Chapter Nine

Leadership and Decision Making

After reading this chapter, you should be able to:

1. Define leadership and distinguish it from management.

2. Summarize early approaches to the study of leadership.

3. Discuss the concept of situational approaches to leadership.

4. Describe transformational and charismatic perspectives on leadership.

L E A R N I N G O B J E C T I V E SL E A R N I N G O B J E C T I V E S

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After reading this chapter, you should be able to:

5. Identify and discuss leadership substitutes and neutralizers.1. Discuss leaders as coaches and examine gender and

cross-cultural issues in leadership.

2. Describe strategic leadership, ethical leadership, and virtual leadership.

3. Relate leadership to decision making and discuss both rational and behavioral perspectives on decision making

L E A R N I N G O B J E C T I V E S (cont.)L E A R N I N G O B J E C T I V E S (cont.)

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What’s in It for Me?

• Why does understanding leadership matter to you?• By mastering the material in this chapter,

you’ll benefit in two ways:1. You’ll better understand how you can more

effectively function as a leader

2. You’ll have more insight into how your manager or boss strives to motivate you through his or her own leadership

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The Nature of Leadership

• What Is Leadership?• Processes and behaviors used by someone, such

as a manager, to motivate, inspire, and influence the behaviors of others.

• Are Leadership and Management the Same?• No. A person can be a manager, a leader, both,

or neither.

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Source: The Free Press, an imprint of Simon & Schuster Adult Publishing Group, from A Force for Change: How Leadership Differs from Management, by John P. Kotter, 1990. Copyright 1990 by John P. Kotter, Inc.

TABLE 9.1 Kotter’s Distinctions Between Management and Leadership

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Early Approaches to Leadership

• Trait Approach• Focused on identifying essential leadership traits

• Intelligence, dominance, self-confidence, energy, activity (versus passivity), and knowledge about the job

• Physical traits (height, body shape, handwriting)

• Yielded inconsistent results• Recent research has focused on a limited set

of traits• Emotional intelligence, mental intelligence, drive, motivation,

honesty and integrity, self-confidence, knowledge of the business, and charisma

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Early Approaches to Leadership (cont.)

• Behavioral Approaches to Leadership• Focused on the behaviors of effective versus

ineffective leaders• Assumed behaviors of effective leaders would be

the same across all situations• Task-focused leader behaviors related to increasing the

performance of employees• Employee-focused leader behaviors related to job

satisfaction, motivation, and well-being of employees

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The Situational Approach to Leadership

• Situational Approach• Assumes that appropriate leader behavior varies

from one situation to another• Continuum of leadership behavior• Considers characteristics of the leader, subordinates,

and the situation

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Source: Harvard Business Review. An exhibit from “How to Choose a Leadership Pattern” by Robert Tannenbaum and Warren Schmidt (May-June 1973). Copyright 1973 by the President and Fellows of Harvard College; all rights reserved.

FIGURE 9.1 The Leadership Continuum

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Leadership Through the Eyes of Followers

• Transformational Leadership• Set of abilities that allows a leader to recognize

the need for change, to create a vision to guide change, and to execute the change

• Transactional Leadership• Basic management involving routine, regimented

activities (leading during a period of stability)

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Leadership Through the Eyes of Followers (cont.)

• Charisma• A form of interpersonal attraction that inspires support

and acceptance

• Charismatic Leadership• Influence based on the leader’s personal charisma

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Special Issues in Leadership

• Leadership Substitutes• Individual, task, and organizational

characteristics that tend to outweigh the need for a leader

• Leadership Neutralizers• Factors that cause leadership behaviors to be

ineffective• Cohesive groups• Elements of the job• Organizational factors

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TABLE 9.2 Leadership Substitutes and Neutralizers

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The Changing Nature of Leadership

• Leader as Coach• From directive overseer to mentor

• Gender• Understanding the differences and dynamics in

the approaches of women and men to leadership

• Cross-Cultural Leadership• Effects of an individual’s native culture on his or

her approach to leadership when functioning in another culture

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Emerging Issues in Leadership

• Strategic Leadership• Leader’s ability to understand the complexities of the

organization and its environment and lead change to enhance organizational competitiveness

• Ethical Leadership• Leader’s ability to maintain high ethical standards for

personal conduct, unfailingly exhibit ethical behavior, and hold others to the same standards

• Virtual Leadership• Leading through effective communication and

maintaining collaborative relationships at a distance

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Leadership, Management, and Decision Making

• Rational decision making• Recognizing and defining the decision situation• Identifying alternatives• Evaluating alternatives• Selecting the best alternative• Implementing the chosen alternative• Following up and evaluating the results

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FIGURE 9.2 Steps in the Rational Decision-Making Process

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Behavioral Aspects of Decision Making• Political Forces in Decision Making• Coalition: An informal alliance of individuals or groups

formed to achieve a common goal

• Intuition• An innate belief about something, often without

conscious consideration

• Escalation of Commitment• Staying with a chosen course of action, even when it

appears to have been wrong

• Risk Propensity• The extent to which a decision maker is willing to gamble

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Key Terms

behavioral approach to leadershipcharismatic leadershipcoalitiondecision makingemployee-focused leader behaviorescalation of commitmentethical leadershipintuitionleadership

leadership neutralizersleadership substitutesrisk propensitysituational approach to leadershipstrategic leadershiptask-focused leader behaviortrait approach to leadershiptransactional leadershiptransformational leadershipvirtual leadership

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