Question:
Discuss leadership and its impact on organizational performance.
1.1. Research background
The goal of an organization is to survive as well as sustain its existence through an improvement in the performance (Saner, 2005). The performance must be increased since the needs of the highly competitive markets are ever changing. It has been suggested by literature that role of leadership plays a very significant part in the performance of an organization. Nonetheless, the findings of studies about this particular topic are mixed (Anderson, 2012). While some studies suggest that leadership is significant for the development of organizational performance while others have stated that leadership is not so important.
Hence, all these findings which contradict each other demonstrate that further studies are required in this field. Moreover, much of the earlier researches have been on the role of leadership in restaurants as well as educational institutions. Thus, limited study has been conducted on the impact of leadership on organizational performance in the context of the customer service sector (“Transformational leadership the impact of its behaviors on manufacturing strategy”, 2015). This sector has been receiving importance day by day since the attention of the firms is directed towards providing quality service to the customers. Thus, the present thesis motivates in the investigation of the effect of leadership on the performance of an organization in the context of customer services. Further formulation of the study has been described below.
1.2. Problem statement
The occurrence of globalization has made the issue of leadership in companies a very crucial concept. Organizations have to face a lot of competition these days due to the increasingly competitive markets. Hence, the skills as well as the ability of the leaders in the company are required to be developed in order to gain compatibility in the global competition. A company can be considered to be compatible if it is productive and the performance levels are high. A leader must overcome all the issues which serve as hindrances on the path of reaching that stage. The elements which should be present in an organization to achieve the desired outcomes are empowerment of employees, culture of the organization, motivated employees and charismatic leaders (Awasthi, 2015). All these characteristics directly impact the effectiveness, effort as well as the employee satisfaction. The paper aims to describe the impact of leadership on the organizational performance.
The course of the current study has been explained in the previous section. The fundamental objective of the thesis is to study the impact of leadership on the organizational performance. Hence, the research question is:
How is the leadership behavior associated with organizational performance?
The following sub-research objectives answer the research question as well as pick an approach for it.
1.4. Aims and objectives
The aim of this study is to analyze the impact on the performance of an organization due to leadership.
The main objectives are:
This study is maneuvered from the argument that there is no relationship between leadership and the performance of the organization. Therefore, the first hypothesis is associated with the impact of leadership on the organizational performance while the other two are connected to the effects of transactional and transformational leadership styles on the performance of the organization.
It is imperative that the limitations of a study are discussed. Therefore, the rather than proceeding further, the limitations are spelled out. First off, this study will concentrate only on 2 kinds of leadership behavior i.e. task behavior and rational behavior. In addition to this, the role of leadership is discussed only on the context of customer service. Therefore, the present study does not include manufacturing companies (Tetenbaum & Tetenbaum, 2003). As already stated in the introduction, a limited understanding is available on the topic in the context of customer service sector. Thus, this study along with investigating the provided topic will also contribute to the existing studies on the topic.
The most important studies which have been carried out on the impact of leadership on organizational performance have been discussed here. 125 Chinese firms were being analyzed for the purpose. This study had identified 2 types of leadership behavior which were task behavior and rationale behavior (Randall, 2003). By dwelling further into the study, the measurement of organizational performance was carried out by the means of growth in sales, profitability, competitive status and market share (Christensen, Cormack, & Spice, 2011). It was discovered that the behavior of the leader which is task related is directly proportional to the performance of the organization.
2.1. Review of prior studies
Several factors have been evaluated by former studies in order to demonstrate the growth of firms, but the part played by the leadership style of the CEO has not yet been discussed. Getting knowledge about the relationship between leadership styles, performance, management systems and business strategies provide ideas about the difference in the rate of growth of firms.
According to a prior study, the behaviors and attitudes of the leaders play a considerable role in the shaping of the functions of firms (Fisscher, 2008). The leadership style indicates the tendency of the leaders in managerial actions and behaviors which is a crucial in determining the success of a company. Particularly, it is postulated that if a firm needs to succeed, the business strategies as well as the management practices are required to be in alignment with the leadership style of the owner or CEO.
Transactional leadership connects the job performance with rewards and ensures that employees have all the resources which are essential for carrying out a task perfectly and thus, helps companies to attain the objectives efficiently (Kelly, 2006).
“The level of integration and interdependencies that are needed for the new work environment as well as global competition require leadership that goes beyond the more basic transactional styles, which involve contingent reinforcement and management-byexception, to styles that are more intellectually stimulating, inspirational, and charismatic” (Gordon & Gilley, 2012).
Greater levels of commitment, cohesion, trust, performance and motivation are the result of transformational leadership. According to former research as well as Meta-analysis transformational positively impacts the performance by individuals along with the outcomes of organization (Page, 2010).
2.2. Studies supporting the topic
Substantial attention has been received by organizational commitment in previous researches since it has an important effect on the attitudes of work such as performance, job satisfaction, intentions for turnover and non-attendance. According to a study by (Guerra-López & Blake, 2011), organizational commitment is defined as relative strength of the individual’s identification along with the involvement of that individual with the specific firm. This, organizational commitment has is composed of three fundamental elements, namely:
The following figure shows the organizational performance relationship.
