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CHAPTER 10
CHAPTER OUTLINE
Leadership
MANAGING DIVERSITY
Female versus male leader behaviours
Leadership styles across cultures
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LEARNING OBJECTIVES
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PART 4 Leading
CEO
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HIS CHAPTER EXPLORES METHODS THAT LEADERS CAN USE TO INFLUENCE OTHERS.
Leadership
is difficult to pin down, so we present a number of frameworks to help you think about how
managers can lead effectively. We consider the possibility that leaders have common traits,
and universal behaviours they can use in any situation. We then examine how situational influences
help leaders decide when certain types of behaviour are applicable. Next, we consider
and
transformational leadership and its link to innovation. We also discuss whether leaders are always
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PART 4 Leading
TABLE 10.1
NO.
MANAGERS
LEADERS
Stress communication
Control
Collaborate
10
11
Focus on efficiency
Focus on effectiveness
12
Create policies
Establish principles
13
14
15
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Leadership CHAPTER 10
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power
Capacity to affect the
behaviour of others
information power
Power resulting from
access to and control
over the distribution of
important information
about organisational
operations and future
plans
Although all power types are influential, they prompt different levels of subordinate motivation (Yukl
1994; Phillips-Carson, Carson & Roe 1993). Subordinates may react with commitment, compliance
or resistance. Committed employees are enthusiastic and work hard towards organisational goals.
Compliant employees put in minimal effort for average, but not outstanding performance. Resistant
employees seem to comply but do the absolute minimum, or may even sabotage goal attainment.
The relationship between a leaders use of different power sources and likely subordinate reactions
is shown in Table 10.2. You will see that expert and referent power generally lead to subordinate
commitment, while legitimate, information and reward power lead to compliance. Coercive power
often leads to subordinate resistance (Norman 1988; Washington 2003). Unsurprisingly, effective
leaders use little coercive power (Rose 1993).
TABLE 10.2
Power source
legitimate power
Power stemming from a
positions placement in
the managerial hierarchy
and the authority vested
in the position
reward power
Power based on the
capacity to control and
provide valued rewards
to others
coercive power
Power depending on the
ability to punish others
when they do not
engage in desired
behaviours
expert power
Power based on
possession of expertise
valued by others
referent power
Power resulting from
being admired,
personally identified with
or liked by others
COMPLIANCE
Coercion
Legitimate
Information
Reward
COMMITMENT
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Referent
Expert
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PART 4 Leading
Empowerment
traits
Distinctive internal
qualities or
characteristics of an
individual, such as
physical characteristics,
personality
characteristics, skills and
abilities and social
factors
autocratic
Behavioural style of
leaders who tend to
make unilateral
decisions, dictate work
methods, limit worker
knowledge about goals
to just the next step to
be performed and
sometimes give
feedback that is punitive
democratic
Behavioural style of
leaders who tend to
involve the group in
decision making, let the
group determine work
methods, make overall
goals known and use
feedback as an
opportunity for helpful
coaching
laissez-faire
Behavioural style of
leaders who generally
give the group complete
freedom, provide
necessary materials,
participate only to
answer questions and
avoid giving feedback
Many managers integrate an important aspect of power use into their leadership styles: they empower
subordinates. Subordinates are given the power to assume some leadership responsibility and authority,
including the right to enforce quality standards, check their own work and schedule activities.
Empowerment strategies are part of contemporary practice, as in total quality management (Powell
1995; Sharma 2006) and learning organisations (Evans 1998).
Empowerment supports leadership in several ways.
Managers ability to get things done with the support and help of subordinates with specialised
knowledge is increased.
Worker involvement, motivation and commitment, and inclination to work towards organisational
goals are increased.
Managers have increased opportunities to concentrate on significant issues, while less time is spent
on daily supervision.
Effective managers see significant benefits from empowerment, whereas ineffective managers
control decision making and force their subordinates to agree. Empowering subordinates develops their
decision-making ability. The leaders role is to coach, guide and inspire (Burton 1995; Nakarmi 1995;
Bateman & Snell 2007).
Effective managers usually combine different power types (Rapaport 1993). While power helps to
explain leader influence, other factors, such as the leaders own traits and behaviours, contribute to their
organisational influence.
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Leadership CHAPTER 10
305
demonstrated higher satisfaction with a democratic leadership style (Bass 1981; Rue & Byars 2003).
Tannenbaum and Schmidt (1973) at the University of Michigan developed a continuum of leader
behaviours for decision-making, which allowed for changes in leadership behaviour, ranging from
autocratic (boss-centred) decisions, to democratic (subordinate-centred) decisions. Autocratic leaders
could soften and sell an idea to employees, or invite their ideas and discussion in some situations.
Results indicated that subordinates preferred the democratic approach but performance outcomes were
mixed (Bass 1981; Rue & Byars 2003).
The Ohio State University researchers results added to this finding (King 1995; Kirby 2003) and
identified that two separate issues were important; they called these initiating structure and
consideration (Kerr et al. 1974). This separated managers roles into two functions; the first (called
initiating structure) was the basic managerial functions of planning, organising and directing, and
focused on task issues (Taylor 1993). The second (called consideration) was the need to involve and
value employee contributions. This relates to how much a leader trusts and respect subordinates ideas
and shows concern for their feelings. Another similar model was Blake and Moutons (1964) Leadership
Grid, as shown in Figure 10.1. This model captures and adds to the elements of the earlier models.
