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Introduction
Strong leadership and effective management are indispensable elements of strategies focusing on companies’ operational and financial success. They may vary across industries and sectors and be adapted in response to the business’ needs. It means that the firms are free to choose whatever model of leadership or management strategy best meets the requirements of their segment of the economy and the environment they operate in to reach their objectives.
This paper will focus on studying the leadership style and management strategy deployed by Mercedes Benz. The major objective of the research is to determine the theory of management and leadership used by the chosen organisation. The method for reaching the goal is conducting critical literature review with the aim of distinguishing whether the company is efficient in applying the chosen strategy.
The idea behind theoretical investigation is to obtain enough background information on leadership styles, which might be applied to analysing the performance of Mercedes Benz in the light of the theory’s implications on the practice and the challenges faced by the company’s leaders and managers. Furthermore, this paper will provide personal reflections on the issue under investigation, which aims at summarising the findings from the literature review and the ways they influenced the personal perception of leadership and management.
Finally, the theoretical background together with the reflective part of the essay will be used as tools for composing the personal development plan focusing on the possible ways of fostering leadership and management skills. The motivation for designing the PDP chart is the fact that it is beneficial for detecting the gaps in the current leadership potential and filling them.
Literature Review
Choosing the relevant leadership style is the first step towards guaranteeing high levels of operational and financial performance and, at the same time, low attrition rates through increasing job satisfaction. It is especially significant in the modern competitive environment, which is characterised by an ample quantity of companies and high levels of competitiveness. That is why understanding leadership styles is the key to making the right choices.
There are various leadership styles each having its peculiarities, advantages, and disadvantages. The most commonly known styles are democratic, authoritarian, and laissez-faire leadership styles (Eken, Özturgut & Craven 2014). The criterion for making the similar distinction is building the relationships between a leader and his team, i.e. the atmosphere in a company. Democratic leadership style is also known as participative (Hopen 2015).
It implies that leaders are fair and prefer cooperation choosing to motivate their co-workers to achieve higher levels of performance by developing individual methods and strategies for achieving goals. The primary feature of this style is high involvement of employees and their commitment to accomplishing projects. The authoritarian leadership style, also referred to as autocratic, is often one-sided because decision-making is centralised and the focus is made on dictating responsibilities and strict control of performance. It makes this style inflexible and leading to the loss of individuality and dependence on a leader.
In general, employees become unmotivated because they are not allowed to make proposals on improving strategies used for achieving company’s goals (Northouse 2015). Finally, laissez-faire leadership, which is known as delegative, focuses on granting the absolute freedom to employees. It means that leaders neither control nor motivate them supposing that members of a team have enough knowledge to determine their objective and design strategies to achieve them and solve problems (Eken, Özturgut & Craven 2014).
Another classification centres on dividing leadership styles into transformational and transactional leadership (Nanjundeswaraswamy & Swamy 2014). The criterion behind this division is a leader’s role in achieving the company’s strategic objective, which is analysed by motivation and relationships with a team. The first leadership style under this classification is referred to as transformational leadership. Its primary specificity is that it focuses on transforming employees.
It means that a manager pays significant attention to the development and implementation of the value system promoting the desire to accomplish goals and benefit the company. The needs and interests of team members are at the heart of the new value system because it is believed that reaching company’s strategic objectives is possible only when every employee is personally involved in the process and desires to improve performance (Nanjundeswaraswamy & Swamy 2014; Mehrad & Fallahi 2014).
This leadership style is the most appropriate one when the primary goal is to increase employees’ satisfaction with working conditions and their productivity rates (Arzi & Farahbod 2014). The second leadership style under consideration is transactional leadership. Its primary specificity is that this style is based on the very essence of human relationships – if a manager wants to increase the employees’ productivity and improve the company’s performance, the employees should be rewarded.
This style resembles trade system because teamwork is built on crystallising the direct relation between performance and reward. This leadership style operates under strict provisions of contracts between a company and its employees (Nanjundeswaraswamy & Swamy 2014). Its primary strength is that when people know that they will be rewarded for job excellence, their productivity increases. So, managers and employees’ expectations coincide (Voon et al. 2011). However, it is not always the best style for increasing job satisfaction mainly because of the contractual nature of workplace relations.
