LDR531

Indicators of Leadership effectiveness

Like definitions of leadership, conceptions of leader effectiveness differ from one writer to another. The criteria selected to evaluate leadership effectiveness reflect a researcher's explicit or implicit conception of leadership. Most researchers evaluate leadership effectiveness in terms of the consequences of influence on a single individual, a team or group, or an organization. One very relevant indicator of leadership effectiveness is the extent to which the performance of the team or organization is enhanced and the attainment of goals is facilitated (Bass, 2008; Kaiser, Hogan & Craig, 2008). Examples of objective measures of performance include sales, net profits, profit margin, market share, return on investment, return on assets, productivity, cost per unit of output, costs in relation to budgeted expenditures, and change in the value of corporate stock. Subjective measures of effectiveness include ratings obtained from the leader's superiors, peers, or subordinates. Follower attitudes and perceptions of the leader are another common indicator of leader effectiveness, and they are usually measured with questionnaires or interviews. How well does the leader satisfy the needs and expectations of followers? Do they like, respect, and admire the leader? Do they trust the leader and perceive him or her to have high integrity? Are they strongly committed to carrying out the leader's requests, or will they resist, ignore, or subvert them? Does the leader improve the quality of work life, build the self-confidence of followers, increase their skills, and contribute to their psychological growth and development? Follower attitudes, perceptions, and beliefs also provide an indirect indicator of dissatisfaction and hostility toward the leader. Examples of such indicators include absenteeism, voluntary turnover, grievances, complaints to higher management, requests for transfer, work slowdowns, and deliberate sabotage of equipment and facilities. Leader effectiveness is occasionally measured in terms of the leader's contribution to the quality of group processes, as perceived by followers or by outside observers. Does the leader enhance group cohesiveness, member cooperation, member commitment, and member confidence that the group can achieve its objectives? Does the leader enhance problem solving and decision making by the group, and help to resolve disagreements and conflicts in a constructive way? Does the leader contribute to the efficiency of role specialization, the organization of activities, the accumulation of resources, and the readiness of the group to deal with change and crises? A final type of criterion for leadership effectiveness is the extent to which a person has a successful career as a leader. Is the person promoted rapidly to positions of higher authority? Does the person serve a full term in a leadership position, or is he or she removed or forced to resign? For elected positions in organizations, is a leader who seeks reelection successful? It is difficult to evaluate the effectiveness of a leader when there are so many alternative measures of effectiveness, and it is not clear which measure is most relevant. Some researchers attempt to combine several measures into a single, composite criterion, but this approach requires subjective judgments about how to assign a weight to each measure. Multiple criteria are especially troublesome when they are negatively correlated. A negative correlation means that trade-offs occur among criteria, such that as one increases, others decrease. For example, increasing sales and market share (e.g., by reducing price and increasing advertising) may result in lower profits. Likewise, an increase in production output (e.g., by inducing people to work faster) may reduce product quality or employee satisfaction.

Employee Involvement

Employee involvement is a participative process that uses employees' input to increase their commitment to the organization's success. The logic is that if we engage workers in decisions that affect them and increase their autonomy and control over their work lives, they will become more motivated, more committed to the organization, more productive, and more satisfied with their jobs.39 Employee involvement programs differ among countries.40 A study of four countries, including the United States and India, confirmed the importance of modifying practices to reflect national culture.41 While U.S. employees readily accepted employee involvement programs, managers in India who tried to empower their employees were rated low by those employees. These reactions are consistent with India's high power-distance culture, which accepts and expects differences in authority. Similarly, Chinese workers who were very accepting of traditional Chinese values showed few benefits from participative decision making, but workers who were less traditional were more satisfied and had higher performance ratings under participative management.

Environmental Scanning

Environmental scanning (also called external monitoring) includes collecting information about relevant events and changes in the external environment, identifying threats and opportunities for the leader's group or organization, and identifying best practices that can be imitated or adapted (see Chapters 4 and 11). The scanning may be carried out by using a leader's network of contacts, by studying relevant publications and industry reports, by conducting market research, and by studying the decisions and actions of competitors and opponents.

The LPC Contingency Model

Fiedler's (1967; 1978) LPC Contingency Model describes how the situation moderates the effects on group performance of a leader trait called the least preferred coworker (LPC) score. The interpretation of LPC scores has changed several times over the years, and what the measure actually means is still questionable. Fiedler's (1978) interpretation is that LPC scores reveal a leader's motive hierarchy. A high LPC leader is strongly motivated to have close, interpersonal relationships and will act in a considerate, supportive manner if relationships need to be improved. Achievement of task objectives is a secondary motive that will become important only if the primary affiliation motive is already satisfied by close, personal relationships with subordinates. A low LPC leader is primarily motivated by achievement of task objectives and will emphasize task-oriented behavior whenever task problems arise. The secondary motive of establishing good relations with subordinates will become important only if the group is performing well and has no serious task-related problems. An alternative interpretation suggested by Rice (1978) emphasizes leader values rather than motives. According to this interpretation, leaders with a low LPC score value task achievement more than interpersonal relations, whereas leaders with high LPC scores value interpersonal relations more than task achievement (Rice, 1978). These value priorities are assumed to be reflected in the amount of task-oriented and relations-oriented behaviors used by leaders. The relationship between a leader's LPC score and group performance depends on a complex situational variable called situational favorability, which is jointly determined by task structure, leader position power, and the quality of leader-member relations. The situation is most favorable when the leader has substantial position power, the task is highly structured, and relations with subordinates are good. According to the theory, low LPC leaders are more effective when the situation is either very favorable or very unfavorable, whereas high LPC leaders are more effective when there is a moderate level of situational favorability. The theory does not clearly identify mediating variables to explain how leader LPC and situational favorability jointly determine group performance. Two different approaches can be used by a leader to maximize effectiveness. One approach is to select the appropriate type of behavior for the situation, and the other approach is to try to change the situation to fit the leader's preferred pattern of behavior.

Situational Leadership Theory

Hersey and Blanchard (1977) proposed a contingency theory called Situational Leadership Theory. It specifies the appropriate type of leadership behavior for a subordinate in various situations. Behavior was defined in terms of directive and supportive leadership, and a revised version of the theory also included decision procedures (Graef, 1997). The situational variable is subordinate maturity, which includes the person's ability and confidence to do a task. According to the theory, for a low-maturity subordinate the leader should use substantial task-oriented behavior such as defining roles, clarifying standards and procedures, directing the work, and monitoring progress. As subordinate maturity increases up to a moderate level, the leader can decrease the amount of task-oriented behavior and increase the amount of relations-oriented behavior (e.g., consult with the subordinate, provide more praise and attention). For high-maturity subordinates, the leader should use extensive delegation and only a limited amount of directive and supportive behavior. A high-maturity subordinate has the ability to do the work without much direction or monitoring by the leader, and the confidence to work without much supportive behavior by the leader. The primary focus of the theory is on short-term behavior, but over time the leader may be able to increase subordinate maturity with a developmental intervention that builds the person's skills and confidence. How long it takes to increase subordinate maturity depends on the complexity of the task and the subordinate's initial skill and confidence. It may take as little as a few days or as long as a few years to advance a subordinate from low to high maturity on a given task. Hersey and Blanchard recognized that subordinate maturity may also regress, requiring a flexible adjustment of the leader's behavior. For example, after a personal tragedy such as a death of loved ones, a subordinate who was highly motivated may become apathetic. In this situation the leader should increase supervision and use a developmental intervention designed to restore maturity to the former high level.

Job Rotation

If employees suffer from overroutinization of their work, one alternative is job rotation, or the periodic shifting of an employee from one task to another with similar skill requirements at the same organizational level (also called cross-training). At Singapore Airlines, a ticket agent may take on the duties of a baggage handler. Extensive job rotation is among the reasons Singapore Airlines is rated one of the best airlines in the world and a highly desirable place to work. Many manufacturing firms have adopted job rotation as a means of increasing flexibility and avoiding layoffs.7 Managers at Apex Precision Technologies, a custom-machine shop in Indiana, train workers on all the company's equipment so they can move around as needed in response to incoming orders. Although job rotation has often been conceptualized as an activity for assembly line and manufacturing employees, many organizations use job rotation for new managers to help them get a picture of the whole business as well.8 The strengths of job rotation are that it reduces boredom, increases motivation, and helps employees better understand how their work contributes to the organization. An indirect benefit is that employees with a wider range of skills give management more flexibility in scheduling work, adapting to changes, and filling vacancies.9 International evidence from Italy, Britain, and Turkey does show that job rotation is associated with higher levels of organizational performance in manufacturing settings.10 However, job rotation has drawbacks. Training costs increase, and moving a worker into a new position reduces productivity just when efficiency at the prior job is creating organizational economies. Job rotation also creates disruptions when members of the work group have to adjust to the new employee. And supervisors may also have to spend more time answering questions and monitoring the work of recently rotated employees.

Telecommuting

It might be close to the ideal job for many people. No commuting, flexible hours, freedom to dress as you please, and few or no interruptions from colleagues. It's called telecommuting, and it refers to working at home at least 2 days a week on a computer linked to the employer's office.29 (A closely related term—the virtual office—describes working from home on a relatively permanent basis.) The U.S. Department of the Census estimated there had been a 25 percent increase in self-employed home-based workers from 1999 to 2005, and a 20 percent increase in employed workers who work exclusively from home.30 One recent survey of more than 5,000 HR professionals found that 35 percent of organizations allowed employees to telecommute at least part of the time, and 21 percent allowed employees to telecommute full-time.31 Well-known organizations that actively encourage telecommuting include AT&T, IBM, American Express, Sun Microsystems, and a number of U.S. government agencies.32 What kinds of jobs lend themselves to telecommuting? There are three categories: routine information-handling tasks, mobile activities, and professional and other knowledge-related tasks.33 Writers, attorneys, analysts, and employees who spend the majority of their time on computers or the telephone—such as telemarketers, customer-service representatives, reservation agents, and product-support specialists—are natural candidates. As telecommuters, they can access information on their computers at home as easily as in the company's office. The potential pluses of telecommuting include a larger labor pool from which to select, higher productivity, less turnover, improved morale, and reduced office-space costs. A positive relationship exists between telecommuting and supervisor performance ratings, but any relationship between telecommuting and potentially lower turnover intentions has not been substantiated in research to date.34 The major downside for management is less direct supervision of employees. In today's team-focused workplace, telecommuting may make it more difficult to coordinate teamwork and can reduce knowledge transfer in organizations.35 From the employee's standpoint, telecommuting can offer a considerable increase in flexibility and job satisfaction—but not without costs.36 For employees with a high social need, telecommuting can increase feelings of isolation and reduce job satisfaction. And all telecommuters are vulnerable to the "out of sight, out of mind" effect.37 Employees who aren't at their desks, who miss meetings, and who don't share in day-to-day informal workplace interactions may be at a disadvantage when it comes to raises and promotions.

Leadership Substitues Theory

Kerr and Jermier (1978) identified aspects of the situation that make task-oriented behavior ("instrumental leadership") or relations-oriented behavior ("supportive leadership") by the designated leader redundant or ineffective. Later versions included additional behaviors such as contingent reward behavior (Howell, Bowen, Dorfman, Kerr, & Podsakoff, 1990; Podsakoff, Niehoff, MacKenzie, & Williams, 1993). The situational variables include characteristics of the subordinates, task, and the organization that serve as substitutes by directly affecting the dependent variable and making the leader behavior redundant. The substitutes for instrumental leadership include a highly structured and repetitive task, extensive rules and standard procedures, and extensive prior training and experience for subordinates. The substitutes for supportive leadership include a cohesive work group in which the members support each other, and an intrinsically satisfying task that is not stressful. In a situation with many substitutes, the potential impact of leader behavior on subordinate motivation and satisfaction may be greatly reduced. For example, little direction is necessary when subordinates have extensive prior experience or training, and they already possess the skills and knowledge to know what to do and how to do it. Likewise, professionals who are internally motivated by their values, needs, and ethics do not need to be encouraged by the leader to do high-quality work. Some situational variables (called neutralizers) prevent a leader from using forms of behavior that would improve subordinate satisfaction or unit performance. For example, a leader with no authority to change ineffective work procedures cannot make changes that would improve efficiency. Howell et al. (1990) contend that some situations have so many neutralizers that it is difficult or impossible for a leader to succeed. In this event, the remedy is to change the situation and make it more favorable for the leader by removing neutralizers, and in some cases by increasing substitutes.

Other Bases for Comparing Leadership Theories

Key variables and level of conceptualization are not the only ways to compare leadership theories. This section briefly describes three other types of distinctions commonly used in the leadership literature: (1) leader-centered versus follower-centered theory, (2) universal versus contingency theory, and (3) descriptive versus prescriptive theory. Each type of distinction is better viewed as a continuum along which a theory can be located, rather than as a sharp dichotomy. For example, it is possible for a theory to have some descriptive elements as well as some prescriptive elements, some universal elements as well as some contingency elements, and an equal focus on leaders and followers.

Rokeach Value Survey/Instrumental Values/Terminal Values

Milton Rokeach created the Rokeach Value Survey (RVS).65 It consists of two sets of values, each containing 18 individual value items. One set, called terminal values, refers to desirable end-states. These are the goals a person would like to achieve during his or her lifetime. The other set, called instrumental values, refers to preferable modes of behavior, or means of achieving the terminal values. Some examples of terminal values in the Rokeach Value Survey are: Prosperity and economic success, Freedom, Health and well-being, World peace, Social recognition, and Meaning in life. The types of instrumental values illustrated in RVS are Self-improvement, Autonomy and self-reliance, Personal discipline, kindness, Ambition, and Goal-orientation. Several studies confirm that RVS values vary among groups.66 People in the same occupations or categories (corporate managers, union members, parents, students) tend to hold similar values. One study compared corporate executives, members of the steelworkers' union, and members of a community activist group. Although there was a good deal of overlap among them,67 there were also significant differences (see Exhibit 5-3). The activists ranked "equality" as their most important terminal value; executives and union members ranked this value 12 and 13, respectively. Activists ranked "helpful" as their second-highest instrumental value. The other two groups both ranked it 14. Because executives, union members, and activists all have a vested interest in what corporations do, these differences can create serious conflicts when groups contend with each other over an organization's economic and social policies.

Change Oriented Behaviors

Monitor the external environment to detect threats and opportunities. Interpret events to explain the need for change. Study competitors and outsiders to get ideas for improvements. Envision exciting new possibilities for the organization. Encourage people to view problems or opportunities in a different way. Develop innovative new strategies linked to core competencies. Encourage and facilitate innovation and entrepreneurship in the organization. Encourage and facilitate collective learning in the team or organization. Experiment with new approaches for achieving objectives. Make symbolic changes that are consistent with a new vision or strategy. Encourage and facilitate efforts to implement major change. Announce and celebrate progress in implementing change.

Ambiguous description of relationships

Most of the contingency theories do not clearly indicate whether the form of the relationship between the independent variable and the dependent variable changes as the situational variable increases (Podsakoff, MacKenzie, Ahearne, & Bommer, 1995). A leader behavior that has a positive effect on the dependent variable in some situations may have no effect or a negative effect in other situations. Thus, a high level of a leader behavior may be optimal in one situation, but a moderate or low level of the behavior may be optimal in a different situation. A contingency theory should identify situations where the form of the relationship changes and too much of the behavior (or any amount of it) has a negative effect rather than a positive effect.

Trait Approach

One of the earliest approaches for studying leadership was the trait approach. This approach emphasizes attributes of leaders such as personality, motives, values, and skills. Underlying this approach was the assumption that some people are natural leaders, endowed with certain traits not possessed by other people. Early leadership theories attributed managerial success to extraordinary abilities such as tireless energy, penetrating intuition, uncanny foresight, and irresistible persuasive powers. Hundreds of trait studies conducted during the 1930s and 1940s sought to discover these elusive qualities, but this massive research effort failed to find any traits that would guarantee leadership success. One reason for the failure was a lack of attention to mediating variables in the causal chain that could explain how traits could affect a delayed outcome such as group performance or leader advancement. The predominant research method was to look for a significant correlation between individual leader attributes and a criterion of leader success, without examining any explanatory processes. However, as evidence from better designed research slowly accumulated over the years, researchers made progress in discovering how leader attributes are related to leadership behavior and effectiveness. A more recent trait approach examines leader values that are relevant for explaining ethical leadership.

