Leadership Theories and Practices: Assignment 2, Semester 1

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Leadership: Theory and Practice
Assignment 2 (LO2 and LO4)

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Executive Summary
The assignment studies the notion of authentic leadership and its importance in growing an
organization and bringing about a general sense of efficiency internally. It further discusses the
significance of the model along with certain theories and frameworks, and subsequently
underlines a few relevant examples to solidify the importance of authentic leadership, especially
during scenarios of change and alterations.

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Table of Contents
Introduction......................................................................................................................................3
Concept of authentic leadership.......................................................................................................3
Principles of authentic leadership....................................................................................................3
Significance of authentic leadership................................................................................................4
Theories related to authentic leadership..........................................................................................5
Importance of demonstrating responsible leadership during a process of change with relevant
examples..........................................................................................................................................7
Conclusion.......................................................................................................................................9
References......................................................................................................................................11

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Introduction
In the context of the given scenario, the organization of Shell Corporation has been chosen to
discuss the idea of authentic leadership and how the values of authenticity and responsibility are
crucial specifically during situations of modification or drastic changes. The assignment is based
on relevant learning and observations gained from a personal perspective while working as a
manager in the organization of shell Corporation.
Concept of authentic leadership
The fundamental principles that the idea of authentic leadership is based on are that of legitimacy
and transparency. Authentic leaders emphasize on growing the organization through their
reliance on honest, meaningful relationships along with a high degree of integrity and
truthfulness. These individuals are highly self-aware and often focus on creating a system of
trust, be it with the key stakeholders, the employees within the organization, the general society
or the consumer groups served by the company (Sendjayaet al., 2016). The history of the concept
of authentic leadership and its various other related values traces back to the ancient Greek
civilization, where notable thinkers often stressed on the value of authenticity to progress in a
controlled manner. In the context of organizational and business enterprises, the idea of authentic
leadership sprung up during the early 1960’s which essentially emphasized on how companies
should stay true to their values and reflect the same in the products and services they offer. The
concept has undergone a plethora of research and prolonged assessment in the recent times, but
the model as a standalone functioning theory is still in its nascent stages owing to the lack of
empirical data and the high degree of subjectivity involved therein (Reganet al., 2016).
Principles of authentic leadership
Authentic leadership by essence functions on the basis of certain key principles, which have been
relatively acknowledged by organisations and enterprises in a global perspective. Some of these
principles have been discussed below, and are as follows.
Self-consciousness: Self-consciousness and awareness is the core principle of authentic
leadership, based on which several organizations across the world have grown and expanded in a
sustainable manner while simultaneously avoiding any form of negative press and societal lash

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back. Authentic leaders are highly reflective and fixated on their own weaknesses, strength and
belief systems and are very likely to modify them to further adhere to the concept of authenticity
in leadership (Alilyyaniet al., 2018)
Relational lucidity: Relational lucidity essentially refers to the competency of an authentic
leader to share personal thought processes and emotions in an unrestricted manner without the
presence of any unnecessary or inappropriate additions or modifications. The lucidity or the
transparency is another core principle on which the whole concept of authentic leadership stands
on (Hirst et al., 2016).
Equitable understanding: Equitable understanding refers to the ability of an authentic leader to
understand and comprehend contradicting viewpoints from external parties and not attack them
without identifying the cause or the basis of the same. This system of maintaining an equity
further translates into the operations of an organization that is run by an authentic leader, and is
generally perceived positively by external agents and forces (Sidani and Rowe, 2018).
Inherent moral and ethical standpoint: Authentic leaders further tend to have a well well-
founded and concrete system of moral values and ethics, and do not typically function beyond
those boundaries. This also translates into the business decisions and actions that are undertaken
by the organization at large, and typically entail the notion of strong value-based operational
measures (Baron, 2016).
Significance of authentic leadership
Authentic leadership is extremely important, especially in the hostile and volatile conditions that
exist predominantly in the current global business environment. Creating a system of trust within
the organization, whereby the employees, divisions, teams and the overall enterprise in general
has faith in the leader is key in maintaining any form of effectiveness within the leadership (Liu
et al., 2015). This system of mutual trust comes from the knowledge of integrity, whereby the
actions of the leader dictate the subordinates in firmly believing and acknowledging the values of
integrity and transparency within the thought process of the leader. Moreover, authenticity in
leadership often leads to leaders and subsequently their organizations acting in a rightful manner
despite the presence of opposing thought processes which although more profitable may be
unethical or wrongful by nature (Leroy et al., 2015). Acceptance and validation are largely
disregarded in the process, which fundamentally leads to a more ethical standard both in the

