[Leadership Styles: How leaders are leading in the 21st Century]
There is a strong link between the strategic management of the company and leadership (Swayne, Duncan, & Ginter, 2012). John P. Kotter (1979) suggested that Strategic management only defines the course of organization, while on the other hand the proper leadership gives the perfectly generated business environment. There are many leadership styles that could be adopted for different sort of strategic decisions. The main theme behind the success of any organization is its leadership skills. The assignment aims to present the analysis about the leadership style of any of the leading organizations. The company which I have selected for this paper is Procter and Gamble. The CEO of the company is Mr. A.G. Lafley. He is recognized for his extraordinary leadership skills. Through which it had made the P&G leader in the FMCG sector.
Brief Introduction of the A. G. Laflay:
Alan George Laflay (A.G. Laflay) born on June 13, 1947 is the chairman of the board, president and Chief Executive Officer of the company Procter and Gamble.
He is an American by nationality. Lafley got his graduate degree from Fenwick High School in Oak Park, Illinois. He earned his A.B. from Hamilton College in 1969. He took a commission with the U.S navy in 1970 when he was just starting off his doctoral program at the University of Virginia. He worked as supply officer in U.S navy during the Vietnam War. This was the time when he started learning marketing tactics which he later applied into the P&G. He joined P&G after completing his business studies in 1977. He became CEO of the company in 2000 and led the company for almost 10 years. After wards McDonalds replaced Lafley in 2010 but he has to step down owing to the decline sales of the company (Lafley & Martin, 2013). Then again Lafley was invited to hold the leadership of the company. He has been renowned all across the globe for his thought leadership. For this reason he had been awarded as “CEO of the year” in 2006 by Chief Executive Magazine (Lafley, 2009).
Leadership Style:
The leadership style is very important in making strategies. As both management and leadership styles are directly linked with organizational strategy. Any change in the management and leadership style will definitely change the strategy. The success of an organization depends upon its ability to adopt different leadership styles in different situations (Doz, & Kosonen, 2010). According to A.G. Laflay leadership is
“If the leader doesn’t set the standards, it won’t happen. Employees watch every move you make and don’t make. If you don’t truly live the values and standards, you won’t have them!”
Laflay adopted the delagative leadership style. He has been renowned in the FMCG sector for delegating all his duties and decision into his subordinates (Laflay, 2003). The democratic leader improves employee participation. This leadership style is most effective when tend to need employee motivation and participation (Keller, Parameswaran, & Jacob, 2011). According to Lafley, the employees should be dealt by the individual who are from among them, and are well respected. After that the employees surely follow them. In order to provide a solution for the style-situation issue, Vroom & Jago, Arthur. G (2007) found an approach that dealt with the interaction between the leader and his subordinates. The leadership strategy is very important because it supports the direction of the organization. In other words, it acts as a torch bearer for the organization (Anderson, & Anderson, 2010). The organization will definitely follow the lead of the leadership strategy. The leadership strategy of Lafley can be evaluated from following perspectives;
Examining the personal and organizational values of Leflay:
Now the survival of the organization is dependent upon the speed with which it responds to the changes in the environment (Zhang, & Bartol, 2010). To respond to the changes, the organization has to change the way of working in its internal set up. Moreover, the behavior of the employees needs to be changed a well. The behavior can only be changed without any retaliation if the relationship between the employees and the leader is strong. If the relationship is not strong, then the change is a headache, and a number of organizations were unable to make it through the change. In the transactional, power, and similar formats of leadership, the interpersonal relationship between the leaders and the employees is not strong, and hence these organizations suffers as well. The effective and efficient leadership strategy is one that takes account the current situation and considers its impacts on the future. Leflay adopted such behavior into his organizational strategy. He was personally a sound leader. His leadership methods have not ignored the value of the employees. Rather these methods focus on building a repository of the available skill sets in the organization. This particular step is perhaps the most vital step, and it is capable of producing positive impacts on the organization. The logic behind it is that if the organization knows the skill sets of its employees, it can formulate its strategy in a better way. Moreover, it can align the resources to facilitate the learning of the employees to promote their positions (Lafley, 2009).
