MGT301 Organizational Behavior 3
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14
LEARNING GOALS
14.1 What is leadership and what does it mean for a leader to be “effective”? 14.2 What traits and characteristics are related to leader emergence and leader effectiveness? 14.3 What four styles can leaders use to make decisions, and what factors combine to make these styles
more effective in a given situation?
14.4 What two dimensions capture most of the day-to-day leadership behaviors in which leaders engage? 14.5 How does transformational leadership differ from transactional leadership, and which behaviors set it
apart?
14.6 How does leadership affect job performance and organizational commitment? 14.7 Can leaders be trained to be more effective?
After reading this chapter, you should be able to answer the following questions:
Leadership: Styles and Behaviors
INDIVIDUAL OUTCOMES
INDIVIDUAL MECHANISMS
INDIVIDUAL CHARACTERISTICS
ORGANIZATIONAL MECHANISMS
Motivation
Trust, Justice, & Ethics
Teams: Characteristics &
Diversity Learning &
Decision Making
Stress
Job Satisfaction
Leadership: Styles &
Behaviors
Organizational Commitment
Job Performance
GROUP MECHANISMS
Ability
Personality & Cultural Values
Teams: Processes &
Communication
Leadership: Power &
Negotiation
Organizational Culture
Organizational Structure
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Mary Barra, 55, has topped Fortune’s list of most powerful women for two years in a row. As CEO and Board Chairman of General Motors, she is ulti- mately responsible for the leadership of an organization with over 200,000 employees and $160 billion in revenue in 2016. It’s quite a daunting task, but Barra seems to be perfectly made for it so far. Barra took over the company shortly after GM declared bankruptcy and had to take a gov- ernment bailout in order to survive. She stepped in right as GM had to fight through the recall of 2.6 million cars due to a faulty ignition switch that was responsible for 21 deaths and more than 500 injuries. Barra was placed front and center testifying before Congress while being questioned about the dysfunctional culture at GM. Most believe she handled herself incredibly well, primarily by being open and honest about the safety scandal both inside and outside the company—even going so far as to commission an indepen- dent investigation (which resulted in a number of firings and early retirements).
Known for having a collaborative leadership style, Barra is not one to shirk from issues and encourages those around
her to tackle things head on. She says, “I want bad news— the sooner the better. I want it when the person closest to it realizes there’s a problem. Almost every problem at the start is solvable. The longer it takes to solve, the higher it gets in the organization and the bigger the problem gets.” Barra, who has spent 36 years at GM (she started when she was 18), partly developed her leadership skills during her early career in factory management. Some believe the reason she’s been successful is a controlled ego—the exact oppo- site of many of her predecessors. Barra is willing to share credit when it is deserved, which has allowed her to hang on to the upper level executives that were competing with her for the CEO job. Some say she’s assembled the best management team in GM’s history.
One of Barra’s major gifts has been the ability to inspire accountability inside a culture that has been known for the exact opposite. Barra, speaking to a room full of newly pro- moted executives, said, “Remember your whole career, how you’ve been talking about them? If only they would get it? If only they would work this out? Well, you are now they. If you don’t like something, you have to talk to yourself.”
GENERAL MOTORS
©Rachel Woolf/Getty Images News/Getty Images
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LEADERSHIP: STYLES AND BEHAVIORS
This is the second of two chapters on leadership, defined as the use of power and influence to direct the activities of followers toward goal achievement.1 That direction can affect followers’ interpretation of events, the organization of their work activities, their commitment to key goals, their relationships with other followers, or their access to cooperation and support from other work units.2 The last chapter described how leaders get the power and influence needed to direct others. In the case of Mary Barra, her power derives from her formal role as GM’s CEO, her expertise, and her charisma. This chapter describes how leaders actually use their power and influ- ence in an effective way. Although she’s worked for GM her entire 35-year career, Barra has a clear vision of what GM can be in the future.
Of course, most leaders can’t judge their performance by pointing to how many cars they’ve sold (over 10 million per year) or how long they’ve worked for a company. Fortunately, leader effectiveness can be gauged in a number of ways. Leaders might be judged by objective evaluations of unit performance, such as profit margins, market share, sales, returns on investment, produc- tivity, quality, costs in relation to budgeted expenditures, and so forth.3 If those sorts of indices are unavailable, the leader’s superiors may judge the performance of the unit on a more subjec- tive basis. Other approaches to judging leader effectiveness center more on followers, including indices such as absenteeism, retention of talented employees, grievances filed, requests for trans- fer, and so forth.4 Those sorts of indices can be complemented by employee surveys that assess the perceived performance of the leader, the perceived respect and legitimacy of the leader, and employee commitment, satisfaction, and psychological well-being. The top panel of Table 14-1 provides one example of these sorts of measures.
One source of complexity when judging leader effectiveness, particularly with more subjec- tive, employee-centered approaches, is “Whom do you ask?” The members of a given unit often disagree about how effective their leader is. Leader–member exchange theory, which describes how leader–member relationships develop over time on a dyadic basis, can explain why those differences exist.5 The theory argues that new leader–member relationships are typically marked by a role taking phase, during which a manager describes role expectations to an employee and the employee attempts to fulfill those expectations with his or her job behaviors.6 In this period of sampling and experimentation, the leader tries to get a feel for the talent and motivation lev- els of the employee. For some employees, that initial role taking phase may eventually be supple- mented by role making, during which the employee’s own expectations for the dyad get mixed in with those of the leader.7 The role making process is marked by a free-flowing exchange in which the leader offers more opportunities and resources and the employee contributes more activities and effort.
Over time, the role taking and role making processes result in two general types of leader– member dyads, as shown in Figure 14-1. One type is the “high-quality exchange” dyad, marked by the frequent exchange of information, influence, latitude, support, and attention. Those dyads form the leader’s “ingroup” and are characterized by higher levels of mutual trust, respect, and obligation.8 The other type is the “low-quality exchange” dyad, marked by a more limited exchange of information, influence, latitude, support, and attention. Those dyads form the leader’s “outgroup” and are characterized by lower levels of trust, respect, and obligation.9 Tests of the theory suggest that employees who are competent, likable, and similar to the leader in personality will be more likely to end up in the leader’s ingroup; those factors have even greater impact than age, gender, or racial similarity.10 These ingroup relationships can be very powerful attachments for some workers. Research suggests that employees are less likely to leave an organization when they have a high LMX relationship with a specific leader, but they are more likely to leave following a leadership succession.11 Leader–member exchange theory also suggests that judgments of leader effectiveness should gauge how effective the most criti- cal leader–member dyads appear to be. The bottom panel of Table 14-1 provides one example
14.1 What is leadership and what does it mean for a leader to be “effective”?
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of this sort of measure, with more agreement indicating a higher-quality exchange relationship and thus higher levels of leader effectiveness on a dyadic basis.12 Recent meta-analyses have found that employees with higher-quality exchange relationships have higher levels of job per- formance and exhibit more organizational citizenship behaviors and fewer counterproductive behaviors on average.13 It should be noted, though, that the development of high LMX relation- ships has proven to be more effective in individualistic (Western) cultures than in collectivistic (Asian) cultures.14
TABLE 14-1 Employee-Centered Measures of Leader Effectiveness
Unit-Focused Approach
Ask all members of the unit to fill out the following survey items, then average the responses across the group to get a measure of leader effectiveness.
1. My supervisor is effective in meeting our job-related needs.
2. My supervisor uses methods of leadership that are satisfying.
3. My supervisor gets us to do more than we expected to do.
4. My supervisor is effective in representing us to higher authority.
5. My supervisor works with us in a satisfactory way.
6. My supervisor heightens our desire to succeed.
7. My supervisor is effective in meeting organizational requirements.
8. My supervisor increases our willingness to try harder.
9. My supervisor leads a group that is effective.
Dyad-Focused Approach
Ask members of the unit to fill out the following survey items in reference to their particular relationship with the leader. The responses are not averaged across the group; rather, differ- ences across people indicate differentiation into “ingroups” and “outgroups” within the unit.
1. I always know how satisfied my supervisor is with what I do.
2. My supervisor understands my problems and needs well enough.
3. My supervisor recognizes my potential.
4. My supervisor would use his/her power to help me solve work problems.
5. I can count on my supervisor to “bail me out” at his/her expense if I need it.
6. My working relationship with my supervisor is extremely effective.
7. I have enough confidence in my supervisor to defend and justify his/her decisions when he/she is not present to do so.
Sources: Adapted from B. Bass and B. Avolio, MLQ Manual (Menlo Park, CA: Mind Garden, Inc., 2004); and G.B. Graen and M. Uhl-Bien, “Relationship-Based Approach to Leadership: Development of Leader–Member Exchange (LMX) Theory of Leadership over 25 Years: Applying a Multi-Level Multi-Domain Perspective,” Leadership Quarterly 6 (1995), pp. 219–47.
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FIGURE 14-1 Leader–Member Exchange Theory
High-Quality Exchange (ingroup)
Low-Quality Exchange (outgroup)
MEMBER
MEMBER
MEMBER
MEMBER
LEADER Leader “Ingroups” have:
Greater mutual trust Greater respect Higher felt obligation
WHY ARE SOME LEADERS MORE EFFECTIVE THAN OTHERS?
