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Though the dynamic concept of leadership has been under review for many years, its complexity has been

soaring with the changing demands of the situation influenced by various variables such as leader's

characteristics, followers' attributes, behavior, leader-follower relationship, and others. In simple terms,

leadership is an interaction between two or more members of a group that often involves a structuring or

restructuring of the situation and the perceptions and expectations of the members. The situation in part

defines the leadership process; it influences the leader and interacts with the leader's attempts to influence

his or her followers. According to Murphy (1941), situations in which people find themselves create needs,

and it is the nature of these needs that defines the type of leadership that best serves the group. Hence, the

purpose of this paper is to review the role of situation in the leadership process supported by some of the

prominent situational leadership models including the path-goal theory, situational leadership model, and

Headnote

ABSTRACT

Though the dynamic concept of leadership has been under review for many years, its complexity has been

soaring with the changing demands of the situation influenced by various variables such as leader's

characteristics, followers' attributes, behavior, leader-follower relationship, and others.

In simple terms, leadership is an interaction between two or more members of a group that often involves a

structuring or restructuring of the situation and the perceptions and expectations of the members. The

situation in part defines the leadership process; it influences the leader and interacts with the leader's

attempts to influence his or her followers. According to Murphy (1941), situations in which people find

themselves create needs, and it is the nature of these needs that defines the type of leadership that best

serves the group.

Hence, the purpose of this paper is to review the role of situation in the leadership process supported by

some of the prominent situational leadership models including the path-goal theory, situational leadership

model, and contingency model. Additionally, a critical factor that has a significant influence on the situation

is discussed - power as an ability to exercise influence on people and its role in influencing leadership

situations.

The final section of this research includes analysis of few real business world situations and its subsequent

influence on leaders' behaviors, followers' reactions, and leader effectiveness. Interestingly, it was found that

leaders adopted different leadership styles variant upon the needs of the concerned situation which affected

THE ROLE OF SITUATION IN THE LEADERSHIP PROCESS: A REVIEW AND APPLICATION McLaurin, J Reagan . Academy of Strategic Management Journal; Arden Vol. 5, (2006): 97-114.

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their leadership effectiveness.

INTRODUCTION

Leadership has been a fascinating and elusive concept of research for many years. Scholars and researchers

have offered many definitions in the past; however, this organizational behavior is still understood as an

emerging principle with more complexity. In 1974 Stogdill concluded that "there are almost as many

definitions of leadership as there are persons who have attempted to define the concept" (cited in Shani &

Lau, 2000, p. 44). In the most basic terms, leadership involves influence, it occurs among people, those

people intentionally desire significant changes, and the changes reflect purposes shared by leaders and

followers (Daft & Noe, 2001).

LITERATURE REVIEW

Many past studies have attempted to comprehend leadership from a variety of perspectives, and over the

years, it has witnessed transformational changes in its context. Initially, leadership was based on the "Great

Person Theory of Leadership," whereby 'great leaders' were born with some personal qualities to lead (Pierce

& Newstrom, 2003, p. 6).

In the next phase, the focus shifted to identify the personality attributes that endows an individual with the

potential to emerge as a successful leader and differ from a non-leader in his or her effectiveness. Hence,

with this began the era in which leadership was perceived as a psychological phenomenon. In his 1948 study,

Stogdill identified certain personal factors that are associated with leadership such as intelligence,

dependability, persistence, self-confidence, adaptability, among many others. Based on the review conducted

by Mann (1959), it was observed that there is a "strong relationship between personality and leadership

perceptions (who is the leader)" (Pierce & Newstrom, 2003, p. 61).

Thereby, the focus turned towards a variety of other themes such as influence of behavior on performance

and satisfaction of the followers'. As defined by Bowers & Seashore (1966), leadership is "organizational

useful behavior by one member of an organization family toward another member or members of that same

organizational family" (Pierce & Newstrom, 2003, p. 1 6 1). Following which based on several studies, some

key broad categories of effective behaviors came into prominence such as consideration (behavior reflecting

friendship, warmth, trust), and initiation of structure (behavior defining roles and responsibilities of followers,

providing directions, instructions) (Bowers & Seashore, 1966). This was discovered by a study done by Ohio

State University in 1 945 which basically summarized the two dimensions of behavior into " concern for

people" and "concern for task completion" (Shani & Lau, 2000, p. 49).

Another important study done by University of Michigan also came into prominence. The essence of this

study was that leaders are production oriented (as they concentrated on planning, scheduling, coordinating)

and relationship oriented (showing respect, trust, confidence, understating followers' needs). These two

aspects eventually could be related to the Ohio State University study (Shani & Lau, 2000).

