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The Vermont Teddy Bear Company: A Case Study in Strategic Leadership
(Video available on Student CD-ROM)
chapter 11: leadership and followership
Chapter 11 Summary
Leadership is the process of guiding and directing the behavior of followers in organizations. Followership is the process of being guided and directed by a leader. Leaders and followers are companions in these processes.
A leader creates meaningful changes in organizations, whereas a manager controls complexity. Charismatic leaders have a profound impact on their followers.
Autocratic leaders create high pressure for followers, whereas democratic leaders create healthier environments for followers.
Two distinct dimensions of leader behavior are labeled initiating structure and consideration, alternatively called P-oriented behavior and M-oriented behavior, respectively, in Japan.
The five styles in the Leadership Grid are organization man manager, authority-obedience manager, country club manager, team manager, and impoverished manager.
According to the contingency theory, task-oriented leaders are most effective in highly favorable or highly unfavorable leadership situations, and relationship-oriented leaders are most effective in moderately favorable leadership situations.
The path-goal theory, Vroom-Yetton-Jago theory, and situational leadership model say that a leader should adjust his or her behavior to the situation and should appreciate diversity among followers.
Effective, dynamic followers are competent and active in their work, assertive, independent thinkers, sensitive to their bosses’ needs and demands, and responsible self-managers. Servant leadership and dynamic followership go together.
Learning Objectives
After reading this chapter, students should be able to do the following: 1. Define leadership and followership.
2. Discuss the differences between leadership and management.
3. Distinguish among transformational, transactional, and charismatic leaders.
4. Compare autocratic, democratic, and laissez-faire leadership styles.
5. Explain initiating structure and consideration, leader behaviors, and the Leadership Grid.
6. Explain Fiedler’s contingency theory of leadership.
7. Distinguish among the path-goal theory, the Vroom-Yetton-Jago theory, and the situational leadership model.
8. Discuss the characteristics of effective and dynamic followers. segment summary: The vermont teddy bear company—a case study in strategic leadership
Since 1981, The Vermont Teddy Bear Company has manufactured and distributed the Beargram, a teddy bear dressed for a special occasion that comes with a personalized message. A Beargram is a one-of-a-kind gift. Founder John Sortino had the vision to develop the Beargram concept and, in 1990, he decided to advertise on the radio. “The phones rang off the hook and the company grew,” explains Spence Putnam, Vice-President of Operations. The next two CEOs took the company in different distribution directions; competition from candy, flowers, and even cigars increased; and the Vermont Teddy Bear Company stopped growing. The credibility of the leader was questioned. A new CEO was named—former financial officer Liz Robert.
What might be Liz Robert’s core leadership competencies? Because of her financial background, Liz focuses on detail, and board members were concerned at the outset that she would not have the vision needed to lead the company. Yet, Liz combines vision and the focus to obtain that vision. “My mission is to bring the company back to the Beargram, using radio to advertise,” explains Liz. The past has taught Liz that the company is not in the teddy bear business, it is in the Beargram business. That is the future of the company. The market is smaller, and the competition is great. Everyone in the company knows where Liz wants the company to go.
In the past, employees were granted authority and then undermined by the CEO. Liz eliminated ambiguity by limiting decision making to clear
