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Submitted by:
Miss Chinju Cyril
II year MSc Nursing

“Management is efficiency in climbing the ladder of success; leadership

determines whether the ladder is leaning against the right wall”
(Stephen R. Covey)

Leadership is a unique function. It can be a part of a formal organizational managerial position

or it can arise spontaneously in any group.
Leaders empower themselves and others to help achieve organizational goals. Leaders at all
level are in key positions to participate in decision making. Effective leaders use leadership theories
and principles to guide their actions. Leadership is an activity of human engagement and a relationship
experience founded in trust, communication, inspiration, action, and “servant-hood.” The leadership
role is so important because it embodies commitment and forward-reaching action. Arising from a
drive to make things better leaders use their power to bring teams together, spark innovation, create
positive communication, and drive forward toward group goals.

Leadership is the special quality which enables people to stand up and pull the rest of us over
the horizon. (James L. Fisher)

Leadership is lifting a person’s vision to higher sights, the raising of a person’s performance to
a high standard, the building of a personality beyond its normal limitations. (Peter F. Drucker).

“Leadership: The art of getting someone else to do something you want done because he wants
to do it” (Dwight D. Eisenhower).

Leadership is a process of influencing the behavior of either an individual or a group regardless

of the reason, in an effort to achieve goals in a given situation (Henry, 2001).

Leadership has been described as the process of social influence in which one person can enlist
the aid and support of others in the accomplishment of a common task (Wikipedia).


Management is defined as the coordination and integration of resources through planning,
organizing, coordinating, directing and controlling to accomplish specific institutional goals and
All leadership definitions incorporate the two components of an interaction among people and
the process of influencing. Thus leadership is a social exchange phenomenon. Leadership is
influencing the people. In contrast, management involves influencing employees towards
organizational goals and is focused primarily on organizational goals and objectives. Leader focuses
on people, whereas the manager focuses on systems and structures. Another distinction is that a leader
innovates, whereas a manager administers. Managers cope with complexity while leaders cope with

Management is a special kind of leadership that concentrates on the achievement of

organizational goals. Leadership is a broad concept and a process that can be related to any group.
Leadership, management and professionalism have different but related meanings, as follows:
• Leadership: guiding, directing, teaching, and motivating to set goals and for achievement.
• Management: resource coordination and integration to accomplish specific goals.
• Professionalism: an approach to an occupation that distinguishes it from being merely a job,
focuses on service as the highest ideal, follows a code of ethics and is seen as a lifetime

A distinction can be made between leadership and management roles. Management relates to
managing the resources of an organization. Managers derive power from their position and title. The
idea of management can generate a negative reaction when it is equated with the “command and
control” concept of bureaucratic organizations. The demands of management work are increasing in
amount, scope, complexity and intensity and thus causing increased role stress. Leadership is needed
to replace the former role of the manager. There is a need for two levels of leadership: one that
integrates the system and one that coordinates the service.


Hersey and colleagues (2001) noted that the leadership process is a function of the leader, the
followers, and other situational variables. The leadership process includes five interwoven aspects:
(1) The leader
(2) The follower
(3) The situation
(4) The communication process
(5) The goals
All five elements interact within any given leadership moment.



Communication Situation

Components of a leadership moment

Process Part 1: The Leader

The values, skills, and style of leaders are important. Their internalized patterns of basic
behaviors influence actions and the ability to lead. Leaders’ perceptions of themselves and their roles
also make a difference in the leadership situation. Their expectations have an impact on their
followers. Internal forces in leaders that impinge on leadership style are values, confidence in
employees, leadership inclinations, and sense of security in uncertainty. Interpersonal and emotional
intelligence skills also contribute to the effective leadership of knowledge workers.

Process Part 2: The Follower

Follower ship is the flip side of leadership. Followers are vital because they accept or reject the
leader and determine the leader’s personal power. If the leader needs self-awareness, then the
followers also must know themselves in reference to their expectations. Situations in which the group
is not accustomed to working together or does not hold chares expectations frequently lead to conflict.
Groups have personalities that conclude a discernible level of trust. The leader must assess the
readiness level of the group. The leadership situation in a group that is knowledgeable and
experienced in solving problems is very different from the leadership situation in a group that is not
experienced at the task or at working together.

Process Part 3: The Situation

The specific circumstances surrounding any given leadership situation will vary. Elements
such as work demands, control systems, amount of task structure, degree of interaction, amount of
time available for decision making, and external environment shape the differences among situations.
Organizational culture and ethos also are important factors in the situation. Environmental or cultural
differences also cause the leadership situation to vary. The personality styles of both superiors and
subordinates have an influence on the situation, the work demands, and the amount of time and
resources available.

Process Part 4: Communication

Communication processes vary among groups as to the patterns and channels used and in
regard to how open or closed the communication flow is. Communicating is basic to the process of
influencing. Through communication the leader’s vision and message are received by the followers.
After choosing a channel, the sender transmits a message. However, the message is filtered through
the receiver’s perception. Organizations include a variety of communication structures and flows.
These may be downward, upward, horizontal, grapevines, or communication networks.
Communication may be formal or informal. Certain acts performed by leaders have positive effects
and make people feel more respected; listening and informal chatting are prime examples.

Process Part 5: Goals

Organization has goals, and individuals working in organizations also have goals. These goals
may or may not be congruent. Goals may thus be in conflict, in which case there is tension and a need
for leadership.

The three basic approaches recognized in leadership theory can be grouped as trait, attitudinal,
and situational (Hersey et al., 2001). Research and theory about leadership has a long history.
Leadership theories have evolved away from an early focus on the traits or characteristics of the leader
as a person because it was found that it is not possible to predict leadership from clusters of traits.

The most well-known leadership theories are:

Theories of leadership began with the great man theory. This theory was formulated after
studying men who were already leaders. Most of them were rich and born into leadership. The Great
Man theory, from Aristotelian philosophy, asserts that some people are born to lead whereas others are
born to be led. It also suggests that great leaders will arise when the situation demands it.

