Chapter-6 Leading

Meaning of leadership

What is Leadership
Leadership is a process by which an executive can direct, guide and influence the behavior and
work of others towards accomplishment of specific goals in a given situation. Leadership is the
ability of a manager to induce the subordinates to work with confidence and zeal.

Leadership is the potential to influence behaviour of others. It is also defined as the capacity to
influence a group towards the realization of a goal. Leaders are required to develop future
visions, and to motivate the organizational members to want to achieve the visions.

According to Keith Davis, “Leadership is the ability to persuade others to seek defined
objectives enthusiastically. It is the human factor which binds a group together and motivates it
towards goals.”

Importance of leadership
 Influencing the behaviour of people: A leader impresses his subordinates with his
leadership ability. He brings them under his control in such a way that they put in their
best efforts to achieve the goals of the organization. Good leaders usually get good results
through their followers.
 Helps employees in fulfilling their needs: A leader establishes personal relationship
with his subordinates and tries to meet their requirements. People follow a leader because
he provides them security and the opportunities to earn wealth, gives them the right to
work and tries to understand their feelings. Employees willingly accept him because he
takes care of their needs. Consequently, they work with complete dedication and
enthusiasm.
 Introducing required changes: The business environment is changing at a quick pace,
so in order to face the changing environment, many alterations have to be introduced in
the organization. Since the people already happen to be under the influence of the leader,
he can easily makes them agree to implement these changes. In this way, the possible
resistance to the change is eliminated with the strength of leadership ability.
 Solving conflicts effectively: A leader can effectively solve every type of conflict be it
employee vs. employee or employees’ vs. employer, under the weight of his influence. A
leader allows his followers the liberty to express their views. That is the reason that he
easily understands the reality of the conflict, in this way, by understanding the nature of
the conflict he tries to provide timely solution and minimizes the possibility of adverse
results.
 Setting a clear vision: This means Influencing employees to understand and accept the
future state of the organization. A good leader will influence his followers to perform
their duties by explaining the vision and the importance of their role in the outcome.
  Motivating and guiding employees: This involves finding out the needs of the
employees and fulfilling them. It is important to define the employees’ role in the work
process and provide them with the tools needed. A good leader will explain the task and
be available to assist them if they run into a problem.
 Building morale: This involves pulling everyone together towards a comment goal. A
good leader will let the employees’ know how much their work is appreciated. A simple
gesture like providing praise for a task well done, or throwing a party to recognize small
achievements, will regenerate their spirits.

Leadership theories
Trait Theory of Leadership Rationale
According to Carlyle, history is shaped by extraordinary leaders. This ability to lead is something
that people are simply born with, Carlyle believed, and not something that could be developed.
Carlyle's ideas inspired early research on leadership, which almost entirely focused on
inheritable traits.

Carlyle's theory of leadership was based on the rationale that:

 Certain traits produce certain patterns of behavior.

 Patterns are consistent across different situations.
 People are "born" with leadership traits.

Even today, books, and articles tout the various characteristics necessary to become a great
leader, suggesting that leadership is somehow predestined in some (or is at least more likely)
while unlikely, if not impossible, in others.

Since the publication of Carlyle's thesis, psychologists have examined and argued about the trait-
based theory of leadership. From the 1940s to the 1970s, psychologist Ralph Melvin Stogdill
suggested that leadership is the result of the interaction between the individual and the social
situation and not merely the result of a predefined set of traits.3

Soon after in the 1980s, James M. Kouzes and Barry Z. Posner posited that credibility was a key
indicator of leadership skills, characterized by such traits as being honest, forward-looking,
inspiring, and competent.4

Leadership Traits
While the list of leadership traits can vary by whoever is drawing up the list, a recent study
outlined behavioral traits that separated lower-level supervisors from higher-level supervisors.5

