STRATEGY, GOVERNANCE AND ETHICS BLOCK 2

Questions and Answers

Question 1

With the help of examples, evaluate the statement that “the leader is more important than the followers as the key to an organization’s success”.

Question 2

a) Define the “Peter Principle” as a management concept.

b) To what extent is the concept valid in modern management practices?

Answers

“The leader is more important than the followers as the key to an organization’s success” Good leaders are made not born. If you have the desire and willpower, you can become an effective leader. Good leaders develop through a never-ending process of self-study, education, training, and experience. This guide will help you through that process. To inspire your people into higher levels of teamwork, there are certain things you must be, know, and, do. These do not come naturally, but are acquired through continual work and study. The best leaders are continually working and studying to improve their leadership skills. Leadership is a complex process by which a person influences others to accomplish a mission, task, or objective and directs the organization in a way that makes it more cohesive and coherent. A person carries out this process by applying her leadership attributes (belief, values, ethics, character, knowledge, and skills). Although your position as a manager, supervisor, lead, etc. gives you the authority to accomplish certain tasks and objectives in the organization, this power does not make you a leader…it simply makes you the boss. Leadership makes people want to achieve high goals and objectives, while, on the other hand, bosses tell people to accomplish a task or objective.

When a person is deciding if he respects you as a leader, he does not think about your attributes. He observes what you do so that he can know who you really are. He uses this observation to tell if you are a honorable and trusted leader, or a self serving person who misuses her authority to look good and get promoted. Self serving leaders are not as effective because their employees only obey them, not follow them. They succeed in many areas because they present a good image to their seniors at the expense of their people.

The basis of good leadership is honorable character and selfless service to your organization. In your employees’ eyes, your leadership is everything you do that effects the organization’s objectives and their well being. A respected leader concentrates on what she is [be] (beliefs and character), what she knows (job, tasks, human nature), and what she does (implement, motivate, provide direction). What makes a person want to follow a leader? People want to be guided by those they respect and who have a clear sense of direction. To gain respect, they must be ethical. A sense of direction is achieved by conveying a strong vision of the future.

Two Most Important Keys of Leadership

i)Trust and confidence in top leadership was the single most reliable predictor of employee satisfaction in an organization.

ii)Effective communication by leadership in three critical areas was the key to winning organizational trust and confidence:

Helping employees understand the company’s overall business strategy.

Helping employees understand how they contribute to achieving key business objectives. Sharing information with employees on both how the company is doing and how an employee’s own division is doing – relative to strategic business objectives. So basically, you must be trustworthy and you have to be able to communicate a vision of where you are going. The four major factors of leadership are the:

Follower – Different people require different styles of leadership. For example, a new hire requires more supervision than an experienced employee. A person with a poor attitude requires a different approach than one with a high degree of motivation. You must know your people! The fundamental starting point is having a good understanding of human nature: needs, emotions, and motivation. You must know your employees’ be, know, and do attributes.

Leader – You must have a honest understanding of who you are, what you know, and what you can do. Also, note that it is the followers, not the leader who determines if a leader is successful. If a follower does not trust or lacks confidence in her leader, then she will be uninspired. To be successful you have to convince your followers, not yourself or your superiors, that you are worthy of being followed.

Communication – You lead through two-way communication. Much of it is nonverbal. For instance, when you “set the example,” that communicates to your people that you would not ask them to perform anything that you would not be willing to do. What and how you communicate either builds or harms the relationship between you and your employees.

Situation – All situations are different. What you do in one leadership situation will not always work in another situation. You must use your judgment to decide the best course of action and the leadership style needed for each situation. For example, you may need to confront a employee for inappropriate behavior, but if the confrontation is too late or too early, too harsh or too weak, then the results may prove ineffective.

Various forces will affect these factors. Examples of forces are your relationship with your seniors, the skill of your people, the informal leaders within your organization, and how your company is organized

Question 2

a)The “Peter Principle” The Peter Principle concept was introduced by Canadian sociologist Dr. Laurence Johnston Peter in his humoristic book of the same title. In his book, he describes the pitfalls of the bureaucratic organization witnessed during his extensive research into business organizations.

This follows from the use of promotion as a reward for success. As long as a person is competent in his current position, he will be promoted to the next higher one. By iteration, the only way a person can stop being promoted is to reach a level where he is no longer able to do well, and thus does not appear eligible for promotion.

