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Chapter 11 Leadership Authority McGraw-Hill/Irwin Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. 11-2 Learning Points • In Part 4, The Empowerment of People, you will learn the answers to these questions: – What is your approach to leadership? – Do you view leadership as a calling to serve? – What practical steps can a leader take to empower others and develop a high-performance workplace? – What are your beliefs and practices regarding quality in the workplace? 11-3 Leadership Authority • There are two views on leadership authority: – Top-down – Bottom-up • The top-down theory holds” – Leadership authority is based on position in a social hierarchy – Power flows from the highest level to the lowest 11-4 Top-Down View • In an organizational pyramid: – Workers support managers – Managers support executives • The pyramid serves as the basis of most classical organizational structures 11-5 Top-Down View • The top-down concept is the traditional view of leadership in the U.S. – The right of authority is derived from the right of private property – Owners have the right to manage their own affairs, as long as they do not violate the rights of others • Transfer of authority: – Owners transfer power to a board of directors – The Board appoints executives to manage – Executives give authority to managers and employees 11-6 Transfer of Authority 11-7 Bottom-Up View • The bottom-up theory holds that: – Power flows from below because people can reject a directive by saying no – Saying yes or no affirms or denies the authority of others • This theory was first described by Chester Barnard of AT&T 11-8 Bottom-Up View • According to Barnard, an order will be accepted if four conditions are met: – The person understands the order – The order is consistent with the organization’s goals – The person believes that the order is compatible with his/her interests – The person is mentally and physically able to comply 11-9 Bottom-Up View • Leaders must make sure that: – Directives fall within their subordinates’ zones of acceptance – If not, orders may be met with resistance and even hostility 11-10 Top-Down Vs. Bottom-Up • Both views have merit – By accepting employment, employees acknowledge: • The authority of owners and managers to make decisions and give orders • Their duty to comply and obey • The successful manager: • Acknowledges the employees’ power to achieve their own and organizational goals • Has the consent of those being governed 11-11 Top-Down Vs. Bottom-Up • The servant leadership approach: – Recognizes both the top-down and bottom-down views – Addresses the leadership-follower condition 11-12 Servant Leadership • Servant leadership is a calling to serve – It begins with caring for and wanting to help others – Great leaders are servants first • People do not trust the self-server – Trust is given to leaders who work for the common good – People choose to follow and work with servant leaders 11-13 Servant Leadership • According to management author Robert Greenleaf: – The Journey to the East represented the meaning of leadership transformation – Servant leadership is the true motivation to serve others – Servant leaders stay in touch with the challenges and problems of others 11-14 Access, Communication, and Support • Servant leaders are committed to people – This commitment is shown through access, communication, and support • Access: – People need face-to-face access to their leaders – Email is not as effective – Effective leaders recognize “contact” as a primary task 11-15 Access, Communication, and Support • Communication: – Good leaders understand the value of communication • Even Julius Caesar in 59 B.C. kept people informed with handwritten sheets and posters – Meetings are an opportunity to: • Share information • Lay out work and anticipate problems • Gather information • Reinforce cooperative helpfulness and support • Close the communication loop 11-16 Access, Communication, and Support • Support: – People benefit from support in the form of feedback – As a rule, they do not get enough of it – Support does not mean praise only – Leaders know that praise without support is an empty gesture 11-17 Servant Leadership • Servant leadership: – Encourages trust, listening, and ethical use of power and empowerment – Uses the upside-down pyramid approach: • Workers are near the top, supported by leaders below them • Each person provides added value • The whole organization is devoted to satisfying the customer 11-18 The Upside-Down Pyramid Approach 11-19 Servant Leadership • Max DePree, in Leadership Is an Art, describes servant leadership: – The first responsibility of a leader is to define what can be – The last is to say thank you – Between the two, the leader must be a servant and a debtor • Being a leader means having an opportunity to make a difference in the lives of those who permit leaders to lead 11-20 Participative Leadership Philosophy • Participative leadership: – Begins with involving people • Involvement leads to understanding, which leads to commitment – Taps the constructive power of people – Creates a humanistic and productive workplace – Means understanding the views and interests of all affected 11-21 Participative Leadership Philosophy • To achieve an empowered workplace: – Participative leaders must adopt the philosophy of the Japanese Union of Scientists and Engineers • Workers should be treated as human individuals • Without due consideration, companies will lose workers • It is more desirable to work in a pleasant environment • A mechanized factory still requires control by a workshop of people 11-22 Participative Leadership Philosophy • Example of Participative Leadership: Jack Stack, open-book management – Open-book management involves: • Sharing financial information with employees • Encouraging them to recommend ideas that improve financial results 11-23 Participative Leadership Philosophy • According to management authors Warren Bennis and Philip Slater: – The shift toward participative leadership is necessary for organizations to survive chronic change – Participative leadership is democratic 11-24 Participative Leadership Philosophy • Participative management involves a system of beliefs