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Essentials of Organizational Behavior

Fifteenth Edition

Chapter 12

Leadership

Learning Objectives

12.1 Summarize the conclusions of trait theories of leadership.

12.2 Identify the central tenets and main limitations of behavioral theories.

12.3 Contrast contingency theories of leadership.

12.4 Describe the contemporary theories of leadership and their relationship to foundational theories.

12.5 Discuss the roles of leaders in creating ethical organizations.

12.6 Describe how leaders can have a positive impact on their organizations through building trust and mentoring.

12.7 Identify the challenges to our understanding of leadership.

What Is Leadership? (Learning Objective 12.1)

Leadership: the ability to influence a group toward the achievement of a vision or a set of goals

Trait theories of leadership: focus on personal qualities and characteristics

Predict leadership emergence and effectiveness

Leadership is the ability to influence a group toward the achievement of goals.

The trait theories of leadership focus on personal qualities like those in the Big Five and characteristics that predict two distinct outcomes: leadership emergence and leadership effectiveness. Traits can predict leadership. Traits do a better job predicting the emergence of leaders and the appearance of leadership than distinguishing between effective and ineffective leaders. The fact that an individual exhibits the right traits and that others consider the individual a leader does not necessarily mean that person will be an effective leader who is successful at getting the group to achieve its goals.

Personality Traits and Leadership

Big Five Traits

Extraversion has strongest relation to leadership

Conscientiousness and openness to experience also strongly relate to leadership

Dark Triad Traits

Normative scores are optimal

Emotional intelligence (EI) and leadership

EI contributes to emergence of leaders

Some essential leadership traits include extraversion, conscientiousness, openness, and agreeableness. Research shows that the Dark Triad personality traits are not all bad for leadership. Normative scores on Dark-Triad traits are optimal. Finally, emotional intelligence or EI has been linked with leadership effectiveness, especially with regard to empathy, a core component of EI. Leaders with empathy are able to sense others’ needs, listen to their followers, and read the reactions of others.

Behavioral Theories (Learning Objective 12.2)

Behavioral theories of leadership: we can determine leadership effectiveness by leader behavior, and perhaps train people to be leaders

The Ohio State Studies

Initiating structure

Consideration

Cultural differences

The behavioral theories of leadership focus on the premise that behaviors can be taught and traits cannot, so leaders can be trained.

According to the Ohio State studies, initiating structure is when the leader is able to define and structure their role and that of their employees to work toward the goals of the organization. Consideration is the ability of the leader to gain the trust and respect of their followers and to help them feel appreciated for what they do. Both behaviors have proven to be very important in an effective leader.

The GLOBE study suggests that there are differences across cultures in the preference for initiating structure and consideration.

Contingency Theories (Learning Objective 12.3)

Effectiveness is dependent upon situational demands

Fiedler leadership model: effective group performance depends on the proper match between the leader’s style and the situation

Least-Preferred Co-worker (LPC) determines leadership style (fixed trait)

Relationship oriented

Task oriented

Being an effective leader can be highly contingent upon situation demands.

Fred Fiedler developed the first comprehensive contingency model of leadership. In this theory, Fiedler is trying to match the leader to the context. He proposes that leadership style is fixed. So, if the situation demands a charismatic leader and your current leader does not exhibit that style, you need to change leaders.

Leadership style can be determined by taking the LPC questionnaire (least preferred co-worker).

After the leadership style is determined you can match the leader to the situation. There are three dimensions to finding a successful match. The first situational factor is the leader-member relationship; this ties back to our behavioral studies by looking at the degree of trust and respect employees have for the leader. The second factor is the amount of structure that is embedded in job assignments. The last factor is the amount of influence the leader has over decisions that represent power such as hiring, firing, and rewards.

In Fiedler’s model, you need to find a leader to fit the situation or change the situation to fit the leader in order to achieve effective leadership for the organization.

