1. Introduction
Leadership has plethora of definitions. It is most commonly considered as a process by which a person influences others to accomplish objectives and in turn directs the organization to make it more unified. However the distinction between the leader and leadership is important to note the leader is an individual; leadership is the function or activity this individual performs. As per the Principles of Management leading is establishing direction and influencing others to follow that direction. Peter G. Northouse‟s Leadership: Theory and Practice is often used in introductory leadership courses and defines leadership as an individual‟s influence on a group in order to reach a goal. (Rosch D, 2010). The corporate definition of leadership is the ability of a company's management to make sound decisions and inspire others to perform well.
2. Traits of a Successful leader
Some of the Traits of a Successful Leader are:
Building Excellence - A leader should have the capability to build excellence. Excellence is not achieved by commanding, it is achieved through building. In order to reach that stage a leader‟s belief‟s, values and skills should be in the best interest of his team.
Integrity - In order to win the trust and commitment of his team a leader should uphold his values and display honesty and integrity in all his actions.
Visionary – Effective leaders envision what they want to achieve and how they can be successful in achieving it. A good Leader has his future on his finger tips with his goals and vision in sync.
Broad Minded – A good leader is open to all ideas and beliefs and respects it at the same time. He treats all people as equal and heeds no regard to cast and creed and nationality.
Persuasion Capability – In order to believe in the Leaders credibility, his image, his reputation his mission, his facts he should have good persuasion capability.
Engagement - “Esprit De Corps” is something the leaders have to ensure is imbibed in his team. This can be done by offering challenges, seeking their ideas and rewarding them for their contribution and providing a sense of recognition.
Risk Taker -True leaders are not afraid to take risks or make mistakes. True leaders make mistakes born from risk.
Dedication - A leader spends every time and energy in accomplishing the task at hand in order to inspire dedication to his team. Also, to ensure the team gets closer towards the vision he showcases sincerity and dedication at all stages. (Clark)
3. Leadership Styles
Leadership style is the manner and approach of a leader in providing direction, implementing plans, and motivating people. (Handbook, 1973)
The Early Studies
The earliest significant research for identifying different leadership styles was conducted by a group of researchers led by Kurt Lewin in 1939. This early research helped identify three major leadership styles – Authoritarian Leadership (Autocratic), Participative Leadership (Democratic) & Delegative Leadership (Laissez Faire).
Authoritarian leaders, also known as autocratic leaders, provide clear expectations for what needs to be done, when it should be done, and how it should be done. There is also a clear division between the leader and the followers. Authoritarian leaders make decisions independently with little or no input from the rest of the group.
Lewin‟s study found that participative leadership, also known as democratic leadership, is generally the most effective leadership style. Democratic leaders offer guidance to group members, but they also participate in the group and allow input from other group members. Participative leaders encourage group members to participate, but retain the final say over the decision-making process. Group members feel engaged in the process and are more motivated and creative.
Delegative leaders offer little or no guidance to group members and leave decision-making up to group members. While this style can be effective in situations where group members are highly qualified in an area of expertise, it often leads to poorly defined roles and a lack of motivation. (Cherry, Lewin's Leadership Styles) (Lewin, 1939)
The Later Studies
Further research in the field has identified more specific styles of leadership. A comparatively recent research into leadership styles is Daniel Goleman‟s Leadership that gets results, a research study published in the Harvard Business Review in 2000. The publication was the culmination of a 3 year study of about 3000 middle level managers by Daniel Goleman. Goleman identified 6 leadership styles among the managers he studies, some of which are similar in nature to the leadership styles identified by Kurt Lewin in 1939, but Goleman identified a few other leadership styles as well. In all, he identified six leadership styles, based on his study – the pace-setting leader, the authoritative leader, the affiliative leader, the coaching leader, the coercive leader & the democratic leader. (Goleman, 2000)
The pacesetting leader expects and models excellence and self-direction. If this style weresummed up in one phrase, it would be “Do as I do, now.” The pacesetting style works bestwhen the team is already motivated and skilled, and the leader needs quick results. Usedextensively, however, this style can overwhelm team members and squelch innovation.