ROLE OF SITUATION IN LEADERSHIP PROCESS

Further to the behavioral approach to understanding the concept of leadership, a new evolution took place in

this field, and this was studying the influence of situation in the leadership process. The relevance of

situation as an influencing factor on the leadership process was brought to attention by many intellect

studies. Contrary to the previous understanding of leadership as a psychological phenomenon, Murphy

(1941) described it as sociological in nature. According to him, situation is an influencing variable that

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defines creates the need of defining what combination of traits and behavior is required by the leader to be

successful in that particular situation. Hence, he defined as leadership "to be a function of the whole

situation and not something that resides in a person" (Pierce & Newstrom, 2003, p. 4)

Similarly, Smircich and Gareth presented a view on leaders based on Murphy's theory that leaders are

individuals who are capable of interpreting ambiguous situations, passing the same understanding to the

followers, and deciding the course of action for achieving the goal. Thus, leadership process came to be

characterized as an interplay between leader, follower, and the context or situation (Pierce & Newstrom,

2003), and this process emerges as a result of the actions of both leader and led (Smircich & Morgan, 1982).

Not just this, some more interesting studies have highlighted the importance of situation. Stogdill provided

insight to the leadership process as a work relationship between the leader and the follower associated with

the attainment of the common objectives. According to him, having personality traits alone is not enough to

emerge as a leader. In fact, the patters of traits possessed must fit in the situation including the

characteristics of the followers and goals (Stogdill, 1948). With that view, he suggested that an individuals

who are leaders in situation may not be in another.

In light of the relevance of situation in the leadership process, further advancement in this context suggest

that there are many factors that influence the leader's effectiveness in a given situation are time urgency,

nature of work, degree of autonomy etc. (Pierce & Newstrom, 2003).

SITUATIONAL APPROACH TO LEADERSHIP

Stating the above theories in more simple terms, as conditions changes, the leadership needs, combination

of traits and behaviors that will prove effective also change. Many scholars and researchers have conducted

research in this field and developed leadership theories identifying how situations and associated factors

influence the leadership process. The focus of this section of the paper is the describe some of the most

prominent theories of the past that attempts to describe what are the various components that contribute to

a situation and how these different conditions interact with leadership style to produce what we may call as

effective leadership.

PATH GOAL THEORY

Leadership style may be defined "as a pattern of philosophy, beliefs, attitudes, feelings, and assumptions

about leadership that affect the individual's behavior" (Shani & Lau, 2000, p. 47). This along with leader's

position and appropriate behavior for dealing with followers has a maj or impact on the leadership style.

While leadership style has an impact on teams, to get the best result, there is no one single leadership style

to rely on (Goleman, 2000).

The path-goal leadership model was developed by Robert J. House in 1 97 1 and later revised by Robert

House and Terence R. Mitchell in 1974. The foundation of the path-goal theory is the expectancy motivation

theory which states that "an individual's attitudes or behavior can be predicted from the extent to which the

job or behavior is seen as leading to various outcomes and the evaluation of these outcomes" (House &

Mitchell, 2003, p. 195).

Early Theories

The initial theory of 1971 asserted that "the motivational function of the leader consists of increasing

personal payoffs to subordinates for work-goal attainment and making the path to these payoffs easier to

travel by clarifying it, reducing roadblocks and pitfalls, and increasing the opportunities for personal

satisfaction en route" (House, 1997). The 1974 version of path-goal theory led to the development of a

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complex theory that involved four specific leader behaviors (directive, supportive, participative and

achievement-oriented) and three follower attitudes (job satisfaction, acceptance of leader and expectations

about rewards linked to effort and performance). A directive leader provides followers with directions and

instructions when the task is unstructured and complex and this contributes to increasing employee

motivation and satisfaction. A supportive leader shows consideration towards followers and treats them as

equals when the task is unambiguous, stressful or boring and hence removes the blocks to employee

satisfaction. A participative leader helps followers by clarifying the task, consults the followers and considers

their suggestions and opinions before making a decision. Finally, an achievement oriented leader sets

challenging goals for followers and expects them to perform at their highest levels thereby increasing their

self-confidence and satisfaction (Nahavandi, 2000).

The two propositions advanced in this updated theory are: (1) leader behavior is effective and acceptable by

subordinates to the extent that they perceive such a behavior as a source of immediate satisfaction or

important in leading to future satisfaction and (2) leader behavior is motivational to the extent that it makes

satisfaction of subordinates' needs contingent on effective performance and such behavior complements the

environment of subordinates by providing coaching, guidance, support and rewards necessary for effective

performance. Two contingency variables that are considered in the theory are: personal characteristics of

subordinates and environmental pressures and demands. The two personal characteristics that are

discussed include subordinates perception of their ability and their locus of control. Environmental factors

include the tasks, the formal authority system of the organization and the work group (Gibson, Ivancevich,

Donnelly & Konopaske, 2003).

