Chap 7.

3: Leadership

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I. The purpose of leadership
The vision that propels a corpora0on forward is provided by leaders. They make the tough
choices and can mo0vate or force through challenging changes. The direc0on must come
from somewhere, even though it may not always be in the hands of one individual or even a
team of people. People look to a leader, especially during a crisis, for direc0on and to
demonstrate what to do; for this reason, when an organisa0on is having problems, a new
leader is frequently appointed.
The roles of a leader include:
• SeAng objec0ves
• SeAng organiza0onal culture
• Deciding the organiza0onal structure
• Role model for employees

Leadership Roles
An entrepreneur who is crea0ng or changing the organisa0onal structure of an exis0ng
organisa0on is likely to take several staff posi0ons into considera0on.

Directors: The CEO might commit to appoint directors aLer they are chosen by
shareholders. Their tasks are mostly strategic, involving planning and monitoring how the
company is fulfilling its long-term objec0ves. Directors with par0cular skill sets could be
hired for a par0cular corporate func0on, like marke0ng.

Managers: By monitoring the implementa0on of short-term strategies, managers plan,

coordinate, and inspire the workforce while also controlling and mo0va0ng them.

Supervisors: Supervisors interact directly with workers on the shop floor, and managers give
them the power to use various methods to discipline workers below them.

Worker representaAves: Employees elect worker representa0ves, who serve as a liaison

between management and the workers. They perform a variety of tasks, including as
direc0ng nego0a0ons over issues pertaining to wages, holidays, and working condi0ons.

The qualiAes of a good leader

In recent years, the business environment in which execu0ves work has evolved. Many
subordinates will not just follow orders; junior and middle managers are frequently well-
trained and an0cipate being able to par0cipate in decision-making. The contemporary
leader must consider their opinions and widen the ownership of decision-making. The
management team's assistance is crucial to the leader because of the complexity of many
modern organisa0ons.
Addi0onally, due to the rapid rate of change, today's leaders must be adaptable, flexible,
and able to adapt to their environment. Leaders of companies that offer technology
products or services may undergo rapid change in par0cular and may need to adapt.

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TradiAonal qualiAes:
• Decisive and controlling
• Exper0se in related business func0on
• An autocra0c leaning leadership style
• Result oriented

Modern qualiAes:
• Charisma0c, good PR skills
• Comfortable with two-way communica0on
• High EQ andability to take ethical decisions
• Flexible and open to change

II. Leadership theories

A. Trait theory
According to the belief, effec0ve leaders possess a par0cular set of quali0es that set them
apart from regular people. Trait theories have developed from the concept of the
charisma0c leader. Supporters of the idea of the charisma0c leader contend that such
individuals have iden0fiable characteris0cs that set them apart from ordinary mortals..
These include:
• Being knowledgeable
• Innova0ve and crea0ve
• Determined and driven to achievement
• Having the ability to make quick decision

B. Behavioural theory
This theory focuses on how people conduct or behave when in a posi0on of power rather
than how leaders are. Instead than focusing on what a leader is like as a person, these ideas
aXempt to define the proper method to lead by focusing on how a leader behaves.

AutocraAc: Prac0ce downward communica0on, don't accept input from subordinates, and
make all significant choices without consul0ng them. Autocra0c leaders are good for novice
workers and effec0ve in emergency situa0ons requiring quick choices, such as those found
in hospital emergency rooms.

DemocraAc: Make decisions in consulta0on with subordinates, give staff members some
responsibility, and use two-way communica0on. Employees with experience and

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independence who enjoy taking on responsibility and ini0a0ve would benefit from this
leadership style.

Laissez-faire: Give subordinates the freedom to make all decisions with liXle to no oversight.
Communica0on is very scarce. A laissez-faire manager will work in crea0ve industries where
the quality of the product or service rely on highly talented and knowledgeable personnel,
such as website design.

C. ConAngency theory
According to this group of views, a leader's ability to effec0vely manage a given situa0on
determines how effec0ve they are. As a result, a leader could perform admirably in one set
of circumstances but poorly in another. The nature of the subordinates, the responsibili0es
assigned to the employees, and the goals of the company are all variables that affect these
situa0ons.

