Chapter 11

Leadership and Influence Process

The Nature of Leadership

The Meaning of Leadership
 Leadership
As a process, the use of noncoercive influence to shape the group’s or organization’s goals,
motivate behavior toward the achievement of those goals, and help define group or
organizational culture; as a property, the set of characteristics attributed to individuals who are
perceived to be leaders
 Leaders
People who can influence the behaviors of others without having to rely on force; those
accepted by others as leaders
Distinctions Between Management and Leadership

 Leadership and Power

Power
The ability to affect the behavior of others
In organizational settings, there are usually five kinds of power:
 Legitimate power
Power granted through the organizational hierarchy; the power defined by the organization to be
accorded to people occupying a particular position
 Reward power
The power to give or withhold rewards, such as salary increases, bonuses, promotions, praise,
recognition, and interesting job assignments
 Coercive power
The power to force compliance by means of psychological, emotional, or physical threat
  Referent power
The personal power that accrues to someone based on identification, imitation, loyalty, or
charisma
 Expert power
The personal power that accrues to someone based on the information or expertise that they
possess

 Generic Approaches to Leadership

Traits Approach to Leadership
 Assumed that a basic set of personal traits that differentiated leaders from non-leaders
could be used to identify leaders and predict who would become leaders.
 The trait approach was unsuccessful in establishing empirical relationships between
traits and persons regarded as leaders

 Leadership Behaviors
Michigan Studies (Rensis Likert)
- Identified two forms of leader behaviour
Job-centered behaviour
- managers who pay close attention to subordinates’ work, explain work procedures, and
are keenly interested in performance.
Employee-centered behaviour
- managers who focus on the development of cohesive work groups and employee
satisfaction.
- The two forms of leader behaviors were considered to be at opposite ends of the same
continuum.
Ohio State Studies
Did not interpret leader behavior as being one-dimensional as did the Michigan State studies.
Identified two basic leadership styles that can be exhibited simultaneously:
Initiating-structure behavior
The behavior of leaders who define the leader– subordinate role so that everyone knows what is
expected, establish formal lines of communication, and determine how tasks will be performed
Consideration behavior
The behavior of leaders who show concern for subordinates and attempt to establish a warm,
friendly, and supportive climate
Initial assumption was that the most effective leaders who exhibit high levels of both
behaviors. Subsequent research indicated that:
 Employees of supervisors ranked high on initiating structure were high performers, yet
they expressed low levels of satisfaction and higher absenteeism.
  Employees of supervisors ranked high on consideration had low- performance ratings,
yet they had high levels of satisfaction and less absenteeism.
 Other situational variables make consistent leader behavior predictions difficult. There is
no universal or “one best way” model of leadership.
The Managerial Grid
provides a means for evaluating leadership styles and then training managers to move toward
an ideal style of behavior.
Concern for production
The part of the Managerial Grid that deals with the job and task aspects of leader behaviour
Concern for people
The part of the Managerial Grid that deals with the human aspects of leader behavior

 Situational Approaches to Leadership

Situational Models of Leader Behavior
Assume that:
 Appropriate leader behavior varies from one situation to another.
 Key situational factors that are interacting to determine appropriate leader behavior can
be identified.
Least-Preferred Co-worker (LPC) theory
A theory of leadership that suggests that the appropriate style of leadership varies with
situational favorableness.
 LPC theory, developed by Fred Fiedler, was the first truly situational theory of
leadership.
 LPC measure The measuring scale that asks leaders to describe the person with whom
he or she is able to work least well (the least-preferred coworker, or LPC)

Contingency variables determining situational favorableness:

