Leadership is the process of influencing others – a group, employees, or followers depending on the environment- in dynamic ways towards attaining goals.

Personality and values shape a person’s leadership skills.

The acceptance of followers and/or encouragement is where leaders draw most of their power.

A leader is a role model who earns the title and is embraced by the followers.

Achieving goals through planning, organizing, leading, motivating, and controlling.

Management and leadership are similar in terms of:
• Focus on attaining goals,
• Group function,
• Process of interaction and influence,
• Practice changing with circumstances.

The management and leadership roles, which are critical dimensions of the world of business, have distinguishing characteristics:
• Management emerged with the IndustrialRevolution.
• Management is based on position; leadership is about personal qualifications.
• Managers are appointed; a leader is a role model who earns the title and is embraced by the followers.
• Management aims at formal goals whereas leaders generate informal goals.
• Management is attaining goals through others; leadership is pursuing goals with others.
• Management is based on rules, leadership is spontaneous and inspirational.
• Managers focus on completing tasks efficiently; leaders focus on goals for development, improvement, and change.
• Management authority is based on legal authority; leadership power comes from followers.
• Management produces order and consistency; leadership produces change and movement.

Manager uses legal authority for attaining goals, whereas a leader possesses power, ability to lead, for accomplishing organizational goals through followers’ needs and expectations. Leaders and managers may have different personalities in an organization. Some tend to possess characteristics close to that of a manager. Some stand as a sole leader. As managerial and leadership attitudes and skills converge, same person is a manager and a leader which we see as an ideal situation.

Traits approach focused on identifying innate qualities and characteristics possessed by great social, political, and military leaders in history. The logic is to analyze what such leaders did to achieve highly challenging, at times impossible tasks. Atatürk, Lincoln, Napoleon, and Gandhi are examples of such traits.

A focus solely on traits was not sufficient for separating leaders from others. Neither was it for analyzing the leadership process. This led to searching for the behavioral side of leadership characteristics.

Based on interviews with managers and employees, the Michigan studies identified two basic forms of leadership behaviors: task/production oriented behaviors and people/employee oriented behaviors.

Task-oriented behaviors indicate a focus on production and technical aspects of a job. Managers who were task-oriented were concerned about issues such as keeping low costs and scheduling meetings.

People-oriented behaviors indicate a supportive approach to subordinates. Managers with this type of orientation dealt with high performance goals and human needs.

The researchers from Ohio State University introduced two basic leader behaviors or styles: initiating structure behavior and consideration behavior.

Initiating structure is parallel to the task oriented behavior and shows the emphasis on formal processes such as designing roles and responsibilities.

Consideration behavior is a form of people orientation and indicates the extent of concern for the relationships with subordinates and their feelings.

The Managerial (Leadership) Grid is about the behavioral dimension of leadership. The managerial grid is a useful tool for managers to observe which category in the grid their leadership style fits. It is also a model that can be used during training programs for organizational development.

Leadership styles are influenced by factors such as; the environmental circumstances, the product/s, and manager’s/leader’s choices.

In a dynamic business environment, there is no “one fits all” leadership style.

Contingency models of leadership focus on the match between environmental factors and leader’s behaviors. Some of the factors examined are organizational goals, leader-employee relations, task structure, and position power.

Some of the contingency approaches to leadership are situational leadership and Fiedler’s contingency theory.

Situational leadership emphasizes that leaders match their approach according to the degree that subordinates are ready for the task. In other words, characteristics of people which impact the leadership behaviors. Hence, the model introduces two basic parts: leadership styles and the development level of employees.

The premise of the situational leadership model is: “Different situations demand different types of leadership”.

Main leadership styles are identified in groups such as: supportive (relationship oriented) and directive (task oriented).

Supportive behaviors are participative, friendly, include two-way communication, praising, listening, and rewarding.

Directive behaviors include one-way communication, clearly defined goals, tasks, and roles as well how to achieve them.

Development level or readiness of employees are determined based on: their commitment to their job (willingness, motivation, confidence) and their competency level (knowledge, skills, confidence, experience

This model examines the match between the leadership style and the situation. The difference from the situational model is that Fiedler’s model adds organizational aspects to the situational variables. The focus of the Fiedler’s contingency model is to detect the leadership style and the situation correctly, so the most effective match can be decided.

