The purpose of this literature review is to analyze and evaluate the most effectiveness of leadership theories and strategies within a shareholder owned business. Analyzing typically applicable theories of leadership and their overall application to specific organizations, is helpful, because it offers insight into how that particular organization will respond in a successful way, both to the employees and to the business itself. Upon investigation, it would be legitimate to hypothesize, that the servant leadership theory is the most effective leadership theory, based on the integration of ethics and empowerment philosophy into the organization. This hypothesis being established, the literature review will evaluate several articles that pertain to this topic and support the overall concept that the servant leadership theory in leadership is the most applicable to an organization with shareholders. The reason this particular analysis is important, is because it offers stability of information to the leadership structure of the organization, and ultimately the well being of those within the organization and purpose of the organization. Consistency within any organization is structurally sound, and the further application of theory within an organization that has shareholders, evaluates the potential growth for an additional span of time, not normally accounted for by business leaders.
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Variables within this course of study would be size of the organization, hierarchy of organization, and applicable definitions in conjunction with the overall concepts of leadership theory. Discussions of Servant leadership theory, would, to some extent, contain variables as the effectiveness of contained theory relies on the integration of the leader within the organization. The overall intent, however, is to remove as many of the variables as possible, and to establish constants within the dynamics of the analysis. Applications and integrations of concepts within Servant leadership, such as the empowerment philosophy as well as the ethics, vary to a degree, but as a whole are theoretically more precise in adding to the organizational needs and characteristics.
In perspective, the application of leadership theory within any business, should be the desire of every business owner as business with shareholders are typically more community related and are more advantageous in being successful. The corporate responsibility of the organization to be successful is significant. Addressing the opportunity to be successful, lies the characteristics deemed crucial in our culture, such as empowerment philosophy and ethics. Both of these characteristics can be seen and evaluated in the principles of Servant leadership, and its integration of principles. Acknowledging these characteristics are crucial for the organization with a hierarchy of shareholders. This analysis is conducted with the interpretation of Servant leadership theory and its foundational characteristics, which include empowerment philosophy and ethical decision making. These particular foundational characteristics are not exclusive to the Servant leadership theory alone, but offer a significant level of intricacy with the overall principles of organizations that have shareholders within the leadership structure. The methodology of reviewing this information in this particular fashion is beneficial, because it evaluates the effectiveness of a leadership theory, by analyzing the effectiveness of its foundational characteristics, independently, and not as a generalized whole theory. Variables within this analysis are limited, and apply mainly to the organizations that the theory itself is applied to. With this in mind the evaluation of ethics and empowerment philosophy are crucial, as business have culturally lost the engagement of ethics and empowerment within their business theories and dynamics (Marcoux.2000).
Servant Leadership Theory and Application
The process of evaluating the most appropriate leadership style within an organization can be, at any given point a daunting task. The analytical process of evaluating the correct foundational principles as well as the dynamics of the leadership structure, followed by the operational goals of the leadership strike fear in the heart of many individuals stepping into the roles of leadership. Operationally, it is the responsibility of the CEO within an organization to maintain the appropriate foundational structure and guide the observations of accomplishment through the success of the structure (Blanchard, pg 255). Enlisting the attitude and implicational principles that the individual that is being serviced is what comes first (in an organization or business) propagates the realization that in effect, the passion of the organization must be to benefit those that it actively seeks to influence and service. Introducing these thoughts into the gamete of strategic and operational leadership, one must realize that dynamics of this theory is empowerment philosophy (to motivate individuals to succeed in accommodating those to be served) and ethics (providing services in a way that demonstrates just and fair business decisions). Blanchard well defines these principles as well as explains the opportunity for success, relies solely in the environmental structure. Furthermore, development of the organizational culture within that environment returns focus on the "heart" of the CEO and what their ultimate goal with the organization is to accomplish. This being the emphasis of Blanchard, in any organization, proves that an inadequacy of other leadership theories exists. Organizations or business that have been successful in the last 10 years, including Microsoft, Google, Southwest Airlines, and Dell Computers, have all implemented similar dynamics with their leadership, and this is the Servant Leadership theory and format of structure. Apart from the companies or organizations that do see success in applying these leadership theories, a big form of development within that culture is the application within that theory of both empowerment to the employees and the application of ethics in operations. Strategic leadership, in the end equates to empowerment, while operational leadership equates, in the Servant leadership theory to applicable ethics. The application of this theory significantly transcends to all dimensions of the both parts of the organizational structure. Any subgroups within the organization would, out of necessity, need to function on the same level of foundational characteristics established for the organization itself (for example shareholders and board members). The introduction to this concept and evaluation