Question:
Write an essay on The impact of leadership.
The impact of leadership for running an organization successfully is the primary concern of this particular study. An ideal leader is the primary spine of an organization that has to lead a team successfully for providing effective services to the customers. A company can face a disastrous consequence due to the inefficiency of a leader within an organization. This particular study has provided a detailed case scenario about Enron. Established in the year 1986, Enron had expanded their widespread wings as a natural gas pipeline company. In the third quarter of 2001, the CEO of this company, Jeff Skilling had to face a disastrous consequence as Enron had been tagged as a failed business. Therefore, this specific study has primarily focused how leadership plays a major role in order to build the organizational culture as well as behavior. In addition, this study has also focused to highlight why the leaders of an organization like Enron should maintain ethical practices and appropriate leadership theories to lead the organizational team.
In the middle of 2001, Enron had to face immense challenges to maintain appropriate leadership style at the workplace. As a result, the shareholders of Enron showed their reluctance to use the service of this company. In the mean time, Jeff Skilling resigned from the post of chief executive officer due to the personal reason (Avolio & Yammarino 2013). After the departure of Skilling, the scenario has been changed to some extent. Ken Lay had been appointed for the post of CEO. As per his point of view, the company’s share plays a major role for rendering the success of a business. In order to enhance the share of the company, the leaders of this organization should maintain some necessary ethical codes and practices. In this regard, the implementation of appropriate leadership style and theory is highly important. This particular case study has not provided detailed information what leadership theory this specific organization likes to follow (Carter, Ulrich & Goldsmith, 2012). However, as per the opinion of newly appointed CEO Ken Lay, the organization should follow some of the important leadership theories such as motivational theory, behavioral theory, trait theory and so many.
Motivational theory believes that leaders are responsible for motivating the employees to provide best services to the customers. Employees should get the scope to express their views regarding any particular business. For the achievement of the business organization, the employee should get rewards that can motivate them to put more effort for the success of a business. In this case study, it has been observed that Jeff Skilling did not intend to maintain motivational theory the workplace. The relation in between the employers and the stakeholders were very professional and straightforward.
The behavioral approach of a leader inside the organization should be positive so that employees do not have to hesitate to share any problem regarding the job profile. As per Enron case study, it has been observed that integrity, respect and the communication are the major pathways to build a good co-ordination with the stakeholders (Chhokar, Brodbeck & House 2013). As per the behavioral theory, people of various culture and attitude should get respect and dignity at the workplace. Employees deserve every right to protest against any disrespectful treatment towards them. Communication would be effective only when the leaders would like to show their participative outlook to the workers. Their co-operation and their helpful attitude towards the workers would definitely bring the success of a company.
In case of Enron, it has been observed that Skilling intended to transfer the energy to California for creating blackouts. As a result, the price of electricity had been increased gradually. Employees had to face innumerable difficulties to face the regional stakeholder. Skilling as a CEO stated in this occasion that his responsibility as a chief officer is to increase the entire process of business. Therefore, by keeping the stock price up, the company would be able to plan about more profit making (Cummings & Worley 2014). However, it is undeniable that Skilling has not properly justified the code of ethics and leadership theory in this case. The success of a business is highly dependent on the performance of an employee. Therefore, the transformation of energy to California at higher price has not been accepted by most of the existing employees of Enron. Consequently, a long communication gap took place in between the CEO and the employees.
After the entrance of Ken Lay, the scenario of Enron has changed to some extent. Maintaining integrity, effective communication, positive behavior at the workplace had been given priority. However, Dimmock (2013) stated that the implementation of leadership theory within an organization is undeniable.
