LeadershipTopic 10

Dr Hugh Bainbridge

L E A R N I N G O U T L I N E1. Why is leadership important?

Leadership defined Leaders versus managers Arguments for and against the importance of leadership

2. To what extent does trait theory help to explain leadership? Discuss what research has shown about leadership traits

3. What is the contribution of behavioural theories of leadership? Contrast the findings of the behavioural leadership theories

4. How do contingency theories enhance our understanding of what leaders do and why they do it? Fiedler’s theory of leadership Situational leadership theory Leader participation model Path-goal theory

1. Leadership is… “The behaviour of an individual… directing the activities of a group towards a shared goal”

(Hemphill & Coons, 1965, pg. 7) “The influential increment over and above mechanical compliance with the routine directives of

the organisation” (Katz & Kahn, 1978, pg. 528) “Exercised when persons… mobilize… institutional, political, psychological, and other resources

so as to arouse, engage and satisfy the motives of followers” (Burns, 1978, pg. 18) “Realized in the process whereby one or more individual succeed in attempting to frame and

define the reality of others” (Smircich & Morgan, 1982, pg. 258) “The process of influencing the activities of an organized group towards goal achievement”

(Rauch & Behling, 1984, pg. 46) “About articulating visions, embodying values, and creating the environment within which things

can be accomplished” (Richards & Engele, 1986, pg. 206) “A process of giving purpose (meaningful direction) to collective effort, and causing willing effort

to be expended to achieve purpose” (Jacobs & Jaques, 1990, pg. 281) “The ability to step outside the culture… to start evolutionary change processes that are more

adaptive” (Schein, 1992, pg. 2) “The process of making sense of what people are doing together so that people will understand

and be committed” (Drath & Palus, 1994, pg. 4) “The ability of an individual to influence, motivate, and enable others to contribute towards the

effectiveness and success of an organization” (House et al., 1999, pg. 184)

Leaders and managers

Leadership is the process of influencing a group toward the achievement of goals.

Managers Leaders

Are appointed to their position Are appointed or emerge from within a work group

Can influence people only to the extent of the formal authority of their position

Can influence other people and have authority

Do not necessarily have the skills and capabilities to be leaders

Do not necessarily have the skills and capabilities to be managers

Argument for the impact of leadership

What leaders can influence…– The interpretation of external events by employees

– The choice of objectives and strategies to pursue

– The motivation of employees to achieve their objectives

– The mutual trust and motivation of employees

– The organisation and coordination of work activities

– The allocation of resources to activities and objectives

– The development of employee skills and confidence

– The learning and sharing of new knowledge by employees

– The enlistment of support and cooperation from outsiders

– The design of formal structure, programs, and systems

– The shared beliefs and values of employees

Managers views on the importance of leadershipLeadership in practice

Matthew Ayers - Group Director, Strategy & Innovation, Lend Lease– A global property group structured along several business lines: Retail

owning, operating & building, mixed-use urban renewal, public-private partnerships, construction, and project and investment management

Leigh Cowan - CEO, Launch Engineering– 25 years as marketing executive preparing marketing plans for 3M, CSR,

AGL, TNT, King Gee, Federal Publishing, AMA etc.

– “Product launch & marketing advice to vastly increase sales & profits”– Vision: To be recognized as a world-leading consultancy in business

strategy and marketing management

– Mission: To empower organizations with marketing science

The relationship between leadership & cultureLeadership in practice

Sally Anne Lister - General manager, Group Sales & Service support, Commonwealth Bank of Australia (CBA)

– Commonwealth Bank of Australia: One of Australia’s leading providers of integrated financial services including retail banking, premium banking, business banking, institutional banking, funds management, insurance, superannuation, and investment and sharebroking products and services.

– Strengths: Brand, Scale, & Diversified business mix.

– Vision: “To be Australia’s finest financial services organisation through excelling in customer service”

– Group Sales and Service Support division: Responsible for providing leadership support for the implementation of the sales and service tools and processes including sales and service training programs, reporting, Internal Customer Service Measurement, communications, reward and recognition, systems and processes.

High performing leaders (Jack Welch)

Jack Welch. General Electric (1960-2001). CEO (1981-2001)– Through the 1980s, Welch worked to streamline GE, divesting business

and improving the productivity of those which were retained. GE acquired NBC (1986) and during the 1990s, shifted GE’s focus from manufacturing to financial services through numerous acquisitions.

– In 1980, the year before Welch became CEO, GE recorded revenues of roughly $26.8 billion. In 2000, the year before he left, the revenues increased to nearly $130 billion.

