Leadership and Management Are Both Needed for Sustainable Organisations - Essay Example

LEADERSHIP AND MANAGEMENT ARE BOTH NEEDED FOR SUSTAINABLE ORGANISATIONS Introduction: Going by the established definitions of management and leadership, it can be observed that most of the success stories of the business houses are being accredited to effective managerial and leadership capabilities. In relation to this, an interesting notion made by Hill and Jones (2006) is that whether the success of a business firm based on the managerial or leadership capabilities is still a highly concentrated debate among the scholars. Also, the contradiction regarding the functioning of the various leadership and management styles is another influential factor in the business decision making process. On the other hand, with the rapid growth of the business sector and constant changes in the nature of markets, the theories, concepts and practices of leadership and management have also evolved (Baker and Desjardins, 2013). Relating to these changes, this essay focuses on analyzing the contribution and use of leadership and managerial concepts in ensuring sustainable business practices and growth. Aligning leadership and management in organizational practices: As stated by Brown, Treviño and Harrison (2008), selection of the managerial process in a business is dependent upon the style of leadership being applied. On the other hand, Bogardus (2009) mentioned that the management practices of a firm define the leadership styles that can be implemented. Both of these notions can be analyzed in an in-depth manner by reflecting their characteristics and objectives of utilization. As highlighted by Morgan (2009), the key objective of management is to enhance that the aims of the organization can be fulfilled while leadership establishes the mission and vision that provides direction to a company. Supporting this notion, Kim and Brymer (2011) further added that as an organization is structured and the work culture is established, the style of leadership among the various operational variables of the business differ. In the business sector, this sort of alignment between leadership and management can be often observed. As an evidence for the above stated concept of alignment of leadership and management, the managerial process of Google Plc can be taken into consideration. The mission of Google is to help in spreading knowledge by innovating new platforms for sharing information all over the world (Day, Harrison and Halpin, 2012). Based on this mission, the managerial and leadership aspects of the company are developed. Lunenburg (2011) highlighted that Google being a technology firm depends on innovation and thus have created a participative managerial and leadership culture within the organization. Transformational leadership supported with a democratic management has helped the company in achieving the heights of success in their respective industry. From this example, another consideration can be drawn into the limelight for evaluating the alignment of leadership and management i.e. the utilization of core values of a company to develop their managerial styles. Researchers such as Walumbwa et al. (2011) and Avolio, Walumbwa and Weber (2009) have created the following pyramid that focuses on aligning the leadership and management process of the firm: Figure 1: Alignment of Management and Leadership (Source: Avolio, Walumbwa and Weber, 2009, p.437) In accordance with the steps in the above given pyramid, it can be gathered that management can be termed as the overall process that ensures fulfilment of the organizational objectives and creates a learning cycle as per the needs of the company. Yulk (2010) maintains that challenges in leadership and managerial practices appear mainly because limited knowledge regarding the process of handling various situations which often results in disastrous consequences. These sentiments although are acknowledged by scholars such as Humphrey, Morgeson and Mannor (2009) and Wright and Taylor (2007) are not considered as universally acceptable for resolving leadership and managerial conflicts. According to the study of Deal and Kennedy (2008), aligning leadership practices with employee nature is the best applicable solution if the leadership responses are parallel with the organizational objectives Theoretical underpinnings of Leadership and Management: Leadership and management theories over experienced many changes over the years, however since the beginning of the 21st century and the extensive involvement of technological growth the changes have become more rapid (Bel, 2010). In this context some of the most applied theories can be examined. Leadership styles such as transformational and transactional are being used for democratic and authoritative management cultures all over the world. Mumford and Connelly (2008) mentioned that business houses decide upon their leadership and managerial decisions based on the core value of the organizations. Based on this, Lencioni (2011) noted that organizational work process can be categorized into three segments namely, goal oriented, customer centric and employee-centric. Employee centric organizations such as Tesco (retail giant), Google or Facebook (IT firms) try to generate a loyal employee base by focusing on their needs (Rubin, Dierdorff and Brown, 2010). Their leaders are transformational and motivate their employees with the help of tangible and intangible rewards. Opposed to this, goal oriented culture focuses on performance based preference to the employees, the employee motivation is primarily directed towards achievement of objectives and handling critical situations or barriers to work. Similar to this, customer centric organizations such as Virgin Group are more focused on fulfilling the customer needs and try to enhance the productivity and performance of their workforce (Ott, 2007). Focusing on the cut throat completion in the business segment, Walsh (2009) explained that developing a growth strategy is not sufficient, but companies must ensure that their strategies are sustainable. The concept of competitive advantage developed by Michael Porter is based on this thought (Lavie, Haunschild and Khanna 2012). According to the study of Yukl (2010), leadership and managerial skills implemented in the practical scenario are based on their personal traits and the urgency of the situation. The influence of situations and environment were identified by Yukl (2010) as influencers that can affect the employees. The influencers have again been categorized into positive and negative influencers. Positive influencers includes appraisal, rational persuasion, inspirational appeal, consultation, exchange and collaboration while the negative influencers are coalition, legitimation, ingratiation, pressure and personal appeals (Yukl, 2010). These influencers are being used in the corporate houses to develop a specific trend for resolving managerial and leadership conflicts. Baker and Desjardins (2013) consider that leadership and managerial concepts are based on psychological aspects rather than material and logical perspectives. This argument reveals the constant changes in nature of leadership in accordance to the complexity of the scenario. (McGee and Wilson, 2011) contradicted the