A Definition of Leadership
Leadership can be defined in different ways based on ones’ particular perspective. For the people of Tibet their definition of know all and see all is one of the most charismatic leaders of our times, and that would be the Dalai Lama. Aside from the religious connotations associated with the Dalai Lama, he has that certain magnetic attraction or charisma, the personality trait that most leaders possess. Leadership in its utmost form is power, influence, goal attainment and process. One thing for certain, whether in the foothills of the Himalayas or on Madison Avenue in Manhattan, leadership occurs within and involves group involvement. Leadership in its’ basic definition is the ability to lead, and this action occurs in direct relationship to a common goal among groups (Northouse 1997). Leadership can be viewed from a personality perspective whereby the major influence of the leader relies on the ability to induce others to accomplish tasks by means of special traits or characteristics the leader may possess. Leadership can also be viewed from a behavioral aspect being directive, supportive, participative or achievement-oriented (Northouse 1997) based on the method of the leader as dictated by the needs of the organization.
Comparison of the Role of Manager versus Leader
In an organization where there exists a reduction of chaos, a smooth purring, well-oiled machine that operates effectively and efficiently, rest assure therein exists a good manager. Where does this manager get the drive, the ideas, and the motivation to strive for high goals? This influence comes from the leader of the organization. Take a person of power and influence, a charismatic personality and the ability to charm another into his way of thinking and his grand scheme of things and hence, a good leader has just been introduced. The individual described with all of the qualities listed, is the visionary of the organization, the leader. This individual is in place to create change and movement within the organization. This person motivates, inspires, strategizes, aligns people, and generally has excellent communication skills.
In comparison, the managers’ main goal is to provide order and consistency, plan, budget, organize, deal with staffing, control and problem solve (Kotter, John P. 1990). Management actually seeks order and stability where leadership seeks adaptive and constructive change to an organization (Northouse 1997). These are clearly two different positions but both very crucial to the well-being, efficiency and effectiveness in the competition and success of an organization.
The Three Issues in Contemporary Management Leadership
In our business environment today, whether private or public, the dominant driving influences are economical, political and technological (Green & Ciccotello 1997). Today’s society is witness to phenomena never envisioned or experienced by our predecessors, this phenomena being technology.
Technology has caused a shift in the center of the business world and has subsequently created a social impact in regards to the paradigm of the way our society lives. This influence in the field of Management and Leadership is crucial because of the existence of the Internet. Once thought of as a unique source to the public, the Internet is now common to every household and business, and available at the finger tips of school age children as well. Business is transacted million of miles away while ultimate trust is put into the competence of strings of technological energy. This adoption of the Internet based methodology has been a hot topic of discussion for the past few years, along with a few others, which it spearheaded. Many
Experts now feel the Internet should be regulated by the government and that it lacks adequate security for its’ users. Other experts argue that clearly the Internet is our future and it is a tool for growth, expansion and business opportunity.
The Adoption of Internet-based Methodologies
The adoption of Internet-based methodologies, the social impact of re-engineering economics, and the globalization of service outsourcing are paramount forces in corporate America today. The explosion of the Internet created challenges for corporate America that explored areas beyond the use of Email and file transfers. According to Woods and Scully organizations had no choice but to reorganize, re-engineer and adapt to the new world of technology as its’ major driver in order to stay competitive. Some businesses no longer required a physical establishment with the introduction of E-commerce. Some companies however are both Internet based and have physical establishments, better known as “click and brick.” For the businesses that no longer required physical businesses, jobs were eliminated increasing the rate of unemployment but at the same time drawing out those with specific technological niches.
The acceptance of the Internet in business proved to be a driver for competition. Other businesses were forced to adapt
their organizations to the use of the Internet requiring re-engineering of their organizational structure. According to Bill
Gates it is necessary for leaders in organizations to adapt the practices of technology allowing the trickle down effect to take place with subordinates following the examples of their leaders. This adaptation of the Internet business practice would begin with Email use among members of the organization beginning with the leader. According to Gates companies should use electronic protocol as opposed to any type of paper correspondence with regard to communication (Gates, William 1999) to stay abreast of technology, thus operating more efficiently, and cost effectively and maintaining the technological edge. Gates’ suggestion is that organizations should eliminate the use of paper correspondence and use their company Intranet as a primary source of communication and dissemination of information. This method has certainly proven to be more effective as well as efficient particularly with large businesses.
