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New Trends In Leadership and Management

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 NEW TRENDS IN
LEADERSHIP AND
MANAGEMENT
Arikkök, Merih LBI15S

KAJAANI UNIVERSITY OF APPLIED SCIENCES

NEW TRENDS IN LEADERSHIP AND MANAGEMENT- 2017
[Teacher: Pekka Tervonen]
 1

Table of Contents
1 INTRODUCTION .............................................................................................................1

2 MANAGEMENT LEVELS AND TYPES ...........................................................................2

2.1 Management by objectives .......................................................................................2

2.2 Top level management .............................................................................................3

2.3 Mid-Level Management ............................................................................................4

2.4 Frontline Management..............................................................................................4

3 HIERARCHY, FLAT& MATRIX STRUCTURE .................................................................5

3.1 Hierarchical organization structure ...........................................................................5

3.2 Flat organization structure ........................................................................................6

3.3 Matrix structure ........................................................................................................7

4 MANAGEMENT MODELS ...............................................................................................8

4.1 Classical management theory ..................................................................................8

4.2 Human relations theory ..........................................................................................10

4.3 Neo-human relations theory ...................................................................................10

4.4 Systems theory ......................................................................................................11

5 MANAGING DIFFERENT GENERATIONS ...................................................................12

5.1 The X generation ....................................................................................................13

5.2 The Y generation ....................................................................................................14

5.3 How to manage different generations in an organization ........................................16

6 LEADERSHIP STYLES .................................................................................................17

6.1 Lewin's leadership styles framework ......................................................................17

6.2 Path-Goal Theory ...................................................................................................19

6.3 Flamholtz and Randles’s Leadership Style Matrix ..................................................21

6.4 Transformational Leadership ..................................................................................22

7 MGM GRAND’S REMARKABLE EMPLOYEE ENGAGEMENT .....................................23

8 CONCLUSION ..............................................................................................................25

9 REFERENCES ..............................................................................................................27
 1

1 INTRODUCTION
Working life becomes more and more complex every day and it
takes a good part of our lives considering we spend at least 8
hours a day, 5 days a week, working. Organizations have
management, and most of us are working for a boss, manager or a
supervisor. Some of us work in industrial factories, some of us in
small startup companies, and some in SMEs. While the
management styles differ, all of them has a management that is
based on a theory.

In this article, you will learn about the most common and classic
management and leadership style and see how they evolved over
time. While reading, you will probably stop and think “I know this”,
“That’s my company!” and likely you’ll be right. You will learn about
the underlying reasons why companies have organizational
structures, what are the benefits of different management styles,
what kind of leadership styles produce what results. Most of the
subjects discussed in this article will be familiar to you from your
own organization, school books or news.

There are real-life examples from people and companies who have
used modern management styles and there is an interesting part
from the MGM case study where the reader can see the impact of
management and leadership styles in an organization’s success.

It is essential to be aware of the new management and leadership

trends in a world that is changing constantly, and this article is a
good start to spark the reader’s interest on the subject.
 2

2 MANAGEMENT LEVELS AND TYPES

Management levels in an enterprise can be described as a
pyramid where they are in hierarchical order. In a typical
enterprise, there are layers of management which are
interconnected. Think about a pyramid where the top management
is at the top, above the entire organization. Then comes the
middle-level management, located in between top and lower level
management acting as a bridge and then comes the frontline
management who perform tasks, coach the employees and ensure
daily objectives are met.

Top Management
(Chairman, CEO,
Board of
Directors)

Middle Management (Dept.

Heads, Deputy Managers)

Lower Management (Line Managers, Supervisors,

Inspectors, Section Officers)

Figure 1. (Almuete, 2014)

2.1 Management by objectives

Management by objectives (MBO), also known as management by
results (MBR), was first popularized by Peter Drucker in his 1954
book The Practice of Management. Management by objectives is
the process of defining specific objectives within an organization
that management can convey to organization members, then
deciding on how to achieve each objective in sequence. This
process allows managers to take work that needs to be done one
step at a time to allow for a calm, yet productive work environment
(En.wikipedia.org, 2017).

There are several main points when applying MBO. The objectives
set within the MBO are decided with the employees and they
 3

should be achievable. There is regular feedback on the progress

and personal growth is always encouraged. Being unable to reach
the objectives is not punished but is an opportunity for more
coaching. In order for MBO to be successful as a tool, it should
receive full support and adoption from the top management, like
lean management. The objectives are based on the SMART
concept which is explained in the figure below.

Specific Measurable Acceptable Realistic Time-bound

Figure 2. Drucker’s SMART concept.

