Leadership in Organizational Settings

Leadership can be defined as the ability to influence, motivate, and enable other people to contribute toward the effectiveness and success of the organizations of which they are members (McShane, S.l., & Von Glinow, 2010). The competency perspectives try to identity the characteristics of effective leaders. The leaders might have specific personality characteristics, such as positive self-concept, integrity, drive, and leadership motivation, knowledge of the business, cognitive and practical intelligence, and emotional intelligence. Besides that, the behavioural perspective of leadership identifies two types of leader behaviour, people-oriented and task-oriented (McShane, S.L., Von Glinow, M.A., 2012). The contingency perspective of leadership takes the view that effective leader diagnose the situation and adapt their style to fit the situation.

There are four leadership styles in path-goal model: directive, supportive, participative, and achievement oriented and several contingencies relating to the characteristics of the employee and of the situation (Bolman &Deal, 1991). According to the founders, there are two other contingency leadership theories include the situational leadership theory and Fiedler’s contingency theory. Transformational leaders create a strategic vision, communicate that vision through framing and build commitment toward the vision. In this topic, cultural values also influence the leader’s personal values, which is turn influence men or women’s leadership practices.

1.2 Background of the Company: AirAsia

In this assignment, we try to probe the leadership style of AirAsia. AirAsia is an airline company in Kuala Lumpur, Malaysia. It is focusing on low-cost with the dream of making flying possible for everyone. Tony Fernandes, the CEO of the AirAsia, who is the founder of Tune Air Sdn. Bhd. He is the one who introduced the budget no-frills airline. Now AirAsia is the largest low cost airline in Asia. AirAsia group operates scheduled domestic and international flights to over 400 destinations spanning 25 countries. Its main hub is the Low Cost Carrier Terminal (LCCT) which is located at Kuala Lumpur International Airport (KLIA). The vision of AirAsia is to be the largest low cost airline in Asia and serving three billion people who are currently underserved with poor connectivity and high fares. There are four mission of AirAsia: to be the best company to work for whereby employees are treated as part of a big family; to build a globally recognised ASEAN brand; to accomplish the lowest cost so that everyone can fly with AirAsia and sustain the highest quality product, enchanting technology to reduce the cost (Company Profile of AirAsia Berhad, 2013)

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2.0 CONTENT

2.1 Competency perspective of leadership

Competencies encompass a broad range of personal characteristics, including knowledge, skills, abilities, and values. Personal characteristics significantly influence leadership emergence – the perception that someone is a leader in a leadership situation. (Steven L. McShane, Mary Ann Von Glinow, 2010). Leadership competencies can be grouped into seven categories such as:

Emotional intelligence

The important attribute of effective leaders. The leader’s ability to monitor his or her own and others’ emotions, discriminate among them, and use the information to guide his or her thoughts and actions.

Integrity

Integrity refers to the leader’s truthfulness and tendency to translate words into deeds. This characteristic is sometimes called authentic leadership because the individual acts with sincerity.

Drive

Drive represents the inner motivation that leaders posses to pursue their goals and encourage others to move forward with theirs. Drive inspires inquisitiveness, an action orientation, and boldness to take the company into uncharted waters.

Leadership motivation

The leader’s need for socialized power to accomplish team or organizational goals. Effective leaders try to gain power so they can influence others to accomplish goals that benefit the team or organization.

Self- confidence

The leader’s belief in his or her own leadership skills and ability to achieve objectives. Effective leaders are typically extroverted such as outgoing, sociable, talkative, and assertive, but they also remain humble.

Intelligence

The leader’s above-average cognitive ability to process enormous amounts of information. Leaders have superior ability to analyze a variety of complex alternatives and opportunities.

Knowledge of the business

The leader’s tacit and explicit knowledge about the company’s environment, enabling him or her to make more intuitive decisions.

2.2 Transformational leadership

Transformational leadership is about “leading” changing the organization’s strategies and culture so that they have a better fit with the surrounding environment. Transformation leaders are change agents who energize and direct employees to new set of corporate values and behaviors. They create, communicate, and model a shared vision for the team or organization, and they inspire followers to strive for that vision. Next, Transformational leadership is particularly essential in organizations that require significant alignment with the external environment.