The Internet has changed the way the world does business and the way people communicate in general. Decision makers that have adopted technology are the ones that set new business models redefining business and linking business to consumers (Wurster, Thomas 1999). In “Blown to Bits”, Wurster contends that the ability to connect consumers with businesses by way of the Internet and large amounts of information totally alters how strategies must be modeled by businesses, as opposed to the old paradigm of seeking to balance the reach of the mass and the richness of information. According to Wurster this theory is now blown to bits thanks to the Internet. This is now an information-driven economy, and with the existence of the Internet, access to this information definitely dictates engagement of business with economic laws of supply and demand.
The Social Impact of Re-engineering Economics
The current impact of the tragedy that occurred on September 11, 2001 has forced practically every organization in America into a position of reorganization and re-engineering. There are many displaced workers today as a result of the economic impact of this tragedy.
Prior to September 11th, our business world had already begun to re-engineer due to changes in technology. With re-engineering the job market is swamped by large numbers of displaced professionals, some of whom have been replaced by temps at a lower rate of pay or their jobs have been totally eliminated due to downsizing. Many of the workers that have been laid off have been in the positions they held for many years which puts them quite possibly in a position of having limited skills in a particular niche area. These employees are now faced with reinventing themselves through reeducation, quite possibly at their own expense and find themselves reentering an overly swamped job market. This leaves the displaced employees with a feeling of distrust for Government, abandonment and job security anxiety (Bennis, Warren 1985). This leaves many workers in a negative, depressed, hopeless frame of mind and certainly eliminates any thoughts of corporate loyalty to workers.
There are several ways of redesigning and re-engineering, however workforce reduction strategy is equivalent to throwing a grenade into a crowded room, closing the door and eliminating a number of head count. Activities of this nature are usually offers of early retirement, transfers and outplacement, golden parachutes, attrition, job banks, buyout packages, and if all else fails, the extreme solution is layoffs and firing (Huber & Glick 1995).
According to Green and Ciccotello the majority of businesses choose to respond to this more volatile environment by the approach of reducing their operating leverage. This is done by the elimination of a percentage of full-time salaried employees and reduction in fixed costs such as property and plant equipment as well. The authors also contend that these cuts are not always good, as in the experience of Honda Motor Company. In the mid-1980’s Honda made cuts in its permanent engineering staff in response to a volatile sales environment leaving them in a noncompetitive situation. They were no longer able to keep pace with the other designers of new automobiles leaving them with a loss of market share and profit, with which they are still trying to catch up to be competitive.
Looking at a public sector such as the government the consequence of cutting cost too far could create major issues. According to Ciccotello and Green cuts in permanent staff and infrastructure in an enterprise such as the Department of Defense could reduce efficiency and eventually even hurt the deterrence and readiness of the department. Should the demand occur where permanent staff levels were too low, this could serve to impair the ability of America to defend itself. For a situation such as this there would be no quick-fix option, either by adding fixed costs, or attempting to build a new staff as it would take time to build facilities as well as to train the necessary people to fill such positions.
The Globalization of Service Outsourcing
Companies around the world are using temporary agencies for outsourcing today as options to having full time employees. To the corporations of today full time employees are not necessarily assets anymore. In fact, full time employees are considered to be a troublesome and costly asset. With full time employees, employers have the responsibility of providing costly employee benefits, whereas with temps this would not be necessary. It appears that more and more private firms are using temps and cutting permanent staff. The suggestion of Donna J.S.Peterson, and Norm O’Meara is that the outsourcing attempts focus more on services provided by competitive markets for the greatest cost savings.
The negative side to terminating full time employees is the repercussions that are reactive to the termination. There are costly severance payments, threats of lawsuits, as well as the costs associated with restructuring (Ciccotello and Green 1997).
According to Michael Corbett an outsourcing specialist, outsourcing is a central management tool for the fundamental re-engineering and re-energizing of America’s businesses. If corporations are to compete successfully in today’s global economy, the concept of outsourcing must be embraced. Corbett feels it is this reality that makes outsourcing an exciting marketplace in the U.S. Simply put this is buying services from external providers at a reduction in cost. The result of this is a self-sufficient organization that is being replaced by interdependent organizations focused on core competencies. With
this new concept, new classes of business-to-business services emerge as exciting opportunities and new industries entering these markets and providing services.
