Critically evaluate the application of leadership theories to a leader in an

organisational context and the management theories to a contemporary organisation

Student Name: Chansa Musanshi

Student Number: R1811D6944174

Course Module: BS4S16-V1 – Leadership and Management Theories

Assessment Number: 1

Programme: MBA – Master of Business Administration

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Table of Contents

1. Introduction…….………………………………………………………………………..3

1.1 Background of the Organisation……………………….………………………...3

2. Leadership Theories……………………….……………………………….…………..4

2.1 The Trait Theory……………………………………………………………...……5

2.2 The Behaviour Theory…………………………………………………………….6

2.3 The Transformational Theory…………………………………………………….8

3. Scientific Approaches to Management……………………………………………….9

3.1 Fayol’s Principles of Management……………………………………………..10

3.2 Bureaucratic Theory of Management………………………………………….12

4. Culture and Leadership……………………………………………………………....12

5. Discussion and Conclusion……………………………………………………………13

References…………………………………………………………………………………15

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 1. Introduction

Leadership and management theories are essential in helping us understand the

ways in which organisations function. Therefore, it is important to look at the different
theories in order to gain an understanding of the management principles and skills
that are necessary in organisational settings.

This research paper aims to critically assess the application of theories to a leader,
namely Savio Kwan, in an organisational context, an organisation known as Alibaba.
It further discusses the different approaches of management and their application to
a contemporary organisation, which, for the purposes of this research paper, is
British American Tobacco. A brief overview of leadership theories; namely the Trait
Theory, the Behavioural Theory and the Transformation Theory, will be given. It will
further critically evaluate the leadership theories and their application to Savio Kwan.

A critical assessment of management theories in application to British American

Tobacco will also be given.

1.1 Background of the Organisation

British American Tobacco is an organisation which produces and manufactures

cigarettes, focusing on adults who choose to smoke tobacco instead of encouraging
people to start smoking. The organisation was founded in 1902 when James ‘Buck’
Duke became the company’s first chairman. His policy was to create a superior
product and hire the best people to make it, price it as low as possible and
systematise production (https://www.bat.com/history, no date).

British American Tobacco is in four main regions; America, Asia-Pacific, Eastern

Europe, Western Europe Middle East and Africa, with its main headquarters being in
London, United Kingdom
(https://www.bat.com/group/sites/UK__9D9KCY.nsf/vwPagesWebLive/DOAVZLSB,
no date).

It has a Main Board, which is jointly responsible to the shareholders of the company
for the performance of the company as well as its values and governance
(https://www.bat.com/group/sites/UK__9D9KCY.nsf/vwPagesWebLive/DOBB9HYL,

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no date). The Main Board provides the leadership needed for the Group to meet its
performance objectives. The other part of the organisation is made up of
Management Board, which is comprised of senior leaders at British American
Tobacco. It is chaired by the Chief Executive Officer, who oversees the operation of
the Group’s strategy and policies set up by the Main Board, as well as creating the
framework for the day-to-day processes of the Group’s operating subsidiaries
https://www.bat.com/group/sites/UK__9D9KCY.nsf/vwPagesWebLive/DOBB9HZA,
no date). The Management Board is also responsible for developing and managing
talent within the Group’s regions as well as monitoring their progress against their
objectives.

This research paper collects its data from secondary sources, meaning the data
collected will be via books, internet resources and journals.

2. Leadership Theories

Over the last years, different authors and researchers have tried to come up with a
precise definition of leadership. Davis (cited in Bhatia, 2013) defined leadership as
the ability to persuade others to seek objectives enthusiastically. It is the human
aspect of binding a group together and motivates that group towards goals. Haimann
(cited in Bhatia, 2013) agrees with the idea of leadership being a process which
influences and directs others in choosing and meeting specified goals. However, it
can be argued that the idea of leadership differs depending on the type of leader one
is dealing with. For example, Mahatma Ghandi had his own way of leading people
whereas a corporate leader may have a more formal approach leading his own
people. In addition, leaders in different organisations may have different ways of
leading.