For our purposes, leader effectiveness will be defined as the degree to which the leader’s actions result in the achievement of the unit’s goals, the continued commitment of the unit’s employees, and the development of mutual trust, respect, and obligation in leader–member dyads. Now that we’ve described what it means for a leader to be effective, we turn to the critical question in this chapter: “Why are some leaders more effective than others?” That is, why exactly are some leaders viewed as more effective on a unitwide basis, and why exactly are some leaders better at fostering high-quality exchange relationships? Beginning as far back as 1904, research on leadership has attempted to answer such questions by looking for particular traits or charac- teristics of effective leaders.15 The search for traits and characteristics is consistent with “great person” theories of leadership that suggest that “leaders are born, not made.”16 Early research in this area frequently focused on physical features (e.g., gender, height, physical attractiveness, energy level), whereas subsequent research focused more squarely on personality and ability (see Chapter 9 on personality and cultural values and Chapter 10 on ability for more discussion of such issues).
After a century of research, leadership scholars now acknowledge that there is no generalizable profile of effective leaders from a trait perspective.17 In fact, most studies have concluded that traits are more predictive of leader emergence (i.e., who becomes a leader in the first place) than they are of leader effectiveness (i.e., how well people actually do in a leadership role). Table 14-2 reviews some of the traits and characteristics that have been found to be correlated with leader emergence and leader effectiveness. Although a number of traits and characteristics are relevant to leadership, two limitations of this work have caused leadership research to move in a differ- ent direction. First, many of the trait–leadership correlations are weak in magnitude, particularly when leader effectiveness serves as the outcome. Second, the focus on leader traits holds less prac- tical relevance than a focus on leader actions. Although research shows that traits can seemingly have an effect on leader effectiveness, these effects are generally explained much more strongly by leader behavior.18 What exactly can leaders do that can make them more effective? This chapter
14.2 What traits and character- istics are related to leader emergence and leader effectiveness?
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TABLE 14-2 Traits/Characteristics Related to Leader Emergence and Effectiveness
DESCRIPTION OF TRAIT/ CHARACTERISTIC LINKED TO EMERGENCE? LINKED TO EFFECTIVENESS?
High conscientiousness √
Low agreeableness √
Low neuroticism
High openness to experience √ √
High extraversion √ √
High general cognitive ability √ √
High energy level √ √
High stress tolerance √ √
High self-confidence √ √
reviews three types of leader actions: decision-making styles, day-to-day behaviors, and behaviors that fall outside of a leader’s typical duties.
LEADER DECISION-MAKING STYLES Of course, one of the most important things leaders do is make decisions. Think about the job you currently hold or the last job you had. Now picture your boss. How many decisions did he or she have to make in a given week? How did he or she go about making those decisions? A leader’s decision-making style reflects the process the leader uses to generate and choose from a set of alternatives to solve a problem (see Chapter 8 on learning and decision making for more discus- sion of such issues). Decision-making styles capture how a leader decides as opposed to what a leader decides.
The most important element of a leader’s decision-making style is this: Does the leader decide most things for him- or herself, or does the leader involve others in the process? We’ve probably all had bosses (or professors, or even parents) who made virtually all decisions by themselves, stop- ping by to announce what had happened once the call had been made. We’ve probably also had other bosses (or professors, or parents) who tended to do the opposite—involving us, asking our opinions, or seeking our vote even when we didn’t care about what was being discussed. It turns out that this issue of leader versus follower control can be used to define some specific decision- making styles. Figure 14-2 shows those styles, arranged on a continuum from high follower control to high leader control.
DEFINING THE STYLES With an autocratic style, the leader makes the decision alone without asking for the opinions or suggestions of the employees in the work unit.19 The employees may provide information that the leader needs but are not asked to generate or evaluate potential solutions. In fact, they may not even be told about the decision that needs to be made, knowing only that the leader wants information for some reason. Unlike Mary Barra at GM, this decision- making style seems to be a favorite of Fiat-Chrysler CEO Sergio Marchionne, who is doing his best to make sure decisions are made extraordinarily quickly at Chrysler—and he’s doing that by
14.3 What four styles can lead- ers use to make decisions, and what factors combine to make these styles more effective in a given situation?
Sources: Adapted from T.A. Judge, J.E. Bono, R. Ilies, and M.W. Gerhardt, “Personality and Leadership: A Qualitative and Quantitative Review,” Journal of Applied Psychology 87 (2002), pp. 765–80; T.A. Judge, A.E. Colbert, and R. Ilies, “Intelligence and Leadership: A Quantitative Review and Test of Theoretical Propositions,” Journal of Applied Psychology 89 (2004), pp. 542–52; and G. Yukl, Leadership in Organizations, 4th ed. (Englewood Cliffs, NJ: Prentice Hall, 1998)
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making them himself. Marchionne has flattened Chrysler’s organizational chart with him at the top and has 25 direct reports (not counting 21 at Fiat). One might think this would cause a major bottleneck with regard to decisions, but Marchionne swears that speed is the only thing that will save Chrysler at this point and he is always within reach through the use of one of his six Black- Berrys. Marchionne says, “BlackBerrys are divine instruments. They [his direct reports] have access to me 24/7.” The CEO is known for making decisions within minutes, or seconds.20
The next two styles in Figure 14-2 offer more employee involvement. With a consultative style, the leader presents the problem to individual employees or a group of employees, asking for their opinions and suggestions before ultimately making the decision him- or herself.21 With this style, employees do “have a say” in the process, but the ultimate authority still rests with the leader. Bob Brennan, ex-CEO of Iron Mountain, a $3 billion information management services company headquartered in Boston, says, “I ask this question a lot in different situations: ‘What do you rec- ommend we do?’ You can get a real sense for who’s invested in moving the company forward, and who’s watching the company go by, with that very simple question. People lay out problems all the time. If they’ve thought through what should be done from here, then you’ve got somebody who’s in the game, who wants to move, and you can unlock that potential.”22
That ultimate authority changes with a facilitative style, in which the leader presents the problem to a group of employees and seeks consensus on a solution, making sure that his or her own opinion receives no more weight than anyone else’s.23 With this style, the leader is more facilitator than deci- sion maker. Robert W. Selander, executive vice chair of MasterCard, said he had learned over time to encourage discussion in a group. “From sort of a style standpoint, I prefer to do what I call more of a consensus style of decision-making,” he said. “So when I’m around the table with our executive com- mittee, the senior leadership of the company, I could easily make a bilateral decision. You’re knowl- edgeable about your area. I may have the best knowledge about your area or second best around the table. You and I agree. Let’s get on with it. What we haven’t done is we haven’t benefited from the wisdom, the insight, and the experience of the others around the table. And while they may not have as much insight or knowledge about your area as you do, there’s a chance that we missed something. So I try to get more engagement and discussion around topics and avoid what I would call bilateral- ism. I think what happens is sometimes you get an insight that’s startling and important and affects
the decision, but you also get participative involvement so that there is buy-in and a rec- ognition of how we got to that decision. It’s not as if the boss went off in a corner and waved a magic wand and, bang, out came the decision.”24
With a delegative style, the leader gives an individ- ual employee or a group of employees the responsibility for making the decision within some set of specified boundary conditions.25 The leader plays no role in the deliberations
FIGURE 14-2 Leader Decision-Making Styles
High Follower Control
High Leader Control
Delegative Style
Facilitative Style
Consultative Style
Autocratic Style
Sergio Marchionne, CEO of Fiat-Chrysler, is known for his autocratic and speedy
decision-making style.
©Bloomberg/Getty Images
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unless asked, though he or she may offer encouragement and provide necessary resources behind the scenes. Former American Apparel CEO Paula Schneider, known as a “macromanager,” took over for a CEO who had a hardcore autocratic style. “If someone comes to me and says, ‘Every- thing is screwed up,’ then I make them list everything. And then after once or twice, no one does it again, because no one wants to list everything. Here, it is about finding solutions.”26 Daniel Amos, CEO and chair of Aflac, also believes strongly in a delegative style. He says, “My theory is that when you start telling people what to do, they no longer are responsible; you are. I’ll give them my opinion and say; ‘Look, this is my opinion, but if you choose that and you fail, you’re not blaming it on me. It is your fault.’ I think it makes them stronger.”27
WHEN ARE THE STYLES MOST EFFECTIVE? Which decision-making style is best? As you may have guessed, there is no one decision-making style that’s effective across all situations, and all styles have their pluses and minuses. There are many factors to consider when leaders choose a decision-making style.28 The most obvious consideration is the quality of the resulting decision, because making the correct decision is the ultimate means of judging the leader. However, leaders also have to consider whether employees will accept and commit to their decision. Research stud- ies have repeatedly shown that allowing employees to participate in decision making increases their job satisfaction.29 Such participation also helps develop employees’ own decision-making skills.30
Of course, such participation has a downside for employees because it takes up time. Many employees view meetings as an interruption of their work. One recent study found that employees spend, on average, six hours a week in scheduled meetings and that time spent in meetings relates negatively to job satisfaction when employees don’t depend on others in their jobs, focus on their own task accomplishment, and believe meetings are run ineffectively.31 Diane Bryant, EVP at Intel, argues that “You need people who are critical to making the decisions on the agenda, not people who are there only because they’ll be impacted. At Intel, if we see someone who doesn’t need to be there, people will say, ‘Bob, I don’t think we need you here. Thanks for coming.’”32 Similarly, Mary Barra is trying to speed things up at GM, which is known for having one of the most bureaucratic cultures around—the company is known for decisions having to be made by committee. Once, they even appointed a committee to take a look at how many committee meetings should be held!33
How can leaders effectively manage their choice of decision-making styles? The time-driven model of leadership offers one potential guide.34 It suggests that the focus should shift away from autocratic, consultative, facilitative, and delegative leaders to autocratic, consultative, facilitative, and delegative situations. More specifically, the model suggests that seven factors combine to make some decision-making styles more effective in a given situation and other styles less effec- tive. Those seven factors include:
• Decision significance: Is the decision significant to the success of the project or the organization? • Importance of commitment: Is it important that employees “buy in” to the decision? • Leader expertise: Does the leader have significant knowledge or expertise regarding the problem? • Likelihood of commitment: How likely is it that employees will trust the leader’s decision and
commit to it? • Shared objectives: Do employees share and support the same objectives, or do they have an
agenda of their own? • Employee expertise: Do the employees have significant knowledge or expertise regarding the
problem? • Teamwork skills: Do the employees have the ability to work together to solve the problem, or will
they struggle with conflicts or inefficiencies?
