Unit 5

Theories of Leadership

Definition of Leadership

● Ability to influence a group

● Achievement of vision or set of goals
● Strong leadership for effective management

Trait Theories

● Focus on personal qualities and characteristics

● Basis of selecting right people for leadership
● Big Five Personality Traits
○ Extraversion
■ Most predictive trait of effective leadership
■ More focused on emergence as a leader
■ Assertiveness critical
■ Effectiveness less
○ Agreeableness and Emotional Stability
■ No significant role in predicting leadership
○ Conscientiousness and Openness to Experience
■ Predicts effective leadership
■ Facets such as achievement-striving and dutifulness
● Dark Side Personality Traits
○ Midline scores on dark side traits - optimal
○ High/low scores - ineffective leadership
○ Higher side of scores - emergence of leaders
● Emotional Intelligence
○ Empathy - core component
 ○ Empathetic leaders
■ Sense other’s needs
■ Read reactions
○ Leader’s management and display of emotions
■ Influences feelings of others
○ Genuine sympathy and enthusiasm for good performance

Behavioural Theories

● Focus on training people to be leaders

● Behaviours differentiate leaders from non leaders
● Ohio State Studies
○ Sought to identify independent dimensions of leader behaviour
○ Two important dimensions
■ Initiating structure
■ Consideration
○ Initiating structure
■ Extent to which leader defines and structures his or her role and of their
subordinates to facilitate goal attainment
○ Consideration
■ Extent to which leader has job relationships characterised by mutual trust, respect
for subordinates ideas and regard for their feelings
● Leaders high in consideration
○ Job satisfaction
○ Motivated
○ Respected

Contingency Theories

● The Fiedler Model

○ Group performance dependent upon match between -
■ Leader style
■ Degree to which the situation gives control to the leader
 ○ Leadership style assumed to be stable
○ Least Preferred Coworker Questionnaire (LPC)
■ Task oriented (low LPC)
■ Relationship oriented (high LPC)
○ Three contingencies
■ Leader-member relations - the degree of confidence, trust, and respect
■ Task structure - the degree to which job assignments are regimented
■ Position power - influence derived from formal structural power
○ Higher task structure - more control of leader
○ Practical application of model problematic

● Situational Leadership Theory

○ Focus on the followers
○ Successful leadership dependent upon -
■ Selecting right leadership style contingent on the followers’ readiness
■ Extent to which followers are willing and able to accomplish a specific task
○ Unable and unwilling follower
■ Clear and specific directions
○ Unable and willing follower
■ High task orientation and high relationship orientation
○ Able and unwilling follower
■ Supportive and participative style
○ Able and willing
■ Nothing much to do

● Path Goal Theory

○ Leader’s job to provide followers with
■ Information
■ Support
■ Necessary resources
○ Components of path-goal leadership
■ Directive leadership - letting employees know what is expected of them and
giving guidance and direction.
 ■ Supportive leadership - friendly and approachable and concerned with well being
of employees
■ Participative leadership - consults with subordinates, involvement of employees
in decision making
■ Achievement oriented leadership - challenging goals and expectations for
employees to perform at high levels
○ Following predictions -
■ Directive leadership yields greater employee satisfaction when tasks are
ambiguous or stressful than when they are highly structured and well laid out.
■ Supportive leadership results in high employee performance and satisfaction
when employees are performing structured tasks.
■ Directive leadership is likely to be perceived as redundant among employees
with high ability or considerable experience.

