Digital Leadership Requirements for Modern Managers

Table of contents

List of abbreviations

1 Introduction

2 Leadership
2.1 Definition and meaning
2.2 Management tasks
2.3 Definition of terms: Management versus Leadership
2.4 Traditional leadership approaches
2.5 New Leadership Approach

3 Current challenges for leadership and executives
3.1 Megatrend Digitalization
3.2 Effects of digitalization on the world of work and leadership

4 Digital Leadership
4.1 Definition and meaning
4.2 New requirements for leadership and executives
4.3 Selected Digital Leadership Approache
4.4 Relevance of Digital Leadership
4.5 Competences of a digital leader
4.6 Critical look at the digital leadership approach in the context of digitization

5 Conclusion and Outlook

Bibliography

List of abbreviations

CDO Chief Digital Officer

FK Executive/Executives

colleague:

VUCA Volatility, Uncertainty, Complexity, Ambiguity

1 Introduction

Until now, people were used to writing their shopping list on a piece of paper by hand. Nowadays, for much of society, this works through a shopping list app. It could even come to the point at some point that you network with family members in order to organize the necessary purchases as time-saving as possible. In addition, the app could be networked with the refrigerator at home and send a direct notification when food is used up or which foods are still available. In addition, the app could show in which store the needed food is available. In addition, the refrigerator could use the app to provide suggestions as to which dish could be prepared from the existing food. This example illustrates the digital revolution that we are currently experiencing and that is affecting all areas of life. (cf. Moskaliuk 2017a). It is fundamentally changing our society. A (working) everyday life without computers, Internet, smartphones and tablets can no longer be imagined (cf. Becker and Knop 2015a, p.155). Our work is becoming increasingly virtual, faster and more flexible. Keywords such as robotics, 3D printing and artificial intelligence give an idea of how the working world of tomorrow will be structured (cf. Crummenerl and Kemmer 2015). The digital transformation of the economy and society also includes starting points such as digital work platforms, editable large amounts of data and self-referential control systems. Companies are confronted with a paradigmatic change. Business models, self-image and value chains must be fundamentally reconsidered. Everyday work is determined by innovative digital, networked and automated processes and services – in all areas of work, whether development, production, sales or marketing and logistics (cf. Deutsche Gesellschaft für Personalführung e. V. 2015, p. 4).

A decisive aspect that plays a major role in all areas of the working world is corporate management and the management of employees (MA). In the corporate world, this is often referred to as "leadership". Digitalization is increasingly changing the understanding of leadership. In the context of digitalization, leadership is no longer understood as a matter for (IT) managers, but as a core topic for executives (FK) in top management (cf. Weinman 2015, p.13). In this context, the concept of digital leadership developed, which is the focus of my bachelor thesis.

FK are still regarded as a linchpin in change processes in the company and thus also in the digital transformation of the company. They are not only regarded as the initiator of change, but are also largely responsible for ensuring that cooperation works in the digital world. In order to be competitive as a company in the long term and to be able to assert itself on the market, one should not miss the connection to the trend of digitization. (cf. Crummenerl and Kemmer 2015, p. 3). Gary Hamel also expresses this need to adapt to the future and thus to digitization:

"The future easily makes fools of the unteachable who cling to old certainties for too long." (Gary Hamel in Petry 2016, p. 11)

The aim of the work is to delineate the term "digital leadership" in addition to the explanation of the term "leadership" and the definition of "leadership" and "management". The aim is to work out the changed challenges and requirements for leadership and FK in the digital age in order to ultimately derive the competencies for a successful digital leadership figure.

In the first part of the bachelor thesis, after a thematic introduction with regard to the problem resulting from digitization and the relevance in the context of leadership, the topic of leadership is first addressed. In addition to an explanation of the concept of leadership, leadership tasks and basic leadership approaches that have changed over time are examined.

The second part deals with new challenges for leadership in today's world. The megatrend of digitization will first be addressed with a definition. Afterwards, the characteristics and drivers of digitization are explained. Subsequently, the effects of digitization on the world of work and leadership are described, which is transferred to the term "digital leadership", the core topic of the work. In this context, it is first explained what is behind the term. This is followed by an overview of the changes in the management environment and of new requirements for leadership and FK. Selected leadership approaches are also discussed in the context of digital leadership. The success-relevant competencies of a digital leader are then analyzed. Finally, there will be a critical appreciation of the digital leadership approach. The work concludes with a summary and a conclusion.

2 Leadership

2.1 Definition and meaning

Leadership can be, according to Hinterhuber and Krauthammer (2015), divided into three pillars:
1. Be visionary: "Spurring on the will to win"
2. Be a role model – set an example: "Show commitment and courage. Unleashing energy and promoting innovation and talent."
3. Sustainably increase the value of the company: "Creating prosperity for all partners" (Hinterhuber and Krauthammer 2015, p. 11).

