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8Leadership
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Learning Objectives
After reading this chapter and studying the
materials, you should be able to:
Understand the basics of leadership along with the traits and
characteristics that have been
associated with effective leadership.
Use the elements of the behavioral theories to improve
leadership activities.
Employ concepts from the situational and contingency theories
of leader effectiveness.
Relate late 20th century theories of leadership to the workplace.
Apply contemporary leadership theories to employment settings.
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While the roles of managers and leaders differ, it
is ideal
for managers to be quality leaders.
Monkeybusinessimages/iStock/Thinkstock
8.1 The Nature of Leadership and Early
Theories
Making a distinction between the terms "leadership" and
"management" has been an ongoing
focus of organizational behavior authors (see Simonet & Tett,
2013 for a full discussion). John
Kotter (1990) argues that management focuses on coping with
complexity using the basic
managerial functions of planning, organizing, and control.
Robert House and R. J. Aditya
(1997) link the concept of management with the use of formal
authority that arises from a
person's organizational rank. In contrast, leadership
concentrates on coping with change and
providing guidance. Leaders establish direction by
communicating a vision and inspiring
followers. Not all managers are effective leaders, and not all
strong leaders are managers. The
ideal, of course, would be to employ managers who are also
quality leaders whenever
possible.
The ability to lead has been observed and reported on for many
centuries. Many ancient
writings tell tales of leaders who served in battle, commanded
nations, or taught religious
ideas. In a general sense, the primary qualities associated with

leadership are vision,
enthusiasm, trust, courage, passion, coaching, developing
others, intensity, love, and even
serving as a parent �igure. In an organizational context,
leadership involves in�luencing the
behaviors of individuals and groups to work toward
predetermined goals.
Effective leaders in�luence behaviors in positive ways.
Examples of effective leaders include
the hard-driving but respected Jack Welch during his tenure at
General Electric; the powerful
motivator Sheryl Sandberg from Facebook; the driven,
intellectual Steve Jobs of Apple Inc. and
Bill Gates of Microsoft; the fun-loving and tenacious Herb
Kelleher, founder and CEO of Southwest Airlines; the
charismatic communicator Andrea Jung, CEO of
Avon Products, Inc.; and the unconventional Indra Nooyi, CEO
of PepsiCo. As these examples indicate, effective leadership
takes many forms.
Consequently, it is not surprising that the study of leadership
includes a variety of perspectives. This chapter examines
several categories of leadership theories
including trait, behavioral, situational, and contingency, as well
as an eclectic set of contemporary theories. Each adds unique
elements to our understanding of
what leaders do and how effective leaders operate.
OB in Action: Solemates' Becca Brown
One of the biggest jumps a person can make is from a well-paid
stable job with a major corporation to the launch of a brand-new
business. Becca Brown
took that leap, and did so with great success.

Brown earned a bachelor's degree from Harvard University and
moved into the corporate world by taking a job as a �inancial
analyst for Goldman Sachs.
Two promotions later she had moved from an associate's
position in Private Wealth Management to chief of staff in the
company's London operation.
Clearly, she had already exhibited quality leadership skills.
Then, a long-time memory emerged. She recalled a prom photo
in which she stood on some less-than-sturdy grass and
eventually her beautiful high heel
shoes were ruined. After sharing the story with her friend from
Goldman Sachs, Monica Ferguson, the two decided to �ind a
solution to the problem of
poorly designed high heel spikes.
The resulting product, Solemates, are small plastic caps that
attach to high heels and prevent them from sinking into grass or
getting stuck in cracks. The
product has been placed in more than 3,000 Nordstrom, DSW,
and David's Bridal stores around the world as well as on
Amazon.com and Zappos.com.
Several hundred thousand pairs have been sold to people around
the world, including Oprah, Robin Wright-Penn, Viola Davis,
Natalie Morales, and Carrie
Underwood.
Listening, honesty, passion, building interpersonal
relationships, and commitment to employees are some of
Brown's major leadership attributes. She
said, "Ask for help, guidance, and advice. Try to gather as much
feedback from others around you as you can. Seek out 360-
degree advice—ask those more
senior to you, your peers, and those more junior. You can only
bene�it from hearing the different perspectives" (Smith, 2016).

Honesty and passion are at the forefront for Brown when
selecting a new employee. She said, "I want to know what a
candidate enjoys doing because not
only does it give me insight into who the person is and their
personality, but it shows me where I think they can thrive,"
Brown tells Business Insider. "In
general, we all excel when we enjoy what we're doing. If we can
harness what a candidate genuinely enjoys doing in their job, it
becomes a win-win
situation" (Smith, 2015).
Her leadership style and approach have been clearly successful.
The future of Solemates remains bright.
Re�lection and Application Questions
1. How is the concept of "leadership" connected to
"entrepreneurship?"
2. Do you agree that honesty and passion are two key
ingredients in selecting employees?
3. Evaluate Becca Brown's leadership style based on her
comments in this story.
The Original Great Man Theory
Among the �irst ideas about the nature of leadership were
beliefs that physical and personality characteristics differentiate
effective leaders from followers and
from unsuccessful leaders. In the early 1900s, the assumption
was that certain people are simply born to lead. This
supposition suggests that leadership cannot
be taught; it consists of inherent abilities.
Further, the ability to lead was presumed to be a universally
applicable skill. Thus, a leader who succeeds in one

organization would likely be equally effective in
any other, which in turn suggests that all effective leaders share
common traits. These ideas formed the great man approach to
leadership, which was studied for
many years prior to World War II. Table 8.1 summarizes many
of the items that were investigated, all in search of common
traits and characteristics among great
leaders.
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Table 8.1: Potential traitsand characteristics of
effective leaders
Physical characteristics Personal traits Personality traits
Social traits
Height Verbal skills Ambition Empathy
Strength Wisdom Con�idence Tact
Physical attractiveness Judgment Initiative Patience
Stamina Intellect Persistence Trust
Vitality Capacity for work Imagination Status
Clearly, many of the items in the table are admirable traits and
personal strengths. Unfortunately, a great deal of research
indicates that they are not universally
found in successful leaders (Geier, 1967), and in fact, counter-

examples are readily available. An effective leader might be
short (Napoleon), physically weak
(Franklin D. Roosevelt), unattractive, inarticulate, less
intelligent, full of self-doubt (Abraham Lincoln), and impatient
(McDonald's Ray Kroc). As a result, interest
in the great man approach began to wane (Kirkpatrick & Locke,
1991).
Trait Theories
As a modi�ication of the great man approach, a newer trait-
based theory argued that although certain character traits may
be innate, leaders can be developed
through experience and learning, including the traits identi�ied
in the Myers-Briggs approach, the Big Five Personality
Characteristics approach, and emotional
and/or political intelligence.
In many business organizations, companies identify elements of
personality with a widelyused instrument, the Myers-Briggs
Type Indicator (MBTI), which
measures introversion/ extroversion, sensing/intuitive,
thinking/feeling, and judging/perceiving personality
characteristics in individuals (Quenk, 2000).
Although evidence of the validity of the actual instrument has
been mixed, some organizational leaders have concluded that it
does provide a pathway to greater
self-awareness, which might result in more effective leadership
(Gardner & Martinko, 1996).
A closely related approach, known as the Five-Factor Model of
Personality, or the Big Five Personality Characteristics
approach, achieved some positive research
results regarding leadership, as well as effective general job
performance (Mount, Barrick, & Strauss, 1994; Schmidt &
Hunter, 1998; McCrae, 1992). The model

suggests that �ive basic dimensions underlie personality,
including many of the traits noted in Table 8.1 (McCrae &
Costa, 1989). The following are the Big Five
factors:
1. Extroversion—One's comfort level with relationships. People
who are extroverts tend to be outgoing, assertive, and social.
Introverts tend to be
reserved, timid, and less inclined to leap into action.
2. Agreeableness—One's tendency to defer to others. Highly
agreeable people are cooperative and trusting. People who are
less agreeable tend to be
antagonistic, cold, and untrusting.
3. Conscientiousness—Reliability in dealing with others. A
person who is highly conscientious is meticulous, responsible,
organized, and dependable.
People who are less conscientious are easily distracted,
disorganized, and often unreliable.
4. Neuroticism vs. emotional stability—A person's tendency to
become or not become upset or emotional and his or her ability
to deal with stress in
general. People who are emotionally stable tend to be calm,
self-con�ident, and secure. People who are less emotionally
stable tend to be nervous,
anxious, and insecure.
5. Openness to experience—A person's range of interests and
curiosity regarding new experiences and adventures. Open
people are creative and
inquisitive and ask numerous questions. People who are less
open tend to be conventional, a bit rigid, and prefer the status
quo.