Findings from the Fiedler Model (Exhibit 12-1)

This graph helps to visually determine the situational factors and what type of leader would succeed in this situation. There are eight possible situations in which leaders can find themselves. By matching their LPC score with these eight different situations a leader can see where they will be most effective. For example, categories four through six would be better suited to relationship-oriented leaders because Fiedler proposes that they perform best in moderately favorable situations.

Long Description:

A relationship-oriented leader has a constant poor performance during a highly favorable situation; displays a gradual increase followed by gradual decrease in performance, represented by a bell curve. During a moderately favorable situation, and a constant poor performance during a highly unfavorable situation.

A task-oriented leader has a constant good performance during a highly favorable situation; displays a steep decrease as he nears a moderately favorable situation and shows constant low performance through this situation, followed by a steep increase in performance during a highly unfavorable situation.

The data on the contingency dimensions for eight categories falling under the three situations are detailed below:

When the situation is highly favorable:

Leader-member relations are good in categories 1, 2, and 3.

Task structure is high in category 1 and low in categories 2 and 3.

Position power is weak in category 2 and strong in categories 1 and 3.

When the situation is moderate:

Leader-member relations are good in category 4 and poor in categories 5 and 6.

Task structure is low in category 4 and high in categories 5 and 6.

Position power is strong in category 5 and weak in categories 4 and 6.

When the situation is unfavorable:

Leader-member relations are poor in categories 7 and 8.

Task structure is low in categories 7 and 8.

Position power is strong in category 7 and weak in category 8.

Situational Leadership Theory and Path-Goal Theory

Situational leadership theory (SLT): successful leadership depends on selecting the right leadership style, contingent on the followers’ readiness to accomplish a task

Path–goal theory: it’s the leader’s job to provide followers with information, support, or other resources necessary to achieve goals

SLT acknowledges the importance of followers and builds on the logic that leaders can compensate for their limited ability and motivation.

According to path-goal theory, it’s the leader’s job to provide followers with information, support, or other resources necessary to achieve goals. Directive leadership yields greater satisfaction when tasks are ambiguous or stressful. Supportive leadership results in high performance and satisfaction when tasks are structured. Directive leadership is perceived as redundant by employees with high ability or experience.

Effective leaders clarify followers’ paths to their work goals and make the journey easier by reducing roadblocks. Directive or supportive leadership does matter to followers’ performance, and leaders need to be aware of their important facilitating role.

The effectiveness of leaders depends to a large degree on their followers.

Leader-Participation Model and LMX Theory

Leader-participation model: provides a set of rules to determine the form and amount of participative decision making in different situations

Leader-member exchange (LMX) theory: supports leaders’ creation of ingroups and outgroups

Subordinates with ingroup status will likely have higher performance ratings, less turnover, and greater job satisfaction

The way the leader makes decisions is as important as what he or she decides. Leader behavior must adjust to reflect the task structure.

The leader-participation model provides a set of rules to determine the form and amount of participative decision making in different situations.

LMX argues that leaders, because of time pressures, tend to establish special relationships with a small group of followers who then become their ingroup. In this capacity, they enjoy a disproportionate share of the leader’s attention, greater trust, and special privileges.

Similarity with and Interactions Between the Leaders, Ingroup, and Outgroup (Exhibit 12-2)

Research shows that ingroup members have demographic, attitude, and personality characteristics similar to those of their leaders or a higher level of competence than outgroup members.

Long Description:

The details are as follows:

The leader has the following interactions with his subordinates in the ingroup:

Subordinate A: Follower competence

Subordinate B: Positive attitude

Subordinate C: Conscientiousness.

All these interactions are represented via separate dashed unidirectional arrows.

The leader has formal relation with subordinate E in the outgroup and subordinates’ D and F have formal relations between them. All these interactions are represented via solid lines.

The leader is interconnected to a text box that reads: Perceived similarity, liking, trust, and or self-promotion and ingratiation. An interconnection between the above text box and subordinate B is also shown in the diagram.

