Leadership, Change and Responsibility - Joop Remmé - ebook

Leadership, Change and Responsibility ebook

Joop Remmé

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Opis

This book is written from the authors's teaching experience within MBA programs, where the focus has been on the realities of the students and their striving to be better able to succeed in those realities. This has lead to the combining of certain issues, which present themselves to the manager as dimensions of complex problems. Those issues are traditionally discussed within separate academic disciplines, in which the authors are well-versed, which are addressed once the starting-point has been found in managerial reality. There is a reason why these topics present themselves to the manager in unison: they do interact, in theory as well as in practical reality. Those issues are not just interesting to ponder over, but they require solutions and it is especially in the solutions that they have to connect. Leadership is an increasingly important subject because of the challenges which require leadership of some sort. Those challenges are more often than not characterized by change or the need for change. Change can be something that happens to someone, or something which is conducted and benefited from; the later case is where people show leadership in being on top of the change. On top of the change, one has to benefit from what is not in change, such as the capabilities and competencies that form the building blocks of a new strategy. Strategy and operations are increasingly expected, both by forces outside of the organisation as well as by forces from within it, to act from a sense of responsibility. Increasingly, various elements in society call for such responsibility, while also issues have arisen which involve management in far reaching challenges, even to life itself on this planet. This closes the circle for this book, as those challenges require leadership of a type not common in the past.

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Maastricht School of Management Series in Intercultural and Global Management

LEADERSHIP, CHANGE AND RESPONSIBILITY

Edited by: Joop Remmé Stephanie Jones Beatrice van der Heijden Silvio De Bono

Meyer & Meyer Media

Maastricht School of Management Series in Intercultural and Global ManagementSeries Editors: Ronald Tuninga & Fred Phillips

British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library

Remmé, Jones, van der Heijden & De Bono

Leadership, Change and Responsibility

Oxford: Meyer & Meyer (UK) Ltd., 2008

All rights reserved, especially the right to copy and distribute, including the translation rights. No part of this work may be reproduced—including by photocopy, microfilm or any other means—processed, stored electronically, copied or distributed in any form whatsoever without the written permission of the publisher.

© 2008 by Meyer & Meyer (UK) Ltd.

Adelaide, Auckland, Budapest, Cape Town, Graz, Indianapolis, Maidenhead, New York, Olten (CH), Singapore, Toronto

Cover Design: Mana co, The Netherlands

eISBN: 9781841264509

E-Mail: [email protected]

www.m-m-sports.com

CONTENTS

Introduction to the Series

Chapter 1: Leadership, Change and Responsibility in Organizations

Robert Flood

Chapter 2: Leadership-Evolution and Tradition

Stephanie Jones

Chapter 3: Leadership-New Challenges and Realities

Stephanie Jones

Chapter 4: Strategy and Structure

Quang Truong

Chapter 5: Organizational Design-Principles

Quang Truong

Chapter 6: Organizational Design-Structures

Quang Truong

Chapter 7: Organizational Development and Change

Silvio De Bono & Stephanie Jones

Chapter 8: The Process of Organizational Change

Silvio De Bono & Stephanie Jones

Chapter 9: Managing Change

Silvio De Bono & Stephanie Jones

Chapter 10: Ethics and Corporate Social Responsibility

Joop Remmé

Chapter 11: Issues Within Corporate Social Responsibility–New Challenges and Realities

Joop Remmé

Chapter 12: Corporate Social Responsibility and Sustainability–The Global Challenge

Joop Remmé

Chapter 13: Connecting what Has Preceded

Joop Remmé

MAASTRICHT SCHOOL OF MANAGEMENT

SERIES IN INTERCULTURAL AND GLOBAL MANAGEMENT

Series Editors Ronald Tuninga and Fred Phillips

Volumes To Date

Stephanie Jones, Khaled Wahba, and Beatrice I.J.M. van der Heijden How To Write Your MBA Thesis: A Comprehensive Guide for All Masters’Students Required to Write a Research-Based Thesis or Dissertation (2007)

Joop Remmé, Stephanie Jones, Beatrice I.J.M. van der Heijden and Silvio De Bono Leadership, Change and Responsibility (2008)

Stephanie Jones and Silvio De Bono

Managing Cultural Diversity (in press)

INTRODUCTION TO THE SERIES

This series makes excellent, affordable textbooks available to students in emerging and developing countries. By emphasizing the international, multicultural, sustainability, and social responsibility dimensions of management, and by giving special attention to change issues in transitional economies, these volumes aim to define the way management subjects can be taught to multicultural audiences. Our goal as editors is to have the series seen as the imprimatur of the best textbooks in the field, and thereby influence the future of teaching international business.

