Interrelationship between Leadership and Organizational Commitment - Literature review Example

Interrelationship between Leadership and Organizational Commitment In the year 1993, Drucker had mentioned that the performance and quality of the managers are significant influential factor to decide organizational success. A company without effective leadership would not be able to transform the internal resources to its competitive advantage. It would not be denied that there is a close relationship among the leadership style and organization development. In the year 1990, Bass made one study in which it was pretty observable that around 45 % to 65 % of the total factors which are responsible of causing either success or failure would be decided by the organizational leaders. Definition of Leadership Leadership is an ability to persuade any group towards the attainment of goals. In the year 1964, Tannenbaum and others have considered leadership as an influential factor in human relations. Leadership is an attribute guiding a group of people to achieve preset goals through communication. According to Fiedler, leadership can be assumed to be a type of relationship to make the group members work together and achieve common goal. Rauch and Behling in 1984 and Hsieh in the year 1993 considered leadership as a process to influence any group to approach the goals. Theories of Leadership Since twentieth century, a number of theories and literature had been introduced to prove different standpoints. Four major perspectives had been shown through these theories. Some of the theories are articulated in the later segment (Wu et. al., 2006, p.438- 440). Trait Theories According to Stogdill (1963) and Davis (1972), a successful leader must posses certain personality traits. Behavior Theories In 1957, Halpin and Winer had introduced two dimensions, initiating consideration and structure. Following the same, a number of studies conducted by Stogdill, Likert and Kotter also introduced certain behavioral attributes of leadership. Contingency Theories In the year 1967, Fiedler has introduced the contingency model of leadership. In the year 1971, House came up with a path-goal theory by extracting details from the research carried out by Ohio State University as well as the expectancy theory of motivation. In the year 1977, Blackchard and Hersey introduced situational leadership theory considering two leadership sides in terms of relationship behaviors and tasks and mix and matching the intensity of these two to come up with specific leadership types: selling, telling, delegating and participating. As per Contingency theory, the leaders of any group are required to opt for an appropriate leadership style considering the readiness of the following group. The selling style can be effective for willing but unable subordinates; while, the telling styles can reap good results for the unwilling and unable followers. Leaders usually use participating style when his or her followers are willing but unable. The delegating style seems to be good for followers who are able but unwilling to do the tasks (Wu et. al., 2006, p.438- 440). Non Charismatic Theories: These theories include the theories on transformational and transactional leadership styles. These two are pretty well known in the arenas of leadership theories. According to the transactional leadership theory, both superior as well as the subordinate would influence each other to derive value of that exchange. Transactional leaders allow his or her followers to have something they want but in the exchange he or she also demands something from his or her followers. This is a situation mutual dependence when outcomes from both the end are suitably recognized and rewarded. In a situation, leaders influence the subordinates to do something what would meet the interest of both the leaders as well as his or her subordinates. Transactional leaders are required to fulfill the expectations of his or her followers to emerge as an effective superior (Lo et. al., 2009, p.134-135). As a result, it would not be wrong to say that affectivity of transactional leadership is dependent on leaders’ abilities to satisfy and appropriately respond to the followers’ reactions as well as changing expectations (Kuhnert & Lewis, 1987, p. 649 -650). On the other hand, transformational leaders possess significant personal traits and motivate the followers by their charisma. Most of these traits are well described by Brass in the year 1985 and Avilo and Brass in the very next year. Dominance, self confidence and strong conviction in the righteousness of his or her beliefs are some of the significant attributes visible in the characteristics of the transformational leader. Some other significant behavioral attributes of effective and successful transformational leaders include image building, articulating the goals, demonstrating the confidence and raising motivation. All these behavioral traits have the ability to motivate and convince the subordinates without exchange of goods as well as rights, which is a significant attribute of transactional leadership (Kuhnert & Lewis, 1987, p. 649 -650). The conception of charisma is quite close to the idea of transformational leadership which was introduced by Burns and Bass. Charismatic leaders are those leaders who by the influence of their personal attributes can have an insightful and unusual effect on their followers. Adding to it, charismatic leaders are those who by their exceptional qualities motivate the followers to accomplish extraordinary achievements. Organizational Commitment Organizational Commitment would refer to the intensity of one’s association and participation within a specific organization. It would consider three dimensions: one must understand, believe and accept the organizational value and