The Impact of Leadership on an Organization
Leadership has a relationship with a number of factors within an organization at all levels. It can be defined as the process of influencing the activities of an organized group in its efforts toward goal setting and goal achievement. However, this essay with reference to these four theories of leadership, transformational, participative, transactional, situational and will seek to discuss the relationship between leadership and employee and organizational outcomes.
First transformational theories, focuses on the relationships between leaders and followers and seek to motivate and inspire by showing those in the organization the importance and higher good of the task. These leaders are focused on the performance of group members, but also want each person to fulfill his or her potential. Leaders with this style often have high ethical and moral standards. This theory can have an impact at the personal level of the employees where these results such as employee empowerment, job commitment, trust, beliefs and motivation can be achieved or enhanced, and unfortunately can either have a positive or negative impact.
When leaders recognize that these factors can be determinants of a successful organization, they focus on influencing the behavior of the employees and take full advantage of a sustained positive impact on the organization. This leads to positive personal outcomes for the employees who are more trusting of the organization which leads to high levels of job commitment, high motivation, and will engage in organizational citizenship behavior. However, if these same factors are neglected, a negative impact can occur, and the followers can engage in deviant workplace behavior and counterproductive activities as a result of not being satisfied or demotivated through resistance to any kind of change, or ineffective communication.
This method which can also be seen as leading by example and can inspire employees so that it does not feel as just a place to come and receive a pay check, but rather are focused on common goals and will put efforts in achieving those goals. Ultimately, the employees will be motivated and be satisfied in their roles that will then be inclined willingly to engage in organizational citizenship behavior.
The organizational outcomes from this theory will be high performance, increased customer satisfaction and effectiveness. On the other hand, if the relationship is negative, thus a breakdown in communication can occur and employees can seek to go against the culture of the organization possibly forming an interest group where they would engage in counterproductive activities and deviant workplace behavior which can have a spiraling effect on the organization causing inefficiency, ineffectiveness, reduced performance and dissatisfied customers.
Secondly there is participative leadership theory, which suggests that the ideal leadership style is one that takes the input of others into account. This goes a very long way in that it encompasses communication from both parties, which is ideal as information is shared between leaders and employees to attain organizational success. These leaders encourage participation and contributions from employees which help them feel more relevant as part of the organization as they become involved in the decision-making process. In participative theories, employees are very motivated resulting from their input which leads to high productivity. In addition, they are very satisfied in their jobs and with their leader which leads to valued rewards such as working on a high classified project and feeling good about working independently with the high demands of the project.
A negative impact would be feeling that they have to agree with the boss’ decisions and not their own ideas, deviant workplace behavior resulting from unrest, unfairness or corruption within the organization which can also lead to counterproductive activities. Organizational outcomes as a result from this theory can attain such as, high performance, customer satisfaction, effectiveness and efficiency. However, a negative impact can result in a high absenteeism and turnover culture, the perception of high power distance and reduced performance. In addition, the leader retaining the right to allow the input of others creates uncertainty which can happen as time passes, or management changes which can have negative outcomes.
Another approach to leadership theories is transactional leadership which according to Organizational Behavior 11e John R. Schermerhorn, Jr., James G. Hunt, Richard N. Osborn, Mary Uhl-Bien, John Wiley & Sons, Inc.pg 324 ‘involves leader follower exchanges necessary for achieving routine performance agrees upon between leaders and followers’. This theory can be found in some form or another in all organizations, In fact most employees perform at their best when they are told what to do, when direction is clear. In short transactional leadership is viewed as; you give me something for something in return. When subordinates perform well, they receive some type of reward. When they perform poorly, they are punished in some way such as being looked over for advancement. Some employees do not want the responsibility of decision making thus avoiding the responsibility when something goes wrong and to avoid the possible punishment.
Following the instructions of the leader is when they perform at their best which results in high productivity, job satisfaction and organizational citizenship behavior, as it is what they do which is also known as laissez-faire one of the dimensions of this theory. Organizational outcomes would be represented as high performance, high effectiveness and efficiency and full conformity with the culture of the organization. There are those however, that are motivated by responsibility and the rewards and recognition that comes with it, especially when the rewards are established beforehand. This is known as contingent rewards another dimension which also is represented by the same outcomes mentioned above.
Active and passive management by exception round out the other dimensions and active management watches for deviations from rules and standards and immediately takes corrective action. This can be seen as a form of micro managing, and can present a negative impact on employees who may believe that they are seen as not capable thus can engage in counterproductive activities. On the other hand, this method offers to be on top of events as they occur minimizing down time improving effectiveness and efficiency as an organizational outcome. Passive only intervenes when standards are not met, thus the feedback resulting from this could be punishment or reprimand. This can serve as a motivator in the future in increased productivity and performance both at the employee and organizational levels.
The last of the four theories of leadership is situational leadership which according to Robbins and Judge 14e says successful leadership is achieved by selecting the right leadership style and is contingent on the followers readiness to the extent where leaders can determine what their groups are going to do and what the outcomes of their actions are going to be.
This theory sees the importance of followers and uses the foundation that leaders can compensate for lack of ability and motivation with the use of these dimensions. When followers are unable and unwilling, clear and specific directions are needed which also serves as a motivator to obtain higher levels of productivity and job satisfaction for the employee and higher performance and effectiveness levels at the organizational level. However, if they are unable but willing leaders need to compensate for the lack of ability and get them to accept the leader’s desires.
This too will have the same outcomes as above. Next when the employees are able and unwilling, the leader has to be supportive and participative in order to be effective. The outcomes at the individual level results in increased productivity because the motivation is high and they are more satisfied with their jobs. The leader does not have to do much when the employees are both able and willing.
The four leadership theories mentioned resulted in different outcomes both at the employee level and at the organizational level. Transformational leadership theory focused on motivating and inspiring followers to reach for greater self awareness for the good of themselves and the organization. Transactional leadership guided their followers toward established goals by clarifying role and task requirements. Participation focused on consulting with subordinates and sought their suggestions before decisions were made, and finally situational leadership indicated that there is no one best way to lead and focused on the readiness of the followers.