"The MGMT Solution," Vocabulary from Chapter 14

According to University of Southern California business professor Warren Bennis, the primary difference between leaders and managers is that leaders are concerned with doing the right thing, while managers are concerned with doing things right.

Managers see themselves as preservers of the status quo, while leaders see themselves as promoters of change and challengers of the status quo in that they encourage creativity and risk taking.

More specifically, leaders are different from nonleaders in the following traits: drive, the desire to lead, honesty/integrity, self-confidence, emotional stability, cognitive ability, and knowledge of the business.

Drive refers to high levels of effort and is characterized by achievement, motivation, initiative, energy, and tenacity.

Honesty, being truthful with others, is a cornerstone of leadership. Without it, leaders won’t be trusted. When leaders are honest, subordinates are willing to overlook other flaws.

Moreover, self-confident leaders will admit mistakes because they view them as learning opportunities rather than as refutations of their leadership capabilities.

Leaders also have emotional stability. Even when things go wrong, they remain even-tempered and consistent in their outlook and in the way they treat others.

But it does mean that leaders have the capacity to analyze large amounts of seemingly unrelated, complex information and see patterns, opportunities, or threats where others might not see them.

Finally, leaders also know their stuff, which means they have superior technical knowledge about the businesses they run.

The University of Michigan studies indicated that initiating structure and consideration were mutually exclusive behaviors on opposite ends of the same continuum. In other words, leaders who wanted to be more considerate would have to do less initiating of structure (and vice versa).

All assume that the effectiveness of any leadership style, the way a leader generally behaves toward followers, depends on the situation.

In other words, in addition to traits, behaviors, and a favorable situation to match, leaders have to be allowed to lead.

Three situational factors determine the favorability of a situation: leader-member relations, task structure, and position power.

Just as its name suggests, path-goal theory states that leaders can increase subordinate satisfaction and performance by clarifying and clearing the paths to goals and by increasing the number and kinds of rewards available for goal attainment. Said another way, leaders need to clarify how followers can achieve organizational goals, take care of problems that prevent followers from achieving goals, and then find more and varied rewards to motivate followers to achieve those goals.

Second, while providing the coaching, guidance, support, and rewards necessary for effective work performance, leader behaviors must complement and not duplicate the characteristics of followers’ work environments.

the four leadership styles in path-goal theory are directive, supportive, participative, and achievement oriented.

The shift from one leader to another is one of the most crucial times for a company, yet very few organizations have planned for the process. A smooth transition to a successor can help a company maintain, and even expand, the company's success.

Locus of control is a personality measure that indicates the extent to which people believe that they have control over what happens to them in life.

But when the formal authority system is clear, directive leadership is redundant and should not be used.

However, since the data clearly show that it makes sense for leaders to be both supportive and directive, it also makes sense that leaders could improve subordinate satisfaction and performance by adding participative and achievement-oriented leadership styles to their capabilities as leaders.

According to the normative decision theory, using the right degree of employee participation improves the quality of decisions and the extent to which employees accept and are committed to decisions.

The quality, leader information, subordinate information, goal congruence, and problem structure rules are used to increase decision quality.

If the quality of the decision is important, and if the leader doesn't have enough information to make the decision on his or her own, then don't use an autocratic decision style.

If having subordinates accept the decision is important and critical to successful implementation and subordinates are likely to disagree or end up in conflict over the decision, then don't use an autocratic or consultative decision style.

Strategic leadership is the ability to anticipate, envision, maintain flexibility, think strategically, and work with others to initiate changes that will create a positive future for an organization.

Thus, strategic leadership captures how leaders inspire their companies to change and their followers to give extraordinary effort to accomplish organizational goals.

Weber also noted that charismatic leaders tend to emerge in times of crisis and that the radical solutions they propose enhance the admiration that followers feel for them.

Charismatic leaders also
• Articulate a clear vision for the future that is based on strongly held values or morals;
• Model those values by acting in a way consistent with the vision;
• Communicate high performance expectations to followers; and
• Display confidence in followers’ abilities to achieve the vision.

The problems are likely to occur with ego-driven charismatic leaders who take advantage of fanatical followers.

For example, ethical charismatics account for the concerns and wishes of their followers when creating a vision by having followers participate in the development of the company vision. By contrast, unethical charismatics develop a vision by themselves solely to meet their personal agendas.

By linking individual and organizational interests, transformational leaders encourage followers to make sacrifices for the organization because they know that they will prosper when the organization prospers.

Charismatic leadership or idealized influence means that transformational leaders act as role models for their followers.

Because transformational leaders put others’ needs ahead of their own and share risks with their followers, they are admired, respected, and trusted, and followers want to emulate them.

Inspirational motivation means that transformational leaders motivate and inspire followers by providing meaning and challenge to their work.

By clearly communicating expectations and demonstrating commitment to goals, transformational leaders help followers envision future states, such as the organizational vision or mission.

In turn, this leads to greater enthusiasm and optimism about the future.

Intellectual stimulation means that transformational leaders encourage followers to be creative and innovative, to question assumptions, and to look at problems and situations in new ways even if their ideas are different from those of leaders.

While transformational leaders use visionary and inspirational appeals to influence followers, transactional leadership is based on an exchange process in which followers are rewarded for good performance and punished for poor performance.

When leaders administer rewards fairly and offer followers the rewards that they want, followers will often reciprocate with effort.

A problem, however, is that transactional leaders often rely too heavily on discipline or threats to bring performance up to standards.