Written by Karen Leong 2/5/2007 Page 1

Leadership and Decision Making

The nature of leadership.
Early approaches to leadership.
The situational approach to leadership.
Leadership through the eyes of followers.
Special issues in leadership.
The changing nature of leadership.
Emerging issues in leadership.
Leadership, management, and decision making.
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The Nature of Leadership
Leadership
The process and behaviors used by someone, such as a manager,
to motivate, inspire, and influence the behaviors of others.
A person can be a manager, a leader, both, or neither.
Activity Management Leadership
Creating an Agenda Planning and budgeting Establishing direction
Developing a Human
Network for Achieving
the Agenda
Organizing and staffing Aligning people
Executing Plans Controlling and problem solving Motivating and inspiring
Outcomes Produces a degree of
predictability and order and has
the potential to consistently
produce major results expected
by various stakeholders.
Produce change, often to a
dramatic degree, and has the
potential to produce extremely
useful change.

Distinctions between management & leadership
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Early Approaches to Leadership
- Trait () approaches to leadership
Trait approach to leadership
Focused on identifying the essential traits that distinguished
leaders.
Early studies:
Intelligence, dominance (), self-confidence, energy, activity (versus
passivity), knowledge about the job.
Body shape, astrological sign, handwriting patterns.
Recent studies:
Emotional intelligence, mental intelligence, drive (), motivation, honesty
and integrity (), self-confidence, knowledge of the business, and charisma
().
Appearance, height.
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Early Approaches to Leadership
- Behavioral approaches to leadership
Behavioral approach to leadership
Focused on determining what behaviors are employed by leaders.
2 basic forms of leader behavior:
Task-focused leader behavior
Leader behavior focusing on how tasks should be performed in order to meet
certain goals and to achieve certain performance standards.
Employee-focused leader behavior
Leader behavior focusing on satisfaction, motivation, and well-being () of
employees.
Leaders should try to engage in a healthy dose of both behaviors
performance + job satisfaction & motivation.
Different situation Different combinations of leader behavior
Situational theories.
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Situational approach to leadership
Assumes that appropriate leader behavior varies from one situation
to another.
The Situational Approach to Leadership
The leadership continuum
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Each point on the continuum is influenced by
Leadership characteristics
The managers value system, confidence in subordinates, personal inclinations (
), feelings of security.
Subordinate characteristics
The subordinates need for independence, readiness to assume responsibility,
tolerance for ambiguity, interest in the problem, understanding of goals,
knowledge, experience, expectations.
Situational characteristics
The type of organization, group effectiveness, the problem itself, time pressures.
The Situational Approach to Leadership
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Transformational leadership
The set of abilities that allows a leader to recognize the need for
change, to create a vision to guide that change, and to execute the
change effectively.
E.g. Creating a new work team, redefining the organizations culture.
Transactional leadership
Comparable to management, it involves routine, regimented ()
activities.
E.g. Assigning work, evaluating performance, making decisions.
Transformational Transactional Company success.
Leadership Through the Eyes of Followers
- Transformational leadership
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Charismatic leadership
Type of influence based on the leaders personal charisma.
Leadership Through the Eyes of Followers
- Charismatic () leadership
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Special Issues in Leadership
- Leadership substitutes
Leadership
substitutes
Individual, task,
and organizational
characteristics that
tend to outweigh
the need for a
leader to initiate or
direct employee
performance.
Group performance norms
High level of group cohesiveness
Group interdependence
Group
Factors
Explicit plans and goals
Rigid rules and procedures
Rigid reward system not tied to performance
Physical distance between supervisor & subordinate
Organization
Factors
Structured/automated
Highly controlled
Intrinsically () satisfying
Embedded feedback
Job
Factors
Individual professionalism
Individual ability, knowledge, and motivation
Individual experience and training
Indifference () to rewards
Individual
Factors
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Special Issues in Leadership
- Leadership neutralizers
Leadership neutralizers
Factors that may render leader behaviors ineffective.
