Leadership

Different leaders behave in different ways style, need, situation

WHO IS A LEADER?
WEBSTER DICTIONARY MEANING:
SOMEONE WHO ACTS AS A GUIDE. SOMEONE WHO HAS A COMMANDING AUTHORITY &INFLUENCE. SOMEONE WHO HOLDS FIRST PLACE.

LEADERSHIP
LEADERSHIP IS THE ABILITY TO INFLUENCE A GROUP TOWARD THE ACHIEVEMENT OF GOALS. IT IS A GROUP PHENOMENON, THERE ARE NO LEADERS WITHOUT FOLLOWERS

JOHN FRANCIS WELCH JUNIOR

HAD A SLIGHT STUTTER DURING CHILDHOOD
GRADUATED IN 1957 AS A CHEMICAL ENGINEER FROM THE UNIVERSITY OF MASSACHUSETTS. TWICE DIVORCED UNDERWENT TRIPLE BYPASS SURGERY IN 1995

JOHN F WELCH AND GE

JOINED GE IN 1960 AS A JUNIOR ENGINEER BECAME A VICE PRESIDENT IN 1972 BECAME THE CEO IN 1981 REDUCED BUREAUCRACY IMMEDIATELY NEUTRON JACK REPUTATION FOR BRUTAL CANDOR DESTROYED MANAGEMENT HIERARCHY HUNDREDS OF ACQUISITIONS MODERNISED GE BY SHIFTING EMPHASIS TO SERVICES NUMBER ONE OR NUMBER TWO SIX SIGMA NAMED MANAGER OF THE CENTURY IN 1999 RETIRED IN 2001.

Session Objectives:
Understand the concept of leadership To identify the key elements of leadership To outline the major leadership theories To understand Trait theory of leadership To understand the behavioral theories of leadership To understand the situational or contingency approach to leadership To analyze Fielder's contingency approach To analyze path-goal theory of leadership To understand Vroom-Yetton Model of leadership To understand Hersey and Blanchard's situational leadership model To understand transformational leadership theory

Definitions of Leadership
Harold Koontz and Heinz Weihrich define leadership as "the art or process of influencing people so that they will strive willingly and enthusiastically towards the achievement of group goals. In other words leadership is the ability to persuade others to seek defined objectives enthusiastically."

The important features of leadership are as follows: Process whereby one individual exerts influence over others. Leadership is the use of non-coercive influence to shape the group's or organizational goals. It involves authority and responsibility in deciding the way ahead and being held responsible for. Moral leadership concerns values and requires that followers be given enough knowledge of alternatives, to make intelligent choices.

Key Elements of Leadership

The following are four important elements of leadership Power: It is the control a person possesses and can exercise on others. In other words, power is the capacity to affect the behavior of others. The six types of power are coercive, reward, legitimate, expert, referent and informative. Fundamental understanding of people: A good leader understands the individual needs, and motivates him/her in achieving goals. Ability to inspire followers: The ability to inspire followers to apply their full capability to a task. While the use of motivators is centred on subordinates and their needs, inspiration also comes from group heads. Style of the leader and the work culture: The strength of motivation depends on expectancies, perceived rewards, the tasks to be done and other factors that are a part of an environment or organizational culture.

Leadership versus Management

Management
Promotes stability, order and problem solving within existing organizational structure and systems

Leadership
Promotes vision, creativity, and change

Takes care of where you are

Takes you to a new place

Leadership versus Management

Manager
Creating an agenda- Planning and Budgeting. Establishing schedules of activities and timetables. Involving people- Recruitment, selection and staffing the organization structure. Executing plansSetting standards, control and feedback and monitoring Outcome- Goal achievement, good performance, satisfied stakeholders.

Leader
Establishing directionDeveloping a vision of the future and strategies needed to achieve the vision. Aligning peopleCommunicating the organizations goals to employees and identify them with individual goals. Motivating and inspiringEnergizing people to overcoming all barriers. Producing change- Dramatic changes which change the face of the organization.

