Biju Patnaik Institute of IT & Management Studies, Bhubaneswar

Dr. Pallabi Mund, Assistant Professor (HR & OB)

MODULE 3
FOUNDATIONS OF GROUP BEHAVIOUR

UNDERSTANDING GROUP

A work group is collection of two or more individuals, working for a common goal and is
interdependent. They interact significantly to achieve a group objective. For a manager it is
difficult to manage group because of varied nature, personality traits, attitude of individuals and
personal interest in the group job the group members’ display. It is therefore important for
managers to understand group member behaviour and deal effectively with the group because of
the synergy they provide. Manager should be able to achieve not only group objective but should
be able to fulfill individual objectives within the overall organizational frame work.

Group members should be able to achieve greater (volume and quality) than the sum total of
individual contribution. This is achieved by joint idea generation, finding out various courses
open, and selecting and implementing the best course of action. Because of the joint efforts of
the group, it possible to use skill, knowledge and experience of group members to achieve
quality decisions and achieve group goals. Fred Luthans states that if a group exists in an
organization, its members:-

• Are motivated to join

• Perceive a group as unified unit of interacting people
• Contribute to various amounts to the group processes
• Reach agreement and disagreements through various forms of interaction

CHARACTERISTICS OF A GROUP:

Regardless of the size or the purpose, every group has similar characteristics:
(a) Two or more persons: A group exists by having at least two members, who are
interdependent to each other to achieve the organizational objectives.
(b) Formal social structure: (the rules of the game are defined)
(c) Common fate: (they will swim together)
(d) Common goals: Each member in a group has a shared/common goal to achieve. But, the
members do not always come to agreement regarding all group objectives.

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Dr. Pallabi Mund, Assistant Professor (HR & OB)

(e) Interaction: in groups is based on various modes of communication like face-to face,
telephonic, email, or intranet.
(f) Interdependence: (each one is complimentary to the other)
(g) Collective Identity (Self-definition as group members): Every member of the group should
be aware of other members in the group, but they all should be having a collective identity of
their own considering themselves as belonging to one whole group.
(h) Group Dynamics: is a social process which involves the study of forces operating within a
group.

WHY DO WE JOIN GROUPS? / NEED FOR GROUP DEVELOPMENT

1. Security: By joining a group, individuals can reduce the insecurity of standing alone. People
feel stronger and more resistant to threats when they are part of a group. Group provides safety
and protection against a common enemy.

2. Affiliation: Groups can fulfil social needs. People enjoy the regular interaction that comes
with groups’ membership. For many people these on the job interaction are their primary sources
for fulfilling their need for affiliation.

3. Power: What cannot be achieved individually after becomes possible through group action.
There is power in number.

4. Goal Achievement: Through pooling of knowledge, resources, talents and power in-group,
people are able to achieve goals that may not be possible individually. More than one person can
achieve one particular goal easily. In such instances management will rely on the use of formal
group.

5. Self-Esteem: Membership of prestigious groups increases the self-esteem of people. It

generates positive felling of self worth.

6. Status: Individuals get recognition and status when they are members of groups that are
considered to be important by other. People look at them with respect and awe.

TYPES OF GROUPS

Formal groups may take the form of command groups, task groups, and functional groups:

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Dr. Pallabi Mund, Assistant Professor (HR & OB)

1. Command groups are specified by the organizational chart and often consist of a supervisor
and the subordinates that report to that supervisor. An example of a command group is an
academic department chairman, commander in an army, and the faculty members in that
department.
2. Task groups consist of people who work together to achieve a common task. Members are
brought together to accomplish a narrow range of goals within a specified time period. Task
groups are also commonly referred to as task forces. The organization appoints members and
assigns the goals and tasks to be accomplished. Examples of assigned tasks are the
development of a new product, the improvement of a production process, or the proposal of a
motivational contest. Other common task groups are ad hoc committees, project groups, and
standing committees.
3. A functional group is created by the organization to accomplish specific goals within an
unspecified time frame. Functional groups remain in existence after achievement of current goals
and objectives. Examples of functional groups would be a marketing department, a customer
service department, human resource department or an accounts department.

INFORMAL GROUPS

In contrast to formal groups, informal groups are formed naturally and in response to the
common interests and shared values of individuals. They are created for purposes other than the
accomplishment of organizational goals and do not have a specified time frame.

Informal groups are not appointed by the organization and members can invite others to join
from time to time. Informal groups can have a strong influence in organizations that can either be
positive or negative. For example, employees who form an informal group can either discuss
how to improve a production process or how to create shortcuts that jeopardize quality.

1. Interest groups usually continue over time and may last longer than general informal groups.
Members of interest groups may not be part of the same organizational department but they are
bound together by some other common interest. The goals and objectives of group interests are
specific to each group and may not be related to organizational goals and objectives. An example
of an interest group would be students who come together to form a study group for a specific
class.
2. Friendship groups are formed by members who enjoy similar social activities, political
beliefs, religious values, or other common bonds. Members enjoy each other's company and
often meet after work to participate in these activities. For example, a group of employees who
form a friendship group may have an exercise group, a football team, or a potluck lunch once a
month.
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 Biju Patnaik Institute of IT & Management Studies, Bhubaneswar

Dr. Pallabi Mund, Assistant Professor (HR & OB)

3. A reference group is a type of group that people use to evaluate themselves. Reference
groups have a strong influence on members' behaviour. By comparing themselves with other
members, individuals are able to assess whether their behaviour is acceptable and whether their
attitudes and values are right or wrong. For example, the reference group for a new employee of
an organization may be a group of employees that work in a different department or even a
different organization. Family, friends, and religious affiliations are strong reference groups for
most individuals.

FORMAL Vs INFORMAL GROUP

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Dr. Pallabi Mund, Assistant Professor (HR & OB)

GROUP DYNAMICS

Group dynamics deals with the attitudes and behavioural patterns of a group. Group dynamics
concern how groups are formed, what is their structure and which processes are followed in their
functioning. Thus, it is concerned with the interactions and forces operating between groups.

Definition: “Group dynamics is a system of behaviours and psychological processes occurring

within a social group (intragroup dynamics), or between social groups (intergroup dynamics).”
Group dynamics is relevant to groups of all kinds – both formal and informal.

Group dynamics deals with the attitudes and behavioral patterns of a group. Group dynamics
concern how groups are formed, what is their structure and which processes are followed in their
functioning. Thus, it is concerned with the interactions and forces operating between groups. Group
dynamics can be studied in business settings, in volunteer settings, in classroom settings, and in
social settings. Any time there are three or more individuals interacting or talking together, there are
group dynamics.

In an organizational setting, groups are a very common organizational entity and the study of
groups and group dynamics is an important area of study in organizational behaviour.

PRINCIPLES OF THE GROUP DYNAMICS

1. The members of the group must have a strong sense of belonging to the group. The barrier
between the leaders and to be led must be broken down.

2. The more attraction a group is to its members, the greater influence it would exercise on its
members.

3. The greater the prestige of the group member in the eyes of the member, the greater influence
he would exercise on the them.

4.The successful efforts to change individuals sub parts of the group would result in making
them confirm to the norms of the group.
5. The pressures for change when strong can be established in the group by creating a shared
perception by the members for the need for the change.

TUCKMAN’S STAGES OF GROUP DEVELOPMENT/ GROUP FORMATION

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Dr. Pallabi Mund, Assistant Professor (HR & OB)

The forming–storming–norming–performing model of group development was first proposed

by Bruce Tuckman in 1965, who mentioned that these phases are all necessary and inevitable in
order for the team to grow, to face up to challenges, to tackle problems, to find solutions, to plan
work, and to deliver results.