● Leader-Participation Model
○ Leadership behaviour related to subordinate participation
○ Set of rules to determine the form and amount of participative decision making
○ Leaders reflect on task structure
 Contemporary Theories of Leadership

Leader-Member Exchange Theory (LMX Theory)

● Supports leaders’ creation of ingroups and outgroups

● Subordinates with ingroup status perform better and have greater job satisfaction
● Leader gives follower status of ‘in’ or ‘out’ during early interactions
● This status stabilises over time
● Factors affecting choice of ingroup
○ Demographic
○ Attitude
○ Personality
○ Gender
● Research evidence
○ Supportive of theory
● People in the ingroup
○ Higher performance ratings
○ Higher OCB
○ Lower CWB
○ Higher job satisfaction

Charismatic Leadership

● Max Weber
○ Charisma is a certain quality of an individual personality that sets them apart from the
ordinary people.
● Charismatic Leadership Theory
○ Followers attribute heroic leadership abilities when they observe certain behaviours and
tend to give these leaders power
● Are Charismatic Leaders Born or Made?
○ Born with charismatic personality traits
○ Extraversion and emotional stability
● Training to be Charismatic Leaders
 ○ Animated voice
○ Reinforce your message
○ Eye contact, gesture, and facial expression
● Key characteristics of Charismatic leaders
○ Vision and articulation
○ Personal risk
○ Sensitivity to follower needs
○ Unconventional behaviour
● How Charismatic Leaders influence Followers
○ Vision - a long term strategy for attaining a goal
○ Vision statement - formal articulation of organisation’s vision or mission
○ Followers likely to be -
■ Low in self esteem
■ Low in self worth
● Situational impact on Charismatic Leadership
○ Stress - people more receptive when they sense a crisis
○ Sleep deprivation - reduces leadership performance
● Dark side of Charismatic Leadership
○ Narcissistic traits
○ Can be corrupt

Transformational versus Transactional Leadership

● Transactional leaders
○ Guide or motivate followers in the direction of establishing goals by clarifying role and
task requirements
● Transformational leaders
○ Inspire, act as role models, and intellectually stimulate, develop, or mentor their
followers, thus having a profound effect on them
● Full range of leadership model
○ Laissez faire
■ Avoids making decision
○ Management by exception
■ Active - watches and searches for deviations and takes action
 ■ Passive - intervenes only of standards are not met
○ Contingent rewards
■ Rewards for effort
○ Individualised considerations
■ Gives personal attention
○ Intellectual stimulation
■ Promotes intelligence and problem solving
○ Inspirational motivation
■ Communicates high expectations
○ Idealised influence
■ Provides vision and sense of mission
● How transformational leadership works
○ Inspires and motivates followers
○ Increased job performance and OCB
○ Positive impact on employee creativity
○ Increased OC and contextual performance
● Evaluation of transformational leadership
○ Supported at diverse job levels
○ Greater impact on bottom line in smaller private firms
○ Where leaders can directly engage with workforce
● Transformational versus transactional leadership
○ Transformational leadership higher correlated with positive work outcomes
● Transformational versus charismatic leadership
○ Charismatic leadership more focused on leader communication
 Responsible Leadership

Authentic Leadership

● Leaders who know who they are, know what they believe in and value, and act on those values
and beliefs openly
● Ethical for their followers
● Share information
● Encourage open communication
● Humble and stick to their ideals
● Creates positive energy in team and heightens energy

Ethical Leadership

● Means the leader uses to achieve goals

● Highly ethical leaders evaluated positively
● Followers are
○ Motivated
○ Perform better
○ More engaged in OCB
● Ethical leaders can change norms
● Increased group awareness of moral issues
● Can matter for customer services too
● Socialised charismatic leadership
○ Leaders convey values that are other centred versus self centred and who role-model
ethical conduct.
○ Bring employee values in line with own values through actions

Abusive Supervision

● Supervision that is hostile both verbally and non verbally

● Factors related -
○ Injustice
 ○ Negative affect
○ Family history of aggression
● Consequences
○ Negatively affects health
○ Decreases organisational commitment
○ Adversely affect employee performance and behaviour
● Occurs in a cyclic process

Servant Leadership

● Marked by going beyond the leader’s own self-interest and instead focusing on opportunities to
help followers grow and develop.
● Characterised by behaviours of -
○ Listening
○ Empathising
○ Persuading
○ Accepting
● Effects -
○ Increases employee identification with the organisation
○ Customer service and employee performance enhanced
○ Increases team potency
○ Higher levels of creative performance
 Positive Leadership

