LEADERSHIP

• What is leadership

Leadership is the ability of an individual or group of people to influence and lead followers or members
of an organization, company or team.

• Leadership characteristics

1. Leaders must have followers: Whom to lead? Leadership cannot exist without a group of followers.
One person is not called a leader when he only leads himself.

2. Leadership is a working relationship between a leader and his followers: the leader is the one who
actively participates in all the activities of the group.

3. The purpose of leadership is to achieve some common goal: leadership is done to influence people in
such a way that their work helps achieve organizational goals.

4. A leader influences people voluntarily: leadership does not influence people by force and coercion. A
leader shows the way and leads people by example to influence.

5. Leadership is a continuous and dynamic process: It is not a one time thing that needs to be done
continuously to achieve organizational goals and it has to be done keeping in mind the dynamic
environment.

6. Leadership is a power relationship: power and influence are unequally distributed. The person who
has power over the other members of the group becomes the leader. The leader is the center of the
group's power structure.

• Factors affecting leadership

1. Organizational Culture: Organizational culture plays a key role in defining leadership styles. A
supportive and empowering culture fosters participative leadership, fosters open
communication and joint decision-making. In contrast, a hierarchical culture can lead to a more
autocratic leadership style, centralizing decision-making authority with the leader.

2. Team dynamics: Team dynamics also influence leadership approaches. A cohesive and aligned
team can benefit from a democratic leadership style where collaboration and mutual respect
drive decision-making. However, in teams facing conflict, a more directive leadership style may
be necessary to restore harmony and provide clear direction.
 3. Corporate Values: Corporate values serve as a moral compass that guides the actions of leaders.
Effective leaders align their style with these core values, instilling trust and ethical decision-
making among their team members.

4. Cultural factors: Leaders operating in different cultural environments must be sensitive to

cultural nuances. Different cultures may value different leadership attributes and communication
styles. Effective leaders adapt their leadership approach to match the cultural norms and
expectations of the workforce.

5. Communication channels: Communication channels significantly affect leadership effectiveness.

Leaders who maintain open communication and encourage feedback often adopt a democratic
style and promote an inclusive work environment. Conversely, relying on top-down
communication can lead to a more autocratic approach, which reduces team engagement.

• Leadership versus management

1. Leadership is the virtue of leading people through encouraging them. Management is the process of
managing the activities of an organization.

2. Leadership requires followers’ trust in their leader. Unlike management, which needs a manager’s
control over his subordinates.

3. Leadership is the skill of influencing others while management is the quality of ruling.

4. Leadership requires the foresight of the leader, but leadership has a short-term vision.

5. In leadership, policies and guidelines are established, while in management, policies and procedures
are implemented.

6. Leadership is proactive. On the contrary, management is reactive in nature.

7. Leadership brings change. On the other hand, Management brings stability.

“A leader does not have to be a manager, but a manager must have most of the qualities of a leader”

• The importance of leadership

1. Directives: Leaders provide direction and ensure that individuals or teams work toward common
goals.
2. Inspiration: Effective leaders inspire and motivate others, fostering a sense of purpose and
commitment.

3. Collaboration: Leadership encourages teamwork and uses diverse skills for collective success.

4. Innovation: Leaders promote creativity and innovation, thereby promoting positive change in
organizations.

5. Problem solving: They navigate challenges and make informed decisions to overcome obstacles.

6. Organizational culture: Leaders shape a positive culture, influencing values, beliefs and behaviors.

7. Productivity: Effective leadership makes teams more efficient and productive.

8. Vision: Leaders articulate a compelling vision that connects individuals to a common goal.

9. Adaptability: Leadership involves adapting to change, ensuring resilience and growth.

10. Communication: Leaders facilitate clear and open communication, reduce misunderstandings and
promote transparency.

• Formal and informal leaders

Leaders exist in both formal and informal groups.

Formal authority is officially granted to the head of the organization, while informal authority is the
authority assigned to a senior employee in the organization. Formal authority is dependent on the
organization, while informal authority is dependent on the followers or employees of the organization.
They are known as formal leaders.

