BUSINESS MANAGEMENT BUT111C The Nature of Leadership Week 21

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BUSINESS MANAGEMENT BUT111CThe Nature of
LeadershipWeek 21
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Leadership

• Among all the ideas and writings about
  leadership, three aspects stand out people,
  influence and goals.
• Leadership occurs among people, involves the use
  of influence, and is used to attain
  organisational goals (Daft and Marcic, 2012).
• Leadership is the process of influencing
  employees to work toward the achievement of
  organisational goals (Lussier 2009).
• Leadership is based on interpersonal
  relationships, not administrative activities and
  directives (Hellriegel et al 2008).
• Leaders have a substantive effect on an
  organisations overall performance.
• Leadership should be considered at an
  organisational level- rather than individual CEO
  - level.
• Leadership approaches need to evolve as the needs
  of organisations change.
• A significant influence on leadership styles in
  recent years is the growing turbulence and
  uncertainty of the macro-environment (Daft and
  Marcic, 2012).

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Leaders vs managers?

• People tend to use the terms manager and leader
  interchangeably. However, managers are not
  necessarily strong leaders.
• Some managers are not leaders because they do not
  have the ability to influence others.
• Management is broader in scope than leadership
  leadership is only one of the four functions of
  management.
• There are also good leaders who are not good
  managers, such as people holding informal
  authority. Many employees experience working in
  situations where one of their peers had more
  influence in the department than the manager.
• A primary distinction between management and
  leadership is that management promotes stability
  and order within an existing organisational
  structure while leadership promotes vision and
  change.
• Leadership means questioning the status quo so
  that outdated, unproductive, or socially
  irresponsible norms can be replaced to meet new
  organisational challenges.
• Leadership cannot replace management it should
  be in addition to management.
• Good management is needed to help the
  organisation meet current commitments, while good
  leadership is needed to move the organisation
  into the future (Daft and Marcic, 2012).

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Leadership trait theory (Ghiselli Study)

• Supervisory ability
• Able to get the job done through others
• Need for occupational achievement
• Seeking responsibility
• Having the motivation to work hard to achieve
• Intelligence
• Able to use good judgment clear reasoning
• Decisiveness
• Able to solve problems and make competent
  decisions
• Self-assurance / confidence
• Viewing themselves as capable of solving problems
• Initiative
• Self-starter able to get the job done with a
  minimum of supervision

Traits Distinguishing natural personal
characteristics
Strengths Natural talents and
abilities that have been supported and reinforced
with learned knowledge and skills.
Effective leadership Not about having the right
traits but rather about finding the strengths
that one can best exemplify and apply as a
leader. (Daft and Marcic, 2012).
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Leadership development

• On-the-job learning
• Taking on jobs or projects that include
  leadership responsibilities
• Formal assessment training
• Leadership development programmes
• Ongoing assessment to improve effectiveness as a
  leader
• 360 degree feedback
• Coaching mentoring
• Senior colleagues provide advice and act as role
  models
• Can guide on the styles of leadership favoured in
  the organisation
• Gaining off-the-job leadership experience
• Taking on leadership roles in community and
  social organisations
• Volunteering to make leadership contributions in
  religious and charity organisations

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Theory X and Theory Y

• Assumptions and beliefs about individuals and
  how to motivate them often influence a leaders
  behaviour.

Theory X Managers
Theory Y Managers

• Assume that employees basically dislike having to
  work and will perform well only if closely
  managed.
• Employees need direction wherever possible.
• Managers must coerce employees to get them to do
  effective work.

• Assume that people basically like to work and do
  not need close supervision.
• Employees that are committed to the
  organisations goals will exercise
  self-management.
• Employees will accept and even seek
  responsibility at work, wanting to make a
  positive contribution.

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Two approaches to leadership
TRANSACTIONAL LEADERSHIP
TRANSFORMATIONAL LEADERSHIP

• Leadership style based on leading by exchange.
• Transactional leaders often excel at the
  management functions by stressing the impersonal
  aspects of performance, such as plans, schedules
  and budgets.
• Transactional leadership is important to all
  organisations, but leading change requires a
  different approach (Daft and Marcic, 2012).
• Promotes compliance !

• Leadership style based on leading by motivating.
• Significantly transform organisations as they
  bring about changes in mission, strategy,
  structure culture.
• They also bring about innovations in processes,
  products and services.
• Inspire followers to believe not just in the
  leader personally but in their own potential to
  imagine and create a better future for the
  organisation.

