Leadership is a topic that has never remained out of the academic debate. And as an MBA student this topic is close to my interest. The environment in which we live provides a wide range of standards and practices, but as Sanders (2017) points out, a congregation that wants to be heard requires leaders who are strong, intellectual, and selfless.  To build a fit with the existing state of disciple growth, leadership improvement initiatives focused on enhancing organizational performance should employ tools developed to measure the leader’s degree of operational emphasis and relational emphasis.

The contemporary leadership theories lay a great emphasis on making situational choices while keeping in view the outcomes. This also concerns how these choices can maximize the leaders’ and the company’s interests. Modern theories like Transactional theory and Situational theory of leadership come under question here.

Transactional theory: 

Conventional leadership is transactional leadership. According to Weber (1947), a system of administration and collaboration is referred to as “traditional” if it is a component of an established regulatory scheme and the leader holds power based on position and the presence of individual allegiance developed via an education process. Transactional, strategic leadership describes this educational approach. For leaders striving to build their transactional leadership characteristics, there are several real-world examples, practicable exercises, and on-the-job training chances (Burns, 1978).  

Criticism of the uniform approach:

Several academics have also criticized transactional leadership theory for taking a uniform, generalized approach to building leadership theories while ignoring contextual and situational aspects relevant to organizational difficulties. This notion does not fit modern organizations’ requirements (Burns, 1978). Besides the theory is rigid as it only looks from a mechanical angle and ignore ethics.

Situational Leadership theory:

Similarly, in the case of the situational theory, a strong figure with a sizable following is not essential for effective leading; instead, it calls for a reasonable comprehension of the circumstance and a suitable reaction (Bryman et al., 2011). A task-versus-people-oriented leadership spectrum gave rise to situational managerial effectiveness and Situational Leadership Theory (Lorsch, 2010). The range of the concentration of the leader, on either the necessary duties or their relationships with their followers, was depicted by the spectrum.  

Preference of short-term over long-term gains:

The theory defined leadership style and emphasized the necessity to match the leader’s approach to the followers’ development. Like the transactional theory, situational leadership tends to ignore long-term objectives in favor of short-term ones. Since situational leadership is adaptable and many task-driven organizations are not, it frequently does not perform well when recurring tasks need to be accomplished.

The question of “Ethics” with benefits:

Leaders today must be moral and make wise judgments since conventional business is evolving and posing more difficult ethical concerns. Leadership behavior is described as the morally upright actions that leaders do to realize their followers’ and important stakeholders’ shared goals, objectives, and values. Deontological and teleological, which may be summed up as rules and consequentialist, are two fundamental prescriptive ethical notions.

Deontology: 

According to this principle, what is good or bad is determined by the moral goodness and badness of the philosophy behind it.

Teleology 

Teleology, on the other hand, determines what is good or what is bad by its consequences and how it will benefit or cause loss.  

The Challenges:

Capitalism is the biggest ethical leadership challenge. The reason is that Capitalism has structured the world, mainly the developed Global North and its Western practices, in such a way that it is a race of who gets the most and who gets it first. Morals have been left very far behind, and people are looking at everything from a consequential point of view.  

Benefits over ethics:

The question is, do companies lie to boost the marketing of their product? And answer is yes, they do and that’s where 90% of the myths about certain things come from, the leaders and masterminds feed people lie about a certain thing if it benefits their company. So, the absence of ethics is a huge problem, but with that said it must also be noted that the concentration on ethics is making its way into the discourse now.

The lack of ethics may provide short-term benefits but in the long run, it can only be the company’s downfall as can be noted in real-life examples. 

The transgression from ethical practices and Enron scandal: 

In this instance, the leaders transgressed ethical leadership and committed several crimes. For instance, Kenneth Lay, the former chief of Enron, failed to accept accountability for his conduct and for questionable business practices to occur in his organization. He was indeed a guy who seemed to have grand ideals and sought to improve all in his existence but his selfish motives and lack of ethics became a problem.   

‘The Smartest Guys in the room’:

Alex Gibney in “Enron: The Smartest Guys in the Room” reveals that in 1987, there was a money theft committed by two dealers. Kenneth Lay was informed by his audit firms that Louis Borget, one of Enron’s CEOs, had been implicated in misrepresenting the net value and stealing from stockholders. However, Lay chose not to make any changes because he was concerned that if he fired Louis Borget, no one would be generating income for him (Peregrine Global Services, 2020). 