The authoritative leader mobilizes the team toward a common vision and focuses on end goals, leaving the means up to each individual. If this style were summed up in one phrase, it would be “Come with me.” The authoritative style works best when the team needs a new vision because circumstances have changed, or when explicit guidance is not required. Authoritative leaders inspire an entrepreneurial spirit and vibrant enthusiasm for the mission. It is not the best fit when the leader is working with a team of experts who know more than him or her.
The affiliative leader works to create emotional bonds that bring a feeling of bonding and belonging to the organization. If this style were summed up in one phrase, it would be “People come first.” The affiliative style works best in times of stress, when teammates need to heal from a trauma, or when the team needs to rebuild trust. This style should not be used exclusively, because a sole reliance on praise and nurturing can foster mediocre performance and a lack of direction.
The coaching leader develops people for the future. If this style were summed up in one phrase, it would be “Try this.” The coaching style works best when the leader wants to help teammates build lasting personal strengths that make them more successful overall. It is least effective when teammates are defiant and unwilling to change or learn, or if the leader lacks proficiency.
The coercive leader demands immediate compliance. If this style were summed up in one phrase, it would be “Do what I tell you.” The coercive style is most effective in times of crisis, such as in a company turnaround or a takeover attempt, or during an actual emergency like a tornado or a fire. This style can also help control a problem teammate when everything else has failed. However, it should be avoided in almost every other case because it can alienate people and stifle flexibility and inventiveness.
The democratic leader builds consensus through participation. If this style were summed up in one phrase, it would be “What do you think?” The democratic style is most effective when the leader needs the team to buy into or have ownership of a decision, plan, or goal, or if he or she is uncertain and needs fresh ideas from qualified teammates. It is not the best choice in an emergency situation, when time is of the essence for another reason or when teammates are not informed enough to offer sufficient guidance to the leader. (BENINCASA, 2012)
However as a conclusion to the study, Goleman suggests that in order for the organization to have best results it is essential for the leader to not rely of any single leadership style.
Findings from the study indicate that, the more style a leader exhibits, the better. This conclusion from the study of leadership styles directly links with the situational theory of leadership, which is just one of the several leadership theories that have been proposed to understand the complexities of the term itself. In order to understand leadership styles it is also essential to have a basic understanding of the various leadership theories and theirevolution through various research studies undertaken mostly during the last century.
4. Theories of Leadership
The early theories of leadership tried to identify what separates the leader from the followers. Whereas in subsequent theories various other factors such as situation, skill level, type of followers, etc. were also taken into consideration. In all, there are 8 major leadership theories – great man theories, trait theories, behaviorist theories, situational leadership, contingency theory, participative theories, management (transactional) theories and relationship (transformational) theories (Bolden, 2003 ).
Great man theories assume that the capacity for leadership is inherent – that great leaders are born not made. These theories often portray great leaders as heroic, mythic and destined to rise to leadership when needed.
Similar in some ways to "Great Man" theories, trait theories assume that people inherit certain qualities and traits that make them better suited to leadership. (Stogdill, 1974)
Behavioral theories of leadership are based upon the belief that great leaders are made, not born. Rooted in behaviorism, this leadership theory focuses on the actions of leaders not on mental qualities or internal states. According to this theory, people can learn to become leaders through teaching and observation. (McGregor, 1960)
Situational theories propose that leaders choose the best course of action based upon situational variables. Different styles of leadership may be more appropriate for certain types of decision-making.
Contingency theory is a refinement of the situational viewpoint and focuses on identifying the situational variables which best predict the most appropriate or effective leadership style to fit the particular circumstances.
Participative leadership theories suggest that the ideal leadership style is one that takes the input of others into account. These leaders encourage participation and contributions from group members and help group members feel more relevant and committed to the decision-making process.
