The Impact of Leadership on Organizational Success

LEADERSHIP THEORIES AND STRATEGIES FOR BUSINESS GROWTH

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Executive Summary

The current study deals with the understanding of various leadership as well as management styles, approaches, and theories from which companies can benefit. Utilizing instances of the company DigiFreight, the study explores how the employees can be properly motivated so that they can be more engaged. Furthermore, various strategies have been formulated for the company so that the costs can be reduced and better growth can be implemented. Various models, theories, and other ideas have been utilized to gain an overall sketch for the same. In the end, certain recommendations and the most suitable measures for the company are provided along with their justification. A comparative analysis is also viewed with DHL and Maersk so that the implementation and their effects on the company can be effectively evaluated and assessed.

Table of Contents

Introduction 2

Task 1 Section 1 2

1 (a) 2 Leadership theories and their impact on the organization’s goals 2

1 (b) 2 Management theories and their effect on the company’s goals 4

1 (c) Methods in which the leadership and management theories relate to DHL and Maersk 6

Task 1 Section 2 7

2 (a) 2 Leadership styles suited to the mentioned company 7

2 (b) How the 2 leadership styles have an impact on decision-making at DigiFreight 8

2 (c) Factors influencing the development of organizational culture and their importance for Digifreight 9

2 (d) i) How leadership styles aid DHL in pursuing aggressive revenue growth 11

ii) How the leadership styles aid Maersk when the company Perseus major cost-cutting exercise 11

2 (e) Evaluate the importance of organizational culture on the overall performance of DHL and Maersk 12

Task 1 Section 3 12

3 (a) Motivational strategy supporting DigiFrieght’s stated goals 12

3 (b) Suitable leadership and management approach to administer performance and improvement. 15

Conclusion 17

References 18

Introduction

Effective management, as well as leadership, are extremely crucial for inducing success in any organization. Through the same, proper ideas are achieved on the means through which the leaders and managers can aid the specific requirements of the company. Since the main aim of the company is to provide motivation to the workers by provisioning a motivational strategy, this study offers pieces for instance of various leadership and management theories and styles that impact the organisational performance. Furthermore, a comparative analysis is made with 2 other companies DHL, and Maersk so that the actual impact on the companies can be effectively displayed.

Task 1 Section 1

1 (a) 2 Leadership theories and their impact on the organization’s goals

Leadership theories are essential frameworks that elucidate the nature, qualities, and behavior of effective leaders and how they guide the other employees in the organization. These provide valuable information on different approaches to leadership (By, 2021). The 2 leadership theories discussed here include “The Hersey-Blanchard model of situational leadership” and “Burns’ Transformational Leadership Theory”.

The “Hershey-Blanchard Model” states that effective leadership is based on situations and is related to the readiness level of the other employees. The followers are considered ready depending on their ability along with their willingness to perform different tasks. Based on this model, there are 4 different styles of leadership (Manyuchi and Sukdeo, 2021). They include telling, selling, participation, and delegation to view different levels of readiness. The utilization of this model ensures that leaders can alter their approaches to satisfy the needs of the employees (PODGÓRSKA and DETKO, 2023). In the case of DigiFrieght, the leaders of the team can change their leadership styles according to the situation so that the employees can be better motivated. Therefore, a supporting environment is developed. It leads to more engagement and productivity, leading to DigiFrieght’s overall development.

Figure 1: “The Hersey-Blanchard model of situational leadership”

(Source: PODGÓRSKA and DETKO, 2023)

“Burn’s Transformational Leadership Model” is another essential leadership style utilizing which the company in question can improve its growth and double its net profit by motivating its employees. According to this model, the leader possesses the ability to inspire and encourage his followers through the development of shared vision and values (Saad Alessa, 2021). Here, the leaders facilitate intellectual stimulation and individualized considerations so that the employees can be better motivated to display their full potential. This leadership style is able to promote organizational changes effectively (Kanat-Maymon et al. 2020). In Digi Freight, the leaders can display this leadership theory so that a “sense of purpose” and shared mission can be developed.

