Changing Leadership Styles - Literature review Example

Running Head: Changing Leadership Styles Name Course Institution Instructor Submission Date Introduction Among other factors which have turned out to be major subjects of debate on reasons for major organizational failures is leadership. Leadership is all about using innovative skills in arriving at meaningful solutions to problems affecting the organization. A number of scholars have highlighted leadership to be a crucial factor to any organization. For example, Darling & Beebe (2007, P. 152) have highlighted principal factors that determine the success of any business individual and they include; leadership ability and good communication skills. With globalization redefining contemporary entrepreneurship environment, leaders need to adapt to change. Unlike in the past, organizations are globalizing their operations and in the same dimension, as Ronald (2010) argues leadership is perceived differently from how it was done a generation ago. This has been evident especially for the last two decades. Organizations focus on leaders who are adaptable to different business environments. The way leadership styles have changed within the context of globalized environment will be the subject of this essay. In addition to this, it will also profile various leadership and communication styles that have been exhibited by successful leaders. Arguments will be supported by various scholarly works together with reference to a global leader I admire; Ratan Tata. Ratan Tata is the current chairman of the Indian company Tata group. His exemplary performance in leading Tata group has enabled the company to be at the top level in Southeast Asia. His characteristic leadership style and secrecy enabled him to transform a Rs 13,000 national institution to Rs 129, 994 global organization that saw him voted best brand icon (Ahlawat, 2012). Much interesting is his leadership style is sincerity and total devolution as a supplement of innovativeness. His innovation was quite evident when the company launched the Nano; the world cheapest automobile. Up to date, he is still respected for this innovative idea and for this reason, he remains my admirable leader. Definition of Key Terms Dubrin (2008, P. 334) defines leadership as the process of guiding and motivating others toward the achievement of organizational goals or the ability to inspire both support and confidence within a group of persons needed to achieve goals of an organization. Leadership can also be defined as impacting cooperation with an objective of achieving desired set of goals in an environment where leaders influence followers in such a way that they voluntarily achieve business goals (Taleghani etal., 2010, P. 108). A number of scholars have defined this term and from their definitions, it is quite evident that they all agree with the idea that leadership is the ability of a leader to enhance cooperation and confidence among his or her followers. Generally, leadership is the process of guiding other individuals towards the achievement of organizational goals. Leadership is a way of communication used by a leader to modify the behavior of followers to attain specific goals. On the other hand, leadership style is a mode of administration used by a leader to shape the knowledge, mental attitudes and the conduct of his or her followers ( Hood, 2007, P. 15). The manner in which one leader leads is different from that of another leader. Leadership styles do vary from one individual to another. However, it is worth noting that the kind of leadership style used is dependent on the context of the organization. Leadership styles are changing especially during these times where businesses are operating in a global environment. Perhaps it may prove helpful to define globalization in the context of changing leadership styles. Hamilton (2008, P. 10) defines the term globalization as the global integration of economic, technological, political, cultural and social characteristics between nations. Globalization has affected many sectors including businesses leadership. Unlike in the past, new international organizations operating in a global environment are emerging. Businesses which have globalized or operating in a global environment require global leaders. Change in leadership with Regards to Changing Global environment Several discussions have emerged on the effects of globalization. As a matter of fact, this factor is proving to be a major challenge to the leaders. This factor is proving to be a challenge to current leaders and more so to the future leaders. Changing nature of leadership research (CNL) conducted with an objective of trying to understand how the challenges facing the leaders have changed and also the changes in the definition of effective leadership was indeed capable of ascertaining the fact that problems are becoming more complex (Martin, 2007). As a result, leadership styles have changed to adapt to the complexity of current challenges. Organizations are currently operating in regions with no boundaries. It is for this reason many industrial organizations are believed to experience rapid changes (Petrie, 2011). The business environment has completely altered and has turned to be complex and has presented several challenges. One of the major factors that has been highlighted to be the major cause of this changing