Management Batch III
Leadership
I.
The link between Leadership and Management
A. Leadership Use of Power and Authority
B. Characteristics, traits and Behaviours of Effective Leaders
C. Leadership Styles
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Visionary — mobilize people toward a vision.
Works best when a clear direction or change is needed.
Most positive climate.
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Coaching — develop people for the future.
Works best when helping people and building long-term strength.
Positive climate.
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Affiliative — create emotional bonds and harmony.
Works best to heal rifts in teams or motivate people in stressful times.
Positive climate.
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Democratic — build consensus through participation.
Works best to create consensus or get input.
Positive climate.
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Pacesetting — expect excellence and self-direction.
Works best to get quick results from a highly competent team.
Negative climate.
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Commanding — demand immediate compliance.
Works best in crisis or with problematic people.
Negative climate.
D. Transformational and Charismatic Leadership
Charismatic and Transformational leadership (TL for short) originated in an interest in learning more
about how leaders get followers to make self-sacrifices and put the needs of their organization above
their own material self-interests. This chapter describes the major theories of charismatic and TL,
provides an evaluation of these theories, and then offers guidelines for TL.
Transforming Leadership. This theory originated from a political scientist, James McGregor Burns. As
originally conceived, TL engages the moral values of followers, raises their consciousness about ethical
issues, and mobilizes their energy and resources to change institutions. Burns contrasted this TL with
transacting leadership, which motivates followers, not by appealing to a "higher" morale cause, but
rather, by appealing to their self-interests. For example, politicians promising to lower corporate taxes if
elected (seeking campaign donations and votes from the corporate elites). Transactional leadership is of
the form, "if you do this, then I will give you this". Followers follow to obtain something that benefits
them directly and personally. (Notice, there is no self-sacrifice here for any higher, "moral cause").
Incidentally, transactional leadership may involve values, such that the follower may be treated by the
leader with honesty and fairness, for doing good quality work (like in LMX theory).
TRANSFORMATIONAL LEADERSHIP
The most popular theory of transformational leadership is the one espoused by Bernard Bass.
He distinguishes transformational leadership from transactional leadership. The transformational leader
motivates followers by (a) making them more aware of the importance of task outcomes: (2) inducing
them to transcend their own self-interest for the sake of the organization or team; and (3) activating
their higher-order needs. In contrast, transactional leadership involves an exchange process that may
result in follower compliance with leader requests, but is not likely to create enthusiasm and
commitment to task objectives. According to Bass, effective leaders are both transactional and
transformational (they use a combination of both).
Leader Behaviors.
Transformational leadership involves the following types of behaviors:
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idealized influence. Behavior that arouses strong follower emotions and identification with the
leader
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intellectual stimulation. Behavior that increases follower awareness of problems and gets
followers to see problems from a new perspective
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individualized consideration. Providing support, encouragement and coaching
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inspirational motivation. Communicating an appealing vision and modeling appropriate
behavior.
Transactional leadership involves the following types of behavior.
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Contingent reward. Clarifying the work required to obtain rewards and use of incentives
and contingent rewards to motivate
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Active management by exception. Looking for mistakes and enforcing rules to avoid
mistakes
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Passive management by exception. Use of contingent punishment and other corrective
action in response to poor performance.
Influence Processes. It is assumed that the effectiveness of transactional leadership comes from
instrumental compliance (people comply because they receive valued rewards in exchange), and that
the process explaining transformational leadership is internalization (linking of task objectives to values
and goals of the leader).
Facilitating Conditions. Transformational leadership (TL) is considered to be effective for any situation
and for all cultures. However, the effects of TL may be greater in some situations than in others (e.g.
unstable environments, organic/flexible organizational structures, entrepreneurial cultures).
