The Transformational Leadership Style Business Essay

The Transformational Leadership modal value communicating channel EssayThis assignment describes the increase and transformation process of accede transaction government Public limited (Here Onward STO). STO strived to provide to Maldivian merchandise, products ranging from staples ( worry rice slit and flour), medicine, character reference merchandise, and change construction material, oil and state-of-the-art consumer goods as advantageouslyhead former(a) general trading products. due to sensitive established country and regulations, innovation imported by FDI and service level challenges STO to fundamentally reconsideration their simple eyeage and reformulate their st trampgies. The nation was growing, and so were the nations demands.The brass is established in the year 1964. For four decades STO was known as the market leader. However, it lasted till the sedulousness was opened for contradictory and domestic rivalry in 2005 under sparing and political refor ms in 2001. Hence, STO foreseeing the competitive and political challenges, the organizing aimed a broader transformation towards plump a market lie confederacy.This paper leave cover importantly two sections. Firstly, the paper has gougevass the confederacy background as the understructure of this assignment. Secondly, it has attempted to understand why change is important for organizations to adopt in todays business environment. Therefore, by means of and through highlighting on the external factors such as political, Economical, Social and Technological factors (PEST factors) that ar as drivers of change, has been given importance as the literature of the subject. Consequently, the main part of the paper finding the facts, assessing the findings, discussing and analyzing the situation which allow help in understanding the strengths and weakness of the subject being studied in this assignment was thoroughly evaluated as the primary component of the paper.In additio n, it has given insights into the importance of leading in stupefying changes in force(p)ly and explains the antagonist and challenges faced by STO. Thus, ca use STO to reconsider and reformulate in unhomogeneous business strategies like Leadership, tidy sum engagement and change forethought methods to stick customer fri exterminately and improve its image. This assignment will highlight respective(a) future challenges awaiting STO and recommendation for actions.INTRODUCTIONCompany BackgroundThe beginning of State Trading Organization Plc, (formerly known as (ATA) Athireege maafannu Trading Agency) is a registered organization. The root of State Trading Organization PLC, dates back to (website)1964 when it was opened to finance the get and importation of essential food items pauperismed for the Maldivian community in bulk. instantly STO has sustained this important responsibility to oversee the food security concerns of political sympathies and diversified into legio n(predicate) an otherwise(prenominal) other aras of importance such as heftiness unavoidably of the country which has now become part and parcel of STOs mandate. deep down the framepiece of work that complicates these two atomic number 18as, STO has diversified and is also competitively engaged in trading in other areas including Consumer Electronics, Home appliances, Medicals, Canned foods, Health foods and a range of other high quality products.This has been extend tod by direct procural and distribution as closely as forming joint ventures to effectively spate in areas where STO might ready been at disadvantage had STO not been qualified-bodied to do so, while still maintaining a strong hold with the judicature as the primary trading partner of choice.State Trading Organization plc with its subsidiaries, a joint ventures and associates is a nationwide leader in the business sector. It has significant and focused interests in pet eccentricum, construction materials, el ectronic items, cooking gas, cement, roof sheets products, home appliances, super markets and insurance. The phoner is geographically diverse, with operations and developments in Maldives and Singapore.variegation is the one of the most important strategies in STO. Therefore STO is entering contrary business sector like, Tourism, aviation, oil business, construction, agricultural produce and real soil business.METHOD OF INVESTIGATIONMost of the instruction about the variant strategies utilised by STO to face competitive challenges was acquired through numerous interviews with arguers and employees of STO. Other pieces of information were also gathered through the companys website and local media. The websites and publications of the governments numerous ministries and departments are considered the main sources of information on topics related to the governments policies, regulations and laws. Information regarding trade regulations and policies are interpreted from the Minis try of Economic growings annual reports, as well as from the statistical reports that they periodically publish online. In addition to these sources several pieces of information were also acquired through STOs annual report of 2011 and the Quarterly report of 2012LITERATURE REVIEWThe relaxation method of Maldives economy and trade regulation has direct to market widening , drawing card of new foreign investments in well known companys and competition that has led to reduced prices, latest and innovative services, quality products and better customer care. As is suggested by Bortolotti, Bernanrdo, Juliet DSouza, Marcella Fantini, and DomenicoSiniscalco(2002 cited in SilivioContessi 2004 p.3)1the infrastructure investment fosters market interaction and competition through three channels direct market selection, restructuring and entry.As is the fundament of this paper, how leadership and people engagement transformed and restructured STO to a market oriented firm to confront t he competition from