SCHOOL OF BUSINESS ASSIGNMENT MAPM8.200 Leadership Group Case Study – Assessment Two Length : 3500 words Due Date : 07th Jun 2017 Group Members: Allan - xxxxxxxx Anu - xxxxxxxx Hamza Sandya Sarita Sunitha Upasna Project Plan: Table of Contents 1. Project Plan 2. Executive Summary 3. Introduction 4. Contemporary Leadership Issues: 4.1. Leadership in learning organisations 4.2. Authentic leadership 4.3. Positivist vs dark leadership 5. Leadership in Teams: 5.1. In teams 5.2. In a diverse/cultural context 5.3. Problem solving and decision making 6. Conclusions 7. Recommendations 8. References 9. Appendices Executive Summary: Introduction: Contemporary Leadership Issues: The fundamental requirement of a leader is to clearly articulate what is he doing and why is he doing. The two contemporary theories of leadership are Charismatic leadership (visionary) and Transformational (inspire followers) leadership. This report will evaluate and compare the contemporary leadership of HSBC Group and the Virgin Group with relate to learning organisation, authentic leadership and positivist vs. dark leadership. Leadership in Learning Organisations Rapidly changing and growing more complex business environment, cutting edge technology and global interdependence demands greater abilities of adoption change and learning. In long run business practice, organisation’s ability to learn faster than its competitors, is the only sustainable source of competitive advantage (Senge, 1990, p.11). The key definition of the learning organization is the organization which can evolve to sustain and to be able to have a future in which every element “keeps exceeding their ability to create outcomes, to cultivate a new, forward-looking and open way of thinking, to make efforts to achieve common aggressions, and to keep learning how to learn together” (Senge, 1998, p. 3). Characteristics of a Learning Organization A learning organization is one which is continuously learning, in the sense every member of the organisation i.e. right from the CEO to the last level employee of the organization is continuously learning and adapting (Karash, n.d.). This helps achieve the desired results by not only prompting learning individually but also collectively among every individual of the organization Learning organizations can be characterized into five main activities. (Garvin, 1993) 1. Systematic Problem Solving When organizations start facing problems and hurdles in a more systematic way it helps to build their performance. (Rosenthal, 2007) A step by step approach and consistency however is key to this aspect. Experimentation This includes finding, researching or developing a way by means of new knowledge acquired and using them to find solutions or achieve a target or goal. (Garvin, 1993) 2. Learning from experiences Decision makers often find it difficult to learn from or take lesson from failures and challenges they face (Kim, Bakken & Gould, 1993). 3. Learning from others No individual or organization can just learn from their own experiences or hurdles. A lot of learning is also done from the experiences of others in the business environment. (Garvin, 1993) Transferring knowledge Knowledge transfer can be defined as the process by which knowledge is acquired by the experience of others which can be done on an organizational and at the individual level (Argote & Ingram, 2000) Virgin Group has identified the significance of organisational learning. Richard Branson, the founder of the company, has developed centralised organisational structure whereby giving his employees the decision-making authority. Decision making is not concentrated and there is more freedom at the lower levels of the organization. (Analysing the Leadership of Virgin Group Business Essay, 2015). Since most of the knowledge and ideas lie at the lower levels in the organization, lower levels will be able to make a more practical decision than the higher levels. Richard Branson always believed and offered a culture in that employees feel important, valued and empowered. He has always created a new business instead of taking over existing ones. This method of business expansion allowed Virgin’s employees to learn about the business more closely and gave them feeling of ownership of the business by contributing to the success of the company from initial stages (Finkle, 2011). Virgin group claims that they are contrast creator in any business sector. Thus, they are constantly busy in innovation to gain higher competitive advantage. Company has great research and investigation framework that help them in introducing new product or service. Virgin group act as innovator in the market as opposed to being simply follower. Virgin group always reward employees and celebrate its success with the team. Branson has developed its own leading approach of “listening, learning, laughing and leading”. This positive style of leadership certainly seems to be working for Virgin Group as it is only growing from the day it was founded. In comparison, The Hong Kong and Shanghai Banking Corporation Limited (HSBC) follows the old fashioned sole authority decision-making process. Stuart Gulliver the CEO of HSBC is defined as a good banker, but it does not mean that a good banker can lead a company of a stature as big as HSBC well. (Harris, 2015). The decision making in the whole organization solely rests upon the CEO of the company which. This autocratic bureaucracy is needed in HSBC due to the incredible size of their process and structure. (Khusanraymjonov, 2014). In the past, leaders of HSBC showed limited acceptance for open communication and feedback from its employees. Under Gulliver’s leadership, HSBC’s, frontier past remained same and it didn't acknowledge women into its learning programs for management executives (Larsen, 2003). And additionally, HSBC progressively need to develop the impression of being reasonable and meritocratic work environment to attract best talent from the banking industry. Even though, Gulliver’s readiness to openly address the management issues in public recommends HSBC’s settled approach. In recent year Gulliver has incorporated various training programs for HSBC employees and also putting efforts to break