Effects of Leadership in Contemporary Organization

The practice shows that there is no any single factor that provides a greater benefit for the organization than an effective leadership. Leaders are needed in order to define goals and objectives for the organization, coordination, promote interpersonal contacts with subordinates and determine the optimal, effective solutions of various problems. Obviously, the organization with leaders can achieve all these much faster than an organization without them.

Every action in the organization is associated with the manifestation of leader’s power. Power is shown through the channels of power, which include: the power of coercion, influence, competence, information, official conduct, credibility, authority to award. When an individual affects the behavior of group members without the use of coercive forms of power, it is the manifestation of leadership. Leadership is important for any organization because of the need to select and nominate individuals for leadership positions, most suitable for management functions.

The nature of leadership includes the person’s personal qualities and the environment in which the company has its activities. A good leader should study both these issues for an effective management of the company.

Leadership is a process of influence on individuals or groups of individuals to achieve the goals. Leadership is an important factor in the management of organizational management (Casimir 2006). It is a historically evolved social need of people in the organization of their joint activities.

Leadership involves influence, it occurs among people, those people intentionally desire significant changes, and the changes reflect purposes shared by leaders and followers (Daft 2008).

Leader is a member of organization, who has a high personal status, strong influence on the opinions and behavior of the people in the organization, and carrying out complex functions.

I agree with the statement that an effective business leader is one who is well informed of the latest research which impacts upon leadership and who is also capable of applying this to their own organization within an ethical framework. As it is known, information is very important in modern business activity, it rules the world. The business leader of contemporary organization who is well informed of newest research, new technologies can lead his team and the whole organization to success. The leader’s main task is not just to be aware of appropriate information and be able to apply it. His other functions are: the definition of goals and means of achieving them, coordination of team members, planning their work together, rewards and punishments, informational, controlling, representational function, etc.

The process of influencing people due to the occupied position in the organization is called a formal leadership. However, the official head can not rely only on his position and the related power. The process of influence based on authority, trust, respect, skills or other resources needed by people is called informal leadership. The ideal situation for the management is a harmonious combination of the two foundations of leadership.

Leadership is based on the specific needs of complex organized systems. These include the need of self-ordering and ordering the behavior of individual elements of the system to ensure its life and functional capacity. This ordering is achieved through vertical (management – subordinate) and horizontal (single-level correlative connection, such as division of labor and cooperation) distribution of functions and roles, and especially the allocation of management functions and exercising its structures, which for its efficiency usually requires a hierarchical, pyramidal organization. The top management of such a pyramid is a leader (Ramsey 2004).

The clarity of allocation of leadership position depends on the type of community that makes a part of the system and its relationship with the environment. In systems that are characterized by low group integration and a high degree of autonomy and freedom of the various elements and levels of the organization, functions of a leader are weak. With the increasing of the needs of the system and people in it, the functions of leadership and its structural, institutional segregation increases.

In small groups, based on direct contacts of their members, the institutionalization of the leading positions can not occur. In this situation the main is the individual personality qualities, his ability to unite a group, to lead it. In big groups, the effectiveness of collective action which requires a clear functional role differentiation and specialization, as well as operational management and the rigidity of subordination, the institutionalization and formalization of (formalized) leading positions, giving them a relatively more power are required.

The contemporary organization is of this type of association. It is characterized by the pursuing the certain stable goals, the realization of which requires the coherence of many people, their coordination and regulation on the basis of labor division. As a result of it, the contemporary organizations need the institutionalization of leadership that based on the positions of power goes to the forefront of management (Messeghem 2003).

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Analysis of the nature of leadership shows that it derives from the particular needs and requirements of people and their associations, which the leaders should meet.

Leadership classically is understood as a special quality, a model of human or company’s behavior, providing advanced positions (Ridder 2004).

As a result, the leadership is a new model of management that can ensure the survival of the company in terms of changes. In social science model does not mean the description of natural law or law of the functioning of the company, but a certain set of ideas and beliefs. In sociology of management it is a set of representations of managers, researchers, consultants about the success or failure of organizational management. Leadership is one of the management models in modern business.

Leadership as a management system should encourage the innovative behavior of employees, providing a constant creation and use of new knowledge at all levels of the organization. Thus, there are two features of this management system: providing an innovative behavior of employees; providing leaders at all levels of the organization.

The leaders are those people who have eyes light up from the new ideas, who want to develop and who is interested in everything new. One of the slogans, which can be found in the literature on modern trends in business management, is: “Leadership in each, resulting in the leadership of the organization” (Hall 2001).

Leadership implies autonomy, independence, originality. The leader must demonstrate an innovative behavior, his task is to change, improve efficiency, impact the staff, encouraging them to action.