FDI. However, the liberalization was not fully effective due to the certain exclusivities provided to STO such as Government major share. new-fangled changes in political platform and FDI regulation STO need to be able to adapt different leadership style like, autocratic, democratic leadership Style and other shifting circumstances and cope with those changes (Moment, 2007)2. Every organization ask leaders who can change as fast as market conditions do(Newcomb, 2005, p. 34)3. Business needs can change rapidly and employees sprightliness to their leaders to guide them through change. Uncertainty in leaders can lead to a lack of faith by employees. exhaustively leadership is critical to a successful school. Success comes from aiming high with the pass water vision, ethos and communication that good leadership brings. We will act to support high quality school leadership and inspired ambitious school communities.(Ambitious, Excellent Schools Our docket for Act ion, Scottish Executive, 2004, p5)4Research into transformational leadership in organizations has found links to improved employee commitment (Barling,webberKello agency ,1996)5,heightened trust in leadership (Bass B.M.,1990),and stronger connection with the vision (Howell and Shamir,2005)5 and so alignment of effort with the (change) goal (Shamir,House, Arthur,November 1993 ) cited in cited in Sherry Scully 2008)5. Based on the research results it could be concluded transformational leadership may be more(prenominal) appropriate for STO undergoing transformation where motivation of employees and commitment to change comes from their intrinsic motivation. succeeding(a) leaders and employee engagement will need to be conversant in doing business internationally and conceiving strategies on a global basis. Globalization will intensify the requirement that senior leaders deal effectively with a complex couch of constituencies external to the organization. (e.g., responsibility for managing the companys interface with trade, regulatory, political, and media groups on a wide range of issues).Leadership development is rapidly moving to include substantial components involving international markets, world economic trends, and focus on token regions such as the Asia Pacific rim (Cacioppe, 1998)6.Kotler and Heskett (1992 Cited inRezaGharoieAhangar 2009)7 identify successful leaders as those who repeatedly communicate their vision, allow people to challenge these messages and look sharp middle managers to take up the cause and provide leadership themselves, characteristics identical to transformational leadership. Likewise leaders foster an environment for building intellectual, managerial and leadership capabilities. The wholly concept of transformational leadership linked with HPW is a process by which leaders and followers raise one another to a high moral and motivational level Burns (1978 Cited in Reza 2009)7.Through this process senior managers share orga nizations vision to intellectually inspire, stimulate and empower the subordinates. (Bass and Avolio, 1994 cited in Reza 2009)7.4.0 FACTS, FINDINGS semipolitical EnvironmentIn year 1964, Maldives was a very peaceful and fixed country. After 2008, the market has become volatile characterized with higher degree of in finale and complexity due to our political environment and reform movement. On modal(a) new regulations and laws are passed and enacted every month.Along with the democratization process came various legal changes to the economy including the introduction and changes to several laws and regulations, notably, the business profitability tax, Good and service tax, Tourism Tax, Tourism Land Rent, Bank Profit Tax, indebtedness Free Royalty, Foreign Investment Royalty, Fuel Re-Export Royalty and re-export tax forthwith influencing the STO business. The fact was highlighted in the STO Annual discipline (2011 p.3) as a risk.The newly elected president in 2008 resigned half way through his call and claimed he resigned duress. Many believe its a coup. Therefore, our political environment is at very high risk. This volatile and serious political environment is change each and every business of this country.The political situation influenced the business strategies of STO. Hence, most of the decisions were politically driven instead of the business motive.EconomicalGlobal turning point hit badly along with the rising fuel prices. It had adversely unnatural the company in two ways. Firstly, recession has led to fall in income, so consumers are spending less on Home feeler items (like Electronics, kitchen appliance) resulting in decrease sales and increasing storage personify and thereof in the drop in company profitability.The unexpected plunge in exchange rate of Rufiyaa against US Dollar, coupled with the continuing problem of foreign exchange shortages caused major impact on the business executing. This was highlighted in the STO annual report ( 2011 p.7 MDs Message).The depreciation of the Maldivian Currency (Rufiyaa) following the introduction of the exchange rate band in April 2011.Shortage of foreign currency reserve (US Dollar) is touch STOs business. Because STO is importing most of the items from Singapore, Japan, Dubai and chain.Due to the change in government in 2008, changes to the trade policy and the apparatusation of new tax laws and regulation brought many challenges to STO in footing of foreign currency transactions.SocialImage of the companyOver the past few decades STO has been one of most leading and reputed company in Maldives (price and Quality).Due to recent changes in political and economic environment, STO is facing many challenges to maintain its reputation.STO is participated and contributed to a number of social activities that are designed to positively contribute to our socio-economic development and towards protecting our natural environment. These activities are in line with the company pol icy of being an exemplary leader in bodied social responsibility.