The Notion of Leadership and Ways of Leading for Organisational Change - Essay Example

A critical examination of the notion of leadership and ways of leading for organisational change Introduction In contemporary business environments, the terms management and leadership are often utilised to describe the activities and obligations of those enlisted to allocate resources in order to achieve strategic goals. Though they are often used inter-changeably, the conceptions are quite different. Management involves the tangible coordination of activities and people to achieve specific objectives, consisting of efficient resource allocation and control over people and their job roles. Leadership, in the other hand, is fundamentally different. Leadership is a more socially-based type of influence in which a person procures support and assistance from others within the organisation in the hopes of achieving a common goal (Chemers 1997). Leaders, unlike managers, seek followership through the process of guiding others, using a variety of strategies to build trust, strengthen social relationships, and generally motivate others to achieve their maximum productivity and organisational commitment. To be a competent leader, a person must have many different traits that differ from traditional command-and-control management. Such traits include emotional intelligence, extraversion, maintaining a general openness to new experiences, and self-efficacy (Foti and Hauenstein 2007). Leadership, in many cases, is more valuable than traditional management activities especially in dynamic and ever-changing organisational environments. In organisations where change is constant and a part of the organisational model, it requires a competent leader to build a culture of commitment as it is a common occurrence that employees will inherently resist change. Hence, it takes a leader to ensure that goals are achieved, new practices are adopted by employees, and ensure that change activities are embraced by the organisational population. Having defined leadership, this essay explores the notion of leadership, using illustrative examples of different leadership styles in an effort to show how leadership has evolved and what options are available to leaders today to gain commitment and followership. The essay further relates these strategies to the change process to understand how leadership can be a valuable concept for ensuring that organisational change occurs fluidly and without resistance. Transformational leadership There is a type of leadership referred to as transformational style in which leaders must be visionary, inspiring, where open channels of communication are available, and where the leader works diligently to inspire confidence and improve motivations in followers (Fairholm 2009; Leithwood and Poplin 1992). Transformational leaders role model behaviours which are desirable in order to motivate workers to adopt these same behaviours, which serves to inspire trust in the leader and his or her decision-making processes. A transformational leader focuses on being flexible and providing opportunities for autonomous working conditions, which in turn creates dedication and employee loyalty toward the attainment of important strategic goals. A transformational leader is considerate of the emotional and psychological needs of employees and works regularly to satisfy these needs, rather than being focused on the political aspects of organisational activity. Consensus-based relationships are part of the transformational model whilst the leader also works to mentor or coach in order to build worker competencies and skills development. In general, under this style of leadership, the leader must gain commitment and compliance to change activities by providing power-sharing opportunities and building a type of democracy within the organisation. Barrett (2010) iterates that in order to build a genuine and legitimate democracy, there must be several characteristics present in the environment. These include freedom, transparency, fairness, equality, personal accountability and general openness. According to Almond and Verba (1963, p.251) “if there is no consensus present within the organisation, there can be little potentiality for the peaceful resolution of political differences associated with change”. Hence, transformational leadership and its many characteristics necessary to sustain a democratic environment provide for the construction of employee motivations to adopt change practices which are based on enhanced commitment achieved by the leader and the level of trust established between workers and leader. According to Ford, Ford and D’Amelio (2008), when change is introduced into the organisation, leaders and managers are subject to irrational and illogical responses which lead to change resistance. Hence, there are inherent psychologically-based problems that often occur when change practices are introduced into the organisational model. This is why having emotional intelligence as a transformational leader is so critical. Emotional intelligence is a personality-based trait where the leader is able to show self-restraint, is able to remove illogical perceptions from their though processes and maintains a constant recognition of the emotional states of others in the organisation (Boyle, Matthews and Saklofske 2008). Emotional intelligence is the antithesis of organisational politics in which an individual seeks primarily to serve their own interests and works to position their career in a way that satisfies self-centred objectives. Transformational leaders must show empathy rather than seeking to fulfil a unitary agenda if trust is to be developed between leader and follower as a result of the multi-faceted and complex psychological considerations that impact whether change is embraced or resisted. High levels of emotional intelligence are required in order to build commitment, compliance