Chapter 8

LEADERSHIP

Leadership is a very important, if not the most important factor in the success of
organizations. This has been pointed out time and again throughout history by leaders
like Abraham Lincoln, Julius Caesar, Napoleon Bonaparte, Oliver Cromwell, and many
others. In business, the exemplary leadership abilities of Walt Disney, Bill Gates, Akito
Morita, John D. Rockefeller, and many others are proofs that with the right kind of
leadership, organizations can succeed.

WHAT IS LEADERSHIP
Leadership may be defined as the process of guiding and directing the behavior
of people in the organization in order to achieve certain objectives.
In a competitive situation, it is often leadership that spells the difference between
success and failure. Even when the organization is short of material resources, the right
leadership can sometimes get people so inspired that they are able to perform credibly.
Leadership is that element that convinces members of an organization to behave
in such a manner that will facilitate the accomplishment of the goals of the organization.

The Difference between Leadership and Management

Leading is one of the functions of management. The other functions consist of
planning, organizing, directing, and controlling. Without sufficient leadership, these other
functions can be rendered useless because people will not be motivated to put them in
operation.
Managers and leaders are different in the following ways:
1. Managers are rational problem solvers, while leaders are intuitive, more
visionary:
2. Managers perform other administrative function such as planning, organizing
decision-making and communicating;
3. Leaders are primarily concerned with results; managers are concerned with the
efficiency of results; and
4. Leaders obtain their power from below; managers obtain theirs from above.
KINDS OF LEADERSHIP
Leadership are of two kinds
1. Formal; and
2. Informal.
Formal Leadership
Formal leadership refers to the process of influencing others to pursue official
objectives. Formal leaders are vested with formal authority and as such, they generally
have a measure of legitimate power. They rely on expedient combination of reward,
coercive, referent, and expert power.
Informal Leadership
Informal leadership refers to the process of influencing others to pursue unofficial
objectives. Informal leaders lack formal authority. Like formal leaders, they rely on
expedient combination of reward, coercive, referent, and expert power
Informal leaders who are satisfied with their jobs are valuable assets of the
organization. When they are not satisfied, they become liabilities. Their power to
motivate people can be used to convince employees to cause harm to the organization.

POWER AND THE LEADER

The main concern of a leader is to influence people to behave as he wants them
to. The leader, however, can influence only if he possess power, and this emanates
only from either the group of the leader.
The bases of power that the leader may use to convince subordinates may be
classified as either:
1. Position power; or
2. Personal power

Position Power
Position power is that power derived as a consequence of the leader's position. It
consists of the following types:
1. Legitimate power
2. Reward power
3. Coercive power
 Legitimate Power. Also referred to as authority, this power emanates from a
person's position in the organization. A manager, for instance, is given the right by the
organization to influence or command certain individuals. Orders from him are followed
by the subordinates because he has the legitimate power to command certain
subordinates in lower positions. When an order is not followed, the offending
subordinate is subjected to disciplinary action.

The legitimate power vested in a person is characterized by the following:

1. It is invested in a person's position. Even if the person occupying the position is
replaced, the power remains and the new occupant can exercise it.
2. It is accepted by subordinates. The persons working under the supervision of a
manager believes that the manager has the right to tell them what to do and what
to expect from them.
3. Authority is used vertically. The flow of authority is from the top level down to the
lower levels.

Reward Power. This power emanates from one's ability to grant rewards to those who
comply with a command or request. The leader's capacity to provide promotions,
money, praise, and other rewards influences the behavior of subordinates.
Coercive Power. This power arises from the expectation of subordinates that they will
be punished if they do not conform to the wishes of the leader. The punishment can
take the form of dismissal, suspension, and transfer to a less desirable task, and the
like. This power uses fear as a
motivator, which can be a powerful
force in inducing short-term action.
The use of this power, however,
have overall negative impact on the
individual affected.
Coercive power is reduced by
the presence of unions and
organizational policies on employee
treatment.
Personal Power
The leader's personal power results from his personal characteristics. It may be
any or both of the following:
1. Expert power
2. Referent power
Expert power. An expert who possess and can dispense valued information
generally exercise expert power over those in need of such information. Doctors,
lawyers, and computer specialists are examples of persons who may have expert
power.
The expert power of the leader depends on his education, training, and experience.
Referent Power. This power refers to the ability of leaders to develop followers from the
strength of their own personalities. Leaders who possess this power have a personal
magnetism, an air of confidence, and a passionate belief in objectives that attract and
hold followers.
People follow because their emotions push them to do so. Some religious and
political leaders like Nelson Mandela of Africa, the late Mother Teresa, and the late
Michael Jackson are example of those who have or had referent power.

