Charismatic Leadership: Dick Smith Case Study

Length: 5 pages Sources: 8 Subject: Leadership Type: Case Study Paper: #43785928 Related Topics: Aig, Transformational Leadership, Ecosystem, United Parcel Service
Excerpt from Case Study :

Leadership of Dick Smith

Leadership has always been at the forefront of business studies; leaders are always (or should always be) concerned with how they can stimulate the best performance in the workforce in order to gain the best results and stability for their business. Among the various types of leadership, transformational leadership includes actions that are charismatic, visionary, and inspirational. These actions inspire followers to deliver not only their best, but to try and deliver beyond their best. Followers under such leadership are inspired so much that they do not only meet the expectations and demands of their duties, but perform beyond these (Qu, Janssen and Shi, 2015). Business success is often dependent upon leadership that can inspire workers to perform beyond what they consider to be their best work. As such, charisma is an important part of leadership. A charismatic leader offers an inspirational and energetic example of the values and ethics inherent in a company. This is what Dick Smith has accomplished.

1. What do you think has contributed to Dick Smith's business success?

Dick Smith's business success can be attributed to various factors, including his personal values and business ethics. His strong sense of personal values is translated into his business dealings and this has created for him a unified vision that is based upon gratitude and service to others. These values have been part of his basic sense of ethics since childhood. These values are combined with the business values of hard work and freedom of speech. In practice, this means that he has dealt with employees and associates on the basis of mutual respect and communication. Being able to both raise ideas and listen to those of others have has made a significant contribution to his success and his charisma as a leader.

This is in keeping with research evidence such as presented by Peus et al. (2010, p. 196), which found that successful companies have specific cultural variables that contribute to their success. These variables are specifically related to leadership involvement with employee communication and satisfaction. The authors found, specifically, that corporations that value ideals like corporate citizenship and responsibility tend to be more successful than those companies that do not. Part of this responsibility includes employee relationships, such as an active concern with job satisfaction and encouraging competence among employees and within the company as a whole.

This is something that Dick Smith is specifically concerned with, using his values to drive the success of his business. His focus on honesty and transparency are particular factors that have driven his success, as he acknowledges the importance of a good public image in the competitive market. Indeed, there are few things as damaging to a corporation's image as non-transparent behavior that comes to light after the company's downfall. Enron is perhaps the most well-known example of this. Another example is the company AIG, as cited by Ferrell, Fraedrich & Ferrell (2013, p. 368). After this company's demise and resurface, its first responsibility was improving its damaged corporate image, relating to non-transparent activities in the past. The authors suggest that the best way to do this was to be more transparent in terms of their finances. This is something that Dick Smith has implemented in his business in the first place; hence there is no need for damage control, even if there is failure.

Another success factor is his focus on the Australian community, where he has been able to link his business vision with the values held most dear by a large part of this community. This is an important factor, as mentioned by Boehm et al. (2014), particularly in the increasingly globalized business community. By focusing all his attention on his national community, Smith has broken the mold somewhat, as most businesses today focus on expansion. Although this has earned him some

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Nonetheless, Smith shows cultural competence by aligning his vision and values with those of the Australian market, which is an important factor in business, regardless of one's specific business environment.

Another important factor of successful leadership is discouraging turnover within employees. According to Hamstra et al. (2011), when employees willingly remain in their organization, this contributes to stability and effectiveness within the organization. With his charismatic and transformational leadership style, one might consider Dick Smith as successful in business because of his successful leadership style, contributing to the satisfaction of his employees by inspiring them to strive beyond what they believe possible.

1. Identify the attributes that contribute to Dick Smith's charisma.

There are various factors that contribute to Dick Smith's charisma. One of these is his manner of speech. He is highly emotive, self-confident, and articulate. These three factors that related to the way he speaks make him attractive to listeners. He is able to inspire his listeners towards believing what he believes is important and acting on those beliefs. He is able to use words to articulate his thoughts and feelings in such a way that listeners pay attention and focus their belief on him. This is typical of the charismatic leader.

As a leader, he uses this charisma to further his own and the company's values, placing emphasis on honesty and social responsibility. He also encourages this in those with whom he works. As a concrete demonstration of this value, one third of the profits from Dick smith Foods is donated to charity.