glass ceiling in the organisation. Gulliver has set up HSBC’s sustainable financing unit that coordinates and supports creation of “innovative climate products”. For example, assisting HSBC’s clients to allocate capital for lower carbon, carbon resilient events (Corbis, 2017). These changes are displaying Gulliver’s new approach towards adapting change and implementing innovation in HSBC. Authentic Leadership: Authenticity is one of the common modern leadership challenge faced by organisations globally. In general, authentic leadership is about being real and true. According to Peterson et al, authentic leadership is defined as “a pattern of leader behaviours that draws upon and promotes both positive psychological capacities and a positive ethical climate, to foster greater self-awareness, an internalized moral perspective and relational transparency on the part of leaders working with followers along with fostering positive self-development (Walumbwa, Avolio, Gardner, Wernsing, & Peterson, 2008). The main features of authentic leadership are values, relationship, self-discipline, respect, honest and compassion. (So, 2008) Richard Branson, the founder and Josh Bayliss, the CEO of Virgin Group and Stuart Gulliver, CEO of HSBC Group have made immense approach to achieve authentic leadership and set codes of conducts for leaders in the organization that are supposed to be maintained prominent level. Branson as a former CEO, had a vision for the system where they can be able to take over the global market and control business. The leadership in Virgin is based on honesty and openness. The group of companies have a regular general meeting where the directors are supposed to report on the real situation of the business; this is already an aspect of authentic leadership where they are expected to report nothing more but the mere truth in this case. The leaders of Virgin, Josh as a CEO, Peter as a Chairman, Managing Director’s Mr. Patrick, Evan and Lisa, Amy as a CFO, Ian as a COO and Nick as a Director of External Relations have also been tasked with the duty to make sure that the employee relations in the individual companies are intact and that the employees remain informed about the intentions and targets of the group as well. This is able to promote teamwork and new inspirations to the employees in the company as well. Having come from such a set of companies, one expects that the leaders are all engraved into the fact that the employees are part of the group and intrinsic reason for setting such programs in place by the company (Bradt, 2014). Leadership in HSBC is committed to build relationship that last for long. It has a leadership team of 18 BOD’s, mainly Douglas as a Chairman, Stuart as a CEO, Lain as a Finance Director and 12 senior managers as a member of the Group Management Board. HSBC being a financial corporation has set high accounting standards that ensure that all the managers and the directors in the organization are in a position to account for whatever takes place in the organization ("Effective teamwork in organisations," 2015). The essence of this is to make sure that the employees do work in harmony and that the spirit is embraced right from the top management all the way to the regular employees in the organization. Through a defined code of conduct that expects that the leaders in the organization should remain as open as possible about any new situations in the organization and report the same to the board at all time (Stokes & Blackburn, 2001). Such an idea has sparked greater development in the organization to the extent that it has been able to build trust in the organization and at the same time the leaders are able to know any contemporary situation and try to solve them. In this case, authenticity in HSBC helps the organization and employees being informed about the status and the possible moves that they can be able to take for the organisation. Out of the two companies here, HSBC presents a better scheme for authentic leadership because Gulliver as a CEO have set it practical and even work more towards achieving the same (Gitsham, 2012). Compared to Branson and Josh in Virgin Group, Gulliver has focused more on ensuring that their employees are fully aware about the position in the market and the new decisions that the company intends to make, all these issues are being addressed by the top leadership in the company. Positivist vs. Dark Leadership: Leadership sometimes works dis-functional in the workplaces. So, it’s not always possible that every person and the organization adopts a perfect leadership style. If something has pros then there are cons as well. Richard Branson the CEO of virgin company is the charismatic leader. He always treated as a role model by the persons who wants to become a successful business man without compromising their personal values. He is very good in managing people because he believes that ‘People are our greatest Assets’. He gives the priority to staff then customers and finally the shareholders and he has shown this by establishing a friendly, non-hierarchical and ego free, family like environment in all his companies. He believes that if the employees of the company are happy and enjoying their work and always smiling then they always perform better in their tasks. (Vries, 1998) However, Dark or destructive leadership is a repetitive and systematic behavior of a leader that disrupt the motivation and legitimate interest of subordinates by harming organization’s goals (Slattery, 2009). Like in HSBC, which is opposite to Virgin group in terms of leadership style. HSBC can be taken as an example of dark leadership because it follows an autocratic leadership in managing the operations of organization and in contrast Virgin Group favors transformational leadership as Richard Branson believes in motivating employees rather than ruling them. Stuart Gulliver, CEO of HSBC has the authority of making decisions, controlling the staff. As HSBC has wide range of branches all over the world, it supports management through autocracy. (Khusanraymjonov, 2014) There are number of controversies occurred about HSBC that arises a question on the leadership and management style of company. For