Organisation Behavior Topic 5

Organisation Behavior Topic 5

Leadership: Theories and styles

Leadership is the ability of a manager to induce subordinates to work with confidence and zeal. ~ Koontz and O’Donnell

Leadership is an art whereby an individual influences a group of individuals for achieving a common set of goals.

Key Characteristics:

  • Personal quality.
  • If there are no followers, there is no leadership
  • A leader must be able to influence the behaviour, attitude and beliefs of his subordinates.
  • Goal oriented.
  • Leadership styles change with circumstances.
  • Leader may not derive his influencing power from formal organisation structure. Informal leaders derive their authority from the people who are under their influence.
  • A good leader generally possesses the qualities of Emotional stability, Sound educational background, Creativity, Good communication skills, Emotional Intelligence, Self Confidence etc.

Importance of Leadership:

  • improve motivation and morale of their subordinates.
  • guide to group efforts.
  • aid to authority by influencing, inspiring and initiating action.
  • boosts the formal organisational structure.
  • promotes effective cooperation among subordinates and superiors.

Leader vs Manager


Leadership and management must go hand in hand. They are not the same thing. But they are necessarily linked, and complementary. A good manager must possess leadership qualities.


Theories of Leadership

Great Man Theory (1840s)

  • The Great Man theory assumes that the traits of leadership are intrinsic. That simply means that great leaders are born.
  • It is based on the belief was that great leaders will rise when confronted with the appropriate situation.
  • In 1860, Herbert Spencer, an English philosopher disputed the great man theory by affirming that these heroes are simply the product of their times and their actions the results of social conditions.

Trait Theory of Leadership (1930s-1940s)

  • This theory of leadership highlights the personality traits of a successful leader.
  • Personal traits or characteristics of a leader makes him different from the followers.
  • Personality traits of a successful leader include good physique, creativity and intelligence, social traits
  • Certain qualities such as intelligence, sense of responsibility, creativity and other values puts anyone in the shoes of a good leader.
  • This theory is criticized on the grounds that it does not have universal applicability, it fails to put a exhaustive list of traits and it ignores the role of other factors which the subsequent theories considered.

Behavioural Theories (1940’s – 1950’s)

  • It focuses on the behaviours of the leaders as opposed to their mental, physical or social characteristics.
  • Leadership involves an interpersonal relationship between a leader and subordinates in which the behaviour of the leader towards the subordinates constitutes the most critical element.
  • The good behaviour of the leader raises the morale, builds up confidence and spirit among the team members and the lack of good behaviour will discard him as a leader.
  • Limitations : It does not talk about what constitutes the most effective style of leadership behaviour? Moreover, a particular behaviour or action of a leader may be effective at one point of time while the same may be ineffective at some other point of time and in some other circumstances.

    Associated Theories – The Managerial Grid Model / Leadership Grid

Contingency Theories (1960’s)

  • The Contingency Leadership theory argues that there is no single way of leading and that every leadership style should be based on certain situations.
  • Leader are more likely to express their leadership when they feel that their followers will be responsive.

    Associated Theories – Fiedler’s contingency theory, Hersey-Blanchard Situational Leadership Theory, Path-goal theory.

Transactional leadership Theories (1970’s)

  • Characterized by a transaction made between the leader and the followers.
  • It is based in the notion that a leader’s job is to create structures that make it abundantly clear what is expected of his/her followers and also the consequences (i.e. rewards and punishments) for meeting or not meeting these expectations.

  • Transactional leaders are most efficient when they develop a mutual reinforcing environment, for which the individual and the organizational goals are in sync.
  • The transactional theorists state that humans in general are seeking to maximize pleasurable experiences and to diminish un-pleasurable experiences. Thus, we are more likely to associate ourselves with individuals that add to our strengths.

Transformational Leadership Theories (1970s)

  • According to this theorym leaders transform their followers through their inspirational nature and charismatic personalities.
  • Rules and regulations are flexible, guided by group norms.
  • The key in transformational leadership is for the leader to be attentive to the needs and motives of followers in an attempt to help them reach their maximum potential.
  • This theory is often discussed in contrast with transactional leadership.




Important Studies Associated with Behavioural Theories:

The behavioural theories have mainly contributed on behavioural pattern of leadership. The behavioural aspects include communication, delegation of authority, motivation, supervision etc. All these qualities in a leader can be developed through proper training and development methods.

