Chapter 17   Managers as Leaders

Leaders in organizations make things happen. But what makes leaders different from nonleaders? What’s the most appropriate style of leadership? What can you do to be seen as a leader? Those are just a few of the questions we’ll try to answer in this chapter. Focus on the following learning outcomes as you read and study this chapter.

LEARNING OUTCOMES 

17.1 Define leader and leadership.
17.2 Compare and contrast early theories of leadership.
17.3 Describe the three major contingency theories of leadership.
17.4 Describe contemporary views of leadership.
17.5 Discuss contemporary issues affecting leadership.

A MANAGER’S DILEMMA 

What is the difference between being a manager and being a leader? Are these terms synonymous? Management guru Peter F. Drucker once said, “Management is doing things right; leadership is doing the right things.” You might begin the study of Chapter 17 by asking your students for their perspectives on these questions and the quotation from Dr. Drucker.

In “A Manager’s Dilemma,” students are introduced to Adrian Lajtha, Chief Leadership Officer at Accenture.  Lajtha is responsible for developing leaders within Accenture and also succession planning, diversity, and even Accenture’s corporate citizenship.  Lajtha is charged with attempting to identify future leaders for the organization – those who will take on significant leadership roles from years from now.  Students are then asked to contemplate how Lajtha can continue to build trust between leaders and follows at Accenture. 
 
In their study of Chapter 17, students will explore the evolution of leadership theory and examine leadership issues in the twenty-first century. As they learn about leadership styles of effective leaders, they will discover the importance of striving to develop traits and to practice behaviors at the present time. By putting their knowledge of leadership into action, your students will begin to acquire the ability to influence others to achieve the goals of the organizations they will serve in the near future.

 
 CHAPTER  OUTLINE

INTRODUCTION
 The quality of leadership is an important element in an organization’s success, since leaders influence employees to work together toward the fulfillment of a company’s mission and the achievement of its goals.

1. WHO ARE LEADERS, AND WHAT IS LEADERSHIP
 Certain distinctions can be made between managers and leaders.
A. While managers are appointed and have legitimate power within the organization, a leader is someone who can influence others and who has managerial authority.
B. Leadership is the process of influencing a group to achieve goals.

2. EARLY LEADERSHIP THEORIES
 Researchers began to study leadership in the early twentieth century and developed behavioral theories that focused on the leader (trait theories) and how the leader interacts with his or her group members.
A. Leadership Trait Theories
1. Research in the 1920s and 1930s focused on traits of the leader, with the intent to isolate characteristics that might by used to differentiate leaders from nonleaders.
2. Identifying a set of traits consistently associated with the process of leadership proved to be more successful than one set of traits that would always differentiate leaders from nonleaders.
3. Six traits associated with effective leadership are described in Exhibit 17-1.
B. Leadership Behavior Theories
1. Researchers began to hope that a behavioral theories approach would provide more definitive information about the nature of leadership than did trait theories.
2. Four main leader behavior studies are summarized in Exhibit 17-2.
a. University of Iowa Studies. Kurt Lewin and his associates explored three leadership styles: autocratic, democratic, and laissez-faire.
b. The Ohio State Studies identified two important dimensions of leader behavior:  initiating structure and consideration.
c. University of Michigan Studies identified two dimensions of leader behavior:  leaders who were employee oriented and leaders who were production oriented.
d. The Managerial Grid is a two-dimensional grid used to appraise leadership styles using “concern for people” and “concern for production” as dimensions.
3. Predicting leadership success involved more than isolating a few leader traits or behavior. The lack of success in attaining consistent results led to a focus on situational influences.

3. CONTINGENCY THEORIES OF LEADERSHIP
A. The Fiedler contingency model, developed by Fred Fiedler, is a contingency theory proposing that effective group performance depended upon the proper match between a leader’s style of interacting with his/her followers and the degree to which the situation allowed the leader to control and influence.
1. Fiedler developed the least-preferred coworker (LPC) questionnaire, which measures whether a person is task or relationship oriented. This questionnaire contained 18 pairs of contrasting adjectives.  Respondents were asked to think of all the coworkers they had ever had and to describe the person they least preferred to work with, using the 18 sets of adjectives.  Fiedler believed that a person’s basic leadership style could be determined on the basis of their answers.

