Organisational Behaviour Leadership Process

Question: Describe about the Organisational Behaviour for Leadership Process. Answer: Introduction Leadership is defined as the process of creating ideas and visions, living by values, motivating and influencing followers to achieve organisational goals, and making tough decisions when required(Hellriegel John W. Slocum, 2011). As per the above definition of leadership, the five key attributes of leadership are ability to create a vision, develop ideas, live by values, influence others and make decisions. Leaders are recognised for their ability to motivate and influence people towards achievement of specified vision or goals. Leaders can either use formal power associated with their managerial ranks within the organisation or in-formal power that arises from a source outside their managerial ranks, to motivate or influence the attitude and behaviour of their followers. However contrary to this widely accepted definition of leadership, it is often witnessed that leaders are expected to do much more than just creating ideas and vision, living by values, influencing people and maki ng tough decisions, they are held responsible for the overall performance, productivity and profitability of the organisation(King Lawley, 2013). This essay aims at evaluating the truth behind the state that everything that happens within the organisation can be explained by leadership. Leadership theories and real world explains are used to support the view that organisational performance is less related to leadership and has more to do with economic cycles and other factors. Is it leadership alone or something else that account for organisational performance Organisations and employees rely on their leaders and hold them responsible for almost everything that happens within the organisation. Leadership today has become a buzz word and is being used by organisations to justify all their actions(Rawung, 2013). An organisation that is able to achieve its desired goals credits its leader for being competent enough to formulate winning strategies and when the same organisation fails to achieve its goals it blames the same leader for lack of competencies. Leaders within an organisation are primarily responsible for creating a vision for it and ensuring its people are motivated and influenced enough to deliver their best performance(Robbins Judge., 2013). Leaders are responsible for showing the direction through which organisational goals can be achieved but that they can do only when the factors affecting organisational performance is under their control (Sparks, 2014). Apart from employee motivation, engagement and vision there are several f actors that influence overall organisational performance. Factors external to the organisation such as economical cycles, political conditions, and socio-cultural factors, environmental and legal factors influence its performance in some or the other way. Economic cycles are one of the primary external factors that determine organisational performance(Sogunro, 1999). It often seen that organisations grow and achieve remarkable profitability when economic conditions are in favour and the opposite is equally true wherein organisations struggle to survive when economic conditions are against growth. Internal factors such as employee motivation, engagement, commitment and organisational culture are mainly controlled by leaders however they have very little or almost no control over external factors such as economic cycles(Bakker Schaufeli, 2008). To some extent they can use their strategies to control cash flows and liquidities within the company, however after a certain limit they alm ost have no control over external economic changes. BHP Billiton which under the same leadership has moved from making billion to losing billions in the last financial year is an example of similar scenario. The mining giant BHP Billiton which recorded a profit of $1.91 billion a year earlier has reported a shocking loss of $6.39 billion (Wild, 2016). Companys chief executive officer Andrew Mackenzie expects commodities prices to remain low and volatile in the immediate term. Despite huge losses being reported, companys share price remains unaffected and continues to inflate. BHP Billiton had successful made through several difficult global disasters over the past few years and the complete credit is given to Scottish CEO Andrew Mackenzie(Barnato, 2016). Since the very beginning his strategies of keeping the production costs low and increasing production costs has helped the company in achieving its financial targets. As the companys leaders have successfully delivered their promises in the past they are expected to do so again. A lea ders words means a lot especially in times of crisis, when they deliver their promises they are praised beyond words but when they fail their integrity takes a hit(Reuters, 2016). As organisations fail to achieve their performance, productivity or profitability goals they often shift the complete blame on the leader and ignore the fluctuating economical or environmental factors. As evident from the BHP Billiton example, the economic cycle or environment fluctuation is no excuse to failed leadership. Leaders are always expected, rather it is considered their duty to overcome adverse situations and ensure organisational goals are achieved(Nohria Khurana, 2013). Contingency theories of leadership emphasize on the relationship between leaders, followers and the situation under consideration. It is often seen that leaders that help struggling companies overcome their barriers gains a lot of followers and popularity. These leaders are then approached by other struggling companies who expect them to show their leadership magic again, and in case these leaders fail to do so they admirers suddenly convert into critics. As per contingency theories of leadership it is important that leaders change their leadership style to match the situation (Bryman, Collinson, Grint, Jackson, Uhl-Bien, 2011). As per the first contingency model developed by Fred Fiedler, the Fiedler contingency model, the match between leaders style and the degree of control a leader gets during a specific situation, determines effectiveness of organisational