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Is leadership a skill that can be taught or is it an innate ability that only a few can possess?

The question that leaders are born or made has long been debated in the academia (Avolio, 2005). Like the debate on chicken and egg this debate has become timeless. Researchers have taken sides proving one point over another for many decades. Before venturing into answering this question a discussion as to what leadership is according to the major theories of leadership will be undertaken.

What is Leadership According to Major Theories?

The question “What exactly is Leadership” was asked when leadership started gaining acceptance as a subject in the early 19^th century (Stogdill, 1974). The subject of leadership needed content and definitions, and this led to the emergence of early theories of leadership known as The Trait Theories. In the absence of a well-documented research on the subject the researchers looked at live subjects (leaders) around the world and came up with most common traits among them (Costa and Mccrae, 1998). Kirkpatick and Locke (1991) concluded that the great leaders may have many different traits but common traits among them make them great leaders. Some of these traits were recognised as honesty, confidence, job related knowledge, and ambition. The trait theories simply perceived the appearance of leadership. They helped to make leadership an academic subject and laid the foundation for further research. The theory looked at the aspects which distinguished the leaders from their followers and came up with certain traits. The theory’s basic assumption was that since traits are acquired by nature, leaders are born. Anyone who possess specific traits can become a great leader (Northouse, 2012) . However the theory came under criticism in the 1940’s when researchers started proving that not everyone with these traits can go on to become a leader let alone a great leader. The specific criticism of the theory was that if traits are the only facet predicting the leadership then organisations just need to hire the people with the right traits and achieve great results with exceptional leadership, however in reality this was not the case ( Hogan et al., 1977).

Yukl and Van Fleet (1992) noted that the criticism on trait theories led to the emergence of another school of thought known as behavioural theories. As the name states the behavioural theories focus on specific behaviours rather than traits. It looked at what leaders do rather than what qualities they possess. Where on one hand the traits are believed to be inborn, and on the other the behaviours are believed to be learned over a period of time. The earliest theory in the behaviour school of thought is Kurt Lewin’s (1944) theory of Autocratic, Democratic and Laissez-faire styles of leadership. In this theory Lewin identified that leaders have specific leadership styles which have been learned over a period of time. One of them was the Autocratic leadership style which believed on giving orders and expecting the orders to be obeyed. No questions are likely to be asked and followers only do what they are told. The specific style can be seen in armed forces around the world where soldiers only obey the orders without asking questions. The other style he suggested is known a Democratic style, which is currently followed around the world in democracies. Democratic leaders take into consideration the opinions of stakeholders or the representatives of stakeholders and take decisions accordingly (Lewin, 1944). Conger and Kanungo (1987) noted that the basic assumption of behaviour theory was very different from the trait theories. Behaviour Theories basically assumed that leadership is not about the traits but it is about the behaviours which means leaders are not born, rather they can be trained to become good leaders. Lewin’s theory was followed by Black and Mount’s Managerial Grid Theory, University of Michigan Theory, and Ohio State University Theory, all focusing on certain behaviour of leaders, majorly known as production and people oriented styles of leadership ( Davis and Luthans, 1980).

The behavioural theories were replaced by contingency theories in the 70’s. Although the behaviour theories presented a logical answer to what is leadership it came under heavy criticism when researchers proved that one style of leadership will not work in all situations. An example was famous corporate leader Al Dunlap, Dunlap famous of his tough an autocratic approach was often hired by companies who were looking to revive, downsize and get back on track after heavy loses. Dunlap always helped the companies with ruthless axing of employees, freezing salaries and cutting back costs. He helped several companies till he ended up in a company which was doing just fine in the market. However due to his autocratic style he soon became unpopular and loyal employees started leaving the company due to his attitude. This led to the eventual firing of Dunlap from the company. This real life example is one of many where a certain behaviour did not work due to a different situation (Robbins and Judge, 2012). Yukl (2002) commented that contingency theories basic assumption was that leaders have to adopt certain styles of leadership according to the situation. The most famous theory of it is Fiedler’s model which suggested that a leader’s style is fixed, which is either production oriented or employees’ oriented, but the situation can change. The situation was defined by leader member relationship, task structure, and position power. The theory, supported by research, suggested that every situation requires a different kind of leader’s style. It was proven by research that a situation in which leader member relationship is good, positon power is strong, and task structure is high, a leader with production oriented approach will perform best (Fiedler, 1967). Another famous contingency theory was situational leadership theory which suggested that the leader has to change its style according to followers’ readiness. Followers readiness was defined as the extent to which followers are able and willing to do something for the leader (Graeff, 1983).

These famous theories define leadership in different ways. It is hard to find an agreement on one common definition of leadership in the literature. However when we differentiate between a leader and a manager we find agreements that a leader has followers not subordinates and a leader inspires and does not authorise, lastly a leader gives vision towards achievement of a common goal.

Leadership can be taught or it’s an inborn ability:

After concluding what is leadership the next question that needs answering is are leaders’ born or made?

The “Made” school of thought over a period of time has gained popularity. One survey among the top executives of government and private sector organisations in the USA suggested that 54% believed leaders can be made while 19% felt they were born and 28% thought they are both born and made ( Stringer, 2004). Ruvolo et al. (2004) claimed that since the early theories looked at the appearance of leadership they believed that leaders were born. The examples were taken from great leaders of that time including Martin Luther King and Gorge Washington. The researchers who believed that leaders are born strongly believe that nature plays a much higher role in personality development as compared to environment, education and training. One very famous example quoted by these researchers is the study of twins separated at birth. This study took 100 sets of twins who were separated at birth due to different reasons. The separation meant that these twins were brought up by different people, they had different education and environments at home. Logically the choices that these people made in life later should have been influenced by the way they were brought up, but the study proved otherwise. With several examples from the 100 sets it was seen that the twins, although separated at birth, had striking resemblances in the choices they made in life. One set of twins (men), 30 years later, had the same model of car with the same colour, they both owned a dog with the same name, and they both had similar choices in holidays (Newman et al., 1937). Another famous study in this regard was done on young children. These children, all under 5, were judged for the traits they possessed. The study revealed that their dominating traits such as shyness, confidence, and arrogance was adopted from their genes, which meant someone in the family from maternal or parental side had these traits ( McCrae et al., 2000). These two studies have presented evidence which suggests that leadership is a born trait and only a few may possess it. Over the years other studies have taken place which have focused on proving the same.De Neve et al. (2013) described a study conducted at UCL which suggested that the people who had supervisory positions in companies had a Gene called RS4950 in them. The critics of such research claim that these studies are flawed and they only consider a certain number of variables while ignoring the others that may play a considerable role in leadership positions. For instance there is a possibility that many people with Gene RS4950 have no supervisory or leadership positions and they may be living their normal lives. However since the research did not consider including such people in their sample the research is flawed ( Parkay and Hall, 1992).

The other school of thought which believes that leaders are made have their own arguments for it. This school of thought simply argues that if nature plays its role in creating great leaders, for example, why a certain region or country has more leaders as compared to others. For instance current fast developing countries such as China, Malaysia and Turkey are producing effective leaders which are helping these countries progress. On the other hand most of the countries in Africa and some in Asia (such as India and Pakistan) lack supply of effective leaders right now (Ridley, 2003 ). Gregersen et al. (1998) similarly suggested that majority of Fortune 500 companies belong to America, for which the credit is given to the exceptional corporate leadership. This shows that the culture, education, and training plays more of a role as compared to genes of a leader. Day (2001) emphasized that this school of thought feels that culture and education help people gain certain skills. One of these skills is leadership which is seen more in some countries as compared to others. A study in different universities in America revealed that Stanford University produces the highest number of entrepreneurs in the country. This study shows that education and skills developed at Stanford are different as compared to other universities in America and that’s why they have the highest number of entrepreneurs ( Eesley and Miller, 2012). Again, this strengthens the belief that the nurturing of an individual will play a vital role in taking and acquiring the leadership skill as compared to nature. Another study by Goldsmith and Morgan (2004) researched 88,000 managers who participated in leadership development programs. These programs were focused on teaching managers how to be effective leaders. Interestingly many of these managers came back from training and applied the knowledge learned in their professional lives. On the other hand the managers who did not go through the program showed no improvement (Goldsmith and Morgan, 2004). However the critics of this school of thought ask the question if the leaders can be made why does everyone not go on to become a leader? The question seems logical considering that even the best universities will produce 15-20% exceptional corporate leaders who will become the pride of the University, but what about rest of the 80% people, why do they not assume leadership roles ( Goleman, 2003). Nurture et al. (2004) answered the question by claiming that leadership in a group of people is like a bell curve, in which the bottom 15% will not have the potential and ability to acquire this skill. The top 15-20% are the exceptional talent who do not need leadership development. However it is about the vast majority that lies between top and bottom 15%, who if trained well, can acquire the skill of leadership.

Conclusion:

It is hard to conclude a debate which has such strong arguments and research to support both sides. There is no denying the fact that nature plays a vital role in leadership. Many traits are seen commonly in great leaders. These traits have helped us identify what leadership is. These traits have also helped organisations recruit the right people. However nature may not be the only answer to effective leadership. Looking around and going back in history it can be seen that leaders come from different places, different background and a leader’s children will not always turn out to be leaders. On the other hand it is noted that certain cultures instil confidence in children at a very early age, they develop opinion and often go on to make better choices as compared to children who come from a culture where choices are imposed and respect is so embedded that it stops them from asking questions and they end up making poor and limited choices in life. There is no denying that some people are born leaders, but there are no universally accepted traits which define the born leadership. On the other hand training and development focus on producing leaders without the assumption of born traits and produce better results. So it can be concluded that nature and nurture both play a role in leadership, however nurture has a more important role as compared to nature.

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Introduction

Statt (2000) defines motivation as “a general term for any part of the hypothetical psychological process which involves the experiencing of needs and drives and the behaviour that leads to the goal which satisfies them.” In essence, the motivational theories provide explanations as to why people behave the way they do. This paper explores the importance of motivation as a management skill. In so doing, it delves on the major motivation theories and subsequently identifies which of those theories have been proven effective within the context of management. The structure of this paper is as follows: first, it identifies and explains the following motivation theories: need theories; expectancy theory; equity theory; and goal setting theory. The need theories include the following: Maslow’s Hierarchy of Needs Theory, Alderfer’s ERG Theory, Herzberg’s Dual Structure Theory and David McClelland’s Need Theory. Next, it evaluates the effectiveness of the abovementioned motivation theories in the development of management skills.

Motivation Theories

In 1953 Viteles insisted that in the absence of a good theoretical foundation, applied research follows a path of trial and error; and becomes misdirected and inefficient. Indeed, there has been a significant body of literature that delved on the theories of motivation. These diverse motivation theories helped identify and determine the myriad of factors that drive people to behave in particular ways. There are numerous motivation theories with more than one may of grouping or classifying them. However, the most common one is to classify them according to four general types, namely: need theory; expectancy theory; equity theory; and goal setting theory. These are considered as the formal motivation theories. Additionally, there are also some informal motivation theories that are classified under the following general classes: (1) Theory X; and (2) Theory Y.

