Different situations and styles of leadership
Different Situations and Styles of Leadership and their role in Organizational Performance
Leadership has been the topic of discussion and research in the OB literature. A great collection of different theoretical framework has been developed to make out elements of leadership. Incessant self assessment, learning, guidance, experience and never ending process of self-study develops good leaders in a society. Many companies are facing high turnover, absenteeism, low morale among employees and many other such issues related to the job environment. For all these problems companies need proper effective Leadership. The purpose of this paper is to have an in-depth insight on the major research findings of an effective leadership styles and situations and their role in organizational performance by reviewing the research literature.
In This review paper organizational performance is being judged by the motivational level of the employees and job satisfaction factor. So this review paper gives a clear insight concerning (the theories of leadership) factors that boost leadership among employees which is then linked with organizational performance. This review paper will help managers to look at the major concerns which lead to great leadership and how to handle challenges and unexpected situations occur in an organization.
Leadership and its Meaning:
As this world is changing so is the definition of leadership. Over the years leadership has been described according to the circumstances. Effective leadership can be argued as person who is heading a group of people can be a leader. The word has been defined in so many terms that giving a single definition will not be justified. In order to understand the true meaning of leadership one has to study the topic itself thoroughly. Today's world is so complex and fast changing that we cannot just stick to one definition of the leadership. As the competition from the other firms comes in the organization so the ideas, so they broaden the meaning of leadership.
Leadership has been described as the "process of social influence, in which one person can enlist the aid and support of others in the accomplishment of a common task” Thomas. B. Alan. (Sep., 1988). A definition more inclusive of followers comes from Alan Keith of Genentech who said "Leadership is ultimately about creating a way for people to contribute to making something extraordinary happen." According to Ken Ogbonnia (2007), "effective leadership is the ability to successfully integrate and maximize available resources within the internal and external environment for the attainment of organizational or societal goals”. Hunt. J. G. (Dec., 1971) defines an effective leader "as an individual with the capacity to consistently succeed in a given condition and be recognized as meeting the expectations of an organization or society."
The analysis that has led to important findings saying that the effective Leadership can have positive impacts on overall performance. In an indirect manner as has been noticed, leadership tends to increase the performance of the organization by increasing risk taking abilities as well as the innovation that seems to be a necessary factor in achieving higher levels of teamwork.
A leader's background, life experiences, and daily communications define his or her leadership style. The difference between a good leader and a great leader is his or her ability to adapt to change (Burno. F. C. Leo (2006). According to Avery, G.C. & Jing F.F. (2008) due to the complexity of leadership it is broken into five different perspectives: competency, behavioral, contingency, transformational, and implicit. Leadership is a method by which an individual persuades other people in a group to achieve an objective and leads the organization in a way that makes the team members interconnected and coherent. Bass' (1989 & 1990) explains three types of theories of leadership. According to him there is a trait theory which states that in some people they have in born traits which lead them to become a leader. Second theory is great event theory which is related to the crisis or important event. It states that sometimes some major events or crisis leave their marks on an individual personality which may bring out leadership qualities in an ordinary person, making him an extraordinary leader. Third is Transformational leadership theory, it is most widely accepted theory of recent years. In it people by choice choose the path of becoming leaders through learning and proper education. Leadership has certain set attributes like values, ethics, belief, knowledge and skill etc., which if followed properly can make an individual a good leader.
Robert D. Rossel (1970) in his paper argued that there are two kinds of orientations, instrumental and expressive, attached to the effective leadership in an organization. According to him, leadership orientation depends on the nature of organization. Different organizations require different kind of leadership orientation among supervisors and managers. He further stated, if we take an example of organizations like mental hospitals, prisons etc where the environment is more segregated and isolated, the most successful leadership will be informal and expressive. Whereas formal and instrumental leadership will be required in organizations dealing in production and service side. Author explained the instrumental orientation to leadership as one which is more tasks oriented, the main focus of such type of leadership in an organization is to motivate team members, to maintain product quality. While, expressive orientation to leadership is all about getting along with the group members and the conduct of perverseness, and inattentiveness in leadership may interfere with the goals of organization. Author stated that the orientation to leadership also vary depending upon the labor commitment required for any particular organization. according to the findings of this paper, this can be affirmed that organizations where there is a high labor commitment demonstrates a very definite instrumental orientation in top management (F-Ratio 2.39, Mean 1.25) and an expressive orientation in lower supervisors (Mean -0.17).
In terms of superior performance, effective leadership leads to people who find fulfillment in their jobs, work with enthusiasm passion and attention to quality. Effective Leaders are innovative Creators who create or promote an idea, a concept, or an ideology. They concentrate and focus the group's attention on goals and objectives. They provide a strategy and plan on how to achieve the goals. Effective leaders are providers of resources who provide the resources required to get the job done. These might be physical items (tools and equipment, technical and administrative assistance) or psychological resources (education and understanding, motivation, clear plans and objectives).Effective leaders are achievers of high growth who modify and adapt to changing circumstances and environments. They are attentive to the needs, opportunities and challenges that face their people and move quickly to support them.