Figure 14-3 illustrates how these seven factors can be used to determine the most effective decision-making style in a given situation. The figure asks whether the levels of each of the seven fac- tors are high (H) or low (L). The figure functions like a funnel, moving from left to right, with each answer taking you closer to the recommended style (dashes mean that a given factor can be skipped for that combination). Although the model seems complex at first glance, the principles within it are straightforward. Autocratic styles are reserved for decisions that are insignificant or for which employee commitment is unimportant. The only exception is when the leader’s expertise is high and the leader is trusted. An autocratic style in these situations should result in an accurate decision
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Source: Adapted from V.H. Vroom, “Leadership and the Decision-Making Process,” Organizational Dynamics 28 (2000), pp. 82–94.
FIGURE 14-3 The Time-Driven Model of Leadership
Autocratic Delegative
Consultative
Facilitative H
H
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Consultative
L Facilitative
Consultative
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L Consultative
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E that makes the most efficient use of employees’ time. Delegative styles should be reserved for cir- cumstances in which employees have strong teamwork skills and are not likely to commit blindly to whatever decision the leader provides. Deciding between the remaining two styles—consultative and facilitative—is more nuanced and requires a more complete consideration of all seven factors.
For our earlier example of Sergio Marchionne, decision significance is high, importance of commitment is low, and leader expertise is high, so he adopts an autocratic decision style. How- ever, for Jack Griffin, ex-CEO of Time Inc., autocratic decision making didn’t seem to go over too well. Griffin became known within the company for his “imperious” decision-making behavior. For example, he insisted that every magazine include a masthead with his name at the top (an extra page that cost the company about $5 million a year) almost right after hundreds of employ- ees were laid off—a decision that used to be left up to individual editors. A source within the company was quoted as saying, “Time Inc. has long operated on the collegial consensus approach and I don’t think that was Jack’s strength.”35 With magazine publishing operating during such a precarious time, we would label decision significance as high, importance of commitment as high, and the leader not appearing to have expertise in the subject matter of the decisions. As a result, his autocratic style led to a rebellion by those working for him and his termination only six months after his appointment. A key point about Figure 14-3 is that unless a leader is an expert with regard to the focus of the decision, autocratic decisions are not the right style to choose.
Research tends to support many of the time-driven model’s propositions, particularly when it uses practicing managers as participants.36 For example, one study asked managers to recall past decisions, the context surrounding those decisions, and the eventual successes (or failures) of their decisions.37 When managers used the decision-making styles recommended by the model, those deci- sions were rated as successful 68 percent of the time. When managers went against the model’s prescriptions, their decisions were only rated as successful 22 percent of the time. It’s also interesting
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to note that studies suggest that managers tend to choose the style recommended by the model only around 40 percent of the time and exhibit less variation in styles than the model suggests they should.38 In particular, managers seem to overuse the consultative style and underutilize autocratic and facilitative styles. Sheila Lirio Marcelo, the CEO of Care.com, uses a unique approach by actu- ally letting her staff know what type of decisions will be made prior to each meeting. “We do Type 1, Type 2, Type 3 decisions,” she said. “Type 1 decisions are the decision-maker’s sole decision— dictatorial [autocratic]. Type 2: people can provide input, and then the person can still make the decision [consultative]. Type 3, it’s consensus [facilitative]. It’s a great way to efficiently solve a prob- lem.”39 To try to use the time-driven model’s suggestions yourself, see this chapter’s OB on Screen.
OB ON SCREEN THE MARTIAN
This is something NASA expressly rejected. We’re talking about mutiny here, which is not a word that I take lightly, so we do this together—or not at all.
With those words, Commander Melissa Lewis (Jessica Chastain) signals the decision-making style she is going to use during a conversation with the crew of the Hermes in The Martian (Dir: Ridley Scott, 20th Century Fox, 2015). The year is 2035 and the crew of the Ares III mission to Mars has just been sent a clandestine communication from an unknown source within NASA. The message provides details as to how they can re-route their spacecraft to potentially return to Mars to save stranded crew member Mark Watney (Matt Damon) whom they left behind believ- ing that he was dead. The decision is not an easy one and is rife with potential complications. What decision-making style should Commander Lewis use to decide what to do?
If we work our way through Figure 14-3, it seems clear that the decision is significant. To re-route their craft is to go against the decision of NASA and potentially jeopardizes the entire operation. Commander Lewis also stresses to the crew that any mistake along the way could kill them all. Get- ting the crew’s commitment to the decision is highly important not only due to the danger, but also because it adds 533 days to their voyage. Commander Lewis, while highly qualified, does not have the expertise to do it alone. It’s likely the crew will commit; one does so before even thinking through the options. The crew shares a great desire (objective) to rectify leaving one of their own behind and they are each experts in their chosen fields (geologist, pilot, doctor, computer programmer, and chemist). In addition, the crew has demonstrated their ability to work effectively with each other as a team. If you’ve been keeping up with Figure 14-3 we have a H-H-L-H-H-H-H, suggesting that Com- mander Lewis’s most effective decision-making style would be facilitative. Even though it is within her purview to order the crew to do what she wants, Commander Lewis presents the problem to the group and seeks consensus on the solution, ensuring that her vote only counts as one of five.
©Photo 12/Alamy
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DAY-TO-DAY LEADERSHIP BEHAVIORS Leaving aside how they go about making decisions, what do leaders do on a day-to-day basis? When you think about bosses that you’ve had, what behaviors did they tend to perform as part of their daily leadership responsibilities? A series of studies at Ohio State in the 1950s attempted to answer that question. Working under grants from the Office of Naval Research and the Inter- national Harvester Company, the studies began by generating a list of all the behaviors leaders engage in—around 1,800 in all.40 Those behaviors were trimmed down to 150 specific examples, then grouped into several categories, as shown in Table 14-3.41 The table reveals that many leaders spend their time engaging in a mix of initiating, organizing, producing, socializing, integrating, communicating, recognizing, and representing behaviors. Although eight categories are easier to remember than 1,800 behaviors, further analyses suggested that the categories in Table 14-3 really boil down to just two dimensions: initiating structure and consideration.42
Initiating structure reflects the extent to which the leader defines and structures the roles of employees in pursuit of goal attainment.43 Leaders who are high on initiating structure play a more active role in directing group activities and prioritize planning, scheduling, and trying out new ideas. They might emphasize the importance of meeting deadlines, describe explicit stan- dards of performance, ask employees to follow formalized procedures, and criticize poor work when necessary.44 Millard Drexler, CEO of J. Crew (the New York–based clothing retailer), has a unique initiating structure approach as he belts out instructions, assigns tasks, discusses clothing trends, and talks about sales statistics and goals about a dozen times a day over loudspeakers in the main Manhattan office. If he isn’t in the office (and he often isn’t), he has his assistant patch him in through his cell phone.45
Consideration reflects the extent to which leaders create job relationships characterized by mutual trust, respect for employee ideas, and consideration of employee feelings.46 Leaders who
14.4 What two dimensions capture most of the day-to- day leadership behaviors in which leaders engage?
TABLE 14-3 Day-to-Day Behaviors Performed by Leaders
BEHAVIOR DESCRIPTION
Initiating Structure
Initiation Originating, facilitating, and sometimes resisting new ideas and practices
Organization Defining and structuring work, clarifying leader versus member roles, coordinating employee tasks
Production Setting goals and providing incentives for the effort and productiv- ity of employees
Consideration
Membership Mixing with employees, stressing informal interactions, and exchanging personal services
Integration Encouraging a pleasant atmosphere, reducing conflict, promoting individual adjustment to the group
Communication Providing information to employees, seeking information from them, showing an awareness of matters that affect them
Recognition Expressing approval or disapproval of the behaviors of employees
Representation Acting on behalf of the group, defending the group, and advanc- ing the interests of the group
Source: R.M. Stogdill, Manual for the Leader Behavior Description Questionnaire-Form XII, Bureau of Business Research, The Ohio State University, 1963.
