LEADING

FUNCTIONS OF MANAGEMENT
LEADING

• Involves directing or leading the activities of the people.

• The manager directs the activities of his subordinates by explaining what they
have to do and by helping them perform it to the best of their ability.
• LEADERSHIP – the relationship in which one person (the leader) influences
others to work together willingly on related tasks to attain goals
desired by the leader and/or group; the process of influencing others
to behave in preferred ways to accomplish organizational objectives.
LEADING

• Power – the ability to command or apply force; ability or capacity

to influence others to do something they would not
otherwise do.
• Authority – the right to issue directives and expend resources; the
right to perform or command; it exists in the formal
organization because it stems from the position created by
the organization.
TYPES OF POWER
1. Coercive Power – based on fear and the subordinate’s perception that the leader has the
ability to punish or bring about undesirable outcomes for those who do not comply
with directives; the disciplinary policies of organizations generally are based on this
type of power.
2. Reward Power – based on the subordinate’s perception that the leader has the ability and
resources to obtain rewards for those who comply with directives.
3. Legitimate Power – based on the subordinate’s perception that the leader has a right to
exercise influence because of the leader’s role or position in the organization;
based on authority.
4. Expert Power – based on the subordinate’s perception of the leader as someone who is
competent and who has some special knowledge or expertise in a given area.
5. Referent Power – based on the subordinate’s identification with the leader.
CLASSES OF LEADERS

1. Formal Leader – holds a position in organization either by

appointment or election. Power comes from the organization.
2. Informal Leader – emerges in an informal group and the one seen
by the group as most capable of satisfying its needs. Power comes
from the group.
THEORIES OF LEADERSHIP

1. Trait Theories – holds that certain physical, psychological, and intellectual

characteristics or traits differentiate leaders from their groups.
2. Behavioral Theories – researchers from this school of thought suggest that
there is “one best style” for all organizational settings.
3. Situational Theories – successful leadership depends on the relationship
between the organizational situation and the leader’s style; holds
that the most effective style of leadership depends on the particular
situation.
TRAIT THEORIES
• Early studies of leadership focused on the “Great Man Theory” that leaders were born, not
made; focused on the personal traits of leaders and attempted to identify a set of individual
characteristics or traits that distinguished (1) leaders form followers and (2) successful
leaders from unsuccessful leaders.
A. STOGDILL’S TRAIT FACTORS (Ralph Stogdill) – concluded that there are no consistent patterns
of traits that characterize leaders in all situations and reached some general
conclusions in the following areas:
1. Intelligence and Scholarship
2. Physical Traits
3. Personality
4. Social Status and Experience
5. Task Orientation
TRAIT THEORIES
B. GHISELLI’S PERSONAL TRAITS (Edwin Ghiselli) – his finding suggests that the following personality traits
range from being very important to unimportant in relationship to leadership success:
a) Very Important b) Moderately Important c) Almost No Importance
1. Decisiveness 1. Affinity for working class 1. Masculinity vs. femininity
2. Intellectual Capacity 2. Drive and initiative
3. Job Achievement Orientation
3. Need for a lot of money
4. Self-Actualization Feelings
4. Need for job security
5. Self Confidence
5. Personal Maturity
6. Management Ability – team builder
BEHAVIORAL THEORIES

• Behavioral theorists contend that a leader’s style is oriented toward either an

employee-centered or a job-centered emphasis.
• Employee-Centered Orientation – the leader emphasizes developing friendly,
open relationships with employees and is very sensitive to their
personal and social needs.
• Job-Centered Orientation – is one in which the leader emphasizes getting the
job done by planning, organizing, delegating, making decisions,
evaluating performance, and exercising close management control.
BEHAVIORAL THEORIES
A. LEADER CONTINUUM (Kurt Lewin, Ronald Lippitt and R. K. White) – suggested
a continuum theory of leadership that identified three basic styles of
leadership:
BROAD CLASSIFICATION OF LEADERSHIP STYLE
1. Authoritarian (Autocratic) Style – the focus of power is with the manager, and
all interactions within the group moves towards the manager.
a. Strict Autocrat – a leader who realizes on negative influences and give orders which the
subordinates must accept.
b. Benevolent Autocrat – positive leader who uses his power to disperse rewards to his
group.
c. Manipulative Autocrat – one who makes the subordinates feel that they are
participating in decision-making process even though he has already taken the
decision.
BEHAVIORAL THEORIES

2. Democratic Style – the focus of power is more with the group as a whole and
there is greater interaction within the group.
3. Laissez-Faire (genuine) Style – the manager observes that members of the
group are working well on their own.
BEHAVIORAL THEORIES

