Leadership and Organizational Turnaround Management (Essay Sample)

[Leadership and Organizational Turnaround]
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Table of Contents
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Table of Contents  PAGEREF _Toc354000401 \h
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Introduction  PAGEREF _Toc354000402 \h
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Discussion  PAGEREF _Toc354000403 \h
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Stages of a company turnaround strategy  PAGEREF _Toc354000404 \h
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Stage 1: Damage control procedure initiation  PAGEREF _Toc354000405 \h
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Stage 2: An evaluation of the prevailing causes and conditions  PAGEREF _Toc354000406 \h
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Stage 3: Keeping up via short-term tactics  PAGEREF _Toc354000407 \h
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Stage 4: Communication  PAGEREF _Toc354000408 \h
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Stage 5: Development of a long-term strategic plan  PAGEREF _Toc354000409 \h
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Stage 6: Development of a reorganization plan  PAGEREF _Toc354000410 \h
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Organizational implementation of turnaround strategies  PAGEREF _Toc354000411 \h
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A&P chain of supermarkets  PAGEREF _Toc354000412 \h
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Conclusion  PAGEREF _Toc354000413 \h
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References  PAGEREF _Toc354000414 \h
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Introduction
Leadership refers to the way through which an individual would persuade other people to carry out a purpose and direct them in a manner that results in more coherence and cohesion. Leaders tend to achieve this through the application of the leadership proficiency, information exercising their ability to lead and seek new opportunities for a successful future. The person equally, maintains the position given despite opposition and criticism. Several contexts come with leadership and these include the military, culture, political, sports and business aspects (Nanus, 1992). Leaders have an array of qualities and related issues such as the building of trust among the people being led, the communication of a relevant vision in a manner that builds commitment, properly relating to and connecting with people, adequate role modelling and being an inspiration to the people. Leadership also entails inspiring individuals to follow the set vision in line with the set parameters to make it a shared aspect. As an act, it involves a decision aimed at taking a step, or stand, to encourage other people to move with the leader in an effort to transform average individuals to significant and recognizable persons.
There are several reasons that would lead a firm to take the option of having a significant turnaround strategy (Barker III & Duhaime, 1997). These include a failing industry, lost stakeholder support, financial crisis, lagging productivity, internal constraints, deprived business and performance. The primary aim of any turnaround strategy entails the returning of a firm to adequate profitability levels, liquidity, solvency and cash flow. Turn-around strategies are exhibited in terms of components such as management, stability, fixing and funding. In order to attain the relevant objectives, achieve its objectives, the turnaround strategy must reverse or minimize to acceptable levels all the causes of distress, and overcome all the unfavourable industry characteristics via rejuvenation, innovation, revitalization, or adaptation, all of which would best be achieved through adequate leadership.
Basing on this background, this paper will give an insight into the various types of leaderships, which could be utilized during the different stages of company turnaround strategies. An example will be presented to illustrate a successfully implemented turnaround strategies.
Discussion
Stages of a company turnaround strategy
There are several stages with respect to the turnaround strategies of a firm considering that there are equally different strategies to be implemented by different firms, as the needs that bring about the turnaround are equally different (Yadav, 1992).
Stage 1: Damage control procedure initiation
In order to attain a successful turnaround procedure, the control of the flow of cash is a very significant element when it comes to the achievement of success in any turnaround strategy (The Meridian Group, n.d). Transactional leadership will best apply in this facet bent on the leader having to be firm on all the employees regarding the cash flow related issues, and will issue all the instructions regarding this matter, which the employees will have to follow. There is a need to initiate changes in order to avail instant access to the daily cash flow information. Thus, the autocratic leadership comes in handy because an autocratic leader responds in the best way to changes as well as initiates them. On the same note, several other leadership styles come to play since change is involved. Cases in point, charismatic leadership in which the leader tends to be involved in major change initiatives. Another change related style is the transformational leader who is always out to introduce change and ensure the followers take in the change initiatives being implemented (Lussier, 2012). The democratic form of leadership also applies because one needs the qualities of a democratic leader to implement any operational changes, because the democratic leader is best placed when it comes to changes that are to affect or be applied by a majority of the people they lead. The inspired form of leadership is also significant, this is because in as much as change is implemented, the inspired leader always listens to the impact that the changes have on the employees. In this phase, the authorization of any expenditure ought to be consolidated in such a way that very few key persons carry it out and controls with respect to credit authorization and accounts receivable collection have to be established. In addition, all the payments made by vendors have to be approved. These call for the transactional form of leadership because absolute control is of the essence. The autocratic leadership is equally significant because of total power to instruct at will as well as control, authority and the right to make all decisions. Since autocratic leaders tend to distrust their subordinates with respect to their ability, they tend to supervise closely and this is significant in this aspect. On the same note, bureaucratic leadership is applicable in the sense that with bureaucratic leaders, the subordinates always do what is expected of them, the subordinates tend to be very obedient since they believe authority is bestowed upon the leader due to their position in the establishment. Bureaucratic leadership is also applicable because the tasks related to finances, need the proper understanding of certain standards and procedures, which bureaucratic leaders tend to observe strictly. In this phase, any disbursement of finances that have not been authorized has to automatically be stopped. Such measures call for the transactional leaders who tend to give very little or no room for the making suggestions. It also allows for faster decision making which is important in this case. Autocratic leadership is also applicable considering that only one-way of communication is applicable, and these leaders do not consult with subordinates or consider their inputs. Since autocratic leaders tend to get things done through the issuing of punishments and threats, it is easy for immediate orders to be acted upon. Bureaucratic leadership is also applicable because of the inflexibility of such leaders, thus instructions are followed to the latter. Other matters dealt with in this phase include the analysis of all the available means to bring additional cash in to the existing business has to be done, via commencing aggressive collection policies, and the sale of certain assets that the firm may no longer need or use. Immediate rolling of cash flow statements needs to be commenced in order to give the firm a proper guideline in all the relevant workout stages. Matter related to aggressiveness and immediate action, call for transactional and dictatorial types of leadership because there is no time for consultations and people have to act fast (Lussier, 2012).
Stage 2: An evaluation of the prevailing causes and conditions
In this stage, the gathering of information is of the essence. The putting together of all the annual financial statements for the past five years as well as the previous six months is of the essence (The Meridian Group, n.d). The monthly agings of the accounts payables and receivables have to be followed up. The list of inventory has to be up to date. The gathering of information from an array of sources needs group effort. A charismatic leader here comes in handy, this is because this person is better placed in terms of connecting with people and would easily get individuals to carry out such tedious and monotonous tasks because the person also makes the individuals feel needed in the completion of a given task (Lussier, 2012). Since such leaders tend to be very sensitive to the people who would be gathering information, anything that they may require in course of completing this task, will easily e availed. Additionally, this leader is well able to detect the mood of individuals, it is easy to tell the mood of the individuals when they are carrying out this task, and as such be better placed to know which forms of information gathering are more appreciated by the employees and which ones are not. Democratic leadership is also applicable, since information gathering tends to involves several peop...