Impact of Leadership and Strategic Decision-making on Organizational Sustainability
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Added on 2019-09-20
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This dissertation explores the impact of leadership and strategic decision-making on the growth and sustainability of an organization. It focuses on the differences in leadership between public and private sectors and the difficulties faced by leaders from a public organization in a private work culture.
Impact of Leadership and Strategic Decision-making on Organizational Sustainability
Added on 2019-09-20
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Organizational behaviorMasters Dissertation RKC, March 2018Student ID number: 1550809Module name: Intro, Chapters 1-5 - DRAFTAssignment title: Masters DissertationAssignment deadline: Effective number of words used: ContentsChapter 1: Introduction:..............................................................................................................................3Background of the Organization:.............................................................................................................5
Background of Research Topic:...............................................................................................................5Thesis Statement:....................................................................................................................................7Research Aims and Objectives:....................................................................................................................7Research Objectives:...............................................................................................................................7Research Questions:................................................................................................................................8Scope of Research:..................................................................................................................................8Limitations of Research:..........................................................................................................................9Chapter 2: Literature Review:....................................................................................................................10Styles of leadership:..............................................................................................................................10The Public vs. Private sector leader:......................................................................................................11Theories on leadership:.........................................................................................................................14Summary:..............................................................................................................................................18Chapter 3: Methodology:..........................................................................................................................19Data Collection Methods:......................................................................................................................19External and Internal Factors affecting the organization:..................................................................19Leadership Theories:.........................................................................................................................19Personality traits of Managers:..........................................................................................................19Data collection process:.....................................................................................................................19Data Analysis Methods:.........................................................................................................................20Secondary Research Analysis:............................................................................................................20Case Analysis:....................................................................................................................................20Chapter 4: Results:....................................................................................................................................21Organizational Situation Analysis:.........................................................................................................21SWOT Analysis:..................................................................................................................................21PESTEL Analysis:.................................................................................................................................24Leadership Traits Analysis:.....................................................................................................................25Transactional Leadership Theory:......................................................................................................25Transformational Leadership Theory:................................................................................................26Behavioural Leadership Theory:........................................................................................................26Contingency Leadership Theory:.......................................................................................................26Trait Leadership Theory:....................................................................................................................27Great Man Leadership Theory:..........................................................................................................27
O.C.E.A.N Big Five Personality Theory:..............................................................................................28Strategic Decision-making Analysis:......................................................................................................29McKinsey’s 7-S Model:.......................................................................................................................30Chapter 5: Conclusions:.............................................................................................................................33Bibliography:.............................................................................................................................................35Chapter 1: Introduction: The researcher studies the impact of leadership and strategic decision-making on the growth and sustainability of an organization. The success of leadership also depends on the context and the scenarioin which the leader is required to offer his leadership. For example, a manager who has worked previously in a public organization and has been an extremely successful leader in the organization
