Question: Drawing on four Theories of Leadership (Not including Trait or Behavioural Theories

of Leadership), discuss the effect of leadership on individual and organisational outcomes.

Leadership is the ability to influence a group towards the achievement of goals (Robbins).
Leadership may be formal or informal, in other words some people in an organisation assume
leadership because of authority delegated by their position in the firm, the prime example being
managers. However not all leaders in a firm are managers, some individuals have the ability to
influence peers to achieve outcomes outside the formal structure of the firm. For instance leaders
may emerge from a group or team in the organisation and this individual may have the capability
to influence others thereby influencing organisational outcomes. Several theories of leadership
are existence, this essay will focus on four of these theories including the Fiedler Model,
Situational Leadership Theory, Leader-Member Exchange Theory and Path-Goal Theory.
The Fiedler Model was one of the first comprehensive contingency models. Its
main rationale is that effective groups depend upon a proper match between a leaders style of
interacting with subordinates and the degree to which the situation gives control to the leader.
Therefore according to this model a key aspect in leadership success is the individuals basic
leadership style. Hence if leadership effectiveness is to be measured leadership style must be
identified. For this Fiedler created the Least Preferred Co-worker (LPC) questionnaire, this
questionnaire measured an individuals tendency towards task orientation or relationship
orientation. The scale used various contradicting descriptions of people such as:
Efficient vs inefficient, open vs guarded, unpleasant vs pleasant, these adjectives were to be
given a rank on a scale of 1-8. Individuals were then asked to rank the employee they least
enjoyed working with based on these adjectives. Fiedler rationalized that if a person rated the

employee they least enjoyed working with in favourable terms (High LPC score) they were a
relationship-oriented manager whereas if rated in unfavourable terms (Low LPC score) it is
likely that that person is concerned with performance and therefore a task-oriented manager. It
should be noted that Fiedler classified individuals as either task-oriented or relationship-oriented,
he did not account for individuals who did not rank employees as either high or low but midscale therefore they fall out of the theorys predictions. Therefore Fiedler assumes leadership
style in individuals is not variable, hence in situations there is usually one best fit in terms of
leadership style. Thus if there is a conflict in leadership style and the situation one factor must be
altered (the style or the situation) in order to be effective. Therefore another fundamental factor
in Fiedlers model is assessing the situation, as it is necessary to match the leader with the
situation. He outlines three situational factors that determine leadership effectiveness these
include:
1. Leader-member relations, this is the degree of trust, respect and confidence members
have for the leader.
2. Task Structure, this is the degree to which job tasks are structured
3. Position Power, this is the degree of influence a leader has over variables such as salary,
hiring, firing, discipline, promotions and so on
Based on these contingency variables the situation could be evaluated, subsequently matching
leaders with the situation based on results. Because there are 3 contingency variables, there are 8
possible outcomes in the model however this was later cut to three. Task-oriented leaders
perform best in situations of high and low control, while relationship-oriented leaders perform
best in moderate control situations. Therefore to conclude there are only two ways in which to
improve a leaders effectiveness, either change the leader to fit the situation or change the
situation to suit the leader. It is clear that if there is a mismatch between leadership style and the

situation organisational performance will decline as well as individual performance. This will be
because of incompatibility between the leaders style and the members attitude to leaders based
on the situation. Thus in order to improve organisational performance and employee satisfaction
the leadership style must always match the situation or vice versa.
Another theory of leadership is Hersey and Blanchards Situational Theory also termed
Situational Leadership Theory (SLT). This is a contingency theory that focuses on the
followers. Successful leadership is achieved by selecting the right leadership style, which is
contingent on the level of the followers readiness. Readiness refers to the extent to which
people have the ability and willingness to accomplish a specific task. The SLT theory places an
emphasis on the dimension of followers as it relates to leadership, it is an aspect often
overlooked since any accomplishment of the leader is dependent on his followers effectiveness.
Thus it emphasizes the fact that it is the followers who either accept or reject the leader. SLT
dictates that as followers become more mature and competent control should be relinquished,
similar to the relationship between parent and child. The model outlines four leadership styles
ranging from highly directive to highly laissez-faire. These specific leadership styles will now be
listed along with the characteristics of each:
1. Telling
Characterized by one way communication
Leader defines the roles of the individual or group and provides strict outlines on
how to perform tasks.
2. Selling
Leader still provides the direction on how tasks should be accomplished, however

uses two-way communication to interact with group.

The leader sells his leadership through persuasion and support so members buy
into the process.

Therefore the selling leadership style uses both task orientation and relationship

orientation to influence individuals

3. Participating
Shared decision making on how tasks should be accomplished, hence the leader is
less directive on how tasks should be performed.
Maintains high relationship behaviour. (Relationship-orientation)
4. Delegating
Leader is still involved in decisions however the process and responsibility is
passed on to the individual or group. Leader stays involved to monitor progress.
Additionally similar to Fiedlers Model, Situational Leadership Theory deems these leadership
styles appropriate on a situational basis. The situations in SLT theory are based on readiness to
task behaviour. Readiness is classified into four maturity levels:
1.
2.
3.
4.

