LEADERSHIP

8
INTENDED LEARNING OUTCOMES
By the end of the learning experience, students must be able to:
1. Understand the meaning of leadership;
2. Discuss leadership and management;
3. Explain leadership and power;
4. Describe generic approaches to leadership;
5. Explain situational approaches to leadership; and
6. Explain related l approaches to leadership.

THE MEANING OF LEADERSHIP

Leadership is both a process and a property. As a process—focusing on what leaders
actually do—leadership is the use of non-coercive 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, leadership is the set of characteristics attributed to individuals
who are perceived to be leaders. Thus, leaders are:
(1) people who can influence the behaviors of others without having to rely on force, or
(2) people whom others accept as leaders.

LEADERSHIP AND MANAGEMENT

From these definitions, it should be clear that leadership and management are related, but
they are not the same. A person can be a manager, a leader, both, or neither.
Organizations need both management and leadership if they are to be effective. Leadership
is necessary to create change, and management is necessary to achieve orderly results.
Management in conjunction with leadership can produce orderly change, and leadership in
conjunction with management can keep the organization properly aligned with its environment.
Indeed, perhaps part of the reason executive compensation has soared in recent years is the belief
that management and leadership skills reflect a critical but rare combination that can lead to
organizational success.

LEADERSHIP AND POWER

To fully understand leadership, it is necessary to understand power—the ability to affect the
behavior of others. One can have power without actually using it. Managers and leaders often have
to actually use power but should do so only in ways that are ethical and appropriate. In
organizational settings, there are usually five kinds of power: legitimate, reward, coercive, referent,
and expert power. Management and leadership are related, but distinct, constructs. Managers and
leaders differ in how they create an agenda, develop a rationale for achieving the agenda, and
execute plans, and in the types of outcomes they achieve.
1. Legitimate Power - Legitimate power is power granted through the organizational
hierarchy; it is the power defined by the organization to be accorded to people occupying a
particular position. A manager can assign tasks to a subordinate, and a subordinate who
refuses to do them can be reprimanded or even fired. Such outcomes stem from the
manager’s legitimate power as defined and vested in him or her by the organization.
Legitimate power, then, is authority. All managers have legitimate power over their
subordinates. The mere possession of legitimate power, however, does not by itself make
someone a leader. Some subordinates follow only orders that are strictly within the letter of
organizational rules and policies. If asked to do something not in their job descriptions, they
refuse or do a poor job. The manager of such employees is exercising authority but not
leadership.
2. Reward Power - Reward power is the power to give or withhold rewards. Rewards that a
manager may control include salary increases, bonuses, promotion recommendations,
praise, recognition, and interesting job assignments. In general, the greater the number of
rewards a manager controls and the more important the rewards are to subordinates, the

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 greater is the manager’s reward power. If the subordinate sees as valuable only the formal
organizational rewards provided by the manager, then the manager is not a leader. If the
subordinate also wants and appreciates the manager’s informal rewards, such as praise,
gratitude, and recognition, then the manager is also exercising leadership.
3. Coercive Power - Coercive power is the power to force compliance by means of
psychological, emotional, or physical threat. In the past, physical coercion in organizations
was relatively common. In most organizations today, however, coercion is limited to verbal
reprimands, written reprimands, disciplinary layoffs, fines, demotion, and termination.
Some managers occasionally go so far as to use verbal abuse, humiliation, and psychological
coercion in an attempt to manipulate subordinates. (Of course, most people would agree
that these are not appropriate managerial behaviors.) The more punitive the elements
under a manager’s control and the more important they are to subordinates, the more
coercive power the manager possesses. On the other hand, the more a manager uses
coercive power, the more likely he is to provoke resentment and hostility and the less likely
he is to be seen as a leader.
4. Referent Power - Compared with legitimate, reward, and coercive power, which are
relatively concrete and grounded in objective facets of organizational life, referent power is
abstract. It is based on identification, imitation, loyalty, or charisma. Followers may react
favorably because they identify in some way with a leader, who may be like them in
personality, background, or attitudes. In other situations, followers might choose to imitate
a leader with referent power by wearing the same kind of clothes, working the same hours,
or espousing the same management philosophy. Referent power may also take the form of
charisma, an intangible attribute of the leader that inspires loyalty and enthusiasm. Thus, a
manager might have referent power, but it is more likely to be associated with leadership.
5. Expert Power - Expert power is derived from information or expertise. A manager who
knows how to interact with an eccentric but important customer, a scientist who is capable
of achieving an important technical breakthrough that no other company has dreamed of,
and a secretary who knows how to unravel bureaucratic red tape all have expert power over
anyone who needs that information. The more important the information and the fewer the
people who have access to it, the greater is the degree of expert power possessed by any
one individual. In general, people who are both leaders and managers tend to have a lot of
expert power.

