This purpose of this report is to analyze the importance for managers to have an understanding in managing organization. Effective management is important in today's business world. The four management levels include top managers, middle managers, first-line managers and non-managerial employees. Besides, the four management functions are planning, leading, organizing and controlling. Leadership plays an important role in managing people and organization. Leaders with appropriate leadership style will lead an organization to gain success in future. For example, the CEO of PepsiCo, Indra Nooyi, is a good example of leader that practices contingency leadership style. She had used the right leadership style at right situation to manage organization. This is the reason why PepsiCo is so successful in business world today. In Journal 1,. In Journal 2, there is a comparison between transformational leadership and servant leadership. Both of these two leadership theories have difference in terms of moral, focus, motive and mission, development and influence distinction. For recommendation part, managers should equip with required skills such as technical, human and conceptual skills in order to manage people and organization in an effective way. Moreover, transformational leadership is recommended as the most appropriate leadership theories to be used because it brings out the best of employees and helps an organization to be more innovative. In a nut shell, a company with good leaders in management will lead it to future success by addressing the leadership challenges in today's world of business.
1.0 Introduction
In today's modern and technology era, effective management is fundamental for an organization because it will lead to the company's future success. Organizational management refers to the process of meeting the goals of a firm by managing people or utilizing other resources of a firm (Lewis, Goodman, Fandt, & Michlitsch, 2006). Managers and organizations are the influence factors of today's modern society. Manager should understand their skills and roles needed in managing people and bring all the people works together to achieve company's goals. Organizations face various challenges in today's competitive business world. Hence, they have the need to employ good managers in order to solve the problems encountered and obtain excellent performance.
Manager is defined as a person who overlooks others people work to ensure that the company's goals can be accomplished. In addition, they also had things done by getting the help from others (Drucker, 1999). There are four levels of management which consist of top managers, middle managers, first-line managers and non-managerial employees. Top managers are usually individuals who are responsible for the whole company. They will define goals, establish plan and make important decision that have great impact on the organization itself. For instance, Chief Executive Officer (CEO), Chief Financial Officer, Vice president and others senior executives are classified under top managers titles. For the middle managers, they will carry out their responsibilities to accomplished goals set by top managers (Daft, Kendrick, & Vershinina, 2010). Middle managers will assign specific tasks to their departments and also give motivation to first-line managers in attaining company's goals. General Managers and plant managers are examples of middle managers. First-line managers such as store manager and office manager are responsible in supervising the work process of non-managerial employees. Non-managerial employees are those who work directly on the job assigned to them only. For instance, non-managerial employees include frontline staffs, line staffs, production staffs and so forth.
The management functions include planning, organizing, leading and controlling (Lewis, Goodman, Fandt, & Michlitsch, 2006). Planning is the core management functions where management will set specific goals to attain in future through specific plans and strategies as well as the use of certain organizational resources. The strategies are often established after management conducts a complete analysis of external and internal factor that will influence the company's operations. After strategic planning, management will organize the works structure in order to reach the company's goals. Specific tasks will be assigned and arranged to relevant departments and staffs. Leading is the third management function where managers will influence employees and motivate them to work together in an effective and efficient way with the purpose of achieving organization's goals. The last management function is controlling. Managers will monitor employees' works and activities, comparing their job performance with the established standards as well as correcting their works in order to accomplish the goals that have been defined by the company in the planning stage.
Leadership is not the same as management. It is a process where an individual will influence a group of people in achieving mutual goals and objectives (Northouse, 2009). Leaders are those who own managerial authority and will affect follower's actions and behaviors. Hence, organization needs good leaders to motivate and guide them in attaining its goals. Managers with good leadership style will assist company to gain future success as well. For example, Indra Nooyi, who is the CEO of PepsiCo, was titled as one of the best leaders of America (Useem, 2008). She practices contingency leadership styles where the right leadership style is used with the appropriate situation. Indra Nooyi understands that consumers nowadays are more concerning about their health so she takes PepsiCo to enter the market of noncarbonated beverages such as sport drinks. Indra Nooyi has successfully lead PepsiCo towards health and green movements. Instead of producing only carbonated beverages, she knows that it is also important for PepsiCo to take care of their consumers' health and follow the current trend that are moving towards health conscious (Lussier & Achua, 2009).
