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Leadership theories are widely spread around us with their roots emerging from different practical examples and real time implications from numerous organizations. The basic aim for the evaluation of leadership theories is to provoke an environment of successful management and maintain the smooth running of the management with management and leadership qualities.
Following leadership theories are quoted from Coca Cola Company, how the company has gained such phenomenal success and a word from CEO. Coca cola Company mainly sees these theories to build the leadership qualities among their employees.
Behavioral Theory With Reference To Coca Cola Company:
The developers of behavioral theory suggest that leaders can be made, they are not always born. They believe in the fact that leadership qualities can be learned over a period of time and they are not merely innate traits but they are successful behaviors of describable and explainable actions present in the behavior itself. These actions are easier to be learnt rather than adopting numerous different traits.
CEO of Coca Cola Company persuades and ensures that the employees are given a chance to learn and develop leadership skills monitoring the improvement from time to time followed by selecting those employees who possess successful leadership skills. Developing a behavioral theory is comparatively easier assessing leaders and leadership success actions. Here CEO can recognize behavior use which raises to failure there it added a second layer of understanding.
Trait Theory With Reference To Coca Cola Company:
Trait theory suggests that successful leadership is an amalgamation of traits that defines leadership skills and qualities. Companies like coca cola assess the employees on psychological traits focusing on unique qualities. CEO of Coca Cola Company evaluates the employees on the basis of their behaviors and work structures. Trait theory suggests the possession of the following qualities and skills confirms successful goal leaders and Coca Cola Company focuses on retention of them.
Willing to assume responsibility
Tolerant of stress
Adaptable to situation
Desire to influence others
Alert to social environment
Achievement oriented and ambitious
Fluent in speaking
Diplomatic and tactful
Knowledgeable about group work
The above list of qualities and skills are essential in achieving organizational goals and serve as an inherent part of a good leader.
Participative Leadership Theory:
This theory aims at developing an understanding to decision making in different scenarios. The theory suggests that people working in teams must be more collaborative and less competitive. Team based decision making is better and more committed than individual persons.
Coca Cola Company uses this theory and focuses on the development of teams for more focused and cooperative decision making rather than being alone. Leaders are selected for individual teams based on qualities as commitment, collaboration, cooperation, motivation friendly behavior etc. different programs are arranged so that the team member can participate and develop those leadership traits. Coca Cola Company effectively inculcates this process.
Impact Of Managerial Styles On Organizational Effectiveness At Nestle':
Democratic and Decentralized Management:
This dynamic world is a constant threat to leaders bringing challenges and even opportunities. To achieve organizational effectiveness Nestle has thereby gained insight to developing and ensuring Democratic and Decentralized Management Style pursuing decision making.
Nestle delegates the authority of decision making sharing it among the workforce whereby maintain team leaders to adhere to single coherent direction. The team members are all converged to individual participatory roles for full involvement pertaining to organizational effectiveness.
It also believes in sharing of vision and goals and participation of all employees to gain operational speed, removing organizational barriers, leveraging strength of people, and focusing on organizational effectiveness.
Nestle supports and employs the idea of minimal levels of management so that the information can be flown through all the levels and there is no communication gap pursuing organizational effectiveness.
The idea of minimum spans of control and flexible authority and flatter organizations enable people development and also focusing on fulfilling of targets and goals.
Nestle focuses on direct personal commitment and encouragement therefore decentralized management style is the best suited for this organization whilst seeking organizational effectiveness when all the employees will feel themselves a part of the organization and work in correspondence to that.
All the above mentioned goals cannot be achieved and organizational effectiveness cannot be in full bloom if applied another management style known as Autocratic, which does not allow the information to be shared among workforce and discourages employees' involvement in decision making and gives off a centralized organizational structure not suited to Nestle at this stage.
Motivational Theory Impacting Employee Motivation:
Maslow's Hierarchy Of Needs:
Motivation is defined as a driving force initiating a particular behavior in response to drive (external/ internal cues). A motivated employee is significant to organizational success. They make your organization lucrative and are highly productive and essential to different organizational working conditions.
Maslow's Hierarchy of Needs theory focuses on the employees' internal needs that must be full filled at every level prior going to the next level to motivate their behavior.
Considering five basic needs of Maslow involves the fulfillment of these needs along the pyramid as follows:
Physiological needs: reflect the basic needs to be fulfilled in the first place which includes food, water, clothing, shelter etc
Safety needs: are actually the security needs including medical treatment, adequate wages to support family, better household and the like.
