Impact Of Autocratic Leadership Style On Business Operations: A Study

Problem Statement

Generally, all the organizations that exist are kept in operation by a governing body of officials who ensure that the set rules and regulations are observed by the participants of the organization for the smooth running of all the activities carried out at all the units in the entire premise. This governing body ensures the management principles put across by Henry Fayol (1916) are observed for unity in operation of the firm to be realized (Fayol, 2016, p. 121).

This is normal and all the stakeholders are aware of the fact that any group of people existing together with a common goal must be led by a section of the population. The idea of division of labour and specialization comes in to separate the work-force of an institution; there are those who are specialized in management while others are casuals who usually work under the leadership of the management. Different management boards will have different approaches in the governing of their institutions (Chemers, 2014, p.209). Some will be friendly hence creating a suitable operating environment for every worker and in return the organization runs well due to the motivation and freedom the working personnel gets from the friendly management.

However, there is some extent the management should not go beyond when trying to ease the working restrictions by the subjects. Too much freedom may lead to over-relaxation by the working personnel which may have a negative impact to the output of the organization. Therefore, managers should make sure the limits for freedom and not being strict are observed for the betterment of the organization. On the other hand, some managements will choose to be too hard on the running of the organization at their disposal (Brumberg, 2002, p.56).

These are the autocratic boards of governments that put all the workers on toes such that they (workers) operate under pressure due to fear of being fired or penalties being imposed over their assumed reluctance. In the running of a business, which is the area of concern for this study, the study shall major on the implications of autocratic leadership style in business operations, and a bit of reference from a rather democratic or friendly leadership style.

1.2: Statement of the problem

Some businesses in the Eastern Suburbs of Sydney, Australia, are not thriving well and are recording a number of negative outcomes in their running. There are reports of low profits compared to other well-thriving firms, lack of growth to reach wider markets, lack of innovations in the operating systems of the companies, customers withdrawing from the premises’ dealings and even failing to subscribe to the businesses’ ideas.

The workers are even engaged in a go-slow tool of punishing the management and only restrict themselves to the set guidelines to avoid any slight disharmony with the management. All these can be accrued to a leadership style that cares less for the workers and instead of coming with ways of motivating the employees in their operations, the management plays strict and is always vigilant to penalize any mistake by the workers. This autocratic leadership style fixes the workers in a cocoon of fear of improving on their areas of operations which can create innovations and even inventions that would be an advantage to the firm since it can beat out other competing firms in the market. A democratic leadership style is rather important for a firm as it motivates the workers and always give them freedom to operate under no pressure (Kark and Shamir, 2013, p. 85).

Objectives of the Study

This kind of management is geared towards the best output from the workers and they usually achieve high in their operations. The severe disadvantages the firms which are attached to poor governance have prompted me to carry out a research to source information on what causes are leading to the state of the businesses, and also to suggest remedies of the problems sickening the performance of these enterprises. Therefore, from the study that will be carried out, a firm will find out that any problem that draws back its progress can be, for the most part, attributed to poor leadership skills among the management. Therefore, as a remedy, the organization will seek to re-align its managerial techniques so as to make the whole system run as a single entity, but not as separate sections. This way benefits will start accruing to the firm with the simple undertaking; suitable leadership style.

1.3: Objectives of the study

The objectives of this study are:

1. To investigate the effects of autocratic leadership style in the stakeholders’ output.
2. To investigate the effects of other leadership styles on the output of the workers.
3. To evaluate the job satisfaction level among the workers.                                                                                           
4. To investigate the impact of autocratic leadership styles to a business.       
5. How does autocratic leadership style affect the stakeholders’ output?
6. How do the other leadership styles affect the output of the workers?
7. What is the job satisfaction level of the workers?

This study will be important to a number of persons. First, the entrepreneurs who already have their operating businesses will use this research as a guide to ensure their premises are headed to the right direction. They will consider the adversities associated with the autocratic leadership style and correct the running of the enterprises where need be. Those already leading a good leadership style will stick to it and even improve further on the handling of the workers, something will create a free working environment which for the best part leads to innovations that makes the competition stiff for other competing firms. The employee turn-over will also be low since workers do not feel oppressed in their working.

This study will also be of great importance to the potential entrepreneurs as they make up for their budget to set up businesses of their own. Leadership style one would choose is of great importance as far as the continuity of the business is concerned (Aldrich and Yang, 2014, p. 70). Therefore, this study will acquaint these potential business persons with ways of running their businesses in the best way ever. This research paper will be used as a reference by the business people and when carefully considered,

the knowledge will see one a successful business man in the country. Another bit in which this paper will play an important role is in the setting up of State Business Laws by the government of Australia. The findings of this research shall assist the law making chamber to consider all the elements in company operations. The rights of the employee shall be put under considerations, the activities the employer assigns to the employer should rhyme with the pay and the working conditions (Skipworth, Godsell, Wong, Saghiri and Julien, 2015, p. 520).

