Managing Business Relationships Leadership

1. Managing Business RelationshipsLeadership Dr. Vesselin Blagoev

2. Managerial Roles & Activities • Informational- monitoring (scanning for) information, disseminating and acting as spokesperson. • Decisional…. allocating resources (ie budgets and schedules), handling disturbances (pressures and crises) and negotiating. • Interpersonal…leader, liaison and figurehead • In the last category we have the relationship dimension.

3. Management and Leadership

4. Leadership • “ A vital and, some argue, increasingly dominant, aspect of organisation is the role of management and leadership. Research and academic and practitioner interest in management and leadership has (sic) blossomed during the latter part of the twentieth century. As interest in and concern about organisational change has grown, the role of leadership has been emphasised”. Brooks 2003 p.146.

5. T.J.Watson 2002 p.3 ( reproducing a conversation between Watson and a ‘real life’ manager): • “So the problem is..”? • “It’s the people management thing. It’s handling the people who work for me. They are a constant headache. I’ve tried to read the books and I’ve been on people management courses. I didn’t miss one of the OB classes on my MBA course. But I still despair at the difficulty I have with managing people in my function”……. • “Why is this do you think”? • “Perhaps it’s because they are marketing people. We often say that managing marketing people is like herding cats. Can you imagine trying to herd cats? It’s a powerful image isn’t it”?

6. Does leadership matter? • Impact of ex- New York mayor Giuliani after the events of September 11th 2001. • “In the weeks that followed, Giuliani provided the leadership that the public so craved. Day after day, his mastery of the details of rescue and recovery plus his calm explanations of awful news helped to reassure a traumatised city that the crisis was under control. He found just the right balance between being a hardnosed administrator and a caring and emotional leader”. MBR (2004) p.72.

7. Leadership • The ability to influence a group toward the achievement of goals

8. “Leaders…aim to influence and guide others into pursuing particular objectives or visions of the future and to stimulate them into wanting to follow” Brooks 2003 p.150.

9. Management and Leadership • Management is about the efficiency • Leadership is about inspiration

10. Theories about Leadership • Trait theories • Behavioral theories • Contingency theories

11. Leadership Trait theories

12. LeadershipTrait theories • Theories that consider personal qualities and characteristics that differentiate leaders from non-leaders • The leaders are born • Often described as charismatic, enthusiastic and courageous

13. LeadershipTraittheories • Research in the 60s - over 80 traits • 5 are consideredThe Big Five

14. Trait theoriesThe Big Five • Extroverted– enjoy being with people, full of energy, positive emotions, able to assert themselves • Agreeable– cooperation and social harmony, value the others • Conscientiousness– disciplined, keep commitments they make

15. Trait theoriesThe Big Five • Emotional Intelligence(or inverselyEmotional Stability)– tendency to manage/experience negative feelings: anxiety, anger, depression, emotionally reactive • Openness to Experience– intellectually curious, creative and flexible

16. LeadershipTraittheories Six traits on which leaders tend to differ from non-leaders: • Ambition and energy • Desire to lead • Honesty and integrity • Self-confidence • Emotional Intelligence • Job-relevant knowledge

17. Trait approach….personal qualities or characteristics ….self-evidently a factor to some extent but : “the search for what leaders had in common only managed to establish the range of variation possible in leaders, from the short balding French Emperor to the handsome gay Macedonian one”. P. Thompson & D. McHugh 2002 p.267.

18. Leadership Behavioral theories

19. LeadershipBehavioraltheories • Specific behaviors differentiate leaders from non-leaders. • If there are such behaviors we can teach leaders

20. LeadershipBehavioraltheories • Ohio State Studies • University of Michigan Studies • The Managerial Grid • Scandinavian Studies

21. LeadershipBehavioraltheories • Ohio State Studies (late 40s) • Initiating structure– define and structure his/her role, behavior that attempts to organize the work, goals, work relationships to achieve these goals • Consideration– the extent to which the person is willing to base the relationships on mutual trust, respect for employees’ ideas, regard for their feelings

