Definition

Leadership is the ability of an

individual to influence, motivate, and
enable others to contribute toward the
effectiveness and success of the
organizations of which they are
members.
 Leadership is different from
Management
 Management follows leadership,
not vice-versa
 Management maintains;
leadership drives, inspires,
energizes
 Leadership sets vision; management implements it
 Management tends toward mechanical, linear, &
technical approaches; leadership tends toward
creativity, flexibility & adaptiveness
WHAT CHALLENGES OUR LEADERSHIP?

EFFECTIVENESS
Achieving our goals;
doing things well

KEY
CHALLENGES IN
LEADERSHIP
ETHICS AVAILABILITY
Doing things Willingness &
morally; doing readiness to lead;
good things doing things with
commitment
 The complexity of context
 Persistence of global problems:
poverty, natural calamities, environment,
terrorism, ethno-religious conflicts
 Rapid changes: technology,
knowledge & information,
communications, media
 Globalization vis-à-vis localization:
business, livelihood, health, population
 COMPLEXITY AT DIFFERENT
LEVELS
Leader’s CONTEXT AND ENVIRONMENT

Leader’s Leader’s RELATIONSHIP

SELF WITH
FOLLOWERS
 The complexity of context
 Turbulence, chaos: magnitude of
problems
 More difficult to predict, control
 Ambiguity & uncertainty
 Tensions & contradictions
 Plurality of meanings &
interpretations of reality & truth
 The “unconscious” in organizations
 The complexity of leader’s self
 The psychology of leaders: needs,
motivations, drives, impulses, fears,
emotions; conscious and unconscious
 Leader’s “inner theater”/
backstage vis-à-vis
outward / onstage behavior
 Leader’s exposure to power
and public attention
 Traditional Issues in
Leadership
Power Trust

Managing
Conflict

Trouble
Shooting Motivation
 Traditional Issues in
Leadership

Setting Dealing
goals with
external
Coaching agencies

Lone Delayed
decision decision
making making
 Contemporary Issues

Out of the Leading by

box example
thinking
Setting Globalisation
Goals

Changing
group Technology
dynamics
Contemporary Issues

Quick Dealing with

decision change &
making uncertainty

Mentoring
Recruiting Ethical
& retaining Behaviour
quality
workers
 A great personality: Guess who?

• He bought a small farm at the age of 14 with savings

from delivering newspapers.
• He still lives in 3 bedroom house in mid-town Omaha
that he bought after he got married 50 years ago.
• He drives his own car and does not have a driver or
security people around him.
• He never travels in private jet although he owns the
world’s largest private jet company.
• His company owns 63 companies. He writes only
one letter in a year to his CEOs.
• He has given only two rules to his CEOs:
Rule no. 1 : Do not lose any of your share holder’s
money.
Rule no. 2 : Do not forget rule no. 1
* He does not socialize with high society crowd. His
past time after he gets home is to make himself
some pop corn & watch TV.
• Bill gate is his devotee.
• He has donated $31 billion to charity.
• His advice to young people: -

STAY AWAY FROM CREDIT CARDS

AND

INVEST IN YOURSELF.

* He is Warren Buffet the second richest

man in the world.
• What is your perception about Warren Buffet?

• He is ___________________________
• He is ___________________________
• He is ___________________________
• He is ___________________________
• He is ___________________________
• He is ___________________________
• He is ___________________________
• He is ___________________________
• He is ___________________________
Traits Theories of Leadership

Theories that consider personality,

social, physical, or intellectual traits to

differentiate leaders from non leaders.

 Leadership traits
• Energy and drive
•
• Appearance,
A sense of cooperation
•
presentability
Personality
• Intelligence • Initiative
• Self confidence • Judgment
• Tact and diplomacy • Sociability
• Will power & flexibility • Courage and
• Knowledge of human integrity
relations
• Emotional stability
 Leadership & Management

Leadership

The ability to influence a group toward

achievement of goals

Management

Use of authority inherent in designated formal

rank to obtain compliance from organizational

members.
 Leadership
• Leadership (L) is a function of followers (f), goals (g), a measure of
willingness on the part of subordinates (w) and a given situation (s)
L = F (f,g,w,s).
• Formal leadership is acquired by appointment or selection and
authority is given to him to function as leader.
• Informal leadership emerges when a person uses interpersonal
influence in a group without designated authority or power. This
type of leader emerges in certain situation because of his charm,
knowledge, skills and other traits.
 Behavioral Theories
While traits theories suggest what leaders “are”,
Behavioral Theories of leadership suggest what people
“do”. Theories proposing that specific behaviors
differentiate leaders from non-leaders.
Leadership effectiveness is determined in terms of
leader-subordinate interaction and outcome.
• Trait theory:
Leaders are born, not made.
• Behavioral theory:
Leadership traits can be taught.
 Ohio State Studies

