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Organizational Performance and Leadership

In today’s extremely competitive business environment, all organizations face critical challenges to survive successfully. Successful organizations are ones which have created an organizational culture and structure based upon effective leadership. Effective leadership plays a significant role in managing human resource which ultimately results in raising the organization performance and productivity. Situational leadership approach has greatly contributed towards the achievement of efficient organizational performance and sustainable competitive advantage through managing subordinates effectively.

There are mainly two styles of leadership which are boss-centered and subordinate-centered leadership style which are adopted according to the situation. Managing the major forces in the manager, subordinates and situation successfully results in increasing the organizational performance and productivity by having a highly motivated and efficient human resource. Significance of Leadership for Organizations Leadership has a significant role in shaping the organizational structure for creating efficient and effective work processes and business systems.

Effective leadership is a key toward the organizational success in the long run. Today, all organizations aim to achieve sustainable competitive advantage though motivated and efficient workforce. Thus, effective leaders in the organization can bring this organizational exchange where human resource becomes the competitive advantage. In today’s global business markets, it has become highly challenging to survive

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competitively, so leadership can greatly contribute to raise organizational performance to achieve organizational objectives (Ball, McCulloch, Frantz & Minor, 2006).

Situational Leadership effect on Organization’s Performance There are various leadership theories and processes that are adopted by leaders to create a foundation and understanding for the better practice of leadership in today’s highly competitive and global environment. Mainly, the charismatic leadership theories, transformational leadership theories, social cognitive leadership theories, and trait leadership theories are gaining importance to deal with people in the workforce.

The contemporary leadership approach has given major emphasis towards situational leadership ship approach where unique combination is developed from effective leaders, followers who are the team members or subordinates and different leadership situations. It is mainly based on different situations that leader has to act accordingly so it is highly effective in today’s dynamic global business environment, where unforeseen situations and changing trends require different strategic approaches towards managing human resource (Luthans, 2003).

Making rational and effective decisions is an art which leaders play to achieve organizational objective and performance. Through situational leadership, it has become clearer and simpler to apply leadership styles which fit within that situation. There are several leadership situations and decisions that help in achieving organizational performance. The Tannenbaum and Schmidt Leadership Continuum: This leadership situation focuses upon boss centered leadership and subordinate centered leadership through a continuum which starts from manager or leader making all decisions towards the freedom given to subordinates to take decisions.

This situation has significant importance in today’s organizations because there are some employees who require guidance and direction from the leader whereas some are those who are willing to take responsibilities and participate in the organization’s problems and decision making process. So, achieving maximum capabilities of the workforce is very necessary to achieve efficient organizational performance, which can be achieved through practical and rational decision making.

For achieving organizational performance though Tannenbaum and Schmidt leadership situation, it is vital to understand the three forces which are forces in the manager of the organization, forces in the subordinates or employees and forces in the situation (Robbins, Millett, Cacioppe, & Marsh, 1998). Forces in the manager: These consist of manager’s values which are important for organizational efficiency, growth of subordinates and success of the organization in the long run.

Another influencing force in the manager is the level of confidence and trusts that manager or leader has on his subordinates and the more the trust, the most it will be democratic and subordinate centered leadership style which greatly contributes towards raising the organizational performance. Also, the manager’s personal strengths play a major role where his/her leadership qualities and utilizing them effectively leads towards managing people more successfully. And the manager ability towards tolerating ambiguity helps to be positive towards uncertainties and develop alternative strategies to deal with uncertainties more efficiently.

All these forces in the manager create a significant part of organizational structure where managing human resource effectively and efficiently is the key to achieve organizational success and competitive advantage (Mulec, 2006). Forces in the subordinates: For an effective leader, it is highly important to understand the forces in the subordinates so that he can manage them accordingly following either boss centered leadership style or subordinate centered leadership style.

For raising organizational performance and success, manager can become an effective leader only by identifying the different types of subordinates in the workforce and leading them accordingly. For adopting a subordinate centered leadership style, the subordinates should influenced by the following forces which are their ability to understand and identify organizational goals, they are experienced and knowledgeable to deal with organizational problems, they have a high need for independence and are responsible in taking work pressure.

