Effective Leadership Processes

By Luthans, F.

Edited by Paul Ducham


A series of pioneering leadership studies conducted in the late 1930s by Ronald Lippitt and Ralph K. White under the general direction of Kurt Lewin at the University of Iowa have had a lasting impact. Lewin is recognized as the father of Group Dynamics and as an important cognitive theorist. In the initial studies, hobby clubs for ten-year-old boys were formed. Each club was submitted to all three different styles of leadership— authoritarian, democratic, and laissez-faire. The authoritarian leader was very directive and allowed no participation. This leader tended to give individual attention when praising and criticizing, but tried to be friendly or impersonal rather than openly hostile. The democratic leader encouraged group discussion and decision making. This leader tried to be “objective” in giving praise or criticism and to be one of the group in spirit. The laissez-faire leader gave complete freedom to the group; this leader essentially provided no leadership.
         Unfortunately, the effects that styles of leadership had on productivity were not directly examined. The experiments were designed primarily to examine patterns of aggressive behavior. However, an important by-product was the insight that was gained into the productive behavior of a group. For example, the researchers found that the boys subjected to the autocratic leaders reacted in one of two ways: either aggressively or apathetically. Both the aggressive and apathetic behaviors were deemed to be reactions to the frustration caused by the autocratic leader. The researchers also pointed out that the apathetic groups exhibited outbursts of aggression when the autocratic leader left the room or when a transition was made to a freer leadership atmosphere. The laissez-faire leadership climate actually produced the greatest number of aggressive acts from the group. The democratically led group fell between the one extremely aggressive group and the four apathetic groups under the autocratic leaders.
       Sweeping generalizations on the basis of the Lippitt and White studies are dangerous. Preadolescent boys making masks and carving soap are a long way from adults working in a complex, modern organization. Furthermore, from the viewpoint of today’s behavioral science research methodology, many of the variables were not controlled. Nevertheless, these leadership studies have important historical significance. They were the first attempts to determine, experimentally, what effects styles of leadership have on a group. Like the Hawthorne studies, the Iowa studies are too often automatically discounted or at least marginalized because they are hard to generalize to modern organizational leadership. The value of the studies was that they were the first to analyze leadership from the standpoint of scientific methodology, and, more important, they showed that different styles of leadership can produce different, complex reactions from the same or similar groups.


At the end of World War II, the Bureau of Business Research at Ohio State University initiated a series of studies on leadership. An interdisciplinary team of researchers from psychology, sociology, and economics developed and used the Leader Behavior Description Questionnaire (LBDQ) to analyze leadership in numerous types of groups and situations. Studies were made of Air Force commanders and members of bomber crews; officers, noncommissioned personnel, and civilian administrators in the Navy Department; manufacturing supervisors; executives of regional cooperatives; college administrators; teachers, principals, and school superintendents; and leaders of various student and civilian groups.
        The Ohio State studies started with the premise that no satisfactory definition of leadership existed. They also recognized that previous work had too often assumed that leadership was synonymous with good leadership. The Ohio State group was determined to study leadership, regardless of definition or whether it was effective or ineffective.
           In the first step, the LBDQ was administered in a wide variety of situations. In order to examine how the leader was described, the answers to the questionnaire were then subjected to Factor Analysis. The outcome was amazingly consistent. The same two dimensions of leadership continually emerged from the questionnaire data. They were consideration and initiating structure. These two factors were found in a wide variety of studies encompassing many kinds of leadership positions and contexts. The researchers carefully emphasize that the studies show only how leaders carry out their leadership function. Initiating structure and consideration are very similar to the time-honored military commander’s functions of mission and concern with the welfare of the troops. In simple terms, the Ohio State factors are task or goal orientation (initiating structure) and recognition of individual needs and relationships (consideration). The two dimensions are separate and distinct from each other.
     The Ohio State studies certainly have value for the study of leadership. They were the first to point out and emphasize the importance of both task and human dimensions in assessing leadership. This two-dimensional approach lessened the gap between the strict task orientation of the scientific management movement and the human relations emphasis, which had been popular up to that time. Interestingly, when Colin Powell, usually considered one of the most-effective and most-admired leaders of recent years, speaks of his own leadership process, he uses this two-dimensional approach. Today leadership is recognized as both multidimensional, as first pointed out by the Ohio State studies, and multilevel (person, dyad, group, and collective/community).


At about the same time that the Ohio State studies were being conducted, a group of researchers from the Survey Research Center at the University of Michigan began their studies of leadership. In the original study at the Prudential Insurance Company, 12 high-low productivity pairs of groups were selected for examination. Each pair represented a high-producing section and a low-producing section, with other variables such as type of work, conditions, and methods being the same in each pair. Nondirective interviews were conducted with the 24 section supervisors and 419 clerical workers. Results showed that supervisors of high-producing sections were significantly more likely to be general rather than close in their supervisory styles and be employee-centered (have a genuine concern for their people). The low-producing-section supervisors had essentially opposite characteristics and techniques. They were found to be close, productioncentered supervisors. Another important, but sometimes overlooked, finding was that employee satisfaction was not directly related to productivity, the type of supervision was the key to their performance.
             The general, employee-centered supervisor, described here, became the standard-bearer for the traditional human relations approach to leadership. The results of the Prudential studies were always cited when human relations advocates were challenged to prove their theories. The studies have been followed up with hundreds of similar studies in a wide variety of industrial, hospital, governmental, and other organizations. Thousands of employees, performing unskilled to highly professional and scientific tasks, have been analyzed. Rensis Likert, the one-time director of the Institute for Social Research of the University of Michigan, presented the results of the years of similar research in his books and became best known for his “System 4” (democratic) leadership style


