Developing Management and Strategic Skills - Motorola - Case Study Example

Developing Management and strategic skills – Motorola Table of contents Introduction 3 2. of the relationship between strategic management and leadership 2.1 Link between strategic management and leadership 3 2.2 Analysis of the impact of management and leadership styles on strategic decisions 7 2.3 How leadership styles can be adapted to different situations 9 3. Application of management and leadership theory to support organizational direction 3.1 Impact of selected theories of management and leadership on organizational strategy – the case of Motorola 10 3.2 Creation of a leadership strategy that support organizational direction in Motorola 12 4. Assessment of leadership requirements – Motorola 4.1 Review of current leadership requirements 13 4.2 Plan for the development of future situations requiring leadership 16 5. Plan for the development of leadership skills – Motorola 5.1 Plan for the development of leadership skills for a specific requirement 16 5.2 Usefulness of methods used to plan the development of leadership skills 17 6. Conclusion 18 References 19 1. Introduction The ability of leaders to develop effective decisions is depended on a series of factors. Extremely hostile market conditions can result to delays in the realization of organizational plans. The use of a leadership style that it is aligned with organizational needs and market trends limits the risks for potential failures in applying organizational strategies. On the other hand, the criteria on which leadership decisions are taken are not standardized. Market ethics and organizational objectives are common factors that influence leadership decisions in organizations of all sizes. Current paper focuses on the interaction between leadership and strategic management. Also, the potential use of strategic management and leadership in order to establish appropriate organizational direction is critically reviewed. A well known firm in the global market, Motorola Mobility, is used as an example for understanding the various aspects of the particular subject. The leadership skills in Motorola are reviewed and evaluated; a plan for the development of these skills so that leadership is able to support more effectively the organization’s strategic needs. 2. Description of the relationship between strategic management and leadership 2.1 Link between strategic management and leadership In order to understand the relationship between strategic management and leadership it is necessary to refer primarily to the role of strategic management, as one of the most important elements of each organization. Different views have been developed in regard to the role of strategic management in modern organizations. For example, strategic management may focus on the ‘grouping of organizational tasks and functions’ (Hill and Jones 2012, p.417), so that the success of organizational strategies is secured. Strategic management also refers to the review of strategic aims and objectives, both in terms of their feasibility and of their alignment with market ethics (Hill and Jones 2012). In addition, strategic management involves in business analysis, i.e. the review and evaluation of each firm’s internal and external environment, so that organizational needs and market threats are identified and appropriately addressed (Harrison and St John 2009). Using the findings of strategic analysis, strategic managers can propose strategic plans that will ‘best fit the organization’s environmental, technical and human forces’ (Harrison and St John 2009, p.18). The management of organizational resources is also considered as part of strategic managers’ responsibilities (Harrison and St John 2009). In addition, strategic management refers to the management of change, in all its phases, within modern organizations (Prasad 2009). At the same time, Prasad (2009) emphasizes the power of strategic managers to identify and evaluate the skills of employees so that teams that can perform quite high in regard to various organizational tasks are established. It should be also noted that the strategic management sets the rules that will govern organizational operations and the content, at least in general, of these operations (Prasad 2009). From a similar point of view, strategic decision making has been related to strategic management (Harrison and St John 2009). Indeed, strategic decisions need to be developed using strategic thinking so that potential risks are identified early (Harrison and St John 2009). Strategic thinking, as mentioned above, reflects the creativity on which strategic decisions are based so that they can help organizations to achieve competitive advantage. In regard to the above, strategic management can highly help towards the improvement of organizational performance, either in the short or the long term. At this point, it would be necessary to refer to the characteristics of leadership, as part of organizational environment. Different criteria have been employed for defining leadership. For example, leadership has been characterized as focusing on the ‘development and motivation of followers’ (Van Wart 2012, p.328). In a similar definition, leadership has been described as ‘the process of persuasion and example by which an individual induces a group to take action that it is aligned with leader’s purposes’ (Roussel 2011, p.731). In other words, leadership seems to focus on ‘influencing others to perform specific tasks’ (Roussel 2011, p.731). In the context of a similar decision, leadership has been defined as the provision of directions to a group of people so that a particular goal is achieved (Griffin and Moorhead 2011). From a different point of view, leadership has been related to ‘shared responsibility and mutual influence’ (Marturano and Gosling 