Leadership Literature Review - Part 2

...continued from Part 1

2.5 Transactional & Transformational Leadership Theories :

The modern leadership theories of transactional-transformational leadership is considered one

of the influential leadership theories of the last two decades (Bass 1985, 1990 ; Burns 1978 ).

Transactional leadership is task-oriented while transformational leadership is relationship-oriented

involving interpersonal dimensions between leaders and followers. In the 1980s, research into

contingency leadership continued, but there was also a re-emergence of discussions on innate traits and

characteristics of individual leaders due to the argument that whilst there are many leadership styles

that can be learned and adopted by leaders, it is still undetermined as to how some individuals tend to

naturally come out as effective leaders.

Transactional Leadership

Transactional leadership is a directive of MacGregor's Theory X leadership such as the

authoritative leadership style. Transactional leadership underscores the significance of the relationship

between leader and followers, focusing on the concept of exchange between leaders and followers

Bass and Avolio, 1993).The transactional leadership style is frequently applied by managers. It focuses

on managerial skills such as rules and procedures to accomplish expectations . The leader motivates

followers by the prospect of rewards or the threat of penalization in return for task completion (Bass

1990). Cooperation with followers occurs as a result of negotiations and commitment is bought with

reward to the followers. Thus, transactional leadership clarifies expectations and provides recognition

when goals are met. A transactional leader is characterized as has someone with high confidence and is

usually commanding and more fixated on the task.

The main limitation in the transactional leadership theory is the assumption that, employees are

motivated by only reward and punishment, and hence they obey leader's orders. Although,

transactional leadership gives consideration to follower's needs, they do not provide opportunities for

obtaining follower's motivation, satisfaction or loyalty (Northouse, 2007; Nahavandi, 2006).

Irrespective of this disadvantage, transactional leadership is still remains a popular choice among many

managers. For example, transactional leadership is appropriate as Transactional leadership is suitable

in a crisis situation where urgent resolution is required (Nahavandi, 2006).

Transformational Leadership

The central concept of the transformational leadership is the ability of a leader to inspire greater

performance from the followers to surpass their own individual aspirations for the benefit of higher

organizational goal (Burns, 1978 ; Bass,1996). Transformational Leadership relates with MacGregor‟s

'Theory Y ' leadership style.Transformational leaders provide their followers with a sense of purpose

that surpasses the typical 'exchange of rewards for effort ' paradigm by inspiring their followers,

communicating and orienting followers around their vision, fostering creative ideas, and being sensitive

to the follower's needs (Bass & Avolio, 1993).

The transformational leadership theory revisits trait theory by underlining the impact of personality

characteristics of effective leaders and their role to appeal and transform their followers.

Transformational leaders are visionary, charismatic, inspirational and sensitive to individual needs

(Bass, 1985). The transformational leadership theory differentiated between leaders and managers by

introducing “vision” and “charisma” as an important leadership characteristic.Transformation leaders

use these two key attributes to inspire and arouse strong emotions among their followers towards the

goal (Bass, 1985).

• Visionary Leadership:

The key concept in transformational leadership is change, and the role of leadership in

envisioning and carrying out the change to transform the organizational performance.

Thus, the transformational leaders acknowledge a need for change, can create a vision,

communicate their vision to the followers and inspire them to achieve a desired change.

• Charismatic leadership:

The word ‘charisma’ means “an inspired and devine gift” (Nahavandi, 2006). Charisma

is an innate attribute which is a source of great power that has a profoun emotional effect

on their followers (Northouse, 2007; Nahavandi, 2006). Charismatic leadership has three

core behavioral competencies. They are vision, empathy, and empowerment (Choi,

2006) The envisioned behavior motivates the follower's need for achievement, empathy

motivates the follower's need for affiliation and the empowerment behaviour motivates

the followers need for power . Thus, according to Choi (2006), these three behavioral

competencies of charismatic leadership are the motivational factors for generating

personal commitment to the leader and transforming their followers to go past their selfinterest

for the benefit of the organization. It is acknowledged by many that the

charismatic leadership is a powerful model for influencing followers (Choi, 2006).

According to Bass and Avolio (1997), transformational leadership is based on four essential

attributes :

•  Idealized influence : It is the ability of the leader to engage the follower's emotions to emulate leaders vision and are committed to and make sacrifices for the leader’s vision (Bass and Avolio, 1997). For a leader to possess idealized influence, the followers must be able to see that the leader's vision as something they aspire to do . Leaders with these attributes are regarded as role models, are highly admired, have a high level of self-confidence, self-esteem, and self determination.

