Leadership Style of Microsoft - Essay Example

Leadership Style: Microsoft of the of the Introduction The attempt to define leadership appears to be an uphill task. Till date there is no universally accepted definition of leadership. A somewhat crude definition of leadership that has emerged over time is “the ability to persuade others to enthusiastically and diligently pursue the project’s objectives” (Havranaek, 1998: 38). The pertinent question is ‘how’ should be the art of persuasion be developed which can influence the decision of others? To answer this question the idea of leadership style emerges. Leadership style can be defined as the process by which the managers choose the path that will help them reach a specific goal by influencing their employees. It is very clear from these definitions that the role of the leader is extremely important in influencing the performance of the employees and in a broader aspect the performance of the organization (Altmae, Kulno and Ott-Sim, 2013). According to Kotter (1988) the growing competitive nature of the industries and the rising complexity of the firms are making the role of the leader more important than ever (McDermott, 2007). Over the past few years various theories of leadership have evolved: Relationship theories: this theory it concentrate on the connection developed between leaders and their subordinates. Behavioral theory: This theory believes that great leaders are not born but they are created over time. This theory emphasizes that anyone can become a great leader by either observing or teaching. Participative theory: This theory focuses on the fact that every member has something to contribute towards the organization and the chief responsibility of the leader is to make the employees feel important in the decision-making area. Management theory: This theory believes in punishing the employees who underperform and reward the ones who perform better. Situational theory: This theory promotes the idea that the leadership style must focus on the situations at hand and should be flexible enough to suit the needs of the organization. Contingency theory: This theory focus on variables that are environmentally related which determines the style of leadership that fits the situation best. Trait theory and Best man theory: Both of these theories have a similar line of understanding that great leaders are the ones who are born with the leadership qualities in them. These people have certain traits which separate them from most of the common people and drive them to become innovators and leaders. The purpose of this paper is to understand the leadership style of Microsoft leader Bill gates and the ways in which his leadership style has impacted the performance of the company and catapulted it to one of the biggest and the most successful companies of contemporary times. In doing so the objective is to understand which leadership theories has been followed by Bill Gates and the positive impact it had on the efficiency of the employees. The role of Bill Gates as a leader is rather interesting because it has been a long time Mr. Gates has removed himself from the day-to-day operations of Microsoft but his leadership which is greatly exemplified in his leadership style, shows that he had a vision and he aligned the resources of Microsoft according to that particular vision which had resulted in the exceptional success of the company. Bill Gates has been regarded as a visionary and it is strongly believed to be that leader who had revolutionized the industry of personal computers in America. According to research the leadership style of Bill Gates has been described as transformational. This leadership style is closely related to the establishment of a strong bond between the leaders and the employees by inspiring the employees and motivating them to realize the importance of task at hand. The leaders who follow transformational theories are the ones who have high standard of moral codes and ethical standards and help their employees to bring out the best in them. They strongly believe that if the employees are motivated properly they will be able to reach the peak of their potential and the entire organization will benefit from the process. The ability to influence the decision of others comes from the power that the leader enjoys on account of their specific jobs in an organization. A true leader will be the one who can influence others on the basis of the referent power that the individual enjoys. The referent power refers to the ability of the person to influence others because of the love, admiration and respect that the others have for the individual (Lunenberg, 2012). Transformational Leadership style Bass (1985) has labelled transformational leadership style as an adaptive leadership style. This style of leadership has gained prominence ever since its introduction in the academic literature (Bass, 1985). The primary focus of this theory is to understand the ways in which some leaders are better suited to influence the follower’s motivation and make them perform in better ways through which the performance of the whole institution can be elevated. The works of Shamir, House and Arthur (1993) transformational leaders who are charismatic are quite successful in transforming the self-concept of their followers (Shamir, House and Arthur, 1993). This becomes achievable because these leaders make an effort to integrate the personal and the social identification of the followers with the mission and goals of the organization. This raises the involvement on the part of the followers in the organization and this in turn raises the cohesion, commitment and the performance of the individuals as well as the organization. Guzzo et al (1993) has suggested that transformational leadership is the precursor of creating confidence or potency that is required by the groups when they are facing daunting challenges. They have described that group potency is a function of group design (interdependence of tasks), process (leadership) and context (the conditions under which followers operate). This situation can be realized when the group is entitled to do a task which involves very high degree of interdependence and the leaders of the group provide encouragement to the workers to work in a closely integrated manner. Under these conditions the collective confidence of the workers improves and this is reflected in their performance. Zaccaro et al (1995) is of the view that “leadership actions that persuade and develop subordinate competency beliefs may be as critical a