Leadership and Turbulence Times at Temasek Holdings - Case Study Example

Leadership and Turbulence Times at Temasek (Student Name) (Institutional Affiliation) Management (Instructor) May 3, 2013 Leadership and Turbulence Times at Temasek Introduction Temasek Holdings is huge investment entity based in Asia and is confronted with some critical management and market matters. The botched leadership transition as well as the global financial turmoil has caused the organization to get into turbulent times. From the unfolding of the events happening at the company, it is evident that leaders have disagreed over strategic issues. The company does not grant freedom of leadership to allow the incoming leader to design strategies for investment and to navigate the organization during difficult financial times. It is therefore apparent that the company has transactional leadership style that is not suitable to turn around things, survive global financial crisis and renew its reputation therefore change is needed in their leadership style from a transactional system to transformational approach. If leaders are to retain and demonstrate their value, they have to steer the company through different transitions. Failure to manage such transitions effectively can cause career disaster, but on the other hand, successful navigations results in greater flexibility, important lessons learned and great leadership skills. Leaders need to be agile in their approach to complex matters (Yukl, 2010). This paper explores why the leadership style in Temasek should be changed to create stability in the company that has been caused by unsuccessful leadership transition and global financial crisis. Problem Identification The problem with Temasek is that they are faced with global financial crisis that is seriously affecting the business and they have observed that they need a change their investment strategies to be able to navigate the company during hard financial times. Worse still is that their transactional leadership style has resulted to a collapse of leadership transition since they do not provide freedom of leadership that is very much needed to devise new processes and systems to steer the company during such a turmoil situation. Critical Analysis A number of organizational theorists concur that effective leadership remains one of the fundamental components of organizational success (Robbins, Bergman, Stagg and Coulter, 2009). Leadership is commonly defined as the social influence process through which a person enlists the support and aid of others to accomplish their mission or task. Some vital highlights inherent to this description are that the mission or the task cannot be attained by one individual operating alone. Second, being that leadership is interpersonal and social process. Lastly, is that leadership functions in the service of mission and task, which is external to the ground. The Board of Directors which is the top executive at the company need to encourage and establish rules, roles and norms for efficient execution of known tasks, however they also need to be responsive and sensitive to change through employing decision making, problem solving and sensitivity strategies which can allow adaptation to the current global financial turmoil. According to Bennis & Nanus (2007) leadership is a social influence process, and for leaders to exercise their influence, their followers should respond and accept to their persuasions. Transactional leadership that company seem be applying emphasizes on the basic management approach of organizing, controlling as well as short-term planning. This style of leadership overemphasizes short-term and detailed goals and procedures and standard rules. They make no attempt to improve member’s generation of ideas and creativity, for instance no freedom is granted to make strategic investment decisions (Johns, 1995). The company needs a different and new approach to leadership development because the current leadership development approach seems to be majorly based on individual assessment. A more pragmatic method would be segmenting the leadership functions in a similar way that Temasek has segmented its business operations. Because the company has one leader who designs the investment strategies for the whole businesses, this could add more problems to the company because if the individual has managerial problems then the whole business operations would be affected (Anderson and Krathwohl, 2001). Segmenting leadership roles entails prioritizing and targeting only such leadership roles which are vital to executing business strategy of the company. Persons that have right combination of willingness and performance are fast-tracked by way of job-relevant development experiences, which rapidly prepare them to work within higher roles. According to Zaleznik (1997) leadership functions can be segmented into four groups and they include; nonessential, requisite, core and strategic. Strategic roles propel the long-term competitive edge and directly affect the strategy execution and they must be viewed as valuable organizational assets. A requisite role does the work that the organization cannot function without, but its value can potentially be provided through alternate models of staffing (such as affiliation, contracting and outsourcing). Core roles are fundamental to the organization and have to be viewed as the engine of the business due to their contribution to day to day operations and because of their criticality; these roles must be controlled and owned by the company. Finally, the nonessential roles perform duties which are no