One example of a man who possesses great leadership skills is known by the name
of Savio Kwan, the former Chief Operating Officer of Alibaba, an online commerce
company (Barboza, 2014). He is described as an interactive and influential leader,
often advising the next generation of business leaders around the world. He delivers
talks on integrity, values and leadership, and naturally, he is a great communicator
(https://www.fbe.hku.hk/page/detail/253037, no date). Leadership, which essentially
is a process of guiding and influencing others to attain a specific goal, increases the
possibility that a leader and follower will work together in order to reach a common

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goal (Rost, cited in Northouse, 2014, p6). In Kwan’s case, he is constantly in touch
with his mentees which shows that he focuses on working together with his mentees
to reach a common goal (https://www.fbe.hku.hk/page/detail/253037, no date).

As mentioned above, over the last few years, authors and researchers have tried to
come up with a precise definition of leadership, with some professionals suggesting
leadership theories. For the purposes of this research paper, the Trait Theory the
Behavioural Theory and the Transformational Theory will be discussed.

2.1 The Trait Theory

Before 1945, leadership theories were mainly concerned with traits of leadership
(Bhatia, 2013, p78). The Trait Theory is based on the traditional approach that states
that leadership rests on personal and special characteristics, which are inherited, not
acquired through knowledge and training (Bhatia, 2013, p79).

According to this approach, leaders are born with traits such as intelligence, self-
confidence, determination, integrity and sociability (King and Lawley, 2013, Page
380). Kwan shows that he possesses all these qualities. Kwan completed his
masters’ degree at Loughborough University in Engineering and later found work in
Cambridge, England. At the age of 26, he did not want to spend years working his
way up the corporate ladder and as a result he applied to London Business School,
confident that he would be accepted. Kwan instead, was rejected. As a result, he
drove to Cambridge, persuaded his way into the Dean’s office and found himself
having talked to a Professor known as Charles Handy. He demanded to know why
he had been rejected from London Business School and was advised by the
Professor to re-write his essays, get a new recommendation letter and his candidacy
would be reconsidered. He was successful on reapplication and was offered a full
scholarship by his company (London Business School, 2014).

From this brief story, it can be seen Kwan holds leadership traits. He was determined
to get into London Business School and possessed the confidence to talk his way
into London Business School and speak confidently to Professor Charles Handy.
Mann (cited in Northouse, 2014 p41), further suggested that certain traits could be
used to distinguish leaders from non-leaders. He identified leaders as intelligent,

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masculine and dominant, among other traits. However, it seems researchers only
focus on characteristics that leaders possess, and we are not given a causal link
between successful leaders and successful followers. The advantage, though, is that
it gives us an idea of what a leader should possess. It must be noted, nevertheless,
that circumstances differ and people who possess certain traits in a certain situation
may not make them a leader in another situation. Research also fails to address how
these characteristics affect employees, whether positively or negatively. Many have
criticised the trait theory, charging that it disregards the process of leadership and
ignores the situational traits which may result in the creation of a leader (Bhatia,
2013, p79). It also fails to identify which traits are more important and those that are
less important in identifying a successful leader (Bhatia, 2013, p79).

Recent research, however, shows that a leader who is emotionally intelligent is more
likely to show pure sympathy to their followers (Humphrey et al, 2008). Therefore,
leadership traits such as intelligence and the ability to be empathetic are personality
traits that would be required in order to be a leader.

2.2 The Behaviour Theory

By contrast, the behaviour theory seeks to explain leadership in terms of how

leaders behave (Bhatia, 2013, p80). This theory focuses more on a person’s actions
more than their characteristics. The development of the behavioural theory of
leadership wad due to criticism of the trait theory (Derue et al, 2011). Studies on the
behavioural approach identified two general types of behaviours; mainly task-
oriented behaviours and relationship-oriented behaviours (Northouse, 2016, p71).
The task behaviours help group members to achieve their goals whilst relationship
behaviours tend to focus on employees feel comfortable with themselves and each
other (Northouse, 2016, p71).

