The Value Based Leadership Theory

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, contingent on performance and in

a fair manner, will clarify expectancies of subordinates concerning work

goals and rewards, and will effectively motivate subordinates. This theory

also predicts that leader consideration toward subordinates provides the

psychological support subordinates require, especially in times of stress

and frustration.

Path-goal theory suggests that either participative or directive

leader behavior can provide psychological structure and direction and

therefore clarify subordinates' role demands. Theoretically, directive

leader behavior will be dysfunctional and participative leader behavior

will be functional when subordinates are highly involved in their work,

perceive themselves as having a high level of task related knowledge,

and/or prefer a high level of autonomy. Meta-analyses of 135 relationships

tested in prior studies provide support for these assertions (Wofford &

Liska, 1993).

Dissonance Theory and Competing Values

According to cognitive dissonance theory, individuals experience

anxiety-inducing cognitive dissonance when their self-evaluative

cognitions, feelings and behavior are in conflict with each other

(Festinger, 1980). Under such conditions, individuals are strongly

motivated to reduce the dissonance by changing one or more of the dissonant

components--either their behavior, their cognitions, or their feelings. It

follows from dissonance theory that when leaders appeal to ideological

values of followers and also administer extrinsic material rewards strictly

contingent on follower performance, they will induce cognitive dissonance

in followers. Offering strong extrinsic incentives for doing what is

claimed to be morally correct will theoretically induce dissonance, and is

likely to undermine the effects of leaders' appeals to ideological values.

From dissonance theory, we would expect that with the exception of social

rewards such as approval and recognition, contingent reward behavior on the

part of leaders will undermine the effects of value based leader behavior.

Equity Theory

Equity theory asserts that when individuals perceive the ratio of

their contributions to their rewards (intrinsic or extrinsic) to be equal

to the ratio of contributions to rewards of others, they will believe that

they are treated fairly (Adams, 1963). We expect that under conditions of

perceived unfairness followers will feel resentment, be demotivated, will

not support and may even resist attempts by leaders to influence them.

Situational Strength

Mischel (1973) has argued that the psychological strength of

situations influences the degree to which individual dispositions such as

motives or personality traits are expressed behaviorally. Strong

situations are situations in which there are strong behavioral norms,

strong incentives for specific types of behaviors, and clear expectations

concerning what behaviors are rewarded. According to this argument, in

strong situations, motivational or personality tendencies are constrained

and there will be little behavioral expression of individual dispositions.

Thus, in organizations that are highly formalized and governed by well-

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