Types of Organizations and leadership styles Hypothesis: different types of organizations perform better with leadership styles tailored to that industry or type of organization. When researching the different styles of leadership, one question that likely comes to mind is the relationship of the leadership style to the performance of the organization. Organizations in the same industry can have vast differences based upon their corporate culture. The corporate culture itself can promote an environment of one style of leadership over the other.
Also, there are styles such as coaching that overlap onto other leadership styles. We will explore the different leadership styles within a service and manufacturing environment as well as identify what leadership can mean to an organization’s bottom line. Most importantly, the desire to accomplish the organization’s goals is crucial to both the leader and the manager in the organization, yet how they achieve them varies. “Leaders provide vision and inspiration” while “managers provide the resources and expect results” (For & Door, 65).
Effective leaders are often referred to as being coaches that guide employees along the way. The mere presence of a leader encourages people especially when providing the support and the foundation that coaches or leaders provide. Employees like guidance, whether it is having someone there or knowing where they are heading, it provides a sense of comfort and gives them reassurance and confidence. The vision that leaders have is to have their employees right along with them to strive together to make the organization successful as a team.
This type of style helps to structure the organization in a positive manner where people feel comfortable, valued, and most importantly seen as resources that benefit the company for the greater good. Being a coach means that you are a mentor and you provide a vision, hope, and a future. Coaching is a method that is often used to get people into and excited about their work. Tulane says that “when a leader talks like a performing coach with charisma, passion, and enthusiasm; you actually coach people to success in this manner” (Tulane, 47).
This type of leadership vision helps to unite people in the sense that they feel a part of a team and the organization. Coaches and leaders are a lot alike, for they both are encouraging, passionate, and good with change. What is a leader? Vision, passion, strategic thinking, communication skills, titivation, ability to unite people, personal power, consistency, adaptability, discipline, resolution, the constant search for excellence, the aptitude to relate are some characteristics and skills commonly needed for the maturity of good leadership.
He is someone that has a base of followers that look up to him and is motivated to strive to succeed. Also, a leader is someone who has the ability to manage people and teams with different personalities and successful manages them, monopolizing them for common goals. In a simpler definition, leadership is communicating to people their own values and potential so clearly, so strong hat they end up seeing the leader in themselves as well. Nobody wants to be led by someone who lacks courage and confidence. A leader generates a superior style and positive leadership to those who dare to work and seek opportunities never attempted before.
A great quality of an effective leader is to know how to earn the respect of the team through its influence not by his position, but the understanding of what is right and just, a leadership style according to which all are treated fairly and equally often creates a sense of security. This is extremely constructive too great a leveling factor in the workplace. Overall, being lead by someone who engages with employees, leaders, also known as change agents, are essential to establishing a good work atmosphere. A good work atmosphere is a place where the employee feels valuable and vital to the organization.
The ability to get your employees motivated about their work is one of the hardest obstacles, yet leaders possess that skill, which helps get people excited about their work. Motivating people is not an easy task especially when it comes to routine work, yet leaders are up for the challenge and possess a certain enthusiastic charisma that exudes onto everyone. Leaders have a greater indecency to see people as assets, thus putting more value on them and treating them as the crucial components that they are to the organization.
This type of organization can be referred to as a high performance organization (HOP), an organization that views and treats people as the assets that they are. These types of organizations are more successful and grow as an organization, for they put value into their most important resource, people. Viewing people as assets is essential to an organization’s degree of success. This sort of behavior exudes onto the employees and they feel more valuable, which improves overall morale ND in turn helps productivity. “In short, managers have subordinates, while leaders have followers, “(Jacobs, 62).
Power, authority, and formal decision making are all correlated with management. Managers are much more focused on production and meeting the bottom line, yet leaders are more concerned with the people in the organization and the overall moral. End of the quarter deadlines, fiscal year review, and profits for the year are all directly fixed associations with managers, thus they are primarily focused on planning, organizing and executing to meet those numbers. Managers have the status and power needed to control and structure the organization so that it meets the financial goals, yet they lack the personality with their employees.
