122. Transactional leaders:
a.
reward followers for good behavior and punish followers for poor behavior
b.
help followers see how their jobs fit with the organization’s vision
c.
pay special attention to individual needs by creating learning opportunities
d.
motivate followers by providing them with meaningful and challenging work
e.
are accurately described by all of these
123. Michael Eskew, former CEO of UPS, played a major role in transforming the company from a
package delivery service to a logistics expert so it could serve as a traffic manager for corporate
America. As a transformational manager, Eskew was:
a.
insisting his employees do the right thing
b.
creating opportunities for rewards
c.
using intellectual stimulation to encourage his employees to take innovative approaches to
problem solving
d.
encouraging his employees to depend on information technology as the basis for
decision-making
e.
creating heuristics to guide the transformation procedure
124. ____ is based on an exchange process, in which followers are rewarded for good performance and
punished for poor performance.
a.
Visionary leadership
b.
Charismatic leadership
c.
Leadership empowerment
d.
Transformational leadership
e.
Transactional leadership
125. The component of transformational leadership known as ____ means that transformational leaders pay
special attention to followers’ individual needs by creating learning opportunities, accepting and
tolerating individual differences, encouraging two-way communication, and being a good listener.
a.
idealized influence
b.
inspirational motivation
c.
intellectual stimulation
d.
individualized consideration
e.
influential stimulation
126. Which leadership style would be most likely to rely on positive and negative reinforcement?
a.
transformational leadership
b.
charismatic leadership
c.
participative leadership
d.
delegating leadership
e.
transactional leadership
127. Research results consistently show:
a.
transformational leadership is much more effective on average than transactional
leadership
b.
transactional leadership is much more effective on average than transformational
leadership
c.
transformational and transactional leadership are both equally effective
d.
transformational leadership tends to emerge from transactional leadership
e.
transformational leadership based on a vision is more effective than when it is based on an
exchange process
Oakland Athletics
Over the past decade, professional baseball has devolved into an increasingly dysfunctional, sharply
divided game of big-time haves and small-time have-nots. A few big market teams like the New York
Yankees and the Los Angeles Dodgers leverage fat television contracts to acquire top talent at top
salaries. Clubs in smaller cities with meager budgets make do with what’s left. This trend has not
proven true for the Oakland Athletics who have amassed the second-best win-loss record in the
American League and more impressively made money or broken even in five of the last six years. The
reason for this team’s success in the midst of so many others that fail is credited to its general manager
Billy Beane. Billy Beane is a man who knows how to do more with less. He relentlessly exploits
market mismatches by mining data his rivals ignore and by scooping up assets that others have
undervalued. He realizes that every player must be evaluated according to his long-term economic
impact on the team. People who work with Beane describe him as “monomaniacal, ardent, and
controlling.”
128. Refer to Oakland Athletics. By describing Beane as ardent and controlling, his co-workers are using
____ to define its leader.
a.
trait theory
b.
path-goal theory
c.
motivation decision theory
d.
contingency theory
e.
situational leadership theory
129. Refer to Oakland Athletics. Billy Beane is an example of a leader because he:
a.
wants to maintain the status quo
b.
is a problem solver—not a motivator
c.
has a strong desire to lead
d.
is a general manager
e.
avoids change
130. Refer to Oakland Athletics. Other teams have an average payroll of $85 million. Beane’s payroll for
the Athletics is only $33 million. His ability to be frugal and yet build a successful team is in large part
due to his ability to set goals, give directions, and assign tasks. In other words, Beane excels in:
a.
consideration
b.
creating instrumentality
c.
using decision rules
d.
initiating structure
e.
participative management
131. Refer to Oakland Athletics. One of the reasons for Beane’s success is his ability to let employees know
precisely what is expected of them, give specific guidelines for playing baseball (All pitchers are
instructed to throw strikes on the first pitch and to throw as few pitches as possible during each
inning.), and make sure players follow these standards of performance. Beane is a(n) ____ leader.
a.
directive
b.
participative
c.
supportive
d.
autonomous
e.
proactive
132. Refer to Oakland Athletics. Beane operates within windows of opportunity; that’s all he can afford.
Because compensation trails performance, he must find players on the rise, guys who haven’t caught
fire yet but who could. His ability to see potential players creates a positive image for the baseball
club’s future. Beane’s ability to provide direction for the future means that he could be classified as
a(n):
a.
