PART FOUR – LEADERSHIP AND INFLUENCE PROCESSES IN
ORGANIZATIONS
Chapter Twelve – Contemporary Views of Leadership in Organizations
Chapter Overview
The three major situational theories of leadership discussed in Chapter 11 altered everyone’s thinking
about leadership. No longer did people feel compelled to search for the one best way to lead. Nor did they
continue to seek universal leadership prescriptions or relationships. Instead, both researchers and
practicing managers turned their attention to a variety of new approaches to leadership. These new
approaches, as well as other current emerging leadership issues, are the subject of this chapter. We first
describe two relatively new situational theories, as well as recent refinements to the earlier theories. We
then examine leadership through the eyes of followers. Recent thinking regarding potential alternatives to
traditional leadership are then explored. Next we describe the changing nature of leadership. We
conclude this chapter with a discussion of several emerging issues in leadership.
Learning Outcomes
After studying this chapter, students should be able to:
1. Identify and describe contemporary situational theories of leadership.
2. Discuss leadership through the eyes of followers.
3. Identify and describe alternatives to leadership.
4. Describe the changing nature of leadership and emerging leadership issues.
Real World Challenge: Ethical Leadership at Costco
Summary: Warehouse retailer Costco has more than $50 billion in sales and more than 120,000 workers.
Costco competes by giving customers the best value at the best price. At the core of Sinegal’s leadership
philosophy is the idea that great businesses can be sustained with core values.
Real World Challenge: How can Costco continue to maintain the company’s code of ethics in a
business environment that promotes paying lower wages and increased turnover?
Real World Response: Keeping good employees is strategic for Costco’s long-term success, so the CEO
of Costco does not distance himself from employees. The culture of the company flows downward from
the CEO. He believes the leaders should model what is expected from employees. The CEO gets a
compensation package far below most CEOs, and as Costco grows internationally, he intends to continue
following his code of ethics.
Chapter Outline
I. CONTEMPORARY SITUATIONAL THEORIES
The LPC theory, the path-goal theory, and Vroom’s decision tree approach together redirected the
study of leadership. Not surprisingly, then, other situational theories have also been developed.
Moreover, there continue to be changes and refinements to the original situational models.
A. The Leader-Member Exchange Model
The leader-member exchange model (LMX) of leadership, conceived by George Graen and
Fred Dansereau, stresses the importance of variable relationships between supervisors and each
of their subordinates.
Each superior-subordinate pair is referred to as a “vertical dyad.”
Figure 12.1 shows the basic concepts of the leader-member exchange theory.
The model suggests that supervisors establish a special relationship with a small number of
trusted subordinates referred to as the “in-group.”
The in-group often receives special duties requiring more responsibility and autonomy; they
may also receive special privileges, such as more discretion about work schedules.
Subordinates who are not a part of this group are called the out-group, and they receive less of
the supervisor’s time and attention.
Note in the figure that the leader has a dyadic, or one-to-one, relationship with each of the five
subordinates.
Research has confirmed the existence of in-groups and out-groups. In addition, studies
generally have found that in-group members tend to have a higher level of performance and
satisfaction than out-group members.
B. The Hersey and Blanchard Model
Another recent situational perspective is the Hersey and Blanchard model, developed as a
consulting tool.
The Hersey and Blanchard model is based on the notion that appropriate leader behavior
depends on the “readiness” of the leader’s followers. In this instance, readiness refers to the
subordinate’s degree of motivation, competence, experience, and interest in accepting
responsibility.
Figure 12.2 shows the basic model. The figure suggests that as the readiness of followers
improves, the leader’s basic style should also change.
C. Refinements and Revisions of Other Theories
While the version of the LPC theory presented in Chapter 11 is still the dominant model,
researchers have made several attempts to improve its validity.
Fiedler added the concept of stress as a major element of situational favorableness. He also
argued that the leader’s intelligence and experience play a major role in enabling her or him to
cope with various levels of stress that characterize any particular situation.
The path-goal theory evolved to include the four forms of leader behavior discussed in Chapter
11.