The lack of personal interaction with the employees hinders the relationship between managers and employees, for they never fully develop the bond that leaders often possess. Underneath managers are subordinates, people who report to them because of the hierarchical structure and not by choice. Many times managers are swamped with policy and implementing procedures that they lack the time to actually get to know their employees and utilize their skills to the full potential, thus resulting in lack of recognizing an employee’s full aptitude.
Yet, “Leaders establish principles concerning the way people should be treated” (Jacobs, 65) while managers are the ones establishing the rules and regulations for people to follow. The concept of people as assets is part of a leaders mentality, which is one of the many reasons why leaders have followers. People want to feel that their role is valuable to the organization. Leaders listen and engage people to use their abilities to benefit the greater good of the organization.
The major difference is that leaders see the value that people bring into the company, thus if they take care of them they in turn will be more reductive, innovative, and the best employees that they can be. There is not just one way to lead a team to be successful, as every organization has different objectives. Every follower can be and will be different, so a successful leader needs to adapt to followers to be effective. Leaders have to learn to understand their people and find ways to motivate them to be successful and enjoy the work place. In order to maintain balance and minimize the negative consequences of the drive to excel, companies are looking at a variety of ways to engage people, and to create an environment where people are naturally, productive. ” (Bower 003) According to psychologist Kurt Lenin there are 3 kinds of leadership styles. “The Authoritarian or Autocratic Leader, The Participative or Democratic Leader, and the The Delegating or Laissez-Fairer Leader. ” (Farrell, 2009). These different leadership styles can be effective with certain types of followers but can also be ineffective with other followers.
Not every person or group will be motivated and influenced in the same way so leaders have to adjust and adapt to their followers to be successful. Leaders also have to understand their organizations as different organizations require different leadership styles. It s crucial for the leader to adapt his style to the type of organization that he is working for. Within the scope of leadership there are different types of styles, which are: authoritarian, democratic, and laissez-fairer. It is crucial to consider the type of organization it is and the type of people that you will be leading.
For instance, if it is an organization where there is an open door policy and room for innovation then it is more feasible for a democratic or laissez-fairer type of leader. On the other hand, the authoritarian leader follows strict policies and procedures with very little to no input from employees, thus he would to work well in that particular organization. The authoritarian is a leader that possesses the power and Uses it to dictate what tasks and when they need to be completed. This leader lets the followers know exactly what is required from them without necessarily letting them know what the future has in store (Gale, 2009).
This is not the type of leader that is valued as the best type of leader for the organization, yet he may be a good fit for an organization that has many unmotivated and lost employees. This type of leader is good for creating a strict work environment with little room for change, no input from employees, and his type of style it is strictly business and not personal. Many times managers implement this type of leadership style more so than leaders, for it creates a procedure and routine for how the organization will function and too many in authority positions that is critical.
On the opposite side is the type of leader whom allows the employees to make their own decisions on how to complete tasks. This style allows employees more freedom to work at their own pace and manner, which is often used with people that are already very motivated and goal-oriented thus needing less direction from superiors. It is crucial for the deader to recognize if the people are independent and work well without much guidance, for many times if they are their performance may be hindered.
The democratic type of leader utilizes the best of each style and incorporates it into a style that allows for more innovative freedom, guidance, and support. Social scientist Kurt Lenin believes that the democratic style is superior because it “recognizes each member’s strengths and effectively elicits the best performance from each member, all while guiding and leading effectively” (Gale, 2009). The democratic style of leadership would promote innovation, production, and boost many morale. It gives people an opportunity to contribute to the organization without being micro managed and treated simply as a number.
An organizations success is based upon how the people within that organization are treated. Frequently, managers provide the resources the people need to get their tasks done, yet they fail to be there to guide them along the way. The unknown future of the organization or potential career path is a major concern for the employees and that is the mistake managers make, leaving the future plans unknown to employees. Leaders utilize their skill to listen, support, and motivate people to Ewing the best employee possible. There are no uncertainties or hidden agendas when leaders are coaching their people into success.
People are fully aware of where the organization is heading, what role they play in that development, and who will be right along there with them, their leader. When people are considered as being assets to the organization, have guidance, and also have the opportunity to grown within the company there are remarkable results. The key is to realize who is a part of your organization and how to lead them into success. Once upper manager realizes that people aren’t simply numbers ND that they are assets, the organization grows and continues to succeed.
