STRATEGIC BUSINESS LEADER

(SBL)

Strategic Modules

Chapter 1- Leadership Quality & Organisation

Culture
Chapter 1: Leadership Qualities & Organizational Culture

Part A- Leadership

Learning Outcome: Qualities of leadership

a) Explain the role of effective leadership and identify the key leadership traits effective in
the successful formulation and implementation of strategy and change
management.[Level 3]

b) Apply the concepts of entrepreneurship and ‘intrapreuneurship’ to exploit strategic

opportunities and to innovate successfully.[3]

c) Apply in the context of organization governance and leadership qualities, the key
ethical and professional values underpinning governance.[3]

Leadership and organizational culture

a) Discuss the importance of leadership in defining and managing organisational
culture.[3]

b) Advise on the style of leadership appropriate to manage strategic change.[2]

c) Analyse the culture of an organisation using the cultural web, to recommend suitable
changes.[3]

d) Assess the impact of culture and ethics on organisational purpose and strategy. [3]

1.1 What is leadership?

Leadership is NOT :
• About the position of the organization
• About the seniority of the personal in the organization
• About the personal attributes
• Management or a manger who manage or control something.

1.2 What is leadership?

Some great leadership quotes:

• “Leadership is the capacity to translate vision into reality” – Warren Bennis

• “A leader is a dealer in hope” Napoleon Bonaparte
• “Leadership is lifting a person’s vision to high sights. The raising of a person’s
performance to a higher standard. The building of a personality beyond its normal
limitations” Peter Drucker.
• “Leadership is influence…nothing more nothing less” John Maxwell.

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 • “Anticipation is the ultimate power. Losers react. Leaders anticipate”
• “A true leader has the confidence to stand alone, the courage to make tough
decisions and the compassion to listen to the needs of others”. Douglas MacArthur

Leadership is concerned with the qualities that make someone an effective leader. There
have been different views about leadership and the qualities of an effective leader,
especially for managing change and implementing business strategies. 'Whoever is in the
position of managing change needs to consider the style of management they adopt'
(Johnson, Scholes and Whittington).

“HOW WELL YOU LEAD DETERMINE HOW SUCCESSFUL YOU ARE!”

Leadership is the action of leading people in an organization towards achieving

goals. Leaders do this by influencing employee behaviors in several ways. A leader sets
a clear vision for the organization, motivates employees, guides employees through the
work process and builds morale.

1.3 What make a leader?

He/She must have the following characteristics:

• Calm
• Confident
• Consistent
• Courage

1.4 Leadership Theories

There are several theories about what makes a good leader:
◼ Trait theories
◼ Style based theories (Behavioural theories)
◼ Contingency based theories (Contingency theories)
◼ Activity based theories
◼ Strategic visionary leadership

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Trait theories
Trait theory assumes that there are certain qualities or traits in an individual that makes him (or
her) a 'born leader'. Leaders are born, not made. The theory takes the view that if a person
possesses the traits required for leadership, he or she will be able to provide effective leadership
in any type of situation.

The traits required for good leadership might be physical, intellectual or personal qualities. They
might include physical vitality, skill in dealing with people, an eagerness to accept responsibility,
an ability to motivate people, courage and resolution, a need for achievement, decisiveness, self-
confidence, trustworthiness, assertiveness and an ability to adapt and show flexibility.
The list of traits can be very long. A problem with trait theory is that not many individuals show
all the traits of effective leadership, so how many are needed to be effective? It is also recognised
that some leadership traits are more relevant in some situations than in others.
Trait theory is therefore of only limited value in identifying what is needed to provide effective
business leadership.

Style theories (behavioural theories)

Style theory or behavioural theory is based on an analysis of how

leaders behave rather than the traits or qualities they possess. It is
suggested that the effectiveness of a leader depends on the style of
leadership and how the leader behaves, especially towards
subordinates or team members. It is the style of management that
matters.

Early theorists who put forward a behavioural theory of leadership identified some or all of the
following styles:

◼ Concern for the task (i.e. Task-Focused). These leaders focus on the achievement
of specific objectives. They concentrate on the successful achievement of goals, and
organising people to achieve a high level of productivity.

◼ Concern for people (i.e. People Focused). These leaders treat their subordinates or
team members as people, show concern for their interests and problems and try to
develop them in the work that they do. People are not simply units of resource that are
paid to achieve a business purpose. By showing concern for people, it should be
possible to develop them into more effective and efficient workers.

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 ◼ Directive leadership. This style of leadership is based on telling people what to do
and making decisions for other people to act on. Subordinates or team members are
expected to do what they are told.

◼ Participative leadership. These leaders try to encourage participation in decision-

making by subordinates or team members. The view is that by involving others on
decision-making, they will be motivated more effectively and will therefore perform
better in their work. Motivated individuals are much more likely to work harder to
achieve clear work objectives.

◼ Theory X and Theory Y (by Douglas McGregor). Theory X suggests that most people
dislike work and responsibility, and will avoid work and responsibility. These type of
people must be coerced, controlled and threaten to work. Whereas, theory Y suggest
people like to work and take responsibilities. Hence, these type of people will be
motivated by giving them responsibility and authority to exercise.