entrepreneur
b.
visionary leader
c.
transactional leader
d.
leader ombudsmen
e.
team leader
133. Refer to Oakland Athletics. Beane’s subordinates respect the general manager’s abilities, trust him to
do what his best for the team, and like him as a person. In terms of situational favorableness, Beane’s
leadership ability is influenced by:
a.
strong position power
b.
empowerment
c.
low task structure
d.
weak position power
e.
good leader-member relations
Tyco
When the new CEO of Tyco, Ed Breen, started his first day, the company was $28 billion in debt,
$11.3 billion of which is due next year, with $2.5 billion due in just four months. Over the preceding
eight years, the previous CEO, Dennis Kozlowski, spent $63 billion acquiring 1,000 companies and
turning Tyco into a massive conglomerate that makes thousand of products in five general areas:
health care, electronics, fire and security systems, plastics, and engineered products. Unfortunately, he
overpaid by 52 percent on average. So, with huge debt payments looming and little cash flow, many
thought Tyco would file for bankruptcy.
Another problem was the expensive office suite, with one of the best views in New York City
overlooking Central Park. Kozlowski spent lavishly to adorn the office with thick Persian carpets and
expensive marble floors, an executive kitchen where the corporate chef could prepare gourmet meals, a
massive boardroom with a mural completely covering one of the walls reminiscent of a medieval
castle, and an expansive office for the CEO with its own separate kitchen “the size of a New York
one–bedroom apartment.”
And then there were the problems of greed and fraud. According to the criminal charges brought
against him, Kozlowski used over $400 million of Tyco funds for personal expenditures. Steven
Cutler, chief of enforcement for the Securities and Exchange Commission, said that the total amount
was “staggering,”as was the fact that Kozlowski was able to hide his spending for seven years by using
two corporate accounts.
Breen did many things to correct these problems. He sold Tycom, a division of Tyco that was
losing $1 billion annually. Then he changed the way Tyco paid its vendors and gave more
responsibility to Tyco’s internal sales reps to generate business and work directly with customers.
Breen also refused to sell to customers who didn’t pay their bills. And he hired a reputable attorney to
verify that Tyco’s business was sound. All of those actions stabilized Tyco’s business and shored up
its reputation with investors and customers.
In addition to operational problems, Breen had to address cultural problems within the Tyco
organization. Breen decided to replace the entire board of directors and proposed this controversial
move to the board of directors himself. He ultimately convinced 5 of the 10 board members to vote to
fire themselves. In the end, all but two board members immediately resigned from the board. Breen
then turned his attention to his managers, firing 290 of Tyco’s 300 senior managers. Breen explains
why, “There was a lot of behavior in that corporate office that wasn’t acceptable, and it probably was
deeper than a few people who were on trial. I didn’t know who knew what [in terms of the fraud that
had taken place], who should have known what, and who should have raised their hand, and I was
never going to be able to figure that out fast. So I wasn’t going to take any chances.”
134. Refer to Tyco. According to the contingency theory, when Ed Breen fired 290 of Tyco’s 300 senior
managers, Breen was showing high:
a.
consideration
b.
autonomy
c.
Machiavellianism
d.
instrumentality
e.
position power
135. Refer to Tyco. Ed Breen refused to pay his top managers bonuses they thought they were entitled to.
Instead of doing the work to justify their bonuses, they threatened to sue. Breen refused to pay unless
they could clearly explain the financial numbers on which they were based. According to the
contingency theory, this act showed that before Breen took the helm of Tyco, the company had:
a.
high autonomy
b.
low goal specificity
c.
low task structure
d.
high goal commitment
e.
high Machiavellianism
136. Refer to Tyco. With bankruptcy rumors floating around and daily newspaper stories about former
CEO Dennis Kozlowski’s trial, no one but new Tyco CEO Ed Breen believed that the company could
be saved. In this way, he can describe as a:
a.
leadership substitute
b.
trait leader
c.
leadership neutralizer
d.
visionary leader
e.
transactional leader
137. Refer to Tyco. Previous Tyco CEO Dennis Kozlowski is probably an example of a(n):
a.
leadership neutralizer
b.
unethical charismatic leader
c.
