An Executive Of The 21st Century Commerce Essay

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In today's world, being executive employee should have particular characteristics. The main characteristic is the leadership. Having leadership skills mean that the person has management, communication skills which are the most important factors for a company in order to be successful and profitable.

Furthermore, there are probably many people who still think that being a leader is all about exerting power over others. Well, this is definitely not the case. The concept of leadership, as we have learned, is multidimensional and thus, has to be seen and studied from many different perspectives. Being a leader is not easy at all whereas being an effective leader in a world that is constantly changing, sounds almost impossible.

Up to now, many different types of leaders have been identified such as charismatic leaders, transformational leaders, team leaders, authentic leaders, democratic leaders and even autocratic leaders. A leader may evolve through many of these categories but irrespective where he/she belongs he/she still has to be able to influence and inspire people, be determined for achieving certain goals, be confident, intelligent, sociable and most importantly sincere. Over the years, some leaders have been able to fulfill their roles and succeed. Some others, though, being drunk with power, selfishness and greed have been tragically led to failure.

Leadership is a virtue intriguing to people. This is why when thinking about leaders, the images

of Moses parting the Red Sea, or that of Roosevelt, Churchill and Stalin at the Yalta conference

come to mind. Even though opinions as to whether a leader is born or made vary, the stories of

men and women who overturned the fortunes of their nations and people never seize to

fascinate. This fascination is not diminished when the overturning of fortunes concerns not

nations, but companies, and correspondingly great corporate leaders receive no less admiration

in the corporate world than Moses and other mythical figures in the general public.

What the values that make a leader are and whether one can be trained to become a leader,

are two questions that have concerned the business world, which has been impeccable in

training managers, but has been less accomplished in creating leaders.

An effort to answer these questions is the main theme of this essay, where an attempt will be

made to define leadership and the characteristics of a leader, before covering the different

types of leadership observed in our time.

Leadership Characteristics

Undoubtedly many things have been said and written about the meaning of leadership. Everyone tries to define the basis of studies, publications and experiments. Leadership is a complex concept with many definitions and as Dwight D. Eisenhower stated "Leadership is the art of getting someone else to do something you want done because he wants to do it". By trying to give a simple definition for leadership we become subjective, because most of us want to be leaders. That's why if you ask five people to define leadership, then it is certain that you will take five different answers.

That leads to the conclusion that leadership is challenging. Generally we can say that leadership is about influencing others to act in a certain way, within a team, group, have followers that want and are willing to act in order to achieve certain goals.

The today's business environment is demanding and sometimes hard to survive. Leaders with strengths, capabilities, effectiveness, charisma and confidence for their actions are needed. Sociable and intelligent with integrity and determination in order to respond to the forces of change.

Leaders are not born as such, however they do share many common personal characteristics.

Defining leadership, one needs to examine these characteristics shared by the greatest leaders

of our times. Some of them are the following:

􀂃 Need to improve: This need to achieve has been associated with entrepreneurs and leaders

who constantly seek to optimal performance levels. These individuals are open to feed

back, are goal‐oriented, seek to be unique and strive for accomplishments based on their

own efforts. They follow what Oliver Cromwell once remarked, that "He who stops being

better, stops being good".

􀂃 Screening for opportunity: Leaders screen incoming information and separate the useful

from the useless, managing to distinguish and pursue new growth opportunities

􀂃 Locus of control: Successful leaders show a high internal locus of control (Lee, 2001).

Goal orientation: Leaders have the unique ability to accomplish goals, by setting priorities

and working towards that goal, day in day out.

􀂃 Optimism: Underlying successful business leadership is a boundless front of optimism

􀂃 Courage: Leadership deals with a lot of risks, so leaders are courageous and bear their

companies' responsibilities

􀂃 Tolerance to ambiguity: Leaders function in an uncertain environment. Leadership faces this

ambiguity with tolerance and resolve, and takes risks knowing that not moving means

staying behind

􀂃 Strong internal motivation: Leadership is a strongly driven motivation from an intrinsic

prospective; this includes needs, desires, motives and a strong willpower.

What is Leadership?

We can define leadership as being the ability to influence a group of people toward the achievement of a set of goals or vision. Many people often confuse both terms of leadership and management. John Kotter of the Harvard Business School argues that management is about coping with complexity while leadership in contrast is about coping with change. Managers bring a certain degree of order and consistency by planning, designing organizational structures, and monitoring results. Leaders provide direction by developing a vision and aligning people toward the achievement of that vision.

