Leadership Concept, Theories and Styles

Unit-IV: LEADERSHIP
By
Dr. H.S. ABZAL BASHA, M.B.A., Ph.D.
Assistant Professor,
Department of Management Studies,
G. Pullaiah College of Engineering & Technology,
Kurnool.

Story
A group of workers and their leaders are set a task of clearing a
road through a dense jungle on a remote island to get to the
coast where an estuary provides a perfect site for a port.
The leaders organise the labour into efficient units and monitor
the distribution and use of capital assets – progress is excellent.
The leaders continue to monitor and evaluate progress, making
adjustments along the way to ensure the progress is
maintained and efficiency increased wherever possible.
Then, one day amidst all the hustle and bustle and activity, one
person climbs up a nearby tree. The person surveys the scene
from the top of the tree.

Leadership Story
And shouts down to the assembled group below…
“Wrong Way!”
(Story adapted from Stephen Covey (2004) “The Seven Habits
of Highly Effective People” Simon & Schuster).
“Management is doing things right,
leadership is doing the right things”
(Warren Bennis and Peter Drucker)

Definition
The ability to positively influence people and
systems to have a meaningful impact and
achieve results.
 Leading People
 Influencing People
 Commanding People
 Guiding People

Characteristics of Leadership
1. Leader must have followers
2. It is working relationship between leader and
followers
3. Purpose is to achieve some common goal or goals
4. A leader influences his followers willingly not by
force
5. Leadership is exercised in a given situation
6. Leadership is a power relationship
7. It is a continuous process

A Question…
A leader need not be a manager but a manager
must have many of the qualities of a good
leader?????
Managerial Leadership

Significance
1. Setting Goals
2. Motivating Employees
3. Building morale
4. Creating Confidence
5. Discipline
6. Developing Team-work
7. Facilitates Change
8. Representing the group

Leadership Styles
• Leader by the position achieved
• Leader by personality, charisma
• Leader by moral example
• Leader by power held
• Intellectual leader
• Leader because of ability to accomplish things

Leadership Management
 Working on the system Create
opportunities and Seek
opportunities
 Change organizational rules
Provide a vision to believe in
and strategic alignment
 Motivate people by satisfying
basic human needs
 Inspire achievement and
energize people
 Coach followers, create self-
leaders and empower them
 Working in the system React
 Control risks
 Enforce organizational rules
Seek and then follow direction
 Control people by pushing
them in the right direction
 Coordinate effort Provide
instructions

Few of Indian Business Leaders
1. Ratan Tata (Tata Sons-1991)
2. Azeem Premji (Wipro-1980)
3. Dhirubhai Ambani (RIL-1966)
4. Shiv Nadar (HCL-1976)
5. N. R. Narayana Murthy (Infosys-1981)
6. CK Ranganathan (Chick -1983)
7. Dr. Anji Reddy (Drreddy’s Lab-1984)
8. Sunil Bharathi Mittal (Airtel-1995)
9. Dr. Vara Prasad (Shantha Biotech-1993)
10. Shahnaz Hussain (SHG-2004)
1. Rahul Sharma (Micromax-2000)
2. Phanindra Sharma (Red Bus-2006)
3. Sachin & Binni Bhansal (Flipkart-2007)
4. Vijay Shekar Sharma (Paytm-2010)
5. Bhavesh Agarwal (Ola Cabs-2010)
6. Ravendran (Byjus-2011)
7. Ritesh Agarwal ( Oyo Rooms-2013)
8. Nandan Reddy (Swiggy -2014)
9. Vijaya Reddy (SheCabs-2014)

Leadership Traits
• Intelligence
– More intelligent than non-
leaders
– Scholarship
– Knowledge
– Being able to get things
done
• Physical
– Doesn’t seem to be
correlated
• Personality
– Verbal facility
– Honesty
– Initiative
– Aggressive
– Self-confident
– Ambitious
– Originality
– Sociability
– Adaptability

