Question No. 3 - MMPC-001 - Management Functions and Organisational Processes

Solutions to Assignments 

MMPC -001 - Management Functions and Organisational Processes

Question No. 3 - Discuss and describe different leadership styles and their relevance in the present scenario of organisations.  

A leader is a person who influences a group of people towards the achievement of a goal while leadership is the art of motivating a group of people to act towards achieving a common goal. Different leadership styles will result in different impact to organization. The leader has to choose the most effective approach of leadership style depending on situation because leadership style is crucial for a team success. By understanding these leadership styles and their impact, everyone can become a more flexible and better leader.

1. Transactional Leadership

Transactional leadership is a term used to classify a group of leadership theories that inquire the interactions between leaders and followers. This style of leadership starts with the premise that team members agree to obey their leader totally when they take a job on. The “transaction” is usually that the organization pays the team members, in return for their effort and compliance. As such, the leader has the right to “punish” team members if their work doesn’t meet the pre-determined standard. Team members can do little to improve their job satisfaction under transactional leadership. The leader could give team members some control of their income/reward by using incentives that encourage even higher standards or greater productivity. Alternatively a transactional leader could practice “management by exception”, whereby, rather than rewarding better work, he or she would take corrective action if the required standards were not met.

Transactional leadership is really just a way of managing rather a true leadership style, as the focus is on short-term tasks. It has serious limitations for knowledge-based or creative work, but remains a common style in many organizations.

2. Autocratic Leadership

Under the autocratic leadership styles, all decision-making powers are centralized in the leader as shown such leaders are dictators. Autocratic leadership is an extreme form of transactional leadership, where a leader exerts high levels of power over his or her employees or team members. People within the team are given few opportunities for making suggestions, even if these would be in the team’s or organization’s interest.

Autocratic leadership style  is often considered the classical approach. It is one in which the manager retains as much power and decision-making authority as possible. The manager does not consult employees, nor are they allowed to give any input. Employees are expected to obey orders without receiving any explanations. The motivation environment is produced by creating a structured set of rewards and punishments. Autocratic leaders make decisions without consulting their teams. This is considered appropriate when decisions genuinely need to be taken quickly, when there’s no need for input, and when team agreement isn’t necessary for a successful outcome.

Many people resent being treated like this. Because of this, autocratic leadership often leads to high levels of absenteeism and staff turnover. Also, the team’s output does not benefit from the creativity and experience of all team members, so many of the benefits of teamwork are lost.

For some routine and unskilled jobs, however, this style can remain effective, where the advantages of control outweigh the disadvantages.

3. Transformational Leadership

Transformational leadership is a leadership style that is defined as leadership that creates valuable and positive change in the followers. A transformational leader focuses on “transforming” others to help each other, to look out for each other, to be encouraging and harmonious, and to look out for the organization as a whole. In this leadership, the leader enhances the motivation, morale and performance of his follower group. A person with this leadership style is a true leader who inspires his or her team with a shared vision of the future. Transformational leaders are highly visible, and spend a lot of time communicating. They don’t necessarily lead from the front, as they tend to delegate responsibility amongst their teams. While their enthusiasm is often infectious, they can need to be supported by “detail people”.

In many organizations, both transactional and transformational leadership are needed. The transactional leaders (or managers) ensure that routine work is done reliably, while the transformational leaders look after initiatives that add new value.

4. Servant Leadership

This term, coined by Robert Greenleaf in the 1970s, describes a leader who is often not formally recognized as such. When someone, at any level within an organization, leads simply by virtue of meeting the needs of his or her team, he or she is described as a “servant leader”. Servant Leadership’s focus was on the leader as a servant, with his or her key role being in developing, enabling and supporting team members, helping them fully develop their potential and deliver their best. In many ways, servant leadership is a form of democratic leadership, as the whole team tends to be involved in decision-making.

Supporters of the servant leadership model suggest it is an important way ahead in a world where values are increasingly important, and in which servant leaders achieve power on the basis of their values and ideals. Others believe that in competitive leadership situations, people practicing servant leadership can find themselves “left behind” by leaders using other leadership styles. Followers may like the idea of servant leadership so there’s something immediately attractive about the idea of having a boss who’s a servant leader. People without responsibility for results may like it for its obviously democratic and consensual approach.

5. Charismatic Leadership

The Charismatic Leader and the Transformational Leader can have many similarities, in that the Transformational Leader may well be charismatic. Their main difference is in their basic focus. Whereas the Transformational Leader has a basic focus of transforming the organization and, quite possibly, their followers, the Charismatic Leader may not want to change anything. A charismatic leadership style can appear similar to a transformational leadership style, in that the leader injects huge doses of enthusiasm into his or her team, and is very energetic in driving others forward.

However, charismatic leaders can tend to believe more in themselves than in their teams. This can create a risk that a project, or even an entire organization, might collapse if the leader were to leave because in the eyes of their followers, success is tied up with the presence of the charismatic leader. As such, charismatic leadership carries great responsibility, and needs long-term commitment from the leader.

6. Democratic Leadership or Participative Leadership

Although a democratic leader will make the final decision, he or she invites other members of the team to contribute to the decision-making process. This not only increases job satisfaction by involving employees or team members in what’s going on, but it also helps to develop people’s skills. Employees and team members feel in control of their own destiny, and so are motivated to work hard by more than just a financial reward. Democratic leadership can produce high quantity work for long periods of time. Many employees like the trust they receive and respond with cooperation, team spirit, and high morale.

