Business Leadership Final Exam Suggestions

Theory Lectures

1. Explain the level 5 leadership theory.

Level 5 leaders are participative leaders. The reason these leaders are humble is that they see
clearly their own limitations in a complex environment.
So, instead of promoting their own visions, they get their best people together and probe them
with penetrating questions to draw new strategies out of them.
Hence the related slogan: "first who, then what." Because Chief Executives can't decide what to
do alone, they need the input of a team of smart associates. They get the best "who" into a room
and together decide the best "what."
The essential difference, therefore, is that the level 4 leader provides direction while the level 5
leader is a facilitator who draws ideas for new directions out of others.
Level 5 leadership is a modern version of the participative leadership style.

2. Explain the leader member exchange theory.

Since leadership is increasingly taking place within a team context and more organizations are
using work team, the role of leader in guiding team members has become increasingly important,
which gave birth of the team leadership concept. The roles of such leadership are:
• Liaison with external constituencies
• Trouble-shooter
• Conflict manager
• Coach
Most leaders develop a high-exchange relationship with a small number of trusted subordinates
who function as assistants or advisors. As leaders do not interact with all followers equally, the
ultimate result is the LMX theory.
In 1975 Graen and Cashman suggested that exchange relationships are formed on the basis of
personal compatibility and subordinate competence and dependability. Over time, a leader is
likely to establish either a high exchange relationship or low exchange relationship.
High-quality LMX relationships are often characterized by greater input in decision, mutual
support, informal influence, trust and greater negotiation latitude.
Low quality LMX relationship are characterized by less support, more formal supervision, little or
no involvement in decision, less trust.

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 3. What is power? Discuss the types of power.

Power involves the capacity of one party (the agent) to influence another party (target). The term
may refer to the agent’s influence over a single target person, or over multiple target persons. In
our study the term power usually used to describe absolute capacity of an individual agent to
influence the behaviour or attitude of target persons/persons.

Types of Power

1. Legitimate Power: Formal authority is sometime called legitimate power

2. Reward Power: Reward power stems in part from formal authority to allocate resource and
rewards. Pay increase, bonus, etc
3. Coercive Power: Based on authority over punishment.
4. Referent Power: is derived from desire of others to please an agent toward whom they have
strong feelings of affection, admiration, and loyalty. Willing to do special favors for friend and
they are more likely to carry out requests made by someone they greatly admire. Ways to
Acquire and Maintain:
i. Show acceptance and positive regard
ii. Act supportive and helpful
iii. Use sincere forms of ingratiation
iv. Depend and back up people when appropriate
v. Do unsolicited favors
vi. Make self-sacrifices to show concern
vii. Keep promise

5. Expert Power: Task-relevant knowledge and skill are a major source of personal power. Unique
knowledge about best way to perform task or solve an important problem provides potential
influence over subordinates, peer and superiors. Expertise is a source of power only if others are
dependent on the agent for advice.
6. Information Power: This type of power involves both the access to vital information and control
over its distribution to others
7. Ecological Power: Control over physical environment, technology, and organization of work
provides an opportunity for indirect influence over other people.

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4. Diagram of chronological evolution of leadership theory

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 5. Causes/analysis of all paradigm shifts

Since ancient time many smart theories of leadership have come and gone. Some looked at the
leader, some looked at the situation, but none stood the test of time. In the quest of one best
style for all situations, paradigms of leadership research were continuously shifting from one to
the other.

There is no single style accepted by all researchers that can guarantee success in every situation
and organization. Hence, no concepts or theories can be considered which may offer the world's
best vision for all situations.

Then the endeavour to search for the best vision, shifted its paradigm; from the theories towards
the leaders, because the best vision may also be prevalent among the most influential leaders of
human history.

Analysis on Traits Theory (Early Leadership Theory)

During 1930s and 1940s to discover a list of traits all successful leaders possess, but the
researchers could not agree with any single list of traits that guarantee leadership success and in
addition not all effective leaders have all these traits. Thus, trait theory failed to find favour.
• Firstly, it is linked with the assumption that the leader is born. This goes against dynamic
nature of human personality.
• Secondly, exclusive research failed to find out even a few traits which could be common
to all leaders. Each leader has a unique personality.
• Thirdly, the list of human traits is too long. Thus trait theory was gradually weighing out.
There appears to be some traits that constantly differentiate leaders from others, so that trait
theory does have some claim to universality.

Analysis on Behavioural Theory

1. Hundreds of studies examined the relationship between leadership behavior and measures of
leadership effectiveness. Unfortunately, no leadership behavior was found consistently
associated with leadership effectiveness. So, there was no agreement on one best leadership
style for all management situations.

2. Researchers did identify two generic dimensions of leader behavior: task –and people –
oriented leadership, which have importance in accounting for leadership effectiveness.

3. Behavioural leadership theories were attempts to find the one best leadership style in all
situations; thus they may be called a universal theory. But research efforts to determine the one

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best leadership style have been weak and inconsistent. In other words, there is no single best
style in all situations;

Thus, research shift to next paradigm –that of contingency leadership theory.

Analysis on Situational or Contingency Theory

1. One aspect of this research is to discover the extent to which managerial work is the same or
different across different type of organizations levels of management, and cultures.

2. A general criticism made of contingency or situational leadership is that it concerns

management rather than true leadership.

3. The various models deal more with conducting transactions with group members than with
inspiration and influence.

4. Today’s leader or manager have evolving role: Successful managers use truly democratic form
of leadership. Manager must be able to lead as well as manage. Thus, they must continue to
manage and focus on leading to be successful.

5. Researcher found that the followers of some leaders are willing to work so hard and make
personal sacrifices to achieve the group and organizational objectives, and such leader can
influence the human behaviour of their followers. But stereo-type management concern
leadership theories are not enough to develop such kind of leadership.

Thus, leadership paradigm shifted to integrate or tie theories.

Analysis on Charismatic and Transformational Leadership (Contemporary/ Integrative Theory)

Some people believed that charismatic leadership can be exercised for evil purposes. It is
important to remind ourselves of that not all charismatic leaders are necessarily good leaders.
They agree that charisma can be double-edged sword capable of producing both positive and
negative outcomes.

Basing on their notion there are both positive and negative charismatic leaders. Positive
charismatic leaders are socialized and negative charismatic leaders are personalized. The
socialized charismatic leader is one who has self-transcendence motive, based on collective
interest, provide meaning through supportive relationship with others and in consistent with
selfless and empowering orientations. The personalized charismatic leader is one who possess a
dominance to extreme selfishness that leads him to promote highly self-serving, Machiavellian
and grandiose goals. Thus, charisma is not without limitations, it has dark sides, too and can cut
both ways it is not always used to benefit others.

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It is seen that effective transformational leaders use charisma as their key component. So,
negatively used charisma may give birth to pseudo transformational leadership.

Moreover, the charismatic theories that emphasize “lone star” leadership by extraordinary
individuals may be most appropriate for describing a visionary entrepreneur who establishes a
new organization. “Lone star” is not a solution for problem of every organization.
Thus, the researchers focused to other alternatives in 21st century known as the emerging
approach.