Exploring the Ripple Effect: How Bad Leadership Impacts Organizations

This essay explores the detrimental ripple effects of bad leadership within organizations. It begins by defining strategic leadership and highlighting the qualities of a good leader. The essay then delves into how poor leadership, characterized by a lack of direction, poor communication, and a failure to motivate employees, can negatively impact employee morale, financial performance, and overall organizational productivity. Examples such as Volkswagen, Lehman Brothers, and Enron are used to illustrate the consequences of bad leadership, including loss of trust, breakdown of communication, and financial crises. The essay concludes with recommendations for identifying and addressing bad leadership traits to safeguard organizations from future losses, emphasizing the importance of integrity, adaptability, and a clear vision for the future.

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IMPACTS OF LEADERSHIP
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2/25/2019

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Introduction
Strategic leadership states to the potential of a manager or the strategic vision for
the organization or any one part of the organization to encourage or reach goal of an
organization. A strategic leader plans and organizes all the activities of the organization
and manages employees. One of the main objectives of a strategic leader is to aim and
develop an environment for employees in whom they are able to forecast needs of the
organization some of the traits that a strategic manager should have are: loyalty, being
updated of new technologies, self-motivation, good communication skills and etc. this
essay is a study of how bad leadership can have a ripple effect A bad strategic
leadership can highly impact the organization in a lot of ways. One of the first things is
the lack of direction; poor leaders usually have lack of ability to give directions to the
team cause of their own lack of vision, if there is lack of communication between the
leader and the employees, in such cases an employee is not able to understand the
their responsibilities and this can result in frustrations on both ends, as a leader it is
important to have a sense of responsibility towards an organization and the employees.
Apart from this it can highly impact the employee’s morale. A bad leadership can make
the employees feel highly misdirected and negative about the company and their jobs
and the poor communication is the cause of this issue. A poor leadership can also result
in poor financial results for the company. A bad leadership always highly impacts the
financial results and goal achievements of a company, to have good productivity and
efficiency in a company the employees should be dedicated to their work but in case of
bad leadership there is no one to motivate the employees to perform well or to look after

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their training and other development opportunities and hence a bad leadership leads
negative impact on the company at all levels. This essay is going to show how bad
leadership can have ripple impacts; bad leadership not only impacts the organization
but also employees and the country, this essay is a brief study of bad leadership impact
and recommendations to identify bad leaders to safe the organization from loss in future
(Helms,& Nixon, 2010).
Description and General Analysis
A poor leader not only impacts the organization but also the employees, poor
leaders can have a high amount of negative impact on the employees as well, poor
leaders does not value communication with the employees, a poor leader does not
spend time with the employees or respond toothier messages , listening to other is a
very low priority for a bad leader and they do not care about the staff opinions and this
affect the performance of the employees in an organization, a bad leader can fail in
making the employees understand an organization’s expectation from them and this
thing can frustrate employees and impacts their ability to complete task. Poor leaders
can sometimes bully the employees which can lead to firing the employees these
leaders can be negative as they do not know how to motivate others and they can share
their negative opinions about the company or an organization.
Michael Horn, the CEO of Volkswagen America stated that all the problems that
happed in the organization were due to a couple of engineers who implemented the
software. It was further seen that the reason behind this was because the engineering
team of the organization were not able to meet emission regulations and they thought

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that the software was a better “remedy” to solve the problem. Horn said that this was
thought as a corporate decision and that is the reason no board meeting was held to get
this approved.
Poor leadership leads to lack of vision, without any direction the employees have
no aim, as they do not understand the aims and specific goal of a company. The
productivity of the company is impacted the most as there is lack of direction towards
the common goal. Bad leadership also leads to frustration in employees which also
leads to dissatisfaction in employees. Poor leadership is one of the main issue that
causes gap between strategy and execution. Most of the bad leaders cause a very huge
gap in the strategy making process apart from this it also impacts the communication
between various departments of an organization
Poor leadership is one of the main causes of culture mediocrity; poor leadership
impacts the improvement of employees among a group, in the cases of bad leadership
the employees performance remains same until any action is taken by the manager and
in such cases the employee is left wondering if the progress made noticeable or not and
this impacts the whole chain of command in the organization and this also becomes a
trend in the organization which eventually leads to higher cost, low quality of work, high
amount of customers complaints . It also causes turnover of good and talented
employees. Usually employees in this situations give up very soon directly impacting the
organization
A lack of leadership as major impact on the employees, the first thing is failure in
providing clear direction , in order to get good performance from an employee it is

