The Meaning of Leadership
A leader should energize employees, should be personable, and have good negotiating
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:
An act of promoting actions
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-
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
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
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
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
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
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
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
According to the attribution theory, most organizational successes are attributed to
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
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
Computers take over the supervisor’s leadership functions
The computer provides productivity and quality data, and directions for
Even error detection and goal setting are incorporated into some
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 ranking management provide guidance, support, and
The likeability of the leader and whether the leader provides rewards for
good performance were found to be most important
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
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.
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
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 role in this context is an expected set of activities or behaviors stemming from one’s
Leadership roles are a subset of the managerial roles studied by Henry Mintzberg and
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
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.
Clients or customers
Other important outsiders such as labour unions
The general public
Dealing with the general public and outside groups is usually the top-level
Negotiator - Making deals
Bargaining with superiors for funds, facilities, equipment
Bargaining with other units in the organization for the use of staff, facilities,
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
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
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
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
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