The Five-Stage Model :

Stage I: Forming Characterized by much uncertainty.
Stage II: Storming Characterized by intragroup conflict.
Stage III: Norming Characterized by close relationships and cohesiveness

Stage IV: Performing During which the group is fully functional.

Stage V: Adjourning Characterized by concern with wrapping up activities rather than task
performance.

1. Forming: Individuals at the initial stage are not clear of the purpose for which they would
like to form into groups. This stage is characterized by uncertainty and confusion. They try to get
acquainted with each other. Members test behaviors to determine which are acceptable and
which are not to individuals in the group. Thus, members decide within themselves as part of a
group.

2. Storming: In this stage, disagreement and conflict recur among members over work
behaviour, relative priorities of goals, who is to be responsible for what, and the task related
guidance and direction of the leader. There would be confusion over leadership. Individual
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Dr. Pallabi Mund, Assistant Professor (HR & OB)

personalities emerge and group members assert their opinions. Members may disagree over
priorities, immediate goals or methods. Some members may withdraw or try to isolate
themselves from the emotional tensions generated. This group is not yet unified and some groups
never get beyond this stage and hence fail. This stage is complete when the members are clear
about the leader and the hierarchy.

3. Norming: Work behaviour at this stage evolve into a sharing of information, acceptance of
different opinions and positive attempts to make decisions that may require compromise. During
this stage, team members set the rules by which the team will operate. The leader of the group
might be identified during this stage. Cooperation and a sense of shared responsibility develop
among team members.

4. Performing: Members exert full energy towards functioning and performing the tasks in order
to attain the group goals. Team members show how effectively and efficiently they can achieve
results together, that the roles of individual members are accepted and understood. The members
have learned when they should work independently and when they should help each other. Some
teams learn to develop from their experiences and others may perform only at a level that is
needed for their survival. Group members interact well, deal with problems and coordinate their
work. The leader’s role is to maintain a balance between various members’ requirements.

5.Adjourning: The termination of work behaviours and disengagement from social behaviours
occur during this stage. Some teams such as problem solving or a cross-functional team created
to investigate and report on a specific issue within 6 months, have well-defined points of
adjournment. Temporary groups which have limited task to perform, have this stage as the final
stage in group development, as the group ceases to exist once the task is complete. But the
permanent groups or relatively long-run groups either reach this stage rarely or in the long run.

MANAGING TEAMS

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 Biju Patnaik Institute of IT & Management Studies, Bhubaneswar

Dr. Pallabi Mund, Assistant Professor (HR & OB)

Meaning : A team is a small number of employees with complimentary competencies

(abilities, skills, and knowledge) who are committed to common performance goals and
working relationships for which they hold themselves mutually accountable.

Definition: Two or more people who are interdependent, who share responsibility for
outcomes ,who see themselves as an intact social entity in a larger social system are also called
as “Teams”.

When teams are formed, its members must have (or quickly develop) the right mix of
complementary competencies to achieve the team’s goals. Also its members need to be able to
influence how they will work together to accomplish those goals.

TYPES OF TEAMS

1. Functional teams: They usually represent individuals who work together daily on a
cluster of ongoing and independent tasks. Functional teams often exist within functional
departments – marketing, production, finance, auditing, human resources and the like.
2. Problem solving teams: Groups of 5-12 employees from the same department who meet
for a few hours each week to discuss ways of improving quality, efficiency and work
environment. They focus on specific issues in their areas of responsibility, develop
potential solutions, and often are empowered to take actions within defined limits. Such
teams frequently address quality or cost problems.
3. Cross-functional teams: They bring together the knowledge and skills of people from
various work areas but of the same hierarchical level to identify and solve mutual
problems. They draw members from several specialties or functions and deal with
problems that cut across departmental and functional lines to achieve their goals. They
are often more effective in situations that require adaptability, speed and a focus on
responding to customer needs.
4. Self-managed teams: Groups of 10-15 people who take on responsibilities of their
former supervisors. They normally consist of employees who must work together
effectively daily to manufacture an entire product (or major identifiable component) or
service. These teams perform a variety of managerial tasks.
5. Virtual Teams: Teams that use computer technology to tie together physically dispersed
members in order to achieve a common goal. Also known as a geographically dispersed
team, distributed team, or remote team. Example-Web development team.

The basic characteristics of a virtual team are as follows:

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 Biju Patnaik Institute of IT & Management Studies, Bhubaneswar

Dr. Pallabi Mund, Assistant Professor (HR & OB)

1. The absence of paraverbal and nonverbal cues

2. A limited social context
3. The ability to overcome time and space constraints

WHY WORK TEAMS?

1. Helps solve complex problems: Working together a team can apply individual
perspectives, experience, and skills to solve complex problems, creating new solutions
and ideas that may be beyond the scope of any one individual. As well as enhancing
organisations' performance good teamwork benefits individuals too.
2. Synergy Effect: Good teamwork creates synergy – where the combined effect of
the team is greater than the sum of individual efforts.
3. It provides a framework: that increases the ability of employees to participate in
planning, problem-solving and decision making to better serve customers.

BENEFITS OF TEAM

In organizations that have reorganized the workplace into teams, results have improved and costs
have declined.
1. Reduced costs
2. Improve quality
3. Increases employee involvement
4. Reduces absenteeism and improves continuity
5. Reduces conflict
6. Enhances creativity and innovation
7. Creates better adaptability and flexibility in the organization

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 Biju Patnaik Institute of IT & Management Studies, Bhubaneswar

Dr. Pallabi Mund, Assistant Professor (HR & OB)

DIFFERENCES BETWEEN GROUPS & TEAMS

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Biju Patnaik Institute of IT & Management Studies, Bhubaneswar

Dr. Pallabi Mund, Assistant Professor (HR & OB)

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 Biju Patnaik Institute of IT & Management Studies, Bhubaneswar

Dr. Pallabi Mund, Assistant Professor (HR & OB)

TEAM EFFECTIVESNESS MODEL:

Effective teams need to work together and take collective responsibility to complete
significant tasks. They must be more than a “team-in-name-only. The following are a few
factors which help in developing team effectiveness:

A-Team Work Design:

The work design category includes variables like freedom and autonomy, the opportunity to
work on your own without taking guidance from his/her supervisor. It also refers to the use of
one’s different skills and talents, the ability to complete a whole and identifiable task or
product, and working on a task that has a substantial impact on others. The evidence
indicates that these characteristics enhance member motivation and increase their effectiveness.

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 Biju Patnaik Institute of IT & Management Studies, Bhubaneswar

Dr. Pallabi Mund, Assistant Professor (HR & OB)

These work design characteristics motivate because they increase members’ sense of
responsibility and ownership over the work and because they make the work more interesting to
perform.

B – Team Context:
Adequate Resources: Teams are part of a larger organization system; every work team relies on
resources outside the group to sustain it. A scarcity of resources directly reduces the ability of a
team to perform its job effectively and achieve its goals. As one study concluded, after looking at
13 factors related to group performance, “perhaps one of the most important characteristics of an
effective work group is the support the group receives from the organization.”This support
includes timely information, proper equipment, adequate staffing, encouragement, and
administrative assistance.

Leadership and Structure: Teams can’t function if they can’t agree on who is to do what and
ensure all members share the workload. Agreeing on the specifics of work and how they fit
together to integrate individual skills requires leadership and structure, either from management
or from the team members themselves. It’s true in self-managed teams that team members absorb
many of the duties typically assumed by managers. However, a manager’s job then becomes
managing outside (rather than inside) the team. Leadership is especially important in multiteam
systems, in which different teams coordinate their efforts to produce a desired outcome. Here,
leaders need to empower teams by delegating responsibility to them, and they play the role of
facilitator, making sure the teams work together rather than against one another. Teams that
establish shared leadership by effectively delegating it are more effective than teams with a
traditional single-leader structure.

