Managing People Issues - Case Study Example

Transformational Leadership Name University Course Title Instructor Date Transformational Leadership Introduction Leadership is about creating vision and sense of possibility for employees through approaches like motivation and reward management. Leadership deals with the future, ideas, people and personalities (Gillard, 2009:726). Managers and employees now acknowledge the importance of soft skills such as communication, conflict management, leadership, perception and persuasion as integral part for success (Gillard, 2009: 725). Soft skills are “those skills over and above the technical knowledge and expertise in the chosen field, required for an individual to relate to and survive and succeed in his or her environment” (Ramesh, 2010:3). Further, he observes that soft skills are “built on attitude, manifested through communication and polished through etiquette”. Leadership is about soft skills and doing what you believe in through people so as to attain organizational goals (Barman, 2009:205). Thus, for an organisation to scale higher heights in market leadership it has to recruit managers with leadership qualities. This paper examines the statement that” transformational leadership is always required for successful organisational change” by analysing a leader who was successful in bringing about change. Theoretical Perspectives on Leadership One of the important requirements in any organization is human capital. Employees’ play a critical role of ensuring that organization’s vision is attained (Weightman, 2004:3). This is only possible if the top level management put in place personnel management mechanisms that aid in enhancing productivity. The above aspirations can be achieved by having multi pronged approach like visionary and motivational leadership and recruitment of managers with not only technical skills but also soft skills/peoples skills/interpersonal skills/ emotional intelligence who can understand formal and informal relations between people (Armstrong, 2001:7). The essence of all this is to ensure team work, motivated workforce and thus, enhanced productivity (Armstrong, 2001:13). According to Edwin Locke (1968), one of the earlier proponents of goal-setting, posits that goals formulated by individuals themselves contributes a huge portion towards motivating that person for unrivalled performance. The basis for this argument is that the employee will try to attain goals set out and even if they are not met, the employee shall have made a tremendous effort in achieving them and thus, contributing to improved performance. Precisely, this is what performance management aims at. One way of guaranteeing performance is through visionary leadership. Moreover, Brim (2012:3) notes that human beings performs well when they have goals and objectives set out for them. On the other hand, expectation theory looks at performance in relation to anticipated satisfaction of valued goals set by them. According to Victor Vroom (1964), people adapt their behaviour in certain way so as to attain desired goals. The essence of these theories is based on participatory approach to formulation of the desired objectives by having attainable, specific and measurable objectives. This would make the employees part and parcel of the procedure. This collaborative approach can only be realized with a properly formulated organization structure that has leadership which motivates, sets out vision and creates the need for its people. Goal-setting theory in the organization is reliant on how the management treats objective setting process in the organization (Bacal, 2012:8). Setting objectives is a sub step in planning (Koontz and Weihrich, 2008:82). This should be done with short and long term focus in mind. Moreover, in this kind of approach, vertical and horizontal information flow with guaranteed feedback is critical. In a nutshell, the essence of this is to link human behaviour with organization’s vision. Leadership and Success of an Organisation The success of any organisation is tied on how well the management relate with its employee. Employees are the epicentre of idea creation and implementation of strategic management plan of an organisation so as to achieve strategic positioning and market leadership (Denning, 2000:2). On the other hand, employees can be resistance to change thus, making organisation not to be responsive to change. According to Darwin cited in Tung (2001:41), it is not the strongest organisation that survives, but that one which is able to adapt to change. For an organisation to attain market leadership one of the critical ingredients is leadership. One to attain change organisation requires transformational leadership that is able to instil planned change through strategic planning. Ramesh (2010:2) presents an interesting discourse so as to understand why some employees or managers are successful yet they have limited managerial education. He draws an observation that emotions and emotional intelligence are important and affects how we interact and perceive things at work place. Those who have higher emotional intelligence which translates to effective social skills are more prosperous and effective. He defines soft skills as “those skills over and above the technical knowledge and expertise in the chosen field, required for an individual to relate to and survive and succeed in his or her environment” (Ramesh, 2010:3). On the other hand, Gitman & McDaniel (2008:226) posits that technical skills comprises of specialized areas of knowledge and expertise and the ability to apply that knowledge. Technical skills are acquired through formal education, through training and job experience. Every organisation needs to thrive and grow in its business operations. This is realized through its ability to meet the demands and expectations of the customers. Here, it means that an organisation has to do things better than its rivals (Thompson & Martin, 2010). In order to achieve a competitive advantage, companies locate in strategic sites for easy accessibility for its goods and services. Other success factors for an organisation include: store size, technology, purchasing power, and its customer care services (Sadler, 2003). A strategy has to be viewed from three perspectives thus opportunity, capability and competitiveness. These three, plus the company aspirations and values are what drives an organisation to succeed and reach greater heights. Their importance can be seen in the fact that they ultimately affect choices made within organisations, as well as the overall organisational performance (Thompson & Martin, 2010). Essentially, they form a key component of a business strategy adopted by an organisation. Leadership is about soft skills and doing what you believe in through