Leadership Styles and Impacts on Organizations - Case Study Example

Organizational Behavior: Case Studies Task Leadership Styles and Impacts on Organizations The type of leadership style adopted by the leadership management of an organization directly impact on the actions at the workplace that facilitate change. Leaders, therefore, play a critical role as change agents with the responsibility to formulate change strategies and effectively implement them. Consequently, the change strategies so adopted by organizational leadership, and the leadership styles at play have a considerable impact on motivation of the workforce at the time of change. There are various leadership styles available including autocracy, democracy, and laissez-faire as proposed by behavioral theorists1, however, the different leadership styles are currently considered to be transformational, transactional, or charismatic. Autocratic or authoritarian leadership style bestows all the decision-making powers solely on the leader, and motivation is achieved through rewards or punishments. However, for both at Egg and Taylor Woodrows workforce, this type of leadership may impact negatively on motivation of employees. Considering that the two companies both put a lot of emphasis on employee involvement, autocratic style leadership may not foster effectual communication, a tool highly and considerably associated with effective implementation of change. Democratic or participative leadership allows employees to get actively involved in decision-making processes by developing plans aimed at helping employees evaluate their performance. This form of leadership will particularly impact positively in regard to workforce motivation at Taylor Woodrow given that they already have a working Performance and Development Review in place. Moreover, participative leadership permits establishment of goals by the workforce, promotes growth on the job and promotions, and recognizes achievement. Therefore, during change implementation, participative or democratic leadership facilitates employee motivation, which in effect leads to improved organization performance and profitability. At Egg, democratic or participative leadership proves to be the most effective leadership style since the company puts a lot of emphasis on employee-management relationship, allowing employees to get involved in planning, performing, and achieving for themselves and the company in overall. Addition, the company’s strategic approach toward employee is anchored on a ‘know yourself, know your people’ concept that puts not only the targets of the company itself but also those of the workforce at the core of its operations. With the existing organizational culture at Egg, democratic leadership that allows for employee participation will greatly facilitate motivation of the workforce to company objectives and individual performance. Transformational leadership is the most effective leadership style especially in bringing about successful organizational change, and ensuring that employees are motivated adequately to carry on with the objectives of the organization during the change period. This leadership style brings about radical shifts in organizational culture, questions underlying assumptions and mindsets, and leads to the formulation of very different strategies. Despite its disruption it brings about in the company, transformational leadership, if effectively executed, can lead to a more robust workforce that is motivated2. Charismatic leadership infuses renewed enthusiasm in the workforce and has the potential of motivating employees albeit with the risk of overreliance on the leader whereupon his absence may lead to collapse especially during periods of organizational change. Finally, transactional leadership entails rewarding employees for their compliance and performance, and punishments for failures3. This style of leadership may impact negatively on the workforce of both Egg and Taylor Woodrow since, during organizational change, the employees may not feel encouraged to perform since the focus is on short-term tasks. Task 2: Motivational Theories Motivation of employees at the workplace entails actions by the management function aimed at influencing or driving the workforce to behave in a specific manner improving on and direction, with the ultimate purpose of improving on individual, group, and overall organizational performance. At the organizational level, the responsibility of motivating employees lies with the leader, and is significantly dependent on their ability to persuade and influence others to act in a specific common direction. There are various motivational theories exploring the different approaches adopted by leaders and managers to meet individual needs, including McGregor’s Theory X and Y, Hierarchy of Needs Theory formulated by Maslow, Herzberg’s Motivation – Hygiene theory, and Vroom and Expectancy theories. The two companies, Egg and Taylor Woodrow, have employed different motivational strategies and approaches in order to achieve various respective goals and meet employee needs. Human Resource Development approach in practice at Taylor Woodrow is based on the assumption that employees desire to offer their contributions to the efficiency of the company, and have the ability to contribute genuinely to improving the effectiveness of the organization. The company therefore is responsible for creating a work environment that ensures efficient utilization of the available human resources. Maslow’s hierarchy of needs theory is based on the assumption that employees are motivated to satisfy various needs including physiological, security, belongingness, esteem and self-actualization. The suggestion presented by this motivational theory is that the various needs of the employee are satisfied according