GENERIC APPROACHES TO LEADERSHIP

Early approaches to the study of leadership adopted what might be called a universal or
generic perspective. Specifically, they assumed that there was one set of answers to the leadership
puzzle. One generic approach focused on leadership traits, and the other looked at leadership
behavior.
1. Leadership Traits. The first organized approach to studying leadership analyzed the
personal, psychological, and physical traits of strong leaders. The trait approach assumed
that some basic trait or set of traits existed that differentiated leaders from non-leaders. If
those traits could be defined, potential leaders could be identified. Researchers thought that
leadership traits might include intelligence, assertiveness, above-average height, good
vocabulary, attractiveness, self-confidence, and similar attributes
2. Leadership Behaviors. Spurred on by their lack of success in identifying useful leadership
traits, researchers soon began to investigate other variables, especially the behaviors or
actions of leaders. The new hypothesis was that effective leaders somehow behaved
differently from less effective leaders. Thus, the goal was to develop a fuller understanding
of leadership behaviors.
3. Managerial Grid - Another behavioral approach to leadership is the Managerial Grid. The
Managerial Grid provides a means for evaluating leadership styles and then training
managers to move toward an ideal style of behavior. The horizontal axis represents concern
for production (similar to job-centered and initiating-structure behaviors), and the vertical
axis represents concern for people (similar to employee-centered and consideration
behaviors).

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SITUATIONAL APPROACHES TO LEADERSHIP
Situational models assume that appropriate leader behavior varies from one situation to
another. For instance, the “Tough Times, Tough Choices” feature illustrates how economic factors
might influence leader behavior. The goal of a situational theory, then, is to identify key situational
factors and to specify how they interact to determine appropriate leader behavior. In the following
sections, we describe four of the most important and widely accepted situational theories of
leadership: the least-preferred coworker (LPC) theory, the path-goal theory, Vroom’s decision tree
approach, and the leader–member exchange (LMX) approach.
1. LPC Theory. The LPC theory, developed by Fred Fiedler, was the first truly situational
theory of leadership. Beginning with a combined trait and behavioral approach, Fiedler
identified two styles of leadership: task oriented (analogous to job-centered and initiating
structure behaviors) and relationship oriented (similar to employee-centered and
consideration behaviors). He went beyond the earlier behavioral approaches by arguing that
the style of behavior is a reflection of the leader’s personality and that most personalities fall
into one of his two categories—task oriented or relationship oriented by nature. Fiedler
measures leadership style by means of a controversial questionnaire called the LPC
measure. To use the measure, a manager or leader is asked to describe the specific person
with whom he or she is able to work least well—the LPC—by filling in a set of 16 scales
anchored at each end by a positive or negative adjective. For example, 3 of the 16 scales are
as follows:

