Chapter 17 Leadership. 2 What Would You Do? Leadership: Dealing with Tragedy Sandler O’Neill &...

Chapter 17

Leadership

2

What Would You Do? Leadership: Dealing with Tragedy Sandler O’Neill & Partners, L.P. is

Investment banking firm located in World Trade Center on September 11

Top leaders are lost in the tragedy Can new leadership help the firm survive this

catastrophic event?

3

After discussing this section, you should be able to:

Learning ObjectivesWhat Is Leadership?

1. explain what leadership is 2. describe who leaders are and what effective

leaders do

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Leadership

Leaders versus ManagersLeaders versus Managers

Substitutes for LeadershipSubstitutes for Leadership

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Managers versus Leaders

• Do things right• Status quo• Short-term• Means• Builders• Problem solving

• Do the right thing• Change• Long-term• Ends• Architects• Inspiring & motivating

Managers Leaders

Adapted from Exhibit 17.1

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Substitutes for Leadership: Do Leaders Always Matter? Leadership substitutes

subordinate, task, or organizational characteristics that make leaders redundant or unnecessary professional orientation, intrinsically satisfying work, cohesive

work group, etc.

Leadership neutralizers subordinate, task, or organizational characteristics that

interfere with a leader’s actions subordinate skills, abilities, unambiguous and routing tasks,

intrinsically satisfying work, rewards not controlled by supervisor, etc.

Leaders don’t always matter

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Leadership Substitutes & NeutralizersCharacteristic People-Related

Leadership BehaviorsTask-Related

Leadership BehaviorsSubordinate Characteristics Ability, experience, training, knowledge Need for independence Professional orientation Indifference toward organizational rewards

NeutralizeNeutralizeSubstitute, NeutralizeNeutralize

Substitute, NeutralizeNeutralizeSubstitute, NeutralizeNeutralize

Task Characteristics Unambiguous and routine tasks Performance feedback provided by the

work itself Intrinsically satisfying work

No effectNo effect

Substitute, Neutralize

Substitute, NeutralizeSubstitute, Neutralize

Neutralize

Organizational Characteristics Formalization, meaning specific plans,

goals, and areas of responsibility Inflexibility, meaning rigid, unbending rules

and procedures Highly specified staff functions Cohesive work groups Organizational rewards beyond a leader's

control Spatial distance between supervisors and

subordinates

No effect

No effect

No effectSubstitute, NeutralizeNeutralize

Neutralize

Neutralize

Neutralize

NeutralizeSubstitute, NeutralizeNeutralize

Neutralize


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Who Leaders Are and What Leaders Do

LeadershipLeadershipBehaviorBehavior

LeadershipLeadershipTraitsTraits

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Leadership Traits

Desire toLead

CognitiveAbility

EmotionalStability

Drive

Honesty/Integrity

Self-confidence

Knowledgeof the

Business

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What Really Works?

Dominance

10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Probability of success 57%


Extroversion

10% 20% 30% 40% 50% 60% 70% 80% 90% 100%


Traits & Perceptions of Leadership Effectiveness

Intelligence

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What Really Works? (cont’d)

Charisma & Perceived Leader Effectiveness

10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

10% 20% 30% 40% 50% 60% 70% 80% 90% 100%



Charisma & Leader Satisfaction

10% 20% 30% 40% 50% 60% 70% 80% 90% 100%


Charisma & Leadership Effectiveness

Performance & Charisma

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Leadership Behaviors

Initiating structure clarifies follower roles and duties job-centered or concern for production

Consideration creating a supportive environment employee-centered or concern for people

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Blake/Mouton Leadership Grid 1,91,9 Country Club Country Club

ManagementManagement9,9 9,9 Team Team

ManagementManagement

1,11,1Impoverished Impoverished ManagementManagement 9,19,1

Authority-Authority-ComplianceCompliance

5,55,5

Middle of theMiddle of the

RoadRoad

1 2 3 4 5 6 7 8 91

2

3

4

5

6

7

8

9

Concern for ProductionConcern for Production

Co

nc

ern

fo

r P

eop

leC

on

cer

n f

or

Peo

ple


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Learning ObjectivesSituational Leadership

3. explain Fiedler’s contingency theory. 4. describe how path-goal theory works.5. explain the normative decision theory

