Leadership and Organizational Effectiveness Abstract
The behavior or performance within an organization is largely affected by the kind of leadership and according to many leadership researchers, the kind of leadership with the greatest impact is transformational leadership. This is the kind of leadership in which a leader takes a visionary approach and through passion and enthusiasm inspires people to follow.
The vision is created by developing a view of the future personally, by the senior team or through a series of discussions which consequently acts as a precipice for converting potential followers to join in ensuring that the vision is achieved (changingminds.org, n.d). Organizational effectiveness refers to the measure of how an organization is effective in its performance by assessing a number of parameters such as profits, turnover and return on assets. In order to understand the behavior of the organization, the concept of effectiveness is of great vitality.
Since leadership has a direct impact on effectiveness, an understanding of traits and leadership skills is also paramount. This paper will discuss how organizational effectiveness is being assessed in my institution and then suggest on ways to improve the criteria for effectiveness.
2.0 Personality traits that contribute to Leadership effectiveness
From different researches on leadership traits related to organizational effectiveness,
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Leaders who desire to achieve high goals must be ready to take risks and by doing this, they are able to motivate and encourage the staff by approaching challenges with confidence instead of procrastinating or ignoring them (Chance & Chance, 2002). Therefore, self confidence is an essential trait in a leader who endeavors to ensure high levels of effectiveness in an organization.
Another important trait is internal locus of control which enables a leader to be constantly aware and in full understanding of the fact that events in the life of someone are not connected or determined by external circumstances or events but rather what one personally does directly influences what happens in the particular area of responsibility. Leaders with this trait have the capacity to take more initiative and create different approaches of solving problems since they take full responsibility for their own actions (Chance & Chance, 2002).
Integrity is indispensable as a trait in a successful leader since it entails exercising ethical behavior, trustworthiness, and honesty. Deceptive school leaders are bound to lose credibility with teachers, colleagues, and parents since they portray a picture of being manipulative and exploitative since they are self centered. In addition, leaders who lack integrity are likely to lay blame on others for their own mistakes.
Another trait is emotional maturity which helps leaders be aware of their strengths and weaknesses. Through emotional maturity, leaders are able to capitalize on their strengths in achieving organizational goals while at the same time overcoming their weaknesses since they are also receptive to criticism that is constructive.
Effective leadership is accompanied by the desire to succeed and produce good results. This trait is called achievement orientation and can be positive or negative with regard to the effectiveness of the leader. In order to contribute to the effectiveness of the leader, achievement orientation must be combined with the desire acquire power which is geared toward benefiting both the organization and the people working in the organization (Chance & Chance, 2002).
The effectiveness of a leader is also influenced by the desire for affiliation. A leader who wants to gain acceptance and be liked by others must exercise association with others so as to avoid making unpopular decisions and also keep conflicts at bay. This is because, affiliation brings people close to the leader and therefore the leader can easily consult on issues that require to be tackled and how people in the organization would like them handled.
Through this affiliation, a leader exerts influence on the followers who now can also show a lot of cooperation in working toward realization of the goals set by the organization. An internal drive to have power to influence others to the benefit of the organization is also an important trait of a leader who wants to gain effectiveness in leadership. However, this power cannot add to the effectiveness of the leadership or of the organization if it is used for one’s own benefit (Chance & Chance, 2002).
3.0 Skills relevant to leadership
Organizational leadership requires that a leader acquire certain skills relevant to the organization since this will have a direct impact on the effectiveness of the organization. These skills include interpersonal skills which involve gaining an understanding with regard to the behavior of human and group processes, discernment of motives and feelings of others in addition to creating a good platform for effective communication and ability to persuade others.
Technical skills entail gaining knowledge related to the specialized activities that are done in the organization or in a specific area or unit of specialization which the leader supervises. The mode of acquisition of technical skills is via training in the formal education and also through experiences. The other group of skills is in relation to the ability of the leader to constructively reason and think also known as conceptual skills. These include deductive and inductive reasoning, thinking logically and creatively and having the ability to analyze situations (Chance & Chance, 2002).
4.0 Approaches for measuring organizational effectiveness
Organizational effectiveness is a measure of performance in achieving the organizational goals with the given resources and means. It is therefore a reflection of how well an organization is equipped to cope and survive the stiff competition in the present highly competitive business world and also its ability to expand and develop through adopting certain creative strategies in future (scribd.com, 2009).
Organizational effectiveness can be measured mainly using four different approaches that is the goal approach, the process approach, the system resource approach and the multiple constituency approach. The different approaches exist because organizations face diverse situations in terms of the products they produce, the stage of development in which they are operating, organizational membership and the environmental conditions in their locations (Field, 2002).
4.1 The Goal approach
This is the most widely used approach whose assessment of the effectiveness is based on measuring the extent which an organization has gone in realising its goals. It is regarded as the most logical approach in assessing organizational effectiveness although it has several weaknesses. One weakness is the fact that the goals set by an organization may change from time to time particularly if the goals are short term. This shift in the goals may result from influences of external factors, internal changes or due to the interaction of the organization with its environment. Another shortcoming of the goal approach is that the goals set by an organization may be many and conflicting thus making it difficult to assess the effectiveness (Cheng, Bell, & Hsu, 2002).
