Effective Leadership and Organizational Success - Article Example

Topic: Organisational success as well as survival, particularly in the current economic climate ultimately depends on effective leaders. But leaders are born. It is not possible to train a person to become an effective leader. Introduction The underlining goal of organizations in every market and every industry around the globe is to achieve successful performance and maintain a competitive position in the rivalry scheme (Conelly et al., 2000; Gergen, 2001; Palestini, 2004). This fundamental premise can be examined from a number of perspectives including corporate philosophy, organizational culture and structure, firm’s core capabilities and competencies and overall organizational orientation towards effectively and strategically managing human resources in an attempt to increase competitiveness (Adair and Reed, 2003). Chen and Silverstone (2005) claim that in reality all perspectives and assumptions relate to the organizational effectiveness which has further implications and underpinnings on the leadership framework. The current economic climate, which has eventually created an insecure, uncertain and highly competitive market for virtually all firms and companies, has urged organizations to place emphasis on the human resources and on the effective management of people in order to overcome barriers and obstacles posed by the external influences. Leadership appears to be one of the most important issues that are leveraged by organizations in their effort to sustain organizational culture oriented towards goal achievement and performance Hannah et al., (2009) characteristically point out that “stories about leaders often detail how they successfully led their organizations to overcome great challenges or peril” (p. 897). Effective leadership in organizations has been conceptualized as the strategic influence of leaders over the employees’ motivation, commitment and engagement; which are all critical in times where economic conditions tend to worsen the organizational climate. However, effective leadership has also been a controversial subject with regards to its internal or external orientation. Much debate over the notion that effective leaders are born or made has contributed to the development of theories and propositions regarding the degree in which effective leadership is inherent or developed. This paper addresses two important constructs in the overall theory of leadership; the first one involves the contribution of effective leaders to organizational success and especially during economic crisis while the second one relates to the critical evaluation of the argument that leaders are born and thus cannot be developed. Effective Leadership and Organizational Success The relationship between effective leadership and organizational success has been reviewed and analyzed by many scholars, academics and practitioners within the framework of establishing a cause and effect correlation that underpins the significant contribution of leaders to driving the business forward (Goleman, 2004; Hannah et al., 2009; Sarros et al., 2006). The majority of studies dealing with the subject of leadership are based on the premise that the human input or the people that make up an entire organization are central and core to the corporate performance. According to Chen and Silverstone (2005) the strategic management of human resources eventually contributes to the maximization of prospects towards achieving growth in the business level. Within the general context of human resource management and organizational behaviour, Goleman (2000) identifies that leadership assumes the predominant role in people’s management due to the fact that it accounts for the establishment of all those behaviours, attitudes and efforts of organizational members that are actually important for improving organizational performance. The critical role of leadership in organizational success has been well developed and acknowledged by the vast majority of literature focusing on the subject. Palestini (2004) explains that effective leadership provides the fundamental grounds for firms and companies to strengthen their competencies and achieve excellence in any given point. Hannah et al. (2009) draw upon a number of assumptions pertaining to the effective leadership and gradually conclude that turbulent environments or extreme contexts (including economic crisis) have reportedly been managed by and from effective leaders. However, prior to analyzing how firms in greatly challenging environments – where competition is up-levelled and the economic conditions are worsened by the current climate – can be enhanced by leadership, it is important to understand some critical concepts. Leadership is defined in numerous books and journals as the underlining process which are undertaken by individuals in the attempt to motivate, envision, aspire and enhance followers to place effort into achieving a common goal and purpose (Adair and Reed, 2003). Goleman (2000) describes leadership as the two-way relationship between leaders and followers which eventually drives and motivates individuals or a group of people to share a common vision and be directed by a common purpose. Despite of the simplicity attached to the issue of leadership through these practical definitions, leadership in essence is much more critical. According to Connelly et al. (2000), leadership – especially in the organizational context - accounts for all interactivities between managers and employees, and aims at creating shared values, shared mission through defining, identifying and indicating particular goals and objectives that need to be achieved. Leadership is the ‘glue’ that holds together an entire organization; this assumption is drawn from organizational culture studies and pertains predominantly to the notion that the culture emphasizes leadership which in turn emphasizes unity, direction and alignment of people under a single purpose (Judge et al., 2009; Sarros et al., 2006). Effective leaders are said to have certain characteristics which formulate a basic framework of traits identified: ability to create vision, ability to motivate and inspire followers, ability to unify groups and teams, ability to empower and engage employees (Gergen, 2001; Goleman, 2004). In turn, under effective leadership, employees express high levels of involvement, commitment and participation through intensifying efforts towards improving their performance. Awamleh and Gardner (1999) argue that effective organizational leaders manage to bring the best out of employees by fostering self – achievement, self –development and self – actualization within the work environment and by enabling individuals to identify with the organizational goals and share the vision and mission of firms. Finally, as Chen and Silverthorne (2005) suggest effective leaders leverage communication capabilities and skills in order to