leadership and organizational behavior, Sintesi del corso di Sociologia Delle Organizzazioni

Scarica leadership and organizational behavior e più Sintesi del corso in PDF di Sociologia Delle Organizzazioni solo su Docsity! 23 Building Blocks Part I lays the foundation for understanding the processes of leadership. After studying Part I, you will be able to define the basic elements of leadership and be ready to integrate them to understand more complex leadership processes. Leadership involves interaction among several key elements: a leader, followers, and the situation. Since its beginnings in the West in the late nineteenth century, the formal study of leadership has generated many definitions of the concept. As with any social phenomenon, culture strongly influences not only our definitions of leadership but also how we actually lead and what we expect of our leaders. Tracing the history of the field can help us understand how our current views of leadership have developed and enable us to become aware of how the process of leadership and our images and expectations of effective leaders change with organizational, social, and cultural evolutions. Chapter 1 provides a working definition of leadership and effectiveness, explores the reasons why we need leadership, describes the roles and functions of leaders, and discusses their impact. Chapter 2 focuses on understanding the role of culture in leader- ship. Several models for describing culture are presented, and the roles of gender and diversity in leadership are explored. Chapter 3 presents a history of the field of leadership and reviews the theories that provide the foundation for current approaches. Individual differences that affect leadership are discussed in Chapter 4. They include demographic differences, values, abilities, skills, and several personality traits. Chapter 5 reviews the concept of power and its importance to leadership. Part I M01_NAHA0187_07_GE_C01.indd 23 09/09/14 9:25 AM 24 Chapter 1 Definition and Significance of Leadership The Leadership QuesTion Some leaders are focused on getting things done while others put taking care of their followers first. Some look at the big picture, and others hone in on the details. Is one approach better than the other? Which one do you prefer? Who is a leader? When are leaders effective? These age-old questions appear simple, but their answers have kept philosophers, social scientists, scholars from many disciplines, and business practitioners busy for many years. We recognize bad leadership. Bad leaders are dishonest, self-centered, arrogant, disorganized, and uncommunicative. However, being honest, selfless, organized and communi- cative are necessary, but not sufficient to be a good leader. This chapter defines leadership and its many aspects, roles, and functions. EffEctivE LEadErship We recognize effective leaders when we work with them or observe them. However, leadership is a complex process, and there are many different definitions of leadership and leadership effectiveness. After studying this chapter, you will be able to: 1. Define leadership and leadership effectiveness. 2. Discuss the major obstacles to effective leadership. 3. Compare and contrast leadership and management. 4. List the roles and functions of leaders and managers. 5. Explain the changes in organizations and how they affect leaders. 6. Summarize the debate over the role and impact of leadership in organizations. M01_NAHA0187_07_GE_C01.indd 24 09/09/14 9:25 AM Chapter 1 • Definition and Significance of Leadership 27 effective when his team is winning. Students’ scores on standardized tests determine a school principal’s effectiveness. In all cases, the factors that make the leader effective are highly complex and multifaceted. Consider the challenge faced by the executives of the New York Times, one of the world’s most respected newspapers. In 2002, the paper won a record seven Pulitzer prizes, a clear measure of success. A year later, however, the same executive editor team that had led the company in that success was forced to step down because of plagiarism scandals (Bennis, 2003). The execu- tive team’s hierarchical structure, autocratic leadership style, and an organizational culture that focused on winning and hustling were partly blamed for the scandals (McGregor, 2005). By one measure, the Times was highly effective; by another, it failed a basic tenet of the journalistic profession. Politics further provide examples of the complexity of defining leadership effective- ness. Consider former U.S. president Clinton, who, despite being impeached in the U.S. Senate, maintained his popularity at the polls in 1998 and 1999; many voters continued to consider him effective. Hugo Chavez, the late president of Venezuela, was adored by his supporters for his advocacy for the poor and despised by his opponents for his dictatorial style. Whether any of these leaders is considered effective or not depends on one’s perspective. General Motors’ recent troubles further illustrate the need for a broad definition of effectiveness. an integrative definition The common thread in all these examples of effectiveness is the focus on outcome. To judge their effectiveness, we look at the results of what leaders accomplish. Process issues, such as employee satisfaction, are important but are rarely the primary indicator of effectiveness. Nancy McKintry, CEO of Wolters Kluwer, an information services company, states, “At the end of the day, no matter how much somebody respects your intellect or your capabilities or how much they like you, in the end it is all about results in the business context” (Bryant, 2009a). The executive editorial team at the New York Times delivered the awards despite creating a difficult and sometimes hostile culture. Voters in the United States liked President Clinton because the economy flourished under his administration. Hugo Chavez survived many challenges because he pointed to specific accomplishments. One way to take a broad view of effectiveness is to consider leaders effective when their group is successful in maintaining internal stability and external adaptability while achieving goals. Overall, leaders are effective when their followers achieve their goals, can function well together, and can adapt to changing demands from external