Defining The Challenges Faced In Leadership Business Essay

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Defining leadership has occupied the minds of many academics over the years and been the subject of many books which has lead to many definitions of exactly what leadership is. Some have viewed it as a series or traits or characteristics, others as comprising of certain skill sets, and yet others as a process of emphasising social interaction and relationships with others. As research has developed it has become clear that "traits alone, however, are not sufficient for successful business leadership - they are only a pre-condition. Leaders who possess the requisite traits must also take certain actions to be successful". (Kirkpatrick and Locke, 1991, p48) Nonetheless leadership is increasingly moving away from commanding and controlling employees and is leaning more towards the process. "Leadership defines what the future should look like, aligns people with that vision and inspires them to make it happen despite the obstacles." (Kotter, 1996, p25) As the rate of change increases through the 21st century the pressure on organisations to react quickly to the change in order to grow will increase, the driving force behind that change has to be leadership. Many people have tried to define the essence of leadership since the work of Peter Drucker in 1954 but it is clearly a complex process. "leadership is of utmost importance. Indeed there is no substiutute for it"." (Drucker, 1954, p158)

Leadership v Management

A distinction must be made between the terms leadership and management - terms which are often interchangeable, but organisations need to recognise that they are two distinct and complimentary actions, both of which are necessary for successful organisations. One key distinction is that we manage 'things'; assets, processes, systems, and we lead people; clients partners, teams or organisations. "Leadership is different from management, and the primary force behind successful change of any significance is the former, not the latter." (Kotter, 1999, p6) Effective leaders develop a vision and a strategy. They build up strong relationships with people inside and outside the organisation and use those relationships to map out and communicate their vision. In effect they influence other people to achieve the common goal. Effective leaders need to get the best out of others no matter what their position in the organisation, by influencing others to put aside their own self interest for the good of the organisational goal.

"The manager's job can be described in terms of various 'roles' or organised sets of behaviours identified with a position." (Mintzberg, 1998, p3) Whilst a manager may allocate resources, plan, set deadlines a leader will establish the direction and vision: a manager may organise their staff and develop processes, a leader will create creative teams through the organisations vision: a manager solves problems at a local level and track plans whilst a leader will inspire people and provide support to staff to overcome barriers through relationships built up over time; and a manager keeps their team on track by being consistent and predictable while the leader will produce positive organisational change where necessary.

Case Study 1- Xerox

Xerox - a global brand, pushed close to bankruptcy in 2000 by its inability to get things done - was turned around by the inspirational, honest leadership of Anne Mulcahy. On her appointment it was clear that the company had lost its focus - it still had loyal customers but the company had stopped listening to them. Xerox was in crisis.

The turnaround instigated by Mulcahy saw the company transform itself to be more agile and adaptable to meet the needs of its customers quickly.

Firstly, as a long time employee of Xerox, she knew the company and knew other managers which allowed her to hand pick a new management team. That team began to make changes which rebuilt the focus on its customers - the team and Mulcahy created an inspiring identity for Xerox and this drive and optimism persuaded others that the turnaround could be done - at all levels of the organisation.

Mulcahy cared for the company and its employees, to such an extent that when she had to close down part of the Xerox business she went to meet those redundant employees to apologise and to explain her decision. She had made a tough call but carried it out in a way which preserved the dignity of the people involved. She increased the knowledge flow across the organisation and listened to the employees and through her actions inspired others to be as committed to the turnaround.

In essence the company was saved by a vision of success and some hard work to achieve it which increased human value by being with those employees who lost their jobs. A measure of stability was restored and the company was positioned for long term growth.


The leadership style adopted in the organisation can have a major impact on its success. Leadership style is the combination of traits, characteristics, skills and behaviours leaders use as they interact with people, with behaviour being the most important component. Whether autocratic or democratic the end goal has to be to create a balance between the task, the team and the individual - as outlined in John Adair's team leadership model. In order to achieve balance effective leaders will adapt their style to a particular situation or to the audience they are speaking to. "If you achieve the common task, for example, that will tend to create a sense of unity and give individuals a sense of achievement. If you have a good team, you are more likely to achieve the task and the social needs of the individuals will be met at a deeper level. Success will confirm and reinforce the willingness of the 'followers' or team members to play their part, and be lead." (Adair, 2006, p27)

Effective Leaders

The last thirty years has seen a growth in the study of effective leaders, such is its importance in modern organisations, and many theories have been written to explain the ways leaders operate. Hersey and Blanchard used an approach which they called 'situational leadership' which holds that leaders use different styles depending upon the situation they are in, and is characterised by the amount of direction and support a leader gives their team. It clearly suggests that no one style is better than any other and leaders must therefore become more effective when they recognise the style appropriate to the development level of the group they want to influence.

