Chapter 14 Leadership

1. MGMT Chuck Williams Chapter 14Leadership Designed & Prepared byB-books, Ltd.

2. What Is Leadership? After reading these sections, you should be able to: • explain what leadership is. • describe who leaders are and what effectiveleaders do.

3. Leadership DifferencesbetweenLeaders andManagers SubstitutesforLeadership 1

4. Leaders versus Managers MANAGERS Do things right Status quo Short-term Means Builders Problem solving LEADERS Do the right thing Change Long-term Ends Architects Inspiring & motivating 1

5. Leaders versus Managers American organizations (and probably those in much of the rest of the industrialized world) are under led and over managed. They do not pay enoughattention to doing the right thing, while theypay too much attention to doing things right. - Warren Bennis 1

6. Beyond the Book Substitutes for Leadership • Leadership substitutes • subordinate, task, or organizational characteristics that make leaders redundant or unnecessary • Leadership neutralizers • subordinate, task, or organizational characteristics that interfere with a leader’s actions • Leaders don’t always matter • Poor leadership is not the cause of every organizational crisis

7. Beyond the Book Leadership Substitutes and Neutralizers

8. Who Leaders Are and What Leaders Do Leadership Traits Leadership Behavior 2

9. Initiating Structure The degree to which a leader structures the roles of followers by setting goals, giving directions, setting deadlines, and assigning tasks. Consideration The extent to which a leader is friendly, approachable, and supportive and shows concern for employees. Leadership Behaviors 2.2

10. Blake/Moulton Leadership Grid 9 1,9 Country Club Management Team Management 9,9 8 7 6 5 4 3 2 Impoverished Management Authority-Compliance 1,1 9,1 1 1 2 3 4 5 6 7 8 9 High Middle of theRoad5,5 5,5 Concern for People Low Concern for Production Low 2.2 High

11. Situational Approaches to Leadership After reading these sections, you should be able to: • explain Fiedler’s contingency theory. • describe how path-goal theory works. • explain the normative decision theory.

12. Situational Favorableness GroupPerformance LeadershipStyle = Putting Leaders in the Right Situation:Fiedler’s Contingency Theory 3

13. Putting Leaders in the Right Situation:Fiedler’s Contingency Theory Least Preferred Coworker Situational Favorableness Matching Leadership Stylesto Situations 3

14. Leadership Style:Least Preferred Coworker • Leadership style is the way a leader generally behaves toward followers • seen as stable and difficult to change • Style is measured by the Least Preferred Co-worker scale (LPC) • relationship-oriented • task-oriented 3.1

15. Leadership Style:Least Preferred Coworker Scale 3.1

16. Situational Favorableness • The degree to which a particular situation either permits or denies a leader the chance to influence the behavior of group members. Three factors: • Leader-member relations • Task structure • Position power Situational Favorableness 3.2

17. Situational Favorableness 3.2

18. Matching Leadership Styles to Situations 3.3

19. Beyond the Book WellPoint CEO Adopts New Leadership Style • The new WellPoint CEO Angela Braly had to manage the dismissal of finance chief David Colby, who violated company policy. • Braly has taken a different approach to messy executive dismissals such as this by being open and up front about what occurred in order to quell rumors. Source: V. Fuhrmans and C. Hymowitz, “WellPoint’s CEO Takes the Reins, Facing Challenge,” The Wall Street Journal, 6 June 2007, B1.

20. Path-Goal Theory A leadership theory that states that leaders can increase subordinate satisfaction and performance by clarifying and clearing the paths to goals and by increasing the number and kinds of rewards available for goal attainment. Path-Goal Theory 4

21. Clarify paths to goals Clear paths to goals by solving problems and removing roadblocks Increase the number and kinds of rewardsavailable for goal attainment Do things that satisfy followers today or will lead to future rewards or satisfaction Offer followers something unique and valuablebeyond what they’re experiencing Basic Assumptions of Path-Goal Theory 4

22. Path-Goal Theory • Subordinate Contingencies • Perceived Ability • Locus of Control • Experience • Leadership Styles • Directive • Supportive • Participative • Achievement-Oriented • Outcomes • Subordinate satisfaction • Subordinate performance • Environmental Contingencies • Task Structure • Formal Authority System • Primary Work Group 4

23. Leadership Styles Subordinate andEnvironmental Contingencies Outcomes Adapting Leader Behavior:Path-Goal Theory 4

24. Leadership Styles • Directive • clarifying expectations and guidelines • Supportive • being friendly and approachable • Participative • allowing input on decisions • Achievement-Oriented • setting challenging goals 4.1

25. Beyond the Book Sue Nokes’ LeadershipStyle Translates into CustomerSatisfaction • Sue Nokes, in charge of sales and customer service at T-Mobile, is charged with making sure customers are happy with their service. • She does this by making sure customer service reps at T-Mobile call centers are happy at their jobs. Happy, motivated employees will, in turn, serve customers better. • Some of her techniques: showing up at local call centers to support employees, listening to employee complaints and wishes, creating freedom for employees to give honest feedback. Source: J. Reingold, “You Got Served,” Fortune, 1 October 2007, 55-58.

