The Most Important Characteristics Of A Leader Business Essay

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The second most important trait mandatory for any leader is magnanimity which is the quality of a leader to give credit to people where it is due. He makes the people believe that if people work hard their endeavors will be rewarded. Conversely, a good leader takes responsibility for failures. This sort of reverse approach helps other people feel good about them, and at the end of it all increases the chances of achieving higher productivity and overall organizational benefit. To distribute the fame as much as possible and take the blame is an essential characteristic of an effective leader.

The third quality that we have to emphasize on is dedication, which stands for spending time or energy efficiently to accomplish any task. A leader inspires dedication by example, doing whatever it takes to achieve the next step toward organizational goals. By setting an example, leaders can show co-workers that there are no monotonous jobs, and that there are opportunities to achieve something beneficial.

There are many other leadership qualities which I will discuss going forward; as I feel that to be a leader one needs to incorporate all the "good stuff".

Fairness and Assertiveness means dealing with others in a just manner. A leader must verify all the facts and hear all and sundry out before passing a decision. He or she must avoid leaping to conclusions based on incomplete evidence. When people feel they that are being treated reasonably, they reward a leader with allegiance and perseverance.

Integrity is the integration of one's actions with one's values. A leader must have complete confidence of his fellow workers and to achieve this he must display integrity. A person of integrity is a mirror image of his outward persona in the outside and vice-versa. Such an individual wins the "trust" and "heart" of his fellow workers, as he or she never bends from the inside, even when it might be expected to do so otherwise. Well-controlled emotions and an absence of unnecessary and harsh outbursts are all signs of integrity. A leader whose core values incorporate integrity will be more amicable to his followers.

Honesty while dealing with other people is also of utmost importance. If a leader is known for his honest actions and fairness in his judgment, he will be successful.

Predictability is a very crucial area to examine about any leader. A leader should be predictable to take the correct decisions but not predictable enough so much so that everyone knows his next move. He should be innovative at the same time.

Creativity is another virtue; it can be defined as the ability to think differently, to go outside the box that will deliver solutions. Creativity gives leaders the ability to see things that others have not seen and thus lead the group in new paths.

Among other qualities are, the ability to stand against critics, good communication skills, consistency and the ability to select a good team.


C.K. Prahalad, University of Michigan defines leadership in a quite a fashionable way, according to him "People seek fairness-not favors. They want to be heard. They often don't even mind if decisions don't go their way as long as the process is fair and transparent."

The following subject pertains to the theories there have been and have been followed, these can be classified into four main 'generations' of theory.

· Trait theories

· Behavioral theories

· Contingency theories

· Transformational theories

Trait theories

The trait theories describe the characteristics of a leader and what he should be made of. As we study the stories of people who have been marked as great leaders, it becomes clear that they have very diverse qualities. A good example can be that of political figures like Nelson Mandela, Margaret Thatcher and Mao Zedong.

However, John Gardner studied a large number of North American organizations and leaders and came to the conclusion that there were aspects that did appear similar within a genre'. These characteristics included the following.

·       Physical vitality and stamina

·       Intelligence and action-oriented judgment

·       Eagerness to accept responsibility

·       Task competence

·       Understanding of followers and their needs

·       Skill in dealing with people

·       Need for achievement

·       Capacity to motivate people

·       Courage and resolution

·       Trustworthiness

·       Decisiveness

·       Self-confidence

·       Assertiveness

·       Adaptability/flexibility

John Gardner (1989) On Leadership, New York: Free Press.

These are some of the classical views of the trait theory. However, what Peter Wright observed was, 'others found no differences between leaders and followers with respect to these characteristics, or even found people who possessed them were less likely to become leaders'. 

We should mark this point as it is very important to take a stand. We all know that by possessing afore mentioned qualities no one can become a leader for certain, but they seem to represent the core values incorporated in most of the leaders that we know of.

Behavioral theories

The next set of theories that sprang up were the behavioral theories. This became the dominant way of approaching leadership within organizations in the 1950s and early 1960s. Different molds of behavior were grouped collectively and tagged as styles. This became a very popular activity within management guidance. Various schemes appeared during these times mostly planned to analyze and extend people's style of working. Despite different names, the fundamental thoughts were similar. The four main fashions that appear are:

· Concern for task

Here leaders accentuate on the accomplishment of solid tasks. They look for high ranks of productivity, and ways to categorize group and activities in order to meet those objectives.

· Concern for people

Here, leaders look upon their co-workers as people - their requirements, interests, problems, development and so on. They are more than mere units of production.