There are countless definitions of the term "leadership", which translates into German to mean leadership or leadership. Sometimes this is due to the fact that various areas, such as philosophy, economics and psychology.B deal with leadership. (cf. Au 2016, p. 4). Based on agitation (2005) leadership in the general sense can be used as "Overarching temporal, existing and interdisciplinary construct in all cultures" (Hentze 2005, p. 25) indicate. In this context, leadership is also often referred to as "Goal-oriented influence" (Rosenstiel et al. 2014, p. 3) defined. The aim is to get the leaders to achieve goals that can often be traced back to those of the organization. (cf. Rosenstiel et al. 2014).

Similarly, Wunderer describes leadership as "Goal-oriented, mutual influence to fulfill common tasks, in and with a structured work situation." This includes in the first place: "Pointing ways, shaping the decision-making and relationship levels, promoting favorable work situations and interpreting them constructively." This also includes: "Influence and be influenced, communicate, convince each other, inspire, also decide, instruct and handle conflicts." (Wunderer 1996, p. 386)

Leadership also means the "Natural and spontaneous ability to inspire, inspire and empower employees to unlock and implement new opportunities, as well as volunteer and enthusiastically for the realization of common goals." (Hinterhuber and Krauthammer 2015, p. 13)

In order to achieve this, respect for people and the great energy of the company or the top FK are indispensable. Leadership behavior combines interest in the MA and for oneself. FK exempted visions and strategies. The authority and credibility of the FK depends on the extent to which the MA accept the visions, strategies and attitudes of their superiors. One of the most important foundations of leadership are ideals and values, as well as the use of FK, which goes beyond the personal area (cf. Hinterhuber and Krauthammer 2015, 13 f.).

According to Hinterhuber and Krauthammer, the core of leadership is
1. "To build a common view of the present and future with managers and employees that focuses on customer benefit and
2. to give everyone leeway for independent thinking and acting on the basis of a vision that everyone is willing to work on fulfilling." (Hinterhuber and Krauthammer 2015, p. 14)

The cooperation between FK and MA aims on the one hand to develop results, but on the other hand also to create individual meaning and convey meaning. Achieving the goals is associated with the fact that the participants understand why they do certain things, how they can contribute to it as an individual person and what added value is associated with it. It is therefore the task of the FK to create framework conditions that show the MA the importance of their actions. The classical understanding of leadership has so far only included the approach of achieving goals. Only in the newer approaches of transformational leadership was the aspect of creating meaning taken up (cf. Landes and Steiner 2013, p. 249).

Although the definitions differ from each other in some respects, aspects can be worked out that are common to all definitions: Leadership is about influencing the MA in a targeted manner, showing them the right way with a vision that has been exemplified in a meaningful way and also leaving them a large part of personal responsibility in order to ultimately achieve the goals of the organization together.

In conclusion, leadership is a complex, dynamic and reciprocal process, the exact recording and explanation of which is only possible to a limited extent. (cf. Wunderer 1996, p. 386).

2.2 Management tasks

"If you want to lead, you first have to set a direction that makes sense and appeals to the reason and heart of the employees. Secondly, it has a role model function and must live and exemplify the values of the institution. The third leadership responsibility is to create value [...] Anyone who does not fulfill even one of these three responsibilities does not fulfill his leadership task." (Hinterhuber 2014, p. 7)

The description of the various management tasks is based on Hintz (Hintz 2016)¹. According to Hintz, two of the most important tasks of a FK are decision-making and will enforcement, which interact with each other. These work together with the tasks of planning, decision-making, execution and control, which in turn build on each other. This is followed by the documentation of the previous activities and the dissemination of information about the activities. Problem identification and resolution determine the daily management process. As a FK, it strives to ensure the profitability of the company, to achieve qualitative and quantitative growth and to ensure the existence of the company. The future viability of a company depends on the extent to which FK know how to deal with constantly changing problems (cf. Hintz 2016, p. 30). Their tasks can be divided into three core areas: Organization, employees and work processes (cf. Hintz 2016, p. 31)

Hintz describes the management tasks, due to their periodic sequence, also in the form of a regular cycle. This is shown on the following page. The core task that runs through the entire management cycle is communication. A FK should know how to communicate effectively with MA or customers in certain situations. A prerequisite for successful communication is knowledge of their various mechanisms of action and how they can be used in a targeted manner. Communication can thus be named as one of the most important factors for successful leadership (cf. Hintz 2016, p. 32).