The scientific analysis of leadership started off by concentrating on the trait approach to leadership. Attention was given to the search for universal traits possessed by leaders. The results of this voluminous early research effort were generally very disappointing. Only intelligence seemed to hold up with any degree of consistency. When these findings were combined with those of studies on physical traits, the conclusion seemed to be that leaders were bigger and brighter than those being led, but not too much so. For example, this line of research concluded that the leader was more intelligent than the average of the group being led, but, interestingly, was not the most intelligent of the group. Political analysts indicate that candidates should not come across as too intelligent to be electable, and the most intelligent member of a criminal gang is not the leader, but usually a lieutenant of the leader, the “brains” of the outfit.
           When the trait approach was applied to organizational leadership, the result was even cloudier. One of the biggest problems is that all managers think they know what the qualities of a successful leader are. Obviously, almost any adjective can be used to describe a successful leader. However, it should be recognized that there are semantic limitations and historically, little supporting evidence on these observed descriptive traits and successful leadership. In recent years, however, with the emergence of the importance of the “Big Five” personality traits in organizational behavior, the trait approach to leadership effectiveness has resurfaced. For example, a recent qualitative and quantitative meta-analysis review found strong empirical support for the leader trait perspective when traits are organized according to the five-factor model. Specifically, the personality trait of extraversion had the highest (.31) average correlation with leader emergence and leadership effectiveness, followed by conscientiousness (.28), openness to experience (.24), neuroticism (-.24), and nonsignificant agreeableness (.08). These results and newly developed traitlike theoretical frameworks such as the motivation to lead (MTL), which has been demonstrated to predict leadership potential, indicate that a dispositional, traitlike approach to leadership is still alive and may have potential for the future.


Picking up where the fixed, traitlike approach to leadership has left off are the newly emerging states and more-established skills for leadership development. Still in the tradition of concentrating on the great person approach, but moving away from a strict traits approach and serving as a bridge to the situational theories, are the newly emerging psychological states. The statelike (situationally based capacities, those open to development and change, as opposed to the dispositional, relatively fixed traits) positive organizational behavior (POB) constructs have potential for understanding and developing leadership. Specifically, both intuitive and beginning research evidence indicate that optimism, hope, resiliency, Emotional Intelligence, and especially Self-Efficacy are related to Effective Leaders. Incorporating these POB variables of the leader—describing who they are—into newly emerging theories such as authentic leadership seems important for the development of leadership to meet today’s challenges.
     In addition to developing the POB states, another departure from the trait approach that still focuses on leaders themselves is their skill development. For example, a number of years ago, Katz identified the technical, conceptual, and human skills needed for effective management. Yukl includes leadership skills such as creativity, organization, persuasiveness, diplomacy and tactfulness, knowledge of the task, and the ability to speak well. These skills have become very important in the application of leadership theory and are also given specific attention.
          Closely related to the skills approach is the study of leader “competencies.” One stream of research has identified several such competencies that are related to leadership effectiveness both in the United States and other cultures:

1. Drive, or the inner motivation to pursue goals

2. Leadership motivation, which is the use of socialized power to influence others to succeed

3. Integrity, which includes truthfulness and the will to translate words into deeds

4. Self-confidence that leads others to feel confidence, usually exhibited through various forms of impression management directed at employees

5. Intelligence, which is usually focused in the ability to process information, analyze alternatives, and discover opportunities

6. Knowledge of the business, so that ideas that are generated help the company to survive and thrive

7. Emotional intelligence, based on a self-monitoring personality, making quality leaders strong in situation sensitivity and the ability to adapt to circumstances as needed

Importantly, these competencies seem to hold in the current environment facing organizational leaders, but require further theory building and research.


The group theories of leadership have their roots in social psychology. Classic exchange theory, in particular, serves as an important basis for this approach. The leader provides more benefits/rewards than burdens/costs for followers. There must be a positive exchange between the leaders and followers in order for group goals to be accomplished. Pioneering theorist Chester Barnard applied such an analysis to managers and subordinates in an organizational setting more than a half-century ago. More recently, this social exchange view of leadership has been summarized by Yammarino and Dansereau as follows:

In work organizations, the key partners involved in exchange relationships of investments and returns are superiors and subordinates. Superiors make investments (e.g., salary, office space) in and receive returns (e.g., performance) from subordinates; subordinates make investments in and receive returns from superiors; and the investments and returns occur on a one-to-one basis in each superior-subordinate dyad.

This quotation emphasizes that leadership is an exchange process between the leader and followers. Social psychological research can be used to support this notion of exchange. Table 13.2 compares and contrasts the theory and research on three domains of leadership. Importantly, although traditionally ignored, there is considerable evidence that followers affect leaders, and there is considerable theory and research on the relationship, or exchange-based, approach to leadership.

Followers’ Impact on Leaders
A growing number of research studies indicate that followers/associates may actually affect leaders as much as leaders affect followers/associates. For example, one study found that when associates were not performing very well, the leaders tended to emphasize the task or initiating structure, but when associates were doing a good job, leaders increased emphasis on their people or consideration. In a laboratory study it was found that group productivity had a greater impact on Leadership Style than leadership style had on group productivity, and in another study it was found that in newly formed groups, leaders may adjust their supportive behavior in response to the level of Group Cohesion and arousal already present. In other words, such studies seem to indicate that followers affect leaders and their behaviors as much as leaders and their behaviors affect followers. Some practicing managers, such as the vice president of Saga Corporation, feel that employees lack followership skills, and there is growing evidence that these skills are becoming increasingly important. In other words, it is probably not wise to ignore followership. Most managers feel that their associates have an obligation to follow and support their leader and Kellerman argues that this arrangement is in the natural order of things (e.g., the “pecking order” of chickens in the barnyard or the dominant alpha male in the wolf pack). She concludes, “in order for large groups to govern themselves effectively, some must be willing to be leaders, others must be willing to be followers, and the majority must be willing to go along with this arrangement.” As the CEO of Commerce Union Corporation noted in a Wall Street Journal article: “Part of a subordinate’s responsibility is to make the boss look good.”