Leadership is a solution to the problem of collective effort—the problem of bringing people together and combining their efforts to promote success and survival (Hogan & Kaiser, 2005). Three implications of this view should be noted. First, leadership involves influencing individuals willingly to contribute to the good of the group. Second, leadership requires coordinating and the group guiding (by adopting the most appropriate way) to achieve its goals. Finally, goals vary by organization and their life cycles. Leadership is imperative for molding a group of people into a team, shaping them into a force that serves as a competitive business advantage. Leaders know how to make people function in a collaborative fashion, and how to motivate them to excel their performance. Leaders also know how to balance the individual team member's quest with the goal of producing synergy - an outcome that exceeds the sum of individual inputs. Leaders require that their team members forego the quest for personal best in concert with the team effort. An important measure of a leader's own success is the success of his or her followers. The key difference in explaining the long term performances of the firms is mostly attributed to an exceptional leadership. Superior Performance is achieved when an organization is generating the maximum level of profitability possible with the help of three key determinants-efficiency, adaptations, and human resources. A business environment is more likely to succeed when it has people with high levels of skills, commitment and mutual trusts.
3. Organizational Performance
In order to understand the meaning of organizational performance first we have to look at the definition of organization. Aldrich (1979) in his book "organizations and environment” explained organization in three ways a) goal oriented; b) boundary maintaining, and c) activity system. By goal directed he means that the end objective of all organization is to earn profit and to maximize the wealth of shares holders. Members of an organization behaves as if they have some defined goal, all of them work to achieve some specified purpose. This means members of an organization are task-oriented not merely work for social interaction. Goal-directed behavior and deliberate design of activity systems distinguish organizations from other collectivities, such as families, friendship circles, audiences and mass publics. By boundary maintain he meant that organizations have defined clearly among the members of an organizations and non-members. And all members of an organization work collectively under the supervision of some authority to obtain defined goals. Activity system can be described as a system in an organization where all members are assigned some activities to achieve some predefined goals within boundary of an organization.
Job satisfaction and high level of motivation among employee are two important factors in evaluating organizational performance. If the employees of an organization are happy and content with the company's policies then they automatically take care of the external customers as well, which obviously enhance the customer loyalty and increases turnover.
According to Mehra et al. (2006), when some organizations seek efficient ways to enable them to outperform others, a longstanding approach is to focus on the effects of leadership. This is because team leaders are believed to play a pivotal role in shaping collective norms, helping teams cope with their environments, and coordinating collective action. This leader-centered perspective has provided valuable insights into the relationship between leadership and team performance there are several leadership styles, tactics and behaviors which help to improve organizational performance. The reason for this is because intangible assets such as leadership behaviors, culture, skill and competence, and motivation are seen increasingly as key sources of strength in those firms that can combine people and processes and organizational performance (Purcell et al., 2004, p.1 as cited in the study by Fenwick Feng Jing, Avery, G.C. (May 2008) on Leadership Paradigms and Organizational Performance). Therefore, leaders and their leadership style influence both their subordinates and organizational outcomes.
Organizational performance increases if the employees are highly motivated and satisfied with team leader and their work. As per Ohio State University research successful leadership has two behavioral dimensions which play very important role, 1. Consideration: in this kind of behavior leader of a group is concerned about the team members. This aspect of leadership is linked with leadership traits of kindliness, discussion with subordinates, appreciation and respect of team members and supportiveness. 2. Initiating Structure: this type of leaders' behavior is more towards work done. They are more concerned about work and task. Leaders who fall into this category of style are very planned, coordinated, clear about their goals, criticize poor work, and always pressurize subordinates to work more effectively.
4. Leadership Styles
In order to understand the term effective leadership one has to study different styles linked with it. The term "leadership style” has been defined as "the relatively consistent pattern of behavior that characterizes a leader” (DuBrin, 1995 as cited in the study by James D. Boulgarides & William A. Cohen 2001). According to him leadership style is the manner and approach of providing direction, implementing plans, and motivating people. The leadership style that is used depends upon the human needs of the employees. Leaders build teamwork, help other people or their subordinates with their problems, and provide psychological support. Leaders are concerned about the proper alignment of tasks and skills in order to obtain the highest efficient and effective outcome. There is evidence that leaders who are considerate in their leadership style are higher performers and are more satisfied with their job. Other considerations leaders use in their approach to others or their subordinates are time allotments, relationship development, information process, the training and professionalism of the other people or their subordinates, and how well they know the tasks. It has been generally accepted that there are three basic styles of leadership, Authoritarian, Participative and Delegative by James D. Boulgarides & William A. Cohen (2001)
- Authoritarian (autocratic). This style is used when the leader tells his subordinates what exactly needs to be done, without getting the advice of her followers. This style of leadership should only be used if you have all the knowledge on a particular subject and have preliminary plans as to how to carry out your project, but you are short on time. Normally you have already established a working relationship with your employees, and they are motivated to help you finish your project within the deadline. The authoritarian style should normally only be used on rare occasions. It can be used, within limits, if the subordinate is a new employee who is just learning the job. The leader can use this style in a competent method to teach and mentor the new employee to accomplish certain performance standards in the new work environment.
