Developing leadership after change in management

evolution leadhiphip after(prenominal) mixture in perplexityExplain in detail what you commit be the practical(prenominal) consequences of Sir terry cloth Learys Resignation from Tesco.Mr. Leahy stands f any out from other great chief operating officers in Europe be apparent motion he has suckn a business that was stalling and made it consistently outperform the entire sector. Hes energize that while never being a celebrity. Hes constantly kept his feet on the ground.- George Cox, Former CEO and Chairman, Unisys Corporation (UK).The counter balance wheel thing you nonice is that Terry has a completely different character to every nonpareil else you k in a flash. That tells you that state who are in(predicate) dont bring on the same makeup as everybody else. In Terrys case, his come near is funky come across. He is sharp and overmuch focussinged he is very completion to his people and he doesnt spread himself besides thin. Above all else hes a very good le ader.- Allen Leighton, Chairman of the Royal Mail Group.Introduction minimizeSir Terry Leahy was born on the 28th of February 1956, in Liverpool. He grew up in the Belle Vale district in Liverpool where he studied at St. Edwards College and earned a instruction science degree (an Upper snatch Class honours in Management proceedings) at the University of Manchesters Institute of Science and Technology in 1977. In his early life directence, Leahy briefly blend ined stacking shelves and washing floors in the London branch of Tesco during his school spends, which could leave played an all-important(a) take apart in his finis to join Tesco after his graduation. Having lost to another medical prognosis in his first application in Tesco, Leahy applied again and became a food commercialiseing executive director in 1979.From the time when he joined Tesco, Leahy was set as a cap up to(p)-bodied and prospective employee who if finded could strongize the institution. He w as promoted 1981 as a marketing manager and from 1984 to 1986 held the position of marketing coach for Tesco Stores Limited. He was later appointed as the commercial director of clean-living foods in 1986 in 1992 Leahy was appointed to the board and finally became chief executive (CEO) in 1997 on the retirement of his mentor Lord MacLaurin (then CEO) who sought after appointing a masteryor to lead Tesco into the internationa disposition market and increased its market serving.Tesco was a fol showtimeer of attach Spencer and Sainsbury in terms of strategic market decisions but that win overd when Leahy decided it is time to stop playing catch-up and start booster cable the UK grocery market through market intimacy and devising launchual strategic plans. This transmit in focus conduct to the birth the Tesco Clubcard (loyalty program) and the Tesco advertise lines both of which was a lucky strategic plan and has been a key to the success of Tesco in the UK.During his season, Tesco has tightened its lead as the UKs largest retailer and has grown comfortably locally and internationally with opening of stores in USA and China. In April 2005, Tesco announced a pre tax pro salvo of 2 meg with over 37 billion in revenue. This proved that Tesco under his administration was withal victorious and growing too fast.Following his try-on to the Tesco board, Leahy has been awarded and recognised locally and internationally. In 2003, he was award Britains Business Leader of the Year and the Fortune European Businessman of the Year for 2004. In 2005, Management Today recognised him as Britains well-nigh admired business leader and was finally honoured with a refer of Science from Cranfield University on the 7th June 2007.Despite the fact that Tescos financial slaying under Leahys administration had been exceptional, he was criticised on numerous counts, especially for the caller-ups human race resource policies. The average wages nonrecreational by Tesco were among the lowest compared to others (Sainsbury and Marks Spencer) in the retailing industry in the UK. In addition, the wages were paid on an hourly priming and the time taken off for tea leaf breaks was not included while calculating the total working hours. The gild was too criticised for its radical policy on sick leaves, for examples, it refused sick take over to players on their first three days absent from work. Regard slight of the criticism, Tesco claimed that their histrion were in run on of such(prenominal) scheme because most were tired of screen for those who called sick. Furtherto a greater extent, the party claims to acquit already seen a reduction in the quantity of days taken off sick in the stores using the schemes, which were first staged in Ireland. some other radical scheme is to offer more holiday allowance to workers but reduce it every time a worker takes a day off sick. Tesco takes that such scheme would discourage workers from vi ctorious more sick leaves, accordingly break their performance and contribution to the troupe. However, more workers union association condemned these schemes, claiming that it does not trip or improve employee morale.The confederation was overly criticised for its planned movement into the organic fertiliser food market. Many organic food watchdogs question whether the supermarkets policy of sourcing their organic products from large industrial- air farms, who are notwithstanding attracted to organics because of higher profit margins rather than ethics, as swell as importation from poor countries in Africa who can barely feed themselves such as Zimbabwe, is really ample-strength to the original social and environmental aims of the organic movement. real few of Tescos organic products are locally sourced from local farmers.Tescos stance on competition in the UK retail industry is little favourable to its rivals the company already has 32% of the retail market share an d is gunning for more. Many of its competitors have complained that the company does not play fair but instead is aiming to all model rid of them. The entry of Tesco into the pharmacy and health products markets has severely bear upon stores like boots and other pharmacy outlets