Benevolent Autocrat

[Link]
BEHAVIORAL THEORIES

B. OHIO STATE LEADERSHIP STUDIES (Bureau of Business Research at Ohio State

University) – the focus was on the effects of leadership styles on group
performance; indicated two major dimensions of leadership behavior:
 Initiating Structure – refers to the leader’s behavior in delineating the
relationship between himself and members of the work group and of
communication, and methods or procedures.
 Consideration – refers to the leader’s behavior indicative of friendship, mutual
trust, respect, and warmth in the relationship between the leader and
the members of his staff.
BEHAVIORAL THEORIES
BEHAVIORAL THEORIES
C. MICHIGAN STUDIES (Institute for Social Research at the University
of Michigan) – conducted empirical studies to identify styles of
leader behavior that results in higher performance and
satisfaction of a group. The studies identified two distinct
styles of leadership:
1. Employee (People) Orientation – a style of management that emphasizes
motivation, social cohesion, and a concern for employees.
2. Production (Task) Orientation – a management style that emphasize
control, rather than encouragement, of employees’ work,
focusing on work results, task responsibilities, and work
standards.
BEHAVIORAL THEORIES

• According to the Michigan Studies, effective supervisors (measured along

dimensions of group morale, productivity and cost reduction) appeared to
display four (4) common characteristics:
a. Delegation of authority;
Consideration (as compared to
b. An interest and concern in their subordinates as individuals; Ohio State Leadership Studies)
c. Participative problem-solving; and
Structure (as compared to Ohio
d. High standards of performance.
State Leadership Studies)
BEHAVIORAL THEORIES
D. THE MANAGERIAL GRID (Robert R. Blake and Jane S. Mouton) – an
organizational development model based the matrix of values for the
two dimensions of leadership (concern for production and concern for
people). Blake and Mouton plotted Five (5) Major Leadership Styles:
1. The Impoverished Style (1,1) – a manager with this orientation has little concern for either
production or people. He is an expert in passing on blame to others for failures in such a
way that he absolves himself from responsibilities. Minimum involvement in organization’s
purpose and with its people is all that he wants. It is considered as the worst leadership
style.
2. The Country Club Style (1,9) – under this style of management, work is done leisurely. There is the
lowest concern for production and highest for people (people-oriented style). Social
relationships are more important and the aim is to achieve friendliness and harmony among
the members of the organization.
BEHAVIORAL THEORIES
3. The Authority-Compliance (Autocrat) Style (9,1) – people are regarded as an instrument of
production under this management style (production-oriented style). Human
relationships and interactions are minimized and subordinates are expected to carry
out orders with an unquestioning obedience.
4. The Middle-of-the-Road Style (5,5) – there is comfortable concern for both production and
people. This management style seeks to maintain the balance between the two. A basic
assumption of this style is that people will work willingly if they are told the reasons for
doing so and if they are explained to them.
5. The Team Style (9,9) – highest concern for both production and people (peak of leadership
styles). This orientation aims at integrating the people and production dimensions of
work under conditions of high concern for growth. The key is the involvement of those
responsible for it in planning (management) and execution of work (people).
BEHAVIORAL THEORIES
 BEHAVIORAL THEORIES

[Link]
BEHAVIORAL THEORIES
E. SYSTEM 4 MANAGEMENT (Rensis Likert) – within the basic style of categories
of task orientation and employee orientation, Likert developed a
four-fold model of leadership effectiveness. These systems are
assigned numbers from 1 to 4 to indicate the stages of evolution in
the patterns of management in terms of leadership styles:
System 1 - Exploitive authoritative
System 2 - Benevolent authoritative
System 3 - Consultative
System 4 - Participative
BEHAVIORAL THEORIES

■ System 1 – Exploitive authoritative. Decisions are imposed on subordinates, motivation is based on

threats, there is very little teamwork or communication; responsibility is centered at the top of
the organizational hierarchy.
■ System 2 – Benevolent authoritative. There is a condescending form of leadership, motivation is based
on a system of rewards, there is only limited teamwork or communication; there is responsibility
at managerial levels but not at lower levels of the organizational hierarchy.
■ System 3 – Consultative. Leadership involves some trust in subordinates, motivation is based on rewards
but also some involvement, there is a fair degree of teamwork, and communication takes place
vertically and horizontally; responsibility is spread more widely throughout the hierarchy.
■ System 4 – Participative group. Leadership involves trust and confidence in subordinates, motivation is
based on rewards for achievement of agreed goals, there is participation and a high degree of
teamwork and communication; responsibility for achieving the goals of the organization is
widespread throughout all levels of the hierarchy.
BEHAVIORAL THEORIES