THEORIES ABOUT LEADERSHIP

 There are various theories about leadership and they may be regarded as
attempts to explain the various factors that may be identified with successful leadership.
Through the years, eminent researchers have forwarded their own theories about
leadership. Their outputs may be classified as follows:
1. Trait theories
2. Behavioral theories
3. Contingency theories

Trait Theories
Trait theories of leadership consider leaders to possess common traits. Early
researchers on leadership placed emphasis on traits and had resulted in the
determination of a wide span of personal attributes such as physical appearance,
intelligence, and self-confidence.
It was found out that the average person who occupies a position of leadership
exceeds the average number of his group to some degree on the following factors:
1. Sociability
2. Persistence
3. Initiative
4. Knowing how to get things done
5. Self-confidence
6. Alertness to and insight into situations
7. Cooperativeness
8. Popularity
9. Adaptability
10. Verbal facility
Later, researchers, guided by their findings, drafted a more general view of what
good leaders have in common. These consist of the following:
1. Extraversion - individuals who like being around people and are able to assert
themselves.
2. Conscientiousness - individuals who are disciplined and keep commitments that
they make.
3. Openness - individuals who are creative and flexible.
4. Emotional intelligence - individuals who are able to understand and manage their
personal feelings and emotions, as well as their emotion towards other
individuals, events, and objects.
A single statement that describes what trait theories assume is that "leaders are
born than made."
Behavioral Theories
After some years, trait theories were found to be inadequate in explaining the
basis for effective leadership. As a result, researchers shifted their interest to behaviors
exhibited by specific leaders.
What the researchers developed came to be known as behavioral theories of
leadership. These theories propose that specific behaviors differentiate leaders from
non-leaders.
Four theories related to leadership behavior will be presented in this section.
These are as follows:
1. The Ohio State University studies
2. The University of Michigan studies
3. The Yukl studies
4. The Managerial Grid

Ohio State University Studies. An important leadership research program was started
at Ohio State University during the late 1940s. The researchers sought to identify
independent dimensions of leader behavior.
A questionnaire was administered in both industrial and military settings to
measure subordinates' perception of their superior’s leadership behavior. Beginning
with over a thousand dimensions, they eventually narrowed the list to two categories
that substantially accounted for most of the leadership behavior described by
employees.
The two dimensions were referred to as:
1. Initiating structure, and
2. Consideration.
Initiating structure refers to the extent to which a leader is likely to define his or
her role and those of employees in the search for goal attainment. The leader with a
high initiating structure tendency focuses on goals and results, so he or she might be
seen as similar to a production-oriented supervisor.
Structure is initiated by activities such as assigning specific tasks, specifying
procedures to be followed, scheduling work, and clarifying expectations.
Consideration describes the degree to which the leader creates an environment of
emotional support, warmth, friendliness, and trust. The leader's behaviour would be one
that is friendly and approachable, looking out for the personal welfare of the group,
keeping the group informed about new developments, and doing small favors for group
members.
 The findings of the Ohio studies indicate that successful leaders are those that are
engaged not in one of the two behaviors but in both, ie, initiating and consideration.

University of Michigan Studies. At about the same time that the Ohio State University
was engaged in a research program on leadership, the researchers at the University of
Michigan were also making attempts to locate behavioral characteristics of leaders that
appeared to be related to measures of performance effectiveness.
The effectiveness criteria used are as follows:
1. Productivity for work hour or other similar measures of the organization's success
in achieving its production goals;
2. Job satisfaction of members of the organization;
3. Turnover, absenteeism, and grievance rates;
4. Costs;
5. Scrap loss, and
6. Employee and managerial motivation.
In the course of their studies, the researchers identified two distinct styles of
leadership:
1. Job-centered; and
2. Employee-centered.
Job-centered managers set tight work standards, organized tasks carefully,
prescribed the work methods to be followed, and supervised closely.
Employee-centered managers encouraged group members to participate in goal
setting and other work decisions, and helped to ensure high performance by
engendering trust and mutual respect.
The researchers found out that the most productive work groups tended to have
leaders who were employee-centered rather than job centered.

