Modern Leadership in the Changing World. Challenges for Today's Businesses and Leadership Effectiveness

Hausarbeit, 2019

35 Seiten



1.1 Abstract
1.1.1 Aims:
1.2. Introduction
1.3 Research Framework
1.3.1 Hypothesis

2.1. Definition of Modern Leadership
2.2. Problems
2.3. Background of effective leaders
2.3.1. The correlation of Adaptive Leadership with job satisfaction
2.3.2. The correlation of Communicative Leadership with job satisfaction
2.3.3. The correlation of Participative Leadership with job satisfaction
2.4. Modern Theories
2.4.1. Transformational Leadership Transformation Leadership found in large corporations
2.4.2. Situational Leadership Situational Leadership found in large corporations
2.4.3 Limitation of transformational leadership and situational leadership

3.1 Research Design
3.2 Research methods
3.3 Instrumentation
3.4 Data collection
3.5 Ethical issues
3.6 Results
3.6.1 Descriptive Statistics
3.7 Methodological Limitations

4.1 Data Analysis
4.1.1 Skewness and Kurtosis Analyses & Percentage difference Comparison Analysis
4.2 Discussion

CHAPTER FIVE: Conclusion and Recommendations
5.1 Conclusion
5.2 Recommendations
5.2.1 Suggestions for future study.



List of Tables

Table 1. Gender of participants

Table 2. Age of participants

Table 3. Questionnaire

Table 4. Statistics

Table 5. Hypothesis

1. Specification and Definition of the Project

1.1 Abstract:

Technological breakthroughs, globalization, innovation, demographic changes have hugely transformed the way people communicate and do business in the modern world. Research has shown that the role of leadership and leadership effectiveness have been a major issue in the literature of world business. The aim of this research is to understand how effective leadership in business can have a positive result in different business environments. The following article presents the overview of theoretical concepts pertaining to modern leadership as well as research on critical leadership styles which are effective in handling numerous challenges in business leading the companies to succeed. In this regard, effective leaders must successfully communicate with team members about those challenges and have managerial skill facilitating prompt solutions in any circumstance. Leaders’ understanding of when to apply certain leadership styles inspires employees to achieve organizational goals and help businesses thrive (Zammuto, 2019).

Based on a review of the literature on modern leadership theory, the factors of leadership effectiveness, job satisfaction, an online survey was conducted targeting employees in industries across United States. Analysis on the result of survey demonstrated the correlation of effective leadership and job satisfaction. On this basis, the researcher also focuses on modern leadership styles which employees desire to have in their organizations and the researcher evaluates effective leadership in five tech giants(i.e., Apple, Samsung, IBM, Oracle, HP) among top 50 multinational brands(See Appendix.1)

1.1.1 Aims:

- To understand challenges that today’s businesses face.
- To identify factors that contribute to leadership effectiveness and that cope with business issues.
- To compare and contrast modern leadership work in top global brand companies and general companies in the US.
- To assess how three factors (Adaption, Communication, Participation) regarding modern leadership challenge existing modern theories.
- To figure out the correlation of a mixed leadership style based on three factors (Adaption, Communication, and Participation) with job satisfaction.

1.2. Introduction:

In an ever-changing business environment, leaders across the globe have been encountering different challenges. Advanced technologies are quickly disrupting industries. Competitive society has compelled organizations to become more responsive to customers in order to stay ahead of their competitors. What worked in the past may no longer work today. This has forced organizations implement greater change in modern leadership. Organizations also are having to adapt to this changing landscape to survive in this modern world.

As we are living in a revolutionary period, organizational changes in leadership are becoming imperative. In response to such changing trends, organizations demand effective leaders who are able to lead changes in communications, to motivate staff, to be technical experts, to be data-driven, to be open-minded to new ideas and to make strategies based on business realities. Changes result in opportunities. Effective leaders in the modern world are held accountable for helping business to move forward with a clear vision and for leveraging new opportunities to innovate.

1.3 Research Framework

1.3.1 Hypothesis

Abbildung in dieser Leseprobe nicht enthalten

Table 5. Hypothesis

Source: The author’s own work

Ho. Transformational leaders should possess adaptive, communicative and participative leadership skill in order to handle dynamic challenges and improve job satisfaction, leading to a successful business in an ever- changing modern world.

H1. While an insufficient level of adaptive skills is negatively associated with employee satisfaction and productivity, the adaptive leadership skill-based approach to transformational leadership is an effective leadership style in the modern world.

H2. While ineffective communication skills lead to a low level of job satisfaction, the communicative leadership skill-based approach to transformational leadership is an effective leadership style in the modern world.

