Management and Leadership - Term Paper Example

Business success requires both management and leadership; it requires both brains as well as the personality that make one an effective leader. Leadership calls for decision-making, strategy, negotiation and communication, intellectual abilities and emotional attitudes determine how these competencies can be exercised. Today businesses require more than leadership; it requires beyond goal-setting and bureaucratic attitude. According to Maccoby (2004) leadership qualities can be developed through experience and learning. Ideas about leadership and management are interwoven. As Bennis says, “Managers are people who do things right, while leaders are people who do the right thing” (cited in CSU06). Cross-border mergers and acquisitions have become common and AT&T has demonstrated how ineffective leadership can lead to the downfall of a company. . The concept of organization culture has become popular since the early 1980s (Hofstede, 2005). There is a definite co-relation between culture and performance, culture and economic results, culture and sustainability, culture and strategic growth, culture and recruitment, motivation and retention of human capital, including downsizing. "Organizational culture is the key to organizational excellence... and the function of leadership is the creation and management of culture…" (Schein, 1992). Schein emphasizes that culture differentiates one organization from another and provides a sense of identity to the members. Cultures are deep seated, pervasive and complex and he stresses that adaptation and change are not possible without making changes that affect culture. Both leaders and managers are largely responsible in creating and maintaining a healthy organizational culture. At this point it is essential to differentiate between leadership and management. Management has been defined as the “mental and physical effort to coordinate diverse activities to achieve desired results” (Eric, n.d.). The four management functions include planning, staffing, organizing and controlling. Leadership on the other hand has been defined as “natural and learned ability, skill and personal characteristics to conduct interpersonal relations, which influence people to take desired actions. You lead people and you manage things, is how Pejza differentiates. Thus effective leadership requires accomplishment and influencing. Leadership requires trust and commitment of others, which they can achieve through their own behavior and integrity. Management has to be followed and obeyed. Leadership differs from the four management functions. As far as a healthy organizational culture is concerned, both managers and leaders have a significant role to play. Culture is important to an organization because it helps to cope with its environment, according to Edgar Schien (NDU, n.d.). Harris and Crane (2002) contend that cultural change is largely limited to modest behavior change but gradually cultural orientation is taking place in the form of market orientation, total quality management and innovation. It is generally believed that culture will cascade down from the management to the shop floor and such management espoused values will be widely shared and strongly held by all the employees. This assumes that the managers can manage the culture of the organization but it carries the risk that employee satisfaction level will fall. AT&T had a very strong culture and stressed on customer service. Being the largest cellular provider in 1997, they created the first national coverage plan with no roaming or long distance plans. It received numerous rewards and was the country’s best network. The downfall started when they appointed John Zeglis as the CEO who was a law school graduate and no exposure to management functions (Richman, 2004). Top management support and involvement is essential to bring about a change. They should be personally involved in inspiring quality (Juran cited by Kruger, 2001). Any change including mergers can have a demoralizing effect on the employees but Pollitt (2006) contends companies can overcome the initial imbalance due to the right leadership. This situation requires more than just how to manage. To lead effectively in this situation would mean to inspire and win commitment (Goffee & Jones, 2004). The CEO at AT&T was least involved in the affairs of the company and spent the better part of his time away from work. Resistance to change in the face of environmental pressure and uncertainty is caused by the organization culture, says Schein (Lakomski, 2001). In order to change the culture, organizational learning needs to take place, which would help the organization to deal with the internal and external environments. The role of the leader lies in transforming the current stagnating culture into a productive culture. To bring about organizational change it is essential to change the organizational culture. When the resistance to change appears to be non-rational, the dynamics of culture have to be understood. The organization needs to first unfreeze the old assumptions after which cognitive restructuring takes place. Thereafter refeezing takes place which means that changed behaviors and new assumptions become embedded and reinforced as the new culture through which the organization can solve the problems. In this change model, the role of the leader in managing change becomes important as he should be competent to diagnose and respond appropriately to changes in the environment on an ongoing basis. At AT&T the situation was juts the reverse. The freewheeling, outspoken environment was replaced by conservative, bureaucratic leadership. According to Hogan, Curphy and Hogan (1994) leadership is not domination but persuasion. Leadership occurs when others willing adopt the goals of the group as their own. Before the downfall, when the going was good, an assessment of the skills of the managers revealed that they had all the traits necessary for leadership and efficient management. They possessed the surgency – the readiness to make decisions, they had emotional stability as they demonstrated resistance to stress and tolerance for uncertainty. The new CEO along with the key executives refused to move from New Jersey and tried to control all operations from there itself. Employee moral was badly affected and so was communication. There was massive culture change and every six months there were massive strategic updates from the top (Richman, 2004). Employee involvement was nil and the employees just had to follow