This assignment is mainly based on strategic management and leadership skills. It elaborates the links between strategic management, Leadership and organizational direction. This report has four tasks. Task one is about understanding the relationship between strategic management and leadership. Second task is talking about applying management and leadership theories to support organizational direction. Task three and four are concerning on assessing leadership requirements and developing leadership skills.
According to the guidelines of this assignment, it is necessary to provide practical examples to explain above mentioned tasks. To fulfill this requirement this assignment has selected “Cargills Ceylon PLC.”
Cargills Ceylon PLC
It was incorporated in 1844 as a general warehouse in Colombo by William Miller and David Sime Cargill. In 1946 it was incorporated as a public limited company and it started its first supermarket chain in 1983. At present Cargills Ceylon PLC operates mainly in Retail sector, FMCG sector(Fast Moving Consumer Goods), Restaurants, Banking Sector and distribution sector.It Owns 11 subsidiaries.
Cargills is the leader of modern Retail Market in Sri Lanka. It owns 315 stores covering all districts in Sri Lanka. According to the brand finance Index of 2016, Cargills has been rated as the tenth most valuable brand in Sri Lanka with AA+ rating. It is only retailer brand which has placed its name in the top ten of national brands.(bloomberg.com, 2017)
Cargills Ceylon PLC Entered in to FMCG sector in 1993. Now it manufactures processed meats (Goldi, Sams), Dairy Products (Cargills Ice cream, Kotmale Products) Agrifood (Kist jam, sauce, cordial) and confectioneries (Kist biscuits). Its Dairy Ice cream is the leading ice cream in Sri Lanka.
In 1996 Cargills acquired KFC franchise and today it is the largest and most popular international restaurant chain in the country. There are 27 outlets across the county. Another restaurant owned by Cargills Ceylon PLC is TGI Fridays. It opened in 2013 to cater to localswith flavorful American style cuisine.
Organizational structure of Cargills Ceylon PLC
Source (Cargills Ceylon annual report,2017)
1.1 Relationship between strategic management and leadership
1.1.1 Strategic Management
According to the Neil Ritson (2011) strategic management is the organized development of the resources of the functional areas such as financial, manufacturing, marketing, technological and human resource. It is an art of managing resource to maximize the ability of achieving goals and objectives of the organization. It is a continuous goal oriented process of evaluating and controlling of the business. Strategy always acts as a mediator of matching organization andthe environment. Strategy is a primary and crucial process of in any business. Strategies should be established at the initial level and those strategies are the basis for other process of the organization.
Strategy can be identified as a well-definedroadmap for the organization. It defines vision, mission, objectives and goals of the organization.Keeping main attention on the goals of the organization and incorporate various functional areas to ensure those areas are interconnected well. (managementstudyguide.com, 2017)
Kevin Kruse(2013) says that Leadership is a social influential process of maximizing others’ efforts towards achieving goals. Or in another way it can be defined as utilizing strategy in the management of human resources. H.Mintzberg (1989) says there are ten roles and three categories of leadership. It can be presented as follows.
Interpersonal Figurehead ,Leader, Liasion
Informational Monitor, Disseminator, Spokesperson
Decisional Entrepreneur, Disturbance Handler, Resource Allocator, Negotiator
Interpersonal Category involves in providing information and ideas.
Figurehead – This role is a source of inspiration. Social, ceremonial and legal responsibilities are handled and others see this figurehead as a person with authority.
Leader – manage the performance and responsibilities of everyone in the group.
Liaison – Maintaining Effective communication network with internal and external parties on behalf of the organization.
Informational Category involves in seeking out information connected to organization and industry, environmental changes. This category monitors their subordinates in terms of both productivity and their well-being.
Monitor – Seeking, Monitoring, Evaluating of information of Industry,
Disseminator –communicating valuable information to team.
Spokesperson – This role speaks for their organization. They Transmit information about organization and its goals to the external environment.
Decisional Category involves in utilizing information
Entrepreneur – This role solves problems, generate new ideas and implement them. Generate and control change inside the group.
