Leadership is the Essence of Fostering Good Governance
Like love, death, money, politics, and war, the subject of leadership is one that is continuously under discussion. Yet, despite all the attention given to leadership and its recognized importance, leadership still remains pretty much of an unexplained and confusing concept. There are innumerable theories that explain various facets of the leadership phenomena but unfortunately there is no comprehensive and general theory of leadership, which can make our overall task of understanding leadership easy and simple. One of the best ways in which we can enhance our understanding of leadership is to see how various students of the subject have defined leadership (Dessler 2001).
All enterprises and organizations, for profits and nonprofits, which conduct their business through genuine involvement and respect for those who work in them, achieve superior results. This is one of the critical aspects of management and leadership. Seeing that it happens is part of governance. The process of change constitutes organizational and personal development (Dessler 2001).
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In this essay we critically analyse whether leadership is the essence of fostering good governance and give theoretical proof whether it is true or not.
Leadership and management literature is full of definitions of leadership as almost everyone who seems to have studied the subject has formulated his / her own definition. This thought has been expressed by Stodgill (1974) who says, “There are almost as many definitions of leadership as there are persons who have attempted to define the concept “. Not only have writers on leadership developed many different definitions of leadership, they seem to have viewed leadership from many different perspectives. However a closer examination of the following definitions of leadership will reveal that there is a growing awareness that in leadership “influence or persuasion” which leads to “willing or motivated goal achievement behavior” is the key concept.
Leadership researchers have defined leadership in the following different ways:
* The creative and directive force of morale (Munson 1981).
* The process by which an agent induces a subordinate to behave in a desired manner (Bennis 1959).
* The presence of a particular influence relationship between two or more persons (Hollander & Julian 1969).
* Directing and coordinating the work of group members (Fielder 1967).
* An interpersonal relation in which others comply because they want to, not because they have to (Hogan et al. 1994).
* Transforming followers, creating visions of the goals that may be attained, and articulating for the followers the ways to attain those goals (Tichy & Devanna 1986).
Regardless of the definitions used, leadership must have a worthwhile purpose. Without a specific goal, leadership can degrade into an exercise in self-enrichment rather than mission accomplishment. For example, you should not aspire to be an executive vice president for the large salary. Rather, you should aspire for high office in order to accomplish specific goals for the improvement of the company, whether financially or otherwise (Pillai 1999).
Vision is the ability to have a clear sense of the future. It knows where you, as an organization, are going. Visionary leadership takes the concept of vision and couples it with leadership to produce a leader who inspires those following him to work toward the organizations goals. In essence, a visionary leader is the best kind of leader (Certo 2003).
Well first of all a leader emerges from a team. Therefore a good leader should know how to get the people who are under him to do what he wants to be done. The people should follow all of his instruction and do what the leader says passionately. This cannot be achieved overnight. This can be only achieved when the people who the leader is giving guidance have confidence and trust in him (Dessler 2001).
To get the confidence of his team mates the leader should teach them the value of team work and should get the team to work towards a common goal instead of trying to achieve different goals which may result in the organisation not achieving its goals. The leader should make the team feel unity and get every one to put the team first ahead of personal glory. The leader should know how to get a job accomplished, tell others how to do there jobs in order to accomplish it and should be able to inspire others to do better work. The leader should work closely with his team. So that he could get to know the strengths and the weakness of his team mates. So that he could manipulate there strengths and be able to get the maximum out of them there by he could get the team to do there work more effectively and efficiently.
The leader should be able to get the people to work to there potential. The leader should be able to get his people to work along with him, because if he can get them to work with him they will stick to it. If he scares them they will do the work as long as they are scared and after that they will not do their job properly. Most impotently the leader should be able to boost the self esteem of their personnel. If people believe in themselves they might be able to achieve there targets or goals there for the leader has a very vital role to play. Well at one time leadership was meant to be muscles but now it is not so. It is all about getting along with people. So now the leader should have the ability to pick the right people to work with him (Hill & Jones 2004).
