5
The Leading Function
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Learning Objectives
After completing this chapter, you should be able to:
• Discuss the functions of leading through the use of power, leadership, and motivation.
• Apply theories of leadership to various management circumstances.
• Motivate employees to achieve at high levels.
Introduction
Chapter 5
5.1 Introduction
One fundamental goal of effective leadership involves obtaining extraordinary results from ordinary people. Leading, in a business context, consists of all activities undertaken to help people achieve the highest level of performance. This chapter presents three main topics related to
leading:
1. The use of power
2. Leadership
3. Motivation
The process of leading integrates these three concepts into a series of coordinated activities
designed to achieve higher levels of performance. In addition, Chapter 6 examines the roles that
teams and groups play in leading, along with ideas related to communication at the individual
and system-wide levels.
Leadership entails influencing behaviors in organizations. Effective leaders influence behaviors
in positive ways. Ineffective leaders also influence behavior, but they do not achieve desirable
results. Leadership takes place at all levels in many organizations. Leadership as a concept can be
interpreted in various ways. To different individuals, leadership can be exhibited as vision, enthusiasm, trust, courage, passion, coaching, developing others, intensity, love, and even serving as a
parent figure. Effective leaders use every tool at their disposal to help others achieve their goals,
as we will see in this chapter.
Leading Versus Managing
The terms leading and managing are often used interchangeably; however, there are differences.
Harvard Business School professor John Kotter (2001) suggests that one is not better than the
other, but rather that the two concepts are actually complementary. He suggested two differences
between leading and managing:
1. Managing is about coping with complexity.
2. Leadership is about coping with change.
Managing as Coping With Complexity
Management is necessary because without it, organizations may become riddled with chaos.
Indeed, a company without effective management is destined to fail. One significant reason managers are necessary to a company is that those in management processes deal with complexity
throughout the organization in vital ways:
• Managers do what needs to be done through planning and budgeting.
• Managers provide people to accomplish organizational agendas through organizing and
staffing.
• Managers help ensure that people can do their jobs through control processes and problem
solving.
Planning and budgeting activities take care of what needs to be done. These activities establish
goals for the future, prescribe methods to achieve those goals, and provide the resources necessary
Introduction
Chapter 5
MANAGEMENT IN PR AC TICE
Aetna’s John Rowe: Transformational Leadership
You have probably heard that “one person can make a difference.” In the case of Aetna Insurance,
the “one person” was John Rowe, who took the reins of the company in a time of crisis. When
Rowe arrived, Aetna was losing $1 million per day. Five years later, the same company enjoyed profits of over $1.4 billion.
As a health and medical insurance company, Aetna had gotten into trouble due to poor relationships with every key group served by the company. A series of doctors and health care providers
had become so disenchanted with the firm that they filed a class action lawsuit over unsavory billing practices. The problems quickly extended to patients and plan sponsors. Eventually, company
employees became demoralized.
Rowe began by distinguishing between management
and leadership. He believed that to operate effectively,
a leader had to be self-aware and know his or her
strengths and weaknesses. In his own case, Rowe was
self-confident enough to select people with complementary talents and expertise. He also had to remove
nearly 75% of the former staff.
Rowe’s leadership style began with a strategic vision to
rebuild the organization by rebuilding relationships. He
knew it would take time.
To improve relations with physicians, Rowe went against
a great deal of advice and quickly settled the lawsuits
related to billing practices. He was highly criticized due
to the already existing cash problems in the company,
but the effort paid off.
Victoria Arocho/Associated Press
▲▲John Rowe was able to restore
trust between Aetna and health care
providers.
The next step was to rebuild relationships with Aetna’s
customers. Rowe established tactics to deliver highquality insurance and supporting services. He redirected
employees toward the culture that had built the company in the first place. That culture was based on integrity and protection of the company’s customers.
To return to the core culture, Rowe relied on constant communication. As he put it, “A company
cannot communicate too much. If I’d done the managerial tasks, I wouldn’t have been out communicating.” The outcome from his efforts was that Fortune magazine gave Aetna the Turnaround
of the Year Award. John Rowe has moved on from Aetna, but the sound principles he established
through his transformational style of leadership continued to pay dividends well beyond his tenure
with the company (Katzenbach Partners, 2006; Clow & Baack, 2010, pp. 395–396).
Discussion Questions
1. How was John Rowe distinguishing between managing and leading?
2. Rowe began by fixing relationships with outside groups and then worked on those within the
firm. Was this a risky approach? Explain your reasoning.
3. Explain why you think this style of leadership would or would not be effective in all types of
companies.
Introduction
Chapter 5
to accomplish them. Planning focuses employees on the future and gives them a stronger sense of
direction, because they know how their efforts fit into the overall design of the company.
Organizing and staffing are the functions that carry out the process of finding people to accomplish organizational agendas. Management accomplishes its plans and goals through effective
organizing and staffing. Creating organizational structures and hiring qualified people to fill the
needed roles are key parts of management.
Ensuring that people do their jobs occurs through controlling and problem solving. To reach
organizational goals, managers monitor results by comparing the plan in detail and by producing
reports, holding meetings, and using other reporting mechanisms. They then identify and solve
problems as they arise.
Leading as Coping With Change
As the business world continues to change, grow, and evolve, it is no longer enough to conduct
business the way it has always been done. Many changes are often needed for organizations to
survive and grow in an ever-increasing, competitive global market. Making necessary changes
even when they involve difficult decisions is at the very heart of leadership. Kotter (2001) identified three ways that leaders deal with change. Note the subtle differences between managing
complexities and coping with change:
1. Do what needs to be done by providing direction.
2. Provide the people to accomplish organizational agendas by aligning people.
3. Ensure that people do their jobs by motivating and inspiring them.
Leaders provide the direction in order to do what needs to be done. Leaders set the stage for positive change by providing direction. Top-level leaders and managers develop a vision for the future
of the organization in conjunction with strategies for realizing the needed changes.
Providing the people to accomplish organizational agendas is the result of a leader’s ability to
align people. While managers focus on organizing and staffing people, leaders focus more on
aligning people. Leaders communicate a new direction to people to help in understanding the
vision and to build the necessary change agents that will help realize the vision.
Leaders ensure that people do their jobs by motivating and inspiring them. While managers
concentrate their efforts on controlling and problem solving, leaders focus on trying to achieve
their vision by motivating and inspiring. They tap into employees’ values and emotions. Leaders
attempt to keep people moving the change initiative forward despite the obstacles that arise.
Managers hold the legitimate power that we will look at next. It comes from the positions they
hold within their organizations. Possessing this power allows them to hire, fire, reward, and punish. Many managers plan, organize, and control, but they do not necessarily have to exhibit the
characteristics required to be leaders.
Some view the leadership function as being more visionary than that of management. Leaders
inspire others, provide necessary emotional support, and work to rally employees around a common goal or vision. Leaders also create a vision and strategic objectives for the organization,
while managers are tasked with implementing the vision and strategic objectives.
Ideally, a person in a managerial role has both management skills and leadership skills.
Organizations count on both skill sets to accomplish objectives and continue operations.
Introduction
Chapter 5
Leading as Ethical Role Models
Beyond Kotter’s conceptualizations that leaders cope with complexity as well as with change,
one important dimension remains: Leaders either serve, or fail to serve, as ethical role models in
organizations. Leaders hold the responsibility of balancing the interests of a variety of stakeholders and constituents, including investors, employees, suppliers, customers, and even rival organizations. Various writers have noted the relationships between leadership with regard to ethical
role modeling as opposed to leadership as a political force or tool. In ethical role modeling, the
leader seeks to foster good citizenship in those who follow by example and to assist followers in
achieving their goals (Kacmar, 2011). In leadership as a political force, the leader seeks to achieve
his or her own personal ends, even at the expense of followers and others (Neubert et al., 2009).
The case can be made that ethical activities constitute the primary element of a leader’s set of tasks.
Those who fail in their ethical responsibilities can
have a negative impact on the organization for
many years. Those who build an ethical climate
help foster circumstances in which both individuals and the overall organization can achieve longterm success.
Leadership and Power
One significant part of leadership presents a key
challenge: the exercise of power in the context of a
business. Almost everyone has encountered someone who is “into power” and exerts it at any opportunity. These people generate resentment, which
inhibits their ability to lead. Thus, to have a more
complete understanding of leadership, we need to
examine the concept of power. Power is control over
formal and informal means of influence. Within
organizations, leaders may use five sources of power,
or means of influence: legitimate, reward, coercive,
expert, and referent power (French & Raven, 1959).
Courtesy Everett Collection
▲▲Charismatic leaders like Martin Luther King Jr.
might be said to possess a great deal of referent
power.
Legitimate Power
Legitimate power arises from an individual’s formal position in an organization. Managers hold
legitimate power over their employees due to their positions in the organizational hierarchy.
Those at the highest rank (CEO and vice presidents) possess the greatest degree of legitimate
power. The major factor with legitimate power, regarding its impact on a leader’s effectiveness, is
how the manager uses it. Some seek to achieve organizational goals while others try to demonstrate personal authority, which can be counterproductive to their ability to lead.
Reward Power
Power rests with those who can influence behavior by promising or providing rewards. Managers
possess reward power that results from their authority to reward employees. Organizational
rewards range from praise to pay raises and from recognition to promotions. One way a manager
can reward an employee is with a simple and sincere thank-you. Reward power also has informal sources. Someone who lets you in on key organizational gossip is also using reward power.
