Leaders Can Influence The Empowerment Process Commerce Essay

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Leadership is a now common term in daily speaking but People started studying it only at the end of 19th century. However, we can recognize the first books about leadership in the middle of 1800: "Heroes and Hero Worship" (Thomas Carlyle,1841) and Francis Galton's "Hereditary Genius" (1869).

Both these books found a relationship between the power of the men and his special skills and traits, giving great initial support for the notion that leadership is rooted in characteristics of the leader("Wikipedia").

This theory is called "Trait Leadership" and assumes the leaders were born with specific characteristics that make them qualified to reach the power. This special traits cannot be developed

Moreover, in this early theory there was a very strength link between gaining power and leadership.

As the research moved further, the traits leadership was challenged by different scholars who claimed that leaders don't behave in the same way in all the situations and therefore could not be considered as a leader everytime. Stodgill (Leadership Theory: a Historical Look at Its EvolutionJournal of Leadership & Organizational Studies November 1993) was the first to take this approach and reversed the traits theory by stating Leadership cannot depend exclusively on born traits but behaviours play an important role. Leaders don't behave as a leaders in all situations was the final conclusion.

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During this period of widespread rejection towards the trait approach, some new theories started taking place: Fiedler's (1967) contingency model, Blake and Mouton's (1964) managerial grid and Hersey and Blanchard's (1969) situational leadership model.

According to Hersey and Blanchard, there are four main leadership styles:

Hersey and Blanchard characterized leadership style in terms of the amount of Task Behavior and Relationship Behavior that the leader provides to their followers. They categorized all leadership styles into four behavior types, which they named S1 to S4:

S1: Telling - is characterized by one-way communication in which the leader defines the roles of the individual or group and provides the what, how, why, when and where to do the task;

S2: Selling - while the leader is still providing the direction, he or she is now using two-way communication and providing the socio-emotional support that will allow the individual or group being influenced to buy into the process;

S3: Participating - this is how shared decision-making about aspects of how the task is accomplished and the leader is providing less task behaviours while maintaining high relationship behavior;

S4: Delegating - the leader is still involved in decisions; however, the process and responsibility has been passed to the individual or group. The leader stays involved to monitor progress.

Of these, no one style is considered optimal for all leaders to use all the time. Effective leaders need to be flexible, and must adapt themselves according to the situation.

Styles S3 and S4 are more concerned with developing team members' abilities to work independently and allow them to take some decisions.

The last two aspects are the fundamental basis for a lot of theories related to the empowerment, which assumes a critical role in order to understand leadership behaviours.

For example Blanchard, K., Carlos, J.P. & Randolf, A. (1996)(Empowerment Takes More than a Minute, Berrett-Koehler, San Francisco, CA.) define empowerment as having the freedom to act but also the responsibility for results(Style 4). They believe this freedom can be achieved by leadership sharing information with everyone, creating autonomy through delineating boundaries, and replacing hierarchies with self- managed teams.

Regarding the participative style(S3), By involving all employees and fell them included in the decision making process, we give them some of the company's power. There is an article that examines thoroughy this specific point (Participative decision making(Lawler, Lawler, E.E. 1986. High involvement management).

In the past years the word leadership has grown enormously since employers demand more often leadership skills to possible candidates. Therefore is necessary to understand what kind of skills are fundamental in order to be a good leader and, as shown above, empowerment is one of the most critical

The literature of empowerment connected to leadership is endless and take into considerations lots of perspectives and we agree with Smith and Mouly (1998) who explored the difficulty of "definition" and determined from their case studies that there were differing perceptions by employees as to the nature of empowerment.

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However, we tried to gather the most important definitions of empowerment in order to offer a big picture of this theme and show the variety of themes:

Vogt and Murrell (Empowerment in organizations: how to spark exceptional performance,UniversityAssociates, SanDiego,CA , 1990) defines empowerment as an act of building, developing and increasing power by working with others, which he terms "interactive empowerment. They identify six dimensions to empowerment: educating, leading, mentoring/supporting, providing, structuring, and one that incorporates all of the above.