Long Term Effects on Group Performance

Over a longer period of time, leaders can make larger improvements in group performance by modifying the situation to make it more favorable. Effective leaders act to reduce constraints, increase substitutes, and reduce the importance of mediating variables that are not amenable to improvement. These effects usually involve sequences of related behaviors carried out over a long time period. More research has been conducted on short-term behaviors by leaders than on the long-term behaviors to improve the situation. Useful insights are provided by literature on leading change, making strategic decisions, and representing the team or work unit (see Chapters 4, 10, and 11). Some examples of possible actions a leader may take to improve the situation are as follows: Gain more access to resources needed for the work by cultivating better relationships with suppliers, finding alternative sources, and reducing dependence on unreliable sources. Gain more control over the demand for the unit's products and services by finding new customers, opening new markets, advertising more, and modifying the products or services to be more acceptable to clients and customers. Initiate new, more profitable activities for the work unit that will make better use of personnel, equipment, and facilities. Initiate long-term improvement programs to upgrade equipment, and facilities in the work unit (e.g., replace old equipment, implement new technology). Improve selection procedures to increase the level of employee skills and commitment. Modify the formal structure of the work unit to solve chronic problems and reduce demands on the leader for short-term problem solving.

Power Influence Approach

Power-influence research examines influence processes between leaders and other people. Like most research on traits and behavior, some of the power-influence research takes a leader-centered perspective with an implicit assumption that causality is unidirectional (leaders act and followers react). This research seeks to explain leadership effectiveness in terms of the amount and type of power possessed by a leader and how power is exercised. Power is viewed as important not only for influencing subordinates, but also for influencing peers, superiors, and people outside the organization, such as clients and suppliers. The favorite methodology has been the use of survey questionnaires to relate leader power to various measures of leadership effectiveness. Other power-influence research used questionnaires and descriptive incidents to determine how leaders influence the attitudes and behavior of followers. The study of influence tactics can be viewed as a bridge linking the power-influence approach and the behavior approach. The use of different influence tactics is compared in terms of their relative effectiveness for getting people to do what the leader wants. Participative leadership is concerned with power sharing and empowerment of followers, but it is firmly rooted in the tradition of behavior research as well. Many studies used questionnaires to correlate subordinate perceptions of participative leadership with the criteria of leadership effectiveness such as subordinate satisfaction, effort, and performance. Laboratory and field experiments compared autocratic and participative leadership styles. Finally, descriptive case studies of effective managers examined how they use consultation and delegation to give people a sense of ownership for decisions.

Relations oriented Behaviors

Provide support and encouragement to someone with a difficult task. Express confidence that a person or group can perform a difficult task. Socialize with people to build relationships. Recognize contributions and accomplishments. Provide coaching and mentoring when appropriate. Consult with people on decisions affecting them. Empower people to determine the best way to do a task. Keep people informed about actions affecting them. Help resolve conflicts in a constructive way. Use symbols, ceremonies, rituals, and stories to build team identity. Encourage mutual trust and cooperation among members of the work unit. Recruit competent new members for the team or organization.

Critical Incidents

Several types of research methods have been used to study the effects of leader behavior. By far, the most common method is the use of survey research with behavior description questionnaires filled out by subordinates. Each subordinate indicates how often the leader has been using the behaviors, and then the behavior scales are correlated with measures of criterion variables such as subordinate satisfaction, turnover, task commitment, and performance. Another type of study uses descriptions of leader behavior obtained from observation, diaries, critical incidents, or interviews with leaders and subordinates. The behavior descriptions are coded into categories and related to measures of leader effectiveness. Case studies and biographies of famous leaders can also be content analyzed to identify behaviors used by effective (or ineffective) leaders. A small number of studies have involved an experiment in which leader behavior is manipulated by the researchers to determine how it affects the attitudes or performance of subordinates. Some laboratory experiments used student groups with leaders who were instructed to use a designated pattern of behavior. Other lab experiments asked people to read scenarios or view a video with leaders who use different patterns of behavior, then indicate how they would likely respond to each type of leader. A few field experiments involved leaders in actual organizations who were trained to use particular types of behavior. Each type of method has advantages and limitations, and the most appropriate method depends in part on the research question. The use of multiple methods is highly recommended to minimize the limitations of a single method. Unfortunately, multimethod studies are very rare. It is more common for researchers to select a method that is familiar, well accepted, and easy to use rather than determining the most appropriate method for their research question.

Planning

Short-term planning of work activities means deciding what to do, how to do it, who will do it, and when it will be done. The purpose of planning is to ensure efficient organization of the work unit, coordination of activities, and effective utilization of resources. Planning is a broadly defined behavior that includes making decisions about objectives, priorities, strategies, organization of the work, assignment of responsibilities, scheduling of activities, and allocation of resources among different activities according to their relative importance. Special names are sometimes used for subvarieties of planning. For example, operational planning is the scheduling of routine work and determination of task assignments for the next day or week. Action planning is the development of detailed action steps and schedules for implementing a new policy or carrying out a project. Contingency planning is the development of procedures for avoiding or coping with potential problems or disasters. Finally, planning also includes determining how to allocate time to different responsibilities and activities ("time management"). Planning is mostly a cognitive activity involving processing of information, analyzing, and deciding. Planning seldom occurs in a single behavior episode; instead it tends to be a prolonged process that occurs over a period of weeks or months. We saw in Chapter 2 that most planning involves formulation of informal and implicit agendas, rather than formal, written documents and agreements. Because planning is a cognitive activity that seldom occurs as a single discrete episode, it is difficult to observe (Snyder & Glueck, 1980). Nevertheless, some observable aspects include writing plans, preparing written budgets, developing written schedules, and meeting with others to formulate objectives and strategies. Planning is most observable when a manager takes action to implement plans by communicating them to others and making specific task assignments. The importance of planning and organizing has long been recognized in the management literature (Carroll & Gillen, 1987; Drucker, 1974; Fayol, 1949; Quinn, 1980; Urwick, 1952). Evidence of a relationship between planning and managerial effectiveness is provided by a variety of different types of studies (e.g., Boyatzis, 1982; Carroll & Gillen, 1987; Kim & Yukl, 1995; Kotter, 1982; Morse & Wagner, 1978; Shipper & Wilson, 1992; Yukl, Wall, & Lepsinger, 1990). Recommended steps for action planning are shown in Table 3-4).

Multiple linkage model

Six contingency theories are described in this chapter, including path-goal theory, leadership substitutes theory, situational leadership theory, the LPC contingency model, cognitive resources theory, and the multiple-linkage model. The normative decision model was described in Chapter 5.

Immediate and Delayed Outcomes

Some outcomes are more immediate than others. For example, the immediate result of an influence attempt is whether followers are willing to do what the leader asks, but a delayed effect is how well followers actually perform the assignment. The effects of a leader can be viewed as a causal chain of variables, with each "mediating variable" explaining the effects of the preceding one on the next one. An example is provided in Figure 1-1. The farther along in the causal chain, the longer it takes for the effect to occur. For criteria at the end of the causal chain, there is a considerable delay (months or years) before the effects of the leader's actions are evident. Moreover, these end-result criteria are more likely to be influenced by extraneous events (e.g., the economy, market conditions). When the delay is long and there is considerable "contamination" of end-result criteria by extraneous events, then these criteria may be less useful for assessing leadership effectiveness than more immediate outcomes. In many cases, a leader has both immediate and delayed effects on the same criterion. The two types of effects may be consistent or inconsistent. When they are inconsistent, the immediate outcome may be very different from the delayed outcomes. For example, profits may be increased in the short run by eliminating costly activities that have a delayed effect on profits, such as equipment maintenance, research and development, investments in new technology, and employee skill training. In the long run, the net effect of cutting these essential activities is likely to be lower profits because the negative consequences slowly increase and eventually outweigh any benefits. The converse is also true: increased investment in these activities is likely to reduce immediate profits but increase long-term profits.

Supportive Leadership

Supportive leadership (or "supporting") includes a wide variety of behaviors that show consideration, acceptance, and concern for the needs and feelings of other people. Supportive leadership helps to build and maintain effective interpersonal relationships. A manager who is considerate and friendly toward people is more likely to win their friendship and loyalty. The emotional ties that are formed make it easier to gain cooperation and support from people on whom the manager must rely to get the work done. It is more satisfying to work with someone who is friendly, cooperative, and supportive than with someone who is cold and impersonal, or worse, hostile, and uncooperative. Improvements in job satisfaction are likely to result in less absenteeism, less turnover, less alcoholism, and less drug abuse (Brief, Schuler, & Van Sell, 1981; Ganster, Fusilier, & Mayes, 1986; Kessler, Price, & Wortman, 1985). Supportive leadership may increase a subordinate's acceptance of the leader, trust of the leader, and willingness to do extra things for the leader. Some forms of supporting behavior increase subordinate self-confidence and reduce the amount of stress in the job. Stress is reduced by showing appreciation, listening to problems and complaints, providing assistance when necessary, expressing confidence in the person, doing things to make the work environment more enjoyable, and buffering the person from unnecessary demands by outsiders. Stress is increased by making unreasonable demands, pressuring the person to work faster, being overly critical, and insisting on compliance with unnecessary bureaucratic requirements. Although results in research on the effects of considerate, supportive leadership are not consistent, it is likely this type of behavior will improve subordinate satisfaction and performance in many situations.

Job Sharing

Susan's schedule is an example of flextime, short for "flexible work time." Employees must work a specific number of hours per week but are free to vary their hours of work within certain limits. As in Exhibit 8-3, each day consists of a common core, usually 6 hours, with a flexibility band surrounding it. The core may be 9:00 A.M. to 3:00 P.M., with the office actually opening at 6:00 A.M. and closing at 6:00 P.M. All employees are required to be at their jobs during the common core period, but they may accumulate their other 2 hours before, after, or before and after that. Some flextime programs allow employees to accumulate extra hours and turn them into a free day off each month. Approximately 19 percent of large organizations now offer job sharing.24 Reasons it is not more widely adopted are likely the difficulty of finding compatible partners to share a job and the historically negative perceptions of individuals not completely committed to their job and employer. Job sharing allows an organization to draw on the talents of more than one individual in a given job. A bank manager who oversees two job sharers describes it as an opportunity to get two heads but "pay for one."25 It also opens the opportunity to acquire skilled workers—for instance, women with young children and retirees—who might not be available on a full-time basis.26 Many Japanese firms are increasingly considering job sharing—but for a very different reason.27 Because Japanese executives are extremely reluctant to fire people, job sharing is seen as a potentially humanitarian means of avoiding layoffs due to overstaffing. From the employee's perspective, job sharing increases flexibility and can increase motivation and satisfaction when a 40-hour-a-week job is just not practical. But the major drawback is finding compatible pairs of employees who can successfully coordinate the intricacies of one job

The Big Five Personality Model

The MBTI may lack strong supporting evidence, but an impressive body of research supports the thesis of the Big Five Model—that five basic dimensions underlie all others and encompass most of the significant variation in human personality.12 Moreover, test scores of these traits do a very good job of predicting how people behave in a variety of real-life situations.13 The following are the Big Five factors: Extraversion. The extraversion dimension captures our comfort level with relationships. Extraverts tend to be gregarious, assertive, and sociable. Introverts tend to be reserved, timid, and quiet. Agreeableness. The agreeableness dimension refers to an individual's propensity to defer to others. Highly agreeable people are cooperative, warm, and trusting. People who score low on agreeableness are cold, disagreeable, and antagonistic. Conscientiousness. The conscientiousness dimension is a measure of reliability. A highly conscientious person is responsible, organized, dependable, and persistent. Those who score low on this dimension are easily distracted, disorganized, and unreliable. Emotional stability. The emotional stability dimension—often labeled by its converse, neuroticism—taps a person's ability to withstand stress. People with positive emotional stability tend to be calm, self-confident, and secure. Those with high negative scores tend to be nervous, anxious, depressed, and insecure. Openness to experience. The openness to experience dimension addresses range of interests and fascination with novelty. Extremely open people are creative, curious, and artistically sensitive. Those at the other end of the category are conventional and find comfort in the familiar.

Myers-Briggs Type Indicator (MBTI)

The Myers-Briggs Type Indicator (MBTI) is the most widely used personality-assessment instrument in the world.10 It is a 100-question personality test that asks people how they usually feel or act in particular situations. Respondents are classified as extraverted or introverted (E or I), sensing or intuitive (S or N), thinking or feeling (T or F), and judging or perceiving (J or P). These terms are defined as follows: Extraverted (E) versus Introverted (I). Extraverted individuals are outgoing, sociable, and assertive. Introverts are quiet and shy. Sensing (S) versus Intuitive (N). Sensing types are practical and prefer routine and order. They focus on details. Intuitives rely on unconscious processes and look at the "big picture." Thinking (T) versus Feeling (F). Thinking types use reason and logic to handle problems. Feeling types rely on their personal values and emotions. Judging (J) versus Perceiving (P). Judging types want control and prefer their world to be ordered and structured. Perceiving types are flexible and spontaneous. These classifications together describe 16 personality types, identifying every person by one trait from each of the four pairs. For example, Introverted/Intuitive/Thinking/Judging people (INTJs) are visionaries with original minds and great drive. They are skeptical, critical, independent, determined, and often stubborn. ESTJs are organizers. They are realistic, logical, analytical, and decisive and have a natural head for business or mechanics. The ENTP type is a conceptualizer, innovative, individualistic, versatile, and attracted to entrepreneurial ideas. This person tends to be resourceful in solving challenging problems but may neglect routine assignments.

Mediating Variables

The contingency theories of effective leadership have at least one predictor variable, at least one dependent variable, and one or more situational variables. The leadership attributes used as independent variables were usually described in terms of broad meta-categories (e.g., task and relations behavior). The dependent variable in most of the theories was subordinate satisfaction or performance, and in a few cases it was group performance. Most of the situational variables were conditions the leader is not able to change in the short term, including characteristics of the work (e.g., task structure, role interdependence), characteristics of subordinates (e.g., needs, values), characteristics of the leader (expertise, interpersonal stress), and characteristics of the leadership position (leader authority, formal policies). Some contingency theories also include mediating variables (sometimes called "intervening variables") to explain the influence of leader behavior and situational variables on performance outcomes. The mediators are usually subordinate characteristics that determine individual performance (e.g., role clarity, task skills, self-efficacy, task goals), but mediators can also include group-level characteristics that determine team performance (e.g., collective efficacy, cooperation, coordination of activities, resources). A theory is more complex and difficult to test if it includes many specific behaviors, mediating variables, and situational variables.

Organization of the book

The diversity and complexity of the relevant literature make it difficult to organize a survey book on leadership. No single way of classifying the literature captures all of the important distinctions. The primary basis for organizing chapters is according to type of leadership variable studied. The behavior approach is reviewed first (Chapters 2, 3, and 4), then the trait approach (Chapter 6), and the situational approach (Chapter 7), then the power-influence approach (Chapter 8). Important lines of research that cut across the primary variables are treated in separate chapters whenever possible. Participative leadership, which involves both the behavior and power-influence approaches, is covered in Chapter 5. The major theories of charismatic and transformational leadership are usually classified as "integrative" because they involve more than one approach, and these theories are covered in Chapter 12. Other ways of integrating the literature are briefly described in Chapters 7, 11, and 16. Level of conceptualization is used as a secondary basis for organizing the material. Chapter 6 describes leader skills and personality traits that are conceptualized primarily at the individual level. Chapter 9 includes both dyadic and some individual level theories. Group-based approaches are described in Chapters 10 and 11. The concepts in other chapters usually span multiple levels. The leader roles and behaviors described in Chapters 2 and 3 can be used in theories at any level but are most often used in dyadic theories. Participative leadership and empowerment described in Chapter 5 are primarily dyadic and group-level theories, but leaders can also influence empowerment for a large organization. The early contingency theories described in Chapter 7 are conceptualized primarily at the dyadic or group level. The transformational and charismatic theories in Chapter 12 are also primarily dyadic, but they are sometimes extended to include some group-level and organization-level elements. Chapter 13 describes ethical leadership theories (including transforming leadership, servant leadership, spiritual leadership, and authentic leadership); leader values are conceptualized at the individual level, but ethical leadership has implications for dyads, groups, and the overall organization. Chapter 14 deals with some special issues that have implications for different levels, including gender and leadership, cross-cultural differences in leadership, and management of diversity. Leadership development is a topic that cuts across levels of analysis, and it is discussed in Chapter 15. Chapter 16 provides an overview that includes a summary of major findings about effective leadership and some concluding ideas about the essence of leadership at any level of analysis.