Organizational culture and behavior is the way how people like to interact and communicate in between each other inside the organization regarding the business goal. This particular part has focused to discuss on the different ways how leadership can influence culture. When Ken Lay and his company had to face immense struggle to keep the reputation of the organization, many of their contemporary traders intended to laugh at them. Therefore, this particular time was the toughest part of leadership for Ken Lay (Johnston, 2012). Amidst the gossips and rumors thrown by the contemporaries, Ken Lay had to fight there by surviving in the business industry. However, it is undeniable that organizational culture and ethics is highly dependent on the leadership style. The ways that leadership plays a big role for influencing the organizational culture are as follows:
Employees need to get motivation and support at every step for their service process. Reward, appraisal and the enforcement are the major ways for appreciating the performance of employees. If a team within an organization succeeds to reach the business target, the leaders should take the responsibility to reward the team so that they get enthusiasm to put more effort and labor for achieving the business success. In case of Enron, employees used to get bonus and incentive after reaching the business success. At the time of Skilling, this particular policy had not been implemented. Ken Lay had decided to implement the rule from rescuing the team from being demolished (Jonason, Slomski & Partyka 2012). It had been observed in Enron that the new employees had replaced lowest performers. This de-motivational factor also hampers highly in performance of employees. Leaders should always rectify the mistakes of underperformers. Replacement can never be the best option to render success in a business. The leaders of Enron should definitely take care of this fact.
Participative leadership implies that both the employers and the employees within an organization should have equal participation to achieve the success of a business. By following participative leadership style, leaders do not intend to impose their decision on the employees. Employees get the opportunity to expose their views regarding the betterment of business process. As a result, the employees get motivated to maintain the organizational culture and values (Moore et al. 2012). In case of Enron, it has been observed that the board of director liked to follow autocratic leadership style instead of participative. Consequently, employees felt least interest to maintain the organizational culture, ethics and values.
Organizational culture is highly influenced on the personality of a leader inside the organization. After appointing in the post of CEO Ken Lay had shown a strong personality to maintain the organizational culture and discipline. After the resignation of Skilling, Lay had strongly emphasized on the integrity, communication and respect (Pendse, 2012). As per his point of view, integrity inside the organization can be maintained only when people would like to show their respect towards each other. The personality of Lay truly drew the attention of Enron employees based on which they intended to maintain organizational discipline.
Leaders should always maintain an effective communication with the employees. By maintaining a strong communication, leaders can come to know various problems regarding the job. Besides, effective communication helps the organization to take collective decision at the right time (Piff et al. 2012). In an occasion, Lay had stated that communication is one of the major ways to maintain organizational culture. Unfortunately, as per the actual scenario, it has been observed that the interpersonal communication among the members of Enron was not very strong.
Unethical behavior ultimately causes a disastrous consequence within the business organization. Leaders therefore, have to play a major role in order to avoid such kind of unethical practices inside at the workplace (Von Krogh, Nonaka & Rechsteiner 2012). Enron is not exceptional to that. This particular organization should also follow some of the major ways to avoid unethical behavior within the organization. These are as follows:
Business organizations should follow some of the major acts and regulations at the workplace. The regulations and acts that should be followed at the workplace include data protection act, right to information act, health and safety act and so on. Both the employers and the employees have the equal right to utilize these regulations and act. If employers intend to treat the employees recklessly, this individual employee can take an immediate legal step against the employer (Robbins et al. 2013). As a result, this particular employer would like to think twice before conducting any misbehavior. Therefore, it is undeniable that regulations and acts are highly able to prevent unethical behavior at the workplace.
In case of maximum business organization, it has been observed that the managers do not intend to appreciate the efforts and labor of the employees. As a result, employees tend to show their reluctance to provide good service to the customers. Due to the lack of appreciation, employees intend to perform reluctantly. They like to show objectionable gesture towards the seniors. Ultimately, it affects to maintain a systematic environment inside the organization. Enron under the leadership of Skilling had faced this kind of situation repeatedly.
In order to maintain organizational ethics and culture inside the workplace, employees should get an effective training and guidance how to maintain organizational culture. Training helps to enhance the skill and competency of an employee (Robbins et al. 2013). It gathers experience as well. With the help of an effective training process, employees would be able to know about the value and importance of maintaining organizational culture. The employees of Enron did not receive any training regarding this particular matter (Tannenbaum Weschler & Massarik 2013). As a result, employees do not understand properly about the importance of culture and value. This is one of the biggest reasons for such a disastrous consequence of Enron.
