The Nature and Importance of Leadership
The Meaning of Leadership
Characteristics of leaders: Energizing employees, be a spokesperson for the organization,
be personable, and have good negotiating skills.
Leadership: The ability to inspire confidence and support among the people who are
needed to achieve organizational goals.
Other definitions of leadership:
Interpersonal influence, directed through communication toward goal attainment
Influential increment over and above mechanical compliance with directions and
Act that causes others to act or respond in a shared direction
Art of influencing people by persuasion or example to follow a line of action
Principal dynamic force that motivates and coordinates the organization in the
accomplishment of its objectives
Willingness to take the blame
Figuring out what’s right, then explaining it to people
Leadership is needed at all levels in an organization.
Change needs to come from leaders at lower levels, rather than relying exclusively on
leadership from the top.
The ability to lead others effectively is a rare quality, and is even rarer at the highest
levels in an organization because the complexity of the positions requires a vast range of
Firms in search of new leadership seek out a select group of brand-name executives with
proven track records, and also why companies emphasize leadership T&D to create a new
supply of leaders throughout the firm.
Leadership as a Partnership
A partnership is a long-term relationship between leaders and group members; the
power between them is approximately balanced.
Opposite of parenting and occurs when control shifts from leader to group member.
Empowerment and team building.
4 things are necessary for a valid partnership to exist:
a) Exchange of purpose: every worker is responsible for defining vision and values.
b) A right to say no. A person can lose an argument but never a voice.
c) Joint accountability. Each person is responsible for outcomes and the current
d) Absolute honesty. Not telling the truth is an act of betrayal. With the distribution of
power, people tell the truth because they feel less vulnerable.
Page 1 of 5 Leadership versus Management
Leading is part of a manager’s job, but a manager must also plan, organize, and control.
Leadership deals with the interpersonal aspects of a manager’s job, whereas planning,
organizing, and controlling deal with the administrative aspects.
Produces change and adaptability to new Produces order, consistency, and predictability.
products, markets, competitors, customers, and
Involves having a vision of the future and Manages or maintains organizations.
mobilizing people to accomplish it.
Elicits cooperation and teamwork from people Chooses the means to achieve the end that the
and keeps them motivated. leader formulates.
Deals with change, inspiration, motivation, and
Creates a vision to direct the organization.
The Positive Impact of Leadership on Organizational Performance
Transactional leadership is not significantly related to performance.
Charismatic leadership showed a slight positive relationship with performance.
Given an uncertain environment, charismatic leadership is more strongly related to
A leader is responsible for 15-45% of a firm’s performance.
Likeability of the leader and rewards for good performance are major correlations of
Attribution theory: Theory of how we explain the causes of events.
Most organizational successes are attributed to heroic leaders.
The Negligible Impact of Leadership on Organizational Performance
Substitutes for leadership exist when leadership is of little consequence to the
performance and satisfaction of team members. (e.g. factors in the environment that
provide guidance and incentives to perform, making the leader’s role superfluous)
Closely knit teams of highly trained individuals require minimal leadership.
Intrinsic satisfaction in employees makes them require minimal leadership.
Computer technology is a substitute of leadership.
Professional norms incorporated into workers make them require little leadership.
The substitutes of leadership concept reflect naiveté because self-management requires
delegation by a higher authority that provides guidance, encouragement, and support.
Page 2 of 5 Leadership is irrelevant to most organizational outcomes because factors outside the
leader’s control have a larger impact on outcomes than leadership actions.
High-level leaders have unilateral control over only a few resources, which is further
limited by obligations to stakeholders.
Firms choose new leaders whose values are compatible with those of the firm, who act in
similar ways of previous leaders.
Modern leadership means widespread collaboration in obtaining ideas, rather than the
leader doing all the innovating. ( = shared power and self-leadership)
Greater value as a leadership constraint theory, stating that there are constraints but still
room to influence others.
Complexity theory states that organizations are complex systems that cannot be
explained by the usual rules of nature.
Leaders and managers can do little to alter the course of the complex organizational
Forces outside the leader/manager’s control determine a company’s fate.
Most basic role of corporate l