Leadership Style of Rupert Murdoch from a HRM Perspective - Case Study Example

Critical analysis of the leadership style of Rupert Murdoch from a HRM perspective Contribution of people to an organization People in an organization refer to human resources. People contribute to an organization in terms of efforts, skills and capabilities, which enable the firm to continue existing. Studies have shown that people can offer a firm competitive advantage is they are managed strategically (Arnolds, 2005). Strategic management of people in a firm, results in a workforce that is highly committed and skilled in carrying out their duties to fulfil the goals and objectives of a firm. Bjorkman, Fey, and Park (2007) states that to maximize the efforts of people in an organization requires proper training of workforce. It is argued that the only vital value a company has is the experience, skills, insights and innovativeness of its people. The success of a firm will thus depend on its ability to understand how human resource is related to its performance and its wealth. Therefore, a firm with the best strategies and methods for attracting, hiring, managing, developing and retaining top performing talent is the most competitive company (Baruch and Holtom, 2008). In order to attain this, managers need to be trained on how to apply human capital management methods and principles to business strategy and performance. Firms can build a powerful human capital strategy based on solid facts, processes and measures, which help them to discern where they will get the most advantage from its people. This helps organizations to match their business models with their human capital strategies (Chen and Huang, 2009). By doing so, firms are able to visualize their human capital as value producing asset rather than of cost to be minimized. In addition to offering firms competitive advantage, people’s quality and performance differentiates firms in the competitive market (Arnolds, 2005). Thus firms are differentiated in the strategies employed in recruitment and hiring, development and motivation, minimization of risk and cost, designing talent management, implementation of performance based compensation systems, designing mentoring and coaching programs and application of performance management technologies for available talent. People in the organization also help to drive innovation and invention dependent on how they are managed (Mobey, 2008). Firms, which allow their employees to participate in decision-making process and some independence in how they carry out their duties, spur invention and innovation. Since innovation and invention help a firm to remain afloat and relevant to the changing business environment, such firms are bound to be much competitive. Contrary to this, Murdoch believed that success of a newspaper depends on the news content and coverage, editorial and advertising. However, one can argue that these attributes of success cannot be attained without people. One needs good people to be able to have informative and entertaining content in a newspaper (Mobey, 2008). In addition, one needs talented people to have a wide coverage of news. Furthermore, people talented in editorial work and advertisement need to be hired to attain the attributes pointed out by Murdoch, which are essential for the success of a newspaper. This brings us to the same argument that people are the backbone of any organization. Thus, once one realizes what drives successes the way Murdoch did, he or she needs to employ human resources management practices, which attracts and retains talents at the firm. Without such the firm may not be able to sustain its success in the end. Variation of human resource management factors within an organization and across situations One of the factors that results in variation in human resource management within an organization involves accommodation of worker’s needs. Employees more often demand that firms accommodate their personal needs (Arnolds, 2005). They demand that firms employ flexible work schedule, child and elder care assistance, parental leaves and job sharing (Bjorkman, Fey and Park, 2007). Thus HR departments plays a crucial role in designing and implementing policies which are suitable to both employees and the organization in order to reduce conflicts that may arise from organization demands and family responsibilities. During the designing of such policies, variation may arise based on gender where firms provide room for female employees to have maternity leaves (Mobey, 2008). Another factor that leads to variation in HRM variation within an organization is the increased complexity of the manager’s job (Baruch and Holtom, 2008). Today, manager’s job is more complex and demanding than ever before. This is because of the new technologies, expansion in scientific information, external competition and ever-changing business environment (Arnolds, 2005). Owing to this, HR managers are involved in provision of assistance in strategic business decision making and matching competencies of the firm’s human resources with the organization’s mission (Chen and Huang, 2009). The HR managers in particular offer assistance to executives in matters relating to recruitment, discipline and conduct, performance and evaluation and benefits of employees (Cunningham, 2010). In addition, litigation and legislations of the country in which the firm operates may lead to variations in HRM practices within the firm (Baruch and Holtom, 