• Inspirational motivation: It is the ability to stimulate followers by building self-assurance and enthusiasm to give a sense of meaning to the followers that encourages them to accept implement the leader's vision . Leaders with these attributes provide emotional appeals to inspire and increase awareness of mutually desired goals (Bass and Avolio, 1997).

• Intellectual stimulation is the ability to challenge followers assumptions and encourage exploration of leader's vision. Leaders encourage followers to challenge their own values and beliefs and encourage to come up with creative solutions for problems, thus forcing them to discover and extending their capabilities (Bass and Avolio, 1997).

•  Individualized consideration is the leader's ability to pay special attention to followers needs, i.e., facilitate support, direction and encouragement, and acting as mentors to obtain enthusiasm for the leader's vision. Leaders with such attributes would foster mutual trust with their followers and contribute in the development of an emotional attachment between leaders and their followers.

The above four attributes in the transformational leaders can elevate their followers to a higher level of

needs defined by Maslow’s hierarchy of needs (Burns, 1978).

2.6 Conclusion:

A review of the leadership literature uncovers an evolving series of approaches used to

understand leadership, starting from the Trait based theories such as “Great Man “ theories to modern

leadership theory such as “Transformational” leadership theories. The early theories tended towards

viewing leadership in terms of 'trait' implying that leaders are born, whereas later theories began

viewing leadership as a 'process' implying that the leadership can be learnt.

Until the 1940s, trait based theories were the primary theory of leadership which sought to

identify the key innate characteristics of successful leaders. With the belief that people with such key

traits could then be selected and recruited as leaders positions. The problem with the trait approach

was that the results of the trait studies were inconclusive.There was little consistency on the exact set

of traits that made a successful leader, however, some traits did appear more frequently than others.

An alternate viewpoint to the trait theory for leadership was the “Behavioral “ Theories that

focussed on the study of behaviours of leaders as opposed to their innate characteristics. The

importance of concept in the behavior theories was that it suggested that leadership behaviors can be

learnt and adopted by individuals

Critiques of the behavioural theory, argued that the style approach ignored the situational

factors. Whilst behavioural theories can help leaders to adopt a particular leadership style, they give no

direction as to what represents effective leadership in different situations. This led to the development

of situational-contingency theories which suggested that the leadership style is dependent upon

situational factors such as the relationship with followers, the task structure, power of the leader and

other contingent variables.The situational-contingency approach to leadership is based on the

assumption that there is no one best way of leading and that a leadership style that is effective in one

situation may not be effective in others.

In the 1980's , the modern leadership theories of transactional-transformational leadership

were introduced which recognized the significance of the relationship between leader and the

followers. Transactional leadership is task-oriented and has been the traditional model of leadership

with its roots from the ‘rewards for compliance’ exchange model that obtains expected results from the

followers, whilst ‘transformational leadership’ is relationship oriented and introduced leadership

attributes that inspired greater performance from the followers to surpass their own individual

aspirations for the benefit of higher organizational goal , thus obtaining extraordinary results from the

followers. However, both transactional leadership style and transformational leadership styles are

needed (Bass & Avolio, 1993). Also, transformational leadership theories introduced “vision” and

“charisma” as the key component of the Transformational leadership, thus bringing back the

importance of traits to part of the modern leadership theory .

From the 1930’s to the present day, leadership theories has evolved substantially from the early

trait based theory to the modern transformational leadership theory. However, it is important to note

that all of the four generations of theory attempt to depict the behaviors of effective leaders, be it through the perspective of traits and innate abilities or skills are learnable.

Read More

Leadership Literature Review - Part 1

2.1 Introduction

Leadership is difficult to define, but is one of those qualities that is well recognized when we see it.

Northouse (2007) and Nahavandi (2006), defined leadership as the process of influencing the followers

in helping them understand and guiding them towards achieving a common goal.

Leadership has been researched and studied from a variety of perspectives. Early research on

leadership focussed on individual traits that differentiated leaders based on their appearance and

personality characteristics. Finding that inherent traits did not fully explained leaders' abilities,

researchers began focussing on behavioral aspects which examined the influence of leaders' behaviors

rather than their personality traits. Subsequent leadership research revolved on contingency theories

that studied the connection between situational variables and leader behaviors. Later on modern

leadership theories like transactional leadership, based on command and control model and the

transformational leadership which emphasized visionary and charismatic leadership style has been at

the forefront of leadership research. Since the 1930s, there have been predominantly four main

‘generations’ of leadership theory that focus primarily on the more traditional, individualistic views of

the leader:

• Trait based theories (1930s -1940s).
• Behavioral theories (1940s-1950s).
• Situational and Contingency theories (1960s).
• Transactional and Transformational theories (1970s).