Blake and Mouton also emphasised leader behaviours in relation to task and people issues, but
depending on concern for people and production levels, a manager can be anywhere on the grid. A
leader could be high on a task focus and consideration, or low on both, or have a combination of high
and low or gradations of both.
Overall, the behavioural research showed that increased subordinate involvement in decisions
increased employee motivation, decision quality, teamwork, morale and employee development, but
FIGURE 10.1
high
9
The Leadership Grid (reprinted from Blake & McCanse 1991, p. 29)
1,9
Country club management
Thoughtful attention to needs of
people for satisfying relationships
leads to a comfortable, friendly
organisation atmosphere and
work tempo
9,9
Team management
Work accomplishment is from
committed people; interdependence
through a common stake in
organisation purpose leads to
relationships of trust and respect
5,5
Middle-of-the-road management
Adequate organisation performance
is possible through balancing the
necessity to get out the work with
maintaining morale of people at a
satisfactory level
1,1
Impoverished management
Exertion of minimum effort to get
required work done is appropriate
to sustain organisation membership
9,1
Authority compliance
Efficiency in operations results from
arranging conditions of work in
such a way that human elements
interfere to a minimum degree
low
1
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PART 4 Leading
OINT
IN P NT
C A S EE I N P O I N T
CAS IN POI NT
CASE IN POI T
C A S E I N P O I NN T
C A S EE I N P O I N T
CAS IN POI NT
CASE IN POI
CASE
CASE IN POINT
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Leadership CHAPTER 10
307
did not necessarily improve productivity. Separating the two roles was useful, but the models were still
too simplistic (Larson, Hunt & Osborn 1976). The other thing researchers had identified was that
situational elements, such as subordinate expectations and task nature, affected the success of leadership
behaviours (Kerr et al. 1975; Greene 1979). Bolman and Deal (2006) cite recent research in the US,
which suggests that effective leaders can be categorised by their behaviour, in terms of how
determinedly they fight for the organisation and its survival, their ability to nurture and look after
others and their ability to take a long-range view.
situational theories
Theories of leadership
taking into consideration
important situational
factors
Fiedlers contingency
model
Situational approach
(developed by Fiedler and
his associates) which
suggests leaders differ in
the degrees of their
orientation towards the
task versus towards the
people
LPC (least preferred
value on co-worker)
orientation
Personality trait indicating
the extent to which an
individual places a
higher priority on task
accomplishment than
on personal relationships
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PART 4 Leading
MAS
ILEM MAS
D
L
A
I
DILEM AS
AGER
MAN AGERIAL DILEMM AS
L
N
MA AGERIA DILEMM S
MAN AGERIAL DILEMMAAS
MAN AGERIAL DILEMM AS
MAN AGERIAL DILEMM AS
MAN AGERIAL DILEMM
MAN AGERIAL
MAN
An annual CEO turnover survey, taking in the top 2500
companies globally and the top 200 in Australia, finds that about
15 per cent turn over each year. That means most CEOs have a
five- to seven-year window in which to make a difference.
Below are six common mistakes that CEOs make and
things that CEOs fail to do.
MANAGERIAL DILEMMAS
Decision point
1 Find an article about a decision made by a CEO
in your home country. Determine if that action
COMMON MISTAKES
OF CEOS
Reflection point
If you were a CEO, how might you avoid some of the
common mistakes that CEOs make? Give examples.
CLARIFICATION
Even CEOs tend to pretend it is not happening when they see new competition emerging, or a
format shift, or something that is really going to change the business. But the earlier and more
decisively you can react, the better it is.
Within two days of being appointed as CEO, their calendar is full for the next six game months,
and if they are not careful they spend all their time doing urgent but not critical thingsfighting
fires. CEOs only have five to seven years, so focusing on the five main things needing to be done
is crucial.
The CEOs job operates under a shortened time frame and immense pressures and it is all
too easy to get stuck behind a desk. It is often difficult to identify the last time the CEO visited
a customer. In the absence of this closeness, the CEO is trying to make decisions from
35 000 feet and relying on others.
The CEO has high performers, low performers, and those people in the middle. CEOs need to
spend their time on the middle group, trying to get competent but unco-operative people on
board. In my experience, no CEO ever regretted acting quickly on an unco-operative team member
The way the organisation will react to a change in strategy will be driven by what has happened
in the past. The organisational structure as it is today was determined by what it was in the past,
and will determine how it operates in the future. Many organisations are filled with people who
have seen multiple ideas come and go and are now waiting for this one to fail.
Most people who interact with a CEO have their own agenda. The press doesnt have any
original ideas. So CEOs tend to operate in a reality vacuum where it is difficult to pick up
unfiltered, unbiased information.
CLARIFICATION
CEOs need a 100-day plan that sets the agenda for what they are going to achieve in that time
and how they are going to achieve it. They need a vision for the next two or three years. They need
to have control of the numbers, set clear objectives and evaluate the team. All within the first 100 days.
Take an outside-in perspective. It is very easy to take the existing management teams view and
have no frank and objective perspective. Who are your most profitable customers and why? Who
are your most dangerous competitors and what are their strategies? These are the issues that
cant readily be seen from inside the organisationCEOs need to step outside.
