Organizational Leadership - 4 Implications to Consider When Leading Organizational Change

At the beginning of the second decade of the 21st century C. E., the only thing constant about business both local and global was change. For that reason, organizational leadership in 2011 and beyond meant understanding the implications of change and how to successfully navigate a given enterprise through times of change. One prevalent source of change in business organizations from the early 1980s to 2011 was mergers and acquisitions. In such cases, both executives and department managers were forced to consider and map out how to successfully integrate and sometimes consolidate operations depending on the objectives of a respective merger or acquisition. This hub briefly discusses some implications for organizational leadership in the case of consolidation.

One of the implications for organizational leadership in the case of consolidation is how the consolidation will affect the enterprise’s organizational culture. Organizational culture can be described as the DNA of a given enterprise. It is “the way things are done around here” based on an accepted set of shared assumptions, values and beliefs as well as vision, objectives and goals. Edgar Schein especially demonstrated that organizational culture is made up of three levels with assumptions and beliefs as the foundation; an accepted set of values as the second tier; and artifacts and creations as the public or outward manifestation of the underlying assumptions and values. Some experts have also found that each department may have its own subculture. Thus when dealing with consolidation of departments, the values and assumptions adhered to by those from each respective department may clash when brought together as one.

Another implication for organizational leadership in the case of department consolidation is how best to approach the decision making process. Organizational behavior scholars like Kurt Lewin (1939), R. Likert (1965), and Gary Yukl (2006) have outlined different kinds of leadership decision-making styles including (a) autocratic-authoritarian; (b) consultative; (c) democratic or joint decision; and (d) laissez faire or delegation. A leader called upon to guide an organization through change will need to consider which of these styles he or she will employ.

Autocratic-Authoritarian

This type of decision-making style chooses to make all decisions alone without consultation with other members in the organization. They believe they know it all and have it altogether and don’t trust their subordinates and their judgment. Likert called this kind of leader a corrosive dictator. They are arrogant and have a negative disposition towards employees.

Consultative

A second decision-making style is referred to as consultative or benevolent dictator. This type of leader trusts his subordinates enough to ask and consider their ideas and opinions before making a decision.

Democratic or Joint Decision

The executive or department manager who follows this decision-making model fully believes in and trusts his subordinates to help him make a well-informed decision. They not only listen to their ideas and opinions, but also includes them in the decision-making process.

Laissez Faire or Delegation

A fourth decision making style is to completely entrust or delegate the process to members. In this case, an executive or department manager gives members full authority to design solutions to problems and then implement those decisions.

Some experts in organizational development show that involving employees or members in the decision-making process leads to greater ownership in the process of implementing the decision. They suggest that when employees have greater ownership they tend to rate higher in job satisfaction, affective organizational commitment, and organizational citizenship behaviors.

Implicit Leadership Theories

Yet, Yukl (2006) and House et al (2004) argue that how individual employee-subordinates identify with a particular leadership or decision-making style will depend largely on each one’s respective implicit theory of leadership. Implicit leadership theories are informal conceptual frameworks that guide follower perceptions of leadership and who would make a good leader. These conceptual frameworks are formed throughout a person’s life through personal experiences, reading of literature, and socio-cultural environment. Thus, depending on their respective background, some followers may see participative or laissez faire leadership as weak and others who are prone toward participative leadership may consider authoritarian leadership as abusive. Organizational leaders must take these ideas into account when orchestrating change within their organizations.

After choosing whether or not to include subordinates in the decision-making process, organizational leaders must also choose the course of how best to map out and implement the strategy for consolidation. In his article on strategic foresight, Hines (2006) suggested a six step process for mapping out a preferrable future. Those six steps included:

1. Framing
2. Scanning
3. Forecasting
4. Visioning
5. Planning
6. Acting

Step One: Framing

According to Hines, framing has to do with identifying relevant problems and setting forth desired objectives. In a similar model Hughes & Beatty (2005) suggested this part includes “assessing where we are at” and “defining who were are and where we want to go”?

Step Two: Scanning

After framing the problem and defining objectives, the second step is to scan the horizon for resources and obstacles that could help or hinder designing and implementing a solution to the problem or opportunity at hand. Environmental scanning includes looking at the internal operations of the organization and the external surroundings for information and trends related to the issue under consideration

Step Three: Forecasting

According to Hines, forecasting refers to creating alternative futures. Given the problem and the relevant information and trends discovered in the environmental scan, the strategy team begins brainstorming a range of potential futures. Given where we are today and where we want to go tomorrow, what are the realm of possibilities?

Step Four: Visioning

The fourth step in the strategy design process is visioning. In this step the strategy team narrows the possibilities to the preferred future. Here, the team asks of all the possibilities which one best suits our objectives and desired end state? In a nine-step decision making model taught by the University of Phoenix, this step includes his a weighted comparison table to calculate which of the proposed solutions would be the most viable.

Step Five: Planning

After deciding on the preferred future or vision for the future direction of the organization, the leader must map out a plan to realize the vision. Hines defines this step as building a bridge between vision and action.

Step Six: Acting

This is where the rubber meets the road. In this step the organizational leader and strategy team lay out what is to be done; who will do it; how it is to be done; and when it is to be completed.

Step Seven: Evaluating

A seventh step is to continue the process through evaluation. This step was not included in Hines’ description, but comes from Hughes & Beatty ‘s (2005) book Becoming a Strategic Leader. Evaluation allows organizational leaders the opportunity to monitor the progress towards a determined end and make adjustments as necessary.

A fourth implication to be considered by organizational leaders in times of change or consolidation is individual relationships within the enterprise. Such relationships include leader-member exchanges as well as member to member exchanges. Prior to a consolidation it is likely that relationships had already been formed and emotional ties created. Many consolidations include layoffs and then a remix of employees which could cause emotional stress. In most cases, employees are forced to make new relationships with new leaders and different coworkers.

Leader-Member Exchanges

The dyadic relationship of leader followers is especially highlighted in Leader-Member Exchange Theory (Yukl, 2006; Northouse, 2004). Dansereau, Cashman, and Graen (1975) describe LMX as a theory which examines the quality of exchanges at the workplace. Cashman and Graen found that higher quality exchanges lead to deeper relationships between a leader and the follower. Brandes et al (2004) found that higher quality exchanges resulted in deeper relationships between employees and immediate supervisors which in turn led to among other outcomes greater in-role job behaviors by subordinates.

Leader-Member Exchanges in Global Organizations

The process of forging quality exchanges with employees has been made more complex in the age of globalization. Yukl pointed out that in this age leaders need to be more culturally conscious and must learn how to lead cross-culturally. Harris, Moran, and Moran (2004) list 10 key concepts tied to management in a global context. Eight of those qualities included:

1. Global Leadership – the capability of leading in a global environment
2. Cross-cultural communication – recognizing what is involved in one’s self-concept and how that self-concept and communication styles are culturally prescribed
3. Cultural Sensitivity – understanding the cultural influences on behavior and translating that awareness to effective relationships
4. Acculturation – the ability to adjust and adapt to a specific cultural setting
5. Cultural Influences on Management – recognizing the influence of culture on preferred management styles
6. Effective Intercultural Performance – applying cultural theory and insight to specific cross-cultural situations that impact employee’s job performance
7. Changing International Business – coping with the interdependence of business in the global marketplace
8. Cultural Synergy – recognizing that the organization can benefit from the various perspectives represented in the company.