In recent times, the term ‘Work Environment’ has gained tremendous importance where employee job satisfaction is concerned. Version 2 of the PCMM or People Capability Maturity Model says that the purpose of Work Environment is to establish and maintain physical working conditions and to provide resources that allow individuals and workgroups to perform their tasks efficiently without unnecessary distractions . While this definition encompasses the literary meaning of the term Work Environment, it does not entirely cover the psychological and emotional affect that the environment has on an employee. Since most people spend the majority of their waking hours at work, an employee’s work environment is what defines his or her quality of life on the job. Research has suggested that the global corporate environment is going to keep changing drastically, especially in the context of rapid urbanization, aging populations, global climate change and massive growth of information and knowledge . This implies that leaders will need to think ahead and maintain a transformational perspective in order to indentify and adapt to change quickly.
According to general view, leadership is the behavior or trait of a leader who leads a people, a group of people or even an organization. On the other hand, some people think that leadership is the best and only way to improve their social, professional and personal life . There are several types of leadership, of which the most effective are:
- Transactional Leadership- This type of leadership highlights the creation and clarification of providing rewards and contingencies to the juniors. Transactional leaders get themselves involved in exchanging interactions with his juniors by assigning and tactically awarding rewards in return for achieving the goals successfully. This type of leadership is basically constructed on a balanced exchange of association between the leader and his subordinate .
- Transformational Leadership-The leaders who follow the method of transformational leadership leads his subordinates by stimulating the inner sense and power and inspiring them. These types of leaders generally generate extremely fascinating and encouraging ideas that helps to increase the performance. Transformational leaders apply attitudes such as magnetism and knowledgeable motivation to encourage performance of juniors that enhance their performance far better than what is expected. Transformational leaders create a dream for himself and his subordinates and inspire the followers to do their best for achieving this dream. They generally encourage the followers also to experiment the current situation to dedicate completely to chase that dream and goal .
- Empowering Leadership: this type of leadership signifies an important model shift and gives emphasis to the self-influence of the followers rather than outward and influences that are top-down. Leaders who make use of empowering behaviors have confidence in the fact that followers are a significant basis of insight and way. The leaders following empowering leadership highlight self-control, self-influence and self-management. If empowering leadership is followed perfectly, then it helps to produce effective self-leader followers, who in turn gets involved in evolving activities and specialized thought processes that is generally used by us to manipulate our own behavior .
- Organizational Leadership: Basically organizational leadership is an individual behavior of a leader that is unrestricted, not directly or clearly acknowledged by the popular and recognized reward system yet that in overall stimulates the enhanced productivity of the organization .
The concept of leadership today has significantly shifted away from a more dictatorial style towards a more inclusive and influential approach. This has led to development of further varied styles of leadership such as charismatic leadership and pseudo-transformational leadership . While the definitions of leadership keep evolving based on the increasingly diversified needs of organizations, the impact of leadership on the effective running and optimal performance of organizations is also a highly discussed topic.
The role of leaders within organizations has evolved in tandem with historical shifts in markets and economies. Over 500 years ago, businesses were predominantly sole proprietorships, functioning in limited geographies and having a small scope for diversification. However, the dawn of the Industrial Revolution lead to global transformation in how trade and commerce were conducted, thereby changing the needs of organization and, hence, the role of leaders changed too. Today, globalization has led to a similar shift in how organizations functions across the world. As a result, leadership today is attributed with a different set of characteristics than it was at the beginning of the 20th century .
According to Daft, the key attributes of traditional leadership were: a) heroism, b) self-interest, c) monotony, d) rivalry, e) control, and f) consistency, while the new reality of leadership is attributed with: a) humility, b) strong ethical foundation, c) diversity, d) partnerships, e) empowerment, and f) management of change . This new paradigm is better suited to address modern day challenges where the events in a foreign nation, whether natural disasters, political upheavals, economic crisis or terror attacks, impact the global supply chain and operations of a multinational company.
How Leaders Influence Organizational Culture
Leaders helm the organization in the sense that they provide concrete direction to every aspect of organizational culture and performance. Based on the leadership style being followed, the organizational performance will also vary. Leaders have been known to generate a specific kind of organizational culture that in turn influences organizational performance . Leaders of an organization never get an opportunity and luxury of scheduling and planning in terms of one perspective and one sector. In fact, the sector that an organization operates in can define its unique leadership requirements. Leadership is a simple both-sided commitment and association between the leaders and his employees to accomplish a common aim of the organization. This commitment stimulates leaders to take control of their employees’ behavior, in the same time controlling their employees’ insights also. This creates an expectation of suitable behavior that becomes deep-rooted in the organizational culture in long-term .