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Putting Leaders in the Right Situation: Fiedler’s Contingency TheoryLeadership Style:Leadership Style:

Least PreferredLeast PreferredCo-workerCo-worker

SituationalSituationalFavorablenessFavorableness

Matching LeadershipMatching LeadershipStyles toStyles to

SituationsSituations

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Fiedler’s Contingency Theory

GroupGroupPerformancePerformance

=

SituationalSituationalFavorablenessFavorableness

Leadership StyleLeadership Style


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Leadership Style: Least Preferred Co-Worker Leadership style is the way a leader generally

behaves toward followers seen as stable and difficult to change

Style is measured by the Least Preferred Co-worker scale (LPC) relationship-oriented task-oriented

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Situational Favorableness

How a particular situation affects a leader’s ability to lead

Three factors Leader-member relations Task structure Position power

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Situational Favorableness

Leader-MemberRelations

Good Good Good Good Poor Poor Poor

TaskStructure

High High Low Low High High Low

PositionPower

Strong Weak Strong Weak Strong Weak Strong

Situation I II III IV V VI VIIFavorable Moderately Favorable Unfavorable

Adapted From Exhibit 17.7

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Leader-MemberRelations

Good Good Good Good Poor Poor Poor

TaskStructure

High High Low Low High High Low

PositionPower

Strong Weak Strong Weak Strong Weak Strong

Situation I II III IV V VI VIIFavorable Moderately Favorable Unfavorable

Matching Leadership Styles to Situations

GoodTask-OrientedLeaders

PoorRelationship-OrientedLeaders

Adapted From Exhibit 17.8

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Adapting Leader Behavior: Path-Goal Theory

Four LeadershipFour LeadershipStylesStyles

SubordinateSubordinateandand

EnvironmentalEnvironmentalContingenciesContingencies

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Path-Goal Theory

Leadership Styles• Directive• Supportive• Participative• Achievement-Oriented

Adapted From Figure 17.10

Environmental Contingencies• Task Structure• Formal Authority System• Primary Work Group

Subordinate Contingencies• Perceived Ability• Locus of Control• Experience

Outcomes• Subordinate Satisfaction• Subordinate Performance

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Leadership Styles Directive

clarifying expectations and guidelines Supportive

being friendly and approachable Participative

allowing input on decisions Achievement-Oriented

setting challenging goals

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Subordinate & Environmental ContingenciesSubordinate Perceived ability Locus of control Experience

Environmental Task structure Formal authority

system Primary work group

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When to Use Each of the Four Leadership Styles

Directive Leadership Supportive Leadership Unstructured tasks Inexperienced workers Workers with low perceived ability Workers with external locus of

control Unclear formal authority system

Structured, simple, repetitivetasks

Stressful, frustrating tasks When workers lack confidence Clear formal authority system

Participative Leadership Achievement-Oriented Leadership Experienced workers Workers with high perceived

ability Workers with internal locus of

control Workers not satisfied with rewards Complex tasks

Unchallenging tasks


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Adapting Leader Behavior: Normative Decision Theory

DecisionDecisionStylesStyles DecisionDecision

Quality andQuality andAcceptanceAcceptance

StyleStyle Explanation Explanation

AI - AutocraticAI - Autocratic Solve the problem yourself using the information Solve the problem yourself using the information you have.you have.

AII - Less autocraticAII - Less autocratic Obtain the needed information from workers; then Obtain the needed information from workers; then solve the problem yourself. Workers provide solve the problem yourself. Workers provide information but not alternatives.information but not alternatives.

C1- ConsultativeC1- Consultative Share the problem with workers individuallyShare the problem with workers individually(but not as a group), seeking suggestions &(but not as a group), seeking suggestions &possible alternatives. Solve the problem yourself.possible alternatives. Solve the problem yourself.

CII - More consultativeCII - More consultative Share the problem with workers as a group, seeking Share the problem with workers as a group, seeking suggestions & possible alternatives. Solve yourself.suggestions & possible alternatives. Solve yourself.

GII - Group decisionGII - Group decision Share the problem with workers as a group,Share the problem with workers as a group,seeking suggestions & possible alternatives.seeking suggestions & possible alternatives.Attempt to reach a consensus & be willing to Attempt to reach a consensus & be willing to accept & implement the workers’ solution.accept & implement the workers’ solution.

