Leadership, Management and Organizational Performance - Assignment Example

?Management Table of Contents Table of Contents 2 Leadership, Management and Organizational performance 7 Areas of improvement 9 Solutions for areas of improvement 10 Challenges Faced By Vodafone in Implementing the Solutions 11 References 12 Leadership and Organizational Culture Leadership is an ambiguous concept which has different meanings to different economists and the term is often used to refer to a person or sometimes an attribute of an individual. Leadership takes a variety of forms depending upon the situation in the organization. Leading a small group in an organization is a different process compared to a large group in a big organization. The concept of leadership has changed eventually with the changing organizational environment and process. Leadership is usually associated with motivation; the incentive theory suggests that the employee will increase their efficiency if they are offered incentives (Handy, 2007). However, certain theorists believed that employees are often driven by economic needs which are also known as rational assumptions (Handy, 2007). Management is a logical process which requires the emotional intelligence of the manager to handle the human resources of the organization. Leadership and Management are interrelated but cannot be used interchangeably and there are three dimensions of leadership which is needed for effective management which are planning, negotiation and rewarding. Managers are concerned with the achievement of targets; however leaders are concerned with fresh approaches of how to manage the employees of the organization through inspiration and motivation. Theories related to satisfaction of the worker are very limited; a satisfied worker may not work harder but he/ she tends to stay longer in the existing organization (Handy, 2007). As per author Kotter, management is about dealing with the complexity of the problems whereas leadership is about coping with change and bringing order and consistency in the organization (Sadler, 2003). The difference between management and leadership was first defined by theorist James McGregnor in the year 1978 (Sadler, 2003). The theory laid emphasis on the difference between transactional and transformational leadership. Transactional leadership occurs when the manager takes the initiative in offering some form of satisfaction in return for something valued (Sadler, 2003). Managers who exhibit the transactional leadership skills are usually associated with ability to attain results and solve problems through proper planning, organizing, directing and controlling and work methodically within the structure and the boundary of the organization. Organizational culture and transformational leadership are interrelated and also has a significant impact on the organizational effectiveness. Transformational leadership qualities lead to excellent performance of the employees which are beyond the expectations of the organization. As per authors Denison and Mishra, there are usually four cultural traits that are related positively with the organizational performance which are involvement, consistency, participation and normative integration (Xenikou and Simosi, 2006). Managers following transformational leadership skill promote an environment that helps in achievement of high goals. Transformational leadership is mainly concerned with the intellectual simulation, accomplishment, and individual consideration. In addition it was also proved that there are certain organizations which have certain group norms that help in promoting self actualization, participation in decision making, moral and social support, cooperation etc. The organizational culture theory as proposed by Cook and Rousseau suggests that culture is composed of the shared values of a social group acquired through socialization process and can be acquired through socialization process and exposure to variety of culture bearing elements (Xenikou and Simosi, 2006). These culture bearing element constitute of social interaction, employee behaviour and their performance. The organizational culture has a positive effect on the teamwork and performance of the employees and this led to the overall organizational effectiveness (Marinova, 2005). One of the major human cultural traits that lead to organizational effectiveness is known as “Humanistic Orientation”, it is characterized by the cooperation, participation and team work between the employees. The second cultural trait is known as “achievement orientation” that lay emphasis on the practice, values, assumptions and culture of the organization (Xenikou and Simosi, 2006). The culture performance link is also dependant on the competitive environment of the organization that can moderate the relationship between cultural traits and organizational effectiveness (Xenikou and Simosi, 2006). It was observed that the highly competitive environment often led to frequent clashes between the employees and the managers. Culture has a direct and positive effect on the performance of the employees and indicates an important role of task orientation among employees (Carr, 1996). However, transformational leadership may affect culture and performance of the employees in an indirect manner. Employees belonging to different national, ethnic, religious classes behave, measure success and value ideas and material things differently. The combined effect of humanistic orientation and achievement on organizational performance would lead to organizational effectiveness if three dimensional factors like 1) social support and positive relations at work 2) cooperation in goal accomplishment 3) participation in decision making are considered by the managers. The increasing globalization has increased the interdependencies among the countries and this has led to the need of better understanding of culture on organizational practices. Organizational leadership is critically important to the success of the organization and the cultural diversity presents a challenge to the managers and leaders of various organizations worldwide. Thus, to decrease this knowledge gap a cross cultural theory is required for the assistance of the leaders and managers of the organization. The ‘Cross Vergence’ theory recognizes the need and importance of the national culture and economic ideology (Theimann, April and Blass, n.d.). The cross vergence theory is consistent with a balanced approach to global integration and the local responsiveness. Characteristics like social, economic, culture, legal, political climate and technology influence the implementation of the foreign organizational practices. These characteristics need to be understood and obtained by the managers to achieve cross vergence (Theimann, April and Blass, n.d.). This leads to the hybridization of the management systems as the influence of the culture leads to the development of a new culture hybrid value system rather than the convergence of various value systems (Theimann, April and Blass, n.d.). Hofstede had identified four dimensions of national culture which were interdependent of each other 1) Individualism and collectivism; it focused on the small or large power distances also known as degree of centralization of authority. 