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There Are Major Approaches Of Leadership Theory Business Essay

Paper Type: Free Essay Subject: Business
Wordcount: 4127 words Published: 1st Jan 2015

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Virgin was founded in 1970 as a mail-order record business and developed as a private company in music publishing and retaining. Virgin had grown fast, becoming profitable and entering and claiming a significant share of new markets without the traditional trappings of the typical multinational. In 2001 Branson described the virgin group as branded ventures to expand them at the expense of profits. The use of partners provided flexibility and limited risk. Branson and his business development team reviewed about 50 business proposals a week with about four new projects under discussion at any one time.

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Company profile:-

Sir Richard Branson, holding company Virgin Group gets around. The group’s travel-related operations, led by 51%-owned Virgin Atlantic Airways, are among its largest cash generators. The airline flies to about 35 destinations around the world with a fleet of almost 40 aircraft. Virgin Atlantic is complemented by its Australian low-fare cousin, Virgin Blue, which operates a fleet of some 80 aircraft. Virgin Group also runs Virgin Rail and sells tour packages. Besides travel and leisure, the group’s major operating areas include financial services and telecom (Virgin Media).


Leadership culture is defined by the collective action of formal and informal leaders acting together in the help of organizational goals that ultimately marks the difference. When we speak about the leadership it is the both leaders themselves and the relationship among them, the skills and behavior of the leaders are needed to implement the business strategy and create the desired culture. The collective leadership capabilities of the leaders acting together in the groups and across the boundaries to implement strategies. A good leadership strategy takes all of these factors into account. (William and Michael, 2011.)

Generating the effort and commitment to work towards objectives is central to managing any human activity. People use the term ‘effective leader’ to denote someone who brings innovation, moves an activity out of trouble into success, makes a worthwhile difference. They see opportunities to do new things, take initiatives, and inspire people.

“The most effective leaders will be people who use their energies to accomplish desired results. Leadership will focus on action and implementation”. Katz and Kahn (1948).

There is general three areas of skill are necessary for the process of management: technical, human and conceptual

Technical skill:-ability to use knowledge, methods, techniques, and equipment necessary for the performance of specific tasks, acquired from experience, education and training.

Human skills:-ability and judgment in working with and through people. This includes an understanding of motivation and application of effective leadership.

Conceptual skills:-ability to understand the complexities of the overall organization and where one’s own operation fits into the organization. This knowledge permits one to act according to the objectives of the total organization rather than only on the basis of the goals and needs of one’s own immediate group.

There are major approaches of leadership theory:-

Trait theory:-

Trait theory does, however, help us identify some qualities that are helpful when leading others and, together, these emerge as a generalized leadership style. Examples include empathy, assertiveness, good decision-making, and likability. Trait theories argue that leaders share a number of common personality traits and characteristics, and that leadership emerges from these traits. Early trait theories promoted the idea that leadership is an innate, instinctive quality that you either have or don’t have. Thankfully, we’ve moved on from this approach, and we’re learning more about what we can do as individuals to develop leadership qualities within ourselves and others

Behavioral Approach Theory:-

The behavioral approach theory is an extension of the traits theory and is superior in certain respects. The traits theory failed to explain what caused effective leadership. The behavioral approach is based on the study of behavior of a leader. This behavioral theory suggests that a leader do not behave in the same manner under all situations. Similarly, his actions are not identical under all situations which he faces. He adjusts his behavior as per the need of the situation. There is an element of flexibility in his approach and behavior. He studies the situation and adjusts his leadership style accordingly. He adopts different leadership styles to meet the need of different situations.

Contingency theory of leadership:-

Fred Fiedler developed the Contingency Theory of Leadership that determines types of leaders by their characteristics and the situations they find themselves in. The relationship-oriented leader will want to get along with their employees and thus will perform in a way which gains their adoration. This does not take away from the fact that they desire a high level of performance from their employees, but their top priority is to maintain good relationships. The top priority of a task-oriented leader is for their subordinates to complete all tasks and meet all goals. While both styles of leadership can be useful in different contexts, it is important to realize under Fiedler’s Contingency Theory it is next to impossible for a relationship

Situational leadership theories:-

Situational theories of leadership were developed to find good ways of adapting leadership actions to meet the needs of different situations and circumstances. Leadership style here refers to the broad approach adopted by a leader. A leader’s style of leadership is often based on a leader’s own beliefs, personality, experiences, working environment and the situation at the time. Some leaders work within one leadership style. Others are more flexible and can adapt their style of leadership to meet the needs of different situations.

