CHAPTER 15
LEADERSHIP
CHAPTER OUTLINE
What’s Your Personal Style?
I. The Nature of Leadership
II. Contemporary Leadership
A. Level 5 Leadership
B. Servant Leadership
B. The Leadership Grid
VI. Contingency Approaches
A. The Situational Model of Leadership
B. Fiedler’s Contingency Theory
C. Situational Substitutes for Leadership
VII. Charismatic and Transformational Leadership
A. Charismatic Leadership
ANNOTATED LEARNING OBJECTIVES
After studying this chapter, students should be able to:
1. Define leadership and explain its importance for organizations.
There is probably no topic more important to business success today than leadership. Leadership
occurs between people, involves the use of influence, and is used to attain goals. Influence
• Chapter 15
264
2. Describe how leadership is changing in today’s organizations, including Level 5 leadership,
servant leadership, and authentic leadership.
The turbulence and uncertainty of the environment in which most organizations are operating has
significantly influenced leadership styles in recent years. Ethical and economic difficulties,
corporate governance concerns, globalization, changes in technology, new ways of working,
The concept of servant leadership, first described by Robert Greenleaf, is leadership upside
down, because leaders transcend self-interest to serve others and the organization. Servant
leaders operate on two levels: for the fulfillment of their subordinates’ goals and needs and for
Authentic leadership refers to individuals who know and understand themselves, who espouse
and act consistently with higher-order ethical values, and who empower and inspire others with
their openness and authenticity.
• Authentic leaders pursue their purpose with passion. When leaders demonstrate a high level
of passion and commitment to purpose, they inspire commitment from followers.
3. Discuss how women’s style of leading is typically different from men’s.
Some of the characteristics associated with Level 5 leaders and authentic leaders are also
hallmarks of interactive leadership, which has been found to be associated with female leaders.
Leadership •
265
4. Identify personal characteristics associated with effective leaders.
Traits are the distinguishing personal characteristics of a leader such as intelligence, values, self-
confidence, and appearance. In addition to personality traits, physical, social, and work-related
5. Define task-oriented behavior and people-oriented behavior and explain how these
categories are used to evaluate and adapt leadership style.
Task-oriented behavior and people-oriented behavior are two basic categories of behavior
identified as important for leadership. People-oriented behavior is the extent to which the leader
6. Describe the situational model of leadership and its application to subordinate participation.
The situational model of leadership, which originated with Hersey and Blanchard, focuses a
great deal of attention on the characteristics of employees in determining appropriate leadership
• Chapter 15
266
7. Discuss how leadership fits the organizational situation and how organizational
characteristics can substitute for leadership behaviors.
The organizational situation or variables can be so powerful that they actually substitute for, or
8. Describe transformational leadership and when it should be used.
Managers deal with organizational complexity; leaders initiate productive change.
9. Explain how followership is related to effective leadership.
Many of the qualities that define a good leader are the same qualities as those possessed by a
10. Identify sources of leader power and the tactics leaders use to influence others.
Power is the potential ability to influence the behavior of others. Power represents the resources
with which a leader effects changes in employee behavior. Within organizations there are
typically five sources of power.
• Legitimate power comes from a formal management position in an organization and the
Leadership •
267
LECTURE OUTLINE
WHAT’S YOUR PERSONAL STYLE?
Ideas about effective leadership change over time. A recent view of leadership called Level 5
I. THE NATURE OF LEADERSHIP
There is probably no topic more important to business success than leadership because it occurs
among people, involves influence, and is used to attain goals. Influence means that the
II. CONTEMPORARY LEADERSHIP Exhibit 15.1
The turbulence and uncertainty of the environment in which most corporations are operating in
today’s world have had a significant influence on leadership thinking and styles. Ethical and
economic difficulties, corporate governance concerns, globalization, changes in technology, new
ways of working, shifting employee expectations, and significant social transitions have
contributed to a shift in how we think about and practice leadership.
A. Level 5 Leadership
1. A key characteristic of Level 5 leaders is an almost complete lack of ego, coupled
with a fierce resolve to do what is best for the organization. In contrast to the view of
B. Servant Leadership
1. Servant leaders operate on two levels: for the fulfillment of the subordinates’ goals
and needs and for the realization of the larger purpose or mission of their
• Chapter 15
268
C. Authentic Leadership Exhibit 15.2
1. Authentic leadership refers to individuals who know and understand themselves,
who espouse and act consistently with higher-order ethical values, and who empower
and inspire others with their openness and authenticity.
a. Authentic leaders pursue their purpose with passion. When leaders demonstrate a
high level of passion and commitment to purpose, they inspire commitment from
followers.