Drucker thought that the managers lost their focus on their

objectives as they deal with routine activities. MBO enables
enterprises to set attainable and measurable objectives where
each member knows what to do, how to do and the timeframe.
MBO helps enterprises render their objectives along the way and
eliminate the ones that are no longer needed. You can see
thousands of companies writing broad mission statements that do
not state anything clear however in MBO every objective has to be
well defined and attainable. It ensures the company stays on the
right path towards its objectives. MBO is employed by many
companies around the globe including the HP which included their
"HP Way".

2.2 Top level management

Top level management includes board of directors and chief
executive (CEO) or a managing director. The top management has
the ultimate authority, planning and managing the functions of an
enterprise. It sets the objectives and policies of the enterprise and
chooses the middle-level managers such as department heads. It
provides guidance and direction towards the company's future.
 4

Top level managers should have a vast experience, preferably

across a wide range of functions. Top management members are
usually industry experts and often have a close association with
the businesses they operate in. They tend to be charismatic,
strong communicators, confident, comfortable with taking risks and
highly accountable. The main role of the top-level managers is to
overlook the organization as a whole and define the overall
strategy with their vision and executive power. Corporate policies,
financial investments, corporate alliances, briefing stakeholders
and high-risk decision-making actions. This makes the top-level
management roles high stress, high influence positions.

2.3 Mid-Level Management

Middle management is the intermediate management level
accountable to top management and responsible for leading lower
level managers (Courses.lumenlearning.com, 2017). Moving on
from the three-tier management model, middle management works
a bridge between the top and lower level management. Middle-
level management reports to top management and provides
guidance to lower level managers and makes them perform better.
General managers, branch managers, and department managers
typically belong to the middle-level management group. They do
not foresee the organization’s direction but focus more on
organizational and directional matters. Middle-level management
executes the organizational plan in line with the organization's
policies and objectives set by the top management. They
communicate the plans and objectives to the lower level managers
and ensure they are on the right path. Middle-level managers
provide essential operational information to top management as
they are more involved in day to day operations of the firm.

2.4 Frontline Management

Frontline management, also known as lower level management,
operative level management consists of supervisors, section
officers. It could be said that frontline management is involved
more in the controlling function of management where it manages
the direction of operative employees. Frontline management is the
backbone of an organization as its members, supervisors,
 5

department managers all ensure the business runs smoothly. As

frontline managers are directly involved with operative employees,
they need to have strong communication skills and able to manage
relationships in a perfect way. A typical, successful frontline
manager will have outstanding problem-solving skills and ability to
take quick actions while taking initiative. People management skills
are of paramount importance, if the employees are not happy then
they can't make their customers happy.

3 HIERARCHY, FLAT& MATRIX STRUCTURE

Generally, there are three types of organizational structures in
enterprises. Hierarchical, flat and matrix structures are employed in
organizations to oversee and manage the operations and guide
towards the future.

3.1 Hierarchical organization structure

In a hierarchical organization, the employees are positioned at
different levels within the firm and each level is above or below
another. Each level has employees working below and controlled
by their respective units/ levels. A tall hierarchical organization will
often have many levels within while a flat hierarchical organization
will have fewer. The chain of command is similar to that of the
army where it works like a pyramid. In a hierarchical structure each
player clearly knows its roles and responsibilities within the
organization and the relationship with other employees are clearly
defined. Hierarchical organizations are narrow at its tallest point
and get wider as it goes down towards lower level management.
The decisions are usually centralized, taken by the top-level
management, namely the executives. In the 1900s the hierarchical
structure was very popular and effective as this enables the
company to ensure chain of command works. It was also very easy
to adopt by organizations and employees since the workforce just
got out of the army following world wars. The people who acted as
commanders in the war quickly took their places in the
management levels while the employees easily adapted to this
structure is already used to the army style management. In our
world today, more and more organizations reduce the size of their
structure as the globalization and technology advance.
 6

Chief
Executive

Manager Manager

Assistant Assistant
Manager Manager

Employee Employee Employee Employee

Figure 3. Hierarchical organization structure.

There are of course advantages and disadvantages of hierarchical

organizations. As the authority and responsibility are clearly
defined, this makes it very efficient to manage large organizations
however this could slow down the response mechanism towards
changing needs in the market. The promotion path is pretty clear,
so this increases employee motivation and retention. On the other
hand, the hierarchical structure can prevent direct communication
within the organization, especially horizontally.

3.2 Flat organization structure

Unlike the tall hierarchical organization, the flat organization has
fewer layers or just one layer. In a flat organization, the chain of
command is vertically shorter but the number of employees each
manager is responsible for is larger. If a manager has a lot of
employees reporting to them then their span of control will be
wider. The lesser reporting employees mean narrower span of
control. The flat organizational structure is usually used by small
organizations.

