This report evaluates the current management style of Pearce Construction and reviews potential leadership theories for development of leaders. It analyzes the autocratic style of management and suggests transformational leadership as a solution for growth and development.
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Sarbjit Singh Chair of the Board Pearce Construction. 27 Dec 2018 PEARCE CONSTRUCTION MANAGEMENT REPORT. Aim. Pearce Constructions is currently falling behind its main competitors losing market share and profits margins. This report will seek to 1. Evaluate the current management style. 2. Review current theories and their potential usefulness. 3. Plans for the development of leaders at Pearce Construction. Current Management. PEARCE CONSTRUCTIONS1
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The Chief Executive Officer Mr. Brain Pearce has a very autocratic style of management. This style has seen Pearce Construction through its growth period and a few periods of economic downturn. Mr Pearce currently only briefs the Board of Directors at their quarterly meetings with full strategic planning being left under his sole direction. Brain Pearce likes to have full control of all decision making then communicates these decisions down to the various location managers. Having sole control of the entire decision- making process reflects the autocratic style as highlighted by Huneryager and Heckman (1967). This management style is defined as ââwhere decision-making is centralized in the hands of the manager, who does not encourage participation by subordinates.âŠSuch a style is frequently found today in professional firmsâŠmany of the most successful businesses have been led to success by autocrats who are paternalistic leaders, offering consideration and respect to the workforce.ââ It must be note that Mr Pearce does not apply any penalties, punish or threaten his staff; however, he does not have confidence that they could operate without supervision. Therefore, Huneryager and Heckman dictatorial management style, would not apply here. With Mr Pearce having sole control, employees ideas are restricted; however, they are still expected to meet commands and targets. Again, totally contrary to Huneryager and Heckmanâs democratic and laissez faire management styles which saw group participation by employees and no sense of direction respectively. Actions, again which are totally contrary to Mr Pearce management style. PEARCE CONSTRUCTIONS2
Figure: Type of leadership models by Huneryager and Heckman There are four types of leadership models that can be implemented in an organization. Those are Dictatorial, Autocratic, Democratic and laissez faire leadership styles. Dictatorial leadership In case ofdictatorial leadershippractices, the centralized decision is being made by the manager of the company. In this style, the manager makes the ultimate decisions for enforcing the subordinated1. Through threats and penalties, the manager forces on the employees for performing their jobs effectively. Autocratic leadership In case of theAutocratic leadershippractices, the decisions of the organization depend on the leadersâ perspectives. Depending on the ability of the leaders, the ultimate decision making process in the workplace gets influenced. Democratic leadership In case ofdemocratic leadershipstyle, all the subordinates are being involved in the decision making process. Through this process, the decentralized decision making process is 1Rosenbach, William E.Contemporary issues in leadership. Routledge, 2018. PEARCE CONSTRUCTIONS3
being introduced in the workplace. This process improved the ability of leaders for managing the situations in the workplace. Laissez faire On the other hand, in case oflaissez faire, the outcome of the project depends on the decentralized decision making process. In this case, the inactive participation of both the managers and employees are being shown. Analyzing the current scenario in Pearce Construction, it can be said that the Autocratic leadership practices are being followed in the workplace.By following the autocratic leadership practices, Pearce wants to take the full control in the decision making process so that the full control on the decision making process can be maintained. Analyzing the situation, it can be concluded that having an autocratic behavioral characteristics of Pearce purposes his own decision to the employees, which can be considered as the important drawback of the company. 4s leadership style There are four types of leadership styles that can be adopted by the management in workplace,thoseare,exploitativeauthoritativestyle,benevolentauthoritativestyle, consultative style and participative style. Exploitative authoritative Incaseofexploitativeauthoritativestyle,thefearofpunishmentandtopdown communication practices are being done. Benevolent Authoritative style In case of thebenevolentauthoritative style, the uses of rewards, little down feedbacks, dominance of methods are being highlighted. PEARCE CONSTRUCTIONS4