Abbildung in dieser Leseprobe nicht enthalten

Figure 1 Leadership tasks in the management cycle

(Hintz 2016, p. 32)

1. Developing goals

Goal formation is one of the most important steps in both private and working life before starting a project. Without clearly formulated goals, one should not start work. Therefore, goal formation can be mentioned as one of the most important management tasks. The objectives are discussed with the MA and the FK ensures that the MA strives to achieve them. When agreeing on objectives, it is important to consider certain aspects: The objective must be formulated clearly, unambiguously and in writing. The success of the project depends on the clarity of the goal. The objectives of the MA must coincide with the objectives of the company. If this is not the case, this may have a negative effect on the success of the company and on the cooperation, as the goal is always reflected in the behavior of a person. In addition, it is important that the FK always acts as a role model and lives with conviction what it expects from its MA. Tolerance, open behavior and acceptance between MA and FK are important aspects in order to achieve a mutual learning process. FK are confronted with different options for action on a daily basis. It is important that a precise objective has been formulated, because this makes it easier for the FK to choose the right options. In addition, through deliberate objectives at the beginning of a project, developments and successes that arise over time can be made objectively measurable. (cf. Hintz 2016, p.35 f.).

2. Plan

The aim is to develop strategies and work out measures with which the previously defined goals can be achieved in the shortest possible time. The effort required to achieve this should be proportionate to the objectives (cf. Hintz 2016, p. 65).

3. Delegate

Sub-goals, subtasks and the required competencies are passed on by the FK to the MA qualified for this purpose. The FK are relieved and the motivation, self-esteem and motivation of the MA increase. Thus, the FK can concentrate more specifically on their essential tasks and thus achieve better work results together with the MA. The FK retains responsibility for the delegated tasks. Therefore, it is important to ensure through regular review and assistance that the progress of the processing with possible deviations always remains transparent and thus the delegation is successful. (cf. Hintz 2016, p.77 f.).

4. Developing and promoting

This management task includes always supporting and accompanying the MA at work. In addition, the FK reaffirm and promote teamwork. It is the task of the leaders to ensure that the MA receives all the necessary information about their activities without delay. (cf. Hintz 2016, p. 32).

5. Check

FK make control appointments with the MA to check the previous work steps. A regular target-actual comparison is indispensable. In this case, e.g. Planning errors, wrong decisions, misconduct or general deviations from the achievement of goals are detected and, if necessary, corrective measures agreed. Some associate the word "control" with something negative. However, the control of the work steps is essential, as this gives the MA orientation and the opportunity to develop further. Without control, it would not be possible to determine who has done outstanding work, or who can be helped by constructive criticism. (cf. Hintz 2016, p.33 f., p.117).

6. Praise

Praising the MA is also one of the most important management tasks. Praise is used as a means to encourage ma in their behavior and increase their self-esteem. FK, who rarely or never praise, will find dissatisfied MA in their team. The MA lose motivation and self-confidence if they don't get recognition for what they do. The MA's drive to act only arises through social acceptance. Therefore, it is important that FK regularly praise their MA. Praise also serves as a guide for the MA and at the same time it ensures that behaviors that are required by FK are reinforced. In order for praise to have its intended effect, there are many points in the exercise that FK must consider. However, these are not to be listed in more detail in this work. (cf. Hintz 2016, p.123 f.).

7. Criticize

Criticism is a way to demand and agree on corrections regarding the behavior of the MA. Criticism can have a positive orientation in the form of praise or a negative orientation in the form of blame. In addition, a distinction is made between constructive criticism, which usually leads to the improvement of the MA, and destructive criticism, which can lead to a backward development of the MA. Criticism as a task of the FK is there to help each other, because you usually do not see your own mistakes as well as others see them. As with praise, it is also important to consider some aspects when criticizing so that the desired effect occurs. (cf. Hintz 2016, p.33, p.129 f.).

8. Edit Conflicts

To ensure that conflicts have no influence on the work results and the working atmosphere, it is one of the tasks of the FK to recognize them in good time and to deal with them. How to deal with conflicts is the crucial point. With a constructive conflict resolution, not only problems can be solved, but often also completely new perspectives can arise and values can be changed in a positive sense. (cf. Hintz 2016, p.33, p.145).

9. Motivate

According to Dwight D. Eisenhower, motivation can be described as follows: "Motivation is the ability to get a person to do what you want, when you want it and how you want it – because they want it themselves." (Wacha 2016) Maintaining or increasing the motivation of the MA and at the same time keeping the demotivating away is considered one of the most important tasks of FK. If the MA work motivated, the performance of the company is increased and the jointly set goals are achieved faster. Therefore, the ability to motivate MA is one of FK's most sought-after qualifications. (cf. Hintz 2016, p. 33)

2.3 Definition of terms: Management versus Leadership

The definition of the terms "management" and "leadership" is based on the model of John P. Kotter (Kotter 1990)². The word "leadership" is interpreted in two different ways in economic contexts. On the one hand, it means the process of mobilizing and directing people. One then says, for example.B., that someone has the leadership role. On the other hand, leadership describes a group of people in certain positions. In this context, one speaks of the management area of a company in which a certain number of MA are employed. Nowadays, those who hold a leadership position are most often called managers. From this one could mistakenly conclude that leadership and management have the same meaning. However, according to Kotter, this is a fallacy. While leadership has always existed, management has only evolved in the last hundred years in response to the emergence of complex companies. (cf. Kotter 1991, p. 17). Management was created, "to keep complicated companies under control in terms of time and money. That was and is their most important function." (Kotter 1991, p. 19) Leadership, on the other hand, does not provide strength and order like management, but movement. Changes are initiated, people are motivated to make changes and are inspired to exercise (cf. Kotter 1991, p. 19).