THE TRAIT THEORY (1900-1940)

The next leadership theory to find followers was trait theory. Tenets of this theory are:
 People are born with inherited traits.
 Some traits are particularly suited to leadership.
 People who make good leaders have the right (or sufficient) combination of traits.

In the trait approach, theorists have sought to understand leadership by examining the
characteristics of leaders. The trait approach has generated multiple lists of traits proposed to be
essential to leadership.
Bennis (1994) identified a recipe for leadership that contained six ingredients: a guiding vision,
passion, integrity (including self-knowledge, candor, and maturity), trust, curiosity, and daring.

Drucker (1996) noted that effective leaders know the following four things:
1. The only definition of a leader is someone who has followers.
2. Popularity is not leadership; results are.
3. Leaders are visible and set examples
4. Leadership is not rank but responsibility.


Behavioral theory proponents assume that leaders are made, not born. These theorists believed
anyone can learn to be a leader. Rather than study capabilities or inborn traits, behavioural theorists
study what leaders do.

Role theory was based on the assumptions that individual:

 Define roles for themselves and others based on social learning and reading
 Form expectations about the roles that they and others will play
 Subtly encourage others to act within role expectations
 Will act within the role they adopt

Within organization, formal and informal information about leadership values, culture, training,
and modeling shapes expectations and behavior. When expectations do not match behavior, role
conflict can occur.


Back in 1961, Blake and Mouton developed a grid to chart leaders’ concern about the work to
be done compared to their concern for their people. The Grid itself is a framework for understanding
various approaches to leadership, and how those different approaches can harness or impede potential.
It has two components: Concern for Production and Concern for People, which are measured on a
scale from 1 to 9.

Concern for Production refers to commitment to expected outcome, such as number of units
produced, time expended, sales volume, and quality level - whatever a team is responsible for
producing. Concern for People refers to attitude towards superiors, peers or subordinates, and includes
concerns about job satisfaction, quality of work life, training/development, working conditions, salary
structure, fringe benefits, job security, etc.

Grid theory identifies seven broad leadership styles. Identifying styles allows people to
understand different approaches and their respective strengths and weaknesses.

Leadership styles are defined as different combinations of task and relationship behaviors used
to influence others to accomplish goals. Leaders need to be concerned about both tasks to the
accomplished and human relationships in groups and organizations. Leadership styles are the
consistent behavior patterns exhibited in influencing the activities of others by working with and
through them, as perceived by those others. There are different styles that evoke variable responses in
different situations. The way people influence others through actions taken and the perspectives of
other people is related to leadership efforts and constitutes leadership style. The two major leadership
terms are task behavior and relationship behavior; thus a leader’s leadership style is some combination
of task and relationship behavior. Hersey and colleagues (2001) defined these terms as follows:

 Task behavior: the extent to which leaders organize and define role, explain activities,
determine when, where, and how tasks are to be accomplished, and endeavor to get work

 Relationship behavior: The extent to which leaders maintain personal relationship by opening
communication and providing psychoemotional support and facilitating behaviors.


A group of psychologists led by Lewin focused their theory on leadership styles. They
identified three leadership styles: autocratic, democratic, and laissez-faire.
Autocratic leaders make decisions without consulting anyone. This style is reflected in
primarily directive behaviors. Techniques and activity procedures are determined by the leader and
dictated to the followers. Decisions of policy are made solely by the leader. Leaders tell the followers
what to do and how to do it. This style emphasizes a concern for task. Authoritarian leaders are
characterized by giving orders. Their style can create hostility and dependency among followers. It
may also stifle creativity and innovation.

The autocratic/authoritarian leader is characterized by the following behaviours:

• Strong control is made over the work group
• Others are motivated by coercion
• Others are directed with commands
• Communication flows downward
• Decision making does not influence others
• Emphasis is on difference in status(“I” and “you”)
• Criticism is punitive

Authoritarian leadership, useful in crisis situation, is frequently found in very large

bureaucracies such as armed forces.

Democratic leaders involve people in their decisions, although they may make the final
decision. Participants in settings that have a democratic leader may appreciate being consulted, but
they may be confused when confronted by a wide range of opinions with no clear way in reach a
decision. Policies are a matter of group discussion and decision. The leader encourages and assists
discussion and group decision making. The leader shares responsibility with the followers by
involving them in decision making. The democratic style moves slower and is thought to take longer
than an authoritarian style. Group consensus needs to be considered. Furthermore, the needs of
disenfranchised minority groups must be balanced. Intergroup cohesion is needed with this style. The
challenge of the democratic style is to get people with different professional backgrounds, personal
biases, and psychological needs together to focus on what the problem is and how can it be fixed.

The democratic leader exhibits the following behaviors:

• Less control is maintained
• Economic and ego awards are used to motivate
• Others are directed through suggestions and guidance
• Communication flows up and down
• Decision making involves others
• Emphasis is on “we” rather than “I” and “you”
• Criticism is constructive

This type of leadership is particularly effective when cooperation and coordination between
groups are necessary.

Laissez-faire leaders are minimally involved in decision making. This style of leadership
works best when people are capable and motivated to decide and are not hindered by the central
coordinator. When laissez-faire leadership is used, people may not work in a coherent manner or put
in the energy they would if they were actively led. This style promotes complete freedom for group or
individual decisions. There is a minimum of leader participation. Because the style is based on
noninterference, there may never be a clear decision formulated. The laissez-faire style is a decision,
conscious or otherwise, to avoid interference and let events take their own course. The leader is either
permissive to foster freedom or is inept at guiding a group.

The laissez-faire leader is characterized by the following behaviors:

• Is permissive with little or no control
• Motivates by support when requested by the group or individuals
• Provides little or no direction
• Communication flows up and down
• Disperses decision making throughout the group
• Places emphasis on the group
• Does not criticize

It is appropriate when problems are poorly defined and brainstorming is needed to generate
alternative solution.

