Leadership Style Is Crucial for Successful Organizational Performance - Essay Example

Leadership style is crucial for successful organizational performance Contents Contents 2 Introduction 3 Discussion 4 Relationship of leadership style and organizational performance 4 Conclusion 16 References 18 Introduction Leadership is defined as a social influence process in which a person supports other people so as to accomplish a common goal or task. Leadership is always defined in two different contexts; there is one definition that states that a leader is a person who is followed by other people or even it ca defined as a person who guides and shows direction to other people. Whereas in some cases it is defined as a unique process through which a group of people is well organized so as to accomplish a common task. Leadership forms the basis on which the success and failure of an organization. The organizational environment depends on the traits and styles that are adopted by a leader. It depends on the efficiency of the leader that to what extent they can set effective strategies for its team members. The leaders should possess the necessary skills to resolve issues of its team members, guide the people towards the right direction, and develop plans for the future. The performance of an organization depends on the adoption of the appropriate leadership style by the leaders. The style depends on the organizational culture and even on the workforce. The selection of the style could be done through proper analysis of the situation whether it’s internal or external. A proper leadership style can enhance the people of the organization to perform their tasks more effectively on the other hand a wrong leadership style can bring down the motivation level of the workers and in turn even lower down their performance level. The organizational performance depends on the efficiency level of the workers and even on how well the strategic directions are adopted by the leaders. Thus the performance level can be affected if the leaders are not appropriate for performing the various functions in the organization. A leadership style can be defined as a style adopted by the leaders so as to implement plans, provide direction and even motivate people. The leadership style is resulted through experience of the leaders, philosophy and personality. The leadership style should be adopted in such a way that is effective in terms of achieving the common objectives of the group and even strike balance with the interests of the individual group members. The performance of a leader can initiate success for the leader itself, performance of the group or the organization as a whole and can even facilitate the emergence of the leader. Discussion Relationship of leadership style and organizational performance Leaders are the pillars of an organization on which the future growth and success of an organization rest. Leaders and managers are two different aspects. Leaders are known for its effectiveness as they are the ones who do the right things always whereas managers are known for their efficiency as they always do things rightly. Leaders innovate different ways to reach the common goal but the managers always work on the standards that is set by the organization. Leadership is an essential concept in any type of organizations (Aswathappa, 2012, pp. 76-77). The leaders are the ones who set vision, and then effectively communicate the vision to those individuals who would work together towards the common goal, and even would take effective participation towards resolving any conflicts that occur between these individuals. Leadership has a significant impact on the performance of an organization (Bamberger and Meshoulam, 2000, pp. 90-91). There exist three types of leadership styles that are adopted by most of the organizations; they are, authoritarian, laissez-faire, and democratic. The impact of each type of leadership style is different in different organizations. The authoritarian leadership style is more of commanding in nature and sets very clear strategic directions and plans for the organizational employees. The democratic leadership style is more of working together with the team by taking feedback on certain issues and improvement from the employees and the managers so as to facilitate further performance improvement of the organization (Bonnici, 2011, pp. 34-35). The leadership style of Laissez faire is more of hands off approach in which the employees and managers perform tasks according to their schedules and own preference. This leadership style leads to poor work practices and low motivational level. The organizational performance to be successful encompasses proper behaviour from the employees and the managers (Boxall and Purcell, 2003, pp. 54-55). The concept of leadership process is more of evolutionary aspect where the companies which implement such a concept in the system can transform a mere worker who performs tasks to one of the most valuable member of the team. The appropriate leadership style can change the mentality of the employees by enhancing more ownership qualities in them. It is the responsibility of the leader to make its employees feel the direct owner style relationship as this would encourage the employees to change their attitude and even improve their productivity level (Bryman, 2013, pp. 77-78). In case of bigger organizations there is often a problem of many individuals involved in taking decisions however the leadership concept helps to build a singular focus in the organization. The leadership styles depend on the skill set of the employees as well as challenges faced by the organization. Further studies has divided the