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Business Administration Leadership: Past, Present & Future The Role of Leadership in Business and Management

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Page 1: Leadership Thesis

Business Administration

Leadership: Past, Present & Future

The Role of Leadership in Business and Management

Page 2: Leadership Thesis

Abstract

The fundamental objective of this research paper is to discuss the concept of leadership

from both theoretical and practical perspectives. Leadership probably is one of the most

essential aspects of business and management. Leadership is a crucial role of managers and it is

in this particular area that the actual distinction in performance and efficiency can be made

evident. This paper predominantly focuses on discussing the various principles of leadership and

how efficient leaders lead their teams. Great leaders of the business history and their leadership

styles are provided as evidences in this paper. Later on an analysis the ethical challenges that are

faced by leaders and potential solutions for such ethical challenges are provided. In addition to

the above, the research also presents the lessons that may be learnt from past leadership and how

efficiently they can be implemented in future leadership.

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ContentsAbstract..........................................................................................................................................2

1. Introduction................................................................................................................................4

1.1 Problem Statement..............................................................................................................9

1.2 Purpose of Research...........................................................................................................9

1.3 Hypotheses..........................................................................................................................9

1.4 Scope of the study...............................................................................................................9

2. Research Methodology...........................................................................................................10

2.1 Research Process..............................................................................................................10

2.2 Aims and Objectives of the Research................................................................................11

2.3 Research Design...............................................................................................................12

3. Literature Review.....................................................................................................................13

Carlson Ghosn.........................................................................................................................19

Arthur C Martinez.....................................................................................................................20

Jacques Nasser.......................................................................................................................20

Jack Welch -.............................................................................................................................20

Giovanni Agnelli.......................................................................................................................24

3.1 Significance...........................................................................................................................44

4. Analysis of Findings.................................................................................................................45

5. Conclusion...............................................................................................................................48

6. Recommendations...................................................................................................................51

7. Appendix..................................................................................................................................53

8. Bibliography.............................................................................................................................54

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1. Introduction

In today’s swiftly changing business milieu, employees go through more work pressure,

greater frustration, and possess higher job expectations. All such various dimensions would tend

to have impact on the larger workplace behavior. In the recent past, awareness has dawned upon

business enterprises that the workforce, i.e. the human resources is its most essential asset

(Frederiksen, Handbook of Organizational Behavioural Management, 1982). Human resources

can be defined as the sum of the inherent capabilities, gained facts and skills as epitomized in the

skill set and propensities of people working in the organization. Aptitude and ability of

employees can be sharpened by training, motivation and proviso of prospects for education and

personal development.

Employees vary as individuals, in their requirements, outlooks and behaviour. When

their requirements are not fulfilled or their objectives are not accomplished, the result is

dissatisfaction of employees. It is not a simple task for the organization to keep all the

employees contented and enthused, at all times. Though this fact may not sound very realistic, it

is very true. There can be various reasons for an employee being discontented. A manager

should spend plenty of time in improving interpersonal relations and motivate the employees to

develop their performance quality. It is very imperative for the superior to know the various

dimensions that motivate an employee as the modern day employees are more knowledgeable

and well-informed. Organizations as well have become more multifaceted than what they were

earlier, and hence require greater managerial skills for efficient management.

Leadership is as learnable as any other expertise. Abilities are an expression of the

personality traits possessed by an individual. However, as extensively accepted, human beings

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are remarkably good at familiarizing their personality to suit the circumstance. Therefore,

leadership skills being the yield of personality traits, the traits can accordingly varied to the

necessary skills and abilities.

In the view to Warren G. Bennis who is known to be the Chairman of the Leadership

Institute that was founded at the University of Southern California, “Failing organizations are

usually over-managed and under-led. ((ICMR), Introduction ot Organizational Behaviour,

2003)”. Even if an organization is conferred with ample resources, in the lack of effective

leadership, it will not be able to operate smoothly. Incompetent leadership worsens employee

confidence; encourages dissatisfaction amid employees and impacts organizational productivity

and efficiency negatively.

Quite a few theorists have tried to characterize leaders and leadership. A leader may be

characterized as a person who creates a clear vision, sets objectives, encourages people and gains

their commitment to accomplish the goals and realize the vision. All theorists have the same

opinion that leaders persuade people and that leadership entails persuading people to strive

towards the desired goals.

Three skills that are primarily used by leaders have been identified, namely,

Technical skills – An individual’s knowledge and ability to make efficient use of any

procedure or system comprises the technical skills. The people working at the

operational and professional levels are obligated to possess certain technical skills.

Human skills – A person’s capability to co-operate with other members of the

organization and work effectively in teams is referred to as human skills. Human

skills also involve developing positive interpersonal relationships, solving people’s

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problems and gaining acceptance of other employees. Effective human skills are an

essential requirement at all levels of the organizational hierarchy and especially for

people in leadership positions.

Conceptual skills – Conceptual skills refer to the capacity of an individual to evaluate

complex situations and to realistically process and understand available information.

It also includes an ability to anticipate the future outcomes of his present-day actions

from the organizational perspective. Additionally, leaders have to define the proper

organizational structure and create long-term strategies and goals.

Communication is one more vital and essential characteristic that a leader needs to

possess. In all organizations, individuals and groups try to exchange ideas, thoughts and

feelings. This communication is vital for sharing information and synchronizing action (Weiss,

2000). Communications is important for accomplishing administrative and organizational

efficacy.

Lack of proper communication results in employees not being aware of what their

colleagues are doing and they will also fail to have no idea about what their goals are, and will

also not be able to evaluate their performance. In the lack of channels of proper communication,

leaders will not be able to give directions to their subordinates and consequently management

will not obtain the information it needs to design plans and take proper decisions.

Participation is one another important skill that a leader needs to possess. Participation

proves beneficial for the organization in numerous ways. It improves the motivation levels of

the workforce, reduces the attrition and absenteeism rate in the organization, and additionally

improves communication within the organizations (Wayne, 1998). In order to make sure that

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there is utmost participation of employees in all the various organizational activities, the

employees must also have the pertinent capabilities and skills, and at the same time they also

need to be interested in that particular area of work.

Participation directs to development in both the quantity and the quality of the

productivity of the organization. Since participation increases the motivation levels of

employees, it augments their involvement in the task that they undertake. The resultant increase

in self-esteem and job satisfaction of the employees consequently results to better cooperation

with colleagues and managers and therefore an overall improvement of organizational

performance. In order to ensure the true participation of employees, it is necessary that the

organization creates such an ambiance and impression so that the employees are both

psychologically and emotionally involved in the organizational activities.

Participation also has numerous other advantages in the form of lessening the attrition

rate and absenteeism level amongst the workforce. A few less concrete benefits that may result

from employee participation are reduction in the number of organizational conflicts, lower stress

levels in the minds of the employees, improved commitment of employees to the

accomplishment of goals, and a smaller amount resistance to change.

The support of top management is very crucial for the growth of the organization which

can be further translated to individual growth. It is very important that organizations emphasize

people-oriented values apart from the performance and profitability of the organization.

As already stated in the above paragraphs, innovation is a new idea that is being applied

to initiating or improving a change in existing processes. This fact is true with respects to

individuals also. Innovation is not just making something new and different from the existing

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processes or products. It is rather a value addition to the existing processes or products. The

structural variables of an organization, the organization culture and the support of the

management to its employees are the three important sources of innovation in organizations.

Structural variables form an important source of innovation. The structure of an

organization has got a profound impact on the innovation that is expected to happen sooner or

later in the organization. Secondly, in innovative organizations, the vision, mission and

strategies of the organization are communicated very clearly to the human resources of the

organization. In such organizations, the employees are never forced to adopt traditional methods

to achieve the goals of the organization. Instead, the management encourages its employees to

take risks, experiment with innovative ideas and assume the responsibility for implementing

them. It is only then that the organization would be able to successfully reach higher heights and

progress well (Bennis, 2009).

For instance, 3M fosters a culture of innovation in its organization. It allows its

employees to spend 15% of their working hours on independent projects. In addition to this, the

key elements that foster innovation at 3M are its capability to recruit and retain talent, construct a

challenging atmosphere within the organization, support knowledge sharing and design suitable

systems for rewarding employees who outperform.

