According to Peter Drucker the most important organizational objective for the next 30 to 40 years is going to be focused on business results. Therefore Strategic Management and Leadership Skills are essential part of the successful leader's bag of tools. Today's groups, organizations, and teams need both effective leaders and effective managers to run a successful operation. Management ensures that the work is done and leadership is the ability to encourage and motivate other people in a specific environment.
1. TASK 1
1.1 Differences between strategic management and strategic leadership
Strategic management is a process for developing and enacting plans to reach a long-term goal that takes into account internal variables and external factors. It includes:
a vision statement ;
an environmental scan of external factors that will affect the operationalization of the vision,
a strategic plan and policies based on the results of the external scan in comparison with strengths and weaknesses of the organization;
tactical and operational plans to implement the strategic plan; and
a monitoring system which will provide timely, valid and reliable information by which to coordinate the activity within the organization
As for strategic leadership it is the ability to anticipate, envision, maintain flexibility and empower others to create strategic change as necessary. Griffin defines it as a set of activities directed at influencing an individual's action within an organization with the aim of achieving organizational goals in an efficient and effective manner.
A manager is strong on process and systems. A leader on the other hand, is visionary; sees the big picture, envisions where the company should be heading, and inspires those in the company to make the vision their own. Therefore leading and managing are then different. The conceptual distinction between management and leadership is not just a semantic intellectual exercise, but rather an attempt to fine tune people's understanding of concepts that critically affect the success of all organizations.
Whether or not there is a difference between management and leadership is debatable. Some experts dislike the separation of the two but others think that there is a marked distinction between those who manage and those who lead. According to Petra Cook, head of public affairs at the Chartered Management Institute, there is certainly a difference. Ms Cook believes that leadership is a continuation of management. ″A good manager is not necessarily always a great leader, but a good leader must always be a great manager first, ″ she explains. ″Leadership is more dynamic and requires strategic thinking, excellent communication and a clear vision. ″
The position here is that both the leader and the manager are striving for the accomplishment of organizational goals as set forth in the various plans of the organization but each try to achieve these goals from different platform. To draw a definitive conceptual wedge between management and leadership, Figure 1 graphically outlines the differences. The basic premise is that the boundaries between managers and leaders rest with the authority that gives them that status.
Figure 1: Differences between Management and Leadership
1.1.1 Links between strategic management and strategic leadership and the reasoning for the answer
The following stated above makes it clear that it is through effective strategic leadership that firms are able to successfully use the strategic management process. One without the other is likely to produce poor results. Good leadership and management are essential pre-cursors for a motivated and a successful organization.
As strategic leaders, top managers must guide the firm in ways that result in the formation of a strategic intent and strategic mission. Thus, it will lead to goals that will stretch everyone in an organization to improve their performance. Moreover, strategic leaders must facilitate the development of appropriate strategic actions and determine how to implement them. These actions on the part of strategic leaders culminate in strategic competitiveness and above-average returns as shown in Figure 2.
Figure 2: Strategic Leadership and the Strategic Management process
Review of both definitions reveals that for the most part both definitions are quite similar. In fact, if it were not for the distinction made above between management and leadership, one could hardly tell them apart. One may argue that the strategic leadership definition includes influencing and therefore more in line with the distinction made above. Although this is true, it also includes the word directing which is more in line with a management thrust. It is because of this confusion that the distinction made between management and leadership becomes, important, especially at the strategic level where specific techniques of achieving organizational goals become critical.
1.2 Impact of strategic management and strategic leadership styles on strategic decisions
1.2.1 The impact of technological innovation in an organisation
Today everything involves technology innovation in organisations. Technological innovation as a source of strategic change and competitive advantage is directly related to the strategies and core competencies of a company. As a consequence it is of utmost importance that managers and leaders be technologically proficient.
The accelerated pace of change, such as technological advances, legislation, political/economic with the attendant increase in information technology, places tremendous pressure on organizations and their leadership to deploy the appropriate organizational designs and strategies to achieve mission success. For examples the greater use of email, teleconferencing, and distributed workforces. It will be more difficult for leaders to establish initial credibility and to judge and respond to follower needs and expectations.
