ob - rough notes

8/8/2019 Ob - Rough Notes

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CONSUMER DISCRIMINATION IN MARKET PLACE

Rationale for Studying and Understanding Consumer Discrimination forAdvertising and Public Relations Professionals

It is widely recognized that the size and growth of the multicultural consumer segment isclosely linked to successful marketplace performance in todays economy. For example,the Selig Center report on the multicultural economy and multicultural purchasing powerindicates that consumers of color comprise approximately one third of the U.S.population and wield over a trillion dollars of purchasing power. The Selig report alsoestimates that in 2009, the combined buying power of African Americans, Asians, andNative Americans will be more than triple its 1990 level of $456 billion, and exceed $1.5trillion. Over this nineteen-year period, the percentage gains in multicultural buying

power of all of multicultural target markets will grow much faster than the Whiteconsumer market.

How multicultural consumers perceive they are being treated will become more and moreimportant for marketers, advertisers, those in the advertising and public relationsprofession, and public policy makers. This will be particularly true for segments of theeconomy, industries, and businesses where multicultural consumers represent asignificant share of the market and/or significantly impact the bottom-line performance ofthe business. For example, according to a national shopping behavior study, AfricanAmerican and Hispanic consumer groups now account for 25% - 30% of DepartmentStore sales. When multicultural consumers perceive that their race/ethnicity is

contributing to mistreatment in the marketplace, marketers run the risk of alienating theseconsumers, and, as a result, suffering severe economic consequences. For example, salesat Yvonne Elibe's Dearborn, Mich., Treasure Cache fell more than 50% following anincident involving marketplace discrimination, and after a landmark discrimination case,Dennys conducted a poll of potential customers and found that close to 50% of AfricanAmericans said they would never come to Dennys.

Recently, marketing, advertising, public relations, and public policy researchersincreasingly have turned their attention to assessing marketplace discrimination. Onereason for this interest is that there is mounting evidence that many marketers may befailing to provide a welcoming environment for consumers of color. For example, amail survey of 1,000 households found that 86 percent of African Americans felt thatthey were treated differently in retail stores based on their race, compared to 34 percentof Whites. Also, a Gallup Poll Social Audit Series on Black/White Relations in theUnited States, noted that 35 percent of Blacks say they are treated less fairly than Whitesin neighborhood shops, 46 percent say they are treated less fairly in stores downtown orin malls, and 39 percent say they are treated unfairly in restaurants, bars, and theaters.This poll also indicated that twenty-seven percent of all Black respondents, and 41percent of Black males between 18 and 34 years of age, felt that they were treated


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unfairly in the last 30 days in a store where they shop. Also, the popular press hasreported numerous accounts of marketplace discrimination against consumers of color. Anewspaper article on the new face of retail racism in America reported the followingincidents:

Crisis Communication

Strategies

Analysis

Case Study: Denny's Class Action Lawsuit

This is a case study of a major restaurant chain that faced a crisis as a result ofrace discrimination against its customers practiced by several employees of thechain. The first act of discrimination came December 31, 1991, when 18 youthsvisited a Denny's restaurant in San Jose, Calif., and claimed raciallydiscriminatory application of a late-night pre-payment procedure (Chin, Naidu,Ringel, & Snipes, 1998). Essentially, because the youth were African-Americanand it was late at night, they were asked to pay their bill before they could beserved.

Almost immediately the company worked with the NAACP to learn how thecompany could improve in areas of diversity, resulting in a "fair share"agreement. Denny's representatives met with NAACP representatives and legalrepresentatives of the youths to resolve the youths' concerns. Denny's agreed toimmediately suspend pre-payment procedures in San Jose and to review itspractices at other Denny's restaurants around the country.

Although Denny's received negative press coverage because of this incident, thecrisis soon passed. It didn't grow into a major crisis until a more highly publicizedincident occurred 2 years later in a Denny's restaurant in Annapolis, Md. May 24,1993, six members of the uniformed division of the U.S. Secret Service filed suit

against Denny's, claiming racial discrimination when they were trying to receiveservice April 1 of that year (Chin et al., 1998). Less than a week after signing anagreement with the youth in the 1991 incident, a waitress at the Denny'srestaurant in Annapolis refused to serve breakfast to 6 black Secret Serviceagents. This set the stage for a full fledged public relations disaster.

Primary Evidence. March 25, 1993, Denny's issued a press release (Chin et al,1998) stating the chain reached an agreement with the U.S. Department of


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Justice to communicate and reinforce the restaurant's policies regarding theequitable treatment of all customers, regardless of race or color. This releasewas in response to the discriminatory act in San Jose. The agreement focusedprimarily on actions to be taken at California restaurants. The procedure to askcustomers to pay in advanced was eliminated as a result of the agreement. In the

press release, Jerome Richardson, chairman and chief executive officer of TWServices, Inc., parent company of Denny's, said "Our agreement with the JusticeDepartment is an affirmation of our commitment to treating all customers fairlyand we intend to go even further with our own programs.

Our company does not tolerate discrimination of any kind. Any time evidence ofsuch behavior is brought to our attention, we investigate and appropriatedisciplinary action is taken." (Denny's, 1993a, p. 2). Also as part of theagreement, Denny's developed a plan to communicate its stance againstdiscrimination to its employees. This plan included special video trainingprograms for all Denny's employees, public notification of Denny's non-

discrimination policies, as well as the hiring of an administrator to keep records ofthe plan and its progress. The plan also called for seeking ways to enhanceopportunities for minorities in hiring, promotion and franchising. Finally, the plancalled for diversity and sensitivity training for company leadership.

In conjunction with the press release, Denny's issued an open letter to Denny'scustomers and communities. The letter was posted near the cash registers of allDenny's restaurants. The letter, signed by Richardson, declared "we want tomake it clear to all of our valued customers that Denny's does not and will nottolerate discrimination of any kind" (Denny's, 1993b, p. 1).

In addition to this pledge, the letter acknowledged problems in the Californiarestaurants but denied any pattern of discriminatory behavior at its restaurants.The letter also pledged to terminate any employees engaged in discriminatoryacts against its customers. It concludes by giving customers a toll free number tocall if they have questions or comments.Taking such an active stance against discrimination, company officials felt theyhad put a stop to the potential disaster.

However, it was only one week later that the second major incident took place atthe Denny's restaurant in Maryland. The Maryland incident couldn't have beenworse timing for the company. It appeared that Denny's wasn't taking its ownpolicies seriously. It appeared the company was reneging on itsantidiscrimination pledge.

Immediately, the company issued an internal memo to all of its employees.Again, the front man was chief executive officer Richardson. The memoencouraged employees to call a special telephone line established by thecompany to report any other incidents of discrimination. Richardson stated "I amdistressed that some people in our company haven't gotten the message that we


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will not tolerate unfair treatment of customer" (Denny's, 1993c, p. 1).

In addition to the firm message contained in the memo, it also addressed thegreater majority of hard working employees who do not practice discriminationand support the company's policies. In the memo, Richardson also stated "We

know that those of you who work in our restaurants have a difficult job. We arehere to support you" (Denny's, 1993c, p. 1). The letter singled out Denny'sAfrican-American employees by acknowledging the difficult position they havebeen placed in due to the transgressions of a few.

Chin et al. (1998) cites Denny's (1993) television commercial, which highlights acorporate pledge that was signed by all Denny's employees to support the anti-discriminatory policy. The commercial features Richardson and severalemployees, each repeating different lines of Denny's pledge. A voice over in thecommercial states "All of us at Denny's want you to know that we care about yourfeelings, which is why all 46,000 of us have signed this pledge and reaffirm our

commitment to you" (Chin et al., 1998, p. 185).Advantica, now Denny's parent company, has many articles of evidence of itsanti-discriminatory policy.

Under its diversity programs web page (2002), it has four subtopics: initiatives,philanthropy, awards, and "what's new." Its initiatives Web page claims thatacquisition boards consist of 11 directors, of which 36 percent are women andpeople of color. It also states that several of the members of the Advantica Boardof Directors are minority members. Advantica's philanthropic page showsevidence that the company supports several charities that focus on minorities,such as Save the Children and the National Civil Rights Museum.

