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Principles of Management


Chapter 17: Leadership

 Define leader and leadership.

 Compare and contrast early theories of
 Describe the three major contingency
theories of leadership.
 Describe contemporary views of leadership.
 Discuss contemporary issues affecting
2 leadership.
1. Who are leaders and what Leadership is

 Leader - Someone who can influence others

and who has managerial authority.
 Leadership - What leaders do; the process
of influencing a group to achieve goals.
 Are all managers’ leaders? Because leading is
one of the four management functions, yes,
ideally, all managers should be leaders.
 Groups often have informal leaders who
 Ideally, all managers should be leaders.
2. Early Leadership Theories
There are many leadership theories focused on
what qualities distinguished between leaders
and followers.
Different leadership theories have emerged,
most can be classified as:

 Trait Theories
Behavioral Theories
 University of Iowa Studies
 Studies of Ohio State University
 Studies of Michigan University 5
 The Managerial Grid
2. Early Leadership Theories

Contingency Theories
 Fielder Model
 Hersey and Blanchard’s Situational
Leadership Theory
 Path Goal
 Leader Member Exchange Theories [LMX]
Contemporary Theories
 Leader–Member Exchange (LMX) Theory
 Transformational-Transactional Leadership
 Team Leadership
2. Early Leadership Theories
These early leadership theories focused on the leader
(leadership trait theories) and how the leader
interacted with his or her group members (leadership
behaviour theories).

Trait Theories (1920s -1930s)

 Focused on isolating leader traits—that is,
characteristics—that would differentiate leaders
from non-leaders, as physical stature, appearance,
social class, emotional stability, fluency of speech,
and sociability, but despite the best efforts of
 It proved impossible to identify a set of traits that
would always differentiate a leader (the person)
from a non-leader.
2. Early Leadership Theories
Trait Theories
 Trait theories assume that people inherit certain qualities
and traits that make them better suited to leadership.
 Trait theories differentiate leaders from non leaders by
focusing of personal qualities and characteristics as physical
stature, appearance, social class, emotional stability,
fluency of speech, and sociability.
 It is impossible to identify a set of traits that would always
differentiate a leader (the person) from a non-leader.
 According to Trait theories, leader are born not made.
 Trait theories assume that people inherit certain qualities
and traits that make them better suited to leadership.
 Trait theories often identify particular personality or
behavioral characteristics shared by leaders.
 Traits alone not sufficient for identifying effective leaders.
The leadership process identified seven traits associated
with successful leadership:
Seven Traits Associated with Leadership

2. Early Leadership Theories

 Researchers eventually recognized that traits

alone were not sufficient for identifying
effective leaders, since explanations based
solely on traits ignored the interactions of
leaders and their group members as well as
situational factors.
 Possessing the appropriate traits only made
it more likely that an individual would be an
effective leader.

2. Early Leadership Theories
 3.6 Behavioural Theories
The four main leader behaviour studies are :
 1.University of Iowa Studies
 The University of Iowa studies explored three
leadership styles to find which was the most effective.
 The Autocratic Style a leader who dictated work
methods, made unilateral decisions, and limited
employee participation, centralized authority.
 The Democratic Style a leader who involved employees
in decision making, delegated authority, and used
feedback as an opportunity for coaching employees, it
contributed to both good quantity and quality of work.
 The Laissez-faire Style leader let the group make 11
decisions and complete the work in whatever way it
saw fit.
2. Early Leadership Theories

Ohio State Studies

Identified two dimensions of leader
Initiating structure: the role of the
leader in defining his or her role and the
roles of group members.
Consideration: the leader’s mutual trust
and respect for group members’ ideas
and feelings.
2. Early Leadership Theories