There are several elements of transformational leadership:

Create a strategic vision

It refers transformational leaders establish a vision of the company’s future state that engages employees to achieve objectives they didn’t think possible. Strategic vision creates a “higher purpose” or superordinate goal that energizes and unifies employees. A strategic vision might originate with leader, but it is just as likely to emerge from employees, clients, suppliers, or other stakeholders.

Communicate the vision

It refers transformational leaders communicate meaning and elevate the importance of the visionary goal to employees. They frame messages around a grand purpose with emotional appeal that captivates employees and other corporate stakeholders. Framing helps transformational leaders establish a common mental model so that the group or bring their visions to life through symbols, metaphors, stories, and other vehicles that transcend plain language. Metaphors borrow images of other experiences, thereby creating richer meaning of the vision that has not yet been experienced.

Model the vision

Modeling the vision is also important because it builds employee trust in the leader. The greater the consistency between the leader’s words and actions, the more employees will believe in and be willing to follow the leader.

Build commitment toward the vision

Build commitment toward the vision which is transforming a vision into reality requires employee commitment. Transformational leaders’ words, symbols, and stories build a contagious enthusiasm that energizes people to adopt the vision as their own. Leaders demonstrate a “can do” attitude by enacting their vision and staying on course. Their persistence and consistency reflect an image of honesty, trust, and integrity. Lastly, leaders build commitment by involving employees in the process of shaping the organization’s vision.

Application

Competency Perspective of Leadership

1. Leadership motivation

Toni Fernandes was a leadership motivation leader. He was very accessible to the media was entirely committed to his business. He tries to gain power and influence others to accomplish goals that benefit the team or organization. For example, he wore AirAsia’s official T-shirt and office red rap cap to almost every official function and sometimes he will serve the customers on the plane together with employees. (Tony Fernandes, 2012) He had done this action because he wanted to motivate his employees move toward together to achieve the goals. Besides that, Tony Fernandes was an outgoing, sociable and talkative person. He gave his phone number to all the media representatives, and was himself advertisement for his company. Although he was a Group Chief Executive Officer of AirAsia, but he also remain humble in front of others. Because of his personal characteristic and attitude, he was able to achieve their company’s objectives and goals. He had became a good example for his employees, so that employees willing to follow him to accomplish the goals.

2. Intelligence

Tony Fernandes was an intelligence leader. He had superior ability to analyze a variety of opportunities and alternatives. He had a good vision of the future because he was exploited the market’s opportunities well. AirAsia’s vision is to be the largest low cost airline in Asia and serving the 3 billion people who are currently underserved with poor connectivity and high fares. (AirAsia Corparate Profile, 2012) Although the context was not very beneficial to enter the market, but Tony Fernandas chose to take the risk. He believed that he and his management team were able to analyze and manage the opportunities and alternatives with their intelligence. For example, Tony Fernandes had used his intelligence and finally transformed AirAsia from a heavily-indebted subsidiary into an industry player. Besides that, Tony Fernandes had started a hotel chain, Tune Hotels which is based on the no-frills concept by using his intelligence. He had involved in different industry in the marketplace.

3. Knowledge of the business

Tony Fernandes had the knowledge about the business and company’s environment which can enable him to make more intuitive decisions. For example, Tony Fernandes was the first person who entered the market segment of low costs and no frills. He did not take risks only by taking over AirAsia, but also in its drastic changes. Since the creation, he continually brought a lot of innovative concepts, such as, booking services for hostels, travel insurance, online booking and check-in, car rental, holiday products, credit card or medical care. He also deeply changed the business model of the airline company which is choosing a low-cost and no-frills strategy and moved down the value chain. Throughout the changes that had made by Tony Fernandes, we believe that Tony Fernandes had enough knowledge about the business. With this knowledge, he was able to achieve company’s objectives and goals.