determinant of collective efficacy as the group’s prior performance experiences, if not more so”. Transformational leaders are the ones who exhibit charisma and share their vision with the followers so that they can perform exceptionally (Zaccaro et al, 1995: 89). The works of Bass provides a meaningful insight about examining transformational leadership through five parameters: Idealized influence: This influence can be studied with the help of two parameters namely attributed influence and behavioural influence, the former deals with the traits that are assigned to a leader whereas the later deals with the behaviour of the leader. A charismatic leader has very high ethical and moral code of conduct which allows them to become role models for their followers. These leaders believe in statements like “I emphasize the importance of having a collective sense of mission” (Avolio and Bass, 1995: 53-58). Inspirational influence: This trait shows the capability of the leader to talk on the behalf of the followers and the way in which he acts as the cheerleader for his employees. These leaders try to instil optimism and enthusiasm among their workers and always exhibit their determination in achieving a common goal. Intellectual stimulation: Creativity is the backbone of intellectual stimulation and the workers are encouraged to approach problems in innovative ways through intellectual stimulation. The statements of intellectual stimulation are I suggest new ways of looking at how to complete assignments” (Avolio and Bass, 1995). Individual consideration: The individual development of every single employee in the group is of high priority of the leaders and this aspect propagates the two way communication between the employees. Transactional leadership style This theory of leadership was in practice much before the transformational leadership style based on charisma came into existence. This style of leadership centres on “contingent reinforcement” at its core. If the leaders in an organization followed transactional leadership then it meant that the followers are expected to agree and accept to the visions of the leader without question and adhered to the conventions and the rules. Broadly speaking there are two major dimensions to measure the transactional leadership namely the contingent reward dimension and the management by exception dimension. The former implies that the followers were rewarded and appraised for their work only if they could carry out their responsibilities assigned to them. This is a goal based leadership model which believes that once the goal of the organization can be achieved then the individuals who have helped the organization achieve those goals must be rewarded. The leader in this leadership style believed in active management by exception. The proponents of this leadership sets the standard for performance that must be actively followed and complied by the members and when the followers failed to do so they were punished for their inefficiency. The standard of level of underachievement that labelled the employees as inefficient were also clearly decided by the leaders and the followers need to rise above this mark to win benefits and perk associated with the job. In order to understand the ways in which the employees are performing and to measure the level of their achievement against the standards set by the organization, this type of leaders believes in close monitoring of the employees. Any deviances from the path set by the leaders were corrected as quickly as possible. This management by exception concept precisely captures the action of the leaders when exception arises. In this regard three groups can be identified namely the active leaders, passive leaders and the passive avoidant leader. The active leaders prevent any exceptions from happening by taking preventive actions as far as possible. The leader who takes corrective measures to rectify the situation once the problem arises is termed as the passive leaders. There is another group of leaders who take no action at all even when there occurred deviation from the set goals and they are termed as the passive avoidant or laissez faire leaders. The “exchange” between the leader and the follower is the factor from which transactional leadership derives its name. The transactional leadership though appropriate under many settings is not quite open to innovation from the followers. The leaders in this model are also termed as “poor leaders” or “efficient leaders” depending on whether they can anticipate about any future problem or not. An effective transactional leader is the one who can recognize the efforts of the employees and reward them in a proper manner. Poor transactional leaders on the other hand cannot determine the actions that should be taken before hand to improve the performance of the followers and the organization as a whole. Measurement of effectiveness Over the course of time a there has been a variety of work regarding the measurement of performance of an organization through its leadership style. Analysis that has been conducted by Lowe, Croeck and Shivasubramaniam (1996) has revealed that there is a positive relationship between transformational relationship and the performance of an organization. However, Low et al. had criticized these results by saying that the meta-analysis that was conducted by the trio collected data at the same point in time and typically from the same source. So there were high chances of common source which had skewed the intensity of performance between the transformational relationship and the performance. This was confirmed by Lowe in his study and the statistical relationship obtained by him indicated that the relation between the two parameters becomes less strong when the data was collected from different sources. The study of Wang et al. had found out that the transformational leadership had significant impacts on the personal, team and organizational front with highest results obtained in the field of team. Howell and Avolio (1993) had studied the prediction of the performance based on the leadership of an organization and had found that transformational leadership style could better predict the performance of an organization compared to transactional leadership (Bass, et al, 2003). The impact of transactional relationship that has been studied by the researchers most is through the parameter of contingent reward. Based on the study of the researchers it can be concluded that there is positive relationship between contingent reward and the performance of the