create a ground basis for functioning and strategic interactivity amongst all members of an organization. This brief discussion of the leadership conceptualization, eventually credits the relationship between effective leaders and organizational performance on the basis of establishing the notion that leaders motivate employees through aspiration or through commitment and employees gradually identify with the organizational purpose and thus place efforts towards achieving goals; these goals are evidently oriented towards successful performance. With special regards to extreme contexts (as referred to by Hannah et al., 2009) such as economic crisis, leadership becomes ever more necessary and central to organizational survival. Leidl (2009) suggests that organizations in the overall current economic climate are faced with a number of challenges including the urgency for efficiency (through minimizing costs) and the necessity for improving performance (through maximizing revenues). During economic recessions, organizations are also challenged by low employees’ participation, low morale and low engagement due to the unavoidable consequences that the employees themselves face by the conditions. Organizational survival is essential in such environments. Effective leadership can increase motivation to employees by adopting a style that inspires followers to maintain their ‘vision’ and ‘values’ and eventually commit into achieving goals. Palestini (2004) refers to the four frames of situational leadership and identifies the “symbolic frame” as the most important style in effective leadership in environments where the organizational performance is underpinned by the external market forces. The symbolic frame places emphasis on the organizational culture, organizational values and vision and pertains to motivating employees to ‘never let go of their aspirations’. Hannah et al. (2009) further claim that such a leadership style during extreme organizational contexts is very critical as it achieves to unify organizational members under a single mission and scope. Economic crisis may imply poor organizational performance and probable organizational failure; it is that time that the effective leader needs to assume responsibilities and undertake the role to envision all employees towards managing to improve overall performance through giving their best and staying with the organization expecting better conditions in the future. A very common subject, during the current economic climate, is the down-sizing of firms and corporations around the world. Within this framework, employees feel insecure and uncertain about their own position in the organizations. Downsizing, reportedly, has harmful implications on the organizational climate and work environment for the organizational members. It is effective leadership and the overall culture of firms that will eventually manage to increase employees’ morale and confidence in maintaining their engagement, commitment, participation and involvement to the company and it is again the effective leadership that will manage to sustain a sense of unity amongst the organizational members. Effective Leaders: Born or Developed? There is a bulk of literature that focuses on identifying and indicating the fundamental characteristics and traits of effective and charismatic organizational leaders. Organizational studies have been conducted in various ways in an attempt to uncover and convey the most significant skills, abilities and competencies that effective leaders possess (Conelly et al., 2000; Kirkpatrick and Locke, 1991). One of the most controversial subjects in the leadership literature – acknowledged and embraced by practitioners as well – is the degree in which effective leaders are born or made (Ruvolo et al., 2004). The fundamental premise here is that there is one school of thought that supports that effective leaders have certain skills and capabilities which are distinguishing, individual and are inherent in people and a second school of thought that suggests that some basic prerequisites (with regards to skills and abilities) need to be present, nevertheless leadership is all about knowledge and learning and therefore effective leaders can be developed (Barker, 1997; Goleman, 2004; Ruvolo et al., 2004). Adair and Reed (2003) address the subject of ‘leadership from within’ and generally argue that leadership is underlined and highlighted by the ‘ability’ of people to exhibit certain behaviour that eventually motivates, envisions, empowers employees under the purpose of achieving organizational goals. The authors carefully select and stress the word “ability” in order to proclaim a characteristic of effective leaders that is not based on development. Ability is something that a person has and not something that a person makes (Ruvolo et al., 2004). Within this framework, Awamleh and Gardner (1999) draw upon the ‘charisma’ of effective leaders which eventually describes leadership as an internally driven orientation of individuals based on intrinsic factors such as self-motivation, self-development and power to influence others. The word ‘charisma’ is also selected carefully because it tends to reflect concepts that are non – tangible and non – substantial. According to the arguments of Kirkpatrick and Locke (1991) effective leadership encompasses all those characteristics and traits that constitute a leader unique; dependent on this assumption they posit that leaders are born with those characteristics and they gradually expand and widen them throughout their life. Nevertheless, the underlining notion here is that effective leaders need to posses these traits; in the absence of them effective leadership cannot exist. Barker (1997) describes the characteristics of effective leadership as the features and abilities of people that are situated in a particular organizational setting in an attempt to exhibit increased influence towards followers’ motives. The author undertakes the perspective that certain abilities eventually lead to effective leaders; these abilities are innate and are drawn from the very personality of the individual. In that extend, Barker (1997) discredits the perception that leaders can be developed or trained and asserts that “the efficacy of current leadership training is doubtful because, even if the abilities, behavior, and characteristics of successful leaders could be identified, people generally cannot assimilate them without changing their personalities and world views” (p. 348). Similarly, Awamleh and Garnder (1999) explain that effective leadership is not based on the cognitive theoretical assumption of ‘learning’ abilities and developing capabilities but mostly on the assumption that knowledge is supportive to leadership and not a determining factor. What they actually imply is that the opposite argument that pertains to leadership as a development of knowledge and learning, is non valid in the sense that these