Continuum of leader bahavior

Tannenbaum and Schmidt (1973) suggested that a leader might select one of seven behavior
styles arrayed along a continuum. The continuum ranges from democratic to authoritarian (or
subordinate-centered to leader-centered). Their work suggested that there is a variety of leadership
styles. Essentially, however, there are three distinct leadership styles or points along the continuum:
authoritarian, democratic, or laissez-faire. Although some individuals are able to integrate all three
styles and flexibly match to the situation at hand.
Subordinates are
invited to question
ideas from the leader

Relationship oriented Task oriented

Freedom for Authority by the

subordinates leader

Democratic Authoritarian

Subordinates are Subordinates are

Allowed to function told of the leader’s
within limits decision

Continuum of leader behavior


He identified four main style of leadership for decision making.
In the exploitative authoritative style, the leader uses threats and other fear-based methods to
achieve conformance. People’s concerns are ignored, and communication comes from the top down.

In the benevolent authoritative style, the leader is concerned for people and forms a
benevolent dictatorship. Rewards are dispensed, and appropriate performance is praised. The leader
listens to people’s concerns, although what others hear is often rose colored. Some decisions may be
delegated, but most are still made by the leader.

Another type of leadership is exemplified by the consultative style. A consultative leader

makes the major decision and offers somewhat rose-colored information, but information flows
upward from the staff and the leader listens to people. A consultative leader listens to everyone but still
makes the major decisions.

Another kind of leadership style focuses on staff participation. A participative leader makes
maximum use of participative methods, engages people in making decisions, and helps make sure
everyone works well together at all levels. The level of participation may very depending on the type
of decision being made. The downside of participative leadership is that it can lead to feelings of
betrayal and cynicism when managers ask for input and then ignore it.

Situational leadership theories focus on the frequency of observed behaviors to make
predictions. What is needed by the leader is diagnostic ability. The leader observes abilities and
motives in the followers. With sensitivity, cues in the environment can be identified and fed into
choices made regarding leadership style. What is key to understand is that people make choices. One
choice a leader has is to alter his or her own behavior and the leadership style used. A leader would
choose to alter his or her behavior and style if the needs and motives of the followers varied. Personal
flexibility and leadership skills are needed to vary one’s style when the followers’ needs and motives
are different. The ability to diagnose, choose, and alter behavior to implement a leadership style best
matched to the situation is a critical skill needed for leadership for effectiveness. Thus no one
leadership style is optimal n all situations. The nature of the situation needs to be considered. Styles
can be chosen to match the situation.


Fiedler (1967) developed a Leadership Contingency Model. He classified group situational
variables of leader-member relations, task structure, and position power into eight possible
combinations, ranging from high to low on the three major variables. Leader-member relations refer
to the type and quality of the leader’s personal relationships with followers. Task structure means how
structured the group’s assigned task is. Position power refers to that power conferred on the leader by
the organization as an integral component of the assigned job. Fiedler examined the favorableness of
the situation from the perspective of the leader’s influence over the group. The most favorable
situation occurs with good leader member relations, high task structure, and high position power. The
least favorable situation occurs when the leader is disliked, has an unstructured task, and has little
position power. With Fiedler’s model, group situations can be analyzed to determine the most
effective leadership style.

Fiedler (1967) examined which style (task-oriented versus relationship-oriented) would be

most effective for each of eight situations. A key general principle is that the need for task-oriented
leaders occurs when the situation is either highly favorable or very unfavorable. A task-oriented style
is needed for the situations on the extremes, whereas a relationship-oriented style is needed when the
situation is moderately favorable. On the extremes of highly favorable situations, leaders need to use
task oriented behavior to get the work moving. In the middle of the continuum, a high relationship
style is needed. Favorable or unfavorable situations are determined in part by the receptivity of the
followers, but they are also determined by whether the larger environment is positive or negative.


Hersey and colleagues (2001) described the Tri-Dimensional Leader Effectiveness Model first
developed by Hersey and Blanchard. First, a two-dimensional model was constructed, in which task
behavior and relationship behavior were displayed on a grid from high to low and were divided into
four quadrants: (1) high task, low relationship; (2) high task, high relationship; (3) high relationship,
low task; and (4) low task, low relationship. These quadrants represent four basic leadership styles:
telling, selling, participating, and delegating. As applied to the continuum of authoritarian versus
democratic styles, telling would be authoritarian and delegating would be democratic. In the middle
are the two styles that draw from both—the selling and the participating leadership styles. Selling is
a little more authoritarian than participating, and participating is a little more democratic than
authoritarian, but both are mixed styles.

High Relationship High task and high

and low task relationship
Low task and low High task and low
relationship relationship

(Low) Task Behavior (High)

Hersey-Blanchard two-dimensional model of leadership.

The developmental levels they focused on were:

 High-task, low relationship focus. When the follower cannot do the job and is unwilling or
afraid to try, the leader steps in and tells the person what to do, providing a working structure
for the follower, and determines the source of the lack of motivation.

 High-task, high-relationship focus. When the follower can do the job to some extent but is
overconfident, the leader listens, advises and coaches.
 Low-task, high-relationship focus. When the follower can do the job but refuses to do it, the
leader listens, praises, and makes the follower feel good when he or she shows the necessary
 Low-task, low-relationship focus. When the follower can do the job and is motivated, the
leader gets out of the way and doesn’t interfere except to provide occasional recognition and
Overlaid on the basic grid is a continuum of readiness ranging from low to high. Readiness has
two aspects: ability and willingness. Job ability is predicated on the amount of past job experience, job
knowledge, problem-solving ability, ability to take responsibility, and ability to do the job. The other
part of readiness is psychological willingness. Psychological willingness means being willing to take
responsibility and have a positive attitude toward accepting the obligation to complete a task.
Psychological readiness is manifested by willingness to take some risk and by accepting the job
requirements. It includes achievement motivation, wanting to do well, persistence, a work attitude,
and a sense of independence. These factors create a willingness to take on and complete a job. Hersey
and colleagues (2001) combined ability and willingness into four level of readiness. Level 1 is unable
and unwilling or insecure. Level 2 is unable but willing or confident. Level 3 is able but unwilling or
insecure. Level 4 is able and willing or confident. These readiness levels can be matched with the
corresponding leadership styles of level 1 with telling, level 2 with selling, level 3 with participating,
and level 4 with delegating. This readiness assessment can help predict appropriate leadership style

Hersey and colleagues emphasized the readiness of followers. Readiness can be applied to a
work group. Have the members worked together for a long time in the job, or are they new
employees? The culture is more solidified in a work group that has worked together for many years on
a particular unit. The leader’s leadership style would have to take into account where the followers are
in terms of their readiness as a critical factor for determining the style to choose. Using leadership
theory, leaders assess themselves, look at the followers’ readiness, and assess the situation to
determine whether it is favorable or unfavorable. Then a telling, selling, participating, or delegating
style is selected.