forces. The definition of leadership effectiveness, therefore, contains three elements: 1. Goal achievement, which includes meeting financial goals, producing quality products or services, addressing the needs of customers, and so forth 2. Smooth internal processes, including group cohesion, follower satisfaction, and efficient operations 3. External adaptability, which refers to a group’s ability to change and evolve successfully The Leadership QuesTion—revisiTed So focusing on the task, on people, on the big picture, on the details, and so forth can all be part of lead- ership. What works depends on the leader, the followers, and the situation. While some things gener- ally don’t work, for example using fear and threats in all situations, there are many different styles and approaches to leading that can be effective. Understanding the situation is key. M01_NAHA0187_07_GE_C01.indd 27 09/09/14 9:25 AM 28 Part I • Building Blocks Why do We Need Leaders? Leadership is a universal phenomenon across cultures. Why is leadership necessary? What needs does it fulfill? Do we really need leaders? In the business world, new leaders can influence a firm’s credit rating by affecting the confidence of the financial community. For example, while Xerox weathered considerable financial and leadership problems in 2000 and 2001, the selection of Anne Mulcahy, a company veteran, as CEO helped ease stakeholders’ concerns. In other sec- tors, a city or nation might feel a sense of revival and optimism or considerable concern when a new leader comes to power, as was the case in the 2008 U.S. presidential elections with the win of Barack Obama. We believe that leadership matters. The reasons why we need leaders closely fall in line with the functions and roles that leaders play and are related to the need or desire to be in collectives. Overall, we need leaders for following reasons: • To keep groups orderly and focused. Human beings have formed groups and societies for close to 50,000 years. Whether the formation of groups itself is an instinct or whether it is based on the need to accomplish complex tasks too difficult for individuals to undertake, the existence of groups requires some form of organization and hierarchy. Whereas individual group members may have common goals, they also have individual needs and aspirations. Leaders are needed to pull the individuals together, organize, and coordinate their efforts. • To accomplish tasks. Groups allow us to accomplish tasks that individuals alone could not undertake or complete. Leaders are needed to facilitate that accomplishment, and to provide goals and directions and coordinate activities. • To make sense of the world. Groups and their leaders provide individuals with a percep- tual check. Leaders help us make sense of the world, establish social reality, and assign meaning to events and situations that may be ambiguous. • To be romantic ideals. Finally, as some researchers have suggested (e.g., Meindl and Ehrlick, 1987), leadership is needed to fulfill our desire for mythical or romantic figures who represent us and symbolize our own and our culture’s ideals and accomplishments. research on significance of Leadership Despite the common belief that leaders matter, considerable debate among leadership schol- ars addresses whether leadership actually affects organizations. Some researchers suggest that environmental, social, industrial, and economic conditions determine organizational direction and performance to a much higher degree than does leadership (Brown, 1982; Cyert and March, 1963; Hannan and Freeman, 1977; Salancik and Pfeffer, 1977a). External factors, along with organizational elements such as structure and strategy, are assumed to limit the leader’s decision-making options, reducing the leader’s discretion. For example, Salancik and Pfeffer (1977a), in a study of the performance of mayors, found that leader- ship accounted for only 7 to 15 percent of changes in city budgets. Similarly, Lieberson and O’Connor (1972) found that whereas leadership has minimal effects on the performance of large corporations (accounting for only 7 to 14 percent of the performance), company size and economic factors show considerable links to firm performance. Additionally research about managerial discretion indicates that managers have less influence on organizations than envi- ronmental and internal organizational factors (Finkelstein and Hambrick, 1996; Hambrick and Finkelstein, 1987). Other research findings suggest that leadership does indeed have an impact. For example, in reevaluating Lieberson and O’Connor’s 1972 study, Weiner and Mahoney (1981) M01_NAHA0187_07_GE_C01.indd 28 09/09/14 9:25 AM Chapter 1 • Definition and Significance of Leadership 29 Leading Change The Container Store “You can build a much more wonderful company on love than you can on fear,” says Kip Tindell, the CEO of the highly successful Container Store chain (Klein, 2013). He has put that principle to work in all aspects of his business. Chances are that if you have engaged in a home or office organization project, you have heard of the Container Store. The privately held company offers creative, practical, and innovative solutions to a multitude of storage problems and has established an enviable track record of success and growth of 26 percent growth per year (Container Store’s secret growth story, 2013). The company has been consistently ranked as one of the best places to work in, and it considers its employees its greatest asset. Its unique culture and treating its employees well are other areas in which it claims leadership (Container Store Web site, 2013). One of the principles that the company espouses is that “one great person equals three good people” (Bliss, 2011). Kip Tindell says, “We talk about getting the customer to dance . . . every time she goes into the closet . . . because the product has been designed and sold to her so carefully” (Birchall, 2006). Achieving this level of service takes a dedicated and, the company believes, happy employees that the company carefully recruits (often mostly through its existing employees) and trains. Whereas in comparable companies, the average salesperson gets about eight hours of training during the first year on the job, it is not unusual for Container Store salespeople to get over 200 