Finally, Vroom’s decision tree approach also continues to evolve.
II. LEADERSHIP THROUGH THE EYES OF FOLLOWERS
The three primary approaches to leadership through the eyes of followers are transformational
leadership, charismatic leadership, and attributions of leadership.
A. Transformational Leadership
Transformational leadership focuses on the basic distinction between leading for change and
leading for stability.
Recall from Chapter 11 the distinction between management and leadership. Transactional
leadership is essentially the same as management in that it involves routine, regimented
activities.
Closer to the general notion of leadership, however, is transformational leadership, the set of
abilities that allows the leader to recognize the need for change, to create a vision to guide that
change, and to execute the change effectively.
Another hallmark of effective leadership is the ability to see which approach is needed.
Leaders may also find it necessary to transition from either transformational or transactional
leadership to the other.
B. Charismatic Leadership
Charisma is a form of interpersonal attraction that inspires support and acceptance.
Charismatic leadership is accordingly a type of influence based on the leader’s personal
charisma.
Robert House first proposed a theory of charismatic leadership based on research findings from
a variety of social science disciplines.
His theory suggests that charismatic leaders are likely to have a lot of self-confidence, firm
confidence in their beliefs and ideals, and a strong need to influence people.
They also tend to communicate high expectations about follower performance and to express
confidence in their followers.
Figure 12.3 portrays the three elements of charismatic leadership in organizations that most
experts acknowledge today.
First, charismatic leaders are able to envision likely future trends and patterns, to set high
expectations for themselves and for others, and to model behaviors consistent with meeting
those expectations.
Next, charismatic leaders are able to energize others by demonstrating personal excitement,
personal confidence, and consistent patterns of success.
Finally, charismatic leaders enable others by supporting them, empathizing with them, and
expressing confidence in them.
Charismatic leadership ideas are quite popular but unfortunately, few studies have specifically
attempted to test the meaning and impact of charismatic leadership. Lingering ethical concerns
about charismatic leadership also trouble some people.
CASE STUDY: Leading a Police Force Transformation
Summary: When Melvin Wearing obtained the Chief of Police position, morale was terrible, and
communication between the chief’s office and the officers was often through union grievances. Wearing
wanted to show his pride in police work. He upgraded the department’s technology, raised standards in
the training academy, and increased the department’s diversity. The department has earned four national
and international awards for community policing.
1. Explain how Chief Wearing can exhibit a transformational leadership style in his role as police
chief.
As a transformational leader, Wearing is inspirational (he raised standards in the training academy);
2. Describe the environment facing Chief Wearing in terms of leader-member relations, task
structure, and position power. Using Fiedler’s model, what leadership style do you think is
most appropriate given the situation you just described? Does this style match Chief
Wearing’s?
Leader-follower relations: Wearing was not accepted or trusted by police force members because he
According to Fiedler, the situation at the police department requires a task-oriented leader because
task-oriented leaders do well when the situation is extremely unfavorable (where leader-member
3. If you were Chief Wearing, how might you use the information you learned in this chapter to
enhance the diversity of the police force?
C. Attribution and Leadership
The attribution perspective holds that when behaviors are observed in a context associated with
leadership, different people may attribute varying levels of leadership ability or power to the
person displaying those behaviors.
The attributions we make subsequently affect both our own behavior and the actual capacity of
an individual to behave like a leader.
The attribution perspective on leadership is especially clear during presidential campaigns.
Candidates and their handlers strive to make sure that they are always shown in the best
possible light.
Global Issues: Effect of Culture on Perceptions of Leaders’ Attributes
Some examples of universal Some examples of universal Some examples of culturally
positive leader attributes: negative leader attributes: contingent leader attributes:
Trustworthy Irritable Cunning
Dependable Dictatorial Sensitive
Excellence oriented Uncooperative Evasive
Honest Ruthless Risk taker
Motivating Egocentric Ruler
III. ALTERNATIVES TO LEADERSHIP
In some cases, circumstances may exist that render leadership unnecessary or irrelevant. The factors
that contribute to these circumstances are called leadership substitutes.
