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INTRODUCTION

This assignment explores and critically analyses the theories of management


leadership. It draws attention on personal traits of leaders, behavioral approaches such
as Kurt Lewin and his associates’ research on autocratic and democratic leaders, Ohio
State University’s leadership consideration and initiating structure, Michigan
University’s effective and ineffective behaviour of leadership and two dimensional
leadership grid of Blake and Mouton of University of Texas. It also critically analyses
the contingency approaches; Fiedler’s contingency model of diagnosing whether a
leader is task or relationship oriented, Hersey and Blanchard’s extension of leadership
gird on the characteristics of the followers as the important element of situations, path
goal theory of increasing the motivation of subordinates by clarifying behaviours
needed for task completion and rewards.

Secondly, this assignment analyses to the flamboyant and dynamic leadership style of
Sir. Terry Leahy, the CEO of Tesco. It also critically evaluates his leadership style
based on selected leadership theories and finally concludes on an individual opinion.
2.0 Background of Tesco and its CEO Sir Terry Leahy

Tesco was founded by Jack Cohen (1889 - 979). Cohen was a British businessman
and entrepreneur. He was son of Polish-Jewish immigrant and tailor. Growing up, he
had to join his father in his tailoring business as apprentice, but in 1917, had to enlist
with the Royal Flying Corps (RFC), as canvas maker. As soon as Cohen was
demobilised in 1919 after the First World War, he set up a store in Hackney, East
London, where he established himself as a stall holder. He had to accomplish this with
his demobilisation money, which he used to purchase NAAFI stocks. Thereafter,
Cohen became the owner of a number of stores around London, and subsequently
engaged in wholesale business. In the nick of time, Cohen created the Tesco business
name in 1938 – formed from T.E Stockwell’s first three initials as well as the first two
letters of his name. Tesco’s first store was opened in Burnt Oak, London, in 1929,
while the second store was opened in 1931 in Becontree, East London. Subsequently,
by 1940, Cohen had owned hundreds of Tesco shops around London and its environs;
and by 1948, had started the American style self-service.

Tesco plc is a British internationally recognised grocery and general products retail
chain, which has its headquarters at the Tesco House in Chestnut, Hertfordshire. At
present, it is United Kingdom’s largest supermarket. Tesco is the highest private
sector employer in the United Kingdom (Tesco Annual Report, 2009). Tesco is one of
the top retailers in the world; in 2009, it was recorded that it has over 320,000
employees all over the world, as well as has over 2, 320 stores worldwide. At the
beginning of the last decade, Tesco expanded its reach by setting up branches in Asia,
which includes Malaysia, China, and Taiwan, among other Asian countries. It also
widened its European market by venturing into Turkey and Czech Republic.

Terry Leahy has been the Chief Executive Officer of Tesco PLC since 1997. Sir.
Leahy serves as the Chief Executive of Tesco at Tesco Personal Finance Ltd. Sir.
Leahy has executive responsibilities for the operations, results and strategic
development of Tesco. He served as the Chief Executive Officer of Tesco
Corporation. He joined Tesco PLC in 1979 and held a number of Marketing and
Commercial positions. He has been a Director of Tesco plc since October 5, 1992.
3.0 Literature Survey
3.1 Traits Theory

The first half of the 20th century focused success of leadership on a leader’s personal
traits such as intelligence, honesty, self confidence, and appearance. The deep-seated
idea for this theory was that some people were born with these characteristics that
make them natural leaders. The theory also saw the appearance of “Great Man
approach”, because of the argued qualities that leaders should have to be great
politicians, religious leader, or army leader. (Daft & Marcic 2001, p.387)

Over the years researches have sub divided personal traits based on similar
characteristics into personal, intelligence and ability, personality, social and work
related. Traits such as optimism, self confidence, honesty, integrity, and drive are
considered important by Daft (2008, p.39-43).

