CHAPTER SEVENTEEN 1 ment ition illiams Copyright 2005

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CHAPTER SEVENTEEN 1 ment ition illiams Copyright © 2005 by South-Western, a division of

CHAPTER SEVENTEEN 1 ment ition illiams Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved

What Would You Do? You have been asked to accept the job as Xerox’s

What Would You Do? You have been asked to accept the job as Xerox’s new CEO… . But, there couldn’t be a worse time to take over Ø Xerox is in its worst shape in its history . You don’t know if you have what it takes What would you do as a leader? Can the company be turned around? Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved 2

What Is Leadership? After reading the next two sections, you should be able to:

What Is Leadership? After reading the next two sections, you should be able to: 1. explain what leadership is. 2. describe who leaders are and what effective leaders do. Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved 3

Leadership Differences Between Leaders and Managers Substitutes for Leadership 1 Copyright © 2005 by

Leadership Differences Between Leaders and Managers Substitutes for Leadership 1 Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved 4

Leaders versus Managers MANAGERS LEADERS Do things right Status quo Short-term Means Builders Problem

Leaders versus Managers MANAGERS LEADERS Do things right Status quo Short-term Means Builders Problem solving Do the right thing Change Long-term Ends Architects Inspiring & motivating 1. 1 Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved Adapted from Exhibit 17. 1 5

Substitutes for Leadership substitutes Ø subordinate, task, or organizational characteristics that make leaders redundant

Substitutes for Leadership substitutes Ø subordinate, task, or organizational characteristics that make leaders redundant or unnecessary § professional orientation, intrinsically satisfying work, cohesive work group, etc. . Leadership neutralizers Ø subordinate, task, or organizational characteristics that interfere with a leader’s actions § subordinate skills, abilities, unambiguous and routing tasks, intrinsically satisfying work, rewards not controlled by supervisor, etc. . Leaders don’t always matter 1. 2 Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved 6

Leadership Substitutes and Neutralizers 1. 2 Adapted from Exhibit 17. 2 Copyright © 2005

Leadership Substitutes and Neutralizers 1. 2 Adapted from Exhibit 17. 2 Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved 7

Who Leaders Are and What Leaders Do Leadership Traits Leadership Behavior 2 Copyright ©

Who Leaders Are and What Leaders Do Leadership Traits Leadership Behavior 2 Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved 8

Leadership Traits Desire to Lead Honesty and Integrity Drive Leadership Self. Confidence Knowledge of

Leadership Traits Desire to Lead Honesty and Integrity Drive Leadership Self. Confidence Knowledge of the Business Emotional Stability Cognitive Ability 2. 1 Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved 9

Traits and Perceptions of Leadership Effectiveness What Really Works Leadership Traits Intelligence 10% 20%

Traits and Perceptions of Leadership Effectiveness What Really Works Leadership Traits Intelligence 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% probability of success 75% Dominance 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% probability of success 57% Extroversion 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% probability of success 63% 2. 1 Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved 10

Charisma and Leadership Effectiveness What Really Works Leadership Traits Charisma and Performance 10% 20%

Charisma and Leadership Effectiveness What Really Works Leadership Traits Charisma and Performance 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% probability of success 72% Charisma and Perceived Leadership Effectiveness 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% probability of success 89% Charisma and Leader Satisfaction 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% probability of success 90% 2. 1 Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved 11

Leadership Behaviors. Initiating structure Ø clarifies follower roles and duties Ø job-centered or concern

Leadership Behaviors. Initiating structure Ø clarifies follower roles and duties Ø job-centered or concern for production . Consideration Ø creating a supportive environment Ø employee-centered or concern for people 2. 2 Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved 12

Been There Done That David Gergen discusses the role that leadership traits played in

Been There Done That David Gergen discusses the role that leadership traits played in the success of U. S. presidents…. Trust is even more relevant for leaders now, and personal integrity is the bedrock. Leader and followers unite around a shared vision. Humility that conveys absolute assurance but acknowledges a leader’s equality can be inspiring Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved 13

Blake/Moulton Leadership Grid Concern for People 9 1, 9 Country Club Management 8 7

Blake/Moulton Leadership Grid Concern for People 9 1, 9 Country Club Management 8 7 6 Middle of the 5 5, 5 4 Road 3 2 Impoverished 1, 1 Management 1 1 2. 2 Team 9, 9 Management 2 3 4 Authority. Compliance 9, 1 5 6 7 8 9 Concern for Production Adapted from Exhibit 17. 4 Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved 14

Situational Approaches to Leadership After discussing this section, you should be able to: 3.

