Organization_Can_Be_Successful_Whrn_There_Is_Match_Between_Organizational_Culture,_Economic_Sector_and_Leadership_Style

The adequate style of leadership for the organization is that matches best the “nature of the job; preferences of the followers; the leader’s attitude and the situation at a point in time” for the particular organization (Kurfi,A.,2009). Nevertheless, none predesigned in theory leadership style could be pointed immediately as a universal solution for achieving employee satisfaction and productivity in any given organization and period in time. Widely perceived criteria for management effectiveness is the achievement of company’s goals – profitability, market share, brand recognition etc. On the other hand, each organization, comprising of indefinite variety of individuals, is assumed unique unity and that uniqueness in terms require a distinctive leadership style. The most suitable leadership style depends on the nature of the performed operations: economic sector, type of activity, etc., but also by the individual preferences of the subordinated employees, the point in time and the environment in which the organization operates. In line with that, I support the essay’s statement that organizations cannot function adequately if there is no match between the economic sector in which they operate their organizational culture and their leadership style. A wide variety of approaches to managerial styles was explored throughout the literature reviewed, focused on the organizational culture and leadership style. Mullins adopts four main approaches to organizational structure and management: classical, human relations, systems and contingency. Classical approach focuses on purpose, formal organizational structure and technical requirements. Classical approach received low evaluation due to underestimated complexity organization design and multiple goals (Simon, H., 1976). Effectiveness in practice of the latter principle has been put into question (Woodward, J., 1980). “Scientific management” as a sub-group of classical approach concerns the improvement of the management efficiency by increase of productivity levels of individual workers (Mullins, L., 2007). This sub-category of classical approach emerged in the period of industrial revolution and materialization of new technologies. F.W. Taylor labeled as an inventor the sub-category considers that all working processes can be divided to a set of tasks as each task could be performed in only one appropriate way in terms of quality and time consumed, i.e. there is a scientifically derived method for every job (Taylor, F., 1947). Taylor supported the idea of full control over the fork force, many managerial levels and detailed control over work process (Cloke, K., Goldsmith, J., 2002). Classical approach and its two major sub-categories: “scientific management” and “bureaucracy” are ignorant to the important influence of the level of job satisfaction of company’s employees over their performance together with their individual incentives, perceptions and motivation factors. “The overemphasis on process rather than purpose, fragmented responsibilities and hierarchical control means that it’s all too easy for individual to neglect the larger purposes to which their small effect is being put” ( Caulkin, S., 1988). In the globalizing economy, the need for alternative forms of corporate organization, which could address changes in the environment faster thanks to flatter and decentralized structure and internal exchange of knowledge and ideas, which in terms satisfies the individual need of employees for inventiveness and personal contribution. Despite enormous ground for criticism, in some forms of public sector organizations such as universities and local authorities bureaucracy as managerial and organizational approach will prevail even in current global economic environment (Green, J., 1997). The second major approach to management, organization and structure is human relations approach. The focus is placed on social factors, lack of formalism and consideration for human needs. Organizational structure is ignored. Systems approach reconciles the first two mentioned approaches and focus on company organization as a part of external environment - business as an open system in which change in one part affects all others. “The systems approach encourages managers to view the organization both as a whole and as a part of a larger environment” (Mullins, L., 2007).Fourth major approach emphasizes on dependence of successful organization structure and managerial style on the particular contingencies of the situation in each of it aspects. The latter approach in largest extend confirms the importance of particular situation to the effective combination between company’s structure and leadership style. Terms management and leadership are often used interchangeable. Leadership is defined “as the ability to influence a group toward the achievement of vision or set of goals” (Robbins, S., Judge, T., 2008). Four conceptual factors are usually related to the company performance: adequate resources, effective leadership, organizational climate of reliance and objective employee evaluation based on personal contribution. A scarcity of resources affects negatively organizational effectiveness and the achievement of corporate goals. In addition, teams cannot function if their members are unable to agree on who is responsible for a particular task and how will the overall workload be shared within the group. Here lies the importance of leadership and organizational structure, i.e. outline the specifics of required tasks and the way in which they can fit together so to integrate individual skills