Management and Leadership Development - Essay Example

?Management and leadership development Introduction The recent financial crisis has strongly affected the markets worldwide. The crisis resulted, in many firms, to severe financial losses. However, there were also firms, which managed to overcome the crisis and strengthen their position in their industry. These firms share a common characteristic: effective leadership style. Indeed, leaders are considered as having a key role in modern organizations. Their power to intervene in every organizational issue is also related to high responsibilities: in case of failures, the leader is usually held as responsible, even if he had no chance to prevent or delay the relevant events. Current paper focuses on the examination of the development of leadership, as a core element of modern organizations. At the same time, reference is made to the changes in the styles of leadership, following the changes in market conditions and the organizational potentials worldwide. The relationship between management and leadership is also explored, aiming to understand the power of leader to control organizational operations. It is proved that leadership tends to change continuously; however, the level of this process is not standardized. It is assumed that the potentials of leaders to act independently in each organization can vary, under the influence of the internal organizational environment and the local market ethics. 2. Leadership – description and development The characteristics and the role of leadership in modern organizations are likely to be differentiated in accordance with the conditions of the internal and the external organizational environment. Up to a level, such differentiation is justified taking into consideration the fact that the needs of each organization are not identical. However, similarities exist, which allow for assumptions in regard to the performance of leadership in different organizational and market conditions. The understanding of the process of change as occurring in leadership styles requires the reference to the definition of the specific concept. The characteristics of leadership should be also analytically described in order to identify the potentials of the specific concept to be further developed. 2.1 Definition of leadership In accordance with Van Velsor et al. (2010) the traditional definition of leadership as the establishment of shared goals that followers have to support, should be alternated in order to become more effective. It is suggested that leadership is considered as ‘the process of producing direction, alignment and commitment (DAC) in collectives’ (Van Velsor et al. 2010). 2.2 Main characteristics of leadership The leadership, as described above, is highly differentiated by management. Because both these concepts are related to modern business activities, their relationship should be further explained making sure that the role and the potentials of each one of them will be made clear. In accordance with Ryan (2007) the role of leader refers to the establishment of the organization’s vision and mission. On the contrary, the manager has to develop the measures necessary for the realization of organization’s vision and the achievement of organization’s targets (as set by the leader). Furthermore, the leader is likely to create inspiration to the employees urging them to develop their skills (Stimson et al. 2009). The manager has to support employees in their efforts to improve their capabilities and knowledge but he is not expected to inspire the employees, mostly because his power in the organization is limited. Moreover, the leader establishes the organizational culture; the manager needs to act in accordance with the organizational culture and values having the power to choose among the policies used for the promotion of organizational culture through the firm’s daily activities (Derr et al. 2002). At the same time, the leader needs to promote innovation, ensuring that the competitiveness of his organization is kept at high levels (Lussier et al. 2009). Also, the leader can use his power in order to promote his ideas and projects, while the manager does not have such option, because his power is limited focusing on the identification of the appropriate methods so that the projects of the organization to be successful (Ryan 2007, p.2). The most important role of leader within modern organizations is related to the introduction of change, which can, sometimes, be quite radical especially when critical organizational issues need to be addressed (Mendenhall 2008). In this case also, i.e. when change is initiated in the organization, a manager does not have particular power to intervene in regard to the content or the extension of change; he can only suggest the most appropriate method for the relevant plans to be effectively developed (Ryan 2007, p.2). 2.3 Current developments in leadership – aspects and barriers During the last decade, the developments on leadership have been radical. This issue is highlighted in the relevant literature where the changes in the role and the characteristics of leadership are presented using appropriate theories. The specific issue is also highlighted in the article of Emerald Group Publishing Limited (2010). This article is critically discussed below, at the aim that it helps to understand the criteria on which the development of leadership has been based – as this process is identified in organizations of different industrial sectors. 