LECTURE OUTLINE AND LECTURE NOTES

THE WORLD OF WORK

Tony Gets Assigned to a Project (Text pages 144-145)

Tony has been complemented for his work so far as manager of Taco Barn. Of special note was Tony’s decision to ask Kevin to write a strategic plan for Taco Barn, which was considered very creative. Tony has now been asked to participate in a company-wide project to create a leadership development program. He will need Kevin to fill- in his absence. Tony is a bit nervous to leave his store and unsure of his ability to help determine the culture and future leadership of the company.

1. From what you know of Tony so far, how would you describe his leadership style? Refer to page 150 for some suggested classifications of different leadership styles.

Tony’s first managerial experience creating and implementing a staff schedule was done in an autocratic style, where the leader makes decisions for the group. However, when follow-up to this exercise was necessary, Tony used a democratic style of leadership, where the manager guides and encourages a group decision. This illustrates a key concept: the best way to lead today is using situational leadership, recognizing that effective leadership must draw upon a range of skills and techniques that depend on the individual situation and not the prescribed leadership model.

2. How would you describe the organizational culture of Taco Barn?

Taco Barn hires individuals who have the ability to organize and lead in a store setting where there is a participatory management style based on a small, working environment. In keeping with this environment of operation, Taco Barn looks to hire and create a culture of managers/employees that fits into its system. This culture requires hiring, retaining, and promoting people who are similar to current employees in important ways. A person’s ability to fit in can be important to the process.

3. Do you think the consultants’ recommendation of an employee survey is a good idea? Why or why not?

Yes, but with some reservations. If the company is surveying employees and learning more about their leadership styles with the intent to use this information, the time and resources to accomplish this would be worthwhile. However, if the survey process becomes more of a distraction and less productive in nature, the company would be wasting valuable employee time. For the survey to be successful and useful, a written report needs to be created, outlining the findings and including a clear message about the purpose and use of the survey.

4. List six questions that you think should be included in the survey.

(1) Define a leader.(2) Give examples of good leadership skills.(3) Give examples of how you have been a leader in your job.(4) Describe the leadership style of your direct boss, regional boss and any corporate

leaders you have been in contact with.

(5) How would you describe each leader individually and the leadership style of the company collectively?

(6) What do you like about the leaders you work with or for? What would you change or add to the leadership of this organization?

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LECTURE OUTLINE LECTURE NOTES

I. POWER, AUTHORITY, AND LEADERSHIP

LEARNING OBJECTIVE 1Define leadership, power, and authority. (Text page 146)

A. POWER is the ability to influence, command, or apply force; a measure of a person’s potential to get others to do what he or she wants them to do, as well as to avoid being forced by others to do what he or she does not want to do.

1. Power can have both a positive and negative form.

a. Positive power results when the exchange is voluntary and both parties feel good about the exchange.

b. Negative power results when the individual is forced to change.

2. Power in organizations can be exercised upward, downward, or horizontally.

B. AUTHORITY is legitimate exercise of power, the right to issue directives and expend resources, related to power but narrower in scope.

1. Authority is a function of position in the hierarchy, flowing from the top to the bottom on the organization.

2. An individual can have power without having formal authority.

C. LEADERSHIP is the ability to influence people to willingly follow one’s guidance or adhere to one’s decisions.

1. A LEADER is one who obtains followers and influences them in

POWERPOINT 6-1Chapter Title (Refers to text page 144)

POWERPOINT 6-2Learning Objectives (Refers to text page 145)

POWERPOINT 6-3Power, Authority, and Leadership (Refers to text page 146)

TEXT FIGURE 6.1Sources of Power (Text page 146)

BONUS INTERNETEXERCISE 6-1The Most Powerful Women in BusinessEach year Fortune magazine lists the most powerful women in business. This exercise directs the students to research the list for the current year. See complete exercise on page 6.Error: Reference source not found of this manual.

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LECTURE OUTLINE LECTURE NOTES

II. LEADERSHIP AND MANAGEMENTLEARNING OBJECTIVE 2Discuss leadership as it related to management. (Text page 147)

A. Leadership and management are not necessarily the same.

B. Effective leadership creates a vision of the future.

C. Management is the process of planning, organizing, staffing, motivating, and controlling through the use of formal authority.