Climate of Trust: Members of effective teams trust each other. They also exhibit trust in their
leaders. Interpersonal trust among team members facilitates cooperation, reduces the need to
monitor each other’s’ behavior, and bonds members around the belief that others on the team
won’t take advantage of them. Team members are more likely to take risks and expose
vulnerabilities when they believe they can trust others on their team. And, as we know, trust is
the foundation of leadership. It allows a team to accept and commit to its leader’s goals and
decisions.

Performance Evaluation and Reward Systems: How do you get team members to be both
individually and jointly accountable? Individual performance evaluations and incentives may
interfere with the development of high-performance teams. So, in addition to evaluating and

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Dr. Pallabi Mund, Assistant Professor (HR & OB)

rewarding employees for their individual contributions, management should modify the
traditional, individually oriented evaluation and reward system to reflect team performance and
focus on hybrid systems that recognize individual members for their exceptional contributions
and reward the entire group for positive outcomes. Group based appraisals, profit sharing,
gainsharing, small-group incentives, and other system modifications can reinforce team effort
and commitment.

C - Team Composition:
The team composition category includes variables that relate to how teams should be staffed—
the ability and personality of team members, allocation of roles and diversity, size of the team,
and members’ preference for teamwork.

Abilities of Members: Part of a team’s performance depends on the knowledge, skills, and
abilities of its individual members. It’s true we occasionally read about an athletic team of
mediocre players who, because of excellent coaching, determination, and precision teamwork,
beat a far more talented group. But such cases make the news precisely because they are unusual.
A team’s performance is not merely the summation of its individual members’ abilities.
However, these abilities set limits on what members can do and how effectively they will
perform on a team. Research reveals some insights into team composition and performance.

First, when the task entails considerable thought (solving a complex problem such as
reengineering an assembly line), high-ability teams—composed of mostly intelligent members—
do better than lower-ability teams, especially when the workload is distributed evenly. That way,
team performance does not depend on the weakest link. High-ability teams are also more
adaptable to changing situations; they can more effectively apply existing knowledge to new
problems.

Finally, the ability of the team’s leader also matters. Smart team leaders help less-intelligent
team members when they struggle with a task. But a less intelligent leader can neutralize the
effect of a high-ability team.

Personality of Members: We know that personality significantly influences individual

employee behaviour. Many of the dimensions identified in the Big Five personality model are
also relevant to team effectiveness; a review of the literature identified three. Specifically, team
that rate higher on mean levels of conscientiousness and openness to experience tend to perform
better, and the minimum level of team member agreeableness also matters: teams did worse

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Dr. Pallabi Mund, Assistant Professor (HR & OB)

when they had one or more highly disagreeable members. Perhaps one bad apple can spoil the
whole bunch!

Research has also provided us with a good idea about why these personality traits are important
to teams. Conscientious people are good at backing up other team members, and they’re also
good at sensing when their support is truly needed. One study found that specific behavioural
tendencies such as personal organization, cognitive structuring, achievement orientation, and
endurance were all related to higher levels of team performance. Open team members
communicate better with one another and throw out more ideas, which makes teams composed
of open people more creative and innovative.

Suppose an organization needs to create 20 teams of 4 people each and has 40 highly
conscientious people and 40 who score low on conscientiousness. Would the organization be
better off (1) forming 10 teams of highly conscientious people and 10 teams of members low on
conscientiousness, or (2) “seeding” each team with 2 people who scored high and 2 who scored
low on conscientiousness? Perhaps surprisingly, evidence suggests option 1 is the best choice;
performance across the teams will be higher if the organization forms 10 highly conscientious
teams and 10 teams low in conscientiousness.

Allocation of Roles: Teams have different needs, and members should be selected to ensure all
the various roles are filled. A study of 778 major league baseball teams over a 21-year period
highlights the importance of assigning roles appropriately. As you might expect, teams with
more experienced and skilled members performed better. However, the experience and skill of
those in core roles who handle more of the workflow of the team, and who are central to all work
processes (in this case, pitchers and catchers), were especially vital. In other words, put your
most able, experienced, and conscientious workers in the most central roles in a team.

We can identify nine potential team roles. Successful work teams have selected people to play all
these roles based on their skills and preferences. (On many teams, individuals will play multiple
roles.) To increase the likelihood the team members will work well together, managers need to
understand the individual strengths each person can bring to a team, select members with their
strengths in mind, and allocate work assignments that fit with members’ preferred styles.

Diversity of Members: The degree to which members of a work unit (group, team, or
department) share a common demographic attribute, such as age, sex, race, educational level, or
length of service in the organization, is the subject of organizational demography.

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 Biju Patnaik Institute of IT & Management Studies, Bhubaneswar

Dr. Pallabi Mund, Assistant Professor (HR & OB)

Organizational demography suggests that attributes such as age or the date of joining should help
us predict turnover. The logic goes like this: turnover will be greater among those with dissimilar
experiences because communication is more difficult and conflict is more likely. Increased
conflict makes membership less attractive, so employees are more likely to quit. Similarly, the
losers in a power struggle are more apt to leave voluntarily or be forced out.

Many of us hold the optimistic view that diversity should be a good thing—diverse teams should
benefit from differing perspectives. Two meta-analytic reviews of the research literature show,
however, that demographic diversity is essentially unrelated to team performance overall, while a
third actually suggests that race and gender diversity are negatively related to team performance.

One qualifier is that gender and ethnic diversity have more negative effects in occupations
dominated by white or male employees, but in more demographically balanced occupations,
diversity is less of a problem. Diversity in function, education, and expertise are positively
related to group performance, but these effects are quite small and depend on the situation.
Proper leadership can also improve the performance of diverse teams.

When leaders provide an inspirational common goal for members with varying types of
education and knowledge, teams are very creative. When leaders don’t provide such goals,
diverse teams fail to take advantage of their unique skills and are actually less creative than
teams with homogeneous skills. Even teams with diverse values can perform effectively,
however, if leaders provide a focus on work tasks rather than leading based on personal
relationships.

We have discussed research on team diversity in race or gender. But what about diversity created
by national differences? Like the earlier research, evidence here indicates these elements of
diversity interfere with team processes, at least in the short term. Cultural diversity does seem to
be an asset for tasks.

Size of Teams: Most experts agree, keeping teams small is a key to improving group
effectiveness. Generally speaking, the most effective teams have five to ten members. And
experts suggest using the smallest number of people who can do the task. Unfortunately,
managers often err by making teams too large.

It may require only four or five members to develop diversity of views and skills, while
coordination problems can increase exponentially as team members are added. When teams have

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Dr. Pallabi Mund, Assistant Professor (HR & OB)

excess members, cohesiveness and mutual accountability decline, social loafing increases, and
more people communicate less.

Members of large teams have trouble coordinating with one another, especially under time
pressure. If a natural working unit is larger and you want a team effort, consider breaking the
group into sub-teams

Member Preferences: Not every employee is a team player. Given the option, many employees
will select themselves out of team participation. When people who prefer to work alone are
required to team up, there is a direct threat to the team’s morale and to individual member
satisfaction. This result suggests that call for a variety of viewpoints. But culturally
heterogeneous teams have more difficulty learning to work with each other and solving
problems. The good news is that these difficulties seem to dissipate with time. Although newly
formed culturally diverse teams underperform newly formed culturally homogeneous teams, the
differences disappear after about 3 months. Fortunately, some team performance-enhancing
strategies seem to work well in many cultures.