people so as to attain organizational goals (Barman, 2009:205). Leadership is a soft skill or people skill that is derived from interpersonal skills and cognitive power (Papulova & Mokros, 2007:4). Leadership deals with the future, ideas, people and personalities (Gillard, 2009:726). There are numerous theories that have been developed to support the same. Trait theory is grounded on the premise that leaders are born. On the other hand behavioural theory posits that it is what a leader that makes him/her different from others based on energy, passion, self confidence and ambition (Bolden et al., 2003). Case Study of Transformational Leadership A key component of a management strategy in the organisation is for a company to gain a sustainable competitive advantage. Thus, it is not just about a strategy that enables the company to earn higher profits compared to rivals, but be able to remain in that position over a significant period of time. However, the current technological changes witnessed all over the world have drastically changed the business environment. As a result, companies do undertake strategic reviews from time to time depending on the speed that characterises the market a company is operating in at the moment. “In the world of the 21st century, the “significant period of time” may be quite short, particularly in the case of industries characterized by rapid technological developments” (Sadler, 2003:13). This essentially means that the management has to put in place necessary measures that will ensure an organisation is able to maintain its strategic position in an industry for as long has it is in operation. If this is not done, such a company would soon be overtaken by its rivals hence it loses the competitive advantage it held in the industry. International Business Machine (IBM) is one of the oldest computer manufactures. They trace their origin back in 1880s. In their earlier years of existence, the company focused more on hardware production or what is called product oriented approach. With time (from 1990s), their emerged shift in market trends which made them cede some grounds to other players thus, loosing market leadership (Tung, 2001:42). IBM as a company has gone under different metamorphosis. In earlier years (1914-1980s) it was a dominant player in the field of machines & computers and thus, rose significantly to claim market leadership. After some years and paradigm shift from product oriented approach to business service, the company started experiencing decline (1990s) and thus stared at eminent fall. The third face involved greater restructuring that saw them rebuild and thus the phase of transformation. This paper seeks to answer five questions in relation to IBMs rise, fall and transformation (Sahaf, 2008:52-62). How leadership can turn around a company is best exemplified by this. The first competency and source of restructuring was the board’s decision to source for a top level manager from outside who would view things from different angle. One of the competencies that Louis Gerstner brought was being customer oriented rather than just investing in innovation for no sake. In this line of thinking, the CEO was able to precisely pin point that the market trends were shift and thus, being able to engage and formulate new management and marketing strategies for IBM. At the initial start, he emphasized on speed, customers, teamwork and execution. He did this through standardizing the company operations and centralizing them so that IBM would act as one stop shop solution provider to its clients. This started giving them some leverage and market leadership again as they returned to profitability in 1994(Carter, 1998:90-95). To push the firm to next level the new CEO saw the need for deviant thinking and production of products that are demand driven. Since 1993 the firm is demand responsive. In this they produce what customers want and not what they think customers will need. The next affront is through making of the culture universal and thus being able to identify with diverse market as driven by their current CEO. Through strategic alliances, the company has been able to penetrate different segment of markets. This means that everyone is catered for under IBMs marketing strategy. The last observation is that they have been able to develop a good supply chain and outsourcing so as to reduce operation and production which is later transferred to the consumers (Bodreau and Jesuthasan, 2011). The next phase of turnaround was based on repositioning and reclaiming of the IBM brand. He directed most of the operations towards high profit- margin opportunity. To strengthen the brand value of IBM he consolidated the advertisement section into one rather than a scattered one with different themes. The second last competency that they engaged in from 2000 was the strategic partnership and acquisition. In this instance, the company acquired stake or the whole company so that they could add value to the customers and the shareholders. The last affront that they embarked on and which is being carried out by Louis successor a one Mr. Sam Palmisano is the standardization and globalization of the company platform so as to reduce operating cost, increase profit margin and value (Carter, 1998:90-95). Conclusion In business world there are two situations. Change with the changing time or be changed by the changing time. The best way to anticipate change is through taking the lead initiative so that a firm can enjoy first mover advantage. For a company to stay afloat, it has to be responsive change either at industrial level or the larger macroeconomic environment. Organizational change can only be attained through a visionary leadership that is able to churn out strategic management plans that will guide the internal operations of the company. One approach towards this as seen in IBM is the continual improvement/ total quality management and strategic partnership after the recruitment of Gerstner as a new manager in 1993. References Armstrong, H. and Murlis, M. (2007). Reward management: a handbook of remuneration strategy and practice. London: Kogan Page. Armstrong, M. (2001). Managing people: a practical guide for line managers. London: Kogan Page. Bacal, R. (2012). Performance management. New York: McGraw-Hill. Barman, K. (2009). Leadership Management: achieving breakthroughs. New Delhi: Global India Publications Pvt Ltd. Bodreau, J. and Jesuthasan, R. (2011). Transformative HR: how great companies use evidence based change for sustainable advantage. New York: John Wiley and Sons. Bolden, R., Gosling, J., Marturano, A. & Dennison, P. (2003). Review of leadership theory and competency frameworks. Centre for leadership studies, University of Exeter. 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