in the workload. In the conditions of globalizing world and large-scaled organizations, the importance of the successful for the particular company leadership style rises. In multiple team organizations, contemporary leaders are expected to delegate different responsibilities to teams and facilitate their teamwork and cooperation as a whole unit (Robbins, S., Judge, T., 2008). According to Mullins, several basic approaches to leadership exist. Qualities of traits approach assumes leaders as born not made. Leadership consists of inherited characteristics. The functional of group approach assumes just the opposite to the quality of traits approach - perception of leadership is as ability, which can be taught or developed. Leadership as behavioral category emphasize on the different behaviors of leaders and their significant effect over group performance. Kinds of behavior of people vary in leadership situations. The most effective leadership style will depend mostly on the variables according to given situations, which will require prevalence of consideration for subordinates or structure. Styles of leadership approach assume that leadership style is effective for the organization if it complies with the subordinates’ perception for it. Throughout history, the importance of leadership style and failure to predict theoretically the ultimate solution for effective leadership formula for each organization gave rise to contingency theories on leadership. Although considered “tough – minded” leaders Bob Nardelli former CEO of Home Depot and Chrysler was hired with purpose to lead both companies out of financial crisis, but despite the successful achievement of its major goal, was dismissed after their stabilization. “What worked in very bad times and in very good times didn’t seem to translate into long-term success” (Robbins, S., Judge, T., 2008). Different employees should be treated differently and also same subordinates should be addressed in a different manner when situation changes (Yukl, G., 1989). Current perception for leadership associates it much more with inspiration, positive influence and vision than with control. Leadership style is of utmost importance for successful performance of any organization. “Leaders both motivate employees and design effective organizations” (Advanced Institute of management Research, 2005). Limitations of trait and behavioral theories lead to development of charismatic and transformational leadership theory. Four basic abilities are contributed to the charismatic leader:  1)” vision and articulation”; 2) “willing to take on high personal risk”; 3) “sensitivity to followers needs” and 4) “unconventional behavior “(Conger, J., Kanungo, R., 1998). Another popular perception for the success of charismatic leaders is the observed employees’ identification with their vision and long-term goals. Reviewed literature on leadership theory points out for an existing correlation between charismatic leader and high level of company performance. Organizations with charismatic CEO tend to be more successful in terms of profits and charismatic professors are able to increase through their traits course evaluation (Robbins, S., Judge, T., 2008). Since charismatic leaders rely on appealing to the followers’ expectations and ideas, even the perception of routine jobs could be made more meaningful by truly charismatic leader (Yukl , G., 1989). Real charismatic leadership style is able to span beyond the limitation of economic sector or organizational structure. Nevertheless, charismatic leaders may not in every situation lead to company prosperity, particularly when tend to exploit their strong influence for fulfillment of personal goals. Thus, the situation, as a set of many given variables in a given time period, should much the leader’s vision. Charismatic leaders are more likely to emerge during the time when the company is “in a state of stress and transition” (Yukl, G., 1989). The incentive for survival in the face of increasing competitive environment gave rise to transformational leadership theory. Despite the existing overlap between the charismatic and transformation leadership, the latter is assumed as broader. Transformational leader has great effect on subordinates, mainly thanks to the trust, admiration, loyalty and the respect of their followers. By increasing employees’ awareness of importance of the task, aiming them to exceed their own self-interest for better fulfillment of company’s objectives, effective leaders can transform their subordinates (Bass, B., 1985). Transformational leaders can be viewed as influence on two separate levels:  individual employee and system or institution. Additional argument in support to major supported thesis that the organization can function effectively only when the right match between organizational structure and leadership style are embedded in Burn’s theory on transforming leadership. Transactional leadership as a variation of transformational leadership uses self-interest as incentive for the desired direction of change. For example, political leaders exchange subsidies for votes. Corporate leaders exchange wages to productivity. Nevertheless, influence based approach exclude bureaucratic organizations, where emphases lye on legitimate power and respect for rules, rather than on influence based of exchange and inspiration (Burns, J. 1978). Organizational culture has strong influence over the direction of company’s development. Organizational culture is categorized in researched theory as a system of shared meanings held by members, which differentiate it from the rest. Organizational culture emerges form the values and vision of company founders. Seven primary