A. Need Theories

Need theories buttress the assumption that people have “psychological needs arising out of, though going far beyond, basic biological drives like hunger, thirst, sex or the avoidance of pain” Motivation in this case, is referred to the content of satisfying such needs; and the need theories are referred to as the ‘content theories’. Maslow’s Hierarchy of Needs Theory, Alderfer’s ERG Theory, Herzberg’s Dual Structure Theory and David McClelland’s Need Theory all belong to this group of theories.

1. Maslow’s Hierarchy of Needs Theory –
According to Maslow, there are five key categories of needs that are arranged in a hierarchy. Needs belonging to the lower levels must be satisfied first, “before the higher level needs become important.” Physiological needs (e.g. food, water, air) occupy the lowest level in the hierarchy. This is followed by the safety needs such as security, freedom from danger, good health, etc. Next, are the social needs which are exemplified by love, affection and group acceptance? Next are the esteem needs which are achieved through “recognition and respect from colleagues and by voiced approval from others.” At the topmost level are self-actualisation needs which are associated with skills and potentialities; and “relate to finding self- fulfilment opportunities on which to build a career.”

2. Alderfer’s ERG Theory

Alderfer’s ERG theory is similar to Maslow’s Hierarchy of Needs theory. However, instead of five key categories of needs, the ERG theory only has three major needs categories, namely: (a) existence needs, which are the same as the physiological needs in Maslow’s Hierarchy of Needs theory; (b) relatedness needs, which are associated with successfully relating to others; and (c) growth needs, which are associated with self-development and growth. These three needs categories are also arranged in a hierarchical manner.

3. Herzberg’s Dual Structure Theory

This theory posits that “motivation factors affect one dimension, ranging from satisfaction to no satisfaction.” This theory groups needs into two general categories, namely: hygiene needs and motivator needs. Moreover, this theory assumes that people’s attitudes toward aspects of their jobs that are regarded as motivators, influenced job satisfaction and not motivation. These are referred to as hygiene factors, which include the following: interpersonal relations, company policies, working conditions, supervision, and salary and benefits. On the other hand, the motivators include the following: “achievement, independence, recognition, and responsibility, challenge and so on”. This theory is particularly applied in a technique used for structuring employee tasks called ‘job enrichment’. Herzberg’s Dual Structure theory suggests that managers adopt a two-stage process, wherein the first stage requires the elimination of factors that cause dissatisfaction in order to enhance motivation in the workplace; and the second stage necessitates increasing opportunities for “achievement, recognition, responsibility, advancement and growth.”

4. David McClelland’s Need Theory

The Acquired Needs Theory posits that certain types of needs are acquired during a particular individual’s lifetime. Hence, people are not automatically born with such needs, but acquire them through their various life experiences. These needs are grouped into the following categories: (a) achievement needs; (2) affiliation needs; and (3) power needs. McClelland explains that people with a strong need for achievement are more likely to enjoy entrepreneurial and innovative activities; while those who have a high need for affiliation are commonly successful integrators; and those that have strong power needs often attain top levels in the organisational hierarchy.

B. Expectancy Theory

The Expectancy Theory presupposes that motivation is largely dependent on an individual’s mental expectation about their ability to perform tasks and subsequently receive desired rewards. In contrast to the needs theories discussed above, the expectancy theory does not focus on understanding the various types of needs, but rather, on the specific thinking process that individuals utilise in order to achieve their rewards. This theory places a particular focus on the relationships among the following factors: (1) the individual’s efforts; (2) the possibility of high performance; and (3) the desirability of outcomes arising from the high performance. Thus, in essence, the expectancy theory posits that motivation is largely dependent on how much a particular individual wants something and how likely that individual thinks that he is to get it. Moreover, this theory suggests that managers need to recognise that: (a) employees work for many reasons; (b) such reasons may change over time; and (3) “it is necessary to show employees how they can attain the outcomes they desire.”

C. Equity Theory

The Equity Theory presupposes that people are motivated to achieve and “preserve equitable treatment for themselves.” In this case, equity is construed to mean the “distribution of rewards in direct proportion to the contribution of each employee to the organization.” Hence, this theory focuses on “the exchange relationships among individuals and groups and the motivating effects of a perceived imbalance in the exchange.” This theory could be further exemplified in the following manner: first, an input-to-outcome ratio is developed by the individual concerned. Inputs in this case, pertain to the contributions of the individual to the organization such as time, effort, skills, education, experience, etc. Outcomes, on the other hand, pertain to the rewards that are obtained from the organisation such as “pay, benefits, recognition, and promotions.” Next, the individual compares the input-to-outcome ratio with what he perceives as the input-to-outcome ratio for some other individual, who could be a co-worker, or a friend working for another organization, or even an average person in his organization. If the two ratios being compared are approximately similar, the individual concerned may feel that the organization is treating him equally or fairly. On the other hand, if his input-to-outcome ratio is higher than that of the ‘comparison other’, he may feel under- rewarded and is, thus, motivated to make changes. Such changes may include decreasing his own inputs; try to increase his total outcome by demanding for an increase in pay; leave the organization; or carryout a new comparison with a different individual. Since pay is a most relevant outcome within the context of the equity theory, it suggests that managers avoid problems arising from inequity by ensuring that rewards are distributed equitably – that is, on the basis of employee performance; and that “ everyone clearly understands the basis of his or her own pay.”

D. Goal Setting Theory

The Goal Setting Theory posits that “behaviour is a result of conscious goals and intentions.” Thus, this theory was underpinned “on the premise that human action is purposeful, in that it is directed by conscious goals.” It has been observed that employees are more likely to be motivated to attain goals that are established by both their managers and themselves. This theory suggests that the manager must develop a thorough understanding of the goal setting processes of employees and the manner by which they attain such goals. Thus, in applying this theory, a manager can formulate and implement a reward system that “fit employee needs, clarify expectations, maintain equity and provide reinforcement.” Moreover, this theory essentially provides an understanding of the goal that a particular employee intends to achieve and the subsequent rewards that the employee could get if the goal is attained. The Goal Setting theory is characterised by two attributes, namely: goal difficulty and goal specificity. Goal difficulty is the degree or extent by which the goal becomes challenging and requires effort. On the other hand, in terms of goal specificity, “goal content can be vague (“work on this”) or specific.” It is recommended that a goal be specific, moderately difficult and one that the employees is motivated to achieve.

Effectiveness of Motivation Theories

There is a dearth in available studies that explore the effectiveness of motivation theories in the context of management in general, and in the development of management skills in particular. However, there are a few studies that explored such topics. One such research undertaking was the study conducted by Kini and Hobson in 2002 which evaluated the relationship between motivational theories and successful total quality initiatives. In particular, the researchers tested the effectiveness of the following motivational theories in the success of total quality initiatives: (a) Maslow’s Hierarchy of Needs Theory; (2) Alderfer’s ERG Theory; (3) McClelland’s Theory of Needs; (4) Expectancy Theory; (5) Goal Setting Theory; and (6) Equity Theory . In this study, the researchers constructed and distributed a survey instrument which was designed so that “the participants can enter a score between 0 to 10 to indicate the extent to which each of the item in the question was utilized in participant’s organization’s approach to total quality” and performed a regression analysis on the collected data. The results indicated that Maslow’s Hierarchy of Needs theory; Alderfer’s ERG theory; McClelland’s Theory of Needs and Equity Theory were ineffective in promoting “organizational commitment to employee morale, cross training and performance recognition.” In contrast, however, the results of the study suggested that “a combination of major elements in goal setting and expectancy theories were most likely to produce success in the implementation of total quality initiatives.” Hence, this study found that the goal setting and expectancy theories were indeed effective in developing management skills in terms of developing an effective system to monitor TQI progress; of facilitating clear communication of performance expectations; and empowerment of work teams. In contrast, however, in a study conducted by Tesone in 2005, it was found the Maslow’s Hierarchy of Needs Theory had significant implications “for managers in organisations from the standpoint of recruitment, selection, employee retention, and performance improvement.” The results of the study indicated that younger workers prioritise socialization needs, “only to be replaced by more self-actualizing and self-esteem needs with age.” Managers may employ this understanding of “human intrinsic needs to develop effective strategies in the areas of employee recruitment, selection, and retention, as well as performance management.”

Conclusions

The motivation theories discussed in this paper, namely: need theories; expectancy theory; equity theory; and goal setting theory; indeed have management implications, and thus, are deemed important as a management skill. For example, Maslow’s Hierarchy of Needs Theory can be used by managers in developing training programs that target the specific needs of the employees, for such training programs to be effective and subsequently produce positive outcomes. In the same vein , understanding of Herzberg’s Dual Structure Theory can help managers eliminate the factors that cause dissatisfaction in order to enhance motivation in the workplace; and subsequently increase opportunities for employee achievement. Similarly, an understanding of The Goal Setting Theory can enable a manager in formulating and implementing appropriate reward systems that meet employee needs, offer reinforcement and maintain equity. The Equity Theory, on the other hand, can help managers prevent problems emanating from inequity by ensuring that rewards are equitably distributed.

Indeed, the motivation theories explained in this paper has important management implications. However, there is a dearth in empirical studies that confirm the effectiveness of such motivation theories in management in general; as well as their importance a management skill. Thus, theoretically, motivation theories are important as a management skill. However, there is a need for further research in this area if we are to confirm such claims empirically.

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Ranjan B. Kini, and Charles J. Hobson, “Motivational Theories and Successful Total Quality Initiatives,” International Journal of Management 19, no. 4 (2002).

Dana V. Tesone, “Workplace Motivation and the Brain,” Journal of Applied Management and Entrepreneurship 10, no. 4 (2005).

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Stress is a major issue for modern businesses and managers in the contemporary working environment. Not only do stress related illnesses have a cost for organisations in terms of lost working hours and productivity, but higher levels of stress have also been associated with lower level of satisfaction, poorer quality service delivery, and higher levels of turnover (George and Zakkariya, 2015). This essay will thus look to carry out a critical review of theory and research into the various options and approaches which can be used to manage employee stress and ensure it does not reach an excessive level which could harm organisational performance and outcomes.

One of the main themes in the literature is the important role that an employee’s immediate managers, and particularly line managers, can play in the management of stress. According to Donaldson-Feilder et al (2008), as line managers are responsible for organising employees and directly supervising their work, they are ideally positioned to address their psychological needs and manage work related stress. This indicates that line managers need to ensure they have developed and are able to apply the necessary skills to the management of employee stress in order to maintain levels of moral and performance. At the same time, research indicates that senior managers need to focus on empowering line managers and giving them the necessary support and delegated authority to manage stress among their teams, in order to help employees “manage their stress proactively through planning, prioritizing and delegating work” (Moyle, 2006, p. 48). This is an important issue, given recent findings that many line managers are themselves too stressed to help their employees deal with work related stress (Crawford, 2013). This indicates that the management of stress is an issue which requires managerial involvement at all levels, as build ups of excessive stress in any layer of an organisational hierarchy can trigger additional issues and performance problems.