According to Kotter, management and leadership in complex organizations also have similarities: "Both require decisions about what needs to be done, create networks of employees and relationships [...] and then make an effort to ensure that the work is then done. In this sense, both are self-contained systems of action." (Kotter 1991, p. 20) Despite some similarities, there are fundamental differences between leadership and management. This is especially true for very large corporations and organizations. These will be explained below as an example based on Kotter (cf. Kotter 1991, p. 20).

A distinction is made between four phases of a project or a project:

In the case of the Development of the timetable the management is responsible for the general financial planning and for defining individual steps, tasks and goals, while leadership - through the development of a vision and strategy - sets the direction (first phase).

The next step is the Development of a human network to realize plan specifications. Here, management and leadership differ in that management defines the organizational structure, establishes work areas, deploys qualified MA, delegates responsibility, and introduces monitoring mechanisms, whereas leadership aligns ma. It announces the direction for all parties involved to build groups with an understanding of the vision and the achievement of the goals (second phase).

At the actual performance of the project, the management is assigned the audit and problem solving. This includes carrying out target-actual comparisons, detecting deviations and finding solutions to problems. Leadership figures, so-called "leaders", on the other hand, motivate and inspire the MA in this step. They ensure that the MA progress on their way and help them to overcome hurdles (third phase).

Related to the Results of the project, the management ensures a "certain predictability and order". (Kotter 1991, p. 21) Leadership creates movement and change and can enable significant change (fourth phase) (cf. Kotter 1991, p. 21).

Kotter identifies three core processes for management and leadership. In summary, these illustrate the fundamental difference between the two terms:

Management.

Plan and budget

Organize and fill positions

Controlling and solving problems

Result: creates order and constancy

Leadership:

Set direction

Align employees accordingly

Motivate and inspire

Result: creates change and movement." (Kotter 1990, p. 4 f.)

Managers and leaders have different skills. Rarely does a person possess both skills that make a good manager and those that characterize a good leader at the same time. According to a study led by Kotter, two-thirds of 200 managers surveyed in companies stated that the superiors in their company have strong managerial skills, but only low leadership skills. 95% of respondents felt that there are too few leaders who have both managerial and leader qualities (cf. Kotter 1990, p.8 f.).

As early as 1990, Kotter emphasized that leadership would become increasingly important in the future and that leadership skills would be an important prerequisite for the existence and growth of companies. He justified this, among other things, by the rapid technological developments and advances, demographic change and growing international competition. Continuous change requires more and more leadership (cf. Kotter 1990, p.12 f.).

These statements are even more accurate today in the 21st century, as the world of work is currently undergoing a revolutionary digital transformation in which the topic of leadership, as well as the change of it, play a very important role.

2.4 Traditional leadership approaches

Leadership theories describe structures, framework conditions, processes and consequences of leadership. They also try to illustrate the conditions from which leadership arises and how the FK can influence the MA to perform certain tasks. Leadership research has studied or produced many theories of leadership, so that in 1980 there were already 30-40 different leadership theories. The management approaches are not replaced by each other. They all exist side by side. Until about the mid-1970s, three leadership approaches dominated: person-centered approaches, behavior-oriented approaches and situational theoretical approaches. In the following chapter, these classical leadership approaches will be presented in more detail in their historical order. (Rieder 2014, 3f.).

2.4.1 Person-centered approaches

The person-centered leadership approaches are considered historically oldest approaches (cf. Peters 2015, p. 20). The two best known of these are the property-oriented approach and the "Great Man Theory".

Property theory is based on the assumption that leadership success depends on selected stable, individual characteristics of the leader (cf. Kauffeld 2011, p. 70). A person's traits include personality, talent, needs, motives, and values (Hentze 2005, p. 101). A successful FK influences the actions of its MA with its certain characteristics (cf. Au 2016, p. 8). The aim of the approach is to work out the individual personality traits that are closely related to leadership success. (cf. Kauffeld 2011, p. 70). Between 1900 and 1950, people began to consider ideal leadership qualities. Numerous studies have been carried out and finally certain characteristics have been identified that can be called characteristics of a successful FK: A sense of responsibility, perseverance, creativity, as well as self-confidence, influence and stress resistance. In the period that followed, between 1950 and 1970, the focus was more on combination traits that were intended to guarantee leadership success: Communicative and interpersonal skills, stress tolerance, tolerance for uncertainty and interest in career advancement (cf. Peters 2015, p. 21).

