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A literature review of key theories of the nature and exercise of leadership in organizations
Introduction
Leadership related studies have for a long time attracted the attention of both academic researchers and practitioners such as organizational managers. There have been many definitions as to what exactly is meant by leadership. Some of these definitions take the perspective of describing the purpose or the requirements the person regarded as the leader while others have taken the perspective of the nature of the position considered as a leadership position (Yukl 2010, p.25). For instance, Boak (2011a, p.2) defines leaders as people in positions of authority in societies/organizations.
Some scholars in the field have also developed theories that seek to elaborate on nature and the essence of leadership. As a result, this study aims at critically comparing and contrasting the leadership styles of Warren Buffet and Al Gore with regard to the Leadership behaviors, as well as examining the effectiveness of the Leadership style of Warren Buffet (Accountability and Responsibility) in the banking industry.
Trait Theories
Trait theory draws much on virtuous character traits as key indicators that a person can be a leader. People regard this approach to leadership to have originated from the earlier Great Man Theory. The theory, as revealed by those in favor of it, claims that there are evident identifiable characteristics that determine potential successful leaders. Critical traits associated with successful leadership came in handy during the process of identifying and recruiting people into positions of leadership. Boak 2011a, p.2) cites that some people recruited according to these traits were not effective while some who did not have them were effective. This implies that the traits varied with circumstances.
As with the earlier Great Man theory, the trait approach to leadership was common in the military though it is still a part of the criteria in the process of selecting commissioners (Bennis 2003, p 67). Some people nowadays secure managerial positions using a given set of criteria, which draws inspiration from this theory.
The major problem with this theory is the absence of definite traits that people can universally accept as indicators of leadership. Several studies aimed at coming up with these defining characteristics turned out to be inconclusive. This is because the traits did not match in every person whom others considered as a leader in the study. However, some traits appeared in most of the people considered in the study. According to Goleman (1998, p 84), these include technical skill, friendliness, task motivation, application to task, group task, supportiveness, social skill, emotional control, administrative skill, general charisma, and intelligence. Of the said traits, the most outstanding one in the study happened to be charisma. There were problems encountered when it came to measuring traits such as diligence, honesty, or even integrity. This made it impossible then to come up with conclusive results on the traits.
Behaviorist Theories
In this school of thought, people define a leader majorly through a consideration of what they actually do rather than the traits that they portray. According to Mullins (2010, p 90), these theories are based on the belief that great leadership is acquired rather than being inborn as is the claim held by the Trait Theory. People can, therefore, learn to be executing the responsibilities of a particular leadership position by merely observing or learning the necessary skills. Leadership is therefore acquired and not innate as the trait theorists claim. Behaviorists observe and categorize different behavioral patterns as leadership styles.
After the publication of the book The Human Side of Enterprise by Douglas McGregor in 1960, people shifted attention to the behavioral theory of leadership. As a result, McGregors view on leadership influences all the behavioral theorists. This theory puts em emphasis on focusing on relationships in the or workplace a Vis performance and overall productivity. The theory of leadership portrayed in McGregors book (1960) has a lot of influence on present-dangers. Publicized the most is his concept that strategies mostly used by leaders emanate from such leaders assumption of human nature (McGregor 1960, p 56). By contrasting assumptions made by organizational managers, McGregor came up with the following table retrieved from Theory X and Y managers (McGregor, 1960, p.23):
Considering the assumptions held by manager X, it is clear that such a manager would definitely end up employing an autocratic style of leadership while manager Y would most likely prefer employing a considerably participative style of leadership (McGregor 1960, p.45).
Blake and Mouton
Under the inspiration of McGregor, Blake and Mouton came up with a managerial grid that focuses more on the task (production) and workers (people) orientations of organizational managers. It highlights the concerns raised by the two extremes. The grid, which plots the concern for production on the horizontal axis and that of people on the vertical, plots the five essential leadership techniques available at The Blake Mouton Managerial Grid (Blake & Mouton, 1964, p.78)
Behavioral theories may help people in positions of leadership to develop important leadership behaviors by they are inadequate considering that they give little guidance as to what should be the ideal leadership behavior in different situations. According to most of the researchers in the field such as Conger (2006, p 52), no one leadership behavior can stand on its own and be effective in every circumstance.