All these forces arise in the subordinates through an effective organizational structure where organization’s major focus is towards human resource and strategic human resource management. This helps in motivating employees to work efficiently taking responsibility of work and participating in organization’s planning and decision making process. Situational leadership has greatly contributed towards raising organizational performance by making managers and leaders understand the forces which have a significant affect upon organizational performance (Robbins, Millett, Cacioppe, & Marsh, 1998).

Forces in the situation: For effective decision making, managers work hard to adopt leadership styles which help in making rational and effective decisions in the organization. The situations have a major impact upon the way manager acts as a leader in various situations to achieve maximum productivity of the human resource. First of all, the type of organization whether it is large or small, the type of market is it catering to and the size of working groups determine which type of leadership style should be followed.

For very large organizations, following subordinate centered leadership style is impractical and in appropriate because managing so many subordinates becomes very difficult. In such situations, adopting an approach where there is a balance between the decision making powers of boss and subordinates is preferred. Moreover, effectiveness and efficiency of teams and work groups helps in determining how a manager can deal with the members and influence them for better performance in the organization.

Also, managers should be able to identify whether the group members or subordinate have the expertise to solve organizational specific problems, and if not then he should follow boss centered leadership style. All together, all these three forces must be coordinated together for long term success through rational leadership approach that aims towards right decision making. There should be an effective democratic leader for responsible and hardworking subordinates in subordinate centered leadership style (Gannon, 2009).

Leadership Styles All individuals should give importance to leadership and how to develop communication styles to inspire and influence people in order to achieve goals. A leader is one who can bring a positive change in its workplace by influencing others to work harder as well as giving rights direction to people to reach the future goals. Every manager aims at achieving goals but due to ineffective leadership and ineffective communication in the organization leads to failures.

Leaders should adopt an assertive communication style while dealing with people to increase organizational performance and productivity. Assertive communication style is where you respect your own rights as well maintained others rights when achieving objectives. This is mutual understanding and effective communication that leads to the success without harming and exploiting any one’s rights and capabilities. Being logical and assertive are key elements of effective leadership that leads to positive results in developing good relations with people and managing them effectively (Bhindi & Duignan, 1997).

Envision: This leadership style is where a clear picture of the future is developed in the minds of subordinates to achieve goals successfully. A vision-oriented organization encourages employees through an effective leader to work with determination to achieve organizational goals in the future. Creativity: Creativity is the key towards success in today’s global and competitive environment where customer expectations are getting higher and higher and satisfying them has become a challenge.

A creative leader is a person who can encourage employees to think creatively in all aspects and operations of the business, and that is how an effective leader brings positive results with minimum resources (Gannon, 2009). Energize: Here, motivating and creating a positive attitude in employees so that their behavior and performance becomes positive and effective. The leader must show his personal excitement and confidence in the organization so that his employees carry that attitude too and their morale increases by looking towards their leader (Luthans, 2003).

Enable: An affective leader plays the role of psychologically helping and supporting people to perform well to achieve goals. This is an effective way of communicating with employees to boost their morale and lead to higher performance. Managers and leaders should develop an effective leadership style with empathizing and providing support creates a better understanding between the leader and his team members and thus resulting in success (Schein, 2000). Two-way Communication:

Effective leadership occurs when there is effective flow of two-way communication in the organization. Leader must be able to communicate clearly and affectively as it leads to ultimate success of an organization. Communicating leadership today in organizations is very necessary to achieve shared and overall goals of an organization. We can understand this by defining communication and its styles that affect the behavior and performance of employees, hence leading to the achievement of organizational goals.

Communication is an important part of management and organizational behavioral studies, as creating an organizational culture where effective communication takes place leads to better understanding and achievement of organizational objectives. Leadership and communication are linked together as they greatly contribute in achieving organizational objectives of high performance and growth. Therefore, managers in the organization must put great emphasis towards integrating leadership with effective communication (Borrington & Stimpson, 2004).