H3. While insufficient employee participation in decision making is linked to a low level of employee commitment, the participative leadership skill-based approach to transformational leadership is an effective leadership style in the modern world.

2. Literature Review

2.1. Definition of modern leadership

There have been only a limited number of studies addressing how to define modem leaders. Merriam- Webster (2016) defines a leader as an individual who leads in a position at the front. In the past decades, the world has witnessed many historical figures staying at the front, leading many followers. Society has viewed these individuals as influential leaders. Traditionally, leaders are defined as individuals with strong power and authority with regard to decision-making. Companies centered in hierarchical structure have needed charismatic leaders who can give commands with their goal-oriented strategy. Such commands were effective in previous generations, during which leaders could expect a reasonably stable world with change unfolding at a much slower pace. However, changes in the modern world are more unpredictable. It appears that what constitutes a leader has become harder to define.

Many theorists claim that universal characteristics of leadership can still be applied to the fast-changing world. In general, leadership is one of the most important aspects in any business organization as it determines the overall success of the particular organization in all key activities and functionalities (Belkhouche et al., 2013). Chemers (1997), for instance, suggests that "leadership is a process of social influence in which one person is able to support others in the accomplishment of a common task". Due to the impact of a good leader on business success, more companies are willing to hire and train employees to be effective leaders.

2.2. Problems

The major issues pertaining to leadership at the end of the 20th century were different from the major challenges facing managers in the postmodern world of the 21st century (Drucker, 1999). Along with a new transformation in the social trend that highly values global competitiveness, innovation, flexible work environments and digital changes, leaders are required to have the skills and traits that encourage team members to be successful. In light of such requirements, it seems challenging to even be eligible to become a leader today.

2.3. Background of effective leaders

Effective leaders in the modern world inspire others to pursue excellence, to extend themselves and to go beyond their job requirements by generating creative ideas. In this regard, managers are individuals who do things right and leaders are individuals who do the right thing (Drucker, 1955). Unlike in the past when employees passively took orders from their boss, today people generate ideas and make them into real products.

This process is primarily led by effective leaders who listen carefully to their subordinates’ opinions, creating a work environment where all employees can actively join and thus flattening organizational structures. (Harris, A. 2019) The ability to effectively lead an organization depends on many factors such as the organizational culture, the behavior of the followers, and the personal traits of the leader (Toma, S., and Marinescu, P, 2013).

Leaders balance subculture with organizational unity by helping employees fully understand their roles and by inspiring them to be active in the community. Therefore, further research regarding modern issues, leadership skills and traits was conducted in this study.

2.3.1. The correlation of adaptive leadership with job satisfaction

The pervasive digital transformation has made every organization an information company. Uncertainty and turbulence in working environments has created the need for adaptive strategies. Adaptive leaders are capable of creating good working condition that enables employees to achieve common goals in a changing environment (Chua et al., 2011). Stephen and Timothy (2013) argue that working conditions influence job satisfaction, as employees desire a comfortable physical work environment. In turn, such an environment will render a more positive level of job satisfaction. New changes always demand new strategies and abilities. Adaptive leadership sees such changes as a new chance to develop the capacity to thrive and relies on diversity (, 2009). By building a culture that values diverse views, adaptive leaders successfully create a work environment in a globalized setting.

Effective management of diversity is a key to global business success (Okoro, 2012). Beside those organizational contributions, organizations which value differences and which create the opportunity for their members to use their potential fully provides individual contributions such as comfort and confidence, to employees as well as morale, job satisfaction, effective communication, teamwork, high performance and loyalty (Barutcugil, 2011) Adaptive leadership styles would maximize the effectiveness of members under the command of leaders with greater ability.

In contrast, many organizations fail to successfully adapt to the changing trend. According the survey conducted by McKinsey (Yogi, 2016), 70% of executives mentioned their transformational failures. Manfred Ket de Vries (2004) stated that failures in changing organization are attributed to the incapability to recognize employee behavior patterns and lack of self-awareness in leadership. Above all, when the decision is largely at the top, organizations fail to be quickly responsive to any changes. Janse (2018) postulates that top-down leadership (called autocratic leadership) negatively affects employee’s creativity and causes them to fail to recognize the importance of changes. Leaders with good adaptive skills make it possible to help individuals and organizations adapt to changing environments.

2.3.2. The correlation of communicative leadership with job satisfaction

Leaders’ communication skill plays a key role in affecting attitudes such as job satisfaction in an organization. Rallis and Goldring (2000) found that effective communication improves collaboration and communication competency. Shaw, Gupta and Delery (2005) found that strong leaders communicate clearly, share and respond to information on time, and open all existing communicational channels. Stohl (1985) also stated that communicative leaders effectively use communicative resources in achieving goals.

