Leadership Analysis: Lenovo Group Limited - Case Study Example

Leadership Analysis Name Professor Institution Course Date Leadership Analysis Background Right through the history of any company, leaders have applied numerous different styles in leading a workforce. From the past approaches of Laissez-Faire and Autocratic to democratic, transformational and transactional leadership, leadership in leading technology companies has developed in recent years in these organizations to a more democratic style however there are still exist leaders who adhere to an outdated bossy style (Van et al, 2008). The rationale of this thesis is to establish trait theories, leadership theories, behavioral theory, contingency theory, followership, power games, authentic leadership, ethical leadership and change strategies that have shaped up Lenovo and Dell technology companies. Change have to take place if the cultures of technology organizations are to meet the needs of the 21st century and numerous issues influencing this change. An in-depth analysis of this report is going to compare the different the aspect of leadership that has brought success to these two different companies. It also focuses what kind of leadership style and structure the leaders need to embrace to become successful through their decision making strategies. Table of Contents Leadership Analysis 2 Background 2 Table of Contents 3 1.0 Introduction 4 2.0 Lenovo vs. Dell Inc 5 2.1 Trait theory 6 2.2 Transformational Leadership 7 2.3 Comparison of Leadership between Lenovo and Dell 9 3.0 Main factors enhancing and affecting the ability to create high performing teams 11 3.1 Cultural differences 11 3.2 Long organizational structure 13 3.3 Decision making process 14 5.0 How Leadership could be enhanced in both Lenovo and Dell 15 6.0 Conclusion 19 7.0 References 20 1.0 Introduction Lenovo Group Limited is positioned as largest computer manufacturer in China and at position four after Hewlett-Packard and Dell both of U.S. and Taiwan’s Acer. The company is a major producer of desktops, servers, laptops, handheld computers and mobile phones. Today, Lenovo leadership aims to make the company be the world market share leader in every of the market they serve. The question is; which leadership style do they have to drive this change for this company which is battling two different cultures, western and Chinese? On the other hand Dell Inc. is a multinational technology in America majoring in computer manufacturing. The company is ranked second after Hewlett-Packard (HP). The company employs more than 103,300 individuals worldwide. Lenovo Group prioritizes on knowledge management, and integrated particular knowledge management department to carry out planning and execution of knowledge management to the whole group. In 2004, Lenovo incorporated information management, flow management knowledge management departments (Lenovo, 2010). This incorporation enables knowledge management implementable, not simply more authoritative, but also realistic with feasible ways, since the flow management take control of establishing posts, choose on the flow and establishing the organization, and benefit from authoritativeness in the company. 2.0 Lenovo vs. Dell Inc Organizations across the world are extremely apprehensive with understanding, look for and building leadership. In spite of the organization type, leadership is recognized to play a crucial role in bringing high performing groups. This paper articulates and appraises the Lenovo China’s leadership from five ways. At the beginning, it introduces just the Lenovo China’s history. Then, explaining and analyzing approach strategies of peoples' organization in Lenovo which is the major point in the five elements of general approach, a system of performance rewarding, employees’ staffing, methods to enhance development staff and the assessment of performance of individuals. In specifically, the last three is discussed mostly. However, the evaluation system has a little concern. Next, it discusses the leadership of Lenovo China which is a combination of Chinese and western style. Just like Lenovo, Dell Inc is headed by then CEO Michael Dell who happens to be the founder of the computer technology company. Michael also heads the board of directors who are six in number. The difference being that Dell has several oversight committees who look into the affairs of the company such as auditing and reporting and approval of employee’s compensation among others. Dell Inc’s organizational structure is a decentralized and a functional structure. The organization supports various departments and functional elements to contribute concepts to promote the organizational strength. Source: Dell Inc (2013) Figure 1: Dell Inc organizational structure 2.1 Trait theory Van et al, (2008) argues that leadership trait theory practices demonstrate that the leadership characteristic can envisage leadership efficiency. The practices of a Lenovo group of companies demonstrates that this theory did was factor in the growth of leadership attributes and the forecast of performance. Lenovo is headed by a chief executive office, Yang Yuanqing who is a Chinese national. Therefore, it is easy to say that the CEO traits can be influenced by Chinese culture. This can be extended to various decisions he makes concerning the performance of the company. Intelligence, energy, the desire to