Disturbance Handler – Solving disputes arising in unexpected moments
Resource Allocator –bets utilization of resources are done by this role. Allocating funding, assigning staff and other organizational resources are man duties of this role.
Negotiator –taking part in, and direct, significant negotiations within the team.
1.1.3 Relationship between Strategic Management and Leadership
Strategic Management can’t survive without good leadership. A leadership acts as a bridge between strategic management and organization’s goals. Strategies are developed for the purpose of achieving organization goals and targets.Leadership managesHuman resourcein a way which improves and maximizes the capabilities of achieving business objectives. In other words strategic management sets the path towards goals and objectives and leadership directs people efficiently and effectively on that path. Combination of sound leadership and well established strategic management will definitely accomplish goals. (Colleen, S.2015)
Cargills Ceylon PLC is one of best example to elaborate the importance of relationship of strategic management and leadership.As above mentioned it was started as a general ware house in 1844. And in 1981Cargils was acquired by Ceylon theatres. After that Mr A. Page was the appointed As Managing Director. Under this new management Cargills established its first supermarket chain. By now Cargills is the leader in modern retail industry in Sri Lanka. And in 2016 it was ranked as the 10th valuable brand in Sri Lanka. The Cargills Group CEO and Group Chairman are responsible for leadership and promoting high standards of integrity, transparency, and accountability. The chairman is mainlyproviding leadership to the board to ensure that board functions are carried out in a proper way. Group CEO develops, implements strategies and manage performance of business unit in order to achieve group’s long term goals.
1.2 Analyse how leadership styles can have an impact on organisation’s strategic decision making process
Leadership is an ability to encourage creativity and innovation while stimulating the subordinates to develop their own capabilities and values which help them to improve their individual performance. (Research papers, 2015).American management consultant and Economist, Peter Ducker once said “effective leadership is not about making speeches or being liked, leadership is defined by results not attributes”.(Success.com, 2017).
1.2.1 Leadership Styles
A leadership style can be identified through their characteristic behaviors when directing, motivating, guiding, and managing groups of people. (Cherry.K, 2017).Psychologist Kurt Lewin identified three main styles of leadership. Those are Autocratic, Democratic and Laissez faire. In addition to those styles researchers have identified many other attribute patterns of leadership.Some of them areBureaucratic Leadership Style,Charismatic Leadership andPersuasive Style of Leadership. Leadership should be aligned with the goals and objectives of the business. Therefore Leaders practise to use mixture of those styles. (Mars, 2009)
Authoritarian Leadership style (Autocratic) – All the decisions are made independently by this leader without considering ideas of team members. What, when and how things should be done is decided by this leader and he focuses on his command and subordinates’ control. In the other sense this leadership style believes on rules as only method to get the maximum from the team. Autocratic leaders have less confidence on their followers. So automatically they discourage innovations. It will result to less creativity. When there is a circumstance call for quick decision or decisive actionAuthoritarian Leadership can be applied. (Cherry.K, 2017)
Democratic Leadership style (Participative leadership)-These leaders distribute responsibilities among team members, Empower them and provide them chances to participate for the decision making process. This will create well experienced mature cooperative teams who are dedicating to achieve their team’s goal.Democratic leadership style keeps followers of the team always engaged in the process.