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are high on consideration create a climate of good rapport and strong, two-way communica- tion and exhibit a deep concern for the welfare of employees. They might do personal favors for employees, take time to listen to their problems, “go to bat” for them when needed, and treat them as equals.47 Jeff Immelt, CEO of General Electric, attempts to do this with many of the officers in his company by hosting a sleepover a couple of times a month. Immelt says, “We spend Saturday morning just talking about their careers. Who they are, how they fit, how I see their strengths and weaknesses—stuff like that. The personal connection is something I may have taken for granted before that [and] I don’t want to ever take for granted again.”48 Google’s project OXYGEN was a process that tried to identify the most effective behaviors of managers inside the organization. The three most important habits that determined leader success were all oriented toward consid- eration: meeting regularly with employees, taking an interest in them personally, and asking ques- tions rather than always providing answers.49
The Ohio State studies argued that initiating structure and consideration were (more or less) independent concepts, meaning that leaders could be high on both, low on both, or high on one and low on the other. That view differed from a series of studies conducted at the University of Michigan during the same time period. Those studies identified concepts similar to initiating structure and consideration, calling them production-centered (or task-oriented) and employee- centered (or relations-oriented) behaviors.50 However, the Michigan studies framed their task- oriented and relations-oriented concepts as two ends of one continuum, implying that leaders couldn’t be high on both dimensions.51 In fact, a meta-analysis of 78 studies showed that initiat- ing structure and consideration are only weakly related—knowing whether a leader engages in one brand of behavior says little about whether he or she engages in the other brand.52 To see how much initiating structure and consideration you engage in during leadership roles, see our OB Assessments feature.
After an initial wave of research on initiating structure and consideration, leadership experts began to doubt the usefulness of the two dimensions for predicting leadership effectiveness.53 More recent research has painted a more encouraging picture, however. A meta-analysis of 103 studies showed that initiating structure and consideration both had beneficial relationships with a number of outcomes.54 For example, consideration had a strong positive relationship with per- ceived leader effectiveness, employee motivation, and employee job satisfaction. It also had a moderate positive relationship with overall unit performance. For its part, initiating structure had a strong positive relationship with employee motivation and moderate positive relationships with perceived leader effectiveness, employee job satisfaction, and overall unit performance. One of the most amusing and unique CEOs in the country, Chobani’s Hamdi Ulukaya, is known for exhibit- ing both sets of behaviors. Employees say that there are, in essence, two Hamdi’s. Ulukaya says, “I’m a shepherd and I’m a warrior—I come and go between those two.” CMO Peter McGuinness says the two versions of Ulukaya mesh together well: “The leaders of tomorrow more and more realize that having a strong head and big heart is where you need to be.”55
Although initiating structure and consideration tend to be beneficial across situations, there may be circumstances in which they become more or less important. The life cycle theory of leadership (sometimes also called the situational model of leadership) argues that the optimal combination of initiating structure and consideration depends on the readiness of the employees in the work unit.56 Readiness is broadly defined as the degree to which employees have the abil- ity and the willingness to accomplish their specific tasks.57 As shown in Figure 14-4, the theory suggests that readiness varies across employees and can be expressed in terms of four important snapshots: R1–R4. To find the optimal combination of leader behaviors for a particular readi- ness snapshot, put your finger on the relevant R, then move it straight down to the recommended combination of behaviors.
The description of the first two R’s has varied over time and across different formulations of the theory. One formulation described the R’s as similar to stages of group development.58 R1 refers to a group of employees who are working together for the first time and are eager to begin, but they lack the experience and confidence needed to perform their roles. Here the optimal combination of leader behaviors is telling—high initiating structure and low consideration—in which case the leader provides specific instructions and closely supervises performance. The lion’s share of the leader’s attention must be devoted to directing followers in this situation,
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OB ASSESSMENTS
INITIATING STRUCTURE AND CONSIDERATION How do you act when you’re in a leadership role? This assessment is designed to measure initiat- ing structure and consideration. Please write a number next to each statement that reflects how frequently you engage in the behavior described. Then subtract your answers to the boldfaced questions from 6, with the difference being your new answer for that question. For example, if your original answer for question 16 was “4,” your new answer is “2” (6–4). Then sum up your answers for each of the dimensions. (Instructors: Assessments on transformational leadership, LMX, charisma, and readiness can be found in the PowerPoints in the Connect Library’s Instruc- tor Resources and in the Connect assignments for this chapter.)
SCORING AND INTERPRETATION:
Initiating Structure: Sum up items 1–10. _______ Consideration: Sum up items 11–20. _______ For initiating structure, scores of 38 or more are high. For consideration, scores of 40 or more are high.
Source: R.M. Stogdill, Manual for the Leader Behavior Description Questionnaire–Form XII (Columbus, OH: Bureau of Business Research, The Ohio State University, 1963).
1 NEVER
2 SELDOM
3 OCCASIONALLY
4 OFTEN
5 ALWAYS
1. I let group members know what is expected of them. ________
2. I encourage the use of uniform procedures. ________
3. I try out my ideas in the group. ________
4. I make my attitudes clear to the group. ________
5. I decide what shall be done and how it shall be done. ________
6. I assign group members to particular tasks. ________
7. I make sure that my part in the group is understood by the group members. ________
8. I schedule the work to be done. ________
9. I maintain definite standards of performance. ________
10. I ask group members to follow standard rules and regulations. ________
11. I am friendly and approachable. ________
12. I do little things to make it pleasant to be a member of the group. ________
13. I put suggestions made by the group into operation. ________
14. I treat all group members as equals. ________
15. I give advance notice of changes. ________
16. I keep to myself. ________
17. I look out for the personal welfare of group members. ________
18. I am willing to make changes. ________
19. I refuse to explain my actions. ________
20. I act without consulting the group. ________
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FIGURE 14-4 The Life Cycle Theory of Leadership
Source: Adapted from P. Hersey and K. Blanchard, “Revisiting the Life-Cycle Theory of Leadership,” Training and Devel- opment, January 1996, pp. 42–47.
Firing on all cylinders
Starting to work well together
Readiness
R4
HIGH LOWMODERATE
Tasks seem harder than expected
Eager but inexperienced
R3 R2 R1
Initiating Structure HIGH HIGH
Consideration HIGHHIGH LOWLOW
LOW LOW
Partici- pating
Dele- gating Selling Telling
because their goals and roles need to be clearly defined. In the R2 stage, the members have begun working together and, as typically happens, are finding that their work is more difficult than they had anticipated. As eagerness turns to dissatisfaction, the optimal combination of leader behaviors is selling—high initiating structure and high consideration—in which the leader supplements his or her directing with support and encouragement to protect the confidence levels of the employees.
As employees gain more ability, guidance and direction by the leader become less necessary. At the R3 stage, employees have learned to work together well, though they still need support and collaboration from the leader to help them adjust to their more self-managed state of affairs. Here participating—low initiating structure and high consideration—becomes the optimal com- bination of leader behaviors. Finally, the optimal combina- tion for the R4 readiness level is delegating—low initiating struc- ture and low consideration— such that the leader turns responsibility for key behav- iors over to the employees. Here the leader gives them the proverbial ball and lets them run with it. All that’s needed from the leader is some degree of observation and monitor- ing to make sure that the group’s efforts stay on track. Nick Woodman, CEO of GoPro, had to learn the hard way (after numerous project
Jeff Immelt, CEO of General Electric, exhibits consideration by holding “sleepovers” with his offi- cers to get to know them better.
©Brett Flashnick/AP Images
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failures) to recognize the readiness in his followers and that as the company’s projects moved outside of his area of expertise, he had to delegate more to his staff.59
Estimates suggest that the life cycle theory has been incorporated into leadership training programs at around 400 of the firms in the Fortune 500, with more than one million manag- ers exposed to it annually.60 Unfortunately, the application of the theory has outpaced scientific testing of its propositions, and the shifting nature of its terminology and predictions has made scientific testing somewhat difficult.61 The research that has been conducted supports the theory’s predictions only for low readiness situations, suggesting that telling and selling sorts of behaviors may be more effective when ability, motivation, or confidence is lacking.62 When readiness is higher, these tests suggest that leader behaviors simply matter less, regardless of their particular combinations. Tests also suggest that leaders only use the recommended combinations of behav- iors between 14 and 37 percent of the time,63 likely because many leaders adhere to the same leadership philosophy regardless of the situation. It should also be noted that tests of the theory have been somewhat more supportive when conducted on an across-job, rather than within-job, basis. For example, research suggests that the performance of lower ranking university employees (e.g., maintenance workers, custodians, landscapers) depends more on initiating structure and less on consideration than the performance of higher ranking university employees (e.g., profes- sors, instructors).64
TRANSFORMATIONAL LEADERSHIP BEHAVIORS By describing decision-making styles and day-to-day leader behaviors, we’ve covered a broad spec- trum of what it is that leaders do. Still, something is missing. Take a small piece of scrap paper and jot down five people who are famous for their effective leadership. They can come from inside or outside the business world and can be either living people or historical figures. All that’s impor- tant is that their name be practically synonymous with great leadership. Once you’ve compiled your list, take a look at the names. Do they appear on your list because they tend to use the right decision-making styles in the right situations and engage in effective levels of consideration and initiating structure? What about the case of Mary Barra? Do decision-making styles and day-to- day leadership behaviors explain her importance to the fortunes of GM?
The missing piece of this leadership puzzle is what leaders do to motivate their employees to perform beyond expectations. Transformational leadership involves inspiring followers to commit to a shared vision that provides meaning to their work while also serving as a role model who helps followers develop their own potential and view problems from new perspectives.65 Trans- formational leaders heighten followers’ awareness of the importance of certain outcomes while
Mother Teresa’s inspiring humanitarian work with
India’s sick and poor, and her founding of the
influential Missionaries of Charity, became known
around the world and sug- gest that she was a trans-
formational leader. She was awarded the Nobel
Peace Prize in 1979.