In the early 1960s, Black and Mouton developed a model referred to as the
Managerial Grid that has been used for training and development in organisations
(Northouse, 2016, p74). This is helpful in explaining how leaders can help
organisations reach their purposes through their concern for production and their
concern for people.

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Because of their concern for people, the team’s needs, interests as well as areas of
personal development are considered by leaders. Whereas, through their concern
for production, leaders look at organisational objectives and goals and are mainly
concerned about achieving the task at hand. The Managerial Grid (Northouse, 2016,
p75), ranges from 1-9, representing 1 as a minimal concern whereas 9 as a maximal
concern.

Savio Kwan falls under the Team Management criteria on the Managerial Grid in that
he has high concern for people and a high concern for results. When he started
working at Alibaba, Kwan set up at a team which spent long hours on crucial matters
such as the values that the company would stand for
(https://www.fbe.hku.hk/page/detail/253037, no date). Kwan also created an all-
inclusive development plan which personified Alibaba’s values in order to identify
strong performers within the organisation
(https://www.fbe.hku.hk/page/detail/253037, no date). From this, Kwan clearly had a
high concern for results because he was concerned about the organisation’s goals
and objectives. Secondly, his concern for people can also be seen in the fact that he
introduced an all-inclusive development plan in order to identify strong performers
within the organisation.

This theory seems to only focus on the idea that leadership qualities are developed
through experience and learning. However, learning through experience does not
always mean that everybody will possess leadership qualities. Leadership in one
situation may be challenging for another in the same situation. Bryman (2013) also
criticised the Managerial Grid for placing its emphasis on managing organisations
and not leaders.

But, research on leadership has expanded due to the behavioural approach.

Researchers no longer focused on the personal characteristics that were carried by
leaders but rather their actions in certain circumstances. However, there has been
no establishment of a consistent relationship between task and relationship
behaviours.

The behavioural theory is different from the traits theory in that it does not define a
leader by their characteristics, and completely disregards any idea that a leader has
in-born traits. The traits theory, on the other hand, assumes that leaders are born

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with leadership qualities and fails to consider the ways in which leaders act
depending on their circumstances.

2.3 The Transformation Theory

The transformation leadership theory implies that a leader transforms his followers. It
takes into consideration the emotions, values, standards and long-term goals of the
organisation. Transformational leaders are inspirational by nature. They inspire their
followers to do more than what is expected of them by making their followers more
aware of the importance and value of specified goals (Northouse, 2014). The
advantage of this leadership theory is that it focuses both on the leader and the
follower, concentrating on improving the performance of followers.

Kwan, when he joined Alibaba as their new Chief People Officer in 2001, spent three
months with the management team on a process of discovering, developing and
defining Alibaba’s mission, vision and values. When Kwan started at Alibaba, he
stated that from then on, 50% of the performance evaluation would be based on
employee performance while the other 50% on how well employees adhered to the
core values, mainly focusing on the performance of followers as a transformational
leader would (Themaat, 2018)

In order to motivate employees at Alibaba, Kwan encouraged his employees at the

time to think of money as something that offered more choices. He added that these
choices do not have to be material goods (Strait Times, 2014). In addition, evidence
of Kwan’s transformational leadership skills can be seen in the way he transformed
Alibaba’s way of doing business. He was hired to cut payments and lay off some of
the employees. Alibaba had been running with little to no discipline and Kwan
introduced a corporate value system in order to give employees a sense of direction
and guidance on what was and what was not acceptable behaviour. This shows that
one advantage of transformational leadership is that a leader provides a vision for
the future. When Kwan started working at Alibaba, he ensured that the CEO’s vision
for the company be written down, debated, refined and streamlined into a set of core
values.

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He had his own goal for Alibaba, which was to produce a sustainable and long-term
cash flow (Westland, 2016, p25).

