Critical evaluation of the application of leadership theories and management theories PDF

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A Critical Evaluation of the Application of Leadership Theories to a Leader in an Organizational Context and Management Theories to a Contemporary Organization (A case study based on MTN Nigeria and its Group President/CEO – MTN, Rob Shuter)

By

Ngozichukwu Marian Idu R1812D6988258

BS4S16 Leadership and Management Theories Course Lecturer: Chrystalla Markou 26th July 2020

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Table of Contents 1.

Introduction ................................................................................................ 3

1.1.

Report Framework ..................................................................................... 4

1.2.

A background on Organizational Case Study - MTN Telecommunication Plc……………. ........................................................................................... 4

2.

Dissection of Management Theories .......................................................... 5

2.1.

Classical Management Theory................................................................... 5

2.1.1. Scientific Management Approach .............................................................. 6 2.1.2. Administrative Management Approach ...................................................... 7 2.1.3. The Bureaucracy Theory ........................................................................... 8 2.1.4. Adoption of Classical Management Theory in MTN Nigeria ....................... 8 2.2.

Behavioral (Human Relations) Management Theory ............................... 10

2.2.1. Douglas McGregor’s Theory X and Y ...................................................... 11 2.2.2. Maslow’s Hierarchy of needs ................................................................... 11 2.2.3. Frederick Herzberg Motivation (Hygiene or Two-Factor) Theory ............. 12 2.2.4. Adoption of Behavioral Management (Human Relations) Theory in MTN Nigeria ..................................................................................................... 13 2.2.5. Contemporary/Modern Management Theory ........................................... 15 3.

The Concept of Organizational Leadership.............................................. 15

3.1.

Link between the Leadership and the Culture of Organizations ............... 17

3.2.

Dissection of Leadership Theories and their Applicability ........................ 20

3.2.1. The Trait Theory ...................................................................................... 20 3.2.2. The Skills Theory ..................................................................................... 22 3.2.3. The Style Theory...................................................................................... 23 3.2.4. The Transactional Leadership Theory ..................................................... 24 3.2.5. The Transformational Leadership Theory ................................................ 25 4.

Conclusion ............................................................................................... 27

References ........................................................................................................ 29

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1. Introduction An organization can be said to be a group of individuals working in cooperation so as to actualize shared and common goals. Every organization has to have effective coordination of one or more of the six (6) key business activities (Finance, Accounts, Securities, Technical, Commercial and Managerial) so that its common goals can be met. The process of coordinating these set of business activities is Management. Management as a process is the basic unit of any organization (Nadrifar, Bandani, & Shahryari, 2016) because organizations are able to meet their planned objectives through management practices. When group of individuals work together they develop shared values, beliefs and behaviors that influence the way they carry out their jobs (set of business activities). This concept is known as organizational culture. Every organization forms and cultivates a distinct cultural standard which impacts the way, the how and the manner in which decisions are made (Harrison & Stokes 1992). Therefore it would not be out of place to say that organizational culture influences the management process of any organization. According to Schein 1992, the leadership of an organization defines the culture of the organization. Leadership is strategizing and building a futuristic vision, effectively communicating this vision to a set of followers and developing an approach while making sure that the followers are properly motivated towards actualizing this vision. The concept of managing and leading an organization with a unique culture is done to take advantage of the ever changing opportunities in the world of business today.

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It is therefore important to understand the relevance of the various management and leadership theories used in keeping organizations running and creating meaningful changes within organizations. 1.1. Report Framework This essay is aimed at evaluating critically the role of leadership theories to a leader in a chosen organization and management approach to the contemporary organization. The organization of choice to be used as case study for the purpose of this paper is MTN Nigeria Communications Plc, while the chosen leader is the MTN Group President and CEO, Rob Shuter. In this essay I would be highlighting the initial conception of these theories, comparing and contrasting these theories, discussing how they have evolved over the years and identifying their adoptability by the chosen leader & organization. 1.2. A background on Organizational Case Study - MTN Telecommunication Plc MTN is a South African multinational mobile telecommunication company established in 1994, which performs its business activities in Africa, Europe and Asia with its head office in Johannesburg (MTN online, 2019). The company is currently operating in over 20 countries, providing enterprise solutions to both public and corporate customers and voice, data & digital services to retail customers. One-third of the company’s revenue comes from Nigeria which holds about 35% market share. On the 30th of June 2016, the company recorded 232.6 million subscribers and this achievement made it the eighth largest mobile network operator in the world, and the largest in Africa. Rob Shuter was appointed as the company’s Chief Executive Officer in March 2016 (Writer 2, 2016). The company is known for its application of

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leadership and people management best practices which makes it the first Nigerian company to have the Investors in People (IIP) Platinum Certification.

