The paper provides an analysis of two leadership styles and their impact on the company called Consolidated Products. Namely, it compares the approach taken by the former manager Ben with the one applied by its current leader Phil. They have influenced the employees’ attitude, as well as the short-term and long-term performance of the organization. Besides, it suggests a combined concept, which is believed to be more effective in improving financial and operating results existing in Consolidated Products at the moment.
The case opposes two main types of managerial behavior: relationship-oriented and task-oriented. In general, it can be noted that Ben demonstrates a strongly relationship-oriented leadership style. Meanwhile, Phil follows the task-oriented approach. In particular, the case indicates that Ben was supportive in the following ways: he talked to employees every day walking around the plant to discuss their problems, hobbies, and families. The layoffs due to the low season were eliminated as Ben would find other tasks for the company’s staff to retain skilled workers. The manager allowed making no layoffs when some employees could not continue doing well in their current position because of an injury or other health and personal conditions. He provided such workers with a job rotation to other less demanding positions. On the opposite, Phil is said to visit the plant and talk to people when they make mistakes or underperform, according to the standards, only with the purpose to reprimand them. It is indicating a clarifying aspect of the task-oriented behavior. Moreover, the absence of a supporting approach of Phil can be noted in the fact that he insisted on layoffs at low seasons to cut costs.
Ben also clearly demonstrates the developing approach by using continuous training programs for department managers, as well as providing recreation and team-building facilities for all employees. He also recognizes the leadership abilities of supervisors by providing them flexibility in operations. However, the lack of task-oriented elements in this aspect of his leadership style related to planning and monitoring has led to the deterioration of the company’s financial performance. At the same time, Phil effectively establishes a systematic planning process with the requirement to lower managers to develop and introduce strong productivity standards. Moreover, strict monitoring is conducted with the use of specific computer software to check the compliance of all employees with the approved norms. Still, Phil’s approach lacks some elements of recognizing achievements when someone’s work outperforms these standards. Moreover, on the way to cut costs, he excluded all the developing programs and facilities paying virtually no attitude towards relationships with workers.
Thus, it can be outlined that Ben has fully utilized participative leadership. Although there was no union of employees established. They could influence decisions made within the company while talking to him and department managers during informal meetings and training. Additionally, lower-level supervisors are provided full flexibility in their decisions and plans and, thus, directly participate in the organization’s performance and determination of its strategy. Phil’s actions have fully excluded the participation of general employees in a discussion of the business future while managers were provided strict rules and performance standards for their departments with the meetings held to discuss the achievement of goals and not the strategy and plans for the future. It should be also noted that neither Ben nor Phil used an inspirational leadership style, which involves motivating workers for a change in an organization and leading them to achieve a commonly desired goal. This conclusion is derived from the fact that Ben did not plan or implement any innovation within the organization. Meanwhile, Phil considered the motivation of employees unnecessary being sure that other persons could be easily hired if some unsatisfied workers left the company. Still, Phil has introduced important changes to the firm, which had both positive and negative impacts on its performance discussed further along with the comparison of Ben’s approach.
Ben and Phil cardinally differ in terms of their interactions with employees and their attitude towards the workforce value for a firm. Thus, Ben demonstrated an extremely supportive approach while following the relationship-oriented leadership style. It resulted in a very high loyalty of workers to the company. Consequently, Consolidated Products had enjoyed a low turnover of workers during a long period of ten years when it was led by Ben. It is possible to conclude that his subordinates were rather satisfied with their communication with the organization. However, it seems that he was not very demanding in terms of job performance and also did not set achievement goals or shared development plans with them. Therefore, employees had such a positive attitude towards Consolidated Products at the time of Ben’s leadership that they even did not feel the need to establish a union (which is usually made to protect their rights). However, they were not inspired to attain any significant results or change the company for a better future.
As discussed above, Phil follows an opposite strategy in establishing relationships with workers. A new manager is not concerned with the loyalty of the firm’s employees but is rather aiming to attain purely financial goals. Although such an approach can be valuable for owners and top managers with profit-based bonus plans, it would inevitably spoil people’s attitudes. As the case shows, Consolidated Products immediately experienced some outcomes of cutting staff development and recreation programs as well as seasonal layoffs, which involved a much higher turnover among general employees and even the loss of several department managers and valuable skilled professionals. Besides, the intention of people to unionize now clearly indicates the loss of trust in the manager and job safety. It can impose higher labor costs for the firm in the future periods.