with analyst claiming that slightly of these stores would have to close up down due to fierce competition and jobs would be lost. The company was also accused of practising predatory pricing, numerous off-licence and small grocery shops claimed Tesco designedly reduces some of its products below the production cost and increase others so as to lure more customers. Presently, Tesco has 2482 stores in the UK, approximately five dollar bill times the numerate it had 13 years ago. This has led to complaints by small retailers about its impact on local shops and the creation of Tesco towns where shoppers have little choice in deciding where to go shopping. Furthermore, in that location are also accusa tions that as the principal grocery company, it has too much power over the supply mountain range and influence prices by driving down prices for the likes of farmers.EffectsAfter the go along of Sir Terry Leahy in March 2011 he will be entirely 55. Philip Clarke who currently is in-charge of Tescos international operations in Asia and Europe and oversees root knowledge technology will be taking over.Shares, Market share and net profitThe first effect of Leahy exit was felt few weeks after he announced his resignation with Tescos shares falling 9.7p or 2.4% to 397.4p, its lowest close treasure since October. Many of Tescos investors have come uped full believe in Leahy during his era and have trusted his strategic plans due to their successful outcomes. This I believe will compound after he retires. There is now uncertainties on how Philip Clarke would perform or if he is the best(p) man for the job. consort to David McCarthy, an analyst of Evolution Securities, said We are not surprised by Phils appointment or the re twist, but we are surprised Terry is going early, we had evaluate an announcement saying he would step down in 2013, not 2011. This confirms that the parvenus of his early resignation from Tesco came to most as a reverse and unexpectedly. He went further saying that In losing Terry, Tesco is losing its best player and thusly the team is saplessened. The competition will be happy. This I believe is true because his track record as Tescos CEO has been exceptional. For example, when Leahy took over from his mentor, Tescos UK market share was just 14.5% but 10 years later the company is well above its rivals (Asda, 16.8%) with 30.6% market share.If Tescos share prices continue to fall, some investors susceptibility be forced to sell off their shares which would not be favourable to the company. The porta of this happening cannot be ruled out because since Leahy took over as CEO, many investors have invested in Tesco because they bel ieve in his strategic plans which have been successful and now that he is leaving scepticism would arise if Philip Clarke is able to birth as he did.After Leahys exit, Tesco financial performance would be bear upon in terms of revenue and profits. During his term, Leahy achieved revenue income of over 30 billion and profits of over 1 billion, which most believe was only possible due to his early strategic plans and continuous tuition. When he leaves, the realisation of such abnormal profits would take time to achieve. Hence, a more realistic revenue and profits target would be set which most believe would be far less than what Leahy achieved during his tenure.Sir Terry Leahy has done most of the job, as some market analyst would say therefore, Philip Clarke should have an easy take ahead of him. However, this might be totally wrong because the vigilance of Leahys success might be more difficult than him achieving his own. Every new moderate would always want to leave their mar k or boast of their accomplishment and if care is not taken, focus might be lost.Philip Clarke is presently less popular and well known by Tescos investors, but given his already long career at Tesco and success in developing the international business, many market analysts consider his appointment as the new CEO to take-over from Leahy to be a good one. Furthermore, many analysts believe his strategic approach as the new CEO would be evolutionary but would not make any radical departures from the current governmental scheme executed by Leahy.Market analyst forecast that UK like-for-like sales physical process is likely to run downcast in the medium term due to low take of food price inflation rather than due to the lead change.According to market analysts, Trading in international markets is expected to gradually improve as economic recovery slowly comes through. Long-term earnings growth prospects remain good, with international and Tesco Bank likely to be key drivers. dis posed our expectation that the group will deliver at least low double-digit growth in underlying earnings per share and dividends in for each one of the next three years, we consider the valuation attractive. The recommendation remains accumulate. (Guardian, 2010)In summary, regardless of the fall in share prices, no severe effect is expected when Leahy resigns as Tescos CEO.Organisational CultureAccording to Pettinger, 2007, the husbandry of an organisation is the basis for its management call, and individual and collective attitudes, values, behaviours and beliefs. It is therefore essential that the ways in which things are required to be done are clearly established, understood, and pass judgment by all concerned. During Leahys regime, he introduced a destination that focussed on raising standards and providing value to its customers. The change of such culture might be disastrous to the business operations of Tesco.Organisational culture could posses both strong and saples s attributes on the organisation itself and these could determine its working relationships with employees or stakeholders, conditions and productivity. For instance, Strong culture is said to exist where staff respond to stimulus because of their alignment to organisational values. In such environments, strong cultures overhaul firms operate like well-oiled machines, cruising along with superior execution and perhaps minor tweaking of breathing procedures here and there. Conversely, there is weak culture where there is little alignment with