characteristics in greater extend resume the fundamental nature of organizational culture: “innovation and risk taking”; “attention to detail”; ”outcome orientation”; “people orientation”; “team orientation”; “aggressiveness” and “stability” ( Robbins, S.,2008). Company management creates an internal climate within the organization, which sets the general limitations for acceptable and unacceptable manner of action. Organizational climate is a dimension of organizational culture and can be described as “prevailing atmosphere in an organization, as perceived by its members” (Rumbles, S., French, R., Rayner, Ch., Rees, G., 2008). Positive organizational climate usually will relate to the degree of overlap between personal incentives of employees and corporation goals. Organizational culture is drawn from the individual experience of company’s employees, which makes it unique to any given set of employees and situation. There is no redesign model of organizational culture which always be perceived for the effective one for any given organization. “No one type of culture will be effective in all situations, instead it all depends, for example, on an organization’s size, stated aims, market and technology”(Rumbles, S., French, R., Rayner, Ch., Rees, G., 2008). Small and medium-sized trading companies aiming on gaining broader market share are not likely to achieve its goals by adopting bureaucratic culture opposing to organizations in healthcare sector, for which adherence to rules, procedures and regulations is required by their core purpose to properly serve their patients. Organizational behavior in different countries tends to vary even within successful multinational organizations with strong organizational culture. National cultures have a stronger influence over employees’ behavior than the overall organizational culture. The existing degree of synchronization between personal preferences, which is influenced by individual values, cultural differences and goals, and overall organizational goals will pervade the successful development of every corporation. Effective management lies also in the ability to match individual needs with organizational objectives. Thus, one further step is required towards the right managerial course, i.e. grasping good understanding for organizational culture. “What is expected and accepted in one organization may not be the same in another. For instance, creativity and individuality may be encouraged in one business but undermined by bureaucracy in another”(Mullins, L., 2007). Any misinterpretation of subordinates’ cultural perceptions by company’s management could weaken its capability of managing effectively the organization. This is particularly true for managing international companies within the context of globalizing world. Susan Schneider and Barsoux confronted the myth ” that management is management” and “like science, its practice is universal” (Schneider, S. & Barsoux J., 2003). This adds arguments in support of the basic assumption that effective leadership style for a particular company should be suitable to the organizational culture and the economic sector in which company operates. National culture viewed as a set of behavioral patterns, believes and values also influence the employees’ preference, which have to be unveiled and satisfied by the effective leader. “Research indicates that managers are ineffective in cross-cultural situations when they either deny having stereotypes or get stuck in them” (Schneider, S. & Barsoux, J., 2003). The effective achievement of corporation’s goals and full utilization of available resources depend on management’s ability to readjust initially adopted managerial style accordingly to the cultural uniqueness of subordinate employees rather than simply enforcing stereotyped views on them. National culture not only influences individual preferences of the company’s employee, but also affects the organizational structure and processes. Company’s organizational structure and processes are influences not merely by industry and corporate culture and goals, but also by national culture of the existing inside groups of individuals. Thus, long –run multinational businesses usually have different organizational structure across different regions. Furthermore, “regional, ethnic and religious cultures account for differences within countries; ethnical and religious groups often transcend political country borders” (Hofstede, G., Hofstede, G.I. & Minkov, M., 2010). The outcomes from economic development on a national level could be influenced by the different cultural settings of the society. To flourish some economic sectors prerequisite more authoritarian culture opposite to others that usually depend on widespread of liberalism. Nevertheless, “one and the same set of cultural traits cannot produce the same effects in all environments and in all historical periods”( Minkov, M. 2011). The analogue made with single organization and its leadership effectiveness, which depends on the correlation between organizational culture, personnel traits, time, management flexibility and the situation. Managing across cultures has increased its significance in line with economic globalization. For the achievement of company’s goals in the most efficient manner, it becomes more and more important the comprehensive understanding of organizational characteristics in the local country as the managerial approach will differ from one society to another. Divergence theory argues that “the practice of management is culture – specific from one society to another” (Branine, M., 2011). Different situational factors such as local cultural norms, legislation, economic development, historical