The philanthropic pages also show evidence that its diversity through minority-owned franchises and the company's contracts with minority groups continues toincrease. The site also shows evidence that the company is being recognized,through awards, for its increased focus on diversity. For example, Advantica wasranked number 1 by Fortune magazine in its list of "America's 50 BestCompanies for Minorities" for two consecutive years - 2000 and 2001.Interestingly, the site claims that the Anne Arundel Branch of the NAACP inAnnapolis, Md., named Denny's Corporation of the Year in 1996. Annapolis iswhere Denny's class-action suit with the 6 Secret Service Agents originated. Oneof the company's best evidences that it has committed itself to the fair treatmentof its customers is the 27-minute video that can be displayed on line or orderedfor free from the company.

In a 1998 editorial in the Weekly Newspaper of the Food Service Industry(Adamson, 1998), new Advantica chief executive office James Damson outlinedhow a company could overhaul its culture. He states that there are 10 drivingfactors behind Denny's success: diversify your board of directors, be a zealotabout diversity, make someone accountable, make sure everybody in the


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company owns diversity, and set clear policies and communicate them. He alsosaid that a company must train its people, find out impediments to inclusion,monitor, measure and report, reward progress, and celebrate success.

Secondary Evidence. Although Denny's faced an explosive public relations crisis,

it appears that its public relations team made all the right moves, as can beevidenced in numerous articles that appear in the mass media. A Fortune article(Faye, 1996) titled Denny's Changes its Spots, outlines the steps taken byDenny's to overcome its crisis. According to the article, Richardson movedquickly to resolve the law suits filed against the company. By 1995, Denny's paid$54 million to 295,000 aggrieved customers and their lawyers. As part of thesettlement, Denny's promised to treat all customers equally in the future. Theconsent decree also mandated that Denny's publicize its nondiscriminatorypolicies and train employees in diversity issues. An independent civil rightsmonitor was appointed to supervise the restaurant chain for 7 years and toinvestigate further claims of discrimination.

A Restaurant's & Institutions article (Rousseau, 1997) focused on Denny'sattention to diversity in its new television commercials which aired shortly afterthe crisis. The new campaign "rolled out a new $4 million-plus ad campaigntargeted to African Americans" (Rousseau, 1997, p. 22). The campaign built onthe theme "You work hard for your money." The message is "Welcome back toDenny's; we respect you, know that you have choices on how to spend yourmoney, and want to be your top choice. The article also states that Denny'screated a Spanish commercial targeting Hispanic Americans. In another Fortunearticle (Faircloth, 1998), the author asks "how did these racial sinners becomerole models for diversity? Hint: quickly, decisively, and sincerely." (p. 109.).

The article states that although Denny's overcame its negative image after thelawsuits, some question its motives. The article quotes Joseph Lowery, formerhead of the Southern Christian Leadership Conference, who stated that hecompares the corporate initiative to a church offering. "Maybe you put yourmoney in the plate because you're scared of going to hell; maybe you do it tosupport the good works of the church. Motivation is not important, what we wantis results" (Faircloth, 1998, p. 109). Another Restaurants & Institutions article(Dailey, 1998) states that Denny's not only focused on putting a stop todiscriminatory practices toward its customers, it also focused on making therestaurant chain one of the most diverse in the nation. The article states that in1993, only one Denny's franchise belonged to a minority. By 1998, 35% of thefranchised stores were minority owned.

The secondary evidence examined has some commonalities. By and large, themedia reacted positively toward Denny's immediate actions to admit blame forthe discriminatory acts. Also, the media reacted favorably toward the immediacyand urgency Denny's placed on the situation. Some hold Denny's up as themodel for others to follow in similar circumstances.


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Scholarly Journals. Chin et al. (1998) stated that Richardson's visibility during thecrisis helped Denny's credibility with the media. Another credibility booster camewhen the company teamed with the NAACP to create real and sincere solutionsto the crisis. One criticism made by the authors is that Denny's never mentioned

the lawsuits in any of its commercials, which may have led to some confusion bycustomers. The article also states that Denny's overcame its crisis through otherworks such as making contributions to minority groups in the sum of $100,000.The company also pledged increased contracts with minority vendors.

Discussion. Denny's discriminatory practices by some employees were clearlywrong. However, company leaders and public relations practitioners should becommended for their actions following the 1993 crises. By accepting the blameimmediately and working with the NAACP, the company employed forgivenessstrategies to resolve the public relations crisis. According to Coomb's Crisis TypeMatrix (1995) the type of crisis Denny's faced would be considered a

transgression. A transgression is a crisis created by an internal component of anorganization that was committed intentionally.

This was the case in Denny's situation. Although there was a set policy of non-discrimination, some members of the organization chose to ignore the rules. Anacceptance of blame is evidenced by the company's willingness to settle theclass action lawsuit and compensate the injured parties for a sum of $54 million.This is considered remediation. In several of its commercials and writtenadvertisements, CEO Richardson directly apologized to Denny's customers forthe discriminatory practices and pledged not to tolerate discrimination.

Furthermore, any employee engaging in discrimination would be fired if found tobe practicing discrimination. This was considered repentance. Finally, thecompany moved to rectify any further problems with discrimination. In addition toworking toward diversification in its contracting and franchising practices toinclude larger minority parties, the company worked diligently to train itsemployees to eliminate discrimination. This was the rectification phase.

DiscussionDenny's:By accepting the blame immediately and working closely with the NAACP, thecompany employed forgiveness strategies to resolve the public relations crisis.

The use of remediation was evidenced by the company's willingness to settle theclass-action lawsuit and quickly compensate the injured parties with a sum of $54million.

The company also demonstrated repentance when its leaders directly apologizedto Denny's customers and pledged not to tolerate discrimination in the future.


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Finally, the company moved to rectify any further problems with discrimination bydiversifying its contracting and franchising practices and training employees onnon discriminatory practices.

A TALE OF THREE CITIES

The case of Dennys Restaurant revolves around 3 cities in USnamely ;

Spartanburg, South Carolina San Jose, California Annapolis, Maryland

Spartanburg, South Carolina - The Curtain Raiser

Spartanburg, South Carolina gave birth to Jerry Richardsonsentrepreneurial skills from where he built up his fast food andfamily type restaurant empire along with his associate partners,

acquired Dennys and its subsidiary chain to become the 5thlargest restaurant company in US. Jerry Richardson controlledhis business from Spartanburg, the Corporate Head Quarters forTW Holdings. Richardson in a an effort to improve Dennys

bottom line restructured the company, reduced nonrevenueearning cost centre staff, simplified the operations and introducedaccountability all across the board. He also focused on key areaslike menu development, marketing and quality service to be more

competitive in the market place. Under Richardsons leadership,Dennys had a goal to be the best foodservice company in theworld by the year 2000. Dennys acquisition, in terms of theeconomy was not at an ideal time due to recession. As a result ofthe various ownership transfers, including a leveraged buy-out,there were increasing demands for revenue and cash-flow to


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service its debt. The acquisition resulted in TWs debt to equityratio of 7:3. Richardson initiated a recapitalization plan to reduceits debt and support Dennys capital expenditures which wasaffected due to huge debts and its interest expense of $ 200 million

a year. Richardson sold of TW Holdings 48 % share to KKR andalso sold off one of its non-food business.

San Jose, California Ground Zero

Dennys a major restaurant chain faced a crisis as a result of racediscrimination against its customers practiced by several

employees of the chain. The first incident happened after 30thDecember 1991, when an African American group of studentsvisited a Denny's restaurant in San Jose, in California and claimedracially discriminatory behaviour because of a late-night pre-

payment procedure. This discretionary customer service policy wasinstituted by some of Dennys manager on coloured people in aneffort to reduce so called dine and ditch or walkouts(customers who leave without paying their bill) incidences

frequently happening during late nights.

Cause: Richardsons effort to improve Dennys bottom line mayhave prompted him to take some bold measures likecommunicating the basic message of improving profits or suffer

job loss. Simultaneously, there were indications of significantlayoffs at the headquarters. Burdens were eased off from theGeneral Managers and collective responsibility at all levels wasinduced. In the wake of these changes, the burden of managing the

daily operations of the business fell on lower management, storemanagers. Therefore, apparently, one response to this heightenedstate of concern was a fixation on preventing walkouts,customers who would leave without paying their bill. The fear thatAfrican-American customers would not pay their bills is evidentfrom the readings above. It also appears that one specific result


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was to target African-American customers for special,discriminatory treatment. Moreover, there were apparently noadverse consequences for those managers or employees who

blatantly violated civil rights or discriminated against African-

American customers even long before Richardson joined thecompany and practices such as blackouts were very much inexistence. Further to the San Jose incident there were other chargeslike denying Free Birthday Meal for a child from the minoritycommunity at a California Dennys.

