CHAPTER- 5

LEADERSHIP

6.1. DEFINITION

Leading is the art or process of influencing people so that they will strive willingly towards the
achievement of group goals. Leadership is the ability to secure desirable actions from a group of
followers voluntarily without the use of coercion. It is the process of directing and inspiring
workers to perform the tasks.

Leading is establishing direction and influencing others to follow that direction. But this
definition isn’t as simple as it sounds because leadership has many variations and different areas of
emphasis.
Common to all definitions of leadership is the notion that leaders are individuals who, by their
actions, facilitate the movement of a group of people toward a common or shared goal. This
definition implies that leadership is an influence process.

6.2. LEADER VERSUS MANAGER

Traditionally, the term management refers to the activities (and often the group of people) involved
in five general functions: planning, organizing, staffing, leading, and controlling. Managers perform
and integrate these five functions throughout their organizations. However, emerging trends in
management point out that leading people is different than managing them.

The word leader is often used interchangeably with the word manager to describe those individuals in
an organization who have positions of formal authority, regardless of how they actually act in those
jobs. But just because a manager is supposed to be a formal leader in an organization doesn’t mean
that he or she exercises leadership.

An issue often debated among business professionals is whether leadership is a different function and
activity from management. Harvard’s John Kotter says that management is about coping with
complexity, and leadership, in contrast, is about coping with change. He also states that leadership
is an important part of management, but only a part; management also requires planning,
organizing, staffing, and controlling. Management produces a degree of predictability and order.
Leadership produces change. Kotter believes that most organizations are under led and over
managed. He sees both strong leadership and strong management as necessary for optimal
organizational effectiveness.

Much has been written in recent years about the leadership role of managers. Management and
leadership are both important to organizations. Effective managers have to be leaders, too,
because distinctive qualities are associated with management and leadership that provide
different strengths for the organization, as illustrated in Figure 6.1. As shown in the figure,
management and leadership reflect two different sets of qualities and skills that frequently
overlap within a single individual. A person might have more of one set of qualities than the
other, but ideally a manager develops a balance of both manager and leader qualities. A primary
distinction between management and leadership is that management promotes stability, order,
and problem solving within the existing organizational structure and systems.
Leadership promotes vision, creativity, and change. In other words, a manager takes care of
where you are; a leader takes you to a new place. Leadership means questioning the status quo so

1
that outdated, unproductive, or socially irresponsible norms can be replaced to meet new
challenges. Leadership cannot replace management; it should be in addition to management.
Good management is needed to help the organization meet current commitments, while good
leadership is needed to move the organization into the future

Figure 6.1: Distinction between managers and leaders

Leadership, as one of the primary activities of the influencing function, is a subset of

management. Managing is much broader in scope than leading and focuses on non-behavioral as
well as behavioral issues. Leading emphasizes mainly behavioral issues. Figure 6.1 makes the
point that although not all managers are leaders, the most effective managers over the long term
are leaders.

Merely possessing management skills are no longer sufficient for success as an executive in the
business world. Modern executives need to understand the difference between managing and
leading and know how to combine the two roles to achieve organizational success. A manager
makes sure that a job gets done, and a leader cares about and focuses on the people who do the
job. To combine management and leadership, therefore, requires demonstrating a calculated and
logical focus on organizational processes (management) along with a genuine concern for
workers as people (leadership).

6.3. THEORIES OF LEADERSHIP

6.3.1. EARLY THEORIES OF LEADERSHIP

6.3.1.1. LEADERSHIP TRAIT THEORIES

Leadership research in the 1920s and 1930s focused on isolating leader traits—that is,
characteristics—that would differentiate leaders from non leaders. Some of the traits studied
included physical stature, appearance, social class, emotional stability, fluency of speech, and
sociability.