In addition to the direct management of stress, it is also important to recognise the role of leadership styles in creating an organisational environment in which the causes of stress are minimised. As noted by Huczynksi and Buchanan (2010), many managers continue to follow traditional supervisory leadership theories, through which they look to encourage and reward good performance and reprimand employees who fail to perform. However, there is a risk of this type of leadership resulting in an overly autocratic approach to the management of employees. A research study by Castledine (2004) showed that this style of leadership is associated with higher levels of stress, leading to a lack of commitment and risk of employee burn-out. This thus indicates one of the primary paradoxes in the management of stress, namely that a degree of stress is required in the form of pressure to perform and penalties for failure if employees are to be motivated to work hard, but above a certain level this stress can become destructive. As such, one of the core options for managing stress without eliminating it is to use transformational and participative leadership styles which will motivate employees to perform whilst providing them with support and motivation to avoid any issues of excess stress, and preventing a long term accumulation of stress which can cause damage to employee outcomes (Northhouse, 2011).

In addition to the specific style of leadership, it is also important to recognise the role of individual employee factors, both inside and outside the organisation, in influencing levels of stress and the negative impacts which can result. This is particularly important in light of recent developments in the nature of work, including flexible labour markets and the rise in knowledge work. According to Robbins et al (2010), this has resulted in a growth in employee expectations around the rights and the obligations of organisations and employees, and a demand for organisations to also recognise these rights. This can cause conflict between organisational and employee priorities, particularly in the area of work life balance, and the extent to which demands placed on employees by organisations are fair and reasonable (Sturges and Guest, 2004). This is of importance in the context of employee stress, given that research has shown that a positive work life balance is one of the major factors in preventing the build up of stress and helping support healthier lifestyles for employees (Gregory and Milner, 2009). Ensuring a positive work life balance, which does not place excessive demands on employees, is thus also key to managing levels of employee stress.

The role of work life balance in controlling organisational stress is also linked to the general literature around the growing importance of the psychological contract. Evidence from the literature indicates that the formation of a strong psychological contract between an employee and their manager and organisation can help to boost levels of motivation and thus drive higher levels of performance (Watson, 2001). However, the psychological contract is also based on a strong recognition of the role of the organisation in supporting the employee with any specific issues or circumstances, in order to make them feel more valued (Abendroth et al, 2012). A failure to manage the psychological contract can result in perceptions by employees that the organisation and its managers have broken the contract, which can increase levels of stress and the negative impacts of stress on organisational outcome (Houston et al, 2006). This indicates that managers must be attuned to the implied promises in the psychological contracts they have developed with their employees and must honour these promises or risk high levels of employee stress and associated dissatisfaction.

The ability of managers to identify and address these issues is also linked strongly to the level of managerial understanding around stress as an emotional issue. This in turn leads to the argument that managers who are able to deal better with stress and other emotional issues will be better at controlling them and reducing any associated negative impacts, causing Goleman et al (2002) to argue that emotional intelligence is now a vital competence for modern leaders. This argument is supported by Hughes et al (2005), who use theory to argue that emotional intelligence will help leaders to improve their level of understanding of the emotional behaviours and needs of employees, and thus allow them to respond to these issues in a supportive manner, building a more genuine relationship. This will thus improve the ability of managers to understand and address the causes of stress, helping to pre-empt the emergence of stress in the workplace. Managers can thus look to develop their emotional intelligence in order to improve their management of stress.

Unfortunately, whilst emotional intelligence is one of the areas of management competence which is seen as amongst the most prominent in the management of stress, it is also one of the most controversial. On the one hand, Sadri (2012, p. 535) states that “the components of emotional intelligence integrate with contemporary leadership development practices”, which supports the argument that emotional intelligence is key to the development of effective leadership which can help manage stress. However, research and arguments by both Antonakis et al (2009) and Lindebaum (2009) indicate that whilst there are strong theoretical arguments for emotional intelligence, there is very limited statistical evidence to support these arguments. In particular, Lindebaum (2009) argues that the value of emotional intelligence is generally supported through the use of hyperbolic claims around the value of this competence in the management of stress and achievement of positive employee outcomes, however the empirical support for these arguments is very limited. As such, whilst the management of emotional issues and their potential negative impacts is widely supported in the literature as a method of managing employee stress, the existence of a single competence or capability which can ensure effective management of these complex issues is less clear.

In conclusion, the literature indicates that there are a number of methods, techniques and approaches which can be used to ensure the effective management of stress. These include ensuring that line managers are empowered and trained in dealing with stress and are themselves protected from stress, and also ensuring that leadership styles are participative and transformational to ensure pressure to perform does not turn into high levels of stress. In addition to this, the organisation and its managers must support positive individual level factors such as work life balance and a psychological contract which establishes clear expectations and meets said expectations. There is also a strong argument that leaders and managers need to develop higher levels of emotional intelligence if they are to understand employee needs and emotional requirements and thus develop appropriate responses to address these needs and the stress they may cause. However, this argument is not well supported in the empirical literature, which indicates that the development of emotional intelligence may not be possible or feasible. Instead managers should look to respond to each situation individually and manage the stress which can result in order to keep overall levels of stress in their organisation at an acceptable level.

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Farm Management
Assess the current capacity of ‘Holly Farm’ and critically evaluate the optional ways of achieving the intended growth in the number of visitors, bearing in mind that capital investment is not available, although self-financing revenue earning ventures can be considered.
1. Introduction

This piece examines the case of Holly Farm, and the plan proposed by Gillian Giles to attempt to boost the number of visitors attending the farm. Holly Farm is currently quite a successful example of a farm that has diversified into visitor activities to boost its overall revenue levels. However, the farm has now reached a point at which visitor levels are relatively steady, and hence the farm is failing to grow its revenue significantly. This piece will thus investigate the current situation at the farm, including the current visitor numbers and the projected capacity for the farm. This data will then be used to determine the extent to which the farm can try to attract more visitors and the strategies that could be used to achieve this. This analysis will take place assuming that the farm is unable to raise further capital investment, other than through additional services that will also generate revenue.

2. Analysis and current situation
Car park capacity

Coach spaces

6

Car spaces

40

Average visitors per coach

35

Average visitors per car

3

Daily coach visitor capacity

210

Daily car visitor capacity

120

Total daily capacity

330

Current visitor numbers

April

May

June

July

August

September

October

Total

Visitors

1,200

1800

2800

3200

3400

1800

600

14,800

Days open

16

16

16

16

16

16

16

112

Weekend days open

8

8

8

8

8

8

8

56

Week days open

8

8

8

8

8

8

8

56

Average weekend day visitors

100

150

233

267

283

150

50

176

Average weekday day visitors

50

75

117

133

142

75

25

88

Daily car park capacity

330

330

330

330

330

330

330

330

Weekend utilisation

30.3%

45.5%

70.7%

80.8%

85.9%

45.5%

15.2%

53.4%

Weekday utilisation

15.2%

22.7%

35.4%

40.4%

42.9%

22.7%

7.6%

26.7%

Daily milking parlour capacity

200

200

200

200

200

200

200

200

Weekend milking parlour visitors

80

120

187

213

227

120

40

141

Weekday milking parlour visitors

40

60

93

107

113

60

20

70

Weekend utilisation

40.0%

60.0%

93.3%

106.7%

113.3%

60.0%

20.0%

70.5%

Weekday utilisation

20.0%

30.0%

46.7%

53.3%

56.7%

30.0%

10.0%

35.2%

The analysis of the current situation is based on the following assumptions:

On average, each coach visiting the farm will contain 35 visitors, and each car will contain 3 visitors. This is to account for the number of single parent families and families with only one child that may visit the farm.
The proportion of visitors by coach and by car are roughly proportional to the respective visitor capacity for coach and car visitors
The car and coach spaces cannot be used flexibly, i.e. coaches cannot park in the car spaces and vice versa
The milking sheds can support 80 people per hour for a period of two and a half hours, thus they have a daily capacity of 200
The visitors are spread roughly evenly throughout each month
90% of visitors arrive after 12:30pm, and the visitors that arrived before 12:30pm at still there at this time. As such, around 1pm all visitors to the farm are at the farm and hence all need a car park space

The analysis indicates that the farm is currently very close to its maximum visitor capacity in July and August, with 80.8% and 85.9% capacity utilisation in the car park on these days. With 80% of visitors going to the milking parlour, the parlour itself is already over capacity on these days, with capacity utilisation levels of 106.7% and 113.3% respectively. It must be assumed therefore that some visitors that would have liked to have visited the milking sheds were unable to do so due to the capacity constraints.

3. Different scenarios

Two primary scenarios have been considered. The first is where the farm engages in widespread promotional activity designed to boost overall levels of attendance by 50%. The second is where the farm engages in targeted promotional activity designed to encourage school visits during the week, thus boosting weekday attendance levels by 50%. The analysis for these two scenarios is shown below:

3.1 Boost visitor demand by 50% on all days
Projected visitor numbers

April

May

June

July

August

September

October

Total

Visitors

1,800

2,700

4,200

4,800

5,100

2,700

900

22,200

Days open

16

16

16

16

16

16

16

112

Weekend days open

8

8

8

8

8

8

8

56

Week days open

8

8

8

8

8

8

8

56

Average weekend day visitors

150

225

350

400

425

225

75

264

Average weekday day visitors

75

113

175

200

213

113

38

132

Daily car park capacity

330

330

330

330

330

330

330

330

Weekend utilisation

45.5%

68.2%

106.1%

121.2%

128.8%

68.2%

22.7%

80.1%

Weekday utilisation

22.7%

34.1%

53.0%

60.6%

64.4%

34.1%

11.4%

40.0%

Actual average weekend day visitors

150

225

330

330

330

225

75

238

Actual average weekday day visitors

75

113

175

200

213

113

38

132

Total weekend day visitors

1200

1800

2640

2640

2640

1800

600

13320

Total weekday day visitors

600

900

1400

1600

1700

900

300

7400

Total visitors

1800

2700

4040

4240

4340

2700

900

20720

Daily milking parlour capacity

200

200

200

200

200

200

200

200

Weekend milking parlour visitors

120

180

264

264

264

180

60

190

Weekday milking parlour visitors

60

90

140

160

170

90

30

106

Weekend utilisation

60.0%

90.0%

132.0%

132.0%

132.0%

90.0%

30.0%

95.1%

Weekday utilisation

30.0%

45.0%

70.0%

80.0%

85.0%

45.0%

15.0%

52.9%

It should be noted that, for this scenario, as the capacity of the car park is limited to around 330 people per day, some visitors who wish to visit the farm on weekends in July and August will be unable to do so. The farm will thus have maximum average daily weekend visitor numbers during these months of 330. A plan should thus be put in place to manage capacity on these days, and ensure that visitors do not travel a long way only to find there is no space in the car park.?

3.2 Boost visitor demand by 50% for weekdays only
Projected visitor numbers

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Evaluate how approaches to managing people differ and how these differences can be explained by cultural context.”
Introduction

In this international age of business where firms operate in many different parts of the globe, it is important to note that approaches to management may differ across cultures. In setting up a new office in, for example, China or Japan, potential managers should seek to adapt to the different cultural practices of the host country in order to better manage their workforce and achieve productivity.

In this essay, we shall, firstly, discuss methods of measuring key dimensions of culture, and then using said dimensions, look at the different management styles between three countries; China, Japan and the US, currently the three largest economies in terms of GDP, and seek to determine how each approach is shaped by the unique cultural contexts of each country.

