Leading Business Organisations Course Guide

1           PART A: Reflection on Leadership for Aspiring Leaders

1.1         Question 1: Why do aspiring leaders need to have a clear understanding of leadership theories and organisational behaviour?

In simple words, a leader is someone who influences others into following a particular set of behaviors and attain a specific goal in an organisation. All leaders ask themselves one simple question; how can I be successful? And what distinguishes great leaders from ordinary people? This is where leadership theories come in. there are no fixed set of rules which make a great leader, but it depends on the situation, the internal and external factors that govern a particular business (Kuchinke, 2016). If an aspiring leader has a clear understanding of leadership theories, he or she can pick the approach which is best suited for them.

I think that our modern world is a mix of a volatile and uncertain situation where two of the most common leadership theories are applicable; the trait theory of leadership and the behavioral theory. According to the traits, theory leaders are born with certain inherent qualities like the ability to take the risk, decision-making ability, critical thinking, assertiveness and others (Seijts, 2014). The behavioral theory states that a leader is what the leader does. For example, Hitler had a dictator regime while in China we have an autocratic rule. These behaviors in the individual lay down the path that a leader undertakes.

1.2         What are the main contributions that individuals, leaders, and stakeholders make in creating and executing the mission and vision of an organization?

The vision and the mission statement basically summarize the business strategy of an organisation. It must be communicated in such a way so that the strategy can be understood in a few lines by the managers, leaders, and stakeholders. The vision statement outlines the long term goals that a company needs to achieve while a mission statement outlines the specific business sector or department that it needs to operate and the purpose of such a vision.  Thus, the vision and missions help formulate business goals and strategies towards the profitability of an organisation (Jex, 2002).

I have found that various contributions are made by the leaders as well as the stakeholders here. Both parties take part in the strategic management process. The leaders help in translating strategic objectives in operational goals while the stakeholders by giving their views about the procedure support the cause of the organization. Support is given in various ways like finances, resources and more. The customers and also some of the stakeholders also can choose whether to take part in such a business or not. Based on this, the leaders must evaluate the vision and the mission statement so that it is suitable for attracting customers and stakeholders (Chandra, 2016). The revision of strategies can also be done by the leaders.

1.3         Why do aspiring leaders need to understand a broad range of potential leadership strategies (and specifically change management strategies) in order to maximise organisational potential in a variety of different business contexts?

To me, a leader’s responsibility is to prepare guidelines for your team and review the current organisational process as fast as possible. Change management is an evitable process, as all leaders should bring about some kind of change in the operations to achieve the set goals. In case an organisation is not running properly, a leader introduces a new management system which must be communicated effectively to the stakeholders as well as employees. Such a case may be termed as a business context where leaders evaluate, analyze and introduce change management. Change takes place only when the leader places enough effort to create a desired future (Wasim & Imran, 2010). This is where organisational potential comes in. the change strategies are made based on the business potential a company has. It may happen that with the current situation, the organisation is not living up to its full potential.

Understanding leadership strategies here is important because there is no absolute strategy for a leader. Various approaches and options must be studied to understand what is best suited to them. The aspiring leaders must analyze the relationship between the successful organisational change and the role of leadership that an individual must take on.

1.4         Why do aspiring leaders need to be able to critically evaluate a range of motivational (employee engagement) theories within a specific organisational context?

Motivation is the need which inspires leaders to take action and also employees to follow the behaviors and pathways of the leaders. As per my research, Motivation theories are a key part of the organisational behavior by which leaders understand how to increase employee engagement and retention. It acts as an influence, which is more effective and inspirational in communicating goals. Aspiring leaders must evaluate to know how to motivate employees in an organisation and the approaches to use in various situations (Teresa & Mukti, 2008).