Charismatic Leadership (Learning Objective 12.4)

Charismatic leadership theory: attributions of heroic leadership abilities when followers observe certain behaviors

Vision and articulation

Personal risk taking

Sensitivity toward followers

Unconventional behaviors

Charismatic leadership and transformational leadership are two contemporary leadership theories that share the view that leaders inspire followers through words, ideas and behaviors.

Charisma comes from the Greek word meaning “gift.” When talking about a charismatic leader, one refers to someone with certain gifts or abilities. A charismatic leader will often gain followers through personality rather than through power or authority.

There are four key characteristics that are associated with a charismatic leader. The leader must have vision, expressed as an idealized goal. The leader must be willing to take on high personal risk and engage in self-sacrifice to achieve the vision. In doing so, the leader needs to remain sensitive to the feelings and needs of their followers. Throughout the process, the leader may be engaging in behaviors that are perceived as counter to norms, thereby extraordinary.

Charisma and Situational Dependency

Charisma is strongly correlated to high performance and satisfaction

Best used when

Environment is uncertain or stressful

Ideology is involved

Most closely associated with upper-level executives

Charismatic leaders have been shown to be effective but it often depends on the context. This leadership style works best in an environment where it is uncertain and stressful. People are most receptive to charismatic actions when there is a crisis.

The Dark Side of Charismatic Leadership

Some leaders:

Use organizational resources for personal benefit

Remake companies in their own image

Allow self-interest and personal goals to override organization’s goals

There is a dark side to charismatic leadership if the leader misuses their skill set. In the past we have seen situations where leaders have abused company resources and used them for their own benefit. Some leaders with strong charisma have remade companies in their own image and left no plans for succession when they leave.

In many cases, the charismatic leader lets their own goals override those of the organization, thus creating a negative situation for the organization.

Transactional and Transformational Leadership

Transactional leaders: motivate their followers in the direction of established goals by clarifying role and task requirements, allocating rewards and punishment and intervening when necessary

Transformational leaders: inspire followers to transcend their own self-interests for the good of the organization

Transactional leaders motivate their follower towards the goals set by clarifying their roles in the process and what they need to do to reach the goals set.

Transformational leaders help followers to look at the bigger picture and commit to the good of the organization, even if it means setting their own goals aside.

These two approaches are not contradictory in nature; in fact they can complement each other. Transformational leadership often is built upon transactional leadership. Good leadership will incorporate both transactional and transformational components.

Characteristics of Transactional and Transformational Leaders (Exhibit 12-4)

This exhibit shows characteristics of transactional and transformational leaders.

Long Description:

Characteristics of a transactional leader:

Contingent reward: Contracts exchange of rewards for effort, promises rewards for good performance, recognizes accomplishments.

Management by exception (active): Watches and searches for deviations from rules and standards, takes corrective action.

Management by exception (passive): Intervenes only if standards are not met.

Laissez-Faire: Abdicates responsibilities, avoids making decisions.

Characteristics of a transformational leader:

Idealized influence: Provides vision and sense of mission, instills pride, gains respect and trust.

Inspirational motivation: Communicates high expectations, uses symbols to focus efforts, expresses important purposes in simple ways.

Intellectual stimulation: Promotes intelligence, rationality, and careful problem solving.

Individualized consideration: Gives personal attention, treats each employee individually, coaches, advises.

Full Range of Leadership Model (Exhibit 12-5)

This exhibit shows the full range of leadership model. The first three behaviors represent transactional approaches and begin with laissez-faire, which is the most passive. As a leader progresses on the scale, the move is toward more active behaviors. The final four behaviors on the model represent transformational actions. This model shows that as leaders utilize more transformational behaviors, they become more effective.

Long Description:

The vertical axis represents a scale that ranges from ineffective to effective and the horizontal axis represents a scale that ranges from passive to active.