– GE went from a market value of $14 billion to one of more than $410 billion at the end of 2004, making it the most valuable and largest company in the world.

Leadership in practice

2. EARLY LEADERSHIP THEORIES

Trait theories (1920s-30s)– Early research that focused on identifying personal characteristics that

differentiated leaders from non-leaders.

Physical characteristics

Personality

Aptitude

Kirkpatrick, S. A., & Locke, E. A. (1991). Leadership: Do traits matter? Academy of Management Executive, 2, 48-60.

– Later research on the leadership process identified 7

traits associated with successful leadership:

Drive, Desire to lead, Self-confidence, Intelligence,

Job-relevant knowledge, Extraversion,

Honesty & integrity

Australian Prime Ministerial views on leadership

John Winston Howard, AC. The 25th Prime Minister of Australia (1996-2007)– Treasurer in the government of Malcolm Fraser 1977-1983. Leader of the

Liberal Party and Coalition Opposition 1985-1989. Re-elected as Leader of the Opposition (1995-2007).

– Led the Liberal-National Coalition to victory at the 1996 federal election. The Howard Government was re-elected in 1998, 2001 and 2004.

– Major issues for the Howard Government included taxation, industrial relations, immigration, the Iraq war, and Aboriginal relations.

– Howard's coalition government was defeated at the 2007 election by the Australian Labor Party led by Kevin Rudd

Leadership in practice

Credibility and trust

Credibility (of a leader)– Assessment of a leader’s honesty, competence, and ability to inspire by

his or her followers

Trust– Belief of followers and others in integrity, character, and ability of leader

– Dimensions of trust: Integrity: Honesty and truthfulness

Competence: Technical and interpersonal knowledge

Consistency: Reliability, predictability, and good judgment

Loyalty: Willingness to protect and save face for a person

Openness: Willingness to share ideas and information freelySchindler, P. L. & Thomas, C. C. (1993). The structure of interpersonal trust in the workplace. Psychological Reports, 73, 563-573.

Behavioural leadership theories University of Iowa Studies (Kurt Lewin)

– 3 leadership styles: Autocratic style: centralized authority, low participation

Democratic style: involvement, high participation, feedback

Laissez faire style: hands-off management

– Research findings:

Ohio State Studies– 2 dimensions of leader behaviour

Initiating structure: the role of the leader in defining his or her role and the roles of group members

Consideration: the leader’s mutual trust and respect for group members’ ideas and feelings.

– Research findings:

Behavioural leadership theories (cont’d) University of Michigan Studies

– Identified two dimensions of leader behaviour Employee oriented: emphasising personal relationships

Production oriented: emphasising task accomplishment

– Research findings:

Managerial grid

3. CONTINGENCY THEORIES OF LEADERSHIP Theories that seek to define leadership style and answer: ‘if’

this situation, ‘then’ this is the best style to use. Contingency theories

– Fiedler model

– Hersey-Blanchard situational theory

– Leader-participation model (e.g., time driven model)

– Path-goal theory

?

Leader Outcome

Contingency theories of leadership

a) The Fiedler Model– Proposes that effective group performance depends upon the proper

match between the leader’s style of interacting with followers and the degree to which the situation allows the leader to control and influence

A key factor in leadership success was an individual’s basic leadership style, which he classified as either task-oriented or relationship oriented.

– Task-oriented

– Relationship oriented

Least-preferred co-worker (LPC) questionnaire

Contingency theories (cont’d)

Fiedler, F. E. (1982). A theory of leadership effectiveness. New York, McGraw Hill.

a) The Fiedler Model (cont’d) Situational factors in matching leader to the situation:

– 1. Leader-member relations - Degree of confidence, trust + respect subordinates have in their leader.

– 2. Task structure - Degree that job assignments are procedurised– 3. Position power - Influence leader has over power variables such as

hiring & firing.

Findings of Fieldler model

Contingency theories (cont’d) b) Hersey and Blanchard’s Situational Leadership Theory Describes two leadership dimensions

– Task behaviour– Relationship behaviour

Which combined, lead to four leadership styles...– Telling: High task, low relationship behaviour– Selling: High task, high relationship behaviour– Participating: Low task, high relationship behaviour– Delegating: Low task, low relationship behaviour

Followers’ readiness varies from level 1 to 4– (1) “Unable and unwilling” to (4) “Able and willing”

Leaders evaluate subordinates readiness and adopt the right style

Contingency theories (cont’d)

Hersey, P. & Blanchard, K. (1982). Management of Organizational Behavior: Utilizing Human Resources(4th Ed.). Englewood Cliffs, NJ: Prentice Hall.

