Leadership Theory and the Positive Effects on an Organization - Case Study Example

«Leadership Theory and the positive effects on an organization» Introduction Leadership is a way of motivating a group to enable them to achieve their aims. It also involves being responsible for the group as a whole. A leader is either appointed by the senior levels of management or elected by the group. However, it has been argued that a leader can not have all the skills required therefore the optimum will be to have as a leader someone who is flexible but when it is required s/he will let the leadership to the others. Leader and Manager – Definitions Although no ultimate definition of leadership exists (Yuki, 2002), the majority of leadership definitions reflect some basic elements, including “group”, “influence” and “goal” (Bryman, 1992). A general definition would be that “a leader is someone who influences a group of people towards the achievement of a goal”. There are 3Ps that are related with the term “leader” and these are: People, Purpose and Person. A leader is a person that is deeply committed to the goal and s/he will try to achieve it even if nobody follows him/her. A leader is someone who has a personal vision and in order to achieve it s/he needs the help of others. The leader should communicate his/her vision in such a way that the followers will share it and the goal will become a common goal. The leader needs the trust of the followers. Some people are more effective than others at influencing people. This effectiveness has been attributed to leadership styles, persuasion skills and the personal attributes of the leader. A leader is someone that brings big changes and innovations, someone who has handled effectively big crises whereas a manager is someone who improves the effectiveness of an organization at a given place and at a controlled course. Leader and Bureaucrat – differences Leader Bureaucrat S/he is always available S/he is “invisible” S/he is a good listener S/he is chatty S/he handles effectively difficult situations S/he avoids situations S/he simplifies situations S/he complicates things S/he is tolerant S/he is intolerant S/he trusts the others S/he does not trust S/he is responsible S/he looks for scapegoats S/he gives recognition to the others S/he presents other people’s work as his/hers S/he prefers the face to face discussions S/he prefers memos and reports S/he is stable S/he is instable S/he admits his/her mistakes S/he “never makes mistakes” and blames others S/he is open S/he is secretive S/he keeps his/her promises S/he never keeps his/her promises S/he has a simply decorated office S/he has a luxurious office S/he takes care of the others S/he thinks that only his/her superiors are right S/he is fair S/he lets the committees take decisions S/he is decisive Unsociable – isolated S/he is social S/he is arrogant Kouzes’s 5 steps theory According to Kouzes,there are 5 steps that someone has to follow in order to develop his/her leadership abilities: Climate – preparation (preparing a creative environment, have open communication channels, taking risks, accepting new solutions) Creation of a vision / share the vision with the others (don’t project the past, look at the future) Development of the others – strengthen the team spirit (create and maintain the team, make other people trust the leader, have substantial communication, train, let others participate in the decision-making) Step by step planning (has visible values, breaks every issue into smaller ones, sets priority goals) Leading and being a model (the leader should be a model to the others) Recognition (encourages, expects a lot, develops a fair performance review system, leads). The theory of characteristics According to this theory, someone is born a leader, therefore executives’selection can be based on their characteristics. The theory of characteristics is not acceptable. However, in recent years a number of researches came up to the following: A leader should have the following characteristics: 1. Intelligence 2. Initiative 3. Self – confidence 4. “Helicopter” – the leader should not only focus on details but s/he should see the whole picture. 5. Emotional maturity i.e. admitting mistakes, to know what s/he wants, being a model to the others. 6. Empathy – be in other people’s shoes even if they disagree with him/her. The theory of style People work differently in accordance to the style of their managers. There are two extreme styles: The Authoritative and the Democratic. The Extreme Democratic Style is the one where the decision makers are the employees. The Extreme Authoritative Style is the one where the decision maker is the leader. This theory has not been verified. It is not clear if productivity leads to the democratic style or vice versa. Theory X and Theory Y The theory X- Y was proposed by Douglas McGregor his 1960 book 'The Human Side Of Enterprise'. According to McGregor that there are two fundamental approaches to managing people. Many managers tend towards theory x, and generally get poor results. Enlightened managers use theory y, which produces better performance and results, and allows people to grow and develop. Theory x ('authoritarian management' style) The average person dislikes work and will avoid it he/she can. Therefore most people must be forced with the threat of punishment to work towards organizational objectives. The average person prefers to be directed; to avoid responsibility; is relatively unambitious, and wants security above all