Research on the Theory. Generally, research supports the theory. In particular transformational
leadership appears more related to leadership effectiveness than does transactional leadership. Of the
transformational leadership dimensions, the ones most related to leadership effectiveness are:
charisma, intellectual stimulation, and individualized consideration. Contingent reward, a dimension of
transactional leadership, is also related to leadership effectiveness. However, the effects seem to be
stronger when leadership effectiveness is measured as followers self-reports of effort than when
measured with more objective measures. Support for Bass's transformational leadership theory has
come from survey research, laboratory experiments, field experiments, comparative studies and case
studies. Examples of the type of support coming from each type of study is provided in your text on
pages 255-260.
ATTRIBUTION THEORY OF CHARISMATIC LEADERSHIP
Attribution theory refers to theory that tries to explain how and why people come to perceive their
leader as charismatic. What determines whether I see you as a charismatic leader? The attribution
theory of leadership suggests that whether we see another as a charismatic leader is determined by the
leader's behavior, skill, and aspects of the situation, and the attributions we make regarding this
behavior (e.g. how we interpret this behavior).
Leader Traits and Behaviors. Whether we perceive another as charismatic depends on their behaviors,
but not all charismatic leaders are seen to have all the same behaviors. The importance of any one
behavior in determining perceptions of charisma will depend to some extent on the leadership situation.
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First, leaders are most likely to be seen as charismatic if their vision is quite different from the
current way things are being done, but is not too different (e.g. radical). Non-charismatic
leaders, however, typically support the "status quo" (the way things are currently done), or
advocate only small, incremental changes.
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Second, leaders are more likely to be seen as charismatic if they act in unconventional (new)
ways to achieve their mission. Innovative strategies are associated with charismatic leadership.
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Thirdly, leaders are more likely to be seen as charismatic if they make self-sacrifices and take
personal risk to achieve their vision. A leader who risks substantial personal loss in status,
money, leadership position or organizational membership in efforts to achieve his/her mission is
more likely to be viewed as charismatic.
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Fourthly, leaders who appear confident about their vision are more likely to be seen as
charismatic, then are leaders who project a lack of confidence and self-doubt. Followers who
believe the leader knows how to achieve the shared objective will work harder and increase the
probability of success.
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Fifthly, leaders are more likely to be seen as charismatic if they use "visioning" and persuasive
appeals to motivate others, than if they use authority or rely too much on consensus-seeking
participative decision processes.
Influence Processes. Why do followers of charismatic leaders become so strongly committed to
the task and the mission? We have come to learn that the primary reason is that followers personally
identify with the leader. That is to say, followers desire to please and to imitate (model/copy) the leader.
Charismatic leaders seem so special, due to their strategic insight, strong convictions/beliefs, selfconfidence, unconventional behavior and dynamic energy, that subordinates idolize (praise and respect)
these leaders and want to become like them. Receiving "approval" from the leader, followers sense of
"self-worth" is increased. Leader approval is usually expressed as praise and recognition of subordinate
behavior and accomplishments, which builds self-confidence and a deeper sense of obligation to meet
their leader's expectation of them. Leader approval becomes a prime motivation for followers to make
extraordinary contributions to achieving organizational goals. Also, subordinates are motivated by fear
of disappointing the leader and being rejected by him/her.
The influence of a charismatic leader is also due to internalization of new values and beliefs by
followers. It is more important for followers to adopt the leader' attitudes and beliefs about the work
they do than merely to imitate superficial aspects of the leader, such as in mannerisms, gestures and
speech. To internalize values, attitudes and beliefs of the leader means to accept them as your own. A
charismatic leader who can inspire others to accept his/her vision as their own, provides much intrinsic
motivation among followers to work toward achieving organizational objectives.
Facilitating Conditions. Leaders are most likely to be perceived as charismatic under certain
conditions: (a) when there is a crisis. Sometimes leaders will create a crisis in order to provide for
themselves more favorable conditions for being seen as charismatic. They can do this by increasing
subordinate dissatisfaction with current conditions, and presenting convincing arguments why
embracing change is mutually beneficial. The change the leader advocates, however, must be tied to a
vision that appeals to followers. For example, leaders in Hong Kong who argue strongly for a merger
between HKUST and Chinese U. seek to win support for the idea by emphasizing what they consider to
be weaknesses and inefficiencies in keeping the two institutions separate. They argue that it is critical
for the two institutions to come together for Hong Kong to have a university that can seriously compete
internationally.