lead, Ambition, honesty, self confidence, integrity and job pertinent knowledge are the six significant traits on which differentiate Yang Yuanqing from his dell counterpart. He attributed his sustained business prosperity to his sense of ethical and social responsibility. As the saying goes, “corporate culture is directly connected to the traits of the top leader” (Ling, 2006). On the other hand, Michael Dell holds a strong vision for the future by designing unique business’s values that enhances the company’s productivity. He always wants his organization to have an absolute speed in relation to the market; a solid commitment of customer service; a severe pledge of manufacturing high-quality, custom-made devices with low prices. Americans do not have cultures that affect the business therefore Dell is not held back by culture in making decisions. The management is socially motivated and look for close interaction whether in a group environment or with individual friends (Lenovo, 2010). . One example is that fact that Yang Yuanqing prefers employees by his name rather than title ‘sir’. This is viewed in Chinese culture as being humble. This is different in Dell where the leadership is viewed as a bit authoritative. In this situation leaders are seen as bosses therefore have to be referred by their titles i.e. “Sir or Dr”. Lenovo’s leadership takes credit for conscientiousness for achievement results (Ling, 2006). . 2.2 Transformational Leadership According to Dickie, (2005) Chinese have a strong transformational leadership spirit and a strong desire to do well in business. It could surprise some; however Lenovo is in fact very willing to adopt new ideas and strategies. Lenovo senior management is rather open-minded and interested in change. Nevertheless, it is critical to have trust from every level of the organization. This assists in increasing the degree of acquiring of new concepts of doing things. Lenovo is driven by the desire of embracing change, appreciating, open-mindedness, accepting cultural differences, and implementing global best practices. In both companies, it can be noted that both managements share transformational style of leadership. Traits of Dell make him a successful leader. Using transformational leadership style bestowed him with credibility, leading to trust and confidence from his employees. Keeping the pledges and fulfilling on the assurances was part of Dell's attributes. Dell ensures that the behaviors are consistent with the needs of the people being led He has a comprehensible thought of what other people value and what people can accomplish. According to Dell Inc (2012), the transformational leader like Michael Dell is concerned with factors “effecting revolutionary transformation in organizations and human operations”. As a transformational leader Michael Dell has the ability to motivate staff to exceed their individual aims for the extreme betterment of the organization. Michael Dell is also portrayed as a transformational leader who is an ethically responsible manager who concentrates on building the ethical maturity, values, and principles of his or her employees and growing their commitment to serve the welfare of others, the organization, and community further than self-interest. Michael Dell used his right as leader to give orders and his power to encourage assistants for obedience when he laid off his top European managers since they did not cut costs extremely enough (Calnan, 02010). On the other hand, Dell understood that followers make the leadership equation to balance. He knew that without them, there would no connection therefore leadership. 2.3 Comparison of Leadership between Lenovo and Dell One organization that strategizes leadership in a different way is Lenovo, whose origins are in China. The company actually battling the eastern and western cultures in whose markets they participate. To succeed in the continually changing technology sector, Lenovo experienced the challenge of creating a consistent leadership ethics in its youthful culture. Lenovo's response was to instigate a global manager improvement program in collaboration with Bridge, a transformational leadership with foundation in social free enterprise. One of the most normally discussed divergences between Eastern and western thoughts on leadership were the sense of balance between collectivism and individualism (Dickie, 2005). Eastern leaders frequently put a much stronger emphasis on the collectivity, showing a high degree of dedication to the leadership and the organization as a whole. Looking into Dell Inc, Michael Dell can be regarded as a charismatic leader who not only believes in the vision but skills. As the charismatic leader, his knowledge of all sections of the venture grew and he encouraged individuals by increasing their respect and loyalty. Throughout the leadership of Michael Dell, he thinks one is responsible for every event that they assume (Dell, 2012). To realize the visions and dream of the organization the company can be divided into three categories. They are based in Europe, USA and Asia. This enables specialization of task for easing in management. Information is directed from the top management and conveyed to subordinates. They are given an opportunity to communicate articulate their thoughts which are incorporated into the decisions made look into by the management. Michael believes that every “employee hold a right to be heard and each thought that adds to the advantages of the organization ought to be taken into consideration” (Spinelli, 2006). This shows a good correlation between the management and its workers. More so, he is convinced that failure of one employee should be linked to everyone in the team involved. Certainly, we could claim that the leadership in Dell is mostly participative, with attributes of authoritative (Van et al, 2008, p.261). However, they are appropriate in various situations and when suitable. Each leadership style embraced should add towards the prosperity of a business. We can simply claim one style. Nevertheless, the application of various styles at every circumstance portrays a situational leadership strategy. Such a style of leadership might have its advantages and disadvantages (Özsahin, Zehir & Acar, 2011, p.1552). Hersey-Blanchard leadership theory is critical in Dell Inc in that it allows individual management. Paul et al, (1996) contends that one on one rapport between the member of staff and the supervisor is vital. It makes sure communication is successfully applied during operation of the organization. It creates management of teamwork. A challenge is noticed early and addressed prior to unfavorable impacts. Dell believes that so along as a problem is noticed it must be tackled early enough. In addition, Western leaders concentrate more on empowerment of a person and are inclined to observe traditional Eastern leadership as less flexible but hierarchical. The difference between Lenovo and Dell is that Dell is a purely western company while Lenovo is an eastern company with of operations in the west. According Yeung, (2007), the differences in culture have brought more failures and challenges in these cross-border business relations than successes. While China is a communist state, US are rooted in capitalism. Lenovo's market share is declining following the merger with IBM, is that the number of the initial value chain of Lenovo Group, which well-suited with Chinese cultural values is in divergence with the west customers’ cultural values, and therefore injures the external communication of the company. In fact, after the merger with the IBM PC in 2004, while Lenovo incorporated IBM’s nine thousand employees globally with a US form western culture and the IBM business cultural identity, bringing some cultural conflicts (Yeung 2007, p.458). Lenovo’s leaders are committed to ensuring integration of core values into each aspect of their business, policies and practices in aspects of safety and quality of products, staff wellbeing, and ethical business behavior, social and environmental issues. The Chinese business culture is strongly controlled by Confucianism. 3.0 Main factors enhancing and affecting the ability to create high performing teams In each acquisition, the predictable question of who and what strategies will drive the organization to arise? The top leadership ranks may be a sign or a signal to the newly –constitute organization employees, on which former organization acquires more power over another. As observed with different companies that this is a politically sensitive issue, so there was need for Lenovo tread well in putting former IBM senior managers in top leadership places – a move which augurs well to ease any possible conflicts and anxiety among new union of employees (Ling, 2006). Therefore, the main factors which enhance and affect high performance among teams in both Lenovo and Dell could be cultural differences, organizational structure and decision making processes. 3.1 Cultural differences Lenovo acquisition of IBM bears a huge culture conflict because both of the Western and Eastern culture are totally diverse and Sandholm & Kuran (2008) advocates that usually joint venture would not work. Several others also come to terms that the organizational culture is a major concern for Lenovo that will amount to difficulty in running it and they still have the most major barriers, languages (Maney, 2005). The influential knowledge shows that such culture may be controlled and managed, however, in realism; organizations are incapable to deal with such complex culture. Lenovo did not transform or manage the culture at hand, therefore, staffs from IBM were willing to put up with the Chinese culture and embrace themselves to that new culture, conversely, staff from Lenovo also doing the similar thing by adjusting themselves to manage the IBM’s culture. Leaders from Lenovo or IBM did not take the influential knowledge to transform and deal with the culture gradually, they had taken the theoretical knowledge of putting up with the foreign culture and settle in to it, whilst they both can exchange from one another as well. This had demonstrated that in actual situation, influential knowledge do not work and theoretical knowledge will assist manager to appreciate the foreign culture and put up with it and embrace it. Decisions at Lenovo are influenced by Chinese culture because it has its roots in China. Cultural diversity makes it hard for the expatriates who worked at IBM (Orr & Xing, 2007). The expansion of the Dell in China has been incredible in past years, and China has become the company’s second-largest marketplace after the US. The growth is indication of the increasing significance of the Chinese market for sales including manufacturing. The Dell had sales of nearly $5 billion in second quarter of 2010 in China. The company penetration into china has been met with cultural difference between US market and Chinese market. Diversity is an unavoidable reality. The company also has also accommodates employees with different backgrounds, races, religions, ages, ethnicities, lifestyles and cultures the cultural differences between the west and east is however affecting the company sales and may as well affect its performance in few. Therefore, Dell will only recover its growth percentage when it stops concentrating on measuring profitability through delivery time ratios and unit sold and starts concentrating on what foreign markets anticipate in relation to their cultural differences. 