Positive Leadership Styles for Organisational Performance

Abstract

The focus on globalization and multiculturalism has led to the importance of understanding organizational productivity and team effectiveness. This paper focuses on the UAE business context by evaluating and comparing leadership styles in the UAE and their effect on the competitiveness of the country. Mainly, this paper evaluates the leadership styles of the UAE from private and public perspectives. Through an analysis of four case studies and the views of experts and managers in the UAE, this paper establishes that most UAE organizations are government and family-owned. The main leadership style that prevails throughout these organizations is the authoritative and consultative leadership styles.

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However, based on the views of the respondents sampled in this paper, these leadership styles are uncompetitive in the global business environment. This paper, therefore, recommends the adoption of the participative and transformational leadership styles because they improve organizational effectiveness and competitiveness. Nonetheless, this paper recognizes the cultural differences and implications for adopting western-styled leadership and management styles in the UAE. Therefore, the management and leadership elements proposed in this study cut across the cultural divide. Through this understanding, it is crucial to mention that most leaders and managers in the UAE should appreciate the importance of change management in the standardization of local organizational practices with international standards of practice. Through the importance of change management, this paper finally proposes that UAE leaders should strive to improve their strength, by compensating for their weaknesses through the maximization of employee values.

Introduction

Many people have different interpretations of leadership. The different interpretations of leadership come from a broad understanding of the concept. In detail, leadership involves several factors including motivating people, the inclusion of people’s opinions in decision-making, and encouraging people to achieve their personal and organizational goals (this definition of leadership mainly applies to an organizational context). A leader is therefore someone who has the power and influence to affect organizational behavior. Recent interpretations of leadership and its effects on organizational performance show that leadership is a personal ability to influence employee behavior and organizational performance.

Since people participate in organizational activities to pursue personal goals, their commitment to participate in the organization largely depends on how they believe the organization will help them to achieve their personal goals (Fatokun & Salaam 2010). Conversely, many people will be committed to working in an organization that will help them to meet their personal goals and objectives. The failure to realize this outcome may affect (negatively) the employees’ commitment to the organization. Leadership styles often play an instrumental role in easing or inhibiting, the willingness of employees to contribute to organizational activities (Lieberson & O’Connor 1972). Thus, managers should search for a leadership style that resonates with employee ambitions.

The importance of leadership styles on organizational productivity does not however end on influencing employee commitment alone; an employee’s ability to harness organizational resources also largely depends on leadership management styles. Relative to this view, Timothy & Andy (2011) say, “Efficiency in resource mobilization, allocation, utilization, and enhancement of organizational performance depends, to a large extent, on leadership style, among other factors” (p. 100).

Managers and leaders who do not adapt to the changes in modern times have been criticized by people who believe they do not change as fast as the global economy does (Timothy & Andy 2011). Consequently, many organizations lag in adapting to the demands of today’s economic times. More specifically, most leadership styles fail to augur well with the current demands of a competitive global environment. As such, many businesses do not operate to their full potential. This is one challenge that faces many businesses today because they have to devise new strategies for improving their competitive advantages and stay afloat in a fiercely competitive global economy. Through this understanding, this paper brings to the fore, the importance of change management, as a strategy for businesses to cope with the demanding global environment of today. To achieve this objective, this paper focuses on change management by evaluating the influence of leadership and management styles in influencing the organizational performance of UAE firms.

Rationale

Many countries have experienced the effects of the rapidly changing globalized world, and the UAE is a part of it. International investors have especially streamed into Abu Dhabi (the capital city of UAE) to exploit the existing business opportunities that have emerged through globalization (Arabian Business 2013). The UAE has ridden on a “high” of booming oil prices and a vibrant property market to become among the most vibrant economies of the 21st century (World Economic Forum 2007, p. 1). The instrumental role of the oil sector in improving the economic prospects of the region has coupled with the equally vibrant tourism sector to sustain the economic growth of about 7% before the 2008 financial crisis started (World Economic Forum 2007). The diagram below shows the steady increase in the country’s gross domestic product from 1975 – 2009.

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UAE GDP.
Figure One: UAE GDP (Source: Arnold 2011).

The International Monetary Fund (IMF) predicts that future GDP growth in the oil-rich nation may occur in the services, tourism, and trade industries (Arnold 2011). Even though the recent global economic crisis dented the economic performance of the Emirates, very few experts contradict the view that the UAE economy is on its way to recovery (Arabian Business 2013). Economic indicators in the region also affirm this fact. For example, Arnold (2011) says that consumer spending in the UAE increased in 2012, from a 2008 all-time low. The Department of Economic Development (Dubai) has also affirmed this fact by saying that investor confidence is not the only reliable indicator of positive economic prospects for the UAE because consumer confidence has also risen in the same regard (Arnold 2011).

High oil revenues and the centrality of Abu Dhabi within the UAE have especially attracted foreign investors to the city because Abu Dhabi provides them with an opportunity to integrate within the UAE. To explain the high influx of international investors in the UAE, the United Nations conference on trade and investments (cited in Arabian Business 2013) says, “The UAE attracted US $7.68 billion of foreign direct investment from all countries in 2011, up from US $5.5 billion in 2010” (p. 11). Furthermore, according to Arabian Business (2013), UAE increased its foreign direct investments (FDI) to AED30 billion (US$ 8.2 billion) in 2012. Much of the increase in FDI stems from the Arab uprising and its aftermaths. This is because many investors withdrew their money from unstable Arab economies, such as Tunisia, Egypt, and Libya to invest in the UAE. Therefore, because of the relatively stable political environment of the UAE and the elevation of Dubai as a global business hub, many investors deem it safe to invest their money in the UAE (Arnold 2011).

From the renewed investor confidence in the UAE, many foreign enterprises have set up shop in the country, succeeded through increased market expansion, and improved profitability. For example, in the automobile industry, luxury carmaker, Rolls-Royce, has admitted that the gulf market was its best performing market in 2012 (Arabian Business 2013). In the cosmetic market, the giant company, Sephora, also reported that the gulf market was its highest selling market, globally. The success of the giant fast-food company, McDonald, also affirms this trend, when the Arabian Business (2013) reported that the company posted high growth rates of about 20% yearly. The success of these foreign businesses in the UAE informs the relatively stable growth rate of the country and the renewed vibrancy of the UAE stock market, which has hit a 40-month high in 2013. To explain the vibrancy of the stock market, the Arabian Business (2013) claims, “The publicly listed Dubai Financial Market (DFM) posted profits of AED35.2 million ($9.6 million) in 2012 after recording a loss of about AED6.9 million the year before” (p. 1).

In part, the success of the UAE economy stems from the introduction of investment reforms in the oil-rich nation. The introduction of these investment reforms has coupled with the diversification of the country’s economy and the increase in global oil prices to make the UAE a highly attractive destination for foreign investors (Al Farra 2007). Indeed, the reform of investment laws in the UAE has attracted many investors because they can have 100% foreign ownership, they do not have to pay any corporate or income tax, they incur low tariffs (about 5% for most goods), they do not experience limitations on profit or capital repatriation (among other factors) (Al Farra 2007). These legal provisions have created a fertile ground for the thriving of foreign investments in the UAE. From these favorable economic conditions, many foreign businesses have therefore thrived in the UAE

Investors have reinvested much of the assets acquired during the growth phase to further foster economic growth and diversity in the UAE economy (away from the over-reliance on the energy sector). Most of these efforts have occurred within the context of public and private partnerships to improve other equally important and lagging economic and social sectors, such as education and training (World Economic Forum 2007).

Despite the positive performance and success of the UAE economy, this paper realizes that the UAE faces crucial environmental, political, and economic challenges. Externally, the UAE faces many geopolitical challenges that have the potential to tear the national and intercultural fabric that holds the country together (USA International Business Publications 2007). These challenges also have the potential to distort the UAE’s social structures. These challenges have only dampened the spirits of economic optimists who now question the ability of the UAE economy to expand successfully into the international market (World Economic Forum 2007). The volatility of the regional and international market provides one such challenge facing the UAE’s quest to be a global economic powerhouse. Likewise, the possibility of strengthening protectionist measures to curb the excesses of globalization also shows that the future of the UAE’s economy as a global economic powerhouse remains uncertain.

Internally, the UAE faces several social and political challenges, such as the social and political imbalances that exist in the country and how policymakers may solve the associated social and economic problems (such as unemployment, skewed income distribution, and fractures in the federal framework) (Facts on File Incorporated 2008). Besides, as an offshoot of these internal problems, the UAE still faces several environmental challenges that threaten the country’s water resources, marine life, and the quality of atmospheric conditions (these environmental factors support the country’s growing population and the vibrant tourism sector) (World Economic Forum 2007).

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This paper realizes the role of leadership and management styles in solving most of these national problems. In detail, this paper relies on the fact that effective management and leadership styles may solve the environmental, social, economic, and political challenges facing the country. A key motivator for adopting this approach of the study is the instrumental role that private-public partnerships have contributed to solving some of these challenges. It is therefore unsurprising that the research questions for this paper largely take a “private” and “public” approach. Stated differently, the research questions intend to explore how government and private organizations aim to improve their productivity and efficiencies through the adoption of sound leadership and management styles.

