Implementing Laissez-faire Leadership Style for Innovation in Sim's Hardware

This report discusses the benefits and disadvantages of Laissez-faire leadership style for fostering innovation in Sim's Hardware. It also covers the risks associated with innovation and how to mitigate them. The report recommends redefining the organizational culture, investing in R&D, implementing technological advancements, and conducting market research.

Business Management
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BUSINESS MANAGEMENT
Executive Summary
The most suitable leadership style which could be implemented in Sim’s Hardware in order to
foster innovation and creativity in the workplace of the company is laissez-faire leadership style
as it provides authority to the employees of the company to take their own decisions without the
interference of the leaders and managers which increases their motivation and therefore increases
their efficiency and productivity. There are certain disadvantages of laissez-faire leadership style
such as it works only for experienced teams, it fails to implement new changes in an effective
manner, creates confusion regarding roles and responsibilities of the team members and therefore
it is the responsibility of the leader or managers to increase the efficiency of the laissez-faire
leadership style by providing training to the team members, by clarifying the roles and
responsibilities of the team members and by highlighting the benefits of changes. There are
various risks which are associated with innovation in an organization such as operational risks,
financial risks and commercial risks and therefore companies must focus on mitigating the risks
of innovation by seeking professional advice and entering into joint ventures and licensing.
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Contents
Executive Summary.........................................................................................................................1
Introduction......................................................................................................................................3
Problem Analysis.............................................................................................................................3
Recommendation.............................................................................................................................8
Conclusion.......................................................................................................................................9
References......................................................................................................................................10
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Introduction
Modern day business organizations must focus on constantly innovating their products and
services in order to stay competitive in the market and in order to gain a competitive advantage
in the market. In order to foster innovation and creativity in their workplaces, organizations must
focus on promoting an open organization culture in the workplace which enables the employees
to freely share and communicate their views without the fear of being punished or ridiculed.
However there are certain risks which are associated with innovation in an organization and
therefore companies must focus on mitigating the risks associated with innovation in order to
reap the benefits of innovation.
Problem Analysis
6. The different types of leadership style are as follows:
Autocratic Leadership-Autocratic leadership style is a uni-dimensional leadership style which
provides full power and authority to the leaders. In the autocratic style of leadership, the leader
makes all the decision by himself without consulting any of his subordinates or team members.
An autocratic leader takes all the crucial calls and decision in a group which are then
communicated to the team members and then the team members are then expected to work on
those instructions immediately. In other words the leader is the ultimate decision maker in
autocratic leadership style.
Democratic Leadership- The democratic leadership style is participative in nature in which the
leader involves the team members while taking critical decisions. As stated by Farooq et al.
(2018) the democratic style of leaderships works best in the organization where the team
members are highly skilled and experienced. The most crucial part of the democratic style of
leadership is that the communication is upward to downward in the democratic style of
leadership. In the democratic style of leadership, the leaders are required to be creative,
intelligent, considerate and competent in nature.
Coaching Leadership- In this style of leadership, the leader and team members act as mentors
and coaches to their team members and subordinates. There are various benefits of the coaching
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leadership style which includes boosting the motivation of the employees, increasing the
performance skills of the employees and grooming and motivating the team members. The
coaching leadership style is one of the most effective leadership style, as it involves leading in an
indirect manner rather than in a direct manner.
Strategic Leadership- According to Mocha (2015) strategic leadership is defined as the ability of
leaders to influence the team members to voluntarily make decisions which enhance the
prospects for the long term success of the organization. In other words, strategic leadership
indicates a leader’s potential or capability in order to express a strategic vision for their
organization and to influence them to chase that vision with the help of right strategies and tools.
The strategic style of leadership facilitates leader to create a team of team members who are well
trained and well equipped in order to counter with unforeseen risks and threats. The strategic
leadership style helps in creating more leaders.