According to the researchers, the traits most commonly associated with great leadership include:
  Adaptability and flexibility: Effective leaders don't get stuck in a rut. They are able to
think outside of the box and adapt quickly to changing situations.
 Assertiveness: A great leader is able to be direct and assertive without coming off as
overly pushy or aggressive.
 Capacity to motivate people: A great leader knows how to inspire others and motivate
them to do their best.
 Courage and resolution: The best leaders are brave and committed to the goals of the
group. They do not hide from challenges.
 Creativity: Perhaps most importantly, great leaders not only possess their own creativity,
but they are also able to foster creativity among members of the group.5
 Decisiveness: A great leader is capable of making a decision and is confident in his or her
choices.
 Eagerness to accept responsibility: Strong leaders take on responsibility and don't pass
the blame on to others. They stand by their success and take ownership of their mistakes.
 Emotional stability: In addition to being dependable overall, strong leaders are able to
control their emotions and avoid overreactions.
 Intelligence and action-oriented judgment: Great leaders and smart and make choices
that move the group forward.
 Need for achievement: Strong leaders have a need to succeed and help the group achieve
goals. They genuinely care about the success of the group and are committed to helping
the group reach these milestones.
 People skills: Excellent interpersonal skills are essential for leading effectively. Great
leaders know how to interact well with other leaders as well as with team members.
 Perseverance: Strong leaders stick with it, even when things get difficult or the group
faces significant obstacles.
 Self-confidence: Many of the best leaders are extremely self-assured. Because they are
confident in themselves, followers often begin to share this self-belief.
 Task competence: A great leader is skilled and capable. Members of the group are able
to look to the leader for an example of how things should be done.
 Trustworthiness: Group members need to be able to depend upon and trust the person
leading them.
 Understanding their followers and their needs: Effective leaders pay attention to group
members and genuinely care about helping them succeed. They want each person in the
group to succeed and play a role in moving the entire group forward.

2.2. Skills Approach

Like the trait approach, the skills approach takes a leader centered perspective on
leadership. However, in the skills approach, we shift our thinking from a focus on
personality characteristics to which usually were viewed as innate and largely
fixed, to an emphasis on skills and abilities that can be learned and
developed. Beginning in the early 1990s, a multitude of studies has been
published that contend a leader’s effectiveness depends on the leader’s ability
to solve complex organizational problems.

Three skills Approach: Based on field research in administration and his own
first hand observation of executives in the work place, Katz (1995) suggested that
effective administration leadership) depends on three basic personal skills;
technical, human and conceptual. Katz argued that these skills are quite different
from traits or qualities of leaders. Skills are what leaders can accomplish, where
traits are who leaders are (their innate characteristics). These skills are

Technical skills: is knowledge about and proficiency in a specific type of work or

activity. It includes competencies in specialized area, analytical ability and the
ability to use appropriate tools and techniques. For instance,

In computers, technical skills include

 Knowing software language and programming

 The Company’s software products and how to make these products function

Human Skills: is knowledge about and to work with people. The major focus point
is to work with people, not with things. It also considers working with and
understanding subordinates, peers and supervisors. The other focus area of human
skill is to assist group members to work effectively in achieving organizational
objective.

Conceptual Skills: is concerned with the ability to work and deal with ideas.

 Talking with ideas and intricacies about organizations.

 Good to put company goals in to words
 Understand the economic principles that affect the company
 Works with abstractions and hypothetical notions
 Central in creating vision and strategic plan.

In Accounting, technical skills include understanding and having the ability to apply
GAAP.
2.3. Style Approach

This approach emphasizes the behavior of the leader. This distinguishes it from
the trait approach which emphasizes the personality characteristics of the leader
and the skills approach which focuses on the leader’s capabilities. The style
approach focuses exclusively on what leaders do and how they act. Researchers
studying style approach determined that leadership is composed of two general
kinds of behaviors: task behavior and relationship behavior. Task behavior
facilitates goal accomplishment and relationship help subordinates feel
comfortable with themselves, with each other and with the situation in which they
find themselves. The central purpose of the style approach is to explain how the
leader combines these two kinds of behaviors to influence subordinates in their
efforts to reach a goal. Many studies have been performed to investigate the style
approach: These include

A. The Ohio State Studies: A group of researchers at Ohio State

believed that the results of studying leadership as a personality trait seemed
fruitless and decided to analyze how individuals acted when they were leading a
group or an organization. This analysis was performed by having subordinates
complete questionnaires about their leaders. The questionnaire contained 150

questions and called as Leaders Behavior Description

Questionnaires (LBDQ) in 1957.

