Leadership styles and strategic management

Introduction

Link between strategic management and leadership

Analyse the Impact of management and leadership styles on strategic decision

Evaluate how leadership styles can be adapted to different situation

Example

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INTRODUCTION:

“Managers are who do things right and leaders are who do the right thing”

The general concept according to my understanding from various literature reviews are that “Leaders’ leads people and managers manage all things in organization, furthermore to my concepts the important point is that leaders are the people who bring changes in organizations and managers may be considered as people who sustain the day to day organisational activities.

The main point in this task 1, to explain the link between Leadership and management of an organisation, here I am elaborating leadership and management of Martin McColl, this organisation having approximately 1,000 outlets and 50,000 employees across United Kingdom, the main focus of the company is on Books, Cards, Magazines, Confectionary, Toys and Drinks etc.

Link between strategic management and leadership:

Orders which are passed down from leader and the manager’s role is to pass orders down the ‘chain of command’

A leader is described as someone who has the capacity to create a vision, and to translate it into action and sustain it (Bennis, 1989), this statement can also be justified as there are differences between management and leadership, although functionally they can be combined in the same individual (John Kotter, 1990).

Leadership without Easy Answers by Ronald A. Heifetz, According to “In business, we see an evolution of the concept of leadership. For decades, the term leadership referred to the people who hold top management positions and the functions they serve. In our common usage, it still does. Recently, however, business people have made a difference between leadership and management, and applying leadership has also approached to require delivering a vision and affecting others to understand it through non-coercive means.”

Roosevelt says about link between leaders and managers that People ask the difference between a leader and a boss, the leader works in the open, and the boss in secret. The leader leads and the boss drive.

This report review explains the relationship between leaders and managers that they perform on their capacity within the company, they effort together to complete the targets of company.

Leaders consider about targets and are effective instead of responsive in molding concepts. Managers perform to control choices.

Leaders progress fresh methods to long-standing difficulties and open concerns to new possibilities. A manager is a trouble solver- “what troubles have to be resolved and what are the finest means to complete outcomes?”

Link between leaders and management has robust domination in organization.

Managers

Leadership

Managers administer.

Leaders innovate.

Pursue the established course.

Create the course that managers Pursue.

Safeguard that people complete objects.

Safeguard that people want to complete objects.

Safeguard that people complete objects.

Safeguard that people complete the right objects.

Safeguard that people complete objects better.

Safeguard that people complete better objects.

Source: international business-society management by Tulder, Zwart.

Example in Mc Coll:

As I defined the report review over, I am assessing these reports with the assistance of Martin McColl example.

Martin McColl under the Steve Leadership management is extremely victorious. There is a solid link between leader and management. Leader and managers retains link over video meetings, mails and telephone. Meetings for internal dialogues are maintained to a set of procedures calculated to maximize production, and reduce expense, to complete a result. Centre is on external factors, especially the customer and the impact of the company. Importance in Martin is known always to action that boosts the consumer experience, increases competency or enhances income and profitability. There is a huge understating of mutual regard developed between the leadership group and the teams. People are suitably interested, and satisfied for their functioning which is based upon their rewarded modality. It is valuable to remember here, that not everyone is encouraged by a regulatory reward, or a paradigm trophy. A Great Leader recognizes this, and exercises to their improvement.

On 28 Nov 2010 major snow fall hits Scotland. There were difficulties with many ways. Managers must come on time that’s manager’s responsibility. On the day of snow martin McColl managers arrived on time in all branches while journey was very problematic due to the heavy snow but all managers came on time and have done their work because it was not easy for anyone to come out house. So that was a great success under the best leadership.

Managers are also leaders. Link between leaders and management has strong impact in decision making in organization and this impact effect in every place and every area in McColl such as finance, marketing, policies.

impact of management and leadership style on Strategic Decision:

“Decisions are at the heart of leader success, and at times there are critical moments when they can be difficult”

Organizations all over the world are entirely involved with knowing, finding and rising leadership. Irrespective of the kind of organization, leadership is perceived to perform a dynamic role in forming high performing teams. Leaders are handling greater confronts than ever earlier due to the amplified environmental trouble and the varying nature of the organization. The existing era not only needs having a reasonable edge and constant profitability then again also the safeguarding of ethical values, submitting with civic responsibilities and forming a safe and fair job environment. Leadership is one of the serious elements in improving organizational functioning. Being accountable for the growth and implementation of tactical organizational decisions, leaders must obtain, develop and utilize organizational capitals optimally in manner to carry out the best goods and facilities in the best value of participants. In short, valuable leadership is the major cause of reasonable benefit for every type of establishment (Zhu et al., 2005; Avolio, 1999; Lado et al., 1992; Rowe, 2001)

Decentralised structure:

In Martin McColl autocratic leadership style portrays that manager keeps as much command and decision making authority as possible. These leadership kinds develop several sources of power and impact variously on the levels and extent to which staff consider them as making a impact to organizational decision making. Both the excellence and extent of staff contribution in decision-making cultivates to wane. Each store of McColl has a store manager who can make accurate decisions regarding their store. The store manager is accountable to a regional manager high-ranking managers have time to focus on the most essential decisions.