Transactional vs. Transformational leadership theories:-

Transactional leadership theory is based on transactions or exchanges between the leader and the follower. It assumes that the working relationship is one where the leader issues the work, praises or criticises, rewards or punishes. The follower has little responsibility, other than doing as they are required, correctly. All works well if both leader and follower carry out their part in the transactions as expected. This approach is more often seen in low skilled jobs, where procedures are clearly defined or where there is little change. Transformational leadership theory is all about change. Transformational leaders inspire others to follow a vision.

One reason transformation model is a true development is its goal emphasis. The relationship between the leader and other members of the team isn’t of primary importance. Such roles and duties exist because there is an outside something that all wish to reach, and so they take their places and undertake their own necessary tasks. For the first time, those studying leadership began to see it as necessarily being in relation to something greater. Transformational leadership depends on a greater context or meaning, which is something all people desire. Building trust and getting cooperation are far more difficult than giving orders and monitoring process. In transformational leadership, the leader must continue to be an inspiring presence. The leader leads by example and is responsible for motivating others.

Richard Branson has got the style of a transformational and charismatic leader, which most of us only dream of working for or with. Sir Richard’s own opinion on this review of him as a leader, delivered through a two hour long interview of him on his island, sharing a nice bottle of red wine. But that will most probably stay à dream, as will the wish of working for or with a leader as Sir Richard Branson.

Leaders deals with their employees in different ways. Some are strict to the employees and like to be in absolute control on the other side some are more relaxed and allow workers some space to run their own working lives. Whatever approach is predominately used it will be vital to the success of the business. An organization is more or less similar to the Manager or the person running it.

Management styles are also known as ‘leadership styles’, indeed they are similar phrases most of the time.

Different Types of leadership Styles


Feature –

Autocratic Managers normally just gives orders to their staff & takes decision without any discussion or consultation In these situation decisions are taken very quickly because staff are not consulate. Subordinates & other staff are expected to obey the instructions.


As the staff does not have any involvement the works are usually completed on time & decision are taken faster. Sometimes this kind of management style decrease the motivation & also increase the staff turnover because they are not involved in taking any decision & neither feel valued.


Feature –

Unlike in Autocratic leadership style Democratic style employees are involved in taking decision therefore they find themselves valued & they are motivated. They have been given responsibilities to finish the work given to them using their own method. However task should be completed on time. This method also improved the quality of staff because they are motivated & belonging. Also the management gains team commitment especially when changes need to be made.

Impact –

Although this style of leadership is very famous among businesses this method slows down the process of decision making because the staff is involved. The managers gain the team commitment mostly when changes need to be made.

Laissez Faire

Feature –

In Laissez Faire leadership style Managers sets a task & gives staff absolute freedom to complete the task taking own decisions. In this leadership style there is very little or almost no direction from the manager. The manager however does not sit idle! They are there to coach or answer questions, supply information if required.

Impact –

Staff fell motivated & is developed to take responsibility. But on the other hand with very little guidance from the manager staff may feel lost a may not be able to reach the target within set the time frame.

Motivation theory:-

Motivation is the force that makes us behave in a particular way. In a business setting motivation is about ensuring that employees put in the effort required to achieve the objectives set for them.

Motivation theories:-

Over the years a number of leadership theories have been put forward in an attempt to explain the nature of employee motivation and suggest ways in which it may be improved.

Frederick Taylor’s motivation theory:-

Taylor was an American engineer who studied production methods in the steel industry. He concluded that workers main motivation was pay and that they needed close supervision. He believed that complex jobs would be most efficiently performed if broken down into separate operations where little could go wrong. The whole job could then be completed in a series of stages by employees working together in production line.

Elton Mayo: – in the 1920s Mayo conducted a series of experiments at the Hawthorn works of the American Electric Company in Chicago. He was investigating why, despite improved facilities and benefits, there was much dissatisfaction and poor productivity. He concluded that the employees were responding to the attention given to them, rather than to the physical working conditions.