might not be able to offer the same quality of leadership in a private organizational setup and culture. This is implied as the work culture of a public-sector organization is entirely distinct from that of a private firm. This occurs primarily due to the separate business motives of public and private sector firms. In case of the public-sector organizations the focus of the management is not on the making of profits. It is rather based on serving the people of the country with a variety of products and services that will help them in different aspects of life. The idea is to ensure that the services and products those are offered to the customers are ethical, fair and just because the people of the country are paying taxesfor various products and services that they are purchasing from different private and public-sector organizations.The citizens of the country expect that they receive true and fair products and services from the public organizations in return for the taxes they are paying to the government. Therefore, the management personnel have the focus to offer the services to the people as per their desired expectations. The publicorganizations do not focus much on the profitability and therefore, the minds of the managers are not too much inclined towards profitability and extreme competition. In case of the private sector firms the situation is entirely different. The primary objective of a private sector firm is to make profits and ensuresustainability. The customer service is definitely important to the private sector establishments howeverit is not the primary focus of the firm as the objective that gains precedence in case of private sector organizations is the profit-making. Therefore, it is extremely essential for an organization to understand the impact of the leadership style on offering prudent managerial decision-making. It is always advisablefor an organization to recruit leaders from the same background for ensuring that the leader is able to understand the nature of the business and the organizational objectives effectively.The research questions were developed to address leadership. They are divided into the Primary and theSecondary Research Questions.The research focuses on leadership, decision-making, and their impacts on sustainability of an organization. The research attempts to discover the various traits and characteristics of leadership in terms of the ways it differs between the managers in the public and private sectors. The researcher also attempted to determine the impacts of leadership traits on managerial decision-making along with finding out the impact of managerial leadership on the sustainability of an organization. For this particular research study, the case of a medical device group has been investigated. The company manufactures and sells various emergency drugs and medical devices in around the world. The organization markets its products across all continents with focus on the US, China and a few other Asian countries. Three years back, the company has entered into a merger with one of its suppliers and after that some issues have emerged related to the quality of some of the medical products those needed to be recalled. There was some lack of managerial leadership and effective decision-making that was observed following the appointment of a new Chief Executive Officer (CEO). A CEO that was appointed as the head of the newly formed company. This decision to appoint a new CEO was later on speculated to be non-effective and counter-productive for the organization. The current CEO belonged to a governmental organization that was a part of the non-profit seeking sector of the industry. The individual lacked the managerial leadership and decision-
making skills required in a much competitive private sector. Moreover, the CEO was not a person from the medical background and was not able to provide an impactful and goal-oriented leadership in this newly formed organization. The leadership skills nurtured and developed in the public-sector are quite different than those needed to direct a private sector organization which has more competitive, dynamic, and different work culture. Prior researches have revealed that qualities and traits of leaders tend to differ across the public and private sectors because of several factors like difference in business objectives, work culture, employee relationships and others [ CITATION Jon10 \l 16393 ] This makes it challenging and difficult for a person coming from the public-sector to provide effective leadership in a private sector organization. This is the same scenario with the organization referred to in this research. Background of the Organization:The organization referred to in this research study is an enterprise that deals with the production and distribution of various medical devices and emergency medicines across the world such as the US, China,and many other Asian nations. The medical devices industry is booming across the globe with the unprecedented growth and advancement in technology in this sector and the market opportunities are increasing every year as the overall market awareness about healthcare products have increased over time [ CITATION Shi14 \l 16393 ]. The organization has recently undergone a change where it has entered into a merger and acquisition with one of its American suppliers. This has called for a change in the management strategies and organizational structure. The new CEO of the organization happened to be one of the existing shareholders of the company who has been appointed as the CEO based on his warm relationship with the current management and good reputation. He belonged to a public-sector organization and lacked the experience and expertise to lead in a private sector enterprise. Moreover, he was not from the medical background and therefore, there were some emerging issues related to his style of leadership and organizational decision-making. There have been several issues related to the quality of some of the products sold by the company of late. This has been attributed to the lack of proper management and leadership from the top-level management under the new CEO that has been responsible for lack of adequate employee motivation and that culminated into some unethical actions taken by some management personnel like purchasing of low quality of raw materials to enhance profitability. Therefore, the research has been undertaken to determine the areas where the leadership and management under the new CEO has gone erroneous and a number of bottlenecks has emerged. Now, the management is thinking of enhancing the revenue through growth in new market segments by reducing overall cost of sales and raising profitability. The management also wishes to optimize the marketing and business development departments by creatinga single marketing department serving across all the different territories of the business. The management has plans to enhance the investment in research and development such that new technologically upgraded products might be produced and sold in order to achieve growth and sustainability in the dynamic market environment. The management has also planned for reducing the production cost and starting up a new production facility in the US and open up new sales branches in the Indo-China markets
