Thursday, March 23, 2017

Prof. Martin Shubik - Biography and Contribution

Martin Shubik is a mathematical economist at Yale and a pioneer of game theory and the "Edgeworthian revival" in general equilibrium theory.

His birthday is 24 March 1926.

Shubik was born in New York City in 1926. But, he received his early education in England. Then he moved to Canada where he graduated with a B.A. in mathematics and  an M.A. in political economy from the University of Toronto in 1947. Shubik joined  Princeton University in 1949, and received a Ph.D. in economics in 1953 under the supervision of Oskar Morgenstern, one of the founding fathers of game theory. The class notes Shubik took of Morgenstern’s lectures and in the correspondence with him throughout the years shows the influence of Morgenstern on him. Shubik made  life-long contributions to game theory and its application to economic problems.

Major Works of Martin J. Shubik

"A Business Cycle Model with Organized Labor Considered", 1952, Econometrica.

"A Comparison of Treatments of a Duopoly Problem", 1955, Econometrica.
"Market Form: Intent of the firm and market behavior", 1957, ZfN.
"Edgeworth Market Games", 1959, in Luce and Tucker, editors, Contributions to the Theory of Games IV.
Strategy and Market Structure, 1959.

"Objective Functions and Models of Corporate Optimization", 1961, QJE.
"Approaches to the Study of Decision Making Relevant to the Firm", 1961, J of Business [cwls]
"Some Experimental Non-Zero Sum Games with Lack of Information About the Rules", 1962, Management Science [cwls]
"Incentives, Decentralized Control, the Assignment of Joint Costs and Internal Pricing", 1962, Management Science. [cwls]
"Game Theory and the Study of Social Behavior", 1964, in Shubik, editor, Game Theory and Relate Approaches.
"Quasi-Cores in a Monetary Economy with Non-Convex Preferences", with L.S.Shapley, 1966, Econometrica. [cwls]
"Concepts and Theories of Pure Competition", with L.S. Shapley, 1967, in Shubik, editor, Essays in Mathematical Economics.

"Ownership and the Production Function", with L.S. Shapley,  1967, QJE. [cwls]
"Simulation of  Socio-Economic Systems", 1967, General Systems [cwls]
"Toward a Study of Bidding Processes Part IV: Games with Unknown Costs", with J.H. Griesmer and R.E. Levitan,  1967, Naval Research Logistics Quarterly [cwls]
"Game Theory: Economic Applications", 1968, IESS [cwls]
"Extended Edgeworth Bargaining games and Competitive Equilibrium", 1968, Metroeconomica.[cwls]
"A Further Comparison of Some models of Duopoly", 1968, Western EJ. [cwls]
"Welfare, Static and Dynamic Solution Concepts", 1968, Décision: Agrégation et Dynamique des Ordres de Préférence [cwls]
"Pure Competition, Coalitional Power and Fair Division", with L.S.Shapley,1969, IER. [cwls]
"On Market Games",with L.S.Shapley, 1969, JET. [cwls]
"On the Core of an Economic System with Externalities" with L.S.Shapley, 1969, AER.
"Price Strategy Oligopoly with Product Variation" with L.S.Shapley, 1969, Kyklos. [cwls]
"Voting, or a Price System in a Competitive Market Structure", 1970, APSR [cwls]
"Game Theory, Behavior and the Paradox of the Prisoner's Dilemma: Three solutions", 1970, Journal of Conflict Resolution.
"The Bridge Game Economy: An example of invisibilities", 1971, JPE. [cwls]
"Pecuniary Externalities: A game theoretic analysis", 1971, AER. [cwls]
"The Dollar Auction Game: A paradox in non-cooperative behavior and escalation", 1971, J of Conflict Resolution
"Games of Status", 1971, Behavioral Science [cwls]
"Price Variation Duopoly with Differentiated Products and Random Demand" with R. Levitan, 1971, JET [cwls]
"Noncooperative Equilibria and Strategy Spaces in an Oligopolistic Market" with R. Levitan, 1971,  in Kuhn and Szego, editors, Mathematical  Models of Action and Reaction [cwls]
"An Experiment with Ten Duopoly Games and Beat-the-Average Behavior", with Martin Riese, 1971 [pdf]
"On the Scope of Gaming", 1972, Management Science [cwls]
"Price Duopoly and Capacity Constraints", with R. Levitan, 1972, IER [cwls]
"The Assignment Game, I: The core" with L.S.Shapley, 1972, Int Journal of Game Theory. [pdf]
"Fiat Money and Noncooperative Equilibrium in a Closed Economy", 1972, Int Journal of Game Theory.
"Commodity Money, Credit and Bankruptcy in a General Equilibrium Model", 1972, Western EJ.
Models, Simulations and Games: a survey, with G.D. Brewer, 1972
"Fiat Money in an Economy with One Nondurable Good and No Credit (A Noncooperative Sequential Game)." with W. Whitt, 1973,  in A. Blaquiere, editor, Topics in Differential Games [cwls]
"Commodity Money, Oligopoly, Credit and Bankruptcy in a General Equilibrium Model", 1973, Western EJ. [cwls]
"Information, Duopoly and Competitive Markets: A sensitivity analysis", 1973, Kyklos. [cwls]
"The Core of a Market Game with Exogenous Risk and Insurance", 1973, New Zealand Economic Papers [cwls]
"The General Equilibrium Model: Barter and Trust, or Mass Markets with Money and Credit", 1974, Econ Record [cwls]
"Money, Trust and Equilibrium Points in Games in Extensive Form", 1975, ZfN [cwls]
"Oligopoly Theory, Communication, and Information", 1975, AER
"Competitive Equilibrium, the Core, Preferences for Risk and Insurance Markets", 1975, Econ Record
"The General Equilibrium Model is Incomplete and Not Adequate for the Reconciliation of Micro and Macro-economic Theory", 1975, Kyklos
Games for Society, Business and War, 1975.
The Uses and Methods of Gaming, 1975.
"A Non-Cooperative Model of a Closed Economy with Many Traders and Two-Bankers", 1976, ZfN.
"Competitive Outcomes in the Cores of Market Games" with L.S. Shapley, 1976, IJGT
"Trade Using One Commodity as a Means of Payment" with L.S. Shapley, 1977, JPE.
"Competitive and Controlled Price Economies: the Arrow-Debreu model revisited", 1977, in Schwodiauer, editor, Equilibrium and Disequilibrium in Economics.
"An Example of a Trading Economy with Three Competitive Equilibria", 1977, with L.S. Shapley, JPE
"Competitive Equilibrium Contingent Commodities and Information", 1977, J of Finance
"The Optimal Bankruptcy Rule in a Trading Economy using Fiat Money", with C. Wilson, 1977, ZfN.

