NORTHERN LUZON ADVENTIST COLLEGE

DEPARTMENT OF BUSINESS EDUCATION

COURSE: HUMAN BEHAVIOR IN ORGANIZATION

LESSON 8: LEADERSHIP

I. Introduction

Leadership is a very important, if not the most important factor in the success of
organizations. This has been pointed out time and again throughout history by leaders
like Abraham Lincoln, Julius Caesar, Napoleon Bonaparte, Oliver Cromwell, and many
others. In business, the exemplary leadership abilities of Walt Disney, Bill Gates, Akito
Morita, John D. Rockefeller, and many others are proofs that with the right kind of
leadership, organizations can succeed.

II. Learning Outcomes

After reading this chapter, the students should be able to:

 Explain the importance of leadership

 Discuss theories about leadership
 Identify the kinds of leadership

III. Integration of Faith:

―But select capable men from all the people—men who fear God, trustworthy
men who hate dishonest gain — and appoint them as officials over thousands,
hundreds, fifties and tens.‖ Exodus 18:21

IV. Topics for Reading:

Book/Reference: Human Behavior in Organization
Pinoy Human Behavior in Organization
 LEADERSHIP
Leadership is a very important, if not the most important factor in the success of
organizations. This has been pointed out time and again throughout history by leaders like
Abraham Lincoln, Julius Caesar, Napoleon Bonaparte, Oliver Cromwell, and many others. In
business, the exemplary leadership abilities of Walt Disney, Bill Gates, Akito Morita, John D.
Rockefeller, and many others are proofs that with the right kind of leadership, organizations
can succeed.

WHAT IS LEADERSHIP
Leadership may be defined as the process of guiding and directing the behavior of
people in the organization in order to achieve certain objectives.

In a competitive situation, it is often leadership that spells the difference between

success and failure. Even when the organization is short of material resources, the right
leadership can sometimes get people so inspired that they are able to perform credibly.

Leadership is that element that convinces members of an organization to behave in

such a manner that will facilitate the accomplishment of the goals of the organization.

The Difference between Leadership and Management

Leading is one of the functions of management. The other functions consist of planning,
organizing, directing, and controlling. Without sufficient leadership, these other functions can
be rendered useless because people will not be motivated to put them in operation.

Managers and leaders are different in the following ways:

1. Managers are rational problem solvers, while leaders are intuitive, more visionary;
2. Managers perform other administrative function such as planning, organizing, decision-
making, and communicating;
3. Leaders are primarily concerned with results; managers are concerned with the
efficiency of results; and
4. Leaders obtain their power from below; managers obtain theirs from above.

KINDS OF LEADERSHIP
Leadership are two kinds:
1. Formal; and
2. Informal.

Formal Leadership
Formal leadership refers to the process of influencing other to pursue official objectives.
Formal leaders are vested with moral authority and as such, they generally have a
measure of legitimate power. They rely on expedient combination of reward, coercive,
referent, and expert power.
 Informal Leadership
Informal leadership refers to the process of influencing others to pursue unofficial
objectives. Informal leaders lack formal authority. Like formal leaders. They rely on
expedient combination of reward, coercive, referent, and expert power.

Informal leaders who are satisfied with their jobs are valuable assets of the organization.
When they are not satisfied, they become liabilities. Their power to motivate people
can be used to convince employees to cause harm to the organization.

POWER AND THE LEADER

The main concern of a leader is to influence people to behave as he wants them to.
The leader, however, can influence only if he possess power, and this emanates only from
either the group or the leader.

The bases of power that the leader may use to convince subordinates may be classified as
either:
1. Positional power; or
2. Personal power.

Position Power

Position power is that power derived as a consequence of the leader’s position. It

consists of the following types:
1. Legitimate power
2. Reward power
3. Coercive power

Legitimate Power. Also referred to as authority, this power emanates from a

person’s position in the organization. A manager, for instance, is given the right
by the organization to influence or command certain individuals. Orders from
him are followed by the subordinates because he has the legitimate power to
command certain subordinates in lower positions. When an order is not followed,
the offending subordinate is subjected to disciplinary action.

The legitimate power vested in a person is characterized by the following:

1. It is invested in a person’s position. Even if the person occupying the
position is replace, the power remains and the new occupant can
exercise it.
2. It is accepted by subordinates. The persons working under the supervision
of a manager believes that the manager has the right to tell them what to
do and what to expect from them.
3. Authority is used vertically. The flow of authority is from the top level down
to the lower levels.
 Reward Power. This power emanates from one’s ability to grant rewards to those
who comply with a command or request. The leader’s capacity to provide
promotions, money, praise, and other rewards influences the behavior of
subordinates.

