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How does leadership influence organisational performance?

In this essay, I am going to look at what leadership involves and how this can affect an organisation’s performance from both a positive and negative viewpoint. It will also involve investigation into issues such as power, management and motivation and other important areas of an organisation that may be affected by leadership. I will define various types of leaders and characteristics, which make them a good or indifferent person with power, and link them back to whether they are effectively influencing the organisations performance. To begin my essay, I am going to define a leader.

There have been many interpretations and definitions of the term ‘leadership’ throughout the years. It is a subject we know quite little about compared to a subject such as management theory. The definition I have chosen to use is from Laurie J Mullins, he defines leadership as: “A relationship through which one person influences the behaviour or actions of other people. ” Mullins (2002) p. 904 This suggests influence over others and having the ability to get people to do things willingly with or without the use of pressure. There is also a need to have a psychological contract with your followers.

(Metcalfe, N. 29/11/02. )

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There is a huge link to a leaders ability to motivate and this is an area I intend to address in a later part of my essay. First of all I would like to look into theories surrounding leadership. The ‘Trait’ theory, also known as the ‘Great Man’ theory, suggests that leaders are born and not made, they foster inherent skills and have natural characteristics or personality traits which make them perfect leaders. This theory avoids focusing on the job itself but upon the man or woman who is to perform the job.

Drucker (1995)1 described leadership as: “Leadership is of utmost importance. Indeed there is no substitute for it. But leadership cannot be created or promoted. It cannot be taught or learned. ” Mullins (2002) p. 261 This quote says that leadership is extremely important and is something that occurs naturally, therefore the ‘Trait’ theory is appropriate in order to find the people with perfect leadership qualities. There are hundreds of traits which can be attached to leaders e. g. good communication skills, charisma, confidence, motivated, persuasive…

However, researchers have had great difficulty in finding one set of features which defines a perfect leader. It is almost impossible to make this theory work and yet there are still people working on it today. No one set of traits has been agreed upon as being the most important. This is where this theory fails; it is inaccurate unless it is placed into a context. It is also difficult to say that the inborn qualities of a leader is all that is required to do the job, it is often the case that special techniques are required as well. Naturally perfect leaders can influence their followers easily.

This is going to have a direct effect upon an organisations performance by increasing productivity via effective leadership. (Mullins 2002) Another theory surrounding leadership is that of an approach towards the functions of leadership – The ‘Functional Approach’. In any group task, leadership is always present and this approach looks at how a leader is affected by the behaviour of the group of followers. (Mullins 2002) “The functional approach believes that the skills of leadership can be learnt, developed and perfected. ” Mullins (2002) p. 262.

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