· Directive leadership

This style is characterized by leaders taking decisions for others and expecting subordinates to follow instructions.

· Participative leadership

Here leaders try to share decision-making with others.

Contingency Theories

Situational Theories suggest we concentrate on what we are doing in different situations. An instance would be, we may be approaching the work differently, where a quick response is needed it should be delivered and where people are used to being told what to do, rather than having to work at it themselves. The vital idea was that effective leadership was reliant on a range of aspects and that leadership style and the degree to which the situation gives the leader control and influence should be carefully examined.

Transformational Theories

Transformational Theories mainly draw up a differentiation between the transformational and the transactional leadership qualities.

A transactional leader recognizes what is the final outcome and tries to ensure that it is achieved; he barters rewards and promises for effort and performance shown by employees. He also makes sure that he is responsive to the employee's interests, and how and if they can be met. Above all he makes sure that performance augments the entire procedure.

The functions of a transformational leader are like that of an adjective, the transformational leader Raises level of awareness, level of consciousness about the significance and value of designated outcomes, and ways of reaching them. He de-pronounces his own self-interest for the sake of the team. He also, Alters our "need level" and expands the employee's horizons.


Though classical theories of leadership provide a backbone for managing and governing organizations efficiently, we have to look at how business has revolutionized in the last decade. What all businesses need is that extra edge over the other companies, only managers with efficient leadership qualities can get the company where it wants to be.

When we look at examples like Michael Dell, who believed cost reduction could work in the Technology industry revolutionized the way we look at businesses today. His simple formula of inventory management wherein Dell laptops were sold exclusively online all over the world revolutionized the way the businesses think.

Michael Dell stands by the following core pillars that make his organization successful.

· Purpose

Provide customers with superb value technology

· Business

High quality, relevant technology, customized systems

· Values

Superior service and support, easy to buy, easy to use

· Vision Statement

It's the way we do business. It's the way we interact with the community. It's the way we interpret the world around us-- our customers' needs, the future of technology, and the global business climate. Whatever changes the future may bring our vision -- Dell Vision --   will be our guiding force.

So Dell needs full customer satisfaction. In order to become the most successful computer company, they need the most modern technology and trustworthy customers.

· Mission Statement

Dell's mission is to be the most successful Computer Company in the world at delivering the best customer experience in markets we serve. In doing so, Dell will meet customer expectations of

· Highest quality

· Leading technology

· Competitive pricing

· Individual and company accountability

· Best-in-class service and support

· Flexible customization capability

· Superior corporate citizenship

· Financial stability

Another maestro is Steve Jobs who turned the course of Apple's destiny twice revolutionizing the music industry with the launch of an ipod was the hottest news of the year in 2001. In a phenomenal way in the last three months of 2004, (when the ipod global sale was commercialized) it sold 807,000 iPods, surpassing for the first time the number of Macintosh computers it sold (749,000). Apple is devoted to bringing the best personal computing experience to students, educators, creative professionals and consumers around the world through its innovative hardware, software and Internet offerings.


Principles of organizational management refer to an all in all change in the process of production along with change in the way the various ways these processes are managed.

These ideas will not appeal to old-fashioned organizations and cultures, unless they want to change for the better. These principles are for progressive emotionally-mature organizations, who value integrity above outcomes, and people above revenue.

The first and foremost issue that needs to be discussed is that of training and the learning that one derives on it. Unnecessarily wasting resources on training personnel that do not require training or ones that do not benefit from it is a big blunder that each and every company should refrain from doing. At the same time if the learning outcome of any training being conducted is zero it means that there is no use conducting such trainings in the first place.

In addition to the above two postulates another important angle to be looked at is the factor of motivation. If an organization consists of employees who are not motivated to work hard for the organization, the future of such an organization is doomed.

We have been conditioned from adulthood to trust that the way to instruct and train, and to motivate people towards changing, is to tell them, or convince them. From our understanding at school we are conditioned to think that skills, knowledge, and expectations are imposed on people by teachers, professors and then by managers and bosses in the workplace. However, this is not true because of the assumption that people's personal wants and needs are completely aligned with those of the organization. People are not self motivated, they have to be motivated from within which leaves the manager no choice but to lead by example and hope that others follow.

