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Leadership Management
Total Marks: 100
Attempt any 5 cases
CASE 1
The year 2002 will surely be remembered as the anus horrible of business. It was a time of tumult and reassessment, high drama and low comedy. Corporate crime 0and greed were spectacularly exposed in companies that had once been praised, run by executives who had once been trusted. It was The year Enron set new vots in corporate ethics, while World Com broke records for the size of its bankruptcy. It was also the year we learned the Rigas Family my have defrauded Adelphia Communications of some $1 Billion, Bernie Ebbers Borrowed $408 million from World Com, and Samuel Waksal urged his daughter and father to trade on inside information he gave them about ImClone Systems Inc. Andrew Fastow, ex-chief financial offer at Enron Faces no fewer than 78 felony charges. The outside auditors and the supposedly independent directors, they pleaded ignorance.
Chief Executives seemed startled by the ridicule, distrust, and outright contempt they faced. At the same time, they had to contend with an economy that edged ever-so-slowly toward a recovery but kept falling short. If ever there was a year to examine the many ways in which managers succeed – and fail – this was it.
The best executives responded by providing more information about company operations to dispel suspicions and they got back to work. Some- Andrea Jung at Avon, A.G.Laftley at Procter & Gamble, and Robert Tillman at Lowe’s – even managed to excel, despite the extremely trying conditions. Others, however, such as jack Greenberg, the abruptly replaced head of McDonald’s, and jean-Married messier, the ex-chief of Vivendi Universal, were unable to outrun their problems. They were not alone: We’ve included more than a dozen new executives who have taken over major companies in 2002.
In a year as turbulent as this one, we decided to take a new approach to our annual wrap- up of the year’s best managers. Along with the best, we’ve also looked closely at the worst executives, the fallen, the indicted (and those under fire), and managers to watch in the year to come. Many of the names are familiar. Last year, for example, we called Dennis Kozlowski one of the best managers of 2001, citing his ability to head Tyco International through a recession that flattened most of its counterpart. What we didn’t see was that the company was struggling to keep up appearances as investigators were eyeing Kozlowski. Now you can find him in the section called Prep Walk. Two Years ago we praised Sandy Weill at Citigroup for making the huge financial
firm his own, elbowing out his co-chief executive and installing his number-obsessed loyalists in key positions. With City enmeshed in almost every scandal to hit Walt Street in 2002, we named Weill one of the worst.
Business Week surveyed its staff of some 144 writers and editors in New York and in 21 areas around the world to decide whose performance should be lauded and who deserved a different kind of renown.
Question
1. If you were to select the “Best” and the “Worst” corporate leaders, what would be some objective criteria that you would use in this selection process?
2. Choosing one of the traditional theories of leadership, what criteria would you use in the selection process?
3. Why is this such a defining time for assessing corporate leadership? Which leadership theory would be most relevant and applicable to understanding and developing effective corporate leaders in today’s environment? Why?
CASE 2
Mention the word leadership in reference to CFOs and it often conjures up the names of people such as Curly Farina of HP or some other chief executive of one of America’s most admired firms. However, there are many effective leaders who are not well known but are considered extremely effective. A good example is Steve Wynn, Whose face is known to millions from his television advertising appearances but otherwise goes unrecognized.
Steven Wynn is head of Mirage Resorts Inc., an empire that consists mainly of upscale resort hotels in Las Vegas and over the next few years, other cities in Nevada, New Jersey, and Mississippi. To most people who are familiar with his face, he is an advertising pitchman who urges viewers to come out to one of his casinos. However, Wynn is a lot more than this. He has taken bold risks to build his casino empire and has always been an astute risk taker. During the 1980s he linked up with the infamous “junk bond king” Michael Milken and used junk bonds to finance his rise in the casino business. Then, when interest rate subsided, he replaced the troubled bonds with lower interest securities.
