Leadership Theories

After studying this chapter, you will be able to:

1. Identify the three major eras in the study of leadership and their contributions to modern leadership

2. Present and be able to evaluate the contributions of the early theories of leadership including the following:

   • Fiedler’s Contingency Model

   • The Normative Decision Model

   • Path–Goal theory

   • Substitutes for leadership

   • Leader–Member Exchange

The Leadership Question

Do you think some people are born leaders and can rise to the top no matter what the situation? What key characteristics do they possess?

The roots of the modern study of leadership can be traced to the Western Industrial Revolution that took place at the end of the nineteenth century. Although many throughout history focused on leadership, the modern approach to leadership brings scientific rigor to the search for answers. Social and political scientists and management scholars tried, sometimes more successfully than other times, to measure leadership through a variety of means. This chapter reviews the history of modern leadership theory and research and presents the early theories that are the foundations of modern leadership.

A History of Modern Leadership Theory: Three Eras

During the Industrial Revolution, the study of leadership, much like research in other aspects of organizations, became more rigorous. Instead of relying on intuition and a description of common practices, researchers used scientific methods to understand and predict leadership effectiveness by identifying and measuring leadership characteristics. The history of the modern scientific approach to leadership can be divided into three general eras or approaches: the trait era, the behavior era, and the contingency era. Each era has made distinct contributions to our understanding of leadership.

The Trait Era: Late 1800s to Mid-1940s

The belief that leaders are born rather than made dominated much of the late nineteenth century and the early part of the twentieth century. Thomas Carlyle’s book Heroes and Hero Worship (1907), William James’s writings (1880) about the great men of history, and Galton’s study (1869) of the role of heredity were part of an era that can be characterized by a strong belief that innate qualities shape human personality and behavior. Consequently, it was commonly believed that leaders, by virtue of their birth, were endowed with special qualities that allowed them to lead others. These special characteristics were presumed to push them toward leadership, regardless of the context. The historical context and social structures of the period further reinforced such beliefs by providing limited opportunities for common people to become social, political, and industrial leaders. The belief in the power of personality and other innate characteristics strongly influenced leadership researchers and sent them on a massive hunt for leadership traits made possible by the advent of personality and individual characteristics testing such as IQ in the early twentieth century.

The major assumption guiding hundreds of studies about leadership traits was that if certain traits distinguish between leaders and followers, then existing political, industrial, and religious leaders should possess them (for a thorough review of the literature, see Bass, 1990). Based on this assumption, researchers identified and observed existing leaders and followers and collected detailed demographic and personality information about them. More than 40 years of study provided little evidence to justify the assertion that leaders are born and that leadership can be explained through one or more traits. Some traits do matter. For instance, much evidence indicates that, on average, leaders are more sociable, more aggressive, and more lively than other group members. In addition, leaders generally are original and popular and have a sense of humor. Which of the traits are most relevant, however, seems to depend on the requirements of the situation. In other words, being social, aggressive, lively, original, and popular or having any other combination of traits does not guarantee that a person will become a leader in all situations, let alone an effective one.

Because of weak and inconsistent findings, the commonly shared belief among many researchers in the late 1930s and early 1940s was that although traits play a role in determining leadership ability and effectiveness, their role is minimal and that leadership should be viewed as a group phenomenon that cannot be studied outside a given situation (Ackerson, 1942; Bird, 1940; Jenkins, 1947; Newstetter, Feldstein, and Newcomb, 1938; Stogdill, 1948). More recent studies in the 1960s and 1970s reinforced these findings by showing that factors such as intelligence (Bray and Grant, 1966) or assertiveness (Rychlak, 1963) are related to leadership effectiveness, but they alone cannot account for much of a leader’s effectiveness.

Recent views of the role of traits and other individual characteristics, such as skills, refined our understanding of the role of individual characteristics in leadership (for an example and review, see Mumford et al., 2000a, b). Current interest in emotional intelligence has also yielded new research on the leader’s individual characteristics; these are discussed in more detail in Chapter 4. The leader’s personality, by limiting the leader’s behavioral range or by making it more or less difficult to learn certain behaviors or undertake some actions, plays a key role in his or her effectiveness. However, it is by no means the only or even the dominant factor in effective leadership.

The Behavior Era: Mid-1940s to Early 1970s

Because the trait approach did not yield the expected results, and because the need to identify and train leaders became an urgent necessity during World War II, researchers turned to behaviors, rather than traits, as the source of leader effectiveness. The move to observable behaviors was triggered in part by the dominance of behaviorist theories during this period, particularly in the United States and Great Britain. Instead of identifying who would be an effective leader, the behavior approach emphasizes what an effective leader does. Focusing on behaviors provides several advantages over a trait approach:

• Behaviors can be observed readily.

• Behaviors can be consistently measured.

• Behaviors can be taught through a variety of methods.

These factors provided a clear benefit to the military and various other organizations with a practical interest in leadership. Instead of identifying leaders who had particular personality traits, they could focus on training people to perform effective leadership behaviors.

The early work of Lewin and his associates (Lewin and Lippit, 1938; Lewin, Lippit, and White, 1939) concerning democratic, autocratic, and laissez-faire leadership laid the foundation for the behavior approach to leadership. Democratic leaders were defined as those who consult their followers and allow them to participate in decision making; autocratic leaders as those who make decisions alone; and laissez-faire leaders as those who provide no direction and do not become involved with their followers. Although the three types of leadership style were clearly defined, the research failed to establish which style would be most effective or which situational factors would lead to the use of one or another style. Furthermore, each of the styles had different effects on subordinates. For example, laissez-faire leadership, which involved providing information but little guidance or evaluation, led to frustrated and disorganized groups that, in turn, produced low-quality work. On the other hand, autocratic leadership caused followers to become submissive, whereas groups led by democratic leaders were relaxed and became cohesive.

Armed with the results of Lewin’s work and other studies, different groups of researchers set out to identify leader behaviors. Among the best-known behavioral approaches to leadership are the Ohio State Leadership Studies where a number of researchers developed a list of almost 2,000 leadership behaviors (Hemphill and Coons, 1957). After subsequent analyses (Fleishman, 1953; Halpin and Winer, 1957), a condensed list yielded several central leadership behaviors. Among them, task- and relationship-related behaviors were established as primary leadership behaviors. The Ohio State studies led to the development of the Leader Behavior Description Questionnaire (LBDQ), which continues to be used today.

Although the Ohio State research, along with other studies (e.g., Bowers and Seashore, 1966), identified a number of leader behaviors, the links between those behaviors and leadership effectiveness could not be consistently established. After many years of research, it did not become clear which behaviors are most effective. Evidence, although somewhat weak, shows that effective leadership requires both consideration and structuring behaviors (Fleishman and Harris, 1962; House and Filley, 1971). These findings, however, have failed to receive overwhelming support. Nevertheless, researchers agree that considerate, supportive, people-oriented behaviors are associated with follower satisfaction, loyalty, and trust, whereas structuring behaviors are more closely related to job performance (for a review, see Judge, Piccolo, and Ilies, 2004). However, the leadership dimensions of initiation of structure and consideration do not describe leader’s behavior adequately for cultures other than the United States where values might be less individualistic and people have different ideals of leadership (Ayman and Chemers, 1983; Chemers, 1969; Misumi and Peterson, 1985).

Similar to the trait approach, the behavior approach to leadership, by concentrating only on behaviors and disregarding powerful situational elements, provides a relatively simplistic view of a highly complex process and, therefore, fails to provide a thorough understanding of the leadership phenomenon. Yet, the two general categories of task and relationship behaviors are well established as the primary leadership behaviors. Researchers and practitioners continue to discuss what leaders do in these general terms.

The Contingency Era: Early 1960s to Present

Even before the behavior approach’s lack of success in fully explaining and predicting leadership effectiveness became evident, a number of researchers were calling for a more comprehensive approach to understanding leadership (Stogdill, 1948). Specifically, researchers recommended that situational factors, such as the task and type of work group, be taken into consideration. However, it was not until the 1960s that this recommendation was applied. In the 1960s, spearheaded by Fred Fiedler, whose Contingency Model of leadership is discussed later in this chapter, leadership research moved from simplistic models based solely on the leader to more complex models that take a contingency point of view. Other models such as the Path-Goal Theory and the Normative Decision Model, also presented in this chapter, soon followed. The primary assumption of the contingency view is that the personality, style, or behavior of effective leaders depends on the requirements of the situation in which the leaders find themselves. Additionally, this approach suggests the following:

• There is no one best way to lead.

• The situation and the various relevant contextual factors determine which style or behavior is most effective.

• People can learn to become good leaders.

• Leadership makes a difference in the effectiveness of groups and organizations.

• Personal and situational characteristics affect leadership effectiveness.

Although the contingency approach to leadership continues to be well accepted, the most recent approach to leadership focuses on the relationship between leaders and followers and on various aspects of charismatic and visionary leadership. Some researchers have labeled this approach the neo-charismatic school (Antonakis, Cianciolo, and Sternberg, 2004). We will present this most recent view of leadership in detail in Chapter 6.

Early Theories

An effective leader must know how to use available resources and build a relationship with follower to achieve goals (Chemers, 1993). The early leadership theories of leadership addressed these two challenges in a variety of ways.

Fiedler’s Contingency Model

Fred Fiedler was the first researcher to propose a contingency view of leadership. His Contingency Model is the oldest and most highly researched contingency approach to leadership (Fiedler, 1967). Fiedler’s basic premise is that leadership effectiveness is a function of the match between the leader’s style and the leadership situation. If the leader’s style matches the situation, the leader will be effective; otherwise, the leader will not be effective. Fiedler considers how the leader uses available resources to make the group effective.