Management theories, also known as transactional theories, focus on the role of supervision, organization and group performance. These theories base leadership on a system of rewards and punishments. Managerial theories are often used in business; when employees are successful, they are rewarded; when they fail, they are reprimanded or punished. (Covey, 1992)
Relationship theories, also known as transformational theories, focus upon the connections formed between leaders and followers. Transformational leaders motivate and inspire people by helping group members see the importance and higher good of the task. These leaders are focused on the performance of group members, but also want each person to fulfil his or her potential. Leaders with this style often have high ethical and moral standards. (Cherry, Leadership Theories - 8 Major Leadership Theories)
Two iconic examples who showcased the above theories of leadership effectively in the 21st century are Ratan Tata and Jack Welch.
Ratan Tata widely recognized as the person responsible for transforming the Tata Group from an unwieldy collection of businesses into a relatively more nimble group of companies better prepared to take advantage of opportunities. He took the reins of Tata Group and injected professionalism in the Group. His two mantras for growth -innovation and globalization have put Tata on global map.
Jack Welch during his 20 years of work as the CEO of GE transformed the company from an aging industrial manufacturer into one of the world‟s most competitive organization, by building more shareholder wealth than any corporate chief in history. His adaptability and the constant hunger for change are remarkable.
5. Ratan Tata
“I think the true legacy that a leader would like to leave behind is that he made a difference; that he improved the quality of life of the people that he served”
Swiss Ambassador Philippe Welti1
Widely recognized as the person responsible for transforming the Tata Group, a large India-based conglomerate, Ratan Tata has made his contribution to the shaping of new values in doing business in India and in the world. India has acknowledged this achievement long ago; the world is taking over India‟s judgment on this leader now.
Ratan N Tata has been the Chairman of Tata Sons, the promoter holding company of the Tata group, since 1991. He is also the Chairman of the major Tata companies, including Tata Motors, Tata Steel, Tata Consultancy Services, Tata Power, Tata Global Beverages, Tata Chemicals, Indian Hotels and Tata Teleservices. Mr. Tata also serves on the board of directors of Alcoa. He is also on the international advisory boards of Mitsubishi Corporation, the American International Group, JP Morgan Chase, Rolls Royce, Temasek Holdings and the Monetary Authority of Singapore. Mr Tata is also associated with various organizations in India and overseas. He is the Chairman of two of the largest private-sector-promoted philanthropic trusts in India. He is a member of the Indian Prime Minister‟s Council on Trade and Industry. He is the President of the Court of the Indian Institute of Science and Chairman of the Council of Management of the Tata Institute of Fundamental Research. He also serves on the board of trustees of Cornell University and the University of Southern California.
Mr Tata received a Bachelor of Architecture degree from Cornell in 1962. He worked briefly with Jones and Emmons in Los Angeles before returning to India in late 1962. He completed the Advanced Management Program at Harvard Business School in 1975. Mr Tata joined the Tata group in 1962.
Personality Traits of Ratan Tata:
Very dignified and Ethical – MR Ratan Tata has never been involved into corrupt practices in his two decade long career in Tata Group. He has never paid bribe to get things done.
Dependable – One of the traits of Mr Ratan Tata is help. Managing more than hundred companies, he has never shied away from giving guidance to his top management. He supported both Tata Steel and Tata Motors CEOs during the acquisition of Corus and Jaguar. Top management can always take advice from him and he is always there to support you.
Believes In Keeping Promises – Mr Ratan Tata is known to keep his promises. He kept his promise to make a people‟s car at $2500 even though it met with so many hurdles. Mr Ratan Tata can incur losses but will never go back on his promises. During the Mumbai terrorist attack, he promised to pay every family affected with cash. Just within 6 months he has given cash to victims‟ family along with a job in Tata Group.
Loyal and Believes in Relationships – Tata Group has been around for a century and have contributed to national economy immensely. Mr Ratan Tata has developed long lasting relationship with its suppliers, distributors and helps them in all possible way. Even Mr Tata was instrumental in developing relationship with government and helps them without charging a single penny.
Questioning the Unquestionable – Mr Ratan Tata has a vision, and in order to realize the vision, he has taken unprecedented steps. Deals like Corus and Jaguar will not have been possible if Mr Ratan Tata wouldn't have gone the unconventional way.
