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(23, 11, 2013)
Leadership Style
The former Vice President Evelyn Gustafson had adopted a democratic style of leadership. She believed in a participating style of management and during her service tenure made several efforts to facilitate her subordinates. Her inclination was more towards female staff of the office because she herself has made progress from a lower position and reached at the apex of the organization. The democratic style of leadership has several advantages and in the modern business environment organisations tend to focus on participative style of management because it ensures goal congruence and enhances employee productivity. The consultative style of leadership provide opportunities to the managers of the strategic business units (SBUs) to participate in the decision making process. Under the leadership of Ms. Gustafson the workers developed a great sense of self-esteem because their ideas and proposals were given due importance. Not only their ideas were given importance but they also have had the opportunity to brought policy changes (Best, 2009).
Evelyn Gustafson had attempted to manage Mountain West Health Plans Inc. with purely democratic principles such as self-determination, inclusiveness, equal participation and consultation. She must have distributed responsibilities among her subordinates based on their relevant skills and expertise. Ms. Gustafson had empowered the workforce of the company and provided them professional trainings so that their on job performance would enhance. The most significant of her contributions was to secure best salary packages for the staff so that they could live a better life. She always wanted her customer support team to provide valuable services to the existing and potential customers because they are the most valuable and powerful stakeholders and main drivers of business success. The staff turnover was extremely low in her time because she believed in flexible working hours and lenient style of leadership.
Democratic leadership in the context of managing an organization may also lead to greater innovation and creative solutions to problems which ultimately results in the efficient and effective organizational operations. A part from merits democratic leadership has several disadvantages and it may not be as workable as traditional authoritarian style of leadership could be. The same thing happened at Mountain West Health Plans Inc. because employees had been given extra freedom and as a consequence of which operating costs were exceeding from that budgeted (Best, 2009).
The succeeding Vice President Martin Quinn noticed that salaries represent 70 % of the departmental costs which needed to be controlled. In addition to that customers had little reservations because they had to wait in telephone queues. However, the overall customers are satisfied which indicates that their need and wants are being met. The democratic style of leadership has several other disadvantages. The functional department and responsibility centers come into conflict with each other because their narrow objective would be to attain departmental goals in the short run which may be detrimental to the organization in the long run (Hersey and Blanchard et al., 2011).
According to McGregor there are two types of employees, theory X and theory Y. The people belong to earlier group dislike work and only perform their duties when they are force to do so. While on the contrary, theory Y people are always motivated and perform their duties with full efficiency and control. The democratic approach to management is ideal for Theory X people because they propose such ideas that would require minimal cooperation. Such a behavior would be costly to the organization because valuable resources are wasted on activities which are potentially less favourable to the company (Jyothi and Venkatesh, 2006).
Martin Quinn has recruited Eric Rasmussen as a new director of the customer services and he has been given the task of controlling departmental costs to save valuable organizational resources. Eric has actually performed his role in an aggressive manner because the workforce is used to work in a democratic environment while his style of leadership is in complete contradiction to Ms. Gustafson. Therefore, the employee turnover has increased and organization is facing a shortage of skilled workforce. Consequently, the customer complaints have increased because the departmental objective has changed from high quality services to quantity of calls. Ms. Gustafson’s policy was customer oriented while Eric’s objective is to control costs. Cost controlling is a gradual process and is only possible in the medium to long term otherwise it would be harmful to the organization as a whole. Eric has abandoned staff training program and customer service organization cannot compete in the market without a well trained workforce. The number of complaints has risen because there is a lack of training programs and high staff turnover.The customer has shown concerns on the reliability of the information because they have been dealt in rush and a result their queries were not properly responded (Best, 2009).
