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Benchmarking a leadership model for the green economy


Daryl D. Green
Department of Energy, Oak Ridge, Tennessee, USA, and

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Jack McCann
Lincoln Memorial University, Harrogate, Tennessee, USA
Abstract
Purpose The purpose of this paper is to examine benchmarking leadership theories in order to build a new leadership model for the green economy. Design/methodology/approach The collection and critical analysis of secondary data from relevant publications were used to evaluate the feasibility of a new leadership model in the green economy. Analysis of organizational and leadership theories has been utilized in order to benchmark future successful efforts. Findings The paper found ve key issues: there is little research in how the green economy will impact contemporary organizations strategy, structure, and culture; new theories may need to be developed to assist organizations in developing the right kind of leadership for the green economy; the creation of green jobs may infuse organizations with more emphasis on values and leadership competency; the over dependence on technology to create jobs and sustain societys quality of life carries unintended consequences; and agrarian leadership may offer organizations a better ability to lead workers in the green economy. Research limitations/implications The paper examines benchmarking applications that are exclusively relevant in both private and public organizations. Practical implications There are several implications for researchers and practitioners related to improving the personal and organizational success of leaders guiding their followers in a green economy. Many countries hope that the green economy will be able to improve their nancial situation. Yet, organizations are struggling with the issues of ethical behavior by managers and how to motivate their employees toward greater performance. A new leadership based on agrarian values may be a positive step in addressing these matters. Originality/value The paper is signicant because it presents a theoretical framework for interpreting how agrarian values can work building the quality of life when applied in a green economy. Keywords Social values, Benchmarking, Leadership, Organizational performance, Ecosystems Paper type Conceptual paper

1. Introduction Americans lives continue to unravel as individuals see their way of life disintegrate before their eyes. Institutions are failing. Ethics and moral conduct continue to decline. Wall Street continues to prosper as Main Street bears the nancial hardship for our country. No one can escape the carnage from the recent global nancial meltdown. Everyone has been impacted from the executive to the factory worker. According to The Conference Board (2010) Research Group, only 45 percent of Americans are satised with their work. In order to be more competitive, organizations need to retool and inspire workers to new levels of performance.
The authors want to express their gratitude to the reviewers. Without their thoughtful analysis and insight, this paper would not have been possible.

Benchmarking: An International Journal Vol. 18 No. 3, 2011 pp. 445-465 q Emerald Group Publishing Limited 1463-5771 DOI 10.1108/14635771111137804

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With the emergence of the green economy, society has the opportunity for nancial growth and moral revival. According to the Pew Charitable Trusts 2009 study, passage of a federal clean energy and climate bill would create a signicant amount of jobs exponentially by spearheading new green technology innovations. In fact, the clean energy jobs in the USA have grown at more than twice the rate of the overall job market over the past decade (Ringo, 2010). Like the Industrial Revolutions mark on society, it is hoped that the green economy will bring positive values to society such as innovation, family values, and strong work ethics. The new economy will be fueled by more environmentally friendly and socially conscious leaders. In fact, good leadership exemplies positive virtues. Hackman and Johnson (2000) further suggested that exemplary leaders provide a model for their followers by seeing these virtues in their leader. Concerned leaders treat their followers as though they possess intelligence and creativity. Cultivating effective leadership development during an era of rapid change severely challenges current organizations as they consider succession planning for future managers. McCall and Hollenbeck (2002) maintained that experience is the primary vehicle for developing global leaders. However, globalization and the advancement of technologies provide a new set of problems for leadership and organizational theorists. The key elements of remodeling todays are leadership, values, and culture (Figure 1). Benchmarking the concept of agrarian leadership will bring justication for much needed improvements. Benchmarking can be a catalyst for assisting organizations to become more focused and competitive thus improving the national economy. In order to implement meaningful changes, executives, legislators, educators, and environmental advocacy groups must take a leading role in this reform. Yet, organizations need to implement the right kind of strategies. Gamble and Thompson (2009) maintained that a companys business strategy strengthens its long-term competitive position. However, managers must be willing to adapt their strategies in response to unplanned occurrences in the market or their customers. This paper examines benchmarking leadership theories in order to build a new leadership model for the green economy. Through this process, three key areas will be reviewed: leadership, ethics, and values. 2. Research objectives and methodology The primary objectives of this paper are to explore benchmark applications associated with leading organizations during a green economy and increase depth of knowledge in this eld in order to make a relevant analysis of each theory. This investigation provides exploratory data by utilizing an extensive literary review of over 20 documents including scholarly opinions and practitioner discussions. The collection and critical

