978-0134728391 Chapter 9 Part 1

Chapter 9: Leadership and Decision Making

Chapter Overview

Think of a really effective leader with whom you have worked. What made him or her such a

good leader? Was it his or her personality? Was it the way he or she handled a crisis? All good

leaders have their own ―bag of tricks‖ to motivate, inspire, and influence their employees to

work toward company goals.

This chapter focuses on several approaches to leadership and describes transformational and

charismatic perspectives on leadership. It also looks at types of leadership substitutes and

neutralizers, as well as several contemporary issues in leadership—seeing leaders as coaches and

examining gender and cross-cultural issues in leadership. This chapter also:

 Discusses strategic leadership, ethical leadership, and virtual leadership.

 Relates leadership to decision making.

 Discusses both rational and behavioral perspectives on decision making.

Learning Objectives:

9-1. Define leadership and distinguish it from management.

9-2. Summarize early approaches to the study of leadership.

9-3. Discuss the concept of situational approaches to leadership.

9-4. Describe transformational and charismatic perspectives on leadership.

9-7. Describe strategic leadership, ethical leadership, and virtual leadership.

9-8. Relate leadership to decision making and discuss both rational and behavioral

perspectives on decision making.

LIST OF IN-CLASS ACTIVITIES: INSTRUCTOR’S CHOICE

Activity

Description

Time Limit

1. Ice-Breaker: Are You a

Leader or a Manager?

Students assess their own abilities as leaders

and managers.

20 min.

2. Small-Group Discussion:

Transformational vs.

Transactional

Students identify a business or political leader

and identify transformational or transactional

characteristics of that leader.

20 min.

3. Up for Debate: Is John

Paul DeJoria a Charismatic

Leader?

Students are asked to read the

Entrepreneurship and New Ventures feature in

the textbook and discuss the charisma of John

Paul DeJoria.

30 min.

CHAPTER OUTLINE

Learning Objective 9-1:

Define leadership and distinguish it from management.

The Nature of Leadership

Leadership includes the processes and behaviors used by someone, such as a manager, to

motivate, inspire, and influence the behaviors of others.

A. Leadership and Management

Leadership differs from management in a number of ways: A person can be a manager, a

leader, both, or neither. Management focuses primarily on the activities of planning,

organizing, leading, and controlling. Leadership, in contrast, is much more closely related to

activities such as agenda setting, aligning, inspiring, and monitoring. Organizations need

B. Leadership and Power

Power is the ability to affect the behavior of others.

1. Legitimate Power is power granted through the organizational hierarchy, by rank and

position. It is authority. By itself, it does not make someone a leader.

2. Reward Power is the power to give or withhold rewards ranging from salary increases to

3. Coercive Power is the power to force compliance by means of psychological, emotional,

4. Referent Power is power based on identification, imitation, loyalty, or charisma. This is

5. Expert Power is power derived from information or expertise. The more important the

information and the fewer the people who have access to it, the greater is the degree of

expert power possessed by any one individual. Generally, people who are both leaders

and managers tend to have large amount of expert power.

QUICK QUESTION

 What distinguishes leadership from management? In other words, can someone be a

manager and not a leader, or a leader and not a manager?

Use In-Class Activity 1: Ice-Breaker: Are You a Leader or a Manager?

Time Limit: 20 minutes

Learning Objective 9-2:

Summarize early approaches to the study of leadership.

Early Approaches to Leadership

A. Trait Approaches to Leadership

The trait approach to leadership focuses on identifying the essential leadership traits in

individuals. Although the trait approach was all but abandoned several decades ago, in recent

years, it has resurfaced. A limited list of traits includes emotional intelligence, mental

intelligence, drive, motivation, honesty and integrity, self-confidence, knowledge of the

business and charisma. It is still undetermined whether these traits relate to leadership.

B. Behavioral Approaches to Leadership

The behavioral approach to leadership focuses on the behaviors employed by effective

leaders; this research led to the identification of two basic forms of leader behavior: task–

KEY TEACHING TIPS

Students often confuse the various approaches to leadership. Remind them that the trait

approach focuses on identifying traits that indicate leadership ability, including intelligence,

dominance, self-confidence, energy, activity, and knowledge.

Remind students to keep the behavioral approach to leadership separate from the trait approach.

The behavioral approach focuses on behaviors used by effective leaders and can include task-

focused behaviors, employee-focused behaviors, or a combination depending on the situation.

QUICK QUESTIONS

 What is the difference between task-focused leader behavior and employee-focused

leader behavior?

 The trait approach was all but abandoned several decades ago. Why?

Learning Objective 9-3:

Discuss the concept of situational approaches to leadership.

The Situational Approach to Leadership

The situational approach to leadership assumes that the appropriate leader behavior varies from

one situation to another. It attempts to identify various forms of leader behavior that result in

contingent (they depend on elements of the situation and characteristics of both the leader and

followers) outcomes and consequences.

Leadership characteristics considered include:

 The manager’s value system

 Confidence in subordinates

 Personal inclinations

 Feelings of security

Then, subordinate characteristics include:

 Subordinates’ need for independence

 Readiness to assume responsibility

Situation characteristics that affect decision making include:

 The type of organization

 Group effectiveness

 The problem itself

 Time pressures

Three important situation approaches to leadership are (1) the path–goal theory, (2) the decision

tree approach, and (3) the leader–member exchange model. The path-goal theory is an

extension of the expectancy theory of motivation and suggests that the primary functions of a

leader are to make valued or desired rewards available in the workplace and to clarify for the

subordinate the kinds of behavior that will lead to goal accomplishment and valued rewards. The

QUICK QUESTION

 The situational approach suggests that leaders can vary their use of authority to fit the

situation. What are some situational characteristics that affect decision making?