Figure 8.1. The LPC Scales

The leader’s LPC score is then calculated by adding up the numbers below the line checked
on each scale. Note in these three examples that the higher numbers are associated with
positive qualities (helpful, relaxed, and interesting), whereas the negative qualities
(frustrating, tense, and boring) have low point values. A high total score is assumed to
reflect a relationship orientation on the part of the leader, and a low score a task orientation
on his or her part. The LPC measure is controversial because researchers disagree about its
validity. Some question exactly what an LPC measure reflects and whether the score is an
index of behavior, personality, or some other factor.
2. Path-Goal Theory. The path-goal theory of leadership—associated most closely with Martin
Evans and Robert House—is a direct extension of the expectancy theory of motivation
discussed in Chapter 10. Recall that the primary components of expectancy theory included
the likelihood of attaining various outcomes and the value associated with those outcomes.
The path-goal theory of leadership suggests 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 goal accomplishment and valued rewards—that is, the
leader should clarify the paths to goal attainment.

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 Figure 8.2. The Path-Goal Framework

3. Vroom’s Decision Tree Approach. The third major contemporary approach to leadership is
Vroom’s decision tree approach. The earliest version of this model was proposed by Victor
Vroom and Philip Yetton and later revised and expanded by Vroom and Arthur Jago. Most
recently, Vroom has developed yet another refinement of the original model. Like the path-
goal theory, this approach attempts to prescribe a leadership style appropriate to a given
situation. It also assumes that the same leader may display different leadership styles. But
Vroom’s approach concerns itself with only a single aspect of leader behavior: subordinate
participation in decision making. Vroom’s current formulation suggests that managers use
one of two different decision trees. To do so, the manager first assesses the situation in
terms of several factors. This assessment involves determining whether the given factor is
high or low for the decision that is to be made. For instance, the first factor is decision
significance. If the decision is extremely important and may have a major impact on the
organization (such as choosing a location for a new plant), its significance is high. But, if the
decision is routine and its consequences are not terribly important (selecting a color for the
firm’s softball team uniforms), its significance is low. This assessment guides the manager
through the paths of the decision tree to a recommended course of action. One decision
tree is to be used when the manager is interested primarily in making the decision as quickly
as possible; the other is to be used when time is less critical and the manager is interested in
helping subordinates to improve and develop their own decision-making skills.

Figure 8.3. Vroom’s Time-Drives Decision Tree

Decision-Making Styles - The various decision-making styles reflected at the ends

of the tree branches represent different levels of subordinate participation that the manager
should attempt to adopt in a given situation. The five styles are defined as follows:
• Decide. The manager makes the decision alone and then announces or “sells” it to
the group.
• Consult (individually). The manager presents the program to group members
individually, obtains their suggestions, and then makes the decision.
• Consult (group). The manager presents the problem to group members at a
meeting, gets their suggestions, and then makes the decision.
• Facilitate. The manager presents the problem to the group at a meeting, defines
the problem and its boundaries, and then facilitates group member discussion as
they make the decision.
• Delegate. The manager allows the group to define for itself the exact nature and
parameters of the problem and then to develop a solution.

4. The LMX Approach. Because leadership is such an important area, managers and
researchers continue to study it. As a result, new ideas, theories, and perspectives are
continuously being developed. The LMX model of leadership, conceived by George Graen
and Fred Dansereau, stresses the importance of variable relationships between supervisors
and each of their subordinates. Each superior–subordinate pair is referred to as a vertical

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 dyad. The model differs from earlier approaches in that it focuses on the differential
relationship that leaders often establish with different subordinates.

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Figure 8.4. The Leader-Member Exchange Model

The model suggests that supervisors establish a special relationship with a small
number of trusted subordinates, referred to as the in-group. The in-group usually receives
special duties requiring responsibility and autonomy; they may also receive special
privileges. Subordinates who are not a part of this group are called the out-group, and they
receive less of the supervisor’s time and attention.