At the same time Wynn has shown that he can be very effective in managing in-house operations. One of the key areas on which he focuses a great deal of attention is employee relations. He contends that “you can never go wrong indulging your employees. “Throughout the company, personnel are given “Gotcha Awards,, “which usually entail an extra day off or a gift certificate . These awards are given simply for doing their jobs in a highly competent manner. As Wynn’s director of human resoures at the Las Vegas Mirage puts it, “We reward the ordinary, not just the extraordinary.” In addition, employees at the Mirage are given fresh, free meals in the hotel’s gleaming new cafeteria, which is in sharp contrast to employees at other hotels, who are typically fed with leftovers form the gust buffet. Moreover, Employees and Supervisors of the year are treated to Hawaiian vacations and a lavish banquet that costs upward of $400,000.
Wynn’s winning approach also extends to day-to-day work activities. His hotels operate under a system that uses “planned insubordination.” This unusual approach requires supervisors to explain to subordinates why a task should be accomplished. And if the workers find that the explanation is unsatisfactory, they are not
required to do that job. Do the personnel like this idea? They might be given than turnover at Wynn’s operations runs around 12 percent annually, whereas it is twice this for the industry at large. In addition, Jobs at the Mirage are so coveted that employees are willing to work there for pay that is at or below market rates. And although 40 percent of the workers belong to unions, not a single grievance has been filed against the company in more than four years.
On the other side of the coin, some people complain that Wynn’s leadership style can be offensive. He has been accused of erupting into anger and launching verbal assaults at subordinates over minor matters such as a burned-out light bulb or a dirty ash-tray. He explains these behaviors by noting, ‘’I’ve always been emotional and passionate. I guess it’s a fear that I’ll become isolated and not know what’s going on.” Outsiders who have worked with him simply say that he wasn’t to get things done immediately and that his passion becomes almost maniacal at times, resulting in his outbursts.
Regardless of the strengths and weakness of his leadership style, Wynn has built a successful empire. One reason may have been explained best by an expert on the gaming business who remarked, “I see Steve on the Wynn as the prototypical charismatic leader, a kind of Henry Ford of the gambling industry. Yet he has these ticks, and he wants to make everything perfect. He many scream at you and humiliate you, but he’s also the best person to work for, if you want to learn to do things the right way.’’
Question
1. It terms of the various leadership styles described in the chapter, how would you describe
Steve Wynn?
2. If you were making any suggestions to him regarding how he could improve his leadership
Style, what would you tell Wynn?
3. Which of the three major skills would be of most value to Wynn?
CASE 3
Rex Justice is a long-tem employee of the Car fax Corporation, and for the last several years he has been a supervisor in the financial section of the firm. Hi is very loyal to Car fax and works hard to follow the company policies and the orders of the managers above him. In fact, upper-level management think very highly of him; they can always count or Rex to meet any sort of demand that the company places on him. He is valued and well liked by all the top managers. His employees in the financial section have the opposite opinion of Rex. They feel that hi is too concerned with pleasing the upper-level brass and not really concerned enough with the needs and concerns of the employees in his department. For example, they feel that Rex never really pushes hard enough for a more substantial slice of the budget. Relative to other departments in the company, they feel they are underpaid and overworked. Also, whenever one of them goes to Rex with a new idea or suggestion for improvement, he always seems to have five reasons why it can’t be done. There is considerable dissatisfaction in the department, and everyone thinks that Rex is just a puppet for management. Performance has begun to suffer because of this style and leadership. Upper-level management seems to be oblivious to the situation in the finance section.
Question
1. How would you explain Rex’s leadership style in terms of one or more of the approaches discussed in the chapter?
2. What advice would you given Rex to improve his approach to leadership?
3. Could a leadership training program be set up to help Rex? What would it consist of?
CASE 4
In 1981, johns W. Welch, Jr., become CEO of General Electric. His appointment ushered in an era of disdain for the elaborate planning and centralized control that had been the hallmark of his predecessor. Reginald JONES, “Jones felt the other would be caretakers” , says one former GE vice president, “Welch was the one who would take the company in radical directions if necessary.”
Indeed, Welch has proved to be anything but a caretaker. He quickly articulated a plan to change GE from manufacturing company deriving more than half its revenues from heavy industry to one reaping a larger share of its earnings from technology and services. He also stated that GE would sell those of its businesses that weren’t first or second in their market.
