managing business relationships leadership

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Managing Business Relationships

Leadership

Dr. Vesselin Blagoev

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Managerial Roles & Activities

Informational- monitoring (scanning for) information, disseminating and acting as spokesperson.

Decisional…. allocating resources (ie budgets and schedules), handling disturbances (pressures and crises) and negotiating.

Interpersonal…leader, liaison and figurehead

In the last category we have the relationship dimension.

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Management

and

Leadership

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Leadership

“ A vital and, some argue, increasingly dominant, aspect of organisation is the role of management and leadership. Research and academic and practitioner interest in management and leadership has (sic) blossomed during the latter part of the twentieth century. As interest in and concern about organisational change has grown, the role of leadership has been emphasised”. Brooks 2003 p.146.

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T.J.Watson 2002 p.3 ( reproducing a conversation between Watson and a ‘real life’ manager):

“So the problem is..”? “It’s the people management thing. It’s

handling the people who work for me. They are a constant headache. I’ve tried to read the books and I’ve been on people management courses. I didn’t miss one of the OB classes on my MBA course. But I still despair at the difficulty I have with managing people in my function”…….

“Why is this do you think”? “Perhaps it’s because they are marketing

people. We often say that managing marketing people is like herding cats. Can you imagine trying to herd cats? It’s a powerful image isn’t it”?

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Does leadership matter? Impact of ex- New York mayor Giuliani after the

events of September 11th 2001.

“In the weeks that followed, Giuliani provided the leadership that the public so craved. Day after day, his mastery of the details of rescue and recovery plus his calm explanations of awful news helped to reassure a traumatised city that the crisis was under control. He found just the right balance between being a hardnosed administrator and a caring and emotional leader”. MBR (2004) p.72.

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Leadership

The ability to influence a group toward the achievement of goals

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“Leaders…aim to influence and guide others into pursuing particular objectives or visions of the future and to stimulate them into wanting to follow” Brooks 2003 p.150.

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Management and Leadership

Management is about the efficiency

Leadership is about inspiration

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Theories about Leadership

Trait theoriesBehavioral theoriesContingency theories

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Leadership

Trait theories

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LeadershipTrait theories

Theories that consider personal qualities and characteristics that differentiate leaders from non-leaders

The leaders are born Often described as charismatic,

enthusiastic and courageous

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Research in the 60s - over 80 traits

5 are considered The Big Five

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Trait theoriesThe Big Five

Extroverted – enjoy being with people, full of energy, positive emotions, able to assert themselves

Agreeable – cooperation and social harmony, value the others

Conscientiousness – disciplined, keep commitments they make

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Trait theoriesThe Big Five

Emotional Intelligence (or inversely Emotional Stability) – tendency to manage/experience negative feelings: anxiety, anger, depression, emotionally reactive

Openness to Experience – intellectually curious, creative and flexible

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Six traits on which leaders tend to differ from non-leaders:

Ambition and energy Desire to lead Honesty and integrity Self-confidence Emotional Intelligence Job-relevant knowledge

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Trait approach….personal qualities or characteristics ….self-evidently a factor to some extent but : “the search for what leaders had in common only managed to establish the range of variation possible in leaders, from the short balding French Emperor to the handsome gay Macedonian one”. P. Thompson & D. McHugh 2002 p.267.

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Leadership

Behavioral theories

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LeadershipBehavioral theories

Specific behaviors differentiate leaders from non-leaders.

If there are such behaviors we can teach leaders

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Ohio State Studies University of Michigan

Studies The Managerial Grid Scandinavian Studies

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Ohio State Studies (late 40s) Initiating structure – define and

structure his/her role, behavior that attempts to organize the work, goals, work relationships to achieve these goals

Consideration – the extent to which the person is willing to base the relationships on mutual trust, respect for employees’ ideas, regard for their feelings

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University of Michigan Studies Employee-oriented leader –

Emphasizing interpersonal relations; taking a personal interest in the needs of employees and accepting individual differences among members

Production-oriented – Emphasizing technical or task aspects of the job

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Blake & Mouton (1964) Managerial Grid – A 9x9 matrix

outlining 81 different leadership styles. Concern for people (1.1-1.9; laissez-faire/easy going) and Concern for production (9.1-9.9; 9.1 is authoritarian type)

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Scandinavian Studies (40-60s) Development-oriented leader – One who values experimentation, seeks new ideas, and generates and implements change

In the changing world effective leaders would use/show development-oriented behavior

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Leadership

Contingency theories

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Leadership Contingency theories

Fiedler Contingency Model: Favorability of leadership situation

Hersey & Blanchard’s Situational Theory (Maturity of followers)

Vroom & Yetton: Leader-Participation (Quality and acceptance of leader’s decisions)

House and Dressler: Path-goal theory Leader-Member Exchange Theory

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Fiedler contingency model : Effective groups depend on a proper match between a leader’s style of interacting with subordinates and the degree to which the situation gives control and influence to the leader.