Trust

● It is a positive expectation that another will not act opportunistically

● Followers trust leaders that their rights and interests will be respected
● Outcomes of trust
○ Encourages risk taking
○ Facilitates information sharing
○ Makes group effective
○ Enhances productivity

Development of Trust

● Integrity
○ Honesty and truthfulness
● Benevolence
○ Trusted person has your interest at heart
● Ability
○ Individual’s technical and interpersonal knowledge/skills

Trust Propensity

● How likely an employee is to trust a leader

● Subjective ideas of employees on trust
● Personality links with
○ Agreeableness for high trust
○ Low self esteem for low trust

Trust and Culture

● Collectivistic versus individualistic cultural differences

The Role of Time

● Final component of building trust

● Observations of leaders over time promote trust
● Leader competence demonstrated
● Trust can be built by shifting leadership style
● Interpersonal conversations with followers

Regaining Trust

● Less satisfied employees

● Low OCB and task performance
● Trust can be regained
○ Apology
○ Refusing to comment
○ Consistent pattern of trustworthy behaviour post transgression

Mentoring

● A mentor is a senior employee who sponsors and supports a less experienced employee (protege)
● Selection of protege
○ Formal - through assessment
○ Informal - through manager decision
 Types of Leadership

Democratic Leadership

● Based on team opinion and feedback

● Leader makes final decision but every opinion counts
● Effective style of leadership

Autocratic Leadership

● Employee opinions not considered

● Employee expected to sustain to decisions taken by the leader
● Ineffective in the long run

Laissez-Faire Leadership

● Literally translated to ‘let them do’

● Least intrusive
● Authority lies with employees
● Empower but also delimiting

Strategic Leadership

● Bridge between senior team and employees

● Executive interest and working conditions stably maintained

Transformational Leadership

● Transforming and improving functions and capabilities

● Tasks assigned
● Employee boundaries pushed
● Adopted by growth minded companies
Transactional Leadership

● Action-reward concept

Coach-Style Leadership

● Focus on larger growth and employee individual growth

● Focus primarily more on individual

Bureaucratic Leadership

● By the book approach

● Employee opinions heard but can also be rejected
 Trust in Organisational Relationships

Deterrence-based Trust

● One violation or inconsistency can destroy the relationship

● Based on fear of reprisal if the trust is violated.
● Work only when -
○ punishment is possible
○ consequences are clear
○ punishment is actually imposed if the trust is violated
● Seen frequently in new relationships

Knowledge-based Trust

● Based on the behavioural predictability that comes from a history of interaction

● Occurs when you have adequate information about someone to understand them
● Ability to accurately predict his or her behaviour
● Relies on information rather than deterrence
● Develops as a function of experience that builds confidence of trustworthiness and predictability

Identification-based Trust

● Highest level of trust

● Presence of emotional connection within parties
● Allows one party to act as an agent for the other and substitute for that person in interpersonal
transactions
● Mutual understanding and minimal controls
 Challenges to Our Understanding of Leadership

Leadership as an Attribution

● Attribution theory of leadership

○ Leadership is merely an attribution that people make about other individuals.
● Attributing qualities -
○ Intelligence
○ Outgoing personality
○ Strong verbal skills
○ Aggressiveness
○ Understanding
○ Industriousness
● Demographic assumptions in a leader
● Important to project the appearance of being a leader rather than focusing on actual
accomplishments

Substitutes for and Neutralisers of Leadership

● Substitutes
○ Attributes such as experience and training, that can replace the need for a leader’s support
or ability to create structure.
○ Governance in bossless environment achieved through accountability of coworkers
● Neutralisers
○ Attributes that make it impossible for leader behaviour to make any difference to
follower outcomes
○ Interesting tasks

Selecting Leaders

● Personality traits
○ Openness to experience, Extraversion, Conscientiousness
● Emotional intelligence
 ● Stability and tenure
● Due diligence required

Training Leaders

● Leadership training - high self monitors

● Teaching implementation skills
● Trust building and mentoring can be taught
● Taught situational analysis skills
● Behavioural training