Culture Green economy

Leadership

Figure 1. The key elements for transforming leadership in the green economy

Values

analysis of secondary data from relevant publications were used to evaluate the results of agrarian leadership in a green economy. Analysis of organizational theory has been utilized in order to benchmark future successful efforts. The contributions made by well-known researchers in the elds of leadership theories, such Bass and Yukl, were investigated. Electronic databases such as ABI/INFORM Global, were searched using key words agrarians, leadership, green economy, values, benchmarking, and organizational theories. There was a signicant absence of literature related to agrarian leadership with benchmarking applications in scholarly research. Consequently, there is an opportunity to further enhance research. Benchmarking studies are a well-known commodity in private industry. Elmuti et al. (1997) noted there are four types of benchmarking: internal, competitive, functional, and generic. Although the four types of benchmarking are widely accepted in education, there are many denitions. The denitions are usually related to key themes: measurement, comparison, identication of best practices, implementation, and improvement (Anand and Kodali, 2008). In fact, benchmarking is an activity that looks outward to nd best practices and high-performance solutions and then measures actual business operations against those goals (Kumar and Dhakar, 2006). Rigby (2009) further described benchmarking as a tool that improves performance by identifying and applying best-demonstrated practices to operations and sales. Managers compare the performance of their products or processes externally with those of their competitors and those best-in-class companies. In addition, benchmarking is performed internally with operations within their own organizations that perform similar activities. The objective of benchmarking is to improve performance, understand relative cost position, and gain a strategic advantage. Companies then improve their performance by tailoring and incorporating these best practices into their own operations not simply by imitating best practices, but by innovating. Camp (1995) determined four main areas for nding best practices in benchmarking. These areas were internal benchmarking (department to department, leader to leader, location to location); competitor benchmarking, functional benchmarking (your organization to an external one, your leader to an external leader); generic benchmarking (comparing our leaders or organizations to all industry groups). Benchmarking works from a premise that a leader or organization somewhere is currently performing in a world-class or best-in-class manner. Benchmarking is often used as a performance tool by managers and organizations and is sustainable in its popularity (Francis and Holloway, 2007). Managers typically use it as a tool to serve the interests of employers and shareholders to impact the nancial bottom line. The value of benchmarking was assessed by Coopers and Lybrand (1994); they found that 75 percent of large organizations viewed benchmarking as successful because they set good targets, improved productivity, provided innovative ideas, gave early warning of competitive challenges, and motivated staff. Rigby and Bilodeau (2009) found in their global research that benchmarking is the number one tool that managers use and is effective. This survey had a database of nearly 10,000 respondents. For inclusion in this research, the tools needed to be relevant to senior management, topical, and measurable. 3. Literature review of benchmarking effective leadership Leadership and organizational behavior theories provide researchers an opportunity to understand leader-follower relationships in a green economy. With the continual

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disruptive changes in societies, leadership theories may need to be retooled to deal with new emerging organizational issues. According to Drucker (2001), effective leaders differ widely in personalities, strengths, weaknesses, values, and beliefs, however, all have in common; the ability to get the right things done at the right time. Therefore, benchmarking leadership is a very difcult task. Blake and Mouton (1985) stated that structure, plan, and concept are elemental to an organizations effectiveness. However, the greatest single variable is that leaders must accomplish objectives through the ability to guide, motivate, and integrate the efforts of others through their actions as leaders. Benchmarking leadership is about determining what traits, behaviors, and actions make leaders successful. Kouzes and Posner (2007, p. xvi) stated:
The most signicant contribution leaders make is not simply to todays bottom line; it is to the long-term development of people and institutions so they can adapt, change, prosper, and grow.

The benchmarking of best practices in leadership and management is critical in sharing and building knowledge in a global economy. Traditional leadership focus Contemporary leadership theories have a clear focus. According to Sayles (1979), the traditional emphasis on what good managers should achieve was based on: effectiveness in planning ahead, delegation, coordinating, stafng, organization, and making their organization protable. A good manager therefore makes good decisions about plans and delegations that produce the desired results. Managers described their work as fragmented and unnished. They also described it as action oriented, with contact with others required, and the development of relationships with others as requisite. Even more importantly, management was found to be a contingent activity. As routines breakdown, the manager must adjust and adapt with limited resources, such as time and information. Management roles were often found to be difcult and complex. Contemporary leadership focus Sarros and Santora (2001) concluded from their exploration of todays business executives is that leadership success in todays global workplace requires leaders to inspire others to achieve through their hard work, commitment to people, and commitment to the organization. Leadership is about taking people in the desired direction and to lead by example. Leadership success is only as good as the what (leadership behaviors) and why (personal values) of how you lead. Therefore, leadership comes down to trust, respect, honesty, and integrity. To gain the sustainable respect and authority to lead over time, it is essential that leaders practice or model what the leader espouses. In addition to the ve practices of exemplary leadership, Kouzes and Posner (2007) presented a list of these practices along with their accompanying commitments. This information is recreated in Table I. Furthermore, Kouzes and Posner (2007, p. 29) stated that these ve practices paint only a partial picture. They found that across countries, cultures, ethnic groups, organizations, genders, education levels, and age groups the majority of people believe that the leader must have the following traits: . honest; . forward looking;

Practices Model the way

Commitment

1. Clarifying values by nding your voice 2. Set the example by aligning actions Inspire a shared 3. Envision the future by imagining exciting and ennobling possibilities vision 4. Enlist others in a common vision by appealing to shared aspirations Challenge the 5. Search for opportunities by seizing the initiative and by looking outward for process innovative ways to improve 6. Experiment and take risks by constantly generating small wins and learning from experience Enable others to act 7. Foster collaboration by building trust and facilitating relationships 8. Strengthen others by increasing self-determination and developing competence Encourage the heart 9. Recognize contributions by showing appreciation for individual excellence 10. Celebrate the values and victories by creating a spirit of community (p. 26) Note: Reproduced with permission from the authors
. .

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Table I. The ve practices and ten commitments of leadership

inspiring; and competent.

