SUO_MGT3002 W4 L3

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Nov 24, 2024

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Trust, Charismatic Leadership, Emotional Intelligence, and Power © 201 6 South University

Page 2 of 2 Organizational Behavior ©2016 South University 2 Trust, Charismatic Leadership, Emotional Intelligence, and Power MGT3002 W4 L3 Trust can be defined as confidence that a person or group will not act against your interests. For example, companies such as Enron have acted against the interests of stockholders, employees, customers, and the government, while acting in the best interests of a handful of top executives and investors. Enron's former chief financial officer, Andrew Fastow admitted to orchestrating partnerships and financial schemes to hide Enron debt and inflate profits while pocketing millions for himself and others. Thousands of Enron employees lost their jobs and the stock fell from a high of $90 in August 2000 to just pennies, wiping out many employees' retirement savings. Jeffrey Skilling, the former CEO of Enron, has been charged with more than 30 counts of fraud and other crimes. His predecessor, Kenneth Lay, has also been indicted for similar crimes. Trust is often based on the awareness that there may be some penalty or loss if that trust is violated—this is called deterrent- based trust. For example, laws try to ensure trust primarily through deterrence. Within social groups deterrence is used to sustain the norms that have developed in the group. For example, there is a common norm in many groups against being a "snitch," even when serious violations of law or ethics are involved. You may be caught in a dilemma when you should report on a colleague, yet are apprehensive of the social repercussions from other members of the group. If you do report on the colleague, you may be violating the trust of other group members. But if you do not report the violation, your boss has no reason to trust you. The highest level of trust is based on identification with another person. This form of trust occurs between people who are emotionally close, or between a person, such as a charismatic leader, and those who admire him or her. You identify with the

Page 3 of 2 Organizational Behavior ©2016 South University 3 Trust, Charismatic Leadership, Emotional Intelligence, and Power MGT3002 W4 L3 other person, and therefore, you have confidence that he or she would act in your best interest. Whatever the basis of trust, five key factors characterize it: integrity, competence, consistency, loyalty, and openness. These factors determine how leaders can establish and sustain trust, and also how they can restore trust once it has been broken. For example, when trust in the leadership of an organization has been seriously broken, management needs to exhibit a high degree of openness in order to restore that trust. Defensiveness and denials may lead to negative consequences for the organization, such as valuable people leaving. Most people can become good leaders but very few people who become leaders can also be thought of as "charismatic." For example, many would agree that Franklin D. Roosevelt, John F. Kennedy, and Lee Iacocca were charismatic leaders. There is no dearth of charismatic leaders in the field of business either. Donald Trump, Martha Stewart, Dave Thomas—the founder of Wendy's, David O. Selznick—the flamboyant producer of Gone with the Wind and other big Hollywood productions, Steve Jobs—founder of

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Page 4 of 2 Organizational Behavior ©2016 South University 4 Trust, Charismatic Leadership, Emotional Intelligence, and Power MGT3002 W4 L3 Apple Computers, and Paul Newman—An Academy Award- winning actor-turned-entrepreneur are all excellent examples of people who were charismatic leaders. However, it is difficult to describe the qualities that made these leaders charismatic. For example, some would say that the ability to inspire and motivate people through public speaking is a defining quality of a charismatic leader; for example John. F. Kennedy and Martin Luther King Jr. However, Gandhi was a charismatic leader, even though he was not a particularly good public speaker. Also, while some believe that you can learn to become a charismatic leader, others believe that you must be born with those qualities. Many charismatic leaders have the ability to mold the thinking of those who are inspired by them. A leader who doesn't just inspire people to do things but goes a step beyond and induces in them a willingness to change their personalities is known a transformational leader. Transformational Leader A leader who has a profound impact on employees can inspire them to focus mainly on the interests of the organization. This is an example of a transformational leader. As transformational leaders are able to inspire people not just to change their behavior but also their personalities, these leaders are able to help their followers recognize and hone their leadership abilities. In other words transformational leaders create great leaders. Visionary Leader A visionary leader is one whose vision or foresight generates energy within an organization to create positive change. For example, when Jack Welch took control of General Electric (GE),

