Leading People Within Organizations PDF

Leading People Within Organizations Leadership defined.. Leadership may be defined as the act of influencing others to work toward a goal. Leaders exist at all levels of an organization. Some leaders hold a position of authority and may utilize the power that comes from their position, as w...

Leading People Within Organizations Leadership defined.. Leadership may be defined as the act of influencing others to work toward a goal. Leaders exist at all levels of an organization. Some leaders hold a position of authority and may utilize the power that comes from their position, as well as their personal power to influence others. They are called formal leaders. In contrast, informal leaders are without a formal position of authority within the organization but demonstrate leadership by influencing others through personal forms of power. Taking on the Pepsi Challenge: The Case of Indra Nooyi She is among the top 100 most influential people according to Time magazine’s 2008 list. She is also number 5 in Forbes’s “Most Influential Women in the World” (2007), number 1 in Fortune’s “50 Most Powerful Women” (2006), and number 22 in Fortune’s “25 Most Powerful People in Business” (2007). The lists go on and on. To those familiar with her work and style, this should come as no surprise: Even before she became the CEO of PepsiCo Inc. (NYSE: PEP) in 2006, she was one of the most powerful executives at PepsiCo and one of the two candidates being groomed for the coveted CEO position. Born in Chennai, India, Nooyi graduated from Yale’s School of Management and worked in companies such as the Boston Consulting Group Inc., Motorola Inc., and ABB Inc. She also led an all-girls rock band in high school, but that is a different story. What makes her one of the top leaders in the business world today? To start with, she has a clear vision for PepsiCo, which seems to be the right vision for the company at this point in time. Her vision is framed under the term “performance with purpose,” which is based on two key ideas: tackling the obesity epidemic by improving the nutritional status of PepsiCo products and making PepsiCo an environmentally sustainable company. She is an inspirational speaker and rallies people around her vision for the company. She has the track record to show that she means what she says. She was instrumental in PepsiCo’s acquisition of the food conglomerate Quaker Oats Company and the juice maker Tropicana Products Inc., both of which have healthy product lines. She is bent on reducing PepsiCo’s reliance on high-sugar, high-calorie beverages, and she made sure that PepsiCo removed trans fats from all its products before its competitors. On the environmental side, she is striving for a net zero impact on the environment. Among her priorities are plans to reduce the plastic used in beverage bottles and find biodegradable packaging solutions for PepsiCo products. Her vision is long term and could be risky for short-term earnings, but it is also timely and important. Those who work with her feel challenged by her high-performance standards and expectation of excellence. She is not afraid to give people negative feedback—and with humor, too. She pushes people until they come up with a solution to a problem and does not take “I don’t know” for an answer. For example, she insisted that her team find an alternative to the expensive palm oil and did not stop urging them forward until the alternative arrived: rice bran oil. Nooyi is well liked and respected because she listens to those around her, even when they disagree with her. Her background cuts across national boundaries, which gives her a true appreciation for diversity, and she expects those around her to bring their values to work. In fact, when she graduated from college, she wore a sari to a job interview at Boston Consulting, where she got the job. She is an unusually collaborative person in the top suite of a Fortune 500 company, and she seeks help and information when she needs it. She has friendships with three ex- CEOs of PepsiCo who serve as her informal advisors, and when she was selected to the top position at PepsiCo, she made sure that her rival for the position got a pay raise and was given influence in the company so she did not lose him. She says that the best advice she received was from her father, who taught her to assume that people have good intentions. Nooyi notes that expecting people to have good intentions helps her prevent misunderstandings and show empathy for them. It seems that she is a role model to other business leaders around the world, and PepsiCo is well positioned to tackle the challenges the future may bring. Who Is a Leader? Trait Approaches to Leadership The earliest approach to the study of leadership sought to identify a set of traits that distinguished leaders from non-leaders. What were the personality characteristics and the physical and psychological attributes of people who are viewed as leaders? Because of the problems in measurement of personality traits at the time, different studies used different measures. By 1940, researchers concluded that the search for leadership-defining traits was futile. The traits that show relatively strong relations with leadership 1. Intelligence 1.1 General mental ability, which psychologists refer to as “g” and which is often called “IQ” in everyday language, has been related to a person’s emerging as a leader within a group. 