Flat organizational structures allow for better communication

between units and increases interaction between employees from
different layers by enforcing team spirit. There are less
bureaucracy and decision-making is easier compared to the
hierarchical structure model. It could be also cost-effective since
there are less managers in this model. On the other hand, it may
prove difficult for managers to oversee daily operations if their
 7

span of control becomes too wide as a result of the higher

numbers of employees reporting to them. In this model, employees
have more than one manager and this may become confusing for
them.

Director

Manager Manager

Employee Employee Employee Employee Employee Employee

Figure 4. Flat organization structure.

Flat structures work well for small businesses or those with a small
number of job roles. However, a business with a flat structure
needs to ensure that each manager's span of control does not
become too wide so that they can manage their direct employees
effectively (Learnmanagement2.com, 2017).

3.3 Matrix structure

In a matrix structure, the employees are grouped based on what
they do for the company, which project they work on. In this model,
managers will be responsible for the project and the employees
who work on the project. It allows the organization to create
departments/ teams based on project or skills. Employees can
work on different projects at the same time and report to each
project's manager separately. Teams/ sections in matrix structure
usually exist for the duration of the project. National teams are a
good example of matrix structures where different players from
different teams come together for a specific project (European
championships), report to the national team coach and then go
back to their regular teams, report to their regular coaches.
 8

Matrix organization and flat organization are similar to each other

as they both eliminate the hierarchy in the organization. In both
structures interdepartmental communication is easier for the
employees. It helps the organization benefit from employees with
different background& skills and gathers them for a project.

There are a number of different organizational structures each with

their advantages and disadvantages. The most appropriate
structure will depend on the size of the business and the type of
business.

4 MANAGEMENT MODELS
Management takes place within a structured organizational setting
with prescribed roles. It is directed towards the achievement of
aims and objectives through influencing the efforts of others
(Health Knowledge, 2017).

4.1 Classical management theory

Scientific management theory, also called classical management
theory, entered the mainstream in the early 1900s, with an
emphasis on increasing worker productivity. Developed by
Frederick Taylor, the classical theory of management advocated a
scientific study of tasks and the workers responsible for them.
Although its goal was providing workers the tools necessary for
maximizing their efficiency and output, it is also criticized for
creating an "assembly-line" atmosphere, where employees do only
menial jobs (Terry, 2017).

Classical management theory is old fashioned for today however

this doesn’t mean it’s not going to be useful. It does not take into
account social needs or job satisfaction, but instead advocates a
specialization of labor, centralized leadership and decision-making,
and profit maximization belief that workers only have physical and
economic needs. Classical management theory is based on four
main principles. The management should set a standard method
for performing each task. Employees should be chosen based on
their job-related skills and abilities. Work should be planned to
eliminate interruptions and salary incentives should be used as a
tool to increase output. It has a hierarchical structure where
 9

organizations are divided into three layers of management. Top

management which consists of a board of directors and
executives, middle management and frontline manager such as
supervisors who oversee daily operations. The clear organizational
hierarchy is an advantage as each management unit has its own
objectives and responsibilities.

Classical management theory has a division of labor approach

where projects are broken into smaller tasks and this makes it
easier for the employees to complete. Tasks and responsibilities
are clearly defined which allows the employees to specialize in one
field. Dividing tasks into smaller tasks makes classical
management theory a tool that increases productivity and
efficiency in the organization as employees can focus on one thing
instead of having to multitask. This is an opportunity for small to
medium size business hoping to increase production without
straining their budgets.

In classic management theory, employees should be motivated by

monetary incentives. This is based on the belief that employees
will be more productive if harder work is financially rewarded.
Management groups can use this tool as a way to increase
production, efficiency, and profits.

The autocratic leadership model lies at the heart of classical

management theory where a single leader or the top management
makes the decisions and then they are communicated down
through the organizational pyramid. This style is useful when there
is a need to make quick decisions. This kind of thinking will be
useful in small organizations during the growth phase.

The classical management theory has its own strengths even

though it is not used much nowadays. It provides a clear structure
for management and operations and division of labor makes tasks
easier to accomplish for the employees. Implementing the classical
management theory can show a rapid increase in production
numbers but it ignores the importance of human relations which
kills creativity. The theory considers employees as programmed
machines ignoring facts such as job satisfaction, motivation and
personal needs which are essential in today's world. This theory
 10

can work well in factories that do serial production where

production numbers are everything. It worked well with generation
X however it will not be effective on millennials.

4.2 Human relations theory

The human relations theory of management began development in
the early 1920's during the industrial revolution. At that time,
productivity was the focus of business. Professor Elton Mayo began
his experiments (the Hawthorne Studies), to prove the importance of
people for productivity - not machines (Perry, 2017).

