• Recognize different types of power that leaders use
• Recognize different management styles
• Recognize different leadership styles

Leadership

Leadership, the third key management function, is the process of guiding and motivating others toward the achievement of organizational goals. A leader can be anyone in an organization, regardless of position, able to influence others to act or follow, often by their own choice. Managers are designated leaders according to the organizational structure but may need to use negative consequences or coercion to achieve change.

In the organization structure, top managers use leadership skills to set, share, and gain support for the company’s direction and strategy. Middle and supervisory management use leadership skills in the process of directing employees on a daily basis as the employees carry out the plans and work within the structure created by management. Organizations, however, need strong effective leadership at all levels in order to meet goals and remain competitive.

To be effective leaders, managers must be able to influence others’ behaviors. This ability to influence others to behave in a particular way is called power. Researchers have identified five primary sources, or bases, of power:

• Legitimate power comes from an individual’s position in an organization
• Reward power comes from an individual’s control over rewards
• Coercive power comes from an individual’s ability to threaten negative outcomes
• Expert power comes from an individual’s extensive knowledge in one or more areas
• Referent power comes from an individual’s personal charisma and the respect and/or admiration the individual inspires

Many leaders use a combination of all of these sources of power to influence individuals toward goal achievement.

Lisa Su, CEO of AMD^[1]

Advanced Micro Devices (AMD), is a global company that designs and builds the computer chips used in laptops, gaming consoles like the PlayStation and Xbox, and the powerful servers that make cloud computing and artificial intelligence possible. The company’s graphics processing units (GPUs) and data center chips play a key role in running artificial intelligence systems, which need fast and powerful processors to manage large amounts of data. AMD is a major competitor to technology companies Intel and NVIDIA. 

When Lisa Su became CEO of AMD in 2014, the company was struggling to keep up with its competitors. Thanks to her leadership, AMD made a strong comeback. Su has a Ph.D. in electrical engineering from MIT and built her career in semiconductor research and development. This makes her a great example of expert power, which comes from deep knowledge and skill in a specific area. Her clear communication and thoughtful decision making earned her the respect of employees and industry leaders, giving her referent power. And, of course, her position as CEO gives her legitimate power as well.

Under Lisa Su’s leadership, AMD’s value rose dramatically. The company’s stock price increased more than 20 times in her first eight years as CEO. Her smart decisions helped transform AMD into one of the most respected and innovative companies in technology today.

 

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