Effect : Dennys was perceived soon after as a company with acorporate policy that discriminated against minorities.

Crisis Management : Richardsons was extremely prompt tocontrol the damage and take corrective actions against employeesusing such inequitable policies. He engaged senior executives withthe students lawyers, and the Justice Department to avoidlitigation. He personally approached local NAACP leader CharlesDavis to help him to reverse the effects of charges of consumer

discrimination in market place. A comprehensive programintended to protect minority against discriminatory practices wasformalised called the Fair Share Agreement which wasestimated at $ 1 billion. Richardson eventually to improve his

public relations strategy removed his COO Bernard Scott. AnOpen Letter from Richardson was also prepared for publicationin media and company premises to gain back group consumerconfidence.A Consent Agreement was drawn up to communicateand reinforce its policy of equitable service and employment to all.

This was initiated in response to case precedence against Shoneyson employment discrimination.


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Annapolis, Maryland The Action Replay

Publicised incident occurred 2 years later in a Denny's restaurant inAnnapolis on 24th May, 1993, when six members of the U.S. SecretService filed suit against Denny's, claiming racial discriminationwhen they were trying to receive service on April 1 of that year. Awaitress at the Denny's restaurant in Annapolis refused to serve

breakfast to 6 black Secret Service agents

Cause: This set the stage for a full fledged public relationsdisaster. Simultaneous occurrence of the same specific actionsacross indicates strongly that Dennys communication with itsemployees were very weak in spite of its continued efforts tomaintain a positive image with all its audiences. Dennys lackeddiversity internally as well as externally. Figures revealed thatDennys and its parent company, the management and the

employees had been predominantly white. The franchises and thesuppliers also lacked diversity.

Effect : The charges reignited the public once again inspite of allefforts by Richardson to reverse the effects of charges ofconsumer discrimination in market place.


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Dear Prof & Classmates,

We have to understand the fact, that the size and growth of themulticultural consumer segment is closely linked to successfulmarketplace performance in todays economy. With the newemerging world economies like China, India, Brazil and Russiafollowed by Egypt, Indonesia, Mexico, Philippines, South Africa,South Korea and Turkey, the increase in multicultural buying

power of all of multicultural target markets will grow much fasterthan the white consumer market. Business outfits which are

dependent on mass consumer market and where multiculturalconsumers represent a significant share of the market and orsignificantly impact the bottom-line performance of the business,market perception of customer service, customer treatment willincreasingly become more and more important. When any groupof consumers perceive that their race, caste, creed and ethnic

background is contributing to mistreatment in the marketplace andmay be failing to provide a welcoming environment for them,

businesses run the risk of losing permanently these consumers, andas a result may suffer severe consequential losses. Therefore, in myopinion, to eliminate such social stigmas and to create a healthyand robust business environment one should not encourageconsumer discrimination in the market place and make sincereefforts to combat such discriminatory policies to make the world a

better place.

Inspite of Richardsons remarkable entrepreneurial spirit andproactive leadership, it is evident that the organisation had themajor weaknesses in its communication strategy, HR policies andMIS.
http://en.wikipedia.org/wiki/Egypthttp://en.wikipedia.org/wiki/Indonesiahttp://en.wikipedia.org/wiki/Mexicohttp://en.wikipedia.org/wiki/Philippineshttp://en.wikipedia.org/wiki/South_Africahttp://en.wikipedia.org/wiki/South_Koreahttp://en.wikipedia.org/wiki/Turkeyhttp://en.wikipedia.org/wiki/Egypthttp://en.wikipedia.org/wiki/Indonesiahttp://en.wikipedia.org/wiki/Mexicohttp://en.wikipedia.org/wiki/Philippineshttp://en.wikipedia.org/wiki/South_Africahttp://en.wikipedia.org/wiki/South_Koreahttp://en.wikipedia.org/wiki/Turkey


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Roleplay as Jerry Richarson

Communication Strategy There is an absolute need and

urgency to appoint an external Communication & PR agencyto plan, re-work on effective goal oriented strategies toimprove its communication with its internal and externalcustomers alike.

Restructure HR policy and processes in areas ofrecruitment, training, induction and orientation to encouragediversity in its environment.

Formidable use ofFormal Power, i.e. Coercive, Reward and

Information (feedback) by the senior management to preventsimilar recurrence,

Effective use ofPersonal Power, i.e. Expert & Referent bythe marketing, advertising and publicity departments for

brand management. Ex : Dennys Restaurant Is EverybodysRestaurant..

Introduce performance linked growth and rewards across theorganisations customer interface unit

Introduce Customer Relationship Management(CRM)cell Integrate customer satisfaction level indicators within Key

Performance Indicators (KPIs) Social Contributions Allocate and donate funds for

welfare and development of coloured and multiculturalpeople in association with NGOs and media as well


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Having read the case, what is your opinion? What could have

been done differently?

Restructuring and Downsizing are the two key issues discussedhere in this analysis. Corporate restructuring and downsizing arealso commonly referred as reorganising, re-engineering orrightsizing in the marketplace. However, regardless to the rightterminology, downsizing essentially refers to layoffs that may ormay not be accompanied by systematic restructuring programs,such as staff reductions, departmental mergers, plant or facilityclose downs, or other forms of reducing salary & wages expenses.

Corporate downsizing results generally because of adverseeconomic conditions due to poor management, improper planningand lack of vision. Corporate downsizing results from both pooreconomic conditions and company decisions to eliminate jobs inorder to cut costs and maintain or achieve specific levels of

profitability. Companies may lay off a percentage of theiremployees in response to these changes: a slowed economy,mergers, demergers, acquisitions, phase out products or services

loss of market share, or a multitude of other events that have anegative impact on specific organisations or entire industries. Inaddition, downsizing may stem from restructuring efforts tomaximize efficiency, to cut corporate bureaucracy and hierarchyand thereby reduce costs, to focus on core business functions andoutsource non-core functions, and to use part-time and temporaryworkers to complete tasks previously performed by full-timeworkers in order to trim payroll costs.Without thoughtful planning, restructuring/downsizing can lead to

failure to achieve the results needed and other adverse outcomes outcomes such as litigation, low performance and morale ofremaining employees, burnt-out decision makers, and a markeddecline in marketplace reputation and future recruiting status(Deems, 2008).


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I advocate taking action in a quick and decisive way. Oftentimes itis tempting to do things quickly, like removing a bullet from insidethe skin and flesh in one fast motion so as not to draw out the pain.This doesnt mean we should make the decision to downsize oneday and hand out pink slips the next. Without thoughtful planning,restructuring/downsizing can lead to failure to achieve the resultsneeded and other adverse outcomes outcomes such as litigation,low performance and morale of remaining employees, burnt-out

decision makers, and a marked decline in marketplace reputationand future recruiting status (Deems, 2008).AT&Ts Public Relations Department did a good job before theSep 1995 announcement in order to condition the stakeholders:

business analysts, employees, vendors, and the media. Newsreleases and press conferences were utilized to introduce the publicto the new AT&T. Documents answering specific concerns of thecompanys various stakeholders were created, distributed and

published. An open letter from the CEO to the employees was alsoprepared and sent out. All in all it was a good effort, but it couldhave been better. One very noticeable missing component in thistype of seemingly one-way communication is the absence offeedback from the employees. In my opinion, that was a bigmistake.

I think the planning time needed to effect restructuring/downsizing

should not take too long and should take into consideration anumber of factors as suggested by Richard Deems (2008). Lengthof time to:


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What could have been done differently?

After extensive reading and understanding AT&T restructuringand downsizing, the following factors needed to be consideredwithin an optimum time frame to plan and initiate the process asfollows ;

Appoint an external agency, experienced in providing expertise

in restructuring and downsizing, Identify and establish required skills and resources after proper

evaluation of the business plan and layout, Identify positions which cannot make future contribution or has

become redundant,


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Make a complete analysis of the present available humanresource in context to pre-layoffs and post-layoffs to minimisedoubts,

Identify and select the best spokesperson for the company to

interact with the media, Prepare and finalise a suitable compensation package to be

provided to the affected employees, i.e. severance pay, end ofservice benefit, extension of health insurance, early retirement

pension plans, rehabilitation program, etc. Finalise a suitable date, time and place to break the news to the

affected employees, Prepare to communicate the best story to the affected employees

based on considerable facts and figures Communicate the story to the remaining employees to avoid

rumors, misconceptions and insecurity,

Standardize the same procedure for future retrenchments.