Group factors
E.g. A relatively new & inexperienced leader is assigned to a work group
composed of very experienced employees with long-standing performance
norms and a high level of group cohesiveness.
Case 1: Norms & Cohesiveness = Very strong Leader can do nothing to change
things.
Case 2: Norms is acceptable but not high performance Leader is powerless to
improve things (because the group is so cohesive).
Case 3: Norms is very high performance Even a bungling () & ineffective
leader cannot cause any damage.
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Special Issues in Leadership
- Leadership neutralizers
Job factors
E.g. Employees working on a moving assembly line.
Employees can only work at the pace of the moving line Performance quantity
is constrained by the speed of the line.
Performance quality may also be constrained (e.g. by simple tasks and/or tight
quality control procedures).
Leader may be powerless to influence individual work behaviors.
Organizational factors
E.g. A new leader is accustomed to using merit pay increases as a way to
motivate people.
Case 1: In his/her new job, pay increases are dictated by union contracts and are
based primarily on employee seniority () & costs-of-living.
Case 2: An employee is already at the top of the pay grade for his/her job.
The leaders previous approach to motivating people has been neutralized.
New approaches will have to be identified.
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The Changing Nature of Leadership
- Leaders as coaches
Organization Less hierarchical Using teams.
Old-fashioned command-and-control mentality Motivate &
empower individuals to work independently.
As a coach, leaders should
Select team members & other new employees,
Provide some general direction,
Train & develop the team & the skills of its members,
Help the team get the information & other resources it needs.
Resolve conflict among team members & mediate other disputes that arise.
Communicate with coaches from different teams Link the activities &
functions of their respective team.
Keep a low profile & let the group gets its work done with little / no direct
oversight from the leader.
Act as a mentor
The role of helping a less-experienced person learn the ropes () and to
better prepare him/her to advance within the organization.
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The no. of women advancing to higher levels is growing.
E.g. Do women & men tend to lead differently?
Women have a tendency to be slightly more democratic in making
decisions; whereas men have a tendency to be somewhat more
autocratic ().
Women tend to have stronger interpersonal skills, and are able to better
understand how to effectively involve others in making decisions. Men have
weaker interpersonal skills and have a tendency to rely on their own judgment.
Women may encounter more stereotypic () resistance to their occupying
senior roles. They may actively work to involve others in making decisions so
as to help minimize any hostility () / conflict.
The Changing Nature of Leadership
- Gender and leadership
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The Changing Nature of Leadership
- Cross-cultural leadership
White male leaders African Americans, Asian Americans,
etc..
E.g. A Japanese firm sends an executive to head up the firms
operation in the U.S..
He will need to become acclimated () to the cultural differences
that exist between the 2 countries and consider changing his/her
leadership style.
Japan: collectivism (group before individual).
The U.S.: individualism (individual before group).
He have to recognize the importance of individual contributions &
rewards and the differences in individual & group roles that exist in
Japanese & U.S. businesses.
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Emerging Issues in Leadership
- Strategic leadership
Strategic leadership
Leaders ability to understand the complexities of both the
organization and its environment and to lead change in the
organization so as to enhance its competitiveness.
Leadership at the top management.
A strategic leader needs to have
A thorough & complete understanding of the organization its history, its
culture, its strengths, and its weaknesses.
A firm grasp of the organizations external environment.
Includes current business & economic conditions & circumstances + significant
trends & issues on the horizon ().
Recognize the firms current strategic advantages & shortcomings.
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Emerging Issues in Leadership
- Ethical leadership
Ethical leadership
Leader behaviors that reflect high ethical standards.
To maintain high ethical standards for their own conduct,
To unfailingly exhibit ethical behavior,
To hold others in their organizations to the same standards.
Now, high standards of ethical conduct are being held up as a
prerequisite for effective leadership.
The behaviors of top leaders are being scrutinized ().
When hiring new leaders: Look more closely at the backgrounds the
candidates.
More accountable, for both their actions & the consequences of
those actions.
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Emerging Issues in Leadership
- Virtual leadership
Virtual leadership
Leadership in settings where leaders and followers interact
electronically rather than in face-to-face settings.