Coercive Power. This power arises from the expectation of subordinates that they
will be punished if they do not conform to the wishes of the leader. The
punishment can take the form of dismissal, suspension, and transfer to a less
desirable task, and the like. This power uses fear as a motivator, which can be a
powerful force in inducing short-term action. The use of this power, however, has
overall negative impact on the individual affected.

Coercive power is reduced by the presence of unions and organizational

policies on employees treatment.

Personal Power

The leader’s personal power results from his personal characteristics. It may be any or
both of the following:
1. Expert power
2. Referent power

Expert power. An expert who possess and can dispense valued information
generally exercise expert power over those in need of such information. Doctors,
lawyers, and computer specialists are examples of persons who may have
expert power.

The expert power of the leader depends on his education, training, and
experience.

Referent power. This power refers to the ability of leaders to develop followers
from the strength of their own personalities. Leaders who possess this power have
a personal magnetism, an air of confidence, and a passionate belief in
objectives that attract and hold followers.

People follow because their emotions push them to do so. Some religious and
political leaders like Nelson Mandela of Africa, the late Mother Teresa, and the
late Michael Jackson are example of those who have or had referent power.
THEORIES ABOUT LEADERSHIP
There are various theories about leadership and they may be regarded as attempts to
explain the various factors that may be identified with successful leadership.

Through the years, eminent researchers have forwarded their own theories about
leadership. Their outputs may be classified as follows:

1. Trait theories
2. Behavioral theories
3. Contingency theories

Trait Theories
Trait theories of leadership consider leaders to possess common traits. Early researchers
on leadership placed emphasis on traits and had resulted in the determination of a
wide span of personal attributes such as physical appearance, intelligence, and self-
confidence.

It was found out that the average person who occupies a position of leadership
exceed the average number of his group to some degree on the following factors:
1. Sociability
2. Persistence
3. Initiative
4. Knowing how to get things done
5. Self-confidence
6. Alertness to and insight into situations
7. Cooperativeness
8. Popularity
9. Adaptability
10. Verbal facility

Later, researchers, guided by their findings, drafted a more general view of what good
leaders have in common. These consist of the following:
1. Extraversion – individuals who like being around people and are able to assert
themselves.
2. Conscientiousness – individuals who are disciplined and keep commitments that
they make.
3. Openness – individuals who are creative and flexible.
4. Emotional intelligence – individuals who are able to understand and manage
their personal feelings and emotions, as well as their emotions towards other
individuals, events, and objects.

A single statement that describes what trait theories assume is that ―leaders are born
than made.‖
Behavioral Theories
After some years, trait theories were found to be inadequate in explaining the basis for
effective leadership. As a result, researchers shifted their interest to behaviors exhibited
by specific leaders.

What the researchers developed came to be known as behavioral theories of

leadership. These theories propose that specific behaviors differentiate leaders from
non-leaders.

Four theories related to leadership will be presented in the section. These are as follows:
1. The Ohio State University studies
2. The University of Michigan studies
3. The Yukl studies
4. The Managerial Grid

Ohio State University Studies. An important leadership research program was started at
Ohio State University during the late 1940s. The researchers sought to identify
independent dimensions of leader behavior.

A questionnaire was administered in both industrial and military settings to measure

subordinates’ perception of their superiors’ leadership behavior. Beginning with over a
thousand dimensions, they eventually narrowed the list to two categories that
substantially accounted for most of the leadership behavior described by employees.

The two dimensions were referred to as:

1. Initiating structure; and
2. Consideration.

Initiating structure refers to the extent to which a leader is likely to define his or her role
and those of employees in the search for goal attainment. The leader with a high
initiating structure tendency focuses on goals and results, so he or she might be seen as
similar to a production-oriented supervisor.

Structure is initiated by activities such as assigning specific tasks, specifying procedures

to be followed, scheduling work, and clarifying expectations.

Consideration describes the degree to which the leader creates an environment of

emotional support, warmth, friendliness, and trust. The leader’s behavior would be one
that is friendly and approachable, looking out for the personal welfare of the group,
keeping the group informed about new developments, and doing small favors for
group members.

The findings of the Ohio studies indicate that successful leaders are those that are
engaged not in one of the two behaviors but in both, i.e., initiating and consideration.
University of Michigan Studies. At about the same time that the Ohio State University
was engaged in a research program on leadership, the researchers at the University of
Michigan were also making attempts to locate behavioral characteristics of leaders
that appeared to be related to measures of performance effectiveness.