Figure 2: “Burn’s Transformational Leadership Model”

(Source: Saad Alessa, 2021)

It can aid the leaders of the mentioned company in aligning the employees with the mentioned goals. Through the same, better innovation, creativity, and improvement can be generated, thereby promoting better performance and more growth.

1 (b) 2 Management theories and their effect on the company’s goals

Management theories are guidelines and models that provide essential insights into how organizations can be administered in a more improved manner. It enables the managers to depict how better decision formulation, resource organization, and administration are undertaken to reach the desired outcomes (Mio et al. 2020). These theories reflect the altering business environments and leadership philosophies to better administer the employees. The 2 main management theories depicted here include “Taylor’s Scientific Management Theory” and “Handy’s Model of Organizational Culture”.

“Taylor’s Scientific Management Theory” focuses on the systematic study of work methods that enhance efficiency and productivity. Based on this theory, management tasks are broken down into smaller and simpler segments so that they can be performed in a more effective manner. Along with it, standardized methods of performance are also promoted (Rosen et al. 2020). If DigiFrieght opts for this management theory, it can streamline operations and reduce waste. As a result, cost-cutting and finances can be administered.

Figure 3: “Taylor’s Scientific Management Theory”

(Source: Rosen et al. 2020)

It will also increase productivity and decrease the cost of inputs. Therefore, the goals set by the CEO such as higher financial efficiency, more motivation, and better growth can be realized.

Whereas, “Handy’s model of Organizational Culture” ensures that the culture of the company is improved by focusing on 4 different types of organizational culture. These include power, task, role, and person (Stark and Pais, 2020). When the organization’s culture and goals are aligned effectively, it provides better success since the employees are motivated, better job satisfaction is provided and more teamwork is facilitated.

Figure 4: “Handy’s Model of Organizational Culture”

(Source: Stark and Pais, 2020)

Therefore, the overall objectives of the company as determined by its CEO can be effectively achieved (Nasaireh et al. 2019). The objectives of more growth, lesser financial spending, and better employee motivation can be achieved through the same.

1 (c) Methods in which the leadership and management theories relate to DHL and Maersk

In this section, a comparative analysis is undertaken with two other essential companies such as DHL and Maersk. DHL is one of the most renowned global logistics companies that serves over 220 countries and has employees of over 600,000 belonging to different countries of the world.

Figure 5: DHL

(Source: Acosta-Prado et al. 2020)

For the company DHL, the “Situational Leadership Model” proposed by “Hersey-Blanchard” compliments the “Scientific Management Theory” of Taylor. DHL matches the leadership styles to the readiness of the workers so as to standardize the entire process and the operations are performed efficiently. It results in better utilization of the resources and attainment of the goals (Acosta-Prado et al. 2020). On the other hand, Transformational Leadership and Handy’s Cultural model ensure that such a global company has a positive environment that supports the employees’ requirements. It brings better innovation and dynamicity to the organization to face the challenges effectively.

Maersk is another global logistics company that operates in 130 different countries with the aim of becoming a global integrator to connect supply chains so that better delivery facilities are available. The utilization of improved technology with better sustainability is the main feature here (Kolinski et al. 2021). Transformational leadership is extremely effective here since the company is highly dynamic and competitive. Therefore, the employees can be made more motivated, innovative, and creative by aligning the missions of the company with the employees’ values to create commitment and purpose. Situational leadership is also helpful here since it aids the company in meeting its unexpected situations

Figure 6: Maersk

(Source: Kolinski et al. 2021)

Through the “Scientific management Theory” it is able to optimize its operations, while the prevailing culture is identified through Handy’s model, and therefore decision formulation and overall success are guaranteed as well.

The two well-known companies DHL and Maersk both utilize the mentioned leadership and management theories to foster collaboration and responsiveness. DigiFrieght can utilize the same so that they can reduce costs, and bring better growth for the entire company (Eper, 2022). Therefore, based on the same all the companies can gain different types of benefits leading to more motivation and engagement for the employees. Additionally, the overall growth determined by the leaders of the organizations can also be effectively achieved. It leads to better consolidation, more productivity, and better administration of the entire company as a whole.

