Principles and Practises of Leadership and Management

This report provides knowledge about basic theories of leadership and their suitability in an organisation. It discusses critical issues faced by modern day leaders and explores a case study of PepsiCo's director. The report helps in understanding the essential qualities for a leader and the principles of leadership in modern day business organisations.

Principles and Practises of
Leadership and Management
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TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
CW1.................................................................................................................................................3
CW2.................................................................................................................................................8
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................14
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INTRODUCTION
An organisation is said to be successful when individuals involved in it are working on
the right path. This road of success is developed by a leader and a manager. The consequences of
good leadership can be experienced in the form of quick achievement of goals and objectives,
organisational harmony or balance, etc. In this report contemporary leadership theories and their
application in modern day business organisations has been provided. One can easily understand
these attributes of a person who is visualised as future leader of a company. The first section of
this assessment shall provide knowledge about basic theories of leadership and their suitability in
an organisation. Moreover, critical issues that are faced by modern day leaders while handling a
team or entire institution will also be discussed.
The latter part of this report consists of information regarding case study of PepsiCo’s
director. He has applied an innovative approach in managing work stress and increasing
employee efficiency. The report shall help in understanding basic qualities which are essential
for a leader to manage his activities and the subordinates without losing the essence of
leadership. Moreover, a supportive assessment shall also be provided in this section which will
be derived from the theories like trait and contingency or even behavioural (22 Qualities that
make a great leader, 2017). Basic attributes that are desired by individuals who are going to be
leaded in an organisation like PepsiCo are inspiration, patience, vision and focus. These
characteristic traits and their evaluation will help in understanding leadership practises and
principles in modern day business organisations.
CW1
1) Critical evaluation of contingency theories and trait theories
Over time the perception of followers towards leaders has evolved and changed
according to their needs. The only important thing that has remained constantly applicable in
organisation management and dynamical balance is value of leadership and their basic theories
(Avolio and Yammarino, 2013). Before evaluating different leadership theories and their
application in modern day organisation, it is important to understand what leadership basically is.
A person or an individual who portrays certain extra-ordinary characteristics which are way
deflective from natural behaviour while working within an institution or company then he/she is
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said to be a leader. These behavioural traits include focus, coordination, effective management,
patience, leading or guiding people and the most important is vision. Leadership is often
confused with managerial attributes. A manager is limited to his/her daily goals and targets
which are to be met no matter whatever the circumstances are. But leaders have a vision be it
short term or long term (Chang, Chen and Fan, 2016).
The four basic leadership theories that have been the basis of various researches and
studies are The Great Man Theory, Traits Theory, Behavioural Theories and Contingency
Theories in the chronological order. Historically, leadership was considered as an intrinsic
quality which cannot be imbibed in an individual forcefully according to the Great Man theory.
However, Traits theory guided that leaders are either born or made with exceptional qualities
which they portray to fulfil their purpose (Daft, 2014). Both these concepts make a person
believe that it is not possible to imbibe leadership characteristics in a person.
Considering Behavioural Theories helped in attaining a different perception towards
leadership. It was proposed that human behaviour in a leader is entirely deflective to the traits or
physical characteristics which were initiated in the previous two theories. Hence, business
organisations started changing their viewpoints for selecting a leader. For instance, Henry Ford
was the first person who developed his innovative idea of assembly line manufacturing. His
behaviour was quite different from ordinary individuals which made him a good and successful
leader (Derue and et. al., 2011). There are three types of leaders that are identified in this
theoretical concept. These include autocratic, democratic and laissez-faire. Contradicting to
behavioural theory, a better concept of leadership arrived in 1960s which is termed as
Contingency Theories. According to this theory, modern day civilisation leaders do not portray
one type of behaviour in every situation. Their styles of leading people keep on changing
according to need of situation. For instance, the leader of Red carnation Hotel may function with
democratic or transformational leadership style but during crisis situation, that same person
portrays autocratic or bureaucratic rule. Hence, adaptation of leaders to these fluctuating
conditions is depicted in the contingency theory (Dugan and Komives, 2011).