4. Drive

Tony Fernandes was a leader who motivates and drives his employees (Allstars) to pursue their goals and encourage them to move forward with him. In AirAsia, Tony Fernandes had tried to introduce something in the management philosophy, where he wants people to pursue their dreams, pursue their passion. For example, Tony Fernandes’s childhood dreams included running an airline, owning an English football club and an owning Formula One racing team. (Tony Fernandes, 2012) Thus, Tony Fernandes decided to achieve and fulfill his dream by buying an existing airline and started to transform it into an industry player. At the same time, Tony Fernandes also encourage his employees (Allstars) to pursue their passion and drive them to move toward the goals. He had created an environment where people can learn, grow and do what turns them on. Because of this, employees were being motivated by Tony Fernandes and they started to pursue their goals together with Tony Fernandes.

Transformational leadership

1. Create a strategic vision

Tony Fermandes is a chief executive officer or director AirAsia Berhad and he is transformational leader because the business model of the airasia are changed by him which is ” Now everyone can fly” a low-cost and no-frills strategy and moved down the value chain. It also has successful swiftly broken travel norms around the globe and has risen to become the best of the world. Tony Fermandes mortgaged his home and sank his savings to invest Airasia Company (Alesia Sion, 2012).

Tony Fermandes have develop strategic vision of the company to which is Airasia be the largest low cost airline in Asia and serving the 3 billion people who are currently underserved with poor connectivity and high fares. As we know that, nowadays many airplane companies come out different strategies to make their company better than competitors so he has create a good vision for doing their business once he takeover the company. Form the year 2004, Airasia had achieved the low-cost airline awards is the low cost airline in the world. It proved that he successful to accomplish his company vision.

2. Communicate the vision

Next, Tony Fermandes work hard to create an environment where employees can learn, grow and do what they should do in company. He also encourages employees to pursue their passions love their jobs at AirAsia based on their environment. Besides that, the nice quoted part every month he spends a day as a baggage-handler; every two months, a day as a cabin crew; every three months, a day as a check-in clerk (Shashank Nigam, 2009) to describe he always change jobs to get experience with different department. He also established a “culture department” to “pass the message and hold parties”. The workplace are different the traditional hierarchal Asian population which open plan workplace so that all employees can meet him by anytime.

3. Model the vision

He also modeled the vision of the company which is to prove that he not only talks also enacts it to let everyone fly by providing low-cost airfares. Furthermore, the CEO Airasia Tony fernandes personal credo is “dream the impossible, believe the unbelievable, and never take no for an answer”. There was a real example which is started AirAsia Thailand, Tony was asked by a women about she wanna be a pilot, then tony replied that if she qualify he will hire her as a pilot. Lastly, she did and became a first officer and subsequently now she is a full-time captain and flying in the plane (Chris Forrest Harvey, 2012). This show that he let everyone can fly and also let everyone have the opportunity to become his workers help them to achieve their own dreams.

4. Build commitment toward the vision

Lastly, Tony fernandes build commitment toward vision which transforms the vision in reality. He desire to start low-cost airline company then he has create the good vision of the company to let everyone can fly in reality. Therefore, AirAsia keep promote promotion package with low prices for customers to enjoy low prices fly to different places. AirAsia fares are significantly lower than those other airline service providers, websites fares also cheaper than frontline counter price and having free seats promotion to give the customers opportunity to enjoy and also for those who cannot afford the prices. It is to accomplish the vision “everyone can fly” in reality. Besides that, He break down hierarchy to encourage employees to speak out and breaking down walls for example he sit with his employees in an open floor plan and also let his contact number to his employees so they can just call, e-mail and SMS him directly and solve it quickly which do not need go through any department. Even the lowest ranking officers also can have his phone number to contact him directly which means he treats everyone as equal and willing to commit to their needs (Shashank Nigam, 2009).

Disadvantages

One main issue in related with Air Asia in leadership in organizational settings in which the competency perspective of Tony Fernandes may have several limitations. The leadership that Tony Fernandes applied might assume that the same personal characteristics are equally important in all situations. This may be false assumption as this perspective is too complex to have universal list of traits to apply to every conditions. Other than Air Asia, Tony Fernandes is the chairman for the Queens Park Rangers Football Club. Tony Fernandes keeps defend the football club with his own competency perspective that QPR football club that the club can overcome their conflict. This shows that Tony Fernandes had used the same personal characteristics equally in all situations whether in Air Asia or the QPR football club.