Leader Centered of Follower centered theory

The extent to which a theory is focused on either the leader or followers is another useful way to classify leadership theories. Most leadership theories emphasize the characteristics and actions of the leader without much concern for follower characteristics. The leader-focus is strongest in theory and research that identifies traits, skills, or behaviors that contribute to leader effectiveness. Most of the contingency theories (in Chapter 7) also emphasize leader characteristics more than follower characteristics. Only a small amount of research and theory emphasizes characteristics of the followers. Empowerment theory describes how followers view their ability to influence important events (see Chapter 5). Attribution theory describes how followers view a leader's influence on events and outcomes (see Chapter 9), and other theories in the same chapter explain how followers can actively influence their work role and relationship with the leader, rather than being passive recipients of leader influence. The leader substitutes theory (see Chapter 7) describes aspects of the situation and follower attributes that make a hierarchical leader less important. The emotional contagion theory of charisma (see Chapter 12) describes how followers influence each other. Finally, theories of self-managed groups emphasize sharing of leadership functions among the members of a group; in this approach, the followers are also the leaders (see Chapter 10). Theories that focus almost exclusively on either the leader or the follower are less useful than theories that offer a more balanced explanation, such as some of the theories in Chapters 7, 9, 10, 11, and 12. Most theories of leader power (Chapter 8) emphasize that influence over followers depends on follower perceptions of the leader as well as on objective conditions and the leader's influence behavior

Path Goal Theory

The initial versions of path-goal theory described how a leader's task-oriented behavior ("instrumental leadership") and relations-oriented behavior ("supportive leadership") influence subordinate satisfaction and performance in different situations (Evans, 1970; House, 1971). The theory was later extended to include participative leadership and achievement-oriented leadership (e.g., Evans, 1974; House, 1996; House & Mitchell, 1974). Consistent with the expectancy theory of motivation, leaders can motivate subordinates by influencing their perceptions about the likely consequences of different levels of effort. Subordinates will perform better when they have clear and accurate role expectations, they perceive that a high level of effort is necessary to attain task objectives, they are optimistic that it is possible to achieve the task objectives, and they perceive that high performance will result in beneficial outcomes. The effect of a leader's behavior is primarily to modify these perceptions and beliefs. According to House (1971, p. 324), "The motivational function of the leader consists of increasing personal payoffs to subordinates for work-goal attainment and making the path to these payoffs easier to travel by clarifying it, reducing roadblocks and pitfalls, and increasing the opportunities for personal satisfaction en route." Leader behavior can also affect subordinate satisfaction. According to House and Dessler (1974, p. 13), ". . . leader behavior will be viewed as acceptable to subordinates to the extent that the subordinates see such behavior as either an immediate source of satisfaction or as instrumental to future satisfaction." Depending on the situation, leader behavior may affect satisfaction and performance in the same way or in different ways. According to path-goal theory, the effect of leader behavior on subordinate satisfaction and effort depends on aspects of the situation, including task characteristics and subordinate characteristics. These situational moderator variables determine both the potential for increased subordinate motivation and the manner in which the leader must act to improve motivation. Situational variables also influence subordinate preferences for a particular pattern of leadership behavior, thereby influencing the impact of the leader on subordinate satisfaction. One key proposition of the theory involves the moderating influence of situational variables on instrumental leadership. Task-oriented behavior has a stronger effect on role clarity, self-efficacy, effort, and performance when subordinates are unsure about how to do their work, which occurs when they have a complex and difficult task and little prior experience with it. Another key proposition is that supportive leadership has a stronger effect when the task is very tedious, dangerous, and stressful. In this situation supportive leadership increases subordinate confidence, effort, and satisfaction.

Mediating Variables 2

The mediating variables in the model are based on earlier research and theory on determinants of individual and group performance (e.g., Hackman, Brousseau, & Weiss, 1976; Likert, 1967; McGrath, 1984; Porter & Lawler, 1968). The mediating variables are defined primarily at the group level, like theories of team leadership (see Chapter 10). Task commitment: members strive to attain a high level of performance and show a high degree of personal commitment to unit task objectives. Ability and role clarity: members understand their individual job responsibilities, know what to do, and have the skills to do it. Organization of the work: effective performance strategies are used and the work is organized to ensure efficient utilization of personnel, equipment, and facilities. Cooperation and mutual trust: members trust each other, share information and ideas, help each other, and identify with the work unit. Resources and support: the group has budgetary funds, tools, equipment, supplies, personnel, facilities, information, and assistance needed to do the work. External coordination: the activities of the group are synchronized with the interdependent activities in other subunits and organizations (e.g., suppliers, clients). The mediating variables interact with each other to determine the effectiveness of a group or organizational subunit. A serious deficiency in one mediating variable may lower group effectiveness, even though the other mediating variables are not deficient. The greater the relative importance of a particular mediating variable, the more group performance will be reduced by a deficiency in this variable. The relative importance of the mediating variables depends on the type of work unit and other aspects of the situation. Table 7-1 lists aspects of the situation that affect the level of a mediating variable or make it more important.

Multiple Linkage Model 2

The multiple-linkage model (Yukl, 1981, 1989) was developed after the other early contingency theories, and it includes ideas from some of those theories. However, the broadly defined leadership behaviors in most earlier theories were replaced by more specific types of behaviors. Other unique features include a larger number of mediating and situational variables, and more explicit description of group-level processes. The explanation of how these variables are relevant includes ideas from the literature on motivation, organization theory, and team leadership. The multiple-linkage model describes how managerial behavior and situational variables jointly influence the performance of individual subordinates and the leader's work unit. The four types of variables in the model include managerial behaviors, mediating variables, criterion variables, and situational variables.

Piece rate pay plan

The piece-rate pay plan has long been popular as a means of compensating production workers with a fixed sum for each unit of production completed. A pure piece-rate plan provides no base salary and pays the employee only for what he or she produces. Ballpark workers selling peanuts and soda are frequently paid this way. If they sell 40 bags of peanuts at $1 each, their take is $40. The harder they work and the more peanuts they sell, the more they earn. The limitation of these plans is that they're not feasible for many jobs. Surgeons earn significant salaries regardless of their patients' outcomes. Would it be better to pay them only if their patients fully recover? It seems unlikely that most would accept such a deal, and it might cause unanticipated consequences as well (such as surgeons avoiding patients with complicated or terminal conditions). So, although incentives are motivating and relevant for some jobs, it is unrealistic to think they can constitute the only piece of some employees' pay.

Narcissism

The term is from the Greek myth of Narcissus, a man so vain and proud he fell in love with his own image. In psychology, narcissism describes a person who has a grandiose sense of self-importance, requires excessive admiration, has a sense of entitlement, and is arrogant. Evidence suggests that narcissists are more charismatic and thus more likely to emerge as leaders, and they may even display better psychological health (at least as they self-report).

Leadership

The term leadership is a word taken from the common vocabulary and incorporated into the technical vocabulary of a scientific discipline without being precisely redefined. As a consequence, it carries extraneous connotations that create ambiguity of meaning (Janda, 1960). Additional confusion is caused by the use of other imprecise terms such as power, authority, management, administration, control, and supervision to describe similar phenomena. An observation by Bennis (1959, p. 259) is as true today as when he made it many years ago: Always, it seems, the concept of leadership eludes us or turns up in another form to taunt us again with its slipperiness and complexity. So we have invented an endless proliferation of terms to deal with it . . . and still the concept is not sufficiently defined. Researchers usually define leadership according to their individual perspectives and the aspects of the phenomenon of most interest to them. After a comprehensive review of the leadership literature, Stogdill (1974, p. 259) concluded that "there are almost as many definitions of leadership as there are persons who have attempted to define the concept." The stream of new definitions has continued unabated since Stogdill made his observation. Leadership has been defined in terms of traits, behaviors, influence, interaction patterns, role relationships, and occupation of an administrative position. Table 1-1 shows some representative definitions presented over the past 50 years. Leadership is "the behavior of an individual . . . directing the activities of a group toward a shared goal" (Hemphill & Coons, 1957, p. 7). Leadership is "the influential increment over and above mechanical compliance with the routine directives of the organization" (Katz & Kahn, 1978, p. 528). Leadership is "the process of influencing the activities of an organized group toward goal achievement" (Rauch & Behling, 1984, p. 46). "Leadership is about articulating visions, embodying values, and creating the environment within which things can be accomplished" (Richards & Engle, 1986, p. 206). "Leadership is a process of giving purpose (meaningful direction) to collective effort, and causing willing effort to be expended to achieve purpose" (Jacobs & Jaques, 1990, p. 281). Leadership "is the ability to step outside the culture . . . to start evolutionary change processes that are more adaptive" (Schein, 1992, p. 2). "Leadership is the process of making sense of what people are doing together so that people will understand and be committed" (Drath & Palus, 1994, p. 4). Leadership is "the ability of an individual to influence, motivate, and enable others to contribute toward the effectiveness and success of the organization. . ." (House et al., 1999, p. 184).

Person organization Fit

We've noted that researchers have looked at matching people to organizations as well as to jobs. If an organization faces a dynamic and changing environment and requires employees able to readily change tasks and move easily between teams, it's more important that employees' personalities fit with the overall organization's culture than with the characteristics of any specific job. The person-organization fit essentially argues that people are attracted to and selected by organizations that match their values, and they leave organizations that are not compatible with their personalities.78 Using the Big Five terminology, for instance, we could expect that people high on extraversion fit well with aggressive and team-oriented cultures, that people high on agreeableness match up better with a supportive organizational climate than one focused on aggressiveness, and that people high on openness to experience fit better in organizations that emphasize innovation rather than standardization.79 Following these guidelines at the time of hiring should identify new employees who fit better with the organization's culture, which should, in turn, result in higher employee satisfaction and reduced turnover. Research on person-organization fit has also looked at whether people's values match the organization's culture. This match predicts job satisfaction, commitment to the organization, and low turnover.80 Interestingly, some research found that person-organization fit was more important in predicting turnover in a collectivistic nation (India) than in a more individualistic nation (the United States).81

Group Processes

When effective leadership is viewed from a group-level perspective, the focus is on the influence of leaders on collective processes that determine team performance. The explanatory influence processes include determinants of group effectiveness that can be influenced by leaders, and they usually involve all members of a group or team, not only a single subordinate. Examples of these collective explanatory processes include how well the work is organized to utilize personnel and resources, how committed members are to perform their work roles effectively, how confident members are that the task can be accomplished successfully ("potency"), and the extent to which members trust each other and cooperate in accomplishing task objectives. The leadership behaviors identified in dyadic theories are still relevant for leadership in teams, but other behaviors are also important. Behavioral theories describing leadership processes in various types of groups and teams are discussed in Chapter 10, and leadership in executive teams is discussed in Chapter 11. Much of a manager's time is spent in formal and informal meetings, and the leadership processes that make group meetings more effective are also described in Chapter 10. Another key research question in the group approach is to explain why some members are more influential than others, and how leaders are selected. An example of a theory dealing with these questions is the "social exchange theory" discussed in Chapter 8. As compared to the dyadic theories, most group-level theories provide a much better explanation of effective leadership in teams with interactive members, but these theories also have limitations. The need to describe leader influence on member motivation is usually recognized, but the theory may not include psychological processes that are useful for explaining this influence. The need to influence people and processes outside of the team is usually recognized, but external relationships are usually viewed from the perspective of the team. The focus is on the efforts of leaders to improve team performance (e.g., by getting more resources), but the implications of leader actions for other subunits or the larger organization are seldom explicitly considered. Shared leadership is more likely to be included in a group-level theory than in a dyadic theory, but distributed leadership by multiple formal leaders is seldom explicitly included, even though it is common in some types of teams (e.g., military combat units with a commander and an executive officer).

Meta Categories

are less useful than more specific behavior

Developing

is a midrange relations behavior, and providing career advice is a very specific type of developing. The optimal level of abstraction for the behavior categories in a taxonomy depends upon the purpose of the taxonomy. For research on effective leadership,

Clarifying

which is a part of task behavior (see Table 3-1). In the same way, relations-oriented behavior is a broad meta-category,

Specialized Role or Shared Influence Process

A major controversy involves the issue of whether leadership should be viewed as a specialized role or as a shared influence process. One view is that all groups have role specialization, and the leadership role has responsibilities and functions that cannot be shared too widely without jeopardizing the effectiveness of the group. The person with primary responsibility to perform the specialized leadership role is designated as the "leader." Other members are called "followers" even though some of them may assist the primary leader in carrying out leadership functions. The distinction between leader and follower roles does not mean that a person cannot perform both roles at the same time. For example, a department manager who is the leader of department employees is also a follower of higher-level managers in the organization. Researchers who view leadership as a specialized role are likely to pay more attention to the attributes that determine selection of designated leaders, the typical behavior of designated leaders, and the effects of this behavior on other members of the group or organization. Another way to view leadership is in terms of an influence process that occurs naturally within a social system and is diffused among the members. Writers with this perspective believe it is more useful to study "leadership" as a social process or pattern of relationships rather than as a specialized role. According to this view, various leadership functions may be carried out by different people who influence what the group does, how it is done, and the way people in the group relate to each other. Leadership may be exhibited both by formally selected leaders and by informal leaders. Important decisions about what to do and how to do it are made through the use of an interactive process involving many different people who influence each other. Researchers who view leadership as a shared, diffuse process, are likely to pay more attention to the complex influence processes that occur among members, the context and conditions that determine when and how they occur, the processes involved in the emergence of informal leaders, and the consequences for the group or organization.

Merit Based Pay

A merit-based pay plan pays for individual performance based on performance appraisal ratings. A main advantage is that people thought to be high performers can get bigger raises. If designed correctly, merit-based plans let individuals perceive a strong relationship between their performance and their rewards.59 Most large organizations have merit pay plans, especially for salaried employees. IBM increases employees' base salary based on annual performance evaluations. Since the 1990s, when the economy stumbled badly, an increasing number of Japanese companies have abandoned seniority-based pay in favor of merit-based pay. Koichi Yanashita of Takeda Chemical Industries, commented, "The merit-based salary system is an important means to achieve goals set by the company's top management, not just a way to change wages."60 To motivate and retain the best, more companies are increasing the differential between top and bottom performers. The consulting firm Hewitt Associates found that in 2006, employers gave their best performers roughly 10 percent raises, compared to 3.6 percent for average performers and 1.3 percent for below-average performers. These differences have increased over time. Martyn Fisher of Imperial Chemical in the United Kingdom said his company widened the merit pay gap between top and average performers because "as much as we would regret our average performers leaving, we regret more an above-target performer leaving."61 Despite their intuitive appeal, merit pay plans have several limitations. One is that they are typically based on an annual performance appraisal and thus are only as valid as the performance ratings. Another limitation is that the pay-raise pool fluctuates on economic or other conditions that have little to do with individual performance. One year, a colleague at a top university who performed very well in teaching and research was given a pay raise of $300. Why? Because the pay-raise pool was very small. Yet that is hardly pay-for-performance. Finally, unions typically resist merit pay plans. Relatively few teachers are covered by merit pay for this reason. Instead, seniority-based pay, where all employees get the same raises, predominates.

Moderator Variable is called neutralizer

A situational variable is called an enhancer if it increases the effects of leader behavior on the dependent variable but does not directly influence the dependent variable. For example providing coaching will have a stronger impact on subordinate performance when the leader has relevant expertise. This expertise enables the leader to provide better coaching, and subordinates are more likely to follow advice from a leader who is perceived to be an expert. An enhancer can indirectly influence leader behavior if a leader is more likely to use a behavior because it is perceived to be relevant and effective. A situational moderator variable is called a neutralizer when it decreases the effect of leader behavior on the dependent variable or prevents any effect from occurring. For example, offering a pay increase to an employee for working extra days may fail if the employee is rich and does not need the money. Employee indifference to pay rewards is a neutralizer for this type of influence tactic.

Demands and Constraints

A situational variable may directly influence a leader's behavior but only indirectly influence the dependent variables. Aspects of the situation such as formal rules, policies, role expectations, and organizational values can encourage or constrain a leader's behavior, and they are sometimes called demands and constraints (see Chapter 2). In addition to the direct effect of the situation on leader behavior, there may be an indirect effect on dependent variables. For example, a company establishes a new policy requiring sales managers to provide bonuses to any sales representative with sales exceeding a minimum standard; sales managers begin awarding bonuses, and the performance and satisfaction of the sales representatives increases.

Representative Participation

Almost every country in western Europe requires companies to practice representative participation, called "the most widely legislated form of employee involvement around the world."46 Its goal is to redistribute power within an organization, putting labor on a more equal footing with the interests of management and stockholders by letting workers be represented by a small group of employees who actually participate. The two most common forms are works councils and board representatives.47 Works councils are groups of nominated or elected employees who must be consulted when management makes decisions about employees. Board representatives are employees who sit on a company's board of directors and represent employees' interests. The influence of representative participation on working employees seems to be minimal.48 Works councils are dominated by management and have little impact on employees or the organization. While participation might increase the motivation and satisfaction of employee representatives, there is little evidence this trickles down to the employees they represent. Overall, "the greatest value of representative participation is symbolic. If one is interested in changing employee attitudes or in improving organizational performance, representative participation would be a poor choice."