Likewise, management in innovative organizations trains and develops its workforce to

update their talent and acquaintance and encourages them to become idea champs. Idea champs

are those people in an organization who are highly enthusiastic in promoting the ideas they have

newly developed, systematize essential support for their ideas within the organization, overcome

confrontation if any and ensure that the organization implements their ideas or innovations.

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Such individuals succeed in obtaining support for their innovation by communicating their vision

pertaining to its potency, to other members of the organization. Furthermore, their confidence

and dedication plays a predominant role in persuading others about the potential of the

innovation.

1.1 Problem Statement

Leadership can determine the success or failure of an entire organization. However, the

problem is that a lot of modern day organizations forget to focus on effective leadership, team

leadership and managerial ethics. This paper focuses on explaining the drawbacks in modern

day leadership and highlights how leaders can succeed and emerge as exemplary leaders in the

current day challenging environment.

1.2 Purpose of Research

The main purpose of conducting this research is to get an overall understanding of leadership and

at the same time to learn from the past and present mistakes and try implementing the lessons

thus learn in future leadership.

1.3 Hypotheses

Various problems will be investigated during this project, and valuable solutions will be offered

depending on the success of the various researches.

1.4 Scope of the study

A detailed approach to any issue or the topic can help in gaining deeper insights. For any

dissertation to be meaningful, a lot of ground works on the contemporary issues and especially

when working on the key aspects, greater amount of attention has to be paid to the issues which

are to be correlated to the fundamental aspects.

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The key aspect of any academic study is to deeply acknowledge the objectives of the

study. The objective of this paper is to understand the concept of leadership from various

dimensions and also to look at the ethical challenges that may be faced by efficient leaders. In

order to meet this particular objective, research was conducted in relevant areas by reviewing

many secondary sources.

2. Research Methodology

Any researcher faces the dilemma of choosing the most suitable approach to meet the aim

and objectives of a study. Therefore this chapter becomes one of the most important chapters. A

wrong approach may hamper the objectives and significance of the whole study. However, there

is no one best approach to follow since the choosing process is different to each research as well

as the objectives themselves. Besides choosing the most suitable methodology also depends on

the availability of resources among many other variables.

This chapter seeks to discuss and justifies the methodology used in this research. It starts

by describing the research process and its objectives. It moves to explain the most relevant

approaches, research designs, data collection methods and data analysis to finally select the most

suitable methodology for the current research and it finishes by concluding the main points

through the chapter.

2.1 Research Process

The purpose of conducting research is to find a suitable solution for a specific and

immediate problem that is confronted. Research is generally assumed to be a complicated task

which is actually not if the various parts or phases of the research are clearly understood. This

research project is basically a well-structured process which has a beginning, intermediate part

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and the end. In today’s world, research is alternatively being termed as logical reasoning

(Trochim, Philosophy of Research, 2006) ((ICMR), Marketing Management, 2004).

The problem formulation was the first and the most important step of the research

process for this study. The problem was defined clearly and specifically, as an ill-defined

problem may result in an ineffective solution. The problem was properly translated into a

research topic and the reason why the research was required was also spelt out. Secondly, an

exhaustive revision of the theoretical and empirical framework within the related review of

literature was made ((ICMR), Marketing Management, 2004).

The literature review was based on secondary research conducted by reviewing various

journal articles, books, research evidences of past research and of course the worldwide web.

This step helped the study by generating and refining the research objectives. Another step was

the research approach and design of the research. This step covers the way in which data were

collected to answer the research objectives. This step also influenced the data collection method.

The data were collected according to the chosen method. Finally, the data were analyzed,

interpreted and presented in this research.

2.2 Aims and Objectives of the Research

The fundamental objective of this research study, as already stated, is to look at the

aspect of leadership from both theoretical and practical perspectives. A wide research in the

field of leadership is conducted and the findings of the same are presented. Apart from this, a

prominent CEO of an organization of decent size has been personally interviewed in order to

obtain his inputs which are of great help in making this research paper better. The interview with

the results has been given in the later parts of this paper. The objectives should cover question

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regarding the purpose of the study, how the study will be done, the information needs and the

sources of information. It is against this background that the above objective has been

established.

2.3 Research Design

Research is considered to be an effective tool that provides a linkage between the

corporate environment and the organization. It can thus be viewed as a most important tool used

as an aid for tackling various problems. Research can formally defined as the objective and

formal process of systematically obtaining, analyzing and interpreting data for optimal decision

making. Furthermore, the above definition of research lays emphasis on two important aspects.

They are objectivity and systematic process in data collection and analysis. The most important

fact that needs to be borne in mind while conducting research is that the research should not be

influenced by individual views and considerations of the person conducting the research.

Research is generally assumed to be a complicated task which is actually not if the various parts

or phases of the research are clearly understood. A research project is basically a well-structured

process which has a beginning, intermediate part and the end. In today’s world, research is

alternatively being termed as logical reasoning (Trochim, Philosophy of Research, 2006).

In a nutshell, research is a methodical and purposeful study conducted to obtain solutions

for specific problems. Research is a process of collection of data in an organized manner with

subsequent recording and analyzing of such data that will help in an effective decision making

process.

The design of the research plan determines the tools and techniques that are employed for

conducting the research (Language Center - Thailand). Normally the research design is broadly

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classified into exploratory research, descriptive research and causal research (ICMR - ICFAI

Center for Management Research, 2004) (ICMR - ICFAI Center for Management Research,

2004).

Moreover, there also exists an implicit assumption with regards to research that the

ultimate findings of the research should have the actionable quality. To be more specific, the user

of the research data must be able to make use of the results for the purpose of effective decision

making. In absence of such actionable quality, the utility of the research findings would be

significantly undermined.

Exploratory research helps in the identification of the presence of potential opportunities.

The data for this kind of research is obtained from books, journals, magazines etc. Descriptive

research is generally conducted after the above research. As the problem is clearly defined in

exploratory research, the quantum or intensity of the problem is identified in descriptive

research. In causal research, the cause and effect relationships between two variables are

analyzed (ICMR - ICFAI Center for Management Research, 2004).

Research Design can be simply defined as the structure followed by the researcher.

Research Design is the important component or key ingredient which holds all the various

elements of the entire research (Trochim, Introduction to Design, 2006). A design is elaborately

explained by using a succinct data which further enables in the summarization of a complex or

difficult design structure in an efficient manner. A research design consists of various elements

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3. Literature Review

Warren Bennis is a pioneer in leadership who claims that – “Leaders do the right things;

Managers do things right (Bennis, 2009).” In his book ‘On Becoming a Leader’, he collects a set

of lessons from the varied experiences of 28 dissimilar cases of triumphant leadership. It is

recommended that the book is surely read by a broad spectrum of people, since practically every

one of us are drawn in the leadership process either as leaders leading a team or as followers or

as both leaders and followers.

The author examines varied experiences of 28 different cases of leadership and clearly

presents the ‘how’ of leadership. Form the 28 cases of varied leadership experiences, the author

segregates and presents common themes and aspects. In addition to these, the author also

examines the personal characteristics of all the 28 leaders who have been interviewed and the

milieu in which they emerged as successful leaders.

Warren Bennis’ significance is in his research – specifically in his capability to distill

from the experiences of triumphant leaders a set of interesting lessons on how to become a

successful leader. These lessons are further interspersed in the book with the help of subjective

stories and vignettes by the leaders who have actually experienced all those lessons. This format

generates a highly realistic, persuasive, and occasionally a very remarkable presentation that is

very clear and inspiring. The author also strongly remarks that courses for leadership will help

gain skills but not qualities like vision and character which are highly essential to become a

successful leader.

Interestingly, the author depicts in a very delicate way that failure is actually a process of

learning and is nothing to get annoyed of. To substantiate this opinion, he presents his own

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experience of a failed coaching. His experience was portrayed as the case of “Ed” in the first

chapter of the book under the section Surrendering to the Context.

The above case is a personal experience of the author that he presents in the first chapter

of the book. It is about a coaching failure in which that author – Warren Bennis personally takes

part. He fails as a coach to mitigate the coaching. He describes the same as a failure of

leadership. The author highlights specifically that the ability to lead and successful leadership

can be indefinable and that final success is not assured.

This case of “Ed” and his leadership failure makes the discussion extremely truthful.

The case demonstrates that leadership capability can be indescribable; however success is not a

guaranteed aspect. The most significant lesson that Warren Bennis extracts from the 28

successful leadership experiences is the fact is the necessity to make mistakes, which is held by

all successful leaders virtually identical with development and progress.