• Likert sets out three fundamental concepts of System 4 management. These

are the use of:
 the principle of supportive relationships among members of the
organization and in particular between superior and subordinate;
 group decision-making and group methods of organization and
supervision; and
 high performance aspirations for all members of the organization.
SITUATIONAL THEORIES
• The goal of the situational leader theorists is to predict the most
effective leadership style under varying circumstances.
A. THE LIFE CYCLE THEORY (Paul Hersey and Kenneth Blanchard) – an
approach to leadership in which managers adopt behavior
to coincide with the maturity or readiness of subordinates;
managers adopt one of four approaches to leadership
depending on both relationship and task dimensions
(similar to those in the Ohio State and University of
Michigan studies).
SITUATIONAL THEORIES
Readiness (R) is divided into a continuum of four levels: R1
(low), R2 and R3 (moderate), and R4 (high).
■ R1 – low follower readiness – refers to followers who are
both unable and unwilling, and who lack commitment and
motivation; or who are unable and insecure.
■ R2 – low to moderate follower readiness – refers to
followers who are unable but willing, and who lack ability but
are motivated to make an effort; or who are unable but
confident.
■ R3 – moderate to high follower readiness – refers to
followers who are able but unwilling, and who have the ability
to perform but are unwilling to apply their ability; or who are
able but insecure.
■ R4 – high follower readiness – refers to followers who are
both able and willing, and who have the ability and
commitment to perform; or who are able and confident.
SITUATIONAL THEORIES
From the combination of task behavior and relationship
behavior derive four leadership styles (S): telling (S1), selling
(S2), participating (S3) and delegating (S4).
■ S1 – Telling – emphasizes high amounts of guidance (task
behavior) but limited supportive (relationship) behavior. This
style is most appropriate for low follower readiness (R1).
■ S2 – Selling – emphasizes high amounts of both directive
(task) and relationship behaviors. This style is most
appropriate for low to moderate follower readiness (R2).
■ S3 – Participating – emphasizes a high amount of two-way
communication and supportive (relationship) behavior but low
amounts of guidance (task behavior). This style is most
appropriate for moderate to high follower readiness (R3).
■ S4 – Delegating – emphasizes little direction or support with
low levels of both task and relationship behaviors. This style is
most appropriate for high follower readiness (R4).
SITUATIONAL THEORIES
B. CONTINGENCY LEADERSHIP (Fred Fiedler) – an
approach to leadership that suggests the
most effective management behavior
depends on adaptation to circumstances in a
variety of situations; based on the theory
that work is best accomplished when
managers determine how to behave towards
subordinate in each situations.
In order to measure the attitudes of the
leader, Fiedler developed a “Least Preferred Co-
Worker” (LPC) Scale. This measures the rating
given by leaders about the person with whom
they could work least well.
SITUATIONAL THEORIES

• Fiedler suggests that leadership behavior is dependent upon the favorability of the leadership
situation. There are three major variables which determine the favorability of the situation
and which affect the leader’s role and influence:
■ Leader–member relations – the degree to which the leader is trusted and liked by group
members, and their willingness to follow the leader’s guidance.
■ The task structure – the degree to which the task is clearly defined for the group and the
extent to which it can be carried out by detailed instructions or standard procedures.
■ Position power – the power of the leader by virtue of position in the organization, and
the degree to which the leader can exercise authority to influence (for example)
rewards and punishments, or promotions and demotions.
SITUATIONAL THEORIES
• From these three variables, Fiedler constructed eight combinations of group–task situations through
which to relate leadership style.

[Link]
SITUATIONAL THEORIES
 When the situation is
■ very favorable (good leader–member relations, structured task, strong position power), or
■ very unfavorable (poor leader–member relations, unstructured task, weak position power),
then a task-oriented leader (low LPC score) with a directive, controlling style will be more effective.

 When the situation is

■ moderately favorable and the variables are mixed,
then the leader with an interpersonal relationship orientation (high LPC score) and a participative
approach will be more effective.
SITUATIONAL THEORIES
C. SITUATIONAL CONTINUUM (Robert Tannenbaum and Warren Schmidt) – the
most effective leadership style is contingent on what they call “forces” in (1) the
manager, (2) the subordinate, and (3) the situation. Their work suggests a continuum of
possible leadership behavior available to a manager and along which various styles of
leadership may be placed.
1. Forces in the manager. The manager’s behavior will be influenced by their own
personalities, backgrounds, knowledge and experiences. These internal forces will
include:
■ value systems;
■ confidence in subordinates;
■ leadership inclinations; and
■ feelings of security in an uncertain situation.
SITUATIONAL THEORIES
2. Forces in the subordinate. Subordinates are influenced by many personality variables and
their individual set of expectations about their relationship with the manager.
Characteristics of the subordinate are:
■ the strength of the needs for independence;
■ the readiness to assume responsibility for decision-making;
■ the degree of tolerance for ambiguity;
■ interest in the problem and feelings as to its importance;
■ understanding and identification with the goals of the organization;
■ necessary knowledge and experience to deal with the problem; and
■ the extent of learning to expect to share in decision-making.
The greater the positive response to these characteristics, the greater freedom of action can be
allowed by the manager.
SITUATIONAL THEORIES

