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Essentials of Organizational Behavior

Fourteenth Edition

Chapter 12

Leadership

After studying this chapter you should be able to:

Summarize the conclusions of trait theories of leadership.

Identify the central tenets and main limitations of behavioral theories.

Contrast contingency theories of leadership.

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

Discuss the roles of leaders in creating ethical organizations.

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

Identify the challenges to our understanding of leadership.

What Is Leadership?

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

Leadership emergence

Leadership 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.

Trait Theories of Leadership

Two conclusions:

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 him a leader does not necessarily mean he 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

Agreeableness and emotional stability are not correlated with leadership

Dark Side Traits

Normative scores on Machiavellianism, narcissism, and psychopathy are optimal

Emotional intelligence

EI contributes to emergence of leaders

Some essential leadership traits include extraversion, conscientiousness, openness, and agreeableness. Research shows that the Dark Side personality traits of Machiavellianism, narcissism, and psychopathy are not all bad for leadership. Higher scores on Dark Side traits and emotional stability can contribute to the emergence of leadership. 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

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

The Ohio State Studies

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

Ohio State Studies

Attempts to organize work, work relationships, and goals

Concern for followers’ comfort, well-being, status, and satisfaction

A key study in the area of behavioral leadership advanced our understanding of the theory. The research was done at the Ohio State University. Researchers looked at important dimensions of leadership behavior and began with over 1,000 dimensions. In the end, the Ohio State studies were able to narrow it down to two dimensions – initiating structure and consideration.

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.

Initiating Structure

Consideration

Cultural Differences

GLOBE Leadership Project Results:

Brazil – Leaders are participative and humane

France – Leaders are bureaucratic, task oriented, and autocratic

China – Initiating structure and consideration important: status differences but participation valued

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

Contingency Theories

Fiedler leadership model: Effective group performance depends on the proper match between the leader’s style and the degree to which the situation gives the leader control

In this theory, Fielder 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.

Fiedler Leadership Model

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

Relationship oriented

Task oriented

Match leader’s style with degree of situational control

Leader-member relations

Task structure

Position power

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.

Matching Leaders to Situations

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 Fielder proposes that they perform best in moderately favorable situations.

Situational Leadership Theory

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

Unable and unwilling

Unable but willing

Able but unwilling

Able and willing

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

Path–Goal Theory

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

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

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

Leader-Member Exchange

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

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.

LMX Theory

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.

Charismatic Leadership

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

Vision and articulation

Personal risk taking

Sensitivity toward followers

Unconventional 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.

Charismatic Leaders: Born or Made?

Charisma is partially attributed to genetics and partially to training and experience

Developing an aura of charisma:

Be optimistic

Be passionately enthusiastic

Communicate with body, not just words

Draw others in – inspire others

Tap into emotions – bring out the potential in others

The charismatic traits are often traits that a leader is born with, thus continuing the debate on whether leaders are born or developed.

In reality it is a mix of genetics, training, and experience. Charisma can be created. One way is to develop an aura of charisma by being optimistic, passionately enthusiastic, and to communicating with behaviors and words. A leader can also create charisma by drawing in others through inspiration, as well as by tapping into the emotions of individuals to bring out their potential.

How Charismatic Leaders Influence Followers

Articulate an appealing vision

Communicate a new set of values

Model behaviors for those values

Express dramatic behavior

Evidence shows a four-step process can help the charismatic leader utilize their characteristics to influence their followers. First, the leader articulates a long-term strategy for achieving a goal. This strategy should fit the vision and uniqueness of the organization. Next, the leader needs to formalize that vision by creating a vision statement. Charismatic leaders will often use this statement to reinforce the goal and purpose of the organization. This vision is communicated in a way that expresses the leader’s excitement and commitment to the goal.

Next, the leader will use his words and actions to communicate a new set of values for the followers to imitate. Then the charismatic leader will try to find behaviors that demonstrate their commitment to the vision. They will choose behaviors that will help followers “catch” the emotions the leader is conveying and help achieve buy-in from the followers.

Finally, the charismatic leader engages in emotion-inducing and often unconventional behavior to demonstrate courage and conviction about the vision, in order to, help followers “catch” the vision.

