BEING AN EFFECTIVE LEADER 17 COPYRIGHT 2016 PEARSON EDUCATION, INC. 17-1 LEARNING OBJECTIVES 1. Define leader and leadership. Compare and contrast early theories of leadership. 3. Describe the three major contingency theories of leadership. Develop your skill at choosing an effective leadership style. 4. Describe contemporary views of leadership. 5. Discuss contemporary issues affecting leadership. Know how to prepare for an effective transition to a leadership position. 2. 1 COPYRIGHT 2016 PEARSON EDUCATION, INC. 17 - 2 WHO ARE LEADERS AND WHAT IS LEADERSHIP? Leader - someone who can influence others and who has managerial authority. Leadership - what leaders do; the process of influencing a group to achieve goals. Ideally, all managers should be leaders. 1 COPYRIGHT 2016 PEARSON EDUCATION, INC. 17 - 3 EARLY LEADERSHIP THEORIES Trait Theories (1920s -1930s) - Research focused on identifying personal characteristics that differentiated leaders from non-leaders was unsuccessful. - It proved impossible to identify a set of traits that would always differentiate a leader (the person) from a nonleader. 1 COPYRIGHT 2016 PEARSON EDUCATION, INC. 17 - 4 EXHIBIT 17-1 EIGHT TRAITS ASSOCIATED WITH LEADERSHIP COPYRIGHT 2016 PEARSON EDUCATION, INC. 17-5 EARLY LEADERSHIP THEORIES (CONT.) Behavioral theories - leadership theories that identify behaviors that differentiated effective leaders from ineffective leaders. University of Iowa Studies - Identified three leadership styles Autocratic Democratic Laissez-faire 1 COPYRIGHT 2016 PEARSON EDUCATION, INC. 17 - 6 UNIVERSITY OF IOWA STUDIES (CONT.) Autocratic style - A leader who dictates work methods, makes unilateral decisions, and limits employee participation. Democratic style - A leader who involves employees in decision-making, delegates authority, and uses feedback as an opportunity for coaching employees Laissez-faire style - A leader who lets the group make decisions and complete the work in whatever way it sees fit. 1 COPYRIGHT 2016 PEARSON EDUCATION, INC. 17 - 7 EARLY LEADERSHIP THEORIES (CONT.) The Ohio State Studies - Identified two dimensions of leader behavior: Initiating structure: the role of the leader in defining his or her role and the roles of group members. Consideration: the leader's mutual trust and respect for group members' ideas and feelings. 1 COPYRIGHT 2016 PEARSON EDUCATION, INC. 17 - 8 RESULTS OF OHIO STATE STUDIES High consideration/high structure leaders generally, but not always, achieved high scores on group task performance and satisfaction. Evidence indicated that situational factors appeared to strongly influence leadership effectiveness. 1 COPYRIGHT 2016 PEARSON EDUCATION, INC. 17 - 9 UNIVERSITY OF MICHIGAN STUDIES Identified two dimensions of leader behavior: - Employee oriented: emphasizing personal relationships - Production oriented: emphasizing task accomplishment Research findings: - Leaders who are employee oriented are strongly associated with high group productivity and high job satisfaction. 1 COPYRIGHT 2016 PEARSON EDUCATION, INC. 17 - 10 THE MANAGERIAL GRID Managerial grid - a two-dimensional grid for appraising leadership styles. Places managerial styles in five categories: - Impoverished management - Task management - Middle-of-the-road management - Country club management - Team management 1 COPYRIGHT 2016 PEARSON EDUCATION, INC. 17 - 11 EXHIBIT 17-2 BEHAVIORAL THEORIES OF LEADERSHIP 1 COPYRIGHT 2016 PEARSON EDUCATION, INC. 17 - 12 CONTINGENCY THEORIES OF LEADERSHIP Fieldler contingency model - a leadership theory proposing that effective group performance depends on the proper match between a leader's style and the degree to which the situation allows the leader to control and influence. 