Chapter 10 – Leaders and Leadership
10-1
Chapter 10
Leaders and Leadership
Learning Objectives 10-2
Key Definitions/Terms 10-2
Chapter Overview 10-4
Lecture Outline 10-4
Lecture Enhancers 10-19
Management in Action 10–22
Building Management Skills 10-25
Managing Ethically 10-27
Small Group Breakout Exercise 10-28
Be the Manager 10–29
Case in the News 10–30
Supplemental Features 10–31
Manager’s Hot Seat 10-31
Instructor’s PowerPoint Slides 10–33
CHAPTER CONTENTS
Chapter 10 – Leaders and Leadership
10-2
LO 10-1. Explain what leadership is, when leaders are effective and
LO 10-2. Identify the traits that show the strongest relationship to
leadership, the behaviors leaders engage in, and the limitations of
the trait and behavior models of leadership.
LO 10-3. Explain how contingency models of leadership enhance our
LO 10-5. Characterize the relationship between gender and leadership and
explain how emotional intelligence may contribute to leadership
effectiveness.
LEARNING OBJECTIVES
KEY DEFINITIONS/TERMS
Chapter 10 – Leaders and Leadership
10-3
leader–member relations The extent to which
followers like, trust, and are loyal to their leader; a
determinant of how favorable a situation is for
legitimate power The authority that a manager has
by virtue of his or her position in an organization’s
hierarchy.
path-goal theory A contingency model of
relationship-oriented leaders Leaders whose
primary concern is to develop good relationships
task structure The extent to which the work to be
performed is clear–cut so that a leader’s
subordinates know what needs to be accomplished
and how to go about doing it; a determinant of how
favorable a situation is for leading.
Chapter 10 – Leaders and Leadership
10-4
In this chapter we describe what leadership is and examine the major leadership models that shed light
on the factors that contribute to a manager’s being an effective leader. We look at trait and behavior
models, which focus on what leaders are like and what they do, and contingency models—Fiedler’s
contingency model, path-goal theory, and the leader substitutes model—each of which takes into
account the complexity surrounding leadership and the role of the situation in leader effectiveness. We
also describe how managers can use transformational leadership to dramatically affect their
organizations. By the end of this chapter, you will have a good appreciation of the many factors and
issues that managers face in their quest to be effective leaders.
NOTE ABOUT INSTRUCTOR’S
POWERPOINT SLIDES
The Instructor PowerPoint Slides include most
Student PowerPoint slides, along with additional
material that can be used to expand the lecture.
Images of the Instructor PowerPoint slides can be
found at the end of this chapter on page 10–31.
BASIC POWERPOINT SLIDE 1
(INSTRUCTOR’S POWERPOINT SLIDE 1)
Chapter Title
CHAPTER OVERVIEW
Chapter 10 – Leaders and Leadership
10-5
Management Snapshot (pp. 337-338)
Whitehurst Leads Red Hat
How Can a Manager Foster Creativity in a Rapidly Changing Environment?
Jim Whitehurst, president and CEO of Red Hat, Inc., recognizes the vital role that creativity
plays in organizations in rapidly changing arenas, such as open-source software. Red Hat,
headquartered in Raleigh, North Carolina, fully embraces the open source development
model, which relies on global communities of contributors to develop, service, and improve
software. Red Hat earns revenues through a variety of sources from its business and
organizational customers, including subscriptions, paid technical support, and consulting
services.
At Red Hat, Whitehurst emphasizes that respect is earned by everyone (including top
managers like himself) by what they do and how they contribute. In fact, Whitehurst
believes that in order for leaders to be effective, they need to be respected by organizational
members for their words and deeds and not just their titles. According to Whitehurst, three
important means by which leaders like himself can gain the respect of organizational
members is by being passionate about their mission and vision, being confident, and
engaging other organizational members. A strong believer in empowerment and trusting
employees to do what they think is right, Whitehurst also thinks that leaders and all
employees must feel accountable to each other.
Red Hat has performed well under Whitehurst’s leadership.
Chapter 10 – Leaders and Leadership
I. The Nature Of Leadership
A. Leadership is the process by which a person exerts
influence over other people and inspires, motivates, and
directs their activities to help achieve group or
organizational goals. The person who exerts such influence
is a leader.
1. When leaders are effective, the influence they exert
helps a group achieve its performance goals.
2. When leaders are ineffective, their influence does
not contribute to, and often detracts from, goal
attainment.
B. Personal Leadership Style and Managerial Tasks: A
manager’s personal leadership style is the specific way in
which he or she chooses to influence other people.
organizations have their own personal leadership styles
that determine how they lead subordinates and how
LO 10-1: Explain what
leadership is, when
leaders are effective
and ineffective, and
the sources of power
that enable managers
to be effective leaders.