However, this conception is not always true and it was first challenged by Dr. Ralph
Melvin Stogdill in 1948 when he stated that “A person does not become a leader by
virtue of the possession of some combination of traits”. But researches today are still
looking for ways to find uniform traits to distinguish leaders from followers such as
good physique, more intelligent, more self confidence, more educated, more
dependable, or more active. (Daft & Marcic 2001, p.387)

It could be also argued that such attributes are imperfect due to the limitation in the
scope of research which was solely based on personal traits setting aside behaviours
of leaders and situations which are also eminent factors that determine the success and
failure of leadership. They further ignored other factors that could influence
leadership such as personal traits of the followers and their readiness to make
decisions, time factor, and the dynamics of the environment. Another drawback of the
trait theory is that it assumes that all personality traits will remain constant over an
infinite period of time and were inherent, not learned.

But traits theories were also consistent determinant of leadership success over the
years. Leaders who remained claim, confident, predictable especially during harsh
periods or leaders that admitted mistakes rather than covering up or leaders that had
interpersonal skills and ability to communicate and motivate others without resorting
to negative tactics and leaders that had the ability to understand a wider scope of
expertise were considered good leaders.

Behavioural Approaches

Behavioural theories of leadership do not seek inborn traits or capabilities of leaders;


rather look at what leaders actually do. According to the behavioural researches,
behaviour can be learned more rapidly than traits permitting leadership accessible to
all. According to Iowa University studies leadership behaviour can be generalized as
either autocratic or democratic. The autocratic leader tends to lead by authority and
uses coercive power that breed from position. In contrast, the democratic leader will
delegate authority and use expert and referent power to influence employees. Further,
Tannenbaum and Schmidt suggest that leadership behaviour might be autocratic or
democratic or a mix of both that exists on a continuum based on employee
participation. (Daft, R 2008, p.45)

Drawback of this theory is that autocratic leaders are compared with a mechanistic
organization structure where there is a strict hierarchy of authority and where decision
making is centralized. Democratic leaders are compared with an organic
organizational structure where the decision making tends to be informal and
decentralized within a relaxed hierarchy. Therefore it could be also argued that an
autocratic or a democratic leader may have difficulty functioning in the oppositely
structured organization because of the individual behaviour.

Universities of Ohio, Michigan and Texas’s research on leadership behaviour


concluded two types of leadership behaviours. I.e people oriented and task oriented
and further argued that these two dimensions are underlining aspects of human
behaviour that should be considered for organization success. (Daft, R 2008, p.51)
But it could be counter argued that people orientation and task orientation exist in the
same leader and also that a leader could achieve both behaviours depending on the
situation.
The above arguments also diverts attention whether a high task and high people
oriented leadership behaviour exists, if so whether it will be effective in every
situation or only in certain situations.
Therefore it could concluded that a leader's ability to lead is dependent upon various
situational factors, including the leader's preferred style, capabilities and behaviours
of followers and also various other situational factors. For example leaders who are
very effective at one situation may become unsuccessful when shifted to another
situation or when the factors around them change.

3.3 Fiedler’s contingency theory

Fiedler argues that leaders are either task oriented or relationship oriented and match
four leadership styles to situations. The four leadership styles comprise of
authoritative leadership which high in task oriented and low in relationship.
Delegating style is low in task and relationship. Supportive leadership style is high in
relationship and low in task. Finally, Fiedler argues that combining high task
orientation to high relationship orientation will manifest a coaching towards
achievement style leadership. (Daft, R 2008, p.68)

Fiedler describes situations based on favourableness to the leader and argues that
situational favourableness is determined by three factors. Firstly, a leader member
relation which is the degree to which a leader is accepted and supported by the group
members. If the leader member relationship is high, situational favourableness
increases and decreases when the leader member relationship is low.