Researchers found that subordinates’ response of the questionnaires clustered

around two types of leader behavior: Initiating structure and

consideration. Initiating structure behaviors are essentially task behaviors
such as organizing work, giving structure to the work context, defining role
 relationship and scheduling work activities. Considerations behaviors are
essentially relationship behaviors and include building camaraderie, respect, trust,
and liking between leaders and followers. The two types of behaviors identified by
the LBDQ represent the core of the style approach and are central to what leaders
do: Leaders provide structure for subordinates and they nurture them.

B. The University of Michigan Studies: Researchers at Ohio

State were developing the LBDQ, where as researchers at the University of

Michigan was exploring leadership behavior giving special attention to the impact
of leaders’ behavior on the performance of small groups. The program of research

at Michigan identified two types of leadership behaviors: employee

orientation and production orientation. Employee orientation is the
behavior of leaders who approach subordinates with a strong human relation
emphasis. They take an interest in workers as human beings, value their
individuality, and give special attention to their personal needs. Employee
orientation is very similar to the cluster of behavior identified as consideration in
Ohio State studies. Production orientation consists of leadership behavior that
stresses the technical and production aspects of the job. From this orientation,
workers are viewed as a means for getting work accomplished. Production
orientation parallels the initiating structure cluster found in the Ohio State studies.

Blake and Mouton’s Managerial (Leadership) Grid

The best known model of managerial behavior is the managerial Grid which
appeared in the early 1960s and has been refined and revised several times. It is a
model that has been used extensively in organizational training and development.
The managerial Grid which has been renamed the Leadership Grid was designed to
explain how leaders help organizations to reach their purpose through two factors:

 Concern for production and

 Concern for people
 Authority Compliance (9, 1)
 Country Club Management (1, 9)
 Impoverished Management (1, 1)
 Middle of the road Management (5, 5)
 Team Management (9,9)

Low Medium High

High Country Club Team Mgt

Concern for
People
Medium Middle of the

road Mgt

Low Impoverished Autocratic- Task mgt

(Authority Compliance)
Mgt

Concern for production

Autocratic-task Oriented
This leadership style concentrates on setting of organizational goals, development
of effective operations systems, utilization of organizational resources,
achievement of objectives and stress on quality of work and production. The leader
functions in an autocratic way with no or very little concern for people.
Country Club Management
Leaders who follow this style of leadership display very high concern for people
and very little interest for production. They create a very relaxed and friendly
environment. There are no organizational goals and exist very loose style of
functioning. The working environment is workers welfare oriented.
Impoverished Management
Under this style (as shown in the figure-left bottom corner,) is referred to as
impoverished management or Laissez-faire type of management. Managers do not
involve themselves with the work or people, they only mark time and have
abandoned their job. They act as messenger to pass information from superiors to
subordinates. They neither display any concern for people nor for the production.
They display minimum involvement in the job they are assigned to. This amounts
to exertion of minimum efforts on the part of leader to get required work done is
appropriate to sustain organizational membership.
Middle of the Road Management
Managers have both concern for people and production. They set moderate
production goals and achieve them. They have equal concern for people and work.
They achieve reasonably satisfactory results in maintain high morale of workers
and meet production requirements The managerial grid is widely used model for
training and development of managers. The model cannot determine a particular
style of a leader because leadership is influenced by personality traits, skills,
attitude of the leader and the followers. Apart from the above situational factors in
work environment and the organizational culture affects the leadership style to a
great extent.
Team Management
At the extreme opposite is team management style of leadership where managers
mesh interest of people and production needs in the balanced manner. Their
involvement is total. They are real team leaders who have full knowledge, skill and
aptitude for job and also concern for the welfare of workers. Blake and Mouton
argue strongly that style is the most effective management style. They believe,
this leadership approach will, in all situations, result in improved performance, low
absenteeism, and turnover and high job satisfaction.

2.4. Situational approach

Leadership style
Leadership Style: Leadership style consists of the behavior pattern of a person who
attempts to influence others. It includes both directives (task) behaviors and
supportive (relationship) behaviors. Directive behaviors help group members
accomplish goal by giving direction, establishing goals and methods of evaluation,
setting time lines, defining roles, and showing how the goals are to be achieved.
Directive behaviors clarify, often with one way communication, what is to be done,
how it is to be done, and who is responsible for doing it. Supportive behavior helps
group behavior feel comfortable about themselves, their coworkers and the situation.
It involves two way communications and responses that show social and emotional
support to others.

