This chapter introduces the concept of leadership and provides a framework for understanding it. It defines leadership as inspiring others to achieve goals and distinguishes it from management, which focuses more on maintaining stability. The chapter outlines nine common leadership roles and explains that leadership skills can be developed through conceptual knowledge, examples, experiential exercises, feedback, and practice. It also notes that while leadership offers satisfactions like prestige, it also involves frustrations like stress and limited authority relative to responsibility. The chapter aims to provide a foundation for understanding leadership.

1. CHAPTER 1
The Nature and Importance of Leadership
The introductory chapter has several important purposes. Readers are given a detailed description of
the meaning of leadership. Although most readers have studied something about leadership, most can
benefit from a refresher and an update. Another important purpose of the chapter is to explain the
various leadership (not management) roles and the various rewards and frustrations contained in
those roles. Finally, this chapter presents a framework and model for understanding leadership and
explains how leadership skills are developed.
CHAPTER OUTLINE AND LECTURE NOTES
I.THE MEANING OF LEADERSHIP
To be a leader, one has to make a difference and facilitate positive changes. Leaders inspire
and stimulate others to achieve worthwhile goals. A useful definition of leadership is the ability
to inspire confidence and support among the people who are needed to achieve organizational
goals.
A. Leadership as a Partnership
A current perspective on leadership is that it constitutes a partnership, being
connected to another in such a way that the power between the two is approximately
balanced. Partnership occurs when control shifts from the leader to the group member.
According to Peter Block, a partnership involves (a) an exchange of purpose, (b) the right to
say no, (c) joint accountability, and (d) absolute accountability. A closely related idea is
stewardship theory that depicts group members (or followers) as being collectivists, pro-
organizational, and trustworthy.
B. Leadership Versus Management
Leadership is but one of the four major functions of management (planning,
organizing, controlling, and leading). Current thinking emphasizes that leadership deals with
change, inspiration, motivation, and influence. In contrast, management deals more with
maintaining equilibrium and the status quo. Table 1–1 summarizes these differences. Locke
simplifies matters by stating that the leader creates a vision, and the manager implements
it. Despite these distinctions, organizational leaders must still be good managers, and
effective managers must also carry out leadership activities.

2. II. THE IMPACT OF LEADERSHIP ON ORGANIZATIONAL PERFORMANCE
An important justification for studying leadership is that leaders affect organizational
performance. Many faltering business firms and athletic teams bring in a new top leader to
spearhead a turnaround.
A. Research and Opinion: Leadership Does Make a Difference
A smattering of evidence supports the contention that leadership affects
organizational performance. A team of researchers investigated the impact of transactional
(routine) and charismatic (inspirational) leadership on financial performance, as measured
by net profit margin. They found that transactional leadership was not related to
performance, and that charismatic leadership was most strongly related to performance in
an uncertain environment. A case example is that Allen Questrom achieved some good
results in attempting to turn around a poorly performing J.C. Penney. Whether or not
leaders do make a difference, organization members perceive that they do, as suggested
by attribution theory, the process of attributing causality to events.
B. Research and Opinion: Formal Leadership Does Not Make a
Difference
According to the antileadership argument, leadership has a smaller impact on
organizational outcomes than do situational forces.
1. Substitutes for Leadership. One viewpoint is that many organizations
contain substitutes for leadership, factors in the work environment that provide
guidance and incentives to perform, making the leader’s role almost superfluous. These
substitutes for the leader and the leadership function include closely knit teams of highly
trained individuals, intrinsic satisfaction, computer technology (monitoring of work by
computer), and professional norms. Jim Collins, author of Good to Great, believes that
corporate leaders are slaves of much larger forces. He concludes that Jack Welch was
the product rather than the producer of General Electric’s success during his long reign.
2. Leader Irrelevance. Pfeffer argues that leadership is irrelevant to most
organizational outcomes because factors outside the leader’s control are important.
Part of the argument is that leaders have limited control over resources, and that top
leaders whose values are compatible with those of the firm are chosen. We believe
strongly that despite these constraints leaders still have key roles.
3. Complexity Theory. This theory holds that organizations are complex
systems that cannot be explained by the usual rules of nature. Leaders and managers
can do little to alter the course of the complex organizational system.
III. LEADERSHIP ROLES
Understanding leadership roles helps explain leadership. A role is an expected set of activities
or behaviors stemming from the job. The nine leadership roles covered here are:
1. Figurehead (ceremonial activities).
2. Spokesperson (keeping key groups informed about the activities of the
organization or organizational unit).
3. Negotiator (making deals with others for needed resources).

3. 4. Coach and motivator (recognizing achievement, giving feedback, and giving
suggestions for performance improvement).
5. Team builder (building an effective team).
6. Team player (being a good team member oneself).
7. Technical problem solver (advising others on solving problems and being an
individual contributor).
8. Entrepreneur (suggesting innovative ideas and furthering the business).
9. Strategic planner (setting a direction for the organization, helping the firm deal
with the external environment, and policy setting).
An important implication of these roles is that managers at all levels can and should exert
leadership.
IV. THE SATISFACTIONS AND FRUSTRATIONS OF BEING A LEADER
Being a leader offers many joys but also some frustrations. Because most readers of this book
aspire toward leadership positions or currently occupy such a position, this information allows
for meaningful class discussion.
A. Satisfactions of Leaders
The specific satisfactions of leaders are somewhat a function of the leadership
position. Nevertheless, here is a list of satisfactions that may be present in varying degrees
in many leadership situations:
1. A feeling of power and prestige.
2. A chance to help others grow and develop.
3. High income.
4. Respect and status.
5. Good opportunities for advancement.
6. A feeling of “being in on” things.
7. An opportunity to control money and other resources.
B. Dissatisfactions and Frustrations of Leaders
Despite the glory of being a leader, occupying a leadership or management
role has many built-in potential frustrations:
1. Too much uncompensated overtime.
2. Too many “headaches.”
3. Not enough authority to carry out responsibility.
4. Loneliness (being a leader limits the number of people one
can confide in).
5. Too many problems involving people.
6. Too much organizational politics.
7. The pursuit of conflicting goals (the central theme of these dilemmas
is attempting to grant others the authority to act independently, yet still get them
aligned).
V. A FRAMEWORK FOR UNDERSTANDING LEADERSHIP
Certain major sets of variables influence leadership effectiveness. The basic assumption
underlying the framework is as follows:
L = f (l, gm, s)

4. This formula means that the leadership process is a function of the leader, the group members,
and other situational variables. The model presented in Figure 1–2 extends the situational
perspective. The model states that leadership effectiveness can best be understood by
examining its key variables: leader characteristics and traits, leader behavior and style, group
member characteristics, and the internal and external environment. The four sets of variables
are interrelated, with some linkages stronger than others. An example of a strong link is that
leader characteristics and traits affect leader behavior and styles.
VI. SKILL DEVELOPMENT IN LEADERSHIP
Leadership skills are in high demand. Developing leadership skills is more complex than
developing a structured skill, yet these skills can be developed by following a general learning
model:
1. Conceptual knowledge and behavioral guidelines.
2. Conceptual information demonstrated by examples and brief
descriptions of leaders in
action.
3. Experiential exercises. Cases, role plays, and self-assessment
quizzes are included
here.
4. Feedback on skill utilization, or performance, from others.
Implementing some of the
skills outside the classroom will provide opportunities for feedback.
5. Practice in natural settings. A given skill has to be practiced many
times in natural
settings before it becomes integrated comfortably into a leader’s
mode of operation.
VII. GUIDELINES FOR ACTION AND SKILL DEVELOPMENT
Although the thousands of leadership studies published often conflict, the discipline of
leadership offers much useful information. The approach recommended here for applying
leadership information is to choose the formulation that seems to best fit the leadership situation
at hand. For example, a leader might need to combine creative problem solving and emotional
support to members to help the team rebound from a crisis.
COMMENTS ON EXPERIENTIAL EXERCISES
Leadership Self-Assessment Quiz 1-1: Readiness for the Leadership Role
The first self-examination exercise in the text has considerable face validity. The student reflects on a
series of attitudes and behaviors that are part of the leadership role. An intended byproduct of this
exercise is that people may have to develop a more positive attitude toward key aspects of a leader’s
job if they are to become effective leaders.
Like most of the instruments in the text, the Readiness for the Leadership Role quiz is intended
for self-reflection and possibly for research. Such quizzes should not be interpreted as validated
psychological instruments.

5. Leadership Skill-Building Exercise 1-1: Identifying Leadership Roles
Students usually cover the full gamut of roles in this type of exercise, thus prompting a practical view of
leadership roles. Several examples of this role analysis follow: (1) Questrom repeats vision, indicating
the strategic planner role; (2) “A business isn’t run by one person. It’s run by teams,” suggesting the
team builder and team player roles; (3) the veteran retailer has been charming employees, customers,
and creditors for years, perhaps indicating the coach and motivator roles; (4) trying to get back to
Penney’s roots as a department store of choice for middle-income Americans, indicating the strategic
planner role; (5) plan to centralize purchasing could be classified as the direction-setting aspect of the
strategic planner role; and (6) the only way to boost morale is to start making money again, suggesting
the coach and motivator role.
Leadership Skill-Building Exercise 1-2: What It Takes to Be a Leader
An insight to be gleaned from this exercise and similar ones in the text is that an important part of
leadership skill building is to try out new ideas one at a time, and then observe any difference in
impact.
COMMENTS ON DISCUSSION QUESTIONS AND ACTIVITIES
1. What would be several practical problems stemming from the idea that the leader creates a
vision, whereas the manager implements it?
One practical problem with this dichotomy is that the leader would appear to be making a
contribution only when he or she spells out a vision. At other times the leader should be spending
time gathering information to formulate a vision.
2. In recent years there have been dozens of financial scandals involving business executives (such
as the problems at Enron and Global Crossing). What impact has this information had on your
interest in becoming, or remaining, a leader in a business setting?
Many students may still be interested in pursuing a leadership career in business for such varied
reasons as (a) just a handful of crooked CEOs have been involved in the scandals, (b) good
opportunities await an honest leader, and (c) “I never realized you could make so much money
as an executive, so deal me in.”
3. Give an example of how you have exerted leadership on or off the job in a situation in which you
did not have a formal leadership position. Explain why you describe your activity as leadership.
Relevant examples here center on taking the initiative to accomplish something important, and
involving others in the activity. Examples include starting an employee network group, a recycling
campaign, an employee or student study group, or organizing a field trip. Both the initiative
aspect and influencing others indicate the exercise of leadership.
4. What would a boss of yours have to do to demonstrate that he or she is an effective leader and
an effective manager?
To demonstrate effectiveness as a leader and manager, the boss should engage in such
activities as inspiring group members, creating a useful vision, bringing about constructive
change, and maintaining a well-organized department.

6. 5. Identify a business or sports leader who you think is highly effective. Present your observations
to the class.
Leaders are usually classified as effective on the basis of the results they achieve. Students will
therefore probably choose leaders with highly visible accomplishments. Effective sports leaders
would include Phil Jackson (now the Los Angeles Lakers head coach) and Pat Summit (the
Tennessee Lady Vols basketball coach). Despite mixed reactions to his personality, many
students will nominate Bill Gates of Microsoft. Jeff Bezos of Amazon.com might also receive
several nominations because of his key position in launching ecommerce.
6. Based on an informal survey, many people who were voted “the most likely to succeed” in their
high school yearbooks became leaders later on in their career. How can you explain this finding?
Many basic leadership traits and behaviors are formed early in life and persist throughout
adulthood. Among these characteristics are extroversion, enthusiasm, drive, and a willingness to
assume responsibility.
7. Martha Stewart is an inspiration to millions of people, yet at the same time she is criticized by
many for her strong ambition and her controlling, perfectionist tendencies. She is even the
subject of many jokes. What does this contradictory information tell you about leadership?
The mixed reactions visible leaders receive indicates the concept of leadership polarity (see
Chapter 3) whereby leaders are adored by some constituents and disliked by others. Or, simply
put, being a disliked leader “comes with the territory.” The variety of attitudes toward Martha
Stewart also suggest that being exceptionally successful triggers envy and resentment.
8. After reading this chapter, do you believe that a person who is not a “born leader” still has a good
chance of becoming an effective leader? Explain.
We hope that all potential leaders would realize that many of the characteristics, attitudes,
behaviors, and skills of leaders can be learned. Even without great inherited talent, a person
could therefore accomplish many of the things that effective leaders accomplish.
9. Top-level leaders of major business corporations received some of the highest compensation
packages in the workforce. Why are business leaders paid so much?
One reason for the higher pay of leaders is that their work affects so many people, thus giving
their job greater scope. Another factor is that leadership is a rare talent, and takes longer to
develop than technical skill. For example, a highly talented teenager may learn how to install a
web site in several days but could not learn how to be a top-level corporate leader in such a short
time period. (Many critics think top executives are vastly overpaid in comparison to lower-ranking
workers who also make an important contribution to corporate performance.)
10. Which of the nine leadership roles do you think you are the most suited for at this stage in your
career? Explain your reasoning.
During early career stages most people are best suited for the technical problem-solver role. The
reason is that most careers begin by engaging in a technical specialty. Another possible
leadership role for many career beginners is the team player role, also based on experience.
Many students taking a leadership course may have enough leadership and management
experience to be well suited for other leadership roles.

7. PLAUSIBLE RESPONSES TO CASE QUESTIONS
Leadership Case Problem A: Big Jeff Immelt Faces the Future at GE
A major theme of this introductory case is the complexity and demanding nature of a top-level
executive position.
1. What leadership challenges does Immelt face?
First, Immelt must establish a strong presence to think of himself primarily as Jeff Immelt rather
than as the replacement for Jack Welch. The public criticism that surfaced in 2002 about Welch’s
hidden forms of compensation during both his reign and his retirement may have helped Immelt.
Replacing a tarnished image beats replacing a superhero. Another major challenge is
maintaining growth in profits more through operations than acquisitions and creative forms of
accounting. Another challenge is to spearhead a drive for efficiency in an already efficient
company.
2. What can Immelt and the rest of the executive team do to convince financial analysts that GE is
truthful about its earnings?
A key antidote would be more disclosure of how earnings were obtained, and to become more of
a transparent organization. Immelt might make the dramatic move of inviting an audit of GE’s
books by an auditor chosen by financial analysts or journalists. A complete audit would be
prohibitive in cost, but perhaps the auditor’s report could be audited.
3. Which leadership roles does Immelt appear to be emphasizing?
Immelt was somewhat of a figurehead in his early days, as he crisscrossed the globe to meet
stakeholders and transfer relationships to himself. He occupied the strategic planner role when
he pushed the firm more into services. Immelt was somewhat of a technical problem solver as he
explained to outsiders that he is not an earnings cheat. In dealing with outsiders over the
accounting issues, Immelt was a spokesperson.
Leadership Case Problem B: Jen Lee Wants the Fast Track
The case history of the young business analyst illustrates that rising into a formal leadership position in
a complex organization can be challenging.
1. Who has the problem here? Jen or the consulting firm in question?
Jen has more of a problem than does the consulting firm because she appears to believe that
she is entitled to becoming a formal leader, based on her assessment of her credentials.
2. What advice can you offer Jen to help her increase her chances of occupying a formal leadership
position in the company?
Jen must continue to take the initiative on important work issues, and look for ways to
demonstrate that she can influence people. In dealing with clients, she might look for ways to

8. increase the services of the firm because developing business is a major success factor in a
consulting firm. She might also volunteer to serve on committees and task forces within the firm.
3. What is your evaluation of the advice Ken offered Jen?
Ken’s advice is sound. In a competitive situation when leadership positions are scarce, a person
has to demonstrate her leadership capability before being promoted.

9. CHAPTER 2
Traits, Motives, and Characteristics of Leaders
The purpose of this chapter is to present a comprehensive description of the personal qualities of
leaders. Such a presentation does not imply that the great person theory is more valid or important
than other explanations of leadership. Nevertheless, “having the right stuff” contributes to leadership
effectiveness in many situations.
CHAPTER OUTLINE AND LECTURE NOTES
The belief that certain personal characteristics and skills contribute to leadership effectiveness in many
situations is the universal theory of leadership. Old as well as new research concludes convincingly
that effective leaders are made of the right stuff. A current presentation of this research is The
Essence of Leadership by Locke.
I. PERSONALITY TRAITS OF EFFECTIVE LEADERS
Possessing certain characteristics contributes to leadership effectiveness in many situations
as long as the leader’s style fits the situation reasonably well.
A. General Personality Traits
A general personality trait in the context used here is a trait that would be
observable within or outside the context of work. The same general traits are related to
success and satisfaction in both work and personal life.
1. Self-Confidence. In almost every leadership setting, it is important for
the leader to be realistically self-confident. Self-confidence is akin to being cool under
pressure.
2. Humility. Being humble at the right times also contributes to
leadership effectiveness. Part of humility is admitting that you don’t know everything,
and admitting your mistakes to team members and outsiders. According to Jim Collins,
Level 5 Leaders are modest, yet determined to achieve their objectives.
Trustworthiness. Group members consistently believe that leaders must
display honesty, integrity, and credibility, thus engendering trust. Leaders themselves
believe that honesty makes a difference in their effectiveness. The popular cliché,
“Leaders must walk the talk,” holds true. Also helpful is telling the truth
and conducting yourself in the way that you ask others to conduct themselves.
4. Extroversion. Being extroverted contributes to leadership
effectiveness, and extroverts are more likely to want to assume a leadership role and
participate in group activities.

10. 5. Assertiveness. Assertiveness refers to being forthright in expressing
demands, opinions, feelings, and attitudes. Being assertive helps leaders perform tasks
such as confronting group members, demanding higher performance, and making
legitimate demands on higher management.
6. Emotional Stability. Emotional stability refers to the ability to control
one’s emotions sufficiently that one’s emotional responses are appropriate to the
occasion. Stability helps because group members expect and need consistency in the
way they are treated.
7. Enthusiasm. Group members respond positively to enthusiasm, partly
because enthusiasm may be perceived as a reward for constructive behavior.
Enthusiasm also helps build good relationships with team members.
8. Sense of Humor. The effective use of humor is considered an
important part of a leader’s role. Humor helps dissolve tension and defuse conflict. Self-
effacing humor is the choice of comedians and organizational members alike.
9. Warmth. Warmth, which facilitates the establishment of rapport with
group members, is a key component of charisma, and it facilitates providing emotional
support.
10. High Tolerance for Frustration. Leaders encounter so many frustrations that
they need high tolerance for frustration, or the ability to cope with the blocking of goal
attainment.
B. Task-Related Personality Traits
Certain personality traits of effective leaders are closely associated with task
accomplishment even though they appear to be more accurately classified as traits than as
behavior.
1. Passion for the Work and the People. A dominant characteristic of
effective leaders is their passion for their work, and to some extent for the people who
help them accomplish the work. Passion for the work is especially evident in
entrepreneurial leaders and small-business owners who are preoccupied with growing
their business. Being passionate about the nature of the business can be a major
success factor in its survival.
2. Emotional Intelligence. How well a person manages his or her
emotions and those of others influences leadership effectiveness. Emotional
intelligence refers to qualities such as understanding one’s feelings, empathy for
others, and the regulation of emotions to enhance living. Four key factors are included
in emotional intelligence, according to a recent conception: (1) self-awareness helps
you understand your impact on others; (2) self-management is the ability to control
one’s emotions and act with honesty and integrity in a consistent and adaptable
manner; (3) social awareness includes having empathy for others and having intuition
about organizational problems; (4) relationship management includes the interpersonal
skills of communicating clearly and convincingly, disarming conflicts, and building
strong personal bonds. New research suggests that a leader’s moods and associated
behaviors greatly influence bottom-line performance. A sense of humor is the most
contagious mood.

11. 3. Flexibility and Adaptability. A leader must be flexible and adaptable
enough to cope with change, especially because a leader is someone who facilitates
change. Flexibility, or adjusting to situations, has long been recognized as an
important leadership characteristic.
4. Internal Locus of Control. People with an internal locus of control
believe that they are the primary cause of events happening to them. A leader with an
internal locus is perceived as more powerful than one with an external locus because
he or she assumes responsibility for events.
5. Courage. Leaders need the courage to take risks and to take the
initiative. Courage in the present context refers to behaviors such as prudent risk taking,
facing responsibility, and a willingness to put one’s reputation on the line.
II. LEADERSHIP MOTIVES
Leaders can be differentiated from nonleaders and ineffective leaders in terms of their motives
and needs. The motives described here are task-related.
A. The Power Motive
Effective leaders have a strong need to control resources. They vigorously
exert power, think about how to alter the behavior of others, and care about status.
1. Personalized Power Motive. Leaders with a personalized power
motive seek power mostly to further their own interests, and enjoy dominating others.
Donald Trump is an extreme example.
2. Socialized Power Motive. Leaders with a socialized power motive use
power primarily to achieve organizational goals or a vision. These leaders are less
defensive than those with a personalized power motive, and they are more willing to
accept expert advice.
B. Drive and Achievement Motive. Leaders are known for the strong effort they
invest in achieving work goals. Drive refers to a propensity to put high energy into achieving
goals. Achievement motivation refers to finding joy in accomplishment for its own sake.
C. Strong Work Ethic. Effective leaders typically have a strong work ethic, a firm
belief in the dignity of work. A strong work ethic helps the organizational leader believe that
the group task is worthwhile.
D. Tenacity. Leaders are better than nonleaders at overcoming obstacles.
Tenacity multiplies in importance for organizational leaders because it can take so long to
implement a new program. As Bennis contends, the central ingredient of power is purpose.
III. COGNITIVE FACTORS AND LEADERSHIP
Mental ability as well as personality is important for leadership success. Problem-solving and
intellectual skills are referred to collectively as cognitive factors.
A. Knowledge of the Business or Group Task
An effective leader has to be technically or professionally competent in some
discipline, particularly when leading a group of specialists. Knowledge of the business is

12. critically important for strategy formulation. An analysis of CEO leadership concluded that
one of the basic ways in which top executives lead is through the expertise approach—the
belief that the leader’s most important responsibility is providing an area of expertise that
will be a source of competitive advantage.
B. Creativity
Many effective leaders are creative in the sense that they arrive at imaginative
and original solutions to complex problems. Creative ability lies on a continuum, with one
end being represented by business leaders who think of innovative products and services.
At the other end of the continuum are leaders who rely on standard solutions to problems.
C. Insight into People and Situations
Another important cognitive trait of effective leaders is insight, a depth of
understanding that requires considerable intuition and common sense. A manager with
keen insight is able to make good choices in selecting people for key assignments. Insight
also facilitates the leader’s adapting his or her style to the situation.
D. Farsightedness and Conceptual Thinking
To develop visions and incorporate strategy, a leader needs farsightedness,
the ability to understand the long-range implications of actions and policies. Many of today’s
business leaders are accused of having a shortsighted emphasis on quick profits.
Conceptual thinking refers to the ability to see the overall perspective and makes
farsightedness possible. A conceptual thinker is also a systems thinker.
E. Openness to Experience
A positive orientation toward learning is another cognitive characteristic that is
important for leaders.
IV. THE INFLUENCE OF HEREDITY AND ENVIRONMENT ON LEADERSHIP
The traits, motives, and characteristics required for leadership effectiveness are a combination
of heredity and environment. Personality traits and mental ability are based on certain inherited
predispositions and aptitudes, which, however, require the right opportunity to develop. For
example, a person may inherit high mental ability but needs the right experiences to learn to
develop innovative solutions to problems facing the group.
The outermost areas of the brain govern analytical thinking and technical skills,
whereas the innermost areas of the brain govern emotions. A person therefore has the genes
that influence the emotional intelligence necessary for leadership. However, experience is
important for emotional intelligence because it increases with age. The case histories of six sets
of brothers who all achieved the rank of president or higher at different companies highlight the
complexity of sorting out the influences of heredity versus the environment on leadership.
V. THE STRENGTHS AND LIMITATIONS OF THE TRAIT APPROACH
The evidence is convincing that leaders possess different personal characteristics from those
of nonleaders. A knowledge of the traits associated with leadership effectiveness helps in the
selection of leaders. Awareness of these characteristics can also point a person toward the right
developmental experiences, such as learning to become more assertive. The current emphasis
on emotional intelligence, which is really a group of traits and behaviors, reinforces the
importance of the trait approach. The trait approach is limited because it does not specify which

13. traits are absolutely needed in which leadership situations and how much of each trait is
needed. For example, when does ambition cross the line and become greed and gluttony?
Certain traits increase the probability of a person’s becoming an effective leader, but
the situation often influences which traits will be the most important. Drucker believes that a
leader cannot be categorized by a particular personality type, style, or set of traits. Instead, a
leader should be understood in terms of his or her constituents, results, example setting, and
responsibilities.
VI. GUIDELINES FOR ACTION AND SKILL DEVELOPMENT
Considering that emotional intelligence is so important for leadership success, many
organizations sponsor emotional intelligence training for managers. A realistic starting point in
improving emotional intelligence by yourself is to work with one of its five components at a time,
such as empathy. You would first obtain feedback about your empathy, and then work diligently
on any deficiency. After the attempted improvements in empathy, solicit more feedback.
COMMENTS ON EXPERIENTIAL EXERCISES
Leadership Self-Assessment Quiz 2-1: Behaviors and Attitudes
of a Trustworthy Leader
Behavioral specifics of being trustworthy are particularly important because of the renewed emphasis
on trustworthiness for leaders in recent years.
Leadership Self-Assessment Quiz 2–2: The Assertiveness Scale
Although we do not have normative data, the assertiveness scale has been used with thousands of
students. The consensus is that the scale yields a sensible score. People who are concerned about
their level of assertiveness may be prompted to take action after taking this self-assessment quiz. The
Guidelines for Action and Skill Development section on pages 57–58 provides practical suggestions
for becoming more assertive.
Leadership Skill-Building Exercise 2-1: A Sense of Humor on the Job
Asking students to develop situational humor serves two important purposes. Students quickly learn
that making appropriate humorous comments requires skill, and the exercise raises their awareness of
the importance of humor in leadership.
Leadership Skill-Building Exercise 2-2: Developing an Internal Locus of Control
An important potential contribution of this exercise is that it helps students examine concrete ways in
which they might become self-directing, or develop an internal locus of control. Clichés about taking
control of one’s life are widely mentioned, but here is an opportunity to actualize the concept.
Leadership Skill-Building Exercise 2-3: Group Feedback on Leadership Traits
A cursory look at this exercise suggests that it is a form of sensitivity training. This exercise, however,
requires all positive feedback, thus decreasing the chances of emotional damage. We believe there is

14. little risk of a participant’s being judged as having no leadership traits or characteristics. (This would
constitute very negative feedback.)
COMMENTS ON DISCUSSION QUESTIONS AND ACTIVITIES
1. How much faith do voters place in the trait theory of leadership when they elect public officials?
Most voters place high implicit faith in the trait theory of leadership because many of their
judgments about candidates are based on perceived traits. Television appearances by
candidates serve as a major source of information about the candidates’ traits. An example is
that many people regarded presidential aspirant Al Gore as too emotionally flat. Gore then
attempted to improve his emotional responsiveness and was able to express emotion more
forcibly. However, some critics believed that Gore still needed more work to appear less stiff.
2. Suppose a college student graduates with a major for which he or she lacks enthusiasm. What
might this person do about becoming a passionate leader?
The bold approach would be for this person to make an early career switch into a field he or she
cared about, such as a management major shifting to social work. A less bold approach would be
to search for an activity in his or her field that is intrinsically exciting. For example, some people
are passionate about preparing PowerPoint slides even though they are neutral or negative
toward other aspects of the job. The person could then focus on these slides as a source of
passion in his or her work.
3. What would a manager to whom you report have to do to convince you that he or she has high
self-confidence?
The answer to this question is a function of what self-confidence means to the individual. Typical
indicators of self-confidence in a manager would be speaking with conviction, withstanding
criticism, and handling pressure well.
4. What would a manager have to do to convince you that he or she has humility?
For many workers, a sure-fire indicator of a manager having humility would be for the manager to
admit mistakes, ask for help, and sometimes say, “I don’t know.”
5. Describe any leader or manager, whom you know personally or have watched on television, who
is unenthusiastic. What effect did the lack of enthusiasm have on group members?
The presumed effect of low enthusiasm by the leader or manager would be low enthusiasm by
group members. However, enthusiastic group members who are highly self-reliant, or have a
strong internal locus of control, would not be dampened by the unenthusiastic manager. One
student said that the university’s president was so unenthusiastic that she thought he was not
interested in students. As a consequence, she felt less positively about the university.
6. Why is emotional intelligence considered more important than technical skill at high-level
leadership positions?
Emotional intelligence is more important than technical skill for high-level leadership positions
because high-level leaders spend more time dealing with people than technical issues. An
activity such as selling constituents on a vision deals more heavily with the emotions of people
than with technical considerations.

15. 7. A CEO made the following comment about leadership and intelligence: “Sometimes a less than
top IQ is an advantage because that person doesn’t see all the problems. He or she sees the big
problem and gets on and gets it solved. But the extremely bright person can see so many
problems that he or she never gets around to solving any of them.” What is your reaction to his
comment?
What the company president implies about intelligence and problem solving is partially true.
Some people with extremely high intelligence suffer from analysis paralysis. Nevertheless, with
proper coaching and self-discipline, a very intelligent person can learn to become more decisive.
8. A disproportionate number of people who received an M.B.A. at Harvard Business School are top
executives in Fortune 500 business firms. How does this fact fit into the evidence about the roles
of heredity and environment in creating leaders?
The fact that so many Harvard Business School graduates become top business executives
presents a cogent argument for both sides of the heredity versus environment debate. The
majority of Harvard M.B.A.s come from families with intelligent, energetic members, thereby
emphasizing the importance of heredity. At the same time many Harvard M.B.A.s come from
culturally enriched environments, have great contacts from the past, and develop new ones at
Harvard—underlining the importance of environment. Another interpretation is that heredity and
environment combine to help along the Harvard M.B.A.s.
9. Visualize the least effective leader you know. Identify the traits, motives, and personal
characteristics in which that person might be deficient.
Students will rise high to this occasion because so many people feel they have had leaders who
are ineffective. Typically the perceived negative traits will fall within the realm of interpersonal
relations, such as being suspicious or verbally abusive, or having an uneven temper.
10. Many people who disagree with the trait approach to leadership nevertheless still conduct
interviews when hiring a person for a leadership position. Why is conducting such interviews
inconsistent with their attitude toward the trait approach?
Conducting interviews is consistent with an anti-trait approach because a major purpose of the
interview is to assess personal characteristics that would be related to job effectiveness. Another
purpose of the interview is to assess interpersonal skills, which are closely related to traits. If the
interview were simply used to discuss the terms of employment and to assess experience, then
the interview would not be inconsistent with a trait approach.
PLAUSIBLE RESPONSES TO CASE QUESTIONS
Leadership Case Problem A: What Leadership Characteristics
Does Reuben Mark Possess?
Reuben Mark is a good case study because he is a quiet success (see BusinessWeek, September 23,
2002, pp. 83–84).
1. Which leadership traits, characteristics, and motives does Mark (and his executive team) appear
to possess? Support your answer with specific statements in the case history.
a. “Relentless focus on developing new products and getting them into markets around the
world at high speed.” This suggests good knowledge of the business.

16. b. “Mark has been unwilling to bask in the glory so many other CEOs savor.” This is a
strong indicator of humility.
c. “. . . Mark and Colgate president Bill Shanahan have run a tight ship, with few defec-
tions. . . . ” Low turnover could suggest that Colgate managers are trustworthy, and that Mark
and Shanahan are trusted.
d. “The senior management . . . are deeply involved in the details.” The statement strongly
indicates the cognitive trait of knowledge of the business.
e. “Says Dolan, ‘Reuben Mark is very smart, very demanding, and very, very, funny.’ ” This
shows cognitive intelligence and sense of humor.
f. “Mark avoids media interviews because he does not like to draw too much attention to
himself.” This remark shows humility again.
2. Which traits, motives, and characteristics do you perceive to be Mark’s strongest?
Mark is so successfully involved with product development that knowledge of the business is a
key strength. His humility also assists his leadership stature in an important way.
3. What suggestions can you offer Reuben Mark to improve as a leader or to improve the
company?
If Mark were less low key in terms of gathering publicity he might attract more investors to the
company, thereby driving up the stock price. However, Colgate is already doing well with
investors, so our suggestion is speculative.
Leadership Case Problem B: The Urban Improvement Guys
This case illustrates entrepreneurial leadership in a low-technology field.
1. Explain whether or not Glazer and Samloff qualify as leaders.
Glazer and Samloff qualify as leaders because they are entrepreneurial leaders and have
brought about constructive change in their city.
2. In what ways do the traits and characteristics of Glazer and Samloff complement each other?
Glazer focuses more on new prospects for the company, suggesting that he is best at direction
setting and visioning. Samloff focuses more on the day-by-day intricacies of managing
properties, suggesting that his leadership is directed within the company, and that he is a strong
manager.
3. What evidence do you find that Glazer and Samloff are farsighted?
Both see the possibilities in neglected properties and can visualize a better future. Samloff’s
comment that “urban improvement spreads too” is certainly farsighted.
4. What cognitive skills are reflected in the leadership of Buckingham Properties?
Both Glazer and Samloff are actively involved in the details of the business such as sizing up
properties and later inspecting them. This type of activity reflects knowledge of the business.