Task 1 Section 2

2 (a) 2 Leadership styles suited to the mentioned company

Leadership styles can be defined as the various approaches that leaders utilize to influence, guide, and motivate their employee followers. The styles are associated with the leader’s beliefs, attitudes, and actions. The main leadership styles suitable for the company DigiFreight include Transformational as well as servant Leadership.

Transformational leadership is the leadership style where the leaders inspire and motivate the teams and employees by determining compelling goals and inspiring employees to optimize their efficiency. It is based on individual development, innovation, and more “sense of commitment”. It aligns with the mentioned company’s goals of better motivation provision and growth (Ruales and Silitonga, 2019). This transformational leadership motivates the employees to enhance their performance. They provide enthusiasm, passion, and conviction among employees (Asbari et al. 2020). The CEO at DigiFreight can also think innovatively to enhance performance and reduce costs to inspire role ownership and provide success.

Servant leadership is another leadership style suited to the achievement of the company’s goals and objectives. This type of leadership focuses on the well-being of the employees by putting their needs and satisfaction ahead. The leaders serve better by serving others and empowering the present employees. Through the same, the leaders can develop a positive and collaborative environment for better productivity and more motivation (Purwanto et al. 2021). These leaders at DigiFreight understand the employees’ concerns, ideas, and requirements., Therefore, their inputs and contributions are highlighted. Thereby, the employees’ overall satisfaction and loyalty enhance, leading to greater loyalty and cost-effectiveness (Pawar et al. 2020). Therefore, through the same, DigiFreight can encourage innovation and decrease the input prices so that both growth along sustainability can be maintained for a long time.

Therefore, both leadership styles can adhere to the various objectives of the company mentioned in the topic as determined by the CEO. If such styles are effectively implemented, there is a high possibility of motivation for the employees, better growth, and lower input costs (Song et al. 2022). The same can develop a collaborative environment and the performance of the overall company can be enhanced. DigiFreight can be more positive and dynamic through the same.

2 (b) How the 2 leadership styles have an impact on decision-making at DigiFreight

The mentioned leadership styles are quite impactful in the decision fabrication processes of the company DigiFreight. They are mentioned below as follows:

The transformational leadership at digiFreight aids in motivating and inspiring the employees providing a compelling mission and inspiring them to pursue innovative means. In relation to decision formulation, transformational leadership promotes the participation of employees so that more values can be provided. A collaborative environment is developed where ideas are effectively exchanged and diverse perspectives are embraced (Liao et al. 2021). It also promotes active participation of the employees or formulation of decision-making. It also promotes “ownership of decisions” and autonomy. Therefore, better teamwork and “a sense of responsibility” are induced. The employees become more accountable and responsible. Therefore, the decision formulation process is made much better.

Servant leadership prioritizes the needs of the employees as well. In the context of decision formulation, this leadership style is also quite impactful for the company DigiFreight. These leaders actively seek as well as value different inputs from the employees since they are mostly associated with the operational challenges of the company. If the company employs the same, it can create a safe space for the employees (Budur, 2020). It can result in the development of a more inclusive workforce. Therefore, the employees can be more motivated and productive, resulting in the realization of the goals of the company.

Therefore, it has been viewed that both transformational and servant leadership styles are suitable for the company. Both of these styles can have a positive impact on the decision fabrication of DigiFreight. While transformational leaders can involve the employees in the decision-making, servant leadership can prioritize their overall development and growth. Their inputs can be considered while formulating the major decisions (Islam et al. 2021). Therefore, more empathy and inclusivity can be promoted. Therefore an environment of trust, empowerment, and consideration can be created.