Moreover, Stohl (1985) found that communicative leaders differ from traditional modern theories in that such leaders are transformational, democratic and situational. Witherspoon (1997) claims that the meaning of leaders can be expressed through communication. True effective leaders should form two-way communication. According to Luthra, A. and Dahiya, R. (2015), employees who are well educated by communicative leaders are more likely to have a positive attitude toward life and better teamwork abilities. Through effective communication, leaders are able to know how satisfied their subordinates are with regard to their work and how appropriately their subordinate react to any changes in the work environment. As Seashore and Taber (1975) explains, employee satisfaction is heavily influenced by personal relationships with leaders and the organizational climate.

In this regard, unsupportive leaders put pressure on employees, which leads to low job satisfaction (Wilkinson & Wagner, 1993). If a leader takes a hostile approach to the opinions of employees such as requiring flexible environment and work schedule for better performance, that organization likely misses the chance of further developing its business. It is undoubtedly true that workplace flexibility increases employee efficiency and productivity.

2.3.3. The correlation of participative leadership with job satisfaction

Participative leaders are the individuals who focus on group based participation, discussion and decision (White and Lippitt, 1960). The influence of participative leadership involves employee's motivation, job satisfaction and innovation. Wong, G (2017) mentions what future leaders should be: cultivating an environment where a participative making decision is made. Participative leaders involve their followers in the decision making process more effectively. While making decisions sensibly, employees can get motivated and show a higher productivity.

Flexible and successful organizations put much emphasis on participative leadership style with an interactive working environment (Gong, Huang and Farh, 2009). This type of leaders tries to focus more on the values of employees and their engagement in any decisions. Sarwar (2016) suggests the high level involvement in the task when all the employees are involved in the process of planning, evaluating, generating results creates the greatest satisfaction.

2.4. Modern Theories

2.4.1. Transformational leadership

Bass and Riggio (2006) posit that transformational leaders are able to change their way of the followers thinking into a way that coincides with the vision of the organization. Burns (1978) further developed this idea, emphasizing that transformational leadership fosters cooperation between leaders and followers with the highest level of morale and motivation. In this process, leaders can successfully inspire their subordinates to identify a vision beyond their own interest. Both leaders and followers can develop a sense of belonging to achieve shared goals. Bass (1985) termed transformative leadership as a useful strategy that inspires followers to find new ways to solve issues.

Owing to the outstanding outcomes that accompany higher motivation, transformational leadership is advocated in many organizations (Bass, 1990). Bycio, Hackett and Allen (1995) found employee satisfaction is positively associated with transformational leadership style. As for the argument that the transformational leadership style brings better employee results, Bycio, Hackett and Allen (1995) thought it is clear that transformational leadership is the dominant indicator of employee satisfaction.

According to Bass (1998), four dimensions of transformational leadership are now being accepted as an effective method for companies. Three companies which are known for their CEOs’ transformational leadership are demonstrated below to align with the four factors below.

1. Idealized Influence

Transformational leaders act in a way that serves as a role model that followers seek to emulate for the shared vision. Idealized influence is more likely to link to charismatic leaders (Gellis, 2001). Followers are fascinated by leaders’ charismatic leadership having extraordinary capabilities, persistence and determination.

2. Individualized Consideration

Transformational leaders listen to the needs of each worker by giving empathy and supports. In that case, employees have more aspiration to self development such as mentoring, career counseling activities resulting in increasing intrinsic motivation.

3. Inspirational Motivation

Transformational leaders get followers involved in a positive vision of the future by setting a higher level of expectation. This is might be achieved through encouragement from leaders by stimulating team work and emphasizing a positive outcome.

4. Intellectual Stimulation

Transformational leaders not only encourage creative ideas in their followers, but also promote their personal development. Leaders continuously encourage their followers to try to find new ways to the problem and ideas and change the awareness of followers. Transformation Leadership found in large corporations

1. Clear Vision to changes

Under the charismatic leadership of Chairman Lee, Samsung transformed its mediocre industry into a new form which became one of the most famous global companies. Along with the vision 2020, ‘Samsung is dedicated to create innovation and world leading digital technology (Samsung Sustainability Report, 2016). Keeping the vision 2020, ‘Samsung electronics will seek out a challenge in new business such as health, medicine, automotives and biotechnology ’ in mind, Samsung invested a great amount of money in Research and Development(R&D) center to develop new digital technology such as foldable phone. Furthermore, to demonstrate higher ethical standards, Samsung leaders encourage employees to focus more on environment friendly products which effectively reduce GHG gas emission (Samsung Sustainability Report, 2016).