Kanter (1977) defines empowerment as giving power to people who are at a disadvantaged spot in the organization. She sees a continuum of power from powerlessness to empowered. Continuing in this tradition (Block 1987), Sullivan (1994) and Sullivan and Howell (1996) also focus on the role of the manager in empowering employees.

Empowerment implies the delegation of power to subordinates. Power, in this context, is interpreted as the possession of formal author- ity or control over organizational resources(the empowerment process, conger and kanungo, 1988) and the delegation of this responisiblity to the others, achieving the same results is a great example of empowerment.

Then we found a very comprehensive study of human empowerment directed by jodi Chamberlain at the Center for Psychiatric Rehabilitation in Boston, where he offers various definitions of psychological empowerment.

Although these definitions are restricted to people with psychiatric disabilities, most of these concepts can be applied in all working environements, since they reflect the human behaviour as a whole( Psychiatric Rehabilitation Journal 20, Spring 1997.).

Therefore we propose a list that covers a very wide range of empowerment characteristics:

The ability to access information and resources for decision-making

The ability to make decisions about personal/collective circumstances

Ability to consider a range of options from which to choose (not just yes/no, either/or.)

Ability to exercise assertiveness in collective decision making

Having positive-thinking about the ability to make change

Ability to learn and access skills for improving personal/collective circumstance.

Ability to inform others' perceptions though exchange, education and engagement.

Involving in the growth process and changes that is never ending and self-initiated

This list isn't self esplicative and cannot help us to untangle from the complexity of the subject. For this reason we'd rather use a different approach by classifying the previous theories in macro areas and then present our own framework of analysis:

Empowerment in work place vs. psychology empowerment:

Work place (Firm level empowerment)

The Concept of empowerment climate proposed by Scott and colleagues (2004) is a shared perception regarding the extent to which an organization makes use of structures, policies, and practices supporting employee empowerment.

Therefore, employees can be empowered if they have access to opportunity, Information, support and resources (Spreitzer, 2007, A review of more than twenty years of research on empowerment at work).

In this way, the Decision making process is spread throughout the company and

Not only in the top levels of the structure.

Empowerment from this social-structural perspective is about sharing power (i.e., formal authority or control over organizational resources; Conger & Kanungo, 1988) through the delegation of responsibility throughout the organizational chain of command (Spreitzer, 2007, A review of more than twenty years of research on empowerment at work).

The result is, if employee have more access to opportunity, information, support and resources, they are more likely to take decisions on their own that fit with the company's objectives.

Thare are 4 points to increase access to opportunity, information, support and resources within the "firm":

1) Participative decision making (Lawler, Lawler, E.E. 1986. High involvement

management). By involving all employees and make them fell included in the decision making process, we give them some of the company's power

2) Flow of information: In order to empower employees, there should be a

downward and backward transparency of information (Spreitzer, 2007, A review of more than twenty years of research on empowerment at work) among all hierarchy levels

3) Flat organization: Empowering organizations tend to be decentralized where the span of control is wide (Spreitzer, 1996).

4) Training of employees in order to fell them motivated and more suitable to deserve strategy role in the company.

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If these 4 points are choosen alone, then the final result is not good enough, but the real impact comes from the interaction and reinforcement among these practices (Lawler, E.E. (1996). From the Ground Up: Six Principles for Building the New Logic Corporation..

Psychology empowerment (Individual level)

Psychological empowerment refers to a set of psychological states that are necessary for individuals to feel a sense of control in relation to their work(Spreitzer 2007).

