Term Paper, 2011, 48 Pages
I. Executive Summary
II. List of Figures
III. List of Abbreviations
2. What Is Leadership? - A Practical and Scientific Approach
2.1 Leadership from a Top Manager’s Perspective
2.2 Leadership from a Scientific Perspective
3. Classical Leadership Theories
4. The Foundation of Good Leadership
5. A Critical Analysis of Managers
5.1 A Leader’s Failure? - Thomas Middelhoff
5.2 A Leader’s Success? - Martin Winterkorn
V. ITM Checklist (360-degree analysis)
Mangers confront an increasingly complex, interconnected and fast-moving world in which large corporations, low-cost competitors and social networking etc. all share the same stage. In this scenario managers are expected to perform well - one the one hand at the operational or strategic level, on the other hand in functional or personnel issues. The majority of companies are aware that managers face these challenges and also know how important it is that managers are effective. Therefore, companies try to foster the leadership skills of managers through a number of measures and continuously search for latest insights to improve their capabilities.
Science is determined to give the answers, as numerous disciplines tackle this topic, particularly sociology and psychology, but also business management. Often it is asked what good leadership is and how it is applied to the business context. Since leadership proves itself in practice, the business world also holds the answers.
Therefore this paper does not solely assess scientific literature; it also considers the insights from the business world. At first, top managers reveal their personal view of leadership, using their rich experience. Based on this, the topic will also be discussed from the scientific perspective. With the help of these tools, the task of the following paper is to analyze two famous German top managers and their leadership effectiveness. But before, a brief overview of good leadership, according to Warren Bennis and Morhart/Jenewein, will be given.
Figure 1: How to Gain Followers by Bennis
Figure 2: Ideal Combination of Emotional Leadership and Rational Management by Morhart/Jenewein
Figure 3: Finding Out About Weaknesses Figure 4: More Freedom For Players
Figure 5: Team Shares Bonus Evenly
Abbildung in dieser Leseprobe nicht enthalten
In the scientific debate on business management topics, the relevance of leadership for corporate success is a central object of research. In this field, science has a long history and began its research in the beginning of the 20th century. Since then, scientists have promoted the understanding of leadership processes to a significant degree and further on have tried to stimulate companies to rethink management practices. During this period, several approaches have emerged - ranging from structure-functionalistic and personality-related to behavioral-scientific and transactional dispositions. Regardless of which perspective, in a number of studies leadership is expressed as having a great impact on corporate success.
The majority of companies knows how important good leadership is - it holds it all together and is a make or break function - and every stakeholder fears the negative effects of management organizations that lack effective managers. Companies are in serious trouble if they are not able to develop promising young professionals or recruit competent managers. Rarely is it the case that companies underestimate the significance of a good leadership culture within their personnel policy.
Unfortunately, even top managers with impressive track records are not always aware of their mistakes in management decisions and its consequences on the employee´s motivation, commitment and performance. If they were, they would act differently. At the same time, many companies and managers want to improve their leadership processes and methods, and therefore seek external support. In Germany, about 84.000 management consultants work in some 13.2000 personnel and management consulting companies.1 Those numbers show that the demand for management and leadership specialists remains high. On top of this, approximately 5.000 coaches are hired to work exclusively with managers.2
In this process, science as well as practice is seeking the essence of good leadership - what it stands for, which foundation it needs and how it is performed. Against this backdrop, this paper deals with leadership from a scientific and practical view. Chapter 2 analyzes the philosophy of powerful executives on leadership and afterwards leads through the development of science in the field of leadership. In chapter 3 the focus is exclusively on classical leadership theories. On this basis, chapter 4 will illustrate what good leadership is about. In chapter 5 I will apply the classical leadership theories and the understanding of executives of good leadership exemplarily to Thomas Middelhoff and Martin Winterkorn, two top managers, who currently enjoy completely different appreciation in public. As a result their leadership performance is supposed to be carved out.
In this chapter I will establish the basis for the further scientific examination of leadership that highlights in the reflection of leadership performances of managers. Therefore, I will describe fundamental aspects of the scientific debate on leadership after I have analyzed leadership from the perspective of business personalities.
Who, if not proven managers, knows what leadership is about. They can draw upon many years of leadership experience - being in charge of several hundred thousand people during their careers. During this time, they enjoyed the feeling of guiding their employees to success, enhancing their performances and developing their personalities. Though, it would be presumptuous to believe that these managers never came short. More than once during their careers, they have failed to create reasonable conditions and encourage their employees as they should. They have made numerous decisions and learned through the good and the bad what leadership is about. These managers are the ones whose thoughts on leadership I want to capture and thus ultimately define leadership.
In Jack Welch and the GE Way the long-time CEO of General Electrics Jack Welch reveals his thoughts on leadership. He emphasizes the importance that managers create opportunities and come up with solutions. In his view, most managers “overmanage” and create unnecessary bureaucracy, which kills business.3 He shows no sympathy for those, who administrate, control and complicate rather than facilitate, simplify and accelerate.4 According to Jack Welch, managers are leaders, who have the task to:
“ find great ideas, exaggerate them, and spread them like hell around business with the speed of light ” and “ put the best people on the biggest opportunities, [ … ] allocate resources and get out of the way. ”5.