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business operations as well as the simultaneous impact on the overall society (Shamir and Eilam-
Shamir, 2018).
Theories related to authentic leadership
Authentic leadership by nature cannot be proved to be significantly standalone model owing to
the absence of concrete and empirical data and the inherently subjective nature of it (Agoteet al.,
2016). However, several scholars and thinkers identify the concept of inspiration and motivation
within the aspect of authentic leadership and thereby relate the same to Max Weber’s theory of
charismatic leadership. Weber categorized leadership styles into three distinct segments, which
were bureaucratic, charismatic and traditional. However, he also put forward that the concept of
leadership was extremely subjective and dependent on contingent situations, because of which
leader would often have to inculcate a variety of aspects within these styles in order to maintain
the effectiveness. Weber further added that leadership entailed primarily two distinct paradigms
that were transactions and transformations. While transactional leaders solely focused on
maintaining the productivity, transformational leaders stressed on inspiring and transforming the
subordinates and held perspectives that could be different from given societal constructs and
proven measures of working. It is this aspect that finds a certain degree of interrelationship with
the concept of authentic leadership.

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Figure 1: Max Weber’s theory of leadership
(Source: Woods, 2016)
Goleman’s theory of emotional intelligence is another framework that finds a certain degree of
interrelationship with the concept of authentic leadership. Primarily a behavioural approach,
Goleman’s theory essentially described emotional intelligence as a cumulative presence of five
key components of self-awareness, empathy, self-regulation, social skills and motivation. Several
noted thinkers and scholars have opined that these factors are integral parts in the concept of
authentic leadership, and no leader can be effective in a true sense without integrating these
aforementioned values.

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Figure 2: Goleman’s theory of emotional intelligence
(Source:Mathew and Gupta, 2015)
Importance of demonstrating responsible leadership during a process of change with
relevant examples
Organizations and enterprises go through changes in operations and business decisions largely
over a course of time, and these may include drastic changes that are inherently overwhelming or
minor changes that do not bear a permeating impact within the enterprise. During these scenarios
of changes and alterations, responsibility and authenticity within the leadership become all the
more important to reduce the impact of these changes internally as they might entail a sense of
negativity both in theory as well as practise. Communication becomes an extremely key
component during scenarios of change, as leaders must maintain effective channels in order to
avoid any sort of confusion and misdirection within the employees, stakeholders and the
consumers. The concerns, queries and doubts must be addressed in a timely manner to further
reduce the negative impact that a change could potentially bring to the organization. Changes
and alterations may be forced or unforced, and resistance may be inherent by nature in certain
scenarios. The primary benefit that authentic leaders can reap by ensuring responsibility and

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accountability is the successful management of fears and anxieties among the employees,
stakeholders and the consumers. Technological changes and disruptive innovation processes can
be significantly damaging, especially to the internal components of the organization, and this is
where leaders must ensure that the fears are managed in a relatively healthy manner and focus on
familiarity with the change.
Authentic leaders further ensure that an overall sense of coordination and collaboration is
maintained among the various components within the organization. This is another massive
benefit that organizations witness during scenarios of change, as they inherently bring about a
perception of cloudiness and uncertainty. The coordination is integral in maintaining the
operational flow and not damage the organization internally, and authentic leaders must display
the values of accountability and responsibility to accommodate the change in a more efficient
and speedy manner which subsequently mitigates the negative impacts that the change could
potentially entail.
Managing and comprehending the responses to change both from a personal perspective as well
as the outlook of the employees and stakeholders is another aspect which further solidifies the
importance of responsible leadership during situations of change. When leaders are open to
opposing viewpoints and learning along the way, these changes can be handled and mitigated in
a much more efficient manner while simultaneously developing the system of trust within the
internal components of the organization. Dealing with contingent situations and scenarios of
grave ambiguity and uncertainty are key factors that inherently come within the purview of
leadership and naturally, the values of responsibility and accountability become of prime
importance.
A relevant example in this context would be the Shell Corporation’s 2004 oil crisis which
significantly affected the company and brought down the share price by around 30%. The
scenario further degraded as the then chairman of the oil group, Sir Philip Watts, left the
company. The situation was picked up by the new chairman, Jeroen van der Veer, and der Veer
quickly brought about a structured transformation within the entire operational functionality of
the corporation at large (Shell.com., 2019). 80 different Shell units and facilities were impacted
by the change, which brought about a system of globally standardized processes within the
operations. The changes were relatively drastic, and faced severe lash back from both the
employees as well as the stakeholders. However, the changes proved to be crucial over time. And