©Tim Graham/Hulton Archive/Getty Images
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increasing their confidence that those outcomes can be achieved.66 What gets “transformed” is the way followers view their work, causing them to focus on the collective good more than just their own short-term self-interests and to perform beyond expectations as a result.67 Former president Dwight D. Eisenhower once noted, “Leadership is the ability to decide what is to be done, and then to get others to want to do it.”68 Former president Harry S. Truman similarly observed, “A leader is a man who has the ability to get other people to do what they don’t want to do, and like it.”69 Both quotes capture a transformation in the way followers view their work and what moti- vates them on the job.
Transformational leadership is viewed as a more motivational approach to leadership than other managerial approaches. Figure 14-5 contrasts various approaches to leadership according to how active or passive they are and, ultimately, how effective they prove to be. The colored cubes in the figure represent five distinct approaches to motivating employees, and the depth of the cubes represents how much a leader prioritizes each of the approaches. The figure therefore represents an optimal leadership approach that prioritizes more effective and more active behaviors. That optimal approach includes low levels of laissez-faire (i.e., hands-off) leadership, represented by the red cube, which is the avoidance of leadership altogether.70 Important actions are delayed, respon- sibility is ignored, and power and influence go unutilized. One common measure of leadership reflects laissez-faire styles with this statement: “The leader avoids getting involved when important issues arise.”71
The three yellow cubes represent transactional leadership, which occurs when the leader rewards or disciplines the follower depending on the adequacy of the follower’s performance.72 With passive management-by-exception, the leader waits around for mistakes and errors, then takes corrective action as necessary.73 After all, “if it ain’t broke, don’t fix it!”74 This approach is rep- resented by statements like: “The leader takes no action until complaints are received.”75 With active management-by-exception, the leader arranges to monitor mistakes and errors actively and again takes corrective action when required.76 This approach is represented by statements like: “The leader directs attention toward failures to meet standards.”77 Contingent reward represents a more active and effective brand of transactional leadership, in which the leader attains follower agreement on what needs to be done using promised or actual rewards in exchange for adequate performance.78 Statements like “The leader makes clear what one can expect to receive when per- formance goals are achieved” exemplify contingent reward leadership.79
Transactional leadership represents the “carrot-and-stick” approach to leadership, with management-by-exception providing the “sticks” and contingent reward supplying the “carrots.” Of course, transactional leadership represents the dominant approach to motivating employees in most organizations, and research suggests that it can be effective. A meta-analysis of 87 stud- ies showed that contingent reward was strongly related to follower motivation and perceived leader effectiveness80 (see Chapter 6 on motivation for more discussion of such issues). Active management-by-exception was only weakly related to follower motivation and perceived leader effectiveness, however, and passive management-by-exception seems actually to harm those outcomes.81 Such results support the progression shown in Figure 14-5, with contingent reward standing as the most effective approach under the transactional leadership umbrella.
Finally, the green cube represents transformational leadership—the most active and effective approach in Figure 14-5. How effective is transformational leadership? Well, we’ll save that dis- cussion for the “How Important Is Leadership?” section that concludes this chapter, but suf- fice it to say that transformational leadership has the strongest and most beneficial effects of any of the leadership variables described in this chapter. It’s also the leadership approach that’s most universally endorsed across cultures, as described in our OB Internationally feature. In addi- tion, it probably captures the key qualities of the famous leaders we asked you to list a few para- graphs back. To understand why it’s so powerful, we need to dig deeper into the specific kinds of actions and behaviors that leaders can utilize to become more transformational. It turns out that the full spectrum of transformational leadership can be summarized using four dimensions: idealized influence, inspirational motivation, intellectual stimulation, and individualized consid- eration. Collectively, these four dimensions of transformational leadership are often called “the Four I’s.”82 For our discussion of transformational leadership, we’ll use Steve Jobs, former CEO of Apple, who was widely recognized as one of the most transformational leaders in the corporate
14.5 How does transformational leadership differ from transactional leadership, and which behaviors set it apart?
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FIGURE 14-5 Laissez-Faire, Transactional, and Transformational Leadership
Source: Adapted from B.M. Bass and R.E. Riggio, Transformational Leadership, 2nd ed. (Mahwah, NJ: Erlbaum, 2006).
EFFECTIVE
INEFFECTIVE
ACTIVEPASSIVE
Laissez-Faire
Transactional: Passive Management-
by-Exception
Transactional: Active Management-
by-Exception
Transactional: Contingent Reward
Transformational
world, as a running example. Fortune named Jobs “CEO of the Decade” for the 2000s.83 Although Jobs died in 2011, his legacy as a transformational leader continues to this day. The fact that we constantly hear good leaders being called “Steve Jobs-like” illustrates this fact. Jobs’s leadership continues to affect employees at Apple in profound ways.84
Idealized influence involves behaving in ways that earn the admiration, trust, and respect of followers, causing followers to want to identify with and emulate the leader.85 Idealized influ- ence is represented by statements like: “The leader instills pride in me for being associated with him/her.”86 Idealized influence is synonymous with charisma—a Greek word that means “divinely inspired gift”—which reflects a sense among followers that the leader possesses extraordinary qual- ities.87 “Charisma” is a word that was often associated with Steve Jobs. One observer noted that even though Jobs could be very difficult to work with, his remarkable charisma created a mysteri- ous attraction that drew people to him, keeping them loyal to his collective sense of mission.88
To some extent, discussions of charisma serve as echoes of the “great person” view of leader- ship that spawned the trait research described in Table 14-2. In fact, research suggests that there
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Does the effectiveness of leader styles and behaviors vary across cultures? Answering that ques- tion is one of the objectives of Project GLOBE’s test of culturally endorsed implicit leadership theory, which argues that effective leadership is “in the eye of the beholder” (see Chapter 9 on personality and cultural values for more discussion of such issues). To test the theory, researchers asked par- ticipants across cultures to rate a number of leader styles and behaviors using a 1 (very ineffective) to 7 (very effective) scale. The accompanying figure shows how three of the styles and behaviors described in this chapter were rated across 10 different regions (note that the term “Anglo” repre- sents people of English ethnicity, including the United States, Great Britain, and Australia).
OB INTERNATIONALLY
Sources: P.W. Dorfman, P.J.Hanges, and F.C.Brodbeck, “Leadership and Cultural Variation: The Identification of Cultur- ally Endorsed Leadership Profiles,” in Culture, Leadership, and Organizations, ed. R.J. House, P.J. Hanges, M. Javidan, P.W. Dorfman, and V. Gupta (Thousand Oaks, CA: Sage, 2004), pp. 669–720; R.J. House., P.J. Hanges, M. Javidan, P.W. Dorfman, and V.Gupta, Culture, Leadership, and Organizations (Thousand Oaks, CA: Sage, 2004); and M. Javidan., R.J. House, and P.W. Dorfman.,“A Nontechnical Summary of GLOBE Findings,” in Culture, Leadership, and Organizations, ed. R.J. House, P.J. Hanges, M. Javidan, P.W. Dorfman, and V. Gupta (Thousand Oaks, CA: Sage, 2004), pp. 29–48.
Eastern Europe
Latin America
Latin Europe
Confucian Asia
Nordic Europe Sub-Sahara Africa
Anglo
Southern Asia
Germanic Europe
Middle East
7
6
4
3
Transformational
Participative
Consideration
5
It turns out that transformational leadership is the most universally accepted approach to lead- ership of any of the concepts studied by Project GLOBE, receiving an average rating near 6 in every region except the Middle East. That appeal is likely explained by the fact that transforma- tional leaders emphasize values like idealism and virtue that are endorsed in almost all coun- tries. The figure also shows that a participative style is favorably viewed in most countries, though more variation is evident. Even more variation is seen with consideration behaviors, which are endorsed a bit less across the board but especially in Europe. Understanding these kinds of results can help organizations select and train managers who will fit the profile of an effective leader in a given region.
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is a genetic component to charisma specifically and to transformational leadership more broadly. Studies on identical twins reared apart show that such twins have very similar charismatic pro- files, despite their differing environments.89 Indeed, such research suggests that almost 60 per- cent of the variation in charismatic behavior can be explained by genes. One explanation for such findings is that genes influence the personality traits that give rise to charisma. For example, research suggests that extraversion, openness to experience, and agreeableness have significant effects on perceptions of leader charisma,90 and all three of those personality dimensions have a significant genetic component (see Chapter 9 on personality and cultural values for more discus- sion of such issues).
