Psychology of Leadership in Organizations

3.3 Power and Influence Approaches

Power approaches seek to explain leadership effectiveness in terms of the amount and type of power possessed and exercised by leaders. A classic distinction of forms of power was presented by French and Raven (1960): reward and coercive power, that is, the capability to offer incentives and to make use of organizational sanctions; legitimate power, when followers believe that the organizational or positional power over them is rightful; expert power, when high experience, knowledge, or ability are attributed; and referent power, when a person is referred to, or group norms are identified with, due to appealing personal qualities or values systems. Yukl (2001) describes three qualitatively different outcomes for the followers that result from employing these sources of power: commitment is most likely to be associated with referent and expert power, compliance with legitimate and reward power, and resistance with coercive power. The link between the use of power and behavioral approaches of leadership influence has been established by research on so-called influence tactics, for example, rational persuasion, consultation, ingratiation, exchange, coalition building, or pressure (cf. Yukl 1998).

Leader-member Exchange Theory (LMX) by Graen and his associates focuses on the development and the quality of the mutual relationship between leader and follower. Leaders are assumed to differentiate their followers according to their competence, trustworthiness, and motivation to assume ever more responsibility. Followers whom the leader perceives to display these attributes are categorized as so-called in-group members and in exchange are given more attention, support, and sensitivity by their leaders. The other, so-called out-group members, attract the more routine tasks and maintain a formal relationship with their leaders who in return exert influence with formal authority. Three ‘currencies of exchange’ between follower and leader, namely personal contribution, loyalty, and affect, have been identified. A meta-analytic review of LMX has been presented by Gerstner and Day (1997).

Transformational Leadership (Bass 1998) describes leaders to transform followers’ attitudes and values, to activate their higher order motives and to stimulate them to transcend the organizations’ higher order goals by their self-interests. The four components of transformational leadership (idealized influence, inspirational motivation, intellectual stimulation, and individualized consideration) are measured in the Multifactor Leadership Questionnaire (MLQ) and were found to be empirically distinguishable and to relate to work unit effectiveness. Transformational leadership is often contrasted with transactional leadership which is based primarily on compliance and norms recognized through leader–follower exchanges, that is, reward and praise are given by the leader for task completion and loyalty given by the follower.

Charismatic leadership is defined more narrowly than transformational leadership. It specifies an idolized leader’s characteristics as perceived and attributed by followers. Behaviors typical of charismatic leaders are for example, the articulation of appealing visions, communication of high expectations, and expression of high confidence in followers. Some evidence of the principally positive relationship between personal charisma and effectiveness, especially in situations of crisis, was presented by House et al. (1991) in an investigation of US American presidents and various measures of national effectiveness during each president’s term.

There is also a ‘dark side’ to charismatic leadership. Problems that can occur with ‘negative’ charismatics are, for example, that they seek to induce commitment to narrow-minded ideological goals or to themselves, start projects with often unrealistic premises, omit properly investing in the implementation of their visions, and fail to develop competent successors.


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