Abraham Maslow’s hierarchy of needs:-

Maslow believed that motivation comes from a desire to satisfy a hierarchy of human needs which show in diagram. We must first of all satisfy our basic needs for survival such as food and shelter. Thereafter we become interested in higher level needs such as job satisfaction and self -fulfillment. People in developing countries, for example will work hard for low wages because there is little alternative. Maslow accepted that a verity of needs will exist at the same time, but suggested that once lower needs are satisfied then higher become the strongest motivators.

Frederick Herzberg’s two factor theory:-

Frederick Herzberg’s two factor theory, produced in the 1950, concerns job design and satisfaction. From numerous interviews with accountants and engineers he concluded that two sets of factors are important in motivation.

Hygiene factors


Reasonable pay

Satisfactory conditions of work

Benefits packages such as sick pay, pension’s schemes, etc.

Without these , people are dissatisfied, but they alone do not lead to job satisfaction or provide motivation



Self -improvement

These provide job satisfaction and motivate people

Douglas McGregor’s theory X and Y:-

In his book, the human side of enterprise, McGregor put forward two extreme views about the way in which organizations manage their employees. He called these theories X and theory Y. Douglas McGregor believed that there were two main ways of managing employees.

The theory x

The theory y

The theory x way, where employees are managed as if they are lazy and need to be punished and threatened if they do not work hard enough.

The theory Y way, where employees are managed as if work is a good activity for them and they will feel rewarded from being with other human beings and doing a good job.

The type of leadership style that is used with employees can make a difference to the level of motivation that they feel. Some employees may work harder if they are heavily supervised and threatened with punishment if they do not work well, but for others this can lead to de-motivation and they will either produce less work or eventually.

McClelland: – David McClelland suggested that there are three main types of motivational need:-

The need for achievement

The need for authority and power

The need for affiliation

Each employee and leader has differencing levels of these needs, and this influence their style and behavior as leader or employees. Look at the following example.

A person who is achievement -motivated wants challenging goals and to be able to reach them. They need to receive feedback on how they are doing and need to feel they are being a success.

A person who is authority and power -motivated needs to have a big influence on others and make an impact. They want and need to lead as his helps them feel better about themselves.

A person who is affiliation -motivated wants friendly relationships and likes being with other people. They are team players and are often popular at work.

As most people possess a mixture of all three sets of characteristics, the style a leader uses in influenced by their dominating need.


Victor vroom developed his expectancy theory of motivation, which states that employees work harder if they believe that the outcome of their efforts will be better. He produced an equation that is used to calculate motivation:-


M= motivation

E = expectancy

I= instrumentality

V = valence

By multiplying these factors together Vroom says it is possible to work out how motivated someone is likely to be. If each variables is high, then motivations is likely to be high , but if one is low , overall motivation will be lowered.

Culture-Culture of an association is the typical way of doing things in the organization. It particularly relates to behavior patterns and relationships. The culture of an organization develops over time. It is created by the people that work for the organization its manager and workforce. Any company’s values and beliefs depend on cultures which are shared across the business. Company organization’s also effect on its strategy and focus on the consumer. A key factors of the new approach has to change the corporate culture and build an atmosphere within the company those values : consumer facility which focus given that an skill that is agreeable and sociable as well as efficient team work, for the reason that this lead to superior support and the contribution of greatest training attractive ownership used for decision as a result to facilitate manager explain problems themselves rather than pass them on to others respecting every one thus everyone feel they be able to contribute having the cut-throat will to succeed thus each person is aim to develop and be successful.

Cultural diversity:-

The phrase ‘Cultural Diversity’ means a group of various societies or peoples with different origins, religions and traditions living, working or interacting together. At the best, it involves treating fairly and reasonably each ethnic group without advancing the specific beliefs or values of any particular group. In other words cultural diversity at business is an idea of hiring people of different groups, different religions and encouraging the entry of working staff from various countries.