Therefore now we have moved from a firm perspective to an individual one and we try to define the feelings, emotions, behaviours of the people within the company when they perform the daily activities withing the company. Thomas and Velthouse(1990. Cognitive elements of empowerment. Academy of Management Review, 15, 666-681) were the first to create a theorical framework that tries to explain which areas can influenced the most the individual empowerment. The model is composed 4 main areas:

Meaning: refers to the value of a work goal judged in terms of an individual's own values and standards

Competence: Individual's belief in his or her capability to successfully perfom a given task of activity

Self determination: individual sense of choice about activities and work methods

Impact: the degree to which the individual believes she or he can influence organizational outcomes(cit empowerment 2)

Conclusion: The Lack of single dimension will decrease but not eliminate the overall degree of empowerment (Spreitzer, G.M. 1995. Psychological empowerment in the workplace: Dimensions,measurement, and validation).

This two theories were brought together by Seibert e Co (2,004 ,taking empowerment to the next level: a multiple-levelmodel of empowerment, performance, and satisfaction, The academy of Management Journal) who tried to conceptualize a model and a relationship between individual and work empowerment. The results of this study contributed to evolve the empowerment field of research:

-work unit empowerment climate is positively related to work unit performance(cit empowerment 2)

-No significance data to prove a direct relationship between empowerment climate and individual Work performance, but an indirect link through psychological performance

This research has been fundamental in showing how big level empowerment practises practices (i.e., empowerment climate) influence micro-level perceptions of empowerment(i.e., psychological empowerment), both of which impact key organizational and individual outcomes (unit and individual performance as well as job satisfaction)(Speitzer, 2007)

Conclusion: More empowered teams have better work-unit performance

One dimensional vs multi dimensional empowerment

In the previous area we have seen how two different theory were brought together to form a new multi-level theory

In this paragraph we'll show how a the empowerment matters can be discussed from a different multi-dimensional perspective but the final result yielded is similar

According to Linda Honold( 1997,A review of the literature on employee empowerment) The one-dimensional approach is that managers delegate power to subordinates. It's very simple and it takes into considerations only the action of giving power and responsibility to your subordinates.

The Multi-dimension: Research suggests that employee empowerment is multi-dimensional. It involves how leaders lead, how individuals react, how peers interact, and how work related processes are structured.

In this case, the task of the leader is to create the right environment that facilitate all the actions above-mentioned but the final decision is entitled to the individual himself. If he doesn't accept the situation, or he's uncomfortable to acquire a certain degree of power, then the whole process isn't effective.

Therefore, only when a multi-dimensional approach is taken, the organization become will become empowered(Linda Honold, 1997).

All of these theories gathered together in 2 macro areas show a clear evidence that core elements of social-structural empowerment are associated with psychological empowerment - and that both in turn are related to performance, whether at the individual, team, or unit level.

Moreover, we laid the foundations for our theoretical framework that is based on both these theories, but a new perspectives is added.

Although the field of empowerment has covered a wide amount of research, we haven't found any mentions about the prior experiences of the leaders of a company, who are the ones in charge of Empower colleagues and employees. All the studies have focused on study the empowerment process on a static level, without taking into considerations the influeces given by past experiences .

Therefore we create the following framework:

This model incorporates the 2 main theories explained before.

From one side it's pretty clear the division of firm and individual level, which both lead to the empowerment of people or employees within an enterprise.

From the other side, we decided to use a double arrow to represents the Work-Unit theory, where the empowerment is not only the result of the leaders' ability, but also the employee should accept this role.

Why empowered people are important for a company?

Many studies have been conducted around this theme and the possible outcomes of empowered people. We decided to consider only the 3 final results that have a real impact on different business department of a company: Financial, technological and HR.

Empowered people foster Innovation: Conger and Kanungo(1988a. 'The empowerment process: Integrating theory and practice', Academyof Management Review,31, 471-482.) claim psychological empowerment play an important role in managing the innovation throughout the company.

Empowered people promote company's growth: Various research found a link between Psychological empowerment and both individual and team's performance.

The former relationship has been found by Spreitzer and Co (Spreitzer the G. M., Kizilos, M. A., & Nason, S. W. 1997. A dimensional analysis of the relationship between psychological empowerment and effectiveness, satisfaction, and strain. Journal of Management, 679-704.) who showed a small but notable correlation between psychological empowerment and individual performance.