Identifying leadership style : LPC questionnaire -> Least Preferred Coworker, 16 contrasting adjectives: pleasant-unpleasant, efficient-inefficient. If you describe your LPC with favorable terms - you are “relationship-oriented”. Otherwise – “task-oriented”

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LPC – Least preferred co-worker questionnaire/scale : Rating given by leaders about the person with whom they could work least well

Up to 20 questions: pleasant/unpleasant, friendly/unfriendly; helpful/frustrating, distant/close, co-operative/non-…, open/guarded, boring/interestingThe LPC score is the sum of all marks

Pleasant Unpleasant

8 7 6 5 4 3 2 1


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Interpretation: the leader with a high LPC score derives most satisfaction from interpersonal relationships and if needed he/she is motivated to act in a supportive, considerate manner

The leader with low LPC score derives most satisfaction from a performance of a task and achieving objectives

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Favorability of the leadership situation (Fiedler) – 3 major variables which determine the favorability of the situation and which affect the leader’s role and influence


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Defining the situation : Leader-member relations: The

degree of confidence, trust and respect members have in their leader and their willingness to follow him

Task structure: degree to which the task is clearly defined, assignments are procedurised

Position power: degree of influence for hiring, firing, promotions, salary increase

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Fiedler constructs 8 combinations of group-task situations from these 3 variables:

When the situation is : Very favourable (good L-member relations,

structured task, strong position power) or Very unfavourable (poor L-member

relations, unstructured task, weak position power)

Then a task-oriented leader (low LPC score) with a directive, controlling style will be more effective

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When the situation is : moderately favourable and the

variables are mixed Then a leader with an interpersonal

relationship orientation (high LPC score) with a participative approach will be more effective

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Leadership Contingency theories Cognitive Resource

Fiedler & Garcia: Cognitive resource theory : states that stress unfavorably affects a situation and that intelligence (low pressure) and experience (high pressure) can lessen the influence of stress on the leader

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Situational Theory (SLT)Hersey & Blanchard Readiness–Ability and

Willingness of people to perform a specific task:

R1: Low follower Readiness – both unable and unwilling

R2: Low to moderate follower R – unable but willing, lack ability but motivated

R3: Moderate to high follower Readiness – able but unwilling, able but insecure

R4: Able and willing – ability + commitment

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S3 Share ideas & facilitate in making decisions

S2 Explain your decisions and provide opportunity for clarification

S4 Turn over responsibi-lity for decisions and imple-mentation

S1 Provide specific instructions and control

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Situational Theory (SLT)

Task and Relationship behaviour 4 leadership styles:

S1: Telling – high amount of guidance but limited supportive behavior – best for R1

S2: Selling – high amount of guidance and supportive behavior – best for R2

S3: Participating – low amount of guidance but extensive supportive behavior – best for R3

S4: Delegating – little amount of guidance and supportive behavior – best for R4

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S3 Share ideas & facilitate in making decisions

S2 Explain your decisions and provide opportunity for clarification

S4 Turn over responsibi-lity for decisions and imple-mentation

S1 Provide specific instructions and control

High task Lo rel

Hi task Hi rel

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Low relat

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Leadership Contingency theories LMX Theory

Leader-Member Exchange Theory: Leaders create in-groups and out-groups. Subordinates with in-group status will have higher performance ratings, less turnover, and greater job satisfaction

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Path-Goal Theory Path-goal theory (House,

Dessler): it is the leaders job to assist followers in attaining their goals and to provide the necessary direction and/or support to ensure that their goals are compatible with the overall objectives of the group or organization

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Path-Goal TheoryHouse 4 types of leadership behaviour: Directive Supportive Participative – consulting with subordinates,

evaluation of their opinion before decisions Achievement-oriented – setting

challenging goals for the subordinates, asking for improvements in their performance, etc

The leader can practice different behaviors depending on the task and situation

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Path-Goal Theory

Leader-ship beha-viourDirective

Supportive

Participa-tive

Achieve-ment-oriented

Personal characteristics of subordinates (how they react to Mgr’s behavior)

Nature of the task (routine and structured or non-r and unstructured)

Subordinates’ perceptions and motivation

Goal clarity: improved job performance and satisfaction

Path-goal theory

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Leader-Participation Model Vroom & Yetton Leader-participation

Model: 2 aspects of the leaders decision: Decision quality, or rationality, is the

effect that the decision has on group performance

Decision acceptance refers to the motivation and commitment of group members in implementing the decision

The 3rd consideration is the amount of time required to make the decision

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Leader-Participation Model Vroom & Yetton: 5 main mgmt decision

styles: Autocratic

A.1: Leader solves/makes decisions alone A.2: Leader gets information from subordinates but

makes the decisions alone Consultative

C.1: problem is shared individually with relevant subordinates. Then L makes the decision

C.2: problem is shared with subordinates as a group, then L makes the decision

Group – the problem is shared with sub as a group. L acts as Chair, not as advocate. All make the decision

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Leader-Participation Model Vroom & Jago contingency model: 12

contingency variables leading to 5 styles: Quality requirements Commitment requirements Leader information Problem structure and time constraints Commitment probability Goal congruence and geographical

dispersion Subordinate conflict and information Motivation time and development

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Task and Relationship behaviour: Task behavior – the extent to which the

leader provides directions for the actions of the subordinates, sets goals for them, defines their roles and how to perform

