The Impact of Leadership on Employee Performance

This assignment delves into the crucial connection between leadership styles and employee performance. It examines various theories of motivation, including Maslow's Hierarchy of Needs and McClelland's Achievement Motivation Theory, and analyzes how different leadership approaches, such as transformational and transactional leadership, influence employee engagement, job satisfaction, and ultimately, organizational success.

Running head: INTRODUCTION TO MANAGEMENT
Introduction to Management: The Inconspicuous Carlos Slim
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INTRODUCTION TO MANAGEMENT
Executive summary
This report tries to analyze and reflect on various theories related to leadership styles,
motivation, need and power in organizational structure. The report explores the various theories
in order to understand the leadership styles and success of Mexican business tycoon Carlos Slim
Helu. The first part of the report explores the corporate social responsibilities and defines how
philanthropy is different from CSR and ethics is a significant part f it. Carlos Slim gives
immense importance to corporate philanthropy as it ensures sustainable reputation, controlled
market and customer efficiency. In depth analysis of various theories and the business practice of
Carlos Slim Helu reveals that he does not stick to any specific theories or rules; he combines
various methods or applies different methods in different situations that ensures his never ending
success.

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Table of Contents
Introduction......................................................................................................................................4
Corporate Social Responsibilities (CSR).........................................................................................4
Philanthropy.....................................................................................................................................4
Ethical practice................................................................................................................................5
The personal philanthropy of Carlos Slim been a support to his business interests........................5
Leadership styles and theories.........................................................................................................6
Traditional leadership styles........................................................................................................6
New leadership styles..................................................................................................................6
Transactional leadership style..................................................................................................7
Transformational leadership style............................................................................................7
Theories of leadership......................................................................................................................7
The leadership approach of Carlos Slim Helu.............................................................................8
Motivation Theories.........................................................................................................................9
Maslow’s Need Hierarchy...........................................................................................................9
McClelland’s need theory..........................................................................................................10
Process theories of motivation...................................................................................................10
Reinforcement theories..............................................................................................................11
Motivation under the leadership of Carlos Slim............................................................................11
Power.............................................................................................................................................12

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Sources of organizational power...................................................................................................12
Legitimate power.......................................................................................................................12
Reward Power............................................................................................................................12
Coercive power..........................................................................................................................13
Sources of Personal power.............................................................................................................13
Expert Power.............................................................................................................................13
Referent Power..........................................................................................................................13
Power of Carlos Slim.....................................................................................................................13
Conclusion.....................................................................................................................................14
Reference.......................................................................................................................................15

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Introduction
The corporate social responsibility of an organization or leadership style mainly focuses
on the economic and ethical aspects. Through the CSR model the organizations integrate ethical
regulations that the company follows in their business practice. The organization fulfills its
responsibilities towards the community by implementing this model. It has been observed that
often the people mistake corporate philanthropy as corporate social responsibility. Before
analyzing the philanthropic activities of Carlos Slim Helu in connection with him ethical practice
it is important get the theoretical knowledge about the corporate social responsibilities,
philanthropy and ethics.
Corporate Social Responsibilities (CSR)
There can be several types of corporate social responsibilities. The ethical CSR is the
organization’s fulfilling the ethical, legal and economic responsibilities (Suliman, Al-Khatib and
Thomas 2016). While engaging in strategic CSR the organization engages in community services
that help the company to achieve the strategic goals. In the altruistic CSR the leadership of an
organization goes beyond the responsibilities of ethical CSR and engages in philanthropic
responsibilities in order to help the needy community irrespective of its strength of benefit
generating (Christensen, Mackey and Whetten 2014). Through various CSRs the company
achieves various steps of development. In Corporate Social Responsibility along with the
philanthropy, ethical and legal community standards, acting as a responsible corporate citizen
and achieving sustainability.

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Philanthropy
Corporate philanthropy is just a part of the corporate social responsibility. The global
environment of business and competitiveness are changing and to hold the value and reputation
the corporate organizations engage in strategic philanthropic initiatives (Meister 2012). The
corporate philanthropy can simply be defined as the organization’s engaging in greater
cooperation with the communities.
Ethical practice
Business ethics leads the company to think beyond the profit and involves in a business
of trust and honesty. Most organizations set an ethical standard that they follow for achieving the
efficiency and sustainability (Laasch and Conaway 2014). The companies think beyond just the
traditional profit based practice and provides a foundation for moral values and business
priorities. Many recent legal and ethical scandals have highlighted the need for ethical practice in
the corporate organizations (Soltani 2014). The ethical practice surrounds the corporate social
responsibilities and other aspects like the leadership style, addressing globalization, fair trade,
social enterprise and sustainability.
The personal philanthropy of Carlos Slim been a support to his business interests
World’s richest man Carlos Slim Helu had engaged in significant philanthropic initiatives
in Mexico through spreading internet. In recent past years his charitable foundation Telmex
Foundation and Carlos Slim Foundation have donated about 8 billion. Carlos is donating 3
million in providing high speed internet through Connect2Compete to Latino families of USA
(Katz and Levine 2015). Carlos has been engaged in various businesses like and philanthropic
interests vary as well. He had donated 300000 bicycles to help the poor rural Mexican children,

