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Leadership involves in�luencing others to achieve a common goal, and with entrepreneurial leaders this often means doing things differently and often innovatively. This was the case with Steve Jobs at Apple®, Sam Walton of Walmart, Herb Kelleher at Southwest Airlines, and Oprah Winfrey at her media �irm Own Your Power Communications Inc.®, to name a few. More recently, other ordinary individuals became extraordinary leaders. They include founders and CEOs
1 Leadership: Persons, Processes, and Systems
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Learning Outcomes
After completing this chapter, you should be able to:
1. De�ine leadership and describe how followers are important to leaders and leadership.
2. Explain the organizing framework of leadership as persons, processes, and systems.
3. Explain why leadership matters.
4. Discuss the relationship between natural leadership traits and situational factors.
5. Describe the different roles of leadership and management.
6. Understand your own leadership qualities.
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Meet Three Leadership Experts
of businesses like Salesforce, Airbnb, and Net�lix®. These entrepreneurs led followers to transform industries and societies.
For example, Salesforce’s Marc Benioff guides his Fortune 500 company by four core values: trust, customer success, innovation, and equality. Benioff wanted a company that not only offered great products—he wanted to improve the world. Benioff led Salesforce to commit to social responsibility, a form of self-regulation in which �inancial pro�it cannot take priority over social or environmental impacts (Mish & Scammon, 2010).
When Salesforce launched in 1999, it was among the pioneers of cloud computing and the software as a service (SaaS) business model. For this, Forbes named Benioff "Innovator of the Decade.” Benioff believed the SaaS model would replace software as a product, essentially transforming software from discs in a box to a service residing in the cloud and accessed on the Internet. In 2018, Salesforce surpassed $10 billion in annual revenue and was ranked �irst in Fortune magazine’s “100 Best Companies to Work For” (Salesforce, 2019).
But consider this: The �irst product from Sony, led by cofounder Akio Morito, was a rice cooker that burned rice. Bill Gates dropped out of Harvard before starting Microsoft (Truong, 2011). Both companies have been named to the 2019 list of “World’s Most Ethical Companies”—as has Salesforce.
Sometimes we get swept away in the romance of success stories; in reality, leaders and successful businesses require many hours of very hard work and struggle. But strong leadership is generated from a wide and complex variety of factors, not the least of which are persistence and a willingness to be and do better.
As a �ield of study, leadership includes theories and practices that continue to evolve over time. Theories provide a system of ideas based on principles; practices are activities and methods that have been experienced. Both work together. And it seems in this globalized, high-tech 21st century that the cycle of change is becoming ever faster as the interaction between leadership theory and practice also quickens through the exchange of ideas and experience in social media, blogs, as well as academic journals. This book explores the evolution of leadership in order to better inform and prepare you to be an effective, knowledgeable leader.
The rest of this chapter gets us started on this exploration of leadership. We begin by trying to establish a working de�inition of leadership and by trying to understand leadership in the dynamic framework of people, processes, and systems. Then we touch on some of the core questions regarding leadership, such as why it matters, how leaders are created, and what is leadership’s relationship to management. We conclude with a self-assessment of your own leadership qualities.
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Elon Musk has proven his ability to attract followers across the multiple companies he has founded, including two he sold before founding SpaceX, an aerospace manufacturer and space transport services company.
1.1 De�ining Leadership Leadership is the ability to in�luence followers to achieve common goals through shared purposes (Rost, 1993; Rost & Barker, 2000). Leadership is both art and science. There is no exact mathematical formula for being an effective leader; leaders in hospitals, banks, retail stores, government agencies, the military, and classrooms have the ability to in�luence others around common goals and shared purposes to achieve organizational visions and missions. There are, however, some characteristics and behaviors that are constant—even measurable—among in�luential and effective leaders. Kouzes and Posner (2012) found that leaders’ actions—that is, “commitment, loyalty, motivation, pride, and productivity” (p. 25)—contribute more to employees’ workplace engagement than any other single variable.
The ability to in�luence others is also a distinctive part of the de�inition of leadership; “leaders are in�luential in determining the fate of their organizations through their decisions, strategies, and in�luence on others” (Dinh et al., 2014). In�luence refers to a person’s ability to affect or to change the actions, behaviors, and opinions of others, and sometimes of industries and even societies, as Elon Musk is doing. Leaders motivate others to perform certain tasks and may even in�luence them to act ethically (Provitera, 2003; Schaubroeck et al., 2012). An example is Mary Barra, CEO of General Motors since 2014. In her �irst year as CEO, Barra led the organization through the recall of more than 30 million cars due to a faulty ignition switch. Under her leadership, she shifted the organization from one characterized by internal con�lict to one of productive collaboration (DeBord, 2018).
Followers are those who are in�luenced by leadership; they are not necessarily subordinates, but, depending on the level and structure of the organization, can be peers, team leaders, vice presidents, directors, and supervisors. We use the term subordinates generically and interchangeably with the term followers for the remainder of the book. Leaders need followers in order to help them achieve their goals; it is dif�icult, after all, to accomplish much on one’s own. Likewise, followers need the direction that leaders provide. This critical relationship requires mutual trust, respect, and an understanding that the two groups need each other; it is not a mindless relationship. Just as there are effective and ineffective leaders, there are effective and ineffective followers. Leaders should not assume they are “better” than followers, and followers should not simply be “yes people” (Bennis, 2004). In fact, the qualities of effective leaders are often the same as those of high-performing followers. As you read through the text, think about the situations in which you have the opportunity to be a leader or a follower.
The phrases “common goals” and “shared purposes” reveal the need for unity in the leader–follower relationship. “Common goals” refers to the desired future or end state of the organization. Common goals help leaders and followers orient themselves in the same direction. “Shared purposes” is similar in meaning but speaks more to how leaders and followers arrive at common goals. Imagine a rowboat with two oars, one for the leader and the other for the follower. The two rowers need to row in the same direction, otherwise the rowboat will simply turn in circles. Thus, even though a leader may set the goal, followers must agree with it; and, the common goal must supersede the individual goals. In our rowboat example, if one rower’s goal is to row as fast as possible while the other rower’s goal is to row at a deliberate pace, the rowboat will struggle to reach its intended destination even though the two are rowing in the same direction. A group can have multiple common goals, and they may be as simple as completing a task before lunch or as complex as becoming an industry’s market leader and increasing productivity and pro�itability.
It is important to note that for decades scholars and researchers have dedicated time to the broader study of effective leadership. From this research, we’ve come
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After Mary Barra became CEO of General Motors, she guided the company through a �inancial crisis and led its transition to a focus on electric vehicles and productive collaboration.
to learn much more about the importance of context, interpersonal dynamics, communication skills, gender, culture, generational divides, and so on.
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1.2 Leadership in the Context of Persons, Processes, and Systems: A Multidimensional Perspective
Figure 1.1 shows us an inclusive model that incorporates the importance of a leader’s in�luence and actions to achieve common goals through shared purposes. This framework is referred to throughout the text, and it shows that leaders do not act or in�luence others in a vacuum. All leaders and their followers work within the context of organizational systems that call for the different processes and skills needed to accomplish work in different situations.1 (http://content.thuzelearning.com/books/Weiss.6184.19.1/sections/ch01sec1.2#chapter1note1)
Figure 1.1 takes into account broader, integrative contexts, namely “persons, processes, and systems” (Avolio, 1999, 2007; Dinh et al., 2014). Persons count. In other words, leaders and followers must understand their personality traits and behaviors before they’re able to start exerting effective in�luence. As the saying goes, “If you can’t lead yourself, you can’t lead others.” A classic Harvard Business Review article (Goffee & Jones, 2000) entitled “Why should anyone be led by you?” also supports this point. Individual leaders, in particular, and also followers, stakeholders, and stockholders exert in�luence on organizational goals and performance.
Figure 1.1: Persons, processes, and systems
All persons—leaders as well as followers—work within the context of organizational systems that call for the different processes and skills needed to accomplish work in different situations. This is the leadership context.
Processes also matter. Leaders rely on and use strategic communication, values, decision making, negotiation, con�lict resolution, and problem-solving skills, which enable followers and others to guide and keep organizations on course. Dinh et al. (2014) argued that “By understanding how leaders in�luence underlying processes that lead to organizational outcomes, scholars can also develop integrative perspectives that unify diverse theories and stimulate novel leadership research in the new millennium.”
Systems (strategies, structures, cultures) are both partially created by leaders and also serve as the contexts in which leaders align persons and processes toward goal attainment. “[L]eaders are embedded within organizational systems that are continually evolving, creating a more complex picture for understanding how individuals think, feel, and behave in response to changing events” (Dinh et al., 2014, p. 55).
When you are hired into an organization or company and are assigned a supervisor, you are already involved in the leader–follower in�luence process within a system. It is helpful to understand the larger landscape of organizations
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from a person, process, and system perspective to see the different interconnecting layers of leadership and know where you are located in that landscape. Figure 1.1 illustrates such a landscape. It also presents an overview of this text’s coverage of the �ield of leadership. Building on the previous discussion, leaders do seek to in�luence followers and they do so in organizational settings through processes that relate to leadership styles and ways of communicating, in�luencing, and managing people to accomplish goals and objectives.
Individuals, followers, teams, and groups are the starting point for understanding leadership. Whether an organization is as large and complex as Microsoft®, General Electric, or Apple or as small as a start-up, it is still the founders, current CEOs, and other individual leaders whose personalities, histories, visions, ethics, values, and missions direct, guide, and in�luence those inside and outside the organization. It is also to leverage leaders who are hired, promoted, and often times �ired when performance and other goals are derailed or fail to work. Relationships are also at the heart of leadership. Whether in dyads, triads, groups, or teams, in one or multiple locations around the globe, it is leaders who in�luence individuals in corporations, institutions, and nations.
Leaders also in�luence followers and constituencies through processes—that is, procedures, mechanisms, methods, practices, roles, and styles. Leaders use different styles, roles, and methods to communicate, negotiate, problem solve, resolve con�licts, and innovate depending on the nature and requirements of particular environments, tasks, individuals, and groups. One size (or “process”) does not �it all. Learning leadership styles that �it different followers, tasks, and organizational settings is a major part of leadership effectiveness.
Leaders are charged with identifying strategies, goals, and the dominant culture (ethics and values) within their teams in order to guide and navigate an organization’s overall direction and performance. These dimensions are also the systems within an organization. How effectively leaders and their teams “�it” the overall strategies, goals, and culture to an organization’s external environment determines the effectiveness of the leader and these leadership systems. The persons and processes of leadership are integral parts of the systems. So, taken together, this multidimensional approach involves understanding the persons, processes, and systems of leadership in organizations, and how these dimensions �it (or not) to affect their environments. The Competing Values Framework (CVF) discussed at the end of this chapter offers examples of how these systems work together to respond to the external environmental demands of leaders and organizations.
Because leadership involves relationships, understanding your own style and that of leaders and followers with whom you will be working is important to your success. After reading and studying the �irst few chapters of this book, you will be able to identify and evaluate your own leadership style and the style of others. You will begin to see how your style and others’ styles �it (or not) with different organizational strategies and cultures. You will also learn to evaluate the effectiveness of both your and your leader’s personal and professional style from a full range leadership model (McCleskey, 2014), which is discussed later in this book.
Systems, from this view, refers to particular perspectives and mind-sets, or “mental models,” that leaders and team members in organizational departments form as part of their culture. As new employees, learning to “read” and discover these perspectives is important because it will help you “�it” within a team. You will also be able to question assumptions and contribute to the effectiveness and ef�iciency of a team after you understand how members’ beliefs and values impact work assignments. Your own knowledge and perspective about how an organization’s culture �its (or not) with its strategy and stated ethics will become more evident. Leaders’ and followers’ perspectives within and across departments in organizations differ and may or may not always be in alignment with the larger organization’s direction, mission, and values. After you read and study this text, you will get a more realistic picture of what type of organizational culture, strategy, and system you prefer and what type best suits your current emerging leadership style. Keep Figure 1.1 in mind as a road map while reading the text.
Note 1. (http://content.thuzelearning.com/books/Weiss.6184.19.1/sections/ch01sec1.2#chapter1note1-backlink) Avolio, B. (1999). Full leadership development. Thousand Oaks, CA: Sage Publications. This section is based on Avolio’s book.
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1.3 Why Leadership Matters The need for leadership is clear. Think of situations in your life—or even in the news—where the person or persons in charge made all the difference, whether it was a corporate scandal, a tragic event, or just a group project. Or perhaps consider how simply setting a positive example—going to college, doing the right thing, championing a cause—can motivate others. Much of this text examines leadership in an organizational setting, but leaders are everywhere; and leadership practices and development are in demand now more than ever before.
The following excerpt provides a brief overview of the current changing business environment in which leaders are needed and where they work. A recent survey of 2,532 business and human resources (HR) leaders in 94 countries around the world identi�ied the following urgent top concerns: “leadership, retention and engagement, the reskilling of HR (human resources), and talent acquisition. . . .”1 (http://content.thuzelearning.com/books/Weiss.6184.19.1/sections/ch01sec1.3#chapter1note2) The report states
Building global leadership is by far the most urgent. . . . Companies see the need for leadership at all levels, in all geographies, and across all functional areas. . . . In a world where knowledge doubles every year and skills have a half-life of 2.5 to 5 years, leaders need constant development. This ongoing need to develop leaders is also driven by the changing expectations of the workforce and the evolving challenges businesses are facing, including two major themes underlying this year’s trends: globalization and the speed and extent of technological change and innovation.2 (http://content.thuzelearning.com/books/Weiss.6184.19.1/sections/ch01sec1.3#chapter1note3)
Leaders must create and manage change while dealing with the economic effects of an expanding global economy, unstable political events, an increasingly diverse workforce, unpredictable consumer markets, misconduct, and sometimes corruption. Organizational responses to these changes include �latter structures, virtual and dispersed teams, and increased use of information technologies for faster and more frequent communication, often while having to “do more with less.” Organizational leaders are called on to reimagine, recreate and reenergize a sense of purpose, mission, values, and practices in a multigenerational workforce who require constant development to stay competitive and be successful. So, are you ready to be a leader? Take Assessment 1.1 to get a better sense of your leadership readiness.
Assessment 1.1: Are You Ready to Be a Leader?
Instructions
Indicate the extent to which you agree with each of the following statements, using the following scale: 1 = strongly disagree, 2 = disagree, 3 = neither agree nor disagree, 4 = agree, and 5 = strongly agree
1. I am energized when people count on me for ideas.
2. As a practice, I ask people provocative questions when we are working on projects together.
3. I take delight in complimenting people that I work with when progress is made.
4. I �ind it easy to be the cheerleader for others, when times are good and when times are bad.
5. Team accomplishment is more important to me than my own personal accomplishments.
6. People often take my ideas and run with them.
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7. When involved in group projects, building team cohesiveness is important to me.
8. When involved in group projects, coaching others is an activity that I gravitate toward.
9. I �ind pleasure in recognizing and celebrating the accomplishments of others.
10. When involved in group projects, my team members’ problems are my problems.
11. Resolving interpersonal con�lict is an activity that I enjoy.
12. When involved in group projects, I frequently �ind myself to be an idea generator.
13. When involved in group projects, I am inclined to let my ideas be known.
14. I �ind pleasure in being a convincing person.
Scoring and Interpretation
Sum your responses to the 14 questions and then divide that number by 14. Your score should fall between a low of 1 and a high of 5. A tentative interpretation of your scoring is as follows:
4.5 and higher implies a high motivation for leadership.
3.0 implies uncertainty about your motivation for leadership.
1.75 and lower implies a low motivation for leadership.
My leadership motivation (readiness) score is ____________________.
Source: Pierce, J. and Newstrom, J.W. Leaders and the Leadership Process, 4th ed, p. 67. Reprinted by permission of McGraw-Hill Education. Reprinted by permission of The McGraw-Hill Companies, Inc.
Notes 1. (http://content.thuzelearning.com/books/Weiss.6184.19.1/sections/ch01sec1.3#chapter1note2-backlink) Barry, L., C. Benko, D. Foley, J. Hagel, D. Helfrich, T. Hodson, S. Holland, M. Stephan, H. Stockton, A. van Berkel, B. Walsh, and J. Wong, (Eds). (2014). Global human capital trends, engaging the 21st century workforce. A report by Deloitte Consulting LLP and Bersin by Deloitte. Note: Different parts of this introduction are based on this report.
2. (http://content.thuzelearning.com/books/Weiss.6184.19.1/sections/ch01sec1.3#chapter1note3-backlink) Ibid., p. 5.
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Is leadership something that one is born with, or is it something that can be learned over time? Barbara Brady, PhD, Tara Martinez, and Brian Hemphill, PhD, discuss the distinctions.
Leaders: Born or Made?
Critical Thinking Questions
Identify and contrast an example of a leader who has (had) natural characteristics to become a leader, and a leader who developed such characteristics from experience or necessity. What differences did you notice? What natural traits or characteristics do you observe that you have to be a leader? What leadership characteristics do you think you need to develop and gain from experience?
1.4 Who Can Be a Leader: Are Leaders Born or Made? When describing leaders, sometimes the tendency is to think that they have somehow inherited leadership through no effort of their own: They were born with the qualities or traits that make them good leaders, or they simply stepped into the position by being in the right place at the right time. However, if leaders are everywhere, this suggests that there is more to leadership than winning the “leadership lottery.”
To say that someone is born a leader implies that only a select pool of candidates is quali�ied to be leaders. (We discuss this later in the section on trait theory.) Although some scholars argue that some individuals possess a natural predisposition for leadership, others prefer, as previously discussed, to describe leadership as a process and as systems. In other words, leadership can be developed over time and in context to other factors. Individuals can learn to be leaders by honing the needed skills—such as communicating, planning, and negotiating, among other things—and by working to better understand themselves and how they interact with others. From a persons, process, and systems perspective leadership is available to everyone, not only to a formally appointed leader. Leadership is not a destination that can be arrived at; it is a continual learning experience.
There is more than one path to becoming a leader. Leadership is assigned when people, such as a company vice president or a police of�icer, are named to positions of power and are given formal authority. However, leadership often extends beyond these assigned positions; some individuals exhibit leadership abilities and are recognized as leaders by their groups despite not having a formal title. This phenomenon is referred to as emergent leadership, and scholars have pointed to certain characteristics that those who emerge as leaders share.
Emergent leadership is considered a necessary and desired trait at companies like Google, video game developer Valve, and W. L. Gore & Associates, makers of Gore-Tex. Google’s Vice President of People Operations said “For every job. . . the No. 1 thing we look for is general cognitive ability, and it’s not I.Q. It’s learning ability. It’s the ability to process on the �ly. It’s the ability to pull together disparate bits of information” (Friedman, 2014). Fisher (1971) observed speci�ic communication behaviors: Emergent leaders ask for other opinions, remain �irm but �lexible, and initiate compelling, new ideas. Smith and Foti (1998) suggested that emergent leaders exhibit common personality traits. In their study of 160 male college students, they found that dominance, intelligence, and con�idence in one’s ability to perform (self- ef�icacy) were relevant traits that characterized emergent leaders. Because the sample consisted of male students only, it is uncertain whether the results apply to women (Northouse, 2013). Because leadership involves multiple levels that create top-down and bottom-up emergent outcomes (Yammarino & Dansereau, 2011), leaders can adopt values and create climates and cultures that foster emergent and other desired follower behaviors and outcomes (Lord & Dinh, 2012).
Nurturing Leadership: Integrity From Title:
Nurturing Leadership (https://fod.infobase.com/PortalPlaylists.aspx? wID=100753&xtid=65018)
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1.5 Leadership and Managerial Roles Now that we have covered a basic de�inition of leadership, we will examine the many roles leaders perform to help us better understand the function and ef�icacy of leadership. Leadership roles are expected behaviors and activities related to leaders’ jobs. Based on his classic but relevant study of the actual work habits and time management of chief executive of�icers (CEOs), Mintzberg (1973, 2009) identi�ied 10 speci�ic roles that could be categorized into three sets: interpersonal, informational, and decisional. The interpersonal role set involves meeting and working with other people both inside and outside the organization. The informational role set works with and transmits data and information. The decisional role set helps make critical decisions that can affect how an organization works.
Interpersonal Role Set
1. Figurehead: Leaders, usually in high-level roles, perform ceremonial and symbolic duties as heads of organizations. This role is not trivial. As the face, voice, and public image of an organization, a leader upholds the organization’s reputation, personality, and presence to external stakeholders and stockholders. This role involves entertaining clients in an of�icial capacity and presiding at meetings, dinners, and of�icial functions.
2. Leader: This role in�luences how leaders excel in all the other roles. In this capacity and this particular role, they foster a proper work atmosphere, motivate and develop subordinates, evaluate performance, hire employees, and give instructions.
Take the Lead Credits
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3. Liaison: This role involves interacting with people both inside and outside the organization: gathering and sharing information, networking, and maintaining relationships. It also involves managing politics inside and outside the organization. Leaders have to serve on and lead committees, attend professional and trade- association meetings, and stay in touch with key stakeholders.
Informational Role Set
4. Monitor: As part of their information-processing functions, leaders gather and analyze internal and external information relevant to the organization. They have to keep current on memos, reports, professional trade and association publications, news, and media. These days they have to keep current on competitive and competitors’ products, prices, and business processes and practices.
5. Disseminator: In this role, leaders transmit factual and value-based information to others in the organization. Currently this can be done through electronic as well as face-to-face contact. Leaders spend time in one-to-one discussions and group meetings.
6. Spokesperson: Leaders provide information to people outside the organization. They report to the board of directors, owners, managers, and team leaders. They also represent the organization to the media, community groups, and professional associations, regarding the organization’s news, performance, and policies.
Decisional Role Set
7. Entrepreneur: Leaders participate in designing and initiating change and improvements in the organization. More leaders are taking on entrepreneurial roles in the current competitive business environment. Leaders are involved in collaborating with venture capitalists, developing new or improved products and services, and �inding new ways to process services and products.
8. Disturbance handler: Leaders must deal with unexpected events, crises, and operational breakdowns. They have to be ready to represent and take action quickly, especially in these days when global media are ubiquitous. Leaders have to handle striking unions, equipment and operations breakdowns, and unforeseen mishaps.
9. Resource allocator: Leaders are in charge of ensuring that the organization’s resources are operationally, legally, and ethically managed. They must also schedule, authorize, and oversee budgeting activities of people and equipment.
10. Negotiator: Leaders represent their organizations when they participate in negotiation activities with individuals and groups inside and outside the organization. They must be involved in both routine and nonroutine negotiations, such as pay and bene�its packages for employees; union labor contracts; customer and supplier contracts; and prices for sales, service, and delivery of products and services.
Mintzberg’s work depicted the range of responsibilities and behaviors required of leaders. However, leaders do not usually have to perform all roles at once, nor do they perform all the roles in the same way. Mintzberg observed:
Although individual capabilities in�luence the implementation of a role, it is the organization that determines the need for a particular role, addressing the common belief that it is predominantly a manager’s skill set that determines success. Effective managers develop protocols for action given their job description and personal preference, and match these with the situation at hand. (Mintzberg, 1973)
In today’s business environment, changing technology, daily problems, and external factors can affect how leaders communicate and function in these different roles (House & Aditya, 1997). Mintzberg found that most CEOs are not re�lective strategists who carefully plan their company’s next move; leaders act and react constantly. Applying Mintzberg’s roles to yourself can provide helpful insights (“Mintzberg’s Management Roles,” 2014). See “Take the Lead: Decisional Roles of a Leader” to apply concepts.
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iStock/Thinkstock
The Smith and Forti study found that dominance, intelligence, and con�idence in oneself were traits that characterized emergent leaders.
Management and Leadership Compared
In de�ining his 10 managerial roles, Mintzberg did not distinguish between leaders and managers, choosing—as many scholars have— to see the two roles as interrelated: two sides of the same coin. However, the terms leadership and management often have different connotations for different people, and other experts in the �ield argue that the characteristics and duties of leaders and managers are indeed distinct. Can leaders be managers and vice versa? What is the difference between leaders and managers? Do their processes differ signi�icantly? Are they different types of people?
While scholars differ on whether individuals can be both leaders and managers, they agree that both are needed for an organization to be successful, especially depending on the situation and skills required (McCleskey, 2014). Zaleznik (2004), however, believed that managers and leaders are distinctly different; you are either a leader or a manager. He argued that managers are reactive and work with people collaboratively but with little emotional involvement. Leaders,
Take the Lead Credits
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What do you think? Can leaders be managers and vice versa?
however, shape and change ideas and are very emotionally involved with people. Managers limit choice; leaders expand options to solve problems. Leaders change other people’s attitudes, while managers only change people’s behavior (Rowe & Boulgarides, 1992).
For example, President John F. Kennedy reoriented the nation’s thinking and attitudes toward exploring space by describing it as illustrative of American ingenuity, progress, and sense of adventure. Managers at NASA helped make that dream possible by equipping astronauts to reach the moon.
Rowe and Boulgarides (1992) contended that leaders and managers possess different philosophical perspectives. Managers are deterministic; they believe that their respective organizations, industries, and environments determine their work and the way they conduct themselves. Leaders believe in free will; they believe that their choices affect and shape their organizations, industries, and environments. Rowe also argued organizations need both strong management and strong leadership. Organizations that have strong management but little or no leadership are too bureaucratic, constraining creativity and innovation. On the other hand, organizations with powerful leadership and little or no management may adopt change for the sake of change and be misguided (Rowe, 2007).
Other scholars agree that organizations need both effective managers and leaders but have argued that an individual can hold both roles simultaneously, integrating management and leadership functions for high performance (Yukl & Lepsinger, 2005). This view has been and is supported by several scholars (Bass, 1985; Seltzer & Bass, 1990; McCleskey, 2014; Robbins & Judge, 2015). Still, not all leaders are competent managers and many managers neither desire nor can become excellent leaders, although tasks and roles are interchangeable. It is helpful to see some of the distinctive characteristics of each so that you may better understand your own current preferences, skills, and aspirations.
Kotter (1990, 1996), whose distinctions between managers and - leaders are outlined in Table 1.1, called for “leader–managers.” Managers are needed to handle complexity through planning and budgeting, organizing and staf�ing, and controlling and problem solving. Leaders are required to handle change by setting direction and aligning, motivating, and inspiring people. Kotter contended that organizations are overmanaged and underled, but also pointed out that strong leadership with weak management may create worse situations.
Mintzberg (1990) argued that managers lead and leaders manage, and individuals need to be managers and leaders simultaneously. He described managers as leading with “a cerebral face,” which emphasizes calculation, sees an organization as a portfolio of components—that is, departments and functional areas (human
resources, production, sales, etc.)—and operates with rationality. Leaders lead by using “an insightful face.” This face emphasizes commitment and sees organizations through an integrative perspective, grounded in the image and feel of integrity. Mintzberg argued that managers need to be “two-faced,” that is, they need also to be leaders when required.
Table 1.1: Management and leadership
Management Leadership
Direction Plans for the bottom line Creates a shared vision and strategy
Alignment Focuses on the organization Creates common culture and values that reduce boundaries
Relationships Occupies a position of power; plays the role of the boss; focuses on production
Desires to motivate and inspire people and followers; plays the role of coach; mediates, facilitates, and serves
Personal qualities
Emotionally separated; highly talkative; expert minded; in favor of standardization
Emotionally engaged; listens to others; open-minded; diversi�ied
Outcomes Stability and predictability; ef�iciency Change and effectiveness
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Source: Based on A force for change: how leadership differs from management, by J. P. Kotter, 1990, New York, NY: The Free Press.
Management has been characterized as planning, organizing, staf�ing, and controlling organizational resources, while leadership is viewed as focusing on people and creating vision, culture, and change. However, both leaders and managers in�luence people and participate in the achievement of common goals—key to our de�inition of leadership— and we will not distinguish between the two roles in this text. You may take Assessment 1.2 to determine whether you are a manager, a leader, or both.
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1.6 Leadership Is Everyone’s Business “Becoming a leader is synonymous with becoming yourself. It’s precisely that simple, and it’s also that dif�icult” the late Warren Bennis once said (Ignatius, 2015, p. 10).
Leadership is also relational; it happens among people and it is codependent in nature. Followers need leaders, but leaders, whatever role they play in their organization, need thoughtful followers to work toward and achieve their common goals. Leadership, then, involves persons, processes, and systems. At the same time, some individuals will either emerge or be appointed to take the lead in helping make a difference in groups, teams, organizations, and nations. Zenger and Folkman (2014) made the observation posed as a question, “Individual contributors sometimes ask themselves, ‘What will it take for others to recognize my potential?’” These authors noted that such contributors may only want “acknowledgement of the importance of the work they do. Or they may aspire to move into management” as they watch others advancing in organizations ahead of them. The authors’ study of 4,158 individuals’ responses on 360- degree assessments (i.e., performance-appraisal data collected from “all around” an employee’s peers, subordinates, supervisors, and self [“businessDictionary,” 2015]) over four years that looked at average versus high performers’ productivity found that exceptional contributors as compared to good contributors showed the following leadership behaviors:
Set stretch goals and adopted high standards for themselves (the single most powerful differentiator) Worked collaboratively Volunteered to represent the group Embraced change rather than resisted it Took initiative Walked the talk Used good judgment Displayed personal resilience Gave honest feedback
This book includes both classical and contemporary leadership studies, which focus on leaders and followers in formal organizational settings. But consider that you are a leader, even if you are not the CEO of an organization. After all, you must lead yourself, and you may have to lead your family, team, peers, supervisors, suppliers, vendors, and others at some point during your life. Many individuals are capable of leadership. Leadership can be learned and developed (Jago, 1982); it is not an innate set of characteristics granted to chosen individuals.
In addition to current, relevant leadership skills and concepts, the chapters that follow pre sent a historical overview of major theories and approaches that have shaped and continue to shape leadership research and practice. As the organizing framework in Figure 1.1 shows, you will learn about leaders as persons and individuals through personalities, traits, and abilities that are thought to distinguish leaders from nonleaders (“great man” theory and trait theory). Then effective leadership styles and processes (style and behavior approaches) are explained, and how these styles interact with different work environments (situational and contingency approaches) is covered.
You will have an opportunity to see practical models and assessments that management consultants use, and to pro�ile yourself using short assessments. The assessments are designed to help you understand what type of leader best suits your style and professional needs, and to help you understand what type of leader you are, or wish to be. Warren Bennis, a renowned pioneer in executive leadership education and consulting, noted that “leadership is a function of knowing yourself, having a vision that is well communicated, building trust among colleagues, and taking effective action to realize your own leadership potential” (Barini, 2007 pg. 165).
Because leadership does not exist in a vacuum, you will learn about effective communication, con�lict management, persuasion, and other processes that leaders use to in�luence not only followers but also organizations and systems. You will also understand what it means to also be a better follower. The subject of leadership really is everybody’s business.
Assessment 1.2: Are You a Leader or a Manager?
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Instructions
Questions 1–6 are about you right now. Questions 7–14 are about you if you were one day the head of a major department at a corporation. Answer “Mostly False” or “Mostly True” to indicate whether the item describes you accurately, or whether you would strive to perform each activity as a department head.
Now
Mostly False Mostly True
1. When I have a number of tasks or homework assignments to do, I set priorities and organize the work to meet the deadlines.
2. When I am involved in a serious disagreement, I hang in there and talk it out until it is completely resolved.
3. I would rather sit in front of my computer than spend a lot of time with people.
4. I reach out to include other people in activities or discussions.
5. I know my long-term vision for career, family, and other activities.
6. When solving problems, I prefer analyzing things myself to working through them with a group of people.
Head of Major Department
Mostly False Mostly True
7. I would help subordinates clarify goals and ways to reach them.
8. I would give people a sense of long-term mission and higher purpose.
9. I would make sure jobs get out on time.
10. I would scout for new product or service opportunities.
11. I would give credit to people who did their jobs well.
12. I would promote unconventional beliefs and values.
13. I would establish procedures to help the department operate smoothly.
14. I would verbalize the higher values that the organization and I stand for.
Scoring and Interpretation
Count the number of “Mostly True” answers to even-numbered questions: _______________.
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Count the number of “Mostly True” answers to odd-numbered questions: _______________.
Compare the two scores.
The even-numbered items represent behaviors and activities typical of leadership. Leaders are personally involved in shaping ideas, values, vision, and change. They often use an intuitive approach to develop fresh ideas and seek new directions for the department or organization. The odd-numbered items are considered more traditional management activities. Managers respond to organizational problems in an impersonal way, make rational decisions, and work for stability and ef�iciency.
If you answered yes to more even-numbered than odd-numbered items, you may have potential leadership qualities. lf you answered yes to more odd-numbered items, you may have management qualities. Management qualities are an important foundation for new leaders because the organization �irst has to operate ef�iciently. Then leadership qualities can enhance performance. Both sets of qualities can be developed or improved with awareness and experience.
Sources: Kotter, J. P. (1996). Leading change. Boston, MA: Harvard Business School Press (p. 26); Rost, J. C. (1993). Leadership for the Twenty First Century. Westport, CT: Praeger (p. 149); B. Dumaine (1993). The New Non-Manager Managers. Fortune, 127(4), 80–84.
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Summary & Resources
Chapter Summary Leadership—part art, part science—is the ability to in�luence followers to achieve common goals through shared purposes. Leadership is in urgent demand, globally and locally. Young aspiring and emerging leaders are particularly in demand because they can grow and develop with certain organizations that seek high-demand skills. But in a very real sense, everyone is a leader to some degree. Everyone has to lead themselves—as followers, family members, and members of society that are becoming more global and competitive, demanding abilities that leaders must demonstrate.
Understanding leadership in organizations involves observing it as a �ield that includes overlapping and interrelated relationships among persons, processes, and systems as illustrated in Figure 1.1, the roadmap for this text. Effective and ef�icient leaders understand themselves �irst and then understand others. Leaders require personal knowledge of ethics, personality, abilities, vulnerabilities, and blind spots. To successfully in�luence others, leaders require a capacity for emotional and intellectual intelligence and an ability to persuade, communicate, and listen. It is necessary to understand the processes of leadership (i.e., styles, roles, methods, procedures) because leaders’ ways of communicating, negotiating, and decision making help determine their effectiveness with particular followers, tasks, and environments. At the organizational level, higher level leaders must help de�ine and guide an organization’s strategies, culture, ethics, and social responsibility with stakeholders and stockholders. Leaders are called on to model the cultural values and characteristics that they want others to help create and follow. These systems (strategy, culture, goals), together with individual leaders and their teams’ processes, help explain how effectively and ef�iciently organizations respond to their external environment’s competitive demands.
As you read this text, you are invited to participate in leadership as a process of self-discovery. You will learn to observe and analyze leadership characteristics (or the need for such) in others around you, in organizations you may already work, study, and belong to. Begin with a very important question: Are you a leader or a manager? This is a �irst step toward awakening your interest and identifying your strengths and needed areas of development in this process of becoming a leader. Then as you read about the roles leaders assume, you can consider which of those you need to learn and why. The assessments and chapters in the text provide you with awareness and information about the skills these different roles require.
Web Resources Imagine Leadership
http://www.youtube.com/watch?v=TuuTlQ0FzEU (http://www.youtube.com/watch?v=TuuTlQ0FzEU)
What does leadership mean to you? XPLANE and Harvard Business School offer an introductory video.
CEO Brain Scans
http://www.bbc.co.uk/news/business-11730685 (http://www.bbc.co.uk/news/business-11730685)
What makes a good leader? The BBC examines the brain scans of CEOs to see if anything can be revealed.
Leadership Versus Management
http://www.build-creative-writing-ideas.com/stephen-covey-leadership-versus-management.html (http://www.build-creative-writing-ideas.com/stephen-covey-leadership-versus-management.html)
A writer looks at the difference between leadership and management.
Critical Thinking Questions 1. Do you agree with the de�inition of leadership? What would you add or change and why?
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2. Argue for and against this statement: “Everyone is to some extent and in some ways a leader.” Argue for and against this statement: “Leaders are born, not made.”
3. In which particular leadership and managerial roles do you excel? In which do you need development? Explain. 4. In what ways is emergent leadership important and why? Also, in what ways could emergent leadership be
problematic, and for whom? Why? 5. Explain why leadership is important, and to whom? 6. Do you consider yourself more a manager or a leader? Explain. Which would you aspire to be, a leader or
manager? Why? 7. What do you believe it takes to become a higher level, formal leader in an organization, perhaps one in which
you have, had, or wish to work? Explain.
Key Terms
decisional role set
disseminator
disturbance handler
emergent leadership
entrepreneur
�igurehead
followers
informational role set
interpersonal role set
liaison
monitor
negotiator
resource allocator
spokesperson
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2 Ethical Leadership
iStock/Thinkstock
Learning Outcomes
After completing this chapter, you should be able to:
1. De�ine ethical, values-driven leadership.
2. Explain moral maturity of leadership.
3. Describe the relationship among emotions, moods, and ethics.
4. Identify seven ethical decision-making approaches to questionable situations.
5. Explain authenticity and its relationship to ethics.
6. Describe the responsibilities of ethical leadership.
7. Explain symptoms of unethical leadership.
8. Describe stewardship and servant leaders as ethical leadership styles.
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Justin Sullivan/Getty Images News/Thinkstock
Gap was one of the honorees given the "World's Most Ethical Companies" title in 2014.
Ethics and Leadership
The “World’s Most Ethical Companies” title is awarded to selected �irms vetted by the Ethisphere® Institute, which is described as “the global leader in de�ining and advancing the standards of ethical business practices that fuel corporate character, marketplace trust, and business success” (Business Wire, 2019). In 2019, the 128 honorees came from 21 countries and 50 industries. Nominations are accepted from a globally diverse population of �irms. Companies are evaluated to be ethical based on criteria from a rigorous scoring methodology: 35% of the score is based on a �irm’s ethics and compliance program; 20% derives from a �irm’s corporate citizenship and responsibility; 20% is awarded on the culture of ethics; 15% relates to governance; and 10% measures a company’s leadership, innovation, and reputation.
A sample of 2019 honoree �irms includes IBM, T-Mobile, Sony, and Tata Steel. T-Mobile CEO John Legere observed, “Our team has created and cultivated an Un-carrier culture that is all about driving change, taking a stand for what’s right, and setting a new bar for others to follow” (Business Wire, 2019). Sony Corporation President and CEO Kenichiro Yoshida said, “At its core . . . operating with integrity and sincerity is as central to the identity of Sony as is our groundbreaking spirit of innovation” (Business Wire, 2019). Companies have a reason to apply for the list of honorees beyond just hopes of selection: All companies that participate in Ethisphere’s assessment process receive an Analytical Scorecard providing them with a benchmark of how they stack up against leading organizations (Business Wire, 2019).
So, what do ethics have to do with leadership? Scholars have been looking into this question for decades. Some feel ethics are in fact at the core of what leadership inherently is. Ciulla (2005) wrote:
The de�inition question in leadership studies is not really about the question ‘‘What is leadership?’’ It is about the question ‘‘What is good leadership?’’ By good, I mean morally good and effective. This is why I think it is fair to say that ethics lies at the heart of leadership studies. (p. 17)
Striking a similar note, Gardner, Avolio, Luthans, May, and Walumba (2005) claimed, “Leaders worthy of the name, whether they are university presidents or senators, corporation executives or newspaper editors, school superintendents or governors, contribute to the continuing de�inition and articulation of the most cherished values of our society. They offer, in short, moral leadership” (p. 121). If leadership is understood in this way, as a virtuous endeavor that uplifts people and communities, then there must be an “intrinsic connection between leadership and ethics” (Boaks & Levine, 2014, p. 241).
However, we know leaders do not always adhere to such high moral standards, nor do they always uplift those around them. Over the past couple of decades, top-level corporate leaders have in some respects become synonymous with corruption, scandal, and a lack of ethics. Disastrous CEO led actions ruined great companies such as Enron, Tyco, WorldCom, and others, and the leader-led 2008 subprime lending crisis resulted in the Great Recession. Such instances of unethical behavior complicate our understanding of what leadership is, how it should be de�ined, and what its relationship is to morality and virtue.
The National Business Ethics 2013 survey of the U.S. workforce showed that while overall observed misconduct on the job decreased to 41%, down from 55% reported six years ago, it also reported that 60% of misconduct involved “someone with managerial authority from the supervisory level to top management” (“Ethics Resource Center,” 2014, p. 13). Twenty-four percent of observed misconduct involved senior managers and 12% of misconduct was reported company-wide. Retaliation against those who report misconduct also continues to be a widespread problem.
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Examples of misconduct and reported ethical violations included, “Accepting inappropriate gifts or kickbacks from suppliers or vendors; . . . lying to customers, vendors, or the public; Improper hiring practices; falsifying invoices, books, and/or records; . . . breaching employee privacy; discriminating against employees; sexual harassment; and retaliation against someone who has reported misconduct” (“Ethics Resource Center,” 2014, p. 43). These many instances of unethical behavior and practices underscore the message that legal compliance along with ethics is also a necessity in all organizations, particularly large corporations.
Studies show that a combination of both “the carrot” and “the stick” (ethics and compliance) approaches works best to prevent and decrease misconduct at all levels of organizations. However, compliance and punishment alone cannot prevent or decrease unethical and illegal behaviors. “The carrot” of strong ethical leadership at the top is needed—responsible boards of directors, ethics and compliance of�icers, and CEOs working together to bolster ethical cultures. Organizations like the Society of Corporate Compliance and Ethics exist to allow "the carrots” to share best practices. Leaders set the moral tone in organizations, sending the message that ethics count (Leigh, 2013)—at least, as Ciulla puts it, good leaders do. Acting in an ethically responsible way bene�its management and employees alike and also protects stockholders, stakeholders, and the public from economic harm.
Still, even though ethics begins with individual leaders, everyone in an organization is responsible for their ethical behavior. There is, for example, an ethical dimension in each part of Figure 1.1, Persons, Processes, and Systems (in Chapter 1). Personality, character, leadership styles, and follower relationships re�lect ethics. Leaders’ communication, negotiations, ways of in�luencing, and uses of power also embody ethics. The trust between followers and leaders is based on ethical actions. An organization’s vision, mission, and stated values—and especially the culture—all reveal ethical orientations.
You will learn to assess your ethics, values, and beliefs in this chapter and also learn to recognize the ethical dimensions in leaders’ and organizational processes and systems related to leadership as you progress through this text.
We turn next to better de�ining ethical leadership; then present the dynamics of authenticity of leaders, which in�luences leadership in relation to persons, processes, and the systems they help create and in�luence. The last section examines the characteristics and responsibilities of ethical leadership as well as the symptoms of unethical leadership before delving into two types of ethical leadership: stewardship and servant leadership.
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Alexey Klementiev/iStock/Thinkstock
Top-level leaders in the U.S. Army who created an ethical culture and guidelines at the top in�luenced all levels of that organization.
Senator Elizabeth Warren discusses what happens when the leaders work more for the elite few than for the common good.
Who Fights for Middle Class Values?
2.1 Ethical and Values-Based Leadership De�ined Ethics is generally de�ined as motivations or actions that are based on ideas of what is right and wrong, but ethics also encompass the values and morals that an individual, society, or institution deem acceptable and desirable. Business ethics is grounded in this general de�inition but relates more speci�ically to “The study of proper business policies and practices regarding potentially controversial issues, such as corporate governance, insider trading, bribery, discrimination, corporate social responsibility and �iduciary responsibilities” (Investipedia.com, 2015). It follows, then, that ethical business leadership in organizations, especially those that are business related, involves acting with moral purpose and integrity to do what is right, just, and fair in service of the common good toward stakeholders, stockholders, and the broader society. In revisiting our original de�inition of leadership—the ability to in�luence followers to achieve common goals through shared purposes in the multidimensional context of persons, processes and systems—we can see how ethics can be factored into every aspect of leadership, as discussed earlier. Leaders should be fair, rather than self-serving, when they in�luence followers and should take the common good into consideration as they work toward goals.
Ethical leadership begins with the individual, but it also requires the involvement of boards of directors, other of�icers in companies, directors, managers, and supervisors who can model and in�luence others’ behaviors, as discussed in later chapters. A leader decides to act ethically based on personal values, principles, and convictions, and the leader’s behaviors are the starting point for cascading ethics throughout the organization.
Two examples of ethical leadership depicted in Figure 1.1, Persons, Process, Systems, show that leadership does cascade throughout an organization. One example illustrates that top-level leaders in the U.S. Army who created an ethical culture and guidelines at the top that were clearly communicated in�luenced all levels (2,572 soldiers) of that organization (Schaubroeck et al., 2012). Another study (Ogunfowora, 2014) found that ethical leadership was more strongly and positively associated with unit-level organizational citizenship behavior (OCB) and individual-level job satisfaction with 297
employees in 58 work units that reported higher (versus lower) leader role modeling. The study concluded that “ethical leaders should facilitate vicarious learning through the different stages described above. In so doing, employees should perceive ethical leaders as role models of ethical workplace conduct” (Ogunfowora, 2014, p. 1475).
Values-based leadership is based on a leader’s in�luence and relationship with followers through internalized, shared values focused on the common good. Scholars have identi�ied and linked values to ethical leadership and management (Yunus & Weber, 2010; Muscat & Whitty, 2009; Dean, 2008). Although this observation is certainly not new, it is important to recognize that values greatly in�luence leaders’ and managers’ thinking, decisions, in�luence, and actions with followers and stakeholders. As the opening introduction about the world’s most ethical companies shows, values are an integral part of leaders’ and followers’ effectiveness.
Copeland’s literature review of values-based leadership (2014) sums it up this way:
History has demonstrated repeatedly that leaders who lack ethical and value based dimensions can have serious adverse
Struggling Middle Class From Title:
Moyers & Company: Elizabeth Warren, Fighting B... (https://fod.infobase.com/PortalPlaylists.aspx? wID=100753&xtid=59315)
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Critical Thinking Questions
What happens when leaders do not share, protect, and defend values of followers in business, government, and other institutions? Do you agree or disagree with the arguments made in this �ilm clip? How does this �ilm clip exemplify values based leadership discussed in the text?
consequences on their followers, their organizations, our nation and the world. . . . leaders who exhibit authentic, ethical and transformational leadership are more effective than their counterparts who lack a values based dimension to their leadership. (pp. 130–131)
Although speci�ic values and ethical principles are presented in this chapter, values-based leadership here generally refers to treating followers and others with respect, dignity, fairness, and a concern for the common good versus serving one’s own interests and short-term needs. Knowing our own values is also a major part of leadership development. Take the Personal Values Assessment (PVA) online (https://survey.valuescentre.com/survey.html?id=s1TAEQUStmyj76ns_QmrKw&locale=en (https://survey.valuescentre.com/survey.html?id=s1TAEQUStmyj76ns_QmrKw&locale=en) ). A summary and pro�ile of your current major values will be emailed to you. This assessment can be helpful when you articulate the principles you use in solving ethical dilemmas.
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2.2 Moral Maturity of Leaders Also important are leaders’ and their executive teams’ level of moral maturity, which from recent corporate scandals seem to be lacking. Morally mature, ethical leaders cannot only avoid widespread harm but also take companies to new heights, as we discuss later in this chapter. As you read this section, identify your own level of moral maturity and that of your current or past supervisors and leaders.
A still popular model of moral development is Kohlberg’s three levels of moral maturity and development (1958; 1984), which include six stages that provide a guide for observing an individual’s level of moral maturity in everyday life and organizational settings. This model provides a viable framework to assess ethical reasoning not only in leadership positions but also in all levels of an organization. It should be noted, however, that whether, and to what extent, ethical education and training contribute to moral development in later years is not yet known.
Level 1: Preconventional Level (Self-Orientation)
Stage 1: Punishment avoidance: avoiding punishment by not breaking rules. The person has little awareness of others’ needs. Stage 2: Reward seeking: acting to receive rewards for oneself. The person has awareness of others’ needs but not of right and wrong as abstract concepts.
Level 2: Conventional Level (Others Orientation)
Stage 3: Good person: acting “right” to be a “good person” and to be accepted by family and friends, not to ful�ill any moral ideal. Stage 4: Law and order: acting “right” to comply with law and order and norms in societal institutions.
Level 3: Postconventional, Autonomous, or Principles Level (Universal, Humankind Orientation)
Stage 5: Social contract: acting “right” to reach consensus by due process and agreement. The person is aware of relativity of values and tolerates differing views. Stage 6: Universal ethical principles: acting “right” according to universal, abstract principles of justice and rights. The person reasons and uses conscience and moral rules to guide actions. (Weiss, 2014, p. 76)
Although most people can behave at the third level, only 20% seem to do so. Most individuals behave at the conventional, or second, level. It is important to note that his theory also has its critics who argued that individuals do not actually pass through stages of such development (Rest, 1979); and, Gilligan (1977) claimed that Kohlberg’s theory is sexually biased because he reasoned from an “ethics of justice” whereas women take an “ethics of care” approach (McLeod, 2011). Snarey (2007) also examined Kohlberg’s arguments in a survey of 45 cross-cultural studies in 27 countries. Snarey used Kohlberg’s dilemma method of stage assessment and found that Kohlberg “identi�ied a basic stage trend, but also the cultural speci�icity of Kohlberg’s highest stages. As a remedy, Snarey proposed a culturally inclusive elaboration of the highest stages” (p. 443). Research continues to examine Kohlberg’s methods from gender and multicultural cultural frameworks. Despite its limitations, the model can prove useful as a starting point for examining and discussing moral maturity of leaders and followers.
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2.3 Emotions, Moods, and Ethics Although most individuals like to think they make decisions based on reason and cognition, a stream of research indicates that emotions and moral attitudes also in�luence behavior (De Hooge, Nelissen, Breugelmans, & Zeelenberg, 2011; Hutcherson & Gross, 2011; Haidt, 2007; Robbins & Judge, 2015). Leaders, then, might be making decisions on factors other than the logical reasoning they often pride themselves on. This is important information for any strong leader to be aware of.
Some moral emotions are sympathy, guilt, anger, contempt, and disgust, especially for those who trespass on our values, beliefs, and norms. We sometimes justify our emotions as ethical and right—especially those we share with a group. Because emotions and moods are also a function of personality, we bene�it from understanding the personality types of our leaders, which is discussed in the next chapter. For example, those leaders who have outbursts and express themselves with intensity and act hurriedly in�luence followers differently than those who quietly and methodically persuade people. There are assets and liabilities to the ways related moods and emotions are expressed from different personalities and leader styles. A point to be made here is that as students of leadership, we can enhance our own effectiveness with an awareness and knowledge of our own and others’ emotions and different leadership characteristics while recognizing that not all ethical justi�ications of actions or decisions may be based on reason alone.
Also learning how to effectively regulate our own emotions is important and can be a complex undertaking for leadership development as well as our own health. The �irst step in this process is, as previously noted, recognition and acknowledgment instead of suppressing our emotional responses. Also, our ability to cognitively reappraise and calmly evaluate our emotional responses to situations afterward can help us learn to change our emotional responses (Halperin, Porat, Tamir, & Gross, 2013), especially if they are inappropriate or hurtful. Emotional Intelligence (EI), a related topic, is discussed in Chapter 3.
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2.4 Ethical Principles and Approaches Ethical decision making is based on ethical approaches that underlie leaders’ beliefs, attitudes, and actions. These broad principles and approaches also serve as the basis of political and institutional missions, policies, practices, and procedures. Judges and legal experts use these to determine cause of individuals’ and groups’ actions. So there are multiple uses of these classical but very current principles, of which some of the most commonly used are summarized here. The principles can be, and are, used in combination, and different principles are used in different situations.
As you read these, ask yourself which principles characterize your own beliefs, behaviors, and actions, and those of a current or past leader whom you know. It is helpful to ask and perhaps identify the principles you most often use now and those you aspire to use more, and why. Using one or more of these principles and ethical approaches intentionally can also help you examine choices and options before making a decision or solving an ethical dilemma. Becoming familiar with these principles, then, can help inform your moral decision process. Using creativity is also important when examining dif�icult moral decisions when sometimes it may seem that there are two “right” ways to act in a situation, or perhaps no way seems morally right, which may also signal that not taking an action at that time may be needed, unless taking no action produces worse results.
Utilitarianism: A Consequentialist, “Ends Justi�ies Means” Approach
The utilitarianism principle basically holds that an action is morally right if it produces the greatest good for the greatest number of people. An action is morally right if the net bene�its over costs are greatest for all affected compared with the net bene�its of all other possible choices. This, as with all these principles and approaches, is broad in nature and seemingly rather abstract. At the same time, each, as this one, has a logic. When we present the speci�ics and facts of a situation, this and the other principles begin to make sense, although judgment is still required.
Some limitations of this principle suggest that it does not consider individuals, and there is no agreement on the de�inition of “good for all concerned.” In addition, it is dif�icult to measure “costs and bene�its.” This is one of the most widely used principles by corporations, institutions, nations, and individuals, given the limitations that accompany it.
Use of this principle generally applies when resources are scarce, there is a con�lict in priorities, and no clear choice meets everyone’s needs—that is, a zero-sum decision is imminent. For example, Charlie Wilson, President of General Motors in the early 1950s, was quoted in a now classic statement as having said, “What’s good for General Motors is good for the country,” which has been widely but mistakenly interpreted as “What’s good for me is good for the organization.” If Wilson had said this, it would re�lect an individualist, self-interest approach (see the Ethical Relativism: Self-Interest Approach). However, as stated in Time magazine (1961), Wilson actually said “For years I thought that what was good for our country was good for General Motors, and vice versa.” Therefore, a more accurate interpretation of - Wilson’s words would be “What’s good for the organization is good for me,” which is very much a utilitarian consequentialist stance (Todnem, 2012). CEO Mary Barra has led General Motors toward a more socially responsible, ethical approach.
Universalism: A Duty-Based Approach
Universalism is a principle takes into account the welfare and risks of all parties when considering policy decisions and outcomes. Also, needs of individuals involved in a decision are identi�ied as well as the choices they have, and the information they need to protect their welfare. This principle involves taking human beings, their needs, and value seriously. It is not only a method to use to make a decision, it is a way of incorporating a humane consideration of and for individuals and groups when deciding a course of action. As some have asked, “What is a human life worth?”
Cooper, Santora, and Sarros (2007) wrote that “Universalism is the outward expression of leadership character and is made manifest by respectfulness for others, fairness, cooperativeness, compassion, spiritual respect, and humility.” Corporate leaders in the “World’s Most Ethical Companies” strive to set a “tone at the top” to exemplify and embody universal principles in their business practices. The
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Hindustan Times/Hindustan Times/Getty Images
Corporate leaders in the “World’s Most Ethical Companies,” such as T. V. Narendran, CEO of Tata Steel, strive to set a “tone at the top” to exemplify and embody universal principles in their business practices.
Ethisphere® Institute takes a leading role in advancing ethical business practices and publishes an annual list of the worlds' most ethical companies. Tata Steel has been on the list for the past 8 years (Ethisphere, 2019).
Limitations here show that using this principle is not always realistic or practical in all situations. In addition, using this principle can require sacri�ice of human life—that is, giving one’s life to help or save others—which may seem contrary to the principle. Finally, the principle presents dif�iculties when used in complex negotiations, when each person’s welfare is most valued.
Rights: A Moral and Legal Entitlement-Based Approach
This principle is grounded in both legal and moral rights. Legal rights are entitlements that are limited to a particular legal system and
jurisdiction. In the United States, the Constitution and Declaration of Independence are the basis for citizens’ legal rights, for example, the right to life, liberty, and the pursuit of happiness, and the right to freedom of speech.
Moral (and human) rights, on the other hand, are universal and based on norms in every society, for example, the right not to be enslaved and the right to work.
To get a sense of individual rights in the workplace log on to one of the “Best Companies to Work For” annual list (http://fortune.com/best-companies/ (http://fortune.com/best-companies/) ). Pro�iles of leaders and organizations’ policies, practices, perks, diversity, compensation, and other statistics regarding employee welfare and bene�its can be reviewed. The “World’s Most Ethical Companies” also provides examples of workforce and workplace legal and moral rights. Applying this principle, as with universalism, can always be used when individuals, groups, and nations are involved in decisions that may violate or harm such rights as life, liberty, the pursuit of happiness, and free speech.
Some limitations when using this principle are (1) it can be used to disguise and manipulate sel�ish and unjust political interests, (2) it is dif�icult to determine who deserves what when both parties are “right,” and (3) individuals can exaggerate certain entitlements at the expense of others.
Justice: Procedures, Compensation, and Retribution
This principle has at least four major components that are based on the tenets that (1) All individuals should be treated equally; (2) Justice is served when all persons have equal opportunities and advantages (through their positions and of�ices) to society’s opportunities and burdens; (3) Fair decision practices, procedures, and agreements among parties should be practiced; and (4) Punishment is served to someone who has in�licted harm on another, and compensation is given to those for a past harm or injustice committed against them.
A simple way of summarizing this principle when examining a moral dilemma is to ask of a proposed action or decision: (1) Is it fair? (2) Is it right? (3) Who gets hurt? (4) Who has to pay for the consequences? and (5) Do I/we want to assume responsibility for the consequences? (These questions are repeated below in Practical Principles of Ethical Leadership.) It is interesting to re�lect on how many corporate disasters and crises might have been prevented had the leaders and those involved taken such questions seriously before proceeding with decisions. For example, the following precautionary actions might have prevented the disaster: updating the equipment and machinery that failed in the BP and the Exxon Valdez oil crises; or investment banks and lending institutions following rules not to sell subprime mortgages that could not and would not be paid, actions that led to the near collapse of the global economy.
Limitations when using this principle involve the question of who decides who is right and wrong and who has been harmed in complex situations? This is especially the case when facts are not available and there is no objective external jurisdiction of the state or federal government. In addition, we are sometimes faced with the question, “Who has the
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moral authority to punish to pay compensation to whom?” Still, as with the other principles discussed here, justice stands as a necessary and invaluable building block of democracies and freedom.
Virtue Ethics: Character-Based Virtues
Virtue ethics is based on character traits such as being truthful, practical wisdom, happiness, �lourishing, and well- being. It focuses on the type of person we ought to be, not on speci�ic actions that should be taken. Grounded in good character, motives, and core values, the principle is best exempli�ied by those whose examples show the virtues to be emulated.
Basically, the possessor of good character is and acts moral, feels good, is happy, and �lourishes. Altruism is also part of character-based virtue ethics. Practical wisdom, however, is often required to be virtuous.
This principle is related to the Universalism, Means Justi�ies the Ends approach. Many leaders’ character and actions serve as examples of how character-based virtues work. For example, the famous Warren Buffet stands as an icon of good character who demonstrates trustworthy values and practical wisdom. Applying this principle is related to a “quick test” before acting or making a decision by asking, “What would my ‘best self ’ do in this situation?” Others ask the question inserting someone they know or honor highly.
Some limitations of this ethic are �irst, some individuals may disagree on who is virtuous in different situations, and therefore would refuse to use that person’s character as a principle. Also, the issue arises, “Who de�ines virtuous, especially when a complex act or incident is involved that requires factual information and objective criteria to resolve?”
The Common Good
The common good is de�ined as “The sum of those conditions of social life which allow social groups and their individual members relatively thorough and ready access to their own ful�illment” (Velasquez, Andre, Shanks, & Meyer, 2014). Decision makers must take into consideration the intent as well as the effects of their actions and decisions on the broader society and the common good of the many.
Identifying and basing decisions on the common good requires us to make goals and take actions that take others, beyond ourselves and our self-interest, into account. Applying the common good principle can also be asked by a simple question, “How will this decision or action affect the broader physical, cultural, and social environment in which I, my family, friends, and others have to live, breathe, and thrive in now, next week, and beyond?”
A major limitation when using this principle is, “Who determines what the common good is in situations where two or more parties differ over whose interests are violated?” In individualistic and capitalist societies it is dif�icult in many cases for individuals to give up their interests and tangible goods for what may not bene�it them, or may even deprive them.
Ethical Relativism: A Self-Interest Approach
Ethical relativism is really not a “principle” to be followed or modeled. It is an orientation that many use quite frequently. Ethical relativism holds that people set their own moral standards for judging their actions. Only the individual’s self-interest and values are relevant for judging his or her behavior. Moreover, moral standards, according to this principle, vary from one culture to another. “When in Rome, do as the Romans do.”
Obvious limitations of relativism include following one’s blind spots or self-interests that can interfere with facts and reality. Followers of this principle can become absolutists and “true believers”—many times believing and following their own ideology and beliefs. Countries and cultures that follow this orientation can result in dictatorships and absolutist regimes that practice different forms of slavery and abuse to large numbers of people.
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Practical Principles of Ethical Leadership
Ethical leaders’ responsibilities seem straightforward, but practicing them may be an entirely different matter altogether. The Center for Business Ethics at Bentley University created the following six questions, embedded in classical ethical principles, that offer leaders decision-making guidelines to assess the ethics of their planned actions in particular situations (Bowditch & Buono, 2001; Weiss, 2014):
1. Is it right? This question asserts that the ethics of the means must be weighed just as heavily as the ethics of the ends. A leader must consider his or her duty to and respect for others as well as the outcomes of his or her decisions. This principle applies at the societal level as well as in organizations and with their stakeholders.
2. Is it fair? This question is based on the notion that certain actions are intrinsically just or unjust. As we discussed, equality is a top priority for ethical leaders. Everyone must be given the same opportunity or advantage and held to the same standards. For example, it is unjust to hire an unquali�ied job applicant who is related to the company’s CEO in an attempt to curry favor with one’s superior instead of hiring a more quali�ied applicant.
3. Who will be hurt? This question favors choosing an action that will result in the greatest good for the largest number of people. In other words, whose utility (advantage) will increase or decrease the most? Unlike the question “Is it right?” which examines the morality of the decision or actions itself, the question “Who will be hurt?” focuses on the end result.
4. How would you feel if the details of your actions became public? This question requires decision makers to anticipate how all others would be affected by a particular decision and empathize with them. This question draws on the Golden Rule: Do unto others as you would have them do unto you.
5. What would you tell a young person—such as your child or young relative—to do? Originating from the deontological principle of reversibility, this question evaluates the ethics of an action by reversing the role of the decision maker: How would your decision sound if someone else implemented it?
6. How does it smell? This question is based on an intuition ethic and requires decision makers to pay attention to their common sense and gut feel of right and wrong. If an action does not “smell” right to a reasonable person, then there is a good chance that it is not ethical.
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Figure 2.1: Authentic leadership dimension
The authentic leader possesses purpose, values, relationships, self-discipline, and heart.
Source: Bill George with Peter Sims. True North: Discover Your Authentic Leadership (2007). John Wiley & Sons. Reprinted with permission.
2.5 Authenticity: A Multidimensional Ethical Concept The concept of authenticity has its roots in Greek philosophy—“To thine own self be true” (Avolio & Gardner, 2005). With regard to leadership, the term refers to being true to one’s values and beliefs in the process of making decisions that will affect people and organizations. Authors have also characterized the practice of being authentic as owning your own experiences, taking responsibility for your emotions, needs, desires, and beliefs, expressing yourself in consistent ways with your inner thoughts and feelings (Avolio & Gardner, 2005; Harter, 2002).
In today’s quickly evolving business environment, key components of authenticity concern leadership development and performance in the multiple dimensions of Figure 1.1, Persons, Processes, and Systems, the roadmap for this text. It’s easy to say “be true to one’s self,” but how exactly do we accomplish this feat? How do we maintain steadfastness in our beliefs when confronted with waves of contradictory and often con�licting data? How do we know when it’s time to reassess and revise initial plans and goals; being steadfast in a decision is, after all, only laudable if the outcome is successful in achieving organizational goals. The �ield of authenticity research helps us ground our understanding of authenticity in more concrete domains:
Positive psychological capital which refers to leaders having personal resources of con�idence, optimism, hope and resiliency (Luthans & Youssef, 2004); Positive moral perspective that refers an “ethical and transparent decision making process whereby authentic leaders develop and draw upon reserves of moral capacity, ef�icacy, courage, and resiliency to address ethical issues and achieve authentic and sustained moral actions” (Avolio & Gardner, 2005, p. 324; May, Chan, Hodges, & Avolio, 2003); Leader self-awareness which is “an emerging process where one continually comes to understand his or her unique talents, strengths, sense of purpose, core values, beliefs and desires” (Avilio & Gardner, 2005, p. 324; Silvia & Duval, 2001); Leader self-regulation, is a “process through which authentic leaders align their values with their intentions and actions” through an internally driven process (Avolio & Gardner, 2005, p. 325); Leadership processes/behaviors that include “leading by example,” showing high levels of respect, positive affect, and trust in leader–follower relationships, and in�luencing followers by “identi�ication, positive modeling, emotional contagion, supporting self-determination, and positive social exchanges” (Avolio & Gardner, 2005, p. 326).
Effectiveness of authentic leaders and followers depends on their ability “to promote an inclusive organizational climate that enables themselves and followers to continually learn and grow” (Avolio & Gardner, 2005, p. 327; Luthans & Avolio, 2003).
A closer look at leaders who are ethical shows that they are, in fact, authentic. Authenticity, in addition to and in support of the leadership research discussed above, plays a central role in ethical leadership. Authentic leaders genuinely desire to serve others, know themselves, and lead from their core values (George & Sims, 2007). In a study of 125 successful leaders, George (2003; George, Sims, McLean, & Mayer, 2007) found that authentic leaders (1) understand their purpose, (2) have strong values about doing the right thing in their work and lives, (3) establish trusting relationships with others, (4) show self-discipline while acting on their values, and (5) are passionate about their mission.
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Albin Lohr-Jones/Sipa USA via Associated Press
The humble childhood beginnings of Andrea Jung helped inspire her to a career in nonpro�it micro�inance with Grameen America, helping low-income female entrepreneurs.
When asked in an interview to summarize what an authentic leader is, George, a veteran executive with decades of leadership experience, said,
They lead with their whole selves—their hearts as well as their heads. They don’t get pulled off course by seductions and pressures. Every leader who has failed, that I’ve seen, has not failed to lead other people, they’ve failed to lead themselves.
Founder and former CEO of Avon, Andrea Jung, was a rising star at a luxury-goods company before she walked out at age 35. When asked why, since she was on track to become CEO, she answered, “That was the problem. I didn’t want to spend the rest of my life making luxury goods for upper-class women.” She left without another job offer and wound up at Avon Products, where the company’s practice of equipping the average woman to sell their products fueled her passion of “trying to help women achieve self-suf�iciency” (White, 2007, p. B3). Avon stock dropped by 45% in 2011, and Jung was asked to step down. She took inspiration from her grandmother, who received an informal loan to start a hair salon, changing the Chinese immigrant family’s trajectory. In 2014, Jung became president and CEO of Grameen America, a nationwide organization offering microloans to low-income female entrepreneurs (Vassolo, 2018).
George also suggested that the �ive dimensions of authentic leadership could be viewed in terms of how they are revealed to others. The authentic leader possesses purpose, values, relationships,
self-discipline, and heart. These dimensions, shown in Figure 2.1, can manifest themselves respectively as passion, behaviors, connectedness, consistency, and compassion (George, 2003; Northouse, 2010). We will explore this further.
Leaders in George’s interviews have a sense of purpose: They know who they are and where they are going. They thus have passion: They are interested in and care about what they do and their work.
George also found that authentic leaders understand their values, or principles (their “true north”), which guide their behaviors, or actions. Their values help de�ine who they are, where they’re going, and what they should do. Authentic leaders do not compromise their values under pressure, but use them as a guide when faced with dif�icult situations. As Jung said, although she was on track to become CEO at a luxury-goods company, the company and its industry did not re�lect her values (White, 2007, p. B3). As a result, she altered her behavior—she left the company. Interestingly, when her values and behaviors were aligned, so was her sense of purpose and passion.
When an authentic leader is able to create and build relationships, what results is connectedness. Authentic leaders are able to be open with others and share their stories as well as listen to others’ stories. This sense of connectedness fosters trust, which leads to commitment, loyalty, and closer relationships with followers. This characteristic and dimension is shown in how charismatic leaders bond with followers.
Self-discipline, another dimension of authentic leadership, is the ability and determination to stay focused in order to achieve goals. Leaders can set objectives and standards of excellence and gain energy from doing so. Self-discipline also enables leaders to be calm and relaxed and therefore show consistency—predictability in their behavior and security in themselves, and therefore greater communication. When leaders act and communicate with consistency, followers know what to expect from them.
Finally, authentic leaders who have heart are able to show compassion; they are sensitive to others and willing to help and support them. Compassion can develop from being directly involved with people unlike yourself on the basis of national origin, ethnic background, socioeconomic class, leadership style, and so on. By knowing and sharing followers’ life stories, getting involved in community projects, and traveling to developing countries, leaders develop compassion and sensitivity to others’ cultures and living situations.
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2.6 Responsibilities of Ethical Leadership For ethical leaders, authenticity and integrity must be translated into action and attitude toward others, including followers, external stakeholders, and the broader community. These leaders have a responsibility to show respect for others, treat all stakeholders equally, work for a common good, build community, and be honest (Beauchamp & Bowie, 1988; Dalla Costa, 1998; Kitchener, 1984; Rawls, 1971; Rost, 1991).
Show Respect for Others
Respecting others requires leaders to recognize the intrinsic worth of others, and forces them to treat people as ends in themselves—never as means to an end. In other words, people should be seen as valuable because of who they are, not because of what they can do for you or how they can help you advance. In our earlier discussion of charismatic leadership, we saw that personalized charismatic leaders tend to disregard others—or perhaps even use, manipulate, or lie to others—to implement their vision or secure more pro�it for themselves. (The opposite would be socialized charismatic leaders.)
Assessment 2.1: How Ethical Are You?
Instructions
Circle the numbers to indicate how well each item describes your current attitudes and behavior or how you would behave in group situations. Response choices: 1 = not at all; 2 = somewhat; 3 = very much; 4 = exactly
1. I use other people’s mistakes to attack them personally. 1 2 3 4
2. I always get even. 1 2 3 4
3. As a leader, I give special favors to my favorite employees. 1 2 3 4
4. I lie to group members if it �its my purposes. 1 2 3 4
5. I would let a group member take the blame to protect myself. 1 2 3 4
6. I would deliberately fuel con�lict among group members. 1 2 3 4
7. People who know me well consider me to be ruthless. 1 2 3 4
8. I would use a performance evaluation to criticize an individual as a person. 1 2 3 4
9. I hold grudges against people. 1 2 3 4
10. I would allow coworkers to be blamed for my mistakes. 1 2 3 4
11. I would falsify records to help my work situation. 1 2 3 4
12. My morals are low. 1 2 3 4
13. I would make fun of someone’s mistakes rather than coach the person on how to do the job better.
1 2 3 4
14. I would exaggerate someone’s mistakes to make him or her look bad to my superiors. 1 2 3 4
15. I get revenge on people when possible. 1 2 3 4
16. I would blame a group member for my mistakes. 1 2 3 4
17. I would avoid coaching an employee so that he or she could fail. 1 2 3 4
18. A person’s ethnic group in�luences how I treat him or her. 1 2 3 4
19. I would deliberately distort what another person said to make me look good. 1 2 3 4
20. I would deliberately make employees angry with each other. 1 2 3 4
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21. I am a hypocrite. 1 2 3 4
22. I would limit the training opportunities of others to prevent them from advancing. 1 2 3 4
23. I would blackmail an employee if I thought I could get away with it. 1 2 3 4
24. I enjoy turning down the requests of group members. 1 2 3 4
25. If an employee were to get on my bad side, I would make trouble for him or her. 1 2 3 4
26. I take credit for the ideas of others. 1 2 3 4
27. I would steal from the organization. 1 2 3 4
28. I would engage in sabotage against the organization just to get even. 1 2 3 4
29. I would �ire a person I did not like if I could get away with it. 1 2 3 4
30. I would do things that violate organizational policy and then expect employees to cover for me.
1 2 3 4
Scoring and Interpretation
Add up your responses to all 30 items. In interpreting your score, recognize that people tend to overrate themselves on ethical behavior because it is painful to admit to being devious and unethical.
30–35: Very ethical. If you scored in this range, your self-image is that you are trustworthy and highly principled. If your answers are accurate, it could mean that your high ethics could be an asset to you as a leader.
36–61: Moderately ethical. A score in this range means that your impression is that you sometimes engage in slightly unethical behavior. You might strive to be more consistently ethical.
62–120: Very unethical. This range describes leaders who may be perceived as engaging in practices that are unethical, dishonest, unfair, and unprincipled. Although many unethical leaders are successful for a while, your unethical attitudes and behavior could be career-limiting factors. It is time to re�lect on your values and start taking corrective action. Studying ethics can also help.
Source: A. Dubrin, Leadership: Research Findings, Practice and Skills, 6th Edition (2010). Mason, OH: South-Western College Publishing. © Cengage Learning.
Showing respect for others includes tolerating individual differences and affording followers the freedom to think independently, act as individuals, and pursue their own goals. When a leader shows respect for followers by providing them autonomy, subordinates can feel more useful, valued, and con�ident. Such a situation often leads to greater loyalty and productivity among subordinates.
Treat All Stakeholders Equally
An ethical leader strives to treat everyone his or her decisions may affect in a fair and just manner. Equality is a top priority for ethical leaders, and needs to factor prominently into their decision making. Ethical leaders must refrain from offering special treatment to others; failure to do so creates winners and losers—in-groups and out-groups—and can breed resentment between those who receive special treatment and those who do not. The only exception occurs when an individual’s speci�ic situation warrants special treatment in order for a just outcome to be realized.
Preventing winners and losers from emerging is not always easy. Some situations require the distribution of bene�its and burdens, and such situations can test a leader’s ability to ensure that justice is achieved. Beauchamp and Bowie (1988) de�ined the common principles that guide leaders facing such dilemmas; their �indings can help leaders allocate responsibilities fairly and justly. These principles stipulate that every person must receive an equal share or opportunity according to his or her needs, rights, effort, societal contributions, and performance. For example, when a manager is
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AP Images/Steven Senne
Whole Foods is known for its community outreach programs on both local and global scales. It regularly donates to community food banks and shelters.
deciding how to allocate a limited number of shifts among her employees, she needs to consider which employees must help support their families (needs), which have the most seniority (rights), which work the hardest (effort), which are always available to cover for others (societal contributions), and which have produced the greatest pro�its for the company (performance).
Work for a Common Good
Mahatma Gandhi offers an example of what striving toward a common good entails. Known for his commitment to nonviolent protests and mass civil disobedience, the Indian activist and ideological leader spent 20 years in South Africa opposing legislation that discriminated against Indians. He spent the remainder of his life in India �ighting for independence from foreign rule and working to reduce poverty and taxation, liberate women, and end multiple forms of discrimination (“Mahatma Gandhi Biography,” 2011). He championed such causes not because he would personally bene�it, but because a larger, more substantial population would. Gandhi devoted his life to furthering social causes he believed in and developed a personal sense of purpose and meaning that later translated into a societal then global ethic.
Ethical leaders strive to further social or institutional goals that are greater than the goals of the individual. This responsibility requires the ethical leader to serve a greater good by attending to the needs of others. This type of behavior is an example of altruism: a steadfast devotion to improving the welfare of others. Altruistic behavior may manifest in a corporate setting through actions such as mentoring, empowerment behaviors (encouraging and enabling others), team building, and citizenship behaviors (such as showing concern for others’ welfare), to name a few.
Build Community
Whole Foods Market is well known for its community outreach programs on both local and global scales. Every Whole Foods store donates to community food banks and shelters, and throughout the year holds “5% days” when 5% of the day’s net sales are donated to local nonpro�it or educational organizations. In local communities, this makes a signi�icant impact. For example, in Redondo Beach, California, Whole Foods's "5% days” had generated a cumulative $23,992.93 �inancial contribution as of April 2018 (Food Bank of Southern California, 2018).
The efforts of Whole Foods to strengthen its stores’ local and global neighborhoods are a perfect example of leaders building community. When an ethical leader focuses on the needs of others rather than the self, other people will often follow suit. This can lead to a strong contingent of followers working with the leader to achieve a common goal that bene�its everyone and builds communities. For such an outcome, leaders and followers must �ind a goal that is compatible with the desires of all stakeholders. Furthering a common goal means that no one can place his or her needs ahead of the group’s goals, and an ethical leader cannot impose his or her will on others. A successful CEO who works with many charities or other individuals to feed the homeless exempli�ies a leader building community.
Be Honest
Honesty is considered desirable by practically everyone, but it is sometimes unclear what honesty actually demands of us. Being honest is not simply telling the truth and avoiding deceitful behaviors; it requires leaders to be as open as possible and to describe reality fully, accurately, and in suf�icient detail. Telling the complete truth is not always the most desirable action, however. Leaders must be sensitive to the feelings and beliefs of others and must recognize that the appropriate level of openness and candor varies depending on the situation.
Some corporations have adopted honesty guidelines their leaders must follow. Texas Instruments requires its CEO, chief �inancial of�icer, chief accounting of�icer, and controller to adhere to a code of ethics, which stipulates they must “act
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with honesty and integrity, avoiding actual or apparent con�licts of interest between personal and professional relationships.” They are also required to “promote ethical behavior in the workplace,” and any dishonest actions are to be reported immediately (“Code of Ethics,” 2011). In the summer of 2018, Texas Instruments CEO Brian Crutcher resigned after only 2 months on the job for breach of code of conduct (King, 2018). Hats off to Texas Instruments for nipping this in the bud and honoring the company's code of ethics. See “Take the Lead: Promoting Ethical Leadership” to apply these concepts.
Dishonesty can be a disastrous practice for a leader. Dishonest leaders distort reality, which can lead to unfavorable outcomes for all stakeholders. Researchers Cialdini, Petia, Petrova, and Goldstein (2004) found that dishonest organizations suffer from tarnished reputations, decreased worker productivity, and various damages related to increased surveillance. They concluded that the costs of organizational dishonesty greatly outweigh any short-term gains from such behavior.
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2.7 Symptoms of Unethical Leadership Unethical leadership can manifest itself in different ways, but scholars have noted that unethical leaders share certain characteristics. In a nod to the 1990 business best seller The 7 Habits of Highly Effective People, Finkelstein (2003) reviewed contemporary business failures and identi�ied “the seven habits of spectacularly unsuccessful people.” Three of the habits he identi�ied directly violate principles of ethical leadership: (1) putting personal interests ahead of company interests, (2) acting arrogantly and recklessly, and (3) eliminating anyone who might challenge the leader’s decisions.
A related study by McCall and Lombardo (1988) focused on behaviors that derail executives and lead to their downfall. Every derailed executive included in the study had relationship problems. They were insensitive—the most frequent cause of failure—and cold with others. (Coldness included aloofness and arrogance.) Also, these executives often betrayed others’ trust.
Seven additional symptoms of unethical leadership provide more insight into why corporate scandals and everyday unethical leadership behavior may occur (Weiss, 2014 pg. 10):
1. Ethical blindness: Not perceiving ethical issues due to lack of attention or ability. 2. Ethical muteness: Not possessing or using ethical language or principles. 3. Ethical incoherence: Not recognizing inconsistencies among values.
Take the Lead Credits
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4. Ethical paralysis: Not following personal values either due to lack of information or out of fear of the consequences of actions.
5. Ethical hypocrisy: Not following the same values others are expected to follow. 6. Ethical schizophrenia: Not making the same ethical decisions in different situation due to an incoherent set of
values—for example, acting one way at work and another way at home. 7. Ethical complacency: Not believing that one is vulnerable to unethical behavior or can do wrong.
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Elise Amendola/Associated Press
Malden Mills owner Aaron Feuerstein receives thanks from his employees for continuing to pay them while his burned down plant was rebuilt. He is an excellent example of the stewardship of leadership.
2.8 Two Ethical Leadership Styles: Stewardship and Servant Leadership Two examples of these leadership styles include a classic and current one: the classic example of Aaron Feuerstein, a past CEO of a manufacturing plant in Massachusetts, and a recent example of Arthur T. Demoulas, CEO of the grocery chain Market Basket, also in Massachusetts.
Aaron Feuerstein and Malden Mills
Aaron Feuerstein, a third-generation owner of Malden Mills in Lawrence, Massachusetts, suffered his factory burning to the ground on December 11, 1995. Feuerstein had the option of using the insurance money to rebuild the plant, but he instead paid the salaries and complete bene�its of all the 3,000 workers for 6 months while the factory was rebuilt. He later said that he had no other option than to help the employees. His action was based on his study of the Talmud, he told Parade Magazine:
I have a responsibility to the worker, both blue-collar and white-collar. I have an equal responsibility to the community. It would have been unconscionable to put 3,000 people on the streets and deliver a deathblow to the cities of Lawrence and Methuen. Maybe on paper our company is worthless to Wall Street, but I can tell you it’s worth more (Ryan, 1996).
Feuerstein exempli�ies the two ethical leadership styles of stewardship and servant leadership, which focus speci�ically on how leaders work with followers. (Ethical leadership as a whole concerns the leader’s characteristics and encompasses actions in both the internal and external organizational environment.) Stewardship is concerned with empowering followers to make decisions and gain control over their work. Servant leadership involves sel�lessly working with followers to achieve shared goals that improve collective, rather than individual, welfare. There is a wealth of information on both of these styles. We will brie�ly address both here, as both involve treating followers with respect—a key component of ethical leadership—and endowing followers with the ability to grow both personally and professionally.
The stewardship approach instructs leaders to lead without dominating followers. Leaders who practice stewardship sincerely care about their followers and help them develop and accomplish individual as well as organizational goals. Effective stewardship breeds a team-oriented environment in which everyone works
together. Organizations led by steward leaders are marked by decentralized decision making—that is, leadership is not centered in one person, group, department, or administrative unity; power is distributed among all stakeholders (Lussier & Achua, 2006). Former President Jimmy Carter is an example of a contemporary steward leader. His mission and hands-on help in sponsoring, funding, and helping build housing for the unfortunate has demonstrated this leadership style.
The servant-leadership approach was formulated by Robert K. Greenleaf, who believed that leadership is a natural corollary of service (1998). Servant leadership goes beyond stewardship by requiring leaders to eschew personal accolades and devote themselves entirely to a greater cause. Greenleaf stated, “The essential quality that separates servant leaders from others is that they live by their conscience—the inward moral sense of what is right and wrong. That one quality is the difference between leadership that works and leadership—like servant leadership—that endures” (1977). The following aspects are central to servant leadership:
1. Placing service before self-interest. The servant leader’s primary concern is helping others, not receiving recognition or �inancial reward.
2. Listening to others. Servant leaders recognize the importance of listening to the ideas and concerns of stakeholders; they never attempt to impose their will on others. This aspect allows servant leaders to strengthen relationships, understand group needs and dynamics, and effectively allocate resources to improve the group’s welfare.
