THE PRACTICE OF LEADERSHIP

THE PRACTICE IN LEADERSHIP

1.1       Introduction

 Leaders use communications to influencing others, so leaders need to have good  communication skills. Formal authority affects communication and, ultimately performance. Managers use communications to monitor and reinforce performance standards, they share information. Information processing is so  important that organizations are  designed as a means to meet the information processing requirements generated by interdependent activities. Unfortunately, some managers distort information.

It is not possible to have good human relations without communication. An effective communication is required not only for human relations but for good and successful business. In addition, practical experiences show that there is no communication without conflicts but it does not mean that communication has been bad. Sometimes, conflicts are very useful and help people to make correct decision but sometimes it can be a huge obstacle in organization and business conducting in it. It means, organizational communication and conflict management are connected and go together.

Many factors affect an organization’s performance for good or bad. Unresolved conflict within the organization can reduce the effectiveness of the organization. Conflicts can be related to tasks, relationships, and processes. Intangible formal and informal forces of leadership, power, and politics influence an organization’s performance. Within the organization there is a power structure that wields power to influence organizational performance. Highly political organizations create a great deal of uncertainty and ambiguity, because organizational members are not able to recognize which of their actions will be rewarded, punished, or even recognized by others. Leaders can influence organizational performance. Effective managers must learn to identify and deal appropriately with all these forces to ensure an organization successfully accomplishes its goals.

2.1        Definition of communication in organization

Communication is transfer of information from sender to receiver under the condition that the receiver understands the message (Weihrich, Koontz, 1993). Also, communication is sending and receiving of messages by means of symbols and in that context, organizational communication is a key element of organizational climate (Drenth et al, 1998). And finally, organizational communication is the process by which individuals stimulate meaning in the minds of other individuals by means of verbal or nonverbal messages in the context of formal organization (Richmond et al, 2005). For efficient communication, it is necessary that the receiver understands the meaning of the message and indicates it to the sender through some expected reactions (Ivancevich, Matteson, 2002). Every organization must enable communication in several directions: downward communication, upward communication, horizontal communication and diagonal communication as it is illustrated in Figure 1 (Miljković, Riajvec, 2008).

Figure 1: Types of organizational communication

2.1.2    Definition of conflict in organization

Many factors prevent employees from direct and open communication and result of that is high risk for conflict situations. If managers apply direct communication on time, the conflict could be avoided or its impact would be minimal. Conflicts happen every day and successful conflict management is key element of organizational and managerial success. Finally, conflict is a fact of our lives and if we are able to understand conflict and its impact to the work effectiveness, we can make conflict to be useful to us and help us to be better at work.

There are several definitions of conflict. Conflict is process of social interaction and social situation where interests and activities of participants (individual or group) really or apparently confronting, blocking and disabling realization of their objectives (Jambrek, Penić, 2008, 1199). In addition, conflict is the process where Person A intentionally makes effort to prevent efforts of Person B with some kind of blockade, which will result in thwarting of Person B to achieve his goals or satisfy its interests (Robbins, 1995). Organizational conflict occurs when members engage in activities that are incompatible with those of colleagues within their network, members of other collectivities, or unaffiliated individuals who utilize the services or products of the organization (Rahim, 2002). The same author conceptualizes conflict as an interactive process manifested in incompatibility, disagreement, or dissonance within or between social entities (individual groups, organization etc).

Organizational causes of conflict are consequence of organizational design characteristics, limited resources in organization and characteristics of organizational systems such as: system of awarding, system of making decisions and system of planning and budgeting (Petković et al, 2008).

2.2       Managing conflict process

Conflict management as a science of new age suggests solving conflict in general, not to reduce, eliminate or limit conflict in time. It means that every organization must have macro strategy which will all negative consequences of conflict reduce to minimum (Gonan Božac et al, 2008). Nowadays, in business new age, conflict management needs some changes in approach. Modern organization needs macro organization strategy that will completely reduce negative effects of conflict, make strong its constructive functions, and contribute to organizational learning and success (Gonan Božac et al, 2008). Process of conflict management that is completely in accordance with macro organization approach is shown on Figure 4 (Rahim, 2002).

Figure 2: Conflict management process

Diagnosis. The most important element of conflict management is to problem recognition.

Intervention. After proper diagnosis, it is easy to find out if any kind of intervention is necessary in organizational conflict and what type of intervention is required.

Process approach.  This approach assumes changing of intensity of conflicts and style of handling conflicts.

Structural approach.. This approach attempts to manage conflict by altering the perceptions of intensity of conflict of the organizational members at various levels.

