LEADERSHIP THEORIES

GREAT MAN THEORY (1840s)

The Leadership Theories – Great Man theory evolved around the mid 19th century. Even
though no one was able to identify with any scientific certainty, which human characteristic
or combination of, were responsible for identifying great leaders. Everyone recognized that
just as the name suggests; only a man could have the characteristic (s) of a great leader.

The Great Man theory assumes that the traits of leadership are intrinsic. That simply means
that great leaders are born… they are not made. This theory sees great leaders as those who
are destined by birth to become a leader. Furthermore, the belief was that great leaders will
rise when confronted with the appropriate situation. The theory was popularized by Thomas
Carlyle, a writer and teacher. Just like him, the Great Man theory was inspired by the study of
influential heroes. In his book “On Heroes, Hero-Worship, and the Heroic in History”, he
compared a wide array of heroes.
In 1860, Herbert Spencer, an English philosopher disputed the great man theory by affirming
that these heroes are simply the product of their times and their actions the results of social
conditions.

TRAIT LEADERSHIP THEORIES (1930’s – 1940’s)

Trait theory seeks to determine universal personal characteristics of effective leaders.
Numerous physical, mental, and personality traits were researched during the period from
1930 to 1950. Leaders were characterized by a wide variety of traits ranging all the way from
neatness to nobility. In the late 1940s, Ralph Stogdill reported on the basis of at least fifteen
studies that leaders possess intelligence, scholarship, dependability in exercising
responsibilities, activity and social participation and socio-economic status. He also found
traits such as sociability, persistence, initiative, knowing how to get things done, self
confidence, alertness, insight, cooperativeness, popularity, adaptability and verbal facility in
ten leadership studies. Persons who are leaders are presumed to display better judgment and
engage themselves in social activities. The study of the lives of successful leaders reveals that
they possessed many of these traits.

Trait studies have not produced clear results because they do not consider the
whole leadership environment. Personal traits are only a part of the whole environment.
Though a certain trait exists, it will not become active until a certain situation calls for it.
Thus, there is no sure connection between traits and leadership acts. Leadership is always
related to a particular situation. A person may prove successful in one situation due to some
traits, but may fail in another situation. Another shortcoming of the trait theory is the failure
of its supporters to formulate a common list of traits found in all successful leaders. For
instance, good health is desirable in many leadership situations, but there are also successful
leaders in other situations that do not enjoy good health.
BEHAVIOURAL LEADERSHIP THEORIES (1940’S – 1950’S)
Success in leadership depends more on what the leader does than on his traits. The
behavioural approach is based on the premise that effective leadership is the result of
effective role behavior. There is a dynamic interaction between the leader and the followers,
and leaders produce different styles while dealing with the workers.

OHIO STUDIES
Many behavioural scientists have attempted to identify appropriate behavioural patterns of
leadership styles. Some of the important contributions in this regard include Ohio State
Studies, Michigan University Studies and Managerial Grid of Blake and Mouton. The
behavioural scientists don’t concentrate on the traits of leaders; rather they study the activities
of leaders to identify their behavioural patterns.
CONTINGENCY THEORY (1960’s)
The contingency leadership theory argues that there is no single way of leading and that
every leadership style should be based on certain situations, which signifies that there are
certain people who perform at the maximum level in certain places; but at minimal
performance when taken out of their element.

To a certain extent contingency leadership theories are extensions of the trait theory, in the
sense that human traits are related to the situation in which the leaders exercise their
leadership. It is generally accepted within the contingency theories that leader are more likely
to express their leadership when they feel that their followers will be responsive.
TRANSACTIONAL LEADERSHIP THEORY (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.

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 THEORY (1970’s)

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.

SITUATIONAL THEORY
This theory advocates that leadership is strongly affected by the situation from which a leader
emerges and in which he works. It is based on the assumptions that there exists an interaction
between a group and its leader and that people tend to follow the person (known as leader)
who is capable of fulfilling their aspirations. Thus, leader is a means of achieving the goals of
the group and the members. The leader recognizes the needs of the situation and then acts
accordingly.

