Leaders Make a Real Difference in an Organisation’s Performance

1 January 2017

Within these qualities over history great leaders have developed detailed theories that are constantly being utilized within successful corporations today. Amongst these are Trait theory, Behavioural theories and also the Situational contingency theories that were used to represent successful leadership qualities. Great leaders become highlighted in times of oppression, utilizing their talents to move forward and have solid control of their organisations, in turn developing positive organisational performance.

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Through past generations leadership had developed to the ultimate success it is today. Through multiple theories, leadership has moved to the point where it now has a factual impact on organisations performance. The contemporary management theories are used in numerous ways of motivating, creating opportunity providing inspiration and resulting in a definite increase in organisational performance. This is evident in today’s society, through a minimal view of coaching sporting teams to the operations of large corporate groups such as Wesfarmers.

Creating opportunity, Throughout history, it has been clearly evident that a great leader’s input shall reflect with a great performance output, thus developing opportunities for individuals to accomplish their maximum potential. “Leaders create opportunity for individuals within their sphere of influence” (urbanfoot. ca, 2009), opportunity being a set of circumstances that makes it potentially possible to achieve anything from extrinsic to intrinsic rewards. This creation of opportunity manifests itself across the globe in large and small organisations.

In contemporary society it is shown by leaders within sporting clubs, the success of the best AFL clubs are built on a hierarchy of leaders, club captains, coaches, and trainers. They are all striving to create opportunity for young potential players. Essendon football club’s great success over the past numerous decades have been because of the major influential leadership role James Hird has played within the club. James Hird leading his club by being captain through two premierships and is now today still leading the club by coaching.

His career of captain assisted with the creation the opportunity for the club leaders today and now he is continuing his leadership role by coaching the team, it is evident with his club involvement there is a definite outcome of organisational performance. As well as leading through creating opportunity, great leaders strive to inspire others within their environment. Inspiration, Leaders aim to inspire individuals within their vicinity to pursue the outcome of organisational performance. This constant attempt to provide inspiration is strongly shown by our world’s best leaders that are driving the powerhouse of our world’s economy.

Steve Jobs, co-founder of Apple, Phil Knight, founder of Nike and Richard Branson founder of Virgin Group, these individuals are amongst many others that are part of the world’s most inspirational leaders. These people have founded some of the world’s biggest corporations by their profound ability inspire. Richard Branson went from developing a school newspaper called Student to operating one of the world’s most complex conglomerates know as Virgin Group. Branson’s life motto is to ‘have fun’ this is reason to his positive eccentric personality that reflects to inspire others around him. Lead by example” this phrase is used throughout human life to portray inspiration on others, through creating an inspiration on others leaders are assisting to motivate. Motivation, Motivation is a key part of a great leader’s success in achieving organisational performance. Motivation is referred to as “the forces within an individual that account for the level, direction and persistence of effort expended at work” (Wood, J. et al, 2010). Motivation on individuals is reflected by successful leaders, through multiple different theories. Abraham Maslow’s hierarchy of needs theory identifies high order needs and low order needs” (Wood, J. et al, 2010) this details a pyramid that highlights the work motivational needs of individuals, including psychological, safety, social, esteem and self-actualisation. This research has contributed to the success of leaders in motivating and achieving ultimate organisational performance across large contemporary organisations. In many of today’s organisations leaders commonly motivate employees through the use of offering extrinsic rewards, “positively valued work outcomes” (Wood, J. t al, 2010), this may range from Christmas bonuses to simply allowing the use of a company car. Through the use of extrinsic rewards individuals are motivated to produce their maximum performance. It is evident in KPMG, one of the world’s largest consulting firms; the use of leaders providing employees with extrinsic rewards motivates employees to achieve their full potential. KPMG provides employees with an annual bonus fluctuating on the employees yearly work effort. In doing so employees are determined to work to achieve a high constant overall organisational performance.

Individuals that utilize the use of their leadership talents; creating opportunity, inspiring and motivating individuals will evidently result in reaching an optimum level of organisational performance productivity. Throughout history within these abilities leaders have developed several theories to manage the way it is put into practice. Through the past centuries leaders have always played a pivotal role in the triumph of groups, from the times of Genghis Khan, Napoleon and even Hitler, their efforts have exemplified how great leaders can make a major difference to organisations.

All leaders tend to have different styles when it comes to commanding their subordinates and as time has progressed they have been categorized into different approaches and theories. The first theory to be thought up was known as the trait theory, and as the years moved on different studies and research was conducted to the point where different types of leadership are studied. Trait Theory, The trait theory which identifies different traits between leaders and followers, and assumes that leaders are born not developed.

The trait theory takes into account physical and mental attributes of people that appeared to be more successful leaders. This theory took into account things such as height, weight and personality, and rather than study each of those in detail, these characteristics were recognised in effective and ineffective leaders. Therefore people could be able to predict if a person was a worthy or unworthy leader, although due to the studies being conducted as early as 1900 there was never any real recording s of evidence.

Also there were never any real set of traits that defined a good leader, in other words there was no benchmark, which made it difficult for people to understand the theory as there were great leaders that had different characteristics. For example Hitler had different traits and characteristics to Nelson Mandela, Hitler was considered hard and persistent whereas Mandela was a visionary. Although it is certain that the trait theory set the trend for years to come. Behavioural Theories, The trait theory laid the foundations for what was later known as the behavioural theories; this included the Michigan and Ohio State studies.

