Evaluate the Role of Leadership in Business

Introduction

This paper strives to evaluate the role of leadership, group behavior, training and development and change management in the broader context of organizational behavior in today’s environment. The new realities that businesses have to face are globalization, changing technology, employees from diverse demographic backgrounds, customers, investors and competition from both global and small innovators.

Globalization brings in new opportunities and challenges in the form of new markets, exchange rate risks, trade and tariff barriers and distribution challenges. Companies have to compete increasingly with global competitors than local ones. Customers also have more options when selecting a product. The internet has made consumers savvier about the products available in the market. Improvements in the transportation and communication network meant that people were better informed and mobile. A classic example is the fall of the iron curtain where the people learned about the lifestyles of other countries which led to the collapse of the socialist countries.

In this environment, Companies need the ability to adapt to the changes that are occurring at lightning speed or as coined by Bill Gates in his book “business @ the speed of thought”. Therefore organizations need to have the proper leaders who can drive the business towards their strategic goals. The other factors that companies need to address are intense competition, nontraditional management practices and societal consciousness of workers.

he role of leadership in business

In literature the influence a leader can exercise over followers in an organization is said to be the type of power he or she can exercise. There are five main sources of power; these are reward power, coercive power, legitimate power, referent and expert power. In addition to these five, finlay suggests that personal power and connection power are also factors that need to be considered. (Mullins, 2005).

In addition to the above followers also look for trustworthyness, visionary, competancy and inspiring qualities in their leaders.

In today’s context although being a visionary leader is second only to being trustworthy it is the quality that leaders world over struggle with. In order to be a forward looking individual it is required to first pay attention to the here and now. A leader needs to know what is going on around him in order for him to focus on what needs to be done to get to the objective. It is not always about meeting deadlines it is looking at what comes after the deadline is met or the project is finished that define visionary leadership.

Leadership Types

A research study undertaken by a consulting firm and reported by Daniel Goleman has identified six types of leadership.

Coercive leaders (do what I tell you)

Authoritative leaders (Come with me)

Affiliative leaders (People Come first)

Democratic leaders (What do you think)

Pacesetting leaders (Do as I do, Now)

Coaching leaders (Try This)

The study has also revealed that only four of these styles had a positive effect on employees.

The authoritative style was found to be the most effective while the affiliative style. The democratic style and the coaching style were seen as positive. However it was also revealed that effective leaders often use more than one of these styles in various proportions in their dealings. (Mullins, 2005) leaders who have mastered the above four styles and are able to apply them in given situations have ben found to be more effective than others who do not. however it does not mean that the other styles of leadership are not effective when used in the correct situation and context. for example the coearcive style (demands immediate compliance) will work well in a crisis situation.

When discussing leadership it is also important to explore the full range leadership model

In the above model the bottom left hand quadrant describes avoidant behavior of leadership, which can be further described as non transacting these type of leaders avoid decisions or intervention relying on time to heal all ills. In the middle of the quadrant is transactional leadership, this is goal and result oriented leadership. And at the top right hand corner is the transformational leadership which broaden and elevate interests of followers.

In today’s organizations with the rapidly changing business environment the leaders we should develop are transformational leaders. The components of a transactional leader are individual consideration, intellectual stimulation, inspirational motivation and idealized behavior. Delving deeper into these components we find that Individual Consideration; values individual needs, shows empathy and encourages continuous improvement. Intellectual stimulation; challenges existing practices, encourages imagination and values intelligence. There is no doubt therefore that all these traits are required from a leader of a organization in this day.

Change management

Change is often said is the only thing that remains constant in organizations, and change management is defined as the process of achieving the smooth implementation of change by planning and introducing it systematically, taking into account the likely hood of being resisted. (Armstrong, 2009)

Most businesses founded during and before the last decade has been steeped in archaic practices that really do not work in the present. Therefore if organizations need to be able to compete in the current business atmosphere companies will need to change the fundamental approaches that they have practiced in the past and embrace new methods of management.