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3. Inspiring through trust. As we discusser earlier, ethical leaders must be trustworthy. It does not take much effort for servant leaders to be truthful because they usually have strong moral convictions.
4. Working toward feasible goals. Servant leaders realize that many problems cannot be solved by one person. They also tackle the most pressing issues facing their groups.
5. Helping others whenever possible. Servant leaders lend a helping hand when the opportunity arises. An example is the district manager of a fast-food chain. She helps part-time employees �lip burgers during a lunchtime rush hour. Another is the director of a business unit who observes that a team is short a member and needs help in meeting a deadline; the director joins the team for the afternoon to help meet the deadline.
These two leadership styles differ from the others discussed so far in this text in that the leaders’ mind-set is geared toward championing their followers. These ethical leaders view no follower, regardless of his or her level of skill, readiness, or willingness, as someone who cannot be supported and helped. They also believe that followers perform higher and better when supported and cared for. This is not to say that such leaders are naive and can be gamed by cunning followers trying to get out of work. The mental model (or mind-set) of these leaders espouses Theory Y (from Chapter 1): It is based on a deeply felt belief that individuals and teams are inherently valued as human beings who also happen to be employees. (This is a universalist, altruist ethic.) In some ways, steward and servant leaders demonstrate Kouzes and Posner’s �ive dimensions of transformational leadership: They can ethically model the way, inspire a shared vision, challenge the process, enable others to act, and encourage the heart in a way that exceeds transactional, transformational, and even charismatic leaders. Take Assessment 2.1 to assess your own servant leadership orientation. Another way of understanding the distinguishing characteristics of servant leadership is offered by DeGraaf, Tilley, and Neal:
The main assumption is that true leadership should call us to serve a higher purpose, something beyond ourselves. One of the most important aspects of leadership is helping organizations and staff identify their higher purpose. The best test of the servant-leadership philosophy is whether or not customers and staff grow as persons! Do customers become healthier, wiser, freer, more autonomous, more likely themselves to become “servants”? And, what is the effect on the least privileged in society? Will they bene�it? Or, at least, not be further deprived? To achieve this higher purpose of public organizations, you, as a leader, must be passionate about your desire to improve your community and yourself ! (2004)
Arthur T. Demoulas1 (http://content.thuzelearning.com/books/Weiss.6184.19.1/sections/ch02sec2.8#chapter2note1) and Market Basket Supermarkets
Arthur T. Demoulas recently reclaimed 50.5% ownership of his family’s 100-year-old, 71-grocery chain in Massachusetts, Maine, and New Hampshire from a feuding cousin with whom he had battled for control since June 2014. That feud gained national and international attention because it was characterized as a battle between cousins: Arthur T. a benevolent, employee/customer-centered and stakeholder leader, versus Arthur S. (his cousin) who allegedly was a stockholder-oriented leader, concerned more about pro�its, ef�iciency, and controlling costs even if it involved laying off employees or closing parts of the company. At stake for Arthur T. was the possible closing of the entire chain, his founding grandfather’s legacy; loss of 25,000 loyal employees’ jobs; an extraordinarily large, dedicated customer base; and a way of life he had known and loved since childhood. Although pride and competition among family members was probably also involved, neither cousin had to be that concerned about personal wealth.
Arthur T.’s business ethic and steward leadership style were evident in the personal as well as professional sacri�ice that thousands of the chain’s employees made by not returning to work (and being without pay) when the cousin �ired Arthur T. In fact, employees revolted during the summer of 2014 by picketing the stores the cousin and his newly appointed managers were trying to run; consequently, suppliers and vendor services were disrupted and some interested customers were hindered from shopping. After all, the “take-care-of-your-customers and value-your- workers” Cooper, D. (2014 August 13). What’s lost in the Market Basket stories. Working Economics Blog. Washington D.C.: Economic Policy Institute: Retrieved from: http://www.epi.org/blog/whats-lost-market-basket-stories/ (http://www.epi.org/blog/whats-lost-market-basket-stories/) philosophy of Arthur T. had a legacy: fair but generous compensation practices, pro�it-sharing, and promotion from within had resulted in very low turnover rates and an
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Elise Amendola/Associated Press
Arthur T.’s business ethic and steward leadership style were evident in the personal as well as professional sacri�ice that thousands of the chain’s employees made by going on strike without pay when he was suddenly ousted as the head of Market Basket.
enduring institutional memory resulting in higher pro�its than the competitors had made, despite offering lower prices (Cooper, 2014).
For example, after Arthur T. regained ownership of the company, Ann Rogers, 55, a protesting employee who had worked in the company’s accounts payable department commented “It’s just fantastic. I’ve been working with this company for 28 years, and this has been hanging over the company’s head the whole time. This �ight was absolutely worth it.” Also, a few weeks before Christmas, the workers, who openly asked customers to boycott their stores until Arthur T was reinstated, received bonus checks totaling $49 million. An average of $2,000 was paid to each of the 25,000 employees—the amounts were based on longevity on the job, hours worked, and position. “It’s of�icial now—we won,” said Micum McIntire, who is the manager of Maine’s only Market Basket store.
Whether or not, and the extent to which, Arthur T. can pay back the debt and continue to grow is yet to be seen. “David Livingston, a supermarket industry analyst at DJL Research in Milwaukee, predicted 80 to 90% of customers will return.” “To have an internal uprising of just about everyone, without a union, is very unusual in American industry,” said David Lewin, professor of management at the University of California, Los Angeles. “And it’s even more unusual for workers to say, ‘We want this guy to come back’—and to have him actually come back.”
Cooper (2014) at The Economic Policy Blog wrote that we should not have to rely on a CEO’s benevolence to ensure that anyone’s job is a “good job.” Rather, we could follow Arthur T.’s leadership practices at Market Basket:
. . . guarantee workers commonsense bene�its like paid vacation and family leave. We could update overtime rules to ensure that ordinary workers get overtime when they work more than 40 hours per week. We could build public retirement programs accessible to anyone not offered a retirement plan through their job. We could raise the minimum wage back up to where it provides at least enough for someone to survive without relying on public assistance. We could strengthen labor laws so workers have the ability to organize and bargain collectively for better pay, bene�its, and working conditions without fear of being �ired. (Cooper, 2014)
Although not everyone might agree with these business practices, they seemed to have worked in the marketplace for Arthur T. Demoulas. They also represent a stakeholder and stockholder perspective that includes ethical principles of fairness, character traits of authenticity, caring for others, including the common good with pro�itability.
Assessment 2.2: Your Servant-Leadership Orientation
Instructions
Think about situations in which you were in a formal or informal leadership role in a group or organization. Imagine using your personal approach as a leader. To what extent does each of the following statements characterize your leadership? Please answer whether each item is mostly false or mostly true for you.
Mostly False Mostly True
1. My actions meet the needs of others before my own. ___________ ___________
2. I explicitly enable others to feel ownership for their work. ___________ ___________
3. I like to consult with people when making a decision. ___________ ___________
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4. I’m a perfectionist. ___________ ___________
5. I like to be of service to others. ___________ ___________
6. I try to learn the needs and perspectives of others. ___________ ___________
7. I consciously utilize the skills and talents of others. ___________ ___________
8. I am assertive about the right way to do things. ___________ ___________
9. I give away credit and recognition to others. ___________ ___________
10. I believe that others have good intentions. ___________ ___________
11. I quickly inform others of developments that affect their work. ___________ ___________
12. I tend to automatically take charge. ___________ ___________
13. I encourage the growth of others, expecting nothing in return. ___________ ___________
14. I value cooperation over competition as a way to energize people. ___________ ___________
15. I involve others in planning and goal setting. ___________ ___________
16. I put people under pressure when needed. ___________ ___________
Scoring and Interpretation
There are four subscale scores that represent four dimensions of leadership. For the dimension of authoritarian leadership, give yourself one point for each mostly true response to questions 4, 8, 12, and 16. For the dimension of participative leadership, give yourself one point for each mostly true response to questions 2, 6, 10, and 14. For the dimension of stewardship, give yourself one point for each mostly true response to questions 3, 7, 11, and 15. For the dimension of servant leadership, give yourself one point for each mostly true response to questions 1, 5, 9, and 13.
My leadership scores are: Authoritarian:________________; Participative:________________; Stewardship:________________; Servant:________________. These scores represent four types of leadership—authoritarian, participative, stewardship, and servant—as described in the text A score of 3–4 on any of these dimensions is considered above average, and a score of 0–1 is below average. Compare your four scores to each other to understand your approach to stewardship and servant leadership. On which of the four dimensions would you like to have the highest score? The lowest? Study the speci�ic items you called mostly true or mostly false to analyze your pattern of strengths and weaknesses. It is not possible to display all four dimensions of leadership simultaneously, so you should think about the dimension you want to emphasize to re�lect your leader ideal.
Source: Daft, R. L. (2011). The leadership experience (5th ed.). Mason, OH: Cengage Learning. Copyright 2011 by Cengage Learning.
Note 1. (http://content.thuzelearning.com/books/Weiss.6184.19.1/sections/ch02sec2.8#chapter2note1-backlink) These excerpts are based on and quoted from the following sources: Ross, C. (2014). Market Basket deal ends bitter feud. The Boston Globe. Retrieved from http://www.bostonglobe.com/2014/08/27/deal-sell-market-basket- arthur-demoulas-has-been-signed/w9cj3I5GjanMthHzXGk11K/story.html (http://www.bostonglobe.com/2014/08/27/deal-sell-market-basket-arthur-demoulas-has-been- signed/w9cj3I5GjanMthHzXGk11K/story.html) ; Horowitz, E. (2014). The Boston Globe. The saga of Demoulas’ Market Basket. http://www.bostonglobe.com/business/2014/07/14/the-saga-demoulas-market- basket/S1D7gi92dqfJYZzr9FIBCJ/story.html (http://www.bostonglobe.com/business/2014/07/14/the-saga- demoulas-market-basket/S1D7gi92dqfJYZzr9FIBCJ/story.html) ; Murphy, E. (2014). With Market Basket’s popular president in full control, workers’ loyalty repaid. Portland Press Herald. Retrieved from http://www.pressherald.com/2014/12/12 /arthur-t-demoulas-formally-becomes-owner-of-market- basket/ (http://www.pressherald.com/2014/12/12/arthur-t-demoulas-formally-becomes-owner-of-market-basket/)
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Summary & Resources
Chapter Summary What do ethics have to do with leadership? A more relevant question in leadership studies and practice is not only, or even mainly, about the question ‘‘What is leadership?’’ It is about the question ‘‘What is good leadership?’’. Doing the right thing, following principles of not harming others, showing authentic concern for the common good of others— stakeholders and stockholders—puts ethics at the heart of good leadership. “Leaders worthy of the name, whether they are university presidents or senators, corporation executives or newspaper editors, school superintendents or governors, contribute to the continuing de�inition and articulation of the most cherished values of our society. They offer, in short, moral leadership.” (Gardner, 1965 pg. 134)
Values-based ethical leadership, however, is not only about one leader’s or individual’s character or example in an organization, although leaders set the “moral tone at the top.” Ethical leadership in organizations also in�luences persons, processes, and systems. Authentic leaders have positive psychological capital, that is, personal resources such as con�idence, optimism, hope and resiliency; integrity; and self-awareness and regulation. Authentic leaders also possess characteristics of stewardship and servant leadership, which includes putting the interests of others before one’s own.
The dark side, unethical side of leadership includes symptoms of moral immaturity, that is, operating more from a self- orientation, acting arrogantly and recklessly, and eliminating anyone who might challenge the leader’s decisions. Understanding the classical ethical principles of decision making (utilitarianism, universalism, justice, rights, the common good, virtue ethics, and ethical relativism) informs us not only of the principles that actually characterize our current behaviors (“How ethical are you?”) and those who lead us, but principles to which we wish to aspire.
Understanding your ethics, values, and decision-making style prepares you to also understand the ethics of leaders, peers, and others with whom you work and study. Authenticity can be learned, as can practicing ethical principles and ways of being and doing good inside and outside companies, because ethical leadership is also everybody’s business.
Web Resources The First Follower
http://www.youtube.com/watch?v=fW8amMCVAJQ (http://www.youtube.com/watch?v=fW8amMCVAJQ)
An entrepreneur offers a humorous take on leaders and followers.
Transformational Leadership Summary
http://www.youtube.com/watch?v=vI8GC�bdigI (http://www.youtube.com/watch?v=vI8GC�bdigI)
A business professor offers a summary of some of the key points of transformational leadership.
The Leadership Challenge Website
http://www.leadershipchallenge.com/WileyCDA/ (http://www.leadershipchallenge.com/WileyCDA/)
This website provides more details and background on Kouzes and Posner’s work.
Between the Lines With Jim Kouzes
http://www.youtube.com/watch?v=lM5HeehxHQQ (http://www.youtube.com/watch?v=lM5HeehxHQQ)
Jim Kouzes discusses the leadership challenge on the TV show Between the Lines.
Herb Kelleher on People
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http://www.youtube.com/watch?v=oxTFA1kh1m8 (http://www.youtube.com/watch?v=oxTFA1kh1m8)
The Southwest CEO describes his philosophy on how the business of business is people.
Ken Blanchard on Servant Leadership
http://www.youtube.com/watch?v=o3piSk1j668&feature=related (http://www.youtube.com/watch? v=o3piSk1j668&feature=related)
Servant leadership expert Ken Blanchard talks about how to spot a self-serving leader versus a true servant leader.
Critical Thinking Questions 1. Do you agree that values-based leadership is both a realistic and necessary orientation that leaders in business,
government, and other sectors should adopt? Explain. 2. Does the moral maturity level of a leader matter? Why and for whom? Refer to the framework in this chapter in
your response. 3. Which ethical approach presented in the chapter do most, if not all, business and government leaders generally
use? Why? What are the upsides and downsides for using this approach? 4. Is virtue ethics really a “principle” that can be used to prevent and help resolve ethical dilemmas in business
and the workplace? Explain your reasoning. 5. In what ways is authenticity related to being and acting ethical as a leader and follower? Offer an example of an
authentic and an inauthentic leader in the current media or news. 6. What other symptoms of unethical leadership have or have you observed in leaders you know in organizations,
including educational institutions? How do or have these symptoms affected you—your satisfaction, productivity, relationships?
7. Argue why servant and steward leadership styles are both practical and impractical in the real world of work. After articulating these arguments, what do you believe with regard to this question? Explain.
Key Terms
authenticity
business ethics
ethical business leadership
ethical relativism
ethics
justice
level of moral maturity
rights
servant leadership
stewardship
the common good
universalism
utilitarianism
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values-based leadership
virtue ethics
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3 Trait and Personality Factors
iStock/Thinkstock
Learning Outcomes
After completing this chapter, you should be able to:
1. Explain how traits and personality in�luence leadership behavior.
2. Identify the Big Five personality characteristics and explain how they relate to leadership.
3. Describe emotional intelligence and how this theory relates to leadership.
4. Explain how narcissism and Machiavellianism can derail leaders.
5. Describe how the Myers–Briggs Type Indicator is used to understand leadership behaviors.
6. Describe entrepreneurial leadership and decision making. Explain why “intrapreneurship” is an important leadership process.
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Leadership theory has evolved over time, often paralleling and re�lecting changes in our economic structure and workplace environments. In more stable preindustrial times of the 19th century when our society was largely agrarian, early leadership scholars were in search of speci�ic traits, or distinguishing qualities or characteristics of a person’s nature, that de�ined a successful leader. The pursuit of a speci�ic set of traits became known as the “Great man” theory of leadership—meaning that there was a de�initive set of qualities that made a person an exceptional leader.
Personality theory, that is, “individual differences in characteristic patterns of thinking, feeling and behaving” (American Psychological Association, 2015), also emerged in the 19th century, but it was popularized with the development of the Myers–Briggs Type Indicator (MBTI) in 1943, when employers started to become more selective about who they hired and why. By the 1940s, the work environment was still stable but organizations grew in size, bureaucracies emerged, and the position of “manager” and rational planning evolved. Ef�iciency and predictability were emphasized in the study of leadership and organizations.
From the 1950s through the 1970s, the work environment moved from stable to more complex. Leadership theorists turned to the study of behaviors, motivation, and how to match leaders with followers in particular contexts. During the 1960s and 1970s, as organizations continued to change, cross-functional teams and horizontal structures were created. Group processes and contingency theory emerged, that is, the study of leadership styles that “�it” with followers and the work context. But ef�iciency was still valued and leadership theory focused on transactions (exchanges) between leader and follower, rather than transformations.
From the 1970s through the 1990s, the work environment became increasingly globalized and even more complex and competitive. Leadership studies turned the focus to leaders as transformational, change champions who in�luenced followers through relationships. In recent decades, leadership theory has further evolved due to the in�luences of the Internet, information technologies, and an increasingly diverse workforce. Leadership studies began to focus on change, teams, and variations of previous leadership concepts. Now trait and personality theory, behavioral and contingency theory, leader–follower exchanges, and group and team processes are used in conjunction with one another to further our understanding of what makes effective leaders and leadership.
The increased emphasis on stakeholders and stockholders inside and outside of the organization requires a wider range of competencies, thus the emergence of ethical leadership, strategic communication, high-performance cultures, negotiation, con�lict management, and always people—individuals, teams, and groups.
So, then, what make a great leader? What distinguishes leaders from others? Are leaders born or made? These are questions we have puzzled over throughout history. In attempting to answer such questions, early theories, as previously discussed, focused on traits and personality characteristics with the hope of �inding the “magic ingredients” of leadership. Although certain traits can, according to recent research, predict the emergence and appearance of leadership, traits and personality characteristics alone cannot distinguish between effective and ineffective leadership (Robbins & Judge, 2015). However, research has shown that both traits and personality matter with regard to predicting organizational outcomes, such as leader–follower relationships, job satisfaction, organizational commitment, leadership promotion and development (Nichols & Cottrell, 2014).
Personality theory, which encompasses trait theory, provides a broader context. Personality is the combination of physical, mental, emotional, and social characteristics and traits. Traits and personality theory, shown in the dimension of leadership in Figure 1.1 (in Chapter 1) are examined more closely in this chapter. We will discuss how leadership can be developed and how certain personality traits can be learned and used to pave the way for leadership practices. As you read, consider your own personality and traits as they relate to your approach to leadership. Or, perhaps consider the personality and traits of leaders you admire and think about how they all �it into the theories presented. Assessments in this chapter provide information to help you understand your own evolving leadership style and the styles of others. To get started, take the Big Five personality assessment at http://personality-testing.info/tests /BIG5.php (http://personality-testing.info/tests/BIG5.php) . Scroll down to take either the 50-item or the 100-item version. Your results will be explained later in this chapter.
This chapter begins with discussing the trait theory and the personality approach to leadership, which today focuses heavily on the Big Five personality traits. We then examine emotional intelligence (also known as EI or EQ) and other leadership characteristics related to personality. Finally, we examine the popular Myers–Briggs Type Indicator (MBTI) assessment that’s commonly used in the workplace. We conclude with a discussion about entrepreneurial leadership and decision making with regard to personality.
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Branson: Paul Kane/Getty Images News/Thinkstock; Schultz: Ted S. Warren/Associated Press
Richard Branson and Howard Schultz share entrepreneurial traits. Schultz is more contemplative; Branson is more fun loving and risk taking.
3.1 Trait Theory One of the �irst modern efforts to scienti�ically study leadership was trait theory. Researchers in the early 1900s were interested in why certain people became leaders and others did not. They studied military, political, and religious �igures —Jesus, Mahatma Gandhi, Abraham Lincoln, Napoléon Bonaparte, Joan of Arc, and others—and focused on identifying leadership traits, or innate individual characteristics that might result in a good leader. Their conclusion: Great leaders were born, not made.
The “great man” theory, as it was called, would give rise to what is now known as trait theory. Initially it was called into question; researchers examining the early studies noted that although these “great men” did share some characteristics, the theory overall failed to take a leader’s situational context into account (Stogdill, 1948). In other words, people who are leaders in one situation may not be leaders in a different kind of situation. However, Stogdill would later revive the trait approach when he empirically showed that certain traits did support effective leadership across various situations (1974). These traits included dependability, cooperativeness, assertiveness, initiative, dominance, high energy, self- con�idence, stress tolerance, responsibility, achievement orientation, adaptability, cleverness, persuasiveness, organizational and speaking abilities, risk taking, and originality.
Later researchers isolated other traits. Kirkpatrick and Locke (1991) found in their qualitative studies that task knowledge, con�idence, motivation, drive, cognitive ability, and integrity differentiate leaders from nonleaders. Other researchers have found that leaders have certain traits related to social intelligence, that is, the understanding and awareness of their own and others’ emotions, feelings, behaviors, and thoughts, as well as the ability to self-monitor and respond to different situations (Marlowe, 1986; Zaccaro, 2002). More recently, Zaccaro, Kemp, and Bader (2004) found higher intelligence, reasoning, and verbal and perception abilities in leaders compared to nonleaders. These researchers caution that leaders who have higher intelligence than their followers may experience problems relating to the followers because of the leaders’ advanced ideas.
Contemporary researchers have argued that optimism, drive, self- con�idence, honesty, and integrity are particularly important for effective leadership (Jones, 2005). These particular traits are discussed in more depth here because they are particularly relevant to the leadership theories discussed in subsequent chapters.
Optimism refers to having a positive outlook or thinking positively. Optimistic leaders tend to see the good in people and organizations and believe in favorable results. This doesn’t mean optimistic leaders are blind to the negative; they are simply able to see possibilities and seek opportunities. Imagine if Apple® CEO Steve Jobs had stopped at Macintosh computers, or if he had allowed a power struggle with the company’s board to halt his career. (This happened in the 1970s, and Jobs went on to found another company before returning to Apple and spearheading the launch of its vanguard cell phone and tablet.) Stephen McDonnell, founder and CEO of Applegate Farms, the leading
producer of organic and natural meats and cheeses is widely quoted as arguing that optimistic attitudes are the most commonly observed characteristic in top-level executives. Optimism is a main characteristic of leaders (Daft, 2011). Furthermore, optimistic leaders instill and inspire similar attitudes in others. They demonstrate more self-con�idence, believing in themselves and showing more assurance in their own skills, abilities, decisions, and visions. Self-con�ident, optimistic leaders are not paralyzed by fear or anxiety and can therefore more readily lead others to face uncertainty and challenging situations.
Drive can be described as determination, motivation, or compulsion that leads to increased effort. Driven leaders seek achievement, show tenacity, and are perceived as ambitious ( Kirkpatrick & Locke, 1991). In other words, they work
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Bernie Madoff was sentenced to 150 years in prison in 2009 for running the biggest fraudulent Ponzi scheme in U.S. history. He lured investors into his investment scheme, taking $65 billion. He was charged with fraud, money laundering, perjury, and theft (Yang, 2014).
hard. Effective leaders also often tap into their followers’ drive. A management strategy called ROWE—which stands for “results-oriented work environment” and was �irst introduced at Best Buy—evaluates employees by the results they produce, not the schedules they keep. Google cofounder and CEO Larry Page supports a “20% program,” in which professional engineers can use 20% of their time to create and team up on projects they like. Such approaches involve giving “people autonomy over what they’re doing and how they do it, an opportunity to master it and a sense of purpose in doing it in the �irst place” (Spiers, 2010; see also Pink, 2009).
Honesty can be de�ined by what it is not: lying, and knowingly and willingly deceiving others. Integrity means wholeness of character; a leader with integrity is integrated and balanced, and acts ethically. A survey of 1,500 managers identi�ied honesty and integrity as the most desired values in leaders.
Honesty, as a dimension related to ethics discussed in chapter 2, is absolutely essential to leadership. After all, if we are willing to follow someone, whether it is into battle or into the boardroom, we �irst want to assure ourselves that the person is worthy of our trust. We want to know that he or she is being truthful, ethical, and principled. We want to be fully con�ident in the integrity of our leaders. (Kouzes & Posner, 1993, p. 138– 139/2012)
Integrity and honesty are also related to the survival and success of corporations. Bernard Madoff, currently serving a 150-year prison term for $17 billion investor fraud and who in 2014 suffered a heart attack, is a recent business example of dishonesty and greed. Classic examples of corporate scandals—Enron, Tyco, WorldCom, Arthur Andersen, and other prestigious �irms—at the turn of this century have taught us that honesty counts. Enron—the former energy, commodity, and services company—speci�ically became synonymous with corporate corruption and greed after executives decided to hide the company’s true �inancial condition via suspect accounting practices. The company and its former executives paid the consequences: Enron had to divest and sell its North American power utility, gas pipeline assets, and global interests in utilities and power plants, and paid out more than $21.6 billion to its creditors between 2004 and 2010 (“Enron Creditors Recovery Corp”). Former president Ken Lay and former CEO Jeff Skilling were found guilty on multiple charges, including fraud, making false statements to accountants, and insider trading. Ken Lay died of a heart attack in 2006 before being sentenced to a life term in jail, and as of 2011, Jeff Skilling was still serving a 24-year prison sentence, that was reduced in 2013 by 10 years. However, the fallout extended far beyond those two men: Thousands of employees at Enron and the other �irms lost almost all of their pension savings.
Trait theory is based on considerable research and has broad appeal; people like to perceive leaders in terms of certain traits. However, although the traits discussed here have shown to be associated with leadership, no traits, with the exception of the Big Five discussed in the next section, have been linked to successful organizational outcomes or performance, and it is dif�icult to predict how leaders with certain traits would be effective in organizational situations. (We will discuss this more in later sections.) However, the trait theory approach does serve a purpose in the workplace. As we will discuss further in the following section on personalities, trait theory provides some insight into what makes a good leader.
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Personality is a powerful concept that can provide insights into how leaders, followers, and professionals make decisions and in�luence relationships
3.2 Personality Approach The word personality is often associated with people who are either popular and well liked or are unpopular and not very well liked—that is, we tend to say a person has a “good personality” or not. This oversimpli�ication of the concept can be misleading. As part of social science and organizational behavior studies, personality is a powerful concept that organizes individual capacities, emotions, and motives (Wang, 2010), and can provide insights into how leaders, followers, and professionals make decisions and in�luence relationships. It is a useful tool.
Are leaders made or born? There is consensus among scholars that personality is partly hereditary but also developed. Although personality can and does change, it is more changeable in adolescence according to some researchers (Hampson & Goldberg, 2006). Knowing a person’s personality pro�ile does not predict who will be an effective or ineffective leader, but as we discuss in the following sections, there are personality characteristics that do indicate effective, emergent leadership practices. Also, personality theory is another tool and concept you can use to help you better understand yourself as an evolving or current leader as well as understanding the actions and behaviors of leaders around you.
Personality theory provides a broader context of which trait theory is a part. Personality is the combination of physical, mental, emotional, and social characteristics and traits. It can be the way people act and react to others (Robbins & Judge, 2015), and it affects an individual’s perceptions and behaviors. Unlike the great man theory and early research on traits, some personality characteristics have been linked to leadership effectiveness. Leaders bene�it by knowing their personality characteristics. First, they can increase their own self-awareness and awareness of others. Research (Palmer, Green, Duncan, & Zarate, 2013), as well as practical experience, shows that leaders’ personality characteristics in�luence followers. Second, they can learn to adjust their personal style to accommodate their followers. Finally, they can adapt their communication and personal style to enhance performance. We will examine two personality theories that are among the most popularly used by corporations worldwide and are of interest to current scholars: the Big Five personality model and the Myers–Briggs Type Indicator (MBTI). We will also discuss emotional intelligence. But �irst let’s start with the dark side of personality.
Dark Side of Personality
In an attempt avoid glorifying the nature of leadership and the personalities of those who lead, scholars have written about the “dark side” of personality. We will point out some of these critiques in different chapters throughout the text, but let’s touch on what the dark side of personality actually means.
Slattery (2009), for example, de�ines the dark side of leadership as “an ongoing pattern of behaviour exhibited by a leader that results in overall negative organisational outcomes based on the interactions between the leader, follower and the environment. Organisational goals, morale and follower satisfaction are thwarted through the abuse of power and self-interest of the leader” (p. 4). Other authors have referred to the dark side of leaders as “toxic,” “destructive,” “petty tyrants,” “aversive,” “arrogant,” and derailed (Slattery, 2009).
Other scholars, such as Hogan and Hogan (2001), provided 11 dark side personality traits: excitable, skeptical, cautious, reserved, leisurely, bold, mischievous, colorful, imaginative, diligent, and dutiful. Ashforth (1994) noted that the signs of dark side leadership also include behaviors such as “self-aggrandisement, belittling followers, lack of consideration for others, a forcing style of con�lict,” punishment for no reason, discouraging initiatives, and undermining organizational goals and the well-being of followers (Slattery, 2009, p. 3).
This is all to say that personality is complex. Personal beliefs, values, and motivation, in addition to situational and relational factors, all play a part in helping us understand leadership and how particular personalities manifest
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themselves. Having a charming personality could compel followers, but we need to be mindful of where it is we’re being led.
The Big Five Personality Characteristics
The Big Five personality characteristics—which have also been referred to as “traits”—are the product of decades of research (Digman, 1990) and have shown the most promising empirical results related to leadership effectiveness. The model condenses 25 years of research into �ive general characteristics (or factors) that make up personality. Studies con�irm that there is a relationship between these characteristics and job performance (Barrick & Mount, 2004; Oh & Berry, 2009). According to this model, any individual’s personality you wish to describe is based on the following characteristics:
1. Extraversion: The extent to which a person is outgoing, excitable, sociable, talkative, assertive, and emotionally expressive. Highly extroverted leaders can also exert high-energy, take-charge, determined attitudes and behaviors. Extraversion also relates to dominance, that is, leaders who are assertive, competitive, and have a take-charge approach to getting things done. Opposite the spectrum of extraversion is introversion—individuals who are more often energized by re�lecting through thinking and taking time to observe and process information, and who relate to individuals more comfortably than to large groups. Extraversion has been shown to be the most predictive characteristic of effective emergent leadership (Judge, Bono, Ilies, & Gerhardt, 2002). Note that being too assertive and dominant can also result in decreased leader effectiveness (Ames & Flynn, 2007).
2. Agreeableness: The extent to which a person shows trust, cooperation, compassion, kindness, affection, and understanding. Agreeableness is also related to being sensitive, af�iliative, and sociable (Jokisarri & Nurmi, 2009), that is, paying attention to others, forming relationships, and being friendly and approachable. This trait is related to emotional intelligence, discussed later in the chapter. Agreeable people are generally more liked than disagreeable individuals, are more “compliant and rule abiding, less likely to get into accidents, and more satis�ied in their jobs” (Robbins & Judge, 2015, p. 127). However, agreeable people participate in citizenship behavior, contributing to organizational performance and not showing organizationally deviant behavior (Ilies, Fulmer, Spitzmuller, & Johnson, 2009).
3. Conscientiousness: The extent to which a person is thoughtful, goal directed, dependable, organized, and mindful of details. Conscientiousness and openness, next to extraversion, indicate a strong association to leadership. Because conscientiousness and extraversion are also positively related to leadership self-ef�icacy (Ng, Ang, & Chan, 2008)—that is, an individual’s belief about her or his ability to produce outcomes—it follows that this personality characteristic, and that of extraversion, are also related to leadership performance (Robbins & Judge, 2015).
4. Neuroticism (Adjustment): The extent to which a person is emotionally unstable, anxious, moody, irritable, less self-con�ident, and prone to sudden emotional outbursts. A question for leaders and followers with regard to this dimension is how to manage one’s emotions. Effective management of emotions results in self-control, stability, calmness, and maintaining composure in dif�icult and crisis situations. Composure and being relaxed is also associated with higher self-con�idence, more positive attitudes, and being able to offer constructive and uplifting feedback. At the opposite end of this spectrum, as noted above, is a loss of self-control and self- - con�idence, symptoms of which often manifest as nervousness and irritability that can lead to negativity, narcissistic behaviors, and even hostility.
5. Openness: The extent to which a person is imaginative, �lexible, insightful, and intellectually curious and sensitive. Being open to new experiences encourages creativity, innovation, and the ability to deal with complexity and ambiguity—all are important characteristics needed for change and exploration. A study by Palmer et al. (2013) showed that participants’ personalities who are more extraverted and open to new experiences “believe Directive Leadership contributed to being an outstanding leader and, conversely, that the more extraverted and open to new experiences the participants, the less they believed Bureaucratic Leadership contributed to outstanding leadership, and the more they believed that Self- Serving Leadership inhibited outstanding leadership” (p. 62). At the same time, those who are more open to experiences may also be more prone to workplace accidents (Clark & Robertson, 2008). The opposite end of the spectrum of openness is close- mindedness which indicates in�lexibility, not having resilience, and not being able to adapt to change— characteristics that do not contribute to effective leadership in�luence and performance.
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Big Five Continuum
Another way of understanding the Big Five model is to view the characteristics on a continuum, that is, to what extent and under what conditions are you extraverted or introverted, agreeable or antagonistic, conscientious or lacking integrity and dependability, able or unable to control your emotions, and open or closed to new experiences?
1. Extraversion ................................................................................................................. Introversion 2. Agreeableness ............................................................................................................. Antagonism 3. Conscientiousness........................................................................................ Unscrupulousness 4. Neuroticism/Adjustment ......................................................................... Emotional stability 5. Openness to experience................................................................................ Closed-mindedness
A meta-analysis—an analysis that combines and synthesizes the results of several separate and related studies—of leadership and personality studies between 1967 and 1998 found that four of the traits from the Big Five theory were strongly associated with being an effective leader: in order of strongest effect, extraversion and conscientiousness, openness, and low neuroticism. Studies have also largely supported the idea that the Big Five theory is universally applicable across cultures, despite differences in language, history, religion, political systems, and other cultural features (Paunonen et al., 1996; Triandis & Suh, 2002; Yamagata et al., 2006). As will be discussed in later chapters, culture affects behaviors and values, which in turn can affect how coworkers interact with one another. The Big Five theory has provided evidence for accessing personality characteristics across cultures.
In addition to the assessment source offered earlier, take the brief Five Factor Personality Test (at http://www.personalitytest.org.uk (http://www.personalitytest.org.uk/) ), then re�lect on your experiences and personal style at work, at home, and with friends. Do your experiences agree with or differ from your Big Five assessment results? In what ways can this assessment be helpful to you as a developing leader?
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3.3 Emotional Intelligence (EQ) Emotional intelligence, abbreviated EI or EQ (as in IQ, only here we are discussing emotional elements of intelligence), is a person’s ability to be self-aware (recognize one’s emotions when experienced), notice emotions in others, and manage emotional cues and information. An emotionally intelligent leader is able to effectively manage oneself and others ( Goleman, 2000) and is further able to use the power of emotional energy to inspire, motivate, understand, and improve the morale of organization members and teams. One researcher attributed Abraham Lincoln’s enormous power as a president to emotional intelligence, not to IQ, charisma, or political ability (Kauffman & Coutu, 2009). Another study, which examined the successes and failures of 11 U.S. presidents (from Franklin Roosevelt to Bill Clinton), found that the main characteristic differentiating the successful (e.g., Roosevelt, Kennedy, and Reagan) from the unsuccessful (e.g., Johnson, Carter, and Nixon) was emotional intelligence (Smola & Sutton, 2002). Emotional intelligence can be learned and practiced.
One research study indicated that effective leaders use different components of emotional intelligence. Goleman (2000) grouped these various capabilities into four basic classi�ications, as shown in Figure 3.1: self-awareness, self- management, social awareness, and relationship management.
Figure 3.1: Emotional intelligence—four dimensions
Self-awareness is the foundation for the other three emotional capabilities. When leaders are not self-aware, it is doubtful they can be aware of others. Being self-aware means being able to see and understand your emotions and feelings and how they affect you in your work and private life. As a result, you can accurately evaluate your weaknesses and strengths. You also have more self-con�idence and trust in your own instincts, particularly when there are no answers from other sources. A self-aware leader is better able to “see reality” in complex situations and in other people.
Self-management, the second important capability, is the ability to control moods, emotions, and desires that can be problematic and disruptive. This doesn’t mean suppressing, avoiding, disguising, or denying these feelings; it means understanding them (Weisinger, 1998). Thus, those around you can be assured that you will be consistently authentic and honest with them—without being an emotional time bomb. You also will be known for honoring your responsibilities and overcoming obstacles easily because you can adapt to different situations without letting your emotions get in the way (Daft, 2011). Leaders who cannot do this can self-destruct professionally. They may offend or
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Chris Carlson/Associated Press
Social awareness is the ability to understand others and be empathetic. Former Los Angeles Lakers coach, now President of the New York Knicks, Phil Jackson, has shown professional intimacy, organizational awareness, and a service orientation to his players and to the organization he’s with.
blame followers or important partners by projecting their fears and insecurities onto them. They may act immorally and illegally by not controlling their desires or moods. Consider politicians who have had emotional outbursts, committed unethical acts, or been caught lying and consequently been pressured to quit because they lost the public’s trust, their legitimacy, and their in�luence. It takes years to build a credible reputation, and moments to lose it.
Social awareness is the ability to understand others. A socially aware leader is empathetic: able to put oneself in other people’s situations and show compassion and concern, while keeping an objective perspective. Frost (2004) called this - process the ability to show “professional intimacy.” Socially aware leaders are also better able to understand the context of an organizational situation—they can more clearly see the big picture of their organization—while understanding the needs of clients, employees, and other external stakeholders. Former Los Angeles Lakers coach Phil Jackson, who has worked with some of the sport’s great players, emphasized social awareness in his coaching style. As a former professional basketball player himself, Jackson was able to empathize with the men he coached. He practiced meditation and settled his team down with moments of quiet re�lection, strengthening the team’s common bond, and helping players become more aware of each other’s capabilities. Jackson recognized that a strong, cohesive team is the key to the big picture: an NBA championship. Jackson won 11 NBA championship titles as a coach and player—the most in the league’s history (Abbott, 2010).
Relationship management is the capability to emotionally connect with others, build positive relationships, and express kindness, compassion, and sensitivity. Successful leaders are good communicators able to create and sustain relationships, thus building broad networks of people and setting the stage for unprecedented collaboration. We have already established that leaders inspire trust. As a result, they are able to in�luence others, setting the tone for a caring or high-achieving company culture, managing con�lict, leading change, and guiding people to achieve extraordinary visions and organizational goals.
Emotional intelligence has had mixed empirical results with regard to leadership effectiveness, but continues to be studied and used by practitioners. It is important to note that EQ, while important to leadership, is not a substitute for IQ (mental ability) (Dubrin, 2015). Leaders need logical and emotional abilities in solving problems and in�luencing others. Neither IQ nor EQ is more important than the other; both are essential for effective leadership and followership. Leadership studies have provided suf�icient evidence over the last century to argue that there is no best way, style, or characteristic to lead and in�luence people to accomplish organizational goals.
Please take Assessment 3.1 for your EQ score and compare your results with the other assessments you have taken. Remember, there is no right or wrong style. These assessments can help you identify your strengths and areas for development as an evolving leader.
Assessment 3.1: Emotional Intelligence
Instructions
For each of the following questions, please indicate the degree to which each statement characterizes you.
1—Never like me. 2—Occasionally like me. 3—Sometimes like me. 4—Frequently like me. 5—Always like me.
1. I empathize with other people when they have problems. ___________
2. I go out of my way to help someone in need. ___________
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3. Most people feel comfortable talking to me about their personal feelings. ___________
4. People enjoy spending time with me. ___________
5. It is easy for me to openly express warm and loving feelings toward others. ___________
6. When someone is annoying me, I stop to think about the other person’s situation rather than losing my temper.
___________
7. In most cases I give people a second chance. ___________
8. I think about how I can improve my relationships with those people with whom I don’t get along.
___________
9. I think about why I don’t like a person. ___________
10. When someone makes me uncomfortable, I think about why I am uncomfortable. ___________
11. I can be assertive and forceful in situations where others are trying to take advantage of me.
___________
12. I can delay grati�ication in pursuit of my goals. ___________
13. When I am anxious about a challenge, I still can prepare for it. ___________
14. I am able to stay motivated when things do not go well. ___________
15. I keep myself focused on my goals. ___________
16. Overt human suffering makes me feel uncomfortable. ___________
17. Criticism is dif�icult for me to accept. ___________
18. Having car trouble makes me feel stressed. ___________
19. I lose control when I do not win in a sporting contest. ___________
20. Traf�ic jams cause me to lose control. ___________
Scoring
Sum your scores for questions 1–5, and divide by 5.
My “perception, appraisal, and expression of emotions” score is _______.
Sum your score for questions 6–10 and divide by 5.
My “emotional facilitation of thinking” score is _______.
Sum your score for questions 11–15 and divide by 5.
My “understanding and analyzing emotions, and employing emotional knowledge” score is _______.
For questions 17–20, reverse-score each item by subtracting your score from 6. Next, sum your new scores for these four questions, add in your score to question 16, then divide by 5.
My “re�lective regulation of emotions” score is _______.
Finally, sum your four scores together and divide by 4. My overall (global) emotional intelligence score is _______.
Interpretation
Thorndike (1920) provided an intelligence framework that identi�ied three types of intelligence: social, concrete, and abstract. His conceptualization of social intelligence is the underpinning for the contemporary reference to emotional intelligence. Emotional intelligence involves the ability to perceive emotions, to access and generate
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emotions to assist thought, to understand emotions and emotional knowledge, and to regulate emotions re�lectively to promote emotional and intellectual growth” (Tapia, 2001). This de�inition links intelligence and emotion and promotes the dual ideas that emotion can make thinking more intelligent and that one can think intelligently about emotions.
According to Tapia (2001), your �irst score re�lects your ability to appraise emotions in yourself and others (empathy). The second score deals with emotions when thinking is prioritized by directing attention to important information. (Are your emotions suf�iciently vivid and available so they can be used as aids to judgment and memory concerning feelings?) Your third score deals with your ability to label emotions and understand complex feelings. Your fourth and �inal score concerns your ability to stay open to feelings (both those that are pleasant and those that are unpleasant). Overall, the global scale for emotional intelligence attempts to assess your perception, assimilation, understanding, and management of emotion.
A high score on each of the four dimensions is re�lective of a high level of emotional intelligence on that particular dimension. A score equal to or greater than 4 on each dimension and on the global assessment suggests a high level of emotional intelligence. A score equal to or less than 2 on each dimension and on the global assessment suggests a low level of emotional intelligence.
Source: Measuring Emotional Intelligence, Psychological Reports, 88 (2001) pp. 353—364, Copyright 2001 Ammons Scienti�ic Ltd. These 20 items re�lect a subset of the Tapia (2001) and Tapia & Burry-Stock (1998) instrument for the measurement of emotional intelligence and are shown here to illustrate the measure and highlight the construct’s meaning. Tapia and Burry-Stock’s 41-item measure can be found in: M. Tapia & J. Burry- Stock. 1998. Emotional Intelligence Inventory. Tuscaloosa, AL: The University of Alabama.
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3.4 Other Personality-Related Leadership Characteristics Other personality attributes are also important predictors of leadership behaviors. The following characteristics help you better understand and evaluate leadership effectiveness in others and in yourself: self-concept, locus of control, narcissism, Machiavellianism, entrepreneurial leadership, risk taking, and decision making.
Self-Concept
Self-concept is a person’s overall understanding about herself or himself that includes attitudes, feelings, self-esteem, and self-con�idence. Those who have a positive self-concept see themselves as capable and in control of themselves and their environment, and have con�idence in their judgments, ideas, and skills. Those with a negative self-concept and core evaluation question their capabilities, see themselves as powerless, and tend not to value or like themselves (Barry & Friedman, 1998; Robbins & Judge, 2011). Leaders who have negative or weak, insecure self-concepts can limit others’ career development and personal growth, as well as sabotage their own reputations.
Self-concept can also affect the way leaders view, in�luence, and lead others. McGregor (1960) observed two types of general attitudes that leaders have about subordinates: Theory X and Theory Y. Theory X leaders, whose assumptions may be characterized as “command and control,” see people as lazy and unmotivated to work and thus believe followers have to be controlled, directed, coerced, and micromanaged. These types of leaders are more production and task oriented and can be short-tempered, impatient, and autocratic when it comes to followers’ feelings and concerns. Theory Y leaders, on the other hand, whose assumptions may be characterized as commitment and trust oriented, see people as being more interested in assuming responsibility and more willing and ready, in the right working environments, to give full effort, attention, creativity, and energy to helping achieve organizational goals. Such leaders tend be more consideration and people oriented. Research evidence regarding attitudes and leadership success generally supports McGregor’s two classi�ications, but his theory requires more study.
Locus of Control
Why do some leaders tend to take credit for success but blame others for mistakes, while other leaders assume responsibility for whatever happens under their leadership? This tendency can be described in terms of an individual’s locus of control. Locus is another word for site or location, so locus of control literally refers to where a person thinks control, or responsibility, lies. Leaders with a high internal locus of control believe what happens to them is a result of their own actions and they take responsibility accordingly. Leaders with a high external locus of control believe outside forces determine what happens to them and tend to blame others for mistakes and mishaps. These people are less likely to succeed in effectively leading others.
A leader who exhibits a high internal locus of control owns and takes responsibility for a decision he or she makes, its outcome, and its consequences. Take a quick online quiz to get a sense of your locus of control (http://www.psych.uncc.edu/pagoolka/LC.html (http://www.psych.uncc.edu/pagoolka/LC.html) ).
Narcissism
Narcissists have a grandiose sense of self-importance. They are arrogant and are always seeking admiration and attention. More extreme narcissists believe the world revolves around them. Oracle’s® CEO Larry Ellison has been described as having a high level of narcissistic tendencies. One of his executives said, “The difference between God and Larry is that God does not believe he is Larry” (Maccoby, 2000, p. 70). It is not surprising that some narcissists are more charismatic than other leaders (Sosik, Chun, & Zhu, 2014).
Most would agree that Ellison is a successful leader—Oracle is among the top software companies in the world—but narcissists are generally less favorable leaders. Narcissists in the workplace talk down to and belittle people who challenge them, and tend to create toxic environments. In extreme cases, narcissistic leaders can literally destroy companies. We can return to Enron as an example, as former CEO Jeff Skilling could possibly have been such an extreme narcissist. He manipulated �inancial statements and information to suit his needs and formed a clique around himself of
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The term Mach is derived from Niccolò Machiavelli’s 16th- century book The Prince and refers to those who gain and use power without regard to consequences. Machiavelli wrote “the ends justify the means.”
Enron traders and aggressive followers whom he liked and could manipulate. He acted in his own self-interest, without regard to ethics or other people, and forced Enron’s spectacular downfall.
Manufacturing conglomerate Tyco provides another example. The company came under �ire in 2002 when it was discovered that then-chairman and CEO Dennis Kozlowski was using company money for personal luxuries. For example, Kozlowski hosted lavish parties imitating ancient Roman settings and once gave a $2 million birthday party for his wife on the Italian island of Sardinia, at Tyco’s expense. He was also found to have purchased a $6,000 shower curtain with company funds (Crawford, 2005). Kozlowski was sentenced in 2005 to a lengthy prison sentence for stealing hundreds of millions of dollars from Tyco, but the company spent years working to repair its reputation.
However, as we saw with Oracle’s Ellison, narcissists do not necessarily leave scandals in their wake. In a Harvard Business Review article, Maccoby (2000) described what he called “productive narcissists”:
Leaders such as former General Electric chairman and CEO Jack Welch or �inancier and philanthropist George Soros are examples of productive narcissists. They are gifted and creative strategists who see the big picture and �ind meaning in the risky proposition of changing the world and leaving behind a legacy. Indeed, one reason we look to productive narcissists in times of great transition is that they have the audacity to push through the massive transformations that society periodically undertakes.
Maccoby (2000) noted that productive narcissists may become unproductive when they become “unrealistic dreamers”—people who are unable to see things as they really are. Productive narcissists can become unrealistic dreamers because they are poor listeners, are sensitive to criticism, lack empathy, dislike mentoring, and possess an intense desire to compete. Exhibiting these types of behaviors and lack of skills does not contribute to effective goal attainment or meaningful in�luence on followers.
Maccoby (2000) suggests that such individuals �ind a trusted sidekick who can help anchor them—and that they get therapy.
Machiavellianism (Mach)
Machiavellianism (Mach) is named for Niccolò Machiavelli, who, in the 16th century, wrote a book about how to get and use power. The term Mach (short for Machiavellianism) refers to those who gain and use power without regard to the consequences. Machiavelli once noted “let the ends justify the means.”
Take Bill, for instance. Bill is a real go-getter. He is the youngest supervisor for a large �inancial services �irm, and has had two promotions in the last two years. A vice president who knows Bill commented, “Bill is a nice guy, but he’ll do anything it takes to get ahead. I know he’s thrown a couple of guys who were competing for his position under the bus. We like that spirit and energy, but it may do him in if he isn’t careful.” Bill may be what theorists call a high Mach, or someone who shows more Machiavellian behaviors. High Machs tend to be more aggressive and, in terms of ethics, act in nonconstructive ways in the workplace with their manipulative behavior (O’Boyle, Forsyth, Banks, & McDaniel, 2012; Hartog & Belschak, 2012). Take the Mach assessment (at http://www.amanet.org/training/articles/Ethical- Leadership-Self-Assessment-How-Machiavellian-Are-You.aspx (http://www.amanet.org/training/articles/Ethical- Leadership-Self-Assessment-How-Machiavellian-Are-You.aspx) and see how you score.
Research shows that high Machs are more manipulative. They tend to persuade others rather than be persuaded. High Machs like their work less than low Machs and are often more stressed and involved in deviant work behaviors (Christie & Geis, 1970)—but they also tend to win.
Scoring high on the Mach assessment does not mean that you are immoral or sinister. A high Mach score may indicate that you are more detached and not as personally engaged with others. High Machs may see life as a game and use pragmatic and manipulative means to excel. Thus, high Machs seem to prosper when face-to-face interaction is
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prevalent over indirect communication; when situations have minimal rules and regulations, allowing for more improvisation; and when winning can be achieved without emotional involvement in details (Christie & Geis, 1970). High Machs, then, succeed more in situations where the ends justify the means, where regulations are ambiguous to nonexistent, and where the stakes (monetary or other material gain) are high. Whether or not they cross the line from ethical to unethical or legal to illegal behaviors and actions is not an inherent part of being a high Mach. It may simply be one risk a high Mach faces. See “Take the Lead: The Conundrum of the Superstar Employee.”
Take the Lead Credits
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Paula Loop de�ines the concept personal brand and discusses its importance in today’s job market. She addresses the goal of creating a personal brand that is unique, authentic, and accurate.
Personal Branding in Today's Job Market
Critical Thinking Questions
What is a personal brand? Do leaders and professionals have a personal brand in organizations? Explain and offer an example. Why is deliberately creating and nurturing a personal/professional brand as a leader important? Explain how personality theory and the MBTI help create a personal/professional brand.
3.5 Myers–Briggs Type Indicator (MBTI) Personality affects perceptions, attitudes, and behaviors. Understanding our own personality and the personality of others with whom we live and work can help everyone, because personality affects job satisfaction, relationships, and performance (Yukl, 2011). Although personality assessments are not the only way of discovering who we are, the more reliable and valid ones, such as the Myers–Briggs Type Indicator (MBTI), add additional insights into our strengths and areas for development. Generally, personality assessments provide a range of scores on particular dimensions. For example, a person is not completely scored as an extrovert or introvert, but will typically score a certain percentage higher of one dimension than another.
A goal of taking and understanding any assessment, particularly the ones in this chapter, is personal and professional development. What we do not know, we cannot manage, improve, or perhaps change. As you read and take the assessments here, as in other chapters of this text, re�lect on these scores with the goal of self-improvement and developing your leadership potential.
The Myers–Briggs Type Indicator (MBTI) personality assessment offers a more complete pro�ile of how different personality dimensions, taken together, can help leaders evaluate and gain insights into the general effectiveness and ineffectiveness of their behaviors. The MBTI is the most widely used assessment worldwide (Kennedy & Kennedy, 2004). Almost 90% of Fortune 100 companies report using this instrument, including AT&T, 3M, General Electric, Citigroup, Apple, and FedEx. It is also used by the U.S. armed forces and other organizations. Although research does not validate the
MBTI’s effect on leadership effectiveness, the assessment is used to help leaders better understand and appreciate themselves and their followers.
For example, let’s say you’re a hiring manager and you have two quali�ied candidates to choose from for a leadership position. In his former company, Terrence was a company vice president. He is shy and soft-spoken, but is known for his behind-the-scenes skill of quietly in�luencing others for the good of the company. The other candidate, Sarah, on the other hand, is far more outspoken and can even be confrontational. She has a knack for persuading others to work harder. Who is the more effective leader?
There is no obvious answer to this question, except for perhaps “it depends.” It depends on parts of all the leadership theories, concepts, and approaches in this book. We will discuss this in more depth throughout the text, but for now we will consider this question from the perspective of these two individuals’ personalities. The MBTI can help break down these personalities to �igure out what is the right �it for particular organizational goals and cultures.
The MBTI consists of 100 questions. It classi�ies individuals as:
Extraverted (E) or Introverted (I). Extraverts are generally sociable, outgoing, and assertive. They gain energy from being around others. Introverts are generally quieter and sometimes shy and gain energy by focusing internally on their thoughts and feelings.
Building a Strong Personal Brand
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Level 5 Leadership is de�ined as a blend of deep personal humility and intense professional will.
Intuitive (N) or Sensing (S). Intuitive types focus on the big picture and look for patterns and relationships. They are visionaries. Sensing types use their �ive senses to gather information. They are more fact and detail oriented. Feeling (F) or Thinking (T). Feeling types focus on emotions, values, and others’ feelings. Thinking types focus on logic and objectivity in making decisions. Perceiving (P) or Judging (J). Perceiving types desire more information and data in order to make a decision. They enjoy ambiguity and complexity. Judging types like closure, certainty, and deadlines in making decisions quickly on limited data.
Personalities are thus described in terms of varying combinations of these four categories. Each has its own strengths, weaknesses, and typical behaviors, which come with potential positive and negative consequences. If you take the MBTI assessment online, re�lect on how accurately the pro�ile describes you. Can you observe how your personality may relate to your leadership style and in�luence?
It is possible that you are not completely in one category or another. For example, you may fall somewhere in between being an extravert and an introvert, but your results label you an extravert because you happen to lean more in that direction. Note, also, that these types are not unchangeable. As individuals age and gain more experience and expertise, their types usually change.
Answer the MBTI questions at http://www.humanmetrics.com/cgi-win/jtypes2.asp (http://www.humanmetrics.com/cgi-win/jtypes2.asp) and re�lect on your results.
There is no magic combination of letters that guarantees a better leader, but studies have revealed some trends. Limited research suggests that judging and thinking appear most related to effective leadership. Most leaders studied are judging types, and even organizations that would seem to value “feeling” more highly—such as counseling centers— tend to select thinking types as managers (Daft, 2011). A book titled Pro�iles of Genius, by Landrum (1993), examined 13 founders of highly successful companies, such as Sony®, Microsoft®, Apple, and Honda, and found that most were NTs (intuitive thinkers)—a type found in only 5% of the U.S. population.
Other tentative research �indings include:
Intuitive leaders are the majority in �ields and organizations that involve long-term planning and breaking new ground. Sensing types are the majority in the construction, manufacturing, and banking �ields, where immediate and tangible preferences are valued over intuitive styles (Daft, 2011).
Of course, not all successful leaders or managers come from the same mold or �it the same stereotypes. Darwin Smith, who was CEO of the paper-products company Kimberly-Clark from 1971 to 1991, was described as “shy, awkward, shunning attention.” However, Good to Great author Jim Collins (2005) described Smith as having what Collins termed “Level 5 leadership,” a blend of “deep personal humility” with “intense professional will.” Collins wrote that Smith “showed iron will” as he turned the company into a “worldwide leader in its industry, generating stock returns 4.1 times greater than the general market.” It might be that Smith, like the shy vice president Bob in our hypothetical example at the beginning of this discussion, had other characteristics (like iron will) that may or may not have been re�lected in a personality assessment. He could also have had the right mix of experience, attitudes, and skills that matched the organization (Kimberly-Clark) at the right time in its life cycle. Had Smith taken the MBTI, he might have con�irmed that his personality pro�ile identi�ied his organizational style accurately.
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3.6 Entrepreneurial Leadership What do leaders like Elon Musk (Tesla, SpaceX), Jeff Bazos (Amazon), Jessica Alba (The Honest Company), Richard Branson (Virgin Group), and Daniel Ek (Spotify) have in common? They are entrepreneurial risk takers who innovate.
Entrepreneurial leaders organize and initiate new, innovative ventures and business practices, assuming much of the responsibility and risk in hope of maximum reward (Daft, 2011; Kuratko & Hodgetts, 1998). These people can range from business magnates like those mentioned above to small-business owners who may not be in the news. Some college and university students have become entrepreneurial leaders: Microsoft’s Bill Gates, Google’s Larry Page and Sergey Brin, and Facebook’s Mark Zuckerberg were university students when they started their companies. All had the same thing in common: vision, enterprise, and a willingness to take risks. They also think and act outside the box. Their behaviors can be harmful or dangerous, yet at the same time hold the potential for positive outcomes. It could be argued that without risk, there is little reward. But taking risks does not assume success. Take the assessment on risk taking and entrepreneurial thinking to see how entrepreneurial you are.
Decision Making
Shepherd, Trenton, and Patzelt (2014) reviewed 602 articles, distilled them to 156, and summarized characteristics of entrepreneurs as individuals who are highly diverse and different in their beliefs and desires, which
help explain why some choose to become entrepreneurs and why others choose managerial or other employment-related roles. Relative to nonen trepreneurs, entrepreneurs have higher levels of individualism, openness to change, and self-enhancement and lower levels of power, conformity, security (Holt, 1997), and collectivism (Tan, 2001). Compared to nonentrepreneurs, entrepreneurs also appear to have a more versatile thinking style that balances both linear (i.e., analytic, rational, logical) and nonlinear (i.e., intuitive, creative, emotional) approaches to thinking about a situation (Groves, Vance, & Choi, 2011). Moreover, entrepreneurs are more likely to see situations as relating to personal strengths, representing an opportunity, and representing potential for gain than nonentrepreneurs. (Palich & Bagby, 1995)
These authors present a complex and nuanced picture of entrepreneurial decision making which includes differences in gender, national and cultural heritage, perceptions, emotions and affect, experiences, environmental context and assessments of risk, level of self-ef�icacy, and meta-cognitive thinking. Moreover, entrepreneurs can also be prone to certain biases, such as “overoptimism, overcon�idence, and overreliance on experience.”
Entrepreneurs, compared to nonentrepreneurs (Shepherd et al., 2014), tend to show traits and characteristics higher in individualism, openness to change, and self-enhancement; while demonstrating lower levels of power, conformity, security (Holt, 1997), and collectivism (Tan, 2001). Obviously not all entrepreneurs are alike, but these characteristics serve as a starting point for understanding differences between entrepreneurial and nonentrepreneurial traits and behaviors.
Figure 3.2 illustrates Shepherd’s et al. (2014, p. 14) four dimensions that in�luence entrepreneurial opportunity decision making, based on research in this �ield. The �irst dimension that in�luences opportunity assessment is the individual characteristics of the entrepreneur: their personalities, emotional makeup, biases, and perceptions of the environments.
The second decision entrepreneurs make—whether or not to enter an entrepreneurial career—is in�luenced by individual “aspirations and attitudes, abilities, and opportunity costs.” Besides the �inancial factors needed to start a new venture, Shepherd et al. (2014) state that “perceptions of the self (e.g., identity, abilities, and desires), perceptions of the environment (e.g., hostile, muni�icent), and decision-making tools” (p. 14) are important in�luencers. The third in�luencing factor, or whether or not to exploit an opportunity, involves the degree of planning, the organizational context, the funding, and how the entrepreneur perceived through his or her moral lens and values the anticipated outcomes of the opportunity decision. Finally, whether or not an entrepreneur decides to exit an opportunity depends on the performance of the business as well as personal circumstances and investment reasons. Shepard et al. (2014) also note that other factors such as gender differences, risk assessment, cultural background, and external environment factors also in�luence an entrepreneur’s opportunity assessment decision making.
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Figure 3.2: Map of entrepreneurial decision-making research
Intrapreneurs
It is important to note that to assume that entrepreneurs only start companies would be limiting the de�inition of entrepreneurship. Entrepreneurs who work inside established organizations are called intrapreneurs. Intrapreneurs take risks to create new solutions to develop, extend, and change products and services for competitive advantage. For example, the yellow Post-It notes that are now taken for granted were invented by scientists Spencer Silver and Art Fry, who both worked at 3M. Silver developed the adhesive, and it was Fry who thought to apply this “low-stick” adhesive to a piece of paper. However, even after they designed and readied the Post-It® prototype, it reportedly would be several years before 3M was willing to recognize its value. Silver and Fry were probably one of the �irst intrapreneurs. 3M later instituted a “bootlegging” program, enabling innovative engineers to take time off while at work to experiment with entrepreneurial products. Intrapreneurs may not be as visible as entrepreneurs but they serve a valuable service and function to organizations in terms of all the roles discussed in Chapter 1.
Like the study of leadership, and Figure 1.1, the roadmap for this text, to understand entrepreneurial leadership and intrapreneurs also involves examining the dimensions of persons, processes, and systems—leaders in their environmental contexts.
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Summary & Resources
Chapter Summary Trait theory and personality theory are central to the study of leadership. It has been said that many organizational cultures re�lect and mimic the personality of their leader(s). The Big Five personality traits are, to date, the most empirically signi�icant cross-cultural indicators of emergent leadership characteristics, job performance, and job satisfaction. Extraversion, conscientiousness, openness, agreeableness, and neuroticism (adjustment) are important indicators of leadership. In addition, the MBTI is one of the most globally used assessments. Although it alone cannot predict effective leadership or leaders, it is useful in developing self-awareness and in helping leaders gain insight into their personalities.
The dark side of leadership can be de�ined as “an ongoing pattern of behaviour exhibited by a leader that results in overall negative organisational outcomes based on the interactions between the leader, follower and the environment. Organisational goals, morale and follower satisfaction are thwarted through the abuse of power and self-interest of the leader” (Slattery, 2009, p. 4). Being aware of the dark side of leadership and being able to take reasonable courses of action are important to followers, the organization, and one’s well-being in an organization. For publicly traded companies the shareholders’ wealth and resources are at stake, and for nonpro�its and other organizations, the well- being of employees and safe-guarding of resources may be at risk. Sometimes toxic leadership and destructive behaviors can be controlled and corrected; sometimes not. Human Resources executives are good resources when it is suspected that top-level leaders may be placing an organization at risk. Attorneys for the organization and members of the board of directors are other such resources.
Other personality characteristics and frameworks, such as EQ (emotional intelligence), self-concept, locus of control, narcissism, Machiavellianism (Mach), and entrepreneurial and intrapreneurial leadership, are also helpful tools and concepts for understanding personal dimensions of leaders and of ourselves. While environmental and contextual factors in�luence entrepreneurial behavior, we also need to understand the personal and emotional makeup of leaders to gage how effectively they relate to themselves and to others in achieving performance goals.
Web Resources Harald Port on Corporate Culture
https://youtu.be/Ze3VospNcsI (https://youtu.be/Ze3VospNcsI)
An organizational corporate culture advisor discusses his latest thinking on corporate culture.
Alternatives to Myers-Briggs Type Indicator
Learn more about the DISC personality test: https://www.discpro�ile.com/what-is-disc/overview/ (https://www.discpro�ile.com/what-is-disc/overview/)
Take a free DISC personality test assessment: https://www.123test.com/disc-personality-test/ (https://www.123test.com/disc-personality-test/)
Learn more about the Predictive Index for teams: https://www.predictiveindex.com (https://www.predictiveindex.com)
Briggs and Myers debuted their indicator in 1944. Since then, some alternative tools have come into use, such as the DISC assessment and the Predictive Index, which have both gained wide acceptance.
Critical Thinking Questions 1. What leadership traits are still important to consider when evaluating a leader’s personal effectiveness?
Explain.
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2. Can leaders who do not show high levels on the positive dimensions of the Big Five personality characteristics be effective in their roles? Explain.
3. Argue the pros and cons of the importance of emotional intelligence to effective leadership. 4. Explain how your MBTI pro�ile offers both effective results and potential derailments to your effectiveness as a
leader. 5. Offer examples of leaders in the current business and general news that exemplify different dimensions of the
Big Five personality characteristics. Then explain how the characteristics you identi�ied are helping or hindering their effectiveness.
6. Identify a leader(s) in the news who has exhibited “dark side” characteristics. Explain the situation and evidence that this is the case. Were there any consequences from that leader’s negative or destructive behaviors?
7. Compare and contrast your own evolving or current leadership style with the characteristics of entrepreneurial leaders. Use concepts from the text in your comparison and contrast.
Key Terms
Big Five personality traits
Emotional Intelligence (EQ)
entrepreneurial leadership
external locus of control
internal locus of control
intrapreneurs
locus of control
Machiavellianism (Mach)
Myers–Briggs Type Indicator (MBTI)
narcissism
personality
self-awareness
self-concept
self-management
social awareness
Theory X
Theory Y
traits
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Tony Hsieh, CEO at Amazon’s Zappos, the retail online shoe and clothing company with 1,500 employees, is again experimenting with a more radical extension of the current organization. The �irm is now organized as a holacracy—“a
4 Leadership Behavior and Situational Factors
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Learning Outcomes
After reading this chapter, you should be able to:
1. Describe the style and behavioral approaches to leadership using the Michigan and Ohio studies as well as the Leadership Grid.
2. Explain the situational approach to leadership, including the role that followers play in leadership ef�icacy.
3. Discuss the contingency approach to leadership, speci�ically Fielder’s Contingency Theory and Path–Goal Contingency Theory.
4. List and explain the stages of the Leader–Member Exchange (LMX).
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Tony Hsieh is an entrepreneurial innovating leader who is not afraid to take risks for large gains—and some losses.
management structure in which circles of equally privileged employees work autonomously in codependency with other circles, sometimes overlapping” (Feloni, 2015).
Hsieh plans on being manager-free with an even newer organizational form of self- management and self-organization based on Frederic Laloux’s Reinventing Organizations, which argues for peer-pressure, self-organizing systems. Hsieh noted that “For certain types of job functions where there are easy metrics to measure performance, a public leaderboard ranking will naturally create peer pressure by showing which teams are performing and which aren’t. For other types of job functions where metrics are more dif�icult to come by, regular peer-based presentations have been shown to be really effective, where each team presents to the other teams (once a quarter) what they are working on and why it is adding value to the company, and that will create a natural peer pressure” (Feloni, 2015).
Employees who did not support the new structure were offered severance packages if they resigned by last April 30, 2015. First, they had to either read the management book Reinventing Organizations or “just email a statement that they are not reading it.” Hsieh doesn’t want employees “Having one foot in one world while having the other foot in the other world” because that would slow down the transformation toward self-management and self- organization. The self-organizing, self-managing “business-centric groups” would eliminate the “legacy management hierarchy” and embed merchandising, �inance, tech, marketing, and other functions in business-centric circles. Former managers in good standing keep their salaries through the end of 2015, but their old roles and responsibilities change. Hsieh informed employees that a new circle called “Reinventing Yourself ” would help �it former managers into new roles that might be a good match for “their passions, skills, and experience.” Hsieh said in an email, “Self-management and self- organization is not for everyone, and not everyone will want to move forward,” thus he offered a 3-month severance package and up to 3
months of COBRA reimbursement for every employee in good standing. Two hundred and ten Zappos employees—14% of the staff—took the buyout (Feloni, 2015).
Months before the employee buyout decision, several employees were disgruntled with the holacracy system (Groth, 2015). Some said it was too rigid and dogmatic, others said they were overwhelmed with role changes, especially since they were also being bought by Amazon. While Zappos went through one of the most tumultuous years in its company history, Hsieh has integrated a remarkable culture embodied by its legendary customer service. Today, “The answer is yes—now what is your question?” is business as usual at Zappos (Solomon, 2017). Both Jeff Bezos and Tony Hsieh are entrepreneurial innovating leaders not afraid to take risks for large gains—and some losses.
The Hsieh and Zappos story is an experiment in leadership and management theory and practice that scholars and practitioners are watching with interest. The theories and approaches discussed so far have sought to answer the question “What makes an effective leader?”. (Remember, an effective leader is someone who works with, motivates, and helps followers to attain their common organizational goals.) Later approaches following trait theory shifted attention from who leaders are to what leaders do and how their styles, personalities, and traits �it with different situations and organizations, offering a far more complex answer to the question.
In this chapter we discuss the historical evolution and implementation of several such theories, including style and behavioral approaches (the Michigan and Ohio State Studies), contingency theory, followed by the individualized leadership approach, which focuses on leader–follower exchanges and relationships. It is important to note, as was indicated in earlier chapters, that leaders are not necessarily heroes. They work, relate to, in�luence, and are in�luenced by followers; and, as we will show, lead within the constraints and opportunities of speci�ic organizational contexts, situations, and relationships.
As you read this chapter, notice how the simplicity and relevance of leadership theories (as conceptual frameworks but also as tools) advances to higher levels of complexity with regard to both leaders and followers. Parts of all these theories are still in use in one form or another. The evolution of the theories from leadership style and behavioral approaches, to situational and contingency approaches, and �inishing with individualized leadership and dyad exchange
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theory tell not only a historical story of how leadership theory changed, but also offers insight into how some leaders, managers, and followers still view themselves and organizations today. Note, again, the holistic roadmap in Figure 1.1, Persons, Processes, and Systems, from Chapter 1 as you read the text, assessments, and methods moving from leadership as persons to include processes. Also keep in mind questions each theory raises about Hsieh’s bold leadership decisions with the organizational structure and changes at Zappos.
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Cultura Limited/Superstock
Leaders of the consideration style use a - people-oriented leadership style that often is most effective when less structure but more consideration is needed.
4.1 Style and Behavioral Approaches Style and behavioral approaches focus on leaders’ behavior rather than their personality characteristics, just as trait and personality approaches do. Speci�ically, theorists look at how leaders approach tasks and deal with followers. We will examine two contributions to the style and behavioral approaches: (1) early studies conducted at the University of Michigan and The Ohio State University, and (2) Blake and Mouton’s leadership grid.
Michigan and Ohio State Studies
The research at the University of Michigan and The Ohio State University began in the late 1940s. The Michigan and Ohio leadership studies were critical in the development of style and behavioral leadership theory. The studies at these two institutions were actually performed separately, but because the two groups reached very similar conclusions, we will discuss them together in this text.
Researchers eventually pinpointed two types of behavior in leaders: Leaders were either task oriented, focusing on achieving goals and organization, or people oriented, focusing on followers and interpersonal relationships (Stogdill, 1948). The Michigan and Ohio State researchers argued that different leadership styles were more effective in different situations.
Task-oriented leadership involves assigning tasks, specifying procedures, de�ining work schedules, and helping followers set goals—in other words, focusing more on getting work done than on showing consideration to people. Michigan researchers called this a production orientation, while Ohio State researchers termed it an initiating structure style. This style is needed when tasks call for a lot of structure but little need to show followers consideration. In these situations, one-way, top-down communication and decision making are necessary.
Consider this example: In 2005, Hewlett-Packard (HP) was at a crossroads. The company could either continue to give ground to the competition or regain its former glory as a leading computer manufacturer. The company needed a leader who would drive hard, give direction, expect high performance, set high standards, and ask tough questions. Mark Hurd took the job. Some questioned his tough, numbers-driven, task-oriented style, but by the end of 2009 he had succeeded in turning HP around. He was the right leader at the right time for HP: more task oriented rather than people oriented. More recently Meg Whitman, former CEO at eBay, has served as HP’s top-level leader. She seems to balance the people-to-task orientation effectively:
Blunt, folksy, and persistent, Meg Whitman is the leader that Hewlett-Packard desperately needs. She’s decisive without being abrasive, persuasive without being slick. She’s a team builder who knows that turnarounds call for repairing hundreds of small failings rather than betting everything on a miracle cure that might be a mirage. In the words of HP director Marc Andreessen, one of Silicon Valley’s top venture capitalists, ‘She’s the best CEO the company has had since its founders.’” (Anders, 2013)
A people-oriented leadership style creates a supportive, friendly, and trusting environment for followers, working to satisfy needs and develop relationships. Michigan researchers said these leaders possessed an employee orientation, while Ohio State researchers called this style a consideration style. A people-oriented leadership style is often most effective when less structure but more consideration is needed. In these situations, two-way, participative communication and decision making are needed (Likert, 1961). Take, for example, a university that recently completed a physical building project in which 15% of the campus was either rebuilt or restored. The new president recruited at the start of the project was a retired corporate executive known for his command and control. He had successfully managed the building transformation but alienated many faculty and staff members who felt he did not understand their work or needs. Although the president’s task-oriented style was appropriate at the start of the project— everything was on time, almost within budget, and according to speci�ications—at the end of
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the project the board of trustees decided it was time for a different leadership style. They hired a former academic with 15 years of successful university administration and fund-raising experience who was able to inspire, motivate, and align faculty; rejuvenate and rebuild a collaborative community; provide emotional as well as academic leadership support; and promote the principles and values of scholarship. The more people-oriented approach �it the organization at the right time in its life cycle.
The timeliness of the people-oriented focus is noteworthy. A recent review of 160 studies showed that followers of leaders who were high in consideration were more motivated and satis�ied with their job and had more respect for their leaders (Robbins & Judge, 2011). Research suggests that at least 70% of the variance in engagement is explained by the quality of the manager or team leader (Harter, 2019).
Figure 4.1: Four leadership styles
Source: Based on Likert, R. (1961). New patterns of management. New York, NY: McGraw- Hill.
Some scholars argue that leaders are either more concerned with people or more concerned with tasks; they cannot be both. Other scholars consider the two styles to be complementary rather than opposed, as shown in Figure 4.1. The �igure illustrates that leaders can possess varying quantities of both styles. The people-oriented leader’s style is re�lected in the upper left quadrant; the task-oriented leader’s style is shown in the bottom right quadrant. However, according to this visualization, leaders can also be both task oriented and people oriented; arguably, the new university president in the earlier example actually �its into the upper right quadrant because he or she was able to engage the community while maintaining the structured environment that was needed. A leader may also be neither task oriented nor people oriented, as seen in the bottom left quadrant. As we will discuss later, a “country club” leadership style has and shows little concern for people and and for skill in getting work done. This has also been referred to as an impoverished leadership style. How do such leaders keep their jobs? We discuss this and other related styles later in this chapter.
We should note that even though a leader may prefer or tend to use one of these four leadership styles, that does not mean he or she cannot change or adapt. (We will discuss this further in the context of contingency theory.) For example, some observers said Jack Welch was more of a task-oriented leader when he joined General Electric (GE): He �ired
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unproductive workers and focused on streamlining GE to compete in only the top two businesses they entered. However, as he matured in his leadership role and as GE excelled, he adopted a people orientation as well.
Take Assessment 4.1 to identify your leadership style based on this model. If you score high on a task focus (structure and production) and low on a people focus (consideration and employee orientation), you tend to make more decisions yourself rather than delegating tasks, and you might communicate using one-way communication with followers instead of asking for their feedback. If you score high on a people focus (consideration) and low on a task (structure) focus, you tend to be a more open communicator and share decision making to solve problems. Do you agree with your results? As you continue to read this book, you will gain awareness and knowledge about how to become more effective in different leadership skills (e.g., communicating, in�luencing others, using power effectively). You will also become more aware of different types of organizational cultures and situations that best suit your interests and skills.
Assessment 4.1: Initiating Structure Versus Consideration
Instructions
The items below relate to your personal leadership orientation. Each item describes a speci�ic kind of behavior but does not ask you to judge whether the behavior is desirable or understandable.
1. Read each item carefully. 2. Think about how frequently you engage in the behavior described by the item. 3. Draw a circle around one of the �ive numerical response codes (1, 2, 3, 4, 5) following each question that
re�lects the frequency of this behavior.
1. Pit suggestions made by people in the work-group operation.
Always Often Occasionally Seldom Never
1 2 3 4 5
2. Treat all people in the work group as equal.
Always Often Occasionally Seldom Never
1 2 3 4 5
3. Back up what people under you do.
Always Often Occasionally Seldom Never
1 2 3 4 5
4. Reject suggestions for change.
Always Often Occasionally Seldom Never
1 2 3 4 5
5. Talk about how much should be done.
A Great Deal Fairly Much To Some Degree Comparatively Little Not at All
1 2 3 4 5
6. Assign people in the work group to particular tasks.
A Great Deal Fairly Much To Some Degree Comparatively Little Not at All
1 2 3 4 5
7. Offer new approaches to problems.
A Great Deal Fairly Much To Some Degree Comparatively Little Not at All
1 2 3 4 5
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8. Emphasize meeting deadlines.
A Great Deal Fairly Much To Some Degree Comparatively Little Not at All
1 2 3 4 5
Scoring
Consideration behavior: Subtract your scores to questions 1, 2, and 3 from 6. Next, sum these adjusted scores and your score to question 4 and divide by 4.
Enter your consideration score here: ________.
Initiating structure behavior: Subtract your scores to questions 5, 6, 7, and 8 from 6. Next, sum these adjusted scores and divide by 4.
Enter your initiating structure score here: ________.
Interpretation
A high consideration score (4 or greater) suggests a relatively strong orientation toward consideration-oriented behavior. A low score (2 or less) suggests a relatively weak consideration orientation.
A high initiating structure score (4 or greater) suggests a relatively strong orientation toward initiating structure behavior. A low score (2 or less) suggests a relatively weak initiating structure orientation.
Source: Fleishman, E.A. The measurement of leadership attitudes in industry. Journal of Applied Psychology, 37(3), June 1953, 153-158. Published by American Psychological Association. Reprinted by permission.
The Leadership Grid
The most well-known of the behavioral approaches is the leadership grid, which builds on the Michigan and Ohio State studies and also depicts leadership style as a blend of two different approaches. Originally published by Blake and Mouton as the Managerial Grid in 1964, the grid identi�ies �ive leadership styles plotted on two axes. As shown in Figure 4.2, the horizontal axis represents concern for production or results, and the vertical axis represents concern for people. Each axis is on a 9-point scale; a score of 1 represents least or lowest concern and 9 represents the most concern. Individual leaders’ scores can be plotted anywhere on the graph. As you read the descriptions of the following �ive leadership styles in this model, consider this: Is there a leader that �its a 9,9 (most optimum classi�ication on this model)? Think about which of the following pro�iles might best describe your style.
Figure 4.2: The leadership grid
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Source: The Leadership Grid®�igure from Leadership Dilemmas—Grid Solutions, by Robert R. Blake and Anne Adams McCanse (Formerly the Managerial Grid by Robert R. Blake and Jane S. Mouton). Houston: Gulf Publishing Company, (Grid Figure: P. 29). Copyright 1991 by Scienti�ic Methods, Inc. Reproduced by permission of the owners.
The team leader (9,9) has high concern for tasks, followers, and peer relationships. This leader is highly results driven while being very engaged and concerned with followers and peers. Some might say that Virgin Group founder Sir Richard Branson is an example of a 9.9 team leader. The business tycoon began his entrepreneurial career at 15 years old selling discount records. This business turned into Virgin Records, which he sold for $973 million before starting Virgin Atlantic Airways. Branson is also an environmentalist, an explorer, a philanthropist, and the �ifth richest person in the United Kingdom. He said in an interview, “Business is giving people in their lifetime what they need and what they want” (Byrnes & Kiley, 2000).
The authority-compliance leader (9,1) focuses on getting the job done with no concern for followers or perhaps peers. The emphasis of this style is more on operational ef�iciency than on meeting the social and personal needs of followers. Some leaders who are closer to the 9,1 scale on this style may be characterized as bulldozers: over controlling, results driven, and insensitive to others’ needs. The 9,1 leader may be productive in the short term, but at the cost of getting the necessary help and support from teammates and followers. Again, not every leader with this, or the other styles, may act in the same or expected ways.
The middle-of-the-road leader (5,5) is partly concerned about task accomplishment and somewhat concerned about followers and peers. This “average” leader produces enough to get by and shows enough concern to be acceptable to followers and peers. This leader may have to compromise and �ind a balance between work requirements and follower concerns. The middle-of-the-road leader performs at “good enough” levels; he or she is neither a star nor a laggard. This leader may avoid con�lict.
The country club leader (1,9) shows high concern for people and task accomplishment and is involved in interpersonal relationships with followers and peers. This leader focuses on followers’ social and individual needs, with a low task orientation. This leader may create a comfortable working environment, but may �ind productivity, work- related problem solving, and the handling of dif�icult con�licts problematic. It is important to note that on the Leadership
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Grid, this type of leadership may deemphasize production while emphasizing the attitudes, personal and social needs of followers.
The impoverished leader (1,1) is uninvolved and disconnected from followers, peers, and work tasks, putting forth minimal effort. This leader may appear alienated, distant, indifferent, and uncommitted to the organization and to others. A word of caution about offering examples of this type of leadership: The question arises “From whose point of view?”. There seems to be consensus on the failed leadership of the Enron Corporation under Ken Lay (now deceased) and Jeff Skilling (serving a prison term).
The leadership grid has been widely used by corporate and organizational training programs. It was updated and changed in 1978, 1985, and 1991. Blake and McCanse (1991) added opportunist to the leadership grid. An opportunist is a leader who uses any of the styles combined to promote his or her own advancement. The opportunist is not located in any one style on the grid; he or she is able to move across styles according to his or her needs and interests. Many politicians are skillful opportunists. They read the polls, check out the changing situation with their competition, and act accordingly. It is debatable whether or not the opportunist leaders are adaptable and strategic or, as some have argued, ruthless, cunning, and self-motivated (Northouse, 2016, in press).
Like trait theory, the behavioral and style approaches are based on decades of empirical research. They are straightforward, simple, and appealing to practitioners and researchers. However, they are not without their issues. First, no optimal leadership style can be applied to all situations. The 9,9 score in the leadership grid model, or the “high–high” in the Michigan and Ohio State approaches, seems optimal and desirable, but these styles may not be the most effective in all or in particular situations. Goleman (2000) concluded, after studying 3,000 executives, that leaders who get the best results in their organizations use several different styles in any given week. More research is needed to investigate this question.
Second, it may not be possible for some leaders to be a 9,9 or a high–high. Not all leaders and managers can be all things to all people and organizations. For example, a leader may be highly effective in his or her particular organization but not have the capacity to master both production-oriented and people skills.
Third, leadership styles in these approaches were studied like traits, that is, stable properties of the individual leader that were unaffected by organizational or work in�luences. Complex interactions and forces in organizations affect leadership styles, and styles affect people and tasks. The situational theory attempted to address this by examining a leader’s situational context.