In order to understand what makes a company great, a good place to start might be the Fortune 500 Best Companies to Work for list. Here you’ll find companies in various sectors ranked by way of surveys done by the Great Place to [email protected] Institute. These surveys are similar to the LSI and OIC activities done for this class. They focus on employee trust by measuring credibility, respect, fairness, pride, and camaraderie. After this, it goes a step further with the culture assessment given to management that rates the organization in nine key areas.
On Fortune’s 100 best companies to work for 2010 list is a software company, AS. On the Great Place to [email protected] Institute website there is a dossier of what makes AS great. At the start of the article, you find this quote from AS CEO Jim Goodnight; “AS starts with the belief that we are in the business of people – whether that is with customers, employees or business contacts. “. In addition, we’ve read about how a company becomes high performing when they embrace and act on employee empowerment and treating people as their most important assets, but seldom do we see the data behind these claims.
In the chart below, ATA is represented in a manner that clearly draws the correlation between a company that places a high value on their human capital and that company’s performance. Considering that a major component of the Fortune 100 best companies to work for list is based upon employee surveys it therefore stands to reason that these are the companies focused on employee engagement and treating employees as their most valuable asset. Fortune “100 Best” vs. Stock Market 1998-2009 Source:Russell Investment Group O Great Place to [email protected] Institute, Inc.
In the case of the leader we chose to focus on, Sir Richard Brannon, this focus n the people is evident in the quote on his Virgin Group’s careers website; “I’m often asked what it is that makes Virgin different. The simple answer is people. If it weren’t for a bunch of well trained, motivated and, above all, happy people doing their bit, we’d have never launched a record label, never mind a fleet of sass. ” The Virgin Group is the parent company of over 200 independent companies that Brannon has created, with the largest of these being Virgin Atlantic Airlines.
Since the Fortune 100 list is for US companies, Virgin Group was not ranked, but one of the companies was ranked by the United Kingdom edition of the Great Place to [email protected] Institute survey. It was Virgin Mobile, which ranked as number 22 among UK companies in 2003, 2006, 2007 and also ranked 26 among French companies. It all boils down to viewing people as assets. Once management evaluates the organizational needs and places their highest resource, people, as their top priority the organization will flourish into a successful company within its industry.
To further develop the link between management style and organizational performance, we will explore the performance of Virgin Atlantic Airlines because it’s the largest subsidiary of the Virgin Group umbrella and arguably the brand most identified with Sir Richard Brannon. Virgin Atlantic was founded in 1984 and according to the press kit available on their website; Virgin Atlantic is Britain’s second largest carrier. In the Air Transport World 2008 ranking of airlines, Virgin Atlantic ranked 24th in operating profit while Virgin Blue(serving Australia) ranked 19th in operating profit.
For fiscal year 2009, they ranked 20th worldwide for system traffic. These are impressive figures considering the competition in this market and the recent downturn of this decade. Another impressive fact is that Virgin Blue was just started in 2000 with just 2 planes but has now grown to 68 planes and 31 percent market share of domestic Australian travel. Thus, the question is the performance of the Virgin companies a coincidence of their expansion ideology where they seek out a customer service oriented industry with a current pitfall and aggressively move in with exemplary service or does it has more to do with the ideology of its leader?
To explore this, we can seek out a study off failing company. One such study purports “Literature analysis proves the fact that in spite of numerous leadership theories there is still a lot of discussion bout appropriate leadership styles that would be most suitable for a modern organization in the aspect of the relationship with employees. ” (Businessman©, Arena; Brainiest©, Edit, 2009). The study investigated a service company in Lithuania with a high turnover rate. The turnover rate was also a key indicator in the Fortune ranking.
When people aren’t happy and leave an organization it has a direct affect on the production and growth of that company. Dare to be a leader: “Brannon, Sir Richard (Richard Charles Nicholas Brannon), 1950-, British business mogul and adventurer. He left school at 16 to start his first business, the gazing Student. In 1970 he began a mail-order record business, named Virgin because of his inexperience in the field. He opened a discount record store in 1971 and Virgin Records, a trendsetting label in punk and new wave rock music that later signed rock superstars, two years later.
