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Arts and Humanities
Chapter 11 Quiz
Terms in this set (113)
the process of transforming organizations from what they are to what the leader would have them become.
Implies dissatisfaction with the status quo, a vision of what should be, and a process for bringing about change
-it is a proactive, goal-oriented, and focused on the creation and implementation of creative vision
What is happening to many industries?
they are declining and product and market life cycles are becoming increasing compressed
argued that in a world where all dimensions of competition appear to be compressed in time and heightened in complexity, sustainable competitive advantages are no longer possible.
Three interdependent leadership activities
1. setting a direction
2. designing the organization
3. nurturing a culture dedicated to excellence and ethical behavior
Their nature is self-evident
What are leaders?
change agents whose success is measured by how effectively they formulate AND implement a strategic vision and mission.
Successful leaders must recognize the three interdependent leadership activities that must be continually reassessed for the organization to succeed
Failure of today's organizations
can be attributed to a lack of equal consideration of these three activities. The three-legged stool will collapse if one leg is missing or broken
Setting a direction
a holistic understanding of an organization's stakeholders requires an ability to scan the environment to develop a knowledge of all of the company's stakeholders and other salient environmental trends and events.
Strategic visions benefits
-a clear future direction
-a framework for the organization's mission and goals
-enhanced employee communication, participation, and commitment
Managers must come up with revolutionary visions
Almost all leaders have difficulty implementing their vision and strategies, such problems may stem from a variety of sources
-lack of understanding responsibility and accountability among managers
-reward systems that do not motivate individuals toward desired organizational goals
-inadequate or inappropriate budgeting and control systems
-insufficient mechanisms to integrate activities across the organization
Without appropriately structuring organizational activities
a firm would generally be unable to attain an overall low cost advantage by closely monitoring its costs through detailed and formalized cost and financial control procedures.
a related diversification strategy would necessitate reward systems that emphasize behavioral measures because interdependence among business units tends to be very important. In contrast, reward systems associated with unrelated diversification strategy should rely more on financial indicators of performance because business units are relatively autonomous
organizational culture can be a means to achieve this. Leaders play a key role in changing, developing, and sustaining an organization's culture but leaders can also have a detrimental effect on a firm's culture and ethics
Managers and top executives
must accept personal responsibility for developing and strengthening ethical behavior throughout the organization. They must consistently demonstrate that such behavior is central to the vision and mission of the organization. Models, corporate credos, and codes of conduct, reward and evaluation systems, and policies and procedures.
2 capabilities that mark a successful leader
1.overcoming barriers to change
2.effective use of power
barriers to change
organizations are prone to inertia and are slow to learn, adapt, and change because:
-many people have vested interests in the status quo
-personal time constraints
the design of the organization's structure, information processing, reporting relationships, and so forth impede the proper flow and evaluation of information
cause managers to look at issues from a biased or limited perspective due to their education, training, work experiences, and so forth.
conflicts arising from power relationships. The outcome of a myriad of symptoms such as vested interests, refusal to share information, conflicts over resources, conflicts between departments and divisions, and petty interpersonal differences
personal time constraints
in organizations experiencing sever price competition or retrenchment wherein managers and employees are spread thin
How do managers move an organization forward in the face of such barriers?
personal skills and organizational mechanisms.
Building a learning organizational and ethical organization provide the kind of climate within which a leader can advance the organization's aim and make progress towards its goals.
Important tools a leader has for overcoming barriers to change
personal and organizational power.
Good leaders must be on guard not to abuse power. On the other hand, successful leadership requires the measured exercise of power.
refers to a leader's ability to get things done in a way he or she wants them to be done. It is the ability to influence other people's behavior, to persuade them to do things that they otherwise would not do, and to overcome resistance and opposition. Effective exercise of power is essential for successful leadership
organizational bases of power
refer to the power that a person wields because of her formal management position.
Include: legitimate, reward, coercive, and information power
is derived from organizationally conferred decision-making authority and is exercised by virtue of a manager's position in the organization
depends on the ability of the leader or manager to confer rewards for positive behaviors or outcomes
the power a manager exercises over employees using fear of punishment for errors of omission or commission
arises from a manager's access, control, and distribution of information that is not freely available to everyone in the organization
How do organizations overcome barriers to organizational change?
work more collaboratively, inside their organization and with outsiders.
Management must lead by example and be good collaborators themselves.