Measuring Key Dimensions of Culture

In order to measure the potential effects of culture on the behaviour of said culture’s firms and managers, Geert Hofstede (2001), while working for IBM in the late 70s and early 80s, identified six key dimensions of culture that could be measured through use of survey data and indexed values, namely;

Time Orientation (Long Term vs Short Term); a measure of the extent to which each society values history, heritage and tradition – whether it prefers to uphold traditional values and is more resistant to new ideas and technology (Long Term Orientation) or whether it is more fluid, less focussed on the past and more open to change (Short Term Orientation);

Power Distance (High vs Low), which measures how well the society in question handles uneven distributions of power; whether it is generally accepted and understood as a fact of life (high power distance) or whether it is held to be deeply unfair, unnatural, and something to be railed against (low power distance);

Individualism vs Collectivism; a measure of the extent to which a sense of community and collective responsibility exists, and whether it is thought to be more important than individualist beliefs and desires. Individualist societies tend to value independence, privacy and personal fulfilment, while collectivist societies tend to value group interdependence and a repression of personal ambition when it is misaligned with communal values;

Uncertainty Avoidance (Weak vs Strong), which measures the extent to which each society is comfortable dealing with risk, uncertainty and ambiguity –societies with high degrees of uncertainty avoidance tend to be highly regulated and value careful planning and structure, while societies with low degrees of uncertainty avoidance tend to be more pragmatic, and accept change and risk as factors of life;

Masculinity vs Femininity; a measure of societal gender differentiation – in ‘masculine’ cultures, gender roles are highly differentiated and society as a whole places higher values on competition, ambition, and personal achievement whereas in ‘feminine’ societies gender roles are less starkly defined and more equal, and society tends to place higher values on relationship building, modesty and group harmony (Hofstede and Minkov, 2010).

The US

American society traditionally has a tendency to value individualism and personal freedoms – indeed, such ideals can be seen in the idea of ‘The American Dream’, which postulates that anyone can achieve great wealth and success through individual hard work and determination. With regard to the Hofstede (2001) dimensions of cultural influence;

Source: Gallant (2013)

The United States scores low on the measure of Power Distance, suggesting that American culture is generally intolerant of uneven distributions of power and prefers to see all men as equal (as is laid out in the American Declaration of Independence). It also scores low on Time Orientation, suggesting US society prefers to embrace change and adapt to new ideas rather than sticking to more traditional approaches. It scores quite highly on Masculinity vs Femininity, which is perhaps a reflection of the traditional American respect for competition and ambition. Unsurprisingly, it scores very highly in the measure of Individualism vs Collectivism, a reflection of the deeply held belief in individual freedoms and independence which has been a mainstay of American culture since the war of independence.

This strong sense of individualism is reflected in the American approach to management. Generally, American managers are expected to deal with employees as individuals, rather than as a collective – the ‘open door’ approach to management, where employees are free to approach and discuss issues, suggestions and ideas with upper management, is a uniquely American approach to management that has gained traction in other parts of the world (Laurent, 2006) as it allows employees to feel that their ideas and opinions are valued by those higher up the corporate ladder. American managers are often viewed as facilitators, helping employees to develop personal talents and understanding the individual strengths and weaknesses of those they oversee (Lewis, 2000). Indeed, many American employers use psychometric tests in their hiring process, to determine an applicant’s individual skill level and expected role within the team (Jenkins, 2001). Indeed, skill-based human resource management theories and practices have quickly gained traction in many American firms (Lawler, 1992), reflecting the US cultural practice of embracing new ideas and valuing individual contributions.

There is also a strong sense of competition prevalent in the American approach to management, with promotions tending to go to those who have been seen to ‘rise above the rest’, rather than merely to those who have had the longest tenure (Morris and Pinnington, 2012). The study by Morris and Pinnington (2012) shows that many US manufacturing firms (around a third of those studied, including several of the largest) have an “up-or-out” approach to employee promotion, whereby if an employee has not risen to the next level of the career ladder by a specified time, they are asked to leave the firm. A study by Gibbons and Waldman (1999) shows that workers in US firms who receive promotions early in their career tend to then be promoted quickly to the next level again, suggesting that individual achievement and ambition is both recognised and rewarded.

China

Chinese society is highly influenced by the teachings of Confucius, where all relationships are seen as inherently unequal; both elders and superiors are to be automatically given the utmost respect, and where the group is held to be far more important than the individual (Yum, 2009). This emphasis on group cohesion over individual freedoms was further influenced by the advent of Chinese communism in 1949, and the formation of the People’s Republic of China. While China has become decidedly less socialist economically over the past two decades, owing mainly to Deng Xiaoping’s economic reforms of 1978 and 1992, it still remains a communist country, and its socialist ideology is still highly prevalent in everyday life (Yum, 2009)

With regard to the Hofstede (2001) dimensions of cultural influence;

Source: Gallant (2013)

China scores highly on the measure of Power Distance, reflecting the fact that Chinese society inherently accepts uneven power distribution and inequality as a fact of life. Unsurprisingly, China scores very low on the measure of Individualism vs Collectivism, given both the Confucianist and the ruling Communist Party’s emphasis on obedience to the state and group cohesion. It scores relatively highly on the measure of Masculinity vs Femininity, suggesting that gender roles are fairly strictly defined, and that ambition and assertiveness are valued, although mainly when they are used for the benefit of the group/state. China scores very highly on Time Orientation, suggesting that Chinese culture is very traditional and conservative, placing great emphasis on traditional values and methods. They also score very low on Uncertainty Avoidance, suggesting that Chinese society generally does not tolerate uncertainty, and prefers rules and strict structures to be in place.

This can be seen in the fact that Chinese organisations tend to be highly structured and hierarchical, with each individual having a strict distinct role within the organisation (Lewis, 2000). Chinese managers tend to be very autocratic, and most decision-making is made from the top-down with little consultation (Gallant, 2013). Chinese decision making tends to be highly directive, task-oriented and low in cognitive complexity, with little room for interpretation (Martinson and Davison, 2005). Senior managers often have close ties to the Communist Party, and often important business decisions – especially those related to international trade – are scrutinised by party officials before being made (Osland, 1990).

Chinese society emphasises the need for social cohesion, and the avoidance of conflict. Lockett (1988) suggests that the Chinese approach to management is much more people and relationship-oriented, and less performance-driven than in the West. When it comes to promotion, managers tend to promote those who are seen to be trustworthy and reliable rather than those who have sought to ‘rise above the rest’ at the expense of others (which is seen to be harmful to group cohesion), and length of tenure is also a highly important factor in determining promotion prospects (Ding et al, 1997).

Japan

Japanese society in general emphasises politeness and modesty as key virtues to be upheld – in a country with one of the highest urban population densities in the world, such virtues are important in maintaining social cohesion (Clammer, 2011). Japan was essentially closed to the outside world, apart from occasional contact with Dutch traders, until 1854, when the US Navy forced it to open its borders to trade (Totman, 2005). Since then, it has established itself as the third largest economy in the world in terms of GDP, behind the US and China at first and second place, respectively.

With regard to the Hofstede dimensions of cultural influence;

Source: Gallant (2013)

Japan scores low on the measure of Individualism vs Collectivism, suggesting that Japanese society values group cohesion and social relationships over individual desires and accomplishments. Japan scores very highly on the measure of Masculinity vs Femininity, suggesting a high emphasis on fixed gender roles and on competition. It also scores very highly on Uncertainty Avoidance suggesting a high importance placed on the value of structure and rule formation, which can be interpreted as a holdover of its imperial past and its emphasis on a strict social hierarchy (Benedict, 1967). This is unsurprising given the high score for the measure of Time Orientation, which demonstrates Japanese culture is generally rather traditionalist and conservative.

Although Japan scores low on the measure of individualism, Japanese managers tend to invest a great deal in their employees’ skills and development – in many Japanese firms, new employees spend around six to twelve months in training in each division of the company, so they can understand the different aspects of the firm’s organisation (Gallant, 2013). This ties in to the Japanese emphasis on structure and collectivism – each employee knows their role, and understands the role others play in the firm’s activities. Japanese decision making tends to be very collaborative – the Japanese concept of ‘hourenshou’ captures this perfectly. It refers to the necessity of reporting on both your own work and that of others, in ensuring everyone involved in the process is kept informed on how each piece of work is progressing (Clammer, 2011). Often, decisions are made at the middle management level, after consulting with subordinates, and are then passed up the chain to upper-level management to implement. Top management is seen as more of a facilitator than as a strictly authoritarian body. This idea of group responsibility is also upheld in the Japanese concept of ‘genchi genbutsu’ which translates roughly as the need to get one’s hands dirty when one spots a problem, regardless of role or level. Thus, top-level management are often willing to pitch in on a project to help it succeed, even if said project is many levels below (Clammer, 2011).

The Japanese approach to promotion emphasises both seniority, maintenance of group cohesion, and modesty – the higher a manager rises, the more modest and unassuming he needs to appear (Suzuki, 1986). In Japan, it is generally expected for an employee to spend his working life at one company, slowly developing their individual skills and moving up the ranks, reflecting both the Japanese cultural preference for strong structure and organisation and avoidance of ambiguity, and in Japanese society’s preferred long-term approach to Time Orientation.

Conclusion

While links can be drawn between each country’s unique cultural dimensions and its approach to management, care should be taken when applying such knowledge. As with any sweeping generalisations, there are many exceptions to the rule. However, such generalisations can still be useful – as Lewis (2000) notes, “Determining national characteristics is treading a minefield of inaccurate assessment and surprising exception…there is, however, such a thing as a national norm” (Lewis, 2000, p3). So while not every Japanese manager will be modest, self-effacing and open to collaborative decision making; or every Chinese manager autocratic and avoiding of conflict; or every American manager highly competitive and performance-focused; such archetypes are generally successful in each area of cultural context, and the conscientiousness manager would do well to keep these national differences in mind while dealing with one of the aforementioned nations.

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In the first instance is necessary to define both employee participation as well as what is meant by performance. Employee participation may be defined as the process by which employees are involved in the decision making process of a business rather than merely being expect to following instructions (Times 2009) and as such this forms what is referred to in HR as empowerment. Performance on the other hand can be considered from two perspectives, firstly there is the performance of the individual in question and how their personal performance is affected by the concept of employee participation. Secondly there is the performance of the organisation as a whole to consider and how this will change with varying degrees of employee participation. As such the essay will analyse performance from these two perspectives before drawing a conclusion as to the perceived benefits for both parties.

Approaches to employee participation:

Traditional views of the organisation and approaches to management have seen a clear distinction between the tasks of managers and those of the grass roots level employee. Advocates of this view such F W Taylor (1911) and others within the scientific management school of thought sought to increase productivity and thus performance by deskilling the workforce and breaking tasks down into the most minuet component jobs so as to take advantage of specialisation of labour. The policies implemented by such advocates may be seen as the exact opposite of those who support the theory of employee participation as the scientific school of management sought to centralise power and control into the hands of managers rather than devolve it to the workforce. From a performance perspective the introduction of scientific management techniques saw significant dividends yielded to those who employed them for instance production at the Bethlehem steelworks was maintained with a reduction of labour from 500 to 140 (ACCEL 2009) meaning that performance per employee had increased significantly. However these early developments in management theory previous to the conception of employee participation should not be used to discredit the theory due to a number of special considerations. In the first instance such theories were applied to manufacturing operations and heavy industry and whilst these operations still form a large part of the economy today there has since been a large shift towards service industries requiring differing management styles and techniques. In addition at least part of the success of the scientific management may be associated with the technological developments of the day such as the introduction of the production line as highlighted by Ford’s success at the River Rouge plant in Detroit.