D. Gender Differences Exhibit 15.3
1. Some of the characteristics associated with Level 5 leaders and authentic leaders are
also hallmarks of interactive leadership, which has been found to be associated with
III. FROM MANAGEMENT TO LEADERSHIP Exhibit 15.4
Management and leadership are both important to organizations. Effective managers must also
be leaders because of distinctive qualities associated with each that provide different strengths
for the organization. Management and leadership reflect two different sets of qualities and skills
that frequently overlap within a single individual. A person may have more of one set of
Leadership •
269
qualities than the other, but ideally a manager develops a balance of both manager and leader
qualities.
IV. LEADERSHIP TRAITS Exhibit 15.5
Early efforts to understand leadership focused on the leader’s personal characteristics or traits.
Traits are the distinguishing personal characteristics of a leader, such as intelligence, honesty,
self-confidence, and appearance.
Discussion Question #1: Suggest some personal traits that you believe would be useful to a
business leader today. Are these traits more valuable in some situations than in others? How do
you think traits differ from strengths?
NOTES________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
V. BEHAVIORAL APPROACHES
A. Task versus People
1. The inability to define effective leadership based solely on traits led to an interest in
looking at the behavior of leaders and how it might contribute to leader success. Two
basic leadership behaviors that have been identified as important for leadership are
task-oriented behavior and people-oriented behavior.
a. Studies of leader behavior at The Ohio State University identified two major
leadership behaviors called consideration and initiating structure.
• Chapter 15
270
b. Studies at the University of Michigan compared the behavior of effective and
ineffective supervisors.
B. The Leadership Grid Exhibit 15.6
1. Researchers at the University of Texas developed the Leadership Grid®, a
two-dimensional model that measures concern for people and for production. Each
axis on the grid is a nine-point scale, with 1 meaning low concern and 9 meaning high
concern.
a. Team management (9,9) is often considered the most effective style for all
managers; organization members work together to accomplish task outcomes.
NOTES________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
Leadership •
271
VI. CONTINGENCY APPROACHES
A. The Situational Model of Leadership Exhibit 15.7
1. The situational model of leadership, which originated with Hersey and Blanchard, is
2. The focus of this model is that subordinates vary in their readiness level, which is
determined by the degree of willingness and ability a subordinate demonstrates while
performing a specific task.
a. Willingness refers to a combination of confidence, commitment, and motivation,
and a follower may be high or low on any of the three variables.
3. According to the situational model, a leader can adopt one of four leadership styles,
based on relationship (concern for people) and task (concern for production)
behavior. The four styles include:
a. Directing style—a highly dictating style and involves giving explicit directions
about how tasks should be accomplished.
4. Followers may be at low, moderate, or high levels of readiness.
a. Low Readiness Level. A directing style is appropriate when followers are at a
low readiness level because of poor ability and skills, little experience, insecurity,
or unwillingness. The leader directs followers what to do, how to do it, and when
to do it.
• Chapter 15
272
d. High Readiness Level. When followers have high levels of education,
experience, and readiness to accept responsibility for their own task behavior, the
entrusting style is effective. For these followers, the leader provides a general
goal, delegates’ sufficient authority to do the task, and expects followers to
complete the task as they see fit.
NEW MANAGER SELF-TEST: TASK VERSUS PEOPLE ORIENTATION
The majority of a new manager’s work is accomplished through interpersonal relationships.
B. Fiedler’s Contingency Theory Exhibit 15.8
The cornerstone of Fiedler’s contingency theory is the extent to which the leader’s style is
relationship oriented or task oriented. A relationship-oriented leader is concerned with
people. A task-oriented leader is primarily motivated by task accomplishment.
1. Situation: Favorable or Unfavorable?
a. The suitability of a person’s leadership style is determined by whether the
situation is favorable or unfavorable. Since leadership styles are considered to be
difficult to change, the basic idea is to match the leader’s style with the situation
Leadership •
273
NOTES________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
2. Matching Leader Style to the Situation
a. Combining the three characteristics yields eight leadership situations.
• The task-oriented leader excels in most favorable situations because everyone
gets along, the task is clear, and the leader has power. The task-oriented
b. A leader needs to know two things to use Fiedler’s contingency theory.
• A leader needs to know whether he or she has a relationship- or task-oriented
style.
C. Situational Substitutes for Leadership Exhibit 15.9
1. The contingency leadership approaches considered so far have focused on the
leader’s style, the subordinates’ nature, and the situation’s characteristics. The final
contingency approach suggests that situational variables can be so powerful that they
substitute for, or neutralize, the need for leadership.
Discussion Question #10: Consider the leadership position of a senior partner in a law firm.
What task, subordinate, and organizational factors might serve as substitutes for leadership in
this situation?