2. Fiedler also isolated three situational criteria that he believed could be manipulated to create the proper match with the behavioral orientation of the leader:
a. Leader-member relations described the degree of confidence, trust, and respect subordinates have in their leader.
b. Task structure described the degree to which job assignments were formalized and procedurized.
c. Position power described the degree of influence a leader had over power-based activities such as hiring, firing, discipline, promotions, and salary increases.
3. Next, Fiedler used the above variables to evaluate the situation. He defined eight different situations in which a leader could find himself or herself. (See Exhibit 17-3)
4. The Fiedler model proposes matching an individual’s LPC and an assessment of the three contingency variables to achieve maximum leadership effectiveness.
5. Fiedler concluded that task-oriented leaders tend to perform better in situations that are either very favorable or very unfavorable to them.
6. He concluded that relationship-oriented leaders perform better in moderately favorable situations.
7. Fiedler believed that an individual’s leadership style was fixed; he concluded that leader effectiveness could be improved in only two ways:
a. Bring in a new leader whose style fits better to the situation.
b. Change the situation to fit the leader.
8. Research has generally supported the validity of Fiedler’s model. However, some drawbacks are associated with the model.
B. Hersey and Blanchard’s Situational Leadership Theory (SLT) is a leadership contingency theory developed by Paul Hersey and Ken Blanchard that focuses on followers’ readiness.
1. Hersey and Blanchard propose that successful leadership is achieved by selecting the right leadership style that matches the level of the followers’ readiness.
2. Readiness is the extent to which people have the ability and willingness to accomplish a specific task.
3. SLT uses the same leadership dimensions identified by Fiedler: task and relationship behaviors.
4. Each of the two leadership dimensions is considered either high or low and then combined into four specific leadership styles.
5. Research efforts to test and support this theory generally have been disappointing, possibly because of internal ambiguities or inconsistencies in the model itself.
C. Path-goal theory, developed by Robert House, is a leadership theory that purports that it is the leader’s job to assist his or her followers in attaining their goals and to provide the direction or support needed to ensure that their goals are compatible with the overall objectives of the organization.  (See Exhibit 17-4)
1. Four leadership behaviors were identified by House:
a. The directive leader lets subordinates know what is expected of them, schedules work to be done, and gives specific guidance on how to accomplish tasks.
b. The supportive leader is friendly and shows concern for subordinates’ needs.
c. The participative leader consults with subordinates and uses their suggestions before making a decision.
d. The achievement-oriented leader sets challenging goals and expects subordinates to perform at their highest level.
2. The path-goal theory proposes two classes of situational or contingency variables that moderate the leadership behavior-outcome relationship:
a. Variables in the environment that are outside of the control of the follower
b. Variables that are part of the personal characteristics of the follower
3. The following hypotheses have evolved from path-goal theory:
a. Directive leadership leads to greater satisfaction when tasks are ambiguous or stressful than when they are highly structured and well laid out.
b. Supportive leadership results in high employee performance and satisfaction when subordinates are performing structured tasks.
c. Directive leadership leads to higher employee satisfaction when there is substantive conflict within a work group.
d. Achievement-oriented leadership increases subordinates’
expectancies that effort will lead to high performance when tasks are ambiguously structured.
e. Subordinates with an external locus of control will be more satisfied with a directive style.
f. Achievement-oriented leadership will increase subordinates’ expectations that effort will lead to high performance when tasks are ambiguously structured.
4. Although not every research finding has been positive, the majority of the evidence supports the following logic underlying path-goal theory:
a. Employee performance and satisfaction are likely to be positively influenced when the leader compensates for shortcomings in either the employee or the work setting.
b. However, if the leader spends time explaining tasks when those tasks are already clear or when the employee has the ability and expe¬rience to handle them, the employee is likely to see such behavior as redundant or even insulting.