Bonuses

An annual bonus is a significant component of total compensation for many jobs. Among Fortune 100 CEOs, the bonus (mean of $1.01 million) generally exceeds the base salary (mean of $863,000). But bonus plans increasingly include lower-ranking employees; many companies now routinely reward production employees with bonuses in the thousands of dollars when profits improve. The incentive effects of performance bonuses should be higher than those of merit pay because, rather than paying for performance years ago (that was rolled into base pay), bonuses reward recent performance. When times are bad, firms can cut bonuses to reduce compensation costs. Steel company Nucor, for example, guarantees employees only about $10 per hour, but bonuses can be substantial. In 2006, the average Nucor worker made roughly $91,000. When the recession hit, bonuses were cut dramatically: in 2009, total pay had dropped 40 percent. This example also highlights the downside of bonuses: employees' pay is more vulnerable to cuts. This is problematic when bonuses are a large percentage of total pay or when employees take bonuses for granted. "People have begun to live as if bonuses were not bonuses at all but part of their expected annual income," said Jay Lorsch, a Harvard Business School professor. KeySpan Corp., a 9,700-employee utility company in New York, tried to combine yearly bonuses with a smaller merit-pay raise. Elaine Weinstein, KeySpan's senior vice president of HR, credits the plan with changing the culture from "entitlement to meritocracy.

Employee Stock Ownership Plans

An employee stock ownership plan (ESOP) is a company-established benefit plan in which employees acquire stock, often at below-market prices, as part of their benefits. Companies as varied as Publix Supermarkets and W. L. Gore & Associates are now more than 50 percent employee-owned.72 But most of the 10,000 or so ESOPs in the United States are in small, privately held companies.73 Research on ESOPs indicates they increase employee satisfaction and innovation.74 But their impact on performance is less clear. ESOPs have the potential to increase employee job satisfaction and work motivation, but employees need to psychologically experience ownership.75 That is, in addition to their financial stake in the company, they need to be kept regularly informed of the status of the business and have the opportunity to influence it in order to significantly improve the organization's performance.76 ESOP plans for top management can reduce unethical behavior. CEOs are more likely to manipulate firm earnings reports to make themselves look good in the short run when they don't have an ownership share, even though this manipulation will eventually lead to lower stock prices. However, when CEOs own a large amount of stock, they report earnings accurately because they don't want the negative consequences of declining stock prices.

Participative Leadership

Another behavior category identified in the early leadership research is participative leadership, which is also called empowering leadership and democratic leadership. It involves a leader's use of decision procedures that allow other people such as subordinates to have some influence over decisions that will affect them (Coch & French, 1948; Heller & Yukl, 1969; Likert, 1961, 1967; Vroom & Yetton, 1973). The use of empowering decision procedures reflects a strong concern for relations objectives such as subordinate commitment and development, but it can also involve a concern for task objectives such as decision quality. The content of leader decisions may involve task objectives (plan work procedures), relations objectives (determine how to improve employee benefits), change objectives (identify innovative new initiatives), or some combination of the three types of objectives. Participative leadership is discussed in Chapter 5. Participative decision procedures such as consultation or a joint decision can be used with peers and outsiders (e.g., suppliers, clients) as well as with subordinates.

Purpose of Influence Attempts

Another controversy about which influence attempts are part of leadership involves their purpose and outcome. One viewpoint is that leadership occurs only when people are influenced to do what is ethical and beneficial for the organization and themselves. This definition of leadership does not include influence attempts that are irrelevant or detrimental to followers, such as a leader's attempts to gain personal benefits at the follower's expense. An opposing view would include all attempts to influence the attitudes and behavior of followers in an organizational context, regardless of the intended purpose or actual beneficiary. Acts of leadership often have multiple motives, and it is seldom possible to determine the extent to which they are selfless rather than selfish. The outcomes of leader actions usually include a mix of costs and benefits, some of which are unintended, making it difficult to infer purpose. Despite good intentions, the actions of a leader are sometimes more detrimental than beneficial for followers. Conversely, actions motivated solely by a leader's personal needs sometimes result in unintended benefits for followers and the organization. Thus, the domain of leadership processes to study should not be limited by the leader's intended purpose.

Descriptive or Prescriptive Theory

Another important distinction among leadership theories is the extent to which they are descriptive or prescriptive. Descriptive theories explain leadership processes, describe the typical activities of leaders, and explain why certain behaviors occur in particular situations. Prescriptive theories specify what leaders must do to become effective, and they identify any necessary conditions for using a particular type of behavior effectively. The two perspectives are not mutually exclusive, and a theory can have both types of elements. For example, a theory that explains why a particular pattern of behavior is typical for leaders (descriptive) may also explain which aspects of behavior are most effective (prescriptive). However, the two perspectives are not always consistent. For example, the typical pattern of behavior for leaders is not always the optimal one. A prescriptive theory is especially useful when a wide discrepancy exists between what leaders typically do and what they should do to be most effective.

Level of Conceptualization for leadership theories

Another way to classify leadership theories is in terms of the "level of conceptualization" or type of constructs used to describe leaders and their influence on others. Leadership can be described as (1) an intra-individual process, (2) a dyadic process, (3) a group process, or (4) an organizational process. The levels can be viewed as a hierarchy, as depicted in Figure 1-3. What level is emphasized will depend on the primary research question, the type of criterion variables used to evaluate leadership effectiveness, and the type of mediating processes used to explain leadership influence. Typical research questions for each level are listed in Table 1-4. The four levels of conceptualization, and their relative advantages and disadvantages, are described next Organizational-Level Theories How top executives influence members at other levels How leaders are selected at each level (and implications of the process for the firm) How leaders influence organizational culture How leaders influence the efficiency and the cost of internal operations How leaders influence human relations and human capital in the organization How leaders make decisions about competitive strategy and external initiatives How conflicts among leaders are resolved in an organization How leaders influence innovation and major change in an organization Intra-Individual Theories How leader traits and values influence leadership behavior How leader skills are related to leader behavior How leaders make decisions How leaders manage their time How leaders are influenced by role expectations and constraints How leaders react to feedback and learn from experience How leaders can use self-development techniques Dyadic Theories How a leader influences subordinate motivation and task commitment How a leader facilitates the work of a subordinate How a leader interprets information about a subordinate How a leader develops a subordinate's skills and confidence How a leader influences subordinate loyalty and trust How a leader uses influence tactics with a subordinate, peer, or boss How a leader and a subordinate influence each other How a leader develops a cooperative exchange relationship with a subordinate Group-Level Theories How different leader-member relations affect each other and team performance How leadership is shared in the group or team How leaders organize and coordinate the activities of team members How leaders influence cooperation and resolve disagreements in the team or unit How leaders influence collective efficacy and optimism for the team or unit How leaders influence collective learning and innovation in the team or unit How leaders influence collective identification of members with the team or unit How unit leaders obtain resources and support from the organization and other units

Intra Individual Processes

Because most definitions of leadership involve influence processes between individuals, leadership theories that describe only leader attributes are rare. Nevertheless, a number of researchers used psychological theories of personality traits, values, skills, motivation, and cognition to explain the decisions and behavior of an individual leader. Roles, behaviors, or decision styles are also used for describing and comparing leaders. Examples can be found in theories about the nature of managerial work and the requirements for different types of leadership positions (see Chapter 2). Individual traits and skills are also used to explain a person's motivation to seek power and positions of authority (see Chapter 6), and individual values are used to explain ethical leadership and the altruistic use of power (see Chapter 13). Knowledge of intra-individual processes and taxonomies of leadership roles, behaviors, and traits provide insights that are helpful for developing better theories of effective leadership. However, the potential contribution of the intra-individual approach to leadership is limited, because it does not explicitly include what most theorists consider to be the essential process of leadership, namely influencing others such as subordinates, peers, bosses, and outsiders.

Over emphasis on behavior meta categories

Broadly defined categories of leader behavior can make a theory more parsimonious and less complex, but they have limited utility for understanding effective leadership in different situations. The diverse component behaviors in a meta-category such as instrumental or supportive leadership are not equally relevant for influencing an outcome variable, and a situational moderator variable may affect the component behaviors in different ways. For example, a stressful task may increase the value of some relations behaviors (e.g., supportive leadership) but not others (delegation). In any given situation some task-oriented behaviors will be more relevant than others, and some may have negative consequences. It is easier to understand how to improve leadership effectiveness when a theory includes specific types of behavior and describes the situations in which each type of behavior is relevant.

Cognitive Resource Theory

Cognitive resources theory (Fiedler, 1986; Fiedler & Garcia, 1987) describes the conditions under which cognitive resources such as intelligence and experience are related to group performance. According to the theory, the performance of a leader's group is determined by a complex interaction among two leader traits (intelligence and experience), one type of leader behavior (directive leadership), and two aspects of the leadership situation (interpersonal stress and the distribution of knowledge about the task). Interpersonal stress for the leader moderates the relation between leader intelligence and subordinate performance. Stress may be due to a boss who creates role conflict or demands miracles without providing necessary resources and support. Other sources of stress include frequent work crises and serious conflicts with subordinates. Under low stress, leader intelligence facilitates information processing and problem solving, and it is likely to improve the quality of autocratic leader decisions. However, when there is high interpersonal stress, strong emotions are likely to disrupt cognitive information processing and make intelligence difficult to apply. The leader may become distracted and unable to focus on the task. In this stressful situation a leader who has already learned a high quality solution in previous experience with similar problems is usually more effective than an intelligent but inexperienced leader who tries to find new solutions. A participative decision is more effective when the members of the group have relevant knowledge and information not possessed by the leader, whereas an autocratic decision is more effective when the leader has more expertise about the task than subordinates. This aspect of the theory is similar to a key feature of the Normative Decision Model. However, Cognitive Resources Theory does not include explicit mediating variables to explain how interpersonal stress, leader intelligence, and leader experience affect the use of participative decision procedures, or how decision procedures influence the performance of the leader's group.

Participative Management

Common to all participative management programs is joint decision making, in which subordinates share a significant degree of decision-making power with their immediate superiors. Participative management has, at times, been promoted as a panacea for poor morale and low productivity. But for it to work, employees must be engaged in issues relevant to their interests so they'll be motivated, they must have the competence and knowledge to make a useful contribution, and trust and confidence must exist among all parties.43 Studies of the participation-performance relationship have yielded mixed findings.44 Organizations that institute participative management do have higher stock returns, lower turnover rates, and higher estimated labor productivity, although these effects are typically not large.45 A careful review of research at the individual level shows participation typically has only a modest influence on employee productivity, motivation, and job satisfaction. Of course, this doesn't mean participative management can't be beneficial under the right conditions. However, it is not a sure means for improving performance.

Flexible Benefits

Consistent with expectancy theory's thesis that organizational rewards should be linked to each individual employee's goals, flexible benefits individualize rewards by allowing each employee to choose the compensation package that best satisfies his or her current needs and situation. These plans replace the "one-benefit-plan-fits-all" programs designed for a male with a wife and two children at home that dominated organizations for more than 50 years.83 Fewer than 10 percent of employees now fit this image: about 25 percent are single, and one-third are part of two-income families with no children. Flexible benefits can accommodate differences in employee needs based on age, marital status, spouses' benefit status, and number and age of dependents. The three most popular types of benefits plans are modular plans, core-plus options, and flexible spending accounts.84 Modular plans are predesigned packages or modules of benefits, each of which meets the needs of a specific group of employees. A module designed for single employees with no dependents might include only essential benefits. Another, designed for single parents, might have additional life insurance, disability insurance, and expanded health coverage. Core-plus plans consist of a core of essential benefits and a menulike selection of others from which employees can select. Typically, each employee is given "benefit credits," which allow the purchase of additional benefits that uniquely meet his or her needs. Flexible spending plans allow employees to set aside pretax dollars up to the dollar amount offered in the plan to pay for particular benefits, such as health care and dental premiums. Flexible spending accounts can increase take-home pay because employees don't pay taxes on the dollars they spend from these accounts.

High high leader

Much of the behavior research suffers from the tendency to look for simple answers to complex questions, and it is not surprising that meta-analyses of survey studies find only weak positive relationships between effective leadership and meta-categories such as task and relations behavior. Behavior taxonomies are descriptive aids that can help us to analyze complex events and understand them better. Broadly-defined categories can be useful for comparing results from different studies, but there has been too much reliance on them in the formulation of theory and design of research. In most survey studies, the researchers failed to consider whether some specific component behaviors are more relevant than others for the leadership situation, or how the relevance of a specific behavior varies across different situations. In a theory called the managerial grid, Blake and Mouton (1964, 1982) proposed that effective managers have a high concern for people and a high concern for production. These concerns are defined as values rather than as behaviors. A high concern for both people, and production (the "high-high leader") does not imply that the leader must use all forms of task and relations behavior. As shown in Chapter 2, managers are overloaded with demands and must ration their time. Thus, effective managers will only use specific behaviors that are relevant for their situation. Aspects of the situation that determine which task-oriented and relations-oriented behaviors are most relevant include the type of team or organization, the nature of the task, and characteristics of subordinates (e.g., experience, motives, gender and cultural diversity, trust and loyalty, identification with the team). Most of the behavior studies have other limitations that make the results difficult to interpret. Few studies checked for the possibility of a nonlinear relationship between behavior and the performance criterion (such as when a moderate amount of the behavior is optimal). For example, some monitoring is usually beneficial, but an excessive amount can reduce subordinate satisfaction. Few studies checked for interactions among behaviors with interrelated effects. To understand why a leader is effective requires examination of how the behaviors interact in a mutually consistent way. For example, monitoring operations is useful for discovering problems, but unless something is done to solve the problems, monitoring will not contribute to leader effectiveness. Thus, when necessary, effective leaders will use other behaviors (e.g., problem solving, coaching) in combination with monitoring. The descriptive studies of managerial work and research using case studies and biographies suggest that complementary behaviors are woven together into a complex tapestry such that the whole is greater than the sum of the parts (Kaplan, 1988). A leader's skill in selecting and enacting appropriate behaviors is related to the success of the outcome, and unless a behavior is used in a skillful way it may not be effective. The overall pattern of leadership behavior is more important than how often a particular type of behavior is used, and different patterns of behavior may be used to accomplish the same outcome.

Short Term Actions to correct deficiencies

A basic proposition of the theory is that leader actions to correct any deficiencies in the mediating variables will improve group performance. A leader who fails to recognize opportunities to correct deficiencies in key mediating variables, who recognizes the opportunities but fails to act, or who acts but is not skilled will be less than optimally effective. An ineffective leader may make things worse by acting in ways that increase rather than decrease the deficiency in one or more mediating variables. For example, a leader who is very manipulative and coercive may reduce subordinate effort rather than increasing it. Table 7-2 summarizes possible short-term actions to deal with deficiencies in the mediating variables. Leaders may influence group members to work faster or do better quality work (e.g., by offering special incentives, by giving an inspiring talk about the importance of the work, by setting challenging goals). Leaders may increase member ability to do the work (e.g., by showing them better methods for doing the work, by clearing up confusion about who is responsible for what). Leaders may organize and coordinate activities in a more efficient way (e.g., by finding ways to reduce delays, duplication of effort, and wasted effort; by matching people to tasks better; by finding better ways to use people and resources). Leaders may obtain resources needed immediately to do the work (e.g., information, personnel, equipment, materials, supplies). Leaders may act to improve external coordination by meeting with outsiders to plan activities and resolve conflicting demands on the work unit. Subordinates are apathetic or discouraged about the work. Set challenging goals and express confidence subordinates can attain them. Articulate an appealing vision of what the group could accomplish or become. Use rational persuasion and inspirational appeals to influence commitment. Lead by example. Use consultation and delegation. Provide recognition. Reward effective behavior. Subordinates are confused about what to do or how to do their work. Make clear assignments. Set specific goals and provide feedback about performance. Provide more direction of on-going activities. Provide instruction or coaching as needed. Identify skill deficiencies and arrange for necessary skill training. Recruit and hire skilled people to work in unit. The group is disorganized and/or it uses weak performance strategies. Develop plans to accomplish objectives. Identify and correct coordination problems. Reorganize activities to make better use of people, resources, and equipment. Identify and eliminate inefficient and unnecessary activities. Provide more decisive direction of on-going activities in a crisis. There is little cooperation and teamwork among members of the group. Emphasize common interests and encourage cooperation. Encourage constructive resolution of conflict and help mediate conflicts. Increase group incentives and reduce competition. Use symbols and rituals to build identification with the work unit. Use teambuilding activities. The group has inadequate resources to do the work. Requisition or borrow specific resources needed immediately for the work. Find more reliable or alternative sources of supplies. Ration available resources if necessary. Initiate improvement projects to upgrade equipment and facilities. Lobby with higher authorities for a larger budget. External coordination with other subunits or outsiders is weak. Network with peers and outsiders to develop more cooperative relationships. Consult more with peers and outsiders when making plans. Keep peers and outsiders informed about changes. Monitor closely to detect coordination problems quickly. Meet with peers and outsiders to resolve coordination problems. Negotiate favorable agreements with peers and outsiders for group outputs. Some aspects of the situation limit a leader's discretion in making changes and reacting to problems. These influences are similar to Stewart's (1976) "constraints" and Kerr and Jermier's (1978) "neutralizers." The extent to which a leader is capable of doing something in the short run to improve any of the mediating variables is limited by the position power, organizational policies, technology used to do the work, and legal-contractual restrictions (e.g., labor-management agreements, contracts with suppliers, requirements mandated by government agencies). Constraints may prevent a leader from rewarding or punishing members, changing work assignments or procedures, and procuring supplies and equipment. The model does not imply that there is only one optimal pattern of managerial behavior in any given situation. Leaders usually have some choice among mediating variables in need of improvement, and different patterns of behavior are usually possible to correct a particular deficiency. The overall pattern of leadership behavior by the designated leader and other group members is more important than any single action. In this respect, the model is similar to Stewart's (1976) "choices" (see Chapter 2). However, a leader whose attention is focused on mediating variables that are not deficient or not important will fail to improve unit performance.