performance. Situational Leadership Theory is the second contingency theory of leadership which states that leaders choice of leadership style in different situations must depend on degree of followers readiness that is the extent to which they are able and willing to perform a specific task(Hellriegel John W. Slocum, 2011). Thus, the contingency theories of leadership shift the focus of factors affecting organisational performance completely from the leader to the situation in which they are leading the organisation and the followers readiness to perform specific tasks. Attribution theory of leadership can better explain the situation at BHP Billiton as the company has moved from making billions to losing billions under the same leadership. Under the leadership of CEO Andrew Mackenzie and his team of leaders BHP Billiton has successfully overcome tough times in the past and so people are expecting same performance from its leaders. As per the attribution theory leadership is merely an attribution people make about other individuals(Robbins Judge., 2013). People often attribute to leaders charismatic personality, high emotional intelligence, aggressiveness, effective communication skills, industriousness and understanding. People evaluate leaders performance at extreme ends, right or wrong, extremely positive or extremely negative, leaders are not expected to deliver intermediate performance. In BHP Billiton case it is evident that the company was making high profit during the favourable economic conditions when almost every other mining company was reporting high sales and profits. In this case the CEOs effective leadership style or charisma was not the only driver to objective company performance; however companys performance did lead to creation of positive perceptions of leaders effectiveness (McElroy, 1982). Stakeholders perception of their leaders effectiveness is primary predictor of whether the leader will be blamed for failure or seen as a saviour in hard times. In BHP Billiton case companys stock prices are still not going down as its stakeholders and market still trust the capabilities of its leaders and have faith in his strategies. As of now CEO Andrew Mackenzie leadership effectiveness is not being questioned as people perceive him as the saviour of the company. In BHP Billiton case changes in economic cycles which lead to the collapse in coal prices and an increase in raw materials costs are being considered as the main reason behind poor financial performance. The deadly Fundao dam collapse in November, 2015 th at almost wiped out the village of Bento Rodrigues is another major reason behind the company facing a loss of billions in current financial year (Knight, Hichens, Tozer, 2016). People attribute to CEO Andrew Mackenzie effective leadership and perceive him as being competent enough to bring the company back to its original form. Stakeholders perception about his leadership has kept the blame of organisational failure away from him till date. Conclusion Leadership is much more than creating ideas and vision, living by values, influencing others and making decisions. It is about attribution and perception of people about their leader. Leaders effectiveness and charisma alone is not a determinant of organisational performance, however organisation performance is a determinant of leaders success or failure. Organisations that are able to achieve their goals and objective perceive their leaders as the source of positive motivation and engagement which encouraged employees to deliver their best performance. Contrary to this organisations that fail to achieve their goals consider changing their leadership team as the first step in the process of organisational change. Leadership no doubt is an important predictor of organisational success however; apart from it many other factors such as economic cycles, political conditions and environmental changes affect overall performance of the organisation. References Bakker, A. B., Schaufeli, W. B. (2008). Positive organizational behavior: Engaged employees in flourishing organizations. Journal of Organizational Behavior , 29 (1), 147-154. Barnato, K. (2016). World's largest mining firm records worst loss in its history. Retrieved 2016, from CNBC: https://www.cnbc.com/2016/08/16/bhp-billiton-reports-annual loss-of-6385-billion-versus-profit-of-191-billion-a-year-ago.html Bryman, A., Collinson, D., Grint, K., Jackson, B., Uhl-Bien, M. (2011). The SAGE Handbook of Leadership. London: SAGE. Hellriegel, D., John W. Slocum, J. (2011). Organizational Behaviour (13th Edition ed.). New York: Cengage Learning. King, D., Lawley, S. (2013). Organizational Behaviour. Oxford: OUP Oxford. Knight, B., Hichens, C., Tozer, J. (2016). BHP's deadly dam collapse linked to ramping up production. Retrieved 2016, from ABC News: https://www.abc.net.au/news/2016-02 29/bhp-samarco-dam-collapse-brazil-linked-to-ramping-up-production/7201022 McElroy, J. C. (1982). Attribution Theory: A leadership Theory for Leaders. Leadership Organization Development Journal , 3 (4), 27-30. Nohria, N., Khurana, R. (2013). Handbook of Leadership Theory and Practice: An HBS Centennial Colloquium on Advancing Leadership. Boston: Harvard Business Press. Rawung, F. H. (2013). The Effect of Leadership on the Work Motivation of Higher Education Administration Employees (Study at Manado State University). IOSR Journal of Business and Management , 15 (1), 28-33. Reuters. (2016). BHP Billiton Reports a $6.4 Billion Record LossBut There's Good News. Retrieved 2016, from Fortune: https://fortune.com/2016/08/16/bhp-billion-loss-results/ Robbins, S. P., Judge., T. A. (2013). Organizational Behaviour. New Jersey: Pearson Education, Inc. Sogunro, O. A. (1999). Leadership Effectiveness and Personality Characteristics of Group Members. Journal of Leadership Organizational Studies , 5 (3), 26-40. Sparks, G. A. (2014). Charismatic leadership: Findings of an exploratory investigation of the techniques of influence. Journal of Behavioral Studies in Business , 7 (1). Wild, R. (2016). BHP Billiton Slumps To Record Loss In 2016, Time To Sell Up? Retrieved 2016, from Forbes: https://www.forbes.com/sites/roystonwild/2016/08/16/bhp-billiton slumps-to-record-loss-in-2016-time-to-sell-up/#169626d355af