Situational Approaches to Leadership After discussing this section, you should be able to: 3. explain Fiedler’s contingency theory. 4. describe how path-goal theory works. 5. discuss Hersey and Blanchard’s Situational Leadership theory. 6. explain the normative decision theory. Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved 15

Putting Leaders in the Right Situation: Fiedler’s Contingency Theory Situational Favorableness Group Performance =

Putting Leaders in the Right Situation: Fiedler’s Contingency Theory Situational Favorableness Group Performance = Leadership Style 3 Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved 16

Putting Leaders in the Right Situation: Fiedler’s Contingency Theory Least Preferred Coworker Situational Favorableness

Putting Leaders in the Right Situation: Fiedler’s Contingency Theory Least Preferred Coworker Situational Favorableness Matching Leadership Styles to Situations 3 Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved 17

Leadership Style: Least Preferred Coworker. Leadership style is the way a leader generally behaves

Leadership Style: Least Preferred Coworker. Leadership style is the way a leader generally behaves toward followers Ø seen as stable and difficult to change . Style is measured by the Least Preferred Coworker scale (LPC) Ø relationship-oriented Ø task-oriented 3. 1 Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved 18

Situational Favorableness. How a particular situation affects a leader’s ability to lead. Three factors

Situational Favorableness. How a particular situation affects a leader’s ability to lead. Three factors Ø Leader-member relations Ø Task structure Ø Position power 3. 2 Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved 19

Situational Favorableness 3. 2 Adapted From Exhibit 17. 7 Copyright © 2005 by South-Western,

Situational Favorableness 3. 2 Adapted From Exhibit 17. 7 Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved 20

Matching Leadership Styles to Situations Good Task. Oriented Leaders Poor Relationship. Oriented Leaders 3.

Matching Leadership Styles to Situations Good Task. Oriented Leaders Poor Relationship. Oriented Leaders 3. 3 Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved Adapted From Exhibit 17. 8 21

Path-Goal Theory Subordinate Contingencies • Perceived Ability • Locus of Control • Experience Leadership

Path-Goal Theory Subordinate Contingencies • Perceived Ability • Locus of Control • Experience Leadership Styles • Directive • Supportive • Participative • Achievement-Oriented Outcomes • Subordinate satisfaction • Subordinate performance Environmental Contingencies • Task Structure • Formal Authority System • Primary Work Group 4 Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved Adapted From Figure 17. 10 22

Adapting Leader Behavior: Path-Goal Theory Leadership Styles Subordinate and Environmental Contingencies Outcomes 4 Copyright

Adapting Leader Behavior: Path-Goal Theory Leadership Styles Subordinate and Environmental Contingencies Outcomes 4 Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved 23

Leadership Styles. Directive Ø clarifying expectations and guidelines . Supportive Ø being friendly and

Leadership Styles. Directive Ø clarifying expectations and guidelines . Supportive Ø being friendly and approachable . Participative Ø allowing input on decisions . Achievement-Oriented Ø setting challenging goals 4. 1 Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved 24

Subordinate and Environmental Contingencies Subordinate Environmental . Perceived ability . Task structure . Locus

Subordinate and Environmental Contingencies Subordinate Environmental . Perceived ability . Task structure . Locus of control . Formal authority system . Experience . Primary work group 4. 2 Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved 25

Path Goal Theory: When to Use Leadership Styles 4. 2 Copyright © 2005 by

Path Goal Theory: When to Use Leadership Styles 4. 2 Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved Adapted from Exhibit 17. 11 26

Adapting Leadership Behavior: Hersey and Blanchard’s Situational Leadership Theory Worker Readiness Leadership Styles 5

Adapting Leadership Behavior: Hersey and Blanchard’s Situational Leadership Theory Worker Readiness Leadership Styles 5 Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved 27

Worker Readiness. The ability and willingness to take responsibility for directing one’s behavior at

Worker Readiness. The ability and willingness to take responsibility for directing one’s behavior at work. Components of worker readiness: Ø Job readiness Ø Psychological readiness 5. 1 Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved 28

Worker Readiness R 4 confident willing able R 3 insecure not willing able R

Worker Readiness R 4 confident willing able R 3 insecure not willing able R 2 confident willing not able R 1 insecure not able not willing 5. 1 Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved 29

Leadership Styles Telling (R 1) high task behavior low relationship behavior Selling (R 2)

Leadership Styles Telling (R 1) high task behavior low relationship behavior Selling (R 2) high task behavior high relationship behavior Participating (R 3) low task behavior high relationship behavior Delegating (R 4) low task behavior low relationship behavior 5. 2 Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved 30

Adapting Leader Behavior: Normative Decision Theory Decision Styles Decision Quality and Acceptance 6 Copyright

Adapting Leader Behavior: Normative Decision Theory Decision Styles Decision Quality and Acceptance 6 Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved 31

Decision Styles AI Solve the problem yourself AII Obtain information. Select a solution yourself.

Decision Styles AI Solve the problem yourself AII Obtain information. Select a solution yourself. CI CII Share problem, with group, get ideas from get ideas. individuals. Make decision, Select a which may or solution may not reflect yourself. input. GII Share problem with group. Together tries to reach a solution. Leader acts as facilitator. 6. 1 Adapted from Exhibit 17. 12 Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved 32

Decision Quality and Acceptance. Using the right amount of employee participation: Ø improves decision

Decision Quality and Acceptance. Using the right amount of employee participation: Ø improves decision quality Ø improves acceptance . Decision tree helps leader identify optimal level of participation 6. 2 Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved 33

Normative Theory Decision Rules. Quality Rule Ø If the quality of the decision is

