1.

THE IMPACT OF LEADERSHIP ON ORGANIZATIONAL PERFORMANCE

There are following two opinions about the leadership:
A. Leadership Makes difference.
B. Leadership does not make a difference.
A. Leadership Makes difference.

Research from Michael Maccoby.

Southwest Airlines
Studies of senior managers
Attribution theory the process of attributing causality to events

B. Leadership does not make a difference.

The anti-leadership argument holds that the impact of the leader on
organizational outcomes is smaller than the impact of forces within the
situation.
The three major arguments against the importance of leadership are:
I.
II.
III.

Substitutes for leadership

Leadership irrelevance
Complexity theory.

I.

Substitutes for leadership

Exam Q: Discuss any three substitutes for leadership? Give examples.
According to this viewpoint, many organizations have substitutes for
leadership.
Such substitutes are factors in work environment that provide guidance
and incentives to perform, making the leaders role almost superfluous
(unessential, unnecessary). These substitutes are:
a)
b)
c)
d)

Professional Norms
Closely Knit Team
Intrinsic Satisfaction
Computer Technology

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a) Professional Norms
Workers who have strong professional norms require a minimum of
supervision and leadership.
For Example: A group of certified professional accountants may not need
visionary leadership to inspire them to do an honest job of auditing the
books of a client or advising against tax fraud.
b) Closely Knit Team
Closely knit teams of highly trained individuals.
For Example: When members of a cohesive (unified or consistent), highly
trained group are focused on a goals then they may not require leadership
to accomplish their task.
c) Intrinsic Satisfaction
Workers who are strongly self-motivated or intrinsically satisfied require a
minimum of leadership.
For Example: The task itself grabs the workers attention and energy. The
worker may require little leadership as long as the task is proceeding
smoothly.
d) Computer Technology
Organizations today use computer-aided monitoring and computer
networking to take over many of the supervisors leadership functions.
For Example: The computer provides productivity and quality data, and
directions for certain tasks are entered into the information system.

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II.

Leadership irrelevance
Factors outside the leaders control have a larger impact on business than
do leadership actions
Leaders have unilateral control over a only a few resources
Firms choose leaders whose values are compatible with those of the firm so
the activities are constrained.

III.

Complexity theory.
Complexity theory holds that organizations are complex systems that
cannot be explained by the usual rules of nature.
Leaders and managers can do little to change the course of the system
Managers cannot predict which business strategies or product mixes will
survive
Managers can only scramble or innovate in order to adapt to outside forces

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