Chapter 15 Leadership Effective Management, by Williams South-Western College Publishing Copyright © 2002 2 What Would You Do? Leadership at Microsoft Growing bureaucracy Where is the company going? What makes a good leader? How should leaders behave? Effective Management, by Williams South-Western College Publishing Copyright © 2002 3 Learning Objectives What is Leadership? After discussing this section, you should be able to: explain what leadership is describe who leaders are and what effective leaders do Effective Management, by Williams South-Western College Publishing Copyright © 2002 4 Leadership Leaders versus Managers Substitutes for Leadership Effective Management, by Williams South-Western College Publishing Copyright © 2002 5 Managers versus Leaders Managers • • • • • • Do things right Status quo Short-term Means Builders Problem solving Leaders • • • • • • Do the right thing Change Long-term Ends Architects Inspiring & motivating Effective Management, by Williams South-Western College Publishing Copyright © 2002 Substitutes for Leadership: Do Leaders Always Matter? Leadership substitutes subordinate, task, or organizational characteristics make leaders redundant or unnecessary Leadership neutralizers subordinate, task, or organizational characteristics interfere with a leader’s actions Leaders don’t always matter Effective Management, by Williams South-Western College Publishing Copyright © 2002 6 7 Leadership Substitutes & Neutralizers Characteristic 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 Adapted Table 15.1 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 Effective Management, by Williams South-Western College Publishing Copyright © 2002 Who Leaders Are and What Leaders Do Leadership Behaviors Leadership Traits Effective Management, by Williams South-Western College Publishing Copyright © 2002 8 9 Leadership Traits Drive Desire to Lead Honesty/ Integrity Emotional Stability Cognitive Ability Selfconfidence Knowledge of the Business Effective Management, by Williams South-Western College Publishing Copyright © 2002 10 What Really Works? Traits & 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% Probability of success 63% Effective Management, by Williams South-Western College Publishing Copyright © 2002 What Really Works? (cont’d) 11 Charisma & Leadership Effectiveness Performance & Charisma 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Probability of success 72% Charisma & Perceived Leader Effectiveness 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Probability of success 89% Charisma & Leader Satisfaction 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Probability of success 90% Effective Management, by Williams South-Western College Publishing Copyright © 2002 12 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 Effective Management, by Williams South-Western College Publishing Copyright © 2002 13 Behavioral Theories Study Initiating Structure Consideration Michigan X Texas X X Ohio State X X Effective Management, by Williams South-Western College Publishing Copyright © 2002 Blake/Mouton Leadership Grid High 9 1,9 Country Club Management 9,9 Team Management Thoughtful attention to needs of people for satisfying relationships leads to a comfortable, friendly organization atmosphere & work tempo. Work accomplishment is from committed people; interdependence through a “common stake” in organization purpose leads to relationships of trust & respect. Concern for People 8 Low 7 6 5,5 Middle of the Road Management Adequate organization performance is possible through balancing the necessity to get out work with maintaining morale of people at a satisfactory level. 5 4 9,1 Authority-Compliance 1,1 3 Impoverished Management Exertion of minimum effort to get required work done is appropriate to sustain organization membership. 2 1 1 Adopted from Figure 15.2 Low 2 3 4 5 Efficiency in operations results from arranging conditions of work in such a way that human elements interfere to a minimum degree. 6 7Management,8by Williams 9 Effective South-Western College Publishing Copyright © 2002 High Concern for Production 15 Learning Objectives Situational Leadership After discussing this section, you should be able to: explain Fiedler’s contingency theory. describe how path-goal theory works. discuss Hersey & Blanchard’s situational theory. use the normative decision model when deciding just how you will make decisions as a leader. Effective Management, by Williams South-Western College Publishing Copyright © 2002 Putting Leaders in the Right Situtation: Fiedler’s Contingency Theory Leadership Style: Least Preferred Co-worker 16 Situational Favorableness Matching Leadership Styles to Situations Effective Management, by Williams South-Western College Publishing Copyright © 2002 17 Fiedler’s Contingency Theory Situational Favorableness Group Performance = Leadership Style Effective Management, by Williams South-Western College Publishing Copyright © 2002 Leadership Style: Least Preferred Co-Worker 18 Leadership style is the way a leader generally behaves towards followers stable and difficult to change Measured by the Least Preferred Coworker scale relationship-oriented task-oriented Effective Management, by Williams South-Western College Publishing Copyright © 2002 19 Situational Favorableness How a particular situation affects a leader’s ability to lead Three factors Leader-member relations Task structure Position power Effective Management, by Williams South-Western College Publishing Copyright © 2002 20 Situational Favorableness LeaderMember Relations Task Structure Position Power Situation Adapted From Figure 15.5 Good Good Good Good Poor Poor Poor High High Low Low High High Low Strong Weak Strong Weak Strong Weak I II Favorable III IV V Moderately Favorable Strong VI VII Unfavorable Effective Management, by Williams South-Western College Publishing Copyright © 2002 Matching Leadership Styles to Situations Good Bad LeaderMember Relations Task Structure Position Power Situation Adapted From Figure 15.6 Good Good Good Good Poor Poor Poor High High High High Low Low Low Strong Weak Strong Weak Strong Weak Strong I II Favorable III IV