MBA HR Subject

Leadership Management
Unit-1
“Leadership is a process whereby an individual influences a group of individuals to achieve a common
goal.” – Northouse, P. G., Leadership: Theory and Practice

“Influencing people – by providing purpose, direction, and motivation – while operating to

accomplish the mission and improving the organization.” – US Army Manual

"As we look ahead into the next century, leaders will be those who empower others." - Bill Gates

“The process of moving a group (or groups) in some direction through mostly non-coercive
means” – Kotter

“Leadership is the ability of a manager to induce subordinates to work with confidence and
zeal”. - Koontz and O’Donnell

Key Components to Effective Leadership

1 Honesty and Integrity. Great leaders create an organizational culture built on these two core
values and hold all employees accountable to them. ...
2 Outstanding Self Awareness. A leader must understand their own strengths and weaknesses. ...
3 Visions. ...
4 Courage. ...
5 Communication Skills. ...
6 Team Builders.

Factors of leadership
 Teach, coach, connect, communicate.
 Lead by example, work hard.
 Doing what is right always comes back to you.
 Have vision for the future.
 Be committed and passionate.
 Be proactive not reactive.
 Have great integrity.
 Be a positive motivator, build people’s confidence.
 Never stop learning.

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Nature and Characteristics of Leadership
1. Leadership is a personal quality.

2. It exists only with followers. If there are no followers, there is no leadership?

3. It is the willingness of people to follow that makes person a leader.

4. Leadership is a process of influence. A leader must be able to influence the behaviour, attitude
and beliefs of his subordinates.

5. It exists only for the realization of common goals.

6. It involves readiness to accept complete responsibility in all situations.

7. Leadership is the function of stimulating the followers to strive willingly to attain

organizational objectives.

8. Leadership styles do change under different circumstances.

9. Leadership is neither bossism nor synonymous with; management.

Leadership Functions
1. Setting Goals:

A leader is expected to perform creative function of laying out goals and policies to persuade the
subordinates to work with zeal and confidence.

2. Organizing:

The second function of a leader is to create and shape the organization on scientific lines by
assigning roles appropriate to individual abilities with the view to make its various components
to operate sensitively towards the achievement of enterprise goals.

3. Initiating Action:

The next function of a leader is to take the initiative in all matters of interest to the group. He
should not depend upon others for decision and judgment. He should float new ideas and his
decisions should reflect original thinking.

4. Co-Ordination:

A leader has to reconcile the interests of the individual members of the group with that of the
organization. He has to ensure voluntary co-operation from the group in realizing the common
objectives.

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5. Direction and Motivation:

It is the primary function of a leader to guide and direct his group and motivate people to do their
best in the achievement of desired goals, he should build up confidence and zeal in the work
group.

6. Link between Management and Workers:

A leader works as a necessary link between the management and the workers. He interprets the
policies and programmes of the management to his subordinates and represents the subordinates’
interests before the management. He can prove effective only when he can act as the true
guardian of the interests of his subordinates.

Qualities of a Good Leader

Some of the qualities of a good leader are as follows:

1. Good personality.

2. Emotional stability.

3. Sound education and professional competence.

4. Initiatives and creative thinking.

5. Sense of purpose and responsibility.

6. Ability to guide and teach.

7. Good understanding and sound judgment.

8. Communicating skill.

9. Sociable.

10. Objective and flexible approach.

11. Honesty and integrity of character.

12. Self confidence, diligence and industry.

13. Courage to accept responsibility

Importance of Leadership in Management:

The importance of leadership can be highlighted from the following:

1. It Improves Motivation and Morale:

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Through dynamic leadership managers can improve motivation and morale of their subordinates.
A good leader influences the behaviour of an individual in such a manner that he voluntarily
works towards the achievement of enterprise goals.

2. It Acts as a Motive Power to Group Efforts:

Leadership serves as a motive power to group efforts. It leads the group to a higher level of
performance through its persistent efforts and impact on human relations.

3. It Acts as an Aid to Authority:

The use of authority alone cannot always bring the desired results. Leadership acts as an aid to
authority by influencing, inspiring and initiating action.

4. It is Needed at All Levels of Management:

Leadership plays a pivotal role at all levels of management because in the absence of effective
leadership no management can achieve the desired results.