"A Theory of Money and Financial Institutions", 1978, Economie Appliquee.
"Trade and Prices in a Closed Economy with Exogenous Uncertainty, Different Levels of Information, Money and Compound Futures Markets", with P. Dubey, 1977, Econometrica
"A Closed Economic System with Production and Exchange Modelled as a Game of Strategy"  with P. Dubey, 1977, JMathE
"A Closed Economy with Exogenous Uncertainty, Different Levels of Information, Money, Futures and Spot Markets" with P. Dubey, 1977, IJGT
"The Nucleolus as a Noncooperative Game Solution", with H.P. Young, 1978, in Ordeshook, editor, Game Theory and Political Science.
"Duopoly with Price and Quantity as Strategic Variables", with R. Levitan, 1977, IJGT
"A Theory of Money and Financial Institutions: The Noncooperative Equilibria of a Closed Trading Economy with Market Supply and Bidding Strategies." with P. Dubey, 1978, IJGT
"Bankruptcy and Optimality in a Closed Trading Mass Economy Modelled as a Non-Cooperative Game", with P. Dubey,1978, JMathE
The War Game, with G. Brewer, 1979.

The Aggressive Conservative Investor, 1979
"The Capital Stock Modified Competitive Equilibrium", 1980, in Kareken and Wallace, Models of Monetary Economies.
Market Structure and Behavior, with R.E. Levitan, 1980.
"Efficiency Properties of Strategic Market Games: An Axiomatic Approach"  with P. Dubey and A. Mas- Colell, 1980, JET [cwls]
"Efficiency of Cournot-Nash Equilibria in Strategic Market Games" with P. Dubey and A. Mas- Colell, 1980.
"A Strategic Market Game with Price and Quantity Strategies" with P. Dubey, 1980, ZfN

