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Organisation Development

Term paper:

Important Theories of Leadership and

Management in organisations

Name: Angela Gebhardt

Franca Heinrici

Alessio Pavan

Lecturer: Magid Al-Araki

Date: 27 April 2003

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Contents

page

1. Introduction 3

2. A definition of LEADERSHIP and MANAGEMENT 3

3. Blake / Mouton’s Managerial Grid 4

4. Fiedler’s Contingency Model 7

5. Hersey-Blanchard Situational Theory 9

6. Conclusion 11

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1. IntroductionVery often we can hear today how important good leadership is to run a business

successfully. But why? Why do we need good leaders? Why is a good leader essential for

running a business? What is leadership anyway? And most important of all, how can one

evaluate the performance of a leader?

These and many other questions arise when we think about leadership. Many famous people

have also made up their mind about these issues and have developed different theories about

leadership. This term paper will deal with three very important theories and point out

differences in these models and problems of applying them in reality.

The first theory will be the “Managerial Grid” of Blake/Mouton. Then we will go on with

Fiedler’s Contingency Model and end with Hersey-Blanchard’s Situational Theory.

First of all though, it is necessary to know what leadership is and what it means for a

company.

2. A definition of LEADERSHIP and MANAGEMENTVery often management and leadership are referred to as the same thing. But actually

these two are different in some ways. The most obvious differences are shown below.

• Management is the process of getting things done through the efforts of other people.

(Focuses on procedures and results)

• Management suggests more formality & manager refers to a position in an organisation.

• Leadership is influencing of others to do what he/she wants them to do.(Influencing others

i.e. human interaction)

• A leader may have no formal title at all and rely on personal traits and style to influence

followers.

But can anybody become a leader? The common sense tells us: “NO!” This is of course true,

because one who wants to become a leader has to have certain significant trait, which are:

• ”Supervisory ability: planning, organising, influencing and controlling the work of others.

• Need for occupational achievement: The seeking of responsibility and the desire for

success.

• Intelligence: Creative and verbal ability including judgement, reasoning and thinking

capacity

• Decisiveness: Ability to make decisions and solve problems competently.

• Self- assurance: Extent to which the individual views himself or herself as capable of

coping with problems.

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• Initiative: Ability to find new and innovative ways of doing things” [Judith R. Gordon,

1990]

Leadership is “influencing others to do activities to fulfil a shared goal”

[www.mech.uq.edu.au, 25.October 2002]. It is also the direction and management of change

as well as the creation of visions for the organisation. Another task is to motivate and lead

people for success and to create conditions, which are necessary to achieve goals.

Basically we can distinguish between four different styles of leadership.

Autocratic Participative Democratic Laissez-Faire

The leader tells the

worker what to do

The leader allows and

expects workers

participation

Leader seeks

majority rule from

workers

Leader lets group

members make all

decisions

[Judith R. Gordon, 1990]

Now that the basic leadership styles have been presented and the difference between

leadership and management are explained the focus should be on the different theories

mentioned in the introduction. First, Blake/Mouton’s “Managerial Grid” will be dealt with.

3. Blake/Mouton’s Managerial GridUnlike the two theories, which will be described later on, the Managerial Grid is a

behavioural theory. In 1964, two academics in the field of management published a book:

“The Managerial Grid: key orientations for achieving production through the people”.

Blake and Mouton elaborate a model, which tries to understand the different attitudes of

managers toward the human resources and the other resources involved in the organisation.

This is very important because a manager has to have the best skills and to be able to keep all

the resources co-ordinated toward achieving the project’s goal.

The model conceptualises management styles and relations. It uses two axis: “ Concern for

People” and “ Concern for Task”, which are two important dimensions used to examine

management behaviour and characteristics.

When taken the two axes and all evolving possibilities together a matrix with 81 different

management styles appears. According to Blake and Mouton five of the 81 styles are the most

significant and important.

