Leadership and its impact on organizational performance
Behavioral approach 10 4. Situational approach 10 5. Psychodynamic approach 10 6. Path-goal theory 10 Styles of leadership 11 The passiv-avoidant leadership 11 Democratic leadership 11 Autocratic leadership 12 Charismatic leadership 14 Transactional leadership 14 Transformational leadership 15 Areas of Difference Between Transactional and Transformational Leadership 17 Leadership and its impacts on organizational performance 18 Leadership and empowerment 25 Leadership, commitment, and employee satisfaction 27 Leadership and organizational culture 28 Methodology 29 Research design 29 Reviewing 29 Sampling 30 Respondents 30 Conclusion 31 References 34 Introduction In today’s business, many antique traditional theories of business practices and management have gradually been replaced by systematic, modern and measurable counterparts. However, success in any business highly depends on the effectiveness of the current organizational leadership. Effective leadership in any organization tends to improve the organization’s efficiency, effectiveness, productivity and flexibility which significantly improves organizational performance. Leadership is considered to be responsible in the organizational performance; both senior and junior leaders ought to put into consideration certain elements which are essential to ensure the smooth running of the organization and attaining maximum performance.
Moreover, leaders in their respective organizations should lead the rest of the employees to a “Go-Go” attitude; this will eventually result in high levels of effectiveness, efficiency, and productivity. A high performing organization highly depends on having the appropriate culture and structure which ultimately contributes to high levels of motivation and satisfaction among the employees. Both satisfaction and motivation have a direct relation with employee efficiency and organizational productivity, thus maximizing the organization’s performance in the long run. Eacott & Evers (2015) indicates that employees abandon most of their companies and respective jobs as a result of job dissatisfaction. Based on a survey by Hay Company, over 40% of companies in 50 countries mostly focuses on various employee aspects; they include treatment, workload, pay, benefits, job autonomy, recognition, and teamwork.
Many of the questions were related to leadership styles and communication skills between the management and the employees (Eacott & Evers, 2015). To sum up, this paper aims at fully discussing the direct impacts of leadership and its styles on organizational performance. Also, this paper will exhaust indirect influence by organizational leadership via team climate, diversity and team cohesion aimed at achieving positive organizational performance. Research questions Based on the above-discussed research, it is evident that there exists an interaction between leadership and organizational performance factors. Some of the research questions which guide the research include: Main question To what extent do leadership and its components, directly and indirectly, influence organizational performance in an organization. Does leadership influence the overall performance and output of the organization? Does leadership in an organization play a vital role in employee performance and overall performance? Sub-questions • What constitutes leadership? • Which leadership style is effective in ensuring positive organizational performance? • Can leadership create team cohesion and ensure the organization’s success? • To what extent does leadership influence organizational performance? • How can leaders bridge existing organization’s gaps and ensure overall performance? Literature review The importance of organizational learning, community development, business effectiveness stakeholders’ satisfaction, and project quality all combine reasons to why we should study and explore the subject of leadership.
This literature review aims at investigating types of leadership, elements of motivation and individual consideration. If intellectual stimulation, individual consideration, and inspirational motivation are exercised appropriately, it will result in employee satisfaction, extra effort, and job effectiveness; these results are essential and influential elements in organizational performance (Martelli & Abels, 2010). Trait approach This particular methodology is based on the belief that people are born as leaders and have certain traits which make them recognizable as leaders (Antonakis & Day, 2017). These leaders possess leadership talents of great political, social and military leaders some of the well-known leaders who are believed to be born as leaders may include Abraham and Lincoln. Skills approach This approach indicates that leadership skills are acquired and developed through training and practice.
These particular skills can, however, be divided into human skills, technical skills, judgment skills, and problem-solving skills. Behavioral approach Notably, in this approach leaders are believed to be responsible in shaping the environment as well as empowering other followers in order to attain a certain task. The passiv-avoidant leadership This type of leadership comprises of leaders who necessarily avoid clarifying certain areas which are important and which may result in negative consequences. Notably, these types of leaders do not give an appropriate solution to any problem that may arise in an organization. For instance, a conflict may arise among members of the organization or in a particular department, this type of leaders do not even attempt to listen to any of the parties, he or she may fire both parties or avoid conversing with them (Mohiuddin, 2017).
