The Meaning of Leadership- Chapter 1.docx

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Western University
Management and Organizational Studies
Management and Organizational Studies 1021A/B
Kevin Thompson

The Meaning of Leadership A leader should energize employees, should be personable, and have good negotiating skills. Google search on leadership has 188 million hits Leadership is the ability to inspire confidence and support among other people who are needed to achieve organizational goals. Other representative definitions of leadership are: Interpersonal influence An act of promoting actions Influential increment The art of influencing people by persuasion The principal dynamic force Willingness to take the blame Figuring out what is right Leadership is not only found among people in high-level positions. Leadership is needed at all levels in an organization Change needs to come about from lower-level leaders rather than relying on higher- level leaders. The ability to lead others effectively is rare. The higher the level of leadership in an organization the more difficult and complex it is to effectively lead. Leadership as a Partnership Partnership - The leader and the group members are connected in such a way that the power between them is approximately balanced. The opposite of parenting Occurs when control shifts from the leader to the group member, moves from authoritarianism to decision making. 4 main things for a valid partnership: Exchange of purpose A right to say no Joint accountability Absolute honesty Empowerment and team building are very important. Leadership as a Relationship In the words of popular leadership theorist Ken Blanchard, “Leadership isn’t something you do to people, it’s something you do with them.” Good relationships with group members is a major success factor for the top three positions in large organizations. James Kouzes and Barry Posner’s online survey yielded results saying that 72% of people valued social skills to be more essential to business success and 28% said internet skills. leadership Versus Management The standard conceptualization of the functions of management: Planning, organizing, directing (or leading), and controlling Leading is a major part of the manager’s job, yet a manager must also plan, organize and control. Leadership deals with the interpersonal aspects of a manger’s job, whereas planning, organizing and controlling deal with administrative aspects. Leadership deals with change, inspiration, motivation, and influence. The stereotypes regarding the differences between leadership and management are like most stereotypes, the differences tend to be exaggerated. John P. Kotter says that managers must know how to lead as well as manage. Without this organizations face the threat of extinction. Key distinctions between management and leadership: Effective leaders have to be good managers themselves, or be supported by effective managers. The difference between leadership and management is one of emphasis. Effective leaders also manage, and effective managers also lead. The Impact of Leadership on Organizational Performance A frequent antidote to major organizational problems is to replace the leader in hope that the newly appointed leader will reverse performance problems. The Leader in Action profile provides a positive example of the importance of effective leadership in a professional organization, yet also looks at the other side of the argument. Research and Opinion The idea that leaders actually influence organizational performance and morale is so plausible that there is not an abundance of research and opinion that deals with this issue. An uncertain environment often makes having a strong leader more important. A team of researchers investigated the impact of transactional (routine) and charismatic (inspirational) leadership on financial performance. The results yielded that: Transactional leadership was not significantly related to performance Charismatic leadership showed slight positive relationship with performance When the environment is uncertain, charismatic leadership is more strongly related to performance Another study found that CEO’s influence 15% of the total variance (influencing factors) in a company’s profitability or total return on shareholders. The same study also found that the industry in which a company operates also accounts for 15% of the variance in profitability. Therefore the choice of a CEO leader is as important as the choice whether to remain in the same industry or enter a different one. Successful franchise operators emphasize the importance of enthusiasm, leadership, and an ability to work with other people. Changes in leadership are followed by changes in company performance. The leader may be responsible for 15-45% of a firms performance. The attribution theory, the theory of how explain the causes of events. In efforts to understand organizational events, people interpret these events in simple human terms. One especially strong and prevalent approach is to attribute causality to leaders. According to the attribution theory, most organizational successes are attributed to heroic leaders. Research and Opinion: Formal Leadership Does Not Make a Difference The antileadership argument holds that leadership has a smaller impact on organizational outcomes than do forces in the situation. Three major arguments against the importance of leadership are: Substitutes for leadership Factors in the work environment that provide guidance and incentives to perform, making the leader’s role almost unnecessary. Closely knit teams of highly trained individuals May require almost no leadership at all when focussed on a goal When danger is important these groups rely on each other rather than a leader Traffic directors are a perfect example Intrinsic Satisfaction Employees who are engaged in work they find strongly self-motivating require minimum leadership Employee may require little leadership if the task is proceeding smoothly Many technology firms operate like this The reason being that the task itself grabs the worker’s attention and energy Computer Technology Computers take over the supervisor’s leadership functions The computer provides productivity and quality data, and directions for certain tasks Even error detection and goal setting are incorporated into some interaction systems