 Behavioural Theories
 2.Studies of Ohio State University
Research at Ohio State University in beginning identify
over 1000 dimensions of leadership behavior, but later
on narrow down it to two categories of key dimensions
of leader behavior i.e.
i. Initiating Structure.
ii. Consideration.
According to the findings of these studies, leaders
exhibit two types of behaviors, people-oriented
(consideration) and task oriented (initiating structure),
to facilitate goal accomplishment. 13
2. Early Leadership Theories
2.Studies of Ohio State University
i. Initiating Structure
 Defining and structuring of roles the extend to which
a leader is likely define and construction his/her role
and those of employees in the search for goals
 Assigning tasks, planning, setting goals, its outcome
is organization’s productivity & more positive
performance evaluation.
 Assign group members to particular task, and
assures that work is completed and subordinates
perform their jobs
 Deciding how tasks are accomplished, expect workers
to maintain definite standards of performance.
 Emphasizes and encouraging followers to accomplish
them the meeting deadlines.
2. Early Leadership Theories
2.Studies of Ohio State University
ii. Consideration
 Leader who like to have job relationship by mutual
thrust, respect for employees ideas & regards for
their feeling and values good relationships with
 Outcome: employee satisfaction, motivated & more
respect to their leader
 The one who help employees with personal
 Friendly & approachable.
 Treat all employees equals & expresses appreciation
& support.
2. Early Leadership Theories

 Mixed Results of Ohio State Studies

 High consideration/high structure leaders generally,
but not always, achieved high scores on group task
performance and satisfaction.
 Evidence indicated that situational factors appeared
to strongly influence leadership effectiveness.
 The leader shows concern for followers’ comfort,
well-being, status, and satisfaction.
 Leaders high in initiating structure and consideration
tended to achieve high employee performance and
2. Early Leadership Theories

 Studies of Michigan University Identified two

dimensions of leader behavior:

 Employee oriented: emphasizing personal


 Production oriented: emphasizing task


Research findings:
 Leaders who are employee oriented are strongly
associated with high group productivity and high
job satisfaction.
2. Early Leadership Theories

 3. Studies of Michigan University

i. Employee Oriented – Emphasizes interpersonal
relations, takes a personal interest in the needs of
employees & accepts individual differences among
members and is the most powerful dimension –
outcome; higher group productivity & greater job
 Michigan researchers’ conclusions strongly favored
the leaders who were employee oriented, with
higher group productivity and higher job
ii. Production-Oriented – Emphasizes the technical
aspects of the job – outcome; accomplishment of
group tasks & expresses appreciation & support, and
associated with low group productivity and lower job
2. Early Leadership Theories
The Managerial Grid
 Appraises leadership styles using two
Concern for people
Concern for production

 Places managerial styles in five categories:

Impoverished management
Task management
Middle-of-the-road management
Country club management
Team management
Blake/Mouton Leadership Grid
High 1,9 Country Club Management 9,9 Team Management
Thoughtful attention to needs of Work accomplishment is from
8 people for satisfying relationships committed people; interdependence
leads to a comfortable, friendly through a “common stake” in
Concern for People

7 organization atmosphere & organization purpose leads to

work tempo. relationships of trust & respect.
5,5 Middle of the Road Management
Adequate organization
5 performance is possible through
balancing the necessity to get out
4 work with maintaining morale of
people at a satisfactory level.
31,1 Impoverished Management 9,1 Authority-Compliance
Efficiency in operations results
Exertion of minimum effort
from arranging conditions of
2 to get required work done is
work in such a way that
Low appropriate to sustain
human elements interfere to a
1 organization membership.
minimum degree.
1 2 3 4 5 6 7 8 9
Low Concern for Production High
2. Early Leadership Theories
The Managerial Grid
 (1,1): The indifferent (impoverished) avoid & escape.
 (1,9): The accommodating (country club) yield and
 (9,1): The dictatorial (produce or perish) control and
 (5,5): The status quo (middle-of-the-road) balance and
 (9,9): The sound (team style) contribute and commit.
 The opportunistic style: exploit and manipulate.
 The paternalistic style: prescribe and guide.
The grid offers a number of useful insight for the 21
identification of management training and development
Behavioral Theories of Leadership

Behavioral Theories of Leadership (cont.)