transactional leader
d.
leader substitution
e.
ethical charismatic leader
138. Refer to Tyco. As a ____, new Tyco CEO Ed Breen was able to make Tyco’s stakeholders feel they
were a vital part of the organization and helped them see how their jobs fit with the organization’s
vision.
a.
transformational leader
b.
empathetic leader
c.
transactional leader
d.
trait leader
e.
directive leader
Great Britain
In 2007, Lord Andrew Turnbull, who for many years served as Great Britain’s top civil servant, gave a
lengthy interview to the Financial Times. The primary topic of Turnbull’s interview was Gordon
Brown, the British prime minister. After working for Brown for four years, when Brown was a
member of the nation’s cabinet, Turnbull described him as exhibiting a “Stalinist ruthlessness.” In fact,
according to Turnbull, Brown has “a very cynical view of mankind and his colleagues.” As Chancellor,
Brown told department heads how to fill out their budget requests shortly before they were due. He
also dictated annual goal setting for departments without listening to any input from the department
heads. Turnbull stated that Brown uses “the denial of information” as a source of his power.
139. Refer to Great Britain. According to the Blake/Mouton Leadership Grid, Brown uses which style of
management?
a.
middle-of-the-road style
b.
authority-compliance style
c.
country club management style
d.
impoverished management style
e.
team management style
140. Refer to Great Britain. According to the study conducted by Ohio State University, Brown exhibits
_____, a form of leadership behavior.
a.
achievement-orientation
b.
consideration
c.
charisma
d.
initiating structure
e.
empathy
141. Refer to Great Britain. Three situational factors determine which leadership styles should be matched
to a situation. The fact that Brown specified the details of the budgets developed by his department
fits which of these situational factors?
a.
position power
b.
locus of control
c.
task structure
d.
initiating structure
e.
leader-member relations
142. Refer to Great Britain. According to Fiedler,_________.
a.
Brown is a good leader for the situation
b.
Brown is incapable of changing his leadership style
c.
Brown’s leadership style can be easily modified to match the situation
d.
Turnbull is describing leadership neutralizers
e.
directive leadership is effective in this situation
143. Refer to Great Britain. According to the path-goal theory of leadership, Brown exhibits _____
leadership.
a.
directive
b.
supportive
c.
participative
d.
achievement-oriented
e.
people-oriented
144. Refer to Great Britain. According to Hersey and Blanchard’s situational theory, Brown uses which
style of management?
a.
telling
b.
empowering
c.
participating
d.
delegating
e.
selling
145. Refer to Great Britain. In terms of the normative decision model, Brown exhibits a(n) _____ decision
making style.
a.
consultative
b.
group
c.
autocratic
d.
participative
e.
supportive
Hewlett-Packard
After Hewlett-Packard fired CEO Carly Fiorina, new CEO Mark Hurd found himself in charge of a
struggling, dysfunctional corporation. The strategic vision Fiorina had been using to guide the
company—“digital, virtual, mobile, personal”— was vague, and no one knew if it was being executed
or not. A confusing matrix structure blurred accountability lines and slowed decision making, and the
company reward system was so complex that no one knew how performance affected their bonuses.
Talented executives were leaving, and H-P was having trouble attracting new ones.
If those troubles weren’t enough, H-P was struggling financially. After acquiring Compaq
Computers for $19 billion, it cost H-P another $10 billion to integrate the H-P and Compaq systems.
The combined company was riddled with pervasive distrust. And when a board member leaked
confidential information to the press, the subsequent scandal (involving spying and phone tapping)
ended with Hurd having to testify before Congress regarding what he knew of the situation.
One of H-P’s major problems was that it was under managed. Fiorina had been known as a
broad visionary, who was highly visible in the press. Many inside H-P, however, felt she didn’t
provide enough direction. The board ultimately hired Hurd because of his focus on execution
(management). Hurd began working with the lower divisional levels to make sure operations were
running smoothly. Hurd said, “We need to temper the idea that this company needs to have some
earthshaking event every 15 minutes…our job is to execute.” After a review, Hurd asked divisional
manager Nora Denzel how he could help improve her division. Denzel said, “I asked for three things.
By the time I got back to my office, they were all done.”
One of Hurd’s first decisions was what to do with Fiorina’s strategic vision. Hurd chose to
keep the strategy but recast it into something more concrete, offering specific visionary purposes.
