Human Resource Management (MGT501)
Today we will discuss the role of leadership in the organizations. The face of leadership is changing in
business today. In addition to influencing subordinates to achieve desired objectives, today's managers
must make quicker, more accurate decisions in a consensus building and teamwork environment. Leaders
fill many roles simultaneously. Leaders not only influence others to achieve desired goals, they interact with
and motivate subordinates, and deal with conflict and any other issues that may arise.
Leadership is a process where Leader/Person, who influences individuals and groups in an organization,
helps them establish goals, guides them toward achievement of those goals, and allows them to be effective
as a result.
Leaders fill many roles simultaneously. Leaders not only influence others to achieve desired goals, they
interact with and motivate subordinates, and deal with conflict and any other issues that may arise.
How Leaders Provide a Vision: To be effective, leaders must provide a vision that is a general statement
of the organization's intended direction that evokes positive emotional feelings in organization members.
I. The Foundations and Traits of Leadership
The Leader's Traits: Researchers have studied the traits of successful leaders for many years in
an effort to identify a set of core traits that would predict success as a leader. Recent research
indicates that there are certain core traits that significantly contribute to success for a business
leader. These include drive, the desire to lead, honesty/integrity, self-confidence, cognitive ability
and knowledge of the business.
b. The Leader's Behavior
How Leaders Act Like Leaders: Leadership studies that focus on how the leader's style is related to
his/her effectiveness as a leader all focus on what the leader does and how he/she behaves in trying to
influence followers. These studies also focus on the two major functions of leaders--accomplishing the task
and satisfying the needs of group members.
Initiating Structure and Consideration: Initiating structure and consideration have been two of the most
frequently used descriptions of leader behavior. These concepts evolved from the Ohio State University
leadership studies. Initiating structure is leader behavior whereby the person organizes work to be done and
defines relationships or roles, the channels of communication, and ways of getting jobs done. Consideration
is leader behavior indicative of mutual trust, friendship, support, respect, and warmth. In most situations,
considerate leaders will have more satisfied subordinates, but the effects of such considerate leadership on
employee performance are inconsistent. The effects of initiating structure are also inconsistent with respect
to performance and satisfaction.
Participative and Autocratic Styles: Leaders can act in either a participative or autocratic style. Autocratic
leaders solve problems and make decisions by themselves based upon information available at the time.
Participative leaders share the problem with subordinates as a group, and together, they generate and
evaluate alternatives and attempt to reach consensus on a solution.
Transformational Leadership Behavior: Transformational leaders encourage and obtain performance
beyond expectations by formulating visions, inspiring their subordinates to pursue them, cultivating
employee acceptance and commitment to their visions, and providing their employees with the big picture.
Transformational leaders are perceived as charismatic, inspirational, considerate, and stimulating. On the
other hand, leaders who exhibit transactional behaviors are more focused on accomplishing the task at hand
and maintaining good working relations with subordinates by rewarding for performance.
Human Resource Management (MGT501)
Are There Gender Differences in Leadership Styles? Research suggests that there are few differences in
the way men and women lead. The slower career progression for women can be better accounted for by
institutional biases and inaccurate stereotypes of women managers. It has been found that men and women
perform at about the same level. Women managers have been found to be more achievement oriented,
understanding, patient, relationship oriented, socially sensitive, and communicative than men.
c. Situational Theories of Leadership
Fiedler's Contingency Theory of Leadership: Fiedler used a least preferred coworker (LPC) scale to
measure whether a leader who was lenient in evaluating associates he/she least liked working with was
more likely or less likely to have a high-producing group than the leader who was demanding and
discriminating. Three factors combine to determine which leadership style is more appropriate: position
power, task structure, and leader-member relations. Fiedler concluded that if the situation is favorable or
unfavorable to the leader, a more task-oriented, low-LPC leader is appropriate. In the middle range
where the factors are more mixed, a more people-oriented, high-LPC leader is more appropriate. Recent
research findings cast doubt on the validity of these conclusions.
Path-Goal Leadership Theory: Path-goal theory of leadership, developed by House, is based upon
expectancy theory, which states whether a person will be motivated depends on whether the person
believes he/she has the ability to accomplish a task and his/her desire to do so. The theory concludes that
leaders should increase the personal rewards subordinates receive for attaining goals and make the path to
these goals easier to follow. The leadership style required depends upon the situation, so the leader must
be flexible and adopt the style that is required.
Leader-Member Exchange Theory: Leader-member exchange theory (LMX) says that leaders may use
different styles with different members of the same work group. Followers tend to fall in either the in-
group or the out-group in relating to the leader. The quality of leader-member exchanges was positively
related to a leader's perception of the follower's similar attitudes and extroversion. The findings suggest
that leaders should try to make the in-group more inclusive, and followers should try to be in the leader's
in-group by emphasizing similarity in attitudes.
The Situational Leadership Model: The situational leadership model of leadership suggests that a leader
should adapt his/her leadership style (delegating, participating, selling, or telling) to the task.
The Vroom-Jago-Yetton Model: Vroom, Jago, and Yetton have developed a leadership
model that enables a leader to analyze a situation and decide whether it is right for
participation. The technique includes a set of management decision styles, a set of
diagnostic questions, and a decision tree for identifying how much participation is called
for in a situation.