Inspirational motivation involves behaving in ways that foster an enthusiasm for and commit- ment to a shared vision of the future.91 That vision is transmitted through a sort of “meaning- making” process in which the negative features of the status quo are emphasized while highlight- ing the positive features of the potential future.92 Inspirational motivation is represented by state- ments like: “The leader articulates a compelling vision of the future.”93 At Apple, Steve Jobs was renowned for spinning a “reality distortion field” that reshaped employees’ views of the cur- rent work environment.94 One Apple employee explained, “Steve has this power of vision that is almost frightening. When Steve believes in something, the power of that vision can literally sweep aside any objections, problems, or whatever. They just cease to exist.”95
Intellectual stimulation involves behaving in ways that challenge followers to be innovative and creative by questioning assumptions and reframing old situations in new ways.96 Intellectual stimu- lation is represented by statements like: “The leader gets others to look at problems from many different angles.”97 Intellectual stimulation was a staple of Jobs’s tenure at Apple. He pushed for a different power supply on the Apple II so that the fan could be removed, preventing it from humming and churning like other computers of the time. Years later, he insisted on removing the floppy drive from the iMac because it seemed silly to transfer data one megabyte at a time, a decision that drew merciless criticism when the iMac debuted. One employee talking about Jobs stated, “There would be times when we’d rack our brains on a user interface problem, and think we’d considered every option, and he would go ‘Did you think of this?’ He’d redefine the problem or approach, and our little problem would go away.”98
Individualized consideration involves behaving in ways that help followers achieve their poten- tial through coaching, development, and mentoring.99 Not to be confused with the consideration behavior derived from the Ohio State studies, individualized consideration represents treating employees as unique individuals with specific needs, abilities, and aspirations that need to be tied into the unit’s mission. Individualized consideration is represented by statements like: “The leader spends time teaching and coaching.”100 Of the four facets of transformational leadership, Steve Jobs seemed lowest on individualized consideration. Employees who were not regarded as his equals were given a relatively short leash and sometimes faced an uncertain future in the company. In fact, some Apple employees resisted riding the elevator for fear of ending up trapped with Jobs for the ride between floors. As one observer describes it, by the time the doors open, you might have had your confidence undermined for weeks.101 For a different (yet similar) take on what sets our best leaders apart from others, see our OB at the Bookstore feature.
One interesting domain for examining transformational leadership issues is politics. Many of the most famous speeches given by U.S. presidents include a great deal of transformational content. Table 14-4 includes excerpts from speeches given by presidents that rank highly on transformational content based on scientific and historical study.102 One theme that’s notable in the table is the presence of a crisis, as many of the presidents were attempting to steer the country through a difficult time in history (e.g., World War II, the Cold War, the Civil War). That’s not a coincidence, in that times of crisis are particularly conducive to the emergence of transformational leadership.103 Times of stress and turbulence cause people to long for charis- matic leaders, and encouraging, confident, and idealistic visions resonate more deeply during such times. In addition, support for this suggestion comes from President George W. Bush’s speeches before and after the tragedies on 9/11. Coding of his major speeches, public addresses, and radio addresses shows a significant increase in the transformational content of his rhetoric after the 9/11 attacks, including more focus on a collective mission and more articulation of a values-based vision.104 As future research is conducted, we’re fairly confident that President
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OB AT THE BOOKSTORE SUPERBOSSES by Sydney Finkelstein (New York: Portfolio / Penguin, 2016)
Superbosses are the great coaches, the igniters of talent, and the teachers of leadership in most industries. In effect, superbosses have mastered something most bosses miss—a path to extraordi- nary success founded on making other people successful.
With those words, Sydney Finkelstein describes what sets his idea of a “Superboss” apart from most other managers or leaders. Finkel- stein, a professor at Dartmouth University, spent 10 years interview- ing over 200 renowned leaders across numerous industries to try to unlock the secrets to what creates superlative leadership. The funda- mental conclusion he reached is that what makes a superboss is pri- marily a leader’s desire and ability to make the people underneath them successful. They are willing to do whatever it takes to hire the right people (sometimes in spite of a lack of qualifications) and have the ability to push them to be successful by using their authentic leadership styles. You can spot a superboss by looking at the trail of successful leaders behind them. For instance, at one point NFL Coach Bill Walsh (one of the inspirations for Finkelstein’s research) had trained 26 of the current head coaches in the NFL (out of 32). He identifies the following characteristics present to some degree in all superbosses: extreme confidence, competitiveness, imagination,
integrity, and authenticity. Finkelstein argues that superbosses essentially fall into one of three categories. The first are
“Iconoclasts” who have a creative and passionate vision that inspires the employees around them. Examples of iconoclasts are George Lucas, Lorne Michaels, and Jon Stewart. The second cat- egory is “Glorious Bastards” in which the leader is focused on only one thing: winning. However, these leaders recognize that winning comes through hiring and developing the best people. Exam- ples of glorious bastards are Larry Ellison, Michael Milken, and Bonnie Fuller. The third group of superbosses are “Nurturers” who take pride in mentoring those around them and care about their success. Examples include Mary Kay Ash, Bill Walsh, and Norman Brinker. Not surprisingly, these categories actually map pretty well onto three of the four dimensions of transformational leadership—namely, inspirational motivation (iconoclasts), intellectual stimulation (glorious bas- tards), and individualized consideration (nurturers).
©Roberts Publishing Services
Barack Obama’s speeches will be described similarly, as many of his campaign and postelection speeches were high in transformational content. In fact, President Obama was known for being a very charismatic leader in terms of both the messages he delivered and the mannerisms that went along with them.105 It remains to be seen how President Trump’s speeches will be seen and received by others.
SUMMARY: WHY ARE SOME LEADERS MORE EFFECTIVE THAN OTHERS? So what explains why some leaders are more effective than others? As shown in Figure 14-6, answering that question requires an understanding of the particular styles that leaders use to make decisions and the behaviors they perform in their leadership role. In terms of decision-making
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TABLE 14-4 Transformational Rhetoric among U.S. Presidents
PRESIDENT TERM REMARK WHICH “I”?
Abraham Lincoln 1861–1865 “Fourscore and seven years ago our forefathers brought forth on this continent, a new nation, con- ceived in Liberty, and dedicated to the proposition that all men are created equal.”
Idealized influence
Franklin Roosevelt 1933–1945 “First of all, let me assert my firm belief that the only thing we have to fear is fear itself—nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance.”
Inspirational motivation
John F. Kennedy 1961–1963 “And so, my fellow Americans . . . ask not what your country can do you for you—ask what you can do for your country. My fellow citizens of the world: Ask not what America will do for you, but what together we can do for the freedom of man.”
Intellectual stimulation
Lyndon Johnson 1963–1969 “If future generations are to remember us more with gratitude than sorrow, we must achieve more than just the miracles of technology. We must also leave them a glimpse of the world as it was created, not just as it looked when we got through with it.”
Idealized influence
Ronald Reagan 1981–1989 “General Secretary Gorbachev, if you seek peace, if you seek prosperity for the Soviet Union and Eastern Europe, if you seek liber- alization: Come here to this gate! Mr. Gorbachev, open this gate! Mr. Gorbachev, tear down this wall!”
Idealized influence
Bill Clinton 1993–2001 “To realize the full possibilities of this economy, we must reach beyond our own borders, to shape the revolution that is tearing down barriers and building new net- works among nations and individu- als, and economies and cultures: globalization. It’s the central reality of our time.”
Intellectual stimulation
Sources: J.S. Mio, R.E. Riggio, S. Levin, and R. Reese, “Presidential Leadership and Charisma: The Effects of Metaphor,” Leadership Quarterly 16 (2005), pp. 287–94; http://www.usa-patriotism.com/quotes/_list.htm.
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FIGURE 14-6 Why Are Some Leaders More Effective Than Others?
Optimal Choice of Decision-Making Styles
Laissez-Faire
Transactional: Passive Management-
by-Exception
Optimal Mix of Transactional and Transformational Behaviors
Optimal Mix of Day-to-Day Behaviors
LEADER EFFECTIVENESS
ConsiderationInitiatingStructure
Facilitative Style
Autocratic Style
Consultative Style
Delegative Style
Transactional: Active Management-
by-Exception
Transactional: Contingent-Reward
Transformational
styles, do they choose the most effective combination of leader and follower control in terms of the autocratic, consultative, facilitative, and delegative styles, particularly considering the impor- tance of the decision and the expertise in the unit? In terms of day-to-day behaviors, do they engage in adequate levels of initiating structure and consideration? Finally, do they utilize an effec- tive combination of transactional leadership behaviors, such as contingent reward, and transfor- mational leadership behaviors, such as idealized influence, inspirational motivation, intellectual stimulation, and individualized consideration?
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HOW IMPORTANT IS LEADERSHIP?