In 1984 Brannon became part owner of an airline, renamed Virgin Atlantic, which achieved SUccess, but in 1992 he was forced to sell Virgin Records to finance the airline. His Virgin- brand business empire has expanded since the 1 sass to become one of the largest privately owned conglomerates in Europe, with some 200 enterprises in he finance, retail, Internet, hotel, telecommunications, gambling, and transport industries. Brannon, who was knighted in 1999, also has set several water and air speed records. In 1986 he was part of a two-man powerboat crew that crossed the Atlantic in record time.
The next year he and another adventurer were the first to cross the Atlantic in a hot-air balloon, and in 1991 they became the first to fly the Pacific. In the 1 sass he made several unsuccessful attempts to fly a balloon around the world. Brannon has survived a number of life-threatening crashes. ” (OBESE_HOST). Abrasion’s Virgin brand grew rapidly during the sass s he set up Virgin Atlantic Airways and expanded the Virgin Records music label. Richard Brannon is the 21 12th richest person in the world according to Forbes’ 2009 (Updated 03. 10. 10) list of billionaires, with an estimated net worth of approximately E. 7 billion (US$4. Billion). (Forbes. Com). What is that Sir Brannon has that is so successful? What kind of strategy he used to build his empire? Often, we look at textbooks and formulas to change the course of our careers or experiences in order to follow them as alternatives to outline a management plan. Other times, we follow changes based on people who are considered homeland in business because they had the courage to innovate and rediscover at the right time, creating new needs, and one of this phenomenal person is Sir Brannon. Brannon likes to challenge and conquer large corporations.
He seeks trade disputes based on brand credibility and public confidence. “Virgin has a sense of challenge. We like to use the brand to challenge some very large companies, which, in our view, have too much power, “he says. An example was when he entered the business of non-alcoholic beverages in the ass’s, with a soda made with cola, which put him in direct competition with giants like Coca-Cola ND Pepsi. With his informal style and non-conformist attitude, the business-man has absorbed the idealism in the early ‘ass, with instinctive sense that all people should be treated with respect, especially the consumer. He has been deceived for a long time for an industry that is able to hide what charges,” he warns. As much as his constant pursuit of new business is part of Virgin Group, something important about Abrasion’s philosophy is to keep it simple, no flowcharts or traditional hierarchies, in order to avoid red tape in business; everything is broken down into handy pieces to be managed as independent companies, including each with its own board of directors. This creates a warm and informal ambient where according to him creates the ideal working environment.
His opinion about people: “Good people are crucial to business success. Finding them, managing them, inspiring them and then holding onto them are among the most important challenges a good business leader faces. How you deal with these matters often determines the long- term success and growth of your business, What is a company but a collection of people? Take an airline the 747 it flies is the same as a rival’s 747. The interiors are usually pretty similar, and there is often only a light difference in the entertainment and food.
What sets one airline apart from its peers are its crew and their attitude toward passengers. Our Virgin airline crews are smiling, cheerful and pleased to help, which leaves our passengers wanting to fly with us again. It is no surprise that Virgin America, which flies within the United States, constantly sweeps the travel awards for service and quality. Its planes are new, with great interiors and entertainment; but above all, the great service of its crews is what wins so many plaudits. People are your key assets. On the front lines of business, they can make or break a company.
A true sense of pride in the business makes all the difference, as I constantly remind our managers and other budding entrepreneurs. Your people need to be led well. A good leader must know the team, its strengths and weaknesses; socializing and listening to the team is key. One main reason people leave a job is that they are not listened to. They feel frustrated. It is rarely just about money. Be aware that a bad leader can destroy a business very quickly. In small businesses this is easily apparent. On my island of Necked in the Caribbean, we had a general manager who tried to change the way things were done.