3. Contingency Theories of Leadership
Contingency Theories
The corporate world is filled with stories of leaders
who failed to achieve greatness because they
failed to understand the context they were working
Each looks at defining leadership style and the
situation, and attempts to answer the if-then
contingencies (that is, if this is the context or
situation, then this is the best leadership style to
Contingency theories of leadership focus on
particular variables related to the environment that
might determine which particular style of
leadership is best suited for the situation. 24
3. Contingency Theories of Leadership

 Fielder Model
Proposes that effective group performance depends
upon the proper match between the leader’s style
of interacting with followers and the degree to
which the situation allows the leader to control and
influence, a key factor in leadership success is an
individual’s basic leadership style, either task
oriented or relationship oriented
The leader’s effectiveness depends on both leader
style and situational characteristics:
 Leaders have either a relationship-oriented style
or a task-oriented style, to determine the
"situational favorableness" of particular situation
3. Contingency Theories of Leadership
Fielder Model
Effective groups depend upon a proper match
between a leader's style of interacting with
subordinates, and the degree to which the
situation gives control and influence to the
Fiedler suggested that effectiveness depends on the
situation, and made three key elements.
 Leader-member Relations –
 Task Structure –
 Position Power –
Which determine how favorable a situation is for 26
3. Contingency Theories of Leadership
Fielder Model
 Leader-Member Relations – the degree of confidence,
trust, and respect subordinates have on their leader, this is
the level of trust and confidence that your team has in you.
A leader who is more trusted and has more influence with
the group is in a more favorable situation than a leader who
is not trusted.
 Task Structure – the degree to which task assignments
are procedurized this refers to the type of task you're
doing: clear and structured, or vague and unstructured.
Unstructured tasks, or tasks where the team and leader
have little knowledge of how to achieve them, are viewed
 Leader's Position Power –influence derived from one's
formal structural position in the organization, this is the
amount of power you have to direct the group, and provide
reward or punishment. The more power you have, the more 27
favorable your situation. Fiedler identifies power as being
either strong or weak.
3. Contingency Theories of Leadership
Fielder Model
 A situation is favorable to the leader when:
a) The leader is linked and trusted by the group
b) The task of the group is clearly defined.
c) The power of the leader to reward and punish with
organization backing is high.
 Fiedler suggested that:
a) A Structured Style when situation very favorable or
very unfavorable.
b) A Supportive Style when situation is moderately
favorable to leader.
c) Group Performance will be contingent upon the
appropriate matching of leadership style and degree of
favorableness of the group situation for the leader.
3. Contingency Theories of Leadership
Hersey and Blanchard’s Situational
Leadership Theory (SLT)
 Argues that successful leadership is achieved by
selecting the right leadership style which is
contingent on the level of the followers’ readiness
Acceptance: leadership effectiveness depends
on whether followers accept or reject a leader
Readiness: the extent to which followers have
the ability and willingness to accomplish a
specific task
 Leaders must relinquish control over and contact
29 with followers as they become more competent.
3. Contingency Theories of Leadership
Hersey and Blanchard’s (SLT)

 Creates four specific leadership styles

incorporating Fiedler’s two leadership
 Telling: high task-low relationship leadership

 Selling: high task-high relationship leadership

 Participating: low task-high relationship


 Delegating: low task-low relationship

3. Contingency Theories of Leadership

Hersey and Blanchard’s (SLT)

 Hersey and Blanchard characterized leadership style in terms of
the amount of Task Behavior and Relationship Behavior that
the leader provides to their followers. They categorized all
leadership styles into four behavior types, which they named S1
to S4:
 S1: Telling - is characterized by one-way communication in
which the leader defines the roles of the individual or group and
provides the what, how, why, when and where to do the task.
Leaders tell their people exactly what to do, and how to do it.
 S2: Selling - while the leader is still providing the direction, he or
she is now using two-way communication and providing the socio-
emotional support that will allow the individual or group being
influenced to buy into the process. Leaders still provide
information and direction, but there's more communication 31with
followers. Leaders "sell" their message to get the team on board.
3. Contingency Theories of Leadership
Hersey and Blanchard’s (SLT)
 S3: Participating - this is how shared decision-making
about aspects of how the task is accomplished and the
leader is providing less task behaviors while maintaining
high relationship behavior. Leaders focus more on the
relationship and less on direction. The leader works
with the team, and shares decision-making responsibilities.
 S4: Delegating - the leader is still involved in decisions;
however, the process and responsibility has been passed to
the individual or group. The leader stays involved to
monitor progress. Leaders pass most of the responsibility
onto the follower or group. The leaders still monitor
progress, but they're less involved in decisions.
Of these, no one style is considered optimal for all leaders to
use all the time. Effective leaders need to be flexible, 32 and
must adapt themselves according to the situation.
Hersay and Blanchard Situational Leadership

3. Contingency Theories of Leadership
Hersey and Blanchard’s (SLT)

 Four stages of follower’s readiness:

 R1:People are both unable and unwilling to take
responsibility for doing something. Followers aren’t
competent or confident.