Critique of the Theory

Although there have been several supportive research studies (Schriesheim and Kerr 1 974), the empirical

support for path-goal theory has been mixed (Downey, Sheridan and Slocum 1975; Szilagyi and Sims 1974).

Recent reviews (eg. Evans 1996, Podsakoff et al. 1995; Wofford and Liska 1993) have also found inconsistent

support for the theory. A study by Johns in 1978 showed that consideration leads to higher employee

satisfaction regardless of the task. Contrary to the path-goal theory, a study by Bass et al. in 1975 showed

that leaders used structuring behavior in structured situations successfully (Nahavandi, 2000). An early study

that tested the two propositions of the path-goal theory was by Greene in 1979. His study was generally

supportive of the path-goal theory with two exceptions: (1 ) the insignificant results concerning the

relationship between supportive leader behavior and role clarity and (2) strong indications that subordinate

performance caused variance in leader behavior, almost regardless of the task structure.

Revision of the Path Goal Theory

The highlighted shortfalls of the path-goal theory were that firstly it was not adequately tested and secondly,

the boundary conditions of the theory were not adequately specified. In 1996, Robert House presented a

reformulated path-goal theory. The reformulated theory is a theory of work unit leadership. "It specifies leader

behaviors that increase subordinate empowerment and satisfaction and work unit and subordinate

effectiveness. It also addresses the effects of leaders on the motivation and abilities of immediate

subordinates and the effects of leaders on work unit performance.

This theory includes 8 classes of leader behavior, individual differences of subordinates, and contingency

moderator variables which are related to each other in 26 propositions. The revised leader behaviors include

path-goal clarifying, achievement-oriented, work facilitation, supportive, interaction facilitation, group-

oriented decision process, representation and networking, value based and finally, shared leadership

behavior.

SITUATIONAL LEADERSHIP

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Past theory

The 'Situational Leadership' model developed by Hersey and Blanchard developed in 1969 has wide

application even in today's business environment. This model owes it origins to the Ohio State studies and

uses concepts similar to initiating structure (task behavior) and consideration (relationship behavior) (Shani

& Lau, 2000).

Situational leadership theory (SLT) asserts that there is no one best style of leadership or way to influence

people. The leader needs to respond to the situation with appropriate task and relationship behavior based

on followers' readiness and this (defined as ability and willingness) interaction determines the leader's

effectiveness (Hersey, 1988). In other words, as the level of followers' readiness changes, the amount of

leader task and relation behavior should also change to match that level. According to Blank, this in turn will

determine the leader's effectiveness on followers' satisfaction and performance" (Cairns, Hollenback,

Preziosi, & Snow, 1998).

Hersey identified four main leadership styles which are high task and low relationship (telling), high task and

high relationship (selling), low task and high relationship (participating), and low task and low relationship

(delegating). The basic concept behind this model is that as the level of follower readiness increases,

effective leader behavior will involve less structure and less relationship support.

Revision of Situational Leadership

Since its inception in 1969, the model went through a number of changes which changes which Blanchard,

Zigarmi, and Nelson (1993) refer to as "revisions that have since improved the model" (cited in Claude, 1997).

Eventually, Blanchard and his colleagues revised the old theory and developed 'Situational leadership ?G in

1985. Some of the changes noticed were that the maturity level of followers was renamed as "development

level," and "the two components of maturity / development were renamed as commitment and competence in

place of the original labels of willingness and ability" (Claude, 1997). Another interesting difference was in the

labeling of the four quadrants of leadership style. The old styles of telling, selling, participating, and

delegating were relabeled as directing, coaching, supporting and delegating.

Moreover, the two behaviors which were earlier defined as task behavior and relationship behavior were now

known as directive and supportive. Although the changes in this model were made to improve the concept,

Claude argued that "Hersey and Blanchard made the theoretical explanation for the relationships among key

variables in the model more ambiguous" (Claude, 1997).

Critiquing the theory, Claude further suggested that "while Blanchard and his coauthors offered no

explanation for renaming the variable in the model, Randolph and Blackburn (1989) indicate that the changes

in the terms depicting categories of leader behavior (directive and supportive) and the four leadership styles

(directing, coaching, supporting, and delegating) reflect the choice of expressions that are, as they say, 'less

evaluative.' Randolph and Blackburn seem to be speculating that Blanchard and his associates have opted

for more emotionally neutral, descriptive terms" (Claude, 1997).