The study highlights two factors which affect leadership dimension:

Consideration
The extent to which a leader is likely to have job relationships
characterized by mutual trust, respect for subordinates’ ideas, and
regard for their feelings

Initiating Structure

The extent to which a leader is likely to define and structure his

role and those of sub-ordinates, assign tasks to them and push
for realization of organizational goals.
• An important discovery in the Ohio study indicates
that it is not necessary that a leader to be rated high
both on consideration as well as structure element.
He could be high in one and low in other to lead
group successfully.

• The managers who exhibit high levels of both

consideration and initiating structure generate
higher levels of subordinate performances and
satisfaction.
 Tata Steel
• The Chairman of Tata steel, of late, has become
apprehensive that Mittal Group may take over the
Company. As a strategy he is thinking of acquiring
“Corus” a global giant in steel industry to become
too enormous in size to be taken over by Mittal
Group.

• Scene 1 : He has called a meeting of his vice

presidents and directed “ I want to take over “Corus”
within 3 months. This is your task and you will have
to meet the deadline. I think it is clear to you and
you don’t have any question. So jump on it.”
 Tata Steel
• Scene 2 : The Chairman has called a meeting of his vice
presidents and said “ To check Mittal group we should take
over “Corus” as quick as possible. Question is how best we
can complete the deal. Think over all the pros and cons and
come out with your suggestions. I hope a week time will be
sufficient. So let us meet again on next Friday here itself.

• Scene 3 : He has called a meeting of his vice presidents and

said “ To check Mittal group we should become as big as
them . For the purpose we will have to take over a suitable
company. You are all my best people and I trust you. Do the
needful as quick as possible.”
 Leadership styles

• Autocratic or dictatorial leadership : The leader keeps

the decision making authority and control in own hands
and assumes full responsibility for all actions.
• Subordinates are to implement instructions without
questioning.
• This style ranges from tough and highly dictatorial to
paternalistic.
Autocratic leadership – advantages:

3. It is useful when subordinates are new on job and have no

prior experience in decision making or performing without
supervision.
4. It is useful in crisis situation and when quicker results are
required.
5. It is useful when chain of command and division of work is
clear and understood by all.

Dis-advantages:

9. One way communication without feedback leads to

misunderstanding.
10. It can lead to worker resentment and may affect employee
morale.
11. It is unsuitable when the workforce is knowledgeable about
their jobs and job calls for teamwork.
 Participative or democratic leadership
• In this type of leadership, subordinates are consulted and
feedback is taken in decision making process.
• Group members are encouraged by leader to demonstrate
initiative and creativity in setting plans and policies and
decision making.

• Advantages: -

6. Active participation by employees raises morale and

satisfaction.
7. Employees develop a greater sense of self esteem due to
importance given to their opinions.
8. Employees get more motivation in work.
 Participative or democratic leadership
• Dis advantages: -

3. This method is more time consuming and toom many

opinions may make decision making process complicated.

4. Managers may not like erosion of their power base.

5. Some employees may feel dis-satisfied if their ideas are

not taken.

6. Application of the method requires certain conditions,

such as employees should be educated and organized.
 Laissez- faire or Free-reign Leadership

• In this type of leadership, the leader is just a figure-head and does

not give any direction but delegates authority to subordinates so
that they must plan, motivate, control and otherwise be
responsible for their own actions.
• Subordinates develop their own techniques for accomplishing
goals within overall organizational policies and objectives.
• This type of leadership is highly effective when the group
members are highly knowledgeable, skilled and motivated.
• This type of leadership is mostly effective in research laboratories
and academic institutions.
 A case