The effectiveness criteria used are as follows:

1. Productivity for work hour or other similar measures of the organization’s success
in achieving its production goals;
2. Job satisfaction of members of the organization;
3. Turnover, absenteeism, and grievance rates;
4. Costs;
5. Scrap loss; and
6. Employee and managerial motivation.

In the course of their studies, the researchers identified two distinct styles of leadership:
1. Job-centered; and
2. Employee-centered.

Job-centered managers set tight work standards, organized tasks carefully, prescribed
the work methods to be followed, and supervised closely.

Employee-centered managers encouraged group members to participate in goal

setting and other work decisions, and helped to ensure high performance by
endangering trust and mutual respect.

The researchers found out that the most productive work groups tended to have
leaders who were employee-centered rather than job-centered.

Yukl Studies. Other researchers like Gary M. Yukl made one step further than the
Michigan and Ohio State studies. He and his colleagues tried to seek answers to
specific behavior of leaders for varying situations. They were able to isolate nineteen
behaviors consisting of the following:
1. Performance emphasis. The extent, to which a leader emphasizes the
importance of subordinate performance, tries to improve productivity and
efficiency, tries to keep subordinates working up to their capacity, and checks
on their performance.
2. Consideration. The extent to which a leader is friendly, supportive, and
considerate in his or her behavior toward subordinates and tries to be fair and
objective.
3. Praise-Recognition. The extent to which a leader provides praise and recognition
to subordinates with effective performance, shows appreciation for their special
efforts and contributions, and make sure they get credit for their helpful ideas
and suggestions.
4. Decision-Participation. The extent to which a leader consults with subordinates
and otherwise allows them to influence his or her decisions.
5. Training-Coaching. The extent to which a leader determines training needs for
subordinates and provides any necessary training and coaching.
 6. Problem Solving. The extent to which a leader takes the initiative in proposing
solutions to serious work-related problems and acts decisively to deal with such
problems when a prompt solution is needed.
7. Work Facilitation. The extent to which a leader obtains for subordinates any
necessary supplies, equipment, support services, or other resources, eliminates
problems in the work environment, and removes other obstacles that interfere
with the work.
8. Inspiration
9. Structuring reward contingencies
10. Autonomy-Delegation
11. Role Clarification
12. Goal Setting
13. Information Dissemination
14. Planning
15. Coordinating
16. Representation
17. Interaction Facilitation
18. Conflict Management
19. Criticism-Discipline

The Managerial Grid. The managerial grid is a graphic portrayal of a two dimensional
view of leadership developed by Robert Blake and Jane Mouton. It is an approach to
understanding a manager’s concern for production and concern for people. As such,
the grid was structured to contain two underlying dimensions labeled Concern for
Production and Concern for People. These attitudinal dimensions are coupled through
an interaction process.

Contingency Theories
The trait and behavioral theories failed to point out that leadership situations are not
similar, and it is easy to presume that there is no single leadership style that will fit all
situations. This line of thinking led researchers to engage in research activities that were
later called contingency. The individual researchers share a fundamental assumption:
successful leadership occurs when the leader’s style matches the situation.
The various theories related to the situational approach to leadership consist of the
following:

1. Continuum of Leadership Behavior. The first contingency model of leadership was

developed by Robert Tannenbaum and Warren H. Schmidt and is referred to as
the continuum of leadership behavior. This model consists of seven alternative
ways for managers to approach decision making, depending on how much
participation they want to allow subordinates in the decision making process.

The leader’s choices depend on three factors:

a. Forces in the manager;
b. Forces in subordinates; and
c. Forces in the situation.
 Under this approach, the effective leaders are flexible, able to select leadership
behaviors needed in a given time and place.

Forces in the manager consist of: the manager’s background, knowledge,

values, and experience. How the manager will lead will primarily be influenced
by these forces. For example, if the manager worked for ten years as a
subordinate of a well-performing leader who adapted the participative style, he
will tend to be a participative leader himself.

In choosing an appropriate leadership style, the manager must also consider the
forces in subordinates.

The leadership style of greater participation and freedom can be exercised by

the manager if the subordinates:

a. Are craving for independence and freedom of action;

b. Want to have decision making responsibility;
c. Identify with the organization’s goals;
d. Are knowledgeable and experienced enough to deal with the problem
efficiently;
e. Have experience with previous managers that lead them to expect
participative management.

When the above conditions are absent, managers will have to lean toward the
authoritarian style.

