Leadership Qualities and Traits Shown by Ratan Tata - Example

Executive Summary Leadership is a concept which had gained widespread importance. Organisations are looking to ensure that leaders are good so that they are able to guide the employees and lead the organisation towards the path of glory. The report tries to find the different leadership style and traits shown by Ratan Tata of Tata Motors and Mukesh Ambani of Reliance, the advantages & disadvantages this traits provide to the respective industries and the ways in which their working style differs and which is a better one considering the current economic scenario The report presents the different leadership qualities and traits shown by Ratan Tata. The traits identified are charismatic, transformational, strategist, influential & risk taking. Over all it shows that the Fielder Model suits more for Tata. Also a detail analysis regarding the advantages and disadvantages it accrues has been provided. The report also presents the different leadership qualities and traits shown by Mukesh Ambani. The traits identified are charismatic, reward power, coercion power, risk taking & House Path Goal Theory. Over all it shows that the Behavioural Model suits more for Tata. Based on it the advantages and disadvantages have been provided for. Based on the findings a critical analysis has been done to identify which models suits which organisation and which is better placed considering the recent economic scenario. This helps to conclude the importance of leadership and also states that no model is perfect and organisation needs leader with a mix of all to ensure maximum growth. Table of Content Introduction 4 Purpose of the report 4 Leadership 4 Ratan Tata of Tata Group 5 Charismatic Leader 5 Transformational Leader 6 Strategist 6 Risk Taking 6 Influential 6 Fielder Model 7 Advantages 7 Disadvantages 7 Mukesh Ambani of Reliance Industries 8 Reward Power 8 Coercive Power 8 Risk taking ability 9 Charismatic Leader 9 House Path Goal Theory 9 Behavioural Model 10 Advantages 10 Disadvantages 11 Critical analysis 11 Conclusion 13 References 14 Introduction Leadership is important in all organisations irrespective of their size and volume. The growing importance of leadership can be adjudged by the fact that rising competition is compelling more complicated decision thereby making it important that leaders continue to guide business and help the employees in difficult situations. Leadership presents different personality styles like brilliant, lonely, and imaginative and risk takers. The role of leaders is slowly increasing and engulfing areas which are of prime importance and helps business achieve their set objectives. Different leaders have different traits and their working differs from other. They work on different areas and those competencies acts as a measure to achieve the desired result. Purpose of the report Identify the different leadership style and traits followed by Ratan Tata of Tata Motors and Mukesh Ambani of Reliance. Identify the advantages that this traits provide to the respective industries Identify the disadvantages that the particular leadership style has look for measures to improve it. Analyze the ways in which Ratan Tata and Mukesh Ambani differs in their working style and which is a better one considering the current economic scenario Leadership Leadership has a wide connotation and it arises due to different personality styles, attitudes, the basic concepts, relationship and self identity towards goal. A research conducted by Angelo (2007) shows that leadership is a vast concept compared to management especially and leaders have broader roles to play. This shows that a certain type of quality is preferred at one place and other at another. It has given stress on various factors to be successful. Leaders ensure to use the surroundings to their effect so that maximum can be extracted from the employees. Leaders assume a much bigger role and try to integrate the different cultures, devise mechanism to motivate the employees, look towards different compensation plans and look at ways to ensure effective leadership. Thus, leadership is a broader concept and this can be seen from the different leadership style shown by Ratan Tata for Tata Motors and Mukesh Ambani for Reliance. This will help to find out how their personal style added to the advantage of their organisation and the manner in which differences in their style helped the corporation to grow. Ratan Tata of Tata Group Ratan Tata, chairman of Tata Group holds prime importance for this conglomerate as he shaped the way things will be done. He transformed the corporation into a huge business model by integrating different functions. The corporation has an advantage as it is a collection of different business which helped to take advantage of the different opportunities the market had. “Innovation and globalization were the prime reason and area of work chosen by Ratan Tata”. (Tata, 2008) The leadership traits present in Tata helped him to change the direction in which the company worked. Charismatic Leader Ratan Tata on the charismatic front we can see that “he was enthusiastic, self confident and able to clearly communicate with the employees”. (Lakshman & Shukla, 2005) this can be seen from the very fact that he had a vision to globalize and integrate the different cultures. Ratan Tata ensured that culture was integrated in such a manner that it helped the group to achieve the best result. “People belong to different caste, country, creed, colour, and region which affect the manner in which they carry out their duties”. (Innah, 2009) The Ratan Tata ensured that different cultures were integrated together which helped him go global and achieve results from the employees. This showed his self confidence and the ability to communicate clearly. Transformational Leader On the transformational front we can see that Ratan Tata was “able to make his subordinates realize the importance of working, design a compensation package which helped to motivate them and ensured that development was on the personal front also”. (Lakshman & Shukla, 2005) To ensure that employees got the best so that they will be able to deliver he ensured that employees are motivated which will get the best out of them. Ratan Tata was able to identify those and moulded it in a manner which gained best results. Strategist He was a strategist and identified the different areas that needs to we worked upon so that the employee are motivated