Normative leadership is a variant of situational leadership. A normative leader chooses a
decision procedure, ranging from autocratic to group-based, depending on decision acceptance and
follower knowledge. Vroom and Yetton (1973) noted that situational factors could yield unpredictable
leader behavior, so they defined the norms, or rules, of leader behavior using rational logic the norms,
or rules, or leader behavior using rational logic and didn’t spend log hours observing leader behavior.
They defined different decision procedures based on the theory that participation increases
acceptance of a decision and that, when there are many alternatives, the selection procedure—
including autocratic, consultative, and group-based methods—is important. This model is most apt
when opinions about the decision are clear and accessible.

 Autocratic decision procedures.

In this format, the leader decides alone and does not share the problem with followers. There
are two cases for autocratic decision procedures: one is when followers do not have useful information
and the leader does; the other is when followers possess useful information and the leader asks for it
but still decides alone. Neither of these are good choices when followers are unlikely to accept an
autocratic decision, when the leader sees decision quality as important but the followers don’t or when
followers aren’t an opportunity to resolve their differences.

 Consultative decision procedures.

In this category, the leader shares the problem either with people individually or with the
group, listens to ideas, and then decided alone. Individual sharing is not appropriate when staff
members are apt to disagree with one another because it doesn’t offer people a chance to resolve

 Group-based decision procedures.

In this category, the leader either shares problems with followers as a group and then decides
alone or seeks and accepts a consensus. Group-based decisions work especially well when decision
acceptance and / or decision quality are important or when the leader lacks the information or skills to
make the decision alone.


Path-goal theory helps leaders:
o Clarify the path towards the goal
o Remove roadblocks
o Increase rewards along the way

This theory offers three leadership styles depending on follower needs:

1. Supportive leadership is the best choice when work is stressful, boring, and/or hazardous. Making
the environment friendlier is the goal. The leader strives to increase followers’ self-esteem and make
the job more interesting.

2. Directive leadership is the best choice when the task is unstructured and / or complex and followers
are inexperienced. Telling followers what needs to be done and giving appropriate guidance along the
way are the goals. Rewards are increased as needed, and role ambiguity is decreased by providing
clear instructions, which strengthens followers’ sense of security and control of the situation.

3. Achievement-oriented leadership is the best choice when the task is complex. With this style, the
leader knows the right and best way of achieving a goal; the follower is dependent but is believed to be
able to succeed. This style also assumes the leader and follower are completely rational, which may be
a big assumption.


Leader-member exchange theory, also called LMX or vertical dyad linkage theory, explains
how group leaders maintain their position by exchanging informal agreements with their members. In
this approach:

 Leaders have an inner circle of trusted assistants and advisers whom they give responsibility,
decision influence, and access to resources, but leaders ensure that those consulted do not strike
out on their own.
 The in-group works harder, is more committed to task objectives, and shares more
administrative duties.
 The out-group is given low levels of influence or choice.
Successful in group members are similar to the leader, and they are good at seeing situations
from the leader’s viewpoint. The out-group may react aggressively to the leader’s treatment of the in-
group but limit complaining to conversations in the restroom and at the water cooler.

The theory is useful when trying to understand the inner workings of a team. To be successful
as team member:

 Work hard to join the inner circle by seeking to understand and support the leader’s viewpoint.
Be loyal.
 Take on more than your share of administrative and other tasks.
 Pick your arguments carefully.

Hersey and colleagues (2001) identified a second approach to leadership research that focused
on the measurement of attitudes or predispositions toward leader behavior. Occurring mainly between
1945 and the mid-1960s, the attitudinal approaches began with the Ohio State Leadership Studies and
included the Michigan Leadership Studies, Group Dynamics Studies, Likert’s Management Systems,
and Blake and McCanse’s Leadership Grid.

Leader behavior was described as having two separate dimensions, as follows:

1. Initiating structure and consideration in the Ohio State Leadership Studies.
2. Employee-orientation and production-orientation in the Michigan Leadership Studies.

These dimensions are similar to the authoritarian (or task) and democratic (or relationship)
ideas of the leader behavior continuum. The Group Dynamics Studies highlighted goal achievement
(similar to task) and group maintenance (similar to relationship) elements of leadership behavior
(Cartwright & Zander, 1960). Likert (1961) studied high-performance managers to develop an
understanding of a general pattern of management. He found that close supervision was less
associated with high productivity. High productivity was associated with clear objectives and
transmitting ideas about what is to be accomplished to the subordinates, then giving then the freedom
to do the job. He described a continuum of management styles, called System I through System 4,
from no trust in subordinates through condescending confidence, substantial but not complete
confidence, to complete trust and confidence in subordinates. This parallels the task-to-relationship

Blake and Mouton (1964) used task and relationship concepts in their grid, which was later
modified by Blake and McCanse (1991). The following five types of leadership or management
styles, based on concern for production (task) and concern for people (relationship), emerged:

1. Impoverished: This style uses minimal effort to get the work done.
2. Country club: This approach emphasizes attention to the needs of people to effect satisfying
3. Authority-obedience: This style strives for efficiency in operations.
4. Organizational man: This approach works on balancing the necessity to accomplish the task
with maintaining morale.
5. Team: This style promotes work accomplishment from committed people and inter-dependence
through a common stake, leading to trust and respect.