Some argue that with outsourcing the fear of companies dominating based on size is eliminated, however that doesn’t mean that these companies cannot and will not dominate their competition. It is stressed however that core competencies are certainly the new areas of competitive advantage.
In Corbett’s eyes outsourcing does however enable executives in these corporations to focus more on the “what” and less on the “how” of their specific business. For most corporation executives one of the most compelling reasons for outsourcing is that much of management’s resources and attention is diverted from other important issues due to the “how” types issues they would have to deal with if not outsourcing. Any decisions grid locked in middle management creates financial and opportunity costs that will eventually effect the future of the company. Corbett refers to Peter F. Drucker in 1989 as stating that in-house service and support activities are de facto monopolies and have little incentive to improve their productivity. There is after all, no competition and outsourcing may be the only way to achieve this in some arenas.
References
Bennis, Warren, “Managing People: Is Like Herding Cats,” Provo, Utah: Executive Excellence Publishing, 1999) 161.
Bennis, Warren and Bert Nanus, Leaders: Strategies for Taking Charge, 2nd ed., (1985; New York: Harper Collins,
1997) 188.
Ciccotello, Conrad S. Major & Green, Steven G. (1997). Government Executive Magazine, “Industry’s Downsizing
Lessons.” (On-line). Available: http://www.govexec.com/reinvent/downsize/0795mgmt
Corbett, Michael F. (1997). Outsourcing: The US Business Revolution. (On-line). Available: http://www.corbettassociates.com/resources/researchl
Gates, William. (1999). Business @ The Speed of Thought: Using a Digital Nervous System. New York: Warner Books
Inc.
Huber, George P. & Glick, William H. (1995) Organizational Change and Redesign. New York: Oxford University Press.
Kotter, John P. (1990). A Force for Change: How Leadership Differs From Management. Free Press.
Northouse, Peter (1997). Leadership Theory and Practice. Thousand Oaks, California: Sage Publishing.
Peterson, Donna J.S., O’Meara, Norm (1996). Department of Defense Outsourcing Baseline. (On-line.) Available:
http://www.nara.gov/alic/trainvid/bpr13.html
Woods, William. Scully, Arthur B. Scully, Arthur. (1999). B2B Exchanges: The Killer Application in the Business-to-
Business Internet Revolution. New York: ISI Publications.
Wurster, Thomas. (1999). Blown to Bits: How The New Economics of Information Transforms Strategy. Boston
Massachusetts: Harvard Business School.
Reference:
- Bennis, Warren, “Managing People: Is Like Herding Cats,” Provo, Utah: Executive Excellence Publishing, 1999) 161. Bennis, Warren and Bert Nanus, Leaders: Strategies for Taking Charge, 2nd ed., (1985; New York: Harper Collins, 1997) 188. Ciccotello, Conrad S. Major & Green, Steven G. (1997). Government Executive Magazine, “Industry’s Downsizing Lessons.”; (On-line). Available: www.govexec.com/reinvent/downsize/0795mgmt Corbett, Michael F. (1997). Outsourcing: The US Business Revolution. (On-line). Available: www.corbettassociates.com/resources/researchl Gates, William. (1999). Business @ The Speed of Thought: Using a Digital Nervous System. New York: Warner Books Inc. Huber, George P. & Glick, William H. (1995) Organizational Change and Redesign. New York: Oxford University Press. Kotter, John P. (1990). A Force for Change: How Leadership Differs From Management. Free Press. Northouse, Peter (1997). Leadership Theory and Practice. Thousand Oaks, California: Sage Publishing. Peterson, Donna J.S., O’Meara, Norm (1996). Department of Defense Outsourcing Baseline. (On-line.) Available: www.nara.gov/alic/trainvid/bpr13.html Woods, William. Scully, Arthur B. Scully, Arthur. (1999). B2B Exchanges: The Killer Application in the Business-to- Business Internet Revolution. New York: ISI Publications. Wurster, Thomas. (1999). Blown to Bits: How The New Economics of Information Transforms Strategy. Boston Massachusetts: Harvard Business School.