Of the �ive, extroversion has been the most predictive of
becoming a leader; however, it does not necessarily lead to
leader effectiveness, or the ability to be a
quality leader (Judge, Bono, Ilies, & Gerhardt, 2002). Some
evidence has emerged noting that conscientiousness and
openness to experience are correlated with
leader effectiveness (Judge et al., 2002), which suggests a
combination of the �ive traits might increase the likelihood a
person will be an effective leader.
The great man and Big Five assessments of leader traits and
characteristics suggest that certain personality traits result in
effective leadership. This suggestion
fails to separate two important concepts. The �irst is that
certain personality traits can predict the chances that an
individual will be promoted to a leadership
role. For example, an extroverted individual would be more
readily noticed in a social setting and become a leader as a
result.
The second concept is that becoming a leader (getting the job or
being promoted) does not guarantee subsequent effectiveness.
Future research and conceptual
development may result in studies designed to identify any
personality factors that predict effectiveness rather than ability
to obtain the role.
One �inal characteristic that has drawn attention is intelligence.
There has been a longstanding interest in, and debate about, the
relationship between
intelligence and the ability to lead. One factor, emotional
intelligence, or the ability to manage oneself and one's
relationships in mature and constructive ways,
appears to predict leader success (Xavier, 2005). Emotional
intelligence, as was described in Chapter 3, includes the ability
to adapt to changing circumstances,

remain empathetic to others, and remain calm in the face of
pressure or dif�icult circumstances.
Political intelligence, which indicates the ability to use power
and intimidation to achieve various results, also appears to be
an asset in circumstances in which
change is required and subordinates are resistant to those
changes (Kramer, 2006). Still, one study revealed only a modest
relationship between intelligence and
effectiveness; the researchers concluded that personality
factors, rather than intelligence, remained better predictors of
leadership effectiveness (Judge, Colbert,
& Ilies, 2004).
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The University of Michigan Leadership model
posits that
employee-centered management is ultimately more

effective.
8.2 Behavioral Theories and Leader Orientation
The onset of World War II resulted in a series of new leadership
research initiatives in the United States, primarily due to what
the United States government
perceived as a need to develop effective leaders, speci�ically
for the military. These approaches have been characterized as
being developed during the behavioral
era of leadership study (Yukl, 1981). Researchers sought to
identify speci�ic behaviors that are associated with successful
leadership along with an
understanding of the leader's basic orientation toward people or
production, which would then make it possible to train
employees to become more effective
leaders. This conceptualization diminishes the role of
personality factors in selection processes while enhancing the
role of leadership training. Four behavioral
theories of leadership are as follows:
the University of Michigan Leadership Model
the Ohio State Study
the Leadership Grid
the Scandinavian Development-Oriented Approach
The University of Michigan Leadership Model
In the late 1940s, researchers at the University of Michigan
developed what came to be known
as the University of Michigan Leadership Model. A team began
studying the effects of leader
behavior on job performance by interviewing a number of
managers and subordinates. As a
result of their research, the investigators identi�ied two

leadership styles: job-centered and
employee-centered (Likert, 1961).
Job-centered, or production-oriented, behaviors and orientation
occur when managers focus
attention on the job and related work behaviors. Production-
oriented leaders concentrate on
technical aspects of the job, including �inding better methods
of operation, with the goal of
increasing output through individuals and groups. The principal
concerns of production-
oriented leaders include reaching production goals, keeping
costs in line, and following
schedules.
Employee-centered behaviors and orientation take place when
managers concentrate on
employee satisfaction and making work groups more cohesive.
Employee-oriented managers
emphasize personal relationships with workers, take a personal
interest in those individuals,
and accept personality differences. By focusing on employee
needs, managers hope to build
effective work groups that will achieve at higher levels.
Likert and his colleagues at Michigan argued that employee-
oriented leaders would be more
effective in terms of producing higher group satisfaction and
higher individual job
satisfaction. They argued that production-oriented leaders
would suppress those factors. In
essence, the argument was that employee-centered leadership is
a better style.
The Ohio StateStudy

Beginning in the 1940s, another study that examined leadership
behavior took place at The Ohio State University (Stogdill &
Coons, 1957). The researchers at
Ohio State conducted surveys of leadership behaviors in various
organizations and subsequently identi�ied two major
dimensions of leader behavior: initiating
structure and consideration (Shartle, 2006).
Initiating structure refers to an aspect of leadership behavior
that organizes and de�ines what group members should be
doing. It involves the efforts the leader
makes to get things done through tactics such as organizing
work and setting goals for employees. Behaviors that exhibit
initiating structure are similar to the
job-centered behaviors identi�ied in the University of Michigan
study.
Consideration is leadership behavior that expresses concern for
employees by establishing a warm, supportive, friendly climate.
Leaders exhibit consideration
through concern for worker comfort, well-being, and
satisfaction. Consideration resembles the employee-centered
behaviors identi�ied in the University of
Michigan study, in which leaders are sensitive to employee
ideas and promote feelings of trust.
The researchers at Ohio State concluded that effective leaders
demonstrated higher levels of both initiating structure and
consideration. Effective leaders tended
to have positive, supportive, employee-centered relationships
and use group rather than individual methods of supervision that
encouraged setting high
performance goals. At the same time, they could focus on the
accomplishment of tasks.
Research into the assertions made by the Ohio State study's

analysts has yielded mixed results. For example, a leader who
exhibits consideration may receive
lower performance ratings by the individual's supervisor,
perhaps due to the conclusion that the considerate leader is not
assertive or lacks con�idence. In
contrast, initiating structure has been connected to higher rates
of grievances �iled by employees and other indicators of
dissatisfaction, such as absenteeism and
turnover (Yukl, 1981). The likely explanation would be that
leaders who exhibit such an approach would be perceived as
being more authoritarian and far less
attentive to employee needs and concerns.
The Leadership Grid
As noted, the Ohio State study's conclusions included the
assertion that the most effective leaders exhibit both initiating
structure and consideration. Blake and
Mouton (1985) relied on that conclusion when building the
leadership grid. Their approach was to improve leader skills by
enhancing any de�iciencies in a
leader's style using various tactics to improve on such
weaknesses.
The leadership grid consists of two axes, or dimensions:
concern for people and concern for production (see Figure 8.1).
When using the Blake and Mouton
approach, leaders are rated with scores from 1 to 9 on each
dimension.
Figure 8.1: The leadershipgrid
Effective leaders have high scores for both concern for people
and concern for production.

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Source: Adapted from Blake, R., & Mouton, J. S.
(1985). The Managerial Grid III: The key to leadership
excellence. Houston, TX: Gulf Publishing
Company.
The point at which an individual scores on each dimension
indicates his or her particular management style: impoverished
(poor leader), authority-compliance
(only production oriented), country club (only people oriented),
middle-of-the-road (compromise), and team (effective leader).
Each axis ranges from a score of
1 at the bottom to 9 at the two extremes. Thus, a score of 1,1
indicates the leader who does not appear to demonstrate either a
peopleoriented or production-
oriented style. The 9, 9 effective leader rates high on both
dimensions.
Therefore, at the low end of both dimensions (1,1) impoverished
management suggests a poor leader, one who exerts the
minimum amount of effort to get work
done and keep his or her job. Such an individual may be best
suited to a role other than leadership.
A leader with high concern for production and little concern for
people exhibits an authoritycompliance style. Consequently, the
person would be trained to
develop various people skills. One of the earliest approaches
was to employ sensitivity training for such individuals.