The behavioural theories compliments the flaws of the trait theory as it is more action based rather than only taking natural aspects into consideration. The Michigan studies showed that there are two types of leaders, employee-centred supervisors and production-centred supervisors. Employee-centred supervisors are leaders who look out for their workers and try to keep them emotionally happy by showing genuine interest in the wellbeing. Whereas production-centred employees are mostly concerned about getting the work done and meeting figures, rather than looking out for the welfare of their workers.

Research has shown that employee-centred managers were found to have more efficient and effective groups than production-centred supervisors. The Ohio State studies which are very similar to the Michigan studies showed that leaders had two main dimensions, consideration and initiating structure, which can be related to employee-centres supervisors and production-centred supervisors respectively. Although the results from this study showed different results as the supervisors who received the best output from their employees showed a high amount of consideration and initiating structure.

Situational contingency theories, The next sets of theories to be developed were the situational contingency theories, which came about in the 1960’s. These theories involve leaders that can adapt to the situation they are place in, for example Fiedler’s theory predicts work group effectiveness and how it depends on a match between the leader’s technique and the difficulties of the situation. Fiedler also considered the amount of situational control a leader has, which is how well a leader can determine the result of a groups actions and the course the will take on the way.

Of course Fiedler was not the only person to come up with situational theories, there was also; Robert House, Paul Hersey, Kenneth Blanchard, Steve Kerr and Jonathon Jermier, but for the purpose of not repeating similar information they will not be discussed. It is fair to say that over the years leadership theories have changed with the times. The trait theory was effective for organisational performance as it helped identify leaders before they even took on a leading role, and although today that might seem politically incorrect, it’s what was suitable for the times.

The behavioural theories in the late 1940’s had a great effect on organisational performance because people started to take into account the actions of their leaders and the different effect that certain actions would obtain. The Situational theories took another step into understanding the effect that good leaders can have on organisational behaviour by interpreting the how leaders manage the situation and whether or not they can mould to new and different challenges.

As leadership theories have evolved, only the strong have survived, and the recent global financial crisis has provided great challenges for leaders to portray their successful qualities. Leadership is a quality that has grown in human culture over thousands of years and within the past century economies have taken significant falls highlighting the choices great leaders have made to sustain organisational performance through this time.

Two significant downturns in history shook the world economy, the great depression of the 1930’s, Franklin D Roosevelt’s leadership qualities particularly exceled through this period and the global financial crisis saw absurd leadership talents ChemChina. These flairs in leadership talent depicted the difference it can asset on organisational performance. Global Financial Crisis – ChemChina In 2007 the world economy fell into the deepest trough in decades, this is known as the global financial crisis, it was considered the worst financial crisis since the great depression in the 1930’s.

The global financial crisis saw the collapse of multiple investment banks across the United States of America and developed a ripple effect that was felt by economies across the globe. Great leaders stood out through this period powering their companies without feeling the effect of the economic down turn. One company in particular that continued a sustainable growth in organisational performance is ChemChina. While millions of companies were collapsing and on the verge of insolvency ChemChina’s prime operating income multiplied seven times, total assets increased by 133. 4 billion Yuan and total profits escalated an increased 12 times over, Ren Jianxin the president of ChemChina’s outstanding leadership qualities were the main motive behind the relentless accomplishment. The massive operational increases in production were due to major “innovations in organisation, institutions and technologies involving changes in their way of thinking, philosophies and production technologies and processes”. (Ren Jianxin, 2009) All this required an overall development in their way of leadership, in turn a successful corporate transformation thus organisational performance. 930’s Great Depression – Franklin D Roosevelt The great depression which hit the world through the 1930’s affected the world on a scale that had never been seen before. The depression started in America when stock prices started to fall, and on October 29, 1929 the stock market crashed and the effect spread globally. The effect this had on the world was far worse than anyone could have ever imagined causing people to commit suicide, die of starvation and start their lives over in a new world. Out of this came one of the world’s greatest ever leaders, Franklin D.

Roosevelt, who dragged America and the rest of the world out of the depression. Roosevelt took over as president in March of 1933 and re instilled hope back into the American people by promising action and in his first address to the people he said one of today most famous quotes, “The only thing we have to fear is fear itself”. Roosevelt decided that to get the country out of the position they were in he had to adopt policies that were frowned upon, such as creating deficit budgets, which for the times were unheard of.

When Roosevelt pulled the American economy back to its feet he was rewarded by being elected for four successive terms. Roosevelt proved how one great leader can have a major effect on a group of people and that it is not impossible to come back from the dead. Financial crisis’s at any time cause a great amount of angst in the around the world, and it takes very special people to lead corporations, governments or even countries out of these fatal situations.

ChemChina and Roosevelt were both innovative in their styles and led their respective organisations either to new great heights or just simply out of a great depression. Throughout the times Leaders have always come under scrutiny from their critics, although one does not attain criticism without achieving. Without Leaders providing their qualities to inspire, create opportunity and motivate, organisations would have a lack of soul and would be forever falling in a negative style.

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