Leader Style

To determine a leader’s style, Fiedler uses the least-preferred coworker (LPC) scale, a measure that determines whether the leader is primarily motivated by task accomplishment or by maintaining relationships. Fiedler’s research shows that people’s perceptions and descriptions of their least-preferred coworker provide insight into their basic goals and priorities toward either accomplishing a task or maintaining relationships (see Self-Assessment 3-1).

According to Fiedler, people with low LPC scores—those who give a low rating to their least-preferred coworker (describing the person as incompetent, cold, untrustworthy, and quarrelsome)—are task motivated. They draw their self-esteem mostly from accomplishing their task well (Chemers and Skrzypek, 1972; Fiedler, 1967; Fiedler and Chemers, 1984; Rice, 1978a, b). When the task-motivated leaders or their groups fail, they tend to be harsh in judging their subordinates and are often highly punitive (Rice, 1978a, b). When the task is going well, however, the task-motivated leader is comfortable with details and with monitoring routine events (Fiedler and Chemers, 1984; Table 3-1). People who have high LPC scores rate their least-preferred coworker relatively positively (describing that person as loyal, sincere, warm, and accepting); they are relationship motivated and draw their self-esteem from having good relationships with others. For them, the least-preferred coworker is often someone who has been disloyal and unsupportive rather than incompetent (Rice, 1978a, b). Relationship-motivated persons are easily bored with details (Fiedler, 1978; Fiedler and Chemers, 1984) and focus on social interactions (Rice, 1978a, b; see Table 3-1). The task-motivated person’s focus on tasks and the relationship-motivated person’s concern for relationships are most obvious in times of crisis when the person is under pressure.

Table 3-1 Differences between Task-Motivated and Relationship-Motivated Individuals

A comparison between Hillary Clinton and Barack Obama illustrates the differences between task- and relationship-oriented leaders. During the 2004 presidential campaign, H. Clinton very clearly stated that she considers the role of the president is not only to provide vision but also to control and direct the federal bureaucracy (O’Toole, 2008). Obama, on the other hand, announced that he believes the president’s role is to provide vision and inspiration while delegating the responsibility of managing agencies (O’Toole, 2008). Although President Obama’s leadership style also fits that charismatic leaders discussed in Chapter 6, his broader focus and less attention to detail indicate a relationship-oriented style. Other leaders demonstrate both styles. Brady W. Dougan—53-year-old CEO of Credit Suisse Group, a major global bank, and its youngest CEO to date—is detailed oriented and task motivated (Anderson, 2007). He gets to work around 5 AM. and is known to work out twice a day while he trains for marathons. He spent two months practicing to dance with a Broadway star to prepare for a charity event (Anderson, 2007). Marissa Peterson, former executive vice president of worldwide operations of Sun Microsystems, is also task motivated. Her strength is in clearly outlining what role every one of her 2,000-strong staff plays. Her focus is on “developing the strategy for achieving my operation’s goals and then laying out that vision for my team” (Overholt, 2002: 125). Peterson sticks to a strict routine in managing her daily and weekly activities. Contrast these task-motivated leaders with Mort Meyerson, chairman and CEO of 2M Companies of Perot Systems, a computer firm based in Dallas, Texas, and Darlene Ryan, founder and CEO of PharmaFab, a pharmaceuticals manufacturer, also located in Texas. Meyerson believes, “To win in today’s brave new world of business, you must be more in-tune with your people and customers.… You must re-examine if you are creating an environment for your people to succeed and what that means. You must ask yourself: Am I really accessible? Am I really listening?” (Meyerson, 2010). Darlene Ryan takes a similar approach. She runs her company like a family; she encourages dissent, delegates, and is a consensus builder. She is a great listener and is able to take her time when facing tough decisions (Black, 2004).

Individuals who fall in the middle of the scale have been labeled socio-independent. They tend to be less concerned with other people’s opinions and may not actively seek leadership roles. Depending on how close their score is to the high or the low end of the scale, they might belong to either the task-motivated or relationship-motivated group (Fiedler and Chemers, 1984). Some research suggests that middle LPCs may be more effective than either high or low LPCs across all situations (Kennedy, 1982). A potential middle LPC is Colin Powell. Even though he has been in many leadership positions, he has shied away from the presidency, and he has proven himself an outstanding follower to several presidents.

Despite some problems with the validity of the LPC scale, it has received strong support from researchers and practitioners and has even translated well to other cultures for use in leadership research and training (Ayman and Chemers, 1983, 1991). A key premise of the LPC concept is that because it is an indicator of primary motivation, leadership style is stable. Leaders, then, cannot simply change their style to match the situation.

Situational Control

Because effectiveness depends on a match between the person and the situation, Fiedler uses three factors to describe a leadership situation. In order of importance, they are (1) the relationship between the leader and the followers, (2) the amount of structure of the task, and (3) the position power of the leader. The three elements combine to define the amount of control the leader has over the situation (see Self-Assessment 3-2).

According to Fiedler, the most important element of any leadership situation is the quality of the relationship and the cohesion between the leader and the followers and among the followers (Fiedler, 1978). Good leader–member relations (LMR) mean that the group is cohesive and supportive, providing leaders with a high degree of control to implement what they want. When the group is divided or has little respect or support for the leader, the leader’s control is low.

Task structure (TS) is the second element of a leadership situation. It refers to the degree of clarity of a task. A highly structured task has clear goals and procedures, few paths to the correct solution, and one or few correct solutions and can be evaluated easily (Fiedler and Chemers, 1974). The degree of task structure affects the leader’s control. Whereas the leader has considerable control when doing a structured task, an unstructured task provides little sense of control. One factor that moderates task structure is the leader’s experience level (Fiedler and Chemers, 1984). On the one hand, if leaders have experience with a task, they will perceive the task as more structured. On the other hand, not having experience will make any task appear to be unstructured. The third and least influential element of the leadership situation is the leader’s position power (PP), which refers to the leader’s formal power and influence over subordinates to hire, fire, reward, or punish. The leader with a high amount of formal power feels more in control than one who has little power.

The combination of LMR, TS, and PP yields the amount of situational control (Sit Con) the leader has over the situation. At one end of the continuum, good leader–member relations, a highly structured task, and high position power provide the leader with high control over the situation where the leader’s influence is well accepted. In the middle of the continuum are situations in which either the leader or the followers do not get along or the task is unstructured. In such situations, the leader does not have full control over the situation, and the leadership environment is more difficult. At the other end of the situational control continuum, the leader–member relations are poor, the task is unstructured, and the leader has little power. Such a situation is chaotic and unlikely to continue for a long period of time in an organization. Clearly, this crisis environment does not provide the leader with a sense of control or any ease of leadership (see Self-Assessment 3-2 for Sit Con).

Predictions of the Contingency Model

At the core of the Contingency Model is the concept of match. If the leader’s style matches the situation, the group will be effective. Because Fiedler suggests that the leader’s style is constant, a leader’s effectiveness changes as the situation changes. The Contingency Model predicts that low-LPC, task-motivated leaders will be effective in high- and low-situational control, whereas high-LPC, relationship-motivated leaders will be effective in moderate-situational control. Figure 3-1 presents the predictions of the model.

In high-control situations (left side of the graph in Figure 3-1), task-motivated, low-LPC leaders feel at ease. The leader’s basic source of self-esteem—getting the task done—is not threatened, so the leader can relax, take care of details, and help the followers perform. The same high-control situation leads to a different effect on relationship-motivated, high-LPC leaders. They are likely to be bored and feel either that there is nothing to do or that nobody needs them. Because the group is cohesive and the task is clear, the leader is needed mainly to get the group the resources it needs, take care of details, and remove obstacles—all activities that are not appealing to high LPCs, who might, therefore, start being overly controlling and interfere with the group’s performance to demonstrate that they are needed (Chemers, 1997; Fiedler and Garcia, 1987a). See Table 3-2 for a summary of the leaders’ behaviors in each situation.

Moderate-situational control (the middle of graph in Figure 3-1) stems from lack of cohesiveness or lack of task structure. In either case, the situation is ambiguous or uncertain, and task completion is in jeopardy. The relationship-motivated, high-LPC leader’s skills at interpersonal relationships and participation are well suited for the situation. This type of leader seeks out followers’ participation and focuses on resolving task and relationship conflicts. The high-LPC leader uses the group as a resource to accomplish the task. The same elements that make moderate control attractive to relationship-motivated leaders make the situation threatening to the task-oriented, low-LPC leader. The lack of group support, the ambiguity of the task, or both make the low LPCs feel that the task might not be completed. The task-oriented leader becomes autocratic, ignores the task and relationship conflicts, and tries to simply complete the task to get a sense of accomplishment (Fiedler, 1993). The inappropriate use of resources is likely to worsen the group’s lack of cohesion and prevent the exploration of creative solutions to an unstructured task. As a result, the task-motivated leader’s group performs poorly in moderate control.

Figure 3-1 Fiedler’s Contingency Model

Consider the example of several U.S. presidents. Former presidents Richard Nixon and Jimmy Carter were task-motivated leaders. Both were highly intelligent, focused on the task, and able to analyze large amounts of detail. Both needed to stay in control, held uncompromising views and approaches to issues, and could be harsh toward failing subordinates. They performed well in high control. Nixon experienced considerable success in foreign policy, where he was respected, the task was clear, and he held power tightly. As his legitimate power and popularity decreased—leading to moderate control—he became controlling, punitive, and ineffective. Carter’s effectiveness followed a similar pattern, although he never faced a high-control situation, a factor that might explain his overall poor effectiveness ratings as president. Almost immediately after being elected, he found himself in moderate control with poor relations with the U.S. Congress and an unstructured task exacerbated by his limited experience in foreign policy. His single-minded focus on human rights and his inability to compromise made him ineffective.

