Introduction
Modern conditions dictate a radical change in the role of human in the organization’s management system. He ceases to be part of the technological process, and turns into the most important resource of the organization. Therefore, the priority task of management is to ensure conditions for the fullest disclosure of human capabilities and to maximize labour return in accordance with the conditions of today and the organization’s strategy. The solution to this problem puts forward the requirements of the study of personal qualities and competency of managers as leaders, ensuring the successful existence of organizations.
Today, in almost any company, the management system determines the nature of the formation and development of the organization. Whatever the development strategy is chosen by its leader, his style, motivation, and nature of work depend on many principles. Skilful leadership should be characterized as the ability to achieve goals and objectives through a positive impact on people. An important component of the process of interaction between the head and employees of an organization is the style of leadership of this organization, or rather, the problem of leadership.
Notable trends in managerial practice are new principles proclaimed by many organizations: “a company can become a leader only when it is led by real leaders,” “everyone in the company can become a leader in their field,” “we will become a market leader only when our people will be leaders,” etc. The practice of such companies shows that, in determining leadership, they proceed from their understanding of leadership as a phenomenon that allows one to be the first, lead and set the tone, inspire others (Dial, 2016). The way in which HR specialists define leadership competencies is worthy of the attention of researchers in the field of leadership.
Here we observe a situation of interchange of practitioners and theorists: practitioners, based on an acceptable theory for them, describe the competencies of the leader, and theorists have the opportunity to accumulate experience in developing leadership skills in specific companies. Leadership plays an important role in the dynamics of group processes.
Thus, the analysis of the best practices of effective leadership and their comparison with theoretical developments in this area is gaining relevance, which will make it possible to synergistically combine theoretical and practical approaches to leadership and its role in the organization, its impact on the work of organizational teams and achievement of organizational goals. In this paper, we will consider aspects of leadership in one of the British IT companies ‑ Inflexion ‑ in the context of influencing organizational goals, teamwork, and organizational values.
Various Leadership Styles Required in Different Situations
It is known that in order to achieve strategic goals, the organization should first of all develop procedures for the effective interaction of the head and representatives of various categories of employees. Maintaining synergies enhances staff satisfaction. Moreover, the leader influences the social community, but this community also influences him (Babooa, 2013). Thus, the leader-manager is the employee who is able to analyse, understand, and express the majority opinion, can influence the opinion of the staff, occupies a major position in the system of organizational interaction.
The behavioural manifestations of leadership at Inflexion can be described as follows: in a situation of uncertainty, the leader takes the lead and achieves the result; in difficult situations, sets a personal example of constructive behaviour; encourages to set ambitious goals that exceed the expectations of customers and partners; represents an example of compliance with corporate rules and regulations.
Modern leadership theories have turned to a situational approach, since depending on the specific situation it is advisable to change the methods of leadership, namely, organizational structures of management. Conducting an analysis of situational models, we can conclude that the description of different leadership styles is based on the detection of external factors and the analysis of situational variables that affect its effectiveness. The success of the leadership is determined on various grounds, among which there are the following: the degree of completion of work, employee satisfaction, effectiveness of decisions.
The most famous concepts are as follows: Fidler’s situational model; House-Mitchell’s Way-To-Goal Model; situational model of decision making by Vroom – Yetton – Jago; model of situational leadership by P. Hersey and C. Blanchard. The most modern model ‑ the model of situational leadership of Hersey and Blanchard ‑ is based on the situationalism of the effectiveness of the leader. According to their theory, the choice of leadership style is significantly determined by the willingness of followers to complete the task. Depending on the willingness of followers, several basic leadership behaviors that define the decision-making system are identified within the framework of this model (Bratton, 2019):
- Indicating style ‑ it the best in cases of low maturity of followers, when the leader is forced to show high directivity and carefully monitor the staff;
- A persuasive style – it is the best to use it, subject to moderately low maturity of followers, equally implementing support and directiveness for those who are not capable but want to work;
- The participating style is the best in the case of moderately high maturity of followers. Subordinates, capable of work, but not willing to perform it, need a partnership on the part of the leader in order to be motivated to work. Providing these people with opportunities to participate at their own level in decision-making, the leader uses this style to arouse followers’ desire to complete the task;
- The delegating style is the best for leading highly mature followers. The style is described by insignificant directivity and support, which allows followers who are able and willing to work take on maximum responsibility. This leadership style contributes to the development of a creative approach to work.