Lastly, the manager’s choice of leadership style must reckon with situational
forces such as: the organization’s preferred style, the specific work group, the
nature of the group’s tasks, the pressure of time, and environmental factors.

There are instances when the organization’s top management favors certain
leadership style, and most managers will have to move towards it.

There are groups that are more likely to perform well in an environment of
participation rather than its opposite, the authoritarian form. An example is that
group of accountants working in an accounting firm serving clients.

The nature of the problem and time pressures are examples of situational factors
that may influence the choice of leadership style. For example, the team leader
of the emergency crew of a large hospital has no option but to adapt an
authoritarian leadership style.

2. The Contingency Leadership Model. This is a leadership model developed by

Fred Fiedler which proposes that effective group performance depends on the
proper match between the leader’s style and the degree to which the situation
favors the leader.
Fiedler measures leadership style through the use of the Least Preferred Coworker
(LPC) Scale which is actually an instrument that assesses the degree of positive or
negative feelings held by a person toward someone with whom he or she least
prefers to work. Low scores on the LPC is a reflection of the leader who is task-
oriented, or controlling, and with a structuring leadership style. High scores reflect
a leadership style that is relationship-oriented, or one that is passive and
considerate.

To determine how favorable the leadership environment is, Fiedler maintains that
it will depend on three factors:
a. Leader-member relations
b. Task structure
c. Position power

Leader-member relations refer to the degree of confidence, trust, and respect

the followers have in their leader.

Task structure refers to the extent to which the tasks the followers are engaged in
are structured. Tasks structure is high when the task is clearly specified and known
as to:
a. What followers are supposed to do;
b. How they will do it;
c. When and in what sequence it is to be done; and
d. What decision options they have.

Task structure is low when the task is unclear, ambiguous, or unspecifiable.

Position power refers to the power inherent in the leadership position. Generally,
greater authority means greater position power. The leader with a strong position
power will find it easier to perform his job. Some positions, such as the presidency
of a big manufacturing firm, carry a great deal of power and authority. The
president of a civic organization, on the other hand, has less power over
members. Thus, leaders with high position power can easily influence
subordinates, while those with less position power find it difficult to perform their
tasks.

Together, the three factors determine how favorable the situation is for the
leader. The most favorable situation exists when there is good leader-member
relations, high task structure, and strong position power. The least favorable
situation happens when there are poor relations, low degree of structure, and
weak position power.

After identifying the leadership style of the manager or leader, and after defining
the situation, the next move is to match the situation to the leader. Fiedler
believed that task-oriented leaders tend to perform better in situations that are
either highly favorable or highly unfavorable. On the other hand, relationship-
oriented leaders perform best when the situation is moderately favorable or
moderately unfavorable. Thus, if a leader is moderately liked and possesses some
 power, and the job tasks for subordinates are somewhat vague, the leadership
style needed to achieve the best results is relationship-oriented.

3. The Path-goal Method. This is a leadership model developed by Robert House

and Terrence Mitchell that states that the leader’s job is to create a work
environment through structure, support, and rewards that helps employees
reach the organization’s goals.

The two major roles are involved are:

a. The creation of a good orientation; and
b. The improvement of the path toward the goals so that they will be attained.

House and Mitchell identified four leadership behaviors:

a. The directive Leader. This is the type of leader who lets followers know what is
expected of them, schedules work to be done, and gives specific guidance
as to how to accomplish tasks.
b. The supportive leader. This is the type of leader who is friendly and shows
concern for the needs of followers.
c. The participative leader. This is the leader who consults with followers and
uses their suggestions before making a decision.
d. The achievement-oriented leader. This is the leader who sets challenging
goals and expects followers to perform at their highest level.

According to House, leaders are flexible and any of them can display any or all
of these behaviors depending on the circumstances.

4. The Hershey-Blanchard Situational Leadership Theory. Developed by Paul

Hershey and Kenneth Blanchard, the Situational Leadership Theory (SLT) suggests
that a leader’s style should be determined by matching it with the maturity level
(or readiness) of each subordinate.

The leader must know follower’s readiness and then use a leadership style that
fits the level. Readiness refers to the ability and willingness of subordinates to take
responsibility for directing their own behavior.

Readiness consists of two concerns:

a. Job readiness (or task competence); and
b. Psychological readiness (or commitment).

A person who has high task competence has the knowledge and abilities to
perform the job without a manager structuring or directing the work. A person
who has high commitment has the self-motivation and desire to do high quality
work.