Belongingness needs: include the fulfillment of needs of social relationships, maintaining social circles of friends and social networks, being essential part of communities, an active member of society etc
Esteem needs: encircle the aspiration for realization, ability, status, and acknowledgment.
Self actualization needs: include the upbringing of yourself seeking new opportunities and looking for greater chances of growth in you.
If the organization is fulfilling these needs, the employee is motivated and works in order to retain organizational success, development and growth.
This motivational theory is found to be in common practice by almost all the firms around the world today including IBM, Pepsi, Coca Cola, Nestle, and General Motors etc ascertaining to employee motivation and morale.
Theories Relating To Work Relationships and Interaction:
As the organization continues to grow and expand globally, the evolving work relationships are placed continuously on a broader spectrum. This evolution put forth a challenge to management theory by continually changing the assumptions under which organizations are doing their work. Following theories are focused on work relationships among employees in an organization:
Personal Flexibility and Adaptability:
This approach is based on the removal of Inter-personal conflicts with its viewpoint to keep the group members appropriate likelihood to develop their own individual comfort zones as being essential part of the group. One way to remove and root out the interpersonal conflicts among the group members is through "Mediation approach".
Systems perspective approach of work interrelationships:
This approach delivers the idea that communication is the binding stone as a result of which different systems and subsystems are retained by an organization.
Groups are considered to be more inclined towards performing faster and better when seen in a shared way rather than their individual output expectations. Positive synergy is useful in order to achieve more from the group performance as a whole.
Interdependence reveals the fact that all the employees are dependent on each other. The output of one department and employees become the input for other department and employees, if a ball is dropped by one, the group as a whole is likely to meet failure and goals would not be achieved.
Homeostasis refers to the natural tendency of balance, synergy, coordination and equilibrium, maintained among homogenous or heterogeneous groups and teams of employees. Moreover it is also referred to as the propensity for a given system to continue to maintain its stability in the time of change.
Politeness theory (PT) was developed by Brown and Levinson hence explaining the fact how interactions are maintained and delivered among participants (employees) by using politeness strategies. Based on Goffman's (1967) conception of individuality and face work, in the politeness theory by Brown and Levinson (1978, 1987) verified when, why, and how interpersonal communication is raised through, or in the absence of, politeness.
Characteristics of Different Organization Structures:
Organizations are established based on various goals that need to be accomplished over the period of its life, and these functional/ operational goals are achieved by synchronizing the efforts of employees and various other participants of the organization according to the following organizational structures.
Functional structure is the division of work force and work processes into separate respective departments. The different departments such as sales force, marketing, finance, research and development departments etc have their own functional perspectives pouring a single coherent outcome.
Divisional structure is used where larger organizations are taken into account, and when the larger organization is divided into different divisions and sub areas. For example, the now-defunct Nestle' Company is organized into divisions for each geographic area to handle specific needs.
Matrix structure is an amalgam of divisional and functional structure. Organizations like Nestle' a large multinational company, the matrix structure allows for the benefits of functional and divisional structures to exist in one organization.
Culture and Structure of Nestle' and its Impact On Organizational Effectiveness:
Organizational Structure Of Nestle:
Nestle is a worldwide dairy and beverages organization tremendously successful across the world. Nestle exhibits a decentralized organizational structure minimizing the span of control and reducing the levels of management.
Organizational effectiveness is a function of organizational culture and its structure depending upon the operations it performs. Nestle is a decentralized organization and it contributes to the success and growth of this organization.
Nestle allows its employees equal opportunity to enjoy and sustain a high level of autonomy. This gives them enough courage, sense of responsibility and motivation to perform their jobs fulfilling their job responsibilities. Major changes and the strategic decisions are executed and planned at the headquarters level but the daily routine based activities are handled by the employees. The subordinates are allowed to concentrate, derive and implement daily operations. The responsibility of taking operating decisions is pushed down to strategic business units. The employees enjoy a high degree of autonomy with regard to decisions involving pricing, distribution, marketing, human resources, and so on. SBU or regional managers are not allowed to make operational or strategic decisions on anything except for exceptional situations.
Nestle follows a traditional top down hierarchical structure of command. The company's executive body is the Board of Directors. Leading the company is the Chairman of the Board and Chief Executive Officer. Nestlé therefore allows the unchanged person to hold both the positions.