POWERPOINT 6-4Leadership and Management(Refers to text page 147)

LECTURE LINK 6-1Why Good Employees Can Be Bad ManagersGood technical employees can make good managers, of course, but many do not. See complete lecture link on page 6.Error: Reference source notfound of this manual.

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LECTURE OUTLINE LECTURE NOTES

III. LEADER ATTITUDESLEARNING OBJECTIVE 3Explain leadership attitudes. (Text page 147)

A. Douglas McGregor developed THEORY X and THEORY Y attitude profiles, or assumptions, about the basic nature of people.LEARNING OBJECTIVE 4Describe the differences between a Theory X and Theory Y manager. (Text pages 147-148)

1. A Theory X leader would likely use a much more authoritarian style of leadership than a Theory Y leader.

B. McGregor identified the SELF-FULFILLING PROPHECY, the relationship between a leader’s expectations and the resulting performance of subordinates.

1. If a manager’s expectations are high, productivity is likely to be high.

2. If a manager’s expectations are low, productivity is likely to be poor.

PROGRESS CHECK QUESTIONS (Text page 148)

1. Define the terms power, authority, and leadership.2. Explain the different expectations of Theory X and

Theory Y managers.3. Would you describe yourself as a Theory X or a

Theory Y manager? Why?4. Define the self-fulfilling prophecy of management.

TEXT FIGURE 6.2Assumptions About People(Text page 147)

POWERPOINT 6-5Douglas McGregor’s Leadership Theory(Refers to text page 147)

ETHICAL MANAGEMENT (Text page 149)

The construction foreman is behind schedule on a building project and has been told by the president of the company to hire a few illegal immigrants to get the job caught up and avoid missing a deadline with the client. What action should the foreman take?

Because of the client’s impatience, the next few weeks on the project will be difficult. Your boss thinks that hiring illegal immigrants could save time and money. However, this is a very unsatisfactory solution. There is a growing backlash against illegal immigration in this country. Hiring undocumented workers is illegal in some cities and states. By the time this manual is read, there may even be a federal law with penalties that cut deep. Remember, it’s not your boss that will be hiring workers, it is YOU.

LECTURE OUTLINE LECTURE NOTESYou are the one who will face the consequences, and there is no guarantee that the owner will stand behind you if difficulties arise.

Probably your next step should be to discuss the problem with the client to find other ways to “catch the project up” without suffering any penalties. A discussion with your attorney wouldn’t be a bad idea, either.

IV. FRAMEWORK FOR CLASSIFYING LEADERSHIP STUDIESA. Leadership studies can be classified by

focus. 1. Focus refers to whether leadership is

studied as a set of traits or a set of behaviors.

a. Traits refer to what characteristics the leader possesses.

b. Behaviors refer to what the leader does.

2. Approach refers to whether leadership is studied from a universal or contingent approach.

a. The universal approach assumes there is one best way to lead regardless of the circumstances.

b. The contingent approach assumes the best approach to leadership is contingent on the situation.

B. Trait Theory 1. The TRAIT THEORY stressed what

the leader was like rather than what the leader did.

2. Some traits do seem to stand out – dominance, intelligence, extroversion, and adjustment – but the differences are small.

POWERPOINT 6-6Framework for Classifying Leadership Studies(Refers to text page 148)

BONUS INTERNETEXERCISE 6-2Self-Assessment for Leading as a ManagerAn online self-assessment tool helps identify leadership strengths and weaknesses. See complete exercise on page 6.Error: Reference source not found of this manual.

TEXT FIGURE 6.3Framework for Classifying Leadership Studies (Text page 148)

POWERPOINT 6-7Trait Theory(Refers to text page 149)

CRITICAL THINKING EXERCISE 6-1Traits of LeadersWhat traits are common to

LECTURE OUTLINE LECTURE NOTES 3. At best, traits may influence the

capacity to lead. C. Basic Leadership Styles 1. Other studies have focused on the

basic leadership styles. a. The AUTOCRATIC LEADER

makes more decisions for the group.

b. The LAISSEZ-FAIRE LEADER allows people within the group to make all decisions.

c. The DEMOCRATIC LEADER guides and encourages the group to make decisions.

