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Today we will discuss the role of leadership in the organizations. The face of leadership is changing in

business today. In addition to influencing subordinates to achieve desired objectives, today’s managers

must make quicker, more accurate decisions in a consensus building and teamwork environment. Leaders

fill many roles simultaneously. Leaders not only influence others to achieve desired goals, they interact with

and motivate subordinates, and deal with conflict and any other issues that may arise.

A. Leadership

Leadership is a process where Leader/Person, who influences individuals and groups in an organization,

helps them establish goals, guides them toward achievement of those goals, and allows them to be effective

as a result.

Leaders fill many roles simultaneously. Leaders not only influence others to achieve desired goals, they

interact with and motivate subordinates, and deal with conflict and any other issues that may arise.

How Leaders Provide a Vision: To be effective, leaders must provide a vision that is a general statement

of the organization’s intended direction that evokes positive emotional feelings in organization members.

I. The Foundations and Traits of Leadership

a. The Leader’s Traits: Researchers have studied the traits of successful leaders for many years in

an effort to identify a set of core traits that would predict success as a leader. Recent research

indicates that there are certain core traits that significantly contribute to success for a business

leader. These include drive, the desire to lead, honesty/integrity, self-confidence, cognitive ability

and knowledge of the business.

b. The Leader’s Behavior

How Leaders Act Like Leaders: Leadership studies that focus on how the leader’s style is related to

his/her effectiveness as a leader all focus on what the leader does and how he/she behaves in trying to

influence followers. These studies also focus on the two major functions of leaders—accomplishing the task

and satisfying the needs of group members.

Initiating Structure and Consideration: Initiating structure and consideration have been two of the most

frequently used descriptions of leader behavior. These concepts evolved from the Ohio State University

leadership studies. Initiating structure is leader behavior whereby the person organizes work to be done and

defines relationships or roles, the channels of communication, and ways of getting jobs done. Consideration

is leader behavior indicative of mutual trust, friendship, support, respect, and warmth. In most situations,

considerate leaders will have more satisfied subordinates, but the effects of such considerate leadership on

employee performance are inconsistent. The effects of initiating structure are also inconsistent with respect

to performance and satisfaction.

Participative and Autocratic Styles: Leaders can act in either a participative or autocratic style. Autocratic

leaders solve problems and make decisions by themselves based upon information available at the time.

Participative leaders share the problem with subordinates as a group, and together, they generate and

evaluate alternatives and attempt to reach consensus on a solution.

Transformational Leadership Behavior: Transformational leaders encourage and obtain performance

beyond expectations by formulating visions, inspiring their subordinates to pursue them, cultivating

employee acceptance and commitment to their visions, and providing their employees with the big picture.

Transformational leaders are perceived as charismatic, inspirational, considerate, and stimulating. On the

other hand, leaders who exhibit transactional behaviors are more focused on accomplishing the task at hand

and maintaining good working relations with subordinates by rewarding for performance.

Are There Gender Differences in Leadership Styles? Research suggests that there are few differences in

the way men and women lead. The slower career progression for women can be better accounted for by

institutional biases and inaccurate stereotypes of women managers. It has been found that men and women

perform at about the same level. Women managers have been found to be more achievement oriented,

understanding, patient, relationship oriented, socially sensitive, and communicative than men.

c. Situational Theories of Leadership

Fiedler’s Contingency Theory of Leadership: Fiedler used a least preferred coworker (LPC) scale to

measure whether a leader who was lenient in evaluating associates he/she least liked working with was

more likely or less likely to have a high-producing group than the leader who was demanding and

discriminating. Three factors combine to determine which leadership style is more appropriate: position

power, task structure, and leader-member relations. Fiedler concluded that if the situation is favorable or

unfavorable to the leader, a more task-oriented, low-LPC leader is appropriate. In the middle range

where the factors are more mixed, a more people-oriented, high-LPC leader is more appropriate. Recent

research findings cast doubt on the validity of these conclusions.

Path-Goal Leadership Theory: Path-goal theory of leadership, developed by House, is based upon

expectancy theory, which states whether a person will be motivated depends on whether the person

believes he/she has the ability to accomplish a task and his/her desire to do so. The theory concludes that

leaders should increase the personal rewards subordinates receive for attaining goals and make the path to

these goals easier to follow. The leadership style required depends upon the situation, so the leader must

be flexible and adopt the style that is required.

Leader-Member Exchange Theory: Leader-member exchange theory (LMX) says that leaders may use

different styles with different members of the same work group. Followers tend to fall in either the ingroup

or the out-group in relating to the leader. The quality of leader-member exchanges was positively

related to a leader’s perception of the follower’s similar attitudes and extroversion. The findings suggest

that leaders should try to make the in-group more inclusive, and followers should try to be in the leader’s

in-group by emphasizing similarity in attitudes.

The Situational Leadership Model: The situational leadership model of leadership suggests that a leader

should adapt his/her leadership style (delegating, participating, selling, or telling) to the task.

The Vroom-Jago-Yetton Model: Vroom, Jago, and Yetton have developed a leadership

model that enables a leader to analyze a situation and decide whether it is right for

participation. The technique includes a set of management decision styles, a set of

diagnostic questions, and a decision tree for identifying how much participation is called

for in a situation.

