Leadership Style Is an Important Ingredient for Organisational Success - Coursework Example

Leadership Style Is an Important Ingredient for Organisational Success By ……………………………………………………………… Course Module University Name Leadership Style Is an Important Ingredient for Organisational Success As human capital has become the most important of all assets within the knowledge economy today, managing and leading employees effectively is a key ingredient in achieving organisational success. With the growth of service sector and importance of knowledge workers, transactional management styles such as autocratic management or situational management approaches are no longer effective. In place of these classic theories, transformational leadership styles such as servant leadership, charismatic leadership, and super leadership styles are becoming popular. In today’s organisational context, it is essential to apply the appropriate style to achieve organisational success. In one of the major leadership studies, House et.al. (2006) defined leadership as "the ability of an individual to influence, motivate, and enable others to contribute toward the effectiveness and success of the organizations of which they are members" (House et. al. 2006. p. 15). Most of the theories on leadership fall in to the transactional category where the leader offers or withholds a certain reward, an incentive or benefit to the follower, in order to elicit desired behavior from the followers (Weiss, 2001). Fiedler’s contingency model for example, holds that the effective leadership is dependent on the interaction between leadership style and the leader control and influence in the context. From context to context, the degree of control and influence differs and this in turn must alter the leadership style. Path-Goal theory proposed by house points out that leader can help followers by showing them how their efforts relate to the organisational performance as well as to obtaining rewards (Weiss, 2000). This model too highlights the importance of rewards and values attached to manipulate the follower’s behavior. These transactional leadership methods may be successful in certain contexts, depending upon the follower characteristics such as cultural influence, beliefs, perception and value placed on the reward systems. The greatest advantage of transactional leadership styles is that it allows for contextual factors as follower’s caliber, educational level and motivational stimuli to be taken in to account. However, many scholars identified the need for alternative approaches that can meet the higher order motivational needs such as “achievement” and “self actualization” needs of work force, as proposed by Maslow. Alternative approaches to leadership from above classical models have emerged in the form of Transformational theories, first proposed by Burns in 1978. Transformational approach is more democratic and involves the followers in decisions and grant them autonomy and responsibilities along with capabilities. In such scenarios, these Laissez-faire leaders may choose to render their leadership role and empower their followers whom they want to groom as self-motivated and autonomous workers who are capable of self leading (Rollinson, 2005). According to Bass and Avolio (2000), results of studies points out that transformational leadership has a positive effect on the employees' effort and satisfaction as he or she acts more of a mentor, a facilitator and an inspirational role model than a supervisor or a dictator. However, there are downsides to the transformational leadership approaches where, “political and arbitrary misuse of power, promotion of ulterior motives and unethical leadership” can occur (Weiss,2000). While there are various theories of leadership, in general there is common consensus among scholars that the leadership style within an organization carries direct impact on the workforce motivation. Studies by Crammer (2007), House et.al. (2004), and Paswan (2005) have investigated this link in their research studies. Motivation of the work force is a key ingredient in the organisational success and hence a priority to be achieved with the correct leadership approach. Furthermore, organisations are now changing in its form and configuration, from hierarchical bureaucratic structures to more fluid, flat, organic structures, in response to the agility and speed of response demanded by the highly competitive markets. Employees in these organisations are increasingly encouraged to perform autonomously, multi tasking and assuming fluid leadership responsibilities which are shared within teams. An autocratic leadership approach will not be suited in this context while approaches such as super leadership encouraging employees to become self leaders, will contribute to organisational performance. Another aspect is that the speed of innovation and the rate at which products are becoming obsolete is now driving organisations to promote creativity and innovation as core priorities. This can only be achieved when leaders apply the proper leadership approach which encourage, facilitate and guide their workforce to achieve a common vision by contributing their own creative and innovative solutions. Leaders must create learning environment and empower the workforce to create, innovate, share and integrate the knowledge within the organisation so that it becomes a core competency within the organisation that can greatly contribute to its successful performance. Another key role played by leaders in an organisational setting is the impact they make on the organisational culture. Every organisation has its own unique culture, which would have been probably created unconsciously, based on the values of the top management or the founders or core people (Schein 2004). Culture of an organisation influences the decision-making processes, it affects styles of management and what everyone determines as success. Companies such as Hewlett Packard, Dell, Google, 3M and Sony have unique corporate cultures molded by the CEO’s leadership style. Considering some of the Australian CEOs who have managed to achieve financial success for their organisations, Solomon