Situational or contingency leadership theory
In this school of thought, people argue that a leadership style should be contingent upon the prevailing situations such as the context, the people, and the task worth handling, the nature of the organization among other variables. A number of theories contribute to this school of thought. According to such theorists, every situation has a definite leadership behavior that is best suited to it.
Fielders contingency Theory
This theory postulates that there is no one defined way of leadership that managers can adopt in all situations. It holds the claim that different situations create the best leadership style that managers can adopt at that particular moment. Therefore, it is important to note that the best solution for a problem that occurs in a given context is always contingent on the factors that lead to the situation. For instance, in a highly mechanized organization whereby the nature of the workers responsibilities is repetitive, a directive style of leadership may bear the best fruits (Kotlyar & Karakowsky 2007, p 20). In another situation where the work environment is more dynamic, a more flexible and interactive system of leadership proves to be the best in encouraging productivity. According to Conger (2006, p 90), there are three situations that when considered could be used to define the condition of a managerial situation. These include Leader-member relations, the structure of the task, and the position of power. Based on these situations, one can classify a manager as either relationship-oriented or task-oriented.
The Hersey- Blanchard Model of Leadership
Hersey- Blanchard model argues that the levels of development of a leaders subordinates are responsible for the leadership style that the leader opts to adopt. This theory is majorly concerned with the directive and the emotional support that a leader is supposed to provide in a given level of maturity of the followers. It relies on these three variables: Task behavior (the directive), Relationship behavior (socio-emotional support), and Maturity of the subjects.
According to this theory, therefore, it is important to consider a given situation to determine the most appropriate leadership style to be affected. The level of maturity on the side of the subjects determines the extent to which a leader would choose to either increase or decrease his or her task behavior. For instance, if the subjects level of maturity rises, the leader is supposed to reduce his/ her task behavior while at the same time increasing his/her relationship behavior.
Tannenbaum and Schmidts leadership Continuum
These two contingency theorists opposed the extremism portrayed by the other theorists in their school of thought. They as a result came up with the argument that leadership behavior varied along a continuum. They as a result argued that the democratic extreme represented a kind of leadership that was not effective in formalized organizations. The four major leadership styles of the other theorists could then secure a place in a continuum. These styles are Autocratic, democratic, persuasive, and consultative.
According to Mullins (2010, p 45), whether to apply leadership behaviors such as democracy or autocracy in managing an organization is dependent on the prevailing circumstances. Varying occasions and situations, therefore, require a corresponding leadership behavior to come up with a way out.
Adairs Action- Centered Leadership model
Another theorist in this school of thought is John Adair. Adairs famed three-circle diagram presents a simplified variation of human interaction in the organization. According to Adair, situational and contingent issues call for varying responses from the leader. The size of the circles can therefore be bigger or lesser depending on the variety of the situations. This means that the leaders emphasis on functional-oriented behaviors is depended on the actual situation. This proves to be a challenge on the part of the leader to make sure that all the sectors represented in the circle are managed effectively.
Transactional and transformational Leadership
A certain leader qualifies as transactional when he rewards the follower for meeting some agreements and punishes the follower for not doing what is supposed of him. In this case, the follower feels that he/she has been denied a sense of self-worth. Transformational leaders on the other hand uphold the self-worth of their followers (Bass, 1998, p 618). Transformational leaders motivate their followers to the extent of performing beyond what they thought they could manage to do. Pardey (2007, p 67) argues that transformational leaders are expected to cope better with adversity. According to Leighton Ford (1981, p12), spiritual leaders such as Jesus, Mohammed, and Buddha were transforming. This made them shape values and use transcendental metaphors that empowered change.
Reaching the requirements put forth by the leader is termed as rewarding to the follower both psychologically and materially. Failure to reach the objectives on the hand results in disappointment to both the leader and the followers. As argued by Alimo-Metcalfe and Alban-Metcalfe (2001, p 23), both transformational and transactional leadership are in the application in a number of organizations ranging from schools, police, hospital as well to industries.
Downton (1973, p 40) is the first person to mention transitional leadership, as it is different from transactional leadership. In 1977, House established a theory of charismatic leadership with a measurable hypothesis. After reading with concern the biographies of President J.F Kennedy and Roosevelt, James Macgregor Burns (1978) cleared the way for a wide impetus into the discussions that contrasted and compared between transactional and transformational leadership. According to Bass (1998, p 620), transformational and transactional leadership, however, have a positive correlation in that transformational leadership added to transactional leadership to make it conclusive.
