideal for increasing awareness and can be highly effective when combined with
coaching and mentoring to address needed areas. Handling the information professionally is key to their
success. Specific factors that contribute to their success include the following:

Factor Description
Organizational buy-in and readiness All levels of the organization must be well informed and
prepared regarding process, content, and goals of program.
Top management support is particularly essential.
Confidentiality and careful Maintaining anonymity of the raters and confidentiality in
administration the process assure continued trust in the results and goals.
Careful administration of surveys and handling of data are
also essential.
Well-trained facilitator Program success requires the skills of a well-trained,
professional, internal or external facilitator to help
interpret the information and deal with sensitive data and
discomfort.
Focus on behaviors The feedback should focus on specific behaviors that are
related to job performance rather than general evaluative
statements.
Clear explanation of purpose and goals Those providing feedback and the leader receiving the
feedback should be very clear on the goal of the program
and how data will be used.
Separate feedback from groups Present the leader with separate feedback from each group
or source to help clarity, interpretation, and understanding.
Follow-up The initial step of increasing leaders’ self-awareness must
be followed up with action plans.
Combine with other developmental The feedback increases awareness but without other
programs developmental tools, does not provide the leader with the
means of changing behaviors.

9. What role can classroom education play in leader development?

Classroom education is a highly popular method of leader development. It tends to be efficient and
allows organizations to convey knowledge to large groups of people in a consistent manner. It is used
extensively at the supervisory and mid-level manager levels. It can be a good method of increasing self-

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awareness and may provide some, but probably limited, opportunities for practice through cases and
exercises. To be effective, classroom education must be followed with other opportunities to practice.

10. What is the role of culture in leader development? What cultural factors must be taken into
account when implementing a program?

Cultural values affect how the learning process is implemented, how feedback is provided, and the
setting in which learning and development can be optimized. Leader development therefore must be
considered within the cultural context. Below are the cultural values and how they impact development.

Cultural Value Potential Impact on Leader Development


The communication context (high- How information is communicated; how feedback is given;
low); directness who provides feedback; directness of message in case of
assessment and self-development
Individualism–collectivism Focus of development on the individual leader or on the
group; setting for development and training
Action-orientation Content of development and training focused on practical
matters and hands-on training or on theoretical
understanding and conceptual development
Tolerance for ambiguity Degree of exposure to new and challenging situations
Perception of time Focus on quick and short-term results or on long-term
development
Power distance and equality Development provided to all or only individuals identified
as high potential; implementation of 360 degree feedback

11. What are specific issues to consider when developing women and members of minority
groups?

Women and minorities have specific development needs that cannot always be addressed through a
generic development program. Women and minorities have differential opportunities for growth and
limited exposure to development opportunities in many organizations. They are often evaluated based
on norms that are developed for white males and that may not be as relevant for them. A development
program that supports the growth of women and minorities must consider the following:
 Opportunity to participate in single-identity development programs that reinforce validation,
provide role models and networking, and can make available relevant content to address specific
concerns
 Encouraging developmental relationships through formal and informal organizational programs to
assure that women and minorities have access to powerful coaches and mentors who are both
similar to and different from them
 Developing networks that can help women and minorities in their career development process

12. What are the organizational and personal factors in development?

The key to successful development is a good fit between the person and the organization. Personal
factors include personal commitment on the part of the leader. Leaders must be committed to their own
development. The organization must also show commitment and resources by providing the right
amount of support and opportunities. The development program must reflect organizational vision,
mission, and strategic goals and fit the leaders’ personal goals to a reasonable extent.

The Leadership Challenge: Finding the Right Fit


The challenge presents a dilemma of whether one should commit more time and energy to an
organization that may not be a good fit in order to be promoted within that organization. It is designed to
help students understand their priorities and values and consider the benefits and disadvantages of
continuing to work in an organization that does not fit them well, but provides a stable income.

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Such a situation is relatively common for both undergraduate and graduate students who often work at
jobs that pay the bills, but do not necessarily fit their values and passion. While the idealist view is to
follow one’s passion and bliss all the time, the practical aspects of daily life do not make that always
possible. Additionally, while an organization may not be a great fit, many young students do not yet
fully know what their passion is, making it harder to pursue.

1. Factors to consider are:


 Immediate needs against long-term goals
 Clarity of long-term goals and values (do you really know what you want?). It is important for
the individual to carefully assess what his/her priorities are.
 Potential long-term benefits of the training program. Are the skills transferable to other
organizations? Can they help in other jobs or in searching for other jobs?
 What are some other options? Is there a way to move within the company? What else can be
done to create a better fit between the person and the current organization?
 What are the costs of looking for another job? Consider both financial loss and emotional
challenges.
 Some people are more comfortable with risk-taking than others.

2. What is the best decision for you?

Students should be encouraged to explore the various issues. There is no right or wrong answer. It is
important to clarify values and priorities both in the short term and the long term. Any decision that is
based on careful thinking and awareness of the challenges that will be present regardless of the decision
made, will be the right one. For the purpose of this exercise, the process of thinking about fit and
priorities is what matters.

