Solution Manual
Book Title
Fundamentals of Management 10th Edition

978-0134237473 Chapter 12 Lecture Note Part 2

July 24, 2019
A. What Do the Four Contemporary Views
of Leadership Tell Us?
1. Leader-member exchange (LMX) theory says that leaders create in-groups and
out-groups and those in the in-group will have higher performance ratings, less
turnover, and greater job satisfaction.
2. Leaders who primarily use social exchanges (or transactions) are called
transactional leaders. They guide or motivate followers to work toward
established goals by exchanging rewards for their productivity.
3. Transformational leaders inspire followers to transcend their own self-interests
for the good of the organization and are capable of having a profound and
extraordinary effect on his or her followers.
a) Transformational leaders pay attention to the concerns and developmental
needs of individual followers; they change followers’ awareness of issues by
helping those followers to look at old problems in new ways; and they are able
to excite, arouse, and inspire followers to put out extra effort to achieve group
4. Transactional and transformational leadership are not opposing approaches.
5. Transformational leadership is built on transactional leadership.
a) Transformational leadership produces higher levels of employee effort and
b) It is more than charisma.
c) The transformational leader will attempt to instill in followers the ability to
question not only established views but eventually those established by the
6. The evidence supporting the superiority of transformational leadership over the
transactional variety is overwhelmingly impressive.
7. In summary, the overall evidence indicates that transformational leadership is more
strongly correlated with lower turnover rates, higher productivity, and higher
employee satisfaction.
B. How do Charismatic and Visionary
Leaders Differ?
1. Charismatic leadership theory is an extension of attribution theory.
a) It says that followers make attributions of heroic or extraordinary leadership
abilities when they observe certain behaviors.
2. Several authors have attempted to identify personal characteristics of the
charismatic leader.
3. The most comprehensive analysis identified five characteristics: leaders have a
vision, the ability to communicate that vision, the willingness to take risks to
achieve that vision, sensitivity to both environmental constraints and follower
needs, and behaviors that are out of the ordinary.
4. Most experts believe individuals can be trained to exhibit charismatic behaviors.
5. There is an increasing body of research that shows impressive correlations between
charismatic leadership and high performance and satisfaction among followers.
a) Charismatic leadership may be most appropriate when the follower’s task has
an ideological component.
6. Visionary leadership goes beyond charisma.
7. Visionary leadership is the ability to create and articulate a realistic, credible,
attractive vision of the future for an organization or organizational unit that grows
out of and improves upon the present.
8. The key properties of a vision seem to be inspirational possibilities that are value
centered, realizable, with superior imagery and articulation.
a) Visions should be able to create possibilities that are inspirational, unique, and
offer a new order that can produce organizational distinction.
b) Desirable visions fit the times and circumstances and reflect the uniqueness of
the organization.
c) People in the organization must also believe that the vision is attainable.
9. Examples of visions.
a) Mary Kay Ash’s vision of women as entrepreneurs selling products that
improved their self image gave impetus to her cosmetics company.
b) Michael Dell has created a vision of a business that allows Dell Computer to
sell and deliver a finished PC directly to a customer in fewer than eight days.
What About Leaders and Teams?
1. Leadership is increasingly taking place within a team context.
2. As teams grow in popularity, the role of the team leader takes on heightened
3. Many leaders are not equipped to handle the change to teams.
4. One prominent consultant estimates: 15 percent of managers are natural team
leaders; another 15 percent could never lead a team because it runs counter to their
5. The challenge for most managers is in becoming an effective team leader.
a) Effective leaders have mastered the difficult balancing act of knowing when to
leave their teams alone and when to intercede.
b) New team leaders may try to retain too much control or they may abandon
their teams.
6. A study of organizations that had reorganized themselves around teams found
certain common responsibilities that all leaders had to assume.
a) These included coaching, facilitating, handling disciplinary problems,
reviewing team/individual performance, training, and communication.
7. A more meaningful way to describe the team leader’s job is to focus on two
priorities: managing the team’s external boundary and facilitating the team process.
(See Exhibit 12-5.)
A Question of Ethics
Have you ever watched the show Undercover Boss? It features a company’s “boss” working
undercover in his or her own company to find out how the organization really works. Typically,
the executive works undercover for a week, and then the employees the leader has worked with
are summoned to company headquarters and either rewarded or punished for their actions.
Bosses from organizations ranging from Waste Management to White Castle to NASCAR and
Stella and Dot have participated.
Discuss This:
What do you think? Is it ethical for a leader to go undercover in his or her organization?
What ethical issues could arise? How could managers deal with those issues?
Teaching Tip:
There are obviously no right or wrong answers to the questions above. Many students will be
uncomfortable with the trust issues that could develop in situations like this and the detrimental
impact they could have on the organization’s culture as well as employees. Other students may
point out that a culture in which employees feel free to act out is not good either.
D. What Issues do Today's Leaders Face?
1. Technology continues to change rapidly—almost daily.
2. Business costs continue to rise.
3. Empowerment involves increasing the decision-making discretion of workers.
a) One reason more companies are empowering employees is the need for quick
decisions by those people who are most knowledgeable about the issues—often
those at lower organizational levels.