The focus in the situational approach to leadership is on observed behavior and not on any
hypothetical inborn or acquired ability or potential for leadership. In other words, the
emphasis is on the behavior of the leaders and their followers and the type of situation. In
other words, a person becomes a leader not only because of his personal attributes, but also
because of various

LEADERSHIP-MEMBER EXCHANGE (LMX) THEORY

Informal observation of leadership behavior suggests that leader’s action is not the same
towards all subordinates. The importance of potential differences in this respect is brought
into sharp focus by Graen’s leader-member exchange model, also known as the vertical dyad
linkage theory. The theory views leadership as consisting of a number of dyadic relationships
linking the leader with a follower. The quality of the relationship is reflected by the degree of
mutual trust, loyalty, support, respect, and obligation.

According to the theory, leaders form different kinds of relationships with various groups of
subordinates. One group, referred to as the in-group, is favored by the leader. Members of in-
group receive considerably more attention from the leader and have more access to the
organizational resources. By contrast, other subordinates fall into the out-group. These
individuals are disfavored by the leader. As such, they receive fewer valued resources from
their leaders.

Leaders distinguish between the in-group and out-group members on the basis of the
perceived similarity with respect to personal characteristics, such as age, gender, or
personality. A follower may also be granted an in-group status if the leader believes that
person to be especially competent at performing his or her job. The relationship between
leaders and followers follows three stages:

 Role taking: When a new member joins the organization, the leader assesses the talent
and abilities of the member and offers them opportunities to demonstrate their
capabilities.
 Role making: An informal and unstructured negotiation on work-related factors takes
place between the leader and the member. A member who is similar to the leader is
more likely to succeed. A betrayal by the member at this stage may result in him
being relegated to the out-group

The LMX 7 scale assesses the degree to which leaders and followers have mutual respect for
each other’s capabilities, feel a deepening sense of mutual trust, and have a sense of strong
obligation to one another. Taken together, these dimensions determine the extent to which
followers will be part of the leader’s in-group or out-group.

In-group followers tend to function as assistants or advisers and to have higher quality
personalized exchanges with the leader than do out-group followers. These exchanges
typically involve a leader’s emphasis on assignments to interesting tasks, delegation of
important responsibilities, information sharing, and participation in the leader’s decisions, as
well as special benefits, such as personal support and support and favorable work schedules.
Strengths of LMX Theory

LMX theory is an exceptional theory of leadership as unlike the other theories, it

concentrates and talks about specific relationships between the leader and each
subordinate.

LMX Theory is a robust explanatory theory.

LMX Theory focuses our attention to the significance of communication in leadership.

Communication is a medium through which leaders and subordinates develop, grow and
maintain beneficial exchanges. When this communication is accompanied by features
such as mutual trust, respect and devotion, it leads to effective leadership.

LMX Theory is very much valid and practical in it’s approach.

Criticisms of LMX Theory

LMX Theory fails to explain the particulars of how high-quality exchanges are created.

LMX Theory is objected on grounds of fairness and justice as some followers receive
special attention of leaders at workplace and other followers do not.

Implications

According to many studies conducted in this area, it has been found that leaders definitely do
support the members of the in-group and may go to the extent of inflating their ratings on
poor performance as well. This kind of a treatment is not given to the members of the out-
group. Due to the favoritism that the in-group members receive from their leaders, they are
found to perform their jobs better and develop positive attitude towards their jobs in
comparison to the members of the out-group. The job satisfaction of in-group members is
high and they perform effectively on their jobs. They tend to receive more mentoring from
their superiors which helps them in their careers. For these reasons, low attrition rate,
increased salaries, and promotion rates are associated with the in-group members in
comparison to that of the out-group members.

Transformational Leadership Theory

Creating high-performance workforce has become increasingly important and to do so
business leaders must be able to inspire organizational members to go beyond their task
requirements. As a result, new concepts of leadership have emerged - transformational
leadership being one of them.

Transformational leadership may be found at all levels of the organization: teams,

departments, divisions, and organization as a whole. Such leaders are visionary, inspiring,
daring, risk-takers, and thoughtful thinkers. They have a charismatic appeal. But charisma
alone is insufficient for changing the way an organization operates. For bringing major
changes, transformational leaders must exhibit the following four factors:

Figure 1: Model of Transformational Leadership

Inspirational Motivation: The foundation of transformational leadership is the promotion

of consistent vision, mission, and a set of values to the members. Their vision is so
compelling that they know what they want from every interaction. Transformational
leaders guide followers by providing them with a sense of meaning and challenge. They
work enthusiastically and optimistically to foster the spirit of teamwork and
commitment.