2008). The importance and propagation of human resource function has extreme contribution from the state. Each workgroup profession is governed by different legislations and hence the firm must comply with this legislation when recruiting and hiring new employees or developing and training them (Arnolds, 2005). Some categories of workforce professions require that employees be registered and firms, which recruit employees who are not registered, may face litigations from the organization responsible for registration of such professionals (Chen and Huang, 2009). Thus, HRM practice within the firm may vary dependent on the legislation governing issues such as equal employment, compensation, safety and labour relations. Level of expertise is another differentiating factor within the HRM practice of a firm (Mobey, 2008). The level of expertise required for different job groups calls for different HR practice to be deployed in their recruitment, selection, hiring, development and training. Thus, some employees in the firm may have access to training and development programs than others (Arnolds, 2005). Fields that are constantly changing such as information technology will require that employees in such departments have regular training and development programs as opposed to others due to ever changing technologies in this field (Chen and Huang, 2009). Firms that fail to do so may suffer from inefficient in their workforce. Cost of human resource may also contribute to variation of human resource management practice within a firm. Labour costs accounts for the highest expenditure of a firm. HR employs different strategies, which are aimed at reducing the cost of labour (Baruch and Holtom, 2008). It common to for firms to source for cheap labour where skilled labour is not needed and sourcing for costly labour where highly talented manpower is required to improve quality and performance of the firm. Employee engagement is another area where there is variation as far as human resource management is concerned. This involves motivation of employees (Arnolds, 2005). Different employees are motivated differently within an organization. The way executive leaders of the firm are motivated is not the same way a firm will motivate its frontline workers. Thus, there is a variation in how employees are engaged within a firm (Bjorkman, Fey and Park, 2007). This helps in increasing the level of enthusiasm, confidence, motivation and satisfaction of employees and the contribution of the employees in terms of their skills and talent to the attainment of business goals and objectives (Chen and Huang, 2009). Firms engage employees at different levels differently in order to help in retaining their talented workforce. This is because some of the highly talented core employees of the firm are crucial to future survival of the firm. In spite the variations, which are seen in many firms that help to tailor the management of people in accordance to their status and their special needs, Murdoch was known to be a control freak who laid down the parameters within which he expected his employees to operate. It is also reported in the case study that he employed a divide and rule policy, which made all his employees vulnerable in, spite their status at the firm (Subhadra and Bhatia, 2004). The HR systems within News Corp are also reported to be poor. The firm had very poor performance appraisal system, which lacked annual reviews of staff performance. In addition, there was no process for promoting talented people. It is noted that Murdoch emphasized performance among his employees and those who did not heed his directives were fired. Thus, the system at News corp. lacked dedifferentiation on the human resources management practice that applied to certain people with different status or special needs. All were treated as equal under the wrath of Rupert Murdoch (Arnolds, 2005). Leadership styles Leadership style refers to the manner and approach used to provide direction, to implement plans and to motivate people. Four major leadership styles have been established (Bjorkman, Fey and Park, 2007). They include authoritarian or autocratic, participative or democratic, declarative or free reign and bureaucratic (Mobey, 2008). Most leaders employ all the four leadership styles. Poor or bad leaders often stick to a single leadership style. Autocratic leadership style is characterized by leaders who tell their workers what they want done and how they want it accomplished without seeking any advice from their followers. This leadership style should not be seen as a vehicle for yelling, leading by threats, abusing your power or using demeaning language. Using such is abusive and unprofessional style called bossing people around that has no place in the repertoire of a leader (Baruch and Holtom, 2008). Authoritarian leadership style should be employed on rare occasions. Under this leadership style the manager retains much power and decision making authority. Workers under such leadership style are expected to obey orders with no explanation being offered. Motivation under authoritarian leadership style is often produced via creation of structured set of rewards and punishments (Arnolds, 2005). This leadership styles has been criticized for many years. Research has shown that firms, which have many of its leaders employing autocratic leadership style, are characterized with higher rates of absenteeism and turnover than other firms (Chen and Huang, 2009). These studies