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Part 4 Leadership Challenges in the 21st Century

Chapter
12
Leading in a
Dynamic
Environment

PowerPoint Presentation by Charlie Cook


The University of West Alabama
© 2007 Thomson/South-Western. All rights reserved.
Leadership Significance
• Leadership is:
 A social influence process.

 A responsibility and a process; it’s not a position, title,


or privilege.
 An observable, understandable, learnable set of skills
and practices available to everyone, anywhere in the
organization.
 The indirect ability to influence people by inspiring
them to pursue goals for the benefit of the
organization.

© 2007 Thomson/South-Western. All rights reserved. 12–2


Leadership and Vision
• Leadership involves:
 Creating a vision of the future.

 Devising strategy for achieve that vision.

 Communicating the vision so that everyone


understands and believes in it.

© 2007 Thomson/South-Western. All rights reserved. 12–3


Leader-Centered Approaches
• Leadership Traits and Skills Focus
 The assumption that some people are born with
certain physical characteristics, aspects of
personality, and aptitudes that make them successful
leaders.
 Physical characteristics: height and appearance
 Personality: self-esteem, dominance and emotional
stability
 Aptitudes: general intelligence, verbal fluency and
creativity

© 2007 Thomson/South-Western. All rights reserved. 12–4


Traits of Successful Leaders
• Drive
 Achievement, sense of responsibility, ambition,
energy, tenacity and initiative.
• Motivation
 Especially power.
• Honesty and integrity
• Self confidence
 Persuasive, diplomatic and socially skilled.
• Conceptual ability
• Business knowledge

© 2007 Thomson/South-Western. All rights reserved. 12–5


Table 12.1 The 25 Most Influential Leaders of Our Times

To celebrate the 25th anniversary of the Nightly Business Report (NBR), Wharton and NBR worked
to identify the 25 most influential business leaders of the past 25 years. Their goal was to find
business leaders who created new and profitable ideas; affected political, civic or social change
through achievement in the business/economic world; created new business opportunities or more
fully exploited existing ones; caused or influenced dramatic change in a company or industry;
and/or inspired and transformed others.

1. Mary Kay Ash, founder of Mary Kay Cosmetics 1. Lee Iacocca, former CEO of Chrysler
2. Jeff Bezos, CEO of Amazon.com 2. Steven Jobs, CEO of Apple Computers
3. John Bogle, founder of The Vanguard Group 3. Herb Kelleher, CEO of Southwest Airlines
4. Richard Branson, CEO of Virgin Group 4. Peter Lynch, former manager of Fidelity’s Magellan
Fund
5. Warren Buffett, CEO of Berkshire Hathaway
5. Charles Schwab, founder of Charles Schwab Inc.
6. James Burke, former CEO of Johnson & Johnson
6. Frederick Smith, CEO of Federal Express
7. Michael Dell, CEO of Dell Computers
7. George Soros, founder and chair of Open Society
8. Peter Drucker, educator and author
Institute
9. Bill Gates, chair of Microsoft
8. Ted Turner, founder of CNN
10. William George, former CEO of Medtronics
9. Sam Walton, founder of Wal-Mart
11. Louis Gerstner, former CEO of IBM
10. Jack Welch, former CEO of General Electric
12. Alan Greenspan, chair, U.S. Federal Reserve
11. Oprah Winfrey, chair of the Harpo group of
13. Andy Grove, former chair of Intel companies
12. Mohammed Yunus, founder of Grameen Bank.

© 2007 Thomson/South-Western. All rights reserved. 12–6


Leader-Centered Approaches (cont’d)
• Leadership Behavior Focus
 Examines what effective leaders do rather than what
effective leaders are.
 Defines a leader’s effectiveness based on two
orientations:
 Task orientation
– Setting performance goals, planning and scheduling work,
coordinating activities, giving directions, setting standards,
providing resources, and supervising performance.
 Relations orientation
– Behavior that shows empathy for concerns and feelings,
supportive of needs, showing trust, and similar attributes.

© 2007 Thomson/South-Western. All rights reserved. 12–7


Leader-Centered Approaches (cont’d)
• Leadership Power Focus
 Power: the ability to use human, informational, or
material resources to get something done—to get
results.
 Authority: the officially (organizationally) sanctioned
right to get something done.

© 2007 Thomson/South-Western. All rights reserved. 12–8


Power
• Categories of Power
 Position power
 Power
derived from the
opportunities inherent in a
person’s position in an
organization.
 Personal power
 Power derived from the
interpersonal relationships
between leaders and followers.

© 2007 Thomson/South-Western. All rights reserved. 12–9


Types of Position Power
• Legitimate power
 Stems from formal authority.
• Coercive power
 The power to discipline, punish
and withhold rewards.
• Reward power
 Control over tangible benefits.
• Information power
 Control over information.

© 2007 Thomson/South-Western. All rights reserved. 12–10


Types of Personal Power
• Expert power
 The power influence another person because of
expert knowledge and competence.
• Referent power
 The ability to influence others
based on personal liking,
charisma and reputation.

© 2007 Thomson/South-Western. All rights reserved. 12–11


Power Orientation
• Personalized Power Orientation
 Associated with a strong need for esteem and status;
power is often used impulsively.
• Socialized Power Orientation
 The use of power for the benefit of others to make
subordinates feel strong and responsible.