Secondly, the task structure, extent to which the task is structured and defined, with
clear goals and procedures. If the task structure is high the situation favours the leader
and if the task structure is low the situation is unfavourable to the leader. Thirdly, the
ability of a leader to control subordinates through reward and punishment. High level
of position power gives the most favourable situation to the leader. (Daft, R 2008,
p.68)

Fiedler finally concludes that relationship motivated leaders are most effective in
moderately favourable situations and task motivated leaders are most effective at
either when situations are highly favourable or highly unfavourable and explains how
different leadership styles fit situations. (Daft, R 2008, p.70) But, it could be argued
that it may be easier for leaders to change their situation to achieve effectiveness,
rather than change their leadership style. Also, Fiedler has ignored the personal traits
that a leader should have to do so. Further it could be argued that this model does not
consider varying readiness level of the subordinates in the discussed situations.

3.4 Hersey & Blanchard Situational Theory

This theory focuses on the characteristics of the followers as an important element of


the situation and determines the effectiveness of the leadership behaviour. Leader
should adapt their leadership style based on how ready and willing the follower is to
perform required tasks.

As explained by Hersey & Blanchard, leadership style will change based on the
readiness of the follower. Readiness is psychological readiness and job readiness.
Psychological readiness is the self confidence and ability and readiness of the
follower to accept responsibility and job readiness is relevant skills and technical
knowledge the followers have acquired over a certain period of time in employment
or job. (Daft & Marcic 2001, p.392)

Based on the above situational theory, the four style of leadership as in Fiedler’s
contingency theory, the task in question and or the relationship between the leader and
the follower will not be based on the situation that is favorable or unfavorable to the
leader but on the readiness level and development level of the follower.

As subordinates readiness increases, leadership will be more relationship motivated


than task motivated and when readiness decreases leadership will be more task
oriented than relationship oriented. As explained by Hersey & Blanchard there are
four degrees of subordinate readiness, from very high readiness to very low readiness
and it constitutes four leadership styles. (Daft, R 2008, p.72)

Delegating style of leadership is effective when subordinates have very high level of
education, experience, and readiness to accept responsibility for their own task
behaviour. Participating style can be effective when subordinates feel insecure in their
abilities and need some guidance from the leadership. Selling type leadership works
well some when subordinates lack education expertise, experience or ability or
willingness to work. Telling leadership style is effective when the followers have very
low levels of readiness. (Daft, R 2008, p.73)

The drawback of the theory is that Hersey & Blanchard have ignored factors such as
organization culture and learning, hierarchy, urgency of the tasks and personal traits
of leadership. Therefore it could be argued that the theory is rather limited in scope.
Further, the theory is based on assumptions that can be challenged. For example the
assumption that at the telling level, the relationship is of lower importance which is
subjective or in a very urgent situation though the readiness level of subordinates are
high leadership will adopt a telling style because of the urgency of the task.

3.5 Path-Goal Theory of Leadership

The Path-Goal Theory of Leadership describes the way that leaders motivate,
encourage and support their followers in achieving personal and organizational goals
by clarify the path so that subordinates know which way to go removing roadblocks
that are stopping them going there and increasing the rewards along the route. (Daft &
Marcic 2001, p.394)

Path-Goal theory takes in to account the leadership style, followers and situation and
rewards to meet followers need. But it also depends on the situation, including the
follower's capability and motivation as well as the difficulty of the job and other
contextual factors. Based on these, House and Mitchell described four leadership
styles.
Supportive leadership considers the needs of the follower, showing concern for their
welfare and creating a friendly working environment. This approach is appropriate
when the work is stressful, boring or hazardous. Directive leadership is telling
followers by way of scheduling and specifying what needs to be done and giving
appropriate guidance along the way. This method may be used when the task is
unstructured and complex and the followers are inexperienced. Participative
leadership is consulting with followers and taking their ideas into account when
making decisions. This approach is best when the followers are experts in their
respective fields and their advice is both needed. Achievement oriented leadership is
best when the task is complex. In this style leader sets challenging goals, both in work
and in self improvement and high standards are demonstrated and expected. (Daft, R
2008, p.78)

