Chapter
14
Leadership
Management
4th Edition
Chuck Williams
Chapter 14
Copyright ©2007 by South-Western, a division of Thomson Learning. All rights reserved
Prepared by
Deborah Baker
Texas Christian University
1
What Would You Do?
43rd Floor, Tyco Headquarters, New York City.

The new CEO of Tyco is faced
with $28 billion in debt, and the
possibilities of bankruptcy

Dennis Kozlowski’s reign as
CEO is still embarrassing, when
he used funds as his personal
piggy bank
How can you get people to see that with sound
management, Tyco can be an exceptional company?
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2
What Is Leadership?
After reading these sections,
you should be able to:
1.
2.
explain what leadership is.
describe who leaders are and what effective
leaders do.
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3
Leadership
Differences
Between
Leaders and
Managers
Substitutes
for
Leadership
1
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4
Leaders versus Managers
MANAGERS
LEADERS
Do things right
Status quo
Short-term
Means
Builders
Problem solving
Do the right thing
Change
Long-term
Ends
Architects
Inspiring & motivating
1.1
Adapted from Exhibit 14.1
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5
Leaders versus Managers
American organizations (and probably those in much
of the rest of the industrialized world) are under led
and over managed. They do not pay enough
attention to doing the right thing, while they
pay too much attention to doing things right.
--Warren Bennis
1.1
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6
Doing the Right Thing
The Three M’s: Mission, Mentor, and Mirror
 Business leaders can develop personal ethics by
focusing on their mission, a mentor, and the mirror
1. Develop a personal mission statement.
2. Take care in choosing a mentor.
3. Stand in front of the mirror to assess your
ethical performance as a business leader.
1.1
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7
Substitutes for Leadership

Leadership substitutes
 subordinate, task, or organizational characteristics
that make leaders redundant or unnecessary

Leadership neutralizers
 subordinate, task, or organizational characteristics
that interfere with a leader’s actions

Leaders don’t always matter
 Poor leadership is not the cause of every
organizational crisis
1.2
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8
Leadership Substitutes and Neutralizers
Characteristic
1.2
Subordinate Characteristics
 Ability, experience, training, knowledge
 Need for independence
 Professional orientation
 Indifference toward organizational rewards
Task Characteristics
 Unambiguous and routine tasks
 Performance feedback provided by the
work itself
 Intrinsically satisfying work
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
People-Related
Leadership Behaviors
Task-Related
Leadership Behaviors
Neutralize
Neutralize
Substitute, Neutralize
Neutralize
Substitute, Neutralize
Neutralize
Substitute, Neutralize
Neutralize
No effect
No effect
Substitute, Neutralize
Substitute, Neutralize
Substitute, Neutralize
Neutralize
No effect
Neutralize
No effect
Neutralize
No effect
Substitute, Neutralize
Neutralize
Neutralize
Substitute, Neutralize
Neutralize
Neutralize
Neutralize
Chapter 14
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Adapted from Exhibit 14.2
9
Who Leaders Are and What Leaders Do
Leadership
Traits
Leadership
Behavior
2
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10
Leadership Traits
Desire
to Lead
Honesty
and
Integrity
Drive
SelfConfidence
Leadership
Traits
Knowledge
of the
Business
Emotional
Stability
Cognitive
Ability
2.1
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Adapted from Exhibit 14.3
11
What Really Works: Leadership Traits
Traits and Perceptions
of Leadership Effectiveness
Intelligence
10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
probability of success
75%
Dominance
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%
2.1
probability of success
63%
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12
What Really Works: Leadership Traits
Charisma and
Leadership Effectiveness
Charisma and Performance
10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
probability of success
72%
Charisma and Perceived Leadership Effectiveness
10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
probability of success
89%
Charisma and Leader Satisfaction
10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
2.1
probability of success
90%
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13
Leadership Behaviors
Initiating Structure
The degree to which a leader structures the
roles of followers by setting goals, giving
directions, setting deadlines, and assigning
tasks.
Consideration
The extent to which a leader is friendly,
approachable, and supportive and shows
concern for employees.
2.2
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14
Blake/Moulton Leadership Grid
High 9
1,9
Concern for People
8
Team 9,9
Management
7
6
Middle of the
5,5
Road
5,5
5
4
3
2
Low 1
Impoverished
1,1 Management
1
2.2
Country Club
Management
Low
2
3
4
AuthorityCompliance
5
6
7
Concern for Production
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9,1
8
9
High
Adapted from Exhibit 14.4
15
Situational Approaches to Leadership
After reading these sections,
you should be able to:
3.
explain Fiedler’s contingency theory.
4.
describe how path-goal theory works.
5.
discuss Hersey and Blanchard’s Situational
Leadership theory.
6.
explain the normative decision theory.
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16
Putting Leaders in the Right Situation:
Fiedler’s Contingency Theory
Situational
Favorableness
Group
Performance
=
Leadership
Style
3
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17
Putting Leaders in the Right Situation:
Fiedler’s Contingency Theory
Least Preferred Coworker
Situational Favorableness
Matching Leadership Styles
to Situations
3
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18
Leadership Style:
Least Preferred Coworker