Only 15 per cent of CEOs think their organisation enables them to out-perform other companies.
ly and f
There are a lot of leaders out there who think their organisation is only OK. The ones who
esareonthe
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Source: Hanley, M. 2006, Big CEO mistakes, Business Review Weekly, copyright John Fairfax Holdings
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Leadership CHAPTER 10
TABLE 10.3
309
SYMBOL DEFINITION
AI
You solve the problem or make the decision yourself, using the information available to you at
the present time.
AII
You obtain any necessary information from subordinates, then decide on a solution to the
problem yourself. You may or may not tell subordinates the purpose of your questions or give
information about the problem or decision on which you are working. The input provided by
them is clearly in response to your request for specific information. They do not play a role in
the definition of the problem or in generating or evaluating alternative solutions.
CI
You share the problem with relevant subordinates individually, getting their ideas and
suggestions without bringing them together as a group. Then you make the decision. This
decision may or may not reflect your subordinates influence.
CII
You share the problem with your subordinates in a group meeting. In this meeting you obtain
their ideas and suggestions. Then you make the decision, which may or may not reflect your
subordinates influence.
GI
You share the problem with your subordinates as a group. Together you generate and
evaluate alternatives and attempt to reach agreement (consensus) on a solution. Your role is
that of chairperson, co-ordinating the discussion, keeping it focused on the problem, and
ensuring critical issues are discussed. You can provide the group with information or ideas
that you have, but you do not try to press them to adopt your solution, and you are willing
to accept and implement any solution supported by the entire group.
in Table 10.2. Autocratic and consultative methods can further be split into two, designated I and II; the
model becomes more participative as it progresses from AI (decide yourself) to GI (let the group decide).
The next step involves asking eight questions that are mapped as a decision tree. When the
development of subordinates is more important in the decision process than speed, a developmentdriven decision tree is used; if speed is more important, a time-driven decision tree is used. The
questions are straightforward and asked in the following order:
1 How important is the technical quality of this decision?
2 How important is subordinate commitment to the decision?
3 Does the leader have sufficient information to make a high-quality decision?
4 Is the problem clear, in terms of the task, method and outcome?
5 Does commitment to the decision depend on who makes the decision?
6 Do subordinates share the organisations goals in solving this problem?
7 Is conflict among subordinates likely over preferred solutions?
8 Do subordinates have sufficient information to make a quality decision?
This model is useful because it recognises the different approaches for dealing with more complex
situations. Structured problems, where the task goal and methods are clear (e.g. deciding when to
schedule manufacture of extra batches of an existing product) are easy to solve. Unstructured
problems are fuzzier in regard to understanding the present situation, formulating goals and deciding
how to achieve them (e.g. deciding what new products to develop). The choice is about what delivers
the best outcome.
For example, McDonalds in Australia (and elsewhere in the region) is trying to reduce the
fuzziness that has emerged in its market. The market is becoming bored with the taste of the fast food
giants offerings and is also more concerned about healthier eating habits. The perception that
McDonalds high-fat, high-salt foods encourage unhealthy eating habits has led to McDonalds
and
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introducing frequent small innovations and moving to fresher, low-fat, low-salt foods and interesting
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PART 4 Leading
LING
SEL
PAR
TICI
PAT
IN
3
Share ideas
and facilitate
in decision
making
2
Explain
decisions
and
provide
opportunity
for
clarification
low rel.
low task
high task
low rel.
4
Turn over
responsibility
for decisions
and
implementation
1
Provide
specific
instructions
and closely
supervise
performance
ING
TELL
ATIN
G
(high)
Situational leadership theory (adapted from Hersey & Blanchard 1993, p. 197)
DE
LE G
FIGURE 10.2
(Supportive behaviour)
RELATIONSHIP BEHAVIOUR
situational leadership
theory
Theory (developed by
Hersey and Blanchard)
based on the premise
that leaders need to alter
their behaviours
depending on one major
situational factor: the
readiness of followers
(low)
(high)
TASK BEHAVIOUR
(Guidance)
FOLLOWER READINESS
HIGH
R4
Able and
willing
or
confident
MODERATE
R3
Able but
unwilling
or
insecure
LOW
R2
R1
Unable but
willing
or
confident
Unable and
unwilling
or
insecure
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Leadership CHAPTER 10
Telling is used in low-readiness situations, with followers unable and unwilling or too insecure to
be responsible for a given task. Leaders should give directions on what to do and how to do it.
Selling is used for low to moderate readiness, with followers unable to take responsibility but
willing or feeling confident to do so. Leaders should give specific directions, but support
individual willingness and enthusiasm.
Participating is used for moderate to high readiness, with followers able to take responsibility but
unwilling or too insecure to do so. Since they can perform, a supportive, participating style
emphasising two-way communication and collaboration is most effective.
Delegating is used for high readiness, with followers able and willing or confident enough to take
responsibility. At this point, they need little support or direction; so the delegating style is best.
Leaders need to decide the task areas they want to influence, assess the persons readiness level and
select the corresponding leadership style. Underpinning the model is the idea that leaders should
increase followers task-related readiness by changing their leadership style to move the follower
through the cycle from telling to delegating. Evidence suggests that newly hired staff, or those in new
jobs, benefit most from the telling styles highly structured leadership behaviour (Graeff 1983; Blank,
Weitzel & Green 1990; McShane & Travaglione 2003). Overall, the model provides a useful rule of
thumb for many situations.
