3
People in Organizations
Business
Essentials
6e
Ronald J. Ebert
Ricky W. Griffin
9
LEADERSHIP AND DECISION-MAKING
© 2007 Prentice Hall, Inc.
All rights reserved.
PowerPoint Presentation by Charlie Cook
The University of West Alabama
BUS
100
CHAPTER 9
LEADERSHIP
AND
DECISION-MAKING
© 2007 Prentice Hall, Inc. All rights reserved.
9–2
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.
© 2007 Prentice Hall, Inc. All rights reserved.
9–3
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
© 2007 Prentice Hall, Inc. All rights reserved.
9–4
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.
9–5
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.
9–6
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.
© 2007 Prentice Hall, Inc. All rights reserved.
9–7
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
 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.
9–8
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

© 2007 Prentice Hall, Inc. All rights reserved.
9–9
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

© 2007 Prentice Hall, Inc. All rights reserved.
9–10
FIGURE 9.1
The Leadership Continuum
Source: Harvard Business Review. An exhibit from “How to Choose a Leadership Pattern” by Robert Tannenbaum and
Warren Schmidt (May-June 1973). Copyright 1973 by the President and Fellows of Harvard College; all rights reserved.
© 2007 Prentice Hall, Inc. All rights reserved.
9–11
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.
9–12
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.
9–13
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.
9–14
TABLE 9.2
Leadership Substitutes and Neutralizers
Individual
Factors
• Individual professionalism
• Individual ability, knowledge, and motivation
• Individual experience and training
• Indifference to rewards
Job
Factors
• Structured/automated
• Highly controlled
• Intrinsically satisfying
• Embedded feedback
Organization
Factors
• Explicit plans and goals
• Rigid rules and procedures
• Rigid reward system not tied to performance
• Physical distance between supervisor and
subordinate
Group
Factors
• Group performance norms
• High level of group cohesiveness
• Group interdependence
© 2007 Prentice Hall, Inc. All rights reserved.
9–15
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.
9–16
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.
9–17
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.
9–18
FIGURE 9.3
Steps in the Rational Decision-Making Process
© 2007 Prentice Hall, Inc. All rights reserved.
9–19
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.
9–20
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
© 2007 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
9–21