2. At first glance, the democratic style seems the most desirable, but the evidence is unclear.

D. Ohio State Studies 1. The studies at Ohio State University

were conducted to discover the behavior of successful leaders.

2. These studies used the LEADER BEHAVIOR DESCRIPTION QUESTIONNAIRE (LBDQ,) a questionnaire designed to determine what a successful leader does, regardless of the type of group being led.

3. Two leader behaviors appeared consistently.

a. CONSIDERATION refers to the leader behavior of showing concern for individual group members and satisfying their needs.

great leaders? See complete exercise on page 6.Error: Reference source not found of this manual.

CRITICAL THINKING EXERCISE 6-2Leadership SituationsDifferent situations call for different leadership styles. This exercise asks students to identify specific situations. See complete exercise on page 6.Error: Reference source not found of this manual.

TEXT FIGURE 6.4Relationship Between Styles of Leadership and Group Members (Text page 150)

POWERPOINT 6-8Ohio State Studies(Refers to text pages 150-151)

LECTURE OUTLINE LECTURE NOTES b. INITIATING STRUCTURE refers

to the leader behavior of structuring the work of group members and directing the group toward the achievement of the group’s goals.

E. University of Michigan Studies 1. The Institute for Social Research of

the University of Michigan conducted studies of group behavior at the Prudential Insurance Company in Newark, New Jersey.

2. They found that managers of high-producing work groups were more likely to:

a. receive general rather than close supervision from their superiors

b. like the amount of authority and responsibility they have in their job

c. spend more time in supervision d. give general rather than close

supervision to their employees e. be employee-oriented rather than

production-oriented 3. Supervisors of low-producing work

groups were production-oriented and gave close supervision.

4. The Institute director, Rensis Likert, developed four styles of leadership:

a. System 1: exploitative authoritative

b. System 2: benevolent authoritative

c. System 3: consultative

POWERPOINT 6-9University of Michigan Studies(Refers to text pages 151-153)

LECTURE OUTLINE LECTURE NOTES d. System 4: participative 5. He concluded that System 4 was the

most effective style of management.

CASE INCIDENT 6.1

Changes in the Plastics Division (Text page 152)

Rusty Means is the general manager of the plastics division of Warner Manufacturing Company and has had great success in running his department. Rusty has an autocratic management style and the employees have responded well to his task-orientated operating style. Rusty’s direct boss has just retired and the new replacement, Wallace Thomas, wants to make changes. Thomas wants to develop a planning committee and bring employees into the decision-making process. Rusty is not sure how he will adapt to these changes, especially with the success he enjoys under the former arrangement with his general manager.

1. What different styles of leadership are shown in this case?

Based on the comments, Ed Sullivan operated using a laissez-faire style in which he allowed people within the group to make all the decisions. He delegated decision-making power to Rusty Means. In turn, Rusty ran with an autocratic style of leadership where he made all the decisions for the group. Now, the newly hired general manager, Wallace Thomas, is trying to involve employees in the decision-making process using a democratic leadership style, which guides and encourages the group to make decisions.

2. What style of leadership do you think Wallace will have to use with Rusty?

The management style Rusty has been using (autocratic) is in conflict with the approach Wallace would like to initiate (more democratic). This creates a difference in styles. Wallace has to decide whether he wants to impose the new autocratic style of management on Rusty or allow him to continue using the approach he has previously used. This question is a good discussion starter: is there one best leadership approach? Why or why not?

3. Do you agree with Rusty? Why or why not?

Rusty has been successful using a task-orientated leadership approach. This style has been well accepted by the employees and the overall results have been positive. Rusty sees little value in changing his style of leadership. For these two individuals to operate successfully, Wallace might need to become more of a situational leader, analyzing what works in this situation. Wallace and Rusty will need to adjust their styles to some degree, analyzing the benefits and limitations of each method, and find some middle ground that allows them to work together for the good of the company and department.

4. If “products are produced on schedule and of such quality that few customers complain,” why should there be any changes?

