This report is a discussion on the leadership perspectives, culture and diversity, social responsibility and ethics. We will also discuss the impact of situational factors on leadership effectiveness, styles of leadership and powers of a leader.
Impact of size of the organization on leadership effectiveness
We determine the Organization’s size through the number of employees, its reach to the market and share and largeness of its operations. For leaders, size of the organization poses different challenges for them. The more compact the size of the organization, the finer the performance of the leader. Some advantages of small organization for leaders are listed below:
- Problems can be solved easily and quickly
- Greater communication among the members of the organization
- Greater participation individually by employees
- Minimal conflicts among employees
- Effective communication, interpersonal skills and effective decision making are possible in the small organizations.
However, big organizations also have some advantages that include availability of diverse skill sets to solve problems and minimal stress for followers (nayab, 2010).
The systems, policies and cultural norms which are applied to a specific business are called organizational structure. Leadership effectiveness depends on organizational structure and as well as organizational structure depends on leadership. There are two types of organizational structure, namely vertical and horizontal. Under vertical structure, organizations operate on a strict hierarchy. Leaders give direction to their subordinates and subordinates are expected to follow their directions without any question or inquiry. For example, in military organizations where commander gives orders and subordinates follow their command immediately. Under horizontal structure which is also called flat structure, organizations provide equal opportunity to their employees to give their opinions and provide feedback. Leadership is very effective under this structure as the results obtained are very efficient because employees actively participate in decision making process and put their best efforts to achieve the goal.
Every business has to go through the stages of business life cycle. It starts with the developing a business idea, reach its maturity and then move to the declining stage because new players have entered into the market. A leader or business manager has to deal with the different task at each stage of business life cycle. Reaching the goal of every stage depends on how much the work done by the manager or the leader is effective. Following are the different stages of business life cycle:-
- Development stage: -At this stage a business idea is developed. The major areas of concern for a leader or manager are ascertaining the business idea profitability, market acceptance of idea establishing business structure and accounting management. After studying these important facts, the manager will be able to supervise his subordinates to achieve the desired result.
- Startup stage: -If the business idea is a the word pursuing then the next step for the manager to make business entity legal. at this stage marketing and selling activities come into force. The major areas of concern are managing cash reserves, sales expectation, accounting management, establishment of customer base and market presence.
- Growth stage: -At this stage business is started growing and generating revenue consistently and addition of new customer. The challenges for the manager at this stage are dealing with increasing revenue and customers, effectiveness of management and competition in the market.
- Expansion stage: – At this stage the business has established its presence in the market and will experience faster growth in revenue and cash flow. Increasing market competition is a major challenge faced by the managers and promoters/owners of the company. This stage is the stage of expansion of existing business and addition of new products and services.
- Maturity stage: –After experiencing successful expansion the business has reached on top of the industry and entered into the maturity stage. After this stage business faces its decline at a diminishing rate initially and then decline at an increasing rate. The option available for the manager is to decide to move back toward the expansion stage or to decide an exit strategy (cycle, 2011).
Under Leadership, the style of a leader depends on what type of subordinates he has to operate and his personality. There are different styles of leadership out of which two are discussed below:-
- Authoritative style: – This is the most effective leadership style. These leaders are visionaries. They have a clear vision about the task which they are doing and for why. These leaders have only concern for the achievement of the goal, which means that they provide greater flexibility for the choice of means to their subordinates. Strategy formulation under this style of leadership is very effective as these leaders have a clear vision for the work they are doing and due to this they can lead their subordinates effectively and efficiently in strategy formulation.
- Pacesetting style: – Under this style of leadership, leaders set high performance standards and adhere to these standards. Their passion is to increase quality and productivity and the same they expect from others. If the subordinates fail to meet their leader’s expectations, the pacesetting leaders replace these kinds of subordinates with the new one. This style of leadership lacks flexibility as the subordinates has to follow the standards set by their leader. This style of leadership is not very much effective in strategy formulation because people feel that their leaders do not trust them as they have not given any freedom to work their own (johnson, 2011).
Powers of a Leader
A leader’s main task is to influence the people to work as he wants them to do. And this influence is called leader power. There are different types of leader power, three of which are discussed below:-
- Reward Power: A leader uses this power when he can reward his subordinates for completing a task in a prescribed manner. The reward can be of various types such as chocolates, gift vouchers, promotions and rise in pay. The reward will be effective only if it appeals to subordinates. For example, offering chocolates as a reward to the employee who expects the rise in his pay for his best performance. The leader should be careful while rewarding his subordinates because giving reward for routine activities can reduce the worth of reward in the eyes of subordinates.