II. Power and Leadership
Leaders without power are really not leaders because they have no chance of influencing anyone to do
anything. Leaders in organizations normally derive much of their power from their formal position and the
ability to allocate rewards. In some cases, leaders may have expert or referent power depending upon their
III. Becoming a Leader
Start to think Like a Leader: Thinking like a leader requires applying the three-step model: identify what
is happening; account for it; and decide on the necessary leadership actions. And remember that leading
requires knowledge of matters other than leadership theories (e.g., culture, motivation, groups, conflict, and
change) to influence followers to move toward goals.
Develop Your Judgment: Leaders can improve their judgment or decision-making ability by increasing
their knowledge, debasing their judgment, being creative, using intuition, not overstressing the finality of
Human Resource Management (MGT501)
decisions, and making sure the timing of a decision is right.
Develop Your Other Leadership Traits: Leaders can use good judgment, exhibit self-confidence, and
improve their knowledge of the business to improve their effectiveness.
Start to Build Your Power Base: Leaders can strengthen the foundation of their leadership by making
sure followers share their vision, adapting their leadership style and actions to the situation, substituting
other management skills to help them lead by choosing the right followers, and organizing the task properly
to reduce the need for leadership.
Help Others Share Your Vision: Ensuring that your subordinates know and understand your vision,
mission, and objectives can help the leader influence the subordinates to work enthusiastically toward
achieving an objective.
Adapt Your Style and Actions to the Situation: No one leadership style is appropriate for every
Use Your Other Management Skills to Lead: Leaderships should choose the right followers and
organize the task properly.
B. Building Trust: The Essence of Leadership
I. Understanding Trust
Trust is a positive expectation that another will not act opportunistically. The two most important elements
of our definition are that it implies familiarity and risk. Trust is a history-dependent process based on
relevant but limited samples of experience. It takes time to form, building incrementally and accumulating, it
involves making oneself vulnerable. By its very nature, trust provides the opportunity for disappointment.
But trust is not taking risk per se; rather it is a willingness to take risk. Recent evidence has identified five:
integrity, competence, consistency, loyalty, and openness. Integrity refers to honesty, conscientiousness, and
truthfulness. This one seems to be most critical when someone assesses another's trustworthiness.
Competence encompasses an individual's technical and interpersonal knowledge and skills. Consistency
relates to an individual's reliability, predictability, and good judgment in handling situations. Loyalty is the
willingness to protect and save face for another person. The final dimension of trust is openness.
II. Trust as One Foundation of Leadership
1. Trust appears to be a primary attribute associated with leadership.
2. Part of the leader's task has been working
with people to find and solve problems,
Trust: The Foundation
but whether leaders gain access to the
knowledge and creative thinking they
need to solve problems depends on how
much people trust them.
3. When followers trust a leader, they are
willing to be vulnerable to the leader's
4. Honesty consistently ranks at the top of
most people's list of characteristics they
admire in their leaders.
5. Now, more than ever, managerial and
leadership effectiveness depends on the
ability to gain the trust of followers.
6. In times of change and instability, people
turn to personal relationships for
guidance; and the quality of these relationships are largely determined by level of trust.
7. Moreover, contemporary management practices such as empowerment and the use of work
Human Resource Management (MGT501)
teams require trust to be effective.
III. Types of Trust
Deterrence-based Trust: The most fragile relationships are contained in deterrence-based trust,
based on fear of reprisal if the trust is violated. It works only to the degree that punishment is
possible, consequences are clear, and the punishment is actually imposed if the trust is violated. To
be sustained, the potential loss of future interaction with the other party must outweigh the profit
potential that comes from violating expectations. Most new relationships begin on a base of
deterrence. In a new manager-employee relationship the bond that creates this trust lies in the
authority held by the boss and the punishment he/she can impose.
Knowledge-based Trust: Most organizational relationships are rooted in knowledge-based trust.
Trust is based on the behavioral predictability that comes from a history of interaction. Knowledge
of the other party and predictability of his or her behavior replaces the contracts, penalties, and
legal arrangements more typical of deterrence-based trust. This knowledge develops over time,
largely as a function of experience. The more communication and regular interaction you have with
someone else, the more this form of trust can be developed and depended upon. Interestingly, at
the knowledge-based level, trust is not necessarily broken by inconsistent behavior. If you can
adequately explain or understand another's apparent violation, you can accept it, forgive the person,
and move on in the relationship. Most manager-employee relationships are knowledge-based.
Identification-based Trust: The highest level of trust is achieved when there is an emotional
connection between the parties. It allows one party to act as an agent for the other and substitute
for that person. This mutual understanding is developed to the point that each can effectively act
for the other. Controls are minimal at this level. The best example of identification-based trust is a
long-term, happily married couple. You see identification-based trust occasionally in organizations
among people who have worked together for long periods of time and have a depth of experience
that allows them to know each other inside and out. This is also the type of trust that managers
ideally seek in teams.
Leadership is a process where Leader/Person who influences individuals and groups in an
Trust is a positive expectation that another will not act opportunistically.
Vision that is a general statement of the organization's intended direction that evokes
positive emotional feelings in organization members.
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