The Aggressive Conservative Investor, with M.J. Whitman, 1980.
Market Structure and Behavior, with R.E. Levitan, 1980.
Game Theory in the Social Sciences: Concepts and solutions, 1981.
Game Theory Models and Methods in Political Economy", 1981, in Arrow and Intriligator, editors, Handbook of Mathematical Econ, Vol. I - intro
"Competitive Valuation of Cooperative Games", with R.J. Weber, 1981, Mathematics of Operations Research.
"Information Conditions, Communication and General Equilibrium", with P. Dubey, 1981, Mathematics of Operations Research
"Perfect or Robust Noncooperative Equilibrium: A Search for the Philosophers Stone?", 1981, in  Essays in Game Theory and Mathematical Economics
"Society, Land, Love or Money", 1981, JEBO
"The Strategic Audit: A Game Theoretic Approach to Corporate Competitive Strategy", 1983,  Management and Decision Economics
"Approximate Cores of Replica Games and Economies, Part I & II" with M. Wooders, 1983,  Mathematical Social Sciences
"Perfect Competition in Strategic Market Games with Interlinked Preferences" with P. Dubey, 1985, Econ Letters
"A Note on Enough Money in a Strategic Market Game with Complete or Fewer Markets", 1985, Econ Letters
"The Cooperative Form, the Value, and the Allocation of Joint Costs and Benefits", 1985, in Young, editor, Cost Allocation
"A Strategic Market Game with Transactions Costs" with J. Rogawski, 1986, Math Soc Sciences
"The Many Approaches to the Study of Monopolistic Competition", 1986, European ER
"A Note on the 'Corelessness' or Antibalance of a Game" with S. Weber, 1986, IJGT
"Strategic Market Game: A Dynamic Programming Application to Money, Banking and Insurance", 1986, Math Soc Sciences
"Near-Markets and Market Games" with M. Wooders, 1986, ESQ [pdf]
"The Revelation of Information in Strategic Market Games", with P. Dubey and J. Geanakoplos, 1987, JMathE
"What Is an Application and When Is Theory a Waste of Time?", 1987, Management Science
"The Unique Minimal Cash Flow Competitive Equilibrium", 1987, Econ Letters
"Revenge and Rational Play" with B. Nalebuff, 1988
"Gaming: Theory and Practice, Past and Future", 1989, Simulation and Games
"Gold, Liquidity and Secured Loans in a Multistage Economy, Part I: Gold as Money" with S. Yao, 1989, J of Economics
"Gold, Liquidity and Secured Loans in a Multistage Economy, Part II: Many Durables, Land and Gold" with S. Yao, 1990, J of Economics
"A Strategic Market Game with Complete Markets", with S. Sahi, R. Amir and S. Yao, 1990, JET
"The Transactions Cost of Money (A Strategic Market Game Analysis)" with S. Yao, 1990, Math Soc Sciences
"The Transactions Trust Demand for Money", 1990, J of Economics
"The Capital Asset Pricing Model as a General Equilibrium with Incomplete Markets" with J. Geanakoplos, 1990, Geneva Papers on Risk & Insurance
"A Game Theoretic Approach to the Theory of Money and Financial Institutions." 1990, in Friedman and Hahn, editors, Handbook of Monetary Economics
"A Strategic Market Game of a Finite Exchange Economy with a Mutual Bank", with J. Zhao, 1991, Math Soc Sciences
"A Strategic Market Game with a Mutual Bank with Fractional Reserves and Redemption in Gold (A
Continuum of Traders)", with D. Tsomocos, 1992, J of Economics
"On Matching Book: A Problem in Banking and Corporate Finance" with M.J. Sobel, 1992, Management Science
The Theory of Money and Financial Institutions, 1993.
"Repeated Trade and the Velocity of Money", with P. Dubey and S. Sahi, 1993, JMathE
"Prominence, Symmetry, or Other?", 1994, Games & Econ Behav.
"Some Dynamics of a Strategic Market Game with a Large Number of Agents" with J.M. Miller, 1994, J of Economics
"Construction of Stationary Markov Equilibria in a Strategic Market Game" with I. Karatzas and W.D. Sudderth, 1994, Math of Operations Research
"Why Equilibrium? A Note on the Noncooperative Equilibria of Some Matrix Games", 1996, JEBO
"Trade with Assignats or Landbank Money: Equilibria in a Finite-Person Strategic Market Game", with  A.K. Jayawardene, 1997, JMathE
"A Theorem on the Number of Nash Equilibria in a Bimatrix Game" with T. Quint, 1997, IJGT
"Some Simple Games for Teaching and Research. Part 1: Cooperative Games" [cwls]
"Game Theory, Complexity, and Simplicity. Part III: Critique and Prospective", 1998, Complexity [cwls]
"Terrorism, Technology and Socio-economics of Death", 1998 [pdf]
"Clubs, Near Markets and Market Games," with M.Wooders, 2000, Fields Institute Communications.
"The Theory of Money", 2000 [cwls]
"Default in a General Equilibrium Model with Incomplete Markets" with P. Dubey and J. Geanakoplos [cwls]
"Fiat Money and the Efficient Financing of the Float, Production and Consumption. Part I: The Float" [cwls]
"War Gaming in the Information Age: theory and purpose" with Paul Bracken, 2001, Naval War College Review [pdf]

