OB Unit VI

MGT 232: Leadership and
Organizational Behavior
Course Instructor
ANISH POUDEL
1
COURSE CONTENT
• Unit-I Introduction to Organizational Behavior 6 LHS
• Unit-II Perception and Learning 4 LHS
• Unit-III Personality and Job Satisfaction 4 LHS
• Unit-IV Organization Conflict and Stress 5 LHS
• Unit-V Introduction to Leadership 4 LHS
• Unit-VI Theories of Effective Leadership & Contemporary Leadership
Styles 7 LHS
• Unit-VII Leadership Development in Organization 2 LHS
2
Unit-VI
Theories of Effective Leadership &
Contemporary Leadership Styles 7 LHS
• Contingency Theories: Fiedler’s Contingency
theory, Cognitive Resource Theory, Path Goal
Theory, Situational Leadership Theory and Multiple
Linkage Model
• Contemporary Leadership Styles: Transactional
Leadership, Transformational Leadership,
Charismatic Leadership, Value-based Leadership,
Spiritual and Servant Leadership, Boundary
Spanning & Team Leadership
3
Contingency Theories
• Contingency approach assumes that appropriate leader
behavior varies from one situation to another.
• The effectiveness of leadership depends on the
interaction of the leader’s personal characteristics, the
leader’s behavior and factors in the leadership
situation.
• It is based on the idea that effective leadership cannot
be defined by any one factor. A successful leader must
be adoptive and flexible.
• As the situation changes, the leader must change his
style of leadership.
• No universally applicable leader behavior. Leadership4
should be situational.
Contingency Theories
• Important contingency theories are:
• Fiedler’s Contingency Theory,
• Cognitive Resource Theory,
• Path Goal Theory,
• Situational Leadership Theory and
• Multiple Linkage Model
5
Fiedler’s Contingency Model/
Theory
• Fred. E. Fiedler developed a concept called
contemporary theory of leadership effectiveness in 1967.
• This theory states that situation determines the most
appropriate leadership style.
• There is no style which is the best for all situations.
• Leadership style should change according to the
demands of situation.
• This model says that effective group performance results
due to a proper match between the leadership style and
situation.
6
Theory
• Fiedler developed a questionnaire called Least Preferred Co-
worker (LPC) that measure whether a person is task oriented
or relationship oriented.
• Secondly, he identified 3 situational criteria as leader member
relations, task structure and position power.
• The main procedures of Fiedler’s contingency theory
are:
a. Identifying leadership style
b. Situational Classification
c. Matching leaders and situation
d. Improving leadership effectiveness
7
Theory
• Leadership Style: He classifies leadership styles in
two as earlier theorists as production and people in
managerial grid.
-Task-oriented: task oriented leaders are those who
assign specific work to subordinates, closely
supervise them, and reward them only with
financial incentives.
-Relations-oriented: relations oriented leaders are
those who build team work through supportive and
social behavior.
8
Theory
Situational Dimensions. Three important situational factors that
influence the leader’s effectiveness.
-Leader-member relations: the degree to which employees trust
and respect the leader and are willing to follow his guidance. A
leader can be more effective if he is trusted and liked by followers
and if they are willing to accept his influence.
-Task structure: The extent to which the group’s tasks, goals, and
performance are clearly defined and can be easily held responsible
for performance.
- Position power: is the extent to which a leader uses controls,
rewards, and punishments for subordinates. A situation with high
position power lets the leader hire people and directly reward or
punish behavior.
9
Theory
• Matching Leaders and Situations:
Leader-member relations x Task structure x Position power
• If we divide each of these three dimensions into high and
low, we arrive at 2 x 2 x 2 = 8 types situations.
• The most favorable situation is where leader-member
relations are good and task structure and power position
are high.
• The least favorable situation is where leader-member
relations are poor, task structure and position power are
low.
10
Fiedler’s Contingency Model/ Theory
Such situation can result as follows:
Conditi Leader member Task Position Leadership