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4.2 Situational Approaches The Hersey and Blanchard original situational approach added another important dimension to the leadership grid by taking into account follower and task characteristics. In this theory (Situational Leadership Theory, or SLT) originally developed in 1969, leaders observe, change, and adapt to the situation at hand, and leadership effectiveness is determined by the extent to which leaders can match their styles to their followers’ styles to meet organizational goals. The understanding that one leadership size does not �it all organizational requirements is central to this approach. Those being lead, for the �irst time in leadership studies, became the most important element of the organizational context (Hersey & Blanchard, 1969). See “Take the Lead: Managing Volunteers.” The model has evolved and several versions have developed from it. One important situational model developed by Blanchard and colleagues is called the Situational Leadership II® Model (Blanchard, Zigarmi, & Zigarmi, 1985).
Development Level
The Situational Leadership II® Model is based on the premise that leaders will match their directive and supportive styles—how they give instruction and meet needs—to meet individual subordinates’ level of development relative to a speci�ic task. The individuals’ needs and styles are determined by their level of development, or their readiness to take on various tasks. Development is understood from the degree of competence and commitment they show or how able and motivated they are to take on a speci�ic task or tasks. An individual may be highly skilled—very competent—but unmotivated or unwilling to perform assigned tasks; that person is not committed. In the same way, someone may not have the necessary skills and may require much training, but may show enthusiasm about the work. For a leader to be effective, she or he must �irst determine—by listening, observing, and asking questions—where subordinates are on the development continuum.
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New employees who are inexperienced, lack some con�idence, and are unwilling to step up and take on dif�icult assignments are at the directing level. After working a few months, some of the new employees may be more willing and more con�ident but still unable to fully complete a complex task without instruction; they are at the coaching level. With coaching and mentoring, employees may move from directing level to supporting or even delegating (able and willing or con�ident); others may remain at a level in need of more coaching. Employees can move in either direction in their development, and in a matter of days, weeks, or months. Before you read about the various leadership styles described in this model, ask yourself which level of development best describes you relative to the tasks that you are confronted with now in either your current job or a job you would like to take. Why would you say you are at that level? Have you changed levels? Do you want to change levels? What would you need from a supervisor, mentor, coach, or other leadership �igure to advance or maintain your level? As you read about the leadership styles, try and identify what leadership style would be most appropriate in various situations in your life, whether you are on the receiving end of leadership or trying to lead others.
Leader Styles
The style a leader chooses to adopt is based on the subordinate development levels. In this model, styles are—in varying degrees—either directive (task-oriented) or supportive, Low-to-high directive, or task, refers to how much direction the leader gives the follower: Does the leader levy clear orders (high) or give the follower room to take
Take the Lead Credits
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Psychologists Eve Ash and Peter Quarry discuss the importance of adjusting leadership styles to �it situational and follower needs.
Adjusting Leadership Styles
Critical Thinking Questions
What is the role of feedback during the adjustment process? What suggestions are provided for leaders who are responsible for self-directed teams? Do you agree with the advice?
initiative (low)? Low-to-high supportive refers to how much support the leader gives the follower: Does the leader foster a warm mentorlike relationship (high) or remain aloof and of�icial (low)? The varying quantities and combinations of directive and supportive leadership result in four different styles: directing, coaching, supporting, and delegating.
Directing, is a high-task/low-supportive style that meets the very basic developmental needs of subordinates at the S1 level (where employees show low commitment and low competence. This style provides basic, explicit instructions, clear and direct communication regarding goal attainment, and close supervision of followers. At this level, followers’ competence and commitment are very basic. Direct instruction is what is needed, more than being coached, or supported by a manager or leader. This is not to say that subordinates should be ill-treated, avoided, or neglected—not at all. Employees who are new; are returning to the workforce; or are moving to a different company, industry, or �ield may welcome this style in the beginning of their employment. Coaching, is a high-task/high-supportive style that meets the developmental needs of followers at the S2 level (where employees demonstrate low competence but more commitment). This style is direct and provides open communication—sharing, asking questions, receiving information—on goal attainment. The style also provides social and emotional support by encouraging subordinates in their efforts. This leadership style is effective with those who may not yet have the experience or expertise for the task but want to contribute and are con�ident they can. Supporting, is a high-supportive/low-task style that meets the developmental needs of followers at the S3 level (where employees are competent but unmotivated or not con�ident). This style does not overemphasize goal attainment. It offers support by praising, encouraging, and giving and receiving feedback as needed. This style can be effective with those who are experienced and skilled but not con�ident in their capability to get the job done. Leaders who can offer challenging goals while participating when necessary can satisfy more highly skilled and creative followers. Delegating, is a style of low concern for task and supportive behavior in relationships with subordinates who are at the S4 development level (where employees are highly competent and highly committed). Little direction or support may be needed, because these individuals take charge of the work and execution; they are able, willing, and con�ident. The leader empowers these employees and teams to take responsibility for tasks depending on their judgment and initiative. This style is necessary when subordinates have as much experience as the leader—if not more—in specialized areas. Senior professionals in the workforce who respond to this style are ready, willing, and able to carry out assignments and may also have more relevant experience than their supervisors. This is an interesting style, because the leader must be both a coach and a supervisor.
The situational approach attributes more control to both leaders and followers, empowering them to respond to different situations rather than locking them into speci�ic roles or styles.
Adjust Leadership to Individuals From Title:
Supervisory Styles (https://fod.infobase.com/PortalPlaylists.aspx? wID=100753&xtid=49877)
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However, unlike prior approaches, there is a lack of a research history to verify the situational approaches. That is, a researched basis is lacking on which to gauge and interpret the results. There are also no demographic characteristics that suggest how education, age, experience, or gender would in�luence the effectiveness of the exchange between leader and follower. Neither does the theory explain differences between individual and group leadership. Should a leader of a group match her or his style to the average of the group development level or to each individual’s development level in the group? (Vecchio & Brazil, 2002; Northouse, 2016, in press). In the following sections, the theories take a different approach, an approach in which the leader’s style does not change but is still matched to the followers and to the organization.
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iStock/Thinkstock
In Fiedler’s theory, leaders examine their own style through a questionnaire that diagnoses their speci�ic organizational situation then matches the two.
4.3 Contingency Approach Contingency theorists continue to study leadership styles, but they are interested in �inding an effective �it between a leader’s style, followers’ characteristics, and the organizational setting. These approaches look at leaders whose effectiveness is contingent on how well the two match—hence the name of the theory. We will examine two contingency theories: Fiedler’s theory, which seeks to prescribe a leader–situation match, and path–goal theory, which focuses on the leader–follower relationship itself and how leaders motivate followers.
Fiedler’s Leader–Situation Theory
In Fiedler’s theory, leaders examine their own style through a - questionnaire, diagnose the speci�ic organizational situation—also through a questionnaire—and then match the two. In this theory, the leader’s style does not change.
Please take Assessment 4.2, the Least Preferred Coworker (LPC) questionnaire, before continuing; otherwise your results will be biased.
Assessment 4.2: Least Preferred Coworker (LPC)
Instructions
Think of the person with whom you can work least well. This may be someone you work with now or someone you knew in the past. It does not have to be the person you like least well, but it should be the person with whom you had the most dif�iculty in getting a job done. Describe this person, as he or she appears to you, by circling a number for each scale.
Pleasant 8 7 6 5 4 3 2 1 Unpleasant
Friendly 8 7 6 5 4 3 2 1 Unfriendly
Rejecting 1 2 3 4 5 6 7 8 Accepting
Helpful 8 7 6 5 4 3 2 1 Frustrating
Unenthusiastic 1 2 3 4 5 6 7 8 Enthusiastic
Tense 1 2 3 4 5 6 7 8 Relaxed
Distant 1 2 3 4 5 6 7 8 Close
Cold 1 2 3 4 5 6 7 8 Warm
Cooperative 8 7 6 5 4 3 2 1 Uncooperative
Supportive 8 7 6 5 4 3 2 1 Hostile
Boring 1 2 3 4 5 6 7 8 Interesting
Quarrelsome 1 2 3 4 5 6 7 8 Harmonious
Self-assured 8 7 6 5 4 3 2 1 Hesitant
Ef�icient 8 7 6 5 4 3 2 1 Inef�icient
Gloomy 1 2 3 4 5 6 7 8 Cheerful
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Open 8 7 6 5 4 3 2 1 Guarded
Scoring
Your LPC score is the sum of the answers to these 16 questions. A high score (greater than 76) re�lects a relationship orientation, while a low score (less than 62) signals a task orientation.
Interpretation
According to Fiedler’s work, a person with a high LPC score tends to be relationship oriented. These leaders generally tend to perform best under conditions of intermediate favorability. Leaders with a low LPC score are more task oriented, and they tend to function best under conditions of high and low favorability. Work by John K. Kennedy, Jr., indicated that “the performance of middle LPC leaders is generally superior to that of the high and low LPC leaders” (1982, p. 1).*
Source: Fiedler, Fred E. & Chemers, Martin M., Leadership & Effective Management, 1st, ©1974. Printed and Electronically reproduced by permission of Pearson Education, Inc., New York, New York.
Leadership Style Determined Results of the LPC questionnaire, which asks you to recall your current and past coworkers and think of your least preferred coworker, indicate whether your style is task or relationship oriented—similar to the Michigan, Ohio State, and other models we discussed earlier.
The least preferred coworker is rated on a scale of 16 sets of contrasting adjectives, including supportive–hostile, pleasant–unpleasant, ef�icient–inef�icient, and open–guarded. If the leader describes the least preferred coworker in positive terms, then the leader is considered relationship oriented—that is, the leader is caring, sensitive, and aware of other people’s feelings. However, if the leader describes the coworker in negative terms, then the leader is considered task oriented—that is, the leader places more value on tasks than on people.
Situation De�ined The organizational situation, or context, can be de�ined in terms of three dimensions: (1) the relationship between the leader and the organization members, (2) the ways tasks are structured, and (3) the amount of in�luence the leader has on subordinates. Each of these elements can be seen as favorable, moderate or intermediate, or unfavorable to the leader.
1. Leader–member relations measure the group climate or atmosphere. If the degree of con�idence, trust, and respect members have in their leader is low, then leader–member relations are poor or unfavorable. If con�idence, trust, and respect for the leader are high, then leader–member relations are good or very favorable. This element can also be moderate or intermediate, between favorable and unfavorable for the leader. This is the most important factor in de�ining the organizational situation.
2. Task structure is the degree to which job assignments are structured or unstructured, routine or nonroutine, unambiguous or straightforward, and easily understood or complicated. This is the second most in�luential factor of situational favorableness in Fiedler’s theory. Structured situations offer leaders more in�luence, because the leader will have to spend less time with this element; therefore, structured tasks are more favorable to leaders. Unstructured, ill-de�ined tasks and jobs are more unfavorable for the leader, because she or he will have to spend more time with this element.
3. Position power is the degree of in�luence a leader has over subordinates—hiring, �iring, discipline, promotions, and salaries. Position power is high when the leader has power to direct, evaluate, and reward or discipline subordinates. Position power is low when the leader lacks such power. The bottom half of Figure 4.3 combines these three situational elements to create eight different situations, ranging from most favorable to least
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favorable. In observing Figure 4.3, you can see that
Situation I is the most favorable to the leader; leader–member relations are good, task structure is high, and leader position power is strong. Situation II is also favorable, but not as ideal as Situation I. Situation VIII is the most unfavorable for the leader; leader–member relations are poor, task structure is low, and position power is weak. Situation VII is also unfavorable, but not as unfavorable as situation VIII. Situations III, IV, V, and VI are intermediate or moderate, representing a range of favorableness to the leader.
Figure 4.3: Fiedler contingency theory
Source: Fiedler, F.E. The effects of leadership training and experience: A contingency model interpretation, (1972), Administrative Science Quarterly, 17, p. 455, Figure 1. Published by Sage Publications on behalf of Cornell University, Johnson Graduate School of Management. Reproduced with permission of Graduate School of Business and Public Administration.
Determining the Leader–Situation Match The upper half of Figure 4.3 compares how task and relationship-oriented leaders would perform in the eight different situations, with high performance clearly being preferred. In Fiedler’s model, task-oriented leaders perform better in highly favorable and highly unfavorable situations (I, II, VII, and VIII). Task-oriented leaders excel in highly favorable situations because everyone is cohesive, the tasks are understandable, and the leader has power. The leader steps in and leads. In unfavorable situations, the task-oriented leader also excels, because she or he de�ines the task and exerts authority over followers. Since leader–member relations are poor, a task-oriented leader’s popularity is not affected.
Relationship-oriented leaders perform better in moderately favorable situations (IV, V, and VI), because people skills are needed to achieve increased group performance. A relationship-oriented leader has the interpersonal skills to improve relationships, get tasks on track, and establish position power with members who moderately like the leader. These leaders also work more effectively in moderately favorable situations because, Fiedler theorized, in extreme situations they tend to overreact, and with less control provided, they may overfocus on relationships, thus failing to complete the tasks. Note that research to date has not answered why leaders with low LPC scores work effectively in extreme situations and those with high LPC scores do not. Contingency theory has been challenged based on the lack of veri�ication of these assertions. Consider the organization where you are working or wish to work. Using your LPC questionnaire results, determine how the combined three dimensions in your speci�ic work situation add up to be very favorable, intermediate, or very unfavorable for you as a leader. How well do you �it in that organizational setting?
Fiedler assumed that leaders’ styles are in�lexible; therefore, there are only two ways to increase leader effectiveness: (1) change the leader to �it the organizational context, as stated earlier, or (2) change the organizational context to �it the leader. Unlike in situational theory, this model does not allow for an individual or organization to change. Another problem is that practitioners have dif�iculty in understanding the LPC questionnaire and interpreting the variables in the model.
However, Fiedler’s work was based on years of studies, many of which support his theory. Another relevant aspect of this theory and model is that leaders are not expected to be all things to all people or all organizations. Some styles work more effectively than others in different contexts. The model has also been useful to organizations that assess and
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identify professionals’ strengths and capabilities for certain positions and assignments. For example, the model may be used (1) to help explain why an individual is not effective in a given position, even though the person is hard-working, conscientious, and loyal; (2) to help predict whether a person who has effectively worked in one position in a company or organization can be as effective if moved into a different position in the same company; and (3) to help leaders and managers make changes in lower-level positions to ensure a good �it between a manager or employee and a particular work environment (Northouse, 2010).
Path–Goal Contingency Theory
Path–goal theory focuses on the leader—rather than the follower—and his or her responsibility to motivate followers to reach both personal and organizational objectives (Daft, 2015). Path–goal theory explains how individual employee performance �its with and is impacted by leaders’ styles, tasks, and employee characteristics.
Developed by Robert House (1971), path–goal theory is the only leadership approach that focuses directly on the role of followers’ motivation in accomplishing organizational goals. Although the theory is at �irst complex, it is appealing as a practical method that leaders can use to empower followers.
As the name of the theory suggests, leaders motivate followers by clarifying the path or emphasizing the goal. More speci�ically, the leader (1) de�ines the goals, (2) points to and clears the path to available rewards (possibly increasing them), and (3) supports the follower in achieving those rewards. The underlying logic of path–goal theory is that followers are motivated when they believe that (1) they are able to perform their work tasks, (2) their efforts will lead to certain outcomes, and (3) the payoffs from their work are worthwhile.
In this model, a leader’s effectiveness also depends on matching his or her style with the followers’ characteristics and demands of the task situation, and then taking steps to in�luence performance and satisfaction (House & Mitchell, 1974) —three contingencies that we will explore in more detail. Like in Hersey and Blanchard’s situational approach, the leader is concerned with followers’ developmental levels and an organization’s characteristics, but here a leader is also expected to address a subordinate’s speci�ic motivational needs. Table 4.1 depicts the interaction of the three contingencies that are necessary for leadership effectiveness.
Leader Styles Path–goal theory identi�ies four styles of leadership: directive, supportive, participative, and achievement oriented. As in situational theory, leaders in this model adapt their styles to followers’ needs and work conditions. Leaders can show any or all of these styles and behaviors with different followers, depending on the circumstances and needs.
Table 4.1: Path-goal model
Leadership behavior Subordinate characteristics Task characteristics
Directive Provides guidance and psychological structure
Dogmatic Authoritarian
Ambiguous Unclear as to rules Complex
Supportive Provides nurturance
Unsatis�ied Needs af�iliation Needs human touch
Repetitive Unchallenging Mundane
Participative Provides involvement
Autonomous Needs control Needs clarity
Ambiguous Unclear Unstructured
Achievement Oriented Provides challenges
Has high expectations Needs to excel
Ambiguous Challenging Complex
Source: Adapted from Northouse, P. Leadership (2010), Theory and Practice (5th ed.) p. 131. Thousand Oaks, CA: Sage Publications, Inc.
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The supportive leader is cordial and helpful and shows concern for followers’ socio- emotional needs and well-being.
The directive leader tells followers what is expected of them and how to plan, control, and monitor tasks, make schedules, and follow procedures. This leadership style and behavior is related to the task-oriented styles discussed earlier, and is effective when the followers’ roles and tasks are ambiguous and complex. The supportive leader is cordial and helpful and shows concern for followers’ socioemotional needs and well- being. Supportive leadership is needed when followers’ tasks are dif�icult and relationships are emotionally distressing. The participative leader consults with followers, solicits their input, asks for opinions and suggestions, meets with employees in their work spaces, and encourages dialogue and communication. This type of behavior and style is helpful when followers are personally involved in their work. The achievement-oriented leader sets clear and challenging goals for followers and expects high-quality performance. This leader also shows con�idence in followers and helps them learn how to obtain higher goals.
If you are a follower, which style do you respond to best? Why? If you are a leader, which style do you espouse?
Follower Characteristics Imagine that you have just joined an organization, and your supervisor has been trained in path–goal theory. Depending on what tasks you are assigned, how would you want and need a supervisor to assist you? What style and leadership role would work best to motivate you to achieve your work goals? As you read this section, think of your current or a previous work situation and what your motivational needs are or were with regard to carrying out your assignments. If you are in a leadership position, try to characterize your current subordinates based on these criteria.
Motivational needs—and thus a leader’s approach—differ based on three factors: the follower’s ability to perform tasks; the follower’s
locus of control; and the follower’s tendency to defer to others (authoritarianism).
The idea of ability discussed here directly mirrors the developmental level discussed in Hersey and Blanchard’s situational theory. A follower who does not think he or she can do the work would require a directive leader who provides speci�ic instruction and training. A supportive leadership style would complement such a style for an insecure follower but would not be effective on its own. In contrast, a competent and con�ident follower would require less monitoring and would respond well to participative, achievement-oriented, or supportive leadership styles.
As discussed in personality theory, a follower with a high external locus of control believes outside forces determine the ability to achieve goals. This type of follower would need a directive leader. Likewise, a follower with a high internal locus of control believes one controls one’s own life and takes responsibility for one’s own goals. This type of follower would bene�it from a participative leader who would invite the follower into decision making. Achievement-oriented and supportive leadership styles are less relevant here.
Finally, authoritarianism refers to a follower’s need for an authority �igure. An authoritarian or dogmatic follower prefers to defer to others and be told what to do and how. In environments that are high in uncertainty, this type of follower may need a directive leader to create a psychological structure and a comfort zone to help the follower clarify goals and attain a greater sense of certainty. An achievement-oriented style may also be helpful here, but the primary need is for direction. For a follower who has a need for af�iliation, or a relationship and emotional connection, a supportive leadership that is friendly and caring may be a helpful resource that enables a follower to achieve his or her goals. The collaborative nature of a participative leadership style may also appeal to this type of follower.
Task-Environment Characteristics Path–goal theory characterizes a task environment in terms of task structure, formal authority, and the follower’s primary work group. Task structure refers to the characteristics of a task (or several tasks): Tasks may be complex and ambiguous with unclear rules, repetitive and unchallenging, or a mix of these two descriptions. Formal authority refers to the leader: The team leader may be too authoritarian or too lax and vague in giving instructions. A work group is
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self-explanatory; it encompasses those who work with a follower. Work group members may be insensitive to an individual’s motivational needs, or they may be caring and responsive.
Think of your task environment in your present job. What is the nature of your tasks? How much authority does the leader possess? What is your work group like? What leadership style would work best for you?
Taken together, the effects of these task-environment characteristics can be motivating or demotivating for followers. For example, when there are unstructured tasks with unclear goals, and the group is unsupportive, then a new employee with low con�idence who has a need for af�iliation will probably need a leader whose style combines supportive and directive characteristics. On the other hand, a highly skilled, competent, and overachieving follower may experience problems in a work environment that has clearly de�ined, routine tasks with a highly formal—even rigid— authority system and a work group whose norms include “If it isn’t broken, don’t �ix it.” In this situation, a leader whose style combines supportive and achievement-oriented behaviors may be helpful to the follower. The leader might suggest a change of work groups and work contexts after further exploring the employee’s needs and motivation. Can you think of other task-environment scenarios and the styles—or combination of styles—that would be most effective in them?
Path–goal theory has continued to develop over the years. House added four additional styles in 1996 that are not discussed here, but they are an example of how leadership theory often evolves alongside a changing work environment. Research results are mixed regarding this theory. Some studies support the relationship between directive leadership style and worker satisfaction when tasks are ambiguous, but other studies do not. Because of the complexity of the theory, critics argue that it is dif�icult to know which leadership style to use, and when, with any certainty. It is argued that the relationship between leader behavior and follower motivation has not been established.
There are other questions regarding the usefulness of the model. Practitioners cannot know if a particular leadership style affects followers’ work motivation. Moreover, could follower dependency on leaders be created by this model? That is, could certain followers whose needs are not satis�ied by a work context come to rely on a leader whose support and advice motivated them? Does this theory promote a one-way type of leader–follower exchange and relationship? More research is needed. However, even with these questions, the model contributes a practical and helpful method for followers and leadership by expanding on the dimensions of both task and consideration aspects of employer– employee relationships.
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Job satisfaction, commitment, and trust are also factors that are related to performance.
4.4 Individualized Leadership, Leader–Member Exchange (LMX), and Followership
As leadership theory evolved, workplace relationships and exchanges between leaders and individual organizational members were examined not only in terms of performance exclusively, but also in terms of job satisfaction, commitment, and trust—factors that were also related to performance (Rockstuhl, Soon, Dulebohn, & Shore, 2012). The theory of leader as hero or person gifted with important traits was giving way to leaders who were able to build relationships with different followers, and vice versa. The theory of individualized leadership, dyadic and Leader– Member Exchange (LMX) was born.1 (http://content.thuzelearning.com/books/Weiss.6184.19.1/sections/ch04sec4.4#chapter4note1) Leader– follower relationships are now recognized as relevant and vital throughout organizations (Smith & Kirkland, 2012). Research indicates other reasons why leader– follower relationships are important:
1. The value of the social dimensions of these relationships predicts follower outcomes more than behaviors or traits of leaders (Kang & Stewart, 2007; Manzoni & Barsoux, 2002; Perumalu, Kandan, & Ali, 2010).
2. Strong LMX relationships increase follower commitment to organizations while lowering their prospects of quitting or leaving (Biron & Boon, 2013; Volmer, Spurk, & Niessen, 2012; Zhang, Tsingan, & Zhang, 2013).
3. New employees bene�it from the LMX when this relationship serves a mediating role in helping newcomers understand their connection with their job and organization (Sluss & Thompson, 2012).
Next we explain dyadic vertical relationships, team-member exchange, and team-member exchange theory.
Stage 1. The Average Leadership Style (ALS) View (1972– 1977) Individualized leadership evolved over three stages. The earliest stage of individualized leadership was characterized by Danereau (1995) as predating dyadic relationships between leaders and followers. During this stage leaders did not necessarily treat all followers equally, but neither were leaders observed to have had a more unique, individualized relationship with followers as stage 2 showed. Leaders had their own styles and differences and related to followers accordingly.
Stage 2. Vertical Dyad Linkage (VDL) and Leader-Member Exchange (LMX) Approach (1978–1989) During this stage, vertical dyad linkages evolved into more individualized leader–member exchanges. A dyad is an individualized relationship between two people, so dyadic models are examining just that: the relationship between two individuals. Dyadic theory views leadership as exchanges between follower and leader over time; the leader forms different relationships with separate followers. During this stage, Vertical Dyad Linkage (VDL) illustrates that leader and follower exchanges were formed through exchanges characterized by vertical dyads since there was a power distance within the relationships in work units. Both task and consideration dimensions were still important, and although trust, respect, and responsibilities existed between leader and follower in these relationships, relationships based on more formal exchanges also occurred.
Over time, “in-groups” and “out-groups” formed between leaders and followers. Out-groups consist of individuals not considered part of a core group, or those who comprise an in-group. The out-group member exchanges are therefore more formal, rule and compliance based. In-group members on the other hand, shared in more supportive feedback and consideration-based exchanges with the leader, who gave attention and perks to those in these groups. In-groups and out-groups continue to exist today.
Also, during this stage of individualized leadership the leader–member exchange theory was developed, which characterized leader–member exchanges as more individualized, higher quality relationships between leaders and different followers. Researchers argued that such relationships could predict performance of subordinates more than
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traits and even behaviors of leaders (Kang & Stewart, 2007; Perumalu et al., 2010; Raymond, Yina, & Hang-yue, 2009). LMX exchanges, however, were not all characterized as equal. As in stage 2, leaders interacted with different members in selective ways because resources were limited. Consequently, members of in-groups enjoyed more frequent communication exchanges, greater value congruence, and consequently more job satisfaction and even better performance than those in out-groups.
Stage 3. Individual Leader, Team–Member Exchanges (TMX), and Networks Approach (1990–) As teams �lourished in organizations, team leadership evolved and such exchanges between leader and followers were termed Team–Member Exchanges (TMX). The verticality in stages 1 and 2 gave way to more peer-related relationships characterized by camaraderie, feedback, idea sharing, and closer working relationships. In-group and out-group dynamics still existed, but were less emphasized in this team structured stage, which also characterized leaders as interacting and forming relationships not only within their own work units but in and across different functions and even divisions of the organization.
During this stage and stage 2 as well, partnership building relationships between leaders and followers occur. Positive relationships are emphasized. Although teams and leader– follower exchanges in these types of relationships broadened the scope of leader– member relationships, issues still surfaced. Ethical issues of (procedural) fairness among team - members involved who was being paid (distributive fairness), rewarded, and treated in just ways (Gaen, Hui, & Taylor, 2006; Lussier & Achua, 2016). Still, leader-team and follower relationships during this stage encouraged both people and production or work-related demands and requirements of leaders and followers.
Bene�its and Limitations of Individualized Leadership-Followership Exchange Theory
Studies on leader–member exchange theory con�irm the �indings that high-quality relationships between leaders and followers facilitate a range of outcomes: more citizenship behavior; greater trust, commitment, and liking; higher performance and job satisfaction (Ilies, Nahrgang, & Morgeson, 2007; Rockstuhl et al., 2012; Wallis, Francis, Yammarino, & Feyerherm, 2011). Leaders and followers, from this theoretical perspective, must adapt and change behaviors to accommodate relationships and work requirements; the in�luence relationship goes both ways. Obstacles and factors in work environments and situations must also be considered, negotiated, and dealt with to maintain healthy interpersonal and professional leader–follower perceptions, behaviors, and attitudes. Self-identities that are dyad centered must be broadened into a collective self-identity considering the larger group members (Knippenberg, D. Van et al., 2004). Leaders who can create work environments, climates, and cultures based on trust, openness, responsibility, and respect create productive relationships among followers as well as between leader and follower. Followers who take responsibility to actively ask for and accept feedback and advice to enhance their role and work are more likely to form value-added relationships with their leaders.
One limitation of the LMX theory is the dif�iculty in measuring the relationships, especially because the standard LMX-7 questionnaire concentrates on followers’ experiences and perspective of the relationships (Gerstner & D. Day, 1997; Lussier & Achua, 2016). Also, there is a bias toward in-group members. Care must be taken by researchers when selecting and studying relationships from this theoretical view. In sum, the LMX theory, building on past theories, opened the �ield and practice of leadership to include a more three-dimensional view of both leaders and followers in real-time relationships.
Note 1. (http://content.thuzelearning.com/books/Weiss.6184.19.1/sections/ch04sec4.4#chapter4note1-backlink) This section is also based on the works of Green, G, & Day, D. (1997). Meta-Analytic review of leader-member exchange theory: Correlates and construct issues. Journal of Applied Psychology, 82(6), 827–844; Yammarino, F., & Dansereau, F. (2002). Individualized leadership. Journal of Leadership and Organizational Studies, 9(1), 90–99; Gaen, G, & Uhl-Bien, M. (1995). Relationship-based approach to leadership: Development of Leader-Member Exchange (LMX) theory of leadership over 25 years: Applying a multi-level multi-domain approach. Leadership Quarterly, 6(2), 219–247; Danereau, F. (1995). A dyadic approach to leadership: Creating and nurturing this approach under �ire. Leadership Quarterly, 6(4), 479–490; Manzoni, J-F., & Barsoux, J-L. (1998, March-April). The
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set-up-to-fail syndrome. Harvard Business Review, 76, 101–113; Lussier, R., & Acua, C. (2016). Leadership (6th ed.). Boston, MA: Cengage Learning.
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Summary & Resources
Chapter Summary Leadership studies evolve in this chapter beyond trait theory to de�ine and include leaders’ styles to “�it” with followers and tasks in different work situations. We follow the progression of understanding how leaders can understand behaviors, contingency factors, and �inally individualized leadership relationships with followers to be effective and ef�icient. Leadership and followership evolved from a task- versus people-oriented continuum where the Michigan and Ohio studies matched production-oriented approaches with employee-oriented approaches to theories that explained how particular leadership styles would “�it” with follower and task environment.
The contingency-based leadership theories led by Fiedler progressed to the path–goal theory that helped identify the readiness and willingness of followers to perform tasks. The correct leadership style could then adapt to the follower, who could be coached, educated, and trained for different tasks.
Finally, individualized leadership and LMX (leader–member exchange) theory also evolved through stages until both leader and follower could be seen and studied from a more complex relationship in which both had in�luence and responsibilities for managing productively, in ethically fair and emotionally gratifying interpersonal relationships. The next chapter moves leadership further ahead to yet another level of richness and complexity. You may be observing insights and changes about your own evolving leader and follower style as you re�lect on your assessments and exercises.
Web Resources The Food Channel and Personal Vision
http://www.youtube.com/watch?v=BxFFR9pzVyE (http://www.youtube.com/watch?v=BxFFR9pzVyE)
The Food Channel emphasizes the importance of having personal vision.
David Anderson on Personal and Professional Mission Statements
https://youtu.be/JaECsnWJAWA (https://youtu.be/JaECsnWJAWA)
A strategic thinker and expert in investment banking, Anderson discusses insights for discovering mission statements.
How to Write a Mission Statement That Doesn’t Stink
http://www.youtube.com/watch?v=LJhG3HZ7b4o (http://www.youtube.com/watch?v=LJhG3HZ7b4o)
Author Dan Heath gives some concrete advice.
Mission statements aren’t just for businesses. Jon and Kate Gosselin, parents of eight children, drafted a mission statement in the early days of their TV show.
Critical Thinking Questions 1. Apply the Michigan and Ohio studies leadership/employee models to the opening chapter scenario
summarizing Tony Hsieh’s proposed peer and self-managed teams approach. Argue how these models would and would not �it that situation.
2. Show and provide evidence where Tony Hsieh and Jeff Bezos �it on the leadership grid? Explain. Compare where your style is on that grid and why, as compared with Hsieh and Bezos.
3. Apply the Hersey and Blanchard model to yourself and explain your reasoning. What do you need to move or advance to a different dimension on that model? Explain.
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4. Apply the Path–Goal approach to yourself and then with a friend. Discuss similarities and differences of your experience.
5. Explain to Hsieh at Zappos how the Individualized Leadership and Leader–Member Exchange (LMX) theory and applications might be helpful with his employees at Zappos with their type of company and structure.
6. Assume you are a leadership consultant. Of all the theories and models in this chapter which ones do you �ind most helpful to use with leaders and employees who hired you to help with their professional development? Explain.
Key Terms
authority-compliance leader
commitment
competence
country club leader
directive style
formal authority
Situational Approach
impoverished leader
Leader-Member Exchange (LMX)
leadership grid
least preferred coworker
Michigan and Ohio leadership studies
middle-of-the-road leader
opportunist
path–goal theory
people oriented
supportive style
task oriented
task structure
team leader
work group
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Dion Weisler, the CEO of HP Inc., is reputed to be an energetic competitor; General Motors CEO Mary Barra is considered the �ixer. So what do these two CEOs have in common? They are transformative and, to some extent, transactional leaders who took leadership of companies in need of radical change. Their future leadership reputations are still at stake (Constantino, 2014).
5 Transactional and TransformationalLeadership
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Learning Outcomes
After reading this chapter, you should be able to:
1. De�ine transactional leadership and evaluate the full range leadership model.
2. Explain the characteristics, effectiveness, and limitations of transformational leadership.
3. Describe the �ive best practices of leadership challenge and model.
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Rebecca Sapp/Getty Images Entertainment/Getty Images
Lynda Weinman, cofounder of Lynda.com, displayed transformational leadership.
Weisler took the top spot at Hewlett Packard in 2015 to lead the company through a planned split that would separate its computer and printer businesses from its corporate technology business (data centers, software, and related services). The latter became Hewlett Packard Enterprise (HPE), while the former was branded HP Inc., which Weisler would lead. Since the separation, HP Inc. has overtaken the former market leader Lenovo to become the biggest PC maker, an impressive achievement considering that the PC market is shrinking. Under Weisler’s leadership, HP Inc. has also entered the 3D printing market. He said, “I’m absolutely convinced we’re on the cusp of the next Industrial Revolution” (Gharib, 2018). Weisler is known to be a hands-on leader who strives to lead by example.
Mary Barra, the �ixer, has worked at GM since the age of 18, and later becoming an engineer with the company. She took charge of GM in January 2014 as the �irst woman CEO at a top-eight auto manufacturer. She was met with one of the �irm’s largest crises—the discovery and litigation of defective ignition switches in thousands of GM vehicles. Three months into her role, she was working through several hearings before Congress that related to 13 deaths and dozens injured from accidents caused by the defective switches. A result has been a multi-billion-dollar class action suit and the most recalls in the company’s history. Barra is given credit for her skill and ability in handling the crisis; she expressed authenticity, compassion for the victims, “transparency with investigators and regulators, and a commitment to create a new company culture that will produce the best autos within its competitive classes” (Goer, 2015). She was named Crisis Manager of the Year in 2014 for having “expertly navigated one of the most dif�icult years imaginable” (Geir, 2014). She intends to break information silos and �ix systemic dysfunction within the company (Constantino, 2014).
The stories of these two CEOs—Weisler and Barra—illustrate the magnitude of challenges and risks that top-level leaders are required to take to restore companies to pro�itability and even survival. Their responsibilities and talents require both transactional and transformational leadership traits and skills.
Lynda Weinman is another CEO whose career offers insight into transformative leadership. She played a pioneering role in both online education and subscription business models. Starting from independent contract work as a digital animator, her career took her from teaching to publishing to opening the Ojai Digital Arts Center, where she taught web development skills. She launched Lynda.com in 1995 as an online resource for students taking classes at the center. “Then with the dot-com crash and 9/11, people stopped wanting to travel. That’s when we decided to put our lessons online,” Weinman said (Larson, 2013). Over 20 years, the learning platform grew from its focus on IT skills to include creative and business skills.
Illustrating her transformational leadership vision, Weinman said, “Making money is what you have to do to sustain a business—being driven to make something of value and purpose is much more
powerful” (Hedayati, 2014). Weinman’s passion for teaching and learning contributed directly to her success as a leader. But she also knew when to be transactional: When LinkedIn® purchased Lynda.com in 2015 for $1.5 billion, she exited the company and began an encore career as an independent �ilmmaker. LinkedIn was acquired by Microsoft in 2016 (Sorvino, 2016). Microsoft rebranded the platform as LinkedIn Learning in 2017.
Recall that a critical component of leadership is in�luence; and, as the persons, processes, and systems in Figure 1.1 in Chapter 1 illustrate, leadership and leaders’ in�luence can be understood by observing the persons and their characteristics, the processes and systems they use to lead, and the context in which they lead. These factors in large part help determine leadership effectiveness in in�luencing and mobilizing followers to achieve organizational visions and goals. The theories presented in this chapter—transactional and transformational—go further by explaining the characteristics and styles of leaders who not only effectively manage people, but those who also embody the larger vision and can deeply in�luence followers and stakeholders to implement these visions.
Transactional and transformational styles of leadership are sometimes interrelated; a transformational leader, for example, can be and often is transactional; but transactional leaders are not all transformational, as we will discuss. As you read, keep in mind that there is no single most effective leadership style, and consider what elements of these approaches you would like to develop in your own leadership style or to see in others. We will examine transactional leadership �irst and then turn to transformational leadership. Before we discuss these two styles, take Assessment 5.1 to identify how transformational your leadership style is.
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Assessment 5.1: Transformational Leadership
Instructions
Think about a situation in which you either assumed or were given a leadership role. Think about your own behaviors within this context. To what extent does each of the following statements characterize your leadership orientation?
Very little
Moderate amount
Very much
1. Have a clear understanding of where we are going. 1 2 3 4 5 6 7
2. Paint an interesting picture of the future for my group. 1 2 3 4 5 6 7
3. Am always seeking new opportunities for the organization/group. 1 2 3 4 5 6 7
4. Inspire others with my plans for the future. 1 2 3 4 5 6 7
5. Am able to get others to be committed to my dreams. 1 2 3 4 5 6 7
6. Lead by “doing,” rather than simply by “telling.” 1 2 3 4 5 6 7
7. Provide a good model for others to follow. 1 2 3 4 5 6 7
8. Lead by example. 1 2 3 4 5 6 7
9. Foster collaboration among group members. 1 2 3 4 5 6 7
10. Encourage employees to be team players. 1 2 3 4 5 6 7
11. Get the group to work together for the same goal. 1 2 3 4 5 6 7
12. Develop a team attitude and spirit among employees. 1 2 3 4 5 6 7
13. Show that I expect a lot from others. 1 2 3 4 5 6 7
14. Insist on only the best performance. 1 2 3 4 5 6 7
15. Will not settle for second best. 1 2 3 4 5 6 7
16. Act without considering the feelings of others. 1 2 3 4 5 6 7
17. Show respect for the personal feelings of others. 1 2 3 4 5 6 7
18. Behave in a manner thoughtful of the personal needs of others. 1 2 3 4 5 6 7
19. Treat others without considering their personal feelings. 1 2 3 4 5 6 7
20. Challenge others to think about old problems in new ways. 1 2 3 4 5 6 7
21. Ask questions that prompt others to think. 1 2 3 4 5 6 7
22. Stimulate others to rethink the way they do things. 1 2 3 4 5 6 7
23. Have ideas that challenge others to reexamine some of their basic assumptions about work.
1 2 3 4 5 6 7
24. Always give positive feedback when others perform well. 1 2 3 4 5 6 7
25. Give special recognition when others’ work is very good. 1 2 3 4 5 6 7
26. Commend others when they do a better-than-average job. 1 2 3 4 5 6 7
27. Personally compliment others when they do outstanding work. 1 2 3 4 5 6 7
28. Frequently do not acknowledge the good performance of others. 1 2 3 4 5 6 7
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Scoring: Subtract your responses to questions 16, 19, and 28 from 8. There are seven dimension scores to be computed. Articulate vision: Sum your responses to questions 1 through 5 and divide by 5. Provide appropriate model: Sum your responses to questions 6 through 8 and divide by 3. Foster acceptance of goals: Sum your responses to questions 9 through 12 and divide by 4. High-performance expectations: Sum your responses to questions 13 through 15 and divide by 3. Individual support: Sum your responses to questions 16 through 19 (using your adjusted responses for questions 16 and 19) and divide by 4. Intellectual stimulation: Sum your responses to questions 20 through 23 and divide by 4.
Transactional leader behaviors: Sum your responses to questions 24 through 28 (using your adjusted response for question 28) and divide by 5.
My scores are: Articulate vision: __________; Provide appropriate model __________;
Foster acceptance of goals: __________; High-performance expectations: __________;
Individual support: __________; Intellectual stimulation: __________; and
Transactional leader behaviors: __________.
Interpretation
Six basic dimensions of the transformational leader are pro�iled by this self-assessment: articulate vision, provide appropriate model, foster acceptance of goals, high-performance expectations, individual support, and intellectual stimulation. A high score (6 or greater) re�lects a high behavioral orientation to engage in each of these behaviors.
The seventh leadership dimension pro�iled here re�lects your tendency to engage in behaviors characteristic of the transactional leader. A high score (6 or greater) re�lects a strong behavioral orientation to give something to your followers in exchange for their giving something to you that as a leader you want (expect).
Source: Transformational leader behaviors and their effects on followers’ trust in leader, satisfaction, and organizational citizenship behaviors,” by P. M. Podsakoff, S. B. MacKenzie, R. H. Moorman, and R. Fetter. Leadership Quarterly 1(2), pp. 107–42. Copyright © 1990. Published by Elsevier Inc.
Superior leadership performance—transformational leadership—occurs when leaders broaden and elevate the interests of their employees, when they generate awareness and acceptance of the purpose and mission of the group, and when they stir their employees to look beyond their own self-interest for the good of the group. Transformational leaders achieve these results in one or more ways: They may be charismatic to their followers and thus inspire them; they may meet the emotional needs of each employee; or they may intellectually stimulate employees (Bass, 1990, p. 21).
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Transactional leaders focus on managing consistent, quality performances from followers to achieve organizational goals and objectives. Followers who perform well are rewarded.
5.1 Transactional Leadership Transactional leadership evolved from a marketplace that “demands reciprocity, �lexibility, adaptability, and real-time cost-bene�it analysis” (Sadeghi & Pihie, 2012, p. 122; Burns, 1978). In transactional leadership leaders perform more routine but essential leadership and managerial tasks. Like the traditional model of managers discussed in Chapter 1, transactional leaders plan, schedule, control, and work with subordinates on detailed tasks. Burns (1978) stated that transactional leaders lead through social exchange. Bass and Riggio (2006) noted that “transactional business leaders offer �inancial rewards for productivity or deny rewards for lack of productivity” (p. 3).
Transactional leaders focus on managing consistent, quality performance from followers to achieve organizational goals and objectives (Bryant, 2003). Their work is mostly transaction or exchange based; in other words, they respond to, reward, support, and structure followers’ contracted effort and performance (Jung & Avolio, 1999). Transactional leaders also enable followers to “ful�ill their own self-interest, minimize workplace anxiety, and concentrate on clear organizational objectives such as increased quality, customer service, reduced costs, and increased production” (Jung & Avolio, 1999; Sadeghi & Pihie, 2012). Without these leaders’ contributions, organizational goals would not be implemented. Lussier and Achua (2013) wrote, “Transactional leadership seeks to maintain stability rather than promoting change within an organization through regular economic and social exchanges that achieve speci�ic goals for both the leaders and their followers” (p. 45).
Tim Cook, CEO of Apple®, illustrates strong transactional leadership characteristics. Cook has been criticized by some investors as being
uninspiring and not offering the innovative genius that Jobs had (Richtel & Chen, 2014). But Cook didn’t need to transform Apple. His job when he took over was to ensure that Apple remained an elite organization. He has accomplished just that. Cook is involved in the operations and such activities as hiring (Richtel & Chen, 2014). He is credited with building a production plant in Arizona and a factory in Texas that produces high-end Mac computers. During his tenure as CEO, Apple has released several top-selling upgrades, such as iPad Mini and the larger iPhone, and introduced Apple products into China. He split Apple’s stock, increased the dividend, and engineered a $90 billion buyback, putting Apple on �irm �inancial footing now and for years to come.
The full range leadership model developed by Bass and Riggio (2006) illustrates how transactional leadership is an integral part of a leadership spectrum that includes transformational dimensions, discussed later in this chapter. The full range of leadership theory has “an impressive 30-year history of empirical support,” which offers strong evidence of the role transactional leadership plays (Sadeghi & Pihie, 2012) as exempli�ied in the works of contemporary scholars Diaz-Saenz, 2011; Gundersen, Hellesoy, & Raeder, 2012; Hamstra, Van Yperen, Wisse, & Sassenberg, 2011; Judge & Piccolo, 2004; Leong, 2011; Reichard et al., 2009; Yukl & Mahsud, 2010. The �irst three dimensions at the bottom of Figure 5.1 characterize the transactional strategies that a leader can use—individually or in combination—when relating to and in�luencing followers. These three transactional characteristics are laissez-faire, management by exception, and contingent reward.
Figure 5.1: Transactional–transformational leadership continuum
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Source: Robbins, Stephen P. & Judge, Timothy A., Organizational Behavior, 14th, ©2011. Printed and Electronically reproduced by permission of Pearson Education, Inc., New York, New York.
Laissez-faire leadership abdicates responsibilities and avoids observing, giving feedback, and making decisions. It is the least effective of all a leader’s characteristics (Bass, 1990). This approach differs from passive “management by exception” in that a manager may not even detect errors in subordinates’ work. There are, however, situations in which a laissez-faire, hands-off style may be appropriate. Examples of the appropriate use of laissez-faire leadership are (1) when an issue is trivial and makes no differences to the leader or others involved (e.g., two coworkers scheduling their individual �lex times at work) (Bass & Riggio, 2006); (2) after goals and schedules are in place and working well; and (3) when systems are in place that provide rewards for seniority and other detailed criteria (e.g., civil service speci�ications and categories). Akin to the absence of micromanaging, laissez-faire leadership may also be appropriate when followers have more education, expertise, and experience in certain tasks than their leaders or managers (“Penn State,” 2013).
Management by exception has two types: active and passive. Active management by exception is when a leader observes and takes corrective action. Bass, who identi�ied these particular characteristics of transactional leaders, did not state what speci�ic types of corrective action a manager takes—that is, whether or not punishment is offered, rewards withheld, and so on. Passive management by exception, according to Bass (1990), is when a manager intervenes only if standards are not met. Management by exception is slightly better than laissez-faire because leaders interact with their followers to observe and correct errors, but it remains less than ideal because followers usually bene�it from having more feedback. As we will see, transformational leadership builds on transactional leadership. The most effective leaders are often those who have both transactional and transformational leadership skills (Robbins & Judge, 2015).
The contingent reward (or contract reward) is used to motivate followers to perform by promising rewards for good performance (Bryant, 2003). Rewards of this type include (1) exchange of rewards for effort contracted, (2) rewards for achieving goals promised, and (3) recognition for accomplishments (Hay, 2006). This type of exchange relationship between leader and follower may be transitory, depending on the negotiated contracts and assignment (Lussier & Achua, 2013). Contingent reward ensures that followers perform according to their contracted assignments and
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position requirements; however, it does not necessarily inspire followers to perform outside their comfort zone, and it limits the leader–follower relationship, as there is no emotional connection or concern for the follower.
Recent empirical studies on “full range leadership” show that “if you had to pick just one leadership behavior to predict leadership outcomes (both job satisfaction and leader effectiveness), the behavior to choose would be Consideration” (Piccolo et al., 2012, p. 579). (See Figure 5.1.) Hogan, Hogan, and Kaiser (2010) states that consideration as a leadership behavior
dominated transformational leadership in terms of overall predictive validity, highlighting the importance of basic interpersonal savvy in effective leadership. Indeed, in organizational settings, many leader failures can be traced directly to his or her inability or unwillingness to be empathetic, to be considerate, or to maintain amicable relationships with colleagues. (Hogan et al., 2010, p. 380)
The big take-away from this research is that organizations can increase productivity by ensuring that leaders proactively implement consideration into their leadership style (Greenberg, 2006; Skarlicki & Latham, 2005). The researchers go on to suggest “a ‘full range’ model of leadership should extend beyond the transformational–transactional leadership paradigm to include the relational aspects of leadership uniquely captured” (Piccolo et al., 2012). (See Figure 5.2.)
Figure 5.2: Full range leadership model: Leader effectiveness and job satisfaction
In a related study, one researcher, David Rock, director of the Neuroleadership Institute, teamed up with the Management Research Group to gain insight into the question as to whether or not a leader can be strong at both social skills and goal-focus (or task-oriented) skills. Thousands of employees scored their bosses on goal focus (related to a production orientation) and social skills. Researchers found that less than 1% of leaders scored high on both these dimensions. Matthew Lieberman, author of Social: Why Our Brains Are Wired to Connect, found that it is dif�icult for people to focus in a social sense and an analytical sense simultaneously (Lieberman, 2013). Lieberman concluded that when we engage in one type of thinking, it’s harder to engage in the other type. Because analytical thinking has historically been the predominant mode of thinking in business, it is
harder to recognize the social issues that signi�icantly affect productivity and pro�its. Moreover, employees are much more likely to be promoted to leadership positions because of their technical prowess. We are thus promoting people who may lack the social skills to make the most of their teams and not giving them the training they need to thrive once promoted.
Lieberman (2013) recommends that (1) more weight be given to social skills when hiring and promotion; (2) create cultures that rewards using both sides of the brain, and even though the balance is dif�icult, we should be aware of this phenomenon; and (3) we need to train our social thinking to increase its strength over time (Lieberman, 2013).
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Psychologists Eve Ash and Peter Quarry discuss supervisory styles. Selecting a style that is supervisory in nature requires leadership skills that are not at the enterprise level but are needed to supervise people in departments, divisions, work groups, and teams.
Three Supervisory Styles
Critical Thinking Questions
How do the supervisory skills in this video relate to the “full range leadership model” in this chapter? With which supervisory skills in the video do you need training and experience to be competent? Which of the supervisory skills have you experienced with a manager or leader? Which of these skills worked best and least well with you? Explain.
Transactional Leadership
Studies indicate that transactional leadership is relevant and appropriate in more stable, predictable environments in which ef�iciency is the focus and leaders act based on past precedents. Transactional leadership characteristics and style, for example, work in an environment that requires experience that changes slowly and incrementally (Bass & Riggio, 2006, p. 321). Organizationally, transactional leadership also works in more mechanistic rather than organic settings where there is hierarchical authority; centralized decision making; vertical communication, well-de�ined performance criteria; high extrinsic rewards, and high follower power and information (Howell, 1992). This style also involves both material and social exchanges and is characterized in part by important exchanges such as bene�its. Both leader and follower meet each other’s and the organization’s needs from those exchanges, which are similar to the LMX leader–follower exchange (Loi, Mao, & Ngo, 2009; Nam & Mohamed, 2011). Laissez-faire leadership is likely to emerge when “the tasks and goals are unimportant, the rewards are low, discipline is lax, the subordinates are experienced, and the leader is distracted, indifferent and uncaring” (Bass & Riggio, 2006, p. 13). These latter conditions may not be ideal or desired, and may call for more active leadership interventions.
In general, transactional leadership allows followers to realize their self-interests, minimize workplace anxiety, and concentrate on “clear organizational objectives such as increased quality, customer service, reduced costs, and increased production” (Sadeghi & Pihie, 2012, p. 117). Using contingent rewards and disciplinary behaviors has also had noticeable effects on employee performance, perceptions, and attitudes (Podsakoff, Podsakoff, & Kuskova, 2010; Ruggieri & Abbate, 2013). Transactional leadership has also been shown to have a positive effect on knowledge management practices in organizations (Nam & Mohamed, 2011). Moreover, transactional leadership has increased follower Organizational Citizenship Behavior (OCB), commitment, and trust in their leaders (Whittington et al., 2009).
Criticisms of transactional leadership (McCleskey, 2014) claim such practices are not long lasting but temporary, short- term, and shallow and can create resentment because transactional leaders correct and discipline as well as strengthen follower behaviors (Burns, 1978). Others argue that transactional leadership theory uses a one-size-�its-all approach that omits context, organizations, and situations (Yukl, 1999; 2011; Yukl & Mahsud, 2010).
However, it is important to note that although there are differences between transactional leadership and other styles, scholars argue that transformational leaders use both transactional and transformational leadership elements. Bass and Avolio (1993) stated that “Many of the great transformational leaders, including Abraham Lincoln, Franklin Delano Roosevelt, and John F. Kennedy, did not shy away from being transactional. They were able to move the nation as well as play petty politics” (p. 101).
Main Supervisory Styles From Title:
Supervisory Styles (https://fod.infobase.com/PortalPlaylists.aspx? wID=100753&xtid=49877)
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J. Countess/Getty Images Entertainment/Getty Images
Former New York City Police Chief Bill Bratton is a good example of a transformational leader
5.2 Transformational Leadership Transformational leadership is a style in which a leader seeks to change and engage followers and the organization by creating a compelling vision, strategy, and culture. By being attentive to followers’ needs and identifying the needed change, a transformational leader motivates followers to achieve their and the organization’s potential (Burns, 1978).
New York City, the Big Apple, was called the Rotten Apple when police chief Bill Bratton arrived in 1994. Crime was rampant, and the New York Police Department’s 35,000 of�icers were underpaid and unmotivated. Two years after Bratton’s arrival, however, New York City became one of the safest cities in the United States: “Felony crime fell 39%; murders, 50%; and theft, 35%. Gallup polls reported that public con�idence in the NYPD jumped from 37% to 73%, as internal surveys showed job satisfaction in the police department reaching an all-time high” (Kim & Mauborgne, 2003). In 2013, Bratton returned again to New York City as Police Commissioner after having served in that role in Los Angeles. His leadership role now is more challenging given the crises that have occurred between minorities and the police in New York City and in other major U.S. cities. Bratton again straddles a �ine line between policing in high-crime areas and having to answer to larger numbers of stakeholders in the community, media, interest groups, unions, and the mayor of New York City. Still, arrests from the last week of 2014 and the �irst week of 2015 declined by 56% compared to the same period the previous year (Bankoff, 2015).
How did, and does, Bratton succeed? He has a clear vision, goals, and methods for transforming and leading police departments. His “broken windows” policing theory states that “If over time you don’t address an issue, it will create a larger issue” (Bankoff, 2015). He has stated that “less than vigorous street work could create a lawless climate.” Toward that end, he ensures that of�icers lead by example and are visible in the communities where they work. “No one here can break the law in order to enforce it,” he was known to have said. Bratton consults with in�luential city councilors, court of�icials, media personnel, and community leaders in order to support his mission—which is always in sync with the mayors’ of the cities he serves. He installs a sophisticated information system that tracks all police department data; he uses statistics from the systems to track trends of individual and overall performance. He also sets a moral example and professional tone at the top. Bratton’s success in New York—as well as in Boston and Los Angeles—was among the �ive organizational turnarounds he has led in his 20-year policing career.
In a Harvard Business Review article, Kim and Mauborgne (2003) termed Bratton’s style “tipping point leadership.” They reported that Bratton strategically overcame cognitive, political, motivational, and resource hurdles to achieve the department’s aggressive goals. “Perhaps most impressive,” these authors stated, “the changes have outlasted their instigator, implying a fundamental shift in the department’s organizational culture and strategy” (p. 79). In 2002, several years after Bratton left his New York position, New York’s overall crime rate was the lowest among the 25 largest cities in the United States (Kim & Mauborgne, 2003). During Bratton’s �irst three years as LAPD’s Police Chief, crime was driven down by 26.4 percent, including a 25.5 percent reduction in homicide. That department also was recorded as having developed one of the most comprehensive and effective counter-terrorism operations in the U.S. (LAPD, 2015).
Bratton is what leadership scholars call a transformational leader. Transformational leaders (TL) in�luence, inspire, and literally transform followers to achieve organizational goals beyond their self-interests (Burns, 1978), thus initiating and bringing about positive change. These leaders introduce new business models, products, and services because of their ability to create new organizational visions, strategies, and structures through committed followers (Tucker & Russell, 2004). At the same time, they positively change followers’ lives, as the example of legendary basketball coach John Wooden shows. An athlete himself, he studied his own performance until he identi�ied 25 key behaviors he called his “Pyramid of Success.” He used short, memorable mottos to instill these behaviors in his players, whose success re�lected on him. Wooden’s leadership transformed his followers (Kuan-Chung, 2010).
The increasingly competitive and demanding business environment of the early 21st century requires leaders to champion transformational change. Turbulent changes—whether they be globalization, information-technology innovations, or corporate scandals and crises—challenge leaders to think and perform creatively and boldly. They must develop new competitive strategies, restructure
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because of the way he in�luenced, inspired, and moved followers to achieve police department organizational goals. Under his leadership, citizen con�idence in the police force rose markedly.
organizations, and change cultures and business processes to meet the product and service demands of changing markets.
Referring to the persons, processes, and systems Figure 1.1 in Chapter 1, it is important to point out that with regard to effective, transformational policing, police chiefs and other professionals who re�lect the race and ethnicity of the populations they serve in the United States are needed. “In at least 50 cities with
more than 100,000 people, the percentage of black police is less than half of what blacks represent in the population. . . . Hispanic representation among police is less than half of their share of the population in at least 100 cities” (Kelly, 2015). Catherine Sanz, president of Women in Federal Law Enforcement Foundation, stated that “A multicultural law enforcement agency that can understand and connect with the diversity of issues in a community is more effective at policing, which encourages federal agencies to hire female of�icers of all colors” (Alcindor & Penzenstadler, 2015).
There are many contemporary business, government, and philanthropic examples of transformational leaders who have created and implemented extraordinary organizational visions that have changed societies in different ways. Cisco Systems® is a technology manufacturing company with more than 74,200 employees and a market cap of $260.1 billion in early 2019 (The Network, 2019). As former CEO John Chambers handed leadership to Chuck Robbins in 2015, he said, “Chuck . . . takes vision and strategy and turns them into results" (Hackett, 2015). Jeff Bezos is the founder of Amazon, the second-largest e-commerce company in the world. Amazon hit $232.8 billion in revenue in 2018 (Macrotrends, n.d.). Bezos said, “But there’s still so much you can do with technology to improve the customer experience. And that’s the sense in which I believe it’s still Day One” (“Fast Company,” 2015). The Bill & Melinda Gates Foundation gave $7 billion in grants in 2017 and more than $45 billion in grants since its inception through 2017. “We focus on only a few issues because we think that’s the best way to have great impact,” foundation cochairs Bill and Melinda Gates wrote (Gates & Gates, n.d.). German Chancellor Angela Merkel led Europe’s largest economy through �inancial crisis and back to growth, making her the de facto leader of Europe (Forbes, 2019). What do these transformational leaders have in common? They have set and achieved what has been called BHAG—big, hairy, audacious goals—and one could add “visions” (Collins & Porras, 2004). They also lead by example, care about their employees and customers, and are experts in their respective �ields. The next section discusses practical ways transformational leadership can be learned and used.
Transformational leadership is not limited to a few great men and women, or to those of a particular race, religion, gender, ability, or creed. There are most likely such leaders in your organization; you may have transformational abilities and characteristics yourself. These qualities can be developed, but not everyone aspires to or has the capacity to be exceptionally transformational. As with any skill presented in this book, different people will excel more with certain skills than others. Refer back to Assessment 5.1 to see your transformational leadership score.
Characteristics of Transformational Leadership
The in�luencing process is central to the transformational leadership style. Transformational leaders not only move followers to concrete action—and extraordinary results—but they also transform followers in the process (Sashkin & Sashkin, 2003). Bass (1985, 1990), Bass and Avolio (1993, 1994), and Kuhnert (1994) argued that transformational leaders are motivated by strong internal values and ideals that enable them to in�luence and motivate followers to higher moral levels to achieve organizational goals. Followers believe they will be enriched while working toward positive goals.
Bass offered one of the most comprehensive de�initions of transformational leadership:
Superior leadership performance—transformational leadership—occurs when leaders broaden and elevate the interests of their employees, when they generate awareness and acceptance of the purposes and mission of the group, and when they stir their employees to look beyond their own self-interest for the good of the group. Transformational leaders achieve these results in one or more ways: They may be charismatic to their followers and thus inspire them; they may meet the emotional needs of each employee; and/or they may intellectually stimulate employees. (1990, p. 21)
Returning to Figure 5.1, the full range leadership model, we notice the top four characteristics or behaviors that enable transformational leaders to in�luence followers: idealized in�luence (also called charisma), inspirational motivation,
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Associated Press
President Franklin D. Roosevelt used idealized in�luence to inspire and rally Americans to his side in the Great - Depression and World War II with his series of �ireside chats on the radio.
intellectual stimulation, and individualized consideration (Bass, 1990). These characteristics, while useful in isolation, are most powerful when used in conjunction to build up followers and thus produce performance beyond expectations —a distinguishing quality of transformational leadership (Gellis, 2001; Hay, 2006).
Idealized In�luence
Idealized in�luence, or charisma, is based on the leader’s personality, character, and behaviors, which followers wish to emulate. Transformational leaders are trusted, admired, and respected because of idealized in�luence (Bass, Avolio, Jung, & Berson, 2003); they become strong role models whom followers take pride in, and create emotional attachment with followers. President Franklin D. Roosevelt provides an example of a leader who used idealized in�luence. Despite his battle with a paralytic illness, Roosevelt, or FDR, was able to inspire and rally Americans to his side during the dark times of the Great Depression. He initiated friendly “�ireside chats” with the public via the radio and spearheaded economic recovery with creative policies and daring activities. His popularity resulted in his being elected president four times—before presidential term limits were in effect. “If the leadership is truly transformational, its charisma or idealized in�luence is characterized by high moral and ethical standards,” Bass wrote (1997). Notice that here the focus is on the leader rather than the leader’s position of power or other contextual factors.
Inspirational Motivation
Inspirational motivation refers to how a leader is able to move followers toward a goal, or perhaps a new idea. Inspirational leaders are able to express important purposes in simple ways and present an appealing view of the future, which draws followers (Bass, 1990; DeVries, Bakker-Pieper, & Oostenveld, 2010). These leaders also encourage followers to buy into and become part of the overall organizational culture and environment; they offer followers the opportunity to see meaning in their work and they challenge them with high standards. To inspire followers, leaders encourage team spirit in rallies and meetings to reach goals of increased revenue and market growth for the organization; give speeches; engage followers in dialogue; and motivate by example.
A classic example is Martin Luther King, Jr.’s “I Have a Dream” speech—a de�ining moment for the civil rights movement at that time. Contemporary technology executives offer more recent examples: Longtime former Microsoft CEO Steve Ballmer was known for using his raucous but effectively engaging cheerleading style to lift expectations and competitive spirit among employees. Some of his speeches and appearances have even become viral videos, with several titled “Steve Ballmer Going Crazy.” Apple CEO Steve Jobs was also a master at inspiring and motivating not only Apple employees, but also customers, the media, and technology geeks who loved his new products.
Intellectual Stimulation
Intellectual stimulation moves and supports followers to think and innovate “outside the box.” Intellectual stimulation can include such leadership behaviors and practices as brainstorming, challenging the beliefs and norms of the group to innovate and be creative, promoting critical thinking and problem solving to make the organization better, and persuading and proposing new and even controversial ideas to followers without fear of punishment or ridicule (Oke, Nunsh, & Walumbwa, 2009). A contemporary example of a transformational leader with intellectual stimulation is Sheryl Sandberg, Facebook’s Chief Operating Of�icer. The company has a $160 billion market value. She directs sales, marketing, business development, human resources, and communications. Sandberg is not only a successful businesswoman but also a bestselling author. She wrote Lean In: Women, Work, and the Will to Lead, which has resulted in a movie deal and other books. Her fans include Yahoo’s CEO Marissa Mayer and the performer Beyonce. Sandberg’s
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leadership has helped Facebook increase its earnings performance and ramp up its mobile strategy. Sandberg is a member of The Giving Pledge, where she has pledged to donate half of her net worth to “charitable causes” (“Sheryl Sandberg,” 2015).
Individualized Consideration
Individualized consideration offers attention and concern to followers. Leaders exemplify individualized consideration by offering mentoring: individual coaching to followers, listening to their concerns, showing empathy to those who are demoralized or need uplifting, helping followers solve problems, providing counseling and emotional support when necessary, providing stimulation, and creating possibilities like higher level assignments for talented followers. Followers bene�it from such leader–follower exchanges when followers experience enhanced self-worth and leaders supported such exchange relationships (Wallis, Yamarino, & Feyerherm, 2011). Herb Kelleher, chairman and CEO of Southwest Airlines from 1971 to 2008, remains one of the most personable and effective leaders in that industry and in American business culture. He is known for the individual attention and concern he gave employees—as well as customers—regardless of their status or position in the company. Kelleher was known for constantly �lying on Southwest’s planes so he could talk to customers and employees about how Southwest was performing in a number of areas. One passenger reportedly sat next to Kelleher three times in 10 years. “Pro�it is a by-product of customer service. It’s not an end in and of itself,” Kelleher was known to have said (Mc Connell & Huba, 2001). He also joined employees and their family members in their homes, at company parties, and sometimes at hospitals. The husband of one employee recounted how, during that employee’s 5-hour high-risk surgery, “Herb was with me there, holding my hand through the entire operation” (Sashkin & Sashkin, 2003). See “Take the Lead: Transformational Leader: Leadership Balance and Focus” to apply these concepts.
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Not all transformational leaders show individual consideration to followers in the same way. Leaders also mentor followers by teaching and sharing knowledge and skills in addition to showing emotional concern and support. Leadership mentoring includes discussing and sharing ideas to help followers and teams make the right strategic moves; developing communication methods and styles to ensure clear, effective, and constant communication; helping followers identify what makes them �lourish, developing their capacity and resources for successful change; showing— again—empathetic support by listening to their concerns and facilitating processes designed for successful change (“Coaching Report #11,” 2009).
Effectiveness of Transformational Leadership
In addition to transformational leadership’s effect on followers, studies have shown that it can often lead to organizational success and better performance, whether in public, private, large, or small organizations. Keller’s (2006) study of research-and-development �irms found that high-scoring transformational project team leaders showed better- quality products after one year and had higher pro�its �ive years later.
Researchers have attributed transformational leaders’ success to their ability to build consensus, motivate others, set goals, promote creativity, and take risks. Ling, Simsek, Lubatkin, and Veiga (2008) found that �irms with transformational
Take the Lead Credits
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leaders were more likely to be engaged in corporate entrepreneurship because the �irms had more decentralized responsibility with managers who were more likely to take risks.
Limitations and Evaluation of Transformational Leadership
Transformational leadership is not effective in all organizational contexts. Much depends on the leader–follower dynamic, as well as the attitude of the follower. First, to be most effective, a transformational leader must be able to interact directly with followers rather than having to report to an external board of directors (Robbins & Judge, 2015) or deal with a highly bureaucratic, complicated, and large organization. For example, Ling et al. (2008) found that transformational leaders had a higher impact on performance in smaller, privately held �irms. Followers are more easily in�luenced if they are exposed �irsthand to a leader’s charisma and care for them. Second, followers must value group cohesiveness and be willing to cede authority for a transformational leader to be effective (Schaubroeck, Lam, & Cha, 2007). Followers who possess more of a “lone wolf ” mentality and prefer autonomy to teamwork are less likely to listen to or be persuaded by a transformational leader. Third, transformational leadership was found to be effective in increasing self-ef�icacy (an individuals’ belief about their capability) and empowerment in work evaluated at the individual level; Team-focused transformational leadership was correlated with higher group-level performance that focused on shared goals, beliefs, and values (Wang & Howell, 2010).
With regard to the full range leadership model, the four dimensions of transformational leadership may not, as one study showed, always be “superior in effectiveness to transactional leadership”; contingent leadership, characteristic of transactional leaders can be as effective (Robbins & Judge, 2015, p. 349). But as stated earlier, Piccolo et al. (2012) found that the transformational style of consideration was the strongest leadership of all with regard to both job satisfaction and leader effectiveness, with the other styles, including transactional, serving important purposes. The universal GLOBE study on leadership, which surveyed 825 organizations in 62 countries and 18,000 leaders (House et al., 2004) found that vision, foresight, offering encouragement, trustworthiness, dynamism, positivity, proactiveness, and excellent planning skills—dimensions of both transformational and transactional leadership—were found to characterize effective leaders across all cultures surveyed (Carl & Javidan, 2001; House et al., 2004; Robbins & Judge, 2015).
Transactional and Transformational Leadership Compared
Although transformational and transactional styles are often seen as lying in opposition to one another, transactional characteristics complement transformational leadership. Although transformational leadership contributes to developing and changing people, transactional leadership deals with more routine functions, though they can be important (Sashkin & Sashkin, 2003). Bryant (2003) found that transformational leadership could be more effective in creating and sharing knowledge at the individual and group levels, whereas transactional leadership could be more useful at exploiting knowledge at the organizational level. Scholars generally agree that effective leaders use elements of both transformational and transactional styles to achieve organizational goals, as situations require (Bass et al, 2003; Judge & Piccolo, 2004). However, note that while a leader can be solely transformational and effective, leaders who are competent but solely transactional in nature may be less strategic, less inclined and able to motivate large-scale organizational change, and more inclined to implement routine and predictable organizational tasks. Both styles are effective for obtaining organizational goals; transformational leadership shows the greatest total results, with transactional leadership being next.
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5.3 The Leadership Challenge: A Model of Transformational Leadership How does a leader who effectively blends transformational and transactional skills behave? In the mid-1980s, leadership researchers Kouzes and Posner began a project that they hoped would answer that question. They interviewed over 1,300 middle- and senior-level managers in both public and private sector organizations, asking them to identify their “personal best” leadership experiences. Based on their interviews, Kouzes and Posner (2007) determined that effective leaders engage in �ive leadership practices to accomplish extraordinary things: They model the way, inspire a shared vision, challenge the process, enable others to act, and encourage the heart (Kouzes and Posner, 2009).
Kouzes and Posner’s �ive practices are available to anyone who accepts what they have termed as the leadership challenge. Their �ive practices have stood the test of time, and our most recent research con�irms that these practices are as relevant today as they were when these authors �irst began their investigation over two decades ago (Brown, 2005).
We should note here that later research has shown that transformational leadership is not only about practices but also about personality, because personality and other factors in�luence leadership behavior—which can be learned. As we discuss each of the �ive practices, observe how they embody Bass’s four I’s of transformational leadership.
Model the Way
From their interviews with leaders, Kouzes and Posner (2007) learned that leaders reported on experiences that demonstrated their “personal best” when leading others—when they stood up for their beliefs and modeled the way. To do this, leaders must �irst be clear about their own principles and values and then clearly articulate and communicate those principles and values to their followers. Kouzes and Posner quoted Lindsay Levin, chairwoman of the Whites Group in England: “You have to open up your heart and let people know what you really think and believe” (p. 6).
Leaders, then, should model the behavior they expect of others and act consistently from their beliefs. They have to talk the talk and walk the talk. Or, put another way, action speaks louder than words. Kouzes and Posner (2011) stated that the personal-best projects that leaders wrote about repeated themes of relentless effort, steadfastness, competence, and attention to detail. Leading by example demonstrates that they are serious about their behavior and the organization’s beliefs and principles. The authors quoted an engineer from their interviews as saying, “One of the best ways to prove something is important is by doing it yourself and setting an example.” That leader noted that she didn’t ask her team to do anything she wasn’t willing to do herself. Consequently, the trust between her and the team was mutually edifying. Kouzes and Posner’s ways of leading has become a classic in its wisdom and application.
Although the leaders were engaged in designing larger operational and strategic plans, they always gave time to simple things with followers. Kouzes and Posner (2008) noted that the leaders they observed “were about the power of spending time with someone, of working side by side with colleagues, of telling stories that made values come alive, of being highly visible during times of uncertainty, and of asking questions to get people to think about values and priorities” (p. 28).
Inspire a Shared Vision
Effective leaders dream and envision, then effectively translate those dreams and visions into plans, goals, and road maps for followers to implement. When leaders described their personal-best leadership experiences to Kouzes and Posner, they related stories of times when they imagined exciting and attractive futures for their organization. They envisioned possibilities of what could be. They also believed and had absolute con�idence that extraordinary things could happen from their dreams. Kouzes and Posner noted, “In some ways, leaders live their lives backward. They see pictures in their mind’s eye of what the results will look like even before they’ve started their project, much as an architect draws a blueprint or an engineer builds a model” (p. 32).
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Ethan Miller/Getty Images News/Getty Images
After leading the split of Hewlett Packard into Hewlett Packard Enterprise and HP Inc., Dion Weisler willingly took the helm of HP Inc. in the midst of a declining market (Vanian, 2016). “The goal here isn’t market share, the goal is transforming industries,” he said (Coop, 2019).
Effective leaders not only had inspirational dreams and visions of what their organizations could be, but they could clearly communicate these pictures in detail. To attract followers, leaders have to present a compelling common vision for others to believe. Inspiring a shared vision is a process: Leaders have to know and understand followers’ hopes, aspirations, dreams, and values as well as their own; leaders have to speak the language of their followers; and followers have to also believe that their leaders understand them and their needs and interests. As Kouzes and Posner said, “Leadership is a dialogue, not a monologue” (Kouzes and Posner, 2012, ch. 2). A merchandise manager told the authors about sharing her vision: “If you don’t believe enough to share it, talk about it, and get others excited about it then it’s not much of a vision!”
Kouzes and Posner noted that the people in their study reported that they were very enthusiastic about their personal-best projects, and that their enthusiasm was contagious. Followers’ beliefs in and enthusiasm for the vision were “the sparks that ignited the �lame of inspiration.” These authors also noted that being forward-looking and showing the ability to envision exciting possibilities and sign on others in a shared view of the future “is the attribute that most distinguishes leaders from nonleaders” (Kouzes & Posner, 2009). The authors also found that the second highest requirement of a leader, after honesty, was that they be “- forward-looking.” This characteristic was desired only from the leader role and not the follower role. Only 27% of respondents selected this characteristic as one they desired in a colleague. But 72% desired it in a leader. (That number rose to 88% when those responding held senior roles in organizations.) Interestingly, research on executives’ working activities estimates that just 3% of the average business leader’s time involves envisioning and enlisting (Kouzes & Posner, 2009).
How do new and evolving leaders develop an ability to inspire a vision, develop a forward-looking capacity, and enlist followers to that vision? Kouzes and Posner suggest the following: (1) They commit to make and schedule time from “urgent but endless operational matters.” (2) They cannot count on their own intuition and foresight. They should about new ideas, future breakthroughs, and what is a better way of doing things. But, Kouzes and Posner state that they cannot offer only their own answers. Followers want future and forward-looking visions “that re�lect their own aspirations. They want to hear how their dreams will come true and their hopes will be ful�illed” (Kouzes & Posner, 2009). This challenge is enhanced by the increasing diversity of new workforces.
One other way that aspiring leaders can enlist followers to participate in articulating an inspired vision and enlisting others to join up is being charismatic. Many transformational leaders are charismatic (which we discuss in Chapter 6). Showing enthusiasm and positive energy in communicating and sharing their forward-looking ideas and visions through personal stories, using metaphors, expressing emotions and passionate imagery. Martin Luther King, Jr.’s vivid “I Have a Dream” address—delivered in Washington, DC, on August 28, 1963—stands as one of the most compelling vision statements in history. King not only breathed life into the hopes and dreams of others, but he infused a passionate desire for freedom in all who listened—and continue to listen—to that speech. His speech also re�lected vision elements that charismatic leaders, in particular, use to rally followers: Leaders include purpose and often a moral appeal to the common good or to a cause that underlies a particular ideal end state; they seek commitment, devotion, and sometimes sacri�ice in their appeal; and they appeal to the emotions and passions as well as logical levels of sentiment to forge unity of purpose among followers (Langbert & Friedman, 2003).
Challenge the Process
The key elements of challenging the process are (1) taking calculated risks and having a pioneer mind-set; (2) challenging the status quo in search of a better way of doing things or of making things better; (3) not relying on luck, chance, superstition, or someone else to bring change; (4) creating a supportive climate of experimentation and embracing failure as a process that leads to innovation; and (5) creating a learning organization where followers feel
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James A. Mills/Associated Press
Leaders are pioneers; they step into the unknown, searching for opportunities to develop, improve, and create new ways of doing things.
comfortable taking charge of their work and committing to change that supports new ideas and processes (Kouzes & Posner, 1993).
A product-marketing manager told Kouzes and Posner, “Mediocrity and the status quo will never lead a company to success in the marketplace. Taking risks and believing that taking them is worthwhile.” He continued by saying that risk taking and believing in the risks “are the only way companies can ‘jump’ rather than simply climb the improvement ladder.” Challenge is at the heart of change, and taking risks to challenge the status quo is the beginning of innovation. Every leader in these authors’ study took some type of risk and challenge to move beyond the status quo in their organization, whether it was developing a new product or “killer app,” introducing a new piece of legislation, creating a campaign to launch an environmental program, or launching a start-up plant or business.
Mahatma Gandhi was known to have said, “Be the change you seek.” Leaders are pioneers; they step into the unknown, searching for opportunities to develop, improve, and create new ways of doing things. No leader in Kouzes and Posner’s study depended on luck or being in the right place at the right time for opportunities to come to them. One person at Intel® stated that leaders should always be looking to improve their team, take initiative, network, stay current and competitive, take an interest in what is happening outside of their job or organization, and try new things.
The authors were quick to emphasize that innovation does not come from the leaders alone. Rather, product and service improvements, changes, and new creations come more from listening to others. Those who were doing the work and on the front lines—customers, clients, and vendors—were often the sources of innovation, Kouzes and Posner (1993) discovered. Consequently, “leaders must constantly look outside themselves and their organizations for new and innovative products, processes, and services” (p. 29).
Initiating change that leads to innovation requires that leaders create a climate for experimentation and a learning organization: People should be able to sense a willingness to challenge the system and status quo in order to experiment with innovations that lead to new products, services, and processes. Furthermore, people should not be expected to get things right the �irst time; they can fail and try again. Also, leaders are not expected to be inventors, but rather “patrons and adopters of innovation.” Kouzes and Posner (1993) state that “life is the leader’s laboratory, and exemplary leaders use it to conduct as many experiments as possible. Try, fail, learn. Try, fail, learn. Try, fail, learn. That’s the leader’s mantra. Leaders are learners. They learn from their failures as well as their successes, and they make it possible for others to do the same” (p. 30).
Enable Others to Act
Leaders get things done through other people. Leading through other people requires building trust by exhibiting competence and con�idence. It also requires collaborating with others while holding them accountable. In looking over thousands of personal-best cases, Kouzes and Posner (1993) noted how frequently interviewees used the word we and discovered that people used we more often than I in their personal-best leadership experiences.
“Leaders enable others to act not by hoarding the power they have but by giving it away. Exemplary leaders strengthen everyone’s capacity to deliver on the promises they make,” (p. 31) Kouzes and Posner wrote. Followers have to be involved, given feedback, updated, and kept in the information loop. The authors quoted a person in one of their workshops who worked with a communications department and said “inclusion (not exclusion) ensures that everyone feels and thinks that they are owners and leaders—this makes work much easier.”
Because virtual organizations—companies that operate almost solely electronically—are as much the norm as the exception in today’s business environment, leaders must cooperate with stakeholders and followers distributed across geographies and time zones. This includes all those who have a stake in the vision—peers, managers, employees, clients, suppliers, partners, citizens, and so on. Leaders must ensure that all complete their work and meet organizational goals,
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and motivate everyone to work with energy and produce quality results. This often requires leaders to engage their personal sense of power, ownership, and responsibility. Traditional command-and-control leadership techniques will not work, Kouzes and Posner (1993) stated, in the new dispersed organizational settings.
Leaders must also take care that their styles do not intimidate, alienate, or distance people, or make them feel weak, undeserving, dependent, or mediocre. Participants in Kouzes and Posner’s working sessions reportedly observed that when leaders empowered their followers (made them feel capable, strong, and trusted), followers gave efforts and results that exceeded even their own expectations. Through empowering relationships, followers become leaders themselves.
Encourage the Heart
Effective leaders encourage, support, and recognize followers for their work throughout their relationship, which can be key when people are exhausted or frustrated. Kouzes and Posner (1993) acknowledged that encouragement is a “serious business.” An organizational climate where people feel valued, cared for, and appreciated by their leaders and peers is a highly effective motivator. Effective leaders often take the time to recognize individuals and teams when a job or assignment is completed; as the authors noted, sometimes a thank-you note or email can be elevating. Some leaders have created newsletters with success stories of employees; others have instituted public recognition programs that offer awards and simple appreciation notices for work well done.
Leaders who demonstrate their support for followers are in effect linking intrinsic as well as extrinsic rewards with performance. Authentically encouraging the heart also promotes unity and solidarity; it develops a strong collective identity and community spirit and tells followers that their behaviors are aligned with the leader’s and organization’s values (Kouzes & Posner, 2011).
Table 5.1: The leadership challenge
Leadership practice Leadership behavior
Model the way 1. Find your voice by clarifying your personal values.
2. Set the example by aligning actions with beliefs.
Inspire a shared vision
3. Envision the future by imagining exciting possibilities.
4. Enlist others in a common vision by appealing to shared aspirations.
Challenge the process 5. Search for opportunities by seeking innovative ways to change, grow, and improve.
6. Experiment and take risks by constantly generating small wins and learning from mistakes.
Enable others to act 7. Foster collaboration by promoting cooperative goals and building trust.
8. Strengthen others by sharing power and discretion.
Encourage the heart 9. Recognize contributions by showing appreciation for individual excellence.
10. Celebrate values and victories by creating a spirit of community.
Source: Leadership behaviors from “Kouzes Posner Model,” Adapted from Coaching Cosmos, www.coachingcosmos.com
Taken together, these �ive leadership practices (Table 5.1) show everyone in the organization what effective leaders do and how they do it. They also provide guidance for aspiring leaders and reinvigorate effective leadership characteristics for those in such positions.
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Summary & Resources
Chapter Summary Transactional leadership tends to resemble managerial types of activities and practices, such as monitoring, controlling, planning, supervising, contracting, evaluating, and disciplining followers to perform routine and predictable tasks. Transformational leadership is characterized by more strategic visioning, inspiring, stimulating and exerting an idealized in�luence with followers in order to persuade and mobilize them to implement an organization’s vision. Although both styles have advantages and limitations, it is useful to understand how each style works and how you can adapt, learn, and apply processes and practices from each style to help organizations meet situational and follower needs in achieving stated goals.
Transformational leadership has reportedly been “the single most studied and debated idea within the �ield of leadership” (Diaz-Saenz, 2011, p. 299). McCleskey (2014) stated that published studies connect transformational leadership to “CEO success, middle manager effectiveness, military leadership, cross-cultural leadership, virtual teams personality, emotional intelligence, and a variety of other topics (Diaz-Saenz, 2011)” (p. 120). Research supports the fact that both transformational and transactional leadership styles are part of the full range leadership model and that transformational leaders also use transactional characteristics and practices. Although transformational leaders are also transactional, not all transactional leaders are transformational.