2.2 Trait based Theory :

Traditionally leadership in the early years has been associated with defining leadership concept

in terms of the innate abilities that was common among leaders and which distinguished them from

non-leaders. Such trait theories explained leadership based on innate personality traits that lead people

naturally into leadership roles. These theories were influenced by the 'Great Man Theory' which argued

that effective leadership is dominated by specific individual characteristics based on the belief that

leaders are exceptional people, born with innate qualities, and destined to lead (Northouse, 2007).

The trait based approach drew attention to the particular innate qualities of the leaders and tried

to explain leadership in relations to individual's personality and character traits, thus in essence,

suggesting leaders were born and leadership is art. Trait based theories focussed on identifying

individual traits of leadership by analyzing physical and personality attributes of individuals such as

physique, appearance, intelligence, self-confidence, drive, and other qualities makes in order to gain

understanding and identifying the combination of key traits that made an individual a successful

leader. The belief was that, if such set of key leadership traits can be known, then individuals with

such traits can be identified and recruited into leadership roles.Stodgill (1974) conducted research on the role of traits in leadership, but could not findconclusive evidence on the definite set of traits needed for an individual to become a good leader.

However his research did conclude that some qualities appeared to be associated with leadership more

often than others such as drive, self-confidence, intelligence, risk-taking, vigor, ability to influence and

willingness to accept responsibility

The main critic of trait based theories is that it suggested that leadership is an innate ability

which cannot be developed by learning, but it failed to offer clear distinctions between leaders and nonleaders(Northouse, 2007). The second critic is that it ignores the impact of the situation (Nahavandi,

2006). The theory assumes that there is a definite set of traits that makes a leader effective in all

situations, i.e. , the same set of traits would work in a military setting as well as in a factory setting .

This led to later research which emphasized that effective leadership arises from behavior and it

involves interaction with other people.

2.3 Behavioral Theory :

Compared to the trait theory, the behavioral theory views leadership from the leader's

behavioral perspective, in lieu of selecting leaders based on their innate qualities. By late 1940s

Leadership researchers dissatisfied with trait theories shifted their interest in leadership behaviors to

explore what leaders actually do . Behavioral theory introduced the leadership style approach that

focused on what and how leaders behaved (Northouse, 2007). Leadership style is the pattern of

behaviors engaged in by the leader when dealing with their followers .The style which leader adopt is

commonly based on combination of their beliefs, ideas, norms, and values. This style approach suggestedthat leadership is composed of two general kinds of behaviors; task-oriented behaviour and

relationship-oriented behaviours. The central intent of the style approach is to explain how leaders

combine these two kinds of behaviors to influence followers in their efforts to reach a goal (Northouse,

2007). Different patterns of leadership behaviours or styles manifested by leaders were observed and

identified . These patterns can be narrowly grouped under the two leadership styles. They are

'autocratic' or 'authoritative' style versus 'democratic' or 'participative' style, which is based on the

contrasting viewpoints of McGregor’s 'Theory X' & 'Theory Y' of worker motivation (Nahavandi,

2006) . It can be therefore viewed as that a leader holding 'Theory X' assumptions would opt for an

autocratic style, whereas one holding 'Theory Y' assumptions would opt for a participative style.

Autocratic orAuthoritative style;

In the Autocratic or Authoritative style, leaders make and enforce decision on to their followers

by rewards or threat. Their concentration is on a stricter control of task completion and do not

entirely trust their followers . The leader takes authoritative dominance over followers, and

announces decisions expecting followers to carry them out without question. Leaders who

exhibit such qualities have been commonly described as aggressive, dominant, forceful,

independent, daring, self-confident and competitive (Northouse, 2007).

Democratic or Participative style;

In the Democratic or Participative style, leaders share decision-making with their followers.

Although the leader will make the final decision, a democratic or participative leader will invite

his followers to contribute to the decision making process.The leaders delegate tasks and have

complete trust in their followers on task accomplishment. Leaders who exhibit such qualities

have been commonly described as having trust in their followers and less controlling

(Nahavandi, 2006).

The behavioral theory suggested that leadership can be learnt and everyone is capable of becoming

a leader. The main critic of behavioral theory is that it ignores the context in which these different

leadership style are used. The styles that leaders adopt can be affected by the environment they are

working within, and those they are working with. However, despite this limitation, behavioral theory

provided useful insight on how we understand leadership.