2. Dissection of Management Theories Management is a very important part of any business. Over the years, the concept of management has been categorized into theories as well as given different definitions by so many scholars. These theories were initially conceived when there was a need to manage people and processes and it was discovered to be essential to running a business. They have been grouped into the classical management theory, the behavioral management theory and the contemporary/modern management theory. Classical Management is focused on maximizing productivity (Nadrifar, Bandani, & Shahryari, 2016).; Behavioral Management focuses on motivating people with the view of people being social beings and organizations being social environments (Badubi R., 2017); while Contemporary Management leverages on the older theories by adopting it to modern situations. It is important to state that these theories are not without imperfections but despite their deficiencies they are continuously developed into newer theories in order to maintain the ever changing conditions of the workplace. 2.1. Classical Management Theory This is the oldest theory in the world of management. Before the conception of this theory, work was carried out without stipulated functions for managers and workers. People worked without regard for position, titles or whether they got adequate skills to carry out their tasks (Mullins 2011). This theory can be further broken down into

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three management styles: The Scientific approach, The Administrative approach and The Bureaucratic approach. 2.1.1. Scientific Management Approach This theory was first conceived and popularized by Frederick Taylor in the 80s and 90s as he was convinced that this theory was going to solve the problems of business. In his book ‘Principles of Scientific Management’, he suggested that some scientific measures such as reducing irrelevant movements and task division amongst workers be put in place so as to align the goals of workers to that of management which is an increase in productivity (Taylor 1960). Taylor’s theory was based on the following principles: i.

Pay attention to the manner in which workers carry out their tasks and scientifically figure out the most efficient way these workers can do it

ii.

Develop written standard procedures to carrying out job tasks

iii.

Differentiate workers according to skills in different job roles and then train them scientifically on how to carry out their job functions

iv.

Put in operation a just enough and fair reward based performance system which also provides increased payment to workers who carry out their duties beyond the sufficient level (Jones & George, 2009).

Though Taylor’s scientific theory has been used as base theory by some contemporary theorist such Lillian Gilbreth, Henry Gantt to mention but a few, the theory is not without its downsides. Some of which are worker brutalization (Caldari, 2007) and rigid working environments. John Hobson, an English economist suggests that the scientific management theory brings about misalignments between the interests of workers and the vision of the business (Hobson, 1914). Critiques to this

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theory therefore propose the use of a combination of other management theories in order to cater for the needs of workers and ultimately bring about cooperation between workers and management. In my opinion while the application to this theory is necessary in some units/departments of an organization, in the business world of today it will be detrimental to the growth of any organization to apply only scientific management. 2.1.2. Administrative Management Approach This theory was developed by Henry Fayol, a French senior manager in 1916 who defines management to be the act of forecasting, planning, organizing, commanding, coordinating and controlling (Fayol 1916). His theory is built on fourteen management principles inclusive of work specialization; authority; discipline; unity of command; common goal; prioritization of company interest; management hierarchy; order in the work place; equity; and employee encouragement. Unlike Taylor’s theory which is productivity centered, Fayol’s theory is pay and morale centered (Cole and Kelly 2016). Brech (1975), another scholar in classical management theory recognized planning, motivating, coordinating and control as the four elements to management. Though he agrees with Fayol that management consists of the functions of planning, coordinating and controlling, he didn’t agree totally with all five of Fayol’s management functions but instead adopted the behavioral approaches to management (Mayo 1930; Marslow 1957) presenting that the “command” approach be replaced with a “motivating” approach. I believe this theory to be the foundation of the behavioral approach to management and the most applied theory in big organizations today.

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2.1.3. The Bureaucracy Theory Introduced by the German Sociologist Max Weber in 1947, the theory is centered on the structure, hierarchy, authority and control of organizations (Weber 1947). According to Weber, bureaucracy caters for the demands of big organizations. Organizations do not decide to be bureaucratic by nature bureaucracy is rather naturally manifested (Cole & Kelly, 2016). Lawal (2012) identifies the downside to the application of this theory to be lack of flexibility which is of major importance in the world of business today. Analysis done on this theory by Handy (1999) suggests that bureaucracy is used to provide stability and not for dynamic organizations. 2.1.4. Adoption of Classical Management Theory in MTN Nigeria Before I evaluate the application of the classical management theory in MTN Nigeria, I would clearly state that its management structure is an efficient mix of the different theories in management that are beautifully adapted to provide its employees a great place to work as well as give the company competitive advantage. The principles of the classical approach highlighted below are evident in the way and manner the network service agents carry out their duties in a bid to satisfy the demands of customers who either walk into the call centers or make their complaints virtually: i.

Queue management systems are deployed to scientifically handle the step by step process in which customers are attended to

ii.

Workers are given standard rules as to how customers are to be addressed and spoken to. Resolution to customer complaints are also carried out following laid down and clearly stipulated procedures. Disciplinary measures are taken on agents who fail to abide by these rules

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iii.

The different staff are trained to resolve and handle different aspect of customer complaints.

iv.

