Chapter 17
Being an Effective Leader
Leaders in organizations make things happen. But what makes leaders different
from nonleaders? What’s the most appropriate style of leadership? What can you
do to be seen as a leader? Those are just a few of the questions we’ll try to
answer in this chapter. Focus on the following learning objectives as you read
and study this chapter.
LEARNING OBJECTIVES
2. Compare and contrast early theories of leadership.
4. Describe contemporary views of leadership.
5. Discuss contemporary issues affecting leadership.
IT’S YOUR CAREER
I’m a Leader: Now What?
You’ve been promoted to a supervisory position. Or you’ve been asked to head
up a temporary taskforce. Or your team asks you to lead them on a new project.
What now? Sometime during your work career, you’re likely to be asked to step
up and take a leadership position. As a leader, you’ll want a team that’s
motivated, committed, engaged, and ready to give their best. Here are some
suggestions to help you successfully make that transition to being an
effective leader:
1. Assess the leadership situation by looking at these three variables:
a. Assess the individual capabilities of your group members.
2. Build trust. Trust is so critically important. People tend to not follow
those they don’t trust.
3. Be consistent. Set clear priorities and follow them consistently and
daily.
5. Don’t distance yourself from those you’re leading. Being arrogant or
distant can disengage your team members.
6. Be adaptable. Leading others isn’t a one-size fits-all scenario.
CHAPTER OUTLINE
INTRODUCTION
The quality of leadership is an important element in an organization’s
success, since leaders influence employees to work together toward the
fulfillment of a company’s mission and the achievement of its goals.
17.1. WHO ARE LEADERS, AND WHAT IS LEADERSHIP?
Certain distinctions can be made between managers and leaders.
17.2. EARLY LEADERSHIP THEORIES
Researchers began to study leadership in the early twentieth century and
developed behavioral theories that focused on the leader (trait theories)
and how the leader interacts with his or her group members.
A. Leadership Trait Theories
1. Research in the 1920s and 1930s focused on the traits of
2. Identifying a set of traits consistently associated with the
3. Six traits associated with effective leadership are described
in Exhibit 17-1.
B. Leadership Behavior Theories
1. Researchers began to hope that a behavioral theories’
2. Four main leader behavior studies are summarized in
Exhibit 17-2.
a. University of Iowa Studies. Kurt Lewin and his
associates explored three leadership styles:
autocratic, democratic, and laissez-faire.
b. The Ohio State Studies identified two important
dimensions of leader behavior: initiating structure
3. Predicting leadership success involved more than isolating
17.3. CONTINGENCY THEORIES OF LEADERSHIP
A. The Fiedler contingency model, developed by Fred Fiedler, is a
contingency theory proposing that effective group performance
depended upon the proper match between a leader’s style of
interacting with his/her followers and the degree to which the
situation allowed the leader to control and influence.
1. Fiedler developed the least-preferred coworker (LPC)
questionnaire, which measures whether a person is task
or relationship oriented. This questionnaire contained 18
2. Fiedler also isolated three situational criteria that he
believed could be manipulated to create the proper match
with the behavioral orientation of the leader:
a. Leader-member relations described the degree of
increases.
3. Next, Fiedler used the above variables to evaluate the
4. The Fiedler model proposes matching an individual’s LPC
5. Fiedler concluded that task oriented leaders tend to
7. Fiedler believed that an individual’s leadership style was
fixed; he concluded that leader effectiveness could be
improved in only two ways:
a. Bring in a new leader whose style fits better to the
B. Hersey and Blanchard’s Situational Leadership Theory (SLT) is a
leadership contingency theory developed by Paul Hersey and Ken
Blanchard that focuses on followers’ readiness.
1. Hersey and Blanchard propose that successful leadership
2. Readiness is the extent to which people have the ability
and willingness to accomplish a specific task.
4. Each of the two leadership dimensions is considered either
5. Research efforts to test and support this theory generally
have been disappointing, possibly because of internal
ambiguities or inconsistencies in the model itself.
C. Path-goal theory, developed by Robert House, is a leadership
theory that purports that it is the leader’s job to assist his or her
followers in attaining their goals and to provide the direction or
support needed to ensure that their goals are compatible with the
overall objectives of the organization (see Exhibit 17-4).
1. Four leadership behaviors were identified by House:
a. The directive leader lets subordinates know what is
expected of them, schedules work to be done, and
gives specific guidance on how to accomplish
2. The path-goal theory proposes two classes of situational or
contingency variables that moderate the leadership
3. The following hypotheses have evolved from path-goal
theory:
a. Directive leadership leads to greater satisfaction
when tasks are ambiguous or stressful, than when
they are highly structured and well laid out.
b. Supportive leadership results in high employee
4. Although not every research finding has been positive, the
majority of the evidence supports the following logic
underlying path-goal theory:
a. Employee performance and satisfaction are likely to
17.4. CONTEMPORARY VIEWS ON LEADERSHIP
The most current approaches to looking at leadership are discussed in
this section of the text.
A. Leader-Member Exchange (LMX) Theory states that leaders
create in-groups and out-groups and those in the in-group will
have higher performance, less turnover, and greater job
satisfaction.