The Leader-Member Exchange (LMX) Model
Relevant to the exchange view of leadership is the vertical dyad linkage (VDL) approach, now commonly called leader-member exchange (LMX). LMX theory says that leaders treat individual followers differently. In particular, leaders and their associates develop dyadic (two-person) relationships that affect the behavior of both. For example, associates who are committed and who expend a lot of effort for the unit are rewarded with more of the leader’s positional resources (for example, information, confidence, and concern) than those who do not display these behaviors.
          Over time, the leader will develop an “in-group” of associates and an “out-group” of associates and treat them accordingly. Thus, for the same leader, research has shown that in-group associates report fewer difficulties in dealing with the leader and perceive the leader as being more responsive to their needs than out-group associates do. Also, leaders spend more time “leading” members of the in-group (that is, they do not depend on formal authority to influence them), and they tend to “supervise” those in the out-group (that is, they depend on formal roles and authority to influence them). Finally, there is evidence that members of the in-group (those who report a high-quality relationship with their leader) assume greater job responsibility, contribute more to their units, and are rated as higher performers than those reporting a low-quality relationship.
            This exchange theory has been around for some time now, and although it is not without criticism, in general, the research continues to be relatively supportive. However, as traditionally presented, LMX seems to be more descriptive of the typical process of role making by leaders, rather than prescribing the pattern of downward exchange relations optimal for leadership effectiveness. Research is also using more sophisticated methodologies and suggests that there are a number of moderators in the LMX-performance relationship.
        Graen and Uhl-Bien have emphasized that LMX has evolved through various stages: (1) the discovery of differentiated dyads; (2) the investigation of characteristics of LMX relationships and their organizational implications/outcomes; (3) the description of dyadic partnership building; and (4) the aggregation of differentiated dyadic relations to group and network levels. New insights into the manner in which leaders differentiate between employees in order to form in-groups and out-groups may in part be explained by social network analysis. Positive social networks and exchange processes assist leaders in selecting those who may become part of the inner circle of an organization. Also, the fourth stage recognizes the new cross-functional or network emphasis in organizations and even external relations with customers, suppliers, and other organizational stakeholders. Research that identifies leader-follower relationships that are best suited to specific environmental contingencies is still needed. Graen and Uhl-Bien have emphasized that LMX has evolved through various stages: (1) the discovery of differentiated dyads; (2) the investigation of characteristics of LMX relationships and their organizational implications/outcomes; (3) the description of dyadic partnership building; and (4) the aggregation of differentiated dyadic relations to group and network levels. New insights into the manner in which leaders differentiate between employees in order to form in-groups and out-groups may in part be explained by social network analysis. Positive social networks and exchange processes assist leaders in selecting those who may become part of the inner circle of an organization. Also, the fourth stage recognizes the new cross-functional or network emphasis in organizations and even external relations with customers, suppliers, and other organizational stakeholders. Research that identifies leader-follower relationships that are best suited to specific environmental contingencies is still needed.
          Finally, from the social cognitive perspective taken by this text, it should be remembered that leader-member exchanges are a reciprocal process. Evidence of this process of interaction suggests that leaders may be inclined to change follower self-concepts in the short term to achieve performance goals and more enduring changes. At the same time, followers reciprocally shape leaders’ self-schemas through their responses, both as individuals and through collective or group reactions. These and other elements of the continual negotiation between the leader and followers, which is also recognized by the Psychological Contract concept, deserve additional consideration in the future.

table 13.2


After concentrating just on leaders themselves proved to fall short of being an adequate overall theory of leadership, attention turned not only to the group being led and the exchange relationship, but also to the situational or contextual aspects of leadership. Social psychologists began the search for situational variables that affect leadership roles, skills, behavior, and followers’ performance and satisfaction. Numerous situational variables were identified, but no overall theory pulled it all together until Fred Fiedler proposed the now classic situation-based, or contingency, theory for leadership effectiveness.

Fiedler’s Contingency Model of Leadership Effectiveness

To test the hypotheses he had formulated from previous research findings, Fiedler developed what he called a contingency model of leadership effectiveness. This model contained the relationship between leadership style and the favorableness of the situation. Situational favorableness was described by Fiedler in terms of three empirically derived dimensions:

1. The leader-member relationship, which is the most critical variable in determining the situation’s favorableness

2. The degree of task structure, which is the second most important input into the favorableness of the situation

3. The leader’s position power obtained through formal authority, which is the third most critical dimension of the situation

Situations are favorable to the leader if all three of these dimensions are high. In other words, if the leader is generally accepted and respected by followers (high first dimension), if the task is very structured and everything is “spelled out” (high second dimension), and if a great deal of authority and power are formally attributed to the leader’s position (high third dimension), the situation is favorable. If the opposite exists (if the three dimensions are low), the situation will be very unfavorable for the leader. Fiedler concluded through his research that the favorableness of the situation in combination with the leadership style determines effectiveness.
        Through the analysis of research findings from all types of situations, Fiedler was able to discover that under very favorable and very unfavorable situations, the task-directed, or hard-nosed and authoritarian, type of leader was most effective. However, when the situation was only moderately favorable or unfavorable (the intermediate range of favorableness), the human-oriented or democratic type of leader was most effective. Figure 13.1 summarizes this relationship between leadership style and the favorableness of the situation.
    Why is the task-directed leader successful in very favorable situations? Fiedler offered the following explanation:

In the very favorable conditions in which the leader has power, informal backing, and a relatively well-structured task, the group is ready to be directed, and the group expects to be told what to do. Consider the captain of an airliner in its final landing approach. We would hardly want him to turn to his crew for a discussion on how to land.

As an example of why the task-oriented leader is successful in a highly unfavorable situation, Fiedler cited

the disliked chairman of a volunteer committee which is asked to plan the office picnic on a beautiful Sunday. If the leader asks too many questions about what the group ought to do or how he should proceed, he is likely to be told that “we ought to go home.”

