Leadership Styles At Asda Plc Management Essay

Knowledge is power, and information is nowadays one the most valuable assets if not the most valuable one. However [if not properly managed] information becomes rapidly useless, becoming a serious competitive disadvantage for any organization.

Leaders play a crucial part in the game of knowledge management in all levels inside a company. The basic skills of any leader should make him/her able to solve problems, to make decisions, to plan, to manage meetings, to delegate, to communicate and to self management, but it also requires human qualities for nowadays good leaders are those who are capable of understanding and responding to the people’s needs and to the constant challenges and demands of modern days, without compromising the goals of the organization. Instead in the traditional model the leader would be at the top of the hierarchy as a chief authority.

Currently a good leader is not the one who is “feared” [while occupying a power position inside an organization] but the one who is respected and trustworthy for its human qualities like character, values, ethics and beliefs, while combining it with other specific skills. Otherwise won’t attract followers. But how can theories and leadership models are applied to a real situation evolving a real organization and how useful can that really become?

Company’s Introduction:

ASDA will be used as a practical example of an organization:

After War World I the milk prices were falling down rapidly, farmers had to protect themselves in response to that a farmer from Yorkshire (in association with other farmers) named J.W. Hindell created in 1920 the Hindell’s Dairy Farmers Limited to acquire or build both wholesale and retail outlets for their milk, guarantying a steady market and a floor price. That lasted about 25 years with a variety of dairy business, involving 9 companies in this process. This partnership became a public company in March 1949 (Associated Dairies and Farm Stores Limited), employing 1200 people.

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By 1965, Associated created a subsidiary [ASDA Stores Limited], extremely profitable. A new concept was launched: new extremely large stores were open, in abandoned warehouses or mills, offering a limited selection of goods at the lowest prices. By 1978, ASDA had 60 superstores and two years later more than £1 billion sales mark. In 1984 John Hardman became managing director and decided that changes (including new look for stores, new lightning…) were needed or ASDA would fall behind , the “ASDA Brand” new line of foods would emerge to increase sales including other measures , under Hardman ´s direction the company sold not only but also the Associated Fresh Foods, concentrating only in superstores and expanded line of food stores, only expectation was Allied, a chain of carpet and drapery stores ,the Group was not able to sell it. ASDA acquired 62 of rival Gateway’s superstores, the company kept on full expansion.

In 1991 after Hardman resigning Archie Norman took and the next several years were dedicated to restructuring, renewing the brand image, lowering prices and product mix and in 1995 the profits were increasing again as compared to 1992. Then in 1999 the U.S. retail giant Wal-Mart Stores Inc. offered to takeover ASDA and in 2000, after the acquisition, launched Smart Price, a new brand based on Wal-Mart.

ASDA with 259 stores is now the second largest retailer in the UK, having a very big competitive advantage: price competition in a variety of shops, which helps customers to relate with the company. Also under Wal-Mart’s wings ASDA has been adding new departments like: pharmacies, opticians, jewellery, besides selling music, videos, and books.

Examine the impact of different leadership attributes and skills on work groups

There is no universal academic concept of Leadership there are as many definitions as the number of scholars studying it (combination of certain characteristics, skills, process …). It can be described as the result of a process by which an individual influences others in order to accomplish a common goal.

Leadership should not be confused with power or authority for it is a wider concept, demanding much personal effort from the leader in order to fully mobilize the people in achieving that common goal mostly supporting all strategy on top of the company’s values and culture. Many theories try and keep trying to identify the skills that a good leader should have, some became popular and important tools for management and leadership until now.

John Adair’s Action-Centred Leadership Model supported leadership has 3 main responsibilities: task, team/group and individual, keeping all these 3 responsibilities in the right balance the success would be guaranteed: better quality, sustains morale, develops the team and also highlights the intervention of the leader as a successful one. The leader, like in Tom Peters theory also, should be inspiring to others, showing enthusiasm, commitment and ability to pass all that to the people. Although he argued that the situation itself would appoint the leader and determinate what kind of leadership, nevertheless some leaders need innate characteristics like military ones (need courage), other human qualities like integrity, wholeness and moral sense were considered essential to any leader.

Elizabeth Moss Kanter focused on empowerment [key to human motivation] management should be available for those usually put aside, like women, clerical workers… decentralizing authority with the creation of other small and autonomous groups.

