Entrepreneurship/Leadership/Innovation- MGT 2251Y 
                      
                     UNIT 6: LEADERSHIP THEORIES, LEADERSHIP AND MANAGEMENT 
                      
                     Unit Structure 
                      
                     6.0 Overview 
                     6.1 Learning objectives  
                     6.2 Introduction 
                     6.3 Definitions 
                     6.4     Leadership Theories – Business Leadership  
                             6.4.1 Leadership Theories 
                             6.4.2 Person-Based Theories 
                                     6.4.2.1   Trait Theory 
                                     6.4.2.2   Behavioural theories 
                                     6.4.2.3   Autocratic and Democratic Leadership  
                             6.4.3 Situational Theories 
                                     6.4.3.1   Fiedler’s Contingency Model 
                                     6.4.3.2   Path-Goal Theory 
                             6.4.4 Dispersed Theories 
                                     6.4.4.1   Self-leadership 
                             6.4.5 Exchange Theories 
                                     6.4.5.1   Transactional and Transformational Leadership                  
                                     6.4.5.2   Characteristics  of  Transactional and Transformational 
                                                  Leaders 
                     6.5     Leadership and Management 
                             6.5.1  Sources of power in management/leadership position 
                             6.5.2 Typical Characteristics of Effective Management and 
                                     Leadership 
                             6.5.3   Leadership v/s Management 
                     6.6     Training in leadership 
                             6.6.1  Transformational leadership training: an example 
                             6.6.2  Leaders developing leaders  
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                            6.6.3   Behaviour Modelling  
                    6.7  Summary 
                    6.8  References 
                     
                     
                    6.0 OVERVIEW  
                     
                    The definitions of leadership highlight a number of related issues including vision, a team 
                    approach, action orientation and a sensitivity to both people and the business 
                    environment. Leaders are seen as agents of change. They are people who both teach 
                    (coach) and learn. Entrepreneurial leadership is seen more as a transformational 
                    leadership style although it is expected that entrepreneurs both lead and manage their 
                    organisations. 
                     
                    6.1 LEARNING OBJECTIVES  
                     
                    By the end of this Unit, you should be able to do the following: 
                        1.  Define leadership. 
                        2.  Analyse leadership theories and their applications. 
                        3.  Distinguish between leadership and management characteristics. 
                        4.  Explain the sources of power in leadership positions. 
                        5.  Achieve an understanding that leadership skills can be taught and therefore be 
                            learnt. 
                         
                    6.2 INTRODUCTION 
                     
                    Introductory quote from Sir Richard Branson: 
                    “Even though I’m often asked to define my business philosophy, I generally won’t do so 
                    because I don’t believe it can be taught as a recipe. These aren’t ingredients and 
                    techniques that will guarantee success.  Parameters exist that, if followed, will ensure a 
                    business can continue, but you cannot clearly define business or business success and 
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          then bottle it as a perfume.  It’s not that simple: to be successful you have to be out there, 
          you have to hit the ground running, and if you have a good team around you and more 
          than your fair share of luck you might make something happen” 
           
          (Source: Burns, 2005). 
           
          Undisputedly, no “ingredient or techniques will guarantee success”. Branson even 
          mentions chance, which others call it serendipity in this context. However, beyond the 
          debate of whether leaders are born or made, a careful study of leadership theories brings 
          us to the conclusion that the truth of leadership may lie somewhere between the influence 
          of genetic constitution and as a consequence of training developing of leaders/managers 
          in leadership skills. 
           
          Together with vision, entrepreneurial leaders develop a management style that promotes 
          an entrepreneurial culture, which motivates individuals to perform and achieve. They 
          build an effective management team that is empowered to manage change in a turbulent 
          business environment where risk, ambiguity and uncertainty are prevalent. 
           
          6.3 DEFINITIONS 
           
          According to Timmons (1999), entrepreneurial leaders are “capable of instilling tangible 
          visions and managing for the long haul……….. at once a leader and a teacher, a doer and a 
          visionary”.  This description combines vision and action and further has a strategic long-term 
          perspective.  It also emphasises that the leader is not born with all the qualities but will learn 
          by doing. 
           
          Scarborough & Zimmerer (2006), describe a business leader as someone who displays “a 
          willingness to remain open to the changes in both people and ‘things’, a deep commitment to 
          the long term well being of employees and to their needs, and a high level of sensitivity”.   
          This definition highlights the emotional intelligence aspect of business leadership (as 
          mentioned later in transformational leadership) and has a human relations approach. Apart 
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            from sensitivity to people, reference is made to sensitivity to changes in ‘things’, i.e., the 
            business environment.   
             
            Overconfident CEO’s often fail to see changes in the environment, thinking they have learnt 
            all that has to be known. “Their confidence blinds them to information that is contrary to a 
            decided course of action. For example, overconfident CEO’s tend to charge ahead with 
            mergers and acquisitions even though they are aware that most acquisitions destroy 
            shareholder value”. (Wheelen & Hunger, 2008). 
             
            The above definitions stress the need for long-term vision and visualise leaders both as 
            learners and coach. As for any other discipline, leadership can be learnt, based on 
            conceptualisations drawn from experience of others, for example, through leadership 
            theories and their application into skills. 
             
            6.4 LEADERSHIP THEORIES – BUSINESS LEADERSHIP  
             
            6.4.1 Leadership Theories 
            Over the years there has been much research to understand what makes an effective 
            leader.  Can leadership skills be learned or are people just “born” with them?  These and 
            other questions have led to the development of a variety of leadership theories.  There is 
            probably not one theory that is the best and most accurate. Still, much can be learned 
            about being an effective leader from an understanding of the different theories. 
             
            6.4.2 Person-Based Theories 
                6.4.2.1   Trait Theory 
             
            Certain traits or personal characteristics may come to mind, such as self-confidence, 
            emotional resilience, honesty, and determination and communication skills, that is, a set 
            of characteristics that distinguishes leaders from non-leaders. 
             
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