He discouraged the staff from drinking with our guests. This soured the atmosphere fast. We had to step in to replace the manager and restore staff morale and the sense of management’s trust in them, which had been broken. We’ve also started some of our most successful businesses after a pitch from one of our people. Virgin Blue, for instance, our Australian airline, was the brainchild of Brett Goodbye, who had been working for Virgin in Brussels. He came to me with his business plan on a beer mat outlining the start-up of a low-cost carrier in Australia to take on Santa and Unseat in their domestic market.
In the last 10 years Brett has expanded Blue and its sister airlines to the United States, New Zealand, Thailand and, soon, South Africa. In other cases, we backed an outside team when we were sufficiently impressed by them to give them brand support and the space to go build the new business themselves. Virgin Active, our health club chain, is a good example. Matthew Backtalk and Frank Reed came to me with the idea of a family-friendly health and fitness club in 1999. They had set up and sold a chain in the United Kingdom in the 1 sass and wanted to do it again with the Virgin brand on the door.
We liked the idea and the management team. We backed the rollover in the U. K. , and within two years were offered the opportunity to rescue a chain in South Africa. The Active team jumped at the chance, and we have not looked back since. We have more than 90 clubs in South Africa and another 100 in the U. K. , Italy, Spain and Portugal. Trust is a key facet of any business, but how you deal with being let down once can also contribute to success. Are you willing to give people a second chance? When I was running Virgin Records, a member of the talent-scouting team was stealing and selling boxes of records to local secondhand shops.
Tipped off, I called him out on it. He admitted everything. Rather than fire him, I gave him a severe warning and a second chance. Everyone messes up sometimes, I told him, and I said I expected him to learn from his mistake and get back to doing what he did best finding artists. He went on to discover Culture Club, one of our biggest selling artists of the 1 sass. We all slip up at some stage in our careers. I did. When was just a teenager, fell foul of the customs and excise people as I was trying to bring records into the U. K.
I was given a fine, a second chance and have tried to make the most of it ever since. I hint this has made me much more accepting and forgiving of people’s mistakes. So many companies compare themselves to family units that the word is sorely overused in modern business. However, really believe that Virgin’s sense of family spirit and belonging has kept it going over 40 years. When the business was smaller, we had legendary parties at my house near Oxford, England. We set up a fairground with tents full of entertainment for the staff.
As we grew, the party turned into two parties and, pretty soon, there were weekend parties just to make sure everyone was invited. By the end they were weakling parties, ND at that point the neighbors stepped in and we had to stop. But we had established the culture one built around people. People are the lifeblood of any company; they need to be looked after and celebrated every now and then. ” (www. Entrepreneur. Com). Is clear that Sir Brannon is a democratic leader, he understands that people ideas and listening what they have to say is the core value of his business.
He also understands that when praising people you can add more than criticism and he makes sure that all people that works with him are compensate accordingly, Sir Brannon definitely dares to be a leader. The Lithuanian study reveals that the employee’s perception of top management’s style is one of Laissez fairer leadership as witnessed in the graph below. One can surmise that due to the lack of engagement with the workforce, they were not encouraged to stay and this lead to the high turnover rate which is costly to the organization.
To quantify the impact of turnover on the organization’s performance, it is estimated that “a one standard practices associated with a 7. 05 percent decrease in turnover and, on a per employee basis, $27,044 more in sales and $18,641 and $3,814 more in market value and profits, respectively. ” (Prefer, J. , Vega, J. May 1999). Another facet of a disengaged employee and the predecessor to turnover is absenteeism. One estimate is that in a typical 10,000 person company, absenteeism costs the business about 5,000 lost days per year, worth $600,000 in salary paid where no work was performed (Harder, J, Wagner R, 2006).
Another component of the survey was designed to capture even more information about the leadership and follower connection by rating the leadership orientations. The below graph again highlights the predominant leadership styles in this organization as being a Laissez Fairer or authoritarian type of leadership style. If it were a transformational leadership style leading the company, we would expect to see the relationship and development orientated attributes to be highlighted below.
The Airline industry is customer service driven, and to re-affirm that a transformational leadership style such as a democratic leader would display drives results, we can look to another study on the subject. In a study of banks and food chains, it was hypothesized and proven that customer contact personnel who perceive that they are managed via a transformational leadership style will have a higher level of organizational commitment than those managed IA a transactional leadership style and also have higher job satisfaction (Baker, K, Emery, C, 2007).
