Management Based on Competencies and Organisational Culture - Literature review Example

?Literature relating to leadership, strategic/organisational management based on competences and organisational culture. In today’s corporate world, effective leadership has a very strong demand in order to motivate the workforce towards the goal of the organization. Effective leadership has a very critical role in an organization to bring out top class performance regardless of the industry or the market segment an organization is a part of. This study aims to explore the various aspects related to leadership. It also attempts to identify the benefits that a competency approach would bring about to the concepts of strategic or organizational management. In addition, this study would also look at how the competency framework contributes to the improvement of the leadership of the employees or any organization. The study also explores the various ways in which a global leadership competency framework can be implemented at the national level. Finally, it is also necessary for an organization to maintain this framework and this article looks at the various ways or methods in which an organization can successful maintain. Leadership Concepts Leadership can be described as the process through which one person influences the others in his or her team or others to move in the direction of accomplishing the objective in such a manner that the team until is both cohesive and coherent. This process of objective accomplishment is carried out with the application of different leadership attributes such as beliefs, ethics, knowledge, value system, skills and ability. It is unfair to assume that if one has the role of a supervisor or manager, that they can be regarded as leaders. They can be regarded as leaders in a true sense only if they motivate and encourage their team members to achieve the goals of the organization while fulfilling their own goals of skill development and growth. According to Bass (1990), the history theory of leadership defines two different ways in which people transform into leaders. They are known as the Trait theory and the Events theory. For some individuals, a particular personality trait may lead them naturally into leadership roles, as per the Trait theory of leadership. According to this theory, an individual already has the potential and the ability to lead a team. For some other individuals, a particular event or a crisis sees them rising to the occasion and that brings out the leadership qualities in them. Therefore, this theory states that the inherent leadership quality in an individual does not come to the front until the situation demands. However, according to the recent research trends, the two main types of leadership – transactional and transformational leadership influences modern leadership theory considerably. According to the transactional leadership theory, the leader’s dominance comes into play and the employees or the followers move on the path set ahead by the leader. In this type of leadership, compliance to the path or methodology set by the leader ensures rewards and any failure to comply with it may result in negative action or even punishment (Schermerhorn et al, 2000). However, as this method of leadership has a very intense focus on the leader and not the employee, it is losing its popularity in the modern corporate world. The corporate environment now a day is very employee focussed because of the realization that a good workforce contributes immensely to the growth of the organization. Therefore, many organizations are now moving ahead in the direction of transactional leadership. Transformational leadership on the other hand is a way of leadership where the leaders work effectively along with the employees to bring about changes in the behaviour of the employee, so that they are better inspired and motivated to move in the direction of the mission of any team or organization. While doing so, the leader is also influential in encouraging the employee to develop individually (Burns, 1978). Therefore, transformational leadership is successful in bringing about excitement as well as inspiration so that a particular set of employees are motivated to their respective tasks. Here, focus is also given to employee delegation, participation as well as guidance to make a team as a cohesive unit. One critique that transformational leadership faces is that it is rampant only in the top-level management and not implemented at the lower level, where it is actually needed (Tichy and Uhich, 1984.) Earlier, leadership primarily was a two dimensional concept – task or relation oriented leadership. This means that the relationship in between an employee and his or her manager was either related to the task or relationship based interaction (Hackman, & Oldham, 1976). After the emergence of transformational as well as transactional leadership, new dimensions started emerging. Yukl (2002) developed a leadership model that also focuses on change management. Change oriented leadership is equipped to better handle the dynamic nature of today’s economic environment. An effective or good leader should always be able to focus on the mission of the organization, understand the revenue implications while making sure that the employees also are able to grow in