Ethical benefits – taking lessons from Walmart: 

A great example of building ethical management is Walmart. Thanks to Walmart’s creation of numerous items with lower quantities of toxic sugars, fats, and salt, the price of fruits and vegetables has dropped.

Although these efforts actually reduce Walmart’s earnings, according to senior vice president Leslie Dach, the company nevertheless wants to boost sales and profits of all of its consumers. Michelle Obama, who attended the unveiling, and the corporation discussed this strategy to encourage healthier choices and minimize obesity in children in Washington (Stolberg 2011). 

Development of theories in the future:

While every leader seeks benefits for their ventures, it should be done while staying within the ethical boundaries. But this is not just the leaders alone, academic research and theories can also play a vital role by highlighting the flaws of the consequentialist approach and keeping in account the growing significance of ethical values. 

The development of leadership theories in the future should be based on ethics as the core value. Though theories like situational leadership and transactional leadership are necessary to boost leadership because managerial skills no longer require just charisma and strong moral values, the basic ethics of business should be considered.  

Feminine leadership discourse:

Another important aspect is the inclusion of feminine narratives in leadership theories. These theories are not just limited to businesses but provide an understanding of leadership from a broader perspective, including leaders from all spheres of life. The traditional approaches are more inclined towards old practices and morals from the male-dominated eras, focusing on the classical idea of a male leader and his subordinates. The challenges female leaders face and how to overcome them need the attention of academia. 

Regional dynamics:

Moreover, as mentioned above, one of the biggest problems is adopting Western capitalist values, which become more challenging for different social, economic, and gender groups in the Middle East, Asia, and Africa third-world countries. The marginalized groups are exploited for the benefit of the ruling elites in all spheres, which can be included in future theories in the context of the regional realities and applicability of strategies according to the overall impact, not just the gains for the leadership.

References:

Bass, B. M. (2008). The Bass Handbook of Leadership: Theory, Research, and Managerial Applications. Simon & Schuster.

Bales, J. (2022). Short-Term & Long-Term Goals Every Restaurant Owner Should Aim For. Blog.kulturekonnect.com. Retrieved 23 June 2022, from https://blog.kulturekonnect.com/short-term-long-term-goals-every-restaurant-owner-should-aim-for.

Bryman, A., Collinson, D., Grint, K., Jackson, B., & Uhl-Bien, M. (2011). The Sage handbook of leadership. Los Angeles Sage.

Burns, J. M. (1978). Leadership. Harper Collins.

Chains and Michelle Obama team on food desert stores | Reuters.com. (2011). Reuters. https://www.reuters.com/news/picture/chains-and-michelle-obama-team-on-food-d-idUKTRE76J5S420110720

Chains and Michelle Obama team on food desert stores | Reuters.com. (2011). Reuters. https://www.reuters.com/news/picture/chains-and-michelle-obama-team-on-food-d-idUKTRE76J5S420110720

Deontology: Definition, Theory, Ethics & Examples – Video & Lesson Transcript | Study.com. (2016). Study.com. https://study.com/academy/lesson/deontology-definition-theory-ethics-examples.html

Glynn, M., & DeJordy, R. (2010). Leadership through an organizational behavior lens: A look at the last half-century of research. In Handbook of leadership and practice. Harvard Business Press.

Gundersen, G., Hellesøy, B. T., & Raeder, S. (2012). Leading International Project Teams. Journal of Leadership & Organizational Studies, 19(1), 46–57. https://doi.org/10.1177/1548051811429573

Lorsch, J. (2010). A contingency theory of leadership. In Handbook of leadership and practice. Harvard Business Press.

Modernity Enlighment. (n.d.). Retrieved June 22, 2022, from https://ucscreativeartsfinleymiddleton.files.wordpress.com/2019/02/academicposter-modernityoliwiajaworskaandfinleymiddleton.pdf

Peregrine Global Services. (2020). Enron – The Smartest Guy in the Room. In Vimeo. https://vimeo.com/424073216

Sanders, J. O. (2017). Spiritual leadership: principles of excellence for every believer. Moody Publishers.  https://www.christianbook.com/spiritual-leadership-principles-excellence-every-believer/j-sanders/9780802416704/pd/416702

Stolberg, S. G. (2011). Wal-Mart Shifts Strategy to Promote Healthy Foods. The New York Times. http://www.nytimes.com/2011/01/20/business/20walmart.htmlpagew%C2%A0%C2%A0%C2%A0%C2%A0%C2%A0%C2%A0 

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Introduction:

Organisational culture is difficult to define because it has many diverse definitions. But “the way we do things here” is the most fundamental and straightforward description of organisational culture (Lundy and Cowling, 1996). The explanations of organisational culture try to enumerate its various aspects, and as a result, organisational culture can be defined as deeply ingrained views and beliefs that are held by those who work for an organisation (Sun, 2009).

