Leadership Comparison

Discuss about the Autocratic and Democratic Leadership Style.

Leadership is the deciding factor of an industry for the success of the businesses operation. The success and growth of an industry is directly related to the efficiency of the leadership. The report is to identify the leaderships exists in different industries. It compares two completely different industries that are retail and automotive industry. A brief description of both the industries comprises the first part of the report followed by the leadership comparison in the industries. The challenges faced in the industries regarding leadership were also recorded. The next part of the report compares one organization from each of the industries discussed in the report. The companies that are selected for the comparison are BWS an Australian retail store that serves liquor in the Australian market and the international car company Ford. A detailed description of the leadership practices, similarities, and dissimilarities in the leadership of the organization is presented. Based on the discussion, justified recommendation was made in the final part of the report addressing the issues identified earlier in the report.

The leaders of the retail industries must see through to balance two main factors that are task direction and people management. The retail stores are of high-volume and vary a wide range of complexity from selling single type of product to more diversified varieties. Moreover, most of the stores in this particular industry are seasonal and the products sold considerably vary. The leadership style reflected by the industry is of bureaucratic, task oriented to manage and direct the employees to achieve work efficiency. This is a single level of leadership who is responsible for taking decisions for the organization. This type of leadership demonstrates minimum consideration about the people and the cultural diversity among the staffs (forumforthefuture.org. 2017). However, this type of leadership shows greater success in customer value proposition.

The focus of the leaders in automotive industry is on the interests and needs of a particular group of people. However, the companies tend to select the altercative leadership in the process of achieving success in the field. However, there lies the lack of compact viewpoint that underestimates the extent of the challenges they are facing or about to face. The industry ranges from a wide range of the types of vehicles that can be produced. It depends on the organization which sector interests them the most. The complexity of the industry is however much lesser than the retail industry as there are particular number of product line possibly exist. The industry on the other hand focuses particular target market and this is relatively same around the world. The demand of the customers are valued deciding the types of motor vehicles to be sold in the particular market However, the industry is undergoing some changes to refocus their goals. The particular leadership in the industry focuses on the customer demand which makes them to choose between the customer value proposition and employee satisfaction. In this case, the value proposition is given optimum priority. It neglects the employee satisfaction in the process.

Similarities and Differences between the leadership

Current Australian retail industry demonstrates the practice of bureaucratic leadership. It shows its effectiveness in managing the work process. Most of the decision made in the retail industry is bind by the rule of management and hardly deviates from it. The leaders of this style is comfortable to follow the specific rules for doing things and takes different level planning for seeking success (Chemers, 2014). However, the leadership opted by the retail industry seems to be justified to support the work environment of the industry. Each of the retail stores have to handle high volume of goods every single day that needs tracking. Moreover, this is a process requires systematic observation that only bureaucratic leadership can provide. However, the particular type of leadership offers little space for considering the well-being of the employees working under him. This in turn fails to propose value to the employees. The strict process on the other hand delivers systematic and quality products and services to its customers that successfully delivers value to the customers. Though the leadership fails to satisfy the needs of all the stakeholders, it customer value is kept in mind and given importance (Achtenhagen, Melin & Naldi, 2013).

Automotive industry on the other hand reflects different types of leadership and it varies from organization to organization. Leadership model opted by ford varies from the one used by Toyota. However, there is a similarity prevails in most of the automotive companies. They tend to follow the autocratic leadership for keeping the decision making authority within the board members (Arumugam, Mojtahedzadeh & Malarvizhi, 2011). This style of leadership is of old schools and has little impact in the continuously changing nature of the employees. The employees show discomfort and dissatisfaction working under this particular style of leadership. However, this type of leadership is profit oriented and can show potential in value proposition. The customer value is considered with utmost importance and staking the comfort of the employees. The process of giving priority to the customer demands sometimes fails in evidencing the social responsibilities of the organization in the process of profit making decisions taken by the leaders. It reflects negative impression on the customers (Ojokuku, Odetayo, & Sajuyigbe, 2012). The example of the Volkswagen emission control issue is the greatest citable example in this regards.

Both the industries chosen show a level of similarities and dissimilarities in the context of leadership. The bureaucratic leadership proves to be common among the retail industry, whereas the automotive industry is dominated by the autocratic leadership style (Dennis, Kinzler-Norheim & Bocarnea, 2010; Bhatti et al., 2012).

Both the style of leaderships is old school and the decisions taken by both autocratic and bureaucratic leaders are completely taken by the leaders only and others have no role to play regarding the matter (Van Wart, 2013). The effects of the leaderships are more or less similar regarding the employee satisfaction that reflects low level of job satisfaction.

Regardless of the similarities found in the leaderships styles of retail and automotive industry, some differences could be spotted. The primary difference that could possibly mentioned is the process of decision making. Bureaucratic leaders take decision from the rulebook and hardly deviate from the prescribed set of procedure. Autocratic leadership on the other hand does no such thing (Antonakis & House, 2013).

BWS is the liquor brand of Woolworths operating around Australia. They sell various liquor products both online and offline (woolworthsgroup.com.au. 2017). Ford on the other hand is selected from the automotive industry that is spread around the world.

The company practices bureaucratic leadership for all the stores operating in Australia. It is till date helping them in attaining success in the process. However, the changing market is challenging them in continuing their leadership practice. The bureaucratic leadership helps them in both creating value and managing the operation (Northouse, 2015). However, the changing generation of the employees is leading to increasing dissatisfaction of the employees. Moreover, new leadership model is required to communicate the value proposition to the customers as the old school value proposition is no longer valid in today’s modern world.

