2.6.3.4.1 The leadership traits: transformational, transactional, servant and situational
All the above leadership styles within the focal firm, especially the transformational and transactional leadership styles may be mapped on the two dimensional Managerial/Leadership Grid axes (Blake & Mouton, 1985) where they juxtaposes two leadership approaches, referred as the Task and Relationship/People behaviours. The task attribute refers to the ‘Concern for production’, which emphasizes the leader’s importance given to the accomplishment of the tasks (i.e. transactions) to promote a high level of performance. The relationship/people attribute refers to the ‘Concern for people’, which emphasises the leader’s importance given to the individuals’ needs and expectations. Leaders need to ensure a concern for productivity but at the same time need to build trust among all employees to unleash people’s passion and promote knowledge sharing to foster creativity (Fawcett & Magnan, 2004).
61
The key leadership theories, from the extant literature, were focussed on the importance of the
transformation, transactional and servant leadership styles, which are vital for leadership practices
and its success. The Leadership Grid (Blake & Mouton, 1985) clearly outlines that the leadership styles consist of a continuum between a concern for both the leader’s objectives and the employees’ needs, where both are mutually inclusive and dynamic since ideally the outcome shall end up to a win- win situation for both actors. Such a continuum of leadership style is in line with the situational
leadership approach since every situation is contingent and may need to take dedicated measures to
achieve effective leadership especially due to the dedicated organisational climate (Hershey & Blanchard, 1969). This means that leadership approach consists from a leader, a follower and the contextual conditions (Tannenbaum & Schmidt, 1973; Tosi, 1991; Osborn et al., 2002; Liden & Antonakis, 2009).
The contextual conditions were further defined, within the leadership practices, and were classified to describe the organisational context to be under one of the referred situations of: stability, crisis, dynamic equilibrium, and edge of chaos (Osborn et al., 2002). The researcher from the literature considers that the attributes of the transformational leadership overlaps with authentic leadership (Avolio & Gardner, 2005) vis a vis the leadership values and ethical concern, where the ethical perspective nowadays is considered key in various literatures fields. In such a case all leaders need to embed in all decisions and practices, both ethical and moral principles which are away from the contemporary corruption cases and hidden agendas (Avolio & Gardner, 2005) which are also pivotal both within and across the SC to win all stakeholders’ support, trust and commitment to promote an effective SCI approach.
2.6.3.4.2 The integrated leadership approach
Within a single organisation set-up, the leadership style is ideally based on a decentralised approach, where all employees are empowered across all management levels to promote a cross-functional and teamwork environment by adopting a leadership power sharing stance, with an interdependent and
integrated leadership approach with all functional areas (McCauley-Smith et al., 2013). Within a
SC set-up, one needs to consider, that for an effective leadership it must be seen not only from a top- bottom approach but from a ‘leading out and leading in’ approaches (Useem, 2001), since the employees need to constantly interact with their managers and leaders within and outside the firm with all of its stakeholders. Though, it is assumed in the literature, whichever is the context, such as buyer to supplier or employee to supervisor relationship, the leadership power need to be based on the same foundation principles (Heide & George, 1988). The effective leadership platform is reached through joint initiatives between all involved stakeholders as substantiated by Olivares et al. (2007, p. 79),
62
where they stated that ‘Although individual-based leader development is necessary for leadership, it is not sufficient. Leadership requires that individual development is integrated and understood in the context of others, social systems, and organizational strategies, missions, and goals’.
In retrospect, an effective leadership approach needs the right leadership style with a holistic stance to ensure that all stakeholders’ requirements are considered, to promote synergy of all actions with a teamwork vision (Bass et al., 2003; Schippers et al., 2008). Furthermore, the leader needs to have the right mindset and competence, as advocated by Cheung et al. (2012, p.3923) by stating that: ‘having all the data in the world will not help to improve a company’s profitability if the data are not correctly interpreted’. This approach reinforces the need of right leadership skills across all management levels, which are achieved through ongoing training and leadership development initiatives (McCauley-Smith et al., 2013), so that all relevant leaders are informed and well versed to promote effective decision making within all the SC dynamic contextual conditions. The quality of the management approach, within the SC context, is also function of the management leadership approach, which together with other seven dimensions, namely training, employee relations, customer focus, quality data and reporting, supplier quality management, product/service design, and process management, all contribute to the SC performance (Kaynak & Hartley, 2008).
2.6.3.4.3 Effective leadership with the right strategic power approach
An effective leadership approach also needs to consider that to reach effectively all SC stakeholders, need to interact according to their salience: which is function of the power of the focal firm vis a vis the SC member; the established practices jointly agreed upon; and the urgency or critical need of the matter (Mitchell et al., 1997). Such a SC context in general is determined by the individual power of all SC members which drives them to pursue different types of influences on other SC actors, but above all they try to extend the internal business processes also across the SC business processes, through either coercive or non-coercive power strategies (Yeung et al., 2009). Such a power influence approach is function of three power resources, referred as levels of utility, supplier’s scarcity and information scarcity, to meet both commercial and operational benchmarks (Chicksand, 2009). Trust between SC actors builds with more power symmetry (Huxham & Beech, 2008). The deployment of power needs to be managed effectively, through a cooperative or non-coercive
approach (Co & Barro 2008; Yeung et al., 2009), so as to build a positive climate within all
relationships, so that it does not produce counter-productive effects on the overall SC performance, with the ultimate break-out of any of the SC actor from the SC network (Cox, 2004a, 2004c).
63
2.6.3.4.4 A holistic and integrated management and leadership approach
The effective management and leadership approach within the SC context needs to incorporate a holistic and inclusive understanding of both the financial and the physical properties of the SC (Cox et al., 2001). In such a way the value appropriation is to be mapped with the physical value added processes (Ibid). Furthermore, the focal firm needs to map also the power attributes of all SC actors to manage all the relationships with each other, since there can be more than one SC actor engaged with the focal firm, both as dyad or else as an extended network (Ibid).
Such a theoretical analytical approach to SC thinking, through power regimes or power circumstances of all SC actors, imply that every SC member needs to establish who gets what, how, where and when in the SC (Cox et al., 2001). This shows that SCI is not always possible due to various valid reasons (e.g. due to differing power). SCI is likely to occur for interdependent SC actors or when the focal firm is the buyer and it is close to the customer and can also apply power dominance (Ibid). It is well established in the literature that SCI increases the focal firm power, apart from other benefits, relative to the other SC actor (Horwitch &Thietart, 1987; D’aveni & Ravenscraft, 1994). Management needs to understand the power of each SC actor, since circumstances may exist where any SC actor may block value to another SC actor (Cox et al., 2001) or else a SC actor may have the power to undermine the overall SC (Glyn, 2001), since the SC is strong as its weakest link. Power regimes outline that there exists a hostile environment with a self-regarding effort by SC actors to appropriate value (e.g. opportunism from an RBV perspective) (Cox et al., 2001). This also implies that the complex network of SC actors needs dedicated relationship building with each other to enable business success (Ibid).