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Chapter 10 Experiential Exercises

Exercise 10.1: Identifying your mentoring needs and potential mentors


Mentoring can be a powerful tool in organizational and personal success. Almost all successful leaders
credit their interactions with a mentor at least as part of the reason for their success. This exercise is
designed to encourage students to identify potential mentors and to start to mentoring process.

Total time: 30 minutes for steps I and II; more time needed for reflection and making contacts with
mentors,

Materials needed: Paper and pencil

Step 1: What do you need?


In this step, students identify particular areas where they may need development and mentoring. They
should be encouraged to spend some time reflecting on those needs (for example using the book’s self-
assessment or their performance rating at their job), seek feedback from trusted others, review their
performance records, and so forth. Once that process is completed, students write down specific areas
where they could seek the help of a mentor.

Some examples of areas may be:


 They have consistently had trouble working in teams.
 They have held several jobs that have all proven a poor fit for them.
 They have trouble speaking in public.
 They cannot seem to decide on a major or area of specialization.
 They do not handle conflict well.
 They cannot negotiate effectively.

The list is dynamic and changes as students develop new competencies and face new challenges. They
should be encouraged to review the list every few months to identify potential gaps.

Step 2: Who do you know?


In this step students make a list of their contacts and people in their networks who may have some
expertise and competence in their areas where they do not. They start with a long and inclusive list and
then use trust and comfort to pare their list down to people who may be good mentors. It is important to
identify several people as potential mentors rather than only one person. Different people not only have
different expertise, but they also provide different perspectives.

Step 3: Creating a mentoring relationship


The final step is to identify potential mentors and approach them for help. Guidelines for how to
approach and manage the mentoring relationship are provided.

 Course Assignment
This exercise can be used as an assignment for the course. Steps 1 and 2 can be assigned at the end of
the semester as a developmental exercise. Or, these steps can be assigned earlier in the semester and a
follow-up to see how the process of establishing a mentoring relationship (Step 3) can be done at the
end of the semester.
Grading this assignment cannot be based on the content of the mission statement, rather
students should be evaluated on how thoroughly they complete the process. Preferably, a pass/fail grade
should be assigned.

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Self-Assessment 10.1: My Personal Mission Statement
This exercise provides students with the opportunity of self-reflection and a start at developing a
personal mission statement that can guide their career and their development as a leader. This is an
individual exercise that can be used as a concluding exercise or even as an on-going exercise throughout
the semester. The various self-assessments throughout the book, especially Self-Assessment 4.1, can be
used as supporting information to allow students to understand themselves, and their values.

Total time: Minimum 30 minutes and up to 2 hours depending on level of student involvement

Materials needed: Paper and pencil

Step 1: What I want to be when I grow up


This step is a self-exploration. Encourage students to answer the questions honestly and to take their
time doing so. Remind them that there are no right or wrong answers and that this is a personal
discovery.

Step 2: My personal mission statement


Using the answers that students have developed in the first step, they should write their own mission
statement. An excellent step-by-step process is presented in the Web site
www.franklincovey.com/mission builder/ (computer must allow pop-ups).

 Course Assignment
This exercise can be used as an assignment for the course. It can be used either as a concluding exercise
or as a staged exercise that students revise several times during the semester. Grading this assignment
cannot be based on the content of the mission statement, rather students should be evaluated on how
thoroughly they complete the process. Preferably, a pass/fail grade should be assigned.

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Leadership in Action Case

Developing Leaders at Southwest Airlines

Case summary
SW Airlines is one of the most successful airlines in the United States. Much of its success is related to
its special culture that focuses on the individual and on both leader and leadership development. Current
and past executives are all highly committed to maintaining the unique culture and they pay particular
attention to development. The company is highly disciplined about hiring the right people who have a
chance to fit, is not shy about allowing them to flourish, and firing those who do not fit. Additionally,
SW has extensive formal and informal training, coaching, and mentoring to develop its employees.
Employees are exposed to many role models who take their responsibility for developing others
seriously.

1. How does Southwest develop its leaders?

The development process starts at the time of interviews where people are carefully screened and
selected to fit the culture of the company. All employees are mentored and coached particularly to
assure that they develop the right attitude. Southwest further offers formal leadership training programs
available to all employees. Internal leaders not only participate and present in those training sessions,
but they also consciously role model the right leader behaviors in their regular interactions with
employees.
Southwest is particularly focused on having a good fit between the person and the organization
as the primary source of success for employees. Barrett personally volunteers to mentor anyone who
wants to learn and to succeed.

2. What is the role of culture and fit in the success of the company?

The fit between employees and the organizational culture is the source of success of the organization.
Through careful selection and training, the organization assures a match between who people are and
their values and the values of the company. Those who don’t fit either do not get hired or do not survive
long. Constant reminders of the culture and training about the culture assure continuity of the fit. This
carefully managed and monitored fit continues to be a source of competitive advantage for Southwest.

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