The two main motivation theories that every leader should know is Maslow’s Theory of Need and Herzberg’s Hygiene Model. These theories state various factors according to which the decisions made must be conducted by the leaders. In general, they state the psychological factors of an individual which help the leaders identify the motivational needs that an employee must have (Nuckcheddy, 2018). This is what can be termed as appreciative inquiry technique which is a diagnosis of the strength and weaknesses. Applying this technique on the employee can increase motivational factor and goals can be achieved in a streamlined and efficient manner.

1.5         How would you define your potential leadership style?

My potential leadership style is transformational leadership. In that, the change management system is created through the power of influence which encourages, inspires and motivates the employees to work on the set goals (Herman, 2014).

1.6         What are your key strengths?

The key strengths of mine can be listed as good communicative ability, good decision-making ability and the ability to maintain calmness under pressure. These strengths are the key straits of being an effective leader. This helps in team-building and in motivating others in working towards a common goal. This helps in self-development as well as the development of the employees.

1.7         What are your key challenges?

My key challenge is the ability to deal with resistance when change management is introduced. This can also create certain issues whereby my qualities as a leader are questioned. Also, my transformational leadership style must be able to cope with this challenge effectively.

1.8         What personal development do you need to undertake in order to develop your leadership ability?

The personal development strategy will be in line with the challenges. The foremost factor is to develop approaches so that I can deal with resistance effectively and in the calmest manner. I need to understand the process of motivation better so that I can apply it to the employees to point out the beneficial factor when introducing change.

Starbucks rolls out suite of employee benefits in USA

1           Part B: Management Report based on a critical evaluation of the President and Chief Executive Officer of Starbuck’s Leadership Style

1.1         Introduction

The management style mentioned in the Starbucks report is to evaluate the leadership style that was adopted by Howard Schultz and also Kevin Johnson in their organisation. Especially considering the case of Johnson, he was called being a servant leader by Howard. Since 2017, Kevin Johnson has been acting as the chief executive officer of Starbucks Coffee Company. He initially began his career as a software engineer, working for IBM, Microsoft followed by Juniper Networks and finally Starbucks (FERGUSON, 2019). Robert K. Greenleaf coined the term servant leadership, meaning a natural feeling to serve which is aroused by the leaders in the minds of the employees. This is a conscious choice by which an individual can undergo personal development, become wiser, healthier and take better decision making (Greenleaf, 2015). Starbucks here gained this culture mainly because they had put their needs of the employees first. The entire organisational culture is meant to serve the company for the betterment of the community at large.

Overall Starbucks organisational culture is based on a few factors or traits that are exclusive to its success. These are specific to its coffee chain business and have worked wonderfully well so far. The characteristics can be listed as the servant leadership style, where the needs of the employees are always first, relationship-driven approach, which basically means that employee and manager relations are friendly and approachable rather than being strict and out of fear. Openness is another important feature which again rules out the fear-based relationship between the management and the employee. This is critical as it makes the order fulfillment process more efficient. Openness also facilitates communication and collaboration, which is the main feature for the success of satisfied customer service. It greatly impacted the sales of the company, focusing the company to grow financially. Lastly, inclusion and diversity are one of the underlying characteristics which have made Starbucks popular in the public. The introduction of ethical and anti-discrimination rules is crucial to its success (Mbonu & Worlu, 2018).

1.2         Leadership Style

According to Harwiki (2016), the main goal of the leader in the servant leadership style is to serve. This is different from other leadership theories, which state the goal of the leader is to achieve the set goal of the organisation. The leader here too has a power like any leader but uses the power to work on the needs of the employees and to develop them as highly as possible. The most important characteristic here is making the needs of others above than yours. Leaders adopting this style find success and growth in the development of others. We can quote Ginny Boyum who states that "A servant can only become a leader if a leader remains a servant" (EBSCO Publishing, n.d.). Many scholars like Kim (2015) states that the ideal example of servant leadership can be found in a politician, who acts as the public servant, putting the needs of the general public and the country above their own personal needs. Altruism is an integral part which triggers this selfless act unto the service of others. Larry Spears advocated ten major qualities that a servant leader may possess; empathy, listening, awareness, healing, conceptualization, persuasion, foresight, commitment to the growth of people, stewardship and building community (Russell & Stone, 2002).