Every leader is subjected to certain situations while functioning in an organisation
irrespective of its purpose. These situations include managing changes, leading teams, leading
individuals, handling diversity, overcoming critical crisis, etc. Unlike in history where leaders
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were chosen according to their ancestral occupation for example a king’s son will be the next
king or farmer’s son will be the next farmer of the area; modern day organisations totally depend
on the qualities and behaviour of a person that relates him to a leader. Traits theory helps in
understanding these qualities that make a leader (Ehrhart, 2015). Integrity, empathy, compassion,
etc. are several leaders’ traits which are described in this theory. The application of all these
qualities entirely depends on the situation a person or a leader is being subjected to. For instance,
leader of a non-government organisation say Oxfam may have empathy and compassion as well
as strictness and dominance. He portrays empathy when dealing with patients or people who
require social care while on the other hand; he will depict strict behaviour towards his followers
(Fairhurst and Connaughton, 2014).
Modern day organisations must not rely completely on one theoretical concept. Changing
worlds have bought in a lot of diversity in the methods by which people think or perform certain
actions. Hence, it is important to select a leader who is capable enough to cope with changes
effectively (Fullan, 2014). The traits theory helps in recognising individuals who may or can
become an efficient leader. However, contingency theory helps in judging or examining the
validity of decisions that are made in selecting an individual for the position of a leader. The
combined approach based on these two theoretical concepts yields best results. Traits theory
examines external behaviours along with processes that are involved when a person takes
decisions as a leader. On the contrary, contingency theory is based on results which are gained in
different situations by application of traits that depict different leadership styles (Giddens, 2013).
Contemporary theories of leadership are based on the principles of management that are
applicable in the modern era. Today’s business environment requires a different set of skills and
talents in a leader. Apart from traits and situation handling capabilities, the first thing that is
primarily evident in modern day leaders is vision (Goffee and Scase, 2015). People who have the
capability to lead individuals towards a better path of success that not only yields more fame and
money but also gives satisfaction and further guidance for success are the modern day leaders.
Transformational leadership and transactional leadership are two strategic styles of leading
people and organisation which is prevalent in modern day organisations. The basic difference
between these two styles is delegation of leaders with followers and their working style.
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Intellectual stimulation and individualised considerations are the key components which are
involved in these leadership styles (Higgs and Dulewicz, 2016).
An understanding about historical perspectives of leadership can be created when
contingency theories are well versed. The basic essence of this theoretical concept is to
understand leadership in different situations by scaling its variability. Human beings have to take
their decisions according to the particular situation and the impact it will carry. Leaders develop
their leadership style and working structures according to this contingency plan approach in
newer forms of business organisation. It helps in managing employees and the critical situations
strategically.
The critical issues that modern day business organisations are facing include need for
motivation at different level and on a continuous basis, equal rights and opportunities,
requirement of developmental opportunities, etc. Other challenges that are experienced by
leaders are isolation, honest feedback, emotional intelligence, leading frequent changes, getting
wider perceptions, etc. It is important to deal with all these issues and challenges in an effective
way (Klenke, 2016). Considering the theories that are mentioned before, a transformational or
transactional leader who is aware about modern day business dynamics can use contingency
theory as an approach to his leadership style. This can be understood better with an example
which is depicted as follows.
A person is leading a team of ten members in say Marriott Hotel. These ten members are
responsible managers of different departments. This means that sense of responsibility on leader
and these managers is very crucial (Kumar, Adhish and Deoki, 2014). Effective leadership will
be the one in which individuals use their emotional quotient and provide appropriate honest
feedback to the leader about his attitudes and behaviours towards his followers and the
responsibilities. If negative comments are gathered then leader must accept them with grace and
make necessary changes in his working strategies. On the other hand, if positive comments are
gathered then, no ego or feeling of proud shall replace gentility (Latham, 2014). This example
depicts that current leadership is transformational and the leader has great capabilities in taking
the company ahead.
The contrast that is gained when both these theories are applied in a fruitful combination
then modern leadership is said to be prevalent in the functioning (Lynch, 2012). Basically, the
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function of a leader is to lay down the path of work for individuals who are working towards a
collective goal. In contingency theory, the path that is developed by leader takes different turns
and twists depending on the need of situation. On the contrary, traits theory is based on single
attribute that is being displayed by leader in every situation he and his team faces. This can be
beneficial at times but on the same side it can be brutal also. For instance, when a company faces
crisis situation like recession then the leader has to take decisions regarding recruitment and
demotion of some employees. Being a crucial decision, opinions and views from different people
who are skilled in their specialised field is required. But an autocratic leader won’t let this
situation take democratic control (Miner, 2015). This can lead to wrong decision making and
development of negative working atmosphere due to opposition from followers. On the contrary,
democratic or transformational leaders take opinions from everyone including the employees.