In order to create change, a transformational leader is a strong role model for their
followers and must have high moral values and sense of identity (Avolio and
Gibbons cited in Northouse, 2014). Kwan had high moral values and despite working
in a culture that insisted that bribery was the norm, went against that insistence and
stuck with his decision to work with honesty and integrity, despite the difficulties he
faced (https://www.henley.ac.uk/news/2016/keynote-lecture-doing-business-in-china-
it-is-a-question-of-trust-the-alibaba-story, 2016).

3. Scientific Approach to Management

The first approach to management was first identified by Frederick W. Taylor as the
scientific management approach. In his work, Principles of Scientific Management
(1911), Taylor was more concerned with the engineering aspects of the problems of
workers, and recommended productivity-oriented wages.

In the early 1900’s, the working methods were usually left to the initiative of the
workers. It was Taylor’s suggestion that that managers take over that role, arguing
that workers would prefer to be given a precise task with clear-cut standards (Cole,
2004, p17). Taylor suggested that there must be a segregation of the planning and
controlling from the actual work (Cole, G, 2004, p17)

Cole (2004) further writes that under Taylor’s system, the management must control
the workers because the management’s actions would be based on the scientific
study of the work.

Further, the author states that Taylor’s scientific approach needed methodical
development for each operation in order to replace rule-of-thumb and to determine
the correct time and method for each job. In addition, Taylor’s approach needed an
organisation to take all responsibility from workers except the actual performance of
that job and to select and train the workers, accepting that management must be run
by the methods developed for each operation, surrendering its arbitrary power over
to workers. In other words, management must cooperate with its workers (Cole,
2004, page 17)

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3.1 Fayol’s Principles of Management

A few years later, Henri Fayol (1916) stated to manage is to ‘forecast and plan, to
organise, to command, to coordinate, and to control’. (Cole, 2004, Page 6)

E.F.L Brech (cited in Cole, 2004, p6) agreed and defined management as a social
process that involved ‘planning, control, coordination and motivation.

Figure 1.1 Fayol’s 14 principals of management (Cole and Kelly, 2017, p24) as listed
below.

Division of Work Reduces the span of attention or effort

for any one person or group. Develops
practice and familiarity.
Authority The right to give orders. Should not be
considered without reference to
responsibility.
Discipline Outward marks of respect in
accordance with formal or informal
agreements between firm and its
employees.
Unity of Command One man one superior!
Unity of Direction One head and one plan for a group of
activities with the same objective.
Subordination of individual interests The interest of one individual or one
to general interest group should not prevail over the
general good. This is a difficult area of
the management
Remuneration Pay should be fair to both the employee
and the firm.
Centralization Is always present to a greater or lesser
extent, depending on the size of
company and quality of its managers.
Scalar Chain The line of authority from top to bottom
of the organization.
Order A place for everything and everything in

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 its place; the right man in the right
place.
Equity A combination of kindliness and justice
towards employees.
Stability of Tenure of Personnel Employees need to be given time to
settle into their jobs, even though this
may be a lengthy period in the case of
managers
Initiative Within the limits of authority and
discipline, all levels of staff should be
encouraged to show initiative.
Espirit de Corps Harmony is a great strength to an
organization; teamwork should be
encouraged.

In application to British American Tobacco, it is an international company which

ensures that each local company has wide freedom of action and responsibility for
their own operations. The common goal is to follow a framework of principles,
standards, policies, strategies and delegated authorities, making decisions hand in
hand with local stakeholders. The idea of having each local company have wide
freedom of action and responsibility shows that employees are encouraged to take
initiative.

3.2 Bureaucracy Theory

The bureaucratic management theory was first introduced by Max Weber. The main
features of a bureaucracy are as follows; a continuous organisation bound by rules,
specified spheres of competence and rules which govern the exercise of authority, it
is hierarchical by nature, in other words, the level of job is subject to control by the
next higher level (Cole and Kelly, 2017, p35). The appointments to office are made
on the grounds of technical competence, officials are separated from those who own
the organisation and lastly, rules, decisions and actions are recorded in writing.

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Weber felt that bureaucracy was indispensable for the needs of large-scale
organisation, and there is no doubt that this form of organisation has been adopted
in one way or another by practically every enterprise of any size worldwide.

