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Leadership Behavior for Effective Decision Making
Effective decision making in the competitive business environment is closely linked with leadership skills. Managing change in existing organizations can often be extremely difficult, as it requires changing the organizational culture, the very roots that bind its members. This paper analyses the characteristics of a successful leader, illustrated with a practical example. Contrary to popular understanding, there is no unique style of leadership for all situations and the leader needs to be flexible and change his approach depending on case to case basis. The analysis takes into account the various theories on leadership - behavioral, contingency and transformational and evaluates the response of the leader to various situations in a typical organization operating in a fiercely competitive environment.
From the analysis, it is observed that the leader exhibited varying leadership styles and behavior to address and resolve various issues. The leader is found to be democratic, participative and relationship-oriented, which are the general hallmarks of a successful leader. However, he does not lose focus on the organizational goals and has clearly identified short-term and long-term goals for the organization. He seems to have has a grand vision, which if achieved, will take the organization to great heights, in future. One of the weaknesses found in the leader was the tendency to go too soft with employees, which is an area he needs to improve. This also could lead to a situation, which could lead to inconsistencies and lack of clarity in the performance appraisal process of employees, meaning that it would be difficult to distinguish the high performing employees from the average ones. The analysis also describes how the leader is required to contend with five major challenges of leadership.
leader is 'an individual who significantly affects the thoughts, feelings and/or behavior of a significant number of individuals'. (Gardner, 1997). Three elements are seen common to most definitions of leadership; first, it is fundamentally a social phenomenon, second, leadership results in changing activities and structuring relationships and third, to be categorized as a leader, the person must be recognized as having a higher ability to influence decisions. It is now widely accepted that leadership need not be an inherent quality in people, but can be taught and developed through transformation of knowledge and training. The skills of leadership are closely linked to the skills of complex decision-making, which is the fulcrum on which organizations thrive in the competitive environment. Decision making comes to the fore, when one or more members of a group decide that the status quo is changing or likely to change and hence recognizes the need to change actions that affect organizational performance. (Rosenfeld and Wilson, 1999). The effect of successful leadership on organizational performance is illustrated in detail with a case study.
I am the Business Development Manager for a software company that has operations in many countries and delivers cutting-edge real time solutions to many leading international companies. After years of growth, the company at the start of year 2003, found itself riddled with many problems and faced a possible impedance of growth. While the company continued to enjoy the confidence of most of its major customers and thus repeat businesses, there was a significant reduction in income from new business opportunities. Competition was gobbling up new contracts by aggressive marketing, pricing and promising better deliverables. With the passing of every quarter, profitability was showing a negative growth and many felt that it was only a matter of time before the company slipped into losses.
One fine Monday morning, the news hit us that the existing Chief Executive Officer (CEO) was stepping down and a new CEO would shortly take his place. The new CEO, a rather youngish man in his early forties, joined the company in April 2003. Within a few days, he identified the key problems afflicting the organization:
lack of marketing drive leading to slowdown in growth of sales declining competitive advantages, leading to higher costs and lower profitability skilled manpower leaving the organization for better prospects low level of motivation among many sections of employees, due to lack of career growth opportunities decline in team work approach, growing incidence of indiscipline among the lower level programmers, leading to slippage in project schedules reluctance of the project teams to take on new and challenging assignments due to the uncertain environment prevailing within the organization lack of co-operation among the senior managers on goal setting
Within six months of taking over the mantle, the new CEO had successfully managed to turnaround the company's performance by solving most of the problems. Sales growth rate was back on track and expected to increase further, costs were down and profits started climbing. What was more visible was the improvement in motivation at almost all levels across the organization and better team work. In my assessment, the new CEO's leadership qualities were chiefly responsible for this remarkable improvement in the company's performance. Before making an analysis of how the leadership qualities of the CEO drove the company to the path of success, it is necessary to understand the major approaches to leadership.
The essence of behavioral theory is that leadership could be taught and good leadership is the result of exhibiting the right behavior when attempting to lead. Tannenbaum and Schmidt, the popular behaviorists, predicted that the leadership styles available to a manager can be related to the behavior ranging from a manager-oriented approach to the sub-ordinate oriented approach. Blake and Mouton developed this fundamental theory and stated that a leader may either adopt the behavior based on 'concern for the task' or 'concern for people'. Ideally, a manager should follow a mix of task-oriented and people-oriented approach, keeping in mind the final goal.
A managerial grid taking into account the two approaches provides several management styles, of which five are rated the most important - authority-obedience, 'country club' management, impoverished management, organization management and team management. Of the five styles, team management is the most effective as it directly improves performance. The theory suggests that managers need to respond with appropriate styles of leadership that are best suited for a given situation and such managers tend to become successful leaders. While the behavioral theory has been hailed widely and held the attention of researchers for several years since it was first propounded, the principal drawback was that there is no satisfactory evidence of correlation between behavior and performance. This led to the development of contingent theories.
Contingency approach to leadership: Developed by Fiedler, Chemers and Mahar, this theory supposed that leadership style could vary from situation to situation, unlike other theories which worked on the premise that there was only one best style of leadership. In an organization, when the leadership style matches the demands of the work situation, then efficiency results. According to this theory, there are two measures to assess the match between leadership style and situation. They are (1) assumed similarity between opposites (ASO) and (2) least preferred co-worker (LPC). The ASO scale measures the similarity between the most and least preferred co-workers as perceived by the leader, while the LPC scale measures the extent of which leader favorably perceive the least preferred co-worker. According to Fiedler, the LPC scale is a better predictor of match in leadership style than the ASO. These scales were expected to give indication of three types of leadership - relationship motivated, task directed and choice of task/relationship style.
The first type of leader attaches great importance to human relationships and believes that once the human angle is taken care of, results will be easy to achieve. On the other hand, the task oriented leader spares nothing to achieve the set goals and often overlooks human related factors. This type of leadership can result in unfavorable co-worker disposition. The third style represents a blend of relationship and task orientation and such leaders have the ability to swing from one disposition to the other, depending on the needs of the situation. The leader's effectiveness is based on the synchronization of the leader's style and the situational favorableness or control, which is governed by three variables - the work group accepting or rejecting a leader, the extent of complexity of the task and the level of formal authority by virtue of position in the organization. (Nicholas, 1990). Fielder contemplated that there is no single style of leadership suitable for all kinds of situations and the appropriate style of leadership can be determined by measuring the ASO and LPC in the work group.
A different approach, namely the path-goal theory, based on the contingency model was attempted by House, according to which the role of influence through leadership is to compensate for things lacking in the work place. Leaders tend to be more effective and influential when they are in a position to fill the gaps in the work context. There are four styles of leadership - leader directiveness, leader supportiveness, and leader achievement orientedness and leader participativeness.…[continue]
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