Thursday, April 26, 2012

Importance Of Leadership in Organisations

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INTRODUCTION


There is explicit connection between management and leadership quality and economic performance - the link between the two should be tracked over time in order to achieve continuous progress.


An effective organizational leadership accounts for most of the success stories of business firms and companies worldwide. Much of a company’s success or failure rests on the kind of management capability and strategy that a company employs. However, an alarming report by the Council for Excellence in Management and Leadership found out that, “supply of and demand for management and leadership capability in the UK finds that current management and business leadership development is a dysfunctional system, and that the UKs economic performance is being held back by a shortage of appropriate and practical leadership skills” (Council for Excellence in Management & Leadership).


The report is the culmination of two years of wide-ranging consultation and analysis across the UKs public and private sectors and the professions. It says that while there is a consensus that good management and leadership skills are pivotal to quality of performance, investment, productivity and delivery of service in all enterprises, these business-enhancing capabilities are not as widespread as they should be in the UK.


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The UK market shows that retailing is the UKs top service sector industry, employing around .4 million people in the UK. Its turnover rose from just over 80 billion in 184 to 175 billion in 18. With the continuing development of cross-border franchising, some of the UKs world-class companies have seen considerable success in overseas markets, particularly in Central Europe. Overseas outlets of UK stores provide excellent shop windows for UK products. Many retailers are expanding internationally and in a variety of ways including franchising, acquisition and joint ventures (www.tradepartners.gov.uk).


Another sector that is fast growing and is considered to be one of the three largest sectors in UK is the management consultation business. There are estimated to be between 0,000 and 5,000 management consultants in the UK. Annual turnover by the UKs management consultancy firms is around 5.5 billion, of which exports account for 1 billion. The bulk of international work by UK firms is in Europe, but as most export work is both market and client led, there are also opportunities in the emerging economies of Central and Eastern Europe, Latin America, India and China, and especially in the fast-growing energy, insurance and electronics sectors. There is also continued demand for UK consultancy overseas - e.g. project management, and assisting governments implement deregulation/privatisation programmes (www.tradepartners.gov.uk).


This study will attempt to tackle the strategy, issues and challenges faced on organizational leadership by two retail firms and one management consultancy company. A comparative analysis between the three firms will be discussed in the context of their success in expanding and growing domestically and internationally. Further, this paper will work on the hypothesis that organizational leadership leads to faster company growth.


Conceptual Framework


This paper will use the comparative approach in determining, analyzing and evaluating the organizational leadership methods of three companies. The comparative approach will substantially explain the differences/similarities, strengths/weaknesses and explain the causes of such.


This paper will specifically use three companies as case studies, all of which is based in the UK


A major part of the retail industry, worth over 100 billion. Although still primarily selling food, the largest companies are diversifying into non-food products. Nine retailers account for around 60% of sales





16.5% Tesco - Tesco has some 700 stores. Its e-retailing arm, Tesco.com was promoted heavily some four years ago and currently receives 70,000 orders per week, over 50% of online grocery sales in the UK. It is currently working with a leading US supermarket to deliver groceries in California. The team overseeing its development is based at the firm’s headquarters in Welwyn Garden City. Analytical skills are particularly sought for head office roles, as opposed to team working and leadership skills for store-based positions.


.1% Waitrose - Waitrose is the food arm of the John Lewis Partnership, with 16 stores, mostly in the South of England. Employees are partners, which means they receive a share of the profits each year and contribute to the decision-making process. Waitrose has acquired a 40% stake in Ocado, to provide an internet service to its customers.


The Red Bridge Consultancy is a modern communications company. It provides creative thinking, considered advice and high quality writing and design for on- and offline internal and external communications. The company was created by Mike Hooker, a graphic designer, and Paul Wigmore, an ex-Fleet Street journalist. They first established their professional working relationship, and their mutual love of stodgy puddings and custard, when they ran the award-winning design and publishing unit for a top London PR consultancy.


These three companies will be instrumental in the findings and conclusion of this paper.


Statement of the Problem


An effective organizational leadership has been the goal of almost all companies in order to maximize their resources not only in terms of financial capital but also human and customer-valuation capital. Furthermore, growth is highly dependent on this factor.


This paper seeks to answer the following questions


1. What are the different strategies, methods and plans of Tesco, Waitrose and Red Bridge Consultancy in dealing with organizational leadership?


. How are these three companies able to come up with these organizational strategies? What are the improvements/changes from the companies’ previous strategies?


. How significant are the differences of strategy between the three firms taken in the context of the nature of their businesses, in relation to their success (profitability and long-term investments) and in expanding globally?


4. How can organizational leadership affect the company in general and how potent is it in guaranteeing the success of the company?


Hypothesis


This paper works on the following hypothesis


1. Organisational Leadership is directly proportional to the growth (share of the market) of a company


. Conversely, the decline of a company is inversely proportional to organizational leadership


. Effective organizational leadership has a significant correlation to economic growth


Scope and Delimitation


This paper will only cover the three UK-based companies Tesco, Waitrose and Red Bridge Consultancy in the discussion and analysis of organizational leadership. The conclusions derived from this study are limited to the three companies studied and generalizations inferred will be based on the information from these findings. Review of Related Literature will be limited to scholarly works from 10 to the present; however, sources on the theoretical framework will be exempted. Data will be primarily contained on the selected firms used for the study.


Significance of the Study


This research seeks to contribute on the growing literature on organizational leadership by using case study as the primary source of data and by using a comparative analysis on the three companies based in UK. Moreover, the need for stronger management and leadership abilities will increase as the pace of change heats up, and as consumers and other stakeholders demand better performance, from professional practitioners as well as major corporations and the public sector. The implication is that much of the money spent on management training - both in the public and private sectors and in the professions - has little impact on outputs. Thus, according to the report, the MBA degree has succeeded as a qualification but has not necessarily developed future leaders. As a complement to more formal business education, the report lays emphasis on the value of informal development and mentoring practices, as an additional means of assisting time-poor entrepreneurs, in both larger and smaller companies, in their search for practical and relevant management skills (Council for Excellence in Management & Leadership, 00).


This paper will reconcile the importance of a formal training in the schools and private practice by discussing the personalities behind the three companies. This paper seeks to provide a comprehensive description and analysis of the organizational methods and strategies of firms, the factors for employing such methods, the relationship of growth and organizational leadership and its impact on the economy.


SOURCES


Council for Excellence in Management & Leadership, Management and Leadership in the UK, 14 May, 00


www.tradepartners.org.uk





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