Professional Norms A group of certified accountants do not need a supervisor to inspire them to do an honest job auditing books and searching for tax fraud Self management by groups and individuals requires delegation by a higher authority. Higher ranking management provide guidance, support, and encouragement. The likeability of the leader and whether the leader provides rewards for good performance were found to be most important Leadership Irrelevance Must be carefully analyzed Factors outside the leader’s control have a larger impact on business outcomes than do leadership actions High-level leaders have unilateral control over only a few resources. The leaders control over these resources is limited by obligations to stakeholders like consumers and stockholders. Firms choose new leaders whose views are compatible with those of the firm Jim Collins states that organizational leaders are slaves of much larger organizational forces He goes on to say that it is not the leaders personality that makes a difference; more important is the organization’s personality In the modern organization effective leadership means widespread collaboration in obtaining ideas, rather than the heroic leader doing all the innovating According to this point of view, instead of centralizing leadership in the hands of a few, authority and power are shared, and people lead themselves. The leader irrelevance argument would have greater practical value if it were recast as a leader constraint theory. The leader constraint theory- which would hold that leaders are constrained in what they can do but still have plenty of room to influence others. Complexity Theory Holds 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 system. Forces outside a leaders or managers control determine a company’s fate Managers cannot predict which business strategies or product mixes will survive Must innovate to adapt to outside forces Ultimately all companies will die but at different times, because it is the system, not leadership and management, that dominates. A crisis mode is an example of a situation in which a strong leader usually makes a difference. Leadership Roles A role in this context is an expected set of activities or behaviors stemming from one’s job. Leadership roles are a subset of the managerial roles studied by Henry Mintzberg and others Here are 9 roles that can be classified as as part of the leadership function: Figurehead - Leaders, high-ranking managers spend some of their time engaging in ceremonial activities Entertaining clients as an official representative of the organization Making oneself available to outsiders as a representative of the organization Serving as an official representative of the organization at gatherings Escorting official visitors Spokesperson - Manager emphasizes on answering letters or inquiries and reporting to individuals outside the manager’s direct organizational unit. Upper-level management Clients or customers Other important outsiders such as labour unions Professional colleagues The general public Dealing with the general public and outside groups is usually the top-level manager’s responsibility. Negotiator - Making deals Bargaining with superiors for funds, facilities, equipment Bargaining with other units in the organization for the use of staff, facilities, equipment Bargaining with suppliers and vendors for services, schedules, and delivery times Coach and Motivator - Need to teach and motivate team members, and sometimes inspire large groups within the organization Informally recognizing team members’ achievements Providing feedback concerning ineffective performance Ensuring team members are informed of steps that can improve performance Implementing rewards and punishments to encourage and sustain good performance Inspiring people by being charismatic, creating visions, being highly ethical Team Builder - Build an effective team Ensure team members are recognized for their accomplishments Initiating activities that contribute to group morale Holding periodic staff meetings to encourage socialization regarding problems, concerns and achievement. Team Player - Related to team builder Displaying appropriate personal conduct Cooperating with other units in the organization Displaying loyalty to superiors by supporting their plans and decisions fully Technical Problem Solver - Help team members solve technical problems Serving as a technical expert or advisor Performing individual contributor tasks on a regular basis, such as making sales calls or repairing machinery Entrepreneur - Managers are responsible for suggesting innovative ideas or furthering the business aspects of the firm Keep up with what is happening in the industry or profession (read trade publications or journals) Talk with customers or others in the organization to keep aware of changing needs and requirements Get involved with situations outside the unit that could suggest ways of improving performance, such as visiting other firms, attending professional meetings Strategic Planner - Top-level managers engage in strategic planning, usually assisted by input of others throughout the organization. Carrying this out allows managers to practice strategic leadership Setting a vision or direction for the organization and providing innovative ideas to pursue Helping the firm deal with the external environment Helping develop organizational policies Managerial leaders in some way inspires or influences others. According to Harvard Business Review: The most basic role for corporate leaders is to release the human spirit that makes initiative, creativity, and entrepreneurship possible. Mangers at every level can exercise leadership The Satisfactions and Frustrations of Being a Leader The preferred term for a person who reports to a leader or manager is team member, group member, or associate Researches, however, continue to use the terms subordinate and follower for technical purposes Satisfactions of Leaders depend on leadership position Factors such as amount of money you are paid and the type of people in your group influence your satisfaction Leaders often experience seven sources of satisfaction: A feeling of power and prestige Automatically grants you some power Prestige is forthcoming because people think highly of leaders A chance to help
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