2.4 Situational & Contingency Theory :

Compared to behavioral theory which narrowly focuses on the leadership style, the

situational-contingency theory includes effects of contingent factors such as leader's behaviors,

follower's behaviors and other situationally contingent variables. Whilst behavioral theories may help

develop specific leadership behaviours, they give little attention to the situational factors, suggesting

that no one leadership style is appropriate under all circumstances. This led to the development of

situational-contingency leadership which argues that there isn't a single appropriate leadership style that

is appropriate across a variety of situations. The theory shoes that the effectiveness of any leadership

style is dependent on the situational factors, and hence the leader must adopt different leadership style

based on the situational context. For example, in some situations an autocratic or task-oriented style

may be most appropriate, whereas some situation may require a participative or relationship-oriented

styles approach. The aim of the situational-contingency leadership research was to identify several

different leadership styles and the types of situations in which they could be effectively adopted.

There were many leadership models and frameworks offered by contingency theory researchers.

Contingency theorist such as Fiedler explained that a leader’s effectiveness is determined by three

factors (Northouse, 2007) :

• Relationship between leaders and followers: The extent to which leader has support and loyalty of followers.
• Task Structure : The extent to which the task is clearly specified to goals, methods and performance standards.
• Leader's Power: The extent to which the leader has power for the purpose of influencing and getting the task completed.

Tannenbaum and Schmidt (1958) and John Adair (1973) offered alternative approaches to

situational leadership. According to Adair’s (1973) framework, depending on the situational context a

leader must give appropriate attentions to the task completion, the welfare of the team and the

development of the follower. Tannenbaum and Schmidt (1958), presented a continuous spectrum of

leadership styles consisting of four main styles; autocratic, persuasive, consultative and participative

styles. This model suggests that a leadership behaviour can vary along this range of continuum

leadership styles based on the consideration given to the situational factors

In general, the situational-contingency leadership theories makes us to think about what leaders

do across a variety of situations and the degree of their ability to direct their followers. What

distinguishes this approach from behavioral style approach is that, the situational-contingency approach

sees leadership as a process that happens within a situational context, whereas the trait and behavioral

theories sees leadership in terms on individualistic abilities.

…continued in  Part 2

Read More

Leadership of Steve Jobs: Connecting theory into practice - Part 1

Introduction :

Leadership has been researched and studied from a variety of perspectives. Early research on leadership focussed on individual traits that differentiated leaders based on their appearance and personality characteristics. Finding that inherent traits did not fully explained leaders' abilities, researchers began focussing on behavioral aspects which examined the influence of leaders' behaviors rather than their personality traits. Subsequent leadership research revolved on contingency theories that studied the connection between situational variables and leader behaviors. Later on modern leadership theories like transactional leadership, based on command and control model and the transformational leadership which emphasized visionary and charismatic leadership style has been at the forefront of leadership research. Despite the depth and breadth of the debate concerning the effectiveness of leadership, leadership still remains a debated topic. Although no single perspective is taken as entirely accurate, nor can they be taken as entirely irrelevant either. As a result, the answer to most effective leadership still remains unclear.

To better understand the effectiveness of various leadership theories, this paper will first review the various leadership theories and then illustrate leadership in practice by analyzing leadership patterns in organizational leadership and behaviors of their successful leader (Issacson, 2008), Allen (2011), Kahney (2008) and many others consider Steve Jobs as a phenomenal leader. Jack Welsch called him “Most successful CEO today” (Elkind, 2008). This paper will thus focus on analyzing Apple's leadership under its CEO Steve Jobs, with emphasis on the leadership style and qualities exhibited by him during his tenure as CEO.

Leadership Theories :

Leadership is one of those qualities that is difficult to define, but easily recognizable when see it. Buchanan & Huczynski (2010) defined leadership as the process of influencing the followers towards setting goal and goal achievement. Since the 1930s, there have been predominantly four main ‘generations’ of leadership theory:

• Trait based theories (1930s -1940s).
• Behavioral theories (1940s-1950s).
• Contingency theories (1960s).
• Transactional and Transformational theories (1970s).

Trait based Theory :

Trait based theories focussed on analyzing physical and personality characteristic of individuals in order to gain understanding of the combination of traits that are common among leaders. In essence leaders were born and leadership is art. These theories were influenced by 'Great Man Theory' which argued that effective leadership is dominated by individual personality characteristics (Buchanan & Huczynski, 2010 , p.599). For example, qualities such as intelligence, self-confidence, drive, sense of responsibility, risk taking and other values makes an individual a good leader.

The main critic of trait based theories is that it ignores the impact of the situation. The theory it assumes that there is a definite set of traits that makes a leader effective in all situations, i.e. , same set of traits would work in military setting as well as in a factory setting. This led to later research which emphasized that effective leadership arises from behavior and it involves interaction with other people.