Yukl Studies. Other researchers like Gary M. Yuki made one step further than the
Michigan and Ohio State studies. He and his colleagues tried to seek answers to
specific behavior of leaders for varying situations. They were able to isolate nineteen
behaviors consisting of the following:

1. Performance emphasis. The extent, to which a leader emphasizes the

importance of subordinate performance, tries to improve productivity and
efficiency, tries to keep subordinates working up to their capacity, and checks on
their performance.
2. Consideration. The extent to which a leader is friendly, supportive, and
considerate in his or her behaviour toward subordinates and tries to be fair and
objective.
3. Praise-Recognition. The extent to which a leader provides praise and recognition
to subordinates with effective performance, shows appreciation for their special
efforts and contributions, and makes sure they get credit for their helpful ideas
and suggestions.
4. Decision-Participation. The extent to which a leader consults with subordinates
and otherwise allows them to influence his or her decisions.
5. Coaching. The extent to which a leader determines 5. Training training needs for
subordinates and provides any necessary training and coaching.
6. Problem Solving. The extent to which a leader takes the initiative in proposing
solutions to serious work-related problems and acts decisively to deal with such
problems when a prompt solution is needed.
7. Work Facilitation. The extent to which a leader obtains for subordinates any
necessary supplies, equipment, support services, or other resources, eliminates
problems in the work environment, and removes other obstacles that interfere
with the work.
8. Inspiration. A leader has the ability to be a positive influence on the working
environment that motivates co-employees toward success.
9. Structuring reward contingencies. A leader grants reward in accordance to the
employee performance and by using a reward system to motivate the employees
to meet their identified goals.
10. Autonomy-Delegation. A leader delegates task to boost team and organizational
performance and efficiency to each of the employees through maximizing
employee contributions and increasing productivity among all members of a
team.
11. Role Clarification. A leader develops clarity about the roles and responsibilities
on the team that results to high-performing teamwork.
12. Goal Setting. A leader stays focused and prioritize, keeping actions in
accordance to the team goals, this help both the team members and leader.
13. Information Dissemination. A leader encourage communication to make the right
decisions for the team and in mangers point of view, in order to make decisions
regarding the costs of production and sale.
14. Planning. A leader effectively plan and organize work by thinking critically about
how to best allocate available resources so as to maximize returns, thus quickly
earn respect from their because they can turn strategy into execution, and ideas
into action.
15. Coordinating. A leader is able to coordinate his co-members or employees
around the mission statement, which communicates the future course of action of
the organization. 
 16. Representation. A leader delegates task to boost team and organizational
performance and efficiency to each of the employees through maximizing
employee contributions and increasing productivity among all members of a
team.
17. Interaction Facilitation. A leader focus on his followers around a credible mission
statement, which communicates the future course of action of the organization. 
18. Conflict Management. A leader has the ability to identify and handle conflicts
efficiently and fairly.
19. Criticism-Discipline. A leader corrects a bad behavior and criticize if necessary,
to improve work performance.

The Managerial Grid. The managerial grid is a graphic portrayal of a two-dimensional

view of leadership developed by Robert Blake and Jane Mouton. It is an approach to
understanding a manager's concern for production and concern for people. As such, the
grid was structured to contain two underlying dimensions labelled Concern for
Production in which a leader emphasizes concrete objectives, organizational efficiency
and high productivity when deciding how best to accomplish a task, and Concern for
People in which a leader considers team members' needs, interests and areas of
personal development when deciding how best to accomplish a task. These attitudinal
dimensions are coupled through an interaction process. Figure 28 shows each of these
concerns as one of the two axes of the grid, so that concerns for both people and
productivity are combined in various management styles.
The Managerial grid proposes that there is a best way to manage people, i.e., the
way used by the 9,9 manager, who has 9 units of concern for production and 9 units of
concern for people.
The grid has 9 possible positions along each axis, creating 81 different positions
which the leader's style may fall. Managers were found to perform best under a 9,9 style
rather than the other style like 9,1 (the authority type) or 1,1 (the laissez-faire type).