"Accounting and Economic Theory", 2002 [ssrn]
"Is economics the next physical science?" with J.D. Farmer and E. Smith, 2005, Physics Today
"Everyone-a-Banker or the Ideal Credit Acceptance Game: Theory and Experimental Evidence" with J. Huber and S. Sunder,
"An Economy with Personal Currency: Theory and evidence" with M. Angerer, J. Huber and S. Sunder, 2008
"Proposal for a Federal Employment Reserve Authority", 2009 [levy]
"The Present and Future of Game Theory", 2011 [cowles]
"Simecs, Ithaca Hours, Berkshares, Bitcoins and Walmarts", 2014

The Guidance of an Enterprise Economy
By Martin Shubik, Eric Smith

Saturday, March 4, 2017

Creativity Techniques - Bibliography

GORDON, W. J. J. Synectics: the development of creative capacity. New York: Harper & Row, 1961.

RHODES, M. Analysis of creativity. Phi Delta Kappan, v. 42, n. 7, p. 305-310, 1961.

ARNOLD, J. E. Useful creativity techniques. In: PARNES, S. (Ed.). Sourcebook for creative thinking. New York: Charles Scribner’s Sons, 1962. p. 127-138.

OSBORN, A. F. Applied imagination. 3rd ed. New York: Scribner, 1963.

ROHRBACH, B. Creative by rules - method 635, a new technique for solving problems. Absatzwirtschaft, v. 12, p. 73-53, 1969.

ZWICKY, F. Discovery invention, research through the morphological approach. New York: Macmillan, 1969.

DE BONO, E. Lateral thinking: creativity step by step. New York: Harper & Row, 1970.


TORRANCE, E. P. Can we teach children to think creatively? The Journal of Creative Behavior, v. 6, p. 114-143, 1972.

TORRANCE, E. P. Creativity in the classroom. Washington: National Education Association, 1977.

MANSFIELD, R. S.; BUSSE, T. V.; KREPLKA, E. J. The effectiveness of creativity training. Review of Educational Research, v. 48, p. 517-536, 1978.

BARRON, F.; HARRINGTON, D. M. Creativity, intelligence, and personality. Annual Review of Psychology, v. 32, p. 439-476, 1981..

VANCE, M. Storyboarding. In: VANCE, M. Creativity. Illinois: Nightengale-Conant, 1982.

ALTSHULLER, G. S. Creativity as an exact science: the theory of the solution of inventive problems. New York: Gordon and Breach, 1984.

GARDNER, H. Creativity: a interdisciplinary perspective. Creativity Research Journal, v. 1, p. 8-26, 1988.

GEIS, G. T. Making companies creative. In: KUHN, R. L (Ed.).  Handbook for creative and innovative managers. New York: McGraw-Hill, 1988. p. 25-33.

GRUBER, H. E. The envolving systems approach to creative work. Creativity Research Journal, v. 1, p. 27-59, 1988.

STERNBERG, R. J.; LUBART, T. I. An investment theory of
creativity and its development. Human Development, v.
34, p. 1-31, 1991.

WOODMAN, R. W.; SAWYER, J. E.; GRIFFIN, R. W. Toward a theory of organizational creativity. Academy of Management Review, v. 18, p. 293-321, 1993.

CONEY, J.; SERNA, P. Creative thinking from an information processing perspective: a new approach to mednick’s theory of associative hierarchies. The Journal of Creative
Behavior, v. 29, p. 109-130, 1995.

COUGER, J. D. Creative problem solving and opportunity finding. Danvers: Mass., Boyd & Fraser Pub., 1995.

ROOZENBURG, N. F. M.; EEKELES, J. Product design: fundamentals and methods. Chichester: Wiley, 1995.

AMABILE, T. M. et al. Assessing the work environment for creativity. Academy of Management Journal, v. 39, p. 1154-1184, 1996.