Building on Spear’s characteristics other scholars have further added on traits that a servant leader may possess. Researchers like Barbuto and Wheeler created a report where they mentioned the “natural desire to serve others”. This was based on Spears’ 10 characteristics. Modifying on their report the researchers found five major governing factors that were responsible for these traits. They were altruistic calling, emotional healing, persuasive mapping, wisdom, and organisational stewardship. The most ethical one among them is the altruistic calling which makes a great servant leader (Yang, et al., 2017).  Other researchers like Russell and Stone further reviewed these factors and stated their own perspective. They modeled that traits were 11 in numbers which were categorized into functional and accompanying attributes. The functional being vision, trust, honesty, integrity, service, modeling, empowerment, pioneering and appreciation of others. The accompanying attributes were credibility, competence, stewardship, communication, influence, visibility, persuasion, encouragement, delegation, listening, and teaching. They stated that all these attributes create a spiritual necessity to serve among the leaders and this is how they can be differentiated from the rest as found in the book by Madison & Eva, (2019, pp 133-158). However, on the whole, all traits are formed based on an urge to serve.

Research shows (Allen, et al., 2016) that the correct management style if employed by the organisation can impact the organisational turnover. Servant leadership has a strong impact on job satisfaction and the organisational commitment towards an employee. Forbes Magazine stated that since 2011, servant leadership has been used by the top 10 companies in the food and health industry (Lichtenwalner, 2011). Here the size of the company was never a factor rather, the ability to produce results in a quicker way.  The effects of servant leadership fall on an employee’s life outside work, as well as job performance and emotional health (Seto & Sarros, 2016). Through this style, the employee is in a positive set of mind, even in his family life. Experiments conducted by various scholars have proved that it has the power to decrease stress levels and exhaustion. As a result of which the individual is more focused on work and hence can increase the productivity level by twice or thrice the normal amount.

Kevin Johnson

1.3         Kevin Johnson’s Leadership Style

Kevin Johnson’s leadership style in Starbucks characterizes the behavioral aspects of the organisational culture of the coffee company. He possessed the altruistic calling which makes a great servant leader, ethically prominent. This behavioral aspect is seen in the team members, the staff, the management, and even the stakeholders. However, this approach is most effective on servant leadership which influences the subordinates to a great level. They ensure that all employees are given a chance to grow. The 13 perspectives that were listed by the management were based on the needs of the employees. A simple psychological fact which the Kevin Johnson used is the need for every American to have a cup of coffee and employees working there could have a cup of coffee free and food every shift and one free bag of coffee every week (Voigt, 2017). This established leadership as a brand, by focusing on the American coffee culture. The overall policies highlighted care for the employees and in doing so were successful in pumping up their morale and satisfaction. The warm and friendly atmosphere in the work culture further facilitated this. Johnson, in other words, fostered a feeling of community, which helped him develop as a global leader. Moreover, the coffee culture gave Starbucks an identity which was considerable in improving sales and profit margins.

Even when evaluating the racial challenges that the company faced, Johnson took a strategic decision that surprised the public and the media. In a press release, Johnson announced that they will be closing more than 8000 of its stores and will be providing training to almost 175,000 staff and partners towards preventing any kind of discrimination in their stores. It is then that Starbucks introduced diversity in its organisational culture. Innovation was focused on based on diverse ideas. This culture facilitation increased employee motivation and also helped in minimizing employee turnover. A culture of openness developed as a result which further made Starbucks a great place to work (Kohntopp & McCann, 2018). This is strongly associated with Johnson having a personal brand of being an effective leader.

