Welcome to my research report and this is a unique and interesting research on how leadership does vary from profit vs nonprofit organization. I am very excited to do this research to know the results that does an organization influence leadership and vice versa.
I am working in a non-profit organization and the aim of the organization is to serve the community and provide necessary services to the needy people. I am wondering how to compare my organization's leader with a profit organization's leader. We know that in a profit organization the leadership of the leader primarily judge with growth of the company and financial performance of the company.
How to judge leadership standard?
It will be a difficult task to evaluate two different leaders from two different types of organizations. So what will be the parameter to judge the two leaders and their leadership. Recent days, the leaders from corporate and profit organization are in limelight of media and business schools and a matter of discussion of leadership. It is very rare that a leader from a non-profit organization is limelight. What is the reason behind to make such differences in between two different sectors?
Leadership in a profit vs non-profit organization
A common practice is going on that mostly leaders migrate from non-profit organization to profit organization to proof himself and his leadership skill. The purpose of the research to know in-depth what is/are the reason(s) or challenges for a leader when they change job to different sector of organization. Any silent factors such as age, pace of work lack of opportunity, recognition and power influences to change different sector. On other, a leader changes his job from profit to non-profit organization just because to release pressure or not efficient with his leadership to drive the company.
If I want to pursue my carrier with a profit organization, what mindset I need to change or develop. What are the skills I have to develop which because I don't have working experience in a profit organization. Does the leadership theory fit with the leaders working in non-profit organization? Does any specific leadership theory exist for a particular sector? All these questions are in my mind at this moment and I would eager to know the outcome of the research.
Leadership is a complex process and a real leader that keeps the world falling apart and improves the human condition, and the leader must craft a vision, motive people through persuasive communication and that makes some leaders/ organizations successful and other unsuccessful (Williams, 2005). This paper represents an initial attempts to conclude that does leadership changes with organization or not and need to do more research on the leadership and leadership in various sectors.
REVIEW OF LEADERSHIP THEORY
Before going to discuss and critically evaluating the leadership theory here is a brief overview of the leadership theory. Research has examined leadership skills in different prospective time to time and reveals an evolving series of 'schools of thought' from 'Great Man' to 'Transformational leadership'. In early theories tend to focus on the behaviors and characteristics of a successful leaders, and later the theories shifted to contextual nature of leadership and the role of followers.
Great Man Theories
It is a belief that leaders are extraordinary people, born with exceptional qualities, destined to lead. The term 'man' used intentional since until the latter part of the 20th century leadership. It was thought of as a concept, which is primarily male, military and Western. This led to the next school of Trait Theories.
Leadership exists in abundance and continues to be produce with lists of traits or associated qualities. Some positive or virtuous human attribute, from ambition to zest for life described virtually in all the adjectives in the dictionary.
To know more about leaders' behaviors that how actually they do rather than on their qualities. The focus is on different pattern of behaviors of leader are being observed and categorized as 'styles of leadership'.
It is being testify that how leadership acts to a specific situation. For example, in some situations leadership may require an autocratic style. On other side may need a more participative approach. There may be differences in required leadership styles at different levels in the same organization or company.
Theory shows the relationship between the leader's orientation or style and group performance under differing situational conditions. Task oriented leaders were more effective in low and moderate control situations and relationship oriented managers were more effective in moderate control situations.
This approach emphasizes the importance of the relationship between leader and followers, focusing on the mutual benefits derived from a form of 'contract' through which the leader delivers such things as rewards or recognition in return for the commitment or loyalty of the followers
"Burn (1978) stated that transformational leaders are individuals that appeal to higher ideas and moral values such as justice and equity and can be found at various level of an organization"
Each of these theories takes a rather individualistic perspective of the leader, although a school of thought gaining increasing recognition is that of "dispersed" leadership. This approach, with its foundations in sociology, psychology and politics rather than management science, views leadership as a process that is diffuse throughout an organization rather than lying solely with the formally designated 'leader'. The emphasis thus shifts from developing 'leaders' to developing 'leaderful' organizations with a collective responsibility for leadership.