 R2: People are unable but willing to do the necessary

job tasks. Followers are motivated but lack the
appropriate skills.

 R3: People are able but unwilling to do what the

leader wants. Followers are competent, but don’t want
to do something.

 R4:
34 People are both able and willing to do what is
asked of them.
3. Contingency Theories of Leadership
 Hersey and Blanchard’s (SLT)
 The SLT says if followers are at R1 (unable and
unwilling to do a task), the leader needs to use the
telling style and give clear and specific directions;
 if followers are at R2 (unable and willing), the leader
needs to use the selling style and display high task
orientation to compensate for the followers’ lack of
ability and high relationship orientation to get
followers to “buy into” the leader’s desires;
 if followers are at R3 (able and unwilling), the leader
needs to use the participating style to gain their
 if employees are at R4 (both able and willing), the
leader doesn’t need to do much and should use the
delegating style.
3. Contingency Theories of Leadership
 Path-Goal Theory
 It suggests that effective leaders motivate their
followers by giving them outcomes they desire when
they perform at a high level or achieve their work
 Effective leaders also make sure their subordinates
believe that they can obtain their work goals and
perform at a high level, show subordinates the paths
to goal attainment, remove obstacles that might come
along the way, and express confidence in their
subordinates’ capabilities.
 Leaders need to adjust the type of behavior they
engage in (directive, supportive, participative, or
achievement-oriented) to correspond to the nature of
the subordinates they are dealing with and the type of
work they are doing.
3. Contingency Theories of Leadership
 According to Path-Goal Theory there are following
four leadership behaviors:
 The directive leader lets followers know what is
expected of them, etc.
 The supportive leader is friendly and shows
concern for the needs of followers.
 The participative leader consults with followers
and uses their suggestions before making a decision.
 The achievement-oriented leader sets
challenging goals and expects followers to perform at
their highest level.
In contrast to Fiedler Model, Path-Goal Theory assumes
leaders are flexible and can display any of these 37
3. Contingency Theories of Leadership

Path-Goal Theory
 States that the leader’s job is to assist his or her
followers in attaining their goals and to provide
direction or support to ensure that their goals are
compatible with those of the organization
 Depending on the situation, leaders assume different
leadership styles at different times:
 Directive leader
 Supportive leader
 Participative leader
 Achievement
38 oriented leader
Path-Goal Model [Exhibit 17-4]

3. Contingency Theories of Leadership
 As Exhibit 17-4 illustrates, path-goal theory proposes two
situational or contingency variables that moderate the
leadership behaviour–outcome relationship: those in the
environment that are outside the control of the follower
(factors including task structure, formal authority system, and the
work group) and those that are part of the personal
characteristics of the follower (including locus of control,
experience, and perceived ability).
 Environmental factors determine the type of leader
behaviour required if subordinate outcomes are to be
maximized; personal characteristics of the follower
determine how the environment and leader behaviour are
 The theory proposes that a leader’s behaviour won’t be
effective if it’s redundant with what the environmental
40 is providing or is incongruent with follower
4. Contemporary views of leadership
 Leaders often develop relationships with each
member of the group that they lead, and leader–
member exchange theory explains how those
relationships with various members can develop in
unique ways.
 The leader-member exchange theory of leadership
focuses on the two-way relationship (dyadic
relationships) between supervisors and subordinates.
 The theory assumes that leaders develop an
exchange with each of their subordinates, and that
the quality of these leader-member exchange (LMX)
relationships influences subordinates' responsibility,
decision influence, access to resources and 41
4. Contemporary views of leadership

