David K. Eachus
October 7, 2001
This paper presents the post-mortem of the leadership styles and management practices of a senior level executive working for a mid-sized, privately held manufacturing company experiencing revenue doubling growth and while trying to improve its profitability fourfold. This analysis will examine the leadership styles, management practices, communications methods and behaviors displayed by this individual, and their impact on the business.
The subject of our dissection was hired in the 15th year of this company’s existence to fill the newly created position of Vice President, Administration and Human Resources. This individual was hired by the Executive Vice President, Finance as part of a reorganization and expansion of the senior management staff. The new VP, A&HR reported directly to the President/CEO and was responsible for the administration of the Corporate Headquarters, Human Resources and Public Relations. The individual hired had 17 plus years in various human resource jobs for 3 different employers and was known to the EVP, Finance from a previous job. At the time of the hiring, the company is question was embarking upon a 2-year business plan, which had two simple goals. The mission given to senior management by the Board was to double revenue and quadruple profitability without creative accounting practices. To achieve this, senior management was reorganized and expanded for the first time since the founding of the company. A new President/CEO was brought in from outside, Sales and Marketing was separated, as were Manufacturing and Product Engineering. The plan called for the sales force to grow by 25% and a large portion of the capital budget for the next two years was earmarked for technology enhancements.
Leadership Style The new VP, A&HR found a myriad of tasks requiring attention immediately. Observing how this individual went about these tasks provided ample opportunity to observe their leadership style. Unfortunately, the rest of the senior management team had important tasks of their own and so most of the observations that follow were made in retrospect. The new VP, A&HR quickly demonstrated a High Initiating/Low Consideration leadership style as put forward by the Ohio State Studies (Robbins, p. 316). This individual quickly defined their own role and then redefined roles for subordinates, which changed most job descriptions and created significant overlap in some areas and voids in others. The lack of consideration shown by the new VP, A&HR for relationship, trust and respect of employees began to immediately produce negative feelings among employees both inside and outside of A&HR. Based on the University of Michigan leadership studies (Robbins, p. 316) the new VP, A&HR was a production-oriented leader. The emphasis of all the issued guidance and directives was directly associated with the technical nature of the work or the performance of the various task groups against arbitrary norms. When assessed against Fiedler’s Contingency Model (Robbins, P. 321), the new VP, A&HR would have rated Poor in Leader-Member relations, High in Task Structure, and Strong in Position Power. This set up the possible of moderate performance at best and paved the way for potential great abuses of the authority that the organization entrusted to this individual. In the context of the Leader-Member Exchange Theory (Robbins, p. 323), the formation of the selective in-group began almost immediately and was later observed by one mid-level manager as cronyism at its worse. Subordinate managers who were not part of the in-group were deprived of any decision-making authority over time. Any additional work generated by the company growth was also directed solely at the managers in the out-group.
Managerial Grid In positioning the new VP, A&HR on the Blake and Morton Managerial Grid (Robbins,