Unlike the classical management theory, human relations theory of

management has humans at its core. It believes the fact that if
employees receive special attention and feel valued, they will be more
motivated to be productive and produce better results. It creates
consciousness for the employees and emphasizes meaningful work
by means of job rotation, design and enrichment. The employees will
have less control over the management and people are taken as
individuals with full respect. There are advantages and disadvantages
of human relations management. It considers employees' well-being
and thought and shows appreciation for their work. It promotes
healthy relationships between employees and managers however it
may cause some difficulties since it is often hard to predict human
behavior.

4.3 Neo-human relations theory

Until the end of World War Two organizations were managed
according to the classical management theory which mainly focused
on production numbers and efficient utilization of workers as if they
were machinery. Neo-human relations theory emerged in 1950s as a
response to classical management which ignored the social needs of
the employees. Organizations realized that special attention
motivated employees and improved their contribution to overall
success.
 11

Elton Mayo is considered as the founder of the Human Relations

Theory which was born from the results of the Hawthorne Experiment.
In 1920s there was unrest in the Hawthorne plants in Chicago which
employed 30000 workers even though the plant offered perks such as
pensions, sickness benefits etc. Elton Mayo and his team began their
research into changing working conditions. They performed
experiments on the employees by testing the effects of light exposure,
break durations and working hours on the employees. The results
were interesting, lights, breaks regardless of their duration increased
productivity.

The outcome of the Hawthorne research saw that special attention to

employees improves performance. The people were more motivated
to succeed as they felt their voices heard.

Elton Mayo concluded that the needs of workers were often based on
sentiment (belonging to a group and thus having a sense of value)
and that this could lead to conflicts with managers, who mainly
focused on cost reduction and efficiency (Mulder, 2017). Individuals
must be seen as a group, salary and working conditions are less
important for employees. The management should take employees'
social needs as important. In this theory, the meaning of labor
motivation shifts from monetary incentives to social needs'
satisfaction. The mechanical perspective leaves its place to people-
oriented perspective which is still widely used in organizations today.

Humans are complex, and it is the managers' duty to identify every

employees' personal needs and take an appropriate approach.

4.4 Systems theory

Systems theory is an interdisciplinary theory about the nature of
complex systems in nature, society, and science, and is a framework
by which one can investigate and/or describe any group of objects
that work together to produce some result. This could be a single
organism, any organization or society, or any electro-mechanical or
informational artifact (Environment-ecology.com, 2017).

Systems theory is one of the important theories in management which

was proposed in the 1940s by the biologist Ludwig von Bertalanffy
and it was furthered by Ross Ashby in 1964. It provides an approach
 12

to understanding, analyzing and talking about organizations. Systems

theory takes an organization as an organism made up of subsystems
that should work together in harmony for the entire system to function.

Systems approach increases an organization's adaptability to

changes as it takes the organization as a whole. Decisions made in
the systems approach consider both macro and microenvironments. It
focuses on individual goals and the overall goals of an organization.
Given the advantages, there are also a few disadvantages of the
systems approach. Systems approach may not always be practical
and could cause delays in the decision-making process. It is also a
disadvantage that the nature of the inter-dependent relationships is
not clearly defined. If the definition is not well made, then it could lose
its benefits.

Systems approach is particularly suitable for large organizations with

complex and open systems.

5 MANAGING DIFFERENT GENERATIONS

Day by day, it gets harder for managers to manage their workforce
due to the generational differences. The difficulties often arise from
different mindsets and personalities of people born in different eras. It
is a challenging task to manage in a workplace where workers of
different age and generations work together.

It is essential for a manager to know the differences and expectations

of each generation and take advantage of this diversity. The key is to
create an environment where different generations work together in
harmony while benefiting from each other.

The key to effectively managing different generations in the same

environment lies under the following; Build collaborative relationships,
study employees, encourage cross-generation mentoring and similar
actions. These are the core values to promote for a healthy
workplace.

In this part we will discuss the X generation, Y generation which is

also called the millennials and how to manage them.
 13

5.1 The X generation

The X generation, born between 1965-1981 is sometimes called as
the lost generation as they had to experience a lot of daycare and
divorce. Its members are often known by high levels of skepticism,
selfishness while being the most educated generation so far. This
resulted in high level of cautious behavior than their parents. The X
generation tends to be informal in everything, clothing, relationships,
rules and so on. They embrace new technology quickly and they see
work-life balance vital. They want to have their own free time for
themselves, family and friends. They are result-oriented, cautious and
very pragmatic when it comes to doing things. They are efficient,
great for problem-solving with strong ability to think outside the box.

Generation X make great managers as well. They tend to shift into

leadership roles with experience and they can bring work-life balance
to the workplace environment.