The two most important situational contingencies of Path-Goal theory are the personal
characteristic of the team members and the work environment. Personal characteristic
characteristics are abilities, skills, needs and motivation of the employees. Work
environment is the task structure to which extent the tasks are defined. (Daft, R 2008,
p.79)

Finally, House and Mitchell argue that it is the responsibility of the leader to clarify
the path to rewards, increase and enhance satisfaction and job performance. (Daft, R
2008, p.79)

However the Path-Goal theory assumes that there is one right way of achieving a goal
and that the leader can see it and the follower cannot. Leader is always regarded as the
core and casts the leader as the person who knows and the follower as dependent,
which subjective. The theory also assumes that the follower is rational and that the
appropriate leadership style can be selected depending on the situation. Finally it
could be argued that it is difficult to use the theory to specify actual relationships
between leaders and followers and to make accurate predictions about employee
outcomes.

TRANSFORMATIONAL LEADERSHIP

Transformational leadership in the Kuhnian sense (Everman 2006: 132), that is with
its ontological distinctiveness rests on finding alternative leadership style or model.
As Burns (1978) pointed out, at the core of the formulation of transformational
leadership is the concept of transformation, a change with variation in performance,
productivity and management that brings about break from the norm, as well as
marked departure from existing leadership structure. It also brings about motivation
amongst the people in a manner that produces leadership by consent rather than
coercion. Kotter (1990) sees this as ‘energy surge’’. This is a procedure that allows
‘leaders and followers raise one another to higher levels of morality and motivation’’
(Burns 1978: 20). This is what has characterised Terry Leahy’s leadership model at
Tesco.
The need for business organisation as well as strategic leadership to remain
competitive in the marketplace has catalysed researches into leadership in relation to
positive change (Paglis and Green, 2002). Organisations are in constant flux of
change. Since change is considered a correlate of organisational performance in terms
of organisational growth and development, a leader’s capacity to drive this change, to
maintain the vision and to lead change as well as to remain within the confines of
organisation’s strategic leadership ethos have precipitated the popular theory of
transformational leadership. Transformational leadership is a process by which a
leader generates high points of commitment and motivation by creating,
communicating and maintaining a clear vision, and frequently, appealing to higher
ideas and ethos in relation to organisational development amongst his followers.
Thus, transformational leaders have been depicted as ‘‘those who inspire confidence,
communicate a positive vision, and emphasise their followers’ strengths’’ (Peterson et
al., 2009: 349). Bass (1985) supports the same view about the ability of leaders to
arouse sense of collective vision and goal.

SIR TERRY LEAHY LEADERSHIP QUALITIES

Terry Leahy does not seem like a charismatic manager but rather a
quiet leader who observes, listens and makes thoughtful, intelligent
and well-informed decisions. Leahy’s leadership style is basically responsible for
the organisational success of Tesco. This is essentially because Leahy sees Tesco’s
transformation as the only variable that would guarantee his leadership making a
difference (Useem, 2001). Therefore, for Leahy, transforming Tesco is more of leadership
than management. Leahy puts into consideration that the people, which include customers
and employees at Tesco to be important in the overall running of Tesco. For Leahy, there
has to be a line drawn between management and leadership; he is more concerned with
leadership than management. Leahy’s idea about changing the organisational landscape at
Tesco is in sync with Bennis’ (1994) contention that management is about doing things
right, while leadership deals with a leader doing the right thing. Also, according to Peck
and Dickinson (2008), managers are transactional, while leaders are transformational,
particularly when they are effective. The latter is the case with Sir Terry Leahy, who
takes on board the principle of participative leadership, a corollary of democratic
leadership. Hill (2007) asserts that Leahy looks for leadership from Tesco’s customers as
well as its employees.
Transformational leadership in the Kuhnian sense (Everman 2006: 132), that is with its
ontological distinctiveness rests on finding alternative leadership style or model. As
Burns (1978) pointed out, at the core of the formulation of transformational leadership is
the concept of transformation, a change with variation in performance, productivity and
management that brings about break from the norm, as well as marked departure from
existing leadership structure. It also brings about motivation amongst the people in a
manner that produces leadership by consent rather than coercion. Kotter (1990) sees this
as ‘energy surge’’. This is a procedure that allows ‘leaders and followers raise one
another to higher levels of morality and motivation’’ (Burns 1978: 20).