17. Farsightedness, a cognitive skill, is demonstrated in Samloff’s statement, “We take something
and say, this is pretty raw, but is there a gem in this ore we can extract?”

18. CHAPTER 3
Charismatic and Transformational Leadership
The purpose of this chapter is to help the reader understand the nature of charismatic and
transformational leadership. Although the two forms of leadership overlap, they are treated separately
in this edition of the text. The legitimacy of either of these forms of leadership as a separate entity has
been challenged. Nevertheless, studying charismatic and transformational leadership represents an
important current thrust in understanding the leader’s role.
CHAPTER OUTLINE AND LECTURE NOTES
Charismatic leaders are so exciting, so appealing, so magnetic, and so visionary that their constituents
eagerly accept their leadership.
I. THE MEANINGS OF CHARISMA
Charisma is a special quality of leaders whose purposes, powers, and extraordinary
determination differentiate them from others. The various definitions of charisma presented in
Table 3–1 have a unifying theme. Charisma is a positive and compelling quality in a person that
creates a desire in many others to be led by him or her.
The attributes of charisma are important because they lead to behavioral outcomes
such as commitment to the leader, self-sacrifice, and high performance. A study with law
enforcement workers and business students showed that network members influence our
attributions of charisma.
A. Charisma: A Relationship Between the Leader and Group Members
According to John Gardner, charisma applies to leader-constituent
relationships in which the leader has an exceptional gift for inspiration and nonrational
communication. Charismatic leaders work deliberately at cultivating the relationship with
group members through impression management. These leaders recognize that the
perceptions of constituents determine whether they function as charismatics. Charismatic
leaders are skillful actors in presenting a charismatic face to the world.
B. The Effects of Charisma
House developed a theory of charismatic leadership that defines charisma in
terms of its effects. A charismatic person brings about these effects to a high degree.
Halpern
has factor analyzed these nine effects into three dimensions: referent power,
expert power, and job involvement. Referent power is the ability to influence others and
stems from the leader’s desirable traits and characteristics. Expert power is the ability to
influence others because of one’s specialized knowledge, skills, or abilities. Job
involvement is the feeling of being heavily committed to the job.

19. II. TYPES OF CHARISMATIC LEADERS
Charismatic leaders have been categorized into five types: (1) socialized charismatic—uses
power to benefit others; (2) personalized charismatic—uses power to serve own interests; (3)
office-holder charismatic—much of the charisma stems from the glitter of the office the leader
holds; (4) personal charismatic—power stems from the faith people have in the leader; (5)
divine charismatic—leader is endowed with a gift of divine grace.
III. CHARACTERISTICS OF CHARISMATIC LEADERS
Charismatic leaders have unique characteristics, and many of these characteristics also apply
to a transformational leader—one who brings about positive, major changes in an
organization. In contrast, a transactional leader is a manager who mostly carries on
transactions with people, such as taking care of administrative work and offering rewards for
good performance.
In addition to the characteristics described in Chapter 2, charismatic leaders have
other attributes: (1) they are visionary; (2) they have masterful communication skills; (3) they
have the ability to inspire trust; (4) they are able to make group members feel capable; (5) they
have energy and an action orientation; (6) they have emotional expressiveness and warmth; (7)
they romanticize risk; (8) they use unconventional strategies; (9) they have a self-promoting
personality; (10) they challenge, prod, and poke; and (11) they are dramatic and unique. The
last tactic is an amalgam of many others.
IV. THE VISION COMPONENT OF CHARISMATIC LEADERSHIP
Vision is the ability to imagine different and better conditions and the ways to achieve them.
Effective leaders have clear visions, and vision is an important part of strategy implementation
and bringing about change. Charismatic leaders inspire others with their vision, because a
vision uplifts and attracts others. The charismatic leader also helps implement the vision.
To create a vision, it is helpful to obtain information from many sources, including (1)
personal intuition, (2) the work of futurists, (3) group discussions with group members, (4) other
vision statements, (5) the hopes and dreams of constituents, and (6) the larger organization’s
vision. Visions can be inspiring but they need to be supported by managers who are strong at
implementation.
V. THE COMMUNICATION STYLE OF CHARISMATIC LEADERS
Charismatic and transformational leaders communicate their visions, goals, and directives in a
colorful, imaginative, and expressive manner. They also communicate openly and encourage
feedback.
A. Management by Inspiration
An important factor in inspiring others is the ability to craft and articulate a
highly emotional message. Two such rhetorical techniques follow:
1. Using Metaphors and Analogies. A well-chosen analogy or metaphor
appeals to the intellect, imagination, and values.
2. Gearing Language to Different Audiences. Metaphors and analogies
are inspiring, but to be effective, leaders must also choose the level of language to suit
the audience. Conger has observed that an executive’s ability to speak colloquially
contributes heavily to creating appeal.
B. Management by Anecdote

20. Management by anecdote is the technique of inspiring and instructing group
members by telling fascinating stories. The technique is a major contributor to building a
strong company culture.
VI. THE DEVELOPMENT OF CHARISMA
By developing some of the traits, characteristics, and behaviors of charismatic people, a
person can increase his or her charisma. Suggestions for developing charisma include the
following: (1) Create visions for others and connect the visions to their dreams; (2) be
enthusiastic, optimistic, and energetic; (3) be sensibly persistent; (4) remember the names of
people; (5) make an impressive appearance; (6) be candid; and (7) display an in-your-face
attitude.
VII. TRANSFORMATIONAL LEADERSHIP
The focus of transformational leadership is on what the leader accomplishes rather than on the
leader’s personal characteristics and relationships with group members. The transformational
leader helps bring about major, positive changes. In contrast, the transactional leader focuses
on more routine transactions, with an emphasis on rewarding group members for meeting
standards.
A. How Transformations Take Place
To accomplish his or her lofty purposes, the transformational leader attempts
to overhaul the organizational culture or subculture. Seven ways in which the leader brings
about such transformations are: (1) raising people’s awareness; (2) helping people look
beyond self-interest; (3) helping people search for self-fulfillment; (4) helping people
understand the need for change; (5) investing managers with a sense of urgency; (6)
committing to greatness; (7) adopting a long-range perspective and at the same time
observing organizational issues from a broad rather than a narrow perspective; and (8)
building trust.
B. Attributes of Transformational Leaders
Seven qualities are particularly helpful in bringing about transformations: (1)
charisma including agreeableness and extroversion; (2) vision creation; (3) encouraging the
personal development of staff members; (4) supportive leadership; (5) empowerment; (6)
innovative thinking; and (7) leading by example. One study showed that maximum
performance of transformational leaders was associated with openness to experience and
extroversion.

21. C. The Impact of Transformational and Charismatic Leadership on Performance
57 Several empirical studies have been conducted on the effects of charismatic
and transformational leadership in work settings.
1. Business Unit Performance. Howard and Avolio conducted a study
with financial managers about transformational leadership and business unit
performance. Leaders who displayed more individualized consideration, intellectual
stimulation, and charisma contributed positively to business unit performance. Leaders
who used management by exception and positive reinforcement were less likely to
increase unit performance.
2. Charismatic Leader Behavior in Military Units. Charismatic leadership
behavior was studied with fifty field companies in the Israel Defense Forces. The data
indicated that the performance appraisal by a leader’s superior was strongly related to
two of the charismatic behaviors studied: ideological emphasis and exemplary behavior.
VIII. CONCERNS ABOUT CHARISMATIC LEADERSHIP
The topic of charisma and transformational leadership has been challenged from two major
standpoints: the validity of the concept and the misdeeds of charismatic leaders.
A. Challenges to the Validity of Charismatic Leadership
Most leadership researchers doubt that charisma can be accurately defined
and measured. Also, charismatic leaders are not liked by everyone. According to the
concept of leadership polarity, leaders are often either revered or vastly unpopular.
People rarely feel neutral about them. Also, charisma may not be required for leadership
effectiveness. Bennis and Nanus hypothesize that people who are outstanding leaders are
perceived as charismatic by their constituents as a result of their success.
B. The Dark Side of Charismatic Leadership
Some people are concerned that charisma can be exercised for evil purposes.
Some charismatic leaders are unethical and lead their organizations toward illegal and
immoral ends. People are willing to follow the charismatic leader down a quasi-legal path
because of his or her referent power. Some charismatic leaders thus neglect their social
responsibility, the idea that organizations have an obligation to groups in society other than
owners or stockholders and beyond that prescribed by law or union contract.
IX. GUIDELINES FOR ACTION AND SKILL DEVELOPMENT
To create charismatic appeal, make everyone you meet feel that he or she is quite important,
use a firm handshake and good eye contact, and give sincere compliments. Thank people
frequently, smile frequently, and maintain a childlike fascination with your world.

22. COMMENTS ON EXPERIENTIAL EXERCISES
Leadership Self-Assessment Quiz 3-1: The Emotional Expressiveness Scale
Given that emotional expressiveness is such an important part of being perceived as charismatic, it is
worthwhile for students of leadership to reflect on their expressiveness.
Leadership Skill-Building Exercise 3-1: Formulating a Vision
Our experience is that students take readily to vision formulation. As one student said after completing
this exercise, “I do visions.” The visions that students construct in thirty minutes sound remarkably like
those it takes some organizations six months to formulate. If the completed visions are presented to
the rest of the class, feedback can be invited.
Leadership Skill-Building Exercise 3-2: Charismatic Leadership by Anecdote
This exercise requires both analytical and imaginative thinking. An example that fits here is the
Domino Pizza emphasis on customer service. Supposedly, pizza dough was flown by airplane to a
Domino store to cover a shortage and maintain good service. The description of “moments of truth” in
The Leadership Challenge by Kouzes and Posner provides several relevant anecdotes.
Manager Assessment Quiz 3-2: The MLQ Charismatic Leadership Scale
A productive perspective here is that the behaviors indicated by the items are as important as
calculating a score. The MLQ scale appears to be the most widely used instrument in research on
charisma.
COMMENTS ON DISCUSSION QUESTIONS AND ACTIVITIES
1. Identify a business, government, education, or sports leader whom you perceive to be
charismatic. Explain the basis for your judgment.
The particular leader singled out as charismatic is not as important as how the choice is justified,
such as pointing to the leader’s colorful communication style. Bill Gates and Steve Jobs often
come to students’ minds when they are asked to identify a charismatic business leader.
2. Identify a well-known leader who is not charismatic. Explain what other qualities might have
helped this leader succeed.
Because the perception of charisma is often a function of emotional expressiveness and
nonverbal communication, students will frequently designate a bland-appearing leader as
noncharismatic. Former vice president Al Gore was often labeled as noncharismatic by the press
and comedians. After intensive coaching he began to appear more charismatic to some people,
mainly because of increased emotional expressiveness. Gore, nevertheless, still makes an
impressive physical appearance, and his well-developed intellect and exceptional connections
have helped him succeed. President George W. Bush receives mixed reactions in terms of
charisma, with his speaking skills detracting from his charismatic image.
3. Steven Jobs of Apple Computer, Inc., and many fashion designers wear the same outfit most of
the time, even for press interviews and trade shows or fashion shows. The outfit consists of a

23. long-sleeve or short-sleeve T-shirt and blue jeans without a belt. How does this costume affect
their projection of charisma?
The T-shirt and jeans outfits enhance charisma because the outfits are “cool.” Of course, the
reason these outfits are “cool” is that many of the other people present are wearing expensive
business attire or high-fashion costumes.
4. Describe how a person might write email messages to give an impression of being charismatic.
To appear more charismatic, the person might follow the suggestions for persuasive
communication presented in Chapter 12. Any constructive way of appearing dramatic and
unique, such as colorful phrases, will help an email message appear to have been sent by a
charismatic person. Emoticons, such as a “smiley,” are so widely used they might not contribute
to a charismatic image. Choosing an interesting font and background color or picture will
sometimes enhance charisma, but the written message is more important.
5. Aside from contributing to leadership effectiveness, for what other types of jobs might charisma
be an asset?
Charisma is a major asset in selling, and sales representatives are the most likely to enroll in
seminars and read books about becoming more charismatic. Charisma would also be an asset in
any position that involves considerable negotiation, such as a labor-relations specialist.
6. Explain why the presence of a charismatic leader tends to enhance the job satisfaction of group
members.
A charismatic leader often enhances group members’ job satisfaction because people enjoy
associating with a person they perceive as having an outstanding personality. Furthermore, many
charismatic leaders are perceived as winners, and most people like to associate with winners.
7. What opportunities might a first-level supervisor or team leader have to be a transformational
leader?
A first-level supervisor or team leader will sometimes have the opportunity to improve greatly the
performance of an underperforming and/or demoralized organizational unit. A supervisor or team
leader is often assigned to such a unit as a developmental experience.
8. In what way is a transactional leader functioning more as a manager than a leader?
A transactional leader is involved primarily with interactions between people that are
characterized as management rather than leadership. Among them are administering rewards
and punishments, giving performance evaluations, and discussing work assignments.
9. A concern has been expressed that leaders who are charismatic are often incompetent. They
simply get placed into key positions because they create such a good impression. What do you
think of this argument?
Many instances probably do exist of “counterfeit executives.” They are smooth and polished but
not very analytical. Our impression is that more of these “all form, no substance” managers are
weeded out in today’s thinned-out organizations.
10. Design a research study or survey to determine if you are perceived as being charismatic. Be
prepared to share your observations with other group members.

24. The survey might list all the characteristics of a charismatic leader. It then might ask respondents
who knew the person well to rate the person on a 1-to-5 scale. Write-in comments to this
anonymous survey about the person’s charismatic appeal might also be solicited.
PLAUSIBLE RESPONSES TO CASE QUESTIONS
Leadership Case Problem A: Pat Russo Wants to Rescue Lucent
This case provides some insights into the work of a leader attempting to bring about transformations.
1. In what ways might Russo be classified as a transformational leader?
First, Russo was recruited back to Lucent to complete a turnaround. The company had shrunk
considerably in size and revenues. Second, she had previously turned around the AT&T
Business Communications Division.
2. Based on the evidence presented, how would you rate Russo’s charisma?
A few threads of evidence suggest that Russo is moderately charismatic. Her physical
appearance is positive, her speech is careful, and she inspires considerable loyalty.
3. What suggestions might you offer Patricia Russo to help accelerate the turnaround at Lucent?
Russo is focusing on selling more of the existing product line. She may need to do something
more dramatic, such as selling a new product or service. Possibly the famous research lab at
Lucent might offer its services to other companies, providing they are not competitive with
Lucent.
4. How ethical was Russo in leaving Lucent, taking a top job at Eastman Kodak Company, and then
returning to Lucent in nine months?
Russo’s leaving was obviously an embarrassment to Kodak, since they never would have hired
her for a nine-month stint. Many students see no ethical problems in leaving an employer after a
brief stay, yet few people would want their own company to experience the same problem.
Jumping ship so quickly probably would not fare well when seen through an ethical screen.
Leadership Case Problem B: Charismatically Challenged Chad
The theme of this case is one faced by thousands of ambitious people: they want to get ahead but not
enough people think they have the charisma to merit being promoted. Former GE executive Robert
Nardelli (now chief exec at Home Depot Inc.) was floored when he was turned down for the top job,
even though he had achieved his financial targets. Perhaps Jack Welch thought he was not
charismatic enough.
1. What career advice can you offer Chad McAllister?
Accept the feedback from his two managers, and begin a program of becoming more noticeable
and charismatic.
2. What might Chad do to develop more charisma?

25. He should take some of the steps in the section about developing charisma. A good starting point
would be to express his opinions and feelings more frequently.
3. What is your opinion of the fairness of the ValuTracker program?
As long as the people placed in the ValuTracker group are not chosen arbitrarily or through
favoritism, the program is fair. Many large organizations identify potential leaders early in their
careers because the long-range success of the organization depends on having a strong cadre of
leaders.

26. CHAPTER 4
Leadership Behaviors, Attitudes, and Styles
The purpose of this chapter is to provide the reader with an understanding of basic leadership
behavior and attitudes, as well as styles. Some of the information goes back to classic studies
conducted in the 1950s and 1960s, and some is recent. Two other topics are featured: servant
leadership, and how leaders use 360-degree feedback to fine-tune their behaviors.
CHAPTER OUTLINE AND LECTURE NOTES
This chapter covers pioneering information about leadership behaviors and attitudes that served as the
basis for studies of leadership styles and contingency theories of leadership. A sampling of these
styles is presented as well as current information about behaviors, attitudes, and styles. An effective
leader is one who facilitates group members’ attaining productivity, quality, and satisfaction.
I. THE CLASSIC DIMENSIONS OF INITIATING STRUCTURE AND CONSIDERATION
The Ohio State studies developed questionnaires about leaders that included self-
assessments and assessments by subordinates. This research became the foundation for most
of the future research about leadership behavior, attitudes, and styles. Two dimensions (as
identified by factor analysis) accounted for 85 percent of the variance in descriptions of
leadership behavior. Initiating structure is the degree to which the leader organizes and
defines relationships in the group by activities such as assigning specific tasks, specifying
procedures to be followed, scheduling work, and clarifying expectations. Consideration is the
degree to which the leader creates an environment of emotional support, warmth, friendliness,
and trust. Leaders who score high on the consideration factor typically are friendly, trustful, earn
respect, and have a warm relationship with team members.
An important output of the research on initiating structure and consideration was to
categorize leaders with respect to how much emphasis they place on the two dimensions. As
implied by Figure 4–1, the two dimensions are not mutually exclusive.
II. TASK-RELATED ATTITUDES AND BEHAVIOR
Task-related means that the behavior, attitude, or skill focuses more on the task to be
performed than on the interpersonal aspects of leadership.
1. Adaptability to the situation. Effective leaders adapt to the situation by
choosing a tactic based on the unique circumstances at hand (the contingency approach).
2. Direction setting. The leader must set the direction of change. According to
Kotter, leaders gather voluminous data and search for patterns, relationships, and linkages
that help create events. Direction setting creates vision and strategies. A new buzzword to
signify direction setting is the northbound train.

27. 3. High performance standards. Effective leaders consistently hold group
members to high standards of performance. Setting such standards increases productivity,
partly because of the Pygmalion effect.
4. Risk taking and bias for action. To bring about constructive change, the leader
must take risks and be willing to implement these risky decisions.
5. Hands-on guidance and feedback. The leader who provides hands-on
guidance helps the group accomplish important tasks, and at the same time group
members learn important skills. Too much guidance, however, can lead to poor delegation
and micromanagement. The leader can rarely influence the actions of group members
without appropriate performance feedback.
6. Stability of performance. Effective leaders are steady performers, even under
heavy workloads and uncertain conditions. Remaining steady helps team members cope
with the situation.
7. Ability to ask tough questions. Many times leaders can be effective by asking
tough questions rather than providing answers. A tough question is one that makes a
person or group stop and think about why they are doing or not doing something.
III. RELATIONSHIP-ORIENTED ATTITUDES AND BEHAVIORS
Leadership involves influencing people, so it follows that many effective leadership attitudes,
behaviors, and practices deal with interpersonal relationships.
A. Aligning and Mobilizing People. Many people have to be aligned (a state of
pulling together) to create significant change toward a higher purpose. Alignment enables
people to have a clear sense of direction because they are pursuing a vision. Aligning
people takes place at almost a spiritual level, whereas mobilizing people is closer to getting
the group working together smoothly. One mobilizing practice is to demonstrate care for
team members.
B. Concert Building. A new conception of the leader’s role, concert building,
involves both aligning and mobilizing. The goal of the concert builder is to produce a system
that is self-evaluating, self-correcting, self-renewing, and ongoing.
C. Creating Inspiration and Visibility. Inspiring others is an essential leadership
practice. An example of an inspiring practice is building enthusiasm about projects and
assignments. Being visible and available facilitates inspiration.
D. Satisfying Higher-Level Needs. Motivation and inspiration energize people by
satisfying needs for achievement, a sense of belonging, recognition, self-esteem, and a
feeling of control over one’s life.
E. Giving Emotional Support and Encouragement. Supportive behavior toward
team members usually increases leadership effectiveness.
F. Promoting Principles and Values. A major part of a top leader’s role is to help
promote values and principles that contribute to the welfare of individuals and the
organization. Covey advises that an organization’s mission statement must be for all good
causes.

28. G. Being a Servant Leader. Wanting to serve others as a leader is a relationship
behavior that encompasses several other key behaviors. A servant leader serves
constituents by working on their behalf to help them achieve their goals, not the leader’s
own goals. A servant leader is a moral leader. Key aspects of servant leadership include
the following:
1. Place service before self-interest.
2. Listen first to express confidence in others.
3. Inspire trust by being trustworthy.
4. Focus on what is feasible to accomplish.
5. Lend a hand.
6. Provide tools.
IV. 360-DEGREE FEEDBACK FOR FINE-TUNING A LEADERSHIP APPROACH
Many leaders solicit systematic feedback to improve their leadership behavior and attitudes.
360-degree feedback is a formal evaluation of superiors based on input from people who work
for and with them, sometimes including customers and suppliers. 360-degree feedback is more
frequently used for leadership and management development than for performance evaluation.
Such feedback can help detect barriers to success, such as a leader’s being perceived as using
an inappropriate leadership style. 360-degree feedback is a key component of the leadership
training program called Benchmarks.
Approaches to implementing 360-degree feedback for performance evaluation and
development continue to emerge. One variation of the method is to build a 360-degree survey
accessed via the Internet and the company’s intranet.
A review of over 600 studies of 360-degree feedback found that only one-third
reported performance improvement, and one-third reported performance decreases. To make
better use of 360-degree surveys focus on business goals and strategy, deal with important
aspects of leadership, train for giving and receiving feedback, and create action plans.
V. LEADERSHIP STYLES
A leader’s combination of attitudes and behaviors leads to a certain regularity and
predictability in dealing with group members. Leadership style is the relatively consistent
pattern of behavior that characterizes a leader. Most classifications of leadership style are
based on the dimensions of initiating structure and consideration.
A. Participative Leadership Style
Sharing decision making with group members, and working with them side-by-
side, has become the generally accepted leadership approach. Participative leaders share
decision making with group members. The style encompasses three subtypes: (1)
consultative leaders confer with group members before making a decision, but retain the
final authority; (2) consensus leaders strive for consensus; and (3) democratic leaders
confer final authority on the group. The participative style has also been referred to as
trickle-up leadership because the leader accepts suggestions for managing the operation
group members.
The participative style is well suited to managing competent people
who want to get involved in making decisions and giving feedback to management.
However, the style often results in extensive and time-consuming team meetings and
committee work.

29. B. Leadership Grid® Styles
The Leadership Grid is a framework for simultaneously specifying concern
for production and concern for the people dimensions of leadership. Grid styles are based
on the extent of a person’s concern for production and people: Authority-Compliance (9,1);
Country Club Management (1,9); Impoverished Management (1,1); Middle-of-the-Road
Management (5,5); and Team Management (9,9).
The ideal position is the 9,9 orientation, which integrates concern for
production and concern for people. This team management style usually results in improved
performance, low absenteeism and turnover, and high employee satisfaction. The manager
should use principles of human behavior to size up the situation.
C. Entrepreneurial Leadership
Many entrepreneurs and intrapreneurs use a similar leadership style that
stems from their key personality characteristics and circumstances. A general picture
emerges of a task-oriented and charismatic leader. Even if it is not a true leadership style,
at least there are some traits and behaviors characteristic of entrepreneurs and
intrapreneurs:
1. Strong achievement drive and sensible risk taking.
2. High degree of enthusiasm and creativity.
3. Tendency to act quickly when opportunity arises.
4. Constant hurry combined with impatience.
5. Visionary perspective.
6. Dislike of hierarchy and bureaucracy.
7. Preference for dealing with external customers.
8. Eye on the future.
D. Gender Differences in Leadership Style
Several researchers and observers argue that women have certain acquired
traits and behaviors that suit them for relations-oriented leadership. Consequently, women
leaders frequently exhibit a cooperative, empowering style that includes the nurturing of
team members. The other facet of this stereotype is that men are inclined toward a
command-and-control, militaristic leadership style.
1. The Argument for Male-Female Differences in Leadership Style
Based on self-reports, Rosener found that men tended toward a
command-and-control style. In contrast, women tended toward a transformational style,
relying heavily on interpersonal skills. Bass found that women are less likely to practice
management-by-exception and are slightly more likely to be described as charismatic.
Another perspective on gender differences in leadership is
whether men or women are more effective leaders. In combined studies of 425
executives, each by approximately twenty-five people, women leaders achieved higher
ratings on forty-two of the fifty-two skills measured. Most of the gender differences were
small. One interpretation of these findings is that the women had to be outstanding
performers to hold the executive positions, so it was a biased sample. This study could
make for emotional, yet thoughtful, class discussion.

30. 2. The Argument Against Gender Differences in Leadership Style
Based on a literature review, Grant concluded that there are
apparently few, if any, personality differences between men and women managers. As
women move up the corporate ladder, they identify more with the male model of
managerial success. An important point is that both men and women differ among
themselves in leadership style. As the research studies put it, “The within-group
variance is greater than the across-group variance.”
Also of importance, many women believe that women
managers can be more hostile and vindictive than male managers.
More important than searching for differences is to capitalize
on both male and female leadership tendencies. Connie Glaser sees a new
management style that blends the male and female sides.
E. Selecting the Best Leadership Style
A recent study with 3,000 executives revealed that leaders who get the best
results do not rely on one style. Instead, they use several different styles in one week, such
as being autocratic in some situations and democratic in others. The cultural setting must
also be considered, such as using a strong task orientation with German workers. Stogdill
made a statement about selecting a leadership style that still holds today: “The most
effective leaders appear to exhibit a degree of versatility and flexibility that enable them to
adapt their behavior to the changing and contradictory demands made on them.”
Table 4–3 summarizes some useful ideas about the conditional
variables for choosing between the participative and autocratic styles.
VI. GUIDELINES FOR ACTION AND SKILL DEVELOPMENT
In choosing between a task orientation and a relationship orientation, several additional factors
are also relevant. Among them are (a) the structure of the organization and the nature of the
leader’s work, (b) the leader’s personality, (c) the boss’s style, and (d) the potential for conflict.
A nondirective style is safer.
COMMENTS ON EXPERIENTIAL EXERCISES
Leadership Self-Assessment Quiz 4-1: How Effective Are You as a Leader?
This exercise focuses on leadership behaviors and attitudes that represent two ends of a continuum.
On one end of the continuum is the manager who values the status quo and stability. At the other end
is an adventuresome manager who is more of a leader. Such a manager takes risks and has an action
orientation. We think this scale makes a contribution because it measures an important aspect of
leadership other than the task and people dimensions.
Leadership Skill-Building Exercise 4-1: Feedback Skills
An important feature of this exercise is that it provides an opportunity to practice giving feedback about
performance rather than feedback about personal characteristics. A possible positive byproduct of this
exercise is that the feedback results might encourage participants to perform better.

31. Leadership Self-Assessment Quiz 4-2: Task-Oriented Attitudes and Behaviors
An interesting twist to this scale is that it does not assume that a low task orientation is equivalent to a
high relationship orientation. The scale treats task orientation as an independent dimension of
leadership behavior.
Leadership Skill-Building Exercise 4-2: Clarifying Your Work Values
The importance of this instrument centers around its focus on values. Many observers of leadership
heavily emphasize the contribution of values to leadership effectiveness.
Leadership Self-Assessment Quiz 4-3: What Style of Leader
Are You or Would You Be?
This leadership style quiz focuses on behaviors particularly relevant in the modern workplace. The
quiz can also be used as a skill-development exercise if the statements are interpreted as implied
suggestions for engaging in a participative style.
Leadership Self-Assessment Quiz 4-4: What Is Your Propensity
for Taking Risks?
Reflecting on risk-taking tendencies is an important activity for leaders and prospective leaders. Most
organizations today value a sensible degree of risk taking. A fruitful class discussion is why some of
these items might reflect risk taking, such as Question 10 about flying a single-engine airplane.
Leadership Skill-Building Exercise 4-3: Entrepreneurial Leadership
The key feature of this exercise is that it gets the role players involved in a high-impact business
activity—selling others on the merits of their business. Our informal research has shown that at least
one-third of business students aspire to entrepreneurship or self-employment at some point in their
careers, thus increasing the relevance of this exercise.
A suggestion for this exercise is to caution the role players (or “skill builders”) to project
passion and enthusiasm into the exercise.
Leadership Self-Assessment Quiz 4-5: How Flexible Are You?
Self-reflection about flexibility is helpful because a leader needs flexibility to adapt to situations and to
change. An important goal of this exercise is to highlight the importance of flexibility.
Leadership Skill-Building Exercise 4-4: Contrasting Leadership Styles
Field testing indicates that this role-play is effective in illustrating basic leadership styles. Many
students who understand these styles intellectually have difficulty translating them into behavior acts.
Feedback by class members not participating in the role-play is quite beneficial.

32. COMMENTS ON DISCUSSION QUESTIONS AND ACTIVITIES
1. How is initiating structure related to planning, organizing, and controlling?
Initiating structure is an important component of organizing, planning, and controlling. Much of
planning, organizing, and controlling involves activities included under initiating structure.
2. Give an example of high consideration behavior that a supervisor of yours showed on your
behalf. What was your reaction to his or her behavior?
Examples of high consideration behavior include giving a worker time off to deal with a personal
problem, or giving the worker encouragement. Most people react very positively to high
consideration behavior on the part of the supervisor.
3. Why is direction setting still an important leadership behavior in an era of empowerment?
Empowered teams still need direction regarding what activities they should be pursuing. They
might then be empowered to figure out how to achieve these goals. Few teams or individual
employees are empowered to pursue whatever direction they think is appropriate.
4. Ask an experienced leader how he or she gives emotional support to team members. Be
prepared to discuss your findings in class.
Emotional support will often take the form of encouraging workers when they have problems and
listening to their problems. Other specific forms of emotional support will be worth noting.
5. In what way might a personalized charismatic leader have quite different motives from a servant
leader?
The personalized charismatic is seeking power and glory to enhance his or her career. In
contrast, the primary motive of the servant leader is to help other people by helping them achieve
worthwhile goals.
6. How might a manager use email to help carry out both task-oriented and relationship-oriented
behaviors?
Task-oriented behaviors can be executed via email by sending messages containing directions,
work schedules, and goals. Relationship-oriented behaviors can be executed through email by
such means as sending notes of encouragement and giving compliments. The leader can give
recognition by praising the worker and include a long distribution list.
7. How would you characterize the leadership style of your favorite executive, athletic coach, or
television character who plays a boss?
To answer this question effectively, the student must choose a style categorization presented in
this chapter. The student should also provide meaningful documentation, such as “When Coach
Summitt sees that one of the players is feeling bad about a major mistake, Summitt puts her arm
around the player. That shows she’s relationship-oriented.”
8. Why is the consensus leadership style widely recommended for providing leadership to
Generation X and Generation Y workers?

33. Generation X and Generation Y workers have a preference for being consulted extensively about
key decisions. Part of the explanation is that many Gen X and Gen Y members have studied
team leadership in school, and they have also worked as teams for many school projects.
9. Find a printed or Internet article on a business entrepreneur (or think of one from your personal
experience). How well does that person fits the entrepreneurial leadership style?
In-depth portraits of entrepreneurial leaders will usually include descriptive information on several
characteristics of the entrepreneurial leadership style. Entrepreneurs are often described as
individualistic (if not eccentric) and impatient. People who have worked for entrepreneurs report
frequently that the entrepreneur worked unusually long hours and often expected the same of his
or her employees.
10. What are the practical implications of knowing that men and women typically have different
leadership styles?
One practical implication of knowing that men and women typically have different leadership
styles is that it might be possible to assign men and women to situations where their leadership
style is the most effective. For example, if a command-and-control-style leader were needed, a
man might be assigned. Another implication is that the gender of one’s boss would give a person
clues about the style of leadership that boss would most likely practice. A person working for a
woman, for example, might adapt to her style by participating frequently in decision making and
giving her the opportunity to be supportive and caring.
PLAUSIBLE RESPONSES TO CASE QUESTIONS
Leadership Case Problem A: The Confusing 360-Degree Feedback
The theme of this case is that the findings of a 360-degree survey can be difficult to interpret and
should take into account the needs and perspectives of the people giving the feedback.
1. What changes in leadership attitudes and behaviors do you think Haskins should make?
Haskins may need to give more structure, set a direction more clearly, and work harder at being
a helpful coach.
2. How might you explain the differences of opinion that Haskins found in the written feedback and
in the ratings shown in Exhibit 1?
Feedback on any multirater form is to some extent a function of the needs of the people giving
the feedback. For example, a self-confident individual might appreciate Haskins’ candid
feedback, whereas a less confident person might think he is heavy handed. Another explanation
for the discrepancy is that Haskins may be generally inspiring but still does not give workers a
clear understanding of where they should direct their efforts.
3. In what leadership behavior described in this chapter might Haskins particularly need
improvement?
A good hypothesis here is that Haskins needs to become more adaptable to the situation—
particularly being more flexible in responding to the leadership needs of group members. He may
need to lead people differently, such as giving some people more structure than others.