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Consultative style In theconsultative style, intensive feedbacks are being provided by the managers after the completion of the discussion. Participative style On the other hand, in case of theparticipative style, the two ways of communication are being developed. Here the feedbacks are openly being provided by the managers for employee improvement. An Mr Pearce also set targets for his managers which are linked to their pay and promotion, the benevolent authoritative management style of Renisi Likert (1961). This style is defined asââthemanagerhasonlysuperficialtrustinsubordinates,imposesdecisions,never delegates, motivates by reward and, though sometimes involving others in problem solving, is basically paternalistic.ââ This style shows Mr Pearceâs protective nature towards the business to the point of smothering its development and growth. This has caused the companyâs revenue to fall by 20% and profits by 40% making it one of the worst performing companies in its market sector.In that case, it can be concluded that it needs to focus on improving its management practices so that both the internal and external situation in the workplace can be improved. On the other hand, it is also true that depending on the practices it will be easier for the company to manage the growth opportunities in the workplace. Theory X and Theory Y PEARCE CONSTRUCTIONS5
Figure: McGregors Theory X and Theory Y In the above diagram, the McGregors Theory X and Theory Y have been introduced, which has been developed depending on the two aspects of human behavior. X represented the negative and y represented the positive human aspects. In the assumption of theory X, the employee instincts, towards not fulfilling the job responsibilities. It also reflects through the rank of job security. On the other hand, in the assumptions of Y, all the positive perspectives of employees are being highlighted. Job satisfaction, skills and abilities of employees are being measured depending on the Y theory. In the below table, outline of the theory X and theory Y have been discussed Theory XTheory Y Dislike to fulfill the job responsibilitiesEmployee satisfaction increases Only moneybecomes the motivational thing for workers improvement Responsibilities are properly accepted by the employees Constantsupervisionandmonitoring become necessary Employee loyalty increases (Created by author) PEARCE CONSTRUCTIONS6
During the study of Prudential Insurance, McGregor (1960) found Theory X managers were primarily interested in the speed and quantity of work done in comparison to Theory Y managers who did not subscribe to this trait.Theory X managers also believe that workers are lazy and need constant supervision and control, this would describe Mr Pearce and his managing of the organization.Theory X managers ââbehave in this way in the belief that it will increase productivity, but it is unlikely to motivate workers,ââ which would result in high staff turnover.Which is evident with Pearce Construction where less than 25% of the workforce have been employed for over one year and one building site having a turnover of 75% a year.In comparison to Theory Y managers which McGregor theorized that ââif the right conditions can be developed for employees to work and satisfy their personal ambitions within their work, then high levels of motivation and productivity can be achievedââ. This is not the scenario at Pearce Constructions as employees are not motivated by management or themselves. Based on the above section, it can beconcludedthat in order to deal with the decreasing organizational revenue, the company needs to focus on implementing effective management policies so that the employee involvement in the workplace can be increased. Using the McGregors Theory X and Theory Y, it will be easier to understand the potential employees in the workplace. Depending on the potentiality of individuals, effective leadership practices can be implemented. Potential useful Leadership theories. If we are to now look at prospective leadership styles for Pearce Construction, then it would be wise to firstly define leadership. According to Koontz, OâDonnell, Weihrich (1980) leadership is defined as âthe essence of leadership is followership. In other words, it is the willingness of people to follow that makes a person a leader.âDaniel Goleman (2000) PEARCE CONSTRUCTIONS7
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suggests that effective leaders choose from six distinctive leadership styles: Coercive - Do what I tell you - which best describes Mr Pearce. Pacesetting - Do as I do now. Coaching - Try this. Democratic - What do you think? Affiliative - People come first. Authoritative - Come with me. Of these styles, Mr Pearce can be described as a Coercive Leader as seen with his direct, hands-on approach.Analyzing the Goleman model, it can be said that coaching and democratic are the important two distinctive leadership styles, which have not been followed by Pearce. If we look at another theory as placed forward by Kotter (2008); the following activities of Planning and budgeting, Organisation, staffing, Controlling and Problem-solving are all management focused. If well done the result would be positive; however, Pearce Construction is to focus on these activities and leadership required a completely different