- Participative (democratic) is used when the leader knows what the ultimate goal is that needs to be accomplished, but not necessarily the procedures required too achieve it. The leader informs the others or the subordinates of the goal, and discusses it with the actual employees involved to achieve it. This style of leadership could be called fact finding to determine the best procedures to accomplish the goals of the project or task assigned. However, the leader remains in authority. He determines the procedures to be used based on the information received from his employees. This is normally used when you have part of the information, and your employees have other parts. Using this style is of mutual benefit - it allows them to become part of the team and hence increases team's performance and allows you to make better decisions.
- Delegative (free Rein) style, the leader allows the employees to make the decision. However, the leader is still responsible for the decisions that are made. This is used when employees are able to analyze the situation and determine what needs to be done and how to do it. The leader must set priorities and delegate certain tasks. This is a style to be used when the leader has the full trust and confidence in the people below you.
A decision style model encompassing four basic styles; Directive, Analytic, Behavioral and Conceptual was envisioned by James D. Boulgarides & William A. Cohen (2001)
Directive - Low tolerance for ambiguity and low cognitive complexity. In this model the focus is on technical decisions, and this style is generally autocratic. The leader may adopt this style due to a high need for power. Because of the use of little information and few alternatives, speed and satisfactory solutions are typical. The leaders tend to be focused and are frequently aggressive. Generally they prefer structure and specific information, which is given verbally. Their orientation is internal to the organization and short range. They tend to operate with tight controls. Although they are efficient, these leaders have a high need for security and status. They have the drive required to achieve results and optimize performance, but they also want to dominate others.
Analytic-This Leader has a much greater tolerance for ambiguity than the directive style leader and also has a more cognitively complex personality that leads to the desire for more information and the consideration of many alternatives. Because of the focus on technical decisions and the need for control, there is an autocratic bent. The analytic style is typified by the ability to cope with new situations, but in a structured manner. As a result, this style enjoys problem solving and strives for the maximum that can be achieved in a given situation. Position and ego are important characteristics possessed by the leader. Consequently these leaders often reach top posts in an organization, or start their own companies. They are not particularly quick in their decision-making and they enjoy variety and prefer written reports. They also enjoy challenges and examine every detail in a situation.
Conceptual style of leadership has both high cognitive complexity and a people orientation; this style tends to use data from multiple sources and considers many alternatives. Similar to the behavioral style, there is trust and openness in relationships and shared goals with subordinates. These leaders tend to be idealists who may emphasize ethics and values in their behavior. They generally are creative and can readily understand complex relationships. Their focus is long range with high organizational commitment and performance. They are achievement-oriented and value praise, recognition, and independence. They prefer loose control over power and will frequently encourage participation of those they lead. They may be characterized as thinkers rather than doers. Then we have what is known as the behavioral leadership style although low on the cognitive complexity scale, this leader has a deep concern for the organization and development of people.
Behavioral style managers tend to be supportive and are concerned with subordinates' well being. They provide counseling, are receptive to suggestions, communicate easily, show warmth, are empathetic, are persuasive, and are willing to compromise and accept a looser control. With low data input, this style tends toward short-range focus and uses meetings primarily for communicating. These managers avoid conflict, seek acceptance, and tend to be more people-oriented, but sometimes are insecure.
DiWriter (2008) says when leaders use ineffective leadership styles it produces internal conflicts between the subordinates themselves, and between the employees and the supervisor. The working environment becomes stressful. Sometimes the atmosphere in the working environment becomes so thick; it feels like the stress could be cut with a knife. When employees become fearful of being penalized for mistakes by their leaders; it sometimes is easier to do nothing; in lieu of being chastised for making a mistake. Negative leaders act domineering and superior. They believe the only way to get things done is through penalties, such as loss of job, days off without pay, reprimand employees in front of others, and other demeaning actions. Some people tend to think of this style as a vehicle for yelling, using demeaning language, and leading by threats and abusing their power. This is not the authoritarian style rather it is an abusive, unprofessional style called bossing people around. They believe their authority is increased by freighting everyone into higher levels of productivity. Yet what always happens when this approach is used is that morale falls; which of course leads to lower productivity and is extremely hazardous to overall organizational performance. The autocratic style of leadership should only be used for new employees that might need some training or mentoring; but, almost never with a well-seasoned professional group of employees. Employees that have been working for the organization for a period of time become resentful by an autocratic leadership style. The leader would be more effective to use these people in consultations. Another style of leadership is known as laissez faire or laissez faire. This is a leadership style where the supervisor does not participate in managing his employees. When this style of leadership occurs in a work environment the employees will select an informal leader to help them guide and inform.