5. It Rectifies the Imperfectness of the Formal Organisational Relationships:

No organizational structure can provide all types of relationships and people with common
interest may work beyond the confines of formal relationships. Such informal relationships are
more effective in controlling and regulating the behaviour of the subordinates. Effective
leadership uses there informal relationships to accomplish the enterprise goals.

6. It Provides the Basis for Co-operation:

Effective leadership increases the understanding between the subordinates and the management
and promotes co-operation among them.

Process or Techniques of Effective Leadership:

The following are the techniques of effective leadership:

1. The leader should consult the group in framing the policies and lines of action and in initiating
any radical change therein.

2. He should attempt to develop voluntary co-operation from his subordinates in realizing

common objectives.

3. He should exercise authority whenever necessary to implement the policies. He should give
clear, complete and intelligible instructions to his subordinates.

4. He should build-up confidence and zeal in his followers.

5. He should listen to his subordinates properly and appreciate their feelings.

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6. He should communicate effectively.

7. He should follow the principle of motivation

Leadership Styles
A-Autocratic style, also known as authoritarian leadership, is a leadership style characterized by
individual control over all decisions and little input from group members. Autocratic leaders
typically make choices based on their own ideas and judgments and rarely accept advice from
followers. Autocratic leadership involves absolute, authoritarian control over a group.

Characteristics of Autocratic Leadership Some of the primary characteristics of autocratic

leadership include:

•Little or no input from group members

•Leaders make the decisions

•Group leaders dictate all the work methods and processes

•Group members are rarely trusted with decisions or important tasks

Advantages:

Autocratic leadership can be beneficial in some instances, such as when decisions need to be
made quickly without consulting with a large group of people. Some projects require strong
leadership in order to get things accomplished quickly and efficiently. In situations that are
particularly successful, such as during military conflicts, group members may actually prefer an
autocratic style. It allows members of the group to focus on performing specific tasks without
worrying about making complex decisions..

Disadvantages:

While autocratic leadership can be beneficial at times, there are also many instances where this
leadership style can be problematic. People who abuse an autocratic leadership style are often
viewed as bossy, controlling, and dictatorial, which can lead to resentment among group

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members. Because autocratic leaders make decisions without consulting the group, people in the
group may dislike that they are unable to contribute ideas.

B-Democratic style:

It is also known as participative leadership, is a type of leadership style in which

members of the group take a more participative role in the decision-making process. Researchers
have found that this learning style is usually one of the most effective and lead to higher
productivity, better contributions from group members, and increased group morale.

Characteristics:

Some of the primary characteristics of democratic leadership include:

•Group members are encouraged to share ideas and opinions, even though the leader retains the
final say over decisions.

•Members of the group feel more engaged in the process.

•Creativity is encouraged and rewarded.

Advantages:

Because group members are encouraged to share their thoughts, democratic leadership can leader
to better ideas and more creative solutions to problems. Group members also feel more involved
and committed to projects, making them more likely to care about the end results. Research on
leadership styles has also shown that democratic leadership leads to higher productivity among
group members.

Disadvantages:

While democratic leadership has been described as the most effective leadership style, it does
have some potential downsides. In situations where roles are unclear or time is of the essence,
democratic leadership can lead to communication failures and uncompleted projects. In some
cases, group members may not have the necessary knowledge or expertise to make quality
contributions to the decision-making process. Democratic leadership works best in situations
where group members are skilled and eager to share their knowledge. It is also important to have

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plenty of time to allow people to contribute, develop a plan and then vote on the best course of
action.

C-Laissez-faire style:

This style is also known as delegate leadership, is a type of leadership style in which leaders are
hands-off and allow group members to make the decisions. Researchers have found that this is
generally the leadership style that leads to the lowest productivity among group members.

Characteristics:

•Very little guidance from leaders

•Complete freedom for followers to make decisions

•Leaders provide the tools and resources needed

•Group members are expected to solve problems on their own Laissez-faire leadership can be
effective in situations where group members are highly skilled, motivated and capable of
working on their own. While the conventional term for this style is 'laissez-faire' and implies a
completely hands-off approach, many leaders still remain open and available to group members
for consultation and feedback.