4. CONTEMPORARY VIEWS ON LEADERSHIP
 The most current approaches to looking at leadership are discussed in this section of the text.
A.   Leader-Member Exchange (LMX) Theory states that leaders create in-groups and out-groups and those in the in-group will have higher performance, less turnover, and greater job satisfaction.
1.   The leader will categorize a follower as an “in” or an “out.”  Both leader and follower must “invest” in the relationship.
2.  The leader does the choosing, but the follower’s characteristics drive the decision.
3.  Research is supportive of the LMX theory.
B. Transformational-Transactional Leadership
What is the difference between transactional and transformational leaders?
1. Transactional leaders are leaders who lead primarily by using social exchanges (or transactions).
2. Transformational leaders are leaders who stimulate and inspire (transform) followers to achieve extraordinary outcomes. Evidence supporting the superiority of transformational leadership over transactional leadership is overwhelmingly impressive.
C. Charismatic-Visionary Leadership 
1. A charismatic leader is an enthusiastic, self-confident leader whose personality and actions influence people to behave in certain ways.
a. Five personal characteristics of charismatic leaders have been identified.  Charismatic leaders have a vision, are able to articulate that vision, are willing to take risks to achieve that vision, are sensitive to both environmental constraints and follower needs, and exhibit behaviors that are out of the ordinary
b. An increasing amount of research shows impressive correlations between charismatic leadership and high performance and satisfaction among followers. Most experts think that individuals can be trained to exhibit charismatic behaviors.
c. Charismatic leadership may not always be needed to achieve high levels of employee performance. This type of leadership may be most appropriate when an employee’s job has a significant amount of ideological content.
2.  Visionary leadership is the ability to create and articulate a realistic, credible, and attractive vision of the future that improves upon the present situation.
a. If the vision is properly selected and implemented, it can energize individuals to use their skills, talents, and resources to fulfill the vision.
b. An organization’s vision should tap into people’s emotions and inspire enthusiasm.  Visions that are clearly communicated are generally more accepted.
D. Team Leadership. As work teams become more prevalent in the workplace, the role of team leader becomes increasingly important.
1. The existence of work teams necessitates that managers learn how to become effective team leaders.
2. Skillful team leaders master the difficult balancing act of knowing when to leave their teams alone and when to become involved.
3. A team leader has two priorities:
a. Managing the team’s external boundaries
b. Facilitating the team process
4. These two priorities can be broken down into four specific leadership roles (see Exhibit 17-5):
a. Liaisons with external constituencies
b. Troubleshooters
c. Conflict managers
d. Coaches

5. LEADERSHIP ISSUES IN THE TWENTY-FIRST CENTURY
 The concept of leadership is continually being refined. This section of the text examines several contemporary issues in leadership.
A. Managing Power
Power is the capacity of a leader to influence work actions or decisions. Because leaders must influence others, we need to look at how leaders acquire power. French and Raven identified five sources or bases of power.
1. Legitimate power is the power a leader has as a result of his or her position in the organization.
2. Coercive power is the power a leader has because of his or her ability to punish or control.
3. Reward power is the power a leader has because of his or her ability to give positive benefits or rewards.
4. Expert power is influence that is based on expertise, special skills, or knowledge.
5. Referent power is power that arises because of a person’s desirable resources or personal traits.
6. Most effective leaders rely on several different bases of power.