One obstacle to effective collaboration is higher-level political battles.
What are the two bases of power?
organizational bases of power include
personal bases of power include
personal bases of power
a manager might also be able to influence subordinates because of his or her personality characteristics and behavior.
is a subordinate's identification with the leader. A leader's personal attributes or charisma might influence subordinates and make them devoted to that leader
the leader's expertise and knowledge. Subordinates depend for information that they need to do their jobs successfully.
successful leaders bases of power
often a combo of personal and organizational to meet the demands of a situation, such as the nature of the task, the personality characteristics of the subordinates, and the urgency of the issue. Persuasion and developing consensus often are essential
A key trait to leadership
"who leaders are" --> valuable traits that enable them to perform effectively in order to create value for their organization.
What are some successful traits of leaders?
Traits may be grouped into 3 broad sets of capabilities
1. purely technical skills (like accounting or operations research)
2. cognitive abilities (like analytical reasoning or quantitative analysis)
3. Emotional Intelligence (like self-management and managing relationships)
as the capacity for recognizing one's own emotions and those of others
-effective leaders have a higher level of EI
-EI is a better predictor of life success than IQ
Components of EI
involves a person having a deep understanding of his or her emotions, strengths, weaknesses, and drives.
Neither overly critical nor unrealistically optimistic; instead they are honest with themselves and others
Biological impulses drive our emotions. People feel bad moods and emotional impulses just as everyone else does. However, they find ways to control them and even channel them in useful ways.
Able to create an environment of trust and fairness where political behavior and infighting are sharply reduced and productivity tends to be high. People who have mastered their emotions are better able to bring about and implement change in an organization. They are less likely to panic and are able to suspend judgement, seek out information, and listen to executives explain the new program.
driven to achieve beyond expectations. Although many people are driven by external factors such as money and prestige, those with leadership potential are driven by a deeply embedded desire to achieve for the sake of achievement.
Motivated people show a passion for the work itself, such as seeking out creative challenges, a love of learning, and taking pride in a job well done. High levels of energy and are eager to explore new approaches to their work
the most easily recognized component of EI. It means thoughtfully considering an employee's feelings, along with other factors, in the process of making intelligent decisions. Empathy is particularly important in today's business environment for 3 reasons
1. increasing use of teams, 2. the rapid pace of globalization 3. the growing need to retain talent.
It enables managers to sense and understand the viewpoints of everyone around the table
Deep understanding of existence and importance of cultural and ethical differences
usually involves cross-cultural dialogue that can easily lead to miscues. Empathetic people are attuned to subtleties of body language; they can hear the message beneath the words being spoken.
particularly important to a firm in the knowledge economy when it comes to creating advantages that are sustainable. Leaders need empathy to develop and keep top talent, because when high performers leave, they take their tacit knowledge with them.
viewed as friendliness with a purpose: moving people in the direction you desire, whether that's agreement on a new marketing strategy or enthusiasm about a new product.
People will be effective at managing relationships when they can understand and control their own emotions and empathize with others' feelings. Motivation also contributes to social skill. People who are driven to achieve tend to be optimistic, even when confronted with setbacks.
A key to social skill is becoming a good listener.
Socially skilled people
Socially skilled people then to have a wide circle of acquaintances as well as a knack for finding common ground and building rapport. Noting gets done alone, and they have a network in place when the time for action comes.
Define and give hallmarks of Self-awareness
Definition: The ability to recognize and understand your moods, emotions, and drives, as well as their effect on others
-realistic self assessment
-self depreciating sense of humor
Define and give hallmarks of Self-regulation
Definition: The ability to control or redirect disruptive impulses and moods.
OR the propensity to suspend judgement-to think before acting
-trustworthiness and integrity
-comfort with ambiguity
-openness to change
Define and give hallmarks of motivation
Definition: A passion to work for reasons that go beyond money or status
OR a propensity to pursue goals with energy and persistence
-strong drive to achieve
-optimism, even in the face of failure
Define and give hallmarks of empathy
Definition: the ability to understand the emotional makeup of other people
OR skill in treating people according to their emotional reactions
-expertise in building and retaining talent
-service to clients and customers
Define and give hallmarks of social skill
Definition: Proficiency in managing relationships and building networks
OR an ability to find common ground and build rapport
-effectiveness in leading change
-expertise in building and leading teams
Drawbacks of EI
if a person has a high level of these capabilities it may become "too much of a good thing" if he or she is allowed to drive inappropriate behaviors.