Researchers have found different leadership styles to be optimal depending on the situation. Thus, certain leaders may be chosen for their style depending on various factors peculiar to the situation which an organization faces at any given time. James D. Boulgarides, (2001) says that such an approach is inefficient under dynamically changing situations of the organization's life cycle. Instead he recommends that leaders be chosen for their ability to manage an array of tactics, and that individual leaders become proficient in applying tactics rather than maintaining or attempting to optimize any given style of leadership or decision making. Boulgarides (1973) conducted research in which he compared decision styles with leadership flexibility. He found that extremes of being too flexible or too rigid are least effective. By "too flexible” is meant being indecisive. Fiedler (1967) suggests that it is easier to change almost anything than to change a manager's personality or style. Indeed Cohen (1998) found that for the leader to pretend to be something he or she is not is a major error. However, even in a given phase of the organization life cycle, a flexible style that can be used to match a given situation was more effective. Leaders who facilitate work accomplishment are accepted and followed most easily. When viewed in terms of leader styles, the flexible leader adapts to new situations, whereas the rigid leader maintains consistent patterns of behavior in almost all situations. A flexible style doesn't mean changing personality. It does however involve the use of different tactics, depending on the situation.
5. Situational Leadership
The objective of this review paper is to explain leadership and its role in a firm. So for explaining the topic it is essential to elaborate few theories which have substantial importance in OB literature. Situational leaders are those who can coordinate, guide, handle and direct his team members in all kinds of known and unknown situations (situational factors). There are few aspects which lead to situational decisions such as motivation and capability of followers. This, in turn, is affected by factors within the particular situation. Another factor which may affect leaders behavior is the relationship shared between followers and leaders.
According to the situational theory purposed by Hersey and Blanchard (1969) leader should be able to motivate his followers in order to make them perform their task efficiently and effectively. Leaders should work in a way that they will motivate their followers and increase their development level. On the bases of these lines they have come up with four leadership styles that are consistent with the four development levels for followers. 1) S1:Telling / Directing: when in a team followers are unable to understand the task and afraid to perform their duties then the leader will guide and coordinate the properly. Leaders in this situation identify the real problem occurring to the follower and try to solve it. Leaders uphold the position of boss so that all assignments will be done properly within time. 2) S2:Selling / coaching: when the follower is able to understand his task to some extent then, and looks confident in this, then "telling” them will be equal to discouraging them. So in this type of situations leaders have to guide his team members very carefully and instead of telling the leaders have to "sell” the techniques of working, explaining and clarifying decisions. First two styles are more leaders oriented. 3) S3:Participating / supporting: when followers can perform and they don't show the results then leaders have to be very patient and deal this situation with expertise. Leaders should find out different ways to motivate the followers and if reasons of not showing performance would have been found then leaders should tackle them properly. 4) S4: Delegating / Observing: in this type of situations followers know their jobs and they don't need any guidance but still it's important for leaders to keep a check on the performance of the followers in order to ensure that everything moving according to the set plan.
Leo F.C. in his paper 'personal values and leadership effectiveness' (2006), explained the profile of leadership styles of Brazilian supervisors or CEO based on the situational leadership styles purposed by Hersey et al. In his paper he elucidated that results showed that most of the executives are seen accepting the styles S2 (48.29% frequency distribution) and S3 (28.60% frequency distribution). So this shows that they have capabilities of working with followers of average levels of willingness. Though they sometimes face problems regarding discipline and work with groups.
Earlier management theorists attempted to discover a one best leadership style for all situations. However, modern researchers found that both the internal and external environments have a significant impact on leader effectiveness. For example, with a limited range of external opportunity leaders are constrained by competition, legislation, technology, changing markets and limited resources when making strategic decisions. Fiedler (1967), who conducted extensive research on the situational aspects of leadership effectiveness, identified factors that determine what style of leader performed best. He examined correlations between test scores of leaders and their performance related to situational factors. The relations-motivated leader performs best where the leader position is not strong. Task-motivated leaders perform best when the leader-member relations are good and the leader power position is strong. The latter category represents poor member relations and a weak leader who is attempting to deal with a poor situation. Because that situation is unfavorable, Fiedler's model would requite a task-oriented leader to keep the situation from falling apart. An obvious alternative would be to replace the leader. To deal with the issue of matching style to the situation, Vroom and Yetton (1973) developed an approach that deals with leader-subordinate interaction. Their model explicitly recognized that an effective style depended on situational variables including the leader's expertise, the task structure, and the employees' willingness to accept a solution. They found that the key elements in sharing of leader power are the maximization of technical effectiveness and subordinate motivation or acceptance. If technical effectiveness is not crucial and motivation and acceptance are not important, the decisions are made by the leader alone. On the other hand, if the technical difficulties are important but motivation is low, the leader attempts to obtain more information. When technical effectiveness is unimportant but motivation and acceptance are high, delegation becomes a useful approach. Finally, if the problem is high on the technical level and there is a need for acceptance, then the decision is shared with the group. The situational determinants of leadership show that there is frequently, but not necessarily optimally, a consistency in the behavior of a leader when he or she performs in different situations. Many times, patterns of interpersonal behavior are transferred even when work performances change to meet new requirements (Stogdill, 1974). Leaders also change in response to differing group task demands.