In other words leadership is about giving employees directions and establishing a sufficient basis for their successful work.
James McNerney, CEO of Boing, underlines the need of managers to be role models - who embody good values - for their employees.6 In this sense, leadership is also about setting an example and imparting values to employees.
As psychology teaches us, people not always act rationally. Referring to the business world, managers cannot solely rely on substantial arguments to get the best out of employees; they also have to be capable of inspiring their employees. Especially during a company crisis, managers need to be able to spark hope and provide confidence in the organization. But also the challenges of daily tasks require the employee´s full commitment and professionalism - here again, a vocal and motivating leader can be the difference maker. Paul Pressler, former CEO of Gap, Inc. gets to the heart of the matter explaining how good leadership distinguishes itself from bad leadership:
“ Great leaders communicate well and create a compelling vision that wins the hearts and minds of people. ”.7
Against this backdrop, leadership also contains an emotional aspect.
However, Max DePree, the former CEO of Herman Miller, Inc. calls attention to a category, which has not been mentioned yet - knowledge. From his point of view,
“ Leadership is an art, something to be learned over time, not simply by reading books. Leadership is more tribal than scientific, more a weaving of relationships than an amassing of information ” .8
The perspective of Max DePree also dissociates from the idea that leadership qualities are genetically attached to a person. Instead, he believes that people gain leadership skills. Over the years, they add knowledge of e.g. their organization and employees, working environment and workflows, which helps them to make better management decisions, direct the activities of their employees more effectively and ultimately become better leaders. In this regard, leadership is also about experience.
According to these top managers, leadership is a complex collection of high requirements. It would be easy to string together their comments on leadership and create a definition. But this is not appropriate and even less expedient, considering the following background: As we closely observe the business world, we have reasonable doubts that there is a guarantee for leadership success. There is no such thing as a perfect leadership, as leadership is exposed to the inevitability to prove itself again and again in day-to-day business. Many times we have seen that managers are quickly praised and just as fast as they rise they are condemned and disappear into oblivion. For this reason, companies and managers continue to search for a remedy for successful leadership. It is extremely doubtful that something like a master plan for successful leadership actually exists and the fact that the business world has not found a solution yet is a further proof. In this regard, the business world hopes to improve with the help of scientific knowledge. Although leadership science does not deliver a patent remedy, it can provide the business world with important knowledge and contribute to a better understanding of leadership as a complex process in organizations. In this context, I want to extend the perspective of leadership - which I have only drawn up so far from a practical point of view - by the scientific dimension, in order to achieve a more complete picture.
Leadership is a phenomenon which exists since the very beginning of civilization and in all cultures.9 As soon as a group of people comes together to work on a problem, there is a need for coordination.10 Lead, be led, allow yourself to be led and leading yourself, is a consequence of division of labor. The approach of the leadership phenomenon in terms of a desired idea of leadership in groups and organizations has yielded a large number of management science, leadership concepts, leadership systems and principals. The term “leadership” contains complex and ambiguous concepts. Its meaning reaches from religion, politics and military to economy, school and family.
There is hardly any other term as regard the content, which is used as diverse as leadership.11 Solely in science, numerous disciplines deal with leadership. The sociological analysis of leadership started at the beginning of the 20th century.12 Since then, not only sociology but also anthropology, psychology, political science and business administration et al. brought forth explanations.13 Among the interdisciplinary approaches, “leadership” by J. M. Burns in 1978 has been quite influential.14 Especially in the field of business administration, organizational psychology and sociology leadership science is becoming more and more multidisciplinary and integrative. Also, in the course of time important influencing factors on leadership actions in organizations were evaluated and as a consequence the insight of the complexity and dynamic of the leadership process15 has taken an extended view.16
In business administration, for example, issues concerning leadership are assigned to human resource management. Human resource management as part of the total management includes a number of sub-functions. One of the main areas within human resource management is personnel management.17 Personnel management deals with technical-organizational aspects18 as well as with social, interpersonal behavior and relations or more specific with management of human resources.19 The latter is what managers are seeking to perfect or at least to improve. The unique nature of leadership, differing from other operational variables, is that human performance is a productive factor and at the same time it cannot be considered detached from the performing person. Therefore, personnel management is a complex field. On the one hand leadership follows the interests and objectives of a company; on the other hand it has to consider the individual expectations and perceptions of the employees, who are led.
In summary, you can say that from a scientific perspective, personnel management intends to influence behavior with interpersonal communication and can be viewed as mediatory function between corporate goals and employee goals.20 This transcription shows clearly that personnel management is both, a means of functional, targetorientated design of relations21 and a process of exercise of power.22
As it has been pointed out, leadership can be viewed from different perspectives. From the angle of superiors leadership stands for responsibility and power as well as pressure and little room for maneuver. Taking the perspective of subordinates, leadership can be experienced as positive appreciation and reward of good performances but also can be felt as limitation of their autonomy when being instructed, criticized or sanctioned.23
In the everyday life of an enterprise, problems have to be solved permanently, differing interests have to be coordinated and cooperation has to be organized. From the organizational psychology and sociology, we know that leadership appears wherever people have to solve solutions as a team. In these cases, leadership is to be understood as the control of multi-personal problem solving.24 Scientists emphasize that there are no patent remedies for leadership. Who would disagree as we all have experienced on some occasions how difficult it is to impose our will on any other. With one person a certain method might be effective, while the same method fails with another. Or a method might work out with a group the first time, but fail the second time.