Krames (2003, pp. 23-4) further conducted a leadership research project with the aim of identifying common leadership threads between the leaders selected for the study. The CEOs were chosen based on the following three criteria: (1) Each CEO led company that was a market leader outperforming its peers. (2) Each of the CEOs leadership strategies stood the test of time. (3) Each of the CEOs contributed to the management body of knowledge. The leaders selected were: Michael Dell (Founder and CEO, Dell Computer); Jack Welch (former CEO, GE); Lou Gerstner (former CEO, IBM); Andy Grove (Cofounder and former CEO, Intel); Bill Gates (Cofounder and former CEO, Microsoft); Herb Kelleher (Founder and former CEO, Southwest Airlines); Sam Walton (Founder and former CEO, Wal-Mart) (p. 11). The research determined six characteristics that connected these CEOs: (1) The best CEOs or most effective started with a vision of the market and worked back to create an organization focused on customer satisfaction. Michael Dell has led one of the most customer-centric organizations at Dell with products that are custom ordered and built to customer specications. (2) Many CEOs have an evangelical leadership gene. Each of the CEOs had an inner re and charisma that was infectious and generated enthusiasm. Sam Walton was the best example of this characteristic. He was both charismatic and inspirational as the founder of Wal-Mart. (3) These effective business leaders understood the critical role of culture and how challenging it is to bring about effect meaningful cultural change. Lou Gerstner recognized that the key to transforming IBM from a complacent organization into a competitive success was through a cultural transformation. (4) These CEOs created or adapted next generation products, processes, or solutions, a trait that is related to vision. Sam Walton recognized the future

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of retailing and this led him to change his already successful organization into that of a discount leader. (5) These leaders also implemented the best ideas. Jack Welch made this a centerpiece in the GE culture. He instituted formal processes to gather, analyze, and implement good ideas form employees or competitors. (6) These CEOs advanced the leadership body of knowledge in some way. Bill Gates coined the phrase, digital nervous system. Heb Kelleher taught managers that an organizations culture can be a great asset and that work is more than about numbers and punching a time clock (pp. 32-52). Lasting success Porras et al. (2007) interviewed over 200 people worldwide who have made a difference in their eld, profession, community, and who have lived a life they believed mattered. Builders are those that have dened their own success and have achieved lasting impact in their eld for at least 20 years. Warren Buffet, Bill Clinton, Bill Gates, and Jeff Bezos were just a few of the notables who participated in the research. The survey aspect of the research included 365 participants; 35 percent of whom identied themselves as successful professionally and personally. An additional 31 percent identied themselves as unsuccessful both professionally and personally. Another 23 percent identied themselves as only successful personally, while 11 percent identied themselves as only successful professionally. Regardless of whether the participants identied themselves as successful or unsuccessful either professionally or personally, all groups said that the traditional denition of success, fame, wealth, and power no longer described what success means to them. Participants preferred to dene success as the ability to make a difference, create lasting impact, and to be engaged in a life that can be personally fullling (Porras et al., 2007). Porras et al. (2007, p. 233) identied attitudinal aspects of lasting success; meaning thought and action. Each individual participating in the survey tended to identify more closely with three dimensions as follows: (1) Meaning (44 percent of sample selected; dened as making a difference, being meaningful). (2) Thought Style (29 percent of sample; dened as allocating my time to my passions). (3) Action Style (27 percent of sample; dened as being accomplished and loving work. These results were consistent regardless of demographics. Drucker (2001) believed that leadership is pointless conversation without understanding what success means. Common leadership threads What do organizations want from their leaders? Bennis and Goldsmith (2003) found that most organizations want a purpose or direction from their leaders. They want the ability to trust them, knowing trust is the social glue that brings commitment. They also want leaders who are optimistic and have a clear vision of the future. In addition, they want action and results from their leaders. According to Bennis (2009, pp. 33-4), the basic ingredients of leadership are as follows:

Guiding vision-professionally and personally. The leader has a clear idea of what they want. The second ingredient is passion. The leader loves what they are doing and is enthusiastic about it. The next ingredient is integrity. The essential parts being: self-knowledge, candor, and maturity.

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These are basic ingredients, not traits that individuals may be born with and are unable to change. According to Bennis (2009, pp. 197-8), leaders are not born, but made and often self-made, inventing themselves over time. The ingredients described can be learned. Bennis predicted that the next generation of leaders would have certain things in common: . broad education; . boundless curiosity; . boundless enthusiasm; . contagious optimism; . belief in people and teamwork; . willingness to take risks; . devotion to long-term growth rather than short-term prot; . commitment to excellence; . adaptive capacity; . authenticity; . integrity; and . vision. 4. The green economy Many hope that the green economy will provide new prosperity for Americas future. The current economy is fueled exclusively by oil, natural gas, and coal. As these resources continue to become scarce, the cost increases. Increased costs diminish the quality of life for the average person who must shift his disposable income to his basic needs. Furthermore, burning fossil fuels create greenhouse gases that are detrimental to the environment (Jones, 2008). On the contrary, the green economy is environment friendly and provides an opportunity for more innovation. Many experts support the green economy concept. Friedman (2006) suggested that the stage is set for a green economy with billions of people from China, India, and the former Soviet Union demanding their share of the energy treasure chest. There will be more energy demands to feed the worlds microwaves, vehicles, and other power hungry technology. Friedman argued that this global demand would create an environmental disaster. This reality could infuse a new desire for renewable energies and environmental sustainable systems. For example, Michigan has created more than 11,000 renewable energy jobs in four years; these jobs are compensated with sustaining a fair and equitable wage. Critics argue that some jobs will be lost as more rigorous energy regulations are in place and companies are forced to make energy transitions. However, Ringo (2010) maintained that these setbacks could be overcome by taking the proper steps. Therefore, the green economy could become