In addition to the above chapter, there are also other chapters which discuss the aspect of

failure in leadership namely ‘Learning from Adversity’ and ‘Reflection and Resolution’. The

author has provided a wide range of material. One of the most significant messages that the

author has conveyed from these chapters of the book is that, according to him ‘embracing’

failure necessarily means abode on it, reflecting on it and carefully investigating it. The author

strongly believes that if only this sort of considerations to failure would the fruits of such failure

are reaped.

Warren Bennis deals with the age old question of whether can be successfully trained in

leadership skills with a smart and perceptive response. Leadership is impossible to be ‘taught’ in

a classroom setting, however it can obviously be ‘developed’ or possibly more precisely

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‘realized’. One of the most significant catalysts is the espousal of life’s prosperous experiences

principally the adversities.

In page 39 of the book, the author lists certain Core Leadership Ingredients. They are

namely a guiding vision, Passion, Integrity, Trust and Curiosity and daring. According to the

author, individuals who strive continuously to achieve more things in less time, even in the face

of opposition are believed to be ambitious and achievement-oriented. They try to be fast in

everything they do, whether it is eating, talking, walking etc. The pace at which things generally

happen upsets them. They try to involved themselves in more than one thing at a time and are

always busy and find themselves unable to cope with leisure time. They emphasize numbers and

quantity and measure their success in quantitative terms like amount of output produced etc.

The author feels that there is surely a definite difference between a leader and a manger.

The author feels that this difference is similar to the difference between people who master the

situation and those who surrender to the same. The differences between a leader and a manager

were very excellently explained by the author in page 45 of the book. According to him,

““The manager administers, the leader innovates”

" The manager copies, the leader is an original”

" The manager maintains, the leader develops”

" The manager focuses on systems and structure, the leader focuses on people”

" The manager relies on control, the leader inspires trust”

" The manager has a short range view, the leader has a long range perspective”

" The manager asks how and when, the leader asks what and why”

" The manager has eyes always on the bottom line, the leader's eyes are on the horizon”

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" The manager imitates, the leader originates”

" The manager accepts the status quo, the leader challenges it”

" The manager is the classic good soldier, leaders are their own people”

" The manager does things right, the leader does the right thing” (Bennis, 2009)”

Self-knowledge is another aspect which Bennis highlights in this book. He claims that it

is necessary for people to re-evaluate the way they learn things. The traditional methods of

teaching restrain a person’s ability to develop a sense of individuality (Bennis, 2009). He also

believes that innovative learning that comprises of anticipation, listening to others and

participation is effective in developing one’s individuality. Reinforcement is better approaches

for making individuals learn. Hence reinforcing is considered to be the most vital principle of

learning. Reinforcement necessarily means ‘to strengthen’, and it particularly refers to a

stimulus which strengthens the probability of a particular response being repeated.

In the opinion of the author, innovative learning necessitates the person to be aware of his

past and present, and consequently try and differentiate both and figure out the difference in

situations and thereby figure out or anticipate what may possibly happen in the near future and

getting prepared for handling the same. The author also feels that participation is a very crucial

aspect of innovative learning. For true participation to happen, it is vital for a person to be both

mentally and psychologically involved in the activity. It is not just the skill of the person, but his

entire self which has to be involved in the activity. A person who is engrossed completely in an

activity is said to be involved in the activity with complete ego. On the contrary, an individual

who only makes use of his skills to perform the activity without any emotional involvement in it

is said to be involved in the activity just for the sake of doing the task.

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The author also portrays the significant role played by organizations in fostering

leadership and innovative learning and thinking among their employees. Organizations can be

designed and managed in numerous ways. There exists the bureaucratic way which is

characterized by innumerable set of rules, regulations and standard operating norms, and there

also exists the informal management method which on the contrary is characterized by flexibility

in rules and norms. Though individuals differ in various aspects, they generally share certain

common rudiments. Learning is one such rudiment. The process of learning is the same for all

individuals but the variation lies in what they actually learn which further depends on the

environment in which they are present. The vital aspect that is associated with learning is the

understanding of individual behavior. The behavior of individuals working in an organization is

known as learned behavior. They tend to align their individual behavior with the group to which

they belong in the organization. It is noticed that learning brings about noteworthy changes in

the behavior of an individual.

The support of top management is very crucial for the growth of the organization which

can be further translated to individual growth. It is very important that organizations emphasize

people-oriented values apart from the performance and profitability of the organization.

As already stated in the above paragraphs, innovation is a new idea that is being applied

to initiating or improving a change in existing processes. This fact is true with respects to

individuals also. Innovation is not just making something new and different from the existing

processes or products. It is rather a value addition to the existing processes or products. The

structural variables of an organization, the organization culture and the support of the

management to its employees are the three important sources of innovation in organizations.

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Similarly, in the book ‘Organizational Behavior and Design’, Barry Cushway and Derek

Lodge present the difference between being a manager and an efficient leader. They argue that

management and leadership are not one and same and leadership is a distinct process that is

mastered through experience as the time passes. Various theories of leadership are presented in

brief in order to give an overview of the theoretical perspective of the concept.

Here are few examples of some remarkable leaders in the business world. The styles followed

by them are also discussed.

Carlson Ghosn – The Cost Killer: Known as ‘le cost killer’, a name acquired during his days

as Chief Operating Officer at Renault, Ghosn engineered the turnaround at Nissan with a ‘scrap-

and-build’ philosophy. The main problem at Nissan was the increased debt burden of the

company. Carlos Ghosn had to take drastic measures with respect to cost cutting and debt

reduction in order implement his turnaround strategy and review (Riès, 2005) Nissan from its

perilous situation. Additionally, according to Carlos Ghosn – “Financial operations worldwide

will be centralized to develop global financial controls and risk management. Nissan, which has

share holdings in 1,394 companies, will realize assets by selling-off its interests on the basis of a

cost/benefit analysis. In addition, Nissan will dispose of land, securities and non-core assets and

will adopt an inventory reduction program to decrease by 30 percent its inventory-to-sales level

by 2002 (Nissan, 2004).”As already mentioned, cost cutting and debt reduction were the two

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things that helped Nissan to overcome its bad state and regain its position in the global auto

industry.

The first objective: Trim the flab at Nissan by eliminating 21,000 jobs, closing five

factories, and demanding 20% savings from suppliers. Then came an overhaul of the product

line and the introduction of such winners as the new March subcompact – Japan’s third best-

selling model in May – and the Altima Sedan, winner of the 2002 North American Car of the

Year Award (Prasad, 2005).

Arthur C Martinez – The Customers’ King: When he moved from vice-chairman of Saks

Fifth Avenue to the top spot at Sears in 1992, he uncovered problems deeply enough to require

two complete transformations. To effect change, he killed the revered Sears catalo that was

losing so much money. He also closed dozens of unprofitable stores, shed long-time affiliates

like Coldwell Banker and Allstate and oversaw a cautious entry into e-commerce. The story of

Sears has always been a storey of American Retailing (Prasad, 2005).

Jacques Nasser – Jacques Nasser, former CEO of Ford Motors had successfully led his

organization through a massive transformation process cruising through the various factors that

resisted change. A company spread across 200countries and employing approximately 340, 000

employees

Jack Welch - Another great leader who has great respects and also has set an example for

corporate leaders is Jack Welch, CEO of GE. “All CEOs want to emulate Jack Welch. They

won’t be able to, but they’ll come closer if they listen carefully to what he has to say” says

Warren Buffet, The Chairman of Berkshire Hathaway about Jack Welch. Such is the charisma

this tough but humane Chairman of GE carries about him. Jack Welch created history as the

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Chairman of General Electric. From a modest post PhD beginning in the 1960s at the lowest end

of the ladder the climb to the top was one of great journeys ever witnessed by an individual in

the corporate history that was every witnessed.

One of the earliest things that really created a deep impact on the young Jack Welch was

at the end of a hockey game, which his team ended losing - the seventh loss in a row! The

statement was made in front of the whole team at the team lockers – “If you don’t know how to

lose, you’ll never know how to win. If you don’t know this, you shouldn’t be playing.” As Jack

Welch says his mother – Grace Welch was the most influential person in his life. Her passion,

energy, and love had deep impact on Jack Welch’s life. Jack Welch acknowledges that his

leadership style, “a way of getting the best out of people,” he owes it to his mother – Grace

Welch.