Code of conduct is nothing but a set of rules that helps to outline some of the major roles of responsibility. While working within an organization, both the employers and the employees have to maintain the code of conduct in order to maintain an organizational culture and behavior (Schaubroeck et al. 2012). Based on this particular practice, the junior employees have to show a decent gesture and attitude towards the senior. The gesture of the juniors is highly dependent on the leaders of an organization. If the leaders fail to maintain their personality at the workplace, employees tend to show their reluctance to maintain code of conduct As per the above discussion, it can be stated that the study has primarily focused to discuss on the various impacts of leadership for the success of a business organization like Enron. The role of leaders for reducing unethical behavior has also been pointed out here (Senge 2014). Therefore, it can be recommended that showing equal respect and dignity to the people of various culture and background, maintaining strong interpersonal communication among every employee, developing the understanding of people can definitely reduce the overall unethical practice and behavior inside the organization.
Conclusion:
This particular study has provided an in-depth understanding about the effectiveness of leadership for controlling the business process. As per the case study of Enron it has been observed how an organization has to face a disastrous consequence due to the incompetency of a leader. The personality, skill and competency of an ideal leader help to build the image of an organization. Therefore, this particular study has focused to highlight how a leadership quality helps to influence the organizational culture and behavior.
Reference List:
Avolio, B. J., & Yammarino, F. J. (Eds.). (2013). Transformational and charismatic leadership: The road ahead. Emerald Group Publishing.
Carter, L., Ulrich, D., & Goldsmith, M. (Eds.). (2012). Best practices in leadership development and organization change: how the best companies ensure meaningful change and sustainable leadership (Vol. 18). John Wiley & Sons.
Chhokar, J. S., Brodbeck, F. C., & House, R. J. (Eds.). (2013). Culture and leadership across the world: The GLOBE book of in-depth studies of 25 societies. Routledge.
Cummings, T., & Worley, C. (2014). Organization development and change. Cengage learning.
Dimmock, C. (2013). School-based management and school effectiveness. Routledge.
Johnston, P. B. (2012). Does decapitation work? Assessing the effectiveness of leadership targeting in counterinsurgency campaigns.International Security, 36(4), 47-79.
Jonason, P. K., Slomski, S., & Partyka, J. (2012). The Dark Triad at work: How toxic employees get their way. Personality and Individual Differences,52(3), 449-453.
Moore, C., Detert, J. R., Klebe Treviño, L., Baker, V. L., & Mayer, D. M. (2012). Why employees do bad things: Moral disengagement and unethical organizational behavior. Personnel Psychology, 65(1), 1-48.
Pendse, S. G. (2012). Ethical hazards: A motive, means, and opportunity approach to curbing corporate unethical behavior. Journal of Business Ethics, 107(3), 265-279.
Piff, P. K., Stancato, D. M., Côté, S., Mendoza-Denton, R., & Keltner, D. (2012). Higher social class predicts increased unethical behavior.Proceedings of the National Academy of Sciences, 109(11), 4086-4091.
Robbins, S., Judge, T. A., Millett, B., & Boyle, M. (2013). Organisational behaviour. Pearson Higher Education AU.
Robbins, S., Judge, T. A., Millett, B., & Boyle, M. (2013). Organisational behaviour. Pearson Higher Education AU.
Schaubroeck, J. M., Hannah, S. T., Avolio, B. J., Kozlowski, S. W., Lord, R. G., Treviño, L. K., … & Peng, A. C. (2012). Embedding ethical leadership within and across organization levels. Academy of Management Journal,55(5), 1053-1078.
Senge, P. M. (2014). The dance of change: The challenges to sustaining momentum in a learning organization. Crown Business.
Tannenbaum, R., Weschler, I., & Massarik, F. (2013). Leadership and organization. Routledge.
Von Krogh, G., Nonaka, I., & Rechsteiner, L. (2012). Leadership in organizational knowledge creation: a review and framework. Journal of Management Studies, 49(1), 240-277.
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