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The key role of strategic leaders is to retain and create the appropriate organisational culture that rewards and encourages collective effort. What is actually meant by organisational culture? What effect does it have on the organisation? What is the role of the leader to build, influence or change the organisation's culture and finally to achieve the desired corporate goals?
Organisational culture is a group of values, beliefs and behaviour patterns that distinguish an organisation from another. It also helps to determine its member's performance. This is described by Deal and Kennedy (1982) "as a set of values that underlie how we do our things around here"
Culture is very important in an organisation, why? Edgar Schein (1985) "suggests that an organisation's culture develops to help it cope with its environment". Nowadays, organisational leaders are faced with complex issues during their challenge to reach the organisational goals. For a leader to be successful, this depends upon his or her understanding to the organisational culture.
Schein argues that leaders are facing problems which can be traced to their inability to evaluate organisational cultures. If leaders are inconsistent with the organisation's culture, their strategies will fail when trying to apply new strategic plans to achieve the corporate goals.
The creation of the appropriate culture occurs if leaders correctly study the organisation's present culture and assess it against the cultural quality needed to achieve strategic goals. Therefore, leaders must first identify and take the necessary measures to reach the organisation's objectives. These two objectives alone are difficult, especially for the financial services sector that are experiencing changes rapidly.
The leader's role is to conduct a study of the organisation's ideologies, values and norms. Leaders should ask two important questions:
(1) Are the present relationships, beliefs and behaviors applicable to the organisation's achievement of corporate objectives, is there a need to change?
(2) Are organisational members facing doubt about the present work processes and the external environment that can only be explained clearly by the organisation leaders?
Bass (1985) explains the relationship between leadership and culture by studying the various approaches of leadership on culture. He observes that "transactional leaders tend to operate within the confines and limits of the existing culture, while transformational leaders frequently work towards changing the organisation's culture in line with their vision". Likewise, Brown (1992, p3-6) comments that, "good leaders need to develop the skills that enable them to alter aspects of their culture in order to improve their organisational performance".
4.1 The role of leadership to achieve corporate goals
A leader is to create and maintain the organisational characteristics that encourage reward joint effort. The most fundamental is organisational culture. "The grand total of all the objects, ideas, knowledge, ways of doing things, habits, values and attitudes which each generation in a society passes on to the next is, what the anthropologist refers to as the culture of a group" (Nord, 1972, pp178)
Leaders in the financial services industry must identify that they hold various leading roles; this observation will improve their motivation to give their full efforts and commitments to reach the organisation's corporate goals.
Muthuveloo and Rose (2005) stats that, "A committed leader of an organisation is the one who has consolidated the values and goals of the organisation and is willing to participate fully in all that the organisation does towards the achievement of its stated goals".
Meyer and Allen (1991, p61-89) recognised three different types of commitments; affective, normative, and continuance. In today's business word the most significant commitment for the right leader is the affective commitment. Affective commitment is:
the trust and the recognition of the organisation's values and goals
a motivation to focus effort on helping the organisation to achieve its goals, and
a need to maintain membership in the organisation
An appropriate way for the leader to be directly in touch with his or her subordinates is "Management by walking around". A leader must practice what he preaches: to use Total Quality Management (TQM) in his own processes, example by organising meetings with middle managers reviewing their personal efforts. An affective leader is the one that studies the nature of the work and develop some excitement in the employees' minds about new methods of working. All involved work groups requires TQM training. Both, horizontal and vertical communication training may be essential for the groups to communicate together. Team building is an important element of the process as to make sure that staff members are involved to have an effective problem solving.
A leader is committed to insist on objective measures and to look for observable improvement, but not optimisation. An affective leader is capable to produce immediate results in terms of monetary and time savings. Leaders who are affectively committed are employees loyal to the organisation and to its corporate goals.
Social skills are the diplomacy that leaders monitor and thereby warn non performing employees. Awareness must be made so discreetly not to harm the pride of those in question. Every leader in all departments must have the initiative to offer the right leadership that will help towards the achievement of the corporate goals set by the organisation.
Every leader has to accept the fact that every employee in the organisation is accountable to the team for tasks assigned to them. Within their role, leaders are individually and severally accountable to the organisation. They are responsible to lead in the quality direction, by keeping subordinates responsible and by monitoring one another. On the other hand, non performers can be recognised and made aware of their non performance.
Leaders of the organisation must meet very often and reveal the methods and ways for achieving their goals and monitor the performance of the organisation's employees. On a regular basis, example quarterly or semi-annually, a self-appraisal exercise is carried out to establish the success of the business both as a corporate entity and as individually. Colleagues should ask questions, share experiences, offer or receive explanations and seek clarifications. Leaders within the organisation must meet and talk about their experiences, problems, and successes with their colleagues so that they can learn from each other. Leaders must recognise that all colleagues give the same input to the organisation. Everyone is perceived to be involved.
Interdependence is the acknowledgment that no leader can succeed in his or her tasks unless everyone within the organisation is successful. Leaders must accept the fact that as they do their best to achieve effective management of their organisation, they can be faced with challenges that can either promise them success or fail them, depending on the total result of their individual efforts.
4.2 The Crucial Role of Organisational Culture and Leadership
In the long-term, an organisation's culture alone probably does more to influence corporate leadership than anything else does. It establishes how individuals and organisations respond and perform on a daily basis. Organisational culture is equal with leadership culture and determines how leadership is evident in an organisation. And just as individuals show good and bad leadership, so do corporations!
For example, various organisations are investing in leadership development at the individual level whereas the organisation's values and leadership culture remain unchanged. Although these new behaviors are being successful at individual level the contrary is resulting at corporate level. In reality, if leaders are persistent then they may be able to continue to reveal these new behaviors even though they are not supported or encouraged by the organisation. This may be stressful for individuals and often they will throw away these new behaviors in spite of what they have been to some extent successful; as to meet the organisation's values. Sometimes, individuals tend to resign from the organisation and search for another organisation that is united with their values.
Nowadays, the most common two corporate leadership issues we see in organisations are poor communication and lack of trust; mainly communication regarding corporate values, vision, mission, and critical success factors. The mixture of these two issues seems to be at the root of leadership pressure within organisations.
Trust is comprehensive and intangible concept that saturates and visible in everything we do. It includes principles such as integrity, accountability, honesty and truth. As with individual leaders, nothing destroys corporate leadership more than not being trusted by its employees. Certainly, distrustful leaders might achieve average results, but they will never be able to truly harness people's passion and produce the energy necessary to achieve exceptional business results.
If the corporate goals, vision, direction and corporate values are poorly communicated and misunderstood this may cause poor organisational performance, low morale, and internal confusion. Sometimes, senior managers are adamant that their organisation's values and goals are absolutely clear and understood throughout the organisation, however, when this is asked to individuals at levels ranging of junior managers this is clearly not the case.
Organisational goals, objectives and values need to be communicated and reinforced on a continuous basis. As things change, individuals within organisations need to be able to understand this change with their organisation's values, vision, direction, etc., and be able to assess the impact of change and take the necessary actions.