Informal leadership is when an individual does not have the official status of a group leader, but other
members of the group view them as a leader and see them as a guiding force. They often earn their
status as an informal leader by building strong relationships with the people around them and proving
through their actions that they are reliable and trustworthy.

• Leadership styles (Imp)

1. Autocratic leadership: Autocratic leadership, also known as authoritarian leadership, is

characterized by individual control over all decisions and little input from group members. These
types of leaders usually make decisions based on their own ideas and judgments and rarely take
advice from their followers. Autocratic leadership involves absolute, authoritative control over a
group.
  Advantages
i. Enables quick decision-making especially in stressful situations.
ii. It offers a clear chain of command or supervision
iii. It works well where strong and directive leadership is needed

 Disadvantages

i. Prevents group entry

ii. It damages morale and leads to resentment
iii. Ignores or undermines the creative solutions and expertise of subordinates

2. Democratic leadership: Democratic leadership, also referred to as participative leadership, is a

management style in which decision-making is shared among team members. Based on the idea
that everyone’s input is valuable and the whole, represented by the team, is more important
than any individual, this leadership style is an effective approach to organizing.

 Advantages
i. Encourages collaboration
ii. Including different opinions
iii. It leads to higher group engagement and productivity.

 Disadvantages
i. Decision making is slow.
ii. Minority opinion is ignored.
iii. Multiple opinions can lead to confusion.

3. Laissez-Faire Leadership: Laissez-faire leadership, also known as delegative leadership, is a type

of leadership style in which leaders take their hands off and allow group members to make
decisions. Researchers have found that this is generally the leadership style that results in the
lowest productivity among group members. There are also certain settings and situations where
laissez-faire leadership might be most appropriate

Let’s look at it

 Advantages
i. It promotes personal growth.
 ii. It supports innovation.
iii. Enables faster decision making.

 Disadvantages
i. Lack of clarity of roles
ii. Poor group involvement
iii. Passivity

• Leadership continuum

The leadership continuum was originally written in 1958 by Tannenbaum and Schmidt. Their work
suggests a continuum of possible leadership behaviors available to a manager, along which many
leadership styles can be placed. The continuum represents a range of actions related to the degree of
authority a manager exercises and the latitude non-managers have in making decisions. A wide variety of
leadership styles were depicted on a continuum between the two extremes of autocratic and free rein.
However, neither extreme is absolute, and authority and freedom are never without limits.

According to this approach, four main leadership styles have been identified:

1. Says: A manager identifies a problem, chooses a decision, and communicates it to subordinates.

Subordinates are not participants in the decision-making process, and the manager expects them to
implement his decisions as soon as possible.

2. Sells: Only the manager chooses the decision, but understands that there will be some resistance from
those who will face the decision, so he tries to convince them to accept it.

3. Consultation: The manager identifies the problem, but does not make the final decision. The problem
is presented to the subordinates and the subordinates propose a solution.

4. Joins: The manager defines the limits within which the subordinates can take decisions and then
makes the final decision together with the subordinates.

The following factors should be considered when choosing a style manager:

1. Strengths in a manager: A leader’s behavior is influenced by his personality, background, knowledge

and experience

2. Forces in the subordinate: The personality of the subordinates and their expectations from the leader
influence their behavior.

3. Situational Forces: Environmental and general situations also influence leader behavior.
• LIKERT’S System 4 Management

Rensis Likert and his colleagues studied the patterns and styles of managers at the University of Michigan
in the US for three decades and identified a fourfold model of management systems.

The four management system systems or four leadership styles identified by Likert are:

System 1 – Exploitative Authority: Responsibility rests in the hands of people at higher levels of the
hierarchy. The superior lacks confidence and trust in subordinates.

Decisions are imposed on the subordinates and they do not feel free to discuss work with the superior at
all. There is very little teamwork or communication and motivation is based on threats.

System 2 – Benevolent Authority: Accountability lies at managerial levels, but not at lower levels of the
organizational hierarchy. The superior has condescending trust and confidence in the subordinates
(master-servant relationship).