How important is leadership? As with some other topics in organizational behavior, that’s a complicated question because “leadership” isn’t just one thing. Instead, all of the styles and behaviors summarized in Figure 14-6 have their own unique importance. However, transforma- tional leadership stands apart from the rest to some extent, with particularly strong effects in organizations. For example, transformational leadership is more strongly related to unit-focused measures of leadership effectiveness, like the kind shown in the top panel of Table 14-1.106 Units led by a transformational leader tend to be more financially successful and bring higher-quality products and services to market at a faster rate.107 Transformational leadership is also more strongly related to dyad-focused measures of leader effectiveness, like the kind shown in the bottom panel of Table 14-1. Transformational leaders tend to foster leader–member exchange relationships that are of higher quality, marked by especially strong levels of mutual respect and obligation.108
What if we focus specifically on the two outcomes in our integrative model of OB: perfor- mance and commitment? Figure 14-7 summarizes the research evidence linking transforma- tional leadership to those two outcomes. The figure reveals that transformational leadership indeed affects the job performance of the employees who report to the leader. Employees with transformational leaders tend to have higher levels of task performance and engage in higher levels of citizenship behaviors.109 Why? One reason is that employees with transformational leaders have higher levels of motivation than other employees.110 They feel a stronger sense of psychological empowerment, feel more self-confident, and set more demanding work goals for themselves.111 Transformational leaders also help their followers frame stressful situations in such a way that they are better able to cope with hindrance stressors and to be engaged by chal- lenge stressors.112 (See Chapter 5 for a detailed discussion of these stressors.) They also trust the leader more, making them willing to exert extra effort even when that effort might not be immediately rewarded.113
Figure 14-7 also reveals that employees with transformational leaders tend to be more com- mitted to their organization.114 They feel a stronger emotional bond with their organization and a stronger sense of obligation to remain present and engaged in their work.115 Why? One reason is that employees with transformational leaders have higher levels of job satisfaction than other employees.116 One study showed that transformational leaders can make employees feel that their jobs have more variety and significance, enhancing intrinsic satisfaction with the work itself.117 Other studies have shown that charismatic leaders express positive emotions more frequently and that those emotions are “caught” by employees through a sort of “emotional contagion” process.118 For example, followers of transformational leaders tend to feel more optimism and less frustration during their workday, which makes it a bit easier to stay commit- ted to work.119
Although leadership is very important to unit effectiveness and the performance and com- mitment of employees, there are contexts in which the importance of the leader can be reduced. The substitutes for leadership model suggests that certain characteristics of the situation can con- strain the influence of the leader, making it more difficult for the leader to influence employee performance.120 Those situational characteristics come in two varieties, as shown in Table 14-5. Substitutes reduce the importance of the leader while simultaneously providing a direct benefit to employee performance. For example, a cohesive work group can provide its own sort of gov- erning behaviors, making the leader less relevant, while providing its own source of motivation and job satisfaction. Neutralizers, in contrast, only reduce the importance of the leader; they themselves have no beneficial impact on performance.121 For example, spatial distance lessens the impact of a leader’s behaviors and styles, but distance itself has no direct benefit for employee job performance.
The substitutes for leadership model offers a number of prescriptions for a better understand- ing of leadership in organizations. First, it can be used to explain why a leader who seemingly “does the right things” doesn’t seem to be making any difference.122 It may be that the leader’s
14.6 How does leadership affect job performance and orga- nizational commitment?
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FIGURE 14-7 Effects of Transformational Leadership on Performance and Commitment
Sources: T.A. Judge and R.F. Piccolo, “Transformational and Transactional Leadership: A Meta-Analytic Test of Their Relative Validity,” Journal of Applied Psychology 89 (2004), pp. 755–68; J.P. Meyer, D.J. Stanley, L. Herscovitch, and L. Topolnytsky, “Affective, Continuance, and Normative Commitment to the Organization: A Meta-Analysis of Antecedents, Correlates, and Consequences,” Journal of Vocational Behavior 61 (2002), pp. 20–52; and P.M. Podsakoff, S.B. MacKenzie, J.B. Paine, and D.G. Bachrach, “Organizational Citizenship Behaviors: A Critical Review of the Theoretical and Empirical Literature and Suggestions for Future Research,” Journal of Management 26 (2000), pp. 513–63.
Transformational leadership has a moderate positive e�ect on Performance. Employees with transformational leaders tend to have higher levels of Task Performance. They are also more likely to engage in Citizenship Behavior. Less is known about the e�ects of transformational leadership on Counterproductive Behavior.
Transformational leadership has a strong positive e�ect on Commitment. Employees with transformational leaders tend to have higher levels of A�ective Commitment and higher levels of Normative Commitment. Transformational leadership has no e�ect on Continuance Commitment.
Transformational Leadership
Job Performance
Organizational Commitment
Transformational Leadership
Represents a strong correlation (around .50 in magnitude).
Represents a moderate correlation (around .30 in magnitude).
Represents a weak correlation (around .10 in magnitude).
TABLE 14-5 Leader Substitutes and Neutralizers
SUBSTITUTES DESCRIPTION
Task feedback Receiving feedback on performance from the task itself
Training & experience Gaining the knowledge to act independently of the leader
Professionalism Having a professional specialty that offers guidance
Staff support Receiving information and assistance from outside staff
Group cohesion Working in a close-knit and interdependent work group
Intrinsic satisfaction Deriving personal satisfaction from one’s work
NEUTRALIZERS DESCRIPTION
Task stability Having tasks with a clear, unchanging sequence of steps
Formalization Having written policies and procedures that govern one’s job
Inflexibility Working in an organization that prioritizes rule adherence
Spatial distance Being separated from one’s leader by physical space
Source: Adapted from S. Kerr and J.M. Jermier, “Substitutes for Leadership: Their Meaning and Measurement,” Organiza- tional Behavior and Human Performance 22 (1978), pp. 375–403.
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work context possesses high levels of neutralizers and substitutes. Second, it can be used to explain what to do if an ineffective person is in a leadership role with no immediate replacement waiting in the wings.123 If the leader can’t be removed, perhaps the organization can do things to make that leader more irrelevant. Studies of the substitutes for leadership model have been inconsistent in showing that substitutes and neutralizers actually make leaders less influential in the predicted manner.124 What is clearer is that the substitutes in Table 14-5 have beneficial effects on the job performance and organizational commitment of employees. In fact, the beneficial effects of the substitutes is sometimes even greater than the beneficial effects of the leader’s own behaviors and styles. Some leadership experts even recommend that leaders set out to create high levels of the substitutes in their work units wherever possible, even if the units might ultimately wind up “run- ning themselves.”125
APPLICATION: LEADERSHIP TRAINING
Given the importance of leadership, what can organizations do to maximize the effectiveness of their leaders? One method is to spend more time training them. As mentioned in Chapter 8, organizations spend more than $150 billion on employee learning and development, and much of that is devoted to management and supervisory training.126 One training analyst explains the increasing emphasis on leadership training this way: “The biggest problem that companies face today is an acute shortage of midlevel managers. They look around and just don’t have enough qualified people.”127 This is exactly the determination that Walmart’s presi- dent and CEO Bill Simon made when he instituted a 16-week military-style leadership training program. Walmart’s senior vice president of talent development, Celia Swanson, says, “Our analysis showed we were capable of building new stores faster than we could prepare new store managers.”128
Leadership training programs often focus on very specific issues, like conducting more accu- rate performance evaluations, being a more effective mentor, structuring creative problem solving, or gaining more cultural awareness and sensitivity.129 However, training programs can also focus on much of the content covered in this chapter. For example, content could focus on contextual considerations that alter the effectiveness of decision-making styles or particular leader behaviors, such as initiating structure and consideration. This is exactly what Campbell Soup Company is doing through its “CEO Institute”—a two-year program focused on personal leadership develop- ment.130 Farmer’s Insurance puts all of its upper-level executives through a program that gives them direct feedback from their peers on their leadership behaviors. The executives use this infor- mation to create individual leadership development plans.131
It turns out that many training programs focus on transformational leadership content, and research suggests that those programs can be effective.132 One study of transformational lead- ership training occurred in one of the largest bank chains in Canada.133 Managers at all of the branches in one region were randomly assigned to either a transformational training group or a control group. The managers in the training group took part in a one-day training session that began by asking them to describe the best and worst leaders they had ever encountered. Where applicable, the behaviors mentioned as belonging to the best leaders were framed around trans- formational leadership. The transformational dimensions were then described in a lecture-style format. Participants set goals for how they could behave more transformationally and engaged in role-playing exercises to practice those behaviors. The managers then created specific action plans, with progress on those plans monitored during four “booster sessions” over the next month. The results of the study showed that managers who participated in the training were rated as more transformational afterward. More importantly, their employees reported higher levels of organi- zational commitment, and their branches enjoyed better performance in terms of personal loan sales and credit card sales.
14.7 Can leaders be trained to be more effective?
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14.1 Leadership is defined as the use of power and influence to direct the activities of followers toward goal achievement. An “effective leader” improves the performance and well-being of his or her overall unit, as judged by profit margins, productivity, costs, absenteeism, retention, employee surveys, and so forth. An “effective leader” also cultivates high-quality leader–member exchange relationships on a dyadic basis through role taking and role mak- ing processes.
14.2 Leader emergence has been linked to a number of traits, including conscientiousness, disagreeableness, openness, extraversion, general cognitive ability, energy level, stress toler- ance, and self-confidence. Of that set, the last six traits also predict leader effectiveness.
14.3 Leaders can use a number of styles to make decisions. Beginning with high leader control and moving to high follower control, they include autocratic, consultative, facilitative, and delegative styles. According to the time-driven model of leadership, the appropriateness of these styles depends on decision significance, the importance of commitment, leader expertise, the likelihood of commitment, shared objectives, employee expertise, and team- work skills.
14.4 Most of the day-to-day leadership behaviors that leaders engage in are examples of either initiating structure or consideration. Initiating structure behaviors include initiation, orga- nization, and production sorts of duties. Consideration behaviors include membership, integration, communication, recognition, and representation sorts of duties.
14.5 Transactional leadership emphasizes “carrot-and-stick” approaches to motivating employ- ees, whereas transformational leadership fundamentally changes the way employees view their work. More specifically, transformational leadership inspires employees to commit to a shared vision or goal that provides meaning and challenge to their work. The specific behaviors that underlie transformational leadership include the “Four I’s”: idealized influ- ence, inspirational motivation, intellectual stimulation, and individualized consideration.
14.6 Transformational leadership has a moderate positive relationship with job performance and a strong positive relationship with organizational commitment. It has stronger effects on these outcomes than other leadership behaviors.