Leader-member relations
the nature of the relationship between the leader and the work group.
Task structure
the degree to which the group’s task is defined.
Position Power
the power vested in the leader’s position.
Path-Goal Theory
Associated most closely with Martin Evans and Robert House—is a direct extension of the
expectancy theory of motivation
Theory of leadership
suggesting that the primary functions of a leader are to make valued or desired rewards
available in the workplace and to clarify for the subordinate the kinds of behavior that will lead to
those rewards
Path-Goal Framework
Leader Behaviors:
 Directive leader behaviour
letting subordinates know what is expected of them, giving guidance and direction, and
scheduling work.
 Supportive leader behaviour
being friendly and approachable, having concern for subordinate welfare, and treating
subordinates as equals.
 Participative leader behaviour
consulting with subordinates, soliciting suggestions, and allowing participation in decision
making.
 Achievement
oriented leader behaviour setting challenging goals, expecting subordinates to perform at high
levels, encouraging and showing confidence in subordinates.
Vroom’s Decision Tree Approach
Predicts what kinds of situations call for different degrees of group participation
Basic Premises
 The degree to which subordinates should be encouraged to participate in decision
making depends on the characteristics of the situation.
 No one decision-making process is best for all situations.
After evaluating the different problem attributes, a leader can choose a decision path on one of
two decision trees that determines the decision style and specifies the amount of employee
participation.
Decision significance
The degree to which the decision will have an impact on the organization. Subordinates are
involved when decision significance is high.
Decision Timeliness
The degree of time pressure for making a decision in a timely basis; may preclude involving
subordinates.
Decision-Making Styles
Decide —manager makes decision alone and then announces or “sells” it to the group.
Consult (individually) —manager presents program to group members individually, obtains
their suggestions, then makes the decision.
Consult (group) —manager presents problem to group at a meeting, gets their suggestions,
then makes the decision.
Facilitate —manager presents the problem to the group, defines the problem and its
boundaries, and then facilitates group member discussion as they make the decision.
Delegate —manager allows the group to define for itself the exact nature and parameters of the
problem and then develop a solution.
The Leader-Member Exchange (LMX) Approach
conceived by George Graen and Fred Dansereau, stresses the importance of variable
relationships between supervisors and each of their subordinates.
Stresses that leaders have different kinds of relationships with different subordinates

Related Approaches to Leadership

Substitutes for Leadership
A concept that identifies situations in which leader behaviors are neutralized or replaced by
characteristics of the subordinate, the task, and the organization

Charismatic Leadership
Assumes that charisma is an individual characteristic of the leader
Charisma
A form of interpersonal attraction that inspires support and acceptance
Transformational Leadership
Leadership that goes beyond ordinary expectations by transmitting a sense of mission,
stimulating learning experiences, and inspiring new ways of thinking
Strategic Leadership
The capability to understand the complexities of both the organization and its environment and
to lead change in the organization to achieve and maintain a superior alignment between the
organization and its environment
Ethical Leadership
Most people have long assumed that top managers are ethical people. But in the wake of recent
corporate scandals, faith in top managers has been shaken. Perhaps now more than ever, high
standards of ethical conduct are being held up as a prerequisite for effective leadership.
Political Behavior
The activities carried out for the specific purpose of acquiring, developing, and using power and
other resources to obtain one’s preferred outcomes
Common Political Behaviors
Inducement
offering to give something to someone else in return for that person’s support.
Persuasion
persuading others to support a goal on grounds that are objective and logical as well as
subjective and personal.
Creation of an obligation
providing support for another person’s position that obliges that person to return the favor at a
future date.
Coercion
using force to get one’s way.
Impression management
making a direct and intentional effort to enhance one’s image in the eyes of others
Managing Political Behavior
Be aware that even if actions are not politically motivated, others may assume that they
are.
Reduce the likelihood of subordinates engaging in political behavior by providing them with
autonomy, responsibility, challenge, and feedback.
Avoid using power to avoid charges of political motivation.
Get disagreements and conflicts out in the open so that subordinates have less
opportunity to engage in political behavior.
Avoid covert behaviors that give the impression of political intent even if none exists
 Chapter 12
Communication in Organizations
The Communication Process
Steps in the Communication Process
 Deciding to transmit a fact, idea, opinion, or other information to the receiver.
 Encoding the meaning into a form appropriate to the situation.
 Transmitting through the appropriate
channel or medium.
 Decoding the message back into
a form that has meaning to the
receiver.
 “Noise” is anything disrupting the
communication process.