Collaboration with group members:

Martin McColl leader takes decisions in association with team partners, often using majority rules or similar social decision schemes, whereas a counselling leader takes decisions, after discussion with team fellows about their ideas.

Empowerment:

McColl managers manage to be more concentrated on output targets and attainment of goals. Their influence is based on their capability to complete targets, often as a outcome of quick decisions. Decision taking is a process of empowerment. In McColl stores, encouragement is increase motivation and therefore means that staff output increases.

Knowledge skills:

People lower down the chain have a greater understanding of the environment they work in and the people (customers and colleagues) that they interact with. This knowledge skills and experience may enable them to make more effective decisions than senior managers.

Faster Changes:

Participative styles in McColl enabling departments and their employees to respond faster to changes and new challenges. Whereas it may take senior managers longer to appreciate that business needs have changed.

1.2 Example in Martin McColl:

Martin McColl is UK based corporate company. Martin McColl has a democratic leadership where subordinates involve in decision-making. Company has a board of directors and Steve is a head of directors. It is seen that Martin has authoritarian systems in which their people work as directed.

Merger and acquisition continued in martin McColl. In 1998 Forbuoys acquired Martin Retail Group which was before RS McColl. In 1999 company launch new convenience concept McColl’s. In 2004 the company acquired Dillon stores. In 2005 company changed its name to Martin McColl Retail Group and now martin is the UK’s leading neighbour retailing group.

These changes allow leaders and managers to makes good decisions which give the strength to business. These changes brought many changes such as economic condition been changed, development changed, competition increased this changes brought new markets like stationery stores, specialist card shops. Furthermore supermarkets like Tesco and Sainsbury’s were selling everything that Martin did. So there was a big competition.

Knowledge sharing and strong communication always been there so the strategy of Martin was focus on its core activities and increase, improving buying power sell higher margin items and makes their with sales of newer lines. Company have a wide variety of roles at two head offices in Scotland and Brentwood. Here company centralise core business divisions including Central Retail Operations, Trading, Marketing, Finance, Supply Chain, Business System etc.

In all these above cases, management and leaders realized that changes were occurred and react actively. And in all these cases, they responded only when the competition forced them to do so.

Conclusion:

In taking decision, reflect the right between leadership type and the features of organization. Similar more significant, retain that things change. Look for adjustment. The well and good leaders are who have educated how to move from one leadership type to another as situations needs. If one candidate expresses evidence of being able to shift easily among several of these type, that might tip the balance.

1.3: Leadership style adaptation to different situation:

“Leadership style is the typical approach of a particular person used to lead people.”

Management theorists try to discover one best leadership style for all situations. Researchers say that there are internal and external environments that have significant impact on leader effectiveness. For example in restrained outer opportunities leaders are obliged by competition, legislation, technology, changing markets and restrained resources when taking planned decisions. Fiedler (1967), who led broad research on the situational aspects of leadership efficiency, recognized factors that define what style of leader-implemented best. He assessed connections between test scores of leaders and their function associated to situational issues. The relations-motivated leader performs best where the leader situation is not sound. Task-motivated leaders perform best when the leader-member relation is good and the leader power position is sound. The latter category represents irrelevant member relation and a weak leader who is trying to deal with an inadequate condition. Because that condition is critical, Fiedler’s model would require a task-oriented leader to retain the situation from falling apart. An obvious substitute would be to replace the leader.

To deal with the issue of identical style to the situation, Vroom and Yetton (1973) developed an attitude that deals with leader-subordinate communication. He identified that an applicable style depended on conditional variables involving the leader’s capability, the job structure, and the employees’ enthusiasm to take a solution. They achieved that the main factors in contribution of leader power are the expansion of technical effectiveness and subordinate inspiration or recognition. If technical effectiveness is not critical and inspiration and recognition are not essential, the decisions are taken by the leader solely. On the an other hand, if the technical difficulties are significant but inspiration is low, the leader tries to get more information. When scientific effectiveness is irrelevant but inspiration and recognition are important, delegation gets a valuable method. Lastly, if the difficulty is extraordinary on the practical level and there is a demand for recognition, then the decision is distributed with the team.

