When the Fate of the Company Hangs by a Thread: the Significance of the Leader and the Choice of an Adequate Leadership Style

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In the modern world, becoming a leader is often viewed as the pinnacle of a person’s career and the goal that one must strive for. However, very few people actually know what being a leader means and what responsibilities it involves.

In fact, one will definitely have hard times even trying to define what leadership is – there are too many opinions concerning what leadership involves, as well as what the functions of a leader exactly are.

For example, some scholars view leadership as an ability to lead the company to its ultimate success, therefore, focusing on the material effects of good leadership (Bass, 2008, 24).

According to another school of thought, leadership involves managing the conflicts that occur within the employees and solving the problems that are related to the specified business field (Bass, 2008, 24).

The third opinion on leadership claims that a true leader must be a perfect strategist and, therefore, praises a true leader’s ability to plan the course of the company’s actions ahead (Bass, 2008, 24).

As it often turns out, the truth lies somewhere in the middle; hence, the definition of leadership includes each of the above-mentioned aspects, since at present, the concept of leadership also includes “contributing to social order, introducing major change, giving meaning and purpose to work and organizations, empowering followers, and infusing organizations with values and ideology” (Bass, 2008, 24).

With that in mind, the merits of effective leadership arte not restricted to the increase in the company’s revenues, though the given effects are expected as well.

Effective leadership must lead to improving the relationships between the staff and the employer, as well as among the employees, help solve the conflicts that arise among the members of the team and between the employees and the managerial, control organizational behavior and keep it stable, and perform many other functions.

To approach the situation in a specific company and improve it greatly, as well as set the course for the firm’s further development, however, a general idea of leadership is not enough.

To solve a particular problem, a particular kind of leadership must be used, which is why several leadership styles, with the help of which different problems can be addressed, have been distilled.

Autocratic

Presupposing that the leader has complete power over his/her employees and the working process, autocratic leadership seems to have become quite out of date, since it does not allow for much creativity.

Bureaucratic

Following only by-the-book principles and not allowing the employees to make any decisions other than the ones prescribed for each specific occasion, bureaucratic type of leadership often leads to the company’s decay.

Charismatic

When the leader relies completely on the effect that (s)he has on the employees, (s)he chooses the charismatic leadership style. In contrast to the transformational style, the given model does not presuppose any changes within the company.

Democratic

As one might have already guessed, democratic leadership style involves the practices that allow the employees feel that they have an impact on the company decisions. Leading to job satisfaction, the given approach seems one of the best.

Laissez-faire

Translated loosely from French as “leaving things the way they are”, laissez-faire leadership allows the employees make their own decisions that influence the production process and presupposes little control over the staff.

People-oriented

Quite a recent innovation in the sphere of business, the given approach demands that the leader should take into account the employees’ specifics and demands when assigning them with certain tasks. People-oriented approach has several features of a democratic leadership style.

Servant

Unlike one might have thought, a leader does not have to be necessarily recognized among the employees. As long as the leader can give commands and be certain that people will follow them, leadership can be considered effective. Therefore, a leader does not necessarily have to stand out of the crowd.

On the contrary, a leader can do the same task as the rest of the employees, which the servant leadership style presupposes.

Task-oriented

It is quite peculiar that a task-oriented style of leadership can also have certain features of the autocratic one. Setting the task completion as its ultimate goal, task-oriented leadership style often presupposes the revenue-over-people policy. In a way, the given approach is the exact opposite of the people-oriented approach.

Transactional

Rather paternalistic and quite controlling, a transactional type of leadership presupposes that the leader has the power both to observe the working process and to intervene it, as well as punish the employees for not performing their functions the right way (Betrocci, 2009, 48).

Transformational

Traditionally considered one of the best types of leadership, transformational leadership style aims at transforming people’s attitude towards the work that they do, which is carried out with the help of engaging them into the activities that they prefer and learning about their likes and dislikes.