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a positive driving force in the future. Ringo argued that green jobs could revive the US economy while resolving some of the worst environmental problems facing the world. He pointed to this fact based on several states implementing the green economy. Other individuals have their doubts about any nancial success from the green economy. Green maintained that the concept of spurning the economy with green jobs makes no sense. He builds his case by pointing out that governments do not create jobs. The private sector creates jobs. Green further explained that the government could only subsidize one industry while hurting another. Other opponents argue that green jobs hurt the economy. For example, the Obama administration uses Spain as a model for implementing a green economy. Yet, each job created in Spain through green jobs cost about $750,000 and only one in ten jobs are permanent (Green, 2010). Jones (2008) further suggested that several obstacles impede the innovative revolution of the green economy. First, the carbon industry receives trillions of dollars in government coal and oil subsidies that provide it with a clear market advantage. Second, the national electric grid is not set up to handle new kinds of power. Third, government red tape and a culture of bureaucracy impede innovators to act. Fourth, the federal and state governments do not have efciency standards and long-term incentives for green buildings and machines. 5. Values Recently, many workers become cynical when their managers discuss the issues of ethics among workers. Yet, it appears that some managers operate with a different moral standard. During the massive economic downturn, many executives were rewarded for underperforming. For example, Fannie Maes CEO Michael Williams and Freed CEO Charles Haldeman Jr were slated to receive up to $6 million each for 2009 despite the companies poor performance. Yet, it cost the American taxpayers more than $100 million for these company bailouts. With the continual unethical behavior of several executives, American workers are more cynical about their leaders than ever. Friedman (2006) further predicted that globalization would impact future commerce as well as other parts of society such as ethics and values. In the new globalization wave, there will be more diverse non-western, non-white-groups participating. More people will be able to plug into the world economy from across the globe. Therefore, ethics will be seen from a global perspective. Ethics becomes the linchpin for effective leadership. Ethics is dened as the inner-guiding moral principles, values, and beliefs that people use to analyze or interpret a situation and then decide what is right or wrong in a situation ( Jones and George, 2009). Daft (1995) further explained that leaders at the highest management levels develop internal moral standards that can often allow them to break laws if necessary. For many organizations, it is the proverbial doing as I say and not as I do for many managers. Some managers can live with this philosophy. In fact, some managers are placed in ethical dilemmas where they have to decide if they should act in a way that might help others while going against their own self-interest. Workers are now looking for good leadership as businesses continue to falter and competition begins to bear down on the economy. Yet, it is virtually impossible to lead an organization if there are unethical leaders. Economic, social, and political inuences have impacted the value system of todays workforce (Wren, 2004). This new set of workers is driven by a new set of values and job expectations. Therefore, organizations need to take the issues of ethical behavior more seriously if they hope to get greater performance from their workers.

Berry (2008) argued for a new movement resembling the agrarians. He supported his position by noting the new need to better manage natural resources, such as land and water. Jones and George (2009) further stated that neither laws or ethics are xed principles; they evolve as society evolves over time. Berry (2008) suggested that society had better adapt its desires, methods, and technologies in ways that support the environment. Failure to keep this agrarian mandate would result in negative consequences such as poverty and starvation. Across America, there is a growing movement that wants to focus on the earth and conserve its resources for future generations. Individuals are attempting to preserve or restore the welfare of local communities, eco-systems, and watersheds; they are resisting the industrial powers such as big companies to own and control all of the natural resources and land. Brown (2001) promoted the concept of an eco-economy where the environment and economy co-exist. In modern society, it is difcult to integrate ecology due to conicting premises. For example, economists focus primarily on market activity while ecologists focus on the earths natural capital. Brown (2001) envisioned a new economy where economists and ecologists would work together to design and build an eco-economy that would be sustainable over the long term, thereby reshaping society. With the agrarian movement, there are more prevalent values such as independence, hard work, family, trustworthiness, organic, natural, environment, conservation, local community, and trust. The green strategy relates to how organizations will operate, what they do, sell, and how they interact with various people within and outside of their organizations (Makower, 2009). 6. Organizational culture Todays organizations need a culture adjustment during these economic downturns. The recent scandals by both governmental and senior business managers have made the workforce skeptical of todays leadership. Uncertainty and pressure become a staple of the current workforce as employees devote more time to their jobs out of necessity. As a result, organizational relationships are being damaged. According to Caudron (1996), management has lost credibility and trust of workers. She further cites that the primary reason trust has degenerated is not because of the loss of job security, but is due to managers mishandling the workforce changes by treating employees inconsistently, thereby losing credibility in the process. The enormous demographic changes within the twenty-rst century American workforce are creating organizational growth pains. Harding explains that a new generation of workers will produce signicant human resource problems for traditional organizations (Hankin, 2005). Furthermore, McKibben (2007) argued for a different value system for future economies. He maintains that economy growth may make individuals wealthier; wealthier may not make the individual happier. Additionally, Makower (2009) suggested that the green economy would focus on a different set of priorities, thereby changing the culture. It addresses the worlds environmental and social challenges while creating new opportunities. In the green economy, organizations will not sacrice the welfare of the environment for corporate gain. Conversely, companies will seize these new opportunities to create customer value while improving their operations and market brand. Makower suggested that customers are ready for the green economy. He noted that several decades of research studies have consistently said that customers and more businesses are willing to buy products that do not harm the environment.

