Introduction
Leadership is one of the critical elements in every organizational setup. The kind of a leadership in the organization determines its performance. There are various management practices which relate to the leadership styles. Managers are responsible for making decisions concerning the organizational operations. In making these decisions, the members of management team are required to comply with the requirements of the stakeholders who include customers, employees, suppliers, lenders, the government and community. However, individual employee differences have a great impact on the managerial practices, given that they are part of the internal stakeholders. Apart from leadership, change management is another critical process that must take place in an organization for the desired success to be accomplished. As such, it is important to come up with the most appropriate strategies for effective planning. This paper contains analysis and discussion of all the elements regarding leadership and change management. The paper also focusses on other elements like the legal aspect of staff management and performance monitoring and control. The analysis and discussion are done based on the situational theory of leadership.
Impact of Management Styles
Management styles have a great impact on the performance of an organization. The first impact is the profitability of the organization. If decisions are well made, and proper planning is done by the managers, then high profits are assured. Because the management team takes the lead role in any organization good leadership results in increased productivity. The second impact is the quality of products produced and services offered. Where the management is using the best style to lead its team, good quality products are produced and better services offered since subordinates are equally treated and motivated to work. Another impact is the growth and expansion of the organization. Management styles used impact how fast an organization can grow (Schoar and Zuo, 2017, p. 1436). Transformational leadership style, for example, leads to a fast growth rate as the management is focused on bringing positive change to the organization. Putting efforts toward positive transformation will lead to growth. A leader should apply the most appropriate style to produce the best output (Latham, 2014, p. 12). In situational leadership theory, the different management styles can be applied to different settings appropriately. The leader should choose what style is appropriate for each situation. For example, in a situation where the team members are experts, democratic style may be more appropriate. In other instances, where the leader is the most skilled person, then autocratic style will be the most effective.
Leadership vs. Management
Leadership and management are two different terms which are often assumed to mean the same thing, but they are different. Managing cannot be equated to leading. Managing involves dealing with complexity while leading involves dealing with change. Leadership involves setting direction and coming up with strategic plans on how to bring about positive change and growth in the organization while management involves coming up with steps to be followed and setting time limits for certain activities to be accomplished (Madanchian, Hussein, Noordin & Taherdoost, 2016, p. 20). Leaders portray a passionate attitude towards achieving the organization’s vision and the set goals while managers may have an impersonal attitude towards the set goals and visions. Leading a team will be affected positively by a leader other than a manager. This is because a leader is compelled by emotions and ensures the growth of the subordinates by motivating them to overcome challenges. The situational theory is more applicable to leaders than to managers as leaders are more flexible and thus able to handle different situations appropriately.
Individual Differences within a Team
All members of the organization portray differences as they are from different cultural backgrounds and they are exposed to different social and physical settings. Psychological differences result from different mind-sets and different attitudes towards certain things. This leads to different points of view from which different people base their reasoning. Social setting influences one’s character and behaviour. Social differences are evident regarding language group, religion, and race. Physical differences can also be noted within a team regarding colour and height among others. A team may also contain members who are physically challenged. The cultural background in which one has been brought up may influence how they work, how they communicate or even how they relate with others. A leader will, therefore, need to provide a common ground for every member so that to bring cohesion and also deal with the different people differently as stipulated by situational theory.
Employment Legislation
Rules and regulations govern every employment environment. These rules are a combination of rule sets by different regulating authorities and those set by the organization itself. The legislation is meant to bring cohesion between the trade unions, management, and subordinate staff. In the country, for example, by the National Minimum Wage Act 1998, every individual who is above 25 years old is entitled to a minimum pay of £7. 83, and the Working Time Regulations 1998 allows paid holidays up to 28 days (Dickens & Hall, 2006, p. 341). Leading a team requires familiarity and compliance with all the existing regulations. Rules are different, and they are all followed through differently according to the situational leadership theory.
Change Management
Changes will occur in management from time to time, and it can be a positive change or negative change. The old manager retiring and another staff member taking her position results in change. Change brings about new ways of doing things and a new way of handling issues. When a staff member takes up the lead role, it is less likely to hinge progress as the staff member is familiar with the organization’s objectives and goals. The major stakeholders of the organization should accept the strategy applied in change management, and this will help build readiness and capacity for adjustment (Amanchukwu, Stanley and Ololube, 2015, p. 10). When the old manager is planning to retire, she should start by informing the leadership team and the executive team so that they can make well-informed decisions regarding the change. Therefore, positive effects will be felt and improvements noted.