Early researches on leadership are more behavioural searching to classify personal features that set efficient leaders apart from other people. Works like Daniel Goleman’s and also Higgs and Dulewicz work (among others) about emotional intelligence theory became very popular. EQ has become a very important factor to select and recruit, for management development, job profiling, HR planning, customer relations… even to reduce stress by decreasing conflict, improving relationships and communication, stability…).

Daniel Goleman´s EQ theory (EQ – Emotional Quotient) is a revolutionary concept by defending that success does not depends only of the IQ (Intelligence Quotient), but also behaviour and character are twice important. His studies lead him to develop a model containing several personal (e.g. capability of understand oneself, self-control, self motivation…) and social competences (Organisational awareness, Change catalyst, Building bonds…), necessary for a good leadership. This is a tremendously important contribute most of all to develop people and organizations allowing to understand people’s behaviours, attitudes, potential, styles in management and interpersonal skills.

Higgs and Dulewicz divided Emotional Inteligence in 3 major areas:

Drivers: motivation and decisiveness, skills that give people the necessary energy for achieving goals.

Constrainers: conscientiousness, integrity and emotional resilience (control and smooth the excess of drivers)

Enablers: sensitivity, influence and self-awareness, skills that help performance and the success of individuals

In result a successful leadership would be the sum of EQ, IQ and also Managerial Competence (MQ). In their theory the EQ of an individual (interpersonal sensitivity, self-awareness …) is also result of cognitive ability and certain management competences; EQ is also affected by drivers and constrainers.

Impact of leadership attributes and skills:

Psychologists Litwin and Stringer at Harvard University developed research among top companies all over the world, in order to investigate the connection between leadership behaviour, team climate and performance ,they identified 6 types of effective leadership styles creating a (ILS) – the inventory of leadership.

Coercive: gaining immediate compliance from employees

Authoritative: long term vision and leadership

Affiliative: generates trust and harmony

Democratic: allows group consensus and creating new ideas

Pacesetting: leading by example and finalization of tasks to high standards

Coaching: the professional evolution of employees.

The ILS helps to understand the leadership from the side of those who are led, it provides the leader the choices for leadership behaviour focusing on the individuals and how their behaviour affects team ´s results. Also, these 6 leadership styles would produce a positive and stable climate inside the organization improving motivation and performance. “Climate” was measured using some criteria to measure employee’s perception on how they were treated (like: amount of responsibility given; the clarity of goals and objectives; team spirit …).

They also concluded that organizational climates would vary according to the leadership styles, proving that the leader’s personal qualities and actions have definitely a major impact on others.

Explain how different theories, models or principles of leadership can be used to gain insights into leadership requirements for a given organisational context

Mostly Re-developing of envision is not very much inaugurating, an entirely new envision for organisation as it is coming back the organisation that is failed to keep possession of its way to their main agenda. “The new CEO Archie Norman took into command as CEO of ASDA Supermarket chain in the UK in 1991”. That time ASDA was going diminishing, descending to a poor and poor position as compare to their competitors e.g. Tesco, Sainsbury’s and Safeway. Basically ASDA was losing its way as it tried to race with Sainsbury’s and Tesco by going upmarket, ASDA was at that time using a major designer to remodel their stores, Increasing their Product range, Introducing own-label products and appointing new management to give a big support to their stores. So ASDA was doing lots of new ideas due to ASDA’s costs Rose. Because of costs rising ASDA trying prices up and do to this ASDA was going away from their core customers. About three-quarters of ASDA’s stores in that areas where the average income of people was below as average standard income. People were going on the cheapest prices to purchase their food. ASDA had also introduced new range of non food retailing products like furniture and carpets. So ASDA had led to a £1 billion debt burden. Archie Norman’s challenge was to take ASDA of their First Position, which he termed the “Virtuous Circle” revaluating the customary price with different of 5 to 7% below of their competitors and helpful and friendly service. That was definitely difficult by financial point of view but with the good effort of”ASDA Way of Working” it became possible.