Leadership styles
• Autocratic Management Style
• Democratic Management Style
• Laissez Faire Management style
Transactional Leadership
Transformational Leadership

Leadership styles
Autocratic:
o Leader makes decisions without reference to anyone else
o High degree of dependency on the leader
o Can create de-motivation and alienation of staff
o May be valuable in some types of business where decisions
need to be made quickly and decisively

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

Laissez-Faire:
1. ‘Let it be’ – the leadership responsibilities are shared by all
2. Can be very useful in businesses where creative
ideas are important
3. Can be highly motivational, as people have control over their
working life
4. Can make coordination and decision making time-consuming
and lacking in overall direction
5. Relies on good team work
6. Relies on good interpersonal relations

Paternalistic: relating to or characterized by the
restriction of the freedom and responsibilities of
subordinates or dependants in their supposed
interest.
Leader acts as a ‘father figure’
Paternalistic leader makes decision but may consult
Believes in the need to support staff

LEADERSHIP THEORIES
• TRAIT THEORY
• BEHAVIOURAL THEORIES
• CONTINGENCY THEORIES
• MODERN THEORIES

Theories
Traditional Theories
Trait Theory
Group &
Exchange
Theory
Behavioural Theories
Ohio State Studies
University of
Michigan Studies
Scandinavian Studies
Continuous Theory
Likert’s 4 Systems
Managerial Grid
Leader Participation
Model
Contingency Theories
Tannenbaum and
Schmidt's
Fielder's Contingency
Path Goal Theory
Hersey and
Blanchard’s Life Cycle
Approach
Modern Theories
Charismatic Leadership Theory
Transformational Leadership
Theory

1, Trait Theories
Leadership Traits:
• Ambition and energy
• The desire to lead
• Honest and integrity
• Self-confidence
• Intelligence
• High self-monitoring
• Job-relevant knowledge
The trait theory of
leadership focuses on
identifying different
personality traits and
characteristics that are linked
to successful leadership across
a variety of situations.
Theories that consider
personality, social, physical, or
intellectual traits to
differentiate leaders from
nonleaders.

Trait Theories
Limitations:
• No universal traits found that predict leadership in
all situations.
• Unclear evidence of the cause and effect of
relationship of leadership and traits.

2. Behavioral Theories
• Trait theory:
Leaders are born, not made.
• Behavioral theory:
Leadership traits can be taught.
Behavioral Theories of Leadership
Theories proposing that specific behaviors
differentiate leaders from nonleaders.

a. Ohio State Studies
Initiating Structure
The extent to which a leader is
likely to define and structure his
or her role and those of sub-
ordinates in the search for goal
attainment.
Consideration
The extent to which a leader is likely to have job
relationships characterized by mutual trust, respect
for subordinate’s ideas, and regard for their feelings.

b. University of Michigan Studies
Employee-Oriented Leader
Emphasizing interpersonal relations; taking a
personal interest in the needs of employees and
accepting individual differences among members.
Production-Oriented Leader
One who emphasizes technical
or task aspects of the job.

c. The
Managerial Grid
(Blake and Mouton)
E X H I B I T
11–1

Managerial Grid (continued)
9
8
7
6
5
4
3
2
1
1 2 3 4 5 6 7 8 9
**manager
’s goal is
9,9**

3. Contingency Theories
Fiedler’s Contingency Model

a. Fiedler’s Model: Defining the
Situation
Leader-Member Relations
The degree of confidence, trust, and respect
subordinates have in their leader.
Task Structure
The degree to which the job assignments are
procedurized.
Position Power
Influence derived from one’s formal structural
position in the organization; includes power to
hire, fire, discipline, promote, and give salary
increases.

b. Hersey and Blanchard’s
Situational Leadership Theory
Situational Leadership Theory (SLT)
A contingency theory that focuses on followers’
readiness.
Leader: decreasing need
for support and supervision
Follower readiness:
ability and willingness
Unable and
Unwilling
Unable but
Willing
Able and
Willing
Directive High Task and Relationship
Orientations
Supportive
Participative
Able and
Unwilling
Monitoring