Leader versus Manager Qualities

Leader Qualities
SOUL Visionary Passionate Creative Flexible Inspiring Innovative Courageous Imaginative Experimental Initiates change Personal power

Manager Qualities
MIND Rational Consulting Persistent Problem solving Tough-minded Analytical Structured Deliberate Authoritative Stabilizing Position power

Leadership Theories
The four broad categories of leadership theories are: Trait theory Behavioral theory Situational theory Transformational theory

Trait theory
Traits = personal characteristics During the early 90's, studies were conducted for identifying the leadership traits (characteristics that distinguish leaders from non-leaders). This theory assumed that leaders share certain inborn personality traits. Traits - early efforts to understand leadership success focused on leaders personal characteristics Great man approach - early research focused on leaders who had achieved a level of greatness
Find out what made them great Find people with same traits

Trait theory
Although, there was no common agreement on these traits, researchers identified certain leadership traits: Physical characteristics (height and appearance) Skills and ability (intelligence) Personality characteristics (extrovert) Social factors (interpersonal factors) This study on leadership trait has not been that successful in explaining leadership, since not all leaders possess all the traits, and many non-leaders may possess most of them. Moreover the theory gives no indication of the extent of traits a person should have.

Behavioral theory
Researchers conducted certain studies to identify behavioral aspects (delegation of work, motivation, communication style) of effective leaders. Some of the studies conducted were: Iowa and Michigan studies Ohio studies Likert's four system of management Managerial grid.

Iowa and Michigan studies

Iowa and Michigan studies were conducted by Kurt Lewin and his collegue to identify the best leadership styles. They concentrated on three styles: democratic (participation and delegation), autocratic (dictating and centralized) and laissez-faire styles (group freedom in decision making). Their research findings were: Followers preferred managers who adopted a democratic style, rather than an authoritarian or a laissez-faire style. Many managers did not adopt a democratic approach Continuum of leadership behavior (boss-centric to subordinatecentric) stated that, managers adopted boss-centric approach in the short-run, and adopted subordinate-centric approach in the long-run, to give an opportunity to employees to participate in the decision making process.

Ohio studies
These studies were based on a questionnaire that was administered to "followers". This research, narrowed down the description of leader's behavior, to the dimensions of, 'initiating structure' and 'consideration'. In this context, to initiate structure, would mean that leaders are engaged in behaviors, that help subordinates to understand how things are to be done.

In other words, they provide the structure for work activities. Consideration, in contrast, refers to those behaviors that show consideration for subordinates; i.e., those aimed at building human relationships.

Likert's four systems of management

The four styles laid-down by Likert's are as follows: Exploitive-authoritative exhibits dictatorial leadership behavior. Decisions are taken by the managers, with little or no involvement of subordinates. Also, managers use coercive power to force the employees to work in a desired manner. Benevolent-authoritative approach enables managers to delegate decision-making to subordinates. It considers the subordinates' opinions and ideas, and implements them. Motivation in the form of rewards, and coercion in the form of punishment are common activities. In consultative approach, managers seek advices and suggestions from subordinates; but the final decision is made by the top management. In participative leadership, subordinates are encouraged to participate in decision making and to make managerial decisions. Managers have complete trust and confidence in their subordinates.

Managerial Grid/Leadership Grid

The dimensions identified at the University of Michigan, provided the basis for the development of the managerial grid model. This model was developed by Robert Blake and Jane Mouton. This managerial grid identifies five different leadership styles that represent different combinations between concern for people and concern for production on y and x axis respectively. Managers who score high on both these dimensions, are considered to be the best performers.

Managerial /Leadership Grid

The five leadership styles of the above managerial grid are:
The impoverished style is located at the lower left-hand corner of the grid, point (1, 1). It is characterized by a low concern for both people and production. The primary objective of the impoverished style, is to rely on the previous practice to keep the organization going. The country club style is located at the upper left-hand corner of the grid, point (1, 9). It is characterized by a high concern for people and a low concern for production. The primary objective of the country club style is to create a secure and comfortable atmosphere and hope that subordinates will respond positively. The produce or perish style is located at the lower right-hand corner of the grid, point (9,1). A high concern for production and a low concern for people characterize this position. The primary objective of the produce or perish style, is to achieve the organization's goals. This style is task oriented and stresses on the quality of production over the wishes of the subordinates. The middle-of-the-road style is located at the middle of the grid, point (5, 5). A balance between workers' needs and the organization's productivity goals are the characteristics of this style. The primary objective of the middle-of-the-road style is to maintain the employee morale at a level that is enough to get the organization's work done. The team style is located at the upper right-hand of the grid, point (9, 9). It is characterized by a high concern for both people and production. The primary objective of the team style, is to establish cohesion and foster a feeling of commitment among workers. Team managers believe that concern for people and tasks are compatible.

