Analysing management styles through different leaders

This report aims to analyse management styles through two different leaders. Zhang Ruimin, CEO of Haier Group, and Bill Gates, founder and CEO of Microsoft Corporation, are selected to support the analysis. In the body of this report, background of both organisations will be briefly introduced. Then the two leaders’ management styles will be assessed. Furthermore, advantages and disadvantages of two leaders’ management styles will be discussed. Comparison between these two leadership styles will also be addressed in critical analysis section. Through comparison, preferred application of both types of leadership style will be given. Finally, conclusions will be made on the basis of leadership style analysis and comparison.

Introduction

Aim

The aim of this report is to analysis two different leadership styles by evaluating and comparing pros and cons of two leadership styles in contemporary business environment.

Introduction

The role of leaders is to influence their subordinates to achieve organisational goals (Waddel, 2007, p193). Different leaders possess different leadership styles. Leadership styles are affected by many factors such as a leader’s personalities, organisation’s long-run objectives and the competitive environment the company being involved. Each type of styles has its pros and cons. Managers should efficiently apply advantages of styles to their management process. At the same time, they should carefully realise the disadvantages of their managerial power, so that fault decision making will be maximally avoided.

2. Leadership Analysis

2.1 Leader One– Zhang Ruimin

Zhang Ruimin was born in 1949, in Shan Dong Province. He was rewarded a MBA degree after his graduation at University of Science and Technology of China in 1995. He is now holding the title of senior economist and the CEO of Haier Group.

In 1984, Zhang Ruimin’s position was transferred from Qing Dao Home Appliance’s manager to the director of Qingdao Refrigerator Factory. Just after taking office, he started to propose the Branding Strategy. Zhang Ruimin led personnel to seize opportunity for productivity acceleration and succeeded in transforming a small and indebted factory with total debt of RMB1, 470,000 into a China’s top home appliance brand, Haier Group (Haier, 2008).

By 2009, Haier, consisting of 29 manufacturing plants, 8 Research & Development centres and 19 overseas trading companies, became the world fourth-largest white appliances producer. Haier’s high-tech, high quality and high efficiency products are distributed into 160 countries across the world. This gives out that the worth of Haier’s brand has gone beyond $7.5 billion.

As Waddel (2007, p211) mentioned in his book, the function of transformational managers is to let the subordinates be aware of their significant work performance, help them discover their own needs of personal growth and motivate them properly in order to achieve organisational goals (Venkata, 2002, p20). Nevertheless, transactional managers intend to use their reward and coercive power to encourage high performance.

Zhang Ruimin’s leadership style perfectly matches the requirement for a transactional leader. He believes that failing to grasp product quality, the enterprise won’t last long. His toughness on product quality is well-known by most Chinese businessman. Just after he came into Qingdao Refrigerator Factory, he realised that “Quality didn’t even enter into anybody’s mind.”(Business Week Online, 1999) Soon, after a customer complained about the poor quality of their products, he picked up a sledgehammer and told the workers to smash the defective models, also including himself to do so. He shouted angrily “The message got through that there’s no A, B, C, and D quality. There’s only acceptable and unacceptable.” From that day, the lesson deeply imprints to Haier people’s heart and resulted in increasing product quality. However, when the lengthy defectiveness problem was about to solve, undisciplined and inactive personnel became another threat to the enterprise. “The real problem was that workers had no faith in the company and didn’t care,” recalled by Zhang Ruimin. He then realised the importance of incurring competitive spirit and crisis awareness. By bringing the philosophy of survival of the fittest into management, he thinks highly of creating competitive environment to staffs. He often admonishes workers that hardship will lead to prosperity, while comfort will lead to destruction. He also developed Haier’s reward and punishment system by knowing that efficiently use of human resources needs to motivate and constrain employees properly.

The system consists of positive motivate and negative motivate.

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Positive motivate is aiming to reward the employee whose behaviour accords to organisational goals and expectations. For example, there’s a rewarding event named “Tool Naming”. If a front-line worker invents a new tool, the invention will be named as the worker’s first name. Zhang’s Tool Naming builds up workers’ confidence as it can make them proud. More importantly, it successfully breaks down the barriers of activating personnel’s innovative enthusiasm. These lead Haier employees to achieving high performance.

Negative motivate applies when unexpected behaviour occurs. Zhang believes punishment makes employee compunctious and clearheaded. It also helps them adjust to a situation consisting with organisational goals. However, he highlighted managers should leave a clear way out to fallible workers by ideological education, showing concern and instruction, instead of losing their confidence by “knock them down at one stroke”.

Since Zhang Ruimin is skilled not only in reward system development but also in properly managing his coercive power. It can be concluded that Zhang is an experienced and transactional leader.