and common values: – Communication regardless of rank or power – Reliance on consensus to manage conflict – Influence based on technical competence and knowledge – An atmosphere that permits and encourages emotional expression and task-oriented acts – Acceptance of the inevitability of conflict between the organization and individuals, and a willingness to cope with it rationally 11-25 Participative Leadership Philosophy • The continuum of empowerment: – Work systems and techniques for employee participation are arranged along a continuum – Employees on the left have less power and involvement in decision making – Employees on the right are more involved, yet not so involved that owners and managers fear power loss 11-26 Participative Leadership Philosophy 11-27 Participative Leadership Philosophy • Participative leadership: – Has roots in democratic ideals – Lets leaders tap the constructive power of groups • In Productive Workplaces, Marvin Weisbord claims: – The democratic process is the best procedure for promoting decision-making – It safeguards the conditions necessary for selfactualization – It allows individuals to participate in decisions that determine his/her conditions of life 11-28 The Leadership Position • Leadership is needed in all areas of society and at all levels of responsibility – Power and responsibility come with the office of leadership – Titles of leadership include: • President • Chief • Captain • Manager • Director • Supervisor 11-29 The Leadership Position • Example of a leader using power effectively: – Herb Kelleher, former CEO of Southwest Airlines – Recognized as America’s most effective executive • Involved in day-to-day operations • Got to know people in a personal way • Treated employees like customers • Listened to people’s ideas • Thought that saying “no” without listening was an abuse of power and constrained thinking 11-30 Negative Consequences and Power • Abraham Lincoln once said: – Nearly everyone can stand adversity, but if you want to test a person’s true character, give him power. • T. S. Elliot wrote: – Half of the harm that is done in this world is caused by people who have power and want to feel important. They do not mean to do harm; they are simply absorbed in the useless struggle to think well of themselves. 11-31 Negative Consequences and Power • A study revealed the consequences of the negative use of power in the medical world: – There was a dramatic performance difference between two groups • One group unquestioningly followed the lead of an autocratic physician • The second group functioned as a team of colleagues, all of whom could make suggestions • The autocratic group had higher turnover, lower efficiency, and twice the rate of patient deaths 11-32 Negative Consequences and Power • The idea not abusing leadership power is very old: – Lao-tzu, the founder of Taoism, had three things that he prized: • Gentleness • Frugality • Humility, which kept him from putting himself before others – Be gentle and you can be bold – Be frugal and you can be liberal – Put others first and you can become a leader 11-33 Sources of Leadership Power • There are two sources of the power used by leaders: – The power of the position – The leader’s personal qualities • Position powers: – Reward – Coercive – Legitimate – Information • Person powers: – Expert – Referent – Rational – Charisma 11-34 Psychological Size and Communication • Psychological size has relevance for people in authority positions: – Leaders can influence the communication process – Employees are in a weaker position and depend on the leader – Can affect relationships and determine the way things are done – Others may fear a leader’s power and inhibit behavior 11-35 Abuse of Psychological Size • One-way communication 11-36 Psychological Size and Communication • One-way communication can cause people to be: – Reluctant to say or do anything that may offend the leader – Dependent on the leader to make all the decisions – Resentful of the leader 11-37 Psychological Size and Communication • Factors that contribute to psychological bigness – High-status position – Using terminal statements – Formal, distant manner – Know-it-all, superior attitude – Commanding physical appearance – Power to make decisions – Use of sarcasm, ridicule, cruel remarks – Job competence 11-38 Psychological Size and Communication • Factors that contribute to psychological bigness – Ability to express oneself – Interrupting and shouting at others – Public criticism • Some items on this list are distinctly positive – Factors in Green should not be changed – All others alienate people and result in one-way communication 11-39 Psychological Size and Communication • Leaders should avoid any behavior that demeans or intimidates others – The solution is to equalize psychological size – Do not reduce your size so much that respect is lost; it may not be regained – Few can go from large to small psychological size and back again without losing effectiveness • Effective use of psychological size is shown on the next slide 11-40 Psychological Size and Communication 11-41 Psychological Size and Communication • Leaders: – Never obstruct the growth of others – Show genuine interest in others – Show that others are important by listening – Assign work to “grow on” • Developing two-way communication requires: – Modeling an honest, open style of communication – Being patient – Drawing people out without evaluating their remarks 11-42 Guidelines for Two-Way Communication • • • • • • • • • • • Stop talking Put the talker at ease Show that you want to listen Remove distractions Empathize with the person Be patient Hold your temper Limit argument and criticism Ask questions Encourage clarification Stop talking 11-43 Guidelines for Two-Way Communication • Effective leaders understand that: – Psychological bigness and overbearance is effective for only a short time – Dissatisfaction will cause employees to rebel or escape 11-44 Lessons from Gandhi • Gandhi learned the power of civil disobedience and patience from his wife: – Most people will do what they choose to do – No amount of coaxing or force can overcome an idea or principle that is personally believed – Great leaders guide and inspire—not command and control