Introduction
Leadership is one of the most interesting areas of management. Leadership has become a more difficult area due to changes in the external and internal environment of the organizations. The changes in the environment of the organization create challenges for the leaders and mangers, which have to go through changes in the organizational structure and culture (Hooijberg et al, 1977). Further leadership role is no longer constricted to autocratic management of the teams and directional, managers today have to assist the employees. Due to these challenges leadership literature developed transformational leadership based on charisma, leadership vision, and participative management (Bono & Judge, 2004).
Hospitality is a people oriented services industry, with hotel management being further complicated due to high degree of competitiveness and dynamic and changing tourism demands. Daily hotel management practices confirm that hotel management in nature is complex, full of uncertainty, varied, and vibrant (Buble, 1997). Thus, the leadership style adopted should be compatible with the staff and the subordinates as well as the guests in the hotel. This paper is aimed to find a relationship, if any, between the different styles of leadership and their effect on the employees as well as profitability.
What is Literature Review?
A literature review is aimed to appraise the current available database of findings, theories, and models on a particular topic for research. In other words, a literature review is the discussion and analysis of what has been published in a particular topic and the gap in the past researches that has been done.
According to Hart (1998), reviewing is a part of academic development without which research work remains incomplete. The reason for a literature review is to become aware with the various researches done in the area, establishing the loopholes in previous research, and identifying the reason to conduct further research in the area. a good literature review is expected to have a logical flow, with systematic handling and explanation of the earlier research, their assumptions and the methodology used, along with the an analysis of the findings. After this the review will draw the gap in the literature and point out the area where research need to be enhanced or furthered.
The literature review will check for logical flow, usage of proper literature and discussion of it, use of proper terminology, and using relevant references. Thus, as Bell (1997) pointed out that a review should provide to the reader a state of knowledge and of major questions in the subject.
What is the hospitality industry?
Hospitality industry is an integral part of the service industry. According to Baker and Huyton (2001) the hospitality sector makes up approximately twelve percent of the world gross domestic product, employs eight percent of all employees, and accounts for approximately eleven percent of capital investment throughout the world. It is primarily an industry that requires rich human capital.
The industry is a large and complex one and covers many different types of outlets, from the simplest hot dog stand to large luxury hotels. The offerings of this industry are wide and varied with choices in hotels, restaurants, airlines, etc. The hospitality industry provides food, drink, and accommodation to numerous people. The industry is relatively labour intensive, with wage costs at over forty-three per cent of total costs. It is dynamic as customer’s need is the industry’s command. Thus human resource management in such an industry attains priority.
Management Theories
A review of literature on leadership styles can be divided into three schools of thought: (a) “Great Man”, (b) “Trait” theories, and (c) “Transformational” leadership.
Great Man theory leads to the idea that leaders are born and not “made”. So all leaders who show exceptional leadership style shows that leaders are born with their characters which make them a leader. This led to the trait approach which states that leaders grow big due to internal characters which makes them successful. So the idea was to identify these traits in the personality of the people who are being interviewed during the selection process.
Some leaders might have possessed certain traits but the absence of them did not necessarily mean that the person was not a leader. But the trait studies were not conclusive in their findings of the personality characters that make a successful leader. With Douglas McGregor’s publication of The Human Side of Enterprise (1960) the leadership study shifted its focus onto the behavioural theories.
He divided human beings into two contrasting groups. The theory X people who were considered lazy and unwilling to work required authoritarian leadership as these people were incapable to take any decision. Theory Y people are those who were self-motivated and thus required a participative leadership style. These people are capable of providing directions to them and when these are achieved they feel rewarded. These people require self direction, but McGregor argues that even though they are self-motivated they require a leader to guide them and provide direction. Further they require acknowledgement of their achievement to boost their self-esteem and ego. McGregor showed that people with high initiative level were more responsible and have high potential. But Maslow criticised McGregor stating that even Theory Y people require guidance. Today’s managers play a role of mentors and guides and encourage participation from subordinates rather than being an authorities figure.
Fielder (1967) proposed the situational leadership theory which stated that leaders are supposed to lead on the basis of the situational demands and provide solutions to the situations.
Leadership Styles
The present leadership theories which are present in the organisational behaviour literature are that by Douglas McGregor (Theory X Theory Y), Rensis Likert (System 4 management) and Robert Blake and Jane S. Mounton (the Managerial Grid).