A brief description of selected styles in the grid is provided as follows:

o 1,1 Impoverished manager, also referred to as the laissez faire leaders.
Leaders in this position have little concern for people or productivity, avoid
taking sides, and stay out of conflicts. They do just enough to get by. This
leadership. style is a form of abdication of responsibility.
 o 1,9 Country club manager. Leaders in this position have great concern for
people and little concern for production. They try to avoid conflicts and
concentrate on being well-liked. To them, no task is more important than good
interpersonal relations. Their goal is to keep people happy.
o 9,1 Authority-obedience manager, Leaders in this position have great concern
for production and little concern for people. They desire tight control in order to
get tasks done efficiently. They consider creativity and human relations
unnecessary.
o 5,5 Organization man manager, also called middle-of the-road manager.
Leaders in this position have medium concern for people and production. They
attempt to balance their concern for both people and production, but are not
committed to either.
o 9,9 Team manager. The leadership style of this manager is considered to be
ideal. He has great concern for both people and production. He works to
motivate people to reach their highest levels of accomplishment.

Contingency Theories
The trait and behavioral theories failed to point out that leadership situations are not
similar, and it is easy to presume that there is no single leadership style that will fit all
situations. This line of thinking led researchers to engage in research activities that were
later called contingency. The individual researchers share a fundamental assumption:
successful leadership occurs when the leader's style matches the situation.
The various theories related to the situational approach to leadership consist of the
following:
1. Continuum of Leadership Behavior-by Tannenbaum and Schmidt
2. The Contingency Leadership Model-by Fiedler
3. The Path-Goal-by House and Mitchell
4. The Hershey-Blanchard Situational Leadership Theories
5. The Leader Member Exchange Approach - by Graen
6. The Normative Decision Model-by Vroom and Jago
7. The Muczyk-Reimann Model

Continuum of Leadership Behavior. The first contingency model of leadership was

developed by Robert Tannenbaum and Warren H. Schmidt and is referred to as the
continuum of leadership behavior. This model consists of seven alternative ways for
managers to approach decision making depending on how much participation they want
to allow subordinates in the decision-making process.
Shown in Figure 29 are the alternative behaviors of the leader which are situated
between the two extremes of authoritarian and participative approaches.

The leader's choices depend on three factors:

1. Forces in the manager;
2. Forces in subordinates; and
3. Forces in the situation.

Under this approach, the effective leaders are flexible, able to select leadership
behaviours needed in a given time and place.
Forces in the manager consist of the manager's background, knowledge, values,
and experience. How the manager will lead will primarily be influenced by these forces.
For example, if the manager worked for ten years as a subordinate of a well-performing
leader who adapted the participative style, he will tend to be a participative leader
himself.
In choosing an appropriate leadership style, the manager must also consider the
forces in subordinates.
The leadership style of greater participation and freedom can be exercised by the
manager if the subordinates:
1. Are craving for independence and freedom of action;
2. Want to have decision making responsibility;
3. Identify with the organization's goals;
4. Are knowledgeable and experienced enough to deal with the problem efficiently;
5. Have experience with previous managers that lead them to expect participative
management

When the above conditions are absent, managers will have to lean toward the
authoritarian style.
Lastly, the manager's choice of leadership style must reckon with situational forces
such as: the organization's preferred style, the specific work group, the nature of the
group's tasks, the pressures of time, and environmental factors.
There are instances when the organization's top management favors certain
leadership style, and most managers will have to move towards it.
 There are groups that are more likely to perform well in an environment of
participation rather than its opposite, the authoritarian form. An example is that group of
accountants working in an accounting firm serving clients.
The nature of the problem and time pressures are examples of situational factors
that may influence the choice of leadership style. For example, the team leader of the
emergency crew of a large hospital has no option but to adapt an authoritarian
leadership style.
The Contingency Leadership Model. This is a leadership model developed by
Fred Fiedler which proposes that effective group performance depends on the proper
match between the leader's style and the degree to which the situation favors the
leader.
Fiedler measures leadership style through the use of the Least Preferred
Coworker (LPC) Scale which is actually an instrument that assesses the degree of
positive or negative feelings held by a person toward someone with whom he or she
least prefers to work. Low scores on the LPC is a reflection of the leader who is task-
oriented, or controlling, and with a structuring leadership style. High scores reflect a
leadership style that is relationship-oriented, or one that is passive and considerate.