Communication Styles: The two communication styles which are interpersonal communication and communication across cultures primarily lead to effective leadership. An effective leader should put great emphasis upon the interpersonal communication, which is the flow of information from one person to another. This leads to effective understanding and relationships between the workforce and information is thoroughly understood and grasped by all employees and they respond effectively towards it.

For example, by conducting interviews at weekly or periodical intervals, where employees’ issues as well as organizational issues are dealt and discussed with the manager and the responses of each employee is given significance to understand human resource issues and other organizational problems (Schwahn & Spady, 1998). Moreover, developing an effective channel of communication for its workforce where the main focus is upon having interpersonal communication between the employees to minimize conflicts and issues in the organization .

And lastly, communication across cultures is a new concept that applies to organizations that go global and have to survive competitive in the global business environments. Therefore, in such case, the leader, leader has to deal with business partners and customers belonging to different cultures and it require effective leadership quality of communicating well (Luthans, 2003). Motivation and influence: Motivation in the organization is one of the top most important factors that lead to success.

Motivation plays a highly important role in increasing the efficiency, effectiveness of the performance and output levels in the organization. Motivation of employees should be the prime focus of an effective leader in order to achieve sustainable competitive advantage. It is the advantage over competitors and when the employees of an organization give performance that cannot be imitated by others is the competitive advantage (Hsu & Tsuen, 2000). In today’s global environment, motivated and efficient workforce leads to the success of an organization through achieving maximum productivity, performance and success levels.

Organizations can achieve competitive advantage through highly motivated and responsible human resource who aims towards efficiency of work for accomplishing organization’s objectives. Hence, leader should give major emphasis towards this concept of organizational behavior where the employees are considered the real asset to achieve organizational success. Leader can make the employees feel honored and motivated by giving them chances of growth and personal development through his effective situational leadership approach (Hirst & Thompson, 2006). Cultural Flexibility:

In international market, cultural diversity is an important issue and managing cultural issues within the organizational environment is highly important. Leaders must have the skills to manage, recognize and encourage the value of diversity in the organization, because it leads to innovative ideas and better performance. Leaders should be able to create an organizational culture, which is highly flexible in terms of maintaining cultural diversity, and encourage employees belonging to different cultures to work together with mutual understanding and cooperation.

HRD Skills: Human resource is the central part of leadership effectiveness so leader must possess human resource development skills for creating an environment where employees are given major importance and human resources strategies are developed that aim to satisfy employees’ goals as well as organizational goals. Human resource development mainly deals with three functions, which are training of employees, employees development and education of employees.

An effective leader can concentrate upon HRD skills by conducting training programs, transmitting information and experience to all employees, involving them in organizational success and providing career counseling (Yehuda, 1996). Recommendations To enhance the organizational performance in the organization, leadership approaches have played a significant role in helping managers to become effective leaders. Situational leadership approach has helped today’s organizations to become highly competitive in meeting the changing global market trends.

An effective leader is a person who is able to bring a positive change in the organization by managing human resource in all situations. If an organization requires restructuring and redesigning of the organizational structure, then it is an effective leader who can reduce the resistance to change by employees and create a productive and positive organizational culture. To survive successfully by meeting the changing trends of the global market and intense rivalry among competitors, it is highly necessary for effective leaders of an organization to evaluate all possible strategies to achieve long-term organizational goals.

In today’s competitive environment, two major components that must be the major key towards success are innovation and self management of learning. These concepts play a significant role in bringing positive outcomes for organizations that are facing the most serious challenges of the global market (Boaden, 2006). Employee Empowerment: Employee empowerment is an HR strategy today, which aims to achieve maximum effectiveness and efficiency of the workforce. Therefore, effective leader needs to build an organizational culture where empowerment of employees is implemented throughout the organization.

This will lead to employees accepting responsibility of job willingly and work practices will improve leading to high performance. An effective leader must be able to develop “empowerment of employees’ so that it encourages employees to participate actively in the organization’s activities to achieve success. This way the future contingencies and challenging environment will be dealt more accurately and efficiently by the collaborated efforts of the whole workforce trough the direction and vision of an effective leader.

