leadership quratulain 290581
TRANSCRIPT
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BY: QURAT UL AIN(DMS) TO: Banjmin Collin
Managing Leadership in Organizations Page 1
Task1
1.1. Leadership Styles
According to Tannenbaum and Schmidt Continuum of leadership styles (tells, consults,
tests, suggests, consults, joins, delegates) at one extreme there is autocratic/boss centred
leadership style and at other end democratic/follower centred leadership style, these styles
depends on the degree of authority used by the lea ders. Higher, the authority used by the
leaders lower will be the area of freedom for the followers and vice versa Mullins L (2010) .
Continuum of manager-non-manager behaviour
Area of freedom for managers
Area of freedom for non- managers
Leaders Lead; Leaders Lead; presents Lead; presents group decision leaders allow
Make decisions. Sells Dec;Tellsdecision Tentitive dec; problems gets making followers to
Subject to change solution take function
decision within limits
Adopted from: Mullin L(2010), Management and organizational behaviour.
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1.1.a George Schaefer Leadership Style
George Schaefer, CEO 1985 -1990 was a leader with boss centred style, under his
leadership all the decision making was done at top level i.e. centralized decision making with
functional structure. Although he has promoted open communicati on and free flow of
information at all levels, u nder the leadership ofGeorge officers, managers and production
staff were allowed to communicate openly at all levels but all in all his leading style was
autocratic i.e. tell.
1.1.b. Donald Fites Leadership style
Donald Fites was follower centred leader (1990 -1999), before his leadership there was no
concept of power delegation at CAT, he was the first who broke the CAT into seventeen
divisions and delegate power of decision making, decision making was do ne at divisional
level. Under his leadership decision making was no longer limited to the top management, it
was decentralized.
1.2. Transactional Leadership
According to Mullins L (2010) transactional leadership focuses on making goals and
objectives clear and clear outputs, it explains link between goal achievement and rewards
and focus is on deviations from planned. It also deals with existing problems, takes
corrective action in case of any deviation and mista kes.
1.3. Transformational Leadership
According to transformational leaders hip theory of Bass, leaders transforms and motivates
their followers, according to this theory others are developed by motivation , vreation of
understanding of organizations importance and focusing on a long-term perspective, its all
about transforming performance of a business . It can be said a process of creating
motivation and commitment of followers Mullins L (2010).
1.4. Charismatic Leadership
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According to Mullins L (2010) ch arismatic leadership is visionary leadership , its based on
persona; qualities e.g. confidence, goal accomplishment and provides mission and vision of
what lies ahead, it is also based on how leadership influenced others.
1.5. George Schaefer Leadership style and leadership theories
George Schaefer as a leader exhibited mixture of behaviours described in transactional,
transformational and charismatic theories. The company had face losses of $1 billion during
1982-84, and become weak er than its competitor Komatsu.George response to the
problems of 1980s by taking different corrective actions and through different strategies and
solution was his transactional leadership behaviour.
Through his transformational leadership behaviour he had motivated the employees by
launch of ESP (employee satisfaction program). Implementation of new strategies e.g.
outsourcing, improved labour relations and plant modernization are examples of his
transformational and charismatic leadership qualities.
1.6. Donald Fites Leadership and leadership theories
Donald fites had mixture of transformational, transactional and charismatic leadership
qualities. Division of functional structure to seventeen divisions and delegation of authority at
divisional level, results employees motivation and represents the transformational leadership
behaviour. Donald Fites placed percentage of return on investme nt on each division, was
transactional leadership behaviour.
1.7. Jimm Collins 5 levels of leadership
According to Jim Collins 5 levels (n.d) managers at level 1 are technical, at level2 are human
relation skills , at level three managers have management plus conceptual skills , on fourth
level managers have strategic conceptual skills and on level five leaders inspire others by
placing service to others and accepting their mistakes Collins lecture(2010)
1.7.a Glen Barton & Jim Collins levels of leadership
Glen Barton was new leader of CAT in 1999, his characteristics, qualities and competencies
match with fourth level of Jim Collins leadership. During 1999 he had faced heavy losses at
CAT, in order cope with that situation and for the purpose of the company s long run
benefits, he had launched four new strategies, these strategies were diversification,
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development of new distribution channel, new market expansion and alliance with
competitors. Bartons strategic skills and conceptual skills helped him in imp lementation of
new strategies.