hours of training before a new store opens (Birchall, 2006). In addition to a family-friendly work environ- ment, the company covers close to 70 percent of its employees’ health-care insurance costs, pays 50 to 100 percent higher wages than its competitors’ pay, and provides flexible shifts to accommodate its employees’ work–life balance. The investment in employees has paid off. The Container Store has an annual turnover of about 10 percent, compared with 90 percent for most retail stores. Its founders, Kip Tindell and Garrett Boone, believe that the unique culture and the success of the company are inseparable. Sources: Birchall, J. 2006. “Training improves shelf life,” Financial Times, March 8. http://search.ft.com/ft Article?queryText=Kip+Tindell&y=0&aje=true&x=0&id=060307009431 (accessed July 8, 2007); Bliss, J. 2011. “Container store—Flames of trust,” SatMetrix. http://www.netpromoter.com/netpromoter_ community/blogs/jeanne_bliss/2011/10/24/the-container-store—flames-of-trust (accessed May 30, 2013); Container Store’s secret growth story, 2013. http://www.youtube.com/watch?v=uDmfbrcGxSk (accessed May 30, 2013); Container store website, 2013. http://standfor.containerstore.com/putting-our-employees- first/ (accessed October 6, 2013); Containing Culture, 2007. Chain Store Age (April): 23–24; Klein, J. 2013. “Put people first,” Under 30 CEOs. http://under30ceo.com/put-people- first-reflections-from-kip-tindell-ceo- the-container-store/ (accessed May 30, 2013). find that a change in leadership accounts for 44 percent of the profitability of the firms stud- ied. Other researchers (Day and Lord, 1988; Thomas, 1988) indicate that the early results were not as strong as originally believed, and recent studies suggest that leadership can have an impact by looking at the disruption that can come from changes in leadership (Ballinger and Schoorman, 2007) and find a strong effect of CEOs on company performance (Mackey, 2008). Additionally, research continues to indicate that leadership has a positive impact on a M01_NAHA0187_07_GE_C01.indd 29 09/09/14 9:26 AM 32 Part I • Building Blocks The debates suggest that for those who draw a distinction between leaders and managers, leaders demonstrate attributes that allow them to energize their followers, whereas managers simply take care of the mundane and routine details. Both are necessary for organizations to function, and one cannot replace the other. By considering the issue of effectiveness, many of the arguments regarding the differences between leadership and management can be clarified. For example are managers who motivate their followers and whose departments achieve all their goals simply effective managers, or are they leaders as well? Being an effective manager often involves performing many of the functions that are attributed to leaders with or without some degree of charisma. The distinctions drawn between leadership and management may be more related to effectiveness than to the difference between the two concepts. An effec- tive manager of people provides a mission and sense of purpose with future-oriented goals, initiates goals and actions, and builds a sense of shared values that allows followers to be focused and motivated, all actions that are attributed to leaders. Therefore, effective manag- ers can often be considered leaders. Management professor Henry Mintzberg further suggests that good leaders must manage their team and organizations as well. By focusing too much on leadership, at the expense of management, much of the hard work needed to make organiza- tions effective may be left unattended. He states: “Being an engaged leader means you must be reflective while staying in the fray-the hectic, fragmented, never-ending world of managing” (Mintzberg, 2009). Thus, any manager who guides a group toward goal accomplishment can be consid- ered a leader, and any good leader must perform many management functions. Much of the distinction between management and leadership comes from the fact that the title leader assumes competence. Consequently, an effective and successful manager can be considered a leader, but a less- competent manager is not a leader. Overall, the debate over the difference between the two concepts does not add much to our understanding of what constitutes good leadership or good management and how to achieve these goals. It does, however, point to the need felt by many people and organizations for effective, competent, and visionary leadership/manage- ment. This book does not dwell on the distinction between the two concepts and uses the terms interchangeably. rOLEs aNd fuNctiONs Of LEadErs Although leaders in different organizations and different cultures perform dissimilar functions and play unique roles, researchers have identified a number of managerial roles and functions that cut across most settings. Table 1-2 Managers and leaders Managers leaders Focus on the present Focus on the future Maintain status quo and stability Create change Implement policies and procedures Initiate goals and strategies Maintain existing structure Create a culture based on shared values Remain aloof to maintain objectivity Establish an emotional link with followers Use position power Use personal power M01_NAHA0187_07_GE_C01.indd 32 09/09/14 9:26 AM Chapter 1 • Definition and Significance of Leadership 33 Managerial roles To be effective, leaders perform a number of roles. The roles are sets of expected behaviors ascribed to them by virtue of their leadership position. Along with the basic managerial func- tions of planning, organizing, staffing, directing, and controlling, leaders are ascribed a number of strategic and external roles, as well, which are discussed in detail in Chapter 7. Furthermore, one of the major functions of leaders is to provide their group or organization with a sense of vision and mission. For example, department managers need to plan and organize their depart- ment’s activities and assign various people to perform tasks. They also monitor their employees’ performance and correct employees’ actions when needed. Aside from these internal functions, managers negotiate with their boss and other department managers for resources and coordinate decisions and activities with them. Additionally, many department managers must participate in strategic planning