In other cases, factors may exist that neutralize or negate the influence of a leader even when that
individual is attempting to exercise leadership.
A. Leadership Substitutes
Leadership substitutes are individual, task, and organizational characteristics that tend to
outweigh the leader’s ability to affect subordinates’ satisfaction and performance.
In other words, if certain factors are present, the employee will perform his or her job capably
without the direction of a leader.
Several basic leadership substitutes are identified in Table 12.1.
Individual ability, experience, training, knowledge, motivation, and professional orientation are
among the characteristics that may substitute for leadership.
Similarly, a task characterized by routine, a high degree of structure, frequent feedback, and
intrinsic satisfaction may also render leader behavior unnecessary.
Explicit plans and goals, rules and procedures, cohesive work groups, a rigid reward structure,
and physical distance between supervisor and subordinate are organizational characteristics that
may substitute for leadership.
Research has provided support for the concept of leadership substitutes, but additional research
is needed to identify other potential substitutes and their impact on leadership effectiveness.
B. Leadership Neutralizers
In other situations, even if a leader is present and attempts to engage in various leadership
behaviors, those behaviors may be rendered ineffective—neutralized—by various factors.
These factors are referred to as leadership neutralizers.
In addition to group factors, elements of the job itself may also limit a leader’s ability to “make
a difference.”
Finally, organizational factors can also neutralize at least some forms of leader behavior.
IV. THE CHANGING NATURE OF LEADERSHIP
Among the recent changes in leadership that managers should recognize are the increasing role of
leaders as coaches and gender and cross-cultural patterns of leader behavior.
A. Leaders as Coaches
Whereas leaders were once expected to control situations, direct work, supervise people,
closely monitor performance, make decisions, and structure activities, many leaders today are
being asked to change how they manage people.
Perhaps the best description of this new role is that the leader is becoming a coach instead of an
overseer or supervisor.
A coaching perspective would call for the leader to help select team members and other new
employees, to provide some general direction, to help train and develop the team and the skills
of its members, and to help the team get the information and other resources it needs.
The leader may also have to help resolve conflict among team members and mediate other
disputes that arise.
Coaches from different teams may need to play important roles in linking the activities and
functions of their respective teams.
But beyond these activities, the leader keeps a low profile and lets the group get its work done
with little or no direct oversight from the leader.
Within the coaching role, some leaders have also excelled at taking on more responsibilities as
a mentor—the role of helping a less experienced person learn the ropes to better prepare
himself or herself to advance within the organization.
B. Gender and Leadership
Given that most leadership theories and research studies have focused on male leaders,
developing a better understanding of how females lead is clearly an important next step.
The one difference that does seem to arise in some cases is that women have a tendency to be
slightly more democratic in making decisions, whereas men have a similar tendency to be
somewhat more autocratic.
There are two possible explanations for this pattern. One possibility is that women may tend to
have stronger interpersonal skills than men and are hence better able to effectively involve
others in making decisions.
The other possible explanation is that women may encounter more stereotypic resistance to
their occupying senior roles. If this is the case, they may actively work to involve others in
making decisions so as to help minimize any hostility or conflict.
C. Cross-Cultural Leadership
In this context, culture is used as a broad concept to encompass both international differences
and diversity-based differences within a single culture. We focus first on intra-country cultural
issues.
Cross-cultural factors clearly play a growing role in organizations as their workforces become
more and more diverse.
Religion is also a potential issue in leadership. There are cross-cultural issues even when
leaders and followers have less visible indicators of diversity.
D. International Leadership and Project GLOBE
Cross-cultural issues are also obvious in international contexts.
Japan is generally characterized by collectivism, while the United States is based more on
individualism. The Japanese executive, then, will find it necessary to recognize the importance
of individual contributions and rewards and the differences in individual and group roles that
exist in Japanese and U.S. businesses. And, obviously, similar issues will result if an American
leader is posted to Asia.
Project GLOBE (Global Leadership and Organizational Behavior Research Project) was
initiated by Robert House to learn more about international leadership.