Normative Theory Decision Rules. Quality Rule Ø If the quality of the decision is important, then don't use an autocratic decision style . Leader Information Rule Ø If the quality of the decision is important, and if the leader doesn't have enough information to make the decision on his or her own, then don't use an autocratic decision style . Subordinate Information Rule Ø If the quality of the decision is important, and if the subordinates don't have enough information to make the decision themselves, then don't use a group decision style 6. 2 Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved More 34

Normative Theory Decision Rules. Goal Congruence Rule Ø If the quality of the decision

Normative Theory Decision Rules. Goal Congruence Rule Ø If the quality of the decision is important, and subordinates' goals are different from the organization's goals, then don't use a group decision style . Problem Structure Rule Ø If the quality of the decision is important, the leader doesn't have enough information to make the decision on his or her own, and the problem is unstructured, then don't use an autocratic decision style 6. 2 Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved More 35

Normative Theory Decision Rules. Commitment Probability Rule Ø If having subordinates accept and commit

Normative Theory Decision Rules. Commitment Probability Rule Ø If having subordinates accept and commit to the decision is important, then don't use an autocratic decision style . Subordinate Conflict Rule Ø If having subordinates accept the decision is important and critical to successful implementation and subordinates are likely to disagree or end up in conflict over the decision, then don't use an autocratic or consultative decision style 6. 2 Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved More 36

Normative Theory Decision Rules. Commitment Requirement Rule Ø If having subordinates accept the decision

Normative Theory Decision Rules. Commitment Requirement Rule Ø If having subordinates accept the decision is absolutely required for successful implementation and subordinates share the organization's goals, then don't use an autocratic or consultative style 6. 2 Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved 37

Strategic Leadership After reading the next section, you should be able to: 7. explain

Strategic Leadership After reading the next section, you should be able to: 7. explain how visionary leadership (i. e. , charismatic and transformational leadership) helps leaders achieve strategic leadership. Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved 38

Visionary Leadership Charismatic Leadership Transformational Leadership 7 Copyright © 2005 by South-Western, a division

Visionary Leadership Charismatic Leadership Transformational Leadership 7 Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved 39

Charismatic Leadership. Creates an exceptionally strong relationship between leader and follower. Charismatic leaders: Ø

Charismatic Leadership. Creates an exceptionally strong relationship between leader and follower. Charismatic leaders: Ø articulate a clear vision, based on values Ø model values consistently with vision Ø communicate high performance expectations Ø display confidence in followers’ abilities 7. 1 Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved 40

Kinds of Charismatic Leaders. Ethical Charismatics Ø provide developmental opportunities Ø open to positive

Kinds of Charismatic Leaders. Ethical Charismatics Ø provide developmental opportunities Ø open to positive and negative feedback Ø recognize others’ contributions Ø share information Ø concerned with the interests of the group . Unethical Charismatics Ø control and manipulate followers Ø only want positive feedback Ø motivated by self-interest 7. 1 Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved 41

Ethical and Unethical Charismatic Leaders Charismatic Leader Behaviors Unethical Charismatics Exercising Power is used

Ethical and Unethical Charismatic Leaders Charismatic Leader Behaviors Unethical Charismatics Exercising Power is used to dominate others Creating the vision Vision comes solely from the leader Communicating with followers One-way communication, not open to input from others Accepting feedback Prefer yes-men, punish candid feedback Stimulating followers Don’t want followers to think, prefer uncritical acceptance of own ideas Developing followers Insensitive to followers’ needs Living by moral standards Follow standards only if they satisfy immediate self interests 7. 1 Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved 42

Reducing Risks of Unethical Charismatics. Have a clearly written code of conduct. Recruit, select,

Reducing Risks of Unethical Charismatics. Have a clearly written code of conduct. Recruit, select, and promote managers with high ethical standards. Train leaders how to value, seek, and use diverse points of view. Celebrate and reward those who exhibit ethical behaviors 7. 1 Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved 43

Transformational Leadership Transformational. Generates awareness and acceptance of group’s purpose and mission. Gets employees

Transformational Leadership Transformational. Generates awareness and acceptance of group’s purpose and mission. Gets employees to see beyond their own needs and self-interest. Goes beyond charismatic leadership. Different than transactional leadership Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved 44

Transactional Leadership Transactional. Based on exchange process. Uses rewards and punishment for motivation. Relies

Transactional Leadership Transactional. Based on exchange process. Uses rewards and punishment for motivation. Relies too heavily on discipline and threats to improve performance. Not as effective as transformational leadership Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved 45

Components of Transformational Leadership. Charismatic leadership or idealized influence. Inspirational motivation. Intellectual stimulation. Individualized

Components of Transformational Leadership. Charismatic leadership or idealized influence. Inspirational motivation. Intellectual stimulation. Individualized consideration 7. 2 Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved 46

What Would You Do—II? You are the CEO of Unique Restaurant… . Your success

What Would You Do—II? You are the CEO of Unique Restaurant… . Your success is based on your reputation and your staff. But, business is down and employee benefits expenses are increasing. You have three options: eliminate health benefits, find a cheaper plan, or pass the cost to the employee How can you best make the tough decision? How involved should your employees be in making it? Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved 47