Relationship behavior is the extent to which L engages in two-way communication with subordinates, listens to them and provides support and encouragement

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Leaders as

Shapers of Meaning

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Leaders as Shapers of Meaning

The leaders frame the future in a way which is understandable and acceptable by the others

Framing is a way to use the language to manage meaning

Framing has a double meaning: framing = targeting (what to see) framing = positioning (how to see

it)

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Charismatic leadership : Followers make attributions of heroic or extraordinary leadership abilities when they observe certain behaviors

The charismatic leaders have 5 important characteristics: vision and articulation, personal risk, environmental sensitivity, sensitivity to follower needs, unconventional behavior

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Visions and articulation: The leader has a vision – expressed as an idealized goal – that proposes a future better than the status quo. It is able to clarify the importance of the vision in terms that are understandable to others

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Personal risk: The leader is willing to take on high personal risk, incur high costs, and engage in self-sacrifice to achieve the vision

Environmental sensitivity: Able to make realistic assessments of the environmental constraints and resources needed to bring about change

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Sensitivity to follower needs:

The leaders are perceptive of others’ abilities and responsive to their needs and feelings

Unconventional behavior: Engages in behaviors that are perceived as novel and counter to norms


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When Charisma is a Liability : Charisma appears to be most appropriate when the follower’s task has an ideological component or when the environment involves a high degree of stress and uncertainty. The charismatic leaders are mostly in politics, religion, wartime, or crisis in the business.

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Transactional and Transformational Leadership

Transactional leaders: who guide or motivate their followers in the direction of established goals by clarifying role and task requirements

Transformational leaders: who inspire followers to transcend their own self-interests and who are capable of having a profound and extraordinary effect on followers

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Transformational leadership is built up on the top of transactional leadership. The transactional leader may want followers to adopt the charismatic’s world view and go no further, while the transformational leader will want them to question the established view + even his own ideas

Leaders as Shapers of Meaning – Transformational

Leadership

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Leaders as Shapers of Meaning – Transformational

Leadership

Characteristics of the Transactional leader : Contingent Reward: Promotes exchange of

rewards for efforts, promises rewards for good performance, recognizes accomplishments

Management by Exceptions (active): Looks for deviations from rules, takes corrective actions

Management by Exceptions (passive): Intervenes only if standards are not met

Laissez-Faire: Avoids making decisions

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Characteristics of the Transformational leader :

Charisma: Provides vision and sense of mission, instills pride, gains respect and trust

Inspiration: Communicates high expectations, uses symbols to focus efforts, expresses important purposes in simple ways

Intellectual situation : Promotes intelligence, rationality, and careful problem solving

Individualized Consideration : Gives personal attention, treats each employee individually, couches, advises

Leaders as Shapers of Meaning –

Transformational Leadership

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Leaders as Shapers of Meaning – Visionary

Leadership

Visionary Leadership : the ability to create and articulate a realistic, credible, attractive vision of the future for an organization or organizational unit that grows out of and improves upon the present

Quality of a Vision: inspirational possibilities that are value centered, realizable, with superior imagery and articulation. Visions have to create inspirational and unique possibilities

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Leaders as Shapers of Meaning – Visionary

Leadership

Qualities of the Visionary Leader : Ability to explain the vision to others:

The vision has to be clear in terms of required actions

Ability to express the vision through the leader’s behavior

Ability to extend the vision to different leadership contexts : The vision has to be clear in every office of the company – marketing or other, Sofia and Portsmouth

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Emotional Intelligence and Leadership Effectiveness Emotional Intelligence (EI) is a

better predictor who’ll become a leader than IQ expertise or any other single factor

EI has 5 components : Self-awareness Self-management Self-motivation Empathy Social skills

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Emotional Intelligence and Leadership

Effectiveness Self-awareness : Exhibited by self-

confidence, realistic self-assessment, and self-deprecating sense of humor

Self-management : Exhibited by trustworthiness and integrity, comfort with ambiguity, and openness to change

Self-motivation : Strong drive to achieve, optimism, and high organizational commitment

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Emotional Intelligence and Leadership

Effectiveness

Empathy : Exhibited by expertise in building and retaining talent, cross-cultural sensitivity, and service to clients and customers

Social skills : Exhibited by ability to lead change, persuasiveness, and expertise in building and leading teams

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Contemporary Leadership Roles

The leaders are: Liaisons with external

constituencies, i.e. upper management, other leaders, suppliers, customers

Troubleshooters. Set meetings to solve the problems

Conflict managers – they help to process the conflicts

Coaches for the team members

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Contemporary Leadership Roles

Mentoring

Mentor is a senior employee who sponsors and supports a less experienced employee

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Attribution Theory of Leadership

Leadership is merely an attribution that people make about other individuals Example: George H. Bush lost the second term elections after saying “Read my lips. No new taxes.”

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Moral Leadership

The means used by the leaders – paying to the participants in riots – good or bad ?

Using leader’s charisma to benefit from follower’s full support – religious fights

Leadership is not value free

managing business relationships leadership

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