Since becoming CEO, Welch has sold more than 250 businesses and used $20 billion to purchase more than 300 new ones. Among the acquisition are the RCA Corporation, the Employers Reinsurance company, 80 per cent of Kidder, Peabody & Company, the medical equipment Business of Thomson SA, the appliance making Roper Corporation and the chemical business of the Borg Warner Corporation. In the process, he has eliminated more than 20,0000 jobs through forced retirements, layoffs, resignations and outright divestitures.
His Moves have caused revenues to increase by 50 per cent –up to about $70 billion. Admirers say that Welch has vision and is transforming GE from a Stogy bureaucracy to a nimble company much more fit for the challenges ahead. He was named “CEO of the year” by the American Management Association in 1991. Detractors have dubbed Welch “Neutron jack”, after the bomb that destroys people but leaves buildings intact.
A notorious dislike of bureaucracy and red tape. Welch has cut layers of management, eliminating the group and sector levels that once fell between the heads of the various businesses and the CEO. Having fewer hierarchical levels fit in with his basic philosophy that managers should have the freedom to run their businesses as they see fit and to the fast changing environment.
“The early 80s were a hardware decade, getting the right stuff in the right place,” Welch says. “The 90s and late 80s are what we call software. We’re working desperately to get everyone participating in the process. To be a winner in the 90s, you have got to have the creativity of everybody in the organization.”
To that end, Welch has recently identified four types of leaders. Type one leaders deliver on commitments and share in the values of the company. Such leaders have a promising future at GE says Welch. Type Two leaders do not deliver on commitments and do not share company values. These leaders will not survive at GE. Type Three leaders miss commitments but share company values, so they will usually be given a second chance. Type four leaders deliver on commitments, make all the numbers, but do not ‘share in the values we must have,’ says Welch. The type four leaders “is the individual who typically forces performance out of people rather than inspires it: the autocrat, the big shot, the tyrant. Too often, all of us have looked the other way,’’ according to Welch. The tendency is to allow Type Four managers to continue to function “because they always deliver “- at least in the short run”. Now says Welch, “in an environment where we must have every good idea from every man and woman in the organization, we cannot afford management styles that suppress and intimidate.”
In order to further promote creativity and innovation, Welch has been advocating the development of a “boundary less” company, in which workers at all levels are encouraged to communicate and share ideas with one another. He has also instituted the Best Practices Program, in which GE employees study the attitudes and management practices of other admirable companies and adapt the best for use at GE. Another means of fostering change is GE’s Work-out Program, in which managers and their subordinates meet in a forum similar to New England town meeting and seek ways to eliminate unnecessary work and solve problems together.
According to Welch, “Leadership starts with absolute integrity. Leaders need to define and communicate their vision. They must have enormous energy and the ability to energise and excite others. Leaders embrace change, they know it creates opportunities. Leaders are accountable and decisive. They set and meet aggressive targets. They act sooner rather than later o issues.” He noted recently, “I don’t know what the world’s going to be; all I Know is it’s going to be nothing like it is today. It’s going to be faster: information is going to be everywhere.” As a result, he says everyone at GE needs to come to work each day “on the razor’s edge of a competitive battle.”
Questions
1. Analyst the sources of power that are likely to be used by the four types of leaders identified by Welch.
2. Use path goal theory to analyze W
CASE 5
Lisa Weber never doubted that she would be a partner in her Wall Street firm. A graduate of a prestigious business school, with a doctorate in economics, she taught briefly at a major university. She was the first woman hired as a market analyst in her well-regarded firm. Within two years, she had become one of four senior portfolio managers reporting directly to a senior partner. Her clients give her the highest commendations for her outstanding performance, and over the past two years, she has brought in the largest number of new accounts to the firm.
Despite the admiration of her colleagues and their seeming acceptance of her, there is a disturbing, if flattering, aspect to her job. Most of her peers and some of the partners visit her office during the day to discuss in private her opinions on market performance and financial projections. She enjoys these private her sessions but is dismayed that at the weekly staff meetings the CEO, Michael Brayer, usually says something like, “Okay, let’s get started and bring Lisa knows as much as they do about what’s going on in the firm. She never protests this slight to her competence and knowledge of firm business, nor does she mention the almost daily private meetings where her advice is sought. As the only woman on the executive level, she prefers to be considered a team player and “one of the boys.”
