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Organisational Analysis - The impact of leadership styles on organizational effectiveness - Assignment Example

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A key facet in achieving a company’s goals, strategies and visions depend on the kind of leadership present in the company. An effective leader has the mandate to influence and motivate his followers in a positive manner in order to realize the goals and visions of an organization. …
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Organisational Analysis - The impact of leadership styles on organizational effectiveness
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Download file to see previous pages Transactional leadership and transformational leadership are closely related units of leadership; however, they are distinct dimensions. Jack Welch, former CEO of General Electric, had traits that made him an effective leader and he combined transformational and transactional leadership styles, which helped him, turn GE into a success story.
Leadership is the ability to impact a group towards the attainment of goals (Kiger 2010, 25). General Electric is a corporation, whose main objective is to generate profits, which will be pleasing to the shareholders (Brady 2010, 26). Jack Welch influenced his team to achieve this goal, which was evident in the increased market share, profits and revenues. In 1981, the company had a market value of 13 billion USD when Welch became the CEO. However, this grew to more than 400 billion USD when Welch retired. Welch possessed some traits that ensured his success as a leader. According to the Trait Theory, there are six traits, which are frequently associated with leadership. These traits are: desire to lead; energy and ambition; integrity and honesty; intelligence; self-confidence and job-relevant knowledge.
Welch is a competitor; hence, full of ambitions. These ambitions are translated into ideas, and then decisions, which are eventually, implemented that saw the turnaround of GE. Jack Welch believed in energizing his followers in working hard to increase the performance of the company. Being full of energy, he seldom ran out of the excitated energy that was necessary to push his employees to reach their potential. The self-confidence of Welch enabled him to take risks, which even meant the falling of the company. He restructured the hierarchical systems, regrouping the business units and introducing an informal system of carrying out business in the company. Furthermore, Welch had an extraordinary passion, which he used to motivate and empower his employees to attain the goals of the company (Slater 2004, 19). Bass and Riggio (2006, 10) acknowledge that transformational leadership is made up of four fundamental elements, which they called the “4 I’s.” A transformational leader has the capability to achieve superior performance through: inspirational motivation; idealized influence; individualized consideration and intellectual stimulation (Judge & Piccolo, 2004, 755). In order to effectively turn around General Electric, transformational leadership had to be an important element in Jack Welch’s leadership style. One of the critical decisions that Welch had to make as the Chief Executive Officer was to create and implement a strategy and a vision, which suited all the businesses in the company. The intention of this decision was to unify all the businesses under a similar and distinct banner (Abetti 2006, 78). Jack Welch developed a three circle model, whose function was to ensure that all the businesses within the company fitted in one of the categories. These categories were: the main business, which the Power Generation production was part of, differentiated by restrained investments and returns was carefully selected; the high-tech businesses, which had a high growth, comprising of Medical Systems or Plastics, more often than not had negative cash flows and demanded heavy investments; services, which incorporated General Electric Capital and other businesses, which were typified by high returns for ...Download file to see next pagesRead More
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