The conditional factors of leadership reveal there is frequently, but not essentially optimally, a stability in the performance of a leader when he or she presents in various situations.

As the organization flourishes, team building and the exchange of views become more significant. Involvement tactics are used more often. Now the organizational divisions are produced and the major question is how the job should be divided. This needs discussion. Once the organization is into manufacture, duties are more regular, but time is critical. This asks for more focus. Throughout, indirection, utilization, redirection, and repudiation can be used. The tactics and when to exercise them are summarized in Table 2.

According to Daniel Goleman six styles of leading have different effects on the emotions of the target followers and each style appropriately as the circumstances. Which are:

Visionary leader, Coaching leader, Democratic leader, Affiliative leader, Pace-setting leader, Commanding leader.

As Goleman provides a good framework of leadership styles so I can say that it’s certainly true that no leader always leads in a particular kind but adapts to situations.

Few styles are there counting Goleman styles, these styles are generally the most effective. Attached table 1.

There are five basis of power Coercive power, Reward power, Expert power, legitimate power, and Referent power. These five bases of power presented by French and Raven in 1959. Among the five bases of power there are three bases in which the Steve leadership is founded. These are legitimate power, expert power and referent power. Through his position he is able to lead the company’s people. His practice in the company makes him very knowledgeable of the company and its customers. He encourages people and constantly empowers them. He is also charismatic.

Example of Martin McColl:

Employee Relationship:

As a participating leadership in the past few years Martin performance and profitability have been transformed by employee engagement; which show a clear improving engagement and improving performance of employee. Martin engaged employees indicate they have a good understanding of how to meet customer needs.

Individual employees in companies with strong engagement strategies described to us how their working lives have been transformed for the better.

Customer focused strategy:

Martin leaders have vision that’s why they set objectives of company and have customer retention strategy for this they having promotional sale and delivering newspaper. Martin McColl customers are familiar with what newspapers and magazines in their local store and know the prices they normally paid. As a result, Martin delivering ordered newspapers at their home. Early experiments in began and, by the end of 2008, Martin was making 200 deliveries a week in an area – a very small beginning.

Ethical behaviour:

McColl leadership thinking ethically and behaving ethically in UK that’s why they are taking responsible decisions. They reduced to use of plastic bags. Martin business social liability is anxious with the methods in which an organization surpasses the minimum responsibilities to shareholders stated through regulation and commercial governance. Martin discussing better promotional prices from sellers that small individual chains are incompetent to fit. The goods and service improvement methods of the martin have been significantly re-engineered, to help better management of product developments and more progressive delivery of wide varieties of products to customers. Product interest has determined on enhancing main ranges and presenting quality products. Martin’s innovative modes of proceeding the customer shopping practice, as well as its strengths to branch out into finance and insurance have also capitalized on strong brand reputation

Financial Environment:

Under enormous leadership a robust financial functioning has been revealed by the business over the years, which emphasizes its tactical competences. According to Data observer (2010), Martin is a £ 30billion revenue company verifying an growth of 14.9% when related to 2008. The primary policy that has been implemented by the business is the goods and services customization in contact with the market needs. The competency in functioning of the business over the last era can be abridged with the assistance of progress in subsequent vital indicators (Fame, 2010)

Diversity:

In the past, Martin approach to emerging markets has tended to be almost exclusively from their own perspective, seeing them simply as markets, with little real empathy for the new customers’ needs and desires.

One of the big problems is that the vast majority of senior managers in corporations come from the ”home county but Martin Company and their leaders always ready to cope with such diversity at top executive level.

Environmental factors:

In environmentally as Martin proposed into further and further partnerships or joint ventures – several of which are founded with companies from another cultures. So leaders who are capable to build and maintain such relationships provide their business a useful’ ‘collaborative advantage.

In my opinion, this association consider to business exemplifies a big challenge to Martin. By primary executives Martin verifying good personal relationships in which believe and reciprocal understanding can develop.

Corporate culture

Formative Vision

Firm ways of preparing things

Values system

LEADERSHIP STYLES

Different Situations

Employees relationship

Customer focused

Production

Financial Environment

Diversity

Environmental factors

A good consideration of position teaches leaders to change their type, like a driver changes gear in a car.

Martin’s achievement had come, even though many siren voices, from persevering with its original model, and Bradley, the company’s chief operating of¬cer, puts that down to the personal backing of Windsor, Martin’s low-key chief executive. One solidly based on experience, trust, and judgment.

