Path – goal theory is a leadership theory that specifies leadership style whose main aim is to achieve set goals through enhancing working environment for employees. It seeks to motivate, satisfy and empower employees so as to increase their productivity in the firm. Leader – member exchange theory is a leadership theory that focuses on the relationship between managers and their employees. It suggests that the relationships between managers and their employees are classified into three stages. These are role taking, role making, and routinization. Transformational leadership is a type of leadership style whereby managers work with their subordinates to come up with organizational goals and vision and identifying ways of achieving them. It helps boost employee morale, job performance, and motivation.
Intellectual stimulation refers to having a leader who encourages the people to think critically, be innovative as well as creative. It thus relates very well with path - goal theory, leader - member exchange theory and transformational leadership. It is because it aims at enabling employees to increase their productivity in the organization. Elizabeth Holmes, the founder of Theranos, is one leader who embraces intellectual stimulation. According to an article in INC magazine where vice president Joe Biden explains why Elizabeth inspires him. He comments on what a great leader she is. She empowers and motivates her employees to work as hard as she does. She also encourages them to be creative and very innovative in their day to day activities. It has resulted in increasing the productivity of the company.
Management by exception is a business management style that focuses on the identification of issues that deviate from typical situations within an organization and handling them. This method mainly relates to path-goal theory as it emphasizes on improving the working environment. In an organization, CEOs need to connect with all their subordinates giving them all the time they need to express their needs and wants. They also need to enhance the working environment for all employees, investors, and shareholders. These results in increased productivity in the organization.
Tim Cook, the current CEO of Apple is one leader who this style of management. Steve Jobs, the former CEO of Apple, never attended an investors meeting and listened attentively without interruptions of checking their phone. However, Tim Cool did so and was very attentive to investors listening to all they had to say and offered his remarks afterward . This motivated the investors to work smarter and be more innovative and creative. The investors now had the ear of their CEO listening to them. Their working environment improved and so did their productivity within the organization. They were determined to impress their CEO, who had offered them a rare opportunity to listen to all their ideas.
Laissez-faire leadership style is where all decision-making power resides with the employee. They have the right to be innovative and choose what they want to do provided their decisions are in line with the company’s objectives and goals. It encourages creativity, innovation and motivation among employees and thus its relationship with path-goal theory and transformational leadership. Despite the many advantages that arise from this leadership style, managers should be very careful and follow keenly to ensure that employees make the right decisions. Wrong decisions made by employees could cost the organization a fortune and thus leaders should guide employees to make correct decisions.
Warren Buffett is an example of a leader who embraces laissez-faire leadership style. He allows his employees to make all decisions regarding ways to achieve organizational goals and objective. However, his style almost failed him. He had promised not to interfere with decisions concerning the making of the paint and the dealers of the company. However, in 2012, a Benjamin Moore, CEO broke the promise and although Buffett intervened, the damage had already been done. Dealers revolted as a result of broken promises and lost their trust in the company. The company is still recovering from this wrong decision made by one of the employees under the laissez-faire leadership style .
In conclusion, relationships can be established among path-goal theory, leader-member exchange theory and transformational leadership and the terms intellectual stimulation, management by exception and laissez-faire. The path-goal theory is all about the working environment and thus closely related to intellectual stimulation. Leader-member exchange theory is all about how management relates to subordinates, and thus closely related to management by exception. Transformational leadership, on the other hand, is all about freedom whereby managers allow employees to make decisions thus related to laissez-faire.
REFERENCES
Lashinsky, A. (2012). How Tim Cook Is Changing Apple. Fortune Magazine.
Leahey, C. (2014). The Wrath of Warren Buffett: How Benjamin Moore Almost Broke His Promise. Fortune Magazine.
Weisul, K. (2015). Why Vice President Joe Biden Is So Inspired by Elizabeth Holmes. INC Magazine.