Kouzes’ and Pouzner’s well-known model (Model the Way; Inspire a Shared Vision; Challenge the Process; Enable Others to Act; and Encourage the Heart) is offered as a realistic application of transformational-related leadership practices that can be learned and applied to both strategic long-term and daily short-term situations and contexts.
Web Resources Robert Cialdini on In�luence
www.youtube.com/watch?v=9OMq5Ni5EMU (http://www.youtube.com/watch?v=9OMq5Ni5EMU)
Social psychologist Robert Cialdini discusses in�luence and persuasion.
Nancy Koehn on Crisis Leadership
https://youtu.be/KhhnoK8yd3g (https://youtu.be/KhhnoK8yd3g)
A Harvard Business School historian discusses examples of effective leadership during crisis and explores key factors of how an individual's leadership can in�luence outcomes.
Robert Kaplan on Leadership During Crisis
http://video.foxbusiness.com/v/3877776/robert-kaplan-on-leadership-during-crisis/ (http://video.foxbusiness.com/v/3877776/robert-kaplan-on-leadership-during-crisis/)
Goldman Sachs senior director Robert Kaplan comments on leadership during the recent �inancial crisis.
Critical Thinking Questions 1. Using this chapter’s content, identify one leader in the current media or news that you would characterize as
transformational and one that you would characterize as transactional. What differences and similarities did you �ind and why? Could you evaluate each leader’s effectiveness based on whether or not and to what extent she or he was transformational or transactional? Explain.
2. Characterize yourself as transformational or transactional based on the assessment you took in this chapter. Explain. Which style do you prefer for yourself ? To which style do you aspire to be?
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3. Find an example of a leader in the current news or media that demonstrates each of the �ive practices of the leadership challenge model in the chapter.
4. Rank order the �ive practices of the leadership challenge from “most important” to “least important” and explain your reasoning. How would you describe your strengths and areas of needing development on each of the �ive practices.
5. Identify limitations of transactional and transformational leadership. In what ways do you see these two styles as complementary, and in what ways as very different?
6. Describe why full range leadership study is an important area in leadership and why it is important for practitioners, human resource managers, and new leaders.
Key Terms
contingent reward (or contract)
full range leadership model
idealized in�luence
individualized consideration
intellectual stimulation
laissez faire leadership
leadership challenge
management by exception
transactional leadership
transformational leadership
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6 Charismatic Leadership
iStock/Thinkstock
Learning Outcomes
After reading this chapter, you should be able to:
1. De�ine charismatic leadership.
2. List and explain the three dimensions of charismatic leadership.
3. Discuss the types of charismatic leaders.
4. Describe the differences between charismatic and transformational leadership.
5. Explain the limitations and the dark side of charismatic leadership.
6. Describe how charismatic leadership can be learned and used.
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Bryan Mitchell/Getty Images News/Thinkstock
Elon Musk is a bold, innovative charismatic leader.
Elon Musk and his team anxiously watched as their private �irm, Space Exploration Technologies (SpaceX), launched the two-stage Falcon 1 spacecraft at 5:30 p.m. EST 2006 from the U.S. military’s Ronald Reagan Ballistic Missile Test Site (Malik, 2006). The rocket would be Musk’s step toward a new venture that could win him a NASA contract and a foothold into U.S. space exploration.
After years of nonstop effort, Musk’s team witnessed Falcon 1 burst into �lames right before their eyes. This failure could have ruined the company and Musk’s vision, and shattered the con�idence of the entire team (Handley, 2014). After the explosion, Musk walked to the front of the room and faced his 350 employees and “Then he said, with as much fortitude and ferocity as he could muster after having been awake for like 20+ hours by this point that, ‘For my part, I will never give up and I mean never,’ and that if (they) stick with him, (they) will win” (Handley, 2014).
The mood quickly changed in that room that day. Two months later the team discovered the problem, constructed another spacecraft, and on September 28, 2008, SpaceX successfully launched the new Falcon 1, which gained recognition as the world’s �irst privately built spacecraft to orbit earth.
Musk has faced many challenges and much stress in his ambitious high-stakes ventures, one being SpaceX and the other Tesla, the high-performance electric car company. But, being such a charismatic leader, he and the teams that he leads move forward.
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The hardships and challenges that Martin Luther King, Jr., faced in his life honed natural gifts into practical skills that allowed him to become such an extraordinary leader.
6.1 De�ining Charismatic Leadership What do Tesla’s Elon Musk, Virgin’s Richard Branson, media business owner Oprah Winfrey, entertainment dynasty guru Jay Z, Martin Luther King, Jr., and John F. Kennedy have in common? They have all been identi�ied as charismatic leaders. Charismatic leadership is based on a leader’s personality and connection with followers’ self-identity that enables the leader to inspire, motivate, and mobilize followers by communicating an inspired vision to change the status quo of organizations, institutions, industries, and societies. Charismatic leaders are able to draw and in�luence followers through the sheer force and magnetism of his or her personality, rather than through a position or organization. They have a vision, which they are able to implement by attracting followers and taking risks through extraordinary actions (Conger & Kanungo, 1988, 1998). Charismatic leadership is embodied in the term idealized in�luence—one of the leadership characteristics in the full range of leadership model from the last chapter—the ability to inspire trust, conviction, and vision for change. Charismatic leaders are admired as role models that generate pride, loyalty, con�idence, and alignment around a shared purpose (Yukl, 1994). Charismatic leadership has been called “a �ire that ignites followers’ energy and commitment, producing results above and beyond the call of duty” (Klein & House, 1995, p. 361).
German sociologist Max Weber said more than a half century ago that a charismatic leader has a certain quality of an individual personality, by virtue of which he or she is set apart from ordinary people and treated as endowed with supernatural, superhuman, or at least speci�ically exceptional powers or qualities. These powers are not accessible to the ordinary person and are regarded as of divine origin or exemplary, and on the basis of them the individual concerned is treated as a leader (Weber, 1947).
Recall from Chapter 1 we presented the question: Are leaders born or made? We revisit this question here because charisma (which literally means gift) suggests that leaders are born. But the answer is still the same: leaders, even charismatic ones, are both born and made. Arvey, Rotundo, Johnson, Zhang, & McGue (2006) found that about 30% of leadership potential is attributed to genetic factors, the rest is environmental in�luences. For example, Gandhi did not seem to be divinely inspired to become the leader he did:
Gandhi did not know until the second part of his life that he would become a non-violent Indian activist and then spiritual leader whose mission was to free his country from British rule. He probably never realized that he would be ‘the most important religious �igure of our time’ as the historian Lewis Mumford proclaimed. His journey twisted and turned from a below average shy, awkward law student, to a minor law clerk in a South African law �irm, then to a successful lawyer, and on to become a non-violent civil rights advocate and sel�less spiritual leader. (Weiss, Skelley, Haughey, & Hall, 2003, p. 26)
Richard Branson of the Virgin Group and Jack Welch, former GE CEO, both overcame stuttering to become noted charismatic leaders—as did the former King of England as depicted in the �ilm The King’s Speech, Academy Award winner for Best Picture in 2011. Although other famous leaders like Martin Luther King, Jr., John F. Kennedy, Jesus, and Nelson Mandela appear to have been born charismatic leaders, their life stories reveal that they, too, might have inherited some of the gifts of charisma, but through experience and hardships they honed those gifts into skills that led to extraordinary deeds.
Charismatic leaders have been also called “impression managers” (Giacalone & Rosen�ield, 1991) and described as visionaries who have a strong desire for power. Avolio and Bass (1988) wrote that “the purely charismatic (leader) may want followers to adopt the charismatic’s world view and go no further,” hinting at the dark side of charismatic leadership that has resulted in the formation of cults (1988). The dark side of charismatic leadership is discussed later in the chapter.
Another common question with regard to charismatic leadership is whether or not charismatic leaders are also transformational leaders. It is quite likely that a charismatic leader will be transformational; some scholars have argued that the two are very similar (House & Shamir 1993; Hunt 1999), and that
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“charismatic leaders by nature are transformational” (Lussier & Achua, 2013, p. 332). In contrast, transformational leaders are not all charismatic; they can in�luence and inspire followers in other ways. For example, they can address - followers’ emotional needs through individualized consideration, intellectual stimulation, and reasoning about the need for change, as discussed in Chapter 5 (see Figure 5.1). Regardless, charismatic leaders have “profound and unusual effects on followers” (Yukl, 1994, p. 46). Some researchers have actually de�ined charismatic leadership as “transformational leadership seen from the followers’ viewpoint” (Conger & Kanungo, 1992, p. 180). Max Weber, in fact, did not claim that charismatic leaders’ in�luence was primarily based on or limited to personality traits, despite his glowing “divine” description. Although a leader’s character traits were important, he saw charismatic authority mainly as a relationship between a leader and his or her followers.
According to Robert House, followers respond to the leader’s personality and behavior in a number of ways: They identify with the leader and feel more con�ident, emotionally involved, and inclined to obey the leader. They trust the leader’s ideology and raise their own goals (House & House, 1993).
For example, when Ronald Reagan ran for president in 1981, voters expressed the need for hope, optimism, and change. American hostages were still imprisoned in Iran, the economy was worsening, and there was a mood of helplessness in the country. Reagan, nicknamed “the Great Communicator,” offered a vision of recovering the United States’ status as a proud, con�ident, and strong world power. The voters accepted and endorsed his positive vision and vibrant style. Similar scenarios were repeated later in the elections of two other highly charismatic leaders, John F. Kennedy and Bill Clinton. Barack Obama was the �irst president in over �ive decades to win at least 51% of the national popular vote twice due in part to his perceived charisma based on his promise of hope and change. How history will evaluate that initial charisma will play out in the decades to come (Giroux, 2013).
Simply stated, from a charismatic-leadership perspective, followers want and need leaders with whom they can identify and who can offer and clearly communicate to them a vision of a better future. They also want leaders who inspire, arouse, and excite them to have higher expectations and reach higher goals. House, 1993 stated that charismatic leadership was more likely to be effective in distressing or crisis situations, in which followers need and desire help from an extraordinary leader. Although this has not been entirely con�irmed by studies, it is repeated as a plausible generalization. See assessment 6.1.
Assessment 6.1: Do You Have Charisma?
Instructions
This short quiz helps you determine whether you have characteristics that are associated with charismatic leaders. Circle the answer that best describes you.
1. I am most comfortable thinking in
a. Generalities b. Speci�ics
2. I worry most about a. Current competitive issues b. Future competitive issues
3. I tend to focus on a. The opportunities I’ve missed b. The opportunities I’ve seized
4. I prefer to a. Promote traditions and procedures that have led to success in the past
b. Suggest new and unique ways of doing things
5. I tend to ask a. How can we do this better? b. Why are we doing this?
6. I believe a. There’s always a way to minimize risk b. Some risks are too high
7. I tend to persuade people by using
a. Emotion b. Logic
8. I prefer to a. Honor traditional values and ways of thinking b. Promote unconventional beliefs and values
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9. I would prefer to communicate via
a. A written report b. A one-page chart
10. I think this quiz is a. Ridiculous b. Fascinating
Scoring and Interpretation
The following answers are associated with charismatic leadership: 1. a; 2. b; 3. a; 4. b; 5. b; 6. a; 7. a; 8. b; 9. b; 10. b
Source: Daft, Richard L., Lane, Patricia G. (2008). The Leadership Experience, 4th ed., p. 9. Reproduced with permission of Thomson/South-Western. © Cengage Learning.
We spend the remainder of this chapter examining charismatic leadership as personal leadership characteristics, as a process, and as affecting systems. We discuss the behavior of both charismatic and noncharismatic leaders, how charismatic leadership compares to transformational leadership, the dark side of charismatic leadership, and types of charismatic leaders. We also discuss the question: Can charismatic leadership be learned?
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6.2 Three Dimensions of Charismatic Leadership Charismatic leadership can be characterized in three dimensions, which are not always linear in nature. Note that Conger and Kanungo (1998) referred to three “stages” of charismatic leadership, which suggest a rather rigid framework. We use the term dimensions here.
Figure 6.1: Dimensions of charismatic leadership
Source: Conger, J. A., & Kanungo, R. N. (1998). Charismatic leadership in organizations. Thousand Oaks, CA: Sage Publications, Inc. p. 51.
First Dimension: Sensitivity to the Environmental Context and Followers’ Needs
Charismatic leaders challenge the status quo of organizations in search of better ways of doing things through more innovative visions. In doing so, such leaders can also change business and social practices and habits in the larger economic, legal, and technological environments of societies, as has been the case with Steve Jobs, Martin Luther King, Jr., and more recently the sharing economy entrepreneurs such as Uber’s CEO Travis Kalanick and CEO Brian Chesky at Airbnb. Being sensitive to their environments as well as the needs of followers, these leaders are keen observers of de�iciencies and opportunities in markets. In some cases, more entrepreneurial charismatic leaders may even create de�iciencies or exaggerate existing ones. As Conger and Kanungo state about such leaders, “They may anticipate future changes and induce supportive conditions for these. In any case, context can be viewed as a participating factor, sometimes facilitating the emergence of certain behaviors in a leader that form the basis of his or her charisma”(1998, p. 53).
For example, Elon Musk, in addition to his SpaceX and Tesla ventures, is also trying to reinvent public transportation. He unveiled Hyperloop, an above ground travel system in a tube that would allow passengers to travel 800 miles from Los Angeles to San Francisco in just 30 minutes (Ottinger, 2013; Lobosco, 2015). One journalist was quick to ask how he keeps coming up with these ideas. Perhaps the more fascinating question is how does he keep creating billion-dollar companies based on these ideas? (Ottinger, 2013). Musk clearly is a big, bold thinker who is sensitive to environmental context and the needs of those within it. As he said in his Hyperloop announcement:
When the California “high speed” rail was approved, I was quite disappointed. . . . If we are to make a massive investment in a new transportation system, then the return should by rights be equally massive. Compared to
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the alternatives, it [the California rail system] should ideally be: safer, faster, lower cost, more convenient, immune to weather, sustainably self- powering, resistant to earthquakes, and not disruptive to those along the route. (Ottinger, 2013)
A charismatic leader like Elon Musk examines the environment to pick up concerns, moods, feelings, and issues of external stakeholders in order to tailor the vision and actions to relevant groups and individuals. Here the leaders’ knowledge, experience, and expertise are critical. At a general level, many leaders—including noncharismatic leaders— identify a need or opportunity before articulating a strategy by �irst performing an environmental analysis using a SWOT approach: they identify the strengths, weaknesses, opportunities, and threats regarding markets, competitors, external groups, and resources. A SWOT analysis is done using existing data, surveys, and other information sources to discover if the company has any strategic advantages.
Charismatic leaders also pick up on clues from others that help build a bond with those needed to adopt their vision and goals. This ability to pick up on clues in an internal environment can also serve to uncover unethical or illegal activities. Former WorldCom vice president Cynthia Cooper, for example, noticed in 2002 that there were irregularities in the telecommunications company’s accounting (Lacayo & Ripley, 2002). Her subsequent investigatory work revealed that the company was indeed engaging in illegal accounting practices, posting an in�lated pro�it of nearly $4 billion while its competitors suffered losses. WorldCom eventually �iled for bankruptcy in 2004 and was bought by Verizon. CEO Bernard Ebbers was indicted and is now serving a 25-year sentence in a minimum-security Louisiana prison (“Bernie Ebbers,” 2015).
A charismatic leader’s in�luence on followers often depends on their mutual relationships and interactions. A charismatic leader is perceptive and responsive to follower needs, emotions, and feelings, which, in turn, encourages follower loyalty. “Leaders gain follower commitment to a vision through �inding a common denominator between themselves and follower motives” (Bass & Avolio, 1994, p. 30). These leaders must be skilled at maintaining emotional intelligence (EQ) (as discussed in Chapter 3) and, in particular, relationship management. Because charismatic leaders rely on personal power (based on respect and trust) to in�luence and lead, they strive to be responsive to followers.
For example, Oprah Winfrey is a successful American television host, actress, producer, philanthropist, and entrepreneur. She has won 48 Emmys, produced her own magazine and television network, and has a personal net worth of almost $3 billion. Her media empire was built on many factors, but a key one was her sensitivity to, and emotional bonds with, her followers and her audience. Adam Hanft, CEO of a marketing �irm said that “Oprah’s got a magical combination of extraordinary personal charisma, a telepresence, a back story that’s full of high drama and suffering and triumph, and an ability to open herself up to appear to be very much willing to expose that. And the empathetic bond that’s been created as a result is appealing and enduring” (Oldenburg, 2011, p. 126).
Oprah’s charisma connects her with her followers and is rooted in her authenticity, a concept discussed in Chapter 1, that is grounded in her life story. She was born on January 29, 1954, in Kosciusko, Mississippi, and lived with her grandmother until she was 6. She had a rough childhood in a small farming community, where she was sexually abused by a number of male relatives and friends of her mother. But she persevered and entered Tennessee State University in 1971 and began working in radio and television broadcasting in Nashville (“Oprah Winfrey Biography,” 2015). Her life experiences have connected with her followers not only emotionally but also in her related business ventures.
Oprah’s creation of a public charity, “Oprah’s Angel Network,” is an example of the socially responsible dimension of her charisma. Founded in 1998 and operated until 2010, the Network enlisted nearly 150,000 donors who contributed over $80 million to the charity that was best-known for funding rebuilding efforts in the Gulf Coast communities devastated by Hurricane Katrina and for building 55 rural schools in 12 countries (Huf�ington Post, 2011).
Second Dimension: Articulation of Organizational and Environmental Visions and Goals
Charismatic leaders create visions and future states, or idealized goals, that are noticeably different than the status quo or existing environment they observe. The more challenging the vision and goal, the more the leaders are seen as visionaries, providing followers with even more motivating forces for change. These leaders are also able to clarify and explain the importance of the vision for everyone to understand and inspirationally communicate the vision using stories, metaphors, anecdotes, and analogies. Gandhi, for example, was not a �lamboyant or extroverted leader. One study noted the appeal and articulation of his vision:
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Malala Yousatzai’s vision and advocacy that all children have a right to education is embodied in her life story.
Gandhi’s rhetoric contained a number of charismatic themes, underscoring the strong impact of his visionary rhetoric despite lacking a dramatic and memorable delivery style or pervasive media coverage. . . . our results indicate that the content of a leader’s vision is critical. (Bligh & Robinson, 2010, p. 853)
The more a leader is perceived as likeable, knowledgeable, and trustworthy, the more likely it is that the leader’s advocacy and idealized vision will be acceptable to followers (Conger & Kanungo, 1987; Hovland & Kelley, 1953). Charismatic leaders target their audience for speci�ic impact and make everyone feel as if they are being personally addressed, thus “increasing people’s feelings of worth and belonging” and motivating greater involvement and productivity (Dinkmeyer & Eckstein, 1996, p. 152).
Examples of such charismatic leaders with compelling visions include Malala Yousafzai, whom we discussed in Chapter 1. She is the youngest person to win the Nobel Peace Prize—at age 17. Her vision and advocacy that all children have a right to education is embodied in her life story. She attended a school that her father, Ziauddin Yousafzai, founded. When the Taliban attacked girls’ schools, she gave a speech in Peshawar, Pakistan, in September 2008: “How dare the Taliban take away my basic right to education?” (“Malala Yousafzai Biography,” 2015). Continuing to speak out from her vision and commitment to this cause, she was shot in the head and critically wounded by a Taliban gunman in 2012 (Associated Press, 2014). “A portion of her skull was removed to treat her swelling brain. To receive further care, she was transferred to Birmingham, England” (Associated Press, 2014). She received multiple surgeries that required the repair of a facial nerve to correct the paralyzed left side of her face. She remained in England and continued her education. In 2013, her autobiography, I Am Malala: The Girl Who Stood Up for Education and Was Shot by the Taliban, was published. U.N. Secretary-General Ban Ki-moon described her as “a brave and gentle advocate of peace who through the simple act of going to school became a global teacher.” She remains a target by the Taliban.
Other notable and enduring historical examples of charismatic leaders’ visions include automobile manufacturer Henry Ford, British Prime Minister Winston Churchill, and Walt Disney. These leaders envisioned and articulated compelling idealized goals that eventually came to fruition. If, in 1908, Henry Ford’s vision of the �irst automobile in America had not been articulated, there would be no Ford Motor Company today. Ford is listed as one of Forbes’s most valued brands, with a market capitalization of over $65 billion and 181,000 employees globally (“Ford Motors,” 2014). Ford’s original vision was:
I will build a motor car for the great multitude. . . . It will be so low in price that no man making a good salary will be unable to own one and enjoy with his family the blessing of hours of pleasure in God’s great open spaces. . . . When I’m through, everybody will be able to afford one, and everyone will have one. The horse will have disappeared from our highways, the automobile will be taken for granted . . . [and we will] give a large number of men employment at good wages. (Collins & Porras, 2004, p. 246)
The ful�illment of Ford’s vision can be seen on our highways today.
Without Winston Churchill’s charismatic leadership and transformational follow-through, some speculate whether or not the allied powers would have won World War II, providing the freedom from Hitler’s dominating presence. In a 1940 address to the British Parliament before entering World War II, Churchill demonstrated how a leader can motivate and inspire by describing a bleak alternate future:
Hitler knows he will have to break us on this island or lose the war. If we can stand up to him, all Europe may be free, and the life of the world may move forward into broad, sunlit uplands. But if we fail, the whole world, including the United States, including all we have known and cared for, will sink into the abyss of a new Dark Age, made more sinister and perhaps more protracted by the lights of perverted science. Let us therefore brace ourselves to our duties and so bear ourselves that if the British Empire and its Commonwealth last for a thousand years, men will still say, ‘This was their �inest hour.’ (Collins & Porras, 1994)
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Walt Disney’s charismatic and far-reaching vision has demonstrated its transformational effects on an entire culture.
Exemplifying his low-key but impactful charisma are Churchill’s victory speeches, which identify his political vision for motivating the British Parliament and people, the occupied countries of Europe, and the United States to win World War II. Five themes have been summarized from his speeches: (1) We face a monstrous evil which is a threat to the whole world; (2) If we can stand up to it, we will save not only ourselves, but the whole of mankind; (3) Our ultimate goal must be victory, for this is an evil so virulent that it must be utterly extinguished; (4) The road to victory will be long and hard, and involve much pain and sorrow. . . ; (5) but if we support each other and stick together, we can do it (Churchill Centre, 2015).
Notice the use of “we” and “our” in his speeches. Churchill painted a clear picture of the status quo, which, at the time, had to be radically changed. Note in Figure 6.1 that the intended, or hypothesized outcome (in those days) of Churchill’s leadership included a coalition of other leaders that would not only change organizations, but nations and the world order.
Finally, had Walt Disney’s original pitch for his idea of “the Happiest Place on Earth” in the early 1950s to potential �inanciers not been accepted, the present day Disneyworld, Disneyland, and enterprises which have changed the imaginations and consumer preferences of global customers would not have occurred. The Walt Disney Company’s market capitalization is $142.92 billion. It has 175,000 employees; Forbes named it the 14th most valued brand (Forbes.com.). Walt Disney envisioned his company this way:
The idea of Disneyland is a simple one. It will be a place for people to �ind happiness and knowledge. It will be a place for parents and children to spend pleasant times in one another’s company; a place for teachers and pupils to discover greater ways of understanding and education. Here the older generation can recapture the nostalgia of days gone by, and the younger generation can savor the challenge of the future. Here will be the wonders of Nature and Man for all to see and understand. Disneyland will be based upon and dedicated to the ideals, the dreams and hard facts that have created America. And it will be uniquely equipped to dramatize these dreams and facts and send them forth as a source of courage and inspiration to the entire world. Disneyland will be something of a fair, an exhibition, a playground, a community center, a museum of living facts, and a showplace
of beauty and magic. It will be �illed with the accomplishments, the joys and hopes of the world we live in. And it will remind us and show us how to make those wonders part of our lives. (Nanus, 1992, p. 288)
Third Dimension: Goal Achievement Methods
Charismatic leaders’ methods for achieving their visions and goals begin with themselves—their personal styles, personalities, their leadership processes, and the effects they have on systems.
Robert House described charismatic leaders as being dominant and self-con�ident as well as possessing a strong desire to in�luence and a strong sense of their own moral values. However, they face three fundamental challenges in terms of their followers and their vision, according to Conger and Kanungo (1998): Charismatic leaders must (1) ensure followers are extremely committed and perform accordingly; (2) instill in their followers the necessary values, beliefs, and behaviors to realize their vision; and (3) devise and execute strategic initiatives to further that vision.
Unconventional Behavior and Personal Risk Taking Followers attribute—that is, interpret, give meaning to, and project—charisma to leaders who behave differently from noncharismatic leaders (see Figure 6.2). Conger and Kanungo (1987) wrote that charismatic leaders show “exemplary acts of heroism involving personal risks, and their self-sacri�icing behaviors must be novel, unconventional, and out of the ordinary” (p. 113). Rather than seeking consensus, charismatic leaders actively innovate and strive for their “business as unusual” behaviors to be accepted. Charismatic leaders know that “prosperity breeds complacency and that experimentation and risk taking are as much a part of success as the acceptance of mistakes as a normal cost of progress” (Snyder & Clontz, 1997, p. 76).
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Ramon Laguarta advocates for empowering female farmers in the developing world (Feingold, 2019).
Engaging in unconventional behavior sometimes requires self-sacri�ice and taking personal risks. All classic religions have charismatic leaders who, as prophets or sages, took great personal risks through unconventional behaviors to mobilize followers toward a vision. Historically, the Buddha left a privileged life of royalty, comfort, and prosperity to seek enlightenment by following a vision that led to depriving himself of material goods, even food. The prophet Moses risked the wrath of the pharaoh to share his vision that God had a plan for his people before leading them out of Egypt. The historical Jesus of Nazareth risked imprisonment and death and rode into Jerusalem on a donkey during the Jewish high holiday of Passover.
Personal Power and Passionate Advocacy Charismatic leaders use personal power and passionate advocacy in addition to the other personal styles, processes, and methods to affect environment, systems, and organizational changes. When Ramon Laguarta became CEO of PepsiCo in 2018, followed by election to chairman of the board in early 2019, he was a 22-year veteran PepsiCo executive and leader. Presiding Director Ian Cook said, “He is an outstanding leader with . . . a keen understanding of the evolving needs of consumers around the world. His vast PepsiCo knowledge, combined with his innovative thinking and proven executional excellence, make him the ideal steward to take on this most important role and lead our company into the future” (PepsiCo, 2019).
Figure 6.2: Noncharismatic versus charismatic leaders: Characteristics
Noncharismatic Charismatic
Dimension 1
Environmental sensitivity
Low need for environmental sensitivity to keep status quo
High need for environmental sensitivity to change the status quo
Relation to status quo
Agrees with status quo and will maintain it
Disagrees with status quo and will try to change it
Dimension 2
Future goals Goals consistent with status quo
Idealized vision that is highly inconsistent with status quo
Likableness Based on shared perspective with leader
Shared perspective and idealized vision attracts followers to identify and imitate leader
Articulation
Dimension 3
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Are risk taking and decisiveness entrepreneurial and charismatic leader traits? Are charismatic leaders, like entrepreneurs, born not made? Consider the tips provided in this discussion with two entrepreneurs, Anton Rabie and Sylvia Bemnchimol, and evaluate whether or not risk taking and decisive decision making be are skills that can be learned.
Behavior Novelty
Conventional, conforming to existing norms
Unconventional or counter-normative
Trustworthiness Disinterested advocacy in persuasion attempts
Passionate advocacy, incurring great personal risk and cost
Expertise Expert in using available means to achieve goals within the framework of the existing order
Expert in using unconventional means to transcend the existing order
In�luence Strategy
Power base usage
Position power and personal power (based on reward and/or expert power, and liking for a friend who is similar other)
Personal power (based on expert power; respect and admiration for a unique hero)
Source: Conger, J. A., & Kanungo, R. N. (1998). Charismatic leadership in organizations. Thousand Oaks, CA: Sage Publications, Inc. p. 51.
Using personal power and passionate advocacy is part of the “toolbox” charismatic leaders bring to the job. Many, not all, have general leadership traits (discussed earlier in the text) such as extroversion, openness, agreeableness, and conscientiousness, all of which help them channel their personal power into advocating passionately for their visions and missions for the organization and sometimes society or the entire planet.
Risk Taking and Decisiveness
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Critical Thinking Questions
In what ways are entrepreneurs like charismatic leaders, based on this video clip and the text? What type of risk-taking and unconventional behaviors have you taken to lead and change people toward an important goal? Did it work? What are some lessons you can take away from this section of the chapter that you can use in your leadership learning? Explain.
Entrepreneurs: Importance of Decisiveness/Risk Taki... From Title:
Top Ten Tips for Entrepreneurs (https://fod.infobase.com/PortalPlaylists.aspx? wID=100753&xtid=40013)
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6.3 Types of Charismatic Leaders The behaviors of charismatic leaders—both positive and negative—demonstrate that charismatic leaders are not all one and the same. They may all possess charisma, but their charisma may stem from different sources, or they may have distinct motivations for in�luencing their followers. Researchers have identi�ied �ive types of charismatic leaders (Conger & Kanungo, 1998; Dubrin, 2010).
Socialized charismatic leaders are autonomous, responsible, and empowered. They develop goals to meet the needs of the organization and team members. They use power for the good of helping the organization and its members. These leaders align followers’ values with theirs and use intellectual stimulation to support followers. Most of the leaders discussed in this chapter are more socialized than personalized charismatic leaders (see the next paragraph). Their motives are ethical and include the common good of the organization, environment, and stakeholders as well as stockholders.
Personalized charismatic leaders, unlike socialized charismatics, seek to ful�ill their own interests and use unrestrained power to do so. They are authoritarian and narcissistic and have high power needs, and low self-esteem; their goals driven more by self-interests. They treat peers and followers as means to their own ends. Personalized charismatics impose self-serving goals on others. They offer consideration and support to group members only when helping others helps them to achieve their goals. Followers of personalized charismatics are generally dependent, obedient, and submissive. Note that Howell and House (1993) state that in reality charismatic leaders probably show both socialized and personalized characteristics.
Of�iceholder charismatic leaders rely on their formal positions rather than personal characteristics to lead others. They have high status because of their role in the organization. When and if they lose their positions, they lose their charisma, which is attached more to their formal and enacted positions than to their personalities—contrary to classical charismatic theory. For example, former Secretary of Defense Donald Rumsfeld’s charisma was in large part dependent on the positions he held. Many of his staff viewed him as charismatic and even visionary at the beginning of the Iraq War. However, as that war waned and faltered, he was pressured to retire. Rumsfeld’s in�luence and of�ice-holder charisma also diminished.
Personal charismatic leaders have traits, behaviors, and characteristics that identify them as charismatic. They in�luence others based on personal desirable traits and characteristics; specialized knowledge, competencies, and capabilities; and strong participation in the job (job involvement) (Halpert, 1990; Rao, 2010). Unlike of�iceholder charismatic leaders, personal charismatic leaders do not depend on roles or status to lead others.
Divine charismatic leaders are mystics, narcissists, and personally magnetic “saviors,” who rise to the occasion to lead others from impending crises (Weber, 1947). Many of the leaders of major world religions or social movements, such as Gandhi, Jesus, Moses, and Muhammad, could be considered divine charismatic leaders. There are also negative examples of such leadership, although some scholars question whether individuals who commit evil, unethical, and illegal acts should even be called leaders. For example, Jim Jones—a self-styled charismatic founder and leader of a religious cult that he moved to Guyana, Africa—made international news in 1978 when he directed one of the largest mass murders in U.S. history by ordering the cyanide poisoning of over 900 cult members. The event was called the “revolutionary suicide” by Jones and some of his followers beforehand. The event was precipitated by an investigation of and visit to the cult by Congressman Leo Ryan, who was murdered on his visit (Rapaport, 2003). See “Take the Lead: Does Being Charismatic Count?” to apply these concepts.
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Take the Lead Credits
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6.4 Charismatic and Transformational Leadership Compared Research has shown that charismatic and transformational leadership are more alike than different (Brocato and Gold, 2010), even though some have argued that charisma is an important component of the transformational model (Bass & Riggio, 2006, p. 230). Also as noted earlier, not all transformational leaders are charismatic. For example, Zuckerberg at Facebook is shy and uncomfortable addressing the media and public (Mishra, 2015). Similarly, Jim Collins’ (2005) highly successful transformational “Level 5 leaders” he researched in the now classic book Good to Great (Collins, 2001, p. 83) were “a study in duality: modest and willful, shy and fearless.” Another difference between charismatic and transformational leaders is that charismatic leaders attain, in part, their charismatic attributions made about them by followers—i.e. it is followers’ observations, beliefs, and assigning to leaders the ability to do extraordinary acts. From these beliefs, followers devote their loyalty and allegiance to the leader (Howell & Shamir, 2005; Jung & Sosik, 2006). Transformational leaders are generally not seen as transformational by their followers because of personality follower attributions or identity associations with their leader (Hassan, Fuwad, & Rauf, 2010).
Max Weber (1924/1947) argued that charismatic leaders are likely to emerge during times of crises and turmoil when individuals are feeling helpless, agitated, frustrated, and anxious. This is not always or predominately the case, although there are many instances when this has occurred. For example, Rudy Giuliani took charge and projected both a charismatic and transformational image during the 9-11 attacks on the twin towers in New York City; he subsequently ran unsuccessfully for President of the U.S. in 2008.
Though there are some differences in the degree to which the two styles align, leadership scholars generally agree that these two leadership styles include the following:
1. Create and collaboratively advocate for a compelling vision and idealized future state (Zenger et al, 2009); 2. Communicate their visions and mobilize followers in highly competent and inspiring ways (Levine et al., 2010),
although charismatic leaders may use more colorful and animated stories, metaphors, and moving examples to emotionally appeal and connect with followers. Also, some scholars view charismatic leadership from an attribution theory perspective, arguing that followers attribute—i.e. assign, project, give meaning to— characteristics to a leader such as heroism, bravery, trustworthiness who may in reality not possess such qualities at all. Followers may also transfer and project characteristics to leaders from follower unmet needs, hopes, and other desires (Howell & Shamir, 2005; Jung & Sosik, 2006; Kets de Vries, 1988). From this view followers devote their loyalty and commitment to leaders based on leadership acts or behaviors that did not happen. This argument is not made with regard to transformational leaders.
3. Inspire trust, self-con�idence, and moral conviction; 4. Empower, connect, and move followers to action; and 5. Use unconventional, high-risk means (Lussier and Achua, 2011). Lussier and Achua contend that charismatic
leaders assume more extreme levels of emotional resistance and con�lict toward their opponents when taking risks with their visions. These authors cite Martin Luther King, Jr., John F. Kennedy, and Gandhi as examples.
Both transformational and charismatic leadership styles apply to those who seek to change the status quo and make a difference to processes, systems, and people for the betterment of all.
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Associated Press
Charles Manson represents the dark side of charismatic leadership.
6.5 The Dark Side of Charismatic Leadership Our focus thus far has been primarily on the transformational, inspirational side of charismatic leaders. However, as has been suggested, charismatic leadership has a dark side: such persuasive leaders can lure followers into negative, even harmful behavior. One scholar warned, “It can be foolish, futile and even dangerous to follow leaders just because they are charismatic. Be careful of hero worship” (Raelin, 2003). After all, Adolf Hitler and Benito Mussolini could be described as charismatic. They were able to in�lame and persuade others to rally around their visions—which proved to be destructive. Several of the �lamboyant CEOs from recent history were notoriously narcissistic and unethical, engaging in illegal activities. One example is Gary Winnick, who bankrupted the telecommunications company Global Crossing. As chairman of Global Crossing, Winnick gave a top executive a Rolls-Royce as a gift, demanded that the company maintain a �leet of �ive jets (including a Boeing 737), and sold $730 million of his company stock while he was driving the company into bankruptcy. As thousands of his employees were laid off, Winnick was renovating a mansion in Bel Air, California, valued at $92 million (New York Observer Staff, 2002).
Winnick carried his own interests to dangerous extremes. But unethical, narcissistic, charismatic organizational leaders are not a relic of the past. The global subprime-lending crisis and subsequent economic downturn is, in part, due to unethical corporate of�icers, traders, and lenders. From this we learn that we shouldn’t trust charismatic leaders without checking their backgrounds and motives—and that moral values can be an essential leadership capacity and competency.
On a more extreme level are psychopathic, narcissistic charismatic leaders whose teachings and behaviors attract and then many times attack unsuspecting victims. Past notable examples in the news are Jim Jones (Jonestown Guyana), David Koresh (Branch Davidians), Charles Manson, Bhagwan Rajneesh (Rajneesh Movement), and Warren Jeffs (polygamist leader) (Navarro, 2012). Joe Navarro, a former FBI counterintelligence agent who has researched and written about such charismatic cult leaders noted that
They all have or had an over-abundant belief that they were special, that they and they alone had the answers to problems, and that they had to be revered. They demanded perfect loyalty from followers, they overvalued themselves and devalued those around them, they were intolerant of criticism, and above all they did not like being questioned or challenged. And yet, in spite of these less than charming traits, they had no trouble attracting those who were willing to overlook these features. (Navarro, 2012)
Such unstable and ill-intentioned charismatic leaders address “felt needs” in their victims before harming them.
Chamorro-Premuzic (2012) argued that “the short-term bene�its of charisma are often neutralized by its long-term consequences.” His four reasons for resisting the dark side of charisma include,
1. Charisma dilutes judgment, especially when Charm is based on emotional manipulation;
2. Charisma is addictive; leaders become addicted to followers who are charmed by them, and followers become addicted to the leaders. “The result is a reciprocal dependence that encourages both parts to distort reality in order to prolong their ‘high’”;
3. Charisma disguises psychopaths; certainly not all charismatic leaders are psychopaths, but “Egocentricity, deceit, manipulativeness, and sel�ishness are key career advancers in both politics and management, and many leaders rise to the top motivated by their own problems with authority.” Best to beware of these traits and characteristics of certain charismatic leaders;
4. Charisma fosters collective narcissism; charisma enables “our adoration for someone who expresses our own beliefs” even better than we can. So such leaders turn followers into a more “radical version of themselves.”
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The author offers three recommendations for a more rational and constructive leadership model. The �irst is to elect or hire leaders using only scienti�ically validated assessment tools rather than a kind of chemistry or intuition that is very dif�icult, if not impossible to measure. Second, limit leaders’ media exposure so they do not get to dominate messaging and create arti�icial and possibly biased narratives. Third, avoid the “charisma trap,” by examining leaders’ values and past results and not focusing on their traits and leadership practices that oftentimes involve “aggressive, ruthless, and pathologically ambitious personalities” (Chamorro-Premuzic, 2012).
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6.6 Can Charismatic Leadership Be Learned? Although some leaders are born with the traits that characterize charismatic leadership (extroversion, self-con�idence, and achievement orientation) (House & Howell, 1992; Robbins & Judge, 2015), other leaders are not. A majority of scholars agree that certain charismatic leadership characteristics can be learned and trained (Conger & Kanungo, 1998). Those characteristics include the abilities to (1) articulate a vision and idealized goal that offers a future more attractive than the status quo; (2) communicate the vision to others in an understandable way; (3) take on high personal risk and self-sacri�ice to achieve a vision; (4) assess environmental constraints and resources needed to bring about change; (5) be sensitive to and respond to follower needs, particularly their feelings and needs; and (6) act in unconventional ways in order awaken others to different, more novel and innovative ways of doing things.
Practical suggestions for developing behaviors to implement these characteristics include the following: (1) learn to be passionate and inspire enthusiasm in relationships and work assignments; (2) engage people in more strategic goals that are of interest to the organization; (3) initiate meaningful dialogue; (4) show interest in others and their work by creating an emotional, authentic bond with people; and (5) connect with individuals and seek to listen and not only be heard. In addition, assuming an optimistic view, (6) adding excitement, enthusiasm, and even passion when communicating can make a difference to those receiving messages and assignments. Acting classes, speech and public speaking lessons can also teach extroversion, projecting a presence, and creating animation in voice and body language, which are attributes of charisma. Taking on leadership roles in which you participate in creating and communicating a vision to others also creates perceived and experienced charisma (Marques, 2007; de Vries & Bakker-Pieper, 2010). This is a process that is not accomplished quickly; it requires being open and accepting of others.
Finally, Cabane (2012; also see Schawbel, 2012; Contributor) views charisma as a tool. A cursory summary of her more elaborate methods for learning and using charisma are the following four types of charisma that can be learned:
1. Focus charisma involves being centered, showing interest in those with whom you are listening, and keeping eye contact;
2. Vision charisma involves creating an engaging vision yourself and communicating it inspirationally and with con�idence to others. Self-doubt can be eliminated by transferring responsibility. Cabane suggests several techniques to help, such as closing your eyes, taking three deep breaths, and imagining lifting the weight of your worries off your shoulders and passing it over to a benevolent entity. She also suggests improving body language, picking up your shoulders and using gestures to speak with conviction.
3. Kindness charisma involves developing and conveying magnetic, welcoming warmth toward the other in order to connect emotionally. Having and showing mindfulness, compassion, and goodwill also connects you with the person or individuals with whom you are communicating. Body language, eye contact, relaxing your face, and mirroring the other’s body language all serve to create trust an openness.
4. Authority charisma, the most powerful of the four types, also involves having your body language re�lect power, that is, your movements can be slow and relaxed showing that you can “walk the walk.” Own your share of physical space; speak with a lower pitch in your voice; act calm, cool, and collected to re�lect status and con�idence to others.
Dressing in ways that also show your power is important. Learning how to be more charismatic is a process that is not accomplished quickly; it requires learning different techniques and adapting those to your personality and style. Coaching and perhaps taking workshops would also be useful to add another very important skillset to your leadership repertoire.
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Summary & Resources
Chapter Summary Charismatic leadership is similar to transformational leadership. Both take leadership attitudes, skills, and behaviors to a higher level. A charismatic leader is one who is able to draw and in�luence followers through the sheer force and magnetism of his or her personality, rather than through a position or organization. They have a vision, which they are able to implement by attracting followers and taking risks through extraordinary actions (Conger & Kanungo, 1988, 1998). Charismatic leaders are also transformational; but, not all transformational leaders are charismatic. Although being charismatic is appealing and sometimes envied, it can also be learned. The myth that effective charismatic leaders are born, not made, is not true. Studies show that 30% of leadership is genetically derived, the other 70% is environmentally and experientially learned and earned (Arvey et al., 2006; De Neve et al., 2013).
Charismatic leadership can be understood in three dimensions: The �irst dimension involves the leader scanning the environment to identify opportunities and problems to be solved that can be changed from the status quo, whether it be in the larger external environment, with society, or within the organization, team, or individual followers. The leader uses his or her personal and professional traits and gifts, skills, and sensitivities to detect what needs and should be changed in the processes and systems inside and outside the organization.
A second dimension has the charismatic leader articulating a vision and idealized future state that is used to attract, inspire, and move followers and coalitions to action. During this stage the charismatic leader may use charm, extroversion, optimism, and inspirational language to communicate and bond with followers to help implement the vision. We know examples of charismatic visions and advocacy for those idealized states from Elon Musk at SpaceX and Tesla, Oprah Winfrey on her media channel, Jeff Bezos at Amazon, Cheryl Sandberg at Facebook and from her book (Lean In) and movement for women, and from Malala Yousafzai, the youngest person to have won the Nobel Peace Prize, and who challenged the Taliban and now all nations for children’s and girls’ rights to have an education. And there are countless managers, professionals, and formal, as well as informal and emergent, leaders who as coaches, hospital employees, teachers, writers, and salaried workers demonstrate some form of charisma every day.
A third dimension of charismatic leadership involving methods of implementing the vision requires different types of methods to in�luence followers. Personal examples woven into stories, metaphors, symbolism, and language that attracts and bonds followers with the leaders are such methods. BHAG, “big hairy, audacious goals” (Collins & Porras, 2004)—and we would add visions—requires a range of implementation methods: risk taking, countercultural and unconventional techniques, and empowering people through trust. Charismatic, unlike transformational, leaders use more emotionally charged, dynamic means of communicating to connect with followers’ needs, aspirations, and enthusiasm for the leader’s desired change. For example, Martin Luther King, Jr.’s march in violation of that city’s alleged laws with individuals from across the country through Selma, Alabama, to enable Black Americans to be able to use the same toilets, seats in the front of public transportation vehicles, schools, and other facilities as White Americans. Less dramatic but powerful methods of moving followers to implement changes in the status quo in organizations, societies, and with individuals and teams may require courage, risk taking, and unconventional tactics that charismatic leaders assume.
The dark side of charismatic leadership requires a mindful and watchful eye from followers. For example, pseudocharismatic leaders (Conger & Kanungo, 1998) act narcissistically to promote their own personal, career, and sel�ish ends (personalized charisma) instead of the organization’s goals (socialized charisma). Symptoms of this phenomenon are exaggerated self-descriptions, visions, and claims to authority. These types of leaders generally misuse organizational resources, require unrealistic devotion and commitments from followers, show poor and incompetent judgment in their decisions, and create an illusion of control or little responsible control over their duties. They are unethical and usually get involved in illegal activities.
Learning charismatic methods and styles are realistic and desirable if individuals wish to add to their leadership capabilities, capacities, and in�luence in an organization, with peers, and followers. Speci�ic suggestions are offered in this chapter and, in fact, this text contributes to this effort through the concepts, vocabulary, assessments, and frameworks that are offered to increase your “leadership IQ.” The remaining chapters in this book deal with leadership processes, skills, and insights that also contribute to your taking charge of your own leadership development and learning.
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Web Resources Gallup
http://gmj.gallup.com/content/113338/what-makes-great-leadership-team.aspx (http://gmj.gallup.com/content/113338/what-makes-great-leadership-team.aspx)
Learn more about what makes a great leadership team from Gallup
Executive Team Leadership Effectiveness
http://www.learningcenter.net/library/leadership.shtml (http://www.learningcenter.net/library/leadership.shtml)
Use this assessment to identify your personal strengths and weaknesses as a team leader.
Build a Tower, Build a Team
http://www.youtube.com/watch?v=H0_yKBitO8M (http://www.youtube.com/watch?v=H0_yKBitO8M)
Autodesk’s Tom Wujec presents some interesting �indings on team building with marshmallows and spaghetti.
Critical Thinking Questions Max Weber the famous sociologist noted that charismatic leaders are likely to emerge during times of crisis and turmoil. When re�lecting on the present U.S. and even global environment, there is one crisis after another and turmoil in just about every arena of human transaction. A culture war is raging, religious con�lict is at its height, racial tensions, political unrest, economic malaise, and world health and climate challenges rage. However, it does not seem that remarkable charismatic leaders are emerging. There seems to be more retreat in leadership in any of these areas than people rising to the occasion.
1. Prepare a few paragraphs in response to this observation. Argue your points and use examples of leaders, managers, or others from the current media and press with your response.
2. Find a few examples (not from this chapter) in the current media/press of a charismatic and a transformational leader. Present the differences and similarities. Which leader do you �ind or can produce evidence to be the more effective in his or her role, organization, or area and why? Explain.
3. Scholars acknowledge that there are “toxic” leaders who are not only unhelpful but, in some ways, destructive to their organizations and jobs by the way they respond (or not) to employees and followers and in their paid job responsibilities. Respond to this question: Locate (online search) a de�inition of a “toxic” leader. Then �ind an example in the current media/news of a leader who meets that de�inition. Compare and contrast your leader example with the section on the “dark side of charismatic leadership” in the text. What did you learn? Re�lect on the question and your response.
4. First, identify the ways that charisma helps, adds value, to a leader in his or her role and work. Now, interview one of your peers or colleagues and discover whether or not, and to what extent, and if so, how, they are charismatic (or not) in their work/positions /roles. If so, ask if and how their being charismatic works and adds value to their productivity, satisfaction, work relationships. If they are not, ask how they think that if they could be charismatic, would that speci�ically (or not) add value to their productivity, satisfaction and work relationships. Type up your responses to share.
5. Interview someone you know who is a formal leader (has a leadership position)—could be a student leader or someone in your family. Ask them to describe their work, how they lead, how they relate to followers, whether or not they are more people or production oriented. What they consider their greatest achievement as a leaders. (Do not mention charismatic or transformational leadership.) See if they bring up something in their responses that resembles these two leadership styles. Type up your responses, re�lect on these, and be ready to share.
6. From your responses to questions 4 and 5, answer this question: Do leaders such as those you interviewed who are not famous or in the national or international news have to do extraordinary things to be considered
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charismatic or transformational? Explain. Then, offer examples from your interviews of how your leaders were (or not) charismatic and transformation in small but important ways. Explain.
7. Are you charismatic? If not, why do you think? Do you want to be more charismatic? Explain. If so, offer speci�ic ways you can learn and use charisma in your everyday relationships and work.
Key Terms
charismatic leadership
divine charismatic leaders
of�iceholder charismatic leaders
personalized charisma
personalized charismatic leader
pseudocharismatic leaders
socialized charisma
socialized charismatic leader
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7 Communication
iStock/Thinkstock
Learning Outcomes
After reading this chapter, you should be able to:
1. De�ine the communication process and describe basic techniques and ways to communicate effectively.
2. Describe digital tools and ways to effectively communicate digitally.
3. Explain four communication styles related to personality.
4. Identify four types of communication patterns in organizations, and describe strategies for effective communication within organizations.
5. Identify leadership skills in persuasion.
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Randy Faris/Fuse/Thinkstock
Effective communication is stating clearly what you want and expect of others; clearly expressing your thoughts and ideas; and maintaining a constant and precise �low of information.
There are many views on the relationship between leadership and communication. “Communication is the real work of leadership” writes Nitin Nohria, business school professor at Harvard. Badaracco, an expert on leadership, states that knowing your audience and being an excellent listener is key: “With the �luidity of information in business today, leaders need to be masterful listeners; they need to be able to receive as well as send.” David Thomas, another Harvard professor, adds that leaders need “multimodality” skills in communication. He claims, “What you say is only the beginning. Your behavior, your actions, and your decisions are also ways of communicating, and leaders have to learn how to create a consistent message through all of these.” Jeff Bezos, founder and CEO of Amazon, noted an ability to tell the hard truths is another requirement of leadership communication (Blagg & Young, 2001).
Although the precise essence of leadership communication is elusive, the importance of effective communication in leadership is not. Communication, the process of conveying information and meaning between a sender and receiver, is one of the most important competencies of leaders (Brass, Galaskiewicz, & Tsai, 2004) because it affects every aspect of leading: in�luencing, motivating, visioning, creating culture, developing strategy, mobilizing change, and managing stakeholders locally, face-to-face, and globally through digital information technologies. All of these require that ideas and values be communicated and executed clearly and accurately.
It should be no surprise that studies have shown that communication is seen as a necessary skill for being an effective leader (Kalargyrou, - Pescosolido, & Kalargiros, 2012). In fact, among “The 10 Skills Employers Most Want In 2020 Graduates” two of the most important were cognitive �lexibility (“the ability to adapt how you communicate based on who you are talking to”) and judgment (“the ability to analyze data and use it to make intelligent decisions”), according to a survey of 350 employers by the World Economic Forum (Curtin, 2018). In a survey of 1,000 senior executives across a range of industries, 49% of respondents—asked to rank the three most important skills a leader needs—placed communication ahead of strategic thinking, decision-making, motivating others, and emotional intelligence (Borderless, 2016).
The importance of communication is not limited to leaders—but note that when a leader miscommunicates, doesn’t listen effectively, or is inconsistent in his or her communications, the results are ampli�ied and consequently potentially more harmful. Communication occurs
between any number and combination of people, and everyone in the organization must communicate effectively in and between teams and with key stakeholders in order to achieve organizational goals.
We begin by de�ining the communication process before presenting methods and styles of effective leader—and follower—communication. We then take a closer look at communication within the organizational context. In the �inal section we take it a step further, looking at methods of communication that can best lead to persuasion (Conger, 1998). As you read through this section, think of leaders for whom you have worked. Evaluate their communication effectiveness based on the content here.
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7.1 The Communication Process De�ined If communication is the process of conveying information and meaning, then effective communication is being able to do this successfully, so that both the sender and the receiver of the information are on the same page. We can state this more clearly by saying that effective communication is stating clearly what you want and expect from others, clearly expressing your thoughts and ideas, and maintaining a precise and constant �low of information. Being able to do this well comes from understanding and strategically managing the communication process, or the �low of information.
Regardless of the form or number of individuals communicating, the classic communication process depicted in Figure 7.1 is the same, whether the communicators use Facebook, Instagram, Twitter, WhatsApp, or other instant-messaging software. A sender has a purpose that she or he develops into a message before sending it to a receiver, who decodes the meaning (Berlo, 1960). The speed and form of technology, whether video with webcams or two-way or one-way instant messaging, allows individual communicators to share some form of meaning that is intended to be understood by someone else. It is important to break down this process in more detail in order to understand how to avoid miscommunication and noise that garbles the intended message or meaning.
Figure 7.1: Communication process
A sender, as shown in Figure 7.1, initiates a message by encoding an idea or thought into a physical product or audible or legible form—words, �ilm, photos, video, or typing. The message can also consist of nonverbal symbols or gestures— facial, hand, or body movements. The sender decides what form, or channel, to use to send the message. Channels can be digital or face-to-face, formal or informal, and more. We discuss this topic in more detail later in the chapter. The receiver to whom the message is directed must decode (i.e., translate and interpret) the symbols in order to understand the meaning. In addition, noise represents distortions, problems, and issues that alter the intended meaning in the message. Noise can be perception biases or misunderstandings, information overload, confusion, misinterpreted word meaning, inferences, or just cultural differences). Getting feedback is the last part of the loop in the communication process, in which the receiver or sender inquires to see if the intended and received meaning of the message were the same.
Effective communication between employees is vital to a fully functioning organization. Building a positive and productive workplace culture is everyone’s responsibility. Employers are responsible for welcoming and sharing open communication and setting a tone at the top, role modeling effective communication. This precludes hiding strategic information from employees and favoring select individuals and in-groups. It means having the company’s best interest in mind and communicating clearly and concisely what is expected of employees and their roles in the organization, which is more likely to create respect and trust among everyone in the company. Effective communication for leaders and followers also involves being aware of and concerned with how the messages they send—orally, written, and - nonverbally—will be received. How a message is perceived can be as important as the message itself. Marshall McLuhan, a media expert, once said, “The medium is the message” (Levinson, 1999). This is especially important with regard to leaders, managers, and supervisors who must interpret the vision, mission, strategy, assignments, performance reviews, and tasks to followers and stakeholders.
Delivering messages effectively and ef�iciently �irst involves having a plan for the message: the what, who, why, when, and where. Articulating the goal, intent, timing, medium, and place(s) for delivering a message can minimize mistakes
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Figure 7.2: Sources of miscommunication
Sources: Byron, K. (2008). Carrying too heavy a load? The Communication and Miscommunication of Emotion by email. Academy of Management Review, Vol. 33, No. 2, pp. 309–327; CAI. (2010). Five Common Causes of Miscommunication in the Workplace and How to Avoid Them. http://blog.capital.org/�ive-common-causes-of- miscommunication-in-the-workplace-and-how-to-avoid- them/; Robbins and Judge, 2015.
A better understanding of the nuances of different communication modes will help improve communication effectiveness and defuse of�ice con�lict. Consider the dramatized of�ice scenarios presented here, and evaluate the communication barriers illustrated.
Communication Barriers in the Workplace
and miscues. Then, because communication involves people, establishing rapport counts. Overly mechanical or whimsical communication is generally ineffective. Putting people at ease while attracting their attention is important. Gaining an understanding of the receivers’ reception of the message is likewise necessary. Checking if the message was understood and clear is also part of effective communication. Finally, receiving assurance that the receiver can and will follow-up with required action is important (Bolton, 1979; Harvard Business Review, 2011).
Sources of Miscommunication
Understanding and preventing barriers to effective communication between sender and receiver is also part of the communication process. A list of common types of miscommunication between individuals and between individuals and teams is shown in Figure 7.2.
Nonverbal, paraverbal, and perceptual cues, for example, are common in sending unintended miscommunication messages. Individuals are often not conscious of such cues they convey. Facial expressions, body language, tone of voice, hand gestures, eye contact, and paraverbal communication (i.e., how people say and emphasize words) can be misinterpreted and disrupt effective communication. Observing yourself on video and audio devices can provide objective feedback. Also asking for feedback from trusted colleagues and friends can increase your awareness of how others perceive your communication.
Communication apprehension refers to an individual’s “fear or anxiety associated with either real or anticipated communication with another person or persons” (McCroskey, 2001). This apprehension is a barrier to effective communication. A large percentage of Americans suffer from symptoms of communication apprehension and are therefore not able to communicate effectively, both nonverbally and verbally. Related in some ways to severe shyness and introversion, there are methods and tactics to help individuals manage this apprehension. The �irst tactic is to be aware of this apprehension, not hide from it, but deal with it. Relaxation and deep breathing techniques are recommended, as are the following
methods: Remember that this condition can be controlled and even overcome; focus on the person or someone in a group when you are speaking; list speci�ic fears and tactics to manage each; be prepared ahead of time for presentations and speaking with others; get support from people and friends around you; build con�idence from small “wins.”
Being aware of cultural differences while planning a message can increase understanding and acceptance of messages. Cultural barriers consist of issues related to language, semantics, and word connotations that have different meanings in different cultures. The tone of the message is also very important, that is, formality versus informality, blunt versus gracious (Munster, 1993; Hall, 1976). Although not every individual is conditioned or in�luenced in the same way by a country of origin culture, generalizations about country cultures in general can be informative with regard to how she or he communicates. People in “high-context” cultures (Hall, 1976) such as China, Korea, Japan, and Vietnam tend to place importance on relationship, informal communication that builds trust. Verbal agreements
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Critical Thinking Questions
Identify one of the communication barriers discussed in the video. How did it affect different employees? What could the leader presented in the video do to more effectively manage one of the barriers illustrated in the video?
are commonplace. “Low-context” cultures such as Germany, Switzerland, Scandinavia, and North America emphasize precision, being legalistic, and being more formal in relationships. So, culture matters in the way we communicate, even though one’s background, experiences, exposure to other cultures, and generational differences also in�luence the process.
Consider the following guidelines to prevent miscommunication: (1) Be aware of your own cultural in�luences, habits, and biases; (2) Consider the other person’s cultural context, values, and background; (3) Listen before talking, and stay with the facts to avoid your own biases and opinions; (4) Learn about the other person’s perspective �irst; (5) Create an atmosphere and environment of trust, respect, and fairness that is inclusive; and (6) Also, help create a common-ground “third culture” that includes all parties’ goals, accommodates differences, and adapts to intercultural communication differences (Hopson, Hart, & Bell 2012).
Related to cultural differences, one’s assumptions and selective perceptions can also in�luence and interfere with effective communication. Selective perception is a cognitive bias that involves a person perceiving only what she or he is able, desires, or ignores (Pronin, 2007). As with assumptions, selective perception can exclude objective information, including others’ viewpoints, and thus negatively in�luence effective communication. Everyone makes assumptions. However, when communicating strategic and tactical information to others who depend on accuracy and objectivity to implement assignments erroneous or biased assumptions serve as communication barriers to receivers and might result in poor performance for all involved.
Manipulating and �iltering information, and lying when communicating involve intentional deception; “deception occurs in business meetings, phone conversations, electronic messages, of�ice memoranda, and other everyday organizational media” (Carlson, Kacma, Carlson, 2005). Moreover, although many of these lies may be casual “white lies,” some are used with clear intentionality to further an employee’s goals within the organization. Nevertheless, there has been little consideration of whether or not such deception is “effective” (Carlson, 2012). Manipulating information and lying in the workplace can be addressed by organizational codes of conduct, policies, and discipline procedures. Creating an open and transparent organizational culture based on honesty, trust, and individual and team accountability is recommended. At the individual level of communication, each leader and employee can revisit his or her own personal ethics and code of conduct. (See Chapter 1.)
Information overload is another barrier to communication that has been in�luenced by Internet communication technologies and social media sites delivered on mobile devices (Twitter, Instagram, and Facebook, to name a few). In addition and combined with the 365x24x7 work schedule that many companies expect, many leaders, managers, and employees experience information overload. The pressures that result can affect communication effectiveness. Personal, as well as professional, quality of life may also be negatively affected (Boswell & Olson-Buchanan, 2007). A problem affecting communication from this barrier is not being able to focus or plan for meaningful exchanges, thus committing errors. Information overload is a problem for organizations and individuals (HBR, 2009; Lavenda, 2012). Tips to deal with information overload range from using organizing technologies to developing a mind-set of closing out unnecessary responses to the in�lux of information. Organizational leaders and managers can consider assigning tasks that can be completed in realistic time frames.
Barriers to Communication From Title:
Don't Hesitate, Communicate: Effective Communi... (https://fod.infobase.com/PortalPlaylists.aspx? wID=100753&xtid=42212)
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Lack of taking ownership and accountability of one’s communication effectiveness is a major barrier.
All organizational members have roles and responsibilities to ful�ill. “Without accountability, employees subconsciously become comfortable dumping duties and shifting their weight onto another’s plate, opening the door for future problems to transpire. The system of the company, as anticipated, will ultimately fail unless employees recognize that their role is not only important, but it is critical to the overall success of the organization. (CAI, 2010)
Communication in a Digital World
Dispersed workforces and teams that interact with customers, suppliers, and stakeholders nationally and globally are becoming more the norm than exception in companies. Corporate communications leaders must adapt to evolving digital trends, such as by building employees’ digital acumen and by choosing digital channels that reach both internal and external audiences (Bryan, 2019). Although different forms of communication continue to be important in organizations, digital uses of technology are increasingly adding value. For example “wikis enable more ef�icient virtual collaboration in cross-functional projects; internal blogs, discussion boards, and YouTube channels encourage global conversations and knowledge sharing; sophisticated viral media campaigns engage customers and create brand loyalty; next-generation products are codeveloped in open-innovation processes; and corporate leaders work on shaping their enterprise 2.0 strategy” (Deiser & Newton, 2013). As a consequence, leaders and managers are challenged to create more horizontal structures, collaborative systems of communicating, and “technologically linked social infrastructure that by design promotes constant interaction across physical and geographical boundaries, as well as self-organized discourse and exchange” (Deiser & Newton, 2013). Facebook, Twitter, Instagram, SkypeTM, YouTube, and other groupware (programs that facilitate collaboration among remote individuals) are now primary forms of communication.
Leaders and followers alike are adjusting to and combining new digital literacy technologies and tools into existing and changing organizational and marketing strategies, structures, customer and working relationships. Relevant to Figure 1.1 in this text, digital changes in communication involve and affect persons, processes, and systems in organizations. A 2017 McKinsey Global Institute survey reported 45% of employees saying that social technologies are very or extremely integrated into day-to-day work at their companies, up from one third of respondents the previous year. The survey reported that
52% of employees use team collaboration platforms/apps, 57% of employees use collaborative document editing, and 19% of employees use online video conferencing.
What communications leaders �irst saw as an improved business practice for employee-to-employee communication has begun to drive change among the leadership. Companies using new communication technologies (like those previously listed) for peer-to-peer communication are showing a similar pattern among executives, who are increasingly using social tools with external partners: 59% in 2016, up from 49% in 2015 (McKinsey Global Institute, 2017).
This communication evolution stems from the failure of older technologies—such as email, phone calls, and texting—to meet leaders’ and follower’ needs. According to Burke (2015),
only one third of emails are opened, whereas 99% of texts are responded to; 14% of calls are answered before being put on hold; 78% of people wish they could text businesses; and 95% of texts are read within 3 minutes of being sent.
There is much to be learned about how to use new technology most effectively as a leader.
How to Use Digital Tools in the Communication Process
“Six social media skills every leader needs” (Deiser & Newton, 2013) can be summarized as follows. At the personal level, leaders can
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Ted S. Warren/Associated Press
Microsoft IT leaders take their organization’s pulse using analytical
1. Develop creative competencies to produce compelling content by using authenticity, storytelling, and artistic vision, while honing technical skills such as video production. General Electric, for example, has accomplished this through its media lab, Colab, which GE employees created to facilitate global teamwork and collaboration. The lab combines competencies from Facebook, Twitter, and other social applications that facilitate “networking, information sharing, instant communication, advanced search, blogging, video blogs” (Deiser & Newton, 2013).
2. Understand what causes messages to go viral. Develop and sustain a critical mass of social followers. Social communication invites people to cocreate and contextualize content to add new meaning. Recipients contribute by adding content on blogs, posting videos, and commenting on questions.
3. Manage the communication over�low by also being a recipient. Meaning creation is a collaborative process in which leaders can play a thoughtful role by developing empathy with different communication channels and understanding how people consume and share information in different forms, including social media.
At the strategic, organizational level, leaders can
4. Be advisers and orchestrators, diving strategic social media utilization. Because social media is still developing commercially, leaders can help build the experience into their cultures by becoming mentors, content curators, and social entrepreneurs.
5. Become architects. Leaders can create organizational infrastructure that protects against irresponsible use. Leaders will have to �lex between adding and participating in personalized content that is shared with more formal, organizational business content. Again, one of GE’s Oil & Gas Drilling vice presidents launched a video project with the history and time line of that business, which he shared with customers and team members. He told a story that involved people who maintained an interest and continued to request updates.
6. Keep ahead of the curve by also becoming analysts. Once leaders embrace and support social media and digital ways of communicating, they have to keep innovating. The Web 2.0 revolution is about the interconnectivity of things and processes (the “Internet of Things”). GE’s leadership university has a program called Leadership Explorations that supports continuous learning of top executives in cutting-edge technologies and mixes seasoned leaders with millennial mind-sets and new ways of thinking.
E-skills and Virtual Communication
Today, “e-skills” are becoming more important as technology develops. E-leadership skills involve being able to effectively run different types of organizations; explore new ways of administering organizational processes; and establish new business models. To be able to achieve these goals, e-leaders must have skills such as expertise in a focused area, “transversal skills” to allow for collaboration, and user skills that involve being able to use systems as tools for their work (Ivanova & Arenas, 2014).
Avolio, Sosik, Kahai, & Baker (2014) postulate that there are four key behaviors of e-leaders. These leaders need to be �lexible, resolve con�licts, manage how they treat followers in a “virtual context,” and develop geographically or socially distant followers. In terms of cognition, it is important for e-leaders to “be present,” understand expectations of followers, and build trust.
Video conferencing and text-based communication are also important digital capabilities leaders use to keep in touch globally with employees and customers. Synchronous interaction and asynchronous communication are two primary ways of interacting virtually (Hambley, O’Neill, & Kline, 2007). Synchronous interaction involves interacting at the same time through a variety of different mediums. For example, with Google documents, all team members can work on the same document, at the same time while staying in communication through a chat feature. Asynchronous communication involves communicating virtually at different times. One example would be emailing a word document back and forth between group members, where only one group member at a time can edit the document. Generally, asynchronous communication takes more time and is better suited for less complicated tasks. Because
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software that monitors trending topics in their Yammer collaboration space. This allows CEO Satya Nadella to hear early warning signals. (Thomas & Silverstone, 2015).
Insights About Communication
synchronous interaction is faster, it is better suited for more complicated tasks.
Due to the continuous improvements in technology, it is easier than ever to keep constant communication between leaders and followers (Avolio et al., 2014). Faster feedback time is achieved through email
and texting. Instant messaging, Twitter, Skype, and more protected group software programs (via Intranets) like Yammer also enable professionals to stay in constant contact, and help ease communication between time zones.
Back to Basics
Although leaders use contemporary forms of media, they must also rely on basic, traditional forms of communicating as well, such as press conferences, face- to-face speeches, and informal and formal talks with different stakeholders and audiences. But even in what may appear an informal conversation on a mobile phone, a text message, or a Skype conversation, leaders, managers, and followers may be sending strategic information without realizing it. Before sending strategically important messages, leaders and followers can bene�it from considering the following strategies, which apply to e-messages as well as traditional forms of communicating:
Planning the Goal and Content Ensuring that your message achieves its intended goal involves thoughtful consideration of what you want to say. Senders usually address the following questions: What is the intended goal of the message? Is it to inform, persuade, express an opinion, or solicit ideas? What is the intended result of the message? What is the receiver expected to feel, believe, react, respond, or do? (Brass et al., 2004). Lubrin (2015) notes that “Managers need to make time for face time.” This is especially true with regard to performance reviews. Alan Buckelew, chief operations of�icer of Carnival Corporation stated that “A review is probably the one time when you want to be physically present” (Lubrin, 2015). Lubrin noted that “When it comes down to it, there is still no good substitute for being in the same room with a direct report or a high-level boss. . . . Yet there is little consensus about how much face time it takes to manage effectively” (Lubrin, 2015).
Deciding Upon the Sender Deciding who should send a particular message is critical because the receiver will usually react differently to different people. An organization should take into account the content of the message, the sender’s position in the organization, the expertise and knowledge of the sender, and the audience receiving the message. If layoffs are to be announced, a CEO may want to deliver that message personally to show that he or she understands that such a decision disrupts people’s lives. In contrast, an emailed announcement of impending layoffs would seem callous and insensitive.
Also for sensitive issues and during emotionally charged crises, the CEO or president is often the best spokesperson. When the BP oil rig explosion occurred in the Gulf of Mexico in 2010—the worst of its kind in history, taking the lives of 11 rig workers—CEO chief executive of�icer Tony Hayward received a series of crisis updates in his London of�ice on that day. A person with the CEO said on several occasions that Hayward asked, “What did we do to deserve this?” (Muf�in, 2010). When responding to that crisis, Hayward’s strategic communication skills have been widely criticized by management and crisis scholars alike. Management experts spoke out at the time saying that Hayward’s leadership failure started with his delay during the initial weeks of the spill to address the severity of the problem. Others point to his lackluster appearance before the U.S. Congress. Hayward testi�ied, “I wasn’t part of the decision-making process in
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this well” (Chen, 2010). One of the lessons for CEOs from that communication �iasco is noted: “It’s a fundamental rule of crisis management: Think with a little less head and a little more heart” (Chen, 2010).
Identifying the Receiver Identifying the receiver involves knowing who the receiver is, what the receiver’s needs and interests are, and whether the receiver is the right and relevant audience for whom the particular message is intended. A chairperson at a private university announced a meeting for the entire college a few years ago. Word spread that something exciting and different might be announced. Faculty, staff, and administrators gathered in the large auditorium waiting to hear what was thought to be institution-wide news. The chairperson moved to the podium and announced that the administration had decided to offer 30 older professors a small �inancial package in exchange for their agreeing to an early retirement plan. Disbelief, bewilderment, and dismay were sensed throughout the gathering and in hallway discussions after the meeting: wrong audience, wrong place, and wrong timing for that misplaced message.
Selecting the Best Channel Berger and Iyengar (2013) investigated how “the medium shapes the message” believing that written communication tends to lend itself to more interesting topics, partly because written communication takes more time, which allows for more re�ining. Figure 7.3 illustrates the type of communication channel with the information richness of the message and the amount of information that can be sent during a particular episode. Each channel has advantages and disadvantages.
Figure 7.3: Communication channels
Source: Daft, Richard L., Lane, Patricia G. (2008). The Leadership Experience, 4th ed. Reproduced with permission of Thomson/South-Western. © Cengage Learning.
The richness of the channel, Lengel and Daft (1988) stated, is in�luenced by the ability of the receiver to understand many cues simultaneously, handle two-way rapid communication, and establish a personal focus in the communication exchange. Face-to-face is the richest type of communication channel. When a message is complex with emotional content, a richer channel (face-to-face) may be more appropriate. Layoffs, �irings, and right-sizing are examples of when face-to-face communication may be more appropriate than a more formal, distant type of communication. If the receivers are dispersed geographically, then digital communication or conference calling may be appropriate. If the message is a routine, straightforward report for which no immediate feedback is required, then a memo, text message, or email will work.
Because digital communication is swiftly replacing the print medium, it is easier to confuse matching communication channels with particular messages. Blogs, instant messaging, and Twitter are becoming preferred forms of
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communicating faster and more inexpensively (King, 2015). Social networking sites are also a platform of communication that companies use for noncon�idential information. The point here is that leaders’ communication effectiveness depends in large part on matching the type of channel (formal report, memo, email, phone, instant messaging, Skype, face-to-face) with the type of message (low richness and emotional content versus high richness and emotional content).
Timing the Message Finally, selecting the right time to send messages matters. Messages that carry highly emotional, sensitive content should not only be delivered through the right communication channel but should be timed so that receivers can understand and discuss or respond to the message. For example, it is not recommended that layoffs be delivered through email, Twitter, or instant messaging, or at times that are inconvenient for people to receive such news. Although layoffs may be necessary for the survival of a business unit or organization, how, when, and by whom the news is delivered sometimes has as much impact as the content. Consideration for the receiver is an important element with all types of communication. Leadership communication affects not only those who are laid off but also those who stay.
Styles of Communication
Are some communication styles more effective than others? There are no de�initive theories or evidence that one individual style of communication is more effective than another. Different studies, however, show how certain personality styles relate to ways of communicating (de Vries, Bakker-Pieper, & Oostenveld, 2013). Knowing your style provides a baseline for increasing your strengths and developing less effective ways of relating. As discussed in Section 4.3 on contingency theory, leadership effectiveness depends on the �it between a leader, the environment and situation, followers, and the success factors for the organization to succeed. The same holds true for communication.
DeVries et al. (2010) also described seven communication style dimensions: “expressiveness, preciseness, niceness, supportiveness, verbal aggressiveness, (expressed) emotional tension (or, reversed, assuredness), and argumentativeness.” The two primary styles of communication are niceness and verbal aggressiveness. Tskhay, Xu, & Rule (2014) argue that communication is not only what you say, but also what you do. It is important for leaders to know that their nonverbal behavior can have an impact on their ability to communicate (Tskhay et al., 2014). Even simply communicating with your arms crossed instead of by your side can have an impact on the message that you are trying to send. In order to use this as an advantage, you must be constantly aware of your body language when you are communicating in order to ensure that the correct message is conveyed.
The popular DISC (Dominance, In�luence, Steadiness, and Conscientiousness) personality type also offers a method for relating personality type to communication style. Take the online assessment and see if your communication style relates to your personality. An online version (http://discpersonalitytesting.com/free-disc-test/ (http://discpersonalitytesting.com/free-disc-test/) ) is also available. Have someone who knows you well and is unbiased take the DISC assessment about you and compare your results.
The styles of the DISC personality inventory include the following, which also describe accompanying communication styles (Kathy M., 2014):
Dominant (D)—Described as demanding, vocal, adventurous and competitive, people with dominant personalities often make the �irst move in social situations and take the lead at work. They are often project leaders, pioneers in their �ield, and innovators. People with this personality type may seem rude as they are often in a hurry and tend to interrupt other people as they are speaking. Most people would consider them blunt, opinionated and not up for open discussion.
In�luential (I)—In�luential people are the social butter�lies of the world. They love to communicate, to perform and joke around. They often appear excited, open and friendly with everyone they meet. This personality type is also almost unfailingly positive.
Steady (S)—Steady personality types are stable, deliberate and follow a system. These are the people that like routine and dislike distractions. They proceed carefully and like to have all the details before making a
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decision. They can be quiet. However, they are great listeners when communicating one-on-one with someone. People with this personality type are rarely jealous and tend to keep their emotions on an even keel.
Conscientious (C)—Precise, logical, and preferring perfection, conscientious personality types are hard on themselves and like to follow the rules. They are often not very expressive in person and prefer to communicate in writing. For this reason, they can come across as cold and distant. However, this is not the case. They do not like to disagree or to be wrong, so they often keep their feelings to themselves. (Kathy M., 2014)
The purpose of this section is to provide you with information to describe your communication style and effectiveness, and also to enable you to observe others’ communication skills. You may also compare your DISC pro�ile with your Myers–Briggs personality style from Chapter 3 to gain insight into how these styles relate to your communication effectiveness.
The Johari Window: Toward Open Communication
The Johari window is a framework to help individuals and teams increase open communication by sharing more information with one another. Increased trust and con�idence in self and others leads to more self-disclosure, thus enhancing more communication among all members. Observing Figure 7.4 shows that quadrant 1, the open/free area, is the desired space for both individuals and team members, because information is openly shared here. The idea is for an individual or team member to create an organizational and team culture that welcomes self-disclosure and information sharing, thereby expanding quadrant 1 in the �igure to quadrants 3 and 4.
Quadrant 3 in Figure 7.4 represents the secret or hidden side of an individual, leader, or team member, who knows what she or he thinks and believes but others do not know. The person may be keeping such information concealed deliberately or is not able to share information for whatever reason. This could be a new member of a team or organization who is not yet comfortable enough to share, or there may be conditions within the team or organization that contribute to the individual’s not feeling comfortable or trusting enough to share information. Fear of reprisal, violating group norms, or hoarding information for self-interests may be other reasons for concealing information (Nayab, 2011).
Using and facilitating discussions using the Johari window by a team or organizational leader is another way of creating an open environment for sharing information that is bene�icial for organizational productivity, growth, and development. Although there may be certain situations in which con�idential or strategic information should not be shared with certain members and groups at certain times, information sharing in general is an important principle for teams and organizations because no single individual or group has all the answers and insights to solve problems and generate innovations (Nayab, 2011).
Figure 7.4: Johari window
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7.2 Communication in Organizations Communication in organizations is a complex process, given the different functions, structure, positions, and human elements involved. Eisenberg, Goodall, and Trethewey (2010) describe and summarize �ive models that chronologically evolved and that describe how communication occurs in organizations. Although each model captures some of the complexity of theses communication processes, the �ive models each contribute to an understanding of an overall view. The last model, organizations as dialogues, captures elements of organizational complexity and nuance that the previous ones do not. The models include: “information transfer, transactional process, strategic control, a balance of creativity and constraint, and organizations as dialogues” (Eisenberg, Goodall, & Trethewey, 2010, p. 28). We will elaborate upon each of these here.
Communication as Information Transfer de�ines communication as “the exchange of information and the transmission of meaning.” In this model, information �lows between individuals and teams as in a pipeline. Information transfer views language as an exchange of thoughts and feelings between parties. There is miscommunication when messages are missing, ambiguous, or misinterpreted; when there is information overload; or when noise (contextual, word meaning, or physical) causes distortion. Critics say this model views receivers as passive and the process as incomplete and simplistic with nonverbal communication unexplained.
Communication as a Transactional Process focuses on people, not the message, and views sender and receiver as simultaneously the same, although the receiver is the focus because he or she interprets the meaning (nonverbal and verbal) of the message, not the sender. This model is criticized because of its emphasis on shared meaning, omitting the variety of issues that can go wrong with communication—disagreement over perspectives, con�lict, and ambiguity.
Communication as Strategic Control portrays communication as a control tool to respond and manage the environment. In this view, communication effectiveness is described as goal attainment with the primary objective centering on organized action. Senders and receiver have different goals and select strategies for goal attainment. Rational and objective communication is not the primary mode. Clarity in information and interaction sharing is not a central goal; instead, individuals’ communication is typically unclear and strategically ambiguous in goal achievement in this model. This strategic communication ambiguity also uses different meanings given to the same messages to increase uni�ied diversity among people. Issues with this model are that it overemphasizes individuals’ function and power in meaning creation while deemphasizing cooperation, coordination, and interdependence of people and groups; and minimizes the ethics with this system of communicating.
Communication as a Balance of Creativity and Constraint views communication as a dichotomy between a macro and micro perspective. At a micro level, employees are viewed as creating and molding organizations. At a macro level, the focus is on organizational constraints that affect communication and employees. Structures are viewed as outcomes of communication practices but are simultaneously obligated to rules that created them. From this perspective, communication becomes the continuous settling of tensions been individual creativity and organizational restrictions. From this balancing, creativity evolves as the strategic responses to organizational constraints. With this perspective, communication can be understood and analyzed as a balancing act between these forces. An apparent limitation of this model is the omission of how each person’s “voice” and the dialogue between individuals and others help explain reality that is also constructed through and between interpersonal communications.
Finally, organizations are viewed as dialogues. Because communication is a balance of creativity and constraint, the authors stated that “we maintain that dialogue is balanced communication, or communication in which each individual has a chance to both speak and be heard.” Dialogue has four elements that represent the development of more collaboration and respect for others. In this regard, dialogue encompasses and makes possible “(1) mindfulness, (2) equitable transaction, (3) empathic conversation, and (4) real meeting” (Eisenberg et al., pp. 40, 41). Mindfulness (as contrasted with mindless communication) means being centered; it requires focus and discipline. Mindful communication can add both purposive and strategic content, context, and depth to communication, thereby create possibilities for a more open, trusting, and collaborative environment. Dialogue also facilitates possibilities for members in the organization to be more equitable (and ethical) in their transactions because everyone is given a voice and can be heard. While this is not a given, it is more possible.
Empathetic conversation involves “the ability to understand or imagine the world as another person understands or imagines it” (Eisenberg et al., p. 44). Empathic conversation encourages listening to others’ perspectives and viewpoints in different work units, and thereby creates opportunities for more shared information. Respect for individuals can also
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Creating an open dialogue is vital to effective organizational communication.
develop when different voices are heard. Appreciating the diversity of individuals and groups can be enhanced and can contribute to satisfaction and productivity. Finally, the authors de�ine real meeting as “through communication, a genuine communion can take place between people that transcends differences in role or perspective and that recognizes all parties’ common humanity” (Eisenberg et al., p. 70). Through real meeting, individuals engage “to learn more about the self in context with others” (p. 71). Related to empathy, real meetings involves individuals appreciating and paying attention to others as if they mattered, not just as objects.
Limitations to this model include the following: dialogue is time consuming; it can also lead to people assuming that their ideas and opinions will be implemented when the leaders or decision makers may not agree; and it may lead to “a lack of closure or to the feeling that ‘no right answer’ can be found” (Eisenberg et al., p. 46). Still, this view does present a more nuanced and realistic view of individuals than the earlier models described in this perspective. Also, although somewhat idealistic in sections, studies do support propositions in this model with regard to the value of dialogue, empathy, ethics, and mindfulness.
Leaders as Champions of Strategic Communication
Leaders are the face, voice, and role models of their companies. What they say, to whom, and how is important, and their ability to change organizations and cultures, particularly during times of crisis and uncertainty, is signi�icant. They are and must be, in effect, champions of strategic communication. As strategic communicators (Clampitt, Berk, & Williams, 2002), leaders must communicate from a big picture, systems perspective (as discussed in the �irst part of this chapter). They must always be conscious of upholding and maintaining the vision, mission, values, and strategy of the entire organization when they communicate. They must also look to inspire, build trust, unite, and mobilize followers around a common identity and purpose of the organization.
