Business Management Dersi 7. Ünite Özet

The Meaning and Nature of Leadership

Leading is the dynamic function of management. Its main content is the human interaction. Leadership is the proces of influencing others – a group, employees, or followers depending on the environment- in dynamic ways towards attaining goals. Leadership is a blend of factors shaped by the environmental impact. Goals are guides for leaders and their followers which govern leadership process. Personality and values shape a person’s leadership skills. The latter become most influential when charismatic individuals emerge in times of crisis—whether generated from external threats— such as economic crises, changes in the political environment, or internal threats such as upending reorganizational change, succession, and etc. The acceptance of followers and/or encouragement is where leaders draw most of their power.

Leadership and Management

Leadership and management are mostly mentioned as same processes, but it is important to understand the difference between the two. We can distinguish leadership and management in various dimensions such as:

• Management is based on position, leadership is about personal qualifications;
• Managers are appointed, a leader is a role model who earns the title and is embraced by the followers;
• Management aims at formal goals whereas leaders generate informal goals;
• Management is attaining goals through others, leadership is pursuing goals with others;
• Management is based on rules, leadership is spontaneous and inspirational;
• Managers focus on completing tasks efficiently whereas leaders focus on goals for development, improvement, and change;
• Management authority is based on legal authority, leadership power comes from followers; and
• Management produces order and consistency but leadership produces change and movement.

Traditional Approaches to Leadership

The approaches to leadership change by periods and environmental affects. Traditional approaches are the early studies about leadership which point out to traits and behaviors of leaders. The traits approach focused on identifying innate qualities and characteristics possessed by great social, political, and military leaders in history. Recent research on leadership focus on more sophisticated traits and more importantly on skills. Business leaders are seeked to possess skills such as social interaction, entrepreneurial traits, cognitive abilities, flexibility, or cultural sensitivity and many others relevant with environmental, global developments.

A focus solely on traits had not been sufficient for seperating leaders from others. This led to searching for behavorial side of leaders’ characteristics. Some behaviorial approaches are: the Michigan studies, the Ohio State studies, and the managerial grid.

Th e Michigan studies identified two basic forms of leadership behaviors: task/production oriented behaviors and people/employee oriented behaviors. The researchers from Ohio State University introduced two basic leader behaviors or styles: initiating structure behavior and consideration behavior. The managerial grid is a useful tool for managers to observe which category in the grid their leadership style fits. It is also a model that can be used during training programs for organizational development.

The Managerial Grid consists of five managerial or leadership styles reflected in two dimensions which are concern for people (vertical) and concern for production (horizontal): (1,1) Impoverished management –low in both dimensions; (1,9) Country Club management – high in concern for people and low in concern for production; (9,9) Team management – high in both concerns; (9,1) Authority compliance – high in concern for production and low in concern for people; and (5,5) Middle of the Road management – intermediate in both dimensions. The managerial grid is a useful tool for managers to observe which category in the grid their leadership style fits. It is also a model that can be used during training programs for organizational development.

Contingency Approaches to Leadership

The contingency models of leadership focus on the match between environmental factors and leader’s behaviors. Some of the factors examined are organizational goals, leader-employee relations, task structure, and position power.

Situational leadership and Fiedler’s contingency model are well known contingency approaches. Situational leadership emphasizes that leaders match their approach according to the degree that subordinates are ready for the task. Hence, the model introduces two basic parts: leadership styles and development level of employees. The message for managers and leaders here is that, it is critical to be informant and observant about subordinates’ connections to their job.

Fiedler’s contingency model examines the match between the leadership style and the situation. The difference from the situational model is that Fiedler’s model adds organizational aspects to the situational variables. The focus of the Fiedler’s model is to detect the leadership style and the situation correctly, so the most effective match can be decided.

Contemporary Leadership

The emerging dimensions of technology, communication, human relations, and social interaction force new leader figures and new ways of leading people. Consequently, some leadership styles that are recently introduced are charismatic/visionary leadership, leader-member exchange theory, transformational and transactional leadership , servant leadership, team leadership, and and authentic leadership.

One of the contemporary Leader-member exchange theory (LMX) . LMX suggests that leaders create in- groups and out-groups that they decide at the beginning of their relationship with their subordinates or followers. Charismatic leadership is inspiring and motivating people beyond what they would normally do.

Transformational leaders on the other hand articulate a vision, transform the thinking of individuals, bring out their creativity, engage in the organizational atmosphere, and empower followers to accomplish goals, and moreoever reach their full potential. Transformational leadership is explained in four I’s: charisma or idealized influence; inspirational motivation; intellectual stimulation; and individualized consideration.

Transcational leadership is employed where accomplishment of organizational goals is the primary focus and the leader is fixed on the results. Transformational and transactional leadership apart in the main motive behind approaching the individuals or employees. For the transactional leader the motive is the achievement of the organizational goals, where as for the transformational leader it is getting the individuals to their fullest potential through inspiration and individual consideration.

Leading Diversity

Diversity is acknowledging and understanding of differences: gender, age, background, cultural values, physical condition, nationality, religion, race, sexual orientation, language, skills, and personality. The pressure of increasing mobility of people of different skills and cultural orientations around the world markets led business enterprizes, international organizations, governments, and non-profit organizations to place more emphasis on inclusion and equality. For today’s managers, leading or managing diversity successfully is a key component of competitive advantage as it is for effective accomplishment of goals especially in international business settings.

A diversified work place is a blend of multi- characteristics possessed by the members of a business organization. Hence, a diversified work place is: multi- generational; composed of a variety of backgrounds, cultures, languages, and ideologies as well as religions; covers different ethnic groups; minorities, under- represented and disadvantaged groups; and diversified gender groups.

Motivation in the Work Place

Motivation is a drive to be willing to perform a task, take an action, or achieve a goal usually for a desired or expected outcome. Motivation has been associated with high organizational performance. Motivation is attached to two descriptive factors: the influential factors and the level of individual motivation is based on the interpretation of behaviors; motivation is based on individuals. The motivation process starts with the needs that change by individuals and circumstances. Because all individuals have needs of this or that kind, motivation is a basic tool for all managers to create a happy and efficient work place. The process continues with the actions towards the fullfillment of the needs by the person, others, and most importantly by managers. The result of these actions are satisfactions and rewards either intrinsicly from within the person or extrinsicly from outside.

Perspectives on Motivation

Motivation has been explained from different perspectives with a different focus. Thus, motivational approaches and tools in the work place are grouped: by content and by process; by chronology as early and contemporary approaches. In this chapter we explained motivation from content and process perspectives.

Content perspectives focus on peoples’ needs that result in certain behaviors and actions for fulfilling them. A tip for managers by the content perspectives on motivation is that they should try to understand employees’ needs, how to structure managerial and organizational tools to fulfil them, and what type of behaviors to expect as a result of meeting employees’ needs. Some important content perspectives on motivation Hierarchy of Needs, ERG theory, Two-Factor approach, and Acquired Needs theory.

Process perspectives focus on peoples’ behaviors which may be affected by environmental factors besides needs. The important point for managers is how to cause employees to repeat or not repeat those behaviors. Some known process perspectives to motivation are Equity theory, Expectancy theory, and Goal setting.