Critique of Situational Leadership

This model was originally conceived in 1966 and since then several studies have been done to find support

for it. Hence, it is imperative to consider its applicability in today's business environment as well. Based on a

study conducted by Cairns, Hollenback, Preziosi, & Snow in 1 998 among 151 executives within service and

manufacturing businesses of large Fortune 1 00 company, the results showed very little support for the SLT.

However, the study produced only moderate support for the SLT variables recommending further research in

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the area., SLT supported that at lower levels of followers' readiness, leader directed behavior had a positive

influence on employee satisfaction and performance. The findings of the Cairns, Hollenback, Preziosi, &

Snow suggested moderate support for this.

Moreover, SLT observed that at higher follower readiness, the leadership is more follower directed as they

have the capacity to perform the functions required resulting in higher satisfaction and performance. This

received no support from the 1998 study which stated that SLT "appears to be unable to predict for high-

maturity employee" and suggested that "leadership still matters for individuals at this high degree of follower

readiness" (cited in Cairns, Hollenback, Preziosi, & Snow, 1998, p. 114).

Yet another study conducted in 2004 provided support to Cairns, Hollenback, Preziosi, & Snow study of 1998.

The results of this research by Chen and Silverthorne also didn't support SLT predictions, thereby suggesting

that the job performance is not impacted by the degree of match between leadership style and followers'

readiness. However, it partially supported SLT that the higher the leader's leadership score, the more effective

is the leader's influence, but this didn't predict job performance. In other words, whether the leadership style

and employee readiness matched or not, it had no impact on employee satisfaction and job performance.

However, the higher the leader's leadership score, the higher the employee willingness to perform a task and

higher the satisfaction. Also, higher the willingness, the higher was the job satisfaction and performance

(Chen and Silverthorne, 2004).

Additionally, some other researches such as by Hambleton and Gumpert (1982) highly supported the SLT, and

Vechio (1987) have been supportive of the SLT to the extent that the theory holds only for certain types of

task structures. Hence, the response to SLT has been quite mixed (Chen and Silverthorne, 2004).

CONTINGENCY MODEL

Another theory supporting the notion that a leader effective in one situation may not be in another is the

contingency model developed by Fiedler. This model holds that the effectiveness of group performance is

contingent upon two factors - the leader's motivational pattern and the degree to which the situation gives a

leader power and influence (Fiedler, 1972).

According to this theory, motivational pattern is defined as if a person is more task motivated (driving

satisfaction from task accomplishment) or relationship motivated (seeking satisfaction in the support and

admiration of co-workers) measured on a 'least-preferred co-worker' scale (Miller, Butler, & Cosentino, 2003). A

high score on this scale indicates the person is more relationship oriented and low score refers to more task

orientation.

The second aspect of the contingency model refers to the situation favorability which determines the degree

to which situation allows the leader to have power, and this situational control has three components namely,

leader-member relation, task structure, and leader power. Hence, to summarize this theory, task oriented

leaders perform more effectively in very favorable or very unfavorable situations reserving moderately

favorable situations for relationship oriented leaders (Fiedler, 1972). The contingency model assumes that it

is easier to change work situations than to change the leader's behavior and personality characteristics

(Shani & Lau, 2000).

Extension of the Contingency Model

Interestingly, based on this study, Miller, Butler, & Cosentino (2003) extended the contingency model to the

prediction of follower effectiveness - the degree to which knowledge of followers' motivational patterns and

situational favorability could be used to predict follower effectiveness. Since the sample used consisted of

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junior personnel serving in US Army, none of the participants had leadership position, and that is why

Fiedler's position power in this study has been replaced with years of experience as a measure of their ability

to influence the leader.

Also, since the sample included personnel in a battalion, task structure for them was relatively high.

Therefore, based on the results of this model, it was predicted that relations-oriented subordinates performed

better than task-oriented subordinates in moderately favorable situations. Consistent with Fiedler's model,

this extension model also found that in highly unfavorable conditions, task-oriented subordinates performed

better (Miller, Butler, & Cosentino, 2003).

However, the one exception was that in highly favorable situations, contrary to the findings with regards to

leader, relationship oriented followers performed better. The plausible reason attributed to this by the

researchers was that in simple routine tasks, the task-oriented followers may find very less scope to perform

well. With respect to this, it was argued that relation-oriented followers may be more inclined to maintain

good relationships with co-workers (Miller, Butler, & Cosentino, 2003).