It is, therefore, safe to conclude that transformational leadership happens to be the most conclusive leadership theory in that it benefits both the leader and the follower. According to Conger, transformational leadership elevates the followers level of maturity, ideas, and concerns for the well-being of others, the organization as well as society. Boyatzis and McKee (2005, p 35) proposed that leaders should stimulate followers in one of the following ways: rationally, existential, empirical, and ideological.
An evaluation of the behavior of selected leaders in your organization, or in an organization (or organizations) of your choice, in relation to a range of models and theories
For the ultimate success of organizations to become a reality, a leadership that promotes optimized productivity of human resources is inevitable. Organizational leaders are constantly looking for ways they can shun away leadership methods that are hindering productivity and adopting those that will ensure the full satisfaction of workers and the management and the overall betterment of the organizations.
Concerning the discipline of leadership, as Conger (2006, p 36) argues, one might end up getting information-overloaded following an over exploration of the topic in many aspects. For instance, one can end up getting over a billion matches upon entering the word leadership in a search engine such as Google. Scholars in different fields of study have also written numerous articles, reports as well as books on the topic. This explains the variance in diction when it comes to defining the term Leadership.
According to Yukl (2010, p 39), Leadership is the process that involves influencing others to come to an understanding and an agreement as to what needs to be done effectively as well as the process of facilitating individual and collective efforts to accomplish the shared objectives. From this definition, it follows then that a leader can be a person who is in charge of the process or the people in such positions of authority and entitled to oversee the above-described process. For the purposes of making an elaborate evaluation, this study evaluates the leadership behaviors of Al Gore who is a politician and an environmental activist in comparison to those of Warren Buffet who is a force to reckon with in the investment world.
Warren Buffet
One can only effectively evaluate the style of leadership that Warren Buffet employs by considering the different roles that he plays in his organization as the overall leader and chairperson. These responsibilities include appointing top management of his companies, inspiring his followers to achieve optimized results, the entire management strategies as well as rewarding those who greatly contribute to the success of the organization (Schroeder 2008, p 78). This study examines the activities that Warren Buffet does in his capacity as the leader and critically analyzes them in relation to the developed leadership theories and models with an effort of trying to define the actual leadership behavior that Buffet employs in the management of Berkshire Hathaway.
Appointments
In the style of management that Warren Buffet uses, he appoints the members of the top managerial team for Berkshire Hathaway and affiliate companies only. Other appointments in the mother company or the affiliates take place internally with him being directly involved in any way. Based on the trait theory, Buffet uses a given set of criteria to come up with the names of the appointees. There are certain traits that are important indicators that a person is capable of holding a managerial position according to Pardey et al. (2004, p 90). In this case, Buffet is considered a trait theorist considering that he uses the criteria such as the efficiency of the potential appointee, his individual performance as informed through his portfolio as well as the level of competency. Trait theorists hold the argument that a leader can be identified using such traits.Based on these traits, Warren Buffet comes up with the top management of his giant company.
Inspirational leadership
Warren Buffet keeps inspiring his subjects constantly through the newsletters that he releases annually for the workers and shareholders of Berkshire Hathaway (Schroeder 2008, p 80). Through these newsletters, buffet manages to inspire success in his employees by giving them business hints and inspirational stories about him or other successful businesspersons. However, indirectly, taking such an initiative to motivate the workers is such an important aspect of a leader according to transformational leadership theorists such as Conger (2006, p 34). By taking such an initiative, Warren Buffet becomes a source of transformation for the workers who in exchange work towards being successful as himself. The ability to understand and to relate to others is widely seen as being important for leaders (Boak 2011c, p.15)
In other instances, Warren Buffet gets an invitation to give inspirational talks to his employees during special occasions (Schroeder 2008, p 84). According to the transformational theorists, this activity is intellectual stimulation, which a leader uses to make the followers more creative and innovative in their work. These inspirational talks help the workers to reflect upon old times and look at them in new ways (Schein 1990, p.115)
The forums are also open to encourage the followers to question matters including their leadership. In such instances, a leader such as Warren Buffet stands out as a democrat in that he allows the people to even question his authority and act upon their worries.
Indirect management
Warren Buffet manages his businesses indirectly therefore giving ample time to the leaders he has entrusted with the management job. He is not involved in the details of running the business and therefore he only gives advice to the management. According to Pielstick (1998, p23), the situational theorists argue this behavior as a borrowed idea from their school of thought. Warren Buffet in this case only takes the responsibility of advising his followers when there are problems that need his immediate action or intervention (Schroeder 2008, p20). At other times he entrusts the decision-making to the management.