Employee empowerment allows employees to make effective decisions and try out new ideas and practices to achieve more successful ways of increasing productivity and performance (Hsu & Tsuen, 2000). Self management of learning: This leadership skill is highly essential as continuous learning of new knowledge and skills will help a leader become more competent and effective in managing people and the business in today’s global competitiveness. Leaders must be self- learners to deal with dramatic market changes which can easily affect the organization and create hinderers in the achievement of goals.

Moreover, a paradigm shift is occurring among people as now the market environment requires individuals and leaders to think critically and analyze different solutions to problems through diverse teams where people from different cultures work together to see different perspectives and come to an effective decision (Covey, 2004). Innovation in the organization: Organizations can become innovative when its employees have innovative ideas and ability to convert them into reality for organizational success.

Organization’s different characteristics have a major impact upon the innovation process which allows employees with innovative ideas to experiment their ideas to achieve positive results in today’s highly dynamic environment. It is not essential that the results will be beneficial for the organization but continuous efforts and hard work can help in achieving the desired objectives to make the organization more competitive in the global environment. Therefore, leader must provide plenty of information to the employees and create an organizational culture which encourages them to be innovative (Schein, 2000).

Moreover, a manager can develop common objectives and goals of the organization which support the organization’s overall objectives. The interaction and coordination of all employees in the organization will lead to the creation of innovative ides f or long term growth. Managers must possess effective qualities of a leader to manage the human resource and resources efficiently. Conclusion Leadership is the key to bring a positive and significant impact upon the subordinate’s behavior and performance.

In todays highly globalize environment, organizations can reach success and growth by the great efforts of the leaders who possess innate abilities of dealing with people and challenges. Situational leadership approach has become a success factor for organizations today by managing and influencing human resource effectively in different situations. The leadership roles and styles adopted by leaders such as envision, energize, motivation, creativity, innovation, human resource development skills and communication skills play the most important role in managing and leading subordinates effectively.

An effective leader can convert the human resource of its organization into a competitive advantage for the long-term organizational growth as people are the most important asset of an organization. There are some recommendations that must be implemented by an effective leader so that businesses can cope up with the challenging market environment and market forces to achieve the organizational goals. These are basically the developing of organizational culture, which is innovative, learning, and flexible where the leader encourages employee empowerment and self-management of learning.

Leadership qualities of a manager can lead to the success of a business while facing the most critical challenges of the global market. References Ball D. A, McCulloch. H, Frantz . L & Minor. M. S. (2006), International Business (10th Ed), Human Resource Management, McGraw Hill, pp 434-440 Bhindi, N. & Duignan, P. (1997), Leadership for a new century, Educational Management & Administration, vol. 25, no. 21, pp. 117-133. Boaden, R. J. (2006), Leadership development: Does it make a difference? , Leadership & Organization Development Journal, vol.

27, no. 1, pp. 5-27. Available from ProQuest database Borrington. K & Stimpson. P. (2004), Business Studies (2nd ed. ), Leadership, pp. 35-51 Covey, S. (2004), The 8th HABIT: From Effectiveness to Greatness, Simon and Schuster, Kingsway, London, pp. 352-359. F. Luthans. (2003), Organizational Behaviour, Organizational Design and Culture. pp. 561-580 Gannon. M. J. (2009), Understanding Global Cultures: Metaphorical Journeys Through 28 Nations, Clusters of Nations, and Continents, Cross Cultural Differences ( 10th ed. ) Hirst, P & Thompson.

G. , 2006, ‘The problems of ‘globalization’: International economic relations, national economic management and the formation of trading blocs’, Journal of economics. pp. 257–295. Hsu & Tsuen. H. , (2000), Gaining a Competitive Advantage through the Refinement of Measuring Consumer Involvement, Journal of Marketing Management. pp1-6 Mulec, K. (2006), Positive professional leaders: Aspects to consider in leadership development, Leadership & Organization Development Journal, vol. 27, no. 1, pp. 66-81. Available from Proquest Database

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