Economics for Future Leaders
Lecture 1 – The Functions of
Leadership, June 26, 2012
The Functions of Leadership in
Organization
 “Leadership is a process of social
influence in which one person is able
to enlist the aid and support of others
in the accomplishment of a common
task.”
 Key points:
 Leadership is a group activity.
 Leadership is based on social influence.
 Leadership revolves around a common
task.
The Functions of Leadership in
Organization
 The specification seems simple, but
the reality of leadership is complex.
 Intrapersonal factors (i.e., thoughts and
emotions) interact with;
 Interpersonal processes (i.e., attraction,
communication, influence) to have
effects on;
 A dynamic external environment.
Organizational Functions
 Groups and organizations are by
nature inefficient.
 If one person could accomplish a job,
the creation or assignment of a group
would not be warranted.
 Groups require coordination of the
efforts of their members.
Organizational Functions
 The time and energy spent in that
coordination are diverted from
productive activity.
 Organizations, which are groups of
groups, demand even greater
resources applied to coordination.
Organizational Functions
 But, most of the productive activities
in society cannot be accomplished by
individuals.
 Organizations are essential to the
realization of the goals of productive
endeavor, and leaders are essential
to organizational coordination.
Organizational Functions
 Internal maintenance.
 The primary function that an
organization must achieve is the
regularization of activities to provide a
stable base for productive operation
 Reliability – recurrent events are
responded to in the same way every
time they occur.
Organizational Functions
 Internal maintenance (contd.).
 Predictability – members of the
organization know what is likely to occur
and when.
 Accountability – reliability and
predictability allows leaders to allocate
responsibility for errors and identify
methods of correction.
Organizational Functions
 External adaptability.
 Organizations must know what is going
on around them and adapt to changes in
the environment.
 Sensitivity.
 Flexibility.
 Responsiveness.
Organizational Functions
 Balancing contradictory demands.
 Problem: procedures that ensure reliability and
predictability reduce flexibility and
responsiveness.
 Organizational survival is a question of balance.
 Organizations with stable environments will
benefit from the efficiencies of regularized
processes.
 Organizations with competitive, unstable
environments will need to sacrifice reliability to
enhance responsiveness.
The Organizational Functions of
Leadership
 In an orderly, structured, and wellunderstood environment, the primary
responsibilities are guidance and
motivation.
 Assign people to tasks or responsibilities,
to outline what is expected, and to
facilitate and encourage goal attainment.
The Organizational Functions of
Leadership
 In a less orderly environment calling
for external adaptability, the crucial
functions are problem solving and
innovation.
 The leader must create the kind of
atmosphere that encourages sensitivity,
flexibility, and creativity.
 The leader must be a change agent.
Status Differentiation
 The concept of leadership implies a
differentiation of authority and
responsibilities between group
members.
 This differentiation is known as
status.
The Functions of Status
Bestowal
 Positive functions.





The
The
The
The
The
elevation of competence.
assignment of authority.
distribution of rewards.
modeling of normative expectancies.
facilitation of innovation.
The Functions of Status
Bestowal
 Negative functions.
 Means-end reversal (status for its own
sake).
 Distortion of communication.
 Rigidification of the status structure.
 Primogeniture.
 Territoriality, cronyism, and petty
competition.
The Cultural Evolution of
Effective Leadership
 The desirability of leadership characteristics
will be influenced by social context.
 Every culture (whether religious, national,
or organizational) prescribes which
behaviors are normative in a social context.
 Culture is the way in which a social unit
adapts to its environment over time.
 The culture is first determined by external
adaptability, then internal maintenance
processes are brought into coherence.
The Cultural Evolution of
Effective Leadership
 Examples: if climate or lack of arable
land make hunting and gathering more
feasible than agriculture, hunting and
gathering will tend to be adopted as the
primary means of subsistence.
 Hunting and gathering cultures must
encourage cooperation while developing
independent and resourceful members.
The Cultural Evolution of
Effective Leadership
 Democratic political structures (e.g.,
tribal councils) and egalitarian religious
systems help to encourage the growth
of self-sufficient and cooperative group
members.
 An unpredictable supply of food makes
creativity in resource use important and
making sharing necessary to reduce the
problems of temporary shortages.
The Cultural Evolution of
Effective Leadership
 A premium on cooperation and a
penalty for competition.
 Leadership is situational (temporary
roles for particular tasks) or
generalized (roles determined by
progress through the life cycle).
The Cultural Evolution of
Effective Leadership
 The transition to horticulture increased the
opportunities for the society to exploit its
environment to generate surpluses.
 Created a type of semiegalitarian
leadership called managerial leadership
with power over redistribution of goods and
services.
 Primary skills are persuasion and negotiation.
 The redistributor model may lead to more
autocratic structures.
The Cultural Evolution of
Effective Leadership
 Large scale agrarian societies tend to
develop hierarchical power structures
and restrict access to leadership
roles.
 Agrarian economies place a primary
premium not on resourcefulness but
on reliability.
The Cultural Evolution of
Effective Leadership
 The most prized personality trait of
the masses is obedience.
 Autocratic leadership style, high on
direction and low on participation
combined with “benevolent
paternalism.”
The Cultural Evolution of
Effective Leadership
 Many modern organizations reflect the
experiences of the hunter-gatherer or
agrarian cultures.
 Organizations with complex and
unpredictable environments draw on
hunter-gatherer leadership structures.
 Organizations with stable and predictable
environments more closely reflect agrarian
societies.
Leadership Question #1
 Looking out at the real world of
private, nonprofit, and public
organizations, would you say that
most of them draw on the huntergathering tradition or the agrarian
tradition of leadership? That is, do
most organizations have complex and
unpredictable or stable and
predictable environments? Or are
other factors relevant?