Targeted readers include MBA students in MSM’s overseas outreach programs, students enrolled in other universities, and practicing managers in many countries. Our authors write for readers who wish to be world-class managers, whether in their home countries or abroad, whether for indigenous companies or for multi-nationals.

We nonetheless believe it is not fair to such readers to frame all content in terms of problems and persons representing only business in the OECD nations. Volumes in the series therefore depict business situations drawn from many of the countries where MSM is active. We have chosen authors with broad experience on multiple continents, and specifically in emerging economies and developing countries.

We do not assume readers have access to the books, periodicals, databases, research journals, and fast reliable Internet connections that are taken for granted by MBA students in the OECD countries. Thus, each textbook in the series is a self-contained course on its topic. Each book is suitable for a condensed course format, but also allows teachers the flexibility to use the book for online or face-to-face courses in other formats. For more than a half century Maastricht School of Management (MSM) has focused on international cooperation. As a key player in the global education field, MSM is one of the few management schools that systematically combine education, technical assistance and research in its professional services. Offering high-quality management degree programs (MSc, MBA, DBA and PhD) and executive programs, MSM also implements management development research and international projects. With more than 2000 students graduating each year in nearly thirty countries, MSM is the largest and most international business school of the Netherlands.

MSM has worked for years at the interface of public- and private-sector management of transition processes in culturally diverse environments. Our guiding principle is the enhancement of performance of the private and public sectors to support balanced economic development. MSM provides technical assistance and specific training to government agencies, semi-government agencies, NGOs, post-secondary education institutions and the private sector, including small and medium enterprises. MSM offers graduate programs at campuses in China, Egypt, Germany, Indonesia, Jordan, Kazakhstan, Kenya, Kuwait, Malawi, Malaysia, Mongolia, Russia, Namibia, the Netherlands, Peru, Rwanda, Saudi Arabia, Suriname, Tanzania, Uganda, Vietnam, Yemen, Zambia, and Zimbabwe.

Ronald Tuninga and Fred Phillips

CHAPTER ONELEADERSHIP, CHANGE AND RESPONSIBILITY IN ORGANIZATIONS

ROBERT FLOOD

LEARNING OBJECTIVES

To highlight the main issues dealt with in the book and their relevance to modern day management.

To introduce the purpose, structure and contents of the book.

To introduce the four main themes Leadership, Organizational Design, Change Management, and Corporate Social Responsibility.

To emphasize interrelatedness between the four main themes and the need for a systemic approach to Leading Change in Organizations.

CONTENT

An introduction to contemporary issues/problems of Leading Change in Organizations.

An overview of what is required to tackle issues/problems of Leading Change in Organizations.

An overview of four key approaches to Leading Change in Organizations:

Leadership

Organizational Design

Change Management

Corporate Social Responsibility.

A systemic approach to Leading Change in Organizations (a stakeholder approach).

The structure and content of the book and how the book will realize a systemic approach to Leading Change in Organizations.

INTRODUCTION

The industrial revolution in the mid 18th to the mid 19th centuries changed the nature of industry and society. Prior to the industrial revolution organizations were small tightly knit groups of people serving their local communities. Such small enterprises were an important driver behind the development of local and national economies. A typical enterprise of the pre-industrial revolution era is one built upon a craft, like furniture making, weaving, and blacksmithing. There was also the family enterprise, for example a provision store, a locksmith, and a farm. Such organizations were small, employing just a handful of people, and thus were easy to lead, had simple structures like master craftsman and apprentice, and were easy to control in terms of managing people and maintaining quality. So effective were these organizations that in some cases their products are still available today and are highly prized. Some furniture from the preindustrial era is robust and attractive and sells at incredible prices in modern day auctions. All this changed with the Industrial Revolution. All of a sudden a new kind of organization emerged-the factory. What was effective in small enterprises was barely relevant to this new form of economic activity. Factories enabled mass manufacturing of products but to do this many people were employed in one organization and vast amounts of materials had to be handled. How could the mass of people and materials be organized into an efficient and effective force rather than collapse into an anarchistic maelstrom? The answer was found in leadership and design.

An organizational design was needed to structure people and their work. Two main issues surfaced. First was the task of designing operational processes and making them efficient. The second was designing administrative systems by which to manage and control all factors of operational processes so that the enterprise was effective at achieving strategy and goals.