business environment is the global economic recession which began in the year 2007 (Petrie, 2011). Several leaders interviewed have also agreed with the idea of changing business environment to be a major point of concern in the current leadership. Among them was Ronald Smith of the Center for Creative Leadership (CCL). His argument was supported by a study conducted by IBM on over one thousand five hundred CEO's. The CEO's agreed with the idea of increasing complexity of environment being a major concern to the current leadership (IBM, 2010). There are a number of factors that have been highlighted to make these environments difficult to lead. They include; numerous elements interacting, volatile information system, information overload, interconnected business communities, vanishing traditional boundaries, new disruptive technologies and globalization that requires cross-cultural leadership (Petrie, 2011, P. 8). Generally, the new environment is characterized by a more complex environment in which the elements are interconnected. Because of this interconnectedness, leaders need to move from leadership styles which are suitable in managing global economies. Importantly, leaders need to remember that unlike in the past, organizational team members originate from different cultures and nationalities . In addition to this, competition proves to be a common phenomenon in the current organizational environment. To be able to succeed, participative leadership is necessary. It is for this reason that leaders are moving towards transformational leadership style. These factors explain the changing trend in leadership styles. Ways in which Leadership has Changed Many people agree with the fact that leadership has continuously since the beginning of leadership as conventional discipline of research. The most evident change in leadership is the perception of what makes great leaders. Horner (1997) argues that "the characteristics that made leaders successful 15 or 20 years ago may or may not be the same characteristics required today" (P. 277). Great leaders are usually described by their characteristics. Scholars have since then been preoccupied with finding an answer to what makes a great leadership. In twentieth century, there were various approaches taken by researchers to delve on the issue of what makes a great leader. The first group of research studies into this issue described leaders by their internal qualities and there was a belief that leaders were born and not made (Horner, 1997, P. 270). The process of getting a leader involved the observation of both physical and mental attributes. In addition to this, personality of an individual also mattered to a great extent. Research studies were conducted on the basis of leaders being born rather than being made (Horner, 1997, P. 270). Despite many research studies on this basis with an objective of getting the right traits of great leadership, results from various studies gave conflicting results. Horner (1997) highlighted omission of environmental factors as one of the failures of research studies of this kind of thinking. The second trend of research was conducted on the basis of behavioral qualities of individuals (Halpin & Winer, 1957; Hemphill & Coons, 1957). These research studies identified behaviors of leaders that exhibited an increase in the effectiveness in an organization. Documentations indicate that several research studies done by different universities at the same were able to reveal two common factors; consideration and initiation of structure (Horner, 1997, P. 270). Contrary to the first group, it negated the idea of leaders being born rather made. According to Horner (1997), these studies were to some extent effective in proving that effective leaders were not necessarily born. In addition to this, these research studies broadened the focus of leadership through the inclusion of activities directed to the followers together with their tasks. It was also through this line of thinking that a two-factor model of leadership was developed by a different group of researchers. The two factors were; people and output concern (Horner, 1997, P. 271). The third line of thinking saw the emergence of what are termed as contingency theories. It was an extension of the first two approaches in that great leadership qualities were analyzed by considering the character traits of a leader, the behavior of a leader and the environment (Horner, 1997, P. 271). This set of theories were prominent in the 1970's and 80's . A supposition made by contingency theories is that one leadership factor is dependent on other factors. The research was successful and two common traits of effective leaders were identified; consideration and initiation structure (Viviane, 2009, P. 1). The consideration factor included leader having a good relationship and being concerned with his or her subordinates. With regards to initiation structure, effective leaders were found to involve planning in their leadership strategies. Contingency theories gave rise to the latest leadership theories which are basically the core to leadership styles. Horner (1997) asserts that other leadership theories have come forth in the last one to two decades. The most common one is the transformational leadership. In a research that was conducted on over five hundred leaders by Centre for Creative Leadership, 84 