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Leadership Style and Organisational Effectiveness
20 July 2012
SHANMUGA PILLAIYAN (010194)TAN CHEE HOAW (010120)KEVIN CHOO (010226)HELMMY SHAHNY MOHD MUSTAFA (010268)AMRI MOHD SOFIAN (010563)GURMEET SINGH (002967)
Agenda
1. Introduction – What is Leadership?
2. Leadership Models & Styles
3. Case Study – Apple Inc
I. Historical Milestones
II. Steve Job’s Management Style
III. Impact on Organisation Behaviour
IV. Evidence of Organizational Effectiveness
4. Comparisons with Other Leaders
5. Conclusion
Slide 2July 2012Nottingham Malaysia
Nottingham Malaysia
What is Leadership ?
“The ability to influence a group toward the
achievement of goals” (Robbins 2003)
July 2012Slide 3
Robbins, Stephen. Organizational Behavior. 10th ed. Upper Saddle River, NJ: Prentice, Hall, 2003.
“Management is doing things right,
leadership is doing the right things” (Warren Bennis and Peter Drucker)
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Leadership TheoryThe Evolution of Leadership Theory
1940 1950s 1960s 1970s 1980s 1990s
July 2012Slide 4
Trait Theory
Behavioural Styles Theory
Contingency Theory
Transformational Theory
Transactional Theory
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Leadership TheoryTransformational Leader
1. Leaders stimulate and inspire(transform) followers to achieve extraordinary outcomes
2. Characteristics:
I. Leadership is proactive
II. Works to change the organizational culture by implementing new ideas
III. Employees achieve objectives through higher ideals and moral values
IV. Motivates followers by encouraging them to put group interests first
V. Intellectual stimulation: Promote creative and innovative ideas to solve problems.
July 2012Slide 5
People will follow a
person who inspires them.
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Leadership TheoryTransactional Leader
1. Leaders promote compliance of his followers through both reward or punishment.
2. Characteristics:
I. Leadership is reactive
II. Works within the organizational culture
III. Employees achieve objectives through rewards and punishments set by leader
IV. Motivates followers by appealing to their own self interest
V. Management-by-exception: maintain the status quo; stress correct actions to improve performance
July 2012Slide 6
Subordinates are not
self-motivating
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Leadership TheoryContingency Theory
1. According to the contingency approach of leadership, a single leadership style is not applicable to all situations.
2. The 3 contingency models of leadership styles.
I. Fiedler’s Contingency Model
II. Hersey and Blanchard’s situational theory
III. Path Goal Theory
IV. Tannenbaum and Schmidt’s leadership continuum
July 2012Slide 7
a single leadership style is not applicable
to all situations
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Leadership Style
Research done by the consulting firm Hay-McBer Associates (Harvard Business Review, 2000) , found six different leadership styles as the following:
1. The coercive style
2. The authoritative style
3. The affiliative style
4. The democratic style
5. The pacesetting style
6. The coaching style
July 2012Slide 8
Nottingham Malaysia
Leadership Style-Details
Coercive Authoritative Affiliative
Mode of OperationDemand immediate compliance
Mobilize people toward a vision
Create emotional bonds and harmony
The style in a phrase “Do what I tell you.” “Come with me.” “People come first.”
Advantage Efficient and effective
Maximizes people's commitment toward organisation goal, enhance clarity and flexibility
Drives up trust and flexibility, build up sense of recognition and belonging.
DisadvantageErode flexibility, motivation and responsibilty.
Failed when a leader is working with a team of experts who are more experienced than him
Allow poor performance to go uncorrected, and leaves people rudderless
When the style works best
In a crisis, to kick start a turnaround, or with problem employees
When changes require a new vision, or when a clear direction is needed
To heal rifts in a team/ motivate people during stressful circumstances
July 2012Slide 9
Nottingham Malaysia
Leadership Style-Details
Democratic Pacesetting Coaching
Mode of OperationBuild consensus through participation
Expect excellence and self-direction
Develop people for the future
The style in a phrase “What do you think?” “Do as I do, now.” “Try this.”
Advantage Drives up flexibility and responsibility
Fast pace, focus and result oriented.
Coaching improves flexibility, responsibility and commitment.
Disadvantage
Endless meetings and elusive consesus. People end up feeling confused and leaderless
Erode Flexibility and responsibility. Lack of commitment.
Time consuming
When the style works best
To build buy-in or consensus, or to get input from valuable employees
To get quick results from a highly motivated and competent team
To help an employee improve performance or develop long-term strengths
July 2012Slide 10
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Organisational Climate
The term organisational climate was first defined by psychologists George Litwin and Richard Stringer. It refers to six factors that influences working environment:
1. Flexibility- How free employees feel to innovate.
2. Responsibility- Sense of responsibility to the organization.
3. Standards- The level of standards that people set.
4. Rewards- The sense of accuracy about performance feedback and aptness of rewards.
5. Clarity- The clarity people have about mission and values.
6. Commitment- The level of commitment to a common purpose.
July 2012Slide 11
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Leadership Impacts Company PerformanceLeadership has a direct impact on Organisational Climate and Organisational Performance.