Table 3-2 Leader Style and Behaviors in Different Levels of Sit Con

Alternate View

Sources: Partially based on F. E. Fiedler. A Theory of Leadership Effectiveness (New York: McGraw-Hill, 1967); F. E. Fiedler and M. M. Chemers. Leadership and Effective Management (Glenview, IL: Scott-Foresman, 1974); and F. E. Fiedler and M. M. Chemers. Improving Leadership Effectiveness: The Leader Match Concept, 2nd ed. (New York: John Wiley, 1984).

At the other end of the continuum are former presidents Ronald Reagan and Bill Clinton, both high LPCs who focused on interpersonal relations, were bored with details, and demonstrated an apparently unending ability to compromise, a desire to please others, and the ability to perform and put on a show for their public. Both enjoyed working with people and were popular with crowds. Reagan was well liked but faced an unstructured task with moderate power. Clinton faced a novel and unstructured situation but continued to enjoy unprecedented support of the electorate. Both these relationship-motivated presidents were in moderate control where, by many accounts, they performed well.

As a situation becomes chaotic and reaches a crisis point with no group cohesion, no task structure, and no strong position power (the right side of the graph in Figure 3-1), the task-motivated, low-LPC leaders’ need to complete the task pushes them to take over and make autocratic decisions without much concern for followers. As a result, although performance is not high and followers might not be satisfied, groups with a low-LPC leader get some work done. For the relationship-motivated, high-LPC leader, the low Sit Con environment is a nightmare. The group’s lack of cohesion is further fueled by its inability to perform the task and makes efforts at reconciliation close to impossible. The high-LPC leader’s efforts to gain support from the group, therefore, fall on deaf ears. In an attempt to protect their self-esteem, high-LPC leaders withdraw, leaving their group to fend for itself and causing low performance. The data for the socio-independent leaders are less clear. Fiedler (1978) suggests that they generally perform better in high-control situations, although more research is needed to predict and explain their performance.

Evaluation and Application

Although a large number of studies have supported the Contingency Model over the past 40 years, several researchers have voiced strong criticisms regarding the meaning and validity of the LPC scale (Schriesheim and Kerr, 1974), the predictive value of the model (Schriesheim, Tepper, and Tetrault, 1994; Vecchio, 1983), and the lack of research about the middle-LPC leaders (Kennedy, 1982). Forty years of research have addressed the majority, although not all, of the concerns. As a result, the Contingency Model continues to emerge as one of the most reliable and predictive models of leadership, with a number of research studies and meta-analyses supporting the hypotheses of the model (see Ayman, Chemers, and Fiedler, 1995; Chemers, 1997; Peters, Hartke, and Pohlmann, 1985; Strube and Garcia, 1981).

Applying What You Learn

Putting the Contingency Model to Work

Fiedler’s Contingency Model suggests that instead of focusing on changing their style, leaders should learn to understand and manage the situations in which they lead. Chances are however that most of the leadership training programs you may attend will focus on changing the leaders’ style to adapt to different situations. Here’s how you can take advantage of those training programs while following the Contingency Model’s recommendations:

• Remember that learning will take place when you challenge yourself to undertake and master behaviors that do not come easily and therefore may be outside your comfort zone or primary motivation area.

• Regardless of your style, you can always learn new behaviors and expand your current range.

• All training, by design or default, will expose you to many new leadership situations. Take the opportunity to practice analyzing them to ascertain situational control.

• Do not expect miracles or even quick changes. Increasing your effectiveness as a leader is a long journey.

Importantly, a person’s LPC is not the only or the strongest determinant of a leader’s actions and beliefs. Although the focus has been on the description of stereotypical task-motivated and relationship-motivated leaders, a person’s behavior is determined by many other internal and external factors. It would, therefore, be inappropriate to carry the task or relationship orientation considerably beyond its use in the Contingency Model. It is a reliable predictor of leadership effectiveness within the model, but not necessarily beyond it.

The Contingency Model has several practical implications for managers:

• Leaders must understand their style and the situation to predict how effective they will be.

• Leaders should focus on changing the situation to match their style instead of trying to change how they act.

• A good relationship with followers is important to a leader’s ability to lead, and it can compensate for lack of power.

• Leaders can compensate for ambiguity of a task by getting training and experience.

Fiedler’s focus on changing the situation rather than the leader is unique among leadership theories. Interestingly, Marcus Buckingham, a well-known leadership consultant, has suggested that leaders should focus on developing their strengths rather than trying to compensate for their weaknesses (Buckingham, 2005), advice that is consistent with Fiedler’s approach. Other leaders also recognize the importance of the context. Drew Gilpin Faust, president of Harvard University, says, “I think the most important leadership lessons I’ve learned have to do with understanding the context in which you are leading” (Bryant, 2009m). As opposed to Fiedler, the Normative Decision Model considered next, along with many other leadership models, assumes that the leader can change styles depending on the situation.

The Normative Decision Model

Should a leader make decisions alone or involve followers? What factors can help a leader determine how to make decisions? Consider the case of Junki Yoshida, the Japanese-born, 58-year-old martial artist and founder and owner of Yoshida Group enterprises. In 2005, he was voted one of the 100 most respected Japanese in the world by the Japanese edition of Newsweek magazine. His company includes Mr. Yoshida Original Gourmet sauces and marinades and comprises 18 highly diverse companies that include Jones Golf bags, OIA Global Logistics, and a graphic design company (Yoshida Group, 2007). When he starts a new venture, Yoshida plays an active role in every aspect and stays close to every decision. Once the business takes off, however, he delegates to carefully selected specialists and lets them make many of the decisions. The way he makes decisions about his businesses changes as each business matures (Brant, 2004). The Normative Decision Model (NDM; also referred to as the Vroom–Yetton model), developed by researchers Victor Vroom, Philip Yetton, and Arthur Jago, addresses such situations and prescribes when the leader needs to involve followers in decision making (Vroom and Jago, 1988; Vroom and Yetton, 1973). It is called normative because it recommends that leaders adopt certain styles based on the prescriptions of the model. Like Fiedler, Vroom and his associates recommend matching the leader and the situational requirements. They, however, differ on several points. The Normative Decision Model is limited to decision making rather than general leadership, and it assumes that leaders can adopt different decision-making styles as needed.

The model relies on two well-established group dynamic principles: First are the research findings that groups are wasteful and inefficient, and second, that participation in decision making leads to commitment. The NDM recommends that leaders adjust their decision style depending on the degree to which the quality of the decision is important and the likelihood that employees will accept the decision.

Leader’s Decision Styles

The NDM identifies four decision methods available to leaders (Vroom and Jago, 1988). The first method is autocratic (A), in which the leader makes a decision with little or no involvement from followers. The second decision method is consultation (C), which means that the leader consults with followers yet retains the final decision-making authority. The third decision method is group (G). Here, the leader relies on consensus building to solve a problem. The final method involves total delegation (D) of decision making to one employee. The decision styles and their subcategories are summarized in Table 3-3.

A leader must decide which style to use depending on the situation that the leader and the group face and on whether the problem involves a group or one individual. Individual problems affect only one person, whereas group problems can affect a group or individual. For example, deciding on raises for individual employees is an individual problem, whereas scheduling vacations is a group problem. Similarly, deciding on which employees should receive training or undertake overseas assignment is an individual problem, whereas moving a business to another state or cutting down a city service is a group problem. The distinction between the two is not always clear; individual problems can affect others, and group problems can have an impact on individuals.

Contingency Factors and Predictions of the Model

The two central contingency factors for the Normative Decision Model are the quality of the decision and the need for acceptance and commitment by followers. Other contingency factors to consider are whether the leader has enough relevant information to make a sound decision, whether the problem is structured and clear, the likelihood that followers will accept the leader’s decision, whether the employees agree with the organizational goals, whether employees are cohesive, and whether they have enough information to make a decision alone. Table 3-4 presents the eight contingency factors.

Table 3-3 Decision Styles in the Normative Decision Model

Alternate View

Note: Key: A = Autocratic, C = Consultative, G = Group

Sources: V. H. Vroom and A. G. Jago. The New Leadership: Managing Participation in Organizations (Upper Saddle River, NJ: Prentice Hall, 1988); and V. H. Vroom and P. W. Yetton. Leadership and Decision Making (Pittsburgh: University of Pittsburgh Press, 1973).

Table 3-4  Contingency Factors in the Normative Decision Model

The NDM relies on a decision tree, as shown in Figure 3-2. Leaders ask a series of questions listed in Table 3-4; the questions relate to the contingency factors and should be asked sequentially. By responding “yes” or “no” to each question, managers can determine which decision style(s) is most appropriate for the problem they face. Figure 3-2 presents the most widely used Normative Decision Model and is labeled “time efficient,” based on the assumption that consultation and participation require time and are not efficient (Vroom and Jago, 1988). Thus, whenever appropriate, the model leans toward more autocratic decision making. A second version of the model, labeled “time investment,” focuses on the development of followers at the expense of efficiency. This version recommends more participative decision making whenever possible.

Figure 3-2 Normative Decision Model

Source: “Decision-Process Flow Chart for Both Individual and Group Problems” from Leadership and Decision-Making by Victor and Philip W. Yetton © 1973. All rights are controlled by the University of Pittsburgh Press. Pittsburgh, PA 15260. Used by permission of the University of Pittsburgh Press.

An autocratic decision-making style is appropriate in the following situations:

• When the leader has sufficient information to make a decision

• When the quality of the decision is not essential

• When employees do not agree with each other

• When employees do not agree with the goals of the organization

A consultative style of decision making is appropriate in the following situations:

• The leader has sufficient information, but the employees demand participation to implement the decision.