Here again subordinates do not feel free to discuss work related matters with their superior. There is
very little teamwork or communication and motivation is based on a reward system.

System 3 – Consultative: Accountability is widely spread throughout the organizational hierarchy. The
superior has substantial but not complete trust in the subordinate.

There is some discussion between the supervisor and subordinates about work-related matters. There is
a fair amount of teamwork and communication both vertically and horizontally. Motivation is based on
rewards and involvement in work.

System 4 – Participative: Responsibility for achieving organizational goals is extended throughout the
organizational hierarchy.

There is a high degree of trust that a superior has in his subordinates. There is a high level of teamwork,
communication and participation.

According to Rensis Likert, the closer an organization’s behavioral characteristics are to system 4
(participative), the more likely it will lead to long-term improvements in employee turnover and high
productivity, low scrap, low costs, and high earnings, if the organization wants to achieve optimal
efficiency, then the ideal system
• Blake and Motion Management Grid

Robert Blake and Jane Mouton (1960s) proposed a graphical representation of leadership styles
through a management grid (sometimes called a leadership grid).

The grid represented two dimensions of leader behavior, concern for people (meeting and prioritizing
people’s needs) on the y-axis and concern for production (keeping to tight schedules) on the x-axis, with
each dimension ranging from low (1) to high. (9), creating 81 different positions in which the leader’s
style can fall.

The five resulting leadership styles are as follows:

Impoverished Management (1, 1): Managers with this approach are modest on both dimensions and
make minimal effort to get work done by subordinates.

The manager has little interest in employee satisfaction and work deadlines, as a result of which
disharmony and disorganization prevail in the organization. Leaders are characterized as ineffective,
while their activities are focused only on maintaining employment and seniority.

Task Management (9, 1): Also called dictatorial or perish style. Here, leaders care more about production
and care less about people. The style is based on McGregor’s Theory X.

The needs of the employees are not taken care of and are only a means to an end. Managers believe
that efficiency can only be achieved by properly organizing work systems and eliminating people
whenever possible.

Such a style can definitely increase the performance of the organization in the short term, but due to
strict policies and procedures, high labor turnover is inevitable.

Middle-of-the-Road (5, 5): This is essentially a compromise style where the leader tries to balance the
goals of the company with the needs of the people.

The leader does not push the boundaries of success, resulting in average organizational performance.
The needs of employees and production are not fully met here.

Country Club (1, 9): This is a collegial style characterized by low role and high people orientation, where
the leader pays thoughtful attention to people’s needs and provides them with a friendly and
comfortable environment.
Managers feel that treating employees this way will lead to self-motivation and find people who work
hard on their own. However, low task focus can hamper production and lead to questionable results.

Team Management (9, 9): A style characterized by high people and a focus on tasks, based on
McGregor’s Theory Y and was identified as the most effective style according to Blake and Mouton.

Leaders feel that empowerment, commitment, trust and respect are key elements in creating a team
atmosphere that automatically results in high employee satisfaction and production.

• Theory of situational leadership – Fred Fiedler

Fred E. Fiedler’s contingency theory of leadership effectiveness was based on studies of a wide range of
group effectiveness and focused on the relationship between leadership and organizational
performance. This is one of the first theories of situational leadership that Fiedler stated. According to
him, if an organization is trying to achieve group effectiveness through leadership, then there is a need
to assess the leader according to the basic trait, evaluate the situation the leader faces and create the
right match between them.

A leader's trait

To assess leader attitudes, Fiedler developed a “least preferred coworker” (LPC) scale in which leaders
are asked about the person they least like to work with. The scale is a questionnaire consisting of 16
items that are used to express a leader’s basic attitude towards others. Items on the LPC scale are
pleasant/unpleasant, friendly/hostile, rejecting/accepting, unenthusiastic/enthusiastic, tense/relaxed,
cold/warm, helpful/frustrating, cooperative/uncooperative, supportive/hostile,
argumentative/harmonious, efficient/ineffective, gloomy /cheerful, distant/close, boring/interesting,
confident/hesitant, open/guarded. Each item on the scale is assigned a single rating from one to eight
points, with eight points indicating the most favorable rating.