The "Great Man Theory" focuses on the personality of the leader (cf. Rieder 2014, p. 5) and is based, according to Thomas Carlyle (1888), on the following statement: "The ability to lead, whether innate or acquired, is a relatively stable, time- and situation-independent personality disposition." (Kauffeld 2011, p. 73)

Traditional approaches like these focus on the leader. Thus, the relationship between the leader and the led is of little importance. (cf. Au 2016, p. 8). Both theories assume that the most important qualities and aspects to lead successfully are innate (cf. Rieder 2014, p. 6). However, there was also criticism of the person-centered approaches. Among other things, the lack of consideration of the situation, theoretical deficits and the ignorance of the interdependence of character traits in the leadership process were criticized. (cf. Hentze 2005, p. 179 quoted from Neuberger 2002, p. 237 ff.).

2.4.2 Preservation-oriented approaches

It turned out over time that leadership success could not, as hoped, be measured solely by the characteristics of a person. (cf. Blessin and Wick 2016, p. 87). The person-centered approaches were convinced that productivity and the success of companies depend for the most part on the leader. From the 30s of the 20th century, leadership theories developed in which the focus was on the behavior of the leader in certain situations and no longer solely on the person or the characteristics of him. In the so-called behavior-oriented approaches, the assumption was that leadership success depends predominantly on the behavior of the FK (cf. Rieder 2014, p. 7f.).

In contrast to the person-centered approaches, the guided and the relationship between the guided and leading also played a role here. The focus was on which activities the FK carry out during their work and which of them can be classified as effective leadership behaviour. (cf. Landes and Steiner 2013, p.251 f.).

The behavioral approach was viewed optimistically, as it was hoped that it would go hand in hand with the learning and changeability of leadership. (cf. Kauffeld 2011, p. 71).

In the so-called Ohio studies, which have been confirmed to date, it was examined what success-relevant leadership behavior looks like in concrete terms. It was first described in two dimensions: Employee orientation (consideration) and task orientation (initiation structure) (cf. Landes and Steiner 2013, p. 251 f.). Employee-oriented leadership means that the FK recognize the MA and respond to the personal needs and goals of them. In task-oriented management, the task itself and the completion of the activities are in the foreground, while the personal concerns of the MA are put behind (cf. Peters 2015, p.22 f.).

In addition to the two dimensions of successful leadership mentioned so far, global change has led to the development of strategy and development orientation as a third dimension. It was found that strategy- and development-oriented behavior has a positive influence on leadership success. These included aspects such as developing visions and strategies, strengthening commitment to change, promoting flexibility and willingness to innovate, and accompanying effective learning. However, the behavior-oriented approaches were criticized for the fact that even with the three dimensions of successful leadership, the question remained open as to when which behavior is relevant. In order to answer this question, the situational theoretical leadership approaches were developed, which are presented in the following chapter (cf. Landes and Steiner 2013, p. 252).

2.4.3 Situation-theoretical approaches

In the situation theories, the focus was not on the ideal leadership qualities, but on the respective leadership situation. Every situation brings with it different requirements. The challenge for THE FK was to recognize the requirements and to choose the right behavior for each situation in order to achieve leadership success. (cf. Peters 2015, p. 23). Leadership is thus situation-dependent and the person who finds the best solution for the task or the best way to deal with the situation is successful. Conversely, this also means that the FK can adapt to the respective situation and apply the most suitable leadership style. (cf. Pinnow 2012, p. 146). Consequently, the situation sets the "right" leadership style. Therefore, there are a variety of different approaches that interpret leadership situations in different ways. (cf. Peters 2015, p. 23). The following is a presentation of two selected approaches to situation theory:

the Contingency approach von Fiedler (1967) is one of the first and most discussed approaches to situation theory. It is based on the assumption that leadership success is largely dependent on the motivation of the leader as well as on organizational situational constellations. (cf. Rieder 2014, p. 155). Fiedler investigated the interaction of the leadership style variables "employee and task orientation" with the situation variables "task structure, relationship between FK and MA and position power". Fiedler describes the leadership style variables as stable orientations of the FK. The expression of the variables depends on how the FK describes the least recognized MA. The more positive the description, the higher the assumed employee orientation. The characteristics of the situation variables indicate how "favorable" a situation is. A favorable situation is characterized by well-structured management tasks, a close relationship between MA and FK and a strong position power of the FK. According to Fiedler, the greatest leadership success in medium-favorable situations is achieved through employee-oriented leadership. In unfavorable and very favorable situations, on the other hand, task-oriented leadership leads to success. Fiedler's theory of contingency was strongly criticized due to methodological shortcomings and partly a lack of theoretical foundation. Some authors even called the theory a "failure." (cf. Kauffeld 2011, p. 72).

Hersey and Blanchard developed in their "Maturity model of leadership" another situational component (cf. Landes and Steiner 2013, p. 253). They introduced a four-field model based on the two leadership style variables task and employee orientation. The model included the maturity level of the MA as another situational variable. This is measured by the aspects of motivation and competence. Depending on the level of motivation and competence, four different types of employees can be distinguished. For each of them, a different leadership behavior is recommended. A task-oriented leadership style is suitable for MA who are unmotivated and competent (low maturity), whereas for motivated and competent MA an employee-oriented leadership style is recommended (high maturity level) (cf. Kauffeld 2011, p. 76f.).