Pathgoal theory
The last situational leadership theory we consider, pathgoal theory, explains how leader behaviour
can influence subordinates motivation and job satisfaction (House & Mitchell 1974). It is called
pathgoal theory because it focuses on how leaders influence subordinates perception of work goals
and paths to achieve both work (performance) and personal goals (intrinsic and extrinsic rewards)
(Evans 1970; Wofford & Liska 1993).
Pathgoal theory is based on expectancy motivation theory. As discussed in Chapter 9,
expectancy theory has three main elements: effortperformance expectancy (the probability that our
efforts will lead to the required performance level), performanceoutcome expectancy (the
probability that our successful performance will lead to certain outcomes or rewards) and valence
(the anticipated value of outcomes or rewards). Pathgoal theory uses expectancy theory to find ways
a leader might make the achievement of work goals easier or more attractive.
Leader behaviours
To affect subordinates perception of paths and goals, this theory focuses on four major leader
behaviours.
Directive leader behaviour means letting subordinates know what is expected of them, guiding
work methods, developing work schedules and the basis for outcomes or rewards. It is similar to
task orientation.
Supportive leader behaviour means showing concern for subordinates status, well-being and
needs; doing things to make work more pleasant; and being friendly and approachable. The
behaviour is similar to relationship-oriented or consideration behaviour.
Participative leader behaviour is characterised by consultation with subordinates, encouraging their
suggestions and carefully considering their ideas in decision making.
Achievement-oriented leader behaviour means setting challenging goals, expecting subordinates to
perform at their highest level, and conveying a high level of confidence in them.
Situational factors
311
pathgoal theory
Theory that attempts to
explain how leader
behaviour can positively
influence the motivation
and job satisfaction of
subordinates
directive leader
behaviour
Leader behaviour
involving letting
subordinates know what
is expected of them,
providing guidance about
work methods,
developing work
schedules, identifying
work evaluation
standards and indicating
the basis for outcomes
or rewards
supportive leader
behaviour
Leader behaviour that
entails showing concern
for the status, well-being
and needs of
subordinates; doing
small things to make
work more pleasant; and
being friendly and
approachable
participative leader
behaviour
Leader behaviour
characterised by
consulting with
subordinates,
encouraging their
suggestions and carefully
considering their ideas
when making decisions
achievement-oriented
leader behaviour
Leader behaviour
involving setting
challenging goals,
expecting subordinates
to perform at their
highest level and
conveying a high degree
of confidence in
subordinates
Leaders must consider two situational factor types: subordinate and context characteristics.
Subordinate characteristics are subordinates personality traits, skills, abilities and needs. For example,
directive leadership will motivate subordinates with low task skills, while highly skilled workers will
appreciate a participative leader.
Context characteristics fall into three categories: task, work group and the organisations formal
and
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authority system (hierarchical levels, degree of centralisation and the nature of the formal reward
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PART 4 Leading
Managing diversity
Female versus male leader behaviours
Early thinking on gender differences was that females, because of their focus on interpersonal issues,
were less suited to leadership roles than males, who were generally more focused on task issues (Bass,
Krusell & Alexander 1971; Rosen & Jerdee 1978). Both stereotypes are incorrect. Most studies show
FIGURE 10.3
Examples of path-goal theory (adapted from Yukl 1981, pp. 148, 150)
Leader
behaviour
directive
supportive
Diagnosed
situational
factor
Expectancy
theory element
specify link
between
performance
and rewards
increase
performance
reward
expectancy
reduce boredom
increase the
intrinsic value
of work
Anticipated
end result
subordinates
increased
effort
goal
achievement
(performance)
participative
achievementoriented
reduce ambiguity
about job and
role
encourage setting
challenging but
reachable goals
to boost
confidence
increase effort
performance
expectancy
increase effort
performance
expectancy
satisfaction
(intrinsic
and extrinsic
rewards)
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Leadership CHAPTER 10
313
female and male leaders are similar in interpersonal and task behaviours or have small differences. Both
are effective in achieving subordinate job satisfaction and performance (Bartol & Martin 1986;
Dobbins & Platz 1986; Powell 1993). Some studies have rated female managers more highly on
interpersonal behaviours, such as teamwork, shared goal setting, mentoring employees and task leader
behaviours (Bartol, Martin & Kromkowski 2003; Sharpe 2000; Sharma & Hede 2006). This is
believed to give females an advantage for contemporary management of relationships, but again there
were no performance differences.
transactional leaders
Leaders who motivate
subordinates to perform
at expected levels by
helping them recognise
task responsibilities,
identify goals, acquire
confidence about
meeting desired
performance levels, and
understand how their
needs and the rewards
they desire are linked to
goal achievement
Managers and leaders are not necessarily one and the same (Zaleznik 1990). One view is that managers
do things right, but leaders innovate and do the right things; they bring in major changes, and inspire
followers to high levels of effort (Holloman 1968; Zaleznik 1977). In studying this, Bernard M. Bass and
colleagues distinguish between transactional and transformational leaders (Burns 1978; Bass 1985; Hater
& Bass 1988).