Every kind of change, and similarly the incorporation of that change in the processes of an organization is also unique. Each problem has its own way of being handled, by suppressing, by-passing or avoiding change in an organization no one has been able to survive in the market. Let us take an example of India's telecom giant (public sector) company BSNL. BSNL was reluctant to change when the Indian telecom industry was decentralized. It could not keep up with fast growing private players who used efficient strategies to gain market share. BSNL could not keep up with the aggressive marketing tactics and lost a huge chunk of its market share only due to its reluctance to change, to reach out to people. It had the old disease every sluggish public sector company has, that of reluctance to change. The company eventually came back to the market after being the first one to launch 3G services in India.

A similar case happened in case of General Motors also. General Motors saw the evidence from California in the 1970s that there was a swing driving customers away from U.S. manufactured cars, but dismissed it as trivial. It took years of eroding market share and declining sales before the corporation finally realized that its customers were deserting it for foreign manufacturers whose cars were more steadfast and less expensive.

According to Vicki Heath, the director of Business Performance Pty Ltd., the major incorporation of any change into an organization requires the following.

1. Sponsorship

2. Planning

3. Measurement

4. Engagement

5. Support structures

Sponsorship stands for the fact that the change program has to bear the consent and should be backed-by all or at-least most of the key decision-makers of the organization and resources who are engaged in the project.

Planning should be performed carefully before project realization and there should be a commitment to writing. Plans are implemented only after they are given the 'go signal' from all responsible & also the major stakeholders. This is followed by deep analysis of timelines and objectives, resources, roles and risks which are clarified and then put down strategically.

Project goals should be stated in measurable terms and the program progress should be monitored constantly throughout the life of the project. This information then should be communicated to the major stakeholders.

Stakeholders should be involved in genuine two-way discussion with the people implementing and approving the change. This should be done in an atmosphere of openness, mutual reverence and faith.

Program implementers and the people responsible for change are given the resources and supporting systems which they need during and after change execution.

Finally what change management tries to teach us can be summed up as "change or die, this change process however should be gradual and kind."

Effective change management requires the management & understanding the characteristics of the change process. An efficient way to deal with this incoming change can be to do the analysis mentioned below.

• Need for Change - Understand the need for change

• Impact - Long-term impact of the change

• Depth - Seek to empathize with the personal risk of the target

• Resources - Provide what is needed

• Scope - Recognize the size and impact


Resistance to change is the inability of people to accept and incorporate change. The major causes that can be taken into account are as follows.


Often employees mistrust the policies of change made by the organization. A very likely thought that comes into their minds is "why the change?" or "how will it harm me?" These are suspicious behaviors that a manager needs to address as soon as possible.


Anxiety can be one of the major resistances to change. Employees might feel that they will be unable to implement the change factors or will be unable to handle such changes. A manager has to step in and provide proper training to the employees in order for them to learn the new process in detail and the benefits provided by it.


What mostly goes wrong during a change process is that there is a conflict of ideas where-in an employee most likely thinks that the onset of change might be detrimental to the fate of the organization. The role of a manager is to explain the various reasons for the change and the benefits it is going to bring to the organization. Only by following this practice on a regular basis will a manager be able to eliminate mistrust which is a major resistance to change.


The benefits that an employee might see from a change might not be farfetched and thus not considered sufficient. It is the role of any manager to explain the short and long term benefits of the change process.


It is very easy to look through the very process of change as it involves comfortable conditions which already exist. If we take an example of a normal factory, to incorporate a change in way goods are being produced one might need to change the entire layout of the shop floor. This is difficult and therefore most often ignored. It is the role of managers to incorporate these changes which benefit the company though these difficulties exist.

A very good example we can relate this resistance of change to be that of ERP implementation. Starting an ERP implementation in a company may very well be a venture of the highest risk level as ERP executions also imply the transformation for the organization. The job will affect company processes, its practices, and organizational structures; in short we can say, the entire culture of the organization will somehow be tapped on. And altering with company cultures always carries inherent risks of complete breakdown at all times. Generally people do not like to shift from old procedures of maintaining physical records and ledgers to ERP as the technology can be difficult to handle for non tech-savvy people.


Change management is necessary in all departments in a company. May it be IT, HR, Marketing, Finance or Operations, all require efficient change management to increase & maintain the overall productivity of the company. Even if one of these departments is unable to incorporate changes that come along every day, there will be a question mark regarding the long term sustenance of the organization.

All aspects of human recourse development and change management are linked. There are many major issues pertaining to HR management associated to change management. A very good example of the same is how the HR focus back in the 80's was thought to be Competitive advantage is in obtaining and allocating low cost financial capital and physical assets.