Transformational Leadership- As opined by El Khouly, AbdelDayem and Saleh (2017) the
transformational leadership style aims at creating a thriving work culture through effective
communication in a team. The transformational leadership style demands a certain level of
strategic vision and intellectual simulation in order to initiate change in self and others in the
organization. The transformational style of leadership emphasizes on setting high goals with
strict deadlines and accordingly working in tandem in order to achieve those goals on time and in
this way transformational leaders set challenging expectations for themselves and for the team in
order to achieve exceptional results.
Laissez-faire leadership- As opined by Xie et al. (2018) in this type of leadership, the leaders
delegate the responsibility of decision making to the team members and lets them to work on
their own with minimum or no interference. This particular leadership style provides the
maximum scope for innovation and flexibility. This leadership style works perfectly for the
creative teams possessing self-motivated and experienced individuals who do not require that
level of supervision.
Charismatic Leadership- In the charismatic leadership style, the leaders automatically attracts a
lot of individuals with their charm by virtue of their charm and charisma. The charismatic leaders
are self-motivated, passionate and confident in nature. As opined by Oke (2013) this type of
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leadership style is helpful in building a powerful standing in the market and gain a huge fan
following by virtue of their strong self-image. In this style of leadership, the success of the
leadership style depends heavily on the leader and their impact. This leadership style is perceived
as a one man show rather than a collective effort.
As stated by Kesting et al. (2015) the personal leadership style which should be applied in the
workplace in order to model positive innovative thinking and practice is Laissez-faire style of
leadership in which the staffs of the company will have the ability to take important decisions
and the team leader or manager will have little and no level interference in those decisions and
the responsibility of the team leaders and managers in this style of leadership style is to
continuously motivate the employees and manage the risks which arises from the decisions of the
employees. This style of leadership in the workplace will foster innovative thinking process and
creativity among the employees of the company. As stated by Palmer (2016) one of the pre-
requisite for innovation to occur in an organization, is an open organization culture in which the
employees of the company will freely be able to think in a positive and innovative manner
without the fear of being punished or ridiculed which in turn fosters creativity and models
positive innovative thinking in the work place and therefore Laissez-faire leadership is the most
suitable style for the workplace in order to support and foster innovation.
The examples to show how the laissez-faire leadership style was used in the workplace in order
to model positive innovative thinking and practice are as follows:
 The employees of the workplace were given the authority to take various important
decisions regarding the team and its way of operating without the interference of the team
leaders and managers.
 The employees of the workplace were given the assurance to think creatively and
communicate it to others without the fear of being punished or ridiculed.
 The employees of the workplace were rewarded accordingly for their creative ideas and
practices in order to motivate them to further motivate them to think in a creative and
innovative manner.
7. The benefits of applying laissez-faire leadership style in the workplace are as follows:
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 As opined by Alonderiene and Majauskaite (2016) it increases the accountability of the
team members of the workplace as they remain responsible of taking various important
decisions and therefore it becomes their responsibility to ensure that the decisions which
are undertaken are effective in nature which helps in increasing the effectiveness and
productivity of the workplace.
 As opined by Chapman, Johnson and Kilner (2014) it helps in fostering an innovation
and creative culture in the environment as the staffs of the workplace remain free to take
their own decisions without relying on the decision taken by the leader which increases
the creativity skills of the employees.
 It helps in creating an inviting work environment as most of the employees of a company
seek freedom and independence in the workplace in order to perform their day to day
tasks in the most effective manner.
 It helps the experienced teams of the workplaces to use their experience as by counting
on those experiences and letting that wisdom come through, the tasks become easier for
them to accomplish because the leadership is getting out of the way to let the team do
what they do the best.
The disadvantages of applying laissez-faire leadership style in the workplace are as follows:
 The laissez-faire leadership style only proves effective when the employees of the
workplace are skilled and experienced in nature in order to take vital decision within
the policies and procedures of the company.
 The laissez-faire leadership style creates confusion among the employees regarding
their roles and responsibilities while performing various day to day tasks of the
company.