During the past year, one of her peers was promoted to partner, although Lisa’s performance clearly surpassed his, as measured by the success of her account and the amount of new business she brought to the firm. Having heard no mention of partnership for herself, “you’re doing great, Lisa, but what happens if you are a partner and you make a huge mistake? How would you take it? And what about our clients? There never been a female partner in the 103 years of our firm.”
Shortly thereafter, another woman, Pamela Tobias, was hired as a marketeering analyst. Once, when the CEO saw Lisa and Pamela together, he called out to the man, “Hey, Guys, two woman in one room. That’s scary.”
During the next six months, Lisa meets several times with the CEO to make her case for a partnership on the basis of her performance. She finally realizes that there is no possibility of change in the foreseeable future and makes a decision to leave and from her own investment firm.
Question
1. Which advancement barriers and patterns apply to Lisa’s situation?
2. What could Michael Brayer do differently to retain and support Lisa more effectively?
3. What could Lisa do differently to foster her own advancement?
4. What could the organization provide to support and develop Lisa’s and Pamela’s effectiveness?
5. What could the organization provide to raise the gender consciousness of Michael Breyer and Lisa’s male colleagues?
CASE 6
Every Year, Dr. Cook, a college professor, leads a group of 25 college student to the Middle East on an archaeological dig that usually lasts about 8 weeks. The participants, who come from big and small colleges throughout the country, usually have little knowledge or background in what takes place during an excavation. Dr. Cook enjoys leading these expeditions because he likes teaching students about archaeology and because the outcome of the digs actually advances his own scholarly work.
While planning for his annual summer excavation, Dr. Cook told the following story:
This summer will be interesting because I have 10 people returning from last year. Last year seemed lost, unmotivated, and tired. In fact, there was time early on when it seemed as if nearly half the students were either physically ill or mentally exhausted. Students seemed lost and uncertain about the meaning of the entire project.
For example, it is our tradition to get up every morning at 4:30 a.m. to Depart for the excavation site at
5:00 .M. However, during the first weeks of the dig, few people were ever ready at 5, even after several reminders.
Every year it takes some time for people to learn where they fit with each other and with the purpose of the dig. The students all come from such different backgrounds. Some are from small, private, religious school, and other are from large state universities. Each comes with a different agenda. With different skills, and with different work habits. One person may be a good photographer, another good drawer a good surveyor. It is my job to complete the excavation with the resources available to us.
At the end of week 2, called a meeting to assess how things were going. We talked about lot of things including personal things, how our work was progressing, and what we needed to chance. The students seemed to appreciate the chance to talk at this meeting. Each of them described their special circumstance and their hopes for the summer.
I told the student several stories about past digs; some were humorous and other highlighted accomplishments. I shared my particular interests in this project and how I thought we as a group could accomplish the work that needed to be done at this important historical site. In particular, I stressed two points: (a) that they shared the responsibility for the successful outcome of the venture and (b) that they had independent authority to design, schedule, and carry out the details of their respective assignments, with the director and other senior staff available at all times as advisers and resource persons. In regard to the departure time issue, I told the participants that the standard departure time on digs was 5:00 a.m.
Well, shortly after our meeting I observed a real shift in the group attitude and atmosphere. People seemed to become more involved in the work, there was less sickness, and there was more comradely. All assignments were completed without constant prodding and in a spirit of mutual support. Each morning at 5:00 a.m. everyone was ready to go.
I find that each year my groups are different. It’s almost as if each of them has a unique personality. Perhaps that is why I find it so challenging. I try to listen to the student and utilize their particular strengths. It really is quite amazing how these students can develop in 8 weeks. They really become good at archaeology and they accomplish a great deal.
This coming year will again be different because of the 10 returning “veterans”.
Questions
1. How is this an example of transformational leadership?
2. Where are Dr. Cook’s strengths on the full range of leadership model?
3. Where is the vision Dr. Cook has for the archaeology excavations?
Assignment Solutions, Case study Answer sheets
Project Report and Thesis contact
ARAVIND – 09901366442 – 09902787224
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