Forms of Communication in Organization

Interpersonal Communication
Oral communication
Face-to-face conversation, group discussions, telephone calls, and other circumstances in
which the spoken word is used to transmit meaning
Written communication
Memos, letters, reports, notes, and other circumstances in which the written word is used to
transmit meaning
Communication in Networks and Work Teams
Communication network
The pattern through which the members of a group communicate
Types of Communication Networks

Organizational Communication
Vertical communication
Communication that flows up and down the organization, usually along formal reporting lines;
takes place between managers and their superiors and subordinates and may involve several
different levels of the organization
 Upward communication consists of messages from subordinates to superiors
 Downward communication occurs when information flows down the hierarchy from
superiors to subordinates.
 Organizational Communication (cont’d)
 horizontal communication
 Communication that flows laterally within the organization; involves colleagues and
peers at the same level of the organization and may involve individuals from several
different organizational units
 Formal Communication in Organization

Digital Communication
Information technology (IT) The resources used by an organization to manage information
that it needs to carry out its mission
Information Systems Advances in IT have made it increasingly easy for managers to use
many different kinds of information systems
 Transaction-processing systems (TPSs) An application of information processing for
basic day-to-day business transactions
Management information systems (MISs) An information system that supports an
organization’s managers by providing daily reports, schedules, plans, and budgets
Decision support systems (DSSs) An interactive system that locates and presents
information needed to support the decision-making process
Personal Digital Technology
Telecommuting
is the label given to a new digital cottage industry. In telecommuting, people work at home on
their computers and communicate with colleagues and co-workers using electronic media
Digital Communication (cont’d)
Executive support system (ESS)
A quick-reference, easy-access application of information systems specially designed for instant
access by upper-level managers
Artificial intelligence (AI)
The construction of computer systems, both hardware and software, to imitate human behavior
— that is, to perform physical tasks, use thought processes, and learn
Intranets
A communication network similar to the Internet but operating within the boundaries of a single
organization
Extranets
A communication network that allows selected outsiders limited access to an organization’s
internal information system, or intranet
Informal Communication in Organizations
The Grapevine
An informal communication network among people in an organization
Common Grapevine Chains Found in Organizations

Informal Communication in Organizations

may or may not follow official reporting relationships or prescribed channels. It may cross
different levels and different departments or work units, and it may or may not have anything to
do with official organizational business.

Management by Wandering Around

An approach to communication that involves the manager literally wandering around and having
spontaneous conversations with others
Nonverbal Communication
Any communication exchange that does not use words or uses words to carry more meaning
than the strict definition of the words themselves
 Images—the kinds of words people elect to use to give emphasis and
effect to what they say.
 Settings—boundaries, familiarity, home turf (e.g., office location, size,
and furnishings) are symbols of power and influence how people choose
to communicate in organizations.
Managing Organizational Communication
 Barriers to Communication

Barriers to Communication (Cont’d)

Individual Barriers
Several individual barriers may disrupt effective communication. One common problem is
conflicting or inconsistent signals
Organizational Barriers
  Other barriers to effective communication involve the organizational context in which the
communication occurs.
 Semantics problems arise when words have different meanings for different people.
 Words and phrases such as profit, increased output, and return on investment may have
positive meanings for managers but less positive meanings for labor.
Improving Communication Effectiveness

More and Less Effective Listening Skills

Overcoming Barriers to Communication

 Chapter 14
Basic Elements of Control
The Nature of Control
The Purpose of Control
Control provides an organization with ways to adapt to environmental change, to limit the
accumulation of error, to cope with organizational complexity, and to minimize costs.
These four functions of control are worth a closer look.
 Adapting to Environmental Change
 Limiting the Accumulation of Error
 Coping with Organizational Complexity
 Minimizing Cost.

Areas of Control
Control provides an organization with ways to adapt to environmental change, to limit the
accumulation of error, to cope with organizational complexity, and to minimize costs.
 Control of Physical Resources includes inventory management (stocking neither too
few nor too many units in inventory),
 Quality control (maintaining appropriate levels of output quality), and
 Equipment control (supplying the necessary facilities and machinery).
 Control of human resources includes selection and placement, training and
development, performance appraisal, and compensation.
  Control of information resources includes sales and marketing forecasting,
environmental analysis, public relations, production scheduling, and economic
forecasting
 Control of financial resources is the most important area, because financial resources
are related to the control of all the other resources in an organization
 Levels of Control
 Operations Control
 Focuses on the processes that the organization uses to transform resources into
products or services
 Financial Control
 Concerned with the organization’s financial resources
 Structural Control
 Concerned with how the elements of the organization’s structure are serving their
intended purpose
 Strategic Control
 Focuses on how effectively the organization’s strategies are succeeding in helping the
organization meet its goals