Laissez-Faire Leadership (Delegative leadership) – Delegative leaders allow their subordinates to make decisions. They provide very little of guidance. So followers are working with plenty of freedom. Leaders provide required resources. Sometimes this lack of direction will result in disputes among followers because they will blame each other’s for mistakes. But if there are well experienced high quality subordinates this leadership style is acceptable. (Grill.E2016)
Bureaucratic Leadership Style- This leadership style is one of oldest leadership style. It based on strict hierarchies, written job descriptions, and organization structures. These leaders are structured and follow procedures. Each and every decision and implementation is done in an exact way. They follow rules strictly. This style is suitable for large organizations, forces and government sector organizations who count on reliable results.But these leaders don’t allow their team to do innovations. This style is suitable where followers are performing routing tasks. And structure is highly repeatable. But this style will be inefficient in a situation where the organizations depend on creativity, flexibility and innovation (Spahr.P2015)
Charismatic Leadership style – This style encourages subordinates through powerful and articulate communication, persuasion and personality. These leaders process capabilities to dissect and make sense of any disorganization with the team. Charismatic leader uses an emotional way to motivate and inspire his team members. It is very difficult to develop “charisma” since it is almost of divine origin. They are leaders with a clear visualization in organization or politics and the ability to engage with a bulky audience.(teamworkdefinition.com, 2017)
Persuasive Leadership Style – Accordingto Stephan J. Carroll and Patrick C.Flood this leadership pattern is between Authoritarian Leadership style and Democratic Leadership style. These leaders are passive and aggressive. He has the entire control over the decision making process. But this leader works with his team and he always tries to convince his team members of his plans. This leader is more aware of his subordinates. But it does not mean that this leader is more inclusive of team members.
1.3 Evaluate how above explained leadership styles can be different situations faced by the organisations
The main element of effective businessis having talented team of leaders. Each leader has his own type of leadership style. To maximize the ability to accomplish goals and objectives of organization these different kinds of styles should be matched with the most suitable situations. And also each leader should know when to unveil a particular approach. (Germano, M.A.2010).
When the team is included untrained new staffthey need lot of supervision and guidance. Then autocratic leader can play his role efficiently. If there is limited time and need to make quick decisions then also autocratic leader style will be useful. In addition to these situations,If leader is the most knowledgeable person of the unit, staff do not respond to any other leadership style and if they Challenge leader’s power then also autocratic leadership is suitable. (Cherry, K. 2017),But if there is a requirement of creativity and innovations to achieve set goals and objectives then this leadership style will not be acceptable.
Democratic Leaders are acceptable when there are well experienced and professional teams. And also if the situations are changing rapidly and the leader has to make complex decisions which require lots of input democratic leadership is more effective. Moe over that if the organization needs to encourage team building and participation and needs to provide opportunities for subordinates to develop a high sense of individual development and job satisfaction, then also democratic leadership can be used.
Bureaucratic leadership is most suitable if the team has to perform repetitive tasks or there are some tasks that required cash handling. And also if the team members should have proper understanding on structures and procedures this leadership style is suitable.(Spahr.P.2015). But if there are subordinates who think out of the box and if team members have lost their interest in their jobs, this style would be in efficient.
Laissez- faireleadership style is known as “hands off” style.When team members are highly skilled and have the ability to work their own then this style is effective. And if team members have passion and intrinsic motivation for work then expect independence highly. If team members are trust worthy and expert then laissez faire leader is suitable. But if the team members are lack of knowledge and experience this style won’t be worked. . Because of the uninvolvement of the leader some team members also can be less attention towards their tasks. (Germano, M.A.2010)
2.1 Review the impact that selected theories of management and leadership have on organizational strategy.
Leadership and management theories can put a considerable impact on organizational strategy. According to MeyerOrganizational strategy is a process of making, implementing and evaluating of decisions which are taken to achieve set goals of an organization. In other words we can say a strategy is the direction and scope of the organization which assists to achieve advantages in changing environment through utilization of resources and capabilities while fulfilling expectations of stakeholders.
2.1.1 Transformational Leadership theory-This theory pays concentration on development requirements for positive changes in subordinators. According to Robbins and Coulter these leaders encourage and stimulate their team to accomplish set goals in an effective way. Transformational leaders use several mechanisms to develop the motivation, confidence and performance of the team. In 1985 industrial psychologist B.A.Bass introduced four main elements of transformational leadership.
i. Idealized Influence – through this model leaders build trust with his team and the team, in returncultivate confidence in leader. This leader act as a role model and shows charismatic personality. Idealized influence can be displayed through the wiliness to take risk and to the degree which extent leader follows ethical principles and values in his actions.
