Managing Business Relationships Leadership

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Managing Business RelationshipsLeadership

• 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.
• Interpersonalleader, 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..?
• Its the people management thing. Its
  handling the people who work for me. They are a
  constant headache. Ive tried to read the books
  and Ive been on people management courses. I
  didnt 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 its because they are marketing people.
  We often say that managing marketing people is
  like herding cats. Can you imagine trying to herd
  cats? Its a powerful image isnt 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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• Leadersaim 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 theories
• Behavioral theories
• Contingency 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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LeadershipTrait theories

• 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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LeadershipTrait theories

• 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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LeadershipBehavioral theories

• Ohio State Studies
• University of Michigan Studies
• The Managerial Grid
• Scandinavian Studies

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LeadershipBehavioral theories

• 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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LeadershipBehavioral theories

• 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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LeadershipBehavioral theories

• 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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LeadershipBehavioral theories

• 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 Blanchards Situational Theory (Maturity
  of followers)
• Vroom Yetton Leader-Participation (Quality and
  acceptance of leaders decisions)
• House and Dressler Path-goal theory
• Leader-Member Exchange Theory

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Leadership Contingency theories

• Fiedler contingency model Effective groups
  depend on a proper match between a leaders style
  of interacting with subordinates and the degree
  to which the situation gives control and
  influence to the leader.
• Identifying leadership style LPC questionnaire
  -gt Least Preferred Coworker, 16 contrasting
  adjectives pleasant-unpleasant,
  efficient-inefficient. If you describe your LPC
  with favorable terms - you are relationship-orien
  ted. Otherwise task-oriented

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Leadership Contingency theories

• 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/interesting
• The LPC score is the sum of all marks ?
• Pleasant
  Unpleasant
• 8 7 6 5 4 3 2 1

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Leadership Contingency theories

• 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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Leadership Contingency theories

• Favorability of the leadership situation
  (Fiedler) 3 major variables which determine the
  favorability of the situation and which affect
  the leaders role and influence ?

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Leadership Contingency theories

• 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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Leadership Contingency theories

• 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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Leadership Contingency theories

• 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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Leadership Contingency theoriesSituational
Theory (SLT)

• Hersey Blanchard? ReadinessAbility 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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Leader behavior
High relat
S3 Share ideas facilitate in making decisions
S2 Explain your decisions and provide opportunity
for clarification
Selling
Participating
Hi task Hi rel
Hi task Lo rel
High task Lo rel
Lo task Lo rel
Relationship (supportive) behavior
Telling
S4 Turn over responsibi-lity for decisions and
imple-mentation
Delegating
S1 Provide specific instructions and control
Low relat
Low task
High task Task
behavior
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Leadership Contingency theoriesSituational
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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Leader behavior
High relat
S3 Share ideas facilitate in making decisions
S2 Explain your decisions and provide opportunity
for clarification
Selling
Participating
Hi task Hi rel
Hi task Lo rel
High task Lo rel
Lo task Lo rel
Relationship (supportive) behavior
Telling
S4 Turn over responsibi-lity for decisions and
imple-mentation
Delegating
S1 Provide specific instructions and control
Low relat
Low task
High task Task
behavior
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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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Leadership Contingency theoriesPath-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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Leadership Contingency theoriesPath-Goal Theory

• House ? 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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Leadership Contingency theoriesPath-Goal Theory
Path-goal theory
Leader-ship beha-viour Directive Supportive Partic
ipa-tive Achieve-ment-oriented
Personal characteristics of subordinates (how
they react to Mgrs behavior)
Goal clarity improved job performance and
satisfaction
Subordinates perceptions and motivation
Nature of the task (routine and structured or
non-r and unstructured)
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Leadership Contingency theoriesLeader-Participati
on 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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Leadership Contingency theoriesLeader-Participati
on 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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Leadership Contingency theoriesLeader-Participati
on 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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Leadership Contingency theories

• 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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Leaders as Shapers of Meaning

• 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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Leaders as Shapers of Meaning

• 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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Leaders as Shapers of Meaning

• 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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Leaders as Shapers of Meaning

• 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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Leaders as Shapers of Meaning

• When Charisma is a Liability Charisma appears
  to be most appropriate when the followers 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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Leaders as Shapers of Meaning
Transformational Leadership

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

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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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Leaders as Shapers of Meaning
Transformational Leadership

• 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

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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
  leaders 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
  wholl 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 leaders charisma to benefit from
  followers full support religious fights
• Leadership is not value free