Management And Leadership - Term Paper Example

Qatar Oil and Gas: Assignment 2 [Name] [Professor Name] [Course] [Date] Table of Contents Table of Contents 1 Executive Summary 3 Question 1: Leadership and management behaviour 3 Question 2; Raven and French’s sources of Power 4 a)Stakeholders vs. purchasing at RasGas Company Ltd 4 Legitimate power 4 Reward power 5 Coercive Power 5 Expert Power 5 Referent Power 6 b) Supplier vs. customers 6 Coercive power 6 Reward 6 Legitimate power 7 Referent power 7 Expert power 7 3. Projects and concepts of purchases 7 Project 7 4) Benefits of procurement activities to an organization 9 5) Change and Kotter’s eight step change model 10 Change 10 Kotter’s eight step change model 10 Create a sense of urgency 11 Forming a powerful guiding coalition 11 Creating vision 12 Communicating for buy-in 12 Empowering action 12 Planning and creating short-term wins 13 Consolidating improvements and marinating change momentum 13 Institutionalising new approaches 13 Conclusion 13 Executive Summary This paper evaluates the differences between leadership and management. Also examined include five sources of power identified by French and Raven and how they are applied to employees. Furthermore, the paper evaluates how people working for Suppliers can apply the five sources of power identified by French and Raven when working with customers in the context of RasGas Company Ltd. Also, discussions are made concerning what a project entails and how purchasing in a project environment is different from purchasing normal goods and services. The benefits of procurement activities from the application of project management principles are also examined. Lastly, the paper discusses what constitutes change and how Kotter’s eight step change model can be applied to a business situation. Question 1: Leadership and management behaviour The term ‘management’ and ‘leadership’ are viewed differently by different theorists. While some theorists may view these terms as being synonymous hence using them interchangeably, others have expressed that the two terms are indeed different in their manifestations and application. With regard to behaviours expected of these two terms, this paper argues that leadership behaviour and management behaviour are indeed two different things. Leadership and management share some similarities, as their roles involve influencing, working towards achievement of a goal and working with people. However, the traits exhibited by both roles are different (Lunenburg 1-2). A leader is influential in nature, and has the capacity to influence a group of people to attain a common goal. Conversely, a manager controls the people. This implies that while a leader inspires the people to take a particular course of actions, the manager directs the people to take a specified course of actions. This further implies that while the leader focuses on people, the manager focuses on structures and systems (Bohoris and Vorria 2-4). Therefore, while a leader’s behaviour is aimed at maintaining a circle of influence, the manager’s behaviour on the other hand is aimed at maintaining the circle of power. Managers are obligated to maintain subordinates while leaders are obliged to maintain a group followers. Consequently, leaders are change agents. Even as leaders advocate for change and new ways of performing tasks, managers advocate for stability and status quo (Lunenburg 1). Management behaviour is conditioned by positional power, status or authority. It is also conditioned by rules structures and systems within an organization that surrounds a job. On the other hand, leadership is conditioned by personal power, which originates from the ability to develop a mutually rewarding relationship (Bohoris and Vorria 2-4). Question 2; Raven and French’s sources of Power In a study of power carried out by social psychologists Bertram Raven and John French in1959, the researchers divided power into five different forms. Since leadership and power are closely linked, their model shows that different forms of power determine an individual’s leadership. This concept is applicable in organizational communication and in every level of workforce. The five bases of power included; reward, coercive, referent, legitimate and expert. Subsequent research saw Raven identify a six separate base of power called informational (Lunenberg 1). a) Stakeholders vs. purchasing at RasGas Company Ltd Legitimate power Legitimate power refers to an individual’s ability to influence other people’s behaviour based on the position the individual holds within the organization. It is often called formal authority. A manager at RasGas Company Ltd who is given position of legitimate authority to oversee those in the purchasing has the perceived right to ask those in the purchasing to do the purchases in line with the budget and within the scope of their authority (Lunenberg 2). Further, the employee entrusted with the legitimate power can exercise their authority of power by formulating procedures on how those in the purchasing should carry out their businesses. For instance, he might institute a requirement that all purchases be approved by him, thus exercising his authority of hiring. Reward power Reward power refers to an individual’s capacity to influence the behaviour of other people by providing them with the items that they want to receive. They can be in terms of raising pay or bonuses, more responsibility or recognition (Lunenberg 3). A manager RasGas Company Ltd entrusted with the role of overseeing