1.8. Relevance of Collins 5 levels of Leadership today 9
Rapidly changes in t echnology, internet, globalization and knowledge and fast business
processes, all these have made business environment more complex and more competitive .
For competition, sustainability and growth, it has become very important for businesses to
have competent and skilled leaders.
According to Jim Collins five levels of leadership, at level 1 leaders have technical
competence, leve2 leaders can manage effec tive human relations, on 3 rd level leaders have
strategic conceptual and operational skills and level 5 leaders are highly developed leaders
who can inspire others Collins lecture(2010).
Collins 5-level leadership is appropriate for todays diverse business environment,
organizations needs leaders all kinds of leaders having qualities from level1 to 5 in order to
compete and survive in diverse environment. People working at production fllo rs of
organizations are level 1 leaders, they are very important leaders because, organizations
cans produce without such skilled people, similarly leaders having qualities of other levels
have significant importance for organization, as concerned with to p level leaders they are
also having significance for organizations, because without such leaders no organization can
exist, so level 5 leaders are also precious for organizations.
1.9. Indirect Leadership & its impacts on performance determinants at CAT
y George Schaefer did outsourcing and branding, it was his indirect leadership , which
resulted in cost reduction and production efficiency .
y During 1984-87, innovation had been done by the CAT; they had doubled their
product line from 150 to 300, introduced light weight equipment for farming e.g.tractors.
y Schaefer launched plant modernization program and JIT during 1986 and completed
these programs successfully by adopting new technologies and bringing innovation,
during 1990s CATs plant was fully modernized and equipped with new technologies.
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Plant modernization caused improved productivity and efficiency, assembly process
at CAT plants reduced by four fold and customers order time was reduce d to 4 days
from 16 days.
y Donald Fites invested in adaptation of new technologies and implemented worldwide
computer network at all divisions around the world. This technological adaptation
resulted in improved communication and flow of information.
1.10. Direct Leadership at CAT & its impacts on Performance determinants
Schaefer exhibited relationship oriented behaviour and introduced employee satisfaction
program (ESP) during 1986.ESP caused in an improvement in employee satisfaction and
consequently, resulted in improved productivity , quality and rduction of product rejection by
customers from 2.8% to 0.6%. With the introduction of ESP cost saving of $10 was
achieved.
Task2
2.1. Current requirements
2.1. a. Market Globalization
Globalization
Globalization refers to
the economic, cultural, traditional communication between various
countries across the world Maps of India (n.d).
In this turbulence environment, due to technology, awareness , knowledge and economic
factors business are no longer limited to geographical boundaries of a country or a market,
now for organizations the world has become a single market, companies do not have their
customers within limited access, they have customers around the world and organizations
are operating worldwide with customized products , this expansion of business around the
globe is called market globalization.
1. Market Globalization for CAT
During 1980s CAT business was in American and European markets but with the passage
of time the company had realized the importance of globalization, they expanded their
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business in Asian markets during 1999 , like diversification, the CATs policy of globalization
prevented the company in hard times.
As from the case study it can be seen that market globalization had significant importance
for the company in past , its still very important presently for the company, to sustain their
competitive advantage, survival and growth they must bring innovative products in
accordance with demand globally. Market globalization can enable them to sustain their
competitive advantages and to remain the number one in the market. Market globalization is
their present as well as future need.
2.1.b. Internet for CAT
These days internet has become very important source of communication, has connected
the whole world and enables the orga nizations to do their businesses across the globe.
Organizations have their branches worldwide and these are connected through internet in a
single network and sharing business processes and information with each other, besides
these, organizations now hav e knowhow of whole world market because of internet. Now
instead of months, days or minutes it took only a few seconds to share information from one
end of the world to other end, its only because of internet. It has enabled online banking
concepts, online business concepts, now organizations are not selling their products from
physical existed markets but they can also sell from internet market .
CAT had realized the importance of businesses being online, they established a worldwide
network (1996) and connected all branches across the globe. CAT must have to do online
business i.e. they must target their customers online and sell some of their products online ,
its very important for the company to make their processes and communication faster so
that their performance should be improved .
2.1.c. Diversity
According to Ferrel & Hirt (2000), diversity is refers to the involvement of different ages,
genders, races, nationalities and abilities in the organizations , according to author more and
more organizations are occupying diversity of employees in order to serve their diverse
customers, organizations are improving their HR policies in order to recruit diverse
employees.
