Leadership and Competitive Advantage

This document explores the concept of Leadership and Competitive Advantage. It discusses the benefits gained by organisations through competitive advantage and how leadership plays a crucial role in achieving it.

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LEADERSHIP AND COMPETITIVE ADVANTAGE

LEADERSHIP 1
Executive summary-
Leadership refers to take the initiative to lead the organisation by formulating plans, policies
and strategies for the organisation. Competitive Advantage refers to the benefit gained by the
superiority of the organisation to work better than the competitors in the market do. There is a
direct relationship between leadership and competitive advantage of the company. The
competitive advantage of any firm directly depends upon the effective leadership of the
leaders of the organisation.
The report represents the comprehensive study of leadership and competitive advantage. The
challenges affecting the leadership of the organisation, therefore how competitive advantage
is gained in the challenging environment.

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Contents
Introduction................................................................................................................................3
Leadership in organisations........................................................................................................4
The importance of competitive advantage-................................................................................6
Linkage between the Leadership and the Competitive Advantage-...........................................7
Leadership changes regarding the emerging challenges-...........................................................9
Conclusion-..............................................................................................................................11
References-...............................................................................................................................12

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Introduction
The leadership plays a significant role in the growth and the development of the organisation.
Different organisations follow different leadership styles, according to the structure of their
organisation (Husband and Lloyd, 2019). Proper leadership helps to gain competitive
advantage over the other competitors of the market leading to attainment of the goals and
targets of the organisation. While conducting business globally it is important to have
efficient leaders in order to overcome the global emerging challenges of the organisation, it
helps to develop diversified culture in the organisation by accepting the cultural perspectives
of the organisation and implementing the different leadership styles for forming up the work
relationship more effectively (Longnecker and Insch, 2019). Competitive advantage offers a
bunch of advantages for the organisations holding it. There is increase in the profits of the
company as it contributes in the increased customer base of the company increasing the brand
loyalty across the market (Turner and Mulholland, 2018). The linkage between the leadership
and the competitive advantage leads to the achievement of the objectives of the organisation.
Competitive advantage plays a significant role in transforming the development of business,
as it promotes various developmental factors of the business. In addition, leadership has great
impact in creating the successful competitive advantage in the company as only through great
leadership the goals and objectives of the company achieved effectively (Western, 2018).

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Leadership in organisations
Leadership in organisations requires certain skills which are essential for the leading the
organisation. The foundation of organisation leadership includes the forming up of the
mission, vision, strategies & tactics, and organisational culture. Some of the leadership skills
considered as prerequisite for facilitating leadership in the organisation include the
communication skills, empathy & emotional intelligence, team work, conflict management,
problem solver, adaptable, etc. (Clinton, 2019). To lead the organisation in better way a
leader must possess the skills mentioned above to cultivate the leadership skills at times when
required by the organisation. Strong communication skills is a trait required for the leadership
in the organisation, as through good communication only leader can pass the orders and also
hear from the employees or the subordinates as a feedback or any other issue, suggestion and
idea forwarded by the employee can be received only in the presence of the good
communication skills. The top priority of a leader is to lead the organisation, achieve the
goals and targets of the organisation and the satisfaction of the employees, which require the
emotional intelligence to solve the issues of the employees and to make them comfortable to
share their issues and problems with the leader (Nicholas, 2018). The satisfaction of the
employees under the leadership of the leader will lead to the achievement of the targets by
enhanced productivity. The leader of the organisation should consider the individual goals of
the employees along with the organisational goals as this promotes both the internal and
external growth of the organisation, as it is of utmost importance for the growth of the
organisation (Amarakoon, Weerawardena, and Verreynne, 2018). Similarly, team spirit is
equally important for the long-term success. Collaboration of the employees for the success
of any project or task is extremely important because team effort is greater than individual
effort and is very beneficial for the organisation so as a result, of same, a leader is responsible
for managing the team spirit in the organisation. Leading a team eventually demands lower

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efforts than leading the individual employees of the organisation. A leader alone cannot make
all the decisions regarding the working of the organisation, if he does so, inevitably will fail,
because nothing can replace the team spirit and the collaborative working on any concerned
issue or the topic (Attaran, 2019). Working together on an issue and taking decision with the
concern of the employees eventually helps to get many ideas regarding the concern and helps
to take better decisions for the organisation with collaborative thinking. It is important to
enhance the leadership skills like any other skill in order to get the best out any kind of
situation (Maury, 2018). The easiest way to implement the same is to get the feedback from
the followers or the subordinates, which consequently enhance the areas where the change is
required in the attitude of the leader.
Various leadership theories are applied according to the demand of the situation in the
organisation theories majorly include the contingency theory, trait theory, situational theory,
behavioural theory. The leader has to be available at these given circumstances according to
the demand as the leader is responsible for carrying out the change in the situation of the
organisation. The leadership skills of the leader actually help to apply these theories
according to the circumstances prevailing in the organisation (Scott, Jiang, and Griffith,
2018). The great man theory is a perfect example of the leadership as it describes that the
personal attributes and the divine inspiration is the must requirement of the leadership in any
of the areas. The attributes possessed by great leader differs from that of the normal persons.
The attributes defined in terms of the qualities of leading the change and the inspirational
towards the achievement of goals in any situation. The definition of leadership provided by
the Daniel Goleman says, “Great leaders move us” which means the leadership skills of the
leader should be strong enough to motivate the employees to achieve targets and transform
the working and attitude according to the situational demand. The emotional intelligence is
key tool used to control one’s own emotion, emotions of others and that of group of the