He/she will discuss this problem with all employees and then come on a conclusion or decision.
This depicts that traits theory can be helpful in such situations (Miner, 2015).
However, it won’t be incorrect to state that with developments in science and technology,
lifestyle of individuals has changed. Organisations now have different requirements and these
can be fulfilled only through specific skills and techniques. Hence, the call for an advanced
leadership can also be recognised by organisations (Ospina, 2016). Businesses now want to
achieve sustainability a concept that involves development which is not centralised or limited to
the authorities but extended to external stakeholders and the entire workforce. This objective or
idea of functioning is managed effectively when there is balance in the working conditions and
leadership decisions of company heads. They have to consider strategic approaches and
theoretical concepts which have been designed and developed in the past. This will help in
meeting set objectives and goals smoothly and also support in achieving sustainability (Parkay,
Anctil and Hass, 2014).
When a balance is created in exchange of knowledge and actions by a leader then
efficiency is increased in terms of organisational productivity. The principles of leadership that
are laid in these theories help in understanding every aspect which an individual has to address
while handling a team or an organisation (Petan and Bocarnea, 2016). Contingency theory
principles help in understanding that there are no other alternatives in creating better
organisational functioning accept by making quick and practical decisions. While traits theory is
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a bit deflective. Its principle aspects state that the qualities and attributes of a leader influence
him up-to a great extent in making decisions. In such case, it becomes difficult to choose one
particular theory or aspect for maintaining balance in functioning. Henceforth, modern day
leaders try in developing an organisation that is able to cope with different situations in an
efficient way (Salahuddin, 2010).
The contingency theory helps leaders in developing an approach which is based on
consideration, assigning roles, planning and then implementing it strategically. However, traits
theory also has similar attributes but once an individual has adapted to this theoretical
governance then it becomes quite difficult to apply changes. Moreover, followers may or may
not cooperate with fluctuations in leading style as is experienced in contingency theory or
situational leadership (Schyns and Schilling, 2011). But the essence of leadership remains the
same that is guiding individuals in every possible way for at least attaining the goals and
objectives for which they have been working. It is the individual who is appointed as a leader,
who will judge and accept required leadership style that suits his team or organisation the best. It
can be autocratic, bureaucratic or even transformational depending on the traits and
characteristics of the leader and the acceptance of organisation.
CW2
2) Requirements for leading and managing
The role of a leader is to provide help or guidance to his followers at every point while
working in an organisation. Every organisation that has to fulfil its purpose of functioning
requires a leader who will help in providing a path that will lead in achieving this purpose.
PepsiCo was able to achieve such a strategic position in the world due to efforts engaged by
individuals who were leaders and managers of the company. It is important that there are certain
techniques and principles adopted by the organisational heads in leading individuals so that any
sort of distractions or diverging activities are prohibited (Tyssen, Wald and Spieth, 2013).
The requirement for leading and managing newer forms of organisation in current
business environment can be understood using an example which is given further. An
organisation of 20 individuals belonging to diverse culture and educational backgrounds is
formed. The aim of this organisation or say group of individuals is to earn maximum profits in
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just few months. Gradually as their contacts are building and they started earning something by
selling their product, a formation of informal teams or groups takes place (Van Wart, 2013). This
group-ism becomes so dominant that actual essence for which the organisation was formed is
lost. There was no single person who would adhere to objectives and make other focus on the
same. Hence, lack of responsible leadership and management lead to quick failure and
dissolution of the company. When a leader comes in the scenario, there are chances that informal
groups that were formed won’t lose orientation and finally institutional objectives are meant. It
would be unjust to say that company could turn one like PepsiCo or better than the latter one if
effective and efficient leadership with appropriate management is applied (Western, 2013).
