Leadership Power and Politics - Case Study Example

Case Study: Leadership Power and Politics Rationalization In the contemporary world, efficient allocation of resources has become a crucial determining factor for all profit making business organizations. Most of the firms try to cut down costs in business for earning higher revenue and profit (Rogers, 2001). The essay will try to theoretically and empirically prove significance of rationalization in present business scenario. However, it will primarily focus on leadership power and political aspect of rationalization. Rationalization is the process by virtue of which an organization tries to enhance efficiency in business. There are several features of rationalization. Some of these are related to division of labour, discipline, equity, initiative, stability, centralization, remuneration, unity of command and direction and scalar chain. Under the regime of this process, a company can decide to increase or reduce its size of business, manipulate its corporate polices or introduce a new strategy relating to the products or process. Sound structural changes are made in an organization with the help of rationalization process. According to the theory of economics; rational outcome is a situation, where a firm maximizes its returns subject to given constraints in internal and external business environment. As per views of Weber, rationalization is a process through which a modern society shows greater concern towards efficiency, predictability, calculability and dehumanization in the external environment (Brown, 2008). He believed that an organization would be rational only if it follows bureaucratic form of governance. Within such a bureaucratic organization, hierarchical structure would be clearly defined with a rational legal authority. According to views of Frederick Winslow Taylor, rationalization is a type of scientific management practice, under which the company applies norms relating to division of labour and work measurement in business (Brown, 2008). Taylor claimed that in order to become rational, an organization must try to become efficient from “bottom to top”. Taylor advocated that an organization can become rational by rigorously training its workforce and providing proper incentives to them (Brown, 2008). This is because by such means, companies can augment their overall productivity. Henry Ford believed that rationalization is the process whereby logical and consistent rules are applied in business in form of substituting the existing traditional illogical norms. This concept of rationalization primarily directs focus at the feature of efficiency in business operations. Unlike the views of Taylor, Fayol claimed that if an organization seeks rationality, then it must be efficient from “top to bottom” perspectives (Brown, 2008). According to him, an organization can become rational by following the POSDCORB approach in business. Under this regime, the company should be highly competent in all planning, organizing, staffing, directing, coordinating, reporting and budgeting activities (Brown, 2008). An organization can accrue various advantages on becoming rational. Rationalization makes a firm more fair and efficient; instead of operating on ad hoc basis, firms are able to implement rational norms in business. The scope of knowledge acquired by employees in a rational organization always improves with essence of increased knowledge building and training sessions. Moreover, by providing higher incentives to employees, the organization can enhance productivity in the market. A rational organization is able to bridge the gap between workers ability and capacity to work (Brown, 2008). Moreover, the firm can better brand value in the market and achieve higher loyalty of stakeholders through this process. Only a rational organization can effectively utilize scarce resources and maximize its output, revenue and profit subjected to minimization of cost. Even so, there are also few disadvantages of rationalism (Nieuwenhuizen, 2007). A rational organization is always bureaucratized and rule bounded. Personal feelings and emotions are lesser valued than rules set by the business concerns. Hence, a rational organization can often be inhuman and impersonal in nature. Though there are several disadvantages of rationalism, yet in order to achieve higher cost efficiencies and win over market competition, contemporary firms are constantly trying to become rational. Giant multinational organizations like, McDonalds, strictly abide by the norms of rationalization in business. McDonalds is believed to follow norms of rationalization in business as per views of Henry Ford (Douglas, 2003). By implementing this process, the company has substituted irrational rules in business with logical norms. Under the regime of this process, the company breaks down big tasks into smaller segments. This helps to accomplish tasks of each small segment in the most effective manner (Casson and Wadeson, 2012). The goals of the organization are simple, specific, time bound, measurable, achievable and realistic. Perhaps, this is the reason why the company can mostly focus on upcoming challenges or opportunities in business. McDonalds trades in fast food, which are generally harmful to human health. Even then, it has successfully expanded scale and scope of operations by simply following four features of rationalism; namely efficiency, calculability, predictability and control. The rationalization process of the company is often explained as McDonaldization (Douglas, 2003). However, McDonalds is yet to work upon few areas that require improvement. These are related to irrationality, deskilling and consumer working. For instance; there are often situations where the company’s employees get burned-out. Under such circumstances, the company overvalues productivity of workers and in turn, de-motivates them and subsequently becomes irrational. The