POWERPOINT SLIDES 10-4 TO 10-
16
Chapter 10 – Leaders and Leadership
they perform other management tasks.
a. Although leading is one of the four principal
tasks of managing, a distinction is often made
between managers and leaders.
b. When this distinction is made, managers are
thought of as those organizational members who
establish and implement procedures and processes
to ensure smooth functioning and who are
accountable for goal accomplishment.
c. Leaders, on the other hand, look to the future,
chart the course for the organization, and attract,
retain, motivate, and inspire, and develop
relationships with employees based on trust and
mutual respect.
2. Servant Leaders: Leaders who have a strong desire
to work for and serve others. Servant leaders share
power with followers and pay attention to those who
are least well off in society.
C. Leadership Styles across Cultures: Some evidence
suggests that leadership styles vary not only among
individuals, but also among countries and cultures.
1. Some research suggests that European managers
tend to be more humanistic than both Japanese and
American managers.
2. Japan’s collectivistic culture places its primary
emphasis on the group rather than the individual, so
the importance of the individual’s needs, desires, and
Chapter 10 – Leaders and Leadership
b. Managers in Europe’s large international firms
have a philosophy that lies in between the long
term approach of the Japanese and the short term
approach of the Americans.
5. Research on the global aspects of leadership is in its
infancy. As it continues, more cultural differences in
managers’ leadership styles may be discovered.
D. Power: The Key to Leadership: A key component of
effective leadership is found in the power the leader has to
affect other people’s behavior and get them to act in
certain ways. There are several types of power. Effective
leaders take steps to ensure that they have sufficient levels
of each type and that they use their power in beneficial
ways.
1. Legitimate power is the authority a manager has by
virtue of his or her position in an organization’s
hierarchy.
2. Reward power is the ability of a manager to give or
withhold tangible rewards such as pay raises, bonuses,
and choice job assignments, as well as intangible
rewards such as verbal praise, a pat on back, or respect.
a. Effective managers use their reward power to
show appreciation for subordinates’ good work
and efforts.
b. Ineffective managers use rewards in a more
controlling manner that signals to subordinates that
the manager has the upper hand.
3. Coercive power is the ability of a manager to
punish others.
reductions in pay, or actual dismissal.
b. Managers who rely heavily on coercive power
tend to be ineffective as leaders and sometimes
even get themselves fired.
Chapter 10 – Leaders and Leadership
a. The nature of expert power varies, depending on
the leader’s level in the hierarchy.
b. Effective leaders take steps to ensure that they
have an adequate amount of expert power to
perform their leadership roles.
c. Expert power tends to be best used in a guiding
or coaching manner rather than in an arrogant,
high-handed manner.
5. Referent power stems from subordinates’ and
coworkers’ respect, admiration, and loyalty to and for
their leader.
a. Leaders who are likable and whom subordinates
admire are likely to possess referent power.
b. Because referent power is a function of the
personal characteristics of a leader, managers can
increase their referent power by taking time to get
to know their subordinates and showing interest in
them.
E. Empowerment: An Ingredient in Modern
Management: Empowerment is the process of giving
employees at all levels in the organization the authority to
make decisions, be responsible for their outcomes, improve
quality, and cut costs.
1. It can contribute to effective leadership for several
reasons:
2. The personal leadership style of managers who
empower subordinates often entails developing
subordinates’ ability to make good decisions as well as
being their guide, coach, and source of inspiration.
II. Trait and Behavior Models of Leadership
Chapter 10 – Leaders and Leadership
Early approaches to leadership, called the trait model and
the behavior model, sought to determine what effective
leaders are like as people and what they do that makes
them so effective.
A. The Trait Model: The trait model of leadership
focused on identifying the personal characteristics that are
responsible for effective leadership.
1. Decades of research indicate that certain personal
characteristics do appear to be associated with
effective leadership.
2. However, traits alone are not the key to
understanding leader effectiveness.
3. Some effective leaders do not possess all of the
traits identified in this model, and some leaders who do
possess them are not effective in their leadership roles.
4. This lack of a consistent relationship between leader
traits and leader effectiveness led researchers to shift
their attention away from what leaders are like (their
traits) to what effective managers actually do, i.e., their
behaviors.
B. The Behavior Model: Researchers at Ohio State
University in the 1940s and 1950s identified two basic
kinds of leader behaviors that many managers engaged in
to influence their subordinates: consideration and initiating
structure.
1. Consideration: Leaders engage in consideration
when they show their subordinates that they trust,
respect, and care about them.
of their subordinates and do what they can to help
subordinates feel good and enjoy their work
perform consideration behaviors.