and the development of their organization’s mission beyond the immediate focus on their own department or team. One of the most cited taxonomies of managerial activities is proposed by Henry Mintzberg (1973), who added the 10 executive roles of figurehead, leader, liaison, monitor, disseminator, spokesperson, entrepreneur, disturbance handler, resource allocator, and negotiator to an already long list of what leaders do. Mintzberg’s research further suggests that few, if any, managers perform these roles in an organized, compartmentalized, and coherent fashion. Instead, a typical manager’s days are characterized by a wide variety of tasks, frequent interruptions, and little time to think or to connect with their subordinates. Mintzberg’s findings are an integral part of many definitions of leadership and management. The roles he defines are typically considered the major roles and functions of leaders. Interestingly, research suggests that male and female managers may perform their roles dif- ferently. In her book, The Female Advantage: Women’s Way of Leadership, Sally Helgesen (1995) questions many myths about the universality of management behaviors. Through case studies of five female executives, Helgesen faithfully replicated the methodology used 20 years earlier by Mintzberg in his study of seven male managers. Mintzberg had found that his managers often worked at an unrelenting pace, with many interruptions and few nonwork-related activities. The men felt that their identity was tied directly to their job and often reported feeling isolated, with no time to reflect, plan, and share information with others. They also reported having a complex network of colleagues outside work and preferring face-to-face interaction to all other means of communication. Helgesen’s findings of female managers matched Mintzberg’s only in the last two cate- gories. Her female managers also were part of a complex network and preferred face-to-face communication. The other findings, however, were surprisingly different. The women reported working at a calm, steady pace with frequent breaks. They did not consider unscheduled events to be interruptions; they instead viewed them as a normal part of their work. All of them reported working at a number of nonwork-related activities. They each cultivated multifaceted identities and, therefore, did not feel isolated. They found themselves with time to read and reflect on the big picture. Additionally, the female executives scheduled time to share information with their colleagues and subordinates. The gender differences found between the two studies can be attributed partly to the 20-year time difference. However, Helgesen’s suggestions about a different female leadership style, which she calls “the web,” are supported by a number of other research and anecdotal studies. Helgesen’s web is compared to a circle with the manager in the center and interconnected to all other parts of the department or organization. This view differs sharply from the traditional pyramid structure common in many organizations. Chapter 2 further explores the gender differences in leadership. M01_NAHA0187_07_GE_C01.indd 33 09/09/14 9:26 AM 34 Part I • Building Blocks functions of the Leader: creation and Maintenance of  an Organizational culture One of the major functions of leaders is the creation and development of a culture and cli- mate for their group or organization (Nahavandi and Malekzadeh, 1993a; Schein, 2010). Leaders, particularly founders, leave an almost-indelible mark on the assumptions that are passed down from one generation to the next. In fact, organizations often come to mirror their founders’ personalities. Consider, for example, how Starbucks, the worldwide provider of gourmet coffee, reflects the dreams and fears of its founder, Howard Schultz (see Leading Change case in Chapter 10). The company is known for its generous benefit package and its focus on taking care of its employees. Schultz often repeats the story of his father losing his job after breaking his leg and the devastating and long-lasting effect this event had on him and his family (George, 2007). As is the case in many other organizations, the founder’s style, or in the case of Starbucks, the founder’s family history, has an impact on the culture of an organization. If the founder is workaholic and control oriented, the organization is likely to push for fast-paced decision making and be centralized. If the founder is participative and team oriented, the organization will be decentralized and open. Norm Brodsky, a veteran entre- preneur who created several businesses, realized how much his hard-driving personality affected the culture of his company. He also realized that his wife and partner’s more caring style was having a positive impact on employees, so he worked on softening his own style and supporting her initiatives (Brodsky, 2006). The leader’s passion often translates into the mission or one of the primary goals of the organization, as is the case of Howard Schultz for Starbucks. Similarly, David Neeleman’s passion for customers and high-quality service (see Section “Leadership in Action” at the end of this chapter) has shaped the management of all the companies Neeleman has founded. The leaders set the vision and direction and make most, if not all, of the decisions regarding the various factors that will shape the culture (Figure 1-1). Leaders are role models for other organizational members. They establish and grant the status symbols that are the main artifacts of organizational culture. Followers take their cues from the leaders on what behaviors are and are not acceptable. For example, Stephen Oesterle, senior vice president at Medtronics leads by example in two ways. As the leader in charge of Organizational Culture Leader Role Modeling Reward System Hiring Decisions Strategy & Structure Vision & Mission figurE 1-1 Leader’s Functions in Shaping Organizational Culture M01_NAHA0187_07_GE_C01.indd 34 09/09/14 9:26 AM Chapter 1 • Definition and Significance of Leadership 37 to followers, and setting deadlines. These activities are considered an inherent part of an effec- tive leader’s behaviors. Similarly, the widely used concept of motivation to manage (Miner and Smith, 1982) includes desire for power and control over others as an essential