The Leadership Grid

High
Country Club Management 1 ,9 Thoughtful attention to the needs of people for satisfying relationships leads to a comfortable, friendly organization atmosphere and work tempo. Team Management 9,9 Work accomplishment is from committed people; interdependence through a common stake in organization purpose leads to relationships of trust and respect.

Concern for People

Middle-of-the-Road Management 5,5 Adequate organization performance is possible through balancing the necessity to get out work with maintaining morale of people at a satisfactory level.
Impoverished Management Exertion of minimum effort to get required work done is appropriate to sustain organization membership. 1,1 Authority-Compliance (task) 9,1 Efficiency in operations results from arranging conditions of work in such a way that human elements interfere to a minimum degree.

Low

Concern for Production Low High

Situational or contingency theory

These theories are important for practicing managers who must consider the situation when they design an environment for performance. The contingency theory focuses on the following factors: Task requirements Peer's expectations and behavior Employee's characteristics, expectations and behavior Organizational culture and politics The popular situational theories of leadership are Fiedler's theory Path-goal theory Vroom theory and Hersey and Blanchard's theory.

Fiedler's contingency approach to leadership

Fred E. Fiedler's contingency theory postulates that, there is no best way for managers to lead effectively. Different situations will create different leadership style requirements, for a manager. The solution to a managerial problem, is contingent on the factors that impinge on the situation. For example: in a highly routinized (mechanistic) environment, where repetitive tasks are the norm, a certain leadership style may result in best performance. The same leadership style may not work in a dynamic environment. Fiedler looked at three possible situations that could define the conditions for a managerial task: Position power: How much authority does the manager possess? The task structure: Is the job highly structured, fairly unstructured, or somewhere in between? Leader member relations: How well do the manager and the employees get along?

Fiedlers Classification of Situation Favorableness

Leaders needs to know
1.
2.

Whether they have a relationship- or task-oriented style

Should diagnose the situation and determine the favorableness of the following three areas

Path goal theory

The path-goal theory developed by Robert House and Terence Mitchell, is based on the expectancy theory of motivation. The manager's job is viewed as coaching or guiding the workers to choose the best possible paths for reaching their goals. "Best" is judged by the accompanying achievements in the process of achieving organizational goals. It is based on the precepts of goal setting theory, and holds that leaders will have to engage in different types of leadership behavior, depending on the nature and demands of the particular situation. It is also the leader's job to assist his followers in the attainment of goals, and to provide direction and support that are needed to ensure that, their goals are compatible with the organization's goals.

Path goal theory

The four different leadership styles suggested by the path goal theory are: Instrumental Leadership: The leader gives specific guidance regarding performance to subordinates. Supportive Leadership: The leader is friendly and shows concern for the subordinates. Participative Leadership: The leader consults with subordinates, and considers their suggestions. Achievement-oriented Leadership: The leader sets high goals, and expects subordinates to achieve a high-level of performance. Apart from the above leadership styles, path goal theory suggests two situational factors for effective leadership. Characteristics of subordinates Knowledge, skill, education, work experience etc. Work environment Working conditions, employee benefits, peer groups etc.

Path-Goal Situations & Preferred Leader Behavior

Path goal theory

Vroom-Yetton Model
Victor Vroom and Philip Yetton, developed a model of situational leadership in order to help managers to decide when and to what extent they should involve employees in solving a particular problem. The five leadership styles laid-down by Vroom are as follows: Autocratic I: Leader uses information available for decision making and problem solving activities. Autocratic II: Leader obtains information from subordinates and makes decisions. Consultative I: Leaders share their problems with subordinates. Later, they collect subordinates' suggestions and make decisions. Consultative II: Leaders share their problems, with subordinates as a group, and then make decisions Group participation: Leaders share their problems with subordinates as a group and then make decisions. Together they generate and evaluate the alternatives, and attempt to reach a consensus on solution.

