Leadership Flashcards
Characteristics of effective leaders: Skilled communicator
Communication is the exchange of information between people and it is vital in a business setting for management to communicate to all employees in an organisation. This can include sharing necessary information (often written communication), in addition to communicating the vision (often verbal communication), which means that employees are well informed and have a strong understanding of the strategic goals that the business wishes to achieve, ultimately creating a shared vision amongst workers. It is of paramount importance that leaders are skilled communicators, as reinforced by studies which have shown that performance of businesses, improve when managerial/leader communication is of a high level. Without a skilled communicator as a leader, employees will lack direction and be confused by instructions given, as well as having a poor understanding of the business strategy and goals. This has the potential to significantly impact motivation, which could subsequently reduce employee output and productivity. A leader must have the ability to not only communicate to employees, but also have a strong encouragement and appreciation for feedback (communication is a two-way process), which they can then use to further develop the business. It is therefore evident that a leader must possess strong communication skills (as seen in Figure 1.1), in order to have a positive influence upon the business.
• Socially aware
In modern times, consumers are becoming increasingly aware of a businesses commitment to being ethical towards employees, communities/consumers and also the environment. It is important that a business leader is socially aware in regards to internal and external social factors. Internal factors that a business may face (e.g. welfare of employees and cultural diversity) are of strong importance. If employees do not have their social needs satisfied (for example, food, accommodation, sleep, a sense of love/belonging), their productivity may be restricted from full potential. Similarly, if a Chinese employee is facing discrimination for their race, they will not be able to fully focus on their performance and may lose motivation and confidence. External social factors that a business may face (e.g. Corporate Social Responsibility, environmental sustainability) will also impact upon business operations. Corporate Social Responsibility involves business activities where a commitment is shown to the community by exceeding societies expectations, rather than just meeting the minimum standard required. In order to improve public image, a leader may modify environmental policies, by offsetting carbon emissions to compensate for pollution generated by operational activities. It is therefore evident that if a leader is “socially aware”, they will have a positive impact upon the business, as reinforced by this statement given by Richard Branson (founder of Virgin group consisting of 400 companies);
“Great businesses are places where problems are solved and lives are improved” – Richard Branson
• Skilled decision maker
A skilled decision maker will involve employees in the decision-making process, which allows the leader to consider a larger variety of ideas, opinions and contributions from employees, whilst simultaneously empowering employees and increasing motivation (due to increased responsibility). A “skilled decision maker” will make informed decisions based on past data/trends, as well as predicted data for the future, which will increase the probability of the decision having a successful outcome. By planning the impact that the decision will have in the future (e.g. financial impact, public image, employee motivation), a leader will ensure that each decision taken will have a positive outcome (benefits outweigh costs). This is a highly significant attribute of a leader which can positively impact a business if informed decisions are made.
• Future thinker
The characteristic of being a ‘future thinker’ is imperative to effective leadership, as it will impact the future ability of a leader to guide its employees in times of change. By analyzing and predicting past trends, it will allow leaders to prepare for and predict future trends and identify a possible downfall/economic slowdown. It may also allow a firm to identify the need to potentially increase output, to cater for increased customer demand. This is achieved through an in-depth analysis of past data/trends and then forecasting this trend into the future, in order to identify new market opportunities in anticipation of a change. A ‘future thinker’ will increase the strategic agility and adaptability of the business and its employees, ultimately reducing the impact of fluctuations in market/economic conditions, consumer confidence etc. A ‘future thinker’ will develop a vision and strategy that will be appropriate for future growth, ultimately improving the prosperity of a firms future.
• Self-discipline
Arguably the most important aspect of leadership is self-reflection and constantly improving and adapting your own personal leadership style. For example, Steve Jobs in his history of being the CEO of Apple, used a variety of different styles to suit different situations and departments. He would constantly seek feedback and reflect on himself, in order to continue improving. This form of self-reflection will ultimately have a positive impact on a business. A leader must have a strong sense of self awareness, which is imperative to understanding your own limitations and using skills of others to build and improve these weaknesses.
• Responsible
Being responsible is about making decisions which will not harm the public image of the business, or impact its future ability to be successful. A responsible leader will plan and consider the impact of decisions prior to making them. As a leader, employees of an organisation will ‘look up’ to this member and it is therefore imperative that the leader serves as a good example of the values and moral virtue, that the firm wishes to uphold.
