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What Is Leadership?

Leadership occurs when particular individuals exert influence on the goal achievement

of others in an organizational context. Effective leadership exerts influence in a way that

achieves organizational goals by enhancing the productivity, innovation, satisfaction,

and commitment of the workforce.

Strategic leadership refers to a leader’s “ability to anticipate, envision, maintain

flexibility, think strategically, and work with others to initiate changes that will create a

viable future for the organization.” Strategic leaders are open and honest in their

interactions with the organization’s stakeholders, and they focus on the future

Some people occupy formal or assigned leadership roles in which they are expected to

influence others and are given specific authority to direct employees. Others may be

informal leaders who must rely on being well liked or perceived as highly skilled in order

to exert influence.

Are Leaders Born? The Search for Leadership Traits

Throughout history, social observers have been fascinated by obvious examples of

successful interpersonal influence. The implicit assumption is that those who become

leaders and do a good job of it possess a special set of traits that distinguish them from

the masses of followers. Trait theories of leadership, however, did not receive serious

scientific attention until the 1900s.

Research on Leadership Traits

According to trait theory, those who become leaders and perform well possess a special

set of traits which distinguishes them from the masses of followers. Traits are personal

characteristics of the individual, including physical characteristics, intellectual ability,

and personality. Research studies indicate that some traits are associated with

leadership. In recent years, there has been a renewed interest in the study of leadership

traits, and a number of studies have shown that certain traits are closely linked to

leadership including intelligence and several of the “Big Five” personality dimensions

(agreeableness, extraversion, and openness to experience). However, the usefulness of

these findings and the trait approach is questionable.

Limitations of the Trait Approach

Even though some traits appear to be related to leadership, there are several reasons

why the trait approach is not the best means of understanding and improving

leadership. First, it is difficult for us to determine whether traits make the leader, or the

opportunity for leadership produces traits. Second, even if we know which traits are

associated with effective leadership, we have no information about the way to train and

develop leaders and no way to diagnose failures of leadership. The most crucial problem

of the trait approach to leadership is its failure to take into account the situation in

which leadership occurs. And although some traits are associated with leadership, traits

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are only a precondition for certain actions that a leader must take in order to be

successful.

The Behaviour of Assigned Leaders

What are the crucial behaviours that leaders engage in, and how do these behaviours

influence employee performance and satisfaction? The most involved, systematic study

of leadership begun at Ohio State University. This research had employees describe

their superiors along a number of behavioural dimensions. This revealed two basic types

of leadership behaviour — consideration and initiating structure.

Consideration and Initiating Structure

Consideration is the extent to which a leader is approachable and shows personal

concern for employees. The considerate leader is seen as friendly and egalitarian,

expresses appreciation and support, and is protective of group welfare. Initiating

structure is the degree to which a leader concentrates on group goal attainment. The

structuring leader clearly defines and organizes his or her role and the roles of followers,

stresses standard procedures, schedules the work to be done, and assigns employees to

particular tasks. A leader can be high, low, or average on one or both dimensions.

The Consequences of Consideration and Structure

Research shows that consideration and initiating structure both contribute positively to

employees’ motivation, job satisfaction, and leader effectiveness. However,

consideration is more strongly related to follower satisfaction (leader satisfaction and

job satisfaction), motivation, and leader effectiveness, while initiating structure is

slightly more strongly related to leader job performance and group performance.

There is some evidence that the relative importance of consideration and initiating

structure varies according to the nature of the leadership situation:

• When employees are under a high degree of pressure due to deadlines, unclear tasks, or external threat, initiating structure increases satisfaction and

performance.

• When the task itself is intrinsically satisfying, the need for high consideration and high structure is generally reduced.

• When the goals and methods of performing the job are very clear and certain, consideration should promote employee satisfaction, while structure might

promote dissatisfaction.

• When employees lack knowledge as to how to perform a job, or the job itself has vague goals or methods, consideration becomes less important while initiating

structure takes on additional importance.

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Leader Reward and Punishment Behaviours

Two additional leader behaviours that have been the focus of research are leader reward

behaviour and leader punishment behaviour. Leader reward behaviour provides

employees with compliments, tangible benefits, and deserved special treatment. Leader

punishment behaviour involves the use of reprimands or unfavourable task assignments

and the active withholding of raises, promotions, and other rewards.

Contingent leader reward and punishment behaviour is positively related to employees’

perceptions (e.g., trust in supervisor), attitudes (e.g., job satisfaction and organizational

commitment), and behaviour (e.g., effort, performance, organizational citizenship

behaviour).

Noncontingent punishment behaviour is negatively related to these outcomes. The

manner in which leaders administer rewards and punishment is a critical determinant

of their effectiveness. Leader reward and punishment behaviour is related to employee

attitudes and behaviours because it leads to more positive perceptions of justice and

lower role ambiguity.