A leader's behaviour reflects what they stand for and what their core nature is. If a leader behaves in positive and constructive ways they can earn respect and create strong connections between themselves and their team - whatever their personal position in the organisation. Leaders should focus on their behaviour because what they say and do - regardless of their inner qualities - determine their reputation and good name. Academic research into the field indicates that they should learn to speak and act to reflect certain qualities such as courage, caring, self control and optimism. "In an ethical culture, the environment does all the following:

Supports the development of organisational, human and information capital;

Ensures that all relationships are conducted honestly;

Creates a sense of pride, purpose and persistence in the organisations goals." (Bellingham, 2003, p19)

Leaders, to be effective, need to adjust their behaviours, not overhaul them, as most people can see when there is an advantage to changing certain behaviours and can take action. Leaders in organisations need to go about change in terms of adjusting behaviour rather than expecting instant change; they need to be consistent as their, and the organisations reputation is based on their behaviour over time. When a leaders pattern of behaviour consistently reflects strong character the result is greater respect, trust and stronger emotional connections between the leader and employees. "Leader character and integrity are important components of ethical leadership because they are personal characteristics that influence choices and actions that leaders make and ways that leaders use their social power." (Mobey, 2009, p116)

Case Study 2 - Chrysler

The US economy of the 1980's was in danger of slipping into recession as US companies struggled to remain competitive in the global market. A new type of leadership was called for which would create a new vision and would transform the organisation over time to create something new from something old. One such organisation which embraced this transformational leadership was the Chrysler Corporation and the CEO responsible was Lee Iococca. From the late 70's he turned the company from one facing bankruptcy to a profitable concern and did so by changing processes and policies and also the management structure.

The changes were necessary to save the company but met with some resistance from employees within the organisation. Resistance in terms of a fear of change, a political resistance in terms of an admission that the need for change was an indictment on the previous leadership. Transformational leadership was the key to overcoming that resistance. Iococca embraced the ideals of quality, excellence and empowerment and thus successfully guided the company through the troublesome early 80's, a time of economic and social change. He created a vision for the company, instilled that vision in his employees and transformed that vision into reality.

Contemporary Approach

Contemporary approaches to leadership in the 21st century have moved on from Druckers's first approach and as well as focussing on the ethical they look at the transformational versus transactional approach; authentic leadership and strategic leadership.

Transformational v Transactional Leadership

Transformational leaders accomplish innovation, creativity and change by recognising the employees needs and by helping them to look at old problems in new ways and by supporting them and encouraging them to challenge the current norms. Transformational leaders can inspire their teams to create significant change in the organisation. Transactional leaders on the other hand are good at management tasks, taking pride in the team running smoothly often stressing the impersonal aspects of the team's performance such as schedules and budgets; whilst committed to organisational goals they tend not to be effective when leading change. Transformational leadership skills can be learned and are not reliant on ingrained personality traits, and by focussing on intangible qualities such as shared values and vision can find common ground to bring employees on board during the change process. "Transformational leaders are typically emotionally stable and positively engaged with the world around them , and they have a strong ability to recognise and understand other's emotions…these leaders accomplish change by building networks of positive relationships." (Daft & Lane, 2009, p424).

Authentic Leadership

Transformational leadership recognises that success as a leader can be measured by the degree to which leaders master their external environment and have delivered increased results for the organisation. Successful, effective leaders though do more. Leadership is a process, an expression of who you are, it is an authentic self-expression which creates value. "We need authentic leaders, people of the highest integrity, committed to building enduring organisations. We need leaders who have a deep sense of purpose and are true to their core values." (George, 2003, p5) in order to be effective leaders should seek to expand their competences from simply getting results to adding value to the organisation through co-operation. Authentic leaders know their strengths and work to develop their skill set; they allow their core values to shape their decision making and act with integrity , are trustworthy and engender trust with others; they stand up for what they believe I; have a self-control to handle situations where emotions could take over - are responsive rather than reactive. It is clear that while all of the trait and strengths based leadership models define what an effective leader looks like and does; only the authentic leadership model touches on the core identity which is unique to each leader. This is becoming more important to organisations as the old models of leaders and followers becomes less relevant in changing times where everyone is required to step up and lead.

