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motivation to contribute to the organization and to the collective vision.

Members are more inclined to support changes in technology, structure and

strategies introduced by top management, which may result in an

organizational culture characterized by values oriented toward teamwork and

meeting customers', clients', constituents' and competitive needs. There

ensues a marked reduction in intra-organizational conflict and a high degree

of team effort and effectiveness. As noted above, members expend effort above

and beyond the call of duty, and sacrifice their self-interest in the

interest of the organization. As a result, individual motivation,

organizational culture, strategy and structure are likely to become aligned

with the collective vision.

A reinforcing process may also occur whereby organizational members increase

their respect for and confidence in the leader and each other based on the

resulting organizational success. As a result, their initial confidence and

motivation is further reinforced. Such effects are consistent with the notion

of romanticized leadership (Meindl, Ehrlich & Dukerich, 1985). The

resulting increased confidence in the leader in turn gives the leader more

influence and thus contributes to the leader's ability to further influence

organizational performance.

This is an “ideal type” theoretical scenario. Clearly all the aspects of

this scenario will not always come to fruition in response to value based

leadership. No such claim is made. Rather, it is argued that organizational

members will be motivated on the basis of shared internalized values and

identification with the leader and the collective, which are far more

motivational than alternative bases of motivation.

It is possible that value based leaders may introduce flawed strategies and

that the result may be organizational decline or failure rather than

improvement and success. It is also possible that the leader may stand for

socially undesirable values such as ethnocentrism, racism, persecution,

dishonesty, or unfair or illegal competitive practices (Lindholm 1990).

Regardless of the strategy or values expressed by the leader, it is argued

that a relationship based on value identification between leader and

organizational members will result in increased member commitment and

motivation, as well as increased organizational cohesion.

EMPIRICAL EVIDENCE

There is extensive empirical evidence with respect to the effects of behaviors

specified by value based leadership theory. Charismatic, visionary, and

transformational theories of leadership are precursors of the leader behaviors

specified by value based leadership theory. Tests of these theories have been

based on various operationalizations that qualify as measures of value based

leadership including interviews (Howell & Higgins, 1990), laboratory

experimentation (Howell & Frost, 1989; Kirkpatrick & Locke, 1996),

questionnaires (Lowe, Kroeck & Sivasubramaniam, 1995), and quantified

archival data (House, Spangler & Woycke, 1991). In all of these tests, the

leader behavior measured consists of articulating an organizational vision and

behaving in ways that reinforce the values inherent in the vision, thus

qualifying as indirect evidence relevant to the effects of value based

leadership. Space limitations prevent a detailed review of the evidence.

However, Bass and Avolio (1993), House and Shamir (1993), Lowe et al,. (1995),

and Yukl (1994), present overviews of these studies. With surprising

consistency these empirical studies have demonstrated consistently that value

based leader behavior predicts unusual levels of leader effectiveness directed

toward enhancing organizational performance.

Support for the effects of value based leadership is illustrated by a recent

meta-analysis of the charisma subscale of the Bass and Avolio (1989)

Multifacet Leadership Questionnaire (MLQ). The MLQ charisma subscale

describes relationships between subordinates and superiors. Superiors who

receive high scores on this scale are described by subordinates as having an

exciting vision of the future for the organization they lead, and being

exceptionally motivational, trustworthy, and deserving of respect.

Support for the theoretical main effects of value based leader behavior has been

demonstrated at several levels of analysis including dyads, small informal

groups, major departments of complex organizations, overall performance of

educational and profit making organizations, and nation states. The evidence

is derived from a wide variety of samples including military officers,

educational administrators, middle managers, subjects in laboratory experiments

and management simulations, US presidents and chief executive officers of

Fortune 500 firms (Bass & Avolio, 1993; House & Shamir, 1993; Waldman,

Ramirez & House, 1996).

The evidence shows that the effects of value based leader behavior are rather

widely generalizable in the United States and that they may well generalize

across cultures. For instance, studies based on the charisma scale of the MLQ

have demonstrated similar findings in India (Periera, 1987), Singapore (Koh,

Terborg & Steers, 1991), The Netherlands (Koene, Pennings & Schreuder,

1991), China, Germany, and Japan (Bass, 1997).