Tactical communicators, on the other hand, are more concerned with transactional types of exchanges that involve implementation and hands-on details and tactics. For example, managers, as tactical communicators, spend over 80% of each day communicating as “information processors” (Mintzberg, 1973). As transactional managers, they control, schedule, correct, and direct daily processes, procedures, and people around speci�ic tasks, projects, and programs. They spend 48 minutes of every hour on the phone, in meetings, and communicating with teams, suppliers, and vendors to implement details of organizational objectives. Of course, both strategic and tactical communication are necessary for organizational goal attainment. It is important here, however, to distinguish between these types, because strategic leadership communication sets the overall tone and context for organizational exchanges.
Strategic leadership conversations differ from transactional, tactical discussions. They create an open climate for dialogue, emphasize strategic topics to provide clarity, focus on the customer’s needs and wants, share responsibility with followers, and involve constant and consistent feedback (Young & Post, 1993).
Open Climate for Dialogue
Leaders engage in strategic conversations by creating an open climate that is two-way, not top-down; communication �lows and is not constrained by status of position titles. By asking the right questions, leaders discover what people feel and think about issues and opportunities. There are two types of questions leaders can ask: leader centered and follower centered (Spitzer & Evans, 1997). Leader-centered questions seek to gain follower knowledge and expertise as well as feelings and thoughts about different topics relevant to the goals, strategies, and initiatives of the organization. Leaders also build trust and con�idence in followers by asking these types of questions with authenticity, concern, and interest (Newberry, 2003). Follower-centered questions focus on developing new ideas, expanding awareness, and stimulating critical thinking. Similarly, with these types of questions, leaders ask in ways that show interest in followers’ ideas and opinions.
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Listening
Burleson (2011) de�ines listening as “a collaborative process . . . of interpreting the communicative behavior of other in the effort to understand the meaning and implications of that behavior” and states that there are multiple names for listening, including: “message reception,” “message processing,” and “decoding.”
Edwards (2011) describes the listening model as having three parts: listening presage, listening process, and listening outcome. Listening presage focuses on personality traits, such as listening style preference, empathy, and listening capacity. The listening process not only focuses on processing the message, but also the behavioral response. The listening process has four stages: attention, decoding/interpretation, memory systems, and response preparation. Attention is the difference between simply hearing and actually listening to what is being said. Decoding /interpretation is where the listener actually processes what they are hearing and forms it into meaning. Memory systems involve putting the meaningful communication into a memory so that it may be recalled at a later date. The last stage of the listening process is response preparation where the listener exhibits behavioral responses that could be either spoken or physical.
Similarly, Burleson (2011) describes the listening process by touching on similar points, but uses a �ive-step process. The process includes: hearing, comprehension, interpretation, act recognition, and understanding. The third stage of the listening model is interpretation, which includes the outcomes of listening, such as gaining knowledge, building relationships, and responses.
Although there are different stages in the listening model, there are also different levels of listening, as Burleson (2011) describes. The most basic level of listening is called surface-level where the listener can interpret the message at face value instead of looking for a deeper meaning. The more advanced level of listening deals with depth processing, where the listener searches for a deeper meaning, which requires more extensive analysis and thinking.
Active Listening
Active listening is another classic communication technique that strategic leaders use to gain knowledge and build relationships with followers. In active listening, the listener’s focus and attention is on understanding, interpreting, assessing, and showing the sender that what was said is understood. This sounds easier in theory than in practice. Active listening is not passive; after absorbing what the speaker is saying without interrupting, distracting, or indicating disinterest, the listener asks questions for clari�ication if necessary. Eye contact and nonverbal body language show that the listener is fully engaged and interested in the messenger as well as the message. Poor listeners, on the other hand, do not show interest through eye contact and attentive body language; listen for facts and not emotion; and usually daydream, interrupt, and respond with judgmental or argumentative opinions (Morgan & Baker, 1985; Okum, 1975). Poor listening and communication habits foster closed cultural climates and emotional disconnection between leaders and followers. Strategic conversations cannot thrive without active listening skills. Take Assessment 7.1 to see how effective a listener you are.
Assessment 7.1: Are You an Effective Listener?
Instructions
Go through the following questions, answering no or yes next to each. Mark each as truthfully as you can in light of your behavior in the last few meetings or social gatherings.
No Yes
1. I give attention to nonverbal clues of others when communicating. ________ ________
2. I ask someone to explain or make clear what they are saying if I don’t understand. ________ ________
3. I try hard to understand someone’s position and opinion when communicating. ________ ________
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4. Most people sense that I understand their viewpoint even if we don’t agree. ________ ________
5. I try to listen to many conversations at once instead of focusing on one at a time. ________ ________
6. I prefer individuals to share factual information with me and let me decide. ________ ________
7. I act like I am listening when I really am not. ________ ________
8. I can tell what someone will say before they even say it. ________ ________
9. I answer right after someone �inishes talking to me. ________ ________
10. I assess what someone is saying while they’re talking. ________ ________
11. I usually focus on the other person’s style while they’re talking, which sometimes distracts me from what they are saying.
________ ________
12. I am thinking about how I will respond while someone is talking with me. ________ ________
Scoring and Interpretation:
According to communications experts, “no” is the correct choice to statements 5, 6, 7, 8, 9, 10, 11, 12; and “yes” is the correct choice to statements 1, 2, 3, 4. Use the following suggested interpretation for self-development in listening:
9–12 correct items: You evaluated yourself as an effective listener.
7–8 correct items: You have some areas that need improvement in your listening skills.
6 correct items: You need improvement in listening skills; your followers and coworkers may observe that you are not giving your full attention when listening to them.
Source: Daft, Richard L. (2011). The Leadership Experience, 5th ed., Mason, OH: Cengage Learning. Copyright © Cengage Learning.
Emphasize Strategic Topics
Effective leaders use strategic conversations and dialogue to understand issues that followers and stakeholders have about certain strategic topics and to gain acceptance on these topics. Leaders rely on discussion to clarify controversial topics and on dialogue to reach agreement and gain acceptance. In dialogue, in contrast to discussion, people share their positions on a topic, gain understanding of each other and the topic, and reach common ground. Discussion, on the other hand, involves stating positions and opinions based on facts, logic, and beliefs and may not lead to agreement between two parties. Although dialogue certainly involves facts, logic, and beliefs, it differs from discussion in that “people usually hold relatively �ixed positions and argue in favour of their views as they try to convince others to change. At best this may produce agreement or compromise, but it does not give rise to anything creative” (Bohm & Peat, 1987, p. 241). David Bohm further suggested that “the purpose of dialogue is to reveal the incoherence in our thought. In so doing it becomes possible to discover or re-establish a ‘genuine and creative collective consciousness’”(Bohm, Factor, & Garrett, 1991). The process of dialogue is a process of “awakening”; it entails a free �low of meaning among all the participants (Smith, 2001).
Clari�ication of the topic may be gained through discussion, but mind-sets may not be changed (Schein, 1993). Dialogue requires active listening skills, an open mind, and the ability to bring people of differing opinions together on controversial topics. Leaders in organizational cultures that are built on trust have a higher probability of leading change through dialogue than those in distrusting settings.
Focus on the Customer
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Clampitt, Berk, & Williams (2002) found that leaders and managers who were successful in dealing with change included the following mantra in their strategic conversations: “Keep close to the customer.” The researchers concluded that successful companies’ communications programs, in their interactions with employees who dealt directly with customers, framed certain types of questions: What does the customer want to know? When do they prefer to receive information? In what form (at home, email, graphic display) do they want to receive it?
In these companies there was a clear trend toward insisting that employee communications staff monitor their customers and audiences, and understand the organizational issues, job demands, and other communications efforts that affect the customers. In the best companies, communications programs serve the audience’s needs and, as a result, improve the organization’s capacity for dealing with change (Clampitt, Berk, & William, 2002).
Share Responsibility
An underlying theme of effective strategic conversations is that leaders share responsibility with followers. Whether good or bad news occurs, followers want their leaders and managers to inform them, share with them, and explain such happenings to them. A major theme from a study on leaders as communication champions was that “people want to hear news from their boss, not from their peers or from the grapevine” (Clampitt et al., 2002).
Give and Receive Feedback
Leaders give and receive feedback more easily as part of a shared communication process in organizations where trust and an open climate are cultural traits. Both leaders and followers must give and receive feedback in their mutual in�luencing process toward organizational goal attainment. Feedback consists of letting others know in a straightforward manner what you think of them, how well they have performed, and if they have met your needs and expectations. We note that giving and receiving constructive feedback, especially if it is negative in content, is not easy— and probably never will be. In addition to the guidelines offered here, it is important to separate emotions from the message. Focusing on the goal of the feedback and importance of communicating the message involves taking an objective perspective. Also, followers who have less power than the leaders and supervisors to whom they report have an added burden in giving feedback—especially negative feedback. Again, in addition to the following guidelines, ensuring that your message is true, veri�iable, and necessary to deliver can provide assurance that how it is delivered is often as important as what is being delivered. Guidelines for giving honest feedback include the following (Bolton, 1979):
1. Check your motivations before giving feedback. Make sure your reasons are clear and justi�iable. 2. Check your frame of mind. Being angry, tired, or uncertain interferes with giving objective feedback. 3. Ensure that your feedback is purposed to help the receiver. 4. Offer feedback directly to the receiver, with genuine feelings. 5. Be descriptive, not evaluative. Omit words like should, must, and ought. 6. Be speci�ic instead of general; offer clear, recent examples. 7. Choose a time when the receiver and you are ready. 8. Check the validity of your intended feedback with others who are reliable and will keep your communication
con�idential. Be sure you are communicating facts, not gossip. 9. Include only areas that the recipient has control over.
10. Do not share more than the receiver can handle emotionally or factually.
Con�ident leaders will often ask followers as well as peers as part of giving feedback, “How am I doing? What do I need to be doing differently? What needs do you have that aren’t being met by the organization?”
Guidelines for receiving honest feedback include the following (Athos & Gabarro, 1978):
1. Avoid being defensive. Take a neutral, objective view that will facilitate the sender’s offering you unbiased information.
2. To ensure that you understand the feedback, summarize what you heard and ask for clari�ication in an understanding, nonjudgmental way.
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Feedback consists of letting others know what you think of them, how well they have performed, and if they have met your needs and expectations.
3. Share your feelings about speci�ic behaviors at issue in order to validate the information, feelings, and understanding of the subject.
4. Remember that you have the right to evaluate and validate what you hear, to decide what you believe about the feedback, and to decide if you feel that it is personally and professionally worth the effort to change.
Each of these characteristics of strategic conversations could also be termed leadership communication skills: ways that leaders can ensure they are effectively conveying the information they need to convey and receiving the information they need to receive. In the last section of this chapter, we turn to another essential leadership communication skill: persuasion.
Von Bergen, Bressler, & Campbell (2014) describe an ineffective method of giving feedback, before moving on to guidelines for proper feedback. Many people use a “sandwich method,” which they cling to like a safety blanket, because they are uncomfortable giving criticism. In this method, the criticism is sandwiched between two compliments. However, this can lead to confusion in the intended message. Instead, Von Bergen et al. (2014) suggest that the proper way to give feedback is by using the following guidelines:
Plan the discussion, when possible. Keep positives and negatives separate. Time discipline so as not to be too soon or too late. Focus on the issue regarding behavior. Connect the behavioral issue with how the issue has an impact. State consequences if behavior does not improve. Identify the proper and required behavioral change that is expected. Ask how you can help with the change. Express con�idence in their ability to improve.
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7.3 Leadership Skills in Persuasion Persuasion is commonly de�ined as the act of convincing someone to believe or do something; it uses communication to achieve a goal. Leaders use persuasion as a form of in�luence to get work done through other people. Even in high- performance cultures, leaders still have to in�luence and persuade followers. It is a fundamental leadership competency. Jay Conger, an expert on leadership, wrote:
Effective persuasion is a dif�icult and time-consuming proposition, but it may also be more powerful than the command-and-control managerial model it succeeds. As AlliedSignal’s CEO Lawrence Bossidy said . . . , “The day when you could yell and scream and beat people into good performance is over. Today you have to appeal to them by helping them see how they can get from here to there, by establishing some credibility, and by giving them some reason and help to get there. Do all those things, and they’ll knock down doors.” In essence, he is describing persuasion—now more than ever, the language of business leadership. (Conger, 1998, p. 86)
If persuasion is the language of business leadership, as Conger (1998) put it, then it is critical that leaders know how to perform it effectively. We will examine the four steps of persuasion before examining the common pitfalls.
Four Steps of Persuasion
The four steps of persuasion are (1) establishing credibility, (2) building goals from a common frame, (3) presenting a compelling position, and (4) connecting emotionally (Conger, 1998). Establishing credibility involves expertise and relationships: The leader—or whoever is doing the persuading—must possess the relevant knowledge as well as a trusting relationship with whomever he or she is trying to persuade. For example, suppose you wanted an honest assessment of your health. You would more likely be inclined to believe a longtime family doctor than some stranger at the ballpark. In taking the �irst steps to establish their credibility, leaders must make an honest assessment of how others perceive their knowledge and of the strength of their relationships with those whom they will try to persuade. Leaders can also ask to what extent their audience perceives them as trustworthy and helpful.
However, credibility is not enough to persuade others. Leaders also need to build goals from a common ground, or �ind an area that those being persuaded can agree on. People need to know and be shown how they will personally bene�it from the offer to be made. Knowing their audience will help leaders �ind common ground on the proposal that is the subject of persuasion. To do this, leaders need to talk with the people whom they will engage—test the waters—and �ind out what they are thinking and what they want. If leaders cannot see, feel, or experience any common ground, they should revisit their proposal.
Leaders who can present a compelling position after they have established credibility and framed a common ground have a higher probability of succeeding. Winning others over involves the use of lively metaphors, stories, numbers, and analogies that paint a vivid picture and pave the way for a compelling, tangible description of the persuader’s offer.
Finally, effective leaders connect emotionally with their followers or others whom they are persuading. They have to show their emotional commitment to their position in a reasonable and clear headed way. People are persuaded not only in their heads but also in their hearts, especially if leaders are asking for signi�icant time, energy, or effort from those who are being persuaded.
Nasar (2013) identi�ied 21 principles of persuasion that resonate with our general presentation on leadership communication and with Conger’s arguments here. Here is a sample of some of the more notable principles:
1. Persuasion is not manipulation. Persuasion is the art of getting people to do things that are in their own best interest that also bene�it you.
2. Context and timing. Context creates a standard of what is acceptable. Timing requires what we want from others and life. We make choices in terms of context and timing.
3. You have to be interested to be persuaded. The �irst art of persuasion is learning how to talk to people about them; doing that means you always have their captive attention.
4. Persistence pays. Abraham Lincoln lost his mother, three sons, a sister, and his girlfriend; failed in business; and lost eight separate elections before he was elected president of the United States.
5. Don’t assume. Don’t ever assume what someone needs; always offer your value and leave the choice to them.
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The four traps that lead to persuasion failure are the hard, upfront sell, resisting compromise, failing to present a compelling position, and failing to connect emotionally.
6. Truth-tell. Truth-tell without judgment or agenda, and you’ll often �ind others’ responses quite surprising. 7. Build rapport. You can build a sense of rapport where people feel more comfortable with you and become
more open to your suggestions. 8. Behavioral �lexibility. The larger your repertoire of behaviors, the more persuasive you’ll be. 9. Learn to transfer energy. The most persuasive people know how to transfer their energy to others, to motivate
and invigorate them. It can be as simple as eye contact, physical touch, laughter, excitement in verbal responses, or even just active listening.
10. Communicating clearly is key. The art of persuasion lies in simplifying something down to its core, and communicating to others what they really care about.
Four Traps That Lead to Persuasion Failure
Leaders fail at effective persuasion when they too often fall into one or more of the falling traps. First, leaders who try to make their case with a hard, upfront sell more often than not fail, according to Conger (1998), because they show their logic and tactics at the outset, thus giving their potential opponents reasons to attack. It is more effective to start a dialogue or conversation before trying to convince the person to be persuaded or back the person into a corner.
Second, leaders who resist compromise at the outset and see it as a weakness usually communicate in�lexibility and stubbornness. Persuasion is often a two-way path that involves some give and take, listening, and accepting parts of what others have to offer into the proposed perspective.
Third, some leaders believe that their arguments and ideas are the greatest and that the secret of persuasion lies in sharing these ideas with others. Arguments are important, but they are, as Conger noted, only part of the equation; persuasion also depends on the four steps mentioned earlier.
Finally, when leaders assume that they have one shot at getting others to buy into a proposition, they are again wrong. Persuasion, said Conger, is a process. It can take time. Dif�iculties are experienced. Listening is required. Developing and redeveloping a position that is tested and compromised before being accepted is to be expected. Through the process, the results may be worth the time and energy given.
Successful persuasion, then, involves all of the skills and competencies required for effective communication. Leaders must plan their messages, know their audiences, actively listen, give and receive feedback, have strategic conversations, create an open environment for dialogue, use the right communication channels for the type of messages they convey, and establish credibility with those whom they are persuading. Effective communication is an integral part of who leaders are and what they do; that is, as we discussed in Chapter 1, in�luencing followers to achieve common goals through shared purposes.
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Take the Lead Credits
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Summary & Resources
Chapter Summary Effective communication is essential to successful leadership. Communication involves a person’s capacities, personality, skills, competencies, and relationship abilities. Communication also affects every aspect of leading: in�luencing, motivating, visioning, creating culture, developing strategy, mobilizing change, and managing stakeholders locally, face- to-face, and globally through digital information technologies. Leading and managing digital communication has also become a requirement of leadership because most businesses now involve some form of digital communication. To succeed in a digital world, leaders must also become participants as well as producers, architects, directors, and change agents in embracing and integrating groupware and social media into their strategies, marketing, and customer and employee relationships. Understanding how leaders’ personalities and communication styles affect their ability to send and receive messages across different channels to different audiences is also important. Discerning when blind spots in communication occur can assist leaders in giving and receiving feedback more effectively. Leaders also have the obligation of owning and communicating strategic content with followers, which involves active listening, creating an open climate for dialogue as well as discussions, emphasizing strategic topics, focusing on the customer, and sharing responsibility. Learning principles of effective persuasion is also a key competency of leaders whose primary role is responsible in�luence.
As you take the assessment in this chapter and digest the different elements of communication from a leader’s perspective, re�lect on what speci�ic changes and development you need to increase your communication effectiveness.
Web Resources Leadership Is All About Emotional Persuasion
http://www.forbes.com/2010/02/02/communication-emotional-persuasion-leadership-managing- speaking.html (http://www.forbes.com/2010/02/02/communication-emotional-persuasion-leadership-managing-speaking.html)
A communications consultant offers insight on persuasion.
Critical Thinking Questions 1. Describe some important similarities and differences between a leader’s communication and that of followers
in an organization? 2. Identify some major miscommunication issues that you face in your work, professional, and student life. What
methods do or can you use to change or eliminate those? 3. Describe some advantages and disadvantages of relying only or mainly on digital ways of communicating.
Answer this same question about yourself. 4. Give an example of how you would use the Johari window to move from a blind spot you have with another
person or group to open knowledge between you and that person or group. 5. Referring to the chapter and assessment, what is your communication style and describe some advantages and
liabilities (issues) that you experience with your style? Identify a few ways you could develop or change the issues you experienced with your style.
6. Describe your effectiveness as an active listener. What particular issues do you experience in your current work or job that hinder active listening? Identify some ways you can improve your active listening skills.
7. Suggest ways that an organization in which you work or are familiar could implement elements from the �ifth model (communication as dialogue) in the organizational communication part of this chapter.
8. In what ways is persuasion important for leadership communication? How effective are you in persuading people to do something? What ways can you improve your ability to be more effective in persuading others to do constructive tasks?
Key Terms
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active listening
communication
communication process
dialogue
discussion
Johari’s window
persuasion
strategic communication
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8 Leading Teams
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Learning Outcomes
After reading this chapter, you should be able to:
1. De�ine teams in terms of leadership composition, relation to groups, and advantages and disadvantages.
2. Describe the stages of a team’s development and identify ways for excelling in each developmental stage of a team.
3. Identify different types of teams and strategies to effectively lead them.
4. Discuss speci�ic ways for transforming groups into effective teams by understanding the qualities and habits of effective teams.
5. Explain strategies and tactics for preventing and managing con�lict in teams.
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Warren Buffet requires a sales strategy that is simple and understandable by all.
Mary Barra, CEO at GM, has a team leadership approach that is “diametrically different” than older hierarchical models of leadership. Her style relies on team building and seeks consensus. She holds “hall meetings” to solicit advice from team members as to what direction a project should go in, and she challenges people to question their assumptions. She’s known to be a very good listener, and she needs to be if she wants to solicit the ideas and feedback of team members. At the end of the day, she’s not at all afraid to make the hard choices, but she does so after seeking the perspectives of those around her and trying to build consensus toward the goals and objectives of the team (“What Drives Mary Barra,” 2011).
For Elon Musk, the SpaceX and Tesla inventor, team leadership is getting others to believe in the leader. He was quoted as saying: “A company is a group of people that are organized to create a product or service. That’s what a company is. So in order to create such a thing, you have to convince others to join you in your effort and so they have to be convinced that it’s a sensible thing, that basically there’s some reasonable chance of success and if there is success, the reward will be commensurate with the effort involved. And so I think that’s it. . . getting people to believe in what you’re doing—and in you—is important” (“Elon Musk,” 2013).
Sales teams for Warren Buffet, the renowned investor, require a sales strategy that is simple and understandable by all. It should express a company’s values. According to Buffet, “We have to stop over- complicating sales teams with the obsessive focus on reporting on the numbers and results only (forecasting, pipeline, big data, results, etc.) at the expense of actually working with our sales teams to get them selling better” (Barrett, 2015).
All of these leaders are seeking ways to get the most productivity out of their teams. This chapter covers when and how teamwork can be used effectively in organizations, how teams form, and what differences scholars have identi�ied between types of teams. A large component of this chapter explains how the role of leadership changes with a team, given the different structures, and how leaders can develop effective teams. Team leaders’ responsibilities differ with
their roles on teams, but still play a critical role.
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8.1 De�ining Teams A team is an organized group of several members who share a common goal, work interdependently, and coordinate efforts to accomplish desired objectives (Allen, 2009; Larson & LaFasto, 1989). Effective team leadership and followership depend on factors in our organizing paradigm illustrated in Figure 1.1, Chapter 1: persons, processes, and systems in organizations and their environments. Who the team leaders and followers are—their personalities, how they communicate and problem solve, and how the larger organization and systems support the teams all matter, as we will explain. Teams are formed for a number of reasons, for example when one or a few professionals alone cannot accomplish a task, project, or work that requires greater expertise and experience; when creativity and innovation are needed to increase productivity; when work environments provide employees with opportunities to increase their sense of empowerment and job satisfaction (Badir, Büchel, & Tucci, 2012; Hopp & Zenk, 2012); and when teams are structured with positive attitudes that help produce extraordinary performance (Cameron, Carlos, Trevor, & Margaret, 2011; Seppälä, 2015).
Not all work can or should be done in teams because teams require more resources, coordination, and demands on an organization’s time, and teams create the potential for con�lict. When simple tasks can be done by individuals, teams may not be the answer. Also when tasks do not demand a common mission, purpose, or set of goals, individuals may perform the work; and, when tasks are not interdependent (i.e., when the end product does not depend on how the other work elements �it together), a team may not be required (Crawford & LePine, 2013; Naquin & Tynan, 2003). However, as work becomes more complex, demanding higher levels of expertise across geographies, teams are essential.
Teams can vary in size and scope and can occur at all levels of an organization. A team can describe anything from a small group of executives who lead a corporation to smaller groups that are formed around a speci�ic task and are dissolved upon completion of the task. A manager may assign two employees to a team to complete a small project together or a CEO may create an interdepartmental team to evaluate the ef�iciency of communication processes.
Composition of Team Leadership
Teams can be led by a formal leader or through a particular division of labor across team members. This distribution of leadership responsibilities is called team leadership capacity (Day, Gronn, & Salas, 2004), with capacity referring to the potential for such leadership to ful�ill those responsibilities. Unlike in traditional organizations, where managers make all of the decisions, these teams ensure their effectiveness through shared responsibility (Hawkins & Tolzin, 2002). One of the most visible examples of this is a company’s traditional executive team, shown in Figure 8.1: the C- suite—the chief executive of�icer, or CEO, leads a group of top-level of�icers, often including a chief �inancial of�icer, a chief operations of�icer, a chief information of�icer, and a head of human resources. Each individual has his or her own specialization and brings something different to the table, and together they work to establish and implement company vision, mission, values, and strategy. Although the CEO directs this team, all partake in the decision-making process. Even in cases of distributed leadership, it is important to designate a leader who is ultimately responsible for delegation and the team eventually achieving its goals. Ideally, team members will agree on both the goals and the intermediate steps, but at times, consensus isn’t possible, and decisions still need to be made.
Figure 8.1: Traditional executive team
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Team size and composition are important and depend on a number of factors, including nature, type, and duration of the project and work; mission, goals and deadlines; and available expertise and resources. Although teams can range in size from �ive to nine members to even larger numbers, there is some agreement that smaller size is more effective with less potential for con�lict and management issues (Coutu, 2009; Curral, Forrester, & Dawson, 2001). However, size depends on the type of team needed. An example is a dispersed team such as a book publishing company. The production of any book likely involves an interdepartmental team: editor, copy editor, cover artist, book designer, marketer, and so on. The team’s goal is to produce the best possible version of the book within a given time frame. Each team member contributes specialized skills and knowledge, such as the types of covers that may appeal to readers of historical �iction or ways to sell a book to large retailers such as Amazon or Walmart. However, they are all working toward a shared goal and must interact regularly to complete their tasks. These team members join the project with diverse, and ideally complementary, expertise and improve the quality of the �inal product, and their work is interdependent.
How good are you and your team at teamwork and team building? Take an online assessment to help you uncover common teamwork problems that you might be experiencing. To address a low score, consider improving how you orient new members to the team and its mission. Click the following link, type "Team Effectiveness Assessment" in the search bar, and click the �irst link titled "Team Effectiveness Assessment": https://www.mindtools.com/ (https://www.mindtools.com/) .
Teams Versus Groups
Teams have been described as groups, which are simply collections of people working together. However, not all groups are teams. There are those who argue that, in the real world, teams and groups overlap and are more similar than different. It is possible that some groups can become teams, but as shown in Table 8.1, the two technically differ in structure, intent, and function. Teams rely less on a hierarchical structure and more on an open and equal exchange of ideas and expertise. Leadership is often shared or might rotate among team members—who might come from all parts of an organization—and leaders rely more on social skills (skills facilitating interaction and communication) and trust to ensure that shared responsibilities are met. Also, teams often set their own performance goals and collaborate closely to produce a collective work product.
Table 8.1: Differences between groups and teams
Groups Teams
Designated, strong leader Shared or rotated leadership roles
Individual accountability Mutual and individual accountability toward each other
Identical purpose for group and organization Speci�ic team vision or purpose
Performance goals set by others Performance goals set internally
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Ryan McVay/Photodisc/Thinkstock
Groupthink occurs when team members fail to think critically and rush into faulty decisions. The team often stops brainstorming and evaluating new ideas and instead hurries to build a consensus, adopt a decision, and move on.
Work within organizational boundaries Not inhibited by organizational boundaries
Individual work products Collective work products
Organized meetings and delegation Mutual feedback, open-ended discussions, and active problem solving
Source: Katzenbach, J. R., & Smith, D. K. (1993). The discipline of teams. Harvard Business Review, 71(2), 111–112. Used by permission.
Groups, on the other hand, function in much the opposite way. Groups often have strong designated leaders who have a formal relationship with followers and can use in�luence tactics based on their positions. The structure is much less �lexible and egalitarian, and the emphasis is on individual contributions, delegation, and connection to an organizational vision.
For highly complex, interdepartmental projects, however, teams may be a better �it. In these cases, working within a hierarchy can be onerous and time consuming. One employee may want input from another in a separate department, and following proper channels of communication means contacting a manager, who contacts an equivalent manager in another department, who then asks an employee—and then the response follows the same route in reverse. It would be far simpler to �latten the hierarchy (remove layers of structure) and simply work across groups in a team, especially if regular feedback is helpful.
Advantages and Disadvantages of Teams
There are a number of advantages when working within a team, as compared to working alone or in a group. Teams are often characterized as achieving high performance levels through close collaboration. This idea is called synergy—when the sum is greater than the component parts. Teamwork creates a situation where this is possible. When members collaborate, their discussions deepen the pool of knowledge available to each individual member (Lick, 2006). Team members can evaluate new proposals and �ind ways to implement them, and they can also strike down unrealistic solutions before attempting them, saving time and resources. Team members build on one another’s talents and ultimately develop a better, more comprehensive strategy. As members help each other through ideas, the team is likely to make better decisions as a unit and avoid unwanted disruptions, delays, and surprise problems.
Also, because of the egalitarian nature of teams, team members are often compelled to push one another—as well as themselves—to work toward continuous improvement and innovation. In teams, members bear an equal share in success, and members who feel responsible for each other are more likely to become motivated to perform to the best of their abilities. As team members build trust and work collaboratively, they see the team as a greater social unit that is able to meet larger goals (Batt, 2004) and feel more than monetary ful�illment from their work.
However, despite these advantages, we have already observed that teams are not appropriate for all situations. Building a team that works well together takes time, which can be counterproductive if the task or problem in question is simple. Other disadvantages can stem from the leader’s failure to set the appropriate tone when building the team. One commonly cited problem with teams is that members can sometimes feel pressured to conform to group standards of conduct and performance. A related concept is called groupthink (Janis, 1972). Groupthink occurs when team members, in their search for unanimity, fail to think critically and instead rush into faulty decisions. The team often stops brainstorming and evaluating new ideas and instead hurries to build consensus, adopt a decision, and move on. This usually happens when a majority accepts one viewpoint and the minority goes along to avoid con�lict. Groupthink becomes a serious issue when it becomes the team norm. To mitigate problems with peer pressure and groupthink, leaders need to encourage team members to raise alternate viewpoints, even if it results in dissent, and continuously create opportunities for individual team members to participate in the decision-making process (McFarland, 2007).
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There are two other issues with teams: social loa�ing and the bystander effect. Social loa�ing is the tendency of individuals to invest less effort when working as part of a team or group (Kidwell & Valentine, 2009). This situation often arises in school group projects: One student does less work than the others but receives the same grade as the rest of the group. What happens in an organization if two people complete almost all of the work and a third rarely attends meetings and contributes little to a product’s development? One method of mitigating the risk of social loa�ing is to set up performance reviews so that each team member evaluates contributions by others, in effect separating individual contributions from the group’s complete effort. Although the team must work together on a task, promotions and evaluations are conducted separately and are based in part on individual effort and performance as part of the team, so the team’s success is separated from individual rewards. The role of leadership in teams is discussed in further detail in the next section.
The bystander effect (Blair, Thompson, & Wuensch, 2005) involves a person not offering help to a victim in the physical, and many times virtual, presence of others. The “diffusion of responsibility” theory states that individuals in such situations ask themselves: “Why should I help when there’s someone else who could do it?” The presence of strangers increases the likelihood of the effect (Levine & Crowther, 2008). Tips for overcoming the bystander effect when in such situations include:
1. Make eye contact with a stranger to elicit a “we-ness” perception of that person toward the situation. 2. Take action if you’re a bystander. 3. Use your natural altruistic tendencies, assume people want to help; model altruism. 4. Don’t worry about the consequences of helping (Whitbourne, 2010).
See "Take the Lead: Leading and Managing Teams" to apply concepts.
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Take the Lead Credits
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Why do some teams work together so well, and what should leaders focus on to help their team to victory? Psychologists Eve Ash and Peter Quarry discuss the skills that can help you lead, manage, and work more effectively in teams.
Tips for Developing Teams
Critical Thinking Questions
Identify a person a job, in school or college that represented ideal team leadership skills. What did that person do well that impressed you and that helped the team excel? What speci�ic team leadership and management skills and techniques do you still need to learn and practice to be pro�icient? Explain.
8.2 Developing Teams Effective teams are built on trusting relationships and take time to develop, which is why many organizations that prioritize teamwork—such as Nordstrom and StarbucksTM—use experienced team members to open new stores and then hire new employees who can adapt and �it into an established culture. Starting a team from scratch can take a long time, and involves several stages. Different models of team development have evolved. We will illustrate one of the classic models here (Tuckman & Jensen, 1977), but recognize that others exist, such as the three-stage model devised by Ilgen, Hollenbeck, Johnson, & Jundt (2005): forming, functioning, and �inishing. During each stage, followers deal with and solve certain problems and issues before proceeding to performing. Different models offer different insights about team development. Learning to recognize these stages can be helpful for anticipating the needs a team faces in its development.
Tuckman and Jensen’s (1977) classic model is one of the most cited frameworks. The �ive stages give leaders and followers insight into the team-building process that can assist them in understanding how to help the team move through challenging moments in productive ways.
Stage 1: Forming
The �irst stage of team development is the forming stage. In this stage, team members become acquainted with each other and determine what is standard, acceptable behavior. This stage involves a great deal of uncertainty for team members, as ground rules and tasks are just beginning to be discussed. In changing, competitive environments where decisions must be made fast and competently, team members have to share responsibility and may need to assign work to themselves rather than reporting to another person.
Some of the characteristics of this stage include exploring similarities and differences with different members and experiencing and questioning �irst impressions, which often include confusion, anxiety, fear, excitement, disorientation, and issues of inclusion, leadership, and trust. It is also not uncommon for members to question whether or not they �it with each other and whether this group may have lower productivity (“Forming,” 2006). The leader must provide direction and lay out the vision, goals, and objectives as well as a road map for the team’s mission during this phase.
Stage 2: Storming
As each member’s personality becomes apparent, individuals begin to become more assertive in clarifying their own roles within the team. During the storming stage, there may be con�lict and disagreement over the perceptions of the team’s goals and objectives.
Members often use this time to debate and disagree over exactly what needs to be done. The team must eventually move past these disagreements or it will never be able to achieve a level of high performance. However, dissent is not
Making Teams Work Brilliantly
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Characteristics of the norming stage involve trust, acceptance of differences, increased collaboration, more open communication, developing relationships, and giving and receiving positive feedback.
entirely negative—for one, it counteracts peer pressure and groupthink, and teams should avoid quashing the spirit of discussion.
Characteristics of this stage include tensions over competition, disunity and unrest, autonomy versus control, and support versus competition, as members de�ine their roles and responsibilities. One of the leader’s central tasks during this stage is to coach and organize members to focus on the mission of the team while organizing work to be executed effectively. The leader must be understanding, patient, an excellent listener, and present to members to answer questions (“Forming,” 2006; Tuckman & Jensen, 1977).
Stage 3: Norming
The norming stage occurs when team unity emerges and con�lict has been resolved. As consensus develops and team roles are clari�ied, members begin to understand and accept each other. Often this is a short stage in the team’s development as it works out its culture and identity.
Characteristics of the norming stage are evolving trust, acceptance of differences, increased collaboration, more open communication, developing relationships, and giving and receiving of positive feedback. Rules of engagement have been established, the mission and goals are accepted, and members realize that communication is important to getting important work completed. Among the leader’s roles during this stage are setting an example, modeling the way, and reinforcing the values and norms of the group.
Stage 4: Performing
As the performing stage begins, the team puts a major emphasis on accomplishing its established goals. Now members are committed 100% to the team’s mission, and they prove this through frequent interaction and coordination of their efforts.
Characteristics during this stage include team members’ self- con�idence and ability to accomplish their stated goals and objectives. There is more harmony, shared participation, and cohesion generally
among members, who are also more �lexible in sharing roles and responsibilities for the good of the team.
Stage 5: Adjourning
The �inal stage of team development is the adjourning stage. This occurs only in teams that have a limited task to perform and are then separated. The emphasis of this stage is toward wrapping up and measuring the performance of the group’s �inal product. Sometimes members may have strong emotional feelings toward the ending of a team, so it is important for the leaders to monitor and focus on their team’s needs.
Characteristics of this last stage include relief, a sense of accomplishment—if the team has succeeded in accomplishing its goals—and, for some members, sadness at parting with their teammates, many of whom may have become acquaintances and good friends. Assuming the team’s goals have been achieved, it is a time to celebrate and recognize the accomplishments.
Of course, not all teams meet all the requirements of these stages. Some teams may loop back and forth between different stages—for example, storming can be repeated during norming and performing stages. These concepts are used more as a road map than as absolute directions.
Building and Developing Teams
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8.3 Leading Different Types of Teams A team structure is the interrelationship between team members that determines how various tasks, responsibilities, and authority are allocated—the hierarchical dynamics within a team (Rowe, 2004; Zaccaro & Klimoski, 2002). A team member may have direct control over determining the tasks and responsibilities of other members, or all members may essentially have equal footing. This text focuses on four team types: functional, cross-functional, self-managed, and shared responsibility.
Functional Team
The functional team is the classic building block of all teams. It works best in simple environments where tasks are either not very complex or solvable by a functional expert or experts each working separately and together. Team members with different expertise areas (e.g., marketing, production, human resources, sales, research and development) who belong to the same business unit and share a common purpose comprises a functional team, illustrated in Figure 8.2. These teams often appear as departments, such as �inance, marketing, and the like, and are also called vertical or command teams because they are led by a manager who oversees a small group of employees. The structure and leadership of these teams tends to be more hierarchical and vertical.
Figure 8.2: Four team types
The leadership command structure derives from the functional pyramid team and organization structure. The lone leader at the top of the pyramid is in charge of �inal decisions. Authority and responsibility for getting work done and goals accomplished reside with that leader. Team member responsibility and authority are limited to the speci�ic expertise area of that person’s department or work unit. Communication �lows up and down the vertical structure, rather than across departments. The functional structure is a somewhat rigid team structure that emphasizes team members’ particular expertise (and functional) areas.
Members of functional teams are asked to meet speci�ic goals that are determined by a manager. One challenge in a functional team is that leaders and members often tend to focus on their specialized areas of expertise while leaving the overall organization’s mission and goals to the leader to coordinate, effectively eliminating some of the advantages of working as part of a team. Because of this insular vision, functional teams sometimes begin to compete with each other, which can damage the organization’s larger purpose.
There is a strong rationale for the classic functional team. Speci�ic expertise and knowledge areas are required to solve a problem, and a team leader or manager can coordinate information and communication within and between departments to do so or to create opportunities. However, the use of functional team structures has declined recently for several reasons. The increasing complexity of environments and problems, issues, and opportunities requires increased coordination, communication, information sharing, and speed of decisions. Also, individual team members and teams are more geographically dispersed and require different uses of technologies and ways of coordinating information and decisions to meet organizational goals and market demands.
IBM’s 3-D Internet team was the �irst to launch a four-day “mini-jam” in 2007 bringing together 300 learning professionals from the company. The company has since been a leader in blending new technologies with old ones— instant messaging and telephony—enabling global teams to leverage IBM’s “Intraverse” to share information and speed decision making (Hamilton, 2008). The IBM commerce portfolio dedicated $24 billion in analytics, using 8,000 consultants and more than 100 SaaS (Software as a Service: a software distribution model that enables vendors and
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service providers to host applications made available to customers over the Internet) offerings to integrate IBM research, analytics, security, and cloud (“IBM newsroom,” 2015).
Cross-Functional and Virtual Teams
A cross-functional team, illustrated in Figure 8.2, is a variation or extension of the functional team. A cross-functional team comprises members brought together to perform unique tasks from various functional departments within an organization. (In the �igure, the rectangles represent the team members themselves, and the circles represent their respective departments within the organization.) These teams may be either temporary or permanent, depending on project type. As mentioned before, organizations are increasingly looking for an edge in today’s complex and dynamic competitive landscape. This has led them away from hierarchical structures toward ones that are more horizontal or �lat, in the hope that a collaborative approach will foster innovation.
Still, functional teams are necessary depending on the nature of the tasks; the skills, knowledge, and experience needed to complete the tasks; and the amount of coordination needed to complete the tasks. Members who must work and coordinate tasks across functions also need to know how functional teams operate. Functional structures (and teams) may be required for either complex or simple tasks and projects that require independent, in-depth levels of expertise and need to be completed before a product or project moves to another level of development.
The U.S. Postal Service, before the advent of many contemporary technologies, was a functionally structured organization—and still is, to some extent. However, when tasks and projects required different functional areas of expertise (e.g., research and development, production, marketing, and �inance) working together to complete a project or task, not independently, then cross-functional structures and teams were required. For example, many consumer technology companies even involve customers (and focus groups) as part of the research and development process to ensure that what the customer wants is part of the product design process.
Broad organizational goals require input and cooperation from multiple business units or functional areas. As members from these various business units come together to form teams and cross boundaries with individuals from other disciplines, they become known as cross-functional teams. These are usually formed to create nonroutine products or services to help aid an organization in accomplishing its mission or goals. Team members may also include individuals from outside the organization, such as strategic partners, suppliers, or clients. At Texas Instruments, the corrective- action and quality-improvement teams were both cross-functional, including managers, engineers, and accountants who could evaluate processes across departments. When Rubbermaid decided to develop a new product line for cars, it created a cross-functional team of designers, marketers, and engineers to interview customers in order to gain a broad understanding of their wants and concerns (Dumaine, 1990).
Today, advances in communication technology have helped the development of virtual teams: cross-functional teams whose members are geographically dispersed and work in different time zones and places and across organizational boundaries, using electronic and web technologies to communicate, make decisions, and share content. Team members no longer need to be in the same location to perform their tasks, and these cross-functional teams are now also cross- cultural. Organizations use virtual teams for customer service, high-quality /low-cost solutions, and increased speed when completing projects (Cascio & Shurygailo, 2003; Knouse, 2004; Zigurs, 2003). Virtual teams tend to be used by companies that compete globally and have operations worldwide. At the same time, many companies are increasingly using virtual teams within countries; technologies enable professionals to perform and return work products electronically.
Olanrewaju, Smaje, and Willmott (2014) argue that effective digital enterprises, and we would add virtual digitally connected teams, have seven traits. These authors state that to succeed, “management teams need to move beyond vague statements of intent and focus on ‘hard wiring’ digital into their organization’s structures, processes, systems, and incentives.” The seven traits include the following:
1. Being unreasonably aspirational in their drive to create value for the organization. For example, Net�lix built a successful online DVD rental business; their leadership envisioned a future for the industry that involved digital streaming. Their management then made a strategic bet that positioned the �irm in real-time entertainment. As the video-streaming market took off, Net�lix captured almost a third of the streaming market and had more than 40 million subscribers to video streaming by the end of 2013.
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2. Acquire capabilities and talent. This trait requires that “leadership teams must be realistic about the collective ability of their existing workforce” as they attract digital talent from other industries, because they understand that “emphasizing skills over experience when hiring new talent is vital to success, at least in the early stages of transformation.”
3. “Ring fence” and cultivate talent. This trait involves nurturing digital talent differently, offering digital teams their “own working patterns, sandbox, and tools.” Walmart established @WalmartLabs®, an “idea incubator,” that the company grew and located as an e-commerce division in Silicon Valley—far removed from the company’s Arkansas headquarters. @WalmartLabs increased the �irm’s online revenues by 30% in 2013, “outpacing Amazon’s rate of growth.”
4. Challenge everything, as did Hertz in 2007 when it deployed self-service kiosks and teams just as the airlines had done for �light check-in.
5. Be quick and data-driven, as P&G did when it created a single analytics portal, called the Decision Cockpit, that offered real-time sales data across brands, products, and regions to more than 50,000 employees globally. “The portal, which emphasizes projections over historical data, lets teams quickly identify issues, such as declining market share, and take steps to address the problems.”
6. Follow the money, as did Starbucks when they focused 35 of 100 active IT projects in 2013 on customer- or partner-facing initiatives. “One-third of these projects were devoted to improving ef�iciency and productivity away from the retail stores, and one-third focused on improving resilience and security.” The company is a leader in customer-experience innovation.
7. Be obsessed with the customer, as is the online retailer Zappos. When it doesn’t have a product in stock, it helps a customer �ind the item from a competitor. Result: 75% of its orders are from repeat customers.
However, virtual teams can and do create signi�icant leadership challenges for some companies. The leader’s tasks of facilitation, interaction, and knowledge transfer are signi�icantly more dif�icult with virtual teams. Without face-to-face interaction, members miss nonverbal signs given by the leader, which often set the tone for discussions, and cultural differences can come into play. Team members may also experience loneliness and isolation (Gajendran & Joshi, 2012). Overall, information sharing with the entire group also tends to be less in virtual teams ( Mesmer-Magnus, DeChurch, Jimenez-Rodriguez, Wildman, & Shuf�ler, 2011). Moreover, some cultures value clearly de�ined hierarchical structures, and building a cross- functional team with a �lattened structure can be a signi�icant challenge. Virtual team leaders have two primary objectives: crystal-clear communication and a strict focus on the overarching goal. Without those, it can be especially dif�icult to stay on track and maintain focused discussions around speci�ic problems in a virtual setting. Virtual teams generally require some managerial and leadership monitoring in helping members keep visible with the rest of the organization, maintaining team trust and cohesiveness, and keeping members on track with team goals (cite).
Self-Managed Teams (SMT)
A self-managed team is an autonomous team whose individual members share leadership responsibilities while holding each other mutually accountable for the team’s performance. Such teams range in size from 10 to 15 members and even larger (Erez, LePine, & Elms, 2002). Figure 8.2 illustrates the equality inherent in this type of team. Performance goals for the team are normally assigned by upper management, which usually comprises cross-functional membership in order to provide diversity and balance. At FedEx, the executive team is cross-functional, bridging the departments that manage the organization’s entire infrastructure, and the clerks are in small, self-managed teams.
Self-managed members have a high degree of autonomy, participate broadly in decision making, perform a variety of tasks, and are thus often more motivated because they are more personally invested in the team’s project and goal (Lussier & Achua, 2006); they are directly connected to the company’s vision and they know they can affect key issues for the company. Team members also share authority and responsibility and can implement change without having to wait for a long approval process. They can therefore see the immediate effects of their work and are generally more adaptable and proactive in their behavior than members of traditional teams (Jong & Ruyter, 2004).
As self-managed teams are responsible for making their own decisions, members are expected to work with minimal supervision. However, these teams are not completely independent—organizational leaders still set their overall direction and monitor their performance. Typically, self-managed teams elect a member to communicate performance back to the larger organization. Often this leadership position rotates depending on the project. Self-managed teams typically include members with various specialties and functions, access to resources (such as information, funding,
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ASSOCIATED PRESS/Matt Sayles
FedEx’s self-managed clerk teams are given access to employees across the company and if they see a problem they can immediately implement a change to the system without having to deal with corporate bureaucracy.
equipment, or supplies), and power to make decisions to solve problems, direct resources, and plan for the future (Daft, 2015). Research indicates that self- managed teams do not always perform better than those that are more traditionally structured. If self-managed team members perceive that their pay and rewards depend on teammate feedback, performance improves for the entire team (Stewart, Courtright, & Barrick, 2012). Also, when self-managed teams feel safe to speak up without being ostracized by their teammates, con�lict increased performance (Bradley, Postlehwaite, Klotz, Hamdani, & Brown, 2012).
With FedEx’s self-managed clerk teams, the clerks are given access to employees across the company, from couriers to billing techs, so if they see a problem, they are able to immediately implement a change to the system without having to deal with bureaucracy and appealing to higher level executives. Clerks are able to directly explain the problems, consequences, and proposed solutions to those affected by the change and in terms each department can relate to and understand. This ground-up approach—rather than an unexplained mandate from above—also tends to win buy-in from other employees. FedEx was able to eliminate 13% of service glitches company-wide, in large part because of the work of these teams, which were empowered to �ind and �ix systemic problems (Dumaine, 1990).
Shared-Leadership Team
A shared-leadership team is one in which every team member is held accountable for both the leadership responsibilities and the results. Self-managed teams sometimes connote teams that have little focus and perhaps a lack of control (Fenn, Dinkins, & Miller, 2000); shared leadership invokes an idea of discipline. Each member is expected to function as a leader with a stake in the outcome. In shared-leadership teams, power stems from expertise rather than a position within the organization. Members are expected to share their skills and experience with the team, especially when decisions must be made. Members of self-managed teams are accountable for their share of work products, which provides one form of external control.
In self-managed teams, the leadership identi�ies team goals and determines goal-attainment paths. The team empowers itself. Team members obtain training on managing projects, running meetings, and solving problems. With little supervision, some leadership may be required to monitor the team’s progress. Open communication is required from leadership on relating organizational goals to the team. In shared-leadership (or self-directed) teams, by contrast, the team identi�ies its goals and determines its goal-attainment paths. An environment of innovation, commitment, and motivation is created by the team. Organizational leaders may �ind it time consuming to track and verify the progress of the team toward organizational goals. Two-way communication is required between those responsible for corporate strategy and the teams. These types of teams can be effective, because they �ind and solve problems when they observe them (Lee, 2008).
Multiteam System (MTS)
A collection of interdependent teams is known as a multiteam system (MTS) (Chen, Kirkman, Kanfer, Allen, & Rosen, 2007; DeChurch & Marks, 2006). An MTS can also be subsets of component teams acting interdependently to accomplish at least one contiguous goal, “with all acting in concert toward a superordinate distal goal. Interdependence in MTSs can be in terms of inputs, process, and outputs. The inputs may include human, informational, technological, material, and �inancial resources” (O’Leary, Woolley, & Mortensen, 2012, p. 141). An example of an MTS is emergency �ire and medical teams coordinating activities and responses. As global terrorism thrives, more uses of MTSs will likely be organized and used within and across nations and regions.
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AP Images/Sara D. Davis
General Electric’s plant in Durham, North Carolina, uses production teams that build jet engines from start to �inish.
Leading and Inspiring Teams
8.4 Transforming Groups Into Effective Teams Traditional hierarchical structures are changing in favor of streamlined, �lexible, team-oriented designs, primarily due to changes in external environments such as increased competition, government regulations, or crises —including the recent global economic downturn. Companies are looking for faster, more ef�icient, less bureaucratic ways to respond to competitors, and teams often motivate employees to work together more cohesively by distributing responsibility more equally. However, not all teams are equally successful, even those that seem to work well together. Having a strong personality �it or complementary skill set is not enough. In order to be considered effective, a team must meet its performance goals and deadlines in an ef�icient manner. Scholars agree that effective teams share similar qualities.
Qualities of Effective Teams
Six of the qualities of an effective team are the following:
1. Commitment to goals, tasks, and performance. Team members are focused on a positive outcome, which means staying focused on the end result rather than on disagreements or sel�ish needs. Goals are placed ahead of individual ambitions, and when decisions are made, individual members support them, trusting that any hesitations have been heard and acknowledged. Team needs and expectations align with their output: The team meets the goals it sets.
2. Clear and ef�icient group processes. Team members understand the structure and expectations of their team, and they are able to interact with and relate to each other in ways that allow them to increase ef�iciency over time. In other words, effective teams get results quickly and become better at working together over time. They develop processes and re�ine them, working together on the team as they do on a product ( Warren, 2003). Roles and responsibilities should be clearly de�ined. Are team members expected to manage themselves? Report to a team leader? What is each team member bringing to the table?
3. Collaboration. All teams require open and honest sharing of knowledge. Team members need to trust each other and work together, even if they disagree. Team members also communicate constantly. Communication means speaking up and participating, sharing ideas, updating the team on progress, asking for help, and admitting mistakes. This is particularly important in virtual teams.
4. Competence. Team members share their expertise with the group and have a basic level of competence to offer the group. Teams are built on complementary experience, so each member �ills a particular role in the group.
5. Team member satisfaction. Team members feel that their needs are being met by the group and that the distribution of work is balanced. Their relationships are mutually supportive with a fair workload, so no one resents the work; rather, team members feel rewarded through their participation. They contribute to the team and receive support and ful�illment in return (Warren, 2003).
6. Team viability. This refers to whether team members wish to continue working together. Although a team may perform well on a given project or task, it may not wish to work together again on another task, thus requiring the creation and - development of a new team (Hackman, 1987).
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Recall a team in which you are a member now or have been in the past. Take Assessment 8.1, which indicates how well that team is functioning or functioned. After taking the assessment, see which speci�ic concepts in this chapter can improve or would have improved your team’s effectiveness.
Assessment 8.1: Team Effectiveness Questionnaire (TEQ)
Instructions
On the following questionnaire, indicate, on a scale from 1–5, how well you feel your team performs against each of the following statements: 1 = Not at all or very rarely; 2 = Occasionally; 3 = Some of the time; 4 = Usually; 5 = Very well or all the time.
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Each time you score a 4 or 5 for a statement, �ill in one square of the following grid immediately above the letter that corresponds to the letter at the end of that particular statement. (The maximum number of boxes you can �ill in for each letter is �ive.) Now, for every 1 or 2 that you gave a statement �ill in one square below the corresponding letter.
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The letters correspond to the following eight attributes of effective teams:
A—Clarify vision, set targets and boundaries
B—Empower and authorize
C—Praise and acknowledge
D—Maintain vibrant internal communication
E—Encourage divergence and innovation
F—Champion the team externally
G—Share learning and improve
H—Celebrate and exploit diversity
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Compare Your Impressions With Others in the Team.
Where are the similarities. . . and the differences? What do you think accounts for any signi�icant gaps in your perceptions?
The Team Effectiveness Questionnaire simply provides people with a mechanism for exploring and discussing aspects of behavior found to lie at the heart of effective teams. The higher the positive score, the greater the potential for effectiveness. But more importantly, from a learning perspective, the more variation in those scores between team members, the more there is to understand about why perspectives differ.
The TEQ clusters behaviors into the following eight attributes or qualities.
Clarify vision, set targets and boundaries (A). Members of effective teams (hi TEQ) are clear about what they have to do, where their individual responsibilities lie and how what they do is contributing to the overall (organizational) picture. They are likely to be led by someone who is able to clarify roles, give clear direction, and create a sense of purpose. As demands change, roles and boundaries are reviewed and adjusted. Both woods and trees can be seen by everyone.
Empower and authorize (B). In addition to knowing what to do, members of effective teams also have the power to do what they need to do. They are trusted to act professionally and authorized to do so. Authority and decision-making capability is delegated to the level at which it is needed. Seeking authorization from higher up is kept to a responsible minimum. People outside the team are encouraged to deal with the appropriate team member, regardless of grade.
Praise and acknowledge (C). People’s speci�ic contributions are acknowledged and praise is given for both achievements and effort. Leaders and colleagues understand the importance of acknowledging particular behavior rather than offering generic praise. (“You have really put some effort into building a relationship with that department. . . . I know it has been hard for you.) “Thanks” is far more effective than, “well done.” People feel valued for who they are and what they contribute.
Maintain vibrant internal communication (D). Hi TEQ teams know what to communicate and how best to do it. They do not rely on formal occasions (reviews, meetings, summit conferences) but get in touch in whatever way feels appropriate (given the importance and the urgency of the message). People know what others need to know and actively pass information around. They prefer face-to-face contact, however short, and tend not to hide behind emails or letters when dif�icult or emotionally charged messages are required. Short, frequent, and informal contact is routine.
Encourage divergence and innovation (E). The effective team is encouraged to be playful and creative. New ideas are welcomed and actively sought out, and problems are often seen as opportunities. Experiments are encouraged. Old systems and procedures are valued as long as they are still effective, and innovation is not seen as a threat. People feel able to ask “naıv̈e” questions. (“Why do we still do it that way?” or “Do we still need to do this?”) At any one time, at least one person within the team is thinking about “how we might do something better.”
Champion the team externally (F). Effective teams know that others outside the team hear about their successes. Team members are openly upbeat about the team and the way it works. There is an obvious respect for each other, and people outside the team are aware of it. Leaders are strong advocates of the team externally, and are seen to demonstrate their con�idence and trust. They are effective at negotiating for the resources the team needs to do its job effectively.
Share learning and improve (G). Hi TEQ teams are constantly improving their skills, their processes, and their performance. People are curious; they experiment (see E above) and are keen to learn. Time is not wasted on blame or recrimination. Members are clear about the difference between organizationally damaging mistakes— for which there are clear sanctions—and day-to-day errors, which can be used as a basis for improvement. People share their knowledge and skills willingly.
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Celebrate and exploit diversity (H). Effective teams seek out different opinions and perspectives in order to reach more robust or innovative solutions. Hi TEQ teams enjoy diversity and are not afraid of exploring differences. They have the skills to build dialogue, confront stale assumptions, and achieve mutually respectful understanding, while still disagreeing. Constructive and creative disagreement is seen as more productive than the effort to achieve consensus at any cost.
Source: From Useful Resources at http://www.timkemp.co.uk. Used by permission of Tim Kemp.
Developing Habits of Highly Effective Teams
The habits of highly effective leaders can be seen in the multiple steps it takes to create an effective team. Leadership scholars Kohn and O’Connell (2007) structured these steps, which they also called “developing habits,” into a pyramid (see Figure 8.3). Teams are �irst built on a foundation of strong relationships, empathy, and an awareness that the group must come before the individual. Once these new habits of awareness and relationship are in place, teams can develop processes to work together. As team members work, they reinforce their relationships and re�ine processes, and in doing so, build trust in the team and each other. Ultimately, team members are given roles and responsibilities. Although team leaders play a critical role in team development, we will see that it is also incumbent upon team members to practice these habits.
Figure 8.3: Six habits of highly effective teams
6 Habits of Highly Effective Teams by Kohn, Stephen E and O’Connell, Vincent D. Copyright © 2007. Reproduced with permission of Career Press.
First Tier: Establishing Foundation-Layer Team Caring Skills The �irst tier asks team members to begin thinking of themselves in relation to the group and the group’s goals, rather than focusing on individual needs and goals. This �irst tier focuses on the internal and external team relationships, the team’s identity, and the team’s practice of empathy. In a 2011 article about teamwork, magazine writer Chuck Salter
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ASSOCIATED PRESS/Tom DiPace
ASSOCIATED PRESS/Lori Shepler
A team is self-aware when it has a strong identity. When Chris Bosh, Dwyane Wade, and LeBron James started playing together for the Miami Heat they suffered losses and had to overcome adversity on the court. Under duress, the team found its identity and won two NBA titles in four years together. LeBron James has since transferred his leadership skills back to the Cleveland Cavaliers where they went back to the NBA �inals in his �irst year back.
used the Miami Heat, a team in the National Basketball Association, as an example of what can happen when individual egos are given up for the good of the group. In 2010, the basketball team recruited three superstars to play with each other: LeBron James, Chris Bosh, and Dwyane Wade—all lead scorers on their previous teams. It was a big bet. As Salter wrote, “High-priced talent doesn’t ensure success. . . . Miami is banking on the fact that James, Wade, and Bosh are buddies.” The ideal situation for the Heat, Salter stated then would be that the three “start with sacri�ice” and trust one another. The bet paid off. In their time together the Heat and their Big 3 went to the �inals 4 consecutive years and won the championship twice. Now James is taking his leadership and knowledge to Cleveland, saying in his �irst season that he’s willing to come off the bench if it’s for the good of the team. Cleveland is bound for a high seed in the playoffs after not making the postseason for years” (McMenamin, 2015).
Habit 1: Strengthening Emotional Capacity to Improve Team Relationships Within a team, three types of relationships matter: Members need to relate well to (1) each other with regard to their purpose and goal; (2) the team as a whole, both understanding and accepting the team’s identity; and (3) external groups, from stakeholders to clients.
When Rubbermaid employees began to design components for cars, their teams had a speci�ic goal: to understand the customer. Team members from engineering, marketing, and design had different questions for clients depending on their �ield. A marketer might ask about other products customers had seen from competitors, note positive and negative language, and try to get a sense of how these products were described and which phrases stuck. An engineer might ask about materials and functionality while a designer researched experience. Team members must present a uni�ied front to clients and work together to combine disparate information and expertise into concrete product proposals. This work was based on their acceptance and understanding of the team’s goal and establishing relationships according to that purpose.
Habit 2: Expanding Team Self-Awareness A team is self-aware when it has a strong team identity—the team understands who it is and what it stands for: its shared mission, values, competencies, and strengths. Team identity is developed through both conversation and practice as team leaders and members understand what differentiates their team from others and de�ine how they interact with each other and with external groups.
Identity can come through adversity. With the Miami Heat, “adversity” is an asset. Salter noted: “The real bonding didn’t occur until the Heat Troops began to shed blood on the battle�ield—to lose, and lose badly” (2011). After the team suffered a “humiliating defeat” in their �irst game and “blundered through the next few weeks,” the three stars and their teammates held a players-only meeting and talked it out. Salter wrote that “guys were telling each other to stop playing afraid. . . . Under duress, Miami found its identity” (Salter, 2011). The team went on to win 21 of the next 22 games.
Habit 3: Practicing Empathy and Respectfulness As team members develop their relationships with each other, the team as a whole, and external stakeholders and clients, they also deepen their empathy, or their ability to share and understand one another’s feelings. In effective teams, members learn to pay attention to the emotions of others by allowing silence, gauging interactions, and responding to unspoken cues. In order for leaders and followers to succeed, all parties must realize that they have an
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equal responsibility to the needs of the others. Leaders set the tone, and their goal is to foster a relationship that is honest, engaging, forward thinking, and cooperative. When leaders treat their team members as equals, each individual is more likely to add signi�icant contributions to a team. In turn, followers should feel that their leaders are worthy of their trust, planning ahead for the future, inspiring to be around, and capable and valuable to the organization or team.
The grocery store chain Whole Foods Market® uses teams to manage stores and departments. The purpose of the store-level teams is to exchange experiences, share problems, and come up with solutions to make each store run more smoothly. When one store, faced with constant turnover in a management position, hired the fourth manager in two years, she immediately set the tone and showed that she empathized with her new team by encouraging members to speak up and tell her about the place. She had industry experience that she could share, but she wanted to listen to them �irst. By listening, this new manager could understand the existing culture before establishing her role in it. She also demonstrated her approachability and let employees raise problems and work out solutions on their own without imposing her opinions from the outset (Fishman, 1996). This had multiple bene�its: First, employees bought into the solutions because they had proposed them, and second, she fostered a culture of both empathy and problem solving.
Second Tier: Applying Caring Skills to Team Processes In the second tier of developing an effective team, the foundational habits have already been developed. Team members have formed relationships with each other and are aware of their interactions, so they can begin to create team culture and processes. This would likely happen during the norming stage of team development discussed earlier. Whole Foods teams keep caring alive outside their stores and store hours frequently by doing volunteer stints for organizations like the Land Conservancy of Southern Chester County and the Chester County Food Bank in Wilmington, Delaware. Known as Ministry of Caring, store managers and teams participate (Shea, 2015).
Habit 4: Establishing and Regulating Team Norms As discussed earlier, team leaders are primarily responsible for setting up norms and encouraging systems of communication, time management, and relationship management to emerge. These habits are informed by previous experience in teams but are also speci�ic to the new forming team. Regulating these norms must be a continuous process, and team members must play a part here so the team can continue to function as a unit. Creating these systems both reinforces relationships and keeps the team on the same page, moving toward a shared goal.
For teams that form and disband for short-term projects, being able to establish norms quickly at the outset becomes key. The corrective-action teams at the Texas Instruments plant disband immediately after solving short-term problems, meaning teams are constantly made, deployed, and dissolved. An engineer might be part of multiple corrective action teams, but each will have its own team norms depending on task, leader, and other members. Past experience can provide alternate approaches to processes, but in the end, the immediate team �inds and re�ines effective ways of working together.
Habit 5: Thinking Laterally The second half of the process tier involves developing new habits of mind. Instead of traditional, sequential, analytical thinking, an effective team employs “lateral thinking,” a phrase coined by Edward de Bono (1990). The purpose of lateral thinking is to be provocative and innovative, breaking free of traditional methods.
In de Bono’s description of lateral thinking, he proposes six “hats” or approaches to brainstorming. Colored hats make this process concrete, so team members can picture stepping into a new mind-set each time they switch approaches.
Wearing their �irst hat, team members �ind facts without attempting to interpret or prioritize them. The goal of this approach is to free information from judgment so that team members can evaluate it without preconceptions. Second, team members assess their emotional responses to the issues at hand. This step is the opposite of the �irst step, focusing solely on intuition. Do they have a gut response telling them to focus on some aspect of the problem or the data? Third, team members evaluate why an idea may not work. In this step, they are invited to express dissent and to �ind the limits of an idea through rigorous testing. Fourth, team members look for positives in an idea. Why might this idea work? What are the potential bene�its? They are then invited to think outside of the box and to brainstorm alternatives. Is the proposed solution the only one? What are other possibilities? The �inal aspect of lateral thinking is
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organization. Here the pieces come together through discussion into a plan that is executed. Team members have examined the facts and their intuition, tested positives and negatives, and explored alternatives. They have come up with a rigorously tested proposal that they need to write up and implement.
Lateral thinking has the potential to break down barriers that may exist within a team. It �lattens hierarchy and levels the playing �ield among participants, demanding that each team member participate in every step of the process, from questioning to supporting an idea. The discussion veers away from power and focuses on �inding and evaluating solutions. Teams become more effective because they have a concrete approach to understanding a problem and potential solutions, examining every side of the issue together.
Third Tier: Building Team Trust The third tier involves a single, sixth habit, in which team members learn to trust their own abilities and the abilities of others—in effect establishing trust in the team itself.
Habit 6: Entrusting Team Members With Appropriate Roles In the �inal step of developing an effective team, clearly de�ined roles and responsibilities are distributed to members. This can only happen once the team understands its mission and goals; documenting and sharing roles can help team members complete tasks and coordinate with each other, using processes developed in the previous tier. Because teams share leadership, responsibilities go beyond simple job descriptions. A team designer will of course design the product but may also have strong project management skills and be able to set benchmarks and track the group’s progress, while the team’s engineer may have a talent for capturing key points in meetings and may send follow-up notes to team members to make sure everyone is on the same page. Leadership roles may rotate during the stages of the team’s work and processes may continue to evolve. As they do, members of an effective team will adapt to changing roles and responsibilities.
As responsibilities are assigned according to individual strengths, team members build con�idence and trust in their abilities and in the team as a unit. In an effective team, members are con�ident in their assignments and trust that all tasks will be executed competently. As team members continue to work together effectively, trust grows, creating a positive feedback loop so that accomplishments and trust reinforce each other. Team trust develops as team members and the identity of the team evolve. During a team’s forming stage, members have a “seed” of trust that needs to develop, along with their knowledge and the team’s mission, direction, goals, and emerging culture. This trust has more time and opportunity to develop in the storming stage if the members assume their roles and share expertise and leadership responsibilities. As expectations are shaped, communication �lows openly, and work tasks are met according to plan, more trust ensues going into the norming and performing stages. See “Take the Lead: Transforming Groups Into Effective Teams.”
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Take the Lead Credits
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8.5 Preventing and Managing Con�lict in Teams Building an effective team can be challenging because of the expectations each member brings, along with a potentially wide range of personalities, mental models, and perceptions of what the team should accomplish. As noted earlier, social loa�ing and the bystander effect can impede team effectiveness. In order for individuals within a team to begin to work together, leaders must address the issues and fears that members face. Often, faulty leadership practices are the primary reason that teams do not succeed (Stewart & Manz, 1995). Patrick Lencioni (2002) developed what he calls “the �ive dysfunctions of a team,” which delineate potential problem areas that team members may face.
Absence of Trust
Trust is essential to an effective team, and it requires both willingness on the part of team members to be vulnerable and belief that this vulnerability will not be used against them. Part of the purpose of creating a team is to combine a range of skills and knowledge, meaning team members will have some areas where they are experts and others where they may be novices, which is a vulnerable position. It is important to note that trust at the team level is, in part, a re�lection of the larger vision, mission, stated values, and culture, as well as a credible strategy of the larger organization.
Lack of trust is one primary area of dysfunction within a team. An insecure individual may insist on always being right by not letting others challenge an assumption or proposed solution. This undermines a team’s unity, putting an individual’s interests ahead of the team’s shared goal. Trust building takes time, requiring shared experiences and a positive feedback loop in which vulnerabilities are shared and respected. Conducting trust-building exercises can help accelerate this process, but the best way for a leader or shared-leadership team to foster a culture of trust is by modeling it.
In early meetings, a leader can show vulnerability by revealing lack of knowledge in an area and calling on team members to share their expertise to �ill gaps. As team members share their own vulnerabilities, the leader’s role shifts to modeling how the team should respond, by not punishing the action. In this process, it is particularly important for leaders to be honest in their responses so that expectations are clear and trust becomes a team norm.
Fear of Con�lict
Successful teams debate to �ind solutions to problems they may face, and con�lict can lead to a more rigorous outcome. During these conversations, team members trust that they will not face resentment or reprisal afterward for any disagreements and that debate is a constructive step toward a shared goal.
In a dysfunctional team, con�lict does not take place in discussion, because members either are afraid to challenge each other or fear repercussions. Fear of con�lict means team members will not push each other to think more deeply, so oftentimes proposed solutions skim the surface of the problem. Leaders can serve as models of desired team behavior by refraining from jumping in and providing an immediate resolution to a debate, letting the conversation evolve and allowing team members to sort the issues out on their own. Leaders can also step in to aim discussions in positive directions, focusing on issues rather than individuals, so team members understand that ideas—not abilities—are under debate. In a healthy team, con�lict leads to faster and more complete solutions, and members leave discussions energized by what they’ve accomplished and ready to tackle the next problem.
Beyond modeling constructive behaviors, leaders can explicitly describe the purpose and desired outcome of a debate, essentially setting ground rules and encouraging honest participation. If team members do not recognize con�lict as part of the team’s process, they will most likely avoid it, even if they disagree with a solution. Leaders can actively create a space in which constructive dissent is both encouraged and practiced.
Lack of Commitment
Team members are committed when they are invested in the outcome and clearly understand how the steps they are taking lead to that result. Two leading factors in lack of commitment are a need for consensus and a desire for certainty.
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Dysfunctional team members tolerate unproductive behavior in order to avoid con�lict. In the long run, avoiding accountability leads to dissension and ineffectiveness within the team.
In order to make a decision, some teams err on the side of unanimity, believing that buy-in can only happen if everyone agrees on the proposed solution. An effective team can quickly reach a decision and have buy-in even without complete consensus. This happens through trust and understanding that even if the solution is not what an individual team member may have chosen, all opinions were heard and considered in the decision-making process.
Teams also get stuck when members want to be absolutely certain that their decisions will result in the desired outcomes. This kind of risk aversion can cripple a team. An effective team commits to a decision, even if the outcome is not assured, and considers alternative paths as needed. Teams are formed for action, and a desire for certainty can lead to endless waf�ling.
Leaders can mitigate a lack of commitment through simple methods, for example, reiterating important decisions at the end of a meeting to ensure that team members are still on the same page. This allows anyone with lingering concerns to speak up, and if all concerns have been addressed, they can commit and move on. Strict deadlines also ensure that decisions are made in a timely manner. Teams that struggle with certainty look at worst-case scenarios so that they understand the consequences of both a wrong action and lack of action. Coming up with a back-up plan also provides some level of certainty. Finally, leaders must model decisiveness so that teams stick to schedules and do not spend too much time seeking consensus or certainty.
Avoidance of Accountability
Although teams are based on the assumption that all members will commit and fully participate in reaching goals, a team member may act in counterproductive ways, either in work or in interactions with others. In a dysfunctional team, members and the leader tolerate unproductive behavior in order to avoid con�lict. In the long run, avoiding accountability leads to dissension and ineffectiveness within the team. Team norms are one way of in�luencing accountability. If a majority of team members show their dedication and productivity, peer pressure encourages outliers to conform for fear of disappointing the rest of the team. No one wants to be the weak link. Leaders can also hold members accountable by compiling and distributing lists of goals and assignments, publicly showing the division of responsibilities and the way each step contributes to a larger goal, and making it obvious if a team member fails to complete a task. Setting team rewards instead of individual ones can also reinforce accountability by making team members more likely to speak up if one person is contributing less. In a worst-case scenario, a leader can intercede to make sure that there are no divisions within the team. Leaders should attempt to ensure that team members understand that they are sharing responsibility, not trying to create a culture of consensus.
In a team such as the ones formed at the GE plant, each member made a unique contribution. In a traditional plant, 15 people might work on one part of the manufacturing process while another group of 10 completes the next step. With each team producing one engine from beginning to end, the roles and responsibilities are clear, which encourages accountability. There are severe consequences of jet- engine failure, so the stakes are high, resulting in multiple layers of accountability: to the team, to GE, and to future pilots.
Inattention to Results
Teams are formed to meet a speci�ic task, and a dysfunctional team loses sight of the group’s goals. For some members, simply being on a team is enough. They enjoy the experience of working in a group or the prestige of being assigned to a special team. Others are more concerned with attaining personal ambitions and continue to focus on individual rather than team goals. In order to keep the focus on the bigger picture, leaders should make the results clear and only reward behavior that works toward achieving the team’s goal. They can do this through both having the team make a public commitment to attaining the goal and tying team rewards to results.
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It is particularly important for the team leader to set the tone when it comes to meeting goals. If the leader appears to focus on anything other than the team’s stated purpose, followers will do the same. Instead, leaders should help direct the team toward group goals and use positive reinforcement by recognizing team member contributions.
Transforming a group into a team or creating a team from scratch involves developing culture and acting as a model for follower behavior. Trust also plays a critical role in team building. Leaders can apply similar skills and methods to large- scale organizational changes. As with team building, change involves a multistep process that leaders can understand and guide followers through while fostering openness and trust among employees.
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Summary & Resources
Chapter Summary Leadership as persons, processes, and systems applies to teams as well as other dimensions in the text.
Building a team and supporting it through its life cycle requires three foundational elements: trust, shared purpose, and leadership—sometimes shared, other times appointed. Team leadership shares a counterintuitive task: to give up some authority in order to empower and motivate followers to action. With the current rate of environmental change, organizations need to continuously evolve, meaning that followers must be adaptable.
Earlier we discussed adaptable versus nonadaptable cultures; the same is true for individual leaders. Leaders, for example, who are more production oriented than consideration oriented (see Chapter 1) may be less receptive to change and to followers’ needs. Such leaders may also not have high emotional intelligence, which may affect their ability or interest with regard to hearing followers’ needs and innovative ideas. Instead of simply providing instructions, leaders must provide opportunities and support for followers to propose creative solutions.
Leaders must understand the different types of teams as well as strategies for leading those teams. Having an understanding of how teams form and develop, as well as how highly effective teams function is also critical for leaders. Again, caring and trust underlie much of what goes into strong team building.
Research indicates that effective teams tend, in general, to be smaller in size; and, when and if teams grow too large, leaders and managers would best consider subdividing them if possible. Selecting individuals who �it with a team’s mission, purpose, and goals and who have the necessary skills and abilities should also have compatible personality characteristics. Of course, talent that can help a company innovate and increase productivity is also a major consideration.
Finally, debate and con�lict will invariably arise in all teams, even the most productive ones, and so leaders must have a strong grasp of how to effectively manage con�lict when it does arise. It is just as important for leaders to know the roots of con�lict as it is for them to know strategies to resolve it when it occurs.
After reading this chapter, consider your past and present experiences with teams. In what ways are you now ready to try leadership and management responsibilities in a team? What developmental activities and experience do you need to increase your effectiveness?
Web Resources How Good Are You and Your Team at Teamwork and Team Building?
Printable version: https://www.mindtools.com/ (https://www.mindtools.com/)
Critical Thinking Questions 1. Describe an experience you had in a job or educational institution that resembled a “group.” Then describe
another experience of working in a “team.” Which experience did you enjoy most and least, and why? 2. Brie�ly describe the types of con�licts one might expect to experience in each of the �ive stages of a group’s
development. 3. Using concepts from this chapter, explain speci�ic ways that a group could become a team. 4. If you were assigned to work a year in one of the following types of teams and had to choose only one, which
would it be and why? (a) functional team, (b) cross- functional team, (c) self-managed team, (d) shared- leadership team, and (e) multiteam systems (MTSs).
5. Using concepts from this chapter brie�ly describe the pros and cons in working in each of the �ive types of teams in question 4.
6. Describe the challenges and advantages of leading and managing virtual teams in an organization. In what ways would you excel and in what ways would you have dif�iculties in leading a virtual team? Explain.
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7. Using Section 8.2 of this chapter, which of the 6 habits of highly effective teams would you �ind easy, then dif�icult, to lead and develop? Explain.
Key Terms
adjourning stage This occurs only in teams that have a limited task to perform and are then separated.
bystander effect Involves a person not offering help to a victim in the physical, and many times virtual, presence of others.
communication process The �low of information in an organization. An effective communication process involves senders and receivers connecting with each other’s intended and accurate messages and meanings.
cross-functional team Comprises members brought together to perform unique tasks from various functional departments within an organization.
forming stage The �irst stage of team development, which includes exploring similarities and differences and experiencing and questioning �irst impressions of members in search of each member’s �it with each other in the new team.
functional team A team composed of members with different expertise areas (e.g., marketing, production, human resources, sales, and research and development) who belong to the same business unit and share a common purpose.
groupthink Occurs when team members, in their search for unanimity, fail to think critically and instead rush into faulty decisions.
multiteam system (MTS) A collection of interdependent teams that can also be subsets of component teams acting interdependently to accomplish at least one contiguous, superordinate goal. Interdependence in an MTS can involve inputs, processes, and outputs.
norming stage The third stage of a group’s development in which con�lict and problems from the previous storming stage are resolved, common interests are shared, and bonding occurs, which increases harmony and helps form the group’s identify.
performing stage The fourth stage of team development, in which the team terminates a project or mission, says goodbye to each other, and celebrates—if the team was successful—goal attainment.
self-managed team (SMT) An autonomous team whose individual members share leadership responsibilities while holding each other mutually accountable for the team’s performance, based on organizational goals. This type of team membership balances diversity and accountability.
shared-leadership team One in which every team member is held accountable for both the leadership responsibilities and the results.
social loa�ing The tendency of individuals to invest less effort when working as part of a team or group.
social skills Skills facilitating interaction and communication.
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storming stage The second stage of team development, in which members compete and struggle to de�ine their roles and responsibilities during the process of becoming a team. This is a natural process through which trust and cohesion begin to develop.
synergy When the sum is greater than the component parts.
team An organized group of several members who share a common goal, work interdependently, and coordinate efforts to accomplish desired objectives.
team leadership capacity The distribution of leadership responsibilities; capacity refers to the potential for such leadership.
team structure The interrelationship between team members that determines how various tasks, responsibilities, and authority are allocated—the hierarchical dynamics within a team.
virtual team A team comprised of members who are geographically dispersed and work in different time zones and places and across organizational boundaries, using electronic and web technologies to communicate, make decisions, and share content.
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9 Leadership Strategy
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Learning Outcomes
After reading this chapter, you should be able to:
1. Explain the importance of corporate theory and organizational strategy.
2. De�ine strategic leadership and its major components.
3. Explain the role of leaders, vision, mission, and values in the strategy creation process.
4. Describe how the 7-S model and the four frames of reference assist leaders in strategy implementation.
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ASSOCIATED PRESS/Jae C. Hong
Bob Iger was the protector and chief strategist of Walt’s original vision of the �irm.
Walt Disney’s theory of value creation in entertainment was embodied in his vision of the company depicted in his 1957 hand-drawn map listing key company assets and competitive capability combinations (Zenger, 2013). He wanted to bring the world innovative, family-friendly entertainment using a multiplatform approach. Fifteen years after his death in 1966 and into the late 1970s, however, his vision of the company was falling apart. Corporate raiders in 1984 tried a hostile takeover to sell off Disney’s assets including the theme park, �ilm library, and brand. Michael Eisner helped reinvigorate Disney’s vision, moving the company’s market capitalization from $1.9 billion in 1984 to $28 billion in 1994. But his leadership style and strategies ultimately didn’t live up to Disney’s original vision of the �irm.
When Bob Iger became Disney’s CEO in 2005, the company’s growth had been stagnating for several years. Iger’s predecessor, Michael Eisner, had an autocratic, demanding style that worked well for the company early on, but later hindered the board’s governance process, deal making with other companies, and overall company growth (“A Full- Time Occupation,” 2004). Iger strategically refocused the �irm to innovate by decentralizing decision making—allowing decisions to fall to multiple people instead of just one person. He reoriented the company’s 150,000 employees around its roster of franchises, selecting and mobilizing expertise around characters, movies, and TV shows that could be replicated in consumer products. He accelerated acquisitions, buying Pixar, and launched new products, including a Tinkerbell line and TV programming sold through iTunes (Grover, 2007).
“Our brand is so powerful because of our heritage,” Iger said. “But you’ve got to innovate, and not just in terms of what is new today but what will be new far into the future” (Barnes, 2010). Building off of Walt’s original vision, he phrased the company’s mission this way: “to develop the most creative, innovative and pro�itable entertainment experiences and related products in the world.”
Iger has been the protector and chief strategist of Walt’s original vision of the �irm. He must keep the company focused on a long-term vision while watching over present-day operations, moving Disney into the future while preserving the best of its legacy. Iger’s term with Disney has seen the company’s stock value climb 23% in �iscal 2010, compared with a 12% gain for the S&P; the company’s market cap has since grown to $243.78 billion as of April 24, 2019 (ycharts, 2019).
In the previous two chapters, we examined two different leadership skills: communication and leading teams. In this chapter, we focus on organizational and leadership strategy. Recent studies on strategy and leadership argue for creative and innovative thinking; agile and �lexible execution, especially in a globalizing world that is hypercompetitive and digitally connected (Iansiti & Lakhani, 2014;
McGrath, 2013). Strategic thinking and implementation require not only thinking outside the box, but also anticipating, - forecasting, and analyzing opportunities and threats that haven’t but may very well occur (Daewoo, Chinta, Lee, Turner, & Kilbourne, 2011). When leaders and their teams select a strategy, they must locate and mobilize the right talent and expertise to plan, communicate, and execute their course of action (Kim & Mauborgne, 2014; Picken, Liang, Achidi Ndofor, & Priem, 2010).
Effective strategic leadership depends on a number of factors discussed throughout this text; it is still persons and teams whose processes are embedded in the organization’s systems that interact with both internal and external organizational environments and stakeholders to bring about desired results. As McGrath (2013) noted, “One thing about strategy hasn’t changed: It still requires tough choices about what to do and, even more important, what not to do. . . . So de�ining where you want to compete, how you intend to win, and how you are going to move from advantage to advantage is critical” (p. 70).
Leaders must establish the right strategy for their organization and then secure support from followers and other stakeholders who help realize the strategy (vendors, suppliers, interest groups, media, and customers). Implementing, sustaining, and even changing a strategy requires power and in�luence, which come with their own set of ethical issues. As always, consider your own leadership and leadership potential as you read. Assessments are available to help you discover your own sources of visioning, leadership, and power.