If the department is working well using Rusty’s autocratic approach, maybe a “if it ain’t broke, don’t fix it” mindset would be best. However, an autocratic style may be preventing employees from developing or suggesting improvements. Instead of trying to force Rusty to make major changes right away, maybe Wallace should spend some time meeting with Rusty, touring the department, asking

LECTURE OUTLINE LECTURE NOTESquestions, getting feedback, etc. Both Rusty and Wallace need to communicate more effectively.

F. The Managerial Grid 1. Robert Blake and Jane Mouton

developed the MANAGERIAL GRID, a two-dimensional framework rating a leader on the basis of concern for people and concern for production.

2. The identified five basic styles of management:

a. authority-obedience (9,1 position) b. country club management (1,9

position) c. team management (9,9 position) d. impoverished management (1,1

position) e. organization man management

(5,5 position) 3. The Managerial Grid is intended to

help managers learn what their leadership style is and move toward a 9, 9 team management style.

G. Contingency Approach to Leadership 1. Research began to focus on the

CONTINGENCY APPROACH TO LEADERSHIP, which theorizes that different situations and conditions require different management approaches.

2. An early style identified by Fred Fiedler focused on the match between the leader’s personality and the situation.

3. He defined two basic leader personality traits.

TEXT FIGURE 6.5The Managerial Grid(Text page 154)

POWERPOINT 6-10The Managerial Grid(Refers to text pages 153-154)

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BONUS CASE 6-1Leading in a Leaderless CompanyThe 21st century may be unfriendly to leaders who try to run their companies through sheer force of will. See complete case, discussion questions, and suggested answers on page 6.Error: Reference source notfound of this manual.

TEXT FIGURE 6.6Fiedler’s Classification of Situations (Text page 155)

LECTURE OUTLINE LECTURE NOTES a. Task-motivated leaders gain

satisfaction from the performance of a task.

b. Relationship-motivated leaders gain satisfaction from interpersonal relationships.

4. The least preferred co-worker scale (LPC) was used to measure a person’s orientation.

a. Relationship-motivated leaders were presumed to be motivated to have close interpersonal relations with others.

b. Task-oriented leaders were presumed to be motivated to accomplish the task.

5. Fiedler next developed a favorable-unfavorable continuum based on three major dimensions:

a. LEADER-MEMBER RELATIONS refer to the degree others trust and respect the leader and to the leader’s friendliness.

b. TASK-STRUCTURE is the degree to which job tasks are structured.

c. POSITION POWER refers to the power and influence that go with a job.

6. These dimensions are graphed in a complex eight-celled continuum.

H. Continuum of Leader Behaviors 1. Robert Tannenbaum and Warren

Schmidt identified three forces involved in finding the most effective leadership style:

POWERPOINT 6-11Contingency Approach to Leadership(Refers to text pages 154-155)

TEXT FIGURE 6.7Leadership Style and Leadership Situations (Text page 155)

TEXT FIGURE 6.8Forces Affecting the Leadership Situation (Text page 156)

TEXT FIGURE 6.9Continuum of Leader

LECTURE OUTLINE LECTURE NOTES a. forces in the manager b. forces in the subordinate c. forces in the situation 2. They concluded that one style of

leadership is not effective in all situations.

I. Path-Goal Theory of Leadership 1. The PATH-GOAL THEORY OF

LEADERSHIP attempts to define the relationships between a leader’s behavior and the subordinates’ performance and work activities.

a. Leader behavior influences the motivation of subordinates when they see it as a step toward future satisfaction.

b. Behaviors can either increase or decrease employee expectancies.

2. In path-goal theory, there are four basic leadership behavior types:

a. role classification leadership b. supportive leadership c. participative leadership d. autocratic leadership 3. Each of these leadership behaviors

results in different levels of performance and subordinate satisfaction.

J. Situational Leadership Theory 1. According to the SITUATIONAL

LEADERSHIP THEORY, as the level of maturity of followers increases, structure should be reduced while socio-emotional support should first

Behavior (Text page 156)

POWERPOINT 6-12Continuum of Leader Behaviors(Refers to text page 156)

POWERPOINT 6-13Path-Goal Theory of Leadership(Refers to text pages 157-158)

TEXT FIGURE 6.10Situational Leadership Theory (Text page 158)

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LECTURE OUTLINE LECTURE NOTESbe increased and then gradually decreased.