Drawbacks of EI considering the flip side of benefits
1. effective leaders have empathy for others
2. effective leaders are astute judges of people
3. effective leaders are passionate about what they do, and they show it
4. effective leaders create personal connections with their people
1. effective leaders have empathy for others
must be able to make the "tough decisions". Leaders must appeal to logic and reason and acknowledge others' feelings so that people feel the decisions are correct
2. effective leaders are astute judges of people
leaders may become judgmental and overly critical about the shortcomings they perceive in others. They are likely to dismiss other people's insights, making them feel undervalued
3. effective leaders are passionate about what they do, and they show it
They may express their passion as persistence in pursing an objective or relentless focus on a valued principal
4. effective leaders create personal connections with their people
take time to engage employees individually and in groups, listening to their ideas, suggestions and concerns, and responding in ways that make people feel that their ideas are respected and appreciated. If the leader makes too many unannounced visits, it may create a culture of fear and micromanagement.
Emotional leaders must be altruistic, focused on the general welfare of the company and its employees, and highly principled. They can be manipulative, selfish, and dishonest though.
Developing competency companions and creating a learning organization
once leaders have enhanced their own competencies, they can turn their attention to building a learning organization. Such an organization is capable of adapting to change, fostering creativity, and succeeding in highly competitive markets.
a situation where the combo of two skills can generate an outcome that is significantly greater than either skill can produce on its own.
By enhancing communication skills, this highly innovative leader is more likely to be able to communicate the value of both innovative ideas she has developed and also the necessity to push innovative learning and development throughout the organization
Learning and change
typically involve the ongoing questioning of an organizations status quo or method of procedure. All individuals must be reflective. Many organizations get so caught up in carrying out their day-to-day work that they rarely, stop to think objectively about themselves and their business. They often fail to ask the probing questions, to refresh their strategies, or to reengineer their work processes.
To adapt to change, foster creativity, and remain competitive, leaders must build learning organizations
Leveraging a leader's strengths
most effective leaders have at least one competency that makes them great and eventually indispensable. It makes little sense to continually work on already great qualities. Instead, leaders can benefit form identifying and developing complementary strengths. This may lead to substantially greater leadership effectiveness than finding increasingly rare opportunities to improve an already outstanding competency
Straightforward four-step cross-training process
1. leaders must identify their strengths in areas that usually fall into five categories: character, personal capability, getting results, interpersonal skills, and leading change
2. Choose a strength to focus on (easy to identify weakness and focus on improving them.)
3. select a companion behavior (step on the journey to becoming an indispensable leader, developed in an interacting fashion. Should be valued by the organization and also be something the leader feels passionate about)
4. Develop your companion behavior (work on improving basic skills in this area. look for opportunities to develop both inside and outside of work)
Five key elements of a learning organization
(necessary but not sufficient). Successful learning organizations need all five elements.
1. inspiring and motivating people with a mission or purpose
2. empowering employees at all levels
3. accumulating and sharing internal knowledge
4. gathering and integrating external information
5. challenging the status quo and enabling creativity
create a proactive, creative approach to the unknown, actively solicit the involvement of employees at all levels, and enable all employees to use their intelligence and apply their imagination. Higher-level skills are required of everyone.
CRITICAL REQUIREMENT: is that everyone feels and supports a compelling purpose
involves organization wide commitment to change, an action orientation, and applicable tools and methods.
A guiding philosophy and not simply another change program
Where do leaders struggle the most?
communicating an image of the future that draws others in, that is, it speaks to what others see and feel
A managers role
becomes one of creating an environment where employees can achieve their potential as they help move the organization toward its goals. Instead of viewing themselves as resource controllers and power brokers, leaders must envision themselves as flexible resources willing to assume numerous roles as coaches, information providers, teachers, decision makers, facilitators, supporters, or listeners, depending on the needs of their employees
key to empowerment is effective leadership. It cannot occur in a vacuum.
Empowering individuals by soliciting their input helps an organization to enjoy better employee morale. It also helps create a culture in which middle to lower level employees feel that their ideas and initiatives will be valued, and enhance firm performance.
