Psychology Of Work: Organizational Leadership Theories

In lieu of the changing business environments globally, companies strive to be competent enough to be able to respond to customer expectations, have sound and healthy relationships with all the stakeholders, have operations that are transparent and accountable and increase their bottom line fulfilling their commitment towards the sustainability of their business, environment and the community. The companies striving to achieve these objectives often struggle in doing so due to the lack of a proper vision and guidance from the leadership, which could be lagging in the required traits. Though the leadership style and strategies followed by various companies may be different, there are certain categories of organizational strategies, which are adapted for sustainable development and contribute to the growth and development of an organization.

Various organizations resort to multiple sustainable strategies and require specific skills and traits possessed by the leadership to execute them. As stated by Adams, Keloharju and Knupfer (2018), from an organizational point of view, effective leadership does everything that is required for the company in order to achieve its objectives along with the well-being of the workforce. Some of the common leadership theories are as follows.

Firstly; dealing with uncertainty, leaders who tend to take into account the changing environmental and social scenario, are much better in terms of organizational performance. The ability to deal with dynamic surroundings helps these leaders to manage the interdependence and complexities of the business along with the stakeholders, who play a major role in this uncertainty. The idea here is to place less emphasis on tools such as demand planning, forecasting, inventory and production control as well as allocate resources for the unexpected changes.

Valuing difference, as opposed to the conventional means of diversity in terms of age, gender, ethnicity leaders must recognize the role of external stakeholders apart from customers, suppliers and employees. As mentioned by Boxall, Guthrie and Paauwe (2016), the concept of “cognitive diversity” entails external teams and experts to provide fresh perspectives regarding the business on various aspects such as; new product development, advertising and marketing campaigns. This quality helps them to question the process critically and working of the company in regular intervals.

When Building a Relational Enterprise, successful leaders tend to emphasize on building long-term relationships with the stakeholders rather than a transactional one. Social accountability is at the heart of this function with a productive dialogue based approach and aim to align all the stakeholders’ goals and objectives with the firm in the long term. As supported by Darcy, Hill, McCabe and McGovern (2014), some leaders utilize the stakeholders’ participation in much more effective way and harness their abilities for new business ideas and innovation, thus enabling them to operate with transparency and accountability.

Social Accountability is when efficient leaders recognize their responsibility for the sustainable development of the company along with the social, political and policy environment they operate in. This can be done through two ways, Firstly working towards sustainable development at an enterprise and sectoral level, thus assisting them in greater say in the policymaking regarding their industry. Secondly, as opined by Glowacki‐Dudka and Murray (2015), it is done by adapting ‘new-age’ organizational procedures, such as balanced scorecard, vendors’ assessment and reward schemes, for sustainable environmental practices.

Organizational Inclusion is when leaders recognize the participative efforts of even those, who are not holding any honorary positions within the organization. As mentioned by Botelho, Powell, Kincaid and Wang (2017), rather than focusing on a set of employees, collective participation is encouraged to ensure that nobody is isolated. These measures signify a more responsive organization fostering listening skills, trust building and confidence enhancement among the employees. From an organizational perspective, effective and efficient leadership involved driving a set of employees to achieve a set of common goals and inculcating a sense of trustworthiness, cohesiveness and flexibility within them. As noted by Mustapha, Manan and Alwi (2017), certain leadership theories are put in place and followed for a sustainable growth of the organization and its stakeholders. The earlier of these theories focus on the distinguishable qualities and the later ones on some more situational factors pertaining to the organization.

The Great Man Theory is not really applicable with today’s dynamic business environment as it maintains that great leaders have inherent qualities and they cannot be developed over the course of time. Traditionally, recognized specifically with the male members of the society, it states that great leaders possess traits that accomplish the goals of the organization in sustainable manner regardless of the external factors.

Trait Theory maintains that certain personality and behavioral traits required for a sustainable growth are inherited by the leaders. These range from flexibility in operation to honesty and integrity including creativity, motivation and confidence to deal with adverse situations faced by the organization. Khalili, Ismail and Karim (2017) stated that such leaders are well equipped and talented to lead the firm to a path of sustainable development. However, the relationship between these traits and organizational effectiveness is an issue of debate in the current business scenario.

