Professional Documents
Culture Documents
Lanre Jolaoso
74111287
Leadership and Management Theories - BS4S16
Caroline Ntara
17th October 2019.
Introduction
The Problem
Etisalat Nigeria in a bid to expand its network and further compete with
rivals in the industry had taken a loan of 1.2 billion US dollars from a
consortium of Nigerian banks in 2013. The Loans were taken in USD
because the cost of dollar currency debt at time was at about 7% as
against the Naira debt that was about 20%. (Adegbiyi, 2018) Having
paid about 42% percent of the loan value, the oil price crash and the
devaluation of the Naira that followed almost doubled the value of the
Naira to the dollar (Naira rate was 161 N/1 USD in 2013).
The 2015/2016 global crash in the price of crude oil caused a severe
shock to the Nigerian economy, reliant as it is on this commodity for
most of its foreign exchange earnings. The value of the Nigerian Naira is
intricately linked to crude oil revenues, and the relationship is
responsible for Nigeria’s strength and stability in high oil price markets
and its weakness and turbulence when the price of crude oil
declines. (Adegbiyi, 2018)
The devaluation now means Loan repayments are now more expensive
than budgeted. Loans that were taken when the Naira was below 200N
to the dollar are now to be repaid when the Naira to dollar conversion
ratio is over 320N.The company was unable to meet up with its
obligation and was unable to pay its numerous vendors and partners.
The loan was fully restructured in 2015 but EMTS defaulted on a
payment due in February 2017. When the Banks threatened to take over
the company, pushed for a debt to equity solution which the company
had no choice but to accept. Etisalat announced that the Banks had
exercised enforcement rights, requesting the transfer of 100% of the
EMTS shares to the appointed trustee of the Banks. (Adegbiyi, 2018)
The Solution
On the 4th of July 2017, Etisalat announced the dissolution of the former
board led by Hakeem Osagie who had served as the Chairman and
Matthew Wilshere who served as the CEO. They announced the
appointment of a new board led by Dr. Joseph Nnanna as Chairman,
Boye Olusanya as Chief Executive Officer and Funke Ighodaro as Chief
Financial Officer. These appointments were after a series of negotiations
and agreement by all stakeholders which included the associations of
Lenders, the Central Bank of Nigeria (CBN) and the telecoms regulator
Nigerian Communications Commissions (NCC). (Anon 2017Vanguard)
The new board had the task of reviving the fortunes of the company,
stopping the leakages and waste and preparing the company for future
investment and/or sale. They had an initial mandate of 1 year for the
quick turnaround of the company but were only able to achieve this 17
months later. These 17months was a key period for 9mobile because the
survival or collapse of the company at the time seems a real prospect.
The Leader
The company at the point of resumption released the profile of the new
board members and our focus is on Boye who is profiled here as found
on Vanguard newspaper Nigeria.
That is the foundation upon which the Great Man Theory was
established in the 19th century by proponents such as historian Thomas
Carlyle, who put forth the idea that the world’s history is nothing more
than a collection of biographies belonging to great men. (Villanova
University, 2019)
One of the main critics of the Great Man theory was Herbert Spencer,
Herbert was a philosopher, political theorist and sociologists and he
believed that the Great Man Theory was too primitive, childish and
unscientific. He believed Leaders are made environmentally and before
a great man can make society, society must have first made him and
turn him into who he is. Another criticism of the Great Man Theory is that
most of the traits are masculine and this presupposes that there are not
female born leaders. Putting this in Today’s context, the likes of Queen
Elizabeth, Margaret Thatcher, Hillary Clinton, Sirleaf Johnson, Oprah
Winfreh are not qualified to be leaders. (Juneja, 2015)
The most common characteristics in all the theories and those traits that
have withstood some logical checks are Intelligence, Self-confidence,
Determination, Integrity and Sociability. (Northouse 2013, p. 23)
The city of the kallipolis that Socrates discusses is an ideal city and
everything must work according to his plan. Socrates feels that the best
way to establish a just city would be to create a city that has three
classes of people. The three classes are the guardians (rulers),
guardians (auxiliaries), and producers (everybody else). Socrates feels
that in order for this city to work the best people, or golden people,
would be on top as rulers. Then the auxiliary guardians/soldiers, or silver
people, would be educated to believe that this is this best
city so they will not revolt against the city.
( https://www.kibin.com/essay-examples/the-ideal-state-according-to-
socrates-kfuxRUgA)
The point of conflict of the Philosopher King theory with the Skilled
Leadership theory is that those in the bottom pyramid are unable to
acquire such skills as to make them a part of either the middle class or
the top echelon of society. They can at best be the best of their class
and are forbidden certain knowledge and literatures because the
information can open their minds to start revolt.