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organisation. Emotional intelligence is a technique or a tool through which the emotions are
handled in a manner not to clash with the organisational rules, policies and the targets of the
organisation.
The change in the environment of the organisation is only constant, so in order to get
adaptable to it the employees follow the leader. A leader is responsible for leading the change
in the organisation. Eventually, the team will follow the leader, according to that the leader
must get adaptable to the changes and sets an example of leading the change (Jones, Harrison
and Felps, 2018). The changes in the working environment can affect the mind-sets of the
employees, in order to help them cope up with the changes the leader has to lead the change.
Practicing the art of leadership also requires skills, because the leader of the organisation also
had to undergo the challenges him / her and then the followers or the employees to get adapt
to it.
The importance of competitive advantage-
Competitive advantage is a trait, which allows the company to perform better than its
competitors. It benefits the company with various advantages, in the form of higher profit
margins, and generates value for the shareholders and the company. The competitive
advantage of the firm helps the company to overcome the competitive challenges of the
market, providing an advantage to the company face the competition with high profit margins
(Fainshmidt, Wenger, and Pezeshkan, 2019). While constructing competitive advantage for
the company one should consider the benefits, target, and the competitors of the company.
The basic strategies used for the constructing or building the competitive strategy comprising
of the cost leadership, differentiation, and focus. These three components help the company
to gain or build the competitive advantage for the firm.

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The cost focus refers to focusing on lower costs at the narrow markets to retain the
investment for the markets with greater scope and potential, to allocate the money and
resources at the wider markets to have more opportunities for growth and enhancements of
the profits of the company (Golivets, and Wallin, 2018). The differentiation of the product
from competitors helps to set the uniqueness of the product. The product differentiation is in
terms of price, quality and brand loyalty. The focus is very important for constructing the
competitive advantage regarding the costs, and the quality of product. It is important to have
competitive advantage for the firm to have better growth opportunities in long-term. The
organisation enjoys long-term success with the competitive superiority of the firm in the
future. There various fields in which the competitive advantage, gained comprises either of,
the product, people, quality, image depending upon the field of excellence of the firm.
Sustainable competitive advantage refers to the competitive advantage, which is not possible
for the competitors to copy or imitate and contains the four elements of value, non-
substitutable, and unique. The ultimate purpose of the competitive strategy is to create value
over and above the competitors (Dorson, 2018).
The RBV theory of leadership refers to the resource based view of gaining the competitive
advantage in the firm through strategic use and distribution of resources to generate the
sustainable competitive advantage for the business.
Linkage between the Leadership and the Competitive Advantage-
There are various linkages between the leadership and competitive advantage, as in the
presence of a good leader the development opportunities successfully tapped. The innovation
and creativity is followed with the as the employees feel motivated with the leaders who
provide the environment wherein employees strive to succeed in their fields in order to be
successful, this consequently helps in the achievement of organisation’s goals. This goes like

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complete cycle, one thing leading to another. Leadership and competitive advantage is
eventually, linked to each other in a process (Feng, Wang, and Lawton, 2019). The
competitive advantage, in the presence of the good leadership can be sustained for a longer
period. Leadership skills are the main essentials of the competitive advantage. With proper
leadership, the organisation will function accordingly, and the goals and targets are achieved
on time and this will help to get the competitive advantage over the other firms (Hallam,
Valredi, and Contreras, 2018). Through effective leadership high productivity and the target
completed is on time, the employees are motivated to work hard following the leader. The
changes in the organisational environment are also led by the leader and then followed by the
subordinates, eventually promotes the competitive advantage. There are numerous plans as
parts of the organisational targets and aims, formed in order to get the competitive advantage
once achieve and implemented. The implementation of the plans is possible only with
effective leadership. There is direct relationship between the organisational leadership and the
construction of the competitive advantage. Effective leadership results in the satisfaction of
employees because the level of satisfaction of the employees reflects the productivity of the
organisation. Effective strategic leaders tend to implicate the promotional changes to enhance
the social prosperity of the business or the organisation.
The linkage between the leadership and the competitive strategy results in the work
environment and organisational structure of the company or the organisation. The work
environment of the company affects the productivity of the employees therefore through
effective leadership, it is ensured that working culture or the atmosphere is maintained
positive. The link between the two aspects of the organisational development facilitates the
accomplishment of both as per the plans and policies formulated by the managers of the
company. It means that leadership and competitive advantage, directly and positively related
to each other. The leadership affecting the competitive advantage reflects the working of the