Inflexion employs a participatory and delegating style, which is clearly related to organizational goals. Organizational goals are closely intertwined with individual goals and even, to a certain extent, depend on them. The desire to separate these goals on different sides is not just futile; it is counterproductive, because it undermines the dedication of organization members (workers) and, in essence, alienates from them vast areas of activity that are not covered by formal regulations (Busch, 2014).
However, organizational goals are not reducible to individual ones. They are fundamentally impersonal in nature and express something more than any aggregation of personal preferences. The question is to determine the measure and mechanism for the participation and the aspirations of individual members of the organization and their groups in the formation and implementation of its goals.
Moreover, the concept of organizational goals, of course, is the cornerstone of the theory of organization. Without revealing their essence, it is hardly possible to develop an ordered conceptual scheme capable of orienting management practice. Inflexion’s main organizational goals are culture of excellence, high performance, maintaining a platform for continuous innovations. This determines the situational orientation of the applied leadership styles ‑ from the participative to the delegating style.
In addition, effective situational leadership can establish synergies between goals related to different units. Since they often turned out to be practically incompatible and conflicted with each other, an assessment of the degree of their divergence acquired particular importance.
However, it is explained well in the literature how to carry it out and how to pair and reconcile them with each other. Meanwhile, this kind of discord inevitably leads to a lack of coordination in the activities of individual departments of the organization ‑ for example, the technical department and the marketing department. Thanks to the competent use of situational and transformational leadership, as well as (to a small extent and only for routine processes) transactional leadership, Inflexion managed to link organizational goals with the developed mechanism of situational and transformational leadership, providing effective situational leadership of the Scrum-process and transformational leadership in solving strategic issues, talent management, etc.
The Prevailing Leadership Styles in the Context of Organizational Objectives
The American social psychologist and researcher of organizational behavior and management R. Likert for a long time conducted a number of studies of organizations with both high and low productivity (Likert as cited in Nir, 2014, p. 150). As a result of research, Likert came to the conclusion that the effectiveness of the organization depends on the position from which the manager approaches the organization of work of his subordinates. Likert concluded that leadership style would be either person-oriented or work-oriented. A person-centered leadership style can increase productivity, but it will not be optimal in every case. Likert proposed four basic leadership styles (Witzel, 2019):
- In the 1st management style, he included leaders of the exploiter-authoritarian type. Such leaders make all decisions in the organization individually, and also have unlimited power.
- To the 2nd management style, Likert classified leaders who maintain authoritarian relations with subordinates and periodically allow them to take part in managing the organization. These are leaders of a supportive and authoritarian type. Such leaders motivate subordinates with the help of a “carrot and stick.”
- To the 3rd management style, he included leaders who use a consultative-democratic management style. Such leaders listen to the recommendations of their subordinates, but the decision is taken solely and only they bear responsibility for it.
- The most effective is the 4th style, which focuses on group decisions, as well as the participation of all employees in making the necessary decisions. Such leaders attach great importance to the problems of their subordinates, and also help to solve them. Between the leader and subordinates, there is mutual trust in this case.
Thus, it can be noted that effective leaders pay much attention to the human aspects of the problems. However, this approach is not optimal for all situations, so the manager cannot afford to apply only one leadership style. He must learn to use different styles and methods of influence depending on the situation. To give the situation a true assessment, the leader must have a good idea of the abilities of his subordinates and his own, be prepared to reassess the judgments, if necessary. His task is to make the right choice based on his own experience, professionalism, personal qualities, the behaviour style of subordinates, and an individual situation.
Obviously, each of the management styles has its own supporters. Scientists have encountered situations where subordinates were involved in decision-making, however, satisfaction was low, as well as situations where satisfaction was high and productivity was low (Babooa, 2013). Therefore, namely mixed leadership styles bring more results than commitment to only one style. Based on the point of view of Likert, it is worth noting that the main emphasis in management should be placed on a democratic management style. However, it must be remembered that, in modern conditions, the success of a business is determined not only by the nature of the relationship between the leader and subordinate and the degree of their freedom, but also by other circumstances.
The above is especially important for IT companies, where the degree of freedom and participation of employees, due to the specifics of their activities, is one of the important factors of efficiency. Inflexion uses Agile development methodologies. Accordingly, the type of leadership used can also be described as Agile leadership. Agile leadership is the ability to listen, not communicate. An Agile leader asks the question: “How can I gather the experience of clients, employees, and managers and how can I use it to make changes in the organization and make it more capable?” Thus, managers should see what is happening at the grassroots level; it is about taking an active part, encouraging everyone’s contribution to change, and acting in accordance with the principles that have been stated.
