Business Leadership and Style
A leadership style is a leader's method of
providing direction, implementing plans, and motivating people. Various authors
have proposed identifying many different leadership styles as exhibited by leaders in the
political, business or other
fields.
4
Different Types of Leadership Styles
·
Positive and Negative Leaders or
Bosses.
·
There are different ways in which
leaders approach people to motivate them. If the approach emphasizes rewards,
the leader uses positive leadership. If the approach emphasizes penalties, the
leader is applying negative leadership. Negative leaders should be called
bosses rather than leaders.
·
There are three classes of
supervisory techniques – autocratic, participate or consultative and
free-rein and corresponding to these three techniques, there are three
management styles – autocratic, democratic and laissez- faire. To these one more
may be added-paternalistic style
·
Autocratic or Authoritarian leadership.
·
An autocratic leader centralizes
power and decision-making in himself. He gives orders, assigns tasks and duties
without consulting the employees. The leader takes full authority and assumes
full responsibility.
·
Autocratic leadership is
negative, based on threats and punishment. Subordinates act as he directs. He
neither cares for their opinions nor permits them to influence the decision. He
believes that because of his authority he alone can decide what is best in a
given situation.
·
Autocratic leadership is based
upon close supervision, clear-cut direction and commanding order of the
superior. It facilitates quick decisions, prompt action and unity of direction.
It depends on a lesser degree of delegation. But too much use of authority
might result in strikes and industrial disputes. It is likely to produce
frustration and retard the growth of the capacity of employees
·
Democratic or Participate leadership.
Participate or democratic leaders decentralize
authority. It is characterized by consultation with the subordinates and their
participation in the formulation of plans and policies. He encourages
participation in decision-making.
·
The Laissez-faire or Free-rein leadership.
·
Free-rein leaders avoid power and
responsibility. The laissez-faire or non-interfering type of leader passes on
the responsibility for decision-making to his subordinates and takes a minimum
of initiative in administration. He gives no direction and allows the group to
establish its own goals and work out its own problems.
·
The leader plays only a minor
role. His idea is that each member of the group when left to himself will put
forth his best effort and the maximum results can be achieved in this way. The
leader acts as an umpire. But as no direction or control is exercised over the
people, the organization is likely to flounder
·
Paternalistic leadership.
·
Under this management style the
leader assumes that his function is fatherly or paternal. Paternalism means
papa knows best. The relationship between the leader and his group is the same
as the relationship between the head of the family and the members of the
family. The leader guides and protects his subordinates as members of his
family.
·
As the head of the family he
provides his subordinates with good working conditions and fringe benefits. It
is assumed that workers will work harder out of gratitude. This leadership
style was admirably successful in Japan with her peculiar social background.
·
This leadership style has still
been widely prevalent in small firms in India. However, this paternalistic
approach is unlikely to work with mature adult employees, many of whom do not
like their interests to be looked after by a “godfather.” Instead of gratitude,
it might generate antagonism and resentment in the subordinates
Advantage:
Leads to Increase in Productivity
One of the advantages of leadership is that if leaders are able
to delegate tasks efficiently, they can help increase worker productivity. Good
managers are able to determine the strengths and weaknesses of different
employees and delegate work accordingly. Efficient division of labor can result
in higher work output, which ultimately results in higher sales and higher
profit. On the other hand, ineffective leadership can reduce productivity. For
example, if a manager decides to perform tasks that are easy, and delegates
difficult tasks to employees, it could result in sub optimal productivity.
However, a leader who understands how to assign work tasks that are tailored to
each employee’s skills and talents will often find that employees accomplish
those tasks more efficiently.
Advantage:
Boosts Employee Morale
The advantages of leadership aren’t just about productivity,
however, because sound leadership can also improve employee morale and make
workers more loyal to the company. Loyal employees trust their managers and may
be willing to work harder and stay with the company when times are tough.
Recruiting and training new workers can be expensive, so fostering high morale
through good leadership can have an impact on the bottom line. Good morale is
one of the biggest advantages of leadership because it fosters a feeling of
ownership and loyalty among employees.
Disadvantage:
Takes Time Away From Performing Tasks
One limitation of leadership is that ensuring that you’re
providing your employees with the resources and training they need is not a
productive activity. While spending time leading and instructing workers is
essential to make sure that they perform their duties well, managers do not
actually produce goods or services while acting as leaders. An entrepreneur who
hires a few employees might find that the time he spends performing leadership
tasks cuts into the time he has to spend communicating with clients and making
sales. In some instances, business owners handle this limitation of leadership
by hiring administrators to handle some of these tasks. The drawback, however,
is that high-quality administrators are expensive, which can dent a company’s
budget.