Disadvantages

Laissez-faire leadership is not ideal in situations where group members lack the knowledge or
experience they need to complete tasks and make decisions. Some people are not good at setting
their own deadlines, managing their own projects and solving problems on their own. In such
situations, projects can go off-track and deadlines can be missed when team member.

THEORIES OF LEADERSHIP

There are three major approaches to leadership: a) trait theories, b) behavioral theories,
c) situational theories. Trait theories highlight that there exists a finite set of individual traits or
characteristics that distinguish successful from unsuccessful leaders. Behavioral theories
highlight that the most important aspect of leadership is not the traits of the leader, but what the
leader does in various situations. Successful leaders are distinguished form unsuccessful leaders

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by their particular style of leadership. Situational theories outlines that the effectiveness of the
leader is not only determined by his or her style of behavior, but also by the situation
surrounding the leadership environment. Situational factors include the characteristics of the
leader and the subordinates, the nature of the task and the structure of the group.

TRAIT THEORY:

Some of the significant characteristics of leaders are categorized as follows:

 Physical Characteristics – age, appearance, height, weight

 Social Background – Education, social status, mobility
 Intelligence – Intelligence, ability, judgment, knowledge, decisiveness, fluency of speech
 Personality – Aggressiveness, alertness, dominance, enthusiasm, extroversion,
independence, creativity, personal integrity, self-confidence
 Task-related Characteristics – Achievement drive, drive for responsibility, initiative,
persistence, enterprise, task orientation
 Social Characteristics – Administrative ability, attractiveness, cooperativeness,
popularity, prestige, sociability, interpersonal skill, tack and diplomacy

The list of important leadership traits is endless and grows with each passing year. It has not yet
been shown that a finite set of traits can distinguish successful from unsuccessful leaders. For
example, successful research administrators are usually inquisitive, independent, perspective,
and experts within their field. Successful sales manages are usually high-need achievers
gregarious, enthusiastic and project a professional stature, What may be important traits for one
occupation may not be important for other roles in the same organization. Uniformity of traits
across all levels is thus questioned. Trait identifies who the leader is, not the behavioral patterns
he or she will exhibit in attempting to influence subordinate actions.

BEHAVIOURAL THEORY:

The foundation for the style of leadership approach was the belief that effective leaders
utilized a particular style to lead individuals and groups to achieving certain goals, resulting in
high productivity and morale. Unlike trait theories, the behavioral approach focused on leader

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effectiveness, not the emergence of an individual as a leader. There are two prominent styles of
leadership such as task orientation, and employee orientation.

Task orientation is the emphasis the leader place on getting the job done by such actions
as assigning and organizing the work, making decision, and evaluating performance. Employee
orientation is the openness and friendless exhibited by the leader and his concern for the needs of
subordinates.

Managerial Grid:

The five basic approaches to management identified by Black and Mouton are based on
the two dimensions of concern of people and concern for production that are associated with
leaders. A managerial grid is formed based on these two dimensions which are rated on 9 point
scale. If manager is securing the lowest score on these two dimensions I,I is identified as
impoverished style of managers who are low on both their concern of people and production, 1,9
or country club style is designated to those managers who are having high concern for people but
low concern for production. The 5, 5 or the middle-of-the road style concerns the moderate
levels of concern for both people and production. The 9,1 or task management style is one where
there is a high concern for production but very little concern for people and finally, 9,9 or team
management style is one where the manager has high concern for both people and production.
According to Blake and Mouton the one best style for all mangers is the 9,9 or team management
style.

Likert’s System Four Model:

Rensis Likert suggests that managers operate under four different systems.

System I – Exploitative Authoritative:

The manager believes in very authoritarian manner and actually exploits the subordinates
System II – Benevolent Authoritative:

The manager takes a paternalistic approach while still being autocratic. Behaving as
benevolent autocratic, the leader maintains strict control over the subordinates albeit in a
paternalistic manner.

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System III – Consultative:

The manager consults the subordinates and still maintains the right to make the final
decision. System IV – Participative Groups: The manager uses a democratic style and makes
decision by consensus and majority vote.

Likert feels that the best way for all organizations to manage employees is to move towards
System IV.

