MOS 1021 HRM Leadership Chapter Summary

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Western University
Management and Organizational Studies
Management and Organizational Studies 1021A/B
James O' Brian

MOS 1021 HRM Leadership Chapter Angela Braly  Energizing employees is part of a leader’s job  An important leadership role is being a spokesperson for the organization  A leader should be personable  A leader should have good negotiating skills The Meaning of Leadership  Leaders’ most common characteristics are ability to inspire & stimulate others to achieve worthwhile goals  Leadership: ability to inspire confidence & support among people needed to achieve organizational goals o Interpersonal influence, directed through communication toward goal attainment o Influential increment above/over mechanical compliance with directions & orders o Act that causes others to act or respond in a shared direction o Art of influencing people by persuasion or example to follow a line of action o Principal dynamic force that motivates & coordinates organization in accomplishment of objectives o Willingness to take the blame (Joe Montana) o Figuring out what’s right & then explaining it to people (Rudy Giuliani)  Not found only among people in high-level positions  Even people not in formal leadership positions can show leadership by taking initiative  Change (improvement) needs to come from initiative & risks of leaders at lower levels  Ability to lead effectively is a rare quality (especially at high levels due to complexity) o Organizations seek select group of top executives & emphasize leadership T&D Leadership as a Partnership  Leadership is a long-term relationship  Partnership: leader & group members are connected so power between them is balanced  Occurs when control shifts from leader to group member (opposite of parenting) o Authoritarianism = shared decision making  Empowerment & team building support partnership o Linked to optimistic view of group members who want to perform well for good of organization  4 things necessary for valid partnership: o Exchange of purpose (every member responsible for defining vision & values) o Right to say no o Joint accountability (every member responsible for success/failure of organization) o Absolute honesty (lying is betrayal, honesty a sign of confidence) Leadership as a Relationship  “Leadership isn’t something you do to people. It’s something you do with them” –Ken Blanchard  Having good relationships with group members is a major success factor for top 3 positions in large organizations  Online survey indicates social skills will be more essential to business success than internet skills (web of people matters more than wed of technology) Leadership VS Management  Functions of management: o Planning o Organizing o Directing/Leading o Controlling  Leadership is only part of a manager’s job (deal with interpersonal aspects)  Leadership deals with change, inspiration, motivation & influence  Managers must know how to lead as well as manage  Distinctions between management & leadership: o Management produces order, consistency & predictability o Leadership produces change & adaptability to new products/markets/competitors/ customers/processes o Leadership involves having a vision of what organization can become & mobilizing people to accomplish it o Leadership requires eliciting cooperation & teamwork from a large network of people & keeping key people in network motivated by using every manner of persuasion o Top-level leaders transform organizations while managers manage/maintain organization o Leader creates vision & manager implements the vision  To extremes: leader is inspirational figure & manager is stodgy bureaucrat  Effective leaders have to be good managers themselves or be supported by effective managers  Difference between leadership & management is one of emphasis The Impact of Leadership on Organizational Performance  Research & Opinion: Leadership Does Make a Difference o Not much research & opinion since idea is widely held as plausible o Study of impact of leadership styles on financial performance in Fortune 500 firms  Transactional (routine) leadership was not significantly related to performance  Charismatic (inspirational) leadership shows slight positive relationship with performance  When environment is uncertain, charismatic leadership is more strongly related to performance o Another study found that CEOs influence 15% of total variance (influencing factors) in a company’s profitability or total return to shareholders  Industry also accounts for 15% of variance (CEOs just as important) o Franchises emphasize enthusiasm, leadership & ability to work with people o Consistent relationship found between who is in charge & how well organization performs  Changes in leadership are followed by changes in company performance o Statistical analysis suggests leaders are responsible for 15-45% of firm’s performance o Good results attained by developing teamwork & formulating right strategy o Attribution theory: in their efforts to understand & simplify organizational events, people interpret & attribute cause of these events in simple human terms  Ie. Heroic leaders are the cause of success  Research & Opinion: Formal Leadership Does Not Make a Difference o Leadership has smaller impact on organizational outcomes than forces in situation o Substitutes for leadership: leadership itself is of little consequence & substitutes are factors in work environment that provide guidance & incentives to perform  Close knit teams of highly trained individuals (directive leadership not needed)  Intrinsic satisfaction (task itself motivates workers)  Computer technology (monitor workers & provide feedback – control function)  Professional norms (don’t need visionary leadership to encourage honesty etc.)  Substitution concept reflects naiveté about role of organizational leadership since self-management requires delegation by higher authority (leaders)  Study found likeability of leader & rewards system to be major correlates of performance o Leadership irrelevance: factors outside leader’s control have larger impact on business outcomes than leadership actions  Ie cellphone usage surge  High-level leaders have unilateral control over only a few resources (limited by obligations to stakeholders)  Firms tend to choose similar leaders (match company values but no new ideas)  Corporate leaders are slaves of larger organizational forces (causation illusion)  It is the organization’s, not the leader’s personality that makes a difference  Effective leadership means widespread collaboration rather than heroic leader doing all innovating  Leader irrelevance argument has greater practical value as leader constraint theory (leaders are limited in power but can still influence others) o Complexity theory: organizations are complex systems that cannot be explained by rules of nature  Leaders & managers do little to alter course of complex organizational systems  Managers cannot predict/control successful strategies, only innovate to adapt  Under what conditions do leaders make a difference? (ie. crisis mode) Leadership Roles (Mintzberg)  Figurehead (particularly for high-ranking managers) o Entertaining clients or customers as an official representative of the organization o Making oneself available to outsiders as a representative of the organization o Serving as official representative of organization at gatherings outside organization o Escorting official visitors  Spokesperson o Emphasis on answering letters or inquiries & formally reporting to individuals & groups outside managers direct organizational unit o Informs stakeholders about organizational unit’s activities, plans, capabilities and possibilities (vision) o Dealing with outside groups & general public responsibility of top-level managers  Negotiator o Make deals with others for needed resources  Bargaining with superiors for funds
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