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 Coworker scale (LPC)
 relationship-oriented
 task-oriented
3.1
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19
Leadership Style:
Least Preferred Coworker Scale
3.1
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20
Situational Favorableness
Situational Favorableness
The degree to which a particular situation
either permits or denies a leader the chance to
influence the behavior of group members.
Three factors:
 Leader-member relations
 Task structure
 Position power
3.2
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21
Situational Favorableness
3.2
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Exhibit 14.7
22
Matching Leadership Styles to Situations
3.3
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Exhibit 14.8
23
Path-Goal Theory
Path-Goal Theory
A leadership theory that
states that leaders can
increase subordinate
satisfaction and
performance by
clarifying and clearing
the paths to goals and by
increasing the number
and kinds of rewards
available for goal
attainment.
4
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24
Basic Assumptions of Path-Goal Theory
Clarify paths to goals
Clear paths to goals by solving problems
and removing roadblocks
Increase the number and kinds of rewards
available for goal attainment
Do things that satisfy followers today or will
lead to future rewards or satisfaction
4
Offer followers something unique and valuable
beyond what they’re experiencing
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Adapted From Figure 14.9
25
Path-Goal Theory
Subordinate Contingencies
•Perceived Ability
•Locus of Control
•Experience
Leadership Styles
•Directive
•Supportive
•Participative
•Achievement-Oriented
Outcomes
•Subordinate satisfaction
•Subordinate performance
Environmental Contingencies
•Task Structure
•Formal Authority System
•Primary Work Group
4
Chapter 14
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Adapted From Figure 14.10
26
Adapting Leader Behavior:
Path-Goal Theory
Leadership
Styles
Subordinate
and
Environmental
Contingencies
Outcomes
4
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27
Leadership Styles

Directive
 clarifying expectations and guidelines

Supportive
 being friendly and approachable

Participative
 allowing input on decisions

Achievement-Oriented
 setting challenging goals
4.1
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28
Leadership Styles

Martin
Winterkorn
of Audi
uses a
directive
style. His
employees
know
exactly
what is
expected
of them.
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29
Subordinate and
Environmental Contingencies
Subordinate
Environmental
 Perceived ability
 Task structure
 Locus of control
 Formal authority system
 Experience
 Primary work group
4.2
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30
Path Goal Theory:
When to Use Leadership Styles










Directive Leadership
Unstructured tasks
Inexperienced workers
Workers with low perceived ability
Workers with external locus of
control
Unclear formal authority system




Supportive Leadership
Structured, simple, repetitive
tasks
Stressful, frustrating tasks
When workers lack confidence
Clear formal authority system
Participative Leadership
Achievement-Oriented Leadership
Experienced workers
 Unchallenging tasks
Workers with high perceived ability
Workers with internal locus of
control
Workers not satisfied with rewards
Complex tasks
4.2
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Adapted from Exhibit 14.11
31
Adapting Leadership Behavior
Hersey and Blanchard’s Situational Leadership Theory
Worker
Readiness
Leadership
Styles
5
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32
Worker Readiness

