McGraw-Hill/Irwin
Principles of Management
16
© 2008 The McGraw-Hill Companies, Inc., All Rights Reserved.

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1.
Explain why good leadership is critical for success as a manager.
2.
Summarize the main theoretical approaches to leadership.
3.
Identify the behaviors and skills that are commonly associated with effective leadership.
4.
Explain how the right approach to leadership might be influenced by important contingencies.
5.
Discuss the differences between transformational and transactional leadership.

“Doing the right things”
“Doing things right”
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Focus on vision, mission, and goals
Focuses on preserving the status quo

• AVERAGE annual CEO pay is $10.5 million, 369 times average worker pay of $28,310. In 1970, before the big run-up, the multiple was 28:1, a ratio that would make today’s average worker pay $374,800.
•
Put another way: If CEO pay were frozen now, it would take workers 66 years of 4% annual raises to get back to 1/28 th of what the boss makes.
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Source: Business Week, October 30, 2006

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Organizational Challenges
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The challenges facing organizations and leaders are becoming increasingly complex. An internet survey by the Center for Creative Leadership revealed the following:
Type of Challenge
Technical Challenge
Adaptive Challenge
Critical Challenge
Source: Changing Nature of Leadership Research Report, The Center for Creative Leadership
Frequency Percentage
43%
37%
10%

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Powerinfluence perspective
Contingency perspective Transformational perspective
Trait
(competency) perspective
Behavior perspective

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•
Power-influence approach
– attempts to explain leadership effectiveness in terms of the amount of power possessed by a leader.
•
Trait/competency perspective
– identifies the traits and competencies of effective leaders
•
Behavior approach
– asserts that certain behaviors are related to leadership effectiveness

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•
Contingency perspective
– argues that the appropriate behaviors for a leader to adopt depend on context, and that will work in some situations will not work in others
•
Transformational perspective
– suggests that effective leaders “transform” organizations through their vision

Effective leaders rely on:
the personal power that flows from expertise
a network of allies
individual attributes
power flowing from their position
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1.
Self-awareness
2.
Personal conviction
3.
Courage
4.
Creativity
5.
Curiosity
6.
Ability to inspire
7.
Ability to listen
8.
Ability to innovate
9.
Eagerness to experience
10.
Willingness to reflect
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Source: Biz Ed, September/October, 2005

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Skill Sets Required by Academic Leaders
Skill set % of Respondents indicating
Selling, marketing, and public relations as Important
69%
Global business understanding
Human resource and staffing
Risk, cost, and financial management
Project management
E-business and IT knowledge
Negotiation and employment law
Source: Biz Ed, March/April, 2002
67%
57%
51%
48%
42%
27%

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Traits that can be acquired through learning
Emotional
Intelligence
Charisma
Strategic
Thinking Achievement
Motivation
Power
Motivation

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Self-awareness
Self-regulation
Empathy
Motivation
Social skills

Limitations & Implications of Competency Perspective
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Not all of the traits are equally important
•
Not all great leaders demonstrate all traits
•
Importance of traits is context dependent

•
Assumption: Certain leadership behaviors result in greater commitment on the part of subordinates and hence higher performance in pursuit of organization goals
• People-oriented behavior – A leadership style that includes showing mutual trust and respect for subordinates, demonstrating genuine concern for their needs
•
Task-oriented behavior
– The style of leaders who assign employees to specific tasks, clarify their work duties and procedures, ensure that they follow company rules, and push them to reach their performance capacity
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Contingencies
*Leader-member relations
*Task structure
*Position power
Leadership style
*People-oriented
*Task-oriented
Outcomes
*Team, unit, or organization performance

Good
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Task-oriented leaders
People-oriented leaders
Poor
Favorable Moderately favorable Unfavorable
Situation Situation Situation

• Simplistic
• Classification into two broad types seems an unwarranted generalization
•
Division into people-oriented and taskoriented ignores the fact that some leaders can exhibit both
• Unrealistic to “reward” an effective leader by removing him
• Assumes that leaders cannot change their style
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Personal characteristics of subordinates
*Skills
*Needs
*Motivations
Leadership styles
*Directive
*Supportive
*Participative
*Achievement-oriented
Nature of work environment
*Task structure
*Team dynamics
*Formal power
Clarify path
Clear path
Offer rewards
Employee goals
Path to goal attainment
Outcomes
(goal attainment)

As a manager, Caitlyn always sets high goals for her subordinates, has high expectations for their performance, and displays confidence in them, encouraging and helping them to take on greater responsibilities. According to the
Path-Goal theory, Caitlyn exhibits which of these leadership styles?
a.
Achievement-oriented leadership b.
Supportive leadership c.
Directive leadership d.
Participative
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• If followers lack confidence, supportive leadership will increase subordinates’ confidence that they can achieve goals, which raises performance
•
If the task of subordinates is ambiguous, directive leadership may be preferred because it helps clarify the path subordinates must follow, which again increases performance

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•
If the task of subordinates is standardized and dull, achievement-oriented leadership can motivate subordinates by setting high goals and expressing confidence in their abilities
•
If the rewards offered to the employees are inappropriate, participative leadership may allow the leader to clarify the needs of subordinates and change rewards to improve performance

• The implicit assumption that a leader can adopt only one style at a time seems simplistic
•
There is still no strong empirical consensus that pathgoal theory does a good job of explaining what is required for effective leadership
•
It has a narrow definition of leadership effectiveness
•
Other potentially important factors of the leadership process are ignored
•
It provides only a partial definition
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Envisioning a new future
Communicating persistently
Creating an enduring organization
Leading with integrity
Meaningful changes in strategy and organization
Modeling desired behaviors
Empowering employees

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•
Women:
have more people-oriented, participative leadership
are more relationship-oriented, cooperative, nurturing, and emotional in their leadership roles
•
Generally, studies have shown that men and women do not differ in either task-oriented or people-oriented leadership
• However, women do adopt a participative style more readily
•
Overall, subordinates have expectations from their leaders as to how they should act, and if the leader deviates from this belief negative evaluations may occur

Proportion of Female CEO’s, 2000 to 2016:
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2000
0.06%
2006 2010 (est.) 2016 (est.)
2% 4.90% 6.20%
Source: Business Week, December 4, 2006