However this has now changed to; Competitive advantage is in obtaining, developing, and allocating human capital and knowledge assets.

Change management is also very important in the finance department, we see accounting standards and principles changing every day, evolving every day. If we look at the international financial system, based on which most of the transactions take place today, we see that it has changed over the years from being a stand-alone stringent system to a rigid system. The IFRS (International financial reporting standards) is the Indian government has welcomed the IFRS which is due for implementation in FY 2010-11.

The study of change management in the financial department involves mostly the following.

Understanding the financial hurdle

Consequences of changing

Consequences of not changing

Cost associated with change

Profitability associated with change

Change management is also very important from the marketing division's point of view with regard to improvements in any company. The marketing division of any company should be very agile and should be able to reciprocate to the change at the earliest.

Situations that might need incorporation of change management in the marketing department are as follows.

New player in the market

Existing player launching new product

Existing player launching a new marketing scheme for an old product

New technology introduction

A very good example that can be studied regarding change management in marketing is that of the "Cola Wars" in India. The Indian soft drink and non-alcoholic beverage industry is dominated by Pepsi followed in closely by Coke. When Thumbs-up, a brand of Coca Cola ltd. Launched a campaign saying that Thumbs-up was a more manly drink as it was strong, alternatively implying that Pepsi was sweet, Pepsi immediately countered by launching an advertisement for its brand Soda saying it was more manly than any other drink because it was not sweet at all. So we see that it is but necessary for any organization to incorporate change management in their organizations to survive in the market.


Jordan GP faced a lot of problems due to environmental changes, in 1999 due to hard rain on the tracks 11 cars withdrew from the championship and smaller brands like Jordan bore the brunt most heavily. These changes asked for more and more costs with regard to the safety on the tracks. The costs associated with this had to be weighed against the benefits and then invested in. Though it evident that a worked out risk analysis of the proposal could have structured the outcomes and given Jordan a better understanding of the problem, we have to understand that some instances require quick decision making and some decisions should be taken conservatively. A typical example is the one in the case study. The right thing to do for Jordan would be to support its driver & his safety by incurring these costs.

Everyday examples make it evident that only those organizations that focus on knowledge management, development of human capital and treating employees as assets rather than only a factor of production have become big, and have survived & grown with time.

On all accounts however, an extensive risk analysis should be to understand the roots of the risks associated with any venture.

Some techniques associated with risk analysis are discussed below.

Scenario Analysis

Scenario analysis starts with scenarios. A simple analysis might consider three scenarios, say reflecting assumptions that the company might experience.

Strong growth

Moderate growth


Typically, more scenarios are used to permit a variety of eventualities to be assessed. A scenario is specified as a set of "paths" that will be taken by relevant risk factors. Risk factors are typically interest rates, but they can also be exchange rates, equity prices, commodity prices, implied volatilities-pretty much any risk factors.

Sensitivity Analysis

A practice used to resolve how different values of an independent variable will impact a particular dependent variable in a given set of suppositions. This technique is used within specific limitations that it will depend on one or more input variables, such as the effect that changes in interest rates will have on a bond's price.

Sensitivity analysis is a way to predict the outcome of a decision if a situation turns out to be different than expected.

Critical path method

This technique requires computation of a critical path & is a mandate when it comes to manufacturing industries. A project typically consists of a list of activities to be carried out. Each of the activities may require different amount of time to complete and some of the activities may be interdependent on one another. This complex list of activities is also known as the "Work Breakdown Structure" in project planning. Therefore, by breaking down the work & then evaluating the project for its actual cost is a very good technique of project risk evaluation.


Effective communication with stake holders is very necessary. According to Rupen Sharma, Managing Director - RealTime Technologies, "Projects have internal and external stakeholders. Each type of stakeholder can either have a positive or negative impact on the project." Therefore it is but necessary to communicate the company's latest to the stake holders as it is their money that the company is using for their business.

The various advantages of keeping the Shareholder's in the loop can be described as follows.


New suggestions

Invoking interest for fair practices

Increase shareholder confidence in the company

Increase in market value of the company


We studied about various things in this analysis. We studied the attributes of a leader, historical, classical & contemporary theories of leadership. What should be the MODERN DAY Approaches to leadership? Then we studied about principles of organizational change, resistance to change, change management and risk management. Then we finally studied the advantages of effective communication. This study gave me an extensive insight to the corporate affairs of an organization and how they should be managed. I have now understood how these are liked with qualities of great leadership and how only a good leader can take the organization to success.