The leader who makes a wrong decision in this highly unfavorable type of situation is probably better off than the leader who makes no decision at all. In essence, what Fiedler’s model suggests is that in highly unfavorable situations, the effective leader takes charge and makes the decisions that need to be made to accomplish the task without asking for input or trying to keep everyone happy.
        Figure 13.1 shows that the human-oriented, democratic leader is effective in the intermediate range of favorableness. An example of such situations is the typical committee or unit. In these situations, the leader may not be wholly accepted by the other members of the group, the task may not be completely structured, and some authority and power may be granted to the leader. Under such a relatively but not extremely unfavorable situation, the model predicts that a human-oriented, democratic type of leader will be most effective. The same would be true of a moderately favorable situation. Such moderately unfavorable or favorable situations are most common for supervisors and managers. The implication is that in general the human-oriented, democratic style of leadership would be most effective in managing human resources in the large majority of organizational situations.

Research Support for the Contingency Model
As is true of any widely publicized theoretical development, Fiedler’s model has stimulated a great deal of research over the years. Not surprisingly, the results are mixed and a controversy has been generated. Fiedler and his students have provided almost all the support for the model over the years. For example, to defend the validity of his theory, he cited 30 studies in a wide variety of teams and organizations (Navy teams, chemical research teams, shop departments, supermarkets, heavy machinery plant departments, engineering groups, hospital wards, public health teams, and others) and concluded that “the theory is highly predictive and that the relations obtained in the validation studies are almost identical to those obtained in the original studies.” With one exception, which Fiedler explains away, he maintains that the model correctly predicted the correlations that should exist between the leader’s style and performance in relation to the identified favorableness of the situation. As predicted, his studies showed that in very unfavorable and very favorable situations, the task-oriented leader performs best. In moderately favorable and moderately unfavorable situations, the human-oriented leader was more effective. Although Fiedler recognized that there was indeed criticism of his conclusions, he maintained that “methodologically sound validation studies have on the whole provided substantial support for the theory.” Meta-analytic investigations of the predictions of the model have yielded a whole range of support, mixed results, and nonsupport.

Fiedler’s Contingency Theory in Perspective
Overall, few would argue that Fiedler provided one of the major breakthroughs for leadership theory, research, and practice. Although some of the criticism cannot be ignored, there are several reasons that Fiedler’s model made a historically important contribution:

1. It was the first highly visible leadership theory to present the contingency approach, thus giving widespread attention to the important role that the situation or context plays in leadership.

2. It also emphasized the importance of the interaction between the situation and the leader’s characteristics in determining leader effectiveness.

3. It stimulated a great deal of research, including tests of its predictions and attempts to improve on the model, and inspired the formulation of alternative contingency theories.

Figure 13.1


The other widely recognized theoretical development from a contingency approach is the path-goal theory derived from the expectancy framework of motivation theory. Although Georgopoulos and his colleagues at the University of Michigan’s Institute for Social Research used path-goal CONCEPTS AND TERMINOLOGY many years ago for analyzing the impact of leadership on performance, the recognized development is usually attributed to Martin Evans and Robert House, who at about the same time wrote separate papers on the subject. In essence, the path-goal theory attempts to explain the impact that leader behavior has on associate motivation, satisfaction, and performance. The House version of the theory incorporates four major types, or styles, of leadership.Briefly summarized, these are:

1. Directive leadership. This style is similar to that of the Lippitt and White authoritarian leader. Associates know exactly what is expected of them, and the leader gives specific directions. There is no participation by subordinates.

2. Supportive leadership. The leader is friendly and approachable and shows a genuine concern for associates.

3. Participative leadership. The leader asks for and uses suggestions from associates but still makes the decisions.

4. Achievement-oriented leadership. The leader sets challenging goals for associates and shows confidence that they will attain these goals and perform well.

This path-goal theory—and here is how it differs in one respect from Fiedler’s contingency model—suggests that these various styles can be and actually are used by the same leader in different situations. Two of the situational factors that have been identified are the personal characteristics of associates and the environmental pressures and demands facing associates. With respect to the first situational factor, the theory asserts:

Leader behavior will be acceptable to subordinates to the extent that the subordinates see such behavior as either an immediate source of satisfaction or as instrumental to future satisfaction.

    And with respect to the second situational factor, the theory states:

Leader behavior will be motivational (e.g., will increase subordinate effort) to the extent that (1) it makes satisfaction of subordinate needs contingent on effective performance, and (2) it complements the environment of subordinates by providing the coaching, guidance, support, and rewards which are necessary for effective performance and which may otherwise be lacking in subordinates or in their environment.

Using one of the four styles contingent on the situational factors as outlined, the leader attempts to influence associates’ perceptions and motivate them, which in turn leads to their role clarity, goal expectancies, satisfaction, and performance. This is specifically accomplished by the leader as follows:

1. Recognizing and/or arousing associates’ needs for outcomes over which the leader has some control

2. Increasing personal payoffs to associates for work-goal attainment

3. Making the path to those payoffs easier to travel by coaching and direction

4. Helping associates clarify expectancies

5. Reducing frustrating barriers

6. Increasing the opportunities for personal satisfaction contingent on effective performance

In other words, by doing the preceding, the leader attempts to make the path to associates’ goals as smooth as possible. But to accomplish this path-goal facilitation, the leader must use the appropriate style contingent on the situational variables present. Figure 13.2 summarizes this path-goal approach.
     As happened with the Expectancy Theory of motivation, there was a surge of research on the path-goal theory of leadership. However, the research concentrated only on parts of the theory rather than on the entire theory. A sampling of the research findings indicated the following:

1. Studies of seven organizations found that leader directiveness was (a) positively related to satisfactions and expectancies of associates engaged in ambiguous tasks and (b) negatively related to satisfactions and expectancies of associates engaged in clear tasks.
2. Studies involving 10 different samples of employees found that supportive leadership had its most positive effect on satisfaction for associates who work on stressful, frustrating, or dissatisfying tasks.
3. In a major study in a manufacturing organization, it was found that in nonrepetitive, ego-involving tasks, employees were more satisfied under participative leaders than under nonparticipative leaders.
4. In three separate organizations it was found that for employees performing ambiguous, nonrepetitive tasks, the higher the achievement orientation of the leader, the more associates were confident that their efforts would pay off in effective performance.