Introduction
Chapter 5
Informal groups reward people by including them in group activities. The individual who decides
who is and is not included in a formal or informal group’s activities has access to reward power.
Coercive Power
The ability to influence behavior by threatening or punishing creates coercive power. Managers
possess the coercive power that results from the ability to punish employees through verbal or
written reprimands, demotions, or even termination. Some organizations also allow managers
to fine or suspend subordinates. Coercive power can easily be misused. Managers who are constantly negative and punishing quickly produce resentment and ill will among employees.
The informal side of coercive power can be equally damaging. Any person who can make a
coworker the butt of jokes or harass someone through intimidation exerts coercive power. Part of
being an effective leader includes eliminating this type of coercive activity on the job. Remember
that those who engage in negative coercive power often experience a backlash from coworkers
and supervisors. No one likes being bullied, whether on the job or elsewhere.
Expert Power
Some workers are able to influence behavior due to their expertise. Expert power emerges from
specialized information or expertise, which can take different forms. Knowing answers to questions can make you appear to be an expert. One person who can possess expert power is an
administrative assistant, especially if that individual has been in the position a long time and
knows all the necessary contacts. Expert power can also stem from having specialized knowledge
such as medical or technology expertise. Informal power also results from expertise when people
see someone as a role model or mentor.
Referent Power
Referent power results from a person’s attributes. This type of power characterizes strong, visionary leaders who are able to influence their followers by their personality, attitudes, and behaviors.
Referent power can lead to being promoted through the formal organization or to becoming an
informal leader among peers. Being well liked by others creates referent power, even at the lowest
ranks in an organization.
In summary, legitimate power has only a formal side. The other four kinds of power—reward,
coercive, expert, and referent—have both formal and informal sources and uses. An important
part of leadership involves influencing the behaviors of other people. Power can be used to lead
others to get things done. It is the ability to make things happen for the good of the group.
Other Sources of Power
Additional sources of power have been identified by various authors:
•
•
•
•
French and Raven: legitimate, reward, coercive, expertise, referent
The Aston Group: closeness to production
J. D. Thompson: boundary spanning
Others: control over policy making; control over funding decisions; control over
status symbols
The Aston Group (Hickson, Hinings, Lee, Schneck, & Pennings, 1971) suggests that any person
or group with control over the production process possesses a great deal of power. This viewpoint explains the power labor unions hold due to the ability to employ tactics such as strikes
and work slowdowns that can inhibit the production process. It also suggests that support staff
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Chapter 5
positions not directly related to the production process (such as janitorial) will have substantially
less power.
J. D. Thompson (1967) argues that anyone who serves as a go-between has boundary-spanning
power. Someone who bargains with other organizations, including suppliers, retail outlets, and
the government, has power by translating the uncertainty that has been created by external
forces. When the government investigates a business practice, the person dealing with governmental authorities has power. Boundary spanning also takes place across internal boundaries.
Mediators who negotiate between union leaders and management have power because they have
access to both sides. Also, a manager who resolves differences between internal departments
holds boundary-spanning power by having access to information from both sides of the dispute.
Control over policies, funding, and status symbols also generates power. These factors influence
the conduct of work and employee jobs. Individuals with control over them can exert power.
Effective leaders use that power wisely. The use of power may be found in various leadership theories. In the next section, the ability of a leader to build positive relationships with subordinates
through the effective use of power is implied by some of the modern theories that have become
popular in the academic and professional worlds.
5.2 Leadership Theories
The ability to lead has been observed and
reported on for centuries. Many ancient
writings tell tales of leaders who served
in battle, commanded nations, or taught
religious ideas. More recently, researchers
seeking to identify leader characteristics,
as well as develop programs to train leaders
and improve their skills, have studied leadership. Four main categories of leadership
theories have appeared in the literature
over time:
1. Trait theories
2. Behavioral theories
3. Situational theories
4. Transformational theories
Trait Theories
Justin Hayworth/Associated Press
▲▲Donald Trump supports the concept of universal leadership.
He believes that an individual who is a successful business
leader will also be a successful political leader.
Early in the study of leadership, two prevailing assumptions seemed to dominate thinking about
leadership. The first assumption was that the ability to lead is universal. In practical terms, this
means writers assumed that a person who was a successful business entrepreneur would be
equally successful as the leader of a major, established corporation, or as a military general, or
as a governor or governmental leader. In essence, leadership becomes transferrable across situations. Notice that such an assumption still exists today. Donald Trump, successful businessman,
sought to become president of the United States without any prior governmental experience, as
did Herman Cain, former CEO of Godfather’s Pizza. Both presented the idea that success in the
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world of business would transfer to effective leadership of a government. In an earlier generation, military generals—such as President Eisenhower in the 1950s—were often considered to be
potential governmental leaders. War heroes Wesley Clark and John McCain also sought political
office based on military achievements.
The second assumption builds from the first: If the ability to lead is universal, then all successful
leaders must have things in common. Those “things” were assumed to be leader traits and characteristics. This line of thinking became known as the great man theory of leadership. Research
could then be dedicated to discover the common traits and characteristics of all great leaders
(notice that being male would be one trait), because the theory was built on the assumption that
great men, or great leaders, were born that way.
Trait theory became the successor to the great man theory of leadership. It modified the approach
by suggesting that through experience and learning, leaders can be developed. Still, leader traits
are physical, and personality characteristics would differentiate leaders from followers (Kinicki &
Kreitner, 2009, p. 347).
These early approaches in leadership studies involved the search for universal traits that separate
effective and ineffective leaders. Table 5.1 displays the traits and characteristics that were studied
over a period of nearly 60 years.
Table 5.1 Potential traits and characteristics of effective leaders
Physical characteristics
Personal traits
Personality traits
Social traits
height
verbal skills
ambition
empathy
strength
wisdom
confidence
tact
physical attractiveness
judgment
initiative
patience
stamina
intellect
persistence
trust
vitality
capacity for work
imagination
status
Sources: Adapted from Baack, D. (1998). Organizational Behavior. Houston: DAME Publications, p. 282; and Yukl, G. (1981). Leadership in Organizations.
Englewood Cliffs, NJ: Prentice-Hall.
Clearly, many of these are admirable traits and personal strengths. Unfortunately, a great deal of
research indicates that they are not universal for successful leaders. They may be found in many
leaders, but leaders can be successful without them. Further, no one specific, universal trait or
characteristic is found in every leader.
The Big Five
In more recent times, researchers have discovered the presence of certain traits associated with
leadership and employee performance on the job. The five-factor model of personality, or what is
often called the Big Five, suggests that the following factors contribute to the ability to lead:
1. Extraversion. This factor covers a person’s comfort level with relationships. People who are
extroverts tend to be outgoing, assertive, and sociable. Introverts tend to be reserved, timid,
and quiet.
2. Agreeableness. This factor refers to the tendency to defer to others. Highly agreeable people are
cooperative, warm, and trusting. People who are less agreeable tend to be disagreeable, cold,
and untrusting.
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3. Conscientiousness. This factor refers to reliability. A highly conscientious person is responsible, organized, and persistent. Less conscientious people are easily distracted, disorganized,
and unreliable.
4. Emotionally stable. This factor refers to a person’s ability to deal with stress. Emotionally stable
people tend to be calm, self-confident, and secure. Less emotionally stable people tend to be
nervous, anxious, depressed, and insecure.
5. Open to different experiences. This factor refers to a person’s range of interests and fascination
with unique experiences and adventures. Open people are creative, curious, and ask many
questions. People who are less open tend to be conventional, a bit rigid, and like the status quo
(Goldberg, 1993).
Of these factors, extraversion appears to be the best predictor of managerial performance, due to
the high degree of social interaction involved (Barrick & Mount, 1991). The Big Five also appeared
to be closely related to job performance, most notably in the area of conscientiousness. At the
same time, to be most effective, leaders must recognize the importance of displaying an appropriate mix of the Big Five traits, because an overreliance on any one trait can result in less than
optimal personal and organizational performance.
Attribution Models
Attribution theory is an umbrella term that covers a series of theories. It is based on the concept
that people cannot see what might be termed the “real world.” Instead, perceptions hold the key to
what people believe they have observed. These observations lead to attributions, or beliefs about
cause and effect. A simple attribution would be, “If I eat right and exercise, I will lose weight.”
Remember, however, that an equally plausible attribution is, “No matter what I do, I can’t lose
weight.” Both are valid attributions because these perceptions are simply based on an individual’s
experience of reality.
The attribution model of leadership seeks to discover the cause–effect relationships that apply to
leaders or potential leaders. It can be summarized as follows:
1. Every individual has what is essentially an implicit theory of leadership, which represents his
or her thoughts about the nature of, and traits displayed by, effective leaders.