Hersey and colleagues (2001) noted that Blake and Mouton’s (1964) conceptualization tended
to be an attitudinal model that measured the values and feelings of managers, whereas the Ohio State
model included both attitudes and behaviors and focused on leadership. Both the leadership style (task
versus relationship) and the attitude of the leader about leadership behaviors are important. However,
they still did not fully capture the leadership experience because the environment was not factored in.


This theory was developed by Elton Mayo and Fritz R., They believe that real power centers
within the organization are the interpersonal relationship established within the work organization.
Increase in productivity was attributed to the attitude of workers towards each other and their feeling
of togetherness. In addition, attention paid to the workers by researches made them feel important
which resulted in improvement in their work performance. It suggests that organization should be
developed around human relation ship including those between leaders/ managers and employees. The
finding of this study concludes that a leader not only should plan, decide, organize, lead and control
but also consider the human element.

Douglas McGregor (1960) Categorized leadership style into two brand categories in his
management theories, i.e. theory X and theory Y. Manager who believes in theory X and assumes that
people inherently dislike work and will avoid it when possible and the average individual prefer to be
directed, want to avoid responsibility and are more interested in financial incentives than personal
achievement. Therefore, the style of leadership exercises strong controls and directions and where ever
necessary punish people if they do not do the work and people who work as desired, they get monetary
benefits or other rewards.
In contrast to the theory X, the theory Y provides a more accurate assessment of human nature
that encourages workers to develop their full potential. This theory assumes that employees can enjoy
physical and mental work and also enjoy play and rest. Employees are capable of self motivation
andjob satisfaction if they are happy in the organization and committed to its goals. Theory Y leaders
assumes that people will work hard and assume responsibility, if they can satisfy their personal needs
and the objectives or goals of their organization. It is suggested that theory Y organization will satisfy
higher human needs, resulting in greater employee responsibility and in turn, higher productivity.


The basic premise of interactional theory is that leadership behaviour is generally determined
by the relationship between the leader’s personality and the specific situation.

Schein (1970) was the first to propose a model of humans as complex beings whose working
environment was an open system to which they responded. A system may be defined as a set of objects
with relationships between the objects and between their attributes. Schein’s model based on systems
theory has the following assumptions:
• People are very complex and highly variable. They have multiple motives for doing things. For
example a pay raise might mean status to one person, security to another and both to a third.
• People’s motives do not stay constant but change over time.
• Goals can differ in various situations.
• A person’s performance and productivity are affected by the nature of the task and by his
ability, experience and motivation.
• No single leadership strategy is effective in every situation.

Ouchi (1981) was a pioneer in introducing interactional leadership theory in his application of
Japaneese style management to corporate America. Theory Z, the term Ouchi used for this type of
management is an expansion of McGregor,s Theory Y and supports democratic leadership.
Characteristics of theory Z include consensus decision making, fitting employees to their job, job
security, and slower promotions, examining the long term consequences of management decision
making, quality circles, guarantee of lifestyle employment, establishment of strong bonds of
responsibility between superiors and subordinates, and a holistic concern for the workers. Ouchi was
able to find components of Japanese style management in many successful American companies.

Nelson and burns suggested that organizations and their leaders have four fundamentals levels
and that these levels influence productivity and worker satisfaction. The first of these levels is reactive.
The reactive leader focus on the past, is crisis driven and is frequently abusive to subordinates. In the
next level, responsive, the leader is able to mold subordinates to work together as a team, although the
leader maintains most decision making responsibility. At the proactive level, the leader and the
followers become more future oriented and hold common driving values. Management and decision
making are more participative. At the last level, high performance teams, maximum productivity and
worker satisfaction are apparent.


Following the eras of trait, attitudinal, and situational leadership theories, an interest arose in
how leaders produced quantum results. Burns (1978) and Dunham and Klafehn (1990) broadened the
concept of leadership styles to include two types of leaders: the transactional leader and the
transformational leader.

A transactional leader is defined as a leader or manager who functions in a caretaker role and is
focused on day-to-day operations. Such leaders survey their followers’ needs and set goals for them
based on what can be expected from the followers. A transactional leader is focused on the
maintenance and management of ongoing and routine work.

A transformational leader is defined as a leader who motivates followers to perform to their full
potential over time by influencing a change in perceptions and by providing a sense of direction.
Transformational leaders use charisma, individualized consideration, and intellectual stimulation to
produce greater effort, effectiveness, and satisfaction in followers.

The transactional leader is more common. This type of leader approaches followers in an
exchange posture, with the purpose of exchanging one thing for another, such as politician who
promises jobs for votes. Burns (1978) said that transactional leadership occurs when the leader takes
the initiative in contacting others for the exchange of valued things. Therefore transactional leadership
is comparable to a bargain or contract for mutual benefits that aids the individual differences of both
the leader and the follower. Key characteristics are contingent rewards and management-by-exception.
Expected effort and expected performance are the outcomes. The transactional leader works within
the existing organizational culture and is an essential component of effective leadership. In nursing an
example would be the exchange of a salary for the services of a nurse to provide care. Another
example occur when a leader offers release time to entice staff members to do quality monitoring or
committee work. Continuous or incremental change, the first order of change, can be handled well at
the transactional level.

Transformational leadership occurs when persons engage with others so that leaders and
followers raise each others to higher levels of motivation and ethical decision making (Burns, 1978).
Instead of emphasizing differences between the leader and the followers, transformational leadership
focuses on collective purpose and mutual growth and development. Transformational leadership
augments transactional leadership by being committed, having a vision, and empowering other to
heighten motivation in a way that attains extra effort beyond performance expectations.
Transformational leadership is used for higher-order change and to change the organization’s culture.
Circumstances of growth, change, and crisis call forth transformational leaders. In nursing an example
would be “magnet hospitals”, where the nursing organizations facilitate the best effort in their staff.