RELATED APPROACHES TO LEADERSHIP

Because of its importance to organizational effectiveness, leadership continues to be the
focus of a great deal of research and theory building. New approaches that have attracted much
attention are the concepts of substitutes for leadership and transformational leadership.
1. Substitutes for Leadership. The concept of substitutes for leadership was developed
because existing leadership models and theories do not account for situations in which
leadership is not needed. They simply try to specify what kind of leader behavior is
appropriate. The substitutes concept, however, identifies situations in which leader
behaviors are neutralized or replaced by characteristics of the subordinate, the task, and the
organization. For example, when a patient is delivered to a hospital emergency room, the
professionals on duty do not wait to be told what to do by a leader. Nurses, doctors, and
attendants all go into action without waiting for directive or supportive leader behavior from
the emergency room supervisor.
2. Charismatic Leadership. The concept of charismatic leadership, like trait theories, assumes
that charisma is an individual characteristic of the leader. Charisma is a form of interpersonal
attraction that inspires support and acceptance. All else being equal, then, someone with
charisma is more likely to be able to influence others than someone without charisma. For
example, a highly charismatic supervisor will be more successful in influencing subordinate
behavior than a supervisor who lacks charisma. Thus, influence is again a fundamental
element of this perspective.
3. Transformational Leadership. Another new perspective on leadership has been called by a
number of labels: charismatic leadership, inspirational leadership, symbolic leadership, and
transformational leadership. We use the term transformational leadership and define it as
leadership that goes beyond ordinary expectations by transmitting a sense of mission,
stimulating learning experiences, and inspiring new ways of thinking.36 Because of rapid
change and turbulent environments, transformational leaders are increasingly being seen as
vital to the success of business.

EMERGING APPROACHES TO LEADERSHIP

Recently, three potentially very important new approaches to leadership have emerged.
One is called strategic leadership; the others deal with cross-cultural leadership and ethical
leadership. Strategic Leadership Strategic leadership is a new concept that explicitly relates
leadership to the role of top management. We define strategic leadership as 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

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environment. This definition reflects an integration of the leadership concepts covered in this
chapter with our discussion of strategic management in Chapter 3. Its board of directors, of course,
is a key element in any firm’s strategic leadership.
To be effective in this role, a manager needs to have a thorough and complete
understanding of the organization—its history, its culture, its strengths, and its weaknesses. In
addition, the leader needs a firm grasp of the organization’s environment. This understanding must
encompass current conditions and circumstances as well as significant trends and issues on the
horizon. The strategic leader also needs to recognize how the firm is currently aligned with its
environment—where it relates effectively and where it relates less effectively with that
environment. Finally, looking at environmental trends and issues, the strategic leader works to
improve both the current alignment and the future alignment.
1. Cross-Cultural Leadership. Another new approach to leadership is based on cross-cultural
issues. In this context, culture is used as a broad concept to encompass both international
differences and diversity-based differences within one culture. For instance, when a
Japanese firm sends an executive to head the firm’s operations in the United States, that
person will need to become acclimated to the cultural differences that exist between the
two countries and to change his or her leadership style accordingly. Japan is generally
characterized by collectivism (the view that the group is more important than any individual
within the group), whereas the United States is based more on individualism (the belief that
individuals are more important than the group). The Japanese executive, then, will find it
necessary to recognize the importance of individual contributions and rewards, as well as
the differences in individual and group roles, that exist in Japanese and U.S. businesses.
2. 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. More specifically, top managers are being called on to
maintain high ethical standards for their own conduct, to exhibit ethical behavior unfailingly,
and to hold others in their organization to the same standards.

REFERENCES

[1] Bright, D., Cortes, A., Hartmann, E., Parboteeah, P., Pierce, J., & Reece, M. et al. (2019). Principles
of management. OpenStax. Houston Texas. Retrieved from
https://openstax.org/details/books/principles-management

[2] Griffin, R.W.(2016). Fundamentals of Management.8th Edition.Cengage Learning. Retrieved from

https://www.statisticiansforhire.com/wp-content/uploads/2019/04/Fundamentals-of-Management-
8th-Edition-Ricky-Griffin-978-1285849041.pdf

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