Among the transactional leadership models, the graph shows laissez-faire as the most passive and ineffective style, followed by the management by exception. Contingent reward is at a midpoint between active/passive and ineffective/effective.

Among the transformational leadership models, the graph shows all as more active and effective than the transactional models. In order of increasingly active and effective, the transformational models are individualized consideration, intellectual stimulation, inspirational motivation, and idealized influence.

How Transformational Leadership Works

Reasons why transformational leadership is effective

Affect or attitudinal mechanism

Motivational mechanism

Identification mechanism

Social exchange mechanism

Justice enhancement mechanism

Transformational leadership is effective for five reasons.

Transformational approaches promoted positive employee moods, emotions, job satisfaction, organizational commitment, and feelings of well-being. They motivate employees. They lead employees to personally identify with the leader and the leader’s values and followers. And transformational approaches improve employee fairness perceptions, motivating followers to contribute more and yet trust the leader, team, and organization more.

Responsible Leadership (Learning Objective 12.5)

Authentic leaders know who they are, what they believe in and value, and act on those values and beliefs openly and candidly

Important for explaining team performance

Increases followers’ trust

Sets an example

Authentic leaders know who they are, what they believe in and value, and act on those values and beliefs openly and candidly.

Authentic leadership is a growing area of research. There are several components that need to be addressed when discussing authenticity in leadership. First, we must look at authentic leaders. These are leaders who engage in reflection and understand who they are and what they believe and bring those two aspects together in their actions.

Authentic leadership strongly predicts outcomes such as group performance, OCBs, LMX, satisfaction and trust in the leader, rating of leader effectiveness, follower attitudes and empowerment, and, to a lesser degree, follower creativity, engagement, deviance, turnover intentions, and burnout. Furthermore, research suggests that leaders who “practice what they preach” observe improved follower outcomes because their followers begin to trust them and become more committed to the organization. Authentic leaders can inspire their employees to be better.

Servant Leadership

Servant Leaders: go beyond their own self-interest and focus on opportunities to help followers grow and develop (serving others)

Characteristics: listening, empathizing, persuading, accepting stewardship, and actively developing followers’ potential.

Servant leaders focus on opportunities to help followers grow and develop.

Characteristic behaviors include listening, empathizing, persuading, accepting stewardship, and actively developing followers’ potential.

This is related to followers’ job attitudes, trust in leadership, and LMX perceptions.

Positive Leadership (Learning Objective 12.6)

Trust

A psychological state of mutual positive expectation between people

Can be focused on competence or integrity

Trust is a psychological state of mutual positive expectation between people. That is, it is defined as a state that exists when you agree to make yourself vulnerable to another because you have a positive expectation for how things are going to turn out. Over the years, this has been found to be a foundational characteristic of leadership. When trust is present, followers are willing to do as the leader asks and engage in behaviors that are for the benefit of the organization. In short, followers will do a lot more for a leader they trust than for one they don’t trust.

Trust can be focused on competence or integrity.

Model of Trust in Organizations (Exhibit 12-6)

Trust is developed over time. The interactions between leaders and followers are part of the development of trust; it goes both ways. Research has shown that the three main characteristics of a leader that instills trust are integrity, ability, and benevolence.

These three characteristics are important in developing trust between leaders and followers. If followers perceive these characteristics as strong in their leaders, it will encourage positive behaviors such as risk taking, information sharing, group interactions, and productivity.

Trust propensity refers to how likely a particular employee is to trust a leader. Keep in mind though that trust in an employment relationship can be built on very different perceptions from culture to culture.

Time is also important to trust – we come to trust people by observing their behavior over a period of time. It’s important for leaders to demonstrate integrity, benevolence, and ability in situations where trust is important. Demonstrating competence is also important. Finally, using an on-going dialogue rather than top-down communications is important to the development of trust.

If you’ve lost trust, you can sometimes regain it. Apologize if the cause was lack of ability. Regaining trust is much harder, though, if the cause was lack of integrity or deception. Trust can be restored when we observe a consistent pattern of trustworthy behavior by the transgressor.

