1. Background Construction industry has been a major beneficiary of Sri Lanka’s rapid economic development over the past ten years. According to NDB Securities (NDBS), a brokerage based in Colombo, in 2014 Sri Lanka’s construction sector expanded by more than 20%. Indeed, since 2009 the industry has grown twice as fast as the nation’s GDP, which has increased by just over 7% on an average annual basis over the same period. According to NDBS data, in 2014 the construction industry accounted for 9.
6% of Sri Lanka’s GDP, which represented a significantly greater proportion of the economy than most other countries in Asia. In 2016 Sri Lanka ranked 107th place in “Doing Business Rankings” surpassing regional giant India (BOI report, 2017). Sri Lanka’s place on World Bank’s “dealing with construction permits” index jumped from 106th to 77th from 2015 to 2016, which was the single largest improvement in any metric for the country in the most recent (Doing Business, 2016). Figure 1: Sri Lanka GDP from Construction (Source – Dep.
Of Census and Statistics Sri Lanka)MTD-Walkers PLC is a pioneer in the engineering and infrastructure industry with a well-established track record in multidisciplinary engineering activities both locally and overseas. In operation since 1854, it is the seventh oldest company in Sri Lanka and over the years “Walkers” brand has acquired an iconic presence associated with strength and stability. Today, MTD-Walkers possess a robust portfolio of infrastructure-related businesses including civil, marine, mechanical, electrical engineering work and pile construction etc. Just two construction firms are listed on the Colombo Stock Exchange and MTD-Walkers is one of them and Access Engineering is the other. MTD-Walkers PLC is listed on the main board of the Colombo Stock Exchange, with a market capitalisation value of LKR 13.
5 billion as at 31st March 2017.In addition to the two listed firms, unlisted domestic C1-ranked construction firms include Maga Engineering, Orient Construction, the International Construction Consortium, Sathuta Builders and Sierra Construction, among others. A steadily growing number of major foreign players have also moved into the industry, including the Chinese state-owned China Communications Construction Company and Sinohydro Corporation, which are involved in the Colombo Port City project and the Moragahakanda power project, respectively. Figure 2: Company structure of MTD-Walkers PLC (Source – MTD-Walkers PLC annual report 2016/2017)There is a massive competition between construction companies in this rapidly changing business environment.
Strategy implementation ensures that the strategic objectives, mission and vision of the organization are achieved as successfully as planned (Thompson and Strickland, 2003). Even the most creative strategies have no value if they cannot be translated into action (Daft, 2009).Strategic leadership has been identified as a major driver of effective and efficient strategy implementation.
Role of leadership is important since its agenda for action and assumption on how to push for change, impacts the implementation process and move it forward (Thompson, Strickland and Gamble, 2007). Hitt et al. (2013) views transformational leadership as a style of strategic leadership and even reflect it as the most effective strategic leadership style, which comprises motivating followers to surpass expectations, continuously enhancing their capabilities and placing the organization’s interest above their own. Transformational leaders build and communicate a vision and formulate strategies to achieve the vision by continuously encouraging followers to attempt for higher levels of accomplishment (Hitt et al., 2013).
1.1. Problem statement and justificationCurrently, Sri Lanka is experiencing a several challenges in the construction industry such as; increasing cost for raw material, high demand for reinforcement and government regulations, but the most crucial concern is the shortage of skilled labour. Due to this reason, local contractors find difficulty in meeting project deadlines.
According to the Central Bank reports, total value of construction contracts amounts to Rs. 15 billion by 1995, while this value has increased to Rs. 200 billion by 2015, denoting a staggering increment of 1233%. However, in contrast to this hike, the skilled labour has only increased by a mere 8%. Following figure 3 showcases the factors for elementary worker’s turnover or retention in a company. Figure 3: Factors affecting job desirability of elementary occupations (Source – RIU report 2018)Labour shortage has a direct negative impact on meeting project deadlines, productivity, performance and ultimately financial profitability.