of the overall effectiveness of the characteristics is not a new concept. Servant leadership in an applicable sense has been described as specifically having 10 main characteristics that are crucial to the ultimate application of principle (Spears, 2005). Spears, the President and CEO of the Greenleaf Center for Servant Leadership advocates that there could be exponentially more characteristics and these are simply the easiest to define. Reviewing these ten guidelines, suggests that if an individual were to adequately group the dynamics into categories of application, they could in fact be grouped into Empowerment and Ethical considerations within the foundational strategies of Servant leadership theory. While it is evident that the Servant leadership theory could be applied to organizations that are considered Not-for-Profit, the organizations or businesses that have multi-levels of shareholders or investors could significantly benefit from the overall application of the leadership applying this particular theory (Spears, pg 6). The simple application of the principles of Servant leadership, to all levels of an organization, directed and driven by the CEO or President, would emphatically include those individuals that also had a vested interest in the organization when applied. An overwhelming dynamic of the Servant leadership theory is that everyone else's considerations must be evaluated and considered, an epic theory established originally by Christ (Bible-NIV, Zondervan). While the application of the Servant leadership theory has its roots based in the Bible, there is no significant "over spiritual" application of principles. Placing one's interest above and beyond something indicating significant gain, is truly the crux of the leadership theory. Interest in meeting individuals' needs within the organization, regardless of its purpose or size is one of the fundamental achievements of any organization (A. Maslow). Maslow's Hierarchy of Needs expresses that for an individual to be successful and accomplish significance in their life, they must apply an interest in others and meet others needs. In a large spectrum, this too, is the necessity of the Servant leadership theory both in an operational and strategic fashion (Blanchard).
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Ignoring the connotation that "Servant" leadership implies leadership is somehow negligent unless ignoring everything but employees, there would certainly be no argument that a CEO's responsibility is to all of the individuals in the framework of that organization. Servant leadership is not a structural base of theory comprised of ignorance of normal business practices. Rather it is an intricate theory that is becoming more and more prevalent to organizations as the cultural paradigm of employees needs within organizations change in generational format (Feldheim & Johnson, 2005).
As a characteristic and main dynamic of the Servant leadership theory, empowerment can be a significant addition to the overall philosophy of leadership within an organization. A key component of the entire structure of the leadership theory is the philosophy and pattern of contributing to the individuals within the organization performing the tasks. In this particular paradigm, it would be the operational dynamic of leadership. This key pattern is crucial for the ultimate development of an individual and for a pattern to be started for the organization to contribute back to the individual within the organization. This individual within the organization could be an internal employee or external employee. External in this case would be considered a shareholder or investor. An internal employee (or direct employee) sees more of the operational function of the organization, but in a similar fashion acknowledge that proper leadership contributes to the overall wellbeing of the organization, motivating and meeting the needs of the internal and external employees (Rude, 2004). The psychological aspects of this dimension are massive. The implications of an organization being considered to meet the needs of the individual whether internal or external are crucial to the organizations success. One such evaluation of the typical implications is the involvement of empowerment, which consequently strikes at the core of the dynamics of the individuals within the organization. As seen from research and applicable statistics, companies have developed an outstanding lack of retention, simply due to the lack of engagement that employers offer their employees (Rude, 2004). This particular lack of engagement, (considered a strategic leadership application) is estimated to have ramifications of a national loss of $300 billion in productivity. This productivity, however, can be analyzed and broke down to accounts of injury, illness, turnover, absences, and fraud (Rude). These particular characteristics of productivity do not typically affect shareholders or investors. However, the evaluation and retention of the employees, coupled with the overall success of the organization are in fact measurable products for the sake of the shareholders. A shareholder that is involved in the overall scheme of the organizations' foundational operations signifies an additional level of accountability that influence the directive paths of the CEO or President of the company. Rude's evaluation and continued research on this particular topic is effective, simply because it is exponentially applicable to many different organizations, institutions, and corporations. In any environment it is crucial to analyze the past to evaluate and direct the future, especially where the organizational leadership is applicable. Significance in the evaluation of shareholders, and their appropriate involvement in the overall direction of an organization emphasize a characteristically new approach to the accountability of an organizations leadership. A great deal of the involvement, however of shareholders in this particular category is simply perception of accountability, as most shareholders do not tend to contribute a significant amount of direction into the operational standings of an organization. Rude's continued investigation into the application of the empowerment philosophy also offers statistical analysis indicating an overall success rate of servant leadership theory being applied into an organization. These results far exceed the statistical probability of institutional actions to improve internal or external employees attitudes and actions towards the organization. Simply put, Servant leadership, and more specifically empowerment offers employee meaning. This meaning can transcend to any individual, including a shareholder or investor.