Lewin (1939) identified three kinds of leadership styles for decision making, viz. Autocratic style, who is a leader who acts as an autocrats and takes decisions himself (for example Adolf Hitler), democratic leadership style where the leader follows a participative decision making process, and involves the subordinates in the decision making process. Then there is the liessze faire leadership style where the decisions are distributed among all the members of the strata.
The fourth leadership style was called paternalistic. These leaders act as father figures. This style of leadership believes that tasks need to be carefully explained and the decisions agreed with subordinates to achieve a high level of commitment (Mullins 2005).
Transactional leadershipis stressed by a few characteristics by the following characteristics as has been described in Eeden and Cilliers based on the study of Bass and Avolio (Eeden et al, 2008). This leadership style involves a leader who clarifies what need to be done and what need to be done to complete the task. So the follower completes the task as instructed by the leader in order to gain reward and avoidance punishment on non-completion.
In this form of leadership, the stress is laid on rules and regulations, and when failure occurs, followers in consultation with the leader take corrective actions. While in case of transformational leadership style, the leader has idealized influence over the follower who respects, admires and trusts the leader and tries to emulate his/her behaviour. So the leadership values are transgressed into the follower which becomes the main discourse of leadership.
Thus, this leadership style is focused on empowerment of the employees and the leader inspires the follower with his/her enthusiasm, charisma, and vision to achieve specific goals. This form of leadership enables intellectual stimulation to the followers and so innovation and creativity development is encouraged. Follower development becomes a concern of the leader and mentoring is actively encouraged in this form of leadership. Passive leadership style emphasizes the absence of leadership where the leader completely leaves the responsibility on the follower and the followers are self managed.
Organisation culture
Organisational culture can be looked at as a system which is transmitted from more the superiors to new employees. According to Schein (1999) culture in organizations’ develop with the development of the problem solving and situation handling process’ development in an organization.. Thus culture arises out of what has been successful for the organization. Hofstede presented a four dimensional model of culture where he states that culture varies due to the differences in the degree of these dimensions in the culture. The cultural dimensions as discussed by Hofstede are power distance, uncertainty avoidance, masculinity and individualism.
Power distance is one of the first dimensions of national culture. This indicates if the society accepts the unequal distribution of power in organizations. This is reflected, according to Hofstede in the less powerful members of the society and the people with power. Uncertainty avoidance implies the extent to which society is threatened by uncertain or confusing situations and is eager to avoid these situations by providing greater career stability or through more formal rules, not tolerating non-standard ideas and behaviours etc. and societies where uncertainty avoidance is higher are characterized by higher degree of anxiety and a stronger inner desire to work harder.
Individualism is a character of society which is demonstrated by frame of the society – whether it is loosely knit or tight social framework – which demonstrates whether the society is individualist or collectivist in nature. A collectivist society is one where the community and societal bonds are stronger while it is weaker in individualist societies. An individualist society is characterized by a group of people who are expected to take care of their immediate family only while a collectivist society is characterized by in-groups or out-groups wherein it is expected that the in-group will take care of them. Masculinity and femininity is the third dimension of culture as demonstrated by Hofstede.
A masculine culture is characterized by masculine characters like assertiveness, acquisition of money and other materials, non-caring, etc. these values as Hofstede states reside within the cultures (Hofstede, 1980). Given this difference in culture due to variations in the degree of dimensions in the culture, there arises a variety of differences in cultures and so the way people behave and work in different cultures differ. This will further be explained through a discussion of motivation and leadership.
According to Handy (1985) organisational culture can be linked organizational structure. He describes the following types of culture:
- Role Culture: Delegated authorities given in an extremely defined structure.
- Task Culture: Building teams to solve a certain problem.
- Power Culture: Concentration of power in few hands
- People Culture: Individuals are given superiority over organisation.
Psychology
Psychology is the science which studies and explains the nature of human beings. According to Mckenna (2006) the study of psychology provides valuable knowledge and insights that help us to understand the behaviour of people in business organisation and settings. But recently the field has expanded to areas like leadership effectiveness, training, needs and motivational forces, job satisfaction, etc. Mckenna (2006) also cites that the developments of psychological thought, influenced by different traditions, are classified as the psychoanalytical approach, the behaviourist approach, the phenomenological approach and the cognitive approach.
