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Impact of leadership on organisational performance

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Question

Assessment task 3 requires the preparation of a full project proposal that should contain the following items:

  • A detail statement of the problem that you would like to examine.
  • Research aim(s), objectives and research questions: What are the potential research objectives, questions that can address the problem?
  • Justification and potential output of the research project: Why is your chosen project important both theoretically and practically? What are the potential outputs and outcomes of your research?
  • Conceptual framework and research hypotheses: An analysis of the literature relevant to the research topic that will give you the conceptual basis for conducting this research and to formulate your research hypotheses.
  • Methodology: Based on the conceptual framework, research aim(s) and objectives, you need to provide a detail description of the data collection methods, data sources and the methods/tools that you will use to analyse the data.
  • Organisation of the study: Write the names of the chapters/sections of your research report, and briefly discuss what you will write in those chapters/sections.

Solution

While some studies suggest that leaders, with their experience and vision, incrementally contribute positively in building and scaling up organizational performance, some other studies suggest that leadership does not play any role in significantly impacting organizational performance, and yet there are other studies, where it has been found that leaders, imposing various constraints on the employees' free will and ability of working, negatively impacts their performance. It has long been debated, whether at all leadership impacts employee performance (and hence the organization's performance) and if it does, then whether it's a positive, neutral or in a negative impact. Various existing theories point out that leadership is beneficial to the performance of the employees and hence improves the overall organizational performance (Podsakoff & MacKenzie, 2009). However, a number of studies and surveys conducted, at various times and organizations, throws up quite contrasting results. Inconsistency in using a uniform method of assessing organizational performance is another contributing factor in this variance in the results. As per Bolman, there are no specific criteria agreed upon in the existing literature, that can be used to assess the organizational performance (Bolman & Deal, 2009). All the approaches to assess organizational performance, so far, can be aggregated to four major types: Goal Approach (ability of the employees to achieve organizational goals as set by its stakeholders), Systems Resource Approach (ability of the employees to use high value and scarce resources to endorse the organizational operations), Constituency Approach (organization and its employees are considered efficient when multiple stakeholders perceive that the organization is efficient (Agle, et al., 2006)) and Competing Values Approach (goals of an organization varies as perceived by multiple stakeholders and so ideally an organization will have different criteria to measure performance (Cameron & Quinn, 2006)). In light of such findings, it's imperative that fresh studies are conducted to assess whether or not any correlation exists between leadership style and organizational performance.

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Section 1: Problem Statement

Till the 1970s, the primary objective of any organization was to make a profit. In the modern world, however, making a profit can be termed, at best, a secondary motive (Chandler, 2014). Over the course of the last couple of decades, with the gradual economic boom, markets have become increasingly complex and competitive. So much so, that the primary focus of any organization now is to survive. One of the key drivers of organizational survivability is to continuously improve its performance (Arslan & Staub, 2013). Other factors that affect a company's success are job satisfaction and the equivalent commitment of the employee (Bass & Riggio, 2006). Some of the earlier literature suggests that different leadership styles are instrumental in positively impacting organizational performance (Nahavandi, 2002), that performance of an organization is critically dependent on its leadership (Peterson, et al., 2003) and that through effective leadership styles, employees are motivated to remain competitive and ensure a high performance (Luftman, et al., 2004). However, various studies conducted to substantiate such presumptions surprisingly threw up contrasting results. While one group of studies suggests that effective leadership contributes to a high level of organizational performance (Finkelstein & Hambrick, 1996), another study indicates that leadership is only limitedly impactful in influencing the outcome of the performance (Meindl, et al., 1985).  

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