The generation X are very valuable for the workplace as they are
often professional, and this is just the time they've gained enough
experience to step into the management world. The baby boomers
have already retired and mostly out of the workforce while the
millennials are just getting warmed up in the job market, generation X
is in prime condition with experience and years to work ahead.

So how to retain generation X employees and get the most out of

them? Generation X employees want to feel important and useful.
They want to make a difference in the work they do and do this
independently. Give them the ability to make an impact, let them have
a sense of pride in their work and that's their reason for motivation.
Most generation X members would like to work for a company who
has reputation and a clear vision for their business.

Retaining generation X employees are not too hard, surprisingly

monetary compensation does not play a big role though it is important
to provide a competitive pay. In addition to a good pay, bonuses could
be a great way to motivate them to go the extra mile. On the other
hand, as the company's reputation and vision are important for them,
it is important to have an appealing vision and mission for the
company.
 14

As said earlier, the generation X wants to make an impact in the work

they do, and they would like to do this independently. They want to be
trusted and challenged with new opportunities. It is always good to
give them clear, challenging goals and let them reach targets in their
own way.

5.2 The Y generation

Members of Generation Y (also known as Gen Y or Millennials) were
born in the 1980s and early 1990s, the loose definition that separates
them from the generation before them (Generation X) and the
generation that followed (Generation Z) (Kane, 2017). They assumed
to be the first generation in history who are expected to do worse than
the generation before.

In simple terms, Generation Y is the latest in a series of demographic

cohorts which have been given slightly odd names in a bid to define
them as a collective cultural group (BBC News, 2017).

Generation Y (Telus International, 2017).

Generation Y, the millennials have a few common characteristics.

They are into technology and use it to do their jobs betters. They've
embraced the smartphones, laptops, tablets, other gadgets and they
 15

are connected 24 hours a day. They prefer email/ chat

communication rather than face to face and choose online meetings
over in-class discussions. They prefer to have more spare time,
flexible working hours and are ready to trade high pay for it. They
adopt collective behavior, are team oriented and value teamwork.
Unlike the generation X, millennials expect feedback and guidance at
work. They expect to be mentored on reaching their goals and room
for personal development.

There is one common downside of the millennials which is that they

change jobs too often. They always look for something new better,
and they get bored easily. They stay in a workplace for 2-3 years on
average and shift to a place they think is better. In addition, they tend
to have high expectations which makes retaining them a challenge.

We will talk about managing the millennials, which make up a big

portion of the job market, but first, how to attract the millennials and
motivate them?

Millennials prefer to communicate via texts, emails and social media.

They won't read long emails, especially if the content doesn't interest
them. They will be more motivated and likely to stay in a place where
they have more flexibility and control over their daily workflow. They
expect feedback and recognition, so the organization should keep
them engaged by continuously acknowledging their work and showing
them, they care by actively providing comments. This will allow them
to feel they are important within the organization and they have a
purpose.

The millennials see the typical 9 to 5 days as a waste of time. They

value balance between work and spare time so offering flexible
working hours will likely keep them in the organization. This will
benefit the organization as well since offering telecommuting saves
time, money and office space.

Millennials are whole lot different than any other generation. They
love their jobs if they are interested and they will work very hard. In
order to manage this unique generations, managers should adopt a
 16

whole new view and be creative in finding ways to keep them

engaged.

5.3 How to manage different generations in an organization

One of today's biggest challenges is how to effectively manage
different people from different generations and have them work
together efficiently in an organization. In today's organizations there
are people from different generations with ages ranging between 18-
80. It is not uncommon to see a 22-year-old working next to a 60-
year-old employee on the same project and they are expected to work
in harmony. Both of these employees will have different styles,
expectations and views. The typical conflict arises from the fact that
older generations will see the millennials as technology addicts, too
ambitious and out of norms while the millennials see the older
generations stuck in the past, simply out of date. The key here is to
use the creativity of the millennials and combine it with the leadership
skills& experience of the older generations.

In a research from Robert Half on generational differences in the

workplace, phone interviews were conducted with CFOs, where
workplace differences among different generations, with respect to
key business attributes were examined. CFOs were asked: "In which
one of the following areas do you see the greatest differences among
your company's employees who are from different generations?"

The responses: 30% said "communication skills," 26% said "adapting

to change," 23% responded with "technical skills," 14% responded
with "cross-departmental collaboration," while 7% noted "no
differences." (Lipman, 2017).

These results should serve organizations and managers as a guide to

which points to focus on when it comes to managing different
generations in a large environment. In order to be able to notice the
differences between generations and come up with relevant
management style for each, managers could be trained on
generational differences. It is always better that the manager changes
to adapt instead of forcing the employees to change which will create
a hostile environment in the workplace.
 17

6 LEADERSHIP STYLES
In this part, we will discuss several leadership styles that are widely
adopted in the global organizations.