In addition, this type of leaders do not set any standards or monitor any actions done by the subordinates, these type of leadership necessarily has a negative impact on both the organization and the workers. Democratic leadership This particular type of leadership is also referred to as leaderful practice or shared leadership. This type of leadership style is commonly used in areas or in organizations where quick decisions are required and do not need any approval from any of the members. Particularly, autocratic leadership is common in many small organizations since easy and quick decisions have to be made depending on the nature of the business. The leader in the business sorely depends on himself or herself for all matters relation the business.
This particular style of leadership is considered to be flexible since decisions in most cases are made on the spot and does not require a lot of consultations from specialists or professionals, unlike in large corporation a lot of consultations have to be made. However, not all big organizations consult specialists or professionals when making certain decisions; this is because they fully operate on an autocratic leadership (Clipa, 2018). Some of the key pillars for one to became an autocratic leader is discipline, victory, and preparation. Charismatic leadership This particular style of leadership arises in times of uncertainty, distress or extreme enthusiasm, it exists in social relationships. Mostly, it is powered by frantic commitment and emotions of the followers. Most of the times a charismatic leader arises outside a formal hierarchy of any organization and does not necessarily require to be formally appointed as a leader.
Transactional leadership This type of leadership comprises of loads of work being done by all relevant individuals in the organization; these may include subordinates and all top managers, they are centered by formal contracts which are aimed at accomplishing a certain set goal or the overall organizational goals. For instance, a worker may unwillingly violate the organization’s set rule due to circumstances which are beyond his or her capabilities (Hempsall, 2014). For example, an employee may be late to work as a result of being caught by the morning jam, yet he or she reaches the job but late with a few minutes or hours. As a result, the employee may face being sacked out of the organization or being given a punishment due to circumstances which are beyond his or her power.
Transformational leadership Transformational leadership is one of the leadership styles which is mostly inspiring in any organization. Particularly, it involves inspiring others in both the organization or in any other platform in order to achieve the desired outcome or a remarkable result. Also, transformational leaders specialize in working towards positive change in their respective organizations; they solve any problems which may arise within the organization or from the surrounding business environments. Lastly, they also help in maximizing the teams’ capacity and capability. However, transformational leadership does not necessarily pop out of oneself; it requires very organized individuals who portray good picture to their fellow colleges and employees. They should also be team-oriented, in that most of their time is spent in working groups trying to help each other and achieve a certain set goal, they are well respected by both the senior and subordinates in the organization.
Lastly, transformational leaders are responsible for their teams and always strive for the best among its fellow members; they also engender respect and personal influence through rapport. Transformational leadership also involves increasing the impact of transactional leadership among the followers. Notably, transformational leadership majorly aims at transforming values of the employees in order to support the goals and visions of the organization by providing an environment which fully supports relationships and establishment of a good climate where trust and visions can easily be shared. In addition, transformational leadership enhances followers towards achieving the ambitions and needs of the organization, whereas a transactional leader fully identifies already existing objectives and needs of either the organization or the followers and necessitates rewards which will ensure the objectives are achieved.
Characteristics of transformational leadership include showing a lot of consideration to both senior and subordinate employees, establishing and building a strong trust between employees and the management, delegating responsibilities, listening to both complaints and compliments, influencing followers with a positive attitude and lastly empowering employees both socially and economically. Leadership and its impacts on organizational performance According to Pretorius, Steyn & Bond-Barnard (2018), there exists no comprehensive leadership theory which can be termed as appropriate to employees in an organization. One of the strategies in which organizations can use to ensure positivity in performance may include, having a suitable relation between the organizational performance and organizational leadership. Often, many theoreticians may argue that leadership is the most important and key contributor to the organizational performance in both the market place and in society.
According to Clipa (2018), management particularly has a great impact on the overall organizational performance, this means that leadership can contribute both positively or negatively to the organization’s performance. Many scholars and authors believe in leadership and organizational effectiveness, this is because leaders play a significant role in influencing effectiveness and performance in the organization. An organization which is in operation can easily be predicted its performance by only observing and studying leadership scope of effectiveness in terms of leadership. On the basis of democratic leadership definition, the theory concurrently indicates the involvement of power, behavior, leader traits and situational variables. Due to this reason, democratic leadership can be viewed as an approach which gathers major elements to leadership (Jeenanunt et al.