component. WhaT do You do? You have started on a new job, and based on the interview and discussion with people prior to accepting the job you were led to believe that the company strongly believes in employee participation, engagement, and flexibility. A couple of months of working with your new boss, however, all you see is command and control, with little opportunity for you to provide any input. What do you do? New roles for Leaders With the constant need for innovation, intense global competition, economic pressures, and changing demographics, organizations are changing drastically. As a result, many of the traditional leadership functions and roles are changing as well. Figure 1-2 presents the traditional control-oriented model and the new result-oriented model for leaders in organizations. The chang- ing environment for organizations has forced us to reconsider our expectations and requirements for leadership. Effective leaders of diverse and global teams are not necessarily in control of the group. They might need facilitation and participation skills much more than initiation-of-structure skills. For example, employees in traditional organizations are responsible only for production; the planning, leading, and controlling functions, as well as the responsibility for results, fall on the manager (see Figure 1-2). An increasing number of organizations, however, are shifting the activ- ities and responsibilities typically associated with managers to employees. Managers are expected to provide the vision, get the needed resources to employees, act as support persons, and get out of employees’ way. The employees, in turn, learn about the strategic and financial issues related to their job, plan their own activities, set production goals, and take responsibility for their results. Many executives have adopted new management techniques to help them with the chal- lenges inherent in the new roles for leaders. A recent article in Entrepreneur featured several Leader assumes responsibility Employees and leader assume responsibility Do Results Lead Provide Direction Lead Control Control Plan and Organize Do Results Traditional Control-Oriented Leadership Current Result-Oriented Leadership Plan Organize figurE 1-2 Control Versus Results-Oriented Leadership M01_NAHA0187_07_GE_C01.indd 37 09/09/14 9:26 AM 38 Part I • Building Blocks business leaders and their ideas about how leadership is changing. When thinking about what defines leadership, Ted Devine, CEO of a specialized online business insurance company, states: “No walls, no barriers, no hierarchy. Everybody can talk to everybody. Everybody can partici- pate in a decision. We work together” (5 influential CEOs, 2013). Similarly, Scott Abel, CEO of Spice Works, a network management company, believes that the role of leader is to capture the energy of his employees. The idea of cooperation and ownership of the organization are also something that Sheila Johnson, cofounder of BET network embraces. Curtis Symond, who works at BET, says: “Above all else, Sheila leads by example through her passion. It’s difficult to work with her, be around all of her excitement and energy, and not want to join in and get involved” (5 influential CEOs, 2013). Harnessing employees’ ideas and engaging them in the goals of the organization is increas- ingly a key role for leaders. When Rick Sapio was the CEO of the 37-employee New York City Mutual.com, a mutual fund advisory company, he knew that his business was high pressure with little time to stay in touch with his employees (Buchanan, 2001). Recognizing the importance of involving employees, however, Sapio created “Hassles,” an electronic mailbox through which employees could express their concerns and ideas with a guarantee from the CEO that they will be addressed within a week. For those who preferred to see the boss in person, Sapio scheduled one hour each week in a conference room (rather than his office, which seemed inaccessible) where anyone could drop in to give him input. Jeffrey Immelt, CEO of General Electric, has made learning and getting to hear everybody’s ideas one of his priorities. His predecessor, Jack Welch, notes that a great leader needs to “get under the skin of every person who works for the company” (Hammonds, 2004: 32). Leaders at large companies such as Procter & Gamble, Whole Foods, and Toyota, as well as small start-ups such as Evernote, practice being egalitarian and cooperative. Their priorities are fast decision making, training, and innovation. The new leadership styles are not limited to business organizations; they can also be seen in government and other not-for-profit organizations. Harry Baxter, chairman and CEO of Baxter Healthcare in Deerfield, Illinois, likes to focus on doing the right thing instead of being right. He suggests, “I have very few definitive answers, but I have a lot of opinions” (Kraemer, 2003: 16). Philip Diehl, former director of the U.S. Mint, and his leadership team transformed the stodgy government bureaucracy into an efficient and customer-centered organization by asking ques- tions, listening to stakeholders, creating a sense of urgency in employees, and involving them in the change (Muio, 1999). These changes also occur in local, state, and federal government agen- cies. For example, Ron Sims, who was recognized in 2006 as one of the most innovative public officials, is known for always looking for common ground while operating from a clear set of principles (Walters, 2006). Ron Sims is also known for leading by example. When he talked about county employees adopting a healthier lifestyle, he started eating better and biking and lost 40 pounds (Walters, 2006). These leaders leave their top-floor offices to keep in touch with the members of their organizations. Given the rapid pace of change and complexity of the environment in which many organizations operate, cultivating extensive sources of information and involving many people in the decision-making process are essential. factors fueling changes A number of external and internal organizational factors are driving the changes in our organi- zations and in the role of leaders and managers (Figure 1-3). First, political changes worldwide are leading to more openness and democracy. These political changes shape and are shaped by