Reasons for change
Different reasons lead to change. One of the reasons for the change is an advancement in technology. New technology brings about new and more effective ways of doing things. Transitioning from the old ways of doing things to the new ways brought about by the new technology results in change. Identification of new opportunities which are likely to increase the performance of the organization will result in change as new ways will be adopted to pursue such opportunities. Retirement and retrenchment also bring about change as reorganization of the management team and the subordinates will be necessary (Hunter and Chen, 2011, p. 99). This is because there are gaps which are to be filled. Situational leadership is applicable in cases of change as flexibility leads to an effective transition.
Planning change
Planning change involves well-elaborated steps which are aimed at effective change in a system. Planning change first begins with having a clear picture of what should be achieved at the end of the process. After which one should collect data from relevant parties on their view toward the implementation of such changes. This will help in understanding the culture of the people to strategize a change plan to fit everyone. The study should include all levels of employees in the organization. Next, the manager should decide on what to be introduced to the organization and what to be left out. Planning change relates to leadership in that it is an activity conducted by a leader and which requires leadership skills for it. The practices involved in planning change approve the situational theory because the leader decides on what should be included in the change plan from the information obtained about the culture and expectations of the employees (Korsgaard, Sapienza and Schweiger, 2002, p. 502).
Reaction and effects of change
Reaction to change involves the employees stand on the impacted change. The effect of change refers to employees’ behavior and morale towards work and how it has been affected (Oreg, Vakola and Armenakis, 2011, p. 498). The new manager who is known well to other employees is likely to receive a positive reaction which may include strict adherence to the implemented changes. This is contributed by how employees view change in management as the organization’s next stage in life. Since the end of the previous regime was brought about by retirement then the change was expected therefore employees were psychologically prepared. It relates with leadership skills, whereby the acceptance of the new management depends on how the previous management prepared the employees. Proper preparation results in positive reactions and effects of change. The situational theory is approved by this because the positive reaction was achieved as a result of proper coaching of employees by the previous management.
Performance Management
Performance management refers to the process by which the manager and employees monitor, plan and review the organization working objectives. The manager of the organization is expected to implement the performance management system. This makes it necessary for the manager to coordinate with the board of directors and the shareholders for them to monitor his performance (Ferreira, and Otley, 2009, p. 272). This helps in ensuring that he conducts his duties concerning the organization’s expectations. The manager, in turn, monitors how employees perform their functions. Performance management is aimed at controlling the performance of a business by facilitating a healthy growth of the organization. The method used in performance management depends on the current situation of the organization as well as the set goals. Performance management is affected by leadership skills because it is an activity conducted by leaders. The situational theory is utilized in this step in that the methods of performance management are determined with regards to the current situation of the organization.
Approaches
Measuring the performance of an organization is an important practice in any functional organization. There are five approaches that are used in the measure of performance: the comparative approach, result approach, attribute approach, quality approach and behavioural approach (Draganidis and Mentzas, 2006, p. 59). The comparative approach involves the ranking of employees with regards to the performance of other employees. This method results in an employee being ranked as the highest performer and another one as the poorest performer. The techniques applied in this approach entails the use of graphic rating scale and fair comparison. Result approach mechanism involves rating employees by their performance results. It is a simple and straightforward technique which is guided by the results of the employee and the productivity of the employee. Attribute approach involves rating employees by the specific set parameters. These parameters include teamwork, communication, and judgment, the ability to solve problems, creativity and innovativeness. Quality approach is aimed at continuously satisfying consumers’ needs by achieving continuous service improvisation and reducing the errors made by employees during service delivery. In the behavioural approach, the performance of an employee is ranked by their behaviour. BARS and BOS techniques are used in this approach. These five performance measurement approaches relate to leadership since ranking activity is conducted by leaders. These approaches disapprove the situational theory in that in the approaches the leader is more of a boss than a partner.