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maternity care to a million of mothers and provided 800000 surgical operations free and 100000
bail bonds for first time convicts (Kandell 2013). Few have criticized Carlos Slim Helu’s
philanthropy as they accuse him of manipulating the telecom business of the country by blocking
other companies and the damage created by it cannot be compensated by his philanthropy
(Davies 2015). He promises to donate a large part of his wealth to the community service in near
future. The company has been donating charity for a long time in large number without any
ethical compromise.
Leadership styles and theories
Traditional leadership styles
In the traditional leadership practice following are the certain styles that have been
adapted by various organizational leaders. In the directive leadership type the leader instructs the
subordinates what exactly they need to do in order to fulfill the organizational goal (Kalaluhi
2013). The leader holds the maximum authoritative power over the organizational activities. The
autocratic leadership style is similar to this but with more emphasis on tasks as the leader does
not let the subordinates take part in the decision making. In the consultative leadership style the
leader asks for suggestions from the team members during the decision making (Gonos and
Gallo 2013). This is also task oriented like the directive leadership style but values the opinions
of the employees as well. The participative leadership style encourages the leader to act like a
team member and discuss decisions among the team members (Girma 2016). Every other team
member plays equal significant role in the final decision making. This style is also termed as the
democratic leadership style. In the negotiative leadership style the leader initiates a political
approach where he incorporates personal decisions and incentives are used for utilizing certain

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purposes. In the delegative leadership style the leader does not take active participation in the
decision making and gives the responsibility to his team members.
New leadership styles
According to Burns (1978) the new leadership model can be categorized in the following terms.
Transactional leadership style
This leadership style allows the leaders to give the employees rewards because of their
performance and effort. The leader focuses on bigger performance goals so that the organization
achieves high performance vision. The leaders encourage the employees to engage in certain
strategies in order to work for the desired vision. This leadership allows the employees to
establish effective relationship among the team members by stressing on certain specific goals
(Hamstra et al. 2014). The leadership style includes exception based management, contingent
awards and laissez faire. The leader expects their employees to have the same commitment and
employs training and motivation to enhance their performance.
Transformational leadership style
Transformational leadership enables the leader with the power to motivate and inspire the
subordinates beyond just the assigned tasks (Wang, Demerouti and Le Blanc 2017). The leader
can implement changes through this leadership style which is primarily based on the
transformational model. The present situation gets improved through this style and most issues
are resisted before they start affecting. Other than these there is charismatic leadership style that
helps the leader to lead the employees towards his desired direction.

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Theories of leadership
The theory that is most suitable discussing his leadership style would be Situational
Leadership Theory. The Situational Leadership Model is developed by Ken Blanchard and Paul
Hersey during 1970s. The situational leadership model is based the leader’s behavior including
his words and actions both as presented to his subordinates (McCleskey 2014). The job related
maturity plays major role in determining the leader’s behavior. The leadership and the
management activities both are equally important for this model that successfully enhances the
organizational performance. The four aspects that the model focuses on are Directing, coaching,
participating and delegating.
The leadership approach of Carlos Slim Helu
The leadership contingency theories tell that no leadership style is best style as certain
style is effective in certain situation. Therefore it is most effective for the leaders to be engaged
in the various leadership styles like Carlon Slim Helu does. His leadership style is not definite as
he changes it according to the situations. At certain section of his business he engages in
autocratic leadership strategies focusing only on tasks and in other circumstances he applies
transactional leadership style and gives more importance to people oriented projects. At certain
phases the transformational leadership style is dominant as the specific schedules and gradual
growth are in action. The leadership style of Caros Slim Helu thus can be defined as the mixed
leadership style where transformational and transactional styles both get merged or separately
used. However he is not considered to be a charismatic leader as Martinez (2013) discussed that
not many people in the global market outside Mexico and USA know him (Combe 2014).

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Figure: Situational Leadership Model (Source: McCleskey 2014)
Motivation Theories
Maslow’s Need Hierarchy
The theories that focus more on the individual motivation through finding out personal
needs are considered as the content theories of motivation. The classic definition defines
motivation as an internal process of directing, energizing and sustaining human behavior (Reeve
2016). Psychological drives act as the key drivers for the motivation (Maslow 2013). If the
leadership is able to establish proper motivation an effective relationship can be built between
the employees and the organization (Kuppuswamy et al. 2017). Maslow has described five
levels of need like psychological need, need for affection, safety, esteem and self actualization.