Learning Objective 9-4:

Describe transformational and charismatic perspectives on leadership.

Leadership Through the Eyes of Followers

Another recent perspective that has been adopted by some leadership experts focuses on how

leaders are seen through the eyes of their followers.

A. Transformational Leadership

Transformational leadership focuses on the importance of leading for change; it is the set

of abilities that allows a leader to recognize the need for change, to create a vision to guide

that change, and to execute the change effectively. Transactional leadership is essentially

the same as management in that it involves routine, regimented activities. Only highly skilled

leaders tend to be able to succeed in both transactional and transformational realms.

B. Charismatic Leadership

Charismatic leadership is a type of influence based on a leader’s personal charisma;

charismatic leaders are likely to have a lot of self-confidence, confidence in their beliefs and

ideals, and a strong need to influence people. Charismatic leaders:

1. Envision likely future trends and set high expectations for themselves and others

2. Energize others by demonstrating personal excitement and confidence

3. Enable others by supporting them

KEY TEACHING TIPS

 Remind students that a few leaders are able to adopt either transformational or trans-

actional perspectives, depending on their circumstances; others are able to do one or the

other, but not both.

 Point out to students that someone with charisma is more likely to influence others than

someone without charisma.

 It is worth noting that taking over a leadership role from someone who is highly

charismatic is a challenge and early positive results are important for them to gain

credibility.

QUICK QUESTION

What attributes make a leader charismatic?

Use In-Class Activity 2: Small-Group Discussion: Transformational vs. Transactional

Time Limit: 20 minutes

Use In-Class Activity 3: Up for Debate: Is John Paul DeJoria a Charismatic Leader?

Time Limit: 30 minutes

HOMEWORK

Leadership Style

Now is a good time to assign Application Exercise 10 from the end-of-chapter materials as

homework. This assignment gives students a chance to further research the manner in which

Marissa Mayer, as president and CEO of Yahoo!, Inc. has made decisions, and to understand and

evaluate her style and effectiveness of leadership.

At-Home Completion Time: 45 minutes

Learning Objective 9-5:

Identify and discuss leadership substitutes and neutralizers.

Leadership Substitutes and Neutralizers

A. Leadership Substitutes

Leadership substitutes are individual, task, and organizational characteristics that tend to

outweigh the need for a leader to initiate or direct employee performance. In other words,

when certain individual abilities, experiences, training, knowledge, motivation, and/or

professionalism are present people can perform well without a designated leader. An ER

specialist knows what to do whether a leader is present or not.

B. Leadership Neutralizers

Leadership neutralizers are factors that may render certain leadership behaviors ineffective.

Examples of leadership neutralizers include long-standing norms, group cohesion, elements

of the job, and organizational factors. An example would be an inexperienced leader assigned

to a very experienced group with long-standing performance norms and high group

KEY TEACHING TIP

Students often confuse leadership substitutes and leadership neutralizers. Leadership neutralizers

are factors that can render various leadership behaviors ineffective. Leadership substitutes are

characteristics that tend to outweigh the need for a leader to initiate or direct employee

performance, meaning that sometimes, employees will perform their jobs capably without the

direction of a leader.

QUICK QUESTIONS

 What are some examples of possible leadership neutralizers?

Learning Objective 9-6:

Discuss leaders as coaches and examine gender and cross-cultural issues in leadership.

The Changing Nature of Leadership

A. Leaders as Coaches

Many organizations are becoming less hierarchical, changing the role of the leader from

―overseer‖ to ―coach.‖ Mentors help less-experienced employees learn the ropes and better

prepares them to advance within the organization. Executives can coach their senior

managers, helping them to develop their decision-making skills and to equip them with the

B. Gender and Leadership

Contrary to stereotypes, female leaders are not necessarily more nurturing or supportive

than male leaders; and male leaders are not systematically harsher, controlling, or

task-focused than female leaders. Females do tend to be more democratic in making

decisions; males tend to be more autocratic.

C. Cross-Cultural Leadership

Culture encompasses both international differences and diversity-based differences within

one culture. Cross-cultural factors play a growing role in organizations as their workforces

become more diverse. Collectivism places the group before the individual while

individualism places the individual before the group.

KEY TEACHING TIP

Students often remember that culture refers to international differences among people, but they

often forget that culture also includes diversity-based differences within one culture.

QUICK QUESTIONS

 Is the United States a collectivist culture or an individualist culture?

 ―A new role for a leader is to become a coach, rather than an overseer.‖ Explain this

statement. What has brought about this change in leadership focus?

 Do men and women tend to lead differently? If so, how?

HOMEWORK

Evaluate a Leader

Learning Objective 9-7:

Describe strategic leadership, ethical leadership, and virtual leadership.

Emerging Issues in Leadership

A. Strategic Leadership

Strategic leadership is a leader’s ability to understand the complexities of both the

organization and its environment and to lead change in the organization so as to enhance its

competitiveness.

B. Ethical Leadership

Ethical leadership is a leader’s ability to maintain high ethical standards for his or her own

conduct, to unfailingly exhibit ethical behavior, and to hold others in the organization to the

same standards.

C. Virtual Leadership

Virtual leadership refers to leadership that is exhibited when leaders and their employees

work in locations that are far from one another.

QUICK QUESTIONS

 Virtual leadership involves managing employees who work in different locations than

the manager. What are some advantages and disadvantages of virtual leadership from

the manager’s perspective? How can a manager show leadership in this kind of

environment?