Conflict. Conflicts have two dimensions, one consisting of disagreements relating to task issues and the other consisting of emotional and interpersonal issues which lead to conflict

Learning and effectiveness.  One of the major objectives of managing conflict in contemporary organization is to enhance organizational learning that involves knowledge acquisition, knowledge distribution, information interpretation and organizational memorization (preserving information for future access and use).

2.3       Communication management strategies and styles.

The causes, importance and effect of conflict it is normally to start solving the conflict. In order to solve the conflict managers must have clearly defined strategy for it. Managers can follow three strategies for solving conflicts (Petković, 2008):

Strategy of negotiation. This is the most common strategy of solving conflicts and it is successful when the interests of opposite sides are partly common and partly different. The negotiation is process where we can apply different tactics such as:

·         Face to face tactic. By this tactic it is possible to establish mutual confidence as a base for negotiation.

·          Persuading tactic. This tactic assumes using different methods and manners to win over partners and to get better position.

·         Deceitfulness tactic. This tactic assumes presenting false data and arguments. Sucess of this tactic depends on how negotiating sides know each other and if deceitfulness succeded.

·         Threat tactic. This tactic is based on deterrence from the side which has better position or power. By this tactic stronger side presents consequences to other side if it does not accept proposed solution.

·         Promise tactic. This tactic is also based on better position and power but in this situation stronger side persuade opposite side that it will keep the promise.

·         Concession tactic. This is the most important tactic in negotiation strategy. The point is to make concession but in normal way, not too much concession. By this tactic it is possible to create atmosphere of good will and readiness for solving problem. All actors in the conflict count that both sides will make concession.

Strategy of superior goal. According to majority of authors of organizational behavior the best way for solving conflict situation is to define superior goal. The point of the strategy is to define the goal which is above individual goals which caused the conflict. This strategy has been shown good for conflicts of political nature as well as for conflicts of business nature.

Strategy of third side intervention. If negotiation strategy does not show results then it is recommended to apply strategy of third side intervention. In this situation management of company engage consultant from outsource company to solve the problem. The consultant can be mediator with task to give instruction to conflict sides how to solve the problem or arbitrator with the task to impose own solution.

For long term reduce of conflicts in organization it is necessary to define all conflicts which happened before, their causes, and way how they were overcome and in accordance with those conclusions managers undertake structural changes, modify goals, redefine relations between authority and responsibility and if it necessary whole organizational structure must be changed (Kiss, 2007). 

3.1       Entrepreneurship and Creativity

Creativity, in the form of the ability to effectively generate novel solutions to relevant problems, can be a source of significant competitive advantage, especially in rapidly changing environments. Creativity is important to entrepreneurs because it is the first stage in the process of innovation, providing the stimulus for opportunity discovery and new venture creation. As new entrants, entrepreneurs often justify themselves upon the same dimensions as creativity: novelty, usefulness, and appropriateness. Arguably, one of the first tasks demanded of an entrepreneur is to manifest creative ability through the conceiving of new product-market opportunities and unique value propositions. From these initial acts of creativity, entrepreneurs must build effective organizations that can repeatedly bring ideas to commercially valuable forms in order to survive and grow.

In organizational contexts, creativity does not occur in isolation, and systems models that attempt to explain interaction effects are highlighted.  Creativity has evolved from origins in mysticism and divine inspiration to being a key performance contributor in helping organizations adapt to changing environments. There have been many conceptualizations of creativity over time, but research over the past fifty years has produced some consistent themes. It has been defined variously as a process, as a product outcome, and in social constructionist terms. Creativity is most commonly described today as the generation or production of ideas that are novel and useful (Amabile, 1988; Res. in Org. Behavior, Vol. 10: 123-167). In order to be useful, creative ideas must also be appropriate, that is, of potential value towards accomplishing desired goals. These ideas may reflect either a recombination of existing materials or an introduction of new materials to the organization (James and Drown, 2012).

The main conceptual challenge with creativity as ideas that are novel, useful, and appropriate, is that it is difficult to objectively measure as an output variable, as it depends upon the context and observer's perspective. Following this viewpoint, Ford (1996) argues that creativity is a "domain-specific, subjective judgment of the novelty and value of an outcome of a particular action". The domain is a cultural aspect that includes the structured knowledge system that an individual must access and gain knowledge of, in order to create something new and make a change to the domain. The criteria of novelty, usefulness, and value towards goals raise the question of who is to make that decision. Csikszentmihalyi (1999) argues that it is the experts within a domain who are the gatekeepers of such value judgments; they constitute "the field" and define what is creative. In practice, gatekeepers of domains may extend well beyond the experts, to include anyone with influence within that domain (Ford, 1996). In new product development for example, the field may include fellow developers, the CTO, an entrepreneur-leader, lead users, analysts, and investors.

