In this essay, I will be analysing whether leadership makesa difference to organisational performance. I will be arguing that it does makea difference and improves performance in an organisation. I will be stating thepoints to justify my views.
The essay will start with the definition ofleadership and will include the 3 main leadership styles and briefly explainthe Great Man Theory. The main body of the essay will consist of two theories;Transactional leadership and Transformational leadership, and applying thecontext to practice.Leadership is a vital function in all businesses.Leadership is usually defined as; “Establishinga clear vision, communicating the vision with others and resolving theconflicts between various individuals who are responsible for completing thecompany’s vision” Osmond Vitez, Chron. Leadership is about outlining a plan forothers to follow and ensure they stay up to date with their aims.
On the otherhand, the concept of management is more about controlling and directingemployees in a business according to the principles established by theorganisation. Professor W.G. Bennis differentiates leaders and managers as;”Leaders are people who do the right thing; managers are people who do thingsright”.One of the most famous phrases to be associated withleadership is; “Great leaders are born, not made”.
This expression comes fromthe Great Man Theory, evolved during the mid-18th century andimplies that people are born to be great leader naturally, and therefore, greatleaders cannot be made. This theory was initially used upon male leaders,especially in the military. Kendra Cherry. (2017) Societylabelled the leaders as great leaders according to the ways they dealt withdifficult situations and how well they managed to lead the group. Thus, thetheory proves that a strong leader is needed to improve organisationalperformance and not everyone has the capabilities to lead.
The Great Man Theoryof Leadership refers to some of the most famous leaders such as; Mahatma Gandhiand Abraham Lincoln. In business there are many different styles of leadership.Kurt Lewin, a Psychologist, identified the three main types of leadership;Democratic, Authoritarian and Laissez-faire.
JManktelow, K Jackson. (2015) The Democratic leaders are those whoinvolve their team members and believes in them. They involve others in the decision-makingprocess and value their contribution. Thus, the members are typically satisfiedwith their roles and have high involvement in the projects. This is aneffective style of leadership; however, it is not the best suited for decisionsthat need be made in a limited time due to the slow decision-making process. The next type of leadership is Authoritarian. This style ischaracterized and controlled by the leader.
They make decisions by themselveswithout consulting with the rest of the group, even if their input or viewswould be valuable. Autocratic leaders usually make verdicts and decisions basedon their judgments. Unlike Democratic leadership, this style is preferred insituations where quick decisions are required to be made.
Moreover, the stylemay seem discouraging and can lead to low productivity. In simple words; Autocraticleadership involves complete, demanding control over the team. The last leadership style is Laissez-faire.
This is thestyle where the leaders give the members freedom and allow them to work in theways that suit them. They allow the team members to get on with the work andset their own deadlines. The leaders will provide them with appropriateresources and support them when needed. But they won’t really be involved inthe project as much as Autocratic or Democratic leaders.
This style ispreferred by many members due to the independence and leads to increasing jobsatisfaction, however it does have the risk of making the team lazy and missactual deadlines. As there is no real control over the team, members will feelas if they do not have much direction, knowledge or self-motivation to completethe job effectively. Firstly, one of the reasons why leadership makes adifference to the performance is because; leadership sets the direction of thebusiness and guides the team to accomplishing business vision and goals. Thiscan be achieved through the transformational theory, because it is believedthat people work better when they have trust from the leaders. As leaders pushtheir team members to do more than expected, it motives the workforce togenerate better results. J.M Burns, defined the concept of transformationalleadership as; “Leaders and their followersraise one another to higher levels of morality and motivation” J M Burns,Leadership,1978 (J Manktelow, K Jackson), Mindtools. The theory was then further developedby Bernard M.
Bass as he stated that “Leaders broaden and elevate theinterests of their employees, when they generate awareness and acceptance ofthe purposes and mission of the group”Investorsinpeople, 2017. The leader’s job is to get the team to believe thevision and urge them to complete the tasks. Apple have implementedstrong transformational leadership through the current CEO, Tim Cook.
Theleader of Apple uses the democratic leadership approach and it is important forhim to set the direction of the company for others to follow. Transformational leadership @Apple,2002 As Apple is in a tough market where the competition is highand coming up with good ideas constantly. It is important for Cook to mentorand act as the role model to ensure the team follows and comes up with new andbetter innovations. One of the major setbacks of the transformational theory isthat if the results are not expected, it will disappoint the leader and maydemotivate them in future tasks. Nadler and Tuschman, 1990, (F.F Jing, G.
C Avery May 2008) Team members usuallyhave full faith in the leaders and therefore may become blind from the realityand just focus on the leader’s visions. However, the transformational theoryhas worked in the past, for example, Apple. But for it to work more frequently,the leader will need commitment from the members and must also have sufficientpower over them to accomplish the shared goals. Additionally, leadership makes a difference toorganisational performance because it plays a pivotal role in motivating andinspiring subordinates. Motivating subordinates is proven to work becausemembers and workers are more comfortable knowing leaders are watching over themand their hard work is appreciated for. One way of motivating peers is throughthe transactional leadership theory.
This theory allows leaders to rewardmembers that perform well on tasks and punish those that underachieve. One ofthe dimensions of transactional theory is, contingent rewards. This where theleaders clarify the expectations and set SMART goals for the peers to aim for.
The transactional leaders will also intervene with the project when he/shefeels the standards are not being met and will only use punishments forunacceptable performance. The theory best works in a structured environmentwhich includes specific roles for the designated tasks. Management Study Guide Content Team This is becausethe leaders will be able to monitor the subordinate’s performance and keep atrack of their results. The organisations that usually use this theory are theone who prefer fixed operations, and where jobs need to be done in a specifictime or sales need to be met. Therefore, manufacturing companies and jobs involvingsales, will benefit from the transactional leadership theory. However, there are certain implications with transactionalleadership theory. One of the reasons is that it doesn’t enhance subordinate’screativity and allow them to produce new ideas.
Moreover, as the members aremotivated purely by money and other rewards, this may cause conflict betweenthe team, which may then slow down progress. (F.FJing, G.C Avery May 2008) Nevertheless, transactional leaders manage tolead their teams appropriately by setting out targets and rewarding them accordingly.Subordinates feel satisfied when they are appreciated, enabling them to work harderand consequently will improve their own performance as well as the organisations.
In conclusion, leadership does make a difference toorganisational performance. It has been proven and many theorists argued thatwithout strong leadership, organisations seem to struggle and adopt toenvironmental changes. As the Great Man Theory teaches, not everyone can be a leader.Therefore, those that are born to lead usually have unique traits about them thatinstantly improves the environment and organisation.
Types of leaders depend onthe organisation and industry as some businesses need a specific type ofleader. For example, Apple needs a transformational leader to generate newinnovations and allow their team members to get involved with the projects,whereas other organisations need their subordinates to focus on the specifictask and will reward them according to the performance (transactional theory). While, other factors such as competitive advantage and goodreputation are considered for organisational performance, leadership must be themost important in improving organisational performance.
Without good leadership,the organisations will lack direction and it becomes difficult for subordinatesto achieve shared goals.