Business Essentials - Leadership and Decision Making PDF

Business Essentials Twelfth Edition Chapter 9 Leadership and Decision Making Copyright © 2019, 2016, 2013 Pearson Education, Inc...

Business Essentials Twelfth Edition Chapter 9 Leadership and Decision Making Copyright © 2019, 2016, 2013 Pearson Education, Inc. All Rights Reserved. Learning Objectives (1 of 2) 1. Define leadership and distinguish it from management. 2. Summarize early approaches to the study of leadership. 3. Describe transformational, transactional, and charismatic perspectives on leadership. Copyright © 2019, 2016, 2013 Pearson Education, Inc. All Rights Reserved. Learning Objectives (2 of 2) 5. Identify and discuss leadership substitutes and neutralizers. 6. Discuss leaders as coaches and examine gender and cross-cultural issues in leadership. 7. Relate leadership to decision making and discuss both rational and behavioral perspectives on decision making. Copyright © 2019, 2016, 2013 Pearson Education, Inc. All Rights Reserved. The Nature of Leadership Leadership – the processes and behaviors used by someone, such as a manager, to motivate, inspire, and influence the behaviors of others Copyright © 2019, 2016, 2013 Pearson Education, Inc. All Rights Reserved. Leadership and Power (1 of 2) Power – the ability to affect the behavior of others Legitimate Power – power granted through the organizational hierarchy Reward Power – the power to give or withhold rewards Coercive Power – the power to force compliance by means of psychological, emotional, or physical threat Copyright © 2019, 2016, 2013 Pearson Education, Inc. All Rights Reserved. Leadership and Power (2 of 2) Referent Power – power based on personal traits or charisma that may lead to loyalty of employees. For example, A manager who is admired for his/her fairness, empathy, and leadership style may use referent power to inspire a team to adopt new policies or embrace organizational change, even without directly exercising formal authority. Expert Power – power derived from information or expertise Copyright © 2019, 2016, 2013 Pearson Education, Inc. All Rights Reserved. Early Approaches to Leadership (1 of 2) Trait Approach to Leadership (who leaders are) – focused on identifying the essential traits that distinguished leaders – intelligence, dominance, self-confidence, energy, activity (versus passivity), and knowledge about the job Copyright © 2019, 2016, 2013 Pearson Education, Inc. All Rights Reserved. Early Approaches to Leadership (2 of 2) Behavioral Approach to Leadership – focused on determining what behaviors are employed by leaders. It emphasizes observable behavior rather than personality or traits. It includes a range of actions such as setting goals, giving feedback, emphasizing teamwork, etc… Copyright © 2019, 2016, 2013 Pearson Education, Inc. All Rights Reserved. Behavioral Approach to Leadership Task-Focused Leader Employee-Focused Behavior Leader Behavior – leader behavior – leader behavior focusing on how tasks focusing on should be performed in satisfaction, motivation, order to meet certain and well-being of goals and to achieve employees certain performance standards Copyright © 2019, 2016, 2013 Pearson Education, Inc. All Rights Reserved. Leadership Through the Eyes of the Followers (1 of 3) Transformational Leadership As its name implies, transformational leadership is a style that changes and transforms people and situations and therefore culture. It is concerned with enhancing motivation, emotions, values, ethics, standards, and long- term goals through a variety of mechanisms. These include connecting the follower's sense of identity and self to the collective identity of the organization; being a role model for followers that inspires them and makes them interested; challenging followers to take greater ownership for their work and understanding the strengths and weaknesses of followers so the leader can align followers with tasks that enhance their performance. Copyright © 2019, 2016, 2013 Pearson Education, Inc. All Rights Reserved. Leadership Through the Eyes of the Followers (2 of 3) Transactional leadership The most common form of leadership and largely considered to be inferior to transformational leadership although it may be more effective in specific situations. Transactional leadership is a style of leadership in which the leader promotes compliance of his followers through both rewards and punishments. Unlike transformational leadership, leaders using the transactional approach are not looking to change the future, they are looking to be efficient in keeping things the same At their worst, these leaders pay attention to followers' work in order to find faults and deviations (The Gotcha Game).and deviations. This type of leadership may be effective in crisis and emergency situations, as well as when projects need to be carried out in a specific fashion e.g. police, fire officers. It is also relevant to organizations that operate in a relatively stable environment. Copyright © 2019, 2016, 2013 Pearson Education, Inc. All Rights Reserved. Special Issues in Leadership (1) Leadership Substitutes – individual, task, and organizational characteristics that tend to outweigh the need for a leader to initiate or direct employee performance. Examples: Highly Experienced Team Members: When employees are highly