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Chapter 15
Leadership and Change
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Chapter Outline
Introduction
The rational approach to organizational change
The emotional approach to organizational change: Charismatic and transformational leadership
Bass’s theory of transformational and transactional leadership
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Leadership and Change
There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain of success, than to take the lead in the introduction of a new order of things
Niccolò Machiavelli, writer
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Introduction
Although leading change is perhaps the most difficult challenge facing any leader, it may be the best differentiator of managers from leaders and of mediocre from exceptional leaders
Best leaders are those who:
Recognize the situational and follower factors inhibiting or facilitating change
Paint a compelling vision of the future
Formulate and execute a plan that moves their vision from a dream to reality
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The Rational Approach to Organizational Change
Beer’s model
Road map for leadership practitioners who want to implement an organizational change initiative
Diagnostic tool for understanding why change initiatives fail
Amount of change, C, equals the product of dissatisfaction, D, model, M, and process, P, greater than resistance, R
Product of D, M, and P is a multiplicative function
Asserts that organizational change is a systematic process and that large-scale changes can take months or years to implement
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Dissatisfaction, D
Followers who are relatively content are not apt to change
Malcontents are more likely to do something to change the situation
Follower’s emotions are the fuel for organizational change, and change often requires a considerable amount of fuel
The key for leadership practitioners is to increase dissatisfaction to the point where followers are inclined to take action, but not so much that they decide to leave the organization
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Model, M
Has four components
Environmental scanning
Vision
Setting of new goals to support the vision
Identifying needed system changes
Systems thinking approach: Views the organization as a set of interlocking systems where changes in one system can have intended and unintended consequences for other parts of the organization
Siloed thinking: Involves optimizing one part of the organization at the expense of suboptimizing the organization’s overall effectiveness
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Figure 15.1: The Components of Organizational Alignment
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Process, P
Change initiative becomes tangible and actionable because it consists of the development and execution of a change plan
Change will occur only when the action steps outlined in the plan are actually carried out
The best way to get followers committed to a change plan is to have them create it
Leaders who address shifts in styles and inappropriate behaviors swiftly and consistently are more likely to succeed with their change initiatives
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Resistance, R
Expectation-performance gap: Difference between initial expectations and reality
Can lead to resistance if not managed properly, causing followers to revert back to old behaviors and systems to get things done
Leaders can help followers deal with their frustration toward changes by:
Setting realistic expectations
Demonstrating a high degree of patience
Ensuring that followers gain proficiency with the new systems and skills as quickly as possible
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Figure 15.2: The Expectation-Performance Gap
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Figure 15.3: Reactions to Change, S A R A Model
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Figure 15.4: The Rational Approach to Organization Change and the Interactional Framework
Jump to Figure 15.4: The Rational Approach to Organization Change and the Interactional Framework, Appendix
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The Emotional Approach to Organizational Change: Charismatic Leadership
Leaders are passionate, driven individuals who can paint a compelling vision of the future
Generate high levels of excitement among followers and build strong emotional attachments with them through the vision
Combination of the vision, excitement, and personal attachments compel followers to put in greater effort to meet organizational or societal challenges
Charismatic movements can result in positive or negative organizational or societal changes
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Max Weber’s Types of Authority Systems
Traditional authority system: Traditions or unwritten laws of the society dictate who has authority and how this authority can be used
Legal-rational authority system: People possess authority because of the laws that govern the position occupied
Charismatic authority system: People derive authority because of their exemplary characteristics
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James MacGregor Burns’s Types of Leaderships
Transactional leadership
Occurs when leaders and followers are in some type of exchange relationship to get needs met
Transformational leadership
Changes the status quo by appealing to followers’ values and their sense of higher purpose
Leaders are adept at reframing issues
All transformational leaders are charismatic, but not all charismatic leaders are transformational
Both charismatic and transformational leaders strive for organizational or societal change
Transformational leaders are always controversial
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Newer Theories of Charismatic or Transformational Leadership
Conger and Kanungo’s stage model: Differentiates charismatic from noncharismatic leaders
Charismatic leaders assess the current situation and pinpoint problems with the status quo, articulate a vision, and build trust in their vision by personal example, risk taking, and their total commitment to the vision
Theory by House and his colleagues: Describes how charismatic leaders achieve higher performance by changing followers’ self-concepts
Avolio and Bass’s theory: Views transactional and transformational leadership as independent leadership dimensions
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Figure 15.5: Factors Pertaining to Charismatic Leadership and the Interactional Framework
Jump to Figure 15.5: Factors Pertaining to Charismatic Leadership and the Interactional Framework, Appendix
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Followers’ Responses to Change
Malicious compliance: This occurs when followers either ignore or actively sabotage change requests
Compliance: This takes place when followers do no more than abide by the policies and procedures surrounding change requests
Cooperation: Followers willingly engage in those activities needed to make the change request become reality
Commitment: Followers embrace change requests as their own and often go the extra mile to make sure work gets done
Charismatic and transformational leaders are adept at getting followers committed to their vision of the future
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Situational Characteristics
Situational factors play an important role in determining whether a leader is perceived as charismatic
Crises
Social networks
Restructuring or organizational downsizing
Time
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Concluding Thoughts about the Characteristics of Charismatic and Transformational Leadership
Charismatic leadership is most fully understood when one considers how leader and situational factors affect the attribution process
It is unlikely that all the characteristics of charismatic leadership need to be present before charisma is attributed to a leader
Charismatic leadership can happen anywhere
Charismatic leadership is a two-way street between leaders and followers
Evidence shows that charismatic or transformational leaders are more effective than their noncharismatic counterparts
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Bass’s Theory of Transformational and Transactional Leadership
Transformational leaders are more successful because of followers’ heightened emotional levels and willingness to work toward accomplishing the leader’s vision
Transactional leaders motivate followers by setting goals and promising rewards for desired performance
Transformational and transactional leadership comprise two independent leadership dimensions
Bass developed the Multifactor Leadership Questionnaire, or M L Q, which is a 360-degree feedback instrument that assesses five transformational and three transactional factors and a nonleadership factor
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Research Results of Transformational and Transactional Leadership
Transformational leadership is seen in all countries, institutions, and organizational levels, but it is more prevalent in public institutions and at lower organizational levels
Transformational leadership is a significantly better predictor of organizational effectiveness than transactional or laissez-faire leadership
Laissez-faire leadership is negatively correlated with effectiveness
Leaders can systematically develop their transformational and transactional leadership skills
Charisma ultimately exists in the eyes of the beholder
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Table 15.3: Correlations between Five Factor Model Dimensions and Charismatic Leadership Characteristics for 125 Corporate C E Os and Presidents
| Personality Dimension | Visionary Thinking | Empowering Others | Inspiring Trust | High-Impact Delivery |
| Extraversion | .32 | .33 | .16 | .47 |
| Conscientiousness | −.08 | −.01 | .06 | −.04 |
| Agreeableness | .02 | .52 | .48 | .35 |
| Neuroticism | −.03 | .29 | .38 | .22 |
| Openness to experience | .47 | .30 | .14 | .40 |
Source: D. Nilsen, “Using Self and Observers’ Ratings for Personality to Predict Leadership Performance,” unpublished doctoral dissertation, University of Minnesota, Minneapolis, 1995.