EARLIEST IDEAS

The earliest ideas on efficiency are found in works like Frederick Taylor’s scientific management followed by Henry Ford’s version called Fordism. The central idea was to split up processes into parts and train people to become specialists in one activity. It was believed that specialization that aligned workers to a specific or limited task would lead the workers to become most proficient and ultra-efficient in the work they performed because they would perform the tasks many times leading to perfection or, from a capitalists perspective, greater efficiency and profit.

Earliest ideas on effectiveness are found in organizational design and the seminal design solution, the hierarchical tree. In this structure there would be workers, supervisors and managers. The three-tiered hierarchy put in place clear lines of authority. Hierarchy quickly evolved into a functional structure and over time spawned specialist management activities including finance and accounting, personnel and human resources, and sales and marketing. Effectiveness would come through management setting and implementing policy and goals and supervisors watching closely over the workers to ensure goals were achieved. Workers would be motivated by financial rewards-‘the economic man theory’.

SOLUTION

This solution remains the dominant one in modern day management and that it survives today in a post-industrial revolution era, sometimes called the information revolution era, is surely testament to strengths inherent in hierarchical management and specialization in job design. The solution also has hit very many serious problems. Here are a few of them:

Hierarchical decision-making is the basis of bureaucracy that combined make for long and convoluted decision-making processes that slow down organizational activities rather than deliver quick and effective support to operational activities.

Hierarchy led to functional silos out of touch with each other and consequently poorly coordinated organizations.

Workers felt alienated and more like a cog in a machine rather than a human being in a social activity. Supervisors and managers treated workers as cogs. This caused conflict and strife that in extreme circumstances resulted in the formation of unions to protect workers and strikes as their main defense weapon.

Routine repetitive work for workers led to boredom and inefficiency rather than perfection and high efficiency in performing tasks. Human needs had been neglected.

Lines of authority originated from a few senior managers at the top of the hierarchy and this became understood as a power structure resulting in centralized management. Centralized management further alienated the workforce and made life at the top extremely stressful because top managers became overwhelmed with information, requests and demands that flowed upwards only stopping when reaching the top.

In the early to mid 1900s management attained a foothold as a main topic studied by professional researchers in academia and soon these points and many others fuelled heated debate. Emerging out of the storm was a better understanding of the organization as both an economic and social activity, although there were strong disagreements between contrasting and sometimes contradicting schools of thought. Hot topics were those of leadership, organizational design, change and change management, and corporate social responsibility and ethics.

THE MODERN ERA

The modern era in which we live has spawned many different types of organizations that are far removed from small craft enterprises and factories, from small, to medium-sized, to large organizations and, the ‘monster amongst all beasts’, the multinational. In addition to the challenges of operating in a domestic environment the multinational poses unique challenges involved in ‘doing business’ across national boundaries. There are brand new problems relating to for example legislation, culture, local and global knowledge, organizational structure, maintaining high integrity across political and economic boundaries, and, of course leadership. This book aims to explore the multinational in the 21st Century in these terms, developing an in-depth understanding of the multinational in the modern era. Our book has been thoughtfully structured to achieve this aim. We start by developing an understanding of effective leadership in modern day management.

THE CONTENTS OF THE BOOK

Chapter 2 We begin by introducing the key topic ‘Leadership’. Our aim is to unmask the origins and evolution of leadership. Competencies emphasized include how well a leader affects and influences people, the integrity that is key to attaining trust, and leaders’ abilities related to making effective decisions. To gain deeper insight we investigate the work of early leadership theories including: ‘Great Man Theories’ where leaders are born with innate qualities, ‘Trait Theories’ that lists traits in people associated with leadership, ‘Behaviorist Theories’ that concentrates on what people do rather than their qualities, ‘Situational Leadership’ that sees leadership as specific to the situation in which it is exercised, ‘Contingency Theory’ that goes one step further saying appropriate leadership is contingent upon the context, and ‘Transformational and Transactional Theory’ that emphasizes the relationship between leader and followers. The next chapter brings leadership theory up-to-date by highlighting new challenges and realities and leadership theories relevant to them. ‘Seven leadership action logic roles’ focuses on how a leader might act, compared to his or her philosophy.

Chapter 3 In this chapter we aim to present important aspects of new thinking on leadership, focusing on work of contemporary leadership theorists that especially emphasizes the contextual nature of leadership. We see two new competencies emerging; results-orientated leadership and innovative leadership. There are very many new theories and we have chosen four that provide a good insight into directions leadership theory has moved. ‘Soft management’ says the strength of leadership is in inviting candid feedback and acknowledging that one person at the top cannot know everything. This idea is contra the old one that leaders must be tough and rough and must be experts on all matters. ‘Five minds of a manager’ emphasizes the close relationship of leadership and management, and that they are two sides of one coin. ‘Eight questions of leadership’ are distilled from the life and times of Lord Admiral Nelson and his success as a leader. Why reinvent the wheel when the answers are there for the taking. ‘Ten roles of a manager’ places heavy emphasis on context like some theories in Chapter 2, but states it is what managers do to fulfill the tasks and roles needed in their organizations that matters, not what managers are. With a sound appreciation of leadership now in place we are well set to investigate the relationship between strategist leaders and the structure of the organizations in which they operate.

