Critical Issues in Business Leadership iMBA Examination Handbook PDF
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This document appears to be a study guide or handbook on business leadership, suitable for an iMBA program. It covers topics like leadership styles, stakeholder engagement, and organizational ethics. It is not a past exam paper, but rather a collection of theoretical information.
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BUSINESS LEADERSHIP Intregrated Master of BusinessAdministration (iMBA) Degree TABLE OF CONTENTS Preface...................................................................................................................................................... 2 Busi...
BUSINESS LEADERSHIP Intregrated Master of BusinessAdministration (iMBA) Degree TABLE OF CONTENTS Preface...................................................................................................................................................... 2 Business Leadership and Skills................................................................................................................. 5 Introduction to Business Leadership..................................................................................................... 5 Defining Business Leadership................................................................................................................... 5 Leadership: Modern Perspective........................................................................................................... 5 Management Vs Leadership..................................................................................................................... 6 Leadership Styles...................................................................................................................................... 9 Conceptions of Leadership.................................................................................................................... 9 Other Leadership Styles........................................................................................................................11 The Four Core Theory Groups of Leadership.........................................................................................12 Approaches to Leadership.......................................................................................................................20 Leadership Skills......................................................................................................................................23 Leadership: Self Analysis.........................................................................................................................26 Pervasive Issues in Business Leadership.................................................................................................30 Leadership: Integration and Analysis......................................................................................................33 Sustainability & Ethics..............................................................................................................................35 Stakeholder Engagement.........................................................................................................................38 Stakeholder Relations Management....................................................................................................41 Stakeholder Participation.....................................................................................................................41 Stakeholder Engagement Process Model.............................................................................................41 Environmental Management Systems..................................................................................................42 Reporting and Disclosure........................................................................................................................46 Introduction to Reporting and Disclosure............................................................................................46 Life Cycle Analysis................................................................................................................................46 Organisational Ethics..............................................................................................................................48 Managing Ethics in the workplace......................................................................................................48 Developing Ethics in the workplace....................................................................................................49 Developing a Code of Conduct............................................................................................................50 Risk and Security in Organisations.........................................................................................................52 Steps to Risk Assessment....................................................................................................................53 Entrepreneurship...................................................................................................................................58 Introduction to Entrepreneurship.......................................................................................................58 Functions of an Entrepreneur................................................................................................................58 Classification according to type of Business.......................................................................................59 Classification according to the Use of Technology.............................................................................60 Classification according to Motivation...............................................................................................61 Classification according to Growth.....................................................................................................61 Classification according to stages of development............................................................................62 Introduction to Enterprise.....................................................................................................................63 Social Enterprise.................................................................................................................................63 The Social Enterprise Business Model...............................................................................................65 The Fundamental Models of Social Enterprise......................................................................................66 Introduction to Globalisation................................................................................................................73 Reasons behind Globalisation...........................................................................................................73 Main features of Globalisation..............................................................................................................74 Globalisation Theories...........................................................................................................................78 World Systems Theory.......................................................................................................................78 Theory of Transnationality and Transnationalism.............................................................................79 Globalisation and the International Agenda.........................................................................................79 Advantages of Globalisation..............................................................................................................82 Disadvantages of Globalisation.........................................................................................................82 Globalisation Strategies adopted by organisations...........................................................................83 Organisational Culture...........................................................................................................................86 Introduction to Organisational Culture.................................................................................................86 Dimensions of Organisational Culture...............................................................................................89 Models of Organisational Culture..........................................................................................................91 Diversity and Organisational Culture.....................................................................................................96 Inclusion & Diversity..............................................................................................................................98 Benefits of Diversity in the Workplace..............................................................................................98 Challenges of Diversity in the Workplace..........................................................................................99 Inclusion.............................................................................................................................................99 Benefits of Inclusion in the Workplace..............................................................................................99 Disadvantages of Inclusion in the Workplace..................................................................................100 Dealing with Exclusion.....................................................................................................................101 Power and its Consequences...............................................................................................................102 Bases of Power.....................................................................................................................................102 Acquiring Power needed for Leadership.........................................................................................110 Business Leadership and Skills Leadership is the most significant element that makes everything works flawlessly; without leadership all the other business resources become ineffective. Effective leaders are aware of the concerns of their employees and are pioneering developments in leadership. They work hard to create more effective work environments. Introduction to Business Leadership There are many definitions to Leadership, below are a few popular definitions: Leaders are people who do the right thing; managers are people who do things right.– Professor Warren G. Bennis Leadership is the art of getting someone else to do something you want done because he wants to do it.