Situational Theory:

Situational approaches to leadership take the position that there is no “one best way to
lead in all the situations. Effective leadership style will vary from situations to situation,
depending on several factors such as the personality predisposition of the leaders, the
characteristics of the followers, the nature of task being done and other situational factors.
Tannenbaum and Schmidt reported that the use of authority by the manager (boss centered
leaderships style) or the area of freedom given to subordinates (subordinate centered leadership)
is a function of the following factors such as

i) forces in the manager – value system, confidence in subordinates, leadership

predispositions and feelings of security and insecurity),
ii) forces in the subordinates (their needs for independence or dependence,
readiness to assume responsibility, tolerance for ambiguity, abilities,
knowledge and experience and inclination to participate in decision making)
and
iii) forces in the situation (type of organization, group effectiveness, time
pressures and the nature of the problem itself)

Fiedler’s Contingency Model of Leadership:

Fiedler developed a model to predict work group effectiveness by taking into consideration the
best fit between the leadership style and the degree of favorableness of the situation. The
following three factors are considered to check whether the situation will be favorable or
unfavorable. These factors are i) Leader- Member relations, ii) Task structure of the group, iii)
Perceived position power of the manager

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Leadership Style: According to Fiedler, the leadership style depends on two dimensions, task-
oriented and human-relations oriented. The task-oriented leader is primarily concerned with the
task performance and the accomplishment of task goals. He gets satisfied with the
accomplishment of task performance. While, the manager concerned with human relations lay
more emphasis on developing the interpersonal relationship with his subordinates.In order to
understand the attitude of a leader, Fiedler developed a “Least Preferred Co-worker Scale
(LPC)”, wherein the leaders are asked to rate a person on a scale ranging from lowest (1) to
highest (8) on several parameters to identify the worker with whom they least like to work.
Certain parameters on the LPC scale are: pleasant/unpleasant, friendly/unfriendly, tense/relaxed,
supportive/hostile, cooperative/uncooperative, quarrelsome/harmonious, etc. The leaders with
high LPC scores are said to be relationship-oriented whereas the ones with the low LPC scores
are considered as task-oriented.
Situational Variables: It has been observed that, several situational factors influence the
effectiveness of the leadership styles, but however, Fiedler has talked about three critical
dimensions: Leader’s Position Power: This element is concerned with the power or authority a
leader derives from the position held by him in the organization. It has been observed, that a
manager with absolute power influences the behavior of others more than the ones without
power. Task Structure: The task structure means the extent to which the task requirements are
clearly defined in terms of the task goals, processes and relationship with other tasks. It has been
observed, that with the clear definition of task structure the actions of the subordinates can be
well directed and their performances can be well controlled, which may not be possible in case
of unclear task structure.
Leader-member Relations: This dimension talks about the degree to which the members have
trust, confidence and faith in their manager.
Relation Between Styles and Situations: This is the last element of Fiedler’s contingency
model, wherein he talks about the relationship between the situation and the appropriateness of
leadership style. According to him, the leadership effectiveness depends on the situation, as one

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style favoring one situation may not necessarily be appropriate in any other situation. Thus, it is
the situation that gives an opportunity to the leader to influence his subordinates through the
right kind of leadership style.
Thus, Fiedler’s contingency model posits that the situation decides the style of leadership and
influences the behavior of a manager.

Path-Goal Theory of Leader Effectiveness:

A second situational theory of leadership has been proposed by House and Evan. The
principle function of the leader is facilitating to increase valence perception of their subordinates
and clarify and increase expectancy probabilities of them. This will in turn make them to put
greater amount of effort and derive higher level of satisfaction and performance in their work.

The theory is composed of two basic propositions such as

i) role of the leader and

ii) ii) dynamics of the situation.

Leadership Role: Leader behavior is acceptable and satisfying to the extent that subordinates
perceive such behavior as a source of satisfaction or instrumental to future satisfaction. There are
four styles of leadership:

Directive Leadership Behavior: This deals with planning, organizing, controlling and
coordinating of subordinates activities by the leader. It is similar to the traditional dimension of
initiating structure in that the leader’s emphasis is on letting the subordinates know what is
expected of them.

Supportive Leadership Behavior: This concerns giving support consideration to the needs of
the subordinates, displaying concern for their well-being and welfare and creating a friendly and
pleasant environment.

Participative Leadership Behavior: This deals with sharing of information and an emphasis
on consultation with subordinates and use of their ideas and suggestions in reaching group-
related decision.