The focus on private and public sector organizations arises from the fact that both groups of organizations usually have a different set of work ethos and organizational objectives (although their contribution is essential for the sustenance of growth in a growing economy such as UAE’s). This paper, therefore, chooses to evaluate private and public sector organizations in the UAE because they are both crucial in the development of public-private partnerships (which form part of the backbone for the development of the UAE economy). Therefore, by understanding the differences in the leadership and management styles of government and private organizations in the UAE, it can be easy to understand how local enterprises in the UAE can better improve their efficiency and competitiveness in the wake of global competition.

To this extent of analysis, this paper intends to establish how private and public organizations in the UAE plan to adopt change management as a coping strategy to new competition and how they will change their leadership strategy, in tandem with the same quest. Furthermore, by exploiting modern theories of management and organizational behavior, this study explores how modern theories of leadership and management influence the competitiveness of UAE industries.

Research Aim

To explore how UAE organizations cope with the demanding global environment through the adoption of change management

Hypothesis

UAE organizations cope with the demanding global business environment by adopting change management through their flexibility in varying human factors and mental controls to affect organizational productivity

Research objectives

  • To identify the best working practices of leadership management style in the Emirate of Abu Dhabi
  • To find out if the management style adopted by government leaders and private organizations match their strategic goals and priorities (a comparison of private and government performances suffice)
  • To recommend appropriate change management strategies for government and private organizations in the UAE
  • To establish the importance of individual awareness to higher management levels

Structure of the Dissertation

This dissertation contains six chapters. The first chapter contains an introduction to the research problem, objectives, and rationale for conducting the research. The second chapter is the literature review and it contains an analysis of previous research. In this chapter, this paper explores several issues including the concepts of leadership and culture, factors determining leadership styles and managerial approaches, best working practices of leadership and management, managerial and leadership styles adopted in the UAE public sector, and the managerial and leadership styles adopted in the UAE private sector. The third chapter is the methodology section, which underpins the methods used in conducting the research. In this section, this paper shows that the mixed research approach and the use of questionnaires and surveys comprise the main pillars of the methodology. The findings section shows the responses from the interviews, survey, and case studies. Discussions of these findings occur in the fifth chapter of this dissertation – discussion. The last chapter (conclusion and recommendation section) contains a summary of the main discussions and findings of this paper.

Research Methodology

As explained above, this dissertation is a product of the adoption of a mixed research approach. The collection of data occurred through structured questionnaires, surveys, and case studies. In sum, the interviewees and respondents included experts in the field of leadership and management and public and private sector managers in the UAE. The case studies included a balanced analysis (comparison) between UAE organizations and UK organizations.

Literature Review

Best Working Practices of Leadership Management Style

The understanding of the best working practices of leadership management style relies on the classification of leadership as the broad spectrum through which leaders interact with their subjects in the organization. Through this lens of analysis, the assertiveness of a leader, in the way he/she interacts with employees, is of special importance to this analysis. This conceptual perspective captures many aspects of leadership and management, including the philosophy of leadership that informs how leaders interact with other people in the organization and the beliefs that inform the choice of communication that most leaders adopt in the organization. Through this understanding, several fundamental questions arise in this section of the literature review including

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“What makes a leader draw people to himself or herself? Is it the leader’s intelligence or education? Does a good leader dictate, demand and punish, or do good leaders reflect the wishes of the people? Does a leader push, or attract? Does a good leader force or show people how it is done?” (Varadarajan & Majumdar 2012, p. 2).

Leadership and Culture

Experts ordinarily classify leadership styles into three distinctive types: delegation, autocratic, and democratic (Varadarajan & Majumdar 2012). These three distinct types of leadership styles mean that most leaders may choose to either involve employees in decision-making or exclude them from the process altogether. Regardless of whether leaders adopt democratic, autocratic, or delegation leadership styles, Varadarajan & Majumdar (2012) deem it crucial for leaders to appreciate the relationship between leadership styles and corporate culture as a key pillar for understanding best working practices of leadership and management. Leaders need to do so because extensive research has shown that the appreciation of this relationship has a long-term effect on influencing organizational productivity (Halldorsson 2007). This view stems from the understanding that intercultural diversity tends to diminish in a global business environment, as employees strive to “fit-in.”

At the center of this analysis are the effect of people’s cultural values and beliefs on leadership styles. Globally, research shows that different cultures and countries prefer unique leadership styles that appeal to their value systems. From this trend, Varadarajan & Majumdar (2012) say, “to lead effectively in another culture, a leader must understand the social values, customs, norms, leadership behaviour, and work-related cultural values of the host country’s workforce” (p. 2). Certainly, the effectiveness of leaders and the success of their leadership styles largely depend on the influence of culture because leadership and culture influence organizational systems as described below.

Relationship between leadership, culture, and systems.
Figure Two: Relationship between leadership, culture, and systems (Source: Varadarajan & Majumdar 2012).

The influence of culture on systems and leaderships as explained above manifests because culture mainly dictates the nature of interaction among different people. Based on this understanding, it is important to say that what constitutes an effective leader in one cultural context may fail to constitute an effective leader in another cultural context. For example, in America and most western countries, leaders who exercise democratic leadership styles and include the contributions of employees in their decision-making processes largely define successful leaders. However, in other cultures, people may view leaders who often seek the contribution of other employees in their decision-making process as incompetent and lacking vital skills of governance. The same cultural setting shows that most people view the same leaders who take charge and make decisions without consulting other employees as more effective.

Proponents of intercultural diversity say that all cultures are the same because they equally contribute to humanity (Syed, J & Özbilgin 2010). People who hold this view try to make people who are uncomfortable with the notion of intercultural diversity to believe that it is okay to have a diverse society and a leadership acumen that respects cultural diversity. Through this realization, it is unsurprising to see that many local organizations in the UAE are in search of effective leadership styles to manage diverse workforces and lead them closer to realizing their organizational goals. Indeed, research shows that a positive corporate culture and an effective leadership style may go a long way in improving employee commitment, improving organizational productivity, and improving organizational competitiveness (Baumüller 2007).

Conclusion

Comprehensively, the above analogy shows that the best working practices in leadership and management mainly depend on how culturally accepted the practices would be. It is therefore wrong to assume that the best working practices in one organizational/cultural context could apply to different situations because different organizations and societies have different value systems. It is therefore prudent to take a broader understanding that the best working practices in leadership and management should appeal to the organizational and social context.

Management Styles Adopted By UAE Government Leaders and Private Organizations

Introduction

The UAE public and private sectors are distinct from each other in terms of their leadership and managerial approaches. Both sectors of the UAE economy abide by different organizational performance standards and management acumen. However, perhaps, the most significant distinction between both organizations is the difference in purpose. In other words, the public sector mainly has the purpose of improving the welfare of the people through the provision of goods and services. However, the private sector aims to improve the welfare of the shareholders. Through these differences, this section of the literature review explores the differences in managerial and leadership styles of both sectors.

Managerial and Leadership Styles adopted in the UAE Public Sector

Many researchers have tried to investigate the unique dynamics that make the UAE public sector distinct, but few have appreciated the influence of culture in defining these managerial approaches and leadership styles (McAdam & Keogh 2013). Total quality management (TQM) and business excellence measures are a few management tools that most managers in the UAE public sector have adopted to improve the competitiveness of the sector. Researchers have shown that the application and adoption of these factors have a significant impact on the way managers lead public sector organizations (although there is a great difference between the way public sector organizations in the UAE and western organizations implement the same managerial tools) (McAdam & Keogh 2013). Many of these tools are ground in western philosophies of management and therefore pose different implications for a different cultural context such as the UAE’s. Nonetheless, researchers who have tried to investigate the impact of these cultural differences and the uniqueness of the Arab culture on leadership and management styles say that four cultural dimensions inform the leadership and management styles in UAE public enterprises.

One unique dimension of public sector managers and leaders in the UAE is their selective application of high power distance models of leadership and management. In detail, the high power distance presents a situation where there is limited upward mobility of personnel because of the existence of a caste or tribal system of association. In part, the existence of such a system creates a situation where there are very high inequalities of power and wealth within the UAE public sector. Most leaders in the UAE public sector therefore have a very profound presence of power within the organization and their decisions are often unquestioned by their subordinates. The high power distance between leaders and their subordinates also means that most leaders separate themselves from their teams (McAdam & Keogh 2013).

Another unique aspect of leadership and management styles in the UAE public sector is the presence of high uncertainty avoidance levels among most UAE managers. The high uncertainty avoidance informs why there is a relatively strong presence of bureaucracy within the UAE public sector. Strict rules, policies, and procedures are partly responsible for these bureaucracies. Public sector managers also exhibit a very low tolerance to uncertainty within the organization (Crawford 2004). The high uncertainty avoidance level has very significant limitations for the competitiveness of the public sector because it limits innovation and creativity. Similarly, the high uncertainty avoidance in the organization limits new learning within the public sector.