characteristics are complementary to the effective leaders; the fundamental traits that constitute leaders are not learned, they simply exist in people. These arguments presented reflect only a portion of the theoretical underpinnings of leaders being born; much literature is dedicated in providing empirical evidence for failing leadership development programs and strategies mainly on the basis of creating leaders that are non – effective (Barker, 1997). Goleman (2004) makes a significant contribution to the entire subject by addressing the difference between effective and non – effective leaders; the author suggests that leadership roles can be assumed by virtually all individuals that possess the basic skills (communication, self-achievement, self-motivation etc), nevertheless this does not imply effective leadership. This distinction further implies that there must be a differential that distinguishes leaders from effective leaders. McCauley (2001) stress that leaders may be born, but leaders may be developed as well. They propose that there is a development process for leadership which involves three fundamental constructs; the developmental experiences, the learning orientation of prospective leaders and the supportive organizational culture that fosters leadership development. The first construct relates to the knowledge and experiences that individuals maintain through their development in their professional life or career. This construct is further enhanced by the learning orientation which builds upon the existing knowledge. According to Goleman (2004) the capacity to learn is a critical pre – requisite of effective leaders which, however is not inherent; it is developed throughout the life. McCauley (2001) further adds that this orientation draws upon the motivation of leaders towards learning and embedding new knowledge into their practices. The third construct refers to the organizational environment and climate that can eventually promote and sustain leadership effectiveness and development of those traits and characteristics that underpin effective leaders. Conelly et al. (2000) in their study on leadership capabilities they conclude that there is a general framework or model that describes the development of effective leaders. First of all, effective leadership requires cognitive abilities, motivation and personality; these three pre-requisites are considered to be inputs to the skills of effective leaders which are problem solving skills, social judgment skills and knowledge; these three skills eventually contribute to the effective performance of leadership. What is meant by this proposed model is that there is rather a synthesis of both inherent and developed characteristics which lead into developed skills; therefore the essence of leadership, which is underlined by the appropriate and strategic “skills”, is developed or made. Ruvolo et al. (2004) also make an important contribution to further understanding this model. The authors distinguish skills from abilities and therefore they further credit the assumption that leadership reflects skills predominantly. As skills can be developed (McCauley, 2001), leadership can be developed too. Palestini (2004) claims that effective leadership is a concept that pertains much more to the entire organizational context, instead of pertaining to the individual leaders themselves. The author suggests that effective leaders are supported by the organizational environment, structure and culture and therefore the issue of ‘effectiveness’ is not to be attributed to the person in its majority, but to the corporate environment as well. In that sense, it can be argued that effective leaders need definitely to have some particular traits, characteristics, skills and abilities but they also need to be ‘leading’ and managing people in contexts and surroundings that enhance and stimulate such roles being assumed or undertaken. Therefore, once again it is rather substantiated that effective leadership is not only a matter of features and characteristics but it is a matter of external influence (including potentials for development and training) as well. One example crediting the argument that leaders are made and not born is the case of Thomas Watson (IBM’s General Director and President up to 1992) who was previously a line employee and through learning and development he managed to be an inspiring and influential leader that drove the business right into success (Anon, 2008). Conclusions Leadership is a well researched and reviewed subject in the overall management of organizations and human resources. This paper has addressed two significant constructs in the entire theoretical framework; the direct relationship between effective leadership and organizational successful performance and the controversy over the notion that leaders are made or born. The special attention in the fist construct was placed on the degree of contribution in an environment characterized by economic crisis. Drawing upon a number of assumptions and establishments, the paper concluded that effective leaders are extremely important in sustaining a motivating and enhancing environment in the organization by inspiring employees to remain committed and engaged. The use of a symbolic frame of leadership (symbolic style) is very essential during such economic climates, where employees are filled with insecurity and uncertainty. Effective leaders are essential in every organizational environment, but even more in working conditions which underline low morale of organizational members due to any non-desirable influences stemming from the current economic climate. With regards to the second construct of this paper, there has been an analysis of some fundamental theories that either support or discredit the notion that effective leaders are developed (made). The conclusion drawn from the entire analysis inclines towards crediting the argument that suggests a developing orientation of effective leaders. Very significant was the distinction being made by Goleman (2004) amongst leaders and effective leaders. This eventually suggests that while there are specific traits and characteristics of leaders identified by a majority of studies, effective leaders possess something more, which is gradually developed through experiences, learning orientation and accumulation of knowledge. References Adair, J. and Reed, P. (2003). Not bosses but leaders: How to lead the way to success. 3rd ed. London: Kogan Page Anon (Anonymous author) (2008). Leaders are made not born: essential steps in leadership development. Journal of Strategic Direction, 24(4), pp. 10 - 13 Awamleh, R. and Gardner, W.L. (1999). Perceptions of leader charisma and effectiveness: the effects of vision, content, delivery and organizational performance. 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Leadership and Character. Leadership and Organizational Development Journal. 27(8), pp. 682 - 699 Read More