goals. Furthermore, the employees must be willing to put effort to satisfy organizational goals and objectives and are willing to remain as a member of the organization (Tella et. al., 2007, p.6). Almost a similar definition of this ‘organization commitment’ has been based on the significance of behavior in establishing this commitment. In the year1977, Salancik considered commitment as the state of being at which any individual would sustain his or her involvement and activities bound by the actions. It could be inferred that “three features of behavior are important in binding individuals to act: visibility of acts, the extent to which the outcomes are irrevocable; and the degree to which the person undertakes the action voluntarily” (Tella et. al., 2007, p.6). Therefore, according to Salancik, organisational commitment can be enhanced and nurtured to fetch support to satisfy the organisational interests through ensuring the employees’ participation in the decision making. The concept has attracted considerable amount of attention in the academia. According to Neale and Northcraft in the year 1996, the commitment can be assumed as an attitude displaying the loyalty of an employee to his or her organization. This is can be said as the continual process through which the internal employees would be able to express their concern for his or her organization and its continuous well being and success. Adding to this, there are some more definitions of commitment in the literature. Bateman and Strasser have come out with the conclusion that organizational commitment is of multi-dimensioned nature which would consider any employee’s loyalty to its organization and the willingness of the employees to put that extra effort in alignment with the achievement of organizational goals and congruent to its value. The simplified version has come from Sheldon (1971) and Buchanan (1974). Sheldon has defined the commitments as positive assessment of the organization and its goals. As per Buchanan, organizational commitment is a strong bond in between the employee and the organization, i.e. the employer (Schultz, n.d., p.3). In the year 1991, Meyer and Allen and in 1994, Dunham et al had indentified three commitment types including continuance commitment, normative and affirmative commitment. Affirmative commitment relates to the employee’s emotional attachment, involvement and identification with the organisational goals and objectives. Continuance commitment refers to the willingness of the employees to remain in the specific organisation. On the other hand, normative commitment has been a new introduction in this literature. This type of commitment can be defined as an employee’s commitment or obligation towards his or her work place. The attendance of the employees is related to the outcome of the affirmative commitment in a positive way. In the year 1997, Steers has shown that the employee commitment has been related to the attendance of the employees in a highly positive way. In the year 1995, Gellatlly has displayed that the continuance commitment is related to the frequency of the employees’ absence. The leadership and management research studies have suggested that the managerial style of the leaders can lead to enhanced measurements of corporate commitments in the direct reports. The research carried out by Bass, Hersey, Blanchard and Stogdill have revealed that the positive relationship among the employee attitudes and their leadership styles, performance and motivation of the employees can have an impact on the organisational commitment levels. At the follower level, the sense of whether or not people are in at least partial control of their own fates can affect their level of organizational commitment” (John, 2000, p.277). There are a considerable amount of literature which implies the relationship of leadership style and organisational commitment. Maximum of such literatures are based on the transformational and transactional leadership styles. Dale and Fox had supported the fact that the supervisor consideration has an impactful effect on the organisational commitment. As a result, the leadership styles can be discussed in reference to different styles defined by Stogdill. The initiating structure of the leader is the intensity to which any leader would actively define their roles as well as those of the followers towards the fulfilment of the organisational goals. Examples of such styles would include defining and assigning tasks and schedules, showing the right way to the followers, defining procedures and outlining the performance measurements. In the year 1981, Morris and Sherman had found that this kind of structure would allow the employees to have higher level of commitment towards the organisation as they were now provided more definite job roles and procedures, leading to improved sense of responsibility. In the year 2008, Dale and Fox have found that the leadership structure can be useful in clarifying the expectations, in turn resulting in higher organisational commitment. The consideration of supervision would happen when a leader develops a support environment for respect, support, trust and friendliness. The leaders engaging in the leadership style would interrelate with the employees on their emotional, professional and spiritual level. The organisation leaders are expected to discuss significant issues with the subordinates, show concern for them, treat them as equals and accept and implement the suggestions provided by the employees to increase organisation commitment of the followers. Creativity as a Competitive Advantage As the contemporary business environment has become competitive due to the enhanced globalisation of the firms, it has become more important to look for competitive advantage which would be difficult to imitate. First of all, the creativity