Transactional leaders motivate subordinates to perform as expected. They help them recognise task
responsibilities, identify goals, become confident about desired performance levels and understand that
their needs and desired rewards are linked to goal achievement. This is allied to pathgoal leadership
theory, which like other situational theories in this chapter, is a transactional leadership approach.
transformational
In contrast, transformational leaders motivate individuals to perform above expectations by inspiring leaders
them to: focus on broader missions that transcend their own immediate self-interest; concentrate on Leaders who motivate
intrinsic, high-level goals (achievement and self-actualisation) rather than extrinsic, low-level goals individuals to perform
(safety and security); and be confident in their abilities to achieve the missions articulated by the leader beyond normal
by inspiring
(Wall Street Journal 1995). This concept revolves around transforming organisations, as well as expectations
subordinates to focus on
individuals, to produce significant and positive change. Jones (2006) identifies four characteristics of broader missions
transformational leaders: influencing, inspiring, engaging and challenging. The influencing dimension transcending their own
creates a sense of mission, stimulates, persuades and motivates employees to perform more than they immediate self-interests,
otherwise would be able to do (p. 84). Inspiring means communicating the vision so that employees to concentrate on
understand their role and want to achieve the vision. Engaging is achieved through mentoring and intrinsic higher-level goals
rather than extrinsic
coaching to bring out the best in employees and provide an environment where they can develop. The lower-level goals, and to
challenging leader stimulates creativity and innovation by encouraging employees to question their have confidence in their
models and paradigms (p. 85).
abilities to achieve the
Transformational leaders seek to stimulate change in individuals, unlike transactional leaders who extraordinary missions
view leadership as a transaction between leader and follower (Jones 2006). Transactional leaders articulated by the leader
exchange rewards based on performance and use positional resources to encourage desired behaviours
charisma
(Shivers-Blackwell 2004). Transformational leaders, on the other hand, assess the environment Leadership factor
continually, focus on outcomes, gain and build support of people and execute plans in a disciplined comprising the leaders
way to achieve organisational objectives (Newcomb 2005).
ability to inspire pride,
Transformational leadership does not replace transactional leadership, but should have an add-on faith and respect; to
effect: performance above expectations (see Figure 10.4). The logic is that successful transformational recognise what is really
important; and to
leaders need transactional skills to effectively manage day-to-day events (Hooper 2004).
and
articulate effectively
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FIGURE 10.4
transformational
leadership
transactional
leadership
emotional intelligence
The ability to regulate
ones own emotional
responses, relate to
others and make
accurate assessments of
reality
individualised
consideration
Leadership factor
involving delegating
projects to help develop
each followers
capabilities, paying
personal attention to
each followers needs
and treating each
follower as an individual
worthy of respect
intellectual stimulation
Leadership factor that
involves offering new
ideas to stimulate
followers to re-think old
ways of doing things,
encouraging followers to
look at problems from
multiple vantage points
and fostering creative
breakthroughs in
obstacles that seemed
insurmountable
current
state of
expected
subordinate
effort
heightened
motivation
to attain
designated
outcome
(extra effort)
normal
expected
subordinate
performance
subordinate
performance
beyond normal
expectations
inspire followers (Sprout 1995). Martin Luther King, Mahatma Gandhi, John F. Kennedy, Franklin D.
Roosevelt and others have been described as charismatic (House & Singh 1987). For example,
speeches by Martin Luther King and John F. Kennedy fascinated and inspired followers (Tan & Wee
2002, p. 318). Charismatic leaders usually have self-confidence, excellent communication skills to
articulate and build commitment to their vision, high energy and enthusiasm levels and strong
convictions that allow them to be risk takers and change agents. They encourage and recognise
follower accomplishments and create emotional challenges (Lee & Chang 2006; Groves 2005; Javidan
& Waldman 2003).
These leaders try to change the status quo and have been shown to rely on referent and expert
power, as they share their vision for radical change (Conger & Kanungo 1987). Some recent research
suggests female leaders, in general, fare better than males as charismatic leaders, because their social
and emotional skills are often more highly developed than males (Groves 2005).
In addition, there is no consensus on the importance of charisma per se, but there is strong support
for having a clear vision of the desired state to mobilise commitment (Howell & Frost 1989; Tichy &
Ulrich 1984). Rather than charisma, it might be better to say such leaders require high levels of emotional
intelligence. This is demonstrated in their ability to regulate their own emotional responses and relate to
others, and their ability to make accurate assessments of reality (Tombaugh 2005).
The second transformational leadership factor, individualised consideration, means to delegate projects
to enhance follower capabilities, pay attention to their needs and treat them with respect. The third factor,
intellectual stimulation, means to offer new ideas to stimulate rethinking old ways of doing things,
encourage followers to look at problems from several vantage points and foster creative breakthroughs.
Transformational leaders can be found in many spheres. In Chapter 7 we referred to entrepreneurs
Sir Richard Branson and Tony Fernandes. In a study of Taiwanese companies, Wang, Chou & W. Jiang
(2005) identified that a transformational leadership style was most effective for promoting team
cohesiveness. In a similar US study, Bolman and Deal (2005) attribute these qualities to Proctor and
Gambles chief G. A. Lafley.
Team leadership
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Leadership CHAPTER 10
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more self-directed (Thamhain 2004). Leaders face many challenges in creating and managing effective
teams, as was discussed in Chapter 8. The role of a leader is one of the elements that influences overall
team effectiveness (Kuo 2004).