The country club management style emphasizes being
thoughtful and attentive to employees by creating a friendly
environment, sometimes at the expense of
desired productivity. These leaders bene�it from an emphasis
on understanding the importance of production, through
methods such as goal setting.
Middle-of-the-road leaders ensure adequate performance by
compromising on both production goals and issues of morale.
The middle-of-the-road leader lacks
assertiveness and decisiveness, which would mean that training
sessions should be devoted to improving those two
characteristics.
Team management or leadership re�lects a strong desire to
enjoy a positive work environment coupled with the drive to
achieve productivity goals. Such an
individual provides a role model for other leaders and managers
as well as those who aspire to such positions.
The primary criticism of the leadership grid resembles that
raised regarding the Ohio State studies. Little evidence exists to
support the concept that (9, 9) team
management style will always be the most effective. The
framework does provide a method of analysis of various leaders
by management trainers and has been
used frequently in that manner.
The Scandinavian Development-Oriented Approach
Researchers in Sweden and Finland in the mid-1960s re�ined
the people-oriented/production oriented model to incorporate a
third dimension: development-
oriented leader behavior (Ekvall & Arvonen, 1991; Lindell &
Rosenqvist, 1992b). The underlying premise was that the world
of commerce had changed

suf�iciently to demand behaviors that involve starting new
activities plus �inding and advocating for improved methods of
doing things. The researchers
suspected that such activities were of lesser necessity during the
times in which the Ohio State and Michigan studies were being
conducted.
Initial investigations suggest that the third dimension has value
in explaining leader behavior. The approach suggests
development-oriented leaders have more
satis�ied employees. The employees may also view them as
being more competent (Lindell & Rosenqvist, 1992a).
The behavioral theories of leadership stress the importance of
leader actions and activities rather than traits and
characteristics. These theories therefore
support the idea that great leaders are not necessarily born with
inherent leadership qualities; rather, employees can be taught
and trained to become effective
leaders.
In summary, considerable debate took place regarding the
effectiveness of either leader style (people-oriented or
production-oriented) alone. Some suggested
that a highly productionoriented, authoritarian leader such as
Steve Jobs at Apple Inc. created a highly stressful environment
that tended to burn out even the
most diligent employees. Others argued that a complete human-
oriented people approach quickly becomes a circumstance in
which the leader is considered to
be "soft" and easily intimidated. Consequently, it was not
surprising when organizational behavior researchers and
theories began to look for approaches that
would incorporate new and different ideas, especially regarding
times in which one style or the other would be the most
appropriate or effective.

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Situational leadershiptheories emphasize the
necessity of
adapting one'sleadershiporientation according to the
circumstances.
8.3 Situational and Contingency Theories
In the late 1950s, the concept emerged that no one universal
style of leadership is always most effective. Instead, some
theorists argued that leader effectiveness
largely results from the leader adapting to or matching the
characteristics of a particular situation. As a result, theories in
this area are known as situational and
contingency approaches to leadership.

Original Situational Theories
Robert Tannenbaum and Warren Schmidt (1973; �irst published
in 1958) suggested a
different, third key leadership variable in addition to task- and
relationship orientations:
effectiveness. Their view of leadership expresses leader style in
terms of the delegation of
authority. At the one extreme of a situational continuum, an
authoritarian leader retains total
control. At the other extreme is the leader who pushes for
employee participation and
autonomy. In between, the continuum indicates the amount of
delegation of authority that
would be the most effective, depending on the nature of the
situation as it moves from more
favorable toward authoritarian style to more favorable toward
autonomy.
In a separate but similar approach to that of Tannenbaum and
Schmidt, William Reddin
(1970) identi�ied the two main dimensions of leadership as
relationship orientation and task
orientation. Using concepts from the Ohio State studies, Reddin
combined the two
orientations, creating four outcomes: low relationship/high task,
low relationship/low task,
high relationship/low task, and high relationship/high task.
Reddin proposed the same
application as Tannenbaum and Schmidt: that the potential for
effectiveness should
determine the mix of task and relationship orientation according
to the elements present in
the workplace situation.
These two approaches explained the nature of a leader's

circumstances by incorporating
situation-speci�ic variables. This new perspective helped shape
more intricate situational and
contingency models. Hersey and Blanchard's situational
leadership model provides the most
widely noted example of the situational approach. Fred E.
Fiedler then expanded the concepts
with his contingency theory, which will be discussed below.
Hersey and Blanchard's Situational Leadership
Model
The situational leadership model proposed by Hersey and
Blanchard re�lects how a leader should adjust his or her
leadership style according to the readiness of
the followers (Hersey & Blanchard, 1974; Hersey, Blanchard, &
Johnson, 2001). The model suggests that leaders should be
�lexible in choosing a leadership
behavior style and become sensitive to the readiness of the
follower. Readiness refers to the extent to which a follower
possesses the ability and preparation to
perform a given task. Employees with a high level of readiness
require a different leadership style than employees with a low
level of readiness. Table 8.2
indicates relationships between employee readiness and
subsequent leader responses.
Table 8.2: Employee readiness and leader responses
Employee readiness Leader response
Unable and unwilling Provide clear speci�ic instructions and
details
Unable but willing Explain tasks but build relationships with
workers to obtain their trust and increase their levels of effort

Able and unwilling Supportive leadership that incorporates
participation to increase willingness
Able and willing Little response required
The situational leadership model can then be expanded to
incorporate elements of task behavior and leader-member
relationships. Table 8.3 identi�ies the
possible leadership styles that result from different
combinations of task-oriented and relationship-oriented
behaviors.
Table 8.3: Matching situations to leader styles
Situation characteristics Leadership style
High task behavior/low relationship Telling and directing
High task behavior/high relationship Selling and coaching
Low task behavior/high relationship Facilitating and counseling
Low task behavior/low relationship Delegating
The telling and directing style is characterized by one-way
communication, where the leader tells the follower what, how,
when, and where to accomplish
various tasks. It will be most viable when the work to be
performed is straightforward and simple and the leader is not
concerned about bonding or relating to
followers.
The selling and coaching style is characterized by a leader
providing most of the direction. The leader incorporates two-
way communication to get the followers
to "buy into" decisions. The style matches situations in which
the work is straightforward and uncomplicated but the leader

wants to build bonds with followers.
The facilitating and counseling style is characterized by leaders
sharing decision making with followers because the emphasis is
on building relationships
between leaders and followers. The leader exhibits facilitation
behaviors because the followers have the ability and knowledge
to perform tasks.
Finally, in a delegating style, the leader lets the followers run
the show. No strong relationships are built and the followers are
both willing and able to perform
the task at hand.
Leaders using this model must be able to implement alternative
leadership styles as needed. This model also implies that if the
correct styles are used in lower-
readiness situations, followers will mature and grow in ability,
willingness, and con�idence. This not only allows the followers
to grow, but it also allows the
leader to become less directive. Situational leadership theory
has enjoyed wide acceptance in the corporate community
(Fernandez & Vecchio, 1997); however,
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research supporting the propositions in the model has been
generally disappointing (Graeff, 1997). Criticism of the model
suggests it is too ambiguous to
effectively test. Critics urge caution when seeking to apply its

principles (Vecchio & Boatwright, 2002).
Fiedler's Contingency Model
Fred E. Fiedler's (1967) contingency model suggested that
leadership success depends on a match between the leadership
style and the demands of the
situation. Rather than train leaders to adopt a new style, Fiedler
believed that leaders should match their styles with situations
that are the best �it. Contingency
theory has been labeled the if/then approach. That is, if the
situation has one set of characteristics, then it becomes possible
to prescribe the best style of
leadership to achieve results.
Just like the situational approaches, contingency theory begins
with the premise that a person's leadership style tends to be
either task-oriented or relationship-
oriented. Fiedler assumed a person displays a �ixed leadership
style over time.
To reveal the type of leadership style she or he prefers, the
leader responds to items on the least preferred coworker (LPC)
test. The LPC test consists of 16
contrasting sets of words that may be used to describe the
person at work the respondent likes the least. The potential
answers include warm or cold, friendly or
unfriendly, supportive or hostile, accepting or rejecting, and
similar dichotomies.
Relationship-oriented leaders score higher on the test, because
each more positive choice adds to the respondent's score. A high
LPC score indicates that the
leader sees the positive side of a coworker that he or she least
prefers and exhibits a relationship-oriented approach to leading.