Friendly Unfriendly

87654321

Fiedler states that leaders with high LPC scores are relationship oriented and those with low scores are
task oriented. Leaders with high LPC scores derived the most satisfaction from interpersonal
relationships, and therefore rated their least preferred co-workers relatively favorably. These leaders only
think about accomplishing the task after the relationship need is well satisfied.

On the other hand, leaders with low LPC scores derived satisfaction from task completion and goal
achievement, and only after task completion do these leaders work to establish good social and
interpersonal relationships.
Situational factor

According to Fiedler, the leader’s behavior depends on the favorableness of the leadership situation.
Three factors together determine how favorable the situation is for the leader. These are:

Situational factor

According to Fiedler, the leader’s behavior depends on the favorableness of the leadership situation.
Three factors together determine how favorable the situation is for the leader. They are: Leader-member
relationships, task structure, and position power.

Using these three variables, Fiedler constructed eight combinations of group situations. These
combinations were used to identify the leader’s style.

This number will be present in PowerPoint.

Leadership effectiveness

Leader effectiveness is determined by the interaction of the leader’s behavioral style and the favorability
of situational characteristics. The most favorable situation is when leader-member relations are good,
the task is highly structured, and the leader has a strong position.

Contingency model research has shown that task-oriented leaders are more effective in highly favorable
(1, 2, 3) and highly unfavorable situations (7, 8), while relationship-oriented leaders are more effective in
moderately favorable situations (4, 5, 6 ).

Task-oriented leaders often display task-oriented behavior in unfavorable or moderately favorable

situations, but exhibit relationship-oriented behavior in favorable situations.

• Home Path Goal Theory

According to House’s path-goal theory, a leader’s effectiveness depends on several factors contingent on
employees and the environment and certain leadership styles. All this is explained in Figure 1 below:
Leadership styles

The four leadership styles are:

Directive: This is where the leader provides direction, lets subordinates know what is expected of them,
sets performance standards for them, and controls behavior when performance standards are not met.

Supportive: A leader is friendly to subordinates and shows a personal interest in their needs, welfare and
well-being. This style is the same as people-oriented leadership.

Participative: The leader believes in group decision-making and shares information with subordinates.

Achievement Orientation: Leaders set challenging goals and encourage employees to achieve their peak
performance.

Random events

The theory is that each of these styles will be effective in some situations but not in others.

He further states that the relationship between leader style and effectiveness depends on the following
variables:

Employee characteristics: These include factors such as employee needs, locus of control, experience,
perceived ability, satisfaction, willingness to leave the organization, and anxiety. For example, if followers
are highly incompetent, a directive leadership style may be unnecessary; instead, a supportive approach
may be more appropriate.

Characteristics of the work environment: These include factors such as task structure and team dynamics
that are beyond the employee’s control. For example, for employees performing simple and routine
tasks, a supportive style is much more effective than a directive one. Similarly, the participative style
works much better for non-routine tasks than routine ones.
Conclusion

This theory consistently reminds leaders that their primary role as a leader is to help subordinates define
their goals and then assist them in achieving those goals in the most effective and efficient manner
possible.

This theory provides leaders with a map to increase the satisfaction and performance of subordinates..

• Transactional and transformational leadership

Transactional leadership involves motivating and directing followers primarily through appeals to their
self-interests. The power of transactional leaders comes from their formal authority and responsibility in
the organization.

The main goal of the follower is to obey the instructions of the leader. The style can also be referred to as
“narrative style”.

Leaders believe in motivation through a system of rewards and punishments.

If the subordinate does what he wants, reward will follow, and if he does not follow the leader’s wishes,
punishment will follow. Here, an exchange takes place between a leader and a follower to achieve
routine performance goals.

Transactional leaders

i. Set goals for subordinates and motivate them to achieve those goals.

ii. Establish work standards and evaluate subordinates’ performance against those work
standards.

iii. Offers rewards to subordinates for their good performance.