have revealed that leaders who employ this kind of leadership rely on threats and punishment to influence workers, do not trust their workers and do not allow for employee input. Research has shown that autocratic leadership can be the most effective style to use in several situations (Bjorkman, Fey and Park, 2007). One of such situations is when employees do not respond to any other leadership style. Another situation is employees are new and untrained who are not aware of the tasks they ought to perform or procedures they ought to follow. In addition, autocratic leadership style can be effectively applied in effective supervision, which requires detailed orders and instructions. Autocratic leadership is also effective where there are high volume production requirements on a daily basis (Arnolds, 2005). Other situations where autocratic leadership are effective include areas which were previously poorly managed, the need for coordination of work with another department or organization, where employee challenges the power of the manager and where there is limited time for making decisions (Chen and Huang, 2009). However, autocratic leadership style should not be applied in situations where employees become fearful, tense or resentful, employees expect to have a say in decision making process, employees become dependent on managers to make all their decisions and where there is low employee morale, high absenteeism and turnover and work stoppage. Participative leadership style is where leaders includes one or more employees in the process of making decisions or in the determination of what ought to be done and how it should be done. In spite this consultation process, the leader has a final authority for making the decision. This style helps in creation of trust between employees and the managers, which in turn helps in cultivation of cooperation, team spirit, and high morale (Bjorkman, Fey and Park, 2007). Democratic leaders are often involved in developing plans, which help employees to evaluate their own performance. They also allow employees to establish their own goals. Such leaders also encourage employees to grow on the job and to be promoted (Baruch and Holtom, 2008). In addition, democratic leaders recognize and encourage employee achievement. Democratic leadership style is suited for leaders whose employees are highly skilled or experienced and when implementing operational changes or when resolving group or individual problems. The democratic leadership style is most effective in various situations. For instance, this style is effective when the leader wants to inform employees about matters that affect them. In addition, it is suited when the leader wants employees to share in problem solving and decision making duties (Bjorkman, Fey and Park, 2007). Furthermore, the style is suitable in situations where the leader wants to provide employees with opportunities for developing a high sense of job satisfaction and personal growth. The style is also effective in situations where there is a complex or a large problem, which requires a lot of input to solve. It is also essential when implementing changes or solving problems which affect employees or groups of employees (Chen and Huang, 2009). It is also effective when the leaders are interested in building team spirit and encouraging employee participation. Some situations such as where there is limited to be input from everyone are not suitable for employment of this leadership style. Delegative or free reign leadership style is also known as laissez-faire leadership style. Under this style of leadership, employees are allowed to make the decision (Bjorkman, Fey and Park, 2007). However, the leader is still responsible for the decisions that are made. Under this leadership style, the manager provides little or no direction and employees are given as much freedom as possible. The employees are involved in determination of goals, decision-making and problem resolution (Arnolds, 2005). Laissez-faire leadership style is effective in various situations such as where employees are highly educated, skilled and experienced. It is also effective where employee have pride in their work and the drive to do it successfully on their own. Furthermore, laissez-faire leadership style is effective where external experts are being used to perform certain duties for the firm. Moreover, the style is effective when employees are trustworthy and experienced. However, laissez-faire leadership style should not be employed when it makes employees to feel insecure at the unavailability of a manager (Baruch and Holtom, 2008). It should not also be used when managers cannot provide regular feedback to inform employees on their performance. Bureaucratic leadership style is where leaders manage by the book. All activities in the firm are done according to procedure or policy. In cases where there are no procedures provided in the book the matter is referred to the next level of leadership (Arnolds, 2005). This style of leadership is effective when employees are performing routine tasks on daily basis, employees need to understand certain procedures or standards and when conducting safety or security training. This style is also effective when employees are involved in performing tasks that require handling cash (Bjorkman, Fey and Park, 2007). However, this style is not effective where work habits form that are difficult to break when they are no longer useful, when employees become uninterested