Leadership styles in Fiedler’s contingency model are people (relationship) oriented and task oriented styles, similar to the situational model. What is different is that Fiedler suggests that leadership styles are pretty much fixed. Therefore, the leader matches her/his style with the situation that is most suitable for her/his effectiveness.

Fiedler’s model includes the Least Preferred CoWorker (LPC) scale for measuring leader styles. If a leader scores someone s/he least prefers high, it means that s/he is willing to develop good relationships and it is considered a relationship oriented style. If this score is low, it means the leader pays more attention on achieving the task and it is considered a task oriented style. Therefore, leaders with high LPC scores are people oriented; those who score low LPC are task oriented.

After the leadership style is determined as whether people or task oriented, the situation must be examined. By this token, the situational variables of Fiedler’s contingency model are: the quality of leadermember relations; the degree of task structure, and the position power.

Quality of leader-member relations involves factors such as the employees’ or group members’ trust and loyalty for the leader. This relationship can be either positive and good or negative and poor.

Task structure is about to what extent the job requirements as well as the goals are clearly defined, formalized and standardized. Thus, a task structure can be a highly structured routine one or weakly structured which is out of routine.

Position power is the amount of power that a leader has over her/his subordinates in terms of hiring, firing, promotion, and work orders. Thus, regarding these factors the power of a leader based on the position can be strong or weak.

A situation is considered highly favorable if: the leader-member relations are based on trust and respect; the task structure is highly structured; and the leader has strong power over her/his subordinates.

A situation is mentioned as highly unfavorable if: the leader-member relations are poor; the task and roles are not clearly defined and standardized; and the leader has little authority for directing subordinates and issuing orders.

The favorability of the leadership situation determines the suitability of the leadership style.

The concept of leadership has been subject to change in organizational settings. The emerging dimensions of technology, communication, human relations, and social interaction force new leader figures and new ways of leading people. Consequently, some leadership styles that are recently introduced are charismatic/visionary leadership, leader-member exchange theory, transformational and transactional leadership, servant leadership, team leadership, and authentic leadership.

Leader-member exchange theory (LMX) suggests that leaders create in-groups and out-groups that they decide at the beginning of their relationship with their subordinates or followers. According to LMX, in-group members’ performance is higher; they have more job satisfaction; mostly support the leader’s practices; devoted to the organizational goals; and generate less turnover.

The message for leaders and managers from the LMX theory is that people with whom they are partners and those they work with daily and closely form a team. These people are critical to the success of leaders and the effectiveness of organizational goals. Therefore, selecting whom to work with closely is a strategic decision for a leader which requires deep thinking and analysis.

Charismatic leadership is inspiring and motivating people beyond what they would normally do.

Transformational leadership is more than charismatic leadership. A transformational leader articulates a vision, transforms the thinking of individuals, brings out their creativity, engages in the organizational atmosphere, and empower followers to accomplish goals, and moreover reach their full potential.

Transformational leadership is explained in four I’s: charisma or idealized influence; inspirational motivation; intellectual stimulation; and individualized consideration.

Charisma or idealized influence is about transformational leaders deeply influencing people and being strong role models. They are trustworthy, visionary, possess high moral standards, and highly respected by their followers.

Inspirational motivation underlines transformational leader’s ability to motivate people for high expectations and inspire them for accomplishing challenging tasks.

Intellectual stimulation is creating an atmosphere of freedom to let people think broadly and bringing the innovator out of people, encourage them to think out of the box which also supports critical thinking.

Individualized consideration is approaching people on an individual basis acknowledging that each individual is different regarding their needs, expectations, and skills, thus they must be managed and treated differently.

Transformational leaders emerge in organizations, whether business or the nation state, during periods of crisis, and the need for radical change brought about by invention or uncertainty, or upending threats in the external environment.

Transactional leadership is employed where the accomplishment of organizational goals is the primary focus and the leader is fixed on the results. We may as well mention that transactional leaders are devoted managers who aim to accomplish organizational goals in an efficient way. Transactional leaders also attach importance to issues such as communication, developing human resources, and motivation.

Transformational and transactional leadership are different in the ways they approach motivating individuals or employees. For the transactional leader the motive is the achievement of the organizational goals; for the transformational leader it is getting the individuals to reach their fullest potential through inspiration and individual consideration.

