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Trust, Charismatic Leadership, and Power
Trust is 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. 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.
Most people can become good leaders but few people who become leaders can also be thought of as
“charismatic.” 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 �eld of business either. Donald
Trump, Martha Stewart, Dave Thomas—the founder of Wendy’s, David O. Selznick—the �amboyant
producer of Gone with the Wind and other big Hollywood productions, Steve Jobs—founder of Apple
Computers, are all excellent examples of people who were charismatic leaders. However, it is dif�cult
to describe the qualities that made these leaders charismatic.
Lastly, the concept of power is central to any discussion on leadership. Power is the ability to in�uence
the behavior of others. Leaders often use power to in�uence the behavior of their subordinates in
order to accomplish goals. 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.
Not long ago, most discussions of leadership were about leaders – their personality traits, how to
identify and groom those with ‘leadership potential,’ and what were the skills that leaders employed.
Leadership theorists nowadays stress authenticity, EQ and relationships. This makes intuitive sense.
But it isn’t just a fad; there is a solid reason behind the shift. It is driven by changes in the world. Above
all, it re�ects the growing importance of trust.
AdditionalMaterials
Trust, Charismatic Leadership, Emotional Intelligence, and Power
(media/week4/SUO_MGT3002%20W4%20L3.pdf?
_&d2lSessionVal=hYlm1UjgTwcKXFD7Nm0nCa1Zv&ou=89692)

https://myclasses.southuniversity.edu/content/enforced/89692-17104265/media/week4/SUO_MGT3002%20W4%20L3.pdf?_&d2lSessionVal=hYlm1UjgTwcKXFD7Nm0nCa1Zv&ou=89692
Week 4 Discussion $6.00
· Support your answers with examples and research and cite your research using the APA format.
· Start reviewing and responding to the postings of your classmates as early in the week as possible.
Respond tooneof the following questions:
· Research transactional and transformational leadership. What are the differences between the two styles? Analyze whether a leader can be both.
· Trust is one of the most important variables for organizational performance. What is the responsibility of leaders to build trust in the culture of the organization? What are the most important factors for building trust?
· One of the factors driving change in organizations is globalization. How has globalization affected the way leaders must lead? What are the most important qualities a leader must possess (or things she or he must do) to lead in a global or multi-cultural environment?
Situational Leadership
Considering the situational factor, Fred Fiedler’s studies led to what are referred to as
theContingency Theories of Leadership. In his initial studies, Fiedler allocated simple tasks to small
groups of children with a designated leader. The leaders in different groups were told to behave in
speci�c ways and conditions for each group were varied. To his surprise, Fiedler found that the
children performed tasks well under a people-oriented leadership style only when conditions were
moderately favorable or unfavorable. However, when conditions were highly favorable or highly
unfavorable, performance was high under autocratic leadership.
Inspired by the contingency approach, Paul Hersey and Ken Blanchard developed a model called
theSituational Leadership Theorywhich has become very popular. This theory focuses on employees
as well as management. Hersey and Blanchard looked at two factors, employee skills and attitude.
They identi�ed four kinds of leadership behaviors or styles that are dependent upon the skill and
attitude factors:
Delegating
Selling
Participating
Telling
Contemporary Issues in Leadership – Recently people have begun to express a need for strong
leadership that inspires trust, faith, and a sense of security—physical, emotional, and economic. These
needs have arisen as a consequence of the events of September 11, 2001, and their impact on the
economy, as well as some high-pro�le cases of fraudulent and illegal activities by some large
corporations. As a result, the issue of trust has become a priority for Americans as well as for
employees and management. This issue becomes even more important during an election year and
managers need to understand the emotional and theoretical nature of this issue.
Leaders of today’s corporations must cope with a unique set of challenges. Technological, social, and
economic forces compel leaders to address these issues in order to stay ahead of the competition.
Some of these challenges include:
Globalization of business leading to
cross cultural competency requirements
greater demands of travel
Geographic shifts in economic power
Growth of strategic alliances
An accelerating avalanche of information and democratization of access to information
Daily innovations in technology
Changing demographics and a changing workforce
Changing expectations of a more educated workforce
Flattening of organizations, increased workloads and expanding skill requirements
AdditionalMaterials
Contingency Theories, Situational Leadership, Issues in Leadership
(media/week4/SUO_MGT3002%20W4%20L2.pdf?
_&d2lSessionVal=hYlm1UjgTwcKXFD7Nm0nCa1Zv&ou=89692)