Behavioral Theory :

Compared to Trait theory, Behavioral theory looks at leadership from the perspective of a leader's behavior rather than selecting leaders based on their personality characteristics. This theory suggested that leadership can be learnt and everyone is capable of becoming a leader. Different patterns of leadership behavior or styles were identified. However, they all can be broadly grouped under the two leadership styles:

• Authoritative Style;

In this style, leaders impose decision and motivate followers by rewards or threat. They do not completely trust followers and focus is on tight control of task completion.

• Participative Style;
  In this style, leaders share decision-making with others. Focus is on delegation and leaders have complete trust and confidence in the followers for getting the task completed.

The main critic of behavioral theory is that it ignores the context in which these different leadership style are used. The styles that leaders adopt can be affected by the environment they are working within, and those they are working with. However, despite this limitation, behavioral theory can still provide useful insight on how we understand leadership.

Contingency Theory :

Compared to behavioral theory which narrowly focuses on the leadership style, the contingency theory includes effects of contingent factors such as leader's behaviors, follower's behaviors and other situational variables. This theory argues that there is no one right way of leading and that a leader must adjust their style depending on the context. According to Fiedler's contingency theory, a leader’s effectiveness is determined by three things (Buchanan & Huczynski, 2010 , p.610) :

• Relationship between leaders and followers: The extent to which leader has support and loyalty of followers.

• Task Structure : The extent to which the task is clearly specified to goals, methods and performance standards.
• Leader's Power: The extent to which the leader has power for the purpose of influencing and getting the task completed.

The contingency leadership theory makes us to think about what leaders do in a variety of situations and the extent of their capability to direct their followers.

Transactional & Transformational Leadership Theories :

Contingency leadership theory does not address the needs of the followers nor the followers individual feelings. The modern leadership theories of Transactional & Transformational leadership adds an emotional argument that engages the follower.

Transactional Leadership

Transactional leadership emphasizes the concept of exchange between leaders and followers. The leader motivates followers by the promise of rewards or the threat of punishment in exchange for effective task completion (Buchanan & Huczynski, 2010 , p.618). The transactional style of leadership is most often used by managers.

The main limitation in Transactional leadership theory is the assumption that, employees are motivated by only reward and punishment, and hence they obey leader's oreders. Despite this limitation, Transactional Leadership is still a popular approach with many managers. In practice, there is sufficient truth in the transactional based approach due to the effects of the individual's physiological and safety needs per Maslow's hierarchy of needs.

Transformational Leadership

The transformational leadership theory revisits trait theory by underlining the impact of personality characteristics of effective leaders and their role to appeal and transform their followers. The transformational leadership theory differentiated between leaders and managers by introducing “vision” and “charisma” as an important leadership characteristic . Transformation leaders use these key characteristics to inspire and evoke strong emotions among their followers and enable them to share their vision (Buchanan & Huczynski, 2010, p.618). Besides being visionaries, transformational leaders are said to value the human resources of their organizations, thus adding the emotional intelligence attribute.

According to Nahavandi (2006), transformational leadership is based on four attributes:

• Idealized influence is the ability of the leader to engage follower's emotions to emulate leaders vision.
• Inspirational motivation is the ability to provide a sense of meaning to the followers in sharing of the vision.
• Intellectual stimulation is the ability to challenge followers assumptions and encourage exploration of leader's vision.
• Individualized consideration is the leader's ability to pay special attention to followers needs, i.e., facilitate support, direction and encouragement.

In the past 80 years, leadership has digressed considerably from the early trait based theory to the modern transformational leadership theory. Transformational leadership is a popular leadership concept today especially when change is considered as critical for business growth and survival. The current environment characterized by uncertainty and instability requires transformational leadership to lead and transform the organization when circumstances demand. However, it is important to note that the trait based theory which was originally discarded is shown to be important by the transformational leadership theory as there are set of traits that are always found in transformational leaders. The transformational theories were evolved out of behavioral and contingency leadership theories. Nevertheless, these four generations of theory, all attempt to describe the behaviors of successful leaders. Apple, Inc is an excellent example to demonstrate the organizational leadership in practice and how its CEO, Steve Jobs, lead the company from the brink of bankruptcy to become the most valuable company (Investor Relations 2012).

Read More

Leadership of Steve Jobs: Connecting theory into practice - Part 2

..continued from Part 1

Leadership in practice :

Steve Jobs co-founded Apple Inc, formerly Apple Computers in 1976 (Investor Relations, 2012). Much of Apple's success has been due to the leadership of Steve Jobs. Creativity, visionary leadership, charismatic leadership and ability to adapt to change marks Apple's success under Steve Jobs. Steve Jobs thus has all the necessary attributes and characteristics to be considered as an exceptional leader.