leadership style into various parts such as directive, visionary, affiliative, participative, pacesetting, and coaching (Daenzer, 2009, pp. 112-113). The directive leadership style reflects an immediate compliance and a tight control over its employees. The visionary leadership style explains the ‘why’ factor in the system and provides a long term vision or direction to its employees. The affiliative leadership style follows the trait in which the leaders are friendlier with its team members and the main aim of the leader is to create harmony (Burns, 2012, pp. 93-94). The participative leadership style is that form of style that focuses on building commitment of the employees towards the organizational goal and even encourages the employees towards participation. The pacesetting leadership style is an approach through which the leaders plans on effectively executing tasks and sets high standards for accomplishing those tasks. The leaders following this style always lead its followers by example (Gottlieb, 2003, pp. 173-174). The coaching leadership style focuses on building the required skills amongst the employees so that they can perform well or it can be stated as that this style focuses on professional development of the employees for long run. Amongst all the leadership styles it is very difficult to chose the most ideal on for a system. Often leaders use an array of styles so as to perform successfully. The leadership styles can be well explained through the situational and contingency leadership theory. The contingency leadership theory states that in order to be an effective leader it is very essential that the leadership style should be so adopted that it suits the nature of the work being done in the organization and even matches with the individual attributes of the team members (Halverson, 2008, pp. 103-104). There are three sets of theory in the contingency model that explains which the concept of leadership and its impact on the organization, they are, Path goal theory, situational leadership theory, and Fiedler’s contingency theory. The Path Goal theory states that the organizational performance is greatly influenced by the leaders. The leaders are the person who initiates the satisfaction level of its team members and even develop plans in a way that has a direct impact on the performance of the organization (Iqbal, T. 2011, pp. 62-63). The theory states the procedures following which the leaders can increase the job outcome of their subordinates. That is by identifying the goals and then setting paths in order to reach those goals, removing all the obstacles that come in the way of reaching those goals, and even adopting measures to enhance the level of job satisfaction amongst the subordinates. The theory even states that the leaders should adopt that style that is aligned with the characteristics of the subordinates and the tasks (Kellerman, 2013, pp. 115-116). According to this theory there are four types of leaders, boring or supportive, unstructured or directive, achievement oriented, and complex or participative. The supportive leader can increase the performance level of the employees and in turn the organizational performance in various ways such as by reducing the boredom level and increasing more of anxiety and confidence level amongst the employees, and then increasing simultaneously the effort performance and value of work. This entire process helps in increasing the total effort of the employees and when their productivity increases it even enhances the organizational performance. This is explained in the diagram below- (Source: Lussier and Achua, 2009, p. 96) The directive leadership style increases the overall effort of the subordinates through various ways such as focusing more on reward contingencies and incentives and reducing any form of role ambiguity by the leader. This initiative is further enhanced by the leaders by setting high expectation on the task performance, and even increasing the expectation of performance reward system and that for success of the tasks being performed. The entire procedure if followed by the directive leaders effectively then it would eventually increase the performance level of the employees as well as the organization (Kerr & Tindale, 2004, pp. 623-55). The relationship of the directive leaders with that of the effort of the subordinates can be well explained through the diagram given below- (Source: Lussier, R. 2012, p.45) The different forms of leadership styles has different method through which it can increase the effort of the subordinates and even increase the performance level of the organization. The behaviour of the leader should be the most appropriate so as to have the most productive system. The Tannenbaum-Schmidt continuum explains well the behaviour of the leadership that varies through the continuum and comprises of all the styles such as from the extreme of autocratic style to participation style and then taking effective participation in the decision making process. This leadership model comprises of three most important forces such as situational force, forces in the leader and as well as forces in the follower (Liverore, 2010, pp. 121-122). As per this theory the leadership styles are highly variable and so the continuum directly links the autocratic style that exercises tight control to the delegate authority that encourages the subordinates for decision making and then extends the scale to the other two. The leaders move across the continuum as there are changes in the external factors and some alterations in situations. The continuum for the leadership behaviour is stated below- (Source: Mehrotra, 2005, p. 85) The continuum clearly