The strategic decisions can be improved, and usually with the current personnel and within a fairly short time. All it takes is commitment and the right leadership style. Today's workforce does not accept the autocratic style often adopted by leaders following historical models of leadership. Leaders still get criticized for not having and communicating a compelling vision and purpose. They are still expected to take full responsibility when things go wrong. Many employees feel that they are not recognized or appreciated by their employers for their hard work and in turn develop decreased motivation. Lack of communication, good planning and feedback from employers cause employees to feel overlooked and inhibits them from performing to the best of their ability. However, the most challenged faced by leaders at work is time management. As opined by Wood (2006), time management at work is critical for the success of any organization and this directly affects employees' performance and the company's bottom line. Examples are: consultation, target setting, planning, motivation, teambuilding etc.
Organizational adoption of an innovation, like any other strategic issue, is an event perceived by decision makers to have a potential impact on the future effectiveness of the organization (Ansoff, 1980; Dutton et al., 1983). In understanding innovation decision making, managers and leaders must identify why the same or similar innovations are perceived differently by top managers and how perceptions are linked to intentions.
Technological innovation has touched virtually every industry and created a situation in which workers need to acquire new skills. As market placed increasing pressure on firms to operate efficiently, demand for skills has intensified among lower level employees. In contrast MacDonald (1997) in his assessment of the influence argued that new technologies are increasing scope for greater flexibility in the production processes.
1.2.2 The changed economic climate over the last two years
Industries are operating in an environment where change in economic climate is constant.
Variations in the economic climate are likely to impact on leadership requirements, especially in times of recession or boom. Pressures applied to businesses will be reflected onto the shoulders of leaders and appropriate responses need to be forthcoming if the business is to survive.
When there are unfavourable economic conditions, leaders will be expected to perform more positively in order top motivate employees and thus create results. This can be very testing for both parties as strong personal characteristics will be needed.
In more prosperous times, leaders can expect the general optimism of the market to support decisions. Indeed, expansions programmes for an organisation will have the inherent effect of producing optimism all round.
Similarly, political unrest or terrorist activities have been shown to counteract the efforts of many strong leaders. The effects of the 9/11 terrorism shock set alarm bells ringing across all markets, with devastating effects in many cases.
2. TASK 2
Several theories have been developed about leadership in recent years. However each theory focuses on the need for adaptability (the degree to which the leader is able to vary his or her style appropriately to the readiness level of a follower in a given situation).
Transformational Leadership
The concept of 'transformational leadership' was initiated by James MacGregor Burns in his book Leadership (1978). According to Burns the transforming leader shapes, alters, and elevates the motives, values and goals of followers achieving significant change in the process. However, Bernard Bass writing with a research colleague Avolio suggested that the transformational style of executive leadership incorporates social change, a facet missing from Burn's work. Transformation in the context of the management of organizations and systems occurs when every individual take personal responsibility to help create new futures, ask questions, take risks and make a difference. The transformational leadership model was particularly appealing in this changing environment because it addressed leaders' concerns about transforming the existing order of things and followers' needs for meaning and personal development (Conger, 1999).
2.1.1 Advantages of Transformational Leaders
They recognized the need for effective strategic leadership practices that help firms enhance performance while competing in turbulent environments
They create adaptive, entrepreneurial, flexible organizations and stimulate changes by realizing them successfully
They are ready and able to assume an appropriate attitude, to take a risk and face the status quo in the organization
In the relationship with the others (followers), transformational leaders are open and sincere and ready to give confidence when required. So, although they possess great power, transformational leaders are sensitive as regards their followers and they do their best to empower them whenever it is possible
They formulate a set of essential values, which are to be achieved, and show behaviour, which is in accordance with the values
They try to draw a lesson from their own experience for some future situations. In that sense they are ready, when necessary, to perform radical changes in their own attitudes, approach, behaviour, etc
They promote innovations in products and technologies
Transformational leaders are good visionaries. Their ability to create a future state, to articulate successfully that state and its successful communication with the followers, with a lot of enthusiasm work on achieving such a state is in question
Along these lines, transformational leadership is said to be comprised of the following four dimensions: idealized influence, inspirational motivation, intellectual stimulation, and individual consideration (Bass & Avolio, 1994).