https://myclasses.southuniversity.edu/content/enforced/89692-17104265/media/week4/SUO_MGT3002%20W4%20L2.pdf?_&d2lSessionVal=hYlm1UjgTwcKXFD7Nm0nCa1Zv&ou=89692

Trust, Charismatic Leadership, Emotional Intelligence,
and Power

© 2016 South University

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Organizational Behavior
©2016 South University

2 Trust, Charismatic Leadership, Emotional Intelligence, and Power
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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

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3 Trust, Charismatic Leadership, Emotional Intelligence, and Power
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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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Organizational Behavior
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4 Trust, Charismatic Leadership, Emotional Intelligence, and Power
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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),

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5 Trust, Charismatic Leadership, Emotional Intelligence, and Power
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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.

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Organizational Behavior
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6 Trust, Charismatic Leadership, Emotional Intelligence, and Power
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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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Organizational Behavior
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7 Trust, Charismatic Leadership, Emotional Intelligence, and Power
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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

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Organizational Behavior
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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.

Leadership, Traits and Styles
Many people equate leadership with management. Some even use the two terms “manager” and
“leader” interchangeably.
However,leadershipactually deals with developing strategies of change and creating new systems and
organizations as well as instituting revolutionary change within existing systems and
organizations.Managementdeals with the day-to-day, month-to-month, and year-to-year functioning
of systems and organizations.
“What makes a good leader?” Until the 1940s, researchers tried to answer this question by identifying
the qualities and characteristics that are necessary for effective leadership. These �ndings and
conclusions are referred to as thetrait theories of leadership. According to these theories,
personality, social status, physical characteristics, and intelligence are all factors that contribute to
good leadership. In addition, some studies of physical characteristics actually focused on physical size
to determine whether this was an important factor.
From the �ndings and conclusions of the Ohio State University and Michigan State University studies,
Robert Blake and Jane Mouton developed the well-known “Managerial Grid” to show the relationship
between two leadership styles. They called these styles “Concern for People” and “Concern for
Production.”
The four fundamental factors of production are land, labor, capital and entrepreneurship. The �nal
factor belies the vital importance of leadership in business settings. Leadership acts as the catalyst
that makes all other elements work together; without leadership, all other business resources lie
dormant. Savvy business leaders are in tune with the needs and issues of their subordinates, and keep
up to date on new developments in leadership theory and methodology to maximize their
effectiveness.
AdditionalMaterials
Leadership, Traits and Behavior, Leadership Styles
(media/week4/SUO_MGT3002%20W4%20L1.pdf?
_&d2lSessionVal=hYlm1UjgTwcKXFD7Nm0nCa1Zv&ou=89692)

https://myclasses.southuniversity.edu/content/enforced/89692-17104265/media/week4/SUO_MGT3002%20W4%20L1.pdf?_&d2lSessionVal=hYlm1UjgTwcKXFD7Nm0nCa1Zv&ou=89692

Leadership, Traits and Behavior, Leadership Styles

© 2016 South University

Page 2 of 2
Organizational Behavior
©2016 South University

2 Leadership, Traits and Behaviors, Leadership Styles
MGT3002 W4 L1

The four fundamental factors of production are land, labor, capital
and entrepreneurship. The final factor belies the vital importance of
leadership in business settings. Leadership acts as the catalyst
that makes all other elements work together; without leadership, all
other business resources lie dormant. Savvy business leaders are
in tune with the needs and issues of their subordinates, and keep
up to date on new developments in leadership theory and
methodology to maximize their effectiveness.