A low LPC score indicates greater interest in production, or a
task-oriented leader. A low LPC leader does not take the time to
interact with or understand
coworkers and/or followers and therefore does not see or report
the more favorable characteristics
Fiedler suggested that neither a relationship-oriented nor a task-
oriented style effectively serves every situation. Instead, each
becomes more effective when
used in the right situation. In order to diagnose leadership
situations, three contingency variables must be identi�ied:
1. Leader-Member Relations: the extent to which a leader has,
or does not have, the support and loyalty of the work group.
2. Task Structure: the extent to which tasks are routine,
unambiguous, and easily understood. The more structured a task
is, the less in�luence a leader
holds.
3. Position Power: the degree of power a leader has to
reward and punish. More power equates to more control and
in�luence.
Using these three dimensions, Fiedler constructed the
"dimension of favorability," as displayed in Figure 8.2. As
shown, good leader-member relations, high task
structure, and strong position power constitute the most
favorable situation. Poor relations, low structure, and weak
power indicate the least favorable. In the
middle, situations become more mixed in terms of favorability.
Later, Fiedler collapsed the eight dimensions into three. At the
two extremes, the most and least
favorable ends of the continuum, labels were assigned
suggesting these were low- and high-control situations. The
mixed favorability sector was renamed the
"moderate control situation" (Ayman, Chemers, & Fiedler,

1995).
The research Fiedler and many others conducted led to the
construction of the "dimension of effectiveness." As shown in
the �igure, at the two extremes,
effectiveness is higher for production-oriented leaders, where
low and high control situations exist. In mixed favorability or
moderate control situations, people-
oriented leaders are more likely to succeed.
Figure 8.2: Results of Fiedler's research
Production-oriented leaders (low LPC) are most effective at the
extremes of situational favorability. People-oriented
leaders (high LPC) do best in moderately favorable situations.
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Source: Adapted from Fiedler, Fred E. (1974,
Autumn). The Contingency Model—New Directions
for Leadership Utilization. Journal of
Contemporary
Business.
Two recommendations emerge from the research. First, when a
leader's style has been identi�ied, it should be possible to place
that leader in appropriate
situations. Low LPC score leaders are best matched to situations
of low or high control. The reasoning seems to be that, when
most or all of the situational

elements are favorable, a task-oriented leader would be able to
take advantage of the situation and achieve the best results.
Conversely, when most or all
elements are not favorable, focusing on the task once again
appears to be the most viable option.
High LPC leaders �it with moderate control circumstances.
Moderate favorability favors people skills and closer
interactions with followers. These leaders would
then be able to take advantage of the more favorable features
and attempt to reduce the unfavorable elements by utilizing
their people skills.
The second recommendation made by Fiedler, which would
appear to be much less likely, would be to restructure the
situation to �it the leader. Doing so would
often seem improbable or not feasible.
The contingency theory approach generated considerable debate
regarding its value. Many of the basic concepts have been
supported by research (Schriesheim,
Tepper, & Tetrault, 1994). At the same time, some have
challenged the LPC instrument, suggesting two problems. First,
does the scale truly measure task or
relationship orientation or rather that someone does or does not
have an enemy in the workplace? Second, LPC scores tend to
change, dependent on the
person's situation. Thus, it becomes dif�icult to truly assess a
person's leader style.
Further, leader-member relations, position power, and task
structure may be dif�icult to assess. Changing them to �it a
leader would add new complications. The
primary complaint was that most leaders would be unable to
restructure their situations, giving the theory little practical
value.

On the positive side, contingency theory moved the study of
leadership more into the realm of collecting and analyzing data
to support or refute various
propositions. It also added to the understanding of the
conditions under which leaders operate. The concepts of
leadermember relations, task structure, and
position power increase awareness of the impact of the
workplace on leader style and subsequent performance.
In summary, the situational era incorporates the idea that
subordinates should be considered as part of the formula when
appointing, electing, or promoting a
leader. Contingency theory speci�ies some key aspects of the
situation (task structure, position power, group cohesiveness)
that explain times and places in
which a leader is more likely to succeed.
In these situational and contingency models, managers can
adjust their leadership styles to suit elements of the task and the
relationships between leaders and
followers. The next generation of leadership theories moves
beyond task- and people-centered approaches by adding new
dimensions to the study of the
process.
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8.4 Late 20th Century Leadership Theories
The latter half of the 20th century witnessed the development of
several innovative approaches to understanding leadership.
These theories expanded views of
how leaders operate within various environments and with other
members of an organization. They also account for greater
complexity in interactions between
the several factors that in�luence leader effectiveness. Among
them, the substitutes for leadership approach, leader-member
exchange theory, and path-goal
theory gained traction in both the academic and business arenas.
Substitutes for Leadership
An interesting approach to understanding leadership has been
proposed by Steven Kerr and Richard Jermier (1978). These
authors noted that various factors
often limit the ability of a leader to exert any kind of in�luence
on individual employees. The net result may be circumstances
in which a leader's efforts are
redundant or unnecessary. In other words, these factors act as
substitutes for leadership (see Table 8.4).
Table 8.4: Substitutes for leadership
Subordinate characteristics
Experience

Professionalism
Task characteristics
Machine-paced work
Intrinsically satisfying and motivating jobs
Organizational characteristics
Cohesive work groups
Standardized jobs; formalized rules and procedures
Source: Kerr, S. & Jermier, J. M. (1978).
Substitutes for leadership: Their meaning
and measurement, Organizational Behavior and Human
Performance, 22(3), 375–403.
Employees who are intuitive, experienced, and professional
require little or no supervision. Worker productivity in
machine-paced or assembly line-type work
depends on the speed of the line rather than actions taken by the
supervisor or leader. Intrinsically satisfying work, where the
reward results from the task itself
rather than outside motives such as pay or praise, might result
in a reduced need for supervision. Cohesive work groups
manage themselves in order to maintain
their status as a team. Standardized jobs with clear rules and
procedures dictate how to perform with or without the presence
of a leader.
The substitutes for leadership approach offers two primary
contributions to leadership theory. First, the model explains the
importance of the work situation
when describing leader activities and effectiveness. Second, the

approach points out situations in which leaders are limited by
circumstances, as well as those in
which they can take advantage of worker independence and can
therefore focus on other tasks than continual monitoring of the
workplace.
Leader-Member Exchange Theory
One assumption that theorists should not make is that leaders
view all employees or subordinates in the same way. Instead,
leader-member exchange theory
suggests that leaders tend to form special bonds with a small
number of followers, known as the leader's in-group. These
individuals receive the greatest
amount of leader attention and enjoy certain privileges.
Members of the leader's out-group have less access to the
leader's time, receive fewer organizational
rewards, and often develop more formal interactions with the
leader.
Over time, the leader chooses members of the in-group and out-
group, and the selections are most likely based on employee
characteristics. Those most
compatible with the leader, and especially those the leader
perceives will be higher performers, become members of the in-
group. Leader-member exchange
theory posits that in- and out-group status remains relatively
stable between a leader and his or her chosen followers over
time (Duchon, Green, & Taber, 1986).
Research supports the concept that leaders do tend to favor
certain employees, and that those in the in-group express higher
levels of satisfaction with a
supervisor, enjoy higher performance ratings, and become less
likely to quit (Gerstner & Day, 1997). The reason may be a
simple self-ful�illing prophecy in which

the leader predetermines which employees will be the most
likely to succeed by granting them in-group status. Logically, a
leader could be advised that creating
out-groups is counterproductive in the sense that it will alienate
certain employees; therefore, leaders should attempt to establish
positive and inclusive bonds
with all employees.
An extension of the leader-member exchange approach
considers another level in the organizational hierarchy
(Dansereau, Graen, & Haga, 1975). A vertical dyad
is the linkage between a leader at one rank and a subordinate at
the next lower rank. Figure 8.3 displays the relationship a
supervisor has with a higher-ranking
manager as well as with employees at lower levels. This leader
becomes a linking pin between the two sets of vertical dyads.
Figure 8.3: Leaders as linking pins
A supervisor is a linking pin between subordinates and a higher-
ranking manager.
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Clearing a path can include anything from
collaboration
with employees to setting challenging goals.
Topp_Yimgrimm/iStock/Thinkstock