states the areas that involve the imposing of authority by the leaders and even highlights the areas that involve freedom for the employees. Often the leaders adopt the authoritative leadership style when the situation is worse so as to make the common objectives be accomplished. When the situation is complex and beyond the knowledge of the leaders it is then that the leaders consults with its team members or even let the group decide on their own. If the leader is only profit oriented then the entire planning and execution process is left upon the subordinates who perform according to their preference (Leopold, Harris and Watson, 2005, pp. 150-151). As per the continuum stated in the model it is often assumed that the ideal position is in middle of the two extremes but the decision making process that is undertaken by a leader varies throughout the scale. Another theory that states the appropriate leadership style that can be adopted is the situational leadership theory. This theory takes into account the maturity level and the readiness of the subordinates to perform a particular task, and the support and direction that is given by the leader (Moon, 2013, pp. 166-167). This theory even facilitates the leaders to place less or more emphasis on the tasks, and the emphasis on its relationships with the subordinates so that the job undertaken can be completed successfully. The situational leadership model of Hersey Blanchard can be well explained through the diagram given below – (Source: Kano, 2013, p. 132) The theory states that there exist four important leadership styles. The first style is denoted by S1 in which the leader directs its subordinates on what tasks to perform and how to perform it, and it is also known as telling or directing. The second leadership style is S2 that denotes that the leaders provide its followers with direction as well as information but there is more flow of communication between the two, or rather the leader gets into selling its message so that more people can be influenced. This style is also known as selling or coaching. The third style is denoted by S3 which indicates that leaders are more concerned on building relationships rather than giving directions to the employees. This style encompasses more of sharing responsibilities of decision making with the team and the leader works in coordination with the team. This style is also known as supporting or participative style (Muna, 2011, pp. 175-176). The fourth style of the theory is denoted by S4 and it states that the maximum responsibility is passed by the leaders on their subordinates. The decision is taken by the group and the leaders are more engaged in monitoring the progress. The style to be adopted greatly depends on the maturity level of the group and individual that is being guided by the leader. The theory breaks the maturity levels in four distinct parts. The first level is M1 and the individuals belonging to this level lack the skills, knowledge and confidence level to perform tasks on their own and requires constant guidance and direction so as to achieve the goal (Newall & Lagnado, 2007, pp. 133-134). The second level is M2 in which the individuals possess the willingness to perform the tasks by own but do not possess the required skills to accomplish the tasks. The third maturity level as per the theory is M3 in which the individuals possess the skill set and willingness to perform a task but do not have the confidence level to complete the task successfully. The highest maturity level is M4 in which the individuals can perform the tasks on their own as they have higher confidence level, willingness and the required skills. These maturity levels are different by nature so it is very much essential that the level should be analyzed before selection of the leadership style (Northouse, 2012, pp. 165-166). The chart below shows the appropriate leaderships style for a particular maturity level – (Source: Levi, 2010, p. 170) The proper leadership style adopted by the leaders of the organizations after analysis of the maturity levels of the employees can facilitate the performance level of the organization. This is simply because a more effective leadership style can increase the effort of the team members in order to accomplish a common goal and if the effort increases then the overall productivity of the employee base would show an increase which would facilitate the performance level of an organization. These theories state that the organizational performance is highly dependent on the selection of the most beneficial leadership style (Schyns and Meindl, 2005, pp. 117-118). The appropriate selection of the leadership style depends on various factors internal to an organization as highlighted by Situational leadership style and Path Goal theory. If the leaders do not adopt the appropriate style then it can even have a negative impact on the performance level of the organization (Park, 2000, pp. 873-887). The leaders who become highly obsessed with the intention of achieving goals or who tend to be very dominant may result into overlooking some of the vital elements in the organization. The leaders who tends to be very much critical in terms of achieving goals or objectives or those who are very much dominant may not be helped or supported by the employees or the managers. The dominant leaders not only have an adverse affect on the team members but even disrupt business relationships. The companies tend to avoid those leaders who are dominant by nature as they tend to be focused only towards financial benefits. The performance level can be increased by the leader when it maintains a good relationship with its team members