Transactional leadership factors are contingent reward and management by exception.

Contingent reward is the basics of the exchange between a transactional leader and the followers. A promotion, appraisal, salary raise, or a good grade are reward examples.

Management by exception (MBE) is the intervention of managers in the employees performance. A manager uses active MBE when s/he closely watches the employees for mistakes and takes corrective actions. If the intervention is after the mistakes or defaults happen, it is then a passive form of MBE.

Diversity is acknowledging and understanding of differences: gender, age, background, cultural values, physical condition, nationality, religion, race, language, opinions, skills, or personality. The term is defined in various sources from different perspectives. The Business Dictionary refers to diversity as “Feature of a mixed workforce that provides a wide range of abilities, experience, knowledge, and strengths due to its heterogeneity in age, background, ethnicity, physical abilities, political and religious beliefs, sex, and other attributes”.

Today’s work place is more integrated and reflects globalized societies and markets. The pressure of the increasing mobility of people with different skills and cultural orientations have led business enterprises, international organizations, governments, and non-profit organizations to place more emphasis on inclusion and equality.

For today’s managers, leading or managing diversity successfully is a key component of competitive advantage as it is for effective accomplishment of goals especially in international business settings. How can leaders and managers ignore or not be attentive to the diversification issues while their work groups are diversified in age, gender, values, or background?

Inclusion is the degree to which each member of an organization feels that her or his presence is appreciated. One of the main determinants of successful diversity management is to obtain an inclusive work atmosphere.

A diversified work place is a blend of multicharacteristics possessed by the members of a business organization. Hence, a diversified work place is: multigenerational; composed of a variety of backgrounds, cultures, languages, and ideologies as well as religions; covers different ethnic groups; minorities, underrepresented and disadvantaged groups; and finally diversified gender groups.

A diversified work place has advantages such as:
• An enriched work environment,
• Promotion of equality,
• Employees feeling more valued,
• More effective customer relations
• More efficient problem solving,
• More creative and innovative processes which require out of the box thinking,
• Reduced costs associated with high turnover and lawsuits.

Some challenges for companies are:
• Difficulty of managing differences
• Conflict factor that may arise among the employees working closely or team members
• Personal bias - Prejudice, stereotyping, and discrimination

Prejudice is uninformed and biased negative perception of others who are different based on gender identification, ethnicity, cultural background, or religion.

Stereotyping is rigidly categorizing certain individuals, groups, or communities because of prejudicial tendency towards their differences.

Discrimination happens as a result of prejudice and stereotyping.

Culture encompasses values, beliefs, and norms that shape the way of living and thinking in a society. Culture strongly affects individuals and organizations within a society; thus we consider it the national culture of a country. The cultural conditioning process happens under the influence of values shaped by authority figures and environmental surroundings. The concept of multiculturalism emphasizes diversity in terms of cultural differences.

Multiculturalism refers to differences in values, beliefs, attitudes, customs, and norms that are held by people from different cultures.

Organizational culture is shared values that lead the way of operating towards the goal accomplishment. Organizations are sub-cultures of a national culture, embracing common values with national cultures.

Managers in a multicultural work environment should possess a behavioral pattern such as ethnorelativism which is the opposite of ethnocentrism. Ethnorelativism is the approach that cultures are equal as well as being able to think from the perspectives of others.

Ethnocentrism is the belief that one’s own culture is superior to others which creates barriers between members of a group or a work team.

Cultural convergence is a process that eliminates the differences in values between nations, groups, or organizations.

Cultural orientation is a strong determinant of women’s social and economic participation which also affects their political power. Traditional and conservative cultures tend to attach women’s roles of wife and mother at home rather than as working women.

Educational attainment is an important factor for women gaining economic independence by seeking more participation in a country’s work force and better jobs.

The glass ceiling is one of the most discussed terms for organizational challenge regarding women’s promotion to top administrative positions. It indicates an invisible barrier for upward mobility of women and other ethnic, religious, or gender minorities in an organization.

Motivation is a drive to be willing to perform a task, take an action, or achieve a goal usually for a desired or expected outcome. Motivation is a basic tool for managers for creating a happy and an efficient work place.

