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PRINCIPLES & PRACTICES Part 4 Leadership Challenges in the 21st Century

OF MANAGEMENT
Topic
7
Leadership

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Puan Sharizan Sharkawi

 LEARNING OBJECTIVES
When you have finished studying this chapter, you
should be able to:
1. Define leadership and explain its significance to an
organization.
2. Differentiate among the different leader-centered
approaches to leadership.
3. Describe the various types of power leaders use.
4. Explain what is meant by self-leadership and
leadership substitutes under follower-centered
approach.
5. Describe interactive approaches (Situational model/
Empowerment/ Transformational Leadership)
6. Current perspective on leadership.
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Leadership Significance
• Leadership is:
 A social influence process.
 A responsibility and a process; it’s not a position, title,
or privilege.
 An observable, understandable, learnable set of skills
and practices available to everyone, anywhere in the
organization.
 The indirect ability to influence people by inspiring
them to pursue goals for the benefit of the
organization.

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Leadership and Vision
• Leadership involves:
 Creating a vision of the future.
 Devising strategy for achieve that vision.
 Communicating the vision so that everyone
understands and believes in it.

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 Figure 12.1 Three Categories of Leader Approaches

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Leader-Centered Approaches
• Leadership Traits and Skills Focus
 The assumption that some people are born with
certain physical characteristics, aspects of
personality, and aptitudes that make them successful
leaders.
 Physical characteristics: height and appearance
 Personality: self-esteem, dominance and emotional
stability
 Aptitudes: general intelligence, verbal fluency and
creativity

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Traits of Successful Leaders
• Drive
 Achievement, sense of responsibility, ambition,
energy, tenacity and initiative.
• Motivation
 Especially power.
• Honesty and integrity
• Self confidence
 Persuasive, diplomatic and socially skilled.
• Conceptual ability
• Business knowledge

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 Table 12.1 The 25 Most Influential Leaders of Our Times

To celebrate the 25th anniversary of the Nightly Business Report (NBR), Wharton and NBR worked
to identify the 25 most influential business leaders of the past 25 years. Their goal was to find
business leaders who created new and profitable ideas; affected political, civic or social change
through achievement in the business/economic world; created new business opportunities or more
fully exploited existing ones; caused or influenced dramatic change in a company or industry; and/or
inspired and transformed others.

1. Mary Kay Ash, founder of Mary Kay Cosmetics
2. Jeff Bezos, CEO of Amazon.com
3. John Bogle, founder of The Vanguard Group
4. Richard Branson, CEO of Virgin Group
5. Warren Buffett, CEO of Berkshire Hathaway
6. James Burke, former CEO of Johnson & Johnson
7. Michael Dell, CEO of Dell Computers
8. Peter Drucker, educator and author
9. Bill Gates, chair of Microsoft
10. William George, former CEO of Medtronics
11. Louis Gerstner, former CEO of IBM
12. Alan Greenspan, chair, U.S. Federal Reserve
13. Andy Grove, former chair of Intel
14. Lee Iacocca, former CEO of Chrysler
15. Steven Jobs, CEO of Apple Computers
16. Herb Kelleher, CEO of Southwest Airlines
17. Peter Lynch, former manager of Fidelity’s Magellan
Fund
18. Charles Schwab, founder of Charles Schwab Inc.
19. Frederick Smith, CEO of Federal Express
20. George Soros, founder and chair of Open Society
Institute
21. Ted Turner, founder of CNN
22. Sam Walton, founder of Wal-Mart
23. Jack Welch, former CEO of General Electric
24. Oprah Winfrey, chair of the Harpo group of
companies
25. Mohammed Yunus, founder of Grameen Bank.

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Leader-Centered Approaches (cont’d)
• Leadership Behavior Focus
 Examines what effective leaders do rather than what
effective leaders are.
 Defines a leader’s effectiveness based on two
orientations:
 Task orientation
– Setting performance goals, planning and scheduling work,
coordinating activities, giving directions, setting standards,
providing resources, and supervising performance.
 Relations orientation
– Behavior that shows empathy for concerns and feelings,
supportive of needs, showing trust, and similar attributes.

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Leadership Behavior Conclusions
• Effective leaders use a range of behaviors.
• Leadership behaviors can be learned.
• Effective leaders have the ability to change and
adapt to organizational settings in which they
manage.
• It is still not obvious which behaviors are most
effective because numerous other factors can
influence performance and success.

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Leader-Centered Approaches (cont’d)
• Leadership Power Focus
 Power: the ability to use human, informational, or
material resources to get something done—to get
results.
 Authority: the officially (organizationally) sanctioned
right to get something done.

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Types of Position Power
• Legitimate power
 Stems from formal authority.
• Coercive power
 The power to discipline, punish
and withhold rewards.
• Reward power
 Control over tangible benefits.
• Information power
 Control over information.

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Types of Personal Power
• Expert power
 The power influence another person because of
expert knowledge and competence.
• Referent power
 The ability to influence others
based on personal liking,
charisma and reputation.

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Power Orientation
• Personalized Power Orientation
 Associated with a strong need for esteem and status;
power is often used impulsively.
• Socialized Power Orientation
 The use of power for the benefit of others to make
subordinates feel strong and responsible.

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Follower-Centered Approaches
• Self-leadership (Followership) Focus
 A paradigm founded on creating an organization of
leaders who are ready to lead themselves.
 Requires each employee to be accountable for his or
her own behavior.
 Employees feel valued by the company and are loyal.

