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Effective Leadership: Attributes and Success

Updated: Dec 8, 2018

Effective leadership is a key component of organizational success as it provides the opportunity to maximize shareholders wealth through reaching desired goals. Oftentimes, organizations hire ineffective managers which causes high turnover, and reduces shareholder wealth.

According to in 2016, a Gallup poll found that only 18% of managers demonstrate a high level of talent for managing others, therefore 82% of managers are ineffective at leading people. Gallup estimated that this lack of leadership capability costs U.S. corporations up to $550 billion annually.

The Problem

Historically managers have been promoted based on tenure and previous leadership experience, although leadership attributes may not have been taken into consideration. After the hiring process new hires are trained, and it is assumed that they will be effective leaders. This post investigates how leadership attributes and self-efficacy characteristics may result in managers hiring more effective leaders that can perform their tasks effectively, ultimately leading to success within an organization.

What is Self -Efficacy

Self-efficacy is how an individual views their personal abilities regarding how well they can perform a task and how motivated they are to achieve goals. Bandura, who developed the theory, believes that individual self-efficacy is derived from four main sources: mastery experiences, physiological and emotional stresses, vicarious experiences, and social persuasion (These components determine how efficacious an individual is). Research based on the self-efficacy theory has found that personal efficacy influences the goals people choose and how long they will persist in the face of difficulties, obstacles and disappointments.

Over the last two decades, research findings have demonstrated a consistent relationship between self-efficacy and work-related performance. Self-efficacy perceptions in a leader make a difference in their leadership style, for example more efficacious leaders are more effective. Additionally, leadership self-efficacy was found to predict leadership behavior, and distinguish leaders from non-leaders.

How Do Self-Efficacy and Transformational Leadership Relate?

Transformational leadership, developed by Burns, is comprised of characteristics that help followers grow and develop into leaders by responding to followers’ needs by empowering them and by aligning objectives and goals to the organization.

The four components are of the theory are (a) intellectual stimulation which encourages creativity among followers, (b) individualized consideration is when leaders offer support and encouragement to individual followers, (c) inspirational motivation allows leaders the ability to articulate vision, and motivate followers to achieve common goals, and (d) idealized influence which enables leaders to serve as role models .

Research has shown that self-efficacy relates to performance, and establishes a strong connection with transformational leadership, also that leadership self-efficacy beliefs are associated with transformational leadership traits. There is a positive relationship between self-efficacy beliefs and transformational leadership behaviors, for example, higher efficiency and efficacy beliefs are correlated to higher transformational leadership behaviors. These findings support that leadership attributes are influenced by perceived self-efficacy and that transformational leadership is a key attribute that employers can identify to result in effective leadership.

Self-efficacy appears to enhance motivation and the beliefs that a leader has regarding their abilities (perceived self-efficacy), while transformational leadership traits lead an individual to possess high self-efficacy levels which enhances leadership effectiveness. Deciphering the personality traits that comprise effective leadership is imperative to ensure effective leaders are hired.

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