Situational Theories of Leadership

The situation refers to the setting in which influence attempts occur. The setting

includes the characteristics of the employees, the nature of the task they are performing,

and characteristics of the organization. According to situational theories of leadership,

the effectiveness of a leader’s style or behaviour depends on the situation. Two

situational theories of leadership that are among the best known and most studied are

Fiedler’s Contingency Theory and House’s Path Goal Theory.

Fiedler’s Contingency Theory

Fiedler’s Contingency Theory suggests that the association between leadership

orientation and group effectiveness is contingent on how favourable the situation is for

the exerting influence. Fiedler has measured leadership orientation by having leaders

describe their Least Preferred Co-Worker (LPC), a current or past co-worker with whom

the leader had a difficult time accomplishing a task. The leader who describes the LPC

relatively favourably (a high LPC score) is considered relationship oriented, while the

leader who describes the LPC unfavourably (a low LPC score) is considered task

oriented. High LPC leaders are motivated to maintain interpersonal relations, while low

LPC leaders are motivated to accomplish the task. Fiedler has argued that the LPC score

reveals a personality trait that reflects the leader’s motivational structure.

Situational Favourableness

Situational favourableness is the “contingency” part of Contingency Theory as it

specifies when a particular LPC orientation should contribute most to group

effectiveness. The factors that affect situational favourableness, in order of importance,

are leader-member relations, task structure, and position power.

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The situation is most favourable for leadership when leader-member relations are good,

the task is structured, and the leader has strong position power. The situation is least

favourable when leader-member relations are poor, the task is unstructured, and the

leader has weak position power.

Fiedler’s model suggests that a task orientation is most effective when the leadership

situation is very favourable or when it is very unfavourable. In conditions of medium

favourability, a relationship orientation will be most effective.

Research Evidence

Although there is reasonable support for Fiedler’s Contingency Theory, several studies

have found some evidence to be contradictory. It now appears that a major source of the

many inconsistent findings regarding Contingency Theory is the small sample sizes that

researchers used in many of the studies. Advances in correcting for this problem

statistically have led recent reviewers to conclude that there is reasonable support for

the theory.

Cognitive Resource Theory

Cognitive Resource Theory (CRT) focuses on the conditions in which a leader’s cognitive

resources (intelligence, expertise, and experience) contribute to effective leadership. The

essence of CRT is that the importance of intelligence for leadership effectiveness

depends on the directiveness of the leader, group support for the leader, and the

stressfulness of the situation. Research on CRT has found that experience predicts

performance in high-stress situations, while intelligence predicts performance in low-

stress situations. Leader intelligence is more strongly related to group performance

when the leader is directive and has the support of the group.

House’s Path-Goal Theory

Path-Goal Theory is concerned with the situations under which various leader

behaviours are most effective.

The Theory

According to Path-Goal Theory, the most important activities of leaders are those that

clarify the paths to various goals of interest to employees. The opportunity to achieve

such goals promotes job satisfaction, leader acceptance, and high effort. To provide job

satisfaction and leader acceptance, leader behaviour must be perceived as either

immediately satisfying or leading to future satisfaction. To promote employee effort,

leaders must make rewards dependent on performance and ensure that employees have

a clear understanding of how these rewards can be achieved. The effective leader forms

a connection between employee goals and organizational goals.

Leader Behaviour

There are four specific kinds of leader behaviour in Path-Goal Theory.

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• Directive behaviour. Directive behaviour is essentially the same as initiating structure.

• Supportive behaviour. Supportive behaviour is essentially the same as consideration.

• Participative behaviour. Participative leaders consult with employees about work- related matters and consider their opinions.

• Achievement-oriented behaviour. These leaders encourage employees to exert high effort and strive for a high level of goal accomplishment.

Situational Factors

The impact of leader behaviour on employee satisfaction, effort, and acceptance of the

leader depends on employee characteristics and the work environment. Different types

of employees need or prefer different forms of leadership.

For example, employees who are high need achievers should work well under

achievement-oriented leadership. The effectiveness of leadership behaviour also

depends on the particular work environment.

For example, when tasks are clear and routine, employees will perceive directive

leadership as redundant and unnecessary. When tasks are challenging but ambiguous,

employees should appreciate both directive and participative leadership. Frustrating,

dissatisfying jobs should increase employee appreciation of supportive behaviour. Thus,

effective leadership should take advantage of the motivating and satisfying aspects of

jobs while offsetting or compensating for those job aspects that demotivate or dissatisfy.

Research Evidence

In general, there is some research support for the situational propositions of the theory.