It can also be defined as a leaders’ effect in terms of attraction, loyalty, trust, admiration, and respect towards the leader. In democratic leadership, followers trust and feel free to bridge their issues and problems that they might be facing in the organization, by doing so this creates a platform which ensures information is well shared among the two parties. Consequently, transformational leadership also brings about certain challenges which can easily result in much higher performance. According to Cravens, Goldring & Penaloza (2012), democratic leadership, leaders are mostly assumed to stimulate a certain inner power within its followers, this particular stimulation enables followers and in our case employees to perform certain tasks which they thought they could not achieve. Due to this reason, it is evident that leaders especially those under a democratic leadership style can enhance the quantity and quality of the follower’s performance by a higher percentage.
Organizational effectiveness is majorly the consequence of a good organizational leadership and organizational culture. However, studies indicate that certain types of motivation can lead to an either both positive or a negative performance between the employees. For instance, if the manager or managers in a certain organization have a tendency of talking rudely to the rest of the employees, there is a higher probability that the employees will also adopt the same and may even start talking rudely to each other (Litmanovitz, 2010). Organizational culture and leadership jointly form an effective effect on both the individual and organizational performance. Leadership and organizational culture provide a point for both participative and supportive leadership; this is because the culture in any organization as an aspect form the leadership style and is indirectly linked positive performance.
Transformational leadership involves a process of setting a foundation of organizational goals by either enabling, giving power and assisting followers to complete the set objectives fully. Transformational leadership usually involves improving the followers’ ability to follow organizational goals keenly. However, analysis and empirical reviews indicate that participative leaders help in promoting the employees’ productivity. On the other hand, organizations which are bound by punitive and rigid rules, participatory leaders may fail to deliver as expected by the stakeholders this is because of lack of continuity and stability in the business. Due to this reason, organizations which are always in support for innovation and are always risk-taking are more likely to embrace transformational leadership in their respective organization; this is because the organization at hand is more flexible and open to new strategies.
Organizations which fully embrace innovation in their operations are likely to achieve higher and positive results as compared to those who do not (McCarty Kilian, Hukai & Elizabeth McCarty, 2005). Both Transformational and transactional leadership styles are highly correlated to extra effort, improved financial performance, high attendance, low staff turnovers, increased productivity and customer satisfaction. Leadership and empowerment Empowerment refers to the process of enhancing group’s or individual’s autonomy and self-efficiency. For instance, a learning institution should be situated in an environment which is free from noise; this will enable teachers to teach the students all that is required effectively (Iqbal, Anwar & Haider, 2015). By providing the appropriate tools for the task, employees felt more appreciated and equipped to handle the task ahead.
For instance, leaders in a manufacturing firm should provide the necessary protective gears and equipment in order for the task to be done based on the desired expectations. When employees are provided with the necessary tools and equipment to handle their tasks, they feel appreciated, part of the organization and empowered to tackle the tasks ahead (Natarajan, 2018). By fully knowing the doctrine and applying it in the respective organizations, leaders can be in a position to empower the powerless in the organization so that they can tackle their tasks in a more productive manner which creates potential and encourages innovation and creativity. Leaders have a role of ensuring that more attention is given on employability and that the appropriate resources are allocated to the respective operations and activities being implemented in the organization.
Leadership and organizational culture An organizational culture which can also be refereed to as corporate culture refers to the behavioral values and norms which constitute individual’s behavior; they are mainly based on the organization’s regulations and policies. Notably, it can be seen from the above readings that there exists a greater direct link between organizational culture and leadership. Culture can be defined as shared ideologies, philosophies, assumptions, expectations, norms and attitudes. Every organization has its own organizational culture which constitutes the daily operations of the company; leadership is part of the organizational culture (Clipa, 2018). By reviewing some of these articles and books, I will be in a position to extract effective and important data and information about the companies.
Some of these articles have information about different leadership styles and how they impact the organization. Sampling In this particular research, a sampling element which is non-probability will be utilized to ensure that a sample is well selected among the random samples. However, all of these random samples will have a certain particularity to the information needed. This particular research possesses two different aspects of particularity which will require a non-profitability sample. Effective leadership in any organization tends to improve the organization’s efficiency, effectiveness, productivity and flexibility which significantly improves organizational performance. A high performing organization highly depends on having the appropriate culture and structure which eventually contributes to high levels of motivation and satisfaction among the employees (Lundell & Marcham, 2018).