In Csikszentmihalyi's systems model, domains interact with fields and individual behaviours to produce something that is potentially creative; only when a lasting change to a domain has been made, can it be said that creativity occurred. The concept of lasting domain change as a test of creativity has the appeal of objectivity, however it also means that creativity may only be established after the fact. Thus, timing is also an important consideration in determining creativity. For instance, when Apple's iPhone first appeared, critics initially panned the device as lacking novelty, demonstrating "nothing new". However, few would argue that over time, the iPhone has made a lasting change to the domain of smartphones, and thus became creative. Two consequences of creative domain change for entrepreneurs are that: i) it will likely be initially challenged by those representing the skeptical field and ii) creativity takes time and persistence to prove out.

In organizational contexts specifically, Mumford, Hester, and Robledo (2012) assert that creativity is the "production of high-quality, original, and elegant solutions to problems". Their definition emphasizes the performance nature of creativity and further implies that it is a problem-solving activity involving cognition at high levels, from which decisions will be made. This view underscores the deliberate undertaking of creativity as a means for generating better solutions, rather than a "flash out of the blue". The conditions of novelty, usefulness, and appropriateness remain valuable criteria in helping distinguish creativity from other organizational routines. Wild ideas for example, while novel, are not viewed as creative unless (or until) they are useful to an organization. As George (2007) put it:

"Novelty for novelty's sake, therefore is not the same thing as creativity. Similarly, effective problem solving is certainly useful in organizations but does not necessarily reflect creativity; in order for problem solving to be creative, generated solutions must be novel."

Creativity can be considered to exist along a continuum, with activities ranging from incremental (minor adaptations) to radical (major breakthroughs). In considering the type of problems requiring creative thought, Mumford, Hester, and Robledo (2012) list five problem characteristics; they are: i) ill defined, ii) novel, iii) demanding, iv) complex, and v) exploitable. The definition of a creative strategy or solution varies by the field or job involved, but it can be said that creative behaviours result to some degree in identifying original and better ways to accomplish something useful. Some level of creativity might be expected as a requirement across a wide spectrum of occupations (Shalley and Zhou, 2008). Examples of organizational-creativity contexts might include business models, strategic decision making, problem solving, product development, managerial activities, marketing, operational processes, financing, and everyday improvements in workplace routines. It should be recognized that there are opportunities to infuse creativity throughout most organizational functions.

3.2       Relationship to Innovation

Creativity is distinguished in the literature from innovation, considered the crafting of creative solutions into new products, processes, or services (Woodman et al., 1993). Innovation is commonly regarded as the successful implementation of creative ideas and its acceptance by various stakeholders in organizations (Oldham and Cummings, 1996). Creativity is considered a necessary, but not sufficient pre-condition for innovation (Mumford et al., 2012). The innovation literature often refers to ideation processes as the "fuzzy front end" of innovation, reflecting an unclear understanding of creativity as an initial process step (e.g., Kim and Wilemon, 2002). Although innovation is often an important end goal of organizational structures supporting creativity, scholars have been careful to maintain separation in the literature of these two constructs (Mumford et al., 2012).

Creativity, as the generation of new ideas that are novel, useful, and appropriate, is therefore the precursor to innovation, the successful commercial exploitation of those ideas. Ideas that do not meet those three criteria at a point in time, from the vantage point of one applying the label, remain as simply ideas. The process of ideation and selection has been conceptually modeled after Darwinian evolutionary theories, in which ideas mutate freely, however only those ideas that are well adapted to the host environment survive. Under Campbell's (1960) evolutionary perspective for example, the creative process may be divided into three components: i) variance: the generation of many ideas through brainstorming, flashes of insight or other means; ii) selection: deciding which ideas are pursued as opportunities; and iii) retention: the ability to perpetuate the idea.

These three process stages (VSR: variation, selection, retention) are identifiable inside every organization that turns creative ideas into market innovations. It is important to recognize that threshold-level competency in all three VSR stages is critical to overall ideation performance; the "host environment" needs to be favorable internally. Entrepreneurial organizations are particularly adept at lowering the both the latency and cycle time of ideation, relative to established players. Thus, an organization may generate many ideas but be poor at selecting which ones to implement; alternatively they may demonstrate brilliant operational execution but have little creative capability to initiate the process.

