Management Notes by PunditView IAS

What is leadership?
 "Leadership is the ability to influence a group toward the achievement of a vision or a set of
goals"
 Leadership is the professional handling of soft factors in management
 Leaders mobilize people for changes towards the best of their organization and its stakeholders

Leaders and Managers

Leader Manager
Create Implement
Originate Copy
Develop Maintain
Inspire trust Control
Think long term Think short term
Ask what and why Ask how and when
Watch the horizon Watch the bottom line
Challenge the status quo Accept the status quo
Do the right things Do things right

Leadership theories

Trait theories: Great Man theory (Stogdil)

 The Great Man theory is a 19th-century idea according to which history can be largely explained
by the impact of "great men", or heroes; highly influential individuals who, due to either their
personal charisma, intelligence, wisdom, or political skill utilized their power in a way that had a
decisive historical impact. Eg: Gandhi, Nelson Mandela, Kennedy, Mother Teresa
 It assumes that there are some attributes innate to an individual, which determine his
leadership abilities and success.
 Key characteristics of a charismatic leader: vision & articulation, willing to take personal risk,
sensitivity to follower needs, unconventional & novel behavior
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 However empirical findings suggest that:

o There are weak correlations between attributes and leadership success
o There are contradictory findings with regard to relevance of examined attributes

Behavioral theories

 Tannenbaum and Schmidt

 Ohio state studies

o Leadership behavior described by two dimensions: initiating structure and
consideration.
o Initiating structure is the extent to which a leader is likely to define and structure his or
her role and those of employees in the search for goal attainment.
 It includes behavior that attempts to organize work, work relationships, and
goals.
 A leader high in initiating structure is someone who “assigns group members to
particular tasks,” “expects workers to maintain definite standards of
performance,” and “emphasizes the meeting of deadlines.”
o Consideration is the extent to which a person’s job relationships are characterized by
mutual trust, respect for employees’ ideas, and regard for their feelings.
 A leader high in consideration helps employees with personal problems, is
friendly and approachable, treats all employees as equals, and expresses
appreciation and support.
 Michigan studies
o Leadership behavior described by two dimensions: employee orientation (relationship
orientation – equivalent to ‘consideration’ dimension of Ohio state studies) and
production orientation (task orientation - equivalent to ‘initiating structure’ dimension
of Ohio state studies)
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Situational Leadership

 Hersey & Blanchard

o Successful leadership depends on selecting the right leadership style contingent on the
followers’ readiness, or the extent to which they are willing and able to accomplish a
specific task.
o If followers are
 unable and unwilling to do a task, the leader needs to give clear and specific
directions.
 unable and willing, the leader needs to display high task orientation to
compensate for followers’ lack of ability and high relationship orientation to get
them to “buy into” the leader’s desires.
 able and unwilling, the leader needs to use a supportive and participative style.
 able and willing, the leader doesn’t need to do much.
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 Fiedler Contingency Model

o Effective group performance depends on the proper match between the leader’s style
and the degree to which the situation gives the leader control.
o How to identify leadership style?
 Least preferred coworker questionnaire to be used
 If you describe the person you are least able to work with in favorable terms (a
high LPC score), Fiedler would label you relationship oriented. If you see your
least-preferred co-worker in unfavorable terms (a low LPC score), you are
primarily interested in productivity and are task oriented.
 Fiedler assumes an individual’s leadership style is fixed.
o How to define situation?
 It can be defined through three dimensions: leader-member relations, task
structure, position power
 Leader–member relation is the degree of confidence, trust, and respect
members have in their leader.
 Task structure is the degree to which the job assignments are
procedurized (that is, structured or unstructured).
 Position power is the degree of influence a leader has over power
variables such as hiring, firing, discipline, promotions, and salary
increases.
o Matching leadership style to situation
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 Path-Goal Theory
o It’s the leader’s job to provide followers with the information, support, or other
resources necessary to achieve their goals.
o According to path–goal theory, whether a leader should be directive or supportive or
should demonstrate some other behavior depends on complex analysis of the situation.
 Directive leadership yields greater satisfaction when tasks are ambiguous or
stressful than when they are highly structured and well laid out.
 Supportive leadership results in high performance and satisfaction when
employees are performing structured tasks.
 Directive leadership is likely to be perceived as redundant among employees
with high ability or considerable experience.
 Leader Participation Model
o The way the leader makes decisions is as important as what she or he decides.
o Victor Vroom and Phillip Yetton’s leader-participation model relates leadership behavior
and participation in decision making.
o Like path–goal theory, it says leader behavior must adjust to reflect the task structure.
o The model is normative—it provides a decision tree of seven contingencies and five
leadership styles for determining the form and amount of participation in decision
making.

Transformational, transactional and problem oriented leadership

 Transactional leadership
o Basic Assumption: Rational motivation and exchange
o Two main behavioral patterns:
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 Contingent reward (goal clarification coupled with performance related

remuneration)
 Management by exception, i.e. delegation – intervention only if problems arise
o Define or agree upon clear goals
o Ensure that work environment promotes employees’ goal achievement
o Systematic performance appraisal
o Open, constructive feedback
o Reward goal achievement
o Management by objectives (an example of transactional leadership)
 A program that encompasses specific goals, participatively set, for an explicit
time period, with feedback on goal progress.

o Advantages
 Leaders save time due to relief from operative decisions
 Development of followers' achievement motivation, initiative taking and
readiness to take on responsibility
 Employees identify with the business objectives by means of:
 MbO is "orientation guide" for behavior, appraisal and remuneration
 Clear guidelines for self-monitoring and evaluation by others
 Analysis of critical points and possibilities for improvement
 Establishing transparent and comparable performance standards
 Transformational leadership
o Transformational leaders inspire followers to transcend their own self-interests for the
good of the organization and are capable of having a profound and extraordinary effect
on their followers.
o Leadership is not getting people to do things they don‘t want to do, but getting them to
do things they never thought they were able to do."
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o Central idea:
 leaders change the needs and preferences of their subordinates
 takes into account emotional aspects of leadership behavior

o Few examples:
 Idealized influence: Ratan Tata, Mahatma Gandhi
 Intellectual stimulation: 3M, Tesla (Elon Musk)
 Individual consideration: P&G, Tata Steel
 Inspirational motivation: Steve Jobs, Narendra Modi
 Problem-oriented leadership
o Acts as supplement of transformational leadership
o Emphasizes potential threats and risks
o Is necessary in times of crisis and beneficial in good times
o Motivation through addressing of the prevention oriented regulation focus
o Courage to address critical points, provide critical feedback
o Focus on joint problem solution
o Lazarus’ stress theory
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 Eustress: Positive, desired form of stress which has a positive impact

 Distress: Negative, undesirable form of stress which has a negative impact
o Dimensions of problem-oriented leadership

Leader-Member Exchange Theory

 Leader–member exchange (LMX) theory argues that, because of time pressures, leaders
establish a special relationship with a small group of their followers. These individuals make up
the ingroup— they are trusted, get a disproportionate amount of the leader’s attention, and are
more likely to receive special privileges. Other followers fall into the outgroup.