Case Study for Assessment 2 Requirements

When DGL International, a manufacturer of refinery equipment, brought John Terrill to manage its services division, company executives informed him of the urgent situation. Technical services, with 20 engineers, was the highest-paid, best-educated and least productive division in the company. The instructions to Terrill: turn it around. Terrill called a meeting of the engineers. He showed great concern for their personal welfare and asked point-blank: ‘What’s the problem? Why can’t we produce? Why does this division have such turnover?’ Without hesitation, employees launched a hail of complaints, ‘I was hired as an engineer, not a pencil pusher’, and ‘We spend over half our time writing asinine reports in triplicate for top management, and no one reads the reports’. After a two-hour discussion, Terrill concluded he had to get top management off the engineers’ backs. He promised the engineers, ‘My job is to stay out of your way so you can do your work, and I’ll try to keep top management off your backs, too’. He called for the day’s reports and issued an order effective immediately that the originals be turned in daily to his office rather than mailed to headquarters. For three weeks, technical reports piled up on his desk. By month’s end, the stack was nearly a metre high. During that time no one called for the reports. When other managers entered his office and saw the stack, they usually asked, ‘What’s all this?’ Terrill answered: ‘Technical reports’. No one asked to read them. Finally, at month’s end, a secretary from finance called and asked for the monthly travel and expense report, Terrill responded, ‘Meet me in the president’s office tomorrow morning’. The next morning the engineers cheered as Terrill walked through the department pushing a cart loaded with the enormous stack of reports. They knew the showdown had come. Terrill entered the CEO’s office and placed the stack of reports on his desk. The CEO and the other senior executives looked bewildered. ‘This’, Terrill announced ‘is the reason for the lack of productivity in the technical services division. These are the reports you people require every month. The fact that they sat on my desk all month shows that no one reads this material. I suggest that the engineers’ time could be used in a more productive manner’. The CEO and the senior executives admit that there has been a process error. However, they are not entirely convinced on how Terrill attempted to resolve it. The company brings in you as an organisational leadership consultant to assess the current issues and provide a report with recommendations to resolve matters related to leadership and team development. Refer to the assessment instruction document for detailed instruction.

 

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Solution:

Introduction

Leadership has become a key research subject in the current era of technological advancement, entrepreneurial growth and organizational development. According to Zaccaro and Klimoski (2002, p. 4), studies regarding organizational leadership have been labelled ‘context-free’ as low consideration has been given to the fluctuating organizational variables that influence the impact and nature of leadership. The interpersonal processes that take place between leaders and employees of organizations affect the individual and collective performances and drive business success. One of the major obstacles in comprehending organisational leadership lies in the use of the same constructs to evaluate leadership across different organizational levels (Zaccaro & Klimoski 2002, p. 4). In other words, the assumption that the dynamics at the top of an organization’s management are similar to those at the lower levels. This has not only limited the empirical investigation on organizational leadership, which is a dual-focused management strategy, aimed at achieving optimum performance levels of individuals and groups simultaneously (Khator 2012, p. 100). It has also resulted in intricate problems that have contributed heavily towards lower productivity and turnover for companies around the world. In this regard, DGL International, a fabricator of refinery equipment, is selected as the case study for organizational leadership analysis. The firm’s technical services division is currently facing serious problems related to the company’s leadership. As a consultant, the purpose of this report is to analyze the problems faced by DGL International’s technical services division in light of relevant leadership theories and concepts, and propose specific recommendations for the top and lower management employees to address the discussed issues. This purpose will be attained by employing the support of existing literature to investigate the significance of organizational leadership in maintaining good performance, and the importance of team composition in organizational composition. A discussion of the issues will follow in light of two leadership styles, and an appraisal on the role of senior leadership and the technical services division staff of DGL International. Finally, actionable recommendations would be made for both the leadership and the employees to tackle the discussed issues.

Organisational Leadership and Performance

In any organization, leadership is considered as a social process that involves social situations, leaders and followers. An effective leadership engages the overall responsiveness (also termed as cumulative capability) of the organization by extracting the maximum from the different set of available skills and potential of the followers, thereby enhancing the individual and collective performance. According to Tuan (2010, pg. 260), leadership has undergone significant changes in organizations to deal with the highly competitive global marketplace that is influenced by complex technologies, social diversity and geopolitical instability. Such leadership styles have been characterized by collaborative and interactive workplace environments that have boosted the performance of followers and leaders. Leadership is a process through which a leader influences the subordinates and followers to accomplish shared business goals by leading coherently and cohesively (Al-Tameemi & Alshawi 2014, p. 2). In this regard, transformational and transactional leadership styles have governed how the leaders and follower interact and work towards a common purpose. According to Szewczak and Snodgrass (2002, p. 15), transformational leadership is a leader-follower relationship that comprises of a sense of responsibility towards the development and growth of the followers, which ultimately improves their performance. On the other hand, transactional leadership is an exchange relationship where the leaders hold the authority over their subordinates, and value a directed and structured environment in which the followers have to be self-motivated to enhance their performance and achieve organizational goals (Bass & Avolio 1993, p. 112). Transformational leadership has proved to be a crucial leadership style as far as performance is concerned. This is because it incorporates idealised influence, individual consideration, inspirational motivation, and intellectual stimulation as the main constructs of leadership behaviour (Pounder 2001, p. 281). However, transactional leadership only highlights the positive aspects of transformational leadership by incorporating relatively less inspirational, and an authoritative behaviour, where self-motivation is the only choice for the followers to boost their performance and fear of punishment emerges in the case of failure to comply with the leaders’ wishes (Pounder 2001, p. 283). Therefore, it can be affirmed that leadership affects performance through the adopted leadership styles of leaders.