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Transformational leadership

• Leadership style that brings about continuous
  learning, innovation change through leading by
  motivating.
• Transformational leaders provide extraordinary
  motivation by appealing to followers ideals and
  moral values and inspiring them to think about
  problems in new ways (Hellriegel et al 2008).
• Many charismatic leaders are also
  transformational leaders but charismatic leaders
  are not transformational leaders unless they
  inspire continuous innovative change.
• Transformational leadership has been shown to
  contribute to leader effectiveness, leader and
  follower satisfaction, improved follower efforts
  and better overall organisational performance.
• Transformational leaders are typically positively
  engaged with the world around them and accomplish
  change by building networks of positive personal
  relationships (Daft and Marcic, 2012).

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Behaviours of transformational leaders
VISION
IMPRESSION MANAGEMENT
FRAMING

• Transformational leaders have an ability to
  create a vision that binds people around a strong
  sense of common purpose.
• Transformational leadership motivates through
  identification with the leaders vision pulling
  rather than pushing others on (Warren Bennis)
• Transformational leaders convey not just the
  value of their vision but an unshakeable belief
  that the organisation their followers are
  able to realise it.
• Followers of transformational leaders tend to
  demonstrate unquestioning loyalty and obedience.

• Framing is a process whereby leaders define the
  groups purpose in significant or meaningful
  terms.
• Employees work with a sense that they are making
  a difference in the community, society or even
  the world.
• The groups purpose is defined in terms of the
  core values of the organisation.
• Transformational leaders are often able to frame
  their vision in a way that gives employees a new
  purpose for working.

• Impression management is the attempt to control
  the impressions that subordinates (and
  stakeholders outside the organisation) form about
  the leader.
• Transformational leaders are able to align their
  vision with their person through effective
  impression management.
• This is achieved through a strong communication
  competency and ensuring that their behaviour
  lives their values and supports the declared
  vision.

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Contemporary leadership concepts

• 1. Level 5 Leadership Leadership that is
  characterised by an almost complete lack of ego
  (humility), coupled with a fierce resolve / will
  to do what is best for the organisation (Collins,
  2002).
• 2. Servant leadership A servant leader
  transcends self-interest to serve others and the
  organisation. Servant leaders operate on two
  levels for the fulfillment of their
  subordinates goals and needs and for the
  realisation of the larger purpose or mission of
  their organisation.
• 3. Authentic leadership Leadership by
  individuals who know and understand themselves,
  who espouse and act consistently with higher
  order ethical values, and who empower and inspire
  others with their openness and authenticity.
  Inspire trust and commitment. In followers
• 4. Interactive leadership Leaders that favour a
  consensual and collaborative process, exerting
  influence that derives from relationships rather
  than position and formal authority.

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Research on women in leadership

• Research indicates that womens style of
  leadership is (1) typically different from most
  mens leadership styles and (2) is particularly
  well suited to todays organisations (Daft and
  Marcic, 2012).
• Using data from actual performance evaluations,
  one study found that when rated by peers,
  subordinates and bosses, female managers scored
  significantly higher than men did abilities such
  as motivating others, fostering communication,
  the production of high-quality work and listening
  to others (Sharpe, 2000).
• A recent study of leaders and their followers in
  businesses, universities, and government agencies
  found that women were rated higher on social and
  emotional skills, which are crucial skills for
  both emotional intelligence and interactive
  leadership (Groves, 2005).
• A 2009 review of thousands of 360-degree
  performance evaluations revealed that women
  outshone men in almost every leadership dimension
  measured with the one exception that women
  leaders were often rated as less visionary
  (Ibarra and Otilia, 2009).

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Types of leadership power

• Power is the potential ability to influence the
  behaviour of others (Daft and Marcic, 2012). The
  power available does not need to be used often
  the perception of power is enough to influence
  others.
• Leaders use power to get things done in
  organisations. Leadership and power therefore go
  hand-in-hand. To influence others, leaders need
  to exercise some form of power.
• Employees are not influenced without a reason
  the reason often is the power that a leader
  exerts over them. Without some form of power,
  managers are not able to achieve organisational
  objectives.
• Generally, power in organisations is allocated to
  those who get results and have good interpersonal
  skills.

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Types of leadership power

• French Raven 1959 developed a framework for
  understanding the forms of power used by leaders
  in influencing followers.
• Identified five types of leadership power
• Legitimate power
• Coercive power
• Referent power
• Reward power
• Expert power
• Effective leaders may find it necessary to use
  more than one type of power at different times
  and for different occasions.