So, organizational culture is the acknowledged strategy used by every employee in a company to accomplish specific goals. Similar to this, an organization’s culture also comprises its goals, objectives, common standards, shared beliefs, and customs (Needle, 2004).

Importance of a strong organisational culture:

Conducive organisational culture is crucial for the achievements of any organisation. Deal and Kennedy (1982) have declared that, organisational culture becomes “the glue that holds things together”. A strong culture, according to them, generates a productive environment, which leads to the organization’s success.

Numerous experimental studies have shown that organisations with solid and responsible cultures outshine those with weak cultures in terms of success rates.

If every employee in a company is committed to a single goal and upholds the company’s shared values, then this positive outlook is more likely to result in the success of the company.

As Simirich, (1983) said,

“Firms that have cultures supportive of strategy are likely to be successful, while firms that have insufficient “fit” between strategy and Culture must change since it is the Culture which supports the strategy” (Simirich, 1983).

Selected Company’s Background:

Bristol Water Company is one of the leading water supply companies based in the city of Bristol. The company supplies clean water to 1.2 million customers daily and has just under 500 employees (Bristol water). I selected this particular company for my blog because I had the chance to meet some of its employees, where I got to know about specific flaws in its organisational culture. 

Organisational problems faced by Bristol Water Company:

The major problem faced by Bristol Water Company is the high employee turnover and inefficient recruitment and reward system. The high employee turnover indicates that there is some flaw in the organisation’s culture of the company, which culminates in the employees leaving the company. Being one of the leading water supply companies, the high employee turnover is creating doubts about the company’s recruitment and reward system. Moreover, the high employee turnover means that the company would always do new recruitments, which also needs a proper culture based on fair recruitment of suitable people. My personal learning also indicates that high turnover always reflects a flaw in organisational culture.

Impacts of Employee Turnover:

Employee revenue can either be effective or ineffective for an organization (Khaola et al., 2015). The turnover is functional when it benefits the organisation. It can either be because the replacement of the outgoing employee is easy or the cost of new hiring is reduced compared to the one leaving the company. Similarly, turnover is dysfunctional for an organisation when it costs the organisation. It can be either because of the fact that the outgoing employee is skilled and experienced and it is not easy to replace it (Bosomtwe & Obeng, 2018).

However, it is significant to understand that frequent turnover is related to the organisational culture. There are studies that suggest that employee turnover is directly related to organisational culture. Jacobs and Roodt (2008) opine that “there is a significant negative correlation between organisational culture and turnover intentions as knowledge sharing, organisational commitment, organisational citizenship behavior, and job satisfaction, as well as various demographic variables contributed to nurses’ turnover intentions”. Haggalla (2017) opines that clan culture within an organisation is crucial to the employee’s job satisfaction. According to him, those employees who deem the organisation as their clan perform better and hence result in less employee turnover and vice versa.

Strategies to overcome Employee Turnover:

The above section established that there is a negative correlation among organisational culture and employee turnover. Therefore, it is pertinent that Bristol Water Company needs to change the existing corporate culture in the organisation and replace it with, which can bring job satisfaction to the employees and thus, reduce the employee turnover. Being a student of MBA and having interests in human resource management, I would suggest to Bristol Water Company the following recommendations:

Recruitment and reward culture should be based on talent performance:

The basic strategy that needs to be implemented to manage the organisational culture at Bristol Water Company should aim at establishing a culture of rewards and promotions that are based on performance and talent. Nepotism or age-based promotion often leads to the dissatisfaction of the employees who are talented and hardworking. Therefore, the reward and recruitment system at Bristol Water Company should be based on performance. Human resource managers and executives at Bristol can play a significant role in this regard.