2. Individuals constantly test their own theories and attributions. Figure 5.1 displays such a test.
3. If the test is confirmed, as shown in the two boxes of Figure 5.1, two personal attributions are
strengthened:
• the individual’s belief about the specific person’s ability to lead or not lead
• the individual’s attribution about the nature of an effective leader
4. If the test is refuted, as shown in the boxes of Figure 5.1, the individual will
• modify his or her theory
• ignore the test
The essence of each person’s theory is the observation of behaviors. Most of these behaviors
reflect leader traits and characteristics. When someone is promoted to the role of leadership,
elected to a role such as governor or president, or made a high-ranking manager in a company,
each person decides if that individual “acts like a leader.” Over time, evidence will surface to indicate whether the individual was a success or failure. Those who predicted success and observe
success experience confirmed attributions. Those who predicted failure and observe failure also
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Figure 5.1 Test of attribution
Success
Confirmed
Attribution
Refuted
Attribution
Refuted
Attribution
Confirmed
Attribution
REAL OUTCOME
Failure
Failure
PREDICTION
Success
f05.01_MGT330.ai
experience confirmed attributions. They then believe they were right about the person involved
as well as their understanding of leadership.
When a test does not reveal accurate results, the attribution is refuted. The person will either
modify his or her own personal theory to account for new circumstances or simply ignore the
results of the test. For example, think about the most recent presidential election. You probably
studied the two candidates and concluded one was the better choice because that individual
appeared to be the “most presidential,” based on the person’s traits and characteristics. If your
choice was elected, four years would pass and then you would be able to pass judgment. If you
predicted that your president would be successful and the country did well during his administration, then a confirmed attribution would lead you to say, “I was right about the traits and characteristics a president needs, and I was right when I chose my candidate, because he had those
traits and characteristics.” Conversely, if your candidate won, but experienced failure over the
next four years, then the test of your idea was refuted. In that instance, you would either modify
your views about what is needed to become a successful president or ignore the case, possibly by
saying, “It was Congress’s fault he couldn’t get anything done.”
On the other hand, if the other candidate won, you would predict failure, because the candidate
did not display the traits and characteristics you thought were needed. If that candidate did
indeed fail, another confirmed attribution took place. If, however, the candidate succeeded, you
would be in the same situation: modify your views on what is needed to become a successful
president or ignore the case, attributing the success to luck or some other variable.
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The attribution model helps us understand who is most likely to be promoted or moved into a
leadership role. And this is the person who is perceived as having characteristics of a successful
leader, especially if that leader was the person being replaced. Unfortunately, many characteristics associated with effective leadership have no basis in fact. Height, attractiveness, gender,
race, and other traits have already been discounted as universal leadership qualities (Baack, 1998,
pp. 283–284; Myers, 1990).
Still, trait theories remain popular to this day. People apparently wish to believe something universal about leadership exists. To the contrary, effective leaders come in all shapes, sizes, nationalities, age groups, levels of attractiveness, and gender. It is not useful to continue with stereotypes
that hold no basis in fact. There is some evidence, for example, that the Big Five are common in
effective leaders, although not in every single case.
Behavioral Theories
The onset of World War II resulted in a series of new leadership research initiatives in the United
States. The types of theories that emerged have been characterized as the behavioral era of leadership study (Yukl, 1981). Two studies that provided a new foundation to the investigation of
leadership behavior were conducted at the University of Michigan and The Ohio State University.
The University of Michigan Study
In the late 1940s, researchers at the University of Michigan developed what came to be known
as the University of Michigan Leadership Model. A team studied the effects of leader behavior
on job performance by interviewing a number of managers and subordinates. As a result of their
research, the investigators identified two leadership styles: job centered and employee centered
(Likert, 1961).
Job-centered behaviors occur when managers pay more attention to the job and related work
behaviors. Their principal concerns are meeting production goals, keeping costs in line, and
meeting schedules. The researchers discovered that some manager-leaders tend to focus more on
tasks and less on their employees.
Employee-centered behaviors take place when managers pay more attention to employee satisfaction and making work groups more cohesive. By focusing on employees’ needs, managers seek
to build effective and high-achieving work groups. Again, some manager-leaders tend to favor
employees over the tasks involved.
The net result was that these studies identified two types of leader behaviors. These categories
could then be applied to more complex leadership theories over time.
The Ohio State Study
Another study that examined leadership behavior took place at Ohio State University (Stogdill &
Coons, 1957). From surveys of leadership behavior, two major dimensions of leader behavior were
identified: initiating structure and consideration (Shartle, 1979).
Initiating structure is a set of leadership behaviors that organize and define what group members should be doing. It involves the efforts the leader makes to get things done, such as providing
instruction, offering feedback (positive and negative), and rewarding productivity. This dimension is similar to the job-centered behaviors identified in the University of Michigan study.
Consideration is a set of leadership behaviors that expresses concern for employees by establishing a warm, supportive, friendly climate. This behavior, which is similar to employee-centered
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behavior identified in the University of Michigan study, is sensitive to employee ideas, feelings,
and trust.
The Ohio State University study leaders concluded that effective leaders demonstrated both
initiating structure and consideration. Effective leaders tended to have positive, supportive,
employee-centered relationships and used group rather than individual methods of supervision
that encouraged setting high performance goals. At the same time, they were able to focus on the
accomplishment of tasks.
Situational Theories
In the 1950s, the concept emerged that no single universal style of leadership is effective. Instead,
leaders can be chosen because they “fit” a situation or can adapt their leadership styles to individual circumstances. As a result, theories in this area are known as the situational approaches
to leadership.
Theory of Leader Effectiveness
Robert Tannenbaum and Warren Schmidt (1973) were among the first to suggest the third key
leadership variable: effectiveness. Their view of leadership expresses leader style based on the
delegation of authority. At one extreme, an authoritarian leader retains total control. At the other
is the leader who pushes for employee participation and autonomy. In between, varying degrees of delegation of authority would
dictate the amount of production-oriented
or people-oriented leadership that would be
most effective.
Alexey Klementiev/© Kuzma/Thinkstock
▲▲Some situations, such as leading troops in the military,
require an authoritarian style of leadership.
William Reddin (1970) identified the two
main dimensions of leadership as being
relationship oriented and task oriented. In
a manner similar to the original Ohio State
studies, Reddin combined the two orientations to create four outcomes. Reddin prescribed the same concept as Tannenbaum
and Schmidt—that the potential for effectiveness should determine the mix of task
and relationship orientation.
To apply the situational approach, consider various situations. A sergeant in the military must
insist on compliance to regulations and orders. Consequently, the approach that would appear
to fit would be more authoritarian in nature. In contrast, the director of production of a theatrical play would probably find an authoritarian approach would inhibit creativity and reduce the
quality of the performance. Instead, the leader would find participation and autonomy to be the
most valuable. As a leader, your first responsibility is to investigate the nature of the situation you
are about to manage or lead and then adjust your style to the specifics of that situation. Even in
the same industry, such as restaurants, degrees of authority might be adjusted for leaders directing those preparing fast-food meals as opposed to highly talented and creative chefs in high-end
establishments.
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Fiedler’s Contingency Model
Fred E. Fiedler’s (1967, 1974) contingency model also suggests that leadership success depends on
a match between the leadership style and the demands of the situation. Rather than try to train
leaders to adapt to a new style, Fiedler believes that leaders should match their styles with situations that are the best fit.
According to the theory, people’s leadership styles tend to be either task or relationship oriented.
To determine which style a firm’s leaders tend to exhibit, they may be given a least preferred
coworker (LPC) test. The test asks respondents to think about the coworker they like the least.
Then, they are presented with a set of adjective choices from two extremes, such as friendly or
unfriendly and accepting or rejecting. The more times a respondent answers with a positive adjective ( friendly, accepting), the higher that leader’s LPC score. Thus people-oriented leaders tend to
get high scores on the test, and production-oriented leaders get generally low LCP scores. Fielder
(1967, 1974) suggests that neither style is effective all the time; instead, each is most effective
when used in the right situation. To effectively diagnose leadership situations, three contingency
variables must be identified:
1. Leader–member relations. The extent to which a leader has, or does not have, the support and
loyalty of the work group.
2. Task structure. The extent to which tasks are routine, unambiguous, and easily understood.
The more structured a task is, the more influence a leader holds.
3. Position power. The degree of power a leader has to reward and punish. More power equates to
more control and influence.
Using these three dimensions, Fiedler constructed the “dimension of favorability,” as shown
in Figure 5.2. The research Fiedler and many others conducted led to the construction of the
Dimension of Effectiveness
Figure 5.2 Fiedler’s contingency theory results
Low LPC
High
Low
High LPC
Most
Favorable
Mixed
Most
Unfavorable
Situational Favorability
Low vs. High
Leader-Member Relations
Situational Favorability
Based on:
Low vs. High
Task Structure
(Where: High = Most Favorable)
Low vs. High
Position Power
Source: Adapted from Fiedler, F. E. (1974, Autumn). The Contingency Model—New Directions for Leadership Utilization, Journal of Contemporary Business.
f05.02_MGT330.ai
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“dimension of effectiveness.” As shown in the figure, at the two extremes, effectiveness is higher
for production-oriented leaders. In mixed favorability situations, people-oriented leaders become
more likely to succeed. The concept was that managers should understand their situations and
then restructure that situation to fit personal leadership styles.
The contingency theory approach generated considerable debate regarding its value. The primary
complaint was that most leaders would be unable to truly restructure their situations, thus giving
the theory little practical value. Also, a series of challenges to the research methods were raised.
Contingency theory moved the study of leadership more into the realm of collecting and analyzing data to support or refute various propositions. It also added to our understanding of the
conditions under which leaders operate.
