Leadership and Strategic Management - Essay Example

? Running head: LEADERSHIP AND STRATEGIC MANAGEMENT Proceeding the 2008 global financial crisis, many organization’s top leadership suffered a backlash for their decisions which economist have criticized as major contributors to the worst financial crisis since the 1930s great depression. Some effects of this latest crisis included massive job lose, collapse of financial institutions, massive bailouts to banks by governments, dip in stock markets and significant closure of businesses. The outcome of this crisis has elicited debate for new leadership styles. The disquiet amongst the general public has generated a new approach about leadership and organizations within the financial institutions, and to a great extent business in general. There is a strong belief that the root cause of these entire crises is leadership. Organized management and actions have existed for centauries. Management has undergone, in the past several years more so in the last centaury, methodical investigation, acceptance as a formal discipline of study and attained a common body of knowledge (Robbins & Coulter, 2005). Among the early contributors to contemporary management practices are Henry Fayol and Max Weber who are credited for developing general administrative theories. Their works centered on managers’ roles and what comprised good management practice (Robbins & Coulter, 2005). Current concepts about a managers’ role have evolved from Henry Fayol’s fourteen principals of management. Max Weber’s bureaucracy model was aimed at removing inefficiencies, patronage and ambiguity that characterized most businesses. Most components of his bureaucracy model are still inherent in big organizations to date. The universal point of ideas offered by Fayol, Weber and Taylor were majored on increased efficiency. Thus the application of scientific management principles resulted in increased productivity of managers and the organizations as a whole (Jones & George, 2011). Leadership has been proven to have a direct cause and effect connection on organizations and their eventual success. Thus leaders have been tasked with shaping organizational strategies including its execution and efficiency (Northouse, 2007). Leaders therefore determine the culture, values, employee motivation and change tolerance within their institutions. With the on set of financial crisis, businesses have attracted keen analysis from shareholders and the general public. This has reinforced the concept of strategic management and a review of current leadership styles. Strategic management, popularized in the 1980s, is a term that covers business-wide strategy formulation, implementation and evaluation (Sadler, 2003). This usually is dependent on the leadership of an enterprise. The concept of strategic management has become important to the success or failure of enterprises, more so now that business environment require quick analysis, monitoring and precise interpretations of their surroundings. Though, it must be noted that not all enterprises that embrace this concept are safe from failures. One of the major reasons for failures in strategic management is poor direction from management and poor planning that strategic management is widely believed to have evolved from (Sadler, 2003). While implementing strategic management, leaders will usually be faced with the problem of change management. Change management is the planned approach to transitioning organizations from present state to a desired future state (Jones & George, 2011). Its aim is to help employees embrace and accept change in their present business environment. There are a number of beneficial reasons why an organization leadership will want to adopt change management. These include; increasing efficiency, increasing cohesiveness among employees so as to deliver objectives in a strong team, and also helps to gain a good understanding of what type of change is impending. This will usually help in smooth change transition more so touching on organizational culture. Change management will also be beneficial to employees since they will gain newer skills and knowledge (Sadler, 2003). In the diverse business environment, managers have demonstrated different types of leadership styles. Some managers are dictatorial, issuing only instructions and expecting results. On the other hand some leaders are democratic, giving room for their employees to articulate their ideas and opinions. All leadership styles are useful depending on the way managers use them (Northouse, 2007). It’s worthy to note that they also have distinct opportunities and challenges and are adaptable to different circumstances. It was widely believed by management students that leadership in businesses tended to portray the leader as a “great person”. Nevertheless, scientific studies conducted have indicated that leaders are not that remarkably bright, impressive speakers or extremely energetic (Bennis, Spreitzer & Cummings, 2001). Instead, researchers have found out that leader’s ability to achieve tasks is highly regarded than interpersonal skills. Current research has focused on two types of leadership, transactional and transformational leadership. Transactional leaders have been known to give out something in return for their following. These could include a promotion, pay hike, or favorable performance reviews. This type of leadership has given room to employees to act in their personal self interest provided the leaders achieve their goals. These leaders are skillful at making deals that motivate workers and can be beneficial to the enterprise. Its major drawback is sustainability in difficult times. On the other hand transformational leaders have been described as leaders who seek to change their followers. They encourage their followers to put self interest aside but rather desire to achieve greater ideals. Transformational leaders nature their organizational culture to mirror the values they share with their followers (Bennis, Spreitzer & Cummings, 2001). Thus they build strong institutions even when they are gone. It is touted as the best suited for change laden and fast paced environments that demand customer commitment and creative problem solving abilities. Sir Alan Sugar has been described as a transactional leader because he highly rewards performance. Sugar is an English businessman and entrepreneur. One of his strong business acumen is that he is analytical and clearly puts forward his business objectives to his team. This has made him to be effective and efficient, characteristics that other managers can borrow to run successful enterprises. He has no room for those who fail in their assignments. His accomplishment can be attributed to the fact that he only select the best and handsomely rewards their outputs to retain them. With the increasingly changing business environment, managers can borrow from Sugar to employ those with excellent talent. They should be able to retain them by way of offering competitive package. Sugar has also agitated the need for experience. He believes that experience will help a leader in difficult situations. Thus managers who have experienced hard sessions in their management of enterprises are at an advantage to wade through tough times when faced with it. Managers wishing to be successful in future need experience and knowledge gained from previous management positions (Bennis, Spreitzer & Cummings, 2001). In effect, whether small or large, the management culture of an organization will influence its success or failure (Robbins & Coulter, 2005). It is thus upon the leaders to develop good organizational culture that aim to fulfill the overall objective of the enterprise. Culture is important in the effectiveness and performance of the organization. In a nutshell, culture defines the way an organization carries out its activities. By definition, organizational culture is the shared behavior of people that is a component of an organization. It is formed by the organization’s systems, values, beliefs, vision, habits and norms (Robbins & Coulter, 2005). Good workplace culture underpins the way an enterprise operates with spoken and unspoken norms, beliefs and values shared between the manager and employees. In comparison, small sized organizations exhibit different cultural practices to large organizations. For instance, small sized organizations have less inflexibility in decision making, tend to respond promptly to threats and new opportunities, and lack bureaucracy thus making them more flexible. These make them enjoy a competitive advantage over large organizations, enabling them to be more successful in their business. The close contact between employees and management in small sized organizations enable the formation of a strong working culture, since direct leadership will guide employees to greater success. In addition, the highly centralized, informal and flatter structures of small sized organizations can aid in faster introduction of change plan than will be in big organizations (Bennis, Spreitzer & Cummings, 2001). References Bennis, W. G., Spreitzer, G. M., & Cummings, T. G. (2001). The future of leadership: today's top leadership thinkers speak to tomorrow's leaders. San Francisco: Jossey-Bass. Jones, G. R., & George, J. M. (2011). Essentials of contemporary management (4th ed.). Boston: McGraw-Hill/Irwin. Northouse, P. G. (2007). Leadership: theory and practice (4th ed.). Thousand Oaks: SAGE Publications. Robbins, S. P., & Coulter, M. K. (2005). Management (8th ed.). Upper Saddle River, NJ: Pearson Prentice Hall. Sadler, P. (2003). Strategic management (2nd ed.). Sterling, VA: Kogan Page. Read More