At the other end of the scale the “self-directed work team” as defined by (Williams 1995) may be seen as the ultimate exercise in employee participation and has been implemented by companies such as 3M. Under this system teams are essentially left to fulfil the role of both the managers and employees of an operation with a significant input in production techniques, scheduling and improvement initiatives. Advocates of this approach to employee engagement highlight that were the theory has been put into practise productivity has increased between 30 and 50% (IIE 1996). However on the other side of the spectrum such a high level of employee engagement may have negative consequences including lack of strategic focus as individual teams become ever more productive in their own areas of expertise but forget to consider how their individual team fits into the wider context. The lack of direct leadership can also be seen as providing an opportunity for accountability to be lost and thus falling performance, Bruce (2005) indicates that it is often the accountability of a leader which drives the particular individual to spur on a team or group to the successful completion of a task. Finally as indicated by Robbins (2003) teams have a tendency to “self-reinforce” behaviour, were the general attitude of a self-directing work team is generally positive this will increase the performance of both individuals and the organisation as a whole. On the other hand were the initial attitude and performance of the team is poor in the first instance and with no intervention from outside this can lead to a downward spiral of performance both for the individual and the team as a whole.

However not all approaches to employee participation may be seen as quite so radical in their nature. A more frequent approach may be seen as involving employees to a greater degree without taking such a radical devolvement of control as in the self-directing work team approach. For instance Toyota may be seen as one of the leading companies in developing employee participation, Toyota’s commitment to employee participation goes so far as to be formally a part of the company’s code of conduct (Toyota 2006). Strategies which may be seen as falling under the umbrella of employee engagement pursued by such companies include Kaizen the practise of including employees in quality improvement initiatives such as quality circles and other forms of consultation directly related to their area of work (Shimizu 2009).

Potential benefits:

One must now go on to identify the general potential benefits of employee participation both to the employee and the organisation. One of the key arguments for employee participation is that a every organisation contains a significant amount of knowledge, information and know how that is often present in grass roots level employees as much as in those occupying management positions (Adair 1989 p32-34). By encouraging employees to participate in the decision making process advocates argue that the organisation performs better as it is now making decisions based upon a much wider range of knowledge that would have been unavailable if decisions were solely made at the management level. As such the process of involving employees in the decision making process may be seen as to a large extent associated with the function of communications. Good communications are by definition a two way process (McLaren 2000 p3) which encompasses not only the sending and receiving of messages down a hierarchy but also the sending and receiving of messages back up the hierarchy and in horizontal communications. Despite the benefits of such employee participation which may be attributed to the need for an effective communication channel commentators such as Leigh (2009 p15-29) indicate that organisations are often relatively poor at the embracing the two way nature of communications leading to poor listening skills at an organisational level and thus a missed opportunity for improved performance.

Another potential area for increased performance at the organisational level is that of reduced costs owing to lower labour turnover. As to the question of whether or not employee participation helps to reduce labour turnover is a debating point and depends which school of management thought is applied. On the one hand the classical schools of management theory such as those of F W Taylor would suggest that employee participation is not the most important factor in labour turnover since the most important factor in maintaining staff loyalty was how much money they earned. On the other hand others such as Maslow argued that people do not go to work simply to earn money as in the Taylorite model but that there are several other reasons which are can be seen in the pyramid of needs:

Under Maslow’s theory employees are not simply motivated by the need to earn money which represents only the first and possibly second stages of the pyramid. Maslow also highlights the fact that people after securing the basic needs which are provided for in the form of a salary then have additional aspirations. Using Maslow’s pyramid as a basis for evaluating employee motivation levels one could argue that the specific practises of employee participation constitute various stages of the pyramid beyond that of the first two stages which is considered under the classical view of management. For instance one way in which an organisation may choose to implement employee participation is in the form of focus groups with reference to a specific issue such as production line down time. In this case previous to the focus group one may view the average assembly line worker as having the first two needs met owing to receiving a regular monthly salary. However once a focus group has been set up to consider a specific issue such as that mentioned it is conceivable that the next two steps of the pyramid are fulfilled as the line worker now becomes part of a team fulfilling the third need and also is given some status as the organisation by the very act of asking for their opinion is giving them a status within the organisation as someone with technical knowledge and thus a valid opinion. In theory one could argue that as an increasing number of the employees needs are met this will lead to increased motivation and morale and thus reduce the possibility of the individual wanting to leave the organisation.

Costs associated with labour turn over can represent a considerable expense for organisations under two headings. In the first instance there is the financial cost to an organisation which includes costs associated with re-recruitment as well as any lost revenue associated directly with the loss of an employee. Secondly there is the cost to the business in disruption and lost knowledge. Research suggests that the average cost of replacing an employee is around ?3,546 which rises to around ?5,206 for more highly skilled employees (Thornton 2000). From a scale perspective the CBI (1997) estimates that in the UK labour turnover stands at 16% which rises to 25% in part time workers leaving significant room for improvement and thus a significant opportunity for cost savings especially in the part time sector. As such one can see that by reducing staff turnover by even a small amount this can deliver significantly higher financial performance for an organisation.

Method:

Finally having considered the potential benefits and drawbacks of employee participation one must consider the methods used in order to undertake employee participation. In many instances the benefits an organisation can gain from employee participation come from extracting knowledge from the workforce which already exists. As such many of the methods which need to be considered are issues in communications since the knowledge and information already exists but is often not being extracted and used by those higher up the corporate structure. One key method highlighted by Adiar (1989 p32-34) is that of consultation, consultation may be interpreted as any genuine attempt to gain the knowledge, feelings and opinions of the workforce which may then be used in the decision making process. As such the methods used may be broad in range from quality circles and focus groups through to town hall style meetings or suggest box schemes. However to qualify as true consultation each of these acts must take place before decisions are made. It is often felt by many that consultation takes place after decisions have already been made by those in senior management positions. In these cases performance may actually decrease as the workforce perceives a lack of commitment from the management within the organisation, were consultation is undertake after decisions have already truly been made this may also be seen as a misallocation of resources by the company.

Another consideration of employee participation is that of employee reward. There are many options for encouraging employees to take a greater level of responsibility for their actions and thus increasing their overall level of participation. Such considerations may include share schemes, bonuses or additional annual leave related to certain performance levels. Regardless of the method employed the mechanism may be seen as a function of agency theory in which the interest of the employee and organisation can be harmonised thus increasing performance. By linking the employees personal performance to the ability for the employee as an individual to benefit the belief is that performance will increase as the employee peruses a personal opportunity.

Conclusion:

One conclusion would be that increased employee participation has the potential to create significant increases in performance for both the individual and the organisation as a whole. From the organisational perspective there may be significant increases in financial performance as the high costs of labour turnover are reduced as part of the increase in participation. Secondly the organisation is likely to experience a significant increase in performance with regard to its competitive advantage as the organisation will now be using its labour in potentially a more efficient way in the form of a strategic resource as opposed to a simple cash for labour transaction. From the individual perspective increased participation can lead to increases in performance as firstly an improved attitude to work increases output and secondly the benefits of the individual being able to organise their work in the way they see best contributes to work being organised in a more efficient way.

However whist it is acknowledged that increased employee participation can contribute significantly to increased performance it is by no means either a panacea for all organisational ills nor is it a necessity for improving performance in all instances. One should remember that whist some companies such as Toyota have adopted a positive attitude towards employee participation there are still many successful companies which maintain a tradition approach towards the division of management and employee tasks. Furthermore companies operating such traditional approaches to the management of their employees are not limited the manufacturing sector with call centres being a prime example of were the service sector has failed to embrace increased employee participation choosing alternative methods to improve performance.

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‘A key aspect of the management task is to secure employee commitment to the organisation. Critically comment on some of the various forms of commitment and outline the problems involved in gaining employee commitment to an organisation’.
Introduction

Employee commitment is a crucial ‘work attitude’ (Morris et al, 1993:22). It has been defined in several similar ways to emphasise its behavioural and psychological moorings. For instance: “… a stabilizing force that acts to maintain behavioural direction when expectancy/equity conditions are not met and do not function” (Locke, 1976: 1298) and; “… a psychological state that binds the individual to the organization” (Allen & Meyer, 1990:4).

The level of commitment relates to several aspects such as satisfaction, turnover, cognitive resonance between different hierarchical levels, and performance on the job (Kreisman, 2002). The complexity in and importance of understanding employee commitment thus makes it a key feature of managerial task. This essay examines the body of knowledge from past research to reflect on such commitment and issues in harnessing it.

Forms of Employee Commitment

There has been extensive work in the area of dimensionality or typology of employee commitment (e.g. Vandenberg and Scapello, 1994; Williams and Hazer, 1986; Johnson and Yang 2010). This is drawn from, and has also in turn informed the understanding difficulties in gaining managerial commitment. Employees maybe committed for different reasons and thus different forms of commitment need to be contextualised. There is considerable overlap in the ‘architecture of forms’ posited by different writers as they have come to grips with this concept that is crucial for organisational performance (e.g. Bennett, 2000; Meyer et al., 2004).

The three dimensional framework presented by Meyer and Allen (1997) and taken further the workplace model of Meyer and Herscovitch (2001), are central to most conceptualisations presented in extant research.

The three dimensional framework posited the following as dimensions based on employee mind-sets:

1. Affective commitment: Is understood as the employee’s constructive emotional bonding to the organisation. Such an employee strongly associates himself/ herself with organisational goals and seeks to stay with the organisation because he/she wishes to do so.
2. Continuance commitment: Here the emotional quotient is largely moot and the employee perceives it to be very costly to lose organisational membership. This could be for a host of reasons – right from financial costs of salary and benefits to social costs of ties and reputation. Such an employee stays with the organisation because he or she is tied in.
3. Normative commitment: There is an obligatory notion at play here. The employee feels to return the value commitments made in him/ her by the organisation. The loyalty aspect is strong- either due to individualised value perceptions that direct behaviour or due to social norms that apply to the context and relate with the environment the organisation belongs to.

The fundamental basis of distinguishing between these is that they have very contrasting impacts on/ implications for behaviour (Meyer et al, 2004). This behaviour in turn has very important implications for the work environment and subsequent performance. Extant research indicates that affective commitment is strongly associated with not only job performance, but also with organisational citizenship, and often is a precursor to normative commitment. Continuance commitment is negatively associated with these aspects and usually needs to be moderated in favour of the other two forms of commitment (Johnson and Yang, 2010; Morris et al, 1993). This assertion also suggests that while all three forms of commitment are useful to operationalise they need to be scoped and balanced carefully.