Environmental

The given leadership style demands that the leader of a group of people carefully analyze the environment in a specific team and build the leadership strategy around the specifics of the environment in the given group.

The downside of the given strategy is that the leader has to follow the moods within the group, which practically means that employees set the course for the leader to follow, which is quite unnatural.

Visionary

When an organization needs a change, visionary leadership style is typically preferred over the rest of the leadership styles, since it helps set the course for the company to follow, and develops a clear strategy for the employees to comply with.

It is worth mentioning that, in contrast to Cooper, Johnson and Holdsworth, Northouse (2010) offers a slightly different classification that is, in a sense, more general than the above-mentioned one. Therefore, the features of each approach listed above can be found in the ones that are suggested by Northouse.

To show graphically the differences between the traditional approach offered by Northouse and the recent innovation with a few new types of leadership coined by Cooper, Johnson & Holdsworth (2012), it will be necessary to consider Northouse’s classification as well.

Trait Approach

The given approach seems to be quite close to the charismatic leadership style; as a matter of fact, trait approach combines the same elements as the charismatic leadership style.

The only difference is that in a trait approach, specific traits that allow a leader become a role model are listed, while the charismatic leadership style relies on the appeal of a person, implying that each appeal is individual.

Style Approach

A combination of the task-oriented and a people-oriented leadership styles, the given approach seems flawless for a company that does not need radical changes. Controlling both the organizational behavior and the production quality, this approach is truly a great find.

Situational Approach

Much like the contingency theory that is described below, situational approach presupposes that the leader of a group of people should seek for a unique solution for each conflict or complicated situation within a group of employees.

Unlike contingency theory, however, the given approach does not presuppose that there should be a bond between the manager and the employees.

Contingency Theory

The given theory of leadership makes it clear that there is no panacea for a problem within an organization – every single case must be handled in a unique manner by taking account of every factor standing in the way of the company’s progress.

Path-goal Approach

The path-goal approach dictates that the motivation rates among employees will get higher if the employees know exactly what goal they are striving for (Lussier & Achua, 2010, 161).

Leader-member Approach

Leader-member approach focuses on the relationships between the leader of a group and its members.

Transformational Leadership

Needless to mention, transformational leadership represents the exact same ideas as the transformational leadership style.

Demanding that the leader not only set the goals for the employees to achieve by a specific deadline, but also change their attitude towards their work, transformational leadership approach seems a perfect choice for the company that needs changes badly.

However, dry theory is not enough to see if the above-mentioned types of leadership can be considered viable. To see if the given theories actually make sense, an analysis of a real-life case study is required.

The case study below can be considered a solid proof for the fact that none of the leadership styles mentioned above should be considered a silver bullet – in each case, an individual approach that incorporates the elements of several leadership styles, must be applied to solve a particular problem.

Of all the theories listed above, the contingency theory, which states that for every case, a specific approach must be adopted, seems to work.

Case Study: The Change in Leadership Style in BT Takes the Latter to the Top of the UK Business Charts

British Telecom, also referred to as BT, has been known for quite long among both the British people and the rest of the world as one of the highest grossing telecommunication companies until the 1990s, when financial crisis embraced almost the entire world.

As soon as it became clear that most of the European and American companies were aimed at developing their economical strategies to tailor them to the on-coming globalization process, the BT realized that the time-tested leadership style served the company’s purposes no more.

Under the influence of outer economic factors, BT could no longer retain its top position in the UK business charts, which called for a change in the company’s policies.

It would be a mistake to claim that the leadership style chosen by the BT Group was flawed; rather, one should suggest that the chosen strategy had worn out its gimmick and was useless in the changing environment.

To start with, the BT Group has undergone several changes in the course of its history, and the strategy that the company followed in 1990s was not the initial one that the BT Group had started out with.

Originally a monopoly organization that handled the entire telecommunication system in Britain, the BT Group was obviously ruled in an autocratic style of leadership. As for the leadership style that the BT Group used in 1990, it could be defined as autocratic one.

