Case Summary
The case study presents a small accounting firm, LB Co., experiencing rising turnover rates and decreased profits. Kelly was hired as the new controller to address the problem. She is focusing on improving the company’s performance and efficiency. However, some employees are dissatisfied with her approach as she does not communicate with other members of the company.
While her leadership style targets immediate organizational problems, it ignores the needs of employees. As a result, some of them are willing to leave the company due to a lack of motivation and an unhealthy working environment. Kelly should adopt transformational leadership principles, combined with the Three Keys framework, to enhance employee motivation and engagement, ultimately leading to stronger overall performance.
Leadership Analysis
Kelly’s leadership style can be described as autocratic. The key characteristics of this style are a focus on employee performance and overall organizational efficiency, limited leader-member exchange, and a lack of interpersonal communication (Wang et al., 2019). All these traits are exemplified in Kelly’s behavior as she strives to achieve improved performance. However, it does not engage in communication with employees and fails to contribute to the development of interpersonal relationships. Therefore, her leadership style is constrained by organizational goals and performance, while employees are viewed as a means of achieving efficiency.
Kelly’s leadership style elicits strong reactions from employees, both positive and negative. As she employs an autocratic style, she is entirely focused on achieving results and maximizing performance. Pizzolitto et al. (2023) underline that the autocratic leadership style tends to be task-oriented, which boosts performance in stressful environments. The company experiences massive turnover, resulting in increased tension and stress.
Kelly’s style can bring structure to the organization and improve its performance in the short term. Therefore, some employees may react positively to her style as she brings positive organizational change as a leader. At the same time, autocratic leadership has limited interest in employees as individuals (Du et al., 2019). Kelly is new to the company, and employees had no opportunity to build relationships with her. It leads to increased distrust and dissatisfaction with her behavior, which may result in the desire to quit the team.
Recommendations
Kelly should modify her leadership style to maintain a healthy working environment within the organization. Kelly should adopt some principles of transformational leadership that focus on promoting organizational change through employees. Currently, Kelly is focusing on addressing existing problems independently, disregarding the input of the rest of the team, including both managers and employees.
Transformational leadership involves promoting employees’ intrinsic motivation by providing them with a clear vision of goals to achieve (Khan et al., 2020). Kelly should communicate the aims of her activities to employees and encourage them to participate actively in the change process. She should provide both managers and employees with greater opportunities for decision-making. Greater engagement will lead to higher motivation and a greater desire among employees to work collaboratively on addressing problems. Kelly needs to establish professional interpersonal relationships, positioning herself as a valued team member.
Transformational leadership is the most rational choice in the situation. This approach to leadership enables the promotion of change in the compact through a shared vision (Khan et al., 2020). It can help address several organizational issues that are present in the organization.
Firstly, organizational change will help the company improve its performance by implementing more efficient working practices. Additionally, it will lead to better motivation as employees will be included in the change process. As a result, turnover rates may be reduced due to better motivation and engagement. Ultimately, employees will have a higher intrinsic motivation to work collaboratively, as leaders inspire them to address issues and improve overall performance. Therefore, transformational leadership is the best decision that could benefit the company at the moment.
Kelly can effectively combine the principles of transformational leadership with the Three Keys framework to become a successful leader. She can engage employees in their work by fostering a positive work environment, promoting employee involvement, and providing constructive feedback on their activities. It will enable them to feel that their work is meaningful and that they are part of the organization, which can increase their motivation and engagement. Additionally, Kelly needs to provide employees with clear goals, instructions, working tools, and advice. Employees should understand the aims of tasks and be able to complete them efficiently.
Finally, Kelly should consider implementing a reward system that includes praise for success, financial incentives, and public recognition of achievements. It will help maintain motivation and highlight the meaningfulness of the work that employees do. In combination with the inspiration provided by transformational leadership, the principles of the Three Keys should significantly boost motivation.
Kelly focuses on addressing organizational problems that may lead to even higher turnover in the company. She should transform her approach to leadership by prioritizing the motivation and engagement of employees. It will help to boost their performance and create healthy working conditions. It is essential to retain existing employees and provide them with improved working conditions to reduce turnover. It will also lead to improved organizational performance and overall firm efficiency.
References
Du, J., Li, N. N., & Luo, Y. J. (2019). Authoritarian leadership in organizational change and employees’ active reactions: Have-to and willing-to perspectives. Frontiers in Psychology, 10.
Khan, H., Rehmat, M., Butt, T. H., Farooqi, S., & Asim, J. (2020). Impact of transformational leadership on work performance, burnout and social loafing: A mediation model. Future Business Journal, 6.
Pizzolitto, E., Verna, I., & Venditti, M. (2023). Authoritarian leadership styles and performance: A systematic literature review and research agenda. Management Review Quarterly, 73, 841–871.
Wang, Z., Lin, Y., & Liu, S. (2019). Authoritarian leadership and task performance: The effects of leader-member exchange and dependence on leader. Frontiers of Business Research in China, 13.