Train the concerned man management units to break the newsof downsizing,

Coordinate and monitor the company and administered job

banks and appointed rehabilitation counselors to effectivelysupport the retrenched employees at the earliest.

Without sensible planning, restructuring and downsizing can leadto failure to achieve the desired outcome and can trigger ofnegative outcomes such as low productivity, poor performance,low morale of existing employees, managers buckling under

pressure and a tainted corporate image.


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How much time for restructuring/downsizing planning time?

I think it is judicious to take whatever time is needed so that wecan be confident that all issues have been addressed, that the plan isas solid as possible, and that weve reduced the risks to theorganization

How do you think difficult decisions such as downsizing/layoffs

should be communicated to employees?

a. Use care and control

As a leader, one should empathise and show that he cares about people and stay in control of the process. Victims of thecircumstances would be rather happy to note that the managementis not insensitive and it feels too.

b. The manager and executive communicate the message

directly,

The basic guideline is that the exiting employees direct manageror executive tells the exiting employee.

c. Communicate individually or in small group or sometimes

a large group.

There is no basic thumb rule on the best possible practice.Individual sessions are the ultimate as it is personal and it allowsto deal with concerns on an individual basis.Whether one use individual or group meetings, it will justify thedecision to downsize, and the basis of preparing the exit list.


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d. Do the same things in all our locations.

Proper coordinated efforts to be made to communicate the messageof downsizing at all the locations at the same time. The leader ofthe organisation should visit all the locations simultaneously withina short period of time. Physical presence cannot be replaced withany other forms of communication like video conferencing, livetelecast, company news letter, etc.

e. Tell the people early in the week and early in the day.

Studies and research have consistently shown that the first week ofunemployment is the toughest. When we terminate early in theweek and early in the day, we have the opportunity to observereactions from remaining employees. If some people havequestions, we can answer them before the end of the day, not aftera long weekend has passed. If some remaining employees areangry, we have the opportunity to deal with it before those people

have a chance to let it grow. It just helps us stay in control.

f. Plan, prepare, and practice what to sayand know what not

to say.

Downsizings are not the time to go with the flow and say whatevercomes to mind. Do that and we could end up in court. Worse yet,we could say things that shove our organization into litigation andto the bottom of the list of great places to work in our community.

Here are five key guidelines. The first two are especially

critical.- Prepare our script.- Practice what were going to say.- Avoid chitchat.- State the reason for the meeting.- Dont argue.


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g. Have the letter ready.

You may be thinking, What letter? The letter is

individualized and summarizes the assistance to be provided.Over the years, research has proven that this letter can saveus lots of time. It also helps people who are exiting.People have a tendency to forget details after being told their

job has been cut. The letter, however, gives them somethingtangible to look at when they get home. When they sit andwonder about severance and last day of work and things likethat, they can look at the letter. It explains it all. They wont

need to call us.Someone, of course, has to prepare and print those individualletters before the downsizing announcements. Here is whereHR can be very helpful in pulling together the data needed todetermine severance, vacation time accrued, and other detailsof the assistance our organization will be providing. Wellneed someone, though, who can be trusted to maintainconfidentiality before the downsizing takes place.

Handing out the letter becomes an important part of thenotification meeting. Take the time to go through the letter with theindividual, and answer any immediate questions. Additionalquestions may come up later, once the person has had a chance todigest what has happened.


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MIDERM EXAM

Start Date June 8thEnd Date June 14th Midnight GMT

PLEASE READ THE FOLLOWING INSTRUCTIONS CAREFULLY

Class,

We have finally arrived at that much anticipated MIDTERM EXAM!This is a take home exam -The Exam consists of essay type questions from our readingmaterials and discussions covered in this forum and case analysis.

We will not be using the VIDSOFT case.

There are three questions posted below - that is all you have toanswer for the midterm

I'm posting this a bit early for you all to get a head start.

RULES TO REMEMBER:1. You will complete your exam and submit it to the MIDTERM EXAM

submission box. Do not post it to this forum for open discussion. Thisexam will be reviewed and graded as individual work. We will notdiscuss this exam on the forum - if you have any GENERALquestions you may post them to this forum or send me an e-mail ifyour question is related to your personal issue.

2. Each of you will submit your paper without your names on it - Youwill be electronically identified by the system. When I review yourpapers I will not know who you are.

3. Please remember that the new policy at RKC is not to allowdiscussion of the exam, so please work independently on the papers.

4. Please use MS WORD when saving your document. DO NOT useHTML, PDF or other type of files. All of your responses must besubmitted in ONE FILE. Please provide your response anonymously(no names on the paper).


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5. Your response should be no less than 6 pages, single spaced. Youmay add pages for refrences/bibliography and graphics - There is nopenalty for adding more pages as required.

6.Please also remember to spell check your work and use an edittool to make sure your sentence structure is correct (this is arequirement from RKC).7. A bibliography is required - Oxford or Harvard style are acceptable.More information is available under the Support tab - or you can goto:www.citationmachine.netfor how to complete your bibliography.

8. The responses must be submitted to the Midterm submission boxby the due date noted above. Please click on COURSE/SYLLABUS,Unit 2, Midterm, and click on the Disc to submit your paper. Pleaseanswer all the questions during the submission process.

SPECIAL NOTE:Please note that plagiarism will be punished. When you copy andpaste documents from internet sources and text books or otherwritten material - RKC has a very strict guideline on such activity.

This is considered copying or Plagiarism. To avoid this mistake -please re-write the information in your own words and then makesure you reference the author and where you found this information.

Midterm Exam Questions:

Q1. 30 Points

What options do manager have to turn individuals into Team Players?

Discuss each.

Q2. 30 Points

Discuss the advantages and disadvantages of Diversity on Teams

Q3. 40 Points


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Why is situational Leadership so important - compare SituationalLeadership to Charismatic Leadership - provide one exaple of each.Midterm Exam Questions:

Q1. 30 Points

What options do manager have to turn individuals into Team Players?Discuss each.

Q2. 30 Points

Discuss the advantages and disadvantages of Diversity on Teams

Q3. 40 Points

Why is situational Leadership so important - compareSituational Leadership to Charismatic Leadership - provide oneexample of each.

There are many styles of leadership being used in today'sbusiness world. However, while there may not be a right and

wrong leadership style, situational leadership has grabbedthe attention of leadership strategists due to its focus onadaptability and practicality.

Definition

According to the May 2008 issue of "Leadership Excellence" journal, Ken Blanchard defines situational leadership asbeing a leadership method that adapts to the developmentlevel of the employees being managed, by using directing,coaching, supporting and delegating behaviors.

Function

The role of situational leadership is to lead employees inways that corresponds to the skills and knowledge the


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employees exhibit. If a supervisor recognizes that anemployee requires a lot of direction with their everyday work,the supervisor might use a directive style of leadership.

FeaturesOne of the most infamous features about situationalleadership has to do with its adaptability. A situational leaderis always changing their style based on the subordinate'sneeds. This type of flexibility is valuable because it allows asupervisor to be well versed in multiple leadership behaviors.

Challenges

Situational leadership requires supervisors to constantly beon their toes, ready to switch from one leadership style toanother in a matter of moments. At times it may be arduousfor the supervisor to keep up with this demandingadaptability.

Misconceptions

Although situational leadership embraces flexible leadership

styles, leaders should not assume that it is appropriate toswitch styles at random. The methodology behind thesituational leadership theory is that the leadership style issupposed to be unique to the individual being supervised.


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Situational Leadership

Last time we published an article on leadership, we spokeabout the six different leadership styles that successful managers canapply to different settings. One key to the success of a manager istheir ability to switch or flex styles as conditions change. This iscommonly referred to as "situational leadership."

Situational Leadership TheoryMost of the leadership training programs offered today attempt tohelp you discover the leadership style you exhibit and make youaware of its strengths and weaknesses. However, a situationalleadership style is not dictated by the leadership skills of themanager. The idea of situationalleadership is more closely tied to usingthe style needed to be successful given

the existing work environment beingmanaged or the specific needs of the

business.

The effective manager is able to utilizemultiple leadership styles as conditionschange. This is the theory behind theconcept of situational leadership.Implementing situational leadership inan organization then becomes a matter oftraining managers to recognize the current work setting or employeesituation and using the most effective leadership style given thatspecific challenge.

For example, delegating work to an employee that is ill prepared to

Additional Resources

LeadershipTheories

Leadership Style Transformational

Leadership Situational

Leadership

Transactional

Leadership
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accept that responsibility may result in the impression that theworker is incompetent. This can lead to frustration for both themanager and worker. Ironically, in some situations it is actually the

manager's inability to recognize the most effective leadership style,or refusal to switch styles, that is really the cause of an ineffectiveworkforce.