Intellectual Stimulation: Such leaders encourage their followers to be innovative and

creative. They encourage new ideas from their followers and never criticize them
publicly for the mistakes committed by them. The leaders focus on the “what” in
problems and do not focus on the blaming part of it. They have no hesitation in
discarding an old practice set by them if it is found ineffective.

Idealized Influence: They believe in the philosophy that a leader can influence followers
only when he practices what he preaches. The leaders act as role models that followers
seek to emulate. Such leaders always win the trust and respect of their followers through
their action. They typically place their followers needs over their own, sacrifice their
personal gains for them, ad demonstrate high standards of ethical conduct. The use of
power by such leaders is aimed at influencing them to strive for the common goals of the
organization.

Individualized Consideration: Leaders act as mentors to their followers and reward them
for creativity and innovation. The followers are treated differently according to their
talents and knowledge. They are empowered to make decisions and are always provided
with the needed support to implement their decisions.
 The common examples of transformational leaders are Mahatma Gandhi and Obama.

Criticisms of Transformational Leadership Theory

 Transformational leadership makes use of impression management and therefore

lends itself to amoral self promotion by leaders
 The theory is very difficult to e trained or taught because it is a combination of many
leadership theories.
 Followers might be manipulated by leaders and there are chances that they lose more
than they gain.

Implications of Transformational Leadership Theory

The current environment characterized by uncertainty, global turbulence, and organizational

instability calls for transformational leadership to prevail at all levels of the organization. The
followers of such leaders demonstrate high levels of job satisfaction and organizational
commitment, and engage in organizational citizenship behaviors. With such a devoted
workforce, it will definitely be useful to consider making efforts towards developing ways of
transforming organization through leadership.

Criticism

1. Some business owners and managers might not be well-suited to carry out the requirements
of this leadership style. A transformational leader needs to supply a creative vision that
employees will accept regardless of the sacrifices and difficulties involved in achieving the
transformative goal. Because some followers will be slower to adopt a visionary approach,
transformative leaders constantly must persuade employees to pursue a radical plan. Leading
by example and acting as a role model is an ongoing requirement for a transformational
leader.

2. Measurement of Transformational leadership needs improvement.

3. The model of Transformational Leadership is static- Some consider Transformational

Leadership as being too static for the 21st century. Advances in technology and globalization
have also challenged the TL framework through arguing that a more dynamic form of
leadership is required for the 21st century. One such theory is Complexity Leadership, which
focuses on emergent processes within complex systems and suggests that leadership needs to
operate at all levels in a process-oriented, contextual, and interactive fashion (Marion & Uhl-
Bien, 2001). To create organisational success, leadership must be “multi-level, processual,
contextual, and interactive.” (Uhl-Bien & Marion, 2009, p631). Unlike TL, which focuses on
the leader-follower relationship, Complexity Leadership illustrates that the focus is on the
social interactions within a network and so anyone within the workplace can become a leader
through their social capital.

COMPLEXITY LEADERSHIP emphasizes the social capital in an organization

For example, a study by Hanson and Ford (2010) that used dynamic network analysis (DNA),
a quantitative complexity analysis tool, demonstrated that the core leaders in a hospital
laboratory setting were not the formal director or administrators, but rather the workers on the
front line, the customer service representatives. Complexity Leadership captures the intricacy
of social interactions that is lacking in the transformational leadership model. Other
researchers have also questioned the theoretical framework of transformational leadership
and state that a clear definition of transformational leadership is lacking (Van Knippenberg &
Sitkin, 2013)
In conclusion, the TL framework is a robust model that provides direction on how to
effectively lead in the workplace. A wide range of empirical studied have demonstrated the
effectiveness of transformational leadership behaviors. Future research needs to examine the
theoretical framework of transformational leadership so that it is geared towards future work
innovations
Transactional Leadership Theory
The transactional style of leadership was first described by Max Weber in 1947 and then by
Bernard Bass in 1981. This style is most often used by the managers. It focuses on the basic
management process of controlling, organizing, and short-term planning. The famous
examples of leaders who have used transactional technique include McCarthy and de Gaulle.