Becoming a leader is always a challenging task. First of all, it is complicated to choose the leadership style, which would be the most appropriate for both the needs of the companies and the leaders themselves. There is always a challenge of developing the correct communication model and value system. It should be mentioned that there are several personality types, which are closely related to communication models. They are counsellor, coach, conductor, and commander.
Counsellors are usually compassionate and strive for stability. Their primary belief is that a leader should be calm and inspiring. Coaches are influential leaders. This type of leader and communication model is characterised with a robust personal experience, which motivates people to improve their performance and develop. The next personality type is conductor. Its key feature is paying significant attention to detail, i.e. having a precise plan for the further development and following it strictly.
Finally, commanders are leaders, who are harsh and very decisive. They know that their team has a strategic goal and focus at reaching it by any means. Employees’ needs and interests are rarely taken into consideration because the company’s performance is at the stake. That is why commanders prefer power relations (Nicolescu & Lloyd-Reason 2016; Jackson & Bosse-Smith 2007).
Another challenge faced by leaders is finding the right balance between the leadership styles, personality types, and communication models mentioned above. It has been proven that sticking to only one style is ineffective because it is limiting the employees’ potential and the ways of reaching the company’s strategic objectives. That is why it is paramount to incorporate the elements of all styles and models and create a unique leadership strategy, which would be the most appropriate for an individually taken organisation and its needs (Mehrad & Fallahi 2014).
The primary idea is to be a harsh and decisive leader in crisis situations, but, at the same time, remain calm and flexible focusing on the interests of team members because it is the only way to improve performance. Finally, there is a challenge of mobilising people and motivating them to develop new skills and obtain new knowledge (Kouzes & Posner 2012). However, it is closely related to the challenge of choosing leadership style and developing a shared vision.
Bearing in mind the obtained theoretical background about leadership styles, it is possible to analyse the performance of the chosen company – Mercedes Benz. The establishment of the modern leadership style deployed at Mercedes Benz has a long history. Initially, it was a company that promoted total control in all activities (Maier 2015). It means that the established leadership style was autocratic and the chosen communication model was commander. All decisions were made by senior management and the company’s employees were obliged to follow the requirements and reach the set objectives by any means. However, this style was common for all German companies operating in the automobile industry.
As time passed by and Mercedes Benz became one of the most influential companies in the automobile industry, senior management realised that the company’s primary value is its people because they develop new designs and bring it to life. The change in the leadership style was fantastic. As for now, the core values of the company are inspiring people to develop both themselves and their organisation, committing to excellence in performance, promoting openness and respect, and focusing on the needs and interests of their employees (Mercedes Benz 2016).
The focus is still made on working to win because the company desires to remain the leader in the industry incorporating innovations and technologies in their products (Dishman 2012). However, the emphasis has shifted from total control to flexibility. The company’s primary objective is not to sell more but become more efficient and productive (Michelli 2015). That said, nowadays, leaders focus on enhancing motivation and teamwork.
The primary idea is to foster collaboration inside teams through healthy competitiveness because it is the key to producing the most creative and innovative ideas and increase productivity. Enhancing motivation is achieved by developing and implementing team exercises promoting imagination and professional drive. The emphasis is made on rewards. In addition to it, the focus is made on building employees’ individuality.
It means that the company is interested in its employees’ self-development and personal growth as well as obtaining new knowledge and developing new skills. In fact, because the company operates on the contractual basis and team members are promised to be rewarded, fostering self-development is the indispensable element of the strategy because people realise that if they do not develop, they will not be competitive enough and the company will not reward them.
That said, Mercedes Benz’s leadership style is a combination of three styles. First of all, it is democratic because no strict control is imposed on the employees since they operate on the basis of healthy competition just like any kind of community. Second, there are elements of transactional leadership styles because all workplace relationships are controlled by contracts and rewards. Third, the company’s leadership style is partially transformational because the system of healthy competition implies the desire for self-development while the focus on individualism and teamwork are the constituents of the specific value system.