True leadership relies on co-operation and feedback. To be a Leader you must cultivate the foundations of co-operation: The leader should make them available to subordinates. Today many managers build barriers to upward communication that it makes some one lower in the hierarchy looking up to the leader for help look ludicrous. Further, some leader foster a corporate culture where asking for help is considered a weakness or failure in the part of subordinate, which eventually lead to people covering up their gaps and invariably it is the organisation that suffers. Thus it is the responsible of the leader to show concern for the efforts and challenges faced by the team members and to create an environment where problems are recognised and analysed followed with an action to solve the problem. This not only helps the company to function smoothly it will motivate the employees to bring all the problems to managers and when there problems are solved it will result in the employees getting motivated. This will in turn increase the productivity of the organization (Weidman 2003).
The other important factor in leadership is that the leader should pay attention to details. Good leaders should delegate and empower others liberally, and pay attention to details. When every one seems distracted which is natural to happen a leader should be vigilant . He should get the others attention to the work they are supposed to be doing. He should also try to get the others to work long with him. Further the leader is supposed to look after the welfare of the team members .He should look after his team members he should bring the problems his team is facing too the attention of his superiors and he should get the problems resolved with out any delay (Weidman 2003).
It is the skill of the leader to look below the surface. As a leader you should be able look deeply and thoroughly and the leader should not avoid this simply because he might not like what he finds. A leader is always a good listener. The most valuable assets in an organisation are its people. Endeavours succeed or fail because of the people involved. The leader should be able to create an environment where the best, the competent and the most creative are attracted, retained and most impotently heard (Hill & Jones 2004).
In order to be effective leader, the leader should be also a simplifier. The leader should keep things simple. He should be able to cut through doubt, debate and arguments to offer a solution that everybody can understand. He should be able to articulate vivid, important goals and values, which are used to drive daily behaviours and choices among competing alternatives. You can not assume that every one has equal knowledge and talent. Some might have more knowledge than the rest and some might be more talented than the rest. There for it is the duty of the manager to explain others how to do there work in a simple way so that every one knows what to do more specifically when to do (Nelson & Quick 2000).
Leaders should behave with integrity and their decisions should be crisp and clear, not tentative or ambiguous. Thus he should convey an unwavering firmness and consistency in his actions. The leaders decision should be clear so that his team members know what is expected from them so that they may do there task properly. The leader should be firm other wise it will result in team members doing what ever they want to do when ever they want to do. The result is clarity of purpose, credibility of leadership and integrity in organisations (Peter 2004).
Governance processes are a legal necessity; but beyond that, they’re fundamental to the success of every organization. When governance processes are well designed, they coordinate every aspect of an organization: its people, equipment, and money work in concert toward the strategic objectives of the firm. However, when poorly designed, governance processes can be counterproductive (Colley et al. 2003).
Corporate governance is a process or a set of system and processes to ensure that a company is managed to suit the best interests of all. The systems that can ensure this may include structural and organizational matters. The stakeholders may be internal stakeholders (promoters, members, workmen and executives) and external stakeholders (shareholders, customers, lenders, dealers, venders, bankers, community, government and regulators) corporate governance is concerned with the establishment of a system whereby the directors are entrusted with responsibilities and duties in relation to the direction of corporate affairs. It is concerned with accountability of persons who are managing it towards the stakeholders. It is concerned with the morals, ethics, values, parameters, conduct and behavior of the company and its management(Daily et al. 2003).
The concept of corporate governance depends on total transparency, integrity and accountability of the management, which includes non-executive directors. It is a system of making management accountable to the shareholders for effective management of the companies, in the interests of the company and also with adequate concern for ethics and values. Corporate governance recognizes issues like maintaining continuity by succession planning, identifying opportunities, facing challenges and managing changes witting the business and allocation of resources towards the right priority(Daily et al. 2003).