All the construction companies including MTD-Walkers are struggling to find and implement strategies to overcome labour shortage and other industry related problems. After thorough analysis, MTD-Walkers have implemented strategies such as; pay for performance, increasing top-down and bottom-up communication, people and talent management programs in order to overcome the issue of skilled labour shortage. Unfortunately implementation of most strategies was unsuccessful and company consider it is related to the leadership approach of the company. This study focuses on the impact of transformational leadership on strategy implementation in MTD-Walkers PLC. ?2. Literature Review Review is guided by one question; how does the leadership style impact on strategy implementation in construction industry? 2.1.
Strategic ManagementStrategy is the direction and scope of an organisation, which attains advantages in a moving environment via identification of resources and capabilities with the motive of fulfilling stakeholder expectations over the long-term (Johnson, Scholes and Whittington, 2008). Although strategy planning and formulation conducted before implementation, strategy implementation is the most important part of the process of strategic management (Wheelen & Hunger, 2008). Strategic management is exceptionally vital as it deals with the main issues that affect the future of the organisation. Situation Analysis, Formulation and Implementation and evaluation are the four core mechanisms of Strategic management process (Coulter, 2010). Figure 5: Strategic Management Process Source – Coutler, (2010)Strategic planning is the scanning process of strategic management and it is done using analysing tools such as SWOT, PESTLE, Seven S, Macro, five-factor, resource and competence analysis. Strategy formulation is identifying the anticipated future state and choice of the long-term strategy based on the analysis. Strategy implementation necessitates to convert the organisation’s strategic-plan into action and then into result (Thompson and Stickland, 2014).
Organisation’s strategy consists of three levels as demonstrated in figure 5. Corporate strategy focuses on the overall scope of the organizations, while business level strategy focuses on how individual business units compete in its market and finally operational strategy focuses on how products and services to deliver. Figure 6: Three Levels of Strategy (Source: http://slideplayer.
com/5687518/18/images/2/Levels+of+Strategic+Management+From+Chapter+1.jpg)2.2. Strategy ImplementationDuring the development of programs, budgets and procedures placing tactics and policies into action is Strategy Implementation (Bradford et al 2000). Formulating strategy is difficult but making strategy work or implementing it in an organization is even more difficult (Hrebiniak, 2006).57 percent of firms were unsuccessful at executing strategic initiatives according to an economist survey in a survey of 276 senior operating executives in 2004 (Allio, 2005). Fortune magazine (Gurowitz, 2007) finds that less than 10% of well-formulated strategies are also effectively executed.
Similarly, a Times’ (Farsight Leadership Organisation, 2007) study finds that 80% of companies have the right strategies, yet only 14% implement them well. Therefore, most companies have strategies but only a few actually realise them. US companies spent more than USD 10 billion annually for analysing, and then formulating their strategic plans, at the end of the 20th century (Judson 1991). Strategic planning can only be successful if there is effective implementation of the strategy.
Without implementation, even the most glamorous of plans are useless (Aldehayyat and Anchor, 2010; Aaltonen and Ikalvako, 2002).2.2.
1. McKinsey 7S Model for Strategic Implementation Several scholars have proposed different models that companies should follow to be able to better implement their strategies. One the most comprehensive model was developed by Peterson ; Waterman at McKinsey ; Company, based on seven internal company factors which must be aligned for successful strategy implementation in the company.Hard Elements (Mallya, 2007) Soft Elements (Papula ; Papulová, 2012)Strategy – express how the company achieves its vision and how responds to opportunities and threats from environment, means awareness of the external subjects as-well-as internal. Style – style of leadership and choice of the suitable style of leadership of the company belong to important factors affecting the implementation of the strategy.Structure – the way how the company is structured, inferiority and authority relations, organizational structure supports the implementation of the strategy. Staff – employees and their skills are key factors of the success, companies should have right people on the right place.