Organizations with a transformational leader would exhibit characteristics such as pride and
satisfaction in the work, enthusiasm, team spirit, a sense of accomplishment, and satisfaction (Barker
1990). Bennis and Nanus (1985) identified the following four activities for transformational
1. Creating a vision
2. Building a social architecture that provides meaning for employees
3. Sustaining organizational trust
4. Recognizing the importance of building self-esteem.

Three factors underlie effectiveness as a transformational leader: individual consideration,

charisma, and intellectual stimulation. Transformational leadership was the type of leadership most
often reported in magnet research studies (Upenieks, 2003). Transformational leadership qualities
appear to be better suited to the work of professionals. Nurses can experiment with transformational
leadership and work to set up structures to facilitate this in practice.

Using charisma, Performance

inspiration, and intellectual beyond
stimulation, this leader causes Institutional expectation
the followers to rise above their culture and altered
Transformational own needs and, thus changing institutional
Leader the culture, obtains higher culture
levels of effort and

Identifies the needs Effort produced

Transactional of followers and provides Institutional and performance
leader rewards to meet those culture obtained is as
needs in exchange for expected
expected performance
Transactional and transformational leadership

Transactional leader Transformational leader

• Focuses on management tasks • Identifies common values
• Is a caretaker • Is committed
• Uses trade-offs to meet goals • Inspires others with vision
• Does not identify shared values • Has long tern vision
• Examines causes • Looks at effects
• Uses contingency rewards • Empowers others


Although Greenleaf developed the idea of servant leadership more than 30 years ago, it
continues to influence the leadership thinking in the 21st century. Greenleaf argued that to be a great
leader, one must be a servant first. Servant leaders consider their followers needs first and then
empower them to achieve organizational goals. This is very different from the traditional management
where the organizational goals and needs are paramount. Trust is the corner stone of servant leadership
and that mutual respect and feedback are an essential par of the leader-follower relationship.


Followers influence leaders in both positive and negative ways. Followers can and do mislead
leaders whether intentionally or not. Leaders can counteract this by keeping vision and values front
and center, cultivating truth tellers, honoring one’s intuition, making sure followers are allowed to
disagree, setting a good ethical climate and delegating appropriately. In doing so the leader creates an
atmosphere where follower influence will more likely result in positive rather than negative outcomes.


Principal agent theory which emerged in the 1960s and 1970 is another interactive leadership
theory being actively explored in the 21st century. This theory suggests that not all followers (agents)
are inherently motivated to act in the best interest of the principal (leader or employer). This is because
followers may have an informational advantage over the leader as well as their own preferences, which
may deviate from the principal’s preferences. The risk then is that agents will pursue their own
objectives or interest instead of that of their principal.
Principals then must identify and provide agents with appropriate incentives to act in the
organization’s best interest. For example, consumers with good health insurance and small out-of-
pocket expenses may have little motivation to act prudently in accessing health care resources, since
payment for services used will come primarily from the insurer. The insurer then must create
incentives for agents who access only needed services.

Another example might be end of shift over time. While most employees do not intentionally
seek or want to work overtime after a long and busy shift, the reality is that doing so typically results
in financial rewards. Employers then must either create incentives that reward employees who are able
to complete their work in the allotted shift time or create disincentives for those who do not.


Human capital refers to a group’s collective knowledge, skills, and abilities. Human capital
theory recognizes that individuals and organizations invest in human capital in anticipation of gains in
the forms of increased productivity and financial returns. Human capital can be viewed from both an
individual and an organizational perspective. From the individual perspective, human capital includes
the knowledge and skills that result from education, training and experience. From an organizational
perspective, human capital refers to the collective group knowledge or experience. This aggregate of
human capital is sometimes called social capital, although social capital tends to refer more to social
connectedness within communities.

Simon and Norris (2004-2005) differentiate between human and social capital in their assertion
that “human capital is ultimately the property of the individual-it is what an employee can do. Social
capital accrues with in the organization. It determines what a group of employees can-and will-
accomplish together”. Simon and Norris go on to say that social capital is all about relationships and
the relationships are increasingly important for contemporary organizations to achieve their goals.

Another leadership theory gaining prominence in the early 21st century is that of emotional
intelligence. Reeves suggest that “cognitive intelligence is only half of the equation necessary for
success in the workplace”. The other half and the most important half she argues is emotional
intelligence. Rao (2006) concurs, arguing that while IQ and technical skills are increasingly being
recognized as critical to successful leadership and management, it is emotional intelligence that is the
“sine qua non (an essential condition or requirement )of leadership”.
Broadly defined, emotional intelligence is the capacity to get optimal results from relationships
with others. In their original work on EI in 1990, Salovey and Mayer suggested that EI develops with
age and that it consists of three mental processes:
• Appraising and expressing emotions in the self and others
• Regulating emotion in self and others
• Using emotions in adaptive ways
In 1997, they further refined EI into four mental abilities: perceiving/identifying emotions,
integrating emotions into thought processes, understanding emotions, and managing emotions.

Five components of emotional intelligence:

1. Self awareness: the ability to recognize and understand one’s moods, emotions, and drives as
well as their effects on others.
2. Self regulation: the ability to control or redirect disruptive impulses or moods as well as the
propensity to suspend judgment.
3. Motivation: a passion to work for reasons that go beyond money or status; a propensity to
pursue goals with energy and commitment.
4. Empathy: the ability to understand and accept the emotional makeup of other people.
5. Social skills: proficiency in handling relationships and building networks; an ability to find
common ground.

Another emerging leadership theory is that of the authentic leadership. The concept of
authentic leadership emerged in the late 1990s as a part of positive organizational scholarship, a broad
field of scientific enquiry that emphasizes positive organizational phenomena leading to enhanced
human well being. Authentic leadership suggests that in order to lead, leaders must be true to
themselves and their values and act accordingly. Stanley (2006) calls this phenomenon congruent
leadership and defines it as “a match (congruence) between the activities, actions, and deeds of the
leader and the leader’s values, principles and believes”.