Transactional leadership involves motivating and directing followers primarily through

appealing to their own self-interest. The power of transactional leaders comes from their
formal authority and responsibility in the organization. The main goal of the follower is to
obey the instructions of the leader. The style can also be mentioned as a ‘telling style’.

The leader believes in motivating through a system of rewards and punishment. If a

subordinate does what is desired, a reward will follow, and if he does not go as per the wishes
of the leader, a punishment will follow. Here, the exchange between leader and follower
takes place to achieve routine performance goals.

These exchanges involve four dimensions:

Contingent Rewards: Transactional leaders link the goal to rewards, clarify expectations,
provide necessary resources, set mutually agreed upon goals, and provide various kinds
of rewards for successful performance. They set SMART (specific, measurable,
attainable, realistic, and timely) goals for their subordinates.

Active Management by Exception: Transactional leaders actively monitor the work of

their subordinates, watch for deviations from rules and standards and taking corrective
action to prevent mistakes.

Passive Management by Exception: Transactional leaders intervene only when standards

are not met or when the performance is not as per the expectations. They may even use
punishment as a response to unacceptable performance.

Laissez-faire: The leader provides an environment where the subordinates get many
opportunities to make decisions. The leader himself abdicates responsibilities and avoids
making decisions and therefore the group often lacks direction.

Assumptions of Transactional Theory

 Employees are motivated by reward and punishment.

 The subordinates have to obey the orders of the superior.
  The subordinates are not self-motivated. They have to be closely monitored and
controlled to get the work done from them.

Implications of Transactional Theory

The transactional leaders overemphasize detailed and short-term goals, and standard rules and
procedures. They do not make an effort to enhance followers’ creativity and generation of
new ideas. This kind of a leadership style may work well where the organizational problems
are simple and clearly defined. Such leaders tend to not reward or ignore ideas that do not fit
with existing plans and goals.

The transactional leaders are found to be quite effective in guiding efficiency decisions which
are aimed at cutting costs and improving productivity. The transactional leaders tend to be
highly directive and action oriented and their relationship with the followers tends to be
transitory and not based on emotional bonds.

The theory assumes that subordinates can be motivated by simple rewards. The only
‘transaction’ between the leader and the followers is the money which the followers receive
for their compliance and effort.

Difference between Transactional and Transformational Leaders

Transactional leadership Transformational Leadership

Leadership is responsive Leadership is proactive

Works within the organizational culture Work to change the organizational culture by
implementing new ideas

Transactional leaders make employees Transformational leaders motivate and empower

achieve organizational objectives employees to achieve company’s objectives by
through rewards and punishment appealing to higher ideals and moral values

Motivates followers by appealing to Motivates followers by encouraging them to

their own self-interest transcend their own interests for those of the group
or unit

Conclusion

The transactional style of leadership is viewed as insufficient, but not bad, in developing the
maximum leadership potential. It forms as the basis for more mature interactions but care
should be taken by leaders not to practice it exclusively, otherwise it will lead to the creation
of an environment permeated by position, power, perks, and politics.

House’s Path Goal Theory

The theory was developed by Robert House and has its roots in the expectancy theory of
motivation. The theory is based on the premise that an employee’s perception of expectancies
between his effort and performance is greatly affected by a leader’s behavior. The leaders
help group members in attaining rewards by clarifying the paths to goals and removing
obstacles to performance. They do so by providing the information, support, and other
resources which are required by employees to complete the task.

House’s theory advocates servant leadership. As per servant leadership theory, leadership is
not viewed as a position of power. Rather, leaders act as coaches and facilitators to their
subordinates. According to House’s path-goal theory, a leader’s effectiveness depends on
several employee and environmental contingent factors and certain leadership styles. All
these are explained in the figure 1 below:

Figure 1: Path-Goal Leadership

Theory
Leadership Styles
The four leadership styles are:

 Directive: Here the leader provides guidelines, lets subordinates know what is
expected of them, sets performance standards for them, and controls behaviour when
performance standards are not met. He makes judicious use of rewards and
disciplinary action. The style is the same as task-oriented one.
 Supportive: The leader is friendly towards subordinates and displays personal concern
for their needs, welfare, and well-being. This style is the same as people-oriented
leadership.
 Participative: The leader believes in group decision-making and shares information
with subordinates. He consults his subordinates on important decisions related to
work, task goals, and paths to resolve goals.
 Achievement-oriented: The leader sets challenging goals and encourages employees
to reach their peak performance. The leader believes that employees are responsible
enough to accomplish challenging goals. This is the same as goal-setting theory.

