Organisational Leadership and Performance - Essay Example

?Running Head: Organisational Leadership and Organisational Leadership and Performance of Submission Organisational Leadership and Performance Introduction Modern day management is becoming more and more people oriented. The drive is to involve and enhance the workforce and the prospective employees. In adopting more modern and flexible management options organisational leadership must be set as per the situational theory of leadership. This sort of leadership technique would focus on the effects on the followers’ performance on account of the leader’s decision and behaviour. Hence the main issues of consideration are task and relationship behaviours (Hersey et al, 2008). This paper is aimed at investigating some key concepts of leadership and how situational leadership can help in improving the performance of an organisation. Saudi Aramco has been chosen as the organisation of research in this regard. The paper has an introduction, literature review, overview of the organisation under research, analysis and a conclusion. The sections of the literature review and the analysis are again divided into different subsections. Through this paper, we will attempt to understand the intricacies of organisational leadership and situational theory of leadership with special reference to Saudi Aramco which is a renowned energy giant transforming rapidly in the way of enhancing performance and comprehensive modernisation along with preservation of the traditional values. Research Question Discuss on how situational leadership can help to raise the performance of Saudi Aramco. Literature Review Leadership is essential for any organisation to become successful. In today’s knowledge based global economic environment, the topic of leadership has become more important and debated. Leadership has emerged as a subject almost inseparable from the basic concepts of organisational behaviour at the various levels of an establishment. Characteristics of a Leader What does a leader need to have? In other words, what does an individual need to emerge as a leader? Robbins et al (1998: 395) think that the following traits are important for an individual to become a leader: “long term vision; people and team-building skills; decisiveness; and self-confidence” In today’s dynamic world, the factor of long term vision has become more important since resources are limited and demands are increasing. Soft skills are important for people management and essential team building. Decisiveness and self-confidence helps the leader to decide his/her course of action. These leadership traits are necessary at the management level of a given organisation so that it can remain dynamic to stay competitive and survive (Brown and Eisenhardt, 1995). Leadership Development Leadership development must begin at the level of staff development and the related realm of education management is utterly concerned with the behaviour and training of the human resources of the organisation (Bhindi, 1996). Thus education management becomes an integral part of the operations. Prospective staff members should be educated in the direction of becoming leaders at their levels. Definitely, the policy of leadership development, if implemented in a right way, can make a big difference to the organisation. Both the intra-organisational and inter-organisational behaviouristic patterns can be maintained, tuned and improved if leadership development programmes are initiated within the organisation (Boaden, 2006). According to Robbins et al (1998), leadership development has the phases of conceptual understanding, skill building and coaching. A feedback process and a development centre are also required. Conceptual understanding of leadership should be imparted to as many staff members as possible, especially those who belong from the young generation so that they can correlate their personal growth plan to the leadership practices that are productive, sensible and sustainable. (Robbins et al, 1998) Leadership in Management At the management level, leadership is not an easy job. In the global environment competitions have increased and hence several spheres of organisational behaviour have developed department or layer based management systems. So the needs that define the job of a manager are changing. Hence, there is the necessity of total leaders. (Schwalm and Spady, 1998) The total leader must have an inter-disciplinary approach and multi tasking capability. In such a state of affair, a very general question is: Who is a manager and who is a leader? All managers are not leaders and all leaders are not managers. The individuals who can best enhance the performance of the organisation are both leaders and managers. They are capable of both leadership and management. (Robbins et al, 1998) Further in this context, Robbins et al (1998: 397) put forward that “leadership is the ability to influence others towards the achievement of goals that contribute to a worthwhile purpose.” In the next subsection, we will discuss situational leadership which is very much based on the tenet to “influence others”. (Robbins et al, 1998: 397) Situational Leadership According to Covey (2004: 355), “Personal-situational theories represent a combination of great-man, trait, and situational leadership. Research suggested that the study of leadership must include affective, intellectual and action traits, as well as the specific conditions under which the individual operates. Conditions included: (1) personality traits; (2) nature of group and its members; and (3) events confronting the group.” Hence, in this sphere of leadership practices, the leader has to be group or people