Chapter 11

1. Chapter 11 Basic Approaches to Leadership

2. Michael Chaney - Wesfarmers ‘Consistent strategy – in terms of how it is developed, executed and communicated – and consistent performance are hallmarks of an effective chief executive. Wesfarmers has been one of Australia’s most consistent companies in recent years’.

3. Wal King – Leighton Holdings ‘Respondents to the Most Admired survey nominated King for his “excellent blend of vision and management skills” and Leighton’s “courageous growth”, a reference to long-term growth achieved despite the criticism of analysts. Others mentioned King’s longevity, Leighton’s record on shareholder returns, and its reshaping of the competitive landscape’.

4. What Is Leadership? Leadership The ability to influence a group toward the achievement of goals. Management Use of authority inherent in designated formal rank to obtain compliance from organizational members.

5. Leaders v. Managers • ‘There are so many ways to define leadership and management that the question becomes meaningless. There is certainly an overlap between the two…Do we need to know anyhow? In your working life you are not required to suddenly switch; you are both at the same time’(AGSM, 2001) • ‘leadership is also different from management, since “many managers could not lead a squad of seven year olds to an ice cream counter”’ (Bolman & Deal, 2001)

6. Perspectives on Leadership Trait Perspective Leadership Perspectives Behaviour Perspective Romance Perspective Contingency Perspective Transformational Perspective

7. Trait Theories Traits Theories of Leadership Theories that consider personality, social, physical, or intellectual traits to differentiate leaders from nonleaders. • Leadership Traits: • Ambition and energy • The desire to lead • Honest and integrity • Self-confidence • Intelligence • High self-monitoring • Job-relevant knowledge

8. Trait Approach • Era of popularity – up to 1940s, with comeback in 1990s- • Assumptions: leaders have physical traits, individual behaviours and personality characteristics which distinguish them from non-leaders; competencies indicate leadership potential • Criticisms: inconsistent evidence concerning importance of cited traits • Seven competencies characterise effective leaders (Kirkpatrick & Locke, 1991; Gregerson et al, 1998; House & Aditya, 1997) – drive, leadership motivation, integrity, self-confidence, intelligence, knowledge of the business, emotional intelligence

9. Four Leadership Styles Derived from the Ohio State Studies Low structure, high consideration Less emphasis is placed onstructuring employee tasks while theleader concentrates on satisfyingemployee needs and wants. High structure, high consideration The leader provides a lot of guidanceabout how tasks can be completedwhile being highly considerate ofemployee needs and wants. High Consideration Low structure, low consideration The leader fails to provide necessarystructure and demonstrates littleconsideration for employee needs and wants. High structure, low consideration Primary emphasis is placed onstructuring employee tasks whilethe leader demonstrates littleconsideration for employee needsand wants. Low Low High Initiating Structure

10. Significant Australian Leadership Traits (Hunt, 2000) • Leaders differentiate themselves from their colleagues by possessing: • a strong need to achieve results • an ability to see the big picture • the ability to exercise initiative • an ability to persuade and influence others • having high internal work standards • maintaining sound overall business sense

11. Behavioral Theories Behavioral Theories of Leadership Theories proposing that specific behaviors differentiate leaders from nonleaders. • Trait theory:Leaders are born, not made. • Behavioral theory:Leadership traits can be taught.

12. Behavioural Perspectives of Leadership • Era of popularity – 1940s-1960s • Assumptions: emphasis on training rather than selecting leaders – developing the ‘one best style’; 2 key behavioural styles as shown in Blake & Mouton’s Managerial Grid: • People-oriented behaviours - showing mutual trust and respect; concern for employee needs; desire to look out for employee welfare • Task-oriented behaviours - assign specific tasks; ensure employees follow rules; push employees to reach peak performance • Argued that effective managers were “strong” on both styles • Criticisms: lack of attention to impact of situation; overly focused on formal leaders, not informal or political processes; inconsistent results

13. Blake-Mouton Managerial Grid

14. Scandinavian Studies Development-Oriented Leader One who values experimentation, seeking new ideas, and generating and implementing change. Researchers in Finland and Sweden question whether there are only two dimensions (production-orientation and employee-orientation) that capture the essence of leadership behavior. Their premise is that in a changing world, effective leaders would exhibit development-orientedbehavior.

15. Contingency Perspectives of Leadership • Era of popularity – late 1960s – early 1980s • Examples: Hersey & Blanchard’s Situational Leadership Model – telling, selling, participating, delegating; path-goal theory • Assumptions: situation affects leader effectiveness; leaders should analyse situations and choose a style which matches the situation • Criticisms: disputes about validity of measuring ‘situation’; research evidence is mixed

16. Fiedler’s Contingency Model SituationalControl High ControlSituations Moderate Control Situations Low ControlSituations Leader-memberrelations Task Structure Position Power Good Good Good High High High Strong Weak Strong Good Poor Poor Low High High Weak Strong Strong Poor Poor Low Low Strong Weak Situation I II III IV V VI VII VIII Optimal LeadershipStyle Task Motivated Leadership Relationship Motivated Leadership Task Motivated Leadership

17. Hersey and Blanchard’s Situational Leadership Theory Situational Leadership Theory (SLT) A contingency theory that focuses on followers’ readiness. Unable andUnwilling Unable butWilling Able andUnwilling Able andWilling Follower readiness: ability and willingness Leader: decreasing need for support and supervision Supportive Participative Directive High Task and Relationship Orientations Monitoring

18. Leadership Styles and Follower Readiness(Hersey and Blanchard) Follower Readiness Willing Unwilling Supportive Participative Able Monitoring LeadershipStyles High Taskand Relationship Orientations Unable Directive

20. Leader–Member Exchange Theory Leader-Member Exchange (LMX) Theory Leaders create in-groups and out-groups, and subordinates with in-group status will have higher performance ratings, less turnover, and greater job satisfaction.

21. Path-Goal Theory The theory that it is the leader’s job to assist followers in attaining their goals and to provide them the necessary direction and/or support to ensure that their goals are compatible with the overall objectives of the group or organization.

22. Employee Contingencies Directive Supportive Participative Achievement Directive Supportive Participative Achievement Environmental Contingencies Path-Goal Theory in Action Skill/Experiencelow low high high Locus of Controlexternal external internal internal Task Structure nonroutine routine nonroutine ? Team Dynamics–norms low cohesion + norms ?

23. Leader-Participation Model Leader-Participation Model (Vroom and Yetton) A leadership theory that provides a set of rules to determine the form and amount of participative decision making in different situations.