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9.1 The Context and Process of Strategic Leadership: Corporate Theory and Organizational Strategy
“A leader’s most vexing strategic challenge is not how to obtain or sustain competitive advantage—which has been the �ield of strategy’s primary focus—but rather, how to keep �inding new, unexpected ways to create value” (Zenger, 2013, p. 74). This holistic approach to understand strategy requires, according to Zenger, developing a �irm’s “corporate theory”—that is, a theory that explains “how a �irm can create value by combining the company’s unique resources and capabilities with other assets” (p. 74). The particular theory of each company reveals how it can continue to create value.
Corporate Theory
Based on Zenger’s (2013) research into a number of highly successful companies, the practice of such leaders as Steve Jobs, Walt Disney, and others �irst developing a theory of their �irms’ purpose and value creation capabilities involves leaders using available knowledge and prior experiences to develop a model of the landscape and then try to anticipate where to �ind value in that model. During this process, leaders start to form a vision of the company’s capabilities and value extensions. Zenger calls this map, “Walt Disney’s theory of value creation in entertainment” or Disney’s “corporate theory” of how the company would work. The map identi�ied patterns of key assets and capability combinations that grew out of Disney’s theory, which did in fact evolve but has not fundamentally changed over time.
How can someone tell if an organization’s theory works? Zenger said the answer lies in examining the three “sights” of the theory: Foresight, Insight, and Cross-sight. Foresight identi�ies beliefs and expectations of how a �irm’s industry, customer preferences, relevant technologies, and competitor actions will evolve. Disney’s foresight was that “family- friendly visual fantasy worlds had vast appeal” (Zenger, 2013, p. 74). This process is similar to scanning the issues and opportunities in an environment, which we later discuss. Insight involves discerning the uniqueness of an organization’s assets and activities. Some of Disney’s original insights included the creation of his fantasy characters that were automated. Cross-sight involves identifying how different company assets are complementary and how these can be combined with others to create value.
Disney saw and operationalized the interconnections of his �irm’s assets and capabilities. Those later strategies that remained true to Disney’s theory of his �irm continued to evolve and succeed in changing marketplaces. It was only when some elements of later leaders’ personalities and styles, or their processes (communications, ways of visioning) and resultant systems (visions, strategies, organizational cultures and structures) strayed from Disney’s theory of the �irm did trouble ensue.
Steve Jobs, like Walt Disney, also developed a theory of Apple® from the outset. His foresight was evidenced in his vision of how customers’ tastes would evolve to use individual computers and then devices, like the then Sony Walkman. He believed in the aesthetics and practicality of devices that would be consumer friendly and attractive (Zenger, 2013). His insight about the capability and value creation of product design was partly a re�lection of his personality: “Jobs was a self-proclaimed artist, obsessed with color, �inish, and shape; but he transferred this obsession to the technology as well” (Zenger, 2013, p. 77). His cross-sight was seeing and applying graphical user interface (GUI) technology from Xerox to personal computers in the form of windows, menus, and icons—culminating in the Macintosh computer. Founders like Disney and Jobs had theories of their companies that required new strategies to survive and thrive, but elements of their original visions endured. Even though Jobs was ousted from Apple in 1985, he returned in 1996 to revive and extend Apple’s original vision into new product devices and designs.
Not all founders’ theories and visions of their companies maintain their original or extended value; for example AT&T is racing to reinvent itself as the telecommunications industry moves into a digital future. Many companies also have no theory grounding their assets or capabilities—that is, they have no organizational strategy.
Organizational Strategy
Organizational strategy is “the sum of the actions a company intends to take to achieve long-term goals” (Johnson, 2015). Strategies also answer a key question,
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Seneca famously expressed that if a person does not know toward which port she or he is steering, no wind is favorable.
How can a company assemble all the ingredients of true innovation and achieve marketplace success? Using Google as an example, this video clip identi�ies some of the key issues and themes from strategy design through implementation. Google leader Nikesh Arora and former Southwest Airlines CEO Herb Kelleher discuss �inding a balance between structure and �lexibility.
Structure and Flexibility: Finding the Right Balance
Critical Thinking Questions
“How do we create value?” Michael Porter (1996), strategy guru at Harvard, said “The essence of strategy is choosing to perform activities differently than rivals do” (Porter, 1996). Strategies provide direction for organizations. The Roman philosopher Seneca said that if a person does not know toward which port she or he is steering, no wind is favorable. Strategies are needed by boards of directors (and trustees) to ensure that organizational leaders and managers are carrying out their responsibilities of providing direction to an organization for its shareholders and stakeholders. Strategies are also needed by employees for direction and guidance in their work and motivation.
Three types and levels of strategy for larger organizations are corporate, business, and functional strategies (Beard & Dess, 1981; Bryman & Bell, 2015; Robbins & Coulter, 2012). Corporate strategy involves an entire company and address the question of what business(es) a company should or desires to be in. Corporate strategy determines the direction that the organization is going and the roles that each business unit in the organization plans in pursuing that direction. Business strategy maps back to the corporate strategy and determines how an organization should compete in its business(es). For larger �irms, each business will have its own strategy to deal with products and services. Smaller businesses deal with less complex business strategies. Functional strategy overlaps with and extends the business strategy to functional departments like research and development, marketing, sales, manufacturing, human resources, and �inance. All strategies extend and relate to the corporate level strategy.
Strategies are the �irst step before developing organizations’ business models (i.e., how organizations make money; or, the designs for the successful operation of organizations that include sources of revenue, customers, products/services, and �inancing). If strategies address the question of how value is created, business models address the question, how does strategy translate into value? Following the business model, key performance indicators, or metrics, can be identi�ied to address the question of how we measure our performance. Then corporations de�ine risk management policies and procedures that address the question, What can go wrong and what do we do? (Larcker, 2011).
Developing strategy is a process, not an event. Although the talent, efforts, and styles of individual founders and CEOs are important in de�ining, overseeing, and implementing organizational strategies—as the chapter opening scenario about Disney shows—the input of senior leadership teams and others in an organization is also necessary in helping tweak, adjust, and rede�ine strategies, especially innovative strategies in turbulent, highly competitive environments. Pisano (2015) said that the most senior leaders of the organization guide the strategy process, especially for innovation.
Innovation cuts across just about every function. Only senior leaders can orchestrate such a complex system. They must take prime responsibility for the processes, structures, talent, and behaviors that shape how an organization
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How does Google's strategy for the company work to achieve stated goals and targets? Explain. What role(s) does this leader have in making the strategy work? Explain using concepts from the text.
searches for innovation opportunities, synthesizes ideas into concepts and product designs, and selects what to do.
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9.2 Strategic Leadership De�ined A strategy is also de�ined as a comprehensive plan for how an organization ful�ills its purpose and realizes its vision (Hambrick & Fredrickson, 2001). Thus, strategic leadership involves leading with a theory of the �irm, as discussed previously, and a plan: imagining and anticipating the future, working with others to realize it, and remaining open- minded to changing course as needed (Barnett, Greve, & Park, 1994; Miller, 2002). This type of leadership requires constant assessment and evaluation, of both the external environment and internal resources, and the ability to balance the two to constantly advance toward the organization’s goals. Part of the mission of a strategic leader is to stay a step ahead of the competition through innovative thinking and decision making (Hoskisson, Hitt, Ireland, & Harrison, 2013).
So why do we need strategic leadership? Iger’s work at Disney shows what a difference strategic leadership can make. A leader’s personality and personal style affects strategy identi�ication and implementation (Livengood & Reger, 2010). Eisner’s aggressive style at Disney worked well during some periods of Disney’s history, but not well in later times. Other studies have shown that strategic management can positively impact an organization’s performance, including pro�itability (Miller & Cardinal, 1994), while a lack of a leading strategy can negatively affect pro�itability by up to 44% (Finkelstein & Hambrick, 1996). One study showed that Chinese �irms that engaged strategic human resource management (SHRM) in general were able to achieve better performance than �irms that did not; Wei and Lau (2008) noted that �irms using strategic human resource management “are more conscientious about market needs and take more initiative in developing HR practices that are compatible with business strategies” (p. 4) and lead to better overall motivation. There are two basic elements of strategic management: strategy creation and strategy implementation. A leader spearheads the creation of a strategy using the organization’s vision and mission as guides for new initiatives and supporting structures (Daft, 2016), and then implements the strategy using objectives, policies, initiatives, and supporting structures that translate the organization’s vision and mission into practice. A strategic leader must also model the organization’s values and foster a culture and open climate within the workplace so that the strategy can be implemented more effectively (Greenwood & Miller, 2010; Harrison & St. John, 2002).
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9.3 Strategy Creation Forming a comprehensive strategy is no easy task. A leader must fully understand both the environment and the organization’s core strengths, and often must combine past experience with future projections (Ireland & Hitt, 1999). Here we are referring to the highest overall strategy of an organization, the corporate or enterprise level. Other local, or lower level, strategies all relate back and use parts of the larger strategy. Even in midsize and not-for-pro�it organizations, this higher-level strategy is needed to guide the other departments, working units, divisions, or teams in their work.
When formulating a strategy, leaders rarely work alone. They brainstorm and work with teams and groups to analyze, question, and argue over different scenarios and options; during this process they also align instincts with assessment (Smith & Shefy, 2004). Smith and Shefy (2004) noted that executives use their intuition as well as facts when working with their teams in formulating a strategy. Intuition, wrote Smith and Shefy (2004), “presents the possibility of turning ideas into action and speeding up decision-making” (2004, p. 79). In writing about Henry Mintzberg, a leading scholar of strategy and management, Morrison (2003) noted that Mintzberg’s argument is as follows: strategic planning is about analysis (i.e., breaking down a goal into steps, designing how the steps may be implemented, and estimating the anticipated consequences of each step).
Strategic thinking is about synthesis, about using intuition and creativity to formulate an integrated perspective, a vision, of where the organization should be heading. The problem is that strategic planning proponents believe that analysis encompasses synthesis; that in the best practice, strategic planning, strategic thinking, and strategy making are synonymous. This belief, in turn, rests on the assumptions that prediction is possible and that the strategy-making process can be formalized (Morrison, 1994).
All strategies must stem from a solid foundation of vision, mission, and core values, as shown in Figure 9.1: where we are going, what we stand for, and what we believe. Only then can we know how we are to proceed (strategy) and what to do (implementation).
Figure 9.1: Building strategy
Strategy Roles of Leaders
A McKinsey study (Birshan, Gibbs, & Strovink, 2014) that surveyed 350 senior strategists representing 25 industries worldwide found that effective organizations are transforming strategy development into an ongoing dialogue about leadership and budget. “Some organizations have even instituted a more broadly democratic process that pulls in - company-wide participation through social-technology and game-based strategy development” (Birshan et al., p. 2). The authors summarized their �indings into �ive archetypes (we would say “roles”) that effective strategists use in their work
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and that are based on “a strategist’s signature strengths.” The �ive roles are architect, mobilizer, visionary, surveyor, and fund manager.
The architect uses fact-based analysis to identify industry moves and to understand their companies’ sources of competitive advantage “as a foundation for clear, differentiated strategies” (Birshan et al., p. 2). An example of the architect is the strategist of an oil and gas company who recently led a root-and-branch strategic review of her largest business unit, using data analytics methods.
The mobilizer ensures that strategy meetings focus on strategic dimensions and that participants have the skills to add value. Mobilizers “ask the right questions, scrutinize critical assumptions, and ensure that their companies are learning organizations: porous to outside trends and examples” (Birshan et al., p. 2). In this role, strategy leaders also ensure that strategy is articulated concisely and in easy-to-communicate ways that can be seamlessly implemented. A strategist at an aerospace company who ran core business skill training programs to help key employees draft clear, researched strategic proposals is an example of a mobilizer.
The visionary scans the environment for trends that signal opportunities or risks for the business. In this role strategists use big data to spot growth opportunities. The visionary role also helps leaders identify new products, services, and business models. One example of this type was a chief strategist in the paper industry who, even in slow moving markets, designed innovation workshops to identify new products, services, and business models.
Surveyors, like visionaries, also scan the environment for risks and opportunities, but this role requires a deep knowledge of government and regulatory strategy. Surveyors help shape public discourse and debate for their industries and companies. For example, an aerospace industry employee characterized his role as a “long-term health” advocate who researched and spotted “the trends, shocks, and competitive behavior that will keep the company around for 100 years” (Birshan et al., p. 5).
As fund managers, strategic leaders use analytics to reallocate resources and optimize their corporate portfolio of their businesses. This role focuses on performance by providing information to make tough decisions such as if and when their companies should enter and exit businesses, or grow and prune existing portfolios. For example, another chief strategist said her top priority is assisting the company’s executive committee make dif�icult choices to move resources away from “traditional cash cows and into a disruptive technology that represents the future of the business.”
Clearly there is not one set of de�initive roles leaders must play as strategists with their teams. In Chapter 1 we discussed several other roles leaders and managers. Because leaders must strategically position and manage their organizations in different changing environments, other roles will no doubt evolve over time. In the following sections, we discuss the primary processes of creating and implementing strategies in organizations.
Vision
A vision is an idealized goal or state that an organization aspires to achieve (Jagersma, 2007). Although it may not be immediately attainable, a vision gives both employees and clients something to believe in, a portrait of improvement (Hamel & Prahalad, 1994). It provides direction for the company’s course by outlining a destination, and it invites participation through its positive and uplifting description. Before continuing, take this vision assessment (http://www.mentoringgroup.com/personalv2.html (http://www.mentoringgroup.com/personalv2.html) ). It will give you an idea of the meaning of vision statements, and provide a baseline of how your (and an employee’s) vision maps and matches to an organization’s. Also explore related resources (http://www.mentoringgroup.com/personalv1.html (http://www.mentoringgroup.com/personalv1.html) ) about creating or revising your personal vision.
Vision statements accomplish many things, such as
De�ine the optimal desired future state—the mental picture—of what an organization wants to achieve over time. Provide guidance and inspiration as to what an organization is focused on achieving in 5, 10, or more years. Function as the “north star” to inform and help all employees understand their work that ultimately contributes toward long-term goal accomplishment.
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Align decisions back to the source of the organization’s future state. Serve as a source for other departments and work units to de�ine their visions both at their organizational level and as individual contributors in the organization. (Evans, 2010)
Visions, like strategy and business models, are not static, especially in fast-paced, competitive, and high-risk environments, in which these must also be adjusted and adapted to changing trends, issues, and opportunities. For example, when the Chinese company Alibaba started its business in China, Internet penetration was less than 1%. Expectations were that this �igure would increase, but no one really knew at that time. So founder and CEO Jack Ma and his team experimented with its vision which became one premised on adaptability: “As the market evolved, the company’s leaders reevaluated the vision, checking their hypotheses against reality and revising them as appropriate … When the market changed, so did the vision” (Reeves, Zeng, & Venjara, 2015, p. 77). The company successfully went on to spin off, create, and recreate other parts of the original company as one result of its resiliency and experimental use of visions, strategies, business models, and practices. Of course, not all organizations and companies are like Alibaba, or for that matter Google, Uber, Airbnb, and other such technology companies. But �irms like these provide examples and models from which others can learn.
Before reading further, take Assessment 9.1 to see if you have a vision for yourself. There are common competencies between creating a vision for an organization and for oneself.
Assessment 9.1: Your Personal Vision
Instructions
How much do you think about the positive outcomes you want in your future? Do you have a personal vision for your life? Indicate whether each of the following items is mostly false or mostly true for you.
Mostly True Mostly False
1. I can describe a compelling image of my future. _____________ _____________
2. Life to me seems more exciting than routine. _____________ _____________
3. I have created very clear life goals and aims. _____________ _____________
4. I feel that my personal existence is very meaningful. _____________ _____________
5. In my life, I see a reason for being here. _____________ _____________
6. I have discovered a satisfying calling in life. _____________ _____________
7. I feel that I have a unique life purpose to ful�ill. _____________ _____________
8. I will know when I have achieved my purpose. _____________ _____________
9. I talk to people about my personal vision. _____________ _____________
10. I know how to harness my creativity and use my talents. _____________ _____________
Scoring and Interpretation
Add the number of mostly true answers for your score. A score of 7 or above indicates that you are in great shape with respect to a personal vision. A score of 3 or below suggests that you have not given much thought to a vision for your life. A score of 4–6 is about average.
Creating a personal vision is dif�icult work for most people. It doesn’t happen easily or naturally. A personal vision is just like an organizational vision in that it requires focused thought and effort. Spend some time thinking about a vision for yourself and write it down.
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The Swedish furniture and household-goods store, IKEA, has a simple corporate vision: “Affordable solutions for better living”.
Source: Based on Chris Rogers, “Are You Deciding on Purpose?” Fast Company (February/March 1998), pp. 114–117; and J. Crumbaugh, “Cross-Validation of a Purpose-in-Life Test Based on Frankl’s Concepts,” Journal of Individual Psychology 24 (1968). pp. 74–81.
An organization’s vision is articulated in what is called a vision statement. A strong vision statement is not complicated; it catches the imagination through clear, compelling language. At the same time, the end goal should not be so unrealistic as to be unreachable. Part of the attraction of a powerful vision lies in its possibility (Chattopadhyay, Glick, & Huber, 2001; Kantabutra & Avery, 2010; Slack, Orife, & Anderson, F., 2010). If a vision isn’t attainable, why bother trying? The vision statement serves as an inspiration, an impetus for action. Although a vision statement should be grounded in reality, it also reinvents the present by showing how today could be substantially different (Douglas, Burtis, & Pond- Burtis, 2001). For example, people may not all agree with how the No Child Left Behind and Race to the Top education programs are implemented, the names of the initiatives invoke a common goal and conjure scenarios in which all American children graduate from high school with fundamental knowledge and skills. Although currently thousands of students drop out of school or manage to graduate without a basic skill set, it is not inconceivable to imagine all children making it through high school; this vision does not sound like science �iction. The vision is powerful because it could be possible today—meaning it should be happening today.
The Swedish furniture and household-goods store IKEA® has a simple corporate vision statement: “to create a better everyday life for the many people by offering a wide range of well-designed, functional home furnishings at prices so low that as many people as possible can afford them” (IKEA, 2015). IKEA believes that home is the most important place in the world and children its most important people. Creating low-cost furniture is an attainable goal, and there is an implicit ambition regarding how large this organization will scale. These solutions should be available to everyone. The statement carves out a speci�ic niche for the company and de�ines what the company is striving to achieve as well as frames what it will not do.
Having a vision statement leads to several concrete organizational bene�its. First, clear vision statements lead to better performance and increased satisfaction among employees (Baum, Locke, & Kirkpatrick, 1998; Kaplan, Norton, & Barrows, 2008). Second, decision making becomes more straightforward because the direction and goals of the organization are clearly articulated (Kaplan, 2007). Finally, a strong leading vision statement helps set the culture of a company and calls for employees to aspire to a high standard (Daft & Lengel, 1998). IKEA’s vision statement exempli�ies this. The employees aren’t making cheap furniture for an international distributor; they are improving their customers’ lives and providing affordable options, which is more satisfying than working for a bottom line. The vision statement calls for high-quality work in its description of “better living.” The simplicity of the statement also provides clear guidelines for the organization. For example, given its current vision, IKEA would never produce a luxury line of furniture because that would be
unaffordable.
Beyond the bene�its of having a strong vision, a lack of a straightforward vision statement can have detrimental effects on an organization. Research has shown that a large part of employee turnover results from a lack of clear direction in an organization; in other words, there is no leading vision to guide and motivate staff. The Hay Group surveyed 1.2 million people at 400 organizations and found that “one of the most important predictors of employee commitment, and ultimately loyalty, is the connection between the individual and the big picture” (Prewitt, 2005, p. 26). People like their work to have purpose and consequence beyond balance statements (Nanus, 1992); without a compelling vision, it can be hard for employees to connect with an organization at a deeper level. Although pro�it is a fundamental goal of many organizations, a vision statement that captures more than the bottom line lets individual employees feel like they are part of something bigger, giving them more than a simple �inancial motivation for their positions (Senge, 1990).
A strategic leader helps employees make this connection with the vision and shows how each individual’s work contributes to the company’s future (Brown, 2005). The vision is not merely a statement to help an isolated leader set
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the direction (Sashkin, 1988). Instead, the vision statement supports team building by establishing a common goal (Collins & Porras, 1991) and engages individuals at an emotional level (Nanus, 1992).
After faltering during the recent recession, a reinvigorated GM has a new vision that explicitly invokes their employees: “GM’s vision is to be the world leader in transportation products and related services. We will earn our customers’ enthusiasm through continuous improvement driven by the integrity, teamwork, and innovation of GM people” (General Motors Corp. GM). This leading vision establishes a domain (transportation products and related services), sets an organizational goal (continuous improvement), and appeals directly to their extraordinary employees (known for their integrity, teamwork, and innovation). The inclusive “we” in the mission makes every GM employee part of the team while setting a tone for the organization’s new culture.
Although vision focuses on a future goal, strategic leaders also have to be aware of more immediate objectives. One way of thinking of this connection between long-term and short-term goals is through the analogy of “bifocal vision,” in which a strategic leader addresses current needs while working toward future goals (Harari, 1997). This concept is similar to O’Reilly and Tushman’s (2007) notion of organizational ambidexterity: “Under the appropriate conditions, organizations may be able to both explore into new spaces as well as exploit their existing capabilities. These strategic contradictions can be resolved by senior leaders who design and manage their own processes and, in turn, [create] ambidextrous organizations” (pp. 45–46). O’Reilly and Tushman (2007) note that “to accomplish this dif�icult feat is primarily a leadership task rather than one of structure and design. It requires a leadership team with the skills necessary to provide a compelling vision and strategic intent, a clear consensus and commitment within the team” (p. 46).
In the case of the Disney Corporation, described at the beginning of this chapter, the end goal is an entertainment company that offers diverse services. As Disney branches into new media opportunities and tries to identify and create new markets, its chief executive also manages current goals: for example, how to direct television programming resources and how to coordinate movie and toy releases (Grover, 2007). Disney continues to cater to and build its existing markets while imagining new possibilities, and the current projects become stepping-stones to the future vision.
Now take Assessment 9.2. Compare your results on this assessment to your results on Assessment 9.1. Notice what skills in these leadership dimensions you may need to develop, and which skills you possess now.
Assessment 9.2: Your Strategy Style
Instructions
Think about how you handle challenges and issues in your current or a recent job. Then circle a. or b. for each of the following items depending on which is generally more descriptive of your behavior. There are no right or wrong answers. Respond to each item as it best describes how you respond to work situations.
1. When keeping records, I tend to:
a. Be very careful about documentation
b. Be more haphazard about documentation
2. If I run a group or a project, I:
a. Have the general idea and let others �igure out how to do the tasks
b. Try to �igure out speci�ic goals, timelines, and expected outcomes
3. My thinking style could be more accurately described as:
a. Linear, going from A to B to C b. Thinking like a grasshopper, hopping from one idea to another
4. In my of�ice or home, things are:
a. Here and there in various piles b. Laid out neatly or at least in reasonable order
5. I take pride in developing: a. Ways to overcome a barrier to a solution
b. New hypotheses about the underlying cause of a problem
6. I can best help strategy by making sure there is:
a. Openness to a wide range of assumptions and ideas
b. Thoroughness when implementing new ideas
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7. One of my strengths is: a. Commitment to making things work
b. Commitment to a dream for the future
8. For me to work at my best, it is more important to have:
a. Autonomy b. Certainty
9. I work best when: a. I plan my work ahead of time b. I am free to respond to unplanned situations
10. I am most effective when I emphasize:
a. Inventing original solutions b. Making practical improvements
Scoring and Interpretation
For the strategic-innovator style, score 1 point for each a. answer circled for even-numbered questions, and 10 points for each b. answer circled for odd-numbered questions. For the strategic-adaptor style, score 1 point for each b. answer circled for even-numbered questions and 10 points for each a. answer circled for odd-numbered questions. Which of your two scores is higher and by how much? The higher score indicates your strategy style.
Strategic innovation and strategic adaptation are two important ways leaders bring creativity to strategic management. Leaders with an adaptor style tend to work within the situation as it is given and improve it by making it more ef�icient and reliable. They succeed by building on what they know is true and proven. Leaders with an innovator style push toward a new paradigm and want to �ind a new way to do something. Innovators like to explore uncharted territory and seek dramatic breakthroughs, and may have dif�iculty accepting an ongoing strategy. Both innovator and adaptor styles are essential to strategic management, but with different approaches. The strategic adaptor asks, “How can I make this better?” The strategic innovator asks, “How can I make this different?” Strategic innovators often use their skills in the formulation of whole new strategies; strategic adaptors are often associated with strategic improvements and strategy execution.
If the difference between your two scores is 2 or less, you have a mid-adaptor/innovator style and work well in both arenas. If the difference is 4–6, you have a moderately strong style and probably work best in the area of your strength. And if the difference is 8–10, you have a strong style and almost certainly would want to work in the area of your strength rather than in the opposite domain.
Sources: Adapted from Marcic, D., & Seltzer, J. (1998). Organizational behavior: Experiences and cases, 284–287. Cincinnati, OH: South-Western Cengage Learning; and Miller, W. (1997). Innovation Styles. Dallas, TX: Global Creativity Corporation. The adaptor–innovator concept is from Kirton, M. J. (1976). Adaptors and innovators: A description and measure. Journal of Applied Psychology, 61, 623.
Mission
If the vision and vision statement describe the future goal, the mission de�ines an organization’s purpose and answers the question “What do we stand for?”. A mission statement usually comprises two parts: core values and core purpose. Like the vision statement, a strong mission statement provides direction and helps establish an organization’s culture (De Vries, R., Bakker-Pieper, & Oostenveld, 2010; Ellingwood, 2001). It also differentiates one corporation from another by de�ining unique characteristics (David, 2003).
Although a mission statement may be brief, it can reveal a great deal about an organization. Google has a rather unique corporate mission: “To organize the world’s information and make it universally accessible and useful” (“Google. Mission Statement,” 2015). The mission is general enough to encompass services from Google’s search engine to advertising to Gmail and translation. The openness and generality leave room for growth, but Google is clear about its purpose and ambition, and each of its products serves as another step toward organization, usefulness, and accessibility.
Facebook, which was founded in 2004, has another well-known mission statement. Facebook’s mission is “to give people the power to share and make the world more open and connected.” People use Facebook to stay connected with
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Facebook’s original mission statement was “Facebook helps you connect and share with the people in your life,” but it now has a broader focus: “to give people the power to share and make the world more open and connected.”
friends and family, to discover what’s going on in the world, and to share and express what matters to them (“Facebook Mission Statement,” 2015). This mission is particularly interesting when compared to an earlier mission statement from 2008, which was “Facebook helps you connect and share with the people in your life”(“Facebook. Mission Statement,” 2008). The older mission has a narrower focus, speci�ically looking at social spheres at the personal level. Previously, Facebook wanted to reinforce and maintain existing relationships. The updated version communicates a far grander - purpose—to share with the world and to facilitate connections worldwide. Facebook’s more recent products, from Facebook Connect (which allows Facebook users to log in to other websites using their Facebook pro�iles) to Open Graph (which lets people “like” web pages outside of Facebook) would have been beyond the scope of the mission from 2008, but clearly fall within the scope of the current mission.
A succinct and straightforward leading mission shares many of the same organizational bene�its as a clear vision statement. It can also simplify decision making by providing a blueprint of organizational goals, and it helps employees feel as though they’re working toward a common cause, creating a positive culture with personal investment (David, 2003). Leading visions and missions are key components of strategic leadership.
Values
Core values are the principles that de�ine and guide an organization’s beliefs, behaviors, and interactions. They are the basis of its culture and decision making. Values serve the following purposes: They guide a leader’s vision, mission, strategy formulation, and implementation; set boundaries for members’ expectations; and empower all to serve the highest interests of shareholders, stakeholders, and society, as well as the organization. Take the online personal values assessment (https://www.valuescentre.com/our- products/products-individuals/personal-values-assessment-pva (https://www.valuescentre.com/our-products/products-individuals/personal-values-assessment-pva) ) to identify your own main values, which can also serve as a basis to see if yours match those of an organization in which you work, or choose to work. Ethical values, in particular, have been recognized as among the most important for leadership and organizations (Barrett, 2006). As noted in Chapter 2, integrity is the foundation of leaders’ credibility and one of the organization’s most valuable assets—its reputation. Such values as honesty, truthfulness, respect, fair treatment, and concern for others serve as the basis for an organization’s social contract with its stockholders and stakeholders. In addition, values help attract and retain the best talent in an organization (Bhattacharya, Sen, Sankar, & Korschun, 2008); serve to differentiate an organization’s marketing brand (Maignan & Ferrell, 2001); and help manage economic, political, and social risks of organizations—for example, oil spills, labor disputes, and natural disasters (Kytle & Ruggie, 2005).
Lockheed Martin’s value statements are “Do what’s right,” “Respect others,” and “Perform with excellence” (“Corporate Vision,” n.d.). Essentially, the company stresses that its employees be committed to the highest standards in all of their conduct, act with honesty and integrity in all transactions, respect the company’s diversity, and strive to excel in all aspects of their business.
Strong core values have become increasingly important in today’s business environment, particularly as unearthed corporate scandals leave destruction in their wake. After Enron’s accounting practices bankrupted the company, a survey of over 800 MBAs from 11 highly ranked North American and European schools found that a substantial number were willing to give up 14% of their expected income to be hired by an organization that had a better reputation for corporate social responsibility and ethics (LaPlante, 2004). A pre-Enron study on this same topic— before 2002—found that 94% of MBAs were willing to give up an average of only 12% of their income to be hired by an ethically and socially responsible company (LaPlante, 2004). There is also a renewed interest in business-ethics curriculums at universities after the 2006 housing crisis, which resulted in part from relaxed lending practices that pushed low-income borrowers into adjustable-rate mortgages they did not understand. The subsequent missed payments and resulting foreclosures, as interest rates rose and house values dropped, contributed to the United States’
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tailspin into recession. A business-ethics course is now required in many MBA and graduate business master’s degree programs that include specializations in taxation, �inance, and other �ields.
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9.4 Strategy Implementation Strategy implementation are the activities performed based on a plan that guide overall goal obtainment. There are different levels of strategy in organizations, as stated earlier. Depending on the level of strategy in a business organization, the scale and scope of strategy implementation varies. A corporate level strategy, for example, involves the top-level executive and leadership team since that strategy involves the entire organization. A business level strategy could also involve different divisions and business units in implementation, depending on how broad the strategy is. For example, if it is a marketing strategy that involves several new products, then different divisions could be involved. For smaller companies with one product, fewer people may be involved—such as marketing, sales, and technical support. A functional level strategy usually involves leaders and employees in that function—sales, marketing, production. Again, strategy implementation involvement in organizations depends on who is involved and affected in and outside the organization.
Once the strategy has been created—based on established and articulated vision, mission, and core values—leaders and organizations can look to implementing that strategy. One of the biggest challenges facing leaders today is the speed of change. It is tempting to react to new situations without planning �irst (Matherne, 2004). However, unthinking action can contribute to long-term mistakes due to poor management of resources, unethical behavior, or �lawed implementation (Nutt, 2004). Leaders must create projections, analyze the market, and incorporate personal experience before making a decision (Strange & Mumford, 2005); this need for thought and patience is part of what makes implementation of a leading strategy so challenging.
A leader must consider multiple factors when making decisions. Among these are how much effort the strategy requires versus how much impact it has: Leaders regularly decide to pursue certain options and either disregard or delay others by weighing cost against payoff. A strategy that has a high impact and takes a lot of effort, represented in the upper left box in Figure 9.2, may well be worth executing. However, a strategy that takes a lot of effort and has low impact (lower left box) is questionable. Some critics have asked whether the U.S. military and political strategy in Iraq and even in Afghanistan �its this pro�ile. A strategy that has both low effort and low impact (lower right box) may be helpful for a small business, because it could boost morale and pave the way for more small successes. A strategy that has low effort and high impact (upper right box) is ideal, and hopefully can be repeated.
Figure 9.2: Leadership strategy implementation
Source: Adapted from Amir Harman, A & Sifonis, J. with John Kador, J. (2000). Net ready strategies for the new e- conomy, 95. New York, NY: McGraw-Hill.
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Amazon is among the companies that have turned to high-impact, high-effort strategies. Jeff Bezos, CEO at Amazon, told 60 Minutes in a recent interview, “I know this looks like science �iction. It’s not.” He was referring to Amazon’s test-model “octocopters,” Amazon Prime Air’s vision of using robot drones even though regulatory and technical hurdles await this strategy (Diamond, 2015).
Once a plan is established, it requires deliberate and consistent execution (Allio, 2005). However, this does not fall on a leader’s shoulders alone. Employees also should understand both what the goals are and how the steps they take will lead to the desired outcome (Boswell, Bingham, & Colvin, 2006). Leaders can set the stage by articulating what the overarching vision is, how immediate goals pave the way toward it, and how employees are helping meet those objectives (Boswell et al., 2006). See “Take the Lead: Strategic Leadership: Creating Vision, Mission, and Strategy.”
Leadership literature provides several methods to consider the question of strategy implementation. We will examine two: the 7-S model and Bolman and Deal’s four frames of reference.
The 7-S Model: An Integrating Strategic Framework
The 7-S model offers a classic, widely used way of assessing whether an organization is meeting its vision and mission. Developed by two McKinsey and Company consultants, Tom Peters and Robert Waterman, this model posits that an organization has seven interdependent components that must be aligned in order to ful�ill its strategic potential:
Take the Lead Credits
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strategy, structure, systems, shared values (culture), skills, staff, and style. At Disney, for example, Iger used his more aggressive and adaptive style of leadership to bring the company’s structure and systems in line with his strategy of building on the Disney legacy and regaining its former glory. He has continued to emphasize the Disney shared values of providing innovative, quality products, services, and environments where people can be happy while experiencing community, and brought on the staff with skills to match. Disney’s top-level team and employees throughout the world are selected on their ability. Disney has over 140 position titles that relate to “imagineering”—the art of creating and designing new things. Illustrators, architects, engineers, lighting designers, show writers, and graphic designers are all considered imagineers who do imagineering in such areas as entertainment centers, theme parks, cruise ships, and other new projects at all levels (Wright, 2005).
The 7-S model can be used as both an assessment tool and a way of maintaining alignment through any organizational change, whether large or small. It is also used as a framework for identifying unintended consequences by revealing disconnects among the dependent components. The seven factors are divided into “hard” and “soft” elements. The hard elements comprise more easily de�inable characteristics that can be managed; the soft elements are just as important, but are more invisible.
1. Strategy is the organization’s goals and direction. What is the organization trying to achieve? What is the plan for moving from point A to point B? Strategy encompasses everything from maintaining competitiveness to determining how to allocate limited resources. In previous chapters, we discussed companies like Nike, Microsoft®, and Apple, which require competitive, externally focused strategies to meet external, changing customer demands, whereas �irms like Zappos, while also competitively oriented, also require a clanlike strategy that shows concern for and sensitivity to customers’ needs.
2. Structure represents the hierarchy, roles, and division of responsibilities. It de�ines reporting structures within the organization, whether it is a top-down or decentralized model. Smaller companies in more stable, external environments can operate with simple team-oriented, functional structures (i.e., functions or departments like production, research and development, human resources, �inance, and sales) that may adequately meet the customer-service needs. Larger companies like Disney, on the other hand, that operate in turbulent, changing international and local environments usually require vertical hierarchies (i.e., top-down reporting systems that �lex through the use of franchises, teams, and other integrative leader and manager styles), teams, and horizontal structures where different groups have more autonomy to make decisions.
3. Systems are policies and procedures for exchanging information and completing work. This includes protocols for how departments communicate as well as systems for hiring, accounting, and evaluation. All organizations, large and small, require different systems (e.g., human resources, information technology, and accounting) to deal with all the details, data, and business processes necessary to maintain organizational operations. The larger the organization and its operations, the more sophisticated and complex the systems are. Speed, availability, accuracy, control, coordination, and privacy of information are also very important elements of systems to meet the vision, mission, and strategy of organizations.
The soft elements are less simple to measure and articulate but they are just as important to the overall success of the organization. These factors relate more to organizational culture.
4. Shared values form the center of the 7-S model and are also known as core values. They represent the ideal standards of an organization’s culture both internally in how employees relate to each other and externally in relationships with clients, as well as representing the underlying beliefs and attitudes. (Recall from Chapter 3 the different types of cultures—clan, achievement, bureaucracy, and adaptive.)
5. Skills are the actual competencies and skills of leaders, managers, and employees. They encompass an organization’s collective expertise. Different types of talent are needed to meet certain types of strategies—for example, achievement-oriented strategies and cultures (discussed in Chapter 3) require follower skills that are aggressive and get the work done, whereas clan strategies and cultures require follower skills that show concern for customers and each other. Ideally, followers would be able to access all of these different skill orientations.
6. Staff are the specialists. They can include employees and their demographics, for example, legal, human resources, ethics of�icers, and others in the organization, including division of employees across departments.
7. Style is the way the organization is led. The leader, whether the president or CEO, has a particular way of managing the organization, which also contributes to corporate culture. As discussed in previous chapters, some leaders have more of a people- oriented, considerate style, others a production-oriented style, and some
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lead to effectively address most contingencies (i.e., different situations and environments) that an organization faces.
The leadership challenge involves selecting a strategy to address external market demands. Then the leader must develop shared values and a culture that equips and empowers the right talent and skills to meet those demands, as Iger did at Disney. The 7-S model can be applied to a wide range of situations, from planning a corporate merger to modifying a reporting structure to rebranding an organization. Although leaders may consider structures, systems, strategies, and staff prior to a merger and map out organization charts and protocols, creating a sense of shared values and developing a leadership style that speaks to each organization are crucial to success, especially if the two organizations have different cultures and management styles. In this case, strategic leaders may conduct an internal rebranding process to develop a new set of common values and a style to �it the joint organization, so that all employees feel as though they’re part of an improved, shared organization.
Leadership challenges also arise in acquisitions, when a large, highly structured corporation purchases a start-up with almost no structure and a different management style. How can leaders from both organizations ease the transition? With the 7-S model, leaders can see a map of their organization’s current state and create a model of where they would like to be, and then plan and execute the transition. Although this model does not provide direct answers or solutions for organizational change, it encourages leaders to ask questions and think systemically so that they create and implement robust strategies.
Four Frames of Reference
Leaders usually see the world, other people, and their organizations through a particular frame of reference: a perspective, mind-set and set of assumptions through which people interpret everything and everybody around them. In this case, leaders have a frame of reference that in�luences their strategic thinking and determines how they make decisions. Bolman and Deal (1991) proposed that there are four frames of reference: structural, human resource, political, and symbolic. Understanding an underlying frame of reference can also help an employee navigate the organization, and it provides the leader with an abstract way to view a complex system. Take Assessment 9.3 to see which of the four frames of reference best describes your orientation and why. Leaders, managers, and followers who have equally high scores in all these frames of reference can �lexibly move in and out of different situations that call for parts of each of the four frames.
Assessment 9.3: Your Leadership Frame of Reference
Instructions
This questionnaire asks you to describe yourself as a leader. For each of the following items, score the phrase that best describes you with a 4, the item that is next best with a 3, and on down to 1 for the item that is least like you.
1. My strongest skills are: ___ a. Analytical skills
___ b. Interpersonal skills
___ c. Political skills ___ d. Flair for drama
2. The best way to describe me is:
___ a. Technical expert
___ b. Good listener
___ c. Skilled negotiator ___ d. Inspirational leader
3. What has helped me the most in being successful is my ability to:
___ a. Make good decisions
___ b. Coach and develop people
___ c. Build strong alliances and a power base
___ d. Inspire and excite others
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4. What people are most likely to notice about me is my:
___ a. Attention to detail
___ b. Concern for people
___ c. Ability to succeed in the face of con�lict and opposition
___ d. Charisma
5. My most important leadership trait is:
___ a. Clear, logical thinking
___ b. Caring and support for others
___ c. Toughness and aggressiveness
___ d. Imagination and creativity
6. I am best described as: ___ a. An analyst
___ b. A humanist
___ c. A politician ___ d. A visionary
Scoring and Interpretation
Compute your scores as follows:
For the structural frame, add up the scores you gave choice A in each item: ____.
For the human-resource frame, add up the scores you gave choice B in each item: ____.
For the political frame, add up the scores you gave choice C in each item: ____.
For the symbolic frame, add up the scores you gave choice D in each item: ____.
Your answers reveal your preference among four distinct leader orientations or frames of reference. The higher your score, the greater your preference. A low score may mean a blind spot. The structural frame of reference views the organization as a machine that operates with ef�iciency to be successful. The human-resource frame of reference views the organization primarily as people and treats people like family to succeed. The political frame of reference views the organization as a competition for resources that needs to build alliances to succeed. The symbolic frame of reference views the organization as a system of shared meaning and values, and aims to succeed by shaping the culture.
Do you view politics in a positive or negative light? Most new leaders succeed �irst by using either or both of the structural or human-resource orientations. New leaders often have a blind spot about politics. As managers move up the hierarchy, they learn to be more political or they miss out on key decisions. The symbolic view usually comes last in a leader’s development. Compare your scores to other students’ and see which orientations are more widely held.
Source: © 1988, Lee G. Bolman and Terrence E. Deal. All rights reserved. This survey is based on ideas in Bolman and Deal’s Reframing Organizations: Artistry, Choice and Leadership (San Francisco: Jossey-Bass, 2013).
A structural frame focuses on systems. Roles are clearly de�ined, and it is easy to understand how one can move upward from one position to the next. A leader who uses a structural frame values procedures and processes in the organization, and would likely feel comfortable leading a bureaucratic-type culture (discussed in Chapter 3). Former IBM CEO Lou Gerstner is famous for restructuring a disorganized mass of competitive departments into a single, streamlined system (DiCarlo, 2002). He reorganized IBM (through layoffs and a methodical management system) in such a way that the �irm’s major businesses, departments, and groups shared information, decisions, and knowledge. He most likely would score high on the structural frame.
A human-resources frame emphasizes people and their development. Instead of focusing on how an individual might �it a role or a system, a leader with this frame of reference values trying to grow an organization organically through the employees and their capabilities. Employees may be groomed for future managerial positions, and individual expertise is important. Tony Hsieh at Zappos and Adobe president and CEO Shantanu Narayen use an HR frame to build and grow their businesses. Narayen structure is building the company around the
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Justin Sullivan/Getty Images News/Thinkstock
Adobe president and CEO Shantanu Narayen use a human- resources frame to build and grow his business.
abilities of his staff: “Challenging individuals by setting goals and then letting them use their ingenuity to accomplish them is something that I hope I can pass on as part of my leadership style. If you set a common vision and then get really scary- smart people, they do things that amaze you” (“Shantanu Narayen,” 2015; Bryant, 2009). This frame of reference may correlate to a person’s feeling a �it with what is usually a clan type of organizational culture (see Chapter 3). Clan cultures in general value open, friendly environments where leaders are considered mentors and group loyalty and tradition are strong. A long-term perspective emphasizes the importance of cohesive teams, participation, and consensual decision making. Clan cultures can also be highly focused and results driven, but not at the expense of the human element. Poor performers in highly effective and focused clan cultures may not be tolerated.
A political frame is needed because people are different from and often in competition with each other. Leading and managing among diverse stakeholders with differing stakes and agendas requires political skills, as we discuss in Chapter 11. All astute leaders must be able to skillfully use a political lens while being authentic, ethical. Not an easy task as many professional politicians fail at this task each year. Some people might view politics in Washington, DC through this type of frame, considering the representatives from the 50 states to be in competition over a scarce resource, federal funding. Competition and debate are intended to lead to a balanced outcome so that a single, powerful person does not leave with all of the resources. Rather, individuals must negotiate and
distribute funding. Some leaders view their organizations similarly, with different teams or departments competing for resources, each having to justify and negotiate to reach its goals. This is one method of keeping an organization innovative and competitive.
A symbolic frame focuses on vision. Here the leader is a role model who exempli�ies the organization’s ideals and guides employees toward a shared goal. This frame depends to a certain extent on performance, with the leader embodying core values for followers. Most U.S. presidents as well as other nation’s presidents must use a symbolic frame to motivate followers. As discussed in Chapter 6, charismatic leaders in particular use symbolic actions and language to inspire followers to accept their visions. Former Avon President Andrea Jung learned to use a symbolic frame as she helped transform that company from a cosmetics company to “‘The Company for Women,’ an organization that enabled its sales reps to achieve economic self-suf�iciency” (George, 2007). Jung wanted to “elevate women in the community and create commerce that can better their families’ lives” (George, 2007). Currently several leaders, such as Melinda Gates at the Bill & Melinda Gates Foundation and Ruth Porat at Alphabet (Google’s parent company), use a symbolic frame to complement their other in�luencing roles to in�luence followers and stakeholders.
A leader may naturally see an organization through a particular frame of reference, but a strong, effective, and adaptive leader can switch and move across and within frames to respond to different organizational environments, cultures, and follower styles. Leaders need to be �lexible and resilient in most of today’s organizations. Leading visions, missions, and strategies of organizations require a wide range of political skills, power sources, and use of different frames of references and styles.
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Summary & Resources
Chapter Summary Leading strategy involves leadership as persons, processes, and systems (see Figure 1.1). As persons, style counts. Walt Disney and his successors have shown that visionary leaders who can also execute are important if an organization is to sustain its business. Founders and leaders who can also create and build organizations around value capabilities and combinations embedded in creative and realistic visions, missions, and values set the tone and content for success.
Knowing the answer to the question, “What is the Theory of Your Organization?” addresses these foundational ideas on which strategies are designed and executed. Because top-level leaders and their teams identify corporate or enterprise level strategies for their entire organizations, they have more complex roles to play in the process.
In this chapter we discussed �ive primary roles contemporary leaders play in identifying and formulating strategies to compete in a globalizing, hypercompetitive, digitally connected world: The architect, the mobilizer, the visionary, the surveyor, and the fund manager. Sometimes one leader cannot play all of these roles successfully; that’s why leadership teams are required. We also referred you to Chapter 1 and the competing values framework to review those leadership roles that also are important for identifying strategies that match the organization’s environment. Those major leadership strategic roles included innovator, mentor, monitor, and producer. Leaders must also use processes in the roles they adopt to create and implement strategies. With this in mind, we introduced four strategic frames of reference related to roles that leaders use to create, implement, and sustain strategies. Those frames are structural, human resource, political, and symbolic.
Vision, mission, and values were discussed as these are also the bases from which strategies are formed. The 7-S framework also helps a leader envision how a strategy combines with other critical dimensions of an organization: the strategy, structure, systems, shared values, skills, staff, and style. Before the implementation stage of strategy execution, the framework that asks the leader to gauge the amount of effort with the level of impact of the intended strategy was presented. Certainly understanding that a strategy requires tremendous effort and cost to reach low impact may well not be worth pursuing. As you review your results on the assessments and evaluate your strengths and developmental areas in strategy development and execution, it would also be helpful to look back for patterns among the other assessments you have taken in previous chapters. You may begin to see more clearly what skills and capacities you need to develop as a strategic leader.
Web Resources Vision: Writing a Personal Vision Statement
http://www.mentoringgroup.com/personalv2.html (http://www.mentoringgroup.com/personalv2.html)
A helpful resource to guide your vision statement.
Core Values
https://www.valuescentre.com/tools-assessments/pva/ (https://www.valuescentre.com/tools-assessments/pva/)
This online personal values assessment helps you identify your own main values, which can also serve as a basis to see if yours match those of an organization in which you work, or choose to work.
Critical Thinking Questions 1. What differences do you believe a leader would have in creating and implementing a corporate strategy versus
a functional strategy? 2. Research two organizations in different industries and copy out their vision, mission, and values statements.
Compare these statements and explain reasons you observe for their similarities and differences. Which organization or company, if you had to choose only one, would you prefer to work for and why?
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3. Argue this statement, “All organizations do not really follow their formal strategies, so why even have them?” (Use the text to back up your arguement.)
4. Argue why, as the chapter states, having a “theory of the �irm” might help realize a more effective vision and strategy? State your reasoning and any evidence to agree or disagree.
5. What type of organization according to your assessment results (personal vision, mission, and values) would best suit you (1) for employment, and (2) to possibly lead now or in the future. Explain, using the text and your assessment results.
6. Describe the type(s) of followers’ frames of reference you believe you could as a leader most effectively and least effectively lead in implementing an organizational strategy? Explain, using your own assessment results and chapter content.
7. Argue this statement, “Implementing an organizational strategy for a large business or company would be easier than creating one.” Support your reasoning with text information as well as your own judgment.
Key Terms
business strategy Maps back to the corporate strategy and determines how an organization should compete in its business(es).
core values The principles that de�ine and guide an organization’s beliefs, behaviors, and interactions.
corporate strategy Determines the direction that the organization is going and the roles that each business unit in the organization plan in pursuing that direction.
frame of reference A perspective, mindset, and set of assumptions through which people interpret everything and everybody around them.
functional strategy Overlaps with and extends the business strategy to functional departments like research and development, marketing, sales, manufacturing, human resources, and �inance.
human-resources frame Emphasizes people and their development. Instead of focusing on how an individual might �it a role or a system, a leader with this frame of reference values trying to grow an organization organically through the employees and their capabilities.
mission De�ines an organization’s purpose and answers the question “What do we stand for?”
mission statement A statement usually comprised of two parts: core values and core purpose.
political frame A mind-set or frame of reference that values and views competition, negotiation, power exchanges, and debate in decision making.
7-S model An assessment of whether an organization is meeting its vision and mission; the seven internal dimensions that must be aligned are strategy, structure, systems, shared values, skills, staff, and style.
strategic leadership Involves leading with a vision, mission, and values; imagining and anticipating the future, working with others to realize it, and remaining open-minded to changing course as needed.
strategy
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A comprehensive plan for how an organization will ful�ill its purpose and realize its vision.
strategy creation Using the organization’s vision and mission as guides for new initiatives and supporting structures.
strategy implementation Using objectives, policies, initiatives, and supporting structures to translate an organization’s vision and mission into practice.
structural frame A mind-set or frame of reference that values procedures and processes in an organization as important.
symbolic frame A mind-set or frame of reference that focuses on vision and depends to a certain extent on the leader’s embodying core values for followers.
vision An idealized goal or state that an organization aspires to achieve.
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“Organizations are recognizing the need to focus on culture and dramatically improve employee engagement as they face a looming crisis in . . . retention” (Schatsky & Schwartz, 2015). Their efforts appear to be achieving gains: A 2018 Gallup poll found that about one third (34%) of U.S. employees feel engaged in their jobs, up from 31.5% in 2014. The least engaged group, at 16.5%, has reached its lowest level since Gallup began reporting on engagement in 2000. The remaining 49.5% of workers falls under the “not engaged” group—not unhappy, but not mentally and emotionally
10 Organizational Culture
iStock/Thinkstock
Learning Outcomes
After reading this chapter, you should be able to:
1. Discuss the dimensions and types of organizational culture.
2. Understand the competing values framework and how it can help leaders negotiate various cultural contexts.
3. Explain the importance of diversity and of understanding international perspectives.
4. Discuss leadership strategies and initiatives for fostering inclusiveness within organizations.
5. Identify cross-cultural frameworks and explain cultural differences and cultural divides.
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James A. Parcell/The Washington Post via Getty Images
Some of Wegmans' main values include caring and making a difference.
connected to their work. According to the poll, this group “will show up to . . . but will quickly leave their company for a slightly better offer” (Harter, 2018).
Examples of �irms that are succeeding in attracting and retaining employees (Bersin, 2015) are those that are paying particular attention to the organizational culture they foster. Firms such as HubSpot, a 1,000-employee, New England technology �irm, offers free books and education to staff and uploads their board meeting notes and culture manifesto online. Wegmans, the retail grocery chain, changed its business goals and values to create jobs and career development for employees; some of their main values include caring and making a difference (“Wegmans,” 2015). NetFlix’s culture manifesto states “freedom with responsibility.” Similar strategies are being employed by Quicken Loans, Google, RW Baird, Zappos, and Salesforce to name a few.
So what does “culture” mean exactly? It has multiple meanings. At a macro level it includes international, national, regional, or societal dimensions. It also relates to ethnic and occupational cultures that exist globally in private, public, nonpro�it, and government arenas.
Subcultures are also found in occupational groups within organizations; and microcultures exist within occupations inside and outside organizations (Schein, 2010).
If we understand the dynamics of culture, we are less likely to be puzzled, irritated, or anxious when we encounter the unfamiliar and seemingly irrational behavior of people in organizations, and we will have a deeper understanding not only of why various groups of people or organizations can be so different but also why it is so hard to change them. Even more importantly, the more we understand about culture, the more we understand ourselves and recognize some of the forces acting within us that de�ine who we are. We will then understand that our personality and character re�lect the groups that socialized us and the groups with which we identify and to which we want to belong. Culture is not only all around us but within us as well (Schein, 2010).
In this chapter, we focus on organizational culture before examining how culture more generally—in terms of countries, nationalities, ethnicities, and so on—can have broad implications for leadership ef�icacy and success. Although the �irst two chapters laid the foundation for understanding the nature of leadership, these �inal three chapters show how leaders in�luence and shape organizations to achieve goals through communication, strategy, and teamwork. We begin this discussion with organizational culture because it shares a mutually dependent relationship with these three dimensions: An organization’s culture affects how people communicate, how strategy is developed and implemented, and how people work in teams. Culture can also be de�ined in terms of these three dimensions. It is arguably the most important internal organizational dimension.
This chapter also covers what is perhaps the more common usage of culture—international cultures—and how different cultures and globalization present opportunities and challenges for leadership. Because organizational and national cultures are in�luenced by global trends—for example, technology innovations, mergers and acquisitions, in�lux of international workers, and a mix of diverse values—leaders and followers must be able to accommodate such changes in their organizations and teams. Understanding culture has a substantial payoff for everyone.
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10.1 Leading and In�luencing Organizational Culture The online shoe and apparel shop Zappos! has a commitment to fun and “a little weirdness” that is apparent to any visitor to the company’s several blogs (Hsieh, 2009; Miller, 2014). It has been called “the humble overachiever.” Online videos cover topics that seem unrelated to apparel—how to pitch a tent, how to listen, and so on—and also give visitors a glimpse inside the of�ice: cubicles decked out with colorful memorabilia and shiny artifacts, as well as casually clad employees who engage in staring contests and goofy on-camera interviews. As the Zappos website shows, this isn’t forced, and the company isn’t led by an eccentric who is preoccupied with making employees perform strange tasks. The idea behind Zappos’ “family culture” is that encouraging employees to have fun and laugh at work allows them to enjoy their work, be themselves, and perhaps be a little creative, innovative, and unconventional in the process.
Wolske, “culture evangelist” for a department within Zappos, emphasizes the importance of culture in de�ining a company through “attitudes, values, and behaviors” (“Ten Core Values,” 2014). Wolske explains Zappos’ 10 core values:
1. “Deliver ‘WOW’ through service,” which involves exceeding expectations.
2. “Embrace and drive change when there’s a clear reason why” emphasizes adaptation and innovation.
3. “Create fun—and a little weirdness” aims to ensure that employees are not overworked, and stay creative.
4. “Be adventurous, creative, and open-minded.”
5. “Pursue growth and learning”—important for new ideas.
6. “Build open and honest relationships with communication,” focuses on behavior and listening skills.
7. Continuing with communication, the seventh core value is “build a positive team and family spirit.”
8. The last three core values are, “do more with less; realize there’s always room for improvement; be passionate and determined, and be humble” (“Ten Core Values,” 2014).
These core values allow for continuous innovation, improvement, new ideas, happy and creative employees, satis�ied customers, and good teamwork.
Zappos is one example of what leadership experts call a strong—and perhaps unique— organizational culture. In this context, culture refers to organizational members’ shared meaning of values, beliefs, and assumptions about how things are done and what behaviors are acceptable (Connors & Smith, 2000; Schein, 2010).
Schneider (1987) and Schneider, Goldstein, and Smith (1995) argue that “the people make the place.” People create and in�luence organizational culture, structure, and processes. Schneider and his colleagues also argued, using the ASA (Attraction-Selection-Attrition) framework, that new organizational members are attracted to organizations based on their personality characteristics. Individuals then select organizations—or jobs in organization—that �it their personalities and stay with them, or leave organizations where they feel they do not �it. As noted earlier, companies needing talent appear to be trying to attract and retain employees based on their values and preferences.
In a larger sense, culture is both a “here and now” dynamic phenomenon and a coercive background structure that in�luences us in multiple ways. Culture is constantly reenacted and created by our interactions with others and it is shaped by our own behavior. When we are in�luential in shaping the behavior and values of others, we think of that as “leadership” and are creating the conditions for new culture formation. At the same time, culture implies stability and rigidity in the sense that how we are supposed to perceive, feel, and act in a given society, organization, or occupation has been taught to us by our various socialization experiences and becomes prescribed as a way to maintain the “social order” (Schein, 2010).
Culture has also been characterized as the personality and chemistry of an organization. You get a sense of an organization’s culture and how it feels when you walk into a building or facility. It may feel rigid and formal or casual and friendly. People may be approachable or distant with each other.
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A leading scholar on culture, Edgar Schein at MIT, wrote that culture serves two important functions in organizations: First, culture creates internal unity, integrating members so they can better work together to achieve common goals. This refers not only to how well individuals get along with one another, but also to how in sync their behaviors and goals are. Culture ties things and people together through shared values and norms. In this sense, culture creates stability and predictability inside people’s thinking (their shared mind-sets) and between internal organizational systems (vision, mission, strategy, and values). Second, culture helps an organization adapt to and integrate with its external environment by adopting the right values to respond to external threats and opportunities (Schein, 2010).
A strong culture, then, can make a difference in how successful an organization can be, and it is an effective leader who builds and promotes a purposive, cohesive culture. Creating and shaping effective cultures is a signi�icant leadership responsibility and challenge, especially since leadership values and culture predict organizational performance. Chuang (2013) believes that all of these aspects help to create a “blended organizational culture.” Organizations whose founders and leaders conscientiously guide and deliberately manage cultural values outperform similar organizations that do not (Kotter & Heskett, 1992). Rosenthal and Masarech (2003) argue that a high-performance culture supports an organization’s success, and that the culture needs to have three components: a clear corporate mission, shared organizational values, and an environment that promotes employee ownership over �inancial and cultural success.
Dimensions of Organizational Culture
Understanding organizational culture can be helped by comparing it to an iceberg, as shown in Figure 10.1, with visible and invisible layers. The �irst visible layer of an organization’s culture, which Edgar Schein (2010) called cultural artifacts, are what you physically see and hear upon entering the headquarters of a company: the physical layout, the ways people dress and act, tangible symbols such as pictures on the walls, and the interior decoration. Visible cultural layers also include the atmosphere the people create, which in turn re�lects the company’s values. For example, Google’s visible culture looks and feels like a relaxed college campus, and Google’s values include “You can be serious without a suit” (“Ten things we know to be true,” n.d.). Google employees receive 12 weeks of fully paid maternity leave; gourmet chefs, who provide on-site healthy, free lunches, snacks, and dinners; free on-site doctors at company headquarters; and free massages throughout the day (“Bene�its,” n.d.).
Figure 10.1: Organizational culture dimensions
Source: From Daft, The leadership experience (4th ed.). Copyright 2008 South-Western, a part of Cengage Learning, Inc. Reproduced by permission. www.cengage.com/permissions
At a deeper, invisible level are the expressed values and beliefs of the company. These consciously held convictions are not readily observable but can be understood when professionals and followers describe what they do and why. For example, evidence suggests that soldiers generally commit to the U.S. Army because of its values—that is, loyalty, duty,
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and sel�less service (Crandall, 2007). Although soldiers join up for a number of reasons (e.g., to earn money for college, change one’s image, and so on), most do so for intrinsic reasons—a motivation to serve, a desire to �ind racially unbiased opportunities, or some ideal. Crandall wrote that the positive association a soldier has for the values system carries over to commitment to the institution.
This is consistent with business sector �indings that the congruence of member values with the overall organization’s values contributes to commitment to the organization (2007). Values run deep in organizations and can signi�icantly in�luence commitment to the organization for those members who stay over time. Two studies (Clugston, Howell, & Dorfman, 2000; Wasti, 1999) showed that individual differences in cultural values (e.g., collectivism and power distance — discussed later in this chapter) were positively correlated with normative commitment to the organization; and normative commitment correlates positively with desired outcome variables such as performance. Johnson-Murray (2012) found that there is a relationship between work value and normative commitment. Similarly, Amos and Weathington (2010) found that perceived congruence of employee-organizational values is related to commitment to the organization.
As we will discuss in the following sections, organizational culture can also be described in terms of its stability, achievement dimension, team relatedness, people orientation, outcome, attention to detail, innovativeness, and tendency to take risks (Chatman & Jehn, 1994; O’Reilly, Chatman, & Caldwell, 1991). Armenakis, Brown, and Mehta (2011) summarizes past studies about “cultural typologies” that include mechanistic/organic, adaptive/unadaptive, participative level, ethical /unethical, responsibilities (economic, legal, moral, and philanthropic), as well as others. See “Take the Lead: Leading and In�luencing Organizational Culture” to apply concepts.
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Organizational Cultures
Not all organizational cultures are created and led equally. As noted earlier, the quality and the implementation of organizational culture can affect performance. However, just as different types of leadership can be effective in different types of situations, different types of organizational culture can also work well, depending on the situational context. We will examine what differentiates a high-performance culture from a low-performance culture, and we will also take a look at four different approaches to organizational culture, based on the competing values framework discussed in Chapter 1.
High-Performance Versus Low Performance Cultures can be characterized as either high-performance or low performance, depending on their ability to achieve goals, grow, and bring out the best in their members. As seen in Table 10.1, the two can be described in opposition to each other.
A high-performance organizational culture possesses several characteristics. It possesses a clear vision, mission, and strategy; it is characterized by a strong culture and internal unity; and it focuses on excellence, achievement, and adaptability.
Take the Lead Credits
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Clear Vision, Mission, and Strategy Vision, mission, and strategy—and how to create them—are discussed in greater detail in the next chapter, so for now, simply know that a high-performance culture knows exactly where it is going and how it will get there. One empirical study showed that, among other shared qualities, the highest-performing companies all publicly displayed and af�irmed their mission and value statements, showing both clarity in and commitment to their aims, and their business and work processes and procedures were consistent with their mission and values (Fisher, 2000). Having such clarity helps an organization recognize external opportunities and exploit them.
Table 10.1: High-performance versus low-performance cultures
High-performance culture Low-performance culture
Clear vision, mission, and strategy (strategic systems) Unclear vision, mission, and strategy
Strong culture, internal unity, and values based on commitment and trust
Low cultural strength and polarized subcultures
Focus on excellence, achievement, and adaptability to the external environment
Insular and resistant to change
Risk aware Risk averse
Free-�lowing information, even with bad news Information bottlenecks
Cross-boundary collaboration Emphasis on turf, status, and bureaucracy
Unclear roles and responsibilities Energized roles and accountability
Source: Based on Corporate Services Generaux. Retrieved from http://www.scribd.com/doc/15931514/Low-vs-High-Performance-Culture-FCC (http://www.scribd.com/doc/15931514/Low-vs-High-Performance-Culture-FCC)
A low-performance culture, on the other hand, lacks vision, mission, and strategy. This is evident when leaders and of�icers of an organization cannot identify or agree on a clear vision, mission, and strategy, which inevitably results in the other symptoms of a low-performance culture. Without consensus on these dimensions, alignment of projects and work tasks is haphazard and misguided.
A high-performance culture also excels in systems thinking (Senge, 1990; Sterman, 2001), which involves understanding the relationships among the parts of an organization in the larger system (the entire organization) to determine the root cause and effects of problems, and to discover new opportunities. Martinez-Moyano and Richardson (2013) modi�ied Sterman’s �ive-step system dynamics modeling process (2001) to come up with six steps: problem identi�ication; system conceptualization; model formulation; model testing and evaluation; model use, implementation, and dissemination; and design of learning strategy /infrastructure. Another way of putting this is thinking outside the box, seeing the big picture, and understanding that the whole is equal to and can exceed the sum of its parts. As referred to in a previous chapter, Apple® founder and CEO Steve Jobs’s visit to the Xerox Corporation in 1979—before the development of the Mac—illustrates this leadership capability. On his visit, Jobs was shown an early personal computer called the Alto, which employed a mouse and an exciting new “graphic interface technology software,” an application designed to make the user’s interaction as simple and ef�icient as possible (Stephanidis & Savidis, 2001). He, being the visionary that he was, saw what few technologists would see—an opportunity to turn an insight from an existing technology into a new industry. With this bigger picture in mind, Jobs raced back to Apple and began work on the Macintosh, which in 1984 became the �irst mass-produced personal computer that used a mouse and the type of software Jobs saw at Xerox. Similarly, when Bill Gates saw the Macintosh prototype operating, he, like Jobs, also saw a bigger picture of what that type of software on a consumer laptop could be. Gates had his �irst vision of the user- friendly Windows software operating system—now a global standard for individuals and corporations (Cringely, 1996).
Strong Culture and Internal Unity High-performance best exhibits how culture can function and bene�it an organization, as identi�ied by Edgar Stein: High- performance cultures create internal unity and adapt well to their external environments. Internal unity, also known as internal behavioral consistency, can be seen in how the airline industry responded after the Germanwings tragedy in the French Alps where one pilot locked himself in the cockpit while the other pilot stepped out. The pilot then intentionally
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crashed the plane into a mountainside as the other pilot desperately tried to break through the locked cockpit door. In reaction to this event, many airlines worldwide have started to require that two crew members need to be in the cockpit at all times in order to avoid another event like this. Air Canada, Westjet, Norwegian Air Shuttle, major German airlines, Virgin, as well as other have been changing their policies (“Airlines across the world,” 2015).
Another example of a high-performance culture is Amway and its strategy in China. When the government in China outlawed direct selling, Amway had two options: “pull up stakes, or. . . �ind a new way to sell” (DeVos, 2014, p. 184). Amway chose to work with the Chinese government and “revised its sales model �ive times to meet changing regulations.” DeVos, president of Amway, says that “today China is our biggest market, accounting for more than a third of Amway’s sales” (DeVos, 2014, p. 184). With Amway’s adaptability to the external environment, they were able to keep their high-performance and remain successful in a foreign market.
High-performance cultures are also built on communication, commitment, and trust. Leaders and followers at these companies actively listen to each other and to customers, suppliers, and vendors (Fisher, 2000); high-performance cultures are often grounded in socially responsible principles that have the interests of followers, clients, shareholders, and stakeholders in mind. Leaders cultivate responsive and respectful relationships with their employees without micromanaging them. Lawler’s (2003) speci�ic suggestions illustrate the ingredients for developing commitment and trust among followers to achieve high-performance goals:
Treat employees with dignity and respect. Grant employees enough autonomy to excel and contribute. Cultivate a relationship with employees based on mutual respect and interdependency. Initiate unique one-to-one relationships with top performers. Give increased responsibility to the best employees. Implement mentor programs. Celebrate employee achievements. Hold managers at every level responsible for the growth and development of the people who report to them. Use the full range of rewards and punishment to enforce high-performance standards. Encourage employees to use their own initiative and creativity in performing their jobs. Set reasonable and clear performance standards for all employees.
Low-performance organizations have weak cultures, or low cultural strength, meaning that followers are not aligned with the values and ways of doing things in their organizations. This may result from poorly de�ined or communicated visions and strategies by leaders, or because followers have not accepted the leader’s vision (Lussier & Achua, 2007). As a result, there is little commitment to or identi�ication with the leader’s strategies and plans. Followers may also show lack of concern for and even alienation from the organization. It is not uncommon for talented performers to start leaving companies when this symptom persists.
Low-performance cultures are also prone to polarized subcultures, which are divisions within an organization that tend to form when there is avoidance of or lack of alignment and consensus around a common organizational strategy. In- groups and out-groups form and af�iliate around self-interests (Tajfel, Billig, Bundy, & Flament, 1971). Personal “�iefdoms” can also result at the top of the organization, where higher-level managers compete for power and in�luence. Without an overarching goal and strategy, such groups become politically charged and interactions result in con�lict, gossip, and misinformation.
Creating and aligning the dominant organizational culture with subcultures is a challenging leadership responsibility that takes initiative, expertise, and courage (David, 2005). Leaders can take concrete actions to align subcultures with the dominant organizational culture by �irst being honest and open with teams and followers. Secretive, noncommunicative leaders create doubt in the minds of others, which often leads to unproductive subcultures. Second, leaders who challenge and offer creative assignments to high performers increase the likelihood of strengthening the larger organizational culture. Third, leaders who show interest and who value constant learning and continuous improvement through both intrinsic and extrinsic rewards encourage effort and productivity in followers, which in turn enhances the overall organization. At the same time, leaders who acknowledge quality failure (i.e., failure resulting from credible efforts to experiment for the bene�it of the organization) encourage entrepreneurial risk taking in both subcultures and the larger culture. Finally, leaders with strong organizational cultures can encourage the development of functional subcultures whose work can contribute to the overall performance of the organization (Alexander, n.d.; Boisnier & Chatman, 2002).
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Robertson (n.d.) describes organizational subcultures as having “its own unique set of characteristics making it distinguishable from the other subcultures, but together, they still operate as a whole striving for the same overall goals.” Organizational subcultures can be based on many things, such as profession, task, ethnicity, age, sex, and departments, to name a few.
Focus on Excellence, Achievement, and Adaptability The Apollo 13 mission exempli�ies a focus on excellence and adaptability. The 1970 lunar landing mission had to be aborted en route due to loss of cryogenic oxygen in the service module and consequent loss of capability to generate electrical power, provide oxygen, and produce water (Smithsonian, n.d.). The crew had to use the lunar module’s resources as a “lifeboat” during the return trip to Earth in order to save its batteries, and needed oxygen for the duration of the �light. In spite of limited power, loss of cabin heat, shortage of potable water, and the need to modify the carbon dioxide removal system, the crew was able to return safely to Earth (Lovell, n.d.). “Apollo 13 has been written into the history books as the mission that was the ‘successful failure,’” wrote Torrance (2006). “I disagree. I think the Apollo 13 mission was the complete opposite. If I wrote the Apollo 13 chapter of the history book, I would state the Apollo 13 mission was NASA’s great ‘failed success.’”
Fisher’s study (2000) showed that high-performance cultures value adaptability, resilience, and responsiveness to productive change—what Edgar Schein might have also termed “adapting well to external environments.” At Microsoft® and Nike, leaders work with committed followers to consistently meet the high volatility and changing market demands of national and global customers. Their product lines change, adapt, and even create customer demand.
Microsoft, for example, continues to generate new editions of Windows that have more versatile and updated functions. Nike keeps introducing variations on models and styles of shoes that attract different customers. Leaders who create high-performance cultures emphasize and focus on excellence, not settling for mediocrity of product or service. Followers are trained to use “zero defects” benchmarks, which admits that defects are “inevitable” and takes steps to eliminate these defects through quality management, preventive actions, and corrective actions (Paraschivescu, 2014). Note that too strong an emphasis on zero defects can lead to cover-ups of problems in the short term that create larger problems in the long term; rather, an error-management approach reinforces learning from errors to prevent their recurrence. So it may be helpful to approach product and service creation with zero-defects foresight and error- management patience and follow-through (Haselton, 2006). The Six Sigma website also believes that an emphasis on zero defects can lead to increased time and expenses to try and �ind a “perfect process” that most likely does not exist. Additionally, an increase in checkpoints to eliminate defects also leads to an increase in costs (“The Concept of Zero Defects,” n.d.).
In contrast, low-performance cultures tend to be insular and resistant to change. The country club style discussed in Chapter 1 can develop, where leaders focus more on interacting with colleagues than on directing strategically. Leaders and followers also can avoid mobilizing resources to meet external competitive needs. This sort of complacent attitude and lack of responsible planning and foresight could be seen in the American automobile industry prior to the 1980s and into the 1990s. The cultures of the “Big Three” (General Motors, FordTM, and Chrysler—now Daimler Chrysler) seemed like country clubs. In the 1980s, leaders refused to adapt to the oil crisis and develop more ef�icient four- cylinder cars. As a result, American car companies lost market share when Japanese four-cylinder cars from Toyota and Honda arrived. In the 1990s, the Big Three overinvested in gas-guzzling SUVs, still depending on consumers’ consistent use of oil (Gordon, 2005). Later, “due to a ‘perfect storm’ of poor business decisions, rising health-care costs and strong foreign competition” they again lost market share, laid off employees, and GM had to be bailed out a decade afterward” (Gordon, 2005).
A similar phenomenon appeared to be happening in the United States in 2011 as China gained a head-start in “green,” or environmentally friendly, technology research, development, and manufacturing (Stavins, 2011). For example, one notable research report stated that “China is prevailing in the global race for green jobs in sectors from solar panels to advanced lighting, and appears to be on an unstoppable upward path” (Feldman, 2010). China’s government invested over $34.6 billion in 2009 in its low-carbon economy—double the amount spent for this type of energy by the United States, and more than any other country. China is now the headquarters for six of the largest renewable-energy employers (Feldman, 2010).
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The United States market is beginning to make up ground in the �ledgling electric car market.
In contrast, government leaders in the United States were only speaking of becoming a global leader in this industry at the time, rather than actively investing. Fast forward to 2015 and we see a number of electric cars being sold and several manufactured in the United States, the top brands being Tesla Model S, Nissan LEAF, and BMW i3. Other brands include Ford, Chevrolet, and Cadillac (Shahan, 2015). There are signs of a general cultural move toward more ef�icient and clean energy saving cars; however, U.S. consumers are not likely to change auto buying habits unless gasoline prices “increase to $4.50–$5.50 per gallon, and battery technology will have to improve signi�icantly, providing increased range at decreased costs (Lee & Lovellette, 2011).
Symptoms of low-performance cultures serve as indicators for leaders and followers to beware of cultures in trouble. However, as noted earlier, effective leadership can make all the difference in how organizational culture manifests itself. A dominant characteristic of strong, high-performance cultures is that they are created and led by effective leaders whose values match external environmental needs and demands.
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10.2 Competing Values Framework: A Cultural Perspective The Competing Values Framework (CVF) is useful for classifying different cultures (Cameron, Quinn, DeGraff, & Thakor, 2009; Kotter & Heskett, 1992) according to external and internal environmental “�it.”
Studies show that the �it is related to performance (Apfelthaler, Muller, & Rehder, 2002): An organization that is able to identify whether it should be more internally or externally focused, or more stable or more �lexible, based on its external environment is more likely to perform more effectively. Leaders are responsible for deciding what major values are needed to �it with the right organizational vision, strategy, and external environment. These values represent what is important to the organization. Founders are the �irst to de�ine an organization’s cultural values, which evolve over time depending on other leaders, environments they must manage, and internal teams who are hired and integrated into the cultures. Organizations in the same industry often share similar values, because they work in similar environments (Chatman & Jehn, 1994). For example, in turbulent and changing market-oriented environments—such as California’s Silicon Valley, where major global technology companies reside and compete—a more adaptive culture is a better �it for matching customer demands, because creativity is a key value (Deshpande, Rohit, & Farley, 2004; “Explaining Silicon Valley’s Success,” 2014).
With this perspective in mind, we address the key question of leading different cultures: “What types of cultures and supporting organizational values are best suited to different environments in order to achieve high-performance?” The CVF suggests that there are four culture types that leaders can use to align their strategies to the environment. Figure 10.2 illustrates a model showing the four different cultural types (Hooijberg & Petrock, 1993; McDonald & Gandz, 1992; Quinn, 1988).
We focus here on two dimensions of the CVF: (1) the horizontal axis, the degree of �lexibility and stability required by the external environment, and (2) the vertical axis, the degree to which the leader’s strategic focus is external or internal. The four cultural types are adaptive, achievement, clan, and bureaucratic. These four types are not mutually exclusive; an organization can have values that �it into more than one category, or even in all. High-performance, strong cultures tend to �it more in one cultural category.
Different Types of Cultures
Different types of cultures suit individual interests and needs. You may �ind that your interests and skills are best suited for a clan culture, which would suggest, referring to Figure 10.2, that a collaborative, agreeable culture, where supervisors and managers value fairness and cooperation and equity, would be more motivating for you. Some human resources positions, depending on the organization and industry, may be good career or position options for those who have a clan culture preference. On the other hand, you may prefer an achievement culture, where the supervisors and managers value and reward aggressive, competitive, and perfectionist behaviors. In that case, a sales position in a highly competitive, fast-moving organization or industry may be a good �it. If a bureaucratic culture is preferable, then you value ef�iciency, order, formality, and routine. “Backroom” operations positions in IT or other technical types of jobs and careers may be more suitable for you. Opposite the values of the bureaucratic culture are the values of an adaptive culture. Flexibility, insight, and innovation are values that characterize adaptability cultures. You can see in Figure 10.2 the types of values you might prefer in that setting.
Adaptive Culture
Corporate cultures have been characterized in broader terms as either adaptive or unadaptive (Kotter & Heskett, 1992). Adaptive culture, in the upper right of Figure 10.2, is open to and embraces external change and is characterized by �lexibility. Leaders and followers in adaptive cultures care about customers and the internal alignment of people with processes to meet external demands; they value quick and decisive responses, risk taking, creativity, and innovation, while keeping the best interests and integrity of the organization in mind. This type of culture is also supportive of followers, and leaders tend to give followers more autonomy—and leeway to fail—to meet customer needs. Although there is not a best “one size �its all” organizational culture and leadership style that works optimally in all situations, researchers agree that adaptive organizational cultures tend to be more effective, and most organizations are being
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Oracle is a good example of an adaptive business culture.
pressured by external forces to adopt such cultures to survive. Leaders in unadaptive cultures are not open to change and sometimes serve their own self- interests; their values can, in fact, impede true change if self-interests dominate.
Figure 10.2: Four cultures
Source: Based on Quinn, R. (1988). Beyond rational management: Mastering the paradoxes and competing demands of high-performance. San Francisco, CA: Jossey-Bass; Hooijbert, R., & Petrock, F. (1993). On cultural change: Using the competing values framework to help leaders execute a transformational strategy. Human Resource Management, 32(1), 29–50; McDonald, P., & Gandz, J. (1992). Getting value from shared values. Organizational Dynamics, 21(3), 64–76; and Daft, R. (2011) The leadership experience (5th ed.). Mason, OH: South-Western, Cengage Learning.
In contrast, an example of an adaptive culture is the giant enterprise-software company Oracle. Vivek Marla, vice president and leader of Oracle Solution Services India—a highly visible global consulting group with the company— re�lected on his 20 years at Oracle:
I like Oracle’s penchant to be in the leading edge of technology and products. I enjoy the dynamism that exists at Oracle. While its long-term strategy is very clear and strong, tactically it is very adaptable to change based on business needs. I thrive in this change. I also enjoy the diversity of opportunities that Oracle provides to its employees. Most importantly, I enjoy the people I work with, no matter which country I am working in. (Sreenivasan, 2009)
In 2014, Oracle leveraged Australia and New Zealand’s innovative practices by introducing cloud computing, which is scalable and �lexible (Ebbeck, 2014). Oracle has adopted cloud computing as a reaction to the world technological environment making the push toward this type of technology.
Clan Culture
Clan culture, in the upper left box of Figure 10.2, emphasizes cooperation, consideration, fairness, and teamwork. These are internally focused cultures that stress �lexibility. Leaders believe that organizational success in such
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environments, given customers’ needs, is best achieved through internal employee relationships. These cultures respond to externally dynamic environments by emphasizing follower empowerment, shared responsibilities, and team synergy. These are by no means country club cultures where productivity is ignored in favor of relationships. Instead, followers are treated like owners and given discretion to implement the organization’s mission and goals. Re�lecting back on the CVF discussion, clan cultures may not work well in environments that require aggressive, competitive, external-oriented strategies.
Zappos, is an example of a clan culture. The company’s website includes a “family culture” blog, accentuating the tight- knit relationships and atmosphere valued at the company. The company uses a model of loyalty business and relationship marketing, which depend on emotional connections with customers and a cohesive culture in the company. The company’s rapid growth is attributed to repeat customers through word of mouth (Hsieh, 2006). The Zappos website states that the key to their success is their culture that focuses on service, which has led them to have fast growth. This growth has also been sparked by repeat customers and word of mouth.
Achievement Culture
Leaders develop achievement cultures, in the lower right box of Figure 10.2, to respond to stable, external environmental opportunities and threats. Achievement cultures generally function in mature external markets competing for market share. Leaders take a strategic external focus because they are alert to competitors seeking market share and pro�itability. The mature and saturated state of the consumer markets these �irms operate in makes for very intense competition. Re�lecting back on the CVF, achievement cultures would not necessarily work in environments that require more cohesive, cooperative, and considerate internal strategies, where people are not required to compete head-to-head with one another.
Rogers, Meehan, and Tanner (2006) believe that there are two key factors to have a winning (or achievement culture): high-performance values and behaviors and unique personality and soul. The high-performance values and behaviors include high aspirations and a desire to win; external focus; think like owners; bias to action; individuals who team; and passion and energy. Rogers et al.’s (2006) argument is that all of these factors need to be present in order to keep a winning culture. The opposite of clan cultures, achievement cultures foster competition among employees, departments, and other work units. Companies takes a competitive as well as an adaptive strategic and cultural stance against other external organizations in achieving organizational goals. For example, previous GE CEO Jeff Immelt, the successor to star Jack Welch, continued to ignite the competitiveness of that company’s culture by moving people and things around to further advance growth and pro�itability. This quote explains Immelt’s cultural leadership at GE:
So how, exactly, do you make a culture as ingrained as GE’s sizzle with bold thinking and creative energy? To start, you banish some long-cherished traditions and beliefs. Immelt has welcomed outsiders into the highest ranks, even making one, Sir William M. Castell, a vice-chairman. That’s a serious break with GE’s promote- from-within past. He is pushing hard for a more global workforce that re�lects the communities in which GE operates. Immelt is also encouraging his homegrown managers to become experts in their industries rather than just experts in managing. Instead of relying on execs who barely had time to position a family photo on their desk before moving on to the next executive assignment, he’s diversifying the top ranks and urging his lieutenants to stay put and make a difference where they are (Brady, 2005). Before Immelt, Welch encouraged employee competition through a “forced rank” system, letting the bottom 10% go, which takes the focus off of collaboration. Instead, employees may spend their time trying to “outshine” other employees. On the other hand, PepsiCo has been successful in using competition to help with collaboration. Their secret is to rank how well employees work with others (DuBois, 2012).