In this brief study, I will discuss the basic leadership theories and present some critiques related to their weaknesses with examples of real leaders and organizations.

Trait Theory

During the early stages of research in the field of leadership, differentiating between leaders and non-leaders has focused on finding personal, social, physical, or intellectual qualities. Many historical leaders have been described based on their traits. For example the former British Prime Minister Margaret Thatcher has been known to be decisive, have self confidence, determination and a very solid will. Others would have been described to be courageous, very enthusiastic and charismatic such as Virgin Group CEO Richard Branson, Apple co-founder Steve Jobs, South Africa's Nelson Mandela, and many others. This approach claims to find universal traits of personality, social, physical or intellectual attributes that the leaders would have in common. Research allowed finding six common traits:

1. Ambition and energy

2. The desire to lead

3. Honesty and integrity

4. Self confidence

5. Intelligence

6. Relevant knowledge

Nevertheless, some of the critiques about this theory are listed below:

• The correlation between the specific traits and leadership is rare.

• It does not take into account the needs of the supporters/followers.

• It does not distinguish the relative importance of the different traits.

• It does not take into consideration the situational factors.

Reaching Leadership

In an article published in the Harvard Business Review, Jim Collins introduces the term "Level‐5"

Leadership, according to which company personnel can be categorized in five different levels,

with the fifth one representing the leader who manages to ensure lasting success for an

organization (2001).

Elaborating on Collins' findings, on the first level, one would find highly capable individuals that

make productive contributions through their personal knowledge and skills. On the second level

we find the contributing team members, who are able to produce good collaborative results.

Moving on Collins' ladder, the third level describes the competent manager who is able to

organize the company effectively and efficiently and achieve predetermined goals. The

effective leader is found on the fourth level, and is distinguished from the fifth level's executive

by the fact that the executive manages to turn a good company to great, and ensures enduring

success, even long after having left the company.

Collins claims that the ultimate leader, or executive as he names it, possesses a quality of

character impossible to acquire, thus suggesting some innate characteristics. Even though this claim is heavily disputed, many authors support the idea that a good leader inspires followers

because of his or her quality of character and trustworthiness.

The concept of the trustworthy and principled leader is also the main idea behind Steven

Covey's "Principle Centered leadership" (1992). According to Covey, being trustworthy on a

personal level, a leader is able to successfully lead people based on the principle of trust on an

interpersonal level. On the managerial level, a leader, according to Covey, follows the principle

of empowerment, acting as a source of help rather than supervision, so that the alignment

behind the correct values and strategy can be achieved on the organizational level.

A study by the Hay Group has explicitly shown the importance of trust‐inspiring leadership; out

75 key components of employee satisfaction, trust and confidence in top leadership were found

to be the most reliable predictors of employee satisfaction (Lamb, McKee, 2004).

Differences between leadership and management

As both Leadership and Management within corporations deal with the tasks performed by the

companies and the people working to fulfill these tasks, there is a common misconception that

the two functions are similar. However the two have unique and distinctive role, and should not

be confused. According to Peter Farey (1993), task‐leadership deals with pursuing a vision

setting the goals to achieve success, while people‐leadership deals with inspiring people to

work and engage them in a way they own their work's success. On the contrary taskmanagement

deals with organizing and the allocation of resources, while people‐management

considers the staff needs and potential in assigning the work. Diagram 1, adapted from Farey's

"Mapping the Leader/Manager"(1993) shows the relationship.

Diagram 1: Adapted from Farey, Mapping the Leader/Manager (1993)

John P. Kotter considers leadership and management as complementary systems of action. He

distinguishes management as being about coping with complexity and leadership about coping

with change (1998). Kotter proposes a comprehensive comparison between leadership and

management, with the main points presented in Table 1.

According to Kotter, leaders are able despite the changing corporate environment to set the

company's direction, and manage to inspire and align all employees behind the common cause.

Leaders have the capability of motivating people and persuading them that they are

incremental parts of the company's future and success.

Table 1: Adapted from "What Leaders really do", J.P Kotter, 1998

The duties of planning and budgeting lie in the hand of managers, who are additionally

responsible for organizing the staff and assigning work and projects to the employees, ensuring

that they are taking full advantage of their potential and capabilities. Managers are also

responsible for solving day‐to‐day problems that occur, and controlling that the goals set are


Although Kotter draws a clear line between managing and leading, he rejects the idea

suggested by other authors that a sole person is impossible to perform both duties. However,

he stresses the importance of the person taking on both responsibilities being thoroughly

selected and properly trained.