1. The leader will categorize a follower as an “in” or an “out.”
Both leader and follower must “invest” in the relationship.
3. Research is supportive of the LMX theory.
B. Transformational-Transactional Leadership
What is the difference between transactional and transformational
leaders?
1. Transactional leaders are leaders who lead primarily by
LEADER MAKING A DIFFERENCE
Ajay Banga, CEO of MasterCard, displayed strong leadership when he undertook
the challenge of turning a banking giant into an organization that moved from
independent clusters to a company with a common synergy and vision. Banja
sought to break down the “silos,” wanting to stich them together again under a
single umbrella structure. Now as CEO, Banga is the company’s cheerleader,
shaking up the company’s low-key corporate culture with hugs and fist bumps in
the hallways. One analyst describes him as “energetic, open, and engaging.”
What can you learn from this leader who made a difference?
C. Charismatic-Visionary Leadership
1. A charismatic leader is an enthusiastic, self-confident
leader whose personality and actions influence people to
behave in certain ways.
a. Five personal characteristics of charismatic leaders
have been identified. Charismatic leaders have a
b. An increasing amount of research shows
2. Visionary leadership is the ability to create and articulate
a realistic, credible, and attractive vision of the future that
improves upon the present situation.
a. If the vision is properly selected and implemented,
D. Team Leadership. As work teams become more prevalent in the
workplace, the role of team leader becomes increasingly
important.
1. The existence of work teams necessitates that
2. Skillful team leaders master the difficult balancing act
3. A team leader has two priorities:
4. These two priorities can be broken down into four
specific leadership roles (see Exhibit 17-5):
a. Liaisons with external constituencies
17.5. LEADERSHIP ISSUES IN THE TWENTY-FIRST CENTURY
The concept of leadership is continually being refined. This section of the
text examines several contemporary issues in leadership.
A. Managing Power
Power is the capacity of a leader to influence work actions or
decisions. Because leaders must influence others, we need to
look at how leaders acquire power. French and Raven identified
five sources or bases of power.
2. Coercive power is the power a leader has because of his
or her ability to punish or control.
4. Expert power is influence that is based on expertise,
special skills, or knowledge.
6. Most effective leaders rely on several different bases of
power.
B. Developing Trust
1. Credibility is the degree to which followers perceive
someone as honest, competent, and able to inspire.
3. Research has identified five dimensions that make up the
concept of trust:
a. Integrity (honesty and truthfulness)
b. Competence (technical and interpersonal
4. Given the fact that many organizations have moved to self-
5. Some suggestions for leaders to use in building trust are
found in Exhibit 17-6.
C. Empowering Employees
Another method of leadership increasingly used by contemporary
managers is the empowerment of employees.
1. The increased use of empowerment is being driven by two
considerations:
a. Quick decisions often need to be made by the
D. Leading Across Cultures
National culture is an important situational variable in selecting the
most appropriate style.
1. Findings from research are provided in Exhibit 17-7.
2. The GLOBE research program (introduced in Chapter 4)
E. Becoming an Effective Leader
1. Leadership training takes many different forms, however,
2. Substitutes for Leadership. Certain individual, job, and
organizational variables can act as “substitutes for
leadership,” negating the importance of having an
individual leader. Possible variables of this type include
characteristics of followers (e.g., experience, training,
professional orientation, or the need to be independent).
a. Routine, unambiguous, or intrinsically satisfying
FUTURE VISION: Flexible Leadership
As organizations become flatter (that is, fewer hierarchical levels) and more
globally and technologically interconnected, old leadership models will become
outdated. Successful leaders in tomorrow’s workplaces will need to be more like
chameleons, adapting to complex and dynamic environments. Under these
circumstances, leaders can do three things: (1) share responsibility and
accountability by empowering employees; (2) keep calm and stay focused in the
The following discussion questions are posed:
Talk About It 1: Why are old leadership models becoming outdated?
Talk About It 2: Without people, leaders are nothing. What does this mean?
Student answers to these questions will vary.
ANSWERS TO REVIEW AND DISCUSSION
QUESTIONS
Student answers to these questions will vary.
17-1. What does each of the four behavioral leadership theories say about
leadership?
The University of Iowa Studies explored three styles of leadership: autocratic,
democratic, and laissez-faire. Initial results found that a democratic style leader
was more effective. However, later studies had mixed results. When group
17-2. Explain Fiedler’s contingency model of leadership.
Fiedler’s model proposed that group performance was based upon the leader’s
style and the amount of control in a given situation. After a leader’s style is
17-3. How do situational leadership theory and path-goal theory each explain
leadership?
17-4. What is leader-member exchange theory and what does it say about
leadership?
17-5. Differentiate between transactional and transformational leaders and
between charismatic and visionary leaders.
A transactional leader guides and influences followers by exchanging rewards for
17-6. What are the five sources of a leader’s power?
17-7. Do you think that most managers in real life use a contingency approach to
increase their leadership effectiveness? Explain.