“What makes a good leader?” Until the 1940s, researchers tried to
answer this question by identifying the qualities and characteristics
that are necessary for effective leadership. These findings and
conclusions are referred to as the trait theories of leadership.
According to these theories, personality, social status, physical
characteristics, and intelligence are all factors that contribute to
good leadership. In addition, some studies of physical
characteristics actually focused on physical size to determine
whether this was an important factor.
Ultimately, these studies yielded inconclusive results. Many
researchers began to recognize that there are no universal traits
that can define and describe leadership. This led to a focus on

Page 3 of 2
Organizational Behavior
©2016 South University

3 Leadership, Traits and Behaviors, Leadership Styles
MGT3002 W4 L1
leadership behavior to explain effective leadership rather than
traits. The first behavioral studies were conducted at The Ohio
State University in the late 1940s. The researchers examined a
wide range of leadership behaviors and came to the conclusion
that Initiating structure and Consideration were two key elements
that defined good leadership.
Initiating structure refers to the degree to which the leader
structures various roles in order to achieve group goals. This
involves the organization and allocation of work, defining
schedules and establishing norms and work boundaries.
Consideration on the other hand, concerns relationship issues,
including levels of trust, respect for employees, and consideration
of employees’ feelings and expectations.
The Ohio State researchers concluded that leadership behavior
that was characterized by both initiating
structure and consideration was the most successful in terms of
goal attainment and was therefore indicative of the most effective
leadership.
Around the same time, similar studies were being conducted at
Michigan State University. The researchers hypothesized that
leadership consisted of either production-oriented or employee-
oriented behavior.

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Organizational Behavior
©2016 South University

4 Leadership, Traits and Behaviors, Leadership Styles
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The researchers concluded that employee-oriented leadership
behavior was associated with higher productivity and job
satisfaction, and thus more productive and effective leadership.

From the findings and conclusions of the Ohio State University and
Michigan State University studies, Robert Blake and Jane Mouton
developed the well-known “Managerial Grid” to show the
relationship between two leadership styles. They called these
styles “Concern for People” and “Concern for Production.”
Each of these leadership styles can be measured on a nine-point
scale (from low to high), as shown in the diagram below.

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Organizational Behavior
©2016 South University

5 Leadership, Traits and Behaviors, Leadership Styles
MGT3002 W4 L1

Blake and Mouton suggested that the 9,9 leadership style (high
concern for both people and production) delivers the best
performance, while the 1,1 style results in poor performance. They
described the 9,1 style as autocratic leadership behavior, and the
1,9 style as a laissez-faire style (A French term meaning “to leave
alone”).
For example, before September 11, 2001, New York City’s mayor,
Rudolph Giuliani, exhibited behavior leadership that was perceived
to be of the 9,1 style—he was seen as a hard task master with little

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Organizational Behavior
©2016 South University

6 Leadership, Traits and Behaviors, Leadership Styles
MGT3002 W4 L1
consideration or concern for others, and most people felt that he
was arrogant. However, after September 11, his leadership
behavior was perceived as a very strong 9,9 style, and he had
earned the respect and admiration of New Yorkers.
The laissez-faire style (1,9) is genial and noninterfering, and some
employees are more productive under this style because they can
be self-directed. This style can be an effective one when the
employees are committed, honest, and hard working.