34. Leadership Case Problem B: Getting Northstar in the Winning Mode
This case illustrates the impact that various leadership styles might have on productivity and morale.
1. Which person best demonstrated effective leadership? Explain the reason for your answer.
Kim appears to be the most effective leader, particularly in terms of her interaction with group
members. She motivates and energizes her employees to achieve their goals and creates
change that can help the company. For example, in the meeting she shared with the group the
importance of winning the bid. Kim also described Northstar’s long-term strategic goal of
diversifying its client base.
2. Which person least demonstrated effective leadership? Explain the reason for your answer.
David is an ineffective leader, with a stiff, impersonal approach to leadership. He does not
energize or inspire people to reach organizational goals. In contrast, he focuses on achieving
orderly results. The talk he had with Robert showed his inattentiveness and lack of interest in
Robert’s ideas and concerns.
3. Where on the Leadership Grid would you place Kim, David, Robert, and Sarah? Explain the
basis for your answer.
Kim appears to be a 9,9 team manager. She places a strong emphasis on both the employee
and the task that needs to be completed. David appears to be a 9,1 authority compliance
manager. He shows little concern for the people working in his department and demands
compliance to his requests. Robert appears to be a 5,5 middle-of-the-road manager. He chooses
to concentrate on accomplishing the job and recognizes that he has approximately average skill
in working with people. To compensate, he asks Sarah for help in dealing with people. Sarah
appears to be a 1,9 country club leader, with her strong emphasis on working with people. It was
Sarah’s idea to send employees to the concert to learn about the client. If we knew more about
Sarah’s work approach, she might receive a higher rating than 1 for production concern.

35. CHAPTER 5
Contingency and Situational Leadership
After studying this chapter, the reader should have an accurate understanding of contingency theories
of leadership. Although the array of contingency and situational theories may baffle the reader at first,
a closer look shows that all but the executive suite theories are related. For example, the familiar tasks
versus relationships dimensions run through several of the theories.
CHAPTER OUTLINE AND LECTURE NOTES
Contingency theories specify the factors that determine which style of leadership will achieve the best
results in a given situation. The four best-known contingency theories are described in this chapter,
along with a concept of contingency leadership for CEOs.
I. SITUATIONAL INFLUENCES ON EFFECTIVE LEADERSHIP BEHAVIOR
The essence of the contingency approach to leadership is that leaders are most effective
when they make their behavior contingent upon situational forces, including group member
characteristics. Both the internal and external environments have a significant impact on leader
effectiveness.
A study compared the psychological profiles of thirty-five CEOs from large and small
companies. The skills of small-company CEOs appeared to be centered primarily on
production-oriented areas. The large-company CEOs had a significantly better developed
subset of interpersonal skills. One interpretation of these findings is that the heavy pressures
and understaffing faced by small-company CEOs compel them to emphasize task-related
attitudes and behaviors.
II. FIEDLER’S CONTINGENCY THEORY OF LEADERSHIP EFFECTIVENESS
Fiedler’s theory states that the best style of leadership is determined by the situation in which
the leader works.
A. Measuring Leadership Style: The Least Preferred Coworker (LPC) Scale
A manager’s leadership style is classified as relationship-motivated or task-
motivated. One’s style is considered relatively fixed. The least preferred coworker (LPC)
scale measures the degree to which a leader describes favorably or unfavorably his or
her least preferred coworker. One who describes the least preferred coworker
in favorable terms is relationship-motivated. In contrast, a person who describes his or her
least preferred coworker unfavorably tends to be task-motivated.

36. B. Measuring the Leadership Situation
Leadership situations are divided into high control, moderate control, and low
control. A high-control situation is the most favorable. Amount of control is determined by
rating the situation on three dimensions:
1. Leader-member relations measure how well the group and the leader
get along.
2. Task structure measures how clearly the procedures, goals, and
evaluation of the job are defined.
3. Position power measures the leader’s authority to hire, fire, discipline,
and grant salary increases to group members.
Leader-member relations contribute as much to the favorability of the
leadership situation as do task structure and position power combined.
C. Overall Findings
Leadership effectiveness depends on matching leaders to situations in which
they can exercise more control. Task-motivated leaders perform the best in situations of
high control and low control. Relationship-motivated leaders perform the best in situations
of low control. Figure 5–1 summarizes these findings.
D. Making the Situation More Favorable for the Leader
A practical implication of the contingency theory is that leaders should modify
situations to match their leadership style best, thereby enhancing their chances of being
effective. To increase control over the situation, the leader can do one or more of the
following: (a) improve leader-member relations, (b) increase task structure, and (c) exercise
more position power.
E. Evaluation of Fiedler’s Contingency Theory
Fiedler’s theory has prompted extensive research. The model has also alerted
leaders to the importance of sizing up the situation to gain control. Yet the contingency
theory is too complicated to have much of an impact on most leaders. A major problem
centers on matching the situation to the leader.
III. THE PATH-GOAL THEORY OF LEADERSHIP EFFECTIVENESS
The path-goal theory of leadership effectiveness specifies what the leader must do to
achieve high productivity and morale in a given situation. A leader attempts to clarify the path to
a goal for a group member so that the latter receives personal payoffs. At the same time, job
satisfaction and performance increase. Path-goal theory is based on expectancy theory. The
major proposition of path-goal theory is that the manager should choose a leadership style that
takes into account group member characteristics and task demands.

37. A. Matching the Leadership Style to the Situation
The leader should choose among four leadership styles to achieve optimum
results in a given situation. Two key sets of contingency factors are the type of subordinates
and the type of work they perform. Key subordinate characteristics include their locus of
control and perception of their ability with respect to the assigned task. Environmental
contingency factors are (1) the group members’ tasks, (2) the authority system within the
organization, and (3) the work group. The following describes the four styles and their
appropriate circumstances.
1. Directive style. The directive leader emphasizes formal activities, such
as planning, organizing, and controlling. The directive style improves morale when the
task is unclear.
2. Supportive style. The supportive leader displays concern for the well-
being of group members and creates an emotionally supportive climate. The leader also
emphasizes developing mutually satisfying relationships among group members. The
supportive leader enhances morale when group members work on dissatisfying,
stressful, or frustrating tasks.
3. Participative style. The participative leader uses group input when
making decisions. He or she is best suited for improving the morale of well-motivated
employees who perform nonrepetitive tasks.
4. Achievement-oriented style. The achievement-oriented leader sets
challenging goals, pushes for work improvement, and sets high expectations for group
members. This style works well with achievement-oriented team members and with
those working on ambiguous and nonrepetitive tasks.
B. How the Leader Influences Performance
The path-goal theory offers many specific suggestions to leaders. Three
representative suggestions are:
1. Recognize or activate group members’ needs over which the leader
has control.
2. Increase the personal payoffs to team members for attaining work
goals.
3. Help group members clarify their expectations of how effort will lead
to good performance, and how performance will lead to a reward.
Leaders can benefit from following the specific suggestions of path-goal
theory. Unfortunately, path-goal theory has so many nuances and complexities that it has
attracted little interest from managers.
IV. THE HERSEY–BLANCHARD SITUATIONAL LEADERSHIP® MODEL
The situational leadership model explains how to match the leadership style to the
readiness of group members. The key contingency factors are thus group member
characteristics.

38. A. Basics of the Model
Task behavior is the extent to which the leader spells out the duties and
responsibilities of an individual or group. Relationship behavior is the extent to which the
leader engages in two-way or multiway communication. As shown in Figure 5–3,
combinations of task and relationship behaviors are placed into four quadrants:
Style 1—High task and low relationship. The “telling” style is directive.
Style 2—High task and high relationship. The “selling” style is also directive
but in a more persuasive, guiding manner.
Style 3—High relationship and low task. In the “participating” leadership style,
there is less direction and more collaboration between leader and group members.
Style 4—Low relationship and low task. In the “delegating” style, the leader
delegates and is kept informed of progress.
The most effective style depends on the readiness level of group members.
Readiness is the extent to which a group member is able and willing to accomplish a
specific task. Ability is the knowledge, experience, and skill an individual or group brings to
a particular activity. Willingness is the extent to which an individual or group has the
confidence, commitment, and motivation to accomplish a specific task.
The key point in situational leadership theory is that as group member
readiness increases, a leader should rely more on relationship behavior and less on task
behavior. Guidelines for the leader are outlined in Figure 5–3. In Situation R4, for example,
team members are willing or confident. The leader can therefore grant them considerable
autonomy, using a delegating style.
B. Evaluation of the Situational Model
The model is based on a fundamental truth about leadership and
management: Competent people require the least specific direction. The situational model
has proved useful in training, and it alerts leaders to the importance of diagnosing the
readiness of group members. One concern about the model is that it gives the false
impression that situations are clear-cut. Another concern is that the prescriptions from
situational leadership work only part of the time. A major research-based concern is that
there are few leadership situations in which a high-task, high-relationship orientation does
not produce the best results.
V. THE NORMATIVE DECISION MODEL
Another contingency viewpoint is that leaders must choose a style that elicits the correct
degree of group participation when making decisions. The normative decision model views
leadership as a decision-making process in which the leader examines certain factors in the
situation to determine which decision-making style will be the most effective.
A. Decision-Making Styles
The five decision-making styles in the model are based on the amount of
authority retained by the leader; from most to least they are Decide, Consult (Individually),
Consult (Group), Facilitate, and Delegate.

39. B. Contingency Factors and Application of the Model
The manager diagnoses the situation in terms of seven variables for either
making a decision under pressure, or with the desire to develop group members. Based on
those variables, the manager follows the path through a matrix to choose one of the five
decision-making styles. Figure 5– 4 depicts the decision tree for time-driven group
problems. Working through the model is self-explanatory.
Accurate answers to the seven situational variables can be
challenging to obtain. Different people giving different answers to the situational factors will
arrive at different conclusions about the recommended decision style. Nevertheless, the
normative model is valuable because it prompts managers to ask questions about
contingency variables in decision-making situations.
VI. COGNITIVE RESOURCE THEORY: HOW INTELLIGENCE, EXPERIENCE, AND STRESS
INFLUENCE LEADERSHIP
The general thrust of cognitive resource theory is that stress plays a key role in determining
how a leader’s intelligence is related to group performance. The same theory describes the link
between directive behavior and intelligence. Several of the predictions in the theory are as
follows:
1. Leaders with greater experience but lower intelligence are likely to have
higher performing groups under high-stress conditions. Under low-stress conditions, leader
experience is less necessary.
2. Highly experienced leaders will often use old solutions to problems when
creativity is necessary. Leaders with high intelligence are more valuable than experienced
leaders when innovation is needed and stress levels are low.
3. If a leader is experiencing stress, his or her intellectual abilities will be diverted
from the task at hand.
4. The intellectual abilities of directive leaders will correlate more highly with
group performance than will the intellectual abilities of nondirective leaders.
5. A leader’s intellectual abilities will be related to group performance to the
degree that the task requires the use of intellectual ability.
VII. CONTINGENCY LEADERSHIP IN THE EXECUTIVE SUITE
An interview analysis of 163 top executives revealed five distinct approaches, all of which are
based on contingency factors. The study concluded that successful CEOs assess their
companies’ needs, then adapt their leadership style to fit the particular situation. Table 5–1
provides an outline of the approaches and accompanying contingency factors.
1. The strategic approach is a systematic, dispassionate, and structured analysis
of a company’s strengths and weaknesses, and its mission. Key contingency factors are an
unstable environment, a high rate of change, and complexity.
2. The human assets approach adds value to the organization through its hiring,
retention, and development programs. The key contingency factor is a case in which
business units are better positioned than headquarters to make strategy.
3. The expertise approach means that the CEO’s key responsibility is selecting
and disseminating throughout the organization an area of expertise that will give the firm a
competitive advantage. The key contingency factor is a case in which expertise can be a
source of significant competitive advantage.

40. 4. The box approach occurs when the corporate group adds value by creating,
communicating, and overseeing an explicit set of controls. The key contingency factor is the
presence of government examiners who insist on strict controls to protect consumer and
company.
5. The change agent approach is used by CEOs who believe that their most
critical role is to create an environment of continual reinvention, even if such an emphasis
on change creates short-term disturbances such as poorer financial results. A key
contingency factor is that the company wants to remain a leader in the field, and the status
quo is unacceptable.
VIII. LEADERSHIP DURING A CRISIS
Leading during a crisis can be regarded as contingency leadership because the situation
demands that the leader emphasize certain behaviors, attitudes, and traits. Crisis leadership is
the process of leading group members through a sudden, largely unanticipated, intensely
negative, and emotionally draining circumstance. Attributes and behavior for effective crisis
management are as follows:
1. Be Decisive. The leader should take decisive action to remedy the situation.
2. Lead with Compassion. Displaying compassion toward the concerns,
anxieties, and frustrations of the group is a key interpersonal skill for crisis leadership.
3. Reestablish the Usual Work Routine. An effective way of helping people deal
with a workplace crisis is to influence them to return to their regular work. However, workers
should first express their feelings about the crisis.
4. Avoid a Circle-the-Wagons Mentality. To strongly defend yourself against your
critics or deny wrongdoing is a mistake.
5. Display Optimism. Pessimists abound in every crisis, so optimism by the
leader can help energize the group members to overcome the bad times.
6. Be a Transformational Leader. During times of large and enduring crisis
transformational leadership may be the intervention of choice.
IX. GUIDELINES FOR ACTION AND SKILL DEVELOPMENT
To apply contingency theory, the leader must achieve the right balance between task and
relationship orientation. The leader must also choose a decision style at some place on the
leadership continuum from autocratic to democratic. A consultative decision-making style is
called for when a decision is complex, technical accuracy is important, and group acceptance is
necessary.
COMMENTS ON EXPERIENTIAL EXERCISES
Leadership Self-Assessment Quiz 5-1: The Least Preferred
Coworker (LPC) Scale for Measuring Leadership Style
The LPC scale arouses controversy. Some people find their leadership style diagnosis to be sensible,
whereas others find it to be completely opposite to their expectations. Students should compare their
LPC style with the one provided by the leadership style test in Chapter 4.

41. Leadership Self-Assessment Quiz 5-2: Measuring Your
Situational Perspective
A potential of this exercise is that it gives present and prospective leaders a rare opportunity to reflect
on the extent of their situational or contingency perspective. The number of people who adapt their
tactics to meet the demands of a given situation may be lower than most people think.
Leadership Skill-Building Exercise 5-1: Applying the Situational
Leadership Model
It takes a person who is highly skilled in interviewing and steeped in knowledge about individual
differences to make accurate assessments of readiness, ability, and willingness to perform a task. The
exercise illustrates the challenges involved in being an effective situational leader. An important
consideration is that a manager would have more data to work with because a group member can be
observed over time rather than only during an interview.
Leadership Skill-Building Exercise 5-2: Applying the Time-Driven Model
Although some students and researchers are skeptical about the reliability of the matrix for applying
the normative decision model, this exercise will often show consistency across several class groups.
The students will arrive at the same decision style. We recommend that individual students, or group
leaders, explain their reasoning for each of the seven situational variables, such as “decision
significance” and “team competence.”
COMMENTS ON DISCUSSION QUESTIONS AND ACTIVITIES
1. Ed Whitacre, an executive at SBC Communications Inc., said that sometimes he is a strategic
manager and at other times a hands-on manager. In what way does his comment reflect the
contingency approach to leadership?
A leader who is sometimes a strategic manager and at other times a hands-on manager is using
two different approaches. A strategist deals with long-range and abstract ideas, whereas a
hands-on manager deals with everyday problems. Whitacre is implying that he varies between
being a strategist and a hands-on manager, depending on the dictates of the situation.
2. In what ways do contingency theories go beyond stating that the best leadership approach
depends on the situation?
Contingency theory goes beyond simply stating that the best tactic depends on the situation
because it urges the leader to examine the critical variables in the situation and then make the
appropriate decision. A leader must therefore be conversant with the right contingency variables.
3. How would a manager know which variables in a given situation should influence which approach
to leadership he or she should take?
Knowledge of management and organizational behavior, combined with intuition, are helpful in
figuring out which are the relevant variables. For example, knowledge of individual differences is
always a good starting point. In many situations, factors such as motivation and the problem-
solving ability of group members are key situational variables. The leader/manager should also
investigate if the organizational culture is a relevant variable.

42. 4. What difference in leadership approach have you noticed between top-level managers and first-
level supervisors?
A major difference is that top-level leaders are more likely to lead from a distance. They are
much less involved in the face-to-face coaching and motivating that first-level supervisors may
employ.
5. Which of the four path-goal styles do you think would be the best for managing a professional
football or professional soccer team? Justify your answer.
Most professional football players would respond well to an achievement-oriented leadership
style because they are achievement oriented. The leader would thus set challenging goals, push
for improvement, and set high expectations. However, some players are so emotionally immature
they would require a directive style to help keep them out of trouble.
6. According to the situational model of leadership, which style is likely to be the most effective for
leading a strongly motivated group of ecommerce specialists?
The key variable here is that the group probably has high readiness. The specialists are probably
self-sufficient and competent. Thus the leader can grant them considerable autonomy, using a
delegating style.
7. Suppose a company has been rocked with financial scandal, and a new CEO is brought in from
the outside. Which of the five approaches to contingency leadership in the executive suite should
this new CEO implement? Explain your reasoning.
A company rocked with financial scandal faces an unstable environment. With this key
contingency factor in mind, the strategic approach might be used. The CEO would probably have
to work toward reorienting the company, including developing a new long-term business strategy.
8. Why might a transformational leader be helpful in a crisis?
A transformational leader would be helpful in a crisis because he or she might be able to lead the
firm out of its present misery. Such a leader might be able to guide constituents toward taking the
steps necessary to turn around the firm.
9. Identify a business leader whose organization is facing a crisis today. Explain why you consider
his or her situation to be a crisis.
At any given time, many well-known firms are facing a crisis. One example would be the Kmart
Corporation CEO in 2003. Kmart was approaching bankruptcy, it was losing market share rapidly
to Wal-Mart, and it was struggling to identify its core customer base.
10. Show the normative decision model to an experienced leader. Obtain his or her opinion on its
practicality, and be ready to discuss your findings in class.
Experienced leaders and managers typically like using the normative decision model because it
asks relevant questions and leads to sensible suggestions about individual versus group decision
making.

43. PLAUSIBLE RESPONSES TO CASE QUESTIONS
Leadership Case Problem A: Hector Alvarez, the Multifaceted Team Leader
This case illustrates how a team leader will often have to change his leadership and management
approach quickly to deal with different kinds of problems.
1. In what way does the above case illustrate contingency leadership and management?
The case illustrates the contingency approach because the team leader has to shift his approach
quite dramatically in the same day. At one time he is dealing with an achievement-oriented group
member who wants to develop a new business model; at another time he is dealing with the nitty-
gritty of allegations of sexual harassment.
2. How effective was Alvarez in dealing with Cohen?
Alvarez is dealing effectively with Cohen, encouraging her initiative without making commitments
to her that the company may not keep.
3. How effective was Alvarez in dealing with Mary, Jill, and Bill?
Alvarez responded well to the emotional needs of Mary by immediately beginning an
investigation of the alleged sexual harassment. He accepted Jill’s comments at face value, so
she is probably satisfied. However, Alvarez may have been too heavy-handed in dealing with Bill,
whom he suspended after only a cursory investigation of the problem. Another party, such as the
human resources department, should be involved before temporarily suspending Bill.
Leadership Case Problem B: Excite@Home Goes Down the Tubes
The Excite@Home case history is a dramatic example of an organization in crisis and a leader’s
attempt to rescue the firm.
1. What crisis is Patti Hart facing?
The key crisis is that the company is going out of business because it is burning cash at too rapid
a rate in terms of revenues.
2. What else might Hart have done from a leadership standpoint to rescue Excite@Home?
The facts on which this case is based give no evidence that Hart solicited ideas from company
employees on how to save the company. She may have tried to work too independently.
3. Which business strategies might have salvaged Excite@Home?
A remote possibility is to have sold the company to a similar firm such as Yahoo! Inc., or to a
group of investors who wanted to get into the Internet business. A drastic slash-and-burn
approach would have been necessary to get Excite@Home ready for sale. Another strategy
would have been to diversify into a potentially profitable business, such as video games.
Diversification, however, would have been very difficult because Excite@Home would not have
been able to borrow money.

44. CHAPTER 6
Leadership Ethics and Social Responsibility
The purpose of this chapter is to examine important issues about leadership ethics and social
responsibility. The focus is on leaders rather than on a general treatment of business ethics, and
includes a summary of the theory of ethics. Skill building is also incorporated into this chapter.
CHAPTER OUTLINE AND LECTURE NOTES
Being ethical and socially responsible is part of being an effective leader even if many financially
successful executives are unethical and socially irresponsible.
I. PRINCIPLES OF ETHICAL AND MORAL LEADERSHIP
Ethics is the study of moral obligations, or separating right from wrong. Also, ethics are the
accepted guidelines of behavior for groups or institutions. Morals are an individual’s
determination of what is right or wrong and is influenced by his or her values. A moral leader will
practice good ethics.
A. Five Ethical Leadership Behaviors
1. Be Honest and Trustworthy and Have Integrity in Dealing with Others.
Trustworthiness contributes to leadership effectiveness. Integrity refers to loyalty to
rational principles, thereby practicing what one preaches regardless of emotional or
social pressure. (A criminal can have integrity by consistently engaging in criminal
behavior.)
2. Pay Attention to All Stakeholders. Maximizing shareholder wealth is
not a sufficient role for a leader.
3. Build Community. The leader helps people achieve a common goal,
and searches for goals compatible to all.
4. Respect the Individual. Respecting individuals is a principle of ethical
and moral leadership that incorporates other aspects of morality. For example, if you tell
the truth, you respect others well enough to be honest.

45. 5. Accomplish Silent Victories. Joseph Badaracco, Jr. observes that
modesty and restraint are largely responsible for the achievement of the most effective
moral leaders in business.
B. Factors Contributing to Ethical Differences
One key factor is the leader’s level of greed, gluttony, and avarice. Another
key factor is the leader’s level of moral development: preconventional (intent of receiving
rewards and avoiding punishment); conventional (conform to societal norms); and
postconventional (internalized set of principles that may go beyond laws of a society). A
third factor is the situation, particularly the organizational culture.
II. GUIDELINES FOR EVALUATING THE ETHICS OF A DECISION
The Center for Business Ethics at Bentley College has developed six questions to evaluate the
ethics of a specific decision:
1. Is it right?
2. Is it fair?
3. Who gets hurt?
4. Would you be comfortable if the details of your decision or actions were made
public in the media or through email?
5. What would you tell your child, sibling, or young relative to do?
6. How does it smell?
A Job Seeker’s Ethics Audit, presented in Table 6–1, presents an ethical screen from the
standpoint of an individual screening a potential employer.
III. A SAMPLING OF UNETHICAL LEADERSHIP BEHAVIORS
Table 6–2 presents a sample of the type of unethical, immoral, and often illegal behavior
engaged in by business leaders whose acts have been publicly reported. Some of these cases
may not have been settled by the time of publication of this edition. A quick Internet search will
bring the table entries up to date.
IV. LEADERSHIP AND SOCIAL RESPONSIBILITY
Good deeds are important for leaders. Social responsibility is the idea that firms have
obligations to society beyond their economic obligations to owners or stockholders and also
beyond those prescribed by law or contract. Social responsibility involves a firm’s impact on
society. Here we look at a few socially responsible actions.
A. Creating a Pleasant Workplace
A social responsibility initiative that directly affects the well-being of people is
the creation of a comfortable, pleasant, and intellectually stimulating work environment. The
Fortune designation of “best company to work for” fits directly here, as measured by the
Great Place to Work Institute.
B. Guarding the Environment
Socially responsible leaders influence others to preserve the external
environment through a variety of actions that go beyond mandatory environmental controls.
A study with executives in the metal finishing business found that the magnitude of the

46. environmental consequences influenced the leader’s attitude toward disposal of hazardous
wastewater. Cost considerations were also important.
C. Being Involved in Political Causes
A leader can exercise social responsibility by getting involved in a political
cause that benefits people, such as advocating just treatment of child labor.
D. Engaging In Philanthropy
A standard organizational leadership approach to social responsibility is to
donate money to charity and various causes. A recent development is for corporate leaders
to demand a good return on investment for their donated money, such as obtaining
evidence that literacy rates improved when money was donated to a reading program.
V. INITIATIVES FOR ACHIEVING AN ETHICAL AND SOCIALLY RESPONSIBLE
ORGANIZATION
Here we look at five initiatives executive leadership can take to help create an ethical and
socially responsible organizational culture (versus a focus on social responsibility).
1. Leading by Example. A high-powered approach to enhancing ethics and
social responsibility is for corporate leaders to behave in such a manner.
2. Establishing Written Codes of Ethical Conduct. Written codes of conduct are
widely used as guidelines for ethical and socially responsible behavior.
3. Developing Formal Mechanisms for Dealing with Ethical Problems. Forty-five
percent of companies with 500 or more employees have ethics programs of various types.
An ethics committee to establish policy and conduct audits is typical.
4. Accepting Whistleblowers. A whistleblower is an employee who discloses
organizational wrongdoing to parties who can take action. Whistleblowers are often
ostracized and humiliated by the companies they hope to improve, and half the time they
are ignored. The Enron Corporation case was originally exposed by a whistleblower who
was a vice president at the firm.
5. Providing for Training in Ethics and Social Responsibility. Many companies
train managerial workers about ethics, using such techniques as Leadership Skill-Building
Exercise 6-2.
VI. ETHICAL BEHAVIOR AND ORGANIZATIONAL PERFORMANCE
Recent evidence suggests that high ethics and social responsibility are related to good
financial performance. The overall financial performance of the 2001 list of the 100 Best Firms
was significantly better than the remaining companies in the S&P 500. The relationship between
social responsibility and profits can also work in two directions. More profitable firms can better
afford to invest in social responsibility initiatives, and these initiatives can in turn lead to more
profits. The virtuous circle means that corporate social performance and corporate financial
performance feed and reinforce each other.

47. VII. GUIDELINES FOR ACTION AND SKILL DEVELOPMENT
Being ethical is an effective interpersonal skill. If you develop close relationships with people
you are more likely to be ethical in your dealings with them. The stronger the relationship
between people, the more likely they will behave ethically toward each other. It is essential to
build close relationships with work associates.
COMMENTS ON EXPERIENTIAL EXERCISES
Leadership Self-Assessment Quiz 6-1: The Leader Integrity Scale
A curious aspect about this scale is that it provides clues as to what actually constitutes unethical
behavior for leaders. An activity of potential merit would be to compare these scores with the
organizational politics questionnaire (Leadership Self-Assessment Quiz 7-3) in the next chapter.
People who score very high as a political player should tend to have high scores on the integrity scale
(high score reflecting low integrity).
Leadership Skill-Building Exercise 6-1: Dialing for Dollars
We suspect that most students will conclude that renting rotary phones to customers is an unsavory
activity unless the consumer deliberately makes the choice. It may be illuminating to students to know
that a company as well known as AT&T or Lucent Technologies would have such low ethics. Another
ethical wrinkle here is that most renters of rotary telephones are probably senior citizens who never
thought to stop the service.
Leadership Skill-Building Exercise 6-2: Dealing with Defining Moments
Dealing with defining moments is a helpful vehicle for understanding the complexity of ethical decision
making. Students will be divided on these issues, with some taking the position that a hard-nosed
business decision is best because it is fairest to all concerned. Other students will go out of their way
to be humanistic, such as giving an average-performing employee an above-average salary increase
so he can better care for his ill mother.
COMMENTS ON DISCUSSION QUESTIONS AND ACTIVITIES
1. If the president of the United States, George W. Bush, engaged in questionable ethical behavior
while he was an energy company executive, why should you worry about being ethical?
A major issue here is to think about why being ethical is important, particularly if some rich and
famous people are unethical. Reasons for being ethical include the following: (a) the world would
be a better place if more people in key positions were ethical; (b) ethical behavior is important
based on universal rights such as fairness and justice, so possible positive consequences of
being unethical are irrelevant; and (c) having high ethics is more important than fame and money.
2. The majority of business executives accused of unethical behavior have studied ethics either as
a subject in a business course or as an entire course. So what do you think went wrong?
For many business executives information about ethics remains cognitive knowledge, without
being internalized (learned emotionally). When the temptations to become rich or to make the
firm look good to shareholders present themselves, the emotion of greed preempts cognitive
knowledge about ethics.

48. 3. Companies that make and sell alcoholic or tobacco products are an easy target for individuals
demanding social responsibility. Should leaders of companies that produce fattening food that
can lead to cardiac problems and obesity also be targeted for being socially irresponsible?
Most students will probably say that the individual has a choice about eating fatty foods, so
servers of high-cholesterol food are not being socially irresponsible. However, an emerging trend
is to target producers and servers of high-cholesterol food as being socially irresponsible. A
major lawsuit was initiated against McDonalds in 2002, accusing the company of urging children
to become obese. Ben & Jerry’s has been cited as socially irresponsible because of the high fat
content of its ice cream. The latter is a strange twist because so many management writers have
cited Ben & Jerry’s as a model of a socially responsible company.
4. Practically every job candidate describes himself or herself as being “honest and trustworthy.”
What steps can a company take to increase the chances of hiring leaders who really are honest
and trustworthy—and therefore ethical?
A standard approach to selecting honest and trustworthy leaders is to conduct a thorough
background investigation, including questioning references. Job candidates at lower job levels
are often required to take personality tests that measure honesty and integrity. Given that these
tests have some validity, perhaps candidates for leadership positions should also take tests of
honesty and integrity.
5. An increasing number of critics are demanding that no executive should receive a total
compensation of $100 million or more in one year. What is your position on the ethics of a
business leader receiving so much compensation?
We have all heard the arguments that top-level executives are paid so much because of
competition, as well as supply and demand. These are the same reasons given to justify
awarding a $100 million contract to a football quarterback. One of the many ethical issues here is
“Who gets hurt?” when an executive is paid over $100 million per year. A plausible answer is that
without such excessive pay to one person, many jobs could be saved, many employees could be
given a raise, and bigger dividends could be paid to shareholders.
6. Teenagers from poor neighborhoods purchase a disproportionate number of basketball-style
shoes costing over $125 a pair. In your opinion, are companies that target their athletic-shoe
advertising to these teenagers being socially responsible? Explain your answer.
Many people have strong attitudes toward the issue of encouraging poor youths to purchase
high-priced athletic footwear. Some people believe that such behavior on the part of companies
is socially irresponsible because the teenagers could make better use of the money they invest in
athletic shoes. Furthermore, crimes are sometimes committed to obtain the money for these
shoes, and some young people are beaten and robbed by others who want their shoes. The
other side of the argument is that high-priced athletic shoes bring happiness and status to their
owners. As a consequence, the shoe manufacturers are being socially responsible.
7. What is the explanation for the fact that many profitable business corporations are also socially
responsible?
The virtuous circle concept is relevant here. Profitable business corporations have the money to
invest in social initiatives, so profitability leads to social responsibility such as a wealthy company
building a park in a poor neighborhood. The socially responsible initiatives, in turn, lead to
favorable publicity and more revenues to invest in socially responsible initiatives.

49. 8. Based on what you have read, heard, or seen, at which level (or levels) in the organization are
highly ethical leaders the most likely to be found?
As will be mentioned in the final section of Chapter 15, it appears that leaders in middle-
management positions are more ethical than CEOs. Part of the problem is that CEOs are
pressured to report good earnings and to profit directly from these earnings. So far, not much
mention has been made of ethically challenged, first-level managers.
9. How can consumers use the Internet to help control the ethical behavior of business leaders?
Consumers are already using the Internet to help control the ethical behavior of business
leaders. A primary tactic is to widely distribute information about unethical practices of business
leaders. A problem with complaint web sites is that the sponsors of these sites are often
perceived as malcontents and disgruntled workers or former workers.
10. In what ways are many retail customers quite unethical?
Unethical and illegal behavior by retail customers has a substantial impact on the cost of
conducting business. Among these unethical and illegal behaviors are: stealing merchandise;
eating food without paying for it; purchasing expensive items, using then once, and returning
them for a refund; and misusing a product so it breaks and demanding a full refund. Students can
supply loads of interesting examples of unethical customers.
PLAUSIBLE RESPONSES TO CASE QUESTIONS
Leadership Case Problem A: Fast-Talking Fastow of Enron
This case illustrates how ethically challenged a major business executive can be even though he
earns a good living based on his intelligence, education, and contacts.
1. Which specific behaviors of Fastow would you perceive as unethical?
The following behaviors of Fastow might be considered unethical: (a) he helped formulate the off-
balance sheet partnerships that hid some of the financial liabilities of Enron; (b) he used veiled
threats to sell some of his deals to banks and institutional investors by hinting that they might
lose Enron’s business if they did not comply with his deals; (c) the huge earnings from his deals
suggested that the deals involved some questionable manipulations; (d) he was emotionally
explosive and vindictive; (e) he belittled his peers; and (f) he used performance appraisals to get
even with people he did not like.
2. Does the fact that Fastow has not yet been charged with a crime influence your evaluation of his
ethics? (During congressional inquiries, under legal counsel he chose to remain silent.) Explain
your reasoning.
Unethical acts are not necessarily illegal, so Fastow could still be highly unethical without having
committed a crime.
3. In what ways was Fastow socially responsible?
As indicated in the last paragraph of the case, Fastow was socially responsible during his time as
an Enron executive. He was a major benefactor to the city’s art museums, a fundraiser for the
local Holocaust Museum, and a co-founder of a synagogue.