Leading edge organizations
recognize the need for trust, cultural control, and expertise at all levels instead of the extensive and cumbersome rules and regulations of hierarchical control. The strongest organizations are those that effectively use the talents of all the players on the team
redistribute information knowledge (skills to act on the information) and rewards
The company needs to disseminate information by sharing customer expectations and feedback as well as financial information. The employees must know about the goals of the business as well as how key value-creating activities in the organization are related to each other. Organizations should allocate rewards on how effectively employees use information, knowledge, and power to improve customer service quality and company's overall performance.
gathering and integrating external information
recognizing opportunities, as well as threats, in the external environment are vital to a firms success. Critical for employees and managers to become more aware of environmental trends and events-both general and industry specific- and more knowledgeable about their firm's competitors and customers
How to gather the external information?
1. Internet has dramatically accelerated the speed with which anyone can track down useful information or locate people who might have useful information
2. Company employees at all levels can use "garden variety" traditional sources to acquire external information (membership in professional trade organizations, conventions and meetings, and networking among colleagues)
4. focus directly on customer information
types of benchmarking
restricts the search for best practices to competitors
Generic processes (ex: answering 1-800 calls)
endeavors to determine best practices regardless of industry. Industry-specific standards (ex: response times required to repair power outages in the electric utility industry) are typically best handled through competitive benchmarking
challenging the status quo
for a firm to become a learning organization, it must overcome such barriers in order to foster creativity and enable it to permeate the firm. This becomes quite a challenge if the firm is entrenched in a status quo mentality.
Best way to challenge the status quo for the leader is to forcefully create a sense of urgency
Foster culture that encourages taking risk
What happens when a leader forcefully creates a sense of urgency?
if sincere and credible, it establishes a shared mission and the need for major transformation. It can channel energies to bring about both change and creative endeavors
Establishing a "culture of dissent"
can be another effective means of questioning the status quo and serving as a spur toward creativity.
Dissenters can openly question a superior's perspective without fear of retaliation or retribution.
cultures of experimentation and curiosity
make sure that failure is NOT an obscene word. They encourage mistakes as a key part of their competitive advantage. It has been said that innovation has a great paradox: Success usually comes through failure.
Approaches to encourage risk taking and learning from mistakes
- formalize forums for failure
-move the goalposts
-bring in outsiders
-prove yourself wrong
formalize forums for failure
to keep failures and the important lessons that they offer from getting swept under the rug, carve out time for reflection
move the goalposts
innovation requires flexibility in meeting goals, since early predictions are often little more than educated guesses
bring in outsiders
outsiders can help neutralize the emotions and biases that prop up a flop
prove yourself wrong
development teams tend to look for supporting, rather than countervailing evidence
may be defined as a system of right and wrong. It assists individuals in deciding when an act is moral or immoral, socially desirable or not. The sources for an individuals ethics include religious beliefs, national and ethical heritage, family practices, community standards, educational experiences, and friends and neighbors.
an application of ethical standards to commercial enterprise
individual vs organizational ethics
They assume that the company should not bear any responsibility for individual misdeeds. In their view, ethics has nothing to do with leadership.
Ethics does have something to do with leadership.
Unethical business practices typically involve the tacit cooperation of others and reflect the values, attitudes, and behavior patterns that define an organization's operating culture. Ethics is as much an organizational as it is personal
a key factor in promoting ethical behavior. Ethical leaders must take personal, ethical responsibility for their actions and decision making. Leaders who exhibit high ethical standards become role models for others and raise an organization's overall level of ethical behavior. Ethical behavior must start with the leader before the employees can be expected to perform accordingly.
corporate ethical performance
(this has been growing)
This trend may be the increasing lack of confidence regarding corporate activities, the growing emphasis on quality of life issues, and a spate of recent corporate scandals. Without a strong ethical culture, the chance of ethical crises occurring is enhanced. Ethical crises can be very expense in terms of financial costs and erosion of human capital for the overall firms reputation
How is an ethical organization characterized?
by a conception of ethical values and integrity as a driving force of the enterprise. Ethical values shape the search for opportunities, the design of organizational systems, and the decision-making process used by individuals and groups. They provide a common frame of reference that serves as a unifying force across different functions, lines of business, and employee groups. Organizational ethics help to define what a company is and what it stands for.
Benefits of an ethical organization
relationships have generally been found between ethical performance and strong organizational culture, increased employee efforts, lower turnover, higher organizational commitment, and enhance social responsibility.