Another aspect of Dick Smith's charisma is his ability to not only lead, but also to affiliate with others in the business environment. This creates a type of "ecosystem" on the level of the "knowledge ecosystems" suggested by Clarysse et al. (2014, p. 3). Via his charisma, Smith is able to relate and negotiate effectively with business partners. In this way, a system is created by means of which partnerships are formed. These partnerships are mutually beneficial, in accordance with Smith's personal and professional values.

1. Is Dick smith a transformational leader?

In the light of the above, it can be said that Dick Smith is indeed a transformational leader. He uses his charisma to provide an environment in which his company and employees can thrive, thus transforming not only their environment, but also their work ethic. This is confirmed by Boehm et al. (2014, p. 13), who cite charisma and transformational leadership as two highly important components of organizational performance.

With his charismatic leadership, Smith is able to influence his subordinates in a positive way by acting as a role model for lower level managers. Hence, he influences not only employees, but also the leaders who work with these employees. Leaders are themselves influenced to create a transformational climate among employees.

As seen above, he is therefore highly concerned with his own responsibility in shaping the perception of the company among customers and members of the public by having developed a clear vision and a strong sense of values. By providing a role model for others, Smith creates a platform from which to emanate the ideal of being part of the team. All workers are part of the same team, being inspired and to see themselves in this way.

An important part of Boehm et al.'s (2014) findings is the idea that charisma includes not only a certain way of making speeches, but also particular leadership behaviors. These can be learned and used by all leaders, and all leaders and employees can be influenced to have a sense of pride in the company's values and goals.

One way to accomplish this is by means of relational identification (Qu, Janssen and Shi, 2015). According to the authors, leaders that set bold expectations for creativity within their followers generally are rewarded by highly creative work. By inspiring his followers through his example and communication, Dick Smith is able to bring out the best in his workers. This creates an environment in which turnover is low and productivity high, while job satisfaction is also high, since employees find themselves challenged creatively. By communicating in a charismatic and influential way, Smith is able to inspire his followers towards greatness, creating success for his company. By doing this, he creates a favorable work environment and encourages low turnover and a high level of stability within his company (Breevaart et al., 2014).

Conclusion

In conclusion, it is clear that charismatic, transformational leadership has been part and parcel of Dick Smith's business success. Despite his critics, he seems to have made a great success of most of his business endeavors. Taking the occasional failure in stride, he has never lost his devotion to his work, his values, or the people he serves. By constantly adhering to the values he considers important, Smith has succeeded in avoiding the common pitfalls of the current business environment. Today, it seems far too easy to embezzle money or to engage in fraudulent activity for personal gain. Smith is a true example of what is possible when a person relies simply on his ability…

Sources Used in Documents:

References

Boehm, S.A., Dwertmann, D.J.G., Bruch, H., and Shamir, B. (2014). The missing link? Investigating organizational identity strength and transformational leadership climate as mechanisms that connect DEO charisma with firm performance. The Leadership Quarterly. Retrieved from: http://www.researchgate.net/

Breevaart, K., Bakker, A., Hetland, J., Demerouti, E., Olsen, O.K., and Espevik, R. (2014). Daily transactional and transformational leadership and daily employee engagement. Journal of Occupational and Organizational Psychology 87. Retrieved from: http://www.beanmanaged.com/doc/pdf/arnoldbakker/articles/articles_arnold_bakker_343.pdf

Clarysse, B., Wright, M., Bruneel, J., and Mahajan, A. (2014, Aug.). Creating Value in Ecosystems: Crossing the Chasm Between Knowledge and Business Ecosystems. ERC Research Paper No. 22. Retrieved from: http://enterpriseresearch.ac.uk/wp-content/uploads/2014/08/ERC-RP-Creating-Value-in-Ecosystems.-Research-Paper-No-22.pdf

Ferrell, O.C., Fraedrich, J., and Ferrell, L. (2013). Business Ethics: Ethical Decision Making and Cases. Mason, OH: South-Western Cengage Learning.
Hamstra, M.R.W., Van Yperen, N.W., Wisse, B., & Sassenberg, K. (2011). Transformational-transactional leadership styles and followers' regulatory focus: Fit reduces followers' turnover intentions. Journal of Personnel Psychology, 10(4). Retrieved from: http://psycnet.apa.org/journals/prs/10/4/182.html
Qu, R., Janssen, O., and Shi, K. (2015). Transformational leadership and follower creativity: The mediating role of follower relational identification and the moderating role of leader creativity expectations. The Leadership Quarterly. Retrieved from: http://www.researchgate.net/


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