and motivation to a variety of change strategies when they are introduced into the organisation. Transformational leadership also establishes a scenario known as psychological safety which is ensuring that the emotional and psychological needs of employees are satisfied and continuously considered (Terrell 1989). This entails providing employees with coaching or ensuring that regular feedback is provided to employees to illustrate that they are valued contributors to the organisation. One method of accomplishing followership necessary to facilitate change is the provision of autonomy. Autonomy provides employees with a sense of authenticity and trust whilst also establishing credibility of those charged to govern employee activities (Burton 1999). According to Ferris, Behawuk and Zhou (1996) credibility is established and improved by providing balanced justice systems where employees begin to believe that leadership fairness has been established. Illustrating to employees that they are trusted can be accomplished by giving them opportunities to work independently without constant managerial presence and control, thereby establishing employee perceptions of justice and fairness. For example, Markey (1999, p.128) states that management team members will not be able to rally employee support simply by using “balance of power arguments”. In organisations where there is considerable power distance between employees, simply restructuring the organisation to provide consensus-based activities will not be enough to ensure that change resistance does not occur. Instead, a competent leader gains support by working regularly to build a committed organisational culture in which there is recognisable and measurable decentralisation of decision-making authority that is shared horizontally rather than vertically. In fact, Merriam, Caffarella and Baumgartner (2007) iterate that it is necessary to ensure full engagement of employees if there is to be long-term learning and commitment. This is why transformational leadership is an effective leadership ideology for ensuring that change resistance does not occur as it provides opportunities for power sharing, creating autonomous opportunities, enhances participative governance, and generally enhances motivation as a result of making appeals to the psychological attributes of employees. This model allows for employees to express their unique creativities which, in turn, provides job satisfaction that makes planning change practices easier and ensuring that change can be implemented without recurring resistance from those employees who must contribute to make the change a success. Transactional leadership There is another type of leadership known as transactional leadership in which the leader and followers establish a contract which clearly identifies the potential rewards and consequences for compliance or non-compliance. Transactional leaders develop contingent rewards strategies that are applied when an employee meets or exceeds expectations related to a new change project or special task (Antonakis, Avolio and Sivasubramaniam 2003). Ensuring there is a clear understanding about what is expected from employees and what they might receive as a result of performance levels enhances motivation and establishes vigilance within employees as it pertains to achieving change goals. Transactional leadership is rather simplistic and does not involve a great deal of commitment on behalf of the leader. Instead, employees, once given a task and a set of potential rewards, are allowed to engage in their delegated task without a great deal of managerial influence and control. If employees are successful, they are given rewards. If they are unsuccessful in completing the task according to the contract, they must take accountability and face whatever consequence has been established. Transactional leadership, therefore, provides a foundation of trust once employees recognise that the leader is actually going to fulfil their contractual obligations and improves motivation as a result of receiving extrinsic rewards as a benefit for their high levels of performance for a new change-related task or project. Change is easier to implement in an environment where employees are motivated and extrinsic reward generation is a quality method of ensuring commitment and dedication from employees in the organisation. Empirical studies have supported that the use of extrinsic rewards are valuable in gaining commitment and motivation. Wang, Chen, Hyde and Hsieh (2010) conducted a study involving 260 employees that were part of multi-national businesses in the semiconductor industry with the intention of measuring the value of pay systems. Results of the study indicated that pay satisfaction was the best method of satisfying and motivating employees. This is why transactional leadership is so effective in removing change resistance especially when rewards for performance and compliance come in the form of bonuses or other remuneration packages. Cotton and Tuttle (1986) further support this, offering that bonus packages for performance significantly enhances commitment to the organisation and reduces employee turnover problems. Change agents – a new type of leader Many businesses, in order to ensure that change is enacted efficiently and without resistance, adopt a new type of leader known as a change agent. This type of leader maintains knowledge in specialised areas related to the change (i.e. accounting, IT or production) who also serves as a type of behavioural scientist who inspires others and appeals to the psychological needs of employees that often lead to change resistance. The most critical strength of this type of new leader is to maintain advanced knowledge of human behavioural traits and provide positive interventions with employees on a regular basis to gain commitment and build motivation. Change agents build strategies to better engage