The job of the workers are performance based as they are tied to various key performance agreements such as time to complaint resolution and number of resolved cases per day.

v.

Every MTN call center is under supervision and managed by a shop manager with authority over the call agents and is accountable for the smooth running of its operations.

Traces of the administrative approach to management are generally seen in all of the business sectors in MTN Nigeria as work responsibilities across the organization are on a functional basis. Take the Information Technology (IT) sector of the business (as shown in fig 2.1 .4) for instance, having a unity of command which is the Chief Information Officer (CIO) is divided into four departments: IT Design and Delivery department; IT Operations; IT Governance; and IT Infrastructure Performance and Service. These departments are individually managed by four General Managers who are in turn responsible for several senior managers and the hierarchy is cascaded down to the analyst & coordinators of different IT functions. Figure 2.1.4 Information Technology Division of MTN Nigeria

Source: MTN Nigeria’s intranet portal

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Fayol’s definition of management is present in the way and manner the company carries out its yearly forecasts. The company plans for the year ahead by drawing up financial budgets and yearly targets. Planned targets are then cascaded down to all business sectors/divisions for actualization under the proper coordination and control of divisional heads. The Human Resource division is charged with the responsibility of providing organization al structure necessary for enforcing business plan. The basic principles of bureaucratic management theory is shown in the working relationship system of the company. The staff of MTN Nigeria are governed by rules of conduct, ethics and principles which are found in a document called ‘MTN Nigeria Conduct passport’. In this documents are policies relating to employee conduct and stakeholder relationships. 2.2. Behavioral (Human Relations) Management Theory The issues pertaining to the classical management approach birthed the behavioral management theory. This theory is focused on the employee interest and wellbeing rather than the former which focused solely on organizational productivity and structure. It was discovered by scholars of this theory that keeping workers motivated resulted to work productivity as there was the tendency to want to put in more work when motivated (Mullins, 2011). Several studies and theories have been carried out that touches on the impact of human relations and employee motivation in ensuring that the goals of organizations are met. Some theories that majored on human relations and behavior are: The two factor theory; Douglas McGregor’s theory X and Y; Maslow’s theory of needs to mention but a few.

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2.2.1. Douglas McGregor’s Theory X and Y This theory addresses the assumptions made by managers about their employees. In theory X, workers are assumed to be laid back, not wanting to assume responsibility and require close monitoring while in theory Y, workers are assumed to not need coercion to commit to organizational goals as long as they are provided with the needed resources (McGregor,1966;1969). With this theory McGregor concluded that the way managers perceive their workers is based on the attitude and behaviors of the workers. Although critics of this theories find them to be practically unrealizable, businesses can adopt their fundamental premise. 2.2.2. Maslow’s Hierarchy of needs Abraham Maslow saw McGregor as a mentor, supported his theory and used it as a base point for his works. In this theory Maslow suggested that every person has his/her needs arranged in a particular order from physiological being the lowest level to self-actualization as highest level, as seen in Fig 2.2.2.1. His theory emphasizes on the premise that people don’t only have life essential needs & social needs but also desire self-fulfillment (Maslow, 1954). Maslow believed that the fulfillment of these

needs in order of precedence is what

brings

about career as well as relationship motivation.

Fig.

2.2.2.1 Maslow’s Hierarchy of needs

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Source: https://www.simplypsychology.org/maslow.html 2.2.3. Frederick Herzberg Motivation (Hygiene or Two-Factor) Theory Having Maslow’s theory of need as baseline, Frederick in his theory had his concentration on factors that could bring about employee work satisfaction which he termed ‘motivators’ and factors which could demotivate employees called ‘hygiene’. According to Frederick (1950), motivators are the perks employees get from working in an organization such as: recognition; the job itself; responsibility; job advancement and achievement. Hygiene factors on the other hand are factors that prevent employees from being unhappy such as: salary; company policy and administration; supervision; interpersonal relations with supervisors; and the general working conditions of the organization. He considers one of the most useful source of motivation for workers to be job training stating that only workers who know their job can be motivated. Locke (1976), in his research criticized this theory suggesting that the desires of humans are not unidirectional and these needs differ with individuals. It is important to note that despite this criticism the two-factor theory is widely accepted and applied by managers in organizations today (Malik M., Naeem B., 2013 ).

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I think that although there are a lot of similarities between Frederick’s theory and that of Maslow’s, the former is acknowledgment and payment based while the latter is based on satisfying human needs. 2.2.4. Adoption of Behavioral Management (Human Relations) Theory in MTN Nigeria MTN Nigeria becoming the first and only company to acquire the IIP (Investors in people) Platinum certification, is only able to stand out due to its application of people (Human Relations) management. Encapsulated in these people management practices is what the company calls ‘The Employee Value Preposition (EVP)’. The company carries out this practices by first developing an effective team via efficient talent acquisition ...