2.1 Leadership Theories Final (chapter)

CHAPTER 1 LEADERSHIP THEORIES Everyone likes progress, but no one likes change. That’s why leadership is hard.

Geoffrey Garret, Dean, Wharton School Introduction – Learning outcomes  LO 1 Students will get familiar with various approaches to leadership: from focus on the leadership personality through emphasis on the dynamics of the leader-followers relationship to a multi-layered approach taking into account various context factors  LO 2 Students will understand how in the process of globalization the focus in leadership studies has shifted towards national level leadership studies as well as global leadership competences identification  LO 3 Students will be aware of some interrelations between culture and leadership and implications for theoretical analyses and practice in a global context  LO 4 Students will increase self-awareness of their own culture profile in the framework of selected cross-cultural leadership theories

Chapter 1 at a glance 1.1. Leader-focused theories: trait theory 1.2. Relationship-focused theories: transactional leadership, transformational leadership, followership 1.3. Context-focused theories: contingency leadership theories 1.4. Leadership and culture context: towards global leadership Leadership is defined by Robbins and Judge as “the ability to influence a group toward the achievement of a vision or set of goals” (Robbins & Judge, 2013, p. 368). There are two primary sources of this influence: formal, e.g. managerial rank, and informal, e.g. group dynamics and interpersonal relationships. Irrespective of the source, leadership involves interaction between leader and followers which takes place in, and therefore is modified by, a specific context. Cultural factors are a vital aspect of this context, especially in an international environment.

A variety of leadership theories has arisen from the efforts to explain the nature and mechanics of leadership. Some of the most prominent ones are depicted in Figure 1.1.

Figure 1.1 Leadership framework

Context – Contingency Leadership Theories Interaction Leader Trait Theory

Follower Transactional/ Transformational Leadership

Followership

Cultural Factors – Culture Leadership Theories

Throughout this chapter we will briefly examine the characteristics of these theories.

1.1. Leader-focused theories One of the biggest academic disputes about leadership is whether leaders are born or made.

The first theories on leadership argued that it is predominantly innate, rather than being developed by learning. The trait theory (also known as the qualities approach) focuses on the person in the job and not on the job itself. It states that leadership “consists of certain inherited characteristics, or personality traits, which distinguish leaders from their followers” (Mullins, 2010, p. 375). This theory attempts to identify specific characteristics associated with leaders’ success. These characteristics can be physical, mental or related to the personality of the leader. The studies supporting the trait theory tried to comprise a list of traits of successful leaders. For example, Ghiselli reported several personality traits associated with leader effectiveness (Ghiselli, 1963). He studied leaders at different levels in organizations and examined differences in their personality traits.

Other theories which focus on the leader are the great man theory, which is very similar to the trait theory, and some behavioural theories which implied that leaders can be trained.

1.2. Relationship-focused theories

The leader-focused theories share one common shortcoming though – all of them have a onesided approach towards leadership. Figure 1.1. clearly exemplifies that leadership is an interaction between two parties – leaders and their followers. According to Kellerman, “followers are subordinates who have less power, authority, and influence” who in most cases follow the rules and behave according to expected standards of behaviour (Kellerman, 2008).

Followership consists of emotional and rational engagement with someone in a higher formal or informal position. Followership can be defined as “the capacity or willingness to follow a leader” (Merriam Webster Online Dictionary, 2018). Some of its sources are trust, dedication, communication, and skills. Followers add value to an organisation as collaborators with leaders in achieving organisational success.

The focus on the relationship between the leader and the follower has two main aspects – transactional and transformational. Burns (1978) and Bass (1985) make a clear distinction between these two concepts. Transactional leadership is based on legitimate authority within the bureaucratic structure of the organisation. The transactional approach uses the pathgoal concepts in order to clarify goals and objectives, work task and outcomes, and organisational rewards and punishments. Transformational leadership, by contrast, is a process of engendering higher levels of motivation and commitment among followers (Mullins, 2010). A comparison between transactional and transformational leaders is shown in Table 1.1.

Table 1.1 Characteristics of transactional and transformational leaders Transactional Leader Transformational Leader Contingent Reward: Contracts exchange of rewards Idealized Influence: Provides vision and sense of for effort, promises rewards for good mission, instils pride, gains respect and trust performance, recognizes accomplishments Management by Exception (active): Watches and Inspirational Motivation: Communicates high searches for deviations from rules and expectations, uses symbols to focus efforts, expresses standards, takes correct action important purposes in simple ways Management by Exception (passive): Intervenes Intellectual Stimulation: Promotes intelligence, only if standards are not met rationality, and careful problem solving Laissez-Faire: Abdicates responsibilities, avoids Individualized Consideration: Gives personal attention, making decisions treats each employee individually, coaches, advises Source: Organizational behavior by S. P. Robbins, & T. A. Judge, 2013, Boston: Pearson, p. 383.