Another perspective that relates leader style to the situation is described by Filley et al. 1975 (as cited in the study by Fenwick Feng Jing, Avery, G.C. (May 2008) on Leadership Paradigms and Organizational Performance), who concluded that there are four situational factors that influence the effectiveness of a particular leader style. These are: Intrinsic job pressure.- Acceptance of structure by subordinates, Intrinsic job satisfaction.-Satisfaction leads to less impact of leader consideration, Leader's consideration.- Leader's job structure does not cause dissatisfaction and Subordinates' need for information.- Personality and ambiguity lead to tolerance of structure. Further challenging the leader is the organization life cycle. Greiner 1972 (as cited in the study by Fenwick Feng Jing, Avery, G.C. (May 2008) on Leadership Paradigms and Organizational Performance) described five stages through which an organization passes and the related changes in management focus, organization structure, top management style, control system, and reward emphasis that results. Contributing to these changes and complicating the leaders decision-making were the age of the organization, its size, stages of evolution (defined as growth through creativity, direction. delegation, coordination, and collaboration), stages of evolution (defined as crises of leadership, autonomy, control, red tape, and uncertainty) and finally, the growth rate of the industry. It should be noted that the organization's life cycle can be correlated for optimization with leader style.)
Substantial numbers of management scholars have debated the effectiveness of leadership styles, behaviors and situations when selecting measurements of performance there is a correlation between financial performance and customer satisfaction and employee satisfaction. Several reasons indicate that there should be a relationship between leadership and performance. The first reason relates to practice. Today's intensive, dynamic markets feature innovation-based competition, price/performance rivalry, decreasing returns, and the creative destruction of existing competencies therefore effective leadership behaviors can facilitate the improvement of performance when organizations face these new challenges (McGrath and MacMillan, 2000; Teece, Pisano and Shuen, 1997, as cited in the study by Fenwick Feng Jing, Avery, G.C. (May 2008) on Leadership Paradigms and Organizational Performance). Understanding the effects of leadership on performance is also important because leadership is viewed as one of the key driving forces for improving a firm's performance.
6. The Contingency Model of Leadership Effectiveness
In this section contingency theory has been explained which was actually originated by Fiedler. Contingency theory helps executives and leaders to motivate and guide their follower in order to get better results for an organization. This theory is all about how the leaders lead his groups in different situations, which predicts followers' capabilities and behaviors. There are few similarities between Contingency theory and situational theory. Former deals with the ability of leaders and see how they handle their followers to achieve high organizational performance in all kinds of situations. Also there is an important difference between the two theories. Situational Theory is more focused towards the behavior of the leader, depending upon the situations (often about follower behavior), whereas contingency theory talks about the bigger picture and it embraces group aspects about leader competence and other variables within the situation.
This model was purposed by Fiedler 1964; Fiedler and Chemers, 1974. According to this model they have explained two categories of motivational oriented leaders i.e. one is the task-motivated leaders and second category is relationship- motivated leaders. Authors describe that whenever some unexpected situation occurs in an organization the two motivated leaders react or respond to the situation differently. Research on this model has proved time and again those leaders of task-motivated orientation most of the time perform effectively in all types of situations, whereas leaders which fall into the second category (relationship-motivated) perform best in situations in which their control and influence is moderate. They further elaborated that if there is an increase in leader's power and influence this would increase the performance of some types of leaders, but decrease the performance of others. ("leadership training and experience” Fiedler 1972).
Contingency model has explained few hypothesis regarding the performance of the leaders, which are, a) changes in an organization environment decreases the leaders' control, power, and influence ; b) changes in situations will have less upsetting impact on experienced leaders than the inexperienced ones and similarly change in job environment will not affect the performance and behavior of the experienced leaders than the inexperienced ones; and c) relationship- and task- motivated leaders will work and carry out their duties differently as a consequence of environmental change and their level of experience.
Fiedler's model was basically done in order to clarify the ambiguities related to two major questions focused on in leadership study at that time; what are those personality factors which make someone a leader, and what the personality traits are which make them effective (1964). Fiedler sees group performance as being "contingent upon both the motivational system of the leader and the degree to which the leader has control and influence,” viewing "the leadership situation as an arena in which the leader seeks to satisfy his own as well as the organization's goals" (1974, p. 73).
Fiedler classifies groups as sharing proximity, similarity and a common fate on task related events. Fiedler's model explains "groups” in which all team members work together to achieve a common goal which provides benefits as a whole, and not "individuals working separately towards a common goal (co acting groups)” (1964, p. 152). The leader in a group is defined by fielder, is the one who directs and coordinates his group tasks oriented activities in a way that maximizes the outcome.
Further the effects of leadership training and experience can be explained through the contingency model. Fiedler (Dec.1972) in his paper talks about the relationship between years of experience and performance and with the evidence of different studies it has been shown that there is a median correlation between two of them. Some studies [Fiedler, Nealey and Wood (1968)] showed that the correlation between performance and the amount of training and experience is as low as 0.10 percent.