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Summary
Rational approach to organizational change emphasizes analytic, planning, and management skills
Emotional approach to organizational change emphasizes leadership skills, leader-follower relationships, and the presence of a crisis to drive organizational change
Both the rational and the emotional approaches can result in organizational change, but the effectiveness of the change depends on which approach leadership practitioners are most comfortable with and the skill with which they can carry it out
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Appendices
Figure 15.1: The Components of Organizational Alignment, Appendix
There are five ovals that are arranged in such a manner that they form a pentagon. All the ovals are connected to each other by lines. From the top, in a clockwise direction, the ovals are labeled vision, culture, structure, systems, and capabilities. The oval labeled vision has content inside it that reads strategic goals. The oval labeled culture has two points inside it that read norms and shared values. The oval labeled structure has three points inside it that read span of control, team composition, and hierarchy. The oval labeled systems has four points inside it that read accounting, sales, H R, and I T. The oval labeled capabilities has two points inside it that read technical and leadership.
Jump back to Figure 15.1: The Components of Organizational Alignment
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Figure 15.2: The Expectation-Performance Gap, Appendix
The y-axis is labeled performance. The x-axis is labeled time. The curve in the graph begins from the center of the y-axis and remains constant for some time until a change initiative is implemented. At this point, it splits into two. One of the curves slopes downward for some time and then increases sharply. This curve is labeled actual performance. The other curve increases sharply and is labeled expectations. The space between the curves expectations and actual performance is labeled gap. The part of the curve that remains constant initially is labeled status quo.
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Figure 15.3: Reactions to Change, S A R A Model, Appendix
The y-axis is labeled emotional level. The x-axis is labeled time. It has three bell curves that overlap each other. The first curve represents top leaders. There are four labels along this curve. A point at the beginning of the curve is labeled shock, a point on the upward slope is labeled anger, a point on the downward slope is labeled rejection, and a point at the ending of the curve is labeled acceptance. The second curve represents middle managers, and it has circles throughout its length. The third curve represents individual managers, and it has crosses throughout its length. There is a shift in time among the three curves. When the top leaders are in the acceptance stage, the middle managers are in the rejection phase and the individual contributors are transitioning from the anger phase to the rejection phase.
Jump back to Figure 15.3: Reactions to Change, S A R A Model
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Figure 15.4: The Rational Approach to Organization Change and the Interactional Framework, Appendix
It has three circles that intersect each other in such a manner that some area of one circle is shared with another. The circle on the top is labeled leader, the circle on the bottom-left side is labeled followers, and the circle on the bottom-right side is labeled situation. The area in the leader circle that does not overlap with any other circle contains six points. The points read environmental scans, vision, goals, change plan, systems versus siloed thinking, and leadership and management capabilities. The area in the followers circle that does not overlap with any other circle contains five points. The points read dissatisfaction; resistance; S A R A model; loss of power, competence, identity, rewards, and relationships; and technical slash functional capabilities. The area in the situation circle that does not overlap with any other circle contains nine points. The points read crisis, consumer preferences, market conditions, societal shifts, political and legal challenges, competitive threats, organizational structure, organizational systems, and organizational culture.
Jump back to Figure 15.4: The Rational Approach to Organization Change and the Interactional Framework
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Figure 15.5: Factors Pertaining to Charismatic Leadership and the Interactional Framework, Appendix
It has three circles that intersect each other in such a manner that some area of one circle is shared with another. The circle on the top is labeled leader, the circle on the bottom-left side is labeled followers, and the circle on the bottom-right side is labeled situation. The area in the leader circle that does not overlap with any other circle contains four points. The points read vision, rhetorical skills, image and trust building, and personalized leadership. The area in the followers circle that does not overlap with any other circle contains four points. The points read identification with the leader and the vision; heightened emotional levels; willing subordination to the leader; and feelings of empowerment. The area in the situation circle that does not overlap with any other circle contains two points. The points read crisis and task interdependence. Outside the circles, there is a label that reads outcomes. Four points are listed below this label. The points read social or cultural revolutions, higher levels of effort, greater follower satisfaction, and increased group cohesiveness.
Jump back to Figure 15.5: Factors Pertaining to Charismatic Leadership and the Interactional Framework
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