Forbes Magazine here argues that “but what is servant leadership and who does Schultz anticipate Johnson will serve?” (Cooper, 2018).  Here Cooper states that it is quite paradoxical that Johnson is a leader and a servant at the same time. Since servant leadership is about following a higher purpose, everybody working in Starbucks, even the higher management and the stakeholders ideally should be a servant to that purpose. Starbucks here created the community of coffee drinkers to be the higher purpose and the creation of the ‘third place’. This ‘third place’ was a representation of a corner or a place where customers could forget their daily routine and sit and relax with a quiet cup of coffee. Factors that further supported this concept of ‘third place’ was the increase of passive income opportunities and the availability of free Wi-Fi available at all their stores. Thus, the higher purpose here we can say is the consumers, who were served a feeling of completeness and a sense of community (Esteban, 2019). Kevin Johnson’s leadership style was thus a success when exploring the relation and trust it has developed with its customers. This is what helped Starbucks create an identity as a brand and also contributed to Johnson’s personal brand identity as a leader.

1.4         Implications

Even to this day, servant leadership is considered to be a successful style of leadership and the most prevalent one which is related to ethics and corporate social responsibility. This is because it is seen as a sustainable form of leadership in the modern world when ethics and humanity are an integral part of any business. Various scales were created by researchers to measure the effectiveness of servant leadership (Reed, et al., 2011). They found out that in a VUCA environment, servant leadership offers a radical value system which enables organisations to thrive. Ethics formed a major part in all of them, which helps in forming constructive tension, which is the root of all radical value system. This was the one style by which a leader could be analyzed as being ethical or unethical. When the leader was being ethical, it had a positive impact on the employee, and when a leader had become unethical it had a negative impact on the staff. The style of leadership is also not without its critical review. Many scholars (Parris & Peachey, 2014) are of the opinion that servant leaders may fail when compared to transformational leaders. They state that this is true when the business environment is too competitive and undergoes rapid change. In such a case only an experienced servant leader is able to handle change management. This view is again subject to debates and discussions.

1.5         Recommendations

After discussing servant leadership, its critical review and the case of Starbucks we can say that this style when associated with hierarchy and unequal power distribution is a very unsatisfactory description of the leadership concept. It has often been criticized to create a make-belief situation so that service can be brought out from the employees. This is clearly true when we see the views of the employees, who mentions Starbucks to be a cult paying 9 US Dollars an hour! (CNBC Television, 2019). Following this statement, we can form a recommendation for Starbucks where it can increase pay along with benefits for the employee. Although most conditioned employees would be happy with the current situation, a more aware staff would require benefits as well as decent and justified pay for their service. Starbucks has to transcend the scenario of make-belief situations to prove their ultimate goal of servant leadership.

Another major recommendation that Starbucks must do is reinforcing ethics and social security and safety in their leadership style. As seen in the case study most employees felt unsafe about expressing their honest opinion of working at Starbucks. Most of the stores also had the habit of de-staffing and overworking of the employees in its later stage. Most employees were of the opinion that the servant leadership style was only true as long as you were a newcomer at the organization. In the later stages, it was no longer applicable. They pay too were too less as compared to the rest of the baristas (CNBC Television, 2016). This is a clear indication of ethics gone wrong. Therefore Johnson should immediately review the existing corporate social responsibility packages at the company and implement a stricter method where ethical rules and regulations are followed along with decent pay.

1.6         Conclusion

In the above discussion, we have seen several leadership styles, the implications, and the recommendations. After careful evaluation, we can say that Starbucks had gone significant changes since Kevin Johnson joined the company as CEO. These changes were based on challenges faced by Johnson and the team. As Howard Behar puts in, they are usually faced by a company during their early days. However, these challenges paved the way for a new leadership style, created a new brand image with openness and diversity and improved the business performance of the organisation. Starbucks has transcended the individual need and created a need for the betterment of the community. The purpose thus is the public as a whole (including the employees) and not just the individual. Based on collective understanding the company has successfully embedded this in the very culture of the organisation. Considering all the factors and the steps taken by Johnson, we can say that until now he has been an effective leader for Starbucks.

 

 

2           References

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