on relations structure power style
1 Good Structured Strong Directive
2 Good Structured Weak Directive
3 Good Unstructured Strong Directive
4 Good Unstructured Weak Permissive
5 Moderately poor Structured Strong Permissive
6 Moderately poor Structured Weak No data
7 Moderately poor Unstructured Strong No
relationship
8 Moderately poor Unstructured Weak Directive
11
12
Theory
• Most favorable situation to the leader is situation 1 and
least favorable is situation 8.
• Task oriented leaders can perform better in situation
1,2,3 & 8.
• Oriented leaders can perform better in situation 4,5,6
and 7.
Criticisms
• Least Preferred Co-workers (LPC) cannot perfectly
measure leader’s fundamental style. In one study it has
been found that the same person may obtain different
LPC scores on different days.
• The variables are not defined clearly 13
Cognitive Resource Theory
• This theory was developed by Fred Fiedler and Joe Garcia
in 1987.
• This theory taken as a reconceptualization of the Fiedler
Contingency Theory.
• It focuses on the influence of the leaders intelligence and
experience on their reaction to stress.
• According to this theory, stress is opposite to rationality. It
damages leaders ability to think logically and analytically.
• It states that intelligence is more influencing in a low-
stress situations and experience in high-stress situations.
14
15
• Assumptions:
• Directive approach: When a leader is better than the followers in
cognitive abilities, s/he should adopt a directive approach to
improve the overall performance of the team.
• Impact of stress: Intelligence is more influencing in a low-stress
situation and vice versa. However, experience is more impactful in
a high-stress situation and vice-versa.
• Supportive group members: A leaders cognitive abilities can
contribute to group performance only when the group members
are supportive to leadership goals.
• Cognitively demanding tasks: The intellectual abilities of the
leader can only be utilized efficiently in difficult and complex tasks.
16
• Applications:
• Leadership training: Leaders should be trained on stress
management to utilize their intelligence and experience so
that they rely on intelligence for low-stress situations, and on
experience for high-stress situations.
• Approach of leadership: This theory states that leaders
should take a directive approach when their knowledge
benefits the group but a less directive approach when group
members abilities contribute to the performance.
• Leadership roles: The cognitive resources theory supports
placing the right leaders in the right place considering their
intelligence and experience.
17
• Limitations:
• This theory does not classify the intelligence
into different types.
• This theory does not specify the stress level and
types based on tasks.
• Stress factor cannot be measured reasonably.
• Some leaders may have both superior
intelligence and experience.
18
Path Goal Theory
• This theory was developed by Robert J. House 1971 and revised in 1996.
• This theory is based on the expectancy theory of motivation.
• It describes what leaders must do to motivate people to perform well
and to get satisfied from their work.
• The leader should be able to provide the subordinates with the
information, support and other resources and help them to achieve their
goals.
• The essence of this theory is that it is the leader’s job to assist
subordinates attain their goals and to provide the necessary direction or
support.
• It has emphasized on effective leadership styles to clarify the path and
help the subordinates to achieve their goal and make journey easier by
reducing the obstacles.
19
Path Goal Theory
According to House, a leader can adopt four
different leadership behaviors as follows
• Directive
• Supportive
• Participative
• Achievement Oriented
20
Path Goal Theory
• Directive: A directive leader lets subordinates know what is
expected of them, gives guidance and direction, and schedules
work according to the expectation. Directive leadership
leads to greater satisfaction when tasks are ambiguous or
stressful than when they are highly structured and well laid
out. It is most effective when people are unsure about the task
or when there is a lot of uncertainty within the environment.
• Supportive: A supportive leader is friendly and approachable,
makes the work more pleasant, treat employees equally and
shows concern for the status, needs, and well being of the
employees. He is concerned for the subordinate welfare and
treating members as equals. Supportive leadership results
in high employee performance and satisfaction when
employees are performing structured tasks. It is most21
Path Goal Theory
• Participative: A participative leader always consults with
subordinates, asks suggestions, and allows participation in
decision making. Employees with an internal locus of control
will be more satisfied with a participative style. It is most
effective when subordinates are highly trained and involved
in their work.
• Achievement Oriented: An Achievement oriented leader
sets challenging goals and expects subordinates to perform
at high levels. Encouraging subordinates and showing
confidence in subordinates’ abilities is necessary for him.
Achievement –oriented leadership will increase
employees expectancies that effort will lead to high
performance when tasks are ambiguously structured. It is22
Path Goal Theory