Long Description:

Leader trust worthiness and propensity lead to trust development. This in turn leads to various outcomes:

Risk taking

Information sharing

Group effectiveness

Productivity.

Under leader trust worthiness are characteristics of integrity, benevolence, and ability.

Mentoring

Mentor: a senior employee who sponsors and supports a less-experienced employee, a protégé

Mentoring programs benefit both mentors and protégés

Benefits of mentoring are primarily psychological

Successful mentors are good teachers. They present ideas clearly, listen well, and empathize with protégés’ problems. Mentoring relationships, whether formal or informal, serve career functions and psychosocial functions.

Research suggests the gains of mentoring are primarily psychological.

Leading in Times of Crisis

Leaders emerge in times of crisis

Analyzing the situation

Charismatic leadership can be visionary or crisis-responsive

During times of crisis, leaders will emerge to bring order and understanding to the chaos. That is, leaders emerge during times of crisis.

Analyzing the situation appears to be particularly important, and research demonstrates that leaders managing crisis teams move quickly toward a shared mental model.

Of all the leadership styles during times of crisis, charismatic leadership has been studied the most frequently. During times of crisis, charismatic leadership can be visionary or crisis-responsive. The effects of charismatic and transformational leadership can even reverberate after the crisis is over.

Challenges to our Understanding of Leadership (Learning Objective 12.7)

Attribution Theory of Leadership

Performance outcomes are attributed to leaders’ actions

Appearance has more to do with leadership than actual accomplishments

There are many challenges to understanding leadership. The attribution theory states that it is hard to attribute outcomes to leadership and that often leadership is more about performance than outcomes.

Perceptions of leaders by their followers strongly affect leaders’ ability to be effective.

Attribution theory suggests what is important is projecting the appearance of being a leader rather than focusing on actual accomplishments.

Neutralizers of and Substitutes for Leadership (Exhibit 12-7)

Substitutes replace the need for a leader’s support or ability to create structure.

In addition, you can have an extremely effective leader, but organizational variables can neutralize the leader’s ability to lead and create change, thus rendering the leader irrelevant. That is, neutralizers make it impossible for leader behavior to make any difference to follower outcomes.

Long Description:

The details are as below:

Individual:

Experience or training: Relationship oriented, no effect on; Task oriented, substitutes for.

Professionalism: Relationship oriented, substitutes for; Task oriented, substitutes for.

Indifference to rewards: Relationship oriented, neutralizes; Task oriented, neutralizes.

Job:

Highly structured task: Relationship oriented, no effect on; Task oriented, substitutes for.

Provides its own feedback: Relationship oriented, no effect on; Task oriented, substitutes for.

Intrinsically satisfying: Relationship oriented, substitutes for; Task oriented, no effect on.

Organization:

Explicit formalized goals: Relationship oriented, no effect on; Task oriented, substitutes for.

Rigid rules and procedures: Relationship oriented, no effect on; Task oriented, substitutes for.

Cohesive work groups: Relationship oriented, substitutes for; Task oriented, substitutes for.

Implications for Managers

Ensure that your preferences on the initiating structure and consideration dimensions match work dynamics and culture.

Hire candidates who exhibit transformational leadership qualities and who have demonstrated success in working through others to meet a long-term vision.

Hire candidates who are ethical and trustworthy; train managers in ethical standards.

Seek to develop trusting relationships with followers.

Consider investing in leadership training.

Leadership is a complex function in an organization but essential for success. Individuals, groups, and organizations all need leaders and there are many factors that define a successful leader. Each organization must assess what they need in their leader in order to be effective.

Discussion Questions

Charismatic leadership has a dark side. What can organizations do to minimize this?

Discuss the importance of organizations’ leadership rebuilding trust. Why is it so difficult to rebuild trust once broken? How does it negatively impact the organization? Are their implications for recruiting?

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