A close leadership dynamic that describes the attitude of most public sector managers in the UAE is a high depiction of masculinity in their leadership and managerial styles. The reliance on traditional power structures affects leadership and management styles because traditional power structures give a lot of freedom to leaders and managers to be assertive in the organization. Through the exercise of these traditional power structures, most public sector managers in the UAE tend to be insensitive and uncaring (Crawford 2004). Lastly, the leadership styles adopted by public sector managers in the UAE also show a low level of individualism. This is because most managers and leaders within this sector pledge their allegiance to the ruling family and therefore show no willingness to exercise personal preferences in the leadership styles (McAdam & Keogh 2013). Through the influence of Arab cultural norms in their leadership and management styles, it is inevitable to say that most Arab cultural practices do not fit openly with key tenets of western-styled tools of management and leadership. For example, open communication and employee inclusivity (in the decision-making process) does not augur well with the Arab culture.

Managerial and Leadership Styles adopted in the UAE Private Sector

Unlike the UAE public sector, the private sector adopts a variety of leadership and management styles. Naciri (2008) says it is difficult to isolate one leadership style that prevails in the UAE private sector. Indeed, because powerful families mainly manage most UAE private sector firms, the choice of management and leadership styles remain to be a preserve of family members. However, based on a general assessment of most private sector firms, many private sector managers adopt the consultative leadership approach (Varadarajan & Majumdar 2012). Some private-sector managers also adopt democratic leadership styles. An even smaller percentage of managers adopt the participative leadership style (Varadarajan & Majumdar 2012).

Nonetheless, because of the high prevalence of the consultative leadership style in UAE private sector organizations, Naciri (2008) says it is a common business practice for many managers in the UAE to consult with their peers. Indeed, in a country where multimillion-dollar deals occur in coffee shops and private meetings, many UAE managers prefer to adopt leadership and management styles that emerge from their consultations with family members and other people of influence (Naciri 2008). From this assessment, it is common to see many private sector leaders engaging with a close circle of people when they have to make strategic business decisions in the organization. This leadership structure closely resembles the top-down management structure where a selected group of employees have the privilege of interacting with top-level managers in making strategic choices for the organizations (Varadarajan & Majumdar 2012). In this context, the role of lower-level employees is to receive direction from top-level managers on how to implement the decisions that have emerged from such meetings.

Conclusion

Although the consultative leadership style is prevalent in most private sector organizations, some private companies in the UAE prefer to adopt western-styled leadership styles where leaders and managers make decisions democratically. In such organizations, lower-level employees have a wider space (compared to public sector organizations) of contributing to the decision-making process of the organization. Companies that have firmly embraced this leadership style prefer to seek the services of management professionals and consultancy firms in making their decisions. The number of firms that adopt this management style is however small.

Appropriate Change Management Strategies For Government And Private Organizations In The UAE

Introduction

There has been a very rapid development of different economic sectors in the UAE (including the tourism, banking, and service sectors) in the private and public sectors. All indicators show that this trend will continue in the coming years (Naciri 2008). Most of the businesses that drive growth in the UAE are family-owned businesses. Despite being successful corporate entities of the Middle East, sophisticated customer demands and increased competition from foreign firms have forced most of these businesses to adopt better and effective leadership and management styles to maintain their staff and remain in business. This need has created the importance of both private and public organizations to incorporate change management as an important business practice. This section of the literature review explores the appropriate change management strategies for government and private organizations in the UAE.

Culture and Region-Specific factors

Part of the evolving business landscape of the UAE is the diminishing number of expatriates in the private sector. The UAE government is now forcing many private enterprises to employ local people instead of importing foreigners to manage their organizations (in the quest to evolve them into global enterprises) (Naciri 2008). Before this pressure emerged, private companies enjoyed the discretion of employing whatever caliber of employee they wanted, without any repercussions. This leeway informs why the number of expatriates in the UAE almost surpasses the local population. The change of this trend is also in tandem with nationalistic pressures, which demand a more local presence in private firms. The nationalistic pressures have created a crisis of leadership and management because it has pit local leadership styles against foreign leadership styles. However, in today’s globalized society, the importance of employing leaders who appreciate cultural diversity causes little dispute.

Appreciating intercultural diversity forms the background for the adoption of the best working practices in leadership and management. Concisely, it is crucial to adopt the best working practices in leadership and management to improve organizational productivity. However, according to Crawford (2004), the adoption of management best practice depends on many factors including, “The nature of the task, the power available to the leader, the experience of the subordinates, the culture of the organization, the preferred style of the leader, the style preferred by subordinates and time available for task completion” (p. 62).

Based on the diversity of leadership styles and the factors that affect this diversity, Alkhafaji (2001) says that organizational patterns and individual characteristics influence the choice of leadership for most leaders. Results of cross-cultural studies show that many countries have different cultures that affect their leadership styles, but most Arab countries are unique to western countries because the Arab culture has unique attributes that set it apart from other cultures. For example, most Eastern countries differ from western countries because families mainly run their organizations. This phenomenon is not unique to Arab countries because Naciri (2008) says families also own most organizations in Taiwan and South Korea.

This type of ownership structure means that most promotions within the organization largely depend on the closeness of family ties (Naciri 2008). Family-run organizations “tend to be paternalistic, promote the values of high power distance and collectivism, and have bureaucratic control and centralised decision-making with little worker empowerment” (Crawford 2004, p. 62). Few researchers who have investigated leadership styles in many Asian societies dispute this view by saying that many Arab countries have a collectivist pattern of management (Crawford 2004). Comparatively, shareholders own many companies in western countries and professional managers run them (Lussier 2009). Unlike many UAE companies, western companies promote employees when they demonstrate dedication and commitment to the organization. Besides these dynamics, many western organizations are, “flat in structure, less bureaucratic, promote individualism, decentralised decision-making and more empowering to their workers” (Crawford 2004, p. 62).

Many cross-cultural studies in Asia and the Arab world paint a situation where there is no predominant leadership style in many such countries (Crawford 2004). For example, such studies show there is an absence of a predominant leadership style in Hong Kong organizations. However, the same studies show that there is an increased prevalence for many Asian managers to use participative and directive leadership styles (Crawford 2004). Studies that are more specific to the Arab world show that many managers in the UAE prefer to use the consultative leadership style (Lussier 2009). The same outcome is true for Arab gulf executives. Comparatively, researchers who have investigated the dominant leadership style in Jordan say that Jordanian managers prefer to use the authoritarian leadership style.

Broadly, many studies that have investigated the leadership styles for Arab managers show that many managers tend to prefer the participative and consultative leadership and management styles (Crawford 2004). The choices of these leadership styles show that Islamic virtues and beliefs are present in their choices of leadership style. The choice of leadership style and its effectiveness in improving organizational competitiveness depends on several factors, some of which manifest in this paper, like culture and the nature of business.

Conclusion

Based on the findings of this paper, region-specific factors mainly determine the change management strategies that are appropriate for UAE organizations. Few differences exist between the factors that affect the adoption of change management strategies in both the private and public sectors. Both sectors are therefore affected by cultural factors, the nature of business (mostly in the private sector), and the influence of other organizations in the industry (best practices as adopted by expatriates). Comprehensively, these factors influence the adoption of change management strategies for the private and public sectors.

Importance of Individual Awareness to Higher Management Levels

Introduction

Many researchers have written about the effect of leadership and management styles on organizational performance (Iqbal 2011; Varadarajan & Majumdar 2012). Regardless of the contents of their narratives, there is a consensus among them that depicts the existence of trade-offs in the adoption of leadership and management styles. Through this analogy, it is correct to say that the choice of leadership styles and managerial approach is a critical component for the success of most organizations (Halldorsson 2007). Leadership styles, under their contribution to organizational success, symbolize a special component of leadership as a discipline. However, the understanding of leadership as a discipline hinges on the understanding of individual awareness to higher management levels.

Individual Awareness and Personal Responses to Organizational factors

The influence and effect of leadership styles on organizational performance has gripped many researchers, such as Franklin Covey (cited in Varadarajan & Majumdar 2012), who said, “Great leaders know how to create great teams, and a great team produces great results” (p. 1). Through such statements, many people have explored the factors that affect the choice of leadership within different organizational contexts. From this curiosity, many people believe that most managers adopt one leadership style, but according to Randeree & Chaudhry (2007), it is often rare to find managers relying on only one leadership style. Since studies to investigate factors that affect leadership styles are dynamic, Tannenbaum & Schmidt (1958) say that three factors affect leadership styles – characteristics of the leader, attitudes of the subordinates, and the attitudes of other stakeholders in the organization. Through the same scope of analysis, Randeree & Chaudhry (2007) say leadership styles are affected by the following factors, “level in the authority hierarchy, function of the organizational unit, the size of the organizational unit, task characteristics and technology, lateral interdependence, crisis situation, stages in the organization Lifecycle and, finally, subordinates’ competence and performance” (p. 222).

Relative to the above views, Herbert (1981) believes that the choice of leadership is a function of several factors including the need to participate, level of commitment, and the importance of supervision in affecting the outcome of organizational tasks. Close to the factors that affect the choice of leadership are the factors that affect the mode of decision-making in the organization. According to Randeree & Chaudhry (2007), several factors including, “the context of the organization, the characteristics of the organization, the nature of the decisions and the attributes and preferences of the decision makers” (p. 222) affect managerial approaches in organizations. The nature of organizational objectives also significantly affects the choice of leadership in the organization because the relative sense of difficulty, or ease, of completing organizational tasks also affects the choice of leadership style in an organization. To explain this statement further, Randeree & Chaudhry (2007) believe that,

“The choice of leadership style depends on the nature of the task, the power available to the leader, the experience of the subordinates, the culture of the organization, the preferred style of the leader, the style preferred by subordinates and time available for task completion” (p. 222).