employees which are founded on concepts of the act utilitarianism ideology. In this sense, change agents work regularly to improve individual utility of all stakeholders that must contribute to change (Hooker 2011). The goal is to build cooperative coalitions between employees and managers rather than using power and authority as a means of gaining employee compliance. This, of course, requires the leader to build trust, organisational commitment and establish a culture of compliance and performance to ensure change practices occur effortlessly. One example of why change agents are so effective as a new type of leadership can be illustrated with a scenario that occurred at Hereford National Bank. The business development manager of the organisation was required to launch a new type of sales strategy which was resisted upon introduction by managers and employees with considerable tenure in their job roles. The business development manager attempted, at first, to use power and authority to gain commitment, such as cutting off access to perks provided with expense accounts; a political activity designed to guarantee conformity and compliance from the employees and managers (Mainolfi 2000). Realising that this was leading to even more resistance, the development manager began a thoughtful analysis of the environment to determine what was specifically driving resistance, realising that building coalitions and building strong teams would improve commitment and enact the change more successfully. It was determined that the development manager would take on the role of change agent in order to build mutual and trust-based relationships whilst role modelling teamwork ideology. The development manager in the role of change agent began a routine consultation process with employees, appealing to their attitudes and emotions as it related to the new sales strategy that had been launched. Ultimately, by illustrating legitimate empathy and attempting to create systems that would better facilitate the new sales strategy, the change agent leader was able to build necessary coalitions and reduce resistance that had originally complicated enactment of the new sales strategy. What appears to make change agents so successful as a method of reducing resistance is that they have multi-faceted skills and knowledge on how best to engage employees and improve their enthusiasm levels toward the change. Though there is no singular type of leadership style that is most effective in this type of leadership role, it does reinforce the concepts of transformational and even transactional leadership as it inspires, rewards, motivates and builds commitment toward achievement of desired change-related goals and objectives. Yet another example where change agents have been successful as a leadership strategy is in the Sony Corporation. After reporting billions in financial losses for failing to produce innovations that could outperform competition, Sony began an analysis of what was driving poor performance. Employees at the firm were resistant to change practices that involved more collaboration and team-working in a culture that had, historically, been driven by high levels of power distance and minimal inter-group collaboration. Sony realised it required a culture development of collaboration if the business was to be successful in producing innovative products that required regular cooperation with disparate workers who were unaccustomed to working in this fashion. As a result, the company hired a liberal Chief Executive officer with a long history of leading rather than controlling as a means of inspiring commitment and building team ideology within the culture. This executive began promoting a shared mission and vision whilst opening doors of communications when attempting to decentralise the very strict hierarchical organisational structure that once drove compliance. This was aligned with transformational leadership which radically altered the quality and dynamics of the leader-member exchanges within the organisation. The Chief Executive, who did not come from the hierarchical Japanese business environment, began to inject opportunities for more autonomous working and many other Western-based ideals designed to motivate employees. Change, therefore, became successful and resistance reduced by building an organisational culture of shared decision-making and illustrating a participative leadership philosophy. Change success meant having to radically alter the long-standing Japanese cultural values that pervaded the business environment and role model behaviours of team ideology in order to build important coalitions that are the responsibility and obligation of a new change agent. Conclusion As indicated, due to the many different types of irrational and illogical responses to change that occur as a result of complex psychological considerations in employee populations, it is necessary to adopt a leadership ideology rather than a managerial structure if change is to be successful. The situations illustrated in Sony Corporation and Hereford National Bank clearly support that change resistance can be reduced by appealing to employee attitudes, altering culture, building coalitions, and generally seeking to satisfy the utility of employees. Management, in its traditional form of command-and-control, is insufficient for gaining employee commitment and establishing a motivational environment. Instead, as illustrated, leadership and its fundamental practices of considering psychology, sociology and human behaviour is the most effective ideology for promoting and enacting change successfully. References Almond, G. and Verba, S. (1963), The Civic Culture, in Weingast, B. The political foundations of democracy and the rule of law, American Political Science Review, 91(2), pp.245-262. Antonakis, J., Avolio, B. J., and Sivasubramaniam, N., (2003). 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