Leadership

Case:1
“ And I will always do my duty, no
matter what the price. I've counted up
the cost, I know the sacrifice.Oh, I
don't want to die, but if divine asked of
me,
I'll bear that cross with an honor,
'Cause freedom don't come free.
I'm an American soldier, an American”

-Toby Keith – American Soldier

 Patriotism

 Honor

 Courage

 Commitment
Definition of leadership
A leader is any person who
influences individuals and
groups within an organization,
helps them in the establishment
of goals, and guides them
toward achievement of those
goals, thereby allowing them
to be effective.
Keys Elements of the
Definition
 Leadership is a group phenomenon

 Leaders guide and influence others

 Leadership involves some form of

hierarchy in the group
A Leadership Story
 A group of workers and their leaders are set a task
of clearing a road through a dense jungle on a remote island
to get to the coast where an estuary provides
a perfect site for a port.
 The leaders organise the labour into efficient units and
monitor the distribution and use of capital assets –
progress is excellent. The leaders continue to monitor and
evaluate progress, making adjustments along the way to
ensure the progress is maintained and efficiency increased
wherever possible.
 Then, one day amidst all the hustle and bustle and activity,
one person climbs up a nearby tree. The person surveys the
scene from the top of the tree.
And shouts down to the
assembled group below…
“Wrong Way!”
(Story adapted from Stephen Covey (2004) “The Seven
Habits of Highly Effective People” Simon & Schuster).

“Management is doing things right,

leadership is doing the right things”
(Warren Bennis and Peter Drucker)
What Is Leadership?

management
Use of authority inherent in
designated formal rank to
obtain compliance from
organizational members
 Differences b/w leadership &
management
Leadership Management
 based on influence  based on authority

 an informal designation  a formally designated

 an achieved position position

 independent of  an assigned position

management  improved by use of

effective leadership skills

Leadership Characteristics

• Involves noncoercive influence

• Is goal directed
• Requires followers
 It's a fine sunny day in
the forest and a lion is
sitting outside his cave,
lying lazily in the sun.
Along comes a fox, out
on a walk.

Fox: "Do you know the

time, because my watch
is broken"
Lion: "Oh, I can easily fix the
watch for you"

Fox: "Hmm... But it's a very

complicated mechanism, and
your big claws will only destroy
it even more“
Lion: "Oh no, give it to me, and it will
be fixed"

Fox: "That's ridiculous! Any fool

knows that lazy lions with great claws
cannot fix complicated watches"

Lion: "Sure they do, give it to me and

it will be fixed"
The lion disappears into his
cave, and after a while he
comes back with the watch
which is running perfectly. The
fox is impressed, and the lion
continues to lie lazily in the sun,
looking very pleased with
himself.
Soon a wolf comes along and stops
to watch the lazy lion in the sun.

Wolf: "Can I come and watch TV

tonight with you, because mine is
broken"

Lion: "Oh, I can easily fix your TV

for you"
 Wolf: "You don't expect me to
believe such rubbish, do you? There
is no way that a lazy lion with big
claws can fix a complicated TV“

Lion: "No problem. Do you want to

try it?"
The lion goes into his
cave, and after a while
comes back with a
perfectly fixed TV.
The wolf goes away
happily and amazed.
 Inside the lion's cave. In one
corner are half a dozen small
and intelligent looking rabbits
who are busily doing very
complicated work with very
detailed instruments. In the
other corner lies a huge lion
looking very pleased with
himself.
 Moral :

IF YOU WANT TO KNOW WHY

A MANAGER IS FAMOUS;
LOOK AT THE WORK OF HIS
SUBORDINATES.
Leadership Effectiveness

Leader are effective when their followers:

 achieve their goals

 can function well together

 can adapt to the changing demands

from external forces.

The Evolution of Leadership
Theory
Leadership

 Are leaders born?

 We often hear of a person being a “natural born
leader.” Is there such a thing?
 Do small children demonstrate leadership skills
in their play and interactions?
 If so, how did they acquire this skill?
The trait approach
•Early research into leadership can be characterized
as a search for ‘the great man’.
•Personal characteristics of leaders were
emphasized and the implicit idea was that leaders
are born rather than made.
•The focus was on identifying and measuring traits
that distinguished leaders from non-leaders or
effective from ineffective leaders.
 Can people learn now to be a leader?

 If so, what skills are learned?

 What might be the measurements?

Behavioral Theories

 Assumes people can be trained to lead

 Researched the behaviors of specific leaders
 Provides the basis of design for training programs
 Behavioral Theories of Leadership

Ohio State 1) Initiation

2) Consideration

University of 1) Production-oriented
2) Employee-oriented
Michigan
1) Concern for production
Managerial Grid
2) Concern for people
Ohio State Studies
Initiating Structure
The extent to which a leader
is likely to define and
structure his or her role and
those of sub-ordinates in the
search for goal attainment.