        Other reviews of the research on the path-goal theory are not as supportive as the preceding. For example, Schriesheim and DeNisi note that only a few hypotheses have really been drawn from the theory, which means that the theory may be incapable of generating meaningful predictions. However, a comprehensive review of 48 studies demonstrated that the mixed results of the individual studies, when cumulated, were transformed into support for path-goal theory.
        Overall, the path-goal theory, like the other traditional theories presented in this section, provide a theoretical and research foundation for the better understanding of leadership. One analysis concluded that leaders will be perceived most favorably by their associates, and succeed in exerting most influence over them, when they behave in ways that closely match (1) the needs and values of associates and (2) the requirements of a specific work situation. In other words, the path-goal theory, like the expectancy theory in work motivation, can help in understanding the complexities of the leadership process.

Figure 13.2



Charismatic leadership is a throwback to the old conception of leaders as being those who “by the force of their personal abilities are capable of having profound and extraordinary effects on followers.” Although the charismatic concept, or charisma, goes as far back as the ancient Greeks and is cited in the Bible, its modern development is often attributed to the work of Robert House. On the basis of the analysis of political and religious leaders, House suggests that charismatic leaders are characterized by self-confidence and confidence in their associates, high expectations for associates, ideological vision, and the use of personal example. Followers of charismatic leaders identify with the leader and the mission of the leader, exhibit extreme loyalty to and confidence in the leader, emulate the leader’s values and behavior, and derive self-esteem from their relationship with the leader. Bass has extended the profile of charismatic leaders to include superior debating and persuasive skills as well as technical expertise and the fostering of attitudinal, behavioral, and emotional changes in their followers. A Fortune article humorously describes a manager with charisma as follows:

He attended some middling college. Doesn’t have an MBA. But he has an aura. He persuades people—subordinates, peers, customers, even the S.O.B. you both work for—to do things they’d rather not. People charge over the hill for him. Run through fire. Walk barefoot on broken glass. He doesn’t demand attention, he commands it.

Because of the effects that charismatic leaders have on followers, the theory predicts that charismatic leaders will produce in followers performance beyond expectations as well as strong commitment to the leader and his or her mission. Research indicates that the impact of such charismatic leaders will be enhanced when the followers exhibit higher levels of self-awareness and self-monitoring, especially when observing the charismatic leaders’ behaviors and activities and when operating in a social network. House and his colleagues provide some support for charismatic theory and research finds a positive effect on desirable outcomes such as cooperation and motivation, and recent conceptualization proposing that alternative forms (personalized versus socialized) are relevant to successful implementation of Mergers and Acquisitions. However, as with the other leadership theories, complexities are found and more research is needed. For example, one study that assessed charismatic leader behaviors, individual level correlates, and unit-level correlates (outcomes) in the military yielded only limited support for the theory’s propositions and led the researchers to conclude that greater sensitivity to multiple constituencies of leaders is needed in theories and studies focused on Charismatic Leadership. Also, extensions of the theory are being proposed. For example, Conger and Kanungo treat charisma as an attributional phenomenon and propose that it varies with the situation. Leader traits that foster charismatic attributions include self-confidence, impression-management skills, social sensitivity, and empathy. Situations that promote charismatic leadership include a crisis requiring dramatic change or followers who are very dissatisfied with the status quo. For example, a study in a university setting revealed a situation in which a charismatic leader was able to successfully implement a technical change, but at the same time suffered through major political turmoil, which appeared to be side effects of the technical change. This suggests that studies of charismatic leadership must be considered in the context in which the leader operates, and the nature of the task or work being performed should be included in the analysis.
          Included in the extensions of charismatic leadership is also the recognition of a dark side. Charismatic leaders tend to be portrayed as wonderful heroes, but as Table 13.3 shows, there can also be unethical characteristics associated with charismatic leaders. With regard to meeting the challenge of being ethical, it has been noted that charismatic leaders

deserve this label only if they create transformations in their organizations so that members are motivated to follow them and to seek organization objectives not simply because they are ordered to do so, and not merely because they calculate that such compliance is in their selfinterest, but because they voluntarily identify with the organization, its standards of conduct and willingly seek to fulfill its purpose.

This transformation idea is also picked up by Bass, who suggests that charismatic leadership is really just a component of the broader-based Transformational Leadership.

Table 13.3


Many years ago James MacGregor Burns identified two types of political leadership: transactional and transformational. The more traditional Transactional Leadership involves an exchange relationship between leaders and followers, but transformational leadership is based more on leaders’ shifting the values, beliefs, and needs of their followers. Table 13.4 summarizes the characteristics and approaches of transactional versus transformational leaders. More recently, the “charisma” characteristic of transformational leadership has been changed to “idealized influence.” This was done to not confuse transformational with charismatic leadership, which Bass treats as different theories. Although there are a number of contrasts between the two theories, the major differentiators are how followers are treated. Key to transformational leaders is that they seek to empower and elevate followers (i.e., develop followers into leaders) while charismatic leaders may try to keep followers weak and dependent on them (i.e., instill personal loyalty to the leader rather than developing them to attain ideals).
      In contrast to transactional leaders that behave in one of the ways shown in Table 13.4, Avolio notes that transformational leaders characterized by idealized leadership, inspiring leadership, intellectual stimulation, and individualized consideration represent a cluster of interrelated styles aimed at the following:

1. Changing situations for the better
2. Developing followers into leaders
3. Overhauling organizations to provide them with new strategic directions
4. Inspiring people by providing an energizing vision and high ideal for moral and ethical conduct

      On the basis of his research findings, Bass concludes that in many instances (such as relying on passive management by exception), transactional leadership is a prescription for mediocrity and that transformational leadership leads to superior performance in organizations facing demands for renewal and change. He suggests that fostering transformational leadership through policies of Recruitment, selection, promotion, training, and development will pay off in the health, well-being, and effective performance of today’s organizations. A meta-analysis of 39 studies found that the transformational behaviors of charisma (idealized influence), individualized consideration, and intellectual stimulation were related to leadership effectiveness in most studies, but, except for the contingent reward behaviors, the transactional leadership styles did not enhance leadership effectiveness, and this more positive impact of transformational over transactional leadership has held through the years. For example, a recent meta-analysis of 87 studies found transformational leadership related (.44) to the composite of desired outcomes (follower job satisfaction, follower leader satisfaction, follower motivation, leader job performance, group or organizational performance and rated leader effectiveness). However, in this meta-analysis, contingent reward transactional leadership also related (.39) to the same composite of outcomes, and transformational leadership failed to significantly predict leader job performance.
         Most of the research on transformational leadership to date has relied on Bass and Avolio’s MLQ (Multifactor Leadership Questionnaire) or qualitative research that simply describes leaders through interviews. Examples of the latter were the interviews with top executives of major companies conducted by Tichy and Devanna. They found that effective transformational leaders share the following characteristics:

1. They identify themselves as change agents.
2. They are courageous.
3. They believe in people.
4. They are value driven.
5. They are lifelong learners.
6. They have the ability to deal with complexity, ambiguity, and uncertainty.
7. They are visionaries.

      Increasing empirical research has supported the transformational leadership characteristics. For example, field studies have shown that transformational leaders more frequently employ legitimating tactics and engender higher levels of identification and internalization, have better performance and develop their followers. Recent studies are refining these general findings. For example, in a study comparing male and female sales managers, females were inclined to form unique relationships with each of their individual subordinates that were independent of their group memberships, suggesting transformational and contingent reward patterns that were somewhat different from their male counterparts. In other studies, transformational leadership mediated by leader-member exchange produced effects on followers’ performance and organizational citizenship behaviors (OCBs). Also, the relationship transformational leadership and OCBs were found to be moderated by perceptions of procedural justice and trust, and extraversion and agreeableness of the “Big Five” personality traits. Another recent study found ones’ emotion and personality contributed to transformational Leadership Behavior. Also, transformational leadership exhibited more Moral reasoning and has implications for ethical concerns. A recent study got back to refining the impact of transformational leadership on performance by finding that one’s identification with the work unit, self-efficacy and means efficacy (confidence in the tools and other support needed to get the job done) were mediators.Conceptual analysis also indicates that contextual factors may influence receptivity to transformational leadership tactics, and therefore they should be considered and accounted for when research is being conducted. In addition, other theories gained attention to help explain the complex process of leadership.

Table 13.4


Because of dissatisfaction with the progress of leadership theory and research in explaining and predicting the effects of leader behavior on performance outcomes, some of the basic assumptions about the importance of leadership per se have been challenged over the years. One alternative approach that received attention proposed that there may be certain “substitutes” for leadership that make leader behavior unnecessary and redundant, and “neutralizers” that prevent the leader from behaving in a certain way or that counteract the behavior. These substitutes or neutralizers can be found in subordinate, task, and organization characteristics. Figure 13.3 gives specific examples of possible substitutes and neutralizers according to supportive/relationship leadership and instrumental/task leadership.
          As shown, employee experience, ability, and training may substitute for instrumental/ task leadership. For example, craftspersons or professionals such as accountants or software engineers may have so much experience, ability, and training that they do not need instrumental/task leadership to perform well and be satisfied. Those employees who don’t particularly care about organizational rewards (for example, professors or musicians) will neutralize both supportive/relationship and instrumental/task leadership attempts. Tasks that are highly structured and automatically provide feedback substitute for instrumental/ task leadership, and those that are intrinsically satisfying (for example, teaching) do not need supportive/relationship leadership. There are also a number of organizational characteristics that substitute for or neutralize leadership.
         There has been further analysis of the leader substitutes concept, and Kerr and Jermier have provided some empirical support from field studies of police officers. They found that substitutes such as feedback from the task being performed had more impact on certain job-related activities than leader behaviors did. Other studies have also been interpreted (post hoc) to support organizational characteristics such as formalization as leader substitutes. More recent direct tests have yielded mixed results. One study using hospital personnel with a wide variety of skills and backgrounds and in a wide variety of professions found several potential substitutes to predict subordinate satisfaction and commitment, but only one of the single substitutes (organizational formalization) rendered leadership impossible and/or unnecessary. A follow-up study found that worker professionalism was an important moderator variable. It also found that professionals differed from nonprofessionals in that intrinsically satisfying work tasks and importance placed on organizational rewards were strong substitutes for leaders’ support.
       The substitutes theory tries to point out that some things are beyond leaders’ control; leaders do not have mystical powers over people. The situation or context plays a role. By the same token, recent research testing the substitutes for leadership theory was generally not supportive and demonstrated that leadership does matter. In other words, the substitutes idea does not negate leadership; but it may put a more realistic boundary on what leadership is capable of achieving from followers. Some styles, behaviors, activities, and skills of leadership are more effective than others.