According to the theory, these leadership styles are not mutually exclusive and leaders are
capable of selecting more than one kind of a style suited for a particular situation.

Contingencies

The theory states that each of these styles will be effective in some situations but not in
others. It further states that the relationship between a leader’s style and effectiveness is
dependent on the following variables:

 Employee characteristics: These include factors such as employees’ needs, locus of

control, experience, perceived ability, satisfaction, willingness to leave the
organization, and anxiety. For example, if followers are high inability, a directive
style of leadership may be unnecessary; instead a supportive approach may be
preferable.
 Characteristics of work environment: These include factors such as task structure and
team dynamics that are outside the control of the employee. For example, for
employees performing simple and routine tasks, a supportive style is much effective
than a directive one. Similarly, the participative style works much better for non-
routine tasks than routine ones.
When team cohesiveness is low, a supportive leadership style must be used whereas
in a situation where performance-oriented team norms exist, a directive style or
possibly an achievement-oriented style works better. Leaders should apply directive
style to counteract team norms that oppose the team’s formal objectives.

Conclusion

The theory has been subjected to empirical testing in several studies and has received
considerable research support. This theory consistently reminds the leaders that their main
role as a leader is to assist the subordinates in defining their goals and then to assist them in
accomplishing those goals in the most efficient and effective manner. This theory gives a
guide map to the leaders about how to increase subordinates satisfaction and performance
level.

Leader-Member Exchange Theory

Leader-member exchange (LMX) theory proposes that the type of relationship leaders have
with their followers (members of the organization) is the key to understanding how leaders
influence employees. Leaders form different types of relationships with their employees.
In high-quality LMX relationships, the leader forms a trust-based relationship with the
member. The leader and member like each other, help each other when needed, and respect
one another. In these relationships, the leader and the member are both ready to go above and
beyond their job descriptions to promote the other’s ability to succeed. In contrast, in low-
quality LMX relationships, the leader and the member have lower levels of trust, liking, and
respect toward each other. These relationships do not have to involve actively disliking each
other, but the leader and member do not go beyond their formal job descriptions in their
exchanges. In other words, the member does his or her job, the leader provides rewards and
punishments, and the relationship does not involve high levels of loyalty or obligation toward
each other.
Figure 10.15 Factors Contributing to the Development of a High-Quality Leader-Member
Exchange and Its Consequences

If you have work experience, you may have witnessed the different types of relationships
managers form with their employees. In fact, many leaders end up developing differentiated
relationships with their followers. Within the same work group, they may have in-group
members who are close to them and out-group members who are more distant. If you have
ever been in a high-quality LMX relationship with your manager, you may attest to its
advantages. Research shows that high-quality LMX members are more satisfied with their
jobs, more committed to their companies, have higher levels of clarity about what is expected
of them, and perform at a higher level. Because of all the help, support, and guidance they
receive, those employees who have a good relationship with the manager are in a better
position to perform well. Given all they receive, these employees are motivated to reciprocate
to the manager, and therefore they demonstrate higher levels of citizenship behaviors such as
helping the leader and coworkers. Being in a high-quality LMX relationship is also
advantageous because a high-quality relationship is a buffer against many stressors, such as
being a misfit in a company, having personality traits that do not match job demands, and
having unmet expectations. The list of benefits high-quality LMX employees receive is long,
and it is not surprising that these employees are less likely to leave their jobs.
The problem, of course, is that not all employees have a high-quality relationship, and those
who are in the leader’s out-group may suffer as a result. But how do you end up developing
such a high-quality relationship with the leader? That seems to depend on many factors.
Managers can help develop such a high-quality and trust-based relationship by treating their
employees in a fair and dignified manner.They can also test to see whether the employee is
trustworthy by delegating certain tasks when the employee first starts working with the
manager. Employees also have an active role in developing the relationship. Employees can
seek feedback to improve their performance, be open to learning new things on the job, and
engage in political behaviors such as flattery.
Interestingly, high performance on the employee’s part does not seem to be enough to
develop a high-quality exchange with the leader. Instead, interpersonal factors such as
personality similarity and liking are more powerful influences over how the relationship
develops. Finally, the relationship development occurs in a slightly different manner in
different types of companies; corporate culture matters in how leaders develop these
relationships. In performance-oriented cultures, how the leader distributes rewards seem to be
the relevant factor, whereas in people-oriented cultures, whether the leader treats people with
dignity is more relevant.