Some of the management skills that Jack Welch is known for - competing hard to win,

facing reality, keeping the motivation levels high in people by alternating between the stick and

the glove handling, monitoring people to ensure compliance and setting how much to stretch a

person were among things that Welch learnt at a very tender age from his mother. He had a

equally impressive father – a ticket collector on a local train – who with his unique way of work

impressed on the young Welch to work hard – very hard, never miss a day of work and ensure

that each and every customer – traveler on the train was greeted – these were the things that

Hack Welch did practice at his work place too.

Jack Welch started is work at GE in 1960 with a modest pay of $10,500 per year. He

learnt one of his earliest corporate lessons early that year itself – To get out of the pile – winning

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teams come from differentiation, reward the best, remove the weakest and always fight to raise

the bar.

One of the biggest lessons that Jack Welch learnt in his earlier days at GE was that to

succeed one had to really take chances and risks – big calculated risks and the company culture

permitted him to do just that. Jack Welch actually blew up a factory or at least a good part of it in

his fourth year at GE. He was promptly called the next day, what he envisaged could be his last

day at GE, much to his surprise the entire analysis was so intellectual and bereft of emotion that

he came out positively from that experience. And this experience taught him a very important

lesson – not to push someone down when their chips are down or when they have made a

mistake – that does not mean that any one at GE can do anything and get away with it. If the

circumstances were genuine and the mistake was totally unintentional it was to accept the

mistake. The GE team that came up the $ 10.95 halaracs electric bulb – a product that never

came into the market – was actually rewarded with promotions and increments – in the GE

language “it is ok to take swing, even a big swing and miss it.”

This Chairman of GE – one of the most admired CEOs in the world also had his flop

sides. During the time when he was being considered for a promotion to head a $400 million

business division, the GE head of Human Resources noted that Jack Welch over reacts

emotionally that too to criticism and gets too personally involved in the work. He was also noted

to have the anti-establishment attitude. This was attributed to his youthfulness and immaturity.

Jack Welch himself acknowledges the appraisal, which he found much later, was actually very

useful in his career.

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Jack Welch was not the type of manager that one would expect – he did not like to sit

down to have one to one canned conversations. He did not like them. He was quick; he was blunt

to the point where people actually considered him to be rude. He actually encouraged conflict – a

controlled type of conflict which he calls as the constructive conflict. Jack Welch was known not

to hide his feelings or emotions. He created a very informal but a very strong work environment

for people to perform. People who did not fit into this environment either left the organization

themselves or were asked to leave. Bad hires that did not perform also met with the same fate.

Pompous and arrogant people did not have a place on his team. But those who delivered took

home great bonuses and excellent salaries. He says he kicked, but also hugged! (Welch, 2001)

One of the simplest things that Jack Welch always practiced was to be himself. He had

developed some habits and he stuck by them throughout his entire stint with GE. For instance he

was always in a habit of send a person a handwritten note after a meeting on what was decided in

the meeting. He had a habit of intolerance with people. Who did not fit in to his scheme of things

had to go. But the way he handled it was that there was never a shock or disappointment the way

he handled things. He made sure that people knew it before he actually told them to leave.

Jack Welch believed that the human element in an organization was quite crucial for the

success of the company. Possibly this was one of the first and the best things that he did in his

first address to the Wall Street as the Chairman of GE. He envisioned that to be a winner an

organization not only had to be no. 1 or no.2 in the business but also be in touch with the

intangible soft values. Welch spoke of the need to permeate every mind at GE with attitude, with

atmosphere that would encourage them to see things as they are and deal with the way it is and

not the way it ought to be.

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Jack Welch was characteristic for his leadership style of lecturing, questioning and

cajoling people to perform and perform at their best. While he did push his people to outperform

themselves he also had set clear limits to how much he would push each one of them and also

himself. He had a very strong entrepreneurial vision of balancing the short term and the long

term. Also in the modern day management parlance referred to balancing the operational

excellence and strategic excellence. (Prabhat, 1997)

Jack Welch’s style has always been hands on performance. He was always known to

question – not be anti-establishment but to be sure of what he was getting into. He was one

person who was known to ask questions even if they were uncomfortable. The questions were

aimed to get more clarity for himself and his team members rather than cynical questions. He

was clear on what he wanted and went about pursuing it in an unabashed manner. Jack Welch is

known to motivate the entire GE team by the sheer force of his personality and unbridled passion

for winning the game of business. To all this energy and vitality add attention to detail that very

many CEOs at his level lack. Then you have Jack Welch, the one and only Jack Welch that

history of human kind has ever witnessed.

Giovanni Agnelli- The Italian automotive giant FIAT was started and grew gradually under

the leadership of Giovanni Agnelli, one of the members of the Agnelli family. He strengthened

the production system of the group’s automobile division. It was as a result of his leadership and

innovative strategies; FIAT was able to offer many vehicles at affordable prices through FIAT

Auto. After the death of Giovanni Agnelli, Vittorio Valletta who was a close associate of the

later and also a key executive of FIAT Auto became the chairman of the group. It was under his

leadership that the group entered an era of prosperity. Fiat’s era of prosperity can be largely

attributed to the growth of the mass car market in Italy during the 1950s (Piper, 2002).

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Right kind of leadership makes the difference. Most often a turnaround situation may

demand an outsider to lead the company out of the mess. But sometimes, all it may need is a

change in leadership style rather than a change in the leadership.

Leadership is as learnable as any other skill. Skills are a manifestation of the personality

traits of a person. But, as widely accepted, human beings are exceptionally good at adapting

their personality to suit the occasion. So, leadership skills being the output of personality traits,

the traits can be varied to the required skills ((ICMR), Introduction to Orgnizational Behavior,

2003). The resources of an organization along with its skills create unique competencies. These

competencies in turn help the firm identify its cost or differentiation advantages and ultimately

create value for the customers (Harvard Business Review, 2000). The resources of the

organization include its brand value, technological know-how, patents and trademarks, and the

goodwill of the firm in the market. The skills include its service quality, employee skills and

efficiencies (Andrew C. Gross et al, 1998).

The ability to integrate and co-ordinate the various groups of the organization is the main

aim of core competency of the leader. It is not sufficient if a company hires brilliant people of a

particular technology. This does not simply mean that the company has gained core competence.

It is only when there is effective coordination among all the groups involved in developing a

particular product and bringing it into the market, the firm is said to have gained core

competence.

In today’s rapidly changing business environment, employees undergo more stress,

greater frustration, and have higher job expectations. These factors may affect their

performance. Lately, realization has dawned upon organizations that employees, i.e. human

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resources are its most important asset (Frederiksen, Handbook of Organizational Behavioural

Management, 1982). Human resources is the sum of the innate capabilities, acquired facts and

skills as exemplified in the skill set and aptitudes of people in the organization. Talent and skill

of employees can be honed by training, motivation and provision of opportunities for education

and personal development.

A manager who acts as a leader should spend ample time in improving interpersonal

relations and direct the employees to improve their quality of performance. It is very important

for the superior to know the factors that motivate an employee since the present day employees

are more educated and more demanding. Organizations too have become more complex than

what they were earlier, and so require greater managerial skills for effective management.

Several theorists have attempted to define leaders and leadership. A leader may be

defined as a person who establishes vision, sets goal, motivates people and obtains their

commitment to achieve the goals and realize the vision. All theorists do agree that leaders

influence people and that leadership involves influencing people to work toward desired goals

((ICMR), Introduction ot Organizational Behaviour, 2003).

Three skills that are primarily used by leaders have been identified, namely,

Technical skills – A person’s knowledge and ability to make effective use of any

process or technique constitutes the technical skills. The employees at operational

and professional levels are required to have certain technical skills.

Human skills – An individual’s ability to co-operate with other members of the

organization and work effectively in teams is referred to as human skills. Human

skills also involve developing positive interpersonal relationships, solving people’s

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problems and gaining acceptance of other employees. Effective human skills are an

essential requirement at all levels of the organizational hierarchy and especially for

people in leadership positions.

Conceptual skills – Conceptual skills refer to the ability of an individual to analyze

complex situations and to rationally process and interpret available information. It

also encompasses an ability to foresee the future consequences of his present-day

actions from the organizational point of view. Further, managers have to define

proper organizational structure and establish long-term plans and goals.