Employee commitment: The Pillars of Conceptualisation

Another significant development in understanding employee commitment has been the approach to directing commitment towards specific targets or “foci”, that relate to employee behaviour at workplace (Johnson and Yang, 2010:230; Meyer et al, 2004:998). The theorisation in the area of employee commitment thus stands on two pillars- that of form and of focus. There is an arguably third pillar that is about the “bases of commitment” (Allen and Meyer, 1990: 3). These bases refer to factors that lead to development of the aforementioned forms of commitment. For instance, affective commitment can seem to be developed based on alignment of individual values with organisational values, and extent of personal involvement. On the other hand, normative commitment can be seen to be a function of social processes and cultural orientation that orients individuals towards reciprocation (Bennett, 2000). Continuous commitment which is a contrast to these two more constructive forms of commitment is a function of stakes that an employee builds in, or employee investment in a course of action (Meyer et al, 2004).

The essence of conceptualisation around employee motivation is thus about variables of ‘form’, ‘foci’ and of ‘bases’. Recent work has tried to integrate commitment and motivation theories. This is to posit that there is a recursive and mutually enabling relationship between the two (Johnson and Yang, 2010). The contribution of this research has been to embed commitment as a subset of motivation and explain how “employees’ relationships with social foci influence behaviour relevant to the foci” (Meyer et al, 2004: 1003). Such integration provides for levers to augment commitment by providing variables such as goal choice, self-efficacy and goal directedness. It is particularly useful in developing the directional paradigm that is associated with commitment towards tasks or ‘foci’ (Johnson and Yang, 2010; Lawson and Price, 2003).

Good Practice Prescriptions for Managers

Such recent research has also followed up on Meyer et al, (2004) call for examining the motivation and commitment nexus to operationalise and deliver practice relevant levers for employee commitment. Johnson and Yang (2010) provide a perspective in this light by explicitly pinning down different motivations that influence the different forms of commitment. Their empirical analysis provides a model that can predict behavioural response to initiatives directed towards augmenting, reinforcing or balancing the different forms of motivations.

Based on work that seeks to identify levers behind employee commitment the following practice relevant aspects can be identified for improving commitment (e.g. Vandenberghe et al, 2007).

• Clarity in communication about how organisational goals align with individual goals. This calls for the right-kind of “capacitated middle managers (Shibata et al, 1991).
• Building a legacy, and working on developing value based practices that see the organisation as a function of its members.
• Developing a trusting environment where communication is seen, heard and decisions are perceived as being fair.
• Building a community structure around work processes and across disciplinary areas- where people share and relate to their team and the broader organisational context.
• Enrich employee development on the job and through the job. This is by a reward and challenge environment -where developmental needs are encouraged to arise from the employees themselves

Barriers to/Problems in achieving Employee Commitment

The barriers or difficulties in eliciting employee commitment stem from several sources. The most cited one is that of organisational focus on achieving short term performance goals at the expense of long term employee development, and low investment in building shared vision and community like schemas (Breukelen, 1996). This barrier is manifested more specifically in the role description and performance assessment criteria of middle managers that are both highly measurable and short term oriented. The leadership role that the middle manager needs to play in aligning individual goals with the organisational goals is often on a back burner (Shibata et al, 1991; Locke, 1976).

Another barrier that follows is the potentially low importance given to: internal signals about reputation; management’s demonstration of concern for employees’ vis-a-vis concern for performance and; willingness of top management to be inclusive of views and opinions of employees. Such signals directly affect employee perception of their position in the organisational scheme of things. In context of the forms of commitment discussed before this can be about: being an integral part of the organisation contributing to something they value; feeling gratitude for what the organisation has offered to them and/or being tied in only for the direct benefits they receive from what is they perceive as their best choice as an employer given the risks of disassociation (Lawson and price, 2003; Johnson and Yang, 2010).
It is clear that poorly managed signals can lead to lower levels of commitment or a sub-optimal balance between favourable and less favourable forms of commitment.

Still another difficulty relates to the right kind of employees and the right kind of mix of employees that is created overtime. Lack strategic thinking on recruitment policies to align with the requirements of the organisation – as a social milieu and as an economic entity may also create a mismatch between the organisation and its employees (Allen and Seinko, 1997).

The organisational appeal to the employees for contribution and performance is usually leveraged on explicit or implied tangible outcomes for the employee. This is a barrier in itself as it leads to sub-optimal performance outcomes. Psychological attachment led on the job performance by employees improves overall organisational performance. This is because the employee feels to have shared the outcome in a more socio-cognitive manner by having a feeling of belongingness (Bennett, 2000; William and Hazer, 1986). This right kind of commitment is also compromised by a legacy of rewards to tangible outcomes and target achievement vis-a-vis say good citizenship behaviour (Wright, 2001).

Barriers to or difficulties in employee commitment are also contextual, and have been of particular interest in extant research with reference to management of change (Strebel, 1996)*). In the case of the turnaround undertaken at Lufthansa in early 1990s research has identified the emphasis on communication and capacitated middle managerial roles as crucial to sustaining and garnering employee commitment during the turnaround. A similar emphasis on employee commitment was seen at Saatchi and Saatchi for regaining a focus on its creative businesses portfolio albeit with a drive on aspects to do with the right signalling mechanisms to create greater trust (Mintzberg et al., 1990) getting it had been seen at Saatchi and Saatchi but with an emphasis (Mintzberg et al, 2003)change.

The difficulties identified in light of the above instances, because of which the relevant drivers of commitment were focussed upon, fall under what are identified as generic barriers to employee commitment in times of change. These are ‘disruptions to relationship’; threat of statuses; the desire to retain status-quo’ and; ‘tangible benefits’ related adverse consequences (Bennett, 2000:127,128). Different forms of commitment are affected differently in times of change, and overall commitment and its impact on change itself is a function of existing levels and combination of the different forms. The nature of business and industry culture also influence such an impact. However, there is some consensus in research that the initial levels of commitment, if not overtly led by the form of ‘continuance commitment’, tend to contribute affirmatively to change (Zell, 2001:78; Caldwell, 1990).

Conclusions

It has been clearly established that the different forms of commitment demand a balancing act by managers so that a right mix is arrived at. While ‘continuance commitment’ is one form that is not seen in very positively light- it is also a lever to be engaged when an organisation wants quick and organisation-wide uptake and sanction for initiatives. That affective and normative commitment should lead the mix is irrefutable. However, initial dispositions of the employees, the legacy of organisational human resource strategy, and the social and culture milieu influence and pre-ordain a lot of what can be done to influence such a mix (Caldwell, 1990).

Garnering employee commitment is a process that requires time and conscious effort, and because it is not (usually) subjected to measurement, managerial roles and tasks oriented towards it suffer because of the “objectivity of performance parameters” that are set for managers (Allen and Meyer, 1990: 4). Advances in measurement of employee commitment, and in predictive models that provide a cause effect relationship to inform the highly socio-cognitive arena of employee commitment, have changed this scheme of things. A better interface with the field of motivation, task mandates (foci), and understanding of the bases behind forms has also matured in research. This has bridged the gap between theory and practice. Middle managers are becoming very central to employee commitment related initiatives. The ever important top management sanction for investment in time and resources towards employee commitment is also at an all-time high. This is particularly because of the present recessionary times where the pressures of change and adaptation have amplified the difficulties in and importance of harnessing and sustaining employee commitment.

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The purpose of the presentation is to present the key recommendations for developing an effective management and leadership programme.

Make a presentation including bibliography/references which will show your source of information gathered.

Details about the reliability of your information, why did you choose the source, and to what extent can you trust the source and why- e.g. a company report might be more upbeat about the situation of the company than an externally conducted analysis similarly. Similarly you might identify conflicting information from different newspapers on their political biases etc how did you get around this.

Leadership and management have been amongst the most studied and controversial topics of the study of business and management for the last century. The body of theory which has grown up around the subject reflects the change in thought on management theory and can be distilled into a framework which shows the evolution f the ideas of what makes a good leader and management, and by proxy of this one can define with reference to the theory the key skills which need to be developed in order to produce good leaders. Broadly there have been a number of movements in the thought on leadership and management, beginning with the ‘great man’ approach, defined in a number of studies on the history of leadership and management studies as the belief that leaders are exceptional people born to great innate abilities, this reflects the early school of militaristic styles of leadership, reflected in the organisation as a male dominated and hierarchical structures to business as a whole. This data is drawn from two key studies, one a study of the comparisons of more modern transformational leadership compared with previous styles, which allows one to assess the need for key innate personality traits, the other a modern study of an attempt to define a universal framework of leadership. Both of these studies argue that a key part of the management and leadership of an organisation, despite the move from the great man approach, is still rooted in the idea of an inspirational character with innate abilities. These abilities have also been studied with some detail and indeed the evolutionary process in management thought moved from this point to study the traits that made an effective leader and manager. The table shown below comes from an extensive study on the skills and traits of leaders, and is still used in theory to define those skills advantageous to leaders and managers.

Leadership Skills and Traits (Stogdill, 1974)

Therefore it can be argued with reference to the literature that the first steps in designing an effective leadership and management programme is to identify by aptitude and ability the kind of people who are going to make good leaders. In the past it was thought that leadership was something that one was born to, but as will be seen the relationship to leadership of the personality is not as clear cut and much depends on the type of leadership one wishes to develop, and indeed the organisational factors.
The movement away from the individual qualities of leadership began with the behavioral school, according to much of the literature the move is seen as a departure from the militaristic style of the study of management and leadership. Theories of the subject include the now standard McGregor’s X and Y beliefs, shown below;

Theory X and Y Managers (McGregor, 1960)

And Blake and Mouton’s Managerial Grid, as depicted below;

The Blake Mouton Managerial Grid (Blake & Mouton, 1964)

This move away from seeing the organization as more than a hierarchy with leaders at the top of the pile and workers as subservient to them is a dramatic change in management theory and suggests that in designing any effective leadership or management structure and training the type and classification of the organization and the people involved become central to the success. Clearly this is demonstrated by a body of literature on the subject of behavioral management, and it is easy to see why the move become more popular than traditional management as it follows a move in the philosophy of management as a whole. The behavioral School I still important, but the consensus has been that it cannot explain everything in the leadership and management paradigm. Modern thought has centered on a contingency paradigm, which begins from the point that there is no one way to manage or lead, and the correct style is contingent on the nature of the organization, the external needs of the business and society and the internal needs of the workers and management. A number of models have been produced, from ones dealing with social enterprise and the public sector, of which this example from the National College for School Leadership is an example of the types of leadership they have identified;

“•

Emergent leadership

, when a teacher is beginning to take on management and leadership responsibilities and perhaps forms an aspiration to become a headteacher
•

Established leadership

, comprising assistant and deputy heads who are experienced leaders but who do not intend to pursue headship
•

Entry to headship

, including a teacher’s preparation for and induction into the senior post in a school
•

Advanced leadership

, the stage at which school leaders mature in their role, look to widen their experience, to refresh themselves and to update their skills
•

Consultant leadership

, when an able and experienced leader is ready to put something back into the profession by taking on training, mentoring, inspection or other responsibilities.”

To frameworks developed for the professions especially in terms of ethical leadership and responsibilities, as this one from the Institute of Chartered Accountants in England and Wales;

Through to the guidance and descriptions issued by the IMPM for its advanced leadership and management course;

“The International Masters Program in Practicing Management is designed to be the “Next Generation” Masters Program, combining management development with management education. It is a degree program that focuses directly on the development of managers in their own contexts – their jobs and their organizations. The IMPM is therefore deeper than conventional programs of management development and more applied than traditional degree programs. It was launched in March of 1996 to acclaim from participants and their companies alike, as well as from the international business press.