Leadership Styles and
Follower Readiness
(Hersey and Blanchard)
Supportive
Participative Monitoring
Leadership
Styles
Directive
High Task
and
Relationship
Orientations
Willing
Unwilling
Able
Unable
Follower
Readiness

c.Leader–Member Exchange
Theory
• Leader-Member Exchange (LMX) Theory
• Leaders create in-groups and out-groups,
and subordinates with in-group status will
have higher performance ratings, less
turnover, and greater job satisfaction.

Autocratic Management Style
• an autocratic manager dictates orders to their
staff and makes decisions without any
consultation.
• The leader likes to control the situation they are
in.
• Decision are quick .
• This type of management style can decrease
motivation and increase staff turnover

Democratic or participative style
• A democratic manager delegates authority to the
staff, giving them responsibility to complete the task.
• Staff will complete the tasks using their own work
methods on time.
• Employees are involved in decision making giving
them a sense motivating individuals.
• Increases job satisfaction by involving employees or
team members .
• Slow decision making process.

Laissez Faire Management style
• A laissez faire manager sets the tasks and gives staff
complete freedom to complete the task as they see fit.
“leave it be”.
• It works for teams in which the individuals are very
experienced and skilled self-starters.
• There is minimal involvement from the manager.
• The manager coaches or supply information if
required.
• Benefits - staff are developed to take responsibility .
• Staff feel lost and not reach the goals set within the
time frame

Autocratic Laissez - Faire
Leaders control
Employee Control

Transactional & Transformational Leadership
Transactional Leaders
Leaders who guide or motivate
their followers in the direction
of established goals by
clarifying role and task
requirements.
Transformational Leaders
Leaders who provide
individualized consideration
and intellectual stimulation,
and who possess charisma.
James MacGregor Burns, who
studied political leaders like
Roosevelt and Kennedy, first
described these two distinct
styles of leadership in his
1978 book, Leadership.
He used the word
‘transforming' rather than
'transformational'.
Both terms are used
here, and they mean the
same.

Transactional leadership?
Wikipedia’s definition of transactional
leadership is all about promoting
compliance from the leader by either
offering rewards or serving
“punishment.”
Traits of transactional leadership include:
• It’s a responsive leadership style
• It’s about following the rules
• It’s about rewards and punishments
• Productivity wins
• Culture fit – work within the culture
• Motivation by “what’s in it for me”
• Management by exception
• It’s a push leadership style
Transformational leadership?
It’s about building the commitment of
followers (i.e staff) through motivation
and inspiration rather than through
rewards and punishment.
Traits of transformational leadership include:
• It’s a proactive leadership style
• It’s about winning the hearts and minds of
your people
• It’s about motivation and inspiration
• Creativity and long term change wins
• Culture add – people add to the culture
through their ideas
• Motivation by “what’s best for the company”
• It’s a pull leadership style

Transactional Vs. Transformational Leadership
Basis of Distinction Transactional Transformational
Basis
Based on exchange
relationship between leader
and followers.
Based on leaders values,
beliefs and needs of
followers
Method of inspiration
Rewards and recognition for
good performance
Leaders charisma, vision
and energy
Orientation Task Orientaion Goal Orienatation
Approach Passive and stable Active and dynamic
Main functions of leader
Determination of objectives,
clarifying tasks, helping
subordinates in achieving
objectives
Providing vision and sense
of mission, instilling pride,
gaining respect and trust,
inspiring people, giving
personal attention.

Transactional leaders focuses on the role of supervision, organization, and group
performance. They are concerned about the status quo and day-to-day progress toward
goals. Transformational leaders work to enhance the motivation and engagement of
followers by directing their behavior toward a shared vision.

Characteristics of Transactional Leaders
Contingent Reward: Contracts exchange of
rewards for effort, promises rewards for good
performance, recognizes accomplishments.
searches for deviations from rules
Management by Exception: Watches and
and
standards, takes corrective action.