LO 10-2: Identify the traits
that show the
strongest
relationship to
leadership, the
behaviors leaders
engage in, and the
limitations of the
trait and behavior
models of
leadership.
POWERPOINT SLIDES 10-17 TO
10–20
TEXT REFERENCE
Management Insight:
Consideration at Costco
Managers at Costco believe
consideration is so important that
one of the principles in Costco’s
code of ethics is “Take Care of Our
Employees.” Costco Wholesale
retailer and the top warehouse
retailer in the United States. Wages
at Costco are an average of $17 per
McGraw-Hill Education.
3. Initiating structure and consideration are
independent leader behaviors. Leaders can be high on
both, low on both, or high on one and low on the other.
III. Contingency Models of Leadership
A. Contingency models of leadership take into account the
situation or context within which leadership occurs. They
propose that whether or not a manager is an effective
leader is the result of the interplay between what the
manager is like, what he or she does, and the situation in
which leadership takes place.
B. Fiedler’s Contingency Model: Fiedler’s contingency
model helps explain why a manager may be an effective
leader in one situation and ineffective in another. It also
suggests which kinds of managers are likely to be most
effective in which situations.
1. Leader Style: Fiedler hypothesized that personal
characteristics can influence leader effectiveness. He
uses the term leader style to refer to a manager’s
characteristic approach to leadership and identified two
basic leader styles: relationship-oriented and task-
oriented. All managers can be described as having one
style or the other.
a. Relationship-oriented leaders are primarily
concerned with developing good relationships with
their subordinates and being liked by them. They
high-quality interpersonal relationships with
subordinates.
b. Task-oriented leaders are primarily concerned
with ensuring that subordinates perform at a high
level.
2 Situational Characteristics: According Fielder,
leadership style is an enduring characteristic. Managers
cannot change their style, nor can they adopt different
styles in different kinds of situations. Fielder identified
about the well-being of employees is
a win–win proposition because
Costco’s employees are satisfied,
committed, loyal, and motivated.
Additionally, turnover and employee
theft rates at Costco are much lower
than industry averages.
Furthermore, treating employees
well helps build customer loyalty at
Costco. One reason why customers
are loyal to Costco is because they
know the company treats its
employees well and their bargains
are not coming at the expense of
employees’ paychecks and benefits.
True to caring for the well-being of
employees, Costco did not lay off
any employees during the recession
in the late 2000s. Also, after a class
action lawsuit alleging gender
discrimination at Costco, the
company has taken steps to improve
the placement of both male and
female employees into managerial
positions. (pp. 345 – 346)
LO 10- 3: Explain how
contingency models
of leadership enhance
our understanding of
effective leadership
and management in
organizations.
POWERPOINT SLIDES 10-21 TO
10–31
Chapter 10 – Leaders and Leadership
a. Leader-member relations describes the extent
to which followers like, trust, and are loyal to their
leader. Situations are more favorable for leading
when leader-member relationships are good.
b. Task structure is the extent to which the work
to be performed is clear-cut so that the leader’s
subordinates know what needs to be accomplished
and how to go about doing it. When task structure
is high, situations are favorable for leading. When
task structure is low, the situation is unfavorable
for leading.
c. Position power is the amount of legitimate,
reward, and coercive power a leader has by virtue
of his or her position in an organization.
3. Combining Leader Style and the Situation: By
taking all possible combinations of these factors,
Fiedler identified eight leadership situations, which
vary in their favorability for leading. Based on
in moderately favorable situations, and,
b. task-oriented leaders are most effective in very
favorable or very unfavorable situations.
in leadership situations that fit their style or the
situation must need to be changed to suit the
manager’s style, if he or she is to be effective.
motivate their subordinates to achieve group or
organizational goals.
1. The premise is that effective leaders motivate
subordinates to achieve goals by:
Chapter 10 – Leaders and Leadership
a. Clearly identifying the outcomes that
subordinates are trying to obtain in the workplace,
b. Rewarding subordinates with these outcomes for
high performance and the attainment of work
goals, and
c. Clarifying for subordinates the paths leading to
the attainment of work goals.
2. Path-goal theory identifies four kinds of behaviors
that leaders can engage in to motivate subordinates.
Which behaviors managers should use to lead
effectively depends upon the nature of the subordinates
and the kind of work they do. The behaviors are:
a. Directive behaviors, which are similar to
initiating structure and include showing
subordinates a say in matters and decisions that
affect them, and
d. Achievement-oriented behaviors, which
motivate subordinates to perform at the highest
level possible by setting very challenging goals
and believing in subordinates’ capabilities.
Chapter 10 – Leaders and Leadership
3. Characteristics of the situation or context, such as
the extent to which the work is interesting, can also be
substitutes.