their careers. They should be able to effectively understand the aptitude and attitude of the individuals and allocate the recourses based on these interests. If a leader is not able to integrate the team and make them work as a cohesive unit, the organization can face several issues such as high attrition rate, loss of revenue, customer dissatisfaction and so on. Therefore, an effective leader is a very imperative aspect of any organization. In addition, a leader should have a good mix of both technical as well as behavioural competency (Athey and Orth, 1999). Technical competency would mean the leader should be equipped with a solid understanding of the work that the team carries out. In addition, he or she should be familiar about key insights such as revenue model, competition, and market and industry dynamics. Behavioural competency would mean qualities such as decisiveness, integrity, ability to handle pressure, compliance to ethics and so on. While technical competency could be acquired over a period, behavioural competency is extremely critical to have before a leader starts to manage a process or a team. For example, a leader who has integrity and follows ethics is able to influence the team much in a more effective manner. Strategic Management based on a competency framework The high level of competition, complex market dynamics and a fluctuating economic environment has resulted in organizations looking at strategic management in order to make sure that organization stays on top even during adverse situations. The research done by academician Richard Boyatizis, in the book ‘The competent manager: a model for effective performance’ explored the concept of ‘competencies’ and the development of ‘competency framework’ (Boyatizis, 1982 ). Goleman’s book about Emotional Intelligence also reinforced the relevance of understanding, defining as well as measuring competence for effective leadership (Goleman, 1997). Leadership and management competencies become effective when these concepts are directly linked to the strategic focus that each organization has towards its goal or mission. For example, in a multinational corporation, aggressive partnerships would be essential but for a local healthcare provider, presence of top quality medical practitioners becomes the key. The strategic management theory describes how organizations can move in the direction of a sustainable competitive advantage through a systematic manner. The concept of competence based strategic management attempts to integrate behavioural, organizational as well as economic concerns through a frame work which is systematic, holistic, cognitive, flexible as well as dynamic (Sanchez and Heene, 2004). Therefore, competency can be defined as the potential or the capacity of an organization so establish as well as sustain the coordinated deployment of its employees and resources in such a manner that it is able to achieve its objectives (Sanchez & Heene, (2004). The key benefits of this model are that the organization becomes more stable to face any type of situations. The workforce also is strong, flexible and productive. This approach of management cannot be achieved without effective leadership that believes in the holistic progress of the organization. Competency Framework and Leadership Skills The competency framework integrates the numerous performance activities in an organization such as recruitment, training, performance management, career planning, and assessment and so on. Therefore, it facilitates the movement towards the goal of the organization and at the same time, it helps an individual develop. This holistic approach enables in enhancing the leadership skills of the staff (Kurz and Bartram, 2002 ). As performance measurement is involved, the leaders develop insights into understanding the aptitude as well as the attitude of the staff. This understanding would not be developed if a transactional leadership methodology is adopted. Based on this understand the leaders can make informed decisions about resource allotment. Accurate resource allotment has benefits for both the organizations as well as individuals. As performance management is carried out from the perspective of organization goals, the leader is able to effectively link the mission or the goal with individual aspirations. Therefore, he or she is able to guide the employee in a way that is aligned with the business strategy of the organization. This equips the leader to develop the ability to understand the strategic vision and to correlate the employee interest and aptitude along with it. Another aspect that the leader should be well equipped to understand is the market and the industry. With a holistic approach, the leader is able to understand the various market dynamics and integrate his or her team to the requirements of the market segment and the industry. Working in the direction of the mission oblivious to the economic and market dynamics can create a gap between the organization and its external environment (Armstrong, 2001). Competency framework ensures that leaders move ahead in a cognitive and holistic manner, equipping them for the different kinds of situation that they may face during the leadership tenure. How to implement leadership framework A competency-based framework has now been widely adopted in many