• The leader has insufficient information, and employee consultation will help the leader gather more information as well as develop commitment.

• Followers generally agree with the goals of the organization.

A group-oriented decision style should be used when the leader does not have all the information, quality is important, and employee commitment is essential. Delegation is used to assign the decision to a single individual who has the needed information, competence, and organizational commitment to make and implement it.

Evaluation and Application

Several research studies support the NDM in a variety of settings (Crouch and Yetton, 1987; Tjosvold, Wedley, and Field, 1986), including evaluating historical decisions (Duncan, LaFrance, and Ginter, 2003). The model has also been applied in not-for-profit settings with some success (Lawrence, Deagen, and Debbie, 2001), and recent research on sharing information with followers further support the contingency approach presented by the model (Vidal and Möller, 2007). The decision methods are clearly defined, and the contingency factors included are based on extensive research about group dynamics and participative management.

Some practitioners and theorists argue that the model is too complex to provide practical value. Few managers have the time to work their way through the decision tree. Furthermore, the assumption that leaders have the ability to use any of the decision styles equally well might be flawed. Not all leaders can be autocratic for one decision, consultative for another, and group oriented for still others. In addition, because the model relies on a manager’s self-report, it may be subject to some bias (Parker, 1999).

The NDM, compared with Fiedler’s Contingency Model, takes a narrower focus on leadership decision making. Within that limited focus, the model works well and can be a helpful tool for leaders. The model suggests several practical implications:

• Leaders must understand the situation and understand how and when to use the different decision methods.

• Participation is not always desirable as a leadership style.

• Leaders must pay particular attention to their followers’ needs and reactions when making a decision.

In addition to Fiedler’s and Vroom and Yetton’s theories that focus on how leaders use their resources, three other contingency models hinge on how leaders manage their relationships with followers.

Path–Goal Theory

The Path–Goal Theory of leadership, developed in the early 1970s, proposes that the leader’s role is to clear the paths subordinates use to accomplish goals (House, 1971; House and Dessler, 1974). By doing so, leaders allow subordinates to fulfill their needs, and as a result, leaders reach their own goals as well. The concept of exchange between leaders and subordinates, whether it is an implicit or explicit contract, is at the core of this model. The leader and followers establish a relationship that revolves around the exchange of guidance or support for productivity and satisfaction.

The Framework

The major conceptual basis for the Path–Goal Theory is the expectancy model of motivation (Vroom, 1964). Expectancy theory describes how individuals make rational choices about their behavior, based on their perceptions of the degree to which their effort and performance can lead to outcomes they value. The key to motivation, then, is to remove the various obstacles that weaken the linkages between effort and performance and between performance and outcomes. The nature of the task and follower characteristics determine which leadership behavior contributes to subordinate satisfaction. If the task is new and unclear, the followers are likely to waste their efforts due to a lack of knowledge and experience. They might feel frustrated and unmotivated, so the leader must provide instructions and training, thereby removing obstacles to followers’ performance and allowing them to do their job. If a task is routine and subordinates performed it successfully a number of times, however, they might face an element of boredom, which would require the leader must show consideration, empathy, and understanding toward subordinates.

Behaviors the leader uses to motivate employees further depend on the employees themselves (Griffin, 1979; Stinson and Johnson, 1975). Some employees need guidance and clear instructions; others expect to be challenged and seek autonomy to do their own problem solving. The followers’ need for autonomy and other personal characteristics, such as locus of control, are factors that the leader needs to consider before selecting an appropriate behavior. For example, a follower who likes challenges and needs autonomy will not need or want the leader to be directive even during an unstructured task. For that employee, leader directiveness can be irrelevant or even detrimental because it might reduce satisfaction.

Evaluation and Application

Despite several supportive research studies (e.g., House and Mitchell, 1974), the empirical support for the Path–Goal Theory remains mixed (Downey, Sheridan, and Slocum, 1975; Szilagyi and Sims, 1974). The model is generally underresearched, although researchers have proposed several new potential applications (Elkins and Keller, 2003). Notwithstanding contradictory findings, the Path–Goal Theory contributes to our understanding of leadership by once more focusing attention on the behavior of providing guidance and support to followers. It adds to other models, such as Fiedler’s Contingency Model, by including followers’ perceptions of the task and the role of the leader in removing blocks to task accomplishment. The Path–Goal Theory’s use of employee satisfaction as a criterion for leadership effectiveness broadens our view of leadership. The model’s suggestion that not all behaviors will be effective with all subordinates points to the importance of an employee’s need for challenge and desire to be autonomous as a determinant of a leader’s behavior. Interestingly, the role of the leader in the Path–Goal Theory is that of obstacle remover, which is similar to the role ascribed to team leaders (see Chapter 8).

The next theory reviews a leadership model that focuses on how leaders interpret their followers’ actions and use that information as the basis for their relationship with them.

Leading Change Jim Goodnight of SAS

Leading an organization that is consistently ranked as one of the best places to work in the world is not an easy feat (Crowley, 2013). However it’s something that Jim Goodnight, CEO of SAS, has been able to do for over three decades. The company’s culture of benevolence and respect yields high performance and employee loyalty. “Creativity is especially important to SAS because software is a product of the mind. As such, 95 percent of my assets drive out the gate every evening. It’s my job to maintain a work environment that keeps those people coming back every morning. The creativity they bring to SAS is a competitive advantage for us” (Goodnight, 2010). That statement is one indicator of what Goodnight considers to be important in the success of his company. He states: “Employees don’t leave companies, they leave managers” (Lauchlan, 2007). Goodnight cofounded SAS, the world’s largest privately-held software company and, with John Sall, continues to fully own the company so that the two can think long term and do what it takes to take care of their employees and their customers. With a 98 percent customer renewal rate, global sales of $2.72 billion in 2012, and a turnover of around 4 percent compared to 20 percent in the industry (Goodnight, 2010), SAS is doing something right.

Goodnight is the public face of the company and deserves much credit for that success. SAS has kept its workforce happy by giving its employees challenging work, letting them enjoy a 35-hour workweek, free on-site day care, health care, an extensive fitness center, car detailing, and discounts to country club memberships; and free M&Ms one day a week (Goodnight-Employee benefits, 2012). Although the candy costs the company $45,000 a year, Goodnight believes it is a small price to show appreciation for his employees and is an indicator of the organization’s friendly culture (Bisoux, 2004).

Goodnight believes that when the company removes day-to-day challenges, people can focus on their jobs. He tells his managers, “If you treat people like they make a difference, then they will make a difference” (Lauchlan, 2007). For him, it is about giving people a chance to prove themselves. Valuing employees is as important to him as keeping his customers happy. Goodnight states, “I simply wanted to create a company where I would want to work. Over the years, I’ve learned how employee loyalty leads to customer loyalty, increased innovation, and higher-quality software” (Faiola, 2006). He considers his employees and his customers the building blocks of the success of his organization (Goodnight, 2005). During his speech after being named as the year’s top executive in 2005, Goodnight echoed this theme: “I simply facilitate a creative environment where people can create great software and foster long-term relationships with our customers” (Stevie, 2004). His formula for success is simple: “Keep your customers happy. Value your employees… while you may not grow your profits every quarter, you will grow your business over time” (Bisoux, 2004: 20).

Sources: Bisoux, T. 2004. “Corporate counter culture,” BizEd, November–December: 16–20; Crowley, M. C. 2013. “How SAS became the world’s best place to work,” Fast Company, January 22. http://www.fastcompany.com/3004953/how-sas-became-worlds-best-place-work (accessed June 1, 2013); Faiola, A.M. 2006. Ask Jim Goodnight. Inc Magazine, June 1. Accessed at http://www.inc.com/magazine/20060601/handson-ask-the-bigwig.html on November 27, 2013. Goodnight-employee benefits. 2012. http://www.youtube.com/watch?v=T5O3L6UdIGw (accessed June 1, 2013); Goodnight, J. 2005. “Software 2005: Building blocks for success,” http://www.sandhill.com/conferences/sw2005_proceedings/goodnight.pdf (accessed July 8, 2007); Goodnight, J. 2010. SAS web site. http://www.sas.com/presscenter/bios/jgoodnight.html (accessed January 20, 2010); Lauchlan, S. 2007. “Interview with Jim Goodnight,” MyCustomer.com, May 22. http://www.mycustomer.com/cgi-bin/item.cgi?id=133019&d=101&h=817&f=816 (accessed July 8, 2007); and Stevie A. 2004. http://www.crm2day.com/news/crm/EpluuFlFFpWCyCGeTT.php (accessed July 8, 2007).

Substitutes for Leadership

In some situations, a relationship between a leader and the followers is not needed to satisfy the followers’ needs. Various aspects of the work environment provide enough resources and support to allow subordinates to achieve their goals without having to refer to their leader. For example, an experienced team of pharmaceutical salespeople, who spend a considerable amount of their time on the road and who have control over their commissions, are not likely to rely much on their manager. Their job provides them with challenges, and their experience allows them to make many decisions on their own. The office is not accessible, and they often rely on other salespeople for help and information. Similarly, skilled emergency room nurses and technicians do not rely on a leader or manager to take care of their patients. In such circumstances, various situational factors replace the leader’s functions of providing structure, guidelines, and support to subordinates.

Such situations led to the development of the Substitutes for Leadership Model (SLM; Kerr and Jermier, 1978). SLM proposes that various organizational, task, and employee characteristics can provide substitutes for the traditional leadership behaviors of consideration and initiation of structure (Table 3-5). In general, if information about the task and its requirements are clear and available to the subordinates through various means such as their own experience, their team, or through the organization, they are not likely to need the leader’s structuring behaviors. Similarly, when support and empathy are not needed or are available through other sources such as coworkers, the subordinates will not seek the leader’s consideration behaviors.