Comparing the influence of two managers on the company’s short-term performance one would detect that Phil had reached success in cutting costs and enhancing revenues of Consolidated Products. Main factors allowing him to accomplish it were closing management training programs, refusal of team-building and recreation activities for employees, seasonal layoffs during periods of low demand, and less frequent equipment maintenance measures. Additionally, Phil imposed strict rules for complying with the performance standards with punishments existing for the waste of time or poorer job outcomes. It enhanced the effectiveness and improved the sales of the organization. As a result, the corporation enjoyed a stronger current profit figure. Still, none of these actions could lead it to sustainable development and growth. The loss of experienced personnel (including professional staff and managers) along with the absence of appropriate training and employees’ motivation can destroy any business in the long run perspective. Similarly, while the cut in maintenance costs (due to the lower frequency) will push today’s profits upwards, such a measure could bring the company into notably higher expenses in the future related to capital repairs or the need to replace the entire equipment.
It should be pointed out that Ben’s strategy also could not lead the corporation to success. The history of his ten years of leadership at Consolidated Products revealed that neither in the short run nor in the long-term period the business would increase its value or improve financial outcomes. Being a good place to work for employed people, the firm would not be able to sustain the poor financial performance without some changes imposed. In particular, Ben’s approach needed to introduce the developed strategy, plans, monitoring system, and a set of working standards for department managers and employees. It is especially important for the long-term prospect as the firm has to know where it moves and follows a route with established goals and milestones.
To effectively manage the plant, it is necessary to combine relationship-oriented and task-oriented leadership styles. Consequently, being a new manager of Consolidated Products, one would continue supporting employees to sustain their satisfaction with the job. It is especially important to retain experienced department heads as well as highly skilled professionals. Therefore, the company should have some training and development programs further. Besides, the existence of the fitness center is a sunk cost as this investment had been already made in the past. Currently, it needs only a minor portion of expenses to maintain it. These costs could be transferred to workers in the form of monthly season tickets sold to them or the price being withdrawn directly from the salary. If the price of such tickets is set equal to the total cost per visitor, a fitness center is expected to neither bring profits nor bear costs and can be easily used in the future to enhance employee satisfaction with their jobs.
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At the same time, there is a high need to improve the efficiency of operations and boost revenues from the products’ sales. It is impossible to attain without proper planning and monitoring processes. Thus, a top manager of the plant should elaborate a detailed strategy and budget for the short-term and long-term perspectives. Such a concept should include not only financial but also customer, supplier, and human resources-related goals. It is important also to involve department managers in the strategic planning and budgeting processes and inspire them to find some ways to change the firm for a better future. Imposing standards for employee performance as well as for the departments’ operational results can eliminate wasteful processes and introduce higher efficiency into activities. It occurs especially when the staff is properly motivated, loyal to the firm, and aware of the overall strategic course and objectives.
Additionally, it can be possible to find other ways for cost-cutting measures. For instance, as it has been mentioned in the case, equipment maintenance costs might appear to be excessive. However, before deciding on the optimal frequency, a thorough analysis of the equipment's physical condition, the actual need for repairs and maintenance, technical evaluation, and cost calculation should be performed to avoid the need to replace machines earlier purely due to poor treatment. The latter requires capital investment and would be naturally more expensive for the company. Along with that, other operating costs should be tested for their potential expense-cutting possibilities, including utilities, cleaning, marketing, etc. Also, the top management should consider inventory holding and customer credit policies as high inventory and accounts receivable balances are costly for the organization. Meanwhile, raw materials should be ordered in the optimum quantities to decrease ordering and holding expenses.
Finally, it is necessary to seek ways to avoid seasonality in the business. Idle facilities represent fixed costs for the firm, while the need for seasonal layoffs of personnel spoils its reputation and the attitude of employees. Consequently, the manager might consider finding new markets or introducing new product lines to compensate for the low sales in the current locations or of the existing output.
The case illustrates the importance of balancing relations and task focusing when leading a company. It is impossible to follow a sound sustainable development without inspired managers and skilled employees being loyal to strategic goals while the financial performance should be measured based on exact aims, plans, and budgets. Consequently, supervisors should not sacrifice the long-term development while aiming for the short-term benefits through the death restoration of people’s attitudes and other cost-cutting measures.
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