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

People are most receptive to charisma when there is a crisis

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, stressful, and where there is some ideology involved.

It is more closely associated with upper-level executives and 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

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

This exhibit shows characteristics of transactional and transformational leaders.

Full Range of Leadership Model

This exhibit shows the full range of the leadership model. The first three behaviors represent transactional approaches and begins with the Laissez-faire approach, which is the most passive. As a leader progresses on the scale, she moves 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.

How Transformational Leadership Works

Organizations with transformational leaders have

Greater decentralization of responsibility

Managers willing to take risks

Compensation geared toward long-term results

In organizations with transformational leaders, there is typically greater decentralization of responsibility, managers have a higher propensity to take risks, and compensation plans are geared toward long-term results. These organizations often have greater agreement among top managers about the organization’s direction.

Evaluation of Transformational Leadership

Transformational leadership:

Is effectively used in various job levels and disparate occupations

Tends to be more effective in smaller companies

Works better when the leader directly interacts with followers

Can be learned

Transformational leadership works in a variety of contexts but tends to be more effective in smaller companies. It does work better when the leader is more closely connected to the followers and can understand their situation. The link between transformational leadership and positive job outcomes is solid.

Transformational versus Transactional Leadership

Transformational leadership is more strongly correlated with:

Lower turnover

Higher productivity

Lower employee stress and burnout

Higher employee satisfaction

Research shows that transformational leadership results in many desirable outcomes. However, contingent reward leadership sometimes works as well as transformational leadership.

There are a lot of commonalities between transformational leadership and charismatic leadership, but in general, charismatic leadership focuses on how leaders communicate, while transformational leadership focuses on what is communicated.

Authentic Leadership: Ethics and Trust

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

Create trust

Encourage open communication

People have faith in them

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.

Next, authentic leaders are able to create trust with their followers and encourage a culture of open communication. These factors will help to create an authentic leader that people will follow.

Ethical Leadership

Ethics and leadership intersect at many junctures

Executives set the moral tone for an organization, so they must set and adhere to high ethical values

Leadership is not value free, and the means by which a leader achieves their goal must be framed by ethics

Socialized charismatic leadership: leadership that conveys other-centered values by leaders who model ethical conduct

There is a strong intersection of ethics and leadership. Over the past several years we have been involved in what many have called an ethical crisis in the business community. When we look at leadership, we need to look at more than the results of the leader. We must also look at the steps the leader took to achieve those results.

Servant Leadership

Servant Leaders: Go beyond their own self-interest and focus on opportunities to help followers grow and develop

Effects of servant leadership:

Higher levels of commitment to the supervisor, self-efficacy, and perceptions of justice

Increased team potency and higher group performance

Higher levels of creative performance

Servant leadership may be more effective in certain cultures

Servant leaders focus on opportunities to help followers grow and develop. The effects of servant leadership include higher levels of commitment to the supervisor, self-efficacy, and perceptions of justice, all of which are related to organizational citizenship behavior. Servant leaders increase team potency, which leads to higher levels of group performance and also a greater focus on growth and advancement, which leads to higher levels of creative performance.

This type of leadership may be more prevalent in East Asian cultures.

Trust

Trust 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 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

Taking Risks

Information Sharing

Effective Groups

Enhanced Productivity

Developing Trust

Research shows that three key characteristics – integrity, benevolence, and ability – lead us to believe a leader is trustworthy.

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.

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.

Leadership as an Attribution

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.

Substitutes and Neutralizers

Substitutes

Replace the need for a leader’s support or ability to create structure

Neutralizers

Organizational variables can neutralize the leader’s influence or act as substitutes for leadership

Leader becomes irrelevant

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.

Substitutes for and Neutralizers of Leadership

Neutralizers make it impossible for leader behavior to make any difference to follower outcomes.

Online Leadership

Identification-based trust: trust based on a mutual understanding of each other’s intentions and appreciation of each other’s wants and desires

Today, managers and employees are increasingly linked by networks rather than geographic proximity. For these managers, developing and maintaining trust is especially challenging.

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.