5.0 Leadership theories Vs Dr. Jack Welch’s leadership styles

Dr. Jack Welch’s poses strong personality traits that lead to great man approach. His
flamboyant personality, self confidence, risk taking ability, family background, social
class and appearance could be argued as he was born with these characteristics that
make him a natural leader according to trait theories.

However his personal traits do not fully represent his leadership style but represents
more in comparison to other leadership theories. Because he is driven by his personal
charisma he is more autocratic but does not fully centralize authority and the decision
making in normal day to day operations. This style disproves the theorist who argues
that autocratic or a democratic leader may have difficulty functioning in the
oppositely structured organic or mechanistic organizations because of the individual
behavior.

Jack Welch was focused and analytical. He restructured GE's portfolio from 350
businesses during 1980s down to two-dozen core activities by late 1990s. During his
initial years as CEO, he either expanded internally or made acquisitions to position all
GE's businesses as either number one or number two in their fields. The planned
acquisition of Honeywell, Inc., which didn't materialize, was expected to redefine GE
for the years to come.
In America’s respected Wall Street Journal, General Electric Company former
chairman and CEO Jack Welch wrote a very interesting essay summarizing the four
essential traits of leadership as the "Four Es." Welch pointed out that these four
essential traits are needed by whoever shall win as the American presidential election
late this year. General Electric flourished and grew in strength as the biggest
corporation in the world’s biggest economy, the US, under the visionary leadership of
Jack Welch. Coincidentally, all his four essential traits are words starting with the
letter E.

It could be also said that Dr. Jack Welch is more Task oriented than relationship
oriented but achieves both behaviors depending on the situation. If further examined,
his style of leadership is more towards an authoritative leader who is high task
oriented and low in relationship orientation and a leader who defines the task structure
with clear goals and procedures.

Finally it could be said that Dr. Jack Welch is more tasks motivated and is most
effective because situations he creates are highly favorable or highly unfavorable.
This characteristic could derive from his strong personality trait of opportunity
seeking or risk taking ability. He also proves that he changes the situation rather than
his leadership style to achieve effectiveness.

6.0 A reasoned analysis of Dr. Jack Welch’s leadership style

Dr. Jack Welch, respected business leader and writer is quoted as proposing these
fundamental leadership principles.
1. There is only one way - the straightway. It sets the tone of the organization.

2. Be open to the best of what everyone, everywhere, has to offer; transfer learning
across your organization.

3. Get the right people in the right jobs - it is more important than developing a
strategy.

4. An informal atmosphere is a competitive advantage.


5. Make sure everybody counts and everybody knows they count.
6. Legitimate self-confidence is a winner - the true test of self-confidence is the
courage to be open.

7. Business has to be fun - celebrations energies and organization.

8. Never underestimate the other guy.

9. Understand where real value is added and put your best people there.

10. Know when to meddle and when to let go - this is pure instinct.

Dr, Jack Welch is known as the king of good times. This personality name is a
complete introduction to the great man approach. His unique style and doing just
anything in the most exotic manner shows his extra ordinary personality traits such as
self confidence, energy, sociability and appearance. He has sharp vision and guts to
take on new challenges that give him an edge over other businessmen. His vastly
diversified interests are a good indication of his leadership style.

It could be further argued that Dr. Jack Welch has perfected the art motivating people
by getting people to do what he want them to do. He creates resonance by tuning
other people’s feelings and moves them in a positive emotional direction. He speaks
genuinely about his followers own values, direction and priorities and resonates with
the emotions of the followers but challenges the mutual comfort level of the
followers. His restructuring process of the GE is a good example for this personality.