Huszczo (2004) argues that team member performance is a function of ability, motivation and
opportunity, and therefore team leaders need to focus on member strengths and abilities, make their
expectations clear and use appropriate reinforcement. Leaders also need to allow members to perform
(Mothersell 2006), by being a motivator, not a supervisor. As in all leadership roles, effective delegation,
being a role model, using open two-way communication, having the people skills to encourage,
persuade and negotiate are just some of the skills needed (Hughes 2004). Team effectiveness and
performance often hinges on the level of team cohesion and consensus, and the leader has a critical role
in shaping this. Trent (2004) sets out a four-phase process of preparation, presentation, discussion and
agreement to guide a team to a consensus decision (see Table 10.4).
TABLE 10.4
PHASE
DESCRIPTION
CHARACTERISTICS
Preparation
Presentation
Discussion
Agreement
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PART 4 Leading
An interesting aspect of pathgoal theory is that situational factors may make some leader behaviours
unnecessary and/or ineffective. The substitutes for leadership approach tries to specify some situational
factors that are likely to make leader behaviours unnecessary or negate their effectiveness (Kerr &
Jermier 1978; Podsakoff et al. 1993).
This approach labels the situational factors that stop a leader behaviour from influencing
subordinate performance and/or satisfaction as neutralisers. These neutralisers include subordinates
high need for independence, low subordinate valence for available rewards (see Chapter 9) and physical
distance between a leader and subordinates. When managers detect the presence of neutralisers, they
need to adopt appropriate leader behaviours. For instance, a manager may develop new rewards, such
as training, for subordinates with low valence for current rewards.
On the other hand, substitutes are situational factors that limit leadership impact or make it
unnecessary (Kerr & Jermier 1978; Podsakoff et al. 1993). Substitutes for relationship-oriented
behaviour include interesting, satisfying work and subordinates with a professional work orientation.
Substitutes for task-oriented behaviour include able and experienced subordinates and routine work,
with clearly specified methods and/or feedback. The presence of substitutes lets the leader concentrate
on other areas (Brady 1987; Hooper 2004).
Managers must also consider the broader perspective of organisational life cycle.
TABLE 10.5
Entrepreneurial
Collectivity
Formalisation and control
Elaboration of structure
Transformational
and
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Leadership CHAPTER 10
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verbal communication
Written or oral use of
words to communicate
non-verbal
communication
Communication by
means of elements and
behaviours that are not
coded into words
downward
communication
Vertical communication
flowing from a higher
level to one or more
lower levels in the
organisation
Studies show managers prefer oral to written communication because oral communication is two-way, upward
more informal and timely (Mintzberg 1973; Kurke & Alrich 1983). One study found top managers communication
flow of
in four different organisation types spent 74 per cent of their working hours communicating orally, Vertical
communication from a
through informal and formal meetings, telephone calls and organisation tours (see Figure 14.1) lower level to one or
(Smeltzer & Fann 1989; Mintzberg 1975). They spent about 50 per cent of their time interacting more higher levels in the
with subordinates. Most of the rest was spent with the board of directors, peers, trade organisations, organisation
clients and suppliers. Similar evidence suggests other managers also prefer spoken over written
communication (Lewis 1980; Smeltzer & Fann 1989;
Bateman & Snell 2007).
As discussed in Chapter 1, managers are at the hub of
communications in their roles as co-ordinators,
monitors, disseminators and spokespersons. If managers
communicate ineffectively, the result can be serious, for
both their work unit and the organisation (Petzinger
1997). On the other hand, effective communication can
be a key to organisational success.
Effective managers seek to have two-way
communication, up and down the organisations
hierarchical layers, and communication patterns often
match the organisations structure (see
Chapter 6).
Approximately
two-thirds
of
the
managers
communication is with subordinates (Porter & Roberts
1976; Rue & Byars 2003). The most common, downward
communication, involves information in one of five
categories: (1) job instructions on specific tasks, (2) job Communication is critical to every managers job and managers are
rationales explaining relationships between tasks, (3) estimated to spend about 85 per cent of their day in some
activity. Without effective communication, even brilliant
organisation procedures and practices, (4) feedback on communication
strategies and best-laid plans are much more likely to fail. As a result,
individual performance and (5) attempts to encourage a accidents and potentially risky activities increase. Electronic advances
sense of mission and dedication to organisational goals have given managers new communication methods, channels and
ly and f
concerns, but have also brought with them new risk factors uinrposes on
(Katz & Kahn 1978).
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PART 4 Leading
FIGURE 10.5
Proportion of time top managers spent on various activities (based on Kurke &
Aldrich 1983, p. 979)
unscheduled
meetings 12%
tours 3%
scheduled
meetings
50%
desk work
26%
telephone
calls
9%
grapevine
Another term for informal
communication
to (1) current work project progress, (2) unsolved problems and situations where subordinates need
help from superiors, (3) new developments within or affecting the work unit or organisation, (4)
suggestions for improvement and innovation, (5) employee attitudes, morale and efficiency (Planty &
Machaver 1952; Cranwell 1969; Goldhaber 1986). Co-ordinating cross-functional activities and
teams also requires horizontal communication.