- Maturity level 1 ("low motivation and little competence") : "Telling" ("Instructing and Conducting")
- Maturity level 2 ("high motivation and little competence") : "Selling" ("Guiding and Training")
- Maturity level 3 ("low motivation and high competence") : "Participating"
- Maturity level 4 ("high motivation and high competence") : "Delegating" (Rieder 2014, p. 156).

The behaviour of the FK adapts to the maturity level of the MA and only changes when the MA develops further and thus assumes a different degree of maturity. Hersey and Blanchard's model criticizes the operationalization of the variable "maturity" on the one hand and the lack of empirical evidence on the other. It was also negatively stated that the measurement methods were too unreliable (cf. Kauffeld 2011, p. 73). The situation theories in general were also criticized: Due to the fact that countless situation features exist, they would be randomly selected by FK. In addition, the characteristics were often not determined with sufficient detail (cf. Rieder 2014, p. 157).

2.5 New Leadership Approach

In the course of global change, FK are confronted with increasingly demanding and changing requirements over time. In order to successfully master these challenges, new leadership approaches have been developed since the 1980s, which are summarized under the so-called "New Leadership Approach". The focus of the new leadership approaches is on understanding leadership in the context of a corporate environment that is characterized by crises and changes and in which FK must be able to deal with radical changes and defeats (cf. University of Leicester. 2010). In contrast to the traditional leadership approaches, which were characterized by an authoritarian power figure with sole decision-making rights, the new leadership approaches are increasingly about giving the subordinate MA more say in solving problems in the company. (cf. Haire). Compared to classical leadership theories, the new approaches also address emotional aspects (cf. Robbins 2001, p. 385).

Two of the best-known leadership theories of the "New Leadership Approach" are transactional and transformational leadership. The American political scientist Burns (1978) defined the two terms fundamentally for the first time. The concept of transactional and transformational leadership was first taken up by Bernard Bass in the field of politics. Bass transferred the concept to business in the 1980s and further developed the two leadership theories. (cf. Peters 2015, p. 52). Both approaches are presented in more detail in the following chapters.

2.5.1 Guided tour

"Transactional leadership refers to the exchange relationship between leader and follower to meet their own selfinterests." (Bass 2010, p. 10)

Transactional management is based on an exchange relationship between FK and MA. The behavior of the MA is guided by the transactional leader through conditional reward, goal agreement and feedback (cf. Kauffeld 2011, p. 74). The basic principle works as follows: If the FK gives the MA what it wants, then the FK gets in return what it expects (cf. Heuschele et al., p. 1). Through the exchange process, the MA learns what behavior he gets in return from the FK and how he can keep blame as low as possible. The recognition of desired behavior by the FK, e.B. through financial incentives, is intended to increase the motivation, performance and satisfaction of the MA. The prerequisite for this is that the connection between performance and reward for the MA becomes clear and that the ratio is right (cf. Kauffeld 2011, p. 74). This is e.B. given if it is a "win-win situation" for both parties or if both sides are not dissatisfied with the situation. The advantage of this leadership style is the clear action structure that is formed as a result. Therefore, the transactional approach is best suited for routine activities (cf. Heuschele et al., p. 1). According to Bass, the transactional leadership approaches include, in addition to the principle of conditional reward, the active and passive management by expectation. Active Management by Expectation means that the FK sets standards, carries out performance checks and, if necessary, intervenes to make corrections. In the passive approach, the FK intervenes only in exceptional cases (cf. Kauffeld 2011, p. 74 f.). Transactional leadership is based on extrinsic motivation. It results from a "Benefit-oriented exchange of performance and reward." (Peters 2015, p. 53)

2.5.2 Transformational leadership

"Transformational leadership elevates the follower's level of maturity and ideas as well as concerns for achievement, self actualization and the wellbeing of others, the organisation, and society." (Bass 2010, p. 11)

Transformational leadership is an extension of the transactional approach to include the component of intrinsic motivation (cf. Kauffeld 2011, p. 75). Over time, it turned out that not only rationality and efficiency are considered important factors for successful leadership, but also the emotions of the MA. These must be addressed in order to achieve good leadership. Transformational leadership appeals not only to the mind of the MA, but also to their emotions. For the FK, it is no longer enough to simply have problem-solving properties. Due to the rapid global change in values, it is the task of the FK to convey meaning to the MA, to promote creativity and ideas. The MA should develop enthusiasm and interest for the tasks attributed to them and for the results they achieve for the company (cf. Heuschele et al., p. 1).

