Home / Courses / Principles of Management / Unit 9

Principles of Management Unit 9: Leadership

Leadership is the process of influencing a group toward its goals. This unit traces leadership research from traits and behaviors to contingency models and modern views, and explains where leaders get the power to influence others.

Covers: Leaders versus managers and trait theories, Behavioral theories: Iowa, Ohio State, Michigan and the Leadership Grid, Fiedler's contingency model, Hersey and Blanchard's situational leadership theory, Path-goal theory and leader-member exchange, Transformational, transactional, charismatic and servant leadership, Sources of power and trust

Study guide

A leader is someone who can influence others and who has managerial authority, although informal leaders can emerge without formal authority. Early research searched for traits that separate leaders from nonleaders. Studies found that traits such as drive, the desire to lead, honesty and integrity, self-confidence, intelligence, job-relevant knowledge and extraversion are associated with leadership, but traits alone could not explain why some leaders are effective and others are not. Researchers then turned to what leaders do, their behaviors, and later to how situations change which behaviors work best.

Behavioral studies produced several pairs of dimensions. The University of Iowa studies compared autocratic (centralized, little participation), democratic (involves employees) and laissez-faire (lets the group decide) styles. The Ohio State studies identified initiating structure (defining roles, tasks and goals) and consideration (mutual trust and respect for followers' feelings); leaders high in both often, but not always, got the best results. The University of Michigan studies contrasted employee-oriented and production-oriented leaders, favoring the employee-oriented style. Blake and Mouton's Managerial (Leadership) Grid rates concern for people and concern for production from 1 to 9; 9,9 team management is considered best, while 1,1 is impoverished, 9,1 is authority-compliance, 1,9 is country club and 5,5 is middle of the road.

Fred Fiedler's contingency model says effective leadership depends on matching a leader's fixed style to the situation. The least-preferred coworker (LPC) questionnaire classifies leaders as task-oriented (low LPC) or relationship-oriented (high LPC). Situations are rated on leader-member relations (good or poor), task structure (high or low) and position power (strong or weak). Task-oriented leaders do best in very favorable or very unfavorable situations, and relationship-oriented leaders do best in moderately favorable ones. Because Fiedler assumed style is fixed, the fix for a mismatch is to change the leader or change the situation.

Hersey and Blanchard's situational leadership theory (SLT) matches style to follower readiness, the ability and willingness to do a task. For R1 (unable and unwilling) the leader uses telling (high task, low relationship); for R2 (unable but willing) selling (high task, high relationship); for R3 (able but unwilling) participating (low task, high relationship); and for R4 (able and willing) delegating (low task, low relationship). Robert House's path-goal theory says leaders help followers by clarifying the path to goals using directive, supportive, participative or achievement-oriented behavior, chosen by the environment and follower characteristics. Leader-member exchange (LMX) theory says leaders form in-groups and out-groups, and in-group members get more trust and attention.

Modern views contrast transactional leaders, who guide followers by exchanging rewards for performance, with transformational leaders, who inspire followers to go beyond self-interest through idealized influence, inspirational motivation, intellectual stimulation and individualized consideration. Charismatic leaders are enthusiastic and self-confident and articulate a compelling vision. Servant leaders focus on followers' growth, and authentic leaders know who they are and act on their values. Leaders draw on five sources of power described by French and Raven: legitimate (from position), coercive (ability to punish), reward (ability to give benefits), expert (special skills or knowledge) and referent (personal traits that make others want to identify with them). Trust, built on integrity, competence, consistency, loyalty and openness, makes all of these more effective.

Key ideas

• Traits are associated with leadership but do not by themselves predict effectiveness.
• Behavioral studies found two key dimensions: task-focused (initiating structure, production) and people-focused (consideration, employee).
• The Leadership Grid's 9,9 team management style combines high concern for people and for production.
• Fiedler says style is fixed, so match the leader to the situation; task-oriented leaders fit very favorable or very unfavorable situations.
• Situational leadership matches telling, selling, participating or delegating to follower readiness.
• Transformational leaders inspire beyond self-interest; transactional leaders exchange rewards for performance.
• Power comes from position (legitimate, reward, coercive) or from the person (expert, referent).

Formulas and rules

Common mistakes

• Reversing Fiedler's model: task-oriented leaders do best in very favorable and very unfavorable situations, not moderate ones.
• Thinking Fiedler lets leaders flex their style; he assumed style is fixed and that the situation or leader must change.
• Matching SLT styles backward: low-readiness followers need telling, and high-readiness followers need delegating.
• Confusing expert power (knowledge) with legitimate power (formal position).
• Treating transactional and transformational leadership as opposites; transformational leadership builds on top of transactional leadership.

Before the test, make sure you can

• Explain what trait research found and why it was incomplete.
• Compare the Iowa, Ohio State and Michigan studies and locate styles on the Leadership Grid.
• Rate situational favorableness and apply Fiedler's model to choose a leader.
• Match follower readiness to the correct SLT style.
• Choose path-goal behaviors for a described follower and task.
• Distinguish transactional, transformational, charismatic and servant leadership.
• Identify French and Raven's five sources of power in examples.

Words to know

Leadership

The process of leading a group and influencing it to achieve its goals.

Trait theories

Theories that isolate characteristics that differentiate leaders from nonleaders.

Autocratic style

A leader who dictates work methods, makes unilateral decisions and limits employee participation.

Laissez-faire style

A leader who lets the group make decisions and complete the work however it sees fit.

Initiating structure

The extent to which a leader defines his or her role and the roles of group members in reaching goals.

Consideration

The extent to which a leader has work relationships built on mutual trust and respect for group members' ideas and feelings.

Managerial (Leadership) Grid

Blake and Mouton's two-dimensional grid of concern for people and concern for production.

Fiedler contingency model

A theory that effective group performance depends on matching a leader's style to the degree of control the situation gives.

Least-preferred coworker (LPC) questionnaire

Fiedler's tool that classifies a leader as task-oriented (low LPC) or relationship-oriented (high LPC).

Situational leadership theory (SLT)

Hersey and Blanchard's theory that matches leadership style to followers' readiness.

Readiness

The extent to which people have the ability and willingness to accomplish a specific task.

Path-goal theory

House's theory that a leader's job is to help followers reach goals by providing direction and support.

Leader-member exchange (LMX)

The theory that leaders create in-groups and out-groups, and in-group members get more trust and rewards.

Transactional leaders

Leaders who guide followers toward goals mainly by exchanging rewards for productivity.

Transformational leaders

Leaders who inspire followers to transcend self-interest and can have an extraordinary effect on them.

Legitimate power

Power a leader has as a result of his or her formal position in the organization.

Referent power

Power that arises because of a person's desirable resources or personal traits that others admire.

Expert power

Influence based on expertise, special skills or knowledge.

Sample practice questions

30 more questions like these, from level 1 to 5, are in the practice set.