Trujillo, the past CEO of Telstar Corporation is a good example. Since there was much media spotlight on Trujillo’s tenure and his final step down from Telstar, there is no doubt about the financial success and turnaround he spearheaded for the company. From a public organisation losing market share, Trujillo transformed Telstar into the fastest growing communication giant in Australia within a brief span of four years. As a visionary leader, Trujillo set very high standards for achievement for the ailing public corporation when he took over the helm which was met with much doubt by industry analysts. Summing up some of the major achievements of Telstar under Solomon Trujillo’s leadership, the company changed its communication platforms, becoming equipped to compete in the global mobile industry (Trujillo, 2007). In one of his interviews, Trujillo cites participative strategizing and mentoring the senior management and grooming them for future is at the core of his leadership approach In his own words, he spells this out when he states “I spend a lot of time teaching people how to develop strategy. The success has to continue after you're gone" (Trujillo in an interview with Brady, 2009). While Trujillo can be seen as a hard driver that sets high standards for achievement, the vision he created for Telstar to be the World’s fastest wireless network (Brady, 2009)was no doubt inspirational to its followers. His leadership made this vision a reality through his transformational business strategies as much as his transformational leadership qualities. Another example of a transformational leadership can be cited in CEO of HCL Technologies, a global information technology service company, Vineet Nayar. His visionary leadership and philosophy of “employee first, customer second” has gained him world recognition within the management field. Under his leadership, HCLT has become one of the top Indian IT leaders, and has achieved world recognition for its business performance, innovation and transformative management practices. In his book on his management and leadership philosophy, Nayar (2010) states that management should be made accountable to the employees in achieving organisational vision. His leadership prioritize the need for creating a culture of trust and establishing transparency in managing the affairs of the company to all employees. His concept of value zone prompts the leaders to foster entrepreneurial thinking among employees and decentralize the decision making while “transferring the ownership of "change" to the employee” (Nayar, 2010). Effectiveness of his transformational leadership approach has propelled the company to high ranks in global business. HCL has received many accolades from being the best Indian employer to being one of the five most influential up-and-coming companies in the world in Business Week listing. According to Fortune magazine, HCL under Naya’s leadership is considered to be having “the world’s most modern management,” (Veenit Nayar, 2011). It is rather evident that Trujillo’s and Nayar’s leadership styles share some commonalities while they also have some contrasting aspects. In the case of Trujillo, his main focus is on the task and becoming customer centric while his transformational leadership qualities are then imparted in to the nurturing of employees to become capable of implementing and sustaining the strategies and achieving vision. His style is to set high standards for the followers and make this vision inspirational. On the other hand, Nayar’s focus is explicit in his philosophy of “employees first” where he believes that through a motivated and energized workforce itself, the company can find its direction while the leader provides a directional guidance. There is greater value placed on the followers in Nayar’s approach than the Trujillo’s. These differences are most likely to be in response to the different cultural context of Australian business vs., Indian business organisations. Cultural factors such as collectivism vs. individualism places different levels of importance on human vs. task focus. Today, the changing conditions in the business environment as well as the features of the workforce calls for adopting leadership approaches which are different from the classical leadership styles used in the past. Effectiveness of Transactional leadership styles are at question in certain work place scenarios where alternative approaches of transformational leadership are being advocated. There are many success stories of how organisations have achieved difficult yet inspirational success under transformational leaders. In conclusion, it is very clear that leadership is a key ingredient in achieving organisational success. References: Avolio, B. & Bass, B., 2004. Multi factor leadership questionnaire. Redwood city, CA: Wind Garden. Brady, D., 2009. Sol Trujillo on Managing a Turnaround. EXECUTIVE INSIGHT [online] Available at http://www.businessweek.com/managing/content/may2009/ca20090527_879098.htm Cranmer, D. L. (2007) “Autonomy and control in the workplace: Assessing managerial styles and employee perceptions of work climate” PhD Dissertation, Univ. of Capella. House, J. R., Hanges J. P., Mansour, J., Dorfman, J. P., & Gupta, V., 2004. Culture, Leadership, and Organizations, Illustrative Examples of GLOBE Findings, 3(1), 51. Nayar, V., 2010. Employees First, Customers Second: Turning Conventional Management Upside Down. England: HBS PRESS BOOK Rollinson, D., 2005 .Organisational behavior, and analysis an integrated approach. 3rd ed. London: Prentice Hall. Schein, E.H., 2004. Organisational Culture and Leadership. 3rd ed. San Francisco: Jossey-Bass Publishers. Trujillo, S., 2007. Driving Transformation Through Innovation, Accenture Global Convergence Forum. April 12, [online] Available at http://www.accenture.com/us-en/industry/global-convergence-forum/Pages/global-communications-forum-gcf-2007-trujilla.aspx V. Nayar : Vice Chairman & CEO,HCL Technologies, 2011. [online] Available at http://www.hcl-axon.com/About_Us/HCL-AXON-Leaders.asp Weiss, J.W., 2001. Organisational Behavior & Change, 2nd ed. Ohio: South-Western Collage Publishing. Read More