• In contrast to Fiedler, House assumes leaders
are flexible and that the same leader can
display any or all of Employees
these behavior; depending
on the situation.  Contingencies
Skills, experience
 Locus of control Leader
Leader Behavior
 Directive Effectiveness
 Employee
 Supportive
 Participative motivation
 Employee
 Achievement
satisfactions
oriented Environmental  Leader acceptance
Contingencies
 Task structure
 Team dynamics 23
Path Goal Theory
Strengths Weakness
• It specifies four conceptual distinct • It is very complex.
varieties of leadership.
• It has received only partial
• Explains how task and subordinate
support from the many empirical
characteristics affect the impact of
leadership. research studies that have been
conducted to test its validity.
• The framework provided in path goal
theory informs leaders about how to • It fails to explain the relationship
choose an appropriate leadership between leadership behavior and
style. worker motivation.
• It attempts to integrate the motivation • This approach treats leadership
principles into a theory of leadership.
as a one way event the leader
• Provide a practical model. affects the subordinate.
24
Situational Leadership Theory
(SLT)
• Developed by Paul Hersey and Kenneth
Blanchard in 1969 as Life Cycle Theory of
Leadership.
• In mid 1970, renamed as Situational
Leadership Theory.
• Also called Hersey-Blanchard Situational
Leadership Theory.
• After 20 years, Kenneth Blanchard revised this
model and named it as Situational Leadership
Model 2.
• Based on the belief that there is no one best25
Situational Leadership Theory
(SLT)
• SLT contingency theory suggests that the
leader has to match the leadership style
according to the readiness of subordinates
which moves in stage and has a cycle.
• The Hersey-Blanchard Situational Leadership
Model rests on two fundamental concepts;
leadership style and the individual or group's
maturity level.
• They characterized leadership style in terms of
the amount of Task Behavior and Relationship 26
Situational Leadership Theory (SLT)
• Maturity Levels are also task-specific and focuses on readiness
of accepting responsibility.
• Low maturity R1: Employees in this level still lack the specific
skills required for the job and unable and unwilling to do or to
take responsibility for task.
• Low to moderate R2: Employees in this level are unable to
take on responsibility for the task being done,; however, they are
willing to work at the task. They are beginner but enthusiastic.
• Moderate to high R3: Employees in this level are experienced
and able to do the task but lack the confidence or the
willingness to take on responsibility.
• High maturity R4: Employees in this level are experienced at
the task, and comfortable with their own ability to do it well.
They are able and willing to not only do the task, but to take27
• They explain four styles of leadership that match
different maturity level of subordinates. They are
• Telling (S1),
• Selling(S2),
• Participating(S3), and
• Delegating (S4)
28
• Telling (S1): In this style, the leader has to deal with employees
that lack specific skills required for the job and are unable and
unwilling to do or to take responsibility for task. Inexperienced
employees are not capable enough to carry out tasks
independently. Good instruction and monitoring of the entire
work process would be the best style of leadership in this
situation. This is also sometimes referred to as task-oriented
leadership where no concern for human relationships and
support. This is effective when follower are at very low level of
maturity.
• Selling(S2): At this level, the employees have a desire to work
independently but they are not capable to accomplish given task.
They have not reached full maturity and are caught up by
circumstances. They want to set work eagerly but cannot work
independently because of lack of skills and knowledge. They are29
• Participating(S3): In this leadership style, low emphasize is
given for task and high for maintaining relationship with
employees. At this level of situational leadership, the employees
are capable but temporarily unwilling. They are qualified
workers but because of the number of tasks, they might get the
idea that they are being busy with work. This can make them
insecure and reluctant. Employees are allowed to participate in
the decision making process, this will increase acceptance and
employees will work independently again. This is effective when
followers are on the moderate to high side of maturity.
• Delegating (S4): In this style, low emphasize is given for task
and also for maintaining relationship with employees. Here,
employees can and want to carry out their tasks independently.
They have a high level of task maturity as a result of which they
need less support. Employees inform the leader about their
progress of their own agreement. They become motivated 30
31
Multiple Linkage Model (Multi
Dimensional Model)
• The Multiple Linkage Model was developed by Gary Yukl
in 1981.
• The Multiple Linkage Model explains how the leader
interacts with organizational process and structures to
effect group performance.
• It describes how managerial behavior and situational
variables jointly influence the performance of individual
subordinates and the leader’s work unit.
• It is basically applied in sports.
• The Multiple Linkage Model consists of four variables
consisting of leader behavior, intervening variables,