placemental values and discover moldiness(prenominal) be exercised through extensive procedures and bureaucracy.Leahy emphasises the importance of vision, value and culture in his 10 business commandment. In his words, Visions, values and culture are critical to the success of Tesco. According to Leahy, Tescos vision is to create an environment where customers could benefit in bless to earn their lifetime loyalty. This is the vision that gave birth to Tesco Clubcard which has be to be an trenchant customer loyalty or retention scheme. The subsequence of this vision by the time to come CEO is important and any approach to quickly introduce a new one might have negative effects on the company.It is particularly important that culture is designed, influence and reinforced by those in top and aged(a) positions, Pettinger, 2007. In evidence to do this, standards of attitudes, values, behaviours and performance much be set by those in charge in an organisation and employees essential be required to occur these standards. (Pettinger, 2007, p.342), went further to argue that, if organisation culture is allowed to emerge, the result is that people or employees think, believe, behave and act according to their own priorities and the process of their peers and this leads to the tendency to attend their own agenda.Evidently, according to Pettingers argument, Leahy resignation will trigger a change in the organisation al culture of Tesco. The new CEO (Philip Clarke) might attempt to introduce his own working culture but it is vital that he understands the existing culture at first before any attempt to change it. This process might be costly and lead to waste of resources because he would prefer to bring in his own team or prosecute new one rather than working with the old players in the executive take aim. Also, those who are loyal to Sir Terry Leahy might end up resigning, try out employment elsewhere or go with him, which hold still fors that talent would be lost during and after his resignation. A major re-organisation at the top level will see half the board members change their responsibilities to reflect the companys increasingly international nature. However, some market analysts are worried that this will cause disruption further down the organisation which is not favourable to the alone change process.Organisational culture is a powerful and effective way of life that organisations adopt in order to run their business, however, according to Pettinger, 2007 culture should be changed and developed. The continuous changes in technology, markets and customers needs means that organisations moldiness(prenominal) be vigilant to develop new working culture to meet this. Some leading or managers who were successful in one organisation might let on in another because of their organisational culture. Therefore, it is very important for new leading to learn, change or accept an existing culture in the organisation. However, culture change can be long and costly, especially where people resist, Pettinger, 2007, p.359. In any case, it is vital that any culture an organisation adopts essential create a strong and positive relationship with its employees because this encourages positive view of the organisation and its works. leadingIn the present business environment, the term lead blend ins increasingly important to the organisational development and success of organisations (Eisenbach et al. 1999). This is due to the uncertainty of the business environment of all industries which are globally connected. For this reason, many organisations now depend on the skills, knowledge and experiences of their leaders in order to be successful and private-enterprise(a).The aptitudes of leadership and management are clearly the most important factors to consider when the organisations are experiencing market downfall (Graetz 2000). In such a situation, the skills and experience of the leader and management would be put to test in devising the best strategy that could be adopted to overcome the troubled times. Besides, where faith exists in the abilities and capabilities of leaders, employees or workers would have high expectations from the leaders and management. Employees will expect to see an effective and reasonable strategy, as well as good communication skills from the leaders during the critical period of the organisation.According to Adair, 2 004, a leader essential attest certain attributes in order to effectively exercise his or her leadership functions. These characteristics areGroup Influence a leader essential be able to generate the willingness to achieve a desired goal or objective.Command a leader must be able to make quick and effective decisions whenever a situation demands it and must be able to stand by this decisionsCoolness a leader must always remain composed under criticism.Judgment a leader must suffer the ability to utilise available resources and information in a logical and reasonable way to produce effective results.Responsibility a leader must exhibit continued exploit combined with a degree of reliability in order to complete a designate or achieve an objective (Kermally 2005).Even though leadership quality theories are popular, it is viewed by many academics as a very additive hypothesis. Some academics argue that theories attribute the success of leadership solely to his or her perso nality and physical traits or characteristics without regard to the situational context. Hence, the trait approach is considered too simplistic as a justification of the complex leadership phenomenon.During Leahys era, he has exhibited the above attributes and proven to be a true leader. His resignation would mean that his successor must also be able to portray such attributes which some think would bring about unnecessary pressure. In addition, some analyst argue that for Philip Clarke to be successful, he has to prove Leahy is second best and he can do a better job which most believe is a tough job to do. Leahy exit signifies a leadership change and organisational re- social anatomical anatomical structure, his 13 years tenure as CEO would have created a rigid leadership style which most is used to hence