Finally, the style is as well laissez-faire because the company’s employees are granted freedom in their activities since it is the operation under the healthy competition that determines, who has enough knowledge and skills to work for Mercedes Benz. In addition to it, employees are free to make offers on improving the performance of their company. It is motivated by the senior management’s openness and the fact that the interests of teams are taken into consideration when making vital decisions.
So, Mercedes Benz has developed its unique leadership style, which is characterised by the incorporation of key elements of various leadership styles under investigation. The company has managed to find the perfect balance between democratic, laissez-faire, transformational, and transactional styles. The focus is still made on the needs and interests of employees and their operation under healthy competition means that the most influential aspect of the company’s leadership style is democratic.
Even though the path towards becoming unique and finding the right balance was long and challenging, Mercedes Benz has proved that these are people, who are the most valuable resource of any company striving for becoming a leader and that autocratic leadership styles are ineffective in the modern world of freedom and democracy.
Summary of reflection
This reflective summary will be based on the reflective cycle developed by Gibbs. It will include several consecutive stages. The most significant advantage of this method is that it is a perfect tool for describing the situation under consideration in detail with specific attention to analysing feelings and behaviour. The Gibb’s reflective cycle is a set of seven steps: describing the event, exploring the feelings, evaluating the event, analysing it, forming a general and specific conclusions, making a personal action plan (Copley 2011), and this summary will cover each of them.
The situation under consideration is working on this project. One stage of the assignment demanded working in a team while the other one was solely individual. This project required determining the company in the automobile industry, conducting a critical literature review on the significance of leadership and leadership styles, and applying the learned information to analysing the company, challenges faced by its managers, and estimating the impact of leadership theory on the company’s activities and performance.
Initially, the task was the source of confusion, and the emotional aspect regarding was too influential. The primary challenge was the necessity to work in a team because it meant the importance of finding the ways to organise other members of the group. Nevertheless, when I started working with a group, all my nervousness faded away because it turned out to be easy to communicate with them and organise our work. During the theoretical part of the project, I felt more confident and calm because I prefer working alone to teamwork.
This experience was a positive and significant one. However, it was different from other similar theoretical projects. The primary difference from the rest of the resembling assignments is the fact that this one included a stage requiring group work. Nevertheless, working in a team was a precious experience. Its major positive outcome is that I found out what are the gaps in my leadership style and communication. In addition to it, the project was beneficial for obtaining new knowledge on the subject under investigation and applying it to the practical dimension drawing conclusions about the leadership style of the chosen company – Mercedes Benz. The only challenge with the project was the group work itself because initially it was complicated to determine the roles of each of team members and their tasks in the group.
Keeping in mind the overall positive impression from the project, I can say that it was one of the most educative experiences in my studying. Except for a wealth of knowledge obtained in the process of accomplishing it, it was a precious source of the personal growth and development because I managed to find out what is my leadership style and what are the gaps in it. During the project, we decided to divide the task between all group members equally and promote shared responsibility because the project was equally important to all of us. I believe it is the most significant accomplishment of our group.
I have reached the general conclusion that working in a team is a positive experience. Even though I prefer individual assignments, I realised that group work is a source of a variety of individual opinions, which can be used to improve the quality of the project and make it multidimensional covering all requirements from different perspectives.
In addition to the general conclusion drawn above, I can up with several specific conclusions. First of all, I found out that me fears of teamwork do not have real grounds because I turned out to be a good team player. Moreover, I managed to persuade other group members that we should promote shared responsibility and divide the tasks equally. These dimensions of group work made me happy with my performance.
So, I believe that in a similar situation, I would choose the same model of behaviour because, in my mind, it is productive and efficient. Furthermore, I would not oppose working in a team next time similar tasks are assigned. It is the only thing I would change in the future experience. As for now, I have found out that I have particular skills characterising efficient leaders such as the ability to organise workflow, divide the tasks, and manage time phasing the whole process and designing timelines thus increasing the productivity of my group and improving our performance. The personal action plan for the similar projects implying teamwork in the future is to embark the same steps and behave in the same manner.