organization of Travelodge also abides by the norms of rationalism in business. Rationalization followed by such organizations has created prominent impact on employees. Due to higher efficiency, overall production level and employment opportunities of these companies have increased. The workers have become more productive with the help of skill development sessions along with several additional incentives from their concerns. Even so, they often experience extensive job pressures and other problems due to certain impersonal and inhuman rational rules that are strictly followed by these organizations (Douglas, 2003). Leadership Power and Politics The modernistic views prevailing in contemporary business world advocate that all profit making business organizations must abide by norms of rationalism. Nonetheless, leadership, power and political views oppose that of rationalism. The theory of leadership, politics and power suggests that goals of an organization can be achieved only through bargaining and manoeuvring with individuals. The Resource Dependence Theory is based on this view. Scholars such as, French and Raven, had marked five different bases whereby power can be generated within an organization. These dimensions are preferentiality, legitimacy, expertise, reward and coerciveness. Power is a measure that tries to estimate the ability of a person to control matters of his external environment and behaviour other people. The power of a legitimate social structure is often termed as authority. In general, use of power within organizations might not be evil or coercive in nature. Yet, if power is misused, then it becomes an unjust and unethical tool. Leaders do possess certain powers depending upon situations. It should be noted that leaders should not take undue advantage of their authority and power while dealing with subordinates within an organization. Power in other terms is a right through which leadership can be exercised within an organization. A leader within an organization has power to influence the decision making process of all other individuals. Despite that, the authoritative power of a leader should be created with assistance of a group of subordinates. So, power of a leader would cease to exist if the group of subordinates is unsatisfied with decisions undertaken by higher authorities. Power exercised by a leader depends on factors like, context, expertise and personality. Power is considered to be the third pillar of leadership, where the first and second pillars are knowledge and trust of the leader. Able and efficient leaders, thus, possess adequate knowledge through which they can appropriately use power by offering direction, delegation or consultation within the group. Power can be vested in a leader by way of his position, personality, ownership, opportunity seeking capability and critical problem managing capability. Political behaviour is widespread within organizations because associated individuals manipulate ways to achieve power and enjoy higher privileges (Hawkins, 2006). Pyramid shaped organization configuration, subjective performance standards, external uncertainty and turbulence, insecurity and irrationalities are various causes that encourage politics within an organization. A leader can effectively capitalize upon organizational politics if he is aware of political strategies and tactics. However, leaders can acquire this knowledge by formulating ways to gain power, build good relationships with co-workers and superiors as well as avoid detrimental political practices. Even so, it should be observed that excessive politics entertained within an organization can generate a dysfunctional outcome, under the regime of which overall productivity of the concern would fall. So, dysfunctional politics lowers credibility of leaders. This would further render the organization irrational and immoral in the long run. By encouraging open communication and avoiding favouritism, leaders can lower the existence of dysfunctional politics (Wong, Ho and Autio, 2005). For instance; Tesco faces several political problems relating to labour union disputes. In 2009, the report published by International Trade Union (UNI) claimed that behaviour of senior managers of the company was not ethical and fair with its labourers in Thailand, U.S. and South Korea (Shankleman, 2009). The report claimed that leaders of the organization had forced workers to toil for 24 hour shifts and also fired some of them on account of not being interested in joining the union. The leaders of Tesco had used the tool of open communication so as to prove their innocence (Shankleman, 2009). They openly declared that they were not anti-union and did not impose any obligations on workers to join unions. The automobile company, Maruti Suzuki, had faced severe violence in its Manesar plant, India. The supervisors of the company were attacked by workers of Malesar plant on July 2012; as a result, almost 100 managers were injured (Marutisuzuki, 2014). This violence had generated severe loss and had occurred due to working inefficiencies of senior managerial leaders of the organization. It was stated that workers were not paid appropriate salaries and hence, they revolted. So, from the above empirical analysis, it can be suggested that organizational leaders should exercise power and politics in a balanced manner so as to sustain their position in the long run (Wong, Ho and Autio, 2005). There is a contrasting relationship between theory of rationalism and theory of leadership, power and politics. The school of leadership states that an organization must be autocratic in nature. Within its framework, supreme power would be in the hands of leaders. Nevertheless, the school of rationalism claims that an organization should be bureaucratic in nature. Under this framework, the organization would experience a participatory democratic system. The decision making agents of