Research on Contingency Theories

A contingency theory is supported by a pattern of results consistent with the propositions of the theory. Most of the research on the early contingency theories of leadership used survey methods, and many studies had the same respondents provide ratings on all variables. Review articles or meta-analyses of relevant research have been published for path-goal theory (Podsakoff, MacKenzie, Ahearne, & Bommer, 1995; Wofford & Liska, 1993), situational leadership theory (Fernandez & Vecchio, 1997; Graef, 1983, 1997; Thompson & Vecchio, 2009), leadership substitutes theory (Dionne, Yammarino, Atwater, & James, 2002; Podsakoff, Niehoff, MacKenzie, & Williams, 1993; Podsakoff et al., 1995), cognitive resources theory (Vecchio, 1990), the LPC contingency model (Peters, Hartke, & Pohlmann, 1985), and the normative decision model (Vroom & Jago, 1988). No research has directly tested all aspects of the multiple-linkage model, but several of the propositions are supported by findings in studies using descriptive research methods such as critical incidents, diaries and observation, case studies, and comparative field studies (e.g., Peterson & Van Fleet, 2008; Yukl & Van Fleet, 1982). Some of the propositions are similar to those in other contingency theories, and studies conducted to test those theories provide evidence relevant for assessing the multiple-linkage propositions. In general, the evidence supporting contingency theories of effective leadership is inconsistent and difficult to interpret. As noted earlier, the ambiguity and conceptual problems in contingency theories makes them more difficult to test, and most studies used weak research methods (Schriesheim & Kerr, 1977; Yukl, 1989). As yet, none of the contingency theories have been adequately tested, and stronger research methods are needed to provide more conclusive results. Instead of relying so much on survey field studies with convenience samples, it is desirable to make more use of other relevant research methods. Examples of methods that are likely to be more useful include comparative field studies of effective and ineffective leaders in different situations, longitudinal studies of how well leaders adapt to changes in the situation over time, field experiments with leaders trained to diagnose the situation accurately and select appropriate behaviors, and laboratory experiments with observation of leaders in team simulations conducted over a period of several weeks. Alternative methods for measuring leadership behavior (e.g., observation, diaries, interviews, and critical incidents) should be used more often, and ineffective forms of leadership behavior should be examined in addition to effective forms of behavior (e.g., Amabile, Schatzel, Moneta, & Kramer, 2004; Yukl & Van Fleet, 1982). Measures of how often a particular type of behavior is used by a leader are not enough; it is also essential to consider whether the behavior is used when and where it is appropriate and in a skillful way. Most studies on the contingency theories only examine one or two aspects of the leadership situation, and behavior is usually defined in terms of a broad meta-category such as task-oriented, relations-oriented, or participative leadership. To understand adaptive leadership, it is also necessary to see how specific aspects of leader behavior change as the situation changes. Finally, as noted in Chapter 3, researchers need to pay more attention to the overall pattern of leadership behavior rather than examining each type of behavior separately. Effective leaders combine behaviors that are complementary, and different behaviors are woven together into a complex tapestry such that the whole is greater than the sum of the parts (Kaplan, 1988). More than one pattern of specific behaviors may be equally effective in the same situation, but it is essential to find a good balance between behaviors with competing objectives. Examples of competing values emphasized in this "duality approach" are controlling vs. empowering, strategic vs. operational objectives, and concern for people vs. concern for task objectives (Hooijberg, 1996; Kaiser & Overfield, 2010; Kaplan & Kaiser, 2006; Quinn, Spreitzer & Hart, 1992; Yukl & Mahsud, 2010). The importance of competing objectives and flexibility for strategic leadership is discussed in Chapter 11.

The Job Characteristics Model

Developed by J. Richard Hackman and Greg Oldham, the job characteristics model (JCM) says we can describe any job in terms of five core job dimensions:1 Skill variety is the degree to which a job requires a variety of different activities so the worker can use a number of different skills and talent. The work of a garage owner-operator who does electrical repairs, rebuilds engines, does bodywork, and interacts with customers scores high on skill variety. The job of a bodyshop worker who sprays paint 8 hours a day scores low on this dimension. Task identity is the degree to which a job requires completion of a whole and identifiable piece of work. A cabinetmaker who designs a piece of furniture, selects the wood, builds the object, and finishes it to perfection has a job that scores high on task identity. A job scoring low on this dimension is operating a factory lathe solely to make table legs. Task significance is the degree to which a job affects the lives or work of other people. The job of a nurse handling the diverse needs of patients in a hospital intensive care unit scores high on task significance; sweeping floors in a hospital scores low. Autonomy is the degree to which a job provides the worker freedom, independence, and discretion in scheduling work and determining the procedures in carrying it out. A salesperson who schedules his or her own work each day and decides on the most effective sales approach for each customer without supervision has a highly autonomous job. A salesperson who is given a set of leads each day and is required to follow a standardized sales script with each potential customer has a job low on autonomy. Feedback is the degree to which carrying out work activities generates direct and clear information about your own performance. A job with high feedback is assembling iPads and testing them to see whether they operate properly. A factory worker who assembles iPads but then routes them to a quality-control inspector for testing and adjustments receives low feedback from his or her activities. Exhibit 8-1 presents the job characteristics model (JCM). Note how the first three dimensions—skill variety, task identity, and task significance—combine to create meaningful work the incumbent will view as important, valuable, and worthwhile. Note, too, that jobs with high autonomy give incumbents a feeling of personal responsibility for the results and that, if a job provides feedback, employees will know how effectively they are performing. From a motivational standpoint, the JCM proposes that individuals obtain internal rewards when they learn (knowledge of results) that they personally (experienced responsibility) have performed well on a task they care about (experienced meaningfulness).2 The more these three psychological states are present, the greater will be employees' motivation, performance, and satisfaction, and the lower their absenteeism and likelihood of leaving. As Exhibit 8-1 also shows, individuals with a high growth need are more likely to experience the critical psychological states when their jobs are enriched—and respond to them more positively—than are their counterparts with low growth need.

A working definition of key terms

It is neither feasible nor desirable at this point in the development of the discipline to attempt to resolve the controversies over the appropriate definition of leadership. Like all constructs in social science, the definition of leadership is arbitrary and subjective. Some definitions are more useful than others, but there is no single "correct" definition that captures the essence of leadership. For the time being, it is better to use the various conceptions of leadership as a source of different perspectives on a complex, multifaceted phenomenon. In research, the operational definition of leadership depends to a great extent on the purpose of the researcher (Campbell, 1977). The purpose may be to identify leaders, to determine how they are selected, to discover what they do, to discover why they are effective, or to determine whether they are necessary. As Karmel (1978, p. 476) notes, "It is consequently very difficult to settle on a single definition of leadership that is general enough to accommodate these many meanings and specific enough to serve as an operationalization of the variable." Whenever feasible, leadership research should be designed to provide information relevant to a wide range of definitions, so that over time it will be possible to compare the utility of different conceptions and arrive at some consensus on the matter. In this book, leadership is defined broadly in a way that takes into account several things that determine the success of a collective effort by members of a group or organization to accomplish meaningful tasks. The following definition is used: Leadership is the process of influencing others to understand and agree about what needs to be done and how to do it, and the process of facilitating individual and collective efforts to accomplish shared objectives. The definition includes efforts not only to influence and facilitate the current work of the group or organization, but also to ensure that it is prepared to meet future challenges. Both direct and indirect forms of influence are included. The influence process may involve only a single leader or it may involve many leaders. Table 1-2 shows the wide variety of ways leaders can influence the effectiveness of a group or organization. The choice of objectives and strategies to pursue. The motivation of members to achieve the objectives. The mutual trust and cooperation of members. The organization and coordination of work activities. The allocation of resources to activities and objectives. The development of member skills and confidence. The learning and sharing of new knowledge by members. The enlistment of support and cooperation from outsiders. The design of formal structure, programs, and systems. The shared beliefs and values of members. In this book, leadership is treated as both a specialized role and a social influence process. More than one individual can perform the role (i.e., leadership can be shared or distributed), but some role differentiation is assumed to occur in any group or organization. Both rational and emotional processes are viewed as essential aspects of leadership. No assumptions are made about the actual outcome of the influence processes, because the evaluation of outcomes is difficult and subjective. Thus, the definition of leadership is not limited to processes that necessarily result in "successful" outcomes. How leadership processes affect outcomes is a central research question that should not be biased by the definition of leadership. The focus is clearly on the process, not the person, and they are not assumed to be equivalent. Thus, the terms leader, manager, and boss are used interchangeably in this book to indicate people who occupy positions in which they are expected to perform the leadership role, but without any assumptions about their actual behavior or success. The terms subordinate and direct report are used interchangeably to denote someone whose primary work activities are directed and evaluated by the focal leader. Some writers use the term staff as a substitute for subordinate, but this practice creates unnecessary confusion. The term connotes a special type of advisory position, and most subordinates are not staff advisors. Moreover, the term staff is used both as a singular and plural noun, which creates a lot of unnecessary confusion. The term associate has become popular in business organizations as another substitute for subordinate, because it conveys a relationship in which employees are valued and supposedly empowered. However, this vague term fails to differentiate between a direct authority relationship and other types of formal relationships (e.g., peers, partners). To clarify communication, this text continues to use the term subordinate to denote the existence of a formal authority relationship. The term follower is used to describe a person who acknowledges the focal leader as the primary source of guidance about the work, regardless of how much formal authority the leader actually has over the person. Unlike the term subordinate, the term follower does not preclude leadership processes that can occur even in the absence of a formal authority relationship. Followers may include people who are not direct reports (e.g., coworkers, team members, partners, outsiders). However, the term follower is not used to describe members of an organization who completely reject the formal leader and seek to remove the person from office; such people are more appropriately called "rebels" or "insurgents."

Direct and indirect Leadership

Most theories about effective leadership focus on behaviors used to directly influence immediate subordinates, but a leader can also influence other people inside the organization, including peers, bosses, and people at lower levels who do not report to the leader. Some theorists make a distinction between direct and indirect forms of leadership to help explain how a leader can influence people when there is no direct interaction with them (Hunt, 1991; Lord & Maher, 1991; Yammarino, 1994). A chief executive officer (CEO) has many ways to influence people at lower levels in the organization. Direct forms of leadership involve attempts to influence followers when interacting with them or using communication media to send messages to them. Examples include sending memos or reports to employees, sending e-mail messages, presenting speeches on television, holding meetings with small groups of employees, and participating in activities involving employees (e.g., attending orientation or training sessions, company picnics). Most of these forms of influence can be classified as direct leadership. Indirect leadership has been used to describe how a chief executive can influence people at lower levels in the organization who do not interact directly with the leader (Bass, Waldman, Avolio, & Bebb, 1987; Waldman & Yammarino, 1999; Yammarino, 1994). One form of indirect leadership by a CEO is called "cascading." It occurs when the direct influence of the CEO is transmitted down the authority hierarchy of an organization from the CEO to middle managers, to lower-level managers, to regular employees. The influence can involve changes in employee attitudes, beliefs, values, or behaviors. For example, a CEO who sets a good example of ethical and supportive behavior may influence similar behavior by employees at lower levels in the organization. Another form of indirect leadership involves influence over formal programs, management systems, and structural forms (Hunt, 1991; Lord & Maher, 1991; Yukl & Lepsinger, 2004). Many large organizations have programs or management systems intended to influence the attitudes, skills, behavior, and performance of employees. Examples include programs for recruitment, selection, and promotion of employees. Structural forms and various types of programs can be used to increase control, coordination, efficiency, and innovation. Examples include formal rules and procedures, specialized subunits, decentralized product divisions, standardized facilities, and self-managed teams. In most organizations only top executives have sufficient authority to implement new programs or change the structural forms (see Chapter 11). A third form of indirect leadership involves leader influence over the organization culture, which is defined as the shared beliefs and values of members (Schein, 1992; Trice & Beyer, 1991). Leaders may attempt either to strengthen existing cultural beliefs and values or to change them. There are many ways for leaders to influence an organization's culture. Some ways involve direct influence (e.g., communicating a compelling vision or leading by example), and some involve forms of indirect influence, such as changing the organizational structure, reward systems, and management programs (see Chapter 11). For example, a CEO can implement programs to recruit, select, and promote people who share the same values (Giberson, Resick, & Dickson, 2005). The interest in indirect leadership is useful to remind scholars that leadership influence is not limited to the types of observable behavior emphasized in many leadership theories. However, it is important to remember that a simple dichotomy does not capture the complexity involved in these influence processes. Some forms of influence are not easily classified as either direct or indirect leadership. Moreover, direct and indirect forms of influence are not mutually exclusive, and when used together in a consistent way, it is possible to magnify their effects (see Chapter 11).

Task Oriented Behaviors

Organize work activities to improve efficiency. Plan short-term operations. Assign work to groups or individuals. Clarify what results are expected for a task. Explain priorities for different task objectives. Set specific goals and standards for task performance. Explain rules, policies, and standard operating procedures. Direct and coordinate work activities. Monitor operations and performance. Resolve immediate problems that would disrupt the work.

Core Self Evaluations

People who have positive core self-evaluations like themselves and see themselves as effective, capable, and in control of their environment. Those with negative core self-evaluations tend to dislike themselves, question their capabilities, and view themselves as powerless over their environment.

Representing

Representing includes lobbying for resources and assistance from superiors, promoting and defending the reputation of the leader's group or organization, negotiating agreements with peers and outsiders such as clients and suppliers, and using political tactics to influence decisions made by superiors or governmental agencies. The proactive influence tactics described in Chapter 8 are commonly used for lobbying and negotiating.

Job Design

Research in job design suggests the way the elements in a job are organized can increase or decrease effort and also suggests what those elements are. We'll first review the job characteristics model and then discuss some ways jobs can be redesigned. Finally, we'll explore alternative work arrangements.