Organizations need to first identify why they need to change, the need for change can manifest itself from two directions one is external factors such as economic, social, environmental, technological, legal and political the other is internal factors such as business processers, objectives, technology, finance and structure. In the current context businesses will more often than not be influenced by external factors than internal factors for change. Once this is identified then the organization needs to have a vision of the final destination and the gaps that need to be filled to reach the final objective.

It is also important for organizations to plan for this change and most importantly make the stakeholders aware of the importance of this change to the organization in order to get their buy in.

Herbert C Kelman explains in his paper on attitude change that there can be three processes of influence.

Compliance – Occurs when an individual accept influence because of a reward or punishment by conforming. Thus the satisfactions derived from compliance are due to a social effect of accepting influence.

Identification – This is said to occur when an individual accepts influence because he wants to establish or maintain a satisfying self defining relationship with another person or group.

Internalization – This occurs when an individual accepts influence because it is intrinsically rewarding, he adopts the behavior because it is congruent with his values. (Kelman, 1958)

Therfore in an organisation which is going through change all the above three types may be encountered, there will be some who comply because of the rewards or punishment some who will comply with change due to their relaqtionship with other members of the organisation and others who find that the change conforms to their values.

Resistance to change

People resist changing whenever they feel that the change is a threat to them. Resistance can take many forms; it can be active, passive, covert, overt, aggressive, timid, individual or organized.

The top ten reasons for resisting change as argued by A. J. Schuler, Psy. D (A. J. Schuler, 2003)

The risk of change is seen as greater than the risk of standing still

People feel connected to other people who are identified with the old way

People have no role models for the new activity

People fear they lack the competence to change

People feel overloaded and overwhelmed

People have a healthy skepticism and want to be sure new ideas are sound

People fear hidden agendas among would-be reformers

People feel the proposed change threatens their notions of themselves

People anticipate a loss of status or quality of life

People genuinely believe that the proposed change is a bad idea.

Dealing with resistance

In order to overcome resistance to change a few methods can be used, foremost is to guarantee the employees security, thereafter a good communication plan of the objectives of the change should be instituted. Concerns of employees should be discussed and understood by the management. Where possible the most vociferous resistors should be made participants of the change management team. Flexibility should be made a key word in the change process. Incentives such as rewards can also be used to change the mind set of employees. In implementing the change an incremental change model can be used where initially small changes are done and once the employees have been removed from their comfort zones a bigger and more radical change is made. There can be several iterations of this with small periods of inactivity to allow the changes to normalize. This approach will make the change more acceptable as employees will be able to experience the benefits of each change prior to proceeding to the next iteration.

Group behavior

In organizations you will find several individuals forming groups to achieve common objectives, these groups or teams can exist as formal or informal groups. When formed as a formal group they will be part of the structure of the organization. In order to appreciate how groups behave we need to consider the nature of the following. (Armstrong, 2009)

formal groups;

informal groups;

the processes that take place within groups;

group ideology;

group cohesion;

group dynamics;

The concept of a reference group and its impact on group members;

The factors that make for group effectiveness.

Formal Groups

Organizations set up formal groups in order to achieve a defined purpose. The composition, size and structure of the group will depend on the nature of the task; if the task is clearly defined the leader may exercise authoritative power which if the task is routine in nature then the leader will exercise a more supportive role in this case the team will operate in democratic manner.

Informal groups

Individuals who have likeness towards each other can set up Informal groups, these can be in the form of book clubs, social club etc. A study conducted by Roethlibeger and Dickson in 1939 has revealed that activities within groups could be regulated by their own conduct and output irrespective of what the administration wanted, however by understanding the processes that take place within groups can help them work for the organization rather that against it.

The processes that take place within a group.