"Leadership doesn't mean getting people to do things they don't want to do, but empowering people to achieve things they never thought they could achieve." (Heuschele et al., p. 1)

The drive and motivation of the MA are strengthened by granting them personal responsibility and at the same time the possibility of self-realization, e.B. in the form of co-determination. FK acts as a role model and is characterized by high social and emotional skills (cf. Daskalakis, p. 1).

A transformational leader not only tries to recognize the needs of the MA, but to raise them to a "higher level of maturity". It takes the motives, values and goals of the MA to a higher level (cf. Peters 2015, p. 55). The "engine of action" is no longer financial incentives or praise, as was the case with transactional leadership, but the possibility of self-realization and identification with the vision exemplified by the FK. If the FK succeeds in creating trust with the MA, in treating them with respect and appreciation, the MA are ready to perform beyond the previous level. (cf. Kauffeld 2011, p. 75).

Four basic strategies of transformational leadership can be established:

"Idealized influence (charisma): The FK shows conviction, emphasizes trust, positions itself even on critical issues and assumes ethical responsibility.

Inspiring motivation: The FK formulates attractive visions of the future, emphasizes the importance of upcoming tasks and is optimistic, committed and enthusiastic.

Intellectual stimulation: The FK supports its MA in taking a critical stance on the status quo and rewards new, creative solutions and inspirations.

Individualized attention: The FK takes into account the individual needs and abilities of its subordinates." (Kauffeld 2011, p. 75)

Compared to transactional leadership, the transformational approach has a positive effect on objective performance criteria. Satisfaction, trust and commitment of the MA increase. Work performance improves, which is reflected, for.B, in higher sales figures and higher customer satisfaction. According to Kauffeld (2001), transformational leadership is considered a success factor, especially in times of uncertainty and change. (cf. Kauffeld 2011, p. 75 f.).

The two management approaches mentioned above do not represent opposites, but are to be regarded as complementary components. FK can have both transactional and transformational approaches in their leadership. By supplementing the transactional style with transformational components, the MA achieves a higher motivation and thus an increase in performance. Only the interaction of both management styles leads to additional effects, which are expressed in better overall results. MA perform as expected, motivated by the reward they are promised. (Exchange principle of transactional leadership). If the FK confronts the MA with appropriate transformational behavior, they increase their own level of demand and are motivated to perform more. (cf. Peters 2015, p. 57 f.). Figure 2 shows the contents, consequences, and relationship between transactional and transformational leadership.

Abbildung in dieser Leseprobe nicht enthalten

Figure 2 Characteristics of transformational and transactional leadership

(Nerdinger et al. 2014, p.91)

3 Current challenges for leadership and executives

Everyday work and management in companies is characterized by continuous changes. Increasingly complex tasks require new team structures and a new understanding of leadership. Forms of leadership and tasks of the FK are changing. A different understanding of the role of leadership and modern leadership procedures are required for successful leadership. The image of companies is determined by digitization, agile working, new team structures and project work. Increasing international interdependence ensures that competition among companies is intensifying. In order to keep up, it is important for companies to take appropriate measures. FK acts as a driving force in change management. Cross-divisional communication and collaboration as well as the use of synergies in teams play a major role.

FK are responsible for the most important capital in the company, the MA or people. Hierarchies are becoming flatter and this results in a broader leadership span. FK need to restructure their tasks and use new management tools to ensure successful leadership. Communication, development and motivation are aspects that are becoming increasingly important for FK in order to bind the MA to the company (cf. Haufe Online Redaktion 2017c).

In recent decades, leadership theories have been based on targeted management of organizations. The agreement of goals and their measurability were decisive factors for the successful management of people and organizations. The concept of goal-oriented leadership is becoming less and less important. Circumstances under which objectives have been agreed may change on a daily basis. As a result, the agreed goals become irrelevant. The MA demand more freedom in their actions and do not want to cling to goals that no longer correspond to reality. Leadership is increasingly perceived as uncertain, which reduces the MA's trust in leadership.

Classical leadership approaches prove to be outdated after critical discussions, which creates a gap in leadership theory and practice. Therefore, the question arises as to how the management tasks should be accomplished in the future. So far, it has been the case that the FK have set a path and followed the MA because they had confidence in the FK that they know better than they do. Factors such as demographic change, globalization, individualization and, above all, digitization, which is the focus of my work, fundamentally change the previous image of leadership (cf. Gebhardt et al. 2015, p.4 f.).

Digitalization is replacing market factors as the most important drivers of change in companies. It is currently regarded as the most important transformation driver in companies in every industry (cf. Petry 2016, p. 21). By Cole (2017) The challenge for FK is to work between "A sense of tradition worthy of preservation and a clinging to beloved but long outdated processes and habits" differentiate to learn (Cole 2017, p. 15). FK must be open to new things, accept them and, above all, integrate them into the company's processes. The challenge here is the time factor. FK must hurry to integrate the changes in order to remain competitive, as the clocks tick according to "Moore's Law" in the digital age. Gordon Moore, founder of Intel, noted that the performance of digital systems doubles every 18 months. This results in exponential growth in digitization. For many FK, this change is going too fast and they have the feeling that they can't keep up. However, the speed of change cannot be influenced and new developments cannot be stopped (cf. Cole 2017, p.15 f.). This is countered by organizational and individual inertia. This is often found, especially in medium-sized and large companies. The challenge is to overcome this inertia, to develop digitally oriented, entrepreneurial visions, to rethink business models, as well as to boldly and optimistically tackle the change processes and to proactively shape them (cf. Kreutzer et al. 2017, p. 1).