Taking what is defined nowadays as path-goal leadership approach, the managers of the company chose a directive leader behavior that made them focus solely on getting the revenues for the company, while the needs of the employees, the relationships with the possible rivals and the further development of the company was not considered necessary.

It must be admitted, though, that the given way of managing the BT Group had been working up until the economical changes in the 1990s, when the very idea of a monopoly was considered inappropriate in the fast-changing market.

Even though in 1982, the BT Group finally faced a decent rival, Mercury, the need for changing the leadership style and choosing a more efficient leadership theory became fully obvious.

After the White Paper was publicized in 1991, it became clear that the VT had no longer the rights for monopoly on the British telecommunications; therefore, the time-tested leadership style that the BT Group used to rely on was no longer of any use.

It was necessary to adopt more flexible approaches, since the latter would have helped the company stay afloat in the atmosphere of tough competition. To make the situation even worse for the BT Group, the technological approaches had to be revisited again.

To their credit, the BT Group managed to find out the solution to the problem.

After conducting the analysis of the external factors that influenced the BT Group, as well as the obstacles for the BT within the corporation, the head of the company came to the conclusion that the British Technologies was supposed to undergo a serious organizational change, especially speaking of the leadership style adopted by the managers of the company.

To handle the difficulties and adapt to the current market the BT resorted to the situational approach, since the managers had not distilled a specific strategy for the company by that time; however, further on, the BT Group moved to the contingency model.

The advantages of the given model are clear – allowing the BT Group to adapt to the changes in the economical and financial environment, the given approach adds the company some flexibility.

Nowadays, BT can choose the adequate strategy based on such factors as the level of competition, the current demands in the telecommunication market, and the changes in the technological advances.

As the recently obtained data shows, the BT has become one of the leading providers of telecommunication services all over Britain:

Globalisation has changed the economics of business. Networked IT services enable organisations to work seamlessly across time zones and borders.

In order to help customers reach new markets, and improve productivity and operational efficiency, BT Global Services delivers the services they need to compete in a global market, in more than 170 countries. (BT, 2012, para.40)

Judging by the data provided by the BT group, however, there is still a lot to be done, since the chosen track still has its problems.

While the BT Group focuses on establishing relationships with partner countries and providing their services outside the UK, the threat that the rivals will take over telecommunication services in Britain grow.

It seems that the BT Group should also try to follow the Contingency Theory and try combine several approaches at once; for example, the company could continue develop their business overseas and at the same time promote more open company policies with the help of the leader–member leadership style.

While currently, the second quarter to September income in BT Group is the highest among the telecommunication services all over the United Kingdom, it is still worth keeping in mind that the revenues reached the same number, £4.5 billion, in the first quarter to 30 September 2012.

Hence, the company does not seem to have progressed over the past few months.

According to the example of the BT Group, the contingency leadership theory takes the first place among the currently existing leadership approaches.

While it does not involve radical changes, it helps a company adapt to the changes in economical, financial, political or any other factors that have their impact on the company’s productivity. While the BT Group still has a long way to go to keep its score just as high, the progress that BT made is truly incredible.

The given case is a graphic example of how a change in the leadership style can make a firm rise from the ashes.

Proving once again that situational leadership strategy inspired by the contingency theory is the best way to tackle the problems of a specific organization, the case of the BT Group shows that everything is possible with the right attitude and approach.

Reference List

Bass, B M, 2008, The handbook of leadership: theory, research and managerial applications, Free Press, New York, NY.

Betrocci, D I 2009, Leadership in organizations: there is difference between leaders and managers, University Press of America, Lanham, MD.

BT 2012, The BT Story. Web.

Cooper, C L., Johnson, S and Holdsworth, L, 2012, Organizational behavior for dummies, John Wiley & Sons, New York, NY.

Lussier, Robert N. & Achua, C F, 2010, Leadership: theory, application, & skill development. Cengage Learning, Stamford, CT.

Northouse, P G, 2010, Leadership: theory and practice. SAGE, Thousand Oaks, CA:.

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