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McKibben (2007) further supported the concept of returning to agrarian values. In the past, farmers worked toward common goals and collaboration with others such as water management and labor sharing. 7. Discussion and analysis Agrarian leadership may offer organizations a better ability to lead postmodern workers in the green economy. Global trends are shaping contemporary thinking in America. Technology has made the hemispheres much closer. Terrorism is on the rise. Real-time electronic fund transfer systems accentuate the impact of economic changes and create a domino effect on others across the world. Furthermore, globalization has created peculiar international relationships. In order to improve leaders value systems, society needs to regain agrarian values. Earthjustice, the largest US public-interest environmental law rm, created the Ecological Roadmap that analyzes American viewpoints on ten distinct environmental viewpoints. Surveying over 1,900 participants, the organization tracked the national survey looking at 130 values such as ecological concern, civic engagement, and everyday rage (Makower, 2009). There is a core group of Americans, approximately 23 percent who strongly hold an ecological concern. Past initiatives for changing the leadership paradigm in corporate America have proven to be complicated. The review focuses on three leadership theories to consider in the green economy: bureaucratic, transactional, and agrarianal. Each theory has its own unique characteristics as shown in Table II. The leadership theories are bureaucratic theory, transactional leadership theory, and agrarian leadership theory. In the 1900s, Max Weber postulated that a managers authority in an organization should be based not on tradition or charisma but on the position held by managers in the organization hierarchy (Wren, 2004). Webers ideas formed the basis of what is known today as bureaucracy theory, which is based on ve principles. These principles include: (1) a managers formal authority derives from the position he or she holds in the organization; (2) people should occupy positions because of their performance, not because of their social standing or personal contacts; (3) the extent of each positions formal authority and task responsibilities, and its relationship to other positions in an organization, should be clearly specied; (4) authority can be exercised effectively in an organization when positions are arranged hierarchically, so employees know whom to report to and who reports to them; and (5) managers must create a well-dened system of rules, standards, and norms so that they can effectively control behavior within an organization ( Jones and George, 2009). Through a bureaucratic structure, large organizations such as governments can control employees by providing leaders with legitimate power and standardizing work processes. Jones and George maintained that if bureaucracies are not managed properly, many problems can result. Some of these problems include cumbersome regulations, unable to adapt change quickly, slow decision making, inefciencies, and being impersonal to employees.

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Bureaucratic leadership Feedback to employees Rewards employees for performance Communication exchange Adherence and maintenance of existing goals and norms Transactional leadership is described as the motivation of followers through contingent-reward-based exchanges (Burns, 1978). The primary focus of this leadership style is on setting goals, clarifying the link between performance and rewards, and providing positive feedback to followers toward goal attainment. Bass (1985) stated that transactional leadership is contingent reinforcement and that the leader and follower agree on what result will be rewarded or punished Transactional leaders clarify the role and tasks of subordinates in order to achieve successful outcomes and give subordinates condence to put forth the necessary effort (Bass, 1985) Independence Hard work Family-focused Trustworthiness Ethical Organic Natural Environmentalist Conservationist Promotion of local communities Sustainability is a primary goal Trust Ethical foundation More in line with the full range of leadership model of bass The full range model of leadership was developed to broaden the range of leadership styles investigated in the leadership eld (Bass and Avolio, 1994). Leadership is conceptualized within the domains of behavior that vary from transformational leadership based upon attributed and behavioral charisma to laissez faire or nonleadership, to transactional leadership (Bass, 1985). According to Bass and Avolio (1991), effective organizations move in the direction of a transformational culture but they also maintain a healthy level of transactional qualities, as well. Research determined that successful organizations and leaders use both leadership techniques. The use of transformational leadership techniques that articulate the vision of the organization and stimulate employees along with transactional leadership techniques that exchange rewards for performance were found to be more successful across organizational and industry boundaries when used in combination versus by themselves (Bass and Avolio, 1991) Limit or no research on topic Not clearly understood by leaders and followers Differentiation between transformational leadership and agrarian or similarities May be too time consuming to implement in organizations Uncertainty of outcomes for organizations focused on risk reduction

Transactional leadership

Agrarian leadership

Advantages Formalized Chain of command Division of labor Legitimate leaders Fixed compensations Duties of leaders and employees clear

Disadvantages Impersonal Rigid Red-tape Difcult with market changes Inexible Pre-determined employee rewards system External locus of control Only inuential when in the best interest of subordinates Mutual agreement by partakers Top-down approach of governance Limits or discourages out of box thinking by subordinates Incomplete without transformational leadership Does not require a fully engaged employee

Sources: Jones and George (2009); Yukl (2002); Hackman and Johnson (2000); Bass (1985, 1990, 1999); Northouse (2004); McKibben (2007)

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Table II. Comparison of leadership models