“The IMPM seeks to break the mould of the functional “silos” so common in management education – marketing, finance, organization behaviour, and so on. Instead, the Program is structured around managerial “mindsets”, one for each module. It opens in Lancaster with managing in general and the

reflective

mindset in particular. Then it moves to McGill, where attention turns to Managing Organizations and the

analytic

mindset. Bangalore follows with Managing Context, the

worldly

mindset. In Japan, it takes up Managing Relationships, the

collaborative

mindset. The Program closes at INSEAD with Managing Change, the

action

mindset.
More detail is given about each of these mindsets by Mintzberg and Gosling (2003):

• The

reflective

mindset refers to “managing self” – developing the ability to reflect and make meaning – a form of emotional intelligence.

• The

analytic

mindset refers to “managing organisations” – developing the ability to analyse and synthesise not only the hard data, but also the soft – “to appreciate scores and crowds while never losing sight of the ball”.

• The

worldly

mindset refers to “managing contexts” – to appreciate cultural and local differences and similarities and respond accordingly.

• The

collaborative

mindset refers to “managing relationships” – developing partnerships and networks; working with people – managing “relationships” not “people”.

• The

action

mindset refers to “managing movement” [or “change and continuity”, or “mobilization”] – managing change without losing track of continuity.

It is argued that the good manager/leader must master and integrate each of these mindsets and so offers a more cognitive and reflective approach to management development than more traditional behaviour and skills-based programmes.”
In conclusion the recommendation of this presentation is to consider three areas of design. Firstly to consider the criteria for considering an applicant’s needs and suitability, reflecting the traits, in relation to the needs and requirements of the organization, reflecting the contingency of the organization and society. Secondly to look closely at the needs of the organization, especially at the needs of subordinates and the overall strategic direction of the organization, which reflects both behavioral and the specific needs of the organization in relation with the external environment. Lastly To examine the type of leadership needed, with specific reference to the examples from the public, private and professional examples given above, which show that the ideal leadership and management style is very specific to the sector in which the organization is based.

References

Blake, R.R. and J.S. Mouton (1964) The managerial grid. Houston TX: Gulf.
Gronn, P. (1995) Greatness Re-visited: The current obsession with transformational leadership. Leading and Managing 1(1), 14-27.
Gosling, J. and Mintzberg, H. (2003) Mindsets for Managers. Working paper, Centre for Leadership Studies.
Hamlin. R. (2002) Towards a Universalistic Model of Leadership: a comparative study of British and American empirically derived criteria of managerial and leadership effectiveness. Working paper WP005/02, University of Wolverhampton.
McGregor, D. (1960) The Human Side of Enterprise. New York: McGraw Hill.
Stogdill, R. (1974) Handbook of Leadership (1st Ed.). New York: Free Press.

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Critically discuss Corporate Social Responsibility (CSR). What are the implications for a firm that does not conduct CSR?

Date authored: 08 ^th August, 2014.

This essay will commence with showing that a definition of Corporate Social Responsibility (CSR) is required and will then provide a definition and an indication of the scope. CSR will then be broken down into groupings and each looked at from a company perspective to show the advantages of CSR and disadvantages when not using CSR. Companies have a choice; and the implications of not conducting CSR will also be considered.

There is very little legislature on the subject of CSR. The nearest available is environmental standards in the UK and Internationally by the International Organisation for Standardization (ISO). (ISO 14000, 2006). The newer Social Responsibility standards (ISO 26000, 2010) are only guidelines, with no fixed rules or framework for an organisation to certify to the standards. It is no surprise, therefore, that many companies define CSR in their own way, and thus can set their own objectives which they can easily attain. When it is born in mind that CSR can have such a wide range of practices that support it, it is easy for a company to pick and choose what it does.

So, for a discussion of CSR, a single consistent definition is required. The definition that will be used here is from the European Commission’s 2011-14 corporate social responsibility (CSR) strategy, which defines CSR as “a concept whereby companies integrate social and environmental concerns in their business operations and in their interactions with stakeholders on a voluntary basis” (UK Government, 2014: 3).

According to the Business Minister, Jenny Willott, MP “Corporate responsibility is at the heart of successful businesses.” (Willott, 2014). That means that it refers to a set of actions performed by a company, over and above its normal business, that contributes towards sustainable development.

Corporate Social Responsibility can include a wide range of factors, from ethical and fair trade to reputation and brand management. The UK Health and Safety Executive (HSE, 2014) identifies additional issues as part of CSR, including animal welfare, diversity and equal opportunities, community investment, giving aid to local organisations and communities in developing countries and helping to build the skills of the local people through community based development.

CSR can affect goodwill, employment practices, expansion, stakeholders, company standards, company strategy and much more. One survey on the main reasons that companies engage in CSR puts top management interest as the number one reason, with company reputation, profit, customers’ expectation and attracting employees following close behind (Habisch, et al., 2005).

It is usual to identify these factors in a good light (as a bonus to the companies) and it is common to see CSR statements in companies’ annual reports and glossy handouts. However this can draw attention to a company’s practices and can be disastrous when non socially-responsible practices are exposed in the media. For example Nike when they were accused of using child labour in the production of its soccer balls in Pakistan. (Urip, 2011). Note that Nike went through a huge transformation as a result and are now considered an industry leader in the area of CSR (Ferrell, Fraedrich & Ferrell, 2013).

So CSR has a very wide remit. Buy why should companies take on CSR? To analyse this, it is necessary to group all the parts of CSR so that each one does not have to discussed individually. For the grouping, we use Schwartz (2011), who breaks down CSR into three distinct parts; these being legal, economic, and ethical. Each of these will be addressed in turn.

Addressing those parts of CSR which are covered by UK law, there is limited legislation in the UK on the subject of CSR. One reference is in section 172 of the companies Act, where it says:

“A director of a company must act in the way he considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to … the impact of the company’s operations on the community and the environment” (Companies Act, 2006).

Other countries have more strict legislation, for example in Denmark, there has been an obligation for larger businesses to consider and report on CSR since 2009 (Gorrissen Federspiel, 2014). In California, large manufacturers and retailers have to disclose what actions they are taking to address the risks of human trafficking and forced labour in their supply chains (Altschuller, 2011). It is clear that non-compliance with any legal requirements (whether CSR or otherwise) carries great risk and can cause the company to be prosecuted and potentially put out of business.

The economic issues would appear to make sense in that when following a CSR practice, the company can also save money, which translates to increased profit. One example is hotels that allow you to choose between reusing your towel and having it replaced depending on where you leave it after you have used it. This can save the hotel water and electricity to wash it, while still offering the guest the choice (McElhaney, 2008).

However where Pernecky and Luck (2013) suggest holding Virtual Meetings rather than physical meetings, thus saving travel, meals, hotels, etc. looks like it is a CSR policy that just saves money. However it is important to measure whether the virtual meetings attain the required objectives. Thus it is not always obvious which practices will lead to economic advantages, or which economic CSR approaches will meet the requirements of the business.

The ethical issues, such as a company taking a CSR approach without having to or clearly having economic benefits can also be used to gain positive publicity (Idowu & Filho, 2009), which can raise the image of the company, thus providing longer term benefits, such as increased goodwill. Idowu & Filho go on to say that this can be used for marketing to show that the company is ahead of its rivals due to its CSR approach.

One advantage of CSR is brand demarcation. Many companies look for something which will set them apart from the competition. For example the Excel centre, a large conference venue near Canary Wharf in London has achieved six awards relating to CSR, for example The Sunday Times “Best Green Companies” award (Excel, 2014). If a company is looking for a conference venue in London, and Excel is implementing CSR whereas another venue is not, this gives the client a reason to select Excel, and something extra the company can say on its marketing. So it is an advantage for Excel to support CSR which can lead to directly affecting the bottom line.

Local support and getting licences can be made easier for a company if it has a CSR policy. Such a company is seen locally as a good company and this can improve how the company is seen by locals and can help to provide support for the company’s plans where local support is an advantage (e.g. a new building, opening late into the night).

Having a CSR policy which is implemented and draws people’s attention to it can help to distract the public from other things that could have negative implications for a company. For example if a company have very high board members pay, this can lower the public’s view of the company. However if the company is seen to put the environment first, and it puts resources directly into supporting this, this can overshadow the board members pay (Grayson & Hodges, 2004).

A company that has a CSR policy throughout the company can improve the staff’s attachment to the company. They believe that their work partly helps the community and can do much to improve morale. Also they may be keener to participate in events such as fundraising which they may do in their own time and gain the company goodwill whilst costing the company nothing (ibid).

There is a trend moving towards CSR (Fiorina, 2003). With national and international standards on CSR related issues becoming more common, and laws likely to follow, there is a large bonus in getting CSR well embedded in a company before a law demands it. When laws are passed, this puts a fixed timescale on the changes to CSR. This can cause CSR to be implemented at an inopportune time, and a time when other companies are doing the same, and potentially costing many times more.

However the situation is not all good. There are considered to be disadvantages of CSR and these must be understood and addressed before a company implements CSR. There are those who say that the sole purpose of a business is to make money (e.g. Friedman, 1970). Anything that detracts from that is considered to be a distraction from the business’s core function. This can make share-holders get fewer dividends because the company is involved in a scheme which costs money and resources to implement but does not directly add to the bottom line. This point can be countered by a company implementing CSR policies in order to reduce excessive inputs and wastes in their supply chain, which saves them money (Idowu & Louche, 2011).

To take a more recent example, the Commission for Green Tax Reform in Portugal put forward a proposal on 9^th July 2014 for a package of environmental taxes. These would include additional taxes on fuel, air travel and the use of plastic bags (Lomas, 2014). In fact, Fleming & Jones (2012) claim that CSR is fatally compromised and, when applied to large multinational corporations, does more harm than good. The claim says that many companies are not taking CSR seriously and only implement a few measures that help them make money and stop there rather than implementing a comprehensive CSR approach.

One question is whether a company’s CSR policy should also apply to all of its suppliers down the line. One example of this was in 2012 when Tazreen Fashions factory, a clothing making factory in Bangladesh caught fire and caused the death of 112 workers. The working conditions were appalling. This reflected badly on their customers, such as Wal-Mart and Sears, who sold products made in this factory. In the investigation, it was revealed that neither Wal-Mart nor Sears even knew that the products they sold were being made in this factory (Crane and Matten, 2012).

However in general, CSR is becoming more and more important. If we just take environmental issues as an example, Bowdin, et al. (2006) shows that considerations of environmental issues are increasingly paramount.

Without a set of standards there are no requirements from the government or standards organisations on implementation. Although there are demands from customers for CSR values (ibid), and as has been shown, the benefits are considerable, it falls to the companies themselves to implement CSR. And within the companies, it falls to the management of the company to set a CSR policy and use it to guide them throughout their company.