Hersey and Blanchard’s Situational Leadership Model
The situational theory leadership model described by Paul Hersey and Ken Blanchard (Blanchard,
Hersey, & Natemeyer, 1979) reflects how a leader should adjust his or her leadership style according to the readiness of the followers. The model suggests that a leader should be flexible in choosing a leadership behavior style and become sensitive to the readiness of the follower. Readiness
refers to the extent to which a follower possesses the ability and readiness to perform a given task.
Employees with a high level of readiness require a different leadership style than do employees
with a low level of readiness. Table 5.2 identifies the possible leadership styles that result from
different combinations of task-oriented and relationship behaviors.
Table 5.2 Matching situations to leader styles
Situation characteristics
Leadership style
High task behavior/low relationship
Telling and directing
High task behavior/high relationship
Selling and coaching
Low task behavior/high relationship
Facilitating and counseling
Low task behavior/low relationship
Delegating
A manager who employs the telling and directing style uses one-way communication patterns in
which the leader tells the follower what, how, when, and where to accomplish various tasks. The
style best fits when the work to be performed is straightforward and simple, and when the leader
does not wish to bond or relate to followers.
The selling and coaching style is characterized by the direction the leader provides. The leader
introduces two-way communication to get the followers to “buy into” decisions. It matches situations where the work is straightforward and uncomplicated but the leader wants to build bonds
with followers.
Leaders who display the facilitating and counseling style share decision making with followers,
because the emphasis is on building relationships. The leader exhibits facilitation behaviors, or
works to make it easier for employees to make decisions, because the followers have the ability
and knowledge to perform these tasks.
In a delegating style, the leader basically allows his or her followers to “run the show.” No strong
relationships are built, and the followers have the ability and are both willing and able to perform
the task at hand.
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Leaders using the situational leadership approach must be able to implement alternative leadership styles as needed. The model implies that if the correct styles are used in lower readiness
situations, followers will mature and grow in ability, willingness, and confidence. This allows
the followers to grow and the leader to become less directive. As you can see, the approach has a
great deal in common with earlier situational theories. It once again suggests a continuum ranging from a more directive or authoritarian style at one end and a more participative and inclusive
approach at the other. Leaders must understand the situation at hand to respond correctly and
achieve the highest levels of performance.
Path–Goal Theory
Robert House (1971) proposed the path–goal theory. It suggests that an effective leader is one
who clears and clarifies paths for employees to accomplish both personal and professional goals.
Clearing the path refers to a leader who helps people move toward their goals, removes barriers, and provides appropriate guidelines for accomplishing assigned tasks. House identifies
four leadership behaviors associated with the theory: directive leadership, supportive leadership,
achievement-oriented leadership, and participative leadership.
The directive leadership style is one in which the leader lets employees know what is expected
by giving directions for how and what to do. The directive leader also maintains standards of
performance, and clarifies his or her role in the group. Supportive leadership is a style in which
the leader treats group members as equals by being approachable and by showing concern for the
well-being of employees. Achievement-oriented leaders set challenging goals, expect a high level
of performance, and emphasize continuous improvement in performance. Participative leadership involves including employees in decision making, consulting with employees, and implementing employee suggestions when making decisions.
Path–goal leadership theory suggests that a manager should use leadership styles that complement the needs of the situation. Two contingency factors are employee characteristics and environmental factors. Five employee characteristics include focus of control, task ability, the need
for achievement, experience, and the need for clarity. Two environmental factors are independent
task structures and interdependent task structures.
In essence, effective managers clarify paths to goals by clarifying jobs and assignments, by understanding the goals and desires (including preferred rewards) of employees, and then by rewarding successful performance with the items they value. Each employee might express a slightly
different preference in terms of rewards; therefore, the leader would need to make sure positive
outcomes are tailored to individual workers when they achieve the desired results. This simplified explanation of the model explains the primary ways to improve your leadership style (Baack,
1998, pp. 298–299).
Transformational Leadership Theory
Transformational leaders garner trust, seek to develop leadership in others, exhibit self-
sacrifice, and serve as moral agents. They tend to focus on objectives that transcend the more
immediate needs of the work group (Dumdum, Lowe, & Avolio, 2002). The following key leader
behaviors have been identified in the transformational leadership literature:
•
•
•
•
inspirational motivation
idealized influence
individualized consideration
intellectual stimulation
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Inspirational motivation establishes an enticing vision of the future with persuasive and emotional arguments combined with enthusiasm and optimism. Idealized influence refers to sacrificing for the good of the group, acting as a role model, and displaying high ethical standards.
Individualized consideration includes providing support, giving encouragement, enabling
empowerment, and coaching employees. Intellectual stimulation means that transformational
leaders encourage employees to question the status quo and seek innovative and creative solutions to organizational problems.
The transformational leader exhibits these behaviors, which can result in powerful effects on followers and improved outcomes, as described in Table 5.3.
Table 5.3 Transformational leadership effects
Followers and work groups
Outcomes
Increased intrinsic motivation, achievement orientation,
and goal pursuit
Personal commitment to leader and his or her vision
Increased identification and trust with the leader
Self-sacrificial behavior
Increased identification and cohesion with group
members
Organizational commitment
Increased self-esteem, self-efficacy, and intrinsic
interest in goal accomplishment
Task meaningfulness and satisfaction
Shared perceptions of goal importance
Increased individual, group, and organizational
performance
Transformational leadership theory has gained a great deal of traction in the new millennium.
Many companies believe finding such leaders and training others in these behaviors are true keys
to organizational success. In summary, notice that each category of leadership theory has contributed to our understanding of the process. The trait theories indicate that while there are no
ironclad rules, certain leader characteristics may be desirable in various situations. The behavioral model helps explain how certain individuals end up in leadership roles. The Ohio State
University and University of Michigan studies teach us that some leaders tend to be more interested in the job, while other leaders are more in tune with their followers. The situational theories note that sometimes company circumstances favor task-oriented leaders and at other times
a people-oriented approach works best. Path–goal theory explains the basic steps to becoming a
better leader. Transformational leadership theory builds on this idea by establishing relationships
between various behaviors and eventual organizational outcomes.
5.3 Leadership and Motivation
Another key aspect of the leading function is motivating workers. Effective leaders motivate individuals to increase the level, direction, and persistence of effort expended at work. Motivation
may be defined as what starts behaviors, what maintains behaviors, and what stops behaviors.
Leaders are interested in inspiring employees to engage in various behaviors. Table 5.4 provides
some examples.
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Table 5.4 Motivated behaviors at work
Start and maintain
Stop
Punctuality (arrive on time)
Unhealthy habits (smoking, drugs)
Attendance (arrive every day)
Unethical activities
Effort/productivity
Conflicts
Cooperativeness
Politics
Share information
Inattentiveness
To achieve these goals, leaders can take lessons from the many types of theories of motivation.
Three categories of motivation theories are content theories, process theories, and goal-setting
theories.
Content Theories of Motivation
Content theories explain the specific factors that motivate people, most notably in the area of
human needs. They help explain what drives human behavior, because people will act to fulfill
unsatisfied needs, especially the ones they feel are the most urgent. Three major content theories
of motivation include Maslow’s hierarchy of needs, Herzberg’s motivation-hygiene theory, and
McClelland’s acquired needs theory.
Maslow’s Hierarchy of Needs
Abraham Maslow’s hierarchy of needs (1954) provides an important foundation of leadership
thinking. The model shown in Figure 5.3 employs a satisfaction-progression approach. A person
will not progress to the next level of needs until the immediate need has been routinely satisfied.
Lower-order needs include physiological needs, safety needs, and social concerns for belongingness and love. Physiological needs on the job include rest breaks, physical comfort, and reasonable work hours. Safety needs include safe working conditions, job security, base compensation,
and benefits. Social needs are met by interactions with friendly coworkers, customers, and a
supportive supervisor.
The higher order needs include self-esteem and self-actualization concerns. Self-esteem needs
include responsibility for an important job, being promoted, and receiving praise and recognition
from the leader. Self-actualization results from creative and challenging work, active participation
in decision making, and job autonomy. Self-actualization is realized only if an employee performs
tasks and work that express his or her inner self—the person the individual wishes to become.
Maslow’s hierarchy has been criticized for several reasons. Commentators suggest that the theory does not explain how strongly a need must be satisfied before progression to the next level
can occur. Others suggest that this order of needs is far too rigid and that many people experience them in a far different order. For example, some people’s social needs for belongingness and
love are far more important than self-actualization. Another problem is that Maslow’s hierarchy
may not be a comprehensive list of needs. Additional needs exist, including the desire or need for
power. Finally, the theory has been criticized for being too vague and not truly explaining how
someone would seek to fulfill a need.
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Figure 5.3 Maslow’s hierarchy of needs
SelfActualization
Esteem Needs
Belongingness and Love Needs
Safety and Security Needs
Physiological Needs
Source: From Abraham Maslow, Robert Frager, James Fadiman, Motivation and Personality, 3rd ed. Copyright © 1987.
Reprinted by permission of Pearson Education, Inc., Upper Saddle River, New Jersey.
f06.03_MGT330.ai
Despite these criticisms, Maslow’s hierarchy built the foundation for other theories of motivation.
It stresses the roles that needs play in motivation. It seems clear that, in some way, individuals
seek to meet or satisfy needs through various factors that are present in the workplace.
Herzberg’s Motivation-Hygiene Theory
Frederick Herzberg’s motivation-hygiene theory (1964), also known as the two-factor theory, proposed that work satisfaction and dissatisfaction arise from two different factors. Work satisfaction is associated with motivating factors, and work dissatisfaction comes from hygiene factors.