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Many effective managers still utilize transactional leadership theory in order to obtain organizational objectives. Transactional leadership focuses on the exchange that occurs between a leader and his followers. In fact, transactional leaders exchange things of value such as promotions or raises with subordinates in order to advance their personal causes (Northouse, 2004). Bass (1999) further suggested that this leadership approach involves the trading of benets. The leader provides followers with their desired outcomes. The followers provide the leader with status, privilege of authority, inuence, prestige, or other desired benets. Given this reality, transactional leaders gain inuence because it is in the best interest of the subordinate to do what the leader requests. Therefore, the leader-follower relationship is submerged in self-interest. The followers enjoy the benet of extrinsic and intrinsic rewards while the leader obtains status, the privileges of authority, inuence, prestige, or other management benets (Bass, 1990). Critics argue that transactional leaders are most concerned with satisfying the physical needs of the employees and do not want to disrupt the status quo (Hackman and Johnson, 2000). Transactional leadership also depends upon management by exception and negative feedback; it is an advantage as long as the employee is a rational and economic being (McAulay, 2003). Therefore, these values do not align themselves well to the needs of postmodern employees who are searching for a meaningful existence. Avolio and Bass (1991) further found that the most common form of effective leadership in organizations is transactional. The transactional leader knows what is expected of them by their upper-level leaders in order to ensure goal attainment and set goals with followers. The transactional leader also knows the strengths and weaknesses of their followers including their needs and desires. Avolio et al. (1991) stated that the transactional leader must have good communication skills in order to determine and disseminate information about the responsibilities, goals, and needs of their subordinates. The transactional leader operates within an existing culture by attempting to satisfy follower needs by focusing on exchanges and reward behavior (Jung and Avolio, 1999). He or she pays close attention to deviations in these exchanges and makes adjustments when variations occur in order to regulate him or her (Bass, 1985; Burns, 1978). Bass (1990) stated that effective leadership develops an understanding and agreement about the role of the leader and the employee in this relationship. Bass (1990, pp. 326-7) proposed that the transactional leader contributes to this relationship by: . clarifying the expectations of employees performance; . making clear how to meet the expectations; . setting the criteria of effective performance; . providing feedback individual and group progress reports; and . providing rewards contingent on goal attainment. In transactional leadership, an exchange of materials, social, and psychological benets occur (Bass, 1985; Burns, 1978). In this process, leaders and followers reinforce each others behavior with reward or punishment but as an effective leadership method, contingent reward has limitations (Bass, 1990). Rewards for performance and disciplinary actions for failures may not have the desired effects because of limitations by the timeliness, accuracy, attractiveness, and perceptions of employees about their feedback (Bass, 1990). Additional moderating effects by many factors in this leader employee

relationship may create unexpected consequences (Bass, 1990). In a transactional environment, employees work as independently as possible from their colleagues and cooperation is dependent on negotiations not problem solving (Bass and Avolio, 1993). Everything in this environment or culture is thought of in terms of explicit and implicit contractual relationships (Jung and Avolio, 1999). In a transactional culture, job assignments are given out based on terms of employment, conditions, disciplinary codes, and benet structures (Blackwell, 2004). There is a price on everything and everyone has a price for his or her motivation to work in this culture. Leaders are negotiators and resource allocators and individuals nd little to identify within the organization thus resulting in little innovation and risk taking in this culture (Bass and Avolio, 1993). The primary focus of the transactional leader is setting goals, clarifying the link between performance and rewards, and providing feedback that is constructive in order to enable followers to stay on task (Bass, 1985). The characteristics of the transactional leader are contingent reward, management by exception (active), management by exception (passive), and laissez-faire leadership (Bass, 1990). These characteristics are dened by Bass (1990, p. 22): . Contingent Reward. contracts exchange of rewards for effort, promises rewards for good performances, recognizes accomplishments. . Management by Exception (active). watches and searches for deviations from rules and standards, takes corrective action. . Management by Exception (passive). intervenes only if standards are not met. . Laissez-Faire. abdicates responsibilities, avoids making decisions. The transactional leader is focused on the lower order physical and security needs of their followers (Bass, 1985; Bass and Avolio, 1995). Contingent reward leadership is highly correlated in research studies to transformational leadership (Avolio et al., 1999). Contingent reward leadership relates positively to subordinate outcomes, such as satisfaction and performance but the strength of association is of a lower level than transformational leadership (Lowe et al., 1996) At the core of many leadership theories is the concerned transactional leader (Robbins, 2003). The Ohio State studies (Halpin and Winier, 1957), Fiedlers model (Fiedler, 1967), path-goal theory (House, 1971), and the leader-participation model (Vroom and Jago, 1988) are examples of leadership theories in which the leader practices transactional leadership. These models emphasize that the transactional leader guides and directs the established goals by clarifying role and task requirement (Robbins, 2003). Consequently, agrarian leadership represents a new contextual method for dealing with leadership in a green economy. Agrarian leadership is dened as a contextual inuence that has an impact on subordinates attitudes and performance by leaders who are both value and results driven. Agrarian leaders view their followers as critical parts of the socio-technical system. Therefore, technology does not drive the value system of society. Before the Industrial Revolution, life was centered on land and labor. Life was simple for the leader in agrarian society. Rural living revolved around the land; owning it was equivalent to self-sufciency and liberty. Although Americans lived in a tribal structure prior to the Agrarian Era (1650-1849), farming communities operated in a decentralized economy (Design Share, 2006). Agrarians exercised a strong spirituality and a deep respect for the environment. There was a genuine concern

