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Chapter 9

MGHB02H3 Chapter Notes - Chapter 9: Transactional Leadership, Victor Vroom, Contingency Theory

Course Code
Melissa Warner

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Chapter 9 | Leadership
What is Leadership?
oInfluence that particular individuals exert on the goal achievement of others in an
organizational context.
oEffective leadership exerts influence in a way that achieves organizational goals
by enhancing the productivity, innovation, satisfaction, and commitment of the
oLeadership is about motivating people and gaining their commitment.
oEffective leaders change the way people think, feel, and behave and they can have
a positive effect on people in the organization.
Strategic Leadership
oLeadership that involves the ability to anticipate, envision, maintain flexibility,
think strategically, in order to create a viable future for the organization.
oStrategic leaders can provide an organization with a sustainable competitive
advantage by helping their organizations compete in turbulent and unpredictable
environments and by exploiting growth opportunities.
Open and honest in their interactions with the organization’s stakeholders,
and they focus on the future.
In theory, any organizational member can exert influence on other members, thus
engaging in leadership. Some members are in a better position to be leaders than others.
Individuals with titles occupy formal or assigned leadership roles, such as manager,
executive, supervisor, and department heads.
oThe presence of a formal leadership role is no guarantee that there is leadership,
some supervisors fail to exert any influence on others.
oLeadership goes beyond the formal role requirements to influence others.
Individuals might also emerge to occupy informal leadership roles, since informal leaders
do not have formal authority, they must rely on being well liked or being perceived as
highly skilled to exert influence.
Formal Leadership
oIndividuals with titles such as manager, executive, supervisor, and department
head occupy formal or assigned leadership roles.
oThey are expected to influence others, and they are given specific authority to
direct employees.
oSome managers and supervisors fail to exert any influence on others.
oLeadership involves going beyond formal role requirements to influence others.
Informal Leadership
oIndividuals might also emerge to occupy informal leadership roles.
oThey do not have formal authority.
oThey must rely on being well liked or being perceived as highly skilled to exert
Are Leaders Born? The Trait Theory of Leadership
Trait Theory of Leadership
oLeadership depends on the personal qualities or traits of the leader.
oThose who become leaders and do a good job of it possess a special set of traits
that distinguish them from the masses of followers.

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Chapter 9 | Leadership
Individual characteristics such as physical attributes, intellectual ability,
and personality.
Research on leadership has mostly focused on traits associated with
demographics, task competence (intelligence), and interpersonal attributes
Some traits are associated with leadership, such as intelligence, energy and
drive, self-confidence, dominance, motivation to lead, emotional stability,
honesty and integrity, need for achievement, sociability.
Relationship between traits and leadership effectiveness is stronger for
affective and relational measures of effectiveness (satisfaction with the
leader), than for performance related measures.
Limitations of the Trait Theory
oIt is difficult to determine whether traits make the leader or whether the
opportunity for leadership produces the traits.
oDoes not tell us what leaders do to influence others successfully.
oIt does not take into account the situation in which leadership occurs.
oIt can lead to bias and discrimination when it comes to evaluating a leader’s
effectiveness and decisions about promoting people to leadership positions,
because trait approach leads us to believe people are more likely to become leader
or to be a more effective leader due to certain traits.
oTraits alone are not sufficient for successful leadership.
oTraits are only a precondition for certain actions that a leader must take in order to
be successful.
oLeader behaviours have a greater impact on leadership effectiveness than leader
Behaviours of Leaders
The trait approach is mainly concerned with what leaders bring to a group setting.
Limitations of this approach gradually promoted an interest in what leaders do in group
What are the crucial behaviours leaders engage in, and how do these behaviours influence
employee performance and satisfaction?
Is there a particular leadership style that is more effective than other styles?
Consideration and Initiating Structure
oExtent to which a leader is approachable and shows personal concern and respect
for employees.
oThe considerate leader is seen as friendly and egalitarian, expresses appreciation
and support, and is protective of group welfare.
oInitiating Structure
Degree to which a leader concentrates on group goal attainment.
Structuring leader clearly defines and organizes his or her role and the
roles of followers, stresses standard procedures, schedules the work to be
done, and assigns employees to particular tasks.
Consideration and initiating structure are not incompatible; a leader could
be high, low, or average on one or both dimensions.

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Chapter 9 | Leadership
Consequences of Consideration and Structure
Consideration and initiating structure both contribute positively to employees’
motivation, job satisfaction, and leader effectiveness.
Consideration is more strongly related to follower satisfaction, motivation, and leader
Evidence that the relative importance of consideration and initiating structure varies
according to the nature of the leadership situation.
oWhen employees are under high degree of pressure due to deadlines, unclear
tasks, or external threat, initiating structure increases satisfaction and
oWhen the task itself is intrinsically satisfying, the need for high consideration and
high structure is generally reduced.
oWhen the goals and methods of performing the job are very clear and certain,
consideration should promote employee satisfaction, while structure might
promote dissatisfaction.
oWhen employees lack knowledge as to how to perform a job, or the job itself has
vague goals or methods, consideration becomes less important, while initiating
structure takes on additional importance.
Nature of The Situation
oThe effects of consideration and initiating structure depend on characteristics of
the task, the employee, and the setting in which work is performed.
Leader Reward and Punishment Behaviours
Leader Reward Behaviour
oLeaders use of compliments, tangible benefits, and deserved special treatment.
oWhen such rewards are made contingent on performance, employees should
perform at a high level and experience job satisfaction.
Under such leadership, employees have a clear picture of what is expected
of them, and they understand that positive outcomes will occur if they
achieve these expectations.
Leader Punishment Behaviour
oLeaders use of reprimands or unfavourable task assignments and the active
withholding of rewards.
oPunishment is extremely difficult to use effectively and when it is perceived as
random and not contingent on employee behaviour, employees react negatively,
with great dissatisfaction.
oContingent leader reward behaviour is positively related to employees’
perceptions, attitudes, and behaviour.
While contingent leader punishment behaviour is related to more
favourable employee perceptions, attitudes, and behaviour, non-contingent
punishment behaviour is related to unfavourable outcomes.
Relationships are much stronger when rewards and punishment are made
contingent on employee behaviour, which means the manner in which
leaders administer rewards and punishment is a critical determinant of
their effectiveness.
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