and work towards the well being of the organisation. This can be seen from the fact that he inculcated a pattern of group thinking in the organisation. Group Thinking is a phenomenon which involves people from various backgrounds, culture, religion, and caste to come together and discuss upon something thereby arriving at a consensus. This helped to ensure that the decisions arrived were better as new suggestion used to creep up. Risk taking Ability The other important trait which helped him was the risk taking ability. This can be verified from the fact that he wanted to globalize the business and had the ability to take risk in the international market. This trait of his paid rich dividend and also guided him towards a path which could give maximum leverage. Influential Ratan Tata was very influential and this helped him achieve his task very easily. This can be said on the backdrop that was able to communicate clearly which helped him achieve the results. Also the fact that employees understood what he wanted to communicate made him influential and employees were willing to work in the manner provided by him. Fielder Model The overall qualities and styles demonstrate that Ratan Tata followed the Fielder model. This is on the backdrop of using all powers i.e. “legitimate power, informative power, personal power, referent power and expert power”. (Lakshman & Shukla, 2005) The ability of Ratan Tata to influence the workers and ensure that they work in a directed way helped him even punish and use his dominant powers to achieve the goals. Advantages The model and different leadership styles and traits presented by Ratan Tata help to provide the following advantage Being charismatic ensured that the Tata was able to influence the employees and integrate the different culture which presented the opportunity to go global. Transformational qualities ensured that employees were motivated. It ensured that an employee gets incentive to perform better. This made the hard working employees to put in more effort and the non-monetary incentive further motivated the employees. His quality of being a strategist helped in getting good ideas. Since it involves brainstorming it thereby helps to “come up with various new ideas and the best one can be chosen based on the requirements of the company”. (Tim, 2005) His leadership style improved flexibility and coordination among the employees. It makes employees realize the “importance of working in a team and this ensures that employees are motivated and feel a part of the organisation”. (Tim, 2005) Disadvantages The model and different leadership styles and traits presented by Ratan Tata also had certain disadvantage as follows The coercive power used by Ratan Tata to ensure that employees work accordingly made the organisation loose some vital employees. The leadership style increased pressure on the employees to perform to the match standards. The model also increased dependence on the management for decision making thereby delaying the entire process. Mukesh Ambani of Reliance Mukesh ambani, the chairman and director of Reliance Industries has shown several leadership traits which has helped to ensure that Reliance grows. He ensured that reliance transforms “into a multinational company by backward integration of different industries”. (Raju, 2008) His vision to grow and convert his company into a market leader was shaped due to various leadership traits demonstrated by Ambani. Reward Power One of the leadership traits shown by Mukesh Ambani is reward power. He ensured that proper reward was given to person who performed their work properly. For this he ensured a mechanism which differentiates between the hard workers and the others. For this Ambani ensured that “employees compare their job inputs like efforts, experience, education to their outputs like salary level, recognition, incentives in relation to their peers to reduce inequality” (Robbins, Judge, Millet, Waters-Marsh T, 2008) This give a push to the workforce and also ensure that the equity prevails. This made the employees feel part of the organisation and performance improved. Coercive Power Another leadership trait shown by Ambani is coercive power. He ensured that employees who didn’t perform the task as per the requirements were dealt severely. Ambani ensured that “a combination of reward and punishment is used to compensate employees to ensure that their behaviour are directed in the correct direction and yield positive results both for the organisation and employee”. (Barnett, 2010) Thus, we can say that Ambani made use of an employee’s intensity in the right direction. This should be a continuous process as an employee who is motivated remains for a long time with the organisation. He also ensured punishment for employees who faltered on their job thereby using coercive traits to bring the best out of them. Risk taking Ability The other important trait which helped him was the risk taking ability. For this Ambani ensured that “an employee is given a specific goal he has to achieve it and the goal is made in such a way that it brings the best out of him”. (Jacob, 2008) This ensured that employees in Reliance Industries who were capable of delivering performed up to that. This gave Reliance the leverage to undertake new projects which were riskier like “the oil basin reserve project.” (Dalal & Basu, 2007) This trait of his paid rich dividend and also guided him towards a path which could give maximum leverage. Charismatic Leadership Ambani also had traits of charismatic leadership. On the charismatic front we can see that “he was enthusiastic, self confident and able to clearly communicate with the employees”. (Lakshman & Shukla, 2005) This can be seen from the fact that they gave powers and understood the employees. They made the employee being heard and also ensured that a mechanism was in place which helped them to bring the best out of them. He understood the relationship between motivation, job satisfaction and culture and tried to mould the three to the advantage of the organisation. He made use of it and his enthusiasm made him able to communicate clearly and get the work done. House’s Path Goal Theory Ambani also made use of the house path goal theory and used this ensured that employees talent was recognized and they were compensated accordingly. For this he ensured that there was clarity in the job as to what needs to be done and a feedback process was present to bring the necessary changes. For this he ensured