A lot of research have been done in order to answer the question why leadership experience and training has not leaded to better organizational performance. Research based on recent leadership theories and the contingency model developed by researchers like Fiedler tried to answer the query.
It has been predicted that the effectiveness of an organization can be based on two contingent factors (1) leader motivational factor (2) leader's control and influence on situations; called "situational favorableness”.
The theory is consistent with the evidence present in the past that the behavior of a leader and organization performance depend on situation to situation. So, in order to see which type of leaders perform better in what kind of situations we have to study different types of leaders and situations. But the question arises that what kind of leadership does each of these situation requires?
Leadership is all about leading a group of people, and one can lead a group more effectively and efficiently if he has a power and ability to influence others. So it perhaps easy to classify situations in terms of how much right and influence the situation gives to the leader. Majority of the studies based on contingency model has been described situations as (a) a relationship between leader and subordinates (b) task structure and (c) position power.
Research (Fiedler 1967) has been shown that the healthy relationship between leader and group members lead to a good performance. Leaders will enjoy more power and influence others if they have a good relationship with their team members, that is, if they are respected, trusted and liked. It will help leaders to work effectively. According to the author, it has been seen that leaders given more respect and they can easily motivate their team members if they planned assignments instead of unplanned and indistinguishable work. Also group members work more enthuastic if they observe and know the fact that the leader of their group has a power of reward, punish, fire or hire them. After realizing this fact they work even better.
The second major factor which lead to the effectiveness of an organization is the motivational system exists in groups.
7. The Leadership-Performance Debate
Alan B Thomas in his paper, "does leadership make a difference to organizational performance?” examined the research of Lieberson and O'Connor's and related studies in order to clear the conceptual confusion attached to the leadership-performance issue (Bryman, 1986).
Lieberson and O'Connor's (1972) research into leadership and performance in large corporations was a study to verify the environmental issues on leader influence. "A key research issue," they wrote, "is simply to determine the relative importance of leadership and organizational environment for organizational outcomes. How much variance in organizational performance can be attributed to persons in top leadership roles?" (Lieberson and O'Connor, 1972:118).
To deal with this question, authors gathered the data on profit margins, sales, earnings (profits), and periods of leader incumbency for 167 major publicly owned, U.S. corporations for the years 1946-1965. Samples of from six to eighteen firms were drawn from within each of thirteen industries, these being chosen to reflect varied conditions with respect to technology, market attributes, government influence, size, and so on. Leadership periods were defined as those during which the CEO or the president of the organization was the same. Three dependent performance variables were used in the study analysis (sales, earnings, and profit margins) and four independent variables in the form of year, industry, company, and leadership. The year variable was measured in order to see the effects of general economic conditions, such as interest rates and inflation, on the firms over time; the industry variable includes the effects like technology and competition which are common to an industry; the company variable to reflect differences between firms, such as size, location, facilities, and reputation; and the leadership variable to represent the influence of leaders during their periods of office.
On the basis of these studies it has commonly been concluded that leadership differences have little or no impact on organizational performance, for in each case the vast majority of performance variation is accounted for by nonleadership factors. Pearce, Stevenson, and Perry (1985:275), for example, noted that "the appointment of new corporation presidents can make headlines in the business sections of the newspapers, but Lieberson and O'Connor (1972) found leadership change to have no effect on organizational indicators, such as profits." Finally, Tim R V. Davis and Fred Luthans (1979) mentioned that "studies estimating the effect of administrators have found them to account for about 10 percent of the variance in organizational performance," which, they went on to say critically, is "a striking contrast to the 90 percent of intellectual effort that has been devoted to developing theories of individual action." Leadership, it seems, doesn't make a difference.
Aldrich (1979), in his significant book on organizations and environments, stated that Lieberson and O'Connor had established only inadequate effects of leadership changes on company performance. He further explained that "Generalizing from their findings is risky, however, given definitional dependence between their three performance variables and the lack of organization-specific control variables" (1979:19). Later he highlighted on important point that apparently revealed the flaw in their study. Lieberson and O'Connor's findings showed that leaders had little impact on net earnings (profits) and sales but a considerable impact on profit margins. Since the profit margin is the ratio of the net earnings and therefore definitionally dependent on them, Aldrich argued that "it is simply implausible that executives who failed to have an impact on sales or net earnings could nevertheless have an impact on profits" (by which he clearly meant profit margins). He concluded that Lieberson and O'Connor's findings were "highly suspect" (1979:144).