One study found that teams in the European Union made up of members from collectivist and
individualist countries benefited equally from having group goals. That, when selecting team
members, managers should consider individual preferences along with abilities, personalities,
and skills. High-performing teams are likely to be composed of people who prefer working as
part of a group.

D - Team Processes:
The final category related to team effectiveness is process variables such as member
commitment to a common purpose, establishment of specific team goals, team efficacy, a
managed level of conflict, and minimized social loafing.

These will be especially important in larger teams and in teams that are highly interdependent.
Why are processes important to team effectiveness? Let’s return to the topic of social loafing.
We found that 1 _ 1 _ 1 doesn’t necessarily add up to 3. When each member’s contribution is not
clearly visible, individuals tend to decrease their effort. Social loafing, in other words, illustrates
a process loss from using teams. But teams should create outputs greater than the sum of their
inputs, as when a diverse group develops creative alternatives.

Teams are often used in research laboratories because they can draw on the diverse skills of
various individuals to produce more meaningful research than researchers working

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Dr. Pallabi Mund, Assistant Professor (HR & OB)

independently—that is, they produce positive synergy, and their process gains exceed their
process losses.

Common Plan and Purpose: Effective teams begin by analyzing the team’s mission,
developing goals to achieve that mission, and creating strategies for achieving the goals. Teams
that consistently perform better have established a clear sense of what needs to be done and how.
Members of successful teams put a tremendous amount of time and effort into discussing,
shaping, and agreeing on a purpose that belongs to them both collectively and individually. This
common purpose, when accepted by the team, becomes what celestial navigation is to a ship
captain: it provides direction and guidance under any and all conditions. Like a ship following
the wrong course, teams that don’t have good planning skills are doomed; perfectly executing the
wrong plan is a lost cause. Teams should also agree on whether their goal is to learn about and
master a task or simply to perform the task; evidence suggest that different perspectives on
learning versus performance goals lead to lower levels of team performance overall. It appears
that these differences in goal orientation have their effects by reducing discussion and sharing of
goal is important.

Effective teams also show reflexivity, meaning they reflect on and adjust their master plan when
necessary. A team has to have a good plan, but it also has to be willing and able to adapt when
conditions call for it. Interestingly, some evidence does suggest that teams high in reflexivity are
better able to adapt to conflicting plans and goals among team members.
Specific Goals: Successful teams translate their common purpose into specific, measurable, and
realistic performance goals. Specific goals facilitate clear communication. They also help teams
maintain their focus on getting results.

Consistent with the research on individual goals, team goals should also be challenging. Difficult
but achievable goals raise team performance on those criteria for which they’re set. So, for
instance, goals for quantity tend to raise quantity, goals for accuracy raise accuracy, and so on.

Team Efficacy: Effective teams have confidence in themselves; they believe they can succeed.
We call this team efficacy .Teams that has been successful raise their beliefs about future
success, which, in turn, motivates them to work harder. What can management do to increase
team efficacy? Two options are helping the team achieve small successes that build confidence
and providing training to improve members’ technical and interpersonal skills. The greater the
abilities of team members, the more likely the team will develop confidence and the ability to
deliver on that confidence.

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Dr. Pallabi Mund, Assistant Professor (HR & OB)

Mental Models: Effective teams share accurate mental models —organized mental
representations of the key elements within a team’s environment that team members share. If
team members have the wrong mental models, which is particularly likely with teams under
acute stress, their performance suffers. In the Iraq War, for instance, many military leaders said
they underestimated the power of the insurgency and the infighting among Iraqi religious sects.
The similarity of team members’ mental models matters, too. If team members have different
ideas about how to do things, the team will fight over methods rather than focus on what needs to
be done. One review of 65 independent studies of team cognition found that teams with shared
mental models engaged in more frequent interactions with one another, were more motivated,
had more positive attitudes toward their work, and had higher levels of objectively rated
performance.

Conflict Levels Conflict on a team isn’t necessarily bad. As we know that conflict has a
complex relationship with team performance. Relationship conflicts—those based on
interpersonal incompatibilities, tension, and animosity toward others—are almost always
dysfunctional. However, when teams are performing non-routine activities, disagreements about
task content (called task conflicts) stimulate discussion, promote critical assessment of problems
and options, and can lead to better team decisions. A study conducted in China found that
moderate levels of task conflict during the initial phases of team performance were positively
related to team creativity, but both very low and very high levels of task conflict were negatively
related to team performance. In other words, both too much and too little disagreement about
how a team should initially perform a creative task can inhibit performance.

The way conflicts are resolved can also make the difference between effective and ineffective
teams. A study of ongoing comments made by 37 autonomous work groups showed that
effective teams resolved conflicts by explicitly discussing the issues, whereas ineffective teams
had conflicts focused more on personalities and the way things were said.

Social Loafing describes the tendency of individuals to put forth less effort when they are part of
a group. Because all members of the group are pooling their effort to achieve a common goal,
each member of the group contributes less than they would if they were individually responsible.
Effective teams undermine this tendency by making members individually and jointly
accountable for the team’s purpose, goals, and approach. Therefore, members should be clear on
what they are individually responsible for and what they are jointly responsible for on the team.

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LEADERSHIP
The successful organisations have one major common attribute that sets them apart from
unsuccessful Organisation: dynamic and effective leadership. Peter F. Drucker points out that
managers (Business leaders) are the basic and scarcest resource of any business enterprise.
Most of the organisational failures can be attributed to ineffective leadership. On all sides there
is a continual search for persons who have the necessary abilities to enable them to lead
effectively. The shortage of effective leadership is not confined to business but is evident in the
lack of able administrators in government, education, foundations, and every other form of
organisation.

The significance of leadership arises from the openness of the Organisation as a system and
from the fact that it operates in a changing environment. There are numerous instances in the
history of organizations showing collapse of enterprises that failed to react suitably to the
environmental requirements for change. The effective changeover requires effective leadership
because there exists no builtin stabilizing devices of Organisation for coping with such altered
requirements.

The significance of leadership also stems from the nature of human membership in
organizational settings. People who form an organisation are members of several institution —
in the sociological sense— at the same time. Numerous extraneous activities and affiliations
take up the bulk of an individual’s time and satiate his needs. These extra-organisational
activities influence human behaviour at work.

Moreover, the environment in which an organisation operates is full of change agents. In the
modern time no organisation can afford to be static. It has to change with the environment.
Actually, an organisation that refuses to change dies in the long run. Management of change
has become challenge before every organisation these days. This challenge can be met only
with effective leadership.

DEFINITIONS AND CHARACTERSTICS OF LEADERSHIP

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Katz and Kahn have observed: “In the descriptions of organizations, no word is more often
used than leadership, and perhaps no word is used with such varied meanings. The word
leadership is sometimes used to indicate that it is an attribute of personality; sometimes it is
used as if it was a characteristic of certain positions, and sometimes as an attribute of
behaviour.”

Leadership is defined as “the relationship in which one person, influences others to work
together willingly on related tasks to attain that which the leader desires.”

Keith Davis defines leadership as “the ability to persuade others to seek defined objectives
enthusiastically. It is the human factor that binds people together and motivates them towards
goals.”

THE LEADERSHIP SKILLS

Leaders use three different types of skills – technical, human and conceptual. Although
these skills are interrelated in practice, they can be considered separately Technical skills relate
to person’s knowledge and ability in any organizational functional area. Examples are the skills
learned by accountants, typists. This skill is the distinguishing feature of job performance at
the operating level.