However, the approach is applied based on the fact that various organizations have an ultimate goal which they are striving to achieve and therefore this goal can be empirically identified and the progress made towards achieving it measured. Under this approach, a number of valuables can be measured including productivity, quality, utilization of environment, efficiency, profits or returns, morale of the employees, stability, satisfaction and flexibility adaptation (scribd.com, 2009).
4.2 The Process approach
The focus of this approach is mainly on the functional and integration aspects of the organization in which the effectiveness of the organization is assessed by determining how smooth and effective the internal processes of the organization are as well as those involved in the general operation. However, when an organization is found to be having effective operations, it does not automatically imply that the organizational effectiveness is also very high since the total efficiency of different components may not translate into overall effectiveness. Therefore, this approach also carries with it some limitations (Cheng, Bell, & Hsu, 2002).
4.3 The System Resource approach
The main area of focus of this approach is the evaluation of the relationship between the organization and the environment within which the organization is located. In determining the organizational effectiveness using this approach, the first criteria to assess is the ability of the organization to adapt to the environment or the system.
This determines how the organization is able to react with flexibility to the changes in the system. The second criteria to assess is the extent to which the employees have knowledge and understanding with regard to the goals of the organization which creates a sense of identity. In addition to how the employees understand the goals, it is also vital to assess how the outsiders perceive the goals.
Another important criteria is the capacity of the organization to test reality which means the ability to deeply search out environmental properties, perceive them with accuracy and also interpret them correctly. The last criteria used by this approach in assessing organizational effectiveness, is the evaluation of how different subparts of the whole organization integrate with each other without conflicting in their purposes (scribd.com, 2009).
4.4 The Multiple Constituency approach
The effectiveness of an organization under this approach is determined by considering the opinions of different constituent groups of the organization including customers, suppliers, employees, managers and the government. By controlling these critical constituencies, the effectiveness of the organization can be enhanced.
A unique characteristic of this approach is that it integrates both the system resource approach and the goal approach in measuring the effectiveness. Similar to the goal approach, the stated objectives of each relevant constituency are taken and compared with the overall actual attainment of the organization and just like the system resource approach, the objectives laid down for each of the different constituencies which provide the necessary organizational resources such as suppliers, customers and government are handled within this approach (scribd.com, 2009).
5.0 How organizational effectiveness is being measured in my institution
5.1 Employee growth and development
This is an important parameter which my institution is currently applying to assess the organizational effectiveness. The importance of providing opportunities for employee growth and development cannot be overemphasized since it is a precipice for improved productivity and improved work experience. It also enhances the quality of work as well as helping to attract and retain highly qualified and experienced workers in addition to improving the motivation and job satisfaction of the employees (phwa.org, 2010).
Based on these facts, the department has endeavored in providing ample opportunities for employee growth and development such as leadership development programs, internal career development programs, and outside and in-house training sessions to impart skills in the employees. To assess the organizational effectivenes, the level of provision of these opportunities is determined from time to time since it is central in enhancing quality work and output.
5.2 Sales growth
This is an important component of growth which in combination with profitability points to future financial performance of an organization. Since the shareholders seek to get profitability in addition to increased sales, my institution is keen to ensure that increased sales also come with the targeted profit margin so as to keep the shareholders in the business.
Growth in sales and increased profitability is carefully assessed since it acts as a pointer towards the accomplishment of financial goals in determining how effective the organization is. It also determines the level to which operational systems of the organization have been developed to support its daily operations (mgtsystems.com, 2004).
5.3 Growth in total assets
This is an important measure of organizational effectiveness and which has been applied in my department to evaluate the ability to continuously attract capital. The assessment is done by determining the growth in the amount of both operating assets and the total assets that the organization has attracted in a given period of time.
The results indicate how the organization is performing by looking at improvements or decline in the amount of these assets between different time periods. A decline is an indication of reducing effectiveness and therefore warrants a change in the operations of particular areas while an increase is a sign of appropriate operational systems in the department and in the whole organization.
5.4 Leverage, Cash Flow and Liquidity
These are important measures of performance in the organization which play a major part in assessing the effectiveness of the organization. Each of these measures however touches on separate components of the whole aspect of organizational performance. Leverage measure refers to the organization’s financial structure basically addressing the capital structure as a component of returns on equity including other measures of profitability. Liquidity describes the ability of an organization to meet its financial obligations within time by measuring its ability to convert its assets into cash (Hofer & Carton, 2008).
In measuring the effectiveness of the organization, the organization is doing well if the assets it owns can cheaply and quickly be converted to cash. The logic behind this is that the more the organization is able to create readily accessible and enough capital, the more chances it has for continuing to operate even in times of financial crisis. If the assets can be cheaply and quickly converted to cash, then the assets are liquid and a measure of this liquidity is an aspect of the organizational performance. My institution has applied the liquidity measure to assess the performance in terms of its ability to survive in case of financial crisis.