Contingency Theories of strategic leadership place emphasis on specific variables pertaining to the internal and external environment and does not restrict to an ideal style of solving problems. Contingency factors can be a mix of task-motivated as well as relationship motivated mainly pertaining to leader-employee relations, task structure, positional power and environmental impact.

Situational Theories do not follow a pre-defined model rather specific course of action if defined based on the situational and environmental factors. According to Amanchukwu, Stanley and Ololube (2015), it involved matching of the right leadership style from telling, selling, participating and delegating to the levels of competence and knowledge of the various individuals when dealing with a situation.

Behavioural Theories is the opposite of the Great Man theory and states that the leaders are identified by the course and selectivity of their actions rather than their intellectual qualities that is efficient leaders can be built up through training and observation. However, as criticized by Roome and Louche (2016), the leaders identifying themselves with the autocratic style often have issues pertaining to team performance in their absence whereas those adapting the democratic style have teams with positive feelings, are motivated and able to work even in the leader’s absence.

Participative Theory is where a leader encourages participation from the entire group instead of focusing on a definite person. As supported by Boxall, Guthrie and Paauwe (2016), this promotes the collaborative development along with increased feeling of relevance among the team members. The typical procedure involves openly sharing the knowledge and information, encouraging the team to share ideas and takes the best possible decision in line with the objectives in hand.

Transactional Management Theories as quoted by Sethibe and Steyn (2015), usually characterized by supervision over a set of pre-defined set of procedures, continuous monitoring and assistance of work by the leadership, ensuring standards of performance are met, and a contingent reward/punishment system based on the achievement or shortfall of goals. The leaders are generally action-oriented, highly aligned with the business, directive in nature and exploit their full leadership potential.

Transformational Theory as stated by Amanchukwu, Stanley and Ololube (2015), stands as the most prominent leadership theory for a sustainable development of the organization as well as the society. It aims to develop a feeling of seeing the greater good in the work by incorporating traits such as extrovert nature, self-confidence and a set of values. The leaders adapt strategies such as inspirational motivation, intellectual stimulation, idealized influence and individualized consideration. The companies following this approach as believed to have high degree of job satisfaction and organizational allegiance.

Skills Theory expresses that educated information and procured abilities are critical factors for achieving efficient leadership. As indicated by Vihari, Rao and Doliya (2018), his theory in no way, declines to recognize the association between acquired attributes and the ability to lead viably yet contends that scholarly abilities, a created style, and gained information, are the genuine keys to organizational performance in a sustainable manner. Along with any of the theories discussed above; sustainable leadership operates with a basic set of principles like ensuring social justice, environmental responsibility, developing human resources and imparting long-term success. As indicated by Bolden (2016), leaders may resort to multiple leadership styles like autocratic, bureaucratic, charismatic, transactional or transformational depending on the several factors such as firm size, personality traits, goals priority and decision making levels. Overall, a clear understanding of vision and consistency in the approach are dominant in achieving sustainable growth. At the end, all of this comes down to one single aspect which is achieving present day objectives and fulfilling demands without depleting future opportunities.

Conclusively, there is no simple way to deal with getting to be sustainable; it is a persistent procedure that requires basic self-examination, trustworthiness, continuous innovation, and risk taking ability. A business must to be set up to act naturally self-contemplating, censorious, and accountable about the entirety of its activities and related effects, and a business should to be inventive, moving past its usual range of familiarity. A business must also aim to be set up to apply the previously mentioned basic self-investigation, genuineness, innovation, and associated risks over all procedures, departments and functions of the business. Thus, sustainability is an overall change in outlook, rationality, perspectives, and practices of the organization as a whole. In conclusion, it is imperative to understand that sustainability consolidates a triple scenario in assessing organization performance; the ecological, social, and monetary effect of the business; likewise alluded to as planet, individuals, and benefit.