Important Leadership Theories in Management

Leadership theories depend on the qualities that a leader inherits or displays in managing her/his team. Some of the theories of leadership are:

  • Great Man Theory/Trait Theory
  • Behavioural Theories
  • Contingency/Situational Theories
  • Transactional Theory of Leadership
  • Transformational Theory of Leadership

Great Man Theory/Trait Theory of Leadership

The trait theories of leadership consider personal qualities and characteristics that differentiate leaders from non-leaders. The great man theory was originally proposed by Thomas Carlyle in 1949 and the assumption behind this theory is that “great leaders will arise, when there is great need”. The assumption behind trait theory was that “leaders are born and not made”.

Behavioural Leadership Theories

Behavioural theories assume that specific behavioural patterns of leaders can be acquired through learning and experience.The behavioural theories concentrate on “what the leaders do”.

Ohio State Studies

The study on behavioural theories was made by Ohio State University in 1945 by E.A. Fleishman, E.F. Harris and H.E. Burtt. It is also known as “two-factor conceptualization”.It narrowed the leadership behaviours into two categories,:

  1. Initiating structure: Initiating structure refers to the extent to which a leader is likely to define and structure his or her role and those of employees in the search for goal attainment. A leader with initiating structure is generally task oriented, with focus on performance of employees and meeting of deadlines
  2. Consideration: As per consideration theory, a leader pays more attention to the employee of the organization rather than the task and shows concern for the well-being, comfort and satisfaction of employees. That is, a leader focuses on the relationships that are characterised by mutual trust, respect for employees‟ ideas, and regard for their feelings

University of Michigan Studies

Michigan Studies also identified a twofactor component namely:

  1. Employee-Oriented Leader: The concern of the employee-oriented leaders were more on the interpersonal relations with the employees and such leaders paid more attention on the needs of the employees and accepted the individual differences among members.
  2. Production-Oriented Leader: The production oriented-leaders paid attention to the technical aspects of the job or the tasks assigned to the employees, rather than on employees. Such leaders gave least importance to the group members, and regarded the employees as only a means to achieve the ends, that is, the goals of an organization.

Leadership Grid Theory

The Managerial Grid theory of leadership, also known as‘Leadership Grid Theory’ was proposed by Robert Blake and Jane Mouton in 1964.The grid is a nine-by-nine matrix which outlines 81 different styles of leadership. The grid has 9 possible positions along each axis creating 81 different positions in which the leader’s style may fall. This theory of leadership is also based on the styles of “concern for people” and “concern for production” as depicted in grid below:

Managerial Grid - Leadership theories

Through the Managerial Grid, 5 kinds of Leadership Style are identified as follows:

  1. Impoverished:In this style there is low concern for people and production (1 by 1).
  2. Country Club:In this style, the concern for production is low but for people is high (1 by 9)
  3. Task:In this style there is high concern for production and low concern for people (9 by 1)
  4. Middle of the Road:In this style there is moderate concern for both the production and the people (5 by 5)
  5. Team:In this style there is high concern for both the people and production (9 by 9).

Contingency/Situational Theories

The effectiveness of leadership also depends upon situations. The success of a leader does not depend upon the qualities, traits and behaviour of a leader alone because same style of functioning may not be suitable for different situations. The situational theory views leadership in terms of a dynamic interaction between a number of situational variables like the leader, the followers, the task situation, the environment, etc.

Some of the important theories on situational context are:

  • Fiedler’s model
  • Hersey and Blanchard’s
  • Situational theory
  • Leader-Member Exchange theory
  • Path-Goal theory
  • Leader-Participation model

Fiedler model

This theory is developed by Fred Fiedler in 1967. The basic premise behind this theory is that, effective performance of an organization or a group of people in an organization highly depend upon the style adopted by a leader and the degree to which a situation gives control to the leader.

Fiedler developed a “Least-Preferred Coworker” (LPC) scale, in which the leaders were asked to give their preference on the employee with whom they have least preference to work with.

Fiedler has identified three situational factors:

  • Leader member relations: The degree of confidence, trust and respect that members have on their leader. The degree varies from good to poor.
  • Task structure: The degree to which the job assignments are structured or unstructured. The degree varies from high to low.
  • Position power: The degree of influence a leader has over power variables such as hiring, firing, discipline, promotions, and salary increases. The degree varies from strong to weak.

Fiedler model identifies 8 different kinds of situations or categories in which a leader can identify her/his position:

fiedler model of leadership

Fiedler states that a task oriented leader performs better in situations that are very favourable to him and in situations that are very unfavourable. Thus when faced with a Category I, II, III, VII or VIII situation, task-oriented leaders perform better. Relationship-oriented leaders perform better in moderately favourable situations – categories IV through VII

One of the major drawbacks in Fiedler model is that the style adopted by a particular leader is fixed.

Cognitive Resource Theory

Cognitive Resource Theory was conceptualized by Fiedler and his associate Joe Garcia in 1990. This theory assumes that stress is the enemy of rationality and a leader cannot think in a logical and analytical manner, if she/he is under high level of stress. The importance of a leader’s intelligence and experience to effectiveness differs under low and high stress situations. A leader’s intellectual ability correlates positively with performance under low stress but negatively under high stress. On the other hand, a leader’s experience correlates negatively with performance under low stress but positively under high stress. Therefore, the level of stress in a situation, determines whether an individual’s intelligence or experience will contribute to leadership performance.

