LEADERSHIP (II)

Prof.dr.dr.dr.h.c. Constantin Bratianu

Faculty of Business Administration

Academy of Economic Studies

Learning objectives

To understand the similarities and differences between management and leadership

To understand the multiple meanings of leadership

To distinguish between different types of leaders

To search further for leader qualities

Management & Leadership(Similarities)

Management and Leadership entail working with people

Management and Leadership create organizational and functional structures

Management and Leadership involve influence

Management and Leadership are concerned with goal accomplishment

Management and Leadership are concerned with resource allocation

Management & Leadership(Differences)

Management produces order and consistency, reducing the organizational entropy

Management is concerned with attaining a stationary and inertial organizational equilibrium

Leadership produces change and movement, increasing the organizational entropy

Leadership is concerned with attaining a dynamic organizational equilibrium

Management & Leadership(Differences)

Management

Planning and budgeting

Thinking for present

Establish agendas

Set timetables

Allocate resources

Leadership

Establishing direction

Thinking for future

Create a vision

Clarify big picture

Set strategies

Management & Leadership(Differences)

Management

Organizing

Provide structure

Make job placements

Establish rules and procedures

Leadership

Aligning People

Communicate goals

Seek commitment

Build teams and coalitions

Management & Leadership(Differences)

Management

Problem solving and Controlling

Develop incentives

Generate solutions

Controlling and taking corrective actions

Leadership

Motivating and Inspiring

Inspire and energize

Empower subordinates

Satisfy employees needs

Transactional Leaders& Transformational Leaders

Transactional leaders

Leaders who guide or motivate their followers toward established goals by clarifying role and task requirements. They promote mostly incremental or evolutionary change.

Transformational leaders

Leaders who inspire followers to transcend their own self-interest for the good of the organization and are capable of having a profound and extraordinary effect on followers. They promote radical or revolutionary change.

Transformational Leadership

Transformational leadership is built on transactional leadership.

Transformational leadership produces levels of employee effort and performance that go beyond what would occur with a transactional approach alone.

The evidence is supporting the superiority oftransformational leadership over the transactional leadership.

Charismatic & Visionary Leadership

Charismatic leadership – Leaders able to influence their followers with their charisma

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

Visionary leadership – The ability to create and articulate a realistic, credible, attractive vision of the future

Followers share the vision of the leader

Transformational Leader

Mohandas Karamchad Gandhi (1869-1948)

“Mahatma” – Great Soul

“Satyagraha” Non-violent

Civil disobedience

Gandhi led India to independence

(1915-1947)

Transformational Leader

Louis V. Gerstner Jr.

CEO IBM (1993-2002)

He transformed the old IBM almost on the edge of collapse into a new successful IBM due to his visionary leadership

Transformational Leader

Bill Gates

Founder with Paul Allen of Microsoft in summer 1975 to develop software for IBM PC

Transformational Leader

Steve Jobs

Founder with Steve Wozniak of Apple Computer

His transformational leadership developed when he returned as CEO to Apple (1997)

Transformational leadership factors

Factor 1 – Idealized influence. Charisma

Factor 2 – Inspirational motivation

Factor 3 – Intellectual stimulation

Factor 4 – Individualized consideration

Factor 1Idealized influence. Charisma

Leaders act as strong role models. Followers identify with these leaders and want very much to emulate them.

These leaders usually have very high standards of moral and ethical conduct

They are deeply respected by followers, who usually place a great deal of trust in them

They provide followers with a vision and a sense of mission

Factor 2Inspirational motivation

These leaders communicate high expectations to followers, inspiring them through motivation to share the vision of organization

In practice, these leaders use symbols and emotional knowledge to focus group members’ effort to achieve more than they would in their own self-interest

Team spirit is enhanced by this type of leadership

Factor 3Intellectual stimulation

Leaders stimulate followers to be creative and innovative

Leaders stimulate followers to challenge their own beliefs and values as well as those of the leader and the organization

Leaders supports followers who try new approaches and develop innovative ways of dealing with organizational issues

Factor 4Individualized consideration

Leaders provide a supportive climate in which they listen carefully to the individual needs of followers

Leaders act as coaches and advisers while trying to assist followers

Leaders may use delegation to help followers grow through personal challenges

Transformational leadershipIdealized influence

Inspirational motivationIntellectual stimulation

Individualized consideration

Transactional leadership

Expected outcomes

Performance beyond expectations

Transformational leadership impact