2. As followers progress from immaturity to maturity, the leader’s behavior should move from:

a. high task-low relationships to → b. high task-high relationships to → c. low task-high relationships to → d. low task-low relationshipsK. Transactional, Transformational, and

Charismatic LeadersLEARNING OBJECTIVE 5Explain the differences between Transactional, Transformational, and Charismatic leadership styles. (Text pages 158-159)

1. Another approach is based on how leaders and followers influence one another.

2. Using TRANSACTIONAL LEADERSHIP, leaders engage in an unemotional bargaining relationship with their followers.

3. TRANSFORMATIONAL LEADERSHIP involves cultivating employee acceptance of the group mission.

4. CHARISMATIC LEADERSHIP involves a leader who can successfully influence employee behavior on the strength of personality or a perceived charisma, without the formal power or experience to back it up.

PROGRESS CHECK QUESTIONS (Text page 160)

5. Define the following leadership styles: autocratic, laissez-faire, and democratic.

POWERPOINT 6-14Transactional, Transformational and Charismatic Leadership(Refers to text pages 158-159)

CRITICAL THINKING EXERCISE 6-3Crisis ManagementWhen a business is confronted by a crisis, managers must react quickly to keep the organization responsive. See complete exercise on page 6.Error: Reference source not found of this manual.

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LECTURE OUTLINE LECTURE NOTES6. Summarize the findings of both the Ohio State and

University of Michigan leadership studies.7. Explain the path-goal theory of leadership.8. Explain the differences between transactional,

transformational, and charismatic leadership styles.

V. LESSONS FROM LEADERSHIP STUDIESA. It is hard to predict who will be a good

leader. B. There is no one best way to lead: most

leadership is situational.C. The effectiveness of a leadership style can

be seen in the atmosphere of the organization.

POWERPOINT 6-15Lessons from Leadership Studies(Refers to text page 160)

LECTURE LINK 6-2Best Business Leaders of the 20th CenturyThe top executives of the 20th

century, as chosen through a survey of executives. See complete lecture link on page 6.Error: Reference source notfound of this manual.

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LECTURE OUTLINE LECTURE NOTES

VI. MANAGING CORPORATE CULTURELEARNING OBJECTIVE 6Identify strategies for effectively managing corporate culture. (Text pages 160-167)

A. The word “culture” has many meanings. 1. CULTURE is the set of important

understandings (often unstated) that members of a community share.

2. In an organization, culture is similar to a human’s personality.

3. An organization’s culture is transmitted through:

a. long-standing, unwritten rules b. shared standards c. standards for social etiquette and

demeanor d. established customers for relating

to peers, subordinates, and superiors

e. other traditions 4. CORPORATE CULTURE

communicates how people in an organization should behave by establishing a value system conveyed through rites, rituals, myths, legends, and actions.

5. Or, more simply, corporate culture means “the way we do things around here.”

B. Cultural Forms of Expression 1. Culture has two basic components; a. substance, the meanings

contained in its values, norms, and beliefs

b. forms, the practices whereby

POWERPOINT 6-16Managing Corporate Culture(Refers to text pages 160-161)

LECTURE LINK 6-3The Culture of the Real Rocket ScientistsFor 40 years the Jet Propulsion Laboratory has planned interplanetary missions for NASA guided by a few key rules. See complete lecture link on page 6.Error: Reference source notfound of this manual.

LECTURE OUTLINE LECTURE NOTESCASE INCIDENT 6.2

The Way We Do Things (Text page 166)

The Fitzgerald Company has been the industry leader in producing consumer products for years. However, sales and market shares have been in decline now for the past several. The company is now considering changing the company culture to redefine itself and regain the success it has enjoyed in the past.

1. Describe, in general terms, the corporate culture at Fitzgerald Company.

The corporate culture for the Fitzgerald Company has been one of work-hard-play-hard, where activity is the key to success. Rewards accrue for persistence and the ability to find a need and fill it. Because of the need for volume, team players who are friendly and outgoing (sales types) thrive.