Steve Jobs and Trait Theory :

Steve Jobs easily fits with the “great man” theory of trait leadership. He possessed distinguishable personality characteristics that made him an effective leader. Some of the personality traits that make him unique are;

• Self-confidence: Steve Jobs always believed that he was making a difference. He had commented that “People don't know what they want”, and relied on his intuition rather than focus groups or market research (Isaacson 2012). He is known for standing by his decision in the face of opposition.

• Intelligence : Steve Jobs was regarded as a genius (Isaacson 2012). Apple's innovative products are examples of his intelligence coupled with visionary and self-confidence characteristics.

• Drive : Jobs was a very driven man. When Jobs got fired from Apple in 1985, he could have easily retired as he was a multi-millionaire back then, but instead went on to create two new, very successful companies in “Pixar” & “NeXT”. It is his drive and sense of responsibility that pushed him to live up to what he promised. At the same time Steve Job's drive can be described as entrepreneurial. An entrepreneur is characterized as someone with high degree of enthusiasm, visionary and a risk taker (Nahavandi, 2006).

• Enthusiasm: Steve Jobs was very energetic and passionate on what he did, as he said “I was lucky – I found what I loved to do early in life” (Jobs, 2005). His speeches always indicated a large degree of enthusiasm. One of the last speeches he gave in March 2011 for the “ipad2” launch, just a few months before his death was full of enthusiasm for that new product.

Steve Jobs as Transformational leader:

Steve Jobs is the only CEO of this generation who has successfully transformed four different industries: computing (the Mac), music (the iPod and itunes), mobile phone (the iPhone), and movies (Pixar). In this sense he is an example of transformational leader. Jobs was perceived as charismatic with a clear vision, ability to inspire others and passion for Apple, Inc. These qualities are prerequisites of transformational leaders (Buchanan & Huczynski, 2010, p.618).

• Visionary leader;
  Apple Inc, led by Steve Jobs has proven itself at giving customers what they want before they know they want it. (Kahney, 2008). He had an uncanny ability to communicate his visions which led to incredible first-of-a-kind products like itunes, ipod, iphone, ipad. Job's vision of Apple products as more than productivity tools turned into a world phenomenon opening the eyes of industry and general population alike.

• Charismatic leader;
  Steve Jobs is extremely charismatic. He is known for his ability to captivate the audience’ attention during his speeches. He is seen as an idol and role model in the eyes of many people (Elkind, 2008). His charisma enabled him to motivate his employees to achieve more by transcending their own self-interest for the sake of Apple. His vision, and his ability to communicate it are the main attributes that makes Jobs to be perceived as charismatic.

However, he does lack the “Individualized consideration” attribute of a transformational leader. Steve Jobs is well-known to be arrogant and difficult to work with (Elkind, 2008 ; Kahney, 2008;Taylor ,2009). Especially in team meetings, Jobs leadership style tended towards screaming and humiliating employees who disagreed with his ideas. He made them work 90 hours weeks, and brutalized when they do not accomplish a huge task on a small deadline (Allen, 2011). He probably believed in being a belligerent leader as he acknowledges ”These are all smart people I work with, and any of them could get a top job at another place if they were truly feeling brutalized. But they don’t.”(Issacson, 2012)

Steve Jobs as Transactional leader :

Even-though, Steve Jobs had plenty of transformational leadership attributes, he was also known for his task oriented style.

His behavior in meetings can be perceived as authoritative. He was a micromanager and according to Elkind (2008), he maintained close control of the day-to-day affairs of his business. Jobs admits that he had up to 100 individuals reporting directly to him which is rare for any CEO (Isaacson,2012). He did not seem to trust all of his employees. Apple is well known to be very secretive when dealing with the outside world, but it is equally secretive within. Apple employee's electronic security badges are programmed to restrict access to different areas of the campus (Kahney, 2008). The employees often have no insight on what their own company's various departments were up to.

It is these traits in Jobs, the micromanagement, control, and lack of trust in his employees that characterize him as a transactional leader.

Jobs’ leadership is difficult to categorize because his patterns and behaviors fit many of the leadership theory. He definitely possessed a unique combination of special traits and inherent leadership characteristics. The power of his personality makes him an ideal candidate for the trait theory model implying that leaders are born and leadership is art, not science. However, Steve Jobs was also a composite leader in a way, that he has shown that his leadership is situational as his leadership behavior  varied depending on circumstances. Steve Jobs faced a lot of different market situations during his career as the CEO and he has succeeded in all by adapting his organization based on contingent factors. He was both a transactional and a transformational leader. He might lack the trait of being sensitive toward the employee's emotional needs but Jobs’s rudeness and tyranny behavior were accompanied by an ability to be inspirational (Allen, 2011; Kahney, 2008).