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1. Diversity for CAT
CAT adopted diversity during 1987 -1999, because of industry wise downfall in demand of
heavy equipment products; CAT did diversification and introduced light weight equipment,
power generation engines, tractors etc.
Cat diversification strategy prevent th e company throughout its life , but under the leadership
ofGlen Barton during 1999, he faced new problems e.g. CATs sales decreased by 37% but
these losses have been covered by profits from their diversified engine markets.
It is very important for big c ompanies like CAT that they must have to adopt diversification, it
was not only their need in past, its also their present need; they must diversify their
products, markets and employee diversification.
The CAT must diversify through hiring of mixture of new generation-X and Y in order to bring
new synergies and talent in the organization , because they are challenge accepters, have
technological knowhow and achievement oriented.
2.1.d. Mergers and acquisition for CAT
In order to cover up its losses and prevents the company from downfall, CATs leaders have
done mergers and acquisition in past , in 1996 Donald Fites purchased MaK(engine
company) and British Perkins (1998) engine manufacturers. Mergers and acquisition
played very important role in the suc cess of CAT in past.
Under the leadership ofGlen Barton, company had faced significant losses, so to be the
number one and for sustainability it is very important for CAT to expand its business by
mergers and acquisitions.
2.2. Future requirements
2.2. a. Psychological contracts
Psychological contracts are like relationship between employee and employer, these areperceptions, beliefs of employees for the employer, employees took organizational
responsibilities informally Wikipedia (2010).
Psychological Contracts at CAT
For CAT, psychological contracts are one on the most important future as well as present
need; management must promote psychological contracts in order to prevent strikes and
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employees dissatisfaction, the company had faced lots of problems during 1981-83 only due
to employees dissatisfaction. Top management at CAT had not recognized the importance
of psychological contracts this leads to long strikes by the employees and resulted heavy
losses.
Promotion of psychological contracts at CAT will result to employee satisfaction,
belongingness for the organization, loyalty, retention and productivity. Psychological
contracts at CAT might leads to free flow of communication at all level of organizations and
an open friendly culture.
2.2. b. Scenario planning
According to RDI (2007), managers make judgments about future possibilities and develop
plan for those in order to overcome uncertainties and risks.
1. Scenario Planning at CAT
In case of CAT, it can be seen that the company have done sc enario planning to some
extent but they have not done it properly and with concentration, e.g. rise in dol lar values
causes losses at CAT, to cope against such situation e.g. financial marker risks, natural
disasters etc in future the company must have to develop proper scenario planning.
Scenario planning will help the CAT to minimize their future potential risks and enable them
to maximize the possibilities of success.
2.2. c. Shared Organizational Learning
According to Collins lecture (2010), learning organizations are those, promotes and support
learning throughout at all levels of organization.
1. Shared organization learning at CAT
CAT should promote learning throughout the organization is such a way that their culture
become adaptive to learning, learn ing culture will help the CAT to sustain competitiveness
and growth in the futures dynamic and complex environment and people at shared learning
culture of CAT should be adaptive to change quickly and effectively.
2.2. d. Virtual Organizations
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According to Collins Lecture (2010) virtual organizations are organisation distributed
geographically and whose work is coordinated through electronic communication , virtual
organizations have shared vision and goals and combine their competencies.
1. CAT as Virtual Organization
In this fast moving world where technologies are changing in minutes instead of months or
years it has become very important for the businesses to operate in a unique way, through
virtual connection organization can operate differentl y, its very crucial for the success of CAT
that they must also be virtually operated in future, presence everywhere through wired
network is a plus point for CAT in this way they can provide immediate services to their
customers, for their light weight equ ipments they can take online orders and can do online
selling it should enhances the customer satisfaction on the other hand it should be cost
effective for CAT.
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Task3
3.1. Development of Leadership at CAT
For the development of leadership within CAT, first we should plan how will develop. After
planning next we practically do the actions then evaluation of its effectiveness Mullins
(2010).
In order to develop the leadership program at CAT, first the organization should plan who will
be developed and how one should be developed. The organization should develop from its
own staff member i.e. managers and they should recruit some new and fresh talent in order
to compete, survive and adopt new technologies .
3.1. a. Recruitment & Selection of new staff for leadership development
1. Recruitment:
Recruitment refers to job announcement/advertising, attracting, and screening of candidates
FlippoE (1984).