2 (c) Factors influencing the development of organizational culture and their importance for Digifreight

Based on “Deal and Kennedy’s model of Organizational Culture”, there are 4 different factors that influence the development of organizational culture. They are mentioned in the association with digiFreight below as follows:

Business environment: The business environment, along with the market conditions, trends, available competitions, and others impact the organizational cultures. For the company DigiFreight, operating in a fast-moving and complex freight industry, to opt for growth, more innovation and adaptability are required. These can shape the operating conditions and decisions formulated by DigiFreight.

Values: These refer to the main beliefs and principles that guide the decisions of the company. At DigiFreight, it is essential since the employees can be better motivated through the same (Bavik, 2020). Here, a better culture can be fostered since the core values of integrity, accountability, and teamwork can be promoted here. Through the same, sustainable development can be provided to the company.

Heroes: They are the main role models and exemplary individuals who embody the cultures of the company. In the company Digi Freight, the leaders can recognize and celebrate the employees who depict exemplary performance and innovation (Arumi et al. 2019). Through the same, the leaders can motivate the employees in a more effective way. Therefore, their overall productivity and efficiency can be made better.

Figure 7: “Deal and Kennedy’s Model of Organizational Culture”

(Source: Arumi et al. 2019)

Rituals: These refer to the routine behavior, cultures, and ceremonies that reinforce the organizational culture. For DigiFreight, celebrating and developing such practices, also known as “rituals” promote better collaboration, employee recognition, and better learning. In this context, the company can practice “regular team-building”, performances, and knowledge sharing. They promote a better culture, better collaboration, and more knowledge sharing. As a result, the company can achieve its goals as determined by its CEO.

These factors as mentioned in the “Deal and Kennedy’s Organizational Culture” are essential to bring overall success and develop competitive advantage. By being associated with the business environment, the company can adapt to the industry changes and gather better opportunities for growth. The organization’s employees can also recognize the heroes so that better excellence and improvements are brought about leading to more productivity and overall growth.

2 (d) i) How leadership styles aid DHL in pursuing aggressive revenue growth

Leadership styles play an essential role in DHL’s aim of gaining aggressive revenue development. Transformational leadership is instrumental since it encourages and motivates employees to be more effective by being innovative and adaptive (Bagga et al. 2023). It enables the company to think “out of the box” and take calculated risks to seek opportunities for revenue development (Bridges, 2020). In addition, in servant leadership the needs and growth of the employees are given topmost priority, thereby fostering more trust and collaboration among all.

It has been viewed that both leadership styles prioritize employees in terms of change, innovation, well-being, and others. In such cases, DHL can think more creatively and embrace the required change in terms of the changing trends of the logistics industry. Both leadership styles aid the employees in aligning with their organizational missions so that better decision-making and growth can be gained.

ii) How the leadership styles aid Maersk when the company Perseus major cost-cutting exercise

The global company Maersk requires cost-cutting so that it can increase its operational efficiency and compete in the market. Furthermore, through the same, the company also meets the economic challenges of demand fluctuations, better financial stability, and investments along with innovations. In pursuing so, leadership styles such as transformational and servant leadership are extremely helpful for Maersk, especially for cost-cutting. Through transformational leadership, the employees are inspired and motivated to embrace change and adapt better so that cost-saving ideas can be generated (Odunsi, 2021). Moreover, they can also develop better operational means. Servant leadership empowers the employees so that different and dynamic inputs can be provided by them so that cost-saving initiatives can be better upheld. Maersk, therefore, can align the company’s motives with the employee’s expertise and develop a supportive environment. It aids in the better functioning of the company with lesser input costs so that overall growth can be obtained.

2 (e) Evaluate the importance of organizational culture on the overall performance of DHL and Maersk

The organizational culture plays a crucial role in the determination of the entire performance of the mentioned companies DHL and Maersk. They are elucidated below as follows:

Better employee engagement: A positive and collaborative culture as determined by “Deal and Kennedy’s model of Organizational Culture” leads to empowerment and more engagement of the employees with the company (Jameaba, 2023). It increases productivity and loyalty to achieve the company’s goals

More innovation: With the proper understanding of factors such as organizational environment, rituals, heroes, and practices, the companies DHL and Maersk become more competitive since they remain aware of the changing trends and customer requirements.