2008, p.98). Leadership has been also used for indicating group action. In this context, leadership has been described as ‘the ability of human community to shape its future’ (Marturano and Gosling 2008, p.98). At the same time, leadership has been related to the ability of the leader ‘to manage adaptive challenges’ (Marturano and Gosling 2008, p.98). In order to promote his ideas within a particular organization a leader needs to employ appropriate communication methods; reference is made to the communication between the leader and his followers. This communication can be either direct, resulting to direct leadership where the leader communicates ‘face-to-face with his followers’ (Marturano and Gosling 2008, p.64), or indirect, where ‘no interaction exists between the leader and the followers’ (Marturano and Gosling 2008, p.64). The latter simply follow the rules set by the leader so that specific targets are achieved (Marturano and Gosling 2008). A framework commonly used for understanding the responsibilities of a leader is Mintzberg’s theory on Managerial roles (Koontz and Weihrich 2006). This theory is based on the following view: Managerial roles, as appeared in modern organizations can be divided into three main categories: ‘Interpersonal, Informational and Decision roles’ (Koontz and Weihrich 2006, p.16). Each of these categories is further divided, aiming to cover all potential aspects of managers’ responsibilities and powers (Koontz and Weihrich 2006). The 10 Managerial roles, as described by Mintzberg, are presented in Figure 1 below. Figure 1 – Mintzberg’s 10 Managerial roles (Source: http://www.provenmodels.com/88) Managers in modern organizations should meet the requirements related to all the categories presented above (Figure 1). It is possible, of course, for a leader to emphasize more on certain parts of the above model. For example, it is possible for a leader to focus on decision making rather than the process of information (Schermerhorn 2011). However, major differences in the performance of the leader in regard to the above categories, could decrease his effectiveness as a leader (Schermerhorn 2011). According to the issues discussed above, strategic management is closely related to leadership. Indeed, a leader cannot achieve the strategic objectives unless he has the following qualities: ability to communicate and to negotiate, ability to take initiatives and to identify solutions in unexpected problems, ability to manage change and to resolve conflicts, ability to process information effectively and ability to motivate others. These qualities, which are also highlighted in Mintzberg’s 10 Managerial roles, need to characterize the successful leaders; these leaders are more likely to achieve the strategic objectives of their organizations compared to those leaders that cannot meet the above requirements. It is in this way that strategic management is linked with leadership. The relationship between strategic management and leadership, as described above, is not affected by the size or the structure of the organization. However, organizational culture can affect leadership style, influencing also the ability of the leader to achieve strategic objectives (Schermerhorn 2011). 2.2 Analysis of the impact of management and leadership styles on strategic decisions At the following level, the impact of leadership styles on strategic decisions should be analyzed. The leadership styles can be highly differentiated, according to the conditions in the organizational environment, the needs of the organization but also the leader’s attitudes and perceptions. The most common leadership styles are the following: a) transformational leadership style; the above leadership style was first identified by Burns (1978) but was highly expanded by Bass (1985). The transformational leadership style emphasizes on the need for motivation and morality both in regard to the follower and the leader (Ricketson 2008, p.18). In fact, it seems that the specific leadership style leads to the ‘increase of trust and respect between the leaders and their followers’ (Bass 1985 in Ricketson 2008, p.18); b) transactional leadership style; it was also promoted by Bass (1985); this leadership style indicates ‘the mutual exchanges on a continuous basis so that common goals are achieved’ (Ricketson 2008, p.18); In regard to the above two leadership styles, the following fact needs to be highlighted: the transformational leadership style is depended on the transactional leadership style (Ricketson 2008); however, the latter is not depended on the former (Ricketson 2008) ;c) Participative leadership style; it emphasizes on the cooperation between the leader and the members of a group for the development of each decision (DuBrin 2008, p.348); d) Autocratic leadership style; it can be characterized as the opposite of the participative leadership style; in autocratic leadership, the leader gathers all powers, avoiding cooperation in decision making (Daft 2008); e) Charismatic leadership style; it exists when the personality of a leader ‘plays a critical role in his success’ (DuBrin 2008, p.356); f) bureaucratic leadership style; it is used for describing a leader who avoids to take initiatives, preferring rather to follow standardized procedures (Dubrin 2008); g) laissez-faire leadership style; it refers to a leader who allows his followers to take initiatives and promote their own ideas in regard to the tasks assigned to them (Ricketson 2008). The leadership styles presented above can highly impact the organizational culture. For example, if the organizational culture favours the increased participation of employees in the decision making process it is possible for the leader to follow a different practice, keeping all powers for him not allowing initiatives; such practice would be related to an autocratic leadership style. In the same way, the leadership styles can influence the strategic decisions. For example, an autocratic leader is expected to take decisions without asking his followers; on the contrary, strategic decisions in an organization based on participative leadership reflect the views of both the leaders and his followers. Also, in the context of laissez-faire leadership, the followers have a critical role in decision making process; thus the strategic decisions taken in such environment would be quite flexible and supportive towards the employees’ needs. In other words, the leadership style influences two different aspects of strategic decisions: a) their content and b) the process through which these decisions are taken. 