(See also grid on page 5)

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[http://www.nwlink.com/~donclark/hrd/history/grid.html, online 25. October 2002]

Blake and Mouton describe the five shown management styles as the following:

Country club management: (grid position 1,9)

Here we find all the managers with a high concern for people and a low concern for

production.

This kind of manager has a thoughtful attention to needs of people for satisfying relationships,

which leads to a comfortable friendly organisation and work environment.

They always have lots of social interaction and put service projects as well as company sports

teams high on their list.

Authority- obedience management: (grid position 9,1)

All the managers who operate at the other extreme are included in this position.

They focus on the efficiency in operations with little concerns for individuals.

They get a work done in such a way that human elements interfere to a minimum degree.

Impoverished management: (grid position 1,1)

Managers in this grid position exert a minimum effort to get required work done and to

sustain organisation membership.

They have little concern for either the human element or the production level of the team.

This kind of manager has a short life in responsible organisations.

Organisation management: (grid position 5,5)

These kinds of managers constantly try to balance the necessity to get out work with

maintaining moral of people at a satisfactory level, but not excellent.

Organisation production will be close to expectations but without exceeding them.

Team management: (grid position 9,9)

This is the ideal manager identified by Blake and Mouton.

This manager develops a relationship of trust and respect with employees and others. There is

also certain interdependence through a common stake, which leads to an enhancement of the

productivity.

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Blake and Mouton concluded that the first four styles are not the most effective, while

team management approach is the best style because it improves performances, lowers

employee turnover and absenteeism and grants employee satisfaction.

However, the team management style would not work in a crisis, because sometimes there is

no time to be sensitive to morale issues.

Moreover the Managerial Grid encourages managers to devote more time on managing

human resources, because they usually spend more time managing easier resources. In fact,

human resources are quite complex to measure and to allocate; that’s why managers should

devote time to these more challenging resources.

Like in any other theory one can find both strengths and weaknesses in the Managerial Grid.

Strengths:

• Marked a big shift in the focus of management work

• Several studies give credibility to this model

• Encourages managers to think about their own balance between two main areas of

managerial concerns: task orientation and people orientation

• By following this approach, project managers can focus more on the human side of the

management equation, trying to identify ways to adapt the behaviour according to

different resources and circumstances.

Weaknesses:

• The Managerial Grid aims at identifying the most effective management style for all the

situations, which are not supported by evidence in real organisations.

• No adequate relationship between behaviour and performance outcomes (satisfaction,

morale, and productivity) has been documented.

• This approach implies that the most effective management style is team management style

but this actually may not be the case in all the situations.

• It does not encourage managers to think and act flexibly according to the circumstances in

which they are managing

The theory of the Managerial Grid has been used for 35 years in training managers about

working with people.

It is also important because it can help project managers look at managing projects and

resources more effectively.

But it is also fundamental to consider other factors to profile a manager, such as, how does his

employees and his master rate you as a leader, does he get his job done, does he take care of

his employees, is he growing his organisation, etc.

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4. Fiedler’s Contingency ModelUnlike behavioral theories, situational theories tell us that effective leadership depends

on the situation at hand. They require the leader to interact with the employees. They

encourage them to listen, to involve, to coach, to develop, to enrich, to motivate, to risk, to

credit, to care, and to express concern for those who they manage. Situational theories include

the Contingency Model, the Path-Goal theory, and the Situational Leadership theory.

While many scholars assumed that there was one best style of leadership, Fiedler’s

contingency model postulates that the leader’s effectiveness is based on ‘situational

contingency’, or a match between the leader’s style and situational favourableness, later

called situational control.“ [Ann E. Brown, 2001]

“A leader can only be effective if the individual personality style is appropriately matched to a

given set of situational variables.” [Managing Business & Engineering Projects - J.M.

Nicholas, 1990] These 3 variables are:

• The work group accepts or rejects the leader.

• The task is relatively routine or complex.

• High or low formal authority.” [J.M. Nicholas, 1990]

Fiedler’s contingency model includes 3 different elements and 2 different styles. The

elements, on which the situation is measured on, are:

• a good or poor leader-member relation

• a high or low task structure and

• a strong or week position power

The two different styles are based on the leader either task oriented or relation oriented.

