The contemporary rapidly changing and complex socio-economic environment implies that businesses cannot exist without effective human resource management. Leadership plays a primary role in influencing the direction of businesses by touching on the beliefs and motivations of employees. Modern managers must find ways that enhance coherence and cohesiveness in the work environment by applying values, beliefs, skills, knowledge, and resources that foster positive change. The insurance industry presents a unique challenge for managers, who must navigate unsteady waters by meeting the industry challenges and the unique demands of the modern worker. According to Silva & Mendis (2017), 40% of company profitability in the insurance industry is directly associated with the leadership style. Therefore, the leadership style must take into account the need to motivate employees by accommodating their desire for flexibility, technological integration, and playing an active role in decision making.
The current challenges facing the company stem from a radical shift in the leadership styles from a laissez-faire to a more traditional/autocratic system. For example, the employees were used to a laid-back atmosphere and faced no penalties for showing up late for appointments. The laid back atmosphere allowed flexibility, which they appreciated. However, Scot’s authoritarian style fails to accommodate the established company culture where employees enjoyed the flexibility. For example, he enforces penalties for individuals clocking more than a minute, which is a sharp deviation from the traditional work environment at Sunnyvale.
The style of leadership has a direct effect on the productivity levels among employees and their overall attitudes toward work. For example, the company adopted the laissez-faire leadership style, which allowed employees to execute their tasks with little interference. Without letting employees fend for themselves, the style allows the management to provide resources and assistance to solve the tasks at hand. The circumstances at Sunnyvale also made the style effective, considering that the company was comprised of highly skilled and knowledgeable individuals. Therefore, the management style allowed them to execute their roles without the perception of micromanagement.
A complete change from the conventional leadership style in the company will hurt the work environment. As already experienced, the new leadership has resulted in increased employee turnover, which reflects the general attitudes of employees about the changing work environment. There is a growing resentment among employees, which may prevent the company from achieving its goals and deviate from its focus on enhanced customer experiences. Autocratic leadership is likely to make the group of highly specialized individuals feel unappreciated or not trusted with the most vital decisions in the organization. Consequently, the shift will harm their commitment levels toward achieving their goals and the overall organizational goals.
The modern business environment enhances flexibility, which provides room for innovating the work environment. Employees are not only concerned about meeting their targets, but also cherish their workplace experiences. Trends such as remote working have allowed employees to fulfill their roles outside the traditional office space. Employees want to enjoy the freedom of decision making, which enhances their creativity and motivation to achieve their goals. In this regard, the organization should embrace the features of various leadership styles, including laissez-faire, democratic and servant leadership to motivate employees to be the best versions of themselves. The leadership style must enhance the freedoms of employees while putting in place support mechanisms to enhance the achievement of their goals.
The organization should implement participative and laissez-faire leadership styles, with a focus on creating a friendly work environment. These leadership styles allow businesses to build work relationships that are based on trust and commitment, rather than authority. The leadership should facilitate the flow of information, and discourage a unidirectional flow of power. The management should aim to ensure that employees share the organization’s vision, which will influence the way employees execute their roles.
The management can use various techniques to match the leadership style with the company culture. For example, it is vital to use technology to the organization’s advantage. Various tools allow employees to retain autonomy and flexibility, without hurting productivity. For example, the company should adopt productivity software that empowers employees to perform their roles in different settings including while working from home. The productivity tools should ensure that employees feel safe while using them and stress the facilitation role rather than monitoring.
To sum it up, communication is a vital component of the organization’s structure. To eliminate the fears brought about by a laid back leadership approach, the management must ensure effective communication. Effective communication ensures that individuals have clear goals and timelines, thus allowing them to set their flexible schedules. Additionally, apart from flexible working, the management should put in place mechanisms to reflect on the achievement of goals and revisit areas that require improvements. This approach will give room for exchanging views and feedback, thus ensuring that employees feel part of the organization’s decision making.
Silva, S. D., & Mendis, B. A. K. M. (2017). Relationship between transformational, transaction and laissez-faire leadership styles and employee commitment. European Journal of Business and Management, 9(7), 13-21.