22. LeadershipBehavioraltheories University of Michigan Studies • Employee-oriented leader – Emphasizing interpersonal relations; taking a personal interest in the needs of employees and accepting individual differences among members • Production-oriented – Emphasizing technical or task aspects of the job

23. LeadershipBehavioraltheories Blake & Mouton (1964) • Managerial Grid – A 9x9 matrix outlining 81 different leadership styles. Concern for people (1.1-1.9; laissez-faire/easy going) and Concern for production (9.1-9.9; 9.1 is authoritarian type)

24. LeadershipBehavioraltheories Scandinavian Studies(40-60s) • Development-oriented leader – One who values experimentation, seeks new ideas, and generates and implements change • In the changing world effective leaders would use/show development-oriented behavior

25. Leadership Contingencytheories

26. LeadershipContingencytheories • Fiedler Contingency Model: Favorability of leadership situation • Hersey & Blanchard’s Situational Theory (Maturity of followers) • Vroom & Yetton: Leader-Participation (Quality and acceptance of leader’s decisions) • House and Dressler: Path-goal theory • Leader-Member Exchange Theory

27. LeadershipContingencytheories • Fiedler contingency model : Effective groups depend on a proper match between a leader’s style of interacting with subordinates and the degree to which the situation gives control and influence to the leader. • Identifying leadership style: LPC questionnaire -> Least Preferred Coworker, 16 contrasting adjectives: pleasant-unpleasant, efficient-inefficient. If you describe your LPC with favorable terms - you are “relationship-oriented”. Otherwise – “task-oriented”

28. LeadershipContingencytheories • LPC – Least preferred co-worker questionnaire/scale :Rating given by leaders about the person with whom they could work least well • Up to 20 questions: pleasant/unpleasant, friendly/unfriendly; helpful/frustrating, distant/close, co-operative/non-…, open/guarded, boring/interesting The LPC score is the sum of all marks  Pleasant Unpleasant 8 7 6 5 4 3 2 1

29. LeadershipContingencytheories • Interpretation: the leader with a high LPC score derives most satisfaction from interpersonal relationships and if needed he/she is motivated to act in a supportive, considerate manner • The leader with low LPC score derives most satisfaction from a performance of a task and achieving objectives

30. Leadership Contingency theories • Favorability of the leadership situation (Fiedler) – 3 major variables which determine the favorability of the situation and which affect the leader’s role and influence 

31. Leadership Contingency theories Defining the situation : • Leader-member relations: The degree of confidence, trust and respect members have in their leader and their willingness to follow him • Task structure: degree to which the task is clearly defined, assignments are procedurised • Position power: degree of influence for hiring, firing, promotions, salary increase

32. Leadership Contingency theories Fiedler constructs 8 combinations of group-task situations from these 3 variables: • When the situation is : • Very favourable (good L-member relations, structured task, strong position power) or • Very unfavourable (poor L-member relations, unstructured task, weak position power)  • Then a task-oriented leader (low LPC score) with a directive, controlling style will be more effective

33. Leadership Contingency theories • When the situation is : • moderately favourable and the variables are mixed • Then a leader with an interpersonal relationship orientation (high LPC score) with a participative approach will be more effective

34. Leadership Contingency theories Cognitive Resource • Fiedler & Garcia: Cognitive resource theory :states that stress unfavorably affects a situation and that intelligence (low pressure) and experience (high pressure) can lessen the influence of stress on the leader

35. Leadership Contingency theoriesSituational Theory (SLT) Hersey & BlanchardReadiness–Ability and Willingness of people to perform a specific task: • R1: Low follower Readiness – both unable and unwilling • R2: Low to moderate follower R – unable but willing, lack ability but motivated • R3: Moderate to high follower Readiness – able but unwilling, able but insecure • R4: Able and willing – ability + commitment

36. Leader behavior High relat S3Share ideas & facilitate in making decisions S2 Explain your decisions and provide opportunity for clarification Selling Participating Hi task Hi rel Hi task Lo rel Lo task Lo rel High task Lo rel Relationship (supportive) behavior Telling S4 Turn over responsibi-lity for decisions and imple-mentation Delegating S1 Provide specific instructions and control Low relat Low task High task Task behavior