ENGLE, D. E.; MAH, J. J.; SADRI, G. An empirical comparison of entrepreneurs and employees: Implications for innovation. Creativity Research Journal, v. 10, n. 1, p. 45-49, 1997. s15326934crj1001_5.

MUMFORD, M. D.; WHETZEL, D. L.; REITER-PALMON, R. Thinking creatively at work: organization influences on creative problem solving. The Journal of Creative Behavior, v. 31, n. 1, p. 7-17, 1997.


SMITH, G. F. Idea-generation techniques: a formulary of active ingredients. The Journal of Creative Behavior, v. 32, n. 2, p. 107-133, 1998.


PUCCIO, G. J.; MURDOCK, M. C.; MANCE, M. Current developments in creative problem solving for organizations: a focus on thinking skills and styles. Korean Journal of Thinking & Problem Solving, v. 15, p. 43-76, 2005.

AMABILE, T. M. Componential theory of creativity. Boston: Harvard Business School, 2012. Harvard Business School Working Paper, n. 12-096

Kleidson Daniel Medeiros Leopoldino, Mario Orestes Aguirre González, Paula de Oliveira Ferreira,
José Raeudo Pereira, Marcus Eduardo Costa Souto. "Creativity techniques: a systematic literature
review," Product: Management & Development, Vol. 14 nº 2 December 2016, pp.95-100 

Creativity - Research Evolution

Rhodes’s 4P model:
 The model embraces four interdependent variables, consisting of the person, process, product and press. His work served as a pioneering agent in creativity research and development in describing the creative process, the research supported several studies.

Gorden, synectics and the creative process

W.J.J. Gorden, a psychologist, assessed the behaviour of engineering scientists during the invention process, and came to the conclusion, derived from his assessment, that certain behavioural changes (“psychological state”) take place immediately before a discovery occurs. This observation led to the formulation of the synectics technique. The technique, as briefly described, catalyses certain “psychological states” that improve new-idea generation by means of utilising “metaphors” and “manipulation”. Extensive evidence exists of increased creative performance due to the application of the synectics technique.

More specifically, then, what managerial practices affect creativity? They fall into six general categories: challenge, freedom, resources, work-group features, supervisory encouragement, and organizational support. These categories have emerged from more than two decades of research focused primarily on one question: What are the links between work environment and creativity?
How to Kill Creativity
Teresa Amabile
Harvard Business Review, THE SEPTEMBER–OCTOBER 1998 ISSUE

McFadzean (2000:15) manages to conclude and summarise the traits of the creative person as follows:

• A desire to achieve a goal or winning attitude
• A high level of motivation, dedication and commitment
• A high level of self-confidence, not risk aversive and accepting of failure
• The ability to link different (unrelated) elements or entities
• The assimilation of negativities regarding failed projects or attempts
• An ability to shift existing paradigms and assess different perspectives
• Problem and opportunity conceptualisation in a different or new frame of mind
• A “single minded” vision or road map
• A working style that induces hard work and relaxation in order to enhance incubation
• The ability to determine whether individual or group creativity should take place.

Pretoria, South Africa November 2003

The Nature of Creativity: Contemporary Psychological Perspectives
Robert J. Sternberg
CUP Archive, 27-May-1988 - Medical - 454 pages

Teresa Amabile, Harvard Business Review, THE SEPTEMBER–OCTOBER 1998 ISSUE

Encyclopedia of Creativity, Volume 1
Mark A. Runco, Steven R. Pritzker
Academic Press, 1999 - Psychology - 1300 pages

Componential Theory of Creativity
Teresa M. Amabile
Harvard B School Working Paper 2012

Thursday, March 2, 2017

Theories of Leadership - Research Perspective

The content needs to be enriched from research perspective. Presently it is biased towards to practice perspective.

The article describes various leadership theories briefly.

In leadership theory, three studies are considered as seminal and important. In Iowa leadership studies, authoritarian, democratic and laissez-faire leadership concepts were proposed and investigated for their effect on aggressive and apathetic behavior on the part of followers. Laissez-faire approach resulted in more aggressive behavior, authoritarian style resulted in more apathetic behavior and democratic style was in between the two.

In Ohio leadership studies, a questionaire was used  on air force commanders and members of bomber crews as well as other leaders and the responses were subjected to factor analysis. Two factors emerged out of the analysis and were given the names of consideration and initiating structure.  They became more popular as task orientation and people orientation.