GLOBE identified six leader behaviors that can be observed and assessed across a variety of
cultures.
These behaviors are:
Charismatic / value-based leadership: the ability to inspire, to motivate, and to promote
high performance; includes being visionary, self-sacrificing, trustworthy, decisive, and
performance oriented
Team-oriented leadership: emphasizes team building and creating a sense of common
purpose; including being collaborative, diplomatic, and administratively competent
Participative leadership: the extent to which leaders involve others in making
decisions; being participative and nonautocratic
Humane-oriented leadership: being supportive, considerate, compassionate, and
generous; displaying modesty and sensitivity
Autonomous leadership: refers to being independent and individualist; being
autonomous and unique
Self-protective leadership: includes behaviors intending to ensure the safety and
security of the leader and the group; includes being self-centered, status conscious,
conflict inducing, and face saving.
These behaviors have been—and are being—studied in 62 global societies.
Based on the preliminary results, the original 62 societies were condensed into 10 cultural
clusters—societies that yielded highly similar results to one another.
In general, the findings of GLOBE suggest that within any cultural cluster, followers react in
similar ways to various leader behaviors.
Of course, as noted earlier, this research is still ongoing, and it would be premature to draw
overly strong generalizations at this point.
V. EMERGING ISSUES IN LEADERSHIP
Finally, there are also three emerging issues in leadership that warrant discussion. These
issues are strategic leadership, ethical leadership, and virtual leadership.
A. Strategic Leadership
We will define strategic leadership as the capability to understand the complexities of both the
organization and its environment and to lead change in the organization so as to achieve and
maintain a superior alignment between the organization and its environment.
Strategic leadership puts greater weight on the leader’s ability to think and function
strategically.
To be effective in this role, a manager needs to have a thorough and complete understanding of
the organization—its history, its culture, its strengths, and its weaknesses.
In addition, the leader needs a firm grasp of the organization’s environment.
Finally, looking at environmental trends and issues, the strategic leader works to improve not
only the current alignment but also the future alignment.
B. Ethical Leadership
Ethical leadership is the process of leading based on consistent principles of ethical conduct.
The behaviors of top leaders are being scrutinized more than ever, and those responsible for
hiring new leaders for a business are looking more and more closely at the backgrounds of
those being considered.
C. Virtual Leadership
Finally, virtual leadership is also emerging as an important issue for organizations. Virtual
leadership, therefore, is leadership via various forms of distance technologies.
How do managers carry out leadership when they do not have regular personal contact with
their followers?
Communication between leaders and their subordinates will still occur, of course, but it may be
largely by telephone, texting, and email.
Building on this, managers should then also take advantage of every single opportunity
whenever they are in face-to-face situations to go further than they might have done under
different circumstances to develop a strong relationship.
Beyond these simple prescriptions, there is no theory or research to guide managers functioning
in a virtual world.
Summary and Applications
The leader-member exchange model (LMX) of leadership stresses the importance of variable
relationships between supervisors and each of their subordinates.
There are three primary approaches to leadership through the eyes of followers. Transformational
leadership focuses on the basic distinction between leading for change and leading for stability.
Perspectives based on charismatic leadership assume that charisma is an individual characteristic of the
leader.
The attribution perspective holds that when behaviors are observed in a context associated with
leadership, others may attribute varying levels of leadership ability or power to the person displaying
those behaviors.
In some cases, circumstances may exist that render leadership unnecessary or irrelevant. The factors that
contribute to these circumstances are called leadership substitutes. In other cases, factors may exist that
neutralize or negate the influence of a leader even when that individual is attempting to exercise
leadership.
The nature of leadership continues to evolve. Among recent changes in leadership that managers should
recognize is the increasing role of leaders as coaches.
Finally, there are three emerging issues in leadership. Strategic leadership is a new concept that explicitly
relates leadership to the role of top management. In addition, leaders in all organizations are being called
upon to maintain high ethical standards for their own conduct, to unfailingly exhibit ethical behavior, and
to hold others in their organizations to the same standards. The growing importance of virtual leadership
needs to be further studied.