A leader might be autocratic or democratic, participative or bureaucratic, people-orientated or task

orientated. There is an appropriate style for each work situation Behavioural theory suggests that
leaders can be trained in the appropriate style to use.

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Situational theories (contingency theories)
Situational theory or contingency theory is a development from behavioural theory. It considers
the situation in which leadership is exercised. The theory is that the most suitable
form of leadership differs according to the situation. The most effective form of leadership in one
situation is not the most effective form in a different situation.

Situational theory or contingency theory suggests that there is no single set of characteristics that
make a good leader. If a manager is in charge of people who expect to be closely managed, then
an autocratic style might be appropriate. With other employees that style would not work and a
more participative style would need to be adopted.

For example, a leader may need to be more directive in situations where a quick decision is needed
and where people are used to being told what to do. (The armed forces are an obvious example
where such situations arise regularly.)

Hersey and Blanchard (1977) identified four different leadership styles, and suggested that one
style was more appropriate than the others for a given situation. The four styles they identified
were as follows. (TSPD)

1. Telling. This style gives high emphasis to the task and getting the task done, and
gives low emphasis to relationships and people. This style is characterised by giving
directions to subordinates and defining the roles of subordinates and the goals that the
work group should achieve. This style might be appropriate for dealing with new staff,
or where the work must be completed quickly or urgently, or where the work is
manual or repetitive (and employee skills are not so important).

2. Selling. This style gives high emphasis to the task and getting the task done, and
also gives high emphasis to relationships and people. The leader gives most of the
directions, but also makes an attempt to get subordinates to 'buy into' the task. The
leader acts as a 'coach', similar to a sports coach. This style might be appropriate
where employees are motivated and willing to do well, but lack the ability or maturity,
and therefore need guidance from the leader.

3. Participating. This style gives low emphasis to the task and getting the task done,
but gives high emphasis to relationships and people. The leadership style is focused
on facilitating and communicating. Subordinates are given a great deal of
encouragement, and use their abilities to get the work done. This style might be
appropriate when subordinates have the ability to get the work done, but are insecure
or unwilling.

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 4. Delegating. This style gives low emphasis to the task and getting the task done,
and low emphasis to relationships and people. The leader identifies the problem or
objective, but the subordinates are given the responsibility for carrying out their tasks
so that the problem is resolved or the objective is achieved. This form of leadership
style is well-suited to employees with a high degree of competence. They know what
to do and have the motivation to do it.

Activity based leadership theories

These theories state that it is what a manager does that makes him (or her) a good leader. Adair's
action-centred leadership theory suggests that a leader has to give attention to task needs,
individual needs and group needs. An effective leader is one who can give appropriate attention
to each of the three factors - which might be in conflict.

Transactional and transformational leadership

Burns (1977) made a distinction between transactional and transformational leadership.

◼ Transactional leaders 'approach their followers with an eye to trading one thing for
another.'
◼ Transformational leaders seek to appeal to the better nature of their followers, change
them for the better and 'move them toward higher and more universal needs and
purposes'. A transformational leader is an individual who seeks to change people

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The main differences between transactional and transformational leaders are set out below.

Transactional leader Transformational leader

Recognises what an employee wants from Raises the level of awareness of an
work and tries to ensure that the employee employee about the significance of
gets what he wants provided that his what the employee's work should be
performance justifies it. trying to achieve, and also makes the
employee more aware of ways of how
these achievements should be reached.

Exchanges rewards for the employee's Encourages the individual to put self-
effort (and performance). interest to one side for the sake of the
team and the entity as a whole.

Responds to the employee's The leader transforms the employee into

immediate self- interests, if this will someone who wants more from work.
ensure that the work gets done. The employee is encouraged to move
towards the highest levels of the Maslow
hierarchy of needs.

Transformational theories recognise that the world is a less stable place than it was and thus
changes of all kinds are frequent. There are a few expectations of modern leaders:
• To change organizations and systems from within. 3 main themes:
• To drive forward adventurous, visionary strategies. -TEAMS
• To motivate others. -CHANGE
• To provide clarity of purpose and direction. -VISION
• To be good communicators.

The leader as a strategic visionary

A learning organisation is an entity in which individuals are continually learning and finding new
ways to help the entity achieve its objectives. Individuals in a learning organisation are capable of
innovative thinking. They are also able to see the 'bigger picture' and understand what the entity is
trying to achieve.

Peter Senge (1990) has argued that leaders in a learning organisation are 'strategic visionaries'.
They have a clear vision about what the entity is trying to achieve, and they are able to convey
their vision to the people that they work with. Leaders who are strategic visionaries are able to get
other people to 'understand complexity, clarify vision and improve shared mental models - that is,
they are responsible for learning.'

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A leader with strategic vision:
◼ helps other people to understand the purpose of their work and gives them a vision of
what they are trying to achieve
◼ enables others to improve their learning continually so that they can deal
constructively with all the problems they face in their work encourages other people
to share the vision, and work towards its achievement.