2.3 How leadership styles can be adapted to different situations As already explained above, leadership styles are highly differentiated in regard to their characteristics. Depending on their leadership style, leaders can respond differently to similar organizational problems. This means that each leadership style is more related to specific aspects of each organization. At this point, the following issue appears: how can leadership styles be adapted in order to respond to different situations. There are certain factors that can set barriers to the efforts of a leader to change his leadership style so that he is able to respond to different organizational needs. These factors can be: a) the organizational culture (Liebler, J. McConnell 2004), b) the organizational rules (Montana and Charnov 2008), c) the characteristics of employees (Montana and Charnov 2008); the term characteristics, as mentioned above refers to a variety of issues, such as employees’ perceptions, employees’ skills, employees’ support towards the employer and so on (Liebler, J. McConnell 2004) and d) the ‘Personality and Ability of manager’ (Liebler, J. McConnell 2004, p. 451). The factors mentioned above need to be taken into consideration every time that the adaptation of leadership to different situation is attempted. In addition, the following issue needs to be taken into consideration: the potentials of a leader to adapt his leadership style to different situation is depended on the leader’s ability to incorporate ‘a strategic orientation in all operations of the organization’ (Morrill 2010, p.217). In addition, a leader who promotes change is more capable in changing his leadership style according to the conditions in the internal or the external environment compared to a leader who is opposed to change (Lussier and Achua 2009). . 3. Application of management and leadership theory to support organizational direction 3.1 Impact of selected theories of management and leadership on organizational strategy – the case of Motorola The use of leadership style in order to secure the success of organizational strategies can be characterized as quite justified. However, not all leadership styles can influence organizational strategies. The case of Motorola can be used as an example to explain the particular view. An overview of the organization’s history and operations is necessary in order to understand the potential interaction between leadership style and organizational strategy in Motorola. Motorola Mobility is a major competitor in the global market; the firm produces a high range of products based on advanced technology, such as mobile phones, home entertainment systems, networking solutions, software and so on (Motorola, Company Profile). The firm was first established in 1937 and through the decades its expansion has been impressive (Motorola, History). Today, the firm ‘is owned by Google’ (Motorola, Company Profile). In Motorola emphasis is given on the interests of stakeholders, including customers, employees and the community. Environment also has a key role in the development of the firm’s strategic decisions (Motorola, Corporate Social Responsibility). According to the corporate website the strategic decisions of the organization are based on certain criteria: a) keeping costs low, b) controlling risks in regard to all operations of the organization, c) keeping quality of products high, d) keeping customer loyalty at high levels, e) attracting highly skilled employees and f) using specific standards when managing supply chain (Motorola, Corporate Social Responsibility). The above facts will be used as the basis in order to evaluate the interaction between leadership styles and organizational strategy in Motorola. Reference should be made to the leadership and management theories presented in previous sections. The organizational strategy of Motorola seems to be influenced mainly by the following leadership theories: a) the transformational leadership theory (Bass), which promotes the idea of mutual respect between employer and employees; b) the Transactional leadership theory (Bass) that promotes the idea of close cooperation and exchange of ideas between employer and employees; c) the situational theory (Vroom); the fact that costs and risks need to be controlled indicates the intention of the organization to change its organizational strategy according to the conditions in the internal and external environment so that the above target is achieved, i.e. so that costs and risks are kept at low level; d) the Emotional Intelligence theory; reference can be made, as an example, to the studies developed by Sivanathan and Fekken (2002) and those developed by Rubin, Munz and Bommer (2005); the first team of researchers proved through their studies that ‘the behavior of both leaders and followers can be influenced by emotional intelligence’ (Stough et al. 2009, p.177) while the second group of researchers found that transformational leadership is highly depended on emotional intelligence (Stough et al. 2009). Emotional intelligence, as mentioned above, could