such organizations are the shareholders and creditors. The leaders are entrepreneurs who focus upon upcoming opportunities and risks of organizations. Thus, the strategy of rationalization is opposed by the theory of leadership, power and politics. This is because an organization is considered to be rational only if it is non-political and enjoys high diversity with efficiency guided by democratic norms. The leader of a rational organization is a transformational personality, who governs the organization on the basis of idealized influence, intellectual stimulation, individual consideration and inspirational motivation (Wong, Ho and Autio, 2005). This concept of leadership is largely different from that of traditional power and political leadership. Junction Hotel The case study deals with a luxury hotel named Junction Hotel, which was founded back in 1950. There were 100 rooms in the hotel and was situated in a busy strategic location. The hotel had become popular since its inception by providing superior restaurant services to common public. In addition to that, the hotel had an excellent swimming pool, fitness centre and sauna bath facility. Yet, over the years, it was noted that business of the hotel had declined and its luxury sophisticated image in the market had faded away. Its corporate icon and revenue had also fallen with time. The degree of iteration in the hotel was found to be low, even when authorities offered special discounts (up to 67%) to customers. When the underlying cause of such failure was analyzed, it was found that the hotel had to bring about positive changes within its work culture, practices, policies and procedures. Nonetheless, the core business issue faced by the hotel was related to its poor customer service. It was noted that the hotel’s policies and procedures were not rational and stable. In addition, Meg Mortimer, one of the general managers of the hotel claimed that it had no organizational chart. The staff used to work in a personal idiosyncratic pattern and did not reflect consistency in their work. When duties of Mortimer were given to the hotel’s new general manager, Simon Chance, he had commented that declining economic performance of the hotel was because of poor organization, stability and rationality. Since the workers were not guided by accurate rational rules, their efforts proved less productive and inadequate. However, Chance had noted that nearly all workers were committed and polite at their work. So, this proves that the organization must have failed to provide proper training and incentives to its employees. In order to revive poor disorganized state of the hotel, Simon used the norms of leadership, power and politics in business. He exercised his power and appointed his trusted friend, Phil Weaver, to set things in order. Weaver claimed that productivity of workers were quite low in the hotel. For instance; according to his view, entire working team of the hotel could prepare the evening meal session within 80 minutes. Whereas in practice, workers involved two hours to set wine glasses, cutleries and napkins in place and prepare the evening meal. After realizing so, Simon had declared to force and threaten workers in putting greater efforts for their tasks. This is because their work time in reality was more than the analysis made in paper. He ordered his employees to become productive as the alternative was to quit their positions. This action undertaken by Simon Chance was highly irrational. He was acting as an autocratic rural. This is highly disadvantageous to the concern as it would simply increase attrition rate of the organization and ruin its business as well as brand value in the market. In respect to this, Nina Biagini has stated that workers in the hotel were not inefficient. She believes that assumed productivity of the labourers analyzed through paperwork often does not conform to the realistic outcomes. This is because workers are human beings and do not prefer to be treated as machines. According to the views of Nina Biagini, all employees of Junction Hotel were productive and competent. The primary cause of failure of the hotel was its irrational organizational structure (Mankiw and Hakes, 2011). If Junction Hotel adopts the policy of rationalization in business, then they would be able to train employees and in turn enhance their productivity. Furthermore, by fostering a participatory working environment, the hotel can easily carve out new growth opportunities in business. Even so, there would remain certain disadvantages within the strategy of rationalization. Rules and regulations of the hotel might be impersonal and immoral in certain cases so as to be more rational (Rogers, 2001). Reference List Brown, E. H., 2008. The corporate eye: photography and the rationalization of American commercial culture, 1884–1929. Maryland: JHU Press. Casson, M. and Wadeson, N., 2012. The economic theory of international business: a supply chain perspective. Multinational Business Review, 20(2), pp. 114-134. Douglas, M., 2003. A new way to "cook the books". [online] Available at: [Accessed 11 April 2014]. Hawkins, D. E., 2006. Corporate social responsibility: Balancing tomorrows sustainability and todays profitability. Basingstoke: Palgrave Macmillan. Mankiw, G. N. and Hakes, D. R., 2011. Principles of Macroeconomics. Connecticut: Cengage Learning. Marutisuzuki, 2014. Maruti Suzuki Way of Life. [online] Available at: [Accessed 11 April 2014]. Nieuwenhuizen, C., 2007. Business management for entrepreneurs. Landsdown: Juta and Company Ltd. Rogers, S. C., 2001. Marketing strategies, tactics, and techniques: A handbook for practitioners. Connecticut: Greenwood Publishing Group. Shankleman, M., 2009. Tesco labor relations under fire. BBC News, 30 June. Wong, P. K., Ho, Y. P. and Autio, E., 2005. Entrepreneurship, innovation and economic growth: from GM data. Small Business Economics, 24, pp. 335-350. Read More