The second limitations would be that the leadership Tony Fernandes has might influence only people’s perception that someone is leader, not whether Tony Fernandes makes a difference to the organization’s success. This perspective only shows Tony Fernandes’s leadership potential instead of leadership performance. Therefore, it doesn’t shows that the effectiveness of Tony Fernandes’s leadership compares to other perspective of leadership. One issue we can see that in the Air Asia wordpress showed that Tony Fernandes had cheated on the price of the shares of Air Asia. But then it was found out by the Australian’s effective enforcement that Melboure Federal Court imposed a huge fine of Aussie dollars 300,00 on Air Asia and Air Asia X for this misleading website information cheating its customers concealing charges of taxes. Why does this issue happen? It is simply because the dropping by the angry customers who’re also the shareholders that would not trust anymore on Tony Fernandez and Air Asia over their scamming businesses deals and unfair deals to the customers.

As for transformational leadership applies by Tony Fernandes, it can be only mention in general that leaders that are transformational when they successfully bring out the change, rather than when they engage in certain behaviors we call transformational. Therefore without the success done by Tony Fernandes towards the vision of Air Asia, Tony Fernandes would not be entitled of this perspective leadership.

3.0 RECOMMENDATION

Competency perspective of leadership

A company can achieve success if the leader can execute that the competencies that is difficult for others to replicate. In this competency perspective of leadership, Tony should organize a team to identify new directions or actions for the whole management. Besides that, he should often organize a meeting of the employee to discuss and clarify what they will need to do differently as a result of changes in the company. Problem solving or decision making process with the management team will be another alternative for Tony to have a better competency perspective of leadership.

Emotional intelligence is an important skill that a leader required to influence his/her employee to perform well in their job. Therefore, Tony should have a good management for his emotional to prevent a conflict with his employee or having a wrong perspective decision due when his emotional level is low. Good leaders know their strengths and limitations, so they able to control their emotions and behaviors. Thus, Tony needs to strive for his personal development by engaging in continuous learning. Based on the learning, Tony should be able to adapt to stressful situations and be able to maintain a balance between his work and non-work lives.

Lastly, Tony should have a leadership to maximize the potential of others and motivate them to attain shared goals. He must be able to manage individual and group performance with an understanding of group dynamics and team building. Tony needs to provide the drive for his employees to make them have better work performances. He should be understanding and be empathic toward individual’s emotions and be able to resolve conflicts in a respectful manner. One of the ways to motivate the employee is to create a slogan of company to improve mutual relationship between company and employees. Besides that, Tony should play as a role model with competency attributes for his employees, and that will create a drive to make them set Tony Fernandes as a target to surpass.

Transformational leadership

Transformational leaders have the capability to successfully achieve the objective because of four attributes which including charisma, the ability to provide inspirational motivation, the ability to stimulate intellectually, and the ability to offer individualized consideration. According to Barnerji and Krishnan (as citied in Kasturi, 2012) a good transformational leader must possess the ability of articulating a convincing and realistic vision and focus others towards a new critical path. In certain circumstances, a company may need to be redesigned to support the whole transformational leadership.

As we know, create a strategic vision is a fundamental element of a transformational leader to become successful. Tony Fernandes need to create and communicate his vision thus stimulate discussions with his subordinates. For example, he may run brainstorming meetings with the subordinates to present new organizational models. With this, the employees will be more understand on the company objectives and to have better job performances. Charisma is another important component to which a leader to behaves in commendable ways that cause employees to identify with the leader. Tony also needs to be a role model for their followers with having a clear set of values and demonstrating them in every decision. The leader and followers must build a mutual trust between each other on a solid moral and ethical foundation (Covey, 2007).

Besides that, the leader must create an inspirational motivation for the employees as the motivation is appealing and inspiring to employees. For example, Tony Fernandes can communicate optimism about future goals with his employees to provide a motivation for them to perform better in the work field. It is important that this visionary aspect of leadership be supported by communication skills that allow the leader to articulate his vision with precision and power in a convincing and persuasive way. Therefore, a good communication skill is required to complete this element of being a transformational leader.