– Dwight D. Eisenhower “Leadership and management are two distinctive and complementary systems of action. Each has its own function and characteristic activities. Both are necessary for success in an increasingly complex and volatile business environment…strong leadership with weak management is no better, and is sometimes actually worse, than the reverse. The real challenge is to combine strong leadership and strong management and use each to balance the other.” John Kotter Defining Business Leadership An Effective Leader is a person who has the capability to: 1. Create an inspiring vision of the future 2. Motivate and inspire people to engage with the vision 3. Monitor delivery of the vision 4. Provides guidance and builds a team so they are more effective at achieving the vision Leadership: Modern Perspective The more modern view of leadership states that it has a much wider role which includes the characteristics below: Inspiration Creating vision Building effective teams There are 2 main reasons for leadership to become significant in the modern business arena: 1. Changing Organisational Structures Flatter structures require greater delegation, greater use of teamwork + focus on quality assurance, coaching, support & empowerment 2. Rapid Environmental Change Change is a constant feature of business life, the soft skills of leadership & management are increasingly important Management Vs Leadership Management is a JOB while Leadership is a SKILL This could be considered as the main difference between the two concepts of Leadership and Managers Not all Managers are Leaders BUT all Leaders are Managers Following is a list of characteristics that gives a better idea of the differences between leadership and Management: Management Produces Order and Consistency Leadership Produces Change & Movement Planning and budgeting Establishing direction Establishing agendas Creating a vision Setting timetables Clarifying the ‘big picture’ Allocating resources Setting strategies Organising and staffing Aligning people Provide structure Communicating goals Making job placements Seeking commitment Establishing rules and procedures Building teams and coalitions Controlling and problem solving Motivating and inspiring Developing incentives Inspiring and energising Generating creative solutions Empowering subordinates Taking corrective action Satisfying unmet needs 5 Example Leadership & Management according to Kotter Source: Activity 6 Q What is the modern perspective on Leadership and Management? A Managers have Subordinates By definition, managers have subordinates - unless their title is honorary and given as a mark of seniority, in which case the title is a misnomer and their power over others is other than formal authority. Authoritarian, transactional style Managers have a position of authority vested in them by the company, and their subordinates work for them and largely do as they are told. Management 7 style is transactional, in that the manager tells the subordinate what to do, and the subordinate does this not because they are a blind robot, but because they have been promised a reward (at minimum their salary) for doing so Work Focus Managers are paid to get things done (they are subordinates too), often within tight constraints of time and money. They thus naturally pass on this work focus to their subordinates. Seek Comfort An interesting research finding about managers is that they tend to come from stable home backgrounds and lead relatively normal and comfortable lives. This leads them to be relatively risk-averse and they will seek to avoid conflict where possible. In terms of people, they generally like to run a 'happy ship'. Leaders have Followers Leaders do not have subordinates - at least not when they are leading. Many organisational leaders do have subordinates, but only because they are also managers. But when they want to lead, they have to give up formal authoritarian control, because to lead is to have followers, and following is always a voluntary activity. Charismatic, transformational style Telling people what to do does not inspire them to follow you. You have to appeal to them, showing how following you will lead them to their hearts' desire. They must want to follow you enough to stop what they are doing and perhaps walk into danger and situations that they would not normally consider risking. Leaders with a stronger charisma find it easier to attract people to their cause. As a part of their persuasion they typically promise transformational benefits, such that their followers will not just receive extrinsic rewards but will somehow become better people. People Focus Although many leaders have a charismatic style to some extent, this does not require a loud personality. They are always good with people, and quiet styles that give credit to others (and takes blame on themselves) are very effective at creating the loyalty that great leaders engender. Although leaders are good with people, this does not mean they are friendly with them. In order to keep the mystique of leadership, they often retain a degree of separation and aloofness. 8 This does not mean that leaders do not pay attention to tasks - in fact they are often very achievement-focused. What they do realise, however, is the importance of enthusing others to work towards their vision. Seek risk Leaders appeared as risk-seeking, although they are not blind thrill-seekers. When pursuing their vision, they consider it natural to encounter problems and hurdles that must be overcome along the way. They are thus comfortable with risk and will see routes that others avoid as potential opportunities for advantage and will happily break rules in order to get things done. A surprising number of these leaders had some form of handicap in their lives which they had to overcome. Some had traumatic childhoods, some had problems such as dyslexia, others were shorter than average. This perhaps taught them the independence of mind that is needed to go out on a limb and not worry about what others are thinking about you. Leadership Styles Conceptions of Leadership Exercising Power This is asserting power over someone which is an end result and displays one’s position as a leader. Gaining and exercising the privileges of high status This is all about getting to the top and getting recognised at the highest status. Being the Boss Leadership is providing guidance and overseeing the work of the organisation and also rewarding or punishing as appropriate. 9 Task Orientation Leadership is getting the job done - that's all that matters. Taking care of people Leadership is looking after the followers and ensuring their needs are met. Empowerment Leadership is assisting the followers to gain power and help them to become leaders Providing Moral Leadership A leader who portrays him/herself as a moral leader creates expectations, becomes an inspiration to others and pulls them up to their level. Providing and working towards a vision Leadership is the ability to envision a goal, and to motivate others to work with you toward that goal. Example Tim Cook - Apple Steve Jobs is a hard act to follow, but thus far, Tim Cook is doing a tremendous job. Rather than attempt to match the consumer-facing innovations Steve Jobs had been known for, Tim Cook is forging into the future with his own new advances, such as Apple’s newest innovative inventory management techniques. 10 Activity Q What are the leadership theories introduced by Kurt Lewin? A Autocratic Leaders Democratic Leaders Lasissez -faire Autocratic Leadership In an autocratic leadership style, the person in charge has total authority and control over decision making. By virtue of their position and job responsibilities, they not only control the efforts of the team, but monitor them for completion –often under close scrutiny. 11 Democratic Leadership The democratic leadership style is a very open and collegial style of running a team. Ideas move freely amongst the group and are discussed openly. Everyone is given a seat at the table, and discussion is relatively free-flowing. The democratic leadership style means facilitating the conversation, encouraging people to share their ideas, and then synthesising all the available information into the best possible decision. The democratic leader must also be able to communicate that decision back to the group to bring unity before the plan is chosen. Laissez-Faire Laissez-faire leadership, also known as delegative leadership, is a type of leadership style in which leaders are hands-off and allow group members to make the decisions. Researchers have found that this is generally the leadership style that leads to the lowest productivity among group members. Other Leadership Styles Managerial Leadership Managerial leaders view themselves as managers and are focused more on running the organisation Depending on the nature and stability of the organisation, the main focus would be on funding. Collaborative Leader A collaborative leader tries to involve everyone in the organisation in leadership. This leader is truly first among equals, and may initiate discussion, pinpoint problems or issues that need to be addressed, and keep track of the organisation as a whole, rather than of one particular job. Decisions are made through a collaborative process of discussion, and some form of either majority or consensus agreement. Toward that end, a collaborative leader tries to foster trust and teamwork among the staff as a whole. 12 The Four Core Theory Groups of Leadership Behavioural Trait Theories Theories Transactional Contingency Theories Theories Trait Theories The trait leadership theory believes that people are either born or are made with certain qualities that will make them excel in leadership roles. That is, certain qualities such as intelligence, sense of responsibility, creativity and other values puts anyone in the shoes of a good leader. Trait theory was based on the Great Man Theory which assumes that leaders are born and not made. Trait theory is based on the assumption that leader’s personality traits are the basis for leadership success. Behavioural Theories Focus on how leaders behave. Eg: whether the leader dictates what needs to be done or whether he is collaborative. Behavioural theories divide leaders into two sections: 1. Task Oriented 2. People Oriented The behavioural theories under this type are: The Managerial Grid Model 13 Role Theory The Managerial Grid Model The managerial grid is based on two behavioural dimensions: Concern for People – This is the degree to which a leader considers the needs of team members, their interests, and areas of personal development when deciding how best to accomplish a task. Concern for Results – This is the degree to which a leader emphasises concrete objectives, organisational efficiency and high productivity when deciding how best to accomplish atask. Leadership Styles Associated with the Managerial Grid The Indifferent or Impoverished These leaders have minimal concern for people and production. Their priority is to fly under the radar while they are content to seek solutions that won't bring any negative focus to themselves or their department. Preserving their employment, position as well as their seniority, is what drives their elusive and evading behaviours. In short, indifferent leaders are ineffective and are sorely lacking in any of the traits that can be attributed to successful and effective