- Coercive Power: This type of power is just the opposite of reward power. The leader exercises this power when the followers have not completed the task as prescribed by the leader. In such a situation, leader exercises their power by imposing penalties for not completing the task as required. Penalties can be of various types including withdrawal of privileges, job losses, and abuse verbally and lost promotion. The penalties should be imposed proportionately for those actions not completed by the subordinates. For example, it would not be proportionate to suspend an employee for not returning from lunch break at the stated time. Coercive power should be used carefully by the leader to prevent him from breaking the law.
- Referent power: – this type of power make subordinates believe that their leader possess qualities that they would like to posses. The subordinates make attempts to mimic the style of their leaders of doing work. The referent power depends on the perspective of the follower towards the personality trades of their leaders.
All the leadership power can be used alone or jointly to create maximum influence. Therefore, the leader has to think carefully about which power to put in action.
Organizational culture is the behavior of humans. It’s a part of the organization that means that people react to their actions. It includes organizational value, vision, norms, working language, system, symbol, beliefs and habits. It is also called the pattern of cooperative attitude and perceptions through which new organizational members are trained to make them familiar with organization’s culture.
The culture of an organization affects interactions among people and groups. It is a set of shared mental assumptions that guide interpretation and actions in the organization that is define appropriate behavior for various situations. At the time although a company may have their ‘’own unique culture,” in the larger organization, there is diverse and sometimes contradicting due to diverse features of the management team. This culture may also have negative and positive sides which can influence employee perceptions and identification with the organizational culture. It is also having very differing culture as well as subculture.
Basic feature of corporate culture
- A belief system shared by an organizational members
- Strong wide shared core values.
- The way we do things around here
- Collective understanding
Now we briefly discuss the two culture of organization which is as follow;
The first culture is United States culture
- The United States culture is a primary western.
- This culture includes both conservative and liberal elements, scientific, religious, competitiveness, political structure, risk taking, materialist and moral elements.
- The United States culture is flexible and highly symbolic nature that leads some researcher to categorize.
- This culture as a mythic identity; other see it as an American sectionalism.
- For example – An employee of Ford’s is enjoying the workplace with an open policy of communication than their predecessors that might affect them. The Ford’s CEO is working hard to change works habits of an employee. Also, they want managers to think more about customers more than their own career. Encouragement leadership team to admit mistakes share more information and cooperate across division.
The second culture is Indian culture
- The culture of India is the lifestyle of the people of India.
- The language, religions, dance, music, architecture, food and customs are different at different place in the country.
- This type of culture often labeled as a merger of various cultures, spreads across the Indian sub-continental and has been influenced by history that is several millennia old.
- For example; Organizational culture of Tata known as a very strong culture focusing much on ethics and moral value. They also extend social welfare activities to communicate around their industrial units. Along with this they believe in very strong employee relation.
However, there is a relationship between leadership and organizational culture. Even organizational culture can sometimes influence the leaders. Moreover, the leaders should also try to influence the culture of the organization for the betterment of the company.
Meaning of Cultural Perception: Someone’s views, ideas and attitudes about society or place are called Cultural Perception.
Meaning of Cultural Bias: Cultural Bias refers to a person’s bias towards a culture.
Different people have a different perception towards different cultures, or they may be biased towards a culture that they like or dislike. In an organization, people come from diverse cultures. Everyone has their own views, ideas, likes or dislikes for a particular situation. The leader’s main task is to coordinate the views and ideas of all the subordinates having diverse background to achieve a common goal. The tactics to handle cultural differences which a leader would use are mentioned below:-
- Avoid favoritism: A leader should take time to understand the people in his team, irrespective of their age, culture or experience, to find out their strengths, so that they can contribute at their best in achieving a common goal.
- Other people should be treated in the same way as you want others to treat you: For a successful completion of a project, all the employees should be appreciated for their work. Leaders should not damage their self-esteem.
- Open Door Policy: People from diverse cultures raise issues in different ways. The job of a leader is to understand the important areas of concern and remove them effectively. The leaders should listen and take actions to remove the problems of their subordinates.
- Effective handling of conflict and building a common workplace culture: A leaders should be skilled in handling conflicts at the workplace effectively. He should have to build a workplace culture common to everyone to avoid conflicts.
- Setting an example: A leader is an ideal for his subordinates. Whatever he does, says or acts in a situation, his subordinates will follow the same. Similarly, if a leader is biased towards a culture or discriminates an employee in his group on the basis cultural diversity, other subordinates will do the same because their leader does so.
