Leadership-401 CASE-3 for Paula Hog

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390 PART 4  MANAGING AND LEADING FOR HIGH PERFORMANCE

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MODERN THEORETICAL PROCESSES OF LEADERSHIP

Despite a relative degree of acceptance of the traditional theories of leadership and the con- siderable (at least relative to other areas in organizational behavior) amount of research that has been conducted, few would disagree today that leadership still needs much more theory building and research. For example, a comprehensive review of the traditional theories concluded that many of the tests conducted to identify moderating effects were judged to be inappropriate and that most of the results reported in this domain have not been repli- cated.75 There is a need to go beyond the traditional approaches with alternative theories, research methods, and applications for leadership studies.

Besides the established trait, group and exchange, contingency, and path-goal theories of leadership, a number of other widely recognized theories have emerged in recent years. These include the charismatic, transformational, substitutes, and authentic theories of lead- ership. An overview of each of these provides better understanding of the complex leader- ship process.

Charismatic Leadership Theories

Charismatic leadership is a throwback to the old conception of leaders as being those who “by the force of their personal abilities are capable of having profound and extraordi- nary effects on followers.”76 Although the charismatic concept, or charisma, goes as far back as the ancient Greeks and is cited in the Bible, its modern development is often attributed to the work of Robert House.77 On the basis of the analysis of political and reli- gious leaders, House suggests that charismatic leaders are characterized by self-confidence and confidence in their associates, high expectations for associates, ideological vision, and the use of personal example. Followers of charismatic leaders identify with the leader and the mission of the leader, exhibit extreme loyalty to and confidence in the leader, emulate the leader’s values and behavior, and derive self-esteem from their relationship with the leader.78 Bass has extended the profile of charismatic leaders to include superior debating and persuasive skills as well as technical expertise and the fostering of attitudinal, behav- ioral, and emotional changes in their followers.79 A Fortune article humorously describes a manager with charisma as follows:

He attended some middling college. Doesn’t have an MBA. But he has an aura. He per- suades people—subordinates, peers, customers, even the S.O.B. you both work for—to do things they’d rather not. People charge over the hill for him. Run through fire. Walk barefoot on broken glass. He doesn’t demand attention, he commands it.80

Because of the effects that charismatic leaders have on followers, the theory predicts that charismatic leaders will produce in followers performance beyond expectations as well as strong commitment to the leader and his or her mission. Research indicates that the impact of such charismatic leaders will be enhanced when the followers exhibit higher lev- els of self-awareness and self-monitoring, especially when observing the charismatic lead- ers’ behaviors and activities81 and when operating in a social network.82 House and his colleagues provide some support for charismatic theory83 and research finds a positive effect on desirable outcomes such as cooperation84 and motivation,85 and recent conceptu- alization proposing that alternative forms (personalized versus socialized) are relevant to successful implementation of mergers and acquisitions.86 However, as with the other lead- ership theories, complexities are found87 and more research is needed. For example, one study that assessed charismatic leader behaviors, individual level correlates, and unit-level correlates (outcomes) in the military yielded only limited support for the theory’s proposi-Co

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tions and led the researchers to conclude that greater sensitivity to multiple constituencies of leaders is needed in theories and studies focused on charismatic leadership.88 Also, extensions of the theory are being proposed. For example, Conger and Kanungo treat cha- risma as an attributional phenomenon and propose that it varies with the situation.89 Leader traits that foster charismatic attributions include self-confidence, impression-management skills, social sensitivity, and empathy. Situations that promote charismatic leadership include a crisis requiring dramatic change90 or followers who are very dissatisfied with the status quo. For example, a study in a university setting revealed a situation in which a char- ismatic leader was able to successfully implement a technical change, but at the same time suffered through major political turmoil, which appeared to be side effects of the technical change. This suggests that studies of charismatic leadership must be considered in the con- text in which the leader operates, and the nature of the task or work being performed should be included in the analysis.91

Included in the extensions of charismatic leadership is also the recognition of a dark side.92 Charismatic leaders tend to be portrayed as wonderful heroes, but as Table 13.3 shows, there can also be unethical characteristics associated with charismatic leaders. With regard to meeting the challenge of being ethical, it has been noted that charismatic leaders

deserve this label only if they create transformations in their organizations so that mem- bers are motivated to follow them and to seek organization objectives not simply because they are ordered to do so, and not merely because they calculate that such com- pliance is in their self-interest, but because they voluntarily identify with the organization, its standards of conduct and willingly seek to fulfill its purpose.93

This transformation idea is also picked up by Bass, who suggests that charismatic leadership is really just a component of the broader-based transformational leadership, covered next.94