Should you worry if you do not have a high-quality relationship with your manager? One
problem in a low-quality exchange is that you may not have access to the positive work
environment available to the high-quality LMX members. Second, low LMX employees may
feel that their situation is unfair. Even when their objective performance does not warrant it,
those who have a good relationship with the leader tend to receive positive performance
appraisals. Moreover, they are more likely to be given the benefit of the doubt. For example,
when they succeed, the manager is more likely to think that they succeeded because they put
forth a lot of effort and they had high abilities, whereas for low LMX members who perform
objectively well, the manager is less likely to think so. In other words, the leader may
interpret the same situation differently, depending on which employee is involved and may
reward low LMX employees less even when they are performing well. In short, those with a
low-quality relationship with the leader may experience a work environment that may not be
very supportive or fair.

Despite its negative consequences, we cannot say that all employees want to have a high-
quality relationship with the leader. Some employees may genuinely dislike the leader and
may not value the rewards in the leader’s possession. If the leader is not well liked in the
company and is known as abusive or unethical, being close to such a person may imply guilt
by association. For employees who have no interest in advancing their careers in the current
company (such as a student employee who is working in retail but has no interest in retail as a
career), having a low-quality exchange may afford the opportunity to just do one’s job
without having to go above and beyond these job requirements. Finally, not all leaders are
equally capable of influencing their employees by having a good relationship with their
employees: It also depends on the power and influence of the leader in the overall company
and how the leader himself or herself is treated within the company. Leaders who are more
powerful will have more to share with employees who are close to them.

What LMX theory implies for leaders is that one way of influencing employees is through the
types of relationships leaders form with their employees. These relationships develop
naturally because of the work-related and personal interactions between the manager and the
employee. Because they occur naturally, some leaders may not be aware of the power that
lies in them. These relationships have an important influence over employee attitudes and
behaviors. In the worst case, they have the potential to create a negative work environment
characterized by favoritism and unfairness. Therefore, managers are advised to be aware of
how they build these relationships; put forth effort in cultivating these relationships
consciously; be open to forming good relationships to people from all backgrounds regardless
of their permanent characteristics such as sex, race, age, or disability status; and prevent these
relationships from leading to an unfair work environment.

Servant Leadership
The early 21st century has been marked by a series of highly publicized corporate ethics
scandals: between 2000 and 2003, we witnessed Enron, WorldCom, Arthur Andersen, Qwest,
and Global Crossing shake investor confidence in corporations and leaders. The importance
of ethical leadership and keeping long-term interests of stakeholders in mind is becoming
more widely acknowledged.

Servant leadership approach defines the leader’s role as serving the needs of others.
According to this approach, the primary mission of the leader is to develop employees and
help them reach their goals. Servant leaders put their employees first, understand their
personal needs and desires, empower them, and help them develop in their careers. Unlike
mainstream management approaches, the overriding objective in servant leadership is not
necessarily getting employees to contribute to organizational goals. Instead, servant leaders
feel an obligation to their employees, customers, and the external community. Employee
happiness is seen as an end in itself, and servant leaders sometimes sacrifice their own well-
being to help employees succeed. In addition to a clear focus on having a moral compass,
servant leaders are also interested in serving the community. In other words, their efforts to
help others are not restricted to company insiders, and they are genuinely concerned about the
broader community surrounding their company.
Even though servant leadership has some overlap with other leadership approaches such as
transformational leadership, its explicit focus on ethics, community development, and self-
sacrifice are distinct characteristics of this leadership style. Research shows that servant
leadership has a positive effect on employee commitment, employee citizenship behaviors
toward the community (such as participating in community volunteering), and job
performance. Leaders who follow the servant leadership approach create a climate of fairness
in their departments, which leads to higher levels of interpersonal helping behavior. Servant
leadership is a tough transition for many managers who are socialized to put their own needs
first, be driven by success, and tell people what to do. In fact, many of today’s corporate
leaders are not known for their humility! However, leaders who have adopted this approach
attest to its effectiveness. David Wolfskehl, of Action Fast Print in New Jersey, founded his
printing company when he was 24. He marks the day he started asking employees what he
can do for them as the beginning of his company’s new culture. In the next two years, his
company increased its productivity by 30%.
Authentic Leadership