My organization is a not profit organization and transactional theory is appropriately applicable for the organization. The mission of the organization is to connect and serve the community. Mostly in a non-profit organization, salary scale is lower than a profit organization. In the organization, employees are mostly female and they are secondary earning member in their family. So they would like to prefer an organization where the work pressure is less. A group of employees is also there who would like to do some voluntary work as well as earn some money. Third group, who joined the organization to gain experience and a first stepping-stone. Finally, a group of employees who are passionate to do voluntary work and would like to attach with a voluntary welfare organization.
It is very common in a non-profit organization that the salary is lower than as compared to a profit organization as well as limited benefits. But workload and work pressure is compared to a profit organization. Then why talented employees work in a non-profit organization with low salary. It is also true that all employees are not working for salary in the organization and few of them want rewards or recognition. Few of the employees want flexible work environment show that they will balance their family life as well as professional life.
What happen when a talented CEO joins a non-profit organization and his whole working experiences in a profit organization? Under his leadership definitely he would like to change the operational procedure and boost the output of the organization as same as his previous organization. Now it can imagine the work pressure of the organization because due to change of the leadership. But for the leader this is a normal work culture because of his past experience or habit.
The important question is the CEO is going to increase the salary of the employees. No, there will be no change in the salary but the work pressure increases. This is an achievement for the CEO that under his leadership the organization has output increases without any extra expenditure. If a leader only focus on output, and growth of the organization then such type of the leadership will fail to run a non-profit organization.
From my experience and observation, I can say that leadership in a non-profit organization is different from a profit organization. So we can observe here that an organization influence the leadership skill. If a leader wants to migrate from profit to non-profit organization and vice-versa, the leader should adapt and change according to the situation and need. The leader should be creative so that the reflection and impact of the previous experience will be minimal.
I would like to give an excellent example of leadership, that how a real leadership can changes the society where situation was adverse. Mahatma Gandhi, a freedom fighter of India; we all know his leadership and the impact during the freedom moment in India. During the freedom movement in India, all the freedom fighters are fighting with arms against the British at all levels at their best. Mahatma Gandhi chooses a different way to fight against the British i.e. without any arms. At the beginning, nobody believes that a simple man will be so powerful just because of his leadership. It was not an easy path for him at the beginning because the condition was adverse. Everybody believes that freedom can only able to get with violence against the British rule.
He started march alone around the India and people slowly started joining him. Later people develop believe on him that freedom can get though non-violence. Hence, the violence slows down which save many lives and families. Finally, the British government declared independence to the India from British rule.
Manager and management vs Leader and leadership
Manager and management: "Burns (1998) describe managers are transactors. Managers are more structured, controlled, analytical, orderly, and rule-oriented end of the continuum.". "Management deals with carrying out the organization's goals and maintains equilibrium" (source: changeminds.com).
Leader and leadership: "The leader end of the continuum connotes a more experimental, visionary, unstructured, flexible, and impassioned side". "Leadership deals with change, inspiration, motivation, and influence" (source: changeminds.com).
"Manager and leader are not the same. They think differently internally, and behave differently externally". "Managers are people who do things right and leaders are people who do right thing" (Bennis & Nenus, 1985).
Leadership theory doesn't explain about the manager rather than different types of leadership skills. All leaders can be a manger but not all managers can be a leader. It explains that all leaders have a quality to become a manager but not all managers have a quality to become a leader. A manger have sub ordinate, which they have to complete the project or task as assigned. Managers are not risk takers they just obey the instructions given to him, monitor, and overview the subordinates' performance. Their job is very structured and stable and within a limited boundaries.
"Leadership is an art (Bennis, 1989), of influencing, directing, guiding, and controlling others to obtain their willing obedience, confidence, respect and loyal cooperation in accomplishment of an objective" (source: changeminds.com).
Leaders don't have subordinates like managers and their job are not very structured. Leaders have followers, which they inspired from their leadership skill. Leaders are visionary and they are risk takers they don't limit their self within the office hours.