The types of human values that are present in society also significantly affect the choice of leadership style. Two categories explain the main classifications of human values – outer-directed (associated with tribalism, conformism, and socio-centric values), inner-directed (associated with egocentric, manipulative, and existential values) (Randeree & Chaudhry 2007). Outer-directed managers are very flexible in their managerial styles because they easily adapt to rules and procedures. This group of managers also tends to prefer stability by managing their organizations depending on what other people say. This way, they do not have a concrete plan for themselves. The inner-directed manager differs from the outer-directed manager because he always needs to change his internal dynamics for the better. This way, such groups of managers normally set goals for their organizations and motivate team members to pursue them with zeal (Randeree & Chaudhry 2007).

Besides the human values that affect leadership styles, the empowerment of employees through the existence of hierarchical power in the organizational structures of governance also affects leadership styles. In other words, the empowerment of employees through these leadership structures has a significant impact on the nature of leadership styles that most leaders will adopt in the organization. One significant repercussion for this type of employee empowerment is the increased vulnerability of leaders to employee conduct because leaders depend on employee performance to “look good” (in a hierarchical organizational structure). By trying to reduce this vulnerability, managers only work to make the organization equally vulnerable. According to Weislowski (2010), such a situation leads to the development of an open organizational culture. This type of organizational culture is very common in postmodern cultures. In fact, according to Varadarajan & Majumdar (2012), the post-modern organizational culture would often fail if leaders did not adopt an open organizational culture. An understanding of leadership styles closely relates to the understanding of organizational cultures because Varadarajan & Majumdar (2012) say, leadership styles evolve depending on the conceptions of cultures within the organization.

Conclusion

Many researchers have understood culture as an item to differentiate the internal dynamics of an organization because an organization’s culture is often the main driver of employee socialization. Within the context of employee socialization, leaders have a very important role in defining how people understand society. Some leaders use their influence and leadership positions to exert authority and influence within the organization, while others use the same platform to motivate employees. Many organizations admire the latter scenario because leaders should use their positions to maximize productivity and improve organizational effectiveness (Crawford 2004).

Methodology

Research Design

The main research approach of this paper is the mixed approach (quantitative and qualitative approaches). This study chose this research approach because philosophical and contextual approaches were crucial in coming up with reliable findings in this paper (D’Amico 1969). For example, philosophical dynamics were important in this study because the philosophical underpinnings of organizational control informed the leadership and management styles used in this paper. This study also adopted the use of paradigms to explain these philosophical underpinnings because philosophical underpinnings provided an opportunity for the respondents to be self-analytical about their intellectual views on leadership and management. The leadership and management paradigms, therefore, outlined a convenient way of creating a mental framework for the conception of social theories. Through this analysis, it was easy to understand the personal frames of reference concerning social theories. Thus, it was equally easy to understand how certain social theories appealed to some managers, while others did not. The quantitative approach of the research design mainly referred to the collection and sampling of the respondents’ views. Through this approach, I found it easy to compare the findings of different respondents.

Data Collection

The main data collection process for this paper was online questionnaires. Nine respondents received the questionnaires as survey questions to explore their views regarding the research topic. Initially, the research was supposed to include the views of ten respondents, but one respondent failed to submit the online questionnaire in time. His submissions were therefore not included in this study. This study used online questionnaires because it was easy to reach the respondents this way, as opposed to physically carrying out the research. The online questionnaires also provided some benefits to the research process because it was relatively cheap and easy to administer. Besides, since the questionnaires were structured, there was little room for the respondents to provide inaccurate or incomprehensible information. Moreover, it was difficult to capture erroneous data because the programming system (of data entry) would exclude it. These advantages improved the quality of the responses obtained through the survey. The survey participants were experts in leadership and management. The experts came from five consulting firms that operated in the UAE or had experience concerning leadership management in the UAE. To have a more reliable sample of respondents, the experts had to have had more than five years of experience in leadership and management consultancy activities in the UAE.

Besides the questionnaires, this paper also used structured interviews (with a set of five questions) to explore the views of UAE leaders regarding the research question. There was a deliberate attempt to provide a balanced mix between public sector managers and private sector managers to have a more comprehensive understanding of the research questions (the scope of the research questions spanned across the private sector and public sector enterprises). The structured interviews provided some benefits to the research process because it allowed the researcher to evaluate a respondent’s level of understanding regarding the research topic. The structured interviews also provided an opportunity to assess the respondents’ readiness to answer the survey questions (see appendix one). This way, it was easy to get a greater depth of information regarding the research questions. The possibility of asking the same questions in structured interviews also provided the researcher with an opportunity to gather standardized responses for easy comparability. The same ability also saved time by engaging many respondents at one time.

One potential drawback to the use of the structured interview is the high dependability on the quality of questions asked. Moreover, before conducting the interviews there a lot of time used to prepare for the interviews. Lastly, the predetermined format of the structured interviews made it difficult to exploit interesting questions in more depth. For example, even when I used open-ended questions, the set of responses given were very limited. This is the reason D’Amico (1969) says structured questionnaires possibly provide the highest level of limitations to responses, compared to any other data collection method. Lastly, this paper also used case studies to explore the validity of the responses obtained through the interviews and the survey. In sum, there were four case studies sampled in this paper. To have a broader understanding of the differences in managerial and leadership styles between the UAE and other western countries, this paper adopted a balanced approach of sampling the case studies by investigating two cases from the UAE (Emirates Airlines and Al Masaood and Sons Company) and two more cases from the UK (Tesco and National Health Service – UK).

Data Analysis

Theories and models of leadership and management provided the correct framework of analysis for the research findings. Notable theories and models that provided the analytical frameworks include contingency theory, charismatic theory, and transformational theory. In detail, the researcher analyzed the findings of the paper to see how they conformed or differed with existing leadership and management theories (with an emphasis on how such organizations could improve their leadership effectiveness). On a larger scale, this analysis fits in the research objectives of the study. Lastly, this paper also relied on constructivist ontology and an interpretive epistemology to comprehend the views of different respondents sampled in this study.

Ethical Considerations

Since this paper included surveys and interviews, there were different ethical implications concerning the paper. For example, before participating in the study, the respondents knew that the researcher would uphold confidentiality throughout the research process. For example, there was no mention of the names and identities of the researchers throughout the research process. The respondents also understood that the researcher would only use their contributions for academic purposes. Regarding the inducement to participate, all the research participants included in this study chose to contribute to the research process voluntarily. There was no coercion or deceit to make any of the participants contribute to the study. Moreover, there was no financial incentive given to the participants to participate in the study.

Findings

Survey Findings

Across all the respondents surveyed in this study, there was a consensus that most UAE organizations were not adequately prepared to compete with other global enterprises. This belief also informs why all the respondents said they did not think local enterprises were equipped to manage the global competition. Indeed, all the respondents surveyed in the study said that UAE organizations were ill-equipped to compete with foreign companies in the provision of goods and services. When the respondents needed to explain why they believed local enterprises could not compete with foreign enterprises, their responses varied across three reasons – poor leadership, poor management, and the failure to include employees in the decision-making process.

Stated differently, a third of the respondents believed that poor leadership was responsible for the relatively weak performance of local enterprises in the UAE and another third of the respondents said poor management explained this phenomenon. In the same regard, a third of the respondents believed the failure of UAE leaders and managers to include lower-level employees in their decision-making processes explained why local enterprises were uncompetitive. The small sample of respondents who said the failure to include employees in the decision-making process also polled that collective responsibility was very important in improving the competence of most UAE organizations. The rest of the respondents believed that collective responsibility was either important or averagely important in improving the competitiveness of an organization.

Many researchers affirm the views of this group of respondents by saying that including employees in the decision-making process of an organization improves employee participation and organizational performance (McAdam & Keogh 2013). For example, by including employees in the decision-making process, managers in both the private and public sectors may easily ease the adaptive community change and improve organizational effectiveness in the same regard. Through the same process, employees will also feel respected and important in the organization. Therefore, they are likely to improve their organizational commitment and productivity in the organization. This way, organizations may enjoy improved collective productivity. The same philosophy that explains the benefits of employee inclusivity also explains the philosophy behind collective responsibility and its role in improving organizational productivity and effectiveness.

The concept of collective responsibility does not explain the efforts that every member of the organization contributes to the organization’s success, but the shared level of responsibility that all members of the organization experience because of the successes or failures of the organization as well. The concept of collective responsibility also largely explains how organizations can increase their competitiveness because it improves the quality of human resources in the organization (Crawford 2004). In an environment where employees share the failures of an organization, all the employees would be willing to support one another to ensure the organization succeeds. This collective sense of success and failure appeared to lack among most local UAE enterprises.