50. 4. How would you rate Fastow’s emotional intelligence?
Fastow rates low on emotional intelligence because he often expressed rage in the office, and he
was vindictive toward people who disagreed with him. His cognitive intelligence appears quite
high based on the complex financial deals he created.
Leadership Case Problem B: Bad Credit? No Credit? College Student?
Providian Loves You.
A subtle theme to this case is that sometimes the most villainous-appearing company is helping
somebody. In this case, Providian enabled poor people to obtain something very important to them—a
credit card.
1. In what ways has Providian been unethical and socially irresponsible?
Charging low-income people exorbitant interest rates could be perceived as an act of social
irresponsibility. Also, Providian actually wanted its customers to make low monthly minimum
payments, thereby placing them in a long-term position of indebtedness. Charging customers a
“credit protection fee” could be seen as unsavory. Deceptive advertising isn’t too cool either.
2. What argument can you present that Providian has been socially responsible?
As stated above, helping people with poor credit, or no credit, borrow money provides a service
many people think is valuable. Providian is helping people neglected and ignored by many credit-
card companies.
3. What could company leadership have done to guide Providian in a better direction?
Leadership might have pointed Providian into moderate-risk lending segments with less
controversy about exploiting people. How about providing financing for autos, boats, home
appliances, mobile homes, and so forth by working with retailers who do not have their own
lending wing? Heavy competition exists for making these types of loans, but Providian has the
capacity to be a big player.

51. CHAPTER 7
Power, Politics, and Leadership
The purpose of this chapter is to provide readers with new insights into power and politics so that they
can make better use of power and politics and thus lead others effectively. Chapter 8 is a continuation
of this topic, but with a description of various influence tactics.
CHAPTER OUTLINE AND LECTURE NOTES
To function effectively, leaders must use power effectively, including applying political tactics to
acquire and retain power.
I. SOURCES AND TYPES OF POWER
To exercise influence, a leader must have power, the potential or ability to influence decisions
and control resources. Zand considers power to be one of the three forces of the leadership
triad, along with knowledge and trust.
A. Position Power
A standard method of classifying power is based on whether the power stems
from the organization or the individual.
Legitimate Power. Power granted by the organization is referred to as
legitimate power. This power increases as one moves up the organization ladder.
Reward Power. The authority to give employees rewards for compliance is
referred to as reward power.
Coercive Power. The power to punish for noncompliance is referred to as
coercive power. It is based on fear.
Information Power. Having formal control over information that people need to
do their work is referred to as information power.
B. Personal Power

52. Three sources of power stem from characteristics or behaviors of the power
actor. All are classified as personal power because they are derived from the person
rather than
the organization. Prestige power, the power stemming from one’s status and
reputation, is also important.
C. Power Stemming from Ownership
The strength of ownership power depends on how closely the owner is linked
to shareholders and board members. A leader’s ownership power is also associated with
how much money he or she has invested in the firm. The new breed of CEOs in
ebusinesses escalates the importance of ownership power. The New Golden Rule applies:
The person who holds the gold, rules.
D. Power Stemming from Providing Resources
According to the resource dependence perspective, the organization
requires a continuing flow of human resources, money, customers and clients, technological
inputs, and materials if it is to continue to function. Organizational subunits, or individuals
who can provide these key resources, accrue power from this ability. Losing power to
control resources leads to a decline in power.
E. Power Derived from Capitalizing on Opportunity
Power can be derived from being at the right place at the right time and taking
appropriate action. You also need to have the right resources to capitalize on the
opportunity. Go where the action is to capitalize on opportunity power.
F. Power Stemming from Managing Critical Problems
The strategic contingency theory of power suggests that those units best
able to cope with the firm’s critical problems and uncertainties acquire relatively large
amounts of power. Also, a subunit acquires power by virtue of its centrality, how much its
activities are linked into the system of organizational activities.
G. Power Stemming from Being Close to Power
The closer a person is to power, the greater the power he or she exerts.
Likewise, the higher a unit reports in a firm’s hierarchy, the more power it possesses.
II. BASES OF POWER AND TRANSFORMATIONAL AND TRANSACTIONAL
LEADERSHIP
When 280 employees reporting to 118 supervisors in forty-five organizations of many different
types were studied with respect to bases of power and transformational and transactional
leadership, it was found that leaders who behave in a transformational manner are perceived to
possess referent and expert power. Transformational leadership also showed a positive
correlation with reward and legitimate power, yet was unrelated to coercive power. Perceptions
of power were not clearly linked to transactional leadership.
III. TACTICS FOR BECOMING AN EMPOWERING LEADER
It is paradoxically true that power and influence increase when the leader shares power with
others. As team members receive more power, they can accomplish more. Because the

53. manager shares credit for their accomplishments, the manager becomes more powerful. To
empower others is to be perceived as an influential person. In a competitive environment
increasingly dependent on knowledge, the most successful organizations will be those that
effectively use the talents of all players on the team.
A. The Nature of Empowerment
Empowerment refers to passing decision-making responsibility from
managers to group members. One study identified four components of empowerment.
Meaning is the value of a work goal evaluated in relation to a person’s ideals or standards.
A person doing meaningful work is likely to feel empowered. Competence, or self-efficacy,
is an individual’s belief in his or her capability to perform a particular task well. Self-
determination is an individual’s feeling of having a choice in initiating and regulating actions.
Choosing a method to solve a problem leads to a high level of self-determination. Impact is
the degree to which the worker can influence strategic, administrative, or operating
outcomes on the job. A fifth dimension is internal commitment toward work goals.
B. Empowering Practices
The practices that foster empowerment supplement standard approaches to
participative management such as conferring with group members before reaching a
decision. Specific empowering practices are described below.
1. Foster Initiative and Responsibility. Encourage team members to take
the initiative and give them broader responsibility.
2. Link Work Activities to the Goals of the Organization. Empowerment
works better when the empowered activities are aligned with the strategic goals of the
organization.
3. Provide Ample Information. Give employees ample information about
everything that affects their work. This is the basis of open-book management.
4. Allow Group Members to Choose Methods. Explain to the individual
or group what needs to be done and let the people involved choose the method. Also
explain why the task needs to be done.
5. Encourage Self-Leadership. Encourage team members to practice
self-leadership because it is the heart of empowerment. When employees lead
themselves, they feel empowered.
6. Implement Team-Based Human Resource Policies. A study of 111
work teams in four organizations found that teams are more likely to feel empowered
when the organization implements a variety of team-based human resources policies.
Examples include basing part of pay on team performance, and allowing team
members to participate in selection decisions.
7. Establish Limits to Empowerment. To prevent dysfunction, workers
need a clear perception of the boundaries to empowerment.
8. Continue to Lead. Although the leader empowers group members, the
leader should still provide guidance, emotional support, and recognition.
C. Cultural Differences

54. Cross-cultural factors influence empowerment, such as a study of a single firm
with operations in the United States, Mexico, Poland, and India. Among Indian workers,
empowerment lowered job satisfaction.
D. Effective Delegation and Empowerment
A major contributor to empowerment is delegation, the assignment to another
person of formal authority and responsibility for accomplishing a specific task. Delegation is
narrower than empowerment because it relates to a specific task. Guidelines for effective
delegation are as follows:
1. Assign duties to the right people.
2. When feasible, delegate the whole task.
3. Give as much instruction as needed, depending upon the
characteristics of the group member.
4. Allow the group member to choose the method.
5. Retain some important tasks for yourself.
6. Obtain feedback on the delegated task.
7. Delegate both pleasant and unpleasant tasks to group members.
8. Step back from the details.
9. Evaluate and reward performance.
Delegation contributes to the practice of leadership because delegation is an
excellent opportunity to coach the person accepting the delegated tasks.
IV. FACTORS THAT CONTRIBUTE TO ORGANIZATIONAL POLITICS
Organizational politics refers to informal approaches to gaining power through means other
than merit or luck. Views of organizational politics are becoming increasingly positive, such as
“Political skill is an interpersonal style that combines social awareness with the ability to
communicate well.” Organizational politics is an old subject that is still highly relevant in the
Internet Age. Contributing factors to politics are as follows:
A. The pyramid-shaped organization structure fosters a power chase
because a pyramid concentrates power at the top and leads to competition for limited
resources.
B. Subjective standards of performance foster political behavior. People often
resort to organizational politics because they do not believe that the organization has an
objective and fair way of judging their performance and promotability.
C. Environmental uncertainty and turbulence fosters politics because when
people operate in an unstable and unpredictable environment, they tend to behave
politically. It is difficult to specify what people should be doing in an uncertain situation.
D. Emotional insecurity can lead to political behavior as people attempt to
ingratiate themselves with superiors because they lack confidence in their talent and skills.
E. Machiavellian tendencies represent a fundamental reason why people
engage in politics. People who are Machiavellian have a propensity to behave politically.

55. F. Disagreement over major issues leads to political behavior because, unless
strategy and goals are shared by key organizational members, political motivation is
inevitable in organizational decision making.
V. POLITICAL TACTICS AND STRATEGIES
To make effective use of organizational politics, leaders must be aware of specific political
tactics and strategies. Here we offer a representative group of political tactics and strategies
categorized as ethical versus unethical. Many of the influence tactics to be described in Chapter
8 can also be considered political.
A. Ethical Political Tactics and Strategies
Ethical political methods are placed into three related groups: those aimed
directly at gaining power, those aimed at building relationships with superiors and
coworkers, and those aimed at avoiding political blunders. All of these tactics help the
leader gain or retain power, and they help the leader succeed in and manage a stressful
work environment.
1. Strategies and Tactics Aimed at Gaining Power. As Tom Peters
notes, the slow and steady (and subtle) amassing of power is the surest road to
success. The following seven techniques help a person gain power directly: (1) develop
your power contacts, (2) control vital information, (3) keep informed, (4) control lines of
communication, (5) bring in outside experts to support your position, (6) make a quick
showing—a quick display of dramatic results can lead to acceptance of future
proposals, and (7) remember that everyone expects to be paid back.
2. Strategies and Tactics Aimed at Building Relationships. Much of
organizational politics involves building positive relationships with network members
who can be helpful now or later. Several representative strategies and tactics follow: (a)
display loyalty; (b) manage your impression; (c) ask satisfied customers to contact your
boss; (d) be courteous, pleasant, and positive; (e) ask advice—show your trust in the
other person’s judgment; (f) send thank-you notes to large numbers of people; and (g)
flatter others sensibly.
3. Strategies Aimed at Avoiding Political Blunders. A strategy for
retaining power is to refrain from making power-eroding blunders. Some of these key
blunders are criticizing the boss in a public forum, bypassing the boss, declining an
offer from top management, and putting your foot in your mouth.
B. Unethical Political Tactics and Strategies
Any political tactic might be considered unethical if it is carried to extremes.
These approaches, however, are unequivocally unethical: (a) back stabbing; (b) embrace or
demolish (take no prisoners); (c) set a person up for failure; (d) divide and rule (have
subordinates fight among themselves, therefore giving you the balance of power); and (e)
playing territorial games.
VI. EXERCISING CONTROL OVER DYSFUNCTIONAL POLITICS
Carried to excess, organizational politics can hurt an organization and its members. A study
showed that the presence of political behavior can lead to lowered commitment and a stronger
turnover intention. Also, time can be wasted in fighting political squabbles, morale may suffer,

56. and stress may increase. Yet, a study showed that conscientious employees can perform well
in a political environment.
A comprehensive strategy to control politics is for leaders to be aware of its causes
and techniques. Open communication can also help minimize politicking. Avoiding favoritism is
a major way of reducing politics. Setting good examples at the top may reduce the frequency
and intensity of politics. Politics can sometimes be constrained by threatening to discuss
questionable information in a public forum. Hiring people with integrity helps reduce
dysfunctional politics.
VII. GUIDELINES FOR ACTION AND SKILL DEVELOPMENT
To enhance your interpersonal effectiveness at the outset of joining a firm, it is helpful to size
up the political climate. Ask diagnostic questions such as (1) Which method do people use here
to offer new ideas? (2) How much personal reference is tolerated? (3) Who gets heard?
Promoted? Passed over?
COMMENTS ON EXPERIENTIAL EXERCISES
Manager Assessment Quiz 7-1: Rating a Manager’s Power
To conduct this power rating, students might rate a present or past immediate manager. An issue
worth exploring is whether this issue is subject to the halo effect. There might be a tendency to rate a
leader high on many characteristics just because he or she is well liked.
Leadership Self-Assessment Quiz 7-2: Becoming an Empowering Manager
This brief quiz offers the advantage of focusing the students’ attention on the importance of attitudes
and behaviors tied to empowerment. The behaviors are also associated with good supervision and
management in general.
Leadership Skill-Building Exercise 7-1: Conducting an Empowerment Session
A potential contribution of these role-plays is that they illustrate the importance of leadership input in
the empowerment process. In both scenarios the leader will have to discuss mutual expectations. In
the second scenario the task may be more difficult because the proprietors are looking more for
directive leadership than to be empowered.
Leadership Self-Assessment Quiz 7-3: The Organizational Politics
Questionnaire
An advantage of this questionnaire is that it provides normative data on political behavior tendencies.
Students can therefore compare their scores to large-sample averages. The questionnaire has been
completed by thousands of people.
Leadership Self-Assessment Quiz 7-4: The Manager Impression Survey
Although some scholars object to students studying about impression management, it remains a vital
supplement to good work performance. Another reason the survey is important is that it is based on a
study published in the Academy of Management Journal.

57. Leadership Skill-Building Exercise 7-2: Classroom Politics
We have found with surprise that many students will candidly discuss classroom political behaviors
that they have observed in others. A phrase often used to denote such behavior is “kissing up to the
instructor.”
Leadership Skill-Building Exercise 7-3: Controlling Office Politics
Although the subject is dealing with the control of impression management techniques, this exercise is
also useful for practicing conflict-resolution skills. A subtle advantage of this exercise is that it
reinforces the importance of controlling excessive politics.
COMMENTS ON DISCUSSION QUESTIONS AND ACTIVITIES
1. Why do so many people think possessing power is a good thing?
Power in most cultures is something of inherent value like health, love, sex, and money. Power is
also valued because it brings people status, along with many other desirable things such as
money, friends, and leisure activities of choice. For many people, power is a natural reinforcer.
2. How can a leader occupy a top-level executive position and still have relatively little power?
A low-power executive could be one who has so little expert power that his or her advice is not
taken seriously. The person might also be a political appointment who is given very few formal
responsibilities.
3. It is not unusual for a new CEO to receive a signing bonus of around $10 million. Which kind of
power or powers do these executives have to command such a large signing bonus?
Expert power is a major factor behind a large signing bonus for a CEO. The executive receiving
this large bonus has usually demonstrated expertise (as well as leadership skills) in one or more
settings, such as turning around a poorly performing company. A functional skill, such as
improving operations or marketing, is usually involved. Prestige power, or having a great
reputation, is frequently involved.
4. How might you use the Internet to acquire information power?
A person with advanced Internet search skills can sometimes locate information that is so
valuable it enhances his or her power and influence. An example would be a manufacturing
specialist who uses the Internet to uncover leading-edge manufacturing processes that might
give his or her firm a competitive edge.
5. Many business leaders say something to the effect, “We practice empowerment because we
don’t expect our employees to leave their brains at the door.” What are these leaders talking
about?
The expression, “leave their brains at the door” implies that after workers enter the workplace,
they no longer think and follow procedures with any creative thought. In empowerment, workers
are expected to find solutions to problems themselves.
6. Empowerment has been criticized because it leaves no one in particular accountable for results.
What is your opinion of this criticism?

58. Elliot Jacques, who made this statement, is correct that empowerment can create a loose
organization. A possible antidote is to hold the team—and the team leader—accountable for
results. In practice, the team leader often assumes many of the responsibilities formerly assumed
by the unit manager.
7. How does participative leadership contribute to delegation?
Participative leadership contributes naturally to delegation because participative leadership
enables group members to conduct more work activities on their own, giving them more latitude
in performing tasks and making decisions. For delegation to work, group members need such
latitude.
8. Why are entrepreneurial leaders often poor delegators?
Entrepreneurial leaders are often poor delegators because they have created their enterprise and
are familiar with many of the details of the operation. It is difficult for them to let go and watch
somebody else perform the same tasks. Also, entrepreneurs often have so much emotional and
financial involvement in the company that they worry excessively about somebody else making a
mistake. This attitude interferes with delegation.
9. Many people have asked the question “Isn’t office politics just for incompetents?” What is your
answer to this question?
Many competent and talented people must use organizational politics to gain the resources, and
make the contacts, they need to accomplish their mission. Good job performance alone is often
not sufficient to acquire enough power to achieve laudable ends, such as getting a large enough
budget to launch a meritorious project.
10. Ask an experienced worker to give you an example of back stabbing that he or she has
personally witnessed. Find out what eventually happened to both the stabber and the person
stabbed.
Back stabbing is so widespread that most managers should be able to provide an example. A
curious problem, however, is that many managers defend their organizations as meritocracies in
which high-level cooperation and good-spiritedness prevail. In such a scenario, back stabbing
does not exist. Such managers are probably blind to the realities of what takes place in their firm.
PLAUSIBLE RESPONSES TO CASE QUESTIONS
Leadership Case Problem A: The Powerful Mr. Trump
The case history of Donald Trump is useful in illustrating an extreme need for power, and a successful
acquisition of power.
1. Which sources of power does Trump use?
Trump exercises a full range of power sources. He has legitimate power by virtue of his position.
He similarly exercises reward power and information power. Trump’s personal power is
substantial because he is so well known and has expert knowledge about real estate
development. Trump has enormous power stemming from ownership because of his large stake
in his enterprises. Also, Trump’s charisma (in the eyes of many) brings him personal power.

59. 2. What steps can Donald Trump take to be perceived more positively by outside observers such as
reporters and business professors?
For Trump to be perceived more positively by outside observers, he would need to become more
subdued in his statements about his accomplishments. His flamboyant lifestyle would need to be
toned down because of the envy and resentment it engenders. A more conservative (less
inflated) statement of his holdings would also help his image among reporters and business
professors.
3. If you were Trump’s executive coach, what advice would you offer him?
If Trump wanted to change his behavior a coach might help Trump become less of an
egomaniac. The coach could help Trump engage in less puffery because he has already
accomplished at an extraordinary level.
4. How would you describe Trump’s interpersonal skills?
Trump appears to relate particularly well to people in ordinary jobs such as the doorman
mentioned in the case. He is also a hero among many blue-collar workers who fantasize about
his lifestyle. Although not indicated directly in this case, Trump has a loyal following among his
own team members, suggesting he relates effectively to them. On the negative side, Trump’s
flamboyance and strong ego create problems for him in terms of acceptance by outsiders such
as reporters, business professors, and many investors.
Leadership Case Problem B: Empowerment at Seconds for You
This case about empowerment at a relatively small retailer illustrates some of the practical problems
involved in empowerment.
1. How applicable is empowerment to Seconds for You?
The empowerment model might work satisfactorily for Seconds for You, if the team leaders put a
little more time into helping associates who have questions and problems.
2. How might Jenny Parsons become a more effective empowering leader?
Parsons may need to provide more structure, such as emphasizing that team leaders should
place more emphasis on the problems of inventory shrinkage and screening checks.
3. What is your evaluation of the business model (basic idea for a business) at Seconds for You?
The business model at Seconds for You has proven to be an effective model on a limited scale in
many markets, particularly where many homeowners at moderate income levels are found. Self-
employed handypersons are another market for a store like Seconds for You. A small competitive
advantage for the model in question is that the outlet is usually much smaller than the
competition, thereby reducing shopping time. A major obstacle facing this business model is that
stores like Home Depot and Lowes are stiff competition because their prices are so low.

60. CHAPTER 8
Influence Tactics of Leaders
The purpose of this chapter is to familiarize the reader with a wide range of influence tactics that he or
she may need to persuade others. A secondary purpose is to sensitize the reader to the difference
between ethical and unethical influence tactics.
CHAPTER OUTLINE AND LECTURE NOTES
Influencing group members to achieve a worthwhile goal is a leader’s quintessential responsibility. To
become an effective leader, a person must be aware of the specific tactics leaders use to influence
others. Although this chapter focuses on influence tactics, other aspects of leadership, such as
projecting charisma and coaching, are also influence processes. Influence is defined here as the
ability to affect the behavior of others in a particular direction. Power is the potential or capacity to
influence. (Power can also be regarded as the ability to influence others.)
I. A MODEL OF POWER AND INFLUENCE
The model shown in Figure 8–1 illustrates that the end results of a leader’s influence
outcomes are a function of the influence tactics he or she uses. The influence tactics are in turn
moderated, or affected by, the leader’s traits and behaviors and the situation.
The three possible outcomes are commitment, compliance, and resistance.
Commitment represents the highest degree of success; the target of the influence attempt is
enthusiastic about carrying out the request and makes it a full effort. Compliance means that
the influence attempt is partially successful. The target person is apathetic (not overjoyed) and
makes only a modest effort to carry out the request. Resistance is an unsuccessful influence
attempt. The target person is opposed to carrying out the request and finds ways to either not
comply or do a poor job.
Traits, including personality and intelligence, impact the effectiveness of influence
tactics. The leader’s behaviors affect influence tactics in a variety of ways. Also, the situation,
such as the organizational culture, can help decide which influence tactic will be effective. For
example, in a high-technology environment, rational persuasion and expertise may be more
effective than an emotional appeal.

61. II. DESCRIPTION AND EXPLANATION OF INFLUENCE TACTICS
Influence tactics are classified here as those that are essentially ethical and honest versus
those that are essentially manipulative and devious. Several of the tactics, however, fall into a
gray area.
A. Essentially Ethical and Honest Tactics
Used with tact, diplomacy, and good intent, the tactics described in this
section can facilitate getting others to join you in accomplishing a worthwhile objective.
These tactics vary in complexity and the time required to develop them.
1. Leading by Example. A simple but effective way of influencing group
members is leading by example, or leading by acting as a positive role model.
2. Using Rational Persuasion. To implement this tactic, the leader uses
logical arguments and factual evidence to convince another person that a proposal or
request is workable and likely to result in goal attainment. Rational persuasion is likely
to be the most effective with people who are intelligent and rational. A major intervening
variable in rational persuasion is the credibility of the influence agent. A subtle factor is
that credible people are perceived as having higher social power.
3. Developing a Reputation as a Subject Matter Expert. Becoming a
subject matter expert (SME) on a topic of importance to the organization is an effective
strategy for gaining influence. Being an SME is a subset of rational persuasion.
4. Exchanging Favors and Bargaining. Offering to exchange favors if
another person will help you achieve a work goal is another standard influence tactic.
This tactic is sometimes referred to as building a favor bank.
5. Getting Network Members to Support Your Position. The ability to
establish a network and to call on support when needed helps a manager or
professional exert influence.
6. Legitimating a Request. A legitimate request falls into one’s scope of
authority and fits organizational policy. Making legitimate requests is an effective
influence tactic because most workers are willing to comply with regulations.
7. Making an Inspirational Appeal and Emotional Display. To inspire
others a leader must obviously make inspirational appeals. Such an appeal is
reinforced by an emotional display. For an emotional appeal to be effective, the
influence agent must understand the values, motives, and goals of the influence target.
8. Displaying Personal Magnetism. Personal magnetism refers to a
captivating, inspiring personality with charm and charismatic-like qualities. The
magnetic individual literally draws other people to him or her, and those people are
influenced by the magnetic person.
9. Consulting. Consultation with others before making a decision is both
a leadership style and an influence technique. The influence target becomes more
motivated to follow the agent’s request because the target is involved in the decision-
making process.

62. 10. Forming Coalitions. A coalition is a specific arrangement of parties working
together to combine their power. Coalition formation works as an influence tactic
because “there is power in numbers.” The more people you get on your side, the better.
The more powerful the leader, the less the need for coalition formation.
11. Being a Team Player. Influencing others by being a good team player is an
important strategy for getting work accomplished. Our research indicates that men and
women endorsed team play as an influence tactic more frequently than the other tactics
studied.
12. Practicing Hands-on Leadership. A hands-on leader is one who gets directly
involved in the details and processes of operations. The hands-on approach influences
subordinates to follow the beliefs, procedures, and processes of the leader.
B. Essentially Dishonest and Unethical Tactics
The tactics described in this section are less than forthright and ethical, yet
they vary in intensity with respect to dishonesty. The first four would be considered
unethical and devious by most people; the last five might be within the bounds of
acceptable ethics.
Deliberate Machiavellianism. Machiavellians are people in the workplace
who ruthlessly manipulate others. They regularly practice deception, bluff, and other
manipulative tactics.
Gentle Manipulation of People and Situations. By making untrue statements
or faking certain behaviors, gentle manipulators get another person to comply. A widely
used manipulative approach is the bandwagon technique. A manager informs her vice
president that she wants an enlarged budget for attendance at a quality seminar
because “all the other companies are doing it.”
Undue Pressure. When rewards become bribes for compliance, and threats of
punishment become severe, the target person is subjected to undue pressure or
coercion.
Game Playing. A game is a repeated series of exchanges between people
that appears different on the surface from its true substance. Influence is exerted in a
game because the person whom the game is played against is made to feel humble.
Blemish is a simple game used to keep group members in line. The leader finds some
flaw in every assignment completed by team members. Another gamelike influence
tactic is the door-in-the-face technique, in which the influence agent makes a major
request the first time that will probably be rejected. Next comes a more modest request
—the one really intended—which may not be rejected because the target feels guilty
about the first rejection.
Debasement. A subtle manipulative tactic is debasement, demeaning or
insulting oneself to control the behavior of another person.
Upward Appeal. In upward appeal, the leader exerts influence on a team
member by getting a person with more formal authority to carry out the influence act.
Silent Treatment. The silent treatment involves the leader’s saying nothing,
sulking, or engaging in other forms of passivity until the influence target complies.

63. Ingratiation. Getting somebody to like you can be considered a mildly
manipulative influence tactic—particularly if you do not like the other person.
Ingratiation includes such basic human relations techniques as asking for something in
a polite way.
Joking and Kidding. Good-natured kidding by the leader is especially effective
when a straightforward statement might be interpreted as harsh criticism.
In studying the most severely unethical influence (and political) tactics,
recognize that the use of these influence approaches can bring about human suffering. For
example, bullying and intimidating tactics may not be illegal, but they are unethical.
III. RELATIVE EFFECTIVENESS AND SEQUENCING OF INFLUENCE TACTICS
Influence tactics have been studied here separately, but they must also be understood in
relation to one another.
A. A Study of the Relative Effectiveness of Influence Tactics
Yukl and Tracey studied the relative effectiveness of influence tactics.
Included in the survey were 120 managers, 526 subordinates, 543 peers, and 128
superiors, all of whom also rated the managers’ use of influence tactics. Respondents were
asked which of nine influence tactics were used by the manager, and how many tactics
resulted in complete commitment. Respondents also rated the managers’ effectiveness.
The most effective tactics were rational persuasion, inspirational
appeal, and consultation. The least effective were pressure, coalition, and appealing to
legitimate authority. Inspirational appeal, ingratiation, and pressure were used primarily in a
downward direction. Personal appeal, exchange, and legitimating were used primarily in a
lateral direction. The authors caution that any tactic can trigger target resistance if it is not
appropriate for the situation or is applied unskillfully.
A study by Wells and Kipnis indicated that both managers and
employees used strong influence tactics when they distrusted the other party—either a
manager or a subordinate. The strong influence tactics studied were appeals to higher
authority, assertiveness, coalition, and sanctions.
B. The Sequencing of Influence Tactics
In general, begin with the most positive, or least abrasive, tactic. Use stronger
tactics only as needed. A sensible approach is to begin with low-cost, low-risk tactics. If the
outcome is important enough, the influence agent can then proceed to higher cost and
higher risk influence tactics. Some research supports the importance of sequencing. For
example, rational persuasion is used more for an initial request, and undue pressure is
used most for delayed follow-up.
The direction of influence tactics is also important. In general, the
more position power an individual exerts over another, the less the need for being cautious
in exerting influence tactics.

64. IV. GUIDELINES FOR ACTION AND SKILL DEVELOPMENT
First, find an influence tactic that fits your ethical code. Be careful to choose the right
combination of influence tactics. For example, ingratiation combined with joking and kidding
might not work well with superiors. Begin with a gentle influence tactic, and then strengthen
your approach as needed.
Choose influence tactics to fit the influence objectives. The same tactic might not work
well for achieving organizational and personal objectives. You might insist that your boss be
mindful of cost overruns, but do not be assertive about asking for time off to play golf with
network members.
Good communication skills, including a sense of humor, are required to implement
influence tactics.
COMMENTS ON EXPERIENTIAL EXERCISES
Leadership Self-Assessment Quiz 8-1: Survey of Influence Tactics
Here is an opportunity for students to compare the frequency of their use of influence tactics with a
sample of managers and professionals. An intended byproduct of completing this questionnaire is to
remind the reader of the existence of certain influence tactics that might be added to their repertoire. A
worthy discussion topic is whether normative data serve as a guide to effectiveness. For example, just
because threat of appeal receives a low frequency rating, does it mean that the tactic is ineffective?
Leadership Self-Assessment Quiz 8-2: Measure of Ingratiating Behavior
in Organizational Settings (MIBOS)
This listing of ingratiating behaviors can also be classified as political tactics. As such, the instrument
might be regarded as twenty-four suggestions for forming a positive relationship with the boss. Many
people at various stages of their career can benefit from heightened awareness of the importance of
pleasing the boss.
Leadership Skill-Building Exercise 8-1: Identifying Influence Tactics
This straightforward test helps the student review his or her understanding of influence tactics. The test
is more difficult than asking students to define and give an example of the various influence tactics.
Diagnostic skill is needed to answer these questions correctly.
Leadership Skill-Building Exercise 8-2: Applying Influence Tactics
Applying a leadership skill in field situations can be valuable experience. At a minimum, such practice
illustrates the point that a combination of study and practice is important for leadership skill
development.
Leadership Skill-Building Exercise 8-3: Inspiring the Team
One reason a group role play of this nature works well is because more than two people are involved,
thereby lowering the discomfort level some people have about role playing. An important feature of the
role play is that it helps operationalize the meaning of inspiring others—certainly a challenging task.

65. COMMENTS ON DISCUSSION QUESTIONS AND ACTIVITIES
1. Which influence tactic described in this chapter do you think would work the best for you? Why?
A student’s choice of influence tactic will frequently be a function of past experience with the
tactic and his or her personality and skills. For example, knowledgeable people and expert
people are likely to choose the technique of being a subject matter expert.
2. Which influence tactic do you think would work the most poorly for you? Why?
A student will similarly think that a particular tactic will not work for him or her based on
experience, personality, and skills. A person who is rarely able to make others laugh, for
example, might believe that joking and kidding would not work for him or her.
3. What differences have you observed among the influence tactics used by technically oriented
versus people-oriented people?
Technically oriented people tend to use influence tactics that are more cognitively based such as
rational persuasion, developing a reputation as a subject matter expert, and consultation. People-
oriented workers will tend toward more emotionally based influence tactics such as inspirational
appeal, emotional display, and personal magnetism.
4. Which of the tactics described in this chapter help explain the widespread use by leaders of
person-to-person meetings when they want to accomplish a major objective?
Several of the influence tactics studied here are implemented better face-to-face than by
electronic or paper transmission. These tactics include inspirational appeal, Machiavellianism,
ingratiation, personal magnetism, and joking and kidding.
5. How can email be used to implement any of the influence tactics described in this chapter?
Email can be used to implement most of the influence tactics in this chapter by simply delivering
the influence attempt electronically rather than in person. To illustrate, a manager might joke and
kid using email as a medium. Also, coalitions can be formed by creating allies through email
messages, and a person could also debase oneself in an email message.
6. Identify two exchanges of favor you have seen or can envision on the job.
One exchange is to offer future compensatory time off to a worker on the exempt payroll if he or
she will put in extra time on an urgent project now. Another common exchange is to get
somebody to expedite a project for you with a promise of reciprocating in the future. In one
company a service technician helped another worker prepare a spreadsheet in exchange for
having a letter translated from English into Spanish.
7. In what way is being a subject matter expert (SME) a source of power as well as an influence
tactic?
Being a subject matter expert helps a person exert power because others come to rely on that
person for his or her expertise. Being a subject matter expert also helps the person exert
influence because others will follow the person’s advice, based on his or her expertise.
8. Which of the influence tactics described in this chapter is a charismatic leader the most likely to
use? Explain your answer.