Ohio State University Studies:

  • Conducted to know the effects of behaviour of leader on the performance and satisfaction of subordinates.
  • Identified two leadership dimensions:


1. Initiating Structure:

Implies the leader’s behaviour in distribution of work among subordinates in a well defined manner and supervision of their activities.

2. Consideration:

Implies the leaders behaviour towards his subordinates as to how he is concerned about them, his trust, friendship, respect, support, openness, warmth etc. with them.

Initiating Stucture

Consideration and initiating structure were not mutually distinct dimensions as is visible from the diagram.

Point A represents low consideration and low initiating structure. B represents high consideration and low initiating structure, C represents high consideration and high initiating structure and D represents low consideration and high initiating structure.

The Michigan Studies:

It studied the behaviour of several supervisors of factories and identified two distinct dimensions of leaderships:

(i) Production centred leadership – one who sets rigid targets and work standard, treats employees as machines and exercises close supervision.

(ii) Employee centred leadership – one who gives human treatment to employees, encourage their participation in decision making, inspires them for high performance through positive motivation and looks after their welfare.

McGregors Theory X principles are applied by production centred executive and principles of Theory Y are applied by employee centred executive.

Important Leadership Theories:

The Managerial Grid:

  • Developed by Blake and Mouton.
  • Based on Grid combining task oriented and relations oriented behaviours of leadership’s styles.


The Managerial Grid

Managerial grid recognized five different leadership styles.

  • point A i.e. (1, 1) – Impoverished Management : quite poor management having low concern for people and low concern for production.
  • point B i.e. (1, 9) – Country Club Management : high concern for people and low concern for production.
  • point C i.e. (9, 9) – Team Leadership : high concern for people and high concern for production. This exhibits the superior style of management, an ideal one. It takes employees into full confidence by showing high concern for them at the same time motivating them to get increased level of production to its highest capacity.
  • point D i.e. (9, 1) – Authority-Compliance Management : It exhibits strict attitude and very close supervision towards employees to get high level of production.
  • point E i.e. (5, 5) – Middle-of-the-Road Management : It represents moderate levels of concern for people and concern for production. It is middle path adopted by the leadership.

Fiedler’s Contingency Model:

As per this model, effectiveness of leadership depends upon three variables, leader’s position power, leader-member relations and task structure.

Leader’s Position Power i.e. degree of authority the leader holds in an organisation. This also depends upon as to degree of reward power he possesses to reward well performing subordinate.

Leader Member Relations i.e. respect a leader commands and trust and confidence he enjoys among his subordinates.

Task Structure i.e. the extent to which the task is well defined, clear and routine.

He coined the concept of Least preferred co-worker (LPC) –The employee with whom the person could work least well.

As per Fiedler’s findings, a person who describes his least preferred co-worker in a relatively favorable manner (high LPC rating) tend to be permissive, human relations oriented and considerate of the feelings of his men. But a person who describes his least preferred co-worker ( LPC) in an unfavorable manner- (low LPC rating) tends to be managing, task oriented and less concerned with the human relations aspect of the job.

High LPC managers are employee oriented and want tomaintain a good interpersonal relationship with their co-workers. They regard their close ties with employees important for their efficiency. While managers having low LPC are task oriented. They display lower priority for employees than the level of productivity.

The effective leader is one who develops good relations with his members, having high task structure and strong or stronger position power. All other combinations have moderate or poor leadership.

The theory is criticized by saying that it is uni-dimensional as it suggest relation oriented or task oriented dimension of leadership. Critics say that leadership is multidimensional. He should have combination of both qualities.

Path-Goal Model:

  • Developed by Robert House.
  • As per this model, the leader has to specify goals for the employees and clear the paths leading to the accomplishment of goals by providing essential support and guidance and rewards.
  • The theory is designed on the basis of Vroom’s expectancy theory of motivation. A leader has to motivate the subordinates by clarifying goals and paths to achieve them.
  • The essence of the theory is that the leader’s job is to use structure, support and rewards to create a work environment that helps employees accomplish the organizations goals.
  • This theory is an improvement over Fiedler’s model as it takes into account the features of subordinates and work situation as well.




Leadership depends upon each individual situation, and no single leadership style can be considered the best.

Theory is one that is based around variable leadership, depending on a variety of circumstances.

The Theory has two pillars: leadership style and the maturity level of those being led.