When viewed this way, it becomes more apparent how firms may be creative, but not yet innovative, and this describes the pre-commercialization phase of any new venture. The impact of this difference is more than an academic label: an organization's priorities, activities, and structures must align with the appropriate life-stage objective. In other words: first creativity, then innovation. It is important that this transition be deliberate, overt, and in the right order. When a startup shifts gears from the exploratory towards the exploitative side of innovation, it is very difficult to support the risk and uncertainty associated with ongoing novel variations (Tushman and O'Reilly, 1996; Calif. Man. Rev. 38: 8-40). Ventures that transition to commercialization phases prematurely risk never establishing the ideation capabilities described earlier.

4.1       Leadership, Power, and Politics

Many things affect an organization’s performance. Unresolved conflict within the organization can reduce the effectiveness of the organization. Intangible formal and informal forces of leadership, power, and politics influence an organization’s performance. Some forces have a positive influence, while other forces produce a negative impact in the organization.

4.2       Conflict Influences Organization Performance

Most organizations face various types of conflict. Three types of conflict facing organizations are conflicts related to tasks, relationships, and processes. There are five stages in the conflict process (see Figure 1): “potential opposition or incompatibility, cognition and personalization, intentions, behavior, and outcomes” (Robbins & Judge, 2009, p. 486).

Figure 1. The Conflict Process
(Robbins & Judge, 2009, p. 487)

Task Conflict

Task conflicts are caused by “disagreements among team members, related to a specific business task, like a marketing plan or a budget” (Yu, 2007, p. 5). These conflicts can put a strain on organizational performance, since team members generally expend more energy dealing with philosophy and other matters rather than getting to work on the task. Sometimes a manager needs to make a decision to do something and get the organization back on track.

Relationship Conflict

Task conflict revolves around specific business tasks to be performed, but relationship conflict generally is unrelated to the specific business at hand. Yu (2007) observed that research indicates that relationship conflict is bad for organizational performance; “a team that does not get along has little chance of performing well” (p. 5). There are different causes of relationship conflict (e.g., culture, race, religion, and work ethic). A manager must determine why members of the team are not getting along and take appropriate action to resolve the conflict.

Process Conflict

The team may agree upon the task and get along with each other, but if they disagree about how a task should be performed, “including the distribution of responsibilities and delegation of tasks among their members” (Passos & Caetano, 2005, p. 233), there can be a process conflict. Some projects include disagreeable tasks. Healthy teams generally have a method to distribute and share disagreeable tasks. Process conflict may occur when the same person or persons usually ends up tasked with the disagreeable assignments. Managers need to be cognizant of the distribution of responsibility and tasks to avoid process conflict.

The way a manager deals with conflict can have positive or negative results on the organization. In most cases, it is in the best interest of the organization to face conflict head-on and deal with the situation in a professional manner. Bacal (2004) warned that managers should avoid ugly strategies for dealing with conflict: “you should avoid these approaches like the plague” (p. 22). Avoid the following strategies for dealing with conflict:

1. Non-action. Sometimes doing nothing might be the smart thing to do, but most of the time doing nothing results in conflict escalation and a false impression that nothing is wrong. “Everyone knows you have conflict, and if you seem oblivious, you also seem dense and out of touch” (Bacal, 2004, p. 22).
2. Administrative Orbiting. Orbiting does not ignore the problem, like non-action, but avoids dealing with it. The manager may say he is dealing with the problem by collecting more data or documenting performance, but does nothing about it.
3. Secrecy. People in some organizations try to avoid conflict by not letting others in the organization know what they are doing. “By being secretive, you may delay conflict and confrontation, but when it does surface, it will have far more negative emotions attached to it than if things were more open” (Bacal, 2004, p. 22).
4. Law and Order. “Managers using this strategy mistakenly believe they can order people to not be in conflict” (Bacal, 2004, p. 22). This strategy may appear to work on the surface, but ultimately creates greater conflict as people suppress frustrations.

4.3       Leadership Influences Organization Performance

Leaders influence organizational performance. In healthy organizations, “leaders are admired, respected, and trusted. Followers identify with and want to emulate their leaders” (Boerner, Eisenbeiss, & Griesser, 2007, p. 16). A good leader identifies and meets the needs of team members. Boerner, Eisenbeiss, and Griesser (2007) argued that effective leaders provide inspirational motivation (meaningful work), intellectual stimulation (mentally challenging, yet within worker’s ability), and individualized consideration (need for achievement and growth).