in their jobs and their co-workers and when employees do only what is expected of them and no more. Even though proper leadership style is dependent on the situation, it is also influenced by three other factors. First is the personal background of the manager. The personality, values, knowledge, ethics, values and experience of the manager determines the best leadership style that he or she is likely to employ (Arnolds, 2005). Second factor involve the employees being supervised. Employees are usually individuals who have varied backgrounds and personalities (Chen and Huang, 2009). Thus, the leadership style used by managers varies depending on the individual employee and the type of leadership that the employee responds best to. Finally is the company. The actions of a manager are likely to be influenced by traditions, philosophy, concerns and values of the company (Baruch and Holtom, 2008). Thus, the leadership style employed by the manager will highly be determined by these attributes of the company. Murdoch applied autocratic leadership style in his organization. As seen from the cases, it is reported that Murdoch used to tell his workers what he wanted them to do and how he wanted it accomplished without seeking any advice from his employee. Even though the proponents of this leadership style argue that it is best suited for employees who are well motivated, workers at News corp. were not well motivated as reported in the case study. However, given that in media industry decisions need to be made faster, Murdoch was justified to use this leadership style since he needed to make faster decision to stay ahead of his competitors (Baruch and Holtom, 2008). In spite this, Murdoch misused this leadership style to yell at his workers, to lead by threats, abusing his power and using demeaning language. Thus, we can say that Murdoch used an abusive and unprofessional style called bossing people around to lead his people. Even though autocratic leadership ought to be employed on rare occasions, it was the order of the day at News corp. Murdoch retained much power and decision making authority. Just like in authoritarian leadership style, workers at News corp. were expected to obey orders from Murdoch with no explanation being offered to them. In line with research, which has shown high rates of employee turnovers under such leadership style, Murdoch’s firm is reported to have hard high rates of employee turnover than other firms. In line with research, Murdoch relied on threats and punishment to influence workers performance and in this case, punishment was in form of being fired from their jobs. The situation at News corp. does not justify the use of autocratic leadership style apart from the fact that there is limited time for making decisions. Even though the situation at News corp. does not support employment of autocratic leadership style, we can say Murdoch adopted this style because of his personal background. It reported that Murdoch learned from mistakes. It is also pointed out that he had intricate knowledge about newspaper business, which enabled him to exercise control. Thus, his personality, values, knowledge, ethics, values and experience could have led him to adopt autocratic leadership. How external and internal factors shape HR strategy Unionization is one of the factors, which shape HR strategy. Firms which have most of its employees unionized have a problem in implementing a HR strategy that can help it to get the best value out of their people especially when the employees place more trust in their union to look after their interests (Arnolds, 2005). Thus the way the firm devise its long-term strategy that engender trust among workforce will determine whether its employees will be interested in joining a union or not (Bjorkman, Fey and Park, 2007). Firms operating in countries where joining trade unions are mandatory often need to devise constructive relationship with union, which built dialogue instead of confrontation. Such a strategy helps to alleviate conflicts between the union and the firm concerned. Employee expectation and retention is another factor, which affect HR strategy. Most employees are work in order to earn a good living within self-imposed constraints, which include the level of responsibility or working hours. However, employees also look at the risks, rewards and job satisfaction associated with the expected duties to be performed (Arnolds, 2005). Thus, firms need to build HR strategy, which improves employment relationship by managing the expectations of employs positively. Inability to manage the expectations of the employees effectively may result in increased workforce turnover and inability to attract best talents in the labour markets (Chen and Huang, 2009). On the other hand, firms, which offer competitive pay structures, are able to attract best talents in the market and retain them for prolonged period of time (Baruch and Holtom, 2008). Employees also expect that firms provide them with opportunities to further their careers and to develop themselves. Firms are able to attract and retain best talents in the market if their HR strategy involves training and development programs for its employees. The supply of labour in the market in relation to demand can also affect the HR strategy of a firm. A firm in need of best talents in the market where the skills and expertise needed is rare will need to offer competitive salaries and other benefits to its employees in order to attract