There are however other times when he has to issue instructions basing on his experience in the matter. This dynamism in the system of management stands out as situational leadership (Nissinen 2006, p24). The instructions that he issues are dependent on the level of maturity that the recipients who are members of the managerial team portray. Situational theorists argue that leadership behavior relies on the circumstances of the problem that is at hand. In these different times, Warren Buffets involvement in the management affairs of his businesses is either autocratic or democratic depending on the circumstances of the situation. One can regard it as autocratic during the times when he has to issue instructions or orders when the maturity of the followers on the matter is considerably low.
Motivational/ rewarding
Giving rewards or accreditation to followers after they have successfully attained the objectives of a given agreement is transactional. In this case, the leader assigns a given task to the follower or even obtains an agreement from the follower on what is worth doing in a particular task. According to the transactional theorists such as Bass (1998, p.619), when a leader promises either psychological rewards or material rewards to the follower for successfully handling a task, this stands out as Contingent Reward (CR).
Occasionally, Warren Buffet organizes events in his companies to reward the most successful people in making investments (Schroeder 2008, p86). During these times, the employees who have contributed to the success of given projects are recognized and awarded accordingly. On the other hand, the departments that did not perform well are in a way punished psychologically through not being recognized. In this manner, Warren Buffet qualifies as a transactional leader. The aim of the whole thing is to motivate productivity and innovation in the employees.
Al Gore
Leadership style in relation to Leadership theories and models
As a politician and a climate change activist, Al Gore stands out as a charismatic transformational leader. In most cases, the interests of the leader and those of the followers are not clear in this leadership style. This means that the achievement of the objectives of a given venture results in a win-win situation between the leader and the followers (Pfeffer & Sutton 2006, p 68). The position of the leader is in this case therefore not above the followers. By considering his activities and the manner in which he assumes the responsibilities of the position, Al Gore can fit in this category of leaders. This study aims at evaluating Al Gores mannerisms in his leadership in relation to the characteristics of transformational leadership behavior.
Servant leadership
The struggle against humanitarian dangers such as global warming means that if one can meet the objectives of the struggle, it will be a win-win situation for both the leader and the followers. Goleman et al. (2002, p91) compared what they referred to as servant leadership with transformational leadership and concluded that while the transitional leader aligns his interests with those of the followers, the servant leader places the interests of the followers before his. There is however the undeniable fact that both behaviors of leadership emphasize personal development and the empowerment of the followers (Rollinson 2005, p62). In other words, the two styles aim at facilitating the achievement of the followers. As a climate change activist, Al Gore passes for a servant leader in that he even sacrifices his personal interests for the benefit of his followers. As claimed by Gardner (1999, p.43), the capacity to understand oneself, to have an effective working model of oneself including ones own desires, fears, and capacities and to use such information effectively in regulating ones own life is of great use for a servant leader .
Directive and participative leadership
By often giving their leaders direction out of problems and crises, transformational leaders are in this way considered directive. People regard charismatic leaders as participative when they tend to give messages of hope to their followers, which aim at inspiring them to take initiatives and rescue themselves from their problems. As a charismatic transformational leader, Al Gore repeatedly takes the initiative of providing direction to his followers as well as preaching hope messages to them to arouse self-initiative.
Another way that a transformational leader can be termed as participative is when they are involved directly in solving the problems of their followers (West 2004, p45). Al Gore thinks that if people do not take the problem of global warming seriously, and major world polluters such as the United States fail to take the initiative, the repercussions of such problems will be most evident in the innocent people. In this case, he takes the initiative to bring together the people and actively participate in the fight for their well-being.
Social competence
The ability to inject humor into serious debates, as found by Goleman et al. (2002, p31), correlates with the transformational behavior of most civil activists, managers, and politicians. In this case, eloquence lays among the most important competencies that transformational leaders exhibit. Persuasiveness and social sensitivity form another great combination that correlates with transformational leadership. For one to be socially competent, it is very crucial that the person be a good listener and eloquent (Bass & Avolio 1994, p73). Al Gore manages to win the hearts of the crowds when he addresses them in political and climate change conferences through his social competence. It is by considering these attributes that he is considered a charismatic public speaker and leader. As posited by Goleman et al. (2002, p.62), a key role of leaders is to manage the emotions of the groups they lead. Emotional intelligence as portrayed by Al Gore amounts to social competence.