Goals and Objectives
Performance management is aimed at improving and promoting employees’ effectiveness and teamwork. This is done by promoting a two-way communication system between the employees and the manager by coaching, counselling and appraisals (Kagioglou, Cooper and Aouad, 2001, p. 88). The main objective of the performance management is to boost employees’ performance by helping them in identifying the necessary knowledge and skills for effective performance. Leadership skills are required in the process of helping employees to discover the necessary skills for effective performance. The situational theory has been approved, whereby a leader partners with its employees through activities such as couching them with an aim to improve their effectiveness.
Control Mechanism
Control mechanisms play a critical role in the performance management of an organization. It ensures that the strategies of organizations are not over-utilized or under-utilized. Moreover, the control mechanism is required for the attainment of the organization’s goals in a pre-seen manner (Malmi, and Brown, 2008, p. 296). This is done through the use of regulations to influence decision making and performance. The control mechanism is highly dependent on leadership skills because it requires a leader to establish the right steps to be followed towards success. The situational theory is approved here because the current condition of the organization is used to determine which control mechanism to be used.
Recommendations
- Change management is critical and necessary for any organization to succeed in pursuing its set goals and objectives.
- When choosing a leader, it is important to consider their leadership and management styles. The leadership and management styles have a great impact on the organizational performance.
- It is also important to understand that, good performance does not determine success. The organizational success will require effective monitoring and control over the business performance. Poor performance monitoring and control can lead to collapse of the business.
- There are different performance measurement approaches but including the comparative approach, result approach, attribute approach, quality approach and behavioural approach. Therefore, it is necessary for the leader to determine the most appropriate approach before starting the performance measurement process.
- Finally, for a change to take place successful, the manager must first come up with clear plans and strategies on how the process will be implemented.
Conclusion
According to the above explanations, change is among the necessary requirements for a business to succeed. It is difficult for an organization to meet the intended goals and objectives without pursuing change. However, the effectiveness of change is also determined by the type of leadership. The leader is always responsible for the organization’s critical decision making. As such, the kind of a leader the organization has will always determine its performance. There are different kinds of leadership styles applied by different leaders. It can, therefore, be concluded that, though change management is good for performance improvement, such expectations cannot be achieved with poor management or leadership within the organization.
References
- Amanchukwu, R. N., Stanley, G. J. and Ololube, N. P., 2015. A review of leadership theories, principles and styles and their relevance to educational management. Management, 5(1), pp. 6-14.
- Dickens, L. and Hall, M., 2006. Fairness–up to a point. Assessing the impact of New Labour’s employment legislation. Human Resource Management Journal, 16(4), pp. 338-356.
- Draganidis, F. and Mentzas, G., 2006. Competency based management: a review of systems and approaches. Information management & computer security , 14 (1), pp. 51-64.
- Ferreira, A. and Otley, D., 2009. The design and use of performance management systems: An extended framework for analysis. Management accounting research , 20 (4), pp. 263-282.
- Hunter, M. and Chen, R. J., 2011. From Management to Sustainability: Strategies for Producers, Consumers, and Small Businesses. J. Mgmt. & Sustainability, 1, p. 99.
- Kagioglou, M., Cooper, R. and Aouad, G., 2001. Performance management in construction: a conceptual framework. Construction management and economics , 19 (1), pp. 85-95.
- Korsgaard, M. A., Sapienza, H. J. and Schweiger, D. M., 2002. Beaten before begun: The role of procedural justice in planning change. Journal of Management , 28 (4), pp. 497-516.
- Latham, J. R., 2014. Leadership for quality and innovation: Challenges, theories, and a framework for future research. Quality Management Journal, 21(1), pp. 11-15.
- Madanchian, M., Hussein, N., Noordin, F. and Taherdoost, H., 2016. The Relationship between Ethical Leadership, Leadership Effectiveness and Organizational Performance: A Review of Literature in SMEs Context. European Business & Management, 2(2), pp. 17-21.
- Malmi, T. and Brown, D. A., 2008. Management control systems as a package—Opportunities, challenges and research directions. Management accounting research , 19 (4), pp. 287-300.
- Oreg, S., Vakola, M. and Armenakis, A., 2011. Change recipients’ reactions to organizational change: A 60-year review of quantitative studies. The Journal of Applied Behavioral Science , 47 (4), pp. 461-524.
- Schoar, A. and Zuo, L., 2017. Shaped by booms and busts: How the economy impacts CEO careers and management styles. The Review of Financial Studies, 30(5), pp. 1425-1456.