1 COPYRIGHT 2016 PEARSON EDUCATION, INC. 17 - 13 THE FIEDLER MODEL (CONT.) Least-preferred coworker (LPC) questionnaire - a questionnaire that measures whether a leader is task or relationship oriented. 1 COPYRIGHT 2016 PEARSON EDUCATION, INC. 17 - 14 THE FIEDLER MODEL (CONT.) 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 activities such as hiring, firing, discipline, promotions, and salary increases; rated as either strong or weak. 1 COPYRIGHT 2016 PEARSON EDUCATION, INC. 17 - 15 EXHIBIT 17-3 THE FIEDLER MODEL 1 COPYRIGHT 2016 PEARSON EDUCATION, INC. 17 - 16 HERSEY AND BLANCHARD'S SITUATIONAL LEADERSHIP THEORY (SLT) Situational Leadership Theory (SLT) - a leadership contingency theory that focuses on followers' readiness. Readiness - the extent to which followers have the ability and willingness to accomplish a specific task. 1 COPYRIGHT 2016 PEARSON EDUCATION, INC. 17 - 17 SLT LEADERSHIP STYLES 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. 1 COPYRIGHT 2016 PEARSON EDUCATION, INC. 17 - 18 SLT LEADERSHIP STYLES (CONT.) Participating (low task-high relationship): The leader and followers share in decisionmaking; the main role of the leader is facilitating and communicating. Delegating (low task-low relationship): The leader provides little direction or support. 1 COPYRIGHT 2016 PEARSON EDUCATION, INC. 17 - 19 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. 1 COPYRIGHT 2016 PEARSON EDUCATION, INC. 17 - 20 FOUR STAGES OF FOLLOWER READINESS (CONT.) 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. 1 COPYRIGHT 2016 PEARSON EDUCATION, INC. 17 - 21 PATH-GOAL MODEL - a leadership theory that says 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. Path-goal theory 1 COPYRIGHT 2016 PEARSON EDUCATION, INC. 17 - 22 PATH-GOAL MODEL (CONT.) 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. COPYRIGHT 2016 PEARSON EDUCATION, INC. 1 17 - 23 PATH-GOAL MODEL (CONT.) Four leadership behaviors (cont.) - 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. 1 COPYRIGHT 2016 PEARSON EDUCATION, INC. 17 - 24 EXHIBIT 17-4 PATH-GOAL MODEL 1 COPYRIGHT 2016 PEARSON EDUCATION, INC. 17 - 25 CONTEMPORARY VIEWS OF LEADERSHIP Leader-member exchange theory (LMX) - the leadership theory that says leaders create in-groups and out-groups and those in the ingroup will have higher performance ratings, less turnover, and greater job satisfaction. 1 COPYRIGHT 2016 PEARSON EDUCATION, INC. 17 - 26 CONTEMPORARY VIEWS OF LEADERSHIP (CONT.) Transactional leaders - leaders who lead primarily by using social exchanges (or transactions). Transformational leaders - leaders who stimulate and inspire (transform) followers to achieve extraordinary outcomes. 1 COPYRIGHT 2016 PEARSON EDUCATION, INC. 17 - 27 CONTEMPORARY VIEWS OF LEADERSHIP (CONT.) Charismatic leader - an enthusiastic, selfconfident leader whose personality and actions influence people to behave in certain ways. Visionary leadership - the ability to create and articulate a realistic, credible, and attractive vision of the future that improves upon the present situation. 1 COPYRIGHT 2016 PEARSON EDUCATION, INC. 17 - 28 CONTEMPORARY VIEWS OF LEADERSHIP (CONT.) Team Leadership - many leaders are not equipped to handle the change to employee teams. A team leader's job is to focus on two priorities: Managing the team's external boundary. 2. Facilitating the team process. 1. 1 COPYRIGHT 2016 PEARSON EDUCATION, INC. 17 - 29 EXHIBIT 17-5 TEAM LEADERSHIP ROLES 1 COPYRIGHT 2016 PEARSON EDUCATION, INC. 17 - 30 LEADERSHIP ISSUES IN THE TWENTY-FIRST CENTURY Managing Power - Legitimate power - the power a leader has as a result of his or her position. - Coercive power - the power a leader has to punish or control. - Reward power - the power to give positive benefits or rewards. 