The Forbrun, Tichy, and Devanna Model (1984) talks about four HRM functions, which are related to the selection and development of employees. The four functions are selection, appraisal, development, and reward. According to this model, these four are basic HRM functions, and the effective management of these functions leads to the optimum productivity of the organisation owing to its competence at the human resource level. Though the model is incomplete, it is relevant to the present context because it discusses four constituent components of it, which are related to the case of the Bristol Water company (Kaufman, 2015).

Hence, the Bristol Water company needs to create a culture where employees’ hard work and talent are appreciated through fair rewards and appraisal. Consequently, a culture will be established, which would be based on hard work, talent, and optimum productivity, which will ultimately benefit Bristol Water.

The role of leaders in promoting a culture based on fairness and meritocracy:

Those who occupy higher positions in the hierarchical ladder of an organisation are important in the promulgation or creation of culture. They are the ones who set trends in an organisation, which later become part of the value system of an organisation. Therefore, leaders at Bristol water need to play their role in the establishment of a culture based on fairness, where talent and performance receive their due appraisal in the form of just promotion and other rewards.

Organizational Culture and Leadership (2010), the key work in leadership and organisational culture theory by Edgar H. Schein, offers a thorough outline of the role of the leaders in creating a responsible culture. Schein (2010) identifies three key sources from which civilizations have emerged:

1) The founders’ beliefs and ideals.

2) The experiences that employees had when any organisation was developing.

3) New members and leaders have brought new ideals and views.

Thus, it is obvious that the founders’ and leaders’ roles are vital in creating a culture of responsibility. The ideals and presumptions of leaders, however, do not become the culture of any organisation unless they are assimilated by every person who works there. Once they are embraced by all employees, they take the shape of organisational culture.

Charter Statement

The charter statement in the present context would be:

We value talent and hard work; join us for a successful career if you are willing to put the best of you.

References

Bosomtwe, T. E. (2015). Employees’ Perception of Organisational Merger and its Impact on Their Job Satisfaction and Turnover Intention (Doctoral dissertation, University of Ghana).

Business Information for Corporate Risk, B2B Marketing & Sales – Endole. Endole.co.uk. (2022). Retrieved 22 June 2022, from https://www.endole.co.uk/.

Deal, T. and Kennedy, A.A. (1982). Corporate Cultures the Rites and Rituals of Corporate Life. 1st ed. Harmondsworth: Penguin Books.

Employee Turnover: Definition, Types, Causes of Employee Turnover. iEduNote. (2022). Retrieved 22 June 2022, from https://www.iedunote.com/employee-turnover.

Haggalla, K. H. Y. U., & Jayatilake, L. V. (2017). Study on Organisational Culture and Turnover Intention in International Information Technology Firms in Sri Lanka. International Journal of Scientific Research and Innovative Technology, 4(2), 47-63.

Jacobs, E. J., & Roodt, G. (2011). The mediating effect of knowledge sharing between organisational culture and turnover intentions of professional nurses. South African Journal of Information Management, 13(1), 1-6.

 J, A. (2022). The Investors Book. The Investors Book. Retrieved 22 June 2022, from https://theinvestorsbook.com/.

Kaufman, B. E. (2015). Evolution of strategic HRM as seen through two founding books: A 30th anniversary perspective on development of the field. Human Resource Management, 54(3), 389-407.

Khaola, P. P., Roma, P. O., & Leisanyane, K. (2015). The Influence of Culture Traits and their Imbalance on Employee JobSatisfaction and Turnover Intentions. Arabian Journal of Business and Management Review, 5(2), 1-6.

Lundy, O. and Cowling, A. (1996). Strategic human resource management. London ; New York: Routledge.

Needle, D. (2004). Business in context : an introduction to business and its environment. London: Thomson.

Schein, E.H., (2010). Organisational culture and leadership (Vol. 2). John Wiley & Sons.

SlideShare.net. http://www.slideshare.net. (2022). Retrieved 22 June 2022, from https://www.slideshare.net/.

Smircich, L. (1983). Concepts of Culture and Organisational Analysis. Administrative Science Quarterly, 28(3), p.339.

Sun, S. (2009). Organisational Culture and Its Themes. International Journal of Business and Management, 3(12).

Visualising a Culture of Career Development | Antoinette Oglethorpe. Antoinette Oglethorpe. (2022). Retrieved 22 June 2022, from https://www.antoinetteoglethorpe.com/visualising-a-culture-of-career-development/.