Hence, the research supported the notion that leadership style should be adjusted to match the employees'

orientation. In other words, by matching followers' characteristics with the situation and modifying

leadership style accordingly will enhance the followers' effectiveness (Miller, Butler, & Cosentino, 2003).

SITUATIONAL POWER

Power can be defined as the ability of one individual, function, or division, to influence another individual,

function or division to do something that it would not otherwise have done (Dahl, 1957). Power can be

differentiated from authority and authority is a subset of power. Authority is the formal power that a person

has because of the position in the organization (Gibson, Ivancevich, Donnelly & Konopaske, 2003). In 1968,

French and Raven proposed five sources of interpersonal power. These included: (1) legitimate power that is

a person's ability to influence because of position), (2) reward power is derived from a person's ability to

reward compliance. It is often used to back up the use of legitimate power, (3) coercive power is the power to

punish, (4) expert power is the power to influence others based on special expertise and, (5) referent power is

power based charisma due to personality, style or behavior.

In 1975, McClelland proposed that concept of 'need for power'. He defined this "as the desire to have am

impact on others" (citied in Gibson, Ivancevich, Donnelly & Konopaske, 2003, p. 280). This action is shown in

three ways: (1) by strong action, by giving help or advice, by controlling someone, (2) by actions that produce

emotions in others, and (3) by concerns for reputation. Power is prescribed by the structure of organizations.

Organizational structure creates formal power and authority by specifying certain individuals to perform

specific jobs and make certain decisions. Power in shared in organizations as no one controls all the desired

activities in the organization. As power derives from activities rather than individuals, an individual's power is

never absolute and derives from the context of the situation. The amount of power a person holds at a

certain time depends on what activities are desired and considered critical for the organization (Salancik &

Pfeffer, 2003, p. 129).

The concept of strategic contingencies suggests that individuals, teams or departments gain power based

on their ability to address issues that are instrumental to reaching organizational goals. The four strategic

contingencies that form the basis of organizational power for individuals or teams are: (1) the ability to help

others cope with uncertainty, (2) the centrality of the individual or team to the production or delivery service,

(3) the extent to which an individual's or team's expertise is needed by others and (4) the extent to which the

tasks performed are unique and non-replaceable in the organization (Nahavandi, 2000).

SITUATIONS FACED BY LEADERS

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Moving from the time the above discussed leadership models were developed, the world is now changing.

"Old ways of doing things are being replaced, improved... the way we make things is being revolutionized. The

world is changing and leadership is no exception" (White, Hodgson & Crainer, 1996, p.l). As Warren Bennis

said that in view of the constantly changing environment and challenges facing business leaders, the key to

making right choice lies in embodying the leadership qualities necessary to succeed in a global economy.

Continuing on his opinion, Bennis stated that "to survive in the 21st century, we'll need a new generation of

leaders, not managers" (Shelton, 1997).

Some of the major driving forces of change are realized to be globalization, consequences of increased

competition, complexity of changes, and decrease in hierarchical organization structure (Shelton, 1997). In a

climate of such fierce changes, leadership is perhaps an imperative for the future. As Peter Drucker stated

that there is no substitute for leadership and defined leadership simply as "getting things accomplished by

acting through others" (Shelton, 1997, p. 41).

According to Nahavandi (2000), although employees respond to the same basic principles of leadership, they

still have different needs. For example, some employees require more structure and direction; whereas,

others demand autonomy. He further suggested that in today's dynamic business world, leaders must remain

flexible and open to new experiences. "Leaders in the twenty-first century must be willing to experiment, push

the limits of their assumptions, and consider the inconceivable" (Nahavandi, 2000, p. 237).

In fact, leaders with the best results do not on only one style of leadership; different styles are used

depending on the situation and they exquisitely sensitive to the impact imposed on others. Hence, results will

payoff by using the right style at the right time and in the right measure (Goleman, 2000). Keeping in mind the

above perspective that the current business world is prone to challenge of re-defining themselves to continue

to provide the direction, guidance, and nurturing that all followers need (Nahavandi, 2000), this section of the

report attempts to present the situational adaptability by some of the business leaders and their approach to

be effective in the challenges faced.

Richard Nicolosi at Procter & Gamble

Richard Nicolosi became the associate general manager of Procter & Gamble's paper product division in

1984 when the division's market position had become very weak compared to its standing in the mid 1970s.

New competitive pressures had hurt P&G's position badly and it was estimated that the company' market

share of disposable diapers fell from 75% in the mid 1970s to 52% in 1984. He found the organization to be

bureaucratic and centralized in addition to being preoccupied with internal functional goals and proj ects. All

available customer related information was quantitative in nature and the focus was on cost savings and

volume and market share expansion.