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important to give employees instructions of what things they have to do or the goal
they have to achieve in an organization. A bad leader never see employees as people
as it is a leaders responsibility to see an employees work. When a manger does not
trust there team it causes frustrate and demotivation among employees which affects
the organizations productivity. A bad leader does not have an ability to listen and if the
three would be no one to listen to the employees than this thing creates lack of
communication between the employees and the managers.
A bad manager does not have the ability to fix things as urgent as possible; a
good leader always tries to fix the issues and problems of the organization as quickly as
possible, but a bad manager keeps ignoring the work for as long as they can which also
leads to customer’s dissatisfaction.
There is a ripple effect of bad leadership; bad leadership is something which can
destroy a good functioning of an organization at a very high speed, and the destruction
can happen very easily. Some of the things which are very important for a business to
work is the people who buy and the people who work the second thing which is
important is the foundation of the business on which the business is build, the third and
the most important thing is trust which keeps everything together in a business.
In a ripple effect, the first thing, which is affected by bad leadership, is the trust
the first and foremost thing on which a business Is built, trust is thing that hold up all the
other things in an organization. Trust between the organization and employees, trust
between the customers and the organization and so on. Unfortunately when trust falls
out it knocks down the another one.

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The second thing, which is affected after trust, is the communication and
teamwork usually bad leader encourages things such as gossiping, political games and
backstabbing in an organization, which destroys the relationship between the
employees. Next thing which is affected is moral and motivation of the employees. Due
to lack of communication the employees fail to learn the goals of an organization and
hence fail to perform which affects their morale, a bad leader never takes care of the
work done by the employees and hence fails to motivate the employees to work for the
organization; all these issues demotivate the employees.
One such example of bad leadership is : Lehman brothers, they started there
company in 1849 with a business in dry goods and it was started in Alabama, the first
public offerings of lay man took place in 1899 and the company started with investment
banking activities . For the next 50 years Lehman became an investor for half of the
America’s largest enterprises and this mad the investors one of the 4 top investors.
Lehman was a company which uses to focus on taking responsible investment
decisions 0that benefited all the firms’ stakeholders. The trouble in the company started
in 1980, which was due to massive de-regulations which were from the US government.
In 1983, Lewis Glucksman became the new CEO of Lehman brothers. And he
made departure from the firms previous way of thinking, Glucksman was a former trader
and he butted heads with the bankers who use to run the firm in a traditional manner.
Glucksman’s aggressive style of running the business made the firm suffer some major
consequences. After that, Lehman chose another leader for the firm named Dick Flud,
Flud Who led to a rapid expansion of the firm, and with the expansion the revenue of
the firm also increased. After this Lehman grew on a large scale and was always seen

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as too good to fail. During the period of growth, Lehman did those things which were not
even beneficial for the firm and thus during this time it booked for a lot of profits and it
invested in subprime mortgages, the firm was initially reinvesting and mortgaging the
people’s money again and again which leg the firm to collapse.
It can be seen that bad leadership has ripple effects and so was in the case of
Lehman brothers’ .the bankruptcy did not only have impact on the stakeholders but also
affected the economy of United States. And this was a turning point America which is
also known as the great recession. And a result of which the nation suffered from
financial crises.
Another example of bad leadership is Enron, Jeffery skilling was the chief
executive of the company, he developed a team of executives, who by using the
accounting loopholes, managed to hide billions of dollars in debt from the failed projects
and deals. Andrew Fastow the financial officer of the firm misled Enron’s board of
directors, on the high risk accounting practices and also made the directors of the firm
to ignore al, the financial practices. The firm rewarded their efforts and paid the top 140
employees $680 million in2001 before the collapse of the firm. Enron use to share worth
of $90.75 but it dropped to $0.67 immediately after the scandal was reveled and the
leader Andrew Fastow of the firm was charged with fraud.
Recommendation
There are certain traits that a bad leader has, if we study them before it can save
the organization from any kind of loss in the coming future, one of the first thing is poor