4. Does National Culture Affect Leadership?
a) National culture is an important situational factor determining which leadership
style will be most effective.
b) We propose that you consider it as another contingency variable.
c) National culture affects leadership style by way of the follower.
d) Leaders’ choice of styles isconstrained by the cultural conditions that their
followers have come to expect. (See Exhibit 12-6.)
e) Most leadership theories were developed in the United States using U.S.
1) They emphasize follower responsibilities rather than rights; assume
self-gratification rather than commitment to duty or altruistic motivation;
assume centrality of work and democratic value orientation; and stress
rationality rather than spirituality, religion, or superstition.
f) As a guide for adjusting your leadership style, you might consider the value
dimensions of national culture presented in Chapter 2.
g) The GLOBE study found that there are some universal aspects to leadership.
1) A number of elements of transformational leadership appear to be associated
with effective leadership regardless of what country the leader is in.
2) These elements include vision, foresight, providing encouragement,
trustworthiness, dynamism, positiveness, and proactiveness.
h) Participation is likely to be most effective in low power distance cultures
(Norway, Finland, Denmark, and Sweden).
Technology and the Manager’s Job – Virtual Leadership
Most research on leadership has been done with face-to-face interaction, not virtual. Non-verbal
communication cannot be viewed, but managers still have choices regarding their words and
structure in digital communication. Managers need to 'read between the lines' when
communicating in a virtual environment. Writing skills will likely become an extension of
interpersonal skills.
Discuss This:
What challenges does a “virtual” leader face?
How can virtual leaders use technology to help them be more effective leaders?
Teaching Tips:
Almost every company is going virtual, even colleges and universities! While students may not
have had a lot of experience working for companies virtually, the majority of students today have
taken at least one class via the Internet. If it helps class discussion, have students answer the
questions above in relation to online education. Do they feel that the quality of the interaction is
higher in traditional face-to-face courses or in online courses? The answer may surprise you.
How Does Emotional Intelligence Affect Leadership?
1. Recent studies indicating that EI—more than I.Q., expertise, or any other single
factor—is the best predictor of who will emerge as a leader.
a) I.Q. and technical skills are “threshold capabilities.”
b) It’s the possession of the five components of emotional intelligence—
self-awareness, self-management, self-motivation, empathy, and social skills—
that allows an individual to become a star performer.
2. Evidence indicates that the higher the rank of a person considered to be a star
performer, the more that EI capabilities surface as the reason for his or her
a) When star performers were compared with average ones in senior management
positions, nearly 90 percent of the difference in their effectiveness was
attributable to EI factors rather than basic intelligence.
b) Example, the maturing of Rudolph Giuliani’s leadership effectiveness.
c) EI appears to be especially relevant in jobs that demand a high degree of social
d) EI should probably be added to the list of traits associated with leadership.
What is Trust?
1. Surveys show that honesty is consistently singled out as the number one
characteristic of admired leaders.
2. In addition to being honest, credible leaders are competent and inspiring. They are
personally able to effectively communicate their confidence and enthusiasm.
a) Thus followers judge a leader’s credibility in terms of his or her honesty,
competence, and ability to inspire.
3. Trust is defined as the belief in the integrity, character, and ability of the leader.
4. What are the key dimensions that underlie the concept of trust?
5. Recent evidence has identified five dimensions that make up the concept of trust:
integrity, competence, consistency, loyalty, and openness.
a) Integrity refers to honesty, conscientiousness, and truthfulness.
1) This one seems to be most critical when someone assesses another’s
b) Competence encompasses an individual’s technical and interpersonal
knowledge and skills.
c) Consistency relates to an individual’s reliability, predictability, and good
judgment in handling situations.
d) Loyalty is the willingness to protect and save face for another person.
e) The final dimension of trust is openness—can you rely on the person to give
you the full truth?
B. Why is it Important that Followers
Trust Their Leaders?
1. Trust appears to be a primary attribute associated with leadership.
2. Research has shown that trust in leadership is significantly related to positive job
outcomes including job performance, organizational citizenship behavior, job
satisfaction, and organizational commitment.
3. Part of the leader’s task has been, and continues to be, working with people to find
and solve problems, but whether leaders gain access to the knowledge and creative
thinking they need to solve problems depends on how much people trust them.
4. When followers trust a leader, they are willing to be vulnerable to the leader’s
actions. See Exhibit 12-7 for suggestions for Building Trust.
5. Now, more than ever, managerial and leadership effectiveness depends on the
ability to gain the trust of followers.
C. A Final Thought Regarding Leadership.
1. The belief that a particular leadership style will always be effective regardless of
the situation may not be true.
2. Data from numerous studies demonstrate that, in many situations, any behaviors a
leader exhibits are irrelevant.
3. Certain individual, job, and organizational variables can act as substitutes for
leadership, or neutralize the leader’s ability to influence his or her followers.
4. Characteristics of employees such as experience, training, professional orientation,
or indifference toward organizational regards can neutralize the effect of
5. Jobs that are inherently unambiguous and routine or that are intrinsically satisfying
may place fewer demands on the leadership variable.
6. Organizational characteristics such as explicit formalized goals, rigid rules and
procedures, and cohesive work groups can substitute for leadership.

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