Systems – Systems of planning, control and information that support the implementation of the strategy. Skills – actual skills and abilities of company´s employees, companies should focus on the development of the skills in the future, development of knowledge and gaining experiences. Shared values – values required in the strategy are based on shared interests and are included in the mission of the company, they are a key components that affect the effectiveness of all other factors, it is an important feature of company´s culture that supports the creation and implementation of the strategyTable 1: Model, 7S – Hard and Soft factors Figure 7: McKinsey 7S Model for Strategic Implementation (Source – https://image.slidesharecdn.com/2-150717145501-lva1-app6892/95/mc-kinsey-7s-model-strategic-implementation-manu-melwin-joy-1-638.
jpg?cb=1437144948)Higgins (2005) suggested a modification of McKinsey’s original “7S” model – an “8S” model (consisting of Strategy, Structure, Systems and processes, leadership Style, Staff, resources, Shared values, and Strategic performance) to aids managers better focus on strategy execution. Activity Group Activities as operationalised in this study Activities addressed in the literaturePlanning activities Formulating and implementing development programmes – Programming and budgeting (Pu?ko, 2006)- Developing programmes, budgets and procedures (Wheelen & Hunger, 2006) Planning and implementing projects – Translating strategy into projects (Pellegrinelli & Bowman, 1994)- Managing projects (Kova?, 1996; Grundyv, 1998; Hauc & Kova?, 2000; Minarro-Viseras et al., 2005; Pu?ko, 2006) Using an efficient annual planning system – Establishing operating-level objectives (Hrebiniak & Joyce, 1984)- Tactical (annual) planning (Pu?ko, 2006)- Annual business planning (Birnbaum, 2007) Applying action planning – Action planning (Pu?ko, 2006; Wheelen & Hunger, 2006; Birnbaum, 2007)- Turning strategy into action (Farsight Leadership Organisation, 2007)Organising activities Organising for strategy implementation – Fitting the organisation to the strategy (organisation design) (Lorange, 1982; Kova?, 1996)- Designing a primary and operating organisational structures (Hrebiniak & Joyce, 1984)- Organising for strategy implementation (Pu?ko, 2006)- Organising for action (Wheelen & Hunger, 2006)- Developing organisational structure (Birnbaum, 2007) Allocating strict responsibility for strategy implementation – Translating enterprise-level plans into lower-unit-level plans (Kaplan &- Norton, 2005)- Allocating responsibility for strategy implementation (Pu?ko, 2006)- Involving people from all organisational levels (Wheelen & Hunger, 2006)2.2.
2. Activities Needed for Successful Strategy ImplementationAuthors also investigate how certain activities, influences strategy implementation. Based on a broad literature review 12 such activities were identified which can be categorized in four broad groups: planning, organising, leadership and controlling activities.Leadership activities Using leadership to direct employees – Triggering enthusiasm in employees (Nichols, 1994)- Directing employees (Pu?ko, 2006)- Leading by coaching people (Wheelen & Hunger, 2006)- Motivational leadership (Farsight Leadership Organisation, 2007)- Leading the change (Brenes et al., 2008) Using formal communication – Emphasising communication between all parties (Al-Ghamdi, 1998)- Communicating the corporate strategy (Kaplan & Norton, 2005)- Communicating strategy to people (Speculand, 2006) Applying MBO (management by objectives) – Aligning employees’ goals with strategic goals (Kaplan ; Norton, 2005)- Management by objectives (Pu?ko, 2006; Wheelen ; Hunger, 2006) Applying HRM activities – Executing HR activities (Fulmer 1990; Ulrich, 1998)- Staffing (Pu?ko, 2006; Wheelen ; Hunger, 2006)- Managing human resource factors (Birnbaum, 2007)Controlling activities Using an efficient tactical control system – Creating incentives and control mechanisms (Hrebiniak ; Joyce, 1984)- Controlling the implementation of strategies (Pu?ko, 2006)- Monitoring and control (Birnbaum, 2007)- Implementing control and follow-up actions (Brenes et al., 2008) Applying the BSC (balanced scorecard) – Using the balanced scorecard (Kaplan ; Norton 1996, 2006)- Consistently measuring progress and performance (Farsight Leadership Organisation, 2007)Table 2: Activities Needed for Successful Strategy Implementation2.3.
Barriers to Effective Strategy ImplementationMany leaders delegate implementation responsibilities and do not monitor the actions. When leaders stop monitoring the implementation process, so do the staff members and it begins to fail (Speculand, 2011). Figure 8: How a biscuits strategy crumbled -Source: Finlay (2000)According to Fourie (2007) the main reason for organization’s strategy implementation are the vision barrier, where employees do not understand the strategy of the organization and unidentified key changes in responsibilities; leadership barrier where top management’s leadership is inadequate; resource barrier where organisation’s resource allocation is not aligned to the strategies and people barrier where goals and incentives have not associated with the strategy of the organization.Organisation’s top management’s lack of strategic leadership has also been identified as one of the major barriers to effective strategy implementation (Beer and Eisenstat, 2000; Kaplan and Norton, 2004; Hrebiniak, 2005). Figure-8 explains how strategy fails due to poor leadership.2.