When asked to rate the effectiveness of management operational plans for public organizations, 60% of the respondents said the management operational plans for public organizations were averagely effective in meeting their organizational strategies. The rest of the respondents polled that the effectiveness of management operational plans in the public sector was good. Interestingly, no respondent believed that the effectiveness of management and operational plans in the public sector was “bad” or “very bad.” When the respondents needed to explain the same question regarding the performance of the private sector, they reported a relatively positive performance of the private sector, compared to the public sector. In detail, the respondents said the effectiveness of management operational plans for the private sector was either “good” or “very good.” Only one respondent said the effectiveness of the operational management plans for the private sector was average. The positive rating of the private sector, viz a viz the public sector, stems from previous research which shows that the private sector is more flexible and dynamic in adopting change management, as opposed to the public sector. This view does not however mean that the public sector is completely unresponsive to modern changes. The level of adaptation is the only difference that informs why the public sector gets a more positive rating concerning change management, as opposed to the public sector.

To explore the views of the respondents regarding the importance of participative leadership and its implications on local enterprises in the UAE, 90% of the respondents rated the influence of the participative leadership style at 5/5. The rest polled that the influence of the participative leadership style is affecting the performance of local enterprises as 4/5. The ratings showed that the respondents believed the participative leadership style would have a positive impact on improving the competitiveness of UAE organizations. When the respondents needed to explain if culture was important in defining the leadership styles of UAE companies, the responses varied between “important” to “very important.” A third of the respondents believed that culture was important in defining the leadership styles of UAE managers, while two-thirds of the respondents said culture was very important in defining the leadership styles of UAE managers.

Interview Findings

To understand the context of the interview and the goal of establishing how public and private sector organizations can improve their competitiveness through effective leadership and management styles, the interviewees needed to state if they believed UAE companies were prepared to manage the pressures of globalization. Most of the interviewees said many UAE organizations were unprepared in this regard, but a few progressive enterprises were equipped to compete with foreign companies in the global business environment. Compared to the responses received from the survey, the interviewees painted a more positive outlook regarding the level of preparedness that UAE organizations demonstrated in competing with other foreign enterprises in the region.

Besides understanding the level of preparedness that UAE organizations demonstrated in the global business environment, change management was a critical issue that informed the interview process for this study. When the responses were needed to suggest the most appropriate change management strategies that UAE organizations should adopt, six interviewees proposed that UAE managers should align their organizational strategies to adapt to changes in the business environment, as opposed to maintaining an organizational culture that resists change. Three respondents proposed that UAE organizations should promote staff effectiveness as a strategy for coping with change in the organization. These respondents believed that a company’s employees were the main drivers of organizational competence and therefore managers should pay close attention to the adaptation to change. They believed that if employees were more adaptive to change, the organizations would equally adapt to changes more effectively. When the interviewees needed to suggest the more desirable working practices for UAE organizations, seven of the respondents said, UAE managers should show more empathy in their leadership style. They elaborated that the managers should relate more (emotionally) with their employees and try to let them know that they care for their employees as well. One respondent expressed frustration by saying that most UAE managers do not listen to their employees as much as they should. He further reiterated that,

By failing to listen to their employees, I believe many managers in this region miss the opportunity to influence, truly, their subjects. You see…many at times, managers here believe that by exerting absolute control of their employees, they have a more positive impact on the organization. I believe this is a wrong approach. In my view, I see these attempts as a way of nurturing defiance in the organization”

Another respondent said that most UAE managers cannot communicate effectively with everybody in the organization. Yuen (2005) supports his view by saying that most managers who fail to adopt the best communication strategies miss the opportunity for creating trust and nurturing a sense of openness in the organization. Organizations that suffer from this problem therefore equally suffer from the lack of effective communication in the organization, thereby leading to ineffective communication in the workplace. Relative to this assertion is the fact that most managers who fail to adopt the right communication strategies in the organization equally suffer a high probability of failing to motivate their employees because the employees would not understand what they want. Lastly, one respondent said that UAE managers should learn to live by example and not expect other employees to do what they want if they fail to provide the right example for doing the same. Indeed, it is unsurprising that many employees usually learn by example and follow the verbal and non-verbal indications that their leaders show. In this regard, leaders have the duty of creating a positive environment for learning in the organization and inculcate the same attitude in their behaviors.

To understand the differences in management and leadership styles of private and public sector firms in the UAE, the responses said that the failure to link employee performance to organizational performance was perhaps the greatest problem facing public sector firms. The respondents believed that many local enterprises in the UAE were family-owned and government-owned. Because of the leadership styles adopted by these organizations, the closeness to the ruling class or the ruling family informed employee promotions and ascension to power. Most of the respondents therefore believed that this leadership style compromises the effectiveness of such organizations because employees work to please their masters, as opposed to making the organization succeed. Compared to these findings, many of the respondents said that private organizations had a more flexible leadership structure that accommodates change and adapts to modern organizational pressures. Therefore, unlike public organizations, private sector organizations were more receptive to the notion of change management. Therefore, the respondents believed that public sector organizations were less equipped to manage modern organizational pressures. Albeit most of the respondents believed public sector organizations were less attractive, compared to private organizations, one respondent said private sector organizations were uncompetitive to foreign firms because they have an authoritative leadership style. In detail, one respondent said,

I do not believe private sector organizations in the UAE are effectively prepared to compete with foreign organizations because even though they try to show the rest of the world that they adopt international leadership and management standards, they remain rooted in traditional models of governance. There is little employee contribution and respect within such organizations and people often feel inclined to please their masters, as opposed to being innovative and pursuing personal thoughts. In fact, in some organizations, doing more than is required could be regarded as disobedience and lack of respect”

When the respondents needed to explain the extent that UAE leadership standards should emulate western-styled models of leadership, there was a consensus among all the respondents that it was unwise for UAE leaders to adopt (blindly) western-styled management and leadership styles. The respondents believed that the UAE posed unique political and social dynamics that influence the effectiveness of leadership styles. The differences in culture especially surfaced as the first reason why UAE managers and leaders should not blindly adopt western-styled leadership styles. To support this view, one respondent said,

A copy and paste system would not work in the UAE. The Arab culture is very dominant in the UAE leadership sphere. Western-styled leaders tend to rely on a different philosophical understanding that does not resemble our local approach to management or leadership. Therefore, adopting western-styled leadership approaches should be done with a lot of care.”

Comprehensively, the interviewees believed that there was a big difference between eastern and western perceptions of leadership. They, therefore, suggested that a contextual approach to the adoption of western-styled management and leadership styles should prevail as UAE enterprises strive to modernize their leadership and managerial approaches.

Case Study Findings

Tesco

People consider Tesco to be among the most successful retail giants in the UK (Humby & Hunt 2008). Heralded by the appointment of Terry Leahy, the former CEO of the company, Tesco rose to be among the most successful retail stores in the UK with up to 2,320 stores around the world (Haerifar 2012). Leahy has been instrumental in supporting Tesco’s journey from a mid-level retail store to the successful enterprise it is today. Among the most common successes for Leahy was his ability to improve the company’s customer-sensitivity and customer satisfaction. The former CEO managed to achieve these objectives by developing the company’s workforce to represent customer-centered values. When interviewed by Management Paradise (2011), Leahy said that four components informed his success in transforming his human resource – offering a job that was interesting to do, providing employees with an opportunity for advancing their careers, treating all employees with respect, and proving the employees with a helpful boss, as opposed to an organizational figure who intimidates them.

If we evaluate the five most common bases of power (coercive, reward, expert, legitimate, and referent powers), it is easy to point out that Leahy’s power base stemmed from legitimate power, expert power, and referent power (Management Paradise 2011). The exercise of legitimate power stemmed from the CEO’s legitimate position as the head of the organization and his ability to command respect from other people in the organization. The expert power came from Leahy’s ability to be the main center of skill and knowledge regarding the running of the organization. This way, many people in the organization preferred to consult him whenever they wanted to make an important decision. Leahy’s expert power traces to his entry-level position as a marketing executive, after completing his college degree in 1979 (Management Paradise 2011). In 1992, Tesco promoted him to be a member of the company’s board of directors. Five years later, Leahy proved that he was fit to head the company as the CEO. His many years in the company therefore made him extremely knowledgeable about the company’s activities and the management of each department. Leahy’s referent power stems from his interpersonal skills and charisma within the organization. These leadership qualities made him a popular leader not only within Tesco but also throughout the country.

Besides Leahy’s basis of power, it is important to show that he has always used the participative leadership style to motivate his employees and promote organizational growth. Through the same leadership approach, Leahy proposed that Tesco should change its organizational structure to have many managers heading different departments (Management Paradise 2011). Through this approach, Tesco’s organizational structure became flat. Furthermore, through the same organizational structure, Leahy delegated different roles to different managers, with clearly stated roles and duties.

Since Leahy’s leadership style was very profound in the organization, all middle-level managers also replicated the same leadership style in their departments. This situation created an organic system within the organization where there was a moderate application of rules and regulations (Humby & Hunt 2008). Stated differently, there was a low to moderate application of formal rules within the organization and a flexible structure of authority for most departments within the organization. Many researchers have supported the organic system for organizations that want to be innovative and competitive (Humby & Hunt 2008). This stipulation meant that Tesco improved its innovativeness and competitiveness throughout Leahy’s tenure. To explain further the implications of the organic system, Management Paradise (2011) says,

“Organic organizations are stratified primarily in terms of expertise, and leadership accrues to those who are the best informed and capable. There is much more commitment to the organization, because formal and informal systems become indistinguishable. A framework of values and beliefs, much like those characterising a profession, develops and becomes an effective substitute for formal hierarchy” (p. 6).