Presently, in many firms, due to new chain management in both management and supply, many businesses prefer shorter lead times, this is because such a strategy will assist the organization in accomplishing some of the most significant aspects of the organization. As a result, many firms need to improvise their strategy and establish better and practical skills for their workers who ensure good performance at the end. One of the strategy in which an organization can ensure compatibility with the chain management is to consider high productivity and performance maximization in the organization. Consequently, it involves more reactions and expectancies. Transformational leadership particularly constitutes inspiration of other employees in the organization. This specific style of leadership is of great significance to any organization; since it provides the employees with autonomy over various tasks and jobs issued by the management.
Leaders play a very significant role in any organization which is in operation; this is because leaders especially managers are responsible in defining certain strategies and formulating new rules which form a channel for efficient and effective use of organization’s resources and improving performance. Transformational leaders provide a room for certain organizational processes to be executed fully despite the existence of individual blocks and hiccups in the implementation of change in the respective organization (Cravens, Goldring & Penaloza, 2012). Editors David V. Day and John Antonakis give an in-depth exploration of various schools of leadership. The text contains materials pertaining to gender, identity, culture, power and entrepreneur leadership. The authors conclude the text by unpacking methodology and philosophical issues concerning leadership such as corporate social responsibility and ethics.
Cravens, X. Clipa, O. Relations of Style of Leadership and Achievement Motivation for Teacher. Romanian Journal for Multidimensional Education/Revista Romaneasca pentru Educatie Multidimensionala, 10(4). The study which was done in the year 2018, talks about the relations between leadership styles and motivation achievement among teachers. The study displays different dimensions concerning motivation such as dominance, persistence, engagement, flexibility, competitiveness, goal setting, and status orientation. , & Kelloway, E. K. Transformational leadership training for managers: effects on employee well-being. In Creating Healthy Workplaces (pp. Routledge. The two authors indicate that science and those who specialize in it have overtaken educational leadership and the position fits them. The article also elaborates much on both the administration and management theories of leadership. Hempsall, K. Developing leadership in higher education: Perspectives from the USA, the UK, and Australia.
Journal of Higher Education Policy and Management, 36(4), 383-394. The study also incorporates qualitative approaches and secondary research in order to get detailed results concerning the same. The study also incorporates secondary research and views presented in different articles to account for qualitative needs. The study concludes that autocratic leadership is quite useful in the short term while the democratic leadership style is useful in the long term. Jeenanunta, C. , Rittippant, N. Based on the results obtained, it indicates that leaders play a great role in performance and logistics of various organizations. Jyoti, J. , & Dev, M. The impact of transformational leadership on employee creativity: the role of learning orientation. Journal of Asia Business Studies, 9(1), 78- 98. Litmanovitz also indicates that women also fear to venture into various careers which may seem technical, these may include law, engineer and electric courses.
She indicates that lack of support and self-confidence have resulted in the gender imbalance between men and women in leadership. Lundell, M. A. , & Marcham, C. Journal of Education for Business, 85(4), 209- 217. The article identifies and describes Chief executive Officers of 500 companies regarding demographic and education-based variables. Particularly, the article identifies levels and types of degrees attained, educational majors, gender and age of the various CEOs. The article also provides certain common trends and management principles among these CEOs. The article also provides more than 50 variables of research database all collected from the 500 fortune companies. Organizational Behavior 1: Essential theories of motivation and leadership. Routledge. The book organizational behavior by Miner emphasizes certain theories which can be applied in various leadership styles to motivate employees.
Miner first provides strategies in which leaders from both autocratic, democratic, transformative style of leadership, they can use to motivate their employees. These include incentives, wage increment, training, and even promotion. Natarajan, A. The Leadership the World Needs. Cadmus, 3(5), 66-74. The article by Natarajan talks about the type of leadership in which employees in an organization and those in public want to see. The article is very precise about the various styles of leadership and how they impact employees in the organization in terms of performance and flexibility. The article elaborates and states that traditional styles of leadership are no longer effective in many organizations and managers need to adopt and implement new and effective leadership styles which will see the organizations achieve success and remain competitive.
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