Leadership of Chief Executive Officers

The importance of the role of CEOs is definitely indisputable. However it is seen in an

ambiguous way. Amernic and Craig observe that CEOs play a major role in both society and

business life. Their decisions have a considerable impact on shareholders, customers,

employees and the corporate governance. On the other hand, they are also public figures, and

are often invited to take part in public debates. CEOs can write history, either for a short time of

period, like Jeffrey Skilling from Enron, or they can even become cultural icons, like Walt Disney.

Their major responsibility is decision making. They can be held responsible for actions of every

member of the enterprise, even if they are not aware or informed about them. They have to

add value to the enterprise, ensure its future, and most importantly secure high dividends for

the shareholders. CEOs have to work under the weary looks of the shareholders. Their actions

are scrutinized and very few mistakes are allowed, except in cases when dividends remain high.

The uncertainty of the CEO profession is clear in figures showing that one third to one half of

the executive leaders are replaced within 5 years.

In their book "CEO speak", Amernic and Craig present the self‐perception of leaders. The

authors report that leaders consider themselves as "warrior chiefs", and suggest that: "perhaps,

in a society flirting with agnosticism, atheism, and hedonism, the CEO warrior chief has become

a surrogate religious icon."

A lot of research is done on what a recipe for successful leadership is, and correspondingly

many theories have been developed.

In the book "Leadership Theory and Research Perspectives and Directions" the successful

models of Transformational and Transactional Leadership are discussed. According to Chembers

and Ayman, CEOs are most successful when they perform a transformational or active

transactional behaviour (1993). Whereas transformational leadership comprises of charisma

(idealized influence), inspirational motivation, intellectual stimulation and individual

consideration, transactional leadership is characterized by contingent reward, management‐byexception

and Laissez‐faire. Active transactional leadership consists of contingent reward and a

positive relationship between leaders and followers (Chembers, Ayman, 1993). The authors

state that research has proven that the optimal profile is mainly related to the four I's of the

transformational behaviour, which include the following approaches and attitudes:

i) Individual Consideration: e.g. recognising strengths and weaknesses, assigning projects based on individual ability and needs

ii) Inspirational motivation: e.g. setting an example for others to strive, providing meaning for


iii) Intellectual stimulation: e.g. encouraging followers to revisit problems, creating a "readiness"

for changes in thinking

iv) Idealized influence: e.g. expressing dedication to followers, sacrificing self -gain for the gain

of others (Chembers, Ayman)


Leadership is about influence. There cannot be a leader if no one would follow him/her. Leaders

need to be visionary in setting goals and new directions for their companies. They need to be

persuasive and able to gain their employees' trusts. Otherwise the organizational alignment

behind a common cause is nearly impossible and the prospects for success for the enterprise

become dim.

A leader's responsibilities must not be confused with those of a manager, who is dealing more

with the company organization, the allocation of resources and the controlling of operations

performed by the company.

There are different approaches on what consists the ideal leadership style. Although some

overlapping may be observed in these approaches, it is clear that the most successful CEOs

focus on one approach. However changes in the market may create new needs, and leaders

need to be able to adapt to different styles.

True leaders are the ones who manage to turn a company from good to great and ensure longlasting

success. Therefore creating a culture of leadership, where new leaders are chosen and

trained, is essential for a company's future. For all potential leaders on the other side, there is

nothing more appropriate than Jack Welch's words for them to bear in mind: "Before you are a

leader, success is all about growing yourself. When you become a leader, success is all about

growing others".


It is possible to obtain competences of a leader. We have all of the capacities to become leaders just as all of us have certain disposals to sing or to run. Some are better than others, but every person possesses a basic aptitude that can lead to perfection by learning or practicing. One can be an effective leader of a group without necessarily having been designated as such. The art of leading is a process that helps a group to attain its objectives. Let us not forget that a specific leadership style suiting all situations does not exist. To be an effective leader, it is necessary to know the group (to know its capacity, knowledge, motives, and its willingness to act). In addition, one must know which leadership style he/she prefers and how is he perceived by others. The leader has to be ready to adapt his style to the situation.