4. What is LeadershipLeadership can be defined as the art or process of influencing people so that they will attempt willingly and impassionately towards the accomplishment of the organisation’s purpose (Lynch, 2009). The responsibility of a leader is to inspire, give opportunities, train and motivate the staff in-order to obtain their support while making important long-term choices (Shao, Feng and Hu, 2016). Organizations can be compared with cars; people are necessary for cars to really work and the right people (leaders) by the steering wheel (Kets de Vries, 2001). Management focuses on stimulating steadiness and empowering the firm to run smoothly, while leadership inspire, promote and take initiatives to deal with the long-term change (Draft, 2014).2.
5. Evolution of leadership theoriesLeadership theories emphasise leader’s traits, behaviour, the power effect approach, the situation and/or a combination thereof (espy, 2012). Following table showcases the development of leadership theories.
Year ofpublication Theorist Model Basic Tenet(s)Trait 1911 Taylor ScientificManagement Time-motion studies with four principles of management. 1933 Mayo Hawthorne According to Mayo (1933), work performance depends on both social and job content. 1938 Bernard Executive Function Bernard (1938) argued that firms are systems of cooperation of human activity. 1947 Simon Theory ofAdministrative Simon (1947) mentions that search for a decision for most problems that are good enough.
Green (2014) added that firms typically run on a collection of decisions that were good enough rather than ideals. 1948 Stogdill Traits ofLeadership Stogdill (1948) analysed 128 published trait studies but was unable to develop a definite list.Behaviour 1948 Coch &French Michigan Studies Job-cantered versus employee-cantered styles of leadership. 1948 Stogdill Ohio State Studies Ohio State Studies include consideration and initiating behaviour. 1954 Maslow Hierarchy of Needs A hierarchy, often shown as a pyramid, reflecting the four types of needs that motivate people. 1957 McGregor Theory X and Y McGregor (1957) noted that leadership styles of managers are affecting by the way they look at their subordinates. 1957 Tannenbaum& Schmidt Continuum ofLeader Behaviour A distinction between autocratic to democratic continuum models.
1964 Blake &Mouton Managerial Grid Situational leadership concern for people versus concern for task.Contingency 1965 McClelland Achievement Theory Need for achievement, need for power, need for affiliation. 1966 Hertzberg Motivation-Hygiene Satisfaction and psychological growth result from motivation factors; dissatisfaction results from lack of hygiene factors. 1967 Likert Systems 1-4 Four different systems of organizational management; System 1-Authoritarian, System 2- Benevolent Authoritarian, System 3- Consultative, System 4- Participative.
1967 Fiedler Contingency Model Leadership effectiveness depends on both the leader’s personality and the situation; Least Preferred Co-worker Scale. 1967 Reddin 3D Management Style Style-contingency approach with five styles: situational, autocratic 1, autocratic 2, consultative 1, consultative 2 and group. The style is chosen by answering seven questions, which form a decision tree. 1974 House Path-Goal The leaders’ function is to clear the path toward the goal of the group, by meeting the needs of subordinates. 1976 Vroom Expectancy Theory Individuals have different sets of goals and can be motivated if they believe that there is a positive correlation between the efforts and performance; favourable performance will result in a desirable reward, the reward will satisfy an important need, the desire to satisfy the need is strong enough to make the effort worthwhile.
1988 Hersey & Blanchard Situational Leadership Hersey & Blanchard’s situational leadership model suggests that successful leaders do adjust their styles. There are four main leadership styles: delegating, participating, selling and telling.Integrative 1977 House Charismatic Leadership A charismatic leader has the ability to influence subordinates based on sort of supernatural gift and attractive powers. Subordinates enjoy being with a charismatic leader because they feel inspired, correct and important. 1977 Greanleaf Servant Leadership This leadership theory argues that in the workplace it is about helping others to accomplish shared objectives by facilitating individual development, empowerment, and collective work that consistent with the health and welfare.