3.2 Long organizational structure Organizational structure is a vital feature of in Dell Corporation and has a major impact on effectiveness and competence of the company. Dell has a long leadership structure meaning a long chain of command. With this form of structure, decisions are very slow to reach the concerned person. There may be a lot of uncertainty and conflict if there is vagueness concerning factors for instance the resources sharing by teams or a team, working in several at Dell. A crucial issue in operating with matrix structure as Dell does is misalignment of objectives. There is a likelihood of building of competition and conflict in purpose between the paradigms of matrix owing to the misaligned objective (Paul & Kennet & Dewey, 1996). The organizational structure adopted by the Dell leadership can also lead in internal complication. Some workers may turn out to be confused on who their supervisor is. For instance, an employee may receive different instructions relating to similar thing from different supervisors in various departments. According Sandholm & Kuran (2008) the dual power and communication challenges may result to division amongst managers and employees. For proper adoption of such kind of structure, power ought to be shared uniformly between the functional managers and the functional managers. Yet, power sharing is a fragile plan and thus, people believe that such an arrangement is difficult to maintain. Ineffective managing and miscommunication can lead to employee low morale and discontent. With this kind of long structure of Dell issues are prolonged causing the organization to undergo high employee turnover. It was a mistake for Dell to embrace this form of organizational structure because it costly to maintain. Normally, Dell's overhead cost generally increases on account of the need for dual management. The extra remunerations Dell must pay could harm its resources in the future and the struggle for scarce resources could lead to hostility in the organization and hamper production. However, matrix organizational structure may not be that bad because facilitates a faster reaction and adjustment to the competitive market by bringing the finest of both different structures, including structure for the weakness of decentralized and functional forms. Lenovo’s organization structure had been mostly functional when it was operational as single company. Following the acquisition of IBM, a long matrix structure was embraced comprising of two operations; Lenovo China and Lenovo International. This type of structure makes dual authority and thus tends to cause ambiguity and conflict in management therefore affecting performance. For appropriate adoption of such an organizational structure, it forces leaders to share power equally between the functional managers and product managers. 3.3 Decision making process Since the acquisition by IBM, Decision making process by Lenovo management has become difficult because they have to take into consideration the IBM programs. Orr & Xing (2007) state that a particular challenge is that Lenovo investments will damage rather than assist domestic employment, since state ownership and China’s trade policy might make its companies to obtain assets in a foreign country only to shift jobs and manufacture back home. This may affect IBM in particular. In an organization like Lenovo, organizational teams are always in place to carry out different projects; therefore bringing new people from IBM into the group will simply slow down the project progress. Another leadership decision which affects the performance is bringing new people from IBM. This action makes the current employees at Lenovo to fear for their job security thus lowering the morale of their work. This fear can negatively influence efficiency and might even led to staff leaving the organization to look for employment somewhere else. It is significant for Lenovo and its managers and HR personnel to determine this and offer chance for staff to know one another, to openly deal with issues, and to work collectively toward the building of a new culture that will combine the best of both companies. The influences that mergers and acquisitions bears on employment are less clear. Lenovo and IBM relations can be positive for domestic employment if the shareholder hires additional employees after the merger (Orr & Xing, 2007). But the effects may also be negative if the post-acquisition integration or reorganization leads to the downsizing of domestic employment or if the investor decides to take out valuable assets and close down local operations totally. As much as the decision to acquire IBM could look