After the literature review it can be stated the particularly successful style of leadership in one set of circumstances may be most unsuccessful in another setting. It's more relevant to put the leadership styles into 2 categories. The first is the formalized/authoritarian type of leadership; and supportive/participative type of leadership. The authoritarian leadership is characterized by the dominance of the leader who controls all aspects of the work, gives detailed orders and makes all decisions. The quality most required of followers is obedience. On the other hand, supportive leadership is more flexible, incorporating participatory decision-making and a certain degree of professional freedom and initiative. Leaders should switch between the different leadership styles because leaders with the best results do not rely on only one leadership style; they use most of them in a given week seamlessly and in different measure depending on the business situation those styles are : Coercive are the ones who demand immediate compliance. Authoritative leaders are the ones who mobilize people toward a vision. Affiliate leaders are those who create emotional bonds and harmony. Democratic leaders build consensus through participation. Pacesetting are the ones who expect excellence and self-direction. And lastly coaching leaders are those who develop people for the future. As far as the leadership tactics are concerned, there is a right time and place for tactics. If a leader has one tactic that he or she relies on almost all the time, it is almost certain to develop into a pattern or behavior, in other words a style. This negates the very purpose of the tactics. The leader's selection of a particular tactic in a situation will depend on, the individual personality of the person or persons led, the frame of mind of the person or persons led the leader's own current frame of mind, the leader's goals or objectives, the relative power between the leader and those led the importance of time in the action the leader wants taken, the type of commitment required to complete the desired action rules, laws, or authority of the leader in the situation As with the organization life cycle, certain tactics tend to work better than others as the situation changes. A new company or organization is formed. The leader emphasizes attracting qualified people. This requires persuasion tactics or Preparing Others to Succeed-tactic the leader coaches for successful results and acts as a catalyst who promptsothers to succeed. As the organization grows, team building and the exchange of ideas become more important. Involvement tactics or Following Up to Support Improvement-tactic where the leader achieves high standards by building and sustaining momentum toward improvement, discussing lack of improvement openly and supportively, helping others see natural consequences of their continued lack of improvement and by introducing formal consequences are used more frequently. Now the organizational units are formed and the biggest question is how the work should be divided. This requires The Delegating for Productivity and Growth-tactic where the leader act as catalyst, stretching people's abilities by delegating meaningful work therefore increasing new demands on leaders caused by expanding spans of control. Once the company is into production, tasks are more routine, but time is critical. This then calls for more direction. In deciding on which mix of leadership types and styles is needed to achieve high performance, we have to analyze which stage is the organization really is according to the organizational lifecycle an organization at the innovation stage requires a leader whose style is most often a combination of the authoritarian style with core skills for building commitment tactic where the focus is on evolving role of leader where by the Leader acts as catalyst (someone who sparks action vise a vie performance in others) of relationship-building principles, interaction process, and feedback skills. This leader is the entrepreneur who has both ideas and the drive to implement them. This combination of styles is conducive to taking the risks associated with starting a new venture. During this phase, the organization is small and under intense pressure because of the possibility of failure. Interestingly, these conditions often lead to a cohesive culture and accelerations in performance. The high level of stress and excitement creates a situation where everyone knows what is happening. Communication is face-to-face, and there are few written procedures. This would require a leader who is an innovative creator who creates or promote an idea, a concept, or an ideology. They concentrate and focus the group's attention on goals and objectives. They provide a strategy and plan on how to achieve the goals and who also has a directive style; thus having the necessary drive. Typically, the creative leader is more interested in inventing new ideas directive in implementing those ideas. A variation of the life cycle is concerned with research and development needed to develop new products. Typically, 100 ideas introduced into R & D produce only one final product. The product in turn must be engineered, fabricated, marketed, and managed. The critical leadership role occurs when the product has reached saturation. Unless an innovative approach is taken again, the product life will decline. A meaningful overall growth requires continuous new-product development to offset the decline in older products. Innovation stage is generally characterized by and high risk. As the organization progresses through its life cycle, and because of the loose nature of the organization, a crisis in leadership typically arises. Leaders who are suited to start new organizations are not necessarily the same ones who are equipped to handle this crisis. They are ill-suited for the transition or growth phase, where more structure is required. Once the direction is defined, there is a tendency for management to over control and for the organization to overreact to the direction taken, which then leads to another crisis, one of autonomy. At the Growth phase of the organization life cycle, the reins are loosened again and delegation is used to distribute decision making to decentralized divisions with the help of the Delegating for Productivity and Growth-tactic makes the leader act as catalyst, stretching people's abilities by delegating meaningful work therefore increasing new demands on leaders caused by expanding spans of control.. In most organizations, another crisis arises because of the need for tighter control and direction of the organization. To achieve more control, coordination and more centralization tends to be the answer, which in turn leads to the red tape crises because of another instance of over control. Thus, alternate phases of the organization life cycle represent tight and loose control. During the Maturity phase of the organization life cycle, adaptation is the most critical requirement. It is often too late to prevent radical change if appropriate action was not taken in the prior stage. The adaptation phase determines whether the organization will survive and enter a new' growth cycle or if it will decline and eventually be taken over or go bankrupt. This last phase is sometimes very painful, as evidenced by the kinds of actions taken by leaders in companies when attempting to consolidate the growth from the prior phase. Organizations will generally move toward adaptive strategies in Maturity Phase to avoid the trauma that can occur in Decline stage. Each phase requires a different emphasis to meet the organization requirements. In a startup situation, cooperation and involvement of personnel are important in order to overcome the many problems encountered. Information requirements at this phase tend to be current due to rapidly changing conditions, and thus have a minimal impact on decision making. During the transition phase, decision making by the leader must he flexible in order to change from a start-up to the steady growth of Phase 3. Here again, because there are many changes taking place, only a slight increase in information is warranted. Phase 3 is what normally is thought of as conventional management. This represents a reasonably steady state, even though there is rapid growth. The analytic leader using automated information to maintain control over the decentralized operations is the one who performs most effectively. Maturity Phase requires an innovative leader who can anticipate the changes required to avoid a decline in Phase 5. The information requires a decision support system that can predict future alternatives in contrast to merely keeping operations "under control." If successful, the cooperative style of adaptation most successful in Phase 5 facilitates the transition into a new mode of operating. As the information requirements shift to being more selective.