Newer forms of organisations are more aggressive, fierce and competitive. This depicts
that chances of clashes and conflicts in different functioning groups is highest. The absence of
leader and manager means there is no chance of recovery from failure. These individuals will
function to adhere individuals with organisational goals and eliminate diversities and
discrimination. As a result, productivity and performance is not hindered. Hence, it is quite
essential to lead and manage newer forms of organisation.
3) Theory and practicalities of competencies
The case study on PepsiCo helps in understanding the important qualities and capabilities
which are necessary in a leader. The director Jorge Rubio is a great example to understand
concept of effective leadership and the techniques through which strategies can be managed and
implemented in the company. Being the head of Customer Strategic Insights (CSI) i.e. the
marketing research department of the company, he had a vision of creating a workspace that
functions with greater abilities other than being an information collection desk. This basic quality
of having a vision makes and the desire to achieve this vision separates an ordinary individual
and a leader (22 Qualities that make a great leader, 2017). This vision of the director is
demonstrated when he stated that he wanted his company to be something like Google’s
corporate creativity centre. A leader who has clear vision and a purpose for doing what is best for
the company is more effective than the one who takes on the spot decisions.
Planning and scheduling is part of the strategy development process. Management is not
possible without an efficient plan. Jorge Rubio developed his strategy with support of the
obtained vision which was to give a flexible and discontinuous approach of working to his
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employees. His strategic planning steps involved establishment of vision, defining of important
tactics and strategies which was followed by proper designing of team (Economy, 2017). This
team was assigned specific tasks and duties that helped in achieving the proposed vision. After
the entire collection of operations was implemented strategically, final execution was done
which involved monitoring and supervision. Furthermore, this description helps in understanding
that proper planning and management of organisational activities supports leaders and his
followers. It reduces chaos and confusion which is often created when strategic planning is not
considered (Chakarabarti, 2017).
Another important quality that was detected in Jorge’s leadership is innovative approach
with flexibility in working. When leaders are self-motivated and inspired by different
perspectives then an atmosphere of positivity is developed in the workplace. For gaining fast
results and extracting more of the skills and talents from the workforce, director of PepsiCo
created a different workspace that was deflective from ordinary workspaces. Today’s
competitive atmosphere and business environment is so fierce that companies or organisations
that do not have innovative leaders will definitely face failure or lack of growth. Hence, it is an
essential characteristic of a leader to be innovative and creative (Leadership Theories, 2017).
This not only helps in bringing better changes in the working atmosphere but also motivates
other employees to develop themselves innovatively and be profitable to the company.
The traits theory of leadership depicts that basic qualities and behavioural attributes
which are depicted by an individual are neither inherited nor imbibed. But modern day business
organisations do not focus on this aspect of the traits theory (22 Qualities that make a great
leader, 2017). It is believed that if effective training and supervision is given to a person with a
possibility to become future leader, then these qualities can be developed. Henceforth, Director
of PepsiCo has given his employees and subordinates an opportunity to develop and become
more creative. He has given an open provision for employees to freely tell about their queries
and legitimate needs which can be fulfilled by the company.
The basic leadership qualities that are demonstrated in this case study include planning,
innovation and developing a vision. Generally, transformational leadership style is the one where
individuals develop a work place which is comfortable for not only the leader but also his
subordinates (Petan and Bocarnea, 2016). The transformational leaders have long term vision
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and aspiration for the company or organisation they govern. PepsiCo will require these basic
skills so that current functioning is not hindered. Productivity levels are entirely dependent on
the skills and competencies of employees or the human resource. A leader helps in managing and
implementing these capabilities of the workforce so that desired results are obtained (Salahuddin,
2010).
The company requires innovation and vision as one of the most important leadership
skills because growing competition can hamper growth and development of the company
(Schyns and Schilling, 2011). It is possible that competitors might develop better products and
services which PepsiCo won’t be able to produce due to lack of innovation and creativity. The
significance of innovation is more in eyes of customers. People are less attracted to products that
are repetitive or continuous in nature. Discontinuity always helps in bringing changes and if
creativity is added to these changes then innovation takes place. Director of PepsiCo developed
this approach and came up with the idea and concept of brain spa as a creative block of
marketing research. If the leaders of this company adapt this approach of innovative strategic
planning then PepsiCo will address sustainable competitive advantage with greater customer
share and better profit margins.