situational variables and criteria of unit and performance.
32
Dimensional Model)
33
Dimensional Model)
•Leader behavior: A good leader can influence the
variable by using various interventions for the
positive outcome of overall performance of the
organization. The main responsibility of the leader
is to understand the situation at the time of taking
intervening measures so that his decision will give
positive impact on organizational performance.
•Situational variables: Employees are the
dynamic resources of the organization and
successful functioning of the organization totally
depends on the behavior and activities of
employees. The situational variables that can
influence employees behavior and activities are 34
Dimensional Model)
• Intervening variables: A successful leader can influence
subordinates performance by applying and controlling the
intervening variables. Subordinates performance is affected by four
intervening variables consisting of ability to do work, task
motivation, clear and appropriate perceptions, and presence or
absence of environmental constraints.
• Criteria of effectiveness: In Multiple Linkage Model, there is the
possibility of two scenarios: intervening variables may be directly
affected by situational variables or situational variables may be
directly affected by intervening variables. The responsibility of
leader is to take corrective measures to overcome the deficiencies
found in the intervening variables. In the long term, the
responsibility of the leader is to improve situational variables so that
unit and overall performance of the organization can be improved.
35
Dimensional Model)
Limitations
• This theory fails to specify the leader
behavior influencing the situation.
• It is simply a general framework than a
formal theory.
• There are very few studies to confirm this
theory.
36
Contemporary Leadership Style
• Contemporary leadership styles are practices that align
with the changing dynamics of the business environment.
They focus on fostering a culture of collaboration,
innovation and adaptability. Here are some of the most
prevalent contemporary leadership styles:
• Transactional leadership
• Transformational leadership
• Charismatic leadership
• Value-based leadership
• Spiritual and servant leadership
• Boundary spanning & team leadership
37
Transactional leadership
• Transactional leadership is more short-term and can best be described as a
“give and take” kind of transaction. Team members agree to follow their leader
on job acceptance; therefore, it’s a transaction involving payment for services
rendered. Employees are rewarded for exactly the work they would’ve
performed. If you meet a certain target, you receive the bonus that you’ve been
promised. It is especially so in sales and marketing jobs.
• Transactional leadership establishes roles and responsibilities for each team
member and encourages the work to be completed as scheduled. There are
instances where incentive programs can be employed over and above regular
pay. In addition to incentives, there are penalties imposed to regulate how work
should be done.
• Transactional leadership is a more direct way of leadership that eliminates
confusion between leader and subordinate, and tasks are clearly spelled out by
the leader. However, due to its rigid environment and direct expectations, it may
curb creativity and innovation. It can also lead to lower job satisfaction and high
employee turnover. 38
Transactional leadership: Characteristics
• Focus on short term goals
• Focus on structure
• Inflexible
• Extrinsic motivation
• Emphasis on efficiency
• Reward and reprimand
39
Transactional leadership
• Pro: Confusion and guesswork are eliminated,
because tasks and expectations are clearly
mapped out by the leader.
• Con: Due to the rigid environment and
expectations, creativity and innovation may be
stifled.
40
Transformational leadership
• Transformational leadership has the ability to affect employee's perceptions
through the returns that organization gets in the form of human capital
benefits. These leaders have the ability to gain higher benefits by
introducing knowledge management processes, encouraging interpersonal
communication among employees and creating healthy organizational
culture.
• It helps in flourishing organizational innovation by creating a participative
environment or culture. It promotes a culture where the employees have
autonomy to speak about their experiences and share knowledge.
• Transformational leadership is all about transforming the business or groups
by inspiring team members to keep increasing their bar and achieve what
they never thought they were capable of.
• Transformational leaders expect the best out of their team and push them
consistently until their work, lives, and businesses go through a
transformation or considerable improvement. 41
Transformational leadership
• Transformational leadership is about cultivating change in
organizations and people.
• The transformation is done through motivating team members to go
beyond their comfort zone and achieve much more than their
perceived capabilities.
• To be effective, transformational leaders should possess high levels
of integrity, emotional intelligence, a shared vision of the future,
empathy, and good communication skills.
• Such a style of leadership is often associated with high growth-
oriented organizations that push boundaries in innovation and