organization. The study made by Wang et al had also revealed that transactional relationship style was a better approach in impacting the individual task of the follower (the job description that is provided to the employee) while the transformational leadership was more successful in dealing with the contextual performance (performance of the organization as a whole beyond the task of the individual). Research conducted to study the impact of the transactional and transformational leadership has found out that transformational relationship is more effective during the start up phase of an entrepreneurial activity and transactional relationship is more effective during the stage of maturity in an organization. Contrasting the impact of these two leadership styles it was observed that transformational leadership fluctuates more depending on the type of ownership but this fluctuation was practically absent for transactional leadership. It has been found that mangers in joint ventures tend to follow transformational leadership than state or privately owned companies. The transformational leadership was rated higher in the smaller companies compared to the medium and the large scale enterprises. Empirical studies in China have revealed that transformational leadership was more effective under cross regional entrepreneurship and transactional leadership was more suitable under non-regional business environment. Local business leaders have been following a transactional leadership model where cross cultural differences is not very important. It is very important to understand that though these two leadership styles appear to be at the two opposite ends of the spectrum but in reality transformational relationship is built on the base of transactional relationship. In short there are various research scholars arguing on the superiority of the leadership model yet there no undisputed winner emerges. At best it can be concluded that each of the leadership model has its own advantages and efficiency. Leadership style of Bill Gates Bill Gates had an interesting early life and he began computer programming at the tender age of thirteen. Then in 1975 before completing his graduation Bill Gates left Harvard and started a software company with the name of Microsoft with his childhood friend Paul Allen. Since the inception of company, Bill Gates had exhibited great leadership qualities that had ultimately resulted in the success of the company. One of the instances is the strategy of Bill Gates to retain the licensing of MS Dos that was required by IBM to run its line of computers. The huge fortune of the company could be largely attributed to this decision and is clearly a mark of great leadership skill (Lunenberg, 2012). Bill Gates could truly be identified as one of the best transformational leaders whose vision is largely responsible for the meteoric rise of his company. Right from the beginning of the company Mr. Gates has focused on the developmental needs of the followers and has considered for their wholesome development, which he strongly believed as the precursor to the organizational development. He always made his followers look at the problems in new ways which helped them to find innovative solutions to the problems faced by the organization. His approach was very flexible and instead of adhering to the existing rules of the corporate governance he has been constantly evolving the system of corporate governance to bring out the best practices. Mr. Gates has been described as a gentleman who has quintessential zeal and unbounded enthusiasm which always kept his followers motivated and propelled them to excellence. Another attribute that has been greatly influencing the success of Mr. Gates himself and his organization is that he has relentless passion about his work. There has always been a conscious effort on his part to transmit this passion among all the followers which will help them to perform better. There appears to be a slight difference between the transformational and the charismatic leadership. A large number of scholars make no difference between the two styles of leadership as charisma is one of the chief attributes of both the leadership styles. Yet there has been research which indicates that the two are not exactly the same and charisma is one of the many attributes of a transformational leader. The other attributes that make up a transformational leader includes optimism, honesty, communication skills, confidence and consideration. The basic difference between the two is that all transformational leaders are not necessarily charismatic. There are many examples of transformational leaders who have achieved great business transformation but they did not necessarily have very high charisma. Bill Gates is one such prime example who has been labelled as a transformational leader by many scholars but only a few consider him to be charismatic. The leadership style of Bill Gates can often be described as charismatic and visionary by few scholars. The word charisma has been derived from a Greek word which means “gift of grace”. Bill Gated had the amazing power to excite the followers and inspire them which always propels them to put in extra effort on the team to improve the performance (Dawson  and Andriopoulos, 2014 : 128-130). The second source of difference between a charismatic and transformational leadership is that the followers often make attributions of heroic leadership when they observe that their leaders posses certain qualities. Transformational leaders on the other hand do not earn their label from the follower attribution. They are known as transformational because they have been able to transform their organization through their capabilities and accomplishments. A majority of studies has supported the fact that Bill Gates is essentially a transformational leader. The leadership style of Bill Gates can also be considered as visionary. A visionary leader is the one who is able to create and articulate his vision, a vision which is realistic, achievable and credible that allows an organization to grow beyond its present to give it a better future (Robins et al, n.d.: 54). There are certain common factors which are essential to understand the leadership style of Bill Gates. They are: Bill Gates had a strong sense of vision. Ability to express the vision. He had great commitment towards his vision and was willing to take risks and incur high costs for the betterment of the organization. The engagement with the followers and motivating them to achieve the vision. The vision of Bill