leaders. Impact on employees: Employees have a high degree of dissatisfaction No harmony within the group High turnover Impact on organisation: Inefficient operation 14 The Country Club or Accommodating These leaders will go above and beyond to ensure that the needs and desires of his employees are met. These leaders are making the assumption that their staff will yield maximum results as they are likely to be self-motivated when they are lead in such an environment. These leaders will have behaviours that will yield and comply with the needs of their staff. The productivity of the group however, can suffer from lack of attention to tasks. Impact on employees: Employees are happy Good team harmony Impact on organisation: Low productivity The Status Quo or Middle-of-the-Road These leaders balance out the needs of their staff with those of the organisation, while not adequately achieving either. These leaders will balance and compromise their decisions, often endorsing the most popular one. They dedicate minimal efforts towards facilitating the achievements of their staff or the production results in average or below average levels. Impact on employees: Employees are not really discontent nor are they happy Good harmony within the group Impact on organisation: Average performance The Dictatorial or Produce, Perish or Control Similar to autocratic leader These leaders focus all of their attention on production-related matters and very little towards the needs of their employees. These leaders will direct and dominate while holding the belief that efficiency gains can only be achieved through rigid disciplines especially those that don't require human interaction. Employees are considered expendable resources. Productivity is usually short lived as high employee attrition is unavoidable. The dictatorial style is inspired by the McGregor X theory. Impact on employees: Employees experience a high level of dissatisfaction High level of conflict within the group Impact on organisation: High employee turnover Peak performance is short lived The Sound or Team According to Dr. Robert R. Blake and Dr. Jane Srygley Mouton, the sound leader is the most effective leadership style. These leaders will contribute and are committed, can motivate and are motivated while holding the belief that trust, respect, commitment and employee empowerment are essential for fostering a team environment where team members are motivated, thus resulting in maximum employee satisfaction as well as the most efficient productivity. This sound leadership style is also inspired by the McGregor Y theory. 15 Impact on employees: Employees are forming a highly cohesive team Employees are satisfied Employees are motivated and work as a team Impact on organisation: Low employee turnover Attracts highly skills employees Efficient organisation Later additions: The Opportunistic Style or OPP (Any of the 5 Positions) These leaders, as the name suggests will seek any situation that will be of benefit to themselves. They will adopt any style that will increase the likelihood of reaching their objective. They will exploit and manipulate in order to persuade others. Any means is acceptable for securing personal benefits; gaining support is only a secondary concern. These leaders are a prime example of "The end justifies the means." The Paternalistic Style or PAT: Migrates from (1, 9) to (9, 1) These leaders will guide their employees and define initiatives for others and themselves. They will praise and reward employees for good performance. They will, however, discourage any thinking that is contrary to their own. The Role Theory Assumptions: People define roles for themselves and others based on social learning and reading. People form expectations about the roles that they and others will play. People subtly encourage others to act within the role expectations they have for them People will act within the roles they adopt Role theory is structural functionalist in that it seeks to explain human behaviour by looking at what social function is fulfilled by holding a given role. Role theory suggests that a substantial proportion of observable, day-to-day behaviour is simply people carrying out roles and negotiating which role to prioritise. Once you understand someone's role and which of their many roles they are prioritising, you can predict how they are going to behave. 16 Contingency theories Contingency theories are a class of behavioural theory that contends that there is no one best way of leading and that a leadership style that is effective in some situations may not be successful in others. An effect of this is that leaders who are very effective at one place and time may become unsuccessful either when transplanted to another situation or when the factors around them change. This helps to explain how some leaders who seem for a while to have the 'Midas touch' suddenly appear to go off the boil and make very unsuccessful decisions. Situational Theories Situational Leadership Theory is the short form for "Hersey-Blanchard Situational Leadership Theory" and draws major views from contingency thinking. As the name implies, leadership depends upon each individual situation, and no single leadership style can be considered the best. For Hershey and Blanchard, tasks are different, and each type of task requires a different leadership style. A good leader will be able to adapt her or his leadership to the goals or objectives to be accomplished. Goal setting, capacity to assume responsibility, education, and experience are main factors that make a leader successful. Not only is the leadership style important for a successful leader-led situation but the ability or maturity of those being led is a critical factor, as well. The Hersey-Blanchard Situational Leadership Theory has two pillars: leadership style and the maturity level of those being led. To Hersey and Blanchard, their leadership styles stem from four basic behaviours, designated with a letter-number combination: Telling 17 o Selling S-3 Participating S-4 Delegating. Four maturity levels of the group are posited by Hersey and Blanchard with letter designations: M-1: basic incompetence or unwillingness in doing the task M-2: inability to do the task but willing to do so M-3: competent to do the task but do not think they can M-4: the group is ready, willing, and able to do the task. Each type of task may involve a different maturity level, so a person with an overall maturity level of M3 might be only an M-1 with respect to specific work. According to Hersey, ability level and willingness to do work can be cultivated by a good leader by raising the level of expectations. Blanchard overlays four permutations of competency-commitment, again, with a letter designation: D1 - Low competence and low commitment D2 - Low competence and high commitment D3 - High competence and low/variable commitment D4 - High competence and high commitment Example Famous Situational Leader General George Patton, one of the high-ranked leaders of the American military utilised the situational leadership style. He wrote several papers on war strategy and tactics as a guide for his army. As a famous situational leader, his philosophy to win the war was focused on analysing the situation. The result of the situational analysis became the foundation in planning the course of action. He believed that it was necessary to change plans to fit the unexpected situation. Observing the situational leadership style is an expected role of Presidents. One specific example is former President George Bush's response and decisions following the suicide bombing attacks at the World Trade Center, Pentagon, and the unsuccessful target in Washington D.C. on September 11, 2001 marked by 9-11 Tragedy. Situational leadership is also practiced by surgeons in the operating room especially during emergency and critical operations. A surgeon leading the operating room team is an expert in surgeries, but when an emergency situation calls or in between the operation complications arise, a surgeon has to decide instantly according to the patient's condition. The best value of a situational leader is his ability to adjust according to what is happening. Activity Q Briefly explain the 4 quadrants in the situational leadership theory providing examples 18 Telling and Directing A There are four leadership behaviours needed from a leader under the situational leadership method. Examples of situational leadership can be based on these leadership behaviours. One is telling and directing, wherein the leader defines the tasks of his subordinates and closely supervises them. This is particularly true for inexperienced or first-time employees who need to be closely supervised by an experienced leader. This leadership style is particularly effective for subordinates who lack the competence but are committed to achieving his or her roles. Firsttime employees in particular need to be told and directed by their supervisors for them to learn the rules of their trade. Selling and Coaching In this leadership behaviour, a leader still defines and assigns roles and tasks but he or she is more receptive in getting ideas and suggestions from subordinates. The leader still has the prerogative in making decisions, but in this set-up the communication process is no longer one-sided. This type of leadership style is more suited for less experienced subordinates who still need guidance and supervision by their supervisors. This leadership style also helps in developing subordinates who may have the experience yet are still lacking self-esteem in the performance of their work. Under this set-up, leaders may also follow closely the output of their subordinates and give them encouraging remarks in order for them to develop their selfconfidence. Participating and Supporting The third in the list of examples of situational leadership is participating and supporting. Under this set-up, the supervisor gives much control and minimal supervision to subordinates. The supervisor gives out day-to-day tasks and instructions on the processes required to achieve a certain task, but the subordinate has enough control or freedom on how to accomplish the said task. The set-up is best used when dealing with experienced subordinates who, for one reason or another, lack self-esteem and motivation. An example would be a junior account executive that needs support and counsel after being assigned to a new account. Delegating The final example of a situational leadership method is delegation. In this set-up the supervisor still is involved in the decision making process but the delegation of tasks and processes is fully given to the subordinate. This style is most suited to experienced subordinates who have the competence to set their own processes required in accomplishing certain goals. For instance, a 10- year creative writer can be depended upon to formulate his own script based on the general directions or ideas formulated by his or her supervisor. While the writer can decide on how to go about the script he is still bound by creative directions set by his supervisor. 