longer relevant or a priority to the organization’s strategic direction. To optimize value and investment to the Temasek, leadership development plans should primarily focus on the core and strategic roles that are most significant for the executing strategy. Comprehending what leaders are expected of in relation to the executing strategy enables the company to connect leadership development with investment needs so that the development of leadership is considers as a core organizational process as opposed to a HR program as in the case of Temasek Holdings (Bass, 2010). Since Temasek’s goal is to primarily invest in roles that would generate desirable returns in the course of global financial crisis and organizational instability, these roles should be defined in a disciplined and rigorous manner. Once core and strategic leadership requirements have been outlined, an organization is now in good position to evaluate its present leadership bench strengths on those defined roles. The objective is to highlight the incumbent’s capability to deliver results and execute their investment strategy. Typically these incumbents lie on one of these four profiles (Yukl, 2010). High-potential individuals, who have the desire to develop, however are not ready to take on high roles. An organization must decide what capabilities and behavior require advanced development and establish developmental experiences. Proven performers for instance in the case of Temasek is Goodyear Chip who is ready and willing to take up more responsibility. Organizations must establish what learning opportunities and advancement steps should be developed and act fast (Kotter, 2007). Underperformers: These are people who have the desire to develop. Organization must establish tangible steps to enhance performance or when that cannot be done, they have to ensure that they manage such people to a best fit job and simply steer them out of the company because they may be lacking the aptitude and the skills critical for the job. The last profile is underperformers who have no desire to develop; Temasek must resolve to get them out of the company as fast as possible under the right ethical and legal protocol (Turner, Ireland, Krenus & Pointon, 2008). Recommendations Developing a high-performance organizational culture requires leaders who can inspire the workforce to do past their regular duty requirements, and thus transformational leadership should be adopted the company. Transformational leaders are thoughtful thinkers, risk-takers, daring, inspiring and visionary. They possess charismatic appeal; however charisma alone is not adequate for transforming the manner in which organization functions. To bring the change that is required at Temasek, its transformational leaders should posses the following features; -Inspirational motivation: Leaders should consistently promote set of values, mission and vision to the workforce to ensure that everyone upholds the investment strategy objectives. -Intellectual Stimulation: Leaders should allow their members to be creative and innovative particularly during this time of financial crisis. They should encourage members to come up with new ideas and not publicly criticize their members. -Idealized Influence: Leaders should serve as models modes which their members would want to emulate, and in the processes earns respect and trust from their members based on the actions. -Individualized Consideration: Temasek should have leaders who serve as mentors to their members and offers reward to members for their innovation and creativity. Members are differently treated based on their knowledge and talents. Conclusion The present environment typified by organizational instability, global financial turbulence and uncertainty begs for transformational leadership to be deployed at all organizational levels. Followers of transformational leadership show greater levels of organizational commitment and job satisfaction, and involve in organization citizenship conduct. Having such as devoted team, definitely it will important to consider making attempts towards establishing approaches of transforming Temasek Holdings through leadership. The transactional leadership style is perceived to be inadequate, however not bad, in establishing the optimum leadership potential. It works as the basis for very mature engagements; however leaders need to be cautious not to exclusively practice it, or else it might result in an organizational setting permeated by politics, perks, power and position. References Anderson, L. W., Krathwohl, D. R., (Eds.). (2001). A Taxonomy for Learning, Teaching, and Assessing: A Revision of Bloom's Taxonomy of Educational Objectives: Complete edition, New York: Longman. Bass, B. (2010). The Bass handbook of leadership: Theory, research, and managerial applications. New York, NY: Simon & Schuster. Bennis, W. G., & Nanus, B. (2007). Leaders: The strategies for taking charge. New York, NY: HarperCollins. Kotter, J. P. (2007). The leadership factor. New York, NY: Free Press. Johns C. (1995). The value of reflective practice for nursing. Journal of Clinical Nursing. 4:23- 60. Robbins, S. Bergman, R. Stagg I. and Coulter M. (2009). Foundations of Management 3, Frenchs Forest, NSW: Pearson Education Australia. Turner, K., Ireland, L., Krenus, B., & Pointon, L. (2008). Essential academic skills: Revised Edition, South Melbourne: Oxford University Press. Yukl, G. (2010). Leadership in organizations (7th ed.). Upper Saddle River, NJ: Prentice Hall. Zaleznik, A. (1997). Managers and leaders: Are they different? 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