It is important to remember that authentic or congruent leadership theory differs somewhat

from more traditional transformational leadership theories, which suggests that the leader’s vision, or
goals are often influenced by external forces and that there must be at least some “buy-in” of that
vision by followers. In authentic leadership, it is the leader’s principles and their conviction to act
accordingly that inspires followers. Thus, authentic followers realize their own true nature.
Five distinguishing characteristics of the authentic leader
1. Purpose: authentic leaders understand their own purposes and passions as a result of ongoing
self-reflection and self-awareness.
2. Values: authentic leaders link between purpose and passions by having congruence in believes
and actions.
3. Heart: authentic leaders care for themselves and the people they lead, and their compassion in
4. Relationships: authentic leaders value building relationships and establishing connections with
others, not to receive rewards but rather to strengthen the human connection.
5. Self-discipline: authentic leaders practice self discipline by incorporating balance into their
personal and professional lives.

Ilies, Morgeson and Nahrgang (2005) developed a four-component model of authentic

leadership comprising self-awareness, unbiased processing, authentic behavior/acting and authentic
relational orientation. Self-awareness refers to one’s awareness of, and trust in, one’s motives, feelings,
cognitions, strengths, and weaknesses as well as one’s emotions and personality. Unbiased processing
refers to the objective processing of self-relevant information, such as private knowledge, internal
experiences and external information. It also means being able to accurately interpret task feedback
and estimate personal skill level in specific areas. Authentic behavior/acting refers to acting in accord
with your beliefs, values, preferences and needs. Authentic relational orientation, the fourth component
of this model, “involves valuing and striving for achieving openness and truthfulness in relationships”.
There are many reasons why employees who work for authentic leaders are generally more
satisfied and motivated. First, authentic leaders provide an atmosphere conducive to the experience of
positive emotions. Second, leaders can serve as a positive behavioral model for personally expressive
and authentic behaviors. Third, leaders can support the self determination of followers, in part by
providing opportunities for skill development and autonomy. Finally, through a process of social
exchange, leaders can influence and elevate followers.

It applies to a person who is recognized among his or her peers for innovative ideas and who
demonstrates the confidence to promote those ideas. Thus thought leadership refers to any situation in
which one individual convinces another to consider a new product, idea or way of looking at things.
To be recognized as a thought leader, individuals must choose ideas that make a significant
difference versus those that have marginal impact. Important ideas that solve some existing problems
in the organization or that support organizational goals will always be more valued than those that do
Thought leaders always challenge the status quo and attract followers not by any promise of
representation or empowerment but by their risk taking and vision in terms of being innovative.

This theory which emerged in the 1990s builds upon transformational leadership and suggests
that leaders must work together with subordinates to identify common goals, exploit opportunities and
empower staff to make decisions for organizational productivity to occur. This is especially true during
periods of rapid change and needed transition.
Building on quantum physics, which suggests that reality is often discontinues and deeply
paradoxical, quantum leadership suggests that the environment and context in which people work is
complex and dynamic and that this has a direct impact on organizational productivity.
The theory also suggests that the change is constant. A highly flexible and mobile environment
which is today’s workplace calls for an entirely innovative set of interactions and relationships as well
as the leadership necessary to create them. Because the health care industry is characterized by rapid
change, there is great potential for intra-organizational conflict. Quantum leader is able to address the
unsettled space between present and future and resolve these conflicts appropriately, creating a better
healing environment for both the providers and consumers of health care. This is because there are two
prevailing realities at any given time: the actual reality and the potential reality. The actual reality is
what we perceive at a given moment. The potential reality is “current and present to us at any given
moment, but while present, has not yet been experienced”. It is the leaders role to engage unfolding
reality in advance of others experiencing it; to see it’ note its demands and implications, translate if for
others and then guide others into processes that will act in concert with the demands of a reality that is
not yet present but inexorably and continually becoming.

The new role of leader as a cultural bridge has become a requirement as our society becomes
more diverse. Diversity is the differences among groups or between individuals. Diversity
acknowledges that not everyone is alike and that for understanding and growth to occur, it is
imperative to acknowledge our differences. Contemporary leader-managers must appreciate the
diverse points of view, leverage the strengths, and value the differences in colleagues from various
generations so that individuals can form creative, adaptable and cohesive work group.


In considering all of these emerging leadership theories, it becomes apparent that a paradigm
shift is taking place early in the 21st century—a transition from industrial age leadership to relationship
age leadership.
Scott contends that industrial age leadership focused primarily on traditional hierarchical
management structures, skill acquisition, competition and control. These are the same skills
traditionally associated with management. Relationship age leadership focuses primarily on the
relationship between the leader and his or her followers, on discerning common purpose, working
together cooperatively and seeking information rather that wealth. Servant leadership, authentic
leadership, emotional intelligence and cultural bridging are all relationship centered theories that
address the complexity of the leader-follower relationship.
Yet the leader manager in contemporary health care organizations can and must not focus
solely on relationship building. Assuring productivity and achieving desired outcomes are essential to
organizational success. The key, then, likely lies in integrating the two paradigms.
Technical skills and competence seeking must be balanced with the adaptive skills of
influencing followers and encouraging their abilities. Performance and results priorities must be
balanced with authentic leadership and character. In other words leader-managers must seek the same
tenuous balance between leadership and management that has existed since time began.


Performance Results

Skills Abilities

Technical Leade Adaptive

Competence Influence

Character Authenticity

Leaders ask questions such as these: What needs to be done? What can I do to make a
difference? What are the goals? What constitutes performance and results? Thus leaders do not need to
know all the answers, but they do need to ask the right questions (Heifetz & Laurie, 1997).

Leaders are active, not passive. The risk-taking element of leadership involves taking action.
Leaders engage their environment with behaviors of doing, influencing, and moving. These are action
terms. To lead successfully a leader must demonstrate two active, essential, and interrelated traits:
expertise and empathy. Leaders are those who talk about adventures into new territory and take the
risks inherent in innovation. Leadership means giving guidance and using a focused vision.