Situational Variables

Situational variables directly influence mediating variables and can make them either more or less favorable. Situational variables also determine the relative importance of the mediating variables as a determinant of group performance. Mediating variables that are both important and deficient should get top priority for corrective action by a leader. Conditions that make a mediating variable more favorable are similar to "substitutes" for leadership. In a very favorable situation, some of the mediating variables may already be at their maximum short-term level, making the job of the leader much easier. Situational variables affecting each mediating variable are briefly described in this section. Situational variables that can influence task commitment include the formal reward system and the intrinsically motivating properties of the work itself. Subordinate task commitment is more important for complex tasks that require high effort and initiative and have a high cost for any errors. Member commitment to perform the task effectively will be greater if the organization has a reward system that provides attractive rewards contingent on performance, as in the case of many sales jobs. Intrinsic motivation is likely to be higher for subordinates if the work requires varied skills, is interesting and challenging, and provides automatic feedback about performance. Situational variables that affect subordinate ability and role clarity include the nature of the work, the prior training and experience of the leader's subordinates, and the effectiveness of the organization's recruitment and selection processes. Subordinate skills are more important when task are complex and difficult to perform, they require strong technical skills, the cost of errors is high, and disruptions in the work are likely. An organization with effective recruiting and high salaries is more likely to attract qualified people with relevant job skills and prior experience. Role requirements are easier to understand and the work is easier to perform when the task is simple and repetitive, subordinates have extensive prior experience, and the organization has clear rules and standard procedures for the work. Role ambiguity is more likely to be a problem when the task has multiple performance criteria and priorities are unclear, when the nature of the work or technology is changing, or when the work is affected by frequent changes in plans or priorities determined by clients or higher management. Situational variables that affect the organization of the work and assignment of tasks to individuals include the type of technology, the variety of tasks performed by the leader's work unit, the variation in subordinate skills, and the amount of work rules and standard procedures that are determined by staff experts or union contracts. When the work unit performs one basic type of task and subordinates are all highly skilled, it is easy to organize unit activities and make task assignments that will achieve a high level of efficiency. An effective performance strategy for organizing activities and assigning tasks is more important when the work unit has complex, unique, and important projects and members who differ with regard to their skills. For some types of projects, an efficient organization of activities can be achieved by qualified staff experts who use operations management and project management software. Situational variables that affect cooperation and teamwork include the nature of the work, the size of the group, the stability of membership, the similarity among members in values and background, and the reward system. Cooperation and teamwork are more important when the group has specialized, interdependent tasks or when members work alone but must share equipment and scarce resources. More cohesiveness and cooperation are likely in small groups with a stable, homogeneous membership. Cooperation is increased by rewards that are based primarily on contributions to group performance rather than on individual performance. The adequacy of resources that are necessary to do the work is influenced by the nature of the work, the organization's formal budgetary systems, procurement systems, and inventory control systems, as well as by economic conditions at the time. Ensuring an adequate level of resources is more important when work unit performance is highly dependent on getting scarce resources from the organization or outside sources, and when the providers of resources are unreliable. An adequate level of resources is more likely to be provided to a work unit when the organization is prosperous and growing than when the organization is in decline and faces severe resource shortages. The need for external coordination is affected by the formal structure of the organization. High lateral interdependence increases the amount of necessary coordination with other subunits, but this coordination may be facilitated by special integrating mechanisms such as integrator positions and cross-functional committees (Galbraith, 1973; Lawrence & Lorsch, 1967). A high level of dependency on outsiders such as clients or subcontractors for resources or approvals increases the need for external coordination with them, but it may be achieved by designated project managers or liaison specialists rather than by work unit managers

Self Monitoring

Self-monitoring refers to an individual's ability to adjust his or her behavior to external, situational factors.43 Individuals high in self-monitoring show considerable adaptability in adjusting their behavior to external situational factors. They are highly sensitive to external cues and can behave differently in different situations, sometimes presenting striking contradictions between their public persona and their private self. Low self-monitors, like Joyce, can't disguise themselves in that way. They tend to display their true dispositions and attitudes in every situation; hence, there is high behavioral consistency between who they are and what they do.

Flextime

Susan's schedule is an example of flextime, short for "flexible work time." Employees must work a specific number of hours per week but are free to vary their hours of work within certain limits. As in Exhibit 8-3, each day consists of a common core, usually 6 hours, with a flexibility band surrounding it. The core may be 9:00 A.M. to 3:00 P.M., with the office actually opening at 6:00 A.M. and closing at 6:00 P.M. All employees are required to be at their jobs during the common core period, but they may accumulate their other 2 hours before, after, or before and after that. Some flextime programs allow employees to accumulate extra hours and turn them into a free day off each month.

Personal Job Fit Theory

The effort to match job requirements with personality characteristics is best articulated in John Holland's personality-job fit theory.74 Holland presents six personality types and proposes that satisfaction and the propensity to leave a position depend on how well individuals match their personalities to a job. Exhibit 5-5 describes the six types, their personality characteristics, and examples of the congruent occupations for each.

Dyadic Processes

The dyadic approach focuses on the relationship between a leader and another individual who is usually a subordinate or another type of follower. The need to influence direct reports is shared by leaders at all levels of authority from chief executives to department managers and work crew supervisors. The explanation of leader influence is usually in terms of how the leader causes the subordinate to be more motivated and more capable of accomplishing task assignments. These theories usually focus on leadership behavior as the source of influence, and on changes in the attitudes, motivation, and behavior of an individual subordinate as the influence process. Reciprocal influence between the leader and follower may be included in the theory, but it is usually less important than the explanation of leader influence over the follower. An example of a dyadic leadership theory is the leader-member exchange (LMX) theory described in Chapter 9, which describes how dyadic relationships evolve over time and take different forms, ranging from a casual exchange to a cooperative alliance with shared objectives and mutual trust. Although the LMX theory recognizes that the leader has multiple dyadic relationships, the focus is clearly on what happens within a single relationship. Much of the research on power and influence tactics (see Chapter 8) is also conceptualized in terms of dyadic processes. Most theories of transformational and charismatic leadership were initially conceptualized primarily at the dyadic level (see Chapter 12). Since real leaders seldom have only a single subordinate, some assumptions are necessary to make dyadic explanations relevant for explaining a leader's influence on the performance of a group or work unit. One assumption is that subordinates have work roles that are similar and independent. Subordinates may not be homogeneous with regard to skills and motives, but they have similar jobs. There is little potential for subordinates to affect each other's job performance, and group performance is the sum of the performances by individuals. An example of minimum interdependence is a district sales unit in which sales representatives work separately and independently of each other and sell the same product in different locations or to different customers. However, when there is high interdependence among group members, a high need for collective learning, and strong external dependencies, a group-level theory is needed to explain how leadership can influence group performance. The dyadic theories do not include some leadership behaviors that are necessary to facilitate collective performance by a team or organization. Moreover, some of the dyadic behaviors that are effective in terms of dyadic influence will be ineffective with regard to team performance or organizational performance. For example, attempts to develop a closer relationship with one subordinate (e.g., by providing more benefits) may be dysfunctional if they create perceptions of inequity by other subordinates. Efforts to empower individual subordinates may create problems when it is necessary to have a high degree of coordination among all of the subordinates. The extra time needed by a leader to maximize performance by an individual subordinate (e.g., providing intensive coaching) may be more effectively used to deal with problems that involve the team or work group (e.g., obtaining necessary resources, facilitating cooperation and coordination). Another limitation of most dyadic theories is inadequate attention to the context. In most dyadic theories of effective leadership, aspects of the situation are likely to be treated as moderator variables that constrain or enhance leader influence on individual subordinates. The dyadic theories underestimate the importance of the context for determining what type of leadership is necessary to enhance collective performance by multiple subordinates

Organizational Processes

The group approach provides a better understanding of leadership effectiveness than dyadic or intra-individual approaches, but it has some important limitations. A group usually exists in a larger social system, and its effectiveness cannot be understood if the focus of the research is limited to the group's internal processes. The organizational level of analysis describes leadership as a process that occurs in a larger "open system" in which groups are subsystems (Fleishman et al., 1991; Katz & Kahn, 1978; Mumford, 1986). The survival and prosperity of an organization depends on adaptation to the environment and the acquisition of necessary resources. A business organization must be able to market its products and services successfully. Adaptation is improved by anticipating consumer needs and desires, assessing the actions and plans of competitors, evaluating likely constraints and threats (e.g., government regulation, input scarcity, hostile actions by enemies), and identifying marketable products and services that the organization has unique capabilities to provide. Some examples of activities relevant for adaptation include gathering and interpreting information about the environment, identifying threats and opportunities, developing an effective strategy for adapting to the environment, negotiating agreements that are favorable to the organization, influencing outsiders to have a favorable impression of the organization and its products, and gaining cooperation and support from outsiders upon whom the organization is dependent. These activities are aspects of "strategic leadership." Survival and prosperity also depend on the efficiency of the transformation process used by the organization to produce its products and services. Efficiency is increased by finding more rational ways to organize and perform the work, and by deciding how to make the best use of available technology, resources, and personnel. Some examples of leadership responsibilities include designing an appropriate organizational structure, determining authority relationships, and coordinating operations across specialized subunits of the organization. Strategic leadership in organizations is described in Chapter 11. As compared to dyadic or group-level theories of leadership, organization-level theories usually provide a better explanation of financial performance. Distributed leadership is less likely to be ignored in an organization-level theory, because it is obvious that an organization has many designated leaders whose actions must be coordinated. Management practices and systems (e.g., human resource management, operations management, strategic management) are also ignored or downplayed in dyadic and team leadership theories, but in theories of organizational leadership the need to integrate leading and managing is more obvious (Yukl & Lepsinger, 2004). More attention is likely for subjects such as organizational structure and culture, organizational change, executive succession, and influence processes between the CEO and the top management team or board of directors. A limitation of most theories of organizational leadership is that they do not explain influence processes for individual leaders (except sometimes for the chief executive), or influence processes within teams (except in some cases the top-management team).

contingency theories

The lack of consistent results stimulated interest in developing "contingency theories" that can explain why the traits or behaviors required for effective leadership vary for different situations. In the 1970s and 1980s, several contingency theories were proposed, including path-goal theory, situational leadership theory, the LPC contingency model, leader substitutes theory, cognitive resources theory, the multiple-linkage model, and the normative decision model.

Initiating Structure

The other set of behaviors was involved concern for task objectives and was labeled initiating structure. This behavior category included assigning tasks to subordinates, maintaining definite standards of performance, asking subordinates to follow standard procedures, emphasizing the importance of meeting deadlines, criticizing poor work, and coordinating the activities of different subordinates

Machiavellianism

The personality characteristic of Machiavellianism (often abbreviated Mach) is named after Niccolo Machiavelli, who wrote in the sixteenth century on how to gain and use power. An individual high in Machiavellianism is pragmatic, maintains emotional distance, and believes ends can justify means. "If it works, use it" is consistent with a high-Mach perspective. A considerable amount of research has found high Machs manipulate more, win more, are persuaded less, and persuade others more than do low Machs

Situational Approach

The situational approach emphasizes the importance of contextual factors that influence leadership processes. Major situational variables include the characteristics of followers, the nature of the work performed by the leader's unit, the type of organization, and the nature of the external environment. This approach has two major subcategories. One line of research is an attempt to discover the extent to which leadership processes are the same or unique across different types of organizations, levels of management, and cultures. The primary research method is a comparative study of two or more situations. The dependent variables may be managerial perceptions and attitudes, managerial activities and behavior patterns, or influence processes. The other subcategory of situational research attempts to identify aspects of the situation that "moderate" the relationship of leader attributes (e.g., traits, skills, behavior) to leadership effectiveness. The assumption is that different attributes will be effective in different situations, and that the same attribute is not optimal in all situations. Theories describing this relationship are sometimes called "contingency theories" of leadership. A more extreme form of situational theory ("leadership substitutes") identifies the conditions that can make hierarchical leadership redundant and unnecessary.

Networking

Theories and research on dyadic leadership seldom include boundary-spanning behaviors, in part because information about a leader's behavior is typically obtained only by surveying subordinates who have little opportunity to observe how their leader interacts with people outside the work unit or organization. However, just as the research on managerial work (in Chapter 2) identified important boundary-spanning roles and activities, the research on leadership of groups and organizations has identified relevant boundary-spanning behaviors (see also Chapters 10 and 11). Three distinct and broadly defined categories of external behavior are networking, environmental scanning, and representing (Luthans & Lockwood, 1984; Stogdill, Goode, & Day, 1962; Yukl et al., 2002; Yukl & Van Fleet, 1982; Yukl, Wall, & Lepsinger, 1990). Networking involves building and maintaining favorable relationships with peers, superiors, and outsiders who can provide desired information, resources, and political support. The behavior category includes attending professional conferences and ceremonies, joining social networks, socializing informally, doing favors, and using impression management tactics such as ingratiation (see Chapter 8)

Task oriented Behavior

is a broad meta-category, clarifying work roles is a midrange category, and setting clear performance goals is a specific, narrow category.

Heredity

refers to factors determined at conception

Substitute for Leadership

A situational variable can directly influence an outcome such as subordinate satisfaction or performance, or a mediating variable that is a determinant of the outcomes. When a situational variable can make a mediating variable or an outcome more favorable, it is sometimes called a "substitute" for leadership. An example is when subordinates have extensive prior training and experience. The need for clarifying and coaching by the leader is reduced, because subordinates already know what to do and how to do it. A substitute can indirectly influence leader behavior if it becomes obvious to the leader that some types of behavior are redundant and unnecessary. A situational variable can also affect the relative importance of a mediating variable as a determinant of performance outcomes. For example, employee skill is a more important determinant of performance when the task is very complex and variable than when the task is simple and repetitive. Here again, the situational variable can indirectly influence leader behavior if it is obvious to the leader that some types of behavior are more relevant than others to improve performance for the leader's team or work unit.

Transformational Leadership

Another behavior meta-category that was identified in the 1980s is usually called transformational leadership (Bass, 1985), but other terms for it include visionary leadership and inspirational leadership. The component behaviors vary for different theories and measures of transformational leadership, but they usually include a few relations-oriented behaviors such as supporting and developing, a few change-oriented behaviors such as articulating an appealing vision and encouraging innovative thinking, and a few behaviors that are difficult to classify into a single meta-category (e.g., leading by example, talking about personal values, making self-sacrifices for the team or organization). Some of the same behaviors are also described in theories of charismatic leadership. Theories and research involving transformational and charismatic leadership are described in Chapter 12

Guidelines for adaptive leadership

In order to be effective, leaders need to adapt their behavior to changing situations. The following guidelines can help leaders be more flexible and adaptive to their situation (see summary in Table 7-4). The guidelines are based on findings in research on contingency theories and other research using descriptive methods such as critical incidents, observation, case studies, and biographies. Understand your leadership situation and try to make it more favorable. Contingency theories can be used to help understand your leadership situation. The relevant theories include not only the ones described in this chapter, but also theories in other chapters that consider the leadership context. Identify demands, constraints, and choices in your position. Look for ways to increase substitutes and reduce constraints. Find new sources of resources, advice, and assistance. Increase flexibility by learning how to use a wide range of relevant behaviors. One way to increase flexibility and adaptation is to learn how to use a wide range of task, relations, and change behaviors that may be relevant for any situation or challenge you are likely to face in the job. The first step is to identify the types of behaviors and skills that are likely to be useful and assess your current strengths and weaknesses for them. Ways to assess and develop leadership skills are described in Chapter 15. Use more planning for a long, complex task. For a long, complex task with many interrelated activities performed by a large group of people over a considerable period of time (e.g., weeks or months), careful planning is necessary to complete the task on time and within budget. Planning is easier when the steps necessary to carry out the task are known in advance, and the environment is relatively predictable. Some examples of such activities include a construction project, installation of new equipment, introduction of new information systems, and the design and execution of a training program. Guidelines for project planning include the following steps: (1) identify the list of necessary activities, (2) determine the optimal sequence for them, (3) estimate when each activity should begin and end, (4) determine who should be responsible for performing each activity, and (5) identify the resources needed for it. Consult more with people who have relevant knowledge. A major prescription of the Vroom-Yetton (1973) model (see Chapter 5) was the need for more participative leadership when the task is complex and unstructured, and subordinates (or team members) have relevant knowledge and creative ideas about how to perform the task. An additional condition for effective use of consultation is goal congruence. The quality of decisions is likely to be improved when the leader consults with people who have both relevant expertise and strong commitment to achieve task objectives. Sometimes it is appropriate to hold meetings to jointly solve problems, and other times it is more appropriate to consult with one or two individuals before making a decision. Provide more direction to people with interdependent roles. Role interdependence among group members increases role ambiguity, because it requires frequent mutual adjustments in behavior. A team will not achieve high performance unless the actions of its members are closely coordinated. Even when the individual tasks seem relatively structured, members may be confused about how to make mutual adjustments to coordinate their actions. Confusion is greater when team members lack prior experience in performing a particular task together, which is likely in a newly formed team, a team with new members, or a team with a new type of task. Intensive direction by the leader is sometimes needed to coordinate the interdependent actions of different team members, but the amount of required direction may be reduced if the team practices complex activities and members become accustomed to working together closely. Examples include sports teams (e.g., basketball, ice hockey), rescue teams, combat teams, and teams that operate complex equipment (e.g., airplanes, submarines). Team leadership behaviors are described in more detail in Chapter 10 Be more supportive to someone with a highly stressful task. A person who becomes emotionally upset will have more difficulty performing a task successfully, especially if it requires reasoning and problem solving. Stress is increased by unreasonable demands, uncontrollable problems, difficult interpersonal relations (e.g., critical, abusive customers), dangerous conditions (e.g., firefighting, combat, police work), and the risk of costly errors (surgery, financial advisor, aircraft maintenance). People in such situations have more need for emotional support from leaders and coworkers.

