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.
The Path-Goal theory defines the characteristics of followers and organizational context and the corresponding leadership style best suited to these factors. A leader should adapt to a behavior that is most relevant for a given employee and work environment mix to achieve a goal. The application of theory drives increased employees' motivation, empowerment, and satisfaction resulting in increased productivity.
Robert Katz identified three leadership skills called - technical skills, human skills, and conceptual skills as the basic personal skills essential for leadership. Leaders must possess these three skills that assist them in optimizing a leader's performance. Technical skills are related to the field, human skills are related to communicating with people and conceptual skills related to setting the vision.
Socio-technical theory of leadership focus on the presence of two subsystems in every organization, the interrelatedness of social and technical aspects of an organization. Theory pertains to the social aspects of people and technical aspects of an organization, which means structure and processes within the organization.
Trait Theory of Leadership is based on the assumption that people are born with inherited traits and some traits are particularly suited to leadership. The theory aims to discover specific leadership & personality traits and characteristics proven to predict the likelihood of success or failure of a leader.
There are four characteristics of leadership that help us to understand the character of leadership as a concept. 1. Leadership is a process, 2. Leadership involves influence, 3. Leadership always occurs in a group context and 4. Leadership involves goal attainment. These are the four components that make up the character of the 'leadership' term and help us to define the leadership concept. All of these components of leadership have common characteristics.
Symbolic Interaction and Social Change
George Herbert Mead, an American philosopher, affiliated with the University of Chicago founded the theory of symbolic interactionism. A major aspect of this is that people interact by symbols both verbal and non-verbal signals and every interaction makes a contribution to the mental make-up of the mind thus every interaction with someone, changes you and you go away a different person signifying that humans and change go together.
Transformational Theories of Leadership
Transformational leadership theories focus on the leadership approach where the leader encourages, inspires employees to innovate and create positive and valuable organizational change. A transformational leader works towards “transforming” the culture to one that cultivates trust, mutual admiration, loyalty, and respect with the end goal of developing followers into leaders. Transformational leaders are known to be visionary, inspiring, daring, risk-takers, and thoughtful.
Normative leadership theories are built on moral principles and tell leaders how they ought to act. Victor Vroom formulated the normative model of leadership that specifically address leader behavior explicitly built on moral principles or norms. Normative leadership theories tell leaders how they should act to raise the moral performance inside the working group and manage their different responsibilities.
Maslow's hierarchy of needs is a motivational theory that explains that people are motivated by five basic categories of human needs. These needs are physiological, safety, love and belonging, esteem, and self-actualization. There is a little scientific basis for this concept of a hierarchy of needs.
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.
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