2) Masculinity and femininity; it focused on strong or weak uncertainty avoidance. 3) Tolerance versus Intolerance of Uncertainty 4) Power Distance and Power Equalization (Evans, 2003). According to Hofstede the most important dimensions are individualism and power distances which are generally followed by the US organizations. The leadership theories developed traditionally in an individualistic society reflect effective leadership as an action of producing greater financial results which constitutes the outcome of a leaders behaviour rather than a particular type of a behaviour (Jogulu, 2010). These theories were developed on the manifestation of self interest like networking, mentoring and personal initiatives which prevail in the individualistic society (Jogulu, 2010). However, it was observed that leaders in a collectivist society will consider leadership effectiveness as a long term goal which will result from employee loyalty, sincere and hard work and satisfaction with the leader (Jogulu, 2010). Further, the leaders in a collectivist cultural society will prioritize the needs of the employees, family and the entire community when engaging in leadership action (Jogulu, 2010). The theory “Gods of Management” proposed by Charles Handy focuses on four distinctive cultures that exist within the organization (Hall, 2008). He symbolized these four cultures with the names of Greek gods Zeus, Apollo, Athena and Dionysus. Zeus culture was described by using a spider web to signify the club culture with the organization. The lines emanating from the centre represents the division of the work based on the functions of the employees or the products. The lines encircling the spider line in the centre are the most important lines and signify power and influence of the leaders of the organization the lines signify the relationship between the employees and the leaders. As the lines move away from the centre, the relationship of the employees with the managers becomes formal and superficial (Handy, 2007). Apollo culture signifies that the duties and responsibilities are well defined by the manager of the organization and the efficiency of the organization is determined by the achievement of the deadlines and targets met by the employees. Athena culture signifies that the leaders and managers of the organization are mostly concerned with the continuous finding of the remedies of the solutions. The managers first identify the problem and develop appropriate solutions for the problem. This type of culture is also known as “Task culture”. (Hall, 2008).In Dionysus culture the existence of the organization is to help the individuals to achieve their purpose and goals. The symbol used for this kind of culture is cluster of loosely based individual stars gathered in a circle. The employees in this organization are not dependant on each other and are not responsible for organizational change (Hall, 2008). Thus we can observe that different theorists have different views of the cultural impact on organizational effectiveness through leadership skills. The attributes of leadership qualities can have a positive impact on the performance and behaviour of the employees (Newstorm, 1997). However, it is also observed that the organizational culture is not determined by the leader but by their leadership qualities (Mullins and Linehan, 2005). Leadership effectiveness should be observed in all the departments of the organization. (Mullins and Linehan, 2005).The variations in the leadership styles are attributed to the cultural influences and employees have beliefs that culture plays an integral role in influencing the leadership behaviours. Leadership, Management and Organizational performance As observed that leadership and organizational performance are directly interrelated and there is a positive impact of leadership on the organizational performance. One of the companies that have benefitted significantly from effective leadership qualities is Vodafone. In the year 1991, Vodafone demerged from its parent company “Racal Electronics ltd” and was renamed as “Vodafone Group Plc” (Vodafone, 2013b). Vodafone is one of the few companies with a strong brand image and brand positioning in the telecom industry. Since, Vodafone has a worldwide presence the leadership qualities of the managers in different countries vary significantly. The global leadership programme implemented by Vodafone focuses on five important factors 1) communication values 2) team development 3) strategic vision 4) building organizational capability 5) commercial drive. This signifies that the company managers usually possess four types of leadership traits 1) Bureaucratic 2) Autocratic 3) Task oriented 4) Democratic 5) Transformational. Bureaucratic leadership is an approach in which the authority is delegated among various departments, employees and managers of the organization. This is a classic leadership style that is often used in organizations where change and innovation is not encouraged. This approach is followed by organizations which have non uniformed management policies. An Autocratic leader is very dominating and takes advantage of his / her position and believes that managers should be responsible for all the decision making and subordinates should be executing the decisions (Gray, 2004). Task oriented leadership is an approach where the managers and leaders believe in meeting their targets and deadlines to improve the effectiveness of the organization. In Democratic leadership the managers are given freedom for creative and independent decision making (Gray, 2004). Transformational leadership theory proposes that the managers would improve their communication skills with the employees of the organization to improve the efficiency of the company. We would now analyse how Vodafone Group Plc follows the above mentioned leadership approaches and its impact on the organizational performance. S.no Theory Implementation Impact 1 Bureaucratic This leadership approach is practiced in the marketing department of Vodafone company. They are more concerned with the attainment of targets. Clear and well defined policies enable the employees to maintain order and achieve tasks easily (Gray, 2004). 2 Autocratic Not implemented yet This leadership style helps in quick decision making and a discipline is enforced by the managers of the company (Gray, 2004). 