Furthermore, as stated previously, Seibert e Co demonstrated the how an empowered team can yield a better performance.

Empowered people report higher job satisfaction: Seibert Study(2004) reported a positive link between empowerment and job satisfaction, confirming the same result of previous studies made in a different context (Lawson K. Savery,  J. Alan Luks, 2001 The relationship between empowerment, job satisfaction and reported stress levels: some Australian evidence)

By applying the previous framework, we are going to analyze the past experiences of 3 companies' owners. In particular we'll evaluate how these events influenced and shaped the behaviours of those entrepreneurs in two macro segment: Firm and Individual Level. Within each segment we identified some main empowerment areas to focus on but before starting we offer a quick overview of the 3 companies taken into consideration:

Case description(Copy of Navid's article) and analysis

Polaris optic AB: Is a niche company that designs, develops, manufactures and sells a wide range of rimless eyewear. The company was established in 1979 by Staffan Preutz. Staffan had a lifelong experience with optical stores, as he had worked and experimented in his father's optical store ever since he was a child. His experience with optical lenses, together with a burning interest in design, enabled him to use a new technique and thus becoming a pioneer in rimless eyewear. Later, Polaris also introduced a new world-revolutionary products such as the SP collection, featuring rimless and framewear eyewear. The size of Polaris has been rather constant during the past decade with around 70 to 80 employees most of the time. At present, the company has 73 employees worldwide with 25 people working in Sweden. The turnover is around 70 million SEK($10 Million USD). Almost 93% of the total sales are generated from markets abroad. The company has fully owned manufacturing facilities in UK and Germany, and joint venture in Japan. These two markets generate almost 65% of the company's sales

Index Braille AB:Is a company that manufacturees and sell high quality and technically advanced Braille printers. The company is the world leader within the segment of selling single and double-sided Braille embossers with high printing speed. The company had in 2006 13 employees and a turnover of 36 million SEK($7 Million USD). The company was established in 1982 by Björn Löfstedt, whose mother was blind. Throughout his childhood, Björn had frequently used his technical skills to help her improve her quality of life. His mother worked as an administrative assistant for a local association for blind people and used to write the association's document in Braille. In the Mid-1970s Braille were like manual typewriters, a mechanical device that required powerful strokes on the keyboard to be able to write. Björn got the idea to design an affordable and compact Braille printer, and started work on his idea in secret in the garage. Around this time, he had just started work as a research assistant in the newly established local university, which made it possible to use certain skills and tools for this purpose. Today, 97% percent of firm total's sales are exported to around 80 countries in the world. The firm's largest export markets are the USA, Canada and Europe, which account for 70% for the export.

Liko AB:Specialises in developing , manufacturing and marketing lift and transfer equipment for people with impaired mobility. The main products are patients lifts, stationary lifts, mobile lifts, horizontal lifts, slings, leg extenders, and other accessories for heavy lifting. Gunnar Liljedahl founded the company in 1979 after ten years' employment at the country health council as a problem solver/inventor to improve the quality of life of patients with functional disorders on an individual basis. After a decade, however, he realized that more people could benefit from his inventions, and as well, that the present products in the market could be improved significantly. Patients lifts are a niche market with about 20 major players worldwide; half of them are based in Scandinavia. Liko holds about 60% of the Swedish Market and 45% of the Scandinavian one, and is ranked the third largest company within this segment worldwide, having about 20% of the world market share. In 2006 the company, including its subsidiaries such as Liko Textile, Liko R&D, Liko Production and foreign sales offices in Germany, the USA and the UK, employed 260 people and had a turnover of 400 million SEK( $57 Million USD), exporting 80% of their sales. Durign the past five years until 2006 the company had had an annual growth of 20%.