instructions. Where management decisions could be loudly debated now open discussion was discouraged. The employees felt marginalized and isolated and could not express their views. Expenses increased on executive welfare and luxury rather than staff welfare or even business investments. As pointed out by Eric, the four management functions are important for creating and maintaining a healthy organizational culture. Planning is an ongoing process in developing the business’ mission and objectives. Organizing involves coordination and control of tasks and the flow of information. In staffing which includes recruiting, retaining, hiring and training, it is essential that managers should be well trained so that retaining employees is easier as retention is a critical issue in most organizations today. Today the managers cannot afford to dictate from the top but the concerned people need to be involved in planning. The managers need to possess the people skills in being able to support, inspire, encourage, lead and listen to associates. Employees leave the organization or form unions when they are dissatisfied with the management. At AT&T too, employees started fleeing with the changed business environment where the managers had no involvement. With the changed business environment, emphasis should be on soft skills like conflict resolution and stress management instead of technicalities. According to Hogan, Curphy and Hogan leaders fail not merely due to external reasons but often due to personal reasons. They may be skilled in a particular area and they need to work through others to be successful. This is precisely where the CEO of AT&T failed as he was a law graduate with no managerial and leadership qualities. He could not make a cohesive team which brought an end to his leadership. Hogan et al., further suggest that failed leaders have an overriding personality defect that alienates them from their subordinates and prevents them from building a team. The management of any business according to the Deming’s consideration has two sets of problems – problems of today and those of tomorrow (Kruger, 2001). Problems of today encompass the immediate needs while those of future concern the purpose and dedication to quality improvement. Managers need to have a commitment to the organization and work towards its objectives on a long-term basis. The change process in every organization is unique and depends upon the nature of the firm, nature of the business, work culture and values, management and leadership styles and the nature of the business. It also depends upon the nature and attitude of the employees. Resistance to change occurs due to the fear of the unknown pain, stress and disadvantages. Managing change in the human part of the organization is the major challenge as it involves values, preferences and attitudes towards a particular activity. Attitudes are difficult to change as people are more comfortable with what they have learned. Organizational culture and attitudes is closely linked with organizational change. Organizational culture appears to have some influence on attitudes toward organizational change (cited by Rashid, Sambasivan & Rahman, 2004). Innovation is the engine of change and if an organization has the positive cultural characteristics, it is ready to innovate. Research suggests that different types of organizational culture have different levels of acceptance on attitudes towards organizational change. The reasons for the downfall and failed leadership at AT&T were bureaucratic attitude, conservative, no involvement of the managers, top-down management, lack of communication and no clear mission shared with the employees. In fact there were no goals laid out or visions shared. There were no teams and consequently no team’s goals, constraints, resources or problems. Today’s changed business environment requires both leadership qualities and management techniques. Leadership may not always be inherent; it can be acquired through experience and learning. Trust, commitment and an openness in behavior forms the basis of leadership. Creating a healthy culture and maintaining it is vital to the success of any business. Culture is defined in terms of attitudes, beliefs and values. These have to be transmitted down from the top to the lower level. Culture too cannot be enforced but it has to be cultivated through trust and confidence. The leaders has to transform the current culture, especially if it is stagnant or has flaws, into one that is progressive and brings about positive changes. The cause of resistance to change is also due to the organizational culture. A strong culture would yield positive results but a weak culture would increases uncertainty. Leaders, in addition to the skills in the particular role, need emotional stability to deal with varied situations and people from diverse background. Leadership is much more than increasing profit margin; it means to manage change in the human part of the organization. References: CSU06 (n.d.), Management and Leadership, 13 March 2008 Eric (n.d.), Leadership for Excellence, 13 March 2008 Freifeld, L., (2007), PLAYING TO WIN, Training; Oct 2007; 44, 9; ABI/INFORM Global, pg. 49 Goffee, R., & Jones, G., (2004), What makes a leader? Bysiness Strategy Review, Summer 2004 Vol. 15 Issue 2 Hofstede G., (2005), People whose Ideas Influence Organizational Work, 13 March 2008 Hogan, R., Curphy, G. J., & Hogan, J., (1994), What We Know About Leadership: Effectiveness and Personality, 13 March 2008 Kruger, V., (2001), Main schools of TQM: ``the big five, The TQM Magazine Volume 13 . Number 3 . 2001 . pp. 146-155 Lakomski, G., (2001), Organizational change, leadership and learning: culture as cognitive process, The International Journal of Educational Management, 15/2 [2001] 68-77 Maccoby, M., (2004), ONLY THE BRAINIEST SUCCEED, Research Technology Management; Sep/Oct 2004; 47, 5; ABI/INFORM Global, pg 61 NDU (n.d.), Strategic Leadership and Decision Making, Ch 16, Organzationa Culture, 08 July 2007 Pollitt, D. (2006), Raise a glass to HR at Wolverhampton and Dudley Breweries, Human Resource Management International Digest, Vol. 14 No. 1 2006, pp. 9-12 Rashid, Z. A., Sambasivan, M., & Rahman, A. A., (2004), The influence of organizational culture on attitudes toward organizational change, The Leadership & Organization Development Journal Vol. 25 No. 2, 2004 pp. 161-179 Richman, D., (2004), The fall of AT&T Wireless, 13 March 2008 Schein, E., (1992) Organizational Culture and Leadership, 2nd edition, cited in 13 March 2008 Read More