6.1 Lewin's leadership styles framework

Kurt Lewin (September 9, 1890 – February 12, 1947) was a German-
American psychologist, known as one of the modern pioneers of
social, organizational, and applied psychology in the United States
(Wikipedia.org, 2017).

The Lewin's Leadership Styles Framework dates back many years -

to the 1930's, in fact - but it is still relevant today because it divides
leadership styles up into three easy to remember groups. While these
groups might not necessarily capture all of the subtlety that is
contained within a given leader or manager, they do a good job of
highlighting the overall approach (Free-management-ebooks.com,
2017).

In 1939, Lewin and his team identified three leadership styles in terms
of decision making: Autocratic, democratic and laissez-faire. All three
will be introduced in the article.

Democratic
Autocratic
(Participative)
Leadership
Leadership

Laissez-faire
(Delegative)
Leadership

Figure 5. Lewin's Leadership Styles Framework

 18

Although it was founded in the 1930s, Lewin's leadership styles

framework is still relevant in today's world because it groups the
leadership styles under three different titles. According to Lewin, any
of these could be best approach for a given job. It is essential to pick
the right leadership style for the right task. It is up to the manager's
judgment which one to go with.

Autocratic leadership

Autocratic style leadership is when the leader makes decisions on

his/her own without discussing with others. In this style, the leader
thinks that his/ her decisions are ultimately correct and doesn't feel
the need to hear others' opinions on the matter. The leader sets the
objectives, gives the instructions and expects the job to be done. This
type of leadership style may work when the task does not require any
contribution during the decision-making process however there are
good and bad sides of it. It will be beneficial when managing a group
of inexperienced employees where more supervision is required
however it may create discontent among teams of experienced
members.

Democratic (Participative) leadership

Opposite of the autocratic leadership, in democratic leadership the

leader includes the people in the decision-making process although
this does not mean that the leader will not have the final word. In
democratic leadership, the leader acts along with the team and
encourage feedback and input from the team members. The leader
will drive brainstorming and the best course of action is selected,
together. This process is much more collaborative than the autocratic
style and increases the sense of belonging among the group as they
have a say in the decision making. This style of leadership may work
well with experienced teams who are used working independently
however could cause chaos in an environment where there is a team
of inexperienced members who are not able to perform on their own.

Laisse-faire (Delegative) leadership

Delegative style leadership allows the team members to take their

own decisions and run the task. In this style, leader's management
role is minimal. The leader monitors the progress and provide
 19

feedback while leaving the team to decide how to proceed. The

leader acts as a mentor providing guidance when needed and does
not get in the way. This style works well with people who know how to
do their thing and work well together. The team should always be
aware of the fact that they are still responsible for the end results and
they know when to ask for guidance otherwise it'd lead to a disaster.

All of three leadership styles are absolutely different from each other
and each style will work well if used for the right situation. A wrong
style-situation pair will result in failure. There is no need to pick a
leadership style and go with it all the time. As the situation and the
need changes, so does the leadership style.

Apple is today's one of most valuable and successful companies,

richer than some countries. It gained success, lost popularity and
regained its throne later.

Apple survived because Steve Jobs learned how to adapt. He

became a democratic/participative leader. Jobs started out as a
charismatic/laissez-faire leader, and Apple soared. Then he became
an autocratic leader, and Apple’s board of directors requested his
resignation. When he returned to Apple more than 10 years later,
Jobs combined several leadership styles and added
democratic/participative to his repertoire. He hired other experienced
leaders and entrusted them to excel. Jobs encouraged his lead
designer Jonathon Ive, and he mentored manufacturing expert Tim
Cook, now CEO. He let them make key decisions (Gill, 2014).

Google, Mayo Clinic, Amazon, Apple and most tech startups are
among the companies who adopted a democratic/ participative
leadership.

6.2 Path-Goal Theory

The path-goal theory, also known as the path-goal theory of leader
effectiveness or the path-goal model, is a leadership theory
developed by Robert House, an Ohio State University graduate, in
1971 and revised in 1996. The theory states that a leader's behavior
is contingent to the satisfaction, motivation and performance of his or
her subordinates. The revised version also argues that the leader
 20

engages in behaviors that complement subordinate's abilities and

compensate for deficiencies (En.wikipedia.org, 2017).

Path-goal theory promotes strong communication regarding goals and

direction and requires close relationship between the manager and
the team. In this theory, the leader's role is to provide guidance,
remove obstacles that prevent the team from reaching their objectives
and offer incentives for motivation.

