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Leaders of contemporary firms can greatly improve workers’ experiences and working environments by sensibly inculcating leadership theories in the daily running of their organizations (McKee, Kemp & Spence, 2013). I work in a small Information Technology (IT) firm that deals with software development and hardware maintenance. It is owned by two individuals / partners: one is a trained IT expert while the other has no background in IT. I work in the software development department. The two partners share management responsibility. The IT expert oversees technical work while the other one is the administrator and overall manager / leader. The manager predominantly employs the Leader-Member Exchange (LMX) theory, but owing to his lopsided approach, has only succeeded in dividing workers and forcing those in the out-group to quit.
Application of Leadership Theory
The main leadership theory that is manifested in my workplace is LMX. According to Gill (2011), this is a form of transactional leadership in which a leader and members function within unspoken exchange pacts. In-groups and out-groups are the outstanding characteristics of this theory. An in-group is a collection of individuals with whom the leader creates a special bond. Often, in-group members become advisors and assistants to the leader and are privy to organizational secrets. In addition, leaders assign greater responsibility, access to resources and roles in decision making to this special category of employees. In return for the privileges, in-group members are more diligent and perform delegated administrative duties than their out-group counterparts.
The out-group, on the other hand, consists of employees or followers who are not regarded as close confidantes of the leader. They have little or no choice or influence on what happens in the organization. They carry out their daily duties as stipulated in their contracts and job descriptions without expecting any favors from the leader. Not much is expected from them in terms of loyalty, as long as they play their role as employees (Hayes, 2002).
Robbins, Judge, Millet and Boyle (2013) opine that for leaders who practice LXM, it is crucial to maintain the intricate balance between being unusually close to some employees and ensuring the latter deliver on their mandates. If the leader is not the owner of the organization, is it possible for members of the in-group to attempt to usurp his or her position. Moreover, discontent within the out-group may also result in conflict and disruption of organizational activities.
LMX in my Workplace
In my workplace, LMX begins to operate the moment a new employee joins the firm. The manager (who is not an IT expert) is usually the first to create informal links with such people. The roles taken by new staff in the firm are, therefore, two-fold: the responsibilities for which one is employed and the extra duties accruing from being loyal to the managers.
After a brief stay, new employees undergo largely informal negotiations after which they are assigned extra duties. In turn, they appear to be closer to the leader and are often consulted on different issues affecting the firm. Often, fallouts occur, especially when an inner circle employee becomes disloyal to the leader and is banished to the out-group.
Robins et al., (2013) opine that another manifestation of LMX is the tendency of a leader to select inner circle members based on shared characteristics. In my workplace, members of the in-group come from the same region and social class as the leader. Eventually, a close and regular relationship and behavior pattern is established between the two parties at the expense of the out-group.
Disparities in Success
Owing to this arrangement, our organizational has had varying degrees of success. Although the firm has grown since it was founded five years ago, many employees have resigned. The application of LMX is partly to blame for this. In-group members generally rise up the rank faster than out-group employees. They frequently accompany the leader to all meetings and are privy to most of the secrets of the organization. Sometimes they influence hiring and firing decisions. Out-groups members who have left the organization often cite frustration and aggression from some members of the in-group.
The effect of the leaders’ power and influence on followers
For my leader, using LMX has resulted in mixed reactions from workers, especially because out-group members feel neglected. Selecting confidants arbitrarily and gradually sidelining others epitomizes irresponsible use of power and influence. While an in-group can greatly aid production and service delivery, the out-group is still a crucial component of the organization’s framework. For employees who become members of an in-group, unswerving loyalty is crucial, but constructive criticism of the leader and his policies is a better way of expressing gratitude to the leader for the privilege. I recommend that my leader should employ transformational leadership in dealing with workers. This is because it will help him to create close links with all employees thus eliminating any sense of discrimination and exclusion (McKee et al., 2013). He should also build on expert power by enrolling in IT studies as this will earn him respect from his followers.
Evaluation of the role and effectiveness of transformational and transactional leadership in my organization
Robins, et al., (2013) opines that transactional leadership is based on the relationship between leaders and followers, in which both derive value and benefits. Crucial to this type of leadership is the ability of the leader to device strategies for rewarding or punishing employees in relation to achievement or underachievement of organizational goals. Moreover, this approach to leadership is hinged on the assumption that human beings always seek to minimize painful experience and to optimize positive ones, thus predisposing them to associate with those who add value to their lives.
In the case of my organization, this theory of leadership predominates, considering the leader utilizes LMX. To some extent, this approach has succeeded in assisting my leader to get acquainted with organizational problems and to curtail any cases of dissent. Moreover, a section of influential employees (the in-group) has remained in the firm since inception, or since they were employed, rendering faithful and efficient service. However, transactional leadership has resulted in many talented workers opting to leave for other firms after being relegated to the out-group.