productivity. Practically, such leaders tend to give employees tasks
that grow in difficulty and deadlines that keep getting tighter as
time progresses.
42
Transformational leadership: Features
• They identify themselves as change agent
• They are courageous
• They believe in people
• They are value driven
• They are life long learners
• They can deal with complexity, vagueness and uncertainty
• Transformational leadership is most effective in fast-
growing organizations or organizations that have been drifting
and need direction. Transformational leadership is also
effective during corporate restructuring, mergers and
acquisitions, and other high-risk business transformations.
43
Transformational leadership:
Pros:
• Places high value on a future vision of the company.
• Not coercive; motivation and inspiration are used to gain support.
• Can help catalyze company growth.
• May boost employee morale and retention if workers feel genuinely
connected to company goals.
Cons:
• A big picture focus can make it easy to miss nitty-gritty operational
details.
• Present-day issues may be sacrificed for long-term goals.
• If leaders don’t pay proper attention to employee needs, they may
lose sight of individual learning curves and workplace preferences. 44
Charismatic leadership
• Developed by the German Sociologist Max Weber.
• Charismatic leadership employs charisma to motivate and
inspire followers. Leaders use expressive communication
skills to unite a team towards a shared vision. Charismatic
leaders have magnetic personalities, as well as a lot of
belief to achieve their objectives.
• It enhances followers self-esteem and self confidence.
• The followers make attribution of heroic or extraordinary
abilities when they observe certain behavior of leader.
• Leaders are able to clearly lay out their vision and get
others excited about that same goal. 45
Charismatic leadership: Characteristics or
Qualities
• Self-confidence
• Communication skills
• Empathy
• Humility
• Self-awareness
• Environmental sensitivity (Maturity)
• Optimism
• Passion 46
Charismatic leadership
• Pro: Charismatic leaders are very inspirational and
effective at getting an entire group invested in a shared
objective.
• Con: Due to their intense focus, it’s easy for these
leaders to develop “tunnel vision” and lose sight of
other important issues or tasks that crop up (appear
suddenly).
47
Value-based leadership
• Value based leadership philosophy core element is that people are
primarily driven by their values and live in accordance with them.
Leaders consider own values, values of followers and organizational
values for direction and motivation.
• It is both a leadership style and philosophy that builds on the shared
beliefs and assumptions of the leader and the team. Because a common
set of values is shared, teams experience greater alignment and benefit
from higher productivity.
• Values-based leadership encourages a common set of values in all
employees, improving their cohesiveness and willingness to work.
Knowing that a leader or manager has similar beliefs often encourages
employees to follow their instruction, increasing the chance of success
with every goal. Values-based leaders have specific traits and other
qualities that make them the best at what they do. 48
Value-based leadership: Traits
• Self-reflection-Values-based leaders take time each day to reflect on their recent decisions
and motivations. Doing so offers them the chance to reevaluate their values, determine their
purpose and discover what really matters to them as leaders. Strong leaders have the
willingness to assess themselves in these areas and the honesty to diagnose the truth.
• Self-confidence-All leaders tend to have a degree of self-confidence, but values-based leaders
understand that some leaders are better than them. They also understand that, as leaders,
they are continuously learning and evolving. Values-based leaders understand both their
strengths and weaknesses, surrounding themselves with those who complement their skills.
• Humility-Good leaders understand who they are and where they came from. Humility for
leaders is the belief that they are no different than the people who work for them. These
leaders believe that every employee holds just as much value to the company as they do.
Humble leaders do what it takes to lift up their teams and ensure they are well taken care of
for their work.
• Positive influence-By showing the company's core values in their work, values-based leaders
support their teams by serving them and ensuring they receive the best benefits in every
situation. They also become excellent examples to all within an organization of what a good
leader is. When presented with a leadership task, other employees often feel encouraged to
emulate their values-based leader, improving the quality of work throughout the organization.
49
Spiritual leadership
• It involves intrinsically motivating and inspiring workers
through hope/faith in a vision of service to key stakeholders
and a corporate culture based on the values of unselfish
love to produce a highly motivated, committed and
productive workforce.
• The purpose of spiritual leadership is to tap into the
fundamental needs of both leaders and followers for
spiritual well-being through calling (life has meaning and
makes a difference) and membership (belonging); to create
vision and value similarity across the individual,50