In summary, the studies based on various operationalizations of value based

leadership clearly show that this genre of leadership results in a high level

of follower motivation and commitment and well-above-average organizational

performance, especially under conditions of crises or uncertainty (Pillai &

Meindl, 1991; House, Spangler, & Woycke, 1995; Waldman, Ramirez &

House, 1996; Waldman, Atwater & House, 1996).

NEWLY INTEGRATED THEORIES

The value based theory of leadership integrates the precursor theories

discussed above with a number of assertions advanced in several psychological

theories of motivation and behavior. Following is a brief review of the

psychological theories that are integrated into the Value Based Leadership

Theory.

McClelland's Theories of Non-conscious Motivation

According to this theory, the motivational aspects of human beings can be

understood in terms of four non-conscious motives in various combinations

(McClelland, 1985). These motives are the achievement, power, affiliation,

and social responsibility motives. McClelland has developed a theory of

entrepreneural effectiveness based on the role of achievement motivation, and

a more general theory of leader effectiveness consisting of theoretical

assertions concerning the optimum combination of the above four motives for

effective leadership. This theory is entitled the Leader Motive Profile

Theory (LMP). In the following sections we discuss the four motives

discussed by McClelland and the LMP theory.

Achievement Motivation

Achievement motivation is defined as a non-conscious concern for achieving

excellence in accomplishments through one's individual efforts

(McClelland, Atkinson, Clark, & Lowell, 1958). Achievement motivated

individuals set challenging goals for themselves, assume personal

responsibility for goal accomplishment, are highly persistent in the pursuit of

goals, take calculated risks to achieve goals and actively collect and use

information for feedback purposes. Achievement motivation is theoretically

predicted to contribute to effective entrepreneurship (McClelland, 1985) and

effective leadership of small task oriented groups (House et al., 1991).

Litwin and Stringer (1968) demonstrated experimentally that small groups led

by managers who enacted achievement oriented and arousing behaviors were more

effective than groups with managers who did not.

In management positions at higher levels in organizations, and particularly

in organizational settings where technical requirements are few and impact on

others is of fundamental importance, managerial effectiveness depends on the

extent to which managers delegate effectively and motivate and co-ordinate

others. Theoretically, high achievement motivated managers are strongly

inclined to be personally involved in performing the work of their

organization and are reluctant to delegate authority and responsibility.

Therefore, high achievement motivation is expected to predict poor

performance of high-level executives in large organizations. House et al.

(1991) found that achievement motivation of U.S. presidents was significantly

inversely related to archival measures of U.S. presidential effectiveness.

Affiliative Motivation

Affiliative motivation is defined as a non-conscious concern for

establishing, maintaining, and restoring close personal relationships with

others. Individuals with high affiliative motivation tend to be non-

assertive, submissive, and dependent on others (McClelland, 1985).

Theoretically, highly affiliative motivated managers are reluctant to monitor

the behavior of subordinates, to convey negative feedback to subordinates

even when required, or to discipline subordinates for ethical transgressions

or violations of organizational policies. Highly affiliative motivated

managers are also theoretically expected to manage on the basis of personal

relationships with subordinates and therefore show favoritism toward some.

House et al. (1991) found that the affiliative motive was significantly

negatively correlated with U.S. presidential charismatic leadership and

archival measures of U.S. presidential effectiveness.

Power Motivation

Power motivation is defined as a non-conscious concern for acquiring status

and having an impact on others. Individuals with high power motivation tend

to enjoy asserting social influence, being persuasive, drawing attention to

themselves, and having an impact on their immediate environment including the

people with whom they interact. Theoretically, if enacted in a socially

constructive manner, high power motivation should result in effective

managerial performance in high level positions (McClelland, 1975; 1985).

However, unless constrained by a responsibility disposition, power motivated

managers will exercise power in an impetuously aggressive manner for self

aggrandizing purposes to the detriment of their subordinates and

organizations.

High power motivation induces highly competitive behavior. Therefore, when

unconstrained by moral inhibition, power motivation is theoretically

predictive of leader effectiveness when the role demands of leaders require

strong individual competitiveness, aggressiveness, manipulative exploitive

behavior, or the exercise of substantial political influence. The power

motive was found by House et al. (1991) to significantly predict presidential

charismatic behavior and archival measures of presidential effectiveness.

