The group and exchange theories of leadership are derived from social psychology. These have their roots in the exchange theory. Leaders from different kinds of relationships with various groups of subordinates. Group theories describe how leaders need to maintain their position in group dynamics.
Social exchange theory proposes that social behavior is the result of an exchange process. The purpose of this exchange is to maximize benefits and minimize costs. Social Exchange Theory is a social psychological and sociological perspective that explains social change and stability as a process of negotiated exchanges between parties. Social Exchange Theory posits that all human relationships are formed by the use of a subjective cost-benefit analysis and the comparison of alternatives.
Costs are the elements of relational life that have negative value to a person, like time, money, effort etc. and on the other hand rewards are the elements of a relationship that have positive value like sense of acceptance, support, and companionship etc. The Social Exchange perspective argues that people calculate the overall worth of a particular relationship by subtracting its costs from the rewards it provides. If worth is a positive number, it is positive relationship. On the contrary, negative number indicates a negative relationship. The worth of a relationship influences its outcome, or whether people will continue with a relationship or terminate it. Positive relationships are expected to endure, whereas negative relationships will probably terminate.
Social exchange theory can also be applied to leadership studies as reported by Hollandder and Julian (1969). They propose that the leader provides more benefits or regards than burden or costs to the followers who in exchange help him achieve the goals of the organization. There must be a positive exchange between the leader and followers in order for group goals to be accomplished. According to this group of theories, a leader provides more benefits/rewards than burdens/costs for followers.
In a group, members make contributions at a cost to themselves and receive benefits at a cost to the group or other members. The leader can give rewards to his followers in the form of appreciation or monetary increments or promotion for accomplishment of the organizational goals or tasks. These rewards have positive impact on attitudes, satisfaction and performance of the followers.
In return of these awards, followers respect the leader and give him due regard for his status and esteem and believe in his heightened influence. The leader tends to follow initiating structure when followers do not perform very well and increases his emphasis on consideration when the followers do a good job.
In this balancing act, the perception of his followers of his being an effective leader increases and this equation is mutually beneficial for both the leader and the follower. Interaction continues because members find the social exchange mutually rewarding.
Hawthorne Studies - Leadership
The Hawthorne studies were conducted on workers at the Hawthorne plant of the Western Electric Company by Elton Mayo and Fritz Roethlisberger in the 1920s. This study established the behavioral change that happened due to an awareness of being observed, resulting in active compliance with the supposed wishes of researchers, because of special attention received, or positive response to the stimulus being introduced.
Action Centered Leadership is a model developed by John Adair and focuses on the three responsibilities of a leader which are achieving the task, managing the team, and managing individuals. All these action elements are mutually dependent and important for any leader.
Trait theories of leadership identify the specific personality traits that distinguish leaders from non-leaders. The trait model of leadership is based on the traits or characteristics of leaders that make them successful in their leading role. These theories use heritable attributes to predict leadership effectiveness.
In this study of power, Raven identified five bases of power as coercive, reward, legitimate, referent, and expert. The 5 Types of Power can help you decide when it is appropriate to use a particular type of power in important situations. Leadership involves authority and it is very important for leaders to understand what type of power they're using.
Attribution Theory of Leadership
The attribution theory of leadership deals with the formation of individual opinions about the reasons for particular events or observations. People will always try to understand why people do what they do. The leader will make a judgment about his employees based on his attribution of the causes of the employees' performance. Individuals will also make inferences about the leader and react to poor performance by the leader.
Self-Fulfilling Prophecy (SFP) Leader Theory
Pygmalion theory of Leadership is a model of SFP at work involving supervisory expectancy based on the pygmalion effect. This effect is a type of self-fulfilling prophecy (SFP) in which raising leader's expectations regarding subordinate performance boosts the group's performance. Managers who are led to demand more from their team, lead the team to better performance. There is some evidence that the SFP effect does exists.
In emergent leadership, the leader is not appointed or elected to the leadership role but emerges as the leader as he is perceived by others over time as a result of the group's interaction. A person steps up as the leader over time by taking on tasks voluntarily, helping others complete their tasks better, and building consensus among groups.
Blake and Mouton Managerial Grid is a style leadership model that identified five manager styles based on two dimensions viz concern for people and the concern for production. Managerial Grid uses concern for production style which is largely based on McGregor's Theory X.
Trait theories of leadership explain the leadership traits that have been studied to determine what makes certain people great leaders. The practical application of the theory is looking at how the leader‟s behavior affects their subjects.
Participative Leadership Theories
Participative leadership theories rely on the involvement of different participants and suggest that the ideal leadership style is one that takes the inputs of others into account. Participative leaders encourage participation and contributions from group members and involve them in the decision-making process. Participative leadership tries to achieve through people, teamwork and collaboration.
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