Through the contributions made by Leahy, it is correct to say that Leahy’s transformational leadership model transformed Tesco to be the successful enterprise that it is today. Nwagbara (2010) argues that much of Leahy’s contribution to Tesco occurred in this sense of leadership, as opposed to management. Indisputably, one distinctive attribute of his leadership style is the high appreciation for the effort that the customers and employees contribute to the organization. Broadly, Leahy’s leadership style draws our attention to the fact that there exists a thin line between leadership and management. Leahy’s focus, therefore, skews towards promoting effective leadership, as opposed to effective management. Leahy’s approach to leadership and management also closely resembles the attitude of Bennis (1994) who believed that leadership and management differed on the premise that leadership mainly focused on “doing the right thing, while management centred on doing things the right way” (p. 34). Peck and Dickinson (2008) do not have a very different opinion from this view when they argued that management mainly involved transactional leadership, while leadership involved transformational leadership. Based on this assessment, Leahy’s leadership style was mainly transformational. In this regard, it is pertinent to explain what transformational leadership entails. Burns (1978) explains that,

“At the core of the formulation of transformational leadership is the concept of transformation, a change with variation in performance, productivity, and management that brings about a break from the norm, as well as a marked departure from the existing leadership structure. It also brings about motivation amongst the people in a manner that produces leadership by consent rather than coercion” (p. 34).

The transformational leadership model has played a critical role in changing the fortunes of Tesco PLC because it has elevated the motivation and morality of its employees and customers to new heights.

National Health Service

The UK National Health Service is a publicly funded health care institution that caters to the healthcare needs of UK citizens. The government founded the institution in 1948 and now employs close to 2,000,000 people (Broad Vision 2013). The institution caters to several healthcare needs of UK citizens including “everything from antenatal screening and routine treatments for long-term conditions, to transplants, emergency treatment, and end-of-life care” (Broad Vision 2013, p. 2). In the last decade, NHS has posted a positive performance record after independent researchers affirmed that many UK citizens were largely satisfied with the quality of services offered by the organization. In part, the positive performance of the institution traces to the reduction of mortality rates and the increase of life expectancy in the UK (brought by the introduction of improved health care services by NHS) (Davies 2007; Yuen 2005). Independent ratings to evaluate the performance of public healthcare institutions in developed countries like Australia, Netherlands, New Zealand, and Canada also affirmed the above positive record when they said NHS posted the most impressive customer satisfaction record among all the countries sampled (Broad Vision 2013). The organization received positive ratings because customers rated it as the most efficient and effective public health care institution among the countries sampled (Broad Vision 2013).

At the core of the NHS’s impressive record is a vibrant leadership style that addresses the needs of the healthcare institution. Research evidence shows that the most applied leadership style at NHS is the transformational leadership model. At the core of its application is the belief that leadership is not a privilege of managers (merely because they hold designated management roles). Instead, the transformational leadership model strives to create a sense of collective responsibility for everybody in the organization (Bass & Riggio 2012). Unlike most organizations, leadership at NHS is the responsibility of anybody in the organization. There are no provisions that uniquely allocate leadership responsibilities to a selected group of people within the organization. Consequently, every employee has the responsibility of demonstrating admirable leadership qualities. Designers of the NHS’s model of leadership, therefore, intended it to promote a sense of shared responsibility for everybody in the organization (this factor is the main reason touted for the success of the organization) (Broad Vision 2013. The organization’s leaders strategically chose this leadership model because it was highly appropriate for the healthcare sector, where employees faced highly complex and interdependent tasks.

By creating a sense of shared purpose for all employees at NHS, the organization’s leaders strive to demonstrate that they are committed to embracing change management by creating a more intimate meaning of change in the organization. This way, the leaders are more interactive with the values of change management and strive to make everybody remain committed to action. Through the commendable efforts to improve the level of commitment within the organization, the leaders consequently work to improve the scale and pace of organizational efficiency. Comprehensively, NHS demonstrates that it remains committed to change management by adopting a leadership for change model and ensuring that everybody within the organization has an opportunity to participate in the change process. In sum, NHS (2013) says, “Leadership for change – however large or small the change – underpins all aspects of the Change Model” (p. 8).

Emirates Airlines

Since 1985, Emirates Airline has been a dominant airline company in the Gulf region (Murray 2013). The airline company has earned the reputation of being the largest airline company in the Gulf region and possibly the fastest growing airline company in the world (Murray 2013). Around the world, Emirates Airline serves close to 170 destinations that span over six continents around the globe (using a fleet of about 130 aircraft) (Grand 2013). For all the years, since the inception of the company, Rehbein & Fierlings (2006) explain that Emirate Airline has never recorded growth rates of less than 20%. Besides, for two years after its inception, the company has always posted annual profits. Even though many of the Emirate’s managers and leaders have worked for the company since it started a business, they have not used their positions, or experience, to dominate other employees in the organization (Murray 2013).

The leadership strategy adopted by Emirates Airline is mainly democratic (Rehbein & Fierlings 2006). This leadership style has helped the company to overcome some of the most pressing challenges that the company has faced (especially stiff competition from other established airline companies). Through the democratic leadership style, managers of Emirates Airlines have found it easy to motivate their employees and make them more customer-focused (this approach closely resembles the dominant leadership approach of Tesco’s managers). This leadership style explains why the company treats every employee equally, although most organizations in the UAE do not do so. Therefore, unlike many UAE organizations that do not promote equal opportunities for progression and career development, Emirates Airline strives to treat all employees equally and fairly. Furthermore, unlike many public sector organizations that discriminate against employees, based on the gender of their employees (in the recruitment and selection process), Emirates Airline provides an equal opportunity for all employees to work for the company (Leadership Academy 2013).

A key component of the Emirates’ management approach is the adoption of change management as a strategy of adapting to the unpredictable dynamics of the aviation industry. Part of the company’s change management approach has been the development of its information technology platform to improve the airline’s services to its customers. The development of the company’s information technology platform has also helped the organization to increase the diversity of its workforce by employing people from different cultures. Today, Emirates airline boasts of having a highly diverse employee pool of about 160 nationalities (Rehbein & Fierlings 2006). This approach has helped the organization to improve its service record by having a diverse workforce that better response to customer needs. According to Jones (2012), the company’s steadfast management adaptation to the modern business environment has helped Emirates Airline to build a highly diverse workforce that has bagged more than 190 awards globally and made a name in the aviation industry for offering the best services in the sector (Jones 2012).

Even though the Emirate’s management approach and leadership styles seem not to differ from the western-styled approaches on the same, it is pertinent to say that the airline has managed to attract Arab customers from around the world. Indeed, albeit the airline company adopts western-styled leadership styles, it still appreciates the fact that it is an Arab Airline Company and subscribes to the Middle Eastern culture. One unique appreciation of its culture is the availability of Middle Eastern food on the airline’s menu (Rehbein & Fierlings 2006). Although Arabic culture seems dominant in its service offing, the Emirates has attracted customers from different religions, and ethnic groups.

Abdulla Al Masaood & Sons

Abdulla Al Masaood & Sons Company is a family-owned business in the UAE. The diagram below is a depiction of the company’s logo.

 Abdulla Al Masaood & Sons Company Logo.
Figure Three: Abdulla Al Masaood & Sons Company Logo (Source: AMS Group 2013)

Abdulla Al Masaood & Sons Company is among the oldest family-enterprises in the UAE with a successful record in trade investments (AMS Group 2013). Beginning from the ancient pearl trade, Abdulla Al Masaood Company has rapidly diversified in the last 150 years and now boasts of having more than 20 associated companies (AMS Group 2013). At the helm of the company’s leadership is His Excellency Abdulla Bin Mohammed Al Masaood who receives assistance from several family members, among them being the sons of The Late Ahmed Bin Mohammed Al Masaood (AMS Group 2013).

The leadership of Abdulla Al Masaood & Sons Company has largely been dependent on command and control leadership structures. Indeed, at Abdulla Al Masaood & Sons, the employees always experience directing and paternalistic leadership styles where leaders and managers give directions on how the employees should undertake their duties (Reagan 2011). In turn, the employees are supposed to carry out the directives as issued by the management, without fail. Here, people perceive the lack of a clear directional guide to the organization’s activities as a sign of weakness on the part of the managers (Reagan 2011). At best, people will see the lack of leadership as a sign of confusion within the organization. Since this leadership style is the most prevalent, many outsiders may see leaders of Abdulla Al Masaood & Sons Company as rude or overly abrupt.

Nonetheless, when evaluating the leadership style of family-owned businesses like Abdulla Al Masaood & Sons, it is important to understand the role of leaders as “fathers” and the employees as “children.” Usually, in this type of leadership structure, the father tells the children what they should do and the children need to follow what the “father” says (Naciri 2008). Even though the leadership of the family is directional, they also take good care of the “children.” This relationship is usually two-way traffic where the employees show respect to the leaders and they benefit in the same regard, through leadership and promotions.

While this leadership style has proved to be largely successful for Abdulla Al Masaood & Sons, its leadership now expresses reservations regarding its ability to guide future company operations. The company says, “The model has been working very well but we believe the next few years are going to be very competitive” (Reagan 2011, p. 2). Because of the potential increased competitiveness in the business environment, the company’s chief executive says, “So if we do not have our act together, we are going to miss new global opportunities” (Reagan 2011, p. 3).