mindset according to Kotter.Although Mr Pearce relies heavily on planning and control he does not include his staff in the process; hence their lack of enthusiasm towards his goals. In the change theory Kotter mentioned about the different attributesthose are important for bringing the changes in leadership practices2. Through the theory Kotter has mentioned about various changes in leadership practices that can bring the success in the workplace. In order to define the leadership and management, management has been defined as the set of process that develops a complicated system so that the technology and people can run smoothly. The important aspects of management such as budgeting, staffing, controlling problem solving and planning are bring handled effectively depending on the leadership practices adopted by the organization. In that case, it can be said that the leaders play an effective role for bringing the changes on management practices. Through this leadership approaches Kotter tried to highlight the behavioral characteristics of the leaders 2Burke, W. Warner.Organization change: Theory and practice. Sage Publications, 2017. PEARCE CONSTRUCTIONS8
that can differentiate them from the managers3. In order to bring the changes towards success, leaders play more effective role than the managers. However, seeing that the industry is growing as is evident with the competition. We can say that Mr Pearceâs style is prohibiting growth in the business and staff, and a change of style or leadership may be whatâs needed to correct this. Transformational leadership The Role of a transformational leader is to inspire the behavioral traits of individuals in the workplace so that both the personal and professional growth on individuals can be introduced in the workplace. Analyzing the characteristics of the transformational leader, it has been identified that transformational leaders are the proactive decision maker. They play an influential role for motivating the employees, towards achieving the business goals and objectives. By following the Transformational leadership practices, it will be easier for the company to involve the individuals in decision making process. If the employees will be involved in the decision making process, in that case, employee loyalty towards the organization can be increased. On the other hand, transformational leader inspire the employees by sharing vision. On the other hand, analyzing the leadership practices in the workplace, it can be assumed that in order to make the employees more responsible and encourage them towards achieving the business goals and objectives, the transformational leadership practices can be beneficial4. 3Neves, Pedro, and Birgit Schyns. "Destructive uncertainty: The toxic triangle, implicit theories and leadership identity during organizational change."Organizational Change. Routledge, 2018. 131-141. 4Oshagbemi, Titus.Leadership and Management in universities: Britain and Nigeria. Vol. 14. Walter de Gruyter GmbH & Co KG, 2017. PEARCE CONSTRUCTIONS9
At this point Pearce Construction needs a Transformational leader as defined by James MacGregor Burns (1978) where leaders ââoffer a purpose that transcends short-term goals and focuses on higher order intrinsic needsâŠ.in turn leads to the more visible extrinsic needs of the organisation being met.ââ Whereas Mr Pearce is more of a Transactional Leader using conventional reward and punishment to gain compliance from their followers. Burns (1978) gave four dimensions of transformational leadership: 1. Charisma or Idealized influence: This is about the leader having a clear set of values and demonstrating them in every action providing a role model for their followers. 2. Inspiration motivation: these leaders challenge followers with high standards, communicate optimism about future goal attainment and provide meaning for the task at hand. 3. Intellectual stimulation: The leader challenges assumption, takes risks and solicits followersâ ideas. 4. individualised consideration or Individualised attention: The leader attends to each followerâs needs, acts as a mentor or coach to the follower and listens to the followerâs concerns and needs. Under Burns definition of transformational leader; Mr Pearce does not hold any of these traits hence why he is a transactional leader.This style of leadership was ideal in the early stages of the organisation as it grew; however, at its current stage the company needs a new direction and leadership to cement and build on its foundation. PEARCE CONSTRUCTIONS10
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The need for transactional or transformational leadership can also be linked to the stage or the organization in its lifecycle: Through the organizational lifecycle, the expectedsequence of advancementscan be analyzed. Analyzing the situation of Pearce Construction, it can be said that the company can be placed in the declining situation. Due to improper management practices, the company is dealing with the tough situation. Development of future manager ï·In order to develop future manager, it is very important to develop an effective team. ï·Improving ability of individuals, ethical management practices can be implemented in the workplace ï·Effective interpersonal skills can help to get connected with the employees. By recognizing the achievements, the effective future manager can be developed. PEARCE CONSTRUCTIONS11