In particular, the company uses a very effective way to encourage a new model of behaviour ‑ to request ideas about what changes the team would like to make and ‑ which is especially important ‑ it can implement it on its own. Starting from the very first proposals, the team must determine which ones are the most viable. However, this practice should not be confused with the principle of non-interference (“laissez-faire”). The question is not just to let the team decide: rather, the Agile leader provides support by eliminating bottlenecks, but most importantly, he formulates a vision of where the organization is moving and guides the whole team along it.
The Agile-organization leaders at all levels should be similar to Scrum-master ‑ to carry out informal leadership, thus not only giving each employee the opportunity to participation, but encouraging it. In this case, all employees will understand the organizational direction, try to show the maximum level of professionalism and show mutual respect (Hayward, 2018).
In turn, an informal leader can only be a leader who can become a reference personality for almost all members of the team, while he must accurately understand and express the desires of the group whose influence will dominate. Such a leader forms reference groups of employees who fully share his ideas, that is, forms a group of his followers (Nowotny, 2017). The informal leader forms the social community of his followers as they realize the common interest in a particular situation and begin to consider it the goal of a particular activity.
Since the upper limit of the effectiveness of the management team of the future is largely determined by the quality of its leadership, the creation of a project team (if possible) should begin with the search leader, and other members of the team should be chosen talking it into account. The formal way to gain power in a team is to appoint a team leader from above, by official order. This path is common and simplest poption of the filling guiding position, and often the most efficient (Morrison, Hutcheson, Nilsen, Fadden, and Franklin, 2019).
However, this can turn out to be extremely destructive for a medium-sized IT company, when a team requires well-coordinated work. Indeed, with such an approach it is impossible to guarantee the formation of a real team from this collective, that is, the appearance of a clearly defined leader in it and the appearance of confidence in it from other team members.
The most ‘grateful,’ from the point of view of return on invested resources, is the work of the leader demonstrating his ability to make the right (or effective) decisions. The fact is that, as practice shows, the number of effective decisions made is much more important here, and not their scale (Shen and Xu, 2015). Thus, from the point of view of the final result, much more effective will be those techniques which allow the leader to demonstrate acceptance of greater number of correct decisions for the team at the same time. In the company in question, for any projects (not only directly related to IT development, but also in finance, CSR, and integrated reporting), Scrum method and decomposition on the sprints are applied. This makes it possible to achieve maximum participatory and maximum reduction of managerial errors.
One of the most common leadership concepts is the concept of transactional and transformational leadership. This is largely due to the fact that it is not the features of the leader or his followers that are analysed, but the nature of the relationship between them. This approach is quite widespread, because it considers the whole range of relationships between followers and the leader: with this approach, it is possible to establish how the followers are motivated, what is the nature of the leader’s participation in the team, and through what tools he mainly leads the team (Atapattu and Ranawake, 2017). In addition, the behaviour of a leader can be quite easily defined in a transactional or transformational style of leadership, because each of them has its own indicators, which are quite noticeable in the behaviour of each leader.
A characteristic feature of a transactional leader is that he clearly sets goals for his subordinates, determines the expected results, sets the benefits and sanctions that will be applied to employees if they successfully or unsuccessfully complete their tasks. Thus, the main tool that affects the quality of work by employees is remuneration (Chou, 2013). A large body of literature on the topic of transformational and transactional leadership has revealed that transactional leadership is primarily designed to provide the expected effectiveness of employees (Nongard, 2014). At the same time, transformational leaders can establish relationships of this kind when employee performance can exceed expectations. Therefore, the transformational type of leadership is considered particularly effective in various innovative fields, including IT.
Moreover, as Burns and later leadership researchers have shown, transactional leadership cannot be a guaranteed tool for employee motivation. To be more precise, there is an environment limitation on the possibility of using the transformational type of leadership (Dhiman, 2017). Transactions are more effective in a stable and predictable environment. If its balance is disturbed, which, in turn, requires more innovative actions from employees, then transactional motivation imposes restrictions on the leader’s ability to convince employees to accept innovative challenges. In this regard, a different approach to motivation through leadership is required.
Agile is not Scrum, Kanban or SAFe; it is a set of values, a culture of cooperation, adaptability, involvement and acceptance (and use) of uncertainty. Successful application of Agile methodology requires commitment throughout the organization. This really applies to the entire organization, including both the vertical hierarchy (from performers to senior management) and the horizontal distribution of various services (from IT to financiers and HR). Accordingly, transformational leadership is the framework on the basis of which Inflexion’s organizational goals are formed and the effectiveness of joint (including team) work is ensured on the basis of improving professionalism, enhancing mutual trust and support.