M1 unable and unwilling

M2- Unable and wiling
M3- Able and unwilling
M4- Able and willing

The theory outlines guideless or suitable leadership styles based on the maturity levels above:
1. M1 A telling style is recommended, leader needs to give clear and specific directions as
workers at this level require direction and clear instructions to get tasks done.
2. M2- A selling style is recommended, leader needs to display high task-orientation and
relationship orientation to guide willing workers that lack competency in the task.
3. M3- A participating style is recommended, leader needs to provide support and
participation to drive unwilling workers.
4. M4 A delegating style is recommended, workers are competent and only slight
involvement is required by the leader.
To evaluate, SLT builds on the logic that leaders can compensate for ability and motivational
limitations of their followers. However like Fiedlers theory this can only be done by making
adjustments to the leadership style or the situation. It suggests that leaders can influence
organisational outcomes by applying certain methods based on the attitudes, behaviours and

actions of leaders to increase their motivation and productivity. Some followers need to be
told exactly what to do while others only need slight guidance and so on. Incompatibilities
between leader and situation could worsen the situation and lead to further demotivation and
unproductivity. For instance a participative leadership style combined with followers who are
at Maturity level 1 (Unable and Unwilling) would result in very little productivity as these
workers require clear guidelines on how to achieve a task.
The Leader-Member Exchange Theory is based on the fact that leaders do not treat each
individual the same way. It rationalizes that, leaders create in-groups and out-groups, and
subordinates within the in-group status will have higher performance ratings, less turnover,
and greater satisfaction with their superior. Research shows that the in or out relationship
is relatively stable over time, evidence suggests that leaders chooses who is in the in group
based on competency, attitude and personality traits which are similar to the leader himself.
Studies into this theory indeed show that members of the in-group have higher performance
ratings, lower turnover intentions, greater satisfaction with their superiors and higher overall
satisfaction than the out-group. This contingency theory is closely related to the concept os
self-fulfilling prophesy as leaders invest the most resources with those individuals they
expect to perform best, in addition preferential treatment and the general feeling of being
thought of as highly competent inspires individuals which reaps the reward of fulfilling that
prophesy . In other words by inspiring confidence in particular individuals through leader
belief it is returned in the productivity and high performance by these individuals. Therefore
according to the Leader-Member Exchange Theory performance, satisfaction and motivation
are all factors influenced by leaders attitude towards followers. Individuals who are in the
group thought of highly by the leader will receive preferential treatment and these individuals

are likely as a result to be highly motivated, have lower turnover intentions, satisfied with
their leader and the job itself and consequently be highly productive. On the other hand
workers who are not in the in-group will not feel the confidence of the manager as much as
those in the in-group as a result they will be less productive, satisfied and motivated.
However it does not suggest that these followers will be demotivated, this may depend on the
individual and their attitude to being in the out-group.
The fourth theory analysed is the Path-Goal Theory which was developed by
Robert House. The theory states that a leaders behaviour is contingent to the satisfaction,
motivation and performance of his subordinates. The leaders engages in behaviours that
complement subordinates abilities and compensates for deficiencies. The term path-goal is
derived from the belief that effective leaders clarify the path to help their followers and to
reduce roadblocks. There are also 4 leadership behaviours in the path-goal theory, the
directive leader, the supportive leader, the participative leader and the achievement-oriented
leader. The directive leader gives specific directions on how tasks are to be performed. The
supportive leader is friendly and shows concern for the needs of followers. The participative
leader consults with followers and uses their suggestions before making a decision. Finally
the achievement-oriented leader sets challenging goals and expects followers to perform at
their highest level. One key assumption of the path-goal theory is that leaders are flexible and
can adjust behaviours to suit the situation, this contradicts the Fiedler Model. The path-goal
theory outline two contingency variables which determine the situation:
1. Environmental contingency factors
Task structure
Formal authority system
Work group
2. Subordinate contingency factors
Locus of control

Experience
Perceived ability

Environmental factors determine the type of leader behaviour required to complement the
members to maximise outcomes of performance and satisfaction whereas Subordinate factors or
personal factors determine how the leaders behaviour will be interpreted by members along with
the environment. Like Fiedlers Theory and Situational Theory the situation must be matched
with the appropriate leadership style in order to achieve desired outcomes of satisfaction and
performance. For example Supportive leadership results in high employee performance and
satisfaction when employees are performing structured tasks. Leadership behaviour that is
incompatible with environmental factors and employee characteristics will be ineffective and
may result in decreased performance and satisfaction. For example directive leadership will have
a negative effect on employees who have a strong perceived ability in themselves and may lead
to dissatisfaction and decreased performance as these individuals may view this style as
insulting. Thus leaders must adjust their leadership style to compensate for characteristics that
may be lacking or already present in either the employee or work setting in order to achieve
maximum performance.