How leaders behaviors affected the ethical values:
Holstein (2005) stated that Laflay leadership was world class model for competitive and ethical leadership. Lafley (2009) stated that he managed the company leadership in such a way that gives rise to company standards and values. Prior to Lafley, P&G values were intricate in such a way that give consumers much importance as compared to employees and workers of the organization. There were shattering values of trust and low employee morale in the organization. Lafley established the trust and encouraged the company to outward focus on employee participation. For the P&G, trust now is the consumers trust in the organization and investors also trust the organization for investing. Employee trust in the organization that it will give them maximum benefits in the form of job security, bonus, pension’s and other on job and out of job benefits. Lafley also motivated the external shift in the industry to boost up the performance. He targeted to make the company on the top with respect to TSR and CSR. He further defined new standards for achieving consumer expectations. Thus it can be concluded that A G Laflay innovated and participatory bheaviour give new perspectives to the ethical values in P&G (Lafley, 2009).
Determining strengths and weaknesses of the CEO:
Lafley was the most successful CEO of the P&G who led the company in most crucial part of their operations. Despite of his excellent achievements in the company there are certain pitfalls of the Lafley leadership characteristics. This section will evaluate the three strengths and three major weaknesses of the Lafley as CEO.
The three strong points of the Lafley leadership are;
- Lafley holds a balance approach towards present and future. He balanced long term investments with short term investments in the present. He successfully employed Ducker’s theme into his leadership strategy. This theme corresponds to earn high in the present to invest for the future. For example he recruited human resource in the company keeping in view the skills and experiences the P&G will need in long run. He also located the 150 people in the human resource to prepare them for future presidential posts (Bower, 2007).
- Lafley has significant knowledge about inside as well as outside of the business. Inside the business he always looked for extra ordinary skills and tried to improve them. Outside the business Lafley assured the toughest competition to its competitions by knowing their strategies (Bower, 2007).
- Lafley stressed extraordinary cooperation with his subordinates. He promoted the team work within the company from top to bottom. Lafley encouraged team participation. The main reason for sales boost in the last decade is due to increased cooperation between different departments (Bower, 2007).
The three pitfalls of the Laflay as CEO are;
- Laflay being the old graduate always stick to old models. His ideas and strategies lack innovation and creativity. He always applied the old models to new challenges. Rather he should bring some innovation and creativity into his leadership style (Bower, 2007).
- Lafley also lacks new executive blood. He is short of new executive techniques and strategies which could be applied to P&G in current globalization scenario (Bower, 2007).
- Lafley does not have pace with contemporary era of advanced technology. The sustainability of the environment has been reduced a lot, and today the working environment of the organizations changes at a great rate than ever. To keep pace with the emerging trends, and also to run a successful organization, it is important to confine the leadership strategy with the newly emerging situations (Bower, 2007).
Cooperation-The most amazing quality contributing towards success:
The most amazing leadership strategy that contributes towards the Lafley success as leader is the administrative abilities. He knows his subordinates very well and thus he promoted a sense of coordination and cooperation among the company employees. The sense of cooperation was major step towards achieving success in industry. He searched the top 500 people in company and prepared the 150 among them for leading or presidential posts in the company. He did lots of research on planning and coordination among employees. Then use the extraordinary judgment qualities to put these plans into practice. According to Lafley (2007) leader’s judgment can make or break the organization. Owing to his strong judgment and perception about quality employees Lafley recruited the best human resource into his organization. That proved to be an asset for the P&G.
Impact of communication, politics on organization Group Dynamics:
The term dynamics refers to system of behaviors and physiological processes occurring within the social group. The research on the group dynamics is necessary for effective and efficient decision making within the organization. Group dynamics are also necessary to study the negative factors which can be established within the groups during their course of work. According to Tuckman (1965) group dynamics are strongly influenced by communication channels within and outside the system. Group dynamics are also influenced by politics, powers, collaboration and communication within the organization (Peck and Tickell, 1992). These determinants strongly affected the social and physiological processes occurring within the organization.
P&G is not only the organization but it is also working as group. Lafley worked a lot to build a strong team within its employees. The team gave rise to specific group dynamics in the organization and its workforce. These dynamics are strongly influenced by communication, power and collaboration within the organization. Study suggested that Group dynamics are strongly impacted by leader’s communication skills. Lafley organized strong communication network within the P&G. The reason for the effective team work and collaboration in the workforce of P&G was the result of effective communication by Lafley. Lafley hold the major power of the company. This factor was also responsible for effectiveness of team work. The influence powers and politics may disturb the group physiological as well as behavioral characteristics. It may give rise to conflicts among the team members (Naimark, 2001). Owing to this fact Lafley always tried to establish an environment working on full collaboration. All the powers and decision making regarding the company affairs was under his surveillance. This minimized the chances of conflicts and mismanagement among the employees. Waller (2002) narrated that group dynamics are also influenced by individual behaviors and motivation levels. Lafley showed immense motivation for employees and promoted a culture of full participation. This quality hinders the negative attitude of the employees in the form of employee unions and strikes.
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