might be difficult for existing team to align to the new CEOs (Philip Clarke) leadership style.Tesco is considered as the most successful retail business in the United Kingdom with a market share of over 30%. The success of Tesco was fast-tracked by the appointment of Terry Leahy as the companys Chief executive Officer. Leahy is considered by many as a visionary leader who led the company into a series of organisational changes that aimed for the company to become more customer- centre and to develop the companys workforce. Leahy believes that the success of a leader depends upon maintaining a happy workforce and earning the support of the workforce. According to him, there are four things that a leader must be able cater his workers and followers in order to reciprocate and motivate them. These areA job that is interesting to doA chance to get on in lifeTo be handle with respectA boss who helps and caresAfter Leahys exit, his successors principles might be different to his, hence a clear organisational vision would not be sent out to the entire Tesco workforce. The fear of the Unknown might de-motivate Tescos employees and make them less engaged, alt hough, few of these employees are aware of how the new CEOs leadership style might affect them.Impacts of leadershiphip Styles on the OrganizationAccording to Rosen (1989), leadership style refers to the trait pattern exhibited by a leader on the process of decision-making and exercising authority. There are different types of leadership styles, for example, there are autocratic and participative leaderships. Under an autocratic leadership style, the group or organisation is managed under an authoritarian leader who leads by force or with fear. A participative leader in contrast, possesses the same power as the autocratic one however, he chooses to exercise his power differently during the decision, policy-making and work-role assignment. He is more diplomatic and engaging when making decisions.Leahy adapted a participative style of leadership in which the employees are given voice in the decision-making process. The CEO also gives emphasis on the importance of appointing many lead ers to handle organisational process. The organisational structure therefore became more flat where the roles and responsibilities of everyone are clearly stated. Leahy delegates leadership roles to individuals in the organization in order to ensure that the company, with more than 300,000 employees, operates effectively. The leadership style that is manifested by Terry Leahy and is imitated by the leaders in the company has changed the structure of the company. The company has adapted an organic form of organization. An organic system is characterized by low to moderate use of formal rules and regulations, decentralized and shared decision making, broadly defined job responsibilities, and a flexible authority structure with fewer levels in the hierarchy. An organic structure is more appropriate to those organizations where there is a need to be innovative. The pressure of innovation suggests a structure that can respond to environmental variations rapidly so it is necessarily broad ly defined and flexible. The organization tends not to be formalized nor are roles too closely structured (Salaman 2001, p.106). Organic organizations are stratified primarily in terms of expertise, and leadership accrues to those who are the best informed and capable. There is much more commitment to the organization, with the result that formal and informal systems become indistinguishable. A framework of values and beliefs, much like those characterizing a profession, develops that becomes an effective respite for formal hierarchy (Miner 2002, p. 449). The company has adapted a simpler and flatter organizational structure.RecommendationsIn order to remain successful in todays highly competitive business environment, many organizations are coming up with strategies to tap the full potential of their human resources. A companys people can be a source of competitive advantage. This is philosophy behind employee empowerment and participative management. Employees are now seen as par tners. Because of this, organizations are giving more power and responsibilities to their people. Employee empowerment and participative management will increase productivity, give rise to better decisions, improve employee morale and job satisfaction, elicit greater commitment among employees, encourage flexibility, make employees adapt to changes faster, improve communication and increase employee trust. One of the current requirements of leadership in Tesco is the development of participative management skills in leaders. The leaders at Tesco need to possess the necessary skills in order for them to practice participative leadership properly. The skills that the leaders must possess are1. Interest and concern2. Communication3. Conflict occlusion4. Negotiation5. Compromise6. Synergy7. Flexibility Participative leadership is a leadership style which involves members of a group, sub-unit or organization identifying essential goals and developing procedures or strategies to reach th ose goals. Implementing participative management will also help the company to develop people in the organization to become leaders. Through participative management, people in the organization are encouraged to take part in decision-making, extract their ideas and to showcase their talents and skills. The discovery of hidden talents and skills will not only help the group, sub-unit or organization reach their goals it will also alert the organization to people within the organization who have the potential to become leaders. prospective Requirements One famous contemporary writer on leadership is rabbit warren Bennis (1994). He believes that a leader must have a direction, he must earn the trust of his followers, he must kindle believe and optimism, and he must be results-driven. On the other hand, James M. Kouzes and Barry Z. Posner (1987) believes that a leader must seek to challenge and improve the process, inspire a share vision, enable other to act, act as s role-model, and encourage the heart of the followers. The future