Source: Hersey, P., Blanchard, K. H., &
Johnson, D. E. (2001). Management of
organizational behavior: Leading human resources (8th ed.).
Upper
Saddle River, NJ: Prentice-Hall.
Employees examine the relationship their immediate supervisor
has with those of higher rank. When they believe the supervisor
enjoys an in-group relationship
with higher-level managers, the subordinates view that
supervisor in a more favorable light, believing the supervisor
has the following attributes:
superior technical knowledge
access to information
upward in�luence
These factors encourage employees to build in-group
relationships with the supervisor. When out-group status is
perceived, employees tend to believe their
careers have a lower chance of success (Dansereau, Graen, &
Haga, 1975).
Although this model describes how leader-member relations are
formed through
observations of the leader's interaction with those of higher
ranks, it does not prescribe ways
to improve the relationship. It does improve understanding of
how individuals interact with
supervisors in the workplace, and "how things work" in terms of
promotions and the more
political side of human resource decisions and leader activities
and relationships in
organizations. Someone who perceives an out-group
relationship with his or her supervisor
or between that supervisor and those of higher rank may

understandably conclude that it
may be time to look elsewhere for a job, because limited
chances to advance may be available.
Path-Goal Theory
As noted at the beginning of this chapter, the theories developed
late in the 20th century
include several distinct perspectives. Among these was the path-
goal theory developed by
Robert House (1971). Path-goal theory suggests that effective
leaders clear and clarify paths
for employees to help them accomplish both personal and
professional goals. Clearing the
path refers to a leader's ability to help people move towards
their goals, remove barriers, and
provide appropriate guidance for accomplishing assigned tasks.
House identi�ies four
leadership behaviors that are associated with the theory:
directive leadership
supportive leadership
achievement-oriented leadership
participative leadership
The directive leadership style is one in which the leader lets
employees know what is
expected, gives directions on how and what to do, maintains
standards of performance, and
clari�ies the leader's role in the group. Supportive leadership
entails treating group members
as equals, being approachable, and showing concern for the
well-being of employees.
Achievement-oriented leadership involves setting challenging
goals, expecting high levels of performance, and emphasizing
continuous improvement in

performance. Participative leadership involves including
employees in decision making, consulting with employees, and
asking for, and using, employee
suggestions when making decisions.
Path-goal leadership theory �irst suggested that a manager
should display leadership styles that complement the needs of
the situation. In a later iteration of this
approach, two contingency factors were identi�ied that will be
different or unique in each company: employee characteristics
and environmental factors.
Subordinate contingency factors include locus of control, task
ability, need for achievement, experience, and need for clarity.
Environmental factors include
independent task structures and interdependent task structures.
Relationships between the variables are displayed in Figure 8.4.
Figure 8.4: Reformulated path-goal theory
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A leader's behavior is shaped by environmental and subordinate
contingency factors. Effective leaders clear the path for
employees to accomplish their goals.
Source: Adapted from: House, R. J. (1996,
Autumn). Path-goal theory of leadership:
Lessons, legacy, and a reformulated theory.
Leadership Quarterly,
323–352.

The predictions that arise from the relationships between
environmental and subordinate contingency variables identify
times when the leader's behaviors
match the environmental and subordinate characteristics,
thereby increasing on-the-job performance as well as employee
satisfaction with the leader and the
company. Table 8.5 suggests ways leaders can respond to these
variables in order to achieve such positive organizational
outcomes.
House further re�ined his original theory by suggesting that
intrinsic motivation plays a key role in leader effectiveness,
especially when it develops through the
empowerment of employees. The leader activities that build
con�idence in employees eventually result in stronger levels of
motivation within the workers
themselves in addition to the enticements, encouragement, or
rewards provided by the leader (House, 1996).
Table 8.5: Leader behaviors
Category Description of leader activities
Path-goal clarifying Clarify performance goals, provide task
guidance, clarify paths to rewards contingent on performance.
Achievement-oriented Set challenging goals, showing
con�idence in employees.
Work facilitation Use standard management practices of
planning, organizing, and control combined with coaching,
mentoring, teaching, and
providing feedback to workers.
Supportive Display concern for employee well-being,
friendliness, approachableness.

Interaction facilitation Resolve disputes, facilitate
communication, support all positions, collaboration and
teamwork.
Group-oriented decision-
making
Outline problems rather than offering solutions to the group,
encourage participation, pass along information to assist in
decisions.
Representation and
networking
Maintain positive relationships within the group and with
outsiders, attend social functions and ceremonies.
Value-based Establish a vision, show con�idence in self and
others; relate performance behaviors to the vision.
Source: House, R. J. (1996, Autumn). Path-goal
theory of leadership: Lessons, legacy, and a
reformulated theory. Leadership Quarterly, 323–
352.
Results from research examining the matches between leader
behaviors, environmental characteristics, and subordinate
characteristics, as proposed in path-
goal theory, have been mixed (Wofford & Liska, 1993). Critics
note that the combinations of the relationships depicted in
Figure 8.4 would be quite dif�icult to
precisely identify. One response to these outcomes has been to
return to the simplest propositions made in the theory. Effective
managers clarify paths to goals
by understanding worker valences or preferences, clarifying
jobs and assignments, and rewarding successful performance.

Consequently, this simpli�ied view of
the model explains the three main things that can be done to
improve one's leadership style.
Consider, for example, a sales manager with three subordinates.
One employee tends to most value money, seeking to achieve
bonuses, commissions, and other
pay incentives. A second is more interested in moving up the
corporate ladder and desires opportunities to learn about and
practice leadership. The third is near
the end of his career and mostly wants stability.
The sales manager can help each person individually by
understanding these differences. Next, the manager can explain
to the �irst person how to generate new
leads, make the best sales pitch, and close deals. When the
person improves sales �igures, the correct rewards will follow
(cash incentives, for example). For the
second, the manager can take additional time to explain how to
manage others and help the employee �ind opportunities to
lead, such as by chairing a committee
or leading a task force. A performance appraisal stating the
person has "leadership potential" rewards the individual with
what she desires the most. For the
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third, the emphasis would shift to methods for reassuring the
individual that, if he or she continues at the present rate of
performance, the job and the person's

future are secure. In essence, the leader can adapt the ideas
displayed in Table 8.5 to each individual employee.
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8.5 Contemporary Leadership Theories
The new millennium has witnessed increased attention to a
series of additional theories about leadership, some of which
were �irst proposed in the latter half of
the 20th century. Among them, the transformational leadership
model enjoys a great deal of popularity. Others with
considerable followings in some
organizations include charismatic leadership, servant
leadership, and authentic leadership.
Transformational Leadership
Transformational leadership engenders trust, seeks to develop
leadership in others, and exhibits self-sacri�ice.
Transformational leaders serve as moral
agents, focusing themselves and followers on objectives that
transcend the more immediate needs of the work group
(Dumdum, Lowe, & Dvorak, 2002). In
contrast, transactional leadership concentrates on clarifying
employee roles and providing job instructions. Transactional
leaders establish contingent
rewards based on performance and employee accomplishments.