Hygiene factors are those things not directly related to the actual work done, but they play a critical role in either creating or preventing employee dissatisfaction. Table 5.5 presents the hygiene
factors and the motivation factors.
Table 5.5 Herzberg’s two-factor theory
Hygiene factors (dissatisfiers)
Motivators (satisfiers)
Wages
Achievements
Hours
Recognition
Working conditions
Chance for advancement
Supervisory practices
Responsibility
Rules and procedures
Meaningful work
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The factors leading to job satisfaction are separate and distinct from those leading to job dissatisfaction. Leaders who eliminate factors that create job dissatisfaction may bring about peace but
not necessarily motivation. They may be attempting to appease rather than motivate the work
force. When these factors are satisfactory, employees will not be dissatisfied; neither will they be
satisfied. The term hygiene was chosen with a hospital in mind. A clean and germ-free hospital
does not necessarily make you well; however, an unsanitary hospital can make you sick. The best
leaders can hope for with the hygiene factors is to keep them neutral. In other words, a company
that offers fair wages and has a reasonable vacation policy likely will not contribute to an employee’s dissatisfaction, whereas the absence of these factors is likely to cause employee dissatisfaction.
In contrast, the factors associated with the work itself are those that inspire motivation in workers. Herzberg believed employees find these characteristics intrinsically rewarding. One management program that can help build motivators, job enrichment, is designed to add higher levels of
the motivators to jobs. Job enrichment involves increasing the amount of the following characteristics in jobs:
Skill variety
Number of skills used to perform the job
Task identity Degree to which the work constitutes something “complete and
identifiable”
Task significance
Degree of human interaction
Autonomy
Ability to work without supervision
Feedback
Knowledge regarding performance
As you can see, all these factors would contribute to an employee’s finding the work more exciting
or challenging. Herzberg believed motivation would result from incorporating them into every
job possible.
The two-factor motivation-hygiene theory has been criticized for assuming that motivation and
satisfaction are the same thing. In reality, it is possible to be either unmotivated and satisfied
or motivated and dissatisfied. The theory does not account for those circumstances. Also, the
data was collected from a sample group of professional engineers and accountants. Many have
speculated that if Herzberg were to ask the same research questions of a different group, such as
unskilled or semiskilled blue-collar workers, the answers might have been quite different.
The motivation-hygiene theory does explain many factors that make people unhappy on the
job. Leaders and managers can work to eliminate these issues and find other means to motivate
employees. Herzberg’s recommendation would be to make each job more interesting and challenging, and many management experts agree with such a recommendation.
McClelland’s Acquired Needs Theory
David McClelland developed another motivation theory that is also based on individual needs:
the acquired needs theory. The need for achievement is the desire to do something better or
more efficiently to master complex tasks. The need for power is the desire to control other people,
to influence that behavior, or to be responsible for them. The need for affiliation is the desire to
establish and maintain positive and supportive relationships with other people. People develop
these needs over time through individual life experiences.
For leaders, the implications of these needs are found in three areas. First, high needs for
achievement are associated with performance on the job. McClelland believed it was possible
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to instill greater needs for achievement within workers by using the proper training techniques
(Heckhausen & Krug, 1982). Second, people should be placed on jobs that match their levels of
need for achievement, power, and affiliation. Someone who has high affiliation needs should work
with people. Someone with achievement needs will be more successful in a job that provides
consistent feedback. Third, managers can create challenging task assignments and goals in order
to build goal commitment. This effort, in turn, leads to higher levels of performance (Kinicki &
Kreitner, 2009, p. 147).
Process Theories of Motivation
Process theories of motivation explain how reasoning processes are associated with motivated
(and unmotivated) behaviors. People need to see “what is in it for them” and have a sense that
fairness is extended to all involved. Two major process theories include Adams’s equity theory
and Vroom’s expectancy theory.
Adams’s Equity Theory
The equity theory of motivation was developed by J. Stacy Adams (1963). The premise of the theory is that perceived equity or inequity plays a major role in motivational processes. The theory
may be explained in five steps.
Step one. At work, people exchange inputs for outputs. Inputs are the elements workers trade to
the organization, such as time, effort, training, and creative ideas. Outputs are what the organization trades to workers in the forms of pay, praise, the chance to be promoted, challenging work,
and other items.
Step two. People have a natural tendency to compare themselves to one another. At work, one
special comparison will be made with a referent other, who has been singled out.
Step three. The nature of the comparison is between input-output ratios, as follows:
Inputs of employee
versus
Outputs of employee
Inputs of referent other
Outputs of referent other
Step four. If the comparison of input-output ratio seems in balance, equilibrium, or equity, then
behavior will be maintained. In essence, motivation continues when employees believe they are
being treated fairly or equitably.
Step five. If the comparison of input-output ratio seems unequal or inequitable, then there will be
a strong motivation force to reestablish equilibrium. To restore equilibrium, employee behaviors
can be adjusted in various ways, including the following:
• Change work inputs by putting less effort into their jobs.
• Change work outputs by asking for better treatment, a pay raise, or other rewards.
• Attempt to change the work outputs of a referent other, causing the individual to give lesser
or greater effort.
• Change the comparison by finding ways to make things seem better.
• Change the situation by transferring from the job or quitting.
Effective leaders anticipate perceived negative inequities whenever rewards such as pay or promotions are allocated. Instead of letting inequities get out of hand, they carefully communicate
the reasons for giving out the rewards. For example, think about a situation in which your friend,
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who manages a local ice cream parlor, invites you to work part-time hours at a rate of $7.50 per
hour. The job’s responsibilities include waiting on customers, helping to stock items, and cleaning
and closing the store at night. Your friend earns $9.00 per hour, but she also takes care of payroll,
hiring and firing workers, purchasing advertising for the store, attending community events, and
other managerial activities. In that situation, the comparison of inputs to outputs yields a perception of equity, that the difference in pay is fair based on your friend’s additional responsibilities.
In that situation, you would be content to maintain your level of effort.
If, however, you discovered that one of your coworkers, who you consider to be a real slacker,
earns $8.00 per hour, then suddenly inequity exists. Your response might be to give less effort, to
ask for a raise, to give your coworker a hard time about “doing his fair share,” by reconsidering his
level of effort and productivity and concluding that the differences aren’t that big, or by looking
for another job and eventually quitting.
Equity theory explains when behavior is maintained on the job (equity) and when dissatisfaction
leads to negative outcomes (when inequity is present). As a manager-leader, your job is to create
circumstances in which all employees believe they are being treated fairly. You probably will pay
special attention to your most valuable employees, making sure that their sense of equity is satisfied. After all, they are the people you are most interested in keeping.
Critics point out that people often make unreasonable comparisons. Suppose that someone in
your store is comparing his rate of pay to a friend’s salary in a union shop, where wages are much
higher. The comparison is not reasonable, yet the person becomes dissatisfied because he believes
that things are inequitable. Managers can do little to resolve these sorts of conclusions based on
false assumptions.
Also notice that part of the theory says a person may change his or her comparison points. In
other words, the individual might reappraise the situation and reach an entirely different conclusion. This process may lead a person to perceive inequity for a time and then change his or her
mind and decide that things are equitable after all. Once again, this behavior creates complications for managers seeking to motivate employees.
Vroom’s Expectancy Theory
Victor Vroom (1964) introduced the expectancy theory of motivation, which asks the question:
What determines the willingness of an individual to work hard on tasks important to the organization? Vroom posited that people will do what they can do when they want to do it. Three
expectancy factors affect motivation:
• Expectancy (E). An employee’s belief that working hard will result in a desired level of task
performance being achieved.
• Instrumentality (I). An employee’s belief that successful performance will be followed by
rewards and other desirable outcomes.
• Valence (V). The value an employee assigns to the possible rewards and other work-related
outcomes.
Vroom suggests that for motivation to be present, expectancy, instrumentality, and valence must
all be present at the same time. In other words:
Motivation = E × I × V
If any of the three expectancy factors were missing, zero motivation would be present. The
higher the values of E, I, and V, the more powerful the motivational force becomes. Leaders
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can take advantage of the principles of expectancy theory by understanding worker valences
(knowing what employees value); clarifying the work situation (making it seem more likely to
the employee that successful performance is possible); and rewarding successful performance
with the valences held by employees. Expectancy theory has received a great deal of favorable research results. Leaders enjoy the benefit of an easy-to-apply system of motivation using
the theory.
MANAGEMENT IN PR AC TICE
Expectancy Theory
As an example of expectancy theory, suppose that a manager in a local food establishment works
directly with four employees. The four employees have widely different goals for the job. One only
wants to pick up a paycheck, because he attends college as well. A second wants to learn the
business, because someday she hopes to open her own restaurant. The third wants to make as
much money as possible, because he is helping to support a family. The fourth wants to have fun
and make friends because she is still in high school, works for spending money, and has strong
social needs.
As a manager, you should notice that each employee expresses different valences. Your role would
be to tailor rewards to each person’s desired outcome. Then, you should clear the path to those
rewards by establishing clear expectations about how to do the job well and by providing consistent
feedback, both when employees perform well and when they make a mistake. Then, it would be
your responsibility to make sure that those employees who achieve and do their jobs correctly and
at high levels receive the rewards they desire. The first simply wants to keep matters as uncomplicated as possible and may wish to have certain nights free to study for exams or prepare term
papers. The second craves additional instruction and insight into the restaurant business, which can
be delivered with one-on-one coaching sessions. The third can be taught methods for receiving the
best tips and other ways to earn extra money, including being assigned to shifts when the restaurant is the busiest. The fourth can be moved into situations where she works with her friends and
engages with the public. These four rewards should then result in the best performance possible for
all four workers, so long as you carry out the other aspects of the theory.