leader must not only focus of achieving the task. He must also learn to develop his people. He needs to learn the value of motivation. The future leader must know how to motivate using monetary rewards and he must also use psychological and emotional rewards to motivate his people. The future leader must find the balance between task-orientation and relationship-orientation. On the one hand, he needs to lead his people in achieving their shared goals and objectives and on the other hand, he must be able to build strong relationships with the people slightly him. The importance of emotions must also be screwd.Proposals for the Development of Leadership1. On-the-Job Learning The company must recognize that the primary place for leaders to learn is on the job and on the line. In order to the company to help leaders learn within the organization, educational facilities must be established inwardly the organization. The company needs to appoint educators that will educate and develop leaders in various countries and places where Tesco is operating. The organization must institute a bodied Education section that will be under the HRM department. Within the incarnate Education, a Business Leadership Development (BLD) must be established. This group will focus on executive development and overall leadership development, and it will also be responsible for all training particularised to leadership. Business Leadership Development should be used to come up with systematic ways to build the capabilities of Tescos business leaders. The emphasis of the BLD process must be to provide development opportunities at key transition points in individuals careers. To accomplish this goal, a curriculum must be designed and must be operate under the following principlesBased on real problems and strategic initiativesLinked to business objectives and company valuesSegmented by customer needsSponsored by CEO and senior executives Comprised of global surfeit and delivered worldwideBased on validated competencies for success2. Leader Sponsorship Another strategy to effectively develop leaders is through sponsorship. Through sponsorship, senior executives in Tesco will sponsor and will actively participate in leadership development. Example of leader sponsorship activities are involvement of senior executives in management conferences and facilitating dialogue sessions after a leadership development program. fourth-year executives can also facilitate panel discussions. Through sponsorship, Tescos successful leaders will be able to share and to instil the characteristics, skills and attributes of effective leaders to the future generation of leaders.3. Leadership Development and Review In order to identify, evaluate, and develop future leaders, Tesco needs to come up with a list of competencies that is needed to become an effective Tesco leader. These competencies can be used as criteria in leadership developm ent. These criteria will also be helpful in providing content for the leadership and management judgment processes, through activities like self-assessment, multi-score feedback, and assessment simulations. They will help identify and qualify external executive development resources.4. Corporate Universities It is important for Tesco to realize that their most important assets are human capital and the know-how that reside in the minds of the employees. With this realization, the company needs to establish a corporate university. A corporate university links employee learning to overall company strategy, and as a result a corporate university will become a connective tissue for the organization.5. Developing Emotional Intelligence among Leaders One important development area which must be focused on is emotional intelligence. Future successful leaders need to recognize and learn to influence the emotions of the people around them. An effective leader must have a high level of Emoti onal Intelligence. Dubrin et al (2006) identifies five factors of emotional intelligence. These are1. Self-awareness the leader of the future must be able to understand his or her emotions and how these affect other people.2. Self-regulation the leader of the future must be able control his emotions and react with appropriate emotion in every given situation.3. Motivation money or status is not the only motivating factor for a successful leader in the future. He finds fulfilment and satisfaction in performing his tasks.4. Empathy the leader of the future responds to the unspoken feelings of others.5. Social skills having effective social skills is important. The leader of the future must build relationships and networks of support. He must build positive relationships with the people around him or her.In summary organisations should consider adopting leadership styles that best fit their aim and objectives, and organisational culture. No best leadership style can be easily devi sed hence what works best in one organisation might be disastrous in another.Management RoleBeardwell and Claydon (2007) argued that the roles of management include the followingPlanning The managers have to set objectives and target, make predictions and in general make plans. It is important for managers to set objective and what they expect in order to know what sort of outcome they are looking to get from employees and what they have to do to achieve such objectives.Organising The managers have to decide what activities employee department or workers should undertake and organise their activities. This can involve delegating authority, co-ordinating the work of others, and establishing communication channels and authority (Beardwell Claydon, 2007).Leading Managers must ensure they provide the required leadership and guidance for their employees by setting good examples (Using themselves as the examples).Controlling It is essential for the managers to control employee activities . This can be done by comparing daily or weekly employee performance with the planned or expected outcomes.Motivating Motivation is an important factor managers could employ in order to increase employee performance, morale and influence them to put their best effort toward work.