The Path Goal Theory
The Path Goal Theory
Since the beginning of the industrial revolution in the 18th century, researchers and analysts alike have been struggling to define the most cost-effective methods to running a company. A large portion of the success of a company can be attributed to the leadership style of a given leader and how they apply a particular leadership style to motivate their employees. It is common knowledge, that an employee with a high level of motivation will produce a higher economic benefit to the profit of the company. The intent of this writing is to explore what the Path-Goal theory is, how it relates to leadership, and then apply the components to how James Parker, CEO of southwest airlines, appears to use them to facilitate daily operations within the company.
The Path-Goal theory was developed from studies conducted by Robert House (Robbins 493). House chose to deviate from Fiedler’s traditional Contingency theories via focusing primarily on the leader’s direct behavior for each new situation. This was a new perspective when contrasted to Fiedler’s approach because House tried to integrate a larger focus on the manager’s ability to provide the means “clearing a path” for the employee to perform to their maximum potential. This would indicate a strong validation to the workings of the Contingency theories, but more of the outcome is put into the hands of the manager leading the subordinates. Within the core assumptions of the Path-Goal Theory, there are references and dependencies to other theories regarding motivation and leadership styles. It is important to understand that the Path-Goal theory can be divided into three parts: Motivation, Leadership, and Situation (Robbins 395).
Motivation can be simply defined as “explaining why people do what they do” (Bridge 1). In order to produce any output, an individual must have some level of motivation and desire to succeed. This concept that the Path-Goal model relies on is the Expectancy Theory of Motivation. This theory states that an individual will be motivated by a combination of valence and expectancy (Wu 1). Once an individual’s motivation has been established, various factors can be monopolized to achieve the best results by a perceptive leader.
Proficient managers will recognize the need to communicate their feelings and perceptions of a subordinate employee’s performance. Frequent areas of concern when evaluating the effectiveness of an employee can be found within the concepts of the Expectancy Motivation Theory. Critical success factors for application of the Expectancy Motivation Theory include: the ability to motivate by setting performance based rewards systems in place, giving constructive guidance, setting good examples to lead the subordinates, and finally, they must be able to reduce or eliminate subordinate goal obstacles.
The next component of the Path-Goal Theory is the leadership style and the effectiveness with which it is applied. There are four main leader behaviors commonly associated with leadership-style theories: directive, supportive, participative, and achievement-oriented. Directive leadership is being utilized when a leader designates precise expected behavior and desired outcomes that these behaviors should achieve. Supportive leadership requires a more charismatic leader and is when a supervisor makes an effort to establish more of a friendship type role with their subordinates. Participative leadership is in action when a leader has confidence in the judgment of the subordinate and tries to receive consultation from their expertise. Achievement-oriented leadership is practiced when the leader makes clear-cut goals and then sets forth the expectation that these goals will be successfully fulfilled.
The situational portion of the Path-Goal theory can be better defined by looking at the three components within itself. First you have the employee factors, followed by the environmental factors, and finally you have the specifics of the task. Environmental factors include but are not limited to 1) The employees ‘Locus of Control’ 2) The employee’s level of proficiency and ability to successfully complete the task and 3) The satisfaction that will be achieved by completing the task. An adept manager will realize the criticalness of each of these components and make sure that these needs are sufficiently addressed and fulfilled.
The environmental factors cannot be as easily manipulated by the leader irregardless of how proficient the leader is and can be regarded to as somewhat of a “fixed” variable. Often environmental factors are: task structure, authority system and work group (Robbins 494). Other factors that frequently come into play and can dramatically alter the outcome of a situation include the amount of assistance an individual receives from their fellow team members and, how well the expectations are defined for completion of a task. There are extensive resources to further refine and explore the components and impacts that those components will have on any given set of parameters. One of the resources that was particularly helpful to understanding how all of these factors influence the outcome was a flow-chart illustration published in an article entitled “Motivation, Leadership and Communication”.
Simply put, “The Path-Goal Theory believes that a leader can change a subordinate’s expectancy by clarifying the paths between the subordinate’s action and the outcome, which is the goal the employee wants to achieve. Whether leader behavior can do so effectively also depends on situational factors” (WU 1). Now that the definition of The Path-Goal has been explored and the components have been isolated, we are ready to move on to how this can be applied to the leadership style of James Parker.
James Parker, born in 1947 in San Antonio, graduated from the University of Texas in 1969 with a Bachelors degree. During the course of the next two years, James went on to earn his law degree also from the University of Texas. Within the first ten years of his career, James had established himself as a major asset within the Texas Attorney General’s Office. In 1979, while working for the Attorney General, James had an opportunity to explore options in another law firm headed by Herb Kelleher (Zellener 2). James’ successful interactions with Herb Kelleher would prove to be critical to his future career with Southwest. Herb Kelleher successfully gained entrance into Southwest airlines as the CEO in 1982 and was gaining a reputation for having “maniac energy” when in 1986 James followed his lead by becoming a member of the Southwest General Council (Zellener 5).
On June 19th of 2001, Kelleher retired and left his role to be filled by James Parker as acting president and Colleen Barrett acting as COO (Goett). Part of Kelleher’s exit strategy was to pair up Parker and Barrett so that the two would compliment each other in their decision making. Analysts and critiques alike are in agreement that both Barrett and Parker deserve their promotions. It is noted that while James has kept a low-profile in the eye of the public, he has developed a stead-fast work ethic. During a recent interview one anonymous analyst reported that “As a result of the work and efforts of the team, Southwest has been observed to be…the one airline that sticks out as clearly having superior labor relations”.