Bureaucratic Culture
Bureaucratic cultures, in the lower left box of Figure 10.2, have an internal, stable focus and are the opposite of adaptive cultures in value orientation. Leaders in bureaucratic cultures focus on internal environments and value stability, status, order, and ef�iciency. They emphasize rational and formal methods, relying on rules and procedures in the internal culture. Employees who �it with this type of culture enjoy predictability over change, regularity over chaos, and obedience over autonomous decision making. In the past, particularly the 1950s, insurance companies, hospitals,
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banks, and the automotive and other industries enjoyed the safety and security of bureaucratic cultures. This type of external environment has given way to economic, social, and political turbulence and radical change.
The term bureaucracy has unfortunately taken on negative connotations in recent times; it has come to mean slow, stodgy, ineffective, and riddled with red tape. However, parts of all organizations have to be bureaucratic: They need rules, organization, regimentation, and ef�iciency. Systems that deal with data, accounting, and information processing are in part bureaucratic. Insurance companies, hospitals, accounting �irms, and postal services are examples of organizations that rely on accurate and detailed business-processing systems and methods that could be considered bureaucratic. One employee has described the highly successful and pro�itable Metropolitan Life Insurance Company as having “stable company performance,” but also issues that are typical for large companies such as “bureaucracy,” “lack of autonomy and independence,” and “authoritative leadership” (“MetLife,” 2014).
The effectiveness of each of the four culture types depends on different environmental conditions and leadership strategic orientations. The emphasis on particular cultural values depends on an organization’s strategic focus and on the level of environmental stability and �lexibility, its industry, and the responsibility that strategic leaders take to ensure that organizations balance cultural values with competitiveness. Leaders must also create the �it between strategy and culture and be ready, able, and willing to change values and cultures that may have worked in the past but are no longer effective. In situations where leaders �ind that they must change external strategies to compete in external environments, a shift in organizational culture can be signi�icant. In some instances employees may leave an organization that must, for example, shift strategies and make an internal change from a bureaucratic to an achievement culture. In such instances, training, coaching, and other types of reorientation programs are offered to help employees adapt and adjust to such cultural changes. In the last section, we examine what concrete actions a leader can take to shape the culture of his or her company.
Leading and Shaping Culture
Shaping, changing, and aligning culture with strategy are, as we have noted, among the most challenging tasks of leaders —but also arguably among the most important. Scholars often point to how company founders set the tone for their companies and how that can affect a start-up’s success. Founders in�luence the formation of the culture’s values and beliefs by hiring and socializing (i.e., in�luencing, teaching) followers who think and feel like they do. Edgar Schein wrote that “founders not only choose the basic mission and the environmental context in which the new group will operate, but they choose the group members and bias the original responses that the group makes in its efforts to succeed in its environment and to integrate itself ” (Schein, 2004, p. 226).
Walmart founder Sam Walton, for example, worked to create a unique culture of equality, encouragement, high- performance, and customer service centered on 10 rules (Abraham, Kathawala, & Heron, 1988; Walton & Huey, 1992).
Sam Walton’s Ten Rules:
Rule 1: Commit to your business. “If you love your work, you will be out there every day trying to it the best you possibly can, and pretty soon everybody around you will catch the passion from you—like a fever,” Walton said.
Rule 2: Share your pro�its with all your associates (employees). Walton advocated treating his employees like partners, which he believed would increase performance.
Rule 3: Motivate your partners (i.e., employees). Money and ownership alone are not enough, Walton said.
Rule 4: Communicate everything you possibly can to your partners. “The more they know, the more they will understand. The more they understand, the more they will care. Once they care, there is no stopping them,” Walton said.
Rule 5: Appreciate everything your associates do for the business. Walton said that a paycheck and a stock option only buys “one kind of loyalty.”
Rule 6: Celebrate your successes. Walton encouraged showing enthusiasm and also �inding the humor in one’s failures.
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Southwest Airlines cofounder Herb Kelleher believes employees come �irst and if they are treated right, they treat the outside world right. The outside world will then use the company’s product again.
Rule 7: Listen to everyone in your company. Walton believed this empowered associates and forced “good ideas to bubble up.”
Rule 8: Exceed your customers’ expectations. Walton was adamant about the company motto, “Satisfaction Guaranteed.” The company should put the customer �irst and avoid making excuses for mistakes.
Rule 9: Control your expenses better than your competition. For Walton, running an ef�icient operation could sometimes make up for mistakes made.
Rule 10: Swim upstream (be different).
Walton died in 1992, and although times have changed since he founded Walmart, his legacy and business philosophy remain robust. The company is adapting to the new global competitive environments in which it has entered.
Southwest’s Herb Kelleher provides another example. Although Kelleher is not the original founder of Southwest, he was the founder’s attorney and is credited with taking the airline to the level it is at today. Kelleher was once asked who comes �irst—customers, shareholders, or employees? He replied, “Employees come �irst; and if employees are treated right, they treat the outside world right, the outside world uses the company’s product again, and that makes the shareholders happy” (Morrison, 2003). Kelleher saw Southwest as an upside- down pyramid: The top level managers were at the bottom, and employees were the heroes on the front line, because they were “the ones that make things happen” (Lee, 1994). Kelleher said that the company “hired for attitude, enthusiasm, and sense of humor,” and that many applicants were made to take personality tests. When a vice president once admitted to Kelleher that she had interviewed 34 candidates for a ramp-agent position, Kelleher told her to interview 134 people if that was what it took to �ind the person with the right attitude (Abraham, Kathawala, & Heron, 1988). The company continues to hold a reputation for high spirits and hard work. Freiberg and Freiberg noted that at “Southwest Airlines there exists a spirit of liberty and freedom that encourages people to use their imagination, express their individuality, and exercise leadership” (1996). This is the nature of a high-performance clan and achievement culture that follows the example and role model of a transformational, charismatic founding leader.
So how does a leader go about creating, building, and maintaining a high- performance culture? The next sections identify the primary and secondary actions a leader can take.
Primary Actions Primary leadership cultural actions (Schein, 1992) aim to build a culture from start-up time to the next phase. Leaders seek to align the culture by identifying a vision, mission, values, and strategy with a team or teams, and then working with followers to plan and implement business processes (i.e., sales, marketing, research, and development of the organization). This requires de�ining a clear vision, mission, and values statements upon which strategy and structure are based. Considerable leadership involvement, in�luence, and communication are required to ensure that an effective culture is maintained. Leaders use their authority and charisma to in�luence, motivate, and direct all of these dimensions. Most U.S. presidents and global leaders weigh in on articulating, in�luencing, and directing major international and national economic and political policies in their administrations. They use the power of their positions, their physical presence and speaking at public events, and their strategic intelligence at cabinet meetings to ensure that the policy implementation processes run as planned.
Secondary Actions Secondary leadership cultural actions (also called symbolic leadership cultural actions) are behaviors, signals, and events that leaders and organizations create and enact to instill and reinforce desired cultural values. Symbolic actions include
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leadership role modeling, organizational ceremonies, artifacts (tangible and intangible symbols), and new-member socialization processes.
The leader as cultural role model is one of the most important symbolic in�luencers of culture and follower behaviors. Most people remember a coach, teacher, or leader who in�luenced them as a role model. Members of a top-level team and employees learn by observing how leaders act, think, reward, and disapprove of ideas, policies, actions, and practices. The leader as role model follows the saying, “Action speaks louder than words.” People learn quickly whether or not their leaders actually follow the values they proclaim for the rest of the organization (Ready, 2004). Sam Walton practiced what he preached: He made his presence felt in the stores, using MBWA (management by walking around). Of course he did more than just walk around; he engaged associates and customers, discovered what worked and didn’t, and used that information in developing strategy and best practices.
Ceremonies, or planned activities and events, are also strong shapers of cultures. Ceremonies are used to recognize, honor, and remember people in organizations. Such events reinforce cultural values, create an emotional bond among people and across formal boundaries, and communicate who and what is valued in organizations. High schools and colleges have meetings of national honor societies and graduations. Mary Kay®, among the largest direct sellers of skin- care and color cosmetics in the United States, started a ceremony of awarding pink Cadillacs for outstanding sales results. The pink Cadillac became an internationally known symbol that enshrined the memory of Mary Kay Ash and her company.
Stories are narratives based on actual people and events that endure and are repeatedly told by followers. Stories are one of the oldest and most powerful ways of instilling and reinforcing cultural values in an organization. Although some stories are embellished beyond facts, it is the shared energy and enjoyment of recalling such narratives that bonds people. Every professional, amateur, and educational sports team perpetuates stories of their heroes. The famous, ongoing rivalry in the National Basketball Association between the Boston Celtics and Los Angeles Lakers is one example. Films of the 1982–1987 championship playoffs that pitted Celtics star Larry Bird against Magic Johnson of the Lakers still inspire competitive memories within and between those teams and basketball fans. Now stories of basketball legends Kobe Bryant of the Lakers, Tim Duncan of the San Antonio Spurs, and LeBron James of the Cleveland Cavaliers are added to their organizational memories and cultures.
Symbols are objects, events, or acts that represent a shared meaning among others; they are also important shapers of cultural values that, in turn, in�luence bonding among followers and contribute to their identi�ication with an organization (Ornstein, 1986). They “reinforce and increase the impact of your company values” (Schleckser, 2015). Symbols do not have value right away, but they build value over time (Schleckser, 2015). Symbols can be a number of objects, events, or acts. Buildings, trophies, company picnics, even ceremonies are symbols. One common example is a metal or ribbon for U.S. military service (Schleckser, 2015). Another example is the FedEx logo, where the space between the ‘e’ and ‘x’ looks like an arrow moving forward, reinforcing their goal of moving toward a connected world (“About FedEx,” n.d.).
Cultures are kept alive by methods of introducing and indoctrinating new members into an organization. Organizations select and adapt newcomers into their cultures through socialization, a process in which individuals learn the expected values, norms, skills, and behaviors of an organization (Van Maanen, 1976). This process begins when the person is selected. University and college fraternities, sororities, honor societies, religious institutions, sports teams, and other organizations also have their methods and ceremonies of introducing newcomers into their memberships. Zappos has a very stringent hiring process. As CEO Tony Hsieh stated, “We’ve actually said no to a lot of very talented people that we know can make an immediate impact on our top or bottom line. But because we felt they weren’t culture �its, we were willing to sacri�ice the short term bene�its in order to protect our culture (and therefore our brand) for the long term” (2009). Those who are accepted into the 4-week Zappos training program are offered $2,000 (plus what they earned during the 4 weeks) to quit. Hsieh said, “We want to make sure that employees are here for more than just a paycheck. We want employees that believe in our long-term vision and want to be a part of our culture. As it turns out, on average, less than 1% of people end up taking the offer” (2009).
Related to the socialization process is the concept of cultural strength, or the extent to which followers agree on the importance of values and methods of getting work done in the organization (Sorensen, 2002). Organizations bene�it when members adopt and support the values of their institutions. When there is consensus and congruence on organizational values, members are more likely to be motivated in attaining organizational goals. Zappos has high
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cultural strength. The company has a strong set of values used for selecting, rewarding, and retaining high performers. That company also has high value congruency, the �it between the organization’s and followers’ values.
Taken together, these leadership and organizational factors help de�ine and sustain cultures and are important to the morale and performance of organizations. Culture, as noted earlier, is one of the most important dimensions of an organization, because it embodies leadership values and serves to align an organization with its external environment through speci�ic strategies while integrating people inside the organization. This can be done through communication— the topic of our next section. The two are interrelated: Communication is necessary to convey culture, but it can only take place if the culture allows for it to occur freely and openly. Leadership communication, in particular, is a primary means of in�luencing followers and stakeholders for goal attainment. In the next section we present guidelines for effective communication that leaders, followers, and anyone in a leadership position can use.
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Diversity can serve as a marketing advantage if a company’s workforce re�lects and relates to the diversity of its customers.
Working effectively with diversity means creating a work environment in which everyone's differences are accepted and respected. People's differences are re�lected in many ways. Diversity is about sculture, age, gender, religions, interpersonal styles, and more.
Diversity in the Workplace
Critical Thinking Questions
Is creating and leading an inclusive workforce and teams that important for employee productivity and satisfaction. Explain. Is cultural diversity as important as organizational strategy and operations? Explain.
10.3 Leading Cross-Cultural, Internationally Diverse Workforces In addition to developing organizational culture and communicating strategically, leaders in public and private sector organizations must also ensure that organization members from different cultures, backgrounds, races, and experiences work cohesively together to achieve organizational goals. This requires that leaders understand what makes individuals different from one another and how those differences become relevant in the workplace. Leadership skills and experience in managing various types of people and operations are particularly in demand today (Pitts, 2007), due to changing demographics and perspectives as well as the rise of globalization. Leaders are now often called to actively promote workforce diversity, which refers to the variety of people within an employee base and can include background, education, language skills, personality, sexual orientation, and work roles, among other characteristics.
For organizational leaders, diversity—once implying separateness—now intentionally emphasizes inclusion. The United States has traditionally been considered a “melting pot,” in which a multitude of cultures meld together to create one. However, one of the implications of a melting pot is the suggestion that to get ahead in America, individuals from different cultures have to lose or disguise their identities, accents, traditions, and values in order to assimilate, or integrate, into mainstream American culture (Lussier & Achua, 2016).
Although this viewpoint still has value, more contemporary thinking includes the description of the United States as a “salad bowl”—a multicultural society in which being different is seen not as a liability but as a potential asset. People from different cultural backgrounds can be effectively assimilated into American culture and contribute their talents. Music, sports, entertainment, fashion, and other business and social domains illustrate how different professionals’ cultural styles and ideas add value, creativity, and richness to their organizations and society. Leaders’ responsibility in this new reality is to be inclusive. As Reeves wrote:
Inclusiveness is about an inviting environment for talent from all backgrounds as well as the equal opportunity for each person to succeed in a way that works for them. Inclusiveness makes room, not for different people to take a shot at the same de�inition of success, but for different people to actually create different de�initions of success. (Fujimoto & Charmine, 2010, p. 20)
With this in mind, we will argue that inclusiveness is a leader’s imperative—and can result in success stories for the self, followers, and organizations. We begin by exploring the factors affecting diversity today, before discussing the advantages of inclusiveness, leaders’ roles in managing workforce diversity, and the subtleties of multiculturalism in the workplace.
Scope of Diversity From Title:
Diversity in the Workplace: Playing Your Part (https://fod.infobase.com/PortalPlaylists.aspx? wID=100753&xtid=52672)
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Changing Workforce Demographics and Perspectives
Why should leaders and followers include people who are different than they are? Two major reasons: First, the U.S. population is changing, which affects workforce demographics. Second, globalization, or the increasing integration of regional and national economies, is changing the way the world does business. “Business as usual” is not a long-term option anymore.
The Bureau of Labor Statistics describes the U.S. workforce—generally those between the ages of 25 to 64—as “in the midst of a sweeping demographic transformation.” The nonpro�it projects that the white portion of the working-age population will decline from 82% to 63% from 1980 to 2020, while the ethnic-minority portion of the workforce will double to almost 40%. Speci�ically, the Hispanic/Latino working-age population is projected to almost triple to 17%. White men born in the United States are now less than half of the workforce (The National Center for Public Policy and Higher Education, 2008; Weiss, 2009).
The working-age population is also getting older. The number of workers 55 years and older will account for 25% of the U.S. workforce in 2020 and is expected to increase by 80% to over 33 million between 2004 and 2020 (“Administration on Aging,” 2010; Hayutin, Beals, & Borges, 2013). Finally, more women are entering the workplace. Women with children under 6 years of age are the most rapidly increasing segment of the workforce. By 2020, 28% of women age 65 to 74 are projected to be working, an increase from 15% in 2000. Also 35% of men age 65 to 74 will still be employed, an increase from 25% in 2000 (Hayutin, Beals, & Borges, 2013). Leaders must recognize these various demographic shifts and ensure that their approaches and policies do not marginalize the average worker.
The second factor, globalization, can be seen as the metaphorical shrinking of the world and erasure of borders, in large part due to advances in technology and travel. The result is a mixing of cultures, business practices, and people in workforces. Many people are now generally more conscious of the world as a whole, and foods and products from various countries can be found in your local store. Companies are now able to conduct business on a global scale, employing people all over the world through outsourcing and recruiting talent. Professionals can �ly from country to country for meetings or simply hold video conference calls. The U.S. workforce is affected at all levels, as people of different educational backgrounds, generations, and cultures interact. For example, an increasing number of CEOs are from countries other than the one where their company is headquartered (Justin, 2004). As one researcher said, “More than ever, people have to interact and communicate with others who come from diverse backgrounds” (”Encyclopedia of Management”, n.d.).
Perspectives on diversity are also changing, and leaders must recognize this to remain current and relevant. Based on reputable surveys, some of the top companies that demonstrate a commitment to contemporary diversity include Novartis Pharmaceuticals Corporation, for its diversity-management progress; MasterCard Worldwide for inclusive culture; Sodexo for mentoring; EY for diversity councils; Merck for employee resource groups; Wyndham Worldwide for supplier diversity; and Accenture for global diversity (Diversity Inc., 2014). Black Enterprise ranked the following companies among 40 selected as having the best diversity program: A�lac Inc., Allstate Insurance Co., American Express Co., Aramark, AT&T Inc., Bank of America Corp., Coca Cola®, Comcast Corp., and Consolidated Edison Inc. (Mays, 2015).
Figure 10.3: Traditional versus contemporary diversity perspectives
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Source: From Oshiotse, A., & O’Leary, R. (2007). Corning creates an inclusive culture to drive technology innovation and performance. Global Business and Organizational Excellence, 26(3) 12. Reprinted by permission.
The traditional diversity model in Figure 10.3 shows how the company de�ined diversity in terms of race, gender, age, disability, lifestyle, and pay level before its cultural transformation. The inclusive model re�lects the actual changes in contemporary workforces that view diversity more broadly to encompass differences in personality, nationality, position, military experience, work style, language, parental background and in�luences, income, competency, and function.
Companies that value and recognize diversity as a competitive advantage encourage individuals to be open to and respectful of others’ differences as a starting point for innovation and performance; this philosophy is a key part of a diverse organizational culture. A broader perspective of inclusiveness opens individuals to both social and professional relationships, eliminates any feelings of marginalization, and engages the full talents and capabilities of followers—just some of the advantages of diversity.
The Value of Diversity
Diversity is not simply a requirement of the times; it also comes with some distinct advantages. According to researchers, diversity (1) creates a socially responsible culture and climate and enhances an organization’s reputation; (2) helps recruit and retain talented people; (3) can enhance performance; (4) can provide creative marketing advantages and improve problem-solving and decision-making capability; and (5) can produce cost savings.
Creating a Socially Responsible Culture and Enhancing Reputation Leaders who demonstrate that they value diversity and inclusion send a message about the culture, values, and reputation of the organization; namely, that fairness counts, the organization respects every individual regardless of differences, and the organization goes beyond the letter of the law in valuing its workforce. Robertson and Park’s (2006) study of 100 �irms showed a positive relationship between diversity reputation and book-to-market equity. They concluded that “Our analyses suggest that economic bene�its generated from diversity reputation may primarily derive from capital rather than product markets. Further, �irm performance declines with increases in the representation of racial minorities in leadership up to a point, beyond which further increases in diversity are associated with increases in performance” (Roberson & Park, p. 3). Although diversity does not solve all problems for �irms or promise effectiveness, we can say that diversity can count in many ways for �irms, including performance. Eisenhart (2014) states that diversity, especially leadership diversity, creates a competitive advantage. Eisenhart (2014) cites several studies that have shown that having women on corporate boards or executive committees results in a higher return on equity, sales, invested capital, and return on equity.
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Helping Recruit and Retain Talented People Talented people are attracted to companies that have the best reputations for valuing their employees. Fortune magazine publishes an annual list of the 100 best companies to work for. Human resources recruiters also focus on diversity when recruiting. There is some evidence that minority job seekers tend to look for companies with a proven diversity record. Many companies have been actively seeing out diversity. An example is AT&T, whose goal is to “have the best talent at the table from every background,” according to the executive director of Global AT&T College Recruiting, Rick Gomez (Salemi, 2014). Other companies, such as Accenture and Bank of America are also seeking out diversity for recruitment through partnerships with colleges (Salemi, 2014).
Enhancing Performance Based on the research of MIT Professor Thomas Kochan, a �irm’s performance can be enhanced when the �irm integrates diversity with its strategy, cultivates an organizational culture that supports inclusiveness, and provides needed training (Dubrin, 2010; Hansen, 2003); and, as previously stated, Eisenhart (2014) summarized several studies that show that having women on corporate boards or executive committees results in a higher return on equity, sales, invested capital, and return on equity.
Company employees not only work together better but also are better equipped to tap into one another’s strengths. Training of the entire workforce is needed to introduce and explain the advantages of inclusive policies and programs. For many older and even younger employees, learning to work with people who are different from them can be challenging. Organization-wide diversity and inclusion training programs also send the message that the leaders and culture support these policies and programs.
Providing a Creative Marketing Advantage Diversity can serve as a marketing advantage if a company’s workforce re�lects and relates to the diversity of its customers. Multicultural workforces and decision makers can understand the needs, tastes, and buying habits of a matching multicultural customer base (Yu, 2002). Lauri (2012) believes that there are many bene�its to diversity including “improved marketing and customer service through better understanding and accommodation of diverse customer groups and their needs,” as well as “improved employee creativity,” among others. For instance, Maria Elena Lagomasino, an asset manager with Cuban roots and a long career in private banking, has designed her �irm’s website (http://www.genspring. (http://www.genspring.com) com (http://www.genspring.com/) ) to translate �lawlessly into Spanish, which is bound to appeal to a Hispanic clientele. Increased market share, productivity, and innovation are a result of having an inclusive, globally diverse cultural workforce.
Producing Cost Savings Organizations that value employees and treat them fairly and inclusively can experience lower levels of job dissatisfaction, absenteeism, and turnover, especially among minority members who have problems �itting into exclusive, closed cultures.
Absenteeism and turnover often result in a less productive workforce and divert resources by demanding a continual retraining of employees. Also, many large, notable �irms have paid costly settlements and judgments for discrimination against women, minorities, age groups, and people with physical disabilities in policies, practices, and behaviors. These �irms include FedEx, Mitsubishi, EMC Corporation, eBayTM, Bayer, and Abercrombie and Fitch, to name only a few. Despite the bene�its listed here, an inclusive diversity program is only bene�icial if it is effectively managed. Increased con�lict among members, especially in teams, can occur when people are not collaboratively led and integrated (Klein & Harrison, 2007). Even those leaders who have put a program in place to support diversity can inadvertently allow biases to unconsciously shape behavior. Therefore, it is important not only to have a program in place, but it must be managed and grown, and employees need to be informed (Groysberg & Connolly, 2013).
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10.4 Inclusiveness: Leaders’ Moral and Legal Imperative As we have seen, there are some compelling reasons for inclusiveness: It acknowledges the reality of our world, it can give an organization a creative and �inancial advantage, and it is a moral obligation for leaders interested in fairness and social responsibility. Inclusiveness is also a legal issue. The law forbids discrimination, or actions, treatment, or consideration toward others based on class or category rather than individual merit. Numerous executive orders and regulatory guidelines require that all people be given an equal opportunity to be employed, regardless of age, race, gender, disability, sexual orientation, and other classi�ications.
In a perfect world, societies and organizations would be inclusive and diverse. However, that is not the case, and the fact that such laws are required is proof that discrimination and inequality persist, even outside the United States. Discrimination is often a result of ethnocentrism, prejudice, and stereotypes. Ethnocentrism is the belief that one’s group or culture is inherently superior to other groups and cultures. This belief leads to close-mindedness and homogeneous cultures with the same values, beliefs, norms, expected behaviors, and other characteristics. Such mind- sets and cultures exclude others who are different. Prejudice is a preconceived opinion or adverse feeling that is not based on reason or experience.
Prejudices often lead to stereotypes, which are oversimpli�ied, irrational generalizations about groups or classes of people that are often negative and usually untrue. When followers and leaders act and communicate from their prejudices and stereotypes about particular individuals or groups, discrimination occurs.
Scholars and practitioners agree that overcoming negative stereotyping and discrimination in the workplace must start at the top with leaders’ incorporating inclusive policies in the mission, values, strategy, and culture of the organization (Hansen, 2003). Presidents and CEOs must champion and model the cause and value of inclusiveness in the organization ( Meisinger, 2008). They too must be mindful of subtle prejudicial stereotyping and its destructive effects in their own thinking and perception as well as that of other organizational members. Like most people, leaders are not uniformly inclusive or culturally aware, and arriving at such an awareness can take time.
Stages of Intercultural Awareness: Toward Inclusive Leadership
Leaders differ in their awareness, cultural intelligence, and sensitivity to diversity. Milton Bennett’s framework stages of intercultural awareness (2006) shows six stages on a continuum of individual awareness and actions toward cultural diversity. Figure 10.4 illustrates one version of that framework. The continuum moves from the �irst stage, where leaders—and followers—are resistant and defensive about diversity, to the last stage, where they are aware and fully accepting of people with differences. At the �irst stage, individuals have a low awareness of cultural differences and feel threatened by and isolated from minorities and international people who are different from them. An “us versus them” ethnocentric attitude predominates and culturally different people are seen as a problem to be avoided. Leaders offer little to no help in developing a culture or programs to integrate people with differences into the organization.
Figure 10.4: Leadership stages of intercultural and diversity awareness
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Source: Based on Bennett, M. (1986). A developmental approach to training for intercultural sensitivity. International Journal of Intercultural Relations, 10(2), 196.
At the second stage, people start to minimize differences and begin to see similarities in others. Their own culture is still viewed as the most important, and culturally different people are viewed in a romantic, trivialized light. Leaders still do not take action to actively integrate and welcome members who are culturally different.
At the third stage, individuals accept differences in others and believe that their culture is not unique or different. They show curiosity and respect toward but not agreement with all cultural differences. Leaders at this stage recognize that people from minorities, people of different races and genders, and people with disabilities have a place in and role to play in organizations. Talented minority employees may be sought out. Diversity training programs begin to evolve (Daft, 2011).
At the fourth stage, individuals change from an ethnocentric to an ethnorelative mind-set and way of thinking. They understand that their culture and worldview is not the only one, or even the best one, and they feel comfortable relating to different people from their perspectives and ways of thinking. Leaders commit to inclusiveness programs and actively recruit minorities, building programs to help people adapt to their working environment.
At the �ifth stage, the contemporary inclusive leader emerges. Women, people from ethnic minorities, and people from different cultures take leadership roles, becoming leaders and board members. The �ifth stage is a worthy goal toward which many organizations are striving but at which they have not yet arrived.
Leadership Initiatives for Achieving Inclusiveness
Inclusiveness begins with the leader, who leads by example by treating others inclusively and cultivating a culture supportive of diversity. Top-level leaders must be committed to inclusion policies and practices, embedding them in the mission, values, and strategies of the organization. Leaders must, for example, actually use inclusive terms and language in mission, values, and policy statements. Otherwise, such initiatives become super�icial and ineffective (Campbell, 2003); that is, employees notice that leaders who do not “walk the talk” and say what they mean are not serious about such programs as inclusiveness. Other necessary ingredients to achieving full organizational inclusiveness include
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Because workforces are becoming global, understanding teams and individuals with different national values requires multicultural leadership competencies.
implanting a diversity-supportive culture and diversity awareness training for employees and leadership education (“Diversity or Diversion?” 2002).
Concrete initiatives for achieving inclusiveness include the following:
1. Holding managers accountable (Dubrin, 2010). Inclusiveness policies that are not speci�ic and cannot be rewarded, or have rewards held back, do not get implemented. Walmart holds managers accountable for meeting speci�ic, measurable diversity objectives and goals. Their bonuses are reduced if such goals are not met. The company recently hired a global chief diversity of�icer, who will join the executive team.
2. Including diversity among organizational leaders. Mary Barra at General Motors, whom we discussed in a previous chapter, continues to take steps to change the culture of that company (Most Powerful Women in Business, 2014). She changed the 10-page dress code at GM to simply state “dress appropriately,” shocking many of the employees who have been at the company for years (Colvin, 2014).
3. Measuring diversity in department and business-unit goals and objectives. Walmart, again, is among the companies that includes measurable diversity targets in its goals and objectives for managers.
4. Creating minority recruitment, retention, and mentoring programs. DiversityInc is an organization that annually recognizes �irms in a “Top 50 Companies for Diversity” (DiversityInc, 2011). The �irms recognized must have one or more of the program elements of minority recruitment, retention, and mentoring programs, as well as some of the other inclusion factors we have discussed. Some of those companies include AT&T, Verizon, Allstate, and PricewaterhouseCoopers. Kraft Foods, one of the top 10 companies in this list, hosts 10 employee resource groups that focus primarily on recruitment, mentoring, and marketing. Based on their most recent �igures, the company has 60% of its employees, and 70% of managers, participating in the mentoring program.
5. Implementing organization-wide diversity-awareness training programs. Leaders must introduce and integrate inclusiveness training and initiatives throughout the organization in order for cross-cultural integration to succeed. All 50 companies on the DiversityInc list have diversity awareness training and mentoring programs.
Inclusiveness, however, is not necessarily a clear-cut subject. A leader must make strategic decisions based on fairness, social responsibility, legal obligations, and practicality. Dubrin (2010) noted that a leader who chooses to hire �ive developmentally disabled unemployed people “would be acting in a socially responsible manner because hiring these people would transfer responsibility for their economic welfare from the state or private charity to the employer.” However, he also noted that “some would argue that unless hiring these people is cost effective, the company is neglecting its responsibility to shareholders.” (p. 450)
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Take the Lead Credits
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10.5 Cross-Cultural Value Differences and Diversity It has already been suggested that understanding different cultures is an important aspect of organizational diversity and inclusiveness. Workforces are becoming more global in membership and assignments, so leaders must be able to understand how culture affects the followers’ motivations and habits as well as what multicultural leadership competencies are required to in�luence and motivate these followers.
National culture is based on values and norms (social rules and guidelines) that in�luence and guide people to control their behavior. Values in�luence our ethics (what we think is right and wrong), our decisions, and the behaviors we consider appropriate. Values also in�luence relationships between leaders and followers, because relationships are based on shared values. Values also in�luence and de�ine the norms that stipulate acceptable behaviors for achieving organizational goals, and they affect the way individuals interact as leaders and followers.
Researchers have spent considerable time identifying the various value orientations of different cultures, to understand how to best in�luence and motivate multicultural followers.
We will examine the dimensions elucidated by Geert Hofstede’s work and the GLOBE study before singling out some key competencies for leading a multicultural group. Leaders—as well as followers—can use these dimensions as a starting point for understanding others. An individual who struggles when working alone may be from a collectivist society in which group and team work is more motivating. Another individual who acts overly aggressive and assertive when problem solving or communicating may simply be acting out typical behavior in his or her culture. As you read, consider how your national or cultural values in�luence your attitudes and behaviors. At the same time, however, these studies are generalizations rather than rules. Not every individual follows his or her described cultural values. Fiske (2002) noted that “value trumping” must also be kept in mind—that is, individuals in speci�ic contexts may use values that differ from those in their country cultures.
Hofstede’s Five Cultural Dimensions
Geert Hofstede’s (1980, 2001) pioneering study on national cultural values of over 100,000 IBM employees in over 50 countries is useful for understanding individual cultural differences across countries. Each of Hofstede’s �ive cultural dimensions de�ines, in part, an individual’s identity through his or her national country values and norms. The dimensions should be viewed on a continuum: individualism and collectivism, high and low uncertainty avoidance, high and low power distance, long-term and short-term time orientation, and masculinity and femininity.
Individualism and Collectivism This dimension refers to the way members of a society view themselves and their values. A person from a society that is high in individualism relies on independence of the self, not a group or collective, as his or her primary reference. These members are motivated by individual incentives. Members from a collectivist society, on the other hand, see themselves as part of a group, extended family, ethnic group, or organization. Their primary values are oriented toward a group perspective and they are motivated by group incentives. Canada, the United States, and Great Britain are individualistic cultures; Mexico, Greece and Japan are collectivistic cultures.
Japan’s national culture may be moving from collectivism to individualism because of a declining economy and the need for self-reliance. Many of Japan’s corporate practices have changed. Lifetime employment has given way to corporate layoffs and job insecurity (Lussier & Achua, 2007; Pothukuchi, Damanpour, & Choi, 2002). It is also interesting to note that Americans are described as individualistic with values based on independence, “rugged individualism,” and self- reliance, but they rank among the top charitable givers in the world. As stated earlier, these classi�ications depend on the speci�ic context and particular characteristics and experiences of individuals and groups.
High and Low Uncertainty Avoidance People in cultures with high uncertainty avoidance do not tolerate risk easily, tend to avoid the unknown, and are content with predictability and certainty. Generally, managers in Japan, Argentina, Italy, and Israel prefer predictable, structured work situations.
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Leaders, managers, and followers in high power-distance cultures like Japan do not treat each other as equals. People with higher position power expect to be shown deference and respect.
People from cultures with low uncertainty avoidance are comfortable with and tolerate unpredictability, ambiguity, and the unknown. Managers from the United States, Australia, and Canada accept and even seek risk and uncertainty at work and in their personal lives. These managers also tend to be more risk oriented and less interested in controlling work products and outcomes.
High and Low Power Distance This dimension measures how a person views authority, status, and power, which can affect communication and decision making between leaders and followers. A person with an orientation toward high power distance generally sees the boss, supervisor, or person in charge as having more authority and usually shows more deference. Leaders, managers, and followers in cultures with high power distance (Mexico, Japan, Spain, and France) do not treat each other as equals. Hierarchy and top-down authority count. In cultures with low power distance (Germany, the United States, and Ireland), the opposite is true: Leaders and managers are treated as equals by followers and employees. Participative decision making in and by groups is a common practice. Followers with a low power distance generally take directions from leaders when they think or have evidence that the leader is right in his or her decisions and directions.
Long-Term and Short-Term Time Orientation People from cultures that have a long-term or future time orientation value investments and savings and persistence in goal achievement. They are less motivated by short-term rewards and immediate results. They can delay grati�ication and are satis�ied when their investments promise good returns. Asian countries have generally adopted this orientation. Their high rates of per capita savings have re�lected such a view. A short-term time orientation, on the other hand, values personal happiness and stability in the present. Quick grati�ication is important for those with this orientation. For example, to offer a long-term reward for a task to be completed in a day, week, or shorter time frame would not be motivating for a follower from a culture that has a short-term time orientation. The United States and European countries have historically had this time orientation, as is re�lected in their habits of saving less and spending more.
Masculinity and Femininity This dimension, which in today’s terms is somewhat stereotypical, shows an orientation that pursues material assets versus personal social connections. Masculinity describes the stereotypical cultural values that emphasize a quest for money and material objects. Values based on assertiveness and competitiveness re�lect this orientation. Japan and Italy are high on masculinity. Femininity, another stereotypical dimension, is at the other end of this continuum and is based on values that emphasize developing and nurturing personal relationships and an enriching quality of life. Sweden and Denmark are high on this dimension.
GLOBE Study
The Global Leadership and Organizational Behavior Effectiveness, or GLOBE, study ( Dorfman, Hanges, & Brodbeck, 2004; House et al., 2004; “Leader Effectiveness and Culture,” 2014) frames cultural values somewhat differently. This is an important continuing study because of its breadth and depth relating to global cultures on leadership. The GLOBE study researchers (House et al., 2004) surveyed 17,000 people in 62 societies and came up with six dimensions—in contrast to Hofstede’s �ive—which they referred to as “culturally endorsed leadership theory dimensions,” or CLT dimensions.
3.5.1 Charismatic/value-based leadership re�lects the ability to inspire, motivate, and expect high-performance results from others on strong core beliefs and values.
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3.5.2 Team-oriented leadership emphasizes effective team building and execution of a common goal among team members.
3.5.3 Participative leadership re�lects managers’ involving others in making and implementing decisions.
3.5.4 Humane-oriented leadership re�lects supportive and considerate leadership, including compassion and generosity.
3.5.5 Autonomous leadership refers to independent and individualistic leadership.
3.5.6 Self-protective leadership ensures the safety and security of the individual. It is self-centered, face saving, status oriented, and procedural in its approach.
The GLOBE project team then identi�ied leadership behavioral pro�iles for 10 regional clusters of countries using the six dimensions (see Table 10.2). Each cluster possesses a high, moderate, or low perceived value for each of the six leadership dimensions.
People from Eastern European countries generally view an effective leader as one who is highly autonomous (independent, individualistic, and unique) and self-protective (somewhat self-serving), and moderately charismatic/value based (visionary, inspirational, trustworthy, decisive, and performance driven), team oriented (collaborative, diplomatic, and administratively competent), and humane oriented (considerate and supportive of others’ needs). Leaders are valued lower on being participative (involving others in making and enacting decisions).
People from Latin American countries, by contrast, value highly charismatic/value-based leadership that is also highly team-oriented and self-protective and moderately participative and humane oriented. Independence and individualism are of lower value in these countries.
Latin European countries desire leadership behaviors that are charismatic/value based, participative, status oriented and procedural, and collaborative with teams. Leaders who are independent and consideration oriented are valued less.
Table 10.2: Regional culture clusters: Desired leadership behaviors
Charismatic/value based
Team oriented
Participative Humane oriented
Autonomous Self- protective
Eastern Europe
Moderate Moderate Lower Moderate High High
Latin America High High Moderate Moderate Lower High
Latin Europe High Moderate Moderate Lower Lower Moderate
Confucian Asia Moderate High Lower Moderate Moderate High
Nordic Europe High Moderate High Lower Moderate Lower
Anglo High Moderate High High Moderate Lower
Sub-Saharan Africa
Moderate Moderate Moderate High Lower Moderate
Southern Asia Moderate Moderate Lower Moderate Moderate High
Germanic Europe
Moderate Moderate Moderate Moderate High Lower
Middle East Lower Lower Lower Moderate Moderate High
Source: Adapted from House, R., Hanges, R., Javidan, P., Dorfman, M., Gupta, T. W., & Gupta, V. (Eds.). (2004). Culture, leadership, and organizations: The GLOBE study of 62 societies. Thousand Oaks, CA: Sage; and Northouse, P. (2010). Leadership: Theory and practice (5th ed.). Thousand Oaks, CA: Sage.
The Confucian Asian country cluster prefers leaders who are self-protective and status oriented, while also being team and humane oriented. Leadership behaviors that are charismatic/value based, considerate of others, and independent
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are less valued. Participative leadership is perceived as less important in these countries’ cultures.
Nordic European cultures see the ideal leader as charismatic/values based (inspirational and visionary) and participative, while being moderately team oriented and independent. Compassionate, status and procedurally oriented leadership is valued less.
Anglo countries (including the United States) value leadership that is charismatic/values based, highly participative, and considerate of others. People from these cultures report that team oriented and autonomous leadership is moderately important. Autocratic and self- protective leadership behaviors are least valued.
Sub-Saharan African respondents reported that desired leadership is �irst and foremost caring, considerate, compassionate, and generous, followed by charismatic/values based, team oriented, participative, and at the same time status and procedurally oriented. The least desired leadership behavior from this sample is self-protective—that is, self- centered, face saving, status oriented, and procedural.
Southern Asian countries report similar results to the Confucian Asian cluster with regard to what is desired in an ideal leadership pro�ile: self-protective, humane, team oriented, and charismatic/values based behavior. These countries do value charismatic/values based leadership, but not as much as the other dimensions. Although these countries value less autonomous leadership, they believe this style is more effective than shared, collaborative leadership.
Germanic European countries desire leadership that is highly independent while also being charismatic/value based, participatory team oriented, and considerate of others. They value less leaders who are status conscious, procedurally oriented, and concerned about saving face.
The Middle Eastern country cluster views the ideal leader differently than the other regions. In the Middle East, the desired leadership pro�ile is self-protective—that is, an emphasis is placed on status and procedure. Independent and humane leadership are also valued, but less than the self-protective approach. Less important are charismatic/values based, participatory, and team-oriented leadership behaviors. It is interesting to note these reported results include the countries of Turkey, Kuwait, Morocco, and Qatar. After the populist uprisings and overthrow of the Egyptian and Tunisian presidents, as well as revolts against the leadership in Yemen, Bahrain, Libya, Syria, and Jordan, the next GLOBE survey may alter the results for this country cluster, especially if it expands the sample to those countries that overthrew their leadership.
The GLOBE researchers also produced a list of 22 universally endorsed leadership attributes: trustworthy, foresight, intelligent, positive, con�idence builder, effective bargainer, honest, just, plans ahead, dynamic, motivational, decisive, coordinative, excellence oriented, win-win problem solver, communicative, team builder, dependable, encouraging, motive arouser, informed, and administratively skilled. The list suggests that these leadership characteristics work well across different cultures and societal values. A portrait of an exceptional leader from this same study is one who has integrity, is charismatic and value based, and is competent on interpersonal skills (Dorfman et al., 2004; Northouse, 2010). The same study listed the following leadership characteristics as universally undesirable: egocentric, dictatorial, asocial, irritable, ruthless, loner, and noncooperative.
We have discussed most of these leadership traits, personality characteristics, and styles already. It may be helpful to refer back to the previous two chapters to get a sense of how your own cultural values support these different styles. How do your leadership style and characteristics, based on the assessments you have taken so far, compare to the characteristics desired most and least in this study?
Cultural Intelligence and Cultural Sensitivity
The last set of important multicultural leadership characteristics are cultural intelligence and cultural sensitivity. Cultural intelligence (CQ) is a person’s ability to interpret (reason and observe) another’s unfamiliar and ambiguous gestures and situations and to respond appropriately (Earley & Mosakowski, 2004). Liao (2015) describes cultural intelligence as having three main aspects: cultural knowledge, cross-cultural skills, and cultural metacognition. Cultural knowledge involves content and process in relation to other cultures. Cross-cultural skills involve relational, tolerance of uncertainty, adaptability, empathy, and perceptual acuity. Cultural metacognition involves control over thinking and learning through observation, analysis, and re�lection.
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Cultural intelligence is a person’s ability to interpret another’s culturally unfamiliar and ambiguous gestures and respond appropriately.
Similar to emotional intelligence, CQ involves being able to see differences in nonverbal and verbal language, physical behaviors, attitudes, and ways of doing things that are particular to certain cultures. For example, a Middle Easterner is a guest at a business dinner in the United States. The discussion turns to politics, with very divisive opinions being expressed. The guest picks up cues that one of the executives is very uncomfortable with the topic. The guest is also sensitive about some of the issues. One of the executives turns to the guest and asks for her “honest” opinion. She very calmly and appropriately suggests that there are different views on this complex subject and that she would feel more comfortable passing on the conversational offer this time. A sigh of relief is felt and the discussion changes. Cultural intelligence enables a person to pick up verbal and nonverbal cues when interpreting situations and then quickly adapt, as did the guest in the example.
Cultural intelligence has three facets or components: First, the cognitive component (head) is the ability to observe, listen, and pick
up factual clues about relevant behaviors, such as sharp differences of opinion as in the example just given, deadlines, and the ways people greet and address each other. The physical component (body) relates to actions, body language, speech, gestures, habits, and expressions. In some Middle Eastern Islamic cultures, a male guest does not touch women, even to shake hands. In a French social situation, on the other hand, you may be kissed on the cheek by a host when entering or leaving that person’s house. In a Japanese setting, you may slightly bow to greet a new executive or professional, but not shake hands.
The third component of cultural intelligence is the emotional/motivational (heart) component, which involves having self-con�idence and courage to keep trying and not give up when you make cultural mistakes. Adapting to new settings is important and can be trying. Gaining cultural intelligence requires time but also preparation—reading and understanding different cultural habits and values, attending different cultural events, and getting to know people from different cultures. Having an open mind and heart also helps with the adaptation process.
Cultural sensitivity is another important multicultural leadership characteristic involving the ability to be patient, adaptable, �lexible, and willing to listen and learn (Dubrin, 2010). Both cultural sensitivity and intelligence require gaining an understanding of different country cultural values (as discussed earlier). See Assessment 10.1, Cross-Cultural Skills and Attitudes.
When a person is thrown into an international assignment to either lead or work with others on a project, with all the time pressures and distractions that accompany work deadlines, not being prepared to work with team members from one or more different cultures can be challenging. Studies on expatriate assignment failure rates indicate that a large number do not succeed as planned. For example, Haile, Jones, and Emmanuel (2010) concluded:
There are many issues that lead to failure in international assignments. Some of the reasons for international assignments ending in failure include the ongoing lack of training, family problems, culture shock, relieving a dif�icult employee, stressing on technical quali�ications and lack of cross cultural training. Many expatriates are also reluctant to take long-term assignments. Concerns over spousal employment and disruptions to children’s schooling, political insecurity and individual danger have intensi�ied. Managers of multinational corporations (MNCs) must not only train the expatriates, but also their families in native languages, social behaviors, and cultural norms to prevent culture shock and promote a smooth transition to the new country. (2010, p. 10)
Assessment 10.1: Cross-Cultural Skills and Attitudes
Instructions
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Listed here are various skills and attitudes that various employers and cross-cultural experts think are important for relating effectively to coworkers in a culturally diverse environment. Indicate whether or not each statement applies to you.
Applies to Me Now Not There Yet
1. I have spent some time in another country.
2. At least one of my friends is deaf or blind or uses a wheelchair.
3. Currency from other countries is as real as currency from my own country.
4. I can read in a language other than my own.
5. I can speak in a language other than my own.
6. I can write in a language other than my own.
7. I can understand people speaking in a language other than my own.
8. I use my second language regularly.
9. My friends include people of races different from my own.
10. My friends include people of different ages.
11. I feel (or would feel) comfortable having a friend with a sexual orientation different from mine.
12. My attitude is that although another culture may be very different from mine, that culture is equally good.
13. I would be willing to (or already do) hang art from different countries in my home.
14. I would accept (or have already accepted) a work assignment of more than several months in another country.
15. I have a passport.
Answering “Applies to Me Now” to 10 or more of the items indicates that you are likely to succeed in an internationally and culturally diverse work environment.
Answering “Not There Yet” to 10 or more items indicates that you need to develop more awareness and skills to adapt in different cultural settings. Experience in cross-cultural environments and with people not like yourself is also important.
Source: Dubrin, A. (2010). Leadership. Mason, OH: South-Western, Cengage Learning. Copyright 2010. Reproduced by permission.
Cultural sensitivity as a competency involves taking a deep breath and not seeing the world and others from only your point of view and values or assuming that you and your worldview are superior to theirs (ethnocentricity). Even though globalization and electronic news sources covering the same or similar stories are creating common understanding among peoples, cultural value differences still persist.
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Developing a tolerance for cultural differences requires a learned sensitivity. Your culture, language, ways of communicating, work-product expectations, and deadlines are not the only, or sometimes the most important, ones when working on a global team. Although English is still the common language for doing business globally, it is necessary for multicultural leaders and followers to develop sensitivity toward language nuances and differences, work habits, and work roles. For example, nonnative English-speaking professionals may need more time to fully understand subtle meanings. Some cultures do not reward employees for working on weekends and holidays. Finally, in some countries, women may not have the same privileges or status as in most Western countries: An American female manager or supervisor on assignment might �ind that a local team of male members has dif�iculty accepting her authority, and might have to react with tolerance and sensitivity (Dubrin, 2010).
Robert Lewis offered an important question that leaders can ask when confronted with a situation where cultures may collide: “My job requires that I manage your performance. Your job is to meet or exceed performance standards. How can I help you do that?” (Lewis, 2000, p. 24). The question re�lects �lexibility and sensitivity while remaining aligned to one’s professional identify and organizational priorities.
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Summary & Resources
Chapter Summary This chapter de�ined culture as the shared meaning of values, beliefs, and assumptions about how things are done and what behaviors are acceptable (Connors & Smith, 2000; Schein, 1993, 2010), and it argued that culture is the most important internal organizational dimension. When culture is effective, the organization stands to be effective.
Schneider, Goldstein, and Smith (1995) argued that “the people make the place.” People, including leaders, are responsible for helping de�ine and align the strategy, structure, processes, and culture of an organization in order to effectively respond to the environment. Founders �irst launch cultures based on their values, but leaders must later identify values and cultures that effectively connect their organizations to changing environments, markets, and customers through speci�ic strategies, policies, and procedures—which are shaped by the organization’s culture. It is helpful, for both leader and follower ef�icacy and effectiveness, to be cognizant of the differences between high- performance and low-performance cultures—and leadership—as well as the differences between achievement, bureaucratic, clan, and adaptive cultures.
The people of an organization should re�lect the diversity of the markets it serves. Diversity is an essential part of organizational cultures in this century. Becoming an effective leader involves gaining an awareness of your attitudes and differences and the ability to work with people different from yourself in the workplace. Leaders who cannot understand cultural differences in people cannot lead or manage them. Traditional differences in the workforce—that is, race, gender (socially constructed attributes for men and women), sex (biological and physiological characteristics of men and women), age, and disability—are now compounded by other factors: nationality, language, personality, work style, generation, competency, and pay level, to name a few. Leaders’ visions, missions, values, employment tactics, and training programs must include diversity in order to secure a competitive advantage.
As an emerging or experienced leader, concepts in this chapter are designed to help you “read” and understand before leading organizational cultures in which you already or will work both locally and internationally.
Web Resources Managing Across Cultures
http://video.foxbusiness.com/v/3895436/managing-across-cultures (http://video.foxbusiness.com/v/3895436/managing-across-cultures)
Intercultural consultant Michael Schell talks about understanding cultural differences in business.
What Makes a Great Leadership Team?
http://gmj.gallup.com/content/113338/what-makes-great-leadership-team.aspx (http://gmj.gallup.com/content/113338/what-makes-great-leadership-team.aspx)
A strengths assessment test offers some insights.
Executive Team Leadership Effectiveness
http://www.learningcenter.net/library/leadership.shtml (http://www.learningcenter.net/library/leadership.shtml)
Use this assessment to identify your personal strengths and weaknesses as a team leader.
Build a Tower, Build a Team
http://www.youtube.com/watch?v=H0_yKBitO8M (http://www.youtube.com/watch?v=H0_yKBitO8M)
Autodesk’s Tom Wujec presents some interesting �indings on team building with marshmallows and spaghetti.
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Critical Thinking Questions 1. You are invited to give a talk on issues companies are experiencing recruiting and retaining new employees
(high potential candidates) and why organizational culture matters in this process. Use this chapter and other sources to outline your main points.
2. Describe the type of organizational culture in this chapter in which you would best and least effectively work and why.
3. Explain what businesses can do in their selection processes to promote diversity and inclusion when nonquali�ied or ineligible diverse candidates are denied organizational participation. (This is a problem when managing and balancing diversity inclusion and legal compliance.)
4. Select a leader (in government, business, private or public sector) in the news whose actions, words, and record demonstrate cultural intelligence and sensitivity; then select a leader who does not demonstrate these characteristics. Explain your insights from this comparison.
5. Explain how results in the GLOBE study can be helpful in understanding leadership. 6. Describe your cross-cultural skills and attitudes. Describe any issues you might experience in leading a cross-
culturally diverse team.
Key Terms
achievement culture A type of culture that responds to stable, external environmental opportunities and threats and generally functions in mature markets.
adaptive culture A type of culture that is open to and embraces external change and is characterized by �lexibility.
bureaucratic culture A type of culture that focuses on internal environments; values stability, status, order, and ef�iciency; and emphasizes rational and formal methods, relying on rules and procedures.
clan culture A type of culture that emphasizes cooperation, consideration, fairness, and teamwork; an internally focused culture that stresses �lexibility.
competing values framework Used for classifying different cultures.
cultural intelligence (CQ) A person’s ability to interpret (reason and observe) another’s unfamiliar and ambiguous gestures and situations and to respond appropriately.
cultural sensitivity A person’s ability to be patient, adaptable, �lexible, and willing to listen and learn in multicultural settings.
cultural strength The extent to which followers agree on the importance of values and methods of getting work done in an organization.
discrimination Actions, treatment, or consideration toward others based on class or category rather than individual merit.
diversity Understanding that each individual is unique. Encompasses acceptance and respect. Involves recognizing our individual differences, including the dimensions of race, ethnicity, gender, sexual orientation, socio-economic status, age, physical abilities, religious beliefs, political beliefs, or other ideologies.
ethnocentrism
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The belief that one’s group or culture is inherently superior to other groups and cultures.
Hofstede’s �ive cultural dimensions Framework for understanding cross-cultural communication, it describes the relationships between a society’s culture based on the values of its members. The cultural dimensions are individualism and collectivism, high and low uncertainty avoidance, high and low power distance, long-term and short-term time orientation, masculinity versus femininity.
inclusiveness An open environment that includes people from a variety of backgrounds; not limited to a few certain people. Provides each person an equal opportunity to succeed in a way that works for them.
organizational culture Any activity that requires employees to work differently.
prejudice A preconceived opinion or adverse feeling that is not based on reason or experience.
stages of intercultural awareness Milton Bennett’s Developmental Model of Intercultural Sensitivity.
value congruency The �it between the organization’s and followers’ values.
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11 Power, Politics, and Con�lict
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Learning Outcomes
After reading this chapter, you should be able to:
1. De�ine power generally and within organizations, and identify the classical sources of power.
2. Describe methods for gaining power.
3. List both positive and negative tactics for in�luencing others, as well tactics that could be deemed morally or ethically questionable.
4. Identify and explain the possible outcomes for the use of power.
5. Discuss the types of con�lict, the possible sources of those con�licts, styles of managing con�lict, and �inally strategies for resolving it.
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Spencer Platt/Getty Images News/Getty Images
Ellen Johnson Sirleaf, former president of Liberia, was an effective leader by in�luencing others without ordering or using coercion or force in dealing with the Ebola epidemic.
The world is constantly changing—and so are effective models of leadership. Effective leadership today increasingly calls for cooperation and the ability to not only see but also empathize with other people’s perspectives and plights. The 2015 edition of Fortune’s World’s Greatest Leaders gives evidence to this changing reality, as many of the leaders on the list have no direct authority over anyone—and many of these leaders are women.
For example, Johnetta Elzie promoted and led peaceful protests in Ferguson, Missouri, after racial tensions boiled over the tipping point. This is also true of Beatrice Mtetwa who is a human rights activist in Zimbabwe. Neither of these leaders can be effective by giving orders. Even General Motors CEO Mary Barra and Ellen Johnson Sirleaf, former president of Liberia, were effective by in�luencing others without ordering or using coercion or force. Barra had to manage the faulty ignition switch crisis; Sirleaf dealt with the Ebola epidemic. Both women had to rely on cooperation with their followers and stakeholders.
Research shows that women are more adept at this kind of leadership. “They’re better than men at empathy—sensing the thoughts and feelings of others and responding in some appropriate way. They value reciprocal relationships more highly than men do” (Colvin, 2015). “In a world that favors leadership based on skills of personal interaction rather than on authority, women have a head start.” Still, these “soft skills” can be learned, “men can adapt, and many are doing so. But don’t be surprised to see more women on lists of effective leaders” (Colin, 2015).
This is not to say that classical forms of leadership are by any means defunct. They’re not. But as the world becomes more globalized and social, cultural, and gender norms continue to evolve, new strategies for leadership will inevitably emerge, and sources of power and authority will continue to shift. This chapter focuses on the complex landscape of power, politics, and con�lict.
We start by de�ining power and the sources of power. Then we look at ways of gaining power and authority, followed by strategies for effectively persuading and in�luencing followers. Next we examine the outcomes of the use of power. Finally, we close the chapter with a closer look at con�lict, the roots of it, as well as ways of effectively managing it.
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11.1 What Is Power? What Are the Sources of Power in Organizations? Power resides in all relationships that include individuals, groups, and coalitions inside and outside of organizations. Power is the potential to in�luence. In�luence is a person’s ability to affect or change the actions, behaviors, and opinions of others in desired ways. Some choose to de�ine power more speci�ically by saying that it is directed toward reaching a desired set of outcomes (Salancik & Pfeffer, 1974) or applied toward carrying out orders (Kaplan, 1964). Heimans and Timms (2014) use British philosopher Bertrand Russell’s de�inition of power, which is stated as “the ability to produce intended effects.” In terms of organizations, Scholl states, “Power in organizations is the ability of Party A to in�luence the behavior and decision-making of Party B, despite resistance on the part of Party B” (2003).
Sources of Power
French and Raven’s (1959) classic study of power (Raven, 1993) identi�ies �ive sources of power: reward, expert, legitimate, referent, and coercive. From psychologist Nicole Lipkin’s modern look at this classic study (Giang, 2013) emerged additional sources. We include information, prestige, and connection here as well. These sources taken together are not exhaustive but serve as a basis for understanding different power sources.
Legitimate power comes from the organization. The very nature of a leader’s position offers power over others. A follower is likely to act upon requests because of this hierarchical relationship, which comes with the understanding of a leader’s formal position and role as representing the organization’s interest until and unless proven otherwise.
Reward power is one of the hard forms of power and comes from the leader’s ability to reward followers. Beyond having a higher position in an organization, a manager can in�luence an employee through raises, bonuses, and other incentives. The ability to reward also translates into the ability to withhold rewards, so this source of power can be used in both positive and negative manners. Like legitimate power, reward power is based on the person’s position in the organization.
Coercive power is another type of hard power and is based on the leader’s authority to punish, threaten, use force, and withhold rewards. Not following a leader or manager could result in a warning or potentially even a �iring. This source of power also stems from the organization and the systems of reward and punishment that are built into the hierarchy.
Expert power is the �irst of the personal sources of power, and as such it’s also an example of soft power. Expert power is based on a leader’s experience and expertise. A leader who knows a particular �ield and is a domain expert can in�luence employees. Examples of this may include a managing partner at a law �irm or a senior engineer at a biotech company who reached the position through years of education and professional experience. Followers also have expert power and can in�luence leaders and managers from their knowledge.
Recently, there has been a debate about whether computing and the automated use of power should be trusted over the knowledge and wisdom of experts. Seifert and Hadida (2013) argued that one is not superior over the other, but that both are important. In straightforward situations, computers can be more reliable as sources of expertise. However, in situations that are less straightforward and uncertain, human expert knowledge and wisdom may be needed.
Referent power is another form of personal power that is based on personality and personal characteristics. Employees esteem the leader and will follow out of admiration or general regard. Charismatic leaders, in particular, excel through referent power. In some ways, this source of power is the opposite of coercive power. Followers are in�luenced by trust rather than fear or warnings of retribution. Referent power remains a major source of leadership in�luence, as we discussed in Chapter 5 with transformational and charismatic leaders.
Cuddy, Kohut, and Nef�inger (2013) pose the question whether strong leaders fare better by being loved or being strong? They state “Leaders who project strength before establishing trust run the risk of eliciting fear, and along with it a host of dysfunctional behaviors. Fear can undermine cognitive potential, creativity, and problem solving, and cause employees to get stuck and even disengage.” A related study by Zenger and Folkman (2014) found that of 51,836 leaders, only 27 of them were “rated in the bottom quartile in terms of likability and in the top quartile in terms of overall leadership effectiveness—in other words, the chances that a manager who is strongly disliked will be considered a good leader are only about one in 2,000” (Zenger & Folkman, 2014).
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Consequently, being and showing “warmth” increases a leader’s in�luence since warmth leads to trust and “the communication and absorption of ideas” (Cuddy, Kohut, & Nef�inger, 2013). Cuddy and her colleagues note that “Even a few small nonverbal signals—a nod, a smile, an open gesture—can show people that you’re pleased to be in their company and attentive to their concerns. Prioritizing warmth helps you connect immediately with those around you … and can be trusted by them.”
Of course, one leadership style or use of in�luence is not suf�icient to effectively respond to others in all situations. As research in Chapter 2 showed, a leader’s versatility in using a range of in�luence techniques that suit different situations is recommended. Still, the “power of nice” cannot be underestimated or minimized as a major source of connecting with people.
Information power comes from having access to the information that others need to complete their work (Dubrin, 2010), so that an individual or department is dependent on another. This power could belong to an individual who is supposed to communicate information to others—such as the White House press secretary, whose responsibility is to serve as a conduit between the executive branch and the media—or to a group that gives information to another, such as analysts who look at raw data and interpret it for others. Knowledge of information technology and manipulation of software programs and functions are also popular sources of information power that followers and employees have.
As technology advances and becomes more accessible, the power of information also increases. Concepts such as “big data,” processing large amounts of data, and the discovery and use of patterns provides users with competitive advantages. This technological power of information is an extension of the common phrase “information is power,” which also relates to the power of experts (or those people who hold information). As previously stated, there are times when technology is the best resource for a situation, and there are times when a human expert is more effective (Satell, 2014). This type of power can be short-lived because once the information is shared, it may no longer be a source of power in certain situations.
Prestige power comes from informal status rather than an of�icial position within an organization (Finkelstein, 1992). It is argued (“CEO Power Cycles,” 2005) that prestige power increases as performance increases. It is earned through past success or seniority. A person with prestige in an organization may be an experienced leader with a strong track record or a new hire from a competitive company or program. Individuals with prestige power can in�luence others who expect past successes to translate into future ones.
Connection power relates to an individual’s network by virtue of relationships with powerful and in�luential people. An employee may have a junior position and access to a strong network through family and friends, which provides a capacity to in�luence others, even a supervising manager.
It is important to note that some power sources are open to any individual. For example, one can increase one’s expertise in a particular area or make an effort to network and form relationships with individuals across the organization and at multiple levels. This does not require a special title or role. However, gaining reward power may require a promotion, so it depends on someone else.
All these sources of power also demonstrate that the potential to in�luence can be based on dependency. An organizational leader with the ability to distribute resources has power, whether that comes from the capacity to offer rewards, supply information, or provide other types of access. However, referent power and some of the softer, personal forms of power are based on relationships and the ability to communicate and connect emotionally with people.
New Versus Old Sources of Power
“New power”(Heimans & Timms, 2014) is a phenomenon evolving in the world that is disrupting traditional industries and institutions. Embodied in such companies as Google, Lyft, LinkedIn®, Facebook, Uber, Occupy, and Kickstarter, this “new power” is motivated by “people’s capacity—and desire—to go far beyond passive consumption of ideas and goods” (p. 50) to creating and delivering assets and content in the context of a peer community, that can also lead to partial or complete co-ownership of content and assets. Whereas “old power” values were based on “managerialism, institutionalism, representative governance”; the new values include “informal, opt-in decision making self-organization;
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and networked governance.” Apple®, the NSA, the Nobel Prize, and the of�ice of the U.S. presidency represent “old power values” (Heimans & Timms, 2014, p. 51).
Whether power values are “old” or “new,” leaders need power and in�luence to involve and mobilize board members, stakeholders, and followers to accept and enact vision, mission, and strategies. Although the two terms power and in�luence are often used interchangeably, they differ subtly. Recall our de�inition of power—it is the ability to in�luence. In�luence involves the ability to affect an individual or a group to change behavior (Cohen, Fink, Gadon, & Willits, 1992). Manning (2012) describes in�luence as “getting [people] to do things they would otherwise not do,” (p. 26) which can be achieved through a variety of different strategies. Either way, power refers to potential, whereas in�luence refers to actual ability.
Oftentimes the idea of power has a negative connotation; however, without power, organizations could not meet their goals (Bennis, 2004). Leaders rely on power to direct their followers. We will examine where power comes from, how people gain power, and how people use power. Before continuing, take Assessment 11.1 to identify your sources of power.
Assessment 11.1: Personal Power Pro�ile
Instructions
The following is a list of statements that may be used to describe behaviors that supervisors (leaders) in work organizations can direct toward their subordinates (followers). First, carefully read each descriptive statement, thinking in terms of how you prefer to in�luence others. Mark the number that most closely represents how you feel.
To in�luence others, I would prefer to:
Strongly disagree
Disagree Slightly disagree
Neither agree nor disagree
Slightly agree
Agree Strongly agree
1. Increase their pay level 1 2 3 4 5 6 7
2. Make them feel valued 1 2 3 4 5 6 7
3. Give undesirable job assignments
1 2 3 4 5 6 7
4. Make them feel like I approve of them
1 2 3 4 5 6 7
5. Make them feel that they have commitments to meet
1 2 3 4 5 6 7
6. Make them feel personally accepted
1 2 3 4 5 6 7
7. Make them feel important
1 2 3 4 5 6 7
8. Give them good technical suggestions
1 2 3 4 5 6 7
9. Make the work dif�icult for them
1 2 3 4 5 6 7
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10. Share my experience or training
1 2 3 4 5 6 7
11. Make things unpleasant here
1 2 3 4 5 6 7
12. Make being at work distasteful
1 2 3 4 5 6 7
13. In�luence their getting a pay increase
1 2 3 4 5 6 7
14. Make them feel like they should satisfy their job requirements
1 2 3 4 5 6 7
15. Provide them with sound job-related advice
1 2 3 4 5 6 7
16. Provide them with special bene�its
1 2 3 4 5 6 7
17. In�luence their getting a promotion
1 2 3 4 5 6 7
18. Give them the feeling that they have responsibilities to ful�ill
1 2 3 4 5 6 7
19. Provide them with needed technical knowledge
1 2 3 4 5 6 7
20. Make them recognize that they have tasks to accomplish
1 2 3 4 5 6 7
Scoring
Using the following grid, insert your scores for the 20 questions. For reward power, sum your responses to items 1, 13, 16, and 17 and divide by 4. For coercive power, sum your responses to items 3, 9, 11, and 12 and divide by 4. For legitimate power, sum your responses to questions 5, 14, 18, and 20 and divide by 4. For referent power, sum your responses to questions 2, 4, 6, and 7 and divide by 4. For expert power, sum your responses to questions 8, 10, 15, and 19 and divide by 4.
Reward Coercive Legitimate Referent Expert
1. _______ 3. _______ 5. _______ 2. _______ 8. _______
13. _______ 9. _______ 14. _______ 4. _______ 10. _______
16. _______ 11. _______ 18. _______ 6. _______ 15. _______
17. _______ 12. _______ 20. _______ 7. _______ 19. _______
Total: _______ Total: _______ Total: _______ Total: _______ Total: _______
Divide by 4: _______ Divide by 4: _______ Divide by 4: _______ Divide by 4: _______ Divide by 4: _______
Interpretation
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A high score (6 or greater) on any of the �ive dimensions of power implies that you prefer to in�luence others by employing that particular form of power. A low score (2 or less) implies that you prefer not to employ that particular form of power to in�luence others. These scores represent your power pro�ile. Your overall power pro�ile is not re�lected by the simple sum of each of the �ive sources. Instead, some combinations of power are synergistic in nature—they are greater than the sum of their parts. For example, referent power tends to magnify the impact of other power sources because these other in�luence attempts are coming from a respected person. Reward power often increases the impact of referent power, because people generally tend to like those who give them things that they desire. Some power combinations tend to produce the opposite of synergistic effects, such that the total is less than the sum of the parts. Power dilution frequently accompanies the use of (or threatened use of ) coercive power.
Source: Modi�ied version of T.R. Hinkin and C.A. Schriesheim, "Development and Application of New Scales to Measure the French and Raven (1959) Bases of Social Power," Journal of Applied Psychology 74 (1989), pp. 561–567. Copyright 1989, American Psychological Association. Adapted with permission.
In an organization, a leader or manager assigns projects to employees with the reasonable expectation that the work will be completed. This is because the manager has position power over the employee, or the potential to in�luence that employee. The manager does not need to exert this in�luence every time a project or task is assigned because both parties have an implicit understanding of the manager’s power.
Power is often broken down according to source: Does this potential to in�luence come from an individual or from the organization (Hinkin & Schriesheim, 1988)?
Heimans and Timms (2014) suggest breaking down power with the concepts of “old power” and “new power.” Old power is highly exclusive, collected and held onto, and leader-driven. Heimans and Timms describe it as being like a “currency.” New power, on the other hand, is open to many, inclusive, coordinated by peers, and distributed out to others. While old power is “hoarded,” new power tends to be “channeled,” almost like electricity. Old power is also more effective with consumption settings, because those that have more ownership have more power. One example of old power would be Apple, because their business focuses on consumption, and they try to hold onto their highly exclusive and powerful business. As consumption is changing in the world today to sharing and experiencing, new power is becoming more effective. An example of new power would be LinkedIn® because its broad community of professionals derive value from creating connections with each other.
Uber is another example of new power. The ride-sharing company allows for the power to be spread out, allowing many people to participate as drivers and passengers. However, the “old power” taxi drivers are unhappy with this new player in the market. It will be interesting to see if the old power or the new power wins (Heimans & Timms, 2014). It may also be that this new form of power integrates as well as challenges the existing values and organizational forms. Soft power remains a useful concept, suggesting that a leader’s use of culture, values, and personal characteristics is an important in�luencing source for organizational goal attainment.
Power can also be described according to method. “Hard power” uses coercion or inducement, whereas “soft power” relies on personal or relational power to get others to do what you want them to do (Nye, 2004). Nayar (2011) believes that because of their negotiation skills, women are more effective than men at using soft power. Nye (2004) described soft power as “the ability to obtain what one wants through co-option and attraction. It can be contrasted with ‘hard power’, that is the use of coercion and payment” (2004, p. 169). The sources of soft power are a leader’s values, culture, policies, and institutions (Nye, 2008). Nye argued that soft power had the ability to attract attention, which can also lead to compliance and acquiescence on the part of others. Some have suggested that former President George W. Bush used soft power in his threat or admonition on global terrorism, “You are either with us or against us.” Critics argued this was not only soft power, because Bush would probably have
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Some say that Soviet dictator Joseph Stalin used soft power by manufacturing myths of invincibility.
backed up his words. Others have argued that Adolf Hitler and Joseph Stalin used soft power by manufacturing myths of invincibility and inevitability to attract followers to join their causes.
Coutu (2008) argued that neither soft power nor hard power is suf�icient in all situations, and that power should also be “smart.” Smart power is a mix of both soft and hard power, and it is smart because soft or hard power aspects are chosen based on the situation, thus having the best of both types of power.
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The erosion of investor trust in corporate leaders is discussed, emphasizing the importance of corporate self-governance. Interviewees also discuss CEO incentives and causes of corporate corruption.
CEOs, Shareholders, and Trust
Critical Thinking Questions
Do organization’s require self-governance by leaders and employees to obey the law and “do the right thing” for shareholders and society? Explain your answer. Is corruption and questionable politics just business as usual and should be treated as such? Explain your answer.
11.2 Organizational Politics The sources of power we have described show that power can stem from the organization or from individual ability or connections. These are not necessarily preordained; individuals can take steps to actively gain power. Organizational politics is the way individuals or groups attempt to obtain and use power. Organizational politics are unavoidable (Marcus, 2015). Instead of trying to avoid politics, professionals can learn to constructively use different sources of power to enhance job performance and their careers. Power and in�luence constantly change throughout the organization, and politics provides opportunities to network socially, get work done, and enhance exchanges (Battilana & Casciaro, 2012). It should be noted that political behavior is not necessarily bad or dysfunctional. Politics, for example, can emerge from any number of sources in an organization: Of�ice politics can arise from unstructured rules and regulations that leave room for interpretation, competition, rivalry, and con�lict over disagreements. Some scholars suggest that politics should be taught, not avoided (Pfeffer, 2011).
Organizational politics is rooted in other motivations in addition to seeking advancement, such as distrust of the formal, merit-based system; environmental instability; and other perceived threats. During an economic downturn, people fear losing their jobs, especially if cuts are announced, and they try to make their positions more secure any way that they can. Sometimes this is through allying themselves with powerful people or through self-promotion. Others try to cover lack of con�idence or actual lack of knowledge through politics. Some people simply engage in politics because they enjoy it and perceive it as a game.
Marcus (2013) states that organizational politics can �luctuate, especially during times of change within the organization. He proposes 10 steps to manage organizational politics:
1. Notice who has power and in�luence. 2. Be aware of the people that control organizational resources. 3. Know your stakeholders. 4. Create a network of allies across the organization. 5. Communicate how your work is essential to the organization. 6. Know different strategies for in�luencing others in a way that adds to your credibility. 7. Have a mentor. 8. Network and build relationships. 9. Know the dynamics of the organization and how power changes according to different situations.
10. Understand the motivations and interests of others.
These 10 steps allow for the awareness of politics in an organization, and allow individuals to use politics in a constructive and helpful way.
Corporate Governance and Shareholder Value From Title:
NewsHour Business Ethics Anthology (https://fod.infobase.com/PortalPlaylists.aspx? wID=100753&xtid=34847)
© f 0:000:00
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Power can be accumulated through either positive or negative methods. Although negative methods may work in the short-term, positive strategies help foster an open and collaborative culture, which bene�its the organization in the long- term.
Methods of Gaining Power
Two basic principles apply to gaining power through politics: collecting resources and controlling access points. Resources can include anything from a powerful network of contacts to expertise in a particular �ield, whereas access can be to powerful people or to information. Access points are means, ways, and the ability to get in touch with important and in�luential people and executives. The methods of gaining power can be described by the acronym NEAR: Individuals can gain power using a network, expertise, access, and reciprocity.
Networking A strong network offers a great deal of power to an individual; networks can include people from within the organization and external consultants. Having allies helps propel new initiatives, and having external validation from a consultant can lend greater credibility, so one can gain power by consciously extending a professional network (Andruss, 2013; Baer, 2012). Today, social networking tools such as Facebook and LinkedIn offer new networking career opportunities, so it is possible to connect with a diverse group of professionals across industries and levels of management. This can help in searching for a job, identifying partners for collaboration, or even learning about competitors within the industry.
When you are at a networking event and �irst meet someone, there are certain behaviors that could ruin the chance of adding that person to your network (Weingarten, 2015). Today, with the ubiquitous availability of technology, it is especially important to put cell phones and other devices away when networking, as it suggests that you are not fully paying attention.
More traditional advice when actively networking is to make sure to have a solid handshake with a �irm grip. Your handshake is often the �irst impression someone has of you. It is also important (after putting devices away) to pay attention to what others are saying by staying engaged in the conversation and showing attentiveness. The pace of interaction should not be overly rushed, as this would not show engagement in the conversation. It is also important to do your research prior to an event, in order to be prepared in knowing about relevant people and organizations you are discussing. This leads to a more relaxed conversation because you will be on a more equal playing ground. Not being prepared may cause discomfort and detract from your connection with in�luential individuals whom you wish to in�luence. Although technology has been changing the game for networking, these basics are still important.
Melé (2009) suggests three categories of networking, based on Aristotle’s types of friendships. Utilitarian networking focuses mostly on economic bene�it and gaining power. An example of this type of networking would be networking (or advertising) to current customers in order to maintain their loyalty, because it is cheaper to keep a current customer than it is to get a new customer. Emotional networking focuses on feelings, relationships, and the desire to be a part of a network. Virtuous networking focuses on morals that are not only in the end result, but also in the means to that end. This type of networking focuses more on the needs of others.
Melé (2009) also identi�ies six common networking practices that are of questionable ethics:
1. Acting in bad faith or taking advantage of trust. 2. Taking advantage of opportunities. 3. Abusing or misusing power. 4. Cronyism—giving people more power because you know them, not because of ability. 5. Using networking as a facilitator of bribery. 6. Using networking to cooperate with wrongful acts.
Expertise Another method of gaining political power is through building and demonstrating expertise. Part of this development may come from shadowing senior, experienced members on the team and learning their approaches or listening as they
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develop solutions to problems. Formal channels such as professional development or coursework and advanced degrees are other possibilities, and often certain positions or pay scales are open only to candidates who meet minimum educational requirements. Simply learning new skills is not enough, though; managers and coworkers need to see application of this knowledge in order for it to be a source of power.
Access Controlling who can access certain people and certain information also lends power because it produces a dependent relationship. Oftentimes an executive assistant may wield a great deal of power through managing a CEO’s calendar and determining who has access and how quickly. Access to information works in a similar way. A team that depends on another for information can be in�luenced by it because of this unidirectional movement.
Reciprocity A �inal way of consolidating power is by building relationships of reciprocity. Asking someone for immediate help in exchange for later assistance is a way of forming a mutually bene�icial alliance. One can also earn a future favor by agreeing to a new initiative when it is introduced, before others agree to it. Even if the relationship is not explicitly reciprocal, goodwill earned through supporting another will oftentimes be repaid. This does not mean backing every proposal indiscriminately, but if an idea seems straightforward and reasonable, speaking �irst can create an implicit reciprocity. Braverman and Lovegrove (2008) describe this reciprocity in terms of support. In order to receive support (for a project, etc.) it is important to give support through listening. If others feel that their ideas and concerns are being listened to and taken into account, they are more likely to be supportive in return.
Building Coalitions Related to the process of creating reciprocity to gain power, is building coalitions, that is, identifying and mobilizing individuals who share your interests in order to obtain unmet needs and goals. Industry and government leaders not only build and use coalitions for their political ends, but they also use a more institutionalized form of coalitions— professional lobbying groups. Coalitions and lobbies socialize, politic, and network informally and formally to make deals, agreements, and strategies to in�luence and meet goals. A caveat about coalitional activities relates to the ethics of how far some coalitions and individual members will go to stay legal and ethical. Using an “ends justi�ies the means” ethic, as we discussed in Chapter 2, can lead to bribery, lying, and other ways of hurting individuals and institutions. The now classic business cases in the 2000s of Enron's Jeffrey Skilling, Tyco's Dennis Kozlowski, Bernard Madoff of Madoff Investment Securities, and other infamous company CEOs—some of whom are still in prison—illustrate this caveat.
Leaders bene�it from cultivating multiple sources of power, so that when it is time to implement a change, there are multiple ways of in�luencing followers. Networking and developing expertise always help in the long-term, and these two methods of gaining power can grow continuously. Access and reciprocity are more speci�ic, situational sources of power and cannot be developed as easily, but they can be important sources of power. Take an online quiz (http://www.theladders.com/career-advice/networking-skills-test (http://www.theladders.com/career- advice/networking-skills-test) ) to gain a sense of your networking skills.
Other Skills for Gaining Power: Negotiating and Coalition Building
The methods we have described thus far hint at the most important basic political skill that a leader must possess: the ability to work with others (Oh, Chung, & Labianca, 2004). Although leadership skills can change based on the level of the leader and the speci�ic circumstance, there are leadership skills that have been found (Zenger & Folkman, 2014) to always be important. The �irst skill (inspiring and motivating others) is related to working with others. If leaders are unable to inspire and motivate, they are most likely not successful at working with others. Other important capacities and skills include having and showing high integrity and honesty (Pitesa & Thau, 2013), problem solving, ability to achieve results, communication, collaboration, building relationships, as well as others. While the importance of these skills can change from time to time, leaders at all levels must realize that these skills are important for them to be successful.
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In discussions, it is important to listen to the other party. Speaking gives information to the other party, while listening and asking questions allows one to receive information.
Whatever personal feelings may come into play, it is important to be able to establish and work toward a common goal. Business is a human endeavor, and decisions are often made due to politics rather than quantitative data (Ireland & Miller, 2004). Although expertise often provides access into entry levels of management, individuals must be able to manage relationships to be promoted or gain power (Tharenou, 2001; Zenger & Folkman, 2014). In organizational politics, the ability to work with others can be more speci�ically referred to in various forms as networking, coalition building, co-optation, or negotiation.
As discussed, a strong network is a method of gaining power, providing power within the organization, and amplifying social status. Networking, or the development of relationships for purposes beyond the personal (Barney, 2004), is how that network is created. Networking does not necessarily mean making a number of friends: Although a professional relationship should be friendly, it does not necessarily constitute a friendship. Networking involves connecting with others, learning about what they do and what their skills are, sharing relevant information about yourself, and understanding how you can help one another. Although some people appear to have a natural gift for networking, it is a skill that can be developed and practiced. If you �ind yourself struggling, do not be discouraged; even the most skilled networkers encounter challenges (Gitomer, 2002). Some tips on networking include joining networking groups in your community or nearby city that have in�luential people; starting a networking group in your community or organization; joining a trade or professional association that interests you; and �inding a mentor who is an in�luential person and may be interested in advising you.
Coalition building is another important skill for a leader to possess. Although reciprocity creates a future obligation, a coalition (or alliance) lets each group achieve an immediate goal if they work together (Pickett & Kennedy, 2004). Coalition building usually starts with �inding people who have the same interests, goals, and objectives as you with regard to a particular subject or topic. Coalition building involves some of the same skills as networking, only here you are looking to align, join, or sign up with others who have like interests or a common cause. Building alliances is not only important among employees within an organization, but it is important to build alliances among organizations in order to gain competitive advantages. However, McKinsey & Company found that alliances between organizations are likely to fail half of the time (Kaplan, Norton, & Rugelsjoen, 2010). Dennis Goin (2012) suggests three tips for keeping a coalition together: continuous communication between leaders and employees, cross-train between older and newer coalition members to promote teamwork and work ethic, and show people how their work is important, even if they are no longer a part of the group.
Co-optation is another effective political skill. Here a potential competitor becomes an ally within a coalition (Gimeno, 2004), so an adversarial relationship transforms into a mutually bene�icial alliance. Baur and Schmitz (2012) use Trumpy’s (2008) de�inition of co-- optation, stating that it is the ability for an organization to “bring the interests of a challenging group into alignment with its own goals” (p. 480).
Former PepsiCo CEO Indra Nooyi earned her position through this technique. In 2006 she was one of two candidates in line to succeed former CEO Steven Reinemund. As soon as she heard that she was a �inalist, she �lew to meet her competitor face-to-face. Instead of becoming rivals with her coworker, Nooyi offered him compensation similar to her salary and a position close to hers if she got the position. Through co-optation, she became the CEO and gained a powerful ally (Useem, 2008).
Negotiation is a discussion aimed at reaching an agreement. For example, during the hiring process, a prospective employee may want to increase the starting salary while the organization is trying to limit costs. Each side would like the hire to take place, but both are weighing costs and bene�its. By nature, the two sides have different goals; in order to succeed, they must �ind common ground. The key to good negotiation is �inding a way for all parties to win rather than treating the discussion as a competitive situation where a win for one person translates into a loss for another (Global Knowledge, 2008).
Jensen (2014) describes this switch from an “opposing parties” approach to a “business partners” approach where the focus switches from self-serving to group-service, where the goal is to maximize the bene�it of both parties, instead of
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just one. This partnership approach to negotiation helps build trust that leads to trust down the road.
There are two types of negotiation: integrative negotiation and distributive negotiation (“Negotiation Types,” n.d.). Integrative negotiation is a type of negotiation where the goal is to create a “win-win” situation. In other words, negotiations are made so that all parties involved bene�it. This is a very popular and desirable form of negotiation. The following steps, adapted from Fisher and Ury (n.d.), and Malhotra and Bazerman (2007), are helpful for ensuring that integrative negotiation is successful:
1. Understand the underlying interest and motivation for what the other party wants and why. 2. Listen, and be aware of constraints so that solutions to the constraints can be explored. 3. Use hurdles as an opportunity to grow. 4. Establish a common ground. 5. Focus on the problem at hand instead of trying to discredit the other party.