The following figure concludes with this chapter the comparison of previous and future required organizational qualities. Various aspects that play a role in organizations, such as.B the market or the structure, are assigned to past and future characteristics. The existing mass market close to the location will change into global and volatile markets in the future and instead of hierarchical order, the structure in organizations will develop into a large network. (cf. Gebhardt et al. 2015, p. 34).

Abbildung in dieser Leseprobe nicht enthalten

Figure 3 Comparison of organizational qualities in the context of digitization

(Gebhardt et al. 2015, p.34)

3.1 Megatrend Digitalization

The understanding of leadership and FK in companies and organizations, as explained above, is subject to continuous change. It must be adapted again and again to changing framework conditions and new developments, similar to organizational structures and business models. One of the strongest drivers of these changes is the digitization of the economy (cf. Lorenz and Enke 2016, p. 8). Just as.B new technologies are changing society, digitization is also influencing the economy (cf. Crummenerl and Seebode Orsolya 2012, p. 2).

First of all, it is necessary to clarify what the term digitization actually means. By Thomas Hess (2016) from the Institute of Information Systems and New Media at the LMU in Munich, digitization can be interpreted in various ways. Technical interpretation is one of the most commonly used definitions. According to this, digitization refers to "On the one hand, the transfer of information from an analog to a digital form of storage and, on the other hand, [...] the transfer of tasks that were previously taken over by humans to the computer." (Hess 2016)

In addition to the technical interpretation of digitization, one can also distinguish between digitization in everyday life and digitization in the economy and society when explaining the term. The former means the digitization of a book or slide. The digitization of the economy and society, on the other hand, describes the way in which people change when the world around them is increasingly digitized and digital technology gradually replaces analog technology. Both interpretations have a strong connection. For example,.B if a book is digitized, it can be easily copied and thus the old way of making money with books is eliminated. At the same time, the digitization of a book means that knowledge can be distributed to society much more easily and quickly. (cf. Ebert).

Digitalization also means according to Axel Schröder "the increasing penetration of the economy and society with digital technologies [...]." "The behavior of individuals is changed by networking." (Schroeder)

Digitalization has a wide variety of characteristics. Artificial intelligence, big data, cloud computing, the Internet of Things and Industry 4.0 are five of the most important that are developing in connection with digitization. (cf. Shahd 2017). In addition to social developments, these are also regarded as drivers of digitization and will be briefly explained below.

1. Artificial intelligence

Artificial intelligence can be described as a branch of computer science, "which tries to recreate human approaches to problem solving on computers in order to achieve new or more efficient task solutions in this way". (Lämmel and Cleve 2012, p. 13) Artificial intelligence has become increasingly important in recent years. High computing capacities, the availability of enormous amounts of data and better algorithms have contributed to the fact that machines today have mature capabilities and digitization is thus making great progress. (cf. Klug 2017).

2. Big data

The "3V" definition describes very well what the term "big data" is fundamentally about. Big data are data volumes that firstly occur or are produced in very large quantities (volume), secondly are generated, elaborated and further processed at high speed (velocity) and thirdly have a wide variety of data types and sources (variety) (cf. Márquez and Lev 2016, p.91 f. cf. Salzig 2016). By obtaining new information, which must be available to a large number of users in the shortest possible time, economic successes are achieved with the help of enormous amounts of data from a wide variety of sources. (cf. Salzig 2016).

3. Cloud Computing

Cloud computing refers to the fact that abstractED IT infrastructures, such as data storage.B, computing capacity, programming environments and finished software, are made available via a network, whereby they are dynamically adapted to the respective needs. The dynamic adaptation is mainly achieved by bundling infrastructure services. The core of the cloud concept is the provision of services in a combination of virtualized data centers, the use of modern web technologies and a nationwide network infrastructure in industrialized countries. Human-machine interactions are no longer needed for on-the-fly deployment. (cf. Metzger et al. 2011, p. 11 f.). Cloud computing is regarded as the basis for successful digitization (cf. Schinko 2017).

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¹ In addition to Hintz's description of the management tasks in the management cycle, there are numerous explanations of management tasks from other authors. This work focuses on Hintz's presentation, as he explains the leadership tasks in the form of a leadership cycle very vividly.

² When differentiating the terms "management" and "leadership," most sources or authors refer to the distinction of John P. Kotter from 1990. Therefore, the term delimitation according to Kotter is also made in this work.