Table 3-5 Leadership Substitutes and Neutralizers

In addition to substituting for leadership, some situations can neutralize the effect of the leader. Most notably, the leader’s lack of power to deliver outcomes to followers and an organization’s rigid culture can prevent a leader’s consideration and structuring behaviors from affecting subordinates. For example, a subordinate whose manager is in another state or is powerless to deliver on promises and reward or a subordinate who does not value the rewards provided by the manager is not likely to be affected by the leader’s behaviors (see Table 3-5). The situation neutralizes the leader.

Consider how Ricardo Semler (featured in Leading Change in Chapter 5), president of the Brazilian firm Semco, author and proponent of open-book management, set up his company so that it runs with few managers so that they are free to do what they want and needs to be done (Semler Interview, 2013). Workers are trained carefully; provided with considerable information, including detailed financial data and salary information; and left to set their own hours, evaluate and vote for their managers, and make most of the decisions. The workers’ training and experience allows the company to function with few senior managers. The structure, training, and teamwork at Semco act as substitutes for leadership.

What Do You Do?

You have been promoted to a new managerial position and your team members are missing in action most of time. Their performance is by and large excellent, but getting them together is proving challenging. They are away on various jobs, and although friendly, don’t seem to need you much. You feel like you should establish your authority. What do you do?

Evaluation and Application

The SLM has not been tested extensively and needs considerable clarification regarding the nature of the various substitutes and neutralizers and the situations to which they might apply. Because of inconsistent results, some researchers suggest that it suffers from methodological problems (Villa et al., 2003), and the few studies performed in non-U.S. cultural settings failed to yield support for the model (Farh, Podsakoff, and Cheng, 1987). Like the next model we will discuss, the Leader–Member exchange, however, the SLM is intuitively appealing and addresses processes not taken into account by other leadership models. In particular, it questions the need for leadership in certain situations and points to the difficulty of being an effective leader when many neutralizers are present. Furthermore, the model provides considerable potential for application. Depending on the culture, strategy, and goals of an organization and on a specific leader’s personality, the leader might want to set up or remove leadership substitutes. For some control-oriented leaders or in organizations with traditional structures and hierarchies in place, the presence of substitutes could be perceived as a loss of control and authority.

Given the flattening of many organizations and the push toward empowerment and use of teams, judicious use of substitutes can free up the leader for other activities, such as strategic planning, and still allow the organization to achieve its objectives. The use of information technology tools that make information widely available and support work structures, such as telecommuting and outsourcing, further reduces the need for leadership in some situations (Howell, 1997). Consider the case of one of the oldest and one of the largest breweries in the United States (van der Pool, 2012). Despite its 175-year-old history, D.G. Yuengling & Son uses a modern, relatively flat structure that focuses on not becoming bureaucratic. Respect for the individual and a positive work environment are part of its core values (Yuengling, 2007). The company offers relatively high-paying jobs in an area where jobs are scarce and has developed a loyal following (Rubinkan, 2007). Like many other family operations, however, employees and managers found themselves relying too much on the owner, Dick Yuengling. Yuengling recognizes the need to set up substitutes for his hands-on leadership: “You’ve got to get people in the proper place” (Kurtz, 2004: 71). The company’s chief operating officer, David Cainelli, along with Jennifer Yuengling, set up the structures that would allow for decision making to be decentralized and delegated to people closest to the products and markets (Kurtz, 2004).

Autonomous and self-managed teams provide an application of the SLM. The goal of such teams is to function without supervision. The team becomes a substitute for leadership. Extensive technical and team-building training, selection of team members with a professional orientation, intrinsically satisfying tasks for which team members are given considerable autonomy, and direct feedback can be used as substitutes for leadership structuring behaviors. Similarly, a cohesive team replaces the leader’s supportive behaviors. The factors identified as substitutes can be used as a guide in setting up such autonomous work teams. One final implication of the SLM is leadership training. Based on this model, leadership training might need to focus on teaching the leader to change the situation as much as it focuses on teaching effective leadership behaviors. Leaders can be taught how to set up substitutes and avoid neutralizers. Such a recommendation is similar to those based on Fiedler’s Contingency Model discussed earlier in this chapter.

The next model we consider focuses on the dyadic relationship between leaders and followers. Among the early leadership theories of leadership, it is the only one that continues to draw considerable interest and research.

Leader–Member Exchange

Many of us experience leadership, either as leaders or followers, as a personal relationship between a leader and a subordinate, rather than a group phenomenon. We interact daily with our managers and forge an individual relationship with them. As leaders, we do not experience the same relationship with all of our followers. Each dyadic relationship is different. A leader establishes a one-on-one relationship with each follower (Figure 3-3), and each relationship varies greatly in terms of the quality of the exchange. Some followers are part of in-group; some are in the out-group. These concepts are at the core of the Leader–Member Exchange (LMX) model, which was called the Vertical Dyad Linkage Model in its earlier versions (Dansereau, Graen, and Haga, 1975; Graen and Shiemann, 1978). The LMX model focuses on the unique, relationship-based exchange between a leader and followers (Graen and Uhl-Bien, 1995).

Figure 3-3 Leader–Member Exchange Model

The Framework

In each exchange, the leader and follower establish a role for the follower. The role can be based on long-term social exchange, or on a more market-based economic exchange (Kuvass et al., 2012; Walumbwa, Cropanzano, and Goldman, 2011). Those followers with a high-quality relationship are in the in-group. High-quality LMX involves mutual respect, anticipation of deepening trust, and expectations of continued and growing professional relationships and obligations. In-group followers enjoy their leader’s attention, support, and confidence, and receive challenging and interesting assignments. The leader might overlook their errors (Duarte, Goodson, and Klich, 1994), attribute them to factors outside the followers’ control, or recognize their contributions to a greater extent and reward them more (Burris et al., 2009). In exchange for the in-group status, the followers’ role is to work hard, be loyal, and support the leader. They are likely to work beyond their formally prescribed job duties (Liden and Graen, 1980) and increase their commitment to their goals (Klein and Kim, 1998).

For the members of the in-group, such a high-quality exchange often becomes a self-fulfilling prophecy and leads to high performance, high satisfaction, and low stress. Studies extend the impact of a positive LMX to safety communication, commitment, and reduction of accidents (Hofmann and Morgeson, 1999), and creative work involvement especially when employees have some work autonomy (Volmer, Spurk, and Niessen, 2012). Other studies found that a positive LMX is related to higher frequency of communication, which in turn leads to more favorable job performance ratings (Kacmar et al., 2003), It also may lead to higher outputs in research and development teams (Elkins and Keller, 2003), encourage in-group members to participate more (Burris et al., 2009), and may impact complaints and organizational commitment (Cheng et al., 2012). Some research suggests that a high quality in-group LMX has the most positive impact when it is based on social rather than economic exchange (Kuvass et al., 2012). Conceptual extensions of the model suggest that the positive work relationship might even extend to social networks, whereby leaders sponsor members of their in-group into various social networks (Sparrowe and Liden, 1997). Research indicates that a positive exchange with a leader plays a role in the extent to which employees feel the organization supports them (Wayne, Shore, and Liden, 1997).

The followers in the out-group face a different situation. The leader might perceive them as less motivated or less competent, interact with them less, provide them with few opportunities to perform, and promote them less often (Wakabayashi et al., 1988). Their role tends to be limited to that defined by formal job descriptions, with little or no expectation of high performance, commitment, or loyalty. They often have to find ways of compensating for the low-quality relationship they have with their leader (Kacmar, Zivnuska, and White, 2007). Regardless of whether the leader’s perception and expectations are accurate and fair, members of the out-group are likely to live up, or down, to them. As a result, out-group members who have a low-quality LMX will perform poorly and experience more stress. They also file for grievances more often (Cleyman, Jex, and Love, 1993), are more likely to take retaliatory actions against the organization (Townsend, Phillips, and Elkins, 2000), and may perceive more discrimination (Schaffer and Riordan, 2013).

The relationship between the leader and each follower forms early. The LMX model suggests that development of the leader–follower relationship takes place in stages summarized in Table 3-6. Additionally, leaders create positive relationships with three types of followers: those who are competent and show relevant skills, those whom they can trust, and those who are willing to assume more responsibility. Some research further suggests that followers can create a positive LMX by seeking feedback about their performance as long as the supervisor attributes the behavior to work rather than a desire to make a positive impression (Lam, Huang, and Snape, 2007). Culture can also play a key role in how in-group membership is assigned and which of these three factors is given more weight. In achievement-oriented cultures, such as the United States and Germany, individuals are evaluated based on their performance and achievement, rather than on their past or their membership in certain castes. Therefore, it is expected that leaders select their in-group members based on competence, performance, and commitment to the organization, rather than based on a personal relationship. Anything else would be called favoritism and nepotism. As a result, formal human resource policies and procedures, as well as day-to-day personnel practices, in such cultures focus on fairness, equal opportunity, and hiring those who are most qualified for the jobs based on their personal competence.