Data Analysis

Based on the findings of this paper and the differences in the leadership styles between public and private sector organizations in the UAE, it is pertinent to say the aims of public and private sector organizations are often different. While the push to make a profit motivates the private sector, the provision to provide public goods and services motivates the public sector. This objective informs some of the main goals of the UAE public sector because it is required to provide goods and services to its citizens who pay taxes and fund their activities. Based on the leadership approaches of the public and private sectors, it is also correct to say private organizations are mainly answerable to shareholders or equity holders, while public organizations are answerable to the taxpayers.

The leadership styles of public and private sectors need to demonstrate how they complement the achievement of their goals. However, since this paper establishes that the UAE public sector mainly adopts a top-down leadership approach, it is very difficult to establish how such a leadership style complements the achievement of public sector goals – the provision of goods and services. This leadership management style sharply contrasts with the transformational leadership style, which largely complements change management (Hesselbein 2004).

Transformational Leadership

Unlike the top-down management style and the authoritarian leadership style that most UAE organizations seem to adopt, the transformative leadership and management style seeks to motivate employees and encourage them to be part of the process of organizational success. Since this leadership model seems to lack in most UAE organizations, it is correct to say that transformational leadership is the best strategy for UAE managers to transition with the times and become more effective. In my view, many UAE managers fail to guide their employees to organizational success because they believe, under being at the helm of an organization, they will automatically command respect from all employees. Even though some employees may pretend to do so, their position only denotes “title” and does not give them the moral authority of being leaders.

Since most employees and managers in the UAE have experienced a relatively peaceful period of success, guided by traditional models of governance, transformational leadership will help them to change with the time and become more useful in today’s demanding business environment (Watkins 2008). Managers of UAE organizations (in both the private and public sectors) can take a step closer to achieving this vision by first valuing their employees. History litters with evidence of many managers who have demonstrated that valuing their employees helps to improve the productivity of the organization. One such illustration is the frequent visit by Wal-Mart’s manager, Sam Walton, to Wal-Mart’s stores. Walton became accustomed to visiting most of his stores and having a chat with his employees to show them how much he appreciated their work (Watkins 2008). Although this paper cautions against blindly adopting western-style management and leadership styles, it is pertinent to mention that valuing employees is a virtue that transcends all cultures. Therefore, it would be appropriate for leaders of all cultures to value their employees.

While it is important to demonstrate the importance of employee contribution to the organization, it is equally important to show that transformational leadership holds four key components that should equally inform the transition of Arab managers – “idealised influence, inspirational motivation, intellectual stimulation, and individual consideration” (Watkins 2008, p. 22). The concept of idealized influence should help managers become role models for other employees in the organization (by adopting the best work practices). Employees find it is easy to trust this group of managers. Inspirational motivation closely relates to the concept of idealized influence because they both strive to improve employee productivity through commendable leadership approaches. However, the inspirational leader differs from the influential manager because, as opposed to providing the right example for other employees to emulate, they try to encourage employees to be committed to the vision of the organization.

A different group of leaders, who adopt transformational leadership, does so through intellectual stimulation. This group of leaders normally prefer to question the status quo by questioning the value and belief system of employees in the organization (Watkins 2008). Critical thinking and problem-solving skills are more important to such leaders because they need the same skills to challenge the normal beliefs and practices in the organization. This segment of transformative leadership is highly appropriate for public sector organizations in the UAE because this paper shows that such organizations suffer from an ingrained and well-rooted belief in traditional organizational norms that are not hinged on promoting organizational excellence. Lastly, the individual associates play the role of advisors and managers for a selected team of employees or associates within a company (Watkins 2008). This group of managers and leaders prefer to encourage employees to achieve not only the organization’s goals but also stakeholder goals. This segment of transformational leadership is highly appropriate for private sector organizations, as stakeholder interests and organizational interests stand at the helm of the organization’s priorities.

Contingency Theory

The contingency theory posits that no single leadership style should prevail in an organization (Lussier & Achua 2009). Instead, the theory advocates for the adoption of flexible leadership styles, depending on the internal or external dynamics of the organization (Lussier & Achua 2009). This theory relies on the fact that a myriad of factors (contingency factors) affect most organizations and therefore, managers and leaders should respond to these factors by adopting diverse leadership styles and managerial approaches that fit in the context of the situation (Fairholm & Fairholm 2009).

The contingency theory is highly appropriate for most organizations in the UAE public sector because the public sector is different from the private sector under its goals and visions. Indeed, while the private sector seeks to maximize profits and shareholder values, the public sector seeks to maximize the public good. However, since this paper establishes that the leadership style adopted in the UAE public sector is rigid to change, it is appropriate to apply the contingency theory in formulating better leadership styles for the UAE public sector. Therefore, public sector managers should be flexible in their approach to leadership because they should adopt the best leadership styles that maximize public good, appeals to the cultural background of the UAE population, and improves the efficiency of the organization (to make it competitive). Since the adoption of one leadership style cannot effectively meet these goals, it is pertinent to apply the contingency theory in choosing the best leadership styles that would accommodate the environmental, personal, and situational characteristics of the leaders and the leadership situation.

Charismatic Leadership Styles

The charismatic leadership style is a highly desired leadership style that has driven change in most western organizations. This paper identifies Tesco as a classic example of how the influence of charismatic leaders can effectively change the fortunes of an organization. Coming from a background of mutual respect between the managers and the employees, Tesco was able to change the fortunes of the company by establishing a high commitment level among the employees and increasing employee satisfaction. Similar to the success of Tesco, a charismatic leader demonstrates the power to influence employees by creating a change of disposition within the organization. According to the diagram below, a charismatic leader creates a presence of charisma by demonstrating self-confidence, being open-minded, sharing knowledge, respecting others, showing compassion, being authentic, showing humility, and exuding moral discipline and courage.

Charismatic Presence.
Figure Four: Charismatic Presence (Source: Peterson & Seligman 2004).

According to the diagram above, the above qualities demonstrate self-awareness among charismatic leaders. However, based on the findings of this study and the view of the respondents studied, many UAE managers and leaders receive criticism for their failure to show empathy and emotional connection with their employees. The adoption of the charismatic leadership style strives to correct this situation by empowering leaders to convey a great degree of emotion, concerning employees’ plight. Albeit charismatic leadership may prove to be beneficial to UAE firms, it is crucial to mention that its success largely depends on the personality traits of the leaders (Peterson & Seligman 2004).

Indeed, most researchers say that the charismatic leadership style works best when the employees feel attracted to the personality or charm of a leader (Peterson & Seligman 2004). While this leadership style may be the main reason for the transformation of Tesco, it may not demonstrate the same results for other organizations that do not share the same leadership traits as Tesco’s managers. To this extent, it is unwise to propose that all UAE managers should adopt this leadership style because not all UAE leaders have the same leadership characteristics. The limitations in the adoption of the charismatic leadership style show that human factors also play a big role in defining the success of proposed leadership styles. Therefore, while this leadership style may have admirable benefits, human constraints may prevent its successful adoption.

Conclusion and Recommendations

The need for businesses to remain competitive in a rapidly changing and dynamic world piles the pressure for modern leaders to adopt positive leadership styles that would improve organizational competitiveness. According to this paper, there is little contention that many UAE organizations experience a rapid influx of change factors that affect organizational performance. Indeed, considering the positive outlook of the UAE economy and the high influx of international investments in the region, globalization poses serious ramifications for local enterprises. The successes of several global businesses in the UAE show that local businesses have to manage increased competition from global brands, which are starting to dominate most local markets.

Consequently, many of these local firms have to change their strategies to survive in a harsh and competitive business environment. Wang & Chich-Jen (2010) express little doubt regarding the ability of organizations that resist change to survive in this unpredictable and rapidly changing business environment. Based on these market dynamics, there is little hope for private and public firms, which do not intend to adopt change management as a key business strategy (Elenkov 2002). Indeed, most international investors who come to the UAE introduce global standards of operations and compete with local businesses using the same standards. The change and implementation of these standards largely depend on the willingness of local managers to adopt evolutionary management and leadership styles that will transform local enterprises into globally competitive companies.

Based on the analysis of UAE private and public sector organizations, this paper shows that even though the leadership and management styles of both organizations may vary, most UAE leaders adopt a command and control leadership style. This leadership style stands out as the most pervasive weakness for UAE organizations in managing organizational effectiveness and promoting organizational competitiveness. Researchers have also pointed out that this leadership style does not promote growth and effectiveness in the organization (Peterson & Seligman 2004).

Peterson & Seligman (2004) say, “the command and control leadership style has only a paltry 3% chance of creating a high performance climate in the organization” (p. 3). Through the above understanding, it is pertinent to say that most UAE managers are consistently underutilizing their employees by not allowing them to be innovative and creative in their organizational activities. Consequently, most UAE organizations are not operating to their maximum efficiency. Therefore, although many UAE organizations (in both the private and public sector) have made significant strides in improving their levels of performance, many leaders are missing the opportunity of effectively using their greatest resource – employees. UAE managers, therefore, need to stop creating an unfavorable climate where organizations do not succeed and instead focus on providing a nurturing environment where they can unlock employee potential. This paper proposes the adoption of the transformational, participative, and democratic leadership styles to achieve this objective.