Managers actively search for exceptions to rules and standards
and make corrections.
Transactional leaders intervene when standards are not met
(Bass, 1990).
Transactional leadership can lead to powerful effects on
followers and create several desirable outcomes, as displayed in
Table 8.6.
Table 8.6: Transformational leadershipprocesses
Transformational effects on followers and work groups
Outcomes
Increased intrinsic motivation, achievement orientation, and
goal pursuit Personal commitment to the leader and the
individual's vision
Increased identi�ication with and trust of the leader Self-
sacri�icing behavior
Increased identi�ication and cohesion among group members
Organizational commitment
Increased self-esteem, self-ef�icacy, and intrinsic interests in
goal accomplishment Task meaningfulness and satisfaction
Shared perceptions of goal importance Increased individual,
group, and organizational performance
Key leader behaviors identi�ied in the transformational
leadership literature include the following:
inspirational motivation
idealized in�luence
individual consideration
intellectual stimulation

Inspirational motivation involves establishing an enticing vision
of the future and making persuasive and emotional arguments
combined with enthusiasm and
optimism. Idealized in�luence means that leaders sacri�ice for
the good of the group, act as role models, and display high
ethical standards. Individualized
consideration includes providing support, encouragement,
empowerment, and coaching of employees. Intellectual
stimulation means that transformational
leaders encourage employees to question the status quo and seek
innovative and creative solutions to organizational problems.
Transformational leadership theory has gained a great deal of
traction in the new millennium. Many companies believe
�inding such leaders and training others
in these behaviors are the true keys to organizational success.
Transformational leadership in�luences employee performance
by lowering frustration and
increasing optimism (McColl-Kennedy & Anderson, 2002).
Charismatic Leadership Theory
Closely related to concepts regarding transformational leaders,
charismatic leadership theory notes that many times followers
attribute heroic or extraordinary
leadership abilities to some individuals when they exhibit
certain behaviors (Conger & Kanungo, 1998). Table 8.7
identi�ies key charismatic leader
characteristics.
Table 8.7: Charismatic leader characteristics
Characteristic Description
Vision and articulation Communicates an idealized goal to
others.

Personal risk Is willing to take high personal risks and engage
in self-sacri�ice.
Environmental sensitivity Makes realistic assessments about the
environment and resources needed to make changes.
Sensitivity to follower needs Understands others' abilities and
responds to their needs.
Unconventional behavior Does things that are novel and counter
to traditional norms.
Source: Conger, J. A., & Kanungo, R. J. (1998).
Charismatic leadership in organizations. Los Angeles,
CA: Sage.
A four-step process explains the ways in which charismatic
leaders in�luence followers. First, the leader expresses an
appealing vision that leads followers to
believe a better future can be constructed. Second, the leader
sets high performance expectations of others but also expresses
con�idence that those outcomes
can be achieved. Third, through words and actions, the leader
establishes values for followers to emulate. Fourth, the personal
sacri�ices made by the leader
challenge others to be courageous and help achieve the vision
(Shamir, House, & Arthur, 1993).
Leadership experts believe a person can become a charismatic
leader by engaging in three activities. First, an individual must
create enthusiasm, expressing
ideas not just with words, but also with deeds and the full set of
communications skills at your disposal to help develop an aura
of enthusiasm. Second, the leader
should create bonds with others to inspire action. Third, the
person must tap into the emotions of others in a way that brings

out their potential (Richardson &
Thayer, 1993).
Some evidence suggests that charismatic leaders increase levels
of performance and satisfaction in followers (Kirkpatrick &
Locke, 1996). Those working with
such leaders give extra effort due to bonds with the leader. They
also express satisfaction as a result of those connections.
Charismatic leadership may be situation speci�ic. What inspires
employees in one setting may not work as well in others. Also,
charismatic leadership tends to
focus on a sweeping vision of the organization and its future
direction. It may be that the behaviors and activities needed to
seek such goals are limited to those
at the rank of CEO or top manager, and to entrepreneurs.
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Richard Branson.
Ton Koene/age fotostock/SuperStock
Additional criticism of the charismatic model includes the
premise that not all organizations may bene�it from such an
individual. Companies in crisis or those
requiring strong direction due to environmental challenges
would be best served by such individuals because subordinates
will be looking to leaders who can
provide a clear sense of direction as to how to survive the
emergency. In contrast, stable companies with calm

circumstances may be better suited to a different
style of leadership, one less dramatic or charismatic. Finally,
some charismatic leaders have seemingly become more
interested in the trappings of high rank (a
nice of�ice, support staff, an expense account) than in
continuing to serve as effective organizational directors (Raelin,
2003).
The contrast to charismatic leadership, termed level 5
leadership, combines individual capability, team skills,
managerial pro�iciencies, and motivational skills
with personal humility and professional will. Rather than self-
aggrandizing, a level 5 leader sets ego aside in the search to
achieve organizational goals. Over
time, studies of level 5 leadership and charismatic leadership
will yield interesting results as to which style bene�its
organizations the most, and under which
conditions. The OB in Action feature regarding Richard
Branson notes an individual who is both charismatic and
exhibits level 5 leadership attributes.
OB in Action: Richard Branson
Many people know that entrepreneur Richard Branson is one of
the richest people in the world. Using
the Virgin brand, Branson built an entire airline as well as a
record and entertainment company, among
other businesses. What some might not know, however, is how
he was able to succeed. Among the praise
that has been spoken or written regarding this amazing pioneer
are stories of how he leads.
When asked to describe his top three leadership principles,
Branson answered: Listening, learning, and
laughter. He said, "Listening enables us to learn from each
other, from the marketplace, and from the

mistake that must be made in order to get anywhere that is
original and disruptive. I learn so much from
guests and employees that way" (Schawbel, 2014).
Branson argues that learning and leadership go together. He
believes part of his success can be explained
by the willingness to listen to and learn from other people.
Regarding laughter, Branson states:
My number one rule in business, and in life, is to
enjoy what you do. Running a business
involves long
hours and hard decisions; if you don't have the passion
to keep you going, your business will more than
likely fail. If you don't enjoy what you are doing,
then you shouldn't be doing it. (Schawbel,
2014)
Branson believes in breaking the rules. In fact, he argues that he
never learned the rules in the �irst place.
Among other things, this leads to hiring people who can help
with his weaknesses. He looks at
personality more than pedigree when making selections, looking
for people who will be compatible with
his approach.
When making personnel decisions, Branson stresses a promote-
from-within approach. He said:
I like to take chances on people, and whenever
possible, promote from within—it sends a great
message
to everyone in the company when someone
demonstrates a passion for the job and
leadershipskills at

every step along the way and is rewarded with a
leadershiprole.
With his many personal triumphs along with business
achievements, Branson has found a place among
the most inspiring, unconventional, charismatic leaders of the
past few decades. His emphasis on valuing
others indicates a level 5 leadership orientation as well.
Re�lection and Application Questions
1. Do you believe listening, learning, and laughter are keys to
leadership in every situation?
2. How might a promote-from-within policy hurt a company, or
is it always the best approach for a leader?
3. Evaluate Richard Branson's leadership style based on his
comments in this story.
Servant Leadership
It is possible that the early theories of leadership developed
when those in charge were somewhat authoritarian, and success
depended on that attribute. The
behavioral perspective incorporated a greater consideration of
follower attributes. Then situational/contingency era emerged,
further combining both
performance and people. In that era, leaders were to be both
results-oriented and people-oriented. More recently, leadership
writers emphasized empowering
employees, so that much of a leader's responsibility involved
developing and utilizing followers. As leadership thinking
shifted from an analysis of leaders to a
combination of leaders and followers to a greater weight given
to followers, the introduction of servant leadership was the
result.

In 1970, Robert Greenleaf presented many original concepts in
The Servant as Leader. Servant leadership stresses
serving others, placing the needs of others
above one's own, helping others learn, grow, and develop, and
seeing a leader's primary role as service to employees,
customers, shareholders, communities, and
the general public. These ideas gained additional traction in the
world of business as the new century unfolded. In his book,
Greenleaf offered four basic precepts
regarding servant leadership:
1. Put service before self-interest. A servant leader is
more concerned about helping and serving others than personal
success, status, �inancial rewards, or
power. Organizations exist to bene�it employees and others,
not just for �inancial gain. Leaders are committed to doing
what is right no matter what the
cost.
2. Listen �irstto buildcon�idence in others. Instead of
imposing their will on others, servant leaders are committed to
listening to others and discovering
their needs and concerns and what it will take to make them
successful.
3. Inspire trust by being trustworthy. Servant leaders earn
trust by being honest, moral, true to their words, committed to
focusing on the well-being of
others, and transparent in what they do.
4. Nourish others and help them become whole.
Servant leaders genuinely care about followers and about
developing their full potential.