While everybody has his personal opinion and experience concerning “good leadership”, the various sciences that concentrate on leadership try to understand and systematically describe management processes, managerial functions as well as results of leadership actions. By doing so, they hope to have a better understanding of leadership and as a consequence, give advice to the practice on how to develop better leadership and make it more powerful. Therefore, in chapter 3 I will narrow down the broad scientific perspective to the different leadership theories.
While discussing “good leadership ” on a scientific level it has to be clear what is meant by “good leadership” , or better yet how it is defined. Therefore, it only makes sense to reflect on a company’s or top manager’s leadership, when the standards and assessment criteria are set in advance. In this context, I will introduce classic leadership theories to set the foundation for the discussion of good leadership in the further course of this paper.
One of the most historical approaches to explain the success and failure of leadership is to make the personality of a leader responsible for the outcome. More precisely, the individual traits of a manager determine his success. Therefore, the empirical study solely concentrates on critical characteristics on the basis of trait theories25, in which “the assessment of personality is made by the position it occupies on a number of scales each of which represents a trait, for example, intelligence [ … ], emotional sensitivity, etc”26 Transferred to our topic leadership the question is: Which characteristics distinguish successful managers from unsuccessful managers? For this purpose, many studies were conducted in the last decades. Evaluations of these studies have identified between 79 and 500 relevant traits of leaders27, of which only few have been mentioned in the majority of these studies.28 Frequently mentioned, were characteristics like energy, endurance, self-confidence, intelligence, determination, knowledge of human nature and eloquence.29 The problem of these features is that they are very difficult to operationalize. Reviewing the value of trait approaches in terms of the identification and development of successful managers, it has to be said that they do not provide useful scientific solutions. On the one hand, their results are not scientifically verified and on the other hand, it can be argued that specific traits of leaders support efficient work, but various other aspects (e.g. the setting) are also relevant and have to be considered.30
1 Cf. Bundesverband Deutscher Unternehmensberater BDU e.V. (2010), p. 1.
2 By far the most widely used form of coaching in Germany is the individual coaching of top managers, cf. Rauen (2001), p. 23; Böning (2005), p. 30.; cf. Lutz (2008), available under: http://www.handelsblatt.com/unternehmen/management/strategie/sparringspartner-fuer- manager/2939458.html, assessed 25th of January 2011
3 Cf. Slater (1998), p. 17.
4 Cf. ibid., p. 28.
5 Slater (1999), p. 31.
6 Fortune (2006), available under: http://money.cnn.com/2006/10/16/magazines/fortune/Secrets_ greatness_ McNerney_Boeing.fortune/index.htm, assessed 29th of January 2011.
7 The Brown and White (2010), available under: http://media.www.thebrownandwhite.com/media/ storage/paper1233/news/2010/ 02/12/News/Former.Gap.Ceo.Discusses.Leadership.Styles-3869178. shtml, 29th of January 2011.
8 Max DePree Center for Leadership (2011), available under: http://www.depree.org/html/publications _mdp_ leadershipisanart. Html, assessed 29th of January 2011.
9 Bass/Bass (2008), p. 3.
10 Cf. Hentze/Graf/Kammel et al. (2005), p. 1.
11 Cf. Berthel (1997), p. 7.
12 Cf. Hentze/Graf/Kammel et al. (2005), p. 1.
13 Cf. Herbig (2005), p. 16.
14 Cf. Hentze/Graf/Kammel et al. (2005), p. 1.
15 In the further course of this paper management process is used as term instead of leadership process because it is the more common expression.
16 Cf. Staehle (1994), pp.791.
17 This paper understands personnel management as concrete actions in the context of leadership, while human resource management represents a function (just as sales or production) within the enterprise.
18 Cf. Staehle (1994), p. 641.
19 Cf. ibid., p. 736.
20 Cf. Barthscher/Gaugler (1995), p. 189.
21 Cf. Herbig (2005), p. 17.
22 Cf. Weber (1922), pp. 122.
23 Cf. Herbig (2005), p. 18.
24 Cf. Herbig (2005), p. 18.
25 The trait theory was first conceived by Gordon Allport, who examined the number of trait-related words in the dictionary and characters from world literature in order to describe and predict individual behaviour, cf. Melucci (2010), p. 312.
26 Banerjee (1994), p. 286.
27 Cf. Stogdill (1948), pp. 58.
28 Cf. Berthel (1997), p. 76; cf. Herbig (2005), p. 35.
29 Ibid, p. 76.
30 Cf. Staehle (1994), p. 313, cf. Berthel (1997), p. 77.
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