However, British American Tobacco is highly bureaucratic in that it is hierarchical in

nature. It consists of a Main Board and a Management Board and has over 55
factories in 28 countries and offices around the world. The organisation also has a
global network of expert field technicians who provide on the ground support,
technical assistance and capacity building for over 90,000 directly contracted
farmers, helping them to run successful and profitable farms. The downside to
having such a big organisation is that control of the organisation would be narrow
due to the many hierarchical levels. In addition, as levels of hierarchy increase,
communication also gets difficult, meaning more time would be needed to implement
decisions. Nevertheless, the organisation’s worldwide office managers provide the
organisation with cultural diversity in sites and market desires.

As discussed in the introduction, British American Tobacco is a worldwide

organisation with its offices in four main regions; America, Asia-Pacific, Europe,
Middle East and Africa, making its structure highly decentralised and hierarchical,
meaning its focus is on individual performance (BAT Employment Principles, 2011).

4. Culture and Leadership

After reading about the leadership and management theories, different organizations
may do things differently because of their culture. Culture refers to a group of people
that share the same set of beliefs, customs, practices as well as way of thinking.
Therefore, application of the management theories and leadership styles may differ
depending on the culture. Under Hofstede’s Five Dimensions of Culture (Hofstede,
2011, p9), one of the dimensions known as Power Distance, refers to the extent that
group members expect and agree that power should be shared unequally. Large
power distance includes frequent corruption and much respect being given to older
people. In other words, management is given a high level of respect in countries
such as France or Iran whereas in places like Italy or Germany, management is
neither feared nor respected as much.

There are different levels of culture. The values held by most of the nation are what
is referred to as ‘national culture’. For example, in Kwan’s case, Asia’s market,

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bribery was the norm and he was strongly against this. In addition, arriving a few
minutes prior to a meeting time is more plausible in Germany as opposed to Ghana,
where being late is socially acceptable. According to Hofstede (2011, p3), societal
cultures, which young people acquire from their youth, are deeply engrained in the
human mind than organizational cultures acquired on the job. This, therefore, would
affect the type of leadership style one has.

In addition, if there is a cultural merger, one of the biggest challenges a company

may face is having to combine different corporate cultures (Orr and Xing, cited in
Stahl et al, 2013). According to Kunda (cited in Abdulai and Ibrahim, 2016), moving
management practices from one continent to the other would mean implementing
management practices that never produce steady roots within the society to which it
is being moved to. The traits theory and behavioural theory do not consider different
circumstances that may be faced by leaders, such as cultural mergers. Cultural
mergers would also affect how a leader behaves. In addition, if an individual has all
leadership traits, how would they surpass challenges such as language and cultural
barriers? One organization may be more hierarchical driven, and one organization
may have employees who have closer ties to management.

Discussion and Conclusion

In conclusion, this report has discussed the different types of leadership theories.
They have been applied to Savio Kwan, who worked for Alibaba. Some researchers
believe that traits of a leader make somebody a leader whilst others believe that it is
the behaviour of a person, which remains unchanged through the years, which make
one a leader. From the trait theory, it has been discovered that leaders are either
task or relationship oriented.

The report has also discussed the behavioural leadership theory, which states that
leadership is learned through practice and experience. Blake and Mouton’s model of
behavioural theory suggests that there is a relationship between leader’s concern for
people and their concern for results, which in conclusion shows the general
behaviour of leaders.

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Lastly, the transformational leadership theory was also discussed. This leadership
theory shows that it is necessary for leaders to influence and inspire their employees
in order to gain high levels of performance. However, there are disadvantages to
each leadership styles.

In addition, management theories have also been discussed, namely the need for
managers to plan, organise, control and direct. The transformational leadership style
seems to be one which would be effective for overall development of an
organization. Transformational leaders are inspirational and are high achievers,
wanting to see results. Although there are limitations for each leadership and
management style, a transformational leader would be ideal for the benefit of an
organization.

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