Conclusion :

In summary, we have seen how early research on leadership searched for special traits and inherent characteristics to identify naturally born leaders. Subsequent research looked at leadership from the complex situational and contingency factors and how leaders emerged in these contexts. Leadership theories progressed from static to dynamic considerations and from viewing leadership as art to leadership as science .

Looking at Steve Jobs leadership legacy, we can recognize that none of the four ‘generations’ of leadership theory can be considered as mutually exclusive alternatives. Leadership may be something of an art; but it definitely requires the application of specific techniques to be effective. Steve Jobs has pursued all four theories in a balanced manner and I believe his leadership style was a key factor in Apple’s success.

References :

<Removed>

Read More

CASE STUDY: RyanAir, Strategy Analysis - 2012

1 INTRODUCTION

Ryanair was founded in 1985 with only two aircrafts and a single Dublin-London route . By

2010 Ryanair had transformed itself into Europe's leading low cost airlines with 232 aircrafts flying to

153 destination. Ryan Air's strategic objective has been to offer the lowest possible air fare to its

passengers and strive towards becoming europe No.1 Low Cost airlines. In this paper we will explore

and analyze Ryanair's competitive position, strategic capabilities and sustainability of its strategies.

2 COMPETETIVE POSITION

2.1 PORTER'S FIVE FORCES FRAMEWORK;

Threat of New Entrants: LOW

• High entry barrier due to large capital requirement, longer procurement and marketing period.
• Restricted airport slots availability.

Threat of Substitutes: MEDIUM

• Threat of alternative mode of transportation like high-speed train and ferries within Europe.
• Customers can easily switch to driving.

Buyer's Bargaining Power: MEDIUM

• Customers are price sensitive.
• No customer loyalty as customers can easily switch to another airline offering lower price

Supplier's Bargaining Power : HIGH

• Entire fleet is made up of Boeing aircrafts.
• Fuel prices are fluctuating.
• Regional Airports can increase the fees.

Internal Rivalry : HIGH

• Highly competitive Low Cost market with Easyjet, Aer Lingus,etc.
• Easy to imitate the Low Cost model by a Full Service airline.

2.2 PESTEL ANALYSIS;

Political: HIGH

• Political stability within europe but risk of tighter regulations.
• Airport Security restriction and enhanced passenger screening measures.
• Risk of labour law changes.
• Airport subsidies dependent on regional/local government.

Economical:HIGH

• Eurozone financial crisis, economic downturn.
• Rising and uncertainty in fuel cost.
• Falling US Dollar.

Social Cultural: LOW

• Change in consumer travel lifestyle and demographics.
• Customer environmental awareness.
• Increase in discretionary income, making air travel popular.
• Business travelers forced to fly in Low-cost airlines due to slowdown.

Technological:LOW

• Increase in aircraft R&D resulting in newer fuel efficient and quieter aircrafts.
• Internet technology helps to lower operational costs and create new business opportunities within the airline industry .
• Technological growth in the cheaper high-speed trains, ferries services.

Environmental:LOW

• Laws to curb Carbon footprint and global warming concerns.
• Airport curfew regulations for controlling noise pollution.

Legal:MEDIUM

• Potential lawsuits against the legality of subsidies received from regional airport governments.
• Allegation on misleading advertisements.
• Potential lawsuits on passenger discriminations (fat tax, wheelchair fees).

2.3 SWOT ANALYSIS;

Strength:

• Strong Brand Recognition as a low cost leader.
• Cost conscious corporate culture with innovative cost reductions.
• Flight punctuality due to operational efficiency.
• First mover advantage and high experience curve.
• Modern and uniform fleet of aircraft.
• Happy Employees

Weakness:

• Negative publicity
• Poor customer service, so customers are coming to Ryanair only for the value for money.
• Does not fly to major airports.
• Regional airports limits passenger market.

Threats:

• Full Service airline can easily start a low cost spin-off.
• Substitute mode of transportation like Cars, Trains & Ferries.
• Pressure to unionize.
• Fuel Price fluctuations.

Opportunities:

• Expanding tourism industry.
• Eastern european expansion.
• Gain further market share by introducing medium haul destinations in eastern europe.

From the PESTEL and Porter's Five Forces analysis, it is evident that Ryan Air is operating in a

highly competitive and unfavorable business environment. The biggest macro environment threat

facing Ryanair is the political environment and fluctuations in fuel prices, both of which are not in

Ryanair's control.