oriented. Further in accordance with Robbins et al (1998: 406), “Situational leadership focuses on the followers. Successful leadership is achieved by selecting the right leadership style, which is contingent on the level of the followers’ development level. It is the followers who accept or reject the leaders, so they are an important factor in a leader’s success.” Thus, situational leadership is something that has high degree of involvement with people management and hence organisational performance. Soft skills and management techniques become equally important like the characteristics of the leader himself/herself. Summary Distinct personal characteristics like vision, confidence, decisiveness, etc. are important for an individual to become a leader. However, these characteristics can be acquired and ushered under a quality leadership development programme. Further, the leader should venture to become a manager and vice versa. Situational leadership provides such techniques to the leader that his/her activities become people, group or follower oriented. Situational leadership helps to minimises the differences between effective leadership and sustainable management (Bass, 1990). However, some scholars like Causer and Jones (1996) still think that a professional has to face certain organisational ambiguities as a manager. The Organisation: Saudi Aramco In order to discuss how situational leadership can help raise Saudi Aramco’s performance, we must first of all focus at the organisation and extent of the company. The structure and function of the company are important in this regard. Saudi Aramco is not s first generation enterprise which has evolved in the business environment of late twentieth century. Rather, it is a company that has evolved rapidly during the post World War II period. The company has survived the turmoil of Cold War, Arab-Israeli Crises and economic depressions through several decades. The official name of the company is Saudi Arabian Oil Company. It is a national company under the ownership of the Saudi state. Hence, it is an enterprise under royal control in Saudi Arabia. It is estimated to be the world richest privately held company. It is not listed in any stock exchange. It has a diverse spectrum of operations spanning through research and development, exploration, refining, chemicals, shipping and drilling. Moreover, it has number of associated companies which have headquarters in the cities across the countries like UK, USA, The Netherlands, UAE, etc. The main headquarters of Saudi Aramco are located in Dhahram, Saudi Arabia. (Saudi Arabia Oil Company, 2011a) The brief profile of the company helps us to note three key points about it. First, the company has progressed through the middle of twentieth century and has a rich business legacy. The business legacy is rather nationalistic, although the company had multinational operations all the time. The company did not develop in a typical Anglo-European or American style, although it utilised modernistic business and technological methods of the time. The company still manages to follow a traditionalist fiscal management model which has prevented it from stock exchange listing and maintained it as a national asset in a conservative monarchic environment. Second, the company has multiple specialties through exploration, drilling, research and development, refining, etc. This proves the fact that the company critically needs most recent technologies for efficient and advanced applications, particularly for its mega projects. Third, the company has evolved as a multinational entity in the recent years with a presence across the continents. Thus the company has entered the age of multiculturalism and multiethnic functionary. So there emerges a clear contrast between the traditionalist structure and its diversified operations along with multinational presence. The best way to smoothen this friction is an innovative human resource development programme. The company has thus rightly embarked on its ambitious Accelerated Transformation Programme which is aimed to modernise the company’s functionality and assimilation of the young generation workforce. And at this point, leadership plays a very important role to synchronise and modernise the different spheres of corporate activities and endeavours. (Saudi Arabian Oil Company, 2011b) Before we conclude this section of the paper, we should once again mention that according to Guerrera and Hoyos (2006), Financial Times’ Non-Public 150 research listing “found that Saudi Aramco, the state company in charge of the country’s vast oil resources, is worth an estimated $ 781 bn.” The company’s traditional but gigantic fiscal and corporate extent thus needs to be more transparent and modern. This sort of structural and operational transformation can only be brought about by innovative and supple leadership at the various levels of the company’s business organisation. Analysis The Saudi Aramco has aggressive expansion plans for which it would need competent brain power to create a winning combination of energy operations and knowledge economy. According to the company, “Embracing innovation is even more important when you consider that new knowledge is also at the heart of a number of Saudi Aramco initiatives focusing on renewables, in particular harnessing the power of the sun — something we get a lot of in Saudi Arabia!” (Saudi Arabia Oil Company, 2011b) This is an example of how the business conglomerate is shifting from conventional resources like oil to unconventional resources like solar power. Hence, situational factors are bound to change and the management too has to be more adaptive. The company further states that “Our new business and demographic profile also has implications for our management culture, and the criteria we set for leaders throughout the company. First of all, we recognize that not every leader occupies a management position, and that thought leaders and on-the-job influencers have a critical role to play in Saudi Aramco’s soft-side transformation.”