According to tutor2u (n.d), there are different methods of recruitment these can be internal
recruitment, external recruitment, jobcentres, job advertisement etc. Internal recruitment
have its advantages and limitations for organization e.g. internal recruitment is cheaper and
easy because the staff is already experienced. B ut one drawback of internal recruitment is itlimits the new ideas and talent within the organization. While external recruitment is costly
but it brings new ideas within the organization . Organization can recruit through jobcentres,
its also cost effective way of recruitment because job centres are paid by the government
and they are providing services to both employer and jobless people. It also saves
organizations time.
1. External Recruitment at CAT
CAT should recruit and select new staff from externally e.g. universities, by advertising in
news paper and through recruitment agencies and then go through a detail selection
process and will select new staff. Recruitment and selection of new staff will help CAT to add
new talent in the organization and it sho uld enhance the future prospects for CAT.
2. Selection for leadership development from within CAT
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CAT should select managers from within the organization and develop them as leaders, the
managers should be selected on the basis of past and present performance, qualification,
experience and potential they have got to become a leader.
After selection from outside and inside the CAT should do actual development of the staff,
different methods could be used, but according to my recommendation the organi zation
should select the following:
3.1. b. Mentoring
According to Robbins (2001), mentoring is like a relationship between a senior and his/her
subordinate and helping him/her in the development.
CAT should provide mentors for the staff, so that they shou ld guide them in their career and
leadership development. Mentees will help develop and polish their personal skills and self
confidence. Staff mentoring , not only develop leadership skills but also promotes the friendly
and open environment within organ ization
3.1. c. Training courses
CAT must have to arrange different training s and trainings on up to date
technologies, business process, tools and techniques, this will keep their staff in line with
market needs and upcoming technologies.
3.1. d. Own universities
These days most organizations have their own universities and devel opment centres
for educating and training of their staff, its very effective and efficient way of development.
CAT will establish their own developing centres e.g. universities for educating and
developing their staff for their different divisions in the world . Where the staff should learn
practical work as well as theoretical background for developing their skills.
After providing all these trainings at CAT, the trained staff should be evaluated in
order to determine whether the development have met the desired standards or not a nd how
effectively they have got leadership skills and what should be further needed for their
developments.
3.1. e. Empowerment
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According to Mullins L (2010) People respond in best ways when they have greater
responsibilities.
Empowerment is a good way for staff development, by empowering staff they feel
sense of belongingness for organization and motivation for hard work and these leads to
increase in productivity.
1. Empowerment at CAT
After appropriate development of leadership skills within employees at CAT, the
organization should empower them in order to determine their performance. CAT had
empowered their staff in past by dividing organization int o seventeen divisions and the result
was increased productivity.
3.1.f. Investor in People
CAT should do investor in people in order to develop leadership e.g. through
trainings, financial and non financial rewards, empowering. Investors in people will r esult
employee satisfaction and leadership skills will be best. CAT can invest in people for long
term benefits and leadership in the market. They must have to provide some reward to their
employees for motivation and productivity.
3.2. Critical Evaluation
Development of leadership and introduction of new trainings, empowerment, recruitment and
selection and development of own universities should be costly for CAT e.g. external
recruitment cost, training costs, cost for establishing universities etc, but all these costs are
for short term because if we consider the benefits of all these on long term and compare
with cost then cost is very tiny in comparison with benefits and profitability, CAT should
sustain leadership position in the market with having ski lled and well developed human
resources, they could enjoy employee loyalty and retention and the ultimate result should be
improved quality products, high sales and profitability.
All in all the leadership development is very good for CAT for their future prospects.
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Bibliography
Collin, B.(2010). Diploma in management studies. Lecture delivered for module Managing
Leadership in Organizations on April 2010-july 2010 at Birmingham International College
Ferrel, O., and Hirt, G. (2000) Business A Changing World. 3rded Newyork: MGraw-Hill.
Lancaster,G.Massingham, L.(1999) Essentials of Marketing. 3rded Berkshire Uk: MGraw-
Hill.
Mullins, L (2010). MANAGEMENT & ORGANISATIONAL BEHAVIOUR. 9th ed uk: Pearson
Education.
Robbins, S.(2001) OrganizationalBehaviour. 9thed New Jersey: Prentice Hall.
Tutor2u(n.d). Recruitment Methods[online] availbe
fromhttp://tutor2u.net/business/gcse/people_recruitment_methods.htm accessed
on[20.07.10]
Maps of India (n.d) Globalization of markets [online] available from
accessed on [13.07.10].
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