else. theory y ('participative management' style) Effort in work is as natural as work and play. People will apply self-control and self-direction in the pursuit of organisational objectives, without external control or the threat of punishment. Commitment to objectives is a function of rewards associated with their achievement. People usually accept and often seek responsibility. The capacity to use a high degree of imagination, ingenuity and creativity in solving organisational problems is widely, not narrowly, distributed in the population. In industry the intellectual potential of the average person is only partly utilized. Characteristics of the x theory manager What are the characteristics of a Theory X manager? Typically some, most or all of these: results-driven and deadline-driven, to the exclusion of everything else intolerant issues deadlines and ultimatums distant and detached aloof and arrogant elitist short temper shouts issues instructions, directions, edicts issues threats to make people follow instructions demands, never asks does not participate does not team-build unconcerned about staff welfare, or morale proud, sometimes to the point of self-destruction one-way communicator poor listener fundamentally insecure and possibly neurotic anti-social vengeful and recriminatory does not thank or praise withholds rewards, and suppresses pay and remunerations levels scrutinizes expenditure to the point of false economy seeks culprits for failures or shortfalls seeks to apportion blame instead of focusing on learning from the experience and preventing recurrence does not invite or welcome suggestions takes criticism badly and likely to retaliate if from below or peer group poor at proper delegating - but believes they delegate well thinks giving orders is delegating holds on to responsibility but shifts accountability to subordinates relatively unconcerned with investing in anything to gain future improvements unhappy Fiedler's Contingency Theory of Leadership This theory explains that group performance is a result of the interaction of the leadership style and the situational favorableness. "In Fiedler's model, leadership effectiveness is the result of interaction between the style of the leader and the characteristics of the environment in which the leader works" (Gray, Starke 264). "According to Fiedler, an individual's leadership style depends upon his or her personality and is, thus, fixed" (Bedeian, Gleuck 504). In order to classify leadership styles, Fiedler has developed an index called the least-preferred coworker (LPC) scale. ‘Fiedler's logic is that individuals who rate their least preferred coworker in relatively favorable light on these scales derive satisfaction out of interpersonal relationship; those who rate the coworker in a relatively unfavorable light get satisfaction out of successful task performance" (Gray, Starke 264). The second major factor in Fiedler's theory is known as situational favorableness or environmental variable. This basically is defined as the degree a situation enables a leader to exert influence over a group. Fiedler explains that task structure is the second most important factor in determining structural favorableness. He contends that highly structured tasks, which specify how a job is to be done in detail provide a leader with more influences over group actions than do unstructured tasks. Finally, as for position power, leads who have the power to hire and fire, discipline and reward, have more power than those who do not. "According to Fiedler, a task-orientated style of leadership is more effective than a considerate (relationship-orientated) style under extreme situations, that is, when the situations, is either very favorable (certain) or very unfavorable ( uncertain)" (Gannon 361). "The considerate style of leadership seems to be appropriate when the environmental or certain situation is moderately favorable or certain, for example, when (1) leader-member relations are good, (2) the task is unstructured, and (3) position power is weak" (Gannon 362). Fiedler's work is not without critics. Evidence suggests that training and experience have an impact in a leader's effectiveness. There is also some doubt whether the LPC is a true measure of leadership style. Benis’s theory The principle of this theory is : “ the leaders exist for doing the right things”. A leader must: have a vision communicate trust be able to manage himself It is important to pay attention to the following: The biggest problem in leadership is early success. The best quality is the way the leader reacts to the failures. The Vroom Model Leadership is when someone tries to influence someone else. The result is considered successful if the resulting behavior is the desirable one or not. John Adair’s Action Centered Leadership Model Adair set out these core functions of leadership and says they are vital to the Action Centered Leadership model: Planning - seeking information, defining tasks, setting goals. Initiating - briefing, task allocation, setting standards Controlling - maintaining standards, ensuring progress, ongoing decision-making Supporting - individuals' contributions, encouraging, team spirit, reconciling, morale Informing - clarifying tasks and plans, updating, receiving feedback and interpreting Evaluating - feasibility of ideas, performance, enabling self assessment The Action Centred Leadership model must be part of an integrated approach to managing and leading. Bonoma Slevin Model This theory is based on the authority