Leadership behavior can be classified further in to four distinct categories of

directive and supportive behaviors:

A. High directive and low supportive style: It is also called as directive style. In
this style the leader focuses communication on goals achievement, and spends
smaller amount of time using supportive behaviors. Using this style a leader gives
instruction about what and how goals are to be achieved by the subordinates and
then supervises them carefully.
B. Coaching Approach: In this approach, the leader focuses on both achieving goals
and meeting subordinates’ socioeconomic needs. The coaching style requires that
the leader involve him/her with subordinates by giving encouragement and
soliciting subordinate input.
C. Supportive Style: It requires that the leader takes a high supportive and low
directive style. In this approach, the leader does not focus exclusively on goals but
uses supportive behaviors that bring out the employees’ skills around the task to
be accomplished. The supportive style includes listening, praising, asking for input
and giving feedback.
D. Low-Supportive Low- Directive Style: It is also called as delegating approach.
In this approach, the leader offers less task input and social support, facilitating
employees’ confidence and motivation in reference to the task. The delegative
leader lessens involvement in planning, control of details and goal clarification.
After the group agrees on what it is to do, this style lets subordinates take
responsibility for getting the job done the way they see fit.

Types of leadership styles

1. Coaching leadership style

A coaching leader is someone who can quickly recognize their team members’ strengths,
weaknesses and motivations to help each individual improve. This type of leader often assists
team members in setting smart goals and then provides regular feedback with challenging
projects to promote growth. They’re skilled in setting clear expectations and creating a positive,
motivating environment.

2. Visionary leadership style

Visionary leaders have a powerful ability to drive progress and usher in periods of change by
inspiring employees and earning trust for new ideas. A visionary leader is also able to establish a
strong organizational bond. They strive to foster confidence among direct reports and colleagues
alike.

3. Servant leadership style

Servant leaders live by a people-first mindset and believe that when team members feel
personally and professionally fulfilled, they’re more effective and more likely to regularly
produce great work. Because of their emphasis on employee satisfaction and collaboration, they
tend to achieve higher levels of respect.

4. Autocratic leadership style

Also called the “authoritarian style of leadership,” this type of leader is someone who is focused
primarily on results and efficiency. They often make decisions alone or with a small, trusted
group and expect employees to do exactly what they’re asked. It can be helpful to think of these
types of leaders as military commanders.

5. Laissez-faire or hands-off leadership style

Laissez-faire style is the opposite of the autocratic leadership type, focusing mostly on delegating
many tasks to team members and providing little to no supervision. Because a laissez-faire leader
does not spend their time intensely managing employees, they often have more time to dedicate
to other projects.

6. Democratic or participative leadership style

The democratic style (also called the “participative style”) is a combination of the autocratic and
laissez-faire types of leaders. A democratic leader is someone who asks for input and considers
feedback from their team before making a decision. Because team members feel their voice is
heard and their contributions matter, a democratic leadership style is often credited with fostering
higher levels of employee engagement and workplace satisfaction.

7. Transformational leadership style

The transformational style is similar to the coach style in that it focuses on clear communication,
goal-setting and employee motivation. However, instead of placing the majority of the energy
into each employee’s individual goals, the transformational leader is driven by a commitment to
organizational objectives.

8. Transactional leadership style

A transactional leader is someone who is laser-focused on performance, similar to a pacesetter.

Under this leadership style, the manager establishes predetermined incentives—usually in the
form of monetary reward for success and disciplinary action for failure. Unlike the pacesetter
leadership style, though, transactional leaders are also focused on mentorship, instruction and
training to achieve goals and enjoy the rewards.

9. Bureaucratic leadership style

Bureaucratic leaders are similar to autocratic leaders in that they expect their team members to
follow the rules and procedures precisely as written.