Situational Leadership Models

Right now, there appears to be two mainstream theories describingsituational leadership models. The first model we'll discuss is basedon Daniel Goleman's elements ofemotional intelligence - self

awareness, self-regulation,motivation, empathy and social skills.

Goleman's Model of Situational Leadership

In Goleman's model of situational leadership he combines his fiveelements of emotional intelligence to formulate a total of sixsituational leadership styles which are described below. Golemanemphasizes the need for a manager to change between these sixstyles as conditions around them change.

Coaching Leaders

In the Coaching Leadership Style the leader focuses on helpingothers in their personal development and in their job-relatedactivities. The coaching leader aids others to get up to speed byworking closely with them to make sure they have the knowledgeand tools to get their job done. This situational leadership style

works best when the employee already understands their weaknessand is receptive to ideas on how to improve.

Pacesetting Leaders

When employees are self-motivated and highly skilled, thePacesetting Leadership Style is extremely affective. The
http://www.money-zine.com/Definitions/Career-Dictionary/Emotional-Intelligence/http://www.money-zine.com/Definitions/Career-Dictionary/Self-Awareness/http://www.money-zine.com/Definitions/Career-Dictionary/Self-Awareness/http://www.money-zine.com/Definitions/Career-Dictionary/Self-Regulation/http://www.money-zine.com/Definitions/Career-Dictionary/Motivation/http://www.money-zine.com/Definitions/Career-Dictionary/Empathy/http://www.money-zine.com/Definitions/Career-Dictionary/Social-Skills/http://www.money-zine.com/Definitions/Career-Dictionary/Coaching-Leadership-Style/http://www.money-zine.com/Career-Development/Leadership-Skill/Pacesetting-Leadership/http://www.money-zine.com/Definitions/Career-Dictionary/Emotional-Intelligence/http://www.money-zine.com/Definitions/Career-Dictionary/Self-Awareness/http://www.money-zine.com/Definitions/Career-Dictionary/Self-Awareness/http://www.money-zine.com/Definitions/Career-Dictionary/Self-Regulation/http://www.money-zine.com/Definitions/Career-Dictionary/Motivation/http://www.money-zine.com/Definitions/Career-Dictionary/Empathy/http://www.money-zine.com/Definitions/Career-Dictionary/Social-Skills/http://www.money-zine.com/Definitions/Career-Dictionary/Coaching-Leadership-Style/http://www.money-zine.com/Career-Development/Leadership-Skill/Pacesetting-Leadership/


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pacesetting leader sets very high performance standards forthemselves and their group and the leader exemplifies the behaviorsthat are sought from other members of the group. This leadership

style needs to be used sparingly since workers can often "burn out"due to the demanding pace of this style.

Democratic Leaders

The Democratic Leadership Style gives members of the workgroup a vote or a say in nearly every decision the team makes.When used effectively, the democratic leader builds flexibility andresponsibility and can help identify new ways to do things with fresh

ideas. Be careful with this style, however, because the level ofpersonal involvement required by this style and the decision makingprocess itself can be very time consuming.

Affiliative Leaders

The Affiliative Leadership Style is most effective in situationswhere morale is low or teambuilding is needed. This leader is easilyrecognized by their theme of "employee first." Employees canexpect much praise from this style; unfortunately, poor performancemay also goes without reprimand.

Authoritative Leaders

If your business seems to be drifting aimlessly, the AuthoritativeLeadership Style can be very effective in this type of situation. Theauthoritative leader is an expert in dealing with the problems and

challenges at hand and can clearly identify goals that will lead tosuccess. This leader also allows the employees themselves to figureout the best way to achieve those goals.

Coercive Leaders

The Coercive Leadership Style should be used with caution
http://www.money-zine.com/Career-Development/Leadership-Skill/Democratic-Leadership/http://www.money-zine.com/Definitions/Career-Dictionary/Affiliative-Leadership-Style/http://www.money-zine.com/Career-Development/Leadership-Skill/Authoritative-Leaders/http://www.money-zine.com/Career-Development/Leadership-Skill/Authoritative-Leaders/http://www.money-zine.com/Career-Development/Leadership-Skill/Coercive-Leadership/http://www.money-zine.com/Career-Development/Leadership-Skill/Democratic-Leadership/http://www.money-zine.com/Definitions/Career-Dictionary/Affiliative-Leadership-Style/http://www.money-zine.com/Career-Development/Leadership-Skill/Authoritative-Leaders/http://www.money-zine.com/Career-Development/Leadership-Skill/Authoritative-Leaders/http://www.money-zine.com/Career-Development/Leadership-Skill/Coercive-Leadership/


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because it's based on the concept of "command and control" whichusually causes a decrease in motivation among those that areinteracting with this type of manager. The coercive leader is most

effective in situations where the company or group requires acomplete turnaround. It is also effective during disasters or dealingwith under performing employees - usually as a last resort.

Ken Blanchard's Situational Leadership Model

The second situational leadership model we're going to discuss isderived from the leadership theory explained by Ken Blanchard andPaul Hersey. In this model, Blanchard and Hersey describe two

fundamental concepts - that of leadership style as well as thedevelopment level of the person being led.

Situational Leadership Styles

Blanchard and Hersey characterized the situational leadership stylein terms of the amount of the direction and the support that theleader provides to followers. The situational leadership styles theydescribed fall into the following four types:

Telling Leaders

The telling leader defines the roles and tasks for each follower, andsupervises them very closely. All important decisions are made bythe leader and announced to the followers. This meanscommunication is predominantly one-way. These leaders tell otherswhat to do.

Selling Leaders

The selling leader defines the rolls and the tasks of each follower,but also seeks ideas and suggestions from followers. Decisions aremade predominantly by the leader, but the communication style used


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is two-way. These leaders are good at "selling" their ideas.

Participating Leaders

A participating leader passes along the day-to-day decisions such asdividing up the workload to the followers. The participating leaderwill help to facilitate discussion and takes part in the decision-making process, but ultimate control is with the follower.

Delegating Leaders

The delegating leader is still involved in the workgroups' decisions

and helps to solve problems, but ultimate control is with thefollowers. In fact, with this situational leadership style, thefollowers actually decide when to get the leader involved.

Development Levels of Followers

Blanchard and Hersey's situational leadership model also recognizedthe importance of the development level of those being led. Theirtheory states that the leader's style needs to reflect, in part, the

competence and commitment of the followers. Those twodimensions were then used to develop the following fourdevelopment levels of those being led:

Low Competence, High Commitment Some Competence, Low Commitment High Competence, Variable Commitment High Competence, High Commitment

In Blanchard's model of leadership, there exists an ideal type ofleadership style to apply to each development level. Much of thatlogic is the same as that found in Goleman's model.

Implementing Situational Leadership


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As mentioned earlier, implementing situational leadership in anorganization is really nothing more than teaching managers how torecognize the strengths and weaknesses of each leadership style and

how this knowledge can be applied to a given work situation. It'salso important for managers to recognize their intrinsic leadershipstyle because that will often be the leadership style they will fall

back into in times of stress.

Successful leaders in any organization are able to quickly recognizewhich style applies to a given situation, and make use of that style toachieve superior business results. Regardless of the model or theoryused describe leadership styles both Goleman and Blanchard agreeon this last point - flexibility is the key to success.

Situational Leadership II

The world's most comprehensive and up-to-date, yet

practical method for effectively leading anddeveloping peak performers.

SLII is designed to increase the frequency and

quality of conversations about performance anddevelopment between managers and the people they

work with so that competence is developed,commitment is gained, and talented individuals staywith the organization.

The role of the Situational Leader is to providewhatever it takesgoals, direction, training, support,

feedback, and recognitionto develop employees'skills, motivation, and confidence to excel. The resultis an organization where people feel more


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empowered, engaged, and open to new challenges.

The products listed below are only the beginning of

our offerings for SLII. For maximum impact, ourprocess can be delivered on-site by one of our

facilitators or by your own in-house trainer who hascompleted our Training for Trainers process.

5. Hersey-Blanchard Situational TheoryHersey and Blanchard developed also a theory that bases theleadership style on thegiven situation. The Situational Leadership theory, created by Herseyand Blanchard, includesfour situational leadership styles: telling, selling, participating, anddelegating. Accordingto Paul Hersey, a situational leader adapts "leadership behaviors tofeatures of the situationand followers."Managers leadership style must be adaptable and flexible to meet thechanging needs ofemployees and situation. It should be matched to the maturity of thesubordinates.Maturity is assessed in relation to a specific task and has two parts:

Psychological maturity- Their self-confidence and ability andreadiness to acceptresponsibility and be able to manage the given tasks.