Better collaboration and teamwork: Both transformational and servant leadership promote employee betterment. The employees of DHL and Maersk, are productive, provide better inputs, collaborate more with other teams, and function effectively. Through the same, optimum performance can be achieved.

Better Decision Formulation: The well-defined culture within both DHL and Maersk, provides the company the ability to perform better and make effective decisions regarding the challenges faced (Karenga, 2021). Therefore, the objectives and values are better realized.

Adaptability: The resilient cultures of both DHL and Maersk enable the companies to face the extreme rivalry in the market and operate efficiently by making essential decisions in different fields.

Task 1 Section 3

3 (a) Motivational strategy supporting DigiFrieght’s stated goals

To attain the desired goals of better motivation, more growth, and lesser input costs, a comprehensive motivational strategy must be formulated and implemented. These strategies include both “Porter’s and Lawler’s Expectancy Theory” along with intrinsic and extrinsic motivational approaches so that appropriate motivational means, suited to all the employees can be provided. They are mentioned below for digiFreight as follows:

“Porter’s and Lawler’s Expectancy Theory”: States that an individual is motivated through three different factors. These factors include expectancy, instrumentality, and valence (Ryan and Deci, 2020). For the mentioned company it can be helpful since it believes:

Expectancy: The motivational strategy here must focus on the belief that the employee’s individual, as well as collective efforts, lead to improved performance for the whole of the organization.

Instrumentality: The employees must believe that their performance will be properly recognized and provided with the most suitable rewards.

Valence: The employees must also have faith in the company that the offered values are worthy of their performance and are quite desirable.

“Intrinsic and extrinsic Motivation”: The motivational strategies that are formulated for the company DigiFreight are both intrinsic and extrinsic as well. In other words, they must provide internal drive along with enjoyment. It is because the employees perform meaningful tasks and are able to achieve personal growth (Zboja et al., 2020). In addition, these employees must also receive external rewards and prizes such as bonuses, promotions, recognition, and others. Therefore, the formulated strategy must provide overall internal and external satisfaction to the employees by providing them with opportunities for growth in their personal and professional lives.

Figure 8: “Intrinsic and Extrinsic Motivation”

(Source: Zboja et al., 2020)

Certain motivational incentives can be suggested for the company in question. They are stated below as follows:

“Performance-related bonuses”: implementation of the same can lead to individual and team development since encouragement can be provided to perform better. It fosters a culture of meritocracy

“Employee Recognition programs”: through the same the exceptional performances of the employees can be recognized and rewarded. It develops a sense of pride and motivation. The employees, hereby are encouraged to provide better performance so that they can grow more.

Development opportunities: The employees must be provided with better opportunities to grow and develop. Through the same, they can develop their skills and invest in gaining better success. Therefore, they can invest in their overall personal and professional development.

“Work-life Balance”: It is another means through which the employees at DigiFreight can perform better and be motivated to increase their productivity. Through the same, proper recreation can be made available to them so that both personal and professional lives can be administered in an effective manner. It can increase job satisfaction and loyalty.

Better team development: Various events can be organized by the company DigfiFreight so that teamwork can be developed. Through the same, more collaboration and participation among employees can be developed. It leads to a positive culture and in turn, better motivation and performance.

Providing empowerment to employees: The employees must be provided more autonomy within the company. They must be involved in the decision fabrication processes. Through the same, they can provide their innovative inputs and become more influential to the company by contributing significantly (Kircaburun et al. 2020). These types of involvement provide more chances of inclusion and more empowerment for the employees associated with the company. More responsibility can be ascertained to the employees in this manner.

Better training and development: The training and development programs initiated by the company DigiFreight can enable the employees both new and the existing ones to enhance their skills and understand their tasks in an improved manner. As a result, skill sharing and development can be facilitated.