Distributive negotiation, on the other hand, is a type of negotiation where “win-lose” situations arise. In this type of negotiation, one party tries to “win,” or bene�it, as much as possible, taking away from the bene�it from the other party or parties.
Negotiation involves three steps, sometimes four: forming a plan, discussion, postponement if necessary, and outcome (Lussier, 2004). (See Figure 11.1.)
Figure 11.1: Negotiation steps
The �irst step—planning—is extremely important. It involves both understanding the stakes and setting limits. You should know what the other parties want, and where might they be willing to bend. The more research and thought that goes into the other party’s goals and potential areas of compromise, the greater the chances of a successful negotiation (Flory, 2004). Setting limits in advance helps all parties identify areas where they will not compromise. What minimum offer is acceptable? What is the ideal result? What would make a good opening proposal?
How badly each side needs to reach an agreement in�luences the risk each takes. In a used-car sale, the buyer and the seller have different reasons for entering the transaction, and these reasons affect negotiation. If the seller is moving abroad and needs to get rid of the car soon, he or she will want to reach an agreement quickly and may be willing to take less than the target price. If the seller has just received a raise and would like to upgrade to a new car, there is less urgency to sell because the time constraint is gone. Understanding the seller’s situation would make it easier to predict his or her behavior and willingness to compromise. Likewise, it would help the seller to understand the buyer’s motivation and stakes. The buyer may need a reasonably priced car immediately and may be willing to spend a little extra for the convenience of a simple transaction without having to pay full price for a new car. In this instance, the seller may receive the asking price rather than the lower target price.
In the negotiation discussion, one of the most important parts is listening to the other party. Speaking gives information to the other party, while listening and asking questions allows you to receive information. This enables you to �ind out what the other party actually wants from the outcome, which can help frame the discussion to your advantage. Trust is also an important factor in reaching an agreement, as each side needs to believe the other will adhere to the compromise (Sapanto & Chen, 2004).
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There are three types of relationships with trust: when trust is “likely,” “possible,” and “not possible” (Gunia, Brett, & Nandkeolyar, 2012). Trust is more likely when you are likeable, build the relationship, are understanding of other perspectives, and realize common ground. When trust is possible, it is also important to realize common ground, but this time also focus on what you are trying to avoid or go against. It is also important to look at the goal of the relationship, and to seek the help of a mediator if needed. When trust is not possible, it is still possible to be successful in negotiation. It may be necessary to make inferences about the priorities about the other party. These types of relations should be more focused on reciprocation, and using data support and logic. These strategies make it possible to be successful in negotiation for all levels of trust.
With increased trust, Michael Useem argues that there is more room for action, and actions are not met with as many questions and objections (Javetski, 2012). Because others have more trust, they believe the action will be successful or helpful without knowing all of the details.
Both parties may encounter sticking points during discussion, even when both go in intending to reach an agreement. In that case, it helps to think creatively and �ind ways to expand the negotiation. Negotiation can be viewed as an attempt to allocate limited resources, and one way of addressing this challenge is to increase the resources under discussion. Another method is to create new options. For example, when establishing a new business partnership, each partner brings assets to the table: �inances, time, or whatever each person can contribute. If partners disagree on how to divide pro�it, what else could become part of the discussion? Perhaps the pro�it-sharing model could change over time so that the distribution of pro�it becomes more equitable once the initial �inancial investment has been recouped. Or perhaps the partner donating time might be willing to take a smaller share of pro�its in exchange for a higher salary.
Ultimately, negotiation is relationship building, and the best way to enter a professional relationship is to understand how each party can bene�it the other. A good negotiator highlights the bene�its of the proposal instead of constantly trying to make demands. For example, if the car seller mentions an upcoming move abroad, the buyer can use this in negotiation by touting the bene�its of an immediate sale: The seller will have one less thing to think about before leaving the country. Keeping the focus on the seller’s needs in this case reframes the negotiation from a discussion about price to one about the seller’s convenience. Often, it helps to let the other party begin negotiations, to understand how they are framing the discussion before responding.
However, sometimes the only way through a stalled discussion is to postpone it. This provides time to think about the other party’s offers and concerns and to reevaluate. Once each side has time to think over terms, reassess limits and willingness to compromise, and possibly devise new options, everyone can return to the table and hopefully reach an agreement. If no agreement can be reached, it is better to walk away than to yield on predetermined lower limits.
Afterward, it is always helpful to do a postmortem on the negotiation, especially if it failed. Is there room for improvement next time? Was the initial proposal too close to the target, leaving little room for movement, or was it so far from the mark that the other party did not know where to begin the discussion? Like networking, negotiation skills can be developed through planning and, most of all, experience and re�lection.
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Although coercive tactics may secure obedience through fear, they are not effective in the long run.
11.3 In�luencing Tactics Power is the ability of an individual or group to in�luence another or others to do something they would not necessarily do (Dahl, 1957). Power is used through in�luence and politics (Hitchner, 1992), and is usually associated with authority to exercise in�luence. In�luence, on the other hand, is a person’s effect on the character, attitudes, values, or behaviors of others. “Power is the capacity to cause a change in a person, in�luence may be thought of as the degree of actual change” (Daft, 2016, p. 536). At the same time, power is used to in�luence, and in�luence can lead to uses of power to achieve certain ends. Some of the most in�luential historical leaders, who had no formal position authority, were Moses, Jesus, Muhammad, and Ghandi. And some of the great political leaders, such as Lincoln, the Roosevelts, John F. Kennedy, Reagan, and Margaret Thatcher, who had position power were also highly in�luential.
Leaders, by virtue of their positions, have at least some capacity to exert in�luence through their legitimate power, which leads to ethical questions: How should the leader exert power? Are some methods more appropriate than others? What are the limits? Leaders can choose to be honest to their followers or to in�luence them through dishonesty, just as they can decide on the abrasiveness of their approach.
The fundamental question for leaders to consider is whether the ends justify the means. Does it simply matter that a follower is compliant, or do the follower’s buy-in and commitment matter? How do in�luencing tactics affect later requests and relationships?
A strategic leader will choose in�luencing tactics by beginning with low-risk, positive, less abrasive methods. This may be enough to achieve the intended goal, but if not, the leader can choose to escalate the situation with a more abrasive or higher-cost in�luencing tactic. For example, when attempting to implement an organizational change, an opening tactic may be to provide a logical explanation for the change to employees, which may persuade followers to adopt the change of their own volition, perhaps out of understanding, empathy, or emotion. Coercive tactics—“Change or your position is at risk”— are a less effective initial approach (Byrnes & Kiley, 2007). Although they may secure obedience through fear, the relationship becomes adversarial. Tactics also vary depending on directionality: whether a leader is in�luencing a follower or an employee is in�luencing a manager. When appealing in an upward direction (follower to leader), logic is far more likely to work than coercion, as a follower will likely not have the organizational power to follow through.
Beyond facilitating the achievement of immediate goals, the types of tactics employed by leaders determine management style and affect organizational culture. Positive methods demonstrate certain values and set expectations for employee behavior, whereas negative tactics create an entirely different environment. Leaders must pay attention to the tone they set because followers will use them as models for their own behavior, affecting organizational culture and values.
Although relationship and trust building takes time, the results of positive, honest tactics are almost always preferable to the outcomes of coercion, in terms of both the speci�ic leader– follower relationship and the overall success and health of the organization. A strategic leader guides an organization toward achieving an ideal vision, and this role requires trust in both the leader and the vision. Harsh tactics applied in the name of vision tarnish that ultimate goal and break down relationships within the organization.
Richard Edelman argues that the CEO should really be the “chief engagement of�icer,” and focus more on listening to the community, building relationships, and engaging in practices with integrity (Kirkland, 2014). This will not only increase transparency between the CEO and the community, but also within the organization itself. Mikes, Hall, & Millo (2013) suggest four types of “in�luential experts”:
1. Compliance champions are in�luencers that only focus on regulation and rules, ensuring that they are followed and enforced. As a result, these in�luencers do not change the organization.
2. Technical champions come up with tools that can be used by organizations, but these people are not completely necessary to the organization—just their tools. One example of this would be consultants.
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3. Business partners are more valuable to the organization because they focus on analysis and interpretation, which makes them hard to replace.
4. Engaged toolmakers are the most important in�luential experts because they not only develop tools to be used in an organization, but they also analyze and interpret. These engaged toolmakers simplify ideas, persuade, and search for new opportunities.
Constructive Tactics
Depending on the situation, leaders can apply different positive in�luencing tactics, which are described here.
Alignment One way of in�luencing followers is showing alignment with overall institutional goals. A strategic leader stays focused on goals, and if an intermediate objective can be cast as a step toward an overarching vision, followers are more likely to act in a committed manner. For example, an organization may use the phrases “cutting edge” or “innovative” in its vision statement. The team leader, then, may suggest changing course in marketing to embrace social media or try something new, which would be in line with the company’s vision and values.
Legitimizing Another in�luencing tactic is to show how a request falls within the scope of an already legitimate position. For example, the manager of the marketing team may ask team members to assess how competitors are using Twitter—even though the company itself is not using social media yet. The marketing manager can legitimize the request by saying it is part of marketing and within his or her authority to make.
Persuasion Rational persuasion involves in�luencing people through evidence and logic (Yukl & Tracey, 1992). A leader states a goal and then establishes clear steps to move from the current state to that goal. This would include establishing objectives and de�ining speci�ic activities or tasks that get work done. This plan must be well constructed so that followers can easily understand how their actions will lead to a desired outcome. For example, if a person decides to lose 20 pounds, a speci�ic objective might be changing lunchtime eating habits and a speci�ic activity might be setting a limit of 500 calories for each lunch meal. The ability to create a plan and execute it boosts the leader’s power, which can have a positive impact on later need to in�luence (Nesler, Aguinis, Quigley, & Tedeschi, 1993).
Deploying Expertise As mentioned previously, one source of leadership power is expertise. This can also be used as an in�luencing tactic. If an expert makes a recommendation, a follower is more likely to comply than if another, inexperienced person makes the same suggestion. Involving an outside consultant can serve as a similar tactic. If a leader lacks subject matter expertise, an outside expert can in�luence followers toward the same objective (Yukl, 1990).
Modeling When encouraging followers to adopt a change, a powerful tactic can be for the leader to model that change �irst. By showing how one should act and behave, the leader provides a template for others to follow. For example, if the leader announces austerity measures in the company due to tough economic times, one way of in�luencing followers to accept this change is foregoing bonuses or accepting a salary freeze. By demonstrating personal adherence to the new policy, the leader creates a model for followers to also accept the measures.
Finding Allies Sometimes being a solitary leader is not enough, and exerting in�luence requires a team. This can happen through reciprocity, coalition building, or simply through goodwill for always being a team player. If a leader has demonstrated
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an ability to work well on other projects, even without explicit reciprocity, this can in�luence followers to execute the leader’s initiative.
Leveraging Charisma Leaders can also appeal directly to followers and in�luence them, in part, based on force of personality. A con�ident, empowered person who proposes a change based on informed and experienced judgment can use charisma to persuade others.
Underlying tactics such as this, Cialdini’s (1993) work on the science behind the principles of in�luence has become a classic. Basically, Cialdini argued six principles underlying in�luence:
1. Reciprocation: “The implication is you have to go �irst. Give something: give information, give free samples, give a positive experience to people and they will want to give you something in return” (Polanski, 2012).
2. Social Proof: People will look to see what others, especially peers, are doing when unsure, this will guide their decisions.
3. Commitment and Consistency: People prefer not to back out of deals. They usually follow through on something they have agreed to—verbally or in writing. People generally follow “pre-existing attitudes, values and actions.”
4. Liking: “People prefer to say ‘yes’ to those they know and like,” Cialdini wrote, particularly those who are “physically attractive, similar to themselves, or who give them compliments” (Polanski, 2012).
5. Authority: People generally respect authority, experts, those who have “business titles, impressive clothing, and even driving an expensive, high-performing automobiles.” Impression management counts when trying to get compliance, “even if their authority is illegitimate.”
6. Scarcity: The less there is of something, the more valuable it is, and the more people want it (p. 134).
Questionable or Unethical Tactics
Overall, questionable or unethical tactics are soft, in the form of requests rather than demands, with justi�ications that appeal to intellect and emotion. On the other side, there are harsh tactics that are questionably manipulative and authoritarian, while others are simply unethical, if not illegal.
These methods explicitly aim toward creating discord and instability, essentially applying in�luence by belittling or misusing others for personal gain. These tactics degrade the leader who employs them.
Machiavellianism Do the ends of in�luencing methods justify the means? People who score high on Machiavellianism believe that they do. As you may recall from Chapter 1, Machiavellianism refers to gaining and using power without regard to the consequences. High Machs employ whatever means necessary to achieve their goals, whether this means lying or manipulating (Bass, 1990). These tactics can work effectively, producing quick results, but the consequence of followers’ discovering the truth or the manipulation can be irreparably harmed relationships and reputations.
Peer Pressure Peer pressure is a less direct and harsh method of Machiavellianism; however, it can also be destructive. Although leaders are not peers, they can apply pressure by saying “Everyone is doing this except for you” in order to gain compliance. Singling someone out as an exception and pressuring him or her to conform is an in�luencing tactic, but it is a negative one. Peer pressure can be seen as a dark version of consensus or team building. Instead of forming a supportive group based on shared values or a common goal, this is a demand for conformity and compliance.
One example of this peer pressure is Boeing’s launch of the 787. In order to maximize return on net assets, Boeing did a lot of
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Bribery takes the tactic of rewarding others too far.
outsourcing, which led to a complicated supply chain and less control over quality. As a result, there were battery �ires. Boeing felt pressure from Wall Street to maximize shareholder value, leading them to outsource, which had a negative impact on the quality of the product (Mukunda, 2014).
Ingratiation and Debasement As there are positive personal forms of in�luence, such as charisma and expertise, there are also negative personal tactics (the dark side of charismatic leadership, discussed in Chapter 2), such as ingratiation and debasement. Ingratiation means trying to win admiration from people you do not like. Instead of drawing someone in through charisma or straightforward friendliness, it is an attempt to win in�luence through pretense. Debasement is lowering the quality or character of something or someone. As an in�luencing tactic, it is the opposite of expertise. For example, instead of locating a proper expert to do a job, the leader feigns ignorance to in�luence another into doing the job. Both tactics depend on dishonesty in the relationships.
Legitimating Instead of using a position to provide in�luence, legitimating invokes the hierarchy directly by asking someone with more authority to intercede. In an upward appeal, a manager might ask a senior manager or director to intercede in order to in�luence an employee’s behavior. This is a heavy-handed and abrasive tactic and has the counterproductive effect of proving to both the senior and junior staff involved that the manager lacks power. Although not unethical, it could generate reactive responses leading to harmful effects such as sabotage, getting even, and other vengeful actions.
Bribery involves giving money or gifts, or engaging in otherwise questionable transactions, to alter behavior when other legal, more ethical in�luencing means can produce the same result. An organization offering a sales person incentives or rewards to produce more sales is an ethical transaction; the organization as well as the individual bene�it from the transaction. An organization paying off a competitor’s sales person to not perform well is considered bribery, as the actions of this transaction result in damages not only to the productivity of the organization but also to potential clients who might bene�it from the good or service.
Divide and Conquer The strategy of divide and conquer is often used in war, so it is an odd tactic to apply within an organization. The objective is to keep individuals separate and prevent them from building coalitions, so that the leader can gain and keep power. Instead of fostering a cooperative, supportive environment, this tactic intentionally sows discord within the organization.
Retaliation Retaliation is another oppositional tactic, based on the idea of an eye for an eye. Instead of a productive reciprocity of paying another back for a favor through future support, retaliation calls for repayment for negative actions. If one party did not support a past initiative, that party will not receive future support. Even worse, the “wronged” party will act against the other party’s future interests, exacerbating the situation. One method of preventing retaliation is removing competitors from the situation, but that is another unethical tactic of gaining in�luence.
Backstabbing Personal dynamics come into play in unethical behavior through backstabbing as well. Whereas ingratiation is an attempt to gain friendship through pretense, backstabbing goes further in pretending to have a positive relationship and then betraying that association. This may include mocking, spreading rumors, or revealing con�idences to inappropriate parties.
Setting Up a Fall Guy
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Setting up a fall guy is another negative tactic. One person creates a situation in which another will fail, resulting in the �irst person’s gaining power and in�luence at the second person’s expense.
Turf Wars Finally, while access can be a source of power, turf wars are the negative counterpart. They can happen through severe micromanagement of resources or prevention of access so that groups must �ight for resources. Preventing a team from completing their work is a hard bargaining chip, and an unethical one. See “Take the Lead: Leadership, Power, and In�luence” to apply these concepts.
A strategic leader guides the organization according to the big picture, and the steps taken to achieve that goal matter, whether in small settings or in implementation of large-scale organizational change. Establishing a culture of open communication and collaboration through the use of honest, ethical in�luencing tactics becomes especially important when the organization faces a crisis. A divided, competitive organization is not able to come together in a productive way to solve the problem. Rather, a response requires seamless teamwork and trust in the leaders.
Take the Lead Credits
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11.4 Outcomes of the Uses of Power As mentioned earlier, leadership power stems from two sources: organizational and personal. When it is applied, responses range from resistance to compliance to commitment. The types of tactics leaders use to in�luence behavior can generate a wide range of responses, some more desirable than others. Although a harsh tactic may engender rapid execution of a task, it may also generate long-term resistance or resentment.
When a leader exercises power, there are three possible outcomes: commitment, compliance, and resistance. Commitment is the best possible outcome. This occurs when the follower or employee willingly embraces the directive and executes it, usually with a high degree of diligence and attention. Compliance occurs when orders are followed simply because they were given by a person with power (Daft, 2016). Demands may not be carried out with enthusiasm or even a great deal of care, but they will be completed. In order for individuals to comply, the request must be given by someone in�luential, especially if they are not in a direct position of power over the other person (Snell, 2014). Resistance is the least desired outcome, in which the request is not completed. Resistance may include behaviors such as procrastination, excuses for not ful�illing the obligation, or complete refusal (Yukl, 2002).
A current trend in leadership is toward personal rather than organizational power (Bennis, 2004). Relying on hierarchy or rewards and coercion leads to compliance at best and resistance at worst. Personal power, however, can inspire the emotional connection needed for a committed response. This is why articulating vision is critical to strategic leadership; it transforms disparate sets of duties into a uni�ied cause.
Today there is also a trend toward empowerment, or giving employees more leeway to make decisions rather than managing every aspect of work (Spreitzer, 1995). Empowerment means transferring some power to an employee, which builds both trust in the leader and buy-in from the follower because the employee has a higher stake in the process and the outcome. Like personal power, empowerment invites a committed response from followers, and this trusting relationship can in turn boost the leader’s referent power.
As mentioned in Chapter 10, one of Bob Iger’s �irst actions at Disney was to switch from a centralized to a decentralized structure and to move decision making into the hands of more people. “You put good people in jobs and give them room to run,” he said. “You involve yourself in a responsible way, but not to the point where you are usurping their authority” (Grover, 2007). This approach of empowerment provided much-needed room for innovation and revitalized Disney’s creative culture, especially after the company transitioned from the former CEO Eisner who was more aggressive and confrontational in using power, which was a style that had been effective earlier in a different period of growth at Disney (Donlon, 2014).
“Why do some leaders use their position to amass personal prestige and resources, and others to bene�it the team, the organization, or society?” (p. 17) (Galinsky, Rus, & Lammers, 2011; Thomas, Martin, & Riggio, 2013; Williams, 2014). Based on recent studies, “self- serving leader behavior has been found to be predictable based on the function and nature of power—an essential component of leadership” (p. 2) (Williams, 2014). Williams concludes that
for generally other-oriented individuals, having power actually made them better people than they were before. This suggests that not only may power not always have negative effects, but it may have positive, rather than neutral, effects as well. This is good news for organizations and good news for humanity. The reputation of power as a purely malevolent social force appears then to be at least partially undeserved. (Williams, 2014, p. 2).
Grant (2013) cites studies that show that “Everyday, employees make decisions about whether to act like givers or like takers. When they act like givers, they contribute to others without seeking anything in return. They might offer assistance, share knowledge, or make valuable introductions. When they act like takers, they try to get other people to serve their ends while carefully guarding their own expertise and time.” Organizations win with employees who are “givers” instead of “takers.” Those organizations with higher rates of “givers” had higher unit “pro�itability, productivity, ef�iciency, and customer satisfaction, along with lower costs and turnover rates” (2013).
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Organizations win with employees who are “givers” instead of “takers.”
However, givers as well as organizations with higher numbers of givers must take care that personality types of givers do not succumb to three complicating attributes—timidity, availability, and empathy. As Grant notes, “How can they [organizations and givers] avoid creating situations where already-generous people give away too much of their attention while sel�ish coworkers feel they have even more license to take? How, in short, can they protect good people from being treated like doormats?” (2013).
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11.5 Managing Con�lict Con�lict is a disagreement or argument over incompatible goals, opinions, principles, or interests between two or more parties. There is functional (positive) and dysfunctional (negative) con�lict in organizations. Like politics, con�lict is inevitable and even natural in organizational situations where teams and groups in�luence, communicate, compete, negotiate, and share resources.
Types of Con�lict
Two types of con�lict exist in organizations and group situations: functional and dysfunctional (Jehn, 1997). Dysfunctional, or negative, con�lict results in situations where arguments and disruptions among competing parties are not easily if ever resolved. In�ighting, taking sides, and dissatisfaction result. Functional con�lict occurs when disagreements occur but are negotiated and managed to the bene�it of organizational goals and priorities. Because both types of con�lict generally occur in organizations for different reasons, leaders and followers bene�it from knowing the causes of con�lict, styles of resolving con�lict, and methods to use con�lict positively and for the bene�it of the organization’s legitimate goals.
Besides functional and dysfunctional types of con�lict, Jehn (1995) also stated an additional two types of con�lict: relationship con�lict and task con�lict. Relationship con�lict occurs when group members have incompatible personality characteristics and traits. Even if only two group members are incompatible, tension can arise within the entire group. Relationship con�lict almost always generates issues that can negatively impact a group if not prevented or resolved early on.
In order to maintain relationships and avoid dysfunctional con�lict, there are certain steps that can be taken. Coaching group members on skills that they can use with one another, especially skills for when two parties are not compatible, is recommended. Learning and practicing collaboration is one such skill. It is important to also build trust through collaboration. Through trust, each individual member feels safe and communicates from a comfort zone with others and the group as a whole. It is also important to maintain ethical practices, such as fairness, acting for the interests of the larger organization and not from individual or coalitional interests, and treating others as each member wishes to be treated. We will discuss other related skills in this section.
Task con�lict occurs when the members of a group disagree with the actions of the group itself. This is less focused on personalities, and more focused on the actions, opinions, and ideas between members. An example of task con�lict arises when a new group member suggests, or argues for, a different procedure or method for performing a task, against the group’s traditional working methods. Task con�lict can also occur when procedures are nonroutine, and tend to widely vary. Negative task con�lict is then likely to occur. Task con�lict in nonroutine situations can actually help a group if members are willing to openly debate ways to perform a task in a constructive manner.
To avoid task con�lict, it is important to focus on the goal of the task, stay organized and plan ahead, ensure all group members receive proper training, and keep all group members invested in the task.
Causes of Con�lict
There are different causes of con�lict in organizations (Terry, 1996), other than the incompatibility of personalities mentioned earlier. Some of the most common causes of con�lict include competition for limited resources, differences in goals, organizational structural differences (departments and functions), and roles and responsibilities among different professionals. When organizations lack funds, equipment, and other means to enable professionals and teams to perform, con�lict will occur. Goal differences occur when groups among different organizational departments, divisions, and work units whose professionals have different time horizons for accomplishing goals, are rewarded differently, and have different skills and training.
For example, research and development (R&D) departments usually have longer time horizons to create and develop new products and services, while production departments build and construct products that work under tight time pressures. Production professionals are generally doers who have been technically trained while R&D professionals are sometimes PhDs with scienti�ic backgrounds who are paid to invent and create. When professionals from sales,
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marketing, accounting, and quality control are brought together with R&D and production into a single team with a project goal and deadlines, you can see how natural con�lict occurs and can become dysfunctional without the coordination, communication, and control of leaders and managers. Being aware of such structural and personality differences is a �irst step toward preventing and managing con�licts.
Con�lict Management Styles
There are �ive classic con�lict management styles (Thomas, 1976; Thomas & Kilmann, 1978) that have been revised, reframed, and enhanced, but still retain the basic meaning of the original authors. Knowing the different styles, the logic of how each functions, and which style(s) best characterizes your method of addressing con�lict provides another valuable resource for effective leadership and management. Refer to Figure 11.1, and take Assessment 11.2 before reading the styles.
Assessment 11.2 Managing Con�lict Styles
Circle the number that indicates how well these statements describe you Rarely Always
1. If someone disagrees with me, I vigorously defend my side of the issue…
1 2 3 4 5
2. I go along with suggestions from coworkers, even if I don’t agree with them…
1 2 3 4 5
3. I give and take so that a compromise can be reached… 1 2 3 4 5
4. I keep my opinions to myself rather than openly disagree with people… 1 2 3 4 5
5. In disagreements or negotiations, I try to �ind the best possible solutions for both sides by sharing information…
1 2 3 4 5
6. I try to reach a middle ground in disputes with other people… 1 2 3 4 5
7. I accommodate the wishes of people who have different points of view than my own…
1 2 3 4 5
8. I avoid openly debating issues where there is disagreement … 1 2 3 4 5
9. In negotiations, I hold on to my position rather than give in … 1 2 3 4 5
10. I try to solve con�licts by �inding solutions that bene�it both me and the other person…
1 2 3 4 5
11. I let coworkers have their way rather than jeopardize our relationship…
1 2 3 4 5
12. I try to win my position in a discussion… 1 2 3 4 5
13. I like to investigate con�licts with coworkers so that we can discover solutions that bene�it both of us…
1 2 3 4 5
14. I believe that it is not worth the time and trouble discussing my differences of opinion with other people…
1 2 3 4 5
15. To reach an agreement, I give up some things in exchange for others… 1 2 3 4 5
Scoring
Write the scores circled for each item on the appropriate line below (statement numbers are in the brackets), and add up each scale. Higher scores indicate that you are stronger on that con�lict management style.
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Dominate/Compete (1) __________ + (9) __________ + (12) __________ = __________
Accommodate (2) __________ + (7) __________ + (11) __________ = __________
Negotiate/Compromise (3) __________ + (6) __________ + (15) __________ = __________
Avoid (4) __________ + (8) __________ + (14) __________ = __________
Collaborate (5) __________ + (10) __________ + (13) __________ = __________
Source: Originally adapted from M. A. Rahim, (1993). A Measure of Styles of Handling Interpersonal Con�lict, Academy of Management Journal 26, June , pp. 368-376. Reproduced with permission of Academy of Management.
Avoidance A person who realizes that there is a con�lict but does not want the con�lict to escalate, and does not wish, or is unable, to act to prevent or resolve the con�lict will simply ignore the con�lict. This style is passive and indicates that although a relationship con�lict may not arise, neither is the con�lict necessarily resolved. This style can work when the other individual(s) is knowledgeable and can solve the problem at hand. However, a possible limitation is this style may not help you obtain your desired goals.
Accommodation A person using this style does not ignore the con�lict, but cooperates with the desire of the other party. This also is a somewhat passive style and the person may not bene�it from responding accordingly but relationships can be maintained.
Competition/Domination Using force, or having a competitive mind-set, can lead to relationship con�licts. Unlike accommodation and avoidance which are more passive, this con�lict style is aggressive, which may create a bene�it for the aggressor, but the bene�it may also be taken away from the other party. As a win or lose approach, you may not succeed at achieving your goal. This approach is suggested with emergencies under conditions of high time pressure when decisions must be made and when you inform others about your using this approach to gain support if possible.
Negotiation/Compromise Although competition or domination focuses on winning and losing, there is no winning or losing in negotiation and compromise. (It usually is a lose–lose result because both or all parties do not get all or exactly what they want.) This style focuses on maximizing the bene�it for all parties involved through a give-and-take method. This style may lead to a task con�lict because both parties may start off with different end goals in mind. In order for this style to be effective, the parties must be aware of differences in goals. This style is recommended when a temporary resolution may work and each party has goals that are of equal importance. It is best to use collaboration if possible to arrive at a more desirable solution.
Collaboration Collaboration, like negotiation, has neither a winner nor a loser. However, both parties decide upon the end goal and work together toward a win–win solution. Instead of a give-and-take method, the parties work together towards a single goal in order to maximize the bene�it for all involved. This style is recommended for complex issues where trust, the desired skills for reaching consensus, and suf�icient time is allotted for the process to occur are required.
Figure 11.2: Styles of managing con�lict
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Based on Thomas, K. (1976). Con�lict and con�lict management. M. Dunnett (Ed.), Handbook of industrial and organizational behavior. New York, NY: John Wiley.
Steps Toward Resolving Con�licts
For those con�licts when avoiding, competing, and accommodation do not work, other steps can be taken to address complex, long-term issues and problems. Integrative and distributive negotiation models were discussed earlier and apply here. Collaboration requires an integrative negotiation approach where some of the other con�lict approaches resemble distributive approaches. Other general steps toward resolving con�licts (Robbins, 1974) include meeting face- to-face to identify the problems and then openly discussing—and brainstorming— solution scenarios. Jointly creating a superordinate goal (a larger goal, but perhaps incorporates goals of those of the parties involved) that requires the cooperation can be helpful. Finding ways to increase resources also may help ease tension and pave ways to arrive at win–win solutions. Including objective outside observers with different, unbiased perspectives can also reduce tension and pressures that lead to more open discussions. Having a discussion to agree to be open-minded and communicating with the intent to resolve differing issues can also provide an environment for change.
For larger, very complex issues in which con�lict involves many more stakeholders and employees, leaders and managers may consider larger systems approaches that involve strategy, reorganization, and policy changes. These are the topics of the next chapter.
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Summary & Resources
Chapter Summary Leaders exert power and in�luence to achieve organizational goals. Identifying and studying the sources and types of power and in�luence they effectively use informs us of how we also as followers and leaders can effect change by mobilizing people and resources to get things done. Because leadership involves people, processes, and systems, different types of power and in�luence are needed depending on the situation.
Leaders need to know how to use soft, hard, and smart power, as well as expert, reward, informational, referent, connection, prestige, and sometimes, coercive power. Leaders must also be involved in knowing how and when to deal with the politics and power in situations. Since politics is a social as well as professional medium of exchange, which involves a natural way of individuals and groups trying to achieve often competing goals, it isn’t by de�inition bad, unethical, or evil. In fact, we all need to understand and use power and in�luence constructively to not only achieve organizational goals, but also to advance our department’s and team objectives on behalf of the organization.
We also need to use political power ethically to advance our careers. When individuals and groups use power illegally and unethically to pursue their own personal interests over the organization’s, then problems arise. Knowing how, then, to use power and in�luence legitimately to network, use methods of reciprocity, coalition building, and negotiating is important. Also being aware of illegitimate, illegal, and unethical uses of power by those around us in organizations is also necessary. Con�lict like politics in organizations can be both functional and dysfunctional.
Finally, we discussed ways of understanding our’s and others’ con�lict management styles and to recognize sources of con�lict in order to prevent and deal effectively with dysfunctional types of disagreement to prevent unnecessary consequences. As you move toward the completion of this text, you can see how previous chapter concepts, knowledge, and assessments inform, interrelate, and integrate an understanding of leadership and the skills you will or already are using as an emerging leader.
Web Resources Stanley McChrystal on Leadership
http://www.youtube.com/watch?v=FmpIMt95ndU (http://www.youtube.com/watch?v=FmpIMt95ndU)
Stanley McChrystal discusses the lessons he learned about leadership during his time in the military.
The Washington Post on Leadership
http://www.washingtonpost.com/national/on-leadership (http://www.washingtonpost.com/national/on-leadership)
The Washington Post offers articles and analysis on leadership.
Critical Thinking Questions 1. Your boss orders you to perform a task that is unethical, and legally questionable. You have a very good
relationship with your boss and do not like to reject her requests; you also need this job. What would you do and why?
2. Identify differences between the four types of power. Which source of power do you use most frequently and why? Which types would you feel uncomfortable using? Why? (Return to the assessments you took earlier in the text and see if there are any connections between your responses and your answers to this question.)
3. What type of in�luence do you think would work best in your work and/or school experience? Explain. 4. Describe the differences between power and politics. Under what conditions would you need to be “political” in
your work or university experiences? How and why? 5. Describe situations in your work or university life in which con�lict occurred. What part of that con�lict, if any,
was functional? Dysfunctional?
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6. What style of con�lict resolution did you use in your situations in question 5? What was the result? 7. Describe what type(s) of con�lict resolution you believe you would need to use as a leader in an organization
and why. What differences would the style(s) you described here be different than the styles you described in question 6?
8. Are you more a “giver” or “taker” as described in this chapter? Explain. What problems have you experienced as a giver or a taker in your current or previous roles at work or in the university?
9. Did your leader(s) in question 8 in�luence or make a difference in situations that affected you as a giver or taker? Explain.
Key Terms
bribery Unethical and often illegal tactic of offering money or a gift to alter behavior that cannot be obtained through legitimate means.
coercive power Power based on a person’s authority to punish and withhold rewards.
con�lict A disagreement or argument over incompatible goals, opinions, principles, or interests between two or more parties. There is functional (positive) and dysfunctional (negative) con�lict in organizations.
connection power Power that comes from an individual’s network by virtue of relationships with powerful people.
debasement Lowering the quality or character of something or someone.
distributive negotiation A type of negotiation where “win-lose” situations arise. One party tries to “win,” or bene�it, as much as possible, taking away from the bene�it from the other party or parties.
divide and conquer In�luencing tactic used to keep individuals separate and prevent them from building coalitions, so that the leader or a person can gain and keep power.
empowerment Giving employees more leeway to make decisions rather than managing every aspect of work; it means transferring some power to an employee, which builds both trust in the leader and buy-in from the follower because the employee has a higher stake in the process and the outcome.
expert power Power based on a person’s experience, knowledge, or expertise.
in�luence A person’s ability to affect or change the actions, behaviors, and opinions of others in desired ways.
information power A form of power that comes from having access to the information or informational sources (technical, organizational, personal) that others need to complete their work.
ingratiation Trying to win admiration from people you do not like.
integrative negotiation A type of negotiation where the goal is to create a “win-win” situation.
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legitimate power Power that comes from the organization; in this form of power, someone is likely to act upon requests from another because of formal position, hierarchical status, or relationship to the organization.
legitimating In�luencing tactic that invokes the hierarchy of an organization directly by asking someone with more authority to intercede. In an upward appeal, a manager might ask a senior manager or director to intercede in order to in�luence an employee’s behavior.
negotiation Discussion aimed at reaching an agreement; the key to good negotiation is �inding a way for all parties to win rather than treating the discussion as a competitive situation where a win for one person translates into a loss for another.
network Source of contacts that includes people, organizations, or alliances inside and outside an organization and that offers a source of power through human connections to an individual.
organizational politics Individual (http://www.businessdictionary.com/de�inition/individual.html) s seeking their own goals, objectives, and self- interest (http://www.businessdictionary.com/de�inition/self-interest.html) s, many times disregarding the goals of the organization. There are functional and dysfunctional politics in organizations.
position power Using one’s formal position and status in an organization as a source of in�luence and control.
power The potential to in�luence others, directed toward reaching a desired set of outcomes.
prestige power Originates from informal status rather than an of�icial position within an organization.
rational persuasion A tactic that involves in�luencing people through evidence and logic.
reciprocity A source of power that derives from giving and receiving bene�its in organizational relationships: “I help you, and you help me.”
referent power A form of power based on personality and personal characteristics.
resistance The least desired outcome, in which a request is not completed.
retaliation An oppositional in�luencing tactic, based on the idea of an eye for an eye; instead of a productive reciprocity of paying another back for a favor through future support, retaliation calls for repayment for negative actions.
reward power A hard form of power; comes from the leader’s ability to reward a follower through raises, bonuses, and other incentives.
turf wars A tactic used by a group or organization that instigates con�lict among other groups or organizations in order to protect or gain control over resources and in�luence; also used to involve a group or organization in a struggle over an issue or dispute in order to prevent collaboration and achievement of a common goal.
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Steve Easterbrook, CEO of McDonald's®—the global fast food giant—said in 2015, “Our recent performance has been poor. The numbers don’t lie. I will not shy away from the urgent need to reset this business. . . . Our existing organization is inef�icient and lacks clear accountability. We need to execute fewer things better” (Peterson, 2015).
Six straight quarters of falling pro�it in the United States signaled the alarm. Overall pro�its tumbled to $812 million—84 cents per share—from $1.2 billion, or $1.21 per share, from the previous year. Total revenue decreased 11% to $5.96 billion over the same period (Gensler, 2015). McDonald's has seen a remarkable turnaround under Easterbrook’s leadership. As of May 2018, the company’s sales had rebounded, as had its stock price (Kuehner-Hebert, 2018).
12 Leading Change
iStock/Thinkstock
Learning Outcomes
After reading this chapter, you should be able to:
1. De�ine organizational culture and organizational change.
2. Identify and explain the change models of Dunphy and Stace, Kotter, and the appreciative inquiry approach.
3. Describe leadership capacities and competencies for planning and implementing change.
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Hannelore Foerster/Getty Images Entertainment/Getty Images
Steve Easterbrook, CEO of McDonald's, is in the process of leading a large-scale change process for the fast food giant.
Several factors had pressured the company's poor performance. Externally, food safety scandals in Asia (“CNBC,” 2015), and a growing demand for healthier foods internationally, strained relationships with franchisees. Striking employees demanding higher pay and better working conditions presented additional challenges for the company (Peterson, 2015). McDonald's needed to solve its internal problems as well. As the CEO noted, the company needed “stronger �inancial discipline, faster decision-making, and hard-edged accountability” (Peterson, 2015).
Easterbrook was the leader that McDonald's needed. New initiatives he put in place included new menu offerings and investment in technology to shorten order wait times. Easterbrook also saw the potential for growth in delivery, partnering with UberEats to roll out McDelivery to nearly 8,000 restaurants and releasing its own mobile app for orders and payment. Improving relationships with existing franchisees and accelerating the rate of new franchises also
contributed to the company's turnaround (Reynolds, 2018).
Franchisees praised some of the new menu items, such as Signature Crafted Recipes and McCafé beverages, for increasing guest counts and store sales, but criticized others. The $1 $2 $3 Dollar Menu, designed to give customers more choices, was not found to be “pro�it-oriented” by franchisees (QSR, 2018). Implementing, managing, and leading change is never simple. It’s a complex process that takes time and resilience. How McDonald's continues to adapt to shifting global economies and evolving social norms, both domestically and abroad, will prove an interesting case for leading change now and in the future.
Leading and managing large-scale organizational change is an essential part of leadership and incorporates many of the concepts that have been covered in this text—including transformational, charismatic, and transactional leadership. It is no easy task. In fact, 2017 research from McKinsey & Company showed that 70% of all transformations failed (Gleeson, 2017). Even if that dismal statistic is true—Harvard Business Review stated that “there is no credible evidence at all to support the notion that even half of organizational change efforts fail” (Tasler, 2017, para. 6)—that still means that an estimated 30% to more than 50% of organizational changes succeed. Given the increasing attention to data and metrics in management and leadership, why have we not been able to increase success rates, however they are measured?
We will examine the reasons behind failure and success and the ways leadership can make a difference. Because organizational change is a popular and important �ield in itself, this chapter will simply serve as a preview of the major concepts and methods in the �ield that are available to leaders and managers.
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12.1 Organizational Change De�ined Organizational change refers to any activity that requires employees to work differently (Mourier & Smith, 2001). It comprises a wide range of activities including corporate acquisitions, downsizing, expansion, new strategies, and new infrastructure. These changes are intentional and affect the way that business is conducted, thereby affecting individual jobs. Both crisis management and organizational change can and should be planned.
Organizational change goes beyond simple changes in process to involve leadership, culture, strategy, structure, people, technology, and performance changes. This involves a human element, which requires that leaders and managers be able to design and guide organizations to transition to new work environments, and to do so in ways that work for business results and for those employees who are retained. One of the biggest challenges of organizational change is that it affects all levels of the organization, from executives to employees, and leaders must �ind ways to articulate and motivate followers to embrace potentially disruptive changes to their normal, established work �low.
Companies and sometimes entire industries now are confronted with a choice “between radical change—often involving the reinvention of a business model—and imminent obsolescence" (Forbes, 2014, para. 1). Yet, in a 2017 Harvard Business Review survey, when asked about “what worries them most about their company’s future,”executives from primarily large organizations in �inancial services, manufacturing, technology, health care, and retail responded with concern about their organization’s ability to change rapidly enough “to survive and thrive in an increasingly digital world” (Harvard Business Review, 2017, para. 3). Seventy-�ive percent of the 376 respondents said “their organizations will require substantial or extensive change to become even more digital,” and only 7% of the executives said their organization “is extremely open to change," while another 35% said their organization "is somewhat open to change" (Harvard Business Review, 2017, paras. 2, 4). Evidently, today's executives are actively concerned about disruption from the increasing rate of change in digital technology. Other relevant �indings from that survey include the following:
Eighty-nine percent of the respondents "are creating new organizational structures and teams to support digital operations and business models" (Harvard Business Review, 2017, para. 11). A majority of respondents said that communication from leadership that creates a compelling story about the need for change is "one of the three most effective means of building a change-embracing culture—more than any other single factor" (Harvard Business Review, 2017, para. 10). Fifty-one percent of respondents’ companies are using design thinking, deep industry and policy knowledge, analytics skills, and creative skills (agile thinking).
A 2014 Forbes survey of 106 senior executives based in the United States and including a range of industries found that the most signi�icant barrier to successful change is “con�licting visions among executive leadership or decision makers,” cited by 33% of respondents (Forbes, 2014, para. 5). A classic example of such a vision con�lict occurred in 1983 between Steve Jobs and John Scully when Apple®’s board of directors decided to �ire Jobs as CEO and bring on Scully as CEO. Scully was the former president of PepsiCo (Forbes, 2014). We will address these topics in this chapter.
Regardless of the strategy for change, top-level leaders are responsible for guiding and directing transformational changes that involve the entire organization. Leaders who are committed to successful change share key characteristics (Vas, 2001). These leaders need to be courageous, believe in their employees, be able to articulate values that encourage adaptability, be able to manage complexity and uncertainty, have a shareable vision, and learn from the past. They should not be interested in maintaining the status quo. Rather, they should see themselves as implementers of change, able to meet the expectations of investors and equities analysts. Strong, articulate leaders can energize their workforce and other stakeholders and stockholders by showing them that change will lead to an improved future for their daily work and for the company’s long-term growth.
Maurer (2014) looks at leaders in terms of eight behaviors, ranking how well each behavior is followed.
The �irst behavior is an assessment of the organization’s readiness for change. Before the organization starts implementing change, leaders need to get a feel for the organization’s reaction to the coming change. The second behavior is demonstrating support for the change. Without the support of a leader from start to �inish, the change will not be as successful. Third is the change process itself. The leader must make sure to follow one change process in order to keep the change as straightforward as possible, as to not confuse employees. Change itself is complicated to begin with, and using multiple change processes will only worsen the confusion.
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Sthanlee B. Mirador/Sipa USA via Associated Press
Michael Mente and Mike Karanikolas found maintaining a �lat organizational hierarchy challenging as their start-up Revolve grew to nearly $1 billion in sales.
Demonstrating support is not enough; a leader must also demonstrate trust. Trust in a team allows for the change to run more smoothly. A leader must also alert stakeholders to the coming change. The leader must make the stakeholders understand why the change is happening, why it is important, and how it will help the organization. Additionally, the leader must gain the support of the stakeholders. Otherwise, the change will be resisted and will not be as effective as it would have been with full backing. If the leader has superiors, the leader needs to make sure that his or her superiors are on board for the change, and willing to support the decision to make changes. Lastly, the leader needs to learn something from the change that can be used in the future in order to improve upon the change process.
As described earlier, many organizations have been changing from hierarchical structures to �latter, team-oriented ones, and although this has been shown to be effective for many corporations, the shift from one structure to another can be dif�icult. How will promotions be handled? Will there be layoffs in middle management? Will this mean more work? Who will be on the team? These changes may be required to breathe life into a stagnating company to help it remain competitive, and the leader’s job is to express the vision of the improved company and to show how the proposed changes will transform the existing organization for the better. For example, online retailer Revolve has maintained a �lat hierarchy since its launch in 2003. Its sales were approaching $1 billion as it prepared for its initial public offering in late 2018 (Cheng, 2018). Keeping that �lat hierarchy was challenging as the company grew. Founders Michael Mente and Mike Karanikolas told Fast Company that “leaders of �lat companies need to be level-headed when their ideas are challenged by colleagues above or below them. . . . You’ve got to be able to take criticisms and feedback from all angles” (Giang, 2015, para. 10). Strategic thinking and collaboration skills must be fostered across the organization.
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12.2 The Big Picture: Planning and Leading Organizational Change A �irst step in any change process is to identify why a change is needed, where it should begin, who will it affect, and why. Figure 12.1 proposes basic questions that can be asked at a present state and at a desired future state. That is, an executive-led team responsible for planning a large-scale change might brainstorm by asking, “What business are we in now?” and “Where do we wish, or need, to be next year or at a particular future time?” The same can be done with the other questions: “Who is our customer? What are our core competencies? What is our main product and service? Who and what will or should they be next year or at a particular time in the future?” After asking these questions, a team can begin to identify whether and how their current vision, mission, and values should change after a particular organizational change is implemented. For Random House, such a model helped identify that its market requirements had changed to a more digital focus and recognized that the company would need to strategically partner with companies already in the e-book market, such as Amazon.com, Audible.com, Barnes & Noble, Google, and Sony, and shift production and even editorial competencies to become much more technologically oriented. How would this change affect their vision and values?
Figure 12.1: Strategic alignment questions
Source: From Weiss, J. (2009). Business ethics: A stakeholder and issues management approach (5th ed.). Mason, OH: South-Western, Cengage Learning. Reprinted by permission of the author.
Leaders like Markus Dohle at Random House and Steve Easterbrook at McDonalds as well as their top-level team leaders generally have to take calculated risks to achieve growth and performance goals when planning and implementing transformational changes. Wealth creation in organizations is facilitated by strategic leadership that takes risks (Rowe, 2001). Different levels of risk are necessary when envisioning a new future for a company, its stockholders, and stakeholders. Mark Zuckerberg at Facebook believes that “The biggest risk is not taking any risk. . . . In a world that’s changing really quickly, the only strategy that is guaranteed to fail is not taking risks” (Fell, 2014).
On the other hand, taking uncalculated and irresponsible risks can upend companies like Exxon and others. Levy, Krivkovich, El Quali, and Graf (2015) at McKinsey & Company concluded from a study on organizational risk taking, particularly in banks, that “In our experience, most risk incidents tie back to a cultural root cause, fostering inappropriate decisions and actions that result in losses. Crises can continue to emerge when organizations neglect to manage their people’s attitudes and behaviors towards risk across all lines of defense” (p. 1). Based on their experience
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with banks, Levy et al. also stated that the keys to a successful risk culture transformation—which are relevant to other organizations planning changes—are: “(1) Reaching a broad consensus on the desired risk culture that is linked to the linking into overall organizational culture; (2) Reviewing formal mechanisms to enforce a strong risk culture and developing people’s capabilities related to dealing with risks; and (3) Overinvesting in communication and senior leadership role modeling” (Levy, Krivkovich, El Quali, & Graf, p. 3).
Take HUMANMETRICS Risk Attitudes Pro�iler™ (http://www.humanmetrics.com/risk-taking (http://www.humanmetrics.com/risk-taking) ) to get a sense of your risk-taking attitudes. Add this result to your other assessments in this text to discern any patterns in your overall evolving leadership style.
Organizational Alignment Matters
As organizations change, organizational alignment becomes increasingly important. George (2014) argues that alignment is the “key” to success. Siloed organizations often function out of alignment, which can inhibit change. Therefore, it is important for organizational functions to align “internally” and between other organizational functions (George, 2014).
Change leaders must also be aware that any time a major strategy is changed, other aspects will likely also have to change. In Chapter 9, we discussed how strategy is one of the 7-S model assessments in the organizational alignment framework (see Figure 12.2). The other six 7-S model tools— structure, systems, shared values, skills, and style—must be realigned to maintain consistency and cohesiveness among employees, legitimacy among stockholders and stakeholders, and connection with customers. When Random House shifted focus from print to digital media, it also moved its key staff members into different positions. The team’s structure was likely to become less hierarchical (a functional team) and more cross-functional, self-managed, and even partially virtual, depending on geography and expertise availability.
Figure 12.2: Shared values model
Source: Waterman, R. H., Peters, T. J., & Phillips, J. R. (1980). Structure is not organization. Business Horizons, 23(3), 18. Copyright 1980 by Elsevier. Reprinted by permission.
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Many leaders have “town meetings” where top-level leaders offer more information and plans for integrating the larger culture with mid- and lower-level organizational units.
The company also likely followed suit with changes in its systems (reward, accounting, human resource, and technology) to �it with the digital business focus. For example, iPads, iBooks, and other new products will likely increasingly use their products. The internal culture began to change as new hires with different skills came on board with different values and working styles. Such internal and external realignments do not happen overnight. They must be planned, coordinated, led, and managed with foresight.
Once an organization is realigned, it is important to make sure that the alignment is sustained. George (2014) argues that there are three important aspects for sustaining alignment: planning and incentives, communication, and feedback and reporting.
The realignment not only needs to be planned before implementation, but the planning needs to span into the future as to how the alignment will stay intact. There also needs to be an incentive for sustaining the alignment, such as increased performance or bonuses. Communication is also important in sustaining alignment because it allows for increased transparency, knowledge, and trust. Alignment is much easier when everyone is on the same page from having the same information. A third aspect for sustaining alignment is feedback and reporting, which is closely related to communication. In this case, communication can be used to �ix problems and improve upon processes, as well as track performance.
Culture Counts in Organizational Change Culture remains a most important dimension in any organizational change and realignment. As seen in the 7-S framework (Figure 12.2), shared values are at the center of alignment models. The effects of cultural shift can be felt throughout the organization, including in and across teams.
Middle- and lower-level leaders and managers can assist with this type of shift by having top-level leaders join them with teams and groups of employees in informal roundtable discussions about the issues that the employees are experiencing. Discussing speci�ic ways that different professional and team needs can be met is also part of these discussions. Many leaders have “town meetings,” where top- level leaders offer more information and plans for integrating the larger culture with mid- and lower-level organizational units. Providing forums to listen to mid- and lower-level employees’ experiences with such cultural shifts is another way of showing concern, as is following up with suggestions from employees on how to enhance their work and meet their cultural needs after a major organizational change.
When planning an organizational change, classic and contemporary models are used not only by change management specialists and consultants but also by top-level leadership teams and internal organizational staff. Three classic and current models are described here.
Dunphy and Stace’s Change Model
Dunphy and Stace’s change model helps leadership teams decide on the scope, size, and nature of a desired change. Is it �ine-tuning, incremental adjustment, or modular—all are de�ined here by Dunphy and Stace’s (1993) four levels of change.
Level 1: Fine-Tuning This generally is not a large-scale change, and has traditionally required minimal effort and resources to re�ine policies, develop people, or adjust processes. It is usually focused at a departmental or divisional level. However, as with Alibaba,
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Net�lix, Amazon and other technology companies, �ine-tuning can involve an ongoing process of matching and “�itting” parts of an organization’s strategy, structure, people, and processes with the environment.
Level 2: Incremental Adjustment Incremental adjustments are predictable changes that evolve slowly and systematically at a constant rate over time within the organization to �it the external environment. No radical changes are needed, but modi�ications are made such as shifting emphasis among products, expanding a sales territory, and modifying a mission statement to employees. Both this type of change and �ine-tuning are developmental in nature. The focus is on executing a well-de�ined shift in the way things work. For example, a large technology company wishes to integrate specialized engineers into regional sales teams. This involves role changes, client assignments, compensation, goals, and teamwork. Hundreds of people will be affected. So this is not a trivial change, but neither does it involve the entire organization.
Level 3: Modular Transformation Organizational change is radical in this type of change, but in modular transformation it is focused on subparts rather than on the entire organization, for example, restructuring departments or divisions; changes in key executives and managers’ responsibilities; introducing new processes in IT, human resources, or a business process. This type of change is related to transitional change.
Level 4: Corporate Transformation Corporate transformation, like transformational change, involves a radical shift in the business strategy and changes in the vision, mission, culture, and systems. The plan and projected outcomes are more unpredictable and experimentation and risk is involved. There is outside recruitment of new executives and key management positions. Most, if not all, of the internal systems and dimensions of an organization are affected. Kotter’s eight-step change process, discussed in the following section, addresses this type of planned organizational change. Also in transformational change the organization may essentially be reinvented. For example when Meg Whitman took over as CEO at HP (Hewlett-Packard) in 2011 and then became chair in 2014, she realized she would be in charge of a transformational turn-around for one of the world’s largest computer and printer �irms. With stocks trending downward and strategy seeming confused, she moved forward with her predecessor’s plan to split HP into two companies: one an enterprise-computing technologies service, and the other selling products like personal computers and printers.
Kotter’s Model of Organizational Change
Because organizational change does not happen easily, leaders can facilitate and help their organizations accept new opportunities and adapt to external threats. As with the process of team building, change implementation follows certain stages, and a successful leader understands the process and can guide the organization through systematic steps. J. P. Kotter’s book Leading Change (1996) is a seminal work on leading transformational change Kotter’s change model is perhaps the most widely used by corporations, organizations, and change consultants. His eight-step program for leading change can apply to a wide range of organizational change situations (see Figure 12.3). Kotter’s eight stages of organizational change are outlined in the following sections.
Figure 12.3: Kotter’s eight stages of organizational change
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Stage 1: Create Urgency Everyone in an organization, from executives to employees, is willing to change if it’s important. Politicians know this well and constantly invoke crises to win over constituents. Urgency wins support and cooperation. If the people in the organization, in particular the leaders, feel complacent, they have no impetus to change. If everything is OK, they will maintain the status quo. However, in a crisis situation, leaders are motivated to get involved and to recruit followers, which adds momentum to any change initiative.
The economic crash provided one strong reason for organizational change. Many companies have had to downsize in the face of decreased revenue, and although layoffs are never popular, the urgency of many situations requires organizational changes, especially if change means potentially saving the organization or its viability in the marketplace.
Stage 2: Form a Guiding Coalition A strong team with a shared objective can implement change far better than a single individual, and this force is needed for transformation within an organization.
With a diverse team, members can �ind ways to share and communicate the new vision in ways that their speci�ic followers can understand—the CFO can explain the reasons for change in a way that wins buy-in from the �inance department, and the head of research and development can show how changes will bene�it that department.
In addition to communication, a guiding team can oversee the creation of new processes within the organization far better than a single executive can. A team can also draw on more resources than an individual, even a powerful CEO, and demonstrate quick results, which in turn can secure support from more leaders and employees.
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When Chuck Robbins became CEO of Cisco Systems, he shook up the company’s executive ranks, putting together “a high-energy team with a healthy level of impatience,” he told CRN (Computer Retail News) in 2018 (Brown, 2018, p. 1). He described his team as “incredibly aligned on what we’re trying to accomplish,” with deep subject matter expertise in their functions, balanced with an ability to, “at a high level, tell the story of what we’re trying to accomplish” (Brown, 2018, p. 1). His team is not only gender diverse but also diverse in experience and approach, which, Robbins said, “is helping us think more holistically about how we attack opportunities and solve problems” (Brown, 2018, p. 3). The company surged in growth between 2009 and 2013, driven by a strategic focus on acquisitions and mergers led by Robbins’s predecessor, John Chambers.
Stage 3: Create a Vision and a Strategy A clearly articulated vision simpli�ies organizational change for employees. Instead of listing dozens of minute decisions, a vision sets a general direction and motivates employees toward that positive outcome, and the strategy de�ines how that goal will be accomplished. A simple vision can direct thousands of individuals, and even if initial steps in the change are painful, such as losing colleagues through downsizing or breaking up an established team during reorganization, it provides a picture of a hopeful outcome.
A change vision is a guide for what an organization will look like after changes have been made, and for what opportunities there are for the organization after the changes have been implemented. It is a good tool for motivating employees to support the changes (Kotter, 2011). An effective change vision is: easy to understand, easy to communicate, short and to-the-point, is emotionally appealing, and applicable to a wide range of people (Kotter, 2011). If a change vision is created effectively, it should help others to “buy in” to the change.
A vision statement is different from a mission statement. A mission statement is based on the present and aims to explain the purpose of the organization, while a vision statement is focused on the future and aims to inspire and lead the organization in the right direction (Arline, 2014).
In addition to a vision statement, an organization needs to have a strategy. In 2016, research by the �irm Navalent estimated that 67% of well-formulated strategies failed due to poor execution, 61% of executives are not prepared for the strategic challenges they faced upon being appointed to senior leadership roles, and 50%–60% of executives fail within the �irst 18 months of being promoted or hired (Carucci, 2017).
Expert on execution, Larry Bossidy, former Chairman and CEO of Honeywell International, wrote “People think of execution as the tactical side of business, something leaders delegate while they focus on the perceived ‘bigger’ issues. This idea is completely wrong. Execution is not just tactics—it is a discipline and a system. It has to be built into a company’s strategy, its goals, and its culture. And the leader of the organization must be deeply engaged in it” (Altfeld, n.d.). In 2018, the University of Notre Dame's Mendoza College of Business posted a list of “7 Leadership Behaviors that Build Success," (updating Bossidy’s list from 2002): 1—Ethics and integrity; 2—Trust; 3—Growing others; 4—Inspire the vision; 5—Decision-making; 6—Encouraging innovation; and 7—Rewarding achievements (University of Notre Dame, 2018).
O’Connor and O’Connor (2015) took a look at why so many business strategies fail, and came up with 10 reasons.
1. The strategy is formulated without a team, or the team members are not the right people for the job. 2. The strategy does not motivate employees. 3. There is a separation in responsibility regarding creating the strategy and implementing the strategy. 4. The company is internally focused, not taking into account outside factors. 5. Lack of structure and accountability. 6. Too many strategies are attempted to be implemented so the process becomes unfocused. 7. Strategy results are not measured to check on progress and success. 8. The execution team does not have meetings to discuss the progress of the strategy. 9. The entire company is not updated on the progress of the strategy, which would increase understanding and
transparency. 10. The company does not take an objective perspective, or bring in an outsider to manage the creation and
execution of the strategy.
In order to ensure that a strategy is successful, these 10 common reasons for strategy failure must be considered.
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ASSOCIATED PRESS/Wong Maye-E
Piyush Gupta, CEO of DBS, Singapore’s largest bank, made one of his priorities to clarify the bank directed and future vision.
Leong (2014) observed that there are three reasons companies may face problems with forming a vision for the future state, that is, too big, too numbers-driven to implement, and too complicated to achieve. Leong (2014) writes that “Vision statements may be lofty and inspirational, but they don’t take the place of the tactical actions workers must take to move toward the future.” Vision statements that are too far-reaching can create a “paralyzing environment” in which leaders continue to pursue ill-de�ined plans. Vision statements that are too numbers-driven may be understood by employees but not agreed upon. Vision statements that are also too complicated also cause confusion. To avoid these errors, responsible and talented leaders and managers should be clear, engage their teams and work with them to see how work connects to and �its with the vision to ensure successful change efforts and outcomes.
Stage 4: Communicate the Vision Simply having a vision is not enough. In order to keep followers motivated, leaders need to constantly communicate that vision, reinforcing the shared, positive outcome. Consistency of message is important in transformative change, as it keeps leaders and employees focused on the desirable end to a disruptive process; so instead of concentrating on potentially upsetting daily changes, leaders from the CEO down to managers should promote the same message of a positive outcome.
Piyush Gupta, CEO of DBS, Singapore’s largest bank, made one of his priorities to clarify the bank directed and future vision. He held off- site meetings for three days to develop with his team a clear strategy, the outcome being a “nine-point strategic road map that the bank has executed during the past four years” (Leong, 2014). He is guiding DBS to be a leading Asian bank by ensuring that its leadership works closely together building franchises in wealth management, SME banking, transaction banking, and treasury and markets.
Leaders who can create clear visions and strategies with their teams and companies are more likely to succeed in planned changes than those who do not. After Steve Jobs left Apple and before his death, Tim Cook took his place as CEO in August of 2011. Employees were faced with uncertainty. Would Apple be the same? What changes would be made? How would this affect the products that were created and the day-to-day work of the employees?
In order to combat this uncertainty, Cook’s �irst email as CEO stated “Apple is not going to change” (Kane, 2014). What he actually meant is that the fundamentals of Apple would not change. In the days to come, he would demonstrate through his actions how the culture of Apple would become more relaxed and focused on teamwork.
Cook started a charity program as one change, which was well received by employees. He also started communicating with employees more frequently through e-mails, meetings, and even during lunch. Cook decided that he would introduce himself to different employees in order to create more intimate relationships.
What also contributed to strengthening Cook’s new role was his early e-mails reassuring employees that they would still have their jobs. He also communicated the change in culture through his actions—frequent e-mails and getting to know individual employees. His clear communication throughout the early change process was a critical aspect of also managing that change.
Goman (2013) believes that Pennington’s book, Make Change Work: Staying Nimble, Relevant, and Engaged in a World of Constant Change (2013), correctly outlines �ive common questions that employees have about change, and that these questions should be addressed.
1. What is changing? 2. How will this change the day-to-day operations for individual employees? 3. Will this change actually bring improvement? 4. How is the success of the change going to be measured? 5. How much support is behind the change, and who is supporting it?
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Goman (2013) also stresses the importance of nonverbal communication, such as body language. Body language has the power to reinforce or derail verbal communication. Leaders and executives need to align their body language with their verbal communication. For example, leaders speaking about being open to ideas and comments while they are on a stage and behind a podium �ind that their message is not effective because their verbal and nonverbal communication is not in alignment. However, a leader speaking to a group while they are on the same level, without anything between the speaker and audience, is more effective at communicating the message.
Stage 5: Empower Action The �irst half of Kotter’s eight-stage plan involves motivating employees by keeping them informed and focused on a positive outcome. Empowering employees to act also removes resistance to change by including followers in the process. Instead of this change being imposed from above, followers can engage in and affect the outcome. This empowerment can occur through knowledge, resources, and discretion to support and further change. When FedEx implemented teams, it trained and empowered its employees, who then collaborated to improve internal processes. Although the change was disruptive, it resulted in buy-in.
Stage 6: Create Quick Wins Organizational change takes time, so it is important to demonstrate quick results to keep employees motivated to stay on board for the long haul. The most effective short-term wins are highly visible, so that many followers can see the results; unambiguous, so that the change initiative can’t be questioned; and clearly a product of the transformation. Employees want to know that their efforts and the dif�iculties of the process are worth completing, and short-term wins prove that they should continue and that their current path will lead to a positive outcome.
When the U.S. government changes hands between political parties, it employs this strategy. The new ruling party tries to pass a few straightforward bills that its constituents support in order to demonstrate effectiveness and progress.
Stage 7: Build on the Change In this stage, leaders build on the support gained through short-term wins in order to produce enough momentum to push for larger efforts. Successful change leaders do not declare victory after small wins, but use them to bolster the energy and con�idence that followers can achieve more signi�icant goals. As employees see the results of larger initiatives, they have even more drive to complete the change.
In the case of attempting to turn a company around during a recession, the success of a new product may serve as impetus for an entirely new line. The initial success of a relatively small experiment can motivate excitement and drive for the larger project, just as the Rockefeller Foundation uses small successes to leverage larger investment.
Stage 8: Make it Stick Transformations are not complete until they become part of an organization’s culture. During this stage, leaders model new values, attitudes, and behaviors so that employees understand the permanent improvement, much like developing norms in team building. Leaders can use this stage to celebrate and promote employees who adopt the new values or beliefs of the organization. These individuals in turn can serve as examples for others and reinforce the revised norms.
Recent Revisions to Kotter’s Classic Model Appelbaum, Habashy, Malo, and Sha�iq (2012) introduces limitations to Kotter’s eight-step model, the most prominent of which is that this framework is only applicable for “fundamental changes” and not for more complicated ones. The steps are also supposed to be followed in order, which means that the framework is not �lexible for organizations that would prefer to change the framework to align more with their corporate culture. In some cases, not all of the steps apply to the change; for example, changes that need to be kept a secret do not allow for communication. These steps also do not address issues that may arise from lack of commitment. However, Appelbaum et al. (2012) state that although Kotter’s eight-step model has some drawbacks, it is a great starting point for implementing changes.
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In 2014, Kotter updated his eight-step process in his book, Accelerate. In this book, Kotter made four key changes to his original process (LeStage, 2015). All four changes address Appelbaum et al.’s (2012) concern that the process is not �lexible. Kotter’s �irst revision is that the steps should run “concurrently and continuously.” Second, a volunteer group should be formed from all over the organization (top, bottom, and across) in order to drive the change. Third, there should be an allowance for �lexibility and agility outside of the traditional organizational hierarchy form, while still allowing the �lexibility and agility to work with the hierarchy. Finally, the process should be dynamic and leaders should look for opportunities and initiatives to quickly and ef�iciently take advantage of. Clearly, Kotter’s steps are still relevant today, but the process was in need of adaptation.
Appreciative Inquiry Change Model
Unlike other “problem solving” change models, appreciative inquiry (AI) is an opportunity generating process that involves employees from the bottom- and middle-up and cascades throughout the entire organization to create and implement changes. The model has been used by all sizes of organizations worldwide to effectively involve, engage, and mobilize leaders, managers, employees, and stakeholders. As cofounder David Cooperrider explains:
Appreciative Inquiry is about the coevolutionary search for the best in people, their organizations, and the relevant world around them. In its broadest focus, it involves systematic discovery of what gives ‘life’ to a living system when it is most alive, most effective, and most constructively capable in economic, ecological, and human term. (Cooperrider & Whitney, n.d.)
The model as depicted in Figure 12.4 is a guide to a group’s change process. The �irst step is discovery. Group members brainstorm to identify the best situation that exists in their organization. This is done through members sharing stories, personal experiences, and recalling other examples and information to form a common picture.
Figure 12.4: Appreciative inquiry model
The second, dream stage, involves members identifying what could be as a future state in their organization, what they would like to see happened. This process empowers and further bonds members together as they share their aspirations about real-time possibilities that a vision could produce. The third stage, design, starts the process of
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Psychologists Eve Ash and Peter Quarry discuss four qualities that leaders should have to successfully plan, implement, and manage change.
Tips for Managing Change
Critical Thinking Questions
1. How do suggestions in this video support or differ from concepts in this chapter? Explain.
2. Consider the suggestions provided in the video. What do you agree with most and why? What do you question? Explain.
articulating an action plan for what should be, based on the previous two stages. This could involve a system that is needed, a new facility, policy and procedures that do not yet exist. Finally, during the fourth stage, the destiny stage, members translate the plan into project activities and steps that can be implemented.
Appreciative inquiry has been used by some of the largest for-pro�it global corporations, such as John Deere, BP, and Ernst & Young, as well as by governments, health organizations, and volunteer and community groups. It is transformative in that it engages organizational members from a positive and forward-looking perspective. At the same time, it is not an easy method to use.
Why Organizational Change Fails
There are numerous studies and many more beliefs about why major organizational change fails. Mindless, misguided change, or change that serves the careers or individual interests of a few, deserves to fail. Other technical and managerial reasons offered for such failure may be corrected with different types of leaders, training, and more expertise. Harvard professor emeritus Michael Beer’s (2003) experience as a gifted professor and wise consultant are worth noting. He argued that top- down change and “total quality management” programs (programs for continuously improving the quality of products and processes) fail to create deep and sustained change in organizations for the following reasons:
1. Failure to institutionalize. These programs become fad driven. There is a gap between top management’s rhetoric about what they want, on the one hand, and, on the other, the reality of implementation among different organizational subunits and the senior team’s capacity to develop commitment to the new change direction and to behave and make decisions consistently with the change direction.
2. Failure to develop cross-functional mechanisms, leadership skills, and team culture needed for the change implementation.
3. Failure to create a climate of open dialogue about the change progress that enables learning and further change.
Lipman (2013) describes �ive key reasons why change fails, based on a study by Towers Watson (2013). As a result, Lipman noticed the following pitfalls:
4. The goals for the change are not realistic. Sometimes, change has good intentions, but goes against the core culture or essence of a business. The change needs to be analyzed to see if it is a good �it for the organization.
5. Executives are not involved enough. Executives need to be fully invested in the change, and show their involvement to the rest of the organization. Employees, senior management, and middle management are more likely to buy-in to the change if they see that the executive is fully committed.
6. Senior management also has to be fully invested and involved. Again, employees and middle management are more likely to buy-in if they see that their superiors are fully supportive of the change.
Managing Change Successfully
© Infobase. All Rights Reserved. Length: 15:22 0:000:00
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7. Middle managers and supervisors need to understand why the change is occurring. Out of all of the managers, this group is more involved with the day-to-day activities of the organization, because they are in direct contact with employees. Therefore, they have more of an understanding of the everyday business operations. In order to buy-in to the change, they need to understand why the change is happening, and how it will impact these regular activities.
8. The organization must be fully dedicated to the change, understanding that it will not happen overnight. If any of the management levels are not fully dedicated to the change, employees will pick up on it, and the change will not be as successful. All parties need to be invested, and willing to put in hard work toward the change for however long it takes. This involves trust, as the organization as a whole must believe and trust that the change is worth it in the long run, which acts as motivation for the journey toward change. See “Take the Lead: Leading and Managing Organizational Change” to apply concepts.
Take the Lead Credits
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Leading During Change
12.3 Leaders as Change Champions: Capacities and Competencies Leaders often see change as a necessary and creative way to strengthen their organizations, while workers often view change as painful and disruptive to their daily schedules. Because of this, one of the most critical aspects of leading people through change is to understand that resistance from employees is natural. One of the main reasons that employees resist change is that it violates the personal compact between workers and their organization (Stebel, 1996). Personal compacts are the mutual obligations and commitments, either written or communicated orally, that de�ine the relationship between employees and organizations. This may include speci�ic job tasks, performance requirements, evaluation procedures, and compensation. When employees feel that proposed organizational changes might affect the personal compact that they have accepted, they are likely to resist. Quast (2012) outlines the top �ive reasons why employees resist change.
1. First, people have a fear of the unknown or they do not like surprises. This can be prevented through communication, transparency, and giving employees enough time to adjust to the idea of change.
2. Second, employees resist change if they do not trust their manager or executives. This can arise if new management or executives come in and announce change without �irst earning the trust of employees. Employees are more likely to trust a manager or executive that they have known for a longer period of time, because trust has been built.
3. Third, employees are worried about their job security and not having control. Whenever a company announces change, employees want to know how it affects them. Employees resist change if they think that they may lose their job or lose their say in the company.
4. Fourth, employees resist change if it involves bad timing. Trying to implement change too quickly or during a peak business time may be met with resistance from employees.
5. Finally, the �ifth reason why employees resist change is that some people naturally have a lower tolerance for change than others. Although some people like change because it brings in new ideas and practices, others prefer sticking to the same routine.
As a result, leaders need to understand why employees may resist change, and what they can do to minimize resistance.
However, resistance is not always a bad thing. Resistance can be used as feedback to boost the effectiveness of change (Ford & Ford, 2009). Many of the employees that resist change are people that are more involved with day-to-day operations. There is a large chance that they are resistant to change because they believe that it will not work with the day-to-day operations. If executives take the time to listen to the concerns of these resistors, they have the opportunity to adjust the planned changes, if needed, in order to prevent issues in day-to-day operations from happening. The executives will also be showing these employees that their opinion is valued, which may increase buy-in.
Leaders can improve the chances of a successful change outcome by following Kotter’s eight-step change theory. Effective leaders also mobilize their followers by engaging them on an emotional level (Fox & Amichai-Hamburger, 2001). In addition, leaders can use the following additional implementation techniques to smooth the change process for their employees.
Communication and Training
Open and honest communication is one of the most effective ways leaders can overcome resistance to change from their employees. Frequent and open communication builds trust and a sense of
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Georgia Kuhn/Cultura Limited/Superstock
Despite differences in leadership models, all methods of organizational change require teamwork, communication, shared vision, and trust.
control between employees and leaders. Leaders who communicate possible organizational changes to the public but neglect to communicate information to the employees most affected by the change are more likely to face heavy resistance, and one of the most common reasons for failures in organizational change is that employees learn of proposed changes from outsiders (Richardson & Denton, 1996). This breaks the compact between employees and the organization.
In addition to communication about the change, employees should receive training to acquire any new skills needed to perform their new roles and responsibilities, so that they are comfortable and ready for their new roles. FedEx successfully reorganized 1,000 clerks into teams of 5 to 10 by providing leadership training so that these teams could manage themselves. Advanced Micro Devices also offers training so that employees can understand the data they can access through the intranet, which enables them to interpret how
their work impacts product development and yields.
Participation and Involvement
When leaders seek opinions from their employees in designing change, employees are given a sense of control over the occurring changes. This helps them understand the reasons for change and its necessity. Participatory approaches result in a smoother implementation process when a company introduces change (Mirvis, Sales, & Hackett, 1991). This is in large part why executive teams are so important to CEOs. When higher level executives can offer advice and directly affect the company’s direction, they invest in the changes and become key players in execution. Higher level executives, particularly CEOs who wish to assume roles as steward (if not servant) leaders, would also, as noted earlier, hold meetings themselves with different teams and organizational levels to hear employee concerns, suggestions, and ideas about the design and impact of organizational changes on them and on the entire organization.
Coercion
As an absolute last resort, leaders have the option of overcoming resistance by threatening the loss of jobs. Although a drastic option, it may be necessary in crisis situations when a rapid response is needed. While Elon Musk is admired as a strategic leader, he is also known for using coercive power (Wartzman, 2015). Tesla employees reported that they were warned not to walk past his desk because he was so prone to �iring sprees (Hamilton, 2018). This option is often left for last as it has the potential to deeply affect employee morale and can lead to greater resistance.
Identifying areas of resistance and responding appropriately to gain support are key duties for change leaders. Heifetz and Linsky (1994) described change leadership as “getting on the balcony” to understand what was happening at the moment and then to look out at the horizon. Their primary concern was adaptive change, which has the potential to destabilize an organization and its employees.
Monitoring and Rewarding
The leader, in addition to thinking strategically and operationally, must address the psychological component of change by keeping day-to-day business operations going. Although the organization might be changing, employees continue to work, report to managers, and follow certain processes. While encouraging followers to settle into new routines, the leader also elicits feedback in order to understand what is working and what can be improved. The view from the balcony only provides a top-down perspective of organizational change; it is important to know what is happening on the ground.
Kanter (2002) argued that an organization faces its greatest challenges once change is already underway. Her concern was that task forces often begin the process of organizational change then lose momentum, or hope that followers will
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�igure out the rest for themselves.
Kanter’s method of managing organizational change involves external monitoring through listening to clients, to hear whether and how they have been affected by the change. Has business suffered? Or have client’s experiences improved? If so, how? Kanter (2002) also encouraged interdisciplinary projects, with employees rotating positions to gain new perspectives. Like Kotter, she believes in creating and sharing a vision, although she speci�ies that this vision should be inspirational, and she encourages coalition building so that organizations have a speci�ic team devoted to change. She recommends expanding this coalition to include implementers. While change leaders can bring resources, implementers focus on the day-to-day management of change. This team sticks with the transformation and ensures that it happens. Finally, Kanter (2002) notes that recognizing and rewarding achievements from the process is important. This provides closure to one organizational overhaul while building energy for the next initiative.
Although most of these examples of change leadership have focused on how leaders can engage followers, Senge et al. (1999) challenged these approaches. Instead of a top-down approach, these researchers posited that successful change comes from within an organization and claimed that executives had less power to implement change than believed. Try Assessment 12.1 to see if you’re a change leader.
According to Senge et al., the myth of the “hero leader” creates a vicious cycle in which organizations face a crisis, look for a CEO to save the company, undergo aggressive short-term changes, and then face a new crisis. The top-down approach leads to lack of commitment from employees, lack of long-term organizational learning and growth, and little actual change. Rather than focusing on top-down leadership, they recommended developing leadership capacity across the organization and identify three types of leaders: local line leaders, executive leaders, and network leaders.
Local line leaders (Cameron & Green, 2004) design products and services. As managers, they focus on small teams and clients. Executive leaders are on the management board. They can foster a culture of innovation and set up systems of reward. However, in this model, real change begins at lower levels. Network leaders connect groups led by local line leaders and serve as guides and partners. The three types of leaders are interconnected, with executive leaders providing the infrastructure for line leaders who collaborate via network leaders. For effective change to occur, these three types of leaders must communicate.
Assessment 12.1: Are You a Change Leader?
Instructions
Think speci�ically of your current or a recent full-time job. Please respond to the following 10 items according to your perspective and behaviors in that job. Indicate whether each item is mostly false or mostly true for you.
Mostly False
Mostly True
1. I often try to adopt improved procedures for doing my job. _______ _______
2. I often try to change how my job is executed in order to be more effective. _______ _______
3. I often try to bring about improved procedures for the work unit or department.
_______ _______
4. I often try to institute new work methods that are more effective for the company.
_______ _______
5. I often try to change organizational rules or policies that are nonproductive or counterproductive.
_______ _______
6. I often make constructive suggestions for improving how things operate within the organization.
_______ _______
7. I often try to correct a faulty procedure or practice. _______ _____
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8. I often try to eliminate redundant or unnecessary procedures. _______ ______
Scoring
Please add the number of items for which you marked Mostly True, which is your score: _____. This assessment measures the extent to which individuals take charge of change in the workplace. A score of 7 or above indicates a strong take-charge attitude toward change. A score of 3 or below indicates an attitude of letting someone else worry about change.
Before change leaders can champion large planned change projects, they often begin by taking charge of change in their workplace area of responsibility. To what extent do you take charge of change in your work or personal life? Do you see yourself being a change leader? What factors and forces prevent you from taking charge, or help and support you to take charge?
Source: Taking Charge At Work: Extrarole Efforts to Initiate Workplace Change by E. W. Morrison & C. C. Phelps. Academy of Management Journal, vol. 42 no. 4, pp. 403-419. Copyright (c) 1999 by Academy of Management. Reproduced with permission of the Academy of Management.
Despite differences across these leadership models, all methods of organizational change require teamwork, communication, shared vision, and trust. Whether leaders directly effect change in the organization or not, they serve as visible models of new organizational norms and set examples for appropriate interactions and company culture.
Another strategy to help worthwhile change succeed is developing leadership capacity in followers who can support top-level leaders in moving change initiatives forward through empowerment and feedback.
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Summary & Resources
Chapter Summary Organizational change is any activity that requires employees to alter their conventional work habits (Mourier & Smith, 2001). Large-scale changes include corporate acquisitions, downsizing, expansion, new strategies, and new infrastructure. These changes are intentional and affect the way that business is conducted, thereby affecting individual jobs. Top-level leaders are responsible for guiding and directing transformational changes that involve the entire organization.
Leaders who are committed to successful change need to be courageous, believe in their employees, be able to articulate values that encourage adaptability, be able to manage complexity and uncertainty, have a shareable vision, and learn from the past. A �irst step in any change process is to identify why a change is needed, where it should begin, and whom it would affect and why. Generally, a change involves getting from “here” to “there.” Identifying an “as is” state (where we are) compared with a “to be” state (where we need and want to be). The change process can begin by addressing the questions: “What business are we in now?” and “Where do we wish, or need to be next year or at a particular future time?” “Who is our customer? What are our core competencies? What is our main product and service? Who and what will or should they be next year or at a particular future time?”
Three change models help leaders and managers plan a change: Dunphy and Stace’s model, Kotter’s eight steps, and the appreciative inquiry model. How can concepts, models, and ideas in this chapter help you be part of solutions to change and not resisters? Leaders as change champions need capacities and competencies to vision, plan, and guide the implementation of transformational changes. These capacities and competencies actually involve skills and concepts covered throughout this text. In particular, leaders—and you—can learn the skills of listening, mobilizing, executing, and supporting the processes, systems, and people in the organization, who in turn are needed to drive the changes—and be active in sustaining the new vision.
Web Resources Assessing your attitudes toward risk
http://www.humanmetrics.com/risk-taking (http://www.humanmetrics.com/risk-taking)
Take HUMANMETRICS’ Risk Attitudes Pro�iler™ to get a sense of your risk-taking attitudes. Add this result to your other assessments in this text to discern any patterns in your overall evolving leadership style.
Critical Thinking Questions 1. Explain why change experts say that over 60% of planned organizational changes fail. 2. What is needed to help organizations succeed in large planned changes? 3. What is the most important dimension of the 7-S change alignment model and why is it important? 4. What are some of the most signi�icant differences between Kotter’s and Cooperrider’s appreciative inquiry
models of change? Explain. 5. Which of the two models, Kotter’s or Cooperrider’s, would you feel most and least comfortable leading?
Explain. 6. What type(s) of leadership skills and capacities are required to lead complex organizational changes? 7. Argue the pros and cons of the importance of coercion as a change leader’s style. 8. Are you ready to participate in helping plan and implement an organizational change in an organization? Brie�ly
explain a process you would use from the �irst steps to completion. What questions would you ask? What types of tools, concepts, and understanding based on this chapter would be helpful for you in this role.
Key Terms
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appreciative inquiry (AI) Change approach that focuses on creating opportunities rather than solving problems and identifying what is working well and what others believe can work better. Opportunities can materialize when people in the organization focus their attention and energy.
Dunphy and Stace’s change model De�ines four types and characteristics of organizational change as either �ine-tuning, incremental adjustment, modular, or transformational.
�ine-tuning This type of change involves an ongoing process of matching and �itting an organization’s strategy, structure, people, and processes with the environment.
incremental adjustments Predictable changes that evolve slowly and systematically at a constant rate over time within the organization to �it the external environment.
Kotter’s change model Eight-step sequential, top-down planned organizational model that addresses transformational changes.
modular Transformation organizational change is radical in this type of change, but it is focused on subparts rather than the entire organization.
organizational alignment A type of culture that is open to and embraces external change and is characterized by �lexibility.
organizational change Any activity that requires employees to work differently.
personal compact The mutual obligation and commitment, either written or orally communicated, that de�ines the relationship between employees and the organization.
planned organizational change A process that moves companies from a present state to a desired future state with the goal of enhancing their effectiveness; ultimately, the goal of planned organizational change is to improve an organization’s capabilities.
transformational change Involves the emergence of a new, unknown state for the organization.