such talents (Baruch and Holtom, 2008). However, markets which are saturated with certain professionals is likely to deploy a different strategy where recruitment and hiring process is thorough to ensure that the best talent is recruited to the firm. The culture, climate and relationships within the firm also determine the HR strategy employed. Thus, employee expectation in relation to terms and conditions of employment and potential for reward are key factors in determining the HR strategy of the firm. The expectation of customers of the firm also determines the strategy employed (Arnolds, 2005). Thus, firms employ strategies that enhance customer experience of the firm’s products. Leadership and management development strategy at the firm is also a key determinant of the HR strategy. Legislations governing things like minimum salary, labour relations, diversity and discrimination can also influence the strategy employed by a firm (Harney and Dundon, 2006). A firm operating in a country where equal opportunity is emphasized will need for instance to implement a HR strategy which promotes equal opportunity for training and development of its workforce. Technology also affects the HR strategy in that it affects the physical layout or employee proximity (Arnolds, 2005). Technology also affects the level of skills that a firm requires in order to utilize the present technology. Technology helps in monitoring of employees’ input more easily (Bjorkman, Fey and Park, 2007). At Murdoch’s firm changing technology seems to have had influence on his HR strategy. It is reported that Murdoch established a printing press in 1986 when he realized that printing practice in England was outdated. This led to many employees loosing their jobs and in spite union protests Murdoch did not relent his decision. Analysis of human resource problem The main human resource problems are talent acquisition, talent retention, and measurement of performance, reward schemes and management of competition across teams (Chen and Huang, 2009). The management need to play a more strategic role that place emphasis on attraction and retaining talents. Without such strategic employment of human resources, firms may be outplayed by their competitors who employ such strategies (Ridder, 2009.). Talent development also enables a firm to be more resilient, agile and adaptable to the changing business environment (Arnolds, 2005). Without proper planning for employee talent development the firm may not be able to adapt itself easily in the changing business environment, and many employees may resist any change that the management may wish to introduce in the firm. Firms are also increasingly facing the problem of managing diverse talents at workplace. Without proper management of such talents, the firm may not be able to come up with innovative ideas, perspectives and views to their work (Baruch and Holtom, 2008). In addition, if a firm does not have an environment, which supports diversity broadly, it is often at risk of loosing talent to its competitors. If the measurement of performance is not tied to reward schemes, most employees find no reason to improve their performance (Bjorkman, Fey and Park, 2007). Development of an appropriate organizational reward system is one of the best motivational factors. This is because a reward system affects employee motivation and job satisfaction. Motivation is influenced by reward system through the perceived value of the rewards and their contingency on performance (Lengnick-Hall, Lengnick-Hall, Andrade and Drake, 2009). On the other hand, job satisfaction is affected by reward system via making the employee contented and comfortable as a result of the rewards received (Baruch and Holtom, 2008). Thus if the reward system is not well designed employees may not be motivated or be satisfied with their job which can culminate in increased employee turnover at the firm. Murdoch’s firms seem to have problems in talent retention, and measurement of performance, reward schemes and management of competition across teams. As reported in the case study, the HR at News corp. was poor, schemes for measuring performance of talented employees were not there, and employees were not promoted. This resulted in increased turnover of employees as reported in the case. Recommendation and conclusion Rupert Murdoch employed autocratic leadership at his firm. The extent of bossing at his firms can be said that Murdoch abused his powers to mistreat his workers (Subhadra and Bhatia, 2004). No value was given to the people working for him and those who disobeyed his directives were fired. The leadership style adopted by Murdoch can be attributed to his background that gave him experience in media industry. Given that success of Murdoch was based on the news content and coverage, editorial and advertising, and all these activities are carried out by people there is need to value people to provide an additional competitive advantage. The leadership style at the firm need to be a mix of the autocratic, bureaucratic, participative and democratic to help in employee engagement. The firm needs also to note that employees in a firm have different status and needs and hence human resource management ought to take into account these differences. The firm should also employ strategies, which can improve talent retention and measurement of performance, reward schemes and management of competition across teams. 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