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The basic aim of this section is to examine the inter-relationship between strategic management and leadership. This study has chosen British Airways and Tesco Plc in order to illustrate the relationship between strategic management and leadership. Firstly, the study will focus on the British Airways because British Airways is one of largest airline in the world including U.K and they have stood 3rd in the Europe in the last years. The reasons behind chosen British Airways, this airline are most talkative organization in recent times due to pay and work conditions as well as controversial leadership in the airlines and its recent strategic decision by the management. The BA’s main strategy is to deliver a service which responds and reflects the customer’s diverse range of needs and expectations and also create integrate cultural diversity in order to remain competitive in the market. However, the following section will define the leadership and strategic management.
Leadership is a manner in which a leader aspires to persuade his or her team to launch and achieve the organization’s goals (Buchanan and Huczynski, 2004). In order to reach the organization’s objective, develop his or her rule to influence workers. Leaders are the core of a business. The real meaning of leadership involves inspiring a group to come together for a common goal. Leaders motivate, console and work with people to keep them connected and ready to move forward. That means setting a direction, communicating it to everyone and keeping people focused when times get tough (Robbins, 2003).
Johnson and Scholes (2005) stated that strategic management is the set of decisions and actions resulting in formulation and implementation of strategies designed to achieve the objective of an organization. It involves attention to no less than nine critical areas:
1. Determining the mission of the company, including broad statements about its purpose, philosophy, and goals.
2. Developing a company profile that reflects internal conditions and capabilities.
3. Assessment of the company’s external environment, in terms of both competitive and general contextual factors.
4. Analysis of possible options uncovered in the matching of the company profile with the external environment.
5. Identifying the desired options uncovered when possibilities are considered in light of the company mission.
6. Strategic choice of a particular set of long-term objectives and grand strategic needed to achieve the desired options.
7. Development of annual objectives and short-term objectives and grand strategies needed to achieve the desired options.
8. Implementing strategic choice decisions based on budgeted resource allocations and emphasizing the matching of tasks, people, structures, technologies, and reward systems.
Relationship between leadership and Strategic Management
There are strong inter-related between leadership and strategic management. Leadership is just one of the many qualities a successful manager must have. The words of strategic management and leadership are often considered equivalent and many times are used in the same perspective. Care must be taken in distinguishing between the two views. The main aspiration of a manager is to take full advantage of the output of the organization through administrative achievement. To realize this, managers must carry out the following functions: planning, organizing, leading, and controlling. These functions continue to be as significant as ever while providing the ground rules that are considered necessary in businesses just starting out as much as in established corporations (Bateman and Snell, 2007).
The quality management is becoming important and acceptable to the management and leadership of all organizations (Jewel, 2003). It is essential to better understanding of principles of marketing. Apparently, leaders guide staff members in helping the company achieve its mission and goals. Leadership is a vital attribute one must attain in order to be a successful manager. At times, management may be labeled as a position, whereas leadership might be considered a relationship. “Leadership is not about occupying a role – it’s about doing something different” (McGuire and Hutchings, 2006). Having differentiated between management and leadership, this paper will now briefly examine the roles and responsibilities that organizational managers and leaders play in creating and maintaining a healthy organizational culture and use British Airways as an example.
British Airways is committed to helping their employees do their best, both now and in the future. Leadership and Management Development Training leads the abundant instruction opportunities accessible to BA employees worldwide (British Airways, 2009). Efficient leadership is the bond that ties a leader and his or her subordinates together, making management a success. This correlation may make a company stronger and make employees focus on striving towards efficiency, effectiveness and overall success.
British Airways strives to work for a future where every individual’s full potential can be realized. The management at BA is equipped with accountants, product managers; aircraft engineer designers, engineers, marketing and sales that represent one of the most influential leaders of technology in the entire world. As astonishing as this talent may be, it is the management and leadership of the company that make BA a success. This is accomplished by the leadership following the vision and goals set forth at the beginning of the company’s dream that motivates the employees to go further than first thought (BA,2009).
British Airways has been in crisis over the last couple years but it became in an extreme in 2010 because there ware number of strikes and also threatened further strikes by employees by the next year due to pay and working conditions. Despite all of these, for the first time they were able to make a profit in last quarter of 2009. However, except all of these, BA has been able to overcome all obstacles such as natural disasters (ash cloud, terrorists, snow). Hence, all strategic decision was possible because of leadership. The overall objective of Walsh’s approached to reduce the expenditures within the organization as well as exterior. Walsh’s claimed BA needed a second revolution. At the beginning Willie Walsh’s vision of change and strategies were correct but its implementation to achieve his objectives were not well-liked by employees or people around him this resulted in employees’ de-motivation and de-moralization. As a result there was a planning to strike by the employees which was temporarily held by the court decision but there are planning to have a strike. It is therefore, it has been understood strategic management and leadership are strongly related each other.