The service organizations like Mountain West needs to adopt a hybrid style of leadership because one model cannot be able to produce desired results. Ms. Gustafson’s style of leadership was completely democratic which discourage managerial control and believes in complete sovereignty of employees while Eric’s approach is totally undemocratic and he seems to be striving hard to achieve his personal gains. The cost reduction approach could be in a form of changing costing and budgeting methods such as Activity based management, Zero based budgeting or target costing. Retrenchment policy and saving training and development cost may be detrimental to the organization in a medium to long run ((Hersey and Blanchard et al., 2011)
Transformational Leadership
Martin Quinn needs to adopt a transformational style of leadership because it contains all the necessary prerequisites of a successful organization. The transformational leaders have the charisma to convert dreams into reality and they create the working environment challenging and full of enthusiasm. Leaders sacrifice their personal interests for the broader organizational objectives. Transformational leaders are usually revolutionary in nature and have already achieved the desired status in life as described in Maslow’s hierarchy of needs. The modern business environment is constantly changing and to cope with this dynamic nature leader needs to be creative, innovative and have the tendency to inspire others (Berman, 2013).
Mountain West Inc. requires a significant change and there is a strong need to modernize all aspects of their business operations. Martin Quinn should conduct benchmarking exercise to understand industry best practices and diagnose areas where there is a genuine need for improvement. Eric strategy is to cut costs in the short term to make department profitable by reducing or eliminating necessary and unnecessary expenditure being incurred on various activities. Financial measures of performance are less relevant in the modern business environment and to fully evaluate their services Martin Quinn should adopt performance measures such as Non-financial performance indicators (NFPI) and Balanced scorecard. Balanced scorecard provides a comprehensive analysis of the business performance from four perspectives and organization then make efforts to strengthen their weaken areas. The following are the four perspectives on the basis of which organizational performance is assessed (Avis, 2009).
- Financial perspective
- Internal business process perspective,
- Customer’s perspective
- Learning and growth perspective
Transformational leaders are visionary and they show the organization a real path of success. The following are the characteristics of the visionary leaders which transforms organizational goals into reality (Best, 2009)
Anticipatory skills
The leaders have the tendency to predict future likely outcome of the business environment and they alter their policies according to the need of time. This ensures that organization remain competitive and consistent in an ever changing business environment.
Value congruence skills
The leaders get in touch with their subordinates and understand their socio-economic and psychological needs to allocate them roles responsibilities which are in alignment of their personality and technical skills ((Jyothi and Venkatesh, 2006)).
Empowerment skills
Transformational leaders believe in a delegation of authority and promote participatory style of management where managers and corporate board share their opinions and make a unanimous decision. It makes employees become more involved, dutiful and committed towards work because their role and proposals are given due consideration.
Visionary skills
Leaders have the vision and they persuade employees to act in accordance with the working strategy as designed by them and to motivate his team they share practical examples and inspirational corporate success stories (Best, 2009).
Conclusion
The existing and the former leadership style at Mountain West appear to be faulty and may not produce desired organizational results. Ms. Gustafson’s style was totally democratic while Eric has an undemocratic and even unjust style of leadership. Martin Quinn needs to bring about a dramatic change in the business through the recruitment of a new leader who has the vision and is willing to sacrifice his personal needs for the broader objective of achieving organizational goals. Moreover, there is an increasing need to learn industry best practices through benchmarking and other performance evaluation techniques. This would enable the company to identify areas of improvement and provide high quality and satisfactory services to the customers.
References
Avis, J. 2009. P2 - Performance management. Oxford, U.K.: CIMA/Elsevier.
Best, N. 2009. Enterprise Management. Burlington: Elsevier.
Hersey, P., Blanchard, K. and Johnson, D. 2011. Management of organizational behaviour. Harlow: Prentice Hall.
Jyothi, P. and Venkatesh, D. 2006. Human resource management. Delhi: Oxford University Press.
Mathis, R. and Jackson, J. 2003. Human resource management. Mason, Ohio: Thomson/South-western.
Berman, E. 2013. Human resource management in public service. Los Angeles, CA. [u.a.]: SAGE.