SELF CONCEPT THEORY OF CHARISMATIC LEADERSHIP.
Charismatic leadership influences subordinates to work hard toward achieving organizational
objectives by appealing to their self-concept. Charismatic leadership is working when the sense of selfworth of subordinates is increased by behaving in ways that contribute to the leader's mission and
objectives.
Indicators of Charisma. We know that charisma is working when followers perceive the leader's
beliefs are correct, they are willing to obey the leader, they feel affection for the leader, are emotionally
involved in the mission of the group or organization, they have high performance goals, and they believe
that they can contribute to the success of the mission.
Key Traits and Behaviors. Firstly, lets deal with traits. Charismatic leaders are likely to have a
strong need for power, high self-confidence, and hold strong beliefs and ideals. Now, with regard to
behaviors . Charismatic leaders do the following. They.
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Articulate an appealing vision
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Use strong, expressive forms of communication when communicating the vision
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Take personal risks and make self-sacrifices to attain the mission
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Communicate high expectations
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Express confidence in followers
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Model behaviors consistent with the vision
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Manage follower impressions of the leader
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Build identification with the group or organization
Influence Process. Since we know that leaders who get their followers to
personally identify with them can increase their influence over followers, it is important to know how
leaders can get their employees to personally identify with them. They can do things that make them
appear very attractive, heroic and exceptional (articulate an appealing vision, display self-confidence,
make self-sacrifices, demonstrate courage and conviction). However, unlike the attribution theory of
leadership, which emphasizes identification with the leader (personal identification) as the key
motivating force for followers, self-concept theory emphasizes social identification, internalization, and
enhancing individual and collective "self-efficacy" (sense of competence). When there is a strong social
identification, people take pride in being part of a larger group and mission. They see how their efforts
and work roles are related to a larger cause or purpose, making their work more meaningful and
important. They put the needs of their work group above individual needs and make self-sacrifices to
advance the interests of the group of which they are a part. Social identification of this nature
strengthens shared values, beliefs and behavior norms among members of the group. Charismatic
leaders increase social identification by relating a follower's self-concept to shared values and role
identities associated with the group. Social identification can also be increased by use of slogans ("we're
number 1"), symbols (flags, uniforms) rituals (singing, saluting), and ceremonies (initiation of new
members), telling stories about past successes etc..
Internalization occurs when attainment of tasks objectives becomes a way for followers to
express their values and social identities. Charismatic leaders communicate a vision that appeals to
follower values, and links these values to task objectives. By emphasizing the symbolic and ideological
aspects of the work, the leader makes it more meaningful. Internalization is in full-force when followers
come to view their work role as closely tied to their self-concept and sense of self-worth.
Motivation to perform tasks to achieve objectives also depends on individual and collective selfefficacy. Self-efficacy refers to the belief that you are competent and capable of achieving difficult task
objectives. People with high self-efficacy are willing to put our more effort and persist longer to
overcome obstacles to achieving these objectives. Collective self-efficacy refers to the perception of
group members that they can accomplish exceptional things by working together. A charismatic leader
can increase the self-efficacy of followers by showing confidence in them and celebrating follower
accomplishments.
Facilitating Conditions. Charismatic leaders will be more effective when their vision is consistent with
the values and identities of their followers. Therefore, they need to understand the values and needs of
their followers. They should be able to define task roles in ideological ("moral") terms that appeal to
followers. This is more difficult to do for some tasks than for others (your book provides for very good
examples here, pg. 245, bottom paragraph). Also, while self-concept theory does not say that a crisis is a
necessary condition for charismatic leadership to emerge, it does say that charismatic leadership is more
likely to occur when an organization is in serious trouble, there is ambiguity about what should be done
to resolve the crisis, and there is anxiety and panic among followers. Such conditions favor the
emergence of a leader who is able to interpret the crisis and offer credible strategies for coping with it.