Leadership Theories – As already mentioned above, there are numerous theories that attempt to

explain the qualities required by an individual in order to be an efficient leader. However, it is

pertinent to be noted that not all the various theories that exist about leadership are in agreement

with each other and hence this tend to result in confusion ((ICMR), Introduction to Orgnizational

Behavior, 2003).

There are predominantly three very important theories of leadership that attempt to

describe leadership. They are-

Personality Trait theories,

Behavior Theories, &

Contingency Theories

According to the trait theory of leadership, leaders tend to possess certain personality

traits that non-leaders do not have at all, or possibly possess to a very minimal extent. The

behavioral leadership theories tend to explain the behavioral aspects of leaders. Although both

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the above mentioned theories tried to explain leadership in a very simple manner, they were

however very severely criticized for the reason that those theories were not supported by valid

evidence and they had oversimplified assumptions regarding the conceptual framework of

leadership.

Further research into this field resulted in the development of contingency theories which

tried to overcome the inadequacies of the above mentioned two theories and also eliminated the

contradictions involved in them.

Trait Theories

Initial research into the field of leadership concentrated on leaders’ traits. It was believed

that there was something unique about a person which enabled him to emerge as a leader. Early

researchers studied the personality characteristics that make an individual a leader and concluded

that leaders are born and are not made ((ICMR), Introduction ot Organizational Behaviour,

2003). For instance, famous personalities in history like Napoleon and Alexander were natural

leaders and would have become leaders even if they were made to face situations which were

different from what they actually were confronted with. The researchers also suggested leaders

possessed some personality traits that are unique and essential for efficient leadership.

One famous trait theory is the “great person” theory of leadership. According to this

particular theory, leadership traits can be acquired with the help of training and experience.

They may not be inborn. Contrary to the former view that leaders are born with certain unique

qualities, this theory led to a more pragmatic approach to leadership because it believed that

leaders might not be born with the desired traits. The ‘great person theory’ was perhaps the

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outcome of the influence of the behavioral psychologists, who believed that leadership traits can

possibly be acquired through learning and experience.

Research aimed at identifying universal traits which are applicable to all leaders has not

resulted in crucial results. The only common trait identified among all leaders was intelligence.

Research to recognize the physical traits associated with leadership was also likewise

unsuccessful. Actually, some researchers also found that many followers are taller, stronger and

even brighter than their leaders.

Application of trait theory to organizational leadership yielded even more puzzling

results. Researchers were not able to support the theory with the traits as noticed in successful

leaders. Hence, modern researchers have now started to highlight on multiple intelligences of

leaders rather than trying to segregate a single most important characteristic leading to their

success. For example, some researchers who studied the emotional intelligence of leaders have

suggested that empathy, graciousness, optimism and ability to read non-verbal cues in a social

setup are important characteristics of successful leaders. “Some general characteristics found in

leaders are ambition, high levels of energy, desired to lead, honesty, integrity, self-confidence,

intelligences, and job-relevant knowledge ((ICMR), Introduction to Orgnizational Behavior,

2003).”

Nonetheless, trait approaches only give a portrayal of leaders; they have little logical or

prognostic value. Although some researchers still clinch to the trait theory of leadership, their

emphasis has changed from personality traits to job related skills.

Behavioral Theories

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As the trait theories did not successfully establish the connection between traits and

effective leadership, researchers shifted their focus to the behavioral aspects of leadership,

paying particular attention to successful leaders. They attempted to recognize the behaviors that

were unique to leaders, and which distinguished them from non-leaders or non-performers.

“This was quite hard, as it involved finding out answers to questions such as – “If most of the

leaders they study are found to be autocratic, and distant from the follower, would it mean that

this kind of behavior is a characteristic of all successful leaders? ((ICMR), Introduction to

Orgnizational Behavior, 2003)”

The four important theories that fall into the above category are the Ohio State Studies,

the University of Michigan Studies, the Managerial Grid and the Scandinavian studies. All of

these four studies sought to identify the specific behaviors demonstrated by effective leaders.

According to the researchers and psychologists of behavioral research, the personality

development of an individual is influenced by a variety of factors such as inheritance,

surroundings, maturation and knowledge.

Even as personality theorists have the same opinion that human personality development

takes place in different stages of physiological and psychological development, they vary in the

opinion about the precise stages and the kind of development that takes place at each and every

stage. Several of them disagree that there are no precise stages with respect to individual

personality development process and consider that personality development is an incessant

process and that the level of development is based mainly on the available opportunities of

learning opportunities.

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The outcomes of all the above mentioned four studies were almost similar. The Ohio

State studies resulted in the conclusion that a “high-high” type of leadership resulted in obtaining

best performance results. This is because the researchers found out that people who scored high

on both dimensions of initiating structure and consideration were able to attain higher levels of

performance and job satisfaction compared to those individuals who scored low on either one of

the above stated dimensions or even both of them. Conversely, the researches of this particular

study also found that some exceptional situations in which the above type of leadership may not

even be successful ((ICMR), Introduction to Orgnizational Behavior, 2003).

The researchers and psychologists concluded that leaders who are more employee-

oriented achieve higher levels of job satisfaction and increased levels of group productivity.

Production-oriented leaders attain low levels of job satisfaction and group productivity.

Similarly the managerial grid and Scandinavian studies resulted in the evolution of a new

dimension of behavioral leadership named the development-oriented behavior. According to

these researchers, leaders who possessed the above dimension tend to constantly experiment with

new ideas and practices and embrace change and this new dimension is believed to be the most

important aspect of modern day effective leaders.

All the above studies also concluded that development-oriented leaders are more

competent than leaders who fail to have this particular dimension in their approach and style.

Though the above theories were successful in explaining leadership in terms of behavior and also

successfully established a relationship between behavior of leaders and the performance of their

subordinates, they somehow failed to take into account the situational aspect and the various

situational factors that influenced the success or failure of leaders to a large extent. This

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ultimately led to the emergence of yet another leadership theory – the Contingency theory of

leadership.

Contingency Theories

The contingency theory postulates that leaders have to change their style depending on

the situation they face. The theories also suggest that a leader should carefully analyze the

nature of the situation before deciding on the appropriate style of leadership to be adopted. The

five Contingency theories are discussed below:

Fiedler’s contingency model

One of the earliest models of contingency leadership was developed by Fred Fiedler and

his associates. Their model was an extension of some of the existing theories relating to task and

employee orientation. According to this model, leadership requirements depend on the situation

facing the leader; and the choice of the most appropriate style of leadership depends on whether

the overall situation is favourable or unfavourable to the leader. The favourability or

unfavourability of a particular situation to a leader is analyzed based on the following

parameters:

Fiedler's Contingency Theory of Leadership – Pictorial representation

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The above can be further explained as follows:

According to Fiedler, a situation is considered to be favourable to the leader if the scores on all

the three dimensions namely- leader-member relationships, degree of task structure and the

leader’s position are high. Fiedler proposed that a task-oriented, tough-natured leadership style

is most effective in highly favourable or highly unfavourable situations and a people-oriented,

lenient type of leadership style is most appropriate in moderately favourable or unfavourable

situations ((ICMR), Introduction to Orgnizational Behavior, 2003).

Fiedler’s model suggests that managers must examine the situation in which they operate

in terms of people, task, and organization; they must adapt their style of leadership to suit the

situation. If this is not possible, they must at least attempt to change the elements of job to suit

their style.

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Leader- member relationship

This indicates the extent to which a leader is accepted by his subordinates. If a leader has

friction with majority of his subordinates, then he scores low on this dimension.

Degree of task structure

This refers to the degree to which the task on hand can be performed efficiently by

following a particular method.

The leader’s position

It refers to the power or formal authority that the leader is bestowed within the

organization. For instance, a leader has more power if he is in a position to decide the rewards

and incentives for his followers.

The LPC scale requires leaders to think of all the persons with whom they would have

worked, and then requires them to describe the one person with they would have worked the

least well with. That particular individual may be someone from the past or somebody with

whom the leader is currently working with. From a scale of 1 through 8, leader are asked to

describe this person on a series of bipolar scales such as those shown below:

Unfriendly 1 2 3 4 5 6 7 8 Friendly

Uncooperative 1 2 3 4 5 6 7 8 Cooperative

Hostile 1 2 3 4 5 6 7 8 Supportive

Guarded 1 2 3 4 5 6 7 8 Open

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A situation is considered to be favourable to the leader if the scores on all the three

dimensions are high. Feidler proposed that a task – oriented, tough natured leadership style is

most effective in highly favourable or highly unfavourable situations and a people – oriented,

lenient type of leadership style is most appropriate in moderately favourable situations.