Develop future transformational leader In order to develop future leader people should be rotated through different jobs. With this initiative, it will be easier for the participants to gain the experience for performing in differentjobroles.Effectiveorganizationalculturecanplayanimportantrolefor implementingthejob rotationstrategyinan effectivemanner. Withthejob rotation opportunities it will be easier for individuals to get the opportunities improving the skills. If the skills of the employees will get improved, they will blend themselves in different situation, which can help to bring the business growth. Depending on the current situational analysis in the organization, it can be said that developing both the manager and leader have become necessary.In this situation, it will beneficial for the company to regain its market position. In order to develop a good leader, the effective monitoring plan needs to be introduced in the workplace. Employees be paired with the paired with the senior employees so that the efficiency of individuals can be maintained. Challenging the employees in different unfamiliar jobs can play an important role to develop future leader. By introducing the growth oriented initiatives, confidence of individuals can be increased. Management Development. The following recommendations/action plan should help set Pearce Construction in the right direction and to restore it as an industry leader. Removal of Mr Pearce as Chief Executive Officer. Mr Pearce has served the company well, especially during difficult periods, helping guide the company through economic downturn. However; there is need for new executive blood to be pumped into the company, with fresh ideas and a different mindset. His management style is coercive, and this would have been PEARCE CONSTRUCTIONS12
ideal during turbulent times; however, it is now a major contributor to the companyâs current downward spiral.The new CEO needs to be have transformational leadership qualities which should see the rejuvenation of the company.In order to improve the current situation in the company, 6 months of training period can be introduced for improving the employee efficiency in the workplace. Objectives of the training plan ï·To introduce effective training plan so that the proper management practices can be introduced in the workplace ï·To increase employee engagement towards the organization ï·To increase employee efficiency for gaining better out put Activities1st to 3rd Wee k 4thto 10th week 11th to 13th Wee k 14th to 17th Wee k 18th to 21st Week 22nd to 23rd Wee k 24th Week Identification of the issues ïŒ Develop training plan and budget ïŒïŒ Training plan with budget will be presented to the higher authority ïŒ After confirmation from the authority, training objectives will be clarified to ïŒïŒïŒ PEARCE CONSTRUCTIONS13
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the participants Understanding the needs and demands of the participants changes will be done ïŒïŒïŒ Learning materials will be shared to the participants ïŒïŒ Analyzing the ability of the participants different tests will be taken by involving them in unfamiliar situations ïŒ At the end of the training program, based on the performance the participants will be appreciated with scores ïŒïŒ Monitoring of the entire process will be done ïŒ (Created by author) PEARCE CONSTRUCTIONS14
The Company needs restructuring. The company should be restructured with various departmental heads as shown in the organisation chart below. The restructuring of the company would give the new departmental heads a defined set of responsibilities and job specifications. Individuals would know who to report to and this would give persons more responsibilities and allow for the smooth running of the various projects and departments. CEO HR Department HOUSINGPUBLIC SEC.COMMERCIALFINANCESALE & MARKETING PROJECTPROJECTPROJECT MANAGERS.MANAGERS. MANAGERS PEARCE CONSTRUCTIONS15
VARIOUS SITESVARIOUS SITES Introduce Top Level Management teams. These teams would help the CEO with the strategic planning of Pearce Construction and would be responsible for their individual areas of expertise i.e. Housing, Public Sector Contracts and Commercial Buildings. They would be assisted by Project Managers on the ground at the various sites. The CEO has a responsible to ensure that he mentors and encourages upward mobility of his Top-Level Managers helping develop and identify his replacement in the coming years. Top Level Management should be recruited from current employment pool with the remaining needed balance headhunted via recruitment agencies. Communication. As it currently stands, Mr Pearce communicates to the various job sites every morning via mobile phone giving daily direction on what must be done. This method of communication should be discontinued and replaced with more formal means of communication. Project meetings where issues are brought forward, and resolutions identified and the setting of project goals and objections with clear end dates. In case of implementing the effective managmenet style, the company needs to focus on improving its recruitment and selection process. In that case, the human resource manager of the organization can play an effective role. It is true that if the positive people can be involved in the management procedure, in that case, the company will be able to manage the decreasing market share. On the other hand, if the employees will be involved in the decision making process, in that case, the management style can be improved. With this initiative, employees will feel free to discuss their issues with the management, as a result, the needs and demands of the employees will be clarified to the management. PEARCE CONSTRUCTIONS16