of the decision-making and the on the degree of employees’ participation. In this system there are four styles: The Participative (the leader discusses the issue and the team makes the decisions) The Advisor – Emperor (the leader takes the decisions but s/he takes advice from his/her team) The Emperor (s/he takes the decisions alone) The Shareholder (gives the authority for the decision making to the team). The four leadership style theory The four styles are: The Authoritative (the work performance is important, the human factor comes second) The Paternalistic (the work performance is important but the leader takes care of the personnel) The Participative (the leader shares his authority with the employees) The Non – Interventionist (the leader is not interested neither in the work nor in the people) Leadership styles According to Goleman (2000), the leadership styles are the following: Coercive. This is the least effective since it erodes employees’ pride. The leader here creates terrifies and demeans the employees at the slightest misstep. As a style it can be used in emergency situations. Authoritative. The leader has a vision, s/he motivate people by showing them how their work fits in the vision of the organization. This approach fails when the leader has a team of experts but it is a style which is effective in most business situations. Affiliative. The leader focuses on strong emotional relations and then he receives the benefits i.e. employees loyalty. S/he offers positive feedback. As a style it is positive but it should be better used when the leader wants to improve communication and increase morale. Democratic. The employees have a say in decisions and how they do their work. As a style, it is positive when the leader is uncertain about the best direction to take and when employees are not competent to offer advice. Pacesetting. The leader is very demanding and sets high standards. Employees feel overwhelmed. This style should be used sparingly but it can work well when employees are highly competent. Coaching. The leader encourages the employees and s/he helps them identify their potential. The impact of this style is very positive although from the six styles it is the one used least often. As a style is particularly good when employees are aware of their weaknesses but it does not work well when employees are resistant to change. The influence of leadership on employee’s innovation There are many researches that show the interrelation of leadership and innovation. Sundbo(1996) performed case studies in Danish service firms and concluded that working with a manager of the “entrepreneurial” type strengthened the entrepreneurial activities of employees. Scott and Bruce (1994) demonstrated that when managers expect their employee to be innovative, employees tend to perceive their leader as encouraging and facilitating their innovative efforts and demonstrate more innovative behavior. The behaviors shown by leaders and which help innovation are the following: entrepreneurial style, intellectual stimulation, knowledge diffusion, vision, consultancy, delegation, support for innovation, feedback, recognition, reward, providing resources, monitoring and task assignment (Jong and Den Hartog, 2007). The leader should listen to the employee’s ideas and implement the best of them since when suggestions are never implemented, employees become demotivated. Conclusions According to many studies, the more styles that a leader exhibits the better it is since this way s/he achieves a best climate and business performance. The most effective leader is the one that switches flexibly from one style to the other. Effective leaders apart from improving business performance, they stimulate innovation. Innovation is the hot issue of our time because it is the best tool to differentiate from the competition and achieve competitive advantage. No one is born a leader but s/he can become one from the moment s/he understands his/her strengths and the emotional intelligence competencies which underlie the leadership styles s/he is lacking. References Axelrod, R.H., Block P. (2002), Terms of Engagement: Changing the Way We Change Organizations, Ingram Pub Services. Bedeian, A. G., Gleuck W. F. (1983), Management, Dreyden Press, Chicago. Bryman, A. (1992), Charisma and Leadership in Organizations, Sage, London. Gannon, M. J. (1982) , Management: An Integrated Framework, Little, Brown, Boston. Goleman D. (2000), “ Leadership that gets results”, Harvard Business Review, March – April 2000. Gray, J. L., Starke F., (1988), Organizational Behavior: Concepts and Applications. Merril, Columbus, Ohio. Gregor, Mc D., Cutcher-Gershenfeld (2005), The Human Side of Enterprise,McGraw-Hill Companies. Jong, De P.J.J., Hartog, Den D.N., (2007), “ How leaders influence employees’ innovative behaviour”, European Journal of Innovation Management, Vol. 10, No. 1, pp. 41-64 Koozes, J.M., Posner B.Z. (1995), The Leadership Challenge - How to Keep Getting Extraordinary Things Done in Organizations, Jossey- Bass, San Francisco. Scott, S.G., Bruce, R.A. (1994), “ Determinants of innovative behavior: a path model of individual innovation in the workplace”, Academy of Management Journal, Vol.38 pp. 1442-65. Sundbo, J. (1996), “ The balancing of empowerment: a strategic resource based model of organizing innovation activities in service and low-tech firms”, Technovation, Vol.16 No8, pp 397-409. Yuki, G. (2002), Leadership in Organizations, 5th ed., Prentice-Hall, Englewood Cliffs, NJ. Read More