(annual report 2011p.07)Due to the extensive government intervention on STOs business decisions, STOs reputation and image are affectedAccording to quotidian newspaper (Haveeru daily) STO is pursue in corruption and fraudulent trading in Singapore. This created bad publicity and tainted the image of the company.TechnologySTO understands the importance of developing its technology infrastructure and considers continuous changes in business environment and promotion in technology. In line with this, STO management team decided and implemented the Enterprise Resource Planning (ERP) to improve productivity, reducing operational cost and improving internal control and monitoring. This form provides day-to-day information to misrepresent decisions which will facilitate to transform the future of STO and employee engagement. STO has implemented the human resources module of the ERP system, which will facilitate more ef ficient management of payroll and other supply related matters(Annual reveal 2011 p.07).EFFECTIVELYAn organization cannot run without suitable vision and guidance of a leader. In todays ever-changing world the fiber of leadership is even more essential, to show direction towards change, convince employees and ultimately to set a strong foundation to successfully carrying out change. approach with Political, Economical and Foreign competition, STO underwent recent changes where by its major strategies were rethought strengthening the whole strategic process through integration, bundling, Diversifying and focusing new industries like, Tourism and corporeal estate (Annual Report 2011, p.25) .STOs major shareholder the government as well as shareholders pick up to evolve and transform with the changes to the business environment to progress to a successful future for STO. Hence, the following part gives insight into the topic precisely.Transformational leadership styleDevelopi ng visionAfter these major changes in business environment, STO is moving forward to achieve its vision. STO had a vision to become the most successful and the most efficient parent company (of a diversified group of subsidiaries) in the Maldives by the year 2014. Investing on tourism, real estate and aviation (Annual Report 2011, p.25) would allow STO to achieve its corporative goals. Therefore, it has to be noted that STOs vision is in accordance with one of the cores of transformational leadership.Finding the way deal with this dramatic changesSTOs Board and Management team has magnetized spirit which drives people to believe in leadership and that can influence people about change like how it is embedded into STOs slogan evolving with. Thus, a charismatic leader like the newly appointed Chairman and directors (appointed 2012) has used their personality leadership style to enhance the business by setting clear values and supportive culture for the employees as well as for the company. Due to major changes in political environment and the economy in Maldives, leaders must confront and take bold steps rather than being in the background even after changes in order to set an example for others and to ensure long term success of change political program as the external environment is very uncertain.HUMAN RESOURCE AS STRATEGIC ASSETSTO promotes itself as employees are the most important plus in the organization with HR best practices. To promote HR scheme, implement the human resources module of the ERP system, which will facilitate more efficient management of payroll and other ply related matters. Among these STO has stated its HR strategy as followsSelective hiring , retention and extensive development of employeesSTO promotes itself as an employees soil and this perception by the public has given STO distinctive benefits in terms of better attraction of necessary and new skills, employee retention and engagement making it easy for STO selective hirin g and retention. STO strives to attract and retain a productive and an anxious workforce. The Company ensures its remuneration packages are competitive. In order to motivate staff to attain higher levels of productivity, employees are given an incentive bonus of 3% of the net profit for the year if the company exceeds its annual profit targets(Annual Report 2011, p.27)Recognizing Employees commitmentSTO is able to create commitment among their employees. STO realizes that commitment is ultimately personal. To sleep with employees hard work, shields of appreciation are given to those who serve more than 15 years and best employees (Annual Report 2011, p.27).Training and development of EmployeesOakland, CA January 16, 2012 Bersin Associates, the premier research and consulting firm empowering Human Resource (HR) organizations to drive bottom-line impact, today announce new research that shows spending on employee development rose 9.5 per centum to an average of $800 per learner in 2011, as organizations moved to combat the online skills gap in the labor market. During the year, STO conducted many short-term training programs, and provided charge deployment opportunities to its employees in many different professional are as (Annual Report 2011, p.27).Employees engagementMost of the organizations are facing new challenges due to development of social media such as twitter and face book. Organizations need to have employees engagement strategy to overcome the challenges. Employee engagement plays a vital role in motivating the causeance levels of the workforce. A motivated employee will hear out ways to accomplish a task.Employee engagement illustrates the commitment and strength that employees bring to work and is a key indicator of their involvement and affiliatedness to the organization. Employees who are engaged are more productive, content and more plausibly to be loyal to an organization. When organizations put sound HR practices in place, the y are more likely to discover that employees feel satisfied, safe and will work to their full potential .Therefore STO recognizing, values, support, feeling in different situation like, providing monetary support through staff loan, discounts and awarding long service staff every year.Striving to attract and retain a productive and an intent workforce, STO recreation club (STORC) conducts many sport events to help foster comradeliness and team spirit among staffs.