The basic process for motivating employees starts with needs; continues with actions for the fulfilment of the needs; and results in satisfaction and rewards.

There are two types of rewards: intrinsic reward and extrinsic reward. Satisfaction as well as relief by completing a mission or innovating a product is an intrinsic reward. Satisfaction that is obtained from outside in the form of company shares, promotion, or being praised by the team leader is an extrinsic reward.

Motivational approaches and tools in the work place are grouped: by content and by process; by chronology as early and contemporary approaches.

Content perspectives focus on peoples’ needs that result in certain behaviors and actions for fulfilling them. Content theories therefore discuss various needs that motivate people for contributing to organizational goals.

In regard to content perspectives on motivation, companies may benefit from the hierarchy of needs, ERG theory, two-factor approach, and acquired needs theory.

Maslow’s hierarchy of needs theory proposes that people are motivated by multiple needs which are in a hierarchical order.  In this regard, Maslow introduced five types of needs: psychological needs; safety needs; social needs; esteem needs; and self-actualization needs.

Physiological needs are the most basic human needs such as food, and oxygen.

Safety needs include protection from physical and emotional as well as security against all environmental threats.

Social needs are a person’s need for friendship, belongingness, acceptance, and love.

Esteem needs can be internal such as selfrespect and self-image, and extrinsic such as recognition and respect by others.

Self-actualization needs reflect one’s desire for self-development and growth.

ERG theory represents a simplified form of Maslow’s needs hierarchy with reduced number of needs. Thus, it introduces the needs hierarchy as:
• “Existence needs” about being in a healthy physical condition.
• “Relatedness needs” indicating the needs for being in good relationships with others.
• “Growth needs” about self-development and gaining competence.

According to the ERG theory, when higher level needs are not satisfied as expected frustration regression principle may apply. That is, the person may revert to lower level needs, this time aiming to get more satisfaction from already fulfilled needs.

It proposes that the employees mention dissatisfaction based on “extrinsic factors” such as work conditions, supervision, interpersonal relations, security, and pay. On the other hand, work satisfaction is based on “intrinsic factors” such as achievement, responsibility, and success.

This perspective, also called three-needs theory and developed by David McClelland, proposes that certain needs acquired throughout one’s lifetime determine the motivation at work. The most common needs are: need for achievement (nAch); need for power (nPow); and need for affiliation (nAff).

Need for achievement is the motive for reaching a high standard as well as complex tasks and challenging others.

Need for power indicates the desire for gaining authority over others as well as controlling and leading them.

Need for affiliation is the desire for establishing friendships and being a part of a group.

Process perspectives focus on peoples’ behaviors which may be affected by environmental factors besides needs. The important point for managers is how to cause employees to repeat or not repeat those behaviors. Some known process perspectives of motivation are equity theory, expectancy theory, and goal setting. In this chapter we will cover equity theory and expectancy theory.

Equity theory proposes that individuals seek equal and fair treatment regarding equal contributions. Thus the theory emphasizes justice, fairness, and equality. According to the equity perspective, employees will be motivated when they observe that they get the same amount of treatment compared to others. That is, employees evaluate the ratio of inputs such as time, effort, and ability to outcomes such as pay, promotion, and recognition compared to the similar ratios by others.

This theory is based on three key factors: expectation, instrumentality, and valence. Expectancy or effort-performance linkage is the perceived probability of success by an individual about performing a task. Instrumentality or performance-reward (outcome) linkage is the perceived degree of positive outcome. Valence is the attractiveness of the outcome for the individual. The theory suggests that the individual’s motivation depends on the expectation of her or his ability to perform certain level and receive a reward linked to it.

Leadership is the process of influencing others – a group, employees, or followers depending on the environment- in dynamic ways towards attaining goals.

Management and leadership are similar in terms of:

• Focus on attaining goals,

• Group function,

• Process of interaction and influence,

• Practice changing with circumstances. 

Early research on leader traits introduced characterisctics possessed by powerful leaders, which is called Great Man theory. Traits approach focused on identifying innate qualities and characteristics possessed by great social, political, and military leaders in history. The logic is to analyze what such leaders did to achieve highly challenging, at times impossible tasks. Atatürk, Lincoln, Napoleon, and Gandhi are examples of such traits.