Leadership at the NSW Fire Brigade

The Fire Brigade has 7000 fulltime employees, 338 fire stations, 880 fire engines, and responds to 120,000 calls per year.

It prevents and responds to fires, road accidents, building collapses, rescues, hazardous material spills, salvage, and natural and manmade disasters.

– Q1: Do you think that everyone has potential to be a leader?

– Q2: What is the difference between leadership and management?

– Q3: Why is corporate vision an important aspect of leadership?

– Q4: How would you handle a promotion where you are now leading your former peers?

Leadership in practice

NSW Fire Brigadehttp://www.nswfb.nsw.gov.au/

Contingency theories (cont’d)

c) Leader Participation Model (Vroom and Yetton)– Argues that leader behaviour must be adjusted to reflect the task

structure (whether it is routine, non-routine, or in between) based on a sequential set of rules (contingencies) for determining the form and amount of follower participation in decision making in a given situation.

Time-Driven Model

Decision-making contingencies (High or Low):

– Decision significance

– Importance of commitment

– Leadership expertise

– Likelihood of commitment

– Group support for objectives

– Group expertise

– Team competence

Vroom, V. (2000). Leadership and the decision making process. Organizational Dynamics, 28, 82-94.

Contingency theories (cont’d)

d) Path-goal theory– Theory that says it is a leader’s job to assist followers and to provide

direction and support that are needed to attain goals.

– Four leadership behaviours Directive leader: Lets subordinates know what is expected of them, schedules work to

be done, and gives specific guidance on how to accomplish tasks.

Supportive leader: Is friendly and shows concern for subordinates’ needs.

Participative leader: Consults with subordinates and uses their suggestions before making a decision.

Achievement-oriented leader : Sets challenging goals and expects subordinates to perform at their highest level

House, R. J. (1971). A path-goal theory of leader effectiveness. Administrative Science Quarterly,16, 321-338.

Leader behaviour:• Directive• Supportive• Participative• Achievement:

Outcome:• Performance• Satisfaction

Contingency theories (cont’d)

House, R. J. (1971). A path-goal theory of leader effectiveness. Administrative Science Quarterly, 16, 321-338

Environmental contingency factors:• Task structure• Formal authority• Work groups

Subordinate contingency factors:• Locus of control• Experience• Perceived ability

Leader behaviour:• Directive• Supportive• Participative• Achievement:

Outcome:• Performance• Satisfaction

Cross-cultural differences and leadership Universal elements of effective leadership (Hartog, et al. 1999

– GLOBE study)– Vision– Foresight– Providing encouragement– Trustworthiness– Dynamism– Positiveness– Proactiveness

Malaysian leaders: Compassion with an autocratic style.

Kennedy, J. C. (2002). Leadership in Malaysia: Traditional values, international outlook. Academy of Management Executive, 16, 15-26.

Den Hartog, D. N., House, R. J., Hanges, P. J., Ruiz-Quintanilla, S. A. et al. (1999). Culture specific and cross-culturally generalizableimplicit leadership theories: Are the attributes of charismatic/transformational leadership universally endorsed? Leadership Quarterly, 10, 219-256.

Factors that make leadership less critical

Substitutes for leadership– Follower characteristics

Experience, training, professional orientation, or the need for independence

– Job characteristics Routine, unambiguous, and satisfying jobs

– Organisation characteristics Explicit formalised goals, rigid rules and procedures, or cohesive work

groups

Questioning the impact of leaders (Jack Welch)

Jack Welch. General Electric (1960-2001). CEO (1981-2001)– Through the 1980s, Welch worked to streamline GE, divesting business

and improving the productivity of those which were retained. GE acquired NBC (1986) and during the 1990s, shifted GE’s focus from manufacturing to financial services through numerous acquisitions.

– In 1980, the year before Welch became CEO, GE recorded revenues of roughly $26.8 billion. In 2000, the year before he left, the revenues increased to nearly $130 billion.

– GE went from a market value of $14 billion to one of more than $410 billion at the end of 2004, making it the most valuable and largest company in the world.

Leadership in practice

L E A R N I N G R E V I E W1. Why is leadership important?

Definition, importance and the contrasting the concepts of leaders and managers

2. Early leadership theories (trait theory) Research on leadership traits

3. Early leadership theories (Behavioural explanations) Findings of the behavioural leadership theories

4. Contingency theories of leadership How do Fiedler’s theory, Situational leadership theory, The leader

participation model, and Path-goal theory explain leadership?