If management plan and implement a CSR policy, it can be rewarded. For example some companies have CSR targets and executives who deliver or exceed these targets are rewarded (Horrigan, 2010). Alternatively, CSR can be built into the plan right from the start. An example of this is the Olympics, where a philosophy is so much built into the Olympic Games that it is built into their charter. (International Olympic Committee, 2014).

As has been shown after mistakes such as at Nike, it can be critical to implement CSR policy throughout the organisation. Failure to do this can cause problems that can greatly affect the company’s goodwill and thus its sales.

All showing that a CSR philosophy can be vital for organisations and actually implementing the philosophy can lead to rewards whereas failure can lead to disaster.

These days, all major companies have a CSR statement (Musafer, 2014). And their CSR statement is being looked at to see if it is really authentic or just superficial. Musafer (ibid) also claims that if a company is not implementing CSR in a genuine way, it can be very damaging to that company.

To summarise, although CSR is not a panacea for any company, there are many CSR options that can be taken by companies which would benefit their company. In addition a failure to implement CSR approaches can be costly. However each company procedure should be considered as to whether it best suits the company to take a CSR approach depending on the costs and benefits (or risks).

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At the heart of any organisation lies its culture in which are found the philosophies on how to work together and individually, how to treat customers, and how to generate revenue or keep the business operating successfully. Leaders and even middle managers are concerned with meeting some key goals tied to customers, products, and revenue, but they sometimes do not pay attention to the culture. The overriding beliefs and behaviours in the organisation that truly determine the ability to hit those key goals or not (Ford 2008: 1). It is the culture that determines how things get done, whether it is in a good or bad way, and it provides the mechanism for changing strategies and responding to competition or causing the demise of a merger or creating silos of isolation and conflict (Ford 2008: 2).

Therefore, effectively managing culture in a way that addresses problems and helps everyone in the organisation embrace this culture will provide a strong foundation for accomplishing all the organisation’s strategic objectives. This paper will critically evaluate both the assumptions and methods put forward by various writers, including Edgar Schein, to effectively manage organisational culture as an integral component of management practices and strategic success.

Understanding Organisational Culture

As part of social science, the study of culture has been around for many decades as a means of better understanding how it plays a role in the “functioning of society” (Denison and Mishra 1995: 204). In recent years, business theorists began to look at the organisation of companies in the same manner, understanding that the same socialisation process could be applied to a business that previously might have just been seen as an intangible thing rather than a living organism that was made up of individual and collective behaviours.

One book described culture as the result of “group learning experiences in which a number of people face a problem and work out a solution together” (Miner 2007: 321). This could mean that one organisation develops a culture that can provide them with a competitive advantage whilst another may focus on ethical or environmental standards and still another may look to create a culture that is geared toward customers or technological innovation (Sims 2002: 301). Whatever the case, the culture is directed toward a particular belief about one of those areas that serves to direct all the organisation’s approach to strategy as well as its interaction with the external and internal environments.

That would certainly describe what is happening with business today as products and services are framed around finding solutions whilst internal processes are devised to solve internal problems. Other issues on an internal scale are also being linked to culture, especially when it comes to large firms caught up in scandals riddled with a lack of ethics like Enron and many of the recent lending practices in the U.S. and the U.K. that led to the credit crunch, in which the blame was placed firmly on the shoulders of the leaders and the culture that they had developed that might have promoted greed and a lack of ethical behaviours (Pfister 2009: 2).

Now that this understanding is becoming more readily accepted within organisational studies, theories on business culture and how it is being managed have begun to be formulated with a diverse array of ideas about how it plays out within management practice and organisational development (Martin 1992: 4. One of the earliest proponents of an organisational culture theory was Edgar Schein who believed that organisational culture was comprised of “assumptions, values, and artefacts” (Hatch 1993: 657). His perspective was based on a functional perspective in which these three components, which help to explain specific standards, beliefs, and ideals, form the basis of how to react to and cope with other factors that would help existing workers and new members to perceive and think about these factors in the same way to achieve a “normal” way in which to address existing problems or issues (Schein 1988: 12).

In this way, Schein’s theory illustrated that culture was a multi-layered intangible within a company that was first based on visible organizational structures and processes known as artefacts that were then connected to the organisation’s values (the strategies, philosophies, and goals) as well as to the basic underlying assumptions in an organisation, which is comprised of those beliefs that are “a given” or that are “taken for granted” (Schein 1992: 2). Similarly, Rousseau saw culture as a multi-layered, ring-like framework in which there are both visible and invisible signs and feelings of an organisation’s culture both of which must be addressed (1990: 158), illustrating that it is both tangible and intangible aspect of daily operations.

Since then, a number of theories have evolved from this early definition to envision organisational culture as a combination of these components as well as symbols and processes, which provide fluidity and flexibility for cultures to shift and change based on both dynamic internal and external factors (Hatch 1993: 657). There are three key theoretical views of culture in organisations that help to explain how culture works and what it achieves. First, the integrative theory sees culture as a means of achieving some sort of a consensus across the organisation in which there is general agreement and united effort toward a common goal and purpose (Martin 2002: 94).

The differentiation theory maintains that there may be subcultures or groups within an organisation that share a common belief but that may diverge from an overall consensus (Martin 2002: 94). Then, there is the fragmentation theory, which maintains that there may always be ambiguity and conflict within any type of culture but that it is necessary in order to adapt, be flexible, and be open to change (Martin 2002: 94). These last two theories contend that these types of organisational cultures are often found in large organisations, particularly those that are global in nature (Bush 2003: 160).

There are also typologies of organisational cultures that have been developed within theoretical frameworks as a way to categorise certain approaches to developing a culture. For instance, Quinn & McGrath (1985: 318) created four types of organisational structures–Hierarchy, Market, Adhocracy, and Clan) that correlated with four cultural types–Hierarchical, Rational, Ideological, and Consensual. These have then been used as benchmarks for organisations that are looking to adapt their cultures or bring structure to what has become a fragmented culture in order to take advantage of the of cultural types and accompanying behaviours and ideals in hopes of improving their performance.

Theories on Managing Organisational Culture

Since many theorists contend that organisational culture very much impacts an organisation’s ability to attract and retain talent, achieve specific performance levels that achieve profitability, and grow and expand operations (Denison and Mishra 1995: 204), it is clear that culture must be crafted, shaped, and managed in an effective way in order for it to help those within the organisation realise certain strategic objectives.

This is especially important in a business environment that is becoming more turbulent and unstable as well as one that requires specific cultural change when the external environment and demands shift as well as dynamic internal changes occur, especially when dealing with mergers of two organisations with different cultures (Ashkanasy et al. 2000: 261).

For example, one study found a direct correlation between company performance, using annual growth rates in sales, equity ratio, and the rate of return on its total assets, when study 88 Japanese organisations of various sizes (Kono 1990: 11). The highest performance rates were in those companies that had a vitalised, follow the leader culture and a vitalised culture versus those cultures that were stagnant, follow the leader and stagnant, and bureaucratic (Kono 1990: 12). Often, the cultures that were stagnant and bureaucratic were found in the larger organisations as well as those that had older employees versus those organisations that were newer, younger, and more flexible in their cultures (Kono 1990: 17).

Hence, a number of traits have to be in place and carefully managed to formulate an organisational culture that will become embedded in the organisation and become part of the daily behaviours of all that work there. One theory of organisational culture suggests that there are four key traits that management must nurture, namely consistency, adaptability, involvement, and mission (Denison and Mishra 1995: 204). These traits also involve other effective behaviours that have been identified for helping an organisational culture focus on the right aspects of business, and these include “flexibility, openness, and responsiveness” as “strong predictors of growth” (Denison and Mishra 1995: 204). Additionally, other behaviours that are essential with a business culture include profitability predictors, such as “integration, direction, and vision” (Denison and Mishra 1995: 204). Even more current literature suggests the need for an organisational culture to focus on these three behaviours as a formula for success.

Schein referred to the development and management of these traits as cultural embedding, which is primarily the responsibility of an organisation’s leader and management team based on what they determine are the most important values, traits, and goals to have for the organisation to achieve what it intends to do (Miner 2007: 321). It is the set of ideologies that an organisation’s leader has, according to existing theories on the subject, which will direct how the culture is developed and what ideals and values are encouraged (Ashkanasy et al. 2000: 262).

In order to maintain the cultural embedding and ensure the right culture is developed at both the overall level and among the developing subculture framework, it is then up to the leader and management to ensure some types of control mechanisms are in place over the tangible and intangible aspects of the organisation, including the “(1) organizational structure and design, (2) organizational procedures and systems, (3) the design of buildings and physical space, (4) stories and myths regarding important people and events, and (5) formal statements of organizational philosophies and missions” (Miner 2007: 321).

A similar school contends that the notion of organisational culture is based on the premise that people within an organisation act out their roles and responsibilities in response to how they define the concept of work and how their organisation rewards or punishes that definition of work, which then determines how they respond to those cultural beliefs (Chan 2000: 83; Alvesson 1993: 118). As such, managers would need to shape their organisational culture in such a way to help influence their workers’ definition of the concept of work so that they can maximise their talent and increase productivity in order to achieve their objectives. Again, this returns to the notion of cultural embedding where the management and leadership must imbue this culture into each individual within their organisation to influence beliefs and behaviours (Chan 2000: 83).

Because many of the concepts involved in culture tend to be intangible and somewhat hidden, including beliefs and values that may be hard to discern or articulate, the available management theories contend that it is up the leadership to take up the cause and communicate what the values and beliefs mean on a regular and consistent basis as part of the embedding process (Bush 2003: 160; Smircich 1985: 58). Additionally, the theories contend that leadership must also take up the cause of culture by creating and encouraging specific rituals and ceremonies, such as reward programmes, employee meetings, and other tactics that are designed to reinforce the values and beliefs of the organisations (Bush 2003: 161).

Effective intervention by leadership in an organisation can help adjust the culture to where it should be in order to meet strategic objectives. Theorists believe that leadership can enact this type of cultural shift through consensus building with the organisational members, focusing on trust and relationship-building both internally and externally, directing high levels of communication and feedback throughout the organisation, providing the necessary training and knowledge transfer, and, most importantly, leading by example (Deal and Kennedy 1982: 189). These tactics by management are particularly essential for larger organisations that may have subcultures, including those with multiple locations, which may need to change or adapt to an overall organisational shift in strategy or beliefs, such as a movement to an environmentally sensitive culture or a culture that is more customer-focused.

Conclusions

It is important to remember that, more often than not, theory is one thing and practice is something that is usually entirely different because it involves the dynamics of the real world as well as a wide range of human personalities, behaviours, and leadership styles that make organisational culture into its own specific process within a wide array of organisations. However, these theories provide a foundation for organisations to learn how to adapt their behaviours and beliefs to better achieve their performance goals and strategic objectives.

It is the leadership that sets the tone and shapes the cultural structure just like the leader of a country convinces the majority of its citizens to uphold certain beliefs and values. So, too, will those managing the masses within an organisation as they are responsible for guiding how work is perceived—and this can be in a positive or negative way—which then determines how those within the culture will enact it with each other, customers, and other stakeholders. Leading the way must be the head of the organisation along with the entire management team who can articulate and reward the behaviours and beliefs that they see as their ideal organisational culture, helping those within the organisation better understand the types of tangible and intangible components are essential for success.

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