Leadership Style of Ray Noorda - Case Study Example

Leadership style of Ray Noorda Introduction: Ray Noorda of Novell was able to elevate a small local company in Ohio into an international concern, by employing a leadership style and approach that was global in outlook and sought to span geographical boundaries. Reasons for his success were his motivational approach and the policy of “co-opetition” a phrase that was coined by Noorda to represent a fresh business strategy wherein competitors agreed to pool resources in certain areas. Dodge (1990) has stated that the reasons for the success of Novell were Noorda’s “administrative ability, marketing skills and marketing style”. The significant weakness that others see in Novell is Noorda’s inability to effectively delegate top level responsibilities, as a result of which selecting high quality managers in the upper echeleons of the company to replace Noorda was difficult. Cross cultural management: Cross cultural management has been defined as “the development of knowledge ad application about cultures in the practice of international management, where the people involved have different cultural identities.” (Mead 2005:16). Ray Noorda had a global position and attitude, as detailed by his managers and he made this international outlook very clear to his employees, therefore the leadership style that was employed by Ray Noorda in the Novell Company reflects this international strategic aspect in every sphere of applications. The team of five specialists that he employed to develop a worldwide business model in the form of a software package, were constantly aware that Noorda wanted them to develop an application that would basically be compatible with most computer systems all over the world – he was primarily concerned with the international applications of every program, thereby revealing that his cross cultural outlook and the practice of international management as opposed to a strictly regional management policy. This may be noted in the fact that Novell recognized early on that developing proprietary hardware pieces that would sit on a desktop restricted within a particular area was a trend that was on its way out. He realized that “non proprietary, clone like products for the desktop” was what was called for, because through this aspect “the world would be tied together in some way.” (Scannell, 1989). When Noorda first joined Novell, a proprietary networking product named Sharenet was available which was a box that had a 68000 based computer. Noorda used this as the basis to explore further how the box could be ported into other environments to make a server out of a PC. In this manner, Noorda was able to develop Netware, which was portable and could be used anywhere in the world. Although the product was at first proprietary to the United States, Noorda demonstrated how a portable networking application could be developed that could be initiated and used from anywhere in the world. Therefore, his focus on the development of international applications demonstrates how his leadership and motivational policy could be applied equally as effectively outside the context of the United States. According to his employees, a worldwide plan was to be in place before a person went to talk to Ray Noorda and in the field of corporate advertising for example, he sought to reach not merely magazines within the United States but also those outside the country. Thus, all the technology that Noorda sought to develop had to have an international application rather than being applicable within only one particular region in the world. Therefore, his approach was global, irrespective of the fact that he was operating out of Utah. He could have operated equally effectively in developing the networking product from any other part of the world, hence this policy could have been applied with an equal degree of effectiveness, even outside the United States, since his focus was not local but primarily global in nature. Co-opetition: According to Adler (2002) a cross cultural management style seeks to understand and improve the interaction of “co-workers, managers, clients, suppliers, alliance partners…..from countries and cultures around the world” The leadership and organizational style that was advocated by Ray Noorda sought to build strategic partnerships with distribution partners and commission agents. Porter (1990) has coined the theory of competitive advantage as being one of the salient aspects driving any business in its success, wherein a business tries to restrict the activities of its competitors in order to derive the maximum benefit in the marketplace. However, this concept has been challenged by Ray Noorda through the concept that he coins as “co-opetition” which is a blend of cooperation and competition, which was developed in the 1980s (Tourneau 2004). This method of co-opetition was used by technology companies by agreeing to remain competitors in certain areas while becoming partners in other areas and Noorda was one of the pioneers of this business strategy through the international focus he brought to his leadership style. Brandenburger and Nalebuff (1996) have used the analogy of the pie as a representation of the market to explain how the phenomenon of co-opetition works. While everyone wants bigger and bigger pieces of the pie and fights for it, co-opetition helps to make the entire pie a bigger one so that everyone can get a good share in it. Carayannis and Alexander (1999) have undertaken several case