July 2012Slide 12
ORGANISATIONALCLIMATE
1. Flexibility2. Responsibility3. Standards4. Rewards5. Clarity6. Commitment
LEADERSHIP
1. Leadership Models
2. Leadership Styles
ORGANISATIONAL EFFECTIVENESS
1. Product Innovation
2. Profit3. Share Price
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Apple Inc.'s Historical Milestones
July 2012Slide 13
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Steve Job’s Leadership Style
July 2012Slide 14
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Steve Job’s Leadership Characteristics*
Visionary
Persuasive
Gifted
Inspirational
Detail Oriented
Passionate
Relentless
Blunt
Manipulative
Rude
Dismissive
Spiteful
Hostile July 2012Slide 15
Transformational
Leadership
Autocratic and
Pace-setting
Approach
*drawn from comments and quotes from friends,
colleagues, employees, fans, anc competitors
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Steve Job is a Transformational Leader
• When Jobs returned to Apple in 1997, his assessment was that the company was ninety days from going bankrupt
• In May 1998, Jobs announced the new direction for Apple to focus on just four core products: laptops for consumers & professionals & desktops for consumers & professionals. The direction was simple & clear.
• The high value placed on ideas is one of the things that Steve burned into the Apple culture & it will likely to continue to guide the company into the future
• Steve Jobs
became a steward of creative thinking & became its greatest advocate while expecting such behaviour from each employee
built an organization that recognized the needs for creativity,
July 2012Slide 16
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Impact on Organizational BehaviourIndividual
1. Emotions: Most employees at Apple are fans of Steve Jobs, and tend to “hero-worship” him from afar. Senior and middle management personnel who have regular contact with Steve, approach him with a mixture of reverence (because of their immense respect for him and his vision) and fear (because of his “take-no-prisoners” style of management)
2. Attitudes: Apple sets the tone of the work culture within the organization from day 1, and focuses on developing the higher levels of their employees’ hierarchy of needs, which are Esteem and Self Actualization.
3. Values: Employees with a high nAch* disposition appear to thrive at Apple, due to the focus on Motivators instead of Hygiene Factors
July 2012Slide 17
* nAch – Need for achievement
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Impact on Organizational Behaviour Feedback from Apple employees:“Steve Jobs is revered at the company.” – Apple Employee “Watching Apple grow in the Steve 2.0 era has been nothing short of astonishing.” – Apple Network Engineer “ I am proud to say that I work for Apple. The products speak for themselves and it is great to be able to use them.” - Apple Project Manager (Austin, TX) “Great products and phenomenal co-workers! An awesome work environment that cultivated creativity and competition. I woke up every day and could not wait to get to work!” – Apple Account Executive (Atlanta, GA) “Apple is an amazing company with a very successful management. Innovation is at the heart of all decisions. Successful organization. And great products.” – Apple Employee (location n/a) “Apple is an amazing company, with cutting edge products, unparalleled customer service focus and a place that cultivates a family atmosphere. Very enjoyable working environment.” – Apple Employee (location n/a) Apple is an amazing place to work. There are so many opportunities to grow and learn. “- Apple Employee (Cupertino, CA)
July 2012Slide 18
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Impact on Organizational Behaviour Group: Communication
• The approach to management & talent development is top-down
with an all-knowing CEO aided by a powerful executive team – ET
o the purpose of the ET is to coordinate things & set the tone for the company through effective communication platforms
• The company maybe top-down, but the executive –team format engenders a system of managing up
teams throughout the organization are in a constant state of communication by preparing their boss or their boss’s boss to present at an executive team meeting
July 2012Slide 19
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Impact on Organizational Behaviour Group: Conflict
Given Apple’s product silo structure in a relatively flat organization, internal conflicts are usually resolved within the small teams in each silo independently. The thoroughness of Jobs’ vision and mandates, as well as his blunt manner, usually precludes conflicts from significantly affecting day-to-day operations, leaving the onus of satisfactory conflict resolution to the various stakeholders of the organization.
July 2012Slide 20
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Impact on Organizational BehaviourOrganisation Structure
The Organization
Organizational culture: Loyalty, Evangelistic, Hero-Worship
Decision Making: Top down approach, tempered by upwards management
Change: The organization is resilient and adaptable to changing circumstances due to a strong structure and culture.
July 2012Slide 21
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Job’s Impact on Organizational BehaviourOrganisational Climate
1. Flexibility- Apple employees are encouraged, even expected to continually innovate, but always within the boundaries of Steve’s vision
2. Responsibility- Most Apple employees proudly feel a deep, abiding sense of responsibility towards the company and behave accordingly
3. Standards- Steve sets very high standards for performance and innovation, and every Apple employee is expected to adhere and exceed those standards
4. Rewards- Apple’s remuneration is on par with market trends, and they do not seem to be focused on obtaining and retaining talent through hygiene factors
5. Clarity- Every Apple employee has a clear sense of what they need to do on a day-to-day basis
6. Commitment- Despite his brusque manner, most Apple employees remain committed to realizing Steve’s vision
July 2012Slide 22
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Evidence of Organizational Effectiveness
July 2012Slide 23
Steve Left Steve Came Back
Steve Left
For Good
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Staff force for Apple, Microsoft and HP.
