Organizational behavior is the study which mostly looks at the influence of certain individuals and teams and how they carry themselves and behave in an organization for the purpose of using such information to improve the productivity of the organization. This study focuses on individual behavior and how that affects the company's productivity. The personality of the people involved is an essential determinant on how they are going to interact with other people in the organization. People's perception on issues also plays a big part in that the way one individual views things is different from what another person sees. This is a cause to many office conflicts and politics. The diverse views of people also affect the communication within an organization. The situation also determines ones behavior in the he /she reacts in different situations thus each environment and scenario might make one to take different actions that are acceptable by others or do things their own way without consulting. This is what brings about the style of leadership that one should use as a leader (Alexandrou 2011). Organizational behavior also looks at the commitment of an individual to an organization and whether he is focused on the company's objectives and is ready to fulfill them and how long one would be a member in a certain organization. This involves looking at whether the employee is satisfied with what they are doing and how this translates to the company productivity. The managers should realize that the productivity of an employee is determined the kind of opportunities offered to demonstrate their capabilities on the job. People should also be motivated by their employer so as they can feel empowered to perform at their best levels.
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Leadership is a very crucial point in successfully implementing decision making in an organization and improving on work relations. For an organization to achieve its goals it requires its management. Leadership is very important especially in this financial institution with such factors of contribution as building teamwork and improving confidence and participation of employees. It also improves on discipline and efficiency of the organization (Anonymous 2011a). Ethics are very important in leadership because they act as guidelines that are followed by individuals to make the right decisions and also help to make people act in a rightful manner and follow the policies of the organization (Clark 2010). Leaders have a responsibility to inspire members in an organization and direct them to the right course to achieving the vision of the company. A leadership style is mostly characterized by methods that are used by senior management leaders in the way they provide direction to their subordinates. It is also on the kind of approach they use when dealing with those who are under them and in their planning and in their influence in giving motivation to other workers in the organization. On In my organization which is a financial institution there are two common leadership styles that are used by our managers.
For this paper we are going to look at two finance department managers who practice very different styles. One uses the classical authoritative style of leadership while the other one uses a more participative leadership style.
Mr. A is the head of the loan lending department of our organization. His leadership style is very classical type where he is the one in total command of running the business of this department and only gives orders to his subordinates to execute without any regard to the opinion of others or consultation to the actions he performs. This leadership style is what is referred as Autocratic leadership where all important work and decisions is left to only one person who is the top leader and only uses his subordinates as tools to achieve the goals he has set for his department. This leader is very authoritative and takes individual control where the choices one makes are mostly based on their individual ideas or their own judgment with minimal or no consultation. He derives authority from his position and concentrates it on himself only issuing work and expecting it to be done without been questioned. This leader uses threats to influence the subordinates to do their work and does not even trust his colleagues and those under their authority thus they don't allow them to input on any issues affecting them or the organization. Although this leadership style has been criticized a lot because it is seen as dictatorial it is however effective in situations where one has new staff who don't know the procedures of the organization or when a decision needs to be made in a short period of time. The manager can also use this form of leadership in cases where his/her power is been put to challenge by staff and also when all the other leadership styles are not working effectively on your staff.
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On the other hand Mr.B who is the head of the Collection department in charge of all credit accounts of our customers. His style is very involving as it incorporates all the people who work under him. This type of leadership is known as Democratic leadership. This is where the manager is in consultation with others when deciding on important issues but still holds the final decision. This leader also delegates work to his subordinates and make them have control over the tasks they perform and only oversee the work done by his staff and help his staff to evaluate their own performance. This form of leadership is very participative and makes all people concerned feel equally important. There is the recognition of staff achievement and helps people to set their own goals and grow professionally on the job. The leadership style that is used by Mr.B is most effective in encouraging team building and provided a positive working environment. As a leader he is flexible and adaptable, and he is known to create trust and personal integrity among the bank's employees. He makes efforts to inspire the organization employees by constantly entrusting them with tasks and also listening to them offering encouragement and support to individual employees (Anonymous 2010c). He has been successful in realigning the employee's norms and values, encouraged personal changes and has helped the bank's employees to exceed their expected performance. As much as this leadership style is among the best it also has some disadvantages which include slow decision making because of too much consultation on one decision and can make people and can also in cases where the roles are not clearly stated it can lead to miscommunication and failure of achieving the goals set for the organization in time.
Leadership on Organizational Power
For an organization to be successful or unsuccessful the most influencing determinant is the leadership. The leadership styles used by the two managers have different effects on the workers colleagues and the way power and politics in the organization are played. Organizational power is the ability of an organization to utilize their resources and make them work for the benefit of the organization. It is also the capacity of an individual or a group to manipulate or influence other people (Anonymous 2011b). Power brings out dependency among individuals who work in a certain organization and it also brings out the much needed productivity as many people realize their potential of how much more they can do to influence the direction the organization is to follow. This ability to influence others should not be confused with authority as authority is exercised under the limits of legitimacy. In an organization there are different types of power that are exercised by managers in an organization. There are three types of powers that are particularly derived from the type of position and responsibilities that one has in an organization. These powers are:
Legitimate Power: This type of power is given in accordance to the agreement among the members in an organization. It gives one the right to ask for certain behaviors among others. This power comes through job descriptions and also rules that guide the workers in an organization. Some of the people considered to have legitimate power over others are the company executives who hold the top positions and have subordinates who are working under them. The legitimate power is best exercised in areas where the people have accepted the unequal power distribution and this makes them likely to comply. This power seems to be very ineffective in cultures that practice low distance power because here the employees fell they have the right to be involved in the decision making of the organization rather than following orders and commands of what to do from their seniors.