With the effort of Norman the new approach was formed to transform that became an all-powerful and no races system to one where employees enjoyed work and regularly providing customer service “with a personality derived from the heart of the company” The struggle of Norman started daily “huddles” (like meeting) with managers and colleagues instead of weekly huddles, Introduced Sharing option for all employees of ASDA with same terms from top to bottom, with All efforts of ASDA Colleagues ASDA brought biggest increase in sales. Everyone had right to give suggestion directly to Archie Norman, So he got 14,000 suggestion just in first 18 months. So the profits margin within 5 years in 1991 £168.3 million to £304 million in 1996 when Archie Norman took command of ASDA as CEO role to Allan Leighton

Evaluate the usefulness of the theories, models or principles of Leadership

The World is entering in 21st Century, How many Development programs are try to focusing with usefulness of their leadership training. As resources are becoming more limited but the organisations are also trying to more and more accountable for meeting their goals. Taking Accountability and responsibility for improving youth leadership life skills today, Confident the assure for impressive leadership tomorrow.

Define the leadership skills needed for a specific situation within an organization

“Leadership and learning are indispensable to each other.” John F. Kennedy

The concept of Leadership in ASDA is slightly different while based in the servant leadership model, the leader is first a servant, and the mission of the leader is to serve others. Basically Servant leaders should help followers to develop their own values that support the organization in its mission (examples of this kind of leadership: Mahatma Gandhi, Mother Theresa, Nelson Mandela and the Dalai Lama.

Training a leader is essential to any business success, mainly for small and medium sized companies, the leadership development as well as the people training has become a very important process, especially for companies who look to reduce costs and increase their revenues, and over the time companies who develop their human assets (leaders and people tend to have better results than those who don’t.

Propose methods to develop leadership skills to meet the specific requirements of a part of an organization

A leader’s skills can be “sculptured” and polished using different kind of methods like training courses, coaching, mentoring, by renewing the own methodology in leadership development programmes, making partnerships with well-known academics ,formal management programs, international study tours , experimental workshops, action learning projects… For example the CEO of U.K. grocery chain ASDA is responsible for profound structural changes like freezing wages, but also promoting transparency and egalitarianism in the organization, making ASDA “a great place for everyone to work.” Trust and openness increased as well as shareholder value in consequence. Such kind of leader is more participative, at same time capable of: Planning, effectiveness, Financial and commercial understanding, Innovation, vision, creativity, taking initiative, problem-solving and decision-making…

The Belbin frame-work team roles model makes it possible for organisations to understand the weaknesses and strengths of individuals and creating more balanced teams to accomplish tasks and roles looking for the best performance of the team. This model could be quite useful when talking about a major company like ASDA with so many and such huge stores to manage, each one divided into several departments. A second benefit of this model applying to ASDA ´s example is that it allows to point out the existence of Incompatibility inside a team, avoiding the mix of the wrong individuals is one of the key reasons why teams fail. An ineffective team may at times be nothing more than just a consequence of the wrong combination of people.

Critically evaluate the use of a full range of methods of leadership development within the specified context

There is a large variety of leader development methods, but there are 5 major ones (also adaptable to ASDA):

Developmental relationships – mentors and role models and also those who are designed to stimulate and support learning like coachers. Managers are expected to contribute to the development of their employees by teaching, coaching, giving feedback. Nowadays the online social networking sites allow the dissemination of information at an epidemical speed;

Developmental assignments – giving leaders the right challenge so they can develop their needs and goals (promotion, working in a multicountry project team; working in a joint venture) also very useful to develop cultural awareness and adaptability in a global era;

Feedback Processes -ongoing honest feedback, there processes may include 360- degree feedback for all managers with direct reports, in the end of a project to obtain feedback from their team…

Formal programs – mainly off-the-job joining individuals to share learning and development experiences;

Self-development activities (reading books, articles, using internet, all-staff meetings…)

The pursuit to understand leadership concept continues daily, within rapidly and ever changing century. Leaders are expected to focus their attention on a more ethical leadership and on how emotions form and sustain relationships, what kind of thinking will be used? How can a leader coordinate several people, many dispersed geographically?

Conclusion:

Leadership is common and necessary in all aspects of society and as a concept is not fully understood, daily challenged by constant demands of modern society, however there is no common definition of leadership no organization can stand without the leader fully understanding its values and culture, in order to strongly motivate and inspire the constituents that participate of the organization.

Understanding the relationship between leader and the people is the key for any organization’s success, not so much in a power or authority perspective, but looking also for more human characteristics and qualities. Being a leader also implies responsibilities and it’s also up to the public to support the practice of “good” leadership so it is even more important to understand the possibilities and weakness of leaders that is the true potential of theories and models of leadership.