Question

After reading “Behavioral Theories of Leadership” and “Participative Management and Employee and Stakeholder Involvement,” describe each theory in a paragraph. Then, evaluate which theory of leadership is best suited for a large multinational corporation with subsidiaries around the world.

Answer 1

The researches carried out by many behavioural scientists to find out what makes a leader effective have resulted in various theories of leadership:

1.Trait theory.

2. Behavioural theory.

3. Situational theory.

4. Great man theory

5. Contingency theory

Trait Theory: The trait theory seeks to determine the personal characteristics or traits of a successful leader. A successful leader is supposed to have the following traits: good personality, intellectual ability, initiative, imagination, emotional stability, desire to accept responsibility, flexibility, honesty, sincerity, integrity, ability to make quick decisions, courage, reliability, persuasive power, etc. To determine the personality traits of a successful leader, studies were conducted by selecting successful leaders and find out their traits. It was presumed that persons possessing these traits could become successful leaders.

Behavioural Theory: In this approach, the emphasis is on the actual behaviour and action of the leaders and not on their traits or characteristics. In other words, this approach emphasises that strong leadership is the result of effective role behaviour. This approach states that the leader uses three skills to lead his followers. These skills are: technical (refers to a person's knowledge of the process of technique), human (refers to ability to interact with people and conceptual (refers to manager's ideas which enable a manager to set up models and design plans).

Situational Theory: According to this theory, leadership is affected by a situation from which a leader emerges and in which he works. In other words, the situation — the group, the problem and its environment — will affect the type of leadership. An important aspects of this theory is the interaction between the group and its leader and the people tend to follow the person who is capable of fulfilling their desires. The leader recognises his followers' desires and follows such methods (depending on the situation) which satisfy them. The main trust of the situational theory is that the leadership style may be effective under one situation and ineffective under the other.

Great Man Theory: Leaders are born, not made. This approach emphasized that a person is born with or without the necessary traits of leaderships. Great Man approach actually emphasis “charismatic” leadership. charisma being the Greek word for gift. No matter what group such a natural leader finds himself in, he will always be recognized for what he is. According to the great man theory of leadership, leadership calls for certain qualities like commanding personality, charm, courage ,intelligence, persuasiveness and aggressiveness.

Contingency Theory: While trait and behavior theories do help us understand leadership, an important component is missing: the environment in which the leader exists. Contingency Theory deals with this additional aspect of leadership effectiveness studies.

Leadership theory for MNCs: Trait Theory, Because:-

In order to be effective in a multinational environment, a leader should acquire a multicultural mindset. Such a mindset can be cultivated by employing the universal principles of effective leadership, including:

• Vision, mobilizing people toward change;
• Serving, by building emotional bonds;
• Leading others to greatness, by developing people for future responsibility.