different organizations and has proven to be very effective. However, it is necessary to understand that there is no one single leadership framework that will ensure the success of the organization. Instead, the leadership competency model should always be based on the strategy as well as the objective of the organization. To achieve this, the management should determine some key themes related to both behaviours as well as competencies that should be prevalent across the organization to enable the success of the business strategy (Torrington & Hall, 1995). These themes could be varied such as need for innovation, customer satisfaction, cohesiveness, organization culture and so on. Based on these themes, every organization would have its own ‘competency’ model that would incorporate these critical behaviours. Therefore, the key challenge is to identify the set of attributes or behaviours that form the crux of the organization. This can be illustrated with the help of an example. For an organization that focuses very heavily on collaboration with different types of external bodies, the leadership competencies that are essential include communication, conflict management, interpersonal effectiveness and so on. Therefore, the leadership framework has to be defined based on these essential elements. When these key attributes have been identified, the implementation of this framework is carried out. The top management should ensure the elimination of any bottlenecks when the leaders implement these models. For effective implementation, most leaders adopt a combination of top to down as well as bottom to up method to ensure that there is holistic implementation without any blaring gaps. For example, apart from setting up a good communication system, the leaders should also encourage the employees to communicate among themselves effectively for the success of the framework. Global and National Leadership Framework It has often been noticed that a Leadership behaviour framework gets implemented only at the top management level and fails to seep down to the lower levels. There could be numerous reasons as to why this happens. Often, it has been found out that the leadership behaviour model is framed keeping only certain attributes that are needed at the top level in mind. Therefore, these models are not easy to be adopted across the organization. In addition, it has also been noticed that the framework often has limited scope and hence is not suitable for different offices or different levels. However, as leadership behaviour framework is getting increasingly popular, many organizations are looking at various ways to approach the situation. The recent approach in this regard is the way in which a broader framework is developed at the top level of the organization. As this framework is a broader one, it can be customized to suit the different levels of an organization. In addition, it can also be modified to suit national requirements. This is particularly necessary in the event of a multinational corporation with branches all across the globe. Therefore, a very specific framework that may have been designed for its global headquarters may not exactly be suited for a branch working in a different country. However, if the national leaders come together, then they can effectively modify a framework that is broader and customize it to suit the national requirement. For example, adopting a strict performance based framework for the employees may always not work because of the difference in employee attitudes in different locations. The aspects such as experiences, attitudes beliefs and so on also vary considerably and therefore, a flexible framework that is in line with the global strategy is essential. Sustaining a leadership behaviour framework After the implementation of a leadership behaviour framework, the big challenge is to sustain it over a period of time. As sustaining this framework is not an easy task, it has often been seen that leaders and employees fail in sustaining it after a while. There are numerous reasons as to why sustaining the framework is hard. One could be because of the dynamic nature of the economic as well as the market environment. Changes in leadership and lack of proper knowledge transfer could be another reason. In addition, the change attitude of the employees can also be reasons challenge in sustenance. The external environment that an organization functions in has a very high impact on the functions in the firm, especially if the organization follows a leadership behaviour framework (Kotter, 1996). The economic situation may often call of aggressive measures on the part of the leader, something that may not always correlate with the leadership that has been planned. Similarly, increased competition in the market segment in the market and the industry may call for various types of steps (Brown and Eisenhardt, 1998). In such a scenario, it is necessary for the leaders to keep the framework in mind, before deciding the next course of action. For example, even though an aggressive approach is required, being transparent and facilitating the environment for an increased productivity may help in sustaining the framework instead of putting pressure on the employees. Leadership transformation often brings about changes in the leadership framework due to