Initial part of this report emphasizes on relationship between leadership and strategic management and how can organization get benefited using this dual combination. Organizations are using these concepts in improving organization performance and communication. Leadership styles such as Autocratic, laissez-fare and Participative also supporting leaders achieving organizational objective efficiently which ultimately result into successful accomplishment of organizational goal.
Later part of this report stresses on various leadership theories (Transformational, Transactional, Charismatic, Situational etc) which companies are now implementing in order to refine their organizational process using innovation, flexibility, involvement, effective communication, authorization, contingent rewards and management by exception concepts. Apple is successfully using different leadership theories in order to systemize their processes.
Lastly this report inculcates the future of leadership concept in business context and how companies can implement these concepts in order sustain and survive in the marketplace.
Introduction
Effective leadership helps business in times of peril. It makes the organization successful. Without leadership, organizations lose their way and face stagnancy. Organization give more stress on correctness, completeness and timeliness of work but leadership actually work upon it by different means of effective implementations. Leader stimulates the behavior of employees through proper motivation and gets the work done.
A good leader is one who is capable of making a weak business plan success on the other hand a poor leader can devastate even the best plan. In short, leader can make or break the business. (Mills.D.Q., 2005)
For example, Winston Churchill has a deep insight as well as foresight. He was futuristic and visionary. It is evident from the fact that he warned his fellow Englishman about the upcoming threat from the Hitler’s army. However, most Englishman ignored his warning and felt that instead of involving in war Hitler’s army would be pacified so that war could be avoided. Further, they resented Chuchill for his proactive warning. They did not show faith in his leadership. The resultant of this was that the Englishman had to fight a war with the German army. Had the Englishman been listened to Churchill’s warning they would have been in advantageous position which did not happen. After that incident Churchill was praised for his vision, pro-activeness, and foresight. During the Second World War he became the Prime Minster of England and people of England accepted his leadership (Mills.D.Q., 2005).
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Another wonderful example of Leadership is Harley-Davidson’s Rich Teerlink. During the period of 1980s the USA based motorcycle manufacturer Harley-Davidson had to face stiff competition from its Japanese counterpart such as Yamaha, Honda and Kawasaki. The company was almost outmaneuvered by the competition on every aspect. In order to be in the competition it needed to change and change significantly. Rich Teerlink somehow managed to keep the company financially sound but a lot of other things were simply not in place. The company faced a daunting challenge to improve its systems and procedure along with product innovation to stay in the market.
Rich accepted this challenge and completely changed the internal dynamics of the company. He formed a bottom up (from employees to manager) organization rather than top down (from managers to employees). This move helped the organization in understanding the problems faced by organization quickly and hence it helped the company in solving them quickly as well. During the course of the time this leadership approach of Rich built stronger organization than it was earlier. The employees were motivated and more confident to contribute towards’s organization’s success (Mills.D.Q.2005).
“In the ideal organization, the top level – the leadership – should stay close to the ground.”
(Barth, R. 1993-94)
1. Understand the relationship between strategic management and leadership.
1.1 Explain the link between strategic management and leadership
Strategic Management-
Strategic Management includes evaluating strategic objectives and aims, enhancing organizational performance, communicating and implementing change, developing the performance of the teams, strategic decision making.
Leadership-
It is a process by which one person influences the thoughts, attitudes, and behaviors of others. Leaders set a direction for the rest of us; they help us see what lies ahead; they help us visualize what we might achieve; they encourage us and inspire us.
(Mill, D.Q. 2005)
Leadership is understanding people and involving them to help you do a job. That takes all of the good characteristics, like integrity, dedication of purpose, selflessness, knowledge, skill, implacability, as well as determination not to accept failure.
( Burke, A. 2005)
Relationship –
The word management reflects terms such as efficiency, planning, paperwork, procedures, regulations, control and consistency on the other hand Leadership is associated with the terms like risk taking, dynamic, creative, change and vision. As per some researchers, Leadership is value-laden activity and management is not, Leadership stress in doing the right things whereas management believe in doing things right (Bennis, 1985; Zaleznik, 1983).