Risk taker not a Speculator – He is clearly a risk taker and he takes risks on his own terms. Investing in rotten firms and turning them around shows the risk appetite of MR Ratan Tata.
Exemplary Leadership Qualities and a Tremendous Motivator – MR Ratan Tata motivates each employee within Tata Group. His humility and respect for individuals have made him a great leader. He motivated his team in the acquisition of St James court hotel, the biggest and oldest in London when share prices were falling and recession was looming thick and large. His own efforts in pursuing a goal show the character of the man.
Leadership Traits of Ratan Tata
Visionary - “One hundred years from now, I expect the Tata‟s to be much bigger than it is now. More importantly, I hope the Group comes to be regarded as being the best in India. Best in the manner in which we operate, best in the products we deliver and best in our value systems and ethics. Having said that, I hope that a hundred years from now we will spread our wings far beyond India” said Tata when asked about his vision. (The qualities that make Ratan Tata a born leader, 2011)
Strategist- He is a deep thinker and extremely strategic. He is always 2-3 steps ahead"- Alan Rosling ED, TATA Sons. Mr Ratan Tata understands the movement of market and takes steps accordingly. It was his strategic decision to go global and acquire brands.
Initiator & Change champion - Ratan was the chief architect of the Corus deal. Although worried about the magnitude and the amount of money involved in the deal he instilled confidence in core Tata group employees for this deal.
Risk taker -“If you put a gun to my head, you had better take the gun away or pull the trigger, because I'm not moving.” Ratan Tata. While he doesn't look it, he's one of the toughest people ever known in India
Expertise - He has a tremendous technological brain. When people come to him for a critical decision, he will give a very quick answer; his responses would be crisp, and leaving no room for doubt. His involvement in cross-border deals could be quite significant. And that‟s precisely what gives the CEOs the confidence to move ahead without doubts.
Influence Tactics - Ratan Tata has shown that there is no other way he will do business other than do it ethically. He uses Consultation, Rational persuasion and Exchange tactics. (The qualities that make Ratan Tata a born leader, 2011)
6. Jack Welch
“When you were made a leader, you weren’t given a crown; you were given a responsibility to bring out the best in others”
Jack Welch2
John Francis “Jack” Welch who is 67 years old today is one of the most well-known and iconic world business leaders of this modern era. He was Chairman and CEO of General Electric, one of the world‟s largest companies (with USD26 billion annual revenue and 411,000 employees), between 1981 and 2001. His achievements as a dynamic and successful business leader have earned him considerable respect and following in the world today.
Jack, an American chemical engineer, business executive, and author, was born on 19 November 1935 in Massachusetts, USA. He is a graduate from the University of Illinois (1960) and University of Massachusetts (1957). He joined General Electric in 1960 and became its CEO 21 years later – becoming the youngest CEO of his generation.
During the 20 plus years that Jack ran General Electric, it became the most valuable corporation in the world, increasing its value over 30 times from USD 14 billion to over USD 400 billion by early 2000. His leadership also turned out more Fortune 500 CEO‟s than any other company in history.
The hallmark of Jack Welch‟s leadership was his insight and effort in consolidating and streamlining General Electric‟s business and making it no. 1 or 2 in the industries it was involved in. He also diversified and shifted General Electric‟s business from manufacturing to financial services.
What made Jack Welch special and successful at General Electric? Jack Welch has been studied extensively as a corporate leader and many books have been written about him on the subject. For example, the books written by Jeffrey A. Krames, one of the world‟s foremost experts on Jack Welch (three of his books were named “Best Leadership Books of the Year”, focused on the characteristics of Jack‟s leadership style and how they could be exported to other companies and industries.
Jack Welch’s Leadership Styles
Perhaps the most prominent leadership framework or principles personal espoused by Jack Welch himself as representing his leadership style are the “4 E model” of Leadership (Bryce, 2012). Bryce explained Jack Welch‟s leadership characteristics under the 4 E model as:
Energy – He was a leader with boundless energy who worked extremely hard and at a very fast pace and was on the go all the time. He basically set the pace for everyone else and was the yardstick for his organization. Nothing was impossible in Jack Welch‟s world.
