Leadership styles and decision making

For obvious reasons, decisions made in groups can vary considerably from those undertaken by individuals. It is this potential divergence in outcomes that makes group decision making attractive. However, the use of groups is not necessarily an indicator of decision quality. Group decision making can lead to improved outcomes, only if a variety of conditions pertaining to the decision situation and the group itself are satisfied. Deciding between individual and group decision making methods depends on the decision that needs to be made, the group that is affected and the manager's leadership style.

Authoritarian (autocratic) leaders make decisions without consulting their teams. They provide clear expectations for what needs to be done, when it should be done, and how it should be done. Authoritarian leaders make decisions independently with little or no input from the rest of the group. This style of leadership is considered appropriate when decisions need to be made quickly and there is little time for group decision-making, when the leader is the most knowledgeable member of the group and there is no need for input, and when team agreement is not necessary for a successful outcome.

Democratic leaders allow the team to provide input () before making a final decision, although the degree of input can vary from leader to leader. This style is important when team agreement matters. Group members feel engaged in the process and are more motivated and creative.

Laissez-faire(delegative) leaders offer little or no guidance to group members and leave decision-making up to group members. This works well when the team members are highly capable and qualified in an area of expertise, are motivated, and do not need close supervision. However, laissez-faire style can arise because the leader is lazy or distracted and this is where this style of leadership can fail.

In general, the leadership styles described above represent a continuum:

Authoritarian Democratic Laissez-faire

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There is no one best leadership style for all situations. In contingency theories of leadership the success of the leader is a function of various factors related to subordinates, specificity of task, and other variables. The effectiveness of a given leader behavior is contingent upon the demands imposed by the situation.

Below we will consider two well-known theories of leadership, which focus on decision making styles and factors that affect them.

The Tannenbaum and Schmidt leadership continuum

In 1957, Robert Tannenbaum and Warren Schmidt proposed a model of leadership explaining the different ways in which leaders interact with their followers. The model is a continuum that shows that at one end of the spectrum, a leader can have total freedom to decide, while at the other end of the spectrum the team can have total freedom to decide. In-between these two extremes, Tannenbaum and Schmidt identified 7 types of leadership style. Knowing these style options and being able to apply them to a workplace situation correctly is the secret of effective management.

The authors emphasize situations in which a leader makes decisions. Figure 2 presents Tannenbaum and Schmidt’s model of leadership behavior. Each type of decision-making behavior in this model has both a corresponding degree of authority used by the manager and a related amount of freedom available to subordinates.

Figure 2. Continuum of leadership behavior that emphasizes decision-making

Management behavior at the extreme left of the model characterizes the leader who makes decisions himself. Behavior at the extreme right characterizes the leader who makes decisions by exercising little control and allowing much subordinate freedom and self-direction. Behavior between the extreme left and right reflects a gradual change from autocratic to democratic leadership. Each type of leadership behavior in this model is explained in more detail in the following list:

1. Manager makes decision and announces it– only manager plays the decision-making role; no team involvement.

The manager reviews options in light of aims, issues, priorities, timescale, etc., then chooses the action and informs the team of the decision. The manager will probably consider how the team will react, but the team plays no active part in making the decision.

2. Manager decides and then “sells” his decision to the team – no change in decision; but team may express some concerns

The manager makes the decision and then explains reasons for the decision to the team, particularly the benefits that the team will enjoy from the decision. In doing so the manager is seen by the team to recognize the team's importance, and to have some concern for the team.

3. Manager presents decision with background ideas for the decision and invites questions– team knows what options manager considered for his decision; more team involvement.

The manager presents the decision along with some of the background which led to the decision. The team is invited to ask questions and discuss with the manager the rationale ) behind the decision, which enables the team to understand and accept or agree with the decision more easily than in 1 and 2 above. This will have a more motivational approach than 1 or 2 because of the higher level of team involvement and discussion.

4. Manager suggests tentative decision subject to change– team can have a say on manager’s decision; it can be changed based on discussion.

The manager discusses and reviews the preliminary decision with the team on the basis that the manager will take into account the views and then finally decide. This enables the team to have some real influence over the manager's final decision. This also acknowledges that the team has something to contribute to the decision-making process, which is more involving and therefore motivating than the previous level.

5. Manager presents the problem or situation, get suggestions, then decides – team is free to come up with options; manager decides on those options

The manager presents the situation, and maybe some options, to the team. The team is encouraged and expected to offer ideas and additional options, and discuss implications of each possible course of action. The manager then decides which option to take. This level is one of high and specific involvement for the team, and is appropriate particularly when the team has more detailed knowledge or experience of the issues than the manager. Being high-involvement and high-influence for the team this level provides more motivation and freedom than any previous level.

6. Manager explains the situation or problem, defines the parameters and limits and asks team to decide on the solution – manager delegated whole thing to the team; but still manager is accountable for the outcome

At this level the manager has effectively delegated responsibility for the decision to the team, however within the manager's stated limits. The manager may or may not choose to be a part of the team which decides. While this level appears to give a huge responsibility to the team, the manager can control the risk and outcomes to an extent, that he stipulates This level is more motivational than any previous, and requires a mature team for any serious situation or problem.

7. Manager permits the team to develop options and decide on the action, within the limits defined by the manager– complete freedom level; team does all the work almost as what the manager does at level 1.