Contingency Theories, Situational Leadership, Issues
in Leadership

© 2016 South University

Page 2 of 2
Organizational Behavior
©2016 South University

2 Contingency Theories, Situational Leadership, Issues in Leadership
MGT3002 W4 L2

Taking into account the situational factor, Fred Fiedler’s studies led
to what are referred to as the Contingency Theories of
Leadership. In his initial studies, Fiedler allocated simple tasks to
small groups of children with a designated leader. The leaders in
different groups were told to behave in specific ways and
conditions for each group were varied. To his surprise, Fiedler
found that the children performed tasks well under a people-
oriented leadership style only when conditions were moderately
favorable or unfavorable. However, when conditions were highly
favorable or highly unfavorable, performance was high under
autocratic leadership.
This conclusion led Fiedler to experiment further with adults. From
these studies he developed the contingency model, which
assumes that the appropriate leadership style will be contingent
upon situational factors. This is in contrast with the behavioral
theories that implicitly assume that the same leadership behavior
will generate the same kinds of outcomes, regardless of the
situation.

Situational Leadership Theory
Inspired by the contingency approach, Paul Hersey and Ken
Blanchard developed a model called the Situational Leadership
Theory which has become very popular. This theory focuses on
employees as well as management. Hersey and Blanchard looked

Page 3 of 2
Organizational Behavior
©2016 South University

3 Contingency Theories, Situational Leadership, Issues in Leadership
MGT3002 W4 L2
at two factors, employee skills and attitude. They identified four
kinds of leadership behaviors or styles that are dependent upon
these two factors.

Hersey and Blanchard believed that if the employees are both
willing and have the required skills and abilities then management
could take a more passive role. They referred to this leadership
style as the delegating style in which minimal supervision and
control are necessary.
If the employees are willing but unable the leader needs to focus
on both employee and task orientation. In this situation the
employees need help with their abilities and skills, and the leader
must respond with the selling style—providing a lot of instructional
information on how to perform tasks, while also being very
supportive. An example would be where an employee has joined a
new organization or has been promoted. Even though the
employee is willing he or she may be unable to perform a task
because he or she lacks knowledge or skill.
If the employees are unwilling but able, the leader needs a strong
people-oriented style that emphasizes participation. With proper

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4 Contingency Theories, Situational Leadership, Issues in Leadership
MGT3002 W4 L2
support and the opportunity to participate in decision-making,
employees would be more willing to participate in the process of
goal attainment. Hersey and Blanchard have referred to this as
the participating style—the effort being to use a participative
process to persuade unwilling employees to accept the goals and
tasks set for them.
Finally, if the employees are both unwilling and unable, the leader
has to continually provide clear and specific instructions to
compensate for their lack of skills and motivation. Hersey and
Blanchard have termed this the telling style, where the manager
must constantly tell employees what to do and how to do it.
Because different situations may require a variety of leadership
styles, management needs to be flexible in their approach to every
situation. Without this flexibility both employee and management
performance will suffer, and in extreme cases, the results can be
disastrous for a company.
For example, if your company suddenly receives a large order with
a very tight delivery schedule, you may need to temporarily adopt a
telling or selling style, or a mix of these styles, even with
employees who are willing and able. You would incorporate this
style to meet the delivery schedule and then revert to your regular
management style once the order is complete.
Contemporary Issues in Leadership
Recently people have begun to express a need for strong
leadership that inspires trust, faith, and a sense of security—
physical, emotional, and economic. These needs have arisen as a
consequence of the events of September 11, 2001, and their
impact on the economy, as well as some high-profile cases of
fraudulent and illegal activities by some large corporations.

Page 5 of 2
Organizational Behavior
©2016 South University

5 Contingency Theories, Situational Leadership, Issues in Leadership
MGT3002 W4 L2
To many people New York City mayor, Rudolph Giuliani has
emerged as a strong and charismatic leader through his handling
of post-September 11 events. According to opinion polls, President
Bush was also perceived as a strong and charismatic leader as a
result of these events. However, because trust in corporate and
political leadership has diminished as a result of continuing
scandals, this has become a major concern for both organizations
and employees.
As a result the issue of trust has become a priority for Americans
as well as for employees and management. This issue becomes
even more important during an election year and managers need
to understand the emotional and theoretical nature of this issue.

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