Tesco Plc is one of largest supermarket chain in the world including UK. The company is British based supermarket chain with 4811 stores in 14 countries. Tesco has got 280,000 thousands employees in the United Kingdom and 202,000 thousand employees in other 14 countries. Tesco was third largest supermarket in the world in 2009. The have continued to grow in sales and profit and annual report of 2010 shows that Tesco has made £62,537m Group sales and £56,910m Group revenue as well as £5.5 billion operating profit.
The main strategies of Tesco are as follows:
Figure 1: Tesco Wheel
Core UK:Providing great value and excellent customer service.
Community: Go for green and be a good neighbour
International: To expand business globally to gain stronger in the business
Retailing services: building the platforms for the future growth and financial services to be expand in the business through the Tesco’s own systems
Non-food: every non-food products needs to be expand globally and quality, price, range should be as same as their food products (www.teso.com).
Under the leadership of Sir Terry, Tesco has followed expansion strategy both geographically and in terms of products and segments, and has now gained 24 percent of the UK market. Tesco’s international expansion has given it a presence in 11 markets in Ireland, Eastern Europe and Asia. While in the UK, an acquisition spree into the convenience stores market has given it a strong urban foothold in London. In most countries Tesco’s preferred tactic seems to be to buy an existing retail chain, or a significant share of one, and turn it into a Tesco subsidiary. Then it can begin the usual tactics undercutting local traders, aggressively competitive pricing, selling petrol, launching loyalty card schemes, 24 hour opening and so on.
Tesco’s overall strategy centres around its customers which is evident from their stated core purpose: “To create value for our customers, to earn their lifetime loyalty” and two values that drive the way they do business: “No one tries harder for customers” , ” Treat people how we like to be treated”. Tesco’s management is firmly committed to corporate responsibility, and sees it not an additional burden or a distraction from serving their customers but rather as an essential part of sustaining themselves as a responsible company.
It is therefore, leadership and strategic management are having strong relationship because strategic decision cannot be achieve without proper leadership and on the other side, without proper leadership, strategic decision cannot be made.
How leadership styles differ in various organisations?
Transformational leadership accomplishes leader’s personal characteristics and his or her relationship with group members. Transformational leadership is about innovation which means new thoughts are derived and put into practice. The transformational leader moves group members beyond their self-interest for the good of the group, organisation or society. The transformational leader helps to bring major positive changes (Mullins, 2007). In most of the organisation, the ratio of transactional leader to transformational leader is high. These organisations face negative growth due to large gap between how things are done and how things should be done. Leaders need to transform organisation from low performance to medium performance or from medium performance to high performance. The transformational leader attempts to overhaul the organisational culture or subculture. The transformation takes place in different ways: raising people’s awareness, helping people look beyond self-interest, helping people search for self- fulfilment, helping people understand the need for change, investing manager with a sense of urgency and committing to greatness (Buchanan and Huczynski2004). Charismatic leadership is the components of transformational leadership. Charismatic and transformational leader communicate their vision, goals and directives in a colourful, imaginative and expressive manner. The specific techniques include raising people awareness of the importance of rewards and getting people to look beyond their self-interests for the sake of the team and the organisation.
Leadership Style at Tesco
The relationship of two-dimensional theories to the idea of a ‘one best way’ of leading manifests itself mast clearly in the way Blake and Mouton (1964) built on the concepts to propose that the most effective leadership style is one which is high on both dimensions. Team management incorporates high concern for production with a high concern for people. TESCO’s employees are emphasized on working as a team, which recognizes interdependence with each other, together with the task to be done. They are trained and motivated to compete the task, work as a team and towards the organization. High performance is expected of the employees. The company believes, productivity improves if the employees are satisfied, which will make them perform well by being creative and innovative.
Tesco’s organisational structure is a hierarchical structure. And you can clearly see the levels of authority, and you would need to show the authority with the leadership styles of Democratic and Consultative because these two styles let their staff have more say in decisions, and they might get too demanding so. The hierarchical structure goes well with the management style because it lets the staff have a say, but they know their position. The Culture has a big effect on the organisational structure and the management style, because the culture has principles to help gain the objectives, with all these together it will form a complete organisation, they will get together to make the objectives achievable.
