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Describe an important leadership situation that you have witnessed in the last twelve months. What styles did the leader adopt and how effective were they? With this and other example , critically evaluate the theoretical links between leadership and organization performance.
Leadership is defined as "a social process in which one individual influences the behaviour of others without the use or threat of violence "(Buchanan and Huczynsci,1985:389 cited in Thompson et al,2009,p.329 ).
Leadership is that process where the leaders make use of their power and strategic competencies to influence the performance of the workforce and achieve the organizational goals. (Weiss, 1996, p.187)
The importance of leadership focuses that it helps to initiate the action within a group, motivates the employees , guides them towards the effective results of organizational goals , increases employee morale and creates in them a zest to perform confidently. It also helps to promote team / group working and thus facilitates coordination. (http://www.managementstudyguide.com/importance_of_leadership.htm)
Leadership has three styles that are Autocratic, Democratic, Consultative.
Autocratic leader means one who gives the orders and expects instant obedience. Plans and policies are not discussed with group members; it is finally decided by the leader himself. He always directs the group rather being the part of the group.
Democratic leader means one who always involves group in taking decisions, asks for opinions. Usually it is said that democratic style of leadership is the most effective way of leadership.
Consultative leader means one who is part way between the autocratic and democratic styles. It does take the opinions from the group members and basis on that information takes final decision. The group are well informed about the future prospects and allowed to debate on long term policy.
The following example talks about the leadership situation that I had witnessed in last twelve months. It gave me a clear understanding of how important leadership is in the organization.
I worked under the marketing department of Harsh Precious Metals Pvt Ltd, located in Mumbai (India) .The company deals with manufacturing of alloys, fitting and findings related to jewellery. Since the past ten years the company has been recognised as one of the major producers in the industry.
Recently, since about seven-eight months the company started experiencing rise in its costs , deteriorating sales , bitter relations with the buyers and the poor consumer market response. Detailed investigation was done and the efforts were made to control situation. But still there were no effective and positive results that were experienced by the company. The senior management of the company thought of bringing some changes so as to improve the company's performance.
The company as a remedy revised its policies and procedures. It also recruited skilful staff for marketing department and introduced the concept of leadership so as to manage the human relations aspect of the company. We were now made to work in teams and there was team leader assigned to each team.
My leader was Mr Jigar Shah, who practised leadership qualities like, initially he started delegating work, good communication skill, motivating the group members to work effectively and efficiently, involving everyone in decision making, applying updated policies to achieve the goals and overcome the situation, openness among the group and treating everyone fairly, he also took critics in a positive way and worked upon it.
As a result it was experienced that there was improvement in the coordination among them, new methods applied resulted in decrease in cost and efficient production , better communication skills resulted in improved relations with the buyers and consumer market response . The concept of leadership leaded to higher work performance, reduction in group conflicts and achieved organisation's targets and goal.
When Mr Jigar Shah was appointed as a leader the company's position was really bad with respect to its sales, relations with the buyer and consumers etc. So he initially adopted the Autocratic style of leadership wherein, he started delegating work to the group members, reinforce his decisions on group members without giving overview of an situation. Usually autocratic style is benefited when fast decisions are to be taken and quick actions are required. It really helped in improving the company's performance though group members felt it was very rigid.
After a point when business was able to overcome the situation and had reached the steady level he started adopting democratic style. It has been always seen that Democratic style is the most effective style. He started involving group members, took their opinions, used their information and experience while decision making. In a way leadership qualities also highly motivated them to perform with high integrity which in turn leaded to increase in sales.
As seen in above situation leadership plays very important role in the performance of the organization. It is always seen that good leader leads to better performance of the organization whereas; if the leader is not appropriate it affects the performance badly.
For example Lehman Brothers filed their bankruptcy which was said to be the biggest filing of bankruptcy in US. Lehman Brothers had not even reported a quarterly loss till June 2008.It got affected due to massive credit crisis and fast increasing real estate prices. Many other banks also started refusing working with Lehman Brothers, because of its complex and opaque ways of trading. Housing loans provided by the Lehman Brothers were with very little support to the customers and when interest rates rose they were unable to repay them which lead to higher losses. In this situation decisions taken by leader were not appropriate with respect to the market conditions and it badly affected the company and leaded to bankruptcy.( http://www.millionface.com/l/what-went-wrong-with-lehman-brothers/)
As seen in the above situations leadership plays a vital role towards the achievement of organizational performance. Whether under normal circumstances or during a crunch, the leader is usually the most important role to be performed. The leader not only motivates the employees for effective and efficient work performance but also encourages them to enjoy their work and provides guidance to their group members to accomplish the organizational goals . To conclude, though it is not that organization cannot perform without leaders but leaders always improves the organizations performance.