bad, the two companies are now marketing their products together. On the other hand acquisition and merger could help Lenovo in partnership brand marketing. The Dell’s decision to remain a sole company makes its decision making process fast and effective. Its fast decision nature has had it enjoying the uniqueness regarding high qualities for customer service and offering customers exactly what they want. Effective decision also makes team work very smooth and successful realization of the company’s goal. 5.0 How Leadership could be enhanced in both Lenovo and Dell Calnan (2010) contends that technology companies today are now using numerous different forms of marketing to drive and grow their business and brands forward. In the changing world of marketing of brand using the power of marketing partnerships or marketing alliances to get brand into new venues and channels is a critical marketing element to increases sales. As brand and corporate budgets are normally assessed, partnership product marketing strategies can expand ones business and obtain new clients and consumers in each channel of distribution. Therefore, in order to gain customers' confidence in product and services, Dell management must also have agreements with key partners in the Information Technology sector like Intel to compete strongly with its potential competitors. Effectiveness in its support by taking “is direct approach” like a major element to Dell has changed the manner customer in which opinions and it may be the right time to seed their campaigns and plans to draw consumers. Dell ought to keep on strengthening their competitive rank as the leader of computer systems who works online daily (Calnan, 2010). If Dell wants to increase their return on investment, they shave to carry on building customer relationships including vendor connections and contribution. This technique may certainly assist Dell to uphold its stable status and profit. The strength of partnership between lets say Dell and Intel, or Lenovo and IBM brings these different companies together as well as their brands to increases brand exposure and finally acquires new form of customers. When partnering, leaders involves every elements of marketing mix in the decisions and therefore influence these companies general marketing platform and message, advertising strategies as well packaging. For Dell and its partner to get partnership full potential and harvest all successes and results its leaders ought to make decisions that positions these companies of top of the marketing mix, offering an incremental value at every level. Therefore the partnership management decisions influences all the elements of marketing mix including product, place or distribution, price and promotions. When Dell leaders are deciding on the right marketing partner, they need to ensure that their partner’s brand delivers same qualities and attributes whilst increasing marketing exposure in a channel of distribution alternative-similarly building a balance and synergy in relations to these two different brands (Calnan, 2010). On Lenovo, The IBM’s PC acquisition boosted its production and sales ability by four times and to attain IBM’s wide global markets. However it also led to the creation of vast cross cultural problems for the organization, in the external and internal setting (Ling, 2006).With operations of IBM being taken care of largely by Anglo-American managers and its organizational culture shaped up by the outstandingly same cultures of the UK and the US, the parent corporation was called upon to successfully embrace to, and incorporate, a greatly different organization in relation to of organizational culture, markets and size. With organizational culture of IBM likely to be impacted by the cultural features of the US and the UK, it is expected that IBM’s PC services would be differentiated by far much more open and shared and less hierarchical arrangements, great horizontal and vertical communication and teamwork between staff, greater scope to workers to voice their views and take personal decisions, and more emphasis on direct and short term organizational performance. On cultural differences, the management should offer training on how to cope with cultural differences. Lenovo should also adopt an accommodating approach by making changes to the work plan of its worker in the Lenovo group so as to accommodate workers in IBM group. The major Western human resource management skills ought to be embraced to a Chinese organization, and some difference in the management approach may be required owing to cultural and national differences (Sandholm & Kuran, 2008, p. 211). In brief, successful leadership is the major cause of competitive edge for any form of organization. For Lenovo to do well after IBM acquisition the management should not neglect of possible dual power circumstances. In spite of everything, the chairman of the Lenovo is a Chinese, and in this make the case unique of acquisition, leadership changes will not only deal with the politicized challenges of the ‘acquired’ and ‘acquirer’. There is also a need to address bleak cultural backdrops between the ‘Westerners’ and ‘Chinese’ that present an issue of cultural diversity in leadership. Dell on its side should consider reducing the side of its organizational structure to increase the efficiency with which decision are made and affects the employees