• Motivational
Motivating employees to exert high levels of effort to achieve the business’s objectives, is a difficult but necessary task for any manager. A motivational leader will set specific goals and provide feedback on achievement, link performance with rewards (such as pay increases/promotion), encourage employee contribution with regards to decision making and finally recognize achievement and match people’s individual skills and personalities to suitable jobs. It is therefore evident that a motivational leader is imperative to achieving the objectives of the organization and therefore ensuring that an organisations employees contribute to their best ability.
a) Compare and contrast the following styles of leadership;
a. Autocratic
As seen in the military, autocratic leadership is a non-democratic leadership style, whereby the leader tends to strongly control authority, determine work methods, make decisions without consulting other members of the workforce (apart from top level management) and prefers little to no subordinate participation. This particular style of leadership was established by classical-scientific management theorists, as they did not believe in delegating work to subordinates, or involving the workforce in the decision making process. Whilst many theorists regard an autocratic leadership style as ‘de-motivating’ (due to the lack of employee involvement in decision making, top down leadership structure and the ‘them and us’ culture that is established as a result of exerting authority over subordinates), it has proven to be an effective method in the military, emergency and defence forces. In these industries, fast and efficient decision making is imperative, as they are often dealing with critical situations such as a bomb threat or a burning building. Having a democratic style with workers at all levels questioning orders, would create dangerous situations in these industries. This particular style of leadership has also been effective in organisations such as Nike, whereby they possess a large portion of employees that are unskilled and dependent on the directions and instructions of their leader. This style of leadership has strict control over the people in the business and often motivates them through monetary means, threats and disciplinary action.
a. Participative/Democratic
A participative/democratic leadership style is one which acknowledges the importance of employee empowerment, through involving workers in the decision-making process and allowing them to have a greater degree of control over their own performance. When making organisational decisions, a democratic leader will usually consult staff, gain feedback from them and consider their views before making a final decision. This is a highly effective method of simultaneously providing overall control to management, whilst also allowing subordinates to participate in key organisational activities. By gaining feedback from employees and sharing ideas, firms will often benefit from improved decision making. Democratic leaders are respected for their ability to develop motivation and enthusiasm within an organisation, as employees are able to express their views and have an input into decision making. This particular leadership style works best in medium sized organisations, where the leader cannot always be present to ensure that employees remain on task and requires that employees use their own initiative to complete tasks to a high level. A democratic leadership style would not be appropriate when dealing with a large workforce, as too many people questioning decision making or instructions, may create confusion. It would also be ineffective in organisations where there is a strong dependence upon clear leadership (e.g. Nike is a large workforce consisting of relatively low skilled workers – democratic leadership would not be appropriate for this type of organisation). In modern times, there is an increasing expectation that firms are ethical with regards to operational activities, consumers and also towards their employees. Theorists such as Elton Mayo, have suggested that employee satisfaction is non-economic, in that workers possess social needs, as well as economic needs (monetary needs). By making employees feel part of a growing democratic team, a leader will see increased job satisfaction and output, ultimately having a positive impact on the businesses public image, profits and productivity.
a. Situational
“New research suggests that the most effective executives use a collection of distinct leadership styles – each in the right measure, at just the right time. Such flexibility is tough to put into action, but it pays off in performance. And better yet, it can be learned!” – Daniel Goleman (author, psychologist and science journalist) - Harvard Business Review.
Situational leadership acknowledges that employees and businesses are different in many ways (e.g. through corporate culture or skill level of employees) and therefore there is no single approach that is most suitable. This style of leadership encourages the leader to no longer rely on one style and instead become agile and efficient in applying different leadership styles (e.g. autocratic, democratic, laissez-faire) to different situations. It has been described as “using the right person and the right style for the right situation”, reinforcing that an effective leader must learn to adapt to different circumstances. For example, in the situation of a financial crisis (e.g. Global Financial Crisis of 2007-2008), an authoritarian style of leadership would be best in order to guide and direct employees, ultimately reducing the impact of the financial crisis on operations. By contrast, a democratic style of leadership may be utilised to improve decision making and continual growth, by gaining valuable ideas from employees. The central factors which will impact the way in which leaders adapt to different situations include; the corporate culture of the organisation, organisational structure (flat/hierarchical structure), skill and motivation levels of subordinates and difficulty level of tasks.
Similarities and differences between the three different leadership styles;
As autocratic leadership assumes that employees are primarily motivated by money and that leaders must control authority, determine work methods, make decisions without consulting other members of the workforce and favor no subordinate participation, it is essentially the polar opposite of participative leadership. This is because a participative/democratic leadership style assumes that employees are motivated by more than just monetary reward, and is also focused upon meeting their social needs, empowerment through delegation of responsibility (through decision making, employee determining their own work practices) and gaining feedback from all employees, to continually develop and grow as a business. A situational style of leadership draws from each leadership style, by using an amalgamation of styles, which are appropriate for various different aspects of a particular situation. The difference between situational leadership and other leadership styles, is that situational leadership incorporates many different techniques. The style of choice depends upon the organization’s environment and the competence and commitment of its followers.
a) In what types of situations would each type of leadership work well or not so well?
