5-1

Chapter 5
Organizational Factors
Leadership Styles, power bases and Structure

5-2

Role of Leadership
Leadership is the ability or authority to guide and direct others toward achievement of a goal. Important leaders
CEOs and top management Boards of Directors

5-3

The Role of Leadership in Corporate Culture

Leadership is the ability or authority to guide and direct others toward achievement of a goal.
Leaders are key to influencing an organizations corporate culture and ethical posture. Leadership styles influence many aspects of organizational behavior, including employees acceptance of and adherence to organizational norms and values.

5-4

Leadership Styles
Coercive leaders Visionary leaders Affiliative leaders Democratic leaders Pacesetting leaders Coaching leaders

5-5

Leadership styles by Daniel Goleman

Coercive
The leader's Characteristic

Visionary
Mobilizes people towards a vision

Affiliative
- Creates harmony and builds emotional bonds - Creates harmony by connecting people to each other People come first

- Demands immediate compliance - threatening, tight control, drives away talent

The style in a phrase:

Do what I tell you

come with me

When the style works best:

In a crisis, to kick start a turnaround, or with problem employees Soothes fear by giving direction in emergency
Negative

When changes require a new vision or a clear direction is needed

To heal rifts in a team or to motivate people during stressful circumstances

Overall impact on climate:

Most strongly positive

positive

5-6

Democratic
The leader's modus operandi:

Pacesetting

Coaching

-Forges consensus through

participation -Superb listener, team leader -Values input and gets commitment through participation
What do you think? To build buy-in or consensus, or to get input from valuable employees Positive

Develops people for the -Sets high standard of future performance -helping people find -builds challenge and exciting strengths and goals for people weaknesses -low on guidance, expecting -good at delegating people to know what to challenging do. assignments, Do as I do, now To get quick results from a highly motivated and Try this To help employee improve performance or develop

The style in a phrase: When the style works best:

competent team
Negative

long-term strengths
Positive

Overall impact on climate:

5-7

Leadership
The most successful leaders do not rely on one style of leadership but alternate their technique based on the characteristics of the situation.

5-8

Power bases
Power-ability to influence the behavior/attitude of another Exerting power is one way to influence ethical decision making framework Power in itself is neither ethical or unethical, its use can raise ethical issues

5-9

Coercive

Use of threats/actual punishment to influence others Penalize actions Beneficial in changing behavior in short run Overuse may result in de-motivation, breakdown of relationships, resistance Influence behavior by offering something desirable E.g. money, promotion, non monetary rewards Rigid reliance on rewards may force employees to indulge in unethical practices

Reward

5-10

Legitimate
Right to exercise authority Position related Strong affiliation to legitimate power may lead to employees unethical behavior

Expert
Derived from having high level of knowledge, specialized skill Power may be accorded on basis of greater knowledge, years of experience, education, honours received Creates ethical problems when knowledge is used to manipulate others

5-11

Referent
Function of respect and esteem accorded to an individual by virtue of personal attributes with which others identify Can be used to create an atmosphere which motivates workers and improves productivity effective: when empathy and trust exist between boss and employee

5-12

Centralized Structure
- If organization is very bureaucratic, employees behave according to letter of law rather than spirit - Ethical concerns arise due to little upward communication. Top managers are seldom aware of problems and unethical activity. E.g. sweatshops - Blame shifting or scapegoating because due to high specialization there is a lack of connectedness due to which employees fail to understand affect of actions on the overall organization

5-13

Due to strict formalization and adherence to rules they tend to be more ethical in their practices Can exert more influence on employees due to policies and codes of ethical conduct

5-14

Decentralized
-Different value systems may evolve in different sub units -Difficulty in responding quickly to changes in policy and procedure made by top management +Can avoid ethical dilemma by tailoring their decisions to specific situations, laws and values of a particular community