skilled and self-motivated, they may not need a leader to guide or supervise them. Intrinsic Motivation: Employees who are driven by personal goals or passion for their work may not require external motivation from a leader. Copyright © 2019, 2016, 2013 Pearson Education, Inc. All Rights Reserved. Special Issues in Leadership (2) Leadership Neutralizers: factors that may render leader behaviors ineffective. Examples of leadership neutralizers: Organizational Constraints: Limited resources or rigid hierarchies can reduce a leader’s ability to influence outcomes. Employee Traits: Employees with a high level of resistance to authority may not respond to a leader’s efforts, regardless of the leader's approach External Factors: Market conditions, economic pressures, or regulatory requirements can override a leader’s decisions or actions. Copyright © 2019, 2016, 2013 Pearson Education, Inc. All Rights Reserved. The Changing Nature of Leadership (1 of 2) Leaders as Coaches – from directive overseer to mentor Gender and Leadership – understanding the differences and dynamics in the approaches of women and men to leadership. Contrary to stereotypes, female leaders are not necessarily more nurturing or supportive than male leaders; and male leaders are not systematically harsher, controlling, or task-focused than female leaders. – Females do tend to be more democratic in making decisions; males tend to be more autocratic. Copyright © 2019, 2016, 2013 Pearson Education, Inc. All Rights Reserved. The Changing Nature of Leadership (2 of 2) Cross-Cultural Leadership – effects of an individual’s native culture on his or her approach to leadership when functioning in another culture Copyright © 2019, 2016, 2013 Pearson Education, Inc. All Rights Reserved. Leadership, Management, and Decision Making Decision Making – choosing one alternative from among several options Decision-Making Process – recognizing and defining the nature of a decision situation, identifying alternatives, choosing the “best” alternative, and putting it into practice Copyright © 2019, 2016, 2013 Pearson Education, Inc. All Rights Reserved. Types of Decisions Programmed Decision – decision that is relatively structured or recurs with some frequency. Examples: employee scheduling, IT system maintenance. Nonprogrammed Decision – Decision that is relatively unstructured and that occurs with low frequency. Examples: responding to changing economic conditions, launching a new product. Copyright © 2019, 2016, 2013 Pearson Education, Inc. All Rights Reserved. Decision-Making Conditions (1 of 2) State of Certainty – when the decision maker knows with reasonable certainty what the alternatives are and what conditions are associated with each alternative State of Risk – when the availability of each alternative and its potential payoffs and costs are all associated with probability estimates Copyright © 2019, 2016, 2013 Pearson Education, Inc. All Rights Reserved. Decision-Making Conditions (2 of 2) State of Uncertainty – when the decision maker does not know all the alternatives, the probabilities associated with each, or the likely consequences of each alternative Copyright © 2019, 2016, 2013 Pearson Education, Inc. All Rights Reserved. Rational Decision Making (1 of 3) Recognizing and defining the decision situation Identifying alternatives Evaluating alternatives Selecting the best alternative Implementing the chosen alternative Following up and evaluating the results Copyright © 2019, 2016, 2013 Pearson Education, Inc. All Rights Reserved. Rational Decision Making (2 of 3) Step 1: The manager recognizes and defines a decision situation. Example: A hotel manager sees that customer complaints have been increasing. Step 2: The manager identifies alternatives for addressing the situation. Example: The hotel manager can hire new staff, offer service quality training, or leave things as they are. Step 3: The manager evaluates each of the possible alternatives. Example: The hotel manager decides leaving things as they are is unacceptable but that the other two options may work. Copyright © 2019, 2016, 2013 Pearson Education, Inc. All Rights Reserved. Rational Decision Making (3 of 3) Step 4: The manager selects the best alternative. Example: Hiring new staff is too expensive but the hotel has unused funds in its training budget. Step 5: The manager implements the chosen alternative. Example: A new training program is developed. Step 6: The manager follows up and evaluates the effects of the chosen alternative. Example: After six months the manager notices a significant decrease in customer complaints. Copyright © 2019, 2016, 2013 Pearson Education, Inc. All Rights Reserved. Applying What You’ve Learned (1 of 2) 1. Define leadership and distinguish it from management 2. Summarize early approaches to the study of leadership 3. Describe transformational and charismatic perspectives on leadership Copyright © 2019, 2016, 2013 Pearson Education, Inc. All Rights Reserved. Applying What You’ve Learned (2 of 2) 5. Identify and discuss leadership substitutes and neutralizers 6. Discuss leaders as coaches and examine gender and cross-cultural issues in leadership 7. Relate leadership to decision making and discuss both rational and behavioral perspectives on decision making Copyright © 2019, 2016, 2013 Pearson Education, Inc. All Rights Reserved.