19 Example Theories of Contingency and Examples Contingency theory of leadership In the contingency theory of leadership, the success of the leader is a function of various contingencies in the form of subordinate, task, and/or group variables. The effectiveness of a given pattern of leader behaviour is contingent upon the demands imposed by the situation. These theories stress using different styles of leadership appropriate to the needs created by different organisational situations. No single contingency theory has been postulated. Some of the theories are: ·Fiedler’s contingency theory: Fiedler’s theory is the earliest and most extensively researched. Fiedler’s approach departs from trait and behavioural models by asserting that group performance is contingent on the leader’s psychological orientation and on three contextual variables: group atmosphere, task structure, and leader’s power position. Contingency theory of decision making ·Vroom and Yetton’s decision participation contingency theory or the Normative decision theory. According to this model, the effectiveness of a decision procedure depends upon a number of aspects of the situation: the importance of the decision quality and acceptance; the amount of relevant information possessed by the leader and subordinates; the likelihood that subordinates will accept an autocratic decision or cooperate in trying to make a good decision if allowed to participate; the amount of disagreement among subordinates with respect to their preferred alternatives. Contingency rules theory Smith’s contingency rules theory is an example of a rules approach to persuasion. Smith utilises the idea of cognitive schemas, expectations about the attributes that a given person or policy will have or expectancies about the consequences of behaving in a particular manner. These schemata function as contingency rules that both shape the way something is viewed and structure behaviour. Smith suggests that rules and schemata explain persuasion better than the traditional concept of attitude. According to Smith’s contingency rules theory, rules are used to create responses to persuasive messages. Self-evaluative rules are associated with our self-concept and our image. Adaptive rules are those that will apply effectively in a particular situation – the rules most likely to generate a positive outcome. Behavioural contingency rules are contextual. In some situations, certain consequences are considered and certain rules are activated which guide behaviour. In other situations, other rules are activated. External threats and rewards are meaningful only if they apply to one’s personal goals. Example: In the event that there was a blackout during your shift at work, there would be no room for situational leadership being that everyone would be responding the same, displaying feelings of panic. This issue would seek the direct leadership style that is administered from the Contingency Theory. 20 Activity Q Explain The Transactional Theory of Leadership This style starts with the idea that team members agree to obey their leader when they A accept a job. The "transaction" usually involves the organisation paying team members in return for their effort and compliance on a short-term task. The leader has a right to "punish" team members if their work doesn't meet an appropriate standard. Transactional leadership is present in many business leadership situations, and it does offer some benefits. For example, it clarifies everyone's roles and responsibilities. And, because transactional leadership judges team members on performance, people who are ambitious or who are motivated by external rewards – including compensation – often thrive. The downside of this style is that, on its own, it can be chilling and amoral, and it can lead to high staff turnover. It also has serious limitations for knowledge-based or creative work. As a result, team members can often do little to improve their job satisfaction. Approaches to Leadership These are basically the most common approaches to Leadership: Transformational Charismatic Authentic ervant Dynamical Adaptive Strategic Transformational Leadership Leadership expert James McGregor Burns introduced the concept of transformational leadership in his 1978 book, "Leadership." He defined transformational leadership as a process where "leaders and their followers raise one another to higher levels of morality and motivation." Bernard M. Bass later developed the concept of transformational leadership further. According to his 1985 book, "Leadership and Performance beyond Expectations," this kind of leader: Is a model of integrity and fairness. 21 Sets clear goals. Has high expectations. Encourages others. Provides support and recognition. Stirs the emotions of people. Gets people to look beyond their self-interest. Inspires people to reach for the improbable. Charismatic Leadership Charismatic leadership resembles transformational leadership: both types of leaders inspire and motivate their team members. The difference lies in their intent. Transformational leaders want to transform their teams and organisations, while leaders who rely on charisma often focus on themselves and their own ambitions and they may not want to change anything. Charismatic leaders might believe that they can do no wrong, even when others warn them about the path that they're on. This feeling of invincibility can severely damage a team or an organisation, as was shown in the 2008 financial crisis. Authentic Leadership Authentic leadership brings together the concept of authenticity with positive psychology. Luthans and Avolio (2003) defined authentic leadership as "a process that draws from both positive psychological capacities and a highly developed organisational context, which results in both greater self-awareness and self-regulated positive behaviours on the part of leaders and associates, fostering positive self- development" (p. 243). This definition and the theory of authentic leadership were developed to define four components (Walumbwa et al., 2008). The Four Components of Authentic Leadership: Self-awareness: an understanding of one's strengths and weaknesses and the multi-faceted nature of the self; this includes developing an insight into the self, through exposure to others and being aware of one's impact on others; Internalised moral perspective: self-regulation that is based on internalised moral values (as opposed to those imposed by the group, organisation or society); this is expressed in ethical decision making and ethical behaviour; Balanced processing: objective evaluation of information before making a decision, including encouraging others to question or challenge one's values; 22 Relational transparency: being true to one's values and expressing this to others; this involves the open sharing of information about one's thoughts and feelings. Servant Leadership Servant leadership is not a leadership style or technique as such. Rather it's a way of behaving that you adopt over the longer term. It complements democratic leadership styles, and it has similarities with Transformational Leadership – which is often the most effective style to use in business situations – and Level 5 Leadership – which is where leaders demonstrate humility in the way they work. However, servant leadership is problematic in hierarchical, autocratic cultures where managers and leaders are expected to make all the decisions. Here, servant leaders may struggle to earn respect. Dynamical Leadership A Dynamic Leader is someone who has outgrown all forms of victimhood and tyranny including manipulation and coercive power tactics in favour of magnetic influence based on reciprocal engagement and confluent communication. Adaptive Leadership Heifetz et al believe that leadership is, at its essence, about influencing change that builds and enables the capacity of individuals and organisations to thrive. Specifically, that leadership is the practice of mobilising groups of people to tackle tough challenges and thrive. The bottom line is that leaders need to understand the importance of adaptation and be able to employ the relevant processes and tools to build the adaptive capacity of organisations. Strategic Leadership The process of using well considered tactics to communicate a vision for an organisation or one of its parts. Strategic leadership typically manages, motivates and persuades staff to share that same vision, and can be an important tool for implementing change or creating organisational structure within a business. Example Larry Page of Google as a Strategic Leader 23 Larry Page is another example of a business person who can preserve any challenge. Larry and his company have faced much criticism and received ample praise over the years for his company’s actions. But in the midst of the storm, he has never let what others think sway him from pursuing the course for his company that he considers the best. Activity Q Briefly explain the characteristics of Strategic Leaders Create Focus – By developing an inspiring, energising strategy together with the team. A Communicate the Strategy in a way that inspires and motivates the team to support the goals. Implement their strategies through projects. These leaders create short term projects which would make the team engage in achieving their long-term strategy. Also employees have the freedom to select the projects they want to work on according to their wish. Developing Project Plans. The leader has to maintain steady communication with the team and develop and follow up with the project plans and milestones. This is ensuring that the team is on track to achieve their objectives. Plan for Success. Always inquire of the team that they want to successfully implement the project and provide the necessary requirements. Together with the team, the leader should identify the barriers and take measures to overcome them. Leadership Skills 1. Inspires and motivates others Great leaders create a vision of the future that is vivid and compelling, and that motivates employees to want to achieve it. Everyone wants to work for a company that makes a difference in the world. As a leader, you are best able to help the members of your team connect what they do to the impact it has on customers and communities. 2. Displays high integrity and honesty Great leaders are honest and transparent, and have high integrity--they do what they say they are going to do, and they walk their talk. As Umpqua Bank CEO Ray Davis said in his book leading through uncertainty, "I always tell our people that they're entitled to get answers to every question they have... that doesn't mean they're going to like the answers. But it's going to be truthful, and I know they can deal with the truth. This might create additional questions, but we'll get through them. And we do." 24 3. Solves problems and analyses issues Ultimately, leaders are recruited, trained, and chosen to solve organisational problems, and to take advantage of opportunities in the marketplace. This requires not only excellent analytical abilities, but also above-average people skills. 