percent of them agree with the idea of effective leadership changing (Martin, 2007, P. 3; Mind Resources Institute of Learning & Innovation, 2010, P. 8). However, the question of how it has changed and its future look continue to puzzle many scholars and leaders. Contemporary changes in leadership can be attributed to globalization that has been inevitable in the recent past. Technological advancements have come along with surprises to the current organizations. As it has been stated by Ronald (2010), the past leadership was a kind of a straight forward leadership. Therefore, leadership was a skill that could be learned easily due to its nature of being done according to some guiding principles. Contrary to this, leadership has turned out to be more complex today and the old leadership strategies are deemed to fail. It is a common phenomenon to hear scholars talk with much more focus on a leadership style that exhibits flexibility, teamwork, moving beyond boundaries and corporate leadership (Martin, 2007). Much focus on these qualities are accelerated by many factors such as organizations globalizing their operations, the changing attitudes of individuals, technological advancements and stiff competition as a result of emergence of myriad organizations thus pushing for better service delivery (Mind Resources Institute of Learning & Innovation, 2010, P. 8). This has even seen the emergence and much focus on things like culture deemed to have tremendous effects on an organization. Countless research studies have been conducted on various contexts of culture and their importance. From these studies of culture, scholars have argued that leaders should work within organizational culture if they are to be successful (Horner, 1997, P. 273). Similarly, much more focus has been put on leadership theories and their practicality in organizations. In fact, more leadership theories have emerged in the last decade and their emergence have been supported by the past motivational theories (Horner, 1997, P. 274). In the past few decades, contingency theories of leadership were given more focus and they required that leaders were to adapt to a certain leadership style that fits into a particular context. Contingency theories were perceived to be high level theories in the past especially 1960's and 70's (Ronald, 2010). Currently, leadership has extended beyond the stipulations of what can be termed as 'mechanical' contingency theories which were effective during those times. According to Ronald (2010), new thinking in leadership has emerged. Leadership is currently seen as complex phenomenon and it requires more focus on employees. As a result of this new way of thinking with regards to leadership, some theories have emerged to replace the old ones. Transformational and Leader-member Exchange (LMX) theories are the common theories of today (Ronald, 2010). These two theories affirm the idea of leadership that engages all the stakeholders being an effective leadership. Unlike in the past, decisions need to be made with involvement of all members. Besides this, as earlier stated new theories have emerged. Shared theories which assert that decision making in any leadership need to be done by all members are emerging. This new set of leadership theories have three main themes; much more focus on employees, decision making that is decentralized and realization of complexness of leadership (Ronald, 2010). The theme of much more focus on employees entails the leader involving and motivating them. Leadership has changed from the old authoritarian termed as 'rule by the book' to a more participative leadership (Mind Resources Institute of Learning & Innovation, 2010, P. 8). With regards to decentralized decision making process as a theme of modern leadership, followers have been empowered to make decisions even when not instructed by the leaders (Ronald, 2010). As earlier mentioned, there has been a shift from industrial based economies to knowledge based economies. It is therefore not a surprise to find the followers having more knowledge of a certain context compared to their leader. The kind of leadership styles that have been adopted today are known to empower employees to work with minimal supervision and make their own decisions. Similarly, leadership is recognized currently as a complex phenomenon therefore it is not a one person's affair. To maintain competitiveness and effectiveness, leaders need to share their capacities with followers. As noted by Ronald (2010), problems are becoming complex and what used to be a straightforward undertaking involving simple analysis of a situation and just moving forward may prove to be ineffective. Scholars have agreed with the idea of these shared leadership theories are indeed the only gateway to success in the current competitive world. Manz & Sims (1991) have used these theories to propose the new model of leadership which is characterized by leaders helping their followers to manage themselves and in reference to the term 'SuperLeadership', they challenge the old kind of leadership (P. 18). Leaders arise to greatness by leading their followers towards managing themselves and at the same time maximizing their capabilities. This is indeed one of the most distinguishing characteristic of successful leaders. Leadership Style of Ratan Tata Ratan Tata has appeared once or severally in many leadership