 Focuses on the leader-follower dyad [pair] and

suggests that leaders do not treat each of their
followers the same but rather develop different kinds
of relationships with different subordinates.
 Some leader-follower dyads have high-quality
 Subordinates in these dyads are members of the
 Other leader-follower dyads have low-quality
 Subordinates in these dyads form the out-group.
 Sometimes leadership does not seem to have much
of an effect in organizations because of the existence
of substitutes and neutralizers.
 A leadership substitute is something that acts in 42
place of a formal leader.
4. Contemporary views of leadership


 LMX Premise
 Because of time pressures, leaders form a special
relationship with a small group of followers: the
 This in-group is trusted and gets more time and
attention from the leader (more “exchanges”).
 All other followers are in the “out-group” and get
less of the leader’s attention and tend to have
formal relationships with the leader (fewer
 Leaders pick group members early in the
Leader-Member exchange Model

4. Contemporary views of leadership
 Transactional Leadership
The leader that lead primarily by using social
exchanges (or transactions), who guide or motivate
their followers in the direction of established goals by
clarifying role and task requirements,to work toward
established goals by exchanging rewards for their
 Transformational Leadership
Leader who inspire followers to transcend their own
self-interests for the good of the organization by
clarifying role and task requirements, stimulates and
inspires (transforms) followers to achieve
extraordinary outcomes, pay attention to the
concerns and developmental needs of individual
followers; change followers’ awareness of issues by
helping those followers look at old problems in new
ways; and are able to excite, arouse, and inspire
followers to exert extra effort to achieve group goals.
4. Contemporary views of leadership

Management & Leadership are different in

following ways.
 Transactional leaders:
 Managing -- linking job performance to rewards.
 Ensure employees have necessary resources.
 Apply contingency leadership theories
Relationship with their followers in term of trade.
 Focus on the management of the organisation.
 Focus on procedures and efficiency.
 Focus on working to rules and contracts.
 Managing current issues and problems
4. Contemporary views of leadership
 Transformational leadership occurs when a leader
changes followers in ways that lead to trust and motivation
towards organizational goals, widespread changes to a
business or organisation.
 Functions of Transformational leaders:
 Leading -- changing the organization to fit the
 Develop, communicate, enact a vision.
 Transformational leaders increase subordinates’ awareness
of task significance and high performance levels.
 Transformational leaders make subordinates aware of
their needs for personal growth, development, and
 They motivate subordinates to work for the good of the
organization, not personal gain.
4. Contemporary views of leadership
Transactional and transformational leadership shouldn’t be viewed as
opposing approaches to getting things done. Transformational
leadership develops from transactional leadership
 Requirements for Transformational Leaders.
 Long term strategic planning.
 Clear objectives.
 Clear vision.
 Leading by example.
 Efficiency of systems and processes.
 Transformational Leaders.
Inspiring and motivating others to work, they will have following
 Vision.
 Anticipation.
 Value-congruence. [empathy, common interest]
 Empowerment.
 Self-understanding.
Full Range of Leadership Model

4. Contemporary views of leadership
Transactional Vs Transformational leaders
 Transactional and transformational leadership
shouldn’t be viewed as opposing approaches to
getting things done.
 Transformational leadership develops from
transactional leadership.
 Transformational leadership produces levels of
employee effort and performance that go beyond
what would occur with a transactional approach
 Moreover, transformational leadership is more than
charisma, because the transformational leader
attempts to instill in followers the ability to question
not only established views but those views held by
the leader. 50
4. Contemporary views of leadership
Transactional Vs Transformational leaders