Energizer – He was a leader who could inspire, motivate and spark people to perform or got them excited about a cause. He was good at changing and setting new strategic directions and implementing them with the support of his employees.
Edge – He was a leader with a competitive edge, who rose to challenges, thrived under difficult situations and could make the hard decisions and stood by them. He was strong on innovation, new ideas and change, and had the courage to see them through.
Execute – He was a leader that was results driven who was good at converting plans and intentions into actions and desired results in a systematic and calculated manner – the “walk the talk” kind.
Jack Welch’s idea’s practiced in the real world:
Jack Welch also pioneered or crafted many critical ideas and initiatives which are widely practiced in the business world today (Archnahr., 2012). For example, he was a great advocate of simplifying the business which in the case of GE would have been a complicated feat. By downsizing and changing GE to a simpler business model, he made the company more efficient and flexible. Jack Welch also introduced the idea of less formality is better, removing bureaucracy, putting values first such as pleasing customers than numbers and treating change as an opportunity and not a threat.
According to (Bryce, 2012), Jack Welch‟s leadership model has inspired many of the next generation of great business leaders. For example, James McNerney, CEO of 3M, and Bob Nardelli, CEO of Home Depot, have both implemented the 4 E leadership model in their organizations. He has been a role model to many and is widely considered a living example of how good leadership can make a big difference to our everyday lives.
Bryce added that since retiring, Jack Welch has continued to work as a consultant and adviser, public speaker, lecturer, author and columnist. He founded a business school at the Chancellor University. Jack was married three times and has four children from his first wife. Personally, he has a reputation for being a no nonsense and heartless boss.
7. Commonalities & Differences
Ratan Tata was born into a family of industrialists and grew up in a life of comparative luxury whereas Jack Welch was born into a middle class family. However that is where the differences end as both then went on to pursue their higher education at reputed universities; A B.S. degree in chemical engineering at the University of Massachusetts Amherst in 1957, and M.S. and Ph.D at the University of Illinois in 1960 for Jack Welch and A B.S. in architecture with structural engineering from Cornell University in 1962 for Ratan Tata. Both started their career at almost the lowest rung on the corporate ladder. Jack Welch joined GE as a junior engineer and rose up the ladder from the ranks. Ratan Tata worked on the shop floor among the blast furnaces of Tata Steel at Jamshedpur, India. The potential in both was identified by the higher management at both were then placed in management positions early in their careers. (Ford, 2010) (Young, 2007)
This is the stage of the career where the differences crop up again which directly impacts the leadership styles of the two future leaders with respect to the values segment in the framework. Between 1970-1986, Ratan Tata was at the helm of affairs of two ailing firms National Radio & Electronics Co. & Empress Mills Cotton Factory wherein he face several labour unrests which required him to confront unions and face up to strikes & lockouts. Although he was unsuccessful at completely turning around both the industries, this turned out to be the formative experience for Ratan Tata as a corporate leader directly influencing him & his leadership style. This experience helped him develop respect for people – peers, subordinates & competitors. His often quoted virtue of earnest humility was trait developed & emphasized during course of several negotiations with labour unions during his time at the helm of NELCO & Empress Mills. This two attributes point towards affiliative and/or democratic style of leadership as his dominant leadership style.
Jack Welch became the youngest Vice President of a highly bureaucratic GE in 1972 & would later go on to become the CEO in 1981. His primary task was to streamline the organization and during his formative years as a corporate leader, Jack Welch was required to be a ruthless, no nonsense boss due to the nature of the assignment facing him in turn earning him the nickname „Neutron Jack‟. Hence the most dominant leadership style for Jack Welch was that of an authoritative leader.
The differences in the formative experience for corporate leadership is what separates the leadership styles of the two leaders and this is derived from the various segments mentioned in the framework – Self, Values, Experience & People/Support Group.