July 2012Slide 24
2001 2002 2003 2004 2005 2006 2007 2008 2009 20100
50,000
100,000
150,000
200,000
250,000
300,000
350,000
Staff Force (2001-2010)
HP
Microsoft
Apple
(Source: Financial Reports)
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Profit per employee
July 2012Slide 25
(Source: Yahoo Finance)
1. With 46,600 employees and a turnover of 20 billion dollars in 2010, each Apple’s employee generates a turnover of 419 528 dollars per year.
2. While, Microsoft with 244,831 dollar at 3rd place. And HP with 28,096 dollar per year.
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Comparisons with other Leaders
July 2012Slide 26
• Born in September 1954
• A UCLA drop out
• Six time Forbes Businesswoman of the year
• First female CEO of a fortune 20 company with a mandate to shake things up
• Also known as “Fiorina Shakeup”
She is Carly Fiorina
CEO of Hewlett-Packard (1999 to 2005)
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Comparisons with other LeadersCarly’s Leadership
Carly’s leadership traits
• Fostered a top-down approach to management (Transactional). Conflicted with the old-style of HP: a completely decentralised management approach
• Exhibited a truly coercive – pace-setting leadership style
• Dynamic and headstrong leader
• Highly motivational speaker
• “Consummate” Saleswoman – Customer satisfaction
July 2012Slide 27
Nottingham Malaysia
Comparisons with other LeadersCarly’s Leadership
Carly’s downfall as a leader
• Was not able to delegate tasks
• Move too fast and too drastic with changes for the organization to cope
• Neglected to foster employee needs resulted in high turnover
• Was not able to form and communicate a cohesive, convincing and powerful vision of HP’s future
July 2012Slide 28
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Comparisons with other Leaders Carly’s Leadership - A Transactional Leader
Conclusion
• Carly failed to execute HP’s strategy and deliver improvements in HP’s profits and stock price
• Was asked by HP’s BOD to resign due to lack of leadership skills needed to take advantage of emerging market opportunities
• Indeed, Carly was a very good businesswoman but she could not prove herself as a leader.
• She saw her downfall when she could not relate to her employees, and without followers, there cannot be a leader
• Perhaps, Carly could be a successful leader by adding more people centred leadership skills into her highly dominant job centred leadership style.
July 2012Slide 29
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Comparisons with other Leaders Carly’s Leadership
Hewlett Packard’s Organizational Effectiveness
July 2012Slide 30
Carly left HP
Carly helm as CEO 1999 to 2005Carly joined HP
Comparisons with other Leaders Bill Gates’ Leadership
1. Co-founded Microsoft with Paul Allen2. Philosophy – his vision turned to his philosophy which
ultimately the focus is about running software in every computer
3. Fast in taking in ideas and turned them into a successful product – ‘95 Microsoft response to internet with the launch of MSN
4. Transformational Leader – visionary, and inspirational5. Authoritative, and Democratic – free hand to research
and create teams for more product development & launches BUT careful in control and judgement
6. Microsoft 2005 from 7 decentralised business unit converted to 3 centralised units.
July 2012Nottingham MalaysiaSlide 31
Comparisons with other Leaders Bill Gates’ Leadership
Characteristics
1.Intelligent 2.Visionary 3.Passionate4.Innovative
5.Risk Bearer6.Continuous Learner
July 2012Nottingham MalaysiaSlide 32
Nottingham Malaysia
Comparisons with other Leaders Bill Gates’ Leadership - Organisational Effectiveness
•Microsoft IPO in 1986 at $21.00 (13 March 1986) Close at $28.00
•Pays a quarterly dividend of $0.20
•Stocks has split 9 times over 26 years July 2012
Slide 33
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Comparisons with other Leaders
July 2012Slide 34
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Conclusion
1. Industries that experience a high rate of change and uncertainty (in terms of products, paradigm shifts, business climate) like computing, internet services and telecommunications benefit more from transformational leadership than any other leadership model. The success of an organization within these industries depend heavily on the vision of its leader to successfully navigate the inherent uncertainties.
2. Transformational Leaders who are proven visionaries are able to easily gather around them people who are willing to buy into their visions and passionately commit to making them a reality.
3. Both Jobs and Gates are considered Transformational Leaders because of their ability to inspire high levels of innovation, creativity and productivity from their employees through their visions
4. A leader can afford to be autocratic, even dictatorial and still lead an organization successfully as long as the leader continues to be successful in his role as a visionary.
July 2012Slide 35
Thank You
All rights reserved @ 2012
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