Human skill is the ability to work effectively with people and to build teamwork. No leader at
any organisational level escapes the requirement for effective human skill. It is a major part of
leadership behaviour.

Conceptual skill is the ability to think in terms of models, frameworks, and broad relationships,
such as long range plans. Conceptual skills deal with ideas while human skill concerns people
and technical skill is with things.

It will be seen from the above diagram that the mix of these three skills changes as one rises in
the organisational hierarchy. At the supervisory level the requirement of technical skills is the
highest. But as the person moves up the hierarchy to the top management, it is conceptual skills
that are more in demands rather than technical skills. However, the requirement of human skills
at all the hierarchical levels continues to be the same.

LEADERSHIP STYLES

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Leadership is practiced by leadership style, which is the total pattern of leaders’ actions in
relation to followers. It represents their philosophy, skills, and attitudes. The styles that are
discussed hereunder are used in combination, not separately; but they are discussed separately
to clarify differences among them.

Negative leadership gets acceptable performance in many situations, but it has high human
costs. Negative leaders act domineering and superior with people. To get work done, they hold
over their personnel such penalties as loss of job, reprimand in the presence of others, etc. They
display authority in the false belief that it frightens everyone into productivity. They are bosses
more than leaders.

Even the most competent leaders will at times have to fall back upon negative leadership.
Perfection can never be achieved, but the historical trend is that managers need more and more
positive leadership skills in order to be rated “satisfactory”. Better employee education, greater
independence, and other factors have made satisfactory employee motivation more dependent
on positive leadership.

The way a leader uses power establishes the type of style. Each style has its benefits and
limitations. Leader behaviour is the mixture of all three styles over a period of time, but one
style tends to be the dominant one.

Autocratic leadership style

Autocratic leaders centralize power and decision making in them. They structure the complete
work situation for their employees, who are supposed to do what they are told. The leaders take
full authority and assume full responsibility. Leadership behaviour typically, is negative, based
on threats and punishment; but it can be positive, because an autocratic leader can choose to
give rewards to employees, in which the style becomes “benevolent-autocratic”.

Some employees have expectations of autocratic leadership. The result is that they feel a certain
amount of security and satisfaction with this type of leader.

Some advantages of autocratic leadership style are that it provides strong motivation and
reward for the leader. It permits quick decisions, because only one person decides for the entire
group. It is the best style in emergencies. Furthermore this style gives good results when one is
dealing with unskilled employees doing repetitive tasks. The main disadvantage of autocratic
leadership style is that most people dislike it. Frustration, dissatisfaction, fear, and conflict

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develop easily in autocratic situations. Employees do not involve their “self” in the
organisational activities because their drives and creativity are suppressed.

Participative leadership style

Participative leadership style is expression of leader’s trust in the abilities of his subordinates.
The leader believes that his people are as desirous of contributing to the organisational efforts
as well as they have requisite capacities. Participative leaders decentralize authority.
Participative decisions are not unilateral, as with the autocrat, because they arise from
consultation with followers and participation by them. The leader and group are acting as one
unit. Employees are informed about conditions requiring decisions, which encourages them to
express their ideas and suggestions. Whereas autocratic leaders control through the authority
they possess, participative leaders exercise control mostly by using forces within the group.

Participative style is supposed to be a better style of managing people. However, it is not

without its own drawbacks. This style is useless when the leader is dealing with an emergency.
Furthrmore, the basic assumption of this style that the people have the skill and will to help
organisational effort may not be correct.

Democratic Leadership Style

A democratic leader is a person who tries to do what majority of subordinates desire.

Participative and democratic leaders tend to believe in Theory ‘Y’ assumptions. As the
approach of management has gradually moved towards team-based, democratic leadership is
becoming more and more relevant. These type of leaders also use participative management
similar to participative leaders which allows the workers/employees to be a part of the decision
making or objective setting process. This in turn, helps in increasing the productivity of the
workers and make them committed to their organizations.

Laissez-Faire (Free rein) leadership style

On the continuum of leadership style free rein style is the extreme. Free rein leaders avoid
power and responsibility. They depend largely upon the group to establish its own goals and
work out its own problems. A free rein leader is the one who abdicates all his decision making
responsibilities and prerogative in favour of his follower. The leader plays only a minor role. In
an organisational setting such a leader happens to be a bystander, he happens to be there
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because of his organizational appointment. He fails to guide, motivate and develop his
subordinates.

This style tends to permit different units of an organisation to proceed at cross-purposes, and it
can degenerate into chaos. For these reasons normally it is not used as a dominant style but is
useful in those situations where a leader can leave a choice entirely to the group. This style is
also good when one is dealing with scientific and professional employees, who require more
job-freedom.

Advantages of Laissez-Faire leadership style:

 Helps in motivating employees
 Brings in innovation and creativity
 Highly flexible
 Open and direct communication

Disadvantages of Laissez-Faire leadership style:

 Lack of control as the employees are given utmost freedom
 May result in confusion and chaos
 This style is most effective only when the employees are highly matured and
knowledgeable
 Individual goals may get more important than group goals.

THEORIES OF LEADERSHIP

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Since leadership makes difference between success and failure, for a long time, thinkers were
trying to see if leadership success could be predicted. They were also trying to find out as to
what makes a leader. Graphalogical, Phrenological and Demographic, studies were made in
these directions. However, these studies had to be discarded because of many flaws. At best
they were guesses.

1. Trait Theories of Leadership

The scientific analysis of leadership started off by concentrating on leaders themselves. The
vital question that this theoretical approach attempted to answer was what characteristic or
traits make a person a leader? The earliest trait theories, which can be traced back to the
ancient Greeks and Romans, concluded that leaders are born, not made. The “great man”
theory of leadership said that a person is born either with or without the necessary traits for
leadership. Famous figures in history – for example, Napoleon – were said to have had the
“natural” leadership abilities to rise out of any situation and become great leaders.
Eventually, the “great man” theory gave way to a more realistic trait approach to leadership.
Under the influence of the behaviourist school of psychological thought, researchers accepted
the fact that leadership traits can be acquired through learning and experience. Attention was
turned on the search for universal traits possessed by leaders. Later attempts on research helped
in finding out six traits associated with effective leadership. They are as follows:

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1. Drive: Willingness to take initiative

2. Motivation: A strong desire to lead and influence others.
3. Honesty and Integrity: Honesty and truthfulness in dealing with others.
4. Self-confidence: Being decisive, assertive and confident
5. Intelligence: Verbal and quantitative competence and the ability to process and use
complex information.
6. Job relevant knowledge: In depth understanding of the job, organization and industry.

The research efforts were generally very disappointing. Only intelligence seemed to hold up
with any degree of consistency.

In general, research findings do not agree on which traits are generally found in leaders or
even on which ones are more important than others. The numbers of traits required of a
successful leader are many. Not only this, depending on the situation the leader has to bring
in various shades of the same trait. Trait theories also suffer from the problem of
semantics.

Similar to the trait theories of personality, the trait approach to leadership has provided some
descriptive insight but has little analytical or predictive value. The trait approach is still alive,
but now the emphasis has shifted away from personality traits toward job related skill.

2. Behavioral Leadership Theories

The failure of trait theory led to the study of other variables which influence effective
leadership. These theories focus on how leaders behave and assume that leaders can be
made, rather than born and successful leadership is based on definable, learnable behaviour.