According to Bass and Avolio (1994) transformational leadership consists of four components: 1/ idealised influence – the charisma of the leader, and the respect and admiration of the followers; 2/ inspirational motivation – the behaviour of the leader which provides meaning and challenge to the work of the followers; 3/ intellectual stimulation –

leaders who solicit novel approaches to work performance and creative problem solutions from followers and 4/ individualised consideration – leaders who listen and give special concern to the growth and developmental needs of their followers.

The sole purpose of transformational leadership is to empower followers to keep developing themselves and improve their performance beyond their expectations, thus revealing their true potential. This leads to qualitative transformations of the organizational processes and better fulfilment of the organizational goals. Nevertheless, transformational leadership cannot always succeed in its objectives due to the influence of different contextual factors.

1.3. Context-focused theories While the trait theory focused on the role of the leader personality irrespective of the follower ability and motivation, or the interaction between the leader and followers, contingency theories and situational theories adopted a new approach to the study of leadership, emphasizing the importance of the situation, that is context (see Figure 1.1). These theories argue that the follower competence and motivation greatly influence leadership styles.

Fiedler’s contingency theory (1967) hypothesizes that leadership effectiveness largely depends on whether context, or the situation, favours or hinders the performance of followers, thus forcing leaders to adapt an appropriate style. Context is characterized by three key contingencies: leader-member relations, task structure and position power. Leader-member relations are described as the extent to which followers trust and respect leaders; task structure as the degree to which tasks are outlined for followers; and position power as the degree of authority the leader holds.

According to this theory, the situation is favourable, that is, the leader is in more control and has a greater influence, when there is a good leader-member relation, a highly structured task, and high leader position power. In any other case leaders needs to adapt their styles to improve the situation and boost their impact. For example, in case of low ability or motivation of followers, but with fairly good relations between the leader and followers, the leader needs to embrace a task-oriented leadership style, that is, describe and break down the task in more detail, and offer more guidance. In case of good ability and motivation of followers, but low

trust in the leader, the leader has to embrace a relations-oriented leadership style and work on improving leader-member relations to change the situation.

Hersey and Blanchard theory (1969) outlined four distinctive leadership styles: directing, coaching, supporting, and delegating. A directing style is the result of a situation in which followers have low competence but high commitment, for example, new employees, and consequently they need more direction. Leaders need to offer less direction to followers who have increased their competence, in this way leaders only support their followers or coach them to help boost their commitment or performance. With delegation minimum supervision is required.

Along with Fiedler’s contingency theory and Hersey and Blanchard theory, other contingency theories were developed in the 1970s, such as House’s path-goal theory, House and Mitchell’s path-goal theory, Vroom-Yetton contingency model, all of them regularly updated and revised over the years, greatly extending the range and scope of contingency and situational theories.

1.4. Leadership and Culture Context: towards global leadership Leadership theories have widely benefited from the development of intercultural communication and intercultural business studies. The work of E. Hall, G. Hofstede, F. Trompenaars (Chapter I. 2.) has greatly influenced the understanding of the role of culture at national and organizational level and subsequently the appreciation of culture dimensions, culture patterns and culture context in the study of culture-leadership relation.

Leadership and GLOBE’s Culturally Endorsed Leadership Theory (CLT) An example of study of the cultural context and its relation to leadership studies is the Culturally Endorsed Leadership Theory. Building up on Hofstede’s work, Robert House led an unprecedentedly large-scale multi-country research project, called “Global Leadership and Organizational Behavior Effectiveness” (GLOBE). The scope, findings and implications of the GLOBE project (2004, 2014) are too big to be presented in this chapter without oversimplifying. Although the GLOBE project, its method and findings have received criticism, it is still the most influential study of leadership across countries.

The GLOBE team understood leadership as “the ability to motivate, influence, and enable individuals to contribute to the objectives of organizations of which they are members�

(House et al., 2004, p. xxii). GLOBE study (2004) identified several cultural dimensions: performance orientation, assertiveness, future orientation, humane orientation, institutional collectivism, in-group collectivism, gender egalitarianism, power distance, uncertainty avoidance. For each of the nine culture dimensions GLOBE researchers were able to measure and validate country scores, as well as country cluster scores. These scores were identified as the current value (as it is) and as the values the respective country aspires towards (should be scores), i.e. the team discriminated between culture values and culture practices. There were some clear correlations, for example, between high performance-oriented societies and economic success. Studying the relationship between leadership and culture, GLOBE (2004) research team identified cultural dimensions that can best predict desirable leadership traits.

For example, societies that put high value on high performance orientation approve of leaders who are charismatic, participative and team-oriented.

The research team examined leadership at the level of national culture, hypothesizing that based on their cultural values, beliefs and assumptions, members of different societies may have differing expectations from their leaders. The research resulted in the identification of six global leadership dimensions which constitute features that are perceived as culturally enhancing or impeding effective leadership (see Table 1.2).