trends etc., will require different managerial policies. Individual behavior of employees has strong influence on organizational culture as well. According to Branine, there are evidences in existing literature and academic models on the subject of cross-cultural management that holds supportive arguments to the divergence thesis that management can differ from country to country and even form one organization to another, even though they might operate in same economic sector (Branine, M., 2011). Nevertheless, culture is one of several important factors which interact and simultaneously influencing organizational leadership style. The rest more broadly categorized factors are: ·        organizational size – larger organizations tend to be more formal and bureaucratic; ·        economic sector – organizations operating in one sector tend to have more alike organizational structure even across national cultures, than those occupied in different   economic segments; ·        technology – strong influence on organizational culture and work design; ·        ownership in the context of globalizing economy; (French, R., 2007) A traditional distinction is widely perceived between the management style in private and public sector. This difference to some extend is related to specific features of public enterprise such as services provided for well-being of community, political environment, high level of governance control and legislation, difficulty in measuring the quality produces as profitability is not involved as key criteria, rigid HR policy and etc. Nevertheless, basic principles of management apply to all types of organizations including public ones and private as well as same problems related to effective management style are concerned: clear objectives and goals, suitable organizational structure, efficiency and effectiveness of operations. Despite the different in methods and procedures for both sectors, the prosperity and long-term endurances of the business entity requires application of efficient leadership style in every economic sector. The essentials of both leadership and management are constant in the public sector and in the private sector. “Management theories apply to all managers and both sectors face a central factor of the management of change”(Mullins, L., 2007). Nevertheless, different leadership styles will be need to cope with different situations - autocratic style will make sense when an organization experiences financial difficulties, its existence depends on rapid turn –around, and that style will be counterproductive in the period of growth (Rajan., A.,2002). Clearly, there is no uniquely successful recipe for an effective leadership style and organizational design. Nevertheless, there are several important factors which predetermine in a large extend the successful achievement of long-term organizational goals: personal characteristics, values, attitudes and traits of the leader; personal characteristics of the subordinates, their values ,preferences, needs and expectations; type and nature of the organization itself, organizational culture and the influence national culture related to the globalizing working environment; the nature of tasks to be achieved and types of management decision taken ; the technology and systems of organization; the influence of eternal environment in which company operates; type of social structure and informal organization; different stage of company development. More effectively, company’s goals are achieved when theoretical leadership approaches are used as a mixture rather than a strong adherence to only one type in reply to constantly changing economic environment. References: * Kurfi, A.,(2009),”Leadership styles: The Managerial Challenges in Emerging Economies”, issue 6, International Bulletin of business administration,. * Simon, H., (1976), Administrative behavior, 3rd edition, Free press. * Woodward, J., (1980), Industrial organization: Theory and practice”, 2nd ed., Oxford university press * Mullins, L., (2007), Management and organizational behavior, 8th ed., FT/Prentice Hall. * Taylor, F., (1947),Scientific Management, Harper & Row. * Cloke, K., Goldsmith, J., (2002), The End of Management and the Rise of Organizational democracy, Jossey-Bass. * Caulkin, S., (January 1988), “Faceless corridors of power”, Management today. * Green, J., (January 1997),”Is Bureaucracy Dead ' Don’t Be So Sure”, Chartered Secretary. * Robbins, S., Judge, T., (2008), Essentials of organizational behavior, 9th ed., New Jersey: Prentice Hall. * Yukl , G., (1989), Leadership in organizations, 2nd ed., New Jersey :Prentice Hall. * Conger, J., Kanungo, R., (1998), Charismatic leadership in organizations, Thousand Oaks, CA: Sage. * Bass, B.,(1985), Leadership and Performance. N. Y: Free Press * Burns, J. ,(1978). Leadership, New York: Harper & Row * Robbins, S.,(2008), Organizational behavior, 11th ed., Prentice Hall * Rumbles, S., French, R., Rayner, Ch., Rees, G., (2008), Organizational behavior,2nd ed., Lohn Wiley&Sons * Schneider, S. , Barsoux J., (2003), Managing across cultures, 2nd ed., Prentice Hall * Hofstede, G., Hofstede, G.J. and Minkov, M., (2010),Cultures and Organizations: Software of the Mind, 3rd ed. New York: McGraw-Hill. * Minkov, M. (2011), Cultural differences in a globalizing world, first ed., Emerald * Branine, M., (2011), Managing across cultures: concepts, policies and practices, first published 2011, Sage Publications * French, R., (2007), Cross-cultural management in work organizations, London: CIPD * Rajan., A., (2002),”Meaning of leadership in 2002” , Professional manager, March 2002 * “Leadership for Innovation”, Advanced Institute for management research, March 2005