Characteristics of Transformational Leaders
Idealized Influence: Provides vision and sense of mission,
instills pride, gains respect and trust.
Inspiration: Communicates high expectations, uses
symbols to focus efforts, expresses important purposes in
simple ways.
Intellectual Stimulation: Promotes intelligence, rationality,
and careful problem solving.
Individualized Consideration: Gives personal attention,
treats each employee individually, coaches, advises.

 Integrity
 Ability to delegate
 Communication
 Self-awareness
 Gratitude
 Learning agility
 Influence
 Empathy
 Courage
 Respect
Based on our research, we’ve found that great leaders consistently
possess these 10 essential leadership skills:

Leadership Theories
Trait Theory
• Early on, it was thought that leaders were born with
inherent physiological and personality traits
– Age
– Height
– Intelligence
– Academic achievements
• Stogdill (1974) – identified several general factors that
differentiate leaders from non-leaders…

Leadership Theories
Trait Theory (continued)
• Capacity: problem-solving capabilities, making judgments and
working hard
• Achievements: accomplishments such as academic record,
knowledge and sports
• Responsibility: dependability, reliability, self-drive, perseverance,
aggressiveness and self-confidence
• Participation and involvement: highly developed social interaction,
popularity, swift adaptation to changing situations, and easier
cooperation compared to non-leaders
• Socio-economic status: effective leaders usually belong to higher
socio-economic classes

Leadership Theories
Behavioral Theories
• Ohio State studies focused on task and social behavior of leaders
• Identified two dimensions of leader behavior
– Initiating Structure: role of leader in defining his/her role and
roles of group members
– Consideration: leader’s mutual trust and respect for group
members’ ideas and feelings
• Two different behavioral theories:
Role Theory
Managerial Grid

Leadership Theories
Managerial Grid
• Developed by Drs. Robert R. Blake and Jane S. Mouton
• Believed managers have different leadership styles which led to
two different dimensions of leadership:
• Concern for Production: manager who is task-oriented
and focuses on getting results or accomplishing the
mission (X-axis of grid)
• Concern for People: manager who avoids conflicts and
strives for friendly relations with subordinates (Y-axis of
grid)

Leadership Theories
Participative Theories
• Assumes the following
– Involvement in decision-making improves the understanding
of the issues involved and the commitment of those who
must carry out the decisions.
– People are less competitive and more collaborative when
they are working on joint goals.
– Several people deciding together make better decisions
than one person alone.
• Two different participative theories:
 Lewin’s leadership styles
 Likert’s leadership styles

Likert’s system of Leadership
• Rensis Likert and his associates studied the patterns and styles of
managers for three decades at the University of Michigan, USA, and
identified a four-fold model of management systems.
1. The model was developed on the basis of a questionnaire
administered to managers in over 200 organizations and research
into the performance characteristics of different types of
organizations.
2. The four systems of management system or the four leadership
styles identified by Likert are:

• System 1 - Exploitative Authoritative: Responsibility lies in the hands of the people at
the upper echelons of the hierarchy. The superior has no trust and confidence in
subordinates. The decisions are imposed on subordinates and they do not feel free at all
to discuss things about the job with their superior. The teamwork or communication is
very little and the motivation is based on threats.
• System 2 - Benevolent Authoritative: The responsibility lies at the managerial levels
but not at the lower levels of the organizational hierarchy. The superior has condescending
confidence and trust in subordinates (master-servant relationship). Here again, the
subordinates do not feel free to discuss things about the job with their superior. The
teamwork or communication is very little and motivation is based on a system of rewards.
• System 3 - Consultative: Responsibility is spread widely through the organizational
hierarchy. The superior has substantial but not complete confidence in subordinates. Some
amount of discussion about job related things takes place between the superior and
subordinates. There is a fair amount of teamwork, and communication takes place
vertically and horizontally. The motivation is based on rewards and involvement in the job.
• System 4 - Participative: Responsibility for achieving the organizational goals is
widespread throughout the organizational hierarchy. There is a high level of confidence
that the superior has in his subordinates. There is a high level of teamwork,
communication, and participation.

