Why Leadership Can Negatively Affect the Performance of an Organization - Case Study Example

Leadership Research Paper Name: Course: Code: Tutor: Date: Overview Organizations must be successful in an environment that is characterized by unpredictability and uncertainty due to constant political, technological, economic, social and changes. As a result, firms find themselves in dynamic situations that demand continuous adaptation. In such business environment, firms require an effective leadership to steer them through changes that are most likely to be problematic for the organization. Companies have to change their business prac­tices so as to be successful if not survive; they need more than mere incremental reforms to their strategy. Companies require a dynamic change to reinvent themselves. In this case, organizations must revamp their cultures so as to affect the necessary changes. Transformational leadership is all about renewing an organization; it is all about improving the organization in pursuit of a new vision that will revolutionize the culture of an organization According to Liu & Choi, (2009), transformational leadership is a type of leadership where connections among concerned parties are organized with a collective purpose in a way that motivates, transforms, and enhances the ethical aspirations and actions of followers. Transformational leadership is a style of leadership that brings about positive transformations on followers, and that accomplishes necessary changes through the “strategy and structure” of the organization. This leadership theory is characterized by various behavior patterns. For instance, in the transformational type of leadership, leaders use their charisma so as to gain respect as well trust of different stakeholders and to impart some sense of pride in them (DuFour, 2007). Charisma, on the other hand, brings about a sense of mission as well as shared vision needed for the transformation. The second characteristic is the ability of the leaders to inspire by using symbols in directing the efforts of followers; they express the important purpose of the process of transformation in a simple way, and communicate clearly the associated higher expectations. Thirdly, another major feature of transformational leadership is intellectual stimulation. A leader can inspire his followers intellectually by stressing creativity as well as rationality during the process of problem-solving. Lastly, transformational type of leadership provides personalized consideration where leaders treat employees individually by offering them special attention and when needed; they provide advice and coaching to employees (Burns, 2008) Closure of Toyota operation in Australian by 2017 With the current economic and market challenges facing Toyota Company in Australia, the company has majorly focused on maintaining the sustainability of its plant even as Holden and Ford both announced their intention to close down their vehicle production in Australia. Toyota’s approach was to continue with their transformation strategy that is aimed at streamlining their business model in ensuring that there is a sustainable and profitable future (DuFour, 2007). Both the management and employees joined up together in ascertaining opportunities and carry out initiatives that led the company to exceed its cost reduction targets for a succeeding year in a row. All these were achieved due to organizational leadership that inspired both the management and the employees. Announcement of Closure The declaration to stop car manufacturing by 2017 in Australia and changing to a distribution company required strong leadership skills that can communicate the message of change. The decision to close down by 2017 was not only as a result of any single factor but also driven by various external forces that includes the high costs of manufacturing that makes exports unviable, the unfavorable Australian dollar, and reduced economies of scale in car manufacturing and the local supplier base of the company (Dolan, 2004). As a result of these reasons, it was determined that it was no longer viable for the company to continue manufacturing cars in Australia. Other factors that necessitated the closure is that Australia is one of the most fragmented and open automotive markets globally therefore there is an increased competition due to present and future free trade agreements. The closure of manufacturing of vehicles in Australia will have some impacts on various sectors of the economy. The following are some of the sectors that will be adversely affected by the closure by 2017 Impact on stakeholders The management acknowledges that its decision to stop manufacturing by 2017 will have a major impact on stakeholders therefore it requires strong leadership skills. The focus of the organizational leadership is to work with the company’s suppliers and employees and offer full support government during the transition to a countrywide sales and supply company (Hackman, 2002). As the company prepares to the end of vehicle manufacturing in Australia, it has to plan for future of its employees and local suppliers. The company also has to guarantee the sustained manufacture of engines and high-quality vehicles for its local as well as foreign clients until the time they close down their manufacturing operations. Employees Nearly 2,500 employees who are involved directly in production may be affected by the closure of the plant by the end of 2017. It requires a strong leadership team to determine those functions and corporate roles that will be operational and where they will be situated. As a result of the announcement to stop manufacturing vehicles by the end of 2017, the company’s leadership has provided support services to its employees and we will do everything to makes sure that they reduce the impact of decision to close down Suppliers The Company has always treated its suppliers as partners and closely working with them in identifying and implementing opportunities so as to improve the productivity and efficiency of their operations. It will continue to work closely with its suppliers by assisting them during this period of transition. Government The organization’s leadership will work with government in determining how best to support the automotive industry with suppliers as the sector is in preparation of ending the vehicle production in Australia. Local communities Although the local communities will be adversely affected, the company will continue to get involved in local communities as it offers job opportunities to thousands of people both directly and indirectly through its extensive dealership network. The company is also involved in various community sponsorships and partnerships. While the company determines whether there will be any effect on its engagement approach, it will continue to offer a high level of support to the community even after changing to a sales and distribution company (Lewin, 2007). Transformational leadership and effective governance of an organization When there is a need for radical transformation of the operations of the board, then the perspective of transformational type of leadership is relevant to the Board Chair for the small period of time