Transformational Leadership Theory

Many years ago James MacGregor Burns identified two types of political leadership: transactional and transformational.95 The more traditional transactional leadership involves an exchange relationship between leaders and followers, but transformational

TABLE 13.3. Ethical and Unethical Characteristics of Charismatic Leaders

Ethical Charismatic Leader Unethical Charismatic Leader

• Uses power to serve others • Uses power only for personal gain or impact

• Aligns vision with followers’ needs and aspirations • Promotes own personal vision

• Considers and learns from criticism • Censures critical or opposing views

• Stimulates followers to think independently and to question the leader’s view

• Demands own decisions be accepted without question

• Open, two-way communication • One-way communication

• Coaches, develops, and supports followers; shares recognition with others

• Insensitive to followers’ needs

• Relies on internal moral standards to satisfy organizational and societal interests

• Relies on convenient, external moral standards to satisfy self-interests

Source: Jane M. Howell and Charismatic Leadership: Submission or Liberation?” Academy of Management Executive, May 1992, p. 45. Used with permission.Co py ri gh t © 2 01 5. I nf or ma ti on A ge P ub li sh in g. A ll r ig ht s re se rv ed . Ma y no t be r ep ro du ce d in a ny f or m wi th ou t pe rm is si on f ro m th e pu bl is he r, e xc ep t fa ir u se s pe rm it te d un de r

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392 PART 4  MANAGING AND LEADING FOR HIGH PERFORMANCE

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5 leadership is based more on leaders’ shifting the values, beliefs, and needs of their follow- ers. Table 13.4 summarizes the characteristics and approaches of transactional versus transformational leaders. More recently, the “charisma” characteristic of transformational leadership has been changed to “idealized influence.” This was done to not confuse trans- formational with charismatic leadership, which Bass treats as different theories. Although there are a number of contrasts between the two theories, the major differentiators are how followers are treated. Key to transformational leaders is that they seek to empower and ele- vate followers (i.e., develop followers into leaders) while charismatic leaders may try to keep followers weak and dependent on them (i.e., instill personal loyalty to the leader rather than developing them to attain ideals).

In contrast to transactional leaders that behave in one of the ways shown in Table 13.4, Avolio notes that transformational leaders characterized by idealized leadership, inspiring leadership, intellectual stimulation, and individualized consideration represent a cluster of interrelated styles aimed at the following:

1. Changing situations for the better 2. Developing followers into leaders 3. Overhauling organizations to provide them with new strategic directions 4. Inspiring people by providing an energizing vision and high ideal for moral and ethi-

cal conduct96

On the basis of his research findings, Bass concludes that in many instances (such as relying on passive management by exception), transactional leadership is a prescription for mediocrity and that transformational leadership leads to superior performance in organiza- tions facing demands for renewal and change. He suggests that fostering transformational leadership through policies of recruitment, selection, promotion, training, and development will pay off in the health, well-being, and effective performance of today’s organizations.97

A meta-analysis of 39 studies found that the transformational behaviors of charisma (idealized influence), individualized consideration, and intellectual stimulation were related to leadership effectiveness in most studies, but, except for the contingent reward

TABLE 13.4. Characteristics and Approaches of Transactional Versus Transformational Leaders

Transactional Leaders

1. Contingent reward: Contracts the exchange of rewards for effort; promises rewards for good performance; recognizes accom- plishments.

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

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

4. Laissez-faire: Abdicates responsibilities; avoids making decisions.

Transformational Leaders

1. Charisma: Provides vision and sense of mission; instills pride; gains respect and trust.

2. Inspiration: Communicates high expectations; uses symbols to focus efforts; expresses important purposes in simple ways.

3. Intellectual stimulation: Promotes intelligence; rationality; and careful problem solving.

4. Individual consideration: Gives personal attention; treats each employee individually; coaches; advises.

Source: Bernard M. Bass, “From Transactional to Transformational Leadership: Learning to Share the Vision,” Organizational Dynamics, Winter 1990, p. 22. Used with permission.

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behaviors, the transactional leadership styles did not enhance leadership effectiveness,98

and this more positive impact of transformational over transactional leadership has held through the years. For example, a meta-analysis of 87 studies found transformational lead- ership related (.44) to the composite of desired outcomes (follower job satisfaction, fol- lower leader satisfaction, follower motivation, leader job performance, group or organizational performance and rated leader effectiveness).99 However, in this meta-anal- ysis, contingent reward transactional leadership also related (.39) to the same composite of outcomes, and transformational leadership failed to significantly predict leader job perfor- mance.