1 COPYRIGHT 2016 PEARSON EDUCATION, INC. 17 - 31 LEADERSHIP ISSUES IN THE TWENTY-FIRST CENTURY (CONT.) Managing Power (cont.) - Expert power - the influence a leader can exert as a result of his or her expertise, skills, or knowledge. - Referent power - the power of a leader that arises because of a person's desirable resources or admired personal traits. 1 COPYRIGHT 2016 PEARSON EDUCATION, INC. 17 - 32 LEADERSHIP ISSUES IN THE TWENTY-FIRST CENTURY (CONT.) Developing Trust - Credibility - the degree to which followers perceive someone as honest, competent, and able to inspire. - Trust - the belief in the integrity, character, and ability of a leader. 1 COPYRIGHT 2016 PEARSON EDUCATION, INC. 17 - 33 LEADERSHIP ISSUES IN THE TWENTY-FIRST CENTURY (CONT.) Five Dimensions of the Concept of Trust - Integrity: honesty and truthfulness - Competence: technical and interpersonal knowledge and skills - Consistency: reliability, predictability, and good judgment in handling situations - Loyalty: willingness to protect a person, physically and emotionally - Openness: willingness to share ideas and information freely 1 COPYRIGHT 2016 PEARSON EDUCATION, INC. 17 - 34 EXHIBIT 17-6 BUILDING TRUST 1 COPYRIGHT 2016 PEARSON EDUCATION, INC. 17 - 35 LEADERSHIP ISSUES IN THE TWENTY-FIRST CENTURY (CONT.) Empowering Employees - Empowerment - increasing the decisionmaking discretion of workers such that teams can make key operating decisions in developing budgets, scheduling workloads, controlling inventories, and solving quality problems. 1 COPYRIGHT 2016 PEARSON EDUCATION, INC. 17 - 36 LEADERSHIP ISSUES IN THE TWENTY-FIRST CENTURY (CONT.) Leading Across Cultures - Effective leaders do not use a single style. They adjust their style to the situation. - National culture is certainly an important situational variable in determining which leadership style will be most effective. 1 COPYRIGHT 2016 PEARSON EDUCATION, INC. 17 - 37 EXHIBIT 17-7 CROSS-CULTURAL LEADERSHIP 1 COPYRIGHT 2016 PEARSON EDUCATION, INC. 17 - 38 BECOMING AN EFFECTIVE LEADER Leader Training - Training is more likely to be successful with individuals who are high self-monitors than those who are low self-monitors. - Individuals with higher levels of motivation to lead are more receptive to leadership development opportunities. 1 COPYRIGHT 2016 PEARSON EDUCATION, INC. 17 - 39 MONITORING AND CONTROLLING 18 COPYRIGHT 2016 PEARSON EDUCATION, INC. 18 -1 17-40 LEARNING OBJECTIVES 1. 2. 3. 4. 5. Explain the nature and importance of control. Describe the three steps in the control process. Explain how organizational and employee performance are measured. Know how to be effective at giving feedback. Describe tools used to measure organizational performance. Discuss contemporary issues in control. Develop your skill at dealing with difficult people. 1 COPYRIGHT 2016 PEARSON EDUCATION, INC. 18 - 2 WHAT IS CONTROLLING? Controlling - the process of monitoring, comparing, and correcting work performance. The Purpose of Control - To ensure that activities are completed in ways that lead to the accomplishment of organizational goals. 1 COPYRIGHT 2016 PEARSON EDUCATION, INC. 18 - 3 WHY IS CONTROLLING IMPORTANT? As the final link in management functions: - Planning - controls let managers know whether their goals and plans are on target and what future actions to take. - Empowering employees - control systems provide managers with information and feedback on employee performance. - Protecting the workplace - controls enhance physical security and help minimize workplace disruptions. 1 COPYRIGHT 2016 PEARSON EDUCATION, INC. 18 - 4 EXHIBIT 18-1 PLANNING-CONTROLLING LINK 1 COPYRIGHT 2016 PEARSON EDUCATION, INC. 18 - 5 THE CONTROL PROCESS Control process - a three-step process of measuring actual performance, comparing actual performance against a standard, and taking managerial action to correct deviations or inadequate standards. 