3. Forces in the situation. The manager’s behavior will be influenced by the general situation
and environmental pressures. Characteristics in the situation include:
■ type of organization;
■ group effectiveness;
■ nature of the problem; and
■ pressure of time.
 SITUATIONAL THEORIES

[Link]
SITUATIONAL THEORIES

Moving along the continuum, the manager may be characterized according to the degree of
control that is maintained. Neither extreme of the continuum is absolute as there is always
some limitation on authority and on freedom. This approach can be seen as identifying four
main styles of leadership by the manager: tells, sells, consults, joins.
■ Tells. The manager identifies a problem, chooses a decision and announces this to
subordinates, expecting them to implement it without an opportunity for participation.
■ Sells. The manager still chooses a decision but recognizes the possibility of some
resistance from those faced with the decision and attempts to persuade subordinates to
accept it.
SITUATIONAL THEORIES

■ Consults. The manager identifies the problem but does not choose a decision until the
problem is presented to the group, and the manager has listened to the advice and
solutions suggested by subordinates.

■ Joins. The manager defines the problem and the limits within which the decision must be
chosen and then passes to the group, with the manager as a member, the right to make
decisions.
SITUATIONAL THEORIES

D. PATH-GOAL THEORY (Robert House) – suggests that the performance of subordinates

is affected by the extent to which the manager satisfies their expectations.
House identifies four main types of leadership behavior.
■ Directive leadership involves letting subordinates know exactly what is expected
of them and giving specific directions. Subordinates are expected to follow
rules and regulations. This type of behavior is similar to ‘initiating
structure’ in the Ohio State Leadership Studies.
■ Supportive leadership involves a friendly and approachable manner and
displaying concern for the needs and welfare of subordinates. This type of
behavior is similar to ‘consideration’ in the Ohio State Leadership Studies.
SITUATIONAL THEORIES

■ Participative leadership involves consulting with subordinates and the

evaluation of their opinions and suggestions before the manager
makes the decision.
■ Achievement-oriented leadership involves setting challenging goals for
subordinates, seeking improvement in their performance and
showing confidence in subordinates’ ability to perform well.
Path–goal theory suggests that the different types of behavior can be practiced
by the same person at different times in varying situations.
SITUATIONAL THEORIES

Leadership behavior is determined by two main situational factors: the

personal characteristics of subordinates; and the nature of the task.
■ The personal characteristics of subordinates determine how they will
react to the manager’s behavior and the extent to which they see
such behavior as an immediate or potential source of need
satisfaction.
■ The nature of the task relates to the extent that it is routine and
structured, or non-routine and unstructured.
 SITUATIONAL THEORIES

[Link]

Representation of the Path-Goal Theory of Leadership

SITUATIONAL THEORIES

E. THE VROOM-YETTON THEORY (Victor Vroom and Phillip Yetton) - is a theory of

leadership that suggests conditions that influence subordinates to
participate in various ways in decision making; based on the analysis of two
aspects of a leader’s decision:
■ Decision quality, or rationality, is the effect that the decision has on group
performance.
■ Decision acceptance refers to the motivation and commitment of group
members in implementing the decision.
A third consideration is
■ the amount of time required to make the decision.
SITUATIONAL THEORIES

The Vroom and Yetton model suggests five main management decision styles:
■ Autocratic
A.I: Leader solves the problem or makes the decision alone using information
available at the time.
[Link]: Leader obtains information from subordinates but then decides on solution
alone.
■ Consultative
C.I: The problem is shared with relevant subordinates, individually. The leader then
makes the decision which may or may not reflect the influence of subordinates.
SITUATIONAL THEORIES

[Link]: The problem is shared with subordinates as a group. The leader

then makes the decision which may or may not reflect the
influence of subordinates.
■ Group
[Link]: The problem is shared with subordinates as a group. The leader
acts as chairperson, rather than an advocate. Together the leader
and subordinates generate and evaluate alternatives and attempt
to reach group consensus on a solution.
TWO FUNDAMENTAL FORMS OF LEADERSHIP
(DOUGLAS MACGREGOR BURNS)
■ Transactional leadership is based on legitimate authority within the bureaucratic structure of
the organization. The emphasis is on the clarification of goals and objectives, work task
and outcomes, and organizational rewards and punishments. Transactional leadership
appeals to the self-interest of followers. It is based on a relationship of mutual
dependence and an exchange process of: ‘I will give you this, if you do that’.
■ Transformational leadership, by contrast, is a process of engendering higher levels of
motivation and commitment among followers. The emphasis is on generating a vision
for the organization and the leader’s ability to appeal to higher ideals and values of
followers, and creating a feeling of justice, loyalty and trust. In the organizational sense,
transformational leadership is about transforming the performance or fortunes of a
business.