In contrast, HP shows more systematic plans designed for the next five years (Darrow, 2016). Their five-year plan includes diagnosing(year 1), fixing and rebuilding(year 2), recovery and expansion(year 3), acceleration(year 4) and becoming an industry-leading company(year 5) (Darrow, 2016). What truly makes a Meg Whitman as a transformational leader is that she abandoned a traditional concept of PC. Along with the acquisition of technology companies, Meg Whitman, former CEO of HP, developed a new vision to develop new computer by integrating IBM’s computer consulting solutions.

Unlike two companies, the vision of following ‘only one way’ is well described in IBM. Despite of changes and uncertainty, his vision on what will bring a success in future business was certainly clear. Current CEO of IBM Ginni Rommetty’s risk-taking method to only focus on the fields of artificial intelligence and cloud computing is one way to bring success over its competitors in the competitive market (D'Monte, 2017).

2. Two-Way Communication

Samsung senior leaders including Chairman Lee, try to listen to what their followers need and supports them through direct communication channels that encourage some followers. The voice of employees(VOE), for example, enables a positive work environment where top management can listen to thought and opinions of employees directly (Samsung Sustainability Report, 2016).

HP leaders approach each situation with the belief that people do good jobs. Meg Whitman believed that personal values embedded in leaders’ minds are keys to success of an organization (Whitman and Hamilton, 2010). Her values on treating all employees with respect and making the work environment where employees can speak their concerns and thoughts could save HP Company which was once on a downward trend under previously failed leaderships. Interactions with followers are more personalized because HP leaders recognize each individual’s concerns.

Similarly, IBM’s work environment is more open and diverse, and every employee feels confidence in their job. Ginni Rommetty, a leader of IBM, has formed a flexible culture that enables each IBM employees to learn continuously and to establish goals. Through a Q&A module or live audience polling, executive listen to voices of employees and support them share ideas freely (IBM Executive Report, 2015).

3. Stimulation for a common goal

Samsung provides numerous benefits including strong performance-based incentives, which propel a higher engagement of followers to invest their efforts in their tasks (Samsung Sustainability Report, 2016).

This is quite opposite to the way of HP management style. HP leaders not only pay attention to generating enthusiasm but also focus on ensuring a high level of achievement and contribution among their followers. For instance, the principle of Meg Whitman is that every employee should be inspired and motivated to perform at their best (Whitman and Hamilton, 2010). The most important thing to make them productive is to make them happy and enthusiastic at the workplace.

Like Samsung, IBM offers their employees the chances to see the meaning of work by means of different benefits such as performance bonuses, equity incentives and an employee assistance program (IBM Employee Benefit Summary, 2019). IBM leaders believe when employees are awarded according to their performances, they feel more sense of belongings. Samsung nurture and develop people by securing their core talents.

By approaching old issues in new ways such as developing diversified products ranging from OLED TV, refrigerator, radio to Smartphone (Albert, 2018), Samsung allows each employee to find their talents in different areas and think independently and innovatively.

HP’s diverse work environment stimulates innovative thinking (Whitman and Hamilton, 2010). Flexibility in the workplace also helps employees work hard and upgrade their capabilities for innovation.

In this regard, IBM’s company culture promotes employees’ passion for solving issues with innovation. Through the transformation that the company is undergoing, IBM embraces changes and advances new skills.

2.4.2. Situational Leadership

Situational leadership theory has been presented as a behaviorally-based framework that examines the leadership styles of managers (Hersey and Blanchard, 1982). In accordance with the commitment of their followers, leaders vary their leadership style and behavior (Kindle, 2009). This type of leadership demands that leaders vary their behavior and leadership style according to their subordinate’s commitment (Kindle, 2009). Situational leadership is the mixture of task behavior, worker commitment and relation behavior.

Hersey and Blanchard (1972) states that situational leaders possess the ability to change their leadership style according to different circumstances. According to David Wyld (2010), ‘Situational leadership brings attention to the role of the follower’. This type of leadership is applying flexible leadership style needed to nurture the development level of a follower to help him or her be successful in a working environment. Situational Leadership found in large corporations

Oracle Larry Ellison, known as co-founder and the executive chairman and chief technology officer (CTO) of Oracle, is described as autocratic leader. Autocratic leaders make all the decision and delegate the task to each employee (Janse, 2018). His clear vision and the image of oracle were envisioned in his mind while he was working as CEO (Kozol, 2010). This was successfully integrated in the management style. Hardly anyone could have ever thought of challenging the direction of their outstanding boss. With the combination of hubris and self-awareness, he successfully ran the company with competitive spirits. Larry Elision is a brilliant leader who knows how to drive his subordinates to perform better. Consequently, autocratic leaders like Larry possess a powerful authority in every decision (Janse, 2018). Despite of it, directions led by talented leaders strengthen team spirit and promotes cooperation.