As participation takes time, this style can lead to things happening more slowly than an autocratic approach, but often the end result is better. It can be most suitable where team working is essential, and where quality is more important than speed to market or productivity.

7. Laissez-Faire Leadership

The laissez-faire leadership style is also known as the “hands-off ¨ style. It is one in which the manager provides little or no direction and gives employees as much freedom as possible. All authority or power is given to the employees and they must determine goals, make decisions, and resolve problems on their own.

This French phrase means “leave it be” and is used to describe a leader who leaves his or her colleagues to get on with their work. It can be effective if the leader monitors what is being achieved and communicates this back to his or her team regularly. Most often, laissez-faire leadership works for teams in which the individuals are very experienced and skilled self-starters. Unfortunately, it can also refer to situations where managers are not exerting sufficient control. The advantage of this kind of style is positive only in the case when the employees are very responsible and in case of creative jobs where a person is guided by his own aspirations. In these cases, less direction is required so this style can be good. This style has more disadvantages because usually it is the result of the lack of interest of the leader that leads to his adopting this style. It proves poor management and makes the employees lose their sense of direction and focus. The disinterest of the management and leadership causes the employees to become less interested in their job and their dissatisfaction increases.

8. Bureaucratic Leadership

This is style of leadership that emphasizes procedures and historical methods regardless of their usefulness in changing environments. Bureaucratic leaders attempt to solve problems by adding layers of control, and their power comes from controlling the flow of information. Bureaucratic leaders work “by the book”, ensuring that their staff follow procedures exactly. This is a very appropriate style for work involving serious safety risks such as working with machinery, with toxic substances, at heights or where large sums of money are involved such as cash-handling.

In other situations, the inflexibility and high levels of control exerted can demoralize staff, and can diminish the organization’s ability to react to changing external circumstances.

                                                The Importance of Leadership Style

A personality style acts as a lens that shapes how a person sees the world and how the world sees them. It plays a significant role in the job they have and the way they communicate. Having an awareness of your personality style can allow you to communicate better, assess others' needs, and forge productive relationships.

There are four types of leadership styles. Some leaders can encompass more than one type – and people can also have varying degrees of assertiveness and expressiveness within the styles as well. The four types of leadership styles are:

- Direct – Direct leaders have high assertiveness and low expressiveness. They lead by taking charge.

- Spirited – Spirited leaders have high assertiveness and high expressiveness. They lead by inspiring.

- Considerate – Considerate leaders have low assertiveness and high expressiveness. They lead by building group harmony.

- Systematic – Systematic leaders have low assertiveness and low expressiveness. They lead by planning carefully.

Personality Style and Leadership

A leader’s ability to first identify these differences and then quickly adapt to address individual needs can be the difference between leadership success and failure. How does personality style relate to effective leadership? Personality style is based on assertiveness and expressiveness. Assertiveness is the degree of effort someone makes to influence others. Expressiveness is the degree of effort people put forth when they reveal their emotions to others. When you combine assertiveness and expressiveness, four distinct and different personality styles emerge: Direct, Spirited, Considerate, and Systematic. Hundreds of studies have tried to identify the primary source of effective leadership. Successful and well-rounded leaders generally exhibit four areas of focus, and who better than U.S. presidents to represent successful leaders?

Envisioning the Future = Direct

Leaders possessing this strength influence others by taking risks, and demanding action. Thomas Jefferson was a Direct leader who possessed a high level of assertiveness and low expressiveness. These leaders like to cut to the chase and tell other people “how it is.” Direct leaders possess an exceptional degree of confidence and they are not afraid to take risks to get big results. They excel at envisioning the future and lead by taking action, seeking out promising opportunities, and directing their attention toward the finish line.

Engage Others = Spirited

Spirited leaders have a talent to inspire and motivate others. They engage the people around them, generate excitement, and rally the troops to achieve a common goal. Spirited leaders like Franklin Delano Roosevelt are extremely enthusiastic and have a great ability to persuade others to see their point of view.

Encourage Others = Considerate

Abraham Lincoln was a Considerate leader whose style resulted from a combination of low assertiveness and high expressiveness. He was highly regarded for adding the best and the brightest to his staff and pulling together a team uniquely suited for dealing with the Civil War crisis. Considerate Leaders engage others and they excel at being supportive, active listeners.

Execute Results = Systematic

Leaders with this strength are detail-oriented and use informed decision-making to bring about high levels of performance. Much like George Washington, they are deliberate, accurate, and focused. While they may appear to be controlling, this is only a result of their meticulous nature. Four effective presidents, yet four very different personality styles; how is this possible? Effective leaders know how to draw on their natural strengths—and they know how to flex their personality style to meet the needs of others. Leadership is critical to the success or failure of a business.

Assess & Improve Your Own Style

Knowing your leadership style can be a critical first step to improving your abilities. The HRDQ assessment, What's My Leadership Style, helps uncover the personality traits that define your leadership. Our leadership style assessment quickly and accurately identifies a preference for one of the four behavioral leadership styles. You never know when you’ll be called upon to lead, and our What's My Leadership Style can help you unlock your true leadership potential.