In Michigan studies, 12 pairs of high-producing and low-producing sections of an insurance company were studied. The conclusion was that high-producing sections were supervised in a general rather than close supervisory style and supervisors were people centered. In the case of low-producing section, the supervision was more close and task oriented.

The presently identified theories of leadership have their genesis in these studies in identifying the determinants of leadership and effective leadership.

Theories of leadership are provided in two categories: Traditional and modern. Traditional theories are: 1. Trait theory 2. Exchange theory 3. Contingency theory 4. Path goal theory.

Trait Theories of Leadership:

Trait theories identify traits or characteristics that help in leadership.

Leaders were more intelligent than the average of the group being led, but, interestingly, the leader is not the most intelligent of the group.

Emotion quotient (EQ) characteristics such as empathy, graciousness, optimism, and being able to read the nonverbal cues in social situation are associated with effective leaders. The leader should be able to assess himself as an able person (Self efficacy).

From trait theory, this approach moved towards skills theory.

From the trait theories, a list of skills categorized as technical, conceptual and human skills needed for effective management or leadership are specified. Yukl further identified that skills such as creativity, organizing ability, persuasiveness, diplomacy and tactfulness, knowledge of the task, and the ability to speak well contribute to leader success.

Competencies is another version of trait theory.

In the language of competencies, the following competencies were identified as having a relation to leadership effectiveness.

1. Drive, or the inner motivation to pursue goals (achievement motivation).

2. Leadership motivation - the use of socialized power to influence others to succeed.

3. Integrity, the idea includes truthfulness and the will to translate words into deeds.

4. Self-confidence exhibited through impression management

5. Leading others to feel confident.

6. Intelligence – ability to process information, analyze alternatives, and discover opportunities.

7. Knowledge of the business – ideas relevant to the business are initiated.

8. Emotional Intelligence: self-monitoring personality, ability to adapt to circumstances as needed.

Exchange and Group Theories of Leadership

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. Interaction continues because members find the social exchange mutually rewarding.

(If every member of the group has to get more reward than his personal cost, the group must have synergy. The individual contributions result in bigger output due to the synergy)

In this group of theories, some analyzed the relationship between leader and the followers as one consisting of dyads, leader and each follower.  One idea that emerged from this thinking  is that leader behavior changes with subordinate behavior. When subordinates are not performing very well, leaders tend to emphasize the task and initiate structure to improve the performance. With subordinates who are doing a good job, consideration to people becomes the dominant behavior.

Some scholars in this group, emphasize the role of subordinates and this means subordinates have to be trained to be good followers so that group comes out successful. Followers have to support the leader and make leader look good.

Another aspect of leadership brought out by this line of theory is that subordinates who are committed and who expend a lot of effort for the unit are rewarded with more of the leader’s potential resources than those who do not display these behaviors. “Thus over a time the leader develops an “in-group” and an “out-group” of subordinates and these two groups are treated in different ways. The in-group reports fewer difficulties in their relationship with the leader and the out-group people have more complaints and grievances.

In this line of thought is also the idea, perceived similarity between the leader and the subordinate leads to higher quality leader-subordinate relationship.

In another dimension of this theory, it is stated that leaders try to change the self concept of the subordinate to improve the performance of the subordinate. At the same time subordinates also shape leader’s self concept or self schema through their responses.

Contingency Theory of Leadership

Fred Fiedler, presented a rigorous version of contingency theory wherein situation plays a part in leadership process.

Fiedler described the favorableness of a situation using three dimensions.

1. The leader-member relationship – cordial or opposing

2. The degree of task structure at hand – structured or unstructured

3. Leader’s position power – Formal authority of the leader

Fiedler found that when situation is very favorable or unfavorable, authoritarian leadership style delivered better results. When the situation is moderately favorable or unfavorable, human oriented or democratic leadership delivered better results. As in majority of the case, the situation will be in the middle ground, democratic leadership style is the more popular and appropriate style. 

Fiedler also came out with cognitive resource theory (CRT) of leadership. According to CRT

1. More intelligent leaders develop better plans, decisions, and action strategies than less intelligent leaders.

2. Intelligence contributes more strongly to group performance if the leader is directive and the group members are motivated and supportive of the leader.

3. Interpersonal stress distracts the leader from the task and the leader’s intelligence will contribute more highly if the leader has relatively stress-free relationship with superiors and subordinates.