In several situations, efficient leaders retain both, a worry about whether the task will be successful as well as creating an individual rapport with the employees. This is because there is a comparative direct linking between employees, their efficiency, and the organization’s production, it is vital for all the leaders of all the organizations to sustain a positive work culture to make best use of the efficiency of the employees and enhance their energies to reach organizational supreme output .
The leadership style of the CEO, Managing Director or Chairman often dictates the overall approach that an organization takes towards each of its departments including operations, human resources, sales and marketing, and administration. When the right leadership style is applied to the right sector, it can work wonders for an organization’s culture. For example, Apple was languishing under the stress from competitors such as Microsoft and was not being able to capitalize on the market potential of its products. As soon as he became the CEO of Apple, Steve Jobs prepared a list of weaknesses and strengths he and the corporation possessed on a scrap of paper. A charismatic leader, Jobs was an expert at scoping out opportunities. He was never hesitant to spend money for the sake of development. He had high hopes for innovative ideas . A big believer in developing “right” electronics, Jobs was a master at convincing people that Apple products were worth purchasing. He was a facilitator and a networker rolled into one and he managed to get the members of his staff involved in a single project. He developed leaders out of his workers and enabled them to manage without his assistance. Despite the fact that he was a hard man to work with, his employees remain completely devoted to him since he actually cared about them. And since he complemented his autocracy with his notorious charisma, he was able to make his workers believe and respect his vision. . Under Jobs’ leadership, Apple transformed into one of the industry leaders in the cell phone and mobile devices market which is seen as the epitome of quality much desired by consumers .
Traditional approach to leadership impact on organizations was measured purely in terms of the profits generated under a certain leader. However, the 1970s onwards, as corporations grew larger and globalization set in, leadership impact on organizational culture and efficiency began to gain predominance on measures of organizational performance . While strategic planning is focused in an upward curve, observing and making sure how strategies get hooked up with corporate targets and strategies, strategic thinking is completely different. It is downwardly attentive, looking to make sure that sense and motivation are spread all over the organization. It helps to develop and meet the exact needs of the organization and to fulfill the ultimate target and goal to increase revenue. To say in general terms, strategic planning in a broader sense is further related to the work of classical management. On the other hand strategic thinking is highly linked to the work of organizational leadership .
Leadership has the power to make or break a company. Often, in cases where companies have risen to great heights or even when companies have suddenly crashed, it was found that it was the direct result of poor leadership. The Enron collapsed will probably remain one of the most shocking and extensively studied corporate failures in the history of the business world. Enron had set an ambitious target of becoming the world’s largest company and it had held the capacity to fulfill this objective. However, its sudden collapse revealed major lapses in management and corporate governance, especially in the areas of accounting, communications, business ethics, leadership, and organizational structure. Numerous studies have been conducted about what caused the fall of one of the largest energy companies in the world – and every one of them relates it to unethical leadership . On the other hand, W. L. Gore & Associates has consistently adhered to its high standards of team work, empowerment, and shared vision guided by three core values established by Bill Gore – Commitment, Freedom and Fairness. Despite its flat organizational structure, the company has regularly been among the best employers in the USA and ranks among the top 200 private companies in the country .
Leadership Approaches towards Healthy Work Cultures
Employees are more likely to give their work their best when they are inspired to do so by their leader. Leaders must be close enough to relate to others, but far enough ahead to motivate them . The following points are the essentials of employee welfare:
- Talent Development: Every employee has talents and would like to develop it in order to progress. Understanding the individual, to identify the strengths and needs of the individual are vital for the leader in order to be most effective with the person.
- Understanding Employees: Successful leadership in addition to knowing the membership and its identity must also know the group’s expectations and what it sees as its obligations .
- Empowerment: Subordinates feel the need to exercise authority within their own field, to take decisions on their own and execute them. However, they need to be given the power to do so by their leader. Only secure leaders give power to others .
- Multicultural Orientation: Considering the globalized nature of today’s corporate world, it is important for a leader to be culturally aware about the people he or she interacts with and practice a degree of ethnic sensitivity.
- Work Environment Design: Employee welfare would also entail designing a comfortable, efficient, safe and healthy work environment.
- Team Building: Team work and interdepartmental cooperation is vital for the smooth functioning of any organization. A good leader build teams and keeps them motivated towards achieving organizational goals.