Table 3-6  Stages of Relationship Development between Leaders and Their Followers

In cultures such as many in the Middle East or France, where people are judged and evaluated more based on their group membership, rather than their individual achievement and performance, higher-quality exchange may depend more on the leader’s ability to trust followers, which is likely to be based on issues such as social class and birth (Trompenaars and Hapden-tuner, 2012). The concepts of nepotism and inappropriate favoritism to one’s in-group do not apply readily in ascriptive and collectivist cultures, where loyalty to one’s village, clan, or family is the primary concern. In such cultures, managers hire those they know directly or who are recommended by others they know. Skills and competence are secondary to such personal recommendations. In Hong Kong, for example, leaders are obligated to take care of their own people first (Adler, 1991). Malaysians place a strong emphasis on loyalty and harmony in the work group (Kennedy, 2002). In many Middle Eastern countries, including Arab and non-Arab countries, such as Afghanistan and Iran, leaders surround themselves with family and clan members who can be trusted and who are loyal. Doing otherwise would be disloyal to one’s community and even foolish. In such cultures, a wise leader does not allow strangers into the in-group, no matter how competent and qualified they are. Outsiders are hired to help, but access to the in-group is based on community factors. Recent studies further suggest that organizational culture may also affect the quality of the LMX, with better relationships in team-oriented cultures (Erdogan, Linden, and Kramer, 2006).

Evaluation and Application

Interest in LMX theory continues to be strong with many recent extensions and testing of its component and testing its application in various cultures. Several areas require further clarification. Specifically, researchers question the adequacy of the theory, the multiple measures, and the methods used to test the concepts (for a detailed review, see Schriesheim, Castro, and Cogliser, 1999). In addition, despite continued research, the factors that lead to the development of an in-group versus an out-group relationship need more attention. Some research suggests that similarity in regard to personality (Nahrgang, Morgeson, and Ilies, 2009) or perceived identity (Jackson and Johnson, 2012) plays a key role early in the relationship, whereas performance matters more as time goes on (Bauer and Greene, 1996). More research needs to be conducted in other areas as well, including identifying factors that affect the development of the LMX, assessing the desirability of having the two groups, the conditions under which subordinates move from one group to the other, and exploring the cultural factors that are likely to affect the decision on who belongs to the in-group. The research on the impact of gender similarity on the development of LMX, for example, requires further clarification. The results of at least one study in Mexico, however, show gender similarity to be related to lower absenteeism, particularly with female leaders (Pelled and Xin, 1997) and higher trust (Pelled and Xin, 2000).

From a practitioner and application point of view, the LMX model is appealing. Anyone who has been part of an organization has experienced the feeling of being part of either the in-group or the out-group. Many have seen the departure of a well-liked manager, who is replaced with someone who has his own team. The quick movement from in-group to out-group is felt acutely. The concept of in-group and out-group also can be perceived as violating the norm of equality, which is highly valued in many Western cultures, including the United States. As leaders, most of us can identify our in-group (see Self-Assessment 3-3). Our in-group members are the people we trust. They are our right-hand assistants. We can give them any assignment with confidence. They will get the job done without us having to check up on them. We also know the members of our out-group. Toward some, we feel neutral; others we dislike and may try to get transferred. In both cases, those individuals do not get many chances to interact with us, and they are not provided with many opportunities to demonstrate their competence on visible and key projects.

The development of an individual exchange with others is a natural part of any interaction. Such a situation can be highly positive for an organization, allowing for the identification of competent individuals and ensuring that they achieve organizational goals. The creation of in-groups and out-groups, however, can also be highly detrimental, leading to feelings and accusations of unfair treatment (Scandura, 1999). Alan Canton, president of Adams-Blake Co., a software company in California, faced considerable obstacles in the development of a new software when three of the five-member team assigned to the task formed a friendship—a clique—and decided to exclude the other two members (Rich, 2005). Canton addressed the problem head-on to get rid of the unproductive in-group/out-group that formed. The key issue is the basis on which such relationships are formed. Researchers suggest that personal compatibility and employee ability are the basis for selection (Graen and Cashman, 1975). Unfortunately, organizational reality does not always match theory. Most of us can identify, or were part of, LMX relationships based on either positive or negative personal feelings, stereotypes, or interpersonal conflicts. Many highly competent and qualified employees are excluded from a leader’s in-group based on personal dislike or organizational politics. After all, leaders are subject to human error just like the rest of us.

Abuse of power (discussed in Chapter 5) and membership of some top management teams (discussed in Chapter 7) are examples of the potential negative effects of in-groups. Being able to work with people, you trust and agree with and who share your vision for the organization sounds like an ideal situation for any leader, who would then not face unnecessary arguments and delays. Decisions would be made quickly and efficiently, and goals would be achieved. This ideal situation is exactly what many top-level executives attempt to set up when they select their top management team and the members of their board of directors. They pick people they trust and can work with. Executives rarely consciously and willingly pick members with whom they have major conflicts and differences. The goal is to create a workable team—a team made up of in-group members.

An example of the importance of being part of a team is the now-classic case of Michael Ovitz, who was hired to be Disney’s president and was fired 14 months later, receiving a $140-million severance package for his short tenure. During the trial of a lawsuit filed by a Disney shareholder against CEO Michael Eisner for wasting company resources by hiring and then firing Michael Ovitz, Ovitz testified that from the first day, he was left out of decisions and undercut by the Disney management team, who did not report to him (Holson, 2004a). Eisner, for his part, testified that he had to spend too much time managing Ovitz (considered one of the most powerful and successful wheeler-dealers in Hollywood when he headed the Creative Artists Agency before coming to Disney): “Every day I was trying to manage Michael Ovitz. I did little else” (Holson, 2004b: C1). Eisner further accused Ovitz of “un-Disney-like” behavior and of not fitting in with the rest of management team. Eisner cited an example of Ovitz taking a limousine instead of a bus with other executives and states that Ovitz “was a little elitist for the egalitarian cast members” (Holson, 2004b: C12). Although the Ovitz–Eisner case is much more complex than an LMX relationship, the poor relationship and the fact that Ovitz either did not fit in or was not allowed to be part of the in-group clearly played a role in his firing from Disney, a factor that, in turn, was central to the shareholder lawsuit.

Research on friendship patterns and attraction to others indicates that people tend to associate with those who are like them, have similar backgrounds, and share their values and beliefs. To counteract this potential bias, Maggie Widerotter of Wink Communication makes a point of taking time to look for employees she does not see on a regular basis. She takes time to get out of her office and go on what she calls a “lion hunt” that gives her a chance to connect with employees.

Without a conscious effort to seek out new people, the in-group for most leaders includes people who are like them, with similar backgrounds and views. This homogeneity in top management teams and board membership caught the blame recently for many of the problems in U.S. businesses. Industrial giants such as General Motors, AT&T, and IBM suffered from the lack of initiative and creativity of their top management teams. The members worked well together and disregarded input from outsiders. As a result, they failed to foresee the problems and full consequences of their decisions or inaction. The same pursuit of homogeneity was also seen as a weakness in President George W. Bush’s inner circle and administration and its decision making on highly complex issues such as the war in Iraq or the firing of U.S. attorneys. The ease, comfort, and efficiency of working with a cohesive in-group are usually because of the similarity of its members. These advantages, however, are sometimes offset by a lack of creativity and limited decision making. In an ideal case, no in-group or out-group should exist. All of a leader’s subordinates should have equal access to the leader and to projects and resources. Those who do not perform well should be helped or moved out of the group altogether. Reality, however, is different, and avoiding the creation of in-groups and out-groups is difficult.

One of the key issues then becomes how members are selected to be in each group. For the individual relationship to be productive, leaders should follow some general principles in creating in-groups and out-groups and in selecting their membership. It is important to note that these guidelines apply mostly to achievement-oriented rather than ascriptive cultures:

• Pick in-group members based on competence and contribution to the organization.

• Periodically evaluate your criteria for in-group and out-group membership.

• Assign tasks to persons with the most applicable skills, regardless of group membership.

• Set clear, performance-related guidelines for in-group membership.

• Avoid highly differentiated in-groups and out-groups.

• Keep membership fluid to allow movement in and out of the groups.

• Maintain different in-groups for different activities.

The concept of exchange in the leadership interaction and the importance of the relationship between leaders and their followers continue to be of interest and are expanded and developed further in a more recent model of leadership, Transactional-Transformational Leadership, covered in more detail in Chapter 6.

The Leadership Question—Revisited

Modern leadership theory has shown that being a leader is much more than a collection of traits. There may be some people who have a set of traits that can help in leadership, but leaders are not born. They are made from experience and from the interaction of individual and many contextual factors. While certain traits may make leadership difficult, there are no traits that guarantee that someone will be an effective leader. Most leaders succeed when they find themselves in the right situation that they can mold, or when they can adapt their style to the situation.

Summary and Conclusions

The scientific approach to understanding leadership that started at about the time of the industrial revolution added rigor and attempts at precise measurement to other already-existing views about leadership. The first modern approaches focused on the identification of traits that would distinguish leaders and followers. Although certain traits were found to be associated with leadership, no simple sets of traits consistently predicted who would be an effective leader. Because of inconclusive results, researchers turned their attention to leadership behaviors. The two major categories of initiation of structure and consideration were established as the central leadership behaviors. The switch from simple traits to simple behaviors still did not account for the complex leadership process and, therefore, did not allow researchers to make strong predictions about leadership effectiveness.

The early theories that are the foundation of modern leadership address either the way leaders use resources or the relationship between the leader and the follower. Fiedler’s Contingency Model and the Normative Decision Model consider how the leader uses resources that are available and propose that the leader’s style must be matched to the situation to achieve effectiveness. Whereas the Contingency Model assumes that the leader’s style (LPC) is determined by internal traits and therefore difficult to change, the Normative Decision Model relies on decision-making styles that are assumed to be learnable. The two also differ on the criteria they use for leadership effectiveness. The Contingency Model looks at group performance; the Normative Decision Model focuses on decision quality. Perhaps their most interesting contribution to leadership application and training is that both models involve a series of well-defined variables that can be used to improve leadership effectiveness.

