EVOLUTION OF BUSINESS

LEADERSHIP

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What is Leadership?
 The ability to influence, motivate, and enable
others to contribute to the effectiveness and
success of the organizations of which they are
members.
 Robert House (2004)
 The ability to influence a group toward the
achievement of a vision or set of goals.
 Robbins & Judge (2008)
"Leadership is a function of knowing yourself, having
a vision that is well communicated, building
trust among colleagues, and taking effective
action to realize your own leadership potential."
Prof. Warren Bennis
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MANAGEMENT VS. LEADERSHIP
Management is doing things right, leadership
is doing the right things” (Warren Bennis and Peter
Drucker)

• Position • Practices/Behaviors
• Compliance • Commitment
• Do things right • Do the right thing
• Status quo • Change
• Short-term • Long-term
• Means • Ends
• Builders • Architects
• Problem solving • Inspiring/motivating

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 Leadership & Management
Skills– soft skills
Leadership
 Communications
 Motivation
 Stress Management
 Team Building
 Change Management
Management – hard skills
 Scheduling
 Staffing
 Activity Analysis
 Project Controls
 Three Spheres of Leadership

1. Lead Yourself: Involves knowing who you are, what

your strengths and weaknesses are, what your
personal mission (or life purpose) is, why you get out
of bed every morning, and what you need to do to
stay motivated.
2. Lead the Team: Involves motivating and inspiring
excellent performance, creating an atmosphere of
trust and openness, and removing barriers and
obstacles to success.
3. Lead the Business: Involves building a direction and
strategy, communicating that direction, implementing
the details through people and teams, measuring
results, and responding to a changing environment.

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FDIC OMWI Education Module: Building Your Leadership Skills
Types of Leadership Style
Types of Leadership Style

• Autocratic:
• Leader makes decisions without
reference to anyone else
• High degree of dependency on the
leader
• Can create de-motivation and alienation
of staff
• May be valuable in some types of
business where decisions need to be
made quickly and decisively
Types of Leadership Style
• Democratic: Encourages decision making from
different perspectives – leadership may be
emphasised throughout the organisation
• Consultative: process of consultation before
decisions are taken
• Persuasive: Leader takes decision and seeks to
persuade others that the decision is correct
 Democratic:
 May help motivation and involvement
 Workers feel ownership of the firm and its
ideas
 Improves the sharing of ideas
and experiences within the business
 Can delay decision making
 Types of Leadership Style
• Laissez-Faire:
• ‘Let it be’ – the leadership responsibilities
are shared by all
• Can be very useful in businesses where
creative ideas are important
• Can be highly motivational, as people have
control over their working life
• Can make coordination and decision making
time-consuming and lacking in overall
direction
• Relies on good team work, good
interpersonal relations
Theories of Leadership
Trait Theories of
Leadership
Great Man Theories
• Leaders are exceptional people, born with
innate qualities, destined to lead
• Term 'man' was intentional - concept was
primarily male, military and Western
Trait Theories
• Research on traits or qualities associated with
leadership are numerous
• Traits are hard to measure. For example, how
do we measure honesty or integrity?
 Little agreement on leadership traits
 Traits can be developed/improved
 In isolation, narrow traits have little utility

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 Leadership Traits and Skills
Traits
• Adaptable to situations Skills
• Alert to social environment • Clever (intelligent)
• Ambitious and achievement • Conceptually skilled
orientated
• Creative
• Assertive
• Cooperative • Diplomatic and tactful
• Decisive • Fluent in speaking
• Dependable • Knowledgeable about group task
• Dominant (desire to influence • Organised (administrative ability)
others) • Persuasive
• Energetic (high activity level) • Socially skilled
• Persistent Stogdill, 1974
• Self-confident
• Tolerant of stress Leaders will also use:
• Willing to assume responsibility Integrity, Honesty, Compassion,
Humility
Trait Theories Today
 CANOE.
- Conscientiousness is exemplified by being disciplined, organized,
and achievement-oriented.
- Agreeableness refers to being helpful, cooperative, and
sympathetic towards others.
- Neuroticism refers to degree of emotional stability, impulse
control, and anxiety.
- Openness is reflected in a strong intellectual curiosity and a
preference for novelty and variety.
- Extraversion is displayed through a higher degree of sociability,
assertiveness, and talkativeness.
 CANOE Dimensions
 Extroversion relates most strongly to leadership
 Conscientiousness and openness to experience strongly
related to leadership
 Charisma
 Confidence
 Credibility: Integrity, Track Record 16