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integrity which means a leader is Good, he would always know how to use different
range of leadership styles depending on the situations. The simple thing is that it is not
necessary that all employees get motivated by the same factors and approach, and
there is no thing such as "one-size-fits-all” kind of approach that will work in every
situation or on every employee. Good leaders always have an ability to recognize these
things; on the other hand poor leaders get stuck in different situations by using the
same kind of approach in every situation. If a leader is stubborn and adapts to the
changes very slowly or is not able to adapt according to the changes and situations they
are likely to be a poor leader. Another thing which can help in recognizing bad leaders is
very Little Vision for the Future, job of a leader is to always plan for the future in
advance as proven by Elon Musk's vision of the future. Bad leaders are someone who
has not plan for future and If an organization has a bad leader, then they will not focus
on the future and will never have a clear plan to improve and progress (Miffling, 2006;
Usoro,2010).
Next this is the Lack of Accountability; the best leaders’ always take responsibility
when things go wrong in an organization and also give credit to the employees when
things go right. Employees always want a leader who understands that the employees
are working hard and also who gives them credit for their work, when they perform well.
Some leaders are unable to shoulder this responsibility and instead they put blame on
others and take all the credit on themselves. And these things highly impact the
employees and the organization, and this also demotivates the employees. Another
thing which is Important for a leader to have is: Great communication skills as it is by far
on of the most important traits for a leader to have. (Schillig, 2010; Griffin, 2001)

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It doesn't matter if a leader makes good and an effective a plan, if they do not
have good communication skills or are not able to communicate that plan to their
employees there is no use of it. Good leaders should have good listening skills as well.
If a leader is does not have ability to communicate and listening. They are not
considered to be very effective leader. Leadership has a power to both make and break
any business and Because of this, it is important to focus on t=all these factors, in order
to recognize good leaders in an organization.
Some of the world’s bad leaders
Name Who are they Impact
Martin Winterkorn Former chairman of
Volkswagen
Winterkorn led the firm to a
very major scandal, the
engineers of the companies
installed that software that
manipulated the emission
on 11 million diesel
vehicles, Winterkorn
ignored the fact of doing
anything wrong. Earlier the
firm was known for a
ruthless culture but it
became a toxic firm after
the emission cheating.
Parker Conard CEO of Zenefits In the first 2 years the

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company had a really high
growth. But last year the
company missed its
revenue target which
affected its share price.
Later it was found that the
sales of health insurance
done by Conard were made
by unlicensed broker. It was
also seen that under
Conard leadership Zenefits
employees use to have a
lot of office parties and use
to wrestle in public.
Michael Pearson CEO of Valeant Valeant changed its new
CEO just after he returned
because he was charged
with improper conduct by
misstating the financial
results of the company.
Gustavo Martinez CEO J. Walter Thompson He was filed for passing
racist and sexist comments
on the employees.
Michael dell Founder of Dell Michael accounted a fraud

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and mislead its investors
about the company’s
financial position and in
2008 it led to major
financial crisis.
Mike Lazaridis Blackberry Blackberry founder failed to
prepare the company for
its upcoming
competition ,black beery
play book tab was a four
day global service
outrage , which left all the
phone unable to browse net
and thus the operating
system of blackberry went
down by 5.3%
Discussion
Bad leadership can cost a lot more to the organization, staff turnover costs, there
is several research’s that shows that the staff turnover can range from 16% of the salary
to 213% for leaders. When employees leave a certain company which has is at good
market place, in such cases the firms have to go through a lot of damage, and one of

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the main reasons of leaving a firm is always because of bad leadership. Another thing is
employee engagement; a lot of studies show that majority of the staffs in an
organization are disengaged and a study showed that in US this figure is around 30%. A
leader’s first job is to see the employee’s engagement and if an organization have bad
leader then this thing can’t be taken care of which impacts the function of an
organization (Lipman, 2008; Eric, 2012).
Apart from this is the cost of failure, statistics show that around 60% fail due to
new product launches all of these things can be avoided if there is good leadership in
an organization, hence it can be see that bad leadership can impact the organization
(Wilding, 2011).
There are many differences between a good and a bad leader which can help an
organization to identify the bad leaders:
Quality of Good leaders Quality of Bad leaders
 Kind
 Help people when they are in
trouble
 Come up with solutions
 Don’t use violence
 Generous
 Honest
 Are not wasteful
 Good at listening
 Violent
 They steal
 They don’t protect other people
 They only care about themselves
 They lie
 Rude
 They order people around
 They blame other people
 They don’t like to listen