Relationship between Leadership and Organizational Success - Coursework Example

Heading: Relationship betweenLeadership and organizational success Your name: Course name: Professors’ name: Date According to Northouse (2010, p.45) organizational effectiveness is the overall performance of the organization in achieving its intended outcome such as profitability, sound working environment, creativity and corporate social responsibility. This is a holistic view of organizational effectiveness; the rationale for this assertion is because the functions of an organiation are not limited to gaining profits and pleasing stakeholders but also being responsible as an organizatin by factoring in the community and encauraging innovation and creativity. Effective leaders need to ensure that organization achieve these outlined objectives (Berman, 2008, October 28). More so, sustainability is fostered by ensuring that all cumulative organizational goals are achieved. The performance of an organization depends of the efficiency of the human capital that has been invested in the company. According to Bedian (2007, p.6) the human resource of an organization is the most important resource at its disposal. Its performance is therefore essential for the success of the company. The human resource is managed by organization's leadership; this means that the leadership is vital for the success of the company in achieving its objectives. Leadership provides the direction of the company and also assigns roles and responsibilities to the existing team. Leaders are therefore important not only in achieving organizational objectives but in the daily running of the organization. The organizationl culture, attitude and the work rate is determined by the leadership style employed (Johnson, 2003). Notably, there are good and bad leaders, this depends on organizational setting and the leaders traits such as moral principles, ethics, values, competency, skills and knowledge. An effective leadership will optimized these traits when needed the most to achieve organizational goals and a bad leader will succumb especially to moral and ethical dilemmas that may thwart the performance of the organization. As an example, autocratic leadership discourages input and employee’s resistance while democratic and Laissez-faire encourage team input, creativity and individual participation in the process of achieving organizational goals. The rationale for this assertion is because autocratic leadership style dictates the team by making decisions without informing them, this in turn attracts less involvement in the process as employees naturally withdraw from the process. Conversely Democratic and Laissez-faire form of leadership foster employee participation because the leadership takes into consideration the contributions of employees in the decision making process. In democratic style, the leadership and the employees are involved while In Laissez-faire leadership style, the employees work and make decisions without leadership involvement. Laissez-faire is normally effective in situation where employees are highly capable and motivated (Hajdin, 2005, p.259). In the modern day business world, there are many leaders who have inspired their organizations to achieve unprecedented organizational effectiveness through democratic leadership and other effective leadership styles. The founder and the former CEO of Wal-Mart, the late Sam Walton revolutionized the business world as a leader not only by being proactive and using new systems of inventory control and management but he also became the first CEO to offer profits made by the company to its employees. He developed an effective organizational culture that saw Wal-Mart develop from one retailing outlet to the largest retailing outlets in the world. This is a good example of how effective leadership can transform an organization to achieve its visions and missions. Another example is the Southwest airline, the company handled the 9/11 terrorist attack by demonstrating its focus on customers. Under the leadership of James Parker, the airline opted to take its customers to movies and bowling instead of sitting and waiting when the airlines across the U.S. had were stranded. More so, while many airlines were cutting jobs after the attack which damaged the industry, Southwest acted against the norm by announcing that the company would keep its employees and even started a $179 million profit sharing with its employees. In the long run, Southwest was able to handle the crisis better than other airlines in the industry because of the well-developed business principles inspired by its CEO James Parker (Schyns, & Meindl, 2005, p.234). According to Barron & Buettner (2009) there are a number of organizational theories of leadership; the most common examples of these are behavioral theories and contingency theories. Behavioral theory essentially focus on how leaders behave, as an example leaders can dictate what needs to be accomplished and expect cooperation while others involve their teams in the process of decision making in order to encourage them to accept the task and support it to its conclusion. Essentially, leadership behavior is tied to the type of leader an individual is, if the leader is autocratic, then this type of leader will dictate issues and expect cooperation from the team (Stanley, Meyer & Topolnytsky, 2005, p.429 & Winkler, 2010). If the leader is democratic, then this leader will provide an allowance for the team to contribute to the process. In this case, this type of leader will expect contribution and cooperation from the team as a result of involving them in the decision making process (Jones, 2009, January 7). Laissez-faire leadership will actually delegate the responsibility to the team and expect the outcome. This leadership type is common in areas where the team is highly capable, competent and has the passion to complete the task given (Johnson, 