and teams. If the management changes or reduces an organization’s structure, it is aimed at long-term prosperity of the company in mind (Hill & Jones, 2004). It is irrefutable that culture is a crucial matter in the organization and will impacts the approaches of how organization carries out things; therefore Lenovo new managers has to learn this so as to fit within the culture more easily. Organizational specialists claim that cultural incorporation can be realized by increasing the cultural knowledge of the two organizations by means of collaborative work as well as training (Dickie, 2005). It is also vital to solve cultural differences immediately, realize the different elements of the various cultures, recognize their personal strengths and weaknesses, and attempt to build a distinctive organizational culture that bears most outstanding of both cultures. Dickie (2005), argues that Lenovo’s leadership approached the subject of cross cultural organization with caution and thought. Internal research was carried out with IBM’s PC division’s employees to discover gaps, including common understanding, in their insights of values, behaviors, structures and management practices. The Lenovo group, after such research and assessment of cultural matters, formed a cultural committee to support interaction between the two groups of employees (Orr & Xing, 2007). The company also intentionally decided against enforcing its current leadership style on the IBM section. It embraced a separation style, enabling IBM’s PC section in the UK, US, and other places, to maintain their own operations and cultures by maintaining it separate and autonomous from the leading group. Government regulations and Cultural atmosphere and should be put into consideration by Dell when carrying out global business more so in China. Interpersonal connections (Guanxi) between company and people of china will help the company a great deal when dealing with its diverse customers. Guanxi has been demonstrated most significant success while carrying out business in China and is taken as a basis of competitive advantage (Fan, 2004). The cultural differences underwent by Dell China comprise of guanxi, where in the US, business is rooted on common understanding, for instance mutually valuable price. Hence, Dell needs to put emphasis and bridge the gap in cultural differences between US and China in order to increase its sales in future in Chinese market (Connors, 2010). 6.0 Conclusion Organizations across the world are extremely concerned with knowing, looking for and building leadership. Leaders are experiencing greater problems than before because of the grown environmental difficulty and the changing platform of the organization. The current period not only needs to have a competitive advantage and constant productivity but also the upholding of ethical principles, fulfilling with civic obligations and making a secure and equitable work setting. Being in charge of the growth and implementation of tactical organizational decisions, leaders must acquire, build and set up organizational resources optimally so as to introduce the finest products and services in consideration of the stakeholders. 7.0 References Calnan, C. (2010). "Managing Michael Dell's multibillions", BizJournals. David, W. (2012). Learning to adapt and staying authentic. Retrieved 30th April 2013 http://www.hcli.org/hqasia/learning-to-adapt-and-staying-authentic/ Dell Inc. (2013). Dell: Organizational Structure. Retrieved 30th April 2013 http://www.theofficialboard.com/org-chart/dell Dickie, M. (2005), "China's High-Tech Hero". Chief Executive. Hill, Charles W. L., and Jones, Gareth R, (2004), “Strategic Management Theory: An Integrated Approach”, USA: Houghton Mifflin Company. Ling, Z. (2006). The Lenovo Affair. Singapore: John Wiley & Sons. Özsahin, M., Zehir, C. & Acar, A. (2011). Linking leadership style to firm performance: the mediating effect of the learning orientation, Procedia Social and Behavioral Sciences, 24, 1546–1559. Lenovo Group Limited (2010). Lenovo commitment to social responsibility. Retrieved 30th April 2013 http://www.lenovo.com/social_responsibility/us/en/ Orr, G. and Xing, J. (2007), “When Chinese companies go global: An interview with Lenovo´s Mary Ma”, McKinsey on Finance, 23, 18-22. Available on http://corporatefinance.mckinsey.com/knowledge/knowledgemanagement/mof.htm Paul, H., Kennet, H. and Dewey, E. (1996), “Management of Organizational Behavior: Utilizing Human Resources, 7th ed”. Upper Saddle River, N.J.: Prentice Hall. Sandholm, W. and Kuran, T. (2008). “Cultural Integration and its Discontents”, Review of Economic Studies, 75, 201-228. Spinelli, R. (2006). The Applicability of Bass's Model of Transformational, Transactional, and Laissez-Faire Leadership in the Hospital Administrative Environment, Hospital Topics, 84(2), 11-18. Retrieved January 22, 2010, from Academic Search Premier database. http://successfulbusinessleadership.ibc01.com/index.php/learn-from-the-best/michael-dell/ Van Eeden, R., Cilliers, F. & van Deventer, V. (2008). “Leadership styles and associated personality traits: Support for the conceptualisation of transactional and transformational leadership,” South African Journal of Psychology, 38(2), 253-267, from Academic Search Premier database. Yeung, H. (2007). Handbook of research on Asian business. Cheltenham: Edward Elgar Publishing Limited, Read More