Conclusion

Vigorous changing situations require distinct leader performances. These performances may take the kind of patterns of behaviours termed leadership style, or leadership strategies. Selecting leaders with different leadership styles is incompetent. It is far more useful to select flexible leaders who have the ability of using different strategies under unusual or various conditions. While the leaders may occasionally learn to change their styles to match the circumstances’, leadership styles are likely to remain relatively stable overall. Therefore, a certain style affects the leaders/managers managerial decisions over extended periods, with a particular style being more efficient under a specific set of circumstance.

Task 2

2

2.1

Review the impact that selected theories of management and leadership have on organizational strategy

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2.2

Create a leadership strategy that supports organizational direction

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Example

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2.1 Impact of Theories on organizational strategy:

When we think about management and leadership, the image comes in our mind that these are powerful vibrant individual who commands people.

Yesterday principles and theories are contemporary and sophisticated. Some overlap and gaps occurs. Current theories fill these gaps and after to study that people are dealing to current situation.

There are many theories of management and leadership, these are defined as:

Behavioural theory, Contingency theory, Functional theory, Great man theory, Situational theory, Trait theory, Transactional theory, Transformational theory.

Major models and approaches are:

Adaptive leadership and appreciative leadership

Many leaders and managers have his or her own quality. Some common quality are:

Autocratic, Bureaucratic, Democratic, and Laissez-faire.

There is a difference between theories and leadership models that leadership theory is an explanation of some aspect of leadership, these are used to better understand and control successful leadership and leadership model is an example for use in a given situation.

Each one has strengths and weaknesses, and each one has its appropriate uses.

Here I am selected two present management and leadership concepts which are Transactional leadership and Transformational Leadership. Transactional and transformational leadership has been of great interest to numerous examiners in the present era. Accepting transformational and transactional leadership manner assists in the success of the organization (Laohavichien et al., 2009). This might be the reason that various writers of the current past believed transactional and transformational leadership as building variables and examined their affiliation with other standard variables. Both transformational leadership and transactional leadership assist in calculating subordinates’ fulfilment with their leaders (Bennett, 2009)

Transformational Leadership:

Transformational leadership theory has captured the interest of many researchers in the field of organizational leadership over the past three decades. This theory was developed by Burns (1978) and later enhanced by Bass (1985, 1998) and others (Avolio & Bass, 1988; Bass & Avolio, 1994; Bennis & Nanus, 1985; Tichy & Devanna, 1986). The major premise of the transformational leadership theory is the leader’s ability to motivate the follower to accomplish more than what the follower planned to accomplish (Krishnan, 2005). Transformational leadership has four components: idealized influence, inspirational motivation, intellectual stimulation, and individualized consideration (Bass, 1985). Research has also shown that transformational leadership impacts employee commitment to organizational change (Yu, Leithwood, & Jantzi, 2002) and organizational conditions (Lam, Wei, Pan, & Chan, 2002). Due to its impact on organizational outcomes, transformational leadership is needed in all organizations (Tucker & Russell, 2004). Transformational leadership identifying and developing core values and unifying purpose, developing leadership and effective followership, utilizing interaction-focused organizational design, and building interconnectedness” (Hickman, 1997, p. 2). Transformational leaders work to carry out around human and financial transformation. Within the organization they generate visions, missions, goals, and a culture that contributes to the ability of individuals, groups, and the organization to “practice its values and serve its purpose” (Hickman, 1997, p. 9). These leaders are reliable leaders who generate commitment from followers which results in a sense of shared purpose (Waddock & Post, 1991). The leader’s ability to inspire, motivate, and foster commitment to a shared purpose is crucial (Bass, Waldman et al., 1987). According to Bass and Avolio, transformational leaders display behaviours associated with five transformational styles wich are attached in table 4.

Organizational culture:

According to Schein (1985, 1995), the leader’s beliefs, values, and assumptions shape the culture of the organization and these beliefs, values, and assumptions are then taught to other members of the organization. Schein also stated that leaders have the power to embed organizational culture through various methods such as mentoring, role modeling, and teaching. Bass and Avolio (1993).

Organizational Vision

Transformational leadership has four components: idealized influence, inspirational motivation, intellectual stimulation, and individualized consideration (Bass, 1985) which involves motivating people, establishing a foundation for leadership authority and integrity, and inspiring a shared vision of the future (Tracey & Hinkin, 1998). Idealized influence and inspirational motivation are connected with the leader’s ability to formulate and articulate a shared vision (Dionne, Yammarino, Atwater, & Spangler, 2004).