There is a rapid increase of diverse societies and organizations in the US and globally, it is necessary to understand how the social identities of our leaders interact to influence the exercise of leadership. Social identities are likely to influence leader’s identity and influence our behavior in social and interpersonal domains. But yet, current leadership theories are biased towards the cultures and structures of the organizations of North America that are run by White, heterosexual men, Anglo. As more racial, ethnic, women and minorities join the rank of leadership, the study of leadership need to be more diverse in studying variation across race, ethnicity, gender or another dimension of diversity to understand the complexities of behaviors’ associated with effective leadership. There is a variation in socio-cultural context, and the experiences of both leaders and their members may well influence the nature of the leader member exchange. Acculturation, discrimination, racism and bicultural-ism are associated with lived experiences, and they may well shape the value’s leaders bring and their goals. Issues of power and privilege rise, and have posed access barriers and also contribute to inter-group miscommunication among leaders with diverse social identities. The examples based on gender diversity is as follows:-
In some countries, there is still prevailing the male dominating culture at the organizational level. People think that males are better than females as leaders. For example, all the United States presidents have been male. Cultures of many countries have framed so many boundations for women that create hurdles for women while they are working. And also rapidly increasing mis happenings with women stops them to work or take an active part in the organizations activities. That is why; organizations prefer to have males as leaders than females.
The influence of various factors on leadership: ethics social responsibility, stakeholders and their goals, society
Why is ethical leadership important?
Ethical leadership is having the courage to live them and knowing your core values in the various parts of your life to provide service of the common good. “In our experience, it involves leading in a manner that respects the rights and dignity of other; it is a concept that is sometimes in direct conflict with several traditional models of leadership. In the past, Increasing production/ productivity and profits is the main goal of leadership. In the 21st century, this view has started to decline because there was an additional organizational development and experts in human resources who assert that the leaders should also have the responsibility so as to ensure the standards of morals and ethical’s conduct.
Effective leadership also influences processes, and stimulates change in attitudes and value, and increase self-efficacy and empowerment of their followers as they surrogate the internalization of corporate vision.
The center of the ethical leadership recommends a framework of 4-V model of ethical leadership that aligns leader’s internals beliefs and values with his or her external behavior and the purpose of action to advancing the common good of employees, leaders, organization, and beyond. On the basis of research, this model was created. The overview of the 4-V model is as follows:-
- Values– Ethical leadership beings with an understanding of and commitment to the leader’s core values.
- Vision-Ethical leadership requires the ability to frame our action within a picture of “what ought to be”-particularly in the area of service to other.
- Voice-Ethical leaders must be able to articulate their vision to other in an authentic way that enlivens them into action.
- Virtue-Ethical leaders strive to do what is good and right. They asking about the practice virtuous behavior “how my values, vision and voice are alligned with and are supporting the common speed?”
What is the implication of having unethical leaders?
With the help of example we can easily understand the implication of unethical leaders:
Abusive supervision: the perception of the Subordinates and the extent to which the supervisors involve themselves in the sustained display verbal and nonverbal behaviors, excluding physical contact.
Supervisor undermining: Supervisory behavior that is intended to hinder, over-time, the ability of subordinates to establish and maintain positive interpersonal relationship, work-related success, and favorable reputation.
Toxic leadership: People and the company are harmed because of this approach because of the enthusiasm, autonomy, creativity and the expression of innovation by control.
Tyrannical leadership: With cruel and oppressive tactics they use their own power to take their own advantages rather than the well-being of their subjects and in the process.
These styles of leadership are, manipulated, oppressive, abusive and calculatingly undermining. Their actions are perceived as harmful and intentional which creates legal action as a source against employers.
The best example of unethical leadership is APPLE the most successful company-the largest in the world and the most valuable company and the most profit earning in the global brand. this company also amongst its least ethical with three reasons :
- Apple is so aggressively in trying to every last loophole in the tax code. This caused to push any worker in their organization to exhaustion and suicide in Chinese sweatshop because of tyrannical most profitability company and by using unethical leadership, Americans is taken such pride in apple brand.
- The actions of apple have a very great and harmful impact by not paying tax on the profit made by transferring property of the intellectuals. This tax is valuable into cost in the U.S. Almost $2.4billion treasury and can make Apple have the highest profitability.
- The role models are pioneers of bad behavior whic is going to have a lot of harmful effects than the innovative avoidance by an obscure company. This proofs that in ethical leadership, Apple has low responsibility but we can say that they rightly expect visible corporations and individual leaders to hold themselves to the highest standards.
With the help of unethical leadership, some organization has the ability to achieve the objectives and goals of the company with its profitability, but there is some negative effect of this leadership style such as difficulty of recruitment and bad work environment, pessimistic of employee attitudes. This may have severe impacts over the future and company may damage the image towards the customer thinking and employee trust in the long-term period. So it is important for the managers to focus over the practices of the ethical leadership because it is a sustainable method that creates many good effects in the overall performance of the company through the groups of people in the organization and individuals in the long term period.
Explaining the organization’s responsibility to the various groups of stakeholder to enable them to reach their goals
A business owner has to bear more responsibility. While the goal is to earn money, a business has customers, community members, suppliers, employees and business partners who have needs or requirements. Serving these stakeholders to the best helps to avoid negativity for the business.