Larry Ellison, on the other hand, was different from other traditional leaders who stick to their thoughts and are slow to change. For the vision of Oracle, Larry Ellison changed his autocratic management style into transformational leadership style. With the idea that ‘People who do a great job don’t just get to stick around in companies forever’, Larry Elision hired new action-oriented people for spotting opportunities to develop and support them until he couldn’t (Mendleson, 2011). His vision and solutions played a key role in Oracle’s success. In this fast-paced environment, Oracle’s situational leadership adequately worked.

Apple The situational leadership ability of Steve Jobs, a formal CEO of Apple, has made him as one of the most successful businessman today. His first approach of management was autocratic style like Larry Ellison, Chairman of Oracle. If autocratic leadership is misused in workplace, it rather decreases the creativity of employees (Janse, 2018). When the leader has a clear and bright vision and a lot of knowledge, achievement for a company’s goal is more crystallized among employees under the autocratic leadership (Bashir, 2017). That was the way that Steve Jobs guides his employees rightly. He soon changed participative style of leadership which motivates and inspire employees to generate new ideas. Steve jobs successfully turned those innovative ideas into the form of technology that we use now.

The revolutionary technology such as iPad or iPhone came out of his clear insights on applying situational leadership style. Apple has now became one of the most prosper companies and No.1 technology brand in the world (Bashir, 2017). This huge success relies on the leadership capability of Steve jobs that could vary his management based on employees’ commitment and different circumstances to achieve desired goals.

2.4.3 Limitation of transformational leadership and situational leadership

This would demonstrate why exiting leadership theories are flawed without other leadership qualities considered.

Weakness of Transformational Leadership

- Abuse of power: Transformational leadership only positively works when the leaders work for the common good goal. If a transformational leader is self-serving and leads the employees for his own good in the name of transformational goal (Yukl, G, 1999).
- Varied behaviors: Transformational leadership is beneficial for followers and their organization, regardless of the situations (Bass, 1997). Nevertheless, situations, level of authority, characteristic of countries vary from organizations to organizations (Yukl, G, 1999). These situational variables may increase, resulting in the likelihood of failure in leadership. This also might cause a significant disturbance on the behaviors of employees what to do and how to perform for their task.
- Burnout: With the stronger motivation, long-term vision, transformation leadership is highly likely to lead to burnout (Yukl, G, 1999). Under transformational leadership, most leaders try to make their followers to sacrifice themselves and exert extra efforts. If the leaders put pressure on employees to make creative ideas beyond expectation, the productivity of employees will rather be declined.

Weakness of Situational leadership

- Frequent shifts: When management style is frequently shifted, this could drive away a long-term goal since situational leadership focuses more on immediate needs and therefore personal development is more likely to be stalled (Sisk, 2018).
- Challenges the maturity: Dr. Robert Schemel, Assistant Management Professor at the Department at Middle East Technical University in Ankara, Turkey proposed that situational leadership theory does not address the role of employee maturity. Employee maturity could be formed through longer and stable experiences from work (Kokemuller. N, 2018).
- Confusion: Situational leadership does not provide enough information to leaders and organizations. If some leaders are not skilled enough to perform under the flexible and situational setting, this would rather do harm rather than good because leadership skill is not fully developed and understood among the leaders (Sisk, 2018).

3. Methodology

3.1 Research Design

In this research, a cross-sectional survey design was employed. A cross sectional survey refers to an observational study, which describes ‘snapshot’ of a single moment in time (Hemed, 2015). The cross sectional design is usually popular because it is useful for identifying traits of populations at a given time and for analyzing some features that being described (Raimundo et al, 2018). Some researchers mention that a cross sectional survey is useful when it assesses the frequency with which people perform certain behaviors or the number of people who hold particular attitudes or beliefs (PBNNY et al.).

For example, in order to measure some aspects of employee satisfaction, this could be a recommended approach. When the data collection strategy is broader in scope such as survey research, cross sectional studies are mostly preferred.


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Modern Leadership in the Changing World. Challenges for Today's Businesses and Leadership Effectiveness
University of Derby
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modern, leadership, changing, world, challenges, businesses, effectiveness
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Jeong Yeon Seo (Autor:in), 2019, Modern Leadership in the Changing World. Challenges for Today's Businesses and Leadership Effectiveness, München, GRIN Verlag,


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