Personality
The total sum of ways in which an individual reacts and interacts with others is termed as its personality. In other words, it is the psychology’s attempt to identify the unique character of individuals.
Some theorists argue that our character is inherited, determined by genetic codes. Other approaches say that personality is shaped by environmental, cultural and social factors.
Myers-Briggs Type Indicator (1962) is an extensively used personality test that taps four characteristics and classifies people into 1 to 16 personality types. The five factor model of trait personality, called the Big Five Model (McRae, 1992) deals with five factors such as extroversion, agreeableness, conscientiousness, emotional stability and openness to experience.
Conflict
Conflict situation arises when one part perceives of negative behaviour or expects such behaviour and which leads to an antagonistic situation. Human resource managers feel conflicts between employees are inevitable. Traditionally it was believed that conflict is harmful and must be avoided. Conflicts can be of two types: functional and dysfunctional. Conflicts can also take the forms of: task conflict, relationship conflict and process conflict.
Motivation
Why do people do their job? This is because something or someone motivates them to do it. There are a large number of theories on human motivation. According to Sigmund Freud humans are prompted to work by unknown forces within themselves which he termed as id. He called human conscience ego which Freud believes tries to control and enforce the unknown forces within humans. And there exists according to Freud a superego which criticizes the human’s acts when it succumbs to the id and ego and is called the superego. According to Freud, superego is the production of early interaction and socialization process, where the human learns from family, society, etc.
Though Freudian theory has been very successful in the field of psychology, it is seldom used in organizational theory. Other researches like David McClelland, Abraham Maslow, Frederick Herzberg, and Victor Vroom. According to Mclelland, who devised the need theory states that humans work because they have an innate need to achieve. He feels that humans work for they have a desire to achieve something, and this desire motivates them to work.
Maslow postulated a hierarchical need theory of humans. He stated that human’s needs are stacked up in hierarchical pyramids. With the basest need related to physiological existence like food, cloth etc. are called physiological needs which is followed by security, social needs and at the top self actualization. Maslow uses McClelland’s theory of achievement but defines it in a broader way. Maslow’s need hierarchy theory postulates that a higher need gets activated if and only if a lower need is satisfied. Maslow postulates that human needs are based on rational desires which are successively stacked in hierarchical pattern.
Herzberg presented two factor theory of motivation which distinguishes between hygiene factors and motivating factors or motivators. Cole (2004) the Hawthorne studies, conducted in the USA about seventy years ago, showed that human motivations tend to reveal what it is that causes and prolongs human behaviour. Most of the early theorists were interested in the drives or needs of people at work.
The motivation starts with the stimulus, such as hunger (physical) or a desire for company (social) giving rise to a response like Maslow’s hierarchy of needs or McGregor’s Theory X and Theory Y. Contemporary theories on motivation are McClelland’s Theory of Needs and Cognitive Evaluation theory. The former focuses on achievement, power, and affiliation as the three important needs to explain motivation. Other theories gaining prominence are: goal setting theory, reinforcement theory, equity theory, and expectancy theory.
Communication and Perception Process
Communication may be defined as the transference and understanding of meaning. There are different factors that can interfere in the communication process, these factors are called noise. It is through feedback that the transmitter perceives whether and how that message has been received and decoded.
This process can be driven in different ways, the most common are verbally or non-verbally. The term verbal means “in words”, so this communication can be either written or spoken. The non-verbally communication accompanies verbal communication, and it is popularly known as “body language”. New communications such as internet, phones and videoconferences have brought the society new issues to the communication process.
Individual perception is a process through which one organizes and interprets their senses in order to attach meaning to their surroundings. Each person perceives the world and what’s around us in different ways. Factors like culture, gender, age, political views amongst many others, highly influence the way of interpreting available information and experience.
There are four types of perceptions in organizations viz. selective perception, halo effect, contrast effects projection, and stereotyping. They are highly useful in employment interviews and performance evaluation process.
Conclusion
In the ever dynamic hospitality industry, it is a necessity to have an effective leadership which can help the organization glide through. In an industry where attrition rate is high, it becomes imperative for management to employ ways and means to motivate the employees and ensure their satisfaction and retain the best. Since human resource is so important to this industry a study into effective leadership styles and their effect on employees and profit is becomes important to the organisation. Moreover, employing the extensively accepted methods of managerial development helps them to manage effectively and efficiently and give them knowledge of internal and external factors around the organisation.
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