Chapter
9
LEADERSHIP AND
DECISION-MAKING
PowerPoint Presentation by Charlie Cook
Copyright © 2005 Prentice Hall, Inc.
All rights reserved.
LEARNING OBJECTIVES
After reading this chapter, you should be able to:
1. Define leadership and distinguish it from
management.
2. Summarize early approaches to the study of
leadership.
3. Discuss the concept of situational approaches to
leadership.
4. Describe transformational and charismatic
perspectives on leadership.
5. Identify and discuss leadership substitutes
and neutralizers.
Copyright © 2005 Prentice Hall, Inc. All rights reserved.
6–2
L E A R N I N G O B J E C T I V E S (cont’d)
After reading this chapter, you should be able to:
6. Discuss leaders as coaches and examine gender and
cross-cultural issues in leadership.
7. Describe strategic leadership, ethical leadership, and
virtual leadership.
8. Relate leadership to decision making and discuss
both rational and behavioral perspectives on
decision making
Copyright © 2005 Prentice Hall, Inc. All rights reserved.
6–3
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
1) Can you tell them how you want to be led?
Copyright © 2005 Prentice Hall, Inc. All rights reserved.
6–4
The Nature of Leadership
• What Is Leadership?
 The processes and behaviors used by someone, to
motivate, inspire, and influence the behaviors of
others.
• Are Leadership and Management the Same?
 No
 Management is more about the formal steps required
to plan and execute business.
 Leadership is setting a vision, gaining alignment
toward fulfilling that vision, and inspiring people to get
it done.
Copyright © 2005 Prentice Hall, Inc. All rights reserved.
6–5
TABLE 9.1
Kotter’s Distinctions Between Management and Leadership
Activity
Management
Leadership
Creating an Agenda
Planning and budgeting
Establishing direction
Developing a Human
Network for Achieving
the Agenda
Organizing and staffing
Aligning people
Executing Plans
Controlling and problem solving
Motivating and inspiring
Outcomes
Produces a degree of
predictability and order and has
the potential to consistently
produce major results expected
by various stakeholders.
Produce change, often to a
dramatic degree, and has the
potential to produce extremely
useful change.
Source: The Free Press, an imprint of Simon & Schuster Adult Publishing Group, from A Force for Change:
How Leadership Differs from Management, by John P. Kotter, 1990. Copyright 1990 by John P. Kotter, Inc.
Copyright © 2005 Prentice Hall, Inc. All rights reserved.
6–6
Strategy & Theory Relationships
• Psychological Contract
 Stop bad behavior, encourage good
 Job Satisfaction, Turnover, morale
• Scientific Management
 Efficiency allows money incentives
• The Hawthorne Effect
 Watch, display, improve
• McGregor’s X & Y Theories
 X (lazy), Y (dedicated)
• Maslow’s Hierarchy of Needs
 Reaching next level motivates
• Herzberg’s 2 factors
 Hygiene vs. motivating
• Expectancy Theory
 Size, Expectations, Valued
• Equity theory
 Getting even
Copyright © 2005 Prentice Hall, Inc. All rights reserved.
• Personality
Relate the theories
to the strategy
Management
vs.
Leadership
6–7
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
 Yielded inconsistent results
 Recent research finds something more.
 Intelligence,
emotional intelligence, drive, motivation,
honesty and integrity, self-confidence, knowledge of the
business, and charisma
Copyright © 2005 Prentice Hall, Inc. All rights reserved.
6–8
Early Approaches to Leadership (cont’d)
• Behavioral Approaches to Leadership
 Focuses on the behaviors of leaders
 Assumed that the behaviors of effective leaders were
hard-coded in the leader type:
 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
 Managers should learn to use both behaviors, and in
different proportions as the situation requires.
Copyright © 2005 Prentice Hall, Inc. All rights reserved.
6–9
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
Copyright © 2005 Prentice Hall, Inc. All rights reserved.
6–10
Strategy & Theory Relationships
• Psychological Contract
 Stop bad behavior, encourage good
 Job Satisfaction, Turnover, morale
• Scientific Management
 Efficiency allows money incentives
• The Hawthorne Effect
 Watch, display, improve
• McGregor’s X & Y Theories
 X (lazy), Y (dedicated)
• Maslow’s Hierarchy of Needs
 Reaching next level motivates
• Herzberg’s 2 factors
 Hygiene vs. motivating
• Expectancy Theory
 Size, Expectations, Valued
• Equity theory
 Getting even
Copyright © 2005 Prentice Hall, Inc. All rights reserved.
• Personality
Relate the theories
to the strategy
Trait
vs.
Behavioral
vs.
Situational
6–11
Leadership Through the Eyes
of Followers (cont’d)
• Charismatic Leadership
Influence based on the leader’s inspiring
personality, support and acceptance.
 Inspires great confidence
 Galvanizing
 Shoots for the stars
 Might grow to believe they actually are superior.
– Ethical considerations
Copyright © 2005 Prentice Hall, Inc. All rights reserved.
6–13
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)
What
What
What
do
type
you
happens
iswant
needed
inwhen
aas
brand-new
the
thefirm
transformational
fast-growing
matures?
leader
firm?leaves?
Copyright © 2005 Prentice Hall, Inc. All rights reserved.
6–14
Basic Management Skills
Urgent vs.
Important:
Realizing Doing
what the
How you
is GET
important
important
your
Time
management
Management
job
Skills
Conceptual
Skills
Human
Relations
Skills
Relating with
the team that
gets it done
How you keep
your
management
job
DecisionMaking
Skills
Technical
Skills
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6–19
Rational Decision Making
• Recognizing and defining the decision situation
 Where do we stand
 Where do we need to be
• Identifying alternatives
 Look beyond the obvious
 Alignment with long term goals
• Evaluating alternatives
Let’s be Booniez?
-an outdoor recreation
equipment retailer on
Fir Ave. behind
Costco in Marina?
 From all stakeholders’ eyes
• Selecting the best alternative
 Building commitment (coalition)
• Implementing the chosen alternative
• Following up and evaluating the results

Escalation of commitment
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6–20
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
Copyright © 2005 Prentice Hall, Inc. All rights reserved.
6–22
KEY TERMS
• behavioral approach to
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leadership
charismatic leadership
coalition
decision making
employee-focused leader
behavior
escalation of commitment
ethical leadership
intuition
leadership
leadership neutralizers
leadership substitutes
risk propensity
Copyright © 2005 Prentice Hall, Inc. All rights reserved.
• situational approach to
•
•
•
•
•
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leadership
strategic leadership
task-focused leader behavior
trait approach to leadership
transactional leadership
transformational leadership
virtual leadership
6–23