Further investigation can prove the philosophy of empowerment also has a negative side and negative implications of the foundational strategy and operational design of the organization and leadership. This negative side is more emphatically known and can be described implications leading up to "toxic leadership". Toxic leadership in itself allows a slow degeneration of the fabric constructing the environment of the individual's needs being met. Toxic leadership can be devastating and be a simple effect of a leader forgetting an employee's needs. This in turn can result in extreme environmental disruption and an increase in retention problems. Overall the impact that it can have on a work environment is devastating. While it may be addressed and fought, the principles of application, continuing within the organization, in many occasions, the end results are a result of the failure to achieve success (Rude). While in this particular context we are analyzing empowerment application in the context of business and shareholder responsibility, the same content can be successfully applied to other fields of business and various organizations. There has been a significant level of success particular with applying these principles (Scheiner, 2009).
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The integration and concept of ethics within the business or within any leadership structure represents strategic characteristic of leadership strategy. The study of the purpose behind an individual' actions have long been a subject intense scrutiny whereas the structure of leadership in an organization is concerned. In many occasions it can be blinding, the extent to which it is pervasive through the entire core of the organization; that is, having an effect on strategic decision making. Many times these decisions have an impact on not only the internal operations of the organization, but also the external implications of success or failure for that organization. While there are many different facets of defining ethics, for the purpose of this analysis, it is considered to be doing the right thing, based on moral and integrity based choices. The extent to which these choices facilitate success or failure for an organization, also guides the driving force in the culture (Abedian, 2010). Abedian stats that unethical behavior has quickly become a cross containment in our society as companies have ignored the common sense of using integrity in making decisions that affect the entire organizational structure and design. While business values and ethical decision comes from Judeo-Christian roots, all forms of religions recognize the importance of basing decisions on a divine revelation and developing a judicial sense when applying decisions and judgments (Abedian). The development and critical role of values demonstrate themselves through several principles that are applicable across many different forms of business and organizational structures. These values include: truthfulness, trustworthiness, integrity, fairness, and collaboration. Such values characteristically develop to form continuity within organizations as the driving force of successful practices. Organizations that fail to recognize the significant level to which these principles operate in an illegitimate fashion, anticipating little direction and accomplishing minimal results in a strategic format (Abedian).
The format of application in an organization, stressing the integration of ethics and empowerment are significant in the overall success of an organization. The further involvement of the shareholders within the process, impacts the psychosis of the organization. Intricately, reviewing the impact of such principles on the shareholders (and structure of the organization), offers a significant approach to the overall success of the organization from an internal perspective. Applying these principles, revolutionizes the psychosis of the organization in a unique fashion that quickly envelopes the philosophy of dispossession where the shareholders are concerned. The philosophy introduces a significant level of accountability and this accountability offers control and preserves a unique level of authority (Hutchison & Alley, 2010). Encouraging the shareholders to participate in the events and happenings of the organization is paramount to the overall implementation of the additional accountability. In the culture and democracy of the United States, the impact of shareholders emphasizes more of a decisive formation of policy. This decisive formation of policy is a gateway for the application of checks and balances, not in an unfamiliar fashion to the country's founding father's intent with democracy itself. This establishment and continuance of the pattern of ethics offers a democratic solution to hold corporations responsible for their actions and limit a significant form of power. Without further evaluating the effects on power, the data proves that involvement of shareholders strengths not only the environment of the organization, but also the economy that the organization is part of, simply because it includes individuals in multi-faceted levels of accountability and purpose (Hutchison & Alley).
Ultimately, the responsibility of the shareholder itself merges into a theory in itself, demonstrating that the integration of the shareholder's interests are in fact important and must be catered to, regardless of the economic situations. Because of the intricate details of such a involved theory (involving shareholders) the conclusion of the hypothesis would be detailed in selecting Servant leadership as a detailed leadership theory to adequately suite the overall needs of the organization that does in fact have shareholders.