Gates was dedicated in creating a future that was better than status quo. It was Bill Gates mission to provide every family and business in America with a computer. This came at a time when the future of the software industry was not very certain. It was this vision of Bill Gates that he had been constantly working on ever since its inception. The articulation of the vision to the subordinates is equally important as this involves the ways in which the leaders express the ways in which the vision will be achieved. This allowed the people around him to follow the vision relentlessly to realize it. This also includes the ways in which the leader takes into consideration about the needs of the employees and this in turn motivates the employees to perform in a better manner. In this context it can be said that just being a visionary leader is not enough per se because if the leader is unable to communicate the ideas in his mind to the followers and then clarify their requirements to help them achieve the organizational goal. The subordinates include not only the employees of the company but also the shareholders and all the members of the organization. The fact that every great leader has to take risks in order to survive could also be seen in the actions of Bill Gates. This was evident from the speeches he had given and the articles that was published which had talked about the failure of the Omega database and the failed project about joint operating software with IBM. However, looking back at these temporary failures it can be reinforced that hadn’t Omega failed and hadn’t the joint effort with IBM ceased to exist, then Windows would have never achieved the status of the super product that he enjoys today. Bill Gates had considered the temporary failures as the biggest pillars of success and has worked on to them to constantly improve. One of his mottos supporting this vision is “Your most unhappy customers are your greatest source of learning” (Jackson, 2006: 128). Bill Gates had always paid a great deal of attention to the recruitment of the human resource who would work in the team. Not only did he spend a great deal of time in recruiting the employees but also spent considerable attention in nurturing them. These included the flexibility to learn the new knowledge whenever possible (Robins et al., . Mr Gates personally believed that an organization can only prosper only when it had the best minds working for it so it became a priority for him to recruit a group of young and talented professionals. Bill Gates had to merely articulate his ideas to the human resource managers of Microsoft and the rest was taken care by them. The key to the success of the Microsoft, the company that was founded by Gates, has been the result of the unique leadership attributes of Gates. Gates had always run Microsoft as if it is a company with a small dimension. He has intentionally kept the management of the company as simple as possible so that the workers do not find that they are working under a bureaucratic control. The employees are organized in small groups and Gates ensures that they always remain motivated so that they always perform well. Under such a working environment the employees of the company gets a workplace where they do not have to work under any form of mental stress. The class of hierarchy are completely eliminated from the minds of the employees and they are treated as equal. Gates had made arrangements which clearly indicate the style of his transformational leadership: Firstly, the offices are of equal size and not elaborate. Secondly, the higher officials are not entitled to keep secretaries. Thirdly, the working hours are flexible and reasonable. Finally, the structure of authority is simple. All these actions point to one common factor and that is employees must be treated according to their merits and not the ranks they hold. The equality of treatment and the sharing of progressive ideas (irrespective of the rank of the employee) are the core competencies that have gained momentum owing to the leadership style of the Gates. In order to keep the employees of the company motivated Gates decided that the employees must be given the share of the company success which would motivate them to work harder (Strother, 2010: 48). Gates had always allowed his subordinates to be open and frank to him and always encouraged them to enter into progressive debates with him. This is truly a quality of a transformational leader who wants to push the envelope of the employees by listening to their ideas and motivating them to do more. He openly criticized his subordinates so that they could learn from their mistakes and not repeat them the next time when they face a challenging situation. The management style can be best described as emotional and confrontational. This also meant that Gates was fully flexible from learning from his employees and was always open to adapting his knowledge. All throughout his life he has been an avid reader updating himself with every new detail in computing technology and never stopped the process of learning. His genuine curiosity for the passion has always led him to come up with newer products. Impact on Microsoft Bill Gates had a huge role in shaping the vision of Microsoft and aligning it to the principles of core competencies and the customer needs. Gates had a very effective vision that the companies must focus only what is the core of its functioning and the rest of the work should be outsourced to others. Gates believes that an organization must only concentrate on a central team of efficient employees and others should be used only when a work requires them. A strong realization that had governed the actions of Microsoft under the leadership of Gates was that the entire work process must be customer centric and the needs and expectations of the customers must be put first before everything. This is because consumers are always evolving and the growth of a company can only be sustained if it maintains a strong relationship with the customers. Microsoft has been correctly described as a learning organization which is characterized by five major features namely personal mastery, mental modes, shared vision, team learning and systems thinking (Heller, 2001: 5-8). References Altmae, S., Kulno, T. & Ott-Sim, T. (2013) ‘Thomas-Kilmanns Conflict Management Modes and their relationship to Fiedlers Leadership Styles (basing on Estonian organizations)’, Baltic Journal of Management, 8/1, pp. 45-46. Avolio, B.J. & Bass, B.M. 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