Reward Power: This power gives an individual the ability to reward others for their input into the organization and also to punish or dismiss employees who don't do their part. This power gives the manager the control over work assignments, the payment and promotion and demotion of employees. .It should also be noted that employees also have the power to influence the promotion of their superiors with the kind of results they give back to their supervisor. When this is introduced it offers the balance needed in the organization.
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Coercive Power: This is commonly exercised by managers who want to instill fear and give punishment on their employees .It is the opposite of reward power and uses force to make one to comply with another person's wishes.
The other two types of powers listed below have their sources come from the personal characteristics of the individual who is in power (Dattner 2011). These are different from the others because unlike the prior powers that come with the job, these ones are brought by the person into the organization. They are:
Expert Power: This power comes from within an individual and one uses his or her skills and knowledge that they have in their capacity to have influence over other people. This power is also becoming common among junior employees who have the knowledge that is needed to acquire maximum productivity in an organization making even the executives to depend more on their subordinates. Expert power also gives the individual the right to demand and pass their grievances in relation to having a working environment that is conducive and even a raise in their salary.
Referent Power: This also comes from within and it grows slowly when other people tend to like and respect an individual and even be able to identify with them. It is mostly exercised when a person has character traits and resources that are desired by others. This power is characterized by a person's charisma in relating with others which makes them to earn respect and trust from others.
Leadership on Organizational Politics
Organizational politics is a system that is used to rule an organization by bringing together conflicting interest so as to move the agendas and perspectives of the people in structuring of an organization (Dattner 2011). It is characterized by the competition for resources and power and conflicts among individuals and groups. Politics are brought about by the differences of interests among the people working together. This means that the organization has to set mechanisms that will ensure that all these interests are put together in a manner that all the resources will be directed towards the progress of an organization. Some processes such as making of decisions which might seem as rationale processes are also political as individuals want to push their own personal interests. Politics in an organization is divided in two major categories:
Legitimate Political behavior is the usual day to day complaining to the managers through the right chains of command, establishing coalitions that are not part of the organization, violating policies and to obstruct the process of making decisions.
Illegitimate Political behavior is more serious and involves violation of rules that are very important to an organization by performing activities that would even sabotage the organization. This occurs when the employees are in resentment with their manager and they is no other channel for them to express their disagreement and dissatisfaction on the type of leadership they are under.
The success of the two leadership styles used by these managers varies differently on their impact on the organizations' employees.
On the first one where Mr. A uses autocratic leadership, the influence of these is that the manager has all the powers. This has led to the job dissatisfaction of many of the employees in his department as they feel that they are not able to act on processes and also they are left in the making of decisions that affect them and the organization. This has also limited the creativity of employees because they cannot make any contribution towards the productivity of the bank. The manager has been involved in cases where he was unfair to employees because they showed some form of disagreement on the orders that were imposed on them. This also hinders communication among colleagues in the workplace which affects relations among the employees and also the customers. This has resulted in too many conflicts in this organization. In general this type of leadership has not worked well with the employees and therefore it has not been in any way successful. It has led to the company's lack of new ideas to attract new customers to take loans and also created an environment that is full of tension and resentment which has very much hindered progress in the company. Autocratic leadership has no consistency as those who are working under this style of leadership are always in constant disagreement with their managers on the daily operations and management of the organization. The employee's expectation here has been lowered as they have discovered that their opinions and contributions are not taken into account and they are just but tools used by the manager to fulfill his goals and this has led to low quality of services in the bank. This leadership also contributes to negative attitude and aggression toward the person in authority and encourages unreliability of workers and individualism which kills team work.
For Mr.B who has exercised democratic style of leadership, he has been very successful especially in providing high job satisfaction among the employees in his department. He has brought about better decision making and creation of new ideas that have attracted many people to open new accounts with our bank. This is due to the active contributions of employees who have developed their skills on the job with the help of their boss. This has generated a culture whereby everyone feel that they possess the power to actively participate in roles and responsibilities that generate high productivity and minimized negative politics in the organization. This has encouraged the spirit of team work and full participation of all his subordinates thus boosting morale of employees. This is a very consistent form of leadership where those working are in accordance with the decisions and procedures used in the work place .This minimizes conflicts and improves individual productivity and job satisfaction.
After analyzing these two types of leadership used in this financial organization it is evident that the democratic style of leadership is more efficient and effective as compared to autocratic leadership. For the company to succeed in this competitive business environment we need leaders who encourage others to develop their profession and implement their ideas into the company. The classical leadership is not desirable as the work environment nowadays needs personnel who are creative and collaborative in coming up with new plans and strategies to propel the company to higher economic levels and increase the competitive power of the bank in attracting new customers and making a clear vision and facilitate the acceptance of banks strategy for the future. For the proper leadership to occur, the manager and employees must continue to share a common understanding of the importance of the goals set by the organization in order for leadership to work.