2.3.1 The developments in leadership as described in the article of the Emerald Group Publishing Limited (2010) ‘Changing Face of Leadership’. The specific article emphasizes on the changes on leadership styles as caused by the changes in ‘healthcare, politics and industry’ (Emerald Group Publishing 2010, p.21). The article primarily refers to the traditional view on leaders, as the person who has the absolute power to set organizational aims, culture and strategy and to ask for employees to follow them with no complaint (Emerald Group Publishing 2010). It is made clear that in current market, the existence of just one style of leadership, the one described above, could cause severe problems, as it would not be able to address the needs of organizations with different characteristics (meaning the structure, the resources and the nature of their activities) and potentials (meaning their financial status or their performance through the years). Therefore, the specific article introduces the idea that the change of leadership, as reflected in the development of a series of leadership styles, should be regarded as expected, being related to the change of the market – as of its structure, its rules and its financial strength. As a result, the transactional, the transformational and the charismatic leadership are considered as necessary changes on traditional leadership, which is characterized as not appropriate for responding to the current market and social needs. 2.3.2 The changes in leadership as discussed in the literature In accordance with Russell (2005) a modern leader needs to have the following characteristics: ‘self-awareness, resiliency and ability to listen’ (Russell 2005, p.1). Despite the fact that leadership is under continuous development, no appropriate support is provided to those individuals who are going to be engaged in such role. This fact is highlighted in the study of Carter et al. (2005, p.16) where reference is made to the inappropriateness of the material of leadership courses; it is noted that this material may cover the theoretical aspects of leadership but does not explain its practical implications. On the other hand, Gold et al. (2010, p.345) note that the key characteristic of modern leadership is instability and uncertainty; it is explained that there are skills and abilities, which can be quite valuable in the context of a specific leadership style while they may have no relevance to another leadership style. Moreover, London (2002, p.2) notes that a leader needs to be capable of promoting innovation and respond to emergent organizational needs, for example if the change of an existing strategy emerges, the leader should be able to design a new strategy without delay. Another issue of modern leadership is described in the study of Hannum et al. (2007). It is noted that modern organizations have to invest in the development of leadership – investment refers to resources of various forms, including funds, HR and technology (Hannum et al. 2007, p.18); therefore, the leadership performance should ensure the payback of this investment – either in the short or the long term. From another point of view, Murphy et al. (2003) note that the level and the forms of leadership development are difficult to be explored, mostly because of the lack of sufficient literature. Moreover, Fisher-Yoshida et al. (2009, p.68) state that the term leader should be used when referring to various professional who are engaged in a critical organizational task, i.e. not just to the person who govern each organization. In accordance with Morse (2008, p.95) the most common leadership styles, created for responding to the various business needs, are the following: ‘laissez-faire, directive, supportive and participative’ (Morse, 2008, p.95). Rondinelli et al. (2009) refer to the ‘transactional leadership style, as used by John F. Kennedy’ (Rondinelly et al. 2009, p.287); it is noted that in the context of his role as a president of USA, John F. Kennedy had to adopt ‘a transformational leadership style that appealed to basic social values and to the altruism of the American people’ (Rondinelly et al. 2009, p.287). In accordance with the issues discussed above, leadership has been strongly differentiated compared to its past forms. In the past, the power of the leader to choose among the strategies available for handling an issue was not limited. Instead, it was the leader who could decide on all the details related to the organization, referring to activities at all levels of organizational hierarchy. In modern organizations, the power of leader to regulate organizational activities has been limited, even if this limitation is not clear (Lepard et al, 2003). Through a careful review of the literature published on the specific field, this trend can be identified. Of course, the increase in the volume and the complexity of the organizational activities can possibly justify such phenomenon. However, even from this point of view the following issue appears: on which criteria the precise power of a leader within his organization will be decided? (Byrne et al. 2006) In corporations, the existence of the board limits the power of the CEO to develop initiatives based on his personal perceptions and experience. On the other hand, in small and medium enterprises, the role of the leader seems to be more precise and critical, in terms of the power recognized to the leader (Rondinelli et al. 2009). Indeed, in organizations of small and medium size the leader is usually the owner of the firm, a phenomenon difficult in large corporations where the rights of the shareholders set significant barriers to the freedom of the main shareholder – holder of the highest percentage of shares – to decide on important organizational issues without the prior permission of the organization’s key body – in terms of governance – i.e. the board or the assembly of shareholders. 