My organization has multicultural and multinational employees. We know that it is very difficult for an organization to manage multicultural and multinational employees. To maintain harmony, integration among the staff and inside the organization is very tough task. Without a good leadership, it is not possible to understand the different employees and their way of work. If my CEO only thinks like a manager and focus day-to-day operational procedure to run the organization then it will be fetal for the organization. Then there will be no harmony and integration among the staff, which directly affect the output and performance of the staff. Even though my organization is a non-profit organization but leadership required to manage the multicultural and multinational team to motivate and focus towards the organization's mission and goal.
When IT Companies from United State want to outsource in India. Initially both parties have difficulties to understand each other's work culture. Therefore, they have difficulties to understand each other and come to a common conclusion. It is true that initially the team thinks and acts like a manager and have lack of leadership skill. The team is just thinking around the task was given and not thinking beyond that and the discussion was not productive. The US team backs to their boardroom and after much discussion, they conclude that a mediator need who has leadership skill and knowledge of both countries culture. Finally, it works to create better environment in the boardroom for discussion and negotiation. Now India is the valley of IT outsourcing industry.
Real and effective leadership is truly demanding in today's global world. It is not limited to only companies but also for nations to resolve the conflicts between two countries. Ledership also plays an important role as peace envoys to talk between two parties.
My Preferred Leadership theory
I personally prefer transactional theory where I have a better understanding with my staff. I may able to create stress-free working environment for them so that my employees perform better and they have an emotional attachment with the organization. It will help me to reach closer to the employees and to know closely their strength and weakness, which may help me to plan their carrier path and training map accordingly within the organization.
Reason why I preferred transactional theory, since 10 years I am working with the physically and intellectually impaired children. Children are shadow of God they are true and innocent. When you work with them for long period your emotions also changes with time and you start seeing things very straight forward without knowing the disadvantage or danger behind. Previous experience always helps to change and build a person's character and I am not different. Therefore, I do not like violence, jealous and other bad behavior in my professional as well as in my personal life.
There are practical limitations and drawbacks of this theory; few employees may be takes an advantage of friendly atmosphere and attitude. In addition, it may be challenging for me to maintain rule and regulation of the company and high percentage of output.
This is just my preferred way of leadership, and to become a successful leader definitely I have to adjust and adopt according to the situation according to best of my knowledge and experience. I understand that leadership influence with previous experience, environment, education and family background. All these factors are collectively works together to build character of a leader and his leadership skills.
Easy Ltd and my experience
For any company and a country, investment is a driving factor but it is not always necessary. Creativity is the solutions for limited fund and key of success. Easy Ltd also has lacking of creative ideas. There is no challenge for a leader where a product i.e. traditional bike is already successful and having continues demand for the product. Whereas the Mountain bike sales and sales growth is not same as traditional bike. We cannot compare the sales of mountain bike vs traditional bike because the users of mountain bikes are limited and used only for leisure or sports purposes. Whereas the traditional bikes, people uses for everyday transportation.
Development and production of electronic mountain bike and electronic urban bike need huge investment and Easy Ltd. has financial constrain for investment to extend the product line. It will be also a risky movement to introduce the products without knowing the market potential and the product may not successful. In case, if the new products are not successful then it makes more difficult for the company to run and sustain production of existence successful products.
Always-big investment and great products are not successful in the market even though there are potential demands of the product. The classic example apple iPhone when it was first launches in 2007 it was not successful and later it is huge successful there are lot of factors behind successful and unsuccessful of a product or service; I am not going to explain the reasons.
On other hand, apple was lunched iTune in 1993, which is huge successful in the market and appreciate the other products such as iPod and iPhone. It is very creative idea to sells the songs online and the investment is less than iPhone. iTune is very small product if we see the apple company's profile but iTune is a good source of income without a huge investment. So small investment and creative idea also be successful and give a good return.