2.2 Advantages of Transactional Leadership

A strength of transactional leadership is that roles and organisational expectations are clearly defined from leader and followers (Kristina, 2010). Hence it expressly directs the personnel to achieve the organisation’s expected results. Besides, transactional leadership works as a bridge that promotes influencing activities between managers and employees. (Deluga, 1988, p460). Furthermore, in order to motivate workers, the leadership stresses on rewarding well-performed employees. Therefore, leaders can use incentives that encourage high standards and productivity (Mind Tools, n.d).

2.3 Disadvantages of Transactional Leadership

Fault use of transactional leadership would challenge the moral base line of managers. Unethical managers use the power as a tool of seizing chance to gain advantage by tricky. In addition, over emphasising principles may misdirect the firm to purely pursue efficiency maximisation, rather than concerning something profoundly such as employee satisfaction and financial stability. Finally, it may push subordinates down to ethical abyss due to stress, over reward and over punishment.

3.1 Leader Two–Bill Gates

Bill Gates is the CEO of Microsoft Corporation, It is the world’s top and leading software company of personal computers. Bill Gates dropped out from Harvard University , and use all his energies for develepls for every office desktop and home, they started developing software for personal computers. Gates’ foresight regarding personal computer has been lead him to the success of Microsoft enterprise, and the world wide software industry as well. As a leader, Bill Gates actively plays an importaning Microsoft during his junior year. He had started Microsoft in 1975,and work with his friend named Paul Allen. He believes that the personal computer will become a very useful and valuable toot role in strategic decisions making and management at Microsoft.

3.2 Bill Gates’ leadership analysis

Types of Power Possessed by Bill Gates

Legitimate Power

It is based on his position power given by the organization. Employees agree to comply with management authority in return for the benefit of members. The use of legitimate power is appropriate when asking a person to do something that is within the scope of their job (Cerni, T & Curtis, J 2008). Bill Gates Use Rational Persuasion while dealing with higher-level managers, he uses logical arguments with actual evidence to persuade staff to implement his recommended decisions.

Reward Power:

It’s the leader’s ability to influence others with providing tangible or intangible reward (Cerni, T & Curtis, J 2008). Microsoft is very famous for giving big remuneration to its staff. Bill Gates has the most control of evaluating employee’s performance, and determining their pay raises, promotions or other rewards. By using this power, staff would have more motivation to work harder and effectively.

Coercive Power

Coercive power involves punishment to influence compliance. Bill Gates was a autocratic leader, but he never made threats and used coercion power to control others to get personal benefits.

Expert Power

It is based on the leader’s skill and knowledge. An expert makes other people dependent on the leader. People often respect an expert, the few the people who possess an expertise, the more power the individual has. Bill Gates is a master of his knowledge and subject, expertise is never questioned him having the expert power.

Referent Power

It is refer to leader’s personal relationships with subordinates or co-worker. At Microsoft Company, bill gates shows interest and concern to the staff, in return, people get along work with him, that’s the loyalty. People work at Microsoft for a longer time period than most of the other companies.

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Bill Gates’ leader style as Fiedler Model

The one important and major factor in Fiedler’s theory is situational characteristics. Fiedler develops his analysis by focusing on three situational factors, which are leader-member, task structure, position power(Thépot, J 2008). It’s is defined as the degree that a situation enables a leader to implement influence to a group.

Bill Gates found most favourable place where positional power is high because he has most authorities in the company, task structure is also defined as he gives the direction to subordinate to implement his vision, and last leader-member relation is also good (Thépot, J 2008). That’s mean Bill Gates is more likely Task-oriented leader who want performance from his subordinate and work has to be done to achieve the goal of the company.

Leadership style

One of his leadership style is autocratic style .Control is basic to Gate’s nature and his management practice. He is used to focus on detail. He is trying to monopolize the World Wide Web software market and has had legal issue with the department of justice(Thépot, J 2008). Microsoft restricted the ability of its internet partners to deal with its competitors. Also he doesn’t like complaints very much

Another one is delegate style, Bill Gates believes it’s very important to recruit and keep the best gifted people in the software industry. He believed that find and recruit talented software staff is one of the most critical element to improve competitive power in the software industry. It will improve the productivity and creativity. These advantages included the ability to gain new knowledge more quickly, deep familiarity with programming structures ,work more effectively, and the capacity to ask probing question. Though a big number of people asked applied for positions at Microsoft, He thinks that the best gifted people will never apply job directly. So, In Microsoft, The HR managers had to look for the best talent themselves and offer a job .Gives autonomy to his manager, he delegates authority to managers to operate their independent departments.