To determine how favorable the leadership environment is, Fiedler maintains that it will
depend on three factors:
1. Leader-member relations
2. Task structure
3. Position power
Leader-member relations refer to the degree of confidence, trust, and respect the
followers have in their leader.
Task structure refers to the extent to which the tasks the followers are engaged in are
structured. Tasks structure is high when the task is clearly specified and known as to:
1. What followers are supposed to do;
2. How they will do it;
3. When and in what sequence it is to be done; and
4. What decision options they have.
Task structure is low when the task in unclear, ambiguous, or unspecifiable.
Position power refers to the power inherent in the leadership position. Generally,
greater authority means greater position power. The leader with a strong position power
will find it easier to perform his job. Some positions, such as the presidency of a big
manufacturing firm, carry a great deal of power and authority. The president of a civic
organization, on the other hand, has less power over members. Thus, leaders with high
position power can easily influence subordinates. while those with less position power
finds it difficult to perform their tasks.
Together, the three factors determine how favorable the situation is for the
leader. The most favorable situation exists when there is good leader-member relations,
high task structure, and strong position power. The least favorable situation happens
when there is poor relations, low degree of structure, and weak position power.
After identifying the leadership style of the manager or leader, and after defining
the situation, the next move is to match the situation to the leader. Fiedler believed that
task-oriented leaders tend to perform better in situations that are either highly favorable
or highly unfavorable. On the other hand, relationship-oriented leaders perform best
when the situation is moderately favorable or moderately unfavorable. Thus, if a leader
is moderately liked and possesses some power, and the job tasks for subordinates are
somewhat vague, the leadership style needed to achieve the best results is relationship
oriented.
The Path-Goal Model. This is a leadership model developed by Robert House and
Terrence Mitchell that states that the leader's job is to create a work environment
through structure, support, and rewards that helps employees reach the organization's
goals.
The two major roles involved are:
1. The creation of a good orientation and
2. The improvement of the path toward the goals so that they will be attained.
The path-goal process is illustrated in Figure 30. The first step is for the leader to
identify employee needs, then to provide appropriate goals, and then to connect goal
accomplishment to rewards that may be expected.

House and Mitchell identified four leadership behaviors

1. The directive leader. This is the type of leader who lets followers know what is
expected of them, schedules work to be done, and gives specific guidance as to
how to accomplish tasks.
2. The supportive leader. This is the type of leader who is friendly and shows
concern for the needs of followers.
3. The participative leader. This is the leader who consults with followers and
uses their suggestions before making a decision.
4. The achievement-oriented leader. This is the leader who sets challenging
goals and expects followers to perform at their highest level.
 According to House, leaders are flexible and any of them can display any or all of
these behaviours depending on the circumstances.
The Hershey Blanchard Situational Leadership Theory. Developed by Paul Hershey
and Kenneth Blanchard, the Situational Leadership Theory (SLT) suggests that a
leader's style should be determined by matching it with the maturity level (or readiness)
of each subordinate.
The leader must know follower's readiness and then use a leadership style that fits
the level. Readiness refers to the ability and willingness of subordinates to take
responsibility for directing their own behavior.
Readiness consists of two concerns
1. Job readiness (or task competence); and
2. Psychological readiness (or commitment).