The institution also applies the cash flow measure to assess the performance towards meeting its financial goals. Cash flow basically entails measuring the amount of cash that the organization has generated and the sources of the cash and then relating the results to the cash demands of the organization.
The significance of cash flow measures is two fold. One is that it reflects the potential of the organization to meet the current cash needs and the other is that it indicates the capacity of the firm to pay cash to the resource providers. Consequently, the availability of cash to pay the resource providers confers a financial benefit that they are able to get from the firm (Hofer & Carton, 2008). Therefore, my institution employs this measure so as to give the resource providers confidence and a reason to continue their operations in the institution.
6.0 How to improve the criteria for organizational effectiveness
6.1 Promoting knowledge
With the changing technology and increased competitive pressures, the criteria for assessing the effectiveness can be improved by encouraging and providing opportunities for learning to employees. This is because amount, complexity and availability of information have increased and therefore employees see the skill of learning as a vital aspect of continual training and education. With the acquired skills, the employees are equipped to fully and efficiently apply the new knowledge in their work thus facilitating the enterprise to meet its competitive challenges and strategic goals.
6.2 Reading, writing and computation
These are important skills that workers in the organization need to have to ensure higher productivity. Writing skills is a useful tool in establishing communication with customers, transferring new ideas into the place of work in a successful manner and also in documenting various competitive transactions (Chien, n.d).
The fact that the organization has embraced computer technology means that workers have to be very good in computation and reading skills to effectively use the technology to enhance productivity and facilitate transactions. While computation is applied widely in conducting inventories, making reports on production levels and measuring machine specifications, writing skills remains a fundamental tool in communicating policies of the organization, concepts and procedures in different aspects of operation.
The organization has employed people with competitive skills in these areas in addition to providing opportunities for the advancement of the same. This is in light of the fact that without these skills, productivity would be hampered, the strategic goals of the organization would also be difficult to meet and competitiveness in the market would be greatly impaired.
6.3 Enhancing developmental skills
This is a crucial aspect of improving the criteria for measuring organizational effectiveness since it is the building block of professional growth of the employees. Developmental skills also entail cultivating personal management skills which are key in promoting motivation, focused work life of the employees and consequently organizational productivity.
For the organization to increase its ability of meeting the strategic goals and mission, it is always important to promote a good foundation of motivation and self-esteem of employees since it facilitates the development of the right attitude and desire to achieve and contribute to the success of the organization (Chien, n.d). Therefore, the criteria for measuring the effectiveness of the organization can be improved by creating an environment that suits personal developmental and management skills of the employees.
6.4 Promoting creative thinking skills
Having employees who are able to think critically is a sure way of improving productivity and problem solving ability of the organization. The importance of critical thinking in improving the criteria for assessing organizational effectiveness is related to the fact that through having employees who are good problem solvers and innovative, the competitive advantage, service delivery and productivity of the organization is elevated. Through achieving such components of operation, more investors are attracted and more capital is attracted into the business.
When assessing effectiveness using criteria such as productivity, cash flow or liquidity, a better level of organizational effectiveness is likely to be realized in an organization with employees who are innovative and excellent problem solvers than that whose employee’s problem solving ability is not as good. Therefore, the criteria used in my organization can be greatly improved by identifying and employing workers with such qualities as critical thinking and also by encouraging workers to cultivate a culture of thinking outside the box while handling different problems.
6.5 Sharing employee success throughout the organization
In order to ensure continuity of success, the organization has to create an environment which allows for employees who have succeeded in redefining and enhancing their jobs to share success with other employees so that their work can also be improved. This allows the employees to learn from each other in a bid to develop their performance and contribute their best to the organization. To improve the criteria for measuring effectiveness of the organization therefore, it is important to create such an avenue which allows sharing of knowledge and experiences.
Organizational effectiveness is an important indicator of how well an organization is meeting the laid out objectives by assessing various parameters. Effective leadership is fundamental for effectiveness in the performance of any organization to be achieved. Transformational leadership has been associated with the greatest influence with regard to organizational effectiveness.
Various approaches can be used to measure the effectiveness though each has limitations and assumptions that must be considered before deciding which approach to use. In order to improve the criteria for measuring the effectiveness, it is important to create an environment that enhances increased productivity.
Chance, E. W., & Chance, P. L. (2002). Introduction to educational leadership & organizational behavior: theory into practice. New York: Eye on Education.
changingminds.org. (n.d). Transformational Leadership. Retrieved August 23, 2010, from http://changingminds.org/disciplines/leadership/styles/transformational_leadership.htm
Cheng, K., Bell, R. C., & Hsu, C. (2002). Transformational Leadership and Organizational Effectiveness in Recreational Sports/Fitness Programs. Retrieved August 23, 2010, from http://www.thesportjournal.org/article/transformational-leadership-and-organizational-effectiveness-recreational-sportsfitness-prog