Leadership styles stem from four basic behaviors:

  • S-1 Telling
  • S-2 Selling
  • S-3 Participating
  • S-4 Delegating.

“Telling” behavior simply is a unidirectional flow of information from the leader to the group. Transactional leadership techniques operate here. In the “selling” behavior, the leader attempts to convince the group of that the leader should lead by providing social and emotional support to the individual being convinced. There is two-way communication, but it is clear that the leader is leading. With “participating” behavior, the leader shares decision making with the group, making the system more democratic. There is less of an emphasis on accomplishing an objective than building human relations. The fourth type of behavior in leadership style, “delegating” is reflected by parceling out tasks to group members. The leader still is in charge but there is more of an emphasis on monitoring the ones delegated with the tasks.

Four maturity levels of the group are:

  • M-1: basic incompetence or unwillingness in doing the task
  • M-2: inability to do the task but willing to do so
  • M-3: competent to do the task but do not think they can
  • M-4: the group is ready, willing, and able to do the task.


Each type of task may involve a different maturity level.

  • At a maturity level of M1, team members need to be instructed on how to do just about everything that makes up the task they are responsible for.
  • At a maturity level of M2, team members are those who are more eager to work on a job, even if they aren’t yet ready to do it correctly without the help of the leader of the group.
  • At a maturity level of M3, team members might not be able to quite get all of the job done without some help, but they can get most of the way their on their own.
  • At a maturity level of M4, team members are completely capable of handling a task and they know that they can get the job done without the help of the leader.
 This model of leadership is considered ideal as it is dynamic and flexible. The model assists in maintaining close relationship of leader and the led, facilitates professional development of subordinates and in doing so improves motivational level of followers. A leader must however remain alert and change to suitable leadership style in different situations and at different levels of progression.


  • A new theory of leadership.
  • A charismatic leader aims to get willing followers to attain organizational goals.
  • Charismatic leader have following characteristics that make them stand out as successful leaders.
(a) Vision:  sees an organization from futuristic point of view and has a great foresight to preempt problems and seek solution.
(b) Risk takers: take great amount of risk to accomplish the vision.
(c) Sensitivity to environment constraints ( shortage of raw material, competitors strategy, trend in market etc.) and follower needs.
(d) Distinct Behavioral pattern:  are supportive and employee oriented. They behave differently in different situations.
Charismatic leader influences subordinates by articulating an appealing vision. The leader then communicates high performance expectations and expresses confidence that followers can attain them. This enhances follower self-esteem and self-confidence. Next leader  sets a example for followers to imitate.
This style of leadership is more pronounced when there is a high degree of uncertainty.

Styles of Leadership

Autocratic or Authoritative Style:

  • leader centered style.
  • complete centralisation of authority in the leader.
  • tight control over employees.
  • communication is only downward which means that the managers only tell them their ideas but do not listen to the employees’ ideas.
  • Advantages: Quick Decision Making, Satisfaction of leader, Meeting of deadlines, suited for less educated & untrained employees.
  • Disadvantages: Frustration & lower morale of employees, employees turned into machines, kills initiative & innovation.

Democratic or Participative Style:

  • A leader decentralises and delegates high authority to his subordinates.
  • final decision only after consultation with the subordinates.
  • Two way communication.
  • high concern for both people and work.
  • Advantages: Improved job satisfaction and morale of the subordinates, Quality Decision Making, Reduced labour turnover, recognition to human beings.
  • Disadvantages: Time consuming, Delayed decision making.


Free Rein or Laissez Fair style:

  • Manager gives complete freedom to his subordinates.
  • least intervention by the leader.
  • free flow of communication.
  • Advantages: Job satisfaction of employees, Maximum development of employees, Motivated employees.
  • Disadvantages: Lack of guidance & support from leader, can be equated to no leadership at all, coordination problems may arise.

Comparison of three types of leadership



  1. Differentiate the key characteristics of transactional and transformational leadership. Why do most of Indian organisations need transformational leadership? How can such a leader be developed and promoted in an organisation? (2013)
  2. Explain – Path goal theory of leadership. (2011,2012)
  3. Explain – Managerial grid. (2014)
  4. What is charismatic leadership? Are charismatic leaders born or made? How do they influence followers? Discuss. (2014)
  5. Which leadership theory according to you is most apt for today’s dynamic organisations?
  6. Discuss the difference between a manager and a leader.


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