II. Power and Leadership

Leaders without power are really not leaders because they have no chance of influencing anyone to do

anything. Leaders in organizations normally derive much of their power from their formal position and the

ability to allocate rewards. In some cases, leaders may have expert or referent power depending upon their

individual characteristics.

III. Becoming a Leader

Start to think Like a Leader: Thinking like a leader requires applying the three-step model: identify what

is happening; account for it; and decide on the necessary leadership actions. And remember that leading

requires knowledge of matters other than leadership theories (e.g., culture, motivation, groups, conflict, and

change) to influence followers to move toward goals.

Develop Your Judgment: Leaders can improve their judgment or decision-making ability by increasing

their knowledge, debasing their judgment, being creative, using intuition, not overstressing the finality of

decisions, and making sure the timing of a decision is right.

Develop Your Other Leadership Traits: Leaders can use good judgment, exhibit self-confidence, and

improve their knowledge of the business to improve their effectiveness.

Start to Build Your Power Base: Leaders can strengthen the foundation of their leadership by making

sure followers share their vision, adapting their leadership style and actions to the situation, substituting

other management skills to help them lead by choosing the right followers, and organizing the task properly

to reduce the need for leadership.

Help Others Share Your Vision: Ensuring that your subordinates know and understand your vision,

mission, and objectives can help the leader influence the subordinates to work enthusiastically toward

achieving an objective.

Adapt Your Style and Actions to the Situation: No one leadership style is appropriate for every


Use Your Other Management Skills to Lead: Leaderships should choose the right followers and

organize the task properly.

B. Building Trust: The Essence of Leadership

I. Understanding Trust

Trust is a positive expectation that another will not act opportunistically. The two most important elements

of our definition are that it implies familiarity and risk. Trust is a history-dependent process based on

relevant but limited samples of experience. It takes time to form, building incrementally and accumulating, it

involves making oneself vulnerable. By its very nature, trust provides the opportunity for disappointment.

But trust is not taking risk per se; rather it is a willingness to take risk. Recent evidence has identified five:

integrity, competence, consistency, loyalty, and openness. Integrity refers to honesty, conscientiousness, and

truthfulness. This one seems to be most critical when someone assesses another's trustworthiness.

Competence encompasses an individual's technical and interpersonal knowledge and skills. Consistency

relates to an individual's reliability, predictability, and good judgment in handling situations. Loyalty is the

willingness to protect and save face for another person. The final dimension of trust is openness.

II. Trust as One Foundation of Leadership

1. Trust appears to be a primary attribute associated with leadership.

2. Part of the leader's task has been working

with people to find and solve problems,

but whether leaders gain access to the

knowledge and creative thinking they

need to solve problems depends on how

much people trust them.

3. When followers trust a leader, they are

willing to be vulnerable to the leader's


4. Honesty consistently ranks at the top of

most people's list of characteristics they

admire in their leaders.

5. Now, more than ever, managerial and

leadership effectiveness depends on the

ability to gain the trust of followers.

6. In times of change and instability, people

turn to personal relationships for

guidance; and the quality of these relationships are largely determined by level of trust.

7. Moreover, contemporary management practices such as empowerment and the use of work

teams require trust to be effective.

III. Types of Trust

Deterrence-based Trust: The most fragile relationships are contained in deterrence-based trust,

based on fear of reprisal if the trust is violated. It works only to the degree that punishment is

possible, consequences are clear, and the punishment is actually imposed if the trust is violated. To

be sustained, the potential loss of future interaction with the other party must outweigh the profit

potential that comes from violating expectations. Most new relationships begin on a base of

deterrence. In a new manager-employee relationship the bond that creates this trust lies in the

authority held by the boss and the punishment he/she can impose.

Knowledge-based Trust: Most organizational relationships are rooted in knowledge-based trust.

Trust is based on the behavioral predictability that comes from a history of interaction. Knowledge

of the other party and predictability of his or her behavior replaces the contracts, penalties, and

legal arrangements more typical of deterrence-based trust. This knowledge develops over time,

largely as a function of experience. The more communication and regular interaction you have with

someone else, the more this form of trust can be developed and depended upon. Interestingly, at

the knowledge-based level, trust is not necessarily broken by inconsistent behavior. If you can

adequately explain or understand another's apparent violation, you can accept it, forgive the person,

and move on in the relationship. Most manager-employee relationships are knowledge-based.

Identification-based Trust: The highest level of trust is achieved when there is an emotional

connection between the parties. It allows one party to act as an agent for the other and substitute

for that person. This mutual understanding is developed to the point that each can effectively act

for the other. Controls are minimal at this level. The best example of identification-based trust is a

long-term, happily married couple. You see identification-based trust occasionally in organizations

among people who have worked together for long periods of time and have a depth of experience

that allows them to know each other inside and out. This is also the type of trust that managers

ideally seek in teams.


Leadership Leadership is a process where Leader/Person who influences individuals and groups in an


Trust Trust is a positive expectation that another will not act opportunistically.

Vision Vision that is a general statement of the organization’s intended direction that evokes

positive emotional feelings in organization members.

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