4. Drives for results Some people are happy to sit back and watch the world go by, while others aren't unless they are making things happen in their organisations. Great leaders have a higher level of perseverance, stick-to-itiveness, and drive than almost anyone else, and they can be counted on to get things done. 5. Communicates powerfully and prolifically Great leaders communicate with their people often, and in a variety of different ways. Whether it's by means of one-on-one conversations, team meetings, blog posts, email messages, phone or Skype calls, or any other such medium, leaders don't talk about communicating - they just do it. 6. Builds relationships Business is built on a solid foundation of relationships and trust. Without these two things, you can't have a business, or at least not a successful business. Take time every day to build relationships with the members of your team, your customers and vendors, your boss and your boss's boss, others in your industry, and your community. The stronger your relationships, the better a leader you will be. 7. Displays technical or professional expertise Business is built on a solid foundation of relationships and trust. Without these two things, you can't have a business, or at least not a successful business. Take time every day to build relationships with the members of your team, your customers and vendors, your boss and your boss's boss, others in your industry, and your community. The stronger your relationships, the better a leader you will be. 8. Displays a strategic perspective 9. Develops others Just as they work to continuously develop and build their own technical and professional expertise, the best leaders set aside time (and money in their budgets) to develop their work force. They look for the most promising employees, and provide them with the training they need to become their company's next generation of great leaders.. 9. Develops others Just as they work to continuously develop and build their own technical and professional expertise, the best leaders set aside time (and money in their budgets) to develop their work force. They look for the most promising employees, and provide them with the training they need to become their company's next generation of great leaders. 25 10. Innovates According to General Electric's 2012 Global Innovation Barometer, which polled 2,800 senior executives on the state of innovation around the world, 92 percent of respondents agreed with the statement that "innovation is the main lever to create a more competitive economy." The ability to innovate is a key skill for every great leader. Example Robert K. Greenleaf: The Servant as Leader While servant leadership is a timeless concept, the phrase “servant leadership” was coined by Robert K. Greenleaf in The Servant as Leader, an essay that he first published in 1970. In that essay, Greenleaf said: “The servant-leader is servant first… It begins with the natural feeling that one wants to serve, to serve first. Then conscious choice brings one to aspire to lead. That person is sharply different from one who is leader first; perhaps because of the need to assuage an unusual power drive or to acquire material possessions…The leader-first and the servant-first are two extreme types. Between them there are shadings and blends that are part of the infinite variety of human nature. “The difference manifests itself in the care taken by the servant-first to make sure that other people’s highest priority needs are being served. The best test, and difficult to administer, is: Do those served grow as persons? Do they, while being served, become healthier, wiser, freer, more autonomous, more likely themselves to become servants? And what is the effect on the least privileged in society? Will they benefit or at least not be further deprived? “ A servant-leader focuses primarily on the growth and well-being of people and the communities to which they belong. While traditional leadership generally involves the accumulation and exercise of power by one at the “top of the pyramid,” servant leadership is different. The servant-leader shares power puts the needs of others first and helps people develop and perform as highly as possible. Activity Q Briefly explain the characteristics of a Servant Leader 26 Listening: The servant leader must listen to verbal and non-verbal signals and interpret A what others are saying. In addition, the servant leader must listen to their inner thoughts and feelings and interpret them. Empathy: "The most successful servant-leaders are those who have become skilled empathetic listeners." "One assumes the good intentions of co-workers and colleagues and does not reject them as people, even when one may be forced to refuse to accept certain behaviours or performance. Healing: "servant-leaders recognise that they have an opportunity to help make whole those with whom they come in contact". Awareness: Servant leaders should "view most situations from a more integrated, holistic position." Robert Greenleaf said awareness "is a disturber and an awakener. Able leaders are usually sharply awake and reasonably disturbed". Persuasion: The servant leader should rely "on persuasion, rather than on one's positional authority, in making decisions within an organisation." The technique of convincing rather than coercion should be used. This is in contrast to the "authoritarian model” of leadership. "The servant-leader is effective at building consensus within groups". Conceptualisation: "The ability to look at a problem or an organisation from a conceptualising perspective means that one must think beyond day-to-day realities". Foresight: "a characteristic that enables the servant-leader to understand the lessons from the past, the realities of the present, and the likely consequence of a decision for the future". Stewardship: "a commitment to serving the needs of others. It also emphasises the use of openness and persuasion, rather than control". Commitment to the growth of people: "deeply committed to the growth of each and every individual within his or her organisation." An example is "taking personal interest in the ideas and suggestions from everyone, encouraging worker involvement in decision making". Building community: A servant-leader should "seek to identify some means for building community among those who work within a given institution". Leadership: Self Analysis To be successful in your career or even run your own business, an individual should first analyse his/herself on the perspective of leadership. While feedback systems such as employee feedback and performance appraisals can provide guidance to some extent, it is somehow important to analyse yourself and understand your weaknesses and work on how to improve them. By critical reflection and conducting an analysis of yourself, you will not only be able to identify what are your leadership skills but also where you could improve. 27 To conduct a thorough analysis, the following steps could be taken into consideration. Step 01: Take an Inventory of yourself Step 02: Familiarise with Leadership styles Step 03: Analyse the current leadership position and duties Step 04: Overview of your leadership styles Step 05: Analyse your mindset and skillset Step 06: Recommendations Step 1 Take inventory of your leadership practices, philosophy and feelings. Keep a journal in which you record the actions you take in your leadership position, your motivation for taking those actions over others and your feelings about the decisions. Do not be detailed in your journal but write enough so that you will understand your actions, thoughts and feelings when you sit down to write your analysis. Step 2 Familiarise yourself with leadership styles. According to Richard Jewell of Inver Hills College, to write an analysis, you must adopt a "particular system or point of view." Choose the leadership style(s) that best fit you, which is a good system to adopt for the purposes of a leadership analysis. Books and seminars on leadership have devised many leadership styles that often differ from author to author; therefore, it is not necessary to become familiar with each. Research, instead, to learn what goes into creating a leadership style, how leaders can identify their leadership styles and what types of leadership styles are productive and unproductive. Step 3 Begin your leadership analysis with a description of your current leadership position and its duties. Understand what leadership skills are expected of you, which, according to "Inc.," is the first step in analysing and assessing your leadership. Use others' feedback. Ask superiors, those you manage and colleagues what they expect a person with your job title to do. Step 4 Give an overview of your leadership style in the next paragraph. This may be a style identified by a leadership author, or it could be one you created. List the characteristics that define you as a leader. Argue, as author Daniel Goleman does -- as pointed out on Inside Indiana Business and "The Wall Street Journal" -- whether you take on different leadership styles during different situations, and explain what circumstances bring out what styles. Stay brief in this section -- you will get into detail later. 28 Step 5 Divide the rest of your analysis into mind-set, heart-set and skill set, as recommended on Inside Indiana Business by Chuck Williams, Dean of Butler University's College of Business. Expand on how your leadership style influences your leadership philosophy in the mind-set section. Discuss specific leadership models and leaders who have influenced you. Explain what you think a good leader is and if you are one by your own definition. Explain whether your leadership philosophy allows you to be successful at your job's current duties. Discuss your feelings on leadership in the heart-set section. Explain what role feelings have in leadership, based on the leadership style. Discuss your personality and values and how these have impacted your leadership. Discuss how your actions, philosophy and feelings reflect your leadership style in the skill-set section. Account for any differences you see. Explain how your leadership actions have or have not been helping you fulfil your job's duties. Step 6 Create a recommendations section. Explain any insufficiencies you have noticed from the analysis you did in the first five steps. Discuss why you think you have these weaknesses and explain how you can correct them. Create a specific action plan with achievable goals that explains how you will work to correct your weaknesses. SWOT Analysis for Self-Assessment Strengths What benefits do you have which others do not have? This could include skills, education, or connections. What are you better at than anyone else? What personal resources do you have access to? What do other people see as your strengths? Which achievements are you most proud of? What values do you believe in that others fail to show? Are you part of a network no one else is involved in? What connections do you have with powerful people? Weaknesses What work do you usually avoid because of lack of confidence? What do people think your weaknesses are? Are you happy with your education and skills training? Do you have any