1.2 People with high Emotional Intelligence demonstrate a high level of self awareness, motivation, empathy, and social skills. The psychologist who coined the term emotional intelligence, Daniel Goleman, believes that IQ is a threshold quality: It matters for entry- to high-level management jobs, but once you get there, it no longer helps leaders, because most leaders already have a high IQ. According to Goleman, what differentiates effective leaders from ineffective ones becomes their ability to control their own emotions and understand other people’s emotions, their internal motivation, and their social skills 2. Big 5 Personality Traits – Openness to Experience, Conscientiousness, and Extraversion 3. Self-Esteem 4. Integrity What other traits can you think of that would be relevant to leadership? Behavioral Approaches to Leadership 1. Task-oriented behaviors (sometimes called initiating structure) 2. People-oriented behaviors (also called consideration). Task-oriented leader behaviors involve structuring the roles of subordinates, providing them with instructions, and behaving in ways that will increase the performance of the group. Task-oriented behaviors are directives given to employees to get things done and to ensure that organizational goals are met. People-oriented leader behaviors include showing concern for employee feelings and treating employees with respect. People-oriented leaders genuinely care about the well-being of their employees, and they demonstrate their concern in their actions and decisions. Leader Decision Making 1. Authoritarian decision making, leaders make the decision alone without necessarily involving employees in the decision-making process. 2. Democratic decision making - employees participate in the making of the decision. 3. Laissez-faire decision-making leaves employees alone to make the decision. The leader provides minimum guidance and involvement in the decision. Which is the best: As with other lines of research on leadership, research did not identify one decision-making style as the best. It seems that the effectiveness of the style the leader is using depends on the circumstances. Leadership Assumptions about Human Nature Douglas McGregor’s Theory X and Theory Y. (The Human Side of Enterprise) Theory X: The main assumptions of Theory X managers are that employees are lazy, do not enjoy working, and will avoid expending energy on work whenever possible. For a manager, this theory suggests employees need to be forced to work through any number of control mechanisms ranging from threats to actual punishments. Because of the assumptions they make about human nature, Theory X managers end up establishing rigid work environments. Theory X also assumes employees completely lack ambition. As a result, managers must take full responsibility for their subordinates’ actions, as these employees will never take initiative outside of regular job duties to accomplish tasks. Theory Y: Theory Y paints a much more positive view of employees’ attitudes and behaviors. Under Theory Y, employees are not lazy, can enjoy work, and will put effort into furthering organizational goals. Because these managers can assume that employees will act in the best interests of the organization given the chance, Theory Y managers allow employees autonomy and help them become committed to particular goals. They tend to adopt a more supportive role, often focusing on maintaining a work environment in which employees can be innovative and prosperous within their roles. Examine your own leadership style. Which behaviors are you more likely to demonstrate? Which decision-making style are you more likely to use? Contingency Approaches to Leadership 1. Frederick Fiedler’s Contingency Theory - different people can be effective in different situations. 2. Situational Leadership by Kenneth Blanchard and Paul Hersey - argues that leaders must use different leadership styles depending on their followers’ development level. According to this model, employee readiness (defined as a combination of their competence and commitment levels) is the key factor 3. Path-goal theory by Robert House is based on the expectancy theory of motivation. The expectancy theory of motivation suggests that employees are motivated when they believe—or expect—that (a) their effort will lead to high performance, (b) their high performance will be rewarded, and (c) the rewards they will receive are valuable to them. According to the path-goal theory of leadership, the leader’s main job is to make sure that all three of these conditions exist. Thus, leaders will create satisfied and high-performing employees by making sure that employee effort leads to performance, and their performance is rewarded by desired rewards. The leader removes roadblocks along the way and creates an environment that subordinates find motivational. Four Leadership Styles Under Path-Goal Theory 1. Directive leaders provide specific directions to their employees. They lead employees by clarifying role expectations, setting schedules, and making sure that employees know what to do on a given work day. 2. Supportive leaders provide emotional support to employees. They treat employees well, care about them on a personal level, and they are encouraging. 3. Participative leaders make sure that employees are involved in the making of important decisions. 4. Achievement-oriented leaders set goals for employees and encourage them to reach their goals. Their style challenges employees and focuses their attention on work-related goals.  Situation Appropriate Leadership Style  When employees have high role ambiguity  When employees have low abilities Directive  When employees have external locus of control  When tasks are boring and repetitive Supportive  When tasks are stressful  When employees have high abilities  When the decision is relevant to employees Participative  When employees have high internal locus of control  When employees have high abilities Achievement-oriented  When employees have high achievement motivation  Decision-Making Styles Decide. The leader makes the decision alone using available information. Consult Individually. The leader obtains additional information from group members before making the decision alone. Consult as a group. The leader shares the problem with group members individually and makes the final decision alone. Facilitate. The leader shares information about the problem with group members collectively and acts as a facilitator. The leader sets the parameters of the decision. Delegate. The leader lets the team make the decision. Contemporary Approaches to Leadership 1. Transformational Leadership - lead employees by aligning employee goals with the leader’s goals. Thus, employees working for transformational leaders start focusing on