Question

In 1990, pankaj katariya, a Chartered Accountant, was elected as the Chairman of promising Life Insurance Company, which was, at that time the third largest Life Insurance Company in the country. During the next 5 years, however, while its business increased, it did not grow as fast as its major competitors, and Promising Company dropped from third to sixth place.

This naturally perturbed Pankaj Katariya as it did the Board of Directors of the company. Finally, after deliberations, the Board Of Directors concluded that the lack of leadership in the sales of both ordinary life policies and group life insurance was the major cause of company’* comparative slow progress. It was also generally concluded that the two Directors in charge of sales in these two major areas of business were competent executive and leaders but the regional and district managers working under them were not very competent leaders.

Pankaj Katariya called these two Directors and asked them to ensure strong leadership at the regional and district levels or else quit their jobs. As these Directors left the meeting with the Chairman, one Director told the other, “Now, just how do we make people leader? How can we be sure whether or not a person is a leader? You know this is a tough job.”

Read and analyse the above case and answer the following questions:

(a) If you were one of the Directors, how would you have answered the questions that the other Director had raised?

(b) What would you do about developing strong leaders?

Answer 1

(a) One of the Directors has raised questions as to how people can be made leaders? How they can find out whether a person is a leader or not? Lack of leadership at the level of regional and district managers under two directors in charge of sales in two areas, was creating problems for promising Life Insurance Company. Leadership is defined as a position of power held by an individual in a group, which provides him with an opportunity to exercise interpersonal influence on the group members for mobilizing and directing their efforts towards certain goals.

In business enterprises, managers at various levels assume the role of leadership in relation to their subordinates for getting the right things done in a proper manner to achieve a certain set of goals. The effectiveness of managers as leaders is critical to organizational survival and success.

According to one school of thought, leadership is an inborn quality possessed by individuals. However, people can be made leaders by formal training, providing exposure to new and diverse situations, providing autonomy and accountability, interaction, challenging goals, job rotation and so on. It is not a simple task to identify whether a person is leader or not. We have to see his knowledge, experience, number of followers and their loyalty, his ability to solve complex and diverse problems and so on. Effectiveness of a leader is measured by the degree of influence a person has over his followers.

There inter-related determinates of leadership effectiveness are stated as follows:

(i) Effective leadership requires certain basic qualities among persons who assume the role of leaders. These are necessary but not sufficient.

(ii) There is no ideal or leadership style or basic behavior generally applicable for all situations. Leadership effectiveness can be secured or enhanced by tailoring the style to the demands of each situation.

(iii) The important situational factors which exert considerable influence or leadership effectiveness are: task complexities, the skills and attitudes of the group of followers, their relations with the leader and position, power of the leader himself.

(iv) (b) It is necessary and possible for managers to develop and improve their leadership abilities. It is necessary because managers thing done through their subordinates. They will be able to get things done effectively if they have leadership ability. It is possible because there are several means and techniques of acquiring leadership abilities.

(i) Leadership training. Training programmes are offered to expose managers to several leadership situations and teach them how to tackle them. The situations are partly simulated and partly real.

(ii) Internal organizational exposure. Another measure to develop the leadership ability of managers is to expose them within the organization itself to critical situations calling for application of leadership abilities.

(iii) Autonomy and accountability. Managers may be able to sharpen their leadership abilities under conditions of relative freedom. They should be allowed a large amount of freedom to evolve their own methods of tackling situations calling for critical leadership abilities.

(iv) Opportunities for interaction. Managers should also have opportunities to interact with their subordinates in a more intense and continuous manner. This is partly a matter of availability to time. Many managers get themselves so extremely busy with their own work that they find little time to talk or listen to their subordinates, to guide them, to understand their view points, to be supportive to them and develop them.

(v) Setting challenging but realistic goals. Managers have to be put on their toes most of the time in their career setting challenging goals to be met within particular time frames. A highly demanding job environment for managers is likely to force them to develop the needed leadership abilities.

(vi) Job rotation. Managers may also be helped to develop leadership skills by a process of systematic rotation of their jobs. They should be exposed to a variety of superior-subordinate relations and job environments so that they develop the ability of coping with situations, which do not permit them to adopt stereotyped styles or approaches.