negative work habits? Which of your personality traits hold you back? Opportunities What new technology can assist you? Can you take advantage of the market in its present state? Do you have a network of strategic contacts to offer good advice or help you? 29 Are any of your competitors failing to do something important? Can you take advantage of it? Is there a need in your company which no one is filling? Could you create an opportunity by offering solutions to problems? Threats What hindrances do you currently face at work? Are any of your co-workers competing with you for projects or roles? Is your job changing? Can technological changes threaten your position? Could any of your weaknesses lead to threats? Example Other Self-Assessment Tools Myers Briggs Type Indicator This form of assessment is based on a psychometric questionnaire designed to measure the psychological preferences and identify personality types. It can help individuals understand both the way they perceive the world and the way they make decisions. Thomas International (PPA) The Personal Profile Analysis (PPA) is a work based behavioural assessment to help organisations recruit, retain and develop people particularly in tough times. It helps to identify people’s preferred behavioural style at work and raise self-awareness around that style of working. Belbin's Team Roles This behavioural tool looks at the way people behave and interact within a team environment. By identifying nine different roles within a team, each with an important contribution to make, Belbin’s team roles help people to work together with greater self-knowledge and understanding. Activity Q Briefly explain the 360 Degree Feedback Method The 360 Degree feedback method is another important self-assessment tool widely used A in organisations. Most people get their feedback only from their line managers in a work environment, 360-degree feedback surveys are an invaluable tool providing real insight from a wider source than a traditional reporting line. The feedback method provides a round view of people from the sources that really matter such as peers, customers, managers and team members. The 360-degree feedback method is a very useful tool in the early stages of coaching and management development. By repeating the process 6 months later, the individual can recognise significant progress, and the organisation can see the tangible benefits of their development. 30 Pervasive Issues in Business Leadership Given Below are 5 Critical Issues in Business Leadership: 1. Invest in Leadership Development Educating, training and promoting your own employees to higher levels of leadership can be a lot less expensive than hiring someone from outside. When recruiting, the management considers advertising costs, head-hunter fees, sorting through resumes, paying for transfers or relocations, paying out signing bonuses, in-house training, and many other hidden costs. Some studies suggest that 50% of new recruits at executive level don’t last more than nine months. Invest in your current staff to help them grow. 2. Create a culture of Collaboration Understand what’s most important to Customers. The best companies are customer-centric; they build their strategies around what matters most to customers and design their processes to give delighting customers priority over pleasing bosses. Build Shared Understanding by Bringing Everyone Together in Open Conversations. Companies that successfully manage at the pace of accelerating change have innovative processes that enable them to effectively integrate diverse points of view and reach agreements on their disagreements. Aggregate and Leverage Collective Knowledge. In a knowledge economy, organisations are fundamentally intelligence systems. Today’s most intelligent organisations no longer leverage individual intelligence by constructing bureaucratic hierarchies; they build collaborative networks to leverage their collective intelligence because they understand that nobody is smarter and faster than everybody. Focus on the Critical Few Performance Drivers. The most effective leaders know that management is about creating the future. And when they are good at creating the future, they never have to explain the past. That’s why smart leaders don’t focus on outcome measures; they focus on the leading indicators that drive the outcomes. Hold People Accountable to Their Peers. The secret to mastering the unprecedented combination of accelerating change and escalating complexity is to make sure that no one in the organisation has the authority to kill a good idea or keep a bad idea alive. In the best businesses, leaders aren’t bosses; they’re catalysts and facilitators orchestrating collaborative networks. These networks are far smarter and faster than hierarchies because holding people accountable to their peers is the great enabler of the collaboration necessary for speed and innovation. 3. Develop Communication skills Following are a few ways to develop communication skills: 31 Listening is not the same as hearing; learn to listen not only to the words being spoken but how they are being spoken and the non-verbal messages sent with them. Use the techniques of clarification and reflection to confirm what the other person has said and avoid any confusion. Empathise. Empathy is trying to see things from the point-of-view of others. When communicating with others, try not to be judgmental or biased by preconceived ideas or beliefs - instead view situations and responses from the other person’s perspective. Stay in tune with your own emotions to help enable you to understand the emotions of others. Attempt to resolve conflict. Learn to troubleshoot and resolve problems and conflicts as they arise. Learn how to be an effective mediator and negotiator. Use your listening skills to hear and understand both sides of any argument - encourage and facilitate people to talk to each other. Try not to be biased or judgmental but instead ease the way for conflict resolution. 4. Drive and Sustain accountability Accountability holds leaders to the task of clearly defining goals for the company and its people, as well as establishing measurements to assess those goals and define success. And it’s this accountability that provides an opportunity to assign ownership to company and personal performance objectives, measure results and follow through with objective evaluations. When people own a piece in the goal-setting puzzle and achieve what they set out to do, this is highly rewarding for everyone involved. Even more so, however, is when the leader follows through with positive recognition, acknowledging the team players for their achievement. The result of this is people become impassioned about their role in the company’s welfare and their own professional development – something that is quite personal and close to the heart. This newfound passion is the driver for productivity. It incites people to work harder, dream bigger and excel beyond their wildest imaginations. Accountability can be a highly positive experience for a leader, its team players and the company at large, which is contrary to the notion that accountability connotes something “negative.” Often associated with the term “feedback” and viewed as derogatory if results have not been accomplished, accountability can provide opportunities to coach someone, counsel that person and enable growth. It also provides leaders with the chance to develop their own skills, such as learning how to have difficult conversations about poor performance. Accountability provides the chance for all to improve upon their weaknesses and position and propel a business toward a place of prosperity. It’s this uplifting, highly positive and evolutionary experience that creates passion in the workplace. It’s simply become an invigorating place to be. 5. Be human and reward emotional intelligence EI is the ability to recognise your emotions, understand what they're telling you, and realise how your emotions affect people around you. It also involves your perception of others: when you understand how they feel, this allows you to manage relationships more effectively. 32 Example Emotionally Intelligent Fortune 500 CEOs Warren Buffett (Berkshire Hathaway): “Success in investing doesn’t correlate with IQ once you’re above the level of 25. Once you have ordinary intelligence, what you need is the temperament to control the urges that get other people into trouble investing.” Intensely loyal and relationship driven, he asks his CEOs to run their companies as if they were to own them 100 years from now. Jeff Bezos (Amazon.com): With his quirky laugh and self-deprecating style, Bezos doesn’t sound like a Fortune 500 CEO and that’s probably to his benefit. His obsession with the hearts and minds of his customers and his long-term perspective on relationships (and business strategy) are legendary, as was his YouTube announcement of Amazon’s Zappos acquisition in 2009. John Donahoe (eBay): Donahoe inherited a difficult situation from Meg Whitman with the need to truly alter the company’s business strategy. As a role model for Jim Collins’ Level 5 (humility & ambition) and Bill George’s “True North“ leaders, Donahoe’s disciplined self-awareness and his listening ability have created a deeply loyal team and a healthy, evolving culture. Activity Q Briefly explain the Characteristics of Emotional Intelligence important to a Leader Self-Awareness – People with high EI are usually very self-aware. They understand their A emotions, and because of this, they don't let their feelings rule them. They're confident – because they trust their intuition and don't let their emotions get out of control. Self-Regulation – This is the ability to control emotions and impulses. People who self regulate typically don't allow themselves to become too angry or jealous, and they don't make impulsive, careless decisions. They think before they act. Characteristics of self regulation are thoughtfulness, comfort with change, integrity , and the ability to say no. Motivation – People with a high degree of EI are usually motivated. They're willing to defer immediate results for long-term success. They're highly productive, love a challenge, and are very effective in whatever they do. Empathy – This is perhaps the second-most important element of EI. Empathy is the ability to identify with and understand the wants, needs, and viewpoints of those around you. People with empathy are good at recognising the feelings of others, even when those feelings may not be obvious. Social Skills – It's usually easy to talk to and like people with good social skills, another sign of high EI. Those with strong social skills are typically team players. Rather than focus on their 33 own success first, they help others develop and shine. They can manage disputes, are excellent communicators, and are masters at building and maintaining relationships. Leadership: Integration and Analysis Explore Leadership Theory This section states to explore all core theories of leadership and models that are present under each section. Once the core meaning of these theories are understood and can be analysed and integrated to resolving real life leadership issues. Engage in personal Assessment As mentioned earlier, self-analysis is crucial to identify your strengths and weaknesses in the leadership perspective. Once these elements are identified, it is easier for an individual to incorporate lessons learnt from the leadership theories into the practical situations. Furthermore, the self-analysis will enable the person to identify the strengths and weaknesses in a leadership perspective and take the necessary measures to overcome the weaknesses. Interact with Exemplary leaders Interacting with leader-exemplars in the business community create live case opportunities. As these individuals tell stories and reflect on their past lessons and give personal voice to challenges and opportunities, you will gain the ability to organise and integrate their own learning into your real life. Pondering and Reflection Engaging in personal assessment such as 360 assessments verifies strengths and identifies weaknesses. There are leadership assessment tools targeted at individuals that adapt questions while maintaining the integrity of the assessment. Reflection is to step back, ponder and consider. 