 Emotional Intelligence
 BEHAVIORAL
APPROACHES:
OHIO STATE STUDIES
 LEADERSHIP BEHAVIORS:
 1. Initiating structure:
 The extent to which a leader is likely to
define and structure his or her role and
those of subordinates.
 2. Consideration:
 The extent to which a leader is likely to
build job relationships characterized by
mutual trust, respect for subordinates'
ideas, and regard for their feelings.
 Effective leaders achieve both.
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 BEHAVIORAL
APPROACHES:
MICHIGAN STUDIES
 LEADERSHIP TYPES:
 1. Production Oriented Leaders:
 Focus on the technical or task aspects of the job
 See people as a means to goal accomplishment
 2. Employee Oriented Leaders:
 Emphasize interpersonal relations
 Take a personal interest in subordinate needs
 Accept individual differences
 Effectiveness is associated with
employee oriented leadership
behaviors.
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 Theories of Leadership
• Behavioural: Imply that leaders
can be trained – focus on the way
of doing things
• Structure based behavioural
theories – focus on the leader
instituting structures – task
orientated
• Relationship based behavioural
theories – focus on the development
and maintenance of relationships –
process orientated
Theories of Leadership
 Contingency Theories:
 Leadership as being more flexible –
different leadership styles used at
different times depending on the
circumstance.
 Suggests leadership is not a fixed
series of characteristics that can be
transposed into different contexts
 Leadership Theory
Situational/contingency Leadership (Hersey-Blanchard, 1970/80)
Leadership style changes according to the 'situation‘ and in response to the
individuals being managed – their competency and motivation

Competency Low competence Some High competence High competence

competence

Low Variable Variable High

Motivation commitment/ commitment/ commitment/ commitment/
Unable and Unable but Able but Able and willing
unwilling or willing or unwilling or or motivated
insecure motivated insecure
Leadership style DIRECTIVE COACHING SUPPORTIVE DELEGATORY
(Telling) (Selling) (Participating) (Observing)
Contemporary Theories

 Leaders are individuals who inspire

followers through their words, ideas,
and behaviors.
 Charismatic Leadership
 Transformational Leadership

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Full Range of Leadership
Model

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 New Leadership Theory
Transformational Theory (Bass and Avolio, 1994)
Leaders inspire individuals, develop trust, and encourage
creativity and personal growth
Individuals develop a sense of purpose to benefit the group,
organisation or society. This goes beyond their own self-
interests and an exchange of rewards or recognition for
effort or loyalty.
 Transformational Leaders: Motivate followers to go beyond
normal expectations by pushing their comfort zone.
 Transactional Leaders: Guide followers to accomplish
established goals by clarifying requirements and
emphasizing extrinsic rewards.
 Theories of Leadership
• Transformational:
• Widespread changes to a business or
organisation
• Requires:
• Long term strategic planning
• Clear objectives
• Clear vision
• Leading by example – walk the walk
• Efficiency of systems and processes
Theories of Leadership
 May depend on:
 Type of staff
 History of the business
 Culture of the business
 Quality of the relationships
 Nature of the changes needed
 Accepted norms within the
institution
 Leadership Philosophies
Ethical Leadership
 CSR, sustainability, equality, humanitarianism
 Four P’s - Purpose, People, Planet, Probity

Alan Chapman, 2006

 Theories of Leadership
 Transactional Theories:
 Focus on the management of the
organisation
 Focus on procedures and efficiency
 Focus on working to rules and contracts
 Managing current issues and problems
Factors Affecting Style
Factors Affecting Style

 Risk - decision making and change initiatives

based on degree of risk involved
 Type of business – creative business or supply
driven?
 How important change is – change for
change’s sake?
 Organisational culture – may be long
embedded and difficult to change
 Nature of the task – needing cooperation?
Direction? Structure?
Charismatic and
Transformational
Leadership
 Charismatic leaders are
passionate, driven individuals who
are able to paint a compelling
vision of the future.
 The combination of a compelling
vision, heightened emotional
levels, and strong personal
attachments often compels
followers to put forth greater effort
to meet organizational or societal
challenges.
Early Conceptions of Charismatic
Leadership
 Charisma: “divinely inspired gift.”