Further consider the relationship between expectancy theory in this section and the leadership
theories discussed in Section 5.2. Many elements of path–goal theory correspond to the ideas put
forth in expectancy theory. Both stress the importance of relations between the manager-leader
and the followers. Strong, positive relationships lead to increased motivation in the employee and
successful outcomes for the leader.
Discussion Questions
1. Describe the connections that you observe between expectancy theory and the path–goal theory of leadership.
2. Explain how you would connect all three elements of expectancy theory (valences, instrumentality, expectancy) to your efforts in managing each of the four employees described in this section.
3. Can you identify any problems or complications that would keep you, as a manager, from using
expectancy theory in this situation?
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Locke’s Goal-Setting Theory
Goals in the form of clear and important performance targets are the basis of Edwin Locke’s
(1968) goal-setting theory. A goal is the object or aim of an action; it is what an individual is trying to accomplish. The theory is based on the premise that task goals can be highly motivating if
they are properly set and well managed. Goal-setting theory includes four concepts:
1. Goals direct attention toward relevant activities and away from unnecessary activities.
2. Goals regulate effort by focusing on the most important action to be taken.
3. Goals increase persistence, leading the worker to stay on task.
4. Goals foster the development and application of task strategies and action plans.
Goals clarify performance expectations, establish a frame of reference for feedback, and provide
a basis for self-management. In these ways, Locke believed that goal setting can enhance work
performance and job satisfaction.
A key component of the theory is that managers and leaders must work with others to set the right
goals in the right ways. Goals must be difficult but achievable, specific, measurable, realistic, and
timely. It is important for both the leader and follower to participate in setting the desired goals.
A substantial amount of research supports goal-setting theory. One system companies use to
establish and support goal setting for all employees is management by objective. This is a participative goal-setting program in which supervisors and employees negotiate goal lists and
performance objectives on an annual basis. In general, effective leaders inspire motivation by
understanding worker needs and helping employees satisfy those needs by creating a supportive
work environment. Leaders know that workers compare themselves to one another. In response,
effective leaders strive to make the reward system as fair and equitable as possible. Effective
leaders comprehend the relationship between knowing what workers want, showing them how
to effectively complete assigned tasks, and rewarding successful employees with the things they
want. Goal-setting systems allow leaders to establish meaningful performance targets and reward
subsequent performance. A program such as management by objectives can institutionalize the
goal-setting process throughout the organization.
Relationships Between Theories
In case you are wondering if it is possible to incorporate all of these ideas into a systematic
approach to leading, the answer is yes. Effective managers take concepts from each of these theories and models and apply them to their own situation, organization, and followers.
The primary approaches to leadership include traits and characteristics models, people and production (behavioral and situational) theories, and more recent views including path–goal theory
and transformational leadership theory. The common ground for all these theories resides in two
basic notions. First, some leaders are especially talented at working with people in various ways,
either through displays of traits and characteristics that are people centered, by helping people
achieve the best outcomes by clarifying paths for them, or by leading people by setting a transformational example. Second, the leadership theories note the role that work performance plays.
Effective leaders display the traits and characteristics that guide people to achieve at higher levels.
They clarify paths related to effective performance, and they challenge others to do their best
through the transformational skills they exhibit. Perhaps the original Ohio State study authors
said it best: Effective leadership has both job-centered and people-centered components.
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The motivational theories include those oriented to needs, those that focus on thought processes,
and those that focus on goals. Once again, these theories have common bonds. Needs are quite
similar to valences in that both express a positive desired outcome experienced by an employee.
One such need or valence would be feeling that you are treated fairly. Another would result from
the sense of personal satisfaction associated with achieving your goals. In other words, each of
the categories of motivation theories focus on doing things that fulfill basic desired outcomes
(satisfy a need, achieve a valence, have a sense of being treated fairly, or reach personal goals).
As a result, connections between leadership theories and motivational theories can be readily
drawn. An effective, people-centered leader takes the time to understand what his or her workers
want. This includes knowing about basic employee needs, fine-tuning a leading style to incorporate individual valences into a reward system, and treating people fairly and equitably. Finally, the
good leader knows that only when promises are kept will the people under his or her direction be
motivated. There is nothing worse than a leader who holds out a reward for desired performance
and then does not deliver the reward when the follower succeeds or achieves a desired outcome.
There is nothing better than a consistent leader who always delivers what he or she promises to
employees who succeed.
Then, an effective job-centered leader can tie concepts regarding rewards and need fulfillment
with methods designed to improve job performance. The leader delivers quality instruction, corrects errors in a positive fashion, seeks employee involvement in improving the work process, sets
clear, meaningful, and achievable goals, and takes other steps to make sure each individual can
perform at the highest level. Chances are, if you do these things, you will be perceived as having
the traits and characteristics of an effective leader.
Summary
Leading, in a business context, consists of all activities undertaken to help people achieve the
highest level of performance. These include using power, applying leadership theories, and providing motivational approaches. Leading also includes establishing effective teamwork and communication systems. Two differences between leading and managing are that managing focuses
on coping with complexity while leadership emphasizes coping with change.
Power is control over formal and informal means of influence. Within organizations, five sources
of power, or means of influence, that leaders may use include legitimate, reward, coercive, expert,
and referent power. Additional sources of power include closeness to production, serving as a
boundary spanner, and control over items such as budgets and status symbols in the organization.
Leadership entails influencing behaviors in organizations. Trait theories of leadership assumed
that the ability to lead is universal or transferrable across situations. Further, if the ability to lead
is universal, then all successful leaders must have things in common. Unfortunately, no single
trait or characteristic applies to every successful leader, although the Big Five characteristics are
somewhat able to predict employee performance and the potential ability to lead. Attribution
models help us understand who is most likely to be promoted into a position of leadership
and why.
Behavioral theories of leadership identified two tendencies: job-centered and employee-centered
activities. Situational and contingency leadership theories add the concept of effectiveness, suggesting that leaders can be adapted to each unique organizational circumstance. Path–goal theory
argues that effective leaders understand the things workers value, clarify paths to performance,
Summary
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and reward employees who succeed. Transformational leaders garner trust, seek to develop leadership in others, exhibit self-sacrifice, and serve as moral agents by focusing on activities that
include inspirational motivation, idealized influence, individualized consideration, and intellectual stimulation.
Content theories of motivation explain how needs result in employee behaviors. Maslow’s hierarchy notes five stages of motivation. Herzberg’s two-factor theory notes items that satisfy and
dissatisfy employees.
Process theories of motivation explain how reasoning processes are associated with motivated
and unmotivated behaviors. Equity theory explains how perceptions of fairness create either
satisfied or dissatisfied employees, along with potential responses to circumstances when inequity occurs. Expectancy theory suggests that motivation results from a combination of valence,
expectancy, and instrumentality, when all three factors are high.
Locke’s goal-setting theory suggests that task goals can be highly motivating if they are properly
set and well managed. A system that supports goal setting is management by objectives.
The concepts presented in this chapter have many common elements. Effective leaders use power
in constructive ways. They understand that both people and production are important. They
use their talents to understand each person’s goals and desires, knowing that these outcomes
can become part of a motivational system that will achieve at the highest levels. These tactics
increase the perception that the potential leader has the transformational traits and characteristics needed to succeed at all levels in the organization and beyond.
C A S E S T U DY
Who’s Next?
Jim Logan was at the end of a long and successful career as an entrepreneur and manager. He
started his business 30 years earlier by purchasing what was a small brokerage service for farm animals (farm futures, plus auctions of cattle and horses) and turning it into a significant Midwestern
empire. The firm had expanded into shipping, oil futures, chemical products, trucking, and several
smaller ventures.
The eclectic nature of the operation had taught Jim the value of delegating, although he kept an
eye on all activities. He was quick to demand a full report if a problem developed. He often made
firsthand inspections and conducted one-on-one meetings when he was told a difficulty was evolving with any one of his subsidiaries. At the same time, he was not known as a dictator. He did command respect due to his expertise and manner of treating employees.
Jim’s style of leadership was based on delegation and rewards. He paid his “lieutenants” handsome
salaries for their loyalty and expertise. The company offered a bonus plan based on departmental
return on investment. Any dishonest or unethical tactics received harsh treatment. Jim wanted only
positive publicity for the company.
As he pondered retirement, Jim knew the biggest issue was to choose a successor. None of his
children were interested in the job. Jim had four viable candidates: Marcie Benson, Vincent Will,
Richard Jorgenson, and John Cullen.
(continued)
Summary
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Marcie Benson was the youngest of the group at 47. She had single-handedly broken down the
company’s “good old boy” network. She held a powerful role as director of Logistics. She was
a strong advocate for women, minorities, and any other person she deemed underutilized. Her
efforts had resulted in tremendous profits for the company. She had won several community
awards.
