The current arena of fundamental and technical changes, multifaceted by globalization of markets, omnipresence of Information Technology (IT), changing hierarchical structures of organizational forms and networks, poses a challenge for the leaders. In recent years, businesses have improved their ways of operation. This is being done to face the competitive challenges of global markets, rapid technological developments and the transitional phase of the economy. Leaders in these businesses need to develop new leadership skills and management techniques. A resource-based view of the firm which requires resources and/or capabilities are:
That cannot be perfectly imitated, and
For which no perfect substitute is available.
With increasing demand for competitiveness and effectiveness, today’s employers are interested in `managing diversity’ to get the employees working to their full potential. A conducive working environment is the prime result of the leader’s behavior and it is reflected in the organization’s culture and job satisfaction of the employees of the organization. Economic liberalization and globalization has transformed the Indian economy into a globalized economy, requiring the `cross-cultural’ attitude of leaders. A visionary leader can manage goals that lead to short- and long-term benefits for the organization and encourage the employees to work as a team, focusing on organizational goals.
Leadership is the process of influencing people to work in a cohesive environment and thereby achieve organizational objectives. Successful leaders create a work culture within the organization so that employees can set and achieve individual, team, departmental and organizational goals. Inculcating a positive attitude and ethics in the employees is the need of the hour. Leaders are a focal point to the process of managing human resources with knowledge. Managing knowledge includes three key processes: creating, sharing and exploiting knowledge. Converting knowledge into competitive advantages may lead to understanding leaders and organizations. Transformational leadership could be more effective for exploiting knowledge. Leaders provide motivation, vision, orientation for systems and structures at all levels of the organization.
Increased globalization, technological changes and competition pressurize leaders to find ways to increase productivity in the organization. The role of leaders has changed and it is now focused on the procurement of available resources and developing a conducive work environment.
Leadership Styles
Directive Leadership
Directive leadership is the process of commanding others to do what the leader wishes them to do. Leaders command and direct to achieve assigned goals and at times have to rely on coercive power to get the work done. With a centralized decision making, the followers have no discretion over the tasks to be performed. These leaders keep all information to themselves; are self-centered and power-oriented. They are insensitive to their subordinates’ needs, and are generally ineffective in the long run. This style is based on theory X management style.
Transactional Leadership
Howell and Avolio (1993) defined this as, “leader-follower relationship, based on series of exchanges or bargains between leaders and followers.” In order to get economic and social rewards, the followers obey the wishes of leaders. The main focus of this leadership style is on setting goals, clarifying the link between performance and rewards and providing timely and accurate feedback on tasks to the followers.
Transformational Leadership
This style may also be called as charismatic leadership. These leaders have broader perspective wherein they align the individual’s goals with that of the organization’s broader goals. This leads to development of and growth of the group members, as well as the organization. The other qualities that these leaders possess are high self-esteem, vision and planning, high self-confidence, and higher concern for the employees.
Empowering Leadership
These leaders promote consultative decision making. The leader fosters productive and progressive thinking patterns and habits, which, in turn, promote cooperation, cohesiveness and mutual trust amongst the group members or employees. The empowered employees have independent thinking, self-motivation, self-management and a responsible attitude.
Basic Leadership Traits
Effective planning provides a well-defined path to follow for success. The leader should be perfect in short-term as well as long-term, planning.
Ability to lead, to be ahead of others, to start new things and inventiveness. The leader should introduce new progressive ideas to his followers.
Honesty, truthfulness, veracity, reliability and sincerity makes a leader more effective than the managers. The success of a leader also depends on his image among the followers. A positive image always reinforces the effectiveness.
The energy level of the leader is reflected in group synergy. The leader must be able to charge up his followers.
Looking beyond the present situation, leaders are expected to have an effective foresightedness, which enables them to see the future and strategize the policies accordingly.
The leaders should be able to motivate their followers for accomplishing the task.
It is not only choosing the best amongst the given alternatives, it is also to search for new solutions and that too timely ones. Delayed decisions may not have the same impact.
Human Relation Skills
Leaders cannot exist without followers. To have followers, a team spirit amongst the followers is very important, which can be achieved only through effective human relations skills, like effective communication, convincing power, empathy and problem solving.
Leaders are expected to be trustworthy and this takes time to develop. The leaders can only be considered dependable if they are trusted by the people. More the trust more is the dependability.
Objectivity and Fairness
Leaders deal with a group of people and have to deal with them objectively, so as to strike a balance between the group members. The system should be transparent.
Emotional stability
The best decisions are made with stability in emotions. Biased decisions may lead to negative consequences. Besides, it is important to be emotionally stable to deal with various problems within the group or the organization.
Ambition leads to making efforts towards specific goals. It is ambition that makes the leader think beyond boundaries.
The commitment towards employees and organizational growth is essential for almost all sectors of the industry. The feeling of association develops dedication towards incremental growth.
It is important to remember that the same leadership style and traits may not be effective for all industries or sectors. Thus, one must analyze the essential and desirable leadership traits of each sector to be successful. Each sector requires a different set of leadership skills. The banking and insurance industry is based on two major factors, market conditions and customer relations. Thus, it is essential to have traits related to these skills.

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