1 COPYRIGHT 2016 PEARSON EDUCATION, INC. 18 - 6 EXHIBIT 18-2 THE CONTROL PROCESS 1 COPYRIGHT 2016 PEARSON EDUCATION, INC. 18 - 7 THE CONTROL PROCESS (CONT.) Step 1: Measuring Actual Performance - How We Measure - personal observations, statistical reports, oral reports, and written reports. - What We Measure - what is measured is probably more critical to the control process than how it's measured. COPYRIGHT 2016 PEARSON EDUCATION, INC. 1 18 - 8 EXHIBIT 18-3 SOURCES OF INFORMATION FOR MEASURING PERFORMANCE 1 COPYRIGHT 2016 PEARSON EDUCATION, INC. 18 - 9 THE CONTROL PROCESS (CONT.) Step 2: Comparing Actual Performance Against the Standard: - Determining the degree of variation between actual performance and the standard. - Range of variation - the acceptable parameters of variance between actual performance and the standard. 1 COPYRIGHT 2016 PEARSON EDUCATION, INC. 18 - 10 EXHIBIT 18-4 ACCEPTABLE RANGE OF VARIATION 1 COPYRIGHT 2016 PEARSON EDUCATION, INC. 18 - 11 EXHIBIT 18-5 GREEN EARTH GARDENING SUPPLYJUNE SALES 1 COPYRIGHT 2016 PEARSON EDUCATION, INC. 18 - 12 THE CONTROL PROCESS (CONT.) Step 3: Taking Managerial Action - Immediate corrective action - corrective action that corrects problems at once in order to get performance back on track. - Basic corrective action - corrective action that looks at how and why performance deviated before correcting the source of deviation. 1 COPYRIGHT 2016 PEARSON EDUCATION, INC. 18 - 13 THE CONTROL PROCESS (CONT.) Step 3 (cont.) - Revise the Standard - if performance consistently exceeds the goal, then a manager should look at whether the goal is too easy and needs to be raised. - Managers must be cautious about revising a standard downward. 1 COPYRIGHT 2016 PEARSON EDUCATION, INC. 18 - 14 EXHIBIT 18-6 MANAGERIAL DECISIONS IN THE CONTROL PROCESS 1 COPYRIGHT 2016 PEARSON EDUCATION, INC. 18 - 15 WHAT IS ORGANIZATIONAL PERFORMANCE? Performance - the end result of an activity. Organizational performance - the accumulated results of all the organization's work activities. 1 COPYRIGHT 2016 PEARSON EDUCATION, INC. 18 - 16 MEASURES OF ORGANIZATIONAL PERFORMANCE Productivity - the amount of goods or services produced divided by the inputs needed to generate that output. Organizational effectiveness - a measure of how appropriate organizational goals are and how well those goals are being met. 1 COPYRIGHT 2016 PEARSON EDUCATION, INC. 18 - 17 EXHIBIT 18-7 POPULAR INDUSTRY AND COMPANY RANKINGS 1 COPYRIGHT 2016 PEARSON EDUCATION, INC. 18 - 18 CONTROLLING FOR EMPLOYEE PERFORMANCE Disciplinary actions - actions taken by a manager to enforce the organization's work standards and regulations. Delivering Effective Performance Feedback - managers need to provide their employees with feedback so that the employees know where they stand in terms of their work. 1 COPYRIGHT 2016 PEARSON EDUCATION, INC. 18 - 19 EXHIBIT 18-8 TYPES OF DISCIPLINE PROBLEMS AND EXAMPLES OF EACH 1 COPYRIGHT 2016 PEARSON EDUCATION, INC. 18 - 20 TOOLS FOR MEASURING ORGANIZATIONAL PERFORMANCE Feed forward control - control that takes place before a work activity is done. Concurrent control - control that takes place while a work activity is in progress. Management by walking around - a term used to describe when a manager is out in the work area interacting directly with employees. Feedback control - control that takes place after a work activity is done. 1 COPYRIGHT 2016 PEARSON EDUCATION, INC. 18 - 21 EXHIBIT 18-9 TYPES OF CONTROL 1 COPYRIGHT 2016 PEARSON EDUCATION, INC. 18 - 22 FINANCIAL CONTROLS Traditional Controls - Ratio analysis Liquidity Leverage Activity Profitability - Budget Analysis Quantitative standards Deviations 1 COPYRIGHT 2016 PEARSON EDUCATION, INC. 18 - 23 EXHIBIT 18-10 POPULAR FINANCIAL RATIOS 1 COPYRIGHT 2016 PEARSON EDUCATION, INC. 18 - 24 INFORMATION CONTROLS Management Information System (MIS) - a system used to provide management with needed information on a regular basis. Data - an unorganized collection of raw, unanalyzed facts (e.g., an unsorted list of customer names). Information - data that has been analyzed and organized such that it has value and relevance to managers. 