34 xample Examples of integrating leadership in organisations Use senior leadership to set clear expectations. The expectation was set very early within the process that all leaders were required to actively participate and engage in the culture change process. This message was communicated from the CEO and reiterated by subsequent levels of management. Executive Committee support was leveraged throughout the process and used to engage the rest of the leadership in the organisation. Create a well-thought-out communication plan. To manage 180 individuals through a multi-source feedback system requires considerable time and attention to detail. Detailed communication plans were created that articulated the purpose of the surveys; the timeline for the process; and key deadlines to remember. Closely monitor everything throughout the process. As the number of people participating in the leadership development effort increases so does the complexity and the possibility for errors. Closely monitoring the process from start to finish ensured successful implementation so that any obstacles could be met head-on. Activity Question - What are the additional methods that can be used to integrate leadership in an organisation? A Mobilise an internal HR team trained to help with coaching. Key HR personnel worked closely with a senior consultant from Denison Consulting to learn the model and surveys and be prepared to deliver feedback and provide coaching to leaders. This helped crystallise the role of HR as a strategic business partner within the firm and also ensured that enough qualified individuals were present internally to support the leaders while creating their development plans or at any later point in time. Provide leadership coaching and support. Previous research and experience has revealed that most leadership development programs fail, not because of the survey, but because of a lack of support once leaders receive their results. Providing one-to-one feedback and coaching to each leader allowed the leaders to understand their results and create an action plan to further their personal development. Sustainability & Ethics Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs. Sustainable development has continued to evolve as that of protecting the world’s resources while its true agenda is to control the world’s resources. 35 Environmentally, sustainable economic growth refers to economic development that meets the needs of all without leaving future generations with fewer natural resources than those we enjoy today. The essence of this form of development is a stable relationship between human activities and the natural world, which does not diminish the prospects for future generations to enjoy a quality of life at least as good as our own. Introduction to Sustainability in Business Business sustainability is defined as managing the triple bottom line - a process by which companies manage their financial, social and environmental risks, obligations and opportunities. These three impacts are sometimes referred to as profits, people and planet. Triple Bottom Line The TBL is an accounting framework that incorporates three dimensions of performance: social, environmental and financial. This differs from traditional reporting frameworks as it includes ecological (or environmental) and social measures that can be difficult to assign appropriate means of measurement. The TBL dimensions are also commonly called the three Ps: people, planet and profits. We will refer to these as the 3Ps. Well before Elkington introduced the sustainability concept as "triple bottom line," environmentalists wrestled with measures of, and frameworks for, sustainability. Academic disciplines organized around sustainability have multiplied over the last 30 years. People inside and outside academia who have studied and practiced sustainability would agree with the general definition of Andrew Savitz for TBL. TBL "captures the essence of sustainability by measuring the impact of an organisation's activities on the world... including both its profitability and shareholder values and its social, human and environmental capital. 36 Example How Cascade Engineering in the USA Practices the Triple Bottom Line At Cascade Engineering, we define sustainability as the Triple Bottom Line – Social Capital, Environmental Capital and Financial Capital. We think of the concept of sustainability, as the three interconnected gears in motion. Each category is an interdependent, innovation-enabling mechanism. The three gears (Social, Environmental and Financial) cannot exist independently; each in turn, provides momentum and innovative thought to the next. To drive one forward is to drive all three forward; the result is a sustainable system where innovation begets innovation. Our annual TBL Report serves as a documenting mechanism for all sustainability efforts throughout our organisation, and illustrates our achievements in this arena with examples of new products, business units and operational improvements. We welcome you to explore our progress toward the implementation of a sustainable strategy. PeopleAt Cascade Engineering we believe that simply taking care of our own business is no longer sufficient, but rather we must address the component of taking care of the greater good. From the beginning, our purpose has always been to demonstrate how sustainability can be a powerful vehicle for societal change and have a clear business purpose as well. Cascade has pioneered various programs over the years that positively impact society and benefit our company at the same time. Programs such as Welfare to Career, Anti-Racism Awareness, and the ReEntry Employment Resource Center have been a tremendous asset in helping the greater community, and in allowing our internal culture to embrace diversity and support people with respect and dignity. Planet Cascade Engineering has made great strides toward developing and launching products that reduce the impact on our environment. Today, we have a global energy market in which energy is a limited resource, and as oil consumption goes up, so does demand for all other fuel sources. The result is that increased demand for energy impacts feedstock and subsequently the cost of materials we use. The innovation lies in finding ways to reduce our energy impact which not only gives us bottom-line results but also contributes to reducing overall demand, thereby minimizing our environmental footprint. Cascade strives to build a sustainable organisation and is committed to protecting the environment by continuously reducing waste emissions into the air, land and water. We manage environmental progress and initiatives through our Environmental Management System (EMS) which is accredited to ISO 14001 Standards. Profit Economic Capital is the final gear in the Triple Bottom Line, and the beneficiary of the other two gears, social and environmental. The economic gear allows our company to thrive and gives us the ability to reinvest in the other two capitals so we can continue the cycle. 37 Activity Q Briefly explain the three elements included in the Triple Bottom Line concept Environmental Measures A The environmental measures include the steps taken by organisations to be more eco friendly. This could be anything from transforming to a paperless office or implementing waste management systems. Social Measures A few examples of social measures that could be done by a company are given below: Unemployment rate Female Labour Relative poverty Average commute time Violent crimes per capita Health-adjusted life expectancy Economic Measures A few examples of the economic measures that could be taken by a company are: Personal income Cost of underemployment Establishment churn Establishment sizes Job growth Stakeholder Engagement Companies need to remain relevant to survive in a challenging business environment and to be relevant requires regular interaction with important stakeholder groups. A robust stakeholder engagement model is vital for companies to be able to understand and respond to legitimate stakeholder concerns. Important stakeholder groups are inherently known to companies and most companies are interacting with these stakeholder groups in some form or another as a matter of course. Such engagement happens in different formats and at various levels in any organisation, and the process has been embedded in sound business practices for some time. However, this process is often ad-hoc at many companies without a formal structure and process in place. Business leaders and managers will normally be able to list their key stakeholders and concerns, but not furnish the structure and process of engagement as easily. 38 The value of the stakeholder engagement process can be greatly enhanced while the risk of missing important perspectives – which may negatively affect reputation and cause embarrassment or worse – be reduced by formalising the implementation of a formal stakeholder engagement policy. The key components of a typical policy are: Define the scope of the policy. The scope and boundary of the stakeholder engagement policy should be clearly defined, articulated and communicated. The background, logic and impact of the policy should be included to set the scene for the policy. Define the ownership and decision-making process. The executive ownership of the policy and process should be clearly defined, with the owner mandated to ensure accountability. This should be communicated to the organisation and incorporated in the performance measurements of the owner. Define the governance process Companies are increasingly focusing on enhancing the credibility of their reported information and so-doing, supporting business processes. The introduction of a sensible assurance regime with regard to stakeholder engagement, using a Combined Assurance model, should form part of the governance process. It is already common practice in certain European countries to obtain external assurance on the stakeholder engagement process. AA1000 Stakeholder Engagement Standard 2011, Accountability 2008. Identifying the key stakeholders and stakeholder groups. There are numerous models and methods for identifying stakeholders. Our standard recommended approach focuses on two dimensions; 1) the stakeholder’s influence on the organisation, and 2) the stakeholder’s dependence on the organisation. 