Parker and team advertently chose to identify critical elements of employee motivation and satisfaction and make sure that these elements are addressed and met. Parker reports as having focused protecting job [http://search.targetwords.com/u.search?x=5977%7C1%7C%7C%7C%7Cjob%7CAA1VDw]-security and advocating employee participation in profit-sharing. He also states that as a result of their operational efficiencies they were the only major airline to stay profitable in the early 1990s. Some of the actions and examples that James has displayed as an effective leader for his team include not receiving a quarter of his annual salary when the company was having a difficult financial year.
Some of the more recent obstacles that James and Colleen have had to interface with are the tragedies of September 11th. James Parker’s leadership practices came under criticism by financial analysts as he continued to pay all of his employees their normal wages costing the company 5.2 million dollars each day. James continued in this for three days until they were allowed to return to normal business. This occurrence was critical to defining his ability to adapt his leadership style according to the situation that he was in. James proved that because he was thrown into a transformational role and became extremely supportive of his employees in a time of crisis.
Parker has worked diligently at maintaining a company where employees are encouraged to interact with senior officials. This has helped his employees to maintain optimal communication with some of leading decision makers. One example of this that might seem insignificant, was that James when James officially joined Southwest, his office warming gift [http://search.targetwords.com/u.search?x=5977%7C1%7C%7C%7C%7Cgifts%7CAA1VDw] to the general counsel was a keg of beer. James has openly addresses the need to find a balance between being too passive and not being ego driven (Zellener 6).
It is tough to criticize a leader like James Parker, but during a recent interview James stated “We don’t have long term business plans…” This behavior would suggest the need for an extremely reactionary volatile workplace with high levels of ambiguity. This would again necessitate a need for a strong sense of directive-leadership because of the constant modifications being made to their working environment. On the other hand, while this might appear to create a chaotic workplace, James has been able to effectively lead by providing his employees the tools that they need to get their work done.
Although James has been recognized by the public as having more of a reserved personality when contrasted with Kelleher’s extroverted persona, he has proven that he is not afraid to address issues internally or even externally. Southwest airlines stocks were being scrutinized as the company said good by to Kelleher and welcomed Parker as president. At that time, the perception was that airlines were entering a recession with the rest of the economy. Parker’s direct leadership style approach was to keep the support and confidence of his subordinates by addressing skeptical analysts head on. Southwest performance was coming under question because the traffic growth-rate started to decrease. Instead of trying to avoid acknowledgement of this bad news, James went for a head-on confrontation (Ott 1).
Over the course of his time spent with Southwest Airlines, James Parker has continued to gain the trust and respect of coworkers throughout the organization. Southwest has been said to be one of the best companies to work at. James has not let this success alter his focus on maintaining the satisfaction of his employees. Southwest has continued to increase employee morale and simultaneously intensify their sense of loyalty. Both of these have provided Southwest with a high level of employee productivity. Another example of Parker making sure that his employees were included with the success of the company was when the government dispersed ‘economy-boosting’ grants to help perk up business in the airlines. Parker decided that these funds should be shared by all of the employees that were participating in the Southwest profit-sharing plan.
James is open to admit that his salary pales in comparison to the compensation received by other major airline presidents. This is critical because Southwest as a whole is not known for paying exceptionally well. The fact that he is willing to set an example has helped employees feel that they can trust the corporation. “Parker is now able to offer raises and stock options at a time when other airlines talk of sacrifice” (Zellener 3). More recently, this has helped employees to see value in the way that Southwest chooses to treat their employees. This understanding and acknowledgement has given Southwest an edge over other competitors by increasing employee retention.
In conclusion, it stands to reason that often times leaders, in such a position as James’s, may overlook what runs a service related industry like Southwest Airlines. By utilizing his power to maintain a high level of employee satisfaction, James Parker has proven that Southwest will not fall victim to shortcomings like poor employee retention. While the Path-Goal theory can appear to have many complex variables that need to be optimized, Parker’s behavior proves that he has successfully mastered the ability by using many of the concepts found at the heart of the theory.
Robbins, Stephen. Organizational Behavior. New Jersey: Pearson, 2001.
Fisher, Daniel. “Is There Such a Thing as Nonstop Growth?” Forbes Vol. 170 Issue 1, (2002): 82. 06 Jun 2003
Zellner, Wendy. “Holding Steady.” Business Week Issue 3818, (2003): 66. 06 Jun 2003
Interview. “Southwest Airlines VP James Parker talks to The Wall Street
Goett, Pamela. “Who shall lead them?” Journal of Business Strategy Vol. 22 Issue 5, (2001): 2-3. 4 Jun. 2003
Ott, James. “Market Focus.” Aviation Week & Space Technology Vol. 154 Issue 20, (2001): 17. 05 Jun 2003
House, R. J. A path-goal theory of leader effectiveness. Administrative Science Leadership Review, 16, 321-339. (1971) (diagrams)
Wu, Shelly. Leadership Theories: The Path-Goal Theory. Psychology About,
(2003). 10 Jun 2003 http://psychology.about.com/library/weekly/aa040102e.htm
“Motivation, Leadership and Communication”, Online Posting.
16 Jan. 2002, Leadership 22 Mar 2003 http://www.thebridgeconnection.