Report Proposal on Steward Theory

Theoretical Framework

One of the most common organizational theory is the agency theory, according to which an organizational leader uses controls and processes to guide an organization to achieve its goals (Neuhaus, et al 2017). Rodin (2010) argued that while agency theory is self-serving, there are alternative theories that rely on the goodness of individuals. One such alternative theory, ‘Steward Leadership’ was evaluated by Wilson (2016).

[hbupro_banner id=”6299″]

Wilson (2016) argued that usually it is considered that common leadership approaches can be applied in a non-profit as well as in a for-profit organization. However, according to the arguments by Wislon (2016), since the organizational goals of the two organizational forms (non-profit and for-profit) are different so the leadership approach also needs to be different. While Wilson (2016) focused on the application of leadership approaches in historical and religious contexts as well, however as per the scope of this paper, the focus is confined to modern organizational settings.

According to Wilson (2016), there are five key characteristics of steward leadership: First, it is based on the identity of the leader. Second, the leader understands that the resources under him are not owned by him instead they are just under his care. Third, the leader has a strong relationship with the owner as the leader considers himself to be just a caretaker of the resources. Fourth, a leader not only considers himself accountable but considers others in the organization accountable as well. Fifth, the leader is able to manage different kinds of resources, efficiently.

Although Wilson (2016) focused on the steward leadership approach, to evaluate the approach, there is a need to understand that no approach can be evaluated in isolation. Thus, there is a need to do a comparative analysis with another theory to analyze the effectiveness. The analysis is done by comparing steward theory with servant theory. There are several differences between servant leadership and steward leadership: First difference is related to the strategy; while a servant leader focuses on meeting the highest priority needs of others and developing them as individuals, a steward leader focuses on the objectives of different stakeholders by managing resources and people to achieve growth. The second difference is related to the style of leadership; while servant leadership is participative, steward leadership can be participative and authoritarian as well (depending on the situation). The third difference is related to the motivation; while a servant leader is focused on service to others, a steward leader is focused on responsibility and authority. The fourth difference is related to the goal of leadership; while a servant leader focuses on empowering others, a steward leader is focused on achieving sustainability in an organization. The fifth difference is related to the characteristics of the leader; while a servant leader is focused on characteristics like awareness, foresight, community, and commitment from the employees, a steward leader focuses on characteristics like accountability, submissiveness, faithfulness, and self-sacrifice. The sixth factor is related to the action plan of the leaders; while a servant leader focuses on ‘servant first leader second’ approach, a steward leader focuses on accomplishing the objectives of the owners and stakeholders (Bell, 2014; Choi, 2014; Gini & Green, 2014).

[hbupro_banner id=”6296″]

Based on the above arguments, it can be inferred that the steward leadership approach can be considered to be a holistic as well as a sustainable approach to managing an organization. While it can be argued that this approach might not be relevant in for-profit organization, it can definitely be implemented in non-profit organizations as they are not looking to maximize the monetary returns for the owners (unlike that in a for-profit organization).

Organizational application

The above theoretical framework is being analyzed by applying it to a non-profit organization. I am familiar with an NGO (Non-governmental organization) that was established by a self-help group to help poor women earn money. The group employs the poor women in rural areas in India and provides them vocational training on various aspects including tailoring and stitching. The women are given all the necessary equipment and are asked to prepare jute bags that can be used at different grocery and retail stores. This NGO not only helps these women earn a living, but also contributes positively to the environment. The alternative to using jute bags is to use plastic bags that are harmful to the environment.

The organization acquires the raw materials from the farmers and sells the products. The net proceeds from the sales are used to buy raw materials in the next cycle and pay the employees.

This sustainable form of business is non-profit and has a high degree of steward leadership approach can be identified based on all the five characteristics of steward leadership as suggested by Wilson (2016): First, the organization is known by the identity of the leader. Second, the leader considers the women employees as not just revenue-generating resources but understands that the women are employed here to improve their financial position. Third, the leader considers that he is doing to improve the lives of others and he has been selected as a medium by ‘God’ to help other individuals. Fourth, clear roles have been defined for different employees and their roles have been well-defined so that there is no disruption in the workflow. Fifth, the leader himself has taken a lot of responsibilities in the organization including procuring the raw materials, ensuring the quality of the products, delivering the products to the stores, and marketing the products to new stores.

While the organization is a clear case of steward leadership, there are several challenges faced by the organization: First, the objective of the organization (non-profit) has limited the growth potential of the organization. While many businesses make the products using machines (and as a result, they can sell it for lower prices), the analyzed organization uses manual workforce which is both slow and expensive. Second, the leader of the organization is not able to bring in qualified employees for different supporting roles including marketing, procurement, and quality. The underlying cause is that due to the non-profit nature of the organization, the leader cannot offer high packages to the employees.

References

Bell, D. J. (2014). Stewardship and the Divine Gift Economy. Criswelll Theological Review, 11(2), 47-62.

Choi, G. (2014). The Leading Servant. The Journal of Applied Christian Leadership, 8(1), 8-16.

Gini, A. & Green, R.M. (2014). Three Characteristics of Leadership: Character, Steward, Experience. Business & Society Review, 119(4), 435-446.

Neubaum, D.O., Thomas, C.H., Dibrell, C. & Craig, J.B. (2017). Stewardship Climate Scale. Family Business Review, 30(1), 37-60.

Rodin, R. S. (2010). The Steward Leader: Transforming People, Organizations, and Communities. Downers Grove, IL: InterVarsity Press.

Wilson, K. R. (2016). Steward Leadership in the Non–Profit Organization. Downers Grove, IL: InterVarsity Press.