• Neptune Steel is going through a bad phase. One reputed consultant

has suggested restructuring of the Company which may involve
retrenchment of 150 employees.
• Mr. Barua, the MD has called a meeting of the Board. One of the
Board members suggested to remove the employees immediately
and implement the restructuring process.
• Mr. Singh, another member suggests that no we can not overlook
the human aspect of the issue. First we will have to rehabilitate
these persons and then go for restructuring.
• Mrs Parekh opined “Ok” let us take a time bound programme of
rehabilitating the employees through alternative employees /
business opportunities within three months and then go for the
restructuring.
• What are the leadership styles of these individuals?
 The
Managerial
Grid
(Blake and
Mouton)
 Contingency theory of leadership
• This theory says that an analysis of leadership involves not only the
individual traits and behavior but also a focus on the “SITUATION”.
• Effectiveness of leader behavior is contingent upon the demands
imposed by the situation.
• The focus is on the situation in which leadership is exercised and
not upon the leader.
• According to Szilagyi and Wallace, there are four contingency
variables that influence a leader’s behavior:
• 1. Leadership characteristics
• 2. Subordinate characteristics
• 3. Group characteristics
• 4. Organizational structure characteristics
 Fred Fiedler’s Contingency Theory

• According to Fred Fiedler three situational

variables influence group performance:-
• 1. Leader- member relationship – Existence of
mutual trust, open communication or otherwise.
• 2. Task structure – Involves clarity of goals,
clearly established and defined steps required
to complete task, less ambiguity in roles, rules
and regulations etc.
 Fred Fiedler’s Contingency Theory

• 3. Position power - Legitimate power inherent

in leader’s organizational position. It refers to
the degree to which a leader can make
decisions about allocation of resources,
rewards and sanctions.
• The leader is most effective when leader’s
group relations are positive, task is highly
structured and the leader has substantial power
and authority to exert influence on the
subordinates.
 Fiedler’s Least Preferred Co-worker
• The leadership model proposed by Fiedler measures leadership
orientation and effectiveness with a differential type of attitude scale
that measures the leader’s esteem for the “Least preferred coworker
(LPC)” i.e. whether, the person the leader least likes to work with, is
viewed in a positive or negative way.

• As example, if a leader describes his LPC in a favourable way with

such factors as friendliness, warmth, helpfulness and so on then he
will be considered high on LPC scale.
 Fiedler’s Least Preferred Co-worker
• Generally a high LPC score leader is more relationship
oriented and a low LPC score leader is more task
oriented.

• A particular leadership style may be effective in one

situation and totally ineffective in another situation. And
since a leadership is difficult to change, situation is to be
changed to suit the leadership style.
 A situation
• Sumita has joined recently as a finance officer in Jupiter
Capital ltd at Mumbai.
• On the very first day her boss, Mr. Singh the VP (Finance) has
given her a number of files containing details of HNI (high net
worth) clients of the company and has asked her to go
through the same. After three days, Mr. Singh called Sumita
and advised her manage wealth of top ten clients and then left
for Delhi to attend a meeting. Sumita, all through the day
wondered how to manage the wealth applying her theoretical
concept of portfolio management.
• Sumita returned home with high level of stress.
• Please analyze the leadership style of Mr. Singh
 Path- Goal Theory

• The theory of House and Mitchell proposes that effectiveness

of leaders can be measured from their impact on their sub-
ordinates’ motivation, their ability to perform effectively and
their satisfaction with their tasks.
• This model emphasizes that leader’s behavior be such as to
compliment the group work setting and aspirations so that it
increases subordinate’s “goal” achievement level and clarifies
the “path” to these goals.
• The theory is basically based on the “Expectancy theory” i.e.
the path – goal approach of motivation.
• According to the Path-Goal theory, to motivate employees,
leader should:-

• 1. Recognize subordinate needs for outcome over which, leader

has some control.
• 2. Arrange for appropriate rewards to his subordinates for goal
achievement.
• 3. Help subordinates in clearly establishing their expectations.
• 4. Demolish, as far as possible, barriers in their path of goal
achievement.
• 5. Increase opportunities for personal satisfaction which are
contingent upon satisfactory performance.
• Path-goal theory supports the following
types of leadership depending upon the
situation:-
• 1. Directive

• 2. Supportive

• 3. Achievement-oriented

• 4. Participative
Nevertheless specific leadership that is
most effective is also contingent upon :-

• 1. Characteristics of subordinates

• 2. Environmental factors
The Path-Goal Theory
 Cognitive Resource Theory
In a modification of his own theory, Fiedler along with
Garcia focused on role of stress as a situational
unfavorableness in leadership. According to them ,
stress is an enemy to rationality and effectiveness of
leader’s intelligence and experience differ in low and high
stress situations.
Research Support:
• Less intelligent individuals perform better in leadership
roles under high stress than do more intelligent
individuals.
• Less experienced people perform better in leadership
roles under low stress than do more experienced people.
 A situation
• Mr. Anil Kapoor has recently taken over charge of General Manager
of Neptune Cement near Katni. The company incurred loss last
year.
• After a detailed study he classified his 430 employees as under:-