Polaris case

Since young, the company's owner Staffan Preutz showed his real attitude toward relationships creation when he set up a free hostel for backpackers in his town. He wasn't interested in making any profit but rather he was eager to meet new people and this little network he created has been one of his strengths throughout the whole career. This behaviour was reflected in the first period of the company when Staffan delegated easily power to the others since his real objective, in that period, was only to travel and meet new people.

Most of these experiences turned out to be not successful and the more Staffan became experience, the less he was willing to give away power and empower other people.

We'll show this process through different examples grouped by Individual and Firm Level:

Individual level

Delegation

The entrepreneur Staffan delegated power to people whom he did not know very well at the time. He based his decisions mainly on the trust and he thought and believed these people were going to be able to succeed. There are several cases where it paid off, however, also many cases they were not very successful.

Example 1: He empowered a person within 2 days of their first contact to expand his business in the USA. He was so excited about his business growing on international scale, which was his dream that he did not focus very much on how to do it properly. We can recall his words "Establishing a subsidiary or sales office abroad has never been only for earning money. It is exiting and challenging to start a new project abroad, just like putting a small boat far out in the sea and to watch with enthusiasm if it will stay floating and if it can its way back to the harbor..""

Example 2: Empowering a man, replacement for the first person in the USA, again without getting to know him more and this time it led to huge costs for trying to replace him.

In both of these examples, decisions about empowerment were very fast and they cost the company substantial amount of resources. Nevertheless, there are examples of success with this attitude.

Example 3: In Canada, he started to trust one enthusiastic entrepreneur very quickly and the business started to prosper from this business relationship very soon.

Therefore from to case one we are not able to decide, whether empowering people that you do not very well is positive or negative for your business. It depends on many factors and outcomes differs.

With Staffan's experience, he started to realize the impact of his decisions more intensively. He started to rely more on himself, since he trusted the people who did not live up to his expectations in the past.

Authoritarian style vs. Empowerment

Perceived empowerment is something you can either increase or decrease. As mentioned in the theory part, on individual level, employees need to have meaning, competence, self-determination and impact. Authoritarian style can often diminish felt empowerment by employees as example in the Polaris case suggest.

Example 1: His ability to delegate decreased significantly and he was often unable to choose a specific person for a specific position and tried to take the responsibility himself despite his very limited time options. Example is one person who resign from a board position and Staffan did not think anyone was good enough to take his place.

Example 2: Many employees in his company felt powerless, since they had formal decision-making power, however, the impact of their decisions was questionable. If Staffan was not satisfied, he still had the ultimate power to change the decision. Therefore they did not have the security and they could not feel completely in control.

Example 3: This also led to the second problem. If employees' authority is undermined, they may start to doubt their competence and this happened also in the case as the employees did not want to make a decision Staffan might not have liked, they wanted to ask him for his opinion before taking the decision, but because of this attitude they were perceived as incompetent.

Example 4: The impact of employees' work is undeniably influenced by many factors. One of them is certainly recognition. It is stated in this case that employees never received recognition and were not able to achieve higher position because they were meant only for family members. This leads to demotivation and people feel that their options are very limited.

Due to combination of factors 2, 3 and 4, many employees decided to resign as they could not operate in this sort of environment. These are 3 examples how the opposite of empowerment can be achieved and how badly it can influence company's workforce

Company level

It is critical to say that empowerment on individual level and empowerment on company level do not differ as much in a small company as in a huge company. There is often a significant influence of the owner over majority of process until the company reaches a specific size. These cases describe companies that have very few employees comparing to large companies and therefore the relationships might not be as formal to impose such a complex system of policies and rules as needed in different companies.

Limitations and future research.

Although we added a new perspective to the study of empowerment, our analysis has been based on the data coming from 3 companies that share common characteristics such as they were born global and establish in Sweden. The data offered are very comprehensive but provide a limited view of the subject. Moreover, the lack of a variety of data has prevented us to find a direct relationship between the influence of prior experiences on the overall companies performance, which could be a future research.

Moreover, it could be useful to analyze the same argument within medium and big companies, in order to see if new patterns emerge about the influence on empowered people