The theory was set out in a humorous style in the book The Peter Principle, first published in 1969. Peter describes the theme of his book as hierarchiology. The central principle is stated in the book as follows:

In a Hierarchy Every Employee Tends to Rise to His Level of Incompetence.

The Peter Principle has attained such renown that The American Heritage Dictionary defines it as “The theory that employees within an organization will advance to their highest level of competence and then be promoted to and remain at a level at which they are incompetent.

“The principle is based on the observation that in such an organization new employees typically start in the lower ranks, but when they prove to be competent in the task to which they are assigned, they get promoted to a higher rank. This process of climbing up the hierarchical ladder can go on indefinitely, until the employee reaches a position where he or she is no longer competent. At that moment the process typically stops, since the established rules of bureaucracies make that it is very difficult to “demote” someone to a lower rank, even if that person would be much better fitted and more happy in that lower position. The net result is that most of the higher levels of a bureaucracy will be filled by incompetent people, who got there because they were quite good at doing a different (and usually, but not always, easier) task than the one they are expected to do.

b)The validity of the Peter Principle in Modern Management Practices

According to Dr. Peter, work is accomplished by those employees who have not reached their level of incompetence. Thus we can see why organizations still function even as the Peter Principle causes some employees to accept one too many promotions. Dr. Peter provides an insightful analysis of why so many positions in so many organizations seem to be populated by employees who seem incompetent. This concept is likely to be ignored by most senior managers since to admit one’s organization is suffering from the Peter Principle is admission that people have been improperly promoted. This, in turn, suggested that senior management might have attained their own level incompetence.

Example:

If you’re a proficient and effective software developer, you’re most likely demonstrating peak competence in your job right now. As a result of your performance, your valuable contribution results in a promotion to a management position. In this new position, you now do few of the original tasks which gained you acclaim. In fact, little of your current job remains enjoyable, therefore your heart is no longer in your work, and it shows. Given this, promotions stop, and there you stay, until you retire or your company goes under due to mismanagement. Companies will attract and expand on a certain level of incompetence. Once a company forms a culture of incompetence, only the incompetent staff will remain, and the competent ones will tire of trying to soar with eagles while surrounded by turkeys, and therefore leave.

The end result is that non-growing companies are more likely to have incompetent employees at many levels of the organizational structure whereas growing companies add  new positions and employees so fast that the inevitable results of the Peter Principle may be forestalled so long as growth continues.

Management consultants who recognize that the Peter Principle is in full swing in their clients organization often recommend percussive sublimations and lateral arabesque for high ranking employees to make room for new employees, because new employees are not yet at their level of incompetence thus they can actually do the work they were hired to do which increases total output of the organization. The employee’s eventual incompetence is not necessarily a result of the higher-ranking position being “more difficult” – it may be simply that the position is different from the position in which the employee previously excelled, and thus requires different skills which the employee may not possess. An example used by Peter involves a factory worker whose excellence at his work results in him being promoted into a management position, in which the skills that got him promoted in the first place are no longer of any use.

One way that organizations attempt to avoid this effect is to refrain from promoting a person until that person already shows the skills or habits necessary to succeed at the next higher position. Thus, a person is not promoted to manage others if he/she does not already show leadership, for instance.

Some have observed that individuals perform worse after being promoted. The Peter Principle, which states that people are promoted to their level of incompetence, suggests that something is fundamentally misaligned in the promotion process. This view is unnecessary and inconsistent with the data. Below, it is argued that ability appears lower after promotion purely as a statistical matter.

Being promoted is evidence that a standard has been met. Regression to the mean implies that future ability will be lower, on average. Firms optimally account for the regression bias in making promotion decisions, but the effect is never eliminated. Rather than evidence of a mistake, the Peter Principle is a necessary consequence of any promotion rule. Furthermore, firms that take it into account appropriately adopt an optimal strategy. Usually, firms inflate the promotion criterion to offset the Peter Principle effect, and the more important is the transitory component relative to total variation in ability, the larger the amount that the standard is inflated. The same logic applies to other situations. For example, it explains why movie sequels are worse than the original film on which they are based and why second visits to restaurants are less rewarding than the first.

 

 

(adsbygoogle = window.adsbygoogle || []).push({});

(Visited 27 times, 1 visits today)
Share this:

Written by 

Leave a Reply

Your email address will not be published. Required fields are marked *