1978 Burns Transformational Leadership A dynamic and two-way relationship between leaders and subordinates. According to this theory, leaders must connect with the needs and wants of the subordinates and establish motivation to accomplish collective goals that satisfy the needs of both leaders and subordinates. 1978 Kerr ; Jermier Substitutes for Leadership Aspects of the environment other than the hierarchical leader can provide leadership to subordinates.
1986 Tichy ; Devanna Transformational Leadership These leaders are agents of change, have courage, openness and faith in the subordinates; are led by values; believe in life-long learning; have the ability to face the complex, ambiguous, and uncertain situations, and have visionary abilities. 1989 Manz Super leadership Leads others to lead themselves through designing and implementing the system that allows and teaches employees to be self-leaders. 1989 Yukl Integrating Model The subordinate’s effort, skill, leader’s role, resources available, and the group’s cohesiveness in any particular situation determine leader behaviour. 1991 Covey Principle Cantered Leadership Leadership on the basis of natural principles. It is built on those principles into the centre of their relationships with others, into the centre of their agreements and contracts, into their management processes and into their mission statement.
1995 Grean & Uhl-bien Leader-member exchange theory (LMX) LMX theory assumes that leaders and subordinates are involved in an exchange relationship in an exchange relationship. Subordinates follow because they receive something from the leader. In turn, the leaders lead as they get something from the subordinates. 2003 Fry Spiritual leadership Spiritual leadership examines how leaders use values, a sense of ”calling” and membership to motivate subordinates. 2004 Avolio Authentic Leadership A pattern of transparent and ethical leader behaviour that encourages openness in sharing information needed to make decisions while accepting holding subordinates’ input.
Table 3: Adopted from – Nijkamp (2016) Leadership styles and strategy process research; A study of Dutch small and medium-sized enterprises2.6. Determining the Most Effective Leadership Style and Leadership TrendsSelecting the most effective leadership style or blend of leadership styles depend on situation factors such as nature of company, trade and competitive market and other available resources, etc.
(Mockler, 1997). A proper factor analysis can decide the most appropriate leadership style. For example, Thomas Murphy and Daniel Burke, who changed the merged Capital Cities and ABC Communication Company into a profitable comany, used a mixed style considered as “farsightedness, management independence, and interfering when it is called for” (Auletta, 1991). As situation requirements change over time, the leadership style required for an organisation also changes. At AM International a strong analytical leadership was needed firstly to save the company out of bankruptcy; later a style focused towards people was needed (Johnson, 1987).
World personalities such as Michael Dell from Dell Computer, Jack Welch from General Electric, and Larry Weinbach from Unisys have embraced the new form of leadership and taken their organizations into the twenty-first century (Lewis, Goodman and Fandt, 2001). Trice and Beyer (1991), suggest that successful strategic management requires new form of leadership that contains characteristics shown in following table.Old Leadership Vs New LeadershipOld Leadership ? Non-charismatic ? Transactional ? Management ? Non – visionary ? Non-magical New Leadership ? Charismatic ? Transformational? Leaders? Visionary? MagicalLess Emphasis On ? Planning Vision ? Compliance ? Contract ? Reaction More Emphasis On? Routine Change ? Commitment? Extra Effort ? Pro-actionTable 4: Source-Cooper C.L.
(2005); Leadership and Management in the 21st Century – Business Challenges of the Future, Oxford University Press, Page 172.7. Leadership in the construction industryEffective leadership is vital for every construction company and leadership style and its practice have an important role in the success of project management (Atwater and Spangler, 2004). Ideal project leaders can involve the subordinates at a individual level and motivate them, empower them and inspire them to contribute fully (Burke ; Barron, 2007) and at the same time, bringing out the best in them.Problems experienced by many construction projects in Iran often caused by project managers or leaders as the nature of the industry has made project management more difficult which requires more highly-skilled and experienced leaders (Tabassi and Bakar, 2011). Nguyen et al.
, (2004) describe that by nature the construction work is a daily operation where problems occurrence is unpredictable which demands for project leader’s creativity in problem-solving. The responsibility of leaders in enhancing the performance and innovation has been receiving increasing attention in recent times in the construction industry (Bossink, 2007).2.8.