V Moderately Favorable VI VII Unfavorable 21 TaskOriented Leaders RelationshipOriented Leaders Effective Management, by Williams South-Western College Publishing Copyright © 2002 22 Adapting Leader Behavior: Path-Goal Theory Four Leadership Styles Subordinate and Environmental Contingencies Effective Management, by Williams South-Western College Publishing Copyright © 2002 23 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 Adapted From Figure 15.7 • Task Structure • Formal Authority System • Primary Work Group Effective Management, by Williams South-Western College Publishing Copyright © 2002 24 Leadership Styles Directive clarifying expectations and guidelines Supportive being friendly and approachable Participative allowing input on decisions Achievement-Oriented setting challenging goals Effective Management, by Williams South-Western College Publishing Copyright © 2002 Subordinate & Environmental Contingencies Subordinate Perceived ability Locus of control Experience 25 Environmental Task structure Formal authority system Primary work group Effective Management, by Williams South-Western College Publishing Copyright © 2002 When to Use Each of the Four Leadership Styles Directive Leadership Unstructured tasks Inexperienced workers Workers with low perceived ability Workers with external locus of control Unclear formal authority system 26 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 Effective Management, by Williams South-Western College Publishing Copyright © 2002 27 Adapting Leader Behavior: Hersey & Blanchard’s Situational Theory Worker Maturity Leadership Styles Effective Management, by Williams South-Western College Publishing Copyright © 2002 28 Worker Maturity Ability and willingness to take responsibility for one’s own work behavior Job maturity amount of knowledge, skill, ability, and experience people possess Psychological maturity a person’s feeling of self-confidence or selfrespect Effective Management, by Williams South-Western College Publishing Copyright © 2002 29 Leadership Styles Telling high task & low relationship one-way communication Selling high task and high relationship two-way communication and psychological support Participating low task and high relationship two-way communication and shared decision making Delegating low task and low relationship employees on their Management, by Williams own Effective South-Western College Publishing Copyright © 2002 30 Adapting Leader Behavior: Normative Decision Theory Decision Styles Decision Quality and Acceptance Effective Management, by Williams South-Western College Publishing Copyright © 2002 Decision Styles Style AI - Autocratic AII - Less autocratic C1- Consultative CII - More consultative GII - Group decision Explanation Solve the problem yourself using the information you have. Obtain the needed information from workers; then solve the problem yourself. Workers provide information but not alternatives. Share the problem with workers individually (but not as a group), seeking suggestions & possible alternatives. Solve the problem yourself. Share the problem with workers as a group, seeking suggestions & possible alternatives. Solve yourself. Share the problem with workers as a group, seeking suggestions & possible alternatives. Attempt to reach a consensus & be willing to accept & implement the workers’ solution. Effective Management, by Williams South-Western College Publishing Copyright © 2002 32 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 Effective Management, by Williams South-Western College Publishing Copyright © 2002 Decision Rules to Increase Decision Quality 33 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 Effective Management, by Williams South-Western College Publishing Copyright © 2002 Decision Rules to Increase Decision Quality (cont’d) 34 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 Effective Management, by Williams South-Western College Publishing Copyright © 2002 Decision Rules to Increase Decision Acceptance 35 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 Effective Management, by Williams South-Western College Publishing Copyright © 2002 Decision Rules to Increase Decision Acceptance (cont’d) 36 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 Effective Management, by Williams South-Western College Publishing Copyright © 2002 37 The Decision Tree N Y N N Y AI Y Y Y GII AI N Y N Y N AII N Y AI N Y N AI Y N Y N CII Y N AII CII GII Y CII N CI Y GII N CII Adapted From Figure 15.9 Effective Management, by Williams South-Western College Publishing Copyright © 2002 38 Learning Objectives Strategic Leadership After discussing this section, you should be able to: explain how visionary leadership (i.e. charismatic and transformational leadership) helps leaders achieve strategic leadership. Effective Management, by Williams South-Western College Publishing Copyright © 2002 39 Visionary Leadership Charismatic Leadership Transformational Leadership Effective Management, by Williams South-Western College Publishing Copyright © 2002 40 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 Effective Management, by Williams South-Western College Publishing Copyright © 2002 41 Types of Charismatic Leaders Ethical Charismatics provide developmental opportunities recognize follower contributions concerned with the interests of the group Unethical Charismatics control and manipulate followers want positive feedback motivated by self-interest Effective Management, by Williams South-Western College Publishing Copyright © 2002 42 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 Effective Management, by Williams South-Western College Publishing Copyright © 2002 43 Transformational Leadership Components Charismatic leadership/idealized influence Inspirational motivation Intellectual stimulation Individualized consideration Effective Management, by Williams South-Western College Publishing Copyright © 2002 44 What Really Happened? Leadership at Microsoft Balmer “mellows-out” Exhibits more considerate behaviors Becoming a “leader of leaders” Strategy and vision are important Effective Management, by Williams South-Western College Publishing Copyright © 2002