The seven traits shown to be associated with effective leadership identified are described briefly
below.
2
1. Drive: Leaders exhibit a high effort level. They have a relatively high desire for achievement,
they are ambitious, they have a lot of energy, they are tirelessly persistent in their activities, and
they show initiative.
2. Desire to lead: Leaders have a strong desire to influence and lead others. They demonstrate
the willingness to take responsibility.
3. Honesty and integrity: Leaders build trusting relationships with followers by being truthful
or non deceitful and by showing high consistency between word and deed.
4. Self-confidence: Followers look to leaders for an absence of self-doubt. Leaders, therefore,
need to show self-confidence in order to convince followers of the rightness of their goals and
decisions.
5. Intelligence: Leaders need to be intelligent enough to gather, synthesize, and interpret large
amounts of information, and they need to be able to create visions, solve problems, and make
correct decisions.
6. Task-related Characteristics: Achievement drive, initiative, persistence, enterprise and task
orientation.
7. Personality: Alertness, dominance, extroversion, independence, creativity and self-confidence

Despite the best efforts of researchers, it proved impossible to identify a set of traits that would
always differentiate a leader (the person) from a non leader. Maybe it was a bit optimistic to
think that a set of consistent and unique traits would apply universally to all effective leaders.
However, later attempts to identify traits consistently associated with leadership (the process of
leading, not the person) were more successful.

Researchers eventually recognized that traits alone were not sufficient for identifying effective
leaders since explanations based solely on traits ignored the interactions of leaders and their
group members as well as situational factors. Possessing the appropriate traits only made it more
likely that an individual would be an effective leader. Therefore, leadership research from the
late 1940s to the mid-1960s concentrated on the preferred behavioral styles that leaders
demonstrated. Researchers wondered whether something unique in what effective leaders did—
in other words, in their behavior—was the key.

6.3.1.2. LEADERSHIP BEHAVIOR THEORIES

Researchers hoped that the behavioral theories approach would provide more definitive
answers about the nature of leadership than did the trait theories. The four main leader behavior
studies are:

I. University of Iowa Studies:

The University of Iowa studies explored three leadership styles to find which was the most
effective. These leadership styles were autocratic, democratic, & laissez faire/free rein.

a. Autocratic Leadership style:

The autocratic style described a leader who dictated work methods, made unilateral decisions,
and limited employee participation.

3
Advantage
1. It is useful when subordinate is new and has no experience.
2. In the crisis or emergency situation it can increase efficiency and get quicker result.
3. It is useful when subordinates are not interested in seeking responsibility or feel insecure
at the job.

Disadvantage:
1. One-way communication without feedback leads to misunderstanding and communication
breakdown.
2. It fails to develop workers commitment to the accomplishment of objectives.
3. It is unsuitable when the workers are knowledgeable about their job.

b. Democratic Leadership style

The democratic style described a leader who involved employees in decision making, delegated
authority, and used feedback as an opportunity for coaching employees.

Advantage
1. Active participation of workers and assures rising of productivity and satisfaction.
2. Workers develop greater sense of self-stem due to the importance given to their ideas.
3. Worker become more committed to change
4. It Results in higher employees moral

Disadvantage
1. The democratic leadership requires some favorable conditions. Workers must be literate,
informed and organized.
2. The assumption that all workers are genuinely interested in the organization and their
goals are successfully fused with the organization’s goals may not always be valid.
3. Some group members may feel alienated if their ideas are not accepted for action.
4. It is very time consuming and to many view points and ideas may make the solid
decision.
5. Some managers may be uncomfortable with the approach.

c. Laissez-fair/free rein/leadership style:

Finally, the laissez-faire style leader let the group make decisions and complete the work in
whatever way it saw fit.

Advantage
1. It creates an environment of freedom for individual and the team spirit.
2. It is highly creative, with a free and informal work environment.
3. It is very useful where people are highly motivated and achievement oriented.

Disadvantage
1. It may result in disorganized activities, which may lead to inefficiency and chaos.
2. Insecurity and frustration may be developed due to lack of specific decision making
authority and guidance.
3. Some members may put their own interests over the interest of team.

4
The researchers’ results seemed to indicate that the democratic style contributed to both good
quantity and quality of work. Had the answer to the question of the most effective leadership
style been found? Unfortunately, it wasn’t that simple. Later studies of the autocratic and
democratic styles showed mixed results. For instance, the democratic style sometimes produced
higher performance levels than the autocratic style, but at other times, it didn’t. However, more
consistent results were found when a measure of employee satisfaction was used. Group
members were more satisfied under a democratic leader than under an autocratic one.