difference in the ways in which leaders function. Hence, if proper knowledge transition is not carried out, there are very high chances that the framework planned may not get sustained. In addition, it is also necessary to add an element of flexibility to the leadership framework so that any new individual who joins the organization can alter the framework to suit his or her requirements. If the framework is dynamic as well as flexible then, any leadership transformation will not affect the smooth flow of the framework. The employees also play a very critical part in sustaining leadership framework because the goal of the leader is to motivate the employees and lead them for the betterment of the organization (Sappey & Sappey, 1999). However, if the employees are not looped into the leadership behaviour, then the management may not be able to execute the leadership in a manner that they had planned. Very often, organizations make the mistake of assuming that leadership behaviour framework is totally centred on the leadership or management, where as in actuality, the implementation depends a lot on the way in which employees take to the approach and respond to it. Therefore, a robust workforce that has been educated about the leadership framework is essential in sustaining it in the long run. Summary and Conclusion Through this study, the various theories of leadership were explored and the popularity of transformational leadership in the modern day was outlined. The study also looked at the main benefits of having a strategic or organizational management that is based on the competency framework. The benefits such as adoption of a holistic approach as well as flexible outlook pave the way for the improvement of not just the organization but also the employees. In addition, the organization is able to sustain better during the times of economic or market adversity. With the help of competency framework, the management can work towards the improvement of the leadership of the staff. This can be done by empowering the leadership by the means of accurate performance assessments, development of strategic vision as well as guidance. Each organization has its way of approaching the framework based on the strategic focus that it has towards the mission and the goal of the organization. Before the implementation of any strategic outlook, it is necessary that the desirable behaviours as well as themes are charted out so that the framework can be based on these behaviours. In addition, it is also necessary to understand that one single framework would not be suitable for the national and global levels. A flexible framework that can be customized to suit the different requirements based on the vision at the specific level is the right direction to take forward. Sustaining this leadership is also a big challenge because of the dynamic nature of the industry. The right flexibility, understanding of the external environment as well as employee cooperation is required in order to make sure that the competency based leadership framework is sustained in the organization. Overall, effective leadership that is based on a robust and dynamic leadership behaviour framework can be a very strong assent to any organization in today’s environment. Most modern organizations have actively adopted this strategy and are working towards sustaining the framework. References Armstrong, M. (2001); Handbook of Human Resource Management Practice, London: Prentice Hall; Lucia, A.D. and Lepsinger, R. (1999); The Art and Science of Competency Models, San Francisco: Jossey Bass Athey, T. and Orth, M. 1999. ‘Emerging competency methods for the future’, Human Resource Management, 38:3, pp. 215–226 Boyatzis, Richard E (1982). The Competent Manager: A Model for Effective Performance. New York, Wiley Brown, S.L. and Eisenhardt, K.M. (1998); Competing on the Edge, Boston Massachusetts: Harvard Business School Press Burns, J.M. (1978), Leadership, New York: Harper & Row. Goleman, D (1997), Emotional Intelligence: Why It Can Matter More Than IQ, New York: Bantam Kotter, J.P. (1996); Leading Change, Boston, MA: Harvard Business School Press; Kotter, J.P. (2002); The Heart of Change, Boston, MA: Harvard Business School Press Kurz, R. and Bartram, D. (2002); ’Competency and Individual Performance: Modelling the world of work’, in Robertson, I, Callinan M, and Bartman D. (eds), Organisational Effectiveness: The Role of Psychology, London: Wiley, pp. 227-259 Schermerhorn, J., Hunt, J., and Osborn, R., 2000. Organizational Behaviour (7th ed.), New York: John Wiley & Sons, Inc. Sanchez, R., Heene, A. (2004), The New Strategic Management: Organizations, Competition and Competence, John Wiley & Sons Sappey, R. and Sappey J. (1999); ‘Different skills and knowledge for different times: training in an Australian retail bank’, Employee Relations, 27:6, pp. 577-589 Tichy, N. and Uhich, D., 1984. “The leadership challenge: A call for the transformational leader”. Sloan Management Review, Vol. 26, pp. 59-68. Torrington, D. & Hall, L. (1995); Personnel Management: HRM in Action, Prentice Hall. Antonacopoulou, E. P. & FitzGerald, L. (1996); ‘Reframing competency in management development’, Human Resource Management Journal, vol. 6, pp. 27-47 4 Yukl, G. (2002), Leadership in Organizations, Prentice-Hall, Saddle River, NJ Read More