You are on page 1of 8

Leadership Roles

and the Effects on


Organizational
Performance
Leadership & Organizational
Behavior – Assignment #3
Case Study - Alan Mulally, CEO, Ford Motor Company

Sandra Jastrzembski
Dr. Madlyn Bonimy
11/14/2010
Leadership Roles and the Effects on Organizational Performance2

Introduction: Discuss the role of leadership and how it can impact organizational
performance.
Effective Leadership is the forefront of most organizations and strategic planning

exemplifies this philosophy (Hellriegel and Slocum, 2011, p.297). Organizational dimensions

such as leadership, culture, structure and processes are devoted to the effect of strategic planning

of an organization. Amongst the dynamic environment of the business world, it is necessary for

an organization to consistently focus on improving its competitive strategy. Strategy goes

beyond operational improvement. Therefore, competitive strategy utilizes analysis of the

structure of an industry and its competitors in order to identify an optimal position. Furthermore,

competitive strategy involves continuous improvement through strategic planning. Accordingly,

organizational performance transpires a highly regarded relationship between business strategy,

leadership, and innovation (Hellriegel and Slocum, 2011, p.291-297).

The conceptual factors of organizational performance are immense. A theorized

assumption that leadership hypothetically impacts an organization’s performance, consequently,

must incorporate some attention to the hypothesis that leadership is of substantial importance.

Therefore, the performance of an organization can be measured by the effectiveness of its

leadership. This includes how effectively leadership communicates and translates the vision and

strategy of the organization to its members. How well the organizations goals, objectives, and

strategic focus is carried out by its members, how focused the leadership of the organization is in

utilizing collaboration skills, and the ability to remain flexible in motivating others with an

appeal to the common interests of the organization. Motivation is imperative as to how effective

leadership articulates the organizations performance through the needs of others and inspiring

them to perform. The relationship between organizational performance and leadership,


Leadership Roles and the Effects on Organizational Performance3

therefore, can be theorized that leaders help shape organizational culture and, thereby,

performance.

Performance of the organization can be measured by its strategic direction and extent of

the organization over the long-term. The leadership, therefore, can substantiate successful

performance of the organization through their strategic planning and focus on resources within a

challenging environment to meet the needs of that organization and subsequently, fulfill

stakeholders’ expectations.

Discuss Mulally‘s leadership style at Ford Motor Company and provide examples of how
his actions fit this style.
Transformational Leadership starts with the development of a vision, a view of the

future that will excite and convert potential followers. The Transformational Leader seeks

overtly to transform the organization; there is also an implicit promise to followers that they

likewise will be transformed in some way, perhaps to be more like this amazing leader

(Hellriegel and Slocum, 2011, p.329-333). In some respects, then, the followers are the

product of the transformation. Alan Mulally, CEO of Ford Motor Company, assumedly

portrayed as employing Transformational Leadership. Mulally appealed to Ford Motor

Company as a leader with zeal and a tenacious agenda; a Transformational Leader often

charismatic, but not as narcissistic as pure Charismatic Leaders (Hellriegel and Slocum, 2011,

p.543-545). Transformational leadership is about implementing new ideas. Since these

individuals continually change themselves; they stay flexible and adaptable; and continually

improve those around them. The transformational leader encourages followers by acting as a

role model, motivating through inspiration, stimulating intellectually, and giving individualized

consideration for needs and goals.


Leadership Roles and the Effects on Organizational Performance4

Alan Mulally encourages participation from all including, executives and managers, and

clearly conveys amidst his weekly staff meetings. In an articulated commitment of service to

each division his agenda illustrates belief in others that unites the organization.

Transformational leadership empowers people to greatly exceed their previous levels of

accomplishment. This dynamic and innovative leadership style challenges and motivates an

entire organization, top to bottom. Alan Mulally puts passion and energy into everything, from

his previous role with Boeing and his current stand at Ford Motor Company. This type of

leadership cares about people and wants them to succeed. The result is individual, group, and

organizational achievement beyond expectations (Hellriegel and Slocum, 2011, p.543-545).

Discuss how goal setting helped Ford improve its performance.

An organization having well-defined visions and mission statements changes nothing.

To be able to energize employees to fulfill corporate objectives to achieve those visions and

missions should be more than a sign on the wall (Hellriegel and Slocum, 2011, p.192-193).

Ford Motor Company was the only major auto manufacturer that did not pursue government

bail-out (Song, 2008). To choose a direction, an executive must have developed a mental

image of the possible and desirable future state of the organization. This image, which is

perceived as a vision, may be as vague as a dream or as precise as a goal or a mission

statement. Executives and managers should live the vision, be seen executing the objectives to

achieve those goals, and constantly communicating the objectives to achieve those goals with

their employees.