Achievement-Oriented Leadership Behavior: This deals with setting challenging goals,

expecting subordinates to perform at the highest level, continually seeking improvement in

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performance. The leader wants good performance, but at the same time displays confidence in
the ability of his subordinates to do a good job.

Dynamics of Situation: The leadership style is determined by the situation in which the leader
functions. Two main factors that influence the situational effectiveness of the leader’s behavior
are:

a) The characteristics of the subordinates and

b) The characteristics of his work environment, including task, work group and other
organizational factors.

The theory proposes that leader behavior will be perceived as acceptable to subordinates to the
extent that the subordinates see such behavior as either an immediate source of satisfaction or as
needed for future satisfaction.

Characteristics of Subordinates: Subordinates characteristics are seen to partially determine

this perception. The following are the characteristics:

Ability: This refers to the subordinates perception of his or own ability

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Locus of Control: This deals with the degree to which an employee believes that he or she has
control of what happens to him. People who believe that they controlled their environment and
who believe what happens to them occurs because of their behavior are called internal. People
who believe what happens to them is not under their control and occurs because of luck or fate
are externals.

Need and Motives: A subordinate’s dominant needs may affect the impact of leader behavior.
For example, individuals with high safety and security needs may accept an instrumental leader
style, but employees with high affiliation and esteem needs may react more positively to a
supportive leader.

Hersey and Blanchard’s Life Cycle Model of Situation Leadership:

Heresy and Blanchard developed a situational model focusing on the followers

characteristics. Successful leadership is achieved by selecting the right leadership style, which is
contingent on the level of the followers’ developmental level. It is the followers who accept or
reject the leader, so that they are important factors in a leader’s success. Blanchard defined
developmental level as the skill and willingness of people to take responsibility for directing
their own behavior. It consists of two components such as job maturity (Job competence – skills
and abilities) and psychological maturity (motivation and willingness to take responsibility).

Situational Leadership Styles: Situational leadership uses the same two leadership dimensions
– task and relationship behavior. However, the situational leadership approach goes a step further
by considering each as either high or low and then combining them into for specific leadership
styles:

Directing, Coaching, Supporting and Delegating.

i) Directing: (high directive – low supportive): The leader defines roles and tells people
what tasks to do and how, when and where to do them. It emphasis directive
behavior.
ii) Coaching: (high directive – high supportive): The leader provides both directive
behavior and supportive behavior)

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 iii) Supporting (low directive-high supportive): The leader and follower share in
decision- making, with the main role of the leader being facilitating and
communicating.
iv) Delegating: (low directive-low supportive): The leader provides little direction or
support.

Transactional leadership Theories (1970's)

Transactional theories, also known as exchange theories of leadership, are characterized by a

transaction made between the leader and the followers. In fact, the theory values a positive and
mutually beneficial relationship.

Transactional Leadership

For the transactional theories to be effective and as a result have motivational value, the leader
must find a means to align to adequately reward (or punish) his follower, for performing leader-
assigned task. In other words, transactional leaders are most efficient when they develop a
mutual reinforcing environment, for which the individual and the organizational goals are in
sync.

The transactional theorists state that humans in general are seeking to maximize pleasurable
experiences and to diminish un-pleasurable experiences. Thus, we are more likely to associate
ourselves with individuals that add to our strengths.

Transformational Leadership Theories (1970s)

Transformational Theories

The Transformational Leadership theory states that this process is by which a person interacts
with others and is able to create a solid relationship that results in a high percentage of trust, that
will later result in an increase of motivation, both intrinsic and extrinsic, in both leaders and
followers.

The essence of transformational theories is that leaders transform their followers through their
inspirational nature and charismatic personalities. Rules and regulations are flexible, guided by
group norms. These attributes provide a sense of belonging for the followers as they can easily
identify with the leader and its purpose.