would offer tangible differentiation by introducing valuable and original products, business solutions and services. “Originality in itself is attractive to many, but if you attach real buyer benefits, your competitive situation becomes unbelievably strong” (Ind & Watt, 2004, p.2-3). Companies like Dyson, Sony, Apple, 3M have gained competitive advantage through their product innovation. Their creative products have assigned appropriate positions in the consumers’ minds. There are few literatures which have dealt with corporate creativity. “There are some contextual factors that impede organizational commitment such as rules, culture, and peer–superior relation” (Erben & Gu¨neser, 2007, p.960). The research on the creative thinking has focused on the application of creativity within the workplace as the removal of the barriers, constraining the employees from being creativity (Marrapodi, 2003, p.8). To attain the competitive advantage, it would involve much more than the application of the existing knowledge, rather creation of new ideas and diffusion of the same across the organisation (Jackson, Hitt & Denisi, 2003, p.243). How strategies influence consumer behaviour The post modern business organisations have realized the priorities in the process of a business management. For example, from modernized business perspectives, the management aims to increase the shareholders wealth; whereas, in case of post-modernized business perspectives, the managements are focusing on the consumers’ value creation process as higher consumers satisfaction level is the core essence for better valuation of the business and its shareholders. Mouncey and Wimmer have described the consumers as the ‘Heart’ of a business and hence every organisation must prioritise the consumers. However, they have also claimed that a number of business organisation “struggles to get the consumers truly to the heart of their business” (Mouncey and Wimmer, 2007, p.27). Consumers’ interest must be taken into consideration while farming overall organisational strategies. In this respect, every organisation must follow the customer centric approaches that prioritise the consumers’ interests. Many organisations try to follow consumer focus strategies and they try to develop products are services as per consumers. However, they do not integrate the other strategies for consumers’ welfare. In case of consumers’ centric strategy, an organisation incorporates the entire organisational strategies by focusing on the customers (Kates and Galbraith, 2007, p.29). In both approaches i.e. consumer focused and customer centric, organisation has to understand their target consumers. Identification of consumers’ behaviours is one of the key success factors in marketing activities. Blackwell, Miniland and Engel (2001) defined that “consumer behaviour is the activities people undertake when obtaining, consumer and disposing of product and service” (Blythe, 2008, p.5). When an organisation is able to identify its target consumer behaviour, it can frame the most suitable strategy for influencing their behaviour. Hawkins et al have identified that “knowledge of consumer behaviour” is a strong competitive advantage (Hawkins et al, 2008, p.8). Therefore, to understand the consumers’ behaviour, many scholars have developed a number of models and theories. These models and theories are helpful in explaining the influence of strategies on consumers’ behaviour. Consumer decision making model and the black box model of consumer behaviour are two celebrated models in this regard. Both of these models have identified that psychological and emotional factors are important determinants in shaping the consumer behaviours. The following figure depicts a consumer decision making model. Figure 1: Consumer Decision Making Model (Source: Belch. Belch and Purani, 2009, p.140) As per the above model, consumer buying decision making process passes through five stages and behind each stage, there is an internal psychological factor affecting their behaviour. Many scholars have tried to analyse these psychological and emotional factors and other external stimuli affecting these psychological factors (Cohen, Pham and Andrade, 2006). Consumer black box model is another model which identifies multiple external and internal stimuli affecting consumers’ behaviour. The following model represents this model. Figure 2: Consumer Black Model (Source: Kolter, 2010, p.116) As per the above figure, the environmental factors are responsible to shape consumer behaviour and it includes macro-economic and marketing stimuli. The macro-environmental factors cannot be controlled by organisation but in case of marketing stimuli, the organisations are able to influence consumer behaviour by framing consumer centric marketing mix strategies. Peter and Olson has have shown the process of restructuring the marketing stimuli to influence consumer behaviour. The model is give below. Figure 3: Approaches to Influence Consumer Behaviour (Source: Peter and Olson, p.222) However, in order to implement the above stated strategies to influence consumer behaviour, a marketer needs to have a detailed study on consumer behaviour by conducting marketing research. Apple Inc has been able to distinguish itself from its key competitors by understanding the customers’ technology driving behaviours. It has brought significant changes in its technology for consumer focused product developments. Its strategies have been able to influence consumer decision making process and their behaviours (Rasmussen, 2010). Reference Belch, G. E., Belch, M. A. and Purani, K. (2009). Adver & Promtion. Tata McGraw-Hill Education. Blythe, J. (2008). Consumer behaviour. Cengage Learning EMEA. Cohen, J. B., Pham, M. T. and Andrade, E. B. (June 13, 2006). 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