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for neighbors and co-workers. Being a leader was a major responsibility. In fact, farmers were viewed as heroes because of their hard work, contributions to society, independence, and moral standards. A mans word meant something. With the transition from an agrarian to industrial society, untainted leadership was lost. The Industrial Revolution meant major changes to the American way of life. Before that period, over 90 percent of Americans lived rurally. Farmers inuenced society. Between 1870 and 1900, rural areas doubled and urban areas tripled. Farmers were cautious about these societal changes (Dandom, 1995). Industrial managers faced challenges such as generating new efciencies while expanding operations. Chaos theory was in effect because those managers could not control these organizational changes, which happens both inside and outside of the organization (Daft, 1995). Factory managers lacked a process to motivate the unskilled (former agrarian) workforce. This era created new advances and new problems. The Industrial Revolution forever changed agrarian society, primarily due to market economy and technology. In fact, the integration of the market economy, technology, and the introduction of corporation had severe consequences for rural living. During the course of the next 100 years, rural life was changed due to vast technology and signicant economic changes catapulted farmers into an industrial society with different values. This resulted in a disorientation, bewilderment, and loss of condence and security of the agrarians. Agrarians were less self-sufcient and became economic market slaves. This created conict because farmers and industrial society ultimately having different values. Farming became more productive, but fewer workers were needed (Hayter, 1968). As a result of these technological advances, agrarians lost their independence, family focus, and societal inuence on moral conduct. This example does not match the previous statement. It seems you are bouncing back and forth between farmer and manager. For example, some managers found factory workers breaking equipment (Wren, 2004). Consequently, managers tried to institute positive and negative rewards; these managers used conventional wisdom: the hungriest man makes the best worker. Once again mankind was moving away from his calling the land. Therefore, advances in technology do not always equate to a better society. Many techno advocates would argue that technology has provided superior virtues. This may not be the case. First, technology does not automatically improve society. In over 50 years, America has gone from rural to city and from national to international markets. Critcheld (1991) argued that these advancements have weakened our core values such as family tradition and work ethic. Second, the disintegration of the agrarian code has destroyed our moral stability. Davidson (1990) further suggested that technology and the economic prestige of the agricultural system brought a host of social ills such as poverty, depopulation, and soil erosion. Finally, some people may consider agrarian lifestyle primitive. However, agrarian values should not be overlooked as good leadership attributes. In restructuring any complex organization, several key components are necessary to ensure success. Prewitt (2004) argued that the current leadership theories are based on modernist assumptions and are out of date with leading todays postmodern organizations. Given this dilemma, there needs to be a different kind of twenty-rst century leadership. America continues to advance technology rapidly while the values of society continue to disintegrate with each innovation. In society, many leaders exhibit unethical conduct, pursuing wealth. Throughout American history, society has seen the consequences.

8. Strategic implication: lesson learned for todays organizations Agrarian leadership can be a signicant factor for organizational success in the green economy. Therefore, establishing good benchmarking processes become critical. Hyatt (2001) argued the merits of benchmarking as a continuous process of identifying, learning, and implementing best practices to optimize opportunities to gain competitive advantage. In fact, a strategic benchmark approach may provide promise in identifying upstream and changing domain measure (Sarkis, 2001). Furthermore, Jutras (2009) discovered that sustainability brings together strategies to make sure that top performance related to the business, the environment, and society occurs. His research also showed that organizations who have strong sustainability programs were able to reduce expenses while making signicant improvements in customer service. In addition, an increasing number of companies are required to provide veriable evidence of social and environmental impact while at the same time being able to demonstrate real business benets. Matching those environmental and social stewardship requirements is helping organizations make clear, actionable, and measurable improvements to their bottom lines, which in turn helps ensure the sustainability of their organization. This new challenge for todays organizational leaders is to successfully guide their organizations through volatile economic times and deal with the topic of sustainability (Fable et al., 2005). This has become an increasingly complex task for organizational leadership and many more organizational failures await those not prepared. According to McCann and Holt (2010), the need to examine and dene the concept of sustainable leadership expands in importance. It appears that leaders in todays organizations are utilizing the concept of sustainability as a competitive advantage and a method to continually improve overall performance. The concept of environmental sustainability is not a new one, but the recent increase in focus is important to leadership and business (Leuenberger, 2007). The welfare of the environment has been receiving increased attention because of public and private concern for environmental health and limited resources considerations. Many believe that eco-sensitive leadership, which operates in conjunction with the natural environment should be at the center of organizational decision making and practices, is in contrast to the conventional leadership model that focuses on the conventional goals of pure prot, business growth, and stakeholder expectations. Hanson and Middleton (2000, p. 96) boiled their denition of eco-sensitive sustainability to requirements for: . adopting a long-term-frame (at least generational, well beyond usual business or political scales); . sensitivity to the complexity of the natural world; . the adoption of basically non-anthropocentric viewpoints (Fox, 1990; Hanson, 1997); . awareness of environmental risk; and . the use of non-economic valuation techniques. In addition, the eco-sensitive leader will need to focus the on becoming organizationally eco-sensitive above the conventional goals of prot. The eco-sensitive organization must learn and use new information and theory about the natural world and revise its