Figure 6. (Northouse, 2015).

As seen above, the leader’s task is to set a clear path, clear the
obstacles and lead the team towards the goal.

According to this theory, there are four different roles a leader can
adopt depending on the situation in hand.

Achievement-oriented leadership

The achievement-oriented leadership style focuses on increasing the

performance by setting challenging objectives to encourage high
performance. The leader shows trust in the employees to encourage
them to exceed their own best. This style will suit well to sales teams.

Directive leadership

In this leadership style, the leader tells the team what is the objective,
what to do in order to reach the objective and how to do it. Everything
that may come up or required while towards the objective is well
defined and communicated. The job responsibilities are clear and
there is less need for idea input.

Participative leadership

In this leadership style the leader promotes team members'

contribution and often leaves the way the job is done to the team
members. The team is involved in the decision-making process and
has more autonomy. It is similar to the democratic leadership style.
 21

Supportive leadership

Supportive leadership behavior focuses on the mental wellbeing of

the team member. It focuses on reducing stress and promote the
happiness of the team. In this style, the leader is friendly and easy to
approach. This style is needed in areas where the team members
often face high levels of stress such as E.R. doctors, law enforcement
officers, hazardous materials workers etc.

Regardless of the leadership style adopted, the leader has one role in
path-goal theory which is to lead the team through the obstacles and
get them to the target. The leader does not have to pick one but can
combine several styles to suit their needs.

6.3 Flamholtz and Randles’s Leadership Style Matrix

Eric Flamholtz and Yvonne Randle developed the Leadership Style
Matrix and published it in their 2007 book, “Growing Pains.” The
Leadership Style Matrix is a simple and useful model that helps
choose the most effective leadership style for the given situation
(Finance Courses for Non-Finance Managers, Courses for Finance
Director, Risk Management Courses, Accountancy Training Courses,
2017).

3 4
Low Programmability/ Low Low Programmability/ High
Low

Job Autonomy Job Autonomy

Participative/Consultative Delegative/ Consensus

Programmability

1 2
High

High Programmability/ Low High Programmability/ High

Job Autonomy Job Autonomy

Autocratic/Benevolent Participative/ Consultative

Low High
 22

Autonomy
Figure 7. The Leadership Style Matrix

In this matrix, the vertical axis defines the programmability of the task.
Programmable task means that it requires instructions to complete
which involves procedures, steps etc. The less programmable the
task is, the more creative it is and the team can decide how to do it.
The horizontal axis defines the room for autonomy. It describes one's
capability for autonomy which is directly related to experience, skill,
capability and independence. This matrix is easy to use and highly
practical. If the given task must be done in a specific way, it means it
is highly programmable, so we move to the lower end of the vertical
axis. If the job can be done in many different ways depending on the
handling person, then we move up.

Coming to the horizontal axis, if the handling person prefers to and is

capable alone, we move to the right end of the axis. If the person is
less experienced and requires continuous guidance, then we move
left. The end result quadrant gives the two leadership styles likely to
succeed.

6.4 Transformational Leadership

Transformational leadership is a whole new approach to how leaders
manage their team members. It aims to create positive change in the
team members and turn them into leaders. It differs much from other
conventional leadership styles as it promotes motivation and
performance by touching the people's sense of identity and the
identity of the organization. It encourages others to challenge
themselves, achieve and embrace their work. Transformational
leadership typically sets clear goals with high expectations while
showing support and recognition towards the individual. It has an
inspirational side that encourages one to care about not only
themselves but the whole. A transformational leader will create a
vision, motivate the team to reach it and ensures the team reaches
the goal.

Transformational leadership has four main elements:

Individualized consideration, the level the leader guides the

individual and listens to his/her needs. The leader shows support and
 23

understanding and offers assistance. Shows recognition for

achievement and encourages self-development.

Intellectual stimulation, the level which the leader challenges the

individual to uncover full potential and promote creativity and take
risks. The leader focuses on the one who can work autonomously and
not afraid to take calculated risks. The individual’s creativity can be
uncovered this way.

Inspirational motivation, the leader inspires the individual by coming

up with an appealing idea. Leaders with inspirational motivation will
challenge the individual by competitive objectives, future
achievements, and stimulation. The employee should have a strong
sense of purpose in order to get motivated by inspirational motivation
style.

Idealized influence, where the leader poses as a role model with

high ethics, pride and trustworthiness. Inspirational motivation is
gaining popularity in today's world. Transformational leadership best
works in organizations that need a change which have old structures.
It is a great way to promote creativity, establishing mutual trues and
creating a workplace where there is empathy and understanding.

