The profit size and the rate of an organization are directly dependent on the proper coordination of internal business processes, as well as an adequate understanding of the role in the organizational and functional structure of the company by the staff. The main purpose of organizational consulting is improving the quality of leadership, enhancing the effectiveness of the company, and increasing individual productivity of each employee. There are certain fields covered with an organizational consulting:
- assessment of the management system effectiveness, including planning, accounting, and controlling;
- provision of managerial personnel;
- improvement of HR in the organization;
- development of a corporate philosophy;
- the systems of managers’ internal corporate training;
- new forms of corporate culture;
- modernization of industrial and organizational behavior;
- development of the recommendations aimed at improving the effectiveness of the company’s management;
- implementation of a set of measures for the optimization of the organizational structure, involving the performance of key employees;
- investigation on the distribution of functions among the employees and departments, as well as evaluation of the effectiveness of employee’s engagement and divisions;
- diagnosis of the psychological climate in the team (Sims, 2002).
The operation of any enterprise depends largely on the leadership and management technologies, which the company applies. In order to be an effective manager, it is important to follow the systematic thinking in management issues. Leadership is the ability to influence individuals and groups to encourage them to work for achieving the common goals. There are many tools that can help in influencing others and leading people. The theory of personal leadership asserts that all effective managers and leaders possess a set of personal qualities common for all. Therefore, it is possible to argue that, if these qualities are identified, everyone will be able to raise his/her confidence and, thus, become an effective leader. Some of these traits are the level of knowledge and intelligence, distinguished appearance, initiative, common sense, honesty, creativity, economic and social education, as well as supreme confidence. Leaders are usually distinguished by intelligence, thirst for knowledge, reliability, responsibility, activity, social participation, and socio-economic status. However, the effective leaders employ different personal qualities in different situations. Each organization gathers a unique team of individuals, as well as set of goals and objectives. Each manager is a unique personality with a number of abilities. Therefore, in order to understand how leadership can lead to success or failure of the organizational change management, it is required to discuss the styles of leadership, which has a direct influence on the outcome of the issue. The leadership styles cannot always be attributed to a particular category.
According to the traditional classification system, an autocratic leadership style is extreme and liberal one, which is the other extreme measure. This style is focused either on work or person (Cameron, Quinn, DeGraff, & Thakor, 2006). An autocratic leader is authoritarian in managing people. He/she has the power to impose his/her will on the performers and, if necessary, does not hesitate to resort to this tool. The autocrat deliberately appeals to the needs of the subordinates based on the assumption that they operate on a lower level. Therefore, the image of a leader is rather controversial; employees do not like to work and try to avoid the responsibility whenever it is possible. Another point is that people lack initiative and ambition and try to get rid of responsibility, preferring to be led by someone else. The autocrat also believes that most people demand security. That is why, in order to make people work, it is necessary to use coercion, control, and threat of punishment. Based on these assumptions, the autocrat usually centralizes the powers as much as possible, structures the performance of the subordinates, and almost never gives them the freedom to make decisions. He/she also tightly directs the entire work within his/her jurisdiction and, in order to ensure that work is done, tend to threaten the personnel. When the autocrat avoids a negative coercion, but uses a reward instead of it, he/she gets the title of a benevolent autocrat. Although, this type of managers is still an authoritarian leader despite the fact that the benevolent autocrat shows active concern about the subordinates’ mood and well-being. He/she can allow or encourage the personnel’s participation in the tasks planning. However, the autocrat retains the actual power to make and execute decisions (Daft & Lane, 2008).
A democratic leader, on the other hand, believes that labor is a natural process and, if the conditions are favorable, people not only take over the responsibility but also demand it. If people are interested in the organizational goals, they will use self-government and self-control. Initiation is a function of rewards associated with the achievement of the goals. These leaders also believe that the ability for creative problem solving is common, and intellectual potential of every person is being used only partially. With these assumptions, the democratic leader prefers mechanisms of influence that appeal to the higher-level needs, such as the affiliation need, the need for high-end, autonomy, and self-expression. A true democratic leader avoids imposing his/her will on the subordinates. Organizations, in which the democratic style dominates, are characterized by a high degree of the power decentralization. The subordinates are actively involved in the decision-making process and enjoy a wide margin in the performance of tasks. Usually, when explaining the goals of the organization, the leader allows the subordinates to define their own purposes in accordance with the ones that he/she has formulated. Instead of exercising a tight control over the subordinates during their performance, the leader usually waits until the work is completed to the end to conduct its evaluation (Kippenberger, 2002).
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