Since poor leadership affects organizational performance and growth in the UAE, a leader’s ability to maintain a proper focus that would drive organizational goals through change management stands at the pinnacle of transformative leadership. Leaders who adopt transformative leadership therefore have a very strong ability to introduce positive change within the organization by increasing employee commitment and dedication to their jobs (Nwagbara 2010). Based on the advantages that transformative leadership poses to different organizations around the world, this paper recommends that UAE managers should think about embracing this leadership style to promote a collectivist approach to achieving organizational goals. This leadership approach would eventually lead to the disappearance of authority as a tool of command for most organizations in the UAE.

The adoption of transformational leadership stems from assertions by Nwagbara (2010) which say, when authoritative leadership fails to work, transformational leadership would often be the solution. In contrast, authoritative leadership would be synonymous with the current uncompetitive position that most UAE organizations find themselves in (compared to foreign companies). In the face of global competition, it is unsustainable to use authority as the yardstick of command in UAE organizations because it negates the spirit of collective responsibility. Transformational leadership should therefore be the direction that most UAE managers (in both the private and public sectors) follow.

Contrary to the adoption of transaction leadership, which only works, to cement self-interests and promote submissiveness to power, transformational leadership would help UAE managers to transform these self-interests into the achievement of goals and objectives. Therefore, the adoption of the transformational leadership approach would be a departure from the past leadership approaches of leaders rewarding or punishing employees for their commitment (or lack of it), to a situation where employee commitment to shared goals become of utmost importance to the leaders (Nwagbara 2010).

In an unrelated context, due to the emergence of global competition and the influx of foreign expatriates in the UAE, this paper recommends that there should be a greater collaboration between private and public sectors in the UAE. Even though both sectors promote different leadership and management styles, the country would enjoy more economic benefits if both sectors collaborate to promote the competitiveness of the country in attracting foreign investments and leading other Gulf nations in becoming globally competitive enterprises. However, because global standards of practice promote western-styled ideals in management and leadership, there is a need for both private and public enterprises in the UAE to embrace the participative leadership style to standardise local management and leadership standards with international standards on the same. The participative leadership style can easily blend with the participative management style to create a platform where both UAE managers and leaders can improve organisational competencies. Through these leadership styles, both leaders and managers should be comfortable to include their subordinates in their decision-making processes.

The embracement of participative decision-making may offer immense benefits to organisations in the UAE because it will improve the quality of their decisions, and increase organisational competence through improved employee motivation. Through these outcomes, Peterson & Seligman (2004) believe that organisational commitment and employee satisfaction will equally increase. Through the participative decision-making system, the UAE organisations can therefore utilise the potential of their employees well because the employees will enjoy an opportunity of being innovative and creative, as they seek to find better ways of improving the organisation’s competence. The participative decision-making style also provides an opportunity for UAE organisations to employ the contribution of experts in the formulation of their strategic decisions.

Similar to the underpinnings of the human resource theory, this paper proposes that UAE managers should employ the participative leadership style to improve the competitiveness of their organisations because the participative leadership style will help UAE employees to achieve a higher level of psychological satisfaction with their work. This satisfaction will help to improve their commitment to the organisation and boost their morale in the same regard. The greatest drawback for the adoption of the participative leadership style is the presence of many voices during the formulation of company strategies. If UAE organisations run into such a problem, they should adopt a compromising position to implement the strategic decisions that may emerge from the same process.

While this paper acknowledges the cultural differences between the UAE and western-styled leadership styles, this paper suggests that there would be little cultural conflicts in the adoption of the participative leadership style in UAE. This is because, regardless of culture, employees are often bound to respond positively to managers and leaders if they feel valued and appreciated in the organisation. Evidence to this fact stems from the success of Emirates Airline (a UAE organisation), which has successfully adopted this leadership style with a lot of success. In fact, the success of Emirates airline, through the adoption of the participative leadership style shows that UAE organisations can still enjoy increased organisational competitiveness through the adoption of this leadership style. The success of the airline company therefore disapproves critics who believe that most western-styled leadership styles cannot work in a different cultural context, such as UAE’s.

Even though the differences between the UAE public and the private sectors are vivid, this paper disapproves the notion that all public sector companies fail to realise their goals because of redundant leadership styles. An evaluation of the differences between the UAE private sector organisations and public sector organisations show that the operational management plans for public sector organisations may equally be progressive and in tandem with the goals of the public sector (as private sector organisations are). The success of the 100% government-owned Emirates Airline supports this view. In fact, this paper shows that this public sector organisation commands a leadership position not only within the UAE, but also across the gulf region.

Interestingly, while it may be true that private sector organisations are more adaptive to change than public sector organisations, the analysis of Al Masaood and Sons show that private organisations may still be slow to adapting change management, compared to other public sector organisations. Therefore, a comparison of the performance of public sector firms and private sector firms shows that the leadership styles and managerial approaches of some public sector firms align with their strategic goals and visions (as witnessed in the Emirates Airline case). Similarly, this paper also shows that some private sector firms (like Al Masaood & Sons Company) do not have a leadership style or managerial approach that aligns with their strategic goals and vision. This study also presents a very interesting scenario that shows many UAE private and public sector organisations in the UAE are either government or family-owned. These ownership models show that the authoritarian leadership style is more prevalent in such organisations, as opposed to the shareholder ownership that is common in most private companies.

This paper also shows that unlike most UAE organisations, shareholders own most western organisations and therefore prefer to seek the services of trusts, or professional bodies, to run such institutions. An organisation like Al Masaood and Sons Company shows that private sector organisations in the UAE may equally be slow to adopt change management because rewards link with loyalty to the family members, as opposed to employee performance (Schroevers & Bruijn 2010). An evaluation of Emirates Airline and Al Masaood and Sons Company therefore shows that the operational management plans for Emirates Airline match with its operational goals. Family-owned enterprises like Al Masaood and Sons are still playing catch-up in the adoption of change management. Based on the success and efficiency of UK firms (especially with regards to their adoption of the participative and democratic leadership styles), it is correct to suggest that UAE organisations (both in the public and private sectors) need to adopt more progressive leadership styles that would maximise employee contributions in the organisation. This change needs to occur because western organisations compete with UAE firms on an unequal ground because they are more efficient and highly competitive than most UAE organisations. The best way for local UAE firms to compete with their western counterparts is therefore to change their leadership styles and become more efficient.

Besides the adoption of the best leadership styles in the UAE organisations, this paper also cautions against the “one size fit all” approach when introducing the adoption of best work practices in the UAE. Uniquely, this paper appreciates the role of the contingency theory in providing a flexible environment where UAE managers can adopt flexible leadership styles that appeal to the current dynamics and situations of the environment. Managers should therefore adopt change management strategies for UAE organisations through a very dynamic approach that appreciates change characteristics, organisational attributes, and impacted groups.

The appreciation of these dynamics shows that the UAE organisations should factor the importance of situational awareness in the adoption of change management. This standard of introducing change management shows that flexibility should be a priority for UAE leaders. Indeed, according to Varadarajan & Majumdar (2012), the best type of leadership is one that shows flexibility in approach so that organisational productivity may be maximised. Regardless of the type of leadership style adopted by the managers, it is vital for UAE managers to understand how to interact with other cultures to improve their organisational competitiveness. Lastly, based on the findings of this paper, the hypothesis for this study emerges to be true because human factors (cultural, personality, societal factors) appeared to be highly influential in choosing the choice of leadership styles and organisational performance in the same regard.

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Appendices

Appendix One: Survey Questionnaire

Do you believe UAE local enterprises are prepared to compete effectively with foreign companies?

  • Yes
  • No

How would you rate the effectiveness of management operational plans for public organisations in meeting their organisational strategies?

  • Very good
  • Good
  • Average
  • Bad
  • Very bad

How would you rate the effectiveness of management operational plans for private organisations in meeting their organisational strategies?

  • Very good
  • Good
  • Average
  • Bad
  • Very bad

Do you believe private and public organisations in the UAE are well prepared to manage global competition

  • No
  • Yes

On a scale of one to five, what extent do you believe the participative leadership style would improve the competitiveness of UAE organisations?

  • 1
  • 2
  • 3
  • 4
  • 5

What factors do you believe make local UAE enterprises uncompetitive?

  • Lack of transparency
  • Lack of skilled personnel
  • Failure to include employees in decision-making
  • Poor leadership
  • Poor management

How would you rate the importance of culture in defining leadership styles in the UAE?

  • Very important
  • Important
  • Averagely important
  • Not so important
  • Not important at all

Of what importance is collective responsibility to improving organisational competitiveness in the UAE?

  • Very important
  • Important
  • Averagely important
  • Not so important
  • Not important at all

Appendix Two: Structured Interview

  1. What change management strategies would you recommend for public and private organisations in the UAE?
  2. What best working practices of leadership management would you recommend for organisations in the UAE?
  3. Do you believe the leadership and management styles for UAE private and public organisations are prepared to contain the pressures of globalisation?
  4. What are the differences between public and private sector leadership styles that make them uncompetitive to other foreign firms?
  5. What extent do you believe UAE organisations should emulate the leadership and management styles of foreign firms?
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