 The evidence supporting the superiority of

transformational leadership over transactional
leadership is overwhelmingly impressive.
 studies that looked at managers in different settings,
including the military and business, found that
transformational leaders were evaluated as more
effective, higher performers, more promotable than
their transactional counterparts, and more
interpersonally sensitive.
 In addition, evidence indicates that transformational
 leadership is strongly correlated with lower turnover
rates and higher levels of productivity, employee
satisfaction, creativity, goal attainment, follower well-
being, and corporate entrepreneurship, especially51 in
start-up firms.
4. Contemporary views of leadership
Transactional Vs Transformational leaders
 Charismatic Leadership
 An enthusiastic, self-confident leader whose
personality and actions influence people to behave
in certain ways.
 Five characteristics of charismatic leaders:
 Have a vision
 Are able to articulate the vision
 Are willing to take risks to achieve the vision
 Are sensitive to the environment and follower
 Exhibit behaviors that are out of the ordinary
4. Contemporary views of leadership
Charismatic Leadership
 Impressive correlations between charismatic leadership and high
performance and satisfaction among followers.
 Are charismatic leaders born with their qualities? Although a
small number of experts still think that charisma can’t be
learned, most believe that individuals can be trained to exhibit
charismatic behaviours.
 In groups with “trained” charismatic leaders, members had
higher task performance, higher task adjustment, and better
adjustment to the leader and to the group than did group
members who worked in groups led by no-charismatic leaders.
 It may not always be necessary to achieve high levels of
employee performance, when the follower’s task has an
ideological purpose or when the environment involves a high
degree of stress and uncertainty.
 This distinction may explain why, when charismatic leaders
surface, it’s more likely to be in politics, religion, or wartime; or
when a business firm is starting up or facing a survival crisis.
4. Contemporary views of leadership
 Visionary Leadership
 A leader who creates and articulates a realistic,
credible, and attractive vision of the future that
improves upon the present situation.
 Visionary leaders have the ability to:
Explain the vision to others
Express the vision not just verbally but through
Extend or apply the vision to different leadership

4. Contemporary views of leadership
 Team Leadership Characteristics:
 Having patience to share information
 Being able to trust others and to give up authority
 Understanding when to intervene

 Team Leader’s Job

 Managing the team’s external boundary
 Facilitating the team process
• Includes coaching, facilitating, handling
disciplinary problems, reviewing team and
individual performance, training, and
55 communication.
Team Leadership Roles

4. Contemporary views of leadership
 Team Leadership
 The role of team leader is different from the
traditional leadership role , “I’m supposed to teach
the teams everything I know and then let them make
their own decisions.”
 The challenge for many managers is learning how to
become an effective team leader.
 They have to learn skills such as patiently sharing
information, being able to trust others and to give up
authority, and understanding when to intervene.
 effective team leaders have mastered the difficult
balancing act of knowing when to leave their teams
57 and when to get involved.
5. Leadership issues in Twenty-First Century

Twenty-first-century leaders do face some important

leadership issues including managing power,
developing trust, empowering employees, leading
across cultures, and becoming an effective leader.
 Managing Power
Power is ability to get things done.
Legitimate power and authority are the same.
Legitimate power represents the power a leader has as
a result of his or her position in the organization.
Although people in positions of authority are also likely
to have reward and coercive power, legitimate power is
broader than the power to coerce and reward.

5. Leadership issues in Twenty-First Century
 Types of Power. There are following six types of
power by French and Raven.
i-Coercive Power
This is the power to force someone to do something
against their will. It is often physical although other
threats may be used. It is hardily used in business,
some time in workplace bullying.
ii-Reward Power
Reward power is thus the ability to give other people
what they want, and hence ask them to do things for
you in exchange.
Rewards can also be used to punish, such as when they
withheld. The promise is essentially the same: do
this and you will get that.
5. Leadership issues in Twenty-First Century
Types of Power
iii-Legitimate Power
Legitimate power is that which is invested in a role.
Kings, policemen and managers all have legitimate
power. The legitimacy may come from a higher power,
often one with coercive power.
iv-Expert Power
When I have knowledge and skill that someone else
requires, then I have Expert power. This is a very
common form of power and is the basis for a very large
proportion of human collaboration, including most
companies where the principle of specialization allows
large and complex enterprises to be undertaken.
Expert power is that which is used by Trades Unions
when they encourage their members to strike for better
pay or working conditions.
5. Leadership issues in Twenty-First Century
Types of Power

v-Referent Power
This is the power from another person; it is the power
of charisma and fame and is wielded by all celebrities,
gained by a leader who has strong interpersonal
relationship skills.
vi-Negative Power [informational power]
This is providing information to a person that result in
them thinking/acting in a different way.
Information by itself may not be enough for this and
may hence be supported by an argument as to why the
information should be believed.
If the information is accepted then 'socially
independent change' occurs as the person continues
believe this information to be true and acts
5. Leadership issues in Twenty-First Century