1.6: Expected research outcome

The output of this study will be used by the stakeholders in a firm to understand each other in their interdepended activities to ensure maximum output in the organization (Panaccio, Vandenberghe and Ben, 2014, p.830). The results from this study may be variant from one firm to the other, but comparison between the well lead organizations and those that use autocratic leadership styles will clearly draw lines between the two types of leadership styles; autocratic and transformational leadership styles.

Expected Research Outcome

The positive responses from the good leadership styles will give an insight to those using the autocratic leadership style that their style of leadership will probably lead to poor performance in their firms. The negative responses by the workers depict high levels of dissatisfaction among the workers which may lead to high work turnover leading to recruitment of new members in the firm hence lack of innovation in various areas since new workers may have little or no experience to add into the firms’ activities as compared to the well experienced workers who leave the job due to mistreatment by the autocratic leaders. This study will therefore, be a core determinant of the prosper of any entrepreneur who would wish to consider knowledge on the leadership style to adopt (Sciascia, Naldi and Hunter, 2006).

1.7: Scope of the study

This study will be carried out in the Eastern Suburbs of Sydney, Australia, taking five business firms to represent the approximate 31, 500 businesses. A sample of 200 firms will be randomly picked ensuring every corner of the Eastern Suburbs of Sydney is represented.

In the past businesses were operated without no compact framework drawn to facilitate the ongoing activities of a firm (Wróbel and Ole?ków, 2014, p. 11). Workers would embark on a piece of without even considering the specialization or one’s fitness in the area. This happened until Henry Fayol (1916), came up with the principles of management that laid guidelines on the working and facilitation of a firm. Adam Smith’s division of labour and specialization techniques in corporation with the principles of management were adopted by firms and from them different leadership styles developed (Weingast, 2016).

The leadership styles differ in the way managers and supervisors approach their duties. Some will adopt the autocratic leadership style which involves supervisors playing hard on the workers. The workers tend to be always strictly on the guidelines due to the fear of the threats issued by the poor leaders. This leadership style has an impact of low production of the firm since the interactions between the management and the workforce is poor and the workers’ productivity goes down due to demotivation. The firms that assume a transformational leadership style always accrue the benefit of higher production on the part of the workers since the workers do not feel intimidated but they feel that the leaders are a part of them due to their friendly treatment of the subjects.

The workers feel motivated and will work efficiently and wish to remain in the system forever, unlike the demotivated and always wishing-to-go workers in the firms with poor leadership (Elnaga and Imran, 2013, p.143). Therefore, the comparison between a firm embracing transformational leadership style and one adopting an autocratic leadership style will give defined differences:

Autocratic Leadership Style-demotivated workers.

• high work turnover.
• go slows by the workers.
• lack of innovations.
• low output.

Transformational leadership Styles-motivation among the workers.

• low work turnover.
• committed workers.
• innovations and inventions
• high output.

Based on the problem statement and the objectives given for this study, the following can be tested as the hypotheses of the study:

       Alternative Hypothesis: Autocratic leadership style has impact on a business.

       Null Hypothesis: Autocratic leadership style has no impact on a business.  

The following methodologies will be undertaken in order to effectively analyze the aims of this
research proposal.

The leadership style in an institution is known to be a key factor determining the progress of any organization (Miles and Huberman, 1994). In a business, poor leadership skills can impact negatively on the operations of the enterprise. Retention of employees will become a problem leading to a high work turnover. Having new employees each and every time may leave a business at the floor since every time will be like training new workers. One has to understand the characteristics of poor leadership so as to avoid pitfalls that can fail the operations of the business.

The poor management skills, if noted, should be solved to clear the way for the forward movement of the business activities (Strøm, D’Espallier and Mersland, 2014, p. 65). Poor leaders will always disregard opinions of other stake-holders and be a barrier to communication required for the smooth running of the business. They will stay away from their obligations hence affecting the way staff members carry out their duties. Poor leaders will always issue threats to their subjects if the latter do not accomplish their tasks satisfactorily. This act will definitely diminish or totally kill employees’ morale hence bringing down their efficiency.

The financial results of poor leadership are often low, and this coupled with the business not achieving its goals can severely affect the entire business.  Managers who are overly critical usually demoralize workers who mistake on their operations, they usually threaten to send the mistaking workers to early retirement (Luthar, 1996, p. 336). This causes high turnover since not many workers will thrive under threats.