Supportive or considerate leader behaviour is most beneficial in supervising routine,

frustrating, or dissatisfying jobs. Directive or structuring leader behaviour is most

effective on ambiguous, less structured jobs. As well, the theory is more effective in

predicting employee job satisfaction and acceptance of the leader than in predicting

employee performance.

Participative Leadership: Involving Employees in Decisions

An important topic of leadership is participative leadership.

What Is Participation?

Participative leadership means involving employees in making work-related decisions.

Participation might range from obtaining employee opinions before making the

decisions to allowing employees to make their own decisions within agreed-upon limits.

Participation can involve individual employees or a group of employees. The choice of a

participation strategy should be tailored to specific situations.

Potential Advantages of Participative Leadership

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Participation can be a useful leadership technique for three reasons.

1. Motivation. Participation increases the motivation of employees. Participation allows them to contribute to the establishment of work goals and to decide how

these goals can be accomplished. Also, participation may increase intrinsic

motivation by enriching employees’ jobs.

2. Quality. Participation leads to higher quality decisions than the leader could make alone, particularly when employees have special knowledge to contribute to

the decision. Participation empowers employees to take direct action to solve

problems without checking every detail with the boss and gives employees the

authority, opportunity, and motivation to take initiative and solve problems.

3. Acceptance. Participation increases employees’ acceptance of decisions, especially in issues of fairness.

Potential Problems of Participative Leadership Participation has some potential

difficulties.

• Time and Energy. Participation requires specific behaviours from the leader and these behaviours use time and energy. Participation is not an appropriate

strategy when quick decisions have to be made.

• Loss of Power. Some leaders feel that a participative style will reduce their power and influence.

• Lack of Receptivity or Knowledge. Participation may fail because employees are not receptive to participation or lack the knowledge to contribute effectively to

decisions.

Vroom and Jago’s Situational Model of Participation

The Vroom and Jago Model attempts to specify when participation should be used and

to what extent it should be used. Vroom and Jago recognize that various degrees of

participation can be exhibited by a leader, ranging from “do it yourself” to “accept group

decision.” The most effective tactic depends on factors such as the demand for decision

quality, knowledge possessed by the leader and the group, the importance of employee

commitment, and the potential for conflict.

This model takes into account various degrees of participation that can be exhibited by

the leader including autocratic, consultative, and group consensus. The most effective

strategy depends on the situation or problem at hand. In general, the leader’s goal

should be to make high-quality decisions to which employees will be adequately

committed without undue delay. To do this he or she must consider a number of

questions in a decision tree. By taking a problem through the decision tree, the leader

can determine the correct degree of participation for the problem solving situation..

Research Evidence. Following the Vroom and Jago model prescriptions is more likely to

lead to successful managerial decisions than unsuccessful decisions. The model has been

used frequently in management development seminars. In general, employees who

participate in job-related decisions are more satisfied than those who do not. Thus, most

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workers seem to prefer a participative work environment. However, the effects of

participation on productivity are still open to question. Participation should work best

when employees feel favourably toward it, when they are intelligent and knowledgeable

about the issue at hand, and when the task is complex enough to make participation

useful. Like any other leadership strategy, the usefulness of participation depends on

the constraints of the situation.

Leader-Member Exchange (LMX) Theory

Leader Member Exchange or LMX Theory is a theory of leadership that focuses on the

quality of the relationship that develops between a leader and an employee. Unlike other

theories of leadership that focus on leader characteristics or the situation, the focus of

LMX theory is the relationship between a leader and an employee.

The basic idea is that the relationship between a leader and his or her employees will

differ in terms of the quality of the relationship. High quality relationships or high LMX

involve a high degree of mutual influence and obligation as well as trust, loyalty, and

respect between a leader and an employee. Low-quality relationships or low LMX is

characterized by low trust, respect, obligation, and mutual support.

Research Evidence. Research has found that the quality of LMX is related to employee

job performance, overall satisfaction, satisfaction with supervision, commitment, role

conflict, role clarity, and turnover intentions. Higher quality LMX relationships have

positive consequences for leaders, employees, work units, and organizations.

Transactional and Transformational Leadership

Transactional leadership is leadership that is based on a fairly straightforward exchange

between the leader and the followers—employees perform well, and the leader rewards

them; the leader uses a participatory style, and the employees come up with good ideas.

Transactional leadership involves contingent reward behaviour and management by

exception. Management by exception is the degree to which the leader takes corrective

action on the basis of results of leader–follower transactions. They monitor follower

behaviour, anticipate problems, and take corrective actions before the behaviour creates

serious problems.

Transformational leadership involves providing followers with a new vision that instills

true commitment. Transformational leaders change the beliefs and attitudes of followers

to correspond to a new vision (for a project, department, or organization), and motivates

them to achieve performance beyond expectations.

Bernard Bass notes four qualities of transformational leaders: Intellectual stimulation,

individualized consideration, inspirational motivation, and charisma.