Based on the foregoing, subordinates may be classified as follows:

a. Those with low competence and low commitment (D-1);
b. Those with low competence but with high commitment (D-2);
c. Those with high competence but with low commitment (D-3);
 d. Those with high competence and high commitment (D-4).

To match the various states of readiness by subordinates, Hershey and Blanchard

devised four leadership styles available to leaders:

a. A ―directing‖ style that is best for low follower readiness. The direction
provided by this style defines role for people who are unable and unwilling to
take responsibility themselves; it eliminates any insecurity about the task that
must be done.
b. A ―coaching‖ style that is best for low to moderate follower readiness. This
style offers both task direction and support for people who are unable but
willing to take task responsibility; it involves combining directive approach
with explanation and reinforcement in order to maintain enthusiasm.
c. A ―supporting‖ style that is best for moderate to high follower readiness. Able
but unwilling followers require supportive behavior in order to increase their
motivation; by allowing followers to share in decision making, this style help
enhance the desire to perform a task.
d. A ―delegating‖ style that is best for high readiness. This style provides little in
terms of direction and support for the task at hand; it allows able and willing
followers to take responsibility for what needs to be done.

5. The Leader-Member Exchange Approach. This refers to the leadership theory

developed by Geroge Graen and his associates which recognize that leaders
develop unique working relationships with each group member. Leaders and
their followers exchange information, resources, and role expectations that
determine the quality of their interpersonal relationships.

The effect of leader-member relations come into view when the leader,
knowingly or unknowingly, creates in-groups and out-groups within the
organization. Subordinates with in-group status will have higher performance
ratings, less turnover, and greater job satisfaction.

In-group members have attitudes and values similar to those of the leader and
interact frequently with the leader. They are given additional rewards,
responsibility, and trust in exchange for loyalty and performance. They become
part of a smoothly functioning team headed by the formal leader.

Out-group members are treated in accordance with a more formal

understanding of supervisor-subordinate relations. They have less in common with
the leader and operate in a way that is somewhat detached from the leader.
They are less likely to experience good teamwork.

The quality of the relationship between the leader and each group member has
important job consequences. Good relationships can lead to important effects
such as higher productivity and satisfaction, improved motivation, and smoother
delegation.
6. Normative Decision Model. Also known as ―the leader-participation model‖ and
―decision making model of leadership‖, the normative decision model was
developed by Victor and Philip Yetton. Some years later, the model was revised
by Vroom and Arthur Jago to make it more accurate.

The model views leadership as a decision making process in which the leader
examines certain factors within the situation to determine making style will be
most effective.

Five decision making styles are presented by the normative model, each
reflecting a different degree of participation by group members:
a. Autocratic I - the leader individually solves the problem using the information
already available.
b. Autocratic II – the leader obtains data from subordinates and then decides.
c. Consultative I – the leader explain the problem to individual subordinates and
obtains ideas from each before deciding.
d. Consultative II – the leader meets with group of subordinates to share the
problem and obtain inputs, and then decides.
e. Group II – the leader shares problem with group and facilitates a discussion of
alternatives aiming to reach a group agreement on a solution.

The normative decision model is based on the following assumptions:

a. The leader can accurately classify problems according to the criteria offered.
b. The leader is able and willing to adapt his or her leadership style to fit the
contingency condition he or she faces.
c. The leader is willing to use a rather complex model.
d. The employees will accept the legitimacy of different styles being used for
different problems, as well as the validity of the leader’s classification of the
situation at hand.

The normative model will be useful if all these assumptions are valid.

7. The Muczyk-Reimann Model. This model was developed by Jan P. Muczyk and
Bernard C. Reimann, and it suggests that ―participation‖ behavior is concerned
with the degree to which subordinates are allowed to be involved in decision
making. It is separated from ―direction‖ which is viewed as the degree of
supervision exercised in the execution of the tasks associated with carrying out
the decision.

Muczyk and Reimann propose that leaders should be allowed to adapt to

different situations. This paves the way for delegation which covers decision
making and execution.

To make delegation effective, four leadership styles are considered:

a. The directive autocrat. The leader makes decisions unilaterally and closely
supervises the activities of subordinates.
b. The permissive autocrat. This leader makes decision unilaterally but allows
subordinates a great deal of latitude in execution.
c. The directive democrat. This leader allows high participation but closely
supervises subordinate activity.
d. The permissive democrat. This leader allows high participation in decision
making and in execution.

Muczyk and Reimann maintain that there are situations that would be right for
each of the leadership styles they presented. For instance, the directive autocrat
would be that appropriate leader for subordinates who are less skilled, less
mature psychologically, and given limited time to perform.