B. Developing Trust
1. Credibility is the degree to which followers perceive someone as honest, competent, and able to inspire.
2. Trust is the belief in the integrity, character, and ability of a leader.
3. Research has identified five dimensions that make up the concept of trust:
a. Integrity (honesty and truthfulness)
b. Competence (technical and interpersonal knowledge and skills)
c. Consistency (reliability, predictability, and good judgment in handling situations)
d. Loyalty (willingness to protect a person, physically and emotionally)
e. Openness (willingness to share ideas and information freely)
4. Given the fact that many organizations have moved to self-managed work teams, establishing trust in the leadership is critical.
5. Some suggestions for leaders to use in building trust are found in Exhibit 17-6.
C.  Empowering Employees
Another method of leadership increasingly used by contemporary managers is the empowerment of employees.
1. The increased use of empowerment is being driven by two considerations:
a. Quick decisions often need to be made by the individuals who are most knowledgeable about particular issues.
b. Organizational downsizing has given managers larger spans of control, and in order to cope, managers are turning to employee empowerment.
D. Leading Across Cultures
National culture is an important situational variable in selecting the most appropriate style.
1. Findings from research are provided in Exhibit 17-7).
2. The GLOBE research program (introduced in Chapter Four) identifies universal aspects, including vision, foresight, trustworthiness, dynamism, positiveness, ability to provide encouragement, and proactiveness.
E. Becoming an Effective Leader
1. Leadership training takes many different forms, however, not everyone has what it takes to make a great leader.  Depending on the type of training, leaders may learn skills such as vision creation, trust building and mentoring.
2. Substitutes for Leadership. Certain individual, job, and organizational variables can act as “substitutes for leadership,” negating the importance of having an individual leader. Possible variables of this type include characteristics of followers (e.g., experience, training, professional orientation, or the need to be independent).
a. Routine, unambiguous, or intrinsically satisfying jobs may require little leadership.
b. Cohesive work groups, explicit formal goals, and/or rigid rules and procedures may serve as substitutes for leadership.

Answers to Review and Discussion Questions 

1. Define leader and leadership and explain why managers should be leaders.
 Students should be able to provide the definitions in the text – that a leader is someone who influences others and that leadership is the process of influencing others to achieve a goal.  However, encourage students to think about their own definitions of who a leader is and how they personally define leadership.

2.   What does each of the four behavioral leadership theories say about leadership?
 The University of Iowa Studies explored three styles of leadership:  autocratic, democratic, and laissez-faire.  Initial results found that a democratic style leader was more effective.  However, later studies had mixed results.  When group member satisfaction was examined, it was found that a democratic style was more effective than an autocratic one.  The Ohio State Studies found that a leader who was high in both initiating structure and consideration sometimes achieved high group task performance and high group member satisfaction, but not always.  The University of Michigan Studies presented two dimensions of leadership:  employee orientation and production orientation.  Researchers concluded that leaders who were employee oriented were able to get high group productivity and high group member satisfaction.  Finally, the Managerial Grid attempted to categorize various leadership behaviors.  Ultimately, the grid offered no answers to the question of what made a manager an effective leader; it only provided a framework for conceptualizing leadership style.

3.   Explain Fiedler’s contingency model of leadership.
 Fiedler’s model proposed that group performance was based upon the leader’s style and the amount of control in a given situation.  After a leader’s style is assessed through the least-preferred coworker questionnaire, three contingency dimensions are examined:  leader-member relations, task structure, and position power.  Ultimately, the model suggests that effectiveness is achieved when a leader is matched to a particular situation or if the situation is changed. 

4.   How do situational leadership theory and path-goal theory each explain leadership?
 Situational leadership theory focuses upon the readiness of followers.  It treats the leader and follower relationship like that of a parent and child.  As the child (follower) matures, the parent (leader) relinquishes more control.  Path-goal theory puts the focus on the leader and his or her ability to guide followers and remove obstacles. 

5.   What is leader-member exchange theory and what does it say about leadership?
 Leader-member exchange theory states that leaders establish “in-groups” and “out-groups.”  Those in the in-group will have higher performance, lower turnover, and greater job satisfaction.  This is due to the leader and follower investing in the relationship. 

6.   Differentiate between transactional and transformational leaders and between charismatic and visionary leaders. 
 A transactional leader guides and influences followers by exchanging rewards for the followers’ productivity.  A transformational leader stimulates and inspires followers to achieve extraordinary outcomes.  A charismatic leader is an enthusiastic, self-confident leader whose personality and actions influence people to behave in certain ways.  A visionary leader is one who articulates an appropriate vision for the future. 

7.   What are the five sources of a leader’s power?
 The five sources of a leader’s power are legitimate, coercive, reward, expert, and referent. 

8.  What issues do today’s leaders face?
 Today’s leaders face the issues of managing power, developing trust, empowering employees, leading across cultures, and becoming an effective leader.

