Book excerpt: This book presents a new theory of leadership and management. It provides a clearer understanding of why leaders are effective, the specific characteristics of a good leader, and how to increase effectiveness of leaders and their organizations. It incorporates such elements as the leader's personality, situational factors and stress, leader behavior, and the cognitive resource variables of intelligence, technical knowledge and skills and experience. The conditions under which leaders should be directive or nondirective in order to have an efficiently running group are also looked at.