Chapter 9
Leadership and Decision Making
© 2007 Prentice Hall, Inc. All rights reserved.
9–1
LEARNING OUTCOMES
After reading this chapter, you should be able to:
Define leadership and distinguish it from management.
Summarize early approaches to the study of leadership.
Discuss the concept of situational approaches to leadership.
Describe transformational and charismatic perspectives on
leadership.
Identify and discuss leadership substitutes and neutralizers.
Discuss leaders as coaches and examine gender and crosscultural issues in leadership.
Describe strategic leadership, ethical leadership, and virtual
leadership.
Relate leadership to decision making and discuss both rational
and behavioral perspectives on decision making.
© 2007 Prentice Hall, Inc. All rights reserved.
9–2
What’s in It for Me?
Why does understanding leadership matter to
you?
 By mastering the material in this chapter, you’ll
benefit in two ways:
1) You’ll better understand how you can more effectively
function as a leader
2) You’ll have more insight into how your manager or boss
strives to motivate you through his or her own leadership
© 2007 Prentice Hall, Inc. All rights reserved.
9–3
The Nature of Leadership
What Is Leadership?
 The processes and behaviors used by someone,
such as a manager, to motivate, inspire, and
influence the behaviors of others.
Are Leadership and Management the Same?
 No. A person can be a manager, a leader, both, or
neither.
© 2007 Prentice Hall, Inc. All rights reserved.
9–4
Early Approaches to Leadership
Trait Approaches to Leadership
 Focused on identifying essential leadership traits
Intelligence, dominance, self-confidence, energy, activity
(versus passivity), and knowledge about the job
 Physical traits (height, body shape, handwriting)

 Yielded inconsistent results
 Recent research has focused on a limited set
of traits

Emotional intelligence, mental intelligence, drive, motivation,
honesty and integrity, self-confidence, knowledge of the
business, and charisma
© 2007 Prentice Hall, Inc. All rights reserved.
9–5
Early Approaches to Leadership (cont’d)
Behavioral Approaches to Leadership
 Focused on the behaviors of effective leaders versus
ineffective leaders
 Assumed that the behaviors of effective leaders
would be the same across all situations
Task-focused leader behaviors related to increasing the
performance of employees
 Employee-focused leader behaviors related to job
satisfaction, motivation, and well-being of employees

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9–6
The Situational Approach to Leadership
Situational Approach
 Assumes that appropriate leader behavior varies
from one situation to another
 Continuum of leadership behavior
Considers influences of the characteristics of the leader,
subordinates, and the situation
 Continuum ranges from having the leader make decisions
alone (i.e., task-focused) to having employees make
decisions with only minimal guidance from the leader

© 2007 Prentice Hall, Inc. All rights reserved.
9–7
Leadership Through
the Eyes of Followers
Transformational Leadership
 The set of abilities that allows a leader to recognize
the need for change, to create a vision to guide that
change, and to execute the change effectively
Transactional Leadership
 Basic management involving routine, regimented
activities (leading during a period of stability)
© 2007 Prentice Hall, Inc. All rights reserved.
9–8
Leadership Through the Eyes
of Followers (cont’d)
Charisma
 Charisma: A form of interpersonal attraction that
inspires support and acceptance
Charismatic Leadership
 Influence based on the leader’s personal charisma
© 2007 Prentice Hall, Inc. All rights reserved.
9–9
Special Issues in Leadership
Leadership Substitutes
 Individual, task, and organizational characteristics
that tend to outweigh the need for a leader to initiate
or direct employee performance
Leadership Neutralizers
 Various factors that neutralize leadership behaviors
or render them ineffective
The norms of strongly cohesive groups
 Elements of the job
 Organizational factors

© 2007 Prentice Hall, Inc. All rights reserved.
9–10
The Changing Nature of Leadership
Leader as Coaches
 From directive overseer to mentor
Gender
 Understanding the differences and dynamics in the
approaches of women and men to leadership
Cross-Cultural Leadership
 The effects of an individual’s native culture on his or
her approach to leadership when functioning in
another culture

Collectivism versus individualism
© 2007 Prentice Hall, Inc. All rights reserved.
9–11
Emerging Issues in Leadership
Strategic Leadership
 Leader’s ability to understand the complexities of the
organization and its environment and lead change so
as to enhance organizational competitiveness
Ethical Leadership
 Leader’s ability to maintain high ethical standards for
personal conduct, unfailingly exhibit ethical behavior,
and hold others to the same standards
Virtual Leadership
 Leading through effective communication and
maintaining collaborative relationships at a distance
© 2007 Prentice Hall, Inc. All rights reserved.
9–12
Leadership, Management,
and Decision Making
Rational Decision Making
 Recognizing and defining the decision situation
 Identifying alternatives
 Evaluating alternatives
 Selecting the best alternative
 Implementing the chosen alternative
 Following up and evaluating the results
© 2007 Prentice Hall, Inc. All rights reserved.
9–13
Behavioral Aspects of Decision Making
Political Forces in Decision Making
 Coalition: An informal alliance of individuals or groups formed to
achieve a common goal
Intuition
 An innate belief about something, often without conscious
consideration
Escalation of Commitment
 Staying with a chosen course of action even when it appears to
have been wrong
Risk Propensity
 The extent to which a decision maker is willing to gamble when
making a decision
© 2007 Prentice Hall, Inc. All rights reserved.
9–14