66. A charismatic leader emphasizes influence tactics that are more transformational than
transactional. The tactics most suited for a charismatic leader are leading by example,
inspirational appeal, personal magnetism, and emotional display.
9. Which influence tactics have been the most effective in influencing you? Support your answer
with an anecdote.
Here is a representative answer: “If another person is a subject matter expert, I will be influenced
by him or her. When someone is smart, that carries a lot of weight with me. One time I was
debating whether to spend a few days a week as a telecommuter. My team leader, who was very
knowledgeable about career management, convinced me that it was too early in my career to
work at home. She warned me about being ‘out of sight, out of mind’ so I junked my plans.”
10. Get the opinion of an experienced leader as to the most effective influence tactics. Share your
findings with class members.
One approach to gather information for this question is to present the leader with a list of the
tactics described in this chapter. Another approach is to be less structured, which will probably
result in the mention of various emotional tactics.
PLAUSIBLE RESPONSES TO CASE QUESTIONS
Leadership Case Problem A: Boeing Company’s Chief Rides the Tiger
This case illustrates the complexity of a CEO’s job, as well as the many tactics an executive might use
to influence people.
1. Which influence tactics does Phil Condit appear to use?
The fact that Condit is an engineering whiz suggests that he uses being a subject matter expert
to influence people. He is a good team player, mixing it up with the troops by visiting the
company cafeteria. His controversial decision to relocate Boeing to Chicago shows he can be
assertive. Condit’s tactic of switching clothing to adapt to his audience hints at manipulation, or
simply emotional intelligence. His ability to bargain successfully suggests that he uses the
technique of exchange.
2. In what ways does Condit appear to be politically skillful? Ethical?
Condit’s success at negotiation suggests political skill, as does his quick changes of clothing, and
his delegating the nasty work of firing employees.
3. What should Condit include in the next vision he creates for Boeing?
Boeing is such a great brand name that the vision could include expanding into other modes of
transportation such as subways and recreational vehicles—following the lead of Bombardier of
Quebec.
4. What is your evaluation of the leadership effectiveness of Phil Condit?
Condit is a well-respected leader, and he emphasizes human resources. Nevertheless, he has
not been effective at maintaining job security for workers. He may be effective at labor relations,
yet Boeing has had its share of strikes and threats of strikes. So maybe Condit is not the totally
effective CEO.

67. Leadership Case Problem B: How Can I Inspire My Team?
This case illustrates some of the realities and challenges of a team leader attempting to influence team
members.
1. What can Jacques Renfert do to influence his team to perform better?
Renfert might make more use of motivational techniques such as goal setting, and formal
recognition of team accomplishments. For example, he might hold a “victory lunch” if the team
accomplishes an important goal.
2. Which influence tactics (if any) is Renfert using to achieve better results with his team?
When Renfert explained to the group that they had moved into the modern era of teams, he was
using the tactic of legitimating, because he suggested that teams were now required by a higher
authority. He also says, “The company has decided this is the way to go.”
3. Based on whatever information you have found in the case, how would you rate Renfert’s
charisma?
Renfert appears to be a transactional leader, as tipped off by his statement, “I do everything I’m
supposed to. I hold meetings. I take care of the paperwork and email. I try to settle problems. I
say thank you when somebody does a good job.” A charismatic leader is usually more
transformational than transactional. The fact that Renfert is not inspiring the team also suggests
that he is low in charisma.

68. CHAPTER 9
Developing Teamwork
The purpose of this chapter is to provide the reader with specific information about how to develop
teamwork. Such information is vital in an era that glorifies the importance of teamwork.
CHAPTER OUTLINE AND LECTURE NOTES
Developing teamwork is such an important leadership role that team building is said to differentiate
successful from unsuccessful leaders. A team is a work group that must rely on collaboration if each
member is to experience the optimum success and achievement. Teamwork is an understanding and
commitment to group goals on the part of all team members. All teams are groups, but not all groups
are teams. A team accomplishes many collective work products, whereas group members sometimes
work slightly more independently.
I. TEAM LEADERSHIP VERSUS SOLO LEADERSHIP
Team leaders share power and deemphasize individual glory. They are flexible and adaptable,
welcoming change. The solo-style leader is the traditional autocratic leader in a bureaucracy.
The solo leader may not recognize how dependent he or she is on the team.
II. ADVANTAGES AND DISADVANTAGES OF GROUP WORK AND TEAMWORK
Groups and teams have grown in importance as a fundamental unit of organization structure.
A. Advantages of Group Work and Teamwork
Collective thinking can enhance decision making and lead to synergy. Major
errors are likely to be avoided. Job satisfaction may also increase. Another key advantage
of teams is that they can contribute well to continuous improvement and innovation. At the
executive level, team structures have streamlined management to some extent. Top
executive teams often execute strategy themselves, eliminating the need for a chief
operating officer.
B. Disadvantages of Group Activity

69. Pressures to conform may lower productivity, including ostracizing a
productive group member. Social loafing, or shirking individual responsibility, is a
widespread problem.
A major potential problem with groups and teams is that they can waste
considerable time through too many meetings and striving for consensus. Groupthink is a
well-publicized disadvantage of group activity. Another concern is that groups are an
unstable arrangement because team leaders revert to retaining most of the authority. An
effective tactic for capitalizing on the advantages of teams and minimizing their
disadvantages is to rely on teams only when the task is suited to their use.
III. THE LEADER’S ROLE IN THE TEAM-BASED ORGANIZATION
Instead of the leader’s job disappearing, leaders learn to lead in new ways. The new leaders
need to understand team processes. Leaders are often facilitators who lead two or three teams.
Teams need effective leadership to stay on course, especially when they are forming. Some of
the key roles of a leader in a team-based organization include:
∑ Building trust and inspiring teamwork
∑ Coaching toward higher levels of performance
∑ Anticipating and influencing change
∑ Enabling and empowering group members to accomplish their work
∑ Encouraging team members to eliminate low-value work
IV. LEADER ACTIONS THAT FOSTER TEAMWORK
Inspirational leaders, as well as less charismatic ones, can encourage teamwork through
certain actions and attitudes. The actions can be divided into those leaders can take using their
own resources (informal techniques) and those actions that generally require organization
structure or policy (formal techniques).
A. Actions Leaders Can Take Using Their Own Resources
1. Defining the Team’s Mission. A starting point in developing teamwork
is to specify the team’s mission. The mission should contain a specific goal, purpose,
and philosophical tone. An example: “To plan and implement new manufacturing
approaches to enhance our performance image and bolster our competitive edge.”
2. Developing a Norm of Teamwork and Emotional Intelligence. A major
strategy for teamwork development is to promote the attitude among group members
that working together is an expected standard of conduct. The leader can also
communicate the norm of teamwork by frequently using words and phrases that support
teamwork. A belief in cooperation and collaboration rather than competitiveness as a
strategy for building teamwork is called cooperation theory.
The leader’s role in developing a norm of teamwork can also
be framed as the leader helping the group develop emotional intelligence. The leader
creates norms that establish mutual trust among members. A group identity and group
efficacy (feelings of competence) also help build emotional intelligence. Bringing
emotions to the surface also helps.
3. Emphasizing Pride in Being Outstanding. A standard way of building
team spirit, if not teamwork, is to help the group realize why it should be proud of its
accomplishments.

70. 4. Holding a Powwow. A powwow is an informal, friendly, and
unstructured meeting intended to lay the groundwork for a cooperative working
relationship among team members assigned to a new project. Each powwow consists
of a skills inventory, an interest inventory, and a data dump (an expression of feelings
about the project).
5. Serving as a Model of Teamwork. A powerful method of fostering
teamwork is for the leader to be a positive model of team play. One way of exemplifying
teamwork is for the leader to reveal important information about ideas and attitudes
relevant to the group’s work. Frequent interaction with the team also helps.
6. Using a Consensus Leadership Style. Consensus decision making
enhances teamwork. Contributing input to important decisions helps foster the feeling
among group members that they are valuable team members. The consensus
leadership style reflects a belief in shared governance and partnership instead of
patriarchal caretaking. Generation X managers are likely to practice consensus
leadership because they are good at collaboration and consensus building.
7. Establishing Urgency, Demanding Performance Standards, and
Providing Direction. Team members need to believe that the team has urgent,
constructive purposes. The more urgent and relevant the rationale for the team’s
purpose, the more likely it is that the team will achieve its potential. To help establish
urgency, it is helpful for the leader to challenge the group regularly.
8. Encouraging Competition with Another Group. One of the best-known
methods of encouraging teamwork is to rally the group against a real or imagined threat
from the outside.
9. Encouraging the Use of Jargon. The symbolic and ritualistic
framework of a group contributes heavily to teamwork. An important part of this
framework is a specialized language that fosters cohesion and commitment.
10. Soliciting Feedback on Team Effectiveness. Mechanisms should be
established for obtaining self-feedback and feedback from others. When the feedback is
positive, the team may experience a spurt of energy to continue working together well.
Negative feedback might bring the team together to develop action plans for
improvement.
11. Minimizing Micromanagement. A strategic perspective on encouraging
teamwork is for the leader to minimize micromanagement, the close monitoring of most
aspects of group members’ activities. Avoiding micromanagement facilitates
empowerment.
B. Actions Generally Requiring Organization Structure or Policy
1. Designing Physical Structures That Facilitate Communication. Group
cohesiveness, and therefore teamwork, is enhanced when team members are located
close together and can interact frequently and easily. A shared physical facility also
helps.
2. Emphasizing Group Recognition and Rewards. Giving rewards for
group accomplishment reinforces teamwork because people receive rewards for what
they have accomplished collaboratively. Methods of group recognition include
celebrations of milestones and painting equipment in team colors. A study showed that

71. financial rewards for teams should be pay for skills, team performance pay,
gainsharing, and profit sharing.
3. Initiating Ritual and Ceremony. Ritual and ceremony afford
opportunities for reinforcing values, revitalizing spirit, and bonding workers to one
another and the teams.
4. Practicing Open-Book Management. In open-book management
every employee is trained, empowered, and motivated to understand and pursue the
company’s business goals. In this way the employees become business partners, and
they perceive themselves to be members of the same team.
5. Selecting Team-Oriented Members. A heavy-impact method of
building teamwork is to select team members who are interested in and capable of
teamwork. A starting point is self-selection. Many managers believe that individuals who
participate in team sports, now, or in the past, are likely to be good team players on the
job.
6. Using Technology That Enhances Teamwork. Workers can
collaborate better when they use information technology that fosters collaboration, often
referred to as groupware. Frequent email messages and electronic brainstorming also
assist teamwork.
V. OUTDOOR TRAINING AND TEAM DEVELOPMENT
Outdoor training is a well-known experiential approach to building teamwork and leadership
skills. Wilderness training is closely associated with outdoor training except that the setting is
likely to be much rougher. In both outdoor training and wilderness training, participants are
supposed to acquire leadership and teamwork skills by confronting physical challenges and
exceeding their self-imposed limitations. The goals of outdoor training include (1) discovering
your strengths and weaknesses, (2) testing your limits, and (3) having the opportunity to break
through barriers between yourself and others.
A. Features of Outdoor and Offsite Training Programs
Participants are placed in a demanding outdoor environment. They have to
rely on skills they did not realize they had and on each other to complete the program.
Emphasis is placed on building self-confidence, leadership, and teamwork. The list of team-
building activities continues to grow and now includes tightrope walking, adventure racing,
and cooking.
Outward Bound is the best-known and largest provider of outdoor
training programs. Courses typically run from three days to four weeks. The Outward Bound
Professional Development Program is geared toward organizational leaders because it
emphasizes teamwork, leadership, and risk taking. Frequent activities include jumping from
high places while attached to a rope pulley and falling backward into the arms of other
participants (“trust falls”).
Outdoor training enhances teamwork by helping participants examine
the process of getting things done through working with people. In going through the
exercises, they have to communicate well and trust one another.
B. Evaluation of Outdoor Training for Team Development
Outdoor trainers claim that their programs improve self-confidence, help
people appreciate their strengths, and teach people to work better with one another. Many
training directors also speak positively of outdoor training. Reservations about outdoor

72. training include the fact that it is physically dangerous and that the teamwork training does
not carry over to the job. Also, real workplace teams change membership rapidly, thus
negating some of the team building that the group experienced during the training. Another
problem with outdoor and offsite training is that some participants perceive the experience
as wasting time and sometimes distasteful. The case example about the Entrepreneur
magazine staff that attended outdoor training illustrates the pros and cons of the process.
VI. THE LEADER-MEMBER EXCHANGE MODEL AND TEAMWORK
The leader-member exchange model developed by George Graen and associates helps
explain why one subgroup in a unit is part of a cohesive team and another group is excluded.
The leader-member exchange model (LMX) proposes that leaders develop unique working
relationships with group members. One subset of employees, the in-group, is given additional
rewards, responsibility, and trust in exchange for their loyalty and performance. The in-group
becomes part of a smoothly functioning team headed by the formal leader. Out-group members
are less likely to experience good teamwork.
A. Different-Quality Relationships
Leaders treat each member somewhat differently, with the links that exist
between the leader and each individual team member differing in quality. When the quality
of the relationship is high, the member is “in” with the leader. Leaders and group members
liking each other is a major contributor to the quality of the relationship. A study found that
when the leader-member exchange is high, group members are more strongly committed to
company goals.
A study in a hospital setting showed that positive exchanges were
associated with group members’ engaging in increased good citizenship behavior and also
in-role behaviors such as extra effort. An industrial study found that high-quality exchanges
between managers and employees contribute to employees’ engaging in extra-role
behavior, or being cooperative in ways not expected of them. A study with sixty-four group
leaders found that positive leader-member exchanges were associated with more
communication about safety, leading to more commitment to safety, and fewer accidents on
the job.
B. First Impressions
The leader’s first impression of a group member’s competency plays an
important role in placing the member into the in-group or out-group. Another key linking
factor is whether the leader and team member have positive or negative chemistry. A study
showed that the initial leader expectations of group members and member expectations of
the leader were good predictors of the leader-member exchanges at two weeks and six
weeks.
VII. GUIDELINES FOR ACTION AND SKILL DEVELOPMENT
Improving teamwork through office design is receiving considerable attention. Here is how the
leader/manager can customize space to promote teamwork: (1) create common areas, (2) put
yourself in the center, (3) set up multipurpose rooms, and (4) insert “activity generators” such as
a coffee pot or reception desk to draw traffic.

73. COMMENTS ON EXPERIENTIAL EXERCISES
Leadership Self-Assessment Quiz 9-1: The Teamwork Checklist
An advantage of this teamwork checklist is that it reflects the observations of a teamwork consultant.
The items do not duplicate the suggestions for teamwork made in this chapter and therefore provide
additional insights into teamwork.
Leadership Skill-Building Exercise 9-1: Shelters for the Homeless
This exercise offers yet another opportunity for practicing teamwork. Our experience with the previous
editions of the text is that the content of this exercise has high intrinsic interest and thus leads to
enjoyable student interactions.
Leadership Self-Assessment Quiz 9-2: Overcoming Micromanagement
Given that this quiz has only four questions, the score may not have high reliability. However, the
author of the quiz provides the quiz-taker with some useful ideas about overcoming tendencies toward
micromanagement. My impression is that students enjoy discussing micromanagement. Also, bring up
the topic of macromanagement (a manager who does not provide enough structure) because it is a
new concept for most students.
Leadership Skill-Building Exercise 9-2: The Trust Fall
We emphasize strongly that the trust fall should be a voluntary exercise. To begin, a vote might be
taken on whether the class should do the trust fall. If the vote is affirmative, team members should be
given the option of not being a person who falls or helps catch another person.
Leadership Skill-Building Exercise 9-3: Trust Me
The Trust Me exercise is more complicated than the Trust Fall, therefore offering the possibility of
greater student involvement. The exercise also gives students more data to work with in terms of
making observations about teamwork.
COMMENTS ON DISCUSSION QUESTIONS AND ACTIVITIES
1. What would be the potential disadvantages of selecting a team leader who is highly charismatic
and visionary?
A highly charismatic leader will often set himself or herself off from the group, and group
members might rely heavily on his or her judgment. As a consequence, leadership will not be
distributed to the extent it should be in a true team.
2. Identify several collective work products from any group in which you have worked.
Collective work products often take the form of useful suggestions stemming from brainstorming
sessions. Many software developments stem from group problem solving, as do ideas for new
products and product development. A good answer here is to identify the output from group
problem solving.

74. 3. Identify and describe any team you have been a member of, or know about otherwise, that has a
strong norm of teamwork.
A sterling example is the teamwork shown by teams of consultants who work together
relentlessly both on and off the premises to solve problems. Product development teams also
frequently reflect a gung ho spirit. Surgical teams and astronauts represent equally strong
examples of teamwork.
4. Is there a role for independent-thinking, decisive, and creative leaders in a team-based
organization? Explain.
Despite all the favorable press about team-based organizations, decisive, creative, and
independent-thinking leaders are still in demand. Independent leaders of this type are particularly
in demand for key corporate positions, such as a CEO hired with the assist of an executive
recruiter.
5. What forces for and against being a good team player are embedded in American culture?
Among the forces for being a good team player embedded in the American culture are the
American obsession with team sports and the extensive use of cooperative (team) learning
throughout the school system. A major force against teamwork is the glory Americans attach to
individual achievement like that of superstars in sports and other forms of entertainment, and the
attention paid to successful business executives—even after all the scandals.
6. You have probably been told many times to minimize jargon in speech and writing in order to
enhance communication, yet this chapter advocated using jargon to encourage teamwork. How
do you reconcile the difference between the two pieces of advice?
Jargon may confuse people, especially those outside the group. Nevertheless, jargon is a within-
group team builder.
7. How might open-book management be helpful in reducing dishonest and unethical financial
reporting by business executives?
With open-book management in operation, a wide range of employees has the opportunity to
examine the books. The risk of a whistleblower telling the outside world of dishonest accounting
would multiply considerably. Employees outside the auditing staff play an auditing role under
open-book management.
8. What is your opinion of the value of experience in team sports for becoming a good team player
in the workplace?
Most people see a carryover from team play in sports to team play in the workplace. When polled
on the subject, the majority of executives think that team sports help prepare a person for being a
team member on the job. So people who oppose this idea would face a lot of opposition.
9. What should be done about the team members who refuse to participate in team-building
activities they perceive to be physically dangerous?
One alternative is for the more cautious members to play physically safe roles such as
timekeeper or observer. Another possibility is to develop backup activities for team development
that are not physically dangerous. Brainstorming is a good possibility, as is the Trust Me exercise
described in this chapter.

75. 10. How can political skill help a person avoid being adversely affected by the leader-member
exchange model?
By using political skill, the group member can get on the good side of the leader and thus avoid
becoming an out-group member.
PLAUSIBLE RESPONSES TO CASE QUESTIONS
Leadership Case Problem A: Radius Cooks Up Teamwork
An important feature of this case is that it illustrates that a small business, such as a restaurant,
attributes some of its success to teamwork.
1. What actions is chef Michael Schlow taking to develop teamwork at Radius?
Schlow has created teams in the kitchen, rather than using the task specialization typical of
restaurant kitchens. Each station, such as the meat station, is composed of a small team. The
rotating experience develops teamwork because workers learn about other types of work in the
restaurant, thereby developing empathy for other groups—a form of cooperation across teams.
The in-restaurant meetings are a key mechanism for reinforcing teamwork. The daily service
meetings facilitate the entire restaurant working as a team.
2. In what way does the continuous learning activity at Radius contribute to teamwork?
The continuous learning facilitates loyalty because the activity motivates the young cooks to stay
with the restaurant. The presence of loyal employees in the restaurant enhances teamwork
because loyalty to the firm facilitates the cooperation necessary for teamwork.
3. In what way are the co-owners of Radius showing a balanced concern for task and people?
The co-owners give considerable structure to the group in terms of precise instructions about
such matters as how to capitalize on surplus food, reflecting a task orientation. At the same time,
the emphasis on teamwork and a concern for the personal growth needs of the chefs reflects a
people orientation.
4. Is this any way to run a deluxe restaurant?
The strategy of combining high-level expertise, including creativity, with a concern for teamwork
is a winning combination.
Leadership Case Problem B: Showboat Brent
This case illustrates the dynamics of what happens when one team member pushes hard for individual
recognition at the expense of the welfare of the group.
1. What steps should Mary Tarkington take to develop better teamwork among the members of her
task force?
From the evidence presented in this case history, it appears that the teamwork is relatively good
except for Brent, who is attempting to carve out an emergent leadership role for himself.

76. Tarkington might give the group feedback about how she perceives them interacting, including
the concerns about Brent.
2. What actions, if any, should the other task force members take to make Brent a better team
player?
During their next team meeting, the group might share their perceptions about Brent’s
showboating—but not in a hostile way that will alienate him from the group. At the same time, the
task force members might compliment Brent on what he has done well.
3. What kind of power is Brent attempting to establish for himself?
Brent is attempting to gain expert power for himself in a hurry through his intensive research into
wellness programs. At the same time he is attempting to use the influence tactic of being a
subject matter expert. Because team member Kristine is a human resources professional it is
somewhat awkward for him to take over this role.

77. CHAPTER 10
Motivation and Coaching Skills
The purpose of this chapter is to provide the reader with specific ideas for motivating and coaching
group members. A leader is supposed to be able to inspire people. Nevertheless, influencing others
through specific motivation techniques and coaching is also necessary.
CHAPTER OUTLINE AND LECTURE NOTES
Effective leaders are outstanding motivators and coaches. Motivation and coaching techniques are
important because not all leaders can influence others through formal authority or charisma and
inspirational leadership alone. Face-to-face, day-by-day motivational skills are also important.
I. EXPECTANCY THEORY AND MOTIVATIONAL SKILLS
Expectancy theory incorporates features of other motivation theories and offers the leader
many guidelines for triggering and sustaining constructive effort from group members.
The expectancy theory of motivation is based on the premise that how much effort
people expend depends on how much reward they expect to get in return. Expectancy theory as
applied to work has recently been recast as motivation management. The theory assumes that
people choose among alternatives by selecting the one they think they have the best chance of
attaining. Furthermore, they choose the alternative that appears to have the biggest personal
payoff.
A. Basic Components of Expectancy Theory
All versions of expectancy theory have three major components.
1. Valence is the worth or attractiveness of an outcome. Each outcome
in a work situation has a valence of its own. Valences range from –100 to +100 in the
version shown here. A valence of –100 reflects intense desire to escape an outcome,
whereas +100 indicates intense desire for an outcome. A zero valence reflects
indifference.
2. Instrumentality is the probability assigned by the individual that
performance will lead to certain outcomes. An outcome is anything that might stem

78. from performance, such as a reward. An instrumentality is also referred to as a
performance-to-outcome expectancy because it reflects the link between performance
and outcomes.
Each outcome has a valence of its own. And each outcome can lead
to other outcomes or consequences, referred to as second-level outcomes.
Expectancy is the probability assigned by the individual that effort will lead to
performing the task correctly. It is also referred to as effort-to-performance expectancy.
If you have high self-efficacy (the confidence in your ability to carry out a specific task),
your motivation will be high.
For motivation to occur, the sum of all the valences must
deviate from neutral, so that the person will work hard to attain or avoid the outcome.
The expectancy and instrumentality must also be high. A seeming contradiction in
expectancy theory requires explanation: People will engage in low-probability behaviors
provided that the valence is extraordinarily high.
4. A Brief Look at the Evidence. Two researchers performed a meta-
analysis of seventy-seven studies of how well various aspects of expectancy theory
were related to workplace criteria such as performance and effort. Despite mixed
evidence, the general conclusion reached was that the three components of expectancy
theory are positively related to workplace criteria. Another finding was that effort
expended on the job was positively correlated with valence.
B. Leadership Skills and Behaviors Associated with Expectancy Theory
Expectancy theory has many implications for leaders and managers with
respect to motivating others. Some of these implications would also stem from other
motivational theories and would fit good management practice in general.
1. Determine what levels and kinds of performance are needed to
achieve organizational goals.
2. Make the performance level attainable by the individuals being
motivated.
3. Train and encourage people.
4. Make explicit the link between rewards and performance.
5. Make sure the rewards are large enough.
6. Analyze what factors work in opposition to the effectiveness of the
reward.
7. Explain the meaning and implications of second-level outcomes.
8. Understand individual differences in valences.
II. GOAL THEORY
The core finding of goal theory is as follows: Individuals who are provided with specific, hard
goals perform better than those who are given easy, nonspecific, “do your best” goals or no
goals. At the same time, however, the individual must have sufficient ability, accept the goal,

79. and receive feedback related to the task. A goal is what a person is trying to accomplish.
Following are consistent findings from goal theory:
1. Specific goals lead to higher performance than do generalized goals.
2. Performance generally improves in direct proportion to goal difficulty. Goals
that are too difficult can be frustrating, yet powerful goals can be inspirational. These
powerful goals can be divided into subgoals to facilitate attainment.
3. For goals to improve performance, the worker must accept them. (Recent
experiments suggest, however, that the importance of commitment may be overrated.)
4. Goals are more effective when they are used to evaluate performance.
5. Goals should be linked to feedback and rewards. Rewarding people for
reaching goals is perhaps the best-accepted principle of management.
6. Group goal setting is as important as individual goal setting.
7. A learning-goal orientation (wanting to learn) improves performance more
than does a performance-goal orientation (wanting to look good).
One explanation of the value of goals is that they establish a discrepancy between the real
and the ideal. The accompanying arousal prompts the person to achieve the goal.
III. BEHAVIOR MODIFICATION AND MOTIVATIONAL SKILLS
Behavior modification is an attempt to change behavior by manipulating rewards and
punishments. An underlying principle is the law of effect: Behavior that leads to a positive
consequence is repeated, and behavior that leads to a negative consequence tends not to be
repeated.
A. Behavior Modification Strategies
Behavior modification applies to both learning and motivation. The four key
strategies are positive reinforcement, avoidance motivation (negative reinforcement),
punishment, and extinction. A guiding principle for motivating workers through behavior
modification is that you get what you reinforce.
B. Rules for the Use of Behavior Modification
Leaders can use behavior modification effectively by following certain rules:
1. Target the desired behavior.
2. Choose an appropriate reward or punishment.
3. Supply ample feedback.
4. Do not give everyone the same-sized reward.
5. Find some constructive behavior to reinforce (behavior shaping).
6. Schedule rewards intermittently.
7. Ensure that rewards and punishments follow the behavior closely in
time.
8. Change the reward periodically.
9. Make the rewards visible and the punishments known.

80. Substantial research indicates that behavior modification leads to important
outcomes such as productivity improvement. An experiment in the operations division of a
credit-card processing company found that monetary rewards based on the principles of
behavior modification outperformed routine pay for performance (37 percent versus 11
percent).
IV. USING RECOGNITION TO MOTIVATE OTHERS
Motivating others by giving them recognition and praise can be considered a direct application
of positive reinforcement. Recognition programs to reward and motivate employees are
standard practice.
Recognition is a strong motivator because it is a normal human need to crave
recognition, and many workers feel recognition-deprived. To appeal to the recognition need of
others, identify a meritorious behavior and then recognize the behavior with an oral, written, or
material reward. Also, apply the rules for behavior modification.
Because recognition is low cost or no cost, it has an enormous return on investment in
comparison to a cash bonus. However, not everybody (particularly highly technical workers)
responds well to recognition.
An effective recognition award possesses at least one of the following qualities: (1) it
has symbolic meaning, (2) it inspires pride of ownership, or (3) it helps to reinforce the
philosophy or identity of the giver.
V. COACHING AS A LEADERSHIP PHILOSOPHY
Effective leaders who deal directly with other employees are good coaches. The quality of the
relationship between the coach and the person coached distinguishes coaching from other
forms of leader-member interactions. Coaching is a way of enabling others to act and build on
their strengths. Coaching often increases productivity.
A. Key Characteristics of Coaching
Evered and Selman regard coaching as a paradigm shift from traditional
management, which focuses heavily on control, order, and compliance. Coaching, in
contrast, focuses on uncovering actions that enable people to contribute more fully and
productively. Coaching is also seen as a partnership for achieving results. The link between
leadership and coaching is explained using the following characteristics of coaching.
1. Coaching is a comprehensive and distinctive way of being linked to
others in the organization.
2. Coaching is a way of being and relating that might ordinarily be
explained away as the “art of management.”
3. Coaching is a two-way process, suggesting that a great coach needs
great people to coach.
4. Coaching produces results only through the process of
communication.
5. Coaching is a dyad, like leader/group member or director/actor.
6. Coaching requires a high degree of interpersonal risk and trust on the
part of both people in the relationship.

81. 7. Coaching generates new possibilities for action and facilitates
breakthroughs in performance.
Coaching also offers concrete advantages, such as higher motivation and the personal
development of the people who are coached.
B. Fallacies About Coaching
Misperceptions about coaching are relevant to understanding the process.
1. Coaching only applies in one-to-one work. (In reality, the group can
also be coached.)
2. Coaching is mostly about providing new knowledge and skills. (In
truth, people often need more help with underlying habits.)
3. If coaches go beyond giving instruction in knowledge and skills, they
are in danger of getting into psychotherapy. (In truth, coaches should simply follow the
model of effective parents.) Note that most mental health professionals would take
strong exception to this fallacy.
4. Coaches need to be experts in something in order to coach. (In truth,
a great coach does not have to be a great player.)
5. Coaching has to be done face-to-face. (In truth, telephone and email
can be effective substitutes.)
VI. COACHING SKILLS AND TECHNIQUES
Coaching skills are important because coaching is a direct way of influencing group members.
If implemented with skill, the following suggestions will improve the chances that coaching will
lead to improved performance.
1. Communicate clear expectations to group members.
2. Build relationships.
3. Give feedback on specific areas that require improvement.
4. Listen actively.
5. Help remove obstacles.
6. Give emotional support. One facet of giving emotional support is for
the leader/ manager to be a toxic handler, a person who helps others deal with sadness
and despair.
7. Reflect content or meaning.
8. Give some gentle advice and guidance.
9. Allow for modeling of desired performance and behavior.
10. Gain a commitment to change.

82. 11. Applaud good results.
VII. EXECUTIVE COACHING AND LEADERSHIP EFFECTIVENESS
An executive coach (or business coach) is an outside or inside specialist who advises a
person about personal improvement and behavioral change. Executive coaches provide such a
variety of services that they have been described as a combination of “a counselor, adviser,
mentor, cheerleader, and best friend.” Three examples of assistance offered by executive
coaches are:
• Counseling the leader about weaknesses, such as being too hostile and
impatient, that could interfere with effectiveness.
• Serving as a sounding board when the leader faces a complex decision about
strategy, operations, or human resource issues.
• Helping the leader uncover personal assets and strengths he or she may not
have known existed. (An example would be discovering that the leader has untapped
creativity and imagination.)
A refinement of individual coaching is for the coach to work with both the individual and his or
her work associates. The coach will solicit feedback from the group members, as well as involve
them in helping the manager improve.
Company evidence about the contribution of business coaching is sometimes
impressive. In one study of 127 senior managers, the coached executives scored higher than a
contrast group on a long list of measures including “results obtained,” and “building
relationships.” A potential drawback of executive coaching is that advice and suggestions may
backfire because they do not fit the culture. Also, the coach may not recognize a mental health
problem.
VIII. GUIDELINES FOR ACTION AND SKILL DEVELOPMENT
The leader/manager should keep in mind available forms of recognition because recognition
can be such a relatively low cost yet highly effective motivator. For the recognition technique to
work well, it should have high valence for the person or group under consideration. Forms of
recognition include (a) compliments, (b) encouragement for a job well done, (c) employee-of-
the-month award, and (d) wall plaque indicating accomplishment.
COMMENTS ON EXPERIENTIAL EXERCISES
Leadership Skill-Building Exercise 10-1: Estimating Valences
for Applying Expectancy Theory
Many people have never thought of attempting to quantify the motivational value of rewards and
punishments (or outcomes). As a consequence, this exercise can be thought-provoking. Variability in
the ratings will reinforce the idea of managing for individual differences in valences. The outcome
rating scale offers good possibilities for student research projects, such as looking for significant
differences in ratings among various groups.

83. Leadership Skill-Building Exercise 10-2: The Application of Goal Theory
This modest exercise in goal theory gives students an opportunity to implement one of the leader/
manager’s most important tasks—helping group members establish effective goals. The most
challenging part of this assignment is to set goals that fit the basics of goal theory, such as clarifying
how the group members will be rewarded for attaining goals.
Leadership Self-Assessment Quiz 10-1: My Approach to Motivating Others
Many students will have studied motivation before taking a leadership course, so whatever information
they retain from the past plus the information from this course should help them perform well on this
quiz. It might be worth discussing why several of the items are keyed in a particular direction. An
example would be number 18: “I make it a policy not to thank somebody for doing a job they are paid
to do.”
Leadership Self-Assessment Quiz 10-2: Characteristics of an Effective Coach
An important purpose of this activity is to emphasize the importance of having the right characteristics
to be an effective coach. Some students will recognize the importance of developing certain personal
characteristics in order to become an effective coach.
Leadership Skill-Building Exercise 10-3: Coaching for Improved Performance
As in all role plays, students need encouragement to use some of the ideas in the text rather than
simply using their present skills and knowledge. Students usually enjoy this type of role-play because it
reflects the day-by-day reality of being a manager or a leader.
COMMENTS ON DISCUSSION QUESTIONS AND ACTIVITIES
1. Andrew Pearson, one of the two top executives at Tricon Global Restaurants, Inc. (described in
the chapter opener), was 76 at the time of the story. Yet the clientele of KFC, Pizza Hut, and
Taco Bell tend to be young. Explain whether you think Pearson’s age is an asset or a liability for
the position.
Pearson’s accumulated knowledge, wisdom, and common sense about operating a food
business are distinct assets, along with his leadership skill. All of these assets build with
experience. One possible age liability factor would be that Pearson might not readily identify with
the tastes of his adolescent customers. Tricon workers other than Pearson, however, probably
make product decisions.
2. Identify several outcomes you expect from occupying a leadership position. What valences do
you attach to them?
The discussion in Chapter 1 about the satisfactions and frustrations of being a leader might help
jog the student’s thinking about both positive and negative outcomes associated with being a
leader. Valences are a personal matter, but outcomes with high positive valence include power,
status, and high income. Outcomes with negative valence might include long hours, time away
from family and friends, and receiving so much criticism.
3. How can the influence exercised by a charismatic leader tie in with expectancy theory?