Leaders have to be a lot of things to a lot of people. They operate within different structures,
work with different types of people, and they have to be adaptable. At times, it may seem that
a leader’s smartest strategy would be to act as a social chameleon, changing his or her style
whenever doing so seems advantageous. But this would lose sight of the fact that effective
leaders have to stay true to themselves. The authentic leadership approach embraces this
value: its key advice is “be yourself.” Think about it: We all have different backgrounds,
different life experiences, and different role models. These trigger events over the course of
our lifetime that shape our values, preferences, and priorities. Instead of trying to fit into
societal expectations about what a leader should be like, act like, or look like, authentic
leaders derive their strength from their own past experiences. Thus, one key characteristic of
authentic leaders is that they are self-aware. They are introspective, understand where they
are coming from, and have a thorough understanding of their own values and priorities.
Second, they are not afraid to act the way they are. In other words, they have high levels of
personal integrity. They say what they think. They behave in a way consistent with their
values—they practice what they preach. Instead of trying to imitate other great leaders, they
find their style in their own personality and life experiences.

One example of an authentic leader is Howard Schultz, the founder of Starbucks

coffeehouses. As a child, Schultz witnessed the job-related difficulties his father experienced
because of medical problems. Even though he had no idea he would have his own business
one day, the desire to protect people was shaped in those years and became one of his
foremost values. When he founded Starbucks, he became an industry pioneer in providing
health insurance and retirement coverage to part-time as well as full-time employees.

An example of an authentic leader is Howard Schultz, the founder of Starbucks coffeehouses.

Witnessing his father losing jobs because of medical problems, he became passionate about a
company’s need to care for its employees.

Authentic leadership requires understanding oneself. Therefore, in addition to self-reflection,

feedback from others is needed to gain a true understanding of one’s behavior and effect on
others. Authentic leadership is viewed as a potentially influential style because employees are
more likely to trust such a leader. Moreover, working for authentic leaders is likely to lead to
greater levels of satisfaction, performance, and overall well-being on the part of
employees. Best-selling author Jim Collins studied companies that had, in his opinion, gone
from good to great, and he found they had one thing in common. All of these companies had
what he calls Level 5 leaders who build organizations through their personal humility and
professional will. He notes that Level 5 leaders are modest and understated. In many ways,
they can be seen as truly authentic leaders.
Leadership Substitutes Theory

Leadership Substitutes Theory

 Steven Kerr and John M. Jermier (1978) proposed the substitutes for leadership theory. This
theory has evolved from path-goal theory.

Leadership Substitutes Theory is a framework. It helps to interpret the contingent relationship

between leadership behavior and the outcomes. Different situational factors can substitute,
neutralize, or enhance leadership behaviors.

 Substitutes- Substitutes remove leaders’ controlling power and help group members increase
their performance.
 Neutralizers- Neutralizers only remove influence from the leader. It serves to weaken or
block leader influence on subordinate outcomes.
 Enhancer- Enhancers are variables that serve to strengthen leaders’ influence on subordinate
outcomes.
Kerr and Jermier measured these substitutes using a questionnaire.

The questionnaire has the following characteristics:

 Thirteen subscales with 55 items.

 Subscale items are listed on a Likert scale rating.
 The LPC scale ranges from 1 (completely untrue) to 5 (almost always true).
Criticism:

 When interpreting the contingent relationships, independent and dependent variables are
collected. The variables are managed by the same person, causing a common source of
biases.
 The study focuses on relationships between variables for a specific time. It lacks involvement
in various other measures over an extended period.
 The concept of this theory is weak. It is hard to identify specific substitutes and neutralizers
for broad behavior categories.