M01_NAHA0187_07_GE_C01.indd 38 09/09/14 9:26 AM Chapter 1 • Definition and Significance of Leadership 39 images of what is considered to be appropriate leadership. With the fall of the Soviet Union at the end of the twentieth century, the world has seen a spread in democratic principles aimed at power sharing. Uprising in North Africa and the Middle East and the Arab Spring movement demonstrated the desire of many for more openness and democracy. In the United States, the public continues to expect transparency in both the private and the public sectors. Politicians are forced to share details of their past and their personal life and justify to the public many, if not all, of their decisions. Communities increasingly demand participation in the decisions regarding their schools, health-care systems, and environment. Second, with the worldwide economic downturn, increasing global and local competi- tion, and complex and fast-changing technologies, numerous organizations struggle for sur- vival and to justify their existence. Many are forced to reconsider how they provide goods and services to their customers and to the public and to reevaluate the assumptions they held as basic truths. For example, while Unions in the United States are struggling for both mem- bership and a new identity, in some cases, their leadership has succeeded by focusing on cooperation with management, something that would have been unimaginable a few years back. Monty Newcomb, a shop steward at a chemical plant in Calvert City Kentucky, worked with his union and with management to integrate trust and team building between union and management with the traditional collective bargaining process (Davidson, 2013). This new collaboration took a while to take hold but eventually resulted in both groups accomplishing their goals, increasing efficiency and quality, and preventing the company from shipping jobs overseas. Another key factor fueling changes in leadership is the diversity in the United States and many other countries (Figure 1-4). Demographic changes that lead to increased diversity in the various groups and organizations push leaders to consider this diversity when making decisions. Many countries include similar or even greater cultural diversity. For example, Malaysia’s popu- lation is highly diverse and consists of Malays, Chinese, Indians, Arabs, Sinhalese, Eurasians, and Europeans, with the Muslim, Buddhist, Daoist, Hindu, Christian, Sikh, and Shamanistic religions all practiced (World Fact Book: Malaysia, 2013). Although the majority of Singapore’s population of more than 4 million is Chinese, it also includes Malays, Indians, and Eurasians. As a result, the country has four official languages: English, Malay, Mandarin, and Tamil (World Changes in Organizations and their Leadership Wo rld wid e Po liti cal Ch ang es Demographic Changes Increased Global and Local Competition figurE 1-3 Factors Fueling Changes in Organizations and Their Leadership M01_NAHA0187_07_GE_C01.indd 39 09/09/14 9:26 AM 42 Part I • Building Blocks one-person show. The hierarchical structure of many organizations makes change difficult. Old cultures resist change. Few organizations truly reward enterprising employees and managers for crossing the traditional hierarchical barriers. Instead, most organizations continue to reward their leaders for tried-and-true approaches or sometimes for nonperformance- and nonproductivity- related behaviors, despite the lack of success (Luthans, 1989). Marcus Buckingham, a researcher at the Gallup Organization, has studied global leadership practice for 15 years. According to Buckingham, “The corporate world is appallingly bad at capitalizing on the strengths of its peo- ple” (LaBarre, 2001: 90). Gallup’s extensive surveys show that employee engagement can have a considerable positive impact on an organization’s performance. Recent surveys of employees in the United States by the Conference Board indicate the low level of overall satisfaction with jobs, at 47 percent (Conference Board, 2012). Other research indicates that job satisfaction is lower in larger companies with more bureaucracy, lower autonomy, and low responsibility (Wall Street Journal, 2006). Few organizations take full advantage of their employees’ input. Tom Peters, the well-known management consultant, suggests that while business leaders focus on strategy, they often “skip over the incredibly boring part called people,” thereby failing to take advantage of one of the most important aspects of their organization (Reingold, 2003: 94). In addition, changing the established behaviors of managers is very difficult. John Kotter, Harvard Business School professor and noted authority on change, suggests, “The central issue is never strategy, structure, culture, or systems. The core of the matter is always about changing the behavior of people” (Deutschman, 2005). In addition, although they might spend a great deal of time working in teams, employees are still rewarded for individual performance. In other words, our reward structures fail to keep up with our attempts to increase cooperation among employees and managers. Furthermore, many employees are not willing or able to accept their new roles as partners and decision mak- ers, even when such roles are offered to them. Their training and previous experiences make them balk at taking on what they might consider to be their leader’s job. Even when organiza- tions encourage change, many leaders find giving up control difficult. Many receive training in the benefits of empowerment, teams, and softer images of leadership, but they simply continue to repeat what seemingly worked in the past, engaging in what researcher Pfeffer calls substitut- ing memory for thinking (1998). With all that training on how to be in charge and in control, allowing employees to do more might appear to be a personal failure. Either because of years of traditional training or because of personality characteristics that make them more comfortable with control and hierarchy, managers’ styles often create an obstacle to implementing necessary changes. Research about children’s images of leadership indicates that the belief that leaders need to be in control develops early in life. Children, particularly boys, continue to perceive a sex-typed schema of leaders: Leaders are supposed