studies to examine Noorda’s theory of co-opetition in respect of Government and industry partnerships and found that this practice was not really effective within a non-profit context. The reason for this is largely because Government organizations and partnerships are not purely impelled by the profit motive, therefore the competitive element is not so fierce and the benefits to be gained from cooperation in certain areas does not result in such a significant advantage as that obtained in for-profit organizations. But as far as Noorda’s Company was concerned, the policy of international expansion and strategic leadership provided by Noorda focused upon wholly owning the subsidiary Companies, with evolution from one person operations into regional centers locate din various countries that helped to manage Novell’s operations in other countries. Noorda’s policies were easily applicable in contexts outside the USA because the facility of easy software transport made it possible to set up indirect representation in any country and then slowly expand operations to consolidate the representative center into a regional outpost that was able to serve entire areas in the international market by utilizing marketing strengths of personnel in other countries and combining it with the technical savvy of local American personnel in order to develop the software networking facilities over world markets. Noorda was the pioneer of certification programs for network engineers, which became the model for certifications for computer technicians world over. The alliances that he created between manufacturers and resellers were founded upon his co-opetition principle, as a result of which competitive strengths which could otherwise have been used to undermine the business activity of rival companies was instead utilized in a spirit of cooperation through joint use of such strengths between the American Company Novell and other companies over the world. Therefore, the strategy employed by Novell to consolidate strengths irrespective of cultural differences through the universal technical medium of software is a sterling example of cross cultural management that improves interaction among people from all over the world. Motivation and management style: According to Roger White who was a member in Novell’s customer service network, Ray Noorda’s management style tended to be one where he motivated people one-on-one and was therefore well suited to running an entrepreneurial enterprise such as Novell. He was compulsive about keeping costs low and increasing the level of sales.(www.whiteworld.com). He was not very popular with his managers because they characterized him as cruel and exacting, since his weaknesses as pointed out by White were a neglect of his management team and an inability to delegate the work appropriately, with his quickness to judge often leading him into false situations. However, Noorda enjoyed enormous popularity among lower level executives and regional employees all over the world, who were excited by his motivational skills and the opportunities he provided them. Linstead et al identify different types of control systems that exist within an organization (a) Bureaucratic control (b) Humanistic control (c) Symbolic/culture control. (Linstead, Folop and Lilley, 2004: 211). Bureaucratic control seeks to control employee activity through the system of rewards that exist within an organization. Humanistic control allots satisfying tasks to employees in order to improve their motivation and to build employee loyalty so that it leads to increased productivity. Symbiotic/culture control involves the manipulation of the culture, rituals and procedures at the firm so that the employees develop a love of the firm and its goals, to align themselves with it so that this in turn leads to increased productivity. Noorda’s leadership style was not a bureaucratic one, rather he was inclined towards achieving humanistic and symbiotic/cultural control. When Noorda first joined Novell, he brought in five experts that he had known before, from outside Novell in order to develop the technology products he visualized, since these were visionary people. Noorda was exacting and demanding in his requirements but he sought the best talent and did not hesitate to put them on the job if they demonstrated ability irrespective of their rank or seniority, therefore he was not strictly conditioned by a bureaucratic outlook. His management style was independent of a purely hierarchical control system originating from the United States, but more of a cross cultural approach which can be applied from any country in the world. Since technology was one area where the best minds and talent could be found in different parts of the world and a certain level of understanding and vision was required which did not depend to such a great extent on the cultural conditioning of the individual, Noorda was able to tap the best talent and the best technical minds. Noorda’s leadership and motivational style may therefore be seen to be in line with the motivational theories of Maslow. According to Maslow’s Hierarchy of Needs Theory (1970), which is a five tier system, an individual has two kinds of needs – the lower order needs which are satisfied externally, such as physiological and safety needs, and the higher order needs which are satisfied internally such as social needs, esteem and self actualization needs. The lower order needs may be classified as the extrinsic factors while the others are intrinsic