In his research, Ellloy (2004) hypothesized that groups where procedures, control, and formality are

emphasized, the opportunities available to employees for demonstrating competence was limited leading to

low levels of organization based self-esteem. Contrary to this, he further added, with opportunities to show

experience, and exercise self-control and self-direction, individuals derived higher self-esteem.

Based on the situation, the first thing that Nicolosi stressed on was the need for the division to become more

creative and market driven rather than just a low cost producer. The new strategy that Nicolosi developed

was more focused on using groups to manage the division and its products and later he termed his team as

the "paper division board" with whom he initially held monthly meetings and then moved on to weekly

meetings. This was followed by Nicolosi establishing "category teams" and also "new brand business teams".

And he only selectively involved himself in more detail in certain activities.

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Supported by Nahavandi's (2000) view on the concept of self-managed teams, it states that "self-managed

teams are responsible continuous improvement and implementation of their own product. . .and are

encouraged to make their own decision" (pl65).

He later went on to describe his vision of an organization where "each of us is a leader" . All the above

changes brought in by Nicolosi contributed in creating an entrepreneurial environment where a large number

of people were motivated and focused on the new vision and many of the innovative ideas came from the

employees themselves. This resulted in revenues of the paper products division increasing by 40% over a four

year period and profits were up by 68% despite the fact that competition was still on the rise.

This situational adaptability has been explained by Nahavandi (2000) as the role of leader in a team

environment where leaders are caretakers of the teams helping the followers in goal achievement by

providing them encouragement when needed, and resources. He further defined the role of a leader to keep

the team focuses on its specific task, facilitate decision making, and interfere when needed.

This situation saw Nicolosi emerging as a leader who motivated his team not by pushing them in the right

direction but by satisfying their basic human needs during a downturn in the organization. He successfully

articulated the vision of the organization in a way that stressed the values of the employees, involved them in

deciding on ways to achieve the vision and gave them a sense of control (Kotter, 2001).

"In fact, Procter & Gamble once claimed its self-managed teams were one of the company's trade secrets"

(Nahavandi, 2000, p. 164). The results achieved by Nicolosi's team approach shows consistency with Elloy's

research study on leader's influence in a self-managed team. This 2004 study suggested that work teams

have been central to the effectiveness of organizations as this contributed to employee quality of work and

outcomes such as increased employee satisfaction and motivation (Elloy, 2004).

Therefore, Manz and Sims (2001) noted that in the 21st century, superleadership is an appropriate style of

leadership for self-managed teams where the team monitors their own performance and exercise increased

levels of autonomy (Elloy, 2004). Following the same theme, J. Oliver Crom said that "today's business slogan

should be 'every employee is a leader" (Shelton, 1997, p.131).

Rich Teerlink at Harley Davidson

When Teerlink became the President of Harley Davidson in 1987, the company had just come out of a seven

year crisis phase and he was faced with the task of creating an environment when all employees took

responsibility for the company's present and future. He understood that in a company that had a culture of

top-down leadership, it would require trust on the part of the employees and discipline on the part of the

leader to put behind the traditional expectations in a leader-follower relation and to create a company where

decisions were made by all.

Due to the prolonged crisis period in the company, the employees were used to working under conditions of

crisis management surrounded by a lot of uncertainty and this contributed to Teerlink facing a lot of

resistance (from employees) in trying to create an environment in which the employees would care about the

company on a personal level. He faced his initial resistance when he tried to create a joint vision for the

company along with a group of 70 union and management leaders for the Wisconsin operations of the

company.

While presenting the joint vision to the rest of the employees, he realized that he had behaved like a

traditional manager by not involving all the employees in the vision setting process. He faced his second

resistance from the senior management at Harley who were not willing to implement the shared vision and

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late, also part of the union opted out of it. Even though Teerlink was not successful in his initial attempt,

throughout his tenure with Harley, he kept striving to change the focus employee motivation and as a long

term goal, to make the employees work for the company, rather than for themselves (Teerlink, 2000).

Similar to the situation theory based on the path goal model by House & Mitchell (1974), one of the impacts

of subordinate participation was that they selected goals they valued highly and also increase the

correspondence between organization and subordinate goals. Further argued by the theory was that when

tasks were ambiguous, subordinates had greater need to reduce the ambiguity, which seems parallel to the

resistance faced by Teerlink.

Yet another study by Ladd and Marshall (2004) indicated that employee participative decision making

decreases role ambiguity and increases knowledge of results which thereby reduces uncertainty and as a

resultant provides motivational benefits that improve performance. This research further highlighted that

increased participation led to job satisfaction, and job satisfied were more likely to accept organizational

goals and put in greater efforts to positively influence outcomes.