2.1.2 Disadvantages of Transformational Leaders
Hundreds of organizations hear the mandate for transformation but often they confuse transformation with any kind of change, technology breakthrough, innovation, process improvement or transition.
They may believe that passion and enthusiasm are more important than truth and reality
Transformation fails when there is a lack of leadership with profound knowledge, vision and courage
Their energy can wear out their followers
They may see only the big picture, not the details
They may become frustrated when an organization does not want to be transformed (Syque, 2006)
Transformational leadership can benefit Orange Business services (OBS) as it appeals to vision, social values, and encourages people to collaborate, rather work as individuals who compete with one another. This theory could be incorporated effectively into OBS to create and sustain trust through the organization, manage the process of change, involving workers in decision making and also establishing OBS as a learning organization. This theory is essential for OBS considering the complexity level and the level of uncertainty of contemporary conditions and untypical situations in which contemporary organizations are almost daily. Hence, the ability of successful ingenuity in such conditions is of extreme importance. Rodin [1999]: In introducing the transformation at Marshall Industries, Rodin stated, "Six years ago we bet our company on a radical experiment, tearing our healthy $500 million business down to the bedrock."
Situational Leadership Theory
This theory was developed by (Hersey and Blanchard) and it posits that the developmental levels of a leader's subordinates play the greatest role in determining which leadership styles (leader behaviours) are most appropriate. Their theory is based on the amount of direction (task behaviour) and socio-emotional support (relationship behaviour) a leader must provide given the situation and the willingness and ability (level of maturity) of a leader to take responsibility for directing his or her own behaviour.
2.2.1 Advantages of Situational Leadership Theory
The theory is easy to implement
The leader provides clear instructions and specific direction.
The leader encourages two-way communication.
They help in building confidence and motivation on the part of employee.
The leader and followers share decision making
2.2.2 Disadvantages of Situational Leadership Theory
Leaders should be flexible and adjust their styles as followers and situations change over time
Leaders need to determine what task areas they would like to influence, assess the readiness level of the individual and choose a specific leadership style that corresponds to that level
The leader need to determine the maturity level of his employees in relation to the specific task he is attempting to accomplish
This theory can benefit OBS as it is easy to understand, offers suggestions for changing leadership style, and shows leaders what to do and when to do it. It could be incorporated effectively at OBS when new employees are hired in new jobs. These are individuals that might be considered most likely to benefit from highly structured leadership behaviour. However, it helps to make strategic decisions concerning the products and services for OBS and markets.
2.3 How to change management and leadership in OBS to improve: efficiency; quality; innovation; HRM
Most organizational theorists agree that effective leadership is one of the most important contributors to overall organizational success.
Orange Business Services' corporate mission is to be the premier provider of voice and data services, helping its customers stay in touch with people and information in ways that are simple, flexible and cost effective. Towards this ambitious goal and to be more effective, OBS use the 360 feedback processes to measure Emotional Intelligence. This concept, developed by (Daniel Goleman), proposes that we all have a self-awareness that helps us to identify feelings and helps emotions to be managed.
However, leadership effectiveness is sometimes influenced by factors such as efficiency, quality, innovation and human resources in OBS.
There are not sufficient leaders with enough talent to increase efficiency of impacts and to meet all the challenges that OBS faced. One of the factors that reduce efficiency in OBS is the decentralizations system which structured leaders in their own way, which made it more difficult for the organization to function as a coherent body. OBS still trained leaders that can lead a workforce and provide company-wide visibility and integrated focus to areas that required improvement within the organization. Performance indicators are used to assess efficiency and leadership skills. While keeping eyes on performance indicators, leaders encourage creativity and innovation, risk taking and skills for future development. OBS need to align themselves with their environment, their strategies and their capabilities and also to develop the capacity to learn and change to fit new circumstances.