this is well explained in the Fiedler’s Contingency Theory. This theory states that the situations moderate the traits of the subordinates and the effectiveness of the leaders (Werner and DeSimone, 2011, pp. 243-244). The entire theory is based on the factor of LPC which stands for least preferred co-worker. When the LPC factor is low it is more of directive leadership style and when the LPC factor is high it would denote a considerate style. The performance of the group depends directly on the LPC factor of the leader which even encompasses the relations that the leader develops with its members, the structure of the task to be performed by the team, and the authority of the leader (Schulz-Hardt, Jochims & Frey, 2002, pp. 563-586). The theory is briefly described in the diagram below- (Source: Wilton, 2010, p. 166) The performance is initiated by maintaining good relationships with the team members and this kind of behaviour is termed as relationship oriented leadership behaviour as explained in the behavioural theory. The relationship oriented behaviour focuses towards the social needs and benefits of the employees and the sensitivity that exists in the organization. The various approaches and theories clearly denote that leadership has a direct impact on the effectiveness and on the productivity of the organization (Snell and Bohlander, 2012, pp. 45-52). In every organization the leaders are looked upon as role models and even the employees evaluate them to analyze whether the actions of the leaders are aligned to the values and philosophy of the organization. The effectiveness of the role of the leaders, the impact of the leaders on other team members, and the influence of the leadership role in the organizational culture plays a very important role in organizational effectiveness and also helps in driving the performance level of the organization (Beardwell and Claydon, 2010, pp. 64-74). Leadership affects the organizational health. The transformational leadership is the best approach towards increasing the performance of the organization. This form of leadership encourages opinions from the employees and even develops the necessary skills that are required by the team members to perform the tasks efficiently. This leadership style encompasses the visionary attitude of the leaders and so it greatly benefits the organization. The transformational leadership style because of its flexibility enhances more of satisfaction level, initiates more organizational performance and even exhibits higher commitment. This form of leadership style is more effective then the transactional leadership style. On the contrary laissez faire has a negative or a direct impact at times on the performance level of the organization. The decision making capability is one of the most important element to increase the performance level of a company. The leaders need to possess the right traits and behaviour so that they can take effective decisions without any delay (Tzafrir, 2005, pp. 1600-1622). The productivity of an organization is directly proportional to the efficiency level of the team members. In order that the team members deliver the desirable result it is the responsibility of the leaders to provide constant support and guidance to the team members. The adoption of the appropriate behaviour and traits plays a vital role behind giving guidance so that the results are profitable for the organization. There exist varieties of leadership styles that can be adopted by a leader but the productivity of the style totally depends on the situational analysis of the employees as well as the organization (Williams, 2003, pp. 50-54). If the leadership style of authoritarian is adopted in an organization where the team members possess excess knowledge and skills then the leader it would result into more of conflicts and the motivational level of the team members would go down which would have a direct impact on the performance level of the organization (Marchington and Wilkinson, 2008, pp. 56-64). Having a strong leader in the company does help the company to have a smooth and good business process. Good leaders do help to motivate the employees in the best way so that the best can be taken out of them and the efficiency of the employees can be increased. The company needs to have a good and strong leader to have a good control over the business operations so that the revenue of the company is kept increasing at a good rate and the company can grow well expanding its business. The leader plays a big role in taking the crucial decisions for the company’s growth in the right time making sure that the company doesn’t lags behind in the increasing competition in the global market among the various other competitors present in the same industry (Jackson, Schuler and Werner, 2011, pp. 34-38). The company is known in the market even with the way the leader acts in various situations to make sure that the company continuously grows. The motivational factor of a strong leader does help a lot to increase the efficiency level of the employees which does help the company in increasing its productivity by a good percentage. The influence of the leader also affects the way in which the company’s culture is been maintained and the way the employees get involved in the overall business operations. The goal of the leader must be focused and it should be towards achieving the company’s goal and also should look to take decisions which would help the company in achieving its objectives (Wilton, 2013, pp. 78-84). Conclusion Thus looking at this essay with regards to the leadership quality affecting in the business operations it can be seen how in various ways the success