Responsibility Disposition

According to McClelland, individuals who have a high concern for the moral

exercise of power will use power in an altruistic and collectively-oriented

manner. Indicators of high concern for responsibility are expressions of

concern about meeting moral standards and obligations to others, concern for

others, concern about consequences of one’s own action, and critical self

judgment.

Winter and Barenbaum (1985) developed and validated a measure of concern for

moral responsibility, which they label the responsibility disposition1

. The measure is based on quantitative content analysis of narrative text

material. Winter (1991) demonstrated that the responsibility disposition, in

combination with high power and low affiliative motivation, was predictive of

managerial success over a sixteen-year interval.

The responsibility motive should be predictive of leader integrity and

leaders' concern for the consequences of their own actions on others. Leaders

with high responsibility disposition are expected to stress the importance of

keeping one's word, honesty, fairness, and socially responsible behavior.

Thus, we expect the responsibility disposition to be associated with value

based leader behavior, supportive leader behavior, fairness, follower trust

and respect for the leader and commitment to the leader’s vision, and

consequently organizational effectiveness.

Leader Motive Profile Theory

McClelland (1975) argued that the following combination of non-conscious

motives are generic to, and predictive of, leader effectiveness: high power

motivation, moderate achievement motivation, high concern for the moral

exercise of power, and power motivation greater than affiliative motivation.

This combination of motives is referred to by McClelland (1975) as the Leader

Motive Profile (LMP).

According to LMP theory, the power motive is necessary for leaders to be

effective because it induces them to engage in social influence behavior, and

such behavior is required for effective leadership. Further, when the power

motive is higher than the affiliative motive, individuals do not engage in

the dysfunctional behaviors usually associated with high affiliation

motivation - favoritism, submissiveness, and reluctance to monitor and

discipline subordinates. Finally, when high power motivation is coupled with

a high concern for moral responsibility, individuals are predicted to engage

in the exercise of power in an effective and socially desirable manner.

Earlier research, also reviewed by McClelland (1985), suggests that the

achievement motive is a better predictor of leader effectiveness and success

in entrepreneurial organizations than LMP.

Theoretically the leader motive profile is predictive of managerial

effectiveness under conditions where leaders need to exercise social

influence in the process of making decisions and motivating others to accept

and implement decisions. In formal organizations these conditions are found

at higher levels and in non-technical functions. By contrast, in smaller

technologically based organizations, group leaders can rely on direct contact

with subordinates (rather than delegation through multiple organizational

levels), and technological knowledge to make decisions. Thus LMP theory is

limited to the boundary conditions of moderate to large non-technologically

oriented organizations (McClelland, 1975; Winter, 1978; 1991), and to

managers who are separated from the work of the organization by at least one

organizational level.

Several studies have demonstrated support for the LMP theory. Winter (1978)

found that LMP was predictive of the career success of entry level managers in

non-technical positions in the US Navy over an eight-year interval. Both

McClelland and Boyatzis (1982), and Winter (1991), in separate analyses of the

same data but with different operationalizations of LMP, found similar results

at AT&T over a sixteen-year interval. McClelland and Burnham (1976) found

high-LMP managers had more supportive and rewarding organizational climates,

and higher performing sales groups than low-LMP managers did in a large sales

organization. House, et al. (1991) found that the motive components of the LMP

predicted US presidential charisma and presidential performance effectiveness.

Since high LMP leaders have greater power than affiliative motivation it is

expected that they will be assertive and at least moderately directive.

Further, since they have high responsibility motivation it is expected that

thay will have highly internalized idological values - values concerning what

is morally right and wrong - and that they will thus stress ideological value

orientation, integrity, and fairness, as explained above, both verbally and

through personal example.

The Path-Goal Theory of Leadership

The essence of path-goal theory is that leader behaviors will be effective when

such behaviors complement formal organizational practices and the informal

social system by providing direction, clarification, support and motivational

incentives to subordinates, which are not otherwise provided (House, 1971;

House & Mitchell, 1974; House, 1996). According to the 1996 version of

path-goal theory, leaders who give approval and recognition of subordinates,

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