Conclusion
• According to Rensis Likert, the nearer the behavioral
characteristics of an organization approach System 4
(Participative), the more likely this will lead to long-
term improvement in staff turnover and high
productivity, low scrap, low costs, and high earnings,
if an organization wants to achieve optimum
effectiveness, then this is the ideal system

Leadership Continuum
• A simple model which shows the relationship
between the level of freedom that a manager
chooses to give to a team, and the level of
authority used by the manager. As the team's
freedom is increased, so the manager's
authority decreases. This is a positive way for
both teams and managers to develop.

Contingency Theory
• Assumptions:
– No one best way of leading
– Ability to lead contingent upon various situational
factors:
• Leader’s preferred style
• Capabilities and behaviors of followers
• Various other situational factors
• Effect:
– Leaders who are successful in one situation may
become unsuccessful if the factors around them
change
Leadership Theories

Contingency Theory: Fiedler’s Least Preferred Co-Worker
(LPC) Theory
• Assumptions:
– Leaders prioritize between task-focus and people-focus
– Leaders don’t readily change their style
• Key situational factor in matching leader to situation:
• Relationships
• Power
• Task structure
• LPC Questionnaire
– Determines leadership style by measuring responses to 18 pairs of
contrasting adjectives.
– High score: a relationship-oriented leadership style
– Low score: a task-oriented leadership style
• Tries to identify the underlying beliefs about people, in particular whether the
leader sees others as positive (high LPC) or negative (low LPC).
Leadership Theories

Exhibit 17.4
Findings of the Fiedler Model
Leadership Theories

Situational Leadership
• Situational factors (motivation, capability of followers,
relationship between followers and leader) determine
the best action of leader
• Leader must be flexible to diagnosis leadership style
appropriate for situation and be able to apply style
• No one best leadership style for all situations
Leadership Theories

Hersey & Blanchard’s Situational Leadership (1977)
Identified 4 different leadership styles based on readiness of followers
R1. Telling (high task/low relationship behavior)
• Giving considerable attention to defining roles and goals
• Recommended for new staff, repetitive work, work needed in a short time span
• Used when people are unable and unwilling
R2. Selling (high task/high relationship behavior)
• Most direction given by leader encouraging people to ‘buy into’ task
• Used when people are willing but unable
R3. Participating (high relationship/low task behavior)
•
• Decision making shared between leaders and followers, role of leader to facilitate
and communicate
Used when people are able but unwilling
R4. Delegating (low relationship/low task behavior)
• Leader identifies problem but followers are responsible for carrying out response
• Used if people are able and willing
Leadership Theories

Source: Reprinted with permission from the Center for Leadership
Studies. Situational Leadership® is a registered trademark of the Center
for Leadership Studies. Escondido, California. All rights reserved.
Leadership Theories
Hersey & Blanchard’s Model

Summary of Leadership Theories
Theory Leadership Based On…
Trait Theory Leaders born with leadership traits
Behavioral Theory Initial structure and consideration
- Role Theory Shaped by culture, training, modeling
- Managerial Grid Concern for production and concern for people
Participative Leadership More people involved = better collaboration
- Lewin’s Style Autocratic, democratic, laissez-faire
- Likert’s Style Task oriented, relationship oriented, participative style
Contingency Theories No one best leadership style
- Fiedler’s LPC Theory Task focus v. relationship focus
- Cognitive Resource Theory Intelligence and experience make a difference
- House’s Path Goal Theory Help followers make their goals compatible with
organizational goals
Situational Leadership Similar to contingency theory
- Hersey and Blanchard Based on relationship between leader and follower
and task behavior
- Vroom & Yetton Decision quality and decision acceptance

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