Leadership is defined as the process of influencing a group to strive willingly toward the achievement of goals (Robbins & Coulter, 2005; Brewster et al, 2008; Carter & Justis, 2009). Leadership is further described as a process that gives meaningful direction or purpose to collective effort, as the activity of getting people to make decisions and take paths that they would normally not have selected and as the process of articulating visions, embodying values, creating an environment conducive to the accomplishment of goals (Brewster et al, 2008; Hough et al, 2008; DuBrin, 2010), and as the ability to inspire confidence and support among the people needed to achieve organisational goals (DuBrin, 2010).
Brewster et al (2008) note that from the definitions of leadership available in the literature, leadership is a process and not a position, it involves relationships, involves influencing and motivating people, gaining their commitment, enthusiasm and support to bring about change toward a desired future.
3.2.3.1 Leadership styles
Leadership style is a relatively consistent pattern of behaviour (DuBrin, 2010). Leadership styles vary in terms of their degree of task or people orientation. Styles include autocratic, participative, expert, referent (Sorenson, 2000; Farrington, 2009; DuBrin, 2010).
Autocratic leadership is not overtly concerned with group members’ attitude towards decisions which are made confidently, and it is assumed that members will comply. It is strongly task orientated with a high concern for results (Sorenson, 2000; DuBrin, 2010). Participative leadership focuses on a balance of task and people orientation, involving members in decision-making and developing cohesion and synergy (Sorenson, 2000; Farrington, 2009). It involves a combination of consultation and consensus and is equally concerned about people and results (DuBrin, 2010). Expert leadership is
derived from specialist knowledge whilst referent leadership occurs when individuals have a positive regard for the leader (Sorenson, 2000; Farrington, 2009).
According to the literature, the most successful leadership style adopted is situation dependent, and that external factors as well as follower stage of development require style adjustments to be successful in achieving goals. The objective is to be attentive of the environment and to develop, support, guide and control individuals to achieve mutually beneficial goals (Robbins & Coulter, 2005; Hough et al, 2008; DuBrin, 2010).
3.2.3.2 Leadership roles
Leaders perform interpersonal, informational and decisional roles (Brewster et al, 2008), and in terms of their performed functions include acting as a figurehead for the organisation, being a spokesperson, a negotiator, a coach and motivator, a team builder and player, a problem solver, an entrepreneur and a strategic planner (Brewster et al, 2008; DuBrin, 2010).
In addition, leaders are required to establish the vision for the organisation (Swanepoel et al, 2008; Farrington, 2009), determine the strategies to achieve it, communicate the vision and strategies clearly, develop and maintain trust, establish and exemplify ethical standards, as well as clarify roles, objectives and responsibilities, and monitor operations – recognising achievements, evaluating individual performance, providing assistance and allocating rewards (Robbins & Coulter, 2005; Hough et al, 2008; DuBrin, 2010).
3.2.3.3 Trust and ethics
The importance of trust in leadership and corporate governance is emphasised in the literature. Trust facilitates the effective functioning of a system and increases the efficiency of contracting (Adendorff, 2004; Swanepoel et al, 2008; Astrachan, 2010). It implies accountability, predictability and reliability, creates an environment of care and
wellbeing, is the basis for integrity, promotes loyalty and helps to constrain or limit costs in contracting (Swanepoel et al, 2008; Sundaramurthy, 2008).
Dimensions of trust identified in the literature are; integrity, technical and interpersonal competence; consistency in judgement, actions and relations; loyalty and the openness to share ideas and information freely (Robbins & Coulter, 2005; Swanepoel et al, 2008).
Relational contracting based on trust is cited as an important governance mechanism and can be instrumental in securing opportunities in environments of uncertainty (Bertrand & Shoar, 2006). The emphasis placed on trust in business relations varies relative to cultural norms and values (Bertrand & Shoar, 2006; Hill, 2009). It is cited as being prone to opportunistic behaviour (Astrachan, 2010), but that when trust is embedded in a relationship, opportunistic gains are foregone in favour of long-term gains of the relationship (Adendorff, 2004).
Ethics generally pertain to the knowledge and understanding of the difference between what is right or wrong. Corporate ethics are the principles and standards that guide the activities of the business and its relations with stakeholders (Robbins & Coulter, 2005; Brewster et al, 2008; Hough et al, 2008; Hill, 2009). It requires an integrated approach to decision-making that is not only economically sound or within applicable laws, but takes a moral point of view. Ethics management defines and instils guiding values into an organisation, creating a sense of shared accountability in a supportive environment (Brewster et al, 2008). Ethics are aspirational objectives that should reflect the cultural values of the society within which it operates (Adendorff, 2004).
Organisational ethical behaviour is influenced by performance goal realism, leadership behaviour, decision-making processes, organisational culture and the personal ethics of the individual (Hill, 2009).
Factors affecting ethical behaviour in individuals are; their stage of moral development, from pre-conventional to principled; their individual characteristics of ego strength and
locus of control; organisation structure and culture, and issue intensity (Robbins & Coulter, 2005; DuBrin, 2010).
Cultural dimensions influence leadership style through the transfer of norms, attitudes, beliefs and values from the greater cultural community and family to the individual (Hill, 2009). Leadership style and behaviour cannot be separated from organisational culture. A leader’s conduct impacts the culture and teamwork in organisations (Hough et al, 2008).
For the purpose of this study, leadership is viewed as the process of influencing and inspiring individuals and groups to strive towards the achievement of shared goals, giving meaningful direction and purpose to their efforts.
3.3 CORPORATE GOVERNANCE