Spiritual leadership: Essential to spiritual
leadership is:
• Creating a vision wherein leaders and followers
experience a sense of calling so that their lives
have purpose, meaning and makes a difference,
and
• Establishing a organizational culture based on
the values of altruistic love whereby leaders and
followers have a sense of membership, feel
understood and appreciated, and have genuine
care, concern, and appreciation for BOTH self 51
Servant leadership
• It is a leadership model developed by Robert K.
Greenleaf. Servant leaders display characteristics such
as strong listening skills, understanding, self-
awareness, and the desire to create a healthy work
environment.
• Servant leadership is a leadership approach that puts
serving others above all other priorities. Rather than
managing for results, a servant leader focuses on
creating an environment in which their team can thrive
and get their highest-impact work done.
52
• Servant leadership seeks to move management and
Servant leadership
• The authority figure in servant leadership environments attempts
to promote innovation, empower employees, and assure the well-
being of those around them.
• Servant leadership also aims to develop leadership qualities in
others.
• This leadership style requires an individual to demonstrate
characteristics such as empathy, listening, stewardship, and
commitment to the personal growth of others.
• Servant leadership is not suitable for all situations. A military
commander must assume complete authority in order to make
swift life and death decisions.
53
Servant leadership: Focus
• Setting the strategic vision for the company and communicating that
down to the team level
• Encouraging ownership and extending supported trust to the team
• Making sure that the team has the required resources, budget, skills,
and attention to make an impact
• Providing a framework within which their team can flourish (instead of
prescribing them specific directions on each of their duties)
• Bottom-up empowerment, which means building their team members’
self-confidence, decision-making abilities, and collaboration skills
54
Servant leadership: Pros
• Fosters strong team culture: Servant leaders give
ownership to their team members to increase their
motivation, courage, and creativity.
• Creates people-focused culture: Servant leaders
establish a people-focused culture by fostering deep,
trusting relationships with and between their teammates.
This level of trust and connection allows teams to make
decisions in the best interest of the organization and
everyone involved.
• Boosts team morale: A team that feels seen and valued
by their leader tends to have stronger integrity and show
55
Servant leadership: Cons
• Formal authority may be lost: Because servant leaders get
down on such a personal level with their teams, their formal
authority is easily lost. This can become difficult when individuals
take advantage of their leader’s transparency. It can also cause
confusion when other leaders in the organization take a different
approach.
• Time intensive leadership style: Servant leadership requires a
lot of time, energy, and experience. Servant leaders have to know
their team members on a professional and personal level so they
can support them to the fullest.
• Team members may struggle with decision making: By
giving their team members opportunities to prove themselves, 56
Boundary Spanning Leadership
• Boundary spanning leadership refers to the capability of leaders to
establish direction, alignment, and commitment across the boundaries
of the organization.
• The major role of leaders is to communicate with employees and
groups within the organization and gradually moving forward to find
new frontiers to gain valuable information that can support for process
development.
Three main strategies of boundary spanning leaders are as
follows:
Managing boundaries
Forming common ground
Discovering new frontiers
57
Boundary Spanning Leadership: Characteristics
• Figurehead
• Liason
• Monitoring
• Disseminator
• Spokesperson
• Disturbance handler
• Negotiator
58
Team leadership
• A team leader is someone who provides direction,
instructions and guidance to a group of individuals for
the purpose of achieving a certain goal.
• Team leaders need to take initiation on each and every
activity of the organization. They should provide sources
and proper instruction to the subordinates so that team
work can accomplish according to plan.
• The major role of team leader is to develop team work
strategy, manage training programs, communicate clear
instructions, manage day to day operations, and get
feedback of team performance. 59
Team leadership
The common responsibilities or functions of team
leader are as follows:
Establishing culture
Promoting teamwork
Assigning jobs
Delegation of authority
Communicating information
Rational decision making
60
END OF CHAPTER VI
61

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MGT 232: Leadership and

• Unit-I Introduction to Organizational Behavior 6 LHS

• Unit-II Perception and Learning 4 LHS

• Unit-III Personality and Job Satisfaction 4 LHS

• Unit-IV Organization Conflict and Stress 5 LHS

• Unit-V Introduction to Leadership 4 LHS

• Unit-VI Theories of Effective Leadership & Contemporary Leadership

Such situation can result as follows:

Conditi Leader member Task Position Leadership

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