Autocratic: Proven to be an effective method in the military, emergency and defence forces. In these industries, fast and efficient decision making is imperative, as they are often dealing with critical situations such as a bomb threat or a burning building. Having a democratic style with workers at all levels questioning orders, would create dangerous situations in these industries. This particular style of leadership has also been effective in organisations such as Nike, whereby they possess a large portion of employees that are unskilled and dependent upon the clear directions and instructions of their leader. This method is the least popular out of all leadership styles, in that it is primarily exclusive to emergency, military and defence forces and has seen much criticism, due to the way in which it ignores the non-physical contributions of workers. For example, in the industries of medicine or teaching, it is difficult to accurately measure physical output, therefore isn’t appropriate for these types of industries.
a) In what types of situations would each type of leadership work well or not so well?
Participative: This particular leadership style works best in small - medium sized organisations, where the leader cannot always be present to ensure that employees remain on task and requires that employees use their own initiative to complete tasks to a high level. A democratic/leadership style would also be appropriate in small-medium sized organisations due to the ability to implement working teams and monitor them, without compromising efficiency and ultimately generating greater creativity and ideas. A democratic leadership style would not be appropriate when dealing with a large workforce, as too many people questioning decision making or instructions, may create confusion. It would also be ineffective in organisations where there is a strong dependence upon clear leadership (e.g. Nike is a large workforce consisting of relatively low skilled workers – democratic leadership would not be appropriate for this type of organisation).
a) In what types of situations would each type of leadership work well or not so well?
Situational leadership: This style of leadership is not confined to any specific business situation, however it has been proven to work more effectively in international organisations, where they are dealing with a wide variety of internal and external factors that are different in each country, demanding different leadership styles (e.g. Apple – has stores across 18 countries as well as an online store in 39 countries). Examples of internal factors may include corporate culture (clearly influenced by cultural background) and the skill level of employees, both of which influence the operations of a business in a global environment. External factors which may demand different leadership styles in different countries, including the degree of economic stability, geographic location, political and religious views, technological development (e.g. cheaper production processes) and free trade agreements between countries. With constantly fluctuating internal and external factors, it is imperative that situational leadership is used in order to best suit the needs of each individual country, its workforce and consumers. Situational leadership also works well in organisations that must assess the situation at hand and then determine what action is required, such as in the emergency, military and defence forces. The leadership style utilised (e.g. autocratic, democratic or a mix of both) will be determined by the urgency of the situation and the degree of risk involved. For example, if a car was on fire and its passengers were trapped inside of it, emergency forces would see this as a priority and leaders would use an autocratic style of leadership to clearly communicate the action plan. If they used a democratic style, they risk having employees at all levels questioning orders, which creates a dangerous work environment. By contrast, if a power pole has fallen down, emergency forces may use a more democratic style of leadership, by developing a plan which acknowledges the ideas of the individual employees and their skills, based on the situation at hand. It is therefore evident that situational leadership is a diverse style which is effective across a broad range of organisations.
Explain which motivational theory each style of leadership is based upon.
Autocratic Leadership
Autocratic leadership is a centralised leadership style, which was inspired by American motivational theorist, Frederick Winsor Taylor (1856-1915). Taylor was also an engineer and investor, which clearly influenced his views that employees should be paid using a ‘piece-rate system’, meaning that employees are paid based on the amount that they produce or sell (output). This motivational theory assumes that “workmen want higher wages” – Taylor; and that money is the primary motivation and incentive in the workforce, with increased output in a ‘piece rate system’ resulting in increased pay. It is said that Taylor believed “man deliberately plans to do as little as possible”, reinforcing the view that people are primarily motivated by monetary incentives (e.g. piece rate system) and suggesting that people should be closely supervised and controlled. Taylor encouraged the use of division of labour, whereby employees would perform highly specific and repetitive tasks, suggesting that this would improve efficiency and output. However, he ignores that employees are motivated by not only monetary incentives (e.g. physiological, social needs) and also that repetitive monotonous tasks often lead to an unmotivated workforce, which would ultimately have an inverse effect of decreasing productivity and efficiency.
The autocratic leadership style also relates to the theories proposed by management specialist Douglas McGregor (1906-1964), who used ‘theory x’ to explain negative management attitudes about the workforce, implying that managers perceive employees as being lazy, lacking ambition and therefore managers are entirely focussed upon maximising output and productivity, rather than developing people within the business organisation. ‘Theory x’ also assumes that workers must be given clear instructions and be strictly controlled and supervised. In this way, ‘theory X’ managers generally take a more autocratic and centralised approach to leadership and management style.