2. What’s wrong with a business philosophy based on the belief “that customer relations and a strong selling orientation are the keys to business success”?

Meeting the needs of the customer is essential to success in areas such as product design, implementation, and delivery. Creating and selling products that please the customer impacts the company’s total revenue. However, revenue is not the same thing as profit. Profit is what is left after costs have been subtracted from revenue. Unless a product can be produced in a cost-effective way, more sales won’t do a thing for profit.

3. What does Valerie mean when she says Fitzgerald Company may have to change its culture? What are some of the necessary changes?

For the Fitzgerald Company, its corporate culture has been successful in the past. However, losses in sales and market shares have now prompted its president to look at how the company culture affects sales and expenses. Changing a company culture will be a difficult process for many reasons.

Based on research, the Fitzgerald Company may have to change several characteristics of the company to foster a new culture. These characteristics include individual autonomy (degree of responsibility/ independence for individuals in the organization), structure (rules and regulations), support (managers to subordinates), identification (employee identification to the organization as a whole), performance-reward (rewards for performance), conflict tolerance (willingness to hones and open about differences), and risk tolerance (degree at which employees are encouraged to be aggressive/innovative and risk seeking).

4. Discuss the problems the company may encounter in attempting to implement changes.

The biggest challenge the Fitzgerald Company will face is the length of time it will take to implement and change its corporate culture. This process usually takes 6 to 15 years. It is also expensive. Because of the cost, time, and difficulty in changing culture, some might argue that it is easier to change the people within the organization. This assumes businesses promote people who fit their organization, and the easiest way to change the organization’s culture is to change the people. However, it makes more sense to strengthen or fine-tune the current cultural structure.

F. Changing Culture 1. It usually takes from 6 to 15 years to

POWERPOINT 6-19Changing Culture

LECTURE OUTLINE LECTURE NOTESsuccessfully change organizational culture.

2. According to Allan Kennedy, there are only five reasons to radically change organization culture.

3. It is possible to strengthen or fine-tune the current culture without wholesale cultural changes.

4. The easiest if not the only way to change an organization’s culture is to change its people.

(Refers to text pages 166-168)

BONUS CASE 6-2Turning Tyco AroundAfter Tyco’s former CEO Dennis Kozlowski’s conviction for looting $600 million from the company, Ed Breen was brought in to rescue the troubled company. See complete case, discussion questions, and suggested answers on page 6.Error: Reference source notfound of this manual.

THE WORLD OF WORK

Taco Barn Gets Some Surprising Feedback (Text page 167)

Tony has successfully participated in the leadership development survey and information about this survey is available for discussion with his supervisor. The reports show that some employees are very happy while others are unhappy. The results suggest that the company needs to address how leadership style impacts corporate culture.

1. Should the leadership team have been surprised by the survey results? Why or why not?

Not really. The purpose of the survey was to identify what works and what doesn’t. Identifying problem areas is the first step in solving the problem.

2. Should they be pursuing a “right” leadership style? Why or why not?

Is there really one “right” leadership style? Many experts will answer that the right style depends on the leader, the employees, and the situation. Mandating one leadership style might inadvertently destroy successful leadership situations. Effective leadership requires drawing on a range of skills and techniques, not a prescribed leadership model. However, that being said, the poor performances of the “problem children” still needs to be addressed, but not with a one-size-fits-all approach.

3. If Taco Barn doesn’t have a clear sense of culture (as the survey results appear to indicate), where and how does it start to develop one?

Taco Barn culture is not clearly defined. However, culture can’t just be designed and implemented. It grows over time, as the organization develops a strong understanding of what is important and what has the support of management and employees.

The first step in establishing the Taco Barn culture should be defining the essence of the organization. These characteristics include individual autonomy, structure, support, identification, performance-reward, conflict tolerance, and risk tolerance.

4. What should the leadership of the Taco Barn organization do now?

The leadership has begun defining its culture and communicating it to employees throughout the organization. Employees can be shown how the development of this culture can be a positive step in developing a more focused, established company with leadership skills that can excel in the restaurant industry, providing a good working environment for its employees. This will help employees both in the short run and long run to identify the culture of their company and allow them to associate and identify more with the company as a whole rather than just their individual store.