Leadership and management complement each other, and both are vital to organizational success. The issue of Leadership versus management takes the middle-of-the-road position. They are considered closely related but possess distinguishable functions. This can be easily understood with help of figure 1-1. This figure shows that Leadership and management are two over-lapping functions.
“Management and leadership complement each other and a person who is a manager should be a leader committed to the customers, employees, suppliers and the community at large”.
(Testa, 2001)
Apple Inc’s Steve Jobs is a perfect example of Leadership and Management. Although, Steve Jobs was a co-founder of Apple Computer but got fired as CEO once at the age of 30. In 1997, he returned back in the company as CEO, and started leading the company. When he realized that Apply was losing market share and finding it difficult to fight with Microsoft, he decided to reinvent every product of Apple offered, and gave a boost to their employees with a most powerful tool of leadership – “momentum” and managed the whole situation successfully. He understood the essentials of leadership and management and accordingly built such environment wherein each and every employee developed hence, drove the entire group’s efforts towards the accomplishment of goals.
He got his employees so accustomed to change that they expect it now. Renovating again and again has become a line of attack for Apple Inc. such as Apple iPod, Nano, iPod Mini, Shuffle, iPod Video etc. Steve Jobs accustomed his employees to change and innovation in such a way that if one day he could walk into Apple proclaim that they are planning to make washing machines then nobody would think he’d have lost his mind rather his employees would jointly say, “Guide us the way, boss” and tell us how to fabricate best washing machines anybody so far made”.
Leadership and globalization
In order to stay ahead in this competitive environment it is very important for any organization to take necessary steps to face both domestic and foreign competition effectively. Organizations should start focusing on global framework for strategic marketing, planning, and operations. Recent development in various aspects such as transportation technologies for electronic data interchange, global communications, international marketing, finance and management, resources planning etc have improved the potential of organizations to operate globally in this aggressive environment. To sustain in this global environment each and every organization needs to have focused global vision and knowledge of various cultures, customs and methods wherein they to function. They also have to understand different regulatory and legal arrangements and aspects of countries in which they intend to operate.
1.2 Analyze the impact of management and leadership styles on strategic decisions.
There are various styles of leadership and management which have an impact on strategic decision of any organization. Leaders uses all these styles, depending on combination of their beliefs, values and preferences, what forces are involved, the situation, organization culture, norms etc. The three major styles of leadership are (U.S. Army Handbook, 1973) which are as follows:-
1.2.1 Autocratic / Authoritarian style – In this style decision-making authority is with the leader. In this style opinions and suggestions from subordinates are not entertained.
1.2.2 Delegative / Laissez-faire / Free reign style – In democratic leadership style decision are taken with the help of suggestion and opinions of group of employees, such as any instruction is given after consulting with the employees.
1.2.3 Participative / Democratic style-
In this style, liberty is given to employees while doing any task e.g. leaders give freedom to deciding their own methods and policies.
1.3 Evaluate how leadership styles can be adapted to different situations
Autocratic style can be used with new employees as they are in a learning stage. The new employees will feel motivated while learning new skills.
Participative style can be used where leader is aware of the problem but don’t have all relevant information on the other hand employees are well-versed with their work and want to participate in organizational decisions.
Delegative style can be used where employees know their work more than leader thus has to take ownership of work. This generally allow leader to easily perform other task.
There is no set pattern to follow and use these leadership styles. A good leader adopts all three styles together as per the situation arises. These styles play a very significant role in strategic decision making of an organization. With the effective use of these styles group can achieve its objective efficiently which ultimately result into successful accomplishment of organizational goal.
For organizational success, leadership is considered prerequisite therefore it is prominent for all types of organizational structure (Khaleelee & Woolf, 1996). Organizational variables like, job satisfaction, organizational commitment and communication are the most significant factors of organizational effectiveness (Lashchinger, 2001) and performance (Riketta, 2002; Kramer, 1999; Angle, 1981). According to some researchers, there is a strong connection between turnover and organizational variables like job satisfaction, organizational commitment and communication (Benkhoff, 1997; Baugh & Roberts, 1994).