The relationship-based theories focus on the relationship between the leader and the follower. The Path–Goal Theory proposes that the leader’s main function is to remove obstacles in the subordinates’ path to allow them to perform their jobs and to be motivated and satisfied. The Substitutes for Leadership Model (SLM) explores situations in which a relationship between the leader and subordinates is not needed and is replaced by individual, group, and organizational factors. Finally, the Leader–Member Exchange (LMX) Model focuses on the dyadic relationship between a leader and each follower and proposes the concept of in-groups and out-groups as the defining element of that relationship.

All the models use a contingency view of leadership, and in all of them, the leader’s behavior or style depends on the requirements of the situation. Although the concept of task and relationship orientation continues to be dominant, several of the models consider other factors, thereby expanding our views of leadership. The structure and routine of the task continue to be key situational factors, although other variables such as follower independence and maturity are also introduced.

The contingency models of leadership presented here are the foundation of current theory in leadership and continue to dominate the field of leadership. The models differ in the factors they use to describe the leader’s style or behavior and elements of the leadership situation that are considered (Table 3-7).

Table 3-7  Comparison of the Early Contingency Models of Leadership

Alternate View

For each model, however, the focus is on the match between the leader and the situation. The extensive research about the various contingency models, although not always consistent and clear, led to the broad acceptance and establishment of the concept of contingency in leadership. Clearly, no one best way to lead exists. Effective leadership is a combination of and match between the leader and the leadership situation.

Review and Discussion Questions

1. What are the similarities and differences between the trait and behavior approaches to leadership?

2. What are the major assumptions of the contingency approach to leadership?

3. Define the leadership and situational factors included in Fiedler’s Contingency Model. What are the primary predictions of the model?

4. After assessing your own style, interview several people with whom you worked to determine whether their perceptions match your score based on the LPC.

5. Provide examples for the situations in which each of the major decision styles of the Normative Decision Model would be appropriate.

6. Provide examples of how the Path–Goal Theory of leadership can be used to improve leadership effectiveness.

7. What are positive and negative impacts of substitutes on leaders and organizations? Provide examples.

8. How does the LMX Model differ from all the other contingency theories of leadership?

9. How can leaders use the LMX Model in improving their effectiveness?

10. Compare and contrast the contingency models of leadership. How do they each contribute to our understanding of leadership?

Leadership Challenge: The In-Group Applicant

You are an expatriate manager sent to work in the Indian operation of your company. As you get settled in, one of your first decisions is to hire an assistant manager. Your efficient office manager, who has been extremely helpful to you already and has been with the company for many years, quickly suggests one of his relatives, who, he tells you, would be perfect for the job. According to him, his cousin just graduated from a top business school and, most important, is trustworthy, loyal, and eager to work and learn. Your office manager tells you that his cousin will be coming shortly to introduce himself. He tells you that you don’t have to be inconvenienced any further and won’t need to waste your time interviewing and checking references of strangers who could be unreliable.

1. How do you interpret and explain your office manager’s actions?

2. Will you hire the “cousin”?

3. What factors do you need to consider before making your decision?

Exercise 3-1: The Toy Factory

The goal of this exercise is for each group to produce as many high-quality toy wolves as possible. Your instructor will assign you to a group, designate the leader, and provide you with a list of materials needed for making the toy wolves. Your team leader will give you instructions on how to make the toys. After a 15-minute production run, each group’s productivity will be measured.

The Toy Factory Worksheet

1. How would you describe your team leader’s style of leadership? Provide several specific behavioral examples.

2. How did you react to your leader’s style? How satisfied were you?

3. What improvement suggestions (if any) could you offer your leader?

Exercise 3-2: Using the Normative Decision Model

This exercise is based on the concepts and principles presented in the Normative Decision Model of leadership. Use the contingency factors presented in Table 3-4 to analyze each case. Figure 3-2 along with Table 3-3 provides a guide to the appropriate decision styles for each case.

Case 1: Centralizing Purchasing

You are the western regional manager in charge of purchasing for a group of hospitals and clinics. Your territory includes eight western states. You recently joined the group but you brought with you nearly 10 years of experience in purchasing with one of the company’s major competitors. One of your major achievements in the previous job was the implementation of a highly efficient companywide purchasing system. The health group oversees more than 30 associated health clinics and hospitals in your region alone. Each center operates somewhat independently without much control from the regional purchasing manager. Several of the clinics are cooperating under informal arrangements that allow them to get better prices from suppliers. The purchasing managers from the larger hospitals in your region, on the other hand, have almost no contact with one another or you. As a result, they are often competing for suppliers and fail to achieve economies of scale that would allow them to save considerable costs on their various purchases. In other cases, the managers rely on totally different suppliers and manage to obtain advantageous contracts.

With the pressure to cut health-care costs, the health group’s board of directors and the group’s president identified purchasing as one area where savings need to be achieved. You are charged with centralizing purchasing, and you are expected to reduce the costs of purchasing by at least 15 percent within a year.

You still need to meet many of the purchasing managers who are supposed to report to you. Your appointment was announced through a memo from the group’s president. The memo also mentioned the need to cut costs in all areas and indicated the need to focus on purchasing as first step. The purchasing managers you did meet or contact were civil but not overly friendly. With only six months to show the first results, you need to start planning and implementing changes as soon as possible.

Analysis and Recommendation

Using the problem requirements, decision rules, and leadership styles of the Normative Decision Model, indicate which decision style(s) would be most appropriate.

1. What type of problem is it: group or individual?

2. Contingency Factors:

   • Is there a quality requirement?

   • Does the leader have enough information to make a high-quality decision?

   • Is the problem clear and structured?

   • Is employee acceptance of the decision needed for its implementation?

   • Will subordinates accept the decision if the leader makes it by himself or herself?

   • Do subordinates share the organization’s goals for the problem?

   • Is there conflict among subordinates (are they cohesive) regarding the problem?

3. What are acceptable decision styles? Why?

4. What are unacceptable decision styles? Why?

Case 2: Selecting the Interns

You are the manager of the public relations and advertising department of a large electronics plant. Through your contacts with a local university, you made arrangements for your department to hire several interns in public relations and marketing every summer. Your company supports the idea, because ties with universities are important to you. The interns provide support to your department and work directly with your assistant and report to him. They spend most of their time observing various activities and helping where needed. The interns hired over the past years were all excellent and helpful. Your assistant enjoys working with them and even helped several of them find jobs after they graduated, some within your company.

This year, you received more than twenty applications, but your funding only allows you to hire two. You need to decide which two to hire.

Analysis and Recommendation

Using the problem requirements, decision rules, and leadership styles of the Normative Decision Model, indicate which decision style(s) would be most appropriate.

1. What type of problem is it: group or individual?

2. Contingency factors:

   • Is there a quality requirement?

   • Does the leader have enough information to make a high-quality decision?

   • Is the problem clear and structured?

   • Is employee acceptance of the decision needed for its implementation?

   • Will subordinates accept the decision if the leader makes it by himself or herself?

   • Do subordinates share the organization’s goals for the problem?

   • Is there conflict among subordinates (are they cohesive) regarding the problem?

3. What are acceptable decision styles? Why?

4. What are unacceptable decision styles? Why?

Case 3: Moving to a New Location

You are the manager of a medium-sized city in the Midwest. Through a number of exchanges between the state, local cities, and several businesses, the city recently acquired a building that could house several departments. The building is within one-half mile of other major municipal offices. Although the building is newer than most of the other city buildings and offers larger offices, it is relatively sterile and does not have the charm of many of the older buildings. You inspected the building and also just received the report from the space allocation committee that is working on the problem of overcrowding of several departments. You identified five departments that could move to the new location. After the initial disruption caused by the move, neither the departments’ employees nor their constituents would be affected by the move.

Because of the demand for office space, you must make the decision in the next two days. You are aware of the considerable disagreement among the various departments’ employees as to which building is a better location and who would be less negatively affected by the move. Everyone agrees that overcrowding is a problem.

Analysis and Recommendation

Using the problem requirements, decision rules, and leadership styles of the Normative Decision Model, indicate which decision style(s) would be most appropriate.

1. What type of problem is it: group or individual?

2. Contingency factors:

   • Is there a quality requirement?

   • Does the leader have enough information to make a high-quality decision?

   • Is the problem clear and structured?

   • Is employee acceptance of the decision needed for its implementation?

   • Will subordinates accept the decision if the leader makes it by himself or herself?

   • Do subordinates share the organization’s goals for the problem?

   • Is there conflict among subordinates (are they cohesive) regarding the problem?

3. What are acceptable decision styles? Why?

4. What are unacceptable decision styles? Why?

Self-Assessment 3-1: Determining Your LPC

To fill out this scale, think of a person with whom you have had difficulty working. That person may be someone you work with now or someone you knew in the past. He or she does not have to be the person you like the least well, but should be the person with whom you experienced the most difficulty. Rate this person on the following scale.

Scoring Key: A score of 64 or below indicates that you are task motivated or low-LPC. A score of 73 or higher indicates that you are relationship motivated or high-LPC. If your score falls between 65 and 72, you will need to determine for yourself in which category you belong.

Source: F. E. Fiedler and M. M. Chemers. Improving Leadership Effectiveness: The Leaders Match Concept, 2nd ed. (New York: Wiley, 1984). Adapted with permission.

Self-Assessment 3-2: Assessing a Leadership Situation

This assessment is based on Fiedler’s Contingency Model and is designed to allow you to assess a situation you faced as a leader. To complete the questions in each category, think of a current or past situation at work, in sports, or in social or church events where you were the formal or informal leader of a group of people. You were either successful or not so successful. Rate the situation by circling one of the alternatives for each of the following questions; use the same situation to answer all the questions. You will evaluate your effectiveness, relationship with your followers, the structure of the task, and the power you had.