Marcie was small and dynamic. She tended to see the world in terms of accomplishment. She was
kidded for “keeping score” on every front. Her manner was direct and to the point. She was not
prone to smiling or laughing, although Jim had been told that, away from work, Marcie was a completely different person. Marcie was also the classic team player, able to subsume her own ego for
the betterment of the group. Her technical skills were excellent.
Vincent Will was a technocrat. His understanding of computers and systems exceeded everyone
else’s. Vincent was impatient with people who failed to understand his systems. On the other hand,
he had bailed out people who had made mistakes and saved the company from several major problems with their computer systems.
Vincent was 53 years old. He held a master’s degree in computer science. He was a workaholic
with limited interpersonal skills. His technical skills, combined with his knowledge of the company’s
operations, made him a finalist for the CEO position.
Richard Jorgenson was 51 years old. He was probably the most different from Vincent Will. Richard
was director of Sales, a loose title that matched his fluctuating job description. Richard was a
people person, gifted at making people feel comfortable and happy. His style worked well with
members of the sales force who were willing to put in long hours to keep things moving. Richard
rewarded his staff with happy hours that included lunches, dinners, and small parties that he paid
for out of his own pocket.
Richard was quick moving, funny, and a back slapper. Some considered him a chauvinist, because
he used lots of “Little Missy” type language when dealing with female employees. Jim found it
interesting that Marcie Benson reported having “no problem” with Richard, because he was willing to identify talented, successful female sales reps and promote them to supervisory positions.
Richard’s other liabilities included inattention to detail and less sophisticated understanding of
how the organization functioned. Employee loyalty and human relations skills were his strongest
selling points.
John Cullen was Jim’s right-hand man. Most employees assumed John would be the successor,
because he had the most complete knowledge of how Jim ran the firm. John was 63 years old,
however, and on the verge of retirement. He had experienced one heart attack and openly talked
about moving on. At the same time, he had more than once voiced his pleasure at the idea of being
able to “take the reins” for a time.
On the surface, John seemed to be the ideal choice as a transitional leader. He was mature, intelligent, experienced, and good with people as well as a tremendous organizer and implementer.
Because he was approachable and easygoing, John was also probably the most popular senior
staff member.
Jim knew each candidate would be surrounded by high-quality senior staff members who would
help keep the company running smoothly. He also had time to train the new CEO. After speaking
with the people in human resources and formulating a series of criteria, Jim was ready to make
the choice.
(continued)
Critical Thinking
Chapter 5
Discussion Questions
1.
2.
3.
4.
5.
6.
Apply the trait theories of leadership to the four candidates.
Apply the contingency theories of leadership to the four candidates.
Apply the transformational theory of leadership to the four candidates.
What are the communication styles of the four candidates? Which is best for this position?
Which candidate appears to have the best team-building skills? Which would have the worst?
Which person should Jim choose? Defend your answer.
Key Terms
consideration A leadership behavior that expresses concern for employees by establishing a
warm, supportive, friendly climate.
content theories Explanations of the specific factors that motivate people, most notably in the
area of human needs.
expectancy An employee’s belief that working hard will result in a desired level of task performance being achieved.
goal What an individual is trying to accomplish; the object or aim of an action.
initiating structure A leadership behavior that organizes and defines what group members
should be doing.
instrumentality An employee’s belief that successful performance will be followed by rewards
and other desirable outcomes.
leadership Influencing behaviors in organizations.
power Control over formal and informal means of influence.
transformational leaders Individuals who engender trust, seek to develop leadership in others, exhibit self-sacrifice, and serve as moral agents; they focus themselves and their followers
on objectives that transcend the more immediate needs of the work group.
valence The value an employee assigns to the possible rewards and other work-related
outcomes.
Critical Thinking
Review Questions
1. Define leading, and explain how it is different from managing.
2. What is power, and what are the five main sources of power?
3. What are the four main categories of leadership theories?
4. Name the three trait theories of leadership.
5. Explain how someone deals with a confirmed and a refuted test when using the attribution
theory of leadership.
6. What two schools are associated with the behavioral theories of leadership?
Critical Thinking
Chapter 5
7. Name the situational theories of leadership.
8. What are the four styles of leadership in the Hersey and Blanchard situational leadership
model?
9. What are the four styles of leadership in path–goal theory?
10. Define motivation.
11. What are the five needs in Maslow’s hierarchy?
12. What are the two factors in Herzberg’s theory, and how do they influence workers?
13. What three needs are present in McClelland’s need theory?
14. What are the five steps in Adams’s equity theory?
15. What three motivational factors are present in expectancy theory?
16. Explain the relationships between goals and motivation in Locke’s approach.
Analytical Exercises
1. Explain whether each of these activities is an example of leadership or management:
•
•
•
•
creating a budget
making a speech to employees about a vision for the future
setting the goal to hire four new high-quality employees
comforting an employee who has just lost a loved one and was informed at work
2. Three tactics employees use to gain power include acclaiming, visibility, and impression management. Acclaiming is taking credit for someone else’s work or success. Visibility is making sure you are seen with the right people and in the right places. Impression management
involves manipulating people to think you hold greater status than you actually possess. Relate
these tactics to the sources of power described in this chapter.
3. Name five personal traits that you believe would make you an effective leader. Ask three of
your friends or classmates to make a similar list about you. Does your list agree with their list?
What can you learn from this?
4. How do the concepts provided in the attribution model of leadership explain why it is harder
for women and minority group members to be perceived as having “leadership potential”?
5. What common elements are present in Hersey and Blanchard’s situational leadership model,
path–goal theory, and transformational leadership theory? How do these theories differ from
one another?
6. Are there any common elements in Maslow’s hierarchy of needs, Herzberg’s motivationhygiene theory, and McClelland’s need theory? How are they related? What are the primary
differences between the three theories?
7. Explain how the concepts contained in Locke’s goal-setting theory can be incorporated into
Vroom’s expectancy theory. Explain how the concepts in Adams’s equity theory can be incorporated into expectancy theory.
The Leading Function: Groups,
Teams, and Communication
Digital Vision/Photodisc/Thinkstock
Learning Objectives
After completing this chapter, you should be able to:
•
•
•
•
Identify the differences and similarities between groups and teams.
Establish and successfully direct groups and teams.
Communicate effectively with others.
Manage organizational communication systems effectively.
6
Introduction
Chapter 6
6.1 Introduction
Chapter 5 described three major components of the leading function: power, leadership, and
motivation. This chapter examines two additional factors that play major roles in the degree
of success a manager achieves. The first, leading groups and teams, requires specific types of
skills for coordinating the activities of others. The second, communication, is the glue that holds
together groups and teams, as well as the entire organization.
In the first section of this chapter, we look at the differences and similarities between groups and
teams. Next, we consider techniques for building effective teams. In the following section, we
examine the nature of individual communication. Finally, we examine methods for effectively
managing communication systems within organizations.
MANAGEMENT IN PR AC TICE
The Changing Communication Landscape
The past three decades have witnessed an explosion of new technologies designed to connect
people in various ways. Face-to-face interactions with people around the world are now possible by
simply pressing a key. In a variety of ways, these new patterns of communication influence many of
the topics described in this chapter.
First, the immediacy of available information and interaction has increased the pace of business.
Online connections, by allowing access to all forms of data, offer the potential to speed up business activities ranging from research to the
coordination of complex tasks. Many projects can be examined in real time, thereby
shortening the time from idea development to final implementation. Second,
workers interact in new ways via various
personal communication devices. A decade
ago, many companies began to integrate
email systems into management programs.
Intranets and other forms of communication replaced letters, memos, faxes,
and other more outdated technologies.
Currently, companies communicate with
both internal and external publics in innovative new ways.
Anatoliy Babiy/iStock/Thinkstock
From the bakery that sends out tweets
▲▲Advances in technology have made interactions
notifying customers that a new batch of
with people around the world faster and easier
goodies is just leaving the oven to the
than ever.
Twelpforce social media team that interacts
with consumers at Best Buy, technology
has shifted the customer–salesperson interaction. Further, dissatisfied customers can more quickly
reach out to a wide audience to register complaints about a company. Many organizations, such
as Southwest Airlines, have social media monitors who respond to problems as quickly as possible.
Further, many managers have discovered that younger employees are far more comfortable sending instant messages to notify the company that they are sick or will be late to work. Several major
(continued)
Groups and Teams
Chapter 6
organizations, including IBM, now use social media venues as key methods to make contact with
individual workers.
Team and group interactions have been equally changed by innovative technologies. Workers
can complete tasks from remote locations (such as through virtual teams, described in this chapter). Instant contacts have moved many team meetings away from conference rooms and into
new spaces.
Informal groups communicate via these same tools. Friendships are formed and people follow
one another through Facebook and other pages. Gossip travels in new ways. Managers are faced
with the challenge of responding to these new methods of interaction, making sure negative
rumors do not spread widely and quickly to ruin an innocent employee’s reputation or standing in
the company.
The future of leading teamwork and communication appears to hold a wide array of new opportunities to improve business functioning. At the same time, company leaders will need to be vigilant
to ensure such technologies are not abused or used in malicious ways.
Discussion Questions
1. How can fast-moving communication negatively affect an employee via a rumor? What about a
company?
2. In what ways can social media be used to improve the workplace environment?
3. How can social media be used to improve relationships between top-level managers and firstline employees?
6.2 Groups and Teams
A common misconception about groups and teams is that they are the same thing. That is not
the case. A group consists of a collection of people, and a team is a unit of collective performance.