Figure 2: Leadership Grid
Country club management Team management
Productivity will follow if Work accomplishment
needs of people are satisfied from committed people
Middle of the road management
Concerned with moderate rather than high performance
Impoverished management Authority compliance
Exertion of minimum effort to Emphasizes efficiency
get required work done and organization needs at the expense of needs of people
CONCERN FOR PRODUCTION
(Source: Jewel, 2003)
In reference to Tesco Plc, both transactional and transformational approaches are very valuable to current strategies to implement. The future plans to extend their product portfolio and expansion into overseas market are current thinking of Tesco. Thus these two theories are suggested that the company required adopting both the theories to implement their strategies. But Transformational leadership would be more effects of the leadership. Thus, this theory would be valuable for the Tesco, the reasons are as follows:
Ability to create awareness and importance of the company’s objectives to the workforce
Motivate the employees to develop own-interest
Bass(1985) stated that provides high-level of needs
Tesco need to motivate their employees and behaviour of the leader provides challenge and meaning
The charisma of leadership in order to expansion of their business and improve annual growth more than 12%.
Leader who listen to the workforce and showing concern about the problems of the workforce
It is therefore; it has advisable to both the companies to consider to focus on ‘New Leadership Theories’ rather than old traditional theories such as Fielders Contingency and Path-Goal Leadership Theory.
The first step in the four functions of management is the planning function. The planning function encompasses the vision, values, mission, objective and goals of an organization. A successful manager will first look at the organization’s goals and evaluate how the organization will achieve those objectives and goals. Decisions will be based on the future outlook of the company. This introduction function of management will exemplify the other three functions (Bateman, Snell, 2007).
The key point in differentiating between leadership and management is the idea that employees willingly follow leaders because they want to, not because they have to. Leaders may not possess the formal power to reward or sanction performance. However, employees give the leader power by complying with what he or she requests. On the other hand, managers may have to rely on formal authority to get employees to accomplish goals. I feel the ideal manager would be able to lead in this way where they communicate to their subordinates effectively.
Evaluate how leadership styles can be adapted to different situations
In a modern society competition exists in every scope and businesses are not exceptional. As companies struggle to get more efficiency and profitability good management is certainly needed. It is argued that a qualified leader should know how to motivate people and deal with problems in the most effective way. Moreover, managers have to set objectives for companies in order to check whether the labours are working in a right direction and tasks are doing properly. However, not the same as before, business and situations are changing all the time. Facing a more complicated condition and people with different backgrounds, this study believe that different leadership styles should be adopted to meet different kinds of situations and employees although it is difficult to realize. Generally there are four types of leadership styles which are Autocratic, Democratic, Paternalistic and Laissez-faire (Clark, 1997). The purpose of this essay is to demonstrate why they should be changed to suit various situations. Mainly to say there are five reasons for that.
The first reason for why the author think leadership style should be adapted is that business structures may be different. We know that some businesses tend to be large and have a narrow span of authority. As there are many layers or decision making is centralized, a more autocratic style, which means that workers have no control of the job, should be used because the levels of employees are different. It is much easier to control the business by just giving direct instructions to workers especially the ones who are in the basic level. Otherwise, the business will be in a disordered condition as people are not all working for business objective and giving own opinions for decision making.
Secondly, the type of work force is different. If the labours are all highly skilled and creative they have the confidence to manage their own tasks effectively. What companies need to do is give some advices and let them go. Those employees don¡¯t need too much instructions but a good working condition or freedom of work. In order to achieve this, Laissez-faire is more likely to be used. For example, Tesco is a company which treats its qualified workers like this. However, it can sometimes cause a poor productivity and bad motivation because the incentive of working hard is very few. On the contrast, a group of low level workers tend to be controlled stricter by managers because of the lack of efficiency and skills. Managers will choose to give them a time limited of producing a particular amount of products. Bonus or punishment is also needed in order to motivate them.
Furthermore, the nature of task might affect the leadership style which depends on whether it needs a quicker response or precision (Chambers, 2004). If it needs an immediate result an autocratic style of leadership may be required. It is because the high speed of decision is needed and there is no time for any lower levels to argue. In addition, a perfect procedure is more preferred by producing this sort of goods such as medicine. Fourthly, being strong connected to the task; time is an important reason for varying styles of management. As the company’s project needs to be finished more quickly, communication and feedbacks are not accepted due to the limited hours. All these might lead to a poor motivation because of less communication with workers and lack of job empowerment.