factors. It is these intrinsic factors that contribute to job satisfaction, while the external factors are those that may contribute to dissatisfaction. Factors such as company policy, supervision and salaries play an important role in determining the kind of employees who are likely to join the organization. If, for a particular job, they are adequate, employees will be satisfied, otherwise they will not. Hence, employees are more likely to be motivated by factors such as achievement and the work itself rather than simply money. This is one of the reasons why Noorda’s style was so effective and can easily be applied outside an American context as well. He was able to understand an employee’s intrinsic need for satisfaction and a feeling of self worth on the job. However, as Dodge has pointed out, Noorda’s inability to effectively delegate senior level responsibility for many of the decisions that he took himself, was a drawback to the Company in that an effective successor could not be found. Noorda maintained a tight rein on the controls, thereby incurring dissatisfaction from his senior managers whose decision making and other powers were limited in areas over which Noorda retained a tight control. He understood that this value aspect was in some cases, more important than money. Hence, by allowing representatives in other countries to enjoy their work and challenge them to promote Novell’s products on a position of parity with local American employees, he was able to successfully motivate them and inspite their intrinsic needs for job worth and self satisfaction in the performance of the job, for example, a distributor in Asia who was the country manager was promoted to Vice President. Behavior of employees in the workplace can be an important indication of how they wish to be perceived. (Linstead, Fulop and Lilley, 2004:308-310).The reasons that motivate a person to stay in a job may not always be for financial gain, they could be propelled by emotional reasons such as job satisfaction, feeling appreciated in the job or when the job satisfies the emotional needs of the employee (Linstead, Fulop and Lilley, 2004: 280-305). Noorda was able to understand and apply such motivational techniques, thorough his understanding of such intrinsic needs. He followed a policy of moving out into various countries and soliciting individual representatives to market the software products, but once some selling strength was achieved, regional employees were pulled in to form local offices. This helped to gain confidence from the customers who felt comfortable dealing with a Company such as Novell which hired local people and thereby helped to strengthen business. Moreover, Noorda was quick to promote such representatives. For example, the country manager for Asia was quickly promoted to the position of Vice President of Novell in Asia, over American candidates, thereby enhancing the motivation of the employees and the business strength of the Company through the incorporation of regional talents and skills from local cultures into higher management levels at Novell. This is also a fine example of Noorda’s cross management skills, because he was able to successfully motivate employees in various cultures and regions to function capably and work hard to promote the growth of Novell, without too much expense being incurred by the Company. Conclusion: On the basis of the above therefore, it may be noted that Noorda’s style of leadership tended to focus on international aspects rather than being limited within the United States. The policies of local empowerment integrated within a global context, helped to form the basis for successful motivation of a wide spectrum of employees across different cultures. His focus on the development of international products and technology was a winning technique because it enhanced the market for those products worldwide. His receptivity to talent and his willingness to motivate talented employees by offering them perks and responsibilities irrespective of their seniority within the organization, helped to harnass the best talent for Novell. Therefore, his techniques could be applied equally effectively within contexts other than the United States. References: * Adler, N. 2002. “International Dimensions of organizational behavior.” Prentice Hall. * Brandenburger, A.M. and Nalebuff, A.J, 1996. “Co-opetition” New York: Doubleday. * Carayannis, Elias, G and Alexander, Jeffrey, 1999. “Winning by Co-opting in strategic Government-University-Industry R&D Partnerships: The power of complex, dynamic knowledge networks.” Journal of technology Transfer, 24, 2-3 * Dodge, John, 1990. “Ray Noorda: Market share mogul.” Computer reseller News, November 12, 394 : 138(1). * Le Tourneau, Barbara, 2004. “Co-opetition: An alternative to competition.” Journal of Healthcare Management , 49(2): 81-84 * Linstead, S, Fulop, L and Lilley, S, 2004. “Management and Organization: A critical text.” Palgrave. * Mead, R, 2005. “International management: Cross cultural dimensions” Blackwell. * Miller, Stephen, 2006. “Raymond Noorda, 82, Novell CEO and Networking Pioneer.” The New York Sun, Nov 17 [online] available at: http://www.nysun.com/article/41271?page_no=2 * Porter, M.E., 1990. “The Competitive Advantage of Nations.” New York: The Free Press * “Ray’s Management Style” [Online] Available at: http://whiteworld.com/novstory/surf-17.htm * Scannell, Tim, 1989. “Novell CEO discusses how open standards spells success.” Systems Integration, June 1989, 22(6): 33(2) Read More