E.g. People telecommuting from a home office 1 / 2 days a week.
E.g. People lives & works far from company headquarters & seeing
one another in person only very infrequently.
By telephone & e-mail.
Leaders need to work harder at creating & maintaining relationships
with their employees that go beyond words on a computer screen.
Add a few personal words in an e-mail to convey appreciation, reinforcement
(), or constructive feedback.
Take advantage of every opportunity whenever they are in face-to-face
situations.
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Leadership, Management, and Decision Making
- Rational decision making
Steps in the
rational
decision-
making
process.
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1. Recognizing & defining the decision situation
Recognize that a decision is necessary.
There must be some stimulus / spark to initiate the process.
E.g. Equipment malfunctions Decide whether to repair it / to replace it.
E.g. During an emergency Decide how best to protect everyones safety.
Define precisely what the problemis.
Develop a complete understanding of the problem, its causes, and its
relationship to other factors.
From careful analysis & thoughtful consideration of the situation.
2. Identifying alternatives
Obvious, standard alternatives + Creative, innovative alternatives.
The more important the decision The more attention is directed
to developing alternatives.
E.g. If the decision involves a multimillion-dollar relocation A great deal of
time & expertise will be devoted to identifying the best locations.
Leadership, Management, and Decision Making
- Rational decision making
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Various constraints limit alternatives:
Legal restrictions, moral & ethical norms, constraints imposed by the power
& authority of the manager, available technology, economic considerations,
unoffical social norms.
3. Evaluating alternatives
Thoroughly evaluate all the alternatives chances to be success.
E.g. A small, struggling firm + An alternative requiring a huge financial outlay
Out of the question.
E.g. Legal barriers Alternatives not feasible.
E.g. Limited human, material, information resources Impractical.
4. Selecting the best alternatives
Develop subject estimates & weights for choosing an alternative.
Can find multiple acceptable alternatives.
Leadership, Management, and Decision Making
- Rational decision making
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5. Implementing the chosen alternative
Put it into effort.
E.g. For an acquisition Decide how to integrate all the activities of the new
business, including purchasing, human resource practices, and distribution,
into an ongoing organizational framework.
Peoples resistance to change when implementing decisions.
Reasons: Insecurity, inconvenience, fear of the unknown.
Unanticipated consequences are still likely.
Unexpected cost increases, a less-than-perfect fit with existing organizational
subsystems, unpredicted effects on cash flow / operating expenses.
6. Following up & evaluating the results
Ensure that the chosen alternative has served its original purpose.
If not to be working Can respond in several ways.
E.g. Adopt another previously identified alternative.
E.g. The situation was not correctly defined to begin with Start all over again.
Leadership, Management, and Decision Making
- Rational decision making
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Political forces in decision making
Coalition ()
An informal alliance of individuals or groups formed to achieve a common
goal.
E.g. Coalitions of stockholders frequently band together to force a board of
directors to make a certain decision.
Intuition
An innate () belief about something, often without conscious
consideration.
Based on years of experience & practice in making decisions in
similar situation.
Escalation of commitment
Condition in which a decision maker becomes so committed to a
course of action that she or he stays with it even when it appears to
have been wrong.
Leadership, Management, and Decision Making
- Behavioral aspects of decision making
Written by Karen Leong 2/5/2007 Page 23
E.g. When people buy stock in a company, they sometimes refuse to
sell it even after repeated drops in price.
They choose a course of action buying the stock in anticipation of making a
profit.
They stay with it even in the fact of increasing losses.
Risk propensity () & decision making
Risk propensity
Extent to which a decision maker is willing to gamble when making a
decision.
Some managers are cautious about every decision they make Conservative.
Others are extremely aggressive Willing to take risks.
Rely heavily on intuition, reach decisions quickly, risk big investments on their
decisions.
More likely than their conservative counterparts to achieve big successes with their
decisions.
More likely to incur greater losses.
Leadership, Management, and Decision Making
- Behavioral aspects of decision making