Page 5 of 2 Organizational Behavior ©2016 South University 5 Trust, Charismatic Leadership, Emotional Intelligence, and Power MGT3002 W4 L3 he envisioned that GE should only be involved in businesses that were first or second in their industry. Based on this vision, he developed a strategy to strengthen existing top businesses, buy new businesses, and sell off those that did not meet these criteria. As a result, GE grew to dominate several industries. Like other forms of leadership visionary leadership needs to be combined with ethics and morality. Great leaders have sometimes taken advantage of their influence and power to lead people and organizations in questionable directions. For example, many attribute charismatic qualities to people like Rush Limbaugh and Louis Farrakhan, but they have also been seen to use their power and influence for personal advancement or the advancement of ideas that many would consider extreme and controversial. John Mayer of the University of New Hampshire, and Peter Salovey of Yale University, developed the concept of emotional intelligence (EI), which they perceived as the ability to process emotional information. They define emotional information as involving perception, assimilation, understanding, and management of emotion. Evidence shows that effective leadership is very closely linked with emotional intelligence. In spite of the evidence supporting EI as a necessary trait for effective leadership, traditional notions of organizational leadership make it difficult for many people to accept the validity of this concept. For example there are many people who still believe that emotions and feelings are best left out of the workplace because business should not be personal. The concept of power is central to any discussion on leadership. Basically power is the ability to influence the behavior of others. Leaders often use power to influence the behavior of their subordinates in order to accomplish goals.

Page 6 of 2 Organizational Behavior ©2016 South University 6 Trust, Charismatic Leadership, Emotional Intelligence, and Power MGT3002 W4 L3 Like politics the concept of power is sometimes associated with a degree of negativity. However, power is necessary to accomplish organizational goals. Power comes from a variety of sources and in organizations it can be formal or personal. Formal power comes from the organization and is delegated to individuals. There are four recognizable types of formal power as described below. Reward power is the ability to distribute rewards in a variety of forms, such as financial. Its corollary is coercive power which is based on fear of punishment or some kind of loss. There is nothing good or bad, right or wrong about reward and coercive power — they simply exist in organizations. However ethical or moral issues may exist in connection with how this power is used. Legitimate power includes all of the authority that is delegated by an organization to an individual to control and use the resources of the organization. It includes reward and coercive power as well as the power to give instructions to allocate jobs, to recruit personnel, and to approve proposals. Information power relates to the control over and access to an organization's information. Having this power allows you to influence the behavior of subordinates. At the personal level expert and referent power are extremely important to managers and leaders. With expert power a person who is known to have greater expertise on a particular subject is able to influence the behavior of others significantly. Expert power is one of the most powerful sources of influence in organizations. Referent power is the influence derived from qualities that evoke admiration in others. People identify with a person's strong desirable qualities and want to emulate and please that person. In other words, referent power is based on identification.

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Page 7 of 2 Organizational Behavior ©2016 South University 7 Trust, Charismatic Leadership, Emotional Intelligence, and Power MGT3002 W4 L3 Through formal delegation and personal power, inequalities exist in all organizations. These power inequalities lead to two significant phenomena: the use of power over others to engage in unethical or illegal acts, and efforts to influence the distribution of advantages and disadvantages in the organization (office politics). Neither of these phenomena is required in a person's formal role in the organization, but both do happen. In many cases of corporate crime that are investigated today one consistent pattern has emerged: the pressure exerted by some top executives on junior managers who have felt compelled to act illegally or against their own moral code in order to carry out orders. In most cases implicit threats of loss of position or job have been experienced. For example, sexual harassment is the most common type of workplace abuse over others. It is estimated that only about 10% to 20% of actual incidents of sexual harassment are reported or become public. There is adequate data to suggest that these acts lower morale and productivity, influence employee turnover rates and encourage others to act similarly. Whether from a pragmatic point of view or from a moral point of view, this, like any abuse of power, is an unacceptable practice within an organization. Political behavior needs to be looked at from a slightly different perspective. Organizations have developed a certain tolerance level to some kinds of political behavior. This may be an acknowledgement that while political behavior is not actually required for the goals and purposes of the organization, it has now become an integral part of today's business environment. In the future a consensus should hopefully emerge regarding whether or not certain political behaviors are legitimate. Presently there are many different opinions about what constitutes legitimate

Page 8 of 2 Organizational Behavior ©2016 South University 8 Trust, Charismatic Leadership, Emotional Intelligence, and Power MGT3002 W4 L3 and illegitimate political behavior. For example, some people believe that whistle blowing is an example of illegitimate political behavior, while others believe that it is neither political nor illegitimate, but actually essential role behavior. An effective manager should try to determine why some people engage in political behavior and others do not. For example, there is some evidence to suggest that people with a high Need for Power (nPow) are more likely to engage in political behavior. High nPow is also associated with feelings of inadequacy. Efforts to reduce perceptions of inadequacy through empowerment, counseling, involvement, and participation may offer a solution.

SUO_MGT3002 W4 L3

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