3.1. Research method
In order to evaluate the data the manager of the company has been interviewed and several questions have been asked about the company. Also, a questionnaire was sent ot the employees for their responses against some questions which served as data for the study.
3.2. Research design and data collection
This research is based on the primary data obtained by sending out questionnaires as well as conducting an interview with the manager of the D&R Cambric Communication. Both qualitative as well as quantitative data has been used in the study (Johnstal, 2013).
3.3. Validity and reliability
The ability of a research method to find the precise result is known as validity. Lack of viability in a study signifies that the findings were untrue. Reliability signifies the measurement of consistency in the production of similar results on different yet comparable findings.
The validity of this present study has been calculated by serving a set of questionnaires to the employees of the company taken here (Marques, 2008). A telephonic interview has also been conducted with the manager. The required results have been procured from the interview as well as the response from the employees. 29 responses have been obtained from 54 employees and hence, the research is valid.
The reliability has been tested by sending the questionnaires to the supervisor first in order to check the reliability. This pre-test had been done in order to check if the information can be counted as appropriate (Johnstal, 2013). Since more than 50% of the employees responded to the questionnaire, it signifies that the research is reliable.
3.4 Gantt Chart
The below table displays the timeline for the entire project to be completed
|
Task Name |
Start Day |
End day |
Duration (Days) |
|
Project Proposal |
18/05/2016 |
28/05/2016 |
11 days |
|
Literature Review |
29/05/2016 |
14/07/2016 |
47 days |
|
Data Collection |
15/07/2016 |
14/08/2016 |
30 days |
|
Data Analysis |
15/08/2016 |
14/09/2016 |
30 days |
|
Final report submission |
15/09/2016 |
16/10/2016 |
31 days |
The budget for this proposed project is around $3000 that will help in completing the project within the given timeline as shown in the Gantt chart.
Each deliverables budget have been allocated and proper justification is provided for the allocated costs are as follows-
|
Particulars |
Allocated budget |
|
Literature review |
$800 |
|
Data collection |
$1600 |
|
Data analysis |
$600 |
|
Total allocated budget |
$3000 |
4.1. Introduction to case company
The foundation of D&R Cambric Communication was laid in 2009 where the3 vision of the company was to offer services to entrepreneurs worldwide. D&R Cambric Communication is a call center which serves customers present worldwide. The organization has paid assistance to businesses as well as entrepreneurs by offering them better solutions in order to provide services to customers (“Leadership Coaching: From Personal Insight to Organisational Performance”, 2004). Presently, the company is carrying out 3 main projects in Australia, Canada and UK. These projects have formed the backbone of the organization. The company runs in a 24 hour shift with 52 employees who work in 3 different shifts.
In the telephonic interview with the manager of D&R Cambric Communication, said that the growth of the business was rapid. He said that the various techniques were used in order for the motivation of employees since they are most vital parts of a firm. Some tools which were mentioned by the manager have been listed below:
Tool 1: effective deals are provided on a fixed target and on completing it, the employees are taken out fast food restaurants.
Tool 2: cash is provided for as a bonus for weekly targets.
Tool 3: on the achievement of monthly targets, employees are taken out to picnics.
The above signifies that the strategy used for motivation is reward based and is among the best leadership behaviors. The manager stated that growth of a company is directly proportional to the hard work by the employees. When asked about the relationship between the CEO and the employees, he stated that the relationship is neither too lenient nor too strict. Counter Strike (a game) tournaments are arranged to refresh the employees (Maccoby & Scudder, 2011). Therefore, it can be stated that the leadership in the case organization demonstrates a democratic as well as transactional leadership.
The mamager was asked about the impact of leadership on the organizational performance and he stated that the quality of leadership matters when the employees have to work as a team and benefit the company.
The survey questionnaire has been dealt here. The results have been evaluated in graphs. The following sets of figures explain everything.
5.1. Conclusions
This research aimed to find out the impact of leadership on the performance of an organization. The research on the case company showed the growth of the firm with the assistance of leadership behaviors. It can be concluded that the leadership type shown by the CEO was democratic and transactional (Manderscheid & Ardichvili, 2008). From the telephonic interview as well as the survey obtained from the questionnaire, one of the main reasons for the rapid growth of the company is the actions of the CEO towards the company and its employees.
This study demonstrates that leadership is crucial in companies which are related to the service sector. Here it has been analyzed how a firm attains success and reaches to the goals and targets. Various leadership behaviors have been discussed here along with their impacts on companies. These notions can be used for future research and can also contribute to the improved performance among employees and motivate them.
References
Anderson, D. (2012). Is building relationships the key to leadership?. Performance Improvement, 51(2), 15-21.
Christensen, B., Cormack, E., & Spice, B. (2011). Evaluating leadership development in an academic program. Performance Improvement, 50(1), 9-16.
Fisscher, O. (2008). Creative Leadership, Skills That Drive Change – By Gerard J. Puccio, Mary C. Murdock and Marie Mance. Creativity And Innovation
Gordon, G. & Gilley, J. (2012). A trust-leadership model. Performance Improvement, 51(7), 28-35.
Kelly, S. (2006). Leadership Refrains: Patterns of Leadership. Leadership, 2(2), 181-201.
Leadership Coaching: From Personal Insight to Organisational Performance. (2004). Int J Productivity & Perf Mgmt, 53(3).
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