The current situation in Hong Kong with regard to SARS present ideal facilitating conditions for the
emergence of charismatic leadership, but which of the political leaders has embraced this opportunity
to emerge as a charismatic leader in the eyes of the public? Can you think of a leader in the recent past
who has emerged as a charismatic leader during a time of crisis? What were the conditions? What did
this leader do? Interestingly, the charismatic effects of a leader will be temporary unless their vision
continues to be relevant after the immediate crisis. Have perceptions of George Bush as charismatic
leader changed since just after the 9-11 crisis?
OTHER CONCEPTIONS OF CHARISMA
There are other explanations of how charismatic influence works. Above we said that charisma
influences others through (a) favorable attributions people make of leader traits and behaviors, and the
personal identification we develop with the leader based on these attributions; (b) linking the selfconcept and sense of self-worth of followers to accomplishing the mission and objectives of the
organization. The first refers to attribution theory of charismatic leadership, and the second refers to
the self-concept theory of leadership. In this section, we discuss other processes by which charisma
influences followers: (a) psychodynamic processes; (b) social contagion.
Psychodynamic Processes. Whether leaders are perceived as charismatic is most related to
psychological characteristics and states of the followers. These psychological states may be brought on
by prevailing social and economic circumstances. I will not devote attention to this, as the focus here is
on psychological vulnerabilities of followers, than make them search out a charismatic leader for
purposes of assuaging (improving upon) their negative psychological states.
Social Contagion. How is it that some leaders are perceived as charismatic among followers who do not
directly and personally interact with the leader? Followers sometimes work at great distances from the
leader. In the extreme, they might not even observe the leader at a distance or on television. These
conditions can prevail with religion, for example. Sometimes people obtain perceptions of charismatic
leadership, not from leader traits or behaviors, but rather from observing how others act toward, and
speak about their leader. That is, followers influence the perceptions and beliefs of each other, and this
we call social contagion. Here, followers seek social identification by adopting the views and beliefs of
others, who represent a cause they personally believe in. The others with whom they identify with on
this larger cause, usually have a symbolic leader. The leadership influence is much more based on the
followers' worship of the leader, than on anything the leader actually says or does. Accordingly, the
leaders' role is likely to be "fleeting" (of short duration), as they are only a leader symbolically. With
social contagion, the qualities attributed to a leader may become highly exaggerated as rumors and
stories spread among people who have had no direct contact with the leader. By the way, this is where
"contagion" comes from. Contagious means to "spread".  Again, I don't spend much time on this,
because the influence on followers comes less from the leader, and more from other followers.
Close and Distant Charisma. Do the attributions individuals make of a leader differ based on whether
they are in close or distal contact with them? Followers with minimal contact with their leaders tend to
describe their charismatic leaders in terms of their achievements, and their impact on their political
attitudes. Followers with more extensive contact with their leaders tended to describe their charismatic
leaders in terms of their influence on follower motivation, task behavior, and identification with the
leader. This suggests that attributions of charisma for distant leader are affected more by performance
cues and shared stereotypes, whereas attributions of charisma for close leaders are affected more by
leader behavior and personal skills. However, these findings are tentative, and more research is required
to determine what impact close versus distant contact with a leader has on subordinate perceptions and
attributions.
Routinization of Charisma. How do you make the impact of charismatic leadership last, when the leader
is suddenly no longer with the organization (e.g. dies, moves on to work for another employer). What
can the organization do to protect itself and ensure some degree of continuity in leadership effects?