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Dimensions of diversity:-

Primary dimensions

Secondary dimensions

Tertiary dimensions








sexual orientation

thinking style

geographic origin

family status

economic status

political orientation

work experience










group norms

This table indicates that diversity has many dimensions. These may intertwine to produce unique syntheses of human profiles, made up of both differences and similarities. The dimensions interact with and influence one another and emerge or are displayed differently contexts, environments and circumstances, making analysis and management complex. Race, for example, may be more dominant than age in a certain social situation, but may be less dominant than education in a work context. Thus the position and dominance of each dimension are not static, but dynamic, making the concept of diversity more complex. The secondary dimensions are more malleable and many of them will change over time. Diversity is not simple, not easy to grasp and not easy to mange. By using socio-demographic traits as independent variables to operationalise diversity, most diversity studies has understood diversity as a given, fixed individual or group essence (Litvin 1997).

Managing cultural diversity:-

Overcoming prejudice and changing entrenched negative attitudes about equality and diversity issues is difficult. Every organization needs to understand the broad nature of the business arguments and ensure actions and initiatives support business goals. They need to move from minimal compliance with legal duties and focus on engaging employees understanding in ways that influence personal behaviors and operational activities regarding the diversity of products and services to meet diverse customer and client needs and preferences. People make the difference at work but everyone is different covers the evolution of the concept, tips for progressive action, case studies and diversity issues in the population. For an organization to gain the full benefits of diversity, a coherent diversity strategy is needed to ensure that all policies and working practices across the business reflect relevant diversity implications. It needs to be supported with a well communicated value system reflecting the importance of diversity. All employees should be trained to understand and engage with this in the way they do their jobs and work with their colleagues. Diversity strategies need to embrace greater flexibility in both people propositions and customer and client service delivery and take account of the inclusive nature of the work- life balance agenda.

Managing diversity also links to ensuring that employee wellbeing is not just a nice to do but an essential element of employee engagement and motivation. Smart employers take account of these issues as key components of their employer brand to support the attraction support and retention of talent. Adler (1997) has identified the following strategies for managing cultural differences.

Ignore cultural differences

Minimize cultural differences

Manage cultural differences


The world keeps changing and providing new kinds of challenges to multinational corporations. This makes it necessary for them to adopt new strategies and new kinds of activities in order to survive and grow in a changing business environment.

Virgin will continue to prosper in its global business by integrating the leadership skills and technical abilities of its executives to enable them to develop innovative ideas on how to cope with the diverse conditions in the global market.

Another recommendation is for the corporation to eliminate the typical Western bias towards poor countries. The principle is to operate in ways that take into account the expectation of people who are affected by the business.

The corporation should also make more efforts to develop native capability. This refers to the recruitment and training of the locals to become global leaders which ultimately will redound to the best interest of the corporation.


With over 25 years in the travel sector and a reputation for delivering unforgettable experiences to millions of Virgin fans, Virgin is a perfect fit for the hotel business. Virgin is a leader in design and hospitality and has transformed businesses ranging from airlines to fitness clubs to super luxury retreats and even space tourism. Customers expect innovation and excellence and our new 4 star hotels will deliver exactly that. Virgin Hotels offers a unique opportunity for property owners and developers to partner with a leading global brand in a highly differentiated hotel proposition that taps into evolving trends in consumer tastes. Virgin hotels aim to re-define the customer journey from pre-arrival to check-out is built on extensive customer research. Hotel valuable target audience includes high income, well-educated, metropolitan business and leisure travellers. We can leverage millions of Virgin flyers to significantly enhance marketing, sales and distribution, and millions of loyalty program members (Virgin America Elevate and Virgin Atlantic Flying Club). In addition, having built large scale, highly profitable businesses, we bring proven operational expertise.


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Mullins L.J., 2007, Management and organizational behaviour, Pearson Education Ltd, GB, PP 166

Niezen Ronald – A world beyond difference Blackwell Publishing – 2004

Peter F.Drucker, the practice of management (New York: Harper &Row, 1954).see also Allen

Richard L.Draft, Management, 3rd ed. (Fort Worth, TX: Dryden Press, 1993), p.493.

Smith, M. & Smith, M. (2002). ‘Globalization’ the encyclopedia of informal education. Retrieved August 27, 2006

James D.Thompson, Mcdonals in action, 1967.

Michael E. Potter, competitive Strategy: techniques for analyzing industries and competitors 1980.

Robert O’Quinn and Kim Cameron, Mcdonald Life Cycles and Shifting Criteria of Effectiveness 1983.

Rahul Jacob, “Corporate Reputations,” 1995, 54-67

William Warned, “lessons of value -Driven Leadership,” 1995.


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