publications. On other instances, it is a common phenomenon to hear people mention their aspirations of his exemplary leadership. Ratan Tata took over the leadership of Tata Group in 1991 from his predecessor Jamsetji Tata. Jamsetji Tata laid a good foundation for Tata Group but despite laying good foundation, Ratan Tata's performance is exemplary. Vembu (2011) argues that Ratan Tata restructured Tata Group in sense that not even his predecessor regarded as conservative could have done. His leadership saw the group excelling by engaging in acquisitions of a number of companies. Currently the group is a determinant of economic progress of an emerging economy nation by being a largest taxpayer. Ratan's career began in 1977 when he turned down an offer by IBM and agreed to join Tata Group. He began his leadership in Empress Mills, one of Tata group's units. Before his reign, the unit was not performing. His leadership saw this underperforming Tata group unit excelling. Besides being a visionary leader, Ratan Tata is motivational and inspirational to his followers (Bhattacharyya, 2006, P. 111). With regards to his attributes, it is quite evident that he displays a transformational style of leadership. Northouse (2001) defines transformational leadership as a style of leadership that transforms and alters individuals. Hall et al., (2012) highlights four factors which characterize transformational leadership and they include; idealized influence, inspirational motivation, intellectual stimulation and individual consideration. Ratan Tata was able to motivate his employees towards the achievement of company's objectives. Similarly, Ratan Tata was able to unite his employees who were initially not united before his reign. in one of his interviews with McKinsey Quarterly in the year 2005, Ratan was bold enough to give the reason behind his success as uniting the group. "We were regarded as a loose federation of companies that competed and fought against each other and by creating a common brand we have succeeded in bringing the group much closer together" (Vembu, 2011). According to Kuhnert & Lewis (1987), transformational leaders are capable of uniting the followers and at the same time changing their perceptions, goals and beliefs. This characteristic displayed by Ratan Tata resulted to his success. Transformational leadership leads to attainment of high levels of performance. Transformational leaders are also charismatic. Charismatic leaders are known to have tremendous effects on his or her followers. His visionary and innovative characteristic in his leadership also depicts his transformational leadership style. Ahlawat (2012) posits that managers who have worked with Ratan Tata are fast to take a note of what he focuses on; the idea of internationalization. One of his group's executive director, Gopalakrishnan said that Mr. Tata has influenced the entire group and he is a thinker who focuses on long term goals (Ahlawat, 2012). The idea of globalizing operations according to him was to reduce dependence on local economy (Cappelli et al., 2010, P. 4). He is also strategic in executing his ideas. After identifying a theme, he communicates to his groups and makes consultations. His way of communication by asking questions is quite unique of successful leaders. He is often quoted for using statements such as 'why can't you' (Ahlawat, 2012). By so doing, he doesn't tell his followers what to do. This implies that he encourages his followers to make their thoughtful decisions as long as they are of great benefit to the company. He comes up with an idea and leaves it with his managers to come up with decisions on what is best (Ahlawat, 2012). Ratan Tata exhibits six qualities of a transformational leader highlighted by Northouse (2001) and they include; empowering the followers to make their decisions on what could benefit the organization, being a role model, listening to the ideas of followers and developing cooperation spirit among the followers, develops vision, sets an example of implementation of change and helps the followers to contribute to the organization. Conclusion In conclusion, leadership has changed from its earlier status of being autocratic. Tata Group was indeed capable of surviving stiff competition because of Ratan Tata's leadership. By being united, they would have a single objective. Ratan Tata was able to identify a crucial weakness of Tata Group; dividedness. By changing his leadership style to transformational style during the initial stages, he was able to unite all the stakeholders of the group. Leadership is a crucial determinant of an organizational success. Leadership styles are also dynamic in nature. Transformational or charismatic style proves to be the most effective in the current times where globalization takes the centre stage. Of great importance is the idea of employee empowerment to contribute towards organizational success. Leaders need to adopt this leadership style because it empowers the followers to make their own decisions thus contributing towards the overall leadership of the organization. Ratan Tata will remain a global icon of leadership and will be remembered for his great achievement in Tata Group and his innovative idea of bringing the world's cheapest car 'Nano' to the global market. References Ahlawat, A. (2012). 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