In a vital function in all businesses. Leadership is

In this essay, I will be analysing whether leadership makes
a difference to organisational performance. I will be arguing that it does make
a difference and improves performance in an organisation. I will be stating the
points to justify my views. The essay will start with the definition of
leadership and will include the 3 main leadership styles and briefly explain
the Great Man Theory. The main body of the essay will consist of two theories;
Transactional leadership and Transformational leadership, and applying the
context to practice.

Leadership is a vital function in all businesses.
Leadership is usually defined as; “Establishing
a clear vision, communicating the vision with others and resolving the
conflicts between various individuals who are responsible for completing the
company’s vision” Osmond Vitez, Chron. Leadership is about outlining a plan for
others to follow and ensure they stay up to date with their aims. On the other
hand, the concept of management is more about controlling and directing
employees in a business according to the principles established by the
organisation. Professor W.G. Bennis differentiates leaders and managers as;
“Leaders are people who do the right thing; managers are people who do things

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One of the most famous phrases to be associated with
leadership is; “Great leaders are born, not made”. This expression comes from
the Great Man Theory, evolved during the mid-18th century and
implies that people are born to be great leader naturally, and therefore, great
leaders cannot be made. This theory was initially used upon male leaders,
especially in the military. Kendra Cherry. (2017) Society
labelled the leaders as great leaders according to the ways they dealt with
difficult situations and how well they managed to lead the group. Thus, the
theory proves that a strong leader is needed to improve organisational
performance and not everyone has the capabilities to lead. The Great Man Theory
of Leadership refers to some of the most famous leaders such as; Mahatma Gandhi
and 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. J
Manktelow, K Jackson. (2015) The Democratic leaders are those who
involve their team members and believes in them. They involve others in the decision-making
process and value their contribution. Thus, the members are typically satisfied
with their roles and have high involvement in the projects. This is an
effective style of leadership; however, it is not the best suited for decisions
that need be made in a limited time due to the slow decision-making process.

The next type of leadership is Authoritarian. This style is
characterized and controlled by the leader. They make decisions by themselves
without consulting with the rest of the group, even if their input or views
would be valuable. Autocratic leaders usually make verdicts and decisions based
on their judgments. Unlike Democratic leadership, this style is preferred in
situations where quick decisions are required to be made. Moreover, the style
may seem discouraging and can lead to low productivity. In simple words; Autocratic
leadership involves complete, demanding control over the team.

The last leadership style is Laissez-faire. This is the
style where the leaders give the members freedom and allow them to work in the
ways that suit them. They allow the team members to get on with the work and
set their own deadlines. The leaders will provide them with appropriate
resources and support them when needed. But they won’t really be involved in
the project as much as Autocratic or Democratic leaders. This style is
preferred by many members due to the independence and leads to increasing job
satisfaction, however it does have the risk of making the team lazy and miss
actual deadlines. As there is no real control over the team, members will feel
as if they do not have much direction, knowledge or self-motivation to complete
the job effectively.   

Firstly, one of the reasons why leadership makes a
difference to the performance is because; leadership sets the direction of the
business and guides the team to accomplishing business vision and goals. This
can be achieved through the transformational theory, because it is believed
that people work better when they have trust from the leaders. As leaders push
their team members to do more than expected, it motives the workforce to
generate better results. J.M Burns, defined the concept of transformational
leadership as; “Leaders and their followers
raise one another to higher levels of morality and motivation” J M Burns,
Leadership,1978 (J Manktelow, K Jackson), Mindtools. The theory was then further developed
by Bernard M. Bass as he stated that “Leaders broaden and elevate the
interests of their employees, when they generate awareness and acceptance of
the purposes and mission of the group”
Investorsinpeople, 2017. The leader’s job is to get the team to believe the
vision and urge them to complete the tasks. Apple have implemented
strong transformational leadership through the current CEO, Tim Cook. The
leader of Apple uses the democratic leadership approach and it is important for
him 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 high
and coming up with good ideas constantly. It is important for Cook to mentor
and act as the role model to ensure the team follows and comes up with new and
better innovations.

One of the major setbacks of the transformational theory is
that if the results are not expected, it will disappoint the leader and may
demotivate them in future tasks. Nadler and Tuschman, 1990, (F.F Jing, G.C Avery May 2008) Team members usually
have full faith in the leaders and therefore may become blind from the reality
and just focus on the leader’s visions. However, the transformational theory
has 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 sufficient
power over them to accomplish the shared goals.

Additionally, leadership makes a difference to
organisational performance because it plays a pivotal role in motivating and
inspiring subordinates. Motivating subordinates is proven to work because
members and workers are more comfortable knowing leaders are watching over them
and their hard work is appreciated for. One way of motivating peers is through
the transactional leadership theory. This theory allows leaders to reward
members that perform well on tasks and punish those that underachieve. One of
the dimensions of transactional theory is, contingent rewards. This where the
leaders clarify the expectations and set SMART goals for the peers to aim for.
The transactional leaders will also intervene with the project when he/she
feels the standards are not being met and will only use punishments for
unacceptable performance. The theory best works in a structured environment
which includes specific roles for the designated tasks. Management Study Guide Content Team This is because
the leaders will be able to monitor the subordinate’s performance and keep a
track of their results. The organisations that usually use this theory are the
one who prefer fixed operations, and where jobs need to be done in a specific
time or sales need to be met. Therefore, manufacturing companies and jobs involving
sales, will benefit from the transactional leadership theory.

However, there are certain implications with transactional
leadership theory. One of the reasons is that it doesn’t enhance subordinate’s
creativity and allow them to produce new ideas. Moreover, as the members are
motivated purely by money and other rewards, this may cause conflict between
the team, which may then slow down progress. (F.F
Jing, G.C Avery May 2008) Nevertheless, transactional leaders manage to
lead their teams appropriately by setting out targets and rewarding them accordingly.
Subordinates feel satisfied when they are appreciated, enabling them to work harder
and consequently will improve their own performance as well as the organisations.

In conclusion, leadership does make a difference to
organisational performance. It has been proven and many theorists argued that
without strong leadership, organisations seem to struggle and adopt to
environmental 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 that
instantly improves the environment and organisation. Types of leaders depend on
the organisation and industry as some businesses need a specific type of
leader. For example, Apple needs a transformational leader to generate new
innovations and allow their team members to get involved with the projects,
whereas other organisations need their subordinates to focus on the specific
task and will reward them according to the performance (transactional theory).

While, other factors such as competitive advantage and good
reputation are considered for organisational performance, leadership must be the
most important in improving organisational performance. Without good leadership,
the organisations will lack direction and it becomes difficult for subordinates
to achieve shared goals.