After showing the reasons for why changing the leadership style, it is time to have a look for the opposite side. Certainly, varying styles are difficult because a lot of companies keep using one type for a long time because many times leaders are unable to adapt their management style to a situation. Nevertheless, from what it has been mentioned in the essay, situation and people are changing all the time which belongs to a modern problem. If the leader is not comfortable to manage in another way it is even better to change a person to suit the situation or change the employees. A wrong leadership style will cause ineffectiveness to the performance of a whole company or even damage its future growth. That’s why I still think it should be changed.
In sum, the five points this essay has shown out can obviously prove my opinion. Although changing leadership style for company is not an easy job different situations require different approaches and skills (Prewitt, 2004). I strong believe there is no best style for a company but it needs to vary for the situations and people.
Evaluate a range of Leadership theories and models
Leadership is a term used for defining the characteristics, qualities, skills, and objectives in an individual who successfully leads his or her particular group or organization in the attainment of the desired goal or objective. A leader is simply defined as someone you follow to a place you would not go by yourself (Mullins, 2007). In the 21st Century this definition of leadership has been abandoned. In today’s society most of the individual tasks associated with our daily routines are becoming more complex and diverse. Cultural changes, technological advancements, productivity and commitments are of high importance. Regardless of the terminology leadership presents a vision for the future and some transforming quality, it encompasses authenticity and credibility (Martin & Jackson, 2005). Thus leadership is a trait that is extremely valuable in any society. It is known as a relational process of people attempting to make a difference in a situation. An effective leader is the one who influences other in a dynamic way; leaders are interactive with the people. In the modern era leadership rests on three basic qualities: 1) Intellectual Stimulation, 2) Individual Consideration, 2) Charisma and Inspiration.
There are four main types of leadership theories. The trait theory is the idea that leaders are characterized by certain traits which are present at birth. Early researchers believed that by studying the personality and intelligence of such leaders, they could create the combination of traits that makes a great leader.
Trait Theories: These deal with the attributes and personal qualities that leaders are assumed to possess. Here the basic tenet is that leaders have personality characteristics that are either inherited or developed early in life, which differentiate them from those they lead. According to Stogdill, these include intelligence, dominance, self-confidence, energy and task-related knowledge (Rollinson et all, 1998).
Fred Fiedler, a psychologist at the University of Illinois, tried to determine if the leniency of a leader had an effect on the production of the employees. The study was inconclusive to determine if being lenient had an effect.
Leader-member exchange is another type of leadership theory. This is the theory that deals with the way leaders treat subordinates. Most people have noticed that all subordinates are not treated equally. The theory states that leaders tend to divide their subordinates into an “in” group and an “out” group. Some of the characteristics of what determines which group you fall into are similarities in gender, age, or attitudes.
The fourth theory is Path-Goal Leadership Theory. This is the leadership theory that applies best to Blessed Entertainment. It is based on the expectancy theory of motivation. That theory states that whether a person is motivated depends on two things: whether a person believes he can accomplish the task and his desire to do so. Keeping with this theory, leaders should increase the personal rewards subordinates receive for attaining goals and make the path to attain those goals easier to follow.
Figure 3: Leadership Theories
(Source: Mullins, 2007)
There are number of leadership theories have developed by many authors which has discussed as above but in recent years, increased competitive business environment has forcing to develop new leadership theories. These theories help the human resources to effective use in 21st century (Levinthal, and Posen, 2007). Burns (1978) has described how leadership transform organisation into effective way to manage.
Figure 4: Benefits of Transactional Theories
(Source: Garavan et al, 2008)
Figure5: Benefits of Transformational Leaders
(Source: (Source: Garavan et al, 2008)
There are difference between ‘transformation’ leadership and ‘transactional’ leadership. Transactional leadership concentrate on good working relationship and complete of task which swap through wanted rewards. Transactional leadership is building the relationship between a leader and follower where giving rewards in swap for loyalty.
Figure 6: Transactional Leadership
(Source: Beardwell, et al., 2004)
The diagram shows that transactional leadership is that people are motivated by punishment and reward. Therefore it shows that follower needs to do whatever leaders ask them to do. Transformational leadership has engaging every team members to enhance performance through creating motivation levels for both parties. In order to get full potential from the employees, a leader who is very keen to the needs and motivate of the employees and tries to helps them is transformation leadership. So therefore, motivation is a very important factor which is developing higher level in ability and potential among the employee.