Fiedler’s model suggests that managers must examine the situation in which they operate

in terms of people, task, and organization; they must adapt their style of leadership to suit the

situation. If this is not possible, they must attempt to change the elements of job to suit their

style.

Hersey and Blanchard’s situational theory

According to the situational leadership or ‘Life – Cycle’ model developed by Hersey and

Blanchard, the maturity level of the subordinate plays a major role in influencing the leadership

style of the superior. The ability of an employee to carry out a particular task and the extent to

which he is motivated to perform the task constitutes the maturity of an individual. According to

this model of situational leadership, it is felt that leaders have to adopt different leadership styles

to deal with different subordinates.

Blanchard and Hersey characterised leadership style in terms of the amount of direction

and of support that the leader gives to his or her followers, and so created a simple grid:

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Directing (Telling) - Leaders define the roles and tasks of the 'follower', and supervise them

closely.  They make decision are the same are announced by them and this type of

communication turns out to be predominantly one-way communication.

Coaching (Selling) - Leaders still define roles and tasks, but seeks ideas and suggestions

from the follower.  Decisions remain the leader's right, however communication is probably two-

way.

Supporting (Participating) - Leaders dictate day-to-day decisions like task allocation and

processes, to the subordinates. However the leader eases the process of decisions, but control is

with the subordinate.

Delegating – Though Leaders are still involved in decision making and problem-solving, the

control remains with the subordinate. 

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The strength of the Hersey Blanchard model lies in its simplicity and intuitive appeal.

Moreover, the model emphasizes on an individual’s capabilities and willingness to undertake a

specific task.

Leader – Member Exchange Theory

Most of the traditional theories of leadership assume that leaders treat all subordinates alike.

But George Green and his associates observed that leaders often act very differently towards

different subordinates. This observation led to the development of the Leader – Member

Exchange (LMX) Theory of leadership.

According to the LMX theory, leaders establish a special relationship with a small group of

subordinates, usually early in their interaction. This usually happens due to the time constraint

the leader faces in interacting with all his subordinates. “This small group of subordinates is

referred to as the in – group while the rest are referred to as the out – group. The leaders trust

the subordinates, who belong to in – groups, give them more attention, interact with them

frequently and offer them special privileges. The out – group people get less of the leaders’ time

and attention ((ICMR), Introduction to Orgnizational Behavior, 2003).” Also, the interaction

between the leader and the out – group people are less frequent and purely formal.

Although the theory does not explain the basis on which a leader chooses his in – group

members, research has indicated that generally, leaders favour the people who have attitudes and

personality characteristics that are similar to their own, and tend to select such people as in –

group members. The other factors that form the basis of selection into the in – group include a

higher level of competence than the out – group members and extroversion. The LMX theory

suggests that the in – group people receive high performance ratings and thus obtain rewards and

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promotions quickly. As a result, there is greater satisfaction with the leader and lower turnover

among the in – group members when compared to the out – group members.

Leadership – participation model

In the year 1973, Victor Vroom and Philip Yetton conducted extensive research on

leadership behaviour to establish the relationship between leadership behaviour and decision

making style. Different situations demand different activities – routine and non – routine – to be

carried out by leaders and thus, according to Vroom and Yetton, leaders have to adjust their

behaviour depending on the situation.

The leadership – participation model proposed by Vroom and Yetton is normative in that it

provides a sequential set of rules that can be followed fro ascertaining the type and amount of

participation required in decision making in different situations. Initially, the model consisted of

a decision tree with seven contingencies and five alternative leadership styles. Later Vroom

worked with another academician, Arthur Jago and came up with a revised model. The new

model included twelve contingencies instead of seven as in the original mode which are also

called problem attributes.

Problem Attributes

According to the model, the leader should assess a situation in terms of its problem attributes.

The twelve problem attributes can be broadly classified into two classes – decision – quality and

employee – acceptance. Decision – quality dimensions include cost considerations, information

availability, and nature of problem structure i.e. structured or unstructured. Employee –

acceptance can have dimensions like need for commitment, their prior approval, congruence of

their goals with that of the organization, and conflict among the employees.

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Other factors considered in the model are level of subordinate information, time constraints,

geographical distance between subordinates, leader’s motivation to conserve time, and, finally,

the leader’s motivation to develop subordinates. Even complex and apparently unique problems

can be identified and categorized into known classes, if the problems are analyzed using the

above format.

The leadership – participation model is based on three important assumptions which are yet

to be proved: Leaders can precisely classify problems by following the decision tree format;

leaders are willing to and capable of adapting their styles to suit the situation; employees accept

the leader’s classification of the situation and changing his leadership style from situation to

situation.

Path – goal theory

The path – goal theory is a contingency model of leadership developed by Robert House.

It borrows some important elements from the Ohio State Studies and the expectancy theory of

motivation. According to the path – goal theory, the leader should provide required support and

guidance to his followers and help them achieve organizational goals. He should establish

individual or group goals for employees that are compatible with the broad organizational goals.

Thus, the leader defines the path to achieve goals; he also removes any obstructions that come in

the way of employee achieving these goals.

Further, according to the path – goal theory, the behaviour of a leader is acceptable to

subordinates as long as:

The subordinates find that the satisfaction of their needs such as promotion and

rewards depends on their effective performance, and

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They are provided with guidance, support and rewards that are needed are

effective performance.

Robert House suggested four types of leadership with the help of the path – goal theory.

They are:

1. Directive Leadership – The leader clearly tells his subordinate what is expected

from them, gives them work schedules and instructs them on ‘how’ to do the task.

This is similar to the initiating structure defined in the Ohio State Studies.

2. Supportive Leadership – The leader tries to focus and be attentive to the needs

and problems of his subordinates. This is similar to the consideration dimension

identified in the Ohio State Studies.

3. Participative Leadership – The leader discusses and takes into account the

suggestion and comments made by his subordinates before making a decision.

4. Achievement – oriented Leadership – The leader attempts to develop his

subordinates by giving them challenging tasks and higher responsibilities, and

encouraging them perform at their best.

The path – goal theory suggests that the leader’s behaviour depends on two contingency

variables – environmental factors like the formal authority system or the nature of task, and

personal characteristics of the subordinates like experience, capabilities and locus of control. Job

satisfaction and employee performance are likely to be influenced positively when the leader

compensates for things lacking in the work – environment or in the employee.

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Contrary to the Fiedler’s Contingency Model of Leadership which states that a particular

leader consistently exhibits a particular behaviour which does not change over time or with the

situation, Robert House assumes that a leader behaves in a flexible manner. He suggests that a

leader can exhibit any of the above types of behaviours depending on the situation. Also, this

theory suggests that the leader’s behaviour depends on two contingency variables namely the

environmental factors like the formal system of authority or the nature of the task, and secondly

the personal characteristics of the subordinates like experience, capabilities and locus of control

etc. Job satisfaction and employee performance are likely to be influenced positively when the

leader compensates for things lacking in the work environment or in the employee. House also

proposes that the leader’s behaviour will be ineffective if it is not consistent with the

environment and subordinate’s characteristics.

Communication is one more important and crucial feature that a leader needs to possess.

In all organizations, individuals and groups attempt to exchange ideas, feelings and emotions.

This communication is essential for sharing information and coordinating action (Weiss, 2000).

Communications is essential for achieving managerial and organizational effectiveness.

Without communication, employees will not be aware of what their co-workers are

doing, will not have any idea about what their goals are, and will not be able to assess their

performance. In the absence of channels of communication, supervisors will not be able to give

instructions to their subordinates and management will not receive the information it requires to

develop plans and take decisions.

In all organizations, individuals and groups attempt to exchange ideas, feelings and

emotions. This communication is essential for sharing information and coordinating action.

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Communications is essential for achieving managerial and organizational effectiveness. Without

communication, employees will not be aware of what their co-workers are doing, will not have

any idea about what their goals are, and will not be able to assess their performance.

In the absence of channels of communication, supervisors will not be able to give

instructions to their subordinates and management will not receive the information it requires to

develop plans and take decisions. In other words, the basic management functions of planning,

organizing, directing and controlling cannot be carried out without communication.