Let’s look more closely at the differences and similarities between the two.
Groups
A group consists of two or more people interacting who share collective norms and goals as
well as a common identity. For example, a group could be a collection of 12 employees meeting
to exchange information about how various company polices or procedures will affect them. In
business organizations, employees routinely encounter group activities. Two types of groups are
found in various companies: formal and informal.
Formal Groups
A formal group is established by the organization and seeks to achieve company goals and objectives. You can find evidence of the existence of a formal group in company documents, including
an organization chart, a management directive to form a group, or group meeting minutes. Three
common types of formal groups are work groups, committees, and project groups.
A work group consists of individuals who routinely perform organizational tasks. Work groups
are identified by an organizational chart. In a newspaper company, work groups likely would
be formed for the sports department, the local news, and the national/international news desk.
Accountants and production employees also are included in work groups around their assigned
responsibilities. A work group is sometimes known as a command group.
Groups and Teams
Chapter 6
Committees are groups assigned to various company operations and processes. Normally, committees are ongoing groups, such as the set of individuals assigned to the workplace safety committee or the employee benefits committee. Members of committees often have temporary
assignments, such as a one- or two-year term, after which someone else takes the position within
the group.
Project groups, or task forces, oversee a project or assignment until it is completed. A task force
may be assigned to write a report about a disaster such as a fire or accident in a plant. A project
group may be designated to redesign the interior of a retail store. Another project group may be
asked to develop and bring a new product or service to the marketplace. In each instance, the
group disbands after completing the assignment.
Informal Groups
An informal group emerges without the endorsement of organizational leaders and does not
have a designated structure or work toward organizational goals other than socialization and
friendship (Shirky, 2004). These associations are sometimes referred to as friendship groups.
Three forces tend to bring informal groups together: activities, shared sentiments, and interactions (Homans, 1950).
Activities drive the formation of many informal groups. They range from small groups that routinely play cards together during breaks to more elaborate company volleyball, softball, or bowling teams. A “lunch bunch” that meets every day for
meals has formed around an activity.
Shared sentiments suggest that people make friends
with and socialize with others who have the same
value sets. Some groups form due to political similarities. Others revolve around religion. In some
instances, groups of single mothers or company bachelors may form.
Interactions result from close physical associations.
People who work on the same floor of an office building are more likely to socialize and form friendships.
Those who labor at a remote location of a company
may also band together into an informal group.
Group Members
Formal and informal groups consist of four types of
members: the leader, opinion leaders, members in
good standing, and the gatekeeper. The leader directs
group activities. Formal leaders are assigned by the
organization, as opposed to informal leaders, which
Jupiterimages/Stockbyte/© Getty Images/Thinkstock
emerge based on the group’s wishes. Opinion leaders
▲▲Informal groups can form around an activity,
are those group members who are most closely aligned
such as eating lunch together.
with the leader. The name comes from their willingness to express group values. Members in good standing are individuals who are included in the group but do not share in any leadership function.
The last member, the gatekeeper, is one of the first three types: leader, opinion leader, or member
in good standing. The gatekeeper determines who will and will not be included in the group. At
Groups and Teams
Chapter 6
times, the entire group rather than a single individual may carry out the gatekeeping function
(Cartwright & Zander, 1953).
Teams
A team consists of a small group of people, with complementary skills, who work together to
achieve a common purpose and hold themselves mutually accountable for accomplishing certain
goals. The essence of a team is a common commitment. One similarity of teams and groups is
that both normally consist of from 2 to 10 employees. Both have leaders, opinion leaders, members in good standing, and provide a gatekeeping function. Both also seek various types of social
and organizational goals.
The differences between teams and groups occur in the area of unit performance. Groups
evolve into teams under the proper circumstances. A leader can tell the difference by observing
instances of shared sacrifice and commitment to the group’s success by individual members. A
group becomes a team when the following criteria are met (Katzenbach & Smith, 1999):
•
•
•
•
•
Leadership becomes a shared activity.
Accountability shifts from strictly individual to both individual and collective.
The group develops its own purpose or mission.
Problem solving becomes a way of life, not a part-time activity.
Effectiveness is measured by considering the group’s collective outcomes and products.
Effective teams begin with the right number of members. Too few members create problems in
terms of assigning tasks that members will be required to undertake. Too many members lead
to breakdowns in communication and the inclusion of additional personal agendas, which can
lead to conflict. The most common types of teams employed in today’s workplace include crossfunctional teams, virtual teams, and self-managed teams.
Cross-Functional Teams
Organizations today emphasize horizontal integration, problem solving, and information sharing.
They also attempt to eliminate the tendency of workers to work in silos, or groups of individuals
who are from the same department or perform the same type of work, because a silo prohibits communication across departments within the organization. Members of cross-functional
teams come together from different functional areas of the organization to work on a particular
problem or task and work together to reach company goals. They share information, explore new
ideas, work toward creative solutions, and do not limit their ideas to their own functional areas.
Virtual Teams
The use of the Internet and specially designed software can support meetings between geographically dispersed employees. Virtual teams employ Internet and digital technologies (such as an
intranet, web conferencing, teleconferencing, and videoconferencing) to achieve common goals,
such as collaboration, sharing information, solving problems, and scheduling activities. Virtual
teams are formed for short-term projects as well as long-range, ongoing issues.
Organizations create virtual teams to reduce travel costs and allow people from remote locations
to collaborate. They are flexible in the sense that meetings can be arranged fairly quickly, especially when compared to the time spent traveling to a distant place. Both Volvo and Lockheed
Martin have discovered the advantages of these types of teams (Ante, 2003; Naughton, 2003).
Groups and Teams
Chapter 6
Virtual teams have three limitations, two of which reduce their ability to take on team-like characteristics. First, in virtual face-to-face meetings (conducted using webcams and microphones),
paraverbal cues (voice tone and inflection) and nonverbal cues (eye contact, distance, gestures,
and facial expression) cannot as easily be transmitted. This limits the richness of communications between members. Second, socialization is reduced. As meetings conclude and members go
on to other work, they sign off the meeting website. They cannot remain “in the room” to discuss
issues and fraternize. The third problem associated with virtual teams is that members must
meet at differing times, depending on location. A meeting that begins at 4:00 p.m. in San Diego
is taking place at 7:00 p.m. in New York, a time when most people have left the office. Scheduling
becomes even more problematic for international virtual meetings.
Perhaps a better name for this type of operation would be a virtual group, because virtual collaborations do not generate the same trust level and member interdependence that are found in
actual teams. At the same time, virtual teams with members from widely dispersed locations can
deal effectively and efficiently with issues in a timely fashion. Consequently, their use has grown
in popularity in many larger companies. The increasing internationalization of business has also
led to increased usage of virtual teams.
Self-Managed Teams
Self-managed work teams are groups of employees who perform highly related or interdependent
jobs and take on many of the responsibilities of their former supervisors. These responsibilities can
include planning and scheduling work, assigning tasks to team members, controlling the pace of
the work, making operating decisions, and taking action with problems. Things to consider when
introducing self-managing teams are strength and makeup of team norms, the types of tasks the
team undertakes, and the reward structure, which can affect how well the team performs.
Stages of Team Development
Both groups and teams go through stages of development. One theory proposes five stages of
development: forming, storming, norming, performing, and adjourning (Tuckman, 1965). Let’s
look at each of the stages, keeping in mind that the different stages do not necessarily take the
same amounts of time. Figure 6.1 depicts the relationships between the stages of group performance with the level of dependence and interdependence among members.
Forming
Forming is the process that takes place when members get oriented to the group and start getting to know each other. This stage is characterized by a high degree of uncertainty as members
try to break the ice, figure out who is in charge, and determine what the group’s goals will be. At
this point trust is low, and people tend to hold back to see who takes charge and how that person
will lead. The formal leader may assert some level of authority to establish the team’s operation
and build trust among members.
Storming
Storming takes place as the presence of individual personalities, roles, and conflicts emerge
within the group. The storming stage may be short or very long and painful, depending on
the clarity of goals and the commitment and maturity of the members. It is a time of testing.
Individuals test the leader’s policies and try to figure out where they fit in the group. Subgroups
may take shape. Groups may stall here if power and political struggles go unconstrained and turn
into open rebellion. Groups that overcome this stage do so because a respected member, usually
not the leader, challenges the group to resolve its differences.
Groups and Teams
Chapter 6
Figure 6.1 Degree of independence, dependence, and interdependence
As a group evolves, individuals gradually give up a sense of independence in favor of
greater interdependence.
Degree of
independence
Degree of
dependence and
interdependence
Low
Performing
High
Norming
Storming
High
Adjourning
Forming
Low
f06.01_MGT330.ai
Norming
In the norming stage, conflicts have been resolved. Close relationships begin to develop and
unity starts to evolve. Teams set guidelines related to what they will do together and how they
will accomplish tasks. Questions about team authority have been resolved through frank discussions. A feeling of team spirit exists because members have found their role within the group.
Positive group cohesiveness can become a major outcome of the norming stage.
Norms are rules governing behaviors in the group. As shown in Table 6.1, norms apply to three
main areas in both formal and informal groups. In fact, norms often overlap between the two.
Norms can be formally or informally sanctioned, based on approval or disapproval by group
members.
Table 6.1 Types of norms
Category
Examples
Effort
Time on the job
Units of production
Sales calls, sales totals, follow-ups with c...
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