Chapter 4 The emphasis now switches to the relationship between strategy and structure. We will study the organization’s mission for improvement to enhance overall efficiency and effectiveness and attain competitive advantage. In particular we examine the current need for adaptation of organizations to the global arena. Conventional thinking in this area focuses on either diversification or on divisionalization, but we go beyond this first by examining several ‘complex strategic and structural configurations’ and raise debates about organizations in an environment and about mechanistic versus organic organizations. We then explore the organization’s mission for improvement and keys to attain excellent levels of efficiency and effectiveness. We wind up the chapter by exploring issues pertaining to organizational adaptation to globalization and implications that arise for developing and emerging countries/economies. The next chapter identifies organizational design as central to understanding the relationship between strategy and structure.

Chapter 5 We switch the emphasis of our exploration from strategy to structure since effectiveness of all strategy will depend on the strengths and weaknesses of the very design within which work is carried out. We begin by defining organizational structure in terms of key questions and design options, then examine key elements of organizational structure like span of control and work specialization, and lastly explain how environmental, strategic, and technological factors affect the design of organizations. These topics offer the background by which we may understand in the next chapter, a presentation of actual organizational structures recommended by different philosophical orientations.

Chapter 6 Herein we define organizational structure and then describe and analyze traditional design alternatives. Common approaches to structural design are investigated in an activity versus group debate. The traditional forms of structural design are introduced that are often found in literature on strategic management and business policy; simple, product, geographical, hybrid, matrix structures (including context plus advantages and disadvantages). This is followed by bringing to the fore critical ideas about contemporary organizational design for better integration and coordination. We place this in the context of the multinational with additional discussion of network and virtual organizations. Perhaps the single most important fact that emerges in the first six chapters is that the only thing that does not change is that things are always changing. That is why leaders must be flexible and adaptive, why designs must be under continual review and open to change, and why strategy is better understood as a continual process of learning and adaptation. What we are saying here points us immediately to issues of organizational development and change, the topic of the next chapter.

Chapter 7 In this chapter on organizational development and change we aim to facilitate understanding about the forces for change experienced by organizations including financial ones, and those from employees, from competitors and from customers. We also raise awareness of pressures relating to technology and globalization. All in all we want to make abundantly clear that since change is inevitable successful modern day leaders will know this and respond accordingly. The contemporary management strategy relevant here is the ‘learning organization’ that appreciates three levels in the organization; the individual, the group, and the organization itself. To succeed learning must be an integral part of the functioning and activity at all three levels. In short, all must recognize change, be ready for change and be responsive to changing circumstances. This is not always straightforward because not everyone recognizes the inevitability of change and indeed may even feel threatened by change. So, in this chapter we also explore problems of resistance to changes and how to cope with this. The next chapter works on the idea of the need for change.

Chapter 8 This chapter addresses the question “why do we need organizational change?” We aim to develop awareness of change processes and how these are managed in different companies. Accordingly, we introduce the differences between interpersonal methods, team methods and organizational methods in the change process and the importance of creating a simple road map for change, with milestones and goals. We achieve this by providing an introduction to initiatives that contribute to an effective change process, exploring the process of promoting change in organizations (through interpersonal, team and organizational methods), and highlighting the importance of goal-setting and documenting the change process as essential stages in the change process. In this chapter we ask “why change?” whereas in the next chapter we address the question “how do we change?”

Chapter 9 The main aim in this chapter is to appreciate the importance and nature of planned and managed change. We present these ideas hoping to raise awareness that intuitive leadership and management is insufficient in the local and global business worlds that are characterized by great complexity. So, it is key that we understand basic approaches to managing change and the role of change agents (as leaders). To this end we examine a number of change approaches namely the economic approach and the organizational development approach, and thereto the use of surveys, consultation, and teamwork. We place importance on measurement and the establishment of indicators that provide information about how well the change process is proceeding. However, many leaders/strategists do not have to live with the consequences of change that they facilitate. They change other people’s working lives and the lives of other stakeholders who may not be employees of the firm, but may be victims of the firm’s strategy and related activities. This has all sorts of implications in terms of fairness that we raise in terms of ethical issues in organizational change. The next chapter firmly grasps this prickly topic raising the hoary old problems of ethics and corporate social responsibility.