example, money laundering, US senate investigation 2012, Gaddafi regime in Libya and latest in 2015 payment-processing failures. HSBC was failed to implement anti-money laundering controls in US. Due to that issue, U.S. Attorney Lynch decided to file the criminal charges against this failure (Coventry, 2012). HSBC proved guilty in the investigation in 2012 at U.S. Senate by the report of Senate Permanent Subcommittee. U.S. operation was not only legally harmful but also proved as money-losing for HSBC. Because of loses at U.S. consumer-lending arm, Stuart Gulliver boarded the strategy of unwinding big parts of U.S. business and selling some loan portfolios. After the decision, Stuart Gulliver accepted his past mistakes and took responsibility of those mistakes in the organization. Besides the era in which the success of HSBC was at its height, this organization faced unprofitable business years. (Devlin & Perez, 2012) HSBC however almost had their name tarnished as there were claims of the CEO i.e Stuart having evaded paying tax. He was accused of tax evasion due to the fact, that he had an account with Swiss bank whose details suggested that its staff helped many of their clients to avoid tax. HSBC’s money laundering scandal illustrated unethical leadership behaviour towards customer’s need. Several times failure of online banking system shows HSBC’s limited and incompetent approach towards adoption of latest technology to sustain in the today’s competitive world (Rudgard, 2016). Despite all these controversies, HSBC also known for its revolutionary change in traditional markets in Shanghai through issuing early banknotes in 1865, late imperial era. This bank innovated new and powerful network connections with credit instruments. (Horesh, 2006) On the flip side, virgin group also has some controversies like every business venture which he starts he become as the king of monopoly. He has blamed for the sufferings of others which is a clear case of schadenfreude. He sends people on the space and for that, tickets were also sold. While, the aircraft was not ready yet and rockets was failed twice. The project has postponed for now. Another instance of virgin group was that Richard was considered as the person who is famous for breaking rules and passing the blame to others if the business fails and in addition to that he takes the risk while he already knows about the result. Branson always talks about the fair pricing policies in business and he uses this trick to enter in new businesses. And after entering the venture the prices were remained the same and never come down. He never fulfills such type of his promises. This also lacks his leadership skills. (Sabnavis, 4 May,2014). But all in all, Virgin Group has less contemporary issues in its whole tenure as comparison to HSBC. Leadership in Teams: Leading in team needs a strong hold on changing aspect of group. To balance the leadership and team work, leader should follow the best practices like integrity, communication, collaboration, creativity, goal driven, empowerment and team building (Sohmen,2013). (Key Roles of Team) In Teams: (Allan, Hamza and Sarita) In a Diverse / Cultural Context: There are two organizations that shows diverse style in leadership. Among Virgin group and HSBC company, Virgin Group proves its positivist in leadership with the help of explaining contemporary issues from both organizations. On the contrary, HSBC has dark leadership as there are numerous controversies happened in the company. Leadership in Cultural/diversity context in any organization explains how a company gives value to its members and their beliefs, norms and behaviour. In this competitive era, the multinational companies are accepting the cultural diversity in their leadership style to identify, select and manage activities of these appropriate and culturally diverse leaders. Cultural diversity helps the organization to understand and learn different perspectives of many other cultures that covers equality rather than superiority. (Northouse, 2013) Virgin Group follows adaptive culture in the leadership as CEO of Virgin Group, Richard Branson value feelings of administration and built a confidence in his employees. He believes in making his employees confident by accepting their innovative suggestions as he emphasizes more on human interactions (Sabnavis & Madan, 2014). Branson always appreciate innovation through fresh ideas of employees because he learned that by encouraging people at organization makes business more profitable and booming. (Why Richard Branson values diversity, 2017). He always believes that there can be no formulas apply for a great company culture. The key for that is you should treat your staff as the way u would like to be treated by others. This theory of Richard Branson has shown that he has the trait of extroversion and conscientiousness. (Gold, March 30,2017). Branson believes that if employees are inspired and they work without any intervention and fearless then they can put their best in their work and achieve better results in some or another way and, they are able to take more risks in the business. (Khoo, 2003) Branson believes that an employer should enjoy bad and good times together with their employees. It is the employees who can contribute highly in the growth of the company. If employees are happy then they enjoy their experience with your company otherwise the customer will also feel miserable along with the employees. His philosophy in different companies as like this, if there are 50 people in one company them he asks the managing director, deputy sales manager and deputy marketing manager and shift them to another company till the new company gains the same position and same size of 50 people. Then he does same thing again to set up other 25-30 small record companies. By doing this they became the biggest record company of the world. So, it can be said that the culture of virgin group is diversified and in the favour of its employees which establish a growing environment in the company. Decision-making and Problem solving: Organizations fall into very different situations from time to time. It is very important to consider that for a company like Virgin Group