From the SWOT analysis, Ryanair strength is being the leader in low cost airline industry.

However this cost leadership has come at the expense of customer service. Ryanair should improve its

customer service to build customer loyalty. Ryanair faces threats from competitors and substitutes

mode of transportation, but should seize opportunities in the eastern European expansion.

3 STRATEGIC CAPABILITIES

Strategic Capabilities and Competitive Analysis;

Resources Competencies

Threshold Capabilities

• Aircrafts
• Employees
• Financial resources
• Point-to-point short haul flights
• Flying to secondary airports
• Online booking system with www.ryanair.com

Competitive Advantage Unique Resources

• Management and leadership of Micheal O'Leary.
• “Ryanair” Brand name

Unique(Core) competencies

• Innovative cost cutting
• Alternative revenue generation

Ryanair’s Strategic Capabilities and Competitive advantage can be attributed to its Unique

Resources and its Unique(Core) Competencies;

Management and Leadership:

Michael O'Leary, the CEO of Ryanair is instrumental in the Low Cost Strategy of

Ryanair. Some of the most creative cost cutting methods implemented in Ryanair came directly

from him. He has been effective in exploiting and managing the core competencies of Ryanair.

By developing the human and Social capital overtime, the cost cutting culture is embedded

throughout the organization.

Ryanair brand :

Ryanair has built a strong brand based on cost. The Ryanair brand sends a simple, consistent

and compelling message, i.e low cost.

Innovative cost cutting method:

The heart of Ryanair's strategy involves reduce cost at wherever possible and pass the

savings to the customer with low ticket prices. All the activities in its operations are designed to

increase efficiency and reduce costs. To achieve this Ryanair had to continuously come up with

very Innovative Cost reduction methods across each and every stages of its supply chain. For

example by offering a very few services at the airport, like limited airport check-in facilities or

removal of baggage transfer, Ryan Air doesn't have to have personnel in these areas.

Lower customer service cost and elimination of ticket agent fees by high utilization of

internet to sell tickets.

Ryan Air uses only single type of aircraft, Boeing 737. By having a uniform fleet, it has

helped to lower its maintenance costs and time. This reduces cost in maintaining only fewer

inventory of aircraft maintenance parts and training of maintenance engineers. Also engineers

have become experts in this aircraft and contribute towards innovation on aircraft efficiency.

Having fleet commonality helps with quick and flexible cabin crew and pilot assignments.

Ryanair flies offers only point-to-point route and flies to less expensive secondary

airports which charges lower airport fees. Since these airports are not very congested, Ryanair

can attain fewer delays and higher turnaround times.

Ryanair employs a non unionized workforce. Ryanair employees are tied to performance

related salary model which forces high productivity among employees.

Alternative revenue generation/Ancillary Revenue:

Ryanair's ultimate goal is to offer free flights by generating revenue through other

means. It has constantly been creative in finding new sources of revenue onboard their flights.

Some examples of this are inflight advertisements, on-board shopping and gambling, pay-perview

television. All the flight attendants get commission on the items they sell onboard.

Customer amenities like food and beverages, airport checkin, baggage checkin and any other

additional passenger service is charged higher than normal. RyanAir currently generates non-air

revenue from third party service provides like car rental, hotel reservation, travel

insurance,ground and rail transportation which it sells on its website.

4 SUSTAINABILITY OF STRATEGY

A corporate strategy is sustainable as long its competitive advantage is maintained. Ryanair will

undoubtedly face challenges in the future, however its strategy is sustainable because of its unique

resources of 'Ryanair Brand', 'Cost Conscious Management ' and its core competency of ‘Innovative

cost cutting strategy’.

RyanAir's goal is to offer the lowest ticket price and establish itself as a leader in the European

low cost airline market by focussing on cost cutting and achieving operational efficiency. Ryanair's

corporate policies are all based on cost cutting. Irrespective of whether Michael O'Leary stays or not,

the low cost culture is deeply embedded throughout Ryanair’s organization and this culture is

sustainable. Ryanair's management and employees have continuously come up with creative and

innovative ideas to cut cost throughout its value chain. Also, throughout the years Ryanair has built up

a huge low cost operations experience curve which will help it sustain in the future.

Ryanair brand is synonymous with low cost airline. The Ryan Air brand along with its market

dominance gives it a huge bargaining power that will help it to sustain it’s low cost operations. Ryanair

has been the most profitable airline and is financially stable to counteract any uncertainty. Now that

Ryanair is a leader in low cost airlines industry, it can benefit from economies of scale, corporate

infrastructure to achieve lower costs and higher profits.

Read More