2.0 Literature Review
2.1 Journal 1: Impact of transformational leadership on follower's influence strategies
According to Krishnan (2001), leadership refers to the relationship that will cause the followers to work together in achieving mutual goals. It also indicates leaders and followers motivation. Two major leadership styles which are transformational and transactional can be used to address motivation. Transactional leadership implicates the exchange of benefit that is in line with leaders and follower's current issues and values. Contrary to transactional leadership, transformational leadership will try to transform the current issues and values of leaders and followers.
Transformational leadership is in place when leaders and followers heighten the values and motivation level of each other. Under this leadership style, followers are transformed to leader while leaders will be converted to become a moral agent. It will give motivation to followers to perform more than the expected outcome. Leaders who used this leadership style will change the followers' interests by influencing them to look beyond self-interest and concentrate on the group's good (Krishnan, 2004). They will also bring about the awareness and acceptance of a group's mission and goals. Transformational leadership is also known as charismatic leadership. By changing followers' values, motives and attitudes, leaders can achieve excellent performances. This leadership style has impacts on the followers' satisfaction with leader, working performance rating, leaders' effectiveness and the amount of effort follower will put in making changes. Besides, transformational leaders will carry out their roles and duties to influence the performance and attitudes of subordinates.
Developing an exchange relationship that is unique is significant to leader member exchange (LMS). This process is about the same as transformational leadership. Leaders will treat each of its group members in a distinct way. This will result in two follower's groups which are in-group and out-group (Krishnan, 2004). In-group followers consist of followers with whom the leadership's relationship is closer. Out-group followers have a more formal relationship with leaders. This often occurs because leaders cannot concentrate on all followers since they do not have enough time and energy to deal with each and every one of them. In-group followers who have closer relationship with leaders tend to perform well and produce better results than others.
Value system congruence between follower and leader refers to the extent of agreement between both of their value system (Krishnan, 2004). Besides, it will shape the foundation of transformational leadership morality. Moreover, value congruence between employees and supervisors will affect the satisfaction, attitudes and commitment of employees at workplace. Apart from that, transactional leadership has a stronger relation to the upward influencing behavior of subordinate than transformational leadership. Followers will apply different strategies to affect different leaders. In addition, followers have high respect towards transformational leaders because their leadership style will heighten their career growth and improve their capabilities to work. Moreover, transformational leaders will establish a closer personal relationship with their followers. This helps to create an environment that is comfortable to the followers which in turn will lead them to put high trust on leaders.
2.2 Journal 2: Distinguishing between transformational and servant leadership
According to Parolini, Patterson and Winston (2009), transformational leadership look beyond other's interest and also the interest of themselves with the company's and society's good. While servant leaders aims to serve others' needs at the first place.
In the moral distinction, transformational leaders can be referred as moral and value-centered agents who have influence on followers to change their self-interest into collective interest. However, the weak point of transformational leadership is it violates the development of a company as its focal point is put on organization's goals as well as the interest and values of an individual. Servant leaders use power and freedom to serve the priority needs of their followers. This leadership can solve the moral shortcoming of transformational leadership. Leader consciousness and service orientation towards followers are the two traits of servant leaders. Servant leaders serve followers with whole-hearted and thus followers will be influenced by their actions.
In the focus distinction, servant leaders put their focus on followers and make sure each of their needs are being served in the beginning (Parolini, Patterson, & Winston, 2009). They are devoted to autonomy of individuals or followers. In contrast, the focus of transformational leaders is on the collective goals. They are devoted to the company's specific goals.
In the motive and mission distinction, transformational leadership establishes empowered strong cultures. The focus of this leadership style is put on the growth and dignity of an organization. Under this leadership style, firms can survive an external environment that is full of challenges (Parolini, Patterson, & Winston, 2009). Transformational leaders will motivate by the success of the company and response to change in a faster way. It leads to an enhancement in company's objectives and change process. Servant leaders will establish spiritually generative cultures and its focus are put on growth and dignity. This leadership style is motivated under the principle of egalitarianism. It may assist the company in producing more satisfied and committed followers.