(Annual Report 2011, p.28).Performance managementAccording to the University of California, Berkeley is committed to a performance management system that fosters and rewards excellent performance. Effective performance management aligns the efforts of supervisors and employees with departmental and campus goals, promotes consistency in performance assessment, motivates all employees to perform at their best, and is conducted with fairness and transparency. (Cited in http//hrweb.berkeley.edu/performance-management). STO h as also been taking measures to evaluate and manage the performance of both individual employees and departments through performance auditing on HR and also through a performance evaluation at the end of every financial year.HPW and Employee EngagementSTO is adopting high performance workings practices through SAP ERP system. The system helps to align a complex set of organisational elements including Strategy, vision, Mission, and goal, management practice, organizational structure, work practices and process human resource and other systems such as technology. Continuous high performance work systems have been cited by STO and the company is now transitioning to a high performance working system. This will require the development of a strong communication system and organizational restructuring.CONCLUSIONTransforming whole business environment in Maldives (PEST) factors are affecting STO business. Domestic and international competition STO has managed to retain its market positio n.As new challenges emerge the change process will be an ongoing process to maintain market position. As now STO has completely wooly its remaining exclusivities it will face new challenges from Multinational chain like (ACE hardware) over retaining customers. Excellent HR practices and efforts retain existing employees as well as new.To tackle the future challenges STO is developing its human resource, redesigning organizational structure, using latest technology and innovative software to efficiency and effectiveness of its operation. To achieve organization mission and vision, STO is adopting high performance working practices, increasing employee engagement, freshen up STO pay package and career development opportunities.Furthermore investing eco-friendly products and engaging CSR to transform the future challenges. Therefore STO come to a decision to transfigure its business into different area like, aviation, real estate business and tourism industry to improve its financia l performance. This will attract more investors and shareholders as well as all stakeholders. So this strategy will bring more opportunities to the business as well as public in future.RECOMMENDATIONDynamic and complex business and Political environment STO is facing many challenges as well as opportunities in future. Therefore STO needs to be more proactive to these changes, which can be perceived by the knowledgeable among the corporateEven though STO is government owned company (Major Shareholders), too much of government influence and political motive decision may not be business and profit oriented. It should be fit in terms of politics and profit or business.As STO faces new challenges due to implementing EPR system, lack of trained employees. Therefore STO need to Investing in training programs helps employees develop personally and professionally to adopt this incremental changes in its processes and operation especially the way HR works, good and services are delivered to the end customer for this transformational change alone will not do.STO need to implement more monitoring and control mechanism to employee recruitment, Conflict dissolving agent at workplace.STO need to developed HR Policies and procedures and communicate the values of its organization and provide everyone fair and transparent promotion and rewarding system.9.0BIBLIOGRAPHY1. Sung, Johhny and Ashton, David.High Performance prune Practices linking strategy and skills to performance outcomes. s.l. Department of Trade and Industry, UK, 2005.2. Schuler, A J. Online 2003. Cited 3 November 2011. http//www.schulersolutions.com.3. Recklies, Dagmar. Online 2001. Cited 4 November 2011. http//www.themanager.org.4. Canterucci, Jim. Online 2001. Cited 3 November 2011. http//www.corpchange.com.5. Nickols, Fred.Four Change Management Strategies. s.l. Distance Consulting LLC, 2010.Mike Millmore Philip Lewis Mark saunders, adrian Thornhill Trevor Morrow(2007) strategical Human Resource Management contemporary issuesJon M. Werner and Randy L. Desimone (5th Edition)Human Resources DevelopmentPost GauravAkrani Date 12/27/2009 085200 PM ISTComments (2) Lables Management, contemplate NotesCraig W. Fontaine, Ph.D.(August 2007)NortheasternUniversity College of Business AdministrationA Critical Factor for Organizational intensity and Employee SatisfactionCharlotte RaynerDerekadam-Smith,Managing Leading People (2nd Edition, chapter-9) Recruitment SelectionEmployee-engagementmaximizing-organizational-performancePERSONAL start outThroughout the work for this Assignment, I have learned how organizations operate and the challenges they face. I understood from this work that, regardless of how smooth and successful an organization is, changing and adopting leadership style are always needed. It may be in the target market, management, human resource or technology used by the organisation.For these reasons, if handled carefully with the right tools, change can be smooth and successful .I m confident, that I will be able to apply the techniques that I have learned from this work in all stages of my career.