A multicultural leader is adept at understanding the influence that culture has on behaviour. People from different cultures think differently and have varied approaches towards authority and execution of tasks. By understanding and respecting the characteristics imbibed in an individual by his culture, the leader can more effectively manage inter-personal work relationships and drive his subordinates towards higher performance levels. Similarly, a person in charge of business development and driving sales needs to understand how culture affects the choices of buyers as well as suppliers from the host country. Understanding what principles and values drive these individuals while conducting business enables the executive to make a stronger case for the organization and drive business by influencing the decisions of the stakeholders.
Management decisions and business strategies are based on a set of values and mission that an organization aims to fulfil through its operations. The methods and processes it bases its functions on are directly linked to this set of values. Hence, the efficiency with which an organization achieves its mission is also directly related to its values. International business needs to integrate multicultural ethics into its core values in order to capitalize its operations on foreign shores. Its policies pertaining to trade, operations, sales, and human resources all need to factor in the impact that culture has on their individual effectiveness.
In the modern day, globalized nature of organizations, various styles of leadership can prove to be effectual in not only providing the right direction to the company but also driving performance. Leadership is a constantly changing and evolving concept in the modern organizations. However, its impact on organizational performance – positive or negative – is indisputable. Leaders are the true drivers of organizational excellence.
Bennis, Warren. On Becoming a Leader. Philadelphia: Perseus Book Group, 2009.
Christie, Amy, Julian Barling and Nick Turner. "Pseudi-Transformational Leadership: Model Specification and Outcomes." Journal of Applied Social Psychology 41.12 (2011): 2943-2984.
Curtis, Bill, William E. Hefley and Sally A. Miller. People Capability Maturity Model (P-CMM) Version 2.0. Hanscom: SEI Joint Proogram Office, 2001.
Daft, Richard L. The Ladership Experience. 5th. Mason, OH: Thomson South-Western, 2011.
Dillard, Jesse, Rodney Rogers and Kristi Yuthas. "Organizational Change: In search of the golden mean." Journal of Accounting and Organizational Change 7.1 (2011): 5-32.
Fairholm, Matthew R. "Leadership and Organizational Strategy." The Innovation Journal: The Public Sector Innovation Journal 14.1 (2009).
Hammel, Gary. W.L. Gore: Lessons from a Management Revolutionary. 10 March 2010. 10 December 2013 <http://blogs.wsj.com/management/2010/03/18/wl-gore-lessons-from-a-management-revolutionary/>.
Lieberson, Stanley and James F. O'Connor. "Leadership and organizational performance: A study of large corporations." American Sociological Review 37.2 (1972): 117-130.
Loke, J. Chiok Foong. "Leadership behaviours: effects on job satisfaction, productivity and organizational commitment." Journal of Nursing Management 9 (2001): 191-204.
Maxwell, John C. The 21 Irrefutable Laws of Leadership. Tennessee: Thomas Nelson, Inc., 1998.
—. The Power of Leadership. Colorado: Honor Books, 2007.
McNulty, Eric J. and Kelvin Thompson. "Four Pillars of the New Reality and Their Implications for Leadership." 2010. RicherEarth. MontaRosa. 10 December 2013 <http://richerearth.com/wp-content/uploads/2010/12/Pillar-Trends-and-Leadership.pdf>.
Northhuose, P. Leadership: Theory and Practice. 6th. Thousand Oaks: Sage Publications, 2013.
Ogbonna, Emmanuel and Lloyd C. Harris. "Leadership style, organizational culture and performance: empirical evidence from UK companies." International Journal of Human Resource Management 11.4 (2000): 766-788.
Skinner, Rulon D. 22 Leadership Principles. Utah: Horizon Publishers & Distibutors, Inc., 1992.
Stewart, Neville A. Leadership - A Reflection. Victoria: Trafford Publishing, 2010.
Weber, M. The theory of social and economic organization. New York: The Free Press, 1947.
Young, Jeffery. Icon Steve Jobs: The Greatest Second Act in the History of Business. New York: John Wiley & Sons Inc., 2005.
Yun, Seokhwa, Jonathan Cox and Henry P. Sims Jr. "Leadership and Teamwork: The Effects of Leadership and Job Satisfaction on Team Citizenship." International Journal of Leadership Studies 2.3 (2007): 171-193.
Yun, Won-joo and Frank Mulhern. "Leadership and the Performance of People in Organizations: Enriching Employees and Connecting People." 2009.