3. Conclusion The examination of the literature related to the development of leadership, as a key part of organizational life, has led to the following assumptions: indeed, leadership has been significantly changed through the years. However, this change was necessary in order for the various social and business needs to be addressed, in the context described above. Therefore, the development of the leadership as occur in the modern market should be negatively criticized – at least not fully. The terms though under which this change has occurred should be carefully reviewed. In accordance with the theorists who studied the specific field, a series of leadership styles have been developed in the context of modern market in order to respond to various organizational needs. It is not made clear whether all these leadership styles are carefully checked as of their effects on organizations. Moreover, it is not made clear whether leaders are able to the different needs of each of these styles. Also, the criteria under which each leadership style is developed within a particular organization are not clearly explained. Under these terms, the development of leadership could be evaluated as follows: the specific process is necessary but not sufficiently justified or supported. As a result, the performance of each leadership style within each organization cannot be precisely estimated in advance; in other words, leadership styles, as developed in the theory, may be used in a particular organization, however, the effects of the relevant initiatives cannot be fully measured. The above fact that leads to the assumption that leadership, in its modern form, has an additional characteristic: the uncertainty. 4. Brief Presentation The continuous increase of the challenges that business have to face in the modern market has led to the need for the update in the leadership styles used in organizations with different structural and operational characteristics. Current paper focused on the development of leadership, from its traditional form – which emphasized on the charisma of leader – to complex modes, such as the transformational and the transactional leadership. The paper is based on the article of Emerald Group Publishing Limited under the title ‘The changing face of leadership - Different styles of leadership facilitate changing needs in healthcare, politics and industry’; the above article was published in 2010 and presents the developments in the forms of leadership as a means for improving the effectiveness of leadership in regard to the organizational needs; in the above paper, emphasis is given on the effectiveness of transformational and transactional leadership as successors of the traditional forms of leadership (for example, the contingency leadership and the directive leadership). A series of academic studies have been reviewed aiming to understand the key characteristics of leadership and the phases of its development. It has been proved that through the decades important changes have been identified in leadership; the transformational leadership and the transactional leadership are the most indicative examples of the above process. Theorists and academic researchers have used different approaches in order to explain the development in leadership styles; in accordance with Ryan (2007) leadership development should be explained by referring to the differentiation in the strategies employed by leaders in order to communicate with employees at various levels of the organizational hierarchy. On the other hand, Carter et al. (2005) emphasizing on the importance of incorporation of leadership development in the change management process developed in each organization; in other words, in modern organizations leadership development would not have many chances to be completed successfully unless it would become part of a relevant plan of change – as promoting in regard to various parts of the organization involved. From another point of view, leadership development is depended on the characteristics and the capabilities of each leader (for example, ‘the position of the leader – whether a CEO or just the supervisor, the gender/ ethnicity of the leader, his/ her experiences and motivations and so on’ (Van Velsor et al. 2010, p.20); of course, the role of ‘the culture and the type of the organization’ (Van Velsor et al. 2010, p.20) in leadership development cannot be ignored. At this point reference should be made to the study of Russell (2005), who notes that leadership development is strongly depended on the interpersonal skills of the leader; it is through these skills that the leader will be able to communicate effectively with employees and promote any change across the organization – adopting practices used in advanced leadership styles (Russell 2005, p.5). In accordance with Hannum et al. (2007) the evaluation of leadership development is quite important for identifying any potential failures or gaps in the leadership style used within a particular organization; it is also noted that appropriate tools (referring to the tools for evaluating the leadership development) should be located in advance aiming to ensure the credibility of the relevant process (Hannum et al. 2007, p.17). The above theories, along with additional literature published in the particular field, will be used for checking the level and the quality of leadership development as promoted in organizations of various industrial sectors; at the same time the context of leadership development as described in the article of Emerald Group Publishing Limited – as described above – will be critically discussed and evaluated. References Byrne, J., Rees, R. (2006) The successful leadership development program: how to build it and how to keep it going. John Wiley and Sons Carter, L., Ulrich, D., Goldsmith, M. (2005) Best practices in leadership development and organization change: how the best companies ensure meaningful change and sustainable leadership. John Wiley and Sons Derr, C., Roussillon, S., Bournois, F. (2002) Cross-cultural approaches to leadership development. 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