26. Subordinate Environmental • Perceived ability • Locus of control • Experience Subordinate and Environmental Contingencies • Task structure • Formal authority system • Primary work group 4.2

27. Path Goal Theory:When to Use Leadership Styles 4.2

28. Beyond the Book Adapting Leadership Behavior Hersey and Blanchard’s Situational Leadership Theory WorkerReadiness Leadership Styles

29. Beyond the Book Worker Readiness • The ability and willingness to take responsibility for directing one’s behavior at work • Components of worker readiness: • Job readiness • Psychological readiness

30. Beyond the Book R4 confident willing able R3 insecure not willing able R2 confidentwilling not able R1 insecure not able not willing Worker Readiness

31. Beyond the Book high task behavior low relationship behavior Telling(R1) Selling(R2) high task behavior high relationship behavior Participating(R3) low task behaviorhigh relationship behavior Delegating(R4) low task behaviorlow relationship behavior Leadership Styles

32. Normative Decision Theory DecisionStyles Decision Quality and Acceptance 5

33. Leader accepts any decisionsupported by the entire group AI AII CI CII GII Share problem with group, get ideas. Make decision, which may or may not reflect input. Share problem, get ideas from individuals. Select a solution yourself. Leader solves the problemor makes the decision Solve the problem yourself Obtain information. Select a solution yourself. Share problem with group. Together try to reach a solution. Leader acts as facilitator. Decision Styles 5.1

34. Beyond the Book Outside Pressure on GMRestructuring • Fall 2008 saw the Detroit-based auto industry looking to the U.S. government for a bailout to keep companies like General Motors from declaring bankruptcy. • Along with a potential $15 billion package, government officials exerted outside pressure on GM to change its leadership, with some calling for the resignation of CEO Rick Wagoner. • Change in leadership is common during retrenchment, whether pressed from inside or outside. The problem here? Failure of the industry to keep up with consumer preferences and innovate. Source: J. D. Stoll and G. Hitt, “Outside Pressure Grows for GM to Oust Wagoner,”The Wall Street Journal, 8 December 2008. A16.

35. Decision Quality and Acceptance • Using the right amount of employee participation: • improves decision quality • improves acceptance • Decision tree helps leader identify optimal level of participation 5.2

36. Normative Theory Decision Rulesto Increase Decision Quality • Quality Rule • If the quality of the decision is important, then don't use an autocratic decision style. • Leader Information Rule • If the quality of the decision is important, and if the leader doesn't have enough information to make the decision on his or her own, then don't use an autocratic decision style. • Subordinate Information Rule • If the quality of the decision is important, and if the subordinates don't have enough information to make the decision themselves, then don't use a group decision style. 5.2

37. Normative Theory Decision Rulesto Increase Decision Quality • Goal Congruence Rule • If the quality of the decision is important, and subordinates' goals are different from the organization's goals, then don't use a group decision style. • Problem Structure Rule • If the quality of the decision is important, the leader doesn't have enough information to make the decision on his or her own, and the problem is unstructured, then don't use an autocratic decision style. 5.2

38. Normative Theory Decision Rulesto Increase Decision Acceptance • Commitment Probability Rule • If having subordinates accept and commit to the decision is important, then don't use an autocratic decision style • Subordinate Conflict Rule • If having subordinates accept the decision is important and critical to successful implementation, and if subordinates are likely to disagree or end up in conflict over the decision, then don't use an autocratic or consultative decision style • Commitment Requirement Rule • If having subordinates accept the decision is absolutely required for successful implementation, and if subordinates share the organization's goals, then don't use an autocratic or consultative style 5.2

39. Strategic Leadership After reading this section, you should be able to: • explain how visionary leadership (i.e., charismatic and transformational leadership) helps leaders achieve strategic leadership.

40. Visionary Leadership CharismaticLeadership TransformationalLeadership 6

41. Charismatic Leadership • Creates an exceptionally strong relationship between leader and follower • Charismatic leaders: • articulate a clear vision based on values • model values consistent with vision • communicate high performance expectations • display confidence in followers’ abilities 6.1

42. Kinds of Charismatic Leaders • Ethical Charismatics • provide developmental opportunities • are open to positive and negative feedback • recognize others’ contributions • share information • show concern for the interests of the group • Unethical Charismatics • control and manipulate followers • do what is best for themselves • only want positive feedback • motivated by self-interest 6.1

43. Charismatic Leader Behaviors Ethical Charismatics Use power to serve others Exercising Power Ask followers to help develop the vision Creating the vision Communicating with followers Engage in two-way communication Accepting feedback Are open to feedback Stimulating followers Want followers to think and to question the status quo Developing followers Focus on developing followers Living by moral standards Exhibit three virtues: courage, sense of fairness, integrity Ethical and Unethical Charismatic Leaders 6.1

44. Charismatic Leader Behaviors Unethical Charismatics Ethical and Unethical Charismatic Leaders Use power to dominate others Exercising Power Sole provider of vision Creating the vision Communicating with followers Engage in one-way communication, not open to input from others Accepting feedback Prefer yes-men, punish candid feedback Stimulating followers Don’t want followers to think, prefer uncritical acceptance of own ideas Developing followers Insensitive to followers’ needs Living by moral standards Follow standards only if they satisfy immediate self interests 6.1

45. Reducing Risks of Unethical Charismatics • Have a clearly written code of conduct • Recruit, select, and promote managers with high ethical standards • Train leaders how to value, seek, and used diverse points of view • Celebrate and reward those who exhibit ethical behaviors 6.1

46. Transformational Leadership • Generates awareness and acceptance of group’s purpose and mission • Gets followers to accomplish more than they intended or thought possible 6.2

47. Components of Transformational Leadership • Charisma or idealized influence • Inspirational motivation • Intellectual stimulation • Individualized consideration 6.2

48. Beyond the Book The Mindset of a Growth Leader • Growth leaders are people within a company who generate organic growth and create value for customers, sometimes in spite of formal company leadership. • Growth leaders tend to view life as a journey. They not only embrace change but seek opportunities for it. • They tend to see customers as people, manage risk by taking action, and place small bets quickly. Source: S. D. Carr, J. M. Liedtka, R. Rosen, and R. E. Wiltbank, “In Search of Growth Leaders,”The Wall Street Journal, 7 July 2008, R4.