Participation is one another crucial skill that a leader needs to possess. Participation

proves advantageous for the organization in many ways. It improves the quality and quantity of

output. It also improves the motivation levels of employees, decreases the rate of attrition and

absenteeism, and improves communication within the organizations (Wayne, 1998). In order to

ensure the maximum participation of employees in all the activities of the organization, the

employees must also have the relevant abilities and skills, and should be interested in that

particular area of work.

Participation, according to Warren Bennis, motivates people to contribute their ideas and

creative suggestions. In a participative environment, people try to use their capabilities and

creativity to accomplish the goals. Participation is also believed to enhance the motivation levels

of an individual by offering them the opportunities to offer their opinions and suggestions for the

accomplishment of the organizational goals and in the process giving them the direction to

accomplish their own individual goals. Hence, the contribution aspect of participation offers

individual a path to accomplish their goals. However it is very pertinent to note that,

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participation is a social process wherein individuals are actually involved with their profession

and attempt to make the same a successful affair.

An interview that has been conducted with Mr. Thomas Graf, CEO of Century Casinos,

Inc. also yielded very useful information regarding leadership. According to him, only if strong

leadership is established, employees will follow and help building strong business organizations.

The interviewee told me from his experience that he tries to motivate his employees on a daily

basis and tries that they ultimately keep the organizations goals in mind. Make them feel like

they belong to something bigger. Even he feels that leadership is a learnable skill, an opinion

that matches with the views of Warren Bennis. However, Mr. Thomas Graf feels that the same is

not easy. He feels that in order to learn leadership skills from the get go a lot of passion, time and

the willingness to learn and evolve must be taken into consideration. When asked if leaders are a

creation of situations and circumstances, Mr. Thomas replied in a very skeptical manner. He

said both Yes and No as his answers. The clarification that he gave for such an answer is that

Situations can create leaders, but it is not always the case. Some people are meant to be leaders

and if they are confronted with certain situations they can emerge as leaders. Some people can

learn the theory their whole life, but will never emerge as a leader. Another important aspect that

Mr. Thomas clarified was if good leaders are always good managers. He feels that Good leaders

might have a vision and know how to motivate and influence people, but at the same time they

could also lack managerial skills (organizational control etc.).

Participation makes individuals very good group members. It persuades them to happily

acknowledge their responsibilities in the activities of the group. Once individuals start taking

responsibilities, they tend to display greater amounts of interest in performing their duties and

usually find a path to accomplish their task in a successful manner. Therefore, participation is

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believed to help in constructing a spirit of cooperation and enthusiasm to accept responsibility in

the minds of individuals working in a group or organization.

Right kind of leadership makes the difference. Most often a turnaround situation may

demand an outsider to lead the company out of the mess. But sometimes, all it may need is a

change in leadership style rather than a change in the leadership (Frederiksen, Handbook of

Organizational Behavior, 1982).

Transformational leaders are believed to have a vision which they are able to clearly

communicate to others. They establish a mission for their followers and make them take pride in

working towards that mission (Newstorm, 1997). They gain the respect and trust of their

followers. They are also inclined towards inspiring their followers by communicating to them

the high expectations the organization has of them and assure them of their capacity to meet

those expectations. Transformational leaders are good at expressing complicated goals and

objectives in simple terms. They may even use non-verbal communication to communicate with

their subordinates. They appreciate and encourage rationality and careful problem solving

among their followers. Servant leadership model is one among the various transformational

leadership models.

As already stated above, Servant leadership is one of the most popular models of

leadership that has gained popularity in the recent past. This model was developed in the year

1970 by Robert K. Greenleaf. According to this model, leaders are defined as individuals “who

serve the people he/she leads which implies that they are an end in themselves rather than a

means to an organizational purpose or bottom line (McCrimmon, 1996-2009).”

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Servant leaders tend to devote themselves to serve the organizational needs. Their main

focus is on the individuals whom they actually lead. They motivate their team members

excellently and try to bring out the best out of every individual team member. They train all the

other members and encourage them to express their inner self and also strive to facilitate

personal growth in every team member. Servant leaders’ exhibit excellent listening skills and

they also build a feeling of oneness.

Servant leaders are believed to be efficient because the needs of all the followers are

taken such good care that they tend to reach their complete potential, thus perform at their finest.

The major strength of this kind of leadership is that it forces people away from self-serving,

dominant leadership and makes those in charge imagine more about how to revere, value and

encourage people who report to them (McCrimmon, 1996-2009).

Leaders tend to earn influence by maintaining compliance with the legitimate needs of an

individual; this would in turn help in building trust and cooperation in organizations. Confidence

and trust along with cooperative nature of the teams are supposedly the key components of

efficient organizations. In order to remain effective, the leader needs to be an individual who

posses excellent character and integrity and needs to have a pertinent zeal and commitment to

lead people through serving them.

3.1 Significance

In the world of modern day organizations, “this idealization of great leadership leads to

an endless search for heroic figures who can come in to rescue the rest of the world from

recalcitrant, non-competitive institutions (European Institute for Public Administration, 2005).”

But might this very thinking be a key reason how such institutions prevail? Might not the

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continual search for the hero-leader be a critical factor in itself, diverting out attention away from

building institutions that, by their very nature, continually adapt and reinvent themselves, with

leadership coming from many people in many places, not just from the top? The significance of

this study lies in finding out an answer to the above question.

4. Analysis of Findings

The following are the major characteristics or qualities that are to be possessed by an

individual in order for him to become a servant leader.

Listen to all aspects that are uttered and also expressed and not said

Empowerment is very essential through which other members of the group are given

opportunities

Positive attitude is very essential in order to influence people positively as it contagious

and reflects one’s self

Escalate issues in order to quickly solve the problems

Better results can be obtained through resolution

Honest feedback gathering will help build trust

Serving by way of leading gives an individual the ability to influence people

Apart from the above mentioned aspects, certain other characteristics like effective

communication, making an objective assessment of situations, the ability to call a spade a spade

and communicating this reality to the team members opposite in a way to empower them in their

current situation and give feedback effectively are also the traits of servant leaders.

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Servant leaders also tend to possess balanced objectivity or subjectivity. This refers to

private, personal and unique ways of experiencing situations. Both these characteristics have

their own disadvantages when not balanced properly in a profession. These are actually opposite

end of the continuum. If the servant leader is too subjective in his approach to group members,

then there is a possibility that he becomes too involved emotionally with the problems of the

other person and this may not allow him to help them properly.

Now, if the servant leader is too objective in his approach or relationship with the team

members, then there is a possibility of the servant leader being viewed by the client as uncaring

and uninterested in the well-being of the other person. This in turn would lead to a great

difficulty in communication and cause resentment. Increasing miscellany, knowledge and

information explosion, strategic affiliation, global competition and prominence on total quality

management are the challenges confronting modern organizations. In order for organizations to

effectively meet these challenges, managers require support from individual employees and their

work groups who often defy change. So, for an effective management of organizations, an in-

depth study of the behavior of individuals within workgroups, including an analysis of the nature

of workgroups is required.

The reason behind highlighting one specific model of leadership- servant leadership

model is that most of the turnaround artists about whom discussions were presented in the earlier

parts of the paper fall into this category.

Effective Decision-making is yet another important aspect that is to be possessed by every

successful leader. “Decision-making describes the process by which a course of action is

selected as the way to deal with a specific problem ((ICMR), Introduction ot Organizational

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Behaviour, 2003).” People at all levels in an organization are constantly making decisions and

solving problems. For managers, the decision-making and problem-solving tasks are particularly

important aspects of their jobs (Drucker, Post-Capitalist society, 1993). Which employee should

be assigned a particular task? How profits should be invested? Whether the problem is large or

small, it is usually the manager who has to confront it and decide what action to take.

Managers make decisions which deal with a specific problem and also an opportunity

simultaneously. For example, making decisions about cost cutting in the organization by five

percent represents a problem. The manager also needs to make decisions when there is an

opportunity which is readily available for exploitation. For instance, if the organization has

excess funds, the manager needs to decide whether they should be used to boost shareholder

dividends, reinvested in existing operations, or to spread out into new markets.