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Typical characteristics of servant leaders include humility and
sel�lessness, serving and developing others, emphasizing
shared leadership, having a sel�less love
for others, valuing people, modeling integrity and authenticity,
inspiring and in�luencing others, being honest and trustworthy,
being a good steward,
empowering others, forgiving others, consulting and involving
others, and committing to building a sense of community.
While individual scholars posit differing views of the
characteristics of servant leaders, a general agreement includes
the belief that servant leaders exhibit a
desire or sense of calling to serve others, they build positive
relationships with others and are committed to developing the
potential of others, and they anchor
their decisions and actions in ethical and moral principles.
Servant leadership has received praise from a number of well-
known leadership writers. Also, supporting research indicates
that servant-oriented behavior
produces better results in employees and organizations. Servant
leadership has been embraced as a guiding philosophy for many
companies such as Service
Master, Southwest Airlines, The Toro Company, and Men's
Warehouse.
The Bene�its of Servant Leadership
Former publishing executive James Autry discusses the
bene�its and challenges of practicing servant leadership.

Critical Thinking Questions
1. Do you agree that nurturing leadership is more
challenging than what Autry calls "tough guy"
management? Why or why not?
2. What may be some drawbacks to this leadership
approach?
Authentic Leadership
An additional theory which captured some attention in the past
few decades is authentic leadership, as �irst developed and
described by Harvard Professor and
former Medtronic CEO Bill George (2007). In contrast to the
idea that "leadership is acting," the authentic model poses a
more genuine approach to the role and
to interactions with others. George suggests authentic
leadership consists of �ive qualities (George, 2015).
Understanding one's purpose
Practicing solid values
Leading with the heart
Establishing connected relationships
Demonstrating self-discipline
Those who subscribe to this approach suggest that authentic
leaders frame their life stories in a manner that enables them to
view their world as individuals
who learn from their experiences, not as passive observers.
They examine their experiences and re�lect on them to grow as
people and as leaders. This involves
continual self-exploration. They rely on formal and informal
support networks to help them stay grounded and lead
integrated lives (George, Sims, McLean, and

Mayer, 2007). Others summarize authentic leaders as follows
(Kruse, 2013):
self-aware and genuine
mission driven and focused on results
willing to lead with their hearts and not just their minds
not afraid to show their emotions and vulnerabilities
focused on the long-term
The approach points out that a leader can be emotionally
connected with others without being "soft." Perhaps the best
example in the past few decades would be
the highly-successful football coach Dick Vermeil, who was
known for crying spontaneously and freely in front of his team,
but was also tough-minded and highly
respected by players and others who interacted with him.
Critics of this approach argue it too much resembles early trait
theories and does not re�lect what transpires in the workplace.
At the same time, other academics
and businesspeople believe it represents a clear pathway to a
truly rewarding and successful career as a leader.
Ethical Implications for Leaders
At the beginning of this chapter, leadership was de�ined as
"in�luencing behaviors." Numerous examples of ethical
leadership are available, including Seth
Goldman, founder of Honest Tea, Indra Nooyi, CEO of PepsiCo,
and Anthony L. Spezia, former CEO of Covenant Health
Systems.
Unfortunately, in many cases, behaviors and other
organizational outcomes have been in�luenced by leaders in
negative rather than positive ways. Examples
include the failure of British Petroleum leader Tony Hayward

during the 2010 Gulf of Mexico oil spill (the corporation
reassigned Hayward to a different part of
the world); Home Depot CEO Robert Nardelli, whose
termination following his troubled leadership of the corporation
came with a $210 million severance
Servant Leadership
From Title: Moyers & Company: Issues of Art and Heart
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d=52774)
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Leaders have the power to make both a
positive and
negative impact, making ethics training an
important
agenda item for any burgeoning leader.
Wavebreakmedia Ltd./Wavebreak Media/Thinkstock
package; and more recently, John Dumpf, disgraced CEO at
Wells Fargo, and Martin Shkreli,
who was accused of price gouging as CEO of Turing
Pharmaceuticals.

These and other incidents have led major organizations such as
the Academy of Management
to stress that ethics training should be part of any leadership or
management training. Ethical
leadership training programs involve sensitivity to ethical and
moral issues, developing
frameworks and guideposts to inform ethical dilemmas, using
coaching and mentoring
programs, and providing ethics counseling when problems arise.
Governmental efforts to
regulate unethical actions by leaders have also been undertaken,
most notably in the area of
�inancial fraud. The goal is to provide today's students and
future leaders with a strong ethical
and moral background prior to their entry into the world of
commerce.
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Summary and Resources
Chapter Summary
Leadership is in�luencing the behaviors of individuals and
groups to work toward predetermined goals. Effective leaders
in�luence behaviors in positive ways.

The various categories of leadership theories include the trait,
behavioral, and situational and contingency theories, late 20th
century approaches, and even
more recent theories.
Trait theory suggests that leaders exhibit physical and
personality characteristics which differentiate them from
followers. Similarly, the great man theory
posited that some individuals are simply born with speci�ic
leadership qualities while others are not. Effective leaders come
in all shapes, sizes, nationalities, age
groups, and levels of attractiveness and from both genders.
Early evidence suggested that some of the Big Five personality
factors are predictive of becoming a
leader; however, they may not predict effective leadership.
Behavioral theories developed at the onset of World War II
sought to identify speci�ic behaviors associated with successful
leadership, which would then make it
possible to train employees to become more effective leaders.
The Michigan study identi�ied job-centered or production-
oriented managers and employee-
centered leaders, arguing that people-oriented leaders would
build better teams and create a better workplace environment.
The Ohio State study categorized
leader behaviors as those that initiated structure (production
focused) and showed consideration for others (people focused),
suggesting that leaders who
exhibited both types of behaviors would be more effective. The
leadership grid argued for essentially the same type of
managerial style. The most recent
behavioral approach incorporates leader developmental
activities into the primary dimensions and proposes a
relationship between those behaviors and
positive organizational outcomes.

The situational and contingency models suggest that no one
universal style of leadership will be most effective. Situational
theories propose adapting leader
style from task-oriented to relationship-oriented depending on
the situation. The contingency approach recommends task-
oriented (low LPC) leaders for
situations with low or high control and relationship oriented
leaders (high LPC) for situations exhibiting moderate levels of
potential control. Hersey and
Blanchard's situational leadership model suggests alteration of
leader style based upon employee readiness.
Late 20th century views of leadership theory include an eclectic
set of ideas and models. The substitutes for leadership approach
discusses limitations of the
ability of a leader to function and circumstances under which
other forces take the place of leadership.
Leader-member exchange theory suggests that leaders create in-
groups of followers they favor and out-groups of those they do
not. The vertical dyad linkages
model suggests that followers observe the in- or out-group
status of their leaders with those of higher rank. When in-group
status is perceived, followers become
more willing to build in-group relationships with their leaders
and see those leaders in a more favorable light.
Path-goal theory suggests that leader behaviors will be
modi�ied by environmental contingency factors and
subordinate contingency factors, and this should be
accounted for when predicting organizational outcomes and
success. Leaders can adapt their styles to �it with the
circumstances they encounter.
In the new millennium, additional theories have emerged.
Transformational leaders engender trust, seek to develop

leadership in others, exhibit self-sacri�ice,
and serve as moral agents, focusing themselves and followers on
objectives that transcend the more immediate needs of the work
group.
Charismatic leaders increase levels of performance and
satisfaction in followers by establishing and communicating a
vision while building bonds with
followers. Servant leaders embody a strong emphasis on helping
others rather than simple pursuit of personal objectives. Level 5
leadership combines individual
capability, team skills, managerial pro�iciencies, and
motivational skills with personal humility and professional will.
Authentic leaders understand their purpose, practice solid
values, lead with the heart, establish connected relationships,
and demonstrate self-discipline.
CASE STUDY: Strong Medicine
Marcus Reynolds faced many challenges as he assumed
leadership of the Action Pharmaceutical company. He knew the
company's employees were
counting on his guidance to lead the way in the next decade.
The entire industry was experiencing scrutiny and negative
publicity. It was his responsibility
to restore the �irm's good name and solid reputation.
Action Pharmaceutical's primary areas of drug development
were antibiotics, pain-relieving medicines including anti-
in�lammatory medicines, and
antiviral products. The company enjoyed a great deal of success
in pain-reduction products while other companies experienced
recalls and lawsuits over
drugs with dangerous side effects.