Recongnizing

Recognizing involves giving praise and showing appreciation to others for effective performance, significant achievements, and important contributions to the organization. Although it is most common to think of recognition as being given by a manager to subordinates, this managerial practice can also be used with peers, superiors, and people outside the work unit. The primary purpose of recognizing, especially when used with subordinates, is to strengthen desirable behavior and task commitment. Recognizing is primarily a relations behavior, but like developing, it can contribute to the attainment of task objectives as well. Three major forms of recognizing are praise, awards, and recognition ceremonies. Praise consists of oral comments, expressions, or gestures that acknowledge a person's accomplishments and contributions. It is the easiest form of recognition, but it is under-utilized by many managers. Most praise is given privately, but it can be used in a public ritual or ceremony as well. Leaders usually have less discretion in the use of awards or recognition ceremonies, because organizations often have programs and policies specifying the criteria and procedures for this type of recognition. Nevertheless, even low-level leaders have options to be very creative about informal awards. Awards include things such as a certificate of achievement, a letter of commendation, a plaque, a trophy, a medal, or a ribbon. Awards can be announced in many different ways, including an article in the company newsletter, a notice posted on the bulletin board, a picture of the person (e.g., "employee of the month") hung in a prominent place, over a public address system, in regular meetings, and at special ceremonies or rituals. Giving formal awards is a symbolic act that communicates a manager's values and priorities to people in the organization. Thus, it is important for awards to be based on meaningful criteria rather than favoritism or arbitrary judgments. An award that is highly visible allows others to share in the process of commending the recipient and showing appreciation for his or her contributions to the success of the organization. The basis for making the award is more important than the form of the award. Some managers are creative about using awards, and they look for new and unusual awards to use with "planned spontaneity." Examples include home-baked bread, flowers, a bottle of wine, and a picture of the employee with the CEO. A recognition ceremony ensures that an individual's achievements are acknowledged not only by the manager but also by other members of the organization. Recognition ceremonies can be used to celebrate the achievements of a team or work unit as well as those of an individual. Special rituals or ceremonies to honor particular employees or teams can have strong symbolic value when attended by top management, because they demonstrate concern for the aspects of behavior or performance being recognized. Milliken & Company (Peters & Austin, 1985) use a unique version of a recognition ceremony. Once each quarter a "Corporate Sharing Rally" is held to allow work teams to brag about their achievements and contributions. Each of the "fabulous bragging sessions" has a particular theme such as improved productivity, better product quality, or reduced costs. Attendance is voluntary, but hundreds of employees show up to hear teams make short five-minute presentations describing how they have made improvements relevant to the theme. Every participant receives a framed certificate, and the best presentations (determined by peer evaluation) get special awards. In addition to celebrating accomplishments and emphasizing key values (represented by the themes), these ceremonies increase the diffusion of innovative ideas within the company. Most studies that measure contingent reward behavior with leader behavior questionnaires find a positive correlation with subordinate satisfaction, but results for subordinate performance are inconsistent (Podsakoff, Skoder & Tov, 1982; Podsakoff & Todor, 1985). Praise is often given along with tangible rewards, and in much of the research it is difficult to separate their effects. Another source of ambiguity is the limited influence of most managers on the distribution of tangible rewards (e.g., bonus, pay increase, promotion). Formal policies, incentive programs, and union contracts for determining employee compensation and benefits usually provide very limited reward power to managers at the lower and middle levels in large organizations (see Chapter 8). It is difficult to interpret the results from surveys that fail to take into account constraints on leader reward behavior and the effects of company policies and programs (Podsakoff, Todor, Grover, & Huber, 1984). The results are easier to interpret in a survey study or incident study when respondents describe how their leader uses praise. Survey research on the effects of praise and recognition suggest that this type of behavior can be beneficial when used in a skillful way under favorable conditions (e.g., Kim & Yukl, 1995; Yukl et al., 1990). Descriptive studies in organizations suggest that effective leaders provide more recognition to subordinates for their achievements and contributions (Kouzes & Posner, 1987; Peters & Austin, 1985). In a rare field experiment on the effects of praise, Wikoff, Anderson, and Crowell (1983) found that increasing the use of praise by supervisors resulted in improved performance by their employees.

Personality

The sum total of ways which an individual reacts to and interacts with others.

Leadership or Management

There is a continuing controversy about the difference between leadership and management. It is obvious that a person can be a leader without being a manager (e.g., an informal leader), and a person can be a manager without leading. Indeed, some people with the job title "manager" do not have any subordinates (e.g., a manager of financial accounts). Nobody has proposed that managing and leading are equivalent, but the degree of overlap is a point of sharp disagreement. Some writers contend that leadership and management are qualitatively different and mutually exclusive (e.g., Bennis & Nanus, 1985; Zaleznik, 1977). The most extreme distinction assumes that management and leadership cannot occur in the same person. For these writers, leaders and managers differ with regard to their values and personalities. Managers value stability, order, and efficiency, and they are impersonal, risk-averse, and focused on short-term results. Leaders value flexibility, innovation, and adaptation; they care about people as well as economic outcomes, and they have a longer-term perspective with regard to objectives and strategies. Managers are concerned about how things get done, and they try to get people to perform better. Leaders are concerned with what things mean to people, and they try to get people to agree about the most important things to be done. Bennis and Nanus (1985, p. 21) proposed that "managers are people who do things right, and leaders are people who do the right thing." However, the empirical research does not support the assumption that people can be sorted neatly into these two extreme stereotypes. Moreover, the stereotypes imply that managers are generally ineffective. The term manager is an occupational title for a large number of people, and it is insensitive to denigrate them with a negative stereotype. Other scholars view leading and managing as distinct processes or roles, but they do not assume that leaders and managers are different types of people (Bass, 1990; Hickman, 1990; Kotter, 1988; Mintzberg, 1973; Rost, 1991). How the two processes are defined varies somewhat, depending on the scholar. For example, Mintzberg (1973) described leadership as one of the 10 managerial roles (see Chapter 2). Leadership includes motivating subordinates and creating favorable conditions for doing the work. The other nine roles (e.g., resource allocator, negotiator) involve distinct managing responsibilities, but leadership is viewed as an essential managerial role that pervades the other roles. Kotter (1990) proposed that managing seeks to produce predictability and order, whereas leading seeks to produce organizational change. Both roles are necessary, but problems can occur if an appropriate balance is not maintained. Too much emphasis on the managing role can discourage risk taking and create a bureaucracy without a clear purpose. Too much emphasis on the leadership role can disrupt order and create change that is impractical. According to Kotter, the importance of leading and managing depends in part on the situation. As an organization becomes larger and more complex, managing becomes more important. As the external environment becomes more dynamic and uncertain, leadership becomes more important. Both roles are important for executives in large organizations with a dynamic environment. When Kotter surveyed major large companies in a dynamic environment, he found very few had executives who were able to carry out both roles effectively. Rost (1991) defined management as an authority relationship that exists between a manager and subordinates to produce and sell goods and services. He defined leadership as a multidirectional influence relationship between a leader and followers with the mutual purpose of accomplishing real change. Leaders and followers influence each other as they interact in non-coercive ways to decide what changes they want to make. Managers may be leaders, but only if they have this type of influence relationship. Rost proposed that leading was not necessary for a manager to be effective in producing and selling goods and services. However, leading is essential when major changes must be implemented in an organization, because authority is seldom a sufficient basis for gaining commitment from subordinates or for influencing other people whose cooperation is necessary, such as peers and outsiders. Defining managing and leading as distinct roles, processes, or relationships may obscure more than it reveals if it encourages simplistic theories about effective leadership. Most scholars seem to agree that success as a manager or administrator in modern organizations also involves leading. How to integrate the two processes has emerged as a complex and important issue in organizational literature (Yukl & Lepsinger, 2005). The answer will not come from debates about ideal definitions. Questions about what to include in the domain of essential leadership processes should be explored with empirical research, not predetermined by subjective judgments.

Value/ Value System

Values represent basic convictions that "a specific mode of conduct or end-state of existence is personally or socially preferable to an opposite or converse mode of conduct or end-state of existence."61 They contain a judgmental element in that they carry an individual's ideas as to what is right, good, or desirable. Values have both content and intensity attributes. The content attribute says a mode of conduct or end-state of existence is important. The intensity attribute specifies how important it is. When we rank an individual's values in terms of their intensity, we obtain that person's value system. All of us have a hierarchy of values that forms our value system. We find it in the relative importance we assign to values such as freedom, pleasure, self-respect, honesty, obedience, and equality

Variable Pay Program

"Why should I put any extra effort into this job?" asked Anne Garcia, a fourth-grade elementary schoolteacher in Denver, Colorado. "I can excel or I can do the bare minimum. It makes no difference. I get paid the same. Why do anything above the minimum to get by?" Comments like Anne's have been voiced by schoolteachers for decades because pay increases were tied to seniority. Recently, however, a number of states have revamped their compensation systems to motivate people like Anne by tying teacher pay levels to results in the classroom in various ways, and other states are considering such programs.53 A number of organizations are moving away from paying solely on credentials or length of service. Piece-rate plans, merit-based pay, bonuses, profit sharing, gainsharing, and employee stock ownership plans are all forms of a variable-pay program, which bases a portion of an employee's pay on some individual and/or organizational measure of performance. Earnings therefore fluctuate up and down. Variable-pay plans have long been used to compensate salespeople and executives. Some estimates suggest more than 70 percent of U.S. companies have some form of variable-pay plan, up from only about 5 percent in 1970.55 Moreover, recent research shows that 26 percent of U.S. companies have either increased or plan to increase the proportion of variable pay in employee pay programs, and another 40 percent have already recently increased the proportion of variable pay.56 Unfortunately, most employees still don't see a strong connection between pay and performance. Only 29 percent say their performance is rewarded when they do a good job.57 The fluctuation in variable pay is what makes these programs attractive to management. It turns part of an organization's fixed labor costs into a variable cost, thus reducing expenses when performance declines. When the U.S. economy encountered a recession in 2001 and 2008, companies with variable pay were able to reduce their labor costs much faster than others.58 When pay is tied to performance, the employee's earnings also recognize contribution rather than being a form of entitlement. Over time, low performers' pay stagnates, while high performers enjoy pay increases commensurate with their contributions. Let's examine the different types of variable-pay programs in more detail.

Skilled based pay

(also called competency-based or knowledge-based pay) is an alternative to job-based pay that bases pay levels on how many skills employees have or how many jobs they can do.64 For employers, the lure of skill-based pay plans is increased flexibility of the workforce: staffing is easier when employee skills are interchangeable. Skill-based pay also facilitates communication across the organization because people gain a better understanding of each other's jobs. One study found that across 214 different organizations, skill-based pay was related to higher levels of workforce flexibility, positive attitudes, membership behaviors, and productivity.65 Another study found that over 5 years, a skill-based pay plan was associated with higher levels of individual skill change and skill maintenance.66 These results suggest that skill-based pay plans are effective in achieving their stated goals. What about the downsides? People can "top out"—that is, they can learn all the skills the program calls for them to learn. This can frustrate employees after they've been challenged by an environment of learning, growth, and continual pay raises. IDS Financial Services67 found itself paying people more even though there was little immediate use for their new skills. IDS eventually dropped its skill-based pay plan for one that equally balances individual contribution and gains in work-team productivity. Finally, skill-based plans don't address level of performance but only whether someone can perform the skill. Perhaps reflecting these weaknesses, one study of 97 U.S. companies using skill-based pay plans found that 39 percent had switched to a more traditional market-based pay plan 7 years later.

Profit sharing plans

A profit-sharing plan distributes compensation based on some established formula designed around a company's profitability. Compensation can be direct cash outlays or, particularly for top managers, allocations of stock options. When you read about executives like Oracle's Larry Ellison earning $75.33 million in pay, it almost all (88.8 percent in Ellison's case) comes from cashing in stock options previously granted based on company profit performance. Not all profit-sharing plans are so grand in scale. Jacob Luke, age 13, started his own lawn-mowing business after getting a mower from his uncle. Jacob employs his brother, Isaiah, and friend, Marcel Monroe, and pays them each 25 percent of the profits he makes on each yard. Profit-sharing plans at the organizational level appear to have positive impacts on employee attitudes; employees report a greater feeling of psychological ownership

Universal or Contingency Theory

A universal theory describes some aspect of leadership that applies to all types of situations, and the theory can be either descriptive or prescriptive. A descriptive universal theory may describe typical functions performed to some extent by all types of leaders, whereas a prescriptive universal theory may specify functions all leaders must perform to be effective. A contingency theory describes some aspect of leadership that applies to some situations but not to others, and these theories can also be either descriptive or prescriptive. A descriptive contingency theory may explain how leader behavior varies from one situation to another, whereas a prescriptive contingency theory describes effective behavior in a specific situation. The distinction between universal and contingency theories is a matter of degree, not a sharp dichotomy. Some theories include both universal and situational aspects. For example, a prescriptive theory may specify that a particular type of leadership is always effective but is more effective in some situations than in others. Even when a leadership theory is initially proposed as a universal theory, limiting and facilitating conditions are usually found in later research on the theory.

Integrative Approach

An integrative approach involves more than one type of leadership variable. In recent years, it has become more common for researchers to include two or more types of leadership variables in the same study, but it is still rare to find a theory that includes all of them (i.e., traits, behavior, influence processes, situational variables, and outcomes). An example of the integrative approach is the self-concept theory of charismatic leadership, which attempts to explain why the followers of some leaders are willing to exert exceptional effort and make personal sacrifices to accomplish the group objective or mission.

Failure to distinguish between mediators and situational moderators

As noted earlier, mediators are conceptually distinct from situational variables that directly influence leader behavior (demands and constraints) or situational variables (substitutes) that directly influence the mediators (or the outcomes). Confusion about causal relationships is created and potential for leader influence is underestimated when a mediator is treated as an exogenous situational variable beyond the leader's control. For example, the level of subordinate skills is usually influenced both by the aspects of the situation (e.g., type of tasks performed, selection and training systems for the organization) and by the leader's behavior (e.g., clarifying and coaching). Most contingency theories also fail to explain how leaders may improve work unit performance over a longer time period by reducing constraints and increasing substitutes.

Influence Process

Controversy about the definition of leadership involves not only who exercises influence, but also what type of influence is exercised and the outcome. Some theorists would limit the definition of leadership to the exercise of influence resulting in enthusiastic commitment by followers, as opposed to indifferent compliance or reluctant obedience. These theorists argue that the use of control over rewards and punishments to manipulate or coerce followers is not really "leading" and may involve the unethical use of power. An opposing view is that this definition is too restrictive because it excludes some influence processes that are important for understanding why a leader is effective or ineffective in a given situation. How leadership is defined should not predetermine the answer to the research question of what makes a leader effective. The same outcome can be accomplished with different influence methods, and the same type of influence attempt can result in different outcomes, depending on the nature of the situation. Even people who are forced or manipulated into doing something may become committed to it if they subsequently discover that it really is the best option for them and the organization. The ethical use of power is a legitimate concern for leadership scholars, but it should not limit the definition of leadership or the type of influence processes that are studied.

Proactive Personality

Did you ever notice that some people actively take the initiative to improve their current circumstances or create new ones? These are proactive personalities.51 Those with a proactive personality identify opportunities, show initiative, take action, and persevere until meaningful change occurs, compared to others who passively react to situations. Proactives create positive change in their environment, regardless of, or even in spite of, constraints or obstacles.52 Not surprisingly, they have many desirable behaviors that organizations covet. They are more likely than others to be seen as leaders and to act as change agents.53 Proactive individuals are more likely to be satisfied with work and help others more with their tasks, largely because they build more relationships with others.54 Proactives are also more likely to challenge the status quo or voice their displeasure when situations aren't to their liking.55 If an organization requires people with entrepreneurial initiative, proactives make good candidates; however, they're also more likely to leave an organization to start their own business.56 As individuals, proactives are more likely than others to achieve career success.57 They select, create, and influence work situations in their favor. They seek out job and organizational information, develop contacts in high places, engage in career planning, and demonstrate persistence in the face of career obstacles.

Gainsharing

Gainsharing70 is a formula-based group incentive plan that uses improvements in group productivity from one period to another to determine the total amount of money allocated. Its popularity seems narrowly focused among large manufacturing companies, although some health care organizations have experimented with it as a cost-saving mechanism. Gainsharing differs from profit sharing in tying rewards to productivity gains rather than profits, so employees can receive incentive awards even when the organization isn't profitable. Because the benefits accrue to groups of workers, high performers pressure weaker ones to work harder, improving performance for the group as a whole.

Job Enrichment

Job enrichment expands jobs by increasing the degree to which the worker controls the planning, execution, and evaluation of the work. An enriched job organizes tasks to allow the worker to do a complete activity, increases the employee's freedom and independence, increases responsibility, and provides feedback so individuals can assess and correct their own performance.11 How does management enrich an employee's job? Exhibit 8-2 offers suggested guidelines based on the job characteristics model. Combining tasks puts fractionalized tasks back together to form a new and larger module of work. Forming natural work units makes an employee's tasks create an identifiable and meaningful whole. Establishing client relationships increases the direct relationships between workers and their clients (clients can be internal as well as outside the organization). Expanding jobs vertically gives employees responsibilities and control formerly reserved for management. Opening feedback channels lets employees know how well they are doing and whether their performance is improving, deteriorating, or remaining constant.