Hersey and Blanchard's situational leadership model

The Hersey- Blanchard theory is based on the amount of direction (task behavior), and the amount of socio-emotional support (relationship behavior), that a leader must provide in the given situation, and the "level of maturity" of the followers. It also includes telling people what to do, how to do it, when to do it, where to do it, and who's to do it.

Hersey and Blanchard's situational leadership model

The following four leadership styles have been outlined by Hersey and Blanchard. High task/low relationship behavior is referred to as "telling." The leader gives clear instructions and specific directions to his subordinates. Telling style, is best matched with a low follower readiness level. High task/high relationship behavior is referred to as "selling". The leader encourages two-way communication, and helps to build confidence and motivation levels, on the part of the employee. The leader continues to maintain responsibility, and controls in decision making. Selling style is best matched, with a moderate follower readiness level. High relationship/low task behavior is referred to as "participating". With this style, the leader and his followers share decision making, and are no longer in need or have any expectations of directive style of leadership. Participating style is best matched, with a moderate follower readiness level. Low relationship/low task behavior is labeled "delegating." This style is appropriate for leaders, whose followers are ready to accomplish a particular task and are both competent and motivated, to take full responsibility. Delegating style is best matched with a high follower readiness level.

Transformational leadership Theory

According to Bernard M Bass, a transformational leader displays charismatic leadership, inspirational leadership intellectual simulation and a feeling that each individual follower counts.

Leaders who do this in a rapidly changing or crises-laden situation are transformational leaders.

Transformational leadership Theory

Transformational theory is a blend of behavioral theories and trait theories. Transactional leaders intend to direct the established goals by clarifying role and task requirements. They also appeal to followers' ideals and moral values and inspire them to think about problems in new or different ways. However, transformational leaders, who are charismatic and visionary, can inspire followers to transcend their own selfinterest for the good of the organization. John F Welch is considered to be a transformational leader. He transformed GE into the biggest industrial conglomerate in the world. He pressured GE workers in plants and offices around the globe to drive themselves to meet ever-more-demanding efficiency standards. He spent more time on people issues than on other things.

Summary
Leadership definition Key elements of leadership power, understanding, ability to inspire others and organizational climate. Leadership theories trait theory, behavioral theory. Situational or contingency theory of leadershipFiedler's contingency approach to leadership, Path-goal theory of leadership, Vroom-Yetton Model of leadership, Hersey and Blanchard's situational leadership Model. Transformational Leadership theory Characteristics of a transformational leader

Leadership and Power

Legitimate power- Power granted through the organizational hierarchy. Formal in nature. All managers have a legitimate power over their subordinates. But merely legitimate power does not make a manager a leader.Other word for legitimate power is authority. Reward power- Refers to the power to give or withhold rewards. Rewards like salary hikes, promotions, recognition, praise.Greater the rewards a manager holds and greater the importance of those for the employees more will be the managers reward power.

Coercive power- The power to force compliance by means of psychological, emotional and physical threat. Coercion is limited to disciplinary actions, fines, lay offs, penalties, written reprimands, firing etc. More the coercive power less the leader respect.
Referent power- Referent power is abstract in nature.It is based on identification, imitation, loyalty and charisma.More the referent power more the status of a leader. Expert power- Derived from information and expertise. The more important the information and lesser the access that people have to it the more the expert power.

Charismatic Leadership
Assumes charisma as an individual trait of a leader. A form of aura and attraction which inspires support and acceptance. All else being equal someone with more of charismatic personality is likely to exert more influence on followers. Proposed by Robert House in 1977.

Charismatic leaders have lot of self confidence, firm conviction in their beliefs and ideals and the strong influence to align the followers goals with organizational goals.

Transformational Leadership
Leadership that goes beyond ordinary expectations by transmitting a sense of mission, stimulating learning experiences and inspiring new ways of thinking. Goes beyond the exchange inducements of desired performance. Increasingly becoming important in todays turbulent business environment. Focused on bringing about transformational changes in organization by building vision, securing commitment and empowering people.

Eg- Carly Fiorina of HP. Restructured the entire firm.