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The lower levels of the need hierarchy are fulfilled by the management leadership in order to get
the maximum employee efficiency and improved organizational performance.
Figure: Maslow’s Need Hierarchy (Source: The Wall Street Journal 2014)
McClelland’s need theory
McClelland’s need theory discusses three types of need such as need for achievement,
affiliation and power. According to McClelland the employees with high need for affiliation
generally do not have much position power and need to work on building interpersonal
relationships (McClelland 1965). People with high need for achievement show personal
involvement in performing task and through performance feedbacks they aim to achieve difficult
goals.
Process theories of motivation
In the equity theory the employees evaluate their performance at regular interval that
leads them to realize the difference between his effort and the effort by his fellow employees. the

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expectancy theory highlights the involvement of the employees’ cognitive process and decides
which process they prefer. The Porter Lawler model integrates all elements from other
motivation theories and highlights that individual theory is not enough for achieving the goals
and a more integrated approach is required (Lawler and Porter 1967).
Reinforcement theories
Positive reinforcement allows the leaders to appreciate the employees with positive
feedbacks if they are demonstrating positive performance. Reward is significant parts of the
positive reinforce policies. Negative reinforce allows the leaders to eliminate undesirable
consequences. Punishment ensures elimination of positive consequences to lower the chance of
undesirable behavior. Extinction or lack of reinforcements can affect organizational behavior.
Motivation under the leadership of Carlos Slim
As we discussed in his philanthropy it has been noticed that he looks for every basic need
not only of his employees but even non employees. The 10 principles by Carlos Slim that the
employees of Telmex follow express how the needs of the employees are addressed (Helú 2017).
The company provides the employees with basic psychological needs by giving them right
wages. The company ensures the security of the employees as they believe the employees are the
important asset of the company. Carlos Slim believes that the control of the company should not
be limited just by the leaders the employees play significant role and the collaboration is
necessary for the desired growth.

INTRODUCTION TO MANAGEMENT
Power
Power can be defined as the ability to influence people and it can come from various
resources. French and Raven have explained that power can of two kinds such as organizational
power and personal power. The personal power is more effective in maintaining the consumer
satisfaction, employee efficiency and commitment than the organizational power. The coercive
power from the organizational power has negative impact on the employee outcomes.
Sources of organizational power
Legitimate power
Legitimate power is given to the person based on his position in the organizational
hierarchy (Gregoire and Arendt 2014). The organization gives the specific person some specific
power and he can use them according to the need of the organization. The formal authority is the
leader of the organizational management and generally he holds the maximum power over the
organizational activities. In the practice of legitimate power, the leader expresses his decisions
and the subordinates follow those.
Reward Power
The reward power enables the leader to get the things done through rewards or
incentives. The rewards can be monitory, promotional or through other means. The employees
value the rewards most so the leaders can control and influence the employee behavior through
the rewards.

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Coercive power
Coercive power influences the leader to coerce the employees if they are not meeting
their expectations (Pierro et al. 2013). This power is generated through imposing of certain
strategies like strict deadlines or more work hours or punishment.
Sources of Personal power
Expert Power
The expert is someone who is recognized by his skills, knowledge and abilities. This
power enables the expert to gain respect, reputation and influential power in the organizational
hierarchy (Ojo, Ree and Carretta 2016). The legitimate power is achieved through the expert
power. The employees attribute expertise and knowledge to the experts.
Referent Power
Referent power is largely depended on the individual personality(Ojo, Ree and Carretta
2016). The charismatic leader often shows this attributes as through his personal relationship
with his employees he gets certain things done. As the employees like or respect the leader that
provides the leader with this power.
Power of Carlos Slim
The expert power is related to the influence. Influence enables the leader to have an effect
on the employees so that they work towards his intended way. The various sources of power
seem to be completely separated but a close observation reveals that they are not so separated.
The expert power from the personal power sources is more present in the evident. However

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experienced leaders like Carlos Slim, combines various sources of power depending upon the
requirement of certain situations.
Conclusion
The business strategies and leadership styles Carlos Slim Helu has reached him the tip of
the success. The long in depth discussion over his philanthropy, leadership style and power
highlights that the business practice of Carlos Slim is not limited or static and cannot be defined
by a single category. They are as varied as his number of various businesses. He understood the
demand and implemented methods that were ahead of contemporary time. The motivation and
leadership theories reflected on his business strategies but mostly in combination or with close
relationship with one another. Carlos Slim Helu is a successful example of a global leader who
has successfully set an example to the entire business world as an successful, effective and
influential leader.

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