Chapter 10 This chapter is about ethics and corporate social responsibility. The topic is a tricky one but we hope to reveal the critical issues in terms of ethics in society and in management and by explaining what is meant by corporate social responsibility and how issues of corporate social responsibility can be addressed. Whilst we are not delivering a course on philosophy, it is important we grasp the importance of the debates about ethics and morality in the work place. Traditions of ethics are discussed as they are relevant to management. Corporate Social Responsibility is discussed as a managerial reality. This chapter nurtures a basic understanding of the issues. The next chapter looks in much more detail at issues within corporate social responsibility.

Chapter 11 In this chapter we aim to provide a working insight into some of the most important challenges in corporate social responsibility. We wish to give the students some practical ideas about how to deal with those challenges. We identify four key issue areas; corruption, discrimination, finance, and health. The last chapter discusses the issue of social responsibility in the context of sustainability.

Chapter 12 Herein we think about leadership, organizational design and organizational change in terms of stakeholders and stakeholder management. The stakeholders of an organization are understood to comprise all those people and groups of people inside and those outside of the organization who will be involved in or affected by the implementation of current or recently formulated strategy. In many senses this notion of stakeholder obliterates old-fashioned ideas about the organization and its boundaries by recognizing people and groups of people that are not employed by the organization but may be affected by an organization’s plans for the future and in this way have a stake in them and should be given a voice in the process. Any solution ultimately will be some kind of compromise since it is utterly impossible to fully meet all of the demands of the stakeholder group. Finally, sustainability is discussed as a societal and managerial challenge and that arguably an organization must behave in a socially responsible manner as part of fostering sustainable activities.

Questions:

What were the main ideas behind organizing in the era of the industrial revolution?

What were the main ideas behind organizing within ‘scientific management’?

What are the problems that can be associated with ‘the information revolution era’?

Where do you find those persisting problems addressed in the case-studies in the chapters

that follow this chapter? (A question to keep in mind as you read the rest of the book)

SUMMARY

In summary, this book offers an introduction to contemporary issues/problems of Leadership, Change and Responsibility. It provides an overview of what is required to tackle issues/problems of leading change in organizations. To achieve this, the book offers an overview of four key approaches to leading change in organizations: (1) Leadership, (2) Organizational Design (3) Change Management, and (4) Corporate Social Responsibility. In so doing the book develops a systemic approach to leading change in multinationals through a stakeholder approach. This approach encourages the involvement of everyone who is involved in and affected by the strategic developments of an organization. The structure and content of this book thus realize a systemic approach to Leadership, Change and Responsibility.

CHAPTER TWOLEADERSHIP-EVOLUTION AND TRADITION

STEPHANIE JONES

OPENING CASE: ALEXANDER THE GREAT

John Adair, in his study Great Leaders (1989: 231) pointed out that “physical height was deeply associated with superiority in the ancient mind, possibly because tall men had an advantage in hand-to-hand fighting and tended to be chosen as war-leaders”. Alexander was less than middle height for the era, but he did have physical features which suggested to others his genius for leadership (especially if we relate these observations to the trait theory of leadership). His portraits emphasized his large, staring, luminous eyes. He could speak effectively and move men’s emotions with his words, and his enthusiasm and energy seemed unlimited. His royal birth and successes in battle gave him an aura of divinity. If a leader had traits like Alexander, maybe he could achieve Alexander’s successes too.

As an inspirer or motivator of soldiers few have exceeded Alexander. He shared in the men’s dangers, as the scars of his wounds testified. Alexander would eat the same food as they did. He was highly visible, giving instructions, but he also encouraged his men, backed up by rewards. He always fought hard himself but he was on the watch for any acts of conspicuous courage. He could sum up the inevitably confused situations on battlefields and then take the appropriate action in an effective way. He had clear intuition-a feeling for the real situation long before it becomes plain to others. These attributes were an important part of his leadership style-sharing and rewarding, seeing clearly and knowing what to do, which all added to his ability to inspire.

What went wrong with Alexander? The source of his army’s troubles lay in its success, as victory succeeded victory and went to Alexander’s head. A group of obsequious courtiers around the young king (Alexander was only twenty-two years old when he crossed the Hellespont in Greece) flattered him. They tried to convince him that his successes and conquests were due to his own courage and brilliance, and not the army’s superb qualities as a fighting team. Alexander was being encouraged to take the credit rather than give it, and see himself as having God-like qualities. His mother, a priestess, also convinced him of this.

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