Organizational Culture Of Nestle:
The culture of Nestle' comprises of the distinctive behavior patterns and values that makes up the organization differing them from the rest. A simple and quick assessment of the organizational culture can be made by interacting with the people working in the organization and by exploring how people interact with each other and perform their jobs.
A number of aspects of Nestlé's values and hence working practices relate to interpersonal relationships among employees, nestle believes in maintaining fair and unbiased relations without any disconcert of race, age, gender and other diverse cultures. All the employees are encouraged to embrace the Nestlé way of working and interacting with fellow employees and subordinates. Nestlé aims to maintain fair, sincere, direct, and caring work environment for people making up the organization.
Nestlé has therefore successfully developed a fair and unbiased set of values and principles enabling the employees to get maximum fair and honest treatment. These values and principles clinch the involvement and participation of diverse cultures, respecting them and developing long term relationships with all of its suppliers and customers. These values play a major role in building the organizational culture.
The culture of an organization will alter and shift over time, both in response to changes in the external environment as well as to internal pressures within the organization.
Nestlé Lesson Plan from The Times 100 website: www.tt100.biz
Taking the present merger into account the new organization thus formed needs to be restructured on various grounds. I have thereby stated few dimensions that need to be discussed for employee effectiveness in the new organization:
Organizations can facilitate information and creativity through effective communication and effective HRM. Creativity is at the heart of all organizations and recently has gained a principal focus. For example IBM focuses in innovative engineering and its success and growth depends on creativity in field of technology and newer unique outputs. While recruiting, strategic HRM is concerned with selecting those individuals who continues to elicit high level of creativity in their work, skills and abilities, who knows how to respond to various solutions in unique ways, and undergoing different problem handling parameters. As IBM has reported that "one of the greatest achievement for any organization to have leadership competence is through Creativity"
The importance of learning in organizations has been raised to a point that enables the employees to learn from their mistakes and a new organization that is undergoing restructuring after merger must take into account this parameter for performance. Hero merged with Honda Company in India and went into restructuring of organization leading to organizational learning, to help make the new management learn a blend of new and existing organizational operational styles. Organizational learning brings continuous improvement to employees performance and thereby facilitation organizational success, survival and growth. According to the book "The Fifth Discipline"Â by Senge, explains his point of view as
"The ability to learn faster than your competition may be the only sustainable advantage for your organization in the long run".
Moreover Learning organizations helps in generating and practicing new knowledge. This ability enables companies to stay ahead of change and the competition.
Effectiveness of Team Learning:
Traditional learning had been the practice of the past when the peer team leader primarily acts as a disseminator of information responsible for ensuring learning, solely. On the other hand, team learning means to empower the team members giving them the opportunity to think, plan and act, enhancing their abilities to perform. According to the researches by various institutes including Stanford University and University of Michigan etc, team based learning is an important evaluator for effectiveness of employees (team members). Sharing of information among team members and flexibility to perform and cooperate within teams is essential to the completion of any task on a regular basis. Through team learning, members freely and easily recognize their shared and individual roles and responsibilities in an effective way.
Team Learning Effectiveness is a proven and practical diagnostic tool for assessing team effectiveness and improving work group performance in any organization especially for a new restructured one like this.
Approaches To Organizational Decision Making:
Valuable information is the building block to organizational decision making. Many firms such as Mckinsey and Co. provide consultation on how firms use the appropriate data. Organizations have preordaining access to large amounts of data, including consumers, economic concerns, employees, stakeholders, financial figures, competitors etc in raw and unstructured format. An organizational setting like this binding into a merger recently needs to focus on evaluating the importance of data collected since past. In order to realize value and to help organizations become more sustainable in the longer term, it is crucial to improve the ways they measure and manage their performance.
Such mountains of data make decision making difficult and vague. Therefore value data is extracted from the raw data known as information which is meaningful to the organization when updated, relevant, timely and accurate. Using different information systems and information technology tools make effective decision making. Tools such as Decision Support Systems and Management Support Systems etc are of critical value.
Approaches To Risk And Uncertainty In Decision Making:
Different workshops are conducted enabling the participants to undergo decision making based on simulated situations. This enables them to perform well under actual circumstances. Workshops increase their level of performance and risk handling under uncertain conditions.
In addition to this I also prefer the development of mitigation policies to be pursued under risky and uncertain circumstances while undergoing decision making.