• 20% employees are absolutely incapable as well as unwilling to put

their best in work
• 35% employees are willing but not competent enough
• 28% employees are willing and at the same time are competent.
• Remaining 17% are unwilling but capable in their work. And they
have more inclination towards trade unions
• Mr. Kapoor has engaged your company as a consultant to suggest
suitable measures to turn around.
• What type of leadership style would you suggest for Mr. Kapoor ?
 Hersey & Blanchard’s Situational Leadership Theory (SLT)
also known as Life Cycle Theory

• According to this theory, which has been widely accepted in

leadership development programmes all over the world,
leadership style is contingent on the level of follower’s
readiness.
• In SLT, leader –follower relationship is analogous to parent-
child relationship. And as parents are required relinquish
control as a child becomes more mature and responsible,
leader should also do the same depending upon maturity of
followers.
• This implies that effective leadership behavior depends on
ability and motivation of followers.
Leadership styles and maturity levels have the following

four combinations:-
• 1. Telling – When follower is unable and unwilling to do a
task i.e. is having a low level of maturity, the leader
needs to give a clear and specific directions.
• 2. Selling – If follower is unable but willing i.e. is having a
moderate level of maturity, leader needs to give a clear
and specific direction i.e. display high task orientation to
compensate for follower’s lack of ability and at the same
time should display high relationship orientation to get
the follower to buy into the leader’s desires.
• 3. Participating – When the follower is able but

unwilling, the leader needs to use a supportive

and participative role.

• 4. Delegating – When follower is both able and

willing i.e. is highly matured, he requires little

guidance. Leader can delegate in this situation

 Leadership Styles and Follower Readiness

(Hersey and Blanchard)

Follower Unwilling Willing

Readiness

Able Supportive
Monitoring
Participative

Leadership
Styles
High Task
Unable Directive and
Relationship
Orientations
Leader–Member Exchange Theory (LMX)

Because of time constraint, leaders establish

a special relationship with a small group of
followers who belong to the in-group because
of similarities in personality traits and
attitudes or a higher level of competence than
others. The others are in out-groups.

Leaders create in-groups and out-groups, and

subordinates with in-group status will have
higher performance ratings, less turnover,
and greater job satisfaction.
Leader-Member Exchange Theory
 Charismatic Leaders

• Charm and grace are all that is needed to create followers.

• Self-belief is a fundamental need of leaders.
• People follow others that they personally admire.
• The Charismatic Leader gathers followers through dint of
personality and charm, rather than any form of external power or
authority.
• Charismatic Leaders use a wide range of methods to manage their
image and, if they are not naturally charismatic, may practice
assiduously at developing their skills. They may bring trust through
visible self-sacrifice and taking personal risks in the name of their
beliefs. They will show great confidence in their followers. They are
very persuasive and make very effective use of body language as
well as verbal language.
 Key Characteristics of Charismatic Leaders
• Personal risk. Willing to take on high personal risk, incur
high costs and engage in self-sacrifice to achieve the vision.

• Environmental sensitivity. Able to make realistic

assessments of the environmental constraints and resources
needed to bring about change.

• Sensitivity to follower needs. Perceptive of others’ abilities

and responsive to their needs and feelings.

• Vision and articulation. Has a vision—expressed as an

idealized goal—that proposes a future better than the status
quo and is able to clarify the importance of the vision in terms
that are understandable to others.

• Unconventional behavior. Engages in behaviors that are

perceived as novel and counter to norms.
 Inspirational Approaches to Leadership

Charismatic Leadership Theory

Followers make attributions of heroic or

extraordinary leadership abilities when they
observe certain behaviors.

Charismatics Influence Followers By:

2. Articulating the vision
3. Setting high performance expectations
4. Conveying a new set of values
5. Making personal sacrifices
 Transactional Leadership

• People are motivated by reward and punishment.

• Social systems work best with a clear chain of

command.
• When people have agreed to do a job, a part of the deal
is that they cede all authority to their manager.
• The prime purpose of a subordinate is to do what their
manager tells them to do.
 Characteristics of Transactional Leaders

Contingent Reward: Contracts exchange of rewards

for effort, promises rewards for good performance,
recognizes accomplishments.

Management by Exception (active): Watches and

searches for deviations from rules and standards, takes
corrective action.