1 COPYRIGHT 2016 PEARSON EDUCATION, INC. 18 - 25 THE BALANCED SCORECARD Balanced scorecard - a performance measurement tool that examines more than just the financial perspective. - Measures a company's performance in four areas: Financial Customer Internal processes People/innovation/growth assets 1 COPYRIGHT 2016 PEARSON EDUCATION, INC. 18 - 26 BENCHMARKING OF BEST PRACTICES Benchmarking - the search for the best practices among competitors or non-competitors that lead to their superior performance. Benchmark - the standard of excellence to measure and compare against. 1 COPYRIGHT 2016 PEARSON EDUCATION, INC. 18 - 27 EXHIBIT 18-11 SUGGESTIONS FOR INTERNAL BENCHMARKING 1 COPYRIGHT 2016 PEARSON EDUCATION, INC. 18 - 28 CONTEMPORARY ISSUES IN CONTROL Adjusting Controls for Cross-Cultural Differences and Global Turmoil: - Control techniques can be quite different for different countries. - Differences are primarily in the measurement and corrective action steps of the control process. - Managers in foreign countries also need to be aware of constraints on corrective actions they can take. 1 COPYRIGHT 2016 PEARSON EDUCATION, INC. 18 - 29 CONTEMPORARY ISSUES IN CONTROL (CONT.) Workplace privacy - Employers can (and do) read your e-mail tap your telephone monitor your work by computer store and review computer files monitor you in an employee bathroom or dressing room track your whereabouts in a company vehicle 1 COPYRIGHT 2016 PEARSON EDUCATION, INC. 18 - 30 CONTEMPORARY ISSUES IN CONTROL (CONT.) Employee theft - any unauthorized taking of company property by employees for their personal use. Workplace Violence - the U.S. National Institute of Occupational Safety and Health still says that each year, some 2 million American workers are victims of some form of workplace violence. 1 COPYRIGHT 2016 PEARSON EDUCATION, INC. 18 - 31 EXHIBIT 18-12 CONTROLLING EMPLOYEE THEFT 1 COPYRIGHT 2016 PEARSON EDUCATION, INC. 18 - 32 EXHIBIT 18-13 CONTROLLING WORKPLACE VIOLENCE 1 COPYRIGHT 2016 PEARSON EDUCATION, INC. 18 - 33 EXHIBIT 18-13 CONTROLLING WORKPLACE VIOLENCE (CONT.) 1 COPYRIGHT 2016 PEARSON EDUCATION, INC. 18 - 34 CONTEMPORARY ISSUES IN CONTROL (CONT.) Controlling Customer Interactions Service profit chain - the service sequence from employees to customers to profit. 1 COPYRIGHT 2016 PEARSON EDUCATION, INC. 18 - 35 CONTEMPORARY ISSUES IN CONTROL (CONT.) Corporate Governance - the system used to govern a corporation so that the interests of corporate owners are protected. The Role of Boards of Directors - a group, independent from management, looking out for the interests of shareholders who were not involved in the day-to-day management of the organization. 1 COPYRIGHT 2016 PEARSON EDUCATION, INC. 18 - 36 LECTURE 9- CHAPTER 17 17-1. Differentiate between transactional and transformational leaders and between charismatic and visionary leaders. 17-2. Do you think that most managers in real life use a contingency approach to increase their leadership effectiveness? Explain. COPYRIGHT 2016 PEARSON EDUCATION, INC. 1 LECTURE 9- CHAPTER 18 18-1. Discuss the various types of tools used to monitor and measure organizational performance. 18-2. \"Every individual employee in an organization plays a role in controlling work activities.\" Do you agree with this statement, or do you think control is something that only managers are responsible for? Explain COPYRIGHT 2016 PEARSON EDUCATION, INC. 1