Integrated assessments can inform decision makers of the relationship between risk involving factors, adaptation potentials, and costs of emission reductions and the benefits of avoiding uncertain scenarios. These assessments have frameworks to deal with incomplete or imprecise data. As with Unilever and Procter and Gamble they estimate the demand and supply based on pre defined policies to handle the uncertain high or low demand times.
Evaluation of Effectiveness of Organizational Decisions:
Organizations such as International Energy (a masked name) made critical mistakes in decision making incurring extra ordinarily high costs referred to as failure costs. Therefore successful organizations such as Wal-Mart employ a structured approach means establishing assumptions and procedures for "the way we make decisions around here."
There are five critical elements pursuing effective organizational decisions.
The above diagram explains the systematic approach to organizational decision making including criteria, facts, alternatives, commitment, and closure. The main objective of decision making has high lightened that particular goal you want to accomplish in the long run through effective decision making, whereas having vague and incomplete goals leads to failure. Wal-Mart,an online retailer store focuses on goals and makes decisions accordingly.
Companies like International Energy focuses on reliable and accurate use of facts when and where required. There is too much data but screening the necessary and vital valued data is an important step t effective organizational decision making.
Gaining insight to application of alternatives is essential to making right choices while making critical and great decisions. Seeking for alternatives reinforce the need to examine more than one option and nearly always improves the quality of decision making as the CEO of International Energy reports.
Companies like Dow Chemicals, Intel, and Wal-Mart etc embed decisions regarding business-unit strategy in contracts that detail the specific strategic decisions that have been made, the resources required to implement the strategy effectively, and the individuals who are accountable for delivering on the decisions.
Moreover when the decision is not communicated,, responsibilities are established with their time frames implementation and a continuous feedback monitoring mechanism for performance, an effective decision will be of no use. Wal-Mart decided not to offer steep discounts during the holiday selling season. On Friday after Thanksgiving, competitors noticed Wal-Mart's strategy and began trumpeting their own holiday discounts, sensing an opportunity to draw customers away from the retail giant. But Wal-Mart was closely monitoring results, and its executives figured out that the new scheme wasn't working well enough. They quickly reversed the decision and within days, every store in the Wal-Mart system had returned to the company's traditional practice of holiday discounting.
Analysis of the Effective Management of Change in Organizations:
Change management has always been a challenge to the organizations. The dynamic environment surrounding the organizations keeps on becoming uncertain and unpredictable. To manage the flow of events it the principle of change management must be of focal point. Moreover, for an organization undergoing a merger, the new management resulting from the combination of the two pre existing organizations, has to undergo challenging situations of change. This change is necessary as well provoking effective management styles.
The change management is about maintaining a dynamic equilibrium within the environment you are operating. By diagnosing the situation which arises as the result of change management one can ensure that:
The goals can be achieved as there is enough stability
There must be operational continuity so that nothing would be distracted as the result of change
The organization is adaptable to different situations and can manage the internal and external events as well as the change
There is enough motivation so when the rite time comes the change can be adopted easily
The management role is all about coping with the change so that the processes (internal as well as external) should only be minimally disrupted as accelerating change can increase the level of complexity and management problems. It can be a range of activities which can act as a trigger for change like old machinery is beyond repair , changes in legislations , changes in technology , merger and acquisition activity (as in our case) taking place as a consolidation in the banking sector , economic scenarios etc. according to Geliner and Earnst, 1996:
"The change will bring in Fresh challenges and tasks; this will largely offset the job security situation as more motivation can be gained"
The behavioral and traits theories are essential components for understanding the relationship of leadership styles and linking them with innate or learnt behaviors and/ or characteristics. The significance of participative leadership theory is through its implementation at various levels in every organization In addition to this, motivation at every level leads to success and growth promise on part of employees, fruitful for the organization.
The different organization styles, structures and diverse cultures operate in large and small organizations. Their base is made stronger with the practice of such rules, policies, structures and cultures making them an inherent part of their organization and allowing new and existing employees to act in unison with them.
Lastly the different modes of decision making and the risks in making decisions are also evaluated on experience and judgments based on knowledge and insight. The team based learning helps in better solutions to make the employees perform more collaboratively and less competitively.
Lastly I have concluded through my vigorous analysis that leadership theories, motivation styles, organizational culture, structure and styles are most important for the proper functioning of an organization. The effectiveness of decision making factors are also very fruitful and their understanding of flow of information is significant to any organization whether big or small.