Job maturity- Their relevant skills, technical knowledge and ability tocarryresponsibility; the ability to put up high goals, and still manage them.[Strunz H., Dorsch M., page 145]

As the subordinate maturity increases, leadership should be morerelationship-motivated thantask-motivated.The Hersey and Blanchard Leadership Model means that thedevelopmental levels of aleader's subordinates play the greatest role in determining whichleadership styles are most


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appropriate (leader behaviors). According to this conceptualization,leader behaviors fallalong (1) directive behavior and (2) supportive behavior.DIRECTIVE BEHAVIOR SUPPORTIVE BEHAVIOR

one-way communication

followers' roles spelled out close supervision of performance

two-way communication

listening, providing support &encouragement

facilitate interaction

involve follower in decision making[http://psychology.about.com/gi/dynamic/offsite.htm?site=http%3A%2F%2Fwww.geocities.com%2FAthens%2FForum%2F1650%2Fhtmlblanchard.html,14.10.2002]10Putting the leadership behaviors identified by Blanchard together on agrid, fourleadership styles result:1.The "telling style" is appropriate when the members are new orinexperienced, and need alot of help, direction, and encouragement to get the job done. hightask, low relationship2.The "selling style" is useful when group members are a little moreresponsible,

experienced, and willing to do the task but do not have the necessaryskills. high task, highrelationship3.The "participating style" is a supportive style used when groupshave the ability to do thejob but may be unwilling to start or complete the task. highrelationship, low task4.The "delegating style" is useful when group members are willingand able to takeresponsibility for directing their own behavior. low relationship, lowtask

[http://www.mech.uq.edu.au/subjects/e4390/Em1mod08/sld046.htm,online 09.10.2002]The Blanchard model combines the behavior grid (similar to the Blake-MoutonManagerial Grid) with the Developmental Levels of subordinates toarrive at someconclusions about appropriate leadership styles.[Strunz H., Dorsch M., 2001, page 146]


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There is one problem: To believe that the leader can ascertain thematurity of theemployee and as a result of that chooses a specific leadership style.[Strunz H., Dorsch M.,2001, page 146] To determine the appropriate leadership style the

leader must first determinethe maturity level of his employees in relation to the specific task thatthe leader is attemptingselling participatingtelling delegating

Task behaviorRelationshipof behaviorHIGHLOW HIGHmature Maturity of followers immature11to accomplish. As the level of the employees' maturity increases, theleader should begin toreduce his or her task behaviour and increase relationship behaviour.As the followers beginto move into an above average level of maturity, the leader shoulddecrease not only taskbehaviour but also relationship behaviour. Once the maturity level isidentified, theappropriate leadership style can be determined.[http://ollie.dcccd.edu/mgmt1374/book_contents/4directing/leading/lea

d.htm,online14.10.2002]

6. ConclusionAfter having a look at the three different styles, one can see that noneof them isperfect in every situation. Each of them has advantages anddisadvantages concerningdifferent situations. There are still many other leadership andmanagement theories, but for usthe three mentioned seemed to be the most important and used ones.One other management

style for example is Management by Objectives. It is becoming moreand more popular. Itsfocus lies on the goals of a company and therefore changes fromsituation to situation.One can conclude that each leader has to find its own style accordingto his own personalityand the kind of company he/she is working for. That is why it isimpossible to judge one


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theory as the best and ultimate one. But each company has to find thebest suiting leadershipor management style for itself and if necessary adapt to a changingsituation.The important part about being a leader or a manager is not to stick to

one of the styles, butfind your own style and lead as best as you can!12

Bibliography Ann E. Brown Biographical Dictionary of Management ThoemmesPress, 2001

J.M. Nicholas, Managing business & engineering projects, concepts &implementation,Prentice Hall International Editions, 1990

Judith R Gordon, Management & Organisational behaviour, Allyn &Bacon, 1990

Strunz H., Dorsch M., Management, Oldenbourg Verlag MnchenWien, 2001

http://www.lib.uwo.ca/business/blake.html (15. October 2002)

http://www.mech.uq.edu.au/subjects/e4390/Em1mod08/sld041.htm(25. October 2002)

http://www.mech.uq.edu.au/subjects/e4390/Em1mod08/sld046.htm(9. October 2002)

http://www.nwleadership.com/docs/grid_revisited.htm (25.October2002)

http://www.nwlink.com/~donclark/hrd/history/grid.html (9.October

2002) http://psychology.about.com/gi/dynamic/offsite.htm?site=http%3A%2F%2Fwww.geocities.com%2FAthens%2FForum%2F1650%2Fhtmlblanchard.html(14.October 2002)

http://psychology.about.com/msub_ioleader5.htm (16. October 2002)

http://ollie.dcccd.edu/mgmt1374/book_contents/4directing/leading/lead.htm (14. October2002)

http://workstar.net/library/grid.htm (16.October 2002)

http://www.nwlink.com/~donclark/hrd/history/grid.html (15.October


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Situational Leadership

Disciplines >Leadership > Leadership styles > Situational Leadership

Assumptions |Style | Discussion |See also

Assumptions

The best action of the leader depends on a range of situational factors.

Style

When a decision is needed, an effective leader does not just fall into a single preferredstyle, such as using transactional ortransformational methods. In practice, as theysay, things are not that simple.

Factors that affect situational decisions include motivation and capability of followers.This, in turn, is affected by factors within the particular situation. The relationshipbetween followers and the leader may be another factor that affects leader behavior asmuch as it does follower behavior.

The leaders' perception of the follower and the situation will affect what they do ratherthan the truth of the situation. The leader's perception of themselves and other factorssuch as stress and mood will also modify the leaders' behavior.

Yukl (1989) seeks to combine other approaches and identifies six variables:

Subordinate effort: the motivation and actual effort expended.

Subordinate abilityand role clarity: followers knowing what to do and

how to do it.

Organization of the work: the structure of the work and utilization ofresources.

Cooperation and cohesiveness: of the group in working together.

Resources and support: the availability of tools, materials, people,

etc.

External coordination: the need to collaborate with other groups.

Leaders here work on such factors as external relationships, acquisition of resources,managing demands on the group and managing the structures and culture of the group.
http://changingminds.org/disciplines/disciplines.htmhttp://changingminds.org/disciplines/leadership/leadership.htmhttp://changingminds.org/disciplines/leadership/leadership.htmhttp://changingminds.org/disciplines/leadership/styles/leadership_styles.htmhttp://changingminds.org/disciplines/leadership/styles/situational_leadership.htm#ass%23asshttp://changingminds.org/disciplines/leadership/styles/situational_leadership.htm#sty%23styhttp://changingminds.org/disciplines/leadership/styles/situational_leadership.htm#sty%23styhttp://changingminds.org/disciplines/leadership/styles/situational_leadership.htm#dis%23dishttp://changingminds.org/disciplines/leadership/styles/situational_leadership.htm#see%23seehttp://changingminds.org/disciplines/leadership/styles/situational_leadership.htm#see%23seehttp://changingminds.org/disciplines/leadership/styles/transactional_leadership.htmhttp://changingminds.org/disciplines/leadership/styles/transformational_leadership.htmhttp://changingminds.org/disciplines/disciplines.htmhttp://changingminds.org/disciplines/leadership/leadership.htmhttp://changingminds.org/disciplines/leadership/styles/leadership_styles.htmhttp://changingminds.org/disciplines/leadership/styles/situational_leadership.htm#ass%23asshttp://changingminds.org/disciplines/leadership/styles/situational_leadership.htm#sty%23styhttp://changingminds.org/disciplines/leadership/styles/situational_leadership.htm#dis%23dishttp://changingminds.org/disciplines/leadership/styles/situational_leadership.htm#see%23seehttp://changingminds.org/disciplines/leadership/styles/transactional_leadership.htmhttp://changingminds.org/disciplines/leadership/styles/transformational_leadership.htm


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Discussion

Tannenbaum and Schmidt (1958) identified three forces that led to the leader's action:the forces in the situation, the forces in then follower and also forces in the leader. Thisrecognizes that the leader's style is highly variable, and even such distant events as a

family argument can lead to the displacement activity of a more aggressive stance in anargument than usual.