According to Gill (2011), transformational leadership was first described by James McGregor in 1978. He opined that this approach to leadership mutually benefits the leader and the follower and boosts their morality and motivation. The leader must forge a stimulating vision for the future. Secondly, he must convince followers to like and implement that vision. Thirdly, the leader must manage the process of achieving this vision. Lastly, this endeavor is only possible when the leader and followers are in a strong relationship based on trust.
My workplace cannot be described as the epitome of transformational leadership, at least not for the majority in the out-group. While in-group members understand, believe in and actualize the vision of our firm, the rest of the employees work mainly to earn a salary. Since the leader has not managed to balance between managing his in-group and taking care of the interests of other workers, not everyone has bought into the vision. For the out-group, there is no sense of belonging; neither do they feel that their interests are important to the firm.
In leadership, there are several crucial traits that a leader must possess if the organization is to actualize its mandate and vision. Although trait and behavioral theories are criticized for being conservative and for negating the role of learning and situations in leadership, there are certain behaviors and traits that most followers expect to see in their leaders. Whether they are learned or inborn, these skills define a great leader and foster support from followers (DuBrin, 2009).
Any effective leader is adaptable, often making decisions based on prevailing circumstances. In the firm I work for, the leader is not willing to change his tactics and accommodate the out-group even when members of the latter exhibit discontent and even resign. The ideal leader must also be empathetic, viewing life from the employees’ perspective. Effective leadership is defined by decisiveness, especially in cases where a quick solution is needed. I have seen traces of this quality in my leader, especially when the issue in question affects members of the in-group. In addition, effectual leaders are amiable; forging personal links with their followers irrespective of rank or position, something that never happens where I work. Assertiveness is at the heart of transformational leadership – the leader must make firm decisions and stick by them. This is largely true in my organization, though at times it impacts others negatively. Additionally, a leader must be inspirational, in tandem with another quality – effective communication. When you communicate only with employees close to you and the rest remain uninformed, you do not inspire positive action or confidence, and this is exemplified by my leader. Finally, a leader must be honest and trustworthy, considering followers believe in his words and actions. While integrity is desirable, it must be manifested for all employees to see and not ostensibly among a few workers.
How my leadership supports organizational vision, mission and strategy
The leadership of my firm utilizes several strategies to bolster the vision, mission and strategy (Hayes, 2002). To begin with, every employee is sensitized on these issues after being hired, and constantly reminded through various types of communication. Secondly, the firm has in place performance evaluation criteria with concomitant exercises taking place on quarterly basis to ensure the firm is fulfilling its mission. Thirdly, staff members undergo regular training on developments in the IT sector to boost organizational capability and strategy, even if only members of the in-group enjoy this privilege. To ensure the firm’s strategy is adhered to by all means, the company has a rewards and punishment system in place. For example, promotion, demotion and sackings are pegged on performance. However, employee turnover indicates that the leadership strategy is not working and may eventually affect productivity. It is not enough to train and sensitize workers on missions and visions, or even to reward and punish based on performance. Unless the leader lives the ideals of the firm and communicates this in person to all employees, no much success will be realized.
How I would change the organization if I was the leader
If I was the leader in this organization, I would adopt transformational leadership. For example, I would minimize or eradicate in-groups and instead opt for functional teams. Team leaders would comprise a higher level of management that would make crucial decisions after gathering facts and opinions from employees (DuBrin, 2009). This would create inclusivity for everyone and encourage participation and not segregation. I would also create personal working relationships with each employee, since they are not many, and occasionally visit them at their work stations to foster better relationship. In addition, I would organize team building and bonding events, including taking time to relax away from the firm’s premises. This would help me understand workers and what they expect from me and the company.
The choice and implementation of a leadership theory can determine prosperity or doom for leaders, followers and organizations (McKee et al., 2013). The small IT firm I work in epitomizes ineffective application of LMX theory, since the in-group becomes a weapon of secluding out-group members. This results in conflict, feelings of unfair treatment and in some cases resignations, with the organization sometimes losing very talented workers. LMX is a form of transactional leadership whose failing can be remedied by embracing transformational leadership. My leader would be more effective if he minimized the role and functions of in-groups and instead embraced creation of personal linkages with all members of the firm. Although the leadership has succeeded in inculcating the vision, mission and strategies, this cannot be sustained for long if majority of workers remain sidelined.
DuBrin, A. (2009). Essentials of management. Mason, OH: Western Cengage Learning.
Gill, R. (2011). Theory and practice of leadership (2nd ed.). London: SAGE Publications Ltd.
Hayes, N. (2002). Managing teams: A strategy for success, (2nd ed.). London: Thomson
McKee, A., Kemp, T., & Spence, G. (2013). Management: A focus on leaders. Frenchs Forest,
AU: Pearson Higher Education.
Robbins, S., Judge, T. A., Millett, B., & Boyle, M. (2013). Organizational behaviour (7th ed.).
Frenchs Forest, AU: Pearson Higher Education.
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