Hence, Teerlink saw himself committed to an inclusive leadership style with an aim of transforming the

culture at Harley. Even though he was not completely successful at bringing about this change, he did

succeed in initiating the change and when he retired in 1999 - he knew that he left behind only a few people

who did not have their complete selves and mind involved in work (Teerlink, 2000).

The result achieved by Teerlink seems consistent with Nahavandi's (2000) opinion that by using team to

make important decisions, leaders built their commitment to the success of the new operation. Not only this,

some researchers claim that employee involvement has motivational effects of increased employee job

satisfaction and organizational commitment (Ladd & Marshall, 2004). Therefore, in Teerlink's situation, he

faced the challenge of inducing more participative leadership to share ideas, vision, goals, and facilitate

decision making.

Leonard D. Schaeffer, at Wellpoint Health Networks

Schaeffer joined Blue Cross of California as CEO in 1986 when the company operated losses of & 165 million.

Under his leadership, the company transformed from a loss making, weak company to a strong publicly held

company called Wellpoint Health Networks, one of the largest health insurance organizations in the United

States. As the company changed, Schaeffer himself went through three different styles of management and

transformed as a CEO (Schaeffer, 2002).

Initially, during the turn-around phase of the company, he adopted a more top-down, autocratic style of

leadership. Within 18 months, he laid off nearly half of the company's 6000 employees. Even though it was

not easy for him to let go of employees who were not responsible to the company's mismanagement, he

realized that the company was almost financially dead and needed a change as soon as possible. He

described autocracy as one of the "least enjoyable styles of management" and went further to define an

autocratic leader "not as someone who bullies others endlessly but as a managerial equivalent of an

emergency room surgeon, forced to do whatever it takes to save a patient's life". This was in line with the

Normative Decision Model by Vroom and Jago in 1988 that identified autocratic behaviors as one of the four

decision methods available to leaders when the situation did not allow for follower involvement in the

decision making process (Nahavandi, 2000).

Once the company was stabilized, Schaeffer shifted his focus from autocratic leadership towards

participative leadership. He wanted the company to achieve an industry leader position by participating in,

rather than actually making, day-to-day decisions. At WellPoint, he implemented this leadership style by

setting four or five clear goals for the company and highlighting the specific strategies for achieving those

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goals. Each manager was then supposed to take some responsibility for meeting those goals. An example

that he used to describe this was that if the goal were "Use innovation and service to increase our value to

our customers", each division president would be required to develop innovative products provide novel ways

to provide quality service to the company's stakeholders.

The difference according to Schaeffer was that even though implementation of the strategies was a must,

there were few restrictions on how managers carried them out. This led to WellPoint managers discovering

new business opportunities that the senior management were unaware off. According to Schaeffer, being a

participative leader was not easy especially if it were a shift from an autocratic leadership style as it required

letting and trusting the employees to make sound business decisions.

Participative leadership behavior was identified as one of the four important leader behaviors in a study by

House and Mitchell in 1974. This theory highlighted the fact that participation would lead to greater clarity of

the paths to the goals, more autonomy for the employees to carry out tasks and would lead to increased

employee motivation (House & Mitchell, 1974).

After WellPoint's ability to live up to its promises to stakeholders became more predictable, Scheaffer shifted

his focus towards a reformer style of leadership. He demonstrated this leadership style when he undertook

the task of making certain drugs that were sold only through prescription now available over the counter. He

believed that doing so would save patients and insurers a great deal of money as the medicines had minimal

side effects associated with them and therefore did not require a prescription. As a reformer, Schaeffer spent

30% of his time meeting representatives from the government and the industry and discussing certain

policies and health care practices. He did assert that in each phase of his leadership cycle, he had specific

goals to focus on and continuously fought for corporate survival and success (Schaeffer, 2002).

Schaeffer followed well the theme "different strokes for the same folks at different points in time" (Pierce &

Newstrom, 2003, p. 190). As the situations that he faced changed over time, he varied his leadership

behaviors accordingly to be able to fulfill the needs his followers. To support this point further, in 1974, Kerr,

Schreisheim, Murphy and Stogdill collected evidence that leader behavior was not always associated with

those who behave in a highly considerate and structuring manner. Some of the situational factors that

influence leader behavior are time urgency, amount of physical danger, external stress, degree of autonomy,

job scope and meaningfulness of work.