Most of the research on transformational leadership to date has relied on Bass and Avolio’s MLQ (Multifactor Leadership Questionnaire)100 or qualitative research that sim- ply describes leaders through interviews. Examples of the latter were the interviews with top executives of major companies conducted by Tichy and Devanna. They found that effective transformational leaders share the following characteristics:

1. They identify themselves as change agents. 2. They are courageous. 3. They believe in people. 4. They are value driven. 5. They are lifelong learners. 6. They have the ability to deal with complexity, ambiguity, and uncertainty. 7. They are visionaries.101

Increasing empirical research has supported the transformational leadership character- istics. For example, field studies have shown that transformational leaders more frequently employ legitimating tactics and engender higher levels of identification and internaliza- tion102 (see Chapter 10), have better performance103 and develop their followers.104

Recent studies are refining these general findings. For example, in a study comparing male and female sales managers, females were inclined to form unique relationships with each of their individual subordinates that were independent of their group memberships, sug- gesting transformational and contingent reward patterns that were somewhat different from their male counterparts.105

In other studies, transformational leadership mediated by leader-member exchange produced effects on followers’ performance and organizational citizenship behaviors (OCBs).106 Also, the relationship transformational leadership and OCBs were found to be moderated by perceptions of procedural justice and trust, and extraversion and agreeable- ness of the “Big Five” personality traits (see Chapter 5).107 Another recent study found ones’ emotion and personality contributed to transformational leadership behavior.108

Also, transformational leadership exhibited more moral reasoning109 and has implications for ethical concerns.110 A recent study got back to refining the impact of transformational leadership on performance by finding that one’s identification with the work unit, self-effi- cacy (Chapter 7) and means efficacy (confidence in the tools and other support needed to get the job done) were mediators.111

Conceptual analysis also indicates that contextual factors may influence receptivity to transformational leadership tactics, and therefore they should be considered and accounted for when research is being conducted.112 In addition, other theories gained attention to help explain the complex process of leadership.Co

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5 Substitutes for Leadership

Because of dissatisfaction with the progress of leadership theory and research in explaining and predicting the effects of leader behavior on performance outcomes, some of the basic assumptions about the importance of leadership per se have been challenged over the years. One alternative approach that received attention proposed that there may be cer- tain “substitutes” for leadership that make leader behavior unnecessary and redundant, and “neutralizers” that prevent the leader from behaving in a certain way or that counteract the behavior.113 These substitutes or neutralizers can be found in subordinate, task, and orga- nization characteristics. Figure 13.3 gives specific examples of possible substitutes and neutralizers according to supportive/relationship leadership and instrumental/task leader- ship.

As shown, employee experience, ability, and training may substitute for instrumental/ task leadership. For example, craftspersons or professionals such as accountants or soft- ware engineers may have so much experience, ability, and training that they do not need instrumental/task leadership to perform well and be satisfied. Those employees who don’t particularly care about organizational rewards (for example, professors or musicians) will neutralize both supportive/relationship and instrumental/task leadership attempts. Tasks that are highly structured and automatically provide feedback substitute for instrumental/ task leadership, and those that are intrinsically satisfying (for example, teaching) do not need supportive/relationship leadership. There are also a number of organizational charac- teristics that substitute for or neutralize leadership.

There has been further analysis of the leader substitutes concept,114 and Kerr and Jer- mier have provided some empirical support from field studies of police officers.115 They found that substitutes such as feedback from the task being performed had more impact on certain job-related activities than leader behaviors did. Other studies have also been inter- preted (post hoc) to support organizational characteristics such as formalization as leader substitutes.116 Some other direct tests have yielded mixed results.117 One study using hos- pital personnel with a wide variety of skills and backgrounds and in a wide variety of pro-

FIGURE 13.3. Kerr and Jermier’s Substitutes and Neutralizers for Leadership

SUBORDINATE CHARACTERISTICS IMPACT ON LEADERSHIP

Experience, ability, and training Substitute for instrumental leadership

Professional orientation Substitute for instrumental and supportive leadership

Indifference toward organizational rewards Neutralizes instrumental and supportive leadership

TASK CHARACTERISTICS

Structured and routine task Substitute for instrumental leadership

Feedback within the task Substitute for instrumental leadership

Intrinsically satisfying task Substitute for supportive leadership

ORGANIZATION CHARACTERISTICS

Cohesive work groups Substitute for instrumental and supportive leadership

Low position power of leader Neutralizes instrumental and supportive leadership

Formalization Substitute for instrumental leadership

Inflexibility Neutralizes instrumental leadership

Leader physically isolated from subordinates Neutralizes instrumental and supportive leadership

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