Furthermore, Tony should acts as a mentor or instructor to the employee and listens to their apprehensions and needs. Tony can encompass the need to respect and celebrate with the employees for their individual contribution for the company. Tony can reward to those contributed employees for their good performance in job, this can motivate the employee to have a better commitment on their job. This way not only educates the next generation of leaders, but also fulfills the individuals need for self-actualization, self-fulfillment, and self-worth. It also naturally propels followers to further achievement and growth.

According to Burns (as citied in Arachchi, 2012), it show that transformational leader as reflecting the traits and behaviors are required for initiating change. These leaders need to identify themselves as change agents and take responsibility for transformation. Generally, they are risk takers and courageous, believe in and trust people, have a clear values in motivation. In other words, Tony needs to deal with complexity, ambiguity and uncertainty and share his vision with the employees. To fulfill this element, Tony should show his confidence of taking risk in doing business and prove to his employees that he has the ability to do so. With that, the employees will be influenced by his leadership and help the company to achieve the goal.

Recommendations – Other Relevant Theory

Other than competency and transformational perspective leadership, there is another theory that can be applied by Tony Fernandes to solve the problem which is implicit leadership perspective. The competency and transformational leadership perspectives make the basic assumption that leaders make a difference. However, leadership also involves followers’ perception about the characteristics and behaviors of a leader. This perceptual perspective of leadership is collectively called implicit leadership theory (Steven L. McShane, Mary Ann Von Glinow, 2010).

According to the implicit leadership theory, everyone has leadership prototypes which they use to evaluate the leader’s effectiveness. Employees are more willing to allow someone to influence them as a leader if that person looks and acts like their prototype of a leader. Tony Fernandes should possess a good leadership prototype as he is the CEO of Airasia. These prototypes can be developed through socialization within the family and society, shape employees’ expectations and acceptance of others as leader, and this in turn affects employees’ willingness to serve as followers. Such leadership prototypes not only support Tony Fernandes’s role as a leader, they also form employees’ perception of the leader’s effectiveness. If Tony Fernandes acts consistently with employees prototypes, they are more likely to believe that he is an effective leader.

Besides that, as mentioned earlier, the leadership that Tony Fernandes applied might assume that the same personal characteristics are equally important in all situations, but this may be false assumption as this perspective is too complex to have universal list of traits to apply to every conditions. Therefore, the contingency perspective of leadership plays an important role to help Tony Fernandes to solve the problem. The contingency perspective of leadership is based on the idea that most appropriate leadership style depends on the situation. It assumes that effective leaders must be both insightful and flexible (Steven L. McShane, Mary Ann Von Glinow, 2010). Tony Fernandes should put efforts to choose and enact different styles to match the uncertainty situation. Moreover he must have high emotional intelligence so that he can diagnose the circumstances and match his behaviors accordingly.

4.0 CONCLUSION

The studied prove that there are two leadership theories have been implementing in the company, AirAsia: competency perspective of leadership and transformational leadership. There are seven dimensions has been found in competency perspective of leadership such as emotional intelligence, integrity, drive, leadership motivation, self-confidence, intelligence and knowledge of the business. However, Tony Fernandes only apply leadership motivation, intelligence, drive and knowledge of business in his business. Emotional intelligence and drive are recommended implement to the business to prevent the conflict with the employees and to increase the team performance. For the transformational leadership, it emphasizes to create a strategic vision, communicate the vision, modeling and build commitment toward the vision. In this case, Tony Fernandes has successfully applied all the four dimensions of the transformational leadership in the business.

In the recommendation part, the need to create and communicate vision thus stimulate discussion with subordinates is a must to Tony Fernandes. He also need to create an inspirational motivation for the employees and communicate with employees will help them perform better in their work field. Hence, a good communication skill is required to being a transformational leader. Besides that, Tony needs to deal with complexity, ambiguity and uncertainty and also share his vision with the employees to influence them perform well to achieve the goal. There are some points can be identified and apply to other relevant theory, for example, implicit leadership theory. Implicit leadership theory emphasize the importance of involves follower’s perception about the characteristics and behaviors of the leader. And this point not mentioned in the competency and transformational leadership theories.