For instance, when employees are not satisfied with their work and look forward for other opportunities in order to quit and don’t get opportunities then they generally quit the organization mentally therefore it depicts that job satisfaction, organizational commitment and communication are quite essential while assessing the overall contribution of employees towards the organization.
Leadership and organizational variables are highly correlated (Williams & Hazer, 1986; Lok & Crawford, 1999; 2001). Therefore, with the effective and sensible utilization of Leadership styles, organization can motivate and inspire its employee to large extent in order to achieve organization objective.
2. Apply management and leadership theory to support organizational direction.
2.1 Review the impact that selected theories of management and leadership have on organizational strategy.
2.1.1 Transformational Leadership
“Transactional leadership occurs when one person takes the initiative in making contact with others for the purpose of an exchange of valued things”.
Burns (1978)
There are four components of transformational leadership, which are:
Charisma or idealized influence
Charismatic leaders exhibit assurance and conviction, they take stands and persuade their followers on an emotional level. Robust trust is maintained among followers and leaders which are usually built on the foundation of moral and ethical. These leaders are the Role models for their followers.
Inspirational motivation
These leaders demonstrate clear vision to motivate the followers using inspirational and appealing concepts and theories.
Intellectual stimulation
These leaders promote their followers for creative things and emphasize on building connection with the organization, employees and the objectives. They also encourage them to discover new opportunities and different ways of doing things.
Individualized consideration or individualized attention
These leaders understand followers’ needs and address them properly. They also acknowledge the contribution of followers in the team and always act as a mentor. They foster caring relationships; transformational leaders keep healthy environment so that followers feel free to impart their ideas and opinions so that their unique contributions can be recognized.
2.1.2 Transformational leadership
“Transformational leadership occurs when one or more persons engage with others in such a way that leaders and followers raise one another to higher levels of motivation and morality.”
Burns (1978)
Contingent Reward
Transformational leaders clearly assign the work which is to be accomplished and give reward when results are achieved.
Management by Exception
Passive: In case of intolerable performance or deviation in required standard, transformational leaders take corrective measures or give punishment.
Active: In order to complete the assigned work as per required standards in stipulated time, transformational leaders actively monitors the whole process and uses different methods.
Laissez-Faire Leadership
Laissez-faire leaders leave so much responsibility over their subordinates; they engage themselves in paperwork and try to avoid argumentative situation. They don’t help them in decision making activity and leave them isolated to handle situations independently since they want to keep good relation with everybody.
2.2 Leadership strategy that supports organizational direction.
APPLE Inc. Case Study- Leadership
Apple Inc. is a USA based multinational company which operates in the domain of IT and computers and was founded by Steve Jobs. The company is famous for its products such as Makintosh, iPod, and iPad. The company also has its own operating system. Apple’s products have revolutionized the market of computers with recent iPad 2 being the talk of the market. The company under the leadership of Steve Jobs has shown aggressive product innovation to lead in the market and kept competitors at bay.
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The leadership traits of Steve Jobs are widely acknowledged around the globe. Even at the time when he was on medical leave to fight his cancer he used to give strategic advice to the top level management of the company. This attitude of Jobs was a great source of inspiration for the employees of the organization. He created self belief in his employees and that is the reason that he has given the responsibility of the business development to Tim Cook (current COO).
Steve Jobs is known for his transformational leadership style that he implemented in Apple Inc. Like a transformational leader he was a firm believer of the fact that ‘transforming’ others to help each other, to look out for each other as a source of knowledge and motivation, to be encouraging and harmonious, and to look out for the organization as a whole are the factors important for the success of organization. The vision of Steve Jobs ‘to provide computers as a tool to change the world’ attracted him many of the global talents.
The basic traits of the leadership style of Steve Jobs are mentioned below:
1. Focus
2. Innovation
3. Passion
4. Involvement, and
5. Effective communication
The focus and passion for innovation are one of the primary reasons for Apple’s success. Steve Jobs induced this feeling in employees through effective communication that innovation is the difference between the leader and the follower. The success of this philosophy could easily be understood by the fact that Mac, iPhone, iPod, and iPad all these products changed the dynamics of the computer world with competitors left out with no option but to follow.
