Leadership and Governance: UKAM4023 & UKAM4024 Integrated Case Study

LECTURE 5
LEADERSHIP AND
GOVERNANCE
UKAM4023 & UKAM4024
INTEGRATED CASE STUDY
1
LEADERSHIP
LECTURE 5
LEADERSHIP AND ORGANISATIONAL
STRUCTURE
UKAM4023 & UKAM4024

“Leadership is a process of social
influence, which maximizes the efforts of
others, towards the achievement of a
goal”
3
WHO ARE GREAT
LEADERS TO YOU?
4
LEADERSHIP
PERSPECTIVE
5
LEADERSHIP THEORY
6
1TRAIT THEORY
 Assume that people inherit certain qualities and traits
that make them better suited to leadership.
 If we can identify the distinguishing characteristics of
successful leaders, we will at least be able to select
good leaders.
But what is it that makes someone exceptional in this respect?
7
1TRAIT THEORY BOSS vs LEADER
WHAT MAKES A
GOOD LEADER?
What are the common traits found
in good leaders?
8
2BEHAVIOURAL THEORY
 Turn to what leaders did - how they behaved
 It considers the observable actions and reactions
of leaders and followers in each situation
9
2BEHAVIOURAL THEORY
 Different patterns of behaviour were grouped together
and labelled as “styles of leadership”
Concern for Concern for

task people
Participative
Directive style
style
10
2BEHAVIOURAL THEORY
TASK vs
PEOPLE
BLAKE AND
MOUTON’S
MANAGERIAL
GRID
11
2BEHAVIOURAL THEORY
DIRECTIVE vs PARTICIPATIVE
THEORY X & Y
12
2BEHAVIOURAL THEORY
DIRECTIVE vs PARTICIPATIVE
CARROT & STICK THEORY
13
ISSUES
PROBLEMS OF TRAIT THEORY:
 It's not always true
 Different situations need different traits
PROBLEMS OF BEHAVIOURAL THEORY:

 No one style suits all
 Different styles suit different situations
14
3CONTIGENCY THEORY
 There is no best way to organise a corporation, to lead a
company, or to make decisions.
 Instead, the optimal course of action is contingent
(dependent) upon the internal and external situation.
 A contingent leader effectively applies their own style
of leadership to the right situation.
15
3CONTIGENCY THEORY
 The idea that what is needed changes from situation to
situation
 That particular contexts would demand particular forms
of leadership.
 This placed a premium on people who were able to
develop an ability to work in different ways, and could
change their style to suit the situation.
16
TRANSACTIONAL
4
THEORY
 Recognises what it is that we want to get from work
and tries to ensure that we get it if our performance
merits it
 Exchanges rewards and promises for our effort
 Is responsive to our immediate self-interests if they can
be met by getting the work done
17
5TRANSFORMATIONAL THEORY
 Raises level of awareness about the significance and
value of outcomes, and ways of reaching them
 Gets followers to transcend our self-interest for the sake
of the team, organisation or larger polity
 Alters our need level (after Maslow) and expands our
range of wants and needs
18
LEADERSHIP POWERS
Coercive Legitimate
Reward Power
Power Power
Expert Power Referent Power
19
2
GOVERNANCE
LECTURE 5
LEADERSHIP AND ORGANISATIONAL
STRUCTURE
UKAM4023 & UKAM4024

CORPORATE
GOVERNANCE
Corporate governance is defined as the process and
structure used to direct and manage the business and affairs
of the company towards promoting business prosperity and
corporate accountability with the ultimate objective of
realising long-term shareholder value while taking into
account the interest of other stakeholders.
(Malaysia Code on Corporate Governance)
21
CORPORATE
GOVERNANCE
 The pillars of corporate governance such as ethical
behaviour, accountability, transparency and
sustainability are important to the governance of
companies and stewardship of investors’ capital
 Companies that embrace these principles are more
likely to produce long-term value than those that are
lacking in one or all
22
CORPORATE
GOVERNANCE
 Identifies the distribution of rights and responsibilities
among different participants and outlines the rules and
procedures for decision-making, internal control and
risk management.
 Not only concerned with shareholder interests but
requires balancing the needs of other stakeholders
(employees, customers, suppliers, society and the communities) in
which the companies conduct their business
23
CORPORATE
GOVERNANCE
It relates to
 Whom the organisation serves
 How the purposes and priorities should be decided
 How an organisation should function
 How power is distributed among stakeholders
24
POOR CORPORATE
GOVERNANCE
Poor corporate governance can lead to poor organisational
performance.
 Domination by a single individual
 Lack of board involvement
 Ineffective internal audit function
 Lack of supervision
 Lack of independent scrutiny
 Emphasis on short-term profitability
25
MALAYSIA CODE ON CG
PRINCIPLE A PRINCIPLE B PRINCIPLE C
• Board • Effective Audit • Integrity in

Leadership and and Risk Corporate
Effectiveness Management Reporting and
Meaningful
Relationship
with
Stakeholders
26
SEPARATION OF
OWNERSHIP
 The separation of ownership and control is a situation
where decision makers do not own a major share of the
wealth effects of their decisions.
 However, the shareholders will want to build in
safeguards to ensure that the managers run the business
in the interests of all the stakeholders fairly, and not just
in the managers' own interest.
27
OWNERSHIP & MANAGEMENT
THEORIES
STEWARDSHI
P THEORY
AGENCY
THEORY
STAKEHOLD
ER THEORY
28
STAKEHOLDER CLAIMS
Direct stakeholder claims
 Made by those with their own ‘voice’.
 These claims are usually unambiguous, and are made
directly
Indirect stakeholder claims
 By those stakeholders unable to make the claim directly
because they are, for some reason, inarticulate or

‘voiceless’
29
STAKEHOLDER INFLUENCE
30

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LECTURE 5

UKAM4023 & UKAM4024

But what is it that makes someone exceptional in this respect?

Concern for Concern for

PROBLEMS OF BEHAVIOURAL THEORY:

Expert Power Referent Power

UKAM4023 & UKAM4024

• Board • Effective Audit • Integrity in

because they are, for some reason, inarticulate or

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