Disadvantage:
Fosters a Clash of Personalities
When you think about the pros and cons of being a leader, high
on the list is the fact that leaders and subordinates may not always see eye to
eye. This is one of the pros and cons of being a leader that you can’t avoid
because your workplace features different personalities that will not always be
in agreement. In fact, some businesses thrive on conflict because of the good
ideas that may come out of clashing viewpoints, but the problem in most
companies is that workers may feel that they cannot relate to their leaders,
and an "us versus them" mentality can develop. Disagreements between
managers and employees may result in disputes that waste time and reduce
productivity. Managers need to have excellent people skills and be able to
adapt their leadership styles to mesh with the personalities of different
employees.
Introduction
Different
methods the organizations used to measure success of their activities and
positing in the marketplace. Such as advanced methods either qualitative or
quantitative have been designed and employed practically like Balanced
Scorecard developed by Kaplan and Norton or other financial indices (ROE, ROA).
Moreover, since the 90’s there was no common and precise method to measure
business success. The activities are essential for companies and managed as
providing a value in their daily operations. Without these activities and
strategic policies cannot be executed, hence the strategy cannot be recognized.
Moreover, in the beginning time of project management which is one of the most
important functions in the modern management it amalgamates incompetent
manpower within the company. This philosophy demonstrated in the project
management as well, developed by the necessity for designing the policy and
plans. So the proper planning and carrying out the responsibilities referred a
project. The complexity and highly complicated in the business environment have
imposed the organizations to be more informed and liable to accept the changes
which are continuous and non-stop. The uncertainty of the business also needs
to be sufficient in participation in all levels of the organization. In addition there are
many strategic organizational assets like physical infrastructure, capital as
well human resource which is vital component
for organization. It has a key role in running smoothly the organization and
accomplishing its objectives. In the continuous changing and competitive world
market, the human resources become the most competitive advantage in the
business, if they have managed effectively and sufficiently, it may considers
as an evident that leaders have worthy effect on followers. The importance of
leadership style has increased in the every industry, and has a direct effect
on the development process with all its dimensions. So, the progress and
sustainability in the business regardless the nature of the sector assures the
overall development of local economy, especially in the emerging markets
Study framework.`
H1: Transformational leadership
style is positively impacted on business success.
H2: Transactional leadership style
is positively impacted on business success.
H3: Charismatic leadership style is
positively impacted on business success.
Factor analysis and reliability by
applying principle component analysis and Varian rotation, all observed
variables in the measurement scale were tested through exploratory factor
analyses (EFA) to discover their structures and convergences in the model. The
first exploratory factor analysis was applied for the dependent variable,
including six items, and the other EFA was for the group of independent
variables (transformational, transactional and charismatic leadership)
including 4, 3 and 4, items respectively.
Table 3: Summary of the independent variables.
Gender
|
Variable
|
frequency
|
Percent
|
Male
|
52
|
61.2
|
|
Female
|
33
|
38.8
|
|
Industry
type
|
Educational services
|
13
|
15.3
|
IT services
|
34
|
40.0
|
|
Business services
|
24
|
28.2
|
|
Manufacturing
|
14
|
16.5
|
|
Less than 3 years
|
29
|
34.1
|
|
Operation
years
|
4-6 years
|
36
|
42.4
|
Above 7 years
|
20
|
23.5
|
|
Secondary and less
|
26
|
30.6
|
|
Education
level
|
College degree
|
33
|
27.1
|
Undergraduate degree
|
31
|
36.5
|
|
Postgraduate
|
5
|
5.9
|
Table 3 explained the demographics variables of the participants in
this study. The number of male are more than female respondents (61.2%) which
means dominance male in creating and managing the projects which also reflect
weakness of supporting women in establishing their own businesses due to the
nature of oriental culture prevalent in Jordan, and the majority of the
respondents had an IT services nature business (40.0%), followed by business
services like recruiting agencies and manufacturing with 28.2% and 16.5%
accordingly. However, most of the respondents participating in filling the
questionnaire were had with 4-6 operation years (accounting for 42.4% of the
total) in the surveyed SMEs; most of owner or founders also co-founder had
undergraduate educational level with (36.5%).
Table 4: Profile of respondents.
|
|||||||||||||||||||||||
Table 4: Descriptive statistics.
According to the Table 4
above, transformational leadership style has the highest mean value
corresponding to 3.7588 and standard deviation value of 0.62122 interpreting
that transformational leadership style has good correlation with business
success. Followed by charismatic leadership styles which have 3.6541 mean value
and 0.71206 standard deviation and 3.3275, 0.71206 mean and standard deviation
respectively for transactional variable referring that this leadership style is
poorly correlated with dependent variable (business success).