39 40 Our Employees contributed their time and talents More than 70,000 students have participated in the U.S.based Communities in hundreds of community-related projects Xerox Science Consultants Program since its start 40 years ago. worldwide. In Poland, through the “Xerox – Better Start!” program, students team up with Xerox employees to learn first-hand about working at a large global company. The students, who are orphans and/or physically handicapped, gain on-the-job experience from their Xerox mentors and leave the program with the skills necessary to begin their careers. Our World: Through active memberships with business Xerox is partnering with the Rochester Institute of Public Policy and trade associations and frequent Technology’s Golisano Institute for Sustainability to provide Makers and engagement with public policy makers, programs that embrace the principles of sustainability in Influencers Xerox helps to educate on key issues product development. related to its business, industry and stakeholders. Xerox joins Microsoft, Intel, IBM and other high-tech leaders as a founding corporate member of the Information Overload Research Group. IORG is dedicated to boosting workplace productivity by fighting information overload through the development of solutions to sort and categorize the flood of electronic information from cell phones, e-mail, instant messages and billions of printed pages worldwide. Activity Q What are the best practices of Sustainability? There are various best practices that assist in organisational sustainability. These practices A include: Stakeholder engagement Environmental management systems Reporting and disclosure Lifecycle analysis 41 Stakeholder Relations Management Effective management of relationships with stakeholders is crucial to resolving issues facing organisations. By using their influence, stakeholders hold the key to the environment in which the organisation operates and the subsequent financial and operating performance of the organisation. Thus the effective management of stakeholder relations is growing as a key focus of PR and organisational activity. A stakeholder is any person, group or organisation who can place a claim on an organisation’s attention, resources or output, or is affected by that output. They have a stake in the organisation, something at risk, and therefore something to gain or lose as a result of corporate activity. The aim of stakeholder relations management is to influence stakeholder attitudes, decisions, and actions for mutual benefit. The stakeholders need to gain from the relationship or they may not be sufficiently motivated to cooperate. The first main steps in stakeholder relations management are to identify and prioritize stakeholders. The benefits of using a stakeholder-based approach are: Gaining support from powerful stakeholders can help in winning more resources. This makes it more likely that the projects will be successful. By communicating with stakeholders early and often, it can be ensured that they know what is done and fully understand the benefits of the project. This means they can support the project actively when necessary. Can anticipate what people's reaction to the project may be, and build into the plan the actions that will win people's support. Stakeholder Participation It is not enough to give stakeholders the opportunity to be heard, because many will not have the capacity to participate effectively. Building the capacity of stakeholders to participate is one of the most important challenges for effective stakeholder engagement has been learned from company experiences to date. The companies learning processes and support systems should be designed specifically to address this issue. Stakeholder Engagement Process Model Stakeholders should be represented by specific roles in the organisational design through which they could participate in the company’s business and learning processes. It is not enough to give stakeholders the opportunity to be heard because many will not have the capacity to participate effectively. Building the capacity of the stakeholders to participate is one of the most important challenges which could be accomplished by utilising the stakeholder engagement process model below: 42 The stakeholder engagement process model displayed in the diagram includes the following activities: Classification of key stakeholders Definition of stakeholder relations map and objectives Definition of stakeholder related responsibility and sustainability Definition of transparency policies and strategies Definition of stakeholder participating roles and tasks Integration of stakeholder roles/tasks in existing and new processes Provision of role-based information and training Supervision of stakeholder interaction and implementation feedback Monitoring of transparency and stakeholder company understanding perception Obtaining stakeholder feedback on responsibility and sustainability and monitoring stakeholder satisfaction Updating the relations map and indicators Environmental Management Systems An Environmental Management System (EMS) is a set of processes and practices that enable an organisation to reduce its environmental impacts and increase its operating efficiency. 43 An Environmental Management System (EMS) is a structured framework for managing an organisation's significant environmental impacts; Practical tool - To help organisations understand and manage their impacts on the Environment Framework - To continually improve environmental performance (managing negative impacts and helping to increase resource efficiency) Process – Through which organisations can engage with employees, customers, clients and other stakeholders (enhancing reputation …helping demonstrate conformity with supply chain requirements) Many organisations have adopted or commenced the approach specified in national or international standards which set requirements and a framework for systems to be externally assessed and certified. Whatever scheme is adopted, the elements of the EMS will largely be the same, following the Denning Cycle of: plan what you’re going to do, do what you planned to do, check to ensure that you did what you planned and act to make improvements. Through this cycle, all Environmental Management Systems set a framework through which the organisation can build on-going ‘continuous improvement' 44 Example Nikon: Environmental Management Systems The Nikon Group conducts environmental management activities based on ISO14001*. They are currently working to obtain integrated ISO14001 certification for more Group companies inside and outside Japan with the goal of boosting the efficiency of business operations and disseminating the Environmental Action Plan through the entire Group, which is their medium-term goal for environmental activities. With these activities they are reducing GHG* emissions, generation of waste, and use of hazardous substances. In the year ended March 31, 2015, X-Tek Systems Ltd. (UK) obtained integrated ISO14001 certification. Nikon is also promoting the introduction of the Nikon Eco Program, which consists of the key elements from ISO14001, to their non-manufacturing facilities in and outside Japan that have low environmental impacts. The Nikon Eco Program is applied to each facility at the level of either "standard" or "basic", depending on the situation of the facility. The Nikon Eco Program has already been introduced in all of the target facilities in Japan, and in the year ended March 31, 2015, it began to be introduced into the non-manufacturing facilities outside Japan. They are currently working in the visualisation of their environmental performance data. At the facilities covered by the Nikon Eco Program they are setting the goal for the reduction of environmental burdens, working towards its achievement, and enhancing activities while repeating the PDCA cycle. Activity Q Briefly explain the components of an EMS The components to be considered when developing an EMS are as follows: A Environmental Policy This is a brief statement of the organisation's aim or intention in terms of its environment conservation policies. This statement should make sure that the environmental objectives of the organisation are in par with the organisational objectives. Environmental Impact and Identification The process of identifying and recording the possible and actual impacts of an organisation's operations is crucial when developing an EMS. This can be done by conducting an environmental audit. Objectives and Targets Conducting an environmental audit will assist the organisation to identify its environmental objectives and targets. Consultation The employees and community should be consulted before implementing an EMS system. Operational and Emergency Procedures All the processes and systems should be in line with the organisations Environmental objectives and also the organisational objectives 45 Environmental Management Plan This plan will include the procedures and steps taken to meet the environmental objectives of the organisation in detail. Documentation The organisational objectives, environmental objectives and all targets and policies should be documented along with information on the procedures to follow them. Responsibilities and Reporting Structure The staff and top management should be allocated responsibilities to ensure the smooth functioning of the EMS Training Proper training programmes should be conducted to create awareness about the EMS between employees Review Audits and Monitoring Compliance These audits should be conducted regularly to make certain that the EMS is achieving the expected results. Continual Improvement The steps in place to ensure whether the EMS is functioning as expected and if not improvements should be done. Benefits of an Environmental Management System An EMS can assist a company in the following ways: minimise environmental liabilities; maximise the efficient use of resources; reduce waste; demonstrate a good corporate image; build awareness of environmental concern among employees; gain a better understanding of the environmental impacts of business activities; and Increase profit, improving environmental performance, through more efficient operations. 46 Reporting and Disclosure Introduction to Reporting and Disclosure Measurement and control are at the heart of instituting sustainable practices. Not only can organisations collect and assemble the information, they can also be entirely clear with outsiders. The Global Reporting Initiative is one of the most recognised reporting standards worldwide. The Global Reporting initiative (GRI) The Global Reporting Initiative (GRI) is a leading organisation in the sustainability field. GRI mainly focuses