These theories identified behaviors that differentiate effective leaders from in-effective
leaders.

a) University of Iowa studies: This study was carried out in the 1939's by Kurt Lewin and
his associates to identify the various leadership styles. They explored 3 major leadership styles:
Autocratic, Democratic and Laissez-faire leader.
Results: Under democratic leadership less work was performed than authoritarian group, but
much higher quality was achieved.  Subordinates satisfaction was highest under democratic
leader. In addition, decision making was less creative under authoritarian leadership then under

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democratic leadership. The researchers concluded that democratic leadership was the most
effective form. 

From the results of Iowa studies, the focus shifted on whether the leaders need to focus on high
performance or on achieving higher member satisfaction. This led to other related behavioral
studies.

2. b) The Ohio State Leadership studies: Beginning in 1945, researchers at Ohio State
University made a series of studies in many organizations.

Resulted in Two important dimensions of leader behavior identified:

I) Initiating Structure: The extent to which leaders establish objectives and structure their
roles and the roles of subordinates towards attainment of the objectives.
II) Consideration: The extent to which leaders relationship with subordinates are characterized
by mutual trust and respect for employees, ideas and feelings.

A leader who is high on both Initiating structure and consideration achieved High Group
Task Performance and satisfaction. However, the high-high style did not always yield
positive results.

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2. c) University of Michigan studies: Rensis Likert and his colleagues had conducted studies
on behavioral characteristics of leaders in the University of Michigan Institute for Social
Research. They came out with two dimensions of Leadership behavior similar to Ohio studies: -

I) Employee Oriented Leader: Such leaders emphasize interpersonal relations, taking a

personal interest in the needs of employees and accepting individual differences among
members.

II) Production Oriented Leader: Such leaders emphasize on technical or task aspects of the
job, regard group members as a means to that end.

Results indicated: Employee oriented leaders were associated with high group productivity
and high employee satisfaction whereas Production oriented employee were associated with
low productivity and low employee satisfaction.

2. d) The Managerial Grid: or Leadership Grid is a two-dimensional matrix developed by

Robert Blake and Jane Mouton in 1969. Blake and mouton’s model helps to measure a
managers relative concern for people and task and reflects bi-directional nature of leadership.
The managerial grid identifies a range of management behaviour based on the various ways that
the task oriented and employee-oriented styles, which have been explained as a continuum on a
scale of 1 to 9. It shows concern for people on the vertical axis and concern for production on
the horizontal axis.

Concern for people includes such elements as degree of personal commitment to-wards goal
achievement, maintenance of self-esteem of people, assigning task based on trust, provision of
good working conditions and maintenance of good inter-personal relationship.

As far as the leadership style that displays concern for production includes elements like
output of the workers, work efficiency, quality of policy decisions, various processes and
procedures that are followed during the production line. It also includes creativity, research and
development undertaken, quality of product produced and last but not the least services
provided by the staff.

Although the grid has Nine by nine matrix outlining 81 different leadership styles, only 5
important behavior dimensions are emphasized:

1. Impoverished Management (1,1)

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2. Task Management (9,1)

3. Middle of the road Management (5,5)
4. Country Club Management (1,9)
5. Team Management (9,9)

1. Impoverished Management (1,1): or the Laissez-faire type of management. The

manager has little concern for either people or production. They only mark time and
have abandoned their job. They act as messenger to pass information from superiors to
subordinates. They display minimum involvement in the job they are assigned to. This
amounts to exertion of minimum efforts on the part of leader to get required work done
as appropriate to sustain organizational membership.

2. Task Management /Authority-Obedience (9,1): Or the autocratic style of

management. The Manager stresses on operating efficiently through controls in
situations where human elements cannot interfere. The leader functions in an autocratic
way with no or very little concern for people.

3. Middle of the road Management /Organization-Man (5,5): The manager acts as a

compromiser, attempts to balance concern for work in exchange for the satisfactory
level of morale of the people. Managers have both concern for people and production.
They set moderate production goals and achieve them. They achieve reasonably
satisfactory results in maintain high morale of workers and meet production
requirements

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4. Country Club Management (1,9): The Manager is thoughtful, comfortable, and

friendly with people and has little concern for output. They create a very relaxed and
friendly environment. There are no organizational goals and exist very loose style of
functioning. The working environment is workers welfare oriented.

5. Team Management (9,9): The manager seeks high output through committed people,
achieved through mutual trust, respect and a realization of interdependence. Their
involvement is total. They are real team leaders who have full knowledge, skill and
aptitude for job and also concern for the welfare of workers.

According to Blake and Mouton, the most effective leadership style is the Team
Management Style (9,9). This leadership style results in improved performance, lower
employee turnover and greater employee satisfaction.

The managerial grid is widely used model for training and development of managers. The
model cannot determine a particular style of a leader because leadership is influenced by
personality traits, skills, attitude of the leader and the followers. Apart from the above
situational factors in work environment and the organizational culture affects the leader-ship
style to a great extent.

3. Situational or contingency leadership theories

After the trait approach and behavioral approach was proved to fall short of being adequate
overall theories of leadership, attention turned to the situational aspects of leadership.

3.a) Fred Fiedler’s Contingency Theory of Leadership

Fiedler was one of the first scholars to introduce the influence of the situation in determining
leadership success in his 1967 book, "A Theory of Leadership Effectiveness." He believed
that there is no single most effective style that is appropriate to all situations. His
contingency model contained the relationship between leadership style and the favorableness of
the situation to determine leadership effectiveness.

Fiedler believed that effective group performance depends on the proper match between the
leader’s style and the degree to which the situation gives control to the leader. Therefore,
Fiedler’s model consists of 3 primary elements:

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1. Leadership Style (which according to Feidler is fixed)

2. Situational favorableness for leader (depends on Leader-Member Relations, Task
Structure and Position Power of the leader)
3. Relationship between Style and Situation

1. Measuring the Leadership Style:

Fiedler believed that the leadership style is fixed, and it can be measured using a scale which he
developed and called as the Least Preferred Co-worker (LPC) scale. The scale asks you to
think about the person who you have least enjoyed working with. This can be a person who you
have worked with in your job, or in education or training. You then rate on a scale of 1-8,
(where 1 being the lowest rating and 8 being the highest), how you feel about this person for
each factor (out of the 17 set of contrasting factors) and then add up your scores.

If your total score is high, you are likely to be a relationship-oriented leader. If your total
score is low, you are more likely to be a task-oriented leader.

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The model says that task-oriented leaders usually view their LPCs more negatively,
resulting in a lower score. Fiedler called these low LPC-leaders. He said that low LPCs are
very effective at completing tasks. They're quick to organize a group to get tasks and projects
done. Relationship-building is a low priority.

However, relationship-oriented leaders usually view their LPCs more positively, giving
them a higher score. These are high-LPC leaders. High LPCs focus more on personal
connections, and they're good at avoiding and managing conflict. They're better able to make
complex decisions.

2. Determining the Situational Favorableness: Fiedler’s model contained the relationship

between leadership style and the favorableness of the situation. Fiedler described situational
favorableness in terms of three empirically derived dimensions:

a) The leader member relationship, which is the most critical variable in determining the
situation’s favorableness. This is the level of trust and confidence that your team has in
you. A leader who is more trusted and has more influence with the group is in a more
favorable situation than a leader who is not trusted.

b) The degree of task structure, which is the second most important input into the
favorableness of the situation. This refers to the type of task you're doing: clear and
structured, or vague and unstructured. Unstructured tasks, or tasks where the team and
leader have little knowledge of how to achieve them, are viewed unfavourably.

c) The leader’s position power obtained through formal authority, which is the third most
critical dimension of the situation. This is the amount of power you have to direct the
group, and provide reward or punishment. The more power you have, the more favorable
your situation. Fiedler identifies power as being either strong or weak.