of attaining the change; and the style of leadership approach is of great importance to the role of the chair in the way he leads the board. From the onset, effective change governance saves all this and facilitates efficiency and speed in planning and implementation of change. As in the case of closure of car manufacturing in Australia, governance of change needs perfect definition of roles in change management: change process leader, change management team sponsor, project teams, initiative leads, and change consultants. Roles of change management should be having clear duties and means of connecting to the entire roles (Calhoun G. a., 2007). Each has to be organized in a manner that accelerates their capacity to lead and act in an organized way. All of them must agree on authority and level of decision making, the process, and decision style that best supports change. Transformational Boards provide an engagement framework for the leadership of the board aimed at helping boards to lead their organizations especially during the process of making a change. With the use of this effective and proven model, CEOs and boards closely work collectively in setting strategic direction, responsibilities, and outcomes, for the organization (Calhoun G, 2007). On the other hand, the audit committee has the particular function of determining anomalies and actively uncovering exemptions to conventional accounting and auditing practices. Observers regard it as a transformational person with behavior in line with their profession and experience and has a mission is aligned to that of the audit committee. Thus the structure factor of transactional and transformational leadership features, and the effect of some of the characteristics of leadership on organizational and individual performance, may partly be dependent on the particular characteristics of leaders, subordinates, and circumstances under study If all the above perspectives on leadership are considered, it can be seen that all of them brightens several parts of the board as its functioning, group dynamics, or power relations. Such theoretical associations between opinions of the board and the leadership must not be surprising, given the major role played by the board in the organization (Sergiovanni, 2010). Relationship between transformational leadership, job satisfaction and the performance of an organization According to Liu & Choi, (2009), a transformational leader will aid in promoting the work abilities of the employees, self-determination, organizational involvement, self-achievement, and delegation. If both leaders and followers can trust and help one other, it will produce a higher recognition of the goals and values of the organization. The followers will put much of their efforts into the organization and look forward to maintaining a good relationship with one other. Therefore, job satisfaction can be enhanced by transformational leadership. Transformational leaders will lead the followers and motivate them to achieve group performance in their interests. Therefore, followers will do their work better than their expectation, and the level of satisfaction will also be increased. Transformational leadership in most of the organization is related positively to the job satisfaction of the followers. It has been found that performance, transformational leadership and job satisfaction are correlated (Burns, 2009). Transformational leaders pay a lot of attention in taking care and respecting their followers. So, there will be an increase of performance and job satisfaction of followers in their place of work. When transformational leaders support the achievement and involvement of the employees, job organizational identification and satisfaction will also be increased. Therefore, both the employees and the entire organization will work hand in hand thus uplifting job efficiency. Moreover, organizational leadership and culture influences employee’s job satisfaction, where the job satisfaction acts as a link between leadership and organizational culture in influencing organizational performance (Wagner, 2011). Organizational leadership and change In every business setup, there exist challenges when effecting change, like opposition or lack of knowledge on the current rules and organizational procedures. Consultation with individual personnel in the identification of possible problems and issues is imperative in removing barriers, and this does not need to be overemphasized. Besides, sharing upon agreed measures and forming some sense of earnestness for the team to continue expanding will increase the momentum (Dolan, 2004). The last stage of implementation of change is formalizing the change. Team managers should ensure that they conclude a plan to implement changes that have happened to the team. They must choose team metrics to quantify success and reexamine frequently. Change becomes easy to adopt for all the stakeholders especially if those affected are involved in the process of implementation. Conclusion Leadership can negatively affect the performance of an organization. Those leaders who are too obsessed or who are dominant with achieving targets may overlook numerous details in the business organization. Employees and managers may also not be willing to support dominant or very critical leaders with achieving goals and objectives. Dominating leadership creates hard business relationships. Other companies and business owners evade dominant leaders who consistently request financial assistances (Calhoun E. F., 2004). Companies have to change their business prac­tices so as to be successful if not survive; they need more than mere incremental reforms to their strategy. Companies require a dynamic change to reinvent themselves, therefore, this case, organizations must revamp their cultures so as to affect the necessary changes. Transformational leadership is all about renewing an organization; it is all about improving the organization in pursuit of a new vision that will revolutionize the culture of an organization (Dolan, 2004) References Burns, J. M. (2008). Leadership. New York: : Harper and Row. Burns, J. M. (2009). Two excerpts fromL eadershi. Educational Leadership, 36. Calhoun, E. F. (2004). How to Use Action Research in the Self-Renewing School. NY: Cengage. Calhoun, G. a. (2007). Self-concept and academic achievement of educable retarded and emotionally disturbed pupils. E xceptional Children, 256-306. Dolan, W. P. (2004). Restructuring Our Organizations. A Primer on Systemic Change. DuFour, R. a. (2007). Fulfilling The Promise of Excellence. New York: J. L. Wilkerson Publishing Co. Hackman, J. R. (2002). Leading Teams: Setting the Stage for Great Performances. NY: Cengage Learning. Kanter, R. M. (2003). The Change Masters. New York: Simon and Schuster. Lewin, K. (2007). Group decisions and social change. New York: Henry Holt. Liu, S., & Choi, T. (2009). Transformational Leadership. Leadership Journal, 4(13), 527-540. Sergiovanni, T. J. (2002). Moral Leadership. San Francisco: Jossey-Bass. Sergiovanni, T. J. (2010). Adding value to leadership gets extraordinary results. Chicago: Cengage Learning. Wagner, M. (2011). Transformational Leadership. Menlo Park CA: SRI International. Read More