There are a number of things that can be done. (1) succession planning. Groom a leader as a
replacement and have this person ready to take over at a moment's notice; (2) build an administrative
structure (procedures) that will sustain the influence of charismatic leadership when the leader is not
present; (3) embed the leader's vision in the culture of the organization by internalizing it among
followers. That is, to create a powerful and lasting culture (e.g. as Jack Welch at G.E. did).
CONSEQUENCES OF CHARISMATIC LEADERSHIP
Charismatic leadership can have both positive and negative outcomes.
Positive and Negative Charismatics. Negative charismatics have a personalized power
orientation. They emphasize personal identification over internalization. That is, they emphasize
personal devotion to self more than devotion to ideals. They seek to dominate and subjugate others by
keeping them dependent. Authority for important decisions is centralized in the leader, rewards and
punishments are used to manipulate and control followers, and information is restricted and used to
maintain an image of leader infallibility (flawlessness), or to exaggerate perceptions of external threats
to followers. Decisions of these leaders reflect a greater concern for self-glorification and maintaining
personal power than for the welfare of followers (sound like Sudam Hussein?). Positive charismatics,
however, emphasize socialized power. They stress internalization of social values over personal
identification. They want devotion to the ideology rather than devotion to themselves. Authority is
largely delegated, information is shared openly, participation in decisions encouraged, and rewards
given for behaviors that advance the collective mission and objectives.
The Dark Side of Charisma. There are some potential negative consequences to charismatic
leadership. Charismatics tend to make more risky decisions, exposing the organization to greater risk of
failure. While optimism is important for charisma, over-optimism makes it difficult for the leader to
recognize flaws in the vision. The leader may develop a sense of infallibility, ignoring objective
indications that their vision may be flawed or require revision
Effects of Positive Charismatics. Positive charismatics tend to create many more favorable and
lasting outcomes for an organization than do negative charismatics. This is because they have been
successful in getting others to internalize the mission, and empowered them to achieve it. However,
there can be some drawbacks (negatives). People who are energized, and highly committed to the
organizational cause, may simply overwork themselves, to the detriment of their own health, and to
their family. The constant stress of a high-achievement work environment, with much social and selfpressure for organizational success can cause health problems (physical and mental) and family
problems.
Practical Implications for Organizations. Charismatic leadership is not always required. It is
most suitable when radical change in strategy and culture is called for. Such need of radical change is
not always present. Also, research has shown that transformational leadership processes
(institutionalized within the organization) can bring about significant change in strategy and culture,
without the need for a specific charismatic leader as such. Also, sometimes transformational leadership
can come from groups of individuals rather than from a single charismatic leader.
TRANSFORMATIONAL VERSUS CHARISMATIC LEADERSHIP
The essence of charismatic leadership lies in being perceived as extraordinary by followers who
are dependent on the leader for guidance and inspiration. However, the essence of transformational
leadership is to inspire, develop and empower followers (encouraging independence from the leader).
Transformational leaders delegate authority, develop follower skills and self-confidence, create selfmanaged teams, provide direct access to sensitive information, eliminate unnecessary controls, and
build a strong culture for self-initiative. Charismatic leaders do more to nourish an image of themselves
among followers: an image of extraordinary competence. This often involves impression management,
information restriction, unconventional behavior and risk taking.
Bass argues that transformational leaders can be found in any organization at any level, and that
this type of leadership is universally important for all types of situations. In contrast, charismatic leaders
are rare, and their emergence is more dependent on favorable (facilitating) conditions. The reactions of
people to charismatic leaders are usually more extreme and divided than is the case for
transformational leaders. Bass proposed that charisma is a necessary component of transformational
leadership, but also noted that a leader can be charismatic but not transformational. A great question
emerges here! Contrast and compare transformational leadership to charismatic leadership, and
provide examples to illustrate their similarities and differences.
EVALUATION OF THEORIES
The theories in this chapter have emphasized the importance of follower emotion in leadership
effectiveness. Theories of leadership covered in earlier chapters emphasized rational-calculative aspects
of leader-follower interactions. The neocharismatic and transformational leadership theories also
underscore the importance of leaders making tasks and events meaningful (tied to a "higher cause') to
followers. There are several areas of future research identified on pages 262-263 -- research required to
fill existing gaps in what we know about transformational and charismatic leadership.