Intellectual Stimulation

This contributes in part to the “new vision” aspect of transformational leadership.

People are stimulated to think about problems, issues, and strategies in new ways.

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Individualized Consideration

This involves treating employees as distinct individuals, indicating concern for their

personal development, and serving as a mentor when appropriate. The emphasis is a

one-on-one attempt to meet the needs of the individual in question in the context of the

overall goal or mission.

Inspirational Motivation

This involves the communication of visions that are appealing and inspiring to followers

and stimulates enthusiasm, challenges followers with high standards, communicates

optimism about future goal attainment, and provides meaning for the task at hand.

Charisma

Charisma is by far the most important, aspect of transformational leadership. Charisma

is a term stemming from a Greek word meaning favoured or gifted. Charismatic leaders

have personal qualities that give them the potential to have extraordinary influence over

others. They tend to command strong loyalty and devotion from followers, and this, in

turn, inspires enthusiastic dedication and effort dedicated toward the leader’s chosen

mission. Charisma provides the emotional aspect of transformational leadership. Other

charismatic characteristics include self-confidence and dominance; strong conviction in

their own beliefs; high expectations for follower performance; ideological or moral

goals; and articulate followers’ repressed feelings. These factors work together to give

charismatics their extraordinary potential for influence.

Charismatic leadership has been found to be strongly related to follower satisfaction and

leadership effectiveness. Although CEOs who are perceived to be more charismatic tend

to be perceived as more effective, only one study has found charismatic leadership to be

directly related to firm performance and two studies found a relationship, but only when

the environment was perceived to be uncertain. However, several studies have found

that CEO transformational leadership is positively related to organizational

performance. Charisma also has a dark side when charismatic leaders abuse their strong

influence over others for purely personal reasons.

Research Evidence. Transformational leadership has been found to be strongly related

to follower motivation and satisfaction (satisfaction with leader and job satisfaction),

leader performance, leader effectiveness, and group and organization performance. It

appears that transformational behaviours are instrumental in developing high-quality

LMX relationships, identification with one’s work unit, self-efficacy, and for enhancing

employees’ perceptions of the five core job characteristics of the job characteristics

model. Research supports the contention that the best leaders are both transformational

and transactional. However, transformational leadership is especially effective during

times of change and for obtaining employees’ commitment to a change.

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Ethical and Authentic Leadership

Ethical leadership involves the demonstration of normatively appropriate conduct (e.g.,

openness and honesty) through personal actions and interpersonal relationships, and

the promotion of such conduct to followers through two-way communication,

reinforcement, and decision making. Ethical leaders model what is deemed to be

normatively appropriate behaviour, make ethics salient in the workplace, and draw

attention to it by engaging in explicit ethics-related communications and by setting

ethical standards. They reward ethical conduct and discipline those who don’t follow

ethical standards and consider the ethical consequences of their decisions. They make

principled and fair decisions that can be observed and emulated by others.

To develop an ethical culture and workplace, leaders must have a strong commitment to

ethics and raise awareness of and reinforce the importance of ethics. This involves:

• Communicate a clear and consistent positive ethics message from the top

• Create and embrace opportunities for everyone in the organization to communicate positive ethics, values, and practices.

• Ensure consequences for ethical and unethical conduct.

Research Evidence. Ethical leadership has been found to be positively associated with

employee perceptions of honesty, fairness, and effectiveness and with less

counterproductive behaviour. Employees of ethical leaders are more satisfied with their

supervisor, more willing to devote extra effort to one’s job, and more willing to report

problems to management. The extent to which ethics is an important part of an

organization’s culture is influenced by the ethics and moral development of the leader.

The ethical leadership of immediate supervisors is likely to have the greatest effect on

employees.

Authentic Leadership

Authentic leadership is a positive form of leadership that involves being true to oneself.

Authentic leaders know and act upon their true values, beliefs, and strengths and they

help others do the same. Their conduct and behaviour is guided by their internal values.

Authentic leadership consists of four related but distinct dimensions:

• Self-awareness. An understanding of one’s strengths and weaknesses and an awareness of one’s impact on others.

• Relational transparency. The presenting of one’s true or authentic self to others and the sharing of information and expressions of one’s true thoughts and

feelings.

• Balanced processing. The objective analysis of relevant information before making a decision and consideration of views that challenge one’s own position.

• Internalized moral perspective. The internal moral standards and values that guide one’s behaviour and decision making.

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Research Evidence. Followers of authentic leaders report higher organizational

citizenship behaviour, organizational commitment, job satisfaction, and satisfaction

with their supervisor, and that they have higher job performance. Authentic leadership

promotes trust and respect towards organizational leaders.

Source: 2011 Pearson Canada Inc.