Leadership refers to the concept of nominating a key person with exceptional abilities, who would be capable of communicating the organizational vision and provide direction to employees and other personnel. A leader's prime job is to motivate people and for this purpose he develops his very own leadership style. As opposed to the contemporary management theories, leadership has proven to be very much successful in recent years, as seen by the case of Apple, Inc., when it was being led by the visionary leader Steve Jobs.
This paper aims to review the literature on the role of leadership as the driving force behind organizational performance. Included within the literature review are problem areas and issues from an organizational case study, for which a few solutions have been advised and the challenges that are likely to be faced are also addressed.
Literature Review
Significance of Leadership & Management in driving Organizational Performance
The impact that leadership has on the performance of an organization depends on the leaders' natures and their leadership styles. Leaders are often an example or a referral point for their employees, as they promote organizational values by both informal and formal means. They are also recognized by their extraordinary abilities. Any organization's performance can be accessed by the collective performance of its various teams. These teams also seem to improve their functions while being led by a guide. Leaders are in a critical position since they are ones who can make or break the performance of the organization they are guiding. Various factors come into action when determining the impact leadership has on organizational performance (Handy, 1993).
Regardless of which leadership style is being practiced, leaders set the tone by ensuring that all the employees are working for the achievement of the organizational vision and mission. For this purpose, they establish organizational values and habits, which defines the very culture of that organization. Work standards and targets are set up and incentives are provided to the employees to ensure that they remain motivated. Guidelines are also stated in a formal/written manner to check who is complying and who is not (Meindl & Ehrlich, 1987).
The theories of leadership refer to three major styles of leadership: laissez-faire, authoritarian, and democratic. The impact of each of these styles on organizational performance follows a different pattern: laissez-faire leadership works on the principle of convenience, providing employees and supervisors with flexibility to design their own schedules and practice their individual approaches towards executing their work tasks; whereas authoritarian leadership is the complete opposite as it is dictating by nature it defines standards of performance with little or no regard to employees'/managers' opinions, and the authoritative leader develops harsh practices and strategic moves. Democratic leadership finds middle ground between the two as it allows modification of approaches towards work and also takes suggestions and feedback from managers and employees, thereby providing them a chance to express their views on current organizational performance (Lieberson & O'Connor, ...