Advantages of a strong ethical orientation
it can have a positive effect on employee commitment and motivation to excel.
Positive, constructive relationships among individuals (ex: social group) are vital in leveraging human capital and other resources in an organization.
integrity based approaches to organizational ethics
there cannot be high integrity organizations without high integrity individuals.
Individual integrity is rarely self-sustaining. Even good people can lose their bearing when faced with pressures, temptations, and heightened performance expectations in the absence of organizational support systems and ethical boundaries. Organizational integrity rests on a concept of purpose, responsibility, and ideals for an organization as a whole.
2 approaches to ethics
-compliance based approach
-integrity based approach
compliance-based ethics program
These programs are typically designed by a corporate counsel with the goal of preventing, detecting, and punishing legal violations
Based on the fear of punishment for doing something unlawful.
integrity-based ethics program
Driven by a personal and organizational commitment to ethical behavior.
combine a concern for law with an emphasis on managerial responsibility for ethical behavior. It is broader, deeper, and more demanding than a legal compliance initiative.
Broader in that it seeks to enable responsible conduct.
Deeper in that it cuts to the ethos and operating systems of an organization and its members, their core guiding values, thoughts, and actions
More demanding because it requires an active effort to define the responsibilities that constitute an organization's ethical compass.
key elements to become a highly ethical organization
-corporate credos and codes of conduct
-reward and evaluation systems
-policies and procedures
These elements are highly interrelated. Reward structures and policies will be useless if the leaders are not sound role models
Approaches to ethics based management characteristics
ethos in compliance based vs integrity based approaches
Compliance-based: conformity with externally imposed standards
Integrity-based: self-governance according to chosen standards
objective in compliance based vs integrity based approaches
Compliance-based: prevent criminal misconduct
Integrity-based: enable responsible conduct
leadership in compliance based vs integrity based approaches
Integrity-based: management-driven with aid of lawyers, HR, and others
methods in compliance based vs integrity based approaches
Compliance-based: education, reduced discretion, auditing and controls, penalties
Integrity-based: education, leadership, accountability, organizational systems and decision processes, auditing and controls, penalties
behavioral assumptions in compliance based vs integrity based approaches
Compliance-based: autonomous beings guided by material self-interest
Integrity-based: social beings guided by material self-interest, values, ideals, peers
for good or for bad, leaders are role models in their organization.
Leaders must "walk the talk" they must be consistent in their words and deeds.
When leaders do not believe in the ethical standards that they are trying to inspire, they will not be effective as good role models. Being an effective leader often includes taking responsibility for ethical lapses within the organization- even though the executives themselves are not directly involved.
Such action enhances the loyalty and commitment of employees throughout the organization
corporate credos and codes of conduct
mechanisms that provide statements of norms and beliefs as well as guidelines for decision making. They provide employees with a clear understanding of the organizations policies and ethical position. Also provides the basis for employees to refuse to commit unethical acts and help to make the aware of issues before they are faced with the situation
reward and evaluation systems
a flaw in the organization's reward structure may inadvertently cause individuals to act in an inappropriate manner if rewards are seen as being distributed on the basis of outcomes rather than the means by which goals and objectives are achieved.
Unethical (or illegal) behaviors are also more likely to take place when competition is intense
policies and procedures
many situations that a firm faces have regular, identifiable patterns. Leaders tend to handle such routine by establishing a policy or procedure to be followed that can be applied uniformly to each occurrence. Such guidelines can be useful in specifying the proper relationships with a firm's customers and suppliers.
Carefully developed policies and procedures guide behavior so that all employees will be encouraged to behave in an ethical manner. They must be reinforced with effective communication, enforcement, and monitoring, as well as sound corporate governance practices.
Sarbanes Oxley Act of 2002
provides considerable legal protection to employees of publicly traded companies who report unethical or illegal practices.
Provisions in Sarbanes Oxley Act of 2002
-make it unlawful to "discharge, demote, suspend, threaten, harass, or in any manner discriminate against a whisteblower"
-establish criminal penalties of up to 10 years in jail for executives who retaliate against whistleblowers
-require board audit committees to establish procedures for hearing whistleblower complaints
-allow the Secretary of Labor to order a company to rehire a terminated whisteblower with no court hearing
-give a whistleblower the right to a jury trial, bypassing months or years of cumbersome administrative hearings
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