There are two important behavioural studies that developed from Ohio
University in the late 1940s, these theories came along as a result of the
lack of conclusiveness of the traits theory and they were able to come to
their summations using the Leaders Behavior Description Questionnaire.
After compiling and analyzing the results, the study led to the conclusion
that there were two groups of behaviors that were strongly correlated.
These were defined as Consideration (People Oriented behavioral
Leaders) and Initiating Structure (Task Oriented Leaders). (Leadership-
central.com, n.d.)
When Boye came in, his first task was to stabilize the company, the next
was to gradually start growing revenue. With this he had to call upon his
transactional leadership qualities by incentivizing and rewarding dealers
and retailers. With this, retailers were able to push more products to the
customers which in turn led to a higher growth. Apart from retailers and
dealers, employees were also pushed to deliver more for a
bonus reward.
Boye short span of Leadership was able to reinstall believe back in the
employees, he was able to paint a new bright future from the gloom that
pervaded at the time. Although it was a time austerity and cuts were
necessary to sustain the business, he was able to make the employees
understand the reason and they became willing to weather the storm. He
encompasses the four attributes of transformational leadership which are
Individualized Consideration, Intellectual Stimulation, Inspirational
Motivation, and Idealized Influence Charisma. With this, he was able to
stabilize the company and eventually succeeded in selling 9mobile to
Teleology Holding who became the principal management of the
company after regulatory approvals.
The focal point of Taylor’s method is breaking down project into smaller
pieces as evident in the assembly line, delegating responsibilities and
training workers to be more efficient as against Soldiering practice. Work
performance been scientifically monitored since every task has been
assigned a duration and employees must complete the task within the
duration for rewards.
Bureaucracy
While Taylor focused on the scientific management and Fayol dealt with
Administrative management. A new theory was developed by Max
Weber, this theory he called Bureaucracy. Weber was a German
sociologist who believed that organizations must be run in a rigid
hierarchical order where tasks are clearly defined, management is
separated from ownership and rules are applied uniformly.
Characteristic of
Application to 9mobile
the Bureaucracy
This is one of the cardinal principles of Weber’s
Bureaucracy. Each level controls the levels below
and is controlled by the level above. Authority and
responsibilities are clearly defined for each position.
Hierarchical
The problem is that this approach creates so many
Management
processes that often delays the execution of task in
Structure
9mobile as approval needs to be sort up the
hierarchy before a project can be executed. 9mobile
has had innovative product die in the pipeline
because of so many approvals and bureaucracy.
9mobile employs this principle to hire based on
special skills and education and subsequent tasks
Division of Labor are clearly defined, and employees become skilled
by specializing in doing one thing. These are
principles that were preached by Taylor and Fayol.
Weber witnessed a lot of nepotism before coming up
with his theory. He posited that every employee
selection and promotion must be based on
Formal Selection
experience, competence, and technical qualification
Process
demonstrated by examinations, education, or
training. 9mobile tries to achieve this although you’ll
still have employees who feel hard done.
9mobile Management also separates management
Career Orientation from ownership with only the CEO being represented
on the board.
All employees are made to sign and agree to the
Formal Rules and
rules and regulation guiding the organization before
Regulations
joining 9mobile
9mobile tries to apply rules uniformly to everyone
and avoid nepotism but you still find employees
Impersonality
complain of such although such complains are
limited.
Weber’s theory is not without criticism as bureaucracy is
also criticized for the following reasons (Mullins, p.49):
Rules, record keeping, and paperwork become more important than the
ends the administration is supposed to serve.
Although the main issue that affected Etisalat Nigeria was its inability to
repay the Bank Loans which resulted from the economic slowdown and
devaluation of the Naira. There are also claims of wastage and
mismanagement labelled against the management of the company that
acerbated the issue. This was evidence with the inquiry by Nigeria’s
lower house into how the company managed the 1.2 bn USD Loan.
Although the accusations are unproven, and the inquiry didn’t come up
with any summations; the Chairman had been forced to resign his
position at one of biggest bank in Africa due to a similar mismanagement
issue. it is safe to infer that Authentic Transformational Leadership (ATL)
would ensure that Loans when taken are properly appropriated to the
intended usage and not drafted for other purposes that may affect the
company with its repayment schedule. ATL would also by virtue of being
disciplined would also be able to influence the directors and senior
managers which will in turn lead other junior employees to follow suit.
Leadership has always been a part of society and how they emerge has
been a focus of thinkers for generations. As society grew; men started
forming alliances, partnerships that later developed into organizations.
Leaders emerged in these organization and as organizations became
bigger, the appropriate management style became an agenda for
theorist, academician and Leaders themselves.
References