So we can see the outcome with the above two products from same company that how creative idea make a difference even though have limited fund or investment. Production of spoke will be a good move for the company to make huge profit with less investment as there is no competitor. The brand also gets publicity while reaching new customers and it will help the brand to sell new products in future
I would like to share one of my experiences, I was attending an international conference for physically changes people. Professionals come around the world in various fields with their research product. Each participant spends lot of money for their research and makes sophisticated devices. However, on other hand, I make few devices using low cost recycled materials and the feedback with very good during the presentation and exhibition. Everybody appreciated the product and on other who spent lot to make sophisticated devices didn't get appreciation. Creativity always keeps ahead a company where other companies struggle on the same platform.
Emotional intelligence and impact on my organization
It is very important and essential for leadership in a non-profit organization where employees work on low wedges or a segment of employees just working for self-satisfaction working with needy community people. Salary is not a satisfaction factor for all employees in an organization. Few want reward, reorganization and comfortable environment. At first, the leader has to understand himself and his emotions, his own goal, and his intention, then let know about others EQ so have a better understanding of others and their feelings.
The five 'domains' of EQ identifies by the Goleman are:
Self awareness; knowing own emotions
Self management; managing own emotions
Social awareness; recognizing and better understanding of other people's emotions.
Social skill; managing relationships with other people, i.e., managing the emotions of others.
(Source: businessballs.com & HBR article)
When a leader join an organization that is working with needy people in the community, need to ask himself that why he want to work with the organization. It will be easy to explain other that why he is associate with the organization, and what he wants from the others. Working with a non-profit organization needs a passion and commitment to serve needy people.
A leader should have better understanding and awareness of the employees' emotions, where the employees are also working with people with emotionally effected. If the leader have better understanding of the employees emotions, which will help to create better working environment in the organization and have trust, which will help to improve the professional relationship and have better understanding. It not just applicable for non-profit organization there is lot of profit organizations who is taken care of their employees and company's leadership has better understanding of EQ.
Complexity and Leadership
"In an extensive review of the literature on executive leadership, identifies four conceptual models that focus on the requisite qualities of executive leaders.
The four models are as follows:
Conceptual complexity models,
Behavioral complexity models,
Strategic decision-making models,
Visionary or inspirational models"
(Lawrence et.al, 2003).
In the new view of complexity leadership, leading is a process that can occur in the interactions between any two individuals. In contrast to the old view of a single leader who takes independent actions aimed at changing individual- and organizational behavior, the new complexity leadership mainly focuses on the dynamics of leadership and it covers hierarchy of an organizational system. Each interchange and every connection provide opportunities for leading, as peers individually and collectively learn and grow and engage in the continuous process of organizing (Weick, Sutcliffe & Obstfeld, 2005).
"Complexity leadership theory also reflects a new approach to understanding dynamic organizational capabilities, including innovation, strategic alliance making, and merger and acquisition capabilities" (Lichtenstein et al. 2006).
Seeing leadership as a relational phenomenon that is distributed across individuals goes beyond current conceptions of shared leadership (Pearce & Conger, 2003), collective leadership (Weick & Roberts, 1993), distributed leadership (Gronn, 2002), or relational leadership (Drath, 2001). Complexity leadership focuses on these processes of change in individuals, groups, ventures, organizations and institutions occurring in daily interactions, interventions that occur in weekly or monthly timescales and macro-social events that accrue over months and years.
Future strategies for the benefit of leadership and conclusion
Burn (1978) introduced the transformational leadership, describing it is as not a set of specific behaviors but rather as process by which "leaders and followers raise one another to higher levels of mortality and motivation".
The whole world is become a global village, the companies are doing business globally. Human resources migrating around the world the trend are going up to hire multicultural and multinational employees. The coming days will be difficult for leaders to handles lots of variation and complication in the technologically advanced society. As the technologically changes with the fast speed it will be more challenging for leaders to think creative, innovative and see the future market demand as fast as competitors. On other side, people from different territory and nations live together so there will more social conflicts. Leaders needs to make suitable policies for the citizens and migrants.