Selecting and justifying the method of leadership and to develop management competencies
The main aims of this part are to selecting the methods of leadership and to develop management competencies for the British Airways. Thus, In reference to BA, both transactional and transformational approaches are very valuable to current strategies to implement. The future plans to extend their product portfolio and expansion into overseas market are current thinking of BA. Thus these two theories are suggested that the company required adopting both the theories to implement their strategies. But Transformational leadership would be more effects of the leadership.
Moreover, It is absolute necessary to make team work in order to improve operational procedures and efficiency in the operations of BA. Leadership required personal strength to motivate all the employees together. Thus, both Tesco and BA have required to an act together in all department such as warehouse, web-design, sales, back-office, company senior management, marketing and other functions etc. Leaders need to motivate and equally inspire all the employees by using equal amounts of extrinsic and intrinsic techniques. In addition, leader needs to make sure that different people can take different amounts of each extrinsic and intrinsic motivation. However, experience is most significant qualities to direct participation in all activities of the organization (Mullins, 2007).
It is therefore, it has advisable to BA consider to focus on ‘New Leadership Strategy’ rather than old traditional theories such as Fielders Contingency and Path-Goal Leadership Theory. In addition, BA can adopt Grattons(2000) future requirements suggestion which has discussed in part 3 and these
A leadership competency model should serve as the foundation for any organization’s leadership development system. An effective model allows an organization to clearly define what leadership competencies are required in order for an organization to be successful, both now and in the future. Leadership development systems (selection, assessment, development, performance management, succession planning) can then be aligned to support the development of these competencies.
Figure 7: Leadership competency
( Source: http://www.greatleadershipbydan.com)
External focus: defines success in market terms â€¦ benchmarks the competition â€¦ makes growth the goal â€¦ comfortable outside the walls of the organization
Clear Thinker: simplifies strategy into specific actions, sets priorities and makes clear decisions
Technology savvy: comfortable with product, service & information technology â€¦ knows how to fund and win
Inclusive leader: connected with the workforce, energizing in approach
Imagination: willing to take risks to promote growth â€¦ on both people and ideas
Confident expert: uses depth as a source of confidence, leading the “what” generation
It is therefore, mangers should have leadership ability, understanding how a business runs, right attitude, good communication skills, general knowledge, time management skills in order to develop management competencies.
To assess leadership skills in an organisation
Seven traits have been found to be particularly useful in assessing leadership style: (1) the belief that one can influence or control what happens, (2) the need for power and influence,
(3) Conceptual complexity (the ability to differentiate things and people in one’s environment), (4) self-confidence, (5) the tendency to focus on problem solving and accomplishing something versus maintenance of the group and dealing with others’ ideas and sensitivities, (6) an individual’s general distrust or suspiciousness of others, and (7) the intensity with which a person holds an in-group bias. Based on previous research linking leaders’ personal characteristics to their political behaviour( Mullins, 2007), these seven traits provide information that is relevant to assessing how leaders respond to the constraints in their environment, process information, and what motivates them to action. Knowledge about the degree to which leaders believe that they can influence what happens and their need for power suggests whether they will challenge or respect the restrictions that they perceive in any setting in which they find themselves. Assessing leaders’ conceptual complexity and self-confidence helps us determine how open they will be to information. And measuring the extent of their ingroup bias, general distrust of others, and tendency to prefer problem-solving functions to those involving group maintenance assists us in learning what motivates leaders. In what follows, we will describe how each trait can be determined through content analysis of leaders’ interview responses as well as indicate what scores on the various traits mean for
Currently a computer program is being developed that will automatically code for the traits discussed here. Entitled “Profiler”, the program will provide a researcher or analyst with the trait scores for a specific leader based on either speeches or interviews. (A more detailed description of the steps involved in doing a manual content analysis of the traits can be found in Clark, 1997).
Review the leadership in BA and Tesco
From my observations of Tesco leadership it became apparent early on that they were using behaviours linked to a predominantly participative leadership style, evidenced by the high percentage of decision making being shared with and within the group. Their principal style as a participative leader appeared to be consultative in approach where most decisions were conferred with team members before final decisions were made by them. As a result, maintaining lines of open communication with his team also seemed to be a main concern. It also appeared that he was attempting to ‘make a connection’ with the members of the team by creating an environment of warmth, friendliness, trust and emotional support. acknowledge that ‘â€¦when leaders concentrate on communication and developing relationships with followers, it is viewed as effective leadership’ (Johnson and Scholes, 2005). Therefore, both of these relations based leadership behaviours have a direct correlation to effective leadership.
However, on the other side BA’s leadership style was not al
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