After several literature reviews the research implications are there, concerning the degree of the leaders power, power distance between the leader and the subordinates, the character and personality of the leader and the type of work group, the task and the environment and the situation of diversity within the organization which also makes a great impact on organizational performance. The character and personality of the leader are important factors to take into consideration because the style of leadership must be one that he or she feels comfortable in. Each person naturally has a particular style of work and this style will enhance his or her effectiveness. Leadership styles do depend to a large extent on the leader's values and preferred style of operation. A leader who is both self-confident and confident of the subordinate's competence and trustworthiness may allow a greater degree of flexibility and more decision-making at lower levels. Where as someone who lacks both self-confidence and confidence in others will need greater self control and insist on all decisions being taken only at the highest level. An authoritarian style of leadership provides certainty as decisions will be made by one person or a small group of people, whereas relinquishing absolute control so that decisions are made at different levels by different groups of people may reduce predictability. When managers choose whether to have either a more structured or a more flexible leadership style, they are influenced by a number of important considerations. For example, when the leader's personal success and performance, speed and efficiency are of the essence, then the structured authoritarian style is the best. However, if the leader believes that it is important for the workers to experience job satisfaction and participate in decision-making, then absolute and unquestioning obedience from subordinates will not be seen as a desirable objective at all. Many leaders combine certain aspects of a structured authoritarian system with aspects of a flexible system. The particular degree of structured ness or flexibility may depend on the related factors of the type of work group, the type of task and the environment. In some cases absolute authoritarianism may lead to intransigence and opposition from subordinates, and in extreme cases this will lead to strikes, work stoppages, violence and hence impede performance. On the other hand, too much consultation and too much flexibility may be interpreted as weakness and lack of direction and may well result in disaffection by subordinates, disorientation of goals and hence poor performance. Generally, a well-educated, competent and professional work group desires greater initiative and decision-making power. Such people believe they have a great deal to offer and will feel frustrated if they are expected merely to obey. A less educated and less technically competent group will feel a need for greater authoritarianism and formal structuring. They will feel unhappy and threatened if they are required to show initiative or take decisions. Moreover, inexperienced people and learners appreciate a greater degree of structuring and detailed instructions they can follow. Much also depends on the experiences of managing teams and groups. A group that has never made decisions before or has never worked as a cooperative team will find a flexible decentralized situation seriously disturbing. However, a group that has previously enjoyed a great deal of decision-making power may find the role of passive obedience both insulting and oppressive. The relationship within the group is also significant. A group whose members respect and trust each other and who feel confident in their own competence will be happier and work far harder in a flexible and responsible position whereas a group that is distrustful of each other lacks confidence and feels incompetent needs a strong authoritarian leadership. The interest of the group in the problem or work in hand is another key factor. If the problem interests and affects them deeply, they will want to become more involved in the decision-making, whereas if the problem appears unimportant or peripheral to their interests they may be quite happy to have the decisions made by others. Cultural and sub cultural values influence the work group and their work style and performances. Traditional value oriented culture don't encourage discussions, consultation or group decision-making. Instead it placed a premium on passivity and obedience. Western culture in contrast, works thorough discussion, consultation and consensus and consensus implies lengthy negotiations. This means that certain broad principles and guidelines are agreed upon, but within, these local groups have a great deal of decision-making power, particularly in terms of how they apply these principles to their actual situations. In deciding upon the leadership style it is essential to be aware of the local cultural demands, for what might appear to be a very effective system of leadership in one country, or context, may well be disastrous in another. Finally, the expectations of the group and the way they associate themselves with authority must be considered. A group may regard flexibility as a weakness and a leader who consults such a group may end up losing the group's respect. Another group may regard lack of flexibility as tyrannical and may feel a need to undermine and defy a leader who is not sufficiently consultative. Some groups may tolerate and even welcome periods or ambiguity and uncertainty which they may regard as necessary aspects of a creative process, whereas other groups may regard ambiguity and uncertainty as chaotic and disturbing. Creative people have very different expectations from routine loving people. Similarly highly educated and highly skilled people will not tolerate systems of work which may be taken for granted by unskilled workers.
Even though the term leadership is still arguable according to researchers and they believe that employee's performance lead to organizational effectiveness and efficiency which is a result of effective leadership. Many writers emphasize that leadership styles can smooth the progress of both leaders' leadership competence and stimulate or persuade employees to perform better improve their commitment and satisfaction. This eventually boosts up organizational performance.
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