The leadership followed at Ford automobile is the autocratic one. However, Mulally has modified the technique according to the need of changing generation. These modifications helped him to create opportunity for the broken company to make a comeback in the industry (foxbusiness.com., 2017). The practices followed by Mulally is as follows:

• He tries to communicate his vision to the employees to make them understand the reason behind the decision
• The leader’s value is communicated to the employees stating the process of achieving progress.
• The win-win mindset and approach in relationship while partnering with other companies.
• The strong positivism to motivate the employees
• Result oriented leadership to attain maximum benefit. He has managed so far to keep the company from taking load from the government for paying its debts. He has sold some of company’s assets and took loan in exchange of company’s assets, but that has led him to pay some of the debts of the company (com., 2017).

The only similarity that is possible to find between the leadership of the organizations is the employee dissatisfaction is present in both the companies.

The difference between the leadership practices of both the company is the bureaucratic leadership of BMS has negative impact on its employees and they tend to get de-motivated, whereas the autocratic leadership of Ford has negative implication. Mulally is the decision maker of the company. No other’s opinion is taken into account that is crucial for the current situation of the market. Moreover, BWS decisions are ruled out and hardly deviate in any cases.

Based on the current situation of the industries and companies, the following recommendations can help them in developing their situation to cope up with the constant change in the modern day market situation and the market demand.

Both the companies belonging from respective industries can implement the transformational leadership for developing their workplace situation and value proposition. It will help them to keep up with the modern day market situation and address the constant change in the market. However, some modification is required in accordance of the industry implemented. The following will individually address the use of transformational leadership in each industry.

• Use of transformational leadership help the leaders addressing the employees’ needs and prioritize them which will facilitate in developing the satisfaction level of the employees (García-Morales, Jiménez-Barrionuevo & Gutiérrez-Gutiérrez, 2012).
• Leaders following transformational style interact their thought with the followers and consider their opinion in decision-making process. This will help the managers understand the real world problem faced by the employees and help them developing the situation and customer value creation (Wang & Hsieh, 2013).
• Employee involvement will increase their self-esteem and motivate them in the workplace.
• It will help the leaders to take agile decision and the employees will have a level of authority to take quick decision they consider right at the given situation.

• Involvement of employees in decision making will enable the leader to obtain greater insight on customer behaviour and demand by accessing the experience of the employees
• The changing demand of the customers will obviously demand innovation, which would be satisfied by the involvement of the technical team in the process of decision making and accessing the greater innovative ideas (Amit & Zott, 2012).
• The financial problem would only be addressed when the finance team of the company participate and contribute ideas and knowledge to the leader for better understanding the situation and way out. For example, if ford can generate greater profit by increasing the quality of the cars or the services. Production of greater expensive cars will limit the target customer group and increase the production cost. Hence, it will be effective for them to increase the service and assurance to attract more customers under they brand loyalty (Caldwell et al., 2012).

Conclusion

The above discussion concludes that the leadership used by most of the organizations along with the studied organization under each industry reflects a degree of limitation in their performance. The leadership style hold by the leaders of studied industries are incompatible to generate greater revenue for the company. The changing market requires a transformational leadership that will work for both of the industry. The Study specifies the benefits that could be obtained with the use of such leadership style. They can attain greater customer value and employee satisfaction using the transformational leadership and motivate the employees in the workplace by noting their importance.

References

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Amit, R., & Zott, C. (2012). Creating value through business model innovation. MIT Sloan Management Review, 53(3), 41.

Antonakis, J., & House, R. J. (2013). The full-range leadership theory: The way forward. In Transformational and Charismatic Leadership: The Road Ahead 10th Anniversary Edition (pp. 3-33). Emerald Group Publishing Limited.

Arumugam, V. C., Mojtahedzadeh, R., & Malarvizhi, C. A. (2011). Critical success factors of total quality management and their impact on performance of Iranian Automotive Industry. In International conference on innovation, management and service(Vol. 14, No. 2, pp. 312-316).

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Chemers, M. (2014). An integrative theory of leadership. Psychology Press.

Dennis, R. S., Kinzler-Norheim, L., & Bocarnea, M. (2010). Servant Leadership Theory. In Servant Leadership (pp. 169-179). Palgrave Macmillan UK.

García-Morales, V. J., Jiménez-Barrionuevo, M. M., & Gutiérrez-Gutiérrez, L. (2012). Transformational leadership influence on organizational performance through organizational learning and innovation. Journal of business research, 65(7), 1040-1050.

forumforthefuture.org. (2017).  Retail Leadership. Retrieved 11 October 2017, from https://www.forumforthefuture.org/project/retail-leadership/overview

foxbusiness.com. (2017). Alan Mulally and Ford Retrieved 11 October 2017, from https://www.foxbusiness.com/markets/2014/01/22/7-practices-alan-mulally-that-helped-ford-pass-competitors.html

Northouse, P. G. (2015). Leadership: Theory and practice. Sage publications.

Ojokuku, R. M., Odetayo, T. A., & Sajuyigbe, A. S. (2012). Impact of leadership style on organizational performance: a case study of Nigerian banks. American Journal of Business and Management, 1(4), 202-207.

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woolworthsgroup.com.au. (2017). BWS. Retrieved 11 October 2017, from https://www.woolworthsgroup.com.au/page/about-us/our-brands/liquor/BWS