Transformational leadership should be embraced for a better running and realization of the goals of a business. A leader who comes down to the level of the subordinates and discusses with them on the various difficulties they may be going through and coming up the possible solutions is always an epitome to the success of the business in question. Democratic leaders create a good relationship with the employees leading to grown morale by the workers. The workers will increase their efficiency and bring in innovations in their area of operations and the company will reap big in such environment.

2.3.2: Population

This research has put into consideration the entire population in the field of business, both small and large firms in the Eastern Suburbs of Sydney, Australia (Govindarajan and Rajkumar, 2017). This part of Sydney has a population of 283, 470 people, out of the 23, 800, 000 approximate total population of Australia. The number of businesses in this area is approximately 31, 500.

2.3.3: Sample

The study will randomly sample out 200 businesses to use them in the study. From the selected businesses, 4 ordinary workers and 1 supervisor/manager will be randomly picked from different departments of every business. This will give a total sample population of 1000; 800 ordinary workers and 200 managers.

2.3.4: Data collection

The data collection methods to be used in this study will be qualitative in nature. Use of questionnaires and interviews will be employed. The population of 800 subordinates will be issued with questionnaires comprising of open-ended questions about their experiences in the day-to-day activities. The other sample of supervisors (200) will be subjected to intensive interviews. The questionnaires will be prepared and delivered to the respondents at their convenient area of reach and be collected when the respondent feels that they have satisfactorily filled the forms. No respondent will be subjected to any cost in the due course of the study.

The bunch of interviewees will be consulted so as to find out the convenient time they will be free to avail themselves at a suitable place for the interviews. The required data will be obtained from the record in the filled questionnaires and the information recorded down on paper from the interviews conducted. The data will then be ready for analysis (Bryman and Bell, 2015, p.105).

In this type of study, data collection and recording will happen hand-in-hand as the respondents will fill by writing on the spaces after every question on the questionnaire (Eriksson and Kovalainen, 2015). For the other group subjected to the interviews, each engaged alone, will respond to each question at a time as the interviewer records the information supplied. This concurrent technique of collection and recording will ensure that no data is lost and distortion is minimal as compared to when the recording is done separately after the interview session.

2.3.5: Data Analysis

2.3.5.1: Qualitative Analysis

The descriptive data from the information in the questionnaires and the record of the interviews will be analyzed qualitatively by the help of the concepts in the literature review considering the data given by the respondents. The expert panel that will be dealing with the data, through their special understanding of qualitative information will give an effective outcome or results of such a study. For instance, the negative information given by the workers toward the operations of the business will be attached to poor leadership style and the effects shall be deduced from the entire responses by the demotivated employee. On the other hand, motivated workers who will give positive information on their feeling about the activities of the firms where they work will be attributed to the transformational leadership styles. The motivation among the worker, as got from the responses will be a show of a bright future for the company that has good leadership styles.

2.3.5.2: Quantitative Analysis

Questions included in the interviews will provide numbers to be tabulated using the descriptive statistics. The firms with high work turnover will be an indicator of humiliation by the leadership style used. Also, the similar reasons for the demotivation among the workers shall be sourced from the underlying details of mistreatment and any sort of intimidation given in the questions in the questionnaires. The data from these types of qualitative methods of study may not give figures.

However, the data will be put into numbers by counting the number of times specific information recur in the different questionnaires filled by different people, and the information given by the different interviewees. The analysis will give valuable information to assist organizations to understand the danger that lurks in the poor leaders and general autocratic leadership styles. Promising outcome got from the data from subjects who are from an organization using democratic or transformational leadership will be also a reflection of the diverse differences on the lines of operations for two companies; one with poor leadership and the other with transformational leadership.

Both of the above data analysis techniques will be used in order to arrive at an accurate solution for the problem identified in the problem statement. From the in-depth
understanding of the literature review and the responses obtained through the interviews and
questionnaires, the data will be arranged and grouped into categories depending on strategies adopted by the firms, employment terms, firms’ work turnover. The data will then be analyzed and presented.

Chapter 1: will be the research proposal as outlined in this assignment.

Chapter 2: will describe the case study of the impact of autocratic leadership style in a business.

Chapter 3: will include methodological details- literature review, data collection, observing key indicators of autocratic leadership, data analysis.

Chapter 4: will report the findings and analysis of the proposed research.

Chapter 5: will summarize the important findings and discuss their implications in the management of businesses (the appropriate leadership styles).

Task Name	Duration
Proposal development	Week 1
Literature Review	Week 2
Collection of Data	Week 3 and 4
Analysis of Data	Week 5 and 6
Drafting of the Report	Week 7
Proof reading and Submission of the final report	Week 8

Purpose/ Items	Estimated Amount
Proposal Development	$850
Literature Review	$1000
Data Collection	$2000
Analysis of Data	$1100
TOTAL	4950

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