Leadership Approaches to Purpose and Sustainability in Organisations - Tata Corporation - Case Study Example

Leadership Approaches to Purpose and Sustainability in Organisations Introduction The goal of every organisation is the attainment of the organisation’s goals with minimal cost/price (Kepler, 2011). The leaders of organisations are, however, confronted with a number of challenges such as the political, environmental, social, technological (PEST), or missing the necessary tools and resources required to attain the organisations objectives (Kepler, 2011). In a typical business setup, the varying characteristics such as labour regulations, culture, financial capabilities and personnel skills can largely limit or frame the scope of action of the leadership (Kepler, 2011). Even though tangible results are viewed as the immediate output that is expected from the leadership of an organisation, Kotter (2012) proposes that this is only a short-term outcome. Employee morale, social footprint of an organisation and job satisfaction are the more expected outcomes in a leadership package (Kepler, 2011). Leadership is of importance in an organisation as it is responsible for the definition and pursuit of the company’s purpose. A clear definition of an organisation’s goals is needed from the inception of the organisation (Mintzberg, 2013). This goal driven orientation in an organisation is what creates purpose and through repeated actions of the same, sustainability is eventually achieved by the organisation (Kepler, 2011). Sustainability is now the focus of a majority of companies in different sectors. However, few companies are born with a broad-based commitment to achieving sustainability. What most leaders miss is the fact that the creation of sustainability in an organization requires commitment from the leadership and the ability of the leadership to engage with the multiple stakeholders across the value chain, disciplined mechanisms of execution and widespread employee engagement. Purpose Every organisation is formed with a specific purpose and goal (Marques, 2007). It is the responsibility of an organisation’s leadership to ensure that the purpose of an organization is achieved at the end of the day. Various approaches by leadership are needed to ensure that the organisation’s purpose is attained (Marques, 2007). In the achievement of an organisation’s purpose other conditions and aspects come into play. For example, the relationship between an organisation’s purpose and profit (Marques, 2007). To fully attain the purpose of an organisation, the management of a company can induce growth in all sectors of the company. Purpose driven growth ensures that an organisation remains profitable. In addition, growth and sustainability of such growth ensures that an organisation’s business is always expanding and getting bigger and better (Marques, 2007). Corporate social responsibility is a way that an organisation can integrate role driven purpose in the company (Marques, 2007). Through corporate social responsibility, a company not only attains its purpose, but also builds a conceptual capacity, vision and the ability of leveraging the collective wisdom within the organisation. Long term corporate social responsibility enables a company develops adequate non-financial goals that complement the purpose of an organisation by generating and sustaining a higher purpose of the organisation (Marques, 2007). CSR prompts businesses to attain their internal goals and purpose so that they can pursue their social responsibility. Sustainability Sustainability is a concept that has recently captured the attention of a majority of leaders of different organisations around the world (Iqbal, 2011). The public domain is no longer satisfied by corporations that focus their energies solely on the short-term maximization of profits (Iqbal, 2011). Individuals prefer organisations that concentrate on the broader needs of human beings. Survey and research indicate that there is a growing number of companies that are taking notice of these recent shifts and are considering strategies that complement sustainability for their organisations to remain competitive (Iqbal, 2011). The process of building sustainability for a majority of leaders in various companies is characterised by a conscious and continuous effort aimed at building long-term value for the shareholders (Iqbal, 2011). For a company to achieve sustainability, the leadership of the company is required to engage in ongoing transformations that are a prerequisite to the evolving social expectations (Iqbal, 2011). The first stage towards attaining sustainability in a company involves the reframing of the companies identity (Iqbal, 2011). This is done through leadership commitment and engagement of external forces (Iqbal, 2011). The second stage of attaining sustainability involves the codifying of the new identity by adoption of mechanisms that engage employees in the execution. Both ongoing processes need to be ongoing to ensure efficiency (Iqbal, 2011). The two stages are supposed to reinforce each other once the second stage begins (Iqbal, 2011). Through employee engagement, more sophisticated external environment can be attained as the employees are able to engage with outside stakeholders. In the execution of such mechanisms aimed at attaining sustainability, the leadership of the organization is bound to the commitment as the organisational-level attributes are recurrent from one generation to the next (Iqbal, 2011). In addition, leadership commitment also provides a strong motivating force to the employees. External engagements are responsible for strengthening the company’s mechanisms of execution as the stakeholders are responsible for the constant pressurizing of the leadership to improve its quality (Iqbal, 2011). It is also important that