84. One possibility here is that charismatic and transformational leaders point the way toward very
desirable outcomes, such as a much stronger organization. These outcomes will have high
valence for many people.
4. Explain how valence, instrumentality, and expectancy could relate to job performance.
Valence can relate to job performance because people will work harder to achieve rewards to
which they attach high valences. Instrumentality relates to job performance because people will
expend more effort when they have reasonable assurance that hard work will lead to a
worthwhile reward. Expectancy relates to job performance because workers will be more
motivated when they believe they can achieve the required performance.
5. What is a potential second-level outcome a person could gain from receiving an A grade in the
course for which you are reading this text? From receiving an F grade?
Potential second-level outcomes from achieving an A grade would include self-satisfaction, a
higher grade point average, and perhaps a better job offer. Second-level outcomes from an F
grade could be self-dissatisfaction, withdrawal of a scholarship, being placed on academic
probation, and not receiving a valued job offer.
6. What does goal theory tell managers that they probably don’t already know about using goals to
motivate people?
The emphasis on specific and difficult but realistic goals might add value for many managers.
Some managers may not realize that overambitious goals may lead to frustration because they
will be attained so infrequently.
7. Which forms of recognition are likely to be the most effective in motivating professional-level
workers?
The forms of recognition most likely to motivate professional-level workers tend to be more
sophisticated, less hokey, and less trivial. For example, a public announcement about a worker’s
fine performance would be more effective than an employee-of-the-month plaque or free movie
passes.
8. In what way is coaching related to hands-on leadership?
Hands-on leadership, if not practiced in the extreme, contributes to coaching. The hands-on
leader works closely with the details of the operation, and is therefore in a good position to
coach. He or she has a keen understanding of what group members are doing.
9. How might a leader use coaching to help increase ethical behavior among group members?
Coaching is a powerful vehicle for enhancing ethical behavior among group members. As the
coach observes behavior reflecting questionable ethics, the group member can be coached on
the spot. Similarly, when the coach observes ethical behavior in a situation with ethical
temptations (such as overcharging a customer), the coach can give the individual special
recognition.
10. Ask a manager to describe the amount of coaching he or she does on the job. Be prepared to
bring your findings back to class.

85. Managers will probably report a heavy incidence of coaching because managers realize that they
should be coaching. Also, many managers perceive themselves to be doing a lot of coaching
because it is socially desirable.
PLAUSIBLE RESPONSES TO CASE QUESTIONS
Leadership Case Problem A: Rewards and Recognition at Tel-Service
This case illustrates a positive application of reinforcement in the form of a reward and recognition
program. The case also demonstrates that management should use a diagnostic approach before
starting a motivational program.
1. Identify the motivational techniques used by Samuels to enhance performance of the customer
service reps.
Above all, Samuels used positive reinforcement to reward good performance, including a Disney
World trip and public presentation of rewards. Considerable recognition was given. Rewards
given later were smaller and more personal such as watches and sporting equipment.
2. What can Samuels do to keep the customer service staff motivated in the future?
The reward and recognition program should continue, yet it will probably be necessary to
periodically change the rewards and the program to prevent staleness.
3. Use expectancy theory to analyze why the reward and recognition program is working.
To begin, it appears that the employees believe that the performance is within their capability,
satisfying the effort Æ performance requirement. Apparently the employees believe that
management will deliver the rewards, satisfying the performance Æ outcome requirement. Also,
the rewards including the Disney trip have high valence for the employees.
Leadership Case Problem B: The Reality Coach
This case history illustrates one of the ways in which an executive coach might help a leader by
providing hard-hitting feedback on the leader’s behaviors and attitudes.
1. What do you think of Lorie LeBrun’s coaching techniques?
Lorie LeBrun is a little bit like “Dr. Laura” in her confrontational style of feedback. So long as the
recipient of this feedback has the emotional stability to absorb such shocks, the feedback should
work well.
2. How literally should Steve Randall accept LeBrun’s advice?
LeBrun appears to be offering valid feedback about Randall being less self-centered as a leader,
and acting more as a servant leader. LeBrun is confrontational herself, and she wants Randall to
be confrontational in dealing with his boss. Before plunging ahead, Randall should think through
whether his boss would respond positively to a direct attack on his alleged backstabbing.

86. 3. What would you advise Randall about the Botox treatments?
Advice about cosmetic treatments must be thought through carefully. Does Randall want to look
younger for personal life as well? Or does he want to look younger just so he can create a
stronger leadership impression? It appears that looking younger is important to Randall, so he
might as well try Botox. The treatments are reversible providing the initial applications do not
result in permanent nerve damage.

87. CHAPTER 11
Creativity, Innovation, and Leadership
The purpose of this chapter is to assist readers in developing the creative problem-solving approach
required to be an effective leader.
CHAPTER OUTLINE AND LECTURE NOTES
Creative problem solving is an important requirement for effective leadership at every organizational
level. The role of a creative leader is to bring into existence ideas and things that did not exist
previously, or that existed in a different form. Innovation refers to creating new ideas and putting them
into action.
I.STEPS IN THE CREATIVE PROCESS
An important part of becoming more creative involves understanding the stages involved in
creativity, the production of novel and useful ideas. Step one is opportunity or problem
recognition, in which the person discovers that a new opportunity exists or a problem needs
resolution. Step two is immersion, in which the individual concentrates on the problem and
becomes immersed in it. Step three is incubation, in which the person keeps the assembled
information in the back of the mind for a while. Step four is insight, when the problem-
conquering solution flashes into the mind at an unexpected time. Step five is verification and
application, when the individual sets out to prove that the creative solution has merit.
II. CHARACTERISTICS OF CREATIVE LEADERS
Creative leaders, like creative workers of all types, are different in many ways from their less
creative counterparts. Creative leaders challenge the status quo and are flexible enough to
overcome the traditional way of looking at problems.
A. Knowledge. Creative problem solving requires a broad background of
information, including facts and observations. Being creative often involves combining two
or more things in a new and different way.
B. Intellectual Abilities. Creative problem solvers tend to be bright rather than
brilliant. They maintain a youthful curiosity throughout their lives, within and outside their
fields. Creative people are also open and responsive to the feelings and
emotions of others.
C. Personality. Creative people tend to have a positive self-image without being
blindly self-confident. They also have the ability to tolerate the isolation necessary for
developing ideas. Creative people are frequently nonconformists, not needing strong group
approval. Nonconformity can also mean being a maverick. Creative people are also

88. intellectual thrill seekers, they are persistent, and they enjoy dealing with ambiguity and
chaos. Creative people also tend to have an internal locus of control.
D. Passion for the Task and the Experience of Flow. A dominant characteristic of
creative people is a passion for their work, or high intrinsic motivation. Passion for the task
and high intrinsic motivation contribute to a total absorption in the work and intense
concentration, the experience of flow.
The formula B = f (P  E) is relevant here. Certain personal
characteristics may facilitate a leader’s being creative, but the right environment is
necessary to trigger creative behavior. Oldham and Cummings found that study participants
produced the most creative work when they had creativity-relevant characteristics such as
self-confidence and tolerance of ambiguity. It was also important, however, for employees
to work on complex, challenging jobs and to be supervised in a supportive, noncontrolling
fashion.
E. The Componential Theory of Individual Creativity. This theory integrates the
information already presented. Creativity takes place when three components join together:
expertise, creative-thinking skills, and task motivation. The combined forces of the three
factors lead to individual creativity as follows: expertise x creative-thinking skills x task
motivation = creativity.
III. OVERCOMING TRADITIONAL THINKING AS A CREATIVITY STRATEGY
Creative problem solving requires an ability to overcome traditional thinking. The creative
person often looks at problems in a new light and transcends conventional thinking about them.
The central task in becoming creative is to break down rigid thinking that blocks new ideas. The
process of overcoming traditional thinking has been characterized in several ways.
1. A creative person thinks outside the box.
2. People who are not creative suffer from “hardening of the categories.”
3. To be creative, one must develop new paradigms (models or frameworks).
4. Creativity requires overcoming traditional mental sets. A traditional mental
set is a conventional way of looking at things and placing them in familiar categories.
5. Creative people engage in lateral thinking in addition to vertical thinking.
Vertical thinking is an analytical, logical process that results in few answers. Lateral
thinking spreads out to find many different alternative solutions to a problem.

89. IV. ORGANIZATIONAL METHODS TO ENHANCE CREATIVITY
Here we describe several creativity-enhancing methods, including a review of brainstorming.
The leader plays a dual role in implementing creative problem-solving techniques: facilitating
group interaction and providing a fair share of creative output.
A. Systematically Collecting Fresh Ideas
The more ideas you try, the greater the probability of finding one that works. A
notable way of collecting fresh ideas is for employees to furnish them to a company
database, so when somebody needs a fresh idea it can be assessed through a company
search engine. Google uses an internal web site to collect and retrieve ideas. To facilitate
having fresh ideas, the leader/manager can establish idea quotas, such as asking staff
members to bring one new idea to each meeting. Thomas Edison set idea quotas for staff
members and himself.
B. Brainstorming
Brainstorming is the best-known method for creativity improvement (as well as
for creative problem solving). To encourage creativity during the idea-generating part of
brainstorming potential solutions are not criticized or evaluated in any way. Two recent
variations of brainstorming are the 6-3-5 method and brainstorming by email. Under the 6-3-
5 method, people exchange ideas written on index cards and build on the ideas of others. In
brainstorming by email, group members enter their suggestions into a computer
simultaneously, and the ideas are distributed to the monitors of other members. Group
members do not talk to each other, yet they are still able to build on each others’ ideas and
to combine ideas. Fewer interpersonal distractions occur in brainstorming by email.
C. Using the Pet-Peeve Technique
The pet-peeve technique is a group method of identifying all the possible
complaints others might have about one’s organizational unit, thus improving service.
Through brainstorming, group members develop a list of complaints from anyone who
interacts with their group. No holds are barred in throwing in imaginary and some humorous
complaints. The humorous complaints are especially important for creative problem solving.
After all the complaints have been aired, action plans are drawn to remedy the most serious
problems.
D. Using the Forced-Association Technique
A widely used way of releasing creativity is to make forced associations
between the properties of two objects to solve a problem. Working independently or within a
group, the individual randomly selects a word from a dictionary. The person next lists all the
properties and attributes of this word. Next, the attributes are force-fitted to a problem facing
the individual. A link is found between the properties of the random object and the
properties of the problem object.
E. Equipping a Kitchen for the Mind
A kitchen for the mind is a space designed to nurture creativity. The room
contains art supplies and perhaps toys, but what is more important is that it is a communal
meeting place where people get together to think creatively. According to Mike Vance,
when people’s resources are limited, they can still use their ingenuity to produce creative
ideas.

90. F. Engaging in Playful Physical Activities
Another creativity training technique is to engage participants in playful
physical activities that are intended to rejuvenate the spirit and encourage uninhibited
thinking. Riding a child’s tricycle is one such activity. The Project Platypus at Mattel
combines mental exercises with playful physical activities to enhance ideas for toys.
V. SELF-HELP TECHNIQUES TO ENHANCE CREATIVE PROBLEM SOLVING
All creative problem-solving techniques aim to increase mental flexibility. The seven strategies
and techniques reported here supplement the organizational programs described previously.
A. Practicing Creativity-Enhancing Exercises
An established way of sharpening creative thinking is to engage regularly in
activities that encourage flexible thinking. Among such activities are creative photography,
puzzles, joke writing, and learning a second language.
B. Staying Alert to Opportunities
The ability to spot opportunities that other people overlook characterizes
creative leaders. Opportunity seeking is associated with entrepreneurial leadership because
the entrepreneur might build an organization around an unmet consumer need.
C. Using Multiple Senses When Seeking Solutions
Using multiple senses while searching for alternative solutions to a problem
aids mental flexibility. People should think in terms of the five senses—sight, sound, taste,
touch, and smell—as well as any combination of the five.
D. Maintaining an Enthusiastic Attitude
Creative thinking calls for a positive attitude. Yet a leader must sometimes be
judicial (or judgmental) rather than imaginative. The leader is advised to attempt to think
positively even about judicial tasks.
E. Speaking to Lead Users
An advanced tactic to obtain an idea is to speak to a lead user, an
organization or individual that is well ahead of market trends. Another application of the
lead-user technique is to look for someone who does what you do (or intends to do what
you do) for a larger stake. For example, airplane manufacturers have a big stake in tires
that do not explode under pressure.
F. Maintaining and Using an Idea Notebook or Computer File
Creative ideas can lead to breakthroughs for your group and your career, so
they deserve the dignity of a separate notebook or computer file.
G. Playing the Roles of Explorer, Artist, Judge, and Lawyer
Be an explorer by getting ideas from people in different fields. Be an artist by
stretching your imagination, which includes asking what-if questions. Be a judge by critically

91. evaluating ideas. Play the role of a lawyer by negotiating and finding ways to implement
your ideas within your field or place of work.
VI. ESTABLISHING A CLIMATE FOR CREATIVE THINKING
In addition to being a creative individual, a leader must establish a climate conducive to
creative problem solving. A foundation step for fostering organizational creativity is to establish
a vision and mission that include creativity. The most influential step a leader can take to bring
about creative problem solving is to develop a permissive atmosphere that encourages people
to think freely.
A. Leadership Practices for Enhancing Creativity
Amabile’s long-term research supports the thinking of many others about
leadership and management practices that foster a work environment for creativity.
1. Intellectual challenge. Stretch people intellectually without
overwhelming them. When survival is at stake, time pressures can stimulate creative
thinking. High time-pressure days with a clear, urgent focus usually dampen creativity.
2. Freedom to choose the method. Workers tend to be more creative
when they are granted the freedom to choose which method is best for attaining a work
goal.
3. Ample supply of the right resources. Time and money are the most
important resources for enhancing creativity.
4. Effective design of work groups. Work groups are most likely to be
creative when they are mutually supportive and when they have a diversity of
backgrounds and perspectives.
5. Supervisory encouragement. Developing a permissive atmosphere
that encourages people to think freely is the most important step for bringing about
creative problem solving.
6. Organizational support. The entire organization as well as the
immediate manager should support creativity, including a reward system with
recognition and financial incentives.
Other ways to create an environment for creativity include loose-tight
leadership (being permissive yet taking action on good ideas), and allowing workers to
pursue absurd ideas without penalty for wasting resources. Favorable leader-member
exchanges (as in LMX theory) are associated with high supervisory ratings of creativity.
B. Methods of Managing Creative Workers
Choosing effective methods for managing creative workers is also important.
Suggestions are as follows:
1. Give creative people tools and resources that allow their work to
stand out.
2. Give creative people flexibility and a minimum amount of structure.
3. Employ creative people to manage and evaluate creative workers.

92. VII. ADDITIONAL LEADERSHIP PRACTICES THAT ENHANCE INNOVATION
All leadership and management practices that enhance creative problem solving enhance
innovation. Consider also the following:
1. Continually pursue innovation.
2. Take risks and encourage risk taking.
3. Acquire innovative companies.
4. Avoid innovation for its own sake.
VIII. GUIDELINES FOR ACTION AND SKILL DEVELOPMENT
To encourage creative problem solving, the leaders should avoid creativity dampeners.
Expressing attitudes that preserve the status quo by using such clichés as “Don’t rock the boat,”
“Don’t make waves,” and “If it ain’t broke, don’t fix it,” are creativity dampeners. Responding to
most suggestions for change with a pained look and saying, “But that will cost money” and
being free and open with criticism but stingy with praise will also discourage creativity.
COMMENTS ON EXPERIENTIAL EXERCISES
Leadership Self-Assessment Quiz 11-1: The Creative Personality Test
Based on experience with thousands of students, we believe that this quiz contributes to assessing a
person’s current level of mental flexibility and creative attitudes. We doubt that a person with good self-
objectivity who scored high on this test would fail to have strong creative tendencies.
Leadership Skill-Building Exercise 11-1: Brainstorming and www.GetRich.com
Group leaders who report their team’s brainstorming solutions are often disappointed to find that other
class teams arrived at many similar solutions. It is worth explaining that such normative information is
helpful in evaluating whether a solution is novel. Groups might be asked to comment on the
brainstorming process. For example, some students observe a lull in idea production after an initial
outpouring. A few minutes later another surge of ideas typically surfaces. The results with
www.GetRich.com have been fabulous, with students often arriving at ideas that have—unknown to
them—already been commercially successful.
Leadership Skill-Building Exercise 11-2: The Pet-Peeve Technique
The pet-peeve technique is both an exercise in creative problem solving and an opportunity to use a
technique of quality management. Students may require some prodding to come forth with humorous
or exaggerated criticisms of their organizational unit.
Leadership Skill-Building Exercise 11-3: Word Hints to Creativity
Although the original word-hints test is thirty-nine years old, we have updated it with a few more
modern terms. Raudsepp is an established creativity expert, which lends face validity to this test. We
think the practice in making remote associations is a valuable feature of this device, which can also be
used for self-assessment.

93. Leadership Diagnostic Activity 11-1: Assessing the Climate for Innovation
Students with significant work experience will find this questionnaire the most meaningful. However,
relating the questionnaire to school experience can also be enlightening.
COMMENTS ON DISCUSSION QUESTIONS AND ACTIVITIES
1. Give an example of creativity in business that does not relate to the development or marketing of
a product or service.
Most students will have to stretch to find a suitable answer to this question, because products
receive the most publicity. Other areas for creative thinking include manufacturing processes,
cost savings, and organization structure. The classic example described in the text about Henry
Ford and the assembly line qualifies as creativity aimed at other than product development or
marketing. Another creative idea in the auto industry was to demand that suppliers do more of
the assembling of components, leading to cost savings for the auto manufacturers.
2. At its height of prosperity many business strategy experts praised Enron Corporation as a model
of an innovative organization. What cautions about innovation does the preceding statement
suggest?
A major lesson from the Enron debacle is that innovative business practices that generate
revenue must also be considered within the context of traditional business judgment and ethics.
Some of the ways in which Enron made money used creative (and wacky) schemes, such as
having a subsidiary without any physical or financial assets. Several of the Enron innovations
also threw aside generally accepted accounting principles.
3. How might you use information about the five stages of creative thought to become a more
creative problem solver?
A person is more likely to improve his or her creativity if he or she remembers to go through all
the conscious stages of creative thought. A person may not be able to control insight, which is
almost unconscious, but he or she can deliberately engage in the other stages. For example, it is
possible to immerse oneself in a topic and go through verification and application.
4. Find an example in print or on the Internet of creative problem solving by a leader. Be prepared
to share your findings with classmates.
If a person operationally defines creativity as finding an imaginative solution to a problem, many
examples can be found of organizational leaders using creative problem solving. Regular
business activities such as improving quality or customer service often reflect creative problem
solving.
5. In many companies, it is expected for managerial and professional workers to wear formal
business attire to work (such as suits and high heels). What effect do you think this dress code
has on creativity?
The opinion is frequently expressed among creativity specialists that most people are more
creative when they wear comfortable, informal clothing. If this were true, we can expect creativity
to diminish among managers and professionals during working hours. Perhaps these same
people will now do most of their creative thinking on work-at-home days, and after working hours.

94. It is also possible that many people can learn to be creative while wearing formal business attire.
Maybe they can remove their shoes for a little comfort.
6. In what way does your present program of study contribute to your ability to solve problems
creatively?
Almost any program of study facilitates the student’s amassing a base of useful facts that might
later serve as the database for creative thought. In addition, some programs of study offer ample
opportunity for creative thought, such as studying the problem-solving process. Still other
programs give students a chance to solve unstructured field problems, such as analyzing live
business opportunities.
7. The opinion has often been expressed that too much emphasis on teamwork inhibits creativity.
What do you think of this argument?
The argument that too much teamwork inhibits creativity is sometimes true. Attempting to satisfy
the demands of teammates can often mean not pushing forward with an idea of one’s own. A
good team member will often build on the ideas of others rather than push for acceptance of his
or her own idea. Another relevant point is that the Japanese emphasis on teamwork and group
harmony often results in workers who are better at imitation than at innovation. There are many
counterarguments to these two points.
8. What is the underlying process by which creativity-building exercises, such as the forced-
association technique, are supposed to increase creativity?
Forced-association techniques and the like help a person develop mental flexibility by forcing the
person to think in new and different ways. The argument is that as you engage in these mental
workouts, you will develop your ability to think more flexibly.
9. How might a manager physically lay out an office to improve the chances that creative problem
solving will take place?
The manager might hedge here by creating the two types of physical structures associated with
improved creative thinking, as does Microsoft Corp. Open work areas would be important
because increased possibilities for physical interaction would lead to more exchange of ideas.
However, creative workers still need private space so that they may develop some ideas in
solitude.
10. Speak to the most creative person you know in any field, and find out if he or she uses any
specific creativity-enhancing technique. Be prepared to bring your findings back to class.
Brainstorming is used so frequently that most of the people polled for answers to these questions
are likely to say they use brainstorming. Mention of techniques other than brainstorming would be
particularly valuable.

95. PLAUSIBLE RESPONSES TO CASE QUESTIONS
Leadership Case Problem A: Will Innovation Survive at 3M?
The 3M case gets at perhaps the most crucial issue in the leadership of innovation: Can a disciplined
and well-managed business firm still be creative and innovative?
1. To what extent might McNerney’s leadership and management approach damage the culture of
innovation that has been characteristic of 3M?
If creative workers perceive McNerney as being too heavy-handed and controlling he will most
likely damage the culture of innovation at 3M. A mitigating factor, however, is that McNerney
expresses respect for the talent of 3M workers.
2. How well does McNerney appear to be managing the delicate balance between the company’s
center and its periphery—between efficiency and innovation?
On the surface McNerney is managing the delicate balance well. If he begins to be perceived as
a penny pincher, and creative people have to struggle to make small purchases, innovation will
suffer.
3. The observation was made in the case that “GE gave its managers a toolbox; 3M functioned
more like a sandbox.” How does this statement relate to creativity and innovation?
A toolbox most likely refers to a set of explicit methods that managers could use to achieve
productivity and efficiency. The sandbox refers to an arena in which managers would be given
the freedom to play around with ideas and products, in an uninhibited and unrestrained manner.
A sandbox is thought to enhance innovation.
Leadership Case Problem B: The Food Company Skunk Works
“Skunk Works” gets at a central issue in the leadership of innovation: Does innovation prosper under
time deadlines combined with a harsh evaluation of creative output?
1. How effective is Appelby’s leadership approach for enhancing innovation at Melrose Foods?
Appelby can be applauded for establishing the skunk works, but he is damaging his initiative by
being impatient for results and rushing to judgment so quickly about the first output from the
skunk works.
2. What suggestions can you offer Appelby for getting a better return on investment from the
company skunk works?
Appelby could be more permissive and accepting. He should be more patient for results, and not
be so critical about the progress of the skunk works staff members. He needs to give his
investment a chance.
3. What do you think of Seda’s request to review the mission of the skunk works with the executive
office?
Seda’s desire to review the mission of the skunk works with the executive office is meritorious. A
big issue is timelines for producing results. Another key issue is how much authority the skunk
works will have for launching new product ideas.

96. 4. What is your hunch about the potential success of Sudden Seafood and Razzle Razzberry?
The seafood idea sounds fishy and would probably bomb as a product. Yet the sarcastic
comment about converting Sudden Seafood to cat food does suggest a small market. Products
like Razzle Razzberry are emerging despite the movement away from cola drinks and toward
healthier drinks. A good example is the moderate success of Jolt, a high-caffeine cola drink that
has led to a few spin-off beverages.

97. CHAPTER 12
Communication and Conflict Resolution Skills
The purpose of this chapter is to provide readers with the knowledge to develop many of the
communication skills necessary for effective leadership. A secondary purpose is to explain the basics
of how leaders resolve conflict. Although all aspects of communication contribute to managerial and
leadership effectiveness, we focus on the communication topics that are most relevant for leaders.
CHAPTER OUTLINE AND LECTURE NOTES
In this chapter we expand on the importance of communication in leadership. We also include the
contribution of nonverbal, written, and supportive communication. In addition, we provide suggestions
for dealing with an important communication challenge—resolving conflict and bargaining.
I.EVIDENCE ABOUT COMMUNICATION AND LEADERSHIP
Research evidence supports the conventional wisdom that effective leaders are also effective
communicators. An interview study of 200 successful organizational leaders indicated that they
expanded their thinking regularly by actively soliciting new ideas and feedback from others.
They also sought new information continuously, and they had good persuasive skills. Another
example of relevant research is a study showing that effective leaders synchronize verbal and
nonverbal behavior.
Despite the importance of effective communication, a recent American Management
Association study suggests that companies are not communicating their mission, vision, and
values well. Less than one-third of respondents sought feedback on whether their messages
were received as intended.
Information technology can facilitate communication. For example, managers can be
part of a virtual office in which employees work together as if they were in a single office
despite being physically separated. A high-tech leader is never away from the office—even if he
or she would like to be!
II. INSPIRATIONAL AND POWERFUL COMMUNICATION
Both formal and informal leaders must be persuasive and dynamic communicators. Two key
domains are speaking and writing, and nonverbal communication.

98. A. Speaking and Writing
The majority of effective leaders have an extra snap or panache to their
communication style. The same energy and excitement are reflected in both speaking and
writing.
1. Be Credible. If the speaker is perceived as highly credible, the attempt
at persuasive communication is more likely to be successful.
2. Use the Persuade Package of Influence Tactics. The persuade
package is a small, standard set of influence tactics that leads the target to behave in a
particular way. Using a persuade package gives the influence agent a preference order
for influence tactics. In one study, for all three situations, the same persuade package
was preferred: ingratiation Æ rationality Æ assertiveness Æ exchange.
3. Gear Your Message to the Listener. A message must be adapted to
the interests and motivations of the listener. People with high intelligence tend to be
more influenced by messages based on strong, logical arguments.
4. Sell Group Members on the Benefits of Your Suggestions. Leaders
are constrained by the willingness of group members to take actions on their
suggestions and initiatives. As a consequence, the leader must explain to group
members how much they can benefit from what he or she proposes. Selling group
members is quite often done more effectively when the persuader takes the time to
build consensus. Instead of inspiring the group in a flash, the leader wins it over
gradually.
5. Use Heavy-Impact and Emotion-Provoking Words. Certain words
used in the proper context give power and force to your speech. Using powerful, upbeat
language can enhance a person’s leadership image. Closely related to using heavy-
impact language is the use of emotion-provoking words. Examples of emotion-
provoking and powerful words include “outclassing the competition,” “bonding with
customers,” and “rebounding from a downturn.”
6. Use Anecdotes to Communicate Meaning. A carefully chosen
anecdote is useful in persuading group members about the importance of
organizational values. So long as the anecdote is not repeated too frequently, it can
communicate an important message.
7. Back Up Conclusions with Data. Persuasiveness increases when
spoken and written presentations are supported with solid data. Being too dependent
on data, however, could suggest that you have little faith in your intuition.
8. Minimize Language Errors, Junk Words, and Vocalized Pauses.
Minimizing common language errors increases persuasiveness because you appear
more articulate and informed. An example: “Just between you and I” is wrong. “Just
between you and me” is correct.
9. Write Crisp, Clear Memos and Reports, Including a Front-Loaded
Message. According to Mercer, high achievers write more effective reports than do their
less highly achieving counterparts. For example, the high achievers used more active
than passive verbs and used more subhead and subtitles. A persuasive speaker or
writer places key ideas at the beginning of a conversation, memo, paragraph, or
sentence. Using the active voice facilitates front-loading messages.

99. 10. Use a Power-Oriented Linguistic Style. A major part of being persuasive
involves choosing the right linguistic style, a person’s characteristic speaking pattern.
Several components of a linguistic style give power and authority to the message
sender in many situations. Several examples follow: (a) downplay uncertainty, (b) use
the pronoun I frequently, (c) apologize infrequently, (d) know exactly what you want,
and (e) frame your comments in a way that increases your listener’s receptivity.
B. The Six Basic Principles of Persuasion
An advanced method of being persuasive is to capitalize on scientific
evidence about how to persuade people. The six principles listed here have accompanying
tactics that can be used to supplement the other approaches to persuasion described in this
chapter.
1. Liking. People like those who like them.
2. Reciprocity. People repay in kind (the leader should be a model of
desired behavior).
3. Social proof. People follow the lead of similar others.
4. Consistency. People align with their clear commitments.
5. Authority. People defer to experts.
6. Scarcity. People want more of what they can have less of.
These principles should be applied in combination to multiply their impact.
C. Nonverbal Communication
Effective leaders are masterful nonverbal and verbal communicators.
Nonverbal communication is important because leadership involves emotion, which cannot
be communicated convincingly enough through words alone. Mentioned here are nonverbal
signals that are likely to connote power, being in control, and forcefulness:
1. Using erect posture when walking, standing, or sitting.
2. Exhibiting dominant behavior, such as standing up straight during
confrontation.
3. Smiling frequently, in a relaxed, natural-appearing manner.
4. Gesturing in a relaxed, nonmechanical way.
Clothing, dress, and appearance represent another mode of nonverbal
communication. Even on dress-down days, the majority of effective leaders will choose
clothing that gives them an edge over others. Appearance includes more than the choice of
clothing. For example, freshly shined shoes and good-looking teeth contribute to a
leadership image. What constitutes a powerful and self-confident image is influenced not
only by the organizational culture but by the culture in general.
A subtle mode of nonverbal communication is the use of time.
Guarding time as a precious resource will help you project an image of self-confidence and
leadership.
Recent attention has been paid to nonverbal communication to
enhance airport security, although this is not a new idea. Students will be eager to
contribute ideas of what they perceive to be “suspicious nonverbal behavior” with respect to
airport passengers.

100. III. SUPPORTIVE COMMUNICATION
A leader who uses supportive communication nurtures group members and brings out their
best. Instead of dazzling them with a power presence, the leader is low-key and interested in
the other person’s agenda. Supportive communication is a communication style that delivers
the message accurately and supports or enhances the relationship between the two parties.
Eight points cover the essentials of supportive communication.
1. Problem oriented, not person oriented.
2. Descriptive, not evaluative.
3. Based on congruence, not incongruence. (Congruence is the matching of
verbal and nonverbal communication to what the sender is thinking and feeling.)
4. Validates rather than invalidates people.
5. Specific, not global.
6. Conjunctive, not disjunctive. (Conjunctive communication is linked logically
to previous messages, thus enhancing communication. Disjunctive communication is not
linked to preceding messages, resulting in impaired communication.)
7. Owned, not disowned. (Effective communicators take responsibility for what
they say.)
8. Requires listening as well as sending messages.
IV. OVERCOMING CROSS-CULTURAL COMMUNICATION BARRIERS
In today’s workplace, leaders communicate with people from other countries and with a more
diverse group of people from their own country. Cross-cultural communication can be improved
by understanding attributions and following guidelines.
A. Attributions and Cross-Cultural Communication
A major underlying factor in overcoming cross-cultural communication barriers
is to understand attributions, the judgments we make about the behavior and attitudes of
others. Three key factors affect attributions: perceptions, stereotyping, and ethnocentrism.
Ethnocentrism is the assumption that the ways of one’s culture are the best ways of doing
things.
B. Guidelines for Overcoming and Preventing Communication Barriers
Implementing the type of guidelines presented here will assist leaders in
overcoming and preventing many communication barriers.
1. Be sensitive to the fact that cross-cultural communication barriers
exist. (Awareness will lead to asking for feedback.)
2. Challenge your cultural assumptions. (Assumptions work like
stereotypes.)

101. 3. Show respect for all workers.
4. Use straightforward language, and speak slowly and clearly.
5. When the situation is appropriate, speak in the language of the people
from another culture.
6. Observe cross-cultural differences in etiquette. (For example, in many
countries business people want to dine before conducting business.)
7. Do not be diverted by style, accent, grammar, or personal
appearance.
8. Avoid racial or ethnic identification except when it is essential to
communication. Using a person’s race or ethnicity as an adjective or other descriptor
often suggests a negative stereotype.
9. Be sensitive to differences in nonverbal communication. (For
example, make sure you understand the acceptability of physical touching.)
10. Be attentive to individual differences in appearance. (Don’t confuse the
identity of people from the same racial or ethnic group.)
V. THE LEADER’S ROLE IN RESOLVING CONFLICT AND NEGOTIATING
Leaders and managers spend about 20 percent of their time resolving conflicts and
negotiating. Conflict resolution is ordinarily studied in relation to management. We therefore
focus on a basic framework for understanding conflict-resolution styles and a few suggestions
for negotiating.
A. Conflict Management Styles
The five basic styles of managing conflict are based on a combination of
satisfying one’s own concerns (assertiveness) and satisfying the concerns of others
(cooperativeness). See Figure 12–1.
1. Competitive. The competitive style is a desire to win one’s own
concerns at the expense of the other party (win-lose).
2. Accommodative. The accommodative style favors appeasement, or
satisfying the other’s concerns without taking care of one’s own.
3. Sharing. Sharers prefer moderate but incomplete satisfaction for both
parties, which results in a compromise such as splitting the difference.
4. Collaborative. The collaborative style reflects a desire to satisfy fully
the desires of both parties. It is based on an underlying philosophy of win-win, the
belief that after conflict has been resolved, both sides should gain something of value.
When collaborative approaches to resolving conflict are used, the relationships among
the parties are improved. The collaborative style of conflict management has many
variations, one of which is to agree with the person criticizing you.
5. Avoidant. The avoider is a combination of uncooperative and
unassertive. He or she is indifferent to the concerns of either party.