Transformational leadership

Transformational leadership can be found at all levels of the organization: teams, departments, divisions,
and the organization as a whole.

Such leaders are visionary, inspiring, courageous, risk-taking and thoughtful. They have a charismatic
appeal. But charisma alone is not enough to change the way an organization works.

To bring about big change, transformational leaders must exhibit the following four factors:

Inspirational Motivation: The foundation of transformational leadership is promoting a consistent vision,

mission, and set of values to members.

Intellectual stimulation: Such leaders encourage their followers to be innovative and creative. They
encourage new ideas from their followers and never publicly criticize them for mistakes they make.

Idealized Influence: Believes in the philosophy that a leader can influence followers only if he practices
what he preaches. Leaders act as role models that followers try to emulate.

Individual consideration: Leaders act as mentors to their followers and reward their creativity and
innovation. Followers are treated differently based on their talent and knowledge. They are empowered
to make decisions and are always provided with the necessary support to implement their decisions.

• TRACKING

Followership theory focuses on understanding the role and behavior of followers in the context of
leadership. It emphasizes that effective leadership is not only about the leaders themselves, but also
about the followers and their active participation in the process.
Characteristics of good followers

1. Commitment: Good followers are committed to the goals and values of the team or
organization and demonstrate commitment to a common purpose.

2. Accountability: They accept responsibility for their tasks and actions, ensure
accountability and contribute to the overall success of the group.

3. Effective Communication: Communicate openly and constructively, provide feedback

and express ideas to contribute to the improvement of the team.

4. Adaptability: Good followers are adaptable and open to change, able to navigate
uncertainties and adapt to evolving circumstances.

5. Collaboration: Good followers work well in a team, recognize the importance of

collaboration, and value the contributions of others.

6. Initiative: They take initiative in their roles, looking for opportunities to contribute and
improve processes without always waiting for explicit instructions.

7. Integrity: Good followers demonstrate integrity by upholding ethical standards and

acting honestly and transparently.

8. Loyalty: They are loyal to the team or organization, supporting its mission and goals even
in challenging times.
CASE STUDY ON ADAPTIVE LEADERSHIP : Microsoft under Satya Nadella

Background:

Satya Nadella, the CEO of Microsoft since 2014, is recognized for his adaptive leadership style, steering
the company through a significant transformation.

Key Leadership Traits:

Cultural Transformation:

Nadella initiated a cultural shift within Microsoft, moving from a more rigid and hierarchical culture to
one that values collaboration, innovation, and a growth mindset.

Embracing Change:

Recognizing the evolving technology landscape, Nadella embraced change by shifting Microsoft’s focus
towards cloud computing and services, moving away from a predominantly product-centric approach.

Inclusive Leadership:

Nadella promotes diversity and inclusion, fostering an environment where different perspectives
contribute to innovation. He has actively supported initiatives to increase diversity within the
company.

Cloud Computing Emphasis:

Under Nadella’s leadership, Microsoft has placed a strong emphasis on cloud computing, with the
success of products like Azure, transforming Microsoft into a major player in the cloud services
industry.

Strategic Acquisitions:

Nadella orchestrated strategic acquisitions, such as LinkedIn and GitHub, to broaden Microsoft’s
portfolio and enhance its position in the market.

Outcomes:

Financial Success:
Microsoft’s shift to cloud services and a more collaborative culture under Nadella’s leadership
contributed to significant financial success, with a substantial increase in market value.

Innovation and Agility:

The company became more innovative and agile, adapting to changing industry trends and staying
competitive in rapidly evolving markets.

Increased Stock Value:

Microsoft’s stock value reached record highs under Nadella’s leadership, reflecting investor confidence
in the company’s strategic direction.

Relevance in the Tech Industry:

Microsoft regained relevance and influence in the tech industry, with a focus on cutting-edge
technologies and services.

Satya Nadella’s adaptive leadership at Microsoft demonstrates the importance of cultural

transformation, embracing change, and staying agile in the face of evolving industry dynamics.