Chuck Trowbridge and Bob Crandall at Eastman Kodak

Eastman Kodak entered the copier business in 1970. Even though the company grew business to nearly $1

billion in revenues in a decade's time, the costs were high and profits were shrinking. In 1984, Kodak had to

write off $40 million in inventory and there were many problems associated with the business. In the same

year, a new copy products group was established and Chuck Trowbridge was appointed as general manager

of the group.

Soon after joining, Trowbridge met with every key person associated with the copier business including Bob

Crandall who headed the engineering and manufacturing organization. Together, their vision for engineering

and manufacturing was "to become a world-class manufacturing operation and to create a less bureaucratic

and more decentralized organization".

As defined by Daft & Noe, decentralization is believed to reduce the burden of management, and make greater

use of employees' skills and abilities. Contrary to the hierarchical structure, employees generally feel a

greater sense of involvement and commitment when they have a chance to be involved in decision making

(2001).

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However, they faced difficulties in conveying this vision to the rest of the organization as it was completely

different from previous communication related to Kodak as a whole. In order to align employees towards this

new vision, Crandall adopted a variety of approaches. These included: weekly meetings with direct reports,

group discussions on new projects and latest improvements, quarterly " State of the Department" meetings

where managers met with all employees in their own departments, monthly meetings with 80 to 100 people

from some area of his organization who could discuss anything they wanted and meetings with top

management once a week.

Behind all this, Crandall's only goal was to get all of his 1,500 employees involved in at least one of these

focused business meetings every year. The most powerful and visible written communication used were

charts that were hung in the main hallways and they reported the quality, cost and delivery results of each

product measured against difficult targets.

This intensive alignment process showed results within six months of its inception. These continued

successes added more credibility to the message and helped in getting more people aligned to the same

goal. Between 1984 and 1988, quality on one of the main product lines increased nearly 100-fold, costs

decreased by nearly 24% over a three year period and employee productivity measured in units per

manufacturing employee more than doubled between 1985 and 1988.

Interdependence is a central feature of modern organizations where most of the employees are tied to one

another by their work, technology, management systems and hierarchy. "When an organization heads

towards a change, these links represent a challenge because unless most individuals line up and move

together in the same direction, people will tend to fall over one another" (Kotter, 2001, p. 90). Aligning people

is different from organizing and staffing people because aligning involves talking to more people than

organizing does. Aligning also leads to empowerment that helps overcome problems associated with

adjusting to rapid changes (Kotter, 2001).

The concept of empowerment involves sharing power with employees and its goal is to increase power and

autonomy of all employees in the organization (Nahavandi, 2000). Research on the distribution of power

(Tannenbaum and Cooke 1974) together with observations of many leaders (Bennis and Nanus 1985; Block

1987) strongly suggests that equal power sharing contributes to an organization's effectiveness.

Empowerment of employees is also a powerful motivational tool by providing them with both control and a

sense of accomplishment.

CONCLUSION

By viewing leadership as a relationship between traits, behaviors, and the situations in which they are found,

involving the exchange of power and influence, leadership has emerged as a dynamic social process.

Although there has been phenomenal amount of diversity even in the definition of leadership, there is

agreement that "leadership is a group phenomenon - there are no leaders without followers - and that a leader

influences and guides other to achieve goals" (Nahavandi, 2000, p. 231). And leadership effectiveness

depends not only on internal factors but also on external adaptability.

Although traditionally it was considered that leaders with certain traits like strategic thinking, industry

knowledge, and persuasiveness, among many others were more likely to emerge as leaders, the approach

was revolutionized by several subsequent theories. With the changing business external and internal

environment, it has become essential for successful leaders to adapt their leadership style to the needs of

the situation.

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The various prominent theories or models that were conceived in the past have undergone continuous

revisions. On one side Hersey and Blanchard Situational Leadership model suggested that leadership style

should be matched with the maturity level of the followers; on the other side, Fiedler's Contingency model

provided that "leadership style is considered relatively fixed and the solution may be to change leaders or

aspects of the work situation" (Shani & Lau, 2000, p. 53). Nevertheless, the application of these models was

observed even in today's business scenario based on the case analysis; hence, re-emphasizing that different

leadership style was contingent on the conditions

In light of the above viewpoints, the leader's behavior depends on the requirements of the situation. Situation

may include a number of variables such as followers' attributes, leader-follower relationship, external factors

such as time pressure, nature of task and these together effect the leader's effectiveness in a given scenario.

There are several approaches to leadership, and in view of the various influencing situational factors

probably there is no best way to define when a leader is effective. Hence, effective leadership is a match

between the leader and the leader situation.

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AuthorAffiliation

J. Reagan McLaurin, American University of Sharjah

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