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 Figure 12.2 Essential Strategies for Self-Leadership

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Characteristics of Self-Leaders
• The capacity to motivate themselves and stay focused
on tasks.
• Integrity that demands both loyalty to the organization
and the willingness to act according to beliefs.
• Understanding of the organization and their contributions
to it.
• Willingness to take the initiative to deal with problems.
• Versatility, skillfulness and flexibility to adapt to a
changing environment.
• Responsibility for their careers, actions and
development.

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 Leadership Substitutes
• Variables such as individual, task, and
organizational characteristics that tend to outweigh
the leader’s ability to affect subordinate satisfaction
and performance.
• Also known as neutralizers:
 A condition that counteracts leader behavior and/or
prevents the leader from having an effect on a follower or
a specific situation.

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 Figure 12.3 Leadership Substitutes

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Interactive Approaches
• Another method of examining leadership
effectiveness is to look at how leaders interact
with their followers.
• Interactive Approaches:
 Situational leadership model
 Empowerment
 Transformational leadership

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Interactive Approaches (cont’d)
• Situational Leadership Model
 Examines the interaction between leadership
behavior, the situation, and the follower’s readiness.
 Leadership behavior: based on the concern for the
task and the concern for the employee. To
maximize employee performance, leadership
behavior must use a style appropriate to
employee’s development or readiness.
 Readiness: the extent to which a subordinate
possesses the ability and willingness to complete a
specific task.

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Interactive Approaches (cont’d)
• Styles of Situational Leadership Behavior
 Telling style: the leader provides specific instructions
and closely supervises performance.
 Selling style: the leader explains decisions and
provides opportunities for clarification.
 Participating style: the leader shares ideas and
maintains two-way communication to encourage and
support the skills subordinates have developed.
 Delegating style: the leader provides subordinates
with few task or relations behaviors.

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Interactive Approaches (cont’d)
• Empowerment
 The interaction of the leader giving away or sharing
power with those who use it to become involved and
committed to independent, high-quality performance.
 Successful empowerment means that everyone has
been convinced that he or she makes a difference to
the success of the organization.

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Interactive Approaches (cont’d)
• Transformational Leadership
 Is a leader’s ability to influence employees to achieve
more than was originally expected, or thought
possible.
 Generates feelings of trust, admiration, loyalty and
respect from followers through:
 Idealized influence
 Inspirational motivation
 Intellectual stimulation
 Individualized considerations

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 Table 12.2 Primary Dimensions of Transformational Leadership

Dimension Leader’s Specific Behavior Follower’s Behavior

Individualized Acts as mentor; is attentive to Is motivated; feels valued.

consideration achievement and growth needs.

Intellectual Promotes innovation and creativity; Is encouraged to be novel

stimulation reframes problems. and try new approaches.

Inspirational Provides meaning and challenge Is motivated by team spirit;

motivation through prosocial, collective action. enthusiastic; optimistic.

Idealized Shares risks; is considerate of Shows admiration; respect;

influence others over own needs; is ethical trust.
and moral.

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Current Perspectives on Leadership
• Emotional Intelligence (EI)
 The capacity to effectively manage ourselves and our
relationships.
 Components of EI:
 Personal competence: the ability to understand
your own feelings, emotions, and their impact and
to understand your strengths and weaknesses
(based on the concept of self-awareness).
 Social competence: the ability to understand what
others are feeling (the concept of social
awareness) and having the skills to work effectively
with others (based on social skill).

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 Table 12.3 The Emotional Intelligence Competency Framework

Personal Competence Social Competence

Self-management Social awareness
Self-control Empathy and insight
Trustworthiness Political awareness
Conscientiousness Service orientation
Adaptability Social skill
Achievement orientation Developing others
Initiative Visionary leadership
Self-awareness Influence
Emotional self-awareness Communication
Accurate self-assessment Change catalyst
Self-confidence Conflict management
Building bonds
Teamwork and collaboration
Synergy in teamwork
Sources: D. Goleman, R. Boyatzis, and A. McKee, Primal Leadership: Realizing the Power of Emotional Intelligence (Boston: Harvard
Business School Press, 2003); D. Goleman “Leadership That Gets Results,” Harvard Business Review (March/April 2000): 78–90.
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Current Perspectives on Leadership (cont’d)
• Gender and Leadership
 Female leaders are more empathic, persuasive,
better listeners and more willing to consider others’
points of view.
 Male leaders show higher levels of resilience and
thoroughness than women leaders.
 Both men and women executives believe that women
have to be exceptional to succeed in business.
 Women leaders feel they must struggle harder than
men to succeed.
 Women are more likely to use behaviors that are
associated with transformational leadership.

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Current Perspectives on Leadership (cont’d)
• Leaders of the future will:
 Be challenged to manage relationships with a
diversity of partners, stakeholders, and other
businesses in the larger context of differing cultures.
 Need to align their leadership vision, core values, and
everyday actions to produce desired results in all
aspects of their lives.
 Promote leadership development and encourage
workers to assume leadership roles.
 Be innovative and creative, a continuous learner,
have values (especially integrity), and in charge of
their own careers.

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Implications for Leaders
• Know yourself.
• Be a role model.
• Learn to communicate effectively.
• Know your team and be a team player.
• Be honest with yourself as well as to others.
• Do not avoid risks.
• Believe in yourself.
• Take the offense rather than the defense.
• Know the ways of disagreement and the means of
compromise.
• Be a good follower.

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