Now leaders had a dilemma! Should they focus on achieving higher performance or on achieving
higher member satisfaction? This recognition of the dual nature of a leader’s behavior—that is,
focus on the task and focus on the people—was also a key characteristic of the other behavioral
studies.

II. The Ohio State Studies:

The Ohio State studies identified two important dimensions of leader behavior. Beginning with a
list of more than 1,000 behavioral dimensions, the researchers eventually narrowed it down to
just two that accounted for most of the leadership behavior described by group members. The
first was called initiating structure, which referred to the extent to which a leader defined his or
her role and the roles of group members in attaining goals. It included behaviors that involved
attempts to organize work, work relationships, and goals. The second was called consideration,
which was defined as the extent to which a leader had work relationships characterized by
mutual trust and respect for group members’ ideas and feelings. A leader who was high in
consideration helped group members with personal problems, was friendly and approachable,
and treated all group members as equals. He or she showed concern for (was considerate of) his
or her followers’ comfort, well-being, status, and satisfaction. Research found that a leader who
was high in both initiating structure and consideration (a high–high leader) sometimes achieved
high group task performance and high group member satisfaction, but not always.

III. University of Michigan Studies:

Leadership studies conducted at the University of Michigan at about the same time as those
being done at Ohio State also hoped to identify behavioral characteristics of leaders that were
related to performance effectiveness. The Michigan group also came up with two dimensions of
leadership behavior, which they labeled employee oriented and production oriented. Leaders
who were employee oriented were described as emphasizing interpersonal relationships. The
production-oriented leaders, in contrast, tended to emphasize the task aspects of the job. Unlike
the other studies, the Michigan researchers concluded that leaders who were employee oriented
were able to get high group productivity and high group member satisfaction.

IV. The Managerial Grid:

The behavioral dimensions from these early leadership studies provided the basis for the
development of a two-dimensional grid for appraising leadership styles. This managerial grid
used the behavioral dimensions “concern for people” (the vertical part of the grid) and “concern
for production” (the horizontal part of the grid) and evaluated a leader’s use of these behaviors,
ranking them on a scale from 1 (low) to 9 (high). Although the grid had 81 potential categories
into which a leader’s behavioral style might fall, only five styles were named: impoverished
management (1,1 or low concern for production, low concern for people), task management (9,1

5
or high concern for production, low concern for people), middle-of-the-road management (5,5 or
medium concern for production, medium concern for people), country club management (1,9 or
low concern for production, high concern for people), and team management (9,9 or high
concern for production, high concern for people). Of these five styles, the researchers concluded
that managers performed best when using a 9,9 style. Unfortunately, the grid offered no answers
to the question of what made a manager an effective leader; it only provided a framework for
conceptualizing leadership style. In fact, little substantive evidence supports the conclusion that a
9,9 style is most effective in all situations. Leadership researchers were discovering that
predicting leadership success involved something more complex than isolating a few leader traits
or preferable behaviors. They began looking at situational influences. Specifically, which
leadership styles might be suitable in different situations and what were these different
situations?

Fig: 6.2: The Leadership Grid

“The corporate world is filled with stories of leaders who failed to achieve greatness because
they failed to understand the context they were working in.” In this section we examine three
contingency theories—Fiedler, Hersey-Blanchard, and path-goal. Each looks at defining

6
leadership style and the situation, and attempts to answer the if-then contingencies (that is, if this
is the context or situation, then this is the best leadership style to use). The four main leader
behavior studies are summarized below:

Table 6.1: Summary of Behavioral Theories of Leadership

Behavioral dimension Conclusion
University Democratic style: involving subordinates, Democratic style of leadership was
of Iowa delegating authority, and encouraging most effective, although later
participation studies showed mixed results.
Autocratic style: dictating work methods,
centralizing decision making, and limiting
participation
Laissez-faire style: giving group freedom
to make decisions and complete work
Ohio State Consideration: being considerate of High–high leader (high in
followers’ ideas and feelings consideration and high in initiating
Initiating structure: structuring work and structure) achieved high
work relationships to meet job goals subordinate performance and
satisfaction, but not in all
situations
University Employee oriented: emphasized Employee-oriented leaders were
of Michigan interpersonal relationships and taking associated with high group
care of employees’ needs productivity and higher job
satisfaction.
Production oriented: emphasized
technical or task aspects of job
Managerial Concern for people: measured leader’s Leaders performed best with a 9,9
Grid concern for subordinates on a scale of 1 to style (high concern for production
9 (low to high) and high concern for people).
Concern for production: measured
leader’s concern for getting job done
on a scale 1 to 9 (low to high)