2007). In the modern day business world, autocratic leadership is less popular because of the market condition. Companies that survive hard economic and market tides base their resilience on the motivational levels of the employees. If the leadership is therefore not strong, the company is likely to fall in times of economic downtime (Hackman, & Johnson, 2009). A good example of behavioral leadership demonstrated in the business world is through the late Steve Jobs the founder and the former CEO of Apple Inc. Steve’s behavior inspired the smartest engineers in the world to work on unique and quality products ranging from PCs and portable devices such as iPhones and iPads. Organizational effectiveness is evidently boosted by the leadership in place. Contingency theory of leadership focuses mainly on particular variables related to the environment which determines the leadership style best suited for the current situation. This theory therefore outlines that no leadership style is best suited in all the situations. Success mainly depends on a number of variables including leadership qualities and styles that are employed in a given situation. In essence, contingency theory states that leadership is situation dependent and hence leader’s reaction in different situation varies (Gill, 2011, p.23). Notably, leadership also depends on the personal values, competencies and skills. This also contributes the possible actions that a leader is likely to take in a given situation. In the modern world, there are examples of good and bad actions demonstrated by leaders in their positions at particular times or situations. Mark Hurd, the former Hewlett Packard CEO submitted false expense reports concerning his relationship with a contractor when it was demanded (Labaton, 2009, June 11). This in turn led to his resignation as the expense report shortcomings were uncovered. This is an example of a situation that demanded personal values and competency but as a result of the pressure, Mark succumbs to illegitimate practices as a leader. Conversely, Bill Gates, the founder and the former CEO of Microsoft inspired his team to product products that address the need of the people for the past four decades. He acted wisely to keep Apple at bay when the competition for PC mastery was growing and as a result, Microsoft is one of the most successful companies in the modern world (Schrag, 2001, p.41). Bills Gates has also clearly demonstrated the holistic effectiveness of the organization through philanthropic projects which gives back to the community and improving the organization’s performance. As demonstrated, organizational effectiveness is a holistic performance of an organization not only to please its stakeholders but also the community to CSR. An effective organization is inspired by the leadership in place. If the leadership is poor and incompetent, then the organization will not achieve its organizational objectives. An effective leader will ensure that the organization achieves is goals. Behavioral and contingency theories discussed shade more light on the concept of organizational effectiveness. Behavioral theory focuses on how a leader behaves in managing the team, as noted a leadership that ensures employee involvement succeeds more than a leadership that locks out employee’s efforts. The leadership in place is therefore paramount to the performance of the organization. On the other hand, contingency theory focuses on how a leader acts in a given situation; it notes that the leader’s actions vary with situations and hence predicting that the leader’s behavior will vary depending on the situation. This is clearly depicted by Mark Hurd, the former Hewlett Packard CEO who presented false expense report in order to gain from the contract. This action ended his leadership in HP, from this example; good leadership depends on the personal values, principles, competency and skills. These traits of a leader can also predict how the leader is going to behave in a given situation especially in a situation where moral and ethical dilemma is evident. References Barron, J., & Buettner R. (2009). Scorn trails A. I. G. executives, even in their own driveways. The New York Times, p. A1. Bedian, A. G. (2007). Even if the tower is “ivory,” it isn’t “white”: Understanding the consequences of faculty cynicism. Academy of Management Learning and Education, 6, 9–32. Berman, D. K. (2008, October 28). The game: Post-Enron crackdown comes up woefully short. The Wall Street Journal, p. C2. Gill, R. (2011). Theory and Practice of Leadership. Melbourne: SAGE.pp.23-34. Hackman, M. Z., & Johnson, C. E. (2009). Leadership: A communication perspective (5th ed.). Prospect Heights, IL: Waveland, Ch. 5. Hajdin, M. (2005). Employee loyalty: An examination. Journal of Business Ethics, 59(3), pp. 259–280. Johnson, C. E. (2003). Enron’s ethical collapse: Lessons for leadership educators. Journal of Leadership Education, 2. Johnson, C. E. (2007). Ethics in the workplace: Tools and tactics for organizational transformation. Thousand Oaks, CA: SAGE, Ch. 7. Jones, A. (2009, January 7). Executives on trial: Enron’s Skilling to be resentenced. The Wall Street Journal, p. C7. Labaton, S. (2009, June 11). Treasury to set executives’ pay at 7 ailing firms. The New York Times, p. A1. Northouse, P.G. (2010). Leadership: Theory and Practice. New York, NY: SAGE. Pp.45-56. Schrag, B. (2001). The moral significance of employee loyalty. Business Ethics Quarterly, 11(3), 41–66. Schyns, B., & Meindl, J.R. (2005). Implicit Leadership Theories: Essays and Explorations. Sydney: IAP.pp.234-311. Stanley, D. J., Meyer, J. P., & Topolnytsky, L. (2005). Employee cynicism and resistance to organizational change. Journal of Business and Psychology, 19, 429–459. Winkler, I. (2010). Contemporary Leadership Theories: Enhancing the Understanding of the Complexity, Subjectivity and Dynamic of Leadership. Thousand Oaks: Springer.pp.12- 19. Read More