The Organization’s Ethical and Value-based Approach to Leadership
Most works in the field of ethical leadership research are empirical and descriptive in nature. The main task that is solved in this case is the identification of key parameters inherent in an ethical leader. The definition of M. Brown (Brown as cited in Leigh, 2013, p. 22) is widely known, which defines ethical leadership as normatively acceptable behaviour, realized in personal actions and interpersonal relationships, as well as stimulating such behaviour among followers through two-way communication, reinforcement and decision making.
Kanungo and Mendoza emphasize altruism and virtuous behaviour of an ethical leader; Kewla speaks of respect for the rights and dignity of others as an essential characteristic of ethical leadership (Langlois, 2011). Examining the power of a leader, Gini emphasizes that ethical leaders demonstrate social responsibility by using their power: power is exercised to achieve organizational rather than personal goals (Meine and Dunn, 2013). These definitions represent an ascent from a “legal” understanding of ethical leadership (ethics of duty) to social responsibility across the organization that has a direct impact on goodwill.
An ethical leader also acts as a moral manager who wants other members of the organization to follow ethical standards; therefore, in interaction with his followers and with the organization, he consistently implements ethical principles. Empirical studies show that leaders who are assessed as moral personalities and as moral managers are entitled to expect their subordinates to increase efforts, level of organizational citizenship, and weaken manifestations of undesirable behaviour.
The consequence of ethical leadership is an increase in organizational citizenship of followers, job satisfaction, and a decrease in staff turnover, which, in turn, leads to an improvement in the organization’s long-term performance (Mcmanus Ward, and Perry, 2018). The influence of ethical leadership on behaviour and attitudes is driven by the trust that followers have in relation to the leader. Namely the formation of stakeholder confidence acts as the mechanism by which an ethical leader affects followers and the effectiveness of an organization.
At Inflexion, core leadership values are corporate citizenship, which includes CSR, stakeholder relationship management, and integrated reporting. In particular, the publication of integrated reporting helped to increase the investment attractiveness of the company and attract investor funds for the implementation of several highly profitable startups. If we compare corporate citizenship and corporate social responsibility, the differences between the two concepts become extremely clear. The company’s activity as a “corporate citizen” is aimed at solving social problems, in particular, education in the field of IT and STEM for children from low-income families.
Thus, CSR is a kind of foundation that carries the construction of corporate citizenship, which is a set of mechanisms for its implementation. At the same time, this foundation is not passive; it is actively used in almost all those forms and directions of the corporation’s interactions with its stakeholders (Johansen, 2017). The fundamental principle of corporate citizenship is multilateral, multi-active interaction of corporations with their stakeholders.
In addition to effective interaction with external stakeholders, “healthy” relationships within the company are extremely important. The ability of management to keep the best employees in the team for whom the ethical motivation of their work is inseparable from self-realization in the professional sphere and material rewards (Shakeel, Kruyen, and Thiel, 2019). Human potential and its development is becoming the main resource for putting innovative strategies into action, and the interaction of the main participants in development is the basis for the formation of innovations in the economy.
Corporate citizenship, expressed in a holistic system of methods aimed at satisfying public interests by business, in the context of the above, acts as a conscious competitive technique, as a way of doing business in modern conditions. This is a factor in achieving business efficiency, which is considered under the conditions of uncertainty of the trends associated with the evolution of the material and spiritual needs of society, as well as under the conditions of the uncertainty of the possible behaviour of the state to ensure public justice, in particular, in the context of the ongoing implementation of Brexit programs.
A company acting as a corporate citizen does not succumb to pressure from external institutions. On the contrary, it stands along with representatives of civil society and the state. Together they form values that can ensure sustainable development and protect the interests of stakeholders, and also embed these values in corporate governance. Strictly observing the norms of British legislation in the field of business regulation, in particular the Companies Act 2006, etc., the company has undertaken additional obligations for the preparation of integrated reporting in accordance with the Global Reporting Initiative (GRI) standards.
In the process of its activity, a business is able to use many types of capital. The purpose of the integrated report is to comprehensively reflect all types of capital, and not just financial capital. This includes, for example, human capital ‑ the skills and experience of people, their ability to innovate. Its components are as follows: the consent and support of the company’s management of ethical values (for example, the recognition of human rights); ability to understand and execute company strategy; loyalty and motivation for improvement, ability to leadership and cooperation.
The goal of creating integrated reporting is to build a single and comprehensive concept of corporate reporting, structured around the strategic objectives of the company, corporate governance standards and the business model itself. Integrated reporting reflects the organization’s ability to create and maintain its value in the short, medium, and long term. Moreover, the very fact of having integrated reporting indicates respect for stakeholders and taking into account their interests.
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