OBS in the industrial pole have a modern management orientation. The company invests in productivity, innovation, quality and competitiveness in continuous basis. Many of their products are of high technology, and high unit value, absorbing the changes in the product technology rapidly. Senior executives face increasingly complex challenges that involve organizational changes, market dynamics and talent shortages. One popular response to increasing complexity is to lean on innovation. Our respondents believe that aiming for innovation through overt processes (systems and structures) and talent development is paramount to creating a culture that is agile enough to address complex challenges. Therefore, leaders have to make the change process open and it is necessary to convince employees why the change is essential.
People are crucial for success and they play an essential role in achieving goals and implementation of strategy. For that reason leaders in OBS are encouraged to show greater interest in the welfare of workers to make them more valuable and see themselves as contributors to the success of the organization through effective leadership. A good working condition, work environment and (Human Resource) HR planning should be provided within the workplace to make employees more competitive and contribute to their best towards the realization of the organizational objectives. There should be a frequent and timely periodic on-the-job training to boost employees' performance for all workers within the organization. HR managers should assess and evaluate employees at all levels through some assessment techniques before and after recruitment exercises. The quality of human resource management is a critical influence on the performance of the firm. Concern for strategic integration, commitment flexibility and quality, has called for attention for employees motivation and retention.
In order to improve all these factors will depend on how appropriate OBS leadership style is to the situation in which they operate. This appropriateness comes from the matching of leader style and follower task relevant maturity, the environmental element or task readiness.
3. TASK 3
3.1 Requirements for successful leadership in the present business environment
There are many challenges facing leadership today. Considering the rapid change in the world of organizations and management, leaders should be aware and understand the current needs and requirements of leadership. Such an understanding allows managers to be proactive rather than reactive and ensure that their organizations are fully equipped to tackle the many varied obstacles that arise from present day political and economic issues.
Virtual Organisation
As globalization increases, organizations are continually asked to bridge cultural, geographical and functional boundaries effectively and efficiently. It is a collection of managers, employees and stakeholders who have chosen to carry out their activities through the use of the Internet rather than through conventional channels, such as retail outlet or an office base. Most executives preferred virtual leadership than face-to-face leadership.
In a CCL guidebook titled Leading Dispersed Teams, authors Mike Kossler and Sonya Prestridge hit on some strategies to improve a virtual organization.
The key processes are:
Creating guidelines for when and how to communicate with customer
Designing ways for the team to document and store its knowledge in a central location
Utilizing a variety of collaborative technologies whenever possible
Creating a dispersed-team communication planner aid in prioritizing the urgency of messages and available communication choices
Sound knowledge of customers or clients and product or service offering
Virtual organizations all operate within a dynamic environment where their ability to change will determine the extent to which they can survive in a competitive market. Organizational theorists suggest that the ability of an organization to change relates to internal and external factors (Miles and Snow, 1978), including the organization's technology, structure and strategy, tasks and management processes individual skills and roles and culture (DeLisi, 1990; Henderson and Venkatraman, 1996) and the business in which the organization operates and the degree of uncertainty in the environment (Donaldson, 1995).
Diversity
Organizations can be strengthened by leveraging differences that mirror the diversity of its citizens. Surveys have demonstrated a positive impact on high performance where senior management teams include a diversity of ages, ethnicity, and gender. A diverse workforce also can improve organizational productivity and creativity. Managing a diverse workforce can be a challenge. When people from different backgrounds come together in the workplace, there is potential for great accomplishment, but also for great conflict. This can happen between Generation X and Generation Y employees. The older members are joining an educated generation which has grown up technologically and globally conscious. There is changing of social attitudes among young workers. It can be the cultural lifestyle changes. These can have a negative impact on productivity and also limit the possibilities for conducting leadership.
Managing diversity is based on the economic and business case for recognizing and valuing difference, rather than the moral case for treating people equally.
Diversity must also be considered in terms of equal opportunities. Every business wants the best person for the job. Unequal treatment, prejudice or harassment discredits a business and can be very costly. As an owner or manager one may be held responsible for any discriminatory action by your employees.