Customers or clients are critical stakeholder groups fora business. A business owner’s responsibility is to operate consistently and fairly while providing customers with a satisfactory experience. This includes transparency in the marketing and follows through on promises made.
Understanding expectations of customers have and delivering quality, and fair experience always assure a loyal customer base to the sompany.
Our community is made of different customers, but the community stakeholder groups are a bit different. Our responsibility towards the community includes participating actively in the activities of the community and paying them back in some way or the other. Joining chambers of commerce and service clubs helps to establish a community presence. Giving to local charitable organization and allowing employees paid time to volunteers in service programs shows one’s commitment to being an active community member.
Employees have always been integral to company operation, but our responsibility to them has increased. Fair labor laws have legalized our duties to offer fair, non-discriminatory hiring and emplacement. More importantly, more workplace diversity means a way of promoting a culture where acceptance and the tolerance of the differences are taught and appreciated. Plus, employees accept to be valued as key assets to your business. If they are not treated in this way, then they will constantly see out alternative employment.
SUPPLIERS AND PARTNERS
To maintain loyalty, trusting relationship one has to operate fairly and honestly with suppliers. Being up front with intention and building trust allows coordinating for more efficient processes of distribution that will minimize the costs of inventory and reduce stock outs. It is also expected by the business partners that your obligation to do business legally and ethically should be fulfilled on time. If the environment polluted or you have cheated on your business taxes, your business partners may have to suffer guilt.
WHERE DO THE LEADER’S LOYALITIES LIE-WITH THE SHAREHOLDERS, THE STAFF OR WITH THE CUSTOMERS
In order to earn the Loyalty, the leaders put the welfare of their partners and customers in front of their own self serving interest. Herein lays the paradox o loyalty. If it is about self sacrifices- that is about putting principles and relationship ahead of immediate personal financial gain-what relevance can it possibly hold for business, which is in large part driven self-interest?
A 5% increase in customer relationship yields a 75% increase based on extensive research into companies from startups to the established institution, including Harley Davidson, intuit, etc. states that they have discovered the six bedrock principles of loyalty upon which leaders build enduring enterprise. The examples are as follows
- PLAY TO WIN:
PLAY WHERE YOU CAN WIN
If you want to win, you must have the focus to play only where they have the wherewithal to win and where they don’t. They don’t compete for every new business that appears profitable for the moment; they always look for the potential for building sustainable assets and relationship and invest in that to earn more.
PROTECT YOUR PARTNERS INTERESTS
Only by helping partners to reach the stars by the way of targeting the value of the customers which can be better than the best that a leader can ensure to bring success in the organization. A lot leaders fail to fulfill the demands of this goal and don’t insist that their organization targets the very best value. It is considered to be much easier and less risky, to shoot for a reasonable value.
So as to ensure that the standards of excellence are set up in your organization on continuous basis, your main focus should be on the basic of the levels of excellence for the lifetime of your customer.
Play to win to achieve sustainable growth. Loyalty leaders growth rates surpass industry averages across the board.
- BE PICKY
Leaders whose main motive is to build loyalty and generate the loyalty effects must exercise extreme discipline to protect their partner’s interests. If they want to win, should ensure that their partners win instead of making your competitors lose.
PICIKING YOUR EMPLOYEES
Employee’s behaviors and attitudes even more than leadership principles and ideals communicate most directly to customers, suppliers, and other just what the company stands for. Loyalty leaders are uniforms in setting high standards for new employees, and they are regular in the practices that they have learned in order to attract and maintain the right employees. They put in lot of efforts to ensure that the first experiences of the employees on the job will reflects their company’s value as well as their value in the company.
SELECTS YOUR CUSTOMERS WITH CARE
Being picking about customer may be a foreign concept. Bringing in the right kind of customers can result in cash inflow annuities for a longer period as well as it will help to achieve higher level of growth from referrals and will provide enhanced satisfaction from employees that results in the improvement in the daily jobs while dealing with appreciative customers. The Loyalty leaders are really picky about targeting specifically a right customer for whom the firms are efficient to serve their needs. If rigorous standards for choosing your business partners your employee your customers your suppliers and your dealers are maintained, then, it is likely that you will be headed for the high road of the loyalty leadership.
Meaning of corporate Social Responsibility: CSR refers to a company’s responsibility towards society and environment in which it operates.
Impact of CSR on the organization: A firm follows the policy of CSR as its core activity helps it to improve the market position or image of the company, promotes the brand, increase its market value, retain the trust of investors and customers and attract new investors and customers towards the company. It also helps the firm in the arrangement of finance from the external sources.
Impact of CSR on the society: If the business respects the environment and society, it also respects the business. The firms should promote the idea of preserving the environment and serving minority groups in the society in the best manner.