The manner in which groups function are affected by the size of the group and the task at hand, although there can be a greater knowledge base in a large group, individuals in the group may find it difficult to contribute. The main processes that take place in groups are interaction, task and maintenance functions, group ideology, group cohesion, group development and identification. (Armstrong, 2009)

Reference groups

A reference group comprises of a group of people with whom an individual identifies with .Most individuals in an organizations belong to a reference group and this can considerably affect the ways in which they behave. Initially a group member may comply in order to be accepted as part of the group, however as time progresses the norm will get internalized and the individual will react in the same manner whether in the group or not.

Influencing groups

Vince Lombardi arguably the greatest NFL football coach once said “true leadership involves not only the ability to direct people, but the ability to have them embrace your direction” influencing or persuading people to embrace your direction is a multi step process. In order for you to be able to persuade the first thing you need is credibility or trust and be perceived to be a person who keeps his word. The second is to canvass, which is to have a series of exchanges with individuals and groups to obtain a clear view of the concerns, goals and aspirations. The third is to try your ideas on opinion leaders, discuss your ideas with small groups get their feedback and importantly try to get the opinion leaders acceptance of the ideas. Then use the information gathered and reframe the idea in a manner which they see it as their own.

By adopting the approaches discussed in this chapter an organization can obtain the support it needs to change and overcome any resistance by employees to the proposed changes.

Training and Development

Donald Schon argues that the loss of stable state in our society and its institutions means that they are in a process of continuous transformation and that we cannot expect new stable states that will endure for our own lifetimes. Therefore we must become adept at learning. (Smith, 2009)

In order for an organization to able to be competitive in its business space it first needs to understand the skills it needs. Thereafter a gap analysis should be carried out to identify what skills are required In order for the company to reach its goals. All employees want their services to be valuable to their employers and be able to be competitive in the employment market. And the only method of achieving these targets is training and development. It is also a motivating factor for the employee since by being trained on the skills he needs to perform his function he becomes more comfortable and adept at his task. Employers should strive to build in training into their evaluation of the employee so that the final measurement of his performance will be realistic and aligned towards to companies goals and objectives.

Conclusion

In conclusion, an organization of today need a multifaceted approach to shape its organizational behavior. Foremost among them is the need to be able to adapt quickly to change. To do this the organization needs to have visionary leaders who will be able to manage the changes happening around them in ways that keep the motivation of the employees at high levels while maintaining the momentum of the organization. They also need also to focus on other aspects such as environmental, cultural and political issues in order to survive in today’s business environment. Donald Sull a professor of management practice at the London school of business has to say this ” companies that execute on their strategies quickly and effectively tend to construct solid organizational hardware: information systems, corporate priorities, incentives and so forth. But they also program in software – That is the right culture, people and leadership for execution. The most agile organizations share a core set of values: achievement that recognizes and rewards employees for setting and achieving ambitious goals, ownership, team work, creativity and integrity. Most importantly agile organizations translate these principles into action.” (Sull, 2010)

A. J. Schuler, P. D. (2003). resistance to change. Retrieved 02 2, 2011, from www.SchulerSolutions.com: http://www.schulersolutions.com/resistance_to_change.html

Armstrong, m. (2009). Hand Book of Human Resource Practice. london: Kogan Page.

Kelman, H. C. (1958). Compliance identification and internalization. Retrieved 02 02, 2011, from scholar harvard edu: http://scholar.harvard.edu/hckelman/files/Compliance_identification_and_internalization.pdf

leader to leader institute. (2009). The Organisation of the Future. San Francisco: jossey-bass.

Mullins, L. J. (2005). Management and Organisational Behaviour. Essex: Pearson Education limited.

Smith, M. K. (2009, 09 03). donald shon :Learning,reflection and change. Retrieved 02 04, 2011, from www.infed.org: http://www.infed.org/thinkers/et-shon.htm

Sull, D. (2010, 05 23). Organisational Behaviour. Retrieved 02 04, 2011, from Management Quotes: http://www.mgmtquotes.com/subject/organisational+behavior/