Path-Goal Leadership Theory

According to this theory leaders have to understand the goals of the followers and prescribe a path that promises the fulfillment of goals to the followers.

The theory asserts that leader behavior will be acceptable to followers to the extent that the followers see such behavior as either an immediate source of satisfaction or as instrumental to future satisfaction.

Leadership behavior will be motivational and increase the effort of the followers to the extent that (1) it makes satisfaction of follower needs contingent on effective performance of the tasks planned by the leader and (2) it complements the environment of subordinates by providing the coaching, guidance, support, and rewards which are necessary for effective performance and which may otherwise be lacking in subordinates or in their environment.

Leaders can exhibit the following types of behavior as they feel appropriate to a situation. Same person can exhibit all the behaviors as appropriate.

1. Directive leadership: Leader decides the path and directs the followers.

2. Supportive leadership: Leaders friendly.

3. Participative leadership: Leader asks for and uses suggestions of followers.

4. Achievement oriented leadership: Leader sets challenging goals and shows confidence that followers will attain those challenging goals.

The activities of leader can be explained in the following steps.

1. Recognizing and arousing followers’ needs for outcomes over which the leader has some control.

2. Increasing the personal payoffs to followers for task accomplishment. This could mean providing payoffs which the follower desires.

3. Making the path to those payoffs (goals - *path-goal theory) easier to travel by coaching and direction.

4. Helping followers clarify their expectations.

5. Reducing frustrating barriers.

6. Increasing opportunities for personal satisfaction contingent on effective performance.

Path goal theory focuses on two aspects, goals of the subordinates and the path that is to be traveled for achieving those goals. Leader has to contribute to both of them or either of them at any point in time to be the leader.

Modern Theories

Charismatic Leadership Theories

Robert House suggested that charismatic leaders are characterized by self confidence and confidence in subordinates, high expectations for subordinates, ideological vision, and the use of personal examples. Followers identify with leader and his mission, exhibit extreme loyalty to and confidence in the leader, emulate leader’s values and behavior, and derive self esteem from their relationship with the leader. The leaders foster attitudinal, behavioral and emotional changes in their followers. Charismatic leaders produce performance in followers beyond expectations.

Transformational Leadership Theory

Transactional leadership involves an exchange relationship and can be interpreted as guiding followers to produce according to their values, beliefs.

Transformational leaders shift the values, beliefs and even needs of their followers. Transformation leaders help their organization and followers deliver an output that is far better or higher than than the historical trend based estimated output.

Transformational leaders have the following characteristics

1. They identify themselves as change agents.

2. They are courageous.

3. They believe in people.

4. They are value driven

5. They are life long learners.

6. They have the ability to deal with complexity, ambiguity and uncertainty.
7. They are visionaries (have grand plans).

Social Cognitive Approach to Leadership

The cognitive approach emphasizes understanding. A leader has to understand himself, his needs, and his behavior and also has to understand the environment that includes followers, their needs and behaviors. Leadership is coming out with plans and actions that are acceptable to followers and achieve the objectives of the group.

The steps in this approach can be described as:

1. The leader identifies the environmental variables that control his behavior.

2. The leader spares his time to work with the subordinate to discover the personalized set of environmental contingencies that regulate the subordinate’s behavior.

3. The leader and subordinate jointly attempt to discover ways in which they can manage their individual behavior to produce more mutually reinforcing and organizationally productive outcomes.
4. The leader enhances the efficacy of subordinates through setting up successful experiences (coaching), modeling, positive feedback, and persuasion, and psychological and physiological arousal. The increased efficacy leads to performance improvement. The success of the subordinates can in turn lead to leadership efficacy through the increased confidence in leader as well as appropriate subordinate behavior to reward his leader.

Conclusions that Emerge from Synthesis of Theories

Leadership theories are not mutually exclusive. Each theory to an extent supplements or complements other theories. Leaders are better individuals in various traits compared to average followers. Leaders have to provide value to followers. Their effectiveness does not depend only on their traits and performance. The behavior of followers is also an important variable in determining the outcome of the organization. Hence group responsibility needs to be stressed to attain the outcomes or objectives of the group rather the role of leader alone. Leaders have to be coaches and they have to take interest in developing their subordinates' capabilities.

Reference and Source

Luthans, Fred, Organizational Behavior


Phd Thesis

Communicative Leadership
Solange Hamrin
Mid Sweden University

Updated  4 March 2017,  8 January 2012