Matching leadership style to the situation

Accounting Ahead | Original study resource | accountingahead.com.au

Matching leadership style to the situation

MODULE 1 | 1.7.2 | STUDENT COMPANION

Four types of change

Type How big? How much of the organisation?

Fine-tuning Minor, like continuous improvement Usually part of it

Incremental adjustment Relatively minor The whole organisation

Modular transformation Major One part, such as a division

Corporate transformation Major The whole organisation

Four styles for leading change

Style What it involves When it suits

Collaborative Employees heavily involved in key decisions

about the future and the change

Knowledge is spread throughout the

organisation

Consultative Views sought before change; employees help

set goals in their own areas

Management has a plan but feedback adds

value

Directive Management authority, limited participation Knowledge sits at the centre, or leaders are

changing the culture

Coercive Change forced through, sometimes using

outside parties

A crisis with little time or resource; often

involves job cuts

GLOBAL STRATEGY AND LEADERSHIP | M1 | 1.7.2 | STUDENT COMPANION

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Accounting Ahead | Original study resource | accountingahead.com.au

The intensity of change model

Developmental transitions

Constant, participative improvement

Charismatic transformations

Inspirational, large-scale change

Task-focused transitions

Constant change, directed by management

Turnarounds

Frame-breaking change in a crisis

Collaborative

Consultative

Directive

Coercive

Fine-tuning Incremental adjustment Modular transformation Corporate transformation

Scale of change: small to large

Style of leading

change

Four situational leadership styles

Directing

Specific instructions and

close supervision

New and inexperienced

Coaching

Instructions plus

explanations; suggestions

welcomed

Some skill, shaky

confidence

Supporting

Help with their efforts;

decisions shared

Capable, taking ownership

Delegating

Decisions and problem

solving handed over

Expert and motivated

Authoritarian Collaborative

Judge each person's competence and commitment for the specific task

GLOBAL STRATEGY AND LEADERSHIP | M1 | 1.7.2 | STUDENT COMPANION

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Accounting Ahead | Original study resource | accountingahead.com.au

Leadership across the life cycle

Start-up and growth

Risktaker

Often the founder, whose

vision created the firm

Growth into maturity

Caretaker

Builds systems and steady

performance

Shakeout

Surgeon

Cuts away what has

become a hindrance

Decline

Undertaker

Harvests what is viable and

closes the rest

Real example of a surgeon: Alan Mulally at Ford from 2006 sold Aston Martin, Jaguar, Land Rover and Volvo and focused on one global

Ford brand

Case note: Alan Mulally at Ford

Alan Mulally left Boeing to become Ford's chief executive in September 2006; Ford lost US$12.7 billion that

year. Late in 2006 Ford raised about US$23.5 billion, of which US$18.5 billion was secured against almost all its

assets, including the blue oval logo. Ford then sold Aston Martin (2007), Jaguar and Land Rover (2008) and

Volvo (2010), closed the Mercury brand and focused on one global Ford brand under the 'One Ford' plan. In the

2008-09 crisis it was the only one of the three big US carmakers to avoid bankruptcy and the emergency

government rescue loans its rivals needed, and in 2009 it earned US$2.7 billion: a surgeon's style matched to a

shakeout.

Sources: Ford Motor Company news releases and annual reports, 2006-2011.

Culture and leadership style

Organisational culture covers shared norms, perceptions, stated values and agreement about goals. Across

borders, power distance (how far people accept that power is distributed unequally) affects how much directive

authority employees expect, and in China guanxi, a network of personal connections and trust, makes business

leadership more relationship-oriented than rule-based. Silence in a meeting may not mean agreement.

GLOBAL STRATEGY AND LEADERSHIP | M1 | 1.7.2 | STUDENT COMPANION

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Accounting Ahead | Original study resource | accountingahead.com.au

Practice questions

MODULE 1 | 1.7.2 | TRY THESE BEFORE THE WORKED ANSWERS

Question 1 - Classify each change and choose a style

Situation Type of change, style and strategy

(a) A bank's IT team keeps refining how it tests software; the

know-how sits with its engineers.

(b) An airline that has just lost its most profitable route must

cut costs by 30% within three months to survive.

(c) A university redesigns its entire teaching model across

every faculty over five years, with broad academic input.

(d) A retailer introduces a new standard returns procedure in

every store, designed at head office.

Question 2 - Which situational style suits each person?

Team member Style and why

(a) Zoe joined last week, is eager to learn and has never done

this task.

(b) Ahmed has learned the basics but is getting discouraged

by early mistakes.

(c) Chen is capable but hesitant to make decisions on his

own.

(d) Ruth is an expert who enjoys the task and is highly

motivated.

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Accounting Ahead | Original study resource | accountingahead.com.au

Question 3 - Rothschild's four faces

Leader Which face, and why?

(a) A founder risks her savings to launch an electric ferry

company built on an untested idea.

(b) A new chief executive closes loss-making divisions and

sells a non-core brand during an industry shakeout.

(c) An executive is appointed to wind down a printing business

in terminal decline, selling valuable equipment and closing

sites in an orderly way.

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Accounting Ahead | Original study resource | accountingahead.com.au

Worked answers

MODULE 1 | 1.7.2 | WORKED ANSWERS - ATTEMPT THE QUESTIONS FIRST

Question 1 - Classify each change and choose a style

Situation Answer

(a) Bank IT testing Fine-tuning; collaborative or consultative because the knowledge is spread among the

engineers: a developmental transition

(b) Airline survival Corporate transformation under crisis; directive, even coercive, style: a turnaround

(c) University redesign Corporate transformation with time and widely spread expertise; collaborative or

consultative: a charismatic transformation

(d) Standard returns Incremental adjustment (minor, but organisation-wide); directive because the design

sits at head office: a task-focused transition

Question 2 - Which situational style suits each person?

Team member Answer

(a) Zoe Directing: clear instructions and close support while she learns

(b) Ahmed Coaching: keep giving direction, but explain the reasons and encourage him

(c) Chen Supporting: share decisions and build his confidence to decide alone

(d) Ruth Delegating: hand over decisions and problem solving

Question 3 - Rothschild's four faces

Leader Answer

(a) Electric ferry founder Risktaker: a founder's vision in the start-up stage

(b) Shakeout chief executive Surgeon: cutting parts that have become a hindrance to secure the future

(c) Printing wind-down Undertaker: harvesting what is viable and closing the rest to stop losses

The caretaker, who steers a business from growth into maturity by building systems and steady performance, is

the face not described in these three cases.

GLOBAL STRATEGY AND LEADERSHIP | M1 | 1.7.2 | WORKED ANSWERS

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