Table 1.2 Global leadership dimensions Charismatic/Value-Based Leadership

Team-Oriented Leadership

Participative Leadership

Humane-Oriented Leadership Autonomous Leadership

Self-Protective Leadership

Reflects the ability to inspire, motivate, and expect high performance outcomes from others based on firmly held core values. It includes the following six subscales: visionary, inspirational, self-sacrifice, integrity, decisive and performance oriented Emphasizes effective team building and implementation of a common purpose or goal among team members. It includes the following five subscales: collaborative team orientation, team integrator, diplomatic, malevolent (reverse scored), and administratively competent Reflects the degree to which managers involve others in making and implementing decisions. It includes two primary leadership dimensions: participative and autocratic (reverse scored) Reflects supportive and considerate leadership and includes compassion and generosity. This leadership dimension includes two primary leadership dimensions: modesty and humane orientation Refers to independent and individualistic leadership attributes. It is measured by a single primary leadership dimension: autonomous leadership, consisting of independence, individualistic, autonomous, and unique attributes Focuses on ensuring the safety and security of the individual and group through status enhancement and face saving. It includes five primary leadership dimensions: self-centred, status conscious, conflict inducer, face saver and

procedural Source: https://globeproject.com/study_2004_2007#findings (adapted)

In 2014, in the second phase of their work, the GLOBE team focused on CEO leadership behaviours and extended understanding of leadership, defining it as “the ability of an individual to influence, motivate, and enable others to contribute toward the effectiveness and success of the organizations of which they are members” (House et al., 2014, p. 17).

The main question addressed was how national culture influences the kinds of leadership expected in society. It was hypothesized that “societal culture values would influence both societal leadership expectations and CEO leadership behavior directly” (GLOBE, 2014).

However, the study found out that values themselves do not directly predict behaviours.

Rather “cultural values indirectly predict behavior through the manifestation of culturally endorsed leadership expectations”. Leaders learn what is expected in a culture and operate in a “socially desirable” way. For instance, cultures that value performance orientation expect leaders to be participative, and it was exactly these leaders that showed some of the highest levels of participative leadership.

Other studies have provided additional insights on cultural clusters and leadership effectiveness. Richard Lewis (2018), for instance, presented his well-known model from 1990s, the so-called LMR model around three cultural clusters: linear-active; multi-active and reactive. Not only does his triangle model visualize how countries are situated along the spectrum but it also refers to the inside of the triangle where individuals can be the product of different cultural norms, thus making allowances for the complex shaping of an individual leader’s behaviour. In the latest edition of his book he provides valuable suggestions to leaders for practical strategies to embrace differences and work successfully across increasingly diverse business cultures.

The comparative leadership studies subfield has also contributed to a better understanding of individual culture’s conceptualization of leadership. These studies have gone beyond the Western-centric view, focusing on various cultural contexts, e.g. McManus and Perruci (2015) outline Western, Latin American, Islamic, African, Buddhist and East Asian contexts in their comparative studies.

Many scholars believe that the intensification of globalization in recent years has led to a steep learning curve among the participants in the leadership framework and as a result of the interaction-induced changes in the cultural practices we can foresee changes in our own norms, beliefs and values.

1.5. Conclusion The approach to leadership has evolved from leader-centric models (trait and behavioural models) through the dynamics of leader-followers relationships (transactional and transformational leadership models) to one that takes into account the context to a greater degree (situational leadership, contingency leadership theories).

With the process of globalization there have been several new approaches to leadership: 1. comparative leadership studies - national cluster models (GLOBE 2004, GLOBE 2014, R. Lewis LMR model); 2. a greater focus on the cultural context of leader and followers with view of the increasingly culturally diverse teams; 3. the leader-centric model has been revisited, taking into account all the complex factors of individual culture’s shaping in a period of globalization, dynamic environment and dramatic changes (digitization, disruptive technological changes, global climate and political concerns), with view of identifying universal global leadership competences and metaskills.

The evolution of approaches to leadership and changes of emphasis has been summarized in Table 1.3.

Table 1.3 Overview of traditional and modern leadership theories 1880s - 1920s 1930s - 1950s

Focus on the leader Focus on the leader-goal

 

1960s

Focus on the context of leader–followers Focus on the leader– follower relations



1970 - 1980s

1990s - present

Emphasis on culture norms/value

Present

Revisiting the framework/ focus on all components, taking into account the

       

Leader Traits Behavioural theories: how to motivate followers in pursuit of a goal Situational leadership; contingency theories Leadership styles related to the quality of the relations: power wielding, transactional, transformational Followership Globalization Comparative leadership studies Global competencies Transactional and participative global leadership Transformational global leadership Crisis and global leadership

Present

dynamics of the interaction and the ongoing global changes Focus on the leader’s individual culture and the required global skills set in a very dynamic context and culturally diverse teams



Developing a new global mindset

Source: Gama Perruci. “Global Leadership. A Transnational Perspective”, Routledge 2019, NY (adapted and extended)

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Contact details Diana Miteva, University of Economics, Varna, e-mail: diana_miteva@ue-varna.bg Kristana Ivanova, University of Economics, Varna, e-mail: kristana_ivanova@ue-varna.bg Petar Petrov, University of Economics, Varna, e-mail: p.k.petrov@ue-varna.bg