© 2007 Thomson/South-Western. All rights reserved. 12–12


Follower-Centered Approaches
• Self-leadership (Followership) Focus
 A paradigm founded on creating an organization of
leaders who are ready to lead themselves.
 Requires each employee to be accountable for his or
her own behavior.
 Views individual, task and organizational
characteristics as possible leadership substitutes.

© 2007 Thomson/South-Western. All rights reserved. 12–13


Characteristics of Self-Leaders
• The capacity to motivate themselves and stay focused
on tasks.
• Integrity that demands both loyalty to the organization
and the willingness to act according to beliefs.
• Understanding of the organization and their contributions
to it.
• Willingness to take the initiative to deal with problems.
• Versatility, skillfulness and flexibility to adapt to a
changing environment.
• Responsibility for their careers, actions and
development.

© 2007 Thomson/South-Western. All rights reserved. 12–14


Figure 12.3 Leadership Substitutes

© 2007 Thomson/South-Western. All rights reserved. 12–15


Interactive Approaches
• Another method of examining leadership
effectiveness is to look at how leaders interact
with their followers.
• Interactive Approaches:
 Situational leadership model

 Empowerment

 Transformational leadership

© 2007 Thomson/South-Western. All rights reserved. 12–16


Interactive Approaches (cont’d)
• Situational Leadership Model
 Examines the interaction between leadership
behavior, the situation, and the follower’s readiness.
 Readiness: the extent to which a subordinate
possesses the ability and willingness to complete a
specific task.
 Task behavior: the extent to which a leader
organizes and defines the role of followers by
explaining what each person must do and when,
where, and how tasks are to be accomplished.

© 2007 Thomson/South-Western. All rights reserved. 12–17


Interactive Approaches (cont’d)
• Styles of Situational Leadership Behavior
 Telling style: the leader provides specific instructions
and closely supervises performance.
 Selling style: the leader explains decisions and
provides opportunities for clarification.
 Participating style: the leader shares ideas and
maintains two-way communication to encourage and
support the skills subordinates have developed.
 Delegating style: the leader provides subordinates
with few task or relations behaviors.

© 2007 Thomson/South-Western. All rights reserved. 12–18


Interactive Approaches (cont’d)
• Empowerment
 The interaction of the leader giving away or sharing
power with those who use it to become involved and
committed to independent, high-quality performance.
 Successful empowerment means that everyone has
been convinced that he or she makes a difference to
the success of the organization.

© 2007 Thomson/South-Western. All rights reserved. 12–19


Interactive Approaches (cont’d)
• Transformational Leadership
 Is a leader’s ability to influence employees to achieve
more than was originally expected, or thought
possible.
 Generates feelings of trust, admiration, loyalty and
respect from followers through:
 Idealized influence
 Inspirational motivation
 Intellectual stimulation
 Individualized considerations

© 2007 Thomson/South-Western. All rights reserved. 12–20


Table 12.2 Primary Dimensions of Transformational Leadership

Dimension Leader’s Specific Behavior Follower’s Behavior

Individualized Acts as mentor; is attentive to Is motivated; feels valued.


consideration achievement and growth needs.

Intellectual Promotes innovation and creativity; Is encouraged to be novel


stimulation reframes problems. and try new approaches.

Inspirational Provides meaning and challenge Is motivated by team spirit;


motivation through prosocial, collective action. enthusiastic; optimistic.

Idealized Shares risks; is considerate of Shows admiration; respect;


influence others over own needs; is ethical trust.
and moral.

© 2007 Thomson/South-Western. All rights reserved. 12–21


Current Perspectives on Leadership
• Emotional Intelligence (EI)
 The capacity to effectively manage ourselves and our
relationships.
 Components of EI:
 Personal competence: the ability to understand
your own feelings, emotions, and their impact and
to understand your strengths and weaknesses
(based on the concept of self-awareness).
 Social competence: the ability to understand what
others are feeling (the concept of social
awareness) and having the skills to work effectively
with others (based on social skill).

© 2007 Thomson/South-Western. All rights reserved. 12–22


Table 12.3 The Emotional Intelligence Competency Framework

Personal Competence Social Competence


Self-management Social awareness
Self-control Empathy and insight
Trustworthiness Political awareness
Conscientiousness Service orientation
Adaptability Social skill
Achievement orientation Developing others
Initiative Visionary leadership
Self-awareness Influence
Emotional self-awareness Communication
Accurate self-assessment Change catalyst
Self-confidence Conflict management
Building bonds
Teamwork and collaboration
Synergy in teamwork
Sources: D. Goleman, R. Boyatzis, and A. McKee, Primal Leadership: Realizing the Power of Emotional Intelligence (Boston: Harvard
Business School Press, 2003); D. Goleman “Leadership That Gets Results,” Harvard Business Review (March/April 2000): 78–90.
© 2007 Thomson/South-Western. All rights reserved. 12–23
Current Perspectives on Leadership
(cont’d)
• Gender and Leadership
 Female leaders are more empathic, persuasive,
better listeners and more willing to consider others’
points of view.
 Male leaders show higher levels of resilience and
thoroughness than women leaders.
 Both men and women executives believe that women
have to be exceptional to succeed in business.
 Women leaders feel they must struggle harder than
men to succeed.
 Women are more likely to use behaviors that are
associated with transformational leadership.
© 2007 Thomson/South-Western. All rights reserved. 12–24