Then Fiedler developed a questionnaire to measure an individual in one is of the above

categories. This questionnaire is the main component of his theory. He uses the least preferred

co-worker (LPC) scale, an instrument for measuring an individual’s leadership orientation

using eighteen to twenty-five pairs of adjectives and an eight-point bipolar scale between each

pair. “High-LPC or relationship-motivated leaders describe their least preferred co-worker in

more positive terms and are concerned with maintaining good interpersonal relations. Low-

LPC or task-motivated leaders describe their least preferred co-worker in rejecting and

negative terms, and give higher priority to the task than to interpersonal relations.” [ Ann E.

Brown, 2001]

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Fiedler assumes that leadership style is fixed, that it is, either relation oriented or task

oriented. The leadership style is then matched with the situation defined by the three

situational factors previously described. If the leadership style does not match the situation,

the situation has to be adapted to it or the person has to be replaced.

[http://www.mech.uq.edu.au/subjects/e4390/Em1mod08/sld041.htm, online 25 October 2002]

Above Fiedler’s Model is shown and one can see what leadership style belongs to which

combination of the three elements. For example is a situation in which the leader has a great

deal of control and influence is a high control situation. A moderate control situation is one in

which the leader has a medium degree of control, and a low control situation is one in which

the leader's control and influence are relatively low.

The model shows that task oriented leaders have the strongest positive effect in the situations

1,2,3 and 8. Whereas relation oriented leaders do well in situations 4,5,6 and 7. The leaders

effectiveness depends on the situation and therefore a leader can do something about their

situations.

According to Fiedler there is no ideal leader. Both task and relation oriented leaders can be

effective if their orientation fits the situation. Fiedler also assumes that since the personality

and therefore the orientation are relatively stable, improving the effectiveness requires a

change in the situation.

One major point of criticism is the fact that this theory implies that the only alternative for an

unalterable mismatch between leader orientation and an unfavourable situation is changing

the leader.” [Ann E. Brown, 2001]

Others criticise the method of measuring leadership through the LPC model.

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But in general this theory is a good way in evaluating the performance of a leader. Of course

it should not be the only way to measure the effectiveness of a leader in a company. But surly

one could use it as a complementary method to find out, how the leader is performing and if

there is need for a change.

5. Hersey-Blanchard Situational TheoryHersey and Blanchard developed also a theory that bases the leadership style on the

given situation. The Situational Leadership theory, created by Hersey and Blanchard, includes

four situational leadership styles: telling, selling, participating, and delegating. According

to Paul Hersey, a situational leader adapts "leadership behaviors to features of the situation

and followers."

Manager’s leadership style must be adaptable and flexible to meet the changing needs of

employees and situation. It should be matched to the maturity of the subordinates.

Maturity is assessed in relation to a specific task and has two parts:

• Psychological maturity - Their self-confidence and ability and readiness to accept

responsibility and be able to manage the given tasks.

• Job maturity - Their relevant skills, technical knowledge and ability to carry

responsibility; the ability to put up high goals, and still manage them.

[Strunz H., Dorsch M., page 145]

As the subordinate maturity increases, leadership should be more relationship-motivated than

task-motivated.

The Hersey and Blanchard Leadership Model means that the developmental levels of a

leader's subordinates play the greatest role in determining which leadership styles are most

appropriate (leader behaviors). According to this conceptualization, leader behaviors fall

along (1) directive behavior and (2) supportive behavior.

