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Leadership
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Irwin/McGraw-Hill
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Leadership
Leadership is the process where a person
exerts influence over others and inspires,
motivates and directs their activities to
achieve goals.
Effective leadership increases the firms
ability to meet new challenges.
Leader: The person exerting the influence.
Personal Leadership Style: the ways leaders choose to
influence others.
Some leaders delegate and support subordinates, others
are very authoritarian.
Managers at all levels have their own leadership style.
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Leadership Across Cultures
Leadership styles may vary over different
cultures.
European managers tend to be more people-oriented than
American or Japanese managers.
Japanese culture is very collective oriented, while
American focuses more on profitability.
Time horizons also are affected by cultures.
U.S. firms often focus on short-run efforts.
Japanese firms take a longer-term outlook.
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Sources of Power
Reward
Power
Legitimate
Power
Coercive
Power
Expert
Power
Referent
Power
Enable managers to be
leaders & influence
subordinates to
achieve goals
Figure 13.1
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Sources of Power
Used to affect others behavior and get them
to act in given ways.
Legitimate Power: managers authority resulting by their
management position in the firm.
Can be power to hire/fire workers, assign work.
Reward Power: based on the managers ability to give or
withhold rewards.
Pay raises, bonuses, verbal praise.
Effective managers use reward power to signal
employees they are doing a good job.
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Sources of Power
Coercive Power: based in ability to punish others.
Ranges from verbal reprimand to pay cuts to firing.
Can have serious negative side effects.
Expert Power: based on special skills of leader.
First & middle managers have most expert power.
Often found in technical ability.
Referent Power: results from personal characteristics of
the leader which earn workers respect, loyalty and
admiration.
Usually held by likable managers who are concerned
about their workers.
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Empowerment
Process of giving workers at all levels
authority to make decisions and the
responsibility for their outcomes.
Empowerment helps managers:
Get workers involved in the decisions.
Increase worker commitment and motivation.
To focus on other issues.
Effective managers usually empower
substantial authority to workers.
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Leadership Models
Trait Model: sought to identify personal characteristics
responsible for effective leadership.
Research shows that traits do appear to be connected to
effective leadership.
Many traits are the result of skills and knowledge.
Not all effective leaders possess all these traits.
Behavioral Model: Identifies types of behavior.
Consideration: leaders show care toward workers.
Employee-centered.
Initiating Structure: managers take steps to make sure
work is done.
Done by assigning work, setting goals, etc.
Job-oriented.
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Irwin/McGraw-Hill
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Consideration Initiating Structure
Consideration & Initiating Structure
Is friendly, approachable

Do little things to make it fun
to be a member of group

Give advance notice of changes

Willing to make changes

Treats group members
as equals

Tries out ideas in the group

Lets group members know
what is expected

Assigns workers to tasks

Schedules work to be done

Maintains standards
of performance

Rate manager from 1 (never does) to 5 (always does)
NOTE: for full survey, see Figure 13.2 in text
Figure 13.2
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Irwin/McGraw-Hill
The McGraw-Hill Companies, Inc., 2000
Contingency Models
Fiedlers Model: effective leadership is
contingent on both the characteristics of the
leader and the situation.
Leader style: the enduring, characteristic approach to
leadership a manager uses.
Relationship-oriented: concerned with developing good
relations with workers.
Task-oriented: concerned that workers perform so the
job gets done.
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The McGraw-Hill Companies, Inc., 2000
Fiedlers Model
Situation characteristic: how favorable a given situation
is for leading to occur.
Leader-member relations: determines how much
workers like and trust their leader.
Task structure: extent to which workers tasks are clear-
cut.
Clear issues make a situation favorable for leadership.
Position Power: amount of legitimate, reward, &
coercive power a leader has due to their position.
When positional power is strong, leadership opportunity
becomes more favorable.
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Fiedlers Contingency Model
GOOD POOR
HIGH LO W HIGH LOW
S W S W S W S W
Leader-
Member
Relations
Task
Structure
Position
Power
Kinds of
Leadership
Situations
Very
Favorable
Very
Unfavorable
I II III IV V VI VII VIII 1
Relationship-oriented managers most effective in IV, V, VI, VII.
Task-oriented managers most effective in I, II, III or VIII.
Figure 13.3
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Using Fiedlers Model
Can combine leader-member relations, task structure, and
position power to identify leadership situations.
Identifies situations where given types of managers
might perform best.
Seen in Figure 13.4.
Leader style is a characteristic managers cannot change.
Thus, managers will be most effective when:
1) They are placed in leadership situations that suit their
style.
2) The situation can be changed to fit the manager.
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Houses Path-Goal Model
Model suggests that effective leaders motivate workers to
achieve by:
1) Clearly identifying the outcomes workers are trying to
achieve.
2) Reward workers for high-performance and attainment.
3) Clarifying the paths to the attainment of the goals.
Path-Goal is a contingency model since it proposes the
steps managers should take to motivate their workers.
Based on Expectancy Theory.
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Steps to Path-Goal
1) Determine the outcomes your subordinates are trying to
obtain.
Can range from pay to job security or interesting work.
Once outcomes determined, manager needs to be sure
they have the reward power to provide these.
2) Reward subordinates for high-performance and goal
attainment with the desired outcomes.
3) Clarify the paths to goal attainment for workers, remove
obstacles to performance, and express confidence in
workers ability.
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Motivating with Path-goal
Path-goal identifies four behaviors leaders can use:
1) Directive behaviors: set goals, assign tasks, show how
to do things.
2) Supportive behavior: look out for the workers best
interest.
3) Participative behavior: give subordinates a say in
matters that affect them.
4) Achievement-oriented behavior: Setting very
challenging goals, believing in workers abilities.
Which behavior should be used depends on the worker
and the tasks.
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Leader-Substitute Model
Leadership substitute: acts in the place of a leader and
makes leadership unnecessary. Possible substitutes can
be found:
Characteristics of Subordinates: their skills,
experience, motivation.
Characteristics of context: the extent to which work is
interesting and fun.
Worker empowerment or Self-managed work teams
reduce leadership needs.
Managers need to be aware that they do not always need
to directly exert influence over workers.
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Transformational Leadership
Started with von Pierer, CEO of Siemens, and allows
dramatic improvements in management effectiveness.
Transformational managers:
Make subordinates aware of how important their jobs
are by providing feedback to the worker.
Make subordinates aware of their own need for
personal growth and development.
Empowerment of workers, added training help.
Motivate workers to work for the good of the
organization, not just themselves.
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Transformational Leaders
Transformational leaders are charismatic and have a
vision of how good things can be.
They are excited and clearly communicate this to
subordinates.
Transformational leaders openly share information with
workers.
Everyone is aware of problems and the need for change.
Empowers workers to help with solutions.
Transformational leaders engage in development of
workers.
Manager works hard to help them build skills.
13-20
Irwin/McGraw-Hill
The McGraw-Hill Companies, Inc., 2000
Transactional Leadership
Involves managers using the reward and
coercive power to encourage high
performance.
Managers who push subordinates to
change but do not seem to change
themselves are transactional.
The transactional manager does not have
the vision of the Transformational
leader.
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Gender and Leadership
The number of women managers is rising but
still relatively low in top levels.
Stereotypes suggest women are supportive
and concerned with interpersonal relations.
Similarly, men are seen as task-focused.
Research indicates that actually there is no gender-based
difference in leadership effectiveness.
However, women are seen to be more participative than
men.