 describe a form of influence based not on tradition or

formal authority but rather on follower perceptions
that the leader is endowed with exceptional
qualities.

 charisma occurs when there is a social crisis, a leader

with exceptional personal qualities emerges with a radical
vision that provides a solution to the crisis and attracts
followers who believe in the vision and perceive the leader
to be extraordinary.
Common Characteristics of
Charismatic and Transformational
Leaders
 Vision
 Rhetorical Skills
 Image and Trust Building
 Personalized Leadership
 High degree of self-confidence
 Strong conviction in the correctness of their ideas
 High level of energy and enthusiasm
 High degree of expressiveness
 Excellent communication and articulation skills
 Active role modeling and image building
 Identification with the Leader and the Vision
 Heightened Emotional Levels
 Willing Subordination to the Leader
 Feelings of Empowerment
Characteristics of Followers of
Charismatic Leaders
 High degree of respect and esteem for leader
 Loyalty and devotion to leader
 Affection for the leader
 High performance expectations
 Willing compliance to the leader
Situational Characteristics
(Hughes, et.al.)
 Crises
 Task Interdependence
 Innovation
 More Receptive to Change
 Organizational Downsizing
 Situational Requirements of
Charismatic Leadership

 Sense of distress or crisis

 Perceived need for change
 Opportunity to articulate ideological goal
 Availability of dramatic symbols
 Opportunity to clearly articulate followers’
role
Burns (1978) Theory of
Transformational
& Transactional
 Burns’ 1978 Theory Leadership
of Transformational and
Transactional Leadership distinguished first
between power and leadership. Power
wielders influence others to attain their own
personal goals; leaders mobilize resources to
arouse and satisfy followers’ needs and
goals.
 Leadership itself can take one of two forms:
 Transactional Leadership is an exchange
relationship that is mutually beneficial to leader
and followers and built around the modal values
such as honesty and fairness.
 Transformational Leadership changes the
status quo by appealing to a higher purpose and to
end values such as liberty and equality.
Transactional Leadership

 Transactional leadership occurs when

leaders and followers are in an
exchange relationship in order to get
needs met.

 Transactional leadership: Leaders

who guide or motivate their followers
direction of established goals by
clarifying role and task requirements.
Transformational
Leadership
 Transformational Leadership serves to change
the status quo by appealing to followers’
values and their sense of higher purpose.

 Transformational Leadership:
 Leaders who inspire followers to transcend their own
self-interests for the good of the organization by
clarifying role and task requirements.
 Leaders who also are capable of having a profound
and extraordinary effect on their followers.
A Leaders’ Vision Of the
Future Can Align Efforts and
Help Groups Accomplish More

Groups that lack

vision

Groups with vision

 Guidelines for Transformational
Leaders
 Articulate a clear and appealing vision.
 Explain how the vision can be attained.
 Act confident and optimistic.
 Express confidence in followers.
 Provide opportunities for early successes.
 Celebrate successes.
 Use dramatic, symbolic actions to emphasize key
values.
 Lead by example.
 Empower people to achieve the vision.
Emerging Leadership Approaches
21st century-Complexity of leadership
Visionary leadership/Authentic leadership/Heroic
leadership/ Spirituality in Leadership
 Visionary Leadership
 A leader who creates and articulates a realistic,
credible, and attractive vision of the future that
improves upon the present situation.
 Visionary leaders have the ability to:
 Explain the vision to others.
 Express the vision not just verbally but through behavior.
 Extend or apply the vision to different leadership contexts.
 Authentic Leadership-(Bill
 George)
Founded in Greek philosophical notion of “to
thine own self be true” = ‘be true to yourself’
 Strong ethical convictions that guide behavior
 Not so much avoiding doing what is “wrong”
as much as trying to do what is “right”
 Has gained momentum recently because of
beliefs that:
 Enhancing self-awareness can help people in
organizations find more meaning and connection at
work.
 Promoting transparency and openness in
relationships builds trust and commitment.
 Fostering more inclusive structures and practices
can help build more positive ethical climates.
 Heroic Leadership
 Give people a reason to come to work.
 Help them develop a passion for their work.
Instill in them a sense of commitment to their
colleagues.
 Develop their sense of responsibility to
customers.
 Be loyal to the organization’s people.