A goal is a long range endeavor for a specified period; it must be specific and realistic.

Long range goals set through strategic planning are translated into objectives and activities that

will ensure reaching the goal through operational planning. The major outcome of strategic
Leadership Roles and the Effects on Organizational Performance5

planning, after gathering all necessary information, is the setting of goals for the organization

based on its vision and mission statement. The vision of Ford Motor Company is simple yet

powerful, 'to become the world's leading consumer company for automotive products and

services' (Hellriegel and Slocum, 2011, p.543-545).

Assess Mulally on each element in communication openness including message


transmission, trust, agendas and goals.
Alan Mulally demonstrated organizational innovation when he entered Ford Motor

Company as CEO. Organizational innovation can be defined as a process of changing the

organization by introducing different methods of production or administration. Conveying his

ideas and vision as he did with Boeing, Mulally exhibited his innovation that comprised the

adoption of ideas from outside the Ford organization in conjunction with the generation of those

ideas from within Ford Motor Company (Song, 2008). The message he portrays involves

planning initiation, execution, selection, and implementation of the objectives to achieve the

goals set forth by his administration. Focusing on fewer products to produce sustainability

improvement and service innovation involving the introduction of a service that is new or

substantially improved conveyed his characteristics for the agenda to achieve the goals of a new

and improved Ford Motor Company. The success of an innovation is connected to a market

forecast of customer needs and wants as well as effective management of the innovation

process. Alan Mulally’s focus for Ford Motor Company emphasizes on “One Ford – One

Team, One Plan, and One Goal”. He has high regard for executive management and maintains

open communication, in addition to his charismatic mannerism (Hellriegel and Slocum, 2011,

p.543-545).

Mulally has portrayed an agenda to serve and satisfy not only customers, but employees

as well, increase market share, increase profits, and communication is at the top. As a result,
Leadership Roles and the Effects on Organizational Performance6

every successful business requires effective leadership to fully utilize the skills of staff in order

to achieve the aims of the business and communication is a key attribute to a successful leader

(Hellriegel and Slocum, 2011, p.543-545).

Evaluate the effectiveness of Mulally’s leadership style and recommend whether he should
continue with this style, or use a different style.
Alan Mulally has a proven effective leadership style. He is persistent with innovative

processes that address numerous issues within the organization to ensure successful

development and implementation of a thriving organization. His management responsibilities

include reducing the sense of risk; managing the customer interface; training and managing

staff performance; and engaging Ford’s executive team. Collaboration and innovation are the

foundation of Ford’s work in areas ranging from electric vehicles to human rights in the supply

chain. As Ford Motor Company has a proud heritage of improving, Mulally has proven the

adaptability of his leadership style to fuse with situational set-backs in economic turmoil (Song,

2008). Accentuating the characteristics of an Authentic Leadership style, this recommendation

would enable the organization to continue managing through an unstable economy as

organizations begin the process of repositioning their assets and liabilities to move forward

from the recession (Hellriegel and Slocum, 2011, p.326).

Highlighting how successful this tactic can be, Mulally has cemented his reputation as

one of industry’s great leaders; it is well worth paying attention to what he says, after all, it is

extremely rare for one leader to play a major role in two of the world’s top industries. As

president of Boeing’s commercial-airplane division, he revamped the organization’s product

synthesis and embraced digital technology; he also made Boeing a model for global

manufacturing and guided the company through the aftermath of 9/11, which almost crippled

the aerospace industry. Moving forward to 2010 and he is just as successful tackling the
Leadership Roles and the Effects on Organizational Performance7

challenges facing the auto industry and Ford Motor Company through the Great Recession

(Song, 2008).

Communication is the key to any successful leader. Everyone has to know the plan, its

status, and areas that need special attention. It is essential that leaders model that behavior they

expect from others. These are challenging times to be a leader and, in the future, whether it is a

geographic crisis, financial crisis, energy crisis or environmental crisis, turbulence will be the

new norm but, if one can learn from the experience of a leader such as Alan Mulally, an

organization will do just fine and can rise to the top.


Leadership Roles and the Effects on Organizational Performance8

References

Hellriegel, D. and Slocum Jr., J.W. (2011). Organizational Behavior. Mason, OH: Cengage

Learning.

Song, K.M. (2008). Business & Technology: Boeing’s Mr. Nice Guy: Alan Mulally steps into

the limelight. Available online: http://community.seattletimesnwsource.com