When looking at the difference between a service and manufacturing company, you can hypothesize that you would need more of a democratic leadership in a service industry while you could desire a more autocratic style in a manufacturing environment. This is backed up by the statement of one study “manufacturing industry teams regard substance performance as being of greater importance, while the service industry attaches importance to interpersonal relationships. Accordingly, the manufacturing industry is more amenable to control-oriented leadership and the service industry to concerned and instructed-oriented leadership. (Chem., M, Sheen, M, 2007). In the article, What’s Your Leadership Style? (Forefathers) explores different leadership traits for lawyers. Some of these leadership traits are needed and not everyone wants to be a leader. I think that is one reason why many lawyers go into fields that have very little to do with or nothing at all to do with law once they graduate law school. Lawyers lead teams. Senior partners set the agenda and tempo while middle partners and upper-level associates engage younger associates.
Even the lowest associate on the totem pole fills his or her own leadership role by interacting with paralegals and staff and managing discrete portions of the case. Lawyers lead in the community. All lawyers are called upon to participate on boards and in community groups. Eventually–and inevitably–participation turns into responsibility. Lawyers lead fellow lawyers. Law firms could not function without attorneys leading committees and departments of the firm as well as performing formal or informal mentoring to those who are less senior to them. Lawyers develop, manage, and guide clients.
Good leadership must be demonstrated in client interactions, whether it be through the steps of litigation or in consummating a transaction. ” (Farrell, 2009) Adjusting your leadership style and understanding your leadership traits can be very effective when working with followers to motivate and reinforce productive behavior. If you have a lassie-Fairer style of leading but a person you are leading needs direction you will need to adjust to a more Authoritarian leader. You are able to motivate by understanding other peoples work traits and adjust to be the most productive.
In most cases leaders will act in different leadership styles eased off the situation that they are in and the objective they are trying to promote. Adjusting you leadership based off understanding you traits is also very important. Understanding what you do well and your weaknesses can help you adjust when working with all different personalities. “Being self-confident is an asset, and someone who is highly confident is likely to be highly capable. If, however, he is not also open to the opinions of others and cannot be influenced to change and improve his beliefs, his confidence becomes a weakness and he will make errors in judgment. (Bower, 2003) An effective leader will work to titivated their followers but also understand the company’s vision and end goals. An effective manager works to motivate and drive results and success but also has the knowledge and fiscal discipline to remain in the compass budget and boundaries. They must understand the importance of the people that are there direct reports but also understand the importance of all the people in the organization. The most appropriate organizations to use an authoritarian leadership style are in those where life and death situations are encountered frequently.
Two such organizations are military and law enforcement. In these giggly structured settings, strict adherence to orders can be crucial to survival and to performance. An article analyzing the effectiveness of the Egyptian military in their 1967 and 1973 wars cites the turnaround in effectiveness due to “a rigid division of labor?which allows the military clear control over the development and execution of strategy, operational plans, and tactical activity once politicians make the decision to use force?is conducive to military effectiveness. (Brooks, R, 2006). Within the context of non-military manufacturing or service organization in today’s workplace, a strong emphasis n economic values and the dominant pursuit of profits appears to generate either negative or insignificant effects. These findings support Shoal and Moron’s (1996) assertion that economic values can produce negative feelings toward the manager, who is seen as less visionary and more autocratic, and have potentially disruptive consequences for outcomes such as extra effort. Mary Sully De Lulus, 2008) So when is a laissez-fair type of leadership style appropriate in an organization? Consider a highly technical and creative work environment where the goal is to foster new ideas and invention. In a study of technology start ups, the results showed that the laissez-fairer style of management had the strongest positive effect on performance relative to other styles. (Learner, M, Heckle, O, 2009). Another example of a place where a laissez-fair style may be appropriate is where there is little at stake.
Any organization may have subcultures that operate in this manner with effectiveness. As a general rule, it is evident in the research that with regard to the effects of leadership on the effectiveness of the small companies analyzed; it was found that transformational leadership has a positive impact on performance, whereas transactional leadership and laissez fairer style had a negative impact.