Competencies are the basically abilities of an individual to implement or effectively
perform certain tasks or activities. Leaders are considered as the most important part of a team or
organisation. Future leader of the company shall have competencies like dedication and ability to
inspire other individuals by applying flexibility in working techniques. Such capabilities are
significant to an enterprise that wants smooth functioning (Tyssen, Wald and Spieth, 2013).
Marketing research is a function that operates to collect information from customers regarding
products and services of the company. This profile can become mundane and less interesting if
individuals do not have a creative approach. Henceforth, it can be termed that essential
competencies and leadership skills which are required in the future leader who is going to
replace Jorge Rubio include creativity and innovation as highly important. Rest of the operations
can be smoothly executed if the leader has ability to plan and analyse current market situation.
Apart from being able to perform his organisational role and duty, a leader should be able to
motivate and encourage employees who are working with him/her. For instance, if Director
Jorge Rubio would have developed a working area where no flexibility in approaching the leader
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was given to employees then necessary changes could not be implemented so efficiently.
Moreover, a drift is created when communication channels are not efficient (Van Wart, 2013).
On the other hand, employees could not perform well in their respective operational areas as
compared to their current performance.
Behavioural theory of leadership helps in understanding the impact a leadership can have
on human relations in an organisation (Leadership Theories, 2017). For instance, an effective
leadership will strengthen corporate bonds while an ineffective leadership is not acceptable. It
can create differences amongst employees and also in the relation between employees and
leaders. This scenario is not at all favourable or feasible for the company. In such cases,
behavioural theory helps in analysing self-beliefs and deeds so that decisions can be taken with
more effectiveness. The leadership skill that is required in future leader of Consumer Strategic
Insights is appropriate strategy planning. No vision and objective can be achieved unless there is
planned process involved. Just like the current director Jorge Rubio, one has to strategically plan
his/her actions with a deep analysis about the impact every step can have on organisation,
employees and customers who are involved with the company (Chakarabarti, 2017). This skill
and competency shall help the leader to be more beneficial for the company and develop better
bond with his employees.
Inspiration is an attribute that helps in getting self-motivated and work with more
enthusiasm. A leader who is inspired can develop a vision and efficient strategies that will
automatically be helpful for the organisation (Western, 2013). This quality can be used by the
future leader of PepsiCo for gaining certain learning aspects from Jorge’s leadership. This shall
help him in coping with the current atmosphere and developing a better strategy for future.
Employees’ motivation and encouragement is entirely dependent on leader’s capabilities and
skills. Henceforth, the essential qualities and competencies that are required by the leader of
PepsiCo are innovation, strategic planning and an ability to develop a vision or mission which
will automatically help in devising a path. There is a deep routed interconnectivity amongst all
these qualities. If vision is provided then roadmap for functioning can be strategically developed
and once this development process is complete then, innovation adds value to performance
(Economy, 2017).
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To judge the practicalities of aforementioned competencies and leadership qualities
which are required by modern day organisations, it is important to consider contingency theory
of leadership. It helps in understanding the qualities and behaviour of individual in varying
situations. Planning, flexibility and innovation are the three important qualities which have been
considered for the new leader who is going to replace Jorge. All these qualities are practical and
valid according to the given theory.
CONCLUSION
Basic principles and theoretical concepts of leadership are described in this report which
helps in gaining deep understanding regarding functioning of a leadership in modern day
business organisations. It can be concluded through these findings that both contingency and
traits theory have their own place when it comes to contributions in corporate governances. The
choice of either theory is totally in hands of the respective leader and their organisational
structure. The only thing that is to be considered is acceptance by employees and the ability to
provide great results and outcomes. Henceforth, it is inferred that contingency theory of
leadership is more suitable for today’s business organisations.
The case study on PepsiCo is a great example of effective leadership with valuable
learning. One can easily understand the suitable qualities that are required in an individual who
aspires to become a leader of his/her team or organisation. The director Jorge Rubio’s
inspirational idea and strategic implementation of the same has helped the organisation in
Mexico to develop and produce more productive results as compared to previous governance.
This also depicts that focus, vision and patience in applying and formulating a strategy shall help
in delivering effective leadership in an organisation.
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CW1
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CW 2
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