Discrimination
Discrimination is categorized as treating people differently because of their age, sex, race, colour, nationality, ethnic or national origins or marital status, religion. Paying men and women different rates of pay even though they are more qualified or doing the same work. And eventually treating disabled people less favourably than work colleagues who are not disabled. Leaders should develop ways to avoid discrimination in any organization.
The external factors impacting on discrimination can be legislation, employee perception, the push towards business ethics and greater accountability, morals of country and regionality within customer base.
Leadership in the Digital Age
The shift from an industrial age to an information age has altered the nature of work, employees and the workplace itself, with a consequent effect on the nature of leadership within organizations. Digital leaders are distinguished from non-leaders by their different combinations of skills, attitudes, knowledge and their professional and personal experiences. Leadership must be driven by unique attitudes appropriate for the distributed, digital age. It is the acquisition of knowledge to gain a competitive advantage.
The subsequent growth of information and communication technology has had a significant impact on world economy and created new businesses and jobs that require a different range of skills and training. Examples are: Email and Internet, teleconferencing, sophisticated mobile phones, high definition television etc. However, there are some external factors that have an impact on this requirement. They are as follows:
Education system (competent and comfortable teachers towards Information Age)
Demographic changes
Influence of technology on our work system
Changes in economic forecast
Current and future levels of accountability and compliance
3.2 Future leadership requirements
In business today, there is clear need for more leaders who can think and operate globally. What is important to realize is that creating effective global leaders is a matter of competitive advantage on others. Globalization is rapidly redefining today's business environment. Those who can stay ahead of the rapid pace of change, anticipate talent needs, and take the lead in developing innovative strategies for the future will likely be tomorrow's winners.
More and more, organizations are concentrating on future leadership requirements and their needs to promote success and maximize the power of their leaders.
New career
The development of information technology and different working styles has led to a number of new titles and requirements. Moving talent to the top of a business agenda is critical for its survival and also the use of IT is spreading throughout the business world. Development work will need to continue to verify and refine the preferred actions for effective performance and that will fit the range of missions, teams and subordinates that leaders influence.
Market Globalization and the Internet
Global culture is becoming increasingly emergent. It is the process whereby worldwide tastes and products offerings converge and are increasingly satisfied by global products rather than local ones. The globalization of the world economy is reflected in many ways. The globalization of the world economy is reflected in many ways. The General Agreement on Tariffs and Trade (GATT) simulates free trade between countries by encouraging the reduction of tariff and non-tariff barriers (e.g. local content requirements, safety regulations, etc). This allows firms to more easily trade and move around the world.
Globalization is driven by hard economics. New technologies also get dispersed globally very quickly, so that innovators must exploit their property on a global scale, if necessary, by means of strategic alliances, or risk seeing it adopted or adapted by rivals.
Global competition has accelerated sharply. People preferred global products rather than local ones. In view of that, the internet has accelerated the strategic processes by separating the physical flows and the information flows. In order to compete effectively, organizations will need to maintain high fixed costs, forcing executives to spread these costs over higher volumes, which mean trying to get marker share in all market economies.
Shared organizational learning
Without top management taking a lead in learning and setting an example, development and learning initiatives will fail. The learning culture must permeate through the whole organization, starting at the top. Such need arise within an organization to support the integration of working and learning, establish share work practices and information. Apart from training, all this can be done when team players work collaboratively, sharing information and knowledge, contribute their knowledge and experience to the wider organization.
4. TASK 4
4.1 Advantages and disadvantages of methods and techniques for developing skills
Leadership skills are important in the workplace. Leadership skills help everyone work together more successfully to meet objectives. There are many methods and techniques for developing leadership skills.