Situations are favorable to the leader if all three of the above dimensions are high. In
other words, if the leader is generally accepted by followers; if the task is very structured and
everything is “spelled out” and if a great deal of authority and power is formally attributed to
the leader’s position (high third dimension). If the opposite exists the situation will be very
unfavorable for the leader.

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Fiedler was convinced that the favorableness of the situation in combination with the leadership
style determines effectiveness. Through the analysis of research findings, Fiedler was able to

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discover that under very favorable and very unfavorable situations, the task-directed,
autocratic type of leader was most effective.

However, when the situation was only moderately favorable or unfavorable (the
intermediate range of favorableness), the human relations, or lenient, type of leader was
most effective.

Drawbacks:

1) Researchers often find that Fiedler's contingency theory falls short on flexibility.
2) There is also an issue with the Least-Preferred Co-Worker Scale – if you fall near
the middle of the scoring range, then it could be unclear which style of leader you are.
3) The contingency variables were complex and difficult for practitioners to assess.
4) This theory lacks practical applicability as it is difficult to determine how good the
leader-member relations were, how structured the task was, and how much position
power the leader had.

Inspite of these limitations, Fiedler model provides a starting point for situational leadership
research and provided evidence that effective leadership style needed to reflect on situational
factors.

3. B) Hersey and Blanchard’s situational leadership theory

Developed by Paul Hersey and Kenneth Blanchard, called as Situational Leadership Theory
(SLT). Most effective leadership style varies according to the level of readiness of the followers
and the demands of the situation. This theory is based on the relationship of the above two
factors:
 The amount of task behavior the leader figures (providing the directions on getting the
job done)
 The amount of relationship behavior the leader provides (consideration of people)
 The level of task relevant readiness followers have towards the accomplishment of the
leader’s task.

S1: Telling – High task, Low relationship behavior (Directive)

 It is about “telling” employees what, how, when and where to do the work.
 The decision making and problem solving are initiated solely by the leader and the
decisions and solutions announced to the employees. Therefore, the leader uses one way
communication at this stage.
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 He defines the roles and objectives of employees.

 This style is appropriate for managers dealing with new and inexperienced employees
who lack task-relevant readiness.

S2: Selling – High task, High relationship behavior (Supportive)

 At this stage, there is still a need for high level of task behavior, since the employees yet
do not have much experience to assume responsibilities.
 The leader still has to provide great deal of direction and leads the team with his or her
own ideas.
 But the leader also discovers the group’s feelings about decisions as well as eliciting
their ideas and suggestions. This leads to two-way communication and increase in
emotional support for employees.
 However, the control over decision-making remains with the leader only.

S3: Participating – High relationship, Low task behavior (Consulting)

 The employees have acquired more skill and experience, and are willing to take
responsibilities.

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 In this style, the focus of control for day-to-day decision making and problem solving
shifts from the leader to the group members. Therefore, the leader should reduce the
amount of task behavior as employees have improved in task-relevant effectiveness.
 The leader’s role is to provide recognition and to actively listen and facilitate decision
making on the part of the group.
 So, the leaders/managers should continue with the high-level of emotional support and
consideration for employees.
 This is the most appropriate leadership style.

S4: Delegating – Low relationship, Low task behavior

 This stage has the highest level of follower readiness.
 Employees at this stage are self-directed and self-controlled, as they are highly skilled
and experienced.
 The leader discusses problems with his or her team members until a joint agreement is
achieved on problem definition and then the decision making process is totally
delegated to the group members.
 The group members have the significant control over deciding how tasks are to be
accomplished. So they do not expect a high task behavior from the leader at this stage.

Merits and demerits of situational leadership theory

MERITS:
 This theory suggests that a manager’s leadership style must be adaptable and flexible
enough to meet the changing needs of employees and situations. It discards the view
that there is no single best leadership style to meet the demands of all situations.
 It is an useful and understandable frame-work for situational leadership.
DEMERITS:
 It is difficult and complex to identify the readiness level of followers and the demands
of situation.
 Managers must recognize that they need to adapt or change their leadership styles
whenever there is a change in the level of readiness of the followers for whatever
reason.

DIFFERENCE BETWEEN A LEADER AND MANAGER

1. Leaders create a vision, managers create goals:

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Leaders paint a picture of what they see as possible and inspire and engage their people in
turning that vision into reality. They think beyond what individuals do. They activate people to
be part of something bigger. They know that high-functioning teams can accomplish a lot more
working together than individuals working autonomously. Managers focus on setting, measuring
and achieving goals. They control situations to reach or exceed their objectives.
2. Leaders are change agents, managers maintain the status quo:
Leaders are proud disrupters. Innovation is their mantra. They embrace change and know that
even if things are working, there could be a better way forward. And they understand and accept
the fact that changes to the system often create waves. Managers stick with what works, refining
systems, structures and processes to make them better.

3. Leaders are unique, managers copy:

Leaders are willing to be themselves. They are self-aware and work actively to build their unique
and differentiated personal brand. They are comfortable in their own shoes and willing to stand
out. They’re authentic and transparent. Managers mimic the competencies and behaviors they
learn from others and adopt their leadership style rather than defining it.

4. Leaders take risks, managers control risk:

Leaders are willing to try new things even if they may fail miserably. They know that failure is
often a step on the path to success. Managers work to minimize risk. They seek to avoid or
control problems rather than embracing them.

5. Leaders are in it for the long haul, managers think short-term:

Leaders have intentionality. They do what they say they are going to do and stay motivated
toward a big, often very distant goal. They remain motivated without receiving regular rewards.
Managers work on shorter-term goals, seeking more regular acknowledgment or accolades.

6. Leaders grow personally, managers rely on existing, proven skills:

Leaders know if they aren’t learning something new every day, they aren’t standing still, they’re
falling behind. They remain curious and seek to remain relevant in an ever-changing world of
work. They seek out people and information that will expand their thinking. Managers often
double down on what made them successful, perfecting existing skills and adopting proven
behaviors.

7. Leaders build relationships, managers build systems and processes:

Leaders focus on people – all the stakeholders they need to influence in order to realize their
vision. They know who their stakeholders are and spend most of their time with them. They
build loyalty and trust by consistently delivering on their promise. Managers focus on the
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structures necessary to set and achieve goals. They focus on the analytical and ensure systems
are in place to attain desired outcomes. They work with individuals and their goals and
objectives.

8. Leaders coach, managers direct:

Leaders know that people who work for them have the answers or are able to find them. They
see their people as competent and are optimistic about their potential. They resist the temptation
to tell their people what to do and how to do it. Managers assign tasks and provide guidance on
how to accomplish them.

9. Leaders create fans, managers have employees.

Leaders have people who go beyond following them; their followers become their raving fans
and fervent promoters – helping them build their brand and achieve their goals. Their fans help
them increase their visibility and credibility. Managers have staff who follow directions and seek
to please the boss.

CONTEMPORARY LEADERSHIP APPROACH:

1. Transactional leadership (Influence based leadership approach): Transactional leadership

is largely characterized by a desire to maintain the company's existing culture, policies, and
procedures. Transactional leaders use disciplinary power and an array of incentives to motivate
employees to perform at their best.

The term "transactional" refers to the fact that this type of leader essentially motivates
subordinates by exchanging rewards or punishment for performance. A transactional leadership
style can be more effective for front-line supervisors who deal with minimum-wage employees.

Within the context of Maslow's hierarchy of needs, transactional leadership works at the basic
levels of need satisfaction, where transactional leaders focus on the lower levels of the hierarchy.
Transactional leaders use an exchange model, with rewards being given for good work or
positive outcomes. Conversely, people with this leadership style also can punish poor work or
negative outcomes, until the problem is corrected.