Executing this strategy involves tackling operational issues, like the matrix structure, which had H–P’s
single sales division reporting to four or five division heads at once. Hurd divided up the sales
division, so that each of the major H-P product divisions had its own dedicated sales division. Similar
simplifications were implemented in the bonus system, which was so complex that no one understood
how their performance affected their bonuses. The new plan links bonuses directly to divisional and
company performance.
In the past, H-P management had been friendly, approachable, and supportive of its
employees. Under Fiorina’s more autocratic style, many employees felt that they were no longer
working with her but for her. When Hurd arrived, his work style proved to match more closely to the
traditional “H–P Way”. Some decisions, however, had to be made to ensure productivity, and these
ultimately led to the lay off of 14,500 employees to help keep H-P under budget.
Within two years of Hurd taking the CEO position, sales at H-P increased by $10 billion and
the stock price rose 80 percent. Though it’s still early to tell, Hurd’s leadership looks promising. H–P
“is a company that is transforming,” Hurd said. “We are not [yet] transformed.”
146. Refer to Hewlett-Packard. The fact that no one at HP knew how their pay was linked to their
performance and that the board of directors was dysfunctional would both have functioned as:
a.
mentoring devices
b.
organizational controls
c.
leadership neutralizers
d.
organizational gatekeepers
e.
autonomous links
147. Refer to Hewlett-Packard. _________ suggests that Fiorina was unable to recognize when she needed
to match her actions to the situation and modify her style of leadership accordingly.
a.
path-goal theory
b.
normative decision theory
c.
the Vroom theory
d.
the status quo theory of leadership
e.
Fiedler’s contingency theory
148. Refer to Hewlett-Packard. According to the _____, Fiorina should have made it clear to her employees
how their pay was linked to their performances.
a.
dialectical theory of leadership
b.
leadership ladder
c.
theory of employer-employee relationships
d.
path-goal theory
e.
trait theory of leadership
149. Refer to Hewlett-Packard. According to Hersey and Blanchard’s situational theory, which leadership
style is Hurd apparently using?
a.
telling
b.
empowering
c.
participating
d.
delegating
e.
selling
150. Refer to Hewlett-Packard. According to Hersey and Blanchard’s situational theory, which leadership
style did Fiorina apparently use?
a.
telling
b.
empowering
c.
participating
d.
delegating
e.
selling
SHORT ANSWER
1. Define leadership and management. Explain how leaders and managers approach their jobs differently.
2. What is the difference between leadership substitutes and leadership neutralizers?
3. List and briefly identify four of the eight traits that differentiate leaders from nonleaders.
ANS:
4. What is the difference between honesty and integrity? How is each relevant to effective leadership?
5. What are the two key leader behaviors that are central to successful leadership? How does each
typically influence subordinates?
6. List the four major situational theories of leadership. How do they differ in terms of what each
assumes about the adaptability of leadership style (i.e., a leader’s ability to change his or her leadership
style in different situations)?
ANS:
7. What are the assumptions of Fiedler’s contingency theory? What needs to be done in order to make this
theory practical for use in the workplace?
8. According to the path-goal theory, what are the two leadership styles that parallel the two key
leadership behaviors of initiating structure and consideration? Describe each style.
9. Briefly describe the value of the normative decision theory to the practicing manager.
ANS:
10. Identify and define the components of visionary leadership.
11. Briefly explain the difference between transformational and transactional leadership.
ESSAY
1. What is the difference between a leader and a manager? What is the relative importance of leaders and
managers to the success of organizations today? Under what sets of organizational situations and
circumstances might leaders become more or less important?
ANS:
2. What does management research say about who leaders are and what leaders do? Comment on the best
leadership style for all situations and employees. Provide an example of a leader that you know of or
have worked with, and explain how this individual demonstrates some of the typical characteristics
and behaviors identified by management research as typical of leaders.
ANS:
3. Identify and describe Fiedler’s contingency theory. Explain how this approach might be particularly
valuable to an experienced manager in selecting among several job offers for managerial positions in
different organizational situations.
ANS:
4. Compare and contrast charismatic and transformational leadership. Explain why ethical transgressions
are less likely among transformational leaders than they are among charismatic leaders.