 As opined by Taha (2013) the laissez-faire leadership style creates difficulties in
adapting to any immediate circumstances because during such situations, when a
leader feels that it is necessary to change or adapt themselves in order to respond to
the circumstances, they cannot do so as it depends solely on the employees to
determine if they want to change or adapt to the new circumstances based on their
evaluation and analysis of the situation.
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 The chances of litigation increases by applying the laissez-faire leadership as the
managers or group leaders gets the authority tire or dismiss any workers if the
intended results are not being achieved b them and the workers at that moment will
not possess an active defence in such situations as they were provided full authority
to complete those tasks by themselves.
The methods which can be applied in the workplace in order to refine the leadership style are as
follows:
 According to Clarke (2014) provide training to the employees of the workplace for
improving their skills and productivity so that they can become capable of taking critical
decisions own their own without any supervision.
 Briefing the team members regarding their specific roles and responsibilities while
performing a task so that there remains no confusion regarding their roles and
responsibilities.
 Briefing the team members regarding any changes which have taken place in the
operating environment of the company so that the employees understand the importance
of the change and accordingly embrace the changes.
8. The risks associated with innovation in an organization are as follows:
Operational risks- There are various operational risks associated with innovation for an
organization such as failing to meet the quality, costs and scheduling requirements of the
company which could result in the disruption of the operations of the company.
Commercial Risks- As stated by Syed, Ur Rehman and Kitchlew (2018) there are various
commercial risks which are associated with innovation for an organization such as failing to
attract the required number of customers towards the new and innovative products and services
of the company which could result in loss of market share of the company and lower sales
revenue of the company.
Financial Risks- There are financial risks which are associated with innovation for an
organization such as investing in unsuccessful innovation projects which could result in financial
losses to the company.
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The control measures which are suitable to manage the risks of innovation are as follows:
 It is highly recommended to the company to seek professional advice from consultants,
industry professionals or contacts in business networks to get valuable insights regarding
the market in which they operate.
 As opined by Hussain and Hassan (2016) it is also advisable of the company to set up
joint ventures with other companies as sharing the development process with a business
partner diversifies the risk which means the company an benefit from their expertise and
resources.
 It is also advisable for companies for adopting licensing policies as it allows another
entity to bear the risks of developing their idea in return for fee and royalties.
Recommendation
The main recommendation to Sim’s hardware is to redefine their organization culture which will
help in fostering innovation in the workplace. The company must focus on developing an open
organization culture, by fostering open communication in the organization so that the employees
of the organization feel free to cope up with various creative ideas no matter how absurd it may
be, without the fear of being ridiculed or punished. As opined by Derecskei (2016) another
recommendation to the company is to heavily invest in Research and Development business
function of the company as it will help in fostering innovation in the company and also
manufacture high quality products. Another recommendation to the company is to high quality
standards in the production process of the company as it will help in increasing the quality of
products of the company. Another recommendation to the company is to implement
technological advancements in the organization which will help in effectively streamlining all
the business process of the organization. As opined by Fiaz, Su, Ikram, and Saqib (2017) another
recommendation for the company is to invest heavily in market research in order to get an in-
depth knowledge of the customer needs and requirements and also to remain updated about
various trends in the market so that the company manufacture and market the products according
to the requirements of their target customer and by complying with the market trends.
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Conclusion
From the above report it is clear and evident that innovation is a very vital criteria for
organizations to succeed in the competitive world as innovation and creativity in the products
and services of a company lends competitive advantage to the company in the market. In order to
foster innovation and creativity in the workplace, it is ideal for organizations to adapt a laissez-
faire style of leadership in which the employees have the authority to take their own decisions
regarding performing tasks in the company but there are certain de-merits which are associated
with laissez-faire leadership and therefore a leader should focus on addressing those demerits in
order to take full advantage of the potential of laissez-faire leadership style.
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