©2012 The McGraw-Hill Companies, Inc. All rights reserved.

ChapterChapter

99

Leadership and CultureLeadership and Culture

Learning Outcomes1. Define leadership, power and

authority

2. Discuss leadership as it relates to management

3. Explain leadership attitudes

Learning Outcomes

4. Describe the differences between a Theory X and Theory Y manager.

5. Explain the differences between transactional, transformational and charismatic leadership styles.

6. Identify strategies for effectively managing corporate culture.

Power, Authority and Leadership

Power• A measure of a person’s potential to get

others to do what he or she wants them to do

• Also to avoid being forced by others to do what he or she does not want to do

Power, Authority and Leadership

Sources of Power• Organizational– Ability to reward or punish– Comes from position

• Personal– Expert: skills, knowledge– Referent: personal characteristics

Power, Authority and Leadership

Authority– The right to issue directives and expend

resources–Related to power but is narrower in scope– Function of position

Power, Authority and Leadership

• A person can have power without formal authority

• Authority decreases if coercive power and reward power decreases

Leadership

The ability to influence people to willingly follow

Informal leader: combine referent and expert power

Leadership vs. Management

• Not the same, but not entirely different• Leadership means creating a vision of the

future and enlisting support from employees

• Management is the process of planning, organizing, staffing, motivating and controlling through formal authority

Leader Attitudes

Douglas McGregor• Theory X – Authoritarian style of leadership

• Theory Y– Democratic or laissez-faire style of leadership

• Self-fulfilling prophecy– The idea that you get what you expect– If manager’s expectations are high, they may get better

results; if expectations are low, productivity is likely to be low

Classifying Leader Types

Study leadership as traits or behaviors• Trait theory– Refers to the characteristics the leader possesses– Research is not consistent

• Behaviors refer to what the leader does

Leadership Styles

• Autocratic– Makes most of the decisions for the group

• Laissez-faire– Allows people within the group to make all of the

decisions• Democratic– Guides and encourages the group to make

decisions

Ohio State Studies

Study to determine what a successful leader does• Created the Leader Behavior Description

Questionnaire– Questionnaire created based on this question– Shows that consideration (showing concern) and

initiating structure (directing group toward goals) were the two most important behaviors

– Leaders who score high on consideration have happier employees

– Relationship between consideration and leader effectiveness depends on the type of group

University of Michigan Studies

• Tried to discover principles that contributed to productivity of group and member satisfaction

• The manager characteristics of a high producing group:– General rather than close supervision– Employees have some authority and responsibility– Managers spend more time supervising– Employee-oriented rather than production-

oriented

More Leadership Studies: Renesis Likert Study

• Four styles of leadership1. Exploitative authoritative2. Benevolent authoritative3. Consultative4. Participative

Managerial Grid

• Developed by Robert Blake and Jane Mouton• Ratings from a questionnaire are based on

level of concern of employee and concern for production

• Identified the following styles:– Authority-obedience– Country club management– Team management– Impoverished management

Contingency Approach:Fred Fiedler

• The study of use of different styles in different situations– Task- or relationship-oriented leader

• Considerations in knowing which style to use– Leader member relations: degree that others trust

and respect the leader– Task structure: how structured is the job task– Position power: influence associated with the job

Path-Goal Theory of Leadership

• Attempts to define the relationships between a leader’s behavior and the subordinates’ performance and work activities

• Leader’s behavior falls into types:– Role classification leadership– Supportive leadership– Participative leadership– Autocratic leadership

• Each leadership behavior results in different levels of performance and satisfaction

Situational Leadership Theory:Paul Henry & Kenneth Blanchard

• Maturity of followers should be a consideration in leadership style

• The amount of structure should be related to the amount of experience the employee has

Classifying Leader Types

• Transactional– Leaders tell employees what to do, take corrective

action if they don’t do it

• Transformational– Cultivating employee acceptance of the group

mission– Encouragement– Inspiration

Classifying Leader Types

• Charismatic – Leaders and followers develop a relationship

based on personality of leader– Usually involves heroic feats on the part of the

leader

Lessons from Leadership Studies

• The selection process can’t be developed to accurately predict successful leaders

• Complications: changing nature of managerial roles

• Most leadership training assumes 1 best way to lead– In reality, leadership is situational– Range of techniques are needed

Managing Corporate Culture

• Culture definition: The set of important understandings that members of a community share in common

• Corporate culture: The way things are done, often unspoken/written

Culture Components

• History– The way things have always been done

• Environment– The mission and goals created and how imbedded

they are into the way things are done• Staffing– The values and personalities of those who are

hired influence culture– How do people “fit”

Culture Components

• Entry socialization– A new employee is most likely to challenge the

culture– Refers to how well a new employee is accepting of

the culture• Strong and weak cultures– A strong culture is clearly defined– In a weak culture, individuals act in ways that are

inconsistent with the company values

Corporate Culture

• Characteristics of corporate culture– Individual autonomy– Structure– Support– Identification– Performance reward– Conflict tolerance– Risk tolerance

Types of Cultures

• Tough person, macho culture– Individualists who take high risks and get quick

feedback– Not much cooperation– Don’t learn from mistakes– Competition

Types of Cultures

• Work hard, play hard culture– Activity is key to success– Rewards accrue to persistence and ability to find a

need and fill it– Value volume and people who are outgoing thrive

Types of Cultures

• Bet your company culture– Requires big-stakes decisions– Lots of time passes before results are known– Pressure to make the right decision always present

Types of Cultures

• Process culture– Low risk with little feedback– Employees focus on how things are done rather

than outcomes• Subcultures– Exist in every organization – Global companies have a variety of subcultures

Cultural Change

• Takes 6-15 years• Change is needed if:– Organization has strong values that do not fit in the

changing environment– Competitive industry– Organization is mediocre– If the company is joining the ranks of a very large

company– The organization is small but growing rapidly

• Time and money involved in changing culture