Significance of Team Composition in Organizational Composition

Team composition is the combined set of skills of a group of two or more employees, and it plays a pivotal role in shaping the composition of the organization as a whole. The attributes of team members enable effective teamwork. A balanced team composition does not only include skills and knowledge, but it also comprises of the individual differences in personality traits, demographics, values that constitute a balanced organizational composition. Team composition does not only enquire about what each member contributes to the group in terms of skill set, experience and ability, but it also questions whether these individual competencies can combine to result in a high-performance organizational composition (Zarzu, Scarlat & Falcioglu 2013, p. 1322). The different competencies of individuals provide different resources to the team, where each resource contributes to organizational composition. Team composition exhibits heterogeneity that creates valuable synergy, interactions and group cohesiveness in an organization (Hsu, Wu & Yeh 2011, p. 336). Team composition also imparts innovation due to diversity, out-of-the-box thinking, conflicting ideas and creativity. Team composition and its underlying diversity is instrumental for effective organizational composition as it leads to higher motivation, satisfaction and high-quality team output. Moreover, team size is a crucial element of team composition as large teams can generate relatively larger outputs as additional members add to the skillset and resources, therefore this will enhance team composition in better way. However, if the team size is too large, there can be complications in interactions that can affect the organizational composition by decreasing the trust and satisfaction of team members. Small teams can provide a better combination of team composition by improving team coordination and communication, which is reflected in the organizational composition (Horwitz 2005, p. 234). A well-developed team composition results in a well-developed organizational composition.

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Issue Analysis

DGL International faces a stiff challenge in addressing the arising issues in its services division. The team composition comprises of 20 well-educated and high-paid employees who are engineering graduates. The overall mix of characteristics includes technical and analytical engineering skills, critical and logical thinking, decision-making, curiosity, creativity, effective communication, teamwork, problem-solving, and leadership skills. Despite the high salaries and tremendous team composition, the output of the services division is the least productive in the company. This implies that the work input is much greater than the work output. The complaints of these engineers regarding spending too much time on writing technical reports indicate that these employees are being kept away from their main job responsibilities by the top management. At the same time, the top management did not bother to read those reports for at least a month, and this points out to the significance of those technical reports in the eyes of top management. Therefore, it is evident that too much effort is being put in by the engineers of the services division for writing documents, and it had to be done as the top management was involved. As a result, the engineers’ work productivity declined as they were unable to focus on their main job duties. In other words, the time spent by engineers in writing reports could have been spent more productively, and there were frailties in the way processes were being performed in the services division of DGL International. Lack of management of time allocation for the engineers’ responsibilities is the root cause of the lower productivity of the services division.

Prior to the appointment of Mr. Terrill for managing the services division, the leadership of the services division exhibited a transactional style where the management was strict and favoured punitive micromanagement. At the same time, the followers (i.e. the engineers) do not have the authority to raise questions on how and why their time was allocated to a task (i.e. writing technical reports) that was largely left unnoticed by the management for at least a month. The followers had to get the report-writing work completed to avoid a confrontation with the management that could risk their jobs. This implies that the followers are motivated by the lower order needs (safety and physiological needs) in the theoretical concept of Maslow’s hierarchy (Khator 2012, p. 101). Simultaneously, this also corresponds to the Theory X of leadership that is characterized by authoritative management and self-motivated followers (Khator 2012, p. 101). Moreover, the leadership of the services division reinforce the management theories of leadership (also called transactional theories) where authority, supervision, and a reward-punishment system is dominant (Odumeru & Ogbonna 2013, p. 358). Employees of the services division at the DGL International are wary of the consequences of not completing and submitting the technical reports on time, which is why transactional leadership is evident. Furthermore, an authoritarian (also called autocratic) style is also apparent because the management of the services division at DGL International has provided clear expectations to the engineers regarding what needs to be carried out, how it should be performed, and when it should be completed, with little or no input from the engineers. Also, the situational leadership theory’s ‘High Ability, Low Willingness’ region is dominant for this case as the team composition is strong, but there is a lack of willingness amongst the engineers due to the weak leader-follower relationship (Mehta 2011, p. 3). This is why the output and productivity have been largely on the lower side.

While the leadership before the arrival of Mr. Terrill adopted a coercive and legitimate source of power where the lower authority (followers) report to the higher authority (management), and a strict reward-punishment system is evident, Mr. Terrill adopted a transformational style of leadership derived from an expert source of power. This leadership style takes the input of the followers to decide on how work-related processes can be improved. A participative (also called democratic), interactive and a collaborative leadership style has evidenced after Mr. Terrill’s two-hour meeting with the engineers of the services division regarding the problems faced by the team (Odumeru & Ogbonna 2013, p. 356). This transformational leadership style concurs with the Theory Y of leadership as Mr. Terrill gave confidence and motivation to the services division engineers, and formed a consensual meeting to deal with the arising problem (Khator 2012, p. 101). As a result, the followers (engineers) were motivated by the higher-order needs (belonging and self-actualization) of Maslow’s hierarchy. On the other hand, the top management and the senior leadership were concerned by the straightforwardness and aggressive transformational leadership approach adopted by Mr. Terrill that could disturb how the company’s existing processes were handled and performed. The senior leadership was expecting Mr. Terrill to find a solution that would suit the existing transactional and authoritative leadership style of the company’s management. However, Mr. Terrill took a bold step by empowering the services division engineers and raising their concerns to the top management, collecting the reports daily, and observing how frequently the finance department was checking those reports. These actions have also exposed the lack of interest of the finance department in reading the technical reports regularly which in turn, has identified loopholes in their performance and is a cause of concern for the senior management.

 

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