purchases can use his reward power to control and influence employees working with purchasing. For instance, the manager may recommend an exemplary employee working within purchasing for a promotion, salary increase or bonuses on condition that the employee would value the reward. However, if they do not value them, it will mean that the manager has no power. Coercive Power Coercive power refers to an individual’s ability to influence others through creation of perceived threats or by punishing errant subordinates. For instance, persons working within purchasing RasGas Company Ltd may comply with the manager entrusted with overseeing them because of threat of punishment or fear. In this case, the manager’s power may include assigning undesirable work assignments, reprimands, demotion, dismissal or suspension (Lunenberg 4). Expert Power Expert power refers to an individual’s ability to influence the behaviour of other individuals because of acknowledge skills, abilities and knowledge (Barett and Hiltbards 15-16). An employee within RasGas Company Ltd with the longest years of experience in purchasing may have power over individuals working in purchasing because of his expertise. In this case, he may have power even when he is ranked lowly within the organizational hierarchy. Referent Power Referent power refers to an individual’s ability to influence the behaviour of other individuals because he is liked, respected and admired. For instance, when an individual who works within purchasing is a friend to his manager and one day he is requested to undertake a special project the individual does not like (Barett and Hiltbards 15-16). To other people, the individual is likely to turn down the request. However, because of his special relationship with his boss, he is likely to do it as a favour. In this case, the manager has power over the individual because of their positive relationship. b) Supplier vs. customers Coercive power This type of power relied on coercion to compel individuals to do what they do not desire. People working for suppliers can find this source of power useful in promoting seles. It may involve using threats to persuade the customers to buy the products of RasGas Company Ltd (Barett and Hiltbards 15-16). For instance, if the goods are a necessity, suppliers may threaten the customers that the company may withdraw supply of goods to that particular target group due to low sales. Alternatively, the supplier may threaten the customer that the goods are reporting high sales and may get out of stock if the customer does not purchase them in bulk. Reward This kind of power involves the supplier possessing the capacity to grant the customer things that they desire, and to reduce those that customers do not desire. In this case, the supplier presents the customers with outcomes that the customer considers in a positive way (Barett and Hiltbards 15-16). Towards this end, the most popular forms of reward in purchasing may be discounts or bonuses. For instance, the supplier may offer discount to the customers to enable them to buy the product in bulk. A major disadvantage with this source of power is that if they are given frequently, the customers may become dissatisfied by the reward making it to lose its effectiveness. Legitimate power This form of power implies that the supplier has the ability to administer to the customers particular feelings of obligation. The customers will tend to obey the supplier based on his role and the position of his goods in the market (Lunenberg 3). This kind of power is basically viewed as a legitimate form of power accruing from appointments to the leadership role. Referent power This form of power implies that the supplier has the capacity to administer to the customers a sense of personal approval or acceptance. Here, the supplier is viewed as a role model by the customers and hence is often viewed with admiration. It can be translated into various forms including where companies use celebrities to promote their products in their supply chain. In this case, customers may feel obliged to buy the products based on their admiration to the celebrities (Lunenberg 2). Expert power Expert power refers to the capacity of the supplier to administer to the customer expertise or knowledge about a product, or various ways in which a product can be used. As a consequence of this form of power, the supplier is able to convince the customers to respect him. In any case, the expertise doesn’t have to be genuine. Rather, it is the awareness of that kind of expertise that presents the power base. When customers are convinced that the supplier possesses superior knowledge about the product, they award power to the supplier by acknowledging his products. 