However as per the situational theory of leadership, a successful leader is one who is able to apply the different leadership styles based on the different situations confronting them. The above mentioned difference between leadership styles of the two leaders were a product of the situation confronting them and were just an example of the diverse & complex nature of situation faced by a corporate leader.
8. Recommendations
Confront Barriers and Take risks: There are barriers often in the path of leaders. The barriers can be economic, organizational or even people related. It is important that leaders confront these barriers and find solutions to bypass them. Sometimes it is necessary for leaders to step outside the box, to be innovative. Leaders must be flexible enough to know when it is time to try a new procedure or implement a new policy. For many taking a risk is frightening, but such behavior can be invaluable, benefiting the entire group. Risk taking ability is one of the most important characteristics defining a leader. Commitment (Willis, 2008): Any person who assumes a leadership role needs to be committed. An effective leader is a person who can commit to using his or her ability to lead others, perform technical skills, perform business skills as well as organizational skills and conceptualize situations, thus helping to ensure goal achievement. Commitment is one of the key for success of leaders. A committed leader is always inspiring to his followers. Leaders‟ commitment inspires people to raise their own commitment.
Experiential Learning: Draw up experiences from your childhood, college and professional life and build on them. These experiences hit your sub-conscious state and gradually develop you in a better person. Covey (1989) points out the need to be proactive for leadership positions. Covey further points out that experiences of past life help you in understanding your surroundings and act accordingly. Individuals who assume leadership must be proactive to be successful.
Manage Conflict: Conflict among people is a natural, inevitable, and constant factor of human interaction. An effective leader expects conflict and is able to manage it in a productive manner. A leader listens to the other person‟s point of view and makes sure that he understands what they‟re trying to say. A leader channelizes conflict to his advantage and manages it effectively (Noronha, 2002).
Ethical and Honest: (Bracey H, 1990) point out the importance of truthfulness in leadership. A true leader is always admired and looked at. Yet at the same time the leader must compassionately tell the truth. Moreover being ethical is the best policy in the long run for any organization as has been well documented by the experiences of several pharmaceutical companies which regularly face ethical choices in the day to day operations. A case in point is the experience of Merck with the drug for treating river blindness in Africa (Velasquez, 1998).
Empathize: Roger D‟Aprix stated that leaders must be “loving in [their] organizational relationships” cited in (Goldhaber, 1993). Acknowledge the value of our co-workers and respect them with the dignity they deserve. We let them know that we care for them. This helps in creating a better team. The ability to connect to your followers is critical to the success of the leader and his organization as the followers form an equally important part of the leadership equation and hence cannot be ignored.
Translate your ideas into action: An effective leader should walk the talk. You cannot only give ideas and not pursue any of them. Your followers lose interest in your ideas and then in you. An effective leader needs to ensure that ideas are being worked upon or rejected and channelize the team towards translating these ideas. The most important part to be considered in order to make the followers believe in your idea is to provide actionable steps to carry forward the idea with milestones for course correction, if required. Providing such a clear path for implementing the ideas is critical as it helps the leader to clearly transfer their ideas to their followers.
Nurture Success Culture: (Tata, 2000) An effective leader ensures right culture in the organization. By right culture, we mean success. An organization should be forward looking,16 | P a g e learn from its past. An effective leader should practice this and ensure that the company also follow these rules. Leaders must confront barriers, translate ideas into actions and nurture success culture by facilitating learning.
9. Conclusion
Leadership in terms of management is supposed to be the most organised form of business. However, there is no stereotype style of leadership and yet all the great leaders have ended up successfully. There is no set time frame and still this has been going on for decades. There are no set rules and principles and yet it seems so principles oriented. There is no single conclusion, there is no single rule there is no set connotations.
In terms of Mr Ratan Tata and Mr Jack Welch some of the takeaways as future leaders in the world of business are:
a) Lead as per the situation- we have seen in both their examples that they have been situational leaders and it helps tackle the current scenario effectively.
b) Inspirational – Through the success of their organization and in their own way they managed to inspire the common man.
10. Reference
Works Cited
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