Page 282 - Introduction to Business

256 PART 2 Managing Business Behavior

performance. The leader-follower relationship in transactional leadership is strictly
“arms-length,” and there is no mutual binding between the two to pursue and
attain higher corporate goals. Transformational leadership goes a step further. It transformational leadership The leader
occurs when a leader is able to gain the trust of and inspire followers to work jointly, gaining the trust of and inspiring
followers to work jointly to achieve the
setting aside their self-interest, to achieve the leader’s vision for the organization leader’s vision for the organization and
and to benefit the individual members of the organization. 15 to benefit the members of the
organization

Charismatic Leadership

Charismatic leaders are energetic transformational leaders who are often con- charismatic leaders Energetic
sidered heroes by the organization in their pursuit of a rosy vision for the future. transformational leaders who are often
considered heroes by the organization
Charismatic leaders are highly capable people who can change relatively weak
in their pursuit of a rosy vision for the
organizations into powerful and successful enterprises. Rose Marie Bravo is an future
excellent example of a charismatic leader who was responsible for the success-
ful turnaround of the ailing British retailer Burberry Group PLC. Howell and
Avolio believe that charismatic leaders achieve heroic feats in organizations by Ranked as the ninth most
“powerfully communicating a compelling vision of the future, passionately respected corporate leader in the
believing in their vision, relentlessly promoting their beliefs with boundless world (2003), Hewlett-Packard
energy, pounding creative ideas, and expressing confidence in followers’ abili- Compac CEO Carly Fiorina has
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ties to achieve high standards.” However, a cautious distinction must be made exhibited charismatic leadership by
communicating a compelling vision
between ethical and unethical charismatic leadership when searching for
of the future and successfully
leaders who can turn around ailing companies or bureaucracies or start new turning around the ailing
corporations. Hewlett-Packard and Compaq
through a merger.
Contigency Theories of Leadership

While there are several different contingency theories of
leadership, all of them assert that leadership effectiveness is
maximized when leaders make their behavior dependent on
the characteristics of followers and the situation they are
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in. It is a well-known fact that leaders do not interact with
all followers the same way. Leaders try to interact with differ-
ent followers in unique ways so as to optimize the interac-
tion process and achieve organizational goals. The aim is to
bring out the behavioral response of all followers that would
maximize leadership success. Four major contingency theo-
ries of leadership are briefly discussed here. These four the-
ories emphasize the fact that in order to be effective, leaders
must make their behavior contingent on certain traits of
their followers or the situation.
• The situational leadership model shows that some
combinations of task (telling followers what to do, when
to do it, how to do it, and who is to do it) and
relationship (listening, encouraging, facilitating,
clarifying, and providing emotional support) behaviors
are more effective in certain situations than in others. 18

• The Vroom and Yetton model describes the many ways
that leaders can make effective decisions by
incorporating the selective participation of subordinates
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in the decision-making process. Allowing subordinates
to participate in the decision-making process

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