Figure 13.3



Although there are a number of newly emerging theories such as Servant Leadership, political leadership, contextual leadership, e-leadership, primal leadership, relational leadership, positive leadership, shared leadership, and responsible leadership, in these times of unprecedented challenges facing organizational leaders, we (Avolio and Luthans and our colleagues working with the Leadership Institute at the University of Nebraska) believe that authentic leadership is a needed approach. Drawing from Luthans’s work on positive organizational behavior and psychological capital, and Avolio’s work on transformational and full range leadership, we have recently proposed a specific model of authentic leadership development.
Authenticity has its roots in ancient Greek philosophy (“To thine own self be true”) and descriptive words include genuine, transparent, reliable, trustworthy, real, and veritable. Positive psychologists refer to authenticity as both owning one’s personal experiences (thoughts, emotions, or beliefs, “the real me inside”) and acting in accord with the true self (behaving and expressing what you really think and believe). We specifically define authentic leadership in organizations as:

A process that draws from both positive psychological capacities and a highly developed organizational context, which results in both greater self-awareness and self-regulated positive behaviors on the part of leaders and associates, fostering positive self-development. The authentic leader is confident, hopeful, optimistic, resilient, transparent, moral/ethical, futureoriented, and gives priority to developing associates to be leaders.

The concept of authentic leadership is more on a continuum, rather than just being dichotomous. Also, although we recognize authentic leaders draw from their genetic endowment and life experience, similar to positive organizational behavior (POB) capacities or psychological capital, authentic leadership is considered to be statelike and thus open to development and change. Historically important leaders such as Gandhi, Eleanor Roosevelt, and more recently Nelson Mandela would be considered authentic leaders by our definition, but so would day-to-day managers and leaders in all types and levels of organizations who know and are true to themselves and to their people, who do “the right thing,” and who have sustainable effective performance in their area of responsibility, unit, and overall organization.
         Although the term authentic leadership has been used in the practitioner-oriented popular literature, this proposed theory is the first to treat leadership as both a developmental process and product centered on authenticity. Figure 13.4 depicts this authentic leadership development process and product. As shown, the authentic leadership process involves antecedent-positive psychological capacities and positive organizational context leading to positive self-development and the product of the authentic leader. In other words, this developmental approach to leadership focuses on the positive (both personal and contextual) in getting to know and regulate one’s self. The outcomes of authentic leadership are positive psychological capital (confidence, hope, optimism, and resiliency) and transparency, moral/ethical behavior, future-orientation, and building associates.
            Even though there is considerable indirect research support for this theoretical model of authentic leadership coming from positive organizational behavior and transformational leadership, the theory building and direct research testing the model is still emerging, but a measure has recently been developed and validated.  Only time will tell; but this and other new leadership theories seem needed to help meet the daunting challenges facing organizational leaders now and in the future.

Figure 13.4


Leadership takes on added significance in a global economy. As leadership guru Warren Bennis noted: “Given the nature and constancy of change and the transnational challenges facing American business leadership, the key to making the right choices will come from understanding and embodying the leadership qualities necessary to succeed in the volatile and mercurial global economy.” Research to date reveals both similarities and differences when leadership activities and styles are examined across cultures. In their classic study, Haire, Ghiselli, and Porter studied managerial attitudes regarding different leadership styles in 14 countries. National groupings alone explained 28 percent of the variance in managerial attitudes. Later research revealed that the degree of participation used by managers was different across eight countries. In another study conducted by the author (Luthans) and colleagues, participative management techniques were actually ineffective in a Russian factory. Further, results from the author’s (Luthans) Real Managers Study were basically replicated in a Russian factory. In a manner similar to U.S. managers studied (although the relative frequencies were a little different), the Russian managers were observed to perform, in order, traditional management, communication, human resources, and networking activities. Also, as was the case with the U.S. managers studied, the degree of networking activities conducted by Russian managers was related to their success levels within the organization. Still, the relationship between the activities of various Russian managers and their subsequent levels of effectiveness was similar, but less clear. In other words, there are a number of factors that potentially contribute to differences in effective leader processes across cultures. Some that have been studied include personal values, the manager’s background, and interpersonal skills. Personal Values The personal values held by a manager shape his or her perception of a situation, influence the analysis of alternative solutions to a problem, and affect the ultimate decision made by the leader. At the same time, the personal values of followers influence their leader, and these values are different across cultures. A study of similar U.S.-owned manufacturing plants located in five different cultures (Italian, Mexican, Spanish, United States, and British) revealed that the overall leadership approaches of the host-country nationals reflected the expectations of the local culture and workforce. Backgrounds of the Managers U.S. managers come from all economic backgrounds—lower, middle, and upper class. Although most are college educated, there is no guarantee that attending a given school will lead to success, as promotion is often based on performance. Whereas degrees from prestigious schools may offer a distinct advantage, U.S. managers come from a wide variety of colleges. The same may not be true in other countries. For example, in France managers are traditionally chosen from the graduates of the grandes ecoles. In Japan, graduates of prestigious schools have much better chances to become top managers in the larger corporations, and in Korea many top business leaders are educated in the United States. Besides educational background, class and family status also can have an influence. U.S. managers come from all classes, but the same is not true in other countries. Family name and class are important in France. In India, it is common to accept the authority of elders, and this is revealed through little delegation of authority in many companies. In Scandinavian countries, however, differing family patterns are reflected in participatory Decision-Making Styles and the routine delegation of authority by leaders. Interpersonal Skills There is considerable evidence that managers differ across cultures in their interpersonal styles and skills. Leaders vary in their views of rules and procedures, deference to authority, levels of dependence and independence, use of objectivity versus intuition, willingness to compromise, and other interpersonal tactics. A U.S. supervisor on an oil rig in Indonesia learned this lesson the hard way. In a moment of anger, he shouted at his timekeeper to take the next boat to shore. Immediately, a mob of outraged Indonesian coworkers grabbed fire axes and went after the supervisor. He escaped by barricading himself in his quarters. The leadership lesson this American learned was: never berate an Indonesian in public. Even transformational and transactional tactics used by leaders may vary in their levels of success in differing cultures. As these research studies reviewed indicate, there is reason to believe that cultural issues in leadership should be studied to reveal both differences between cultures and specific within-country practices that will help expatriate leaders succeed. The accompanying OB in Action shows how communication will differ across cultures. Today’s global leaders need to recognize such differences. The next step in the process is to systematize the study of leadership across cultures to build contingency models similar to what has been done with international human resource management.