9. Do you think that most managers in real life use a contingency approach to increase their leadership effectiveness? Explain.
 As managers participate in mentoring, development training, networking, and on-the-job experience, they should become more comfortable and adept in their use of a contingency approach to increase their leadership effectiveness. Organizations that offer leadership training often include contingency approaches. Ask your students to give examples to illustrate how their managers in the workplace use a contingency approach for successful leadership.

10. Do the followers make a difference in whether a leader is effective? Discuss.
It is the leader’s ability to get the follower to carry out the goals of the organization that ultimately determines a leader’s success.  However, if the followers are not skilled or do not have the appropriate knowledge to accomplish the task then the effectiveness of the leader suffers.  You may want to use the example of a coach who has lost key players due to unexpected injuries. If this player is taken out of the game, then the team may lose the game regardless of the quality of the coaching.

Ethics Dilemma 

Students are asked to assess the ethical concerns of a local school district terminating every teacher, principal, administrator and assistant in order to change the culture of the school district.  This exercise could be a short written assignment or serve as a group activity in class.  Obviously, students may have their opinion on the matter, but should be able to provide support for their stance on the issue.

Skills Exercise:  Developing your Choosing an Effective Leadership Style Skill 

Students are provided with six suggestions for choosing an effective leadership style.  They are then asked to consider two different situations from their past experiences.  In one, they are to think of a group or team which they had been a part and evaluate the leadership style of the leader.  In the second, they are asked to observe a successful sports team and evaluate the leadership styles.  Students should be able to use terms from the text while sharing their experiences and observations.

Working Together:  Team Exercise 

In groups of three to four individuals, students brainstorm a list of characteristics associated with a bad boss.  In addition, they will develop a list of steps to take if they find themselves working for a bad boss.  Though students’ responses will vary, try to encourage them to identify effective communication as an important component.

My Turn to be a Manager 
• Think of the different organizations to which you belong. Note the different styles of leadership used by the leaders in those organizations. Write a paper describing these individuals’ styles of leading (no names, please) and evaluate the styles being used.

• Write the names of three people you consider to be effective leaders. Make a bulleted list of the characteristics these individuals exhibit that you think make them effective leaders.

• Think about the times that you have had to lead. Describe what you think your own personal leadership style is. What could you do to improve your leadership style? Come up with an action plan of steps that you can take. Put all this information into a brief paper.

• Managers say that increasingly they must use influence to get things done. Do some research on the art of persuasion. Make a bulleted list of suggestions that you find on how to improve your skills at influencing others.

• Here’s a list of leadership skills: building employee communities, building teams, coaching and motivating others, communicating with impact, confidence and energy, leading by example, leading change, making decisions, providing direction and focus, and valuing diversity. Choose two of these skills and develop a training exercise that will help develop or improve each of them.

• Steve’s and Mary’s recommended readings: Stephen M. R. Covey with Rebecca Merrell, The Speed of Trust: The One Thing That Changes Everything (The Free Press, 2006); Nancy S. Ahlrichs, Manager of Choice (Davies-Black Publishing, 2003); John H. Zenger and Joseph Folkman, The Extraordinary Leader: Turning Good Managers into Great Leaders (McGraw-Hill, 2002); Robert H. Rosen, Leading People (Viking Penguin Publishing, 1996); Margaret J. Wheatley, Leadership and the New Science (Berrett- Koehler Publishers, 1994); Max DePree, Leadership Jazz (Dell Publishing, 1992); and Max DePree, Leadership Is an Art (Dell Publishing, 1989).

• Select one of the topics from the section “Leadership Issues in the Twenty-First Century.” Do some additional research on the topic and put your findings in a bulleted list. Be prepared to share this in class. Be sure to cite your sources.

• Interview three managers about what they think it takes to be a good leader. Write up your findings in a report and be prepared to present it in class.

• In your own words, write down three things you learned in this chapter about being a good manager.

• Self-knowledge can be a powerful learning tool. Go to mymanagementlab and complete these self-assessment exercises: What’s My Leadership Style? How Charismatic Am I? Do I Trust Others? Do Others See Me as Trusting? How Good Am I at Building and Leading a Team? Using the results of your assessments, identify personal strengths and weaknesses. What will you do to reinforce your strengths and improve your weaknesses?

