Wednesday, February 6, 2013

Learning and Leadership Influence on the Financial Performance of Organizations

Leaders often wonder how they can improve upon organizational effectiveness and encourage higher levels of employee learning and development. A study conducted by Jonathan Michie from Oxford University and Vissanu Zumitzavan from Mahasarakham University sheds further light on how learning styles and leadership abilities influence the entire organizational performance. As organizations try to encourage higher levels of financial and personal development in a global market they may consider these connections as significant contributors

Leadership style can have a significant influence on the overall financial success of the organization (Ulrich and Ulrich, 2010). It is through this implementation of proper management techniques that systematic changes in the organization can be made that create higher levels of performance. It is the leadership style that attracts and pushes appropriate visions for organizational members.

 A second major component of successful influence on the organization is continuous learning by management (Rowley 2011). When managers are able to learn and adapt to the environment they are more able to align their operations to customer needs. The process of learning also opens managers thought processes to new methods and ways of conducting business. 

Learning also influences overall behavior of managers. How people learn has an impact on how they act as a manager (Brown & Posner, 2001). Managers who frequently engage in the four learning styles of action, thinking, feeling and assessing others also engage more frequently in a variety of leadership styles that include challenging, inspiring, enabling, modeling, and encouraging. It is this adaptation of styles to the situation that creates more effective approaches.

Yet knowledge for knowledge sake is worthless. New knowledge must be applied within the workplace before it can be useful.  A learning manger thus becomes the facilitator of learned information as well as the creator of higher expectations within the organization that encourages others to also learn (Handy 1995).  It is through the process of learning and applying, learning and applying, and learning and applying that continually makes incremental change that can add up to bid dollars.

The study was conducted of tyre firms within Thailand to understanding this learning, leadership, and performance connection. The researchers used questionnaires and interviews to assess the success of 140 firms. The results of the study found that the learning styles of pragmatist and reflector with transformational and transactional styles significantly improved upon organizational effectiveness. Such leaders were able to increase teamwork and skill development to create higher levels of organizational and financial performance.

The pragmatist is a person who studies concepts that are associated to specific problems while the reflector learns by pondering the causes and effects of events before implementation. It is through the process of learning about specific problems, thinking about them, and using one’s transformational vision to create positive transactional changes that helps organizations develop. As the global economy becomes more complex it will be such leaders who can encourage their employees to adapt, learn and implement to overcome environmental challenges.

Brown, M. and Posner, Z. (2001). Exploring the relationship between learning and leadership. Leadership and Organizational Development Journal, 22 (5–6), 274–280.

Handy, C., 1995. Managing the dream. In: S. Chawla and J. Renesch eds. Learning organisation. Portland, OR: Productivity Press, 45–55.

Michie, J. & Zumitzavan, V. The impact of ‘learning’ and ‘leadership’ management styles on
organizational outcomes: a study of tyre firms in Thailand. Asia Pacific Business Review, 18 (4).

Rowley, C., 2011. Organisational learning. In: C. Rowley and K. Jackson eds. HRM: the key concepts. London: Routledge, 142–146.

Ulrich, D. and Ulrich, W., (2010). The why of work: how great leaders build abundant organizations that win. New York: McGraw-Hill.

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