We have briefly discussed the formal processes of managerial communication, but managers
should also be aware of the tone of informal communications. Informal communication, or the
grapevine, occurs without reference to hierarchy or task requirements and relates to interpersonal issues
(Pace 1983). Grapevines carry large amounts of information, and the data they yield is 50 to 90 per
cent accurate (Friedman 1981; Goldhaber 1986; Zaremba 1988). They can create problems if they
carry gossip and false rumours, but have many good aspects if managed properly. Grapevines help
identify problems and concerns; they manifest the organisations culture by communicating
organisational rules, values, morals, traditions and history. Leaders can use the grapevine to give
employees time to consider potential changes, monitor commitment and satisfaction, and identify
ideas that contribute to the organisations goals (March & Sevon 1984; Weick & Browning 1986;
Mishra 1990).
Electronic advances have given managers new communication channels and concerns. Electronic mail
systems, the Internet, voice mail, teleconferencing and videoconferencing and groupware provide
opportunities for high-speed information sharing and improved decision making. Email and Internet
access have facilitated the rapid growth of tele-working, hot-desking and virtual teams (discussed in
Chapter 8). For example, in 2007, 70.2 per cent of Australians, 66.3 per cent of Singaporeans and
68.2 per cent of people in Hong Kong use the Internet regularly (Internet World Stats 2007). The ly and
on
posesto ission of
Internet is a boon for e-business, allowing communication between suppliers and contractors,
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Leadership CHAPTER 10
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However, a downside is the amount of time it takes to respond to emails, deal with poorly written,
ambiguous emails that lack communication richness (Griffin 2000), concerns about security and
dealing with unsolicited emails (spam). Employees who make inappropriate use of the Internet on
company timesurfing the Net or downloading illegal materials such as pornography or copyrightprotected materialsare another problem, causing costs to rise (Bryan 2000; Kirby 2000). This is
becoming such a problem that some organisations resort to turning their email off to recover time
(Ellis 2003).
use six major types of power to affect others behaviour: legitimate, reward, coercive,
expert, information and referent. Leaders must use their power carefully to encourage
commitment and increase power, not diminish it. Researchers have identified some
common traits distinguishing leaders from non-leaders. General traits include intelligence
and dominance; some other leadership traits are only applicable in specific situations.
Studying leader behaviours gave a more promising research direction. The Iowa,
Michigan and Ohio State studies attempted to identify effective leadership behaviours, or
styles. The Ohio State researchers found that two leadership styles, initiating structure
and consideration, can be viewed as independent dimensions not opposite ends of a
continuum. Unfortunately, leaders showing both high initiating structure and high
consideration did not always get the best results. The Leadership Grid emphasised
concern for people and production. Studies indicate female and male managers display
similar levels of exhibited interpersonal and task behaviours.
Situational leadership theories grew from realising leader behaviours that work well in one
situation are often not as effective in another. Fiedlers contingency model holds a
leaders effectiveness depends on whether their LPC orientation fits the situation as set
by leadermember relations, task structure and position power.
www.mhhe.com/au/bartol_foundations2/e
SUMMARY
The normative leadership model helps leaders determine how much to involve subordinates
in decisions. Situational leadership theory argues leaders must alter their combination of
task and relationship behaviours according to the task readiness of followers. The pathgoal
leadership theory relies on expectancy motivation theory and attempts to explain how leader
behaviour influences subordinate motivation and job satisfaction.
Transformational leadership can be important in innovation, as it motivates individuals to
organisations.
In some contexts, there is some evidence that leadership may make little or no
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PART 4 Leading
Managers must be concerned with information flows among the various parts of the
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MANAGEMENT EXERCISES
EXERCISE 1 Self-assessment: Do you have charisma?
Charisma has helped many leaders in accomplishing goals. It may assist you in the future.
The following questions will help in identifying your current charisma level.
1 I worry most about:
a my current competitors
b my future competitors
2 Im most at ease thinking in:
a generalities
b specifics
3 I tend to focus on:
a our missed opportunities
b opportunities weve seized
4 I prefer to:
a promote traditions that made us great
b create new traditions
5 I like to communicate an idea via:
a a written report
b a one-page chart
6 I tend to ask:
a How can we do this better?
b Why are we doing this?
7 I believe:
a theres always a way to minimise risk
b some risks are too high
8 When I disagree with my boss, I typically:
a coax him/her nicely to alter his/her view
b bluntly tell him/her, Youre wrong
9 I tend to sway people by using:
a emotions
b logic
10 I think this quiz is:
a ridiculous
b fascinating
Source: Fortune (1996).
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PART 4 Leading
Your position was created when it appeared to the chief executive the company could
have difficulty securing certain essential raw materials. To protect the firm against this
possibility, the present haphazard decentralised arrangement must be abandoned or at
least modified to meet current problems.
You were chosen for the position because of your extensive background in corporate
purchasing with another firm which operated in a much more centralised way. Your
appointment was announced in the last issue of the company house magazine. You are
anxious to get started, particularly as the peak buying season is just three weeks away. A
procedure must be set up to minimise likelihood of serious shortages, and secondarily
achieve economies from the added power of centralised purchasing (Vroom & Jago 1988).
Instructions
Get together with a group designated by your instructor and use the normative leadership
model to determine the degree to which you should involve subordinates in the purchasing
decision.
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325
Margarine or butter?
omething a little odd is happening down Windsor way. Ian
G. McNally is doing new things to his traditional product.
Putting something extra innot leaving something out.
For three-quarters of a century, Australias oldest margarine,
Nuttelex, has been famous for what it does NOT contain.
Astonishingly, a thriving private business has been built around
serving the niche requirements of the minority religions, the
allergically challenged, the old-fashioned health-obsessed, the
vegetarian and the vegan.