Self-Rating of Effectiveness

1. Considering the situation and task, how effective were you as a leader?

   3	2	1
   Very effective	Moderately effective	Not at all effective

2. How effective was your group in completing its task?

   3	2	1
   Very effective	Moderately effective	Not at all effective

3. How would you rate the overall performance of your group?

Now add up the score of the three questions. The maximum score is 10; minimum is 3. A high-performance score would indicate effectiveness. A score between 7 and 10 indicates high performance; a score between 6 and 4 is moderate performance; score of 3 indicates poor performance.

Total Effectiveness score:           

Leader–Member Relations (LMR) Scale

Write the number that best represents your response to each item using the following scale:

• 1 = Strongly agree

• 2 = Agree

• 3 = Neither agree nor disagree

• 4 = Disagree

• 5 = Strongly disagree.

  •            1. The people I supervise have trouble getting along with each other.

  •            2. My subordinates are reliable and trustworthy.

  •            3. A friendly atmosphere exists among the people I supervise.

  •            4. My subordinates always cooperate with me in getting the job done.

  •            5. Friction is present between my subordinates and myself.

  •            6. My subordinates give me a good deal of help and support in getting the job done.

  •            7. The people I supervise work well together in getting the job done.

  •            8. I experience good relations with the people I supervise.

Scoring: Add up your scores for all 8 questions.

Total LMR score:            (Save to enter in Sit Con at the end)

Task Structure Rating Scale—Part I (TS Part I)

Write the number that best describes your group’s task using the following scale:

• 0 = Seldom true

• 1 = Sometimes true

• 2 = Usually true

Goal Clarity

•            1. A blueprint, picture, model, or detailed description of the finished product or service is available.

•            2. A person is available to advise and give a description of the finished product or service, or how the job should be done.

Goal–Path Multiplicity

•            3. A step-by-step procedure or a standard operating procedure indicates in detail the process that is to be followed.

•            4. A specific way to subdivide the task into separate parts or steps is provided.

•            5. Some ways for performing this task are clearly recognized as better than others.

Solution Specificity

•            6. It is obvious when the task is finished and the correct solution is found.

•            7. A book, manual, or job description indicates the best solution or the best outcome for the task.

Availability of Feedback

•            8. A generally agreed understanding is established about the standards the particular product or service must meet to be considered acceptable.

•            9. The evaluation of this task is generally made on some quantitative basis.

•           10. The leader and the group can find out how well the task was accomplished in enough time to improve future performance.

Add up your scores for all 10 questions. Total for TS (Part I):           

Task Structure Rating Scale—Part II (TS Part II)

Only complete if your score on TS Part I is higher than 6.

Training and experience adjustment (circle a number for each of the following questions)

1. Compared to others in this or similar positions, how much training have you had?

   3	2	1	0
   No training at all	Very little training	A moderate amount of training	A great deal of training

2. Compared to others in this or similar positions, how much experience do you have?

Add the numbers you circled for the two questions. Total TS (Part II):

Scoring Task Structure

• Total from TS—Part I:           

• Subtract Total from TS—Part II:           

• Total TS score:            (Save to enter in Sit Con at the end)

Position Power (PP) Rating Scale

Circle the number that best describes your answer.

1. As the leader, I can directly or by recommendation administer rewards and punishments to my subordinates.

   2	1	0
   Can act directly or can recommend with high effectiveness	Can recommend but with mixed results	Cannot recommend

2. As the leader, I can directly or by recommendation affect the promotion, demotion, hiring, or firing of my subordinates.

   2	1	0
   Can act directly or can recommend with high effectiveness	Can recommend but with mixed results	Cannot recommend

3. As the leader, I have the knowledge necessary to assign tasks to subordinates and instruct them in task completion.

   2	1	0
   Yes, I have knowledge	Sometimes or in some aspects	No, I do not have knowledge

4. As the leader, it is my job to evaluate the performance of my subordinates.

   2	1	0
   Yes, I can evaluate	Sometimes or in some aspects	No, I cannot evaluate

5. As the leader, I have some official title of authority given by the organization (e.g., supervisor, department head, team leader).

Scoring: Add your scores for the five PP questions.

     Total PP score:            (Save to enter in Sit Con at the end)

Situation Control (Sit Con) Score

Add up the scores of the LMR, TS, and PP scales.

LMR + TS + PP = Sit ConLMR + TS + PP = Sit Con

Using the ranges provided, evaluate the situational control you have as the leader in the situation you described.

Source: F. E. Fiedler and M. M. Chemers, Improving Leadership Effectiveness: The Leaders Match Concept, 2nd ed. (New York: Wiley, 1984). Adapted and used with permission.

Evaluation and Discussion

Self-Assessment 3-1 provided you with your LPC score; Self-Assessment 3-2 helped you assess the situational control you have as a leader. Fiedler’s Contingency Model suggests that if you are a low-LPC task-motivated leader, you and your group will perform best in high- and low-situational control. If you are a high-LPC relationship-motivated leader, you and your group will perform best in moderate-situational control. If the leader is “in match,” the group will perform best.

1. Were you “in match” with the situation you described?

2. To what extent did your level of effectiveness (refer to the self-rating at the beginning of this exercise) match Fiedler’s predictions? Why or why not?

Self-Assessment 3-3: Identifying Your In-Group and Out-Group

This exercise is designed to help you identify the members of your in-group and out-group and your own behavior toward members of each group.

Step 1: Identify the Members

Make a list of the subordinates (or team members) whom you trust. Select people who work for you (or with you) and whom you like and respect, people who enjoy your confidence.

Make a list of the subordinates (or team members) who you do not trust. Select people who work for you (or with you) and whom you do not like or respect.

Step 2: Membership Factors

Reflect on the commonalties among the group members for each group. What are the factors that caused them to be in each group? Consider behaviors, personalities, and demographic factors, as well as any other relevant factors.

Step 3: How did You Treat Them?

Describe your own behavior as a leader toward each group and its members:

Step 4: Self-Evaluation

1. What does it take for a person to move from your in-group to your out-group?

2. How does having two groups affect your group or department and the organization?

3. To what extent is group membership based on organizational versus personal factors?

4. What are the implications for you as a leader?

Leadership in Action

The Caring Dictator

By any measure, Jack Hartnett, the president of Texas-based D.L. Rogers Corp., is a successful man. D.L. Rogers owns 54 franchises of the Sonic roller-skating nostalgic hamburger chain, which generate $44 million in revenues for the company. Hartnett’s restaurants make 18 percent more than the national average, and turnover is incredibly low for the fast-food industry, with a supervisor’s average tenure at 12.4 years. He knows what he wants, how to keep his employees, and how to run his business for high profit.

In a management world where everyone will tell you that you need to be soft, be participative, be open to ideas, and empower employees, Jack Hartnett appears to be an anachronism. He runs his business on the Sinatra principle: “My Way!” He tolerates little deviation from what he wants, his instructions, and his training. He is absolutely sure he knows the best way, and more than one employee is scared of disagreeing with him. He likes keeping people a little off balance and a little queasy so that they will work harder to avoid his wrath. Hartnett even has his own Eight Commandments, and he will fire those who break any one of them twice. The last Hartnett commandment is, “I will only tell you one time.” Interestingly, he believes that his style shows that he really cares about his people: “The success of our business is that we really care about our owner-operators—we don’t have managers. Our No. 1 focus is to take care of our people” (Ruggless, 1998).

Hartnett restaurants run like clockwork. He does the top-level hiring himself and is reputed to spend as long as 10 grueling hours with prospective managers and their spouses. He wants to know about their personal lives and their financial health and looks for right responses and any signs of reticence to answer questions. Hartnett says, “I want them to understand this is not a job to me. This is a lifetime of working together. I want partners who are going to die with me” (Ballon, 1998: 67). If you are one of the selected few, you are expected to be loyal and obedient. Once a quarter, you can also expect a Hartnett “lock-in” meeting, where Jack will take you away along with other supervisors to a secret location with no chance of escape. You can expect to be blindfolded, put through survival exercises, and sleep in tents before you go to a luxury resort to discuss business.

For all their trouble and unquestioning obedience and loyalty, D.L. Rogers’ employees and supervisors find a home, a family, a community, and a place to grow. If you have problems with your husband, like Sharon, the wife of one of the D.L. Rogers’ supervisors, you can call Jack. He will listen to you, chew your spouse out, and send him home for a while. Hartnett says, “I don’t want you to come to work unhappy, pissed off, upset, or mad about anything, because I don’t think you can be totally focused on making money if you’re worried” (Ballon, 1998: 63). He pays his employees considerably above national averages, plays golf with them, and gets involved with their personal lives. Hartnett wants to create a bond that lasts. A few years ago, he spent $200,000 to take 254 managers and their families to Cancun, Mexico, for four days. They got training on better time management and marketing techniques, and on how to be a better spouse.

Hartnett also likes to have fun. Practical jokes, including gluing supervisors’ shoes to the floor, are common. But he also works hard. Eighty-hour weeks are common, and he starts his days earlier than most. He is not above taking on the most menial jobs in the restaurants and is willing to show the way, no matter what. His presence, his energy, and his unbending confidence in “his way” make converts. Hartnett has created an organization that is consistent and that simplifies everybody’s life.

Questions

1. How would you describe Jack Hartnett’s leadership style?

2. Why is he successful? Would you work for him?

Sources: Ballon, M. “Extreme managing,” Inc., July 1998, 60–72. Ruggless. R. D. L. Rogers Group. 1998. Nation’s Restaurant News, January. http://findarticles.com/p/articles/mi_m3190/is_n4_v32/ai_20199540/ (accessed January 20, 2010).