Transformational leadership produces a appeal for people to act as a group, in pleasant and non-pressurising culture, yet forever with a hope of excellence. It makes a ‘How To’ handle trouble solving and advancement of new ideas, it lets for initial cautions of imminent threats and weaknesses in the organization and strongly encourages celebration of potencies and insistent pursuit of properly eligible opportunities. Transformational Leadership is established from the top level in the establishment, and encouraged all the means through the management levels. It is magnetic, passionate and encouraging and appeals the outstanding candidates for available positions. Everybody in the establishment certainly realizes the culture, objectives and anticipations of the organization.

Transactional Leadership:

Transactional leadership is galloped on leader supporter contacts. Supporters implement according to the will and trend of the leaders and leaders certainly encourage the efforts. The model is reward which can be adverse like penalizing act, if supporters flop to fulfil with or it can be optimistic like admire and credit, if subordinates obey with the intent and path established by a leader and complete the given goals. Four major aspects of transactional leadership as explained by Schermerhorn et al., (2000) are contingent rewards, dynamic management by exception, and passive management by ammunition.

Example of Bill Gates and Steve Jobs Leadership Styles:

Bill Gates is a businessperson, and chairperson of Microsoft, the software company he established with Paul Allen. Gates is one of the best-recognized entrepreneurs of personal computer revolution.

Steve jobs business magnate and creator. He is famous for being the co-founder and chief executive officer of Apple. Both have Transformational leadership style but both transformation styles have several effects on business in same industry.

Bill Gates and Steve Jobs Leadership style:

Bill Gate’s direction is participative type because he includes his employees in decision taking. He is an adjustable person and he acknowledged his position was to be creative of the business. Whenever needed he carry out professional manager for handling and best form of the company? Gates is a robust and refreshing person his eagerness, diligent

nature, decision making abilities reflect his character. His encouraging power and including his friends to working with him became the success of Microsoft. On the other hand, Steve Job’s leadership is imperial style, because he merges the power, he certainly not given a possibility to employees to involving decision taking. He believes that whatever he do is right. His relation with employees not good, he fails to motivate his personnel in many times. Sometimes he acts as anti-Gates, and sometimes request Microsoft to develop software for his computer. His cocky attitude and lack of management skills became a threat of APPLE’S success.

Impact of Management and leadership theories on organizational strategy.

With the accomplishment of windows, Office Function and Internet explorer Microsoft became a household name and Bill gates turned out as business genius. Bill Gates using the modifies very fast his ingenious notice always busy to emerging goods. Currently Microsoft develops a amount of goods as smartphone including installed Microsoft window.

On the other hand APPLE goes wrong way in 1990s. Because Steve Jobs is very slow to implementing changes that’s the main reason falling the market share. When Jobs realize changes is the only way to survive the market then apple develops innovative iMac which is internet friendly & stylist computer. After sometime Apple expands market. With the iPhone,

Apple TV, and name charges job & co are setting a new course for the outfit

once knows only for its computer.

2.2 Leadership strategy that supports organizational direction:

Transformational leaders also help in the acceptance of organizational change (Bommer et al., 2004) Transactional leadership style provides high satisfaction and organizational identification. (Wu, 2009; Epitropaki and Martin, 2005). Transformational and transactional leadership strategy support organizational direction in term of efficiency, reliability, innovation and adaptation, turnaround leadership etc.

Efficiency:

In apple company Transformational leadership extra applicable at generating and distributing information at the unit and unit levels, while transactional leadership is extra applicable at utilizing knowledge at the organizational standard.

Reliability:

Computers are an significant asset and in today’s budget, more than forever, it’s significant for customers to identify the dependability of the goods they are buying. Apple dependability report, Rescuecom disclosed that Apple counted the maximum t with 700 points, with Panasonic subsequent in on its path with a count of 489. In a downward manner, Lenovo, Toshiba, and HP were registered with counts calculating 393, 299, and 184 points, respectively.

Strategic Direction:

Steve Jobs as the Apple CEO has turned out quite capable at setting tactical direction beside a upcoming timeline. As the calculus of the current criticism on Microsoft’s new Windows 7 operating system reveals Steve Jobs is also very expert and capable at holding back to control the exact timing to strike in a market. Steve Jobs as Apple’s CEO recognizes reasonable burdens and price proposals. Steve Jobs takes it, basic and easy he recognizes that the important role of the CEO is to set tactical direction and long period targets. He appreciates the real reason executive participation generates project success.

Market segmentation strategy:

Under Steve leadership Apple made Market segmentation strategy that enabling a company to drive complete, unified product solutions that are harmonious with messaging, customer outreach, and channel strategies for selling and supporting customers.

In this regard, Apple’s product strategy is a study in market segmentation. Versus merely trying to stuff a product, burrito-style, with as many different features as possible, they target specific user experiences, and build the product around that accordingly.