Theories of motivation
Maslow's Hierarchy of Needs Theory

One of the most popular needs theories is Abraham Maslow's hierarchy of needs theory.
Maslow proposed that motivation is the result of a person's attempt at fulfilling five basic needs:
physiological, safety, social, esteem and self-actualization. According to Maslow, these needs
can create internal pressures that can influence a person's behavior.

Physiological needs are those needs required for human survival such as air, food, water, shelter,
clothing and sleep. As a manager, you can account for the physiological needs of your
employees by providing comfortable working conditions, reasonable work hours and the
necessary breaks to use the bathroom and eat and/or drink.

Safety needs include those needs that provide a person with a sense of security and well-being.
Personal security, financial security, good health and protection from accidents, harm and their
adverse effects are all included in safety needs. As a manager, you can account for the safety
needs of your employees by providing safe working conditions, secure compensation (such as a
salary) and job security, which is especially important in a bad economy.
Social needs, also called love and belonging, refer to the need to feel a sense of belonging and
acceptance. Social needs are important to humans so that they do not feel alone, isolated and
depressed. Friendships, family and intimacy all work to fulfill social needs. As a manager, you
can account for the social needs of your employees by making sure each of your employees
know one another, encouraging cooperative teamwork, being an accessible and kind supervisor
and promoting a good work-life balance.

Esteem needs refer to the need for self-esteem and respect, with self-respect being slightly more
important than gaining respect and admiration from others. As a manager, you can account for
the esteem needs of your employees by offering praise and recognition when the employee does
well, and offering promotions and additional responsibility to reflect your belief that they are a
valued employee.

Self-actualization needs describe a person's need to reach his or her full potential. The need to
become what one is capable of is something that is highly personal. While I might have the need
to be a good parent, you might have the need to hold an executive-level position within your
organization. Because this need is individualized, as a manager, you can account for this need by
providing challenging work, inviting employees to participate in decision-making and giving
them flexibility and autonomy in their jobs.

Theory X and Theory Y

Understanding Theory X and Theory Y

Theory X and Theory Y were first explained by McGregor in his book, "The Human Side of
Enterprise," and they refer to two styles of management – authoritarian (Theory X) and
participative (Theory Y).

Theory X

Work in organizations that are managed like this can be repetitive, and people are often
motivated with a "carrot and stick" approach. Performance appraisals

and remuneration

are usually based on tangible results, such as sales figures or product output, and are used to
control staff and "keep tabs" on them.

This style of management assumes that workers:

 Dislike their work.

 Avoid responsibility and need constant direction.
 Have to be controlled, forced and threatened to deliver work.
 Need to be supervised at every step.
  Have no incentive to work or ambition, and therefore need to be enticed by rewards to
achieve goals.

Theory Y

Theory Y managers have an optimistic, positive opinion of their people, and they use a
decentralized, participative management style. This encourages a more collaborative

, trust-based

This style of management assumes that workers are:

 Happy to work on their own initiative.

 More involved in decision making.
 Self-motivated to complete their tasks.
 Enjoy taking ownership

 of their work.
 Seek and accept responsibility, and need little direction.
 View work as fulfilling and challenging.
 Solve problems creatively and imaginatively.

Theory Y has become more popular among organizations. This reflects workers' increasing
desire for more meaningful careers

that provide them with more than just money.

It's also viewed by McGregor as superior to Theory X, which, he says, reduces workers to "cogs
in a machine," and likely demotivates people in the long term.

Herzberg’s Motivation Theory – Two Factor Theory

Herzberg’s Motivation Theory model, or Two Factor Theory, argues that there are two factors
that an organization can adjust to influence motivation in the workplace.

These factors are:

Motivators: Which can encourage employees to work harder.

Hygiene factors: These won’t encourage employees to work harder but they will cause them
to become unmotivated if they are not present.

The two factors identified by Herzberg are motivators and hygiene factors.
1. Motivating Factors

The presence of motivators causes employees to work harder. They are found within the actual
job itself.

2. Hygiene Factors

The absence of hygiene factors will cause employees to work less hard. Hygiene factors are not
present in the actual job itself but surround the job.

The impact of motivating and hygiene factors is summarized in the following diagram. Note that
you will often see motivators referred to as factors for satisfaction, and hygiene factors referred
to as factors for dissatisfaction.