to have male characteristics, including domi- nance and aggression (Ayman-Nolley, Ayman, and Becker, 1993). Summary and Conclusions A leader is any person who influences indi- viduals and groups within an organization, helps them in the establishment of goals, and guides them toward achievement of those goals, thereby allowing them to be effective. Leaders are needed because they create order and organization in groups, allowing them to achieve their goals; they help people make sense of the world and can serve as ideal and romantic symbols for their M01_NAHA0187_07_GE_C01.indd 42 09/09/14 9:26 AM Chapter 1 • Definition and Significance of Leadership 43 followers. To be effective, leaders must help the organization maintain internal health and external adaptability. Despite the apparent simplicity of the definitions of leadership and effectiveness, both are difficult concepts to implement. Various studies propose separate defi- nitions for leadership and management. The activities performed by leaders, however, are similar to those typically considered the domain of effective managers. Although some view the roles of leaders and manag- ers as being different, effective, and compe- tent, managers are often also leaders within their groups and organizations. In addition to performing the traditional managerial roles and duties, leaders also play a special role in the creation of a culture for their organiza- tions. They can affect culture by setting the vision and direction, making direct decisions regarding reward systems, hiring other man- agers and employees, and being role models for others in the organization. The role of leaders is changing with our shifting expecta- tions and global and organizational pressures. Leaders find themselves providing more vision and direction and focusing on results rather than command and control. While new roles take hold slowly, political, economic, demographic, and social changes drive the need for change. However, leaders find use of traditional models, lack of involvement of followers, and falling back on old practices hard obstacles to overcome. Review and Discussion Questions 1. What are the essential components of the definition of leadership? 2. Why do we need leaders? 3. How could structure and strategy limit leader- ship decision-making? 4. Provide one example each of an effective leader and a successful leader. Consider how they differ and what you can learn from each. 5. What are the obstacles to effective leadership? 6. Based on your knowledge of the field of management and your personal definition of leadership, how are management and leader- ship similar or different? How can the differ- ences be reconciled? How do these differences add to our understanding of leadership? 7. How are many of the traditional leadership functions and roles changing in today’s world? 8. How are political changes affecting the role of leaders? 9. Why is job satisfaction lower in companies with a greater degree of bureaucracy, lower autonomy, and low responsibility? Leadership Challenge: Moving to Leadership You have been a member of a cohesive and pro- ductive department for the past three years. Your department manager has accepted a job in another organization, and you have been moved into her position. You are not one of most senior members, but you have the most education, have been vol- unteering for many training programs, and have been an outstanding individual contributor. Over the past three years, you have developed close relationships with several of your department members who are around your age. You often go out to lunch together, have drinks after work, and get together on weekends. There are also a couple of “old-timers” who were very helpful in training you when you first came in. They have much more experience than you, but little education. Although you get along with them, you feel a bit awkward about being promoted to be their boss. 1. What are the challenges you are likely to face as the new leader? 2. What are some actions you should take to help smooth the transition? 3. What are some things you should avoid? M01_NAHA0187_07_GE_C01.indd 43 09/09/14 9:26 AM 44 Part I • Building Blocks Exercise 1-1: More than Meets the Eye—Characteristics of Leaders This exercise demonstrates the complexity of leadership by identifying the various characteristics, traits, and behaviors that are associated with good leadership. List as many of the characteristics, traits, and behav- iors that you think are key. Include behaviors (e.g., taking care of followers, assigning task), personality styles and traits (e.g.,  honesty, warmth), as well as skills and abilities (e.g.,  organized, good communicator), and even physical characteristics (e.g., tall). It may help to think of leaders you admire and consider the characteristics they possess. 1. Characteristics Essential to Leadership Good leaders must/should… 2. Essentials In your group, review your list and pare it down to 7 to 10 characteristics that you think are essential. These should be characteristics that make or break leadership. 3. How do you match up? In your group, discuss the following: • How many of the characteristics do you personally have? • Can you ever match up to the list you just developed? • If you do not, how does that affect your ability to lead? • Do you know any effective leader who lacks one or more of the characteristics? • Do you think the characteristics are essential to that person’s effectiveness? 4. Complexity of Leadership Chances are that you have had some trouble agreeing on the list and that more than one of you is finding yourself lacking one or more of the characteristics you listed. While you may be discouraged, consider that leadership is much more complex than a set of characteristics a person has. Having a set of traits does not guarantee leadership. By the same token, while not having certain traits or abilities may make leadership challenging, it will not necessarily prevent a person from being an effective leader. Additionally, as you will learn throughout the book, effective leadership is not just about the leader. Followers and the situation also play a key role. M01_NAHA0187_07_GE_C01.indd 44 09/09/14 9:26 AM Chapter 1 • Definition and Significance of Leadership 47 Exercise 1-4: Understanding the Leadership Context This exercise is designed to highlight the importance and role of the context in the leadership process. 