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organizational and world-view in consideration of this knowledge and paradigm change (Hanson and Middleton, 2000). Modern management theory has disassociated business organizations from the rest of nature. Therefore, organizations have been encouraged to behave in ways that destroy their natural and life-support systems (Gladwin et al., 2005). Reintegration is required where management scholars consider the social and environmental systems and how organizations exist in the complete external environment. The paradigms are shifting in management theory from the notion of organizational science and a constricted view of assumptions to that of system interconnectedness or a more cosmopolitan outlook in terms of the concept of sustainable development. The foundation of agrarian society was the family. In the nineteenth century, the family was the main welfare institution, providing moral standards, education of children, and assistance to neighbors. Everyone in the family assisted in this working environment, wife, children, and extended families. Neighborhoods played a key role by providing common ethnic heritage and supporting moral, community standards (Dandom, 1995). Work and home life were intermingled. The family was both multi-generational and extended. A return to agrarian values will foster new belief systems rather than the status quo. Jones (2008) maintained that a shift in Americas energy strategy would provide a new chapter for human civilization. He further suggested moving to move innite and eternal power sources such as solar energy. According to the National Renewable Energy Lab, the major hurdle for adapting green technology is not legal, nancial, technical, or ideological. Green economy-driven companies cannot nd enough green-collar qualied employees. The green economy promotes a different value set than the previous technology boom. Currently, there is a constant beating of the economic drum for more growth and opportunity. Therefore, people push for newer opportunities to faster growth by technology such as microtechnology and nanotechnology. McKibben (2007) further suggested that this aggressive pursue for economic growth has led to faulty decision making by leaders. In fact, McKibben argued the transition in the modern era from individualism to hyper-individualism where it is all about the individual and his family, not the community. Therefore, hyper-individualism could promote the inequality of others and contribute to the decay of American society. Jones (2008) further declared that the present economy provides socio-economic inequality. He explained about fewer opportunities for working people, growing disparities between the races, and the hording of immerse wealth and privileges by the elite. Yet, the green economy could provide new products, services, and technologies to jump start societys standard of living. This could create new green jobs. This new economy would improve community health and provide opportunities to build sustainable wealth. Additionally, green collar workers have the following values: . higher respect for the environment than blue collar workers; . family supporting; and . career track oriented (Jones, 2008). This situation will foster inclusiveness and outreach to all. Given this framework, ordinary workers will be empowered to become inventors of their own futures. Therefore, shared prosperity is a major value in the green economy (Table III).

Findings 1. There is little research in how the green economy will impact the strategy, structure, and culture of todays organizations 2. New leadership theories may need to be developed to assist organizations in developing the right kind of leadership for the green economy 3. The creation of green jobs may infuse organizations with more emphasis on ethics, values, and leadership competency 4. The overly dependence on new technologies to create jobs and sustain societys quality of life carries unintended consequences

Recommendations

Further studies on the green economy need to be conducted on the triad areas of strategy, structure, and culture Further studies in green organizations should be considered to determine the type of leadership present based on employee and management perceptions Further studies in a qualitative and quantitative manner need to be conducted for green organizations Researchers and practitioners should determine if agrarian leadership fall on the continuum of the full range of leadership model (see continuum Bass and Avolio (1993)) 5. Agrarian leadership may offer organizations a Further renement and identication of the better ability to lead postmodern workers in the characteristics of agrarian leadership and development of a survey instrument needs to be green economy explored in order to study this leadership style. Perhaps, analyzing if training in agrarian values can improve organizational performance

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Table III. Agrarian leadership ndings and recommendations

9. Conclusion In order to better combat future uncertainties in the marketplace, contemporary organizations need a different leadership model. This new economic revolution will start with a fresh, positive outlook from a new kind of engaging leadership. Benchmarking the concept of agrarian leadership will bring justication for much needed improvements. Benchmarking can be a catalyst for assisting organizations to become more focused and competitive thus improving the national economy. In order to implement meaningful changes, executives, legislators, educators, and environmental advocacy groups must take a leading role in this reform. This paper demonstrated that benchmarking leadership theories in order to build a new leadership model for the green economy will be benecial to both practitioners and researchers. Through this process, the triad variables of leadership, values, and culture were analyzed. The paper found the following key issues: . there is little research in how the green economy will impact the strategy, structure, and culture of todays organizations; . new leadership theories may need to be developed to assist organizations in developing the right kind of leadership for the green economy; . the creation of green jobs may infuse organizations with more emphasis on ethics, values, and leadership competency; . the overly dependence on new technologies to create jobs and sustain societys quality of life carries unintended consequences; and . agrarian leadership may offer organizations a better ability to lead postmodern workers in the green economy.

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From the research, there are several implications for researchers and practitioners related to improving the personal and organizational success of leaders guiding their followers in a green economy. Many countries hope that the green economy will be able to improve their nancial situation. Yet, organizations are struggling with the issues of ethical behavior by managers and how to motivate their employees toward greater performance. A new leadership based on agrarian values may be a positive step in addressing these matters. Finally, this study is signicant because it presents a theoretical framework for interpreting how agrarian values can work in building the quality of life when applied in a green economy.
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Vroom, V. and Jago, A. (1988), The New Leadership: Managing Participation in Organizations, Prentice-Hall, Engelwood Cliffs, NJ. Wren, D. (2004), The Evolution of Management Thought, Wiley, Hoboken, NJ. Yukl, G. (2002), Leadership in Organizations, Pearson Education, Delhi. Further reading The American Productivity and Quality Center (2010), Benchmarking, available at: www. apqc.org/portal/apqc/ksn/Glossary%20of%20Benchmarking%20Terms.pdf?paf_gear_ idcontentgearhome&paf_dmfull&pageselectcontentitem&docid119519 (accessed 19 April 2010). Zairi, M. (1996), Effective Benchmarking: Learning from the Best, Chapman & Hall, London. Corresponding author Daryl D. Green can be contacted at: Daryl.Green@lmunet.edu

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