I could focus on obtaining more theoretical knowledge on leadership and managing people and resources to develop more skills necessary for becoming an effective leader. The special emphasis should be made on developing communication skills because sometimes it was challenging to get my messages across and persuade other team members that my opinion is worthy of attention.
Developing the PDP chart
My personal development will be provided in the form of a chart because it is more persuasive and efficient due to its visual aspects. The idea behind drawing up this chart is to determine my primary goals in developing leadership styles and evaluate their importance thus pointing out which of them are the most significant and should become primary.
Table 1. Personal development plan.
Conclusion
Being involved in this project was beneficial in numerous ways. First of all, I found out that I have particular skills necessary for becoming a leader. However, what is even more crucial, I realised that there are significant gaps in both knowledge of leadership styles and skills, which should be filled. As of the knowledge gaps, they were filled to a particular extent in the course of working on this project. Nevertheless, there is still a lot of work to do for self-development.
I recognized that leadership is paramount when it comes to achieving strategic objectives of influential global companies as well as personal aspirations and organising teamwork. In addition to it, choosing the most appropriate leadership style requires rich knowledge and experience because it demands the incorporation of elements of different styles (transformational, transactional, laissez-faire, authoritarian, and democratic) and communication strategies (coach, counsellor, commander, and conductor).
Furthermore, leadership style chosen by the company under investigation, Mercedes Benz, could be applied at smaller scales for both small companies and team projects. The motivation for drawing the similar conclusion is the fact that in Mercedes Benz, managers and leaders focus on the need and interests of their employees and promote shared responsibility as well as provide the space for personal growth and self-development. The company has proved that democratic leadership style is more effective than an authoritarian one. This particular style will be advantageous at any scale because it contributes to individual involvement in achieving success and the desire to improve performance and increase productivity.
References
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Dishman, L 2012, Mercedes Benz CEO Steve Cannon steers luxury to attainable, connected new paths. Web.
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Eken, I, Özturgut, O & Craven, A E 2014, ‘Leadership styles and cultural intelligence,’ Journal of Leadership, Accountability and Ethics, vol. 11, no. 3, pp. 154-165.
Hopen, D 2015, ‘Finding your leadership style’, The Journal for Quality and Participation, vol. 38, no. 3, p. 3.
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Kouzes, J M & Posner, B Z 2012, The leadership challenge: how to make extraordinary things happen in organisations, Jossey Bass Education, San Francisco, California.
Maier, J 2015, The ambidextrous organisation: exploring the new while exploiting the now, Palgrave Macmillan, New York, New York.
Mehrad, A & Fallahi, B 2014, ‘The role of leadership styles on staff’s job satisfaction in public organizations,’ Acta Universitaria, vol. 24, no. 5, pp. 27-32.
Mercedes Benz 2016, Why work at Mercedes Benz? Web.
Michelli, P 2015, Driven to delight: delivering world-class customer experience the Mercedes-Benz way, McGraw Hill Education, New York, New York.
Nanjundeswaraswamy, T S & Swamy, D R 2014, ‘Leadership styles,’ Advances in Management, vol. 7, no. 2, pp. 57-62.
Nicolescu, O & Lloyd-Reason, L 2016, Challenges, performances and tendencies in organisation management, World Scientific Publishing, Singapore.
Northouse, P G 2015, Introduction to leadership: concepts and practice, SAGE Publications, Thousand Oaks, California.
Owen, J 2014, The leadership skills handbook: 50 essential skills you need to be a leader, Kogan Page, London, United Kingdom.
Voon, M L, Lo, M C, Ngui, K S & Ayob, N B 2011, ‘The influence of leadership styles on employees’ job satisfaction in public sector organization in Malaysia,’ International Journal of Business, Management and Social Sciences, vol. 2, no. 1, pp. 24-32.
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