Four major challenges continue to in�luence the pharmaceutical
industry. First, governmental regulatory agencies, especially the
Food and Drug
Administration (FDA), have received substantial criticism
regarding operational methods and resultant �indings.
Consumers express lower levels of
con�idence in FDA approvals. Second, governments in many
countries have established price controls, which in turn reduce
company revenues and
funding for continuing research. Third, small-molecule research
has encountered increasing dif�iculty, and �inding
technologies to meet these needs has
been problematic. Fourth, patent lives are very short and
generics often appear on the market before name-brand drugs
have recovered costs and become
pro�itable (Buxton, 2010).
Reynolds was frustrated by the tenor of the debate over
medicines. He was aware of the negative image pharmaceutical
companies endured during the
2009–2010 debate over universal health care in the United
States. He was concerned about continuing comments regarding
the lower prices for drugs in
Canada, where governmental controls exist.
Reynolds believed it was time to establish a new vision for the
company to respond to this turbulent environment. He believed
that the message should
begin with Action Pharmaceutical serving as a health resource
to the United States and the world. The message should be
presented to internal
employees and move outward that companies such as his were
not the enemy; rather, they should be viewed as partners in
efforts to improve health and
the lives of citizens.

As part of his efforts, Marcus planned to meet with as many
individuals and teams as possible in the coming year. He wanted
to stress that, in his mind,
the company was a family. He believed that the employees
should share his vision of Action Pharmaceutical as a helping
agent to improve morale and
build for the future. It wasn't the culture of his company that
was the concern, but rather the environment surrounding the
company. Now was the time to
get started.
Case Questions
1. What was the primary leadership challenge facing Marcus
Reynolds?
2. What could Marcus learn from the traits and characteristics
models of leadership?
3/5/2019 Print
3. How might the behavioral theories of leadership assist
Marcus?
4. What substitutes for leadership might be present in Action
Pharmaceutical?
5. Should Marcus seek to become a transformational or
charismatic leader? If so, how would he achieve that status? If
not, why should he use some
other approach or method?

Review Questions
Click on each question to see the answer.
What Big Five personality characteristics have been
potentially related to effective leadership?
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The Big Five are extroversion, agreeableness,
conscientiousness, neuroticism vs. emotional stability, and
openness to experience.
Describe political intelligence and emotional intelligence.
Emotional intelligence, which is the ability to manage oneself
and one's relationships in mature and constructive ways, appears
to predict leader success.
Political intelligence, which indicates the willingness to use
power and intimidation to achieve various ends, also appears to
be an asset in circumstances in
which change is required and subordinates are resistant to those
changes.
What are the four behavioral theories of
leadership?
The four behavioral theories of leadership include the
University of Michigan study, the Ohio State study, the

leadership grid, and the Scandinavian development-
oriented approach.
Which authors developed situational theories of
leadership?
Robert Tannenbaum and Warren Schmidt's situational theory of
leadership suggested a different third key leadership variable:
effectiveness. William Reddin
identi�ied the two main dimensions of leadership, relationship
oriented and task oriented, which were to be used along a
continuum of task and relationship
orientation.
What are the threecharacteristics of the situation in
Fiedler's contingency theory model?
Fielder's three contingency variables are leader-member
relations, or the extent to which a leader has, or does not have,
the support and loyalty of the work
group; task structure, which is the extent to which tasks are
routine, unambiguous, and easily understood; and position
power, which is the degree of power a
leader has to reward and punish.
What role does readiness play in Hersey and
Blanchard's situational leadershipmodel?

Readiness refers to the extent to which a follower possesses the
ability and readiness to perform a given task. Employees with a
high level of readiness require a
different leadership style than employees with a low level of
readiness.
What threecategories of factors create substitutes
for leadership?
The substitutes for leadership categories are subordinate
characteristics (experience and professionalism); task
characteristics (machine-paced work and
intrinsically satisfying and motivating jobs); and organizational
characteristics (cohesive work groups, standardized jobs, and
formalized rules and procedures).
What roles do in-groups and out-groups play in
leader-member exchange theory and vertical dyad
linkages theory?
Members of the leader's in-group receive the greatest amount of
leader attention and enjoy other privileges. Members of the
leader's out-group have lower
access to the leader's time, receive fewer organizational
rewards, and tend to develop more formal interactions with the
leader.
What are the primary components of path-goal
theory?

The components are leader behaviors, environmental
contingency factors, subordinate contingency factors, and
outcomes (performance and satisfaction).
De�ine transformational leadershipand charismatic
leadership.
Transformational leaders engender trust, seek to develop
leadership in others, exhibit selfsacri�ice, and serve as moral
agents, focusing themselves and followers
on objectives that transcend the more immediate needs of the
work group. Charismatic leadership theory notes that many
times followers attribute heroic or
extraordinary leadership abilities to some individuals as they
exhibit certain behaviors.
Analytical Exercises
1. Explain how the Big Five personality characteristics might be
used (in a person's mind) to evaluate a new leader in the context
of attribution theory.
2. Evaluate the behavioral theories in terms of how each would
apply to the following situations:
managing the night shift at a fast-food restaurant
coaching a college women's basketball team
managing an e-commerce program for a major retail chain
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your most recent job experience
3. Identify the common elements among the behavioral theories,
the situational and contingency theories, and path-goal theory.
Explain how their uses are
the same or different in each theory.
4. Explain the common elements among Hersey and Blanchard's
situational leadership model, transformational leadership
theory, and charismatic
leadership theory. Explain how the theories are the same and
how they are different.
5. Some authors believe charismatic leaders focus on
themselves and level 5 leaders focus on helping others achieve
organizational outcomes. Explain the
type of leader that best �its each of the following situations.
What role would the substitutes for leadership play in each of
these circumstances?
a medical research team developing a preventive vaccination for
HIV/AIDS
a retail store on the verge of insolvency/bankruptcy
a professional sports team
a 24-hour news network
Key Terms
Click on each key term to see the de�inition.
consideration

Leadership behavior that expresses concern for employees by
establishing a warm, supportive, friendly climate.
in-group
Set of individuals that receive the greatest amount of leader
attention and enjoy certain privileges.
initiating structure
Leadership behavior that organizes and de�ines what group
members should be doing.
leadership
In�luencing behaviors of individuals and groups toward
predetermined goals in organizations.
level 5 leadership
A combination of individual capability, team skills, managerial
pro�iciencies, and motivational skills with personal humility
and professional will.

linking pin
The individual who connects two sets of vertical dyads: the
vertical dyad of the individual and a higher-ranking manager
and the vertical dyad of the individual
and a lower-level employee.
out-group
Set of individuals that have less access to the leader's time,
receive fewer organizational rewards, and often develop more
formal interactions with the leader.
political intelligence
The willingness to use power and intimidation to achieve
various results.
readiness
The extent to which a follower possesses the ability and
preparation to perform a given task.

servant leadership
A style of leadership that stresses serving others, placing the
needs of others above one's own, and helping others learn,
grow, and develop.
transactional leadership
A style of leadership that concentrates on clarifying employee
roles and providing job instructions.
transformational leadership
A style of leadership that seeks to engender trust, develop
leadership in others, exhibit selfsacri�ice, and serve as a moral
agent, where the leader focuses on
objectives that transcend the more immediate needs of the work
group.
Flashcards

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