Consideration
The extent to which a leader is likely to have
job relationships characterized by mutual
trust, respect for subordinate’s ideas, and
regard for their feelings.
University of Michigan
Studies
Employee-Oriented Leader
Emphasizing interpersonal relations; taking a
personal interest in the needs of employees
and accepting individual differences among
members.
Production-Oriented Leader
One who emphasizes
technical or task aspects of
the job.
Managerial Grid

 Two Dimensions
 Managerial Grid

Country Club Team

Management(1,9) Management(9,9)
Concern for People

Middle-of-the Road
Management(5,5)

Impoverished Authoritative
Management(1,1) Management(9,1)

Concern for Production

The Managerial Grid

 Country Club Management(1,9)

 Thoughtful attention to needs of people for
satisfying relationships leads to a comfortable
friendly enterprise.
 Impoverished Management(1,1)
 Exertion of minimum effort to get required work
done is appropriate to sustain enterprise
membership.
 Middle-of-the-Road Management (5,5)
 Adequate enterprise performance is possible
through balancing the necessity to get out work with
maintaining morale of people at a satisfactory level.
 Team Management (9,9)
 Work accomplishment is from committed people;
interdependence through a “common stake” in
enterprise objectives leads to relationships of trust
and respect.
 Authority-Obedience (9,1)
 Efficiency in operations results from arranging
conditions of work in such a way that human
elements interfere to a minimum degree.
Limitations of Behavioural
Perspective
 Ignores the possibility that the best
leadership style depends on the situation
Case 1
 Indigo Software (Indigo), set up in Hyderabad in the
early 1970s, with an initial strength of 150, grew to
become the country’s leading software development
firm in the year 2000, with around 18,000
employees on its rolls. The company’s success can
be attributed to the values upheld by its founders.
Indigo’s founders believed that to retain its place in
the dynamic business environment, the company
had to develop leaders of high quality who kept the
global perspective in mind while working in the
organization. With this as its aim, the company
established the Leadership Learning Institute (LLI)
to nurture leadership qualities among its employees
across the globe.
 The vision of Indigo’s founders was to make it
big in the global business arena and to
transform the company from being just a
software developing firm to one providing
consultancy services to organizations to help
them meet their strategic goals. Indigo used
its leadership center to direct itself in a
planned and controlled manner to achieve
this objective. The center was used as an
avenue to spread knowledge and corporate
values throughout the company.
 During its initial years, the organization was
small enough to make it possible for its
founder, Janardhan Rao, to personally interact
with his employees. This allowed the
employees to observe and emulate the
leadership qualities of their employer.
However, with an increase in the number of
employees, it became difficult for the chief to
address his workforce personally. Therefore,
the company set up a leadership development
center with the aim of developing leadership
qualities among the organizational members.
 At the center, employees from various operational
centers of the company spread across the globe and of
different nationalities were imparted training in
leadership qualities. They were divided into groups of
400, each group being periodically sent to workshops,
where leadership training was imparted to them over
four weeks. The workshops revolved around the
objective of developing timeless leadership principles
that would help the company withstand the tough
competition outside and other contingencies. Members
of the workshop were also trained in effective decision
making.
 Once they successfully completed their
training, these employees were given
opportunities to hone their leadership skills in
the organization and transfer their knowledge
to other organizational members.
With the establishment of the LLI, Indigo
attempted to develop leadership from within
and address business risks through
succession planning, keeping a holistic
outlook in mind.
Questions for Discussion:
1. “Modern organizations are developing robust
leadership development systems to identify leaders
within the organization and hone their skills to be more
effective in such roles.” Describe the various skills that
are necessary to be an effective leader.
2. Indigo’s founders believed that if the company had to
survive in the dynamic business environment, it would
have to develop leaders of high quality from within the
organization, who had a global perspective. Can
leadership be taught in leadership development centers
or is it an in-born trait in individuals?
Contingency Theories of Leadership
 Path-Goal Theory

Path-Goal Theory
The theory that it is the
leader’s job to assist followers
in attaining their goals and to
provide them the necessary
direction and/or support to
ensure that their goals are
compatible with the overall
objectives of the group or
organization.
Path-Goal Theory of
Leadership
Path Directive Directive
Leader identifies Appropriate Leader
employee needs. goals connects
are rewards with
established. goal(s)
Supportive behavior Participative behavior
Leader provides assistance Employees become satisfied and
on employee’s path toward goals.
motivated and accept the leader.

Motivation
Achievement Both employees and
Effective organization better
performance reach
occurs. their goals.
The Path-Goal Theory
 Path-Goal Leadership Styles

 Directive
 Task-oriented behaviours
 Supportive
 People-oriented behaviours
 Participative
 Encouraging employee involvement
 Achievement-oriented
 Using goal setting and positive self-fulfilling prophecy
Path-Goal Contingencies
Employee
Contingencies Directive Supportive Participative Achievement

Skill/Experience low low high high

Locus of Control external external internal internal

Environmental
Contingencies Directive Supportive Participative Achievement
Task Structure non-routine routine non-routine ?

Team Dynamics –ve norms low cohesion +ve norms ?