to importance, and employees are only motivated when those needs are not satisfied. The applicability of this theory relies on the idea that employee needs will never be fully satisfied, and once one need is satisfied, the next level will be achieved until the different levels of the hierarchy are scaled. The premise of Herzberg’s two-factor theory is that the management needs to critically examine the main factors resulting in either satisfaction or dissatisfaction of employees at the workplace. The theory assumes that a satisfied workforce registers good performance, or a willingness to stay at the job. Factors that lead to job dissatisfaction include working conditions, organizational policies, technical supervision, pays, and interpersonal relations, which Herzberg called ‘hygiene factors’4. The hygiene factors do not necessarily motivate employees but rather influence them to continue working at a particular company. The motivational factors suggested by Herzberg include success, acknowledgment of efforts at improving performance, a feeling of responsibility, and personal progress. It is therefore clear that both Maslow’s and Herzberg’s theories describe the same kind of needs since the hygiene factors enable employees to satisfy their basic needs, while the motivational factors are a reflection of employee need for esteem and self-fulfillment. McCelland’s acquired needs theory focuses on motivational needs based on the need for power, affiliation, and achievement which reflect employee’s desire to control and be influential in a group, and work more effectively than in the past5. Unlike Maslow’s hierarchy model, this theory does not concern with the order of the needs but rather the needs themselves. Lastly, goal-setting theory offers the suggestion that the management function of the company sets goals for individual employees, and rewards are based on accomplishment of these results6. The application of the theories described above, and their associated benefits, if any, are discussed under Task 3 below. Task 3 Application of Motivational Theories at Egg and Taylor Woodrow companies Various factors influence the performance of an employee including the motivational level at the organization, individual ability, and the work environment among others. At Egg, a lot of emphasis is put on the creation of a work environment that facilitates involvement of employees in planning, performing and achieving individual, group and company goals and objectives. Moreover, the company ensures that development of a good working relationship with the management function, and empowerment of employees in order to enable change creation and delivery of excellent services to customers are prioritized. Lastly, Egg appreciates recognition and reward of employees for efforts at improving the performance and success of the company. In order to achieve the above, the management function of Egg company recognizes that effective application of Herzberg’s two-factor theory requires a solid development of all the hygiene factors that impact on employee motivation. In response, the company puts a lot of emphasis on creation of a conducive work environment, and ensures that employee salaries are paid on time. The company also employs a ‘know yourself, know your people’ approach that ensures that the management function has the requisite knowledge about their workforce so that their needs can be met, hence motivating them. This is done by ensuring that every employee is assigned duties that are most comfortable to them so as to improve on effectiveness and performance. The Egg DNA developed by the company entails a framework that recognizes and aims to fulfill the different needs and ambitions of employees that enables them to perform effectively in their particular roles and deliver on the aims of the company, the Egg Game. Taylor Woodrow, on the other hand, focuses more on motivating employees in accordance to their performance and accomplishments. Through the application of goal-setting theory, the company has developed a Performance Related Pay (PRP) approach, which that relies on a Performance Review to reward employees according to their achievements. This is a form of Goal-setting theory since employee rewards are based on achievement of set targets and overall business performance, albeit in consideration of other factors such as competitive salary arrangements and the company ability to reward every employee according to their contributions. The company ties employee rewards to performance review which examines individual levels of skill, competence, and the degree to which set goals have been accomplished. Task 4: Nature of groups and group behavior at Egg and Taylor Woodrow The structure of organizations is not based upon mere collections of employees working individually, but rather comprise assemblage or cluster of people in form of groups or teams. The aim of the groups is for the employees to work collectively at achieving company goals and help in gaining a competitive advantage. The group members interact in a manner that the actions of an individual employee affect and are affected by those of other employees, and have a mutual goal accomplishment. In an organization, there are various formal groups such as command groups, task-forces and teams that define the group nature of an organization7. At Taylor Woodrow, the groups are structured in a sort of task-forces that comprise sub-contacted skilled tradesmen who come together to accomplish a certain goal. Although the task-forces are generally disbanded upon completion of a desired objective, Taylor Woodrow might find it necessary to retain its task groups so as to provide new insights into particular projects such as Brownfield site development which entails highly complex operations. However, given