the company’s well-being rather than on what is best for them as individual employees. Characteristics: a) Charismatic. Charisma refers to behaviors leaders demonstrate that create confidence in, commitment to, and admiration for the leader. Charismatic individuals have a “magnetic” personality that is appealing to followers. b) Use inspirational motivation, or come up with a vision that is inspiring to others. c) Use of intellectual stimulation, which means that they challenge organizational norms and status quo, and they encourage employees to think creatively and work harder. d) Use individualized consideration, which means that they show personal care and concern for the well-being of their followers 2. Transactional leaders use three different methods. a. Contingent rewards mean rewarding employees for their accomplishments. b. Active management by exception involves leaving employees to do their jobs without interference, but at the same time proactively predicting potential problems and preventing them from occurring. c. Passive management by exception is similar in that it involves leaving employees alone, but in this method the manager waits until something goes wrong before coming to the rescue. 3. Leader-Member Exchange (LMX) Theory Leader-member exchange (LMX) theory proposes that the type of relationship leaders have with their followers (members of the organization) is the key to understanding how leaders influence employees. Leaders form different types of relationships with their employees. 3.1 In high-quality LMX relationships, the leader forms a trust-based relationship with the member. The leader and member like each other, help each other when needed, and respect each other. In these relationships, the leader and the member are each ready to go above and beyond their job descriptions to promote the other’s ability to succeed. 3.2 In low-quality LMX relationships, the leader and the member have lower levels of trust, liking, and respect toward each other. These relationships do not have to involve actively disliking each other, but the leader and member do not go beyond their formal job descriptions in their exchanges. In other words, the member does his job, the leader provides rewards and punishments, and the relationship does not involve high levels of loyalty or obligation toward each other Antecedents and Consequences of Leader Member Exchange Ideas for Improving Your Relationship With Manager Create interaction opportunities with your manager. One way of doing this would be seeking feedback from your manager with the intention of improving your performance. Be careful though: If the manager believes that you are seeking feedback for a different purpose, it will not help People are more attracted to those who are similar to them. So find out where your similarities lie. What does your manager like that you also like? Do you have similar working styles? Do you have any mutual experiences? Bringing up your commonalities in conversations may help. Utilize impression management tactics, but be tactful. If there are work-related areas in which you can sincerely compliment your manager, do so. For example, if your manager made a decision that you agree with, you may share your support. Most people, including managers, appreciate positive feedback. However, flattering your manager in non-work-related areas (such as appearance) or using flattery in an insincere way (praising an action you do not agree with) will only backfire and cause you to be labeled as a flatterer.  Be a reliable employee. Managers need people they can trust. By performing at a high level, demonstrating predictable and consistent behavior, and by volunteering for challenging assignments, you can prove your worth. Be aware that relationships develop early (as early as the first week of your working together). So be careful how you behave during the interview and your very first days. If you rub your manager the wrong way early on, it will be harder to recover the relationship. 4. Servant leadership is a leadership approach that defines the leader’s role as serving the needs of others. According to this approach, the primary mission of the leader is to develop employees and help them reach their goals. Servant leaders put their employees first, understand their personal need and desires, empower them, and help them develop in their careers. Employee happiness is seen as an end in itself, and servant leaders sometimes sacrifice their own well-being to help employees succeed. Here are some tips to achieve servant leadership  Don’t ask what your employees can do for you. Think of what you can do for them. Your job as a leader is to be of service to them. How can you relieve their stress? Protect them from undue pressure? Pitch in to help them? Think about creative ways of helping ease their lives.  One of your key priorities should be to help employees reach their goals. This involves getting to know them. Learn about who they are and what their values and priorities are.  Be humble. You are not supposed to have all the answers and dictate others. One way of achieving this humbleness may be to do volunteer work.  Be open with your employees. Ask them questions. Give them information so that they understand what is going on in the company.  Find ways of helping the external community. Giving employees opportunities to be involved in community volunteer projects or even thinking and strategizing about making a positive impact on the greater community would help. 5. Authentic Leadership 1. Its key advice is “be yourself.” 2. A key characteristic of authentic leaders is that they are self aware. They are introspective, understand where they are coming from, and have a thorough understanding of their own values and priorities. 3. They are not afraid to act the way they are. In other words, they have high levels of personal integrity. They say what they think. They behave in a way consistent with their values. 4. As a result, they remain true to themselves. Instead of trying to imitate other great leaders, they find their own style in their personality and life experiences