3.3 Disadvantage of Bill Gates’ leader style

Some people argued that Microsoft was not an creative and innovative company. They thought Bill Gates reformed existing products to satisfy markets needs instead of inventing new ones. Microsoft was not just the market leader, but also the standards provider for the industry, some critics claimed that winning was so important to Gates that he would go to any extent to beat his competitor (Thépot, J 2008). With his aggressive business theory, Gates has been in and out of courtrooms to deal with legal problems almost since Microsoft began. Many of the large technology company have been legally against the actions of Microsoft, including -Opera, APPLE, NETSCAPE, Etc. He has professional will but there is some doubt about humility, although he is philanthropist, and endowed $28 billion dollar in his own Foundation and even promise to donate his 95% wealth as he will have aged but even after a lot of critics is there that he is doing all of it just because of status symbol, he is too centralize and blamed for curbing innovation.

4. Critical Analysis

The first difference between Bill Gates and Zhang Ruimin’s leadership style is that, Bill Gates often presents himself as a powerful and strict leader to rivals and his subordinates, while Zhang Ruimin is a leader who is considering subordinates all the time. Bill Gates has successfully transformed Microsoft into a stable monopolist. To maintain the company’s status, Bill Gates has to focus on creating barriers to new entrants. Besides, he has to strictly control the organization’s production process so that the products can be well accepted by consumers. Both of them require a leader’s toughness on management tactics. In contrast, Zhang Ruimin tends to care his subordinates. Haier’s reward and punishment system emphasizes the importance to build up employee’s confidence. Zhang suggests managers to show their consideration to employees through humanistic reward and punishment, so that workers can feel care from managers and realize the important role in the company.

Bill Gates’ style will work better if the company is a monopolist, as rigid control and toughness on partners and subordinates can create difficulties to the survival of new entrants. Zhang Ruimin’s style will work better if the company is in a strongly competitive environment, as consideration from a leader can win the subordinates’ support. Therefore, it avoids the brain drain.

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The second different of them is the leader’s orientation. Bill gates intends to focus on accomplishment rather than concerning the staff .A task-oriented leader can help the team understand their goal by providing a series of steps that structure their initial meetings. Zhang Ruimin is a leader who posses both of the orientation, including relationship, he also encourages the staff to build trust relationships with each other .They develop a culture that focused on team performance, only the team will bring succeed, or only the team will fail. In my opinion, the best leaders should be good at both orientations (Seckington, L 2003). At start, they indentify the team’s need for structure. once the task-oriented process are on track and team members begin to implement the task, they start to share information or speaking honestly regarding the task, then the leader could move to relationship orientation. He/she should know when to make decisions or yield to the team.

The third different between these two is attitude about complaining from outside or staff. Some time, listen complain is a good thing because the information including them is helpful to improve the business performance, however, always complain about the job or task is a negative behavior that will bring poor work performance and drag down productivity. Bill is a kind of leader dislike complaining. But not for Zhang Ruimin, most of the complain from staff or outside, he listened and accepted some of them as an advice, but also, will take more time to deal with them. In my opinion, complaints are not directly related to the goal which been set, but is good to evaluating the process and performance , so I would take more time to see what others think about the work I did(Seckington, L 2003).

5.Conclusion

The two leader who are from different industry and country have been discussed and analyzed in this essay. No doubts, they both are very successful, but they pose several different regard leadership styles. You might do everything a good leader is supposed to do, but still find himself ineffective. It is necessary that a leader possesses growth and discipline of self (Schmid, H 2006).

In our opinion ,there is no perfect leadership style. Leadership is not all about “styles”. Also, it’s not about force task to staff, and control others to do what you need (Schmid, H 2006). It is about getting close to the team members with kindness so that they will follow you. Therefore, the work of a good leader begins from the inside. Like the famous Aristotle Said, “The hardest victory is victory over self.

A good leader guides a team to the goal, not order the team member to do what he or she want them to do (Seckington, L 2003). They can set the goal ,delegate task, communicate with member with all kinds all problem, and develops the appropriate social and environment (Market L 2000). Good leaders are intelligent and often scholars in their field , they have the willingness to accept suggestion and there are always more stuff to learn (Thépot, J 2008). Top leaders make decisions based on evidence, facts, and simplicity to complex tasks(Venkata, R 2002). They can select the correct decision or strategy for the appropriate situation, Good leaders are well planned ,organized(Zorn, T and Violanti, M 1993).

The Similarities about the two types of Leadership Styles and Zhang Ruimin and Bill Gates are that they’re both styles to help achieve a task, whether there is a short deadline or a longer deadline, and each style has been applied to best suit the situation (Market L 2000). Leadership requires many skills including the ability to learn from the past and look at the future, communicate effectively, create good relationship, organize resource constantly hold the vision for success ethically. Different styles were needed for different situations and each leader needed to know when to exhibit a particular approach (Venkata, R 2002). A good leader will find him or herself shifting between styles according to the people and work they are dealing with.

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