companies seeking to attain sustainability should also develop an established organisation culture that fosters a commitment for change, innovation and creates trust (Iqbal, 2011). Absence of these elements complicates the process of attaining sustainability. Nonetheless, if an organisation moves gracefully through the two stages, then the necessary cultural characteristics needed are likely to coalesce (Iqbal, 2011). Companies that begin with strong cultural foundation that is based on trust and innovation are likely to strengthen these characters over time in the pursuit of sustainability. Theories of Leadership For an organisation to attain the objectives of purpose and sustainability, various leadership styles and frameworks according to various proposed theories need to be adopted in the organisations for instance, the Lewin’s leadership styles proposed by psychologist Kurt Lewin. In his model, Lewin argued that there are three major leadership styles namely autocratic leadership, democratic leadership and Laissez-faire (Mehrotra, 2005). In an autocratic leadership, the leader makes decisions without consulting any team members (Bonnici, 2011). Democratic leaders, on the other hand, are responsible for making the final decisions but, however; listen to the opinions of the team members before making their final decisions (Mehrotra, 2005). In the Laissez-faire model of leadership, the leaders are known to give their team members a lot of freedom (Bonnici, 2011). The leaders provide support and resources to the team members when needed (Mehrotra, 2005). This approach can be very instrumental to an organisation that seeks to ensure sustainability in its operations. Personal Experience From personal experience, I have witnessed that organisations containing a clearly defined purpose and path towards attaining sustainability are more successful than other traditional organisations. This is because the former usually works with clear objectives and the employees and departments are usually in cohesion and in tandem with each other. In addition, members of the public domain are usually impressed by such efforts as corporate social responsibility and these individuals will show great support for such organisations. Case Studies Case of Tata Corporation Tata, an Indian company, has enjoyed traditional community support for a long time. The company has grown in the past decades alongside with the country’s growth as a result of not only focusing on the profitability of the company but also on other responsibilities of the company (Branzer, 2010). The company has, for example, always had a strategic vision that embeds social and environmental responsibility. The company has portrayed its leadership purpose since inception in the year 1868 (Branzer, 2010). The generation of leaders that succeeded the company’s founding father understood and preserved the visions and motto of the company’s founding father. For example, ‘dual’ leadership exists in the company where the leaders are able to reconcile both economic and social/community goals of the firm, a process nurtured for four generations (Branzer, 2010). The company also keeps up with the current techniques and trends to ensure that it manages its purpose and responsibility. For instance, the company has adopted the latest metrics that were defined after the 2010 Davos World Economic Forum (Branzer, 2010). The company’s management embeds systematic sustainability pervasively into the organisational structure and processes. The company has over the years engaged in a strong corporate social responsibility, constantly giving back its returns to the society (Branzer, 2010). Analysts have, however, questioned the ability of the company to keep up with this CSR based on the recent global economic meltdown (Branzer, 2010). The company’s top leadership has, however, forged a brave smile in response to this by assuring the public that the company has its purpose and the deployment of this purpose shall meet the company’s sustainability needs (Branzer, 2010). Case of Dow Chemical Dow Chemicals is considered as transformational agent (Kepler 2011). In the company, the purpose is driven by continuous improvements on the company’s goals through innovations and creativity (Eccles et al, 2012). The company ensures its sustainability through integration of various organisational processes and culture that handle the constant changing dynamics. The leadership of the company settles for the building of a long-term collaboration, quality management and business transparency (Eccles et al, 2012). Leadership for collaboration in turn evolves towards a leadership of place’ capability as defined by (Gibney and Murie 2008). Dow engages in partnerships with universities and governments that are aimed at improving her ecological management and enabling the firm to be a player, and not just as an opponent, in the new ecology directives setup (Branzer, 2010). The dialogue held by the firm with the stakeholders is a strong path to sustainability because sustainability is a broad problem that the management or leadership of a company cannot handles on its own. The leadership of the company is of the realization that sustainability is worth trying (Branzer, 2010). This is because the company charges its sustainability efforts and commitments against economic return on investment. The company’s leadership is confident that Dow will be among the leading, prominent and most influential companies in the 21st century and thus address sustainable innovations and solutions to global problems (Branzer, 2010). Case of CSR in Banking Laugel and Laszlo (2010) state that articulating business practices to CSR in banking after the 2008 turmoil portrays care for all stakeholders, especially towards the citizens using banking services in financing their daily expenditure. These