The ability and willingness to take responsibility for
directing one’s behavior at work

Components of worker readiness:
 Job readiness
 Psychological readiness
5.1
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33
Worker Readiness
5.1
R4
confident
willing
able
R3
insecure
not willing
able
R2
confident
willing
not able
R1
insecure
not able
not willing
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34
Leadership Styles
Telling
(R1)
high task behavior
low relationship behavior
Selling
(R2)
high task behavior
high relationship behavior
Participating
(R3)
low task behavior
high relationship behavior
Delegating
(R4)
low task behavior
low relationship behavior
5.2
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35
Normative Decision Theory
Decision
Styles
Decision
Quality and
Acceptance
6
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36
Decision Styles
Leader accepts any decision
supported by the entire group
Leader solves the problem
or makes the decision
AI
Solve the
problem
yourself
AII
Obtain
information.
Select a
solution
yourself.
CI
CII
GII
Share problem,
get ideas from
individuals.
Select a
solution
yourself.
Share problem
with group,
get ideas.
Make decision,
which may or
may not reflect
input.
Share problem
with group.
Together tries
to reach a
solution.
Leader acts as
facilitator.
6.1
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Adapted from Exhibit 14.12
37
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
6.2
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38
Normative Theory Decision Rules
to Increase Decision Quality

Quality Rule
 If the quality of the decision is important, then don't use
an autocratic decision style

Leader 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 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
6.2
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39
Normative Theory Decision Rules
to Increase Decision Quality

Goal 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 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
6.2
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40
Normative Theory Decision Rules
to Increase Decision Acceptance

Commitment Probability Rule
 If having subordinates accept and commit to the decision
is important, then don't use an autocratic decision style

Subordinate 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

Commitment 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
6.2
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41
Strategic Leadership
After reading this section,
you should be able to:
7.
explain how visionary leadership
(i.e., charismatic and transformational leadership)
helps leaders achieve strategic leadership.
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42
Visionary Leadership
Charismatic
Leadership
Transformational
Leadership
7
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43
Charismatic Leadership


Creates an exceptionally strong relationship
between leader and follower
Charismatic leaders:




articulate a clear vision, based on values
model values consistently with vision
communicate high performance expectations
display confidence in followers’ abilities
7.1
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44
Kinds 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
do what is best for themselves
only want positive feedback
motivated by self-interest
7.1
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45
Ethical and Unethical
Charismatic Leaders
Charismatic Leader
Behaviors
Ethical Charismatics
Exercising Power
Power is used to serve others
Creating the vision
Followers help develop the vision
Communicating with
followers
Two-way communication
Accepting feedback
Open to feedback
Stimulating followers
Want followers to think and to questions the
status quo
Developing followers
Focus on developing followers
Living by moral
standards
Three virtues: courage, sense of fairness,
integrity
7.1
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Adapted from Exhibit 14.15
46
Ethical and Unethical
Charismatic Leaders
Charismatic Leader
Behaviors
Unethical Charismatics
Exercising Power
Power is used to dominate others
Creating the vision
Vision comes solely from the leader
Communicating with
followers
One-way communication, not open to input
from others
Accepting feedback
Prefer yes-men, punish candid feedback
Stimulating followers
Don’t want followers to think, prefer uncritical
acceptance of own ideas
Developing followers
Insensitive to followers’ needs
Living by moral
standards
Follow standards only if they satisfy
immediate self interests
7.1
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Adapted from Exhibit 14.15
47
Reducing Risks of
Unethical Charismatics
1.
Have a clearly written code of
conduct
2.
Recruit, select, and promote
managers with high ethical
standards
3.
Train leaders how to value, seek, and
used diverse points of view
4.
Celebrate and reward those who
exhibit ethical behaviors
7.1
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48
Transformational Leadership

Generates awareness and
acceptance of group’s
purpose and mission

Gets followers to
accomplish more than they
intended or thought
possible
7.2
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49
Components of
Transformational Leadership
1.
2.
3.
4.
Charisma or idealized influence
Inspirational motivation
Intellectual stimulation
Individualized consideration
7.2
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50