Corporate Governance mainly consists of two elements i.e., A long-term relationship, which has to deal with checks and balances, incentives of managers and communications between management and investors. The second element is a transactional relationship involving matters relating to disclosure and authority(Sundaramurthy & Lewis 2003).
Corporate governance deals with laws, procedures, practices and implicit rules that determine a company’s stability to take managerial decision vies-avis its elements, particularly its shareholders, creditors, state and employees. Corporate governance refers to an economic, legal and institutional environment that allows companies to diversity, grow, restructure and exit and do every thing necessary to maximize long- term shareholder value(Colley et al. 2003).
Governance in relation to a business organization concern with the fundamental nature, purpose, integrity and identity of the organization and focuses primarily on the relevance, continuity and fiduciary aspects of the organization. It involves monitoring and overseeing strategic direction, socio-economic and cultural context, externalities and constituencies of the organization. Hence, corporate governance may be called as an umbrella term encompassing specific issues arising from interactions among senior management personnel, shareholders, and board of directors, other constituencies and the society at large. It deals with the exercise of power over the directions of enterprise, the supervision of executive actions, acceptance of a duty to be accountable and regulations of the affairs of the corporation(Farrar 2005).
The complex growth of modern business and emergence of corporate giants necessitate and require professionalised approach in governance I and management of corporations. The changing global corporate scenario also emphasizes that a good management owes not necessarily to effective organization culture but to a great extent to the mission, vision and proactive approach of the top management (Watson 2003).
An assumption in governance/strategic leadership is that the choice of various governance structure options and leaders could be associated with firm performance (Dalton et al., 1999). A key question driving this rationale is the extent to which a firm’s leadership can actually implement strategic change in order to enhance financial performance. As noted by Dalton and Kesner (1983: 736), “This assumption is questionable, particularly in large organizations. The sheer number of persons involved, the complexity of the organization, and the variety of interests both inside and outside the company represent potential constraints to successful change strategies.” Finkelstein and Hambrick (1996) agree noting that the combination of ambiguity, complexity, and competing stakeholder demands in the large firm may compromise decision-making discretion and effectiveness.
The suggested constraints on leaders’ ability to significantly impact firm outcomes are further emphasized in the literature on organizational crises and turnaround. A central theme is that organizational leaders exert a strong influence on organizational processes and outcomes primarily when the firm faces a crisis such as financial decline (Dalton et al., 1998). It is in this context that the need for effective leadership may become most apparent, as firms’ leaders attempt to return the organization to financial stability ( Daily, 1994).
Entrepreneurial firms may present an additional context where leadership/performance relationships are most salient. In contrast to the perspective that leadership is necessarily constrained in organizational settings, there are several aspects of entrepreneurial firms that facilitate leaders’ ability to affect change and performance. It has been observed, for example, that CEOs and directors are less constrained by organizational systems and structures in smaller firms (Meyer & Dean, 1990). The size of the firm is also a factor in managerial discretion; specifically, officers are more likely to be influential in smaller firms (Finkelstein & Hambrick, 1996).
Also, the smaller firm may facilitate power and more narrowly focus firms’ planning, core knowledge, and environmental scanning processes (Baysinger & Hoskisson, 1990).
In the following sections, we provide overviews of the areas in which an examination of governance/strategic leadership in entrepreneurial firms may be productive. For instance,
CEOs in these firms are often the individual who founded (or co-founded) the organization ( McConaughy et al.1998). We also include venture capitalists in our review. While many entrepreneurial firms will not have exposure to venture capitalists, for those that do, venture capitalists can significantly impact firm performance. Also, venture capitalists are a relevant stakeholder for the entrepreneurial firm as they often impose various forms of governance on firms in which they hold equity (e.g., Bruton et al. 1997). Consistent with the strategic leadership and governance literatures, then, we include overviews of CEOs/founders, CEO duality, TMT members, boards of directors, and venture capitalists.
To conclude it is quite evident from the above discussion that leadership is the essence of fostering goog governance.