6.3.2. CONTINGENCY THEORY OF LEADERSHIP

“The corporate world is filled with stories of leaders who failed to achieve greatness because
they failed to understand the context they were working in.” In this section, three contingency
theories—Fiedler, Hersey-Blanchard, and path-goal are examined. Each looks at defining
leadership style and the situation, and attempts to answer the if-then contingencies (that is, if this
is the context or situation, then this is the best leadership style to use).

6.3.2.1. The Fiedler Model

The first comprehensive contingency model for leadership was developed by Fred Fiedler. The
Fiedler contingency model proposed that effective group performance depended upon properly
matching the leader’s style and the amount of control and influence in the situation. The model
was based on the premise that a certain leadership style would be most effective in different

7
types of situations. The keys were to (1) define those leadership styles and the different types of
situations, and then (2) identify the appropriate combinations of style and situation. In order to
understand Fiedler's model, let's look at the first of these variables—leadership style.

Fiedler proposed that a key factor in leadership success was an individual’s basic leadership
style. He further suggested that a person's style was one of two types: task oriented or relationship
oriented. To measure a leader's style , Fiedler developed the least-preferred coworker (LPC)
questionnaire. This questionnaire contained 16 pairs of contrasting adjectives—for example,
pleasant–unpleasant, cold–warm, boring–interesting, or friendly–unfriendly. Respondents were
asked to think of all the coworkers they had ever had and to describe that one person they least
enjoyed working with by rating him or her on a scale of 1 to 8 (the 8 always described the
positive adjective out of the pair and the 1 always described the negative adjective out of the
pair) for each of the 16 sets of adjectives. Fiedler believed that you could determine a person's basic
leadership style on the basis of the responses to the LPC questionnaire. What were his descriptions of
these styles?

Fiedler believed that if the leader described the least preferred co-worker in relatively positive terms (in
other words, a "high" LPC score), then the respondent was primarily interested in good personal relations
with co-workers. That is, if you described the person that you least liked to work with in favorable terms,
your style would be described as relationship oriented. In contrast, if you saw the least preferred co-
worker in relatively unfavorable terms (a low LPC score), you were primarily interested in productivity
and getting the job done; thus, your style would be labeled as task oriented. Fiedler did acknowledge that
there was a small group of people who fell in between these two extremes and who did not have a cut-
and-dried personality sketch. One other point we need to make is that Fiedler assumed that a person's
leadership style was always the same (fixed) regardless of the situation. In other words, if you were a
relationship-oriented leader, you'd always be one, and the same if you were task oriented.

After an individual's basic leadership style had been assessed through the LPC, it was necessary to
evaluate the situation in order to match the leader with the situation. Fiedler's research uncovered three
contingency dimensions that defined the key situational factors for determining leader effectiveness.
These were:
 Leader–member relations: the degree of confidence, trust, and respect employees had
for their leader; rated as either good or poor.
 Task structure: the degree to which job assignments were formalized and structured;
rated as either high or low.
 Position power: the degree of influence a leader had over power-based activities such as
hiring, firing, discipline, promotions, and salary increases; rated as either strong or weak.

Each leadership situation was evaluated in terms of these three contingency variables. Mixing these
variables produced eight possible situations in which a leader could find himself or herself ( See the
bottom of the chart in fig. 6-3). Situations I, II, and III were classified as very favorable for the leader.
Situations IV, V, and VI were moderately favorable for the leader. And situations VII and VIII were
described as very unfavorable for the leader.