Decision Styles


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Decision Quality and Acceptance Using the right amount of employee

participation: improves decision quality improves acceptance

Decision tree helps leader identify optimal level of participation

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Decision Rules to Increase Decision Quality

Quality RuleQuality Rule If the quality of the decision is important, then don't use

an autocratic decision style Leader Information RuleLeader Information Rule

If the quality of the decision is important, and if the leader doesn't have enough information to make the decision on his or her own, then don't use an autocratic decision style

Subordinate Information RuleSubordinate Information Rule If the quality of the decision is important, and if the

subordinates don't have enough information to make the decision themselves, then don't use a group decision style

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Decision Rules to Increase Decision Quality (cont’d) Goal Congruence RuleGoal Congruence Rule

If the quality of the decision is important, and subordinates' goals are different from the organization's goals, then don't use a group decision style

Problem Structure RuleProblem Structure Rule If the quality of the decision is important, the leader doesn't

have enough information to make the decision on his or her own, and the problem is unstructured, then don't use an autocratic decision style

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Decision Rules to Increase Decision Acceptance

Commitment Probability RuleCommitment Probability Rule If having subordinates accept and commit to the

decision is important, then don't use an autocratic decision style

Subordinate Conflict RuleSubordinate Conflict Rule If having subordinates accept the decision is

important and critical to successful implementation and subordinates are likely to disagree or end up in conflict over the decision, then don't use an autocratic or consultative decision style

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Decision Rules to Increase Decision Acceptance (cont’d) Commitment Requirement RuleCommitment Requirement Rule

If having subordinates accept the decision is absolutely required for successful implementation and subordinates share the organization's goals, then don't use an autocratic or consultative style

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Learning ObjectivesStrategic Leadership

6. explain how visionary leadership (i.e. charismatic and transformational leadership) helps leaders achieve strategic leadership.

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Visionary Leadership

CharismaticCharismaticLeadershipLeadership

TransformationalTransformationalLeadershipLeadership

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Charismatic Leadership

Creates an exceptionally strong relationship between leader and follower

Lead by: articulating a clear vision, based on values role modeling values communicating high performance expectations displaying confidence in followers

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Been There, Done That

Content employees produce happy customers

Keeps offices at 50 people Encourages and rewards risk taking and

creativity

Richard Branson: Charisma without Hot Air

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Types of Charismatic Leaders Ethical Charismatics

provide developmental opportunities open to positive and negative feedback recognize others’ contributions share information concerned with the interests of the group

Unethical Charismatics control and manipulate followers only want positive feedback motivated by self-interest

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Ethical and Unethical Charismatics

Exercising Power Power is used to serve othersCreating the vision Followers help develop the vision

Communicating with followers

Two-way communication

Accepting feedback Open to feedback

Want followers to think and to questions the status quo

Stimulating followers

Developing followers Focus on developing followers

Living by moral standards

Three virtues: courage, sense of fairness, integrity

Charismatic Leader Charismatic Leader BehaviorsBehaviors

Ethical CharismaticsEthical Charismatics

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Ethical and Unethical Charismatics

Exercising Power Power is used to dominate othersCreating the vision Vision comes solely from the leader

Communicating with followers

One-way communication, not open to input from others

Accepting feedback Prefer yes-men, punish candid feedback

Don’t want followers to think, prefer uncritical acceptance of own ideas

Stimulating followers

Developing followers Insensitive to followers’ needs

Living by moral standards

Follow standards only if they satisfy immediate self interests

Charismatic Leader Charismatic Leader BehaviorsBehaviors

Unethical CharismaticsUnethical Charismatics

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Transformational Leadership

Generates awareness and acceptance of group’s purpose and mission

Gets employees to see beyond their own needs and self-interest

Goes beyond charismatic leadership Different than transactional leadership

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Transformational Leadership Components Charismatic leadership/idealized influence Inspirational motivation Intellectual stimulation Individualized consideration

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What Really Happened? Leadership: Dealing with Tragedy Deceased employees’ families

given pay check for the rest of the year insurance coverage for five years

Jimmy Dunne became manager and provided leadership that led to strong financial recovery developed new skills in negoti- ation,

calmness, patience, sup- port, while maintaining strong business focus

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