3. Projects and concepts of purchases Project A project refers to an endeavour in which labour, materials and capital resources are organised to carry out a unique scope of work within the constraints of cost and time in order to deliver a beneficial change by qualitative or quantitative objectives. It can also be referred as a way of organizing resources, where a group of individuals are gathered to undertake different take aimed at achieving a common objective over a preset schedule. Typically, projects need a leader to define the work objective and the criteria for success (Kay 47). Purchasing in project management differs from purchasing normal goods and services in a number of ways. For instance, in a project environment, an external expeditor or a procurement manager in the procurement department controls the progress of purchasing in a project environment by making sure that the required goods are bought within the appointed date and in the agreed quantity time and location. However, purchasing normal goods is rather random and there is no manager appointed, rather, the goods and services are purchased based on an individual’s obligation to do so out of necessity, or either motivated by his leadership role. Additionally, in project environments, purchasing is usually done where there is some form of system or structure and there are consequences for late delivery or for poor quality of goods. In this case, inferior goods and services can get very expensive and lead to unsatisfied customers causing a loss of customers. As a result, the goods or services bought have to be inspected through a system that determines their quality. Such systems may include production control, quality control, transport survey and project management. This is not the case in purchasing of normal goods and services when an individual feels he is the sole determiner of the quality of goods and services. Here, the leader takes the responsibility for the quality of the purchases and there are no consequences for buying poor quality goods and services. Purchasing in a project environment takes into account a range of factors such as the cost and the life of goods and the services, as well as the quality required to meet the project’s needs. On the other hand, purchasing normal goods and services involves the action of committing expenditure with main focus on price rather than value. 4) Benefits of procurement activities to an organization Project management approach to procurement involves the acquisition of goods and services from outside the performing organization to ensure that RasGas Company Ltd derives optimal benefit from the goods and services in context to the project. Project management approach to procurement activities can deliver a number of benefits to the organization. Procurement activities can obtain the best price to RasGas Company Ltd whereby the procurement or project manager consolidates requests of multiple divisions within the project with the aim of ensuring that a single purchase order and supplier meets the needs of the entire project. As a consequence, this also reduces the time taken to process the requests for the project. Procurement managers may further develop an effective working relationship with the supplier hence securing the capacity to negotiate for the best deal (Chang, Rodeghier and Kemp 3). Procurement activities enable a project manager to maintain consistency. Effective procurement policies or procedures may enable a project to maintain quality and consistency in the goods and services supplied. For instance, because of the increased application of information technology, a procurement manager can focus on using data to make procurement decisions and to plan for the purchases. This is particularly important for complex purchases that require insight, research, experience and personal skill. This enables the RasGas Company Ltd to buy goods that are consistent with their needs in the context of a project, hence operating effectively, managing risks of redundancy and driving compliance. Procurement activities enable a project manager to negotiate contracts for an organization. Effective and dedicated procurement managers are able to negotiate the best deals for an organization by identifying the needs of a company and securing the most favourable position for a contract (Kay 47). The procurement manager therefore evaluates and monitors products continually to make sure that the outcomes are in line with the terms and conditions. They also meet the suppliers to discuss substandard or defective goods and services. Through maintenance and review of a formal record of the product performance, the manger is able to track the performance to ensure an efficient supply chain (Chang, Rodeghier and Kemp 3). 5) Change and Kotter’s eight step change model Change Change depicts situations where processes, organizational structures, systems and job roles are under transition or transformation from a former state of existence to a new one. In an organization, change often is an outcome of a reaction to certain opportunities or problems that face internal or external stimuli. Kotter devised an eight-step change model to explain the process of change in an organization (Creaser). Kotter’s eight step change model Kotter’s eight step change model points out a process where managers can commence, direct, implement and encourage organizational change by engaging employees. The model depicts a starting point for formulating an organization change strategy in implementing a change of supplier within RasGas Company Ltd when some employees do not see the need for the changes (Stragalas 31). Figure 1: Kotter's 8-step model (Chanecards.org) Create a sense of urgency Kotter suggested that for people to have the level of motivation that could be leveraged for change to happen successfully, they need to see a sense of urgency, or that a change is necessary at that point in time (Fig 1). For instance, when the people notice vulnerability within the organization, the fear of losing ground triggers them into taking action (Coutts 1). In circumstances where certain employees at RasGas Company Ltd resist a change of supplier a sense of urgency can be created by informing the members how the company has lost major contracts due to inferior products compared to competitors’ and the need to improve on product quality. By helping them see the need for change, the employees who resist the need for change will be convinced of the need to act immediately. Forming a powerful guiding coalition Here, a team of leaders who have the necessary influence and expertise on procurement necessary to bring the change is developed. Change efforts usually begin with an individual and grow to involve more people who believe that change is necessary. The strategy is to gather a base of individual who believe in and can effect change (Appelbaum et al 767-768). In situations where certain employees at RasGas Company Ltd resist the need to change a supplier, a manager should begin by forming coalitions with those who agree that the change should happen. Creating vision The vision and the strategy behind the change objective should be realistic, focused, favourable, attainable and easy to communicate. Here, successful change relies on a ‘bigger picture’ of the future, which appeals to the resisting stakeholders or employees helps trigger motivation (Coutts 2). Where certain employees resist the need to change a supplier, the manager needs to create visions on what the organization stands to gain in terms of saving on overhead cost related to rigorous quality management to ascertain quality products from the former supplier. Communicating for buy-in An organization involves many people with different mindsets and understanding. This calls for the need to communicate the aspects of the change and to respond to their information gaps regarding the change. It is critical to note that the change effort will be futile if most of the people do not understand, acknowledge or show commitment to the change effort (Appelbaum et al 767-768). A manager can call up a meeting to communicate to the employees about the need to change a supplier. At the meeting, focus should be on communicating the need for change as well as filling in the information gap of the resisting employees by addressing their concerns (CRÈME 20). Empowering action An organization removes obstacles and facilitates constructive feedback and support from other leaders. This implies that barriers to effective implementation are identified, this include individual resistance or employee skillset. After identification, the barriers are the removed. With respect to changing a supplier, it involves calling individual employees who are opposed to the change and addressing their concerns (Coutts 3). Planning and creating short-term wins Since change takes time, it may lose momentum as well as be faced by disappointments. Additionally, most employees may not go along with the change unless they see compelling evidence that their efforts are worthwhile (Appelbaum et al 768). In changing the supplier, the manager sets goals that can be achieved in small portions. For instance, instead of changing the suppliers for the RasGas Company Ltd drastically, the manager can begin with a single project or department. This can go on proportionately until the entire suppliers are changed. Consolidating improvements and marinating change momentum At this stage, persistence, determination and progress reporting are encouraged and fostered. This can be achieved by highlighting attained and future milestones. In changing a supplier, a leader uses the feeling of victory to motivate the employees to focus on successfully changing the supplier (Appelbaum et al 768). Institutionalising new approaches Here, the value of successful change is reinforced to make the change stick to make the change a fundamental part of the organization so that it is not considered as foreign (Coutts 3). In changing the supplier, the employees or stakeholders are made to understand that the new supplier is part of the organization. Conclusion The term ‘management’ and ‘leadership’ are different. While a leader is influential in nature, and has the capacity to influence a group of people to attain a common goal, a manager controls the people. Social psychologists Bertram Raven and John French in1959, divided power into five bases including reward, coercive, referent, legitimate and expert. A project basically refers to a way of organizing resources to achieve a common objective over a preset schedule. Purchasing in project management differs from purchasing normal goods and services since in a project environment, the purchasing process is controlled and monitored. Project management approach to procurement activities can deliver a number of benefits to the organization such as obtaining the best price to an organization, maintaining consistency and negotiating contracts for an organization. Kotter devised an eight-step change model to explain the process of change in an organization. The model depicts a starting point for formulating an organization change strategy in implementing a change of supplier within an organization when some employees do not see the need for the changes. References Appelbaum, Steven, Habashy, Sally, Malo, Jean-Luc & Shafiq, Hisham. "Back to the future: revisiting Kotter's 1996 change model." Journal of Management Development, 31.8 (1996): 764 - 782 Barett, Sharon & Hiltbards, Troy. 'Power and Influence Charting.' CrossTalk, 2011. 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"Power and Leadership: An Influence Process." International Journal Of Management, Business, And Administration 15.1 (2012): 1-9 Stragalas, Nicole. Improving Change Implementation: Practical Adaptations of Kotter’s Model, 2011. 6 Nov 2013 Read More