Leadership in Organisations
The role of Leaders and Interpersonal Influence in Benefiting Employees and Organisations
An individual’s influence attempt is affected by various factors such as contextual factors, individual differences and different influence techniques. These factors are characterised by the relative power of the parties and direction of the influence attempt as stated by Fable & Yukl in their research.
Influence techniques in an organisational setting are categorised into eight tactics: assertiveness, ingratiation, rationality, sanctions, exchange, upward appeals, blocking and coalitions . These tactics can then be further classified into hard, soft and rational tactics (Yukl, 2008). Hard tactics are comprised of exchange, legitimating, pressure, assertiveness and coalitions, whereas, soft tactics include personal appeal, consultation, inspirational appeal and ingratiation.
A good example of hard and soft tactics in practice are: Imagine a bank undergoing cost cutting. The CEO and top management would use their power to lay off employees in order to meet the cost cutting goals. This is an example of hard tactic, whereas imagine a firm wanting to solve a client’s business problem by coming up with creative and innovative solutions. The team working on this project will use the consultation approach to come up with unique solutions. This is where soft tactics come into play.
Leadership is a process of social influence in which one person is able to gain the aid and support of others in the accomplishment of a given task .
Leaders can use both hard and soft tactics to benefit employees and organisations. In order to benefit employees and organisations, we must take into account the influence of leaders in strategic objectives, competitive strategy, formal structure, management systems and programs, corporate culture and the members’ skills and motivations (Osborn, Hunt, & Jauch, 2002). Employee and organisation effectiveness depend on efficiency, human capital and adaptation to the external environment, whereas, the performance is determined by the decisions and actions of the leaders .
An organisation’s efficiency can be improved in many ways such as redesigning work process, reducing excess inventory, using new innovative technology etc. It is facilitated by cultural values, meeting deadlines, error-free performance, adhering to rules and controlling costs. It is easy to improve an organisation’s efficiency if the leaders succeed to keep the operations relatively stable for a considerable period of time. For example, Imagine a technology firm such as Dell which is considering to provide a seamless experience to the consumers through omnichannel. In order to consider this step, a leader must perform a cost-benefit analysis and figure out whether this would be correct strategy to enhance the organisation productivity or not. If it requires to change operations constantly, then it would be an obstacle to increase the firm’s efficiency.
The effectiveness is also determined by the organisation’s ability to adapt to the external environment. Key indicators include long-term sales increase, increase in market share, and loyalty and satisfaction of customers (Yukl, 2008).
A leader can influence the employees in a positive way to be more creative, flexible and tolerant to mistakes, product quality and customer service to make the organisation more adaptive.
For example, it is Apple’s leaders and top management who are constantly adapting to the changes and competition and being ever more creative with their advertising and product launches in order to maintain their customer base despite the increase in competition. Making innovative changes is easier in organisations that are flexible in terms of operational processes and the types of products and services offered. This is exactly what we see in some of the world’s most innovative firms such as google, Microsoft, Apple, Vodafone etc.
Another way in which the leaders influence the employee and organisations is how they manage the human capital. “Human capital is the extent to which the members of an organisation have the skills and motivation needed to do the work effectively” (Hitt & Ireland, 2002). Managers and leaders should focus on constant acquisition and retention of human capital to have a stronger impact on business. For any company, talented employees with diverse perspectives to problems and unique knowledge base are the most important asset for an organisation. The leaders who hire such employees are a step ahead in influencing their organisation to thrive and perform well in this highly competitive environment.
Take an example of OYO, a hotel chain start-up originated from India. It is now in more than 16 countries and is the second largest hotel chain in terms of sellable room nights. They have achieved this in only 6 years. I was interning at OYO London last summer and having personally experienced the leadership style of the managers at OYO UK, I can confidently say that a firm’s performance is influenced by the kind of people hired by the managers and the way these managers motivate the employees to thrive under an extremely high work pressure.
Leaders can influence the performance of an organisation by influencing performance determinants in three different forms. First form is the use of specific leadership behavior in interaction with peers, subordinates etc. Second form involves decisions about management programs and systems. Third form of influence involves decisions about competitive strategy for the organisation. These three forms must be used collectively and consistently for an effective strategic leadership (Yukl, 2008).
Leaders should use the task-oriented behaviours, change-oriented behaviours and relations-oriented behaviours to enhance the organisational effectiveness. Task oriented behaviours can be used to improve productivity and reduce costs by minimising unnecessary activities and errors and accidents (Bass, 1990).
For example, almost all big retail firms are going omnichannel to provide a seamless customer shopping experience. What it also does is that it removes unnecessary costs of hiring the mediators, unnecessary operations of going to the stores to check inventory etc. What an omnichannel system does for a firm is magnificent. A firm can track its inventory online, provide services directly to the consumers, thereby removing the need of third parties and thus help in tremendous cost cutting.
Relation-oriented behaviours are related to higher job satisfaction and lower turnover (Bass, 1990).
Giving another example from my personal work experiences, during the first week of my internship last summer, we had a 5 day session on relationship building where every intern worked directly with a senior manager. We worked on small tasks where our managers helped us and motivated us to be totally open about our ideas and share what we think about the problem. At the end of the first week, I personally felt that I created a strong bond with my manager and as a result, throughout my internship my relationship with my manager and my team member made it very motivating and interesting for me to work on whatever tasks I was allocated.
Change-oriented behaviours include monitoring the surrounding environment to identify potential threats and opportunities, taking risks to promote change and building a coalition of supporters for a major change (Yukl G. , 2006). Another way of how leaders can influence to benefit organisations is by encouraging and facilitating collective learning, diffusion of knowledge and application of new ideas. For example, leaders from almost every firm before recruiting graduates emphasis the importance of entrepreneurial mindset and collaboration within a team and clients. On most of the companies’ websites it is clearly mentioned that they look for students who have the ability to learn from their peers, diffuse the knowledge, adapt to difficult situations and apply new ideas to a particular problem.
The way in which a leader behaves has a direct impact on not necessarily just one, but at times more than one performance determinant at the same time. For example, let’s say a team in a consulting firm got their new assignment. Now if the leader initiates a move and consults with this team about their action plan, it may result in increased member commitment by every individual in the team, it can also help in improving the use of available personnel and resources thus increasing the efficiency. Such brainstorming will also help the team to come up with innovative ways to fulfil the client’s demands and expectations.
The leaders, however, should also be considerate and careful about some potential negative effects of their behaviours. For example, a leader may motivate the employees and give them full autonomy to make decisions which might increase worker satisfaction, but if these employees are also determined to improve the customer service then the number of customers handled on a daily basis by each of these employees may decline thus resulting in lower efficiency rates.
There is a high need for these leaders to be able to understand the complex relationships among performance determinants and identify steps as to how and what needs to be done to influence them in a positive and beneficial way. The leaders in today’s competitive world must always stay ready to modify their leadership behavior, competitive strategy and programs and company structure to meet the challenges that their organisations might face.
To conclude, it is safe to say that in today’s highly turbulent, uncertain and competitive market, leaders need to be highly flexible and adaptive.