DIRECTIVE BEHAVIOR SUPPORTIVE BEHAVIOR

• one-way communication

• followers' roles spelled out

• close supervision of performance

• two-way communication

• listening, providing support &

encouragement

• facilitate interaction

• involve follower in decision making

[http://psychology.about.com/gi/dynamic/offsite.htm?site=http%3A%2F%2Fwww.geocities.com%2FAthens%2FForum%2F1650%2Fhtmlblanchard.html, 14.10.2002]

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Putting the leadership behaviors identified by Blanchard together on a grid, four

leadership styles result:

1. The "telling style" is appropriate when the members are new or inexperienced, and need a

lot of help, direction, and encouragement to get the job done. – high task, low relationship

2. The "selling style" is useful when group members are a little more responsible,

experienced, and willing to do the task but do not have the necessary skills. – high task, high

relationship

3. The "participating style" is a supportive style used when groups have the ability to do the

job but may be unwilling to start or complete the task. – high relationship, low task

4. The "delegating style" is useful when group members are willing and able to take

responsibility for directing their own behavior. – low relationship, low task

[http://www.mech.uq.edu.au/subjects/e4390/Em1mod08/sld046.htm, online 09.10.2002]

The Blanchard model combines the behavior grid (similar to the Blake- Mouton

Managerial Grid) with the Developmental Levels of subordinates to arrive at some

conclusions about appropriate leadership styles.

[Strunz H., Dorsch M., 2001, page 146]

There is one problem: To believe that the leader can ascertain the maturity of the

employee and as a result of that chooses a specific leadership style. [Strunz H., Dorsch M.,

2001, page 146] To determine the appropriate leadership style the leader must first determine

the maturity level of his employees in relation to the specific task that the leader is attempting

selling participating

delegatingtelling

Task behavior

Relationshipof behavior

HIGH

HIGHLOW

Maturity of followersmature immature

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to accomplish. As the level of the employees' maturity increases, the leader should begin to

reduce his or her task behaviour and increase relationship behaviour. As the followers begin

to move into an above average level of maturity, the leader should decrease not only task

behaviour but also relationship behaviour. Once the maturity level is identified, the

appropriate leadership style can be determined.

[http://ollie.dcccd.edu/mgmt1374/book_contents/4directing/leading/lead.htm,online

14.10.2002]

6. ConclusionAfter having a look at the three different styles, one can see that none of them is

perfect in every situation. Each of them has advantages and disadvantages concerning

different situations. There are still many other leadership and management theories, but for us

the three mentioned seemed to be the most important and used ones. One other management

style for example is “Management by Objectives”. It is becoming more and more popular. Its

focus lies on the goals of a company and therefore changes from situation to situation.

One can conclude that each leader has to find its own style according to his own personality

and the kind of company he/she is working for. That is why it is impossible to judge one

theory as the best and ultimate one. But each company has to find the best suiting leadership

or management style for itself and if necessary adapt to a changing situation.

The important part about being a leader or a manager is not to stick to one of the styles, but

find your own style and lead as best as you can!

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Bibliography• Ann E. Brown Biographical Dictionary of Management Thoemmes Press, 2001

• J.M. Nicholas, Managing business & engineering projects, concepts & implementation,

Prentice Hall International Editions, 1990

• Judith R Gordon, Management & Organisational behaviour, Allyn & Bacon, 1990

• Strunz H., Dorsch M., Management, Oldenbourg Verlag München Wien, 2001

• http://www.lib.uwo.ca/business/blake.html (15. October 2002)

• http://www.mech.uq.edu.au/subjects/e4390/Em1mod08/sld041.htm (25. October 2002)

• http://www.mech.uq.edu.au/subjects/e4390/Em1mod08/sld046.htm (9. October 2002)

• http://www.nwleadership.com/docs/grid_revisited.htm (25.October 2002)

• http://www.nwlink.com/~donclark/hrd/history/grid.html (9.October 2002)

• http://psychology.about.com/gi/dynamic/offsite.htm?site=http%3A%2F%2Fwww.geocitie

s.com%2FAthens%2FForum%2F1650%2Fhtmlblanchard.html (14.October 2002)

• http://psychology.about.com/msub_ioleader5.htm (16. October 2002)

• http://ollie.dcccd.edu/mgmt1374/book_contents/4directing/leading/lead.htm (14. October

2002)

• http://workstar.net/library/grid.htm (16.October 2002)

• http://www.nwlink.com/~donclark/hrd/history/grid.html (15.October 2002)