Task oriented: Leaders perform well where comple0ng par0cular tasks is central to the
situa0on.

Task-oriented leaders will work effec0vely in favorable situa0ons, such as where employees
trust them, du0es are clearly defined, and they have power. Furthermore, task-oriented
leaders are more likely to succeed than people-oriented leaders under challenging
condi0ons. This is because when the rela0onship between leaders and employees is poor, a
people-oriented leader will have liXle impact on employees. On the other hand, a task-
oriented leader will be able to provide clear direc0on and structure to employees which will
help perform beXer.

People-oriented: These leaders are good are building and maintaining good rela0ons with
subordinates.
Condi0ons that are rela0vely favorable are op0mal for people-oriented leaders. It will be
crucial to build posi0ve rela0onships to unite and inspire workers to accomplish the task
when the leader is at least somewhat well- liked by the group, has some authority, and tasks
are fairly regimented.

D. Power theory
Based on the kind and degree of control and influence they have over others, these ideas
suggest that people develop different leadership philosophies.

Coercive: Leaders with such authority u0lize threats of punishment, such as withholding
bonuses, to get subordinates to follow instruc0ons. Based on this, the leadership is not very
effec0ve as employees seek to stay out of trouble rather than genuinely wishing to perform
well or please the leader.

Reward: Employees are influenced by a leader who wields this kind of authority by providing
incen0ves like bonuses, promo0ons, exci0ng project assignments, etc. This kind of

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leadership has its limita0ons since the leader can simply run out of incen0ves or the
company's budget might prevent them from providing addi0onal incen0ves. Moreover,
some employees may not be mo0vated by the rewards offered by the leader.

LegiAmate: In this situa0on, the corpora0on grants leaders power and sway through official
0tles like CEO, senior manager, etc. However, this power is unstable as it can be taken away
at any 0me.

E. TransformaAonal theory
According to this theory employees begin trus0ng and respec0ng leaders based on how
effec0vely they fulfill their role and du0es.
Transforma0onal leaders:
• Set clear goals
• Have influenced supported by their charisma
• Mo0vate employees to challenge themselves
• Encourage others to work in the best interest of the organiza0on
• Are models of integrity and fairness

III. Goleman’s four EI competencies

According to Goleman, emotional intelligence is ‘the capacity to recognize our own feelings
and those of others, for mo0va0ng others and for managing emo0ons well in ourselves and
rela0onships’.
According to research, a leader or employee needs to have EQ in addi0on to a high IQ in
order to perform effec0vely. This is because having a high EQ is necessary for effec0ve
leadership and working well with others.

Goleman’s model of EI competencies is based on research which indicated correla0on

between the presence of these competencies in leaders and high employee performance in
the workplace.

Self awareness:
• Self-awareness on own emo0ons
• Self reflec0on on ac0ons
• Self-confidence

Social awareness:
• Offering empathy to employees
• Organiza0onal awareness
• Effec0vely recognising and mee0ng others' needs

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Self management:
• Control over own emo0ons
• Op0mism and transparency
• Ability to take ini0a0ve
• Flexibility

Social skills:
• Good conflict resolu0on skills
• Ability to inspire and mo0vate
• Ability to work with and manage teams

A leader must be able to inspire and mo0vate people, build posi0ve rapport, and mediate
disputes among subordinates. Addi0onally, they need to influence how other employees
behave and communicate effec0vely. A leader's responsibility is to inspire workers to carry
out their tasks well. A manager must be able to grow people and operate as part of a team.
(as part of delega0on), be able to ini0ate change and also be able to manage conflict. To
carry out these roles successfully, leaders and managers have to possess emo0onal
competencies.
According to research, excellent managers and leaders have a variety of emo0onal skills,
both social and personal. According to some, these skills are a key determinant of how well
managers and leaders func0on.. Emo0onal intelligence is a skill that can be acquired and
may grow with 0me. As a result, developing all of an organiza0on's human resources can
benefit greatly from training in this area.
Thus, emo0onal intelligence is increasingly relevant to the development of organisa0ons and
employees, because the EQ principles provide a new way to understand and assess people’s
behaviour, leadership styles, aAtudes, interpersonal skills and, most importantly, their
poten0al performance.

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