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On the other hand, the leader sets the orientation: he develops a strategy to achieve the changes necessary to achieve a vision of the future, often a distant future. He inspires and empowers employees and helps them cope with change (Rayner & Smith 2009).
However, by improving their leadership skills, organizations must not forget that strong leadership, coupled with a low management is not preferable, if not worse than the reverse. The real issue is to combine strong leadership with strong management, serving to balance each other.
As Peter Drucker once proclaimed, management is doing things right – improving operational performance, maximizing revenues, and reducing expenses while increasing artistic production values and audience appreciation. Leadership is doing the right things – setting organizational priorities and allocating human and fiscal resources to fullfill the organization’s vision.
There are different styles of leadership, here are the four broad categories introduced in the academic literature:
The traits approach (Stogdill 1948) based on innate and unlearned abilities (leader’s success depends on his qualities, his personality and his personal capacity)
The behavioral theories: X and Y theories (McGregor 1960), the four management systems (Likert 1960), the continuum theory of leadership styles (Tannenbaum 1958, Schmidt 1973)
The approach of the influence of power (in a participatory manner and instructed to use his power)
The situational approach: the contingency theory (Fiedler 1964), the model of the successive integration of personal goals, the situational model of Vroom and Yetton (1973) and the four different leadership styles by Hersey and Blanchard (1985)
The concept of transformational leadership was initially introduced by leadership expert James MacGregor Burns. He used the term “transforming leadership” to describe a relationship in which “leaders and followers raise one another to higher levels of motivation and morality”. Through the strength of their vision and personality, transformational leaders are able to inspire followers to change expectations, perceptions and motivations to work towards common goals. Burns (1978) distinguished between ordinary (transactional) leaders, who exchanged concrete rewards for the work and loyalty of followers, and extraordinary (transformational) leaders who engaged with followers, focused on higher fundamental needs, and raised consciousness about the significance of specific outcomes and new ways in which those outcomes might be achieved.
Later, researcher Bernard M. Bass expanded upon Burns original ideas to develop what is today referred to as Bass’ Transformational Leadership Theory. According to Bass, transformational leadership can be defined based on the impact that it has on followers. Transformational leaders acquire trust, respect and admiration from their followers. Bass declares that transformational leadership “occurs when leaders broaden and elevate the interests of their employees, when they generate awareness and acceptance of the purposes and mission of the group, and when they stir employees to look beyond their own self-interest for the good of the group.” Together, better capacity and commitment are held to lead to additional effort and greater productivity.
Richard Branson is the founder of the Virgin Group, known for record labels, cellular phones, airlines, and many other business ventures. He is responsible for a $5 billion empire consisting of over 200 different companies around the world.
Under the impulse of Branson, managers within the company use the concept of innovation to inspire the employees to contribute to the company at all levels, rather than just doing what they are told. Employees can contribute to the cutting edge products that the company creates as well as look for new ways to increase the overall efficiency of the company. The Virgin Group has been able to create a management style that encourages employees to be competitive.
Transformational leaders are said to engender trust, admiration, loyalty and respect amongst their followers (Barbuto, 2005). This form of leadership requires that leaders engage with followers as ‘whole’ people, rather than simply as an ’employee’ for example. In effect, transformational leaders emphasize the actualization of followers (Rice, 1993). Richard Branson truly feels that getting involved and listening to what people have to say are some core values. Whether it is an employee, friend, business partner or complete stranger, he knows that good ideas can come from anywhere and anytime. He has said before, “Virgin Group is an organization driven on informality and information, one that is bottom heavy rather then strangled by top level management”, giving the impression that he listens to his people well below the management level. Branson also stresses on the importance of being a regular person and making his employees feel important. He is aware that praise goes much farther than criticism and he likes to make sure that people who work with him are taken care of.
Ethics is the code of values and moral principles that guides individual or group behaviour with respect to what is right or wrong (Trevino, 1986). It refers to the desirable and appropriate values and morals according to an individual or the society at large. Ethics deal with the purity of individuals and their intentions, and serve as guidelines for analyzing “what is good or bad” in a specific scenario (Sims, 1992).
Ethical leadership is a construct that appears to be ambiguous and includes various diverse elements (Yukl, 2006). Instead of perceiving ethical leadership as preventing people from doing the wrong thing, authors propose that we need to view it as enabling people to do the right thing (Freeman & Stewart, 2006). An ethical leader is a person living up to principles of conduct that are crucial for him.
Ethical leadership can be defined as “the demonstration of normatively appropriate conduct through personal actions and interpersonal relationships, and the promotion of such conduct to followers through two-way communication, reinforcement, and decision-making” (Brown et al., 2005).
Ethical leaders are thought to be honest and trustworthy. Beyond that, ethical leaders are seen as fair and principled decision-makers who care about people and the broader society, and who behave ethically in their personal and professional lives ([Trevino et al., 2000] and [Trevino et al., 2003]).
Anita Roddick (1942 – 2007) was a British businesswoman, human rights activist and environmental campaigner, best known as the founder of The Body Shop, a cosmetics company producing and retailing beauty products that shaped ethical consumerism.
Roddick has said: “For me, campaigning and good business is also about putting forward solutions, not just opposing destructive practices or human rights abuses”. She believed that businesses have the power to do good. That is why the Mission Statement of The Body Shop opened with the overriding commitment, ‘To dedicate our business to the pursuit of social and environmental change’. The stores and products are used to help supporting human rights and environmental issues.
Anita Roddick, through The Body Shop, had many values she was willing to fight for everyday. The Body Shop was a non-conformist in the business world and it helped change the language of business, incorporating the action of social change, especially in human rights, animal welfare, the environment and community trade. Seen as a trailblazer of fair trade in the cosmetics industry, The Body Shop was the first cosmetics company to develop direct relationships with communities in return for natural ingredients and accessories.
She can be seen as a true ethical leader, fighting for what she thought to be right, and defending her ethical values by transmitting it to her business policy.
John Sauven, the executive director of Greenpeace who worked with Anita Roddick on many campaigns, said “she was an amazing inspiration to those around herâ€¦. She was so ahead of the time when it came to issues of how business could be done in different waysâ€¦ She was a true pioneer.”
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