1. Individual/group work Select a leader and identify the contextual factors that affect his/her leadership. Consider various elements that may be relevant, such as the following: a. Long-term historical, political, and economic factors or forces b. Current contemporary forces, including social values, changes, and cultural factors c. The immediate context, including organizational characteristics, the task, and followers 2. Discussion How do all these factors affect the leader? Do they hinder or help the leader achieve his/her goals? M01_NAHA0187_07_GE_C01.indd 47 09/09/14 9:26 AM 48 Part I • Building Blocks Leadership in action DaviD NeelemaN ReiNveNts aiRliNes David Neeleman is a legend in the airline industry and given credit for some of the major innovations in the airlines industry, including ticketless travel (Bloomberg TV, 2011). In 1984, he cofounded Morris Air and sold it to Southwest Airlines to join the leadership of that airline. He only survived five months before he was fired for being difficult to work with and being disruptive (Bloomberg TV, 2011). He had to wait five years because of a noncompete clause, and in 2000, he launched the highly successful JetBlue Airways before he left in 2007. He is now engaged in a new venture as CEO of the new Brazilian domestic airline Azul (blue in Portuguese), founded in 2008. His vision for what an airline should be and his leadership style set him apart from most other leaders in the industry. Neeleman says: “I have this huge goal that I want everyone that works for Azul to say that this is the best job they ever had because I think that is central to customer service and then I want every customer who gets off of every flight to say wow that was a great flight probably the best I have ever had” (Bloomberg TV, 2011). He describes himself as: “I’m not a lofty perch guy; I’m a day-to-day guy” (Elite interview, 2013). He believes that success comes from changing people’s lives and contributing to society rather than simply making money. Neeleman was ousted in 2007 from JetBlue after the airline was caught in a wave of nega- tive publicity after it kept passengers in planes on the tarmac for seven hours during a storm. Neeleman provided a very public and sincere apology (posted on the Web at http://www.jet blue.com/about/ourcompany/apology/index.html), and JetBlue instituted a much-publicized Passenger Bill of Rights to ensure that its much-valued customers continue to remain loyal. JetBlue still has daily flights to more than 50 destinations in the United States and Central America. Continuing to rely on the principles of its founder, the airline emphasizes teamwork and quick decisions and implementation. Top executives and managers consistently inter- act with employees and customers to listen and get feedback from them to keep addressing their concerns (Salter, 2004a), a practice Neeleman has also instituted at Azul (Mount, 2009). The attention to employees and customers has earned JetBlue high ratings and its former CEO awards for being a visionary (www.jetblueairways.com). Programs such as generous profit sharing, excellent benefits, open communication, and extensive training all get the right employees in the company and retain them. Neeleman not only provides the vision, but also knows to listen to people who, on occa- sion, veto his decisions. He says: “The way I channel the risk is that I surround myself with people who are really smart and have a spine and can speak up and can challenge you” (Bloomberg TV, 2011). He believes that “If you treat people well, the company’s philosophy goes, they’ll treat the customer well.” Azul is made of much of the same mold as JetBlue: simple reservations systems, low prices, more leg room, online Internet, and a TV in every seat (Scanlon, 2008). Neeleman is obsessive about staying in touch with both customers and employees. He stops by the call center at Azul regularly, talks to the trainees, and reminds his executives to talk to customers and those closest to them because “we think we know what happens. But they really know” (Mount, 2009). He strongly believes that “it is the people that make it happen” (Ford, 2004: 140). Neeleman’s leadership style and magic seems to be M01_NAHA0187_07_GE_C01.indd 48 09/09/14 9:26 AM Chapter 1 • Definition and Significance of Leadership 49 continuing to work. Azul is growing fast, with 11,000 passengers when it started up to 45,000 in January 2009 (Azul, 2009), and is flying 70 percent full, which is close to 20 percent better than Brazil’s biggest airline (Moura, 2009). Questions 1. What are the key elements of JetBlue and Azul’s culture? 2. Would you to like to work for Azul airlines? If so, please give your reasons. Sources: Bloomberg TV, 2011. “David Neeleman Profiled: Bloomberg Risk takers.” http://www.bloomberg. com/video/72535922-david-neeleman-profiled-bloomberg-risk-takers.html (accessed May 30, 2013); Airways Customer Bill of Rights. 2007. http://www.jetblue.com/p/about/ourcompany/promise/Bill_Of_Rights.pdf (accessed June 16, 2007); Elite Interviews David Neeleman, 2013. Elite.com, April 1 http://www.youtube.com/ watch?v=QybWxHdiSpk on May 30, 2013; Judge, P. 2001. “How will your company adapt?” Fast Company, 54; Ford, 2004. “David Neeleman, CEO of JetBlue Airways, on people + strategy = growth,” Academy of Management Executive 18(2): 139–143; Salter, C. 2004a. “And now the hard part,” Fast Company 82. http:// pf.fastcompany.com/magazine/82/jetblue.html (accessed October 1, 2004); Brazil’s Azul airlines to expand this year. 2008. http://www.usatoday.com/travel/flights/2009-02-11-azul-expansion_N.htm (accessed January 7, 2010); Moura, F. 2009. Neeleman expects profit as Brazil’s Azul Air flies 70 percent full. http://www.bloomberg.com/ apps/news?pid=20601086&sid= aJl8vaK49DMQ (accessed January 7, 2010); Mount, I. 2009. “JetBlue founder’s revenge: A new airline,” CNN Money, March 20. http://money.cnn.com/2009/03/19/smallbusiness/jetblue_founder_ flies_again.fsb/ (accessed October 6, 2013; and Scanlon. J. 2008. Braving Brazil’s “airline graveyard,” http://www. businessweek.com/innovate/content/may2008/id2008056_561046.htm (accessed January 7, 2010). M01_NAHA0187_07_GE_C01.indd 49 09/09/14 9:26 AM