Apart from the above, innovation is also a very important aspect in the study of

leadership. Structural variables form an important source of innovation. The structure of an

organization has got a profound impact on the innovation that is expected to happen sooner or

later in the organization. Secondly, in innovative organizations, the vision, mission and

strategies of the organization are communicated very clearly to the human resources of the

organization. In such organizations, the employees are never forced to adopt traditional methods

to achieve the goals of the organization. Instead, the management encourages its employees to

take risks, experiment with innovative ideas and assume the responsibility for implementing

them. It is only then that the organization would be able to successfully reach higher heights and

progress well (Bennis, 2009).

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For instance, 3M fosters a culture of innovation in its organization. It allows its

employees to spend 15% of their working hours on independent projects. In addition to this, the

key elements that foster innovation at 3M are its capability to recruit and retain talent, construct a

challenging atmosphere within the organization, support knowledge sharing and design suitable

systems for rewarding employees who outperform.

Likewise, management in innovative organizations trains and develops its workforce to

update their talent and acquaintance and encourages them to become idea champs. Idea champs

are those people in an organization who are highly enthusiastic in promoting the ideas they have

newly developed, systematize essential support for their ideas within the organization, overcome

confrontation if any and ensure that the organization implements their ideas or innovations.

Such individuals succeed in obtaining support for their innovation by communicating their vision

pertaining to its potency, to other members of the organization. Furthermore, their confidence

and dedication plays a predominant role in persuading others about the potential of the

innovation.

5. Conclusion

In the era bygone, leadership was restricted to very few concepts and situations. The few

areas that really needed leadership historically were either leading a war or limited to providing

leadership to the kingdoms and religious institutions. Like the great kings of various kingdoms

across the civilized world and institutions like the church. This ultimately translated to physical

prowess one way or the other or ultimately it led to controlling the physical superiority.

Physical superiority meant either in terms of being larger in size, space or numbers.

However it is pertinent to recollect the fact that economies were primarily agrarian and

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electronics were nonexistent. There was extremely limited thought leadership involving higher

levels of human intellect. The safety and security was of the paramount concern and the one who

was able to provide this became the choice of mates as well as great leaders.

As the complexity of human society increased and the thinking patterns diversified in

human beings along with technological innovations there was another kind of leadership that

began to emerge, the leadership in thoughts that was trying to control or in the least influence the

way the physical might acted – this was the era of brahminical superiority in or similar ones in

the Asian context and the era of religious superiority in the European and African Contexts. This

kind of arm chair leadership that inherently tried to play a role in managing / controlling the

thinking as well as the actions of the kings and the powers that were.

Over a period of time what started off as a benevolent situation turned malicious and even

perverted. This led to various kinds of harassment and negative situations in the society that led

to the kings / powers realizing that they were in the clutches of the religious minority.

Alternatively the oppressed class also realized that they were actually being exploited. This

generic negative situation led to alternate leadership mechanisms being evolved in the society in

general.

In addition to the changes in the social fabric and systems, the development of

technology and scientific applications began to accelerate and accelerate rapidly. This led to

creation of various gadgets that began to ease the life of people and started creating a middle

class – a new layer in the society.

Technological changes and improvements along with rapidly accelerating technological

developments led to creation of a different kind of leadership – the mental and intellectual

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prowess. This along with the realization that physical prowess is more or less not really

important, but what really matters is the economic superiority called for a new set of leaders to

be created. This situation calls for leaders who can clearly and quickly create economic

superiority either for themselves, their organizations or their countries.

Slowly the face of leadership has changed. The systems of kings and monarchs have

disappeared or have been relegated into the background to be of ceremonial importance. This is

more or less true across all the countries globally. The leaders who are really making an impact

on the global directions are either the political leaders or the business leaders.

As the industrial economy has transformed to service economy to information economy

to knowledge economy to skill economy the faces of the leaders is also changing. The leadership

has changed from that of physical superiority to that on the intellectual superiority. The one who

can actually respond the fastest and the best to the given situation and create economic advantage

to himself or his affiliate is the one who becomes a leader. The type of leadership that is popular

and effective is also changing from the authoritarian style to the participative style of leadership.

What is critical today is not to be able to establish physical superiority but the need to establish

economic superiority.

In line with the changing demands of the business situations today, the need for

leadership also has changed. What really matters today is the ability to provide thought

leadership that would lead to economic superiority either for self or the organization.

What matters today is the ability of a leader to be able to grasp a current or future

business situation and turn it into one of an opportunity for himself and the organization. Being

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able to provide better returns to self and all the stake holders in whatever form is what leadership

is all about today.

In the same breath it is pertinent to note that perversion exists even today at the

leadership level. The recent episodes of financial failures of large corporations in the United

States that led to a global economic crisis is an ample example of economic perversion – the

single minded devotion to create wealth for self over the interests of the society. This kind of

perversion leads to large scale global failures.

Thanks to the strength of political leadership and institutional leadership that the world

was drawn away fairly safely from the brink of collapse. This kind of perversion comes into play

and plays havoc with global balance when human shortsightedness and greed overtakes the need

for maintaining a health welfare outlook for the human race in general.

Leaders have changed. Leadership styles have changed. Need for leaders has changed,

but what remains constant is the ability of leaders to keep an eye and maintain a balance between

the benefit for self and their institutions and the human race at large!

6. Recommendations

Faced with the practical needs for considerable change, companies usually choose the

hero-leader rather than extracting and developing leadership ability all over the entire

organization. A new hero-CEO turns up to propel new life into the organization’s anguishing

fortune. Usually, today, the new leader implements cost cutting measures and enhances both

productivity and profits. However, the improvements are not sustainable in nature. Most of the

grand strategies proposed by leaders are never put to action; as an alternative, people cling to

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customary ways of doing things. New ideas do not emerge from people at the front lines because

they are too scared to take risks and get exposed. “Energies are not released to create new

products or new ways to meet customer needs because people are too busy competing with one

another to please their bosses. Sooner or later, new crises ensue, giving rise to the search for

new hero-leaders (Senge, 2000).” This is the modern day scenario.

Most organizations, at some time in their existence, face decline in performance. During

a company’s lifespan depicted in the firm’s lifecycle a stage comes when it may need a

turnaround in order to survive. Here, the right kind of leadership makes the difference.

Most often a turnaround situation may demand an outsider to lead the company out of the

mess. But sometimes, all it may need is a change in leadership style rather than a change in the

leadership. Leadership is as learnable as any other skill. Skills are a manifestation of the

personality traits of a person. But, as widely accepted, human beings are exceptionally good at

adapting their personality to suit the occasion (Prasad, 2005). So, leadership skills being the

output of personality traits, the traits can be varied to the required skills.

Organizations are increasingly focusing on improving the knowledge and skills of

employees because of the continuous advancement in the technology and changes in the business

environment.

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7. Appendix

Interviewee: Thomas Graf, CEO of Century Casinos, Inc.

I chose 10 out of 15 questions from the questionnaire. Besides the Yes/No options I included additional

answers from the interviewee.

Is leadership necessary for building strong business organizations?

Yes, if strong leadership is established, employees will follow and help building strong business

organizations. The interviewee told me from his experience that he tries to motivate his employees on a

daily basis and tries that they ultimately keep the organizations goals in mind. Make them feel like they

belong to something bigger.

Is good leadership sufficient to handle all dire situations in an organization?

Yes, but it should always be a good combination of managerial and leadership skills.

Is leadership a learnable skill?

Yes, it can be learned but it’s not easy. To learn leadership skills from the get go a lot of passion, time and

the willingness to learn and evolve must be taken into consideration.

Managerial skills can be acquired through formal education.

Yes, but experience is more important than plain theory.

Leaders are a creation of situations and circumstances.

Yes and No. Situations can create leaders, but it is not always the case. Some people are meant to be

leaders and if they are confronted with certain situations they can emerge as leaders. Some people can

learn the theory their whole life, but will never emerge as a leader.

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Good leaders always are good managers.

No. Good leaders might have a vision and know how to motivate and influence people, but at the same

time they could also lack managerial skills (organizational control etc.).

Leaders always have solutions for all problems.

Yes and No. Even if there’s no solution at the beginning, a good leader never gives up and knows how to

motivate others. Never give them a feeling that something is out of control.

Business owners always make great leaders.

No, because business owners might have monetary resources available to own a business, but that doesn’t

make them a good skillful leader automatically.

Situations create leaders.

Yes, the most successful leaders in the business world today are created by situations. But a good leader

in one situation might not be a good leader when the situation differs.

Managers and leaders are essential for business.

Yes, both are the most important factors in an organization and have to work closely together to assure

long term success.

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