This is obviously an extreme level of freedom. The team is given responsibility for identifying and analyzing the situation or problem; the process for resolving it; developing and assessing options; evaluating implications, and then deciding on and implementing a course of action. The manager may or may not be part of the team, and if so then he/she has no more authority than anyone else in the team. This level is potentially the most motivational of all, but also potentially the most dangerous. That is why the team must be mature and competent, and capable of making such decisions.

According to Tannenbaum and Schmidt, the three primary groups of factors that influence a manager’s choice of decision making style are

1) factors related to the manager

2) factors related to subordinates

3) factors related to the situation

Factors related to the manager

- manager’s values, such as the relative importance to the manager of organizational effectiveness, personal growth, the growth of subordinates, and company profits;

- the level of confidence in subordinates;

- personal leadership strengths- some managers are more effective in issuing orders than leading group discussions and vice versa;

- tolerance for uncertainty – loss of control over decision-making means loss of certainty, and reduction of certainty can be disturbing to a manager.

Factors related to subordinates

- need for independence;

- readiness to assume responsibility for decision-making;

- tolerance for uncertainty (some subordinates prefer to have clear-cut directives given to them);

- interest in the problem;

- identification with goals of the organization;

- problem-related expertise;

- expectation for participating in decisions (people who are used to autocratic style and are suddenly confronted with the request to participate in decision-making are often frustrated by this new experience).

Factors related to the situation

- type of organization;

- effectiveness of group members working together;

- type of problem to be solved;

- time available for problem solving.

The situational approach to leadership implies that a manager will be successful as a decision maker only if the method used to make decisions corresponds to the three groups of factors.

In modern organizations the relationships among factors related to the manager, subordinates, and the situation had become more complex and more interrelated than ever. As the relationship becomes increasingly complicated, it obviously becomes more difficult for the leader to choose his/her leadership style correctly.

The Vroom-Yetton-Jago Model

Another decision-focused theory of leadership that has gained wide-spread attention was first developed by V. Vroom and P. Yetton in 1973 and was later refined and expanded by V. Vroom and A. Jago in 1988. The model is associated with building a decision tree, which helps one decide whether to make a decision alone, after consulting with individual team members, or with a team. In other words, this model focuses on how much participation to allow subordinates in the decision-making process. The Vroom-Yetton-Jago model is built on the following premises:

1) organizational decisions should be of high quality (should have a beneficial impact on organizational performance);

2) subordinates should accept and be committed to organizational decisions that are made.

The model suggests that there are five different decision making styles. Two are autocratic ( (A1 and A2), two are consultative (C1 and C2) and one is group based (G2). The styles can be described as follows:

A1: Leader takes known information and then decides alone.

A2: Leader asks for information from followers, and then decides alone.

C1: Leader shares problem with followers individually, listens to ideas and then decides alone.

C2: Leader shares problems with followers as a group, listens to ideas and then decides alone.

G2: Leader shares problems with followers as a group and then seeks and accepts consensus agreement.

When choosing the decision making style, a leader should take into account the following considerations:

· When decision quality is important and followers possess useful information, then A1 and A2 are not the best method.

· When the leader sees decision quality as important but followers do not, then G2 is inappropriate.

· When decision quality is important, when the problem is unstructured and the leader lacks information / skill to make the decision alone, then G2 is best.

· When decision acceptance is important and followers are unlikely to accept an autocratic decision, then A1 and A2 are inappropriate.

· When decision acceptance is important but followers are likely to disagree with one another, then A1, A2 and C1 are not appropriate, because they do not give opportunity for differences to be resolved

· When decision quality is not important but decision acceptance is critical, then G2 is the best method.

· When decision quality is important, all agree with this, and the decision is not likely to result from an autocratic decision then G2 is best.

The decision tree presented in Figure 3 is actually a method for determining when a leader should use which decision style. The leader starts at the left of the decision tree by stating an organizational problem to be addressed and then asks oneself a series of questions about the problem as determined by the structure of the decision tree until a decision style appropriate for the situation is determined at the far right side of the tree.

The nodes of the decision tree correspond to the following questions: the following questions helpful in the sequence below:

1. Quality Requirement (QR) How important is the technical quality of the decision?

2. Commitment Requirement (CR) How important is subordinate commitment to the decision?

3. Leader's Information (LI) Do you (the leader) have sufficient information to make a high quality decision on your own?

4. Problem Structure (ST) Is the problem well structured (e.g., defined, clear, organized, lends itself to solution, etc.)?

5. Commitment Probability (CP) If you were to make the decision by yourself, is it reasonably certain that your subordinates would be committed to the decision?

6. Goal Congruence (GC) : Do subordinates share the organizational goals to be attained in solving the problem?

7. Subordinate conflict (CO) (Is conflict among subordinates over preferred solutions likely?

8. Subordinate information (SI) (Do subordinates have sufficient information to make a high quality decision?

Figure 3. The Vroom-Yetton-Jago Model

The original model was later expanded adding a number of additional questions, in particular by bringing into consideration time constraints that limit managers’ ability to involve subordinates in the decision making process.

The model tends to be somewhat complex and therefore difficult for practicing managers to apply.

[1] heads or tails - орел или решка

[2] Not necessarily a single person. It can be a group of people processing and analyzing information collected from experts.

Date: 2015-01-29; view: 4292