influence the effectiveness of Motorola’s organizational strategy as follows: in order to support effectively the organizational strategy, leaders in Motorola should ensure that they are able to respond to the requirements of three different variables: ‘a) stress, b) leadership and c) conflict management’ (Stough et al. 2009, p.175). These variables could be considered as constraints in regard to the efforts of leaders to develop the organizational strategies. It should be noted that Emotional Intelligence reflects ‘the ability to work well with people’ (Lussier and Achua 2009, p.40). Emotional Intelligence is also known as Emotional Quotient (Lussier and Achua 2009) and it has four key components: ‘a) self awareness, b) social awareness, c) self management and d) relationship management’ (Lussier and Achua 2009, p.40) and reflect the ability of an individual to understand and manage his perceptions and needs but also the individual’s ability to understand and manage his social environment (Lussier and Achua 2009, p.40). The organizational strategy in Motorola, as based on specific targets which are described in the corporate website, seems to be highly influenced by the leadership theories presented above. Of course, certain changes on the leadership strategy used in Motorola could be possible, aiming to enhance further the effectiveness of organizational strategy. Such plan is presented in section 3.2 below. 3.2 Creation of a leadership strategy that support organizational direction in Motorola According to the issues discussed above, the existing leadership strategy in Motorola could be improved, at least in certain of its aspects, meeting more effectively the requirements of the firm’s strategies. In this way also, the organizational direction of the organization could be supported more effectively. The leadership strategy proposed for Motorola should incorporate the elements presented in Figure 2, below. The elements are presented in an hierarchy aiming to denote that the factors at lower levels of the hierarchy should be secured in advance, before proceeding to factors at upper levels of the hierarchy. It should be noted that the leadership strategy in Motorola could be characterized by flexibility, being open to changes according to the conditions in the organization’s internal and external environment. Figure 2 – Leadership strategy for supporting organizational direction 4. Assessment of leadership requirements - Motorola 4.1 Review of current leadership requirements In order to evaluate the effectiveness of Motorola’s current leadership style it is necessary to assess, primarily, the conditions in the internal and external organizational environment. Reference is made primarily to the conditions which can influence the firm’s leadership style, either in the short or the long term. In the literature, the factors that can interact to a firm’s leadership have been analytically explored. These factors could be described as follows: a) the diversity of the workforce (Morden 2012), b) the structure of teams/ groups in the workplace (Amason 2010), c) the ethical and regulatory framework related to each organization (Morden 2012), d) the processes used for the organization’s expansion, meaning especially the mergers and acquisitions (Morden 2012), e) the corporate social responsibility of each organization (Amason 2010), f) the need for new technology (Van Dam and Marcus 2007), g) the need for continuous update of the organization’s control and reporting systems (Van Dam and Marcus 2007), h) the international economic climate, i) the potential need for e-leadership and k) the globalization. Referring to Motorola, the leadership requirements could be described as follows, based on the categories presented above: a) the firm already focuses on diversity; as noted in the corporate website, promoting diversity and fairness is among the priorities of the organization (Motorola, Corporate Social Responsibility, Employees, 2013); in fact, in 2011 the organization established ‘a Global Diversity Council’ which aims ‘to promote the firm’s diversity strategy’ (Motorola, Corporate Social Responsibility, Employees – Diversity and Inclusion, 2013); b) in Motorola managers emphasize on team work for securing that daily tasks are performed effectively (Motorola, Corporate Social Responsibility, Employees, 2013); c) the firm’s Corporate Social Responsibility Framework ensures that the organization’s activities are aligned with business ethics and relevant laws, as related to the particular industry; in 2011, there was no legal settlement for the organization, a fact that indicates the effectiveness of the firm’s Corporate Social Responsibility framework (Figure 3). Figure 3 – Financial Data of Motorola (Source: 2011 Annual Report, p.93) D) since last year, when the firm was acquired by Google, the use of mergers and acquisitions as a strategy to achieve strategic objectives, is rather difficult; e) As already noted, the firm has already established a detailed Corporate Social Responsibility framework for ensuring that ethics and law will be respected across the organization; f) the firm needs to keep its products continuously updated, in terms of technology, so that the market position of the organization is not threatened; g) the practices used by the organization for the update of its reporting and control systems are not clearly described in the organization’s website; it can be assumed that practices similar to that of Google, the firm that acquired Motorola last year, are used in Motorola; h) the global economy is under continuous pressures; the firm currently faces these pressures by emphasizing on innovation; this approach seems to be quite effective, if taking into consideration the fact that the firm’s net revenues show a trend for continuous increase from 2009 up to 