concept of leadership influencers as changes in managerial polices can also change the outcome of the influencers. For instance, in a transactional leadership approach or autocratic managerial policy pressure is consistent and is considered as a positive factor for maintaining discipline. Sustainable organizational changes and role of management and leadership: Schunk, Pintrich and Meece (2008) believed that discipline is the most effective tool for ensuring a continuous improvement cycle and a sustainable business process which requires strict management and fewer hands to control the reins of decision making. On the other hand, Elango Houghton and Savelli (2010) stated that business houses focusing on gaining a sustainable business practice needs the support of their stakeholders and hence participative leadership or democratic management is more suited for the purpose. Considering these suggestions, the changes taking place in the business scenario have to be assessed first. One of the key trends in the business activities is the extensive focus on developing consumer relationship (Ireland and Sexton, 2010). Customer relationship is a part of the marketing functions of a firm and involves individuals who have the ability to understand and interpret the customer needs and wants. One of the most impressive customer engagement processes is reflected by the leadership abilities of Apple Inc CEO Late Steve Jobs during the marketing campaign “Think Different” (Youtube, 2013). Steve Jobs stated that companies should try to reflect their core values to their customers for developing a transparent relationship (Youtube, 2013). This vision of Steve Jobs revealed Apple as one of the most wanted brands in the global market place and changed the marketing objectives of many firms (Hitt, Ireland and Hoskisson, 2009). Although the above cited example is related to marketing but it also reflects the leadership abilities of an individual who would come to change the operations of the company in the future. A more direct approach would lead to the direct influence of managerial and leadership polices on the business practices. Wright and Taylor (2007) explained that often change in the organizational aim or the strategic planning process introduces changes in the functional aspects of the business which also involves changes in the process of management and leadership. In this regard, the observations of Bel (2010) highlighted that business expansion strategies such as mergers and alliances often includes vast changes in the operational process of the firms involved in the process, as a result the role of management and leadership processes are highly valued. Amalgamation of two separate business processes can often result in a chaotic situation within the work environment that needs to be managed with the help of proper leadership abilities of the managers (Hitt, Ireland and Hoskisson, 2009). Other sustainable organizational changes include changes in the vision, mission and culture of an organization which can redirect the work process and hence needs to be guided by an apt leader. Contribution of leadership and management in enhancing sustainability of a firm: Rubin, Dierdorff and Brown (2010) stated that although leadership and management work in synchronisation, they fulfil different objectives for a company. Leadership is used for setting the direction and goals of the company and sets the strategic objectives for the firm whereas management ensures designing a process that can help in attaining the set objectives. McGee and Wilson (2011) specifically mentioned that functions such as budget development, work process and resource allocation are some critical roles developed with the help of managerial skill set and knowledge base. On the other hand, Day, Harrison and Halpin (2012) reflected that leadership identifies the needs and requirements of a firm whereas management ensures attainment of these requirements. For instance, the leader contributes in developing a shared vision among the organisation and its workforce whereas management ensures that the most suitable employee base is available for the leader. Considering the example of Apple Inc. again, it can be observed that their strategy of vertical integration has helped them to develop a sustainable cost competitive advantage (Day, Harrison and Halpin, 2012). In this case, the strategy of involving vertical integration was the role of leadership while implementing it in the appropriate manner was the contribution of management. Morgan (2009) mentioned that in the contemporary business situations, most of the firms are trying to develop a management process that can help them in gaining a long-term sustainable competitive advantage. This has also enhanced the role of leaders of the organisation as they have to comprehend the changes and also develop a communicative network with the employee base that will help in creating a mutual platform for communication. McGee and Wilson (2011) assessed that while leadership motivates the employees to adapt to the changes, the managers’ role is to ensure that the work structure can be aligned with the organisational changes and the employee requirements. However, alignment of management and leadership is a complex process in real-life scenario. Most of the business organisations are facing problems in ensuring a smooth and sustainable business practice (Lencioni, 2011). The rapid changes in the market forces of demand and supply fuelled by the changes in consumer behaviour is creating a cycle of adaptations and evolutions for the business houses rather than developing a steady operational process. On the other hand, Houghton and Savelli (2010) also portrayed that in order to gain leadership and management alignment, the firms must involve their stakeholders who can elongate the decision making process and reduce the ability of a business to adapt to the market changes. Conclusion: Sustainable growth of a business process has been considered by many scholars as the result of expert leadership and managerial skills. Changes in the business environment have also resulted in changes in the theories and concepts of leadership and management. Often researchers have argued over the superiority of leadership and management in context of their importance and role in the business development process. But in practicality, it has been assessed that leadership and management contributes towards a business can be best attained when they are aligned. However, implementing the same in the practical world scenario includes many complicacies such as vision alignment with the employees, alignment of interest of the managers of the firm, etc. Although, both leadership and management are intangible aspects of business functions, their contribution or role for developing a sustainable business can be measured by examining the overall performance of the firm. Reference List: Avolio, B. J., Walumbwa, F. O. and Weber, T. J., 2009. Leadership: Current theories, research and future directions. Annual Review of Psychology, pp. 421-449. Baker, M. and Desjardins, C., 2013. The Leadership Task Model. Journal of Applied Leadership and Management, 2, pp. 17-32. Bel, R., 2010. Leadership and Innovation: Learning from the best. 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