Discussion
The Durbin Watson’s test is a
statistical test using in detecting the existing autocorrelation in the
residual (prediction error) in the regression analysis. It is named after James
Durbin and Geoffrey Watson conducted this test at the residuals in least
squares regression, and evolved limits tests for the null hypothesis which the
errors are uncorrelated compared to the alternative ones which also follow
first order autoregressive process. When value of Durbin-Watson test at 2,
means there is no autocorrelation, if the value close to 0, it means there is a
positive correlation and if the value approaching to 4 also means there is a
negative correlation. The rule of thumb is said that the good fit of the model
should be predicted by minimum of 60% variance in dependent variable which
makes it a good fit for the study and getting a value of adjusted R square
higher than 60%. Durbin-Watson’s test estimates the autocorrelation of the
residuals from the regression analysis which identify that the cut-off ranges
for Durbin-Watson’s test between 1.5 and 2.5.
Results from the research found that there was
a positive correlation between transactional leadership and project success.
The findings were also further found no relationship between Laissez faire
leadership style and project success. Moreover, the research explored a
relationship between leadership styles and project success. Charismatic
leadership style beta coefficient value is 0.142 with a significant value of
0.243 which is higher than 0.05, thus charismatic leadership is revealed to get
a negative significant impact on business success. This finding is not
consistent with Shea’s [66]
study, which one of main contributions of this study was the impact of
charismatic leadership on the performance of manufacturing task over a several
of attempts was investigated. The findings of this study also indicated that
employees working under leaders perform better than individuals who working
under charismatic leaders in the first attempt. As well the study of Sidra
which the data was collected from telecom sector in Pakistan and it was
secondary and qualitative study, the sample size was 100 respondents, it
concluded there was a relationship founded between charismatic leadership and
organizational performance moreover it realized that the ability and skills
have great role in creating follower’s committed work behavior and help
protrusion in crises conditions, demonstrating strategic objectives which lead
business to more successful and effective. Transformational leadership style
beta coefficient value is -0.021 with a significant value of 0.851 which is
higher than 0.05, thus transformational leadership is showed to get a negative
significant impact on business success. This finding is different to a study
conducted by Nubuor et al. [67]
showing that there was a positive correlation between transformational
leadership and banking project success in Ghana. This was due to the regression
model selected can predict about 59% of the variance dependent variable
(project success). The highest predictor of banking project success was
inspirational motivation followed by individual consideration.
Model
|
Unstandardized
coefficients
|
Standardized
coefficients
|
T
|
Sig.
|
||
B
|
Std.
Error
|
Beta
|
||||
1
|
Transformational
|
-0.018
|
0.094
|
-0.021
|
-0.188
|
0.851
|
Transactional
|
0.008
|
0.121
|
0.008
|
0.067
|
0.946
|
|
Charismatic
|
0.104
|
0.088
|
0.142
|
1.175
|
0.243
|
|
Dependent variable: Business
success.
Table 6: Coefficients.
The results referred that
transformational leadership had a negative significant impact on business
success. Therefore, transformational leadership style doesn’t produce a role in
creating success in the SMEs. H1: Rejected (Table 7). The findings
showed that transactional leadership had a negative significant impact on
business success. H2: Rejected. The results show that charismatic leadership
has a negative significant impact on business success. H3: Rejected.
Conclusion
The conclusions were abstracted from
analysis of the data collected from the surveys conducted by the researcher.
From these, it can be indicated that employees are not as well paid as they
would want, although the existence of great leadership styles develop their
success. Leadership with its types have an essential role in shaping the behavior
and attitudes of the subordinates as well staff. The field of leadership not
only aimed to analyze the interpersonal connections but also focused on the
role of a leader as a motivator. The objective of this study was to forming and
developing the understanding of modern and popular leadership styles in
selected companies in Amman city. The study found that most companies have same
styles of leadership. Based on the results, all leadership styles have
significant negative impact on business success. This indicates that when these
types of leadership when applied, the business success would not increase.
Therefore, Jordanian context leaders is invited to adopt and apply new styles
leadership and share all members in decision making process since it is
approved that business success was the best under several styles of leadership.
Jordanian leaders should root innovation and creativity which may lead success
in the business also increased productivity. The significant negative impact of
leadership styles on business success means that success of business would not
develop or increase when these styles of leadership are found.
Organizations need to get great
skilled and more professional leaders to lead their subordinates in everyday
activities in order to achieve the organizational strategic goals. Based on the
findings of this research, every leadership styles studied in this research had
negative on business success. The organizations who are interested to stay in
the competitive business environment, it is highly recommended to get the right
leader with great competences and experience as well influential effects should
be found in all levels of the organization, either in public or private sectors
in Jordan. Organizations in Jordan should also try to apply the recommendations
of the most important studies which examine and identify the role of leadership
in supporting and developing the companies. Organizations with good leadership
strength and ability will further achieve success not only in the business but
also in the personal scope; therefore, serious attention and concern should be highlighted
to make leadership an ultimate target and priority.