14.7 Leaders can be trained to be effective. In fact, such training can be used to increase trans- formational leadership behaviors, despite the fact that charisma is somewhat dependent on personality and genetic factors.
TAKEAWAYS
KEY TERMS
• Leadership p. 444 • Leader–member exchange
theory p. 444 • Role taking p. 444 • Role making p. 444 • Leader effectiveness p. 446 • Leader emergence p. 446 • Autocratic style p. 447 • Consultative style p. 448 • Facilitative style p. 448 • Delegative style p. 448
• Time-driven model of leadership p. 449 • Initiating structure p. 452 • Consideration p. 452 • Life cycle theory of leadership p. 453 • Readiness p. 453 • Telling p. 453 • Selling p. 455 • Participating p. 455 • Delegating p. 455 • Transformational leadership p. 456 • Laissez-faire leadership p. 457
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14.1 Before reading this chapter, which statement did you feel was more accurate: “Leaders are born” or “Leaders are made”? How do you feel now, and why do you feel that way?
14.2 The time-sensitive model of leadership argues that leaders aren’t just concerned about the accuracy of their decisions when deciding among autocratic, consultative, facilitative, and delegative styles; they’re also concerned about the efficient use of time. What other consid- erations could influence a leader’s use of the four decision-making styles?
14.3 The time-sensitive and life cycle models of leadership both potentially suggest that leaders should use different styles and behaviors for different followers. Can you think of any nega- tive consequences of that advice? How could those negative consequences be managed?
14.4 Consider the four dimensions of transformational leadership: idealized influence, inspi- rational motivation, intellectual stimulation, and individualized consideration. Which of those dimensions would you respond to most favorably? Why?
14.5 Can you think of any potential “dark sides” to transformational leadership? What would they be?
DISCUSSION QUESTIONS
When she gets out of bed, what does Mary Barra (CEO of GM) think about? “I spend a lot of early mornings thinking about executing our plan quickly. The big thing I worry about is speed,” says Barra. CFO Chuck Stevens agrees, highlighting a statement from the faulty ignition switch internal investigation about the culture at GM, “No sense of urgency. No accountability or responsibility. A siloed mentality.” Barra has reacted quickly and with force to make culture change a reality by implementing a number of initiatives including “GM 2020,” which is a program designed to create cross-functional labs throughout the company. Barra has also pushed hard to create a new culture of speed by creating a year-long transformational leadership course for upper-level executives that Barra personally leads. It’s not focused on company strategy, but rather the interpersonal skills she believes are necessary to create change. HR chief John Quat- trone says, “Mary believes that if we change the behaviors [of top managers], people who work for us will see that and emulate it.”
Barra’s major vision for GM is to lead in safe autonomous driving. This puts them directly up against the fast-moving cultures of Google, Uber, and Tesla. Barra believes GM’s recent acquisi- tion of Cruise Automation ($581 million) puts them square in the driver’s seat. After a success- ful, high-profile test of an autonomous Chevy Bolt (with Barra riding in the back seat), Barra told a large group of Cruise employees, “If somebody [at GM] says you can’t have something, or you can’t do something, or it’s going to take this much time, and it doesn’t make sense to you, challenge them. I want you to take the energy and speed and how you look at doing things and drive it into the core of GM.”
CASE: GENERAL MOTORS
• Transactional leadership p. 457 • Passive management-by-exception p. 457 • Active management-by-exception p. 457 • Contingent reward p. 457 • Idealized influence p. 458 • Inspirational motivation p. 460
• Intellectual stimulation p. 460 • Individualized consideration p. 460 • Substitutes for leadership model p. 464 • Substitutes p. 464 • Neutralizers p. 464
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GM believes that they have the advantage. GM product chief Mark Reuss says, “The piece that is not well understood outside of the automotive industry is how hard it is to take technology and integrate it into a car. It seems like you should be able to layer it in and have it work and that would be great. Right. The effort to integrate that into the car is equal to or more than the tech- nology itself. A car has to work right every time, all the time.” So far, the technology companies have spent billions of dollars in development and have little to show for it. Still, Barra is not will- ing to bask in success for long. Onstage at GM’s headquarters she told her group, “Don’t confuse progress with winning. Are you doing what you can? Or are you doing what it takes to win?”
14.1 Do you think GM can outduel the technology companies for safe autonomous driving vehicles?
14.2 Would you consider Mary Barra to be the prototypical transformational leader? In what ways does she fit or not fit that model?
14.3 Given GM’s history, why does Barra put a premium on her executives’ leadership behaviors?
Source: M. DeBord. “Mary Barra Is About to Become the Most Influential CEO in GM History,” BusinessInsider.com, February 17, 2017: http://www.businessinsider.com/mary-barra-most-influential-ceo-in-gm-history-2017-2; C. Fussman. “What I’ve Learned: Mary Barra,” Esquire.com, April 26, 2016: http://www.esquire.com/lifestyle/cars/interviews/a44325/ what-ive-learned-mary-barra/; P. Ingrassia. “Hail Mary,” Fortune, September 15, 2016, pp. 84–89; B. Luscombe. “13 Ques- tions with Mary Barra,” Time, June 2, 2016: http://time.com/4354740/mary-barra/; and R. Tetzeli. “The Accelerators,” Fast Company, November 2016, pp. 68–74, 100.
EXERCISE: TAKE ME TO YOUR LEADER
The purpose of this exercise is to explore the commonalities in effective leadership across dif- ferent types of leaders. This exercise uses groups, so your instructor will either assign you to a group or ask you to create your own group. The exercise has the following steps:
14.1 Imagine that a space alien descended down to Earth and actually uttered the famous line, “Take me to your leader!” Having read a bit about leadership, your group knows that lead- ers come in a number of shapes and sizes. Instead of showing the alien just one leader, your group decides it might be beneficial to show the alien a whole variety of leaders. Each member should choose one type of leader from the table to focus on (each member must choose a different type). Try to choose examples that are personally interesting but that also maximize the diversity within the group.
Orchestra Conductor Fashion Designer Drummer in Rock Band
Coach Personal Tax Accountant Point Guard in Basketball
Film Director Nightclub DJ Bartender
College Professor Fitness Trainer Sheriff
Talk-Show Host Prison Guard Millionaire Philanthropist
Stockbroker Real Estate Broker Agent
Psychotherapist MBA Program Director Auditor
Campaign Manager Construction Project Supervisor CEO
Diplomat Sports Color Commentator Vice President of Marketing
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14.2 Individually, jot down some thoughts that highlight for the alien what is truly distinctive about “leadership” for this type of leader. For example, if you were showing the alien a coach, you might call attention to how coaches cannot control the game itself very much but instead must make their influence felt on the practice field by instilling skills while being anticipatory in their thinking. You might also call attention to how coaches need to be cre- ative and adapt quickly during the game itself.
14.3 Share the thoughts you’ve jotted down in your groups, going from member to member, with each person describing what “leadership” means for the given types of leaders.
14.4 Once all these thoughts about the various types of leaders have been shared, think about whether there are certain traits, styles, or behaviors that are universal across all the types. For example, maybe all of the types have some kind of organizing quality to them (e.g., lead- ers need to be organized, leaders need to do things to help others be organized). Create a list of four “leadership universals.”
14.5 Now consider the situational challenges faced by the types of leaders you discussed, includ- ing challenges rooted in the task, their followers, or the surrounding work context. For example, the fact that the coach has little direct impact on the game is a situational chal- lenge. Do other leader types also grapple with lack of direct control? Create a list of four “situational challenges” faced by multiple types of leaders.
14.6 Elect a group member to write the group’s four universals and four challenges on the board.
14.7 Class discussion (whether in groups or as a class) should center on whether the theories described in the chapter discuss some of the leadership universals identified by the groups. Are there theories that also include some of the situational challenges uncovered? Which leadership theory seems best equipped for explaining effective leadership across a wide vari- ety of leader types?134
14.1 Yukl, G. Leadership in Organizations, 4th ed. Englewood Cliffs, NJ: Prentice Hall, 1998.
14.2 Ibid.
14.3 Ibid.
14.4 Ibid.
14.5 Dansereau, F. Jr.; G. Graen; and W.J. Haga. “A Vertical Dyad Linkage Approach to Leadership within Formal Organiza- tions: A Longitudinal Investigation of the Role Making Pro- cess.” Organizational Behavior and Human
Performance 13 (1975), pp. 46–78; Graen, G.; M. Novak; and P. Sommerkamp. “The Effects of Leader–Member Exchange and Job Design on Productiv- ity and Satisfaction: Testing a Dual Attach- ment Model.” Organi- zational Behavior and Human Performance 30 (1982), pp. 109–31; Graen, G.B., and M. Uhl-Bien. “Relationship-Based Approach to Leader- ship: Development of Leader–Member
Exchange (LMX) The- ory of Leadership over 25 Years: Applying a Multi-Level Multi- Domain Perspective.” Leadership Quarterly 6 (1995), pp. 219–47; and Liden, R.C.; R.T. Sparrowe; and S.J. Wayne. “Leader– Member Exchange Theory: The Past and Potential for the Future.” In Research in Personnel and Human Resources Manage- ment, Vol. 15, ed. G.R. Ferris. Greenwich, CT: JAI Press, 1997, pp. 47–119.
ENDNOTES
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