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1. Legitimate power

• Definition Influence based on the leaders
  formal position in the organisations hierarchy.
  Employees feel that they ought to do what the
  boss says because of the position that they hold.
• Access to resources, information and key decision
  makers gives some leaders legitimate power in
  influencing events as well as passing on
  information and rewards to subordinates.
• Such leaders are often described as having
  clout or political influence within an
  organisation. Legitimate power can

• Get a good job for a talented employee
• Obtain approval for expenditures beyond the
  budget
• Provide easy access to top people in the company
• Ensure early awareness of important decisions and
  policy shifts

Pinky Moholi
Koos Bekker
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2. Coercive power

• Definition Influence based on fear and
  punishment.
• Coercive power is less effective than a
  legitimate, reward or referent power because
  punishment is less effective as a motivator.
• Coercive power may be appropriate when enforcing
  rules.
• Punishment may take the form of
• Less desirable work assignments
• Verbal reprimands or written warnings
• Demotions, suspensions or terminations
• Humiliation, criticism
• Limiting chances of promotion
• Employees may respond to coercion
• by exhibiting negative behaviour
• (such as falsifying performance reports)
• rather than improving their performance.

Change before you have to Jack Welch
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3. Referent power

• Definition Influence based on followers
  personally identifying with the leader. Followers
  tend to like, admire and want to emulate their
  leader.
• Leaders who have admirable personal
  characteristics, charisma, and an excellent
  reputation often possess referent power.
• Referent power sometimes used by people with no
  positional power in organisations using
  requests rather than orders.

• Referent power can be gained in organisations by
  developing interpersonal skills and developing
  the confidence that other employees have in you.

Nelson Mandela
Winston Churchill
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4. Reward power

• Definition Influence based on the leaders
  ability to bestow rewards on other people.
  Leaders using reward power let people know what
  is in it for them by creating win-win situations.
• Employees act on the supervisors request because
  they believe that their behaviours will be
  rewarded. To increase their reward power,
  managers must be in a position to evaluate
  employees performance and determine their raises
  and promotions.
• Rewards may take many forms, including
• Praise, attention
• Recognition
• Favourable job assignments
• Preferred vacation schedules
• Promotions
• Salary increases

Bill Gates
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5. Expert power

• Definition Influence based on specialised
  knowledge skill regarding the tasks being
  performed is regarded as expert power.
• When someone is a true expert, others go along
  with their recommendations because of his or her
  superior knowledge.
• The fewer people who possess certain expertise in
  an organisation, the more power the individual
  who does have it gains.

• Followers as well as leaders can possess expert
  power. Being an expert makes employees depend on
  you and employees with expert power are often
  promoted to management positions.

Warren Buffet
Steve Jobs
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Using power effectively

• Legitimate power is effective when a manager
  simply requires an employee to perform a task
  that is within the employees capabilities and
  job description.
• Coercive power may be effective to get employees
  to comply with rules but, in general, when
  leaders threaten to punish the response from
  subordinates is often angry and negative.
• Referent power usually leads to high levels of
  performance, hence effective leaders are likely
  to rely on expert, referent and reward power,
  using legitimate and coercive power only
  minimally.

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How subordinates respond to the use of leadership
power

• Leadership matters, but without effective
  followers no organisation can survive. Leaders
  can develop an understanding of their followers
  and create the conditions that help them to be
  most effective (Daft and Marcic, 2012)
• The leaders use of different types of power can
  lead to three distinct types of behaviour in
  followers
• Commitment
• Committed subordinates are enthusiastic about
  meeting their leaders expectations and strive to
  do so.
• Compliance
• Subordinates who merely comply with their
  leaders requests will do only what has to be
  done usually without much enthusiasm.
• Resistance
• Subordinates may appear to respond to their
  leaders requests while not actively doing so or
  even intentionally delaying or sabotaging
  plans.

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Tutorial group exercise

• To what extent to you believe that the types of
  power used by an individual leader reveal a great
  deal about why others follow that particular
  leader?
• As a group will need to identify the two
  theoretical approaches you believe are most
  useful to managers operating in SA - and which
  two are the least useful
• Legitimate power?
• Coercive power?
• Referent power?
• Reward power?
• Expert power?
• Due 3 October 2012

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The types of power used by a leader reveals a
great deal about why others follow that
individual leader
Why others follow this type of leader

Legitimate Power Followers
Coercise Power Followers
Referent Power Followers
Reward Power Followers
Expert Power Followers