This is a very internal view of the environment and Handy needs to consider the external environment when considering leader impact as that can be just as crucial a constraint on a leader as the internal environment. Within the umbrella of External Environment are customers, shareholders, competitors, financial markets, human resource markets, government agencies, supply of resources and cultural influences.
The list could go on, but these are all important things to consider as, for example, a leader who focuses his or her organisation on internal operations at the expense of registering environmental shifts, such as customer tastes, stands to lose out on opportunities. This is not to say, however, that the environment is a total constraint on leaders – Handy notes that “…any leader has to shape the environment as well as being shaped by it”. Leaders need to seek to set the stage and then act on it.
As we have seen, leadership isn’t an isolated process within organisations, and is very much linked with other factors, which affect organisations. Buchanan and Huczynski (1991:509) point out that “one of the key management and leadership issues for the 1990’s and beyond will concern the ability to manage in different countries and cultures”. While this is referring more to geographical culture, it also includes the types of culture organisations posses. Taking this a stage further, Finney and von Ginlow identify 5 values that a leader who is adaptable to various cultures needs: cognitive complexity, self-monitoring, boundary spanning, global orientation and geocentric values. Taking Self-monitoring, for example, they say that
The high self monitoring individual is one who, out of concern for the situational and interpersonal correctness of his or her social behaviour, is sensitive to the expression and self-presentation of those with whom social interaction is occurring and uses these cues as behavioural guidelines for his or her own self-presentation. In terms of development of corporate cultures, the example of Harold Geneen at ITT, shows us how important leadership is in impacting this area (Morgan 1997:113). Under Geneen’s twenty year reign, the company established a reputation as one of the fastest growing and most profitable American companies, albeit also one of the most corrupt and controversial.
Geneen’s approach motivated people through fear – this was obviously not a transformational leader, yet his leadership style had a huge impact on the company’s culture. His intimidating style was set up by Geneen from the very beginning of his tenure and ITT executives were expected to be company men and women on top of their job at all times. The idea that loyalty to the goals of the organisation should take precedence over loyalty to colleagues or other things was established as a key principle. This therefore developed something of a ‘cut and thrust’, which worked for them, but was different from other successful companies.
It is important to recognise, however, that leaders do not always have a total monopoly on the ability to create shared meaning or interests. The leader’s position of power may mean that they have an advantage in developing values and systems of behaviour, but others are also able to influence the process by acting as informal leaders or simply by acting as the people they are. Culture ultimately though, like the environment, can be influenced by leaders.
In conclusion then, we have seen what a leader is, identified the various ways of looking at leadership and seeing how leadership impacts on a few of the different areas of organisational life. Warren Bennis (1999:76) put forward an interesting point when he said the following What should be clear by now is that post-bureaucratic organisation requires a new kind of alliance between the leaders and the led. Today’s organisations are evolving into federations, networks, clusters, cross-functional teams, temporary systems, matrices….-almost anything but pyramids with their obsolete TOPdown leadership. The new leader will encourage healthy dissent and values those followers courageous enough to say no. It will go to the leader who exults in cultural differences and knows that diversity is the best hope for long-term survival and success.
While this may be slightly idealistic and may not suit every organisational situation, it does emphasise the point as to leader flexibility and consensus. We can see how the nature of leadership is ever evolving and styles of leadership must and will evolve with global changes. The true leaders of today provide an important, if not crucial, function in organisations and must surely increasingly do so in the future.
Dawson, S (1996) Analysing Organisations (NY, Palgrave)
Handy, C (1993) Understanding Organisations (London, Penguin)
Fiedler, F.E. (1967) A Theory of Leadership Effectiveness (NY, McGraw-Hill)
Mullins, L.J. (1996) Management and Organisational Behaviour 4th edn. (London, Pitman)