Zhang and Faerman (2007) proposed the development of distributed leadership, where “leadership roles [e.g., making important decisions] are distributed across different individuals in the organization” (p. 479). A 1999 organizational study revealed that “the leadership actions of any individual leaders are much less important than the collective leadership provided by members of the organization” (Zhang & Faerman, 2007, p. 481). What really matters is the decision of the team, not necessarily which member of the team made the decision. The collective leadership decisions of the team influences the performance of the organization.

4.4       Power Influences Organization Performance

Organizations wield various types of power to influence aspects of business. Within the organization there is a power structure -- sometimes formal, sometimes informal -- that wields power to influence organizational performance. Social networks within the organization can create informal power for the leaders of those social networks. Malott (2003) observed that “some people clearly seek to develop social networks to achieve social power over others…to ensure that they themselves, rather than someone else, get the desired resources” (p. 53). “Organizations amplify the power of those who control them” (Guillén, 2007, p. 167). Effective leaders will recognize and learn how to control the informal power within their organizations.

In an ideal organization, everyone would do exactly what they were supposed to do and the influence of power would be unnecessary. However, Clegg, Courpasson, and Phillps (2006) pointed out that this utopian organization probably does not exist. Because everyone does not always do exactly what they are supposed to do, management uses various forms of power (involving the imposition of will) directed at framing the conduct of others. This process of imposing will must be acknowledged by both sides. “Others must learn to be managed just as those who will manage them must learn that which constitutes managing in any given place and time” (Clegg, Courpasson, & Phillps, 2006, p. 41).

4.5       Politics Influences Organization Performance

Harris, Harris, and Harvey (2007) defined organizational politics as “actions by organizational members that are perceived to be self-interested and directed toward furthering members’ own goals, without regard for the well-being of others or the organization” (p. 635). Examples of politics within organizations are “withholding information from coworkers, failing to enforce policies and procedures appropriately, using flattery to get favors, shifting blame, and maligning others to make oneself look better” (Harris, Harris, & Harvey, 2007, p. 635). Highly political organizations create a great deal of uncertainty and ambiguity, because organizational members are not able to recognize which of their actions will be rewarded, punished, or even recognized by others (Harris, Harris, & Harvey, 2007).

Treadway, Adams, and Goodman (2005) observed that many organizations do not have a consistent political climate. Different departments displayed different behavior. Additionally, “employees are differently affected by the level at which they perceive political activity to be occurring in the organization” (Treadway, Adams, & Goodman, 2005, p. 204). Robbins and Judge (2009) identified individual and organizational factors that influence political behavior. Individual factors are: “high self-monitors, internal locus of control, high mach personality, organizational investment, perceived job alternatives, and expectations of success” (p. 464). Organizational factors are: “reallocation of resources, promotion opportunities, low trust, role ambiguity, unclear performance evaluation system, zero-sum reward practices, democratic decision making, high performance pressures, and self-serving senior managers” (p. 464).

4.6       Conclusion

All managers from all levels have responsibility for good organizational communication and conflict management in it. Futhermore, all conflicts must be solved at the first line level or if the conflict is too big on middle level. It is not good to leave conflict solving to first line managers because it will show that manager at lower levels are not capable to deal with conflicts and employees in general. Practical experiences have also shown that solving conflicts on higher levels have wrong effect on effectiveness in the company

Creativity matters to entrepreneurs because not only must their initial ideas exhibit dimensions of novelty, usefulness, and appropriateness to justify firm formation, but the capacity to sustainably create commercial value from ideas must be demonstrated. There are many perspectives of creativity resulting from its inherent subjectivity, however this does not detract from the need for understanding how to foster it.

However, creativity may also be viewed as a judgment made by the field of gatekeepers within domains (i.e., structured knowledge systems that constitute existing knowledge). One test of creativity is to consider whether a lasting change to a domain has been made; the context of initiating change and new value provides a direct link to entrepreneurship.

Three recommendations are provided for entrepreneurs. Firstly, entrepreneurs must ensure their new ventures value and consequently provide deep cultural support for creativity. This requires leaders to create environments that promote the generation, selection, and retention of ideas, while not punishing failed attempts. Secondly, the research provides guidance to entrepreneurs in selecting team members with characteristics linked to creativity (i.e., primarily openness to experience, intrinsic motivation, divergent thinking, and a cognitive style that favours innovation over adaption). Lastly, entrepreneurs are reminded of their critical role in effectively championing ideas, a capability that ensures ideas get what they need to become worthy innovations.

Organizational performance is influenced by several factors. This paper provided an overview of some internal factors that influence organizational performance: conflicts (task, relationship, and process), leadership, power, and politics. Effective managers must learn to identify and deal appropriately with all these forces to ensure an organization successfully accomplishes its goals.

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