 Developing Trust
An important consideration for leaders is building trust
and credibility, both of which can be extremely fragile.
 The main component of credibility is honesty.
 If people are going to follow someone willingly, they
first want to assure themselves that the person is
worthy of their trust.”
 In addition to being honest, credible leaders are
competent and inspiring.
 They are personally able to effectively communicate
their confidence and enthusiasm.
 The assessment of a leader’s honesty, competence,
62 ability to inspire by his or her followers is
Credibility of a Leader.
5. Leadership issues in Twenty-First Century
 Trust
 The belief of followers (and others) in the integrity,
character, and ability of a leader
 Five dimensions that make up the concept of trust:
 _ Integrity: honesty and truthfulness, the most critical
& important dimensions.
 _ Competence: technical and interpersonal knowledge
and skills
 _ Consistency: reliability, predictability, and good
judgment in handling situations
 _ Loyalty: willingness to protect a person, physically
and emotionally
 _ Openness: willingness to share ideas and
information freely
5. Leadership issues in Twenty-First Century
 Employees have to trust managers to treat them
fairly, and managers have to trust employees to
conscientiously fulfil their responsibilities.
 leaders have to lead others who may even be
physically separated—members of cross-functional or
virtual teams, individuals who work for suppliers or
customers, and perhaps even people who represent
other organizations through strategic alliances.
 Many of these relationships, in fact, are fluid and
fleeting. So the ability to quickly develop trust and
sustain that trust is crucial to the success of the
 It increases job performance, organizational
64 behaviors, job satisfaction, and
organization commitment.
Building Trust

5. Leadership issues in Twenty-First Century
 Empowering Employees
Managers are increasingly leading by empowering their
employees in decision-making discretion of workers
such that teams can make key operating decisions in
developing budgets, scheduling workloads, controlling
inventories, and solving quality problems.
One reason more companies are empowering
employees is the need for quick decisions by those
people who are most knowledgeable about the issues—
often those at lower organizational levels.
In order to cope with the increased work demands,
Quicker responses to problems and faster decisions
managers had to empower their people.
66 empowerment is not a universal answer, but
it can be beneficial.
5. Leadership issues in Twenty-First Century
 Leading Across Cultures
 Effective leaders do not use a single style, they
adjust their style to the situation.
 National culture is certainly an important situational
variable in determining which leadership style will be
most effective. What works in China isn’t likely to be
effective in
 Universal Elements of Effective Leadership
 Vision
 Foresight
 Providing encouragement
 Trustworthiness
 Dynamism
5. Leadership issues in Twenty-First Century

 Becoming an Effective Leader

Organizations need effective leaders, two issues
pertinent to becoming an effective leader are leader
training and recognizing that sometimes being an
effective leader means not leading.
Let’s take a look at these issues.
 LEADER TRAINING. is more likely to be successful
with individuals who are high self-monitors than
with low self-monitors, individuals have the
flexibility to change their behaviour as different
situations may require.
In addition, organizations may find that individuals
with higher levels of a trait called motivation to lead
are more receptive to leadership development
5. Leadership issues in Twenty-First Century
 Despite the belief that some leadership style will
always be effective regardless of the situation,
leadership may not always be important, in some
situations any behaviours a leader exhibits are
 In other words, certain individual, job, and
organizational variables can act as “substitutes for
leadership,” negating the influence of the leader, as,
follower characteristics, experience, training,
professional orientation, or need for independence can
neutralize the effect of leadership.
 Jobs that are inherently unambiguous and routine or
that are basically satisfying may place fewer demands
on leaders.
 Finally, such organizational characteristics as explicit
goals, rigid rules and procedures, or
cohesive work groups can substitute for formal
Terms to Know

 leader  leader-member
 leadership relations

 behavioral theories  task structure

 autocratic style  position power

 democratic style  situational leadership

theory (SLT)
 laissez-faire style
 readiness
 initiating structure
 leader participation
 consideration model
 high-high leader  path-goal theory
 managerial grid  transactional leaders
 Fiedler contingency model  Transformational