4. When managers empower their subordinates or use
self-managed teams, the need for leadership influence
is decreased because team members manage
themselves.
5. Substitutes for leadership can increase
organizational efficiency and effectiveness because
they free up some of the leader’s valuable time.
E. Bringing It All Together: The three contingency
models help managers hone in on the necessary ingredients
for effective leadership. They are complementary, since
each one looks at the leadership question from a different
angle.
IV. Transformational Leadership
A. Transformational leadership occurs when managers
change their subordinates in three important ways.
1. Transformational managers make
subordinates aware of how important their
jobs are to the organization and how
important it is that they perform those jobs
as best they can, so that the organization can
attain its goals.
2. Transformational managers make their
subordinates aware of their own needs for
personal growth, development, and
accomplishment.
3. Transformational managers motivate their
subordinates to work for the good of the
own personal gain.
Managers and other transformational leaders can influence
engaging in developmental consideration.
how good things could be in their groups and organizations
that is in contrast with the status quo.
1. Their vision usually includes dramatic
improvements in both group and organizational
performance.
2. Charismatic leaders are excited and enthusiastic
about their vision and clearly communicate it to their
subordinates.
3. The essence of charisma is having a vision and
enthusiastically communicating it to others.
C. Stimulating Subordinates Intellectually:
Transformational managers openly share information so
that subordinates are aware of problems and the need for
change.
1. They help subordinates to view problems from a
different perspective that is consistent with the
manager’s vision.
2. They use intellectual stimulation, which leads
subordinates to view problems as challenges that they
can and will meet and conquer.
D. Engaging in Developmental Consideration: When
managers engage in developmental consideration, they
go out of their way to support and encourage subordinates,
giving them opportunities to enhance their skills and excel
on the job.
E. The Distinction Between Transformational and
1. Transformational leadership is often contrasted with
transactional leadership.
their reward and coercive power to encourage high
performance.
a. When managers reward high performers,
reprimand low performers, and motivate by
reinforcing desired behaviors, they are engaging in
transactional leadership.
b. Many transformational leaders engage in
transactional leadership, but at the same time have
LO 10-4: Describe what
transformational
explain how
managers can
POWERPOINT SLIDE 10-32 TO 10-
36
McGraw-Hill Education.
D. There are at least two reasons why women leaders are
1. First, women must sometimes adopt a participative
approach to overcome resistance to their leadership
and engender subordinate trust and respect.
2. Second, they sometimes possess stronger
interpersonal skills.
E. The key finding from research is that male and female
managers do not differ significantly in their propensities to
perform different leader behaviors, and that across
different kinds of organizational settings, male and female
managers tend to be equally effective as leaders.
VI. Emotional Intelligence And Leadership
A. Preliminary research suggests that emotions and moods
of leaders at work influence their behavior and
effectiveness as leaders. A leader’s level of emotional
intelligence may play a strong role in leadership
effectiveness. Also, emotional intelligence plays a crucial
role in how leaders relate to and deal with their followers,
particularly when it comes to encouraging followers to be
creative.
LO 10-5: Characterize the
relationship between
gender and leadership
and explain how
emotional intelligence
may contribute to
leadership
effectiveness
POWERPOINT SLIDE 10-37
Chapter 10 – Leaders and Leadership
POWERPOINT SLIDES 10-38 TO
10–39
TEXT REFERENCE
Focus on Diversity: Admitting a
Mistake Helps Small Business
Leader
Maureen Borzacchiello, CEO of
Creative Display Solutions, founded
her small business to provide
displays, graphics, and exhibits for
use in trade shows and at events for
companies. Her company was
growing steadily.
However, in 2006 she realized she
had overextended her business
financially. Still confident that if she
could get through a tough period, she
Chapter 10 – Leaders and Leadership
with her employees about the
company’s current financial
problems, why they occurred, and
how she would strive to prevent such
problems in the future.
Borzacchiello also told employees
that she and her husband (who
worked for the company) would take
no money out of the business for
their own salaries until the financial
problems were resolved. By being
honest and open with employees,
Borzacchiello gained their
commitment and support. All
employees decided to work shorter
hours, and two employees were
willing to have their hourly pay rates
cut. True to her promise, within two
months all employees were able to
return to their regular work hours.
Today, Creative Display Solutions is
a profitable multimillion-dollar
business with hundreds of clients.
(pp. 357 – 358)
Lecturer Enhancer 10.1
WANTED: A GLOBAL BOSS
Any time there’s a big international merger, there are inevitable worries about “culture clash.”
When Marjorie Scardino, a tall, wisecracking Texan, was named to head Britain’s blue-blooded
LECTURE ENHANCERS