3 Task oriented The customer service department handles the complaints of the customers effectively and believes in providing immediate solutions to its customers. A methodical approach enables the employees to offer solutions to customers quickly. 4 Democratic This leadership approach is found at subordinate staff level of the company. Recognition makes the employees feel empowered and help in attaining goals easily (Gray, 2004). 5 Transformational The managers of Vodafone are continuously inspiring the subordinates to perform better and in return are rewarded with incentives for better achievement (Vodafone, 2013a). The employees feel empowered and their creativity in decision making increases. The employees are able to give better financial and non financial inputs for decision making. Vodafone, Netherlands was one of the first companies to participate actively in the leadership programme developed by ‘Amsterdam School of Creative Leadership’ (THNK, 2012). Vodafone believes in change and innovation and also believes that creative and innovative thinking of the employee drive the organizational culture of the company (THNK, 2012). The exquisite leadership qualities possessed by the managers have enabled the company to gain competitive advantage over its competitors for example Vodafone has attained exclusivities of Nokia Lumia 920 in 11 different countries (Edmonds, 2012). Strong brand image and market positioning of the company has helped the company in achieving excellent credit rating by Standard and Poor. Apart from attaining profits and retaining its strong market position, the leaders believe that addressing to the society and environmental needs can also improve the brand image of the company. The growing wireless communication has been a cause of concern for disturbing the natural life cycle and has also posed a problem for Vodafone. In situations like this the leaders following the bureaucratic leadership approach can handle the problem effectively or managers can also adopt Transformational leadership style to address the environmental concerns intelligently and effectively. Areas of improvement Human resource is considered to be an integral part of the organization and key element to the success of the organization. The current financial crisis faced by the European countries has resulted in job and financial losses to many organizations. The current financial and economic situation has instilled job insecurity among the employees of the Vodafone and has also resulted in a decrease in the morale of the employees. Most of the competitors of Vodafone have developed plans of expansion in the developing regions like India, China, and Egypt etc however Vodafone Group is facing severe challenges in creating a strong brand image in these countries. The company had acquired a major stake in Hutchison Essar in the year 2007 and had become the third largest private mobile company in India. However it was pointed out by the Indian government that the company owed taxes worth $19.3 billion (Shea, 2012). Vodafone had also launched a service named ‘Vodafone on Net’ a mobile convergence meant for the small and medium enterprise (SME) (CISCO, 2008). The service was launched in the year 2008 and the target market was Portugal, United Kingdom, Germany and Czech Republic (CISCO, 2008). Vodafone has faced a series of challenges in launching the service for SME 1) Vodafone faced resistance from hosted and shared voices (CISCO, 2008). The service has not been successful in the European region 2) Building credibility in Germany was a huge challenge for Vodafone as the established telecom operators have already made their presence in the SME department. One of the major challenges faced by the company is that the adaption of different cultures by the company. Although the human resource policies differ from one country to another the communication gap exists between the employees and managers of different countries. Solutions for areas of improvement We can observe that like any other company Vodafone also faces its share of challenges. To remove the feeling of job insecurity and increase the morale among the employees the managers of Vodafone should adopt transformational leadership theory which can boost the morale of the employees and improve their efficiency. Managers following the Transformational leadership theory can implement various employee engagement workshops (CIPS, 2013) which would not only reduce the communication gaps between the employees and managers but also improve their morale and increase productivity of employees. The managers can also reward the employees for their excellence work or provide them with incentives. Environmental problems need to be addressed effectively and demands immediate attention from the managers of the company. The environmental problems can be handled by the managers of the company effectively if they adopt the bureaucratic approach. The decisions related to environment will be made by the top management of the company and will be executed by the subordinate staff. To expand further into the developing economies like China, India and Egypt, the management of the company need to adopt a charismatic leadership approach and develop plans of providing mobile services in these regions by merging with the established mobile operators of the region. Managers adopting the charismatic leadership approach should try developing unique strategies which would help them to create a strong brand image in these countries. Since, Portugal, United Kingdom, Germany and Czech Republic are the target market of Vodafone for its SME services and the established mobile operators in these markets are generating huge amount of revenue, Vodafone need to revamp its marketing strategies for the SME department and expand its offerings beyond its core mobile offerings in data and fixed services, applications and services. Expansion would help Vodafone to improve their customer retention capacity. Challenges Faced By Vodafone in Implementing the Solutions Vodafone will face certain challenges in implementing the solutions as there might be certain problems in resource utilization or executing the strategies. Firstly, the problems may arouse in following a particular leadership approach because Vodafone has always followed the existing leadership approaches and has never given due consideration in promoting or developing new dimensions of leadership approaches. Different situations require different leadership approaches and different non leadership approaches. Effective leadership qualities may yield positive and fruitful results but not all managers may possess the leadership qualities. There would be wastage of time and money in inculcating leadership qualities in the managers which may cause losses to the organization on the whole. 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