Management by Exception (passive): Intervenes

only if standards are not met.
 Transformational Leaders

• People will follow a person who inspires them.

• A person with vision and passion can achieve great
things.
• The way to get things done is by injecting enthusiasm
and energy.
• Working for a Transformational Leader can be a
wonderful and uplifting experience. They put passion
and energy into everything. They care about you and
want you to succeed.
 Characteristics of Transformational Leaders

Idealized Influence: Provides vision and sense of mission,

instills pride, gains respect and trust.

Inspiration: Communicates high expectations, uses symbols

to focus efforts, expresses important purposes in simple ways.

Intellectual Stimulation: Promotes intelligence, rationality,

and careful problem solving.

Individualized Consideration: Gives personal attention,

treats each employee individually, coaches, advises.
Transactional and Transformational Leadership

Transactional Leaders
• Contingent Reward
Leaders who guide or • Management by
motivate their followers Exception (active)
in the direction of • Management by
established goals by Exception (passive)

clarifying role and task • Laissez-Faire

requirements.
Transformational Leaders • Idealized Influence

Leaders who provide • Inspiration Motivation

individualized • Intellectual Stimulation
consideration and • Individual Consideration
intellectual stimulation,
and who possess
 Trust: The Foundation of Leadership
Trust

A positive expectation that

another will not—through
words, actions, or decisions
—act opportunistically.

Trust is a history-dependent
process (familiarity) based
on relevant but limited
samples of experience
(risk).
 Ten Principles of Motivational Leadership
• 1. Set goals

• 2. Set an example

• 3. Constantly improve

• 4. Give yourself time to think

• 5. Lead without pushing

• 6. judge by results – Hire people with a good judgnment

and you get good judgment
• 7. Build confidence

• 8. Expect criticism – The trouble with most of us is that

we may be ruined by praise rather saved by criticism.

• 9. Think of future – He who does not look ahead remains

behind

• 10. Think like a winner

 Great leaders
• One must have strategies to execute dreams.

• The early years were more about learning than about acting. I had
to carry on my father’s work, which was a big challenge.

• In our way of working, we attach a great deal of importance to

humility and honesty; With respect for human values, we promise to
serve our customers with integrity.

• We believe this combination of excellence in operations and strong

execution of our strategy is critical to achieve our vision. We will
continue to focus on both in future as well.

• One of the pre – requisites for children becoming proactive and

responsible citizens is the availability of enough role models inside
and outside the school.

• There are millions of children today who don’t attend school.

However, education is the only way to get ahead in this country.
• I want our company to be among the top ten IT companies in the world.

• It is imperative that our schools and educational institutions create an

environment in which the required intellectual, physical, social and moral
attributes can be developed, cherished and nurtured. Schools must be
viewed as places that have the potential to transform the future of child and
the nation.

• Character is one factor that will guide all our actions and decisions. We
invested in uncompromising integrity that helped us take difficult stands in
some of the most difficult business situations.

• As an advisor, I can say what I want. If I were a politician, I would constantly

have to compromise, and I’m incapable of doing that.

• We hire on requirement basis and not on anticipation.

• As you get bigger, you have to learn to delegate. It’s also an excellent way
to get staff involved in the company’s operations.

• We need to stop looking at schools as factories churning out students

equipped to merely memorize the text.
• What's important at the grocery store is just as important in engines
or medical systems. If the customer isn't satisfied, if the stuff is
getting stale, if the shelf isn't right, or if the offerings aren't right, it's
the same thing.

• Before at GE, we generally used to tell people what to do. And they
did exactly what they were told to do, and not one other thing. Now
we are constantly amazed by how much people will do when they
are not told to do by management.

* The essence of competitiveness is liberated when we make people

believe that what they think and do is important - and then get out of
their way while they do it.

• I've learned that mistakes can often be as good a teacher as

success.

• An organization's ability to learn, and translate that learning into

action rapidly, is the ultimate competitive advantage.

• Change before you have to.

• If you pick the right people and give them the opportunity
to spread their wings and put compensation as a carrier
behind it you almost don’t have to manage them.

• Above all, good leaders are open. They go up, down,

and around their organization to reach people. They
don't stick to the established channels. They're informal.
They're straight with people. They make a religion out of
being accessible. They never get bored telling their
story.

• Giving people self-confidence is by far the most

important thing that I can do. Because then they will act.

• When I stop learning something new and start talking

about the past versus the future, I will go.