Strategic Leadership

Much is made of the need for strategy in organisations, but for long term success in difficult times there is a need to move strategy away from setting long term goals towards a more ongoing process of change. The job of a strategic leader is to drive the organisation forward so that it can thrive in the long term. "Strategic Leadership includes activities such as establishing a clear vision, maintaining a culture that aligns a set of values with that vision and declaring 'must-do' activities or strategic imperatives that the organisation needs to accomplish." (Blanchard, 2009, p267). Effective strategic leadership requires different skills and perspectives than those required by day to day operational leadership. It is broad in scope as generally strategic decisions impact areas outside its own functional area. Effective strategic leaders therefore see the organisation as interdependent so that actions/decisions in one part are done with the impact on other areas of the organisation in mind. Operational leadership does not extend this far. "A strategic leader…will need experience in more than one functional area of the business". (Adair, 2007, p74) The strategic leader must be future focussed and operating on a far reaching timetable: they must be change oriented because strategic leadership is often the driver of organisational change and the impact of the work cascades through the whole organisation. It is important to recognise that strategic leadership may come from all functions and from any level of the organisation. It is not just the job of senior executives; those staff on the front line are in a unique position to scan the environment, to spot trends or concerns and to make sense of the information. This style of leadership is best exerted when information from the top of the organisation is combined with information from the bottom ranks. Good strategic leaders will foster strategic leadership in others too, focussing on others as much, if not more, than on themselves. The process of creating and maintaining competitive advantage is too complex for any one person to develop and carry out. "A key point to remember about strategic leadership is that in all but the smallest organisations the role is too big for one person to do it all him - or her - self. You have to be able to delegate effectively." (Adair, 2007, p66)

Case Study 3 - Marks & Spenser

One of the great success stories in British retail of the last ten years has been the resurgence of Marks & Spensers' on the high street. M&S as a brand and as a company were stagnating and sales were failing dramatically, something has to be done. When Stuart Rose was appointed as CEO he was given the job of turning around the once great British institution.

The change effort began with the understanding of the critical need for change; he recognised that the state the company was in on his appointment was fairly critical. It became clear to Rose that decision making was being delegated without authority, that simple tasks like inventory were not being managed effectively and, most importantly that customers were being attracted to competitors.

Rose saw this and brought with him his own team of people to the company - people he had worked with before and who he trusted. With his core team around him the change began, everything Rose did could be traced to the theories of John Kotter. Eschewing consultants Rose instead created a mantra - he refused to call it a strategy as it sounded complicated - an appealing vision for the organisation, which was a simple, communicable statement of what had to be done, which was easily communicated to all of his staff yet was specific enough so that effort could be focussed in the right areas. He provided his employees with a simple clear vision. "Improve the product, improve the stores and improve the service". (Jarret, 2009, p59.

Rose found ways to cut costs and increase sales. He rationalised the supply chain and the number of products and cut prices to increase competitiveness. His mantra was communicated not only to the employees but also by renewing the company's focus on its core values the message reached the customers. As environment was created in all stores in which people felt good about the extra they were being asked to pay for the quality of the product.

The change went to the heart of the organisation - every member of staff underwent training on the basics of teamwork and customer service but also had the opportunity to on operational meetings. Incentive structures rewarded performance over seniority and career paths were redefined.

These examples follow Kotter's model of change management, but the key was in providing a clear and unequivocal message which committed M&S on a new path - Rose ensured that success was celebrated, gains consolidated and new goals and targets set to move the organisation forward with the changes now institutionalised into the new culture.


It is abundantly clear that the best leaders inspire the best in their employees and their success depends upon how they ignite the passion in their staff. By investing in a programme of identifying and developing leaders organisations, as has been proven in the case studies in this assignment, can ride through the tough times and undertake the necessary change programme to grow and be successful. The often hidden skill in leaders, and one organisations must recognise, is perhaps the key skill and that is the emotional impact of everything discussed above. How leaders handle themselves and their relationships will be crucial to the success of the organisation.

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