Page 283 - Introduction to Business

CHAPTER 7 Motivating and Leading Employees 257

enhances leadership success, and the growth and development of followers as contingency theories of leadership
they feel a sense of inclusion. The key disadvantage of this type of leadership is Theories that assert that leadership
effectiveness is maximized when
it can be quite time-consuming. leaders make their behavior dependent
on the characteristics of their followers
• Fiedler’s contingency model states that while leaders may be willing to adjust and the business environment (p. 256)
their behaviors toward individual subordinates, leaders themselves may have
some strong behavioral tendencies. Some leaders may be supportive and
20
relationship-oriented toward subordinates, while others may be task-oriented
to meet corporate goals. Fiedler’s model recognizes this fact and specifies
situations where certain leaders, on the basis of their behaviors, may be more
effective than others.

• The path-goal theory focuses on how effective leaders motivate their followers
21
to achieve corporate goals. In the path-goal theory, an effective leader’s
actions strengthen followers’ beliefs that if they exert a certain level of effort,
they will most likely accomplish a task and this will lead to receiving a reward.
An effective leader will ensure that followers will receive certain rewards (the
“goal”) if they follow the best way (the “path”) to get there.

Chaos Theory
Chaos theory is based on the assumption that organizations are multifaceted and chaos theory The theory based on the
complex and they operate in a disorderly environment. An external event, 9/11 for assumption that organizations are
multifaceted and complex and operate
example, could shock a stable business environment lead to chaos in the short
in a disorderly business environment
term, which could have an impact on the organization. This is especially true if an
organization has several functions (accounting, finance, information technology,
management, and marketing) and operates in several regions of the country or the
world. Leaders in this chaotic world are called on to manage their organizations
with governing principles that emphasize vision, values, and organizational
22
beliefs. When crises occur, effective leadership is exercised by enforcing agreed-
on corporate governing principles, that lead to acceptable solutions.
The challenge faced in all the theories is how to put leadership together in an
organization to effectively and ethically attain the firm’s vision, values, and goals. This
may require movement away from single executive-level leadership to a multi-lead-
ership focus, that is based on various organizational functions, purposes, and levels.
reality What leadership theory do you think fits best with the current business
CH ECK environment?

The Practice of Leadership

LEARNING OBJECTIVE 10
Identify how leadership impacts corporate success, and critically discuss
the various leadership styles used today.

Almost as interesting as the leaders that predominate in the FT/PwC rankings are
the reasons their fellow chief executives gave for nominating them. There is no sin-
gle leadership style that dominates the ranking. The chief executives that made it
into the top 25 (see Exhibit 7.8 on p. 258) are all very different.
Indeed, these leaders are admired precisely because of their adaptive capacity
to the individual circumstances of their companies, their industries, and the global
leadership style The behavior that top
economy. Leadership style is the behavior that managers exhibit when dealing managers exhibit when dealing with
with their employees and professional staff. Style must be accompanied with sub- their employees and professional staff

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