On the mechanism of the nomination, the leader may be formal and informal. In the first case, he is appointed from headship or be nominated and elected and obtain the official status of the leader. Informal leader can emerge and gain recognition in the collective of the organization because of his distinct individual, social, political, psychological and other qualities. The informal leader having the prestige and influence the behavior of people can be oppositional to a formal leader.

Force and coercion under the leadership is often replaced by an incentive and inspiration. As a result, the impact of leadership approach is based on people’s acceptation of leader’s demands without an explicit or direct manifestation of power. Leaders’ ability to influence people allows him to use the power and authority derived from his followers.

In general, the leadership means that the followers accept the leader as a part of the organization only if he has proved his competence and worth. The leader gets his power from the followers, because they recognize him as a leader. To maintain his position, the leader should give the followers the opportunity to meet their needs, which can not be achieved in another way. In response, they satisfy the need in leadership in the ruling them, as well as providing the necessary support to achieve organizational goals (Kornik 2005).

Leaders can have failures because of different reasons, but the success of leaders comes in many ways if they are of sufficiently similar abilities and skills. Studying the experience of many leaders shows that for the success they need the ability to create an image of the future state of the organization and bring it to the followers. Also a successful leader gives the followers the respective rights and powers to implement the vision expressed in the goal; can recognize his weaknesses and involve necessary resources. For improvement of enthusiasm and commitment, the leader may use the effective communication.

Leader is a key figure in contemporary organization. But not everyone can become a leader. Here are the main three factors that are needed to become a leader of the organization in the modern world:

1. The personal desire to take a higher position and a willingness work for it; his ambition.

2. The ability to work with people. A successful leader is not always technically or economically the most trained professional. His task is to set goals and find the most suitable people to achieve them, ensuring the proper motivation. The ability to organize people to carry out their tasks is one of the most important qualities of the leader in contemporary organization.

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3. The ability to assume responsibility and risk in combination with a high emotional stability. Haven taken the decision, the leader should not be sure in it. The risk is always present in the leader’s work.

4. Leadership experience in rather young age (up to 35 years), when the basic behavioral patterns are formed.

5. The ability to generate and adopt new ideas that increase the efficiency of the collective.

6. The flexibility of behavior, the ability to reject erroneous strategies and adopt new solutions.

7. Good technical and commercial training, according to the specifics of the company.

In the list above the fist places are taken by the personal characteristics of person, well ahead of those that are provided by education or work experience. This indicates the predominant role of psychological factors in management (Plsek 2001).

Successful leaders are characterized by “business” features: self-confidence and the ability to take decisions in an uncertain situation, the instinctive feeling of the most important in each case, the ability to forge the right dating service, effective communication skills, advanced training and the ability to maintain poise and composure.

Leaders – losers are characterized by excessive softness in dealing with people, lack of theoretical and practical training, inability to succinctly and accurately articulate their thoughts, and the lack of attention to their appearance.

T. Peters and R. Waterman identified eight common characteristics based on survey of 62 major successful corporations in search of effective management. For example, 8 general characteristics are:

• Orientation to the energetic fast action;

• Permanent contact with the consumer; autonomy of executants;

• Consideration of people as the main source of growth in productivity and efficiency;

• Increased focus on one (or several) key lines of business;

• Restriction of activities that are familiar and known; dedication to the business;

• Simple forms of management and a small number of administrative personnel;

• Combination in the management of freedom in one (autonomy and entrepreneurial performers and structural units), and stiffness in the other (a few fundamental values; corporate rules and traditions, product reliability, etc.) (Woodruffe 2004).

The principal functions of the leader in contemporary organization usually include:

1. Setting goals. Goals, assigned by the leader must be realistically achievable and at the same time, be prestigious and inspire the staff.

2. The distribution of tasks, organization of joint work and responsibility for its results; recruitment.

3. Controlling the joint work of all members of the team and individual activities of subordinate employees.

4. Planning and coordination of joint activities.

5. Motivation of subordinates, rewards and punishments.

6. Keeping external relations and communications within the organization.

7. Representational functions (Dunne 2010).

The main difficulties in the work of leaders are with carrying out functions associated with psychosocial stress:

• Leadership of subordinates;

• The motivation, finding the appropriate task for everyone;

• Recruiting and firing the staff;

• Conflict solving in the team (Shelton 2002).

The leader of contemporary organization can not always afford to be gentle and kind. In the interest of the team he must be tough, and sometimes insensitive. The most important thing in his work is to cause enthusiasm among subordinates; otherwise it is difficult to achieve high performance of the team.

It is even possible to say that the product of a leader’s activity is a special atmosphere in the team, forcing everyone to work more efficiently. A true leader knows how to make any work interesting and important; he can help employees realize their talents in their work.

Leadership in contemporary organization consists of three components: personal characteristics, socio-professional tools, technology of leadership. The leader can not be an altruist. Selfishness of the leader is manifested in the fact that the achievement of socially significant goals is only the background to solve his personal problems. He is often aggressive; he has a unique resource of thinking, when the world around him is perceived primarily as a resource for achieving the goal.