Fiedler studied 1,200 groups in which he compared relationship-oriented versus task-oriented leadership
styles in each of the eight situational categories. He concluded that task-oriented leaders tended to
perform better in situations that were very favorable to them and in situations that were very
unfavorable. (See the top of fig. 6-3 where performance is shown on the vertical axis and

8
situation favorableness is shown on the horizontal axis. ) On the other hand, relationship-oriented
leaders seemed to perform better in moderately favorable situations.

Fig.6.3: Fiedler Model

Remember that Fiedler treated an individual's leadership style as fixed. Therefore, there were only two
ways to improve leader effectiveness. First, you could bring in a new leader whose style better fit the
situation. For instance, if the group situation was rated as highly unfavorable but was led by a
relationship-oriented leader, the group's performance could be improved by replacing that person with a
task-oriented leader. The second alternative was to change the situation to fit the leader. This could be
done by restructuring tasks or increasing or decreasing the power that the leader had over factors such as
salary increases, promotions, and disciplinary actions.

Reviews of the major studies undertaken to test the overall validity of Fiedler's model have shown
considerable evidence to support the model. However, it wasn't without shortcomings. For instance,
additional variables were probably needed to fill in some gaps in the model. Moreover, there were
problems with the LPC, and the practicality of it needed to be addressed. In addition, it's probably
unrealistic to assume that a person can't change his or her leadership style to fit the situation. Effective
leaders can, and do, change their styles to meet the needs of a particular situation. Finally, the
contingency variables were complex and difficult for practitioners to assess. It was often difficult in
practice to determine how good the leader-member relations were, how structured the task was, and how
much positions power the leader had. Despite its shortcomings, the Fiedler model provided evidence that
effective leadership style needed to reflect situational factors.

6.3.2.2. Hersey and Blanchard’s Situational Leadership Theory

Paul Hersey and Ken Blanchard developed a leadership theory that has gained a strong following
among management development specialists. This model, called situational leadership theory
(SLT), is a contingency theory that focuses on followers’ readiness. Before we proceed, two
points need clarification: Why a leadership theory focuses on the followers and what is meant by
the term readiness. The emphasis on the followers in leadership effectiveness reflects the reality
that it is the followers who accept or reject the leader. Regardless of what the leader does, the
group’s effectiveness depends on the actions of the followers. This important dimension has been
9
overlooked or underemphasized in most leadership theories. And readiness, as defined by
Hersey and Blanchard, refers to the extent to which people have the ability and willingness to
accomplish a specific task.

SLT uses the same two leadership dimensions that Fiedler identified: task and relationship
behaviors. However, Hersey and Blanchard go a step further by considering each as either high
or low and then combining them into four specific leadership styles described as follows:
 Telling (high task–low relationship): The leader defines roles and tells people what, how,
when, and where to do various tasks.
 Selling (high task–high relationship): The leader provides both directive and supportive
behavior.
 Participating (low task–high relationship): The leader and followers share in decision
making; the main role of the leader is facilitating and communicating.
 Delegating (low task–low relationship): The leader provides little direction or support.

Fig 6-4: Hersey and Blanchard's Situational Leadership Model

The final component in the model is the four stages of follower readiness:
 R1: People are both unable and unwilling to take responsibility for doing something.
Followers aren’t competent or confident.
 R2: People are unable but willing to do the necessary job tasks. Followers are motivated but
lack the appropriate skills.
 R3: People are able but unwilling to do what the leader wants. Followers are competent, but
don’t want to do something.
 R4: People are both able and willing to do what is asked of them.

SLT essentially views the leader–follower relationship as like that of a parent and a child. Just as
a parent needs to relinquish control when a child becomes more mature and responsible, so, too,
should leaders. As followers reach higher levels of readiness, the leader responds not only by

10
decreasing control over their activities but also decreasing relationship behaviors. The SLT says
if followers are at R1 (unable and unwilling to do a task), the leader needs to use the telling style
and give clear and specific directions; if followers are at R2 (unable and willing), the leader
needs to use the selling style and display high task orientation to compensate for the followers’
lack of ability and high relationship orientation to get followers to “buy into” the leader’s
desires; if followers are at R3 (able and unwilling), the leader needs to use the participating style
to gain their support; and if employees are at R4 (both able and willing), the leader doesn’t need
to do much and should use the delegating style.