37. Leadership Contingency theoriesSituational Theory (SLT) Task and Relationship behaviour 4 leadership styles: • S1: Telling – high amount of guidance but limited supportive behavior – best for R1 • S2: Selling – high amount of guidance and supportive behavior – best for R2 • S3: Participating – low amount of guidance but extensive supportive behavior – best for R3 • S4: Delegating – little amount of guidance and supportive behavior – best for R4

38. Leader behavior High relat S3Share ideas & facilitate in making decisions S2 Explain your decisions and provide opportunity for clarification Selling Participating Hi task Hi rel Hi task Lo rel Lo task Lo rel High task Lo rel Relationship (supportive) behavior Telling S4 Turn over responsibi-lity for decisions and imple-mentation Delegating S1 Provide specific instructions and control Low relat Low task High task Task behavior

39. Leadership Contingency theories LMX Theory • Leader-Member Exchange Theory:Leaders create in-groups and out-groups. Subordinates with in-group status will have higher performance ratings, less turnover, and greater job satisfaction

40. Leadership Contingency theoriesPath-Goal Theory • Path-goal theory (House, Dessler): it is the leaders job to assist followers in attaining their goals and to provide the necessary direction and/or support to ensure that their goals are compatible with the overall objectives of the group or organization

41. Leadership Contingency theoriesPath-Goal Theory House 4 types of leadership behaviour: • Directive • Supportive • Participative – consulting with subordinates, evaluation of their opinion before decisions • Achievement-oriented – setting challenging goals for the subordinates, asking for improvements in their performance, etc • The leader can practice different behaviors depending on the task and situation

42. Leadership Contingency theoriesPath-Goal Theory Path-goal theory Leader-ship beha-viour Directive Supportive Participa-tive Achieve-ment-oriented Personal characteristics of subordinates (how they react to Mgr’s behavior) Goal clarity: improved job performance and satisfaction Subordinates’ perceptions and motivation Nature of the task (routine and structured or non-r and unstructured)

43. Leadership Contingency theoriesLeader-Participation Model • Vroom & YettonLeader-participation Model: 2 aspects of the leaders decision: • Decision quality, or rationality, is the effect that the decision has on group performance • Decision acceptance refers to the motivation and commitment of group members in implementing the decision • The 3rd consideration is the amount of time required to make the decision

44. Leadership Contingency theoriesLeader-Participation Model • Vroom & Yetton: 5 main mgmt decision styles: • Autocratic • A.1: Leader solves/makes decisions alone • A.2: Leader gets information from subordinates but makes the decisions alone • Consultative • C.1: problem is shared individually with relevant subordinates. Then L makes the decision • C.2: problem is shared with subordinates as a group, then L makes the decision • Group– the problem is shared with sub as a group. L acts as Chair, not as advocate. All make the decision

45. Leadership Contingency theoriesLeader-Participation Model • Vroom & Jago contingency model: 12 contingency variables leading to 5 styles: • Quality requirements • Commitment requirements • Leader information • Problem structure and time constraints • Commitment probability • Goal congruence and geographical dispersion • Subordinate conflict and information • Motivation time and development

46. Leadership Contingency theories Task and Relationship behaviour: • Task behavior – the extent to which the leader provides directions for the actions of the subordinates, sets goals for them, defines their roles and how to perform • Relationship behavior is the extent to which L engages in two-way communication with subordinates, listens to them and provides support and encouragement

47. Leaders as Shapers of Meaning

48. Leaders as Shapers of Meaning • The leaders frame the future in a way which is understandable and acceptable by the others • Framing is a way to use the language to manage meaning • Framing has a double meaning: • framing = targeting(what to see) • framing = positioning(how to see it)

49. Leaders as Shapers of Meaning • Charismatic leadership: Followers make attributions of heroic or extraordinary leadership abilities when they observe certain behaviors • The charismatic leaders have 5 important characteristics: vision and articulation, personal risk, environmental sensitivity, sensitivity to follower needs, unconventional behavior

50. Leaders as Shapers of Meaning • Visions and articulation: The leader has a vision – expressed as an idealized goal – that proposes a future better than the status quo. It is able to clarify the importance of the vision in terms that are understandable to others