102. People engaged in conflict resolution typically combine several of the five
resolution styles to accomplish their purpose. For example, a generally effective approach
to resolving conflict is to use competition with regard to a cost that is important for oneself
but unimportant to the opponent. At the same time, the person uses accommodation for a
cost that is unimportant to oneself but important to the opponent. Table 12 – 4 presents
tentative guidelines for matching conflict-handling modes with contingency factors.
B. Negotiating and Bargaining
Conflicts can be considered situations calling for negotiating and bargaining or
conferring with another person to resolve a problem. In distributive bargaining, the two opposite
sides operate under zero-sum conditions. The purpose of bargaining is to distribute the resources.
Integrative bargaining reflects the collaborative mode of managing conflict because it assumes that
win-win solutions can be found.
1. Begin with a Plausible Demand or Offer. A plausible demand is better than a
grossly inflated one because it shows that you are bargaining in good faith. Also, if a third party has
to resolve the conflict, a plausible demand will receive more sympathy than an implausible one.
2. Focus on Interests, Not Position. Rather than clinging to specific negotiation
points, keep your overall interests in mind and try to satisfy them. The true object of negotiation is to
satisfy the underlying interests of both sides.
3. Search for the Value in Differences Between the Two Sides. Despite common
wisdom, many sources of value in negotiation arise from differences among the parties. The
differences may suggest useful ideas for breaking a deadlock and reaching a constructive
agreement.
4. Be Sensitive to International Differences in Negotiating Style. Americans often
have a no-nonsense approach to negotiation, such as frankness and impatience. This may be
interpreted as rudeness by people from non-American cultures, and it can lead to failed
negotiations. An experiment suggested that U.S. and Japanese negotiators relied on different
negotiation tactics when negotiating intraculturally. One of the complex findings was that Japanese
negotiators exchanged information indirectly and used influence tactics when negotiating
intraculturally. With Americans, the Japanese were more likely to adapt their negotiation behaviors
to the American approach.
Roger Fisher’s overview of bargaining is noteworthy. “Be firm and friendly. Hard on
problems, soft on the people. Find out what the other side views as important and negotiate on that.
Let the other side make the deal better from its point of view, at the same time that you gain what
you are looking for.”
VI. GUIDELINES FOR ACTION AND SKILL DEVELOPMENT
Lumsden and Lumsden recommend a specific communications improvement program that
supplements the suggestions already made in this chapter:
1. Seek congruity with your messages.
2. Ask for feedback from family, friends, coworkers, and managers.
3. Observe others’ responses. (Are your messages being received?)
4. Observe a videotape of yourself.
5. Decide what to change.

103. COMMENTS ON EXPERIENTIAL EXERCISES
Leadership Self-Assessment Quiz 12-1: A Self-Portrait of My Communication
Effectiveness
A potential contribution of this self-portrait is that it points to behaviors likely to be characteristic of
effective communicators.
Leadership Skill-Building Exercise 12-1: Feedback on Verbal and Nonverbal
Behavior
Constructive feedback about the impact of one’s verbal and nonverbal behavior is valuable. We
suspect that some students will regard this exercise as the most valuable in the course. Watching
videotapes of oneself makes some contribution, but the feedback is distorted by the person’s own
perception.
Leadership Skill-Building Exercise 12-2: Supportive Communication
Students typically enjoy participating in group role plays of this nature. The challenge, as usual, is for
students to apply new knowledge rather than to conduct a group discussion following only the dictates
of common sense. The role play demonstrates that being a supportive communicator requires skill.
Leadership Self-Assessment Quiz 12-2: Cross-Cultural Skills and Attitudes
This quiz has a bilingual bias, with four of the statements referring to competence in another language.
Although this quiz is presented in the context of cross-cultural communications, it is also a good fit for
Chapter 14 about cross-cultural leadership.
Leadership Skill-Building Exercise 12-3: Integrative Bargaining
This role-play about integrative bargaining illustrates how conducting a given task requires several
leadership and managerial skills. To carry out integrative bargaining effectively, the group must also
engage in group problem solving and brainstorming.
COMMENTS ON DISCUSSION QUESTIONS AND ACTIVITIES
1. Now that you have studied this chapter, what are you going to do differently to improve your
communication effectiveness as a leader?
We like this question because it serves as one more reminder for the student that skill
development is required to become an effective leader. Many students will mention at least one
aspect of developing a more power-oriented linguistic style.
2. Find an example of a powerful written or spoken message by a leader. Bring the information back
to class to share with others.

104. One hint here is to search the Internet under specific company names. The company reports
often contain messages from members of top management. The Wall Street Journal and Fortune
are two good sources for statements by company leaders.
3. What would be an effective communication frame for telling group members that they will be
expected to work about seventy hours per week for the next five weeks?
The frame should respond to their needs, yet get the message across. A possible frame here is,
“You are all going to be inconvenienced for the next five weeks, but it will be for a very worthy
cause.”
4. Identify a leader who you think has a power-oriented linguistic style. How did you arrive at your
conclusion?
An effective way of completing this assignment is to watch CNBC or similar television shows that
feature interviews with executives. The leader making many positive statements and being quite
confident about the future of the company would suggest a power-oriented linguistic style. Being
confident about the future would include overcoming present problems.
5. Why is persuasion considered one of the leader’s essential tools?
Persuasion is one of a leader’s essential tools because exerting influence is the central part of a
leader’s role. Persuasion is a major influence tactic.
6. Given that people really do defer to experts, how might the leader establish his or her expertise?
An important tactic for establishing expertise is to help the group solve a difficult problem. A less
powerful approach is to mention job experiences, degrees, and awards that relate to the group
task. An example, “When I worked four years as an investment analyst. . . .”
7. Give three examples of positive ethnic stereotypes.
In a trial of this question, one student responded, “I have been taught all my life that stereotypes
are bad, so I can’t answer this question.” Here are three ethnic stereotypes related to work: (1)
Chinese workers are meticulous, (2) Italian designers are the world’s best, and (3) Jews (and
Asians) are achievement-oriented.
8. What concrete steps can a leader take to demonstrate that he or she respects a group member
from another culture?
Respect is generally best communicated in subtle and indirect ways. Listening carefully to the
person speak about his or her native culture is a good starting point. Asking cross-cultural
questions shows respect. An example would be: “How much value do people in your culture
attach to having material possessions?” Expressing enthusiasm for cultural traditions in the other
country is also effective. An example would be: “I can understand now why reaching the World
Cup finals was such a source of national pride and celebration.”
9. In recent years, shareholders have verbally attacked CEOs for receiving so much compensation
from the company. How should these CEOs approach resolving this type of conflict?
The CEOs might begin by acknowledging that their compensation does appear excessive,
thereby using a collaborative approach to conflict resolution. The leader might then present facts
such as wages being based on supply and demand. Next, the leader could explain that highly
paid CEOs often create shareholder value, and facilitate conditions that enable employees to

105. receive higher compensation. The win-win spin is to show that when the CEO is well
compensated, other stakeholders benefit also.
10. Give two examples in which it would probably be effective for a leader to use the accommodative
style of conflict handling.
One situation favoring accommodation might be when a store manager wants to retain an
important customer, and therefore submits to an unfair demand (such as accepting a return of
damaged merchandise) to retain the customer’s long-term loyalty. Another situation would be
submitting to unreasonable demands by an employee at the tail end of a key project. The project
leader is concerned about upsetting the team member’s concentration. (After the project is
completed, the leader can be much less accommodating. Be conciliatory for now, and get
revenge later!)
PLAUSIBLE RESPONSES TO CASE QUESTIONS
Leadership Case Problem A: Infighting and Intrigue at Yahoo!
The Yahoo! case illustrates that conflict and politics can be part of a highly visible and successful
business firm. However, all the conflict appeared to have some functional consequences because
Yahoo! began a recovery soon after the date of this case.
1. Why was Koogle’s consensus style of leadership criticized so strongly?
Koogle’s consensus leadership style was criticized so strongly because the style was perceived
as creating inaction when the firm needed decisive action to work its way out of the doldrums.
Another problem was that in an attempt to be agreeable, Koogle was allowing too many
managers to have their way, getting Yahoo! into questionable deals.
2. What might the Yahoo! group have done differently to resolve their conflicts about purchasing a
media company?
The Yahoo! executive team intensely discussed the pros and cons of buying a media company
among themselves, before deciding to stay the course. A supplementary approach to deciding
the issue by themselves would have been to ask a consulting firm to do a feasibility study of
acquiring a media company. Appealing to expertise is essentially an influence tactic that can also
be used to resolve conflict.
3. What suggestions can you offer Yahoo! to increase its revenues (and thereby end a lot of
squabbling about fixing the business)?
A logical approach for Yahoo! is to stick to its knitting and keep looking for ways to increase its
subscription and advertising revenues. An example of subscription income is Yahoo! Personals,
an online introduction service. Yahoo! did apply this approach, and was showing profits again by
the third quarter of 2002.
Leadership Case Problem B: Can He Be the Real Bill Gates?
Among the themes this anecdote illustrates is the extreme action executives will take as part of their
conflict with another executive or company.

106. 1. What messages is Oracle sending about itself by hiring the impersonator to encourage
conference attendees to attend Larry Ellison’s talk?
Oracle is communicating the message that the company is willing to engage in unprofessional
behavior to deal with its conflicts. Another message is the company, or more precisely its
leaders, have a good sense of humor.
2. How would you rate the persuasive effectiveness of this method of encouraging people to listen
to Ellison’s talk?
The joke aspect of using a Bill Gates impersonator most probably detracts from the seriousness
of the message.
3. In what way does the incident about the Bill Gates impersonator illustrate conflict between Oracle
and Microsoft?
Larry Ellison, chief executive at Oracle, and Bill Gates are notorious enemies. The act of
pretending that a rival has capitulated to your side—even if an obvious joke—reflects this intense
competition that has turned into conflict.
4. What would you advise Bill Gates to do, if anything, about the Oracle stunt of hiring the
impersonator?
If Bill Gates says nothing, he will be denying Ellison the recognition he wants for having pulled
this stunt. If Gates wants to enter into conflict, he might have an attorney contact Ellison and
explain that he is making unauthorized use of a precious resource—a Microsoft symbol.
However, why should Gates spend company money on behalf of Ellison?

107. CHAPTER 13
Strategic Leadership and
Knowledge Management
The purpose of this chapter is to examine the leader’s role in developing strategy, an organization’s
plan for achieving its mission and goals in the environment. We also focus on the leader’s contribution
to a current thrust in strategy, knowledge management, and developing a learning organization.
CHAPTER OUTLINE AND LECTURE NOTES
Strategic leadership deals primarily with leadership in the executive suite, yet leaders at all levels are
expected to think strategically. For example, they should see the “big picture,” understand the long-
range implications of their actions, and recognize how their daily activities support the firm’s strategy.
I. THE NATURE OF STRATEGIC LEADERSHIP
Strategic leadership is considered by some to be synonymous with transformational
leadership. For the present purposes, strategic leadership is the process of providing the
direction and inspiration necessary to create, provide direction to, or sustain an organization.
Strategic leadership is also the type of leadership necessary to carry out effectively strategic
management, the process of ensuring a competitive fit between the organization and its
environment. Key components of strategic leadership are described next.
A. High-Level Cognitive Activity of the Leader
Thinking strategically requires high-level cognitive skill, such as the ability to
think conceptually, absorb and make sense of a multitude of trends, and condense this
information into a straightforward plan of action. In one analysis of the cognitive
requirements of leadership, the work of management is divided into a system of seven
levels within organizations. At each level there are qualitatively different task demands and
skill requirements. The greater the time span incorporated into a manager’s job, the greater
the intellectual demands. An organization will be successful when the cognitive abilities of
its leaders are good for the nature of the work. Creative problem-solving skills are also
important.

108. B. Gathering Multiple Inputs to Formulate Strategy
Many strategic leaders arrive at their ideas for the organization’s future by
consulting with a wide range of parties with an interest, similar to the process of conducting
research to create a vision. Gary Hamel has said, “We have to involve hundreds, if not
thousands, of new voices in the strategy process if we want to increase the odds of seeing
the future.”
C. Anticipating and Creating a Future
A major component of leadership is direction setting, which involves
anticipating and sometimes creating the future for the enterprise or organizational unit. To
set a direction is also to tell the organization what it should be doing. To set a productive
direction for the future, the leader must accurately forecast or anticipate the future. A truly
visionary leader anticipates a future that many people do not think will come to pass.
To create the future, senior management must develop a process for
pulling together the collective wisdom of the organization. People from all levels can help
define the future. Creating the future has also been conceptualized as reinventing an
industry.
D. Revolutionary Thinking
Hamel characterizes strategy as revolutionary. Incrementalism is not
sufficient. To be an industry leader, a company’s leaders must think in revolutionary terms.
Any strategy that does not challenge the status quo should not even be considered a
strategy. For strategic leadership to be revolutionary, it would have to redefine products and
services, market space, and even the entire industry. Porter insists that a key component of
strategy is choosing to be different. Nevertheless, the strategy of imitation has served many
firms well.
E. Creating a Vision
Visions are an integral part of strategic leadership, and a vision is really a
multifaceted concept. Laurie Larwood factor-analyzed twenty-six descriptors of corporate
visions into seven identifiable factors: (1) vision formulation, (2) implementation, (3)
innovative realism, (4) general, (5) detailed, (6) risk taking, and (7) profit-oriented. The
visions based on these factors extended over an average of sixty-four months. The factor
results were thought to provide good support for what is known about visions. Executives
with visions and operational realism or style were found to be the most successful in
creating change. The components of a vision just described are important, but the final
vision statement is relatively short. A carefully considered and articulated vision helps us
know who we are and who we are not.
At times a simple statement of intention can be an inspirational vision.
Fiorina at Hewlett-Packard developed the World e-inclusion program to sell products to the
poor of the Third World.
II. CONDUCTING A SWOT ANALYSIS
Strategic planning encompasses those activities that lead to the statement of goals and
objectives and the choice of strategy. Strategic planning often takes the form of a SWOT
analysis, a method of considering strengths, weaknesses, opportunities, and threats in a given
situation. A SWOT analysis examines the interaction between the organization, or
organizational unit, and the environment.

109. A. Strengths
What are your advantages and what do you do well?
B. Weaknesses
Consider the risks of pursuing a particular course of action.
C. Opportunities
Think of the opportunities that welcome you if you choose a promising
strategic alternative.
D. Threats
There’s a downside to every alternative, so think ahead to allow for
contingency planning.
III. A SAMPLING OF BUSINESS STRATEGIES FORMULATED BY LEADERS
In addition to the process of making strategic decisions, the content of these decisions is
important. Thirteen current strategies are described next.
1. Differentiation. A differentiation strategy attempts to offer a product or service
that is perceived by the customer as different from available alternatives.
2. Cost leadership. A cost leadership strategy is to produce a product or service
at a low price to lower price and gain market share.
3. Focus. Using a focus strategy, the organization concentrates on a specific
regional market or buyer group.
4. High quality. Leaders continue to emphasize quality even if there is less
explicit emphasis today on total quality management, a management system for
improving performance throughout the firm by maximizing customer satisfaction and making
continuous improvements based on extensive employee involvement.
5. Imitation. The imitation strategy consists of two key components: strategic
followership and learning by watching. Benchmarking is a form of learning by watching.
6. Strategic alliances. An increasingly popular business strategy is to form
alliances, or share resources, with other companies to exploit a market opportunity.
7. Growth through acquisition. A standard strategy for growth is for one
company to purchase others. However, acquisitions are often made to acquire an important
technology.
8. High speed and first-mover. High-speed managers focus on speed in all of
their business activities, including production development, sales response, and customer
service. Getting to market first is also referred to as the first-mover strategy.
9. Global diversification. A widely practiced business strategy is to diversify
globally in an effort to expand business, especially with products.

110. 10. Sticking to core competencies. Many firms of all sizes believe that they will
prosper if they confine their efforts to the activities they perform best—their core
competencies.
11. Brand leadership. Succeeding through developing the reputation of your
brand can be considered a business strategy. Many Internet-based companies perceive
brand leadership as a key to their survival.
12. Conducting business on the Internet. Developing a presence on the Net has
emerged as a strategy for survival and growth for both retailers and industrial companies.
The struggle for competitive advantage may be waged along three dimensions: reach
(number of customers and products), richness (depth and detail of information), and
affiliation (representing the buyer or seller).
13. Peoplepalooza (competitive advantage through hiring talented people). To
build great companies the most urgent business charge is to find and keep great people.
Talented people may need some leadership, but they will think of new products and
services and develop effective work processes.
All of the impressive strategies just described have limited impact unless they are
implemented properly, meaning that effective management must support strategic leadership.
IV. KNOWLEDGE MANAGEMENT AND THE LEARNING ORGANIZATION
Another strategic thrust of leaders is to help their organizations better adapt to the
environment by assisting workers and the organization to become better learners. Knowledge
management (KM) is the systematic sharing of information to achieve such goals as
innovation, nonduplication of effort, and competitive advantage. Sharing of information is a key
aspect of knowledge information. Managing knowledge well helps an organization learn. A
learning organization is one that is skilled at creating, acquiring, and transferring knowledge,
and at modifying behavior to reflect new knowledge and insights.
A. Knowledge Management
Managing knowledge is an important leadership role because so few
organizations make systematic use of the collective wisdom of employees. As illustrated in
Figure 13–2, most knowledge in the organization resides in the brains of employees or in
documents not readily accessible to others.
Encouraging and developing systems for knowledge sharing are a
key part of knowledge management. Learning cannot take place effectively in companies
where power is acquired by hoarding and controlling knowledge. Getting employees to
document their knowledge is a management challenge.
A recent advance in knowledge management is to deliver information
just in time, or at the point when it is most needed. The idea is to “bake” specialized
knowledge into the jobs of workers with advanced skills, such as Partners HealthCare has
done. Advanced technology for knowledge management must be combined with a culture
that values knowledge and encourages its dissemination.

111. B. The Learning Organization
According to Peter Senge, a learning organization can be looked upon simply
as a group of people working together to enhance their capacities to create results they
value. To help create a learning organization, about 100 large firms have created a position
such as Chief Knowledge Officer.
A leader can help create a learning organization in many ways. First,
the leader should create a strategic intent to learn thereby gaining competitive advantage.
Creating a shared vision is important. Systems thinking is almost synonymous with
organizational learning, whereby people see the interrelatedness of their work. Personal
mastery of the job should be encouraged, as well as team learning that centers on
collective problem solving.
Action learning, or learning while working on real problems, is a
fundamental part of a learning organization. Participants in action learning are asked to
work in teams to attack a significant organizational problem. Learning from failure
contributes to organizational learning, and so does encouraging continuous
experimentation. Finally, the leader must encourage workers to think creatively.
V. GUIDELINES FOR ACTION AND SKILL DEVELOPMENT
According to Mark Graham Brown, to ensure that all workers understand the company’s vision
of where it wants to go, the vision statement should be (a) brief, (b) verifiable, (c) focused on a
major goal, (d) understandable, and (e) inspirational.
COMMENTS ON EXPERIENTIAL EXERCISES
Leadership Self-Assessment Quiz 13-1: Are You a Strategic Thinker?
If taken with a spirit of self-objectivity, this questionnaire can help many students realize that a key
area for growth is the ability to “think big.” In general, people tend to think less strategically early in
their careers.
Leadership Skill-Building Exercise 13-1: Conducting a SWOT Analysis
Conducting a SWOT analysis is a tangible leadership and management skill that most students
enrolled in a business leadership class would enjoy. Students with an interest in the public sector or
the nonprofit sector should also find a SWOT analysis to be valuable.
Leadership Self-Assessment Quiz 13-2: Do You Work for a Learning
Organization?
It would be a stretch for most students to have knowledgeable responses to most of these statements.
However, mulling over the characteristics of a learning organization may help provide new insights.

112. COMMENTS ON DISCUSSION QUESTIONS AND ACTIVITIES
1. Why is strategic leadership thought to have the same meaning as transformational leadership?
The intent of strategic leadership is to point an organization in the right direction.
Transformational leadership also attempts to lead an organization in the right direction—one of
substantial improvement. So both strategic leadership and transformational leadership attempt to
make a substantial impact on the firm.
2. In what way can a business strategy motivate employees?
A business strategy can be motivational because the right strategy can be inspirational,
particularly if the strategy points the organization in a bold, new direction. For example, it might
be inspiring to know that the company is embarking on a bold acquisition strategy that will make
it a dominant player in the field. Under the leadership of Andrea Jung, Avon Products is
expanding to have a bigger presence on the Web and in malls, and by offering a wider line of
products. Many Avon ladies are inspired to work harder, as they are part of a greater enterprise.
3. How could you adapt a business strategy to guide you in your own career as a leader?
Several business strategies can be applied personally to guide a person’s leadership career.
How about differentiating oneself to gain an edge on the competition—like knowing enterprise
software and speaking Russian? Sticking to core competencies is another winner for the leader
who wants to build on strengths.
4. Many top-level managers say that they want lower-ranking managers to think strategically. How
can a middle manager or a first-level manager “think strategically”?
Middle managers can think strategically by looking at the long-range implications of their thinking,
investigating how their activities interact with the outside environment, and attempting to ensure
that their daily activities support corporate strategy.
5. What sources of information should a leader use to find helpful input for formulating strategy?
Sources of input for formulating strategy overlap considerably with sources of information used in
formulating a vision, such as those described in Chapter 3 about charismatic and
transformational leadership. Among these input sources are intuition, the work of futurists, group
discussions, and industry reports.
6. Working by yourself or with several team members, provide a recent example of revolutionary
thinking by a company.
For an idea dreamed up by company management to qualify as revolutionary thinking, it must go
beyond a product or service that already exists. The palm-size, wireless computers that access
the Internet might be considered revolutionary because the owner does not have to be at a fixed,
wired location to gain Net access. The airplane communication satellites described in Chapter 11
might be called revolutionary. However, one could argue that satellite service already existed.
7. The average age of Cadillac owners, across the various models, was about 63 until the Escalade
(a luxury SUV) was introduced into the market. The Cadillac Escalade had an immediate appeal
to affluent rappers, professional athletes, and a variety of other young, wealthy entertainers.
What is the business strategy lesson here?

113. The answer to this question is worth at least a Harvard Business School case. Cadillac had
drifted into an unintended focus strategy, with customers clustered in one age bracket. We say
clustered, because Cadillac always had some affluent, young buyers. The marketing people
struggled to find a product that would appeal to a larger number of young people and they were
successful. In addition, a little serendipity boosted their efforts. The Escalade also caught on with
wealthy, hip people and created a loud buzz.
8. In what way might doing a good job of knowledge management give a company a competitive
advantage?
A company that manages knowledge well would gain a competitive advantage through such
means as solving internal problems better, solving customer problems better, and, in general,
having a continuing stream of useful ideas.
9. How might an organization that provides extensive training and development programs to
employees still not be classified as a learning organization?
Providing training programs to employees is a small part of being a learning organization. Among
other activities, a learning organization must profit from its mistakes, and engage in team learning
and action learning.
10. What steps might a leader take to help group members become systems thinkers?
Helping group members become systems thinkers is tantamount to helping them think big, or
think conceptually. The task is difficult, but frequent mention about the implications of actions,
and how parts of the organization relate to each other, can sensitize people to systems thinking.
A manager who hires a network member over another more qualified candidate might be told
how small actions of this type will weaken an organization if done repeatedly. In contrast, a
manager who hires an outstanding candidate might be reminded how such an activity
strengthens the organization one important brick at a time.
PLAUSIBLE RESPONSES TO CASE QUESTIONS
Leadership Case Problem A: Samsung Sings a Different Tune
A key theme of the Samsung case is that company leadership can successfully change the strategy of
an established firm, thereby bringing it to a new level of success.
1. Identify at least three business (or marketing) strategies Samsung uses now or used in the past.
Samsung established itself with a cost leadership strategy, pricing its goods at the low end of the
consumer electronics market. Later Samsung Electronics focused on a brand leadership
strategy, as it developed the reputation of its brand. Being a components supplier for other
companies is also a strategy, and helps form strategic alliances.
2. What suggestions can you offer Kim and other Samsung leaders so they can become even more
successful in building the Samsung brand?
The methods the company has chosen to build the Samsung brand are working so far. It would
therefore be advisable to continue with this strategy, and market even more heavily. Perhaps
hiring a name athlete to help promote the brand would be useful, as would getting Samsung
products “plugged” in movies.

114. 3. What is your opinion of Eric Kim as a strategic leader?
The evidence so far indicates that Kim is a highly effective strategic leader. He identified a major
potential problem for Samsung—that its products would become vulnerable to other companies
that could produce the same goods at an even lower price. Kim’s solution was to point the
company in a new direction that is working so far.
Leadership Case Problem B: The Reluctant Information Sharers
This case illustrates some of the challenges managers face when they attempt to manage knowledge
and achieve information sharing among workers.
1. What suggestions can you offer Mike Basilio and Lindsay Taylor to improve knowledge sharing at
Blueberry Capital?
Basilo and Taylor need to work harder at selling the ultimate benefits of information sharing, such
as a more profitable firm and more money available for bonuses.
2. How valid are the points made by the financial consultants for not doing a better job sharing
information?
All the points have some validity. Firms engaged in KM, such as Xerox Corp., have found that
scientific employees worry about giving away their best ideas, and that asking for ideas from
others could be interpreted as a sign of weakness.
3. What cultural changes might be needed at Blueberry to improve knowledge sharing?
The obvious answer is that the culture must be moved in the direction of a sharing culture. Basilio
and Taylor can set the pace by sharing vital information about the firm with the professional staff.

115. CHAPTER 14
International and Culturally Diverse
Aspects of Leadership
The purpose of this chapter is to help the reader understand the leadership challenges stemming from
working in international and culturally diverse environments. In addition, the reader is given many
specific suggestions for leading effectively in such an environment.
CHAPTER OUTLINE AND LECTURE NOTES
Sensitivity to and an appreciation of cultural diversity improve working relationships. The modern
leader must be multicultural because corporate success, profit, and growth depend increasingly on the
management of a diverse workforce. For example, white males now constitute less than one-half of the
American workforce. An increasing number of new entrants to the workforce are women and people of
color. The leader must respond to the needs of diverse groups of people. In addition to the workforce
becoming more diverse, business has become increasingly global.
I.THE ADVANTAGES OF MANAGING FOR DIVERSITY
The ethical and social responsibility goals of leaders and their organizations support the
importance of providing adequately for members of the diverse workforce. Ethics is involved
because treating people fairly is considered morally right from the deontological view of ethics.
A firm that embraces diversity is also behaving in a socially responsible manner. Managing for
diversity brings a competitive advantage to the firm in the following ways:
1. Reduction of turnover and absenteeism costs.
2. Managing diversity well offers a marketing advantage. For example, a
multicultural group of decision makers may be at an advantage in reaching a multicultural
market. Another marketing advantage is that many people from culturally diverse groups
prefer to buy from a company that has a good reputation for managing diversity.
3. Companies with a favorable record in managing diversity are at a distinct
advantage in recruiting and retaining talented people.
4. Managing diversity well unlocks the potential for excellence.

116. 5. Heterogeneity in the workforce may offer the company a creativity advantage,
plus improved problem solving and decision making. Research at the United States Postal
Service substantiates many of the advantages of a culturally diverse workforce listed
above. Workforce inclusiveness was measured in terms of the percentages of
under-representation of ten different ethnic groups in comparison to the local civilian labor
force. Inclusiveness was positively correlated with more favorable levels of eight
performance dimensions, such as (a) customer satisfaction ratings, (b) employee ratings of
feeling included, (c) less employee concern about being a victim of violence, and (d)
corporate productivity rate.
II. CULTURAL FACTORS INFLUENCING LEADERSHIP PRACTICE
A multicultural leader is a leader with the skills and attitudes to relate effectively to and
motivate people across race, gender, age, social attitudes, and lifestyles. To influence,
motivate, and inspire culturally diverse people, the leader must be aware of overt and subtle
cultural differences. Such culturally based differences are generalizations and stereotypes that
are starting points in attempting to lead a person from a particular culture.
A. Key Dimensions of Differences in Cultural Values
One way of understanding how national cultures differ is to examine their
standing on selected values, eight of which are described here.
1. Individualism/collectivism. At one end of this dimension is
individualism, a mental set in which people see themselves first as individuals and
believe their own interests and values take priority. (Examples of countries at this end of
the dimension include the United States, Canada, and Great Britain.) Collectivism, at
the other end of the continuum, is a feeling that the group and society receive top
priority. (Examples include Japan, Hong Kong, and Greece.)
2. Power distance. The extent to which employees accept the idea that
members of an organization have different levels of power is called power distance. In
a high-power-distance culture, the boss has more power. Low-power-distance cultures
include the United States, Israel, Germany, and Ireland. High-power-distance cultures
include France, Spain, Japan, and Mexico.
3. Uncertainty avoidance. Countries in which many people accept the
unknown and tolerate risk and unconventional behavior have low uncertainty
avoidance. Low-uncertainty-avoidance cultures include the United States, Canada, and
Australia. High-uncertainty-avoidance cultures include Israel, Japan, and Italy.
4. Materialism/concern for others. Here, materialism refers to an
emphasis on assertiveness and the acquisition of money and material objects, and a
deemphasis on caring for others. Concern for others is an emphasis on personal
relationships and a high quality of life. Materialistic countries include the United States,
Japan, and Italy, whereas “concern for others” cultures include Sweden and Denmark.
5. Long-term orientation/short-term orientation. Workers from a country
with a long-term orientation maintain a long-range perspective. A short-term
orientation is characterized by a demand for immediate results and a propensity not to
save. Pacific Rim countries have a long-range orientation, whereas the United States
and Canada have a short-term orientation.

117. 6. Formality/informality. A country that values formality attaches
considerable importance to tradition, ceremony, social rules, and rank. Informality
refers to a casual attitude toward tradition, ceremony, social rules, and rank. Latin
American workers are more formal, whereas Americans and Canadians are more
informal.
7. Urgent time orientation/casual time orientation. People with an urgent
time orientation perceive time as a scarce resource, leading them toward impatience.
People with a casual time orientation view time as an unlimited and unending
resource, leading them toward extreme patience. Americans have a more urgent time
orientation than do Asians and Middle Easterners.
8. Work orientation/leisure orientation. A major cultural value difference
is the number of hours per week people expect to invest in work versus leisure, or other
non-work activities. Americans are more willing to work long hours than are Europeans.
To use the above information, a leader should recognize that a person’s
national values might influence his or her behavior. For example, a person with a low power
orientation would not immediately comply with a superior’s suggestions. The leader might
therefore have to sell the person on the request.
B. Cultural Values and Leadership Style
Relationships between people in a society are affected by the values
programmed in the minds of these people. Because management deals heavily with
interpersonal relationships, management and leadership are affected by cultural values. In
France, which is a class society, French managers are part of an elite class and behave in
a superior, authoritarian manner. In Germany, middle managers were studied as part of the
GLOBE project. A strong performance orientation (combined with low compassion) was
found to be the most pronounced German cultural value.
209 One study found that top-level European managers
share some common management philosophies and practices, and that their style can be
compared to stereotypes of American and Japanese managers. According to this study, the
following are distinguishing characteristics of European managers.
1. A greater orientation toward people. European managers believe they
are more committed to employees than are U.S. or Japanese managers.
2. A higher level of internal negotiation. European managers spend
considerable time negotiating with various stockholders.
3. Greater skill in managing international diversity. It was found that
European managers recognize, respect, and appreciate diversity.
4. Ability to manage between extremes. European managers tend to be
more in the middle on most dimensions of leadership behavior than are U.S. or
Japanese managers.
Readers are cautioned that this study deals in stereotypes that gloss over
within-culture differences. Also, as leadership and management knowledge continues to be
disseminated widely, effective managers from different geographic regions may develop
similar styles.

118. C. Applying a Motivational Theory Across Cultural Groups
Expectancy theory can be used to illustrate the principle that some aspects of
motivation theory apply across cultures, while other aspects must be modified.
Environmental Control. The assumption in expectancy theory that workers
believe they have control over their own fate may be culturally dependent. Where
individualism predominates, employees may believe strongly that they can influence
outcomes. In collectivistic societies, the ties between the individual and the organization
have a moral component. Employees with an individualistic orientation want to know,
“What’s in it for me?” before responding to a motivational thrust by the leader. Despite
any cultural generalizations, the leader must be alert to individual and cultural
differences.
Appropriateness of Rewards. Leaders must analyze the type and level of
rewards that have the highest valence for individuals. Which rewards are appropriate
are most strongly tied to individual differences. Yet cultural differences are also
important. A study with Russian textile workers found that American goods, pride, and
recognition increased productivity. Participative management resulted in decreased
productivity (probably because such activity clashed with the Russian value system). A
mistake many American managers have made is to assume that a reward that receives
a high valence among American workers will also have a high valence for workers from
another culture.
III. CULTURAL SENSITIVITY AND GLOBAL LEADERSHIP SKILLS
Cultural sensitivity and certain specific global leadership skills are essential for inspiring people
from cultures other than one’s own. Leadership attributes in general are also important.
A. Cultural Sensitivity
Cultural sensitivity is essential for inspiring people from cultures other than
one’s own. To influence others, leaders must be sensitive to cultural differences. A cross-
cultural leader must also be patient, adaptable, flexible, and willing to listen and learn.
These characteristics are part of cultural sensitivity, an awareness of and a willingness to
investigate the reasons why people of another culture act as they do.
Cultural sensitivity is also important because it helps a person
become a multicultural worker—one who is convinced that all cultures are equally good
and who enjoys learning about other cultures. Sensitivity is the most important
characteristic for leading people from other cultures because cultural stereotypes rarely
provide reliable guides. Another aspect of cultural sensitivity for cross-cultural leaders is to
pay close attention to foreign business practices.
Problems of cultural misunderstanding that leaders should be aware
of cluster in five areas: (1) language differences; (2) religious differences; (3) different work
habits, such as being willing to invest personal time in work; (4) differences in women’s
roles across cultures; and (5) differences in personal appearance and behavior.
Cultural sensitivity is enhanced by diversity training as well as by
simply listening carefully and observing. A key principle is to be flexible when dealing with
people from other cultures.