During the visit of PARC Research center Steve jobs got an idea that mouse-driven graphical user interface is a future of computing (Bennis & Biederman, 1997), The failure of Xerox Palo Alto Research Center (PARC) (due to lack of transactional leadership) was the reason of Apple success. Steve jobs did what Bob Taylor could not do i.e. creation of Transactional leadership style. Through Transactional leadership style, he created the systems and structures at all the levels of his organization. Through this Steve became successful in generating knowledge at every level within the organization so that employees can work unanimously with single frame of mind for organization success, keeping the vision of the company enacts. And the result of this was Apple Mackintosh.
By looking at the Apple’s success under the brilliance and leadership of Steve Jobs it can be said that transformational leadership theory and transactional leadership theory provide a foundation for understanding how leaders impact the cultivation of knowledge (Bass, 1985; Conger & Kanungo, 1998; House, 1977; House & Aditya, 1997). Conger (1999) recently argued that researchers should continue developing transformational and charismatic leadership theory and doing exploratory research in this area. Exploring the role of leadership styles in converting knowledge into competitive advantages is important to our understanding of leaders and organization.
3. Access and Development of Leadership Requirement
As businesses have entered into the new millennium therefore extensive concentration and observation would be needed to identifying the competencies, ability, skills and knowledge of manager/leader of twenty-first century (Greenberg, 1998; Shapiro, 1999; Kaydo, 2000; Dimitrijevic and Engel, 2002; Kacena, 2002).
Future managers will need to posses both managerial and leadership attributes like tangible, ‘measurable skills’ and intangible, ‘soft-skills’. Tangible skills includes knowledge of concepts, styles, theories, financial procedure etc on the hand intangible skills consist of assurance, adaptability, flexibility, commitment, vision etc. In order to sustain in the competitive environment every organizations should provide learning to their employees, which could be in terms of different management/leadership development programs and approaches therefore they should introduce productive sessions to widen their root, emotionally, conceptually, theoretically and environmentally with the intention to increase their analytical capabilities; to facilitate sellf-awareness” (Byrt, 1989:14). These activities will educate the managers whilst process of management and will simultaneously improve the efficacy in a work place (Jones, Ball and Shellens, 1972:6).
Organizations should develop in-house programs for employees that transmit knowledge which is significant for their success. Such formal management/leadership education programmes offer beneficial skills to future managers/leaders including introspection skills, interpersonal skills, resource allocation, leadership, information processing, conflict resolution, decision-making, entrepreneurial, (Watson, 1993:17).
Future leaders will need to be acquainted with international and global environment so that they can do business effectively and efficiently. Leaders required to be well prepared for external complexities of business (e.g., managing the company’s interface with regulations, trade, political, and media groups etc and several other wide ranges of issues)(Cacioppe, 1998).
4. Conclusion
Leadership skills can be developed through basically two methods. First, self-help e.g. viewing events from multiple perspectives or learning from mistakes, second, formal learning through developmental activities e.g. training courses, developmental assessment, job rotation, seminars, self-directed learning, executive coaching, companies’ own universities, action learning, and partnership with key academics and mentoring.
In-house programs will help developing because of their experiential (practical) learning base. They are generally based effective organizational, leadership and successful self-management leadership competencies e.g. thinking and acting strategically, emotional intelligence, social intelligence, ability to learn, systems thinking. Leadership development programs and sessions help participants to become emotionally intelligent leaders, who are passionate and competent builders of a productive, supportive and enjoyable work environment. It will assist both current leaders and potential leaders to develop their leadership attributes further.
Leadership skills can be developed through basically two methods. First, self-help e.g. viewing events from multiple perspectives or learning from mistakes, second, formal learning through developmental activities e.g. training courses, developmental assessment, job rotation, seminars, self-directed learning, executive coaching, companies’ own universities, action learning, and partnership with key academics and mentoring.
Future leaders will need to be acquainted with international and global environment so that they can do business effectively and efficiently. As explained above Apple is extremely successful by implementing leadership theories in the organization. In order to sustain in the competitive environment every organizations should provide learning to their employees, which could be in terms of different management/leadership development programs and approaches therefore they should introduce productive sessions to widen their root, emotionally, conceptually.
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