Furthermore, it could be argued that Dr. Jack Welch character is a combination of a


pacesetting and commanding styles of leadership. Leaders with this style have a
strong urge to achieve, are low on empathy and collaboration, impatient, numbers
driven and tend to micromanage. These traits may have helped Dr. Jack Welch in his
corporate takeovers. Impatience and lack of empathy have helped him lead his team
better during critical and sensitive times. Finally these styles have reinforced Dr. Jack
Welch’s external image as a chilled out King of Good Times.

Conclusion

During the first half of the 20th century leadership focused success on a leader’s
personal traits. Traits such as optimism, self confidence, honesty, integrity, drive and
vision are considered important. However, personal traits have been challenged by
researches but some today are still looking for ways to find uniform traits to
distinguish leaders from followers. Personal traits are imperfect due to the limitation
in the scope of research.
Behavioural theories of leadership do not seek inborn traits but look at leaders
actually do. According few studies leadership behaviour is categorized into task and
relationship oriented. But in contrast it could be argued that people orientation and
task orientation could exist in the same leader.

Contingency theories incorporate situational factors to behaviour. Fiedler introduces


four leadership styles to situations based on task and relationship orientation. Hersey
& Blanchard focuses on the characteristics of the followers as an important element of
the situation and Path-Goal theory describes the way that leaders motivate, encourage
and support their followers in achieving personal and organizational goals. Drawback
of the post modern leadership practices are that deal more with efficiency and control
rather than adaptive change and learning and does not stress on stakeholder
requirements.

In comparison with the leadership theories Dr. Jack Welch poses a charismatic
personality and a leadership style that is centred on personal traits. He is also
autocratic task oriented but functions in oppositely structured organizations. He is
most effective because he creates situations that are highly favourable or highly
unfavourable and changes the situation rather than his leadership style to achieve
effectiveness. He is also the ambassador as well as a manager of quality who focuses
on customers, teamwork, employee participation, and continuous improvement.

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Appendix I

Leadership Qualities/Traits

 Enthusiasm

It refers to passion. The get things done attitude that can be communicated to other
people. Taking the initiative and making sure that the goals/tasks are achieved in the
right time using the right resources.

 Confidence
Belief in oneself and the followers, that they can accomplish the task in time. Self
awareness is another factor that governs this quality. Too much of confidence or over
confidence can lead to arrogance and hence failure. So keeping this in mind, a leader
should operate.

 Toughness

Resilient, tenacious, keeping high standards and high quality of work; A leader should
seek respect and not popularity.
 Integrity

Trust is an important factor that builds confidence in oneself and followers. Being true
to one, honesty, soundness, personal wholeness etc are different factors influencing
this quality.

 Warmth

Being caring and considerate for people, can make a leader stand in the spotlight.
Followers will get fond of the leader and that is something, essential for being a good
leader, and achieving goals in a long term perspective.

 Humility

Recognizing and accepting things, that can’t be done by one. A good leader should be
a good listener too. He should be capable of taking blames and responsibilities of his
doings. Simply put, not being arrogant and overbearing puts a leader close to where
he should be.

 Courage

Will to stand up for certain issues takes courage. This same quality is essential for
taking risks. A leader devoid of courage will never be a good leader and he would
only pull his followers back. Doing research on the steps taken by leaders in similar
situations can help improve courage.

 Impartiality

A person usually looks at situations with prejudice. This should be avoided and
evidences/ data should be weighed thoroughly before passing any judgments.

 Empathy

Moving beyond the feeling & doing nothing stage; and taking proactive and definitive
steps that shows empathy.

 Imagination

Some people are naturally imaginative. A leader should be pretty imaginative. He


should have a good vision.

 Good Judgment

Judgment is enhanced through experience in rendering decisions and learning from


mistakes. Weighing the options, their pro and cons, reflecting and then acting is a way
to come up with a good judgment.