Background of Research Topic:The research addresses various concepts of leadership, organizational decision-making and organizational sustainability. The researcher attempted to establish a link between the management leadership, its impact on decision-making, and the organizational sustainability. This chapter reviews theconcepts in detail.Organizational Leadership:Leadership is one of the key elements that determine the future of an enterprise. Every enterprise requires effective and strong leadership for achieving optimum effectiveness. Organizational leadership encompasses human psychology along with prudent business tactics. The leadership that is provided by the management personnel or the managers within the organization needs to be relevant to the currentbusiness dynamics. Leadership should ensure that it is able to guide and motivate the subordinates in tough times of the organization and yet be able to make the business grow and sustain amidst such crisis [ CITATION 16P14 \l 16393 ]. An effective leader should be able to implement proper control and coordination among the group members such that they obey the instructions. In this regard it should be understood that organizational leadership is not about dominating and dictating the subordinates. It is more about offering guidance and direction to the subordinates such that they are able to understand their respective job responsibilities and able to achieve their individual goals and objectives along with those of the organization. Therefore, an efficient organizational leader should be a selfless individual with the focus on being the mentor, role model and the one that leads from the front. This will inspire the juniors to look up to him and respect him as an able leader in the organization [ CITATION Man1715 \l 16393 ].Different forms of Leadership:Leadership in organizational context can vary by type depending on the personality and attitude of the leader. The most popular types of leadership are the Autocratic, Democratic, Transactional, Transformational, Laissez Faire, and Situational. The researcher elaborates on these types later in this paper.Differences of Leadership in Public and Private Sectors:Leadership traits are found to differ across the private and the public sectors. This results from differences in the goals and objectives of public and private sector organizations. Some of the major differences include the strategies such as, for a private sector firm, the emphasis is on generating the maximum possible financial returns on investments for the benefit of the stakeholders [ CITATION Get17\l 16393 ]. In the case of the public-sector organizations, the main business motive is to offer various products and services for the benefit of the public. Profitability is not the primary objective of this type of organization. Apart from this, the private sector organizations are found to have more clearly defined objectives focused on enhancing profitability as compared to the public-sector enterprises where the clarity of goals and objectives of the employees is much lower [ CITATION Get18 \l 16393 ]. This is one ofthe prime reasons behind the form of leadership varying between the private and the public sectors. The other major area of difference between leadership traits in public and private sector organizations is
the stakeholder expectations. In the case of the public-sector organizations, the major stakeholders are the public or the citizens of the country [ CITATION JDu13 \l 16393 ]. Their expectation is to make the most efficient use of the tax money that they are paying to the government. They expect products and services designed to suit their needs and demands directly from the government. On the contrary, there are several stakeholders in respect of a private sector firm such as investors, suppliers, employees, customers, etc. Handling the demands of the stakeholders is much more challenging and requires much intricate and varied strategy to satisfy the demands of each one of them. Thus, leadership traits and characteristics need to differ in case of handling stakeholder needs in case of public and private organizations [ CITATION Joh132 \l 16393 ].Organizational Decision-making:Decision-making is one of the key functions of a manager in an organization. Some key strategic decisions are undertaken by the management personnel. The others must be addressed by the managers on a regular basis in their respective departments within the enterprise. This decision-making process needs to be done in several phases sequentially in order to ensure that it culminates into a prudent strategic decision in the end. There are seven steps involved in a prudent decision-making process. These steps would be discussed in the literature review.Leadership and Organizational Sustainability:Modern organizational leadership should culminate into achieving long-term sustainability of not only the organization but also its various stakeholders. Managerial leaders should play the role of sustainableleaders. It refers to the managerial decision-making and strategies focused on the well-being of the various stakeholders such as employees, customers, investors, suppliers, and others. The objective of this form of leadership is not restricted to profit making and achieving of personal objectives only, but also achieving a holistic sustainability for the organization and all its stakeholders. An organization operates within the society and community and therefore, leadership should endeavour to ensure sustainability and development of the society, community and environment as a whole. This has become an important aspect of managerial leadership, especially in this era of globalization [ CITATION Lig14 \l 16393 ].Thesis Statement:The thesis statement for the research aims to validate the expected outcomes of the research. For, this particular research, the thesis statement is as follows: “Organizational leadership is one of the key factors that influence the managerial decision-making in order to achieve sustainability of the enterprise.”Research Aims and Objectives: Research Objectives:The objectives of this research are enumerated as follows:
Identifying the impact of organizational leadership on prudent strategic decision-making;Determining the differences in leadership between a public and private organization;Assessing the difficulties those might be faced by a leader from a public organization to lead in a private work culture;Ascertaining the required changed organizational structure to cope up with the changed organizational strategies; andThe extent to which successful leadership and strategic decision-making can ensure organizational sustainability.Research Questions:Primary Research Questions:Is it possible for a manager from a governmental sector who has a combination of traits such as autocratic leadership style to provide effective leadership in a private sector organization after a merger?Can a governmental sector manager succeed in adopting the different business motives of a private sector organization?Secondary Research Questions:The primary research questions has led to the development of the secondary research questions those are as follows:What is the best-suited structure for the company to ensure that it regains the lost stability?What are the effective strategies needed to ensure growth and sustainability?What are the effective traits and style of leadership for ensuring that the company is able to achieve the desired targets?Scope of Research:The researcher attempts to identify the impact of leadership on organizational sustainability. The aim of the research was to determine the consequences of difference in leadership styles and traits owing to the variation in the work cultures between public and private sector organizations [ CITATION Jes10 \l 16393 ]. The research tried to identify the major causes of differences in leadership between a private and public-sector organization. Through the course of the research study it has been identified that
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