7 MGM GRAND’S REMARKABLE EMPLOYEE

ENGAGEMENT
The MGM Grand Las Vegas (formerly Marina and MGM-Marina) is a
hotel and casino located on the Las Vegas Strip in Paradise, Nevada.
The MGM Grand is the largest single hotel in the United States with
5,124 rooms. It is also the third-largest hotel complex in the world by
number of rooms and second-largest hotel resort complex in the
United States behind the combined The Venetian and The Palazzo.
When it opened in 1993, the MGM Grand was the largest hotel
complex in the world (En.wikipedia.org, 2017).

In the hospitality industry employee turnover is generally high and the

service quality is questionable. According to a case study on Chegg
Study, MGM Grand managed to attain one of the lowest turnover
rates in Las Vegas and has outperformed almost all its competitors
while increasing their revenues but this wasn't always the case. When
 24

the latter CEO Gamal Aziz took over MGM Grand in 001, the
customer service numbers were not good, and an employee survey
showed they received very little communication from their managers,
had no idea what events were taking place at the hotel and what to
offer guests. This had a huge impact on the hotel's business as
customer satisfaction and loyalty were low.

In order to turn this around, Aziz started to hold daily short meeting to
communicate the staff what was going on in the hotel. He also
expanded the hotel' managerial training program, MGM Grand
University and involved employees in decisions about its offerings.
MGM Grand started to recognize performing employees with
employee of the month luncheons, posters, star of the month board,
coffee chats with employees, mandatory employee recognition
training, appreciation dinners personally hosted by Aziz. The hotel
asks for feedback from previous employee recognition champions
and focus groups to ensure that they are aligned with the company's
business goals. In three years, profits doubled, and revenues
increased. Aziz says this is because of the hotel's 10000 employees
and how engaged they are. They want to give more and contribute.

Now, more than 90% of the MGM Grand employees say they are
satisfied with their jobs and their work has a special meaning.

"We will survive. Once we get through this, the employees will be the
ones who have gotten us through" says Aziz showing appreciation
and recognition towards employees once again.

MGM Grand is a great example to demonstrate how management

and leadership style can affect the way an organization performs. The
CEO Aziz brought in a new approach and managed to transform a
failing organization into a performing one simply by choosing the right
leadership style and management model. His way of management
shows hints of human relations theory where humans are in its core
and it proves the theory that if employees receive special attention
and feel valued, they will be more motivated to be productive and
produce better results. It appears that Aziz adopted a democratic
leadership model where he included the people in the decision-
making process even though he had the final word. He demonstrated
the elements of supportive leadership where he focused on the
 25

psychological well-being of the employees and care about the

happiness of the employees. He was friendly and easy to approach.
He encouraged his managers to be transformational leaders and
show individualized consideration and keep close relations with the
employees.

As a result, the employee turnover is one of the lowest among its

competitors and employees love the company they work for.

8 CONCLUSION
In this article, we tried to give an overview of the evolution of
management and leadership styles by touching on relevant theories
and their applications. The reader should have seen that the
leadership management style has a trend towards human capital.

As needs change, organizations adopt new techniques and styles to

match the day's needs. In the early 1900s, classical management
theory was used where the human workforce was seen as machinery
to maximize profits. Human relations theory was in development at
the same when classic management was in favor. At this stage, the
focus began shifting from human=machinery belief towards human in
the core of the organization.

Today it is even harder for organizations and managers to keep a

healthy, happy working environment since many different generations
have to work together, effectively, in the same team. Baby boomers,
generation X, millennials are still in the workforce and soon
generation Z will join the workforce. All these generations are very
different than each other and cause for potential conflict in the
workplace. While the baby boomers will soon disappear from the
employment market, generation Z will be active, and the situation will
get even more complex for managers.

As the needs of the humans change and our practices evolve,

organizations will begin shifting from autocratic leadership towards
democratic and delegative leadership styles where individual
satisfaction and success will be more important while preserving
social satisfaction. For the young generation, job satisfaction and
personal happiness is more important than pay or promotion which
 26

will force organizations to seek change in their management styles.

Most of the globally successful companies already apply modern
leadership styles, choose flat or matrix organizational structures and
offer incentives to motivate and retain employees.

In the future, teamwork, collaboration and collectivism will be more

important where there is more we and less me. As humans get more
and more important in the organizations, personalized career paths,
learning and development plans will be used more often. Employees
will have more control on how they perform their tasks and possible
the "office" concept will slowly disappear and turn into meeting
spaces where employees visit only when they need to see someone
in person. Interest for transformational leadership will increase where
individualized consideration, intellectual stimulation and inspirational
motivation will take the stage.

When we take a look at the past of management and leadership and

today, it has transformed tremendously and will continue to do so as
long as our needs change and organizations are willing to adapt.
 27

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