Based on interviews with managers and employees, this group of studies identified two basic forms of leadership behaviors: task/production oriented behaviors and people/ employee oriented behaviors.7 Task-oriented behaviors indicate a focus on production and technical aspects of a job. Managers who were task-oriented were concerned about issues such as keeping low costs and scheduling meetings. People-oriented behaviors indicate a supportive approach to subordinates.

The results of this group of research were akin to Michigan studies. The researchers from Ohio State University introduced two basic leader behaviors or styles: initiating structure behavior and consideration behavior. Initiating structure is parallel to the task oriented behavior and shows the emphasis on formal processes such as designing roles and responsibilities. Consideration behavior is a form of people orientation and indicates the extent of concern for the relationships with subordinates and their feelings.

Introduced by Hersey and Blanchard, The premise of the situational leadership model is “Different situations demand different kinds of leadership”. The situational model carries features of behaviorial approaches to leadership.

This model examines the match between the leadership style and the situation. The difference from the situational model is that Fiedler’s model adds organizational aspects to the situational variables. The focus of the Fiedler’s contingency model is to detect the leadership style and the situation correctly, so the most effective match can be decided. If this match is the right one then the group is most likely to be successful; if the match is not appropriate the group performance will be relatively low. Let’s examine how the leadership style and the situation is detected.

The introduction of transformational leadership was initiated by Downton and developed by Burns. Transformational leaders differ from others by their charisma and the ability to inspire radical change. Transformational leadership is more than charismatic leadership which is “inspiring and motivating people beyond what they would normally do”.

Some are:

• The overall legal workplace requirements in a country such as quotas for women and underrepresented groups and people with disabilities.

• The approach of business owners and top administration about diversification of the workforce.

• The size and extent of cross-cultural operations and global connections.

• The percentage of customer diversification in the market for specific goods or services.

• The pressure from the public opinion and civil society organizations.

• The gender, racial, and cultural composition of the labor pool whether regional or international that companies and organizations draw workers.

A diversified work place is a blend of multi-characteristics possessed by the members of a business organization. Hence, a diversified work place is: multi-generational; composed of a variety of backgrounds, cultures, languages, and ideologies as well as religions; covers different ethnic groups; minorities, underrepresented and disadvantaged groups; and finally diversified gender groups.

Companies with international operations feel the pressure of becoming more diversified under the developments and changes such as:

• The increasing mobility of the work force among the countries and regions of the world.

• The diversified nature of customers of economic sectors whether industrial or service providers.

• The increasing global competition pushing companies towards international strategies for gaining different cultural perspectives and a variety of skills.

The process starts with the needs that change by individuals and circumstances. Because all individuals have needs of this or that kind, motivation is a basic tool for all managers to create a happy and efficient work place. The motivation process continues with actions towards the fullfillment of the needs by the person, others, and most importantly by managers. The result of these actions are satisfactions and rewards either intrinsicly from within the person or extrinsicly from outside.

Content perspectives focus on people's needs that result in certain behaviors and actions for fulfilling them. Content theories therefore discuss various needs that motivate people for contributing to organizational goals. 

ERG theory represents a simplified form of Maslow’s needs hierarchy with reduced number of needs.

The theory content is based on interviews he conducted to find out when employees were satisfied and when dissatisfied, thus when they were motivated and unmotivated to work.

This theory is based on three key factors: expectation, instrumentality, and valence. Expectancy or effortperformance linkage is the perceived probability of success by an individual about performing a task. Instrumentality or performance-reward (outcome) linkage is the perceived degree of positive outcome. Valence is the attractiveness of the outcome for the individual.

Equity theory proposes that individuals seek equal and fair treatment regarding equal contributions. Thus the theory emphasizes justice, fairness, and equality.

Process perspectives focus on peoples’ behaviors which may be affected by environmental factors besides needs.

This perspective is also called three-needs theory and developed by David McClelland and it proposes that certain needs acquired throughout one’s lifetime determine the motivation at work. The most common needs are: need for achievement(nAch); need for power(nPow); and need for affiliation(nAff).

This theory, introduced by Maslow, is one of the early and most widely known approaches to motivation. Early theories of motivation form the foundation of the present practices for motivating the work force in organizations. Although changing philosophy in work life and globalization caused new perspectives to motivation, early approaches are still in effect.