Envisioning
According to Bass and Riggio (2006, p.624), the transformational leader holds a vision that he tries to make a reality for his followers. It is this vision that guides his behavior as a leader. The leader then concretizes the vision, which makes the followers view it as worthy of a thing that raises their concern and efforts in trying to achieve it. It does not matter to the leader if the arousal of the followers concern is immediate or takes some time before its realization. The transformational leader does not fear defeat and is often willing to repackage his strategies and -peach his vision again to his followers (Mullins 2010, p156). Al Gore, as it is evident in his speech on the acceptance of the Nobel Peace prize in 2007, said that they have a purpose, they are many. For this purpose, they will rise, and they will act (Collins 2001, p79). In these words, it is clear that he aimed at making the followers feel that they share his achievements and that their struggle is heading in the right direction. As a result, people may not necessarily achieve the vision that the transformational leader holds after a short time of active struggle. All decisions reached even from groups have a risk percentage (Boak 2011b, p. 5). This explains why Al Gore and his followers never gave up on the struggle to push the US government to adopt climate change initiatives even after their efforts were shunned a number of times.
An analysis of how two leaders perceive their roles, and what has helped them develop as leaders
This part of the report compares the leadership styles that have been adopted by two proclaimed leaders namely Al Gore; who is a politician, an environmental activist famed for his struggle against global warming, and the great investor, the billionaire chairman of Berkshire Hathaway and philanthropist Warren Buffet. For the purpose of coming up with a good comparison in this report, we are only going to focus on Al Gores leadership as an environmental activist and as a politician.
The theories evaluated in this study are charismatic transformational leadership and democratic leadership. As a charismatic transformational leader, Al Gore seeks to persuade and convince his followers into adopting a particular mindset that he represents while on the other hand Warren Buffet as a democratic leader seeks to motivate his subjects by giving them all the space and resources they need to exhaust their potentials.
Considering their achievements in the different portfolios that they hold, it is will be unfair for anyone not to consider the two men as successful leaders. Al Gore, who happens to be the forty-fifth vice president of the United States of America, is a Democratic politician, an environmental activist, and a writer. In addition, al Gore is a renowned businessperson being the co-founder and chairperson of a number of organizations. Al Gores efforts to curb global warming made him acknowledged and awarded the prestigious Nobel Prize in 2007.
Warren Buffet is a famous American billionaire and philanthropist. From a tender age in his life, Buffet had a thing for investment and business. A buffet is the chair and owner of Berkshire Hathaway, which is a conglomerate of companies headquartered in Omaha. The buffet is a philanthropist considering his declaration to leave 99% of his wealth of about 50 billion dollars to a worthy course under that Gates Foundation (Hackman 2002, p45). Warren Buffet was in 2008 named by the Forbes magazine, as the worlds richest. Buffet owes this success to his style of leadership as chairperson of his corporation.
Discussion and Analysis
Warren Buffet and democratic leadership style
In his style of management, Warren Buffet has adopted a style that discourages his active influence in the management of his company. As a result, Buffet has entrusted the top executives of Berkshire Hathaway with the responsibilities of independently managing the organization (Powell & Robert, 1973, p.86). This style of leadership stands out as democratic in that it encourages a sense of competition among the various heads of independent companies. This in turn works to the benefit of the leader as the followers struggle to work to the maximum to achieve recognition and being rewarded (Pardey 2007, p23).
Although Buffets leadership style is less interactive compared to other leaders, it works in a big way since the subjects struggle for the motivation that they end up receiving at the end of the day. This style encourages accountability and responsibility among the subjects considering that they do not experience constant disturbances from the owner (Conger 2006, P 243). It is only until when one evaluates the performance of the individual companies that Buffet comes into the process. The sense of freedom that he gives to his workers makes them feel as if they are working in their own businesses which adds to their accountability and honesty. Without conducting a background study, one might think that a particular CEO is the owner of an individual company (Hackman 2002, p 47). Buffet has inspired this system to work in every part of his company, as there is the effective delegation of duties with every responsible person being able to recognize their limits.
Al Gores Transformational leadership
As evidenced through his numerous speeches, Al Gore seeks to influence, motivate, and call for the transformation of his followers to come together and confront an issue that threatens their well-being. For instance, in his Nobel Peace Prize acceptance
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