LEADERSHIP 9
organisation, because the competitive advantage achieved with the adequate efforts and the
proper functioning of the organisation. However, the working depends on the managers and
the leaders of the organisation, proving to be the developers of the company. The leaders
strive to manage the employees whilst keeping their satisfaction regarding the work optimum.
The concept of competitive advantage suggests that the superiority over the competitors with
the effective use of leadership qualities in leading the organisation. The categories of
competitive advantage include the leadership superiority in terms of innovation and
inventions regarding the development and the growth of the organisation. Powerful human
resources assists in taking over the competitive advantage of the competitors because not
every organisation has the effective human resources and this eventually takes them back
from the best ones. Training plays an important role in the enhancement of the required skills
to perform the tasks of the organisation needed or the vacancy. To gain benefit of the
innovative competitive advantage it is prerequisite to have the innovative leaders to initiate
and stand out the plan of the innovation in the organisation (Schoemaker, Heaton, and Teece,
2018).
Leadership changes regarding the emerging challenges-
The emerging challenges occur from the external environment of the organisation in which it
functions. Leaders overcome the challenges of the external environment, through effective
strategic planning of the organisation. The challenges mainly comprise of the political,
economic, social, technology and legal these challenges are the elements of the external
environment (Kremer, Villamor and Aguinis, 2019). To overcome these challenges the
leaders of the organisation needs to take certain steps towards the changes in the form of
leading the members of the organisation and to facilitate the changes occurred through the

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challenges of the organisation. The strategic is a must requirement for facilitating the changes
caused by the challenges of the external factors of the organisation. Leaders responsible for
forming up strategies affecting the organisation at large must consider the interest of the
employees as described earlier the satisfaction level of the employees affects the productivity
of the organisation in order to get the best out of every situation (Sentocnik, Sales, and
Richardson, 2018). Eventually, to face the challenges of the organisation the leaders need to
ensure the maximum productivity so that the profits of the company are not affected at large
because these challenges tend to be devastating at times affecting the organisation adversely.
The definite changes in leadership required for overcoming the challenges depend largely
upon the leader’s decision, as the changes applied, only after the adequate formulation of the
strategies in the organisation, require the consent and collaborative efforts of the team
members of the organisation. The challenges sometimes have positive effects on the
organisation, but depending upon the type of organisation. For example- technological
changes will not benefit every sector of the economy. Similarly, social trends are only
beneficial for the fashion industry. The changes are challenges for one firm and an
opportunity for the other thus the changes in the leadership of the leaders will vary among the
different types of organisations or the company. However, the changes implemented only
through the effective strategic planning by the leaders of the organisation.
The challenges are also named as the stressors varying in terms of the environmental,
economic, legal, technological, and social stressors. These named as such because of the
adverse effect they lay upon the organisation and as these are the emerging stressors or the
challenges. The leaders are responsible for managing the change using different tactics to
motivate the employees to perform their best in the adverse situations. Leadership is about
influencing the employees to work better in the challenges to get competitive advantages
through the challenges by taking or considering the same as an opportunity for the growth of

LEADERSHIP 11
the organisation. Different situations require different response as the leader has to lead the
organisation he/she needs to be ready with the variable ideas and strategies to facilitate the
changes and make the employees follow them correctly. Leading the change requires the
effective planning, excellent communication, identification of the key players, delegating the
tasks, managing the tasks, and holding the accountability of the employees. To influence
change the change leader has to build the common to work upon, clarifying the direction, set
the time limits, and to achieve the targets. Every change in the organisation requires
leadership to implement it across the whole working system of the company (Singer,
Bilimoria, and Shaffer, 2019).
Conclusion-
The overall study of the leadership provides the clarification regarding the concept of
leadership and its relationship with the competitive advantage of the organisation, the role-
play of leadership in generating or constructing the competitive advantage for the company.
Every organisation requires leader in order to formulate the plans and strategies of the
organisation, leadership plays a significant role in the growth of the company. The
competitive advantage of the organisation directly depends upon the type of leadership of the
organisation. Different types of competitive advantages gained with the help of leadership
depending upon the type of leadership applied to the organisation. Various challenges
arriving from the external environment of the company, overcome through the aid of the
effective leadership in the organisation. The leaders motivate the employees to consider the
challenges as the opportunities to perform better and to overcome it gracefully. The
competitive advantage has a huge impact over the growth of the organisation as it allows the
access to more customers and increased profits of the organisation in order to enhance the

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goodwill and the net worth of company in the market and all this initiates with effective
leadership in the organisation.
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