GUIDELINES FOR TRANSFORMATIONL LEADERSHIP
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Articulate a clear and appealing vision!
Explain how the vision can be obtained!
Act confidently and optimistically!
Express confidence in followers!
Use dramatic, symbolic actions to emphasize key values!
Lead by example!
Empower people to achieve the vision!
E. Leader as a mentor and coach
II.
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Motivation
A. Relationship between motivation , performance and engagement
B. Motivation Through Need Satisfaction
C. Motivation through goal setting
D. Positive reinforcement and recognition
E. Expectancy Theory of Motivation
The expectancy theory was proposed by Victor Vroom of Yale School of Management in 1964.
Vroom stresses and focuses on outcomes, and not on needs unlike Maslow and Herzberg. The
theory states that the intensity of a tendency to perform in a particular manner is dependent on
the intensity of an expectation that the performance will be followed by a definite outcome and
on the appeal of the outcome to the individual.
The Expectancy theory states that employee’s motivation is an outcome of how much an
individual wants a reward (Valence), the assessment that the likelihood that the effort will lead
to expected performance (Expectancy) and the belief that the performance will lead to reward
(Instrumentality). In short, Valence is the significance associated by an individual about the
expected outcome. It is an expected and not the actual satisfaction that an employee expects to
receive after achieving the goals. Expectancy is the faith that better efforts will result in better
performance. Expectancy is influenced by factors such as possession of appropriate skills for
performing the job, availability of right resources, availability of crucial information and getting
the required support for completing the job.
Instrumentality is the faith that if you perform well, then a valid outcome will be there.
Instrumentality is affected by factors such as believe in the people who decide who receives
what outcome, the simplicity of the process deciding who gets what outcome, and clarity of
relationship between performance and outcomes. Thus, the expectancy theory concentrates on
the following three relationships:
Effort-performance relationship: What is the likelihood that the individual’s effort be recognized
in his performance appraisal?
Performance-reward relationship: It talks about the extent to which the employee believes that
getting a good performance appraisal leads to organizational rewards.
Rewards-personal goals relationship: It is all about the attractiveness or appeal of the potential
reward to the individual.
Vroom was of view that employees consciously decide whether to perform or not at the job.
This decision solely depended on the employee’s motivation level which in turn depends on
three factors of expectancy, valence and instrumentality.
Advantages of the Expectancy Theory
It is based on self-interest individual who want to achieve maximum satisfaction and who wants
to minimize dissatisfaction.
This theory stresses upon the expectations and perception; what is real and actual is immaterial.
It emphasizes on rewards or pay-offs.
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III.
It focuses on psychological extravagance where final objective of individual is to attain
maximum pleasure and least pain.
Limitations of the Expectancy Theory
The expectancy theory seems to be idealistic because quite a few individuals perceive high
degree correlation between performance and rewards.
The application of this theory is limited as reward is not directly correlated with performance in
many organizations. It is related to other parameters also such as position, effort, responsibility,
education, etc.
Implications of the Expectancy Theory
The managers can correlate the preferred outcomes to the aimed performance levels.
The managers must ensure that the employees can achieve the aimed performance levels.
The deserving employees must be rewarded for their exceptional performance.
The reward system must be fair and just in an organization.
Organizations must design interesting, dynamic and challenging jobs.
The employee’s motivation level should be continually assessed through various techniques
such as questionnaire, personal interviews, etc.
Reference:
http://www.managementstudyguide.com/expectancy-theory-motivation.htm
Teams, Groups and Teamwork
A. Types of Teams and Groups
B.
C.
D.
E.
Characteristics of Effective Work Groups
Stages of Group Development
Managerial Actions for Building Teamworks
Being an Effective Team Player