As managers participate in mentoring, development training, networking, and on-
17-8. Do the followers make a difference in whether a leader is effective?
Discuss.
PERSONAL INVENTORY ASSESSMENTS
Student answers to these questions will vary.
ETHICS DILEMMA
Student answers to these questions will vary.
This ethics dilemma explores the potential problems exposed in the show
Undercover Boss. According to their Web site, the show follows a different
executive as they leave the comfort of their corner office for an undercover
mission to examine the inner workings of their companies. While working
alongside their employees, they see the effects that their decisions have on
others, where the problems lie within their organizations, and they get an up-
close look at both the good and the bad while discovering the unsung heroes
who make their companies run.
While potentially entertaining, is this candid camera approach fair to
SKILLS EXERCISE: DEVELOPING YOUR
CHOOSING AN EFFECTIVE LEADERSHIP
STYLE SKILL
Students are provided with six suggestions for choosing an effective leadership
style. They are then asked to consider two different situations from their past
experiences. In one, they are to think of a group or team which they have been a
part of and evaluate the leadership style of the leader. In the second, they are
asked to observe a successful sports team and evaluate the leadership styles.
Students should be able to use terms from the text while sharing their
WORKING TOGETHER: TEAM EXERCISE
In groups of three to four individuals, students brainstorm a list of characteristics
associated with a bad boss. In addition, they will develop a list of steps to take if
they find themselves working for a bad boss. Though students’ responses will
MY TURN TO BE A MANAGER
• Think of the different organizations to which you belong. Note the different
styles of leadership used by the leaders in those organizations. Write a
paper describing these individuals’ styles of leading (no names, please)
• Write the names of three people you consider to be effective leaders.
Make a bulleted list of the characteristics these individuals exhibit that you
• Think about the times that you have had to lead. Describe what you think
your own personal leadership style is. What could you do to improve your
leadership style? Come up with an action plan of steps that you can take.
• Managers say that increasingly they must use influence to get things
done. Do some research on the art of persuasion. Make a bulleted list of
suggestions that you find on how to improve your skills at influencing
• Here’s a list of leadership skills: building employee communities, building
teams, coaching and motivating others, communicating with impact,
confidence and energy, leading by example, leading change, making
decisions, providing direction and focus, and valuing diversity. Choose
two of these skills and develop a training exercise that will help develop or
• Steve’s and Mary’s recommended readings: Stephen M. R. Covey with
Rebecca Merrell, The Speed of Trust: The One Thing That Changes
Everything (The Free Press, 2006); Nancy S. Ahlrichs, Manager of
Choice (Davies-Black Publishing, 2003); John H. Zenger and Joseph
Folkman, The Extraordinary Leader: Turning Good Managers into Great
of leadership, AACSB: Analytical thinking) (LO: 3, Describe the three
major contingency theories of leadership, AACSB: Analytical thinking)
AACSB: Analytical thinking)
• Select one of the topics from the section “Leadership Issues in the
Twenty-First Century.” Do some additional research on the topic and put
your findings in a bulleted list. Be prepared to share this in class. Be sure
• Interview three managers about what they think it takes to be a good
leader. Write up your findings in a report and be prepared to present it in
• In your own words, write down three things you learned in this chapter
about being a good manager. (LO: 1, Define leader and leadership,
AACSB: Reflective thinking) (LO: 2, Compare and contrast early theories
• Self-knowledge can be a powerful learning tool. Go to
mymanagementlab and complete these self-assessment exercises:
What’s My Leadership Style? How Charismatic Am I? Do I Trust Others?
Do Others See Me as Trusting? and How Good Am I at Building and
Leading a Team? Using the results of your assessments, identify
ANSWERS TO CASE APPLICATION 1
QUESTIONS
Student answers to these questions will vary.
Growing Leaders
17–13. What do you think about Buckley’s statement that leaders and managers
differ? Do you agree? Why or why not?
17–14. What leadership models/theories/issues do you see in this case? List
and describe.
In this case, students may see various contingency theories of leadership as
17–15. Take each of the six leadership attributes that the company feels is
important. Explain what you think each one involves. Then discuss how those
attributes might be developed and measured.
17–16. What did this case teach you about leadership?
Though students may share their opinions regarding this question, encourage
ANSWERS TO CASE APPLICATION 2
QUESTIONS
Student answers to these questions will vary.
Serving Up Leaders
17–17. Describe the leadership lessons you think Starbucks Leadership Lab
provided store managers.
17–18. What role do you think an organization’s culture plays in how its leaders
lead? Relate this to the story told above.
The Starbucks Leadership Lab used dramatic effects including lights and music
17–19. Using the behavioral theories as a guideline, what do you think would be
more important to a Starbucks store manager: focus on task, focus on people, or
both? Explain.
17–20. How might a Starbucks store manager use situational leadership theory?
Path-goal theory? Transformational leadership?
Starbucks store managers might use situational leadership theory to provide the
appropriate support for employees depending on their readiness. For new
ADDITIONAL CHAPTER INFORMATION
An excellent topic for discussion is the failure of leadership that has been
witnessed in many corporations in recent years. Have students gather articles on