Answers to Case Application 1 Questions 

Growing Leaders

1. What do you think about Buckley’s statement that leaders and managers differ?  Do you agree?  Why or why not?
Student responses will vary.  However, those who see a difference between management and leadership should be able to identify “influencing” as a key term associated with leadership.  Have students think of analogies where a manager and a leader may be two different individuals – such as a team captain and the coach.

2. What leadership models/theories/issues do you see in this case?  List and describe.
In this case, students may see various contingency theories of leadership as leaders are trained in one part of 3M for roles in potentially other parts of the company.  In addition, because of the attributes leaders are expected to have at 3M, students may associate these with transformational leadership.  Also, in Buckley himself, some students may recognize a visionary leadership style. 

3. Take each of the six leadership attributes that the company feels is important.  Explain what you think each one involves.  Then discuss how those attributes might be developed and measured.
 Student responses will vary greatly, but encourage students to think in terms of what they would expect from 3M employees if they were managers.  Also, when it comes to developing and measuring the attributes, have students apply good goal setting practices by ensuring that the measures are achievable, specific, and measurable. 

4. What did this case teach you about leadership?
 Though students may share their opinions regarding this question, encourage them to think about their own leadership styles.  What style of leadership are they already developing?  If they play a sport or are involved in a campus organization, how do they think teammates would characterize their leadership style?  Is that congruent with their own self-assessment?  Also, ask students if, based upon what they read, would they find 3M an enjoyable environment in which to work?  Why or why not?

Answers to Case Application 2 Questions 

Master and Commander

1. What do you think of this description of Captain Holly Graf’s leader style?  Do you think that Captain Graf could even be called a leader?  Discuss.
This case epitomizes the difference between a manager and a leader.  Students should question whether legitimate power does indeed make a leader.  In other words, does title alone ensure that subordinates will view the person “in charge” as a leader. 

2. What kinds of power do you think Graf used as a ship commander?  Explain your choices.
Though the case may not present a daily log of Graf’s actions, from what is illustrated, students should be able to point to legitimate power as the obvious source of power.  But, they may also identify coercive power in the way Graf behaved toward crews.   

3. Not surprisingly, this whole scenario rocked the Navy to its core since it reflected on the way the Navy chooses, promotes, and then monitors its handpicked leaders.  What changes, if any, do you think need to take place in its leadership training and development?
 Student responses will vary, but encourage them to think about the hierarchy involved.  If the students were Graf’s superior officer, how would that individual view the training process?  Or, if one of Graf’s crew members, what would that person view as important in terms of training and development?  Students might also consider the differences in leadership styles when one is operating in a time of war versus managing say, a retail store or a restaurant.  Is an autocratic style of leadership necessary on a Navy ship?  In every situation?   

4. Some critics of Graf’s treatment have said that institutional sexism played a role in her removal.  Do you think that could be possible?  Discuss.  Would that “excuse” the way she led?  Explain.
 As students consider this question, have them think about the pioneering steps Graf took in her career.  Being the first woman to command a destroyer is a significant accomplishment in the U.S. Navy.  Have students explore the contingency theory of leadership.  What if a leader chooses the wrong style of leadership in a given situation?  Is it possible that Graf was varying her leadership style, but in an incorrect fashion – such as using an autocratic style when she should have been more democratic or even laissez-faire?  And, is a military environment completely different than the private, business sector? 

ADDITIONAL CHAPTER INFORMATION 

An excellent topic for discussion is the failure of leadership that has been witnessed in many corporations in recent years. Have students gather articles on Enron, WorldCom, Andersen Consulting, Global Crossing, and Tyco.  You may want to ask students to find information about the present situation of the former leaders of these companies.

Another springboard for discussion on leadership is to have students brainstorm to compile a list of leaders and write the list on the board, where it can be easily seen by the entire class.  Then ask your students to identify the common characteristics that contribute to the success of all of these leaders. They will discover that no single, comprehensive list can be developed. This activity is an effective way to introduce the study of leadership trait theories.