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Dr. Pallabi Mund, Assistant Professor (HR & OB)

One way that transactional leadership focuses on lower level needs is by stressing specific task
performance. Transactional leaders are effective in getting specific tasks completed by managing
each portion individually.

2. Transformational leadership (Influence based leadership approach): A transformational

leader goes beyond managing day-to-day operations and crafts strategies for taking his company,
department or work team to the next level of performance and success.

Transformational leadership styles focus on team-building, motivation and collaboration with

employees at different levels of an organization to accomplish change for the better.
Transformational leaders set goals and incentives to push their subordinates to higher
performance levels, while providing opportunities for personal and professional growth for each
employee. CEOs or sales managers can be more effective if they are transformational leaders.
Example: Jack Welch, CEO of General Electric Co, USA.

3. Leader-member Exchange (LMX): theory proposes that the type of relationship leaders
have with their followers (members of the organization) is the key to understanding how leaders
influence employees. Leaders form different types of relationships with their employees. In high-
quality LMX relationships, the leader forms a trust-based relationship with the member. The

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Dr. Pallabi Mund, Assistant Professor (HR & OB)

leader and member like each other, help each other when needed, and respect one another. In
these relationships, the leader and the member are both ready to go above and beyond their job
descriptions to promote the other’s ability to succeed. In contrast, in low-quality LMX
relationships, the leader and the member have lower levels of trust, liking, and respect toward
each other. These relationships do not have to involve actively disliking each other, but the
leader and member do not go beyond their formal job descriptions in their exchanges. In other
words, the member does his or her job, the leader provides rewards and punishments, and the
relationship does not involve high levels of loyalty or obligation toward each other

If you have work experience, you may have witnessed the different types of relationships
managers form with their employees. In fact, many leaders end up developing differentiated
relationships with their followers. Within the same work group, they may have in-group
members who are close to them and out-group members who are more distant. If you have ever
been in a high-quality LMX relationship with your manager, you may attest to its advantages.
Research shows that high-quality LMX members are more satisfied with their jobs, more
committed to their companies, have higher levels of clarity about what is expected of them, and
perform at a higher level. Their high levels of performance may not be a surprise because they
may receive higher levels of resources and help from their managers as well as more information
and guidance. If they have questions, these employees feel more comfortable seeking feedback
or information. Because of all the help, support, and guidance they receive, those employees who
have a good relationship with the manager are in a better position to perform well. Given all they
receive, these employees are motivated to reciprocate to the manager, and therefore they
demonstrate higher levels of citizenship behaviors such as helping the leader and coworkers.
Being in a high-quality LMX relationship is also advantageous because a high-quality
relationship is a buffer against many stressors, such as being a misfit in a company, having
personality traits that do not match job demands, and having unmet expectations. The list of
benefits high-quality LMX employees receive is long, and it is not surprising that these
employees are less likely to leave their jobs.

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 Biju Patnaik Institute of IT & Management Studies, Bhubaneswar

Dr. Pallabi Mund, Assistant Professor (HR & OB)

4. Servant Leadership:

The early 21st century has been marked by a series of highly publicized corporate ethics
scandals: between 2000 and 2003, we witnessed Enron, WorldCom, Arthur Andersen, Qwest,
and Global Crossing shake investor confidence in corporations and leaders. The importance of
ethical leadership and keeping long-term interests of stakeholders in mind is becoming more
widely acknowledged.

Servant leadership approach defines the leader’s role as serving the needs of others. According to
this approach, the primary mission of the leader is to develop employees and help them reach
their goals. Servant leaders put their employees first, understand their personal needs and desires,
empower them, and help them develop in their careers. Unlike mainstream management
approaches, the overriding objective in servant leadership is not necessarily getting employees to
contribute to organizational goals. Instead, servant leaders feel an obligation to their employees,
customers, and the external community. Employee happiness is seen as an end in itself, and
servant leaders sometimes sacrifice their own well-being to help employees succeed. In addition
to a clear focus on having a moral compass, servant leaders are also interested in serving the
community. In other words, their efforts to help others are not restricted to company insiders, and
they are genuinely concerned about the broader community surrounding their company.
According to historian Doris Kearns Goodwin, Abraham Lincoln was a servant leader because of
his balance of social conscience, empathy, and generosity Even though servant leadership has
some overlap with other leadership approaches such as transformational leadership, its explicit
focus on ethics, community development, and self-sacrifice are distinct characteristics of this
leadership style. Research shows that servant leadership has a positive effect on employee
commitment, employee citizenship behaviors toward the community (such as participating in
community volunteering), and job performance. Leaders who follow the servant leadership
approach create a climate of fairness in their departments, which leads to higher levels of
interpersonal helping behavior.

Servant leadership is a tough transition for many managers who are socialized to put their own
needs first, be driven by success, and tell people what to do. In fact, many of today’s corporate
leaders are not known for their humility! However, leaders who have adopted this approach
attest to its effectiveness. David Wolfskehl, of Action Fast Print in New Jersey, founded his
printing company when he was 24. He marks the day he started asking employees what he can
do for them as the beginning of his company’s new culture. In the next two years, his company
increased its productivity by 30%.

5. Charismatic Leadership

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Dr. Pallabi Mund, Assistant Professor (HR & OB)

A person who is dominant, self-confident, convinced of the moral righteousness of his beliefs,
and able to arouse a sense of excitement and adventure in followers. The four characteristics of
charismatic leaders are –

 Have a vision,
 Are willing to take personal risks to achieve the vision
 Are sensitive to follower needs
 Exhibit behaviors that are out of the ordinary

6. Authentic Leadership

Leaders have to be a lot of things to a lot of people. They operate within different structures,
work with different types of people, and they have to be adaptable. At times, it may seem that a
leader’s smartest strategy would be to act as a social chameleon, changing his or her style
whenever doing so seems advantageous. But this would lose sight of the fact that effective
leaders have to stay true to themselves. The authentic leadership approach embraces this value:
its key advice is “be yourself.” Think about it: We all have different backgrounds, different life
experiences, and different role models. These trigger events over the course of our lifetime that
shape our values, preferences, and priorities. Instead of trying to fit into societal expectations
about what a leader should be like, act like, or look like, authentic leaders derive their strength
from their own past experiences. Thus, one key characteristic of authentic leaders is that they are
self-aware. They are introspective, understand where they are coming from, and have a thorough
understanding of their own values and priorities. Second, they are not afraid to act the way they
are. In other words, they have high levels of personal integrity. They say what they think. They
behave in a way consistent with their values—they practice what they preach. Instead of trying to
imitate other great leaders, they find their style in their own personality and life experiences.

One example of an authentic leader is Howard Schultz, the founder of Starbucks coffeehouses.
As a child, Schultz witnessed the job-related difficulties his father experienced because of
medical problems. Even though he had no idea he would have his own business one day, the
desire to protect people was shaped in those years and became one of his foremost values. When
he founded Starbucks, he became an industry pioneer in providing health insurance and
retirement coverage to part-time as well as full-time employees.

Authentic leadership requires understanding oneself. Therefore, in addition to self-reflection,

feedback from others is needed to gain a true understanding of one’s behavior and effect on
others. Authentic leadership is viewed as a potentially influential style because employees are

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Dr. Pallabi Mund, Assistant Professor (HR & OB)

more likely to trust such a leader. Moreover, working for authentic leaders is likely to lead to
greater levels of satisfaction, performance, and overall well-being on the part of employees.

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