CHAPTER TWO
Gap 6: The interpretation gap Customer interpretation of
2.8 Cooperatives
2.8.8 Leadership
Newston and Davis (1997) define leadership as the process of influencing and supporting others to work enthusiastically toward achieving objectives. The primary role of a leader is to influence others to voluntarily seek defined objectives. There is a difference between management and leadership; strong leaders may be weak managers if poor planning causes their group to move in the wrong directions. A person can be a weak leader and still be an effective manager, especially, if managing people who have a clear understanding of their jobs and a strong drive to work.
Newston and Davis further argue that this set of circumstances is less likely since leadership ability could be acquired through observation of role models, management training and learning from work experiences.
2.8.8.1 Leadership Styles
Leaders apply different leadership styles, ranging from free-reign to autocratic:
(1) Free-reign leaders: avoid power and responsibility. They depend largely on the group to establish its own goals and work out its own problems.
(2) Participative Leaders: Decentralize authority. Decisions are not unilateral; there is frequent consultation with followers. Employees are usually informed about conditions affecting their jobs and encouraged to express their ideas and make suggestions.
(3) Autocratic Leaders: Centralize power R & D decision-making in them. Leaders take full authority and assume full responsibility.
Although a positive, participative considerate leader tends to be more effective in many situations, the contingency approaches suggest that a variety of styles can be successful. Leaders must first analyse the situation and discover the key factors in the task; employees or organization that suggest which style might be best for that combination (Newston and Davis, 1997).
Goal Setting (Theory X and Theory Y)
Goal setting is defined in the Source: (ACCA Newsletter December, 1999) as motivation that focuses on the processes of setting goals. The challenge is to make ideas work in a different environment with possibly different parameters and mould the ideas accordingly. Behind this there must be a level of trust that the employer will deliver his or her promises. If trust is not is not present and seen to be present and viable, then nothing will motivate an employee and they will get their satisfiers elsewhere.
Each style reflects a manager's belief about a subordinate's capabilities.
• Theory X: Traditional set of assumptions that most people dislike work and will avoid it if possible. Most people lack responsibility, have little ambition and seek security above all.
The role of management is to coerce, control and threaten them with punishment to get them to work.
• Theory Y: It is about creating a climate whereby people will motivate themselves. People enjoy their work and will come to work even on weekends because they enjoy it and know they are appreciated (ACCA Newsletter June, 2000).
The right conditions can be developed for employees to work and satisfy their personal ambitions within their work, and then high levels of motivation can be achieved through:
• Getting to know the people, which may mean operating in small groups rather than the rigid hierarchy
• Identifying the source of enjoyment, strengths and weaknesses
• What they want and what they want from the job (ACCA Newsletter June, 2000):
This is a more humanistic and supportive approach to managing people. The assumption is that most people are not inherently lazy; they have become that way as a result of experience. Work is as natural as play or rest. The belief is that people will exercise self-direction and self-control in the service of objectives to which they are committed. Management, therefore, has a role of developing the employees and helps them release the potential of imagination, ingenuity and creativity that can be applied to work or towards common objectives (Newston and Davis, 1997).
2.8.8.2 Traits of Effective Leaders
Leadership can be determined partially by traits which provide the potential for leadership, and also by role behaviour. The most important traits are a high level of personal drive, the desire to lead, personal integrity and self-confidence. Cognitive (analytical) ability, business knowledge, charisma, creativity, flexibility and personal warmth are also frequently desired. Leadership traits do not necessarily guarantee successful leadership but are best viewed as personal competences or resources, which may, or may not, be developed and used. Some traits such as self confidence may be difficult to accumulate in the short-run, but others can be learned (Newston and Davis,
1997).
2.8.8.3 Leadership Roles
Leadership roles combine technical, human and conceptual skills, which leaders apply to different degrees at various organizational levels:
• Technical skills involve things. It is a person's knowledge and ability in any type of process or technique (learned skills).
• Human skills concern people. It is the ability to work effectively with people and to build teamwork (major part of leadership behaviour) and
• Conceptual skills deal with ideas. It is the ability to think in terms of models, framework and broad relationships, such as, long-range plans
Responsible Leadership
For people to take on responsible leadership, they need support and encouragement, not controls and certainty or punishment. Growing responsible leadership means including everyone in the organization. It is the responsibility of top executives to create the climate for responsible leadership. Focus should shift to coaching, mentoring and being a role model of responsibility and accountability.
2.8.8.4 Motivation
Rewards have two dimensions, which are intrinsic (include feelings of personal satisfaction, sense of achievement, responsibility and pride at work. They are individually controlled and are at the fourth level of Maslow's hierarchy) and extrinsic (include salaries and conditions, incentive arrangements, share schemes, pension schemes, and insurance). They are outside the control of the individual and at the disposal of others. Lack of attention to these rewards can lead to job dissatisfaction and motivation problems (ACCA Newsletter September, 2001).
A reward system aids recruitment and retention and ensures that employees work to a known and consistent standard hence a well constructed reward scheme will motivate employees and increase commitment and effort. Understanding what motivates people is necessary at all levels of management. Motivation is frequently based on reward. Reward systems have to be consistent, transparent and understood. Above all they should be equitable and seen to be fair (ACCA Newsletter September, 2001).
2.8.8.5 Culture
Culture is referred to as the set of values attitudes and beliefs held by the organization's members (ACCA Newsletter December, 1999).
According to Thompson and Strickland (2003) a new culture is necessary to build a strategy supportive culture that will produce a work climate and organizational espirit de corps that thrive
on meeting performance targets and being part of a winning effort. They state that a strong culture is indicated by clear and explicit set of principles and values which are well communicated and values shared widely across the company.
Thompson and Strickland (2003) further argue that strong leadership, sincere long-standing company commitment and genuine concern for the well-being of the organization's customers, employees and shareholders are factors that develop a strong culture. On the other hand, they contend that a weak culture would be indicated by many subcultures that exist within the organization, few sacred traditions, behavioural norms widely shared, little cohesion across organization units, top executive do not espouse any business philosophy or no commitment to values, no deeply felt sense of corporate identification and where employees view the company as a way to make a living.
Team work is very essential in an organization. Teams constructed from diverse professional disciplines, life experiences and cultural backgrounds are needed to address today's complex problems. People from different functions and levels should come together spontaneously to resolve interdepartmental issues. Executives at all levels need to provide the personal and institutional support including education, recognition and rewards necessary to encourage such radical thinking and teamwork.
What organizational leaders say and do plants the seeds of cultural change and an organization should be fully prepared for any change. Effective companies gather, analyze, and communicate data and Information at Internet speed. An organization's culture is either an important contributor or an obstacle to successful strategy execution. Only a few companies have escaped the need to reorganize, acquire, divest, outsource, or downsize (Internet, 8).