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Application of different motivational theories in the workplace can be beneficial in terms of improving the internal sitaution in the workplace5. In case of motivating the employees, it is very important for understanding the needs of individuals. In that case, the company can also focus on implementing the Maslow motivational theories in the workplace. Through the effective implementations of Maslow motivational theory, it will be clarified that if the organization is being able to satisfying the employees or not. If the employees will get satisfied, it will motivate them towards improving the efficiency. On the other hand, management needs to play an active role for properly monitoring the activates of thee employees so that using different performance measurement tools, it will be beneficial for the company to analyze the ability of individuals. Employee should be encouraged to give feedback and submit ideas on current and upcoming projects. Supervisors should be made to understand that their do not need top level authority should the need arise for a command decision to be taken.Schemes should be rolled out where employees are encouraged to submit ideas and put themselves forward for various projects with various incentives being their reward. Introduction of Management Mentoring scheme by way of an Extended Leadership team. The aim of this scheme is to assist new and younger managers/supervisors to develop their managerial skills and allow the team to learn off each other. This would enable the company to identify young talent and nurture it; which would make succession easier. Holding seminars, team building functions, inviting motivational speakers all in an aim to develop the top brass of the company and motivate staff up and down the chain. It is hoped that should these recommendations/action plan be implemented, this this should see a shift for the better in the performance of Pearce Construction. A rejuvenated work 5Yahaya, Rusliza, and Fawzy Ebrahim. "Leadership styles and organizational commitment: literature review."Journal of Management Development35.2 (2016): 190-216. PEARCE CONSTRUCTIONS17
force and improved work ethic and output, along with well-developed managers, all well equipped to step up when needed will ensure that Pearce Constructions is well placed to lead their sector. Implementation of new company handbook. This handbook would give employees a clear frame work to work from. Highlighting what the company expects from employees but also what employees should expect from the firm. From dress code to disciplinary action should all be covered in this handbook. Outlining the various methods and means which staff could use to pass information up and down the managerial chain, identifying problems so that solutions could be found. In order to bring the future management development t in the workplace below steps needs to be followed. Action plan: Stage 1: An action plan will be designed by the top level managers in the organization, who have minimum 10 years of experience in management. Stage 2: Budget plan will be developed and approval from the finance department will be taken. Stage 3: Effective training plan will be introduced by clarifying the objectives Stage 4: Participants will be involved in the decision making process for understanding opinion regarding the structural changes in the workplace Stage 5: Depending on the decision making abilities and emotional intelligence skill, a separate division will be introduced who will work for employee engagement. Stage 6: Record of 3 years will be maintained and will be compared for understanding the improvement. PEARCE CONSTRUCTIONS18
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Pollack, Julien, and Rachel Pollack. "Using Kotterâs eight stage process to manage an organisational change program: Presentation and practice."Systemic Practice and Action Research28.1 (2015): 51-66. Willis,Sara,SharonClarke,andElinorO'connor."Contextualizingleadership: TransformationalleadershipandManagementâByâExceptionâActiveinsafetyâcritical contexts."Journal of Occupational and Organizational Psychology90.3 (2017): 281-305. Yahaya, Rusliza, and Fawzy Ebrahim. "Leadership styles and organizational commitment: literature review."Journal of Management Development35.2 (2016): 190-216. Rosenbach, William E.Contemporary issues in leadership. Routledge, 2018 PEARCE CONSTRUCTIONS21