Hersey and Blanchard’s Situational Theory

Situational Leadership Theory (SLT) was put forward by Paul Hersey and Ken Blanchard. In this theory the focus is laid on the followers and the readiness that followers show in accepting a leadership. The theory assumes that it is the followers who accept or reject a leader and thus, effectiveness of a leader also depends on their followers. By readiness the meaning is the extent to which people have the ability and willingness to accomplish a specific task set by the leader.

According to this theory, there are four types of leadership behaviors:

  1. Participating Style: If followers are able and unwilling to do the task, the leader needs to use a supportive and participative style.
  2. Selling Style: If followers are unable and willing to do the task, the leader needs to display high task orientation to compensate for the follower’s lack of ability and high relationship orientation to get the followers to buy into the leader’s desire
  3. Delegating Style: If the follower is both able and willing to do the task, the leader doesn’t need to do much.
  4. Telling Style: If a follower is unable and unwilling to do a task, the leader needs to give clear and specific directions.

Hersey and Blanchard Situational Theory

Leader-Member Exchange Theory

The Leader-Member Exchange theory assumes that a leader cannot use a fairly homogenous style with all of the people in their work unit and a leader act differently with different people and tend to have her/his “in-group”.

  • In-group: The people in the “in-group” tend to get more attention. They have the trust of the leader and also enjoy special privileges and even have an informal interaction with the leader
  • Out-group: The people in the “out-group” spend less time with the leaders. They have limited access to rewards and privileges and the leader-follower relation is based on a formal authority interactions

In general, followers in the in-group status will have higher performance ratings, lower turnover intentions, greater satisfaction with their superior, and higher overall satisfaction than the out-group

Path-Goal Theory

The Path-Goal Theory was developed by Martin Evans and Robert House in 1970-71. The basic idea behind the theory is that effective leaders clarify the path to help their followers to move forward from their current position towards achieving the work goals. It is the leader’s job to provide the followers with the information, support and other resources, necessary for them to achieve their goals.

Path-Goal theory defines four types of leadership behavior:

  • Directive Leader: A directive leader clarifies the followers of the role expected of them, schedules the work to be done and gives the needed direction or guidance as to how to accomplish tasks.
  • Supportive Leader: A supportive leader behaves in an friendly manner with the followers, and the main concern of the leader is placed on the needs of the followers, rather than on accomplishing the tasks
  • Participative Leader: A participative leader involves the followers in the consultation process and also gets the suggestions or views of the followers, before making a decision
  • Achievement-Oriented Leader: An achievement oriented leader set challenging goals for the followers and expects them to perform at their highest level

Leader-Participation Model

The Leader-Participation Model was developed by Victor Vroom and Phillip Yetton in 1973. According to this model, the three set of variables affect the performance of the leader in terms of his capacity as a decision maker, which include:

  • Quality of the decision;
  • Degree of acceptance of the decision by subordinates; and
  • Time required in making the decision

Based on these variables identified, the theory defined 5 different kinds of decision making procedures:

  1. A1: Leader takes known information and then decides alone
  2. A2: Leader gets information from followers, and then decides alone
  3. C1: Leader shares problem with followers individually, listens to ideas and then decides alone
  4. C2: Leader shares problems with followers as a group, listens to ideas and then decides alone
  5. G2: Leader shares problems with followers as a group and then seeks and accepts consensus agreement

Transactional Theory of Leadership

The transactional theory of leadership was first discussed by Max Weber in 1947 and was later developed by Bernard M Bass in 1981. Under this theory, the leaders guide or motivate their followers in the direction of established goals by clarifying role and task requirements.

Assumptions that underlie the transactional theory are:

  • People perform their best when the chain of command is definite and clear.
  • Workers are motivated by rewards and punishments.
  • Obeying the instructions and commands of the leader is the primary goal of the
  • Subordinates need to be carefully monitored to ensure that expectations are met.

The characteristic features exhibited by transactional leaders are as follows:

  • The leader links the goals of the organization to rewards and clearly specifies and expectations , provides the needed resources and set SMART (specific, measurable, attainable, realistic, and timely) goals for the subordinates
  • The leader actively monitors the performance of the subordinates, watches and searches for deviations from rules and standards, and take corrective actions to prevent mistakes
  • A leader intervenes only if standards are not met and even use punishments for poor performances
  • The leader gives an environment to subordinates, where they can take decisions. In this form, the leader himself abdicates from responsibilities and avoids making decisions, due to which the followers lack the direction.

Transformational Theory of Leadership

The transformational theory of leadership is given by Bass and Riggio. According to this theory, the leader inspires her/his followers to transcend their own self-interests for the betterment of the organization. Transformational leaders pay attention to the developmental needs and concerns of the followers, and inspire followers to give a new outlook for the old problems and thus motivate the followers towards achievement of the goals of the organization by giving them new perspective.

There are four dimensions to the transformational theory of leadership:

  • Idealized Influence (II): The leaders act as role models for their subordinates and they exhibit high morals and ethical standards. They further provide the vision and sense of mission, instill pride amidst the followers and gains respect and trust.
  • Inspirational Motivation (IM): The leaders inspire their subordinates in various ways and give meaning to their work and bring new challenges and enthusiasm. The leader expresses the organizational purposes in simple terms to the followers and has high expectations on the followers.
  • Intellectual Stimulation (IS): The leaders stimulate the intellectual ability of their followers. Through new approaches, the leaders try to stimulate the way of thinking of their subordinates and thus, raise the creativity in them and promote intelligence, rationality and problem solving skills
  • Individualized Consideration (IC): The leaders pay more attention to the individual needs of development of the subordinates so as to achieve success.

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