the intricate nature of the interactions involved in a task group, they are generally tricky to manage, and this may impact negatively on the group behavior by fostering disagreements. In addition, the company has a set of command groups or teams comprising of various subordinates with specific skills reporting to the same supervisor. The various command groups at Taylor Woodrow include quantity surveyors and commercial managers, Business development managers, project managers, architects and interior designers, civil engineers, and is currently looking at employing Finance, IT, and sales and marketing specialists. The groups are usually managed by specialists among those groups, and they have the most significant effect on the extent to which the company is able to accomplish its objectives. On the other hand, Egg’s workforce structure is designed in a manner that empowers the employees to plan, perform and achieve for themselves and the company. This is a kind of self-managed teams whereby the members of a particular team have the responsibility to collectively ensure that the team accomplishes its goals. The nature of groups at Egg not only fosters good relation with the management but also promotes cohesiveness since the members are able to work collectively under guidelines that they have set themselves. The employees at Egg are therefore sufficiently satisfied, and are committed to the job and the organization due to effective communication and level of socialization in the groups. Decision-making is also easy given due to the open line of communication between the groups and the management. Task 5: Group and Team Effectiveness The effectiveness of a team or group in an organization determines how well the particular group performs. The level of effectiveness is dependent on various factors that can either promote efficient performance or threaten the success of a group in an organization. Some of the factors that have a positive impact on the effectiveness of a group include motivation techniques. One way of rewarding employees is through rewards schemes that either appreciates the overall contribution of the group, or competitive rewards aimed at individual employees for their contributions to the overall performance of the group. Moreover, team effectiveness requires the process of development and gratifying criteria such as team productivity that meets the set standards of the company. The effectiveness of the group is also influenced by individual satisfaction of the members that ensures long-term development and growth of the company. Lastly, it is essential for the group members to constantly cooperate so that the group can continue working together8. On the other hand, factors such as lack of cohesiveness brought about by poor communication among the group members, and between the group and the management function hinder group effectiveness. For example, failure to communicate guidelines and intended objectives to all members of a group severely threatens the success of a group. The open communication between employees at both Egg and Taylor Woodrow greatly contribute to promoting group effectiveness, and ensuring sustained growth. The reward systems at Taylor Woodrow also ensure that the group performs effectively in meeting its goals. Task 5: Role of Technology in business success Technology plays a crucial role in ensuring business success and overall productivity by enhancing and facilitating effective implementation of business strategies, communication within the organization and provides the tools necessary for overcoming the challenges of executing strategies9. Application of technology in business not only increases productivity but is also essential in creating an open and communicative environment through information communication systems, and motivating employees. The technological competencies developed by Tesco through automation of processes has allowed for faster communication of business strategies, increased time spent on strategic priorities, easier scrutiny of business productivity and employee progress on company goals. The present technological advances offer Egg and Taylor Woodrow with an opportunity to increase productivity and business success through advanced reporting and business analysis capability. By adopting advanced technologies, Egg, for example, will be able to reduce its customer queue time at its various bank halls, gain a deeper understanding of business performance, customer preferences and market trends. Taylor Woodrow might, for example, benefit from technology that ensures it employs best practice at developing complex Brownfield sites. This will enable the two companies to understand their customer needs, which consequently leads to increased profitability. Information communication technologies are also essential to Egg company so that communication between the management and employees is faster, prompt and more effective, thus increasing the individual performance and overall performance of the company. References Cohen, Susan. G. & Bailey, Diane. E. What makes teams work: Group effectiveness research from the shop floor to the executive suite? Journal of Management. June 1997, 23(3):239–290 Lussier, Robert & Achua, Christopher. Leadership: Theory, application, and skill development (4th ed.). Mason, OH: Thomson South-Western, 2009. Miner, John B. Organizational Behavior. Armonk, N.Y.: M.E. Sharpe, 2005. Mukherjee, Kumkum. Principles of Management and Organizational Behaviour. New Delhi: Tata McGraw-Hill, 2009. Phillips, Jean, and Stanley Morris Gully. Organizational Behavior: Tools for Success. Mason, OH: South-Western Cengage Learning, 2012. Warrick, Don. D. "Leadership Styles and Their Consequences". Journal of Experiential Learning and Simulation. 1981, 3(4): 155-72. Read More