individuals were affected by the uncontrolled market instabilities and the economic crisis greatly (Laugel and Laszlo, 2010). The use of instrumental management such as a transactional leadership is no longer a viable option in the current workplace which is oriented by human values, ethics, democracy and personal development. The financial crisis of 2008 was responsible for raising unmeasured risks and lack of transparency in the banking sector (Laugel and Laszlo, 2010). This opened the eyes of many in matters of ethics and ethical leadership so that individuals and organisations may not find themselves in the same position again in the future. Because of the crisis, people noted that purpose and sustainability induced by the leadership of an organisation proved to be the solution to a number of challenges facing the banking sector (Laugel and Laszlo, 2010). Leaders who act as role models of staff should thus be selected without bias so that the business, community and customers are protected as a whole. Banks have noted the need to implement a meaningful strategy through engagement with external stakeholders to manage and restore credibility in the sector. After the economic crisis, a number of banks embedded strategies that promote sustainability in their business. Such banks include the Co-operative Bank (UK) (Laugel and Laszlo, 2010). BNP Paribas The PR communication at BNP Paribas cares for sustainability reporting. In the organisation, lateral actions involve philanthropy, volunteering for community and various carbon emission reductions programs (BNP Paribas, 2014). These actions are aimed at attaining the company’s purpose and eventually ensuring sustainability in the company in the long-run. At the company, microcredit initiatives entail core services, but this accounts for a small percentage of the business volume (BNP Paribas, 2014). The company edits policies with the aim of precluding unethical businesses such as palm oil trade and nuclear energy production. However, in practice, this is not fully adhered to, as the financing of French nuclear plants still continues (BNP Paribas, 2014). This presents a confusing picture. The most un-trustful and striking aspect is about the leadership of the company. The top management of the company has remained homogenous over the years (BNP Paribas, 2014). The leadership approach is highly autocratic with recruits coming from top French schools and possesses appropriate political backgrounds. The workforce of the organisation does not match the business needs in the short or mid-term, and the internal mobility and re-orientation of personnel is hindered by internal politics within the organisation. Goldman Sachs The company is one of the most advanced financial institutions in regard to sustainability. The organisation unveiled its global approach that has a direct impact on the core business of the organisation (Laugel & Laszlo, 2010). The company presented a framework that addresses climate change and environmental degradation after engaging in consultations with environmental groups for over 18 months (Laugel & Laszlo, 2010). In its sustainability plan, the company is dedicated to disclosing the emission of greenhouse gasses in its operations. The company also plans to make an investment of $1 billion in the investments for renewable energy (Laugel & Laszlo, 2010). The company also engaged in the setting up of a think-tank that will aid in the identification of other lucrative green markets. The organisation also seeks to work on the public policy measures that relate to climate change. Finally, the company pledged to refuse the financing of any extractive projects in the World Heritage sites or projects that violate the environmental laws of the hosting country (Laugel & Laszlo, 2010). Conclusion It is important that the leadership of an organisation remains focussed in the purpose of the organisation and works to attain sustainability. For this to happen, the organisation’s leadership and management needs to subscribe to a favourable leadership model such as the Laissez-faire style. With such a good leadership style in place, the leadership of an organisation can ensure that the various goals and objectives of purpose and sustainability are achieved in an organisation. The leadership should also engage in the aforementioned steps and stages that will lead to the attainment of the objectives. The issue of sustainability is organisations is one that was previously ignored by many organisations but has been recently gaining acceptance in the eyes of many organisation’s leadership. Based on the various challenges facing an organisation, it is important that the leadership of organisations engage in other acts of management, that are not profit driven, such as creating and ensuring sustainability (Yoshino & Smith, 2014). Members of the public usually appreciate the CSR efforts made by an organisation. Through engaging in sustainability, organisations not only ensure the improvement of their own welfare but also that of the environment and society at large. Goldman Sachs is one such organisation leading as an example that should be emulated by all organisations. References BNP Paribas (2014). Company Website : www.bnpparibas.com. Bonnici, C. A. (2011). Creating a successful leadership style: principles of personal strategic planning. Lanham, Rowman & Littlefield Education. 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(2007). The awakened leader: one simple leadership style that works every time, everywhere. Fawnskin, CA, Personhood Press. Mehrotra, A. (2005). Leadership styles of principals: authoritarian and task oriented. New Delhi, India, Mittal Publications. Mintzberg H. (2013). Simply Managing. Berrett-Koehler Publishers. Yoshino K., & Smith C.(2014). Fear of Being Different Stifles Talent. Harvard Business Review. Read More