The list of ingredients absent from Nuttelex now occupies a
whole side of a tub. You almost wonder what could be left.
Nothing is genetically modified. Theres no form of milk or dairy
product. No lactose or sucrose. No cholesterol. No gluten. No
soybean or cottonseed oil. No eggs or egg products. No yeast,
animal fats or animal products, sugar, calcium, preservatives,
artificial colours or flavours. And, amazingly for a product called
Nuttelex, no nuts. They went long ago, despite the squirrel on
the packaging, and even though it created a bit of a brand-name
marketing quandary. Theres no connection with the hazelnut
spread Nutella, either.
But the inevitability of modernity has arrived for Mr McNally,
who ten years ago took over from Nuttelexs founder, his late
father, Gordon, who kept control almost until his death aged 91
in 1996. Not a lot has changed around his 1950s-style office,
reached just off the James Street plant floor, and Ian McNally,
62, has preserved a tradition and style that mostly disappeared
long ago.
A gaggle of loyal and trusty women are working away in the
anteroom, and look up in surprise when a visitor dares disturb
the dust, as it were. Margaret has been here 30 years, says Mr
McNally, and other people have been here a long time, too.
Joyce, who just retired recently, shed been with us longer than
that. On the wall, theres a framed certificate of appreciation from
G.J. Coles and Coy in 1962, signed by Sir Edgar and Sir George
Coles, no less. But now, on the olde worlde desk that his father
used, are the plastic tubs containing the diversifications from the
basic product into a five-pack range.
Today, as well as normal, basic Nuttelex, theres the fawn
kosher pack, made under special Jewish supervision, theres the
new lite in a blue pack, the olive spread and an all-new product,
Nuttelex Pulse. Joining the trend to make a margarine containing
cholesterol-reducing plant sterols, Pulse is already in warehouses
and about to be launched onto the market.
It is Mr McNallys response to Goodman Fielders MeadowLea
Logicol, Unilevers Flora Pro Activ and Peerless Smart Balance,
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END-OF-CHAPTER CASE ON THE RIM
Gordon McNally also made headlines when he jacked up over
being asked for $30 000 a year by the National Heart Foundation
to put its red tick of approval on his product. With just a single line,
he felt it was too big an impost.
But he was not unsympathetic to the cause, and to this day
Nuttelex supports the Heartbeat organisation, another fund-raising
group. He also set up a house in Hawthorn Road, Caulfield, for the
use of the families of patients having heart operations.
Today, Nuttelex makes about 3500 tonnes of margarine each
year, holds about 8 per cent of the Australian market and also
exports a bit, mostly to South-East Asia.
In the past three years, Mr McNally has spent $4 million to
install shiny new stainless steel Danish-made machinery, which can
treble his daily output from one tonne an hour to three.
Ian McNally left Monash University after only one year to join his
father in the business in 1967, working in the laboratory, driving the
cash-vans loaded with margarine around to the grocers, but
mostly concentrating on matters to do with the plant. To him, the
product is all-importanthe gets help with marketing and
accounting.
Even today, he keeps his white coat handy in the cupboard and
relishes a tour through the premises in Windsor, where giant tubs
of oil are turned into margarine through various processes.
Theres an animal fats side to his business, a product called
Frize that goes out to fish and chip shops, but all its operations are
kept at the opposite end of the plant to ensure Nuttelex products
remain uncontaminated.
Not surprisingly, everything seems a bit slippery, and you dont
run in this place. There are non-skid steps stuck to the floor to help
in navigation.
Mr McNally is heir to a fascinating Melbourne manufacturing
and retailing legacy, a business that was founded in the Depression
and has survived despite obstacles placed in its path.
The biggest, of course, was butter. Getting around the dairy
industrys clout was like trying to overtake a herd of jerseys on the
road to the milking shed.
Mr McNally remembers his father going to meet politicians to
see if he could get quotas increased, but things only improved
marginally.
Not until 1990 was the last quota on margarine production lifted
in Victoria, where dairy farmers had always had an extraordinary
FURTHER READING
Bolman, L. G. and Deal, T. E. 2006, Wizard and warrior: neglected
leadership roles, Strategy and Leadership Journal, Vol. 34, No. 5, pp. 468.
Catlette, B. and Hadden, R. 2003, Increasing employee performance,
Security Management, May, Vol. 47, No. 5, pp. 268.
Idris, F., Abdullah, M., Idris, M.A. and Hussain, N. 2003, Integrating
resource-based view and stakeholder theory in developing the Malaysian
excellence model: A conceptual framework, Singapore Management Review,
2nd Half, Vol. 25, No. 2, pp. 91100.
d
only an of
o
p
r
u
ission
ting p inrio
Sharma, A.K. and Talwar, B. 2004, Business excellence
Vedic
r perm 8
arkeenshrined
m
r
p
fo
e
0
ut thVol. 26, No.
(Hindu) philosophy, Singapore D
hoHalf,
Fs are Review,
alia 20
it1st
PManagement
uced w raw-Hill Austr
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1, pp. 120.
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Nursing ManagementUK 2004, Developing nurse leaders for today and
tomorrow, February, Vol. 10, No. 9, pp. 810.
ses
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VIDEOCASES
Website www.redbaron.com.au
Website: www.westpac.com.au
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