“Meeting different personalities”: It is another method through which the employees in DigiFreight can be made more motivated and inspired to contribute efficiently to the overall growth of the organization. The company must understand that not all employees are the same and as such some are driven by extensive or financial rewards like bonuses, promotions, and others, while some are motivated by personal growth.

The employees who benefit from financial rewards must be identified and provided with recognition, prizes, bonuses, and others. The other employees that benefit from personal development must be provided with the desired opportunities. Therefore, an overall positive work environment must be generated where creativity and autonomy are supported along with financial benefits and rewards. Furthermore, constructive feedback and discussions are also helpful for individual and team development within the companies, and as such DigiFreight can avail of the same to motivate its workforce.

3 (b) Suitable leadership and management approach to administer performance and improvement.

In the context of leadership and management which are the most suitable for digiFreight, the Democratic leadership and “Total quality Management” or TQM will be the most effective.

Democratic leadership ensures that all the employees, along with the leaders have a proper say in the decision-making and providing input. Therefore, a collaborative and positive work culture is generated where the employees feel heard and empowered. Through alignment of the organizational goals with the employees’ motivation and inputs, the development of the entire organization is determined. The main advantages of the same include the following:

• The involvement of employees in decision fabrication aids in a more committed approach toward achieving the goals. Therefore, the performance targets are better achieved.
• There is more creativity and innovative sense among the employees using which they can promote better ideas and suggestions.
• This type of leadership also provides better communication channels for everyone so that more trust and dependence can be made available among all.

However, this type of leadership has certain disadvantages associated with them as well. They include the following:

• This type of leadership often results in conflicts and disagreements among the employees of the company since innovative ideas often clash.
• Since diverse perspectives are to be considered, it is often time-consuming and therefore, challenging.

In terms of management, “Total Quality Management” or TQM can be considered. It is an approach that emphasizes regular improvements, more focus on customer service, and employee improvement. Here the processes are systematically analyzed and activities are undertaken in such a manner so that wastes and defects are eradicated. Therefore, the costs are reduced and more productivity is found among the employees. As such it is extremely suitable for DigiFreight, based on the approaches mentioned in the previous section. It has certain specific advantages. They include the following as mentioned below:

• There is a continuous strive for improvement and better performance for the company.
• The wastes are effectively removed, thereby, productivity enhances.
• The employees are empowered to take responsibility for their work.
• The employees also have a say in decision fabrication. Therefore, it provides them with overall satisfaction.

However, this approach of management also possesses certain disadvantages. They are mentioned below as follows:

• It is quite challenging to implement since not all the employees are equally participative
• It requires continuous training, development programs, and improvement tracing. Therefore, it is time and cost-consuming

Certain recommendations can be formulated for better performance administration. They include the following:

Goal determination: The employees must be motivated to achieve certain goals. These must be aligned with the organization’s objectives.

Training: The employees must be regularly trained. It enhances their skills and knowledge. Therefore, they can achieve personal growth

Continuous Feedback: There must be a proper exchange of feedback so that the faults can be identified and solved. It enables better performance

Provision of rewards: It is a motivational form where the employees are encouraged to perform better. It makes them more loyal to the company.

The utilization of democratic leadership and TQM are justified for DigiFreight since it aligns the company’s objectives of employee motivation and overall growth with the employees’ performances. This form of leadership provides better engagement and thereby creates more creativity. On the other hand, TQM ensures that the processes are optimized and higher quality is ensured. Therefore, by improving all aspects of service provision and employee participation, the overall performance of the company is made better.

Conclusion

As viewed from the above discussion, employees form the core of the organization and as such must be motivated so that the overall performance can be improved. Therefore, the most suitable leadership and management approaches include transformational and servant leadership which put employees before everything else. In terms of management as well, the culture and SCT are the most suitable. Comparing the mentioned company with two other global companies DHL and Maersk, the applicability and suitability are judged. Finally, the motivational strategies and the most suitable approaches are found. In addition, recommendations and justifications are also provided to ensure that the company applies the most suitable motivational theory to achieve the goals determined by its CEO.

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