The socio-professional tools include the power and mentality (social and national peculiarities of character and worldview), education and special training. There are two directions of leader’s power use: self-affirmation and self-realization. The second option is constructive.

The technology of leadership in contemporary organization involves the use of any of three his styles:

1) Aggressive;

2) Informative and technological;

3) Creative (Robbins 2002).

At first style, includes the formation of relations of leader’s superiority over the staff. This is an effective style, but very energy-intensive.

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The second style of leadership involves the creation of leader’s team, his closest aides.

The third style of leadership requires a focus on setting goals and specific targets for their achievements.

In the 1980s the subject of particular interest in the theory of management was the mechanism of leader’s “attraction”, the so-called charisma. “This phenomenon is associated with the person, who has personal qualities that evoke admiration and faith in his ability”(Ritter 2002).

Some experts believe that some leaders such as President Reagan and the famous manager and president of Chrysler Corporation Lee Iacocca, won success through some specific personal qualities, personal charm, attraction, even magnetism. Studies of American scientists distinguish five main factors of behavior that are typical for charismatic leaders:

• focus on key issues in order to involve other people in analyzing, problem-solving and action planning;

• The ability to take risks, but only based on careful calculations of the chances for success;

• Skillful two-way interaction with people through the mechanisms of understanding, empathy, active listening and feedback;

• Demonstration of consistency and reliability in behavior, the open expression of thoughts;

• Expression of active concern for people and strengthening their self-esteem through the mechanism of involvement in the adoption and implementation of important decisions, the formation of high self-esteem and self-esteem (Zenger 1993).

Talent of leadership is based on the whole complex of social and psychological qualities. An important role is played by trust and love of the group members to their leader. The credibility and trust to the leader is recognition of his high merit and competence, recognition of the need, correctness and effectiveness of his actions. This is an internal agreement with a leader to act in accordance with his plants in productivity of organization.

So, in modern business world an effective leadership is not an iron or hard hand, but a high sensitivity to the needs of followers, which is manifested in the development of employees, their involvement in group activities, and assistance in achieving personal goals.

Leaders play a very significant role in contemporary organizations. I agree, that an effective business leader is one who is well informed of the latest research which impacts upon leadership and who is also capable of applying this to their own organization within an ethical framework. Leaders carry out a lot of functions, such as the definition of goals and means of achieving them, coordination of team members, planning their work together, rewards and punishments, also informational, controlling, representational function, etc. The success of any organization depends on its leader. So, he is the one who sets up the goals, knows how to achieve them, how to use his human resources in the best way in order to get success. Thus, an effective leadership is a key to success of contemporary organization.

Work Cited:

Casimir, G., Waldman, D. A., Bartram, T., Yang, S. (Jan. 1. 2006). Trust and the Relationship between Leadership and Follower Performance: Opening the Black Box in Australia and China

Journal of Leadership & Organizational Studies. P. 5.

Daft, R.L. (2008). The Leadership Experience, 4th Ed, Thompson, Australia (RLD). p. 4.

Dunne, S., Spoelstra, S. (Apr. 1. 2010). The Gift of Leadership. Philosophy Today. P. 12.

Hall, B.P. (2001). Values development and learning organizations. Journal of Knowledge Management. No. 1. pp. 19-32.

Kornik, J. (Dec. 1. 2005). With Leaders Like These…Training. p. 8.

Messeghem, K. (May. 1. 2003). Strategic entrepreneurship and managerial activities in SMEs.

International Small Business Journal. P. 18.

Ramsey, R. D. (Nov. 1. 2004). Real Leaders Evolve. Supervision. P. 11.

Ridder, D., Jan, A. (Jan. 1. 2004). Organisational communication and supportive employees.

Human Resource Management Journal. P. 17.

Ritter, T., Wilkinson, I.F. (2002). Measuring network competence: some international evidence. Journal of Business and Industrial Marketing. Vol. 17. No. 2. p. 7.

Shelton, C.D. (October 2002). Leading in the age of paradox: optimizing behavioral style, job fit and cultural cohesion. Leadership and Organization Development Journal. No. 7. pp. 372-379.

Plsek, P. E., Wilson, T. (Sept. 29. 2001). Complexity, leadership, and management in healthcare organizations. British Medical Journal (International edition). p. 14.

Robbins, S.P. (2002). Organizational Behavior. New York: Prentice-Hall. 10th Ed. p. 56.

Woodruffe, C. (Oct. 1. 2004). The psychology of leadership: six main approaches. Training Journal. Pp. 14-15.

Zenger, J.H., Musselwhite, E., Hurson, K., Perrin, C. (1993). Leading Teams: Mastering the New Role. Irvin Professional. pp. 14-15.

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