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the company bounced back within half a decade of significantly revamping its operations. The
change procedure was termed Shell Downstream-One and was a massive milestone in the history
of the reputed organization. The spearheads of the procedure within the company involved and
engaged all the organizational components extensively and emphasized on the idea that localized
geographical needs were second priority while the first and foremost was ensuring that standard
processes were implemented within the corporation at large. Shell Downstream-One affected
every little detail of the company, right from the core networks of supply and distribution to the
daily invoicing systems and financial decisions.
Another relevant example would be that of Banco Santander, when the organization tried to
expand its operations into the UK. The organization acquired a host of heritage institutions, with
the likes of Abbey National, Alliance, Leicester and so on. However, the history of these
organizations was a massive hindrance and several cultural dissimilarities cropped up as the
organizations wanted to function in their conventional ways (Santander.co.uk., 2019). Santander
got the organizations under their pennant and introduced a systems-based banking process, and
during the change, all the internal teams and components of these institutions were thoroughly
prepared and trained to embrace the change and focus and target the banking process on a
national and subsequently global level as opposed to the conventional measures of stressing on
regional client-based portfolios. Santander UK initiated its operations in 2010, and within a span
of three years, the organization became one of UK’s largest retail banks. The company further
topped the national charts for provision of a variety of financial services like credit facilities,
saving schemes, mortgages and so on. The organization was widely acknowledged for their fast-
track implementation and automated measures of efficiently dealing with the complexities of
banking.
Conclusion
In conclusion, it can be stated that authentic leadership as a concept relies largely on the
foundations of self awareness and inherently entails the values of inspiration and motivation. The
theories of Max Weber and Goleman further add to the core aspects of the idea of authentic
leadership, and bear a relatively moderate degree of interrelationship. The importance of
authentic leadership is extremely beneficial within organization to ensure that an overall positive
standpoint is maintained with regards to the key stakeholders and the general society. The values

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of responsibility and accountability are inherently necessary within the concept of leadership, but
become all the more important during scenarios of changes and modifications. Relevant
examples of the Shell Corporation and Banco Santander show that although these changes tend
to be unpopular and detrimental initially, the long term benefits permeate far and wide and can
significantly develop the overall operational functionality of an organization.

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References
Agote, L., Aramburu, N. and Lines, R., 2016. Authentic leadership perception, trust in the leader,
and followers’ emotions in organizational change processes. The Journal of Applied Behavioral
Science, 52(1), pp.35-63.
Alilyyani, B., Wong, C.A. and Cummings, G., 2018. Antecedents, mediators, and outcomes of
authentic leadership in healthcare: A systematic review. International journal of nursing studies,
83, pp.34-64.
Baron, L., 2016. Authentic leadership and mindfulness development through action learning.
Journal of Managerial Psychology, 31(1), pp.296-311.
Hirst, G., Walumbwa, F., Aryee, S., Butarbutar, I. and Chen, C.J.H., 2016. A multi-
levelinvestigation of authentic leadership as an antecedent of helping behavior. Journal of
Business Ethics, 139(3), pp.485-499.
Leroy, H., Anseel, F., Gardner, W.L. and Sels, L., 2015. Authentic leadership, authentic
followership, basic need satisfaction, and work role performance: A cross-level study. Journal of
Management, 41(6), pp.1677-1697.
Liu, H., Cutcher, L. and Grant, D., 2015. Doing authenticity: The gendered construction of
authentic leadership. Gender, Work & Organization, 22(3), pp.237-255.
Mathew, M. and Gupta, K.S., 2015. Transformational leadership: Emotional intelligence. SCMS
Journal of Indian Management, 12(2), p.75.
Regan, S., Laschinger, H.K. and Wong, C.A., 2016. The influence of empowerment, authentic
leadership, and professional practice environments on nurses’ perceived interprofessional
collaboration. Journal of nursing management, 24(1), pp.E54-E61.
Santander.co.uk., 2019. Personal | Santander UK. Available at: https://www.santander.co.uk/
[Accessed 30 May 2019].
Sendjaya, S., Pekerti, A., Härtel, C., Hirst, G. and Butarbutar, I., 2016. Are authentic leaders
always moral? The role of Machiavellianism in the relationship between authentic leadership and
morality. Journal of Business Ethics, 133(1), pp.125-139.
Shamir, B. and Eilam-Shamir, G., 2018. “What’s your story?” A life-stories approach to
authentic leadership development. In Leadership Now: Reflections on the Legacy of Boas Shamir
(pp. 51-76). Emerald Publishing Limited.