Visionary Leadership:

Visionary leadership is the ability of the leader to create an attractive Visionary vision of the
future for the organisation which could outperform the present. For this purposes the vision has
to be clear and compelling so that it can offer new and innovative ways of improvement. People

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in the organisation must also believe that the vision is attainable. It should be perceived as
challenging yet attainable.
For visionary leadership to be successful the leader should possess the following qualities:
(i) He should have the ability to express the vision to others.
(ii) The vision should not only be conveyed verbally, but by the leader’s own actions and
behaviour. This requires the leader to behave in ways that continually convey and reinforce the
vision.
(iii) Lastly, the leader should be able to extend the vision to a variety of activities simultaneously
such as finance, HR, marketing etc

The process of getting that vision implemented can be quite easy if you follow the steps:

Step 1 – Create Vision :The first step in setting goals and priorities is to personally develop

what the organization should look like at some future point, that is, establish a vision.

Step 2 – Set Goal:The second step involves establishing goals, with the active participation of

the team. Goals are stated in terms that cannot be measurable, but they are more focused than a

vision. For example, "The organization must reduce transportation costs." This establishes the

framework of the your vision.

Step 3 – Set Objectives:Objectives are developed from the goals, again with the active

participation of your team. Definable objectives provide a way of measuring the evaluating

movement toward vision achievement. This is the strategy of turning visions into reality.

Objectives are stated in precise, measurable terms such as "By the end of the next quarter, the

shipping department will use one parcel service for shipping items under 100 pounds and one

motor carrier for shipping items over a hundred pounds." The aim is to get general ownership by

the entire team.

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Step 4 – Assign Tasks:The fourth step is to determine tasks what tasks must be done to achieve

the objectives and who must do them. Tasks are concrete, measurable events that must occur. An

example might be, "The transportation coordinator will obtain detailed shipping rates from at

least 10 motor carriers."

Step 5 – Set Time-Line:Now it is time to establish a priority for the tasks. Since time is precious

and many tasks must be accomplished before another can begin, establishing priorities helps

your team to determine the order in which the tasks must be accomplished and by what date. For

example, "The shipping rates will be obtained by May 9."

Step 6 – Follow-up:The final step is to follow-up by checking to see if the team is doing what is

required. This kind of leadership involvement validates to the followers that the stated priorities

are worthy of action. It also demonstrates a leader’s commitment to see the matter through to a

successful conclusion.

Emerging Leadership Behavior

Organizations require leaders to motivate, direct and drive workers to move the company

forward. A leadership theory attempts to understand and explain the process that occurs

between leaders and followers. Emerging or current leadership theories focus on leadership

styles that respond to a variety of situations and circumstances instead of the individual traits

of the leader.

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What Does a New Millennial Leader Look Like?
• Thinks Beyond Boundaries of Organization and Geography
• Creative and Innovative
• Critical Thinker and Solution Provider
• Solid Set of Core Values
• Crisis Handler and Resolver
• Life-Style Integrated with Work
• Works in a Multitude of Environments and Circumstances
• Collaborative Decision-Maker

Reddin 3-D Leadership Model

Definition: The Three-Dimensional Grid or 3-D Leadership Model is developed by Professor
Bill Reddin, who introduced the concept of “situational demands” which talks about the way in
which the leader must behave to be most effective.

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The 3-D model has taken into the consideration the beliefs of the managerial grid and added one
more dimension to it i.e. Effectiveness. The effectiveness means to know what was the result
when one used a particular leadership style in a particular situation.

Thus, three-dimensional axes represent the “task-orientation”, “relationship orientation” and

“effectiveness”. Task orientation means the extent to which the superior directs his subordinate’s
efforts towards the goal attainment. The relationship orientation means the extent to which the
manager has personal relations with his subordinates and finally, the effectiveness means the
extent to which the manager is successful.

When the leadership style meets the demands of the situation, then the leadership is said to be
effective else ineffective. On the basis of this, there are four styles that a manager adopts and is
shown in the figure below:

3-D leadership model

The Separated Manager is the one who is engaged in correcting deviations. He is the person who
formulates the rules and policies and imposes these on others.

The Related Manager is the one who likes to work with others and see an organization as a social
system where everyone works together. He does not worry about the time and accepts others as
they are and do not try to change them.

The Dedicated Manager is the one who is task oriented and is only concerned with the
production. He does not like to mix up with the subordinates and cannot work without power and
responsibility.

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The Integrated Manager is the one who mixes up with the subordinates and facilitate two way
communication. His major emphasis is on building a strong teamwork and effective
communication network.

Reddin believed that the way leader behaves in a certain situation may not be appropriate in
some other situations, and this led to the evolution of the 3-D leadership model.

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