2011 (Figure 4); i) in Motorola, no e-leadership scheme seems to exist; the use of such scheme in Motorola, as in other firms, could possibly increase the effectiveness of the organization’s leadership; k) globalization affects all organizations around the world; in order for Motorola to secure its market position it is necessary for existing organizational strategies to be updated, so that the competitiveness of the firm is kept at high levels. Figure 4 – Financial statement of Motorola (Source: 2011 Annual Report, p.79) 4.2 Plan for the development of future situations requiring leadership As explained above, there are certain situations in Motorola that require leadership and which are currently not effectively addressed. Reference is made specifically to the following situations: a) mergers and acquisitions; since the acquisition of the firm by Google (Reisinger 2012), the use of mergers and acquisitions as a tool for promoting the expansion of the organization has become problematic; instead, the selling of the firm’s units is already in progress (Pepitone 2012); the firm’s leaders should limit this practice and should rather emphasize on the development of existing units; b) update of reporting and control systems; leaders in Motorola should try to establish a network of reporting and control systems that would be used solely in Motorola; these systems could be appropriately adjusted for meeting the needs of the particular organization; c) e-leadership; an e-leadership scheme would be introduced for enhancing the firm’s leadership capabilities; and d) globalization; in order to decrease costs and to increase its competitiveness, the firm’s leaders have decided to cut staff (Fitzgerald 2012); this practice could harm organizational performance. Efforts should be made to introduce alternative strategies for enhancing performance without destroying the firm’s existing network of resources. 5. Plan for the development of leadership skills – Motorola 5.1 Plan for the development of leadership skills for a specific requirement In Motorola, the development of leadership skills for a particular requirement, as for example, the globalization, could be achieved through a series of specific activities. These activities would include: a) training, both in class and online; the use of a well-known model related to leadership training, such as the Behavior Modeling Leadership Skills Training, could increase the chances for success of the particular initiative (Lussier and Achua 2009, p.21); b) executive coaching could be also used, at the level that this method would allow the discussion face-to-face and the identification of the trainee’s actual weaknesses, in regard to the requirement under examination; c) the study of academic material related to the particular issue, i.e. globalization could also help leaders in Motorola to improve their performance in facing globalization, as the specific trend highly influences the performance of organizations worldwide. 5.2 Usefulness of methods used to plan the development of leadership skills The methods suggested above need to be explained, as of their usefulness in regard to the development of leadership skills. As of the first method chosen, the Behavior Modeling Leadership Skills Training, its value is based on its ability to cover the learning needs of people with different educational background and different capabilities (Lussier and Achua 2009, p.21). The above model is based on different activities, including reading, watching online material and participating in a ‘skill development exercise’ (Lussier and Achua 2009, p.21). On the other hand, executive coaching offers the advantage of direct communication between the learner and the educator so that any questions in regard to the learning material are immediately answered. Also, this method offers another advantage: the responses of the learner to daily organizational problems are discussed and evaluated, a fact that allows the learner to understand the practical implications of his initiatives. As for the reading of academic material, as a method for increasing leadership skills, the following issues should be highlighted: a) the material chosen should be exclusively academic, so that the credibility of its content to be secured, b) the material chosen should be recent, as possible, offering a view on current developments in regard to the issues under discussion, c) the material should be critically studied, meaning that the findings of each study should be compared with those of other studies, so that the assumptions made are checked as of their reliability. 6. Conclusion The evaluation of leadership style used in a particular organization needs to be based on particular criteria. Firms operating in highly competitive industry cannot easily change their existing strategies as such initiative would require the employment of significant resources. However, each time that severe failures are identified in an organization’s core elements it is necessary for appropriate measures to be taken without delay. Such case seems to exist in the case of Motorola. The firm had an impressive market performance up to its acquisition by Google, in May of 2012 (Reisinger 2012), as also verified through the firm’s financial results for the years 2009 up to 2011 (Figure 4). It seems that the organizational success is highly related to the leadership style used in the particular firm. Indeed, the review of the organization’s leadership practices and rules has led to the assumption that the performance of the organization in the specific field, i.e. in regard to leadership, is quite satisfactory. Still, the improvement of existing leadership skills is required, so that the achievement of the organization’s strategies in the future is secured. 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