SLT has intuitive appeal. It acknowledges the importance of followers and builds on the logic
that leaders can compensate for ability and motivational limitations in their followers. However,
research efforts to test and support the theory generally have been disappointing. Possible
explanations include internal inconsistencies in the model as well as problems with research
methodology. Despite its appeal and wide popularity, we have to be cautious about any
enthusiastic endorsement of SLT.

6.3.2.3. Path-Goal Model

Another approach to understanding leadership is path-goal theory, which states that the leader’s
job is to assist followers in attaining their goals and to provide direction or support needed to
ensure that their goals are compatible with the goals of the group or organization. Developed by
Robert House, path-goal theory takes key elements from the expectancy theory of motivation.
The term path-goal is derived from the belief that effective leaders remove the roadblocks and
pitfalls so that followers have a clearer path to help them get from where they are to the
achievement of their work goals. House identified four leadership behaviors:
 Directive leader: Lets subordinates know what’s expected of them, schedules work to be
done, and gives specific guidance on how to accomplish tasks.
 Supportive leader: Shows concern for the needs of followers and is friendly.
 Participative leader: Consults with group members and uses their suggestions before
making a decision.
 Achievement oriented leader: Sets challenging goals and expects followers to perform at
their highest level.

In contrast to Fiedler’s view that a leader couldn’t change his or her behavior, House assumed
that leaders are flexible and can display any or all of these leadership styles depending on the
situation.

Fig 6.4: Path-Goal Model Environmental contingency

Factors:
 Task structure
 Formal authority system
Leader Behavior  Work group Outcomes
 Directive
 Performance
 Supportive
 Satisfaction
 Participative
 Achievement Subordinate contingency
oriented factors:
 Locus of control
 Experience
11
 Perceived ability
As Fig 6.4 illustrates, path-goal theory proposes two situational or contingency variables that
moderate the leadership behavior–outcome relationship: those in the environment that are outside
the control of the follower (factors including task structure, formal authority system, and the
work group) and those that are part of the personal characteristics of the follower (including
locus of control, experience, and perceived ability). Environmental factors determine the type of
leader behavior required if subordinate outcomes are to be maximized; personal characteristics of
the follower determine how the environment and leader behavior are interpreted. The theory
proposes that a leader’s behavior won’t be effective if it’s redundant with what the
environmental structure is providing or is incongruent with follower characteristics. For
example, some predictions from path-goal theory are:
 Directive leadership leads to greater satisfaction when tasks are ambiguous or stressful
than when they are highly structured and well laid out. The followers aren’t sure what to
do, so the leader needs to give them some direction.
 Supportive leadership results in high employee performance and satisfaction when
subordinates are performing structured tasks. In this situation, the leader only needs to
support followers, not tell them what to do.
 Directive leadership is likely to be perceived as redundant among subordinates with high
perceived ability or with considerable experience. These followers are quite capable so
they don’t need a leader to tell them what to do.
 The clearer and more bureaucratic the formal authority relationships, the more leaders
should exhibit supportive behavior and deemphasize directive behavior. The
organizational situation has provided the structure as far as what is expected of followers,
so the leader’s role is simply to support.
 Directive leadership will lead to higher employee satisfaction when there is substantive
conflict within a work group. In this situation, the followers need a leader who will take
charge.
 Subordinates with an internal locus of control will be more satisfied with a participative
style. Because these followers believe that they control what happens to them, they prefer
to participate in decisions.
 Subordinates with an external locus of control will be more satisfied with a directive
style. These followers believe that what happens to them is a result of the external
environment so they would prefer a leader that tells them what to do.
 Achievement-oriented leadership will increase subordinates’ expectancies that effort will
lead to high performance when tasks are ambiguously structured. By setting challenging
goals, followers know what the expectations are.

Testing path-goal theory has not been easy. A review of the research suggests mixed support. To
summarize the model, however, an employee’s performance and satisfaction are likely to be
positively influenced when the leader chooses a leadership style that compensates for
shortcomings in either the employee or the work setting. However, if the leader spends time
explaining tasks that are already clear or when the employee has the ability and experience to
handle them without interference, the employee is likely to see such directive behavior as
redundant or even insulting.

12