 Examples of Hypotheses from Path-
Goal Theory

 When tasks are ambiguous and stressful,

subordinates will prefer directive leadership;
when tasks are highly-structured and well-laid
out, subordinates will prefer supportive
leadership
 When subordinates have high ability and
considerable experience, directive leadership
will be perceived as redundant
 Subordinates with an internal locus of control
will be more satisfied with a participate style
Leader–Member Exchange
Theory
Leader-Member Exchange (LMX) Theory
Leaders create in-groups and out-groups, and
subordinates with in-group status will have
higher performance ratings, less turnover,
and greater job satisfaction.
Leader-Member Exchange
Theory
 Leaders do differentiate among followers
 Followers with in-group status have:
 higher performance ratings
 lower turnover intentions
 greater satisfaction with their superiors
 higher overall satisfaction than those in the out-group
Leader-Member Exchange
Theory
Leader-Member Exchange
(LMX)
In-group members Out-group members

 Share a common bond 
 Have less in common
and value system with the leader

 Interact with the leader 
 Have limited interactions
regularly
with the leader

 Receive more challenging
assignments and more 
 Receive less challenging
meaningful rewards work and little positive

 Are more positive about reinforcement
the organization and 
 Become bored and often
have higher job quit
performance and
satisfaction
 Hersey-Blanchard Situational
Leadership Theory (SLT):
 Telling. The leader defines the roles needed to do
the job and tells followers what, where, how, and
when to do the tasks
 Selling. The leader provides followers with
structured instructions, but is also supportive
 Participating. The leader and followers share in
decisions about how best to complete a high-quality
job
 Delegating. The leader provides little specific,
close direction or personal support to followers
 Hersey-Blanchard Situational Leadership
Model

Degree of follower’s readiness to assume personal responsibility:

R1 R2 R3 R4

Unable Unable Able Able

Unwilling Willing Unwilling Willing

S1 S2 S3 S4
Telling: Selling: Participating: Delegating:
Instructing andExplaining and Sharing and Coaching and
supervising clarifying facilitating assisting
Leadership behavior appropriate to the situation:
 SITUATIONAL LEADERSHIP
For each of the following situations
identify the maturity level of the
employees:
1. Mary had never done a report before but you know she can do it with the
minimum of help from you.
2. Tina is an enthusiastic employee. You have decided to expand her
responsibilities by including a difficult task in her job.
3. Carl usually does excellent work & gets along well with his co-workers. For the
past two weeks you have noticed a drop in his quality of work & saw him
arguing with his co-workers & not ready to go ahead with work properly. You
want Carl to return to his usual way of performance.
4. You told John to fill the customer order according to your specification.
However he deliberately ignored your direction. The customer returned the
order to you with a complaint.
Contemporary Theories
of
Leadership
Transactional Leadership

 Leaders who guide or

motivate their followers in
the direction of established
goals by clarifying roles &
task requirements.
Characteristics of
Transactional Leaders
1. Contingent Reward: Contracts exchange of rewards for effort,
promises rewards for good performance, recognizes
accomplishments.
2. Management by Exception (active): Watches and searches
for deviations from rules and standards, takes corrective action.
3. Management by Exception (passive): Intervenes only if
standards are not met.
Transformational Leadership
 Transformational leaders
 Leaders empower and coach followers
 Followers identify with the leader
 Motivate followers (to)
 Ignore self-interest
 Work for the larger good of the organization
 Achieve significant accomplishments
 Make major changes
Characteristics of
Transformational Leaders
 Charisma: Provides vision and sense of mission, instills
pride, gains respect and trust.
 Inspiration: Communicates high expectations, uses
symbols to focus efforts, expresses important purposes
in simple ways.
 Intellectual Stimulation: Promotes intelligence,
rationality, and careful problem solving.
 Individualized Consideration: Gives personal
attention, treats each employee individually, coaches,
advises.
Transformational Leadership goes Beyond Transactional
Leadership
Transactional
Leadership
Transformational
Motivating for Leadership
performance at Performance
•Motivating for
expected levels.
performance beyond
Initiating structure
beyond expectations expectations
to clarify roles and •Inspiring for missions
tasks. beyond
self-interest.
Stressing the link •Instilling confidence to
between reward and exceed expected
goal achievement. performance

Uses agreed upon

performance to
motivate.
 Dhirubhai Ambani

Dhirubhai Ambani ,a perfect combination of

entrepreneurship and leadership, transformed Reliance
from a company with a turnover of Rs 640 million in
1976, to one with a turnover of Rs 620 billion in 2002.
Starting with a small textile mill in Naroda, in
1966,Dhirubhai took Reliance into various areas like
petrochemicals, polyester filament yarn, oil and gas
exploration and production, refining and marketing of
petroleum, textiles, power, telecom services, information
management and financial services
Dhirubhai started Reliance at a time when most
companies in India were owned by the government,
and the private players were given step-motherly
treatment by the government while offering licenses
and permits. Similarly, when most Indian business
houses depended on government – owned financial
institutions for funds, Dhirubhai raised capital from
the public by offering shares of his companies.

Questions?