Maier (1963) noted that leaders not only consider the likelihood of a followeraccepting a suggestion, but also the overall importance of getting things done. Thus incritical situations, a leader is more likely to be directive in style simply because of theimplications of failure.

See also

Hersey and Blanchard's Situational Leadership,Vroom and Yetton's Normative

Model

Tannenbaum, A.S. and Schmitt, W.H. (1958) How to choose a leadership pattern.Harvard Business Review, 36, March-April, 95-101

Maier, N.R.F. (1963).Problem-solving discussions and conferences: Leadershipmethods and skills.New York: McGraw-Hill

Yukl, G. A. (1989).Leadership in Organizations. Englewood Cliffs, NJ: Prentice Hall.

Charismatic Leadership

Disciplines > Leadership > Leadership styles> Charismatic Leadership

Assumptions |Style | Discussion |See also

Assumptions

Charm and grace are all that is needed to create followers.

Self-belief is a fundamental need of leaders.

People follow others that they personally admire.

Style

The Charismatic Leader gathers followers through dint of personality and charm,rather than any form of external power or authority.
http://changingminds.org/disciplines/leadership/styles/situational_leadership_hersey_blanchard.htmhttp://changingminds.org/disciplines/leadership/theories/vroom_yetton.htmhttp://changingminds.org/disciplines/leadership/theories/vroom_yetton.htmhttp://changingminds.org/disciplines/leadership/theories/vroom_yetton.htmhttp://changingminds.org/disciplines/disciplines.htmhttp://changingminds.org/disciplines/leadership/leadership.htmhttp://changingminds.org/disciplines/leadership/styles/leadership_styles.htmhttp://changingminds.org/disciplines/leadership/styles/leadership_styles.htmhttp://changingminds.org/disciplines/leadership/styles/charismatic_leadership.htm#ass%23asshttp://changingminds.org/disciplines/leadership/styles/charismatic_leadership.htm#sty%23styhttp://changingminds.org/disciplines/leadership/styles/charismatic_leadership.htm#sty%23styhttp://changingminds.org/disciplines/leadership/styles/charismatic_leadership.htm#dis%23dishttp://changingminds.org/disciplines/leadership/styles/charismatic_leadership.htm#see%23seehttp://changingminds.org/disciplines/leadership/styles/charismatic_leadership.htm#see%23seehttp://changingminds.org/disciplines/leadership/styles/situational_leadership_hersey_blanchard.htmhttp://changingminds.org/disciplines/leadership/theories/vroom_yetton.htmhttp://changingminds.org/disciplines/leadership/theories/vroom_yetton.htmhttp://changingminds.org/disciplines/disciplines.htmhttp://changingminds.org/disciplines/leadership/leadership.htmhttp://changingminds.org/disciplines/leadership/styles/leadership_styles.htmhttp://changingminds.org/disciplines/leadership/styles/charismatic_leadership.htm#ass%23asshttp://changingminds.org/disciplines/leadership/styles/charismatic_leadership.htm#sty%23styhttp://changingminds.org/disciplines/leadership/styles/charismatic_leadership.htm#dis%23dishttp://changingminds.org/disciplines/leadership/styles/charismatic_leadership.htm#see%23see


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The searchlight of attention

It is interesting to watch a Charismatic Leader 'working the room' as they move fromperson to person. They pay much attention to the person they are talking to at any onemoment, making that person feel like they are, for that time, the most important person

in the world.

Charismatic Leaders pay a great deal of attention in scanning and reading theirenvironment, and are good at picking up the moods and concerns of both individualsand larger audiences. They then will hone their actions and words to suit the situation.

Pulling all of the strings

Charismatic Leaders use a wide range of methods to manage their image and, if theyare not naturally charismatic, may practice assiduously at developing their skills. Theymay engender trust through visible self-sacrifice and taking personal risks in the name

of their beliefs. They will show great confidence in their followers. They are verypersuasive and make very effective use ofbody language as well as verbal language.

Deliberate charisma is played out in a theatrical sense, where the leader is 'playing tothe house' to create a desired effect. They also make effective use of storytelling,including the use of symbolism and metaphor.

Many politicians use a charismatic style, as they need to gather a large number offollowers. If you want to increase your charisma, studying videos of their speeches andthe way they interact with others is a great source of learning. Religious leaders, too,may well use charisma, as do cult leaders.

Leading the team

Charismatic Leaders who are building a group, whether it is a political party, a cult or abusiness team, will often focus strongly on making the group very clear and distinct,separating it from other groups. They will then build the image of the group, inparticular in the minds of their followers, as being far superior to all others.

The Charismatic Leader will typically attach themselves firmly to the identify of thegroup, such that to join the group is to become one with the leader. In doing so, theycreate an unchallengeable position for themselves.

Alternative views

The description above is purely based on charisma and takes into account varyingmoral positions. Other descriptions tend to assume a more benevolent approach.

Conger & Kanungo (1998) describe five behavioral attributes of Charismatic Leadersthat indicate a more transformationalviewpoint:
http://changingminds.org/techniques/body/body_language.htmhttp://changingminds.org/techniques/language/language.htmhttp://changingminds.org/techniques/language/language.htmhttp://changingminds.org/disciplines/leadership/styles/transformational_leadership.htmhttp://changingminds.org/disciplines/leadership/styles/transformational_leadership.htmhttp://changingminds.org/techniques/body/body_language.htmhttp://changingminds.org/techniques/language/language.htmhttp://changingminds.org/disciplines/leadership/styles/transformational_leadership.htm


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Vision and articulation;

Sensitivity to the environment;

Sensitivity to member needs;

Personal risk taking;

Performing unconventional behaviour.

Musser (1987) notes that charismatic leaders seek to instil both commitment toideological goals and also devotion to themselves. The extent to which either of thesetwo goals is dominant depends on the underlyingmotivations and needs of the leader.

Discussion

The Charismatic Leader and the Transformational Leader can have manysimilarities, in that the Transformational Leader may well be charismatic. Their maindifference is in their basic focus. Whereas the Transformational Leader has a basicfocus of transforming the organization and, quite possibly, their followers, the

Charismatic Leader may not want to change anything.

Despite their charm and apparent concern, the Charismatic Leader may well besomewhat more concerned with themselves than anyone else. A typical experiencewith them is that whilst you are talking with them, it is like being bathed in a warm andpleasant glow, in which they are very convincing. Yet afterwards, ask the sunbeam oftheir attention is moved elsewhere, you may begin to question what they said (or evenwhether they said anything of significance at all).

The values of the Charismatic Leader are highly significant. If they are well-intentioned towards others, they can elevate and transform an entire company. If they

are selfish and Machiavellian, they can create cults and effectively rape the minds (andpotentially the bodies) of the followers.

Their self-belief is so high, they can easily believe that they are infallible, and hencelead their followers into an abyss, even when they have received adequate warningfrom others. The self-belief can also lead them into psychotic narcissism, where theirself-absorption or need for admiration and worship can lead to their followersquestioning their leadership.

They may also be intolerant of challengers and their irreplaceability (intentional orotherwise) can mean that there are no successors when they leave.

See also

Bonding principle,Pull, Trust principle

Musser, S.J. (1987). The determination of positive and negative charismaticleadership, Grantham: PA: Messiah College
http://changingminds.org/explanations/motivation/motivation.htmhttp://changingminds.org/explanations/motivation/motivation.htmhttp://changingminds.org/explanations/needs/needs.htmhttp://changingminds.org/disciplines/leadership/styles/transformational_leadership.htmhttp://changingminds.org/explanations/values/values.htmhttp://changingminds.org/principles/bonding.htmhttp://changingminds.org/principles/pull.htmhttp://changingminds.org/principles/pull.htmhttp://changingminds.org/principles/trust.htmhttp://changingminds.org/explanations/motivation/motivation.htmhttp://changingminds.org/explanations/needs/needs.htmhttp://changingminds.org/disciplines/leadership/styles/transformational_leadership.htmhttp://changingminds.org/explanations/values/values.htmhttp://changingminds.org/principles/bonding.htmhttp://changingminds.org/principles/pull.htmhttp://changingminds.org/principles/trust.htm


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Dear Prof & Classmates,

Organisational Culture is a still in its infancy, relatively new,

controversial and minimum understood management concept.However, continuous research in this area has indicated that a strong

relationship co-exists between Organisation Culture and peoplebehavior in the organisation.To understand Organisational Culture, we

need to understand the objectives, the concept, levels, development,

methods of maintaining, changes and last not least the various typesof corporate cultures. The key purposes of Organisational Culture from

the perspective of Organisational Behavior arethe following,

understand,

predict and control behavior

I am currently in the process of studying Organizational Culture in

detail, supported by the resources and presentations here in the forum

and I am sure I will be to comprehend step by step its objective,importance and performance in relation to OB.