Summary

Leadership has been defined in many different ways, but most definitions share the assumption that it involves an influence process for facilitating the performance of a collective task. Otherwise, the definitions differ in many respects, such as who exerts the influence, the intended beneficiary of the influence, the manner in which the influence is exerted, and the outcome of the influence attempt. Some theorists advocate treating leading and managing as separate roles or processes, but the proposed definitions do not resolve important questions about the scope of each process and how they are interrelated. No single, "correct" definition of leadership covers all situations. What matters most is how useful the definition is for increasing our understanding of effective leadership. Most researchers evaluate leadership effectiveness in terms of the consequences for followers and other organization stakeholders, but the choice of outcome variables has differed considerably from researcher to researcher. Criteria differ in many important respects, including how immediate they are, and whether they have subjective or objective measures. When evaluating leadership effectiveness, multiple criteria should be considered to deal with these complexities and the different preferences of various stakeholders. Leadership has been studied in different ways, depending on the researcher's methodological preferences and definition of leadership. Most researchers deal only with a narrow aspect of leadership, and most empirical studies fall into distinct lines of research such as the trait, behavior, power, and situational approaches. In recent years, there has been an increased effort to cut across and integrate these approaches. Level of analysis is another basis for classifying leadership theory and research. The levels include intra-individual, dyadic, group, and organizational. Each level provides some unique insights, but more research is needed on group and organizational processes, and more integration across levels is needed. Another basis for differentiating theories is the relative focus on leader or follower. For many years, the research focused on leader characteristics and followers were studied only as the object of leader influence. A more balanced approach is needed, and some progress is being made in that direction. Leadership theories can be classified as prescriptive versus descriptive, according to the emphasis on "what should be" rather than on "what occurs now." A final basis for differentiation (universal versus contingency) is the extent to which a theory describes leadership processes and relationships that are similar in all situations or that vary in specified ways across situations.

Lack of attention to joint effects of situational

Most contingency theories do not explicitly consider how multiple situational variables interact in their moderating effects. The enhancing effects of one situational variable may be dependent on another situational variable. An example is provided by Vroom and Yetton (1973). The benefits of allowing participation by subordinates who have relevant information lacked by the leader (one situational variable) are dependent on a high level of goal congruence (another situational variable), because subordinates may be unwilling to share information that would be detrimental to their future welfare (e.g., ways to improve productivity that would also endanger their job security). A contingency theory can provide a more complete explanation of leader effectiveness if the interacting effects of situational variables are described.

lack of attention to behavior patterns

Most contingency theories explain only the separate, independent effects of each type of leadership behavior included in the theory. Complex interactions among different behaviors (or traits) receive little if any attention. For example, the effects of task-oriented and relations-oriented behaviors are not independent. A high level of relations behavior may not improve performance unless the leader also uses appropriate task-oriented behaviors (Blake & Mouton, 1982; Fleishman & Harris, 1962; Yukl, 1981). The importance of examining joint effects is even greater for specific behaviors than for the meta-categories, because the optimal pattern of specific behaviors will vary more as the situation changes. For example, the need for some task and relations behaviors may remain high for a leader, but the optimal mix of specific behaviors will vary somewhat for different tasks and for different subordinates.

Inadequate explanation of causal effects

Most of the contingency theories do not clearly indicate whether the form of the relationship between the independent variable and the dependent variable changes as the situational variable increases (Podsakoff, MacKenzie, Ahearne, & Bommer, 1995). A leader behavior that has a positive effect on the dependent variable in some situations may have no effect or a negative effect in other situations. Thus, a high level of a leader behavior may be optimal in one situation, but a moderate or low level of the behavior may be optimal in a different situation. A contingency theory should identify situations where the form of the relationship changes and too much of the behavior (or any amount of it) has a negative effect rather than a positive effect.

Influence Based on Reason or Emotions

Most of the leadership definitions listed earlier emphasize rational, cognitive processes. For many years, it was common to view leadership as a process wherein leaders influence followers to believe it is in their best interest to cooperate in achieving a shared task objective. Until the 1980s, few conceptions of leadership recognized the importance of emotions as a basis for influence. In contrast, some recent conceptions of leadership emphasize the emotional aspects of influence much more than reason. According to this view, only the emotional, value-based aspects of leadership influence can account for the exceptional achievements of groups and organizations. Leaders inspire followers to willingly sacrifice their selfish interests for a higher cause. For example, leaders can motivate soldiers to risk their lives for an important mission or to protect their comrades. The relative importance of rational and emotional processes and how they interact are issues to be resolved by empirical research, and the conceptualization of leadership should not exclude either type of process.

Multi Level Theories

Multi-level theories include constructs from more than one level of explanation (Klein, Dansereau, & Hall, 1994; Rousseau, 1985). For example, the independent and dependent variables are at the same level of conceptualization, but moderator variables are at a different level. An even more complex type of multi-level theory may include leader influence on explanatory processes at more than one level and reciprocal causality among some of the variables. Multi-level theories of effective leadership provide a way to overcome the limitations of single-level theories, but it is very difficult to develop a multi-level theory that is parsimonious and easy to apply. The level of conceptualization has implications for the measures and methods of analysis used to test a theory, and multi-level theories are usually more difficult to test than single-level theories (Yammarino, Dionne, Chun, & Dansereau, 2005). Despite the difficulties, there is growing interest in developing and testing multi-level theories of leadership. Efforts to develop multi-level theories, similarities in explanatory processes at different levels, and approaches for multi-level analysis are described in Chapter 16.

Consideration

One set of behaviors involves concern for relationships and was labeled consideration. This behavior category included doing personal favors for subordinates, finding time to listen to a subordinate with a problem, backing up or defending a subordinate, consulting with subordinates on important matters, being willing to accept suggestions from subordinates, and treating a subordinate as an equal.

Guidelines for managing immediate crses

One type of leadership situation that is especially challenging is an immediate crisis or disruption that endangers the safety of people or the success of an activity. Examples of this type of crisis include serious accidents, explosions, natural disasters, equipment breakdowns, product defects, sabotage of products or facilities, supply shortages, health emergencies, employee strikes, sabotage, a terrorist attack, or a financial crisis. Researchers and some practitioners have identified types of leader actions and decision processes that are effective in immediate crises (e.g., DeChurch et al., 2011; Heifetz, Grashow, & Linsky, 2009; Mitroff, 2004; Muffet-Willett & Kruse, 2008). The amount of research is limited, but the findings suggest some practical guidelines for leaders (see summary in Table 7-5). Table 7-5 Guidelines for Dealing with Disruptions and Immediate Crises Anticipate problems and prepare for them. Learn to recognize early warning signs for an impending problem. Quickly identify the nature and scope of the problem. Direct the response by the unit or team in a confident and decisive way. Keep people informed about a major problem and what is being done to resolve it. Use a crisis as an opportunity to make necessary changes. Anticipate problems and prepare for them. Many types of problems that occur only infrequently can be very disruptive and costly. Examples include accidents, medical emergencies, terrorist attacks, supply shortages, strikes, sabotage, and natural disasters. If possible, it is worthwhile to plan in advance how to avoid them. For problems that are unavoidable, contingency plans should be made to cope with them effectively when they eventually occur. Look for best practices found in analysis of past experience with similar problems. Implement training on how to respond to different types of disruptions and emergencies. If appropriate, have the team or work unit practice procedures for handling an emergency, and conduct after-activity reviews to assess preparedness and facilitate learning. Learn to recognize early warning signs for an impending problem. Some types of problems have early warning signs, and a leader should learn to recognize them. A common response to signs that unpleasant events will soon occur is to deny the signs and do nothing in the hope that the problem will go away. However, for some types of disruptions an early response can reduce the impact and costs. The responsibility for detecting emerging problems should be shared with all employees who have opportunities to observe these signs. Quickly identify the nature and scope of the problem. It is essential for the leader to make a quick but systematic analysis of the situation. However, despite the pressure to act quickly, the analysis should not be hasty and superficial. Unless the cause of the problem is identified correctly, time and resources will be wasted in trying to solve the wrong problem. Even when the cause of the problem is obvious, the scope of the problem may not be known initially, and it can be a factor in selecting an appropriate response. Either underestimating or overestimating the scope of a problem can result in an inappropriate response. Direct the response by the unit or team in a confident and decisive way. The need for more direction is especially great for a team that must react quickly in a coordinated way to cope with a serious crisis or emergency for which it is unprepared. Knowing how to remain calm and deal with a crisis in a systematic but decisive manner requires a leader with considerable skill and confidence. The leader should provide clear, confident direction to guide the response of the team or unit. However, the leader should also remain receptive to relevant information and suggestions from followers. Followers often have important information and useful suggestions on how to deal with a crisis, especially when it is a novel one. Keep people informed about a major problem and what is being done to resolve it. In the absence of timely and accurate information about a crisis, harmful rumors are likely to occur, and people may become discouraged and afraid. A manager can help prevent unnecessary stress for subordinates by interpreting threatening events and emphasizing positive elements rather than leaving people to focus on negatives. When feasible, it is helpful to provide short, periodic briefings about progress in efforts to deal with the crisis. Use a crisis as an opportunity to make necessary changes. When a crisis is more than a temporary disruption and is likely to happen again, it should be viewed as a good opportunity to make changes. When the immediate response to a crisis is successful, it can result in a false sense of relief that things can return to normal. However, if the crisis is a warning that traditional strategies or practices are no longer adequate to meet future challenges, then major changes are desirable. The crisis can be an opportunity to gain support for major changes that may otherwise be resisted. Even if major changes are unnecessary, a leader should encourage followers to look for ways to avoid similar crises in the future, or to improve contingency plans for responding to crises that cannot be avoided.

International Values

One of the most widely referenced approaches for analyzing variations among cultures was done in the late 1970s by Geert Hofstede.82 He surveyed more than 116,000 IBM employees in 40 countries about their work-related values and found that managers and employees vary on five value dimensions of national culture: Power distance. Power distance describes the degree to which people in a country accept that power in institutions and organizations is distributed unequally. A high rating on power distance means that large inequalities of power and wealth exist and are tolerated in the culture, as in a class or caste system that discourages upward mobility. A low power distance rating characterizes societies that stress equality and opportunity. Individualism versus collectivism. Individualism is the degree to which people prefer to act as individuals rather than as members of groups and believe in individual rights above all else. Collectivism emphasizes a tight social framework in which people expect others in groups of which they are a part to look after them and protect them. Masculinity versus femininity. Hofstede's construct of masculinity is the degree to which the culture favors traditional masculine roles such as achievement, power, and control, as opposed to viewing men and women as equals. A high masculinity rating indicates the culture has separate roles for men and women, with men dominating the society. A high femininity rating means the culture sees little differentiation between male and female roles and treats women as the equals of men in all respects. Uncertainty avoidance. The degree to which people in a country prefer structured over unstructured situations defines their uncertainty avoidance. In cultures that score high on uncertainty avoidance, people have an increased level of anxiety about uncertainty and ambiguity and use laws and controls to reduce uncertainty. People in cultures low on uncertainty avoidance are more accepting of ambiguity, are less rule oriented, take more risks, and more readily accept change. Long-term versus short-term orientation. This newest addition to Hofstede's typology measures a society's devotion to traditional values. People in a culture with long-term orientation look to the future and value thrift, persistence, and tradition. In a short-term orientation, people value the here and now; they accept change more readily and don't see commitments as impediments to change. How do different countries score on Hofstede's dimensions? Exhibit 5-7 shows the ratings for the countries for which data are available. For example, power distance is higher in Malaysia than in any other country. The United States is very individualistic; in fact, it's the most individualistic nation of all (closely followed by Australia and Great Britain). The United States also tends to be short term in orientation and low in power distance (people in the United States tend not to accept built-in class differences between people). It is also relatively low on uncertainty avoidance, meaning most adults are relatively tolerant of uncertainty and ambiguity. The United States scores relatively high on masculinity; most people emphasize traditional gender roles (at least relative to countries such as Denmark, Finland, Norway, and Sweden).

Comparative evaluation of contingency theories

Table 7-3 lists the major features of the contingency theories described in this chapter and the Vroom and Yetton's (1973) normative decision model described in Chapter 5. The table makes it easier to compare the theories with respect to their content and empirical support. All seven theories contain situational moderator variables, but the variety of situational variables is greater in some theories than in others. It seems desirable for a contingency theory to include many relevant aspects of the situation, but to do so makes a theory difficult to test. Mediating variables are helpful to explain how leaders influence subordinate performance, but only three of the theories have explicit mediating (or intervening) variables. Simple theories seem to have more appeal than complex theories, but simple theories are less useful for explaining effective leadership. One basis for evaluating a leadership theory is in terms of practical applications for improving leadership effectiveness. Some behavioral scientists have questioned whether the early contingency theories have any utility for showing managers how to become more effective. For example, McCall (1977) contends that the hectic pace of managerial work makes it impossible to stop and analyze the situation with a complicated model, and he also questions the implicit assumption of most contingency theories that there is a single best way for the manager to act within a given situation. Leaders face an immense variety of rapidly changing situations, and several different patterns of behavior may be equally effective in the same situation. Most contingency theories do not provide sufficient guidance in the form of general principles to help managers recognize the underlying leadership requirements and choices in the myriad of fragmented activities and problems confronting them. What may be needed is a theory with both universal elements (e.g., general principles) and situational elements (e.g., guidelines to help identify desirable behaviors for a particular type of situation). However, despite the limitations of the situational theories and research, they serve to remind leaders that it is essential to monitor changes in the situation and adjust their behavior in appropriate ways.

Major Perspectives in Leadership Theory and Research

The attraction of leadership as a subject of research and the many different conceptions of leadership have created a vast and bewildering literature. Attempts to organize the literature according to major approaches or perspectives show only partial success. One of the more useful ways to classify leadership theory and research is according to the type of variable that is emphasized the most. Three types of variables that are relevant for understanding leadership effectiveness include (1) characteristics of leaders, (2) characteristics of followers, and (3) characteristics of the situation. Examples of key variables within each category are shown in Table 1-3. Figure 1-2 depicts likely causal relationships among the variables. Characteristics of the Leader Traits (motives, personality) Values, integrity, and moral development Confidence and optimism Skills and expertise Leadership behavior Influence tactics Attributions about followers Mental models (beliefs and assumptions) Characteristics of the Followers Traits (needs, values, self-concepts) Confidence and optimism Skills and expertise Attributions about the leader Identification with the leader Task commitment and effort Satisfaction with job and leader Cooperation and mutual trust Characteristics of the Situation Type of organizational unit Size of organizational unit Position power and authority of leader Task structure and complexity Organizational culture Environmental uncertainty and change External dependencies and constraints National cultural values Figure 1-2 Causal Relationships Among the Primary Types of Leadership Variables Most leadership theories emphasize one category more than the others as the primary basis for explaining effective leadership, and leader characteristics have been emphasized most often over the past half-century. Another common practice is to limit the focus to one type of leader characteristic, namely traits, behavior, or power. To be consistent with most of the leadership literature, the theories and empirical research reviewed in this book are classified into the following five approaches: (1) the trait approach, (2) the behavior approach, (3) the power-influence approach, (4) the situational approach, and (5) the integrative approach. Each approach is described briefly in the following sections

Behavior Approach

The behavior approach began in the early 1950s after many researchers became discouraged with the trait approach and began to pay closer attention to what managers actually do on the job. One line of research examines how managers spend their time and the typical pattern of activities, responsibilities, and functions for managerial jobs. Some of the research also investigates how managers cope with demands, constraints, and role conflicts in their jobs. Most research on managerial work uses descriptive methods of data collection such as direct observation, diaries, job description questionnaires, and anecdotes obtained from interviews. Although this research was not designed to directly assess effective leadership, it provides useful insights into this subject. Leadership effectiveness depends in part on how well a manager resolves role conflicts, copes with demands, recognizes opportunities, and overcomes constraints. Another subcategory of the behavior approach focuses on identifying leader actions or decisions with observable aspects and relating them to indicators of effective leadership. The preferred research method involves a survey field study with a behavior description questionnaire. In the past 50 years, hundreds of survey studies examined the correlation between leadership behavior and various indicators of leadership effectiveness. A much smaller number of studies used laboratory experiments, field experiments, or critical incidents to determine how effective leaders differ in behavior from ineffective leaders.

Transformational Leadership

When different taxonomies are compared, it is obvious that there are substantial differences in the number of behaviors, the range of behaviors, and the level of abstraction of the behavior concepts. Some taxonomies have only a few broad categories, some have many specific behaviors, and some have a few broad categories with specific component behaviors. Some taxonomies are intended to cover the full range of leader behaviors, whereas others only include the behaviors identified in a leadership theory (e.g., theories of charismatic or transformational leadership).