ii. Inspirational Motivation – These leaders inspire their team towards innovations through inspirational motivation. They always encourage employee to become a part of the overall organization. They articulate clear and appealing view of the future. Providing high standard challenges, communicating optimistic future goals and adding value to the task of present are some inspirational motivation tactics used by these leaders.
iii. Intellectual stimulation- Through this factor transformational leader motivates their subordinates to be more creative. Leader develops team’s awareness and responsiveness regarding different types of situations and give opportunities to to use their capabilities to face those situations effectively.
iv. Personal and individual attention – This leader pays an individualized consideration for each employee. It gives him a better idea on each employee’s knowledge level, talents and capacity. So the leader can easily and effectively manage tasks among team members.
2.1.2 Situational leadership theory – According to the Ken Blanchard and Paul Hersey in Management of Organizational Behavior, there is no “one size fits all” approach to leadership. Different types of situations need different types of leadership and management styles. Three main steps of situational leadership theory are identifying the most important task, diagnosing the readiness of subordinates and deciding the matching leadership style.
There are mainly four types of situational leadership. They are as follows;
Source (Blanchard.A , Hersey.P, 1970)
S1 – Telling/Directing – When the team has less willingness and capacity to perform tasks and they are afraid of taking new effort then the leader has to tell what should be done and how it should be done.
S2 – Selling/Coaching – This leader has more communication with his team. This style is more acceptable when the team is interested in their task but their knowledge and ability is low. Coaching is also same to directing. But it differs from it because couching style gets new ideas and suggestions from their team. This has two way communication. The leader spends more time to listen to his team, advice them and support them. This process builds followers’ self esteem, commitment and they will gain the necessary capabilities to perform well in next time
S3 – Participating/Consulting – These leaders believe on relationships more than direction. This style should be used in the situation where the team has high capacity and ability to complete the tasks. But their willingness is low. Leaders do not want to direct the team by saying what to do or how to do, since the team has very good understanding on the activities or the undertaken project. Leader should try to motivate and build their confidence. Listening, Praising to team members are most effective ways to eliminate their demotivation.
S4 – Delegating – When the team members have high level of capacity and ability to work as well as high willingness towards the tasks. These kinds of teams need less amount o supervision or support. These leaders trust their team. Leader keeps the involvement on decision making and problem solving but control is on the hands of the team.
Maturity level of the team decides which style should be used to maximize their ability; capacity and willingness. Hersey and Blanchard suggested four types of maturity levels as follows;
M1 – Team has no ability no knowledge and willingness to perform. S1 is more suitable.
M2- Team wants to perform well. Their willingness is high. But ability is low. S2 is suitable
M3- Team has ability and knowledge but they they are not confidence enough to undertake responsibilities. S3 is more acceptable
M4- Team has ability and willingness to perform. S4 is more suitable
Situational leadership has a simple scale, so it is very easy apply and Easy to understand. And the Leaders have authorization to adjust management styles as they see fit. So with right type of leader this model is very comfortable.
But this model will not be acceptable when there are leaders with limited powers but structurally in a leadership position. And also this model can’t distinguish difference between leadership and management. Situational leader may divert attention away from long run strategies.
2.1.3 Contingency Theory – In 1960 Fred Fielder introduced contingency theory. According to him effectiveness of leadership depends not only on the style of leading but on the control over circumstances. It depends on several factors as follows;
Makeup of the group (Relationship of the group)- This factor describes the relationship between leader and the team. Whether the leader trusts his team or not, whether team has proven their capabilities or whether team is full of conflicts.
Nature of the task – Nature of the undertaken tasks decides leadership styles. If the tasks are clear and routine basis then employees need less supervision.
Power of the leader – Power can be determined through hierarchical position, knowledge and interaction with employees.
Relationship: leader – group Nature of the work Leader Position Power Efficient leadership style
Good Routine Strong Task-oriented
Good Routine Weak Task-oriented
Good Uncertain Strong Task-oriented
Good Uncertain Weak People-oriented
Poor Routine Strong People-oriented
Poor Uncertain Weak Task-oriented