that “employees are motivated to work harder and they know that their hard efforts would lead to good appraisal and this appraisal will result in incentives like bonuses, promotions and so on and this would lead towards the satisfaction of employees as his personal goals will be achieved”. (Robbins, Judge, Millet, Waters-Marsh T, Organisational Behaviour, 2008) Thus, his traits show that he follows the house path goal theory which helped to get the best out of each employee. Behavioural Model The overall qualities and styles demonstrate that Mukesh Ambani followed the Behavioural model. This is because he had shown consideration and also initiates structure. On the consideration front he had given the leverage to the employees to work in a better way by empowering them and on initiate structure he ensured that the goals set were achieved by making the necessary changes. Advantages The model and different leadership styles and traits presented by Mukesh Ambani help to provide the following advantage Being charismatic ensured that the Ambani was able to influence the employees and integrate the different culture which presented the opportunity to go global. House path theory ensured that Ambani was able to identify the talent and using them the organisation was able to achieve their goals. It ensured that an employee gets incentive to perform better. This made the hard working employees to put in more effort and having a mechanism to help them proved fruitful. His quality of taking risk helped in the growth of the company. Since it involves working on new ideas it thereby helped to “new ventures like the Godavari basin reserve for extraction of oil”. (Tim, 2005) His behavioural leadership model ensured that he was acting both as considerate and at the same time initiating a structure to get the work accomplished. This improved flexibility and coordination among the employees. Disadvantages The model and different leadership styles and traits presented by Mukesh Ambanialso had certain disadvantage as follows The coercive and reward power used together by Ambani complicated the work to be done for the employees as they felt they were not given what they deserved. The behavioural model in certain situations had the behaviour of both managers and the employees to be low or high thereby influencing the growth pattern Critical analysis A look at the critical analysis will help to understand the difference in the leadership traits shown by different leaders and will help to find the areas where their core competencies lies and will also help to find out areas which is better. Point 1: The traits of Ratan Tata shows that he uses “legitimate power, informative power, personal power, referent power and expert power” (Lakshman & Shukla, 2005) where as Mukesh Ambani uses coercive and reward power as their leadership quality. It shows wide scale a difference as both the leaders uses their ability to ensure that the powers used by them give maximum return. The usage of different powers give different advantage but in this case Ratan Tata using the different powers is better in comparison to Ambani as he uses a variety of skill to ensure that employees understand the matter. Also the fact the using coercive and reward power together confuses the employees as they are unclear on the mechanism that will help them reap benefit. Thus, the quality of using “legitimate power, informative power, personal power, referent power and expert power” (Lakshman & Shukla, 2005) is better in comparison to coercive and reward power. Point 2: Mukesh Ambani using the House Path Goal Theory is better placed compared to Ratan Tata where no such mechanism is devised but instead employees are paid accordingly to their efforts thereby not differentiating between the prospective employees. The fact that Ambani uses the House path Goal Theory ensures that there was clarity in the job as to what needs to be done and a feedback process was present to bring the necessary changes. This is something missing in the compensation process of Tata. Not having a feedback process puts in doubt the validity of the compensation package and any changes that need to be accounted for are not taken care of. Also having a specific theory ensures that the advantage which accrues to that theory gets inducted in the compensation package. This is thereby ensuring that the employees are able to get a better response and know what is expected of them. Point 3: When we look at the overall traits and the models used by Ratan Tata and Mukesh Ambani there is wide scale differences in the mechanism used by them. Mukesh Ambani uses the behavioural model where as Tata uses the Fielder Model. There are wide scale differences in both of this model as the core on which this model is based is different. Looking at the present economic scenario it is seen that Behavioural Model is better suited compared to the Fielder Model. This is based on the fact that with changes seen all around it is important that the leader looks into different changes that need to be accounted for. This is because on the consideration front he had given the leverage to the employees to work in a better way by empowering them and on initiate structure he ensured that the goals set were achieved by making the necessary changes which is missing in the Fielder Model. Still, it is difficult to judge a perfect model as both the organisations are performing extremely well based on their structure so differentiating and arriving at a perfect model is difficult. Also the fact that the nature of business done by both is different so it is difficult to gauge the perfect model but based on the backdrop of organisational growth and performance over the years it is seen that Ambani has done a better job as the profits and return are higher. Conclusion Leadership is thus a very important constituent for any organisation. The growth of an organisation largely depends on leadership qualities. It is difficult to gauge which leadership model and traits are the best as it varies according to different situations and identifying the best out of them is difficult. Leaders need to ensure that they have a mix of different models and traits to be able to deliver better results. This helps the organisation to ensure that the efforts are properly directed. Along with this it is important that a leader is able to bring the necessary changes on all fronts to be able to meet the rapidly changing demands. 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