In recent years, a major international research project under the general direction of Robert House, called Global Leadership and Organizational Behavior Effectiveness, or GLOBE, started publishing its findings. The meta-goal of the GLOBE program is to develop, over time, an empirically based theory to describe, understand, and predict the impact of cultural variables on leadership, organizational processes, and the effectiveness of the leader and the processes. For over a decade, 170 country-based coinvestigators (CCIs) gathered data from 18,000 managers from 62 countries. The CCIs were responsible for leading the study in the specific culture in which each had expertise.
      A major goal of the GLOBE project was to develop societal and organizational measures of culture and leader attributes that were appropriate to use across all cultures. The GLOBE research indicated nine dimensions of cultures that differentiate Societies and organizations. These identified cultural dimensions are:

1. Power distance, or the degree to which members of a collective expect power to be distributed equally

2. Uncertainty avoidance, which is the extent a society, organization, or groups rely on norms, rules, and procedures to alleviate the unpredictability of future events

3. Humane orientation, reflected in the degree to which a collective encourages and rewards individuals for being fair, altruistic, generous, caring, and kind to others

4. Institutional Collectivism, described as the degree to which organizational and societal institutional practices encourage and reward the collective distribution of resources and collective actions

5. In-Group Collectivism, which is the degree to which individuals express pride, loyalty, and cohesiveness in their organizations or families

6. Assertiveness, defined as the degree to which individuals are assertive, confrontational, and aggressive in their relationships with others

7. Gender egalitarianism, expressed as the degree a collective minimizes gender inequality

8. Future orientation, or the extent to which individuals engage in future-oriented behaviors such as delaying gratification, planning, and investing in the future

9. Performance orientation, suggested by the degree to which a collective encourages and rewards group members for Performance Improvement and excellence

  The first six dimensions were originally defined by Hofstede. One dimension Hofstede called “masculinity” has been relabeled as two constructs, assertiveness and gender egalitarianism, by the GLOBE researchers. Following the development and validation of the scale used to measure leader and cultural variables, studies were conducted to empirically assess the psychometric properties of the dimensions that had been established.
    The second phase of the program was a further assessment of the leader and cultural scales. Unobtrusive measures were created to identify the latent constructs, manifest indicators, and qualitative indicators that could be used to assess the nine cultural dimensions, nine organizational practices, organizational contingencies including technology, the environment, and the size of the organization, plus societal culturally endorsed implicit leadership theories. In addition, hypotheses were developed regarding the relationships among various societal dimensions, organizational dimensions, and the culturally endorsed implicit theories that had been identified.
     Phase three of the project was designed to study Organizational culture along with measures of leader and work-unit effectiveness, as well as individual cognitive, emotional, and evaluative responses to leader behaviors. The goal is to study leader behaviors within organizations and cultures longitudinally.
    Phase four is based on phase three, in which universally perceived behaviors that impede or facilitate outstanding leadership were identified. Also, phase three is oriented toward identifying actual leader practices and universal organizational practices leading to positive or negative cognitive, affective, and performance consequences. Further, efforts were made to identify those perceived behaviors and practices that are culture specific. The researchers’ goal in phase four was to answer the following questions:

1. Are there any universally effective leader behaviors?
2. What are the effects of violating strongly held culturally endorsed preferences for leader behaviors?
3. What types of consistent specific preferences for leader behaviors are present across cultures?

   Some of the findings by the GLOBE team suggest 21 primary and then six leader attributes and behaviors that are viewed as contributing to leadership in various cultures. These six are summarized as follows:

1. Charismatic/Value-Base—the ability to inspire, to motivate, and to expect high performance outcomes from others on the basis of core beliefs.

2. Team-Oriented—effective team building and implementation of a common purpose/ goal among team members.

3. Participative—the degree to which managers/leaders involve others in making and implementing decisions.

4. Humane-Oriented—supportive, considerate, compassionate, and generous leadership.

5. Autonomous—independent and individualistic leadership.

6. Self-Protective—ensuring the safety and security of the individual, it tends to be an approach that is self-centered and face saving.

The GLOBE researchers found that these six leadership dimensions differed in terms of their desirability and effectiveness in various cultures. For example, the charismatic/valuebased, team-oriented, and participative are generally reported to contribute to outstanding leadership, but each is found more often in specific cultures (e.g., charismatic in Anglo, team in Latin American, and participative in Germanic Europe). On the other hand, humane leadership is felt to be neutral in some cultures but moderately contribute to outstanding leadership in others; autonomous leadership is reported to range from impeding outstanding leadership to slightly facilitating it; and self-protective leadership is generally reported to impede outstanding leadership. Again, each of these types of leadership is found to different degrees in various cultures (e.g., humane in Southern Asia, autonomous in Eastern Europe, and self-protective in Southern Asia).
      The general findings of the GLOBE project are that cultural dimensions do exist that can be identified and measured. Cultural Differences can be studied through etic (across cultures) or emic (within cultures, or country-specific information) approaches. Cultural differences strongly influence the ways in which people think about their leaders as well as societal norms that exist concerning the status, influence, and the privileges granted to leaders. Although work remains to complete the project, the findings so far indicate a great deal of promise for furthering understanding of how leaders can effectively operate in various cultures.
     Other smaller international research efforts have also been conducted. For example, Bass examined the nature of the transactional-transformational leadership paradigm across national boundaries. Also, Church and Wacalawski investigated the relationship between leader style (transformational versus transactional) and subsequent organizational practices and outcomes, which supports the findings presented in the GLOBE report. And finally, still another study suggests that there are indeed leadership concepts that are culturally endorsed, in which similar cultures share similar leadership concepts. Clearly, the study of leadership across cultures is a growing and important body of knowledge for the leadership field.