Great leaders’ posses the following four essential skills:

1. The ability to engage others in shared meaning
2. A distinctive and compelling vocal tone
3. A sense of integrity
4. A combination of hardiness and ability to grasp context, called “adaptive capacity”.

Characteristics such as knowledge, motivating people to work harder, trust, communication,

enthusiasm, vision, courage, being able to see the big picture, and the ability to take risks are
associated with important leadership qualities in research findings. Kouzes and Posner (1987) defined
the following five behaviors that correlated with leadership excellence:

1. Challenging the process: Leaders go beyond the status quo to search for opportunities, experiment,
and take risks to achieve lofty goals.
2. Inspiring shared vision: Leaders envision the future and enlist others in sharing the dream.
3. Enabling other to act: Leaders foster collaboration and develop and strengthen others o that the
whole team performs well.
4. Modeling the way: Leaders set an example and structure events so that incremental progress is
celebrated as small wins.
5. Encouraging the heart: Leaders appreciate and recognize individual contributions and formally
celebrate accomplishments.

These five practices indentified by Kouzes and Posner can be seen as the way leaders get
extraordinary things done though people in an organization. The practices and qualities of leadership
help nurses to enrich their own style and contribute to a more productive workplace. The following
list identifies qualities that people say they want to see in their leaders:

 Visibility: People want to see their leaders and have frequent: casual contacts with them.
 Flexibility: People learn from leaders who can “roll with the punches,” tolerate ambiguity, and
have a sense of personal empowerment.
 Authority: This is the right to make decision, give direction, and accept/administer criticism.
Authority is recognition granted from below.
 Assistance: This occurs by serving those who serve, create, or produce and by creating the
environment and resources necessary to do the job.
 Feedback: People want their leaders to listen to them and give them quality feedback as they go
about their particular work.

The following eight competencies of leaders are synthesized from the literature by Murphy and
DeBack (1991)
1. Managing the dream
2. Mastery of change
3. Organizational design
4. Anticipatory learning
5. Taking the initiative
6. Mastery of interdependence
7. Holding high standards of integrity
8. Exercising broad-perspective decision making

Although the lists of leadership characteristics and competencies vary somewhat, the functions
of visioning, setting the direction, inspiration, motivation and enabling systems and followers are at the
core of leadership activity.

Characteristics associated with leadership

• Intelligence • Adaptability • Ability
• Knowledge • Creativity • Able to enlist
• Judgment • Cooperativeness cooperation

• Decisiveness • Alertness • Interpersonal skills

• Oral fluency • Self-confidence • Tact

• Emotional intelligence • Personal integrity • Diplomacy

• Independence • Emotional balance and • Prestige
• Personable control • Social participation


• Decision maker • Coach • Forecaster

• Communicator • Counselor • Influencer
• Evaluator • Teacher • Creative problem
• Facilitator • Critical thinker solver

• Risk taker • Buffer • Change agent

• Mentor • Advocate • Diplomat

• Energizer • Visionary • Role model


According to Patrick J. Montana and Bruce H. Charnov, the ability to attain these unique
powers is what enables leadership to influence subordinates and peers by controlling organizational
resources. The successful leader effectively uses these powers to influence employees, and it is
important for the leader to understand the uses of power to strengthen the leadership functioning.

The authors distinguish the following types of organizational power:

• Legitimate Power refers to the different types of professional positions within an organization
structure that inherent such power. E.g. Manager, Vice President, Director, Supervisor, et
cetera. These levels of power commands to the hierarchical executive levels within the
organization itself. The higher position such as President of the company has a higher power
than the rest of professional positions in the hierarchical executive levels.

• Reward Power given the power to managers that attain administrative power over a range of
rewards. Employees whom work for managers desire the reward from the manager, they will
be influenced by receiving them as the product of work performance. The rewards may be the
obvious—pay raise or promotions.
• Coercive Power given the manager's ability to punish an employee whom did not follow the
company policy, loss of profit, etc. Punishment can be determined range of mild to serious
punishment... a mild punishment is a suspension and serious punishment is actual termination.

• Expert Power an expert power attained by the manager by their own talents such as skills,
knowledge, abilities, or previous experience. Any of these managers has the power within the
organization will be very valuable and important manager in the company.

• Charisma Power a manager has a charisma that will positively influence on workers, and
admired manager that creates the opportunity for interpersonal influence. A person has
charisma, and this will confer great power as a manager.

• Referent Power a power that is gained by association. This person with whom he or she is
associated or has a relationship, often referred to assistant or deputy.

• Information Power a person who has possession of important information at an important

time when such information is needed to organizational functioning. Someone who has this
information knowledge has genuine power. Manager's secretary would be in a powerful
position if a secretary has information power.


For managers and leaders to function at their greatest potential, the two must be integrated.
Integrated leader-managers posses’ six distinguishing traits:
1. They think long term. They are visionary and futuristic. They consider the effect that their
decisions will have years from now as well as their immediate consequences.
2. They look outward, toward the larger organization. They do not become narrowly focused.
They are able to understand how their unit or department fits into the bigger picture.
3. They influence others beyond their own group. Effective leader-manager rises above an
organization’s bureaucratic boundaries.
4. They emphasize vision, values, and motivation. They understand intuitively the unconscious
and often non-rational aspects that are present in interactions with others. They are very
sensitive to others and to differences in each situation.
5. They are politically astute. They are capable of coping with conflicting requirements and
expectations from their many constituencies.
6. They think in terms of change and renewal. The traditional manager accepts the structure and
processed of the organization, but the leader-manager examines the ever-changing reality of the
world and seeks to revise the organization to keep pace.

Leadership is a natural element of nursing practice because the majority of nurses practice in
work groups and units. Possessing the license of an RN implies certain leadership skills and requires
the ability to delegate and supervise the work of others. Leadership can be seen as the ability to inspire
confidence and support among followers, especially in organizations where leadership is focused
toward those whose competence and commitment produce performance.