Responsibilities for Control

Controller
A position in organizations that helps line managers with their control activities
Steps in the Control Process
Steps in the Control Process
Establish Standards
Control standard - A target against which subsequent performance will be compared.
 Control standards should be expressed in measurable terms.
 Control standards should be consistent with organizational goals.
 Control standards should be identifiable indicators of performance.
Measure Performance
 Performance measurement is an ongoing process.
 Performance measures must be valid indicators (e.g., sales, costs, units produced) of
performance.
Steps in the Control Process (cont’d)
Compare Performance Against Standards
 Define what is a permissible deviation from the performance standard.
 Utilize the appropriate timetable for measurement.
Determine the Need for Corrective Action
 Maintain the status quo (do nothing).
 Correct the deviation to bring operations into compliance with the standard.
 Change the standard if it was set too high or too low
Operations Control
Operations Control
Focuses on the processes the organization use to transform resources into products or services
Forms of Operations Control
Financial Control
Financial control
Concerned with the organization’s financial resources
Budget
A plan expressed in numerical terms

Developing Budgets in Organizations

Strengths and Weaknesses of Budgeting
Strengths:
 Budgets facilitate effective operational controls.
 Budgets facilitate and communication between departments.
 Budgets established records of organizational performance, which can enhance
planning.
Weaknesses:
 Budgets can hamper operations if applied too rigidly
 Budgets can be time consuming to develop
 Budgets can limit innovation and change
 Other tools for Financial Control
 Financial Statement
 A profile of some aspect of an organization’s financial circumstances
 Balance Sheet
 List of assets and liabilities of an organization at a specific point in time
 Income Statement
 A summary of financial performance over a period of time, usually one year
 Ratio Analysis
 The calculation of one or more financial ratios to assess some aspect of the
organization’s financial health
  Audits
 An independent appraisal of an organization’s accounting, financial, and operational
systems
Structural Control
Organizational Control

Bureaucratic Control
A form of organizational control characterized by formal and mechanistic structural
arrangements
Decentralized Control
An approach to organizational control based on informal and organic structural arrangements
Strategic Control
Strategic Control
Control aimed at ensuring that the organization is maintaining an effective alignment with its
environment and moving toward achieving its strategic goals
Control aimed at ensuring that the organization is maintaining an effective alignment with its
environment and moving toward achieving its strategic plan.
 Focuses on structure, leadership, technology, human resources, and informational and
operational systems.
 Focuses on the extent to which an implemented strategy achieves the organization’s
goals
International Strategic Control
  Focuses on whether to manage the global organization from a centralized or
decentralized perspective.
 Centralization creates more control and coordination, whereas decentralization fosters
adaptability and innovation
Managing Control in Organizations
Characteristics of Effective Control
Integration with Planning
 the more control is linked to planning, the more effective the control system.
Flexibility
 the control system must be flexible enough to accommodate change.
Accuracy
 Inaccurate information results in bad decision making and inappropriate managerial
actions
Timeliness
 A control system should provide information as often as necessary.
Objectivity
 A control system must be free from bias and distortion
Resistance to Control
Over-control
 Trying to control too many details becomes problematic when control affects employee
behavior and employees perceive control attempts as unreasonable.
Inappropriate Focus
 The control system may be too narrow or it may focus too much on quantifiable variables
and leave no room for analysis or interpretation.
Rewards for Inefficiency
 Rewarding operational inefficiency can lead employees to behave in ways that are not in
the best interests of the organization.
Too much accountability
 Efficient controls are resisted by poorly performing employees
Resistance to control can be overcome by:
 Designing effective controls that are properly integrated with organizational planning and
aligned with organizational goals and standards.
 Creating controls that are flexible, accurate, timely, and objective.
 Avoiding over-control in the implementation of controls.
 Guarding against creating controls that reward inefficiencies.
 Encouraging employee participation in the planning and implementing of control
systems.
 Developing a system of checks and balances in the control systems through the use of
multiple standards and information systems that allow the organization to verify the
accuracy of performance indicators