In the development distinction, servant leaders put people's needs at first place. Followers are evolved into substantive moral servant and freely to do things based on what they want (Parolini, Patterson, & Winston, 2009). More autonomous leaders are to be developed in order to provide greater benefits on the society. While for transformational leadership, followers will be transformed to leaders. It assists them in building own concept that determine the mission and self-concept of their leaders.
In the influence distinction, servant leaders have great impacts on their followers by making use of an influence model that is rare to them. Followers are being influenced by servant leaders to move into self-service. Servant leaders utilize influences with the intention to stimulate and provoke followers' service and stewardship. While for transformational leaders, it highly depends on the attribute of charisma in order to make different influences on followers.
3.0 Recommendations
Managers should understand how to manage an organization because they are the important peoples who lead other employees to work together in accomplishing company's goals and objectives. Managers' actions will always influence subordinate's behaviors. In order to ensure employees have high work productivity, managers should guild them in a correct direction. Besides, managers should have technical skills to apply specialized knowledge or expertise. They can utilize their organizational behavior knowledge to manage people in an organization. Organizational behavior is a tool that assists managers in performing their works more effectively and improving the firm's effectiveness. It allows managers to understand the impact of employees' behavior on an organization.
In order to motivate employees to work more productively, managers have to practice certain leadership style that is appropriate in attaining company's goals. In addition, managers should have human skills that help them to better understand employees whom they are working with. Excellent human skills help managers to motivate and make subordinates active in workplace. Besides, good managers or good leaders are equipped with conceptual skills where they know how to handle a particular problem. For example, managers will deal with underperforming employees instead of rewarding outstanding employees only. Managers will sort out their problems and try to bring out the best of them in achieving goals. Moreover, managers should give employees freedom, autonomy and the authority of giving own point of views. Through empowerment of workforce, organization can go further and obtain success in future.
Effective leadership always fosters an organization's growth. Transactional leadership and transformational leadership are the two major leadership theories. Transactional leaders will define a specific goal and provide guidance steps as well as motivating followers to work harder and better in order to obtain the rewards that they want with productivity. This leadership styles take into consideration of employee's self-concept. It also focuses on employees' esteem needs. Transactional leaders are hardworking and well-understand about the functions of management. They will ensure that all the company's operations are going smoothly according to the scheduled plans and strategies.
Transformational leadership seems to be a better leadership styles if compared to transactional leadership. This is because transformational leaders inspire followers to perform more than what they are expected. This allows an organization to be more innovative because it encourages employees to make their thinking in a more creative way. Moreover, transformational leadership styles will improve the effectiveness of business unit, the cohesiveness of a team and the learning of an organization. It also assists in lowering the turnover rates, increasing employee satisfaction, improving the accomplishment of goals as well as improving work productivity. In addition, transformational leadership can response quickly to change process because it focuses on shared values, ideas and vision that can build closer relationships with followers. Followers know everything that will influence their jobs and hence they can faster respond to the change occurred.
4.0 Conclusion
In conclusion, leadership style has positive effect on performance and attitudes of followers. Leaders will also bring an organization towards its future success. A good leader will transform followers to become more productive and think out of the box. This assists a company to be innovative as well as has the ability to respond to customer expectation and demand that are changing quickly in today's business world. Customers are the reasons of the establishment of a company. Managers have the responsibility to managing customer relationship to sustain customers. Their leadership style will directly influence the frontline staffs who deal with customers at the first place. Hence, managers should understand how to manage human capital in order to obtain a long term relationship with their customers. Right people should be hired at the right time for strategic recruitment purpose. Besides, leaders should make things happen by monitoring followers' performance and ensuring that they are working together in achieving company's goals. They must equip with the required skills to deal with certain problems as well as making improvement in a continuous basis.
The three different types of leadership styles such as transformational, transactional and servant describe several functions of leadership style. Transformational leaders are focusing more on the company's goals while servant leaders put people or follower's needs first before any other factor. For transactional leaders, they provide rewards for followers who have high performance at workplace. However, in today's competitive business world, there are several challenges faced by leaders. For instance like the globalization trend, advanced in technology and others challenging issues. Hence, organizations need good leaders to lead them towards changes in order to overcome these challenges.
