Leadership is an essential factor affecting business success

By Agata Kołodyńska

Leadership is by far one of the key factors which can drive a business to either
success or fail. However, being a successful leader does not only take place in business
organizations. In fact, a leader is a person who ‘’influences to direct and coordinate the
activities of the members of an organized group toward the accomplishment of group
objectives’’ (Jagot, 1982, pg. 316). Nevertheless, we can say with confidence that without a
clear vision and strategy, role modeling and suitable employee – employer relationships,
which are by far the most important roles of any leader, the fate of any business
organization would be doomed. Thus, in this paper I wish to argue why leadership is such an
important driving factor to business prosperity. To do so, I will discuss leadership in its
different areas, such as types of leadership, personality of a leader, human relations, natures
of business that is to be guided and indeed problems which may be encountered on the way.

Type of leadership

The way in which a leader acts, behaves and guides their followers is a crucial factor
to organization success. According to research, ‘’leader is responsible for motivating
employees to embrace the organisation’s vision to achieve organizational goals’’ (Valdiserri,
2010, pg. 48). Indeed, the type of leadership approach taken in managing an organization
has a great effect on the value of the above statement. Discovered are many leadership
types, including laissez – faire, democratic or authoritarian.
Another type is a transformational leadership style. There are certain distinct
characteristics and skills which a transformational leader of a business uses to influence their
workers. It is a leader who puts human relations at the heart of all he does, feeling that such
action will result in greater business prosperity. He is also systematic in what he does and
continues to put his motivational plan all the time. His personal characteristics may include
charisma, motivation or intellectual stimulation. ‘’Transformational leaders work closely with
employees and adapt their characteristics to achieve company growth and success’
(Valdisseri, 2010, pg. 54). The pay – off of such behaviour is clearly visible in the corporate
world, for example in India. Shri B. K. became the senior divisional manager of Tanjore
Division of Life Insurance Corporation of India when the division began running into trouble
in early 2000. Trade Union in this division was very strong, resulting in low cooperation
between management and employees and lack of motivation, as well as poor performance.
To bring the sector back to its original prosperity Shri decided to implement a series of
decisions. At first, he started regular meetings with his staff to source their problems and
eventual demands. This resulted in the introduction of implementation of new technologies
to help the business develop. Lastly, when the workers’ demands were met, he told them to
‘’work with pleasure.’’ Results were almost instant. Not only did the company experience a
moral boost, but also financial perks. The division became the 1 st best growing part of LIC,
and the LIC itself took the 2nd place of growth zone in the whole of India (Balakrishnan, 2007,
pg. 66).
In contrast, according to Valdisseri, laissez – faire style of leadership is rather
ineffective. He points out that the main characteristic of such leadership style is being
uninvolved, staying out of the guidance and rather empowering employees. He believes that

© Agata Kołodyńska , First Year B.E.S.T. Student, Trinity College, Dublin Page 1
such behaviour leads to ‘’employee self teaching’’ and lack of guidance. ‘’Within such
leadership atmosphere, the organization operates by itself’’ (Valdisseri, 2010, pg. 55).
However, huge global corporations such which use laissez – faire style of leadership are
rather successful, eg. Virgin, guided by Richard Branson. Thus the link between Valdisseri’s
thinking is rather blurred.

Personality of the leader

Now I have established how the type of leadership approach taken effects business
success, but it is also vital to contemplate upon one major question – can anyone be a
leader? According to Arthur Jago, ‘’leadership is viewed as a measurable and quantifiable
property possessed in different amounts by different people’’ (Jago, 1982, pg. 316). Thus we
could establish that it would be just enough to have the much needed skills to become a
leader – but in fact possession of such are only the stepping stone to organizational success.
There are many common features of the personality of the leader, such as
confidence, charisma or determination.
Being a confident leader is by far probably one of the most important qualities any
leader should have. Not only does it help to build up a feeling of self assurance and
accomplishment of the goals, but also aids forward thinking, which in turn create visions and
goals that may later be accomplished. The dangers of not having a vision are rather self
explanatory – no vision means lack of concentration on a specific task, which puts the
organization at a very high risk of failure.
A determined leader is a successful leader. Determination reflects what the leader
wants to achieve and how he / she intend to get there (Northouse, 2009, pg. 23). It is indeed
a vital factor to ensure business success. If a leader is determined, he / she will have the
ability to overcome obstacles on their way, such as competition, economical downturns, etc.
For example, Bill Gates admits that ‘’he is driven by a latent fear that he might miss the next
big thing’’ (Dearlove, 2002, pg. 15) – he is determined to succeed, and in fact, is succeeding
today.
Another important leadership personality quality which helps to achieve business
success is being charismatic. The positive ‘’can do’’ mentality employed by a charismatic
leader is a necessity to succeeding. For example, a charismatic leader has a massive stand at
when he / she starts up their business, as they are able to sell their ideas to potential
investors, banks, to gain capital. In a business already running, a charismatic leader can
influence his workers by motivating them in a psychological way.
On top of the personality traits mentioned above, a successful leader should employ
‘’abundance mentality’’ to his style of leadership. According to Stephen Covey, such
mentality is ‘’a bone deep belief that there are enough natural and human resource to
realize my dream and that my success does not necessarily mean failure for others, just as
their success does not preclude my own’’ (Covey, 1991, pg. 157). Such mentality allows a
leader to learn to discipline himself and believe that his mission is possible to accomplish. In
addition, if workers of an organization see that their leader is positive about what he / she
does, it his highly possible that they will too be more motivated and thus more productive.

© Agata Kołodyńska , First Year B.E.S.T. Student, Trinity College, Dublin Page 2
Problems encountered along the way

Although leadership is definitely a critical factor for business success, problems encountered
along the way are inevitable.
As mentioned previously, having a vision and goals is critical to any business success.
However, it is not sufficient enough for the leader only to have a certain vision and not
communicate it down to his / her workers to be accomplished. This problem can act as a
domino effect and lead to many others, such as lack of motivation of the workers. For
example, the founders Larry Page and Sergey Brin of Google PLC made their mission
statement clear to their workers from the outset: ‘’ Organize the world’s information and
make it universally accessible and useful’’ (http://www.google.com). Only when this was
done, they then moved on to separate their business into different departaments such as
advertising, sales, human relations, etc. However, if the employees didn’t know what goal
they’re working towards, it would be rather clear that Google PLC would be nothing like it is
today.
In addition, any organisation strategy should reflect its mission statement in some
shape or form – and this is also the job of a leader. If ‘’either the stregegy is not well
developed or it ineffectibely expresses the mission statement and / or fails to mee the wants
and needs and realities of the stream’’ (Covey, 1991, pg. ) an organisation can be sure to
experience problems. The strategy, long term plan of Google PLC clearly mirrors its mission
statement. In its strategy, Google aims to ‘’put the needs of its users first’’
(http://www.davechaffey.com). Thus it is clear that the leaders of Google accomplished their
job. Today, Google PLC is the largest internet search engine, followed by Yahoo.

© Agata Kołodyńska , First Year B.E.S.T. Student, Trinity College, Dublin Page 3