of a particular organization depends on the type of leader that lead the whole company. There are many ways in which a particular person leads the company. This ways generally depends on the type of leader a particular person is which is been seen using various theories. The different types of leaders present in the companies are like behavioural, situation based, charismatic, bureaucratic and many other forms. These characteristics among the person in the way they lead generally comes from the way they the person pursue the particular situation or the way in which the person has been raised up or the way the person likes to lead. This does differ from person to person in big way as the way of thinking for every individual is completely different from individual to individual. With the situation demanding the leaders do react as per the requirement and the person who reacts in the proper way making the right decision in the right time is a good leader and companies which are under the leadership of such person do get a lot of benefit. The employees are also affected by the way the leader leads the company. The leadership style of the leader does influence the employees in huge way and this causes either positive or negative impact in the mind of the employees. This does affects in the way the company goes about with its business operations. The leaders who create a good impact and influence the employees by motivating them do help in increasing the efficiency level of the employees and thus the productivity of the company keeps increasing on a continuous basis at a constant rate. But on the other hand a wrong leadership style might affect the way employees think and as a result the efficiency of the employees reduces to a huge extent and it becomes difficult for the company to regain their employees and also have a good and smooth business operation in the long run. Thus for company it is very important to select the right leader in the right way so that the employees will find easy to cope up with the change and also the leader can adapt to the new culture. This will help the company to grow well and also increase their profit margin by good percentage. References Aswathappa, K. 2012. International HRM. New Delhi: Tata McGraw-Hill Education. Bamberger, P. and Meshoulam, I. 2000. Human Resource Management Strategy. Thousand Oaks, CA: Sage. Beardwell, J and Claydon, T. 2010. Human Resource Management: A Contemporary Approach 6th Edition. London: Prentice Hall. Bonnici, C. A. 2011. Creating a Successful Leadership Style. United Kingdom: R&L Education. Boxall, P. and Purcell, J. 2003. Strategy and Human Resource Management. Basingstoke: Plagrave. Bryman, A. 2013. Leadership and organizations. New York: Routledge. Burns, J. M. 2012. Leadership. New York : Open Road Media. Daenzer, B .E. 2009. Quantitative Correlation of Leadership Styles. USA: Proquest. Gottlieb, M.R. 2003. Managing Group Process. USA : Greenwood Publishing Group. Halverson, C.B. 2008. Effective Multicultural Teams: Theory and Practice. USA : Springer. Iqbal, T. 2011. The Impact of Leadership Styles on Organizational Effectiveness. Germany: GRIN Verlag. Jackson, S., Schuler, R. and Werner, S. 2011. Managing Human Resources. Stamford: Cengage Learning. Kano, E. 2013. Leadership Styles. UK: GRIN Verlag. Kellerman, B. 2013. Bad Leadership: What It Is, How It Happens, Why It Matters. USA : Harvard Business Press. Kerr, N. L. & Tindale, R. S. 2004. Group Performance and Decision making. Annual Review of Psychology, Vol. 55, pp. 623-55. Leopold, J., Harris, L. and Watson, T. 2005. The Strategic Managing of Human Resources. Harlow: Prentice-Hall. Levi, D. 2010. Group Dynamics for Teams. USA: SAGE. Liverore, D. A. 2010. Leading with Cultural Intelligence. New York: AMACOM Div American Mgmt Assn. Lussier, R. 2012. Leadership: Theory, Application, & Skill Development. USA: Cengage Learning. Lussier, R., and Achua, C. 2009. Leadership: Theory, Application, & Skill Development. USA: Cengage Learning. Marchington, M. and Wilkinson, A. 2008. Human resource Management at Work: people management and development. London: CIPD. Mehrotra, A. 2005. Leadership Styles of Principals. New Delhi: Mittal Publications. Moon, J. A. 2013. A Handbook of Reflective and Experiential Learning: Theory and Practice. New York: Routledge. Muna, D. F. 2011. Developing Multicultural leaders. United Kingdom: Palgrave Macmillan. Newall, B, R. & Lagnado, D. A. 2007. Straight Choices. UK: Routledge. Northouse, P.G. 2012. Leadership: Theory and Practice. USA: SAGE Publications. Park, W. 2000. A comprehensive empirical investigation of the relationships among variables of the groupthink model. Journal of Organizational Behavior. Vol.21, pp. 873-887. Schulz-Hardt, S. Jochims, M. & Frey, D. 2002. Productive conflict in group decision making. Organizational Behavior & Human Decision Processes. Vol. 88, pp. 563-586. Schyns, B., and Meindl, J.R. 2005. Implicit Leadership Theories. USA: IAP. Snell, S. and Bohlander, G. 2012. Managing Human Resources. Stamford: Cengage Learning. Tzafrir, S. 2005. The relationship between trust, HRM practices and firm performance. International Journal of Human Resource Management. Vol.16 (9), pp.1600–1622. Werner, J. and DeSimone, R. 2011. Human Resource Development. Mason: Cengage Learning Williams, J. 2003. The importance of HR practices and workplace trust in achieving superior performance: a study of public-sector organizations. International Journal of Human Resource Management. Vol.14 (1), pp. 50-54. Wilton, N. 2010. An Introduction to Human Resource Management. Great Britain: SAGE. Wilton, N. 2013. An Introduction to Human Resource Management. London: SAGE. Read More