(Saudi Arabian Oil Company, 2011b) This clearly puts forward that the leadership model of Saudi Aramco is moving out from the traditional command and control type and embracing people oriented dynamics. Hence adoption of situational leadership will be very apt and easy at the various levels of the company to enhance performance and operational output. Characteristics of the Leader at Saudi Aramco The million dollar question is who will be the leader. The leader must not only have leadership skills but also have in-depth knowledge of his/her specialization area. The implication of a specialist leader can be considered positive. We must further understand that how professionals can be given support in their leadership activities and the organization can create both skilled experts and influential leaders (Mulec, 2006). In this context, it can be further mentioned that technicians with technical skills can make skilled supervisors and managers at the lower levels of the organization (Roberts and Biddle, 1994). Moreover, a leader should be a visionary, team builder, decision maker and confident person. Situational theory can help him/her understand his/her surroundings better and hence contribute more. Leadership Development at Saudi Aramco The company well understands the significance of educational management. Educational management is very vital from the perspective of human resource management which is crucial in regards of the soft-side transformation of the company. This is important so that the company can take part in a knowledge economy winningly. Combining technology and knowledge on both soft-side and industry-side operations, the Accelerated Transformation Programme of Saudi Aramco will help in imparting skills and infusing leadership qualities among the employees (Saudi Arabian Oil Company, 2011b). Situational leadership includes factors from both soft-side and industry-side dynamics of the diversified economic spectrum. Hence, training as per the directives of situational theory can make a difference. The Accelerated Transformation Programme is already a development that can make a difference and infuse situational skills among the youths to better performance output. Leadership at the Level of Management There are numerous positive situational aspects of Saudi Aramco’s human resources operations already. The management of the company is considering situational factors as far as the recruitment drives are concerned. The process of combining a manager and a leader starts from the beginning of staff development and recruitment. The management is offering a wide range of roles, top-notch team, rewarding rewards and enough room to grow to its prospective recruits. The managers at Saudi Aramco are thus already concerned about the situational factors that will affect its growing workforce. Hence the company’s management proudly declares that “Saudi Aramco has the reputation of being a reliable supplier of energy to the world. That takes a lot of people – more than 54,000 from 66 countries.” (Saudi Arabian Oil Company, 2011a) More on Situational Leadership at Saudi Aramco The company under examination is moving towards a highly decentralised and flexible model from the clasp of a command and control method of system. In this sort of transformation, various economic, financial, technological, social, cultural and even political factors get entailed. These factors give rise to circumstantial dynamics that are known as situational factors in the language of theory. The management of the company is already proceeding through situational analysis. The Accelerated Transformation Programme is the best example. The modernistic recruitment drive is another example. Therefore, if situational theory is implemented continuously, the future leaders get to right direction and learn how to execute the company affairs through people management and handling of different circumstances. Conclusion The works of the scholars like Robbins et al (1998), Covey (2004) and Hersey et al (2008) establish situational leadership as both a reliable theory and practice. Situational leadership covers the important aspect of people orientation and gives due importance to both the leader and the follower. It also fulfils the management requirement of situational analysis and addresses the needs of modern organisational behaviour. Saudi Aramco appears to be in a need of more situational leadership practices. In the near future, this company has to embrace a large youth workforce and trans-cultural business organisation. Therefore, situational factors will play a very important role. The contemporary management of the company appears to understand this. The organisation is driving towards more flexibility and innovation as a whole. Situational leadership will help the organisation to optimise its performance by means of infusing adaptability, modernisation, integration and consideration of new and diversified ideas at a very large scale. References Bass, B.M. (1990). Bass and Stogdill’s Handbook of Leadership. New York: The Free Press. Bhindi, N.L. (1996, August). Leadership 2020: A visionary paradigm. Paper presented at the Eighth International Conference of the Commonwealth Council for Educational Administration (CCEA), Kuala Lumpur, Malaysia. Boaden, R.J. (2006). 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