and HSBC, decision making and problem solving is very important. Therefore, the same way individuals make decisions at a personal level, likewise, the leaders in organisation arrive at their decisions. Leaders in an Organizations operate in a competitive and problematic environment. Therefore, in their continuance of their operations, they come across problems that demand problem-solving and decision-making skills. In the following discussion, this report compares the problem solving and decision making between HSBC and Virgin Group. The problem-solving skills of Gulliver in HSBC and Bradson in Virgin Group is proficient in their own ways. In HSBC, the decision making and control is centralised as a role of Gulliver. Being a multinational company Gulliver in HSBC follows an autocratic leadership style to run the organisation. Hence there is no exposure for the ideas for lower level of employees for innovation and creative thinking. Here principle of democracy does not pay any attention ("Effective teamwork in organisations," 2015). For example, mortgage lending issue faced by the company was only resolved by the company Board of Directors without requesting for the opinion of the senior managers. This proves that the problem and decision making only involves the company top management. This approach locks out the opinions and suggestions of other efficient senior managers. In HSBC’s history, we have seen already the ambiguities of management. For instance, according to reporter Hayley, one of the Gulliver failure is to close the tax investigation due to the demand of string of information by taxman (Kirton, 2017). In addition, as per Forbes, Gulliver, CEO, HSBC faced allegations over money laundering and libor interest rate rigging probe ("The worst CEO screw-ups of 2012," 2012). However, Gulliver in HSBC improved the decision-making style by adopting data analytics software to help the process ("HSBC improves decision making process,"). On the other hand, the Management of the Virgin group follows a contingency approach. As per Richard Branson “To launch a business means successfully solving problems and solving problems means listening” (Branson, 2009). Being as a CEO of virgin group Josh Baybliss always makes business decisions as an investment committee member (Sammi, 2014). He is never scared of making mistakes and was willing to proffer a vison of consistency with business objectives without provoking any friction. He always involves people in decision making process by offering them with comprehensible guidance on business strategies and thus builds accountability and self- awareness. The execution of plans and decision making are managed with the close reference to the problems at hand. For Example, even after being unsuccessful in attaining a mark in the US market with ‘Cola Wars’, Branson still took anticipations and accumulate knowledge from his faults that helps Virgin to grow substantially (Branson, 2009). Richard Branson, in most of his business plans concentrated on the minute section of market and provides them quality goods and amenities. The major contributor that helps Branson in solving problems is his propensity to lead people in exploring inventive and profitable ventures that helps virgin group to be a successful. Baybliss along with his management team Peter Norris as the Chairman of virgin group; Patrick McCall as the Senior Managing Director; Evan Lovell as the Managing Director of Investments and Lisa Thomas, the Managing Director of Virgin Enterprises of the virgin group employ the notion of creativity to motivate employees to inflate their contribution in solving problems irrespective of the level of hierarchy. The organisation has also conceived a system to improve regulations in the company. The senior management solicits the employees to accomplished their competences in a way so that they can complement the company. The inclination behind this is to facilitate the philosophy which leads to individual gain for each person involved which can further results in rewards for shareholders, employees and managers. At virgin group, the company has many goals to attained like expanding the worldwide presence and establishing of consumer loyalty. Geraldine Chin Moody, the Group Executive people and Amy SawBridge, the head of employees experience along with other top executives are responsible for directing these goals and must ensure that these are feasible for them to be accepted well by employees. Virgin formulates strategies based on SMART approach thus making all objectives Specific, Measurable, Achievable, Realistic and Time related (Sadq, 2016). There is a balance of centralisation and decentralisation at virgin group and this was procured through by reforming their process of making decisions at authority levels. All decisions are framed according to abilities and necessities. There is more liberation at lower levels in virgin as the leadership of virgin believes in human prospective. Hence, they avoid unwanted delays in decision at execution level. Sir Richard Branson followed four rules for making arduous decisions which is followed by all the employees in the company (CHAMPROUX , 2014). 1. Don’t Act on an emotional response: He always gives enough time to his decisions just to lose the influence of any apprehensions 2. Find As many downsides to an idea as possible: He always contemplates everything that could go wrong before he proceeds forward with the decisions. 3. Look at the big picture: Before making any decisions, Sir Branson scrutinizes the effects of decisions in his other projects in both long and short term. 4. Protect the downside: He always restrained losses before going forward with the new business ventures. Therefore, it is indisputable that problem-solving and decision-making technique in Virgin Group outperforms HSBC because the decision-making process of Branson and Baybliss involves more employee engagement at Virgin Group by considering operational and knowledge management decisions of the management. Conclusions and Recommendation References Argote, L., & Ingram, P. (2000). Knowledge transfer: A basis for competitive advantage in firms. 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