Prof Lusk, thank you for featuring the Culture Tracker here in this

forum. It is indeed a very interesting exercise and has helped me tostudy and understand the current practices and trend in my

organization. Middle East markets are pre-dominantly tradingeconomies with few exceptions like Saudi Arabia where manufacturing

activities plays a major role and contribute to the region. My

organization is a trading outfit and is one of the oldest automotivegroups in the region representing global automotive brands and

specializes in offering complete solutions to the consumer automotiveneeds.

Our Vision:

To continuously delight customers by providing them with the verybest experience in terms of vehicle ownership and service standards,

via excellence in Customer Care, Human Resources, Service

Standards, Customer Satisfaction, Facilities and System


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Mission:

We will provide our Customers with world class products, and

exemplary Service standards. We will provide our employees anenvironment that inspires and motivates them to put in their best.

We will provide to our Share holders a reasonable return on their

investment and, we will be good corporate citizens, and share socialresponsibility.

Culture Tracker

My observations, response and comments as a part of the seniormanagement team in my organization.

* How many layers of managers do you have between CEO andshop floor? More than 2 should be questioned by any largeCompany and more than 1 by any SME.

We have foremans on the shop floor reporting to the Unit Manager reporting to the Group General Manager, After Sales -Service reporting to the CEO.

This reporting structure has been there for last 5 yrs and seems to beworking perfect.

* How much are employees involved in decision making?

We have weekly meetings at the shop floor with all the employeesconcerned and mainly address problem areas and scope forimprovement in process management.

* How are staff organized? Team based or assembly-line style?What opportunities do they have during a shift to improve the

job as well as do the job.

It is primarily team based and the job allocated to every worker ismonitored in terms of quality and standardized time scale


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* What systems do you have to ensure communication takesplace, not just downward, but upwards and between functionsand teams?

We have internal emails within the company supported by ERP(enterprise resource planning) solution where we have free flow ofinformation (vertical & horizontal) related to relevant work areas andsubject to the nature, sensitivity and confidentiality of the data.

* What use is made of cross-functional task forces or projectteams to tackle significant organizational concerns?

We have a core team of management professionals directly underthe CEO, working closely with all the divisional heads and employeesat different levels of the organization to address critical problem areasand work out long term solutions.

* Does the reward system recognize exceptional contributionsand is it based on quantity or quality?

There are many form of rewards in our organization which are,

measured and evaluated in terms of various parameters. Employeesfrom revenue generation departments are appraised primarily onquantative terms, while non- revenue generation departments, costcentres emphasise more on quality aspects.

* Do managers understand the value of recognition in motivatingpeople? How many people did the organization recognize lastweek? If the answer is none start your culture change here - itwon't cost you a bean!

We have different employee recognisition programme, at variousdepartmental levels across the organization. We have employee ofthe month, employee birthday celebrations (within the department-attended by the HOD or the deputy) followed by personalizedgreetings and gifts from the CEO and Chairmans office, annual


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family get-together, company newsletters, etc where employees arerecognized constantly for their contributions and achievements.

* Do managers manage change rather than managing blame?(the only form of recognition many staff get).

I would prefer to comment on this later.

* How much do you spend on developing the potential of yourstaff? By spend we mean time as well as (or maybe rather than)money.

We have training department centre, working closely with the HR tocater to all the organizational training and development needsrequired periodically to implement our principal companysstandards & procedures and as well as for overall growth anddevelopment of the organization. The training programmers areplanned, decided and calenderised well ahead of the budget year.

Changing Organising Culture is difficult primarily because assessingthe existing culture is a tough proposition by itself . In a larger outfit,its been observed that multi cultures exists also know as sub culturesbecause of different views and perceptions held by groups of peoplewithin the organization.

To attempt a change and try out a successful outcome requires thefollowing :

Need to understand the existing culture to develop a newculture, where the management and employees understand thestepping stone.

Set realistic goals that impact the bottom line Encourage and support the employees and groups who are

open for a change and better culture


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Identify the best sub culture existing in the organization andproject that as an example

Initiate the flow of change from the top down to communicate aconsistent message from the management down the line

Involve employees also in the change process to garner widersupport

Not to adopt an offensive strategy to bring change rather subtlyhelp people to be more effective,

Remove all bottle necks and red tapism that remind people ofold culture

Project the vision for a new culture as a guiding principle andnot as a magic remedy

Understand and recognize that any significant change to showtakes time

Live and practice the new culture rather than simply talkingabout it, action speakers louder than words as they say..


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Culture Change involves tremendous amount of efforts and time andskills to mange change effectively.

Balanced Scorecard Basics

The balanced scorecard is a strategic planning andmanagement system that is used extensively in businessand industry, government, and nonprofit organizationsworldwide to align business activities to the vision andstrategy of the organization, improve internal and externalcommunications, and monitor organization performanceagainst strategic goals. It was originated by Drs. RobertKaplan (Harvard Business School) and David Norton as a

performance measurement framework that added strategicnon-financial performance measures to traditional financialmetrics to give managers and executives a more 'balanced'view of organizational performance. While the phrasebalanced scorecard was coined in the early 1990s, the rootsof the this type of approach are deep, and include thepioneering work of General Electric on performancemeasurement reporting in the 1950s and the work of Frenchprocess engineers (who created the Tableau de Bord

literally, a "dashboard" of performance measures) in theearly part of the 20th century.

The balanced scorecard has evolved from its early use as asimple performance measurement framework to a fullstrategic planning and management system. The newbalanced scorecard transforms an organizations strategicplan from an attractive but passive document into the"marching orders" for the organization on a daily basis. It

provides a framework that not only provides performancemeasurements, but helps planners identify what should bedone and measured. It enables executives to truly executetheir strategies.

This new approach to strategic management was firstdetailed in a series of articles and books by Drs. Kaplan and


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Norton. Recognizing some of the weaknesses and vaguenessof previous management approaches, the balancedscorecard approach provides a clear prescription as to whatcompanies should measure in order to 'balance' the financial

perspective. The balanced scorecard is a managementsystem (not only a measurement system) that enablesorganizations to clarify their vision and strategy andtranslate them into action. It provides feedback around boththe internal business processes and external outcomes inorder to continuously improve strategic performance andresults. When fully deployed, the balanced scorecardtransforms strategic planning from an academic exerciseinto the nerve center of an enterprise.

Kaplan and Norton describe the innovation of the balancedscorecard as follows:

"The balanced scorecard retains traditional financialmeasures. But financial measures tell the story of pastevents, an adequate story for industrial age companies forwhich investments in long-term capabilities and customerrelationships were not critical for success. These financialmeasures are inadequate, however, for guiding andevaluating the journey that information age companies mustmake to create future value through investment incustomers, suppliers, employees, processes, technology,and innovation."


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Adapted from Robert S. Kaplan and David P. Norton, Usingthe Balanced Scorecard as a Strategic ManagementSystem, Harvard Business Review (January-February1996): 76.

Perspectives

The balanced scorecard suggests that we view theorganization from four perspectives, and to develop metrics,collect data and analyze it relative to each of theseperspectives:

The Learning & Growth PerspectiveThis perspective includes employee training and corporatecultural attitudes related to both individual and corporateself-improvement. In a knowledge-worker organization,

people -- the only repository of knowledge -- are the mainresource. In the current climate of rapid technologicalchange, it is becoming necessary for knowledge workers tobe in a continuous learning mode. Metrics can be put intoplace to guide managers in focusing training funds wherethey can help the most. In any case, learning and growth


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constitute the essential foundation for success of anyknowledge-worker organization.

Kaplan and Norton emphasize that 'learning' is more than

'training'; it also includes things like mentors and tutorswithin the organization, as well as that ease ofcommunication among workers that allows them to readilyget help on a problem when it is needed. It also includestechnological tools; what the Baldrige criteria call "highperformance work systems."

The Business Process PerspectiveThis perspective refers to internal business processes.Metrics based on this perspective allow the managers toknow how well their business is running, and whether itsproducts and services conform to customer requirements(the mission). These metrics have to be carefully designedby those who know these processes most intimately; withour unique missions these are not something that can bedeveloped by outside consultants.

The Customer PerspectiveRecent management philosophy has shown an increasing

reali