A person who has high task competence has the knowledge and abilities to perform
this job without a manager structuring or directing the work. A person who has high
commitment has the self-motivation and desire to do high quality work
Based on the foregoing, subordinates may be classified as follows:
1. Those with low competence and low commitment (D-1);
2. Those with low competence but high commitment (D-2);
3. Those with high competence but with low commitment (D-3);
4. Those with high competence with high commitment (D-4).
To match the various states of readiness by subordinates, Hershey and Blanchard
devised four leadership styles available to leaders:
1. A “directing” style that is best for low follower readiness. The direction provided
by this style defines roles for people who are unable and unwilling to take
responsibility themselves; it eliminates any insecurity about the task that must be
done.
2. A “coaching” style that is best for low to moderate follower readiness. This
style offers both tasks direction and support for people who are unable but willing
to take task responsibility; it involves combining directive approach with
explanation and reinforcement in order to main enthusiasm.
3. A “supporting” style that is best for moderate to high follower readiness. Able
but unwilling followers require supportive behavior in order to increase their
 motivation; by allowing followers to share in decision making, this stye help
enhance the desire to perform a task.
4. A “delegating” style that is best for high readiness. This style provides little in
terms of direction and support for the task at hand; it allows able and willing
followers to take responsibility for what needs to be done.

The Leader-Member Exchange Approach. This refers to the leadership theory

developed by George Graen and his associates which recognize that leaders develop
unique working relationships with each group member. Leaders and their followers
exchange information, resources, and role expectations that determine the quality of
their interpersonal relationships.
The effect of leader-member relations come into view when the leader, knowingly or
unknowingly, creates in-groups and out-groups within the organization. Subordinates
with in-group status will have higher performance ratings, less turnover, and greater job
satisfaction.
In-group members have attitudes and values similar to those of the leader and
interact frequently with the leader. They are given additional rewards, responsibility, and
trust in exchange for loyalty and performance. They become part of a smoothly
functioning team headed by the formal leader.
Out-group members are treated in accordance with a more formal understanding of
supervisor-subordinate relations. They have less in common with the leader and
operate in a way that is somewhat detached from the leader. They are less likely to
experience good teamwork.
The quality of the relationship between the leader and each group member has
important job consequences. Good relationships can lead to important effects such as
higher productivity and satisfaction, improved motivation, and smoother delegation.

Normative Decision Model. Also known as the leader. participation model" and
"decision making model of leadership, the normative decision model was developed by
Victor and Philip Yetton. Some years later, the model was revised by Vroom and Arthur
Jago to make it more accurate.
The model views leadership as a decision-making process in which the leader
examines certain factors within the situation to determine which decision-making style
will be most effective.
Five decision making styles are presented by the normative model, each reflecting a
different degree of participation by group members:
 1. Autocratic I - the leader individually solves the problem using the information
already available.
2. Autocratic II - the leader obtains data from subordinates and then decides.
3. Consultative I - the leader explains the problem to individual subordinates and
obtains ideas from each before deciding.
4. Consultative II - the leader meets with group of subordinates to share the
problem and obtain inputs, and then decides.
5. Group II the leader shares problem with group and facilitates a discussion of
alternatives aiming to reach a group agreement on a solution.

The normative decision model is based on the following assumptions:

1. The leader can accurately classify problems according to the criteria offered.
2. The leader is able and willing to adapt his or her leadership style to fit the
contingency condition he or she faces.
3. The leader is willing to use a rather complex model.
4. The employees will accept the legitimacy of different styles being used for
different problems, as well as the validity of the leader's classification of the
situation at hand.

The normative model will be useful if all these assumptions are valid.

The Muczyk-Reimann Model. This model was developed by Jan P. Muczyk and
Bernard C. Reimann, and it suggests that "participation" behavior is concerned with the
degree to which subordinates are allowed to be involved in decision making. It is
separated from "direction" which is viewed as the degree of supervision exercised in the
execution of the tasks associated with carrying out the decision.
Muczyk and Reimann propose that leaders should be allowed to adapt to different
situations. This paves the way for delegation which covers decision making and
execution.

To make delegation effective, four leadership styles are considered:

1. The directive autocrat. The leader makes decisions unilaterally and closely
supervises the activities of subordinates.
 2. The permissive autocrat. This leader makes decision unilaterally but allows
subordinates a great deal of latitude in execution.
3. The directive democrat. This leader wants full participation but closely
supervises subordinate activity.
4. The permissive democrat. This leader allows high: participation in decision
making and in execution.

Muczyk and Reimann maintains that there are situations that would be right for each
of the leadership styles they presented. For instance, the directive autocrat would be the
appropriate leader for subordinates who are less skilled, less mature psychologically,
and given limited time to perform.