Four of these are as follows:
Creating a learning organisation
Addressing skills gaps
bringing about change
Improving competitiveness
Advantages of creating a learning organisation
ensuring the long-term success of the organization
making incremental improvements a reality
increasing creativity, innovation and adaptability
attracting people who want to succeed and learn and retaining them
ensuring that people are equipped to meet the current and future needs of the
organization
Disadvantages of creating a learning organisation
Not all the people fit in a learning organisation
There is a lot of challenges and commitment during this process
A learning environment is also costly in the sense that it must be properly supported if learning is to become part of the individual's working life
Advantages of Addressing skills gaps
It includes development activities to support the workforce in embracing new and more efficient ways of working
One focus of HRD must be on filling gaps in skills, knowledge and competences
Disadvantages of Addressing skills gaps
Negative attitudes and the low society with cognitive difficulties act as barriers to workforce development
Lack of coherent career structure
Less motivated staff
Advantages of bringing about change
Improve and develop skills of staff
Changing nature and composition of the workforce
Increased demand for quality and high level of customer service and satisfaction
Disadvantages of bringing about change
Organisations experience very high uncertainty
Some people get difficulty to adapt with a change
Advantages of improving competitiveness
Give opportunity and responsibility to staff
Provide more autonomy for leading and managing
Provide opportunity to develop skills and promote learning
Disadvantages of improving competitiveness
Reduction in recruitment
High labour and social costs
Lack of expertise
4.2 Leadership development programme
The Leadership Development Programme aims to develop thousands of leaders around the world, and allow them to explore their own potential as well as the transformation of their organizations, institutions and societies. The programme provides sustainable solutions to the most pressing development challenges. It is based on the current best theories and practices for developing leadership, calling forth the capacity to initiate and maintain profound change.
Practice
Reasons
Creating a learning organization
A learning organization is one that can embrace change to exploit new opportunities in the marketplace or to tackle new ways of doing business. It can benefit OBS to enhance the growth and development of its people over their full career span and also helps the organization to adapt to changing business patterns and finding new more efficient ways to meet competitive advantage
Action Learning
Action learning is a process whereby events of the past are subjected to analysis so that a greater understanding of actions taken and their effects can be gained. It involves: working on real problems, focusing on learning and implementing solutions. It can be used in OBS for the following reasons:
to tackle strategic problems at board level
implement new strategy
socialization
develop skilled managers for new responsibilities
improve productivity
teamwork
flexible and adaptable to change
empowered, taking responsibility on behalf of the organization
sharing new ideas to improve products, customer loyalty, processes and organizational behaviour
Outdoor challenge
It involves team-Building experiences in outdoor/wilderness settings. This could help in encouraging teamwork, self-understanding and sharing of ideas and knowledge.
Coaching and Mentoring
Advising/developmental relationship usually with a more senior manager. It is practical, goal-focused form of one-on-one learning. It improves self-knowledge and gives a broader understanding on career development and behavioural change. It helps an individual to avoid and repeat mistakes. Effective coaching is the single most important factor in employee development today. It helps in getting agreement on a problem and developing solution together.
Job assignments
Provide 'stretch' assignments in terms of role, function, or geography.
It enhances skills development and gives a broader understanding of the business and also accelerates learning.
Table 1: A leadership development programme for Orange Business Services
Management plays a key role in leadership development. The effective development of people is, therefore the management focus at Orange Business Services (OBS).
″Leadership and learning are indispensable to each other″ - John F. Kennedy
The leadership development programme is structured to help OBS identify ways to create leaders and teams of leaders across various functions and to transform doubtlessly the organisation into a robust, thriving, always-learning system.
5. Conclusion and recommendation
As Maak & Pless (2006, p. 99) suggest: Today's leaders act in a global, complex, uncertain and interconnected business environment. Among the challenges in this context is the need to reduce complexity and uncertainty for people and provide a desirable picture of the future, which is shared by the people they lead. Leaders need to have a sense of purpose and guiding vision…. Moreover, they have to lead in a business environment, which undergoes a general crisis of legitimacy and trust. Commercial viability and long-term business success depend on the ability of a firm and their leadership to act responsibly with respect to all stakeholders in business, society and the environment. Leadership is important in an organization because leaders create change and are the impetus for performance (Tichy & Cohen, 2003). For long-term success in an organization, it is recommended that good leadership is being practiced within the business and also the ability of leaders to influence and motivate others (Yukl, 2006). Each company has to find the best suiting leadership or management style for itself and if necessary adapt to a changing situation. The important part is not to stick to one of the styles mentioned above, but to find an own style and lead as best as one can.