119. B. Global Leadership Skills
Global leadership skills improve a company’s reputation and contribute to a
sustainable competitive advantage. Excellent global leaders have a leadership style that
generates superior corporate performance in terms of four criteria: (1) profitability and
productivity, (2) continuity and efficiency, (3) commitment and morale, and (4) adaptability
and innovation. Attaining all four criteria of organizational performance is called behavioral
complexity. Global leadership skills also include stewardship of human and natural
resources (being socially responsible).
Another perspective on global leadership skills is that the leader must
tap into a deep, universal layer of human motivation in order to build loyalty, trust, and
teamwork in different cultures. To get at the needs (such as affiliation and exploration), the
global leader must satisfy three meta-values: community (serving the common good),
pleasure (intrinsic motivation), and meaning (meaningful work).
Effective global leaders also exhibit leadership skills necessary for
dealing with day-by-day interactions. As revealed by a study, two success factors are
sensitivity to cultural differences and being culturally adventurous.
A confusing skill issue for many international managers is the
importance of having a good command of a second language. English is the standard
language of business and science, but when trying to influence a person from another
culture, speaking his or her language well gives you an advantage.
IV. LEADERSHIP INITIATIVES FOR ACHIEVING CULTURAL DIVERSITY
For organizations to value diversity, top management must also be committed to embedding
diversity in company strategy. Figure 14–3 lists the most frequent areas (such as race) in which
diversity efforts are directed in large firms.
A. Hold Managers Accountable for Achieving Diversity
If managers are held accountable for behavior and business changes in the
diversity arena, an organizational culture supportive of diversity will develop. Achieving
diversity objectives can be included in performance appraisals and linked to compensation.
Allstate measures the accomplishment of diversity with an employee survey that includes a
diversity index. Coca-Cola ties 25 percent of each manager’s compensation to how well he
or she achieves specific diversity goals.
B. Establish Minority Recruitment, Retention, and Mentoring Programs
An essential initiative for building a diverse work force is to recruit and retain
members of the targeted minority group. Because recruiting talented members of minority
groups and women is competitive, careful human resources planning is required. Colleges
and universities with high minority enrollments in key disciplines can be targeted.
Employees can form network groups to attract minorities and women. Efforts at recruiting a
culturally diverse work force must be supported by a leadership and management approach
that leads to high retention, such as cultural training programs.
Mentoring is a key initiative for retaining minority group members, as
well as facilitating their advancement. Successful minorities with supportive managers and
coworkers have faster compensation growth and progress more rapidly in their firms.

120. C. Conduct Diversity Training
Diversity (or valuing differences) training has become a widely used, though
controversial, method for enhancing diversity within organizations. The purpose of diversity
training is to bring about workplace harmony by teaching people how to get along better
with diverse work associates. Training sessions in valuing differences focus on the ways in
which men and women and people of different races reflect different values, attitudes, and
cultural backgrounds. Sometimes these programs are confrontational, sometimes not. An
essential part of relating more effectively to diverse groups is to empathize with their point
of view.
A concern about diversity training is that it serves to reinforce
stereotypes about groups. Leaders of diversity training are cautioned to guard against
encouraging participants to be too confrontational and expressing too much hostility.
Diversity training is most likely to bring about attitudinal and behavioral change when (1)
participants are not locked into rigid opinions, (2) conflicting peer pressure is not present,
and (3) the organizational culture supports multiculturalism.
D. Encourage the Development of Employee Networks
An employee network group is composed of employees throughout the
company who affiliate on the basis of a group characteristic such as race, ethnicity, sex,
sexual orientation, or physical ability status. Group members typically have similar interests
and look to the group as a way of sharing information about succeeding in the organization.
Employee network groups can be divisive, but they can also play positive roles. At 3M
Corporation, network groups serve as advisers to business units.
E. Avoid Group Characteristics When Hiring for Person-Organization Fit
Person-organization fit centers around the extent to which a person’s major
work-related values and personality traits fit major elements of the organization culture.
Selecting for person-organization fit can lead to a cohesive and strong organizational
culture. The danger, however, is that when employers focus too sharply on cultural fit in the
hiring process, they might inadvertently discriminate against protected classes of workers.
Selecting candidates who look and act alike conflicts with a diversity strategy. The antidote
is to focus on traits, behaviors, and values rather than group characteristics when hiring.
V. DEVELOPING THE MULTICULTURAL ORGANIZATION
A multicultural organization values cultural diversity and is willing to utilize and encourage
such diversity. The multicultural organization helps avoid problems stemming from diversity,
such as increased turnover, interpersonal conflict, and communication breakdowns. The
multicultural organization has the following characteristics:
1. Creating pluralism. In a pluralistic organization, both minority- and majority-
group members are influential in creating the behavioral norms, values, and policies of the
organization.
2. Achieving leadership diversity. To achieve a multicultural organization, firms
must also practice leadership diversity, the presence of a culturally heterogeneous group
of leaders. Mentoring has proved to be an effective vehicle for achieving leadership
diversity.
3. Creating full structural integration. The objective of full structural integration is
a zero correlation between culture-group identity and job status.

121. 4. Creating full integration of informal networks. Minorities must be integrated
into informal networks to achieve career advancement. Assists include company-sponsored
mentoring programs, social events for minorities, and minority professional associations.
5. Creating a bias-free organization. Organizational efforts to reduce bias, such
as bias-reduction training, help prevent discrimination.
6. Organizational identification. In a multicultural organization, there is a zero
correlation between the cultural identity group and levels of organizational identification.
7. Minimizing intergroup conflict. The most effective approach to minimizing
conflict among cultural groups is to collect and share data about sensitive issues.
VI. GUIDELINES FOR ACTION AND SKILL DEVELOPMENT
Any manager starting a Diversity Program should be ready to walk the talk before embarking
or the effort will backfire. The walk should be seen in communication, compensation, recruiting,
committee membership, promotions, advertising, and work/life initiatives.
COMMENTS ON EXPERIENTIAL EXERCISES
Leadership Skill-Building Exercise 14-1: Capitalizing on Diversity
An important feature of this exercise is that it helps illustrate the importance of leadership in bringing
about the potential competitive advantage of diversity. The group might decide, for example, that it is
not implementing the right mechanisms for obtaining the full contribution of diverse employees. One
possibility is that the leaders have not created a climate permissive enough to encourage the
contribution of ideas.
Leadership Self-Assessment Quiz 14-1: Charting Your Cultural Value Profile
In addition to plotting their own cultural profiles, students are asked to speculate on the impact of the
profile on leading others. Students are asked to identify which type of profile would respond well or
poorly to their leadership. We can assume in general that it is easier to lead a person with a cultural
profile comparable to our own.
Leadership Skill-Building Exercise 14-2: The Diversity Circle
The diversity circle is a powerful exercise in demonstrating how some people feel about being diverse.
Volunteerism is very important in this exercise. No person should feel compelled to participate. Self-
selection helps avoid placing somebody in an uncomfortable position. Ask students to describe a
perception of being different that they are willing to share with the rest of the class. Our experience
using this exercise repeatedly has been a student participation rate of over 98 percent.
COMMENTS ON DISCUSSION QUESTIONS AND ACTIVITIES
1. Since the U.S. work force is becoming increasingly Latino (or Hispanic), should managers all be
required to speak and read Spanish?

122. This policy might make considerable sense in American cities where a substantial portion of the
work force is Spanish-speaking. However, it will mean that many otherwise capable managers
will be excluded from managerial positions.
2. How does the concept of diversity in organizations relate to political correctness?
Diversity in organizations ties directly to political correctness, because appreciating diversity is
politically correct. Nevertheless, a genuine appreciation of valuing differences should not be
dismissed as simply an act of political correctness.
3. An old refrain goes, “Why can’t the cowboys and Indians just be friends?” Translate this line from
a song into a diversity lesson for modern business leaders.
The diversity lesson here for modern leaders is that they should strive to get diverse groups
working together smoothly, even if these groups have experienced conflict in the past. Also, there
is no valid reason that diverse groups cannot learn to work smoothly together.
4. What actions might a leader take to demonstrate that his or her interest in diversity goes beyond
rhetoric?
An obvious step to show that a leader has a genuine interest in diversity would be to promote
diverse people into key positions. A related step would be for the leader to have diverse people
as his or her closest advisers.
5. How does a culturally heterogeneous staff contribute to the leader’s ability to make effective
decisions?
A heterogeneous staff will often introduce several viewpoints, thus helping to make more
comprehensive decisions. At the same time the heterogeneous viewpoints contribute to finding
creative solutions to problems.
6. In your own words, what is a multicultural leader?
The general idea is that the multicultural leader can be a positive force in working with people
from different cultures, from both within and outside the country.
7. Assume that an outstanding sales representative works for a company that considers it unethical
to bribe officials to make a sale. The sales representative is about to close a deal in a foreign
country where bribing is standard practice. Her commission will be $60,000 for a signed contract.
What should the representative do if the official demands a $4,000 gift before closing the deal?
The representative should consult with the home office to see if the no-bribe policy also applies
to countries where greasing the palm is standard practice. If the home office executive says that
bribes are still out of the question the representative will have to refuse to give the gift. Yet the
representative might look to grant every consideration that still lies within company policy.
8. With so much business being conducted over the Internet, including email, why is it important to
understand cross-cultural differences in values?
Although a considerable amount of business is conducted electronically, values can be
incorporated into electronically transmitted messages. For example, a person from a high-power-
distance culture might respond best to directive messages.

123. 9. Suppose you are a team leader and one of your team members has a strong work ethic, based
on his or her cultural values. Is it fair to assign this member much more work just because he or
she is willing to work longer and harder than other team members?
It might be helpful to use an ethical screen to answer this question. A significant ethical issue is
whether the workhorse employee receives bigger rewards than coworkers with a weaker work
ethic.
10. Find an article, book, or Internet reference, or interview a business leader to help answer the
question “How can I prepare myself to become a multicultural leader?”
Whatever advice the student uncovers, it will probably include developing cultural sensitivity,
including learning about other cultures.
PLAUSIBLE RESPONSES TO CASE QUESTIONS
Leadership Case Problem A: Carlos Gutiérrez Intends to Make
Kellogg Company Special Again
This case illustrates both the importance of being a multicultural leader and how a leader must think
strategically.
1. How will Gutiérrez’s cross-cultural background assist him in achieving the growth goals
established for Kellogg?
Given that Kellogg serves so many different cultures both within and outside the United States,
Gutiérrez needs a sensitivity to cultural differences to formulate marketing strategies for the
various cultures.
2. How can Kellogg use cultural diversity within the organization to help with product innovation?
The various cultural groups can help develop products that might provide an edge in specific
cultures, such as iron-fortified Corn Flakes for Mexico.
3. Identify the business strategies that Gutiérrez is using to improve the future of Kellogg Company.
Gutiérrez is emphasizing differentiation by attempting to develop innovative products that will
stand out in the marketplace. His emphasis on marketing snack foods more heavily in the future
suggests a brand-development strategy.
4. What other business strategies do you recommend that might help Gutiérrez improve the future
of the Kellogg Company?
Branded, expensive food products like cereals do not appear to have a promising future. It might
therefore be necessary for Kellogg to look to diversify into other businesses with bigger potential
profit margins. Developing an Internet strategy might be another possibility. Forming strategic
alliances with fast-food chains that sell breakfast food might be another possibility.
5. Is Kellogg discriminating against majority suppliers in its attempt to build good relations with
minority suppliers?

124. By most perspectives Kellogg is discriminating against majority suppliers because they do not
receive equal consideration for some contracts. The rationale for favorable treatment of minority
suppliers is that many minority business owners have been discriminated against in the past, so
the scales have to be balanced.
Leadership Case Problem B: Ralph Lauren Seeks Racial Harmony
This case illustrates the complexities involved in becoming a multicultural organization, and how
incremental changes may not accomplish the job.
1. To what extent is Ralph Lauren on the right track to developing a multicultural organization?
Ralph Lauren is moving in the right direction with Polo’s many diversity initiatives, including the
hiring (and rehiring) of Lacey Moore, and the hiring of human resource manager Paul Campbell.
The race relation seminars are also on the right track.
2. What further advice can you offer Lauren to achieve fuller workplace diversity at Polo?
To achieve fuller workplace diversity at Polo, Lauren should hire several people of color into key
operating positions, such as a merchandising manager or head designer. Polo can still retain the
cool image, but look for cool people who are not Caucasians.
3. Is the Christmas party incident a symptom of an organizational problem? Or were the black and
Hispanic employees just behaving as they chose?
The holiday party incident is not a Polo-specific problem, and can even be found in college
cafeterias. People tend to group themselves among people of the same racial or ethnic groups.
However, Polo managers might take the initiative in a friendly way to encourage people from
various demographic groups to intermingle.
4. Does Ralph Lauren “get it” as a leader with respect to diversity in the workplace?
Ralph Lauren appears to fall short of completely “getting it” with respect to diversity in the
workplace. For example, he thinks that featuring a black model is a major contribution to
improved race relations. Lauren would also need to be more personally involved in promoting
diversity in the workplace to demonstrate that he gets the concept entirely.

125. CHAPTER 15
Leadership Development, Succession,
and Followership
The primary purpose of this chapter is to help readers understand the nature of leadership
development and succession, including the need for continuous learning. Another is to alert the reader
to the importance of being an effective follower.
CHAPTER OUTLINE AND LECTURE NOTES
This chapter describes the processes organizations use to develop present and future leaders. A
description of one facet of leadership self-development is also included.
I. DEVELOPMENT THROUGH SELF-AWARENESS AND SELF-DISCIPLINE
Self-help contributes heavily to developing leadership capabilities. Two major components of
leadership self-development are self-awareness and self-discipline.
A. Leadership Development Through Self-Awareness
An important mechanism underlying self-development is self-awareness,
insightfully processing feedback about oneself to improve personal effectiveness. Self-
awareness occurs at two levels. Single-loop learning occurs when learners seek minimum
feedback that might substantially confront their basic ideas or actions. Single-loop learners
think defensively. Double-loop learning is an in-depth type of learning that occurs when
people use feedback to confront the validity of the goal or the values implicit in the situation.
Double-loop learning enables the leader to learn and profit from setbacks. By interpreting
the reason a setback occurred, the leader might do better the next time.
B. Leadership Development Through Self-Discipline
Leadership development requires considerable self-discipline, mobilizing
one’s effort and energy to stay focused on attaining an important goal. Self-discipline plays
an important role in the continuous monitoring of one’s behavior to ensure that needed self-
development occurs.

126. II. DEVELOPMENT THROUGH EDUCATION, EXPERIENCE, AND MENTORING
Much of leadership development takes place through means other than self-awareness and
self-discipline or leadership development programs. Almost any life activity can help people
prepare for a leadership role.
A. Education
Education generally refers to acquiring knowledge without concern about
immediate application. The extent of formal education is positively correlated with achieving
managerial and leadership positions and with the level of leadership position attained. Most
high-level leaders are intelligent, well-informed people who gather knowledge throughout
their career.
B. Experience
Without experience, knowledge cannot readily be converted into skills.
Leadership experience also helps build skills and insights that a person may not have
formally studied.
1. Challenging Experiences. The best experiences for leadership
development are those that challenge the manager realistically. The goal of leadership
development is to provide meaningful development opportunities, not to push managers
to the point where they are most likely to fail. Table 15–1 of the text lists powerful
developmental experiences. An important part of capitalizing on challenging
experiences is for the leader/manager to be given leeway in choosing how to resolve
the problem.
2. Sources of Experience. The two major developmental factors in any
work situation are work associates and the task itself. Work associates can serve as
positive or negative models. Work-related tasks give the leader an opportunity to
become an effective and innovative problem solver.
Another way of obtaining experience helpful for development
is to learn from the wisdom of leaders who have been through challenges. The CEO
Academy represents a formal approach to experience sharing.
3. Broad Experience. Many aspects of leadership are situational.
Gaining managerial experience in different settings is therefore advantageous.
Multifunctional managerial development is an organization’s intentional efforts to
enhance the effectiveness of managers by giving them experience in multiple
organizational functions. The lowest level of commitment would be for managers simply
to study other functions. The highest level of commitment is complete mobility across
functions, as exemplified by the career maze at Hewlett-Packard. Achieving broad
experience fits well with the current emphasis on growth through learning new skills
rather than a preoccupation with vertical mobility.
4. Pivotal Life Experiences. Certain pivotal or transformational life
experiences can help develop leadership effectiveness. These events help people
recognize their capacity to effect change and gain the support of others. The specific
experience itself may vary—a positive or negative event, or even a relationship—but it
is always a learning process. The text mentions Jack Kahl, a former CEO, who at the
age of seven started a newspaper route to help his family financially. Kahl cites this

127. early experience as a formative one, teaching him the importance of doing the job well
and pleasing customers.
C. Mentoring
Coaching often comes from a mentor, a more experienced person who
develops a protégé’s abilities through tutoring, coaching, guidance, and emotional support.
A mentor is often a person’s manager, but he or she can also be a staff professional or a
coworker.
1. Informal Versus Formal Mentoring. Mentoring is traditionally thought
of as an informal relationship based on compatibility between two personalities;
however, many firms offer formal mentoring programs. Ragins and Cotton studied the
effectiveness of informal versus formal mentoring programs for men and women,
across three occupations. Informal mentoring led to higher income.
The human resources group is often involved with successful
mentoring in setting goals, pairing mentors with protégés, and getting top management
committed to the program. A new approach to mentoring is shadowing, or directly
observing the work activities of the mentor by following the person around for a stated
period of time.
2. Impact on Leadership. A survey of large companies found that 96
percent of executives credited mentoring as an important developmental method, and
75 percent said mentoring played a key role in career success. Mentoring was also
seen as an effective method for helping minorities advance. The mentor can serve as a
model of effective (or ineffective) leadership, and can coach the protégé about handling
leadership situations.
III. LEADERSHIP DEVELOPMENT PROGRAMS
Leadership development programs typically focus on topics such as personal growth,
leadership style, strategy formulation, influence, motivation, and persuasive communication.
Management development programs include many more topics than do those programs
focused on leadership. Corporate university is a term to cover company activities geared toward
leadership and management development, as well as other forms of high-level training.
A. Key Characteristics of a Leadership Development Program
A leadership development program has to be appropriately sponsored,
carefully designed, and professionally executed. Characteristics of a successful leadership
development program include the following:
1. Begin by carefully selecting participants for the program.
2. Involve executives and secure their sponsorship.
3. Gear the development program to the participants’ level of
management.
4. Address current and future organizational needs.
5. Use an appropriate model or theory.
6. Give ongoing reinforcement and emotional support.
7. Support individual improvement with diagnostic tools.
8. Ensure practical and relevant content.
9. Emphasize interpersonal relationships and teamwork.
10. Conclude with individual action plans.
B. Types of Leadership Development Programs

128. Although leadership development programs overlap, they can be divided into
six types.
1. Feedback-Intensive Programs. A feedback-intensive development
program helps leaders develop by seeing more clearly their patterns of behavior, the
reasons for such behaviors, and the impact of these behaviors and attitudes on their
effectiveness. These programs combine and balance three key elements of a
developmental experience: assessment, challenge, and support. Emotional support
helps participants work through the intensity of the feedback.
2. Skill-Based Programs. Skill training in leadership development
involves acquiring abilities and techniques that can be converted into action. The
emphasis is on learning how to apply knowledge. Five different methods are often used
in skill-based leadership training: lecture, case study, role-play, behavioral role
modeling, and simulations. Behavioral role modeling is an extension of role playing and
is based on social learning theory. Simulations give participants an opportunity to work
on a problem that simulates a real organization.
3. Conceptual Knowledge Programs. A standard approach to leadership
development is to learn useful concepts about leadership. Conceptual knowledge is
very important because it alerts the leader to information that will make a difference in
leadership.
4. Personal Growth Programs. Leadership through personal growth
involves getting in touch with one’s inner desires and fulfilling them. The tacit
assumption is that leadership is almost a calling. Learning who you need to be is one
approach to leadership development through personal growth.
5. Socialization Programs. From the company standpoint, an essential
type of leadership development program emphasizes socializing (becoming acclimated
to and accepting) the company vision and values. Frequently, the chief executive
makes a presentation of the company vision and values.
6. Action Learning Programs. In action learning, leaders and potential
leaders work together in groups to solve organization problems outside of their usual
sphere of influence.
The process of leadership development continues to evolve. According to
Fulmer, the kind of learning that results in competitive advantage will not be limited by time,
space, or matter.
IV. EVALUATION OF LEADERSHIP DEVELOPMENT EFFORTS
A comprehensive approach to leadership development would include a rigorous evaluation of
the consequences of having participated in a developmental experience. The evaluation of
training and development programs is a comprehensive topic that includes considerations such
as the design of experiments and the development of accurate outcome measures.

129. A. The Traditional Approach to Evaluation
A traditional evaluation approach would first specify the program objectives
and later measure how well those objectives were met. Outcome measures include skill
acquisition by participants and the degree of organizational improvement. A more rigorous
approach to evaluation would include an experiment, as shown in Table 15–3. The
traditional method of evaluation is best suited to evaluating structured, definable skills, such
as performing a break-even analysis. HR specialists will often ask participants to evaluate
the development program, and which aspects of the program led to better job performance.
B. Evaluation Through Domains of Impact
A useful method of measuring the outcome of leadership development is to
differentiate the types of learning and to measure them separately. Areas of possible
changes are referred to as domains of impact. Perspective change is one such domain.
V. LEADERSHIP SUCCESSION
In a well-managed organization, replacements for retiring and dismissed executives are
chosen through leadership succession, an orderly process of identifying and grooming people
to replace executives. Being groomed as a successor is part of a person’s development, and
fostering a successor’s development is part of a manager’s own development.
A. How the Board Chooses a Successor
The board is likely to follow standard principles of human resources selection
such as thoroughly screening candidates, including speaking to people who have worked
with the candidate. It is recommended that board members have regular contact (both
formal and informal) with potential candidates.
B. Succession Planning at General Electric
Board members are closely involved in an ongoing evaluation of the
company’s highest ranking managers. Twice a year directors scrutinize about fifteen of
these people. The process includes lengthy interviews with the managers, their managers,
former associates, and group members. This system for identifying successors employs
multiple inputs and tracks longitudinal performance.
C. The Emotional Aspects of Leadership Succession
When executives are replaced, even if they are financially independent, they
are likely to experience an emotional loss. Leadership succession in a family business is
emotional for many reasons, such as family squabbles over the best-qualified successor.
Another potential problem with leadership succession in a family business is conflict
between or among siblings. Replacing a business founder is another emotional process. To
ease the pain, a consultant recommends that (1) the new owner and the founder must both
be flexible, (2) the new leader must clarify his or her role, and (3) both the founder and the
new leader must maintain the perspective of wanting the firm to succeed.

130. D. Developing a Pool of Successors
Research suggests that a shortage of business leaders is becoming a major
problem. The recommended solution to the shortage is to create pools of candidates with
high leadership potential. Developing a pool of candidates combines evaluating potential
with giving high-potential individuals the right type of developmental experiences.
Another approach to developing a pool of successors is the
leadership pipeline, a model of leadership development that tightly links leadership
development with management responsibilities at each level of the organization. The
pipeline feeds succession because managers are prepared to be leaders at the next level.
VI. FOLLOWERSHIP: BEING AN EFFECTIVE GROUP MEMBER
To be an effective leader, one needs good followers (or group members).
A. Essential Qualities of Effective Followers
Certain effective group member characteristics facilitate followership: (1) self-
management or thinking for oneself, and working well without close supervision; (2)
commitment to something beyond oneself; (3) building competence and focusing effort for
maximum impact; and (4) the courage to think independently, and to fight for what one
believes is right.
Another way of framing the qualities of effective followers is that they
display the personal characteristics and qualities of effective leaders. Leadership Skill-
Building Exercise 15–2 has excellent information for studying effective followership.
B. Collaboration Between Leaders and Followers
A key role for followers is to collaborate with leaders in achieving
organizational goals. Bennis says that the post-bureaucratic organization requires a new
kind of alliance between leaders and the led. The new leader and the led are close allies.
VII. WHO WILL BE THE NEW TOP BUSINESS LEADERS?
The often-neglected middle managers have come back in style as being major contributors to
the success of business firms. Middle managers may have more credibility and goodwill than
executives. To advance, middle managers will need financial know-how and the ability to
communicate with a wide range of constituents. Integrity is also key. Roger Ailes believes that
people with dynamic personalities will rise to the top.
VIII. GUIDELINES FOR ACTION AND SKILL DEVELOPMENT
An important method for enhancing both the acceptance and the effectiveness of leadership
development is needs analysis, the diagnosis of needs for development. A needs analysis
recognizes individual differences among leaders and future leaders. Sources of data for
assessing leadership development needs include (1) self-perceptions of developmental needs,
(2) perceptions by others in the workplace, (3) psychological evaluation, and (4) a statement of
organizational needs for development.

131. COMMENTS ON EXPERIENTIAL EXERCISES
Leadership Self-Assessment Quiz 15-1: The Interpersonal Skills Checklist
The interpersonal skills checklist is an extraordinarily important development exercise. Most people
have their developmental needs tapped by this straightforward questionnaire. Moving from need
recognition to change requires an astute action plan and considerable self-development.
Leadership Skill-Building Exercise 15-1: Maintaining a Personal
Leadership Journal
I thank the anonymous outside reviewer for suggesting that students maintain a personal leadership
journal. Charting one’s experiences and progress can lead to positive changes in behavior.
Leadership Skill-Building Exercise 15-2: The Followership Evaluation Form
There will be widespread agreement about the importance of most of the items in this checklist. A
supplement to the assignment given in the exercise is for group members to furnish instances of good
or poor examples they have seen of the checklist behaviors.
Leadership Skill-Building Exercise 15-3: Building for the Future
An important aspect of many leadership development programs is feedback from peers. The standard
feedback method described in this exercise is well structured and usually quite effective. At this point
in the course, many students will appreciate constructive suggestions for personal development.
COMMENTS ON DISCUSSION QUESTIONS AND ACTIVITIES
1. Many business executives believe that playing team sports helps a person develop as a leader.
Based on your knowledge of leadership development, where do you stand on this issue?
Playing team sports undoubtedly contributes to an awareness of the importance of team play.
Many executives, however, overlook the possibility that a person can develop teamwork skills in
other group activities, such as experience with a school newspaper, a club, or an orchestra.
2. How can a person increase self-awareness?
In this context, self-awareness refers to processing feedback about oneself insightfully to improve
personal effectiveness. One way of increasing this self-awareness is to process more critically
any feedback that comes along. Another approach would be to discuss feedback a person might
receive with an insightful person. The person attempting to develop self-awareness might ask a
question such as, “What is your interpretation of the feedback I received?”
3. Give an example from your own life in which you engaged in double-loop learning, or in which
you should have engaged in such learning.
Assume that a student had business leadership experience and received a mild complaint that he
or she was overdue with the last performance appraisal or salary review. Double-loop learning
here would acknowledge the problem of not being prompt enough with performance appraisals or

132. salary reviews. In addition, the student might ask if his or her entire approach to managing the
group was effective. For example, “Could this feedback mean that I am getting so caught up in
small details that I miss activities that are really important to my group?”
4. Suppose you aspired to become a senior executive in a large company. How would working as
an office supervisor, production supervisor, or manager in a fast-food restaurant help you
achieve your goal?
Supervisory experience is highly valuable for an executive position for many reasons. The future
executive has an opportunity to practice basic management skills such as motivation and
communication with career beginners. Furthermore, he or she learns firsthand about operations
and is better able to empathize with line personnel. Also, the future executive learns how difficult
it is to earn a profit.
5. Assume that you were responsible for selecting a leadership development program for your
organization. What questions would you ask a potential provider of these services?
Relevant questions to ask a provider of leadership development services include: (1) What
outcomes can we expect? (2) Can we speak to other clients of yours? (3) On what leadership
model is your program based? and (4) What is your professional background?
6. How will you know if the course for which you are reading this book will have helped you in your
development as a leader or manager?
One approach to evaluating the effectiveness of such a leadership course would be to implement
a few leadership approaches described in the course, such as empowerment or management by
anecdote, and observe the consequences. If these techniques improve productivity and
satisfaction, the person can assume that he or she benefited. A rigorous experimental approach
would be for the student to compare his or her career progress over time with others who did not
take either this course or a similar one.
7. What are the advantages and disadvantages of having an outsider succeed the top executive in
an organization?
The advantages of having an outside successor include (a) a fresh perspective on the firm, (b) no
emotional and political ties within the organization, and (c) the possible addition of other
outsiders, thus adding more talent to the organization.
8. What can you as a parent, future parent, or close relative do to help a child under ten years old
become a leader later in life?
Assuming that the parent believes that traits and behaviors contribute to leadership
effectiveness, the parent could take actions such as: (1) giving the child intellectual stimulation,
(2) helping the child speak well and write well, and (3) encouraging self-confidence and initiative.
A more speculative approach would be to read the child bedtime stories about business
executives such as Bill Gates, Jack Welch, and Carly Fiorina!
9. Why are many CEOs who are planning to retire reluctant to identify a replacement a year or two
in advance?
Several CEOs have pointed out that if a replacement is identified too early the aspirants who
were not identified as the replacement may leave the organization. The CEO also has the
problem of dealing with potential conflict between the person designated as the successor and
the one or two managers who were not selected.

133. 10. Ask an experienced leader what he or she thinks is the most effective method of developing
leadership skills. Bring your findings back to class.
The most frequent response will probably be experience. At this point in the course it would be
effective to review why guided experience, or the application of leadership concepts combined
with experience, is probably an even better way to develop leadership skills.
PLAUSIBLE RESPONSES TO CASE QUESTIONS
Leadership Case Problem A: Len Riggio, Barnes & Noble’s Baron of Books
This case illustrates how even a highly successful executive can find room for personal development.
1. Identify several of Len Riggio’s developmental needs.
Riggio may need to be less abrasive toward people to soften his image. He needs to become
more diplomatic, so as not to needlessly create enemies.
2. If you were Len Riggio’s executive coach, what would you advise him?
A coach might encourage Riggio to keep plugging away at finding a strategy to differentiate
Barnes & Noble from Amazon.com. The coach might also advise Riggio to work at being more of
a statesperson and soften his rough edges in order to seem less combative. Riggio might also be
advised to develop a grand strategy of increasing the market for books and music, not merely
grabbing market share from other retailers and eretailers. Riggio has made some progress in this
area with the “forthcoming software developments.”
3. Identify at least two business strategies that Riggio has already used.
One strategy is to consolidate the book business as much as possible. Another is cost
leadership, as reflected in Barnes & Noble being the first book discounter. Riggio has also
successfully implemented geographic decentralization with hundreds of stores. Barnes & Noble
is diversifying by selling a wider range of products such as Godiva Chocolates and digital books.
4. Recommend a business strategy to help Barnes & Noble be even more successful.
Perhaps Barnes & Noble can enter into strategic alliances to help cross-sell its books and other
products. You may have noticed Starbucks coffee shops in Barnes & Noble superstores. How
about a Barnes & Noble shelf in selected Starbucks coffee shops? More seriously, how about
Barnes & Noble managing the book departments in selected major retailers, given that the
company already manages college bookstores?
5. Is there a particular leadership development program you would recommend for Riggio?
Riggio might participate in a feedback-intensive leadership development program so he can
better understand why he is so abrasive with people.

134. Leadership Case Problem B: “Help! I’m the New Boss.”
A contribution of this case incident is that it represents a major challenge of many new
leader/managers: how to assert authority with chronologically older and more experienced group
members.
1. What type of leadership development program do you recommend for the person who wrote this
case history?
The person who wrote this case history should begin with the basics, such as a development
program for first-time supervisors. A specialized leadership development program about
influence tactics might also be helpful.
2. What specific traits and behaviors does the boss in question need to work on?
The boss in question needs to become more assertive and self-confident.
3. How would you deal with the situation of a group member who refuses to act on your suggestions
for improved performance?
The scenario of a group member refusing to act on suggestions for improved performance is
ego-threatening. One approach the leader/manager might take is to threaten to impose
sanctions, such as a poor performance appraisal, if the person does not comply. A stronger
leadership approach would be to help the person understand why cooperation with the boss is
important for organizational performance, and for the group member’s reputation.