Transactional leadershipTransactional leadership style focuses on managers to perform their roles and accountabilities (Kippenberger, 2014). When the chain of command is definite and clear people perform their best (Keegan and Den Hartog, 2004). Transactional leaders prevent complication and ensure concrete, individual control to lower the risk and uncertainty (McAdam, 1993) and, disagree employees an opportunity to contribute in major-issues so, the organisation does not encourage creativity and innovation (Thompson and Strickland, 2014).
Examples for once noticeable transactional type CEOs who resigned from their jobs are James Robinson from American Express, John Akers from IBM, and Eckhard Pfeiffer from Compaq (Lewis, Goodman and Fandit, 2001). These CEOs failed because their leadership was simply not fitting the highly dynamic business environment. Figure 9: Transactional Leadership (Created by the scholar based on literature)2.9.
Transformational leadership Hitt et al., (2013) view transformational leadership as a style of strategic leadership and even reflect it as the most effective strategic leadership style, which involves motivating subordinates to exceed expectations, constantly enhancing their capabilities and placing the organization’s interest above their own. Transformational leaders develop and converse a vision and generate strategies to attain the vision by motivating subordinates to attempt for higher levels of accomplishment (Hitt et al.
, 2013).For the transformational leaders to be able to become great communicators, team players, trouble-shooters and change makers, they ought to possess strategic competencies which help executives to focus on the long-term requirements of their firms and take opportunistic decisions which entail the ability to implement programs effectively (Jeannet and Hennessey, 1995). Individualised consideration and inspirational motivation reduce the turnover rate which minimises expenditure associated with hiring (Cameron et al., 2014). Figure 10: Transformational Leadership (Created by scholar based on literature)Researches on Transformational LeadershipYear, Researcher/ Description FindingsPaul Chou (2013) The Effect of Transformational Leadership on Follower’s Affective Commitment to Change Study explored how transformational leaders influences employees affective commitment to change at farmers’ associations in Taiwan. The findings attested that transformational leadership directly impact employee’s effective contribution to change, and also indirectly impact employee’s dedication to change through organizational support and dedication to the organization.Muhammad Hussain Uddin (2013) Role of Transformational Leadership in Organizational Change: Mediating Role of Trust Examined the relationship the author collected the data through questionnaires from the banking sector of Pakistan.
The results indicated that there was a significant relationship between the transformational leadership with organizational change and trust had the interceding role.Elham Gorgani et al. (2014) Investigate the Role of Transformational Leadership in Organizational Change: Case Study of an Industrial Company in Iran. The study sought to achieve leadership roles in organizational change, the results showed the intellectual skills, practical and social skills of managers have an important positive influence on organizational change.Gibson (1998) Rethinking The Future; Nicholas Brealey Publishing, London Transformational leadership is critical in facing today’s challenges. These leaders will look ahead, analysing the environment and the competition, noticing emerging trends and new opportunities, preventing an imminent crisis. They will be explorers, adventurers, trailblazers.
Table 5: Researches on Transformational Leadership (Multiple sources)Case Studies/ Organisational Change Stories on Transformational LeadershipPlease refer to the relevant Annexes for detailed informationAnnex No. Description Strategic ChangeAnnexure II Forbs (2016) How Transformational Leadership Saved This Company : Ceridian’s Story Forbs article contain the leadership story of Ceridian CEO Mr David Ossip’s and how he transformed the company.Steps of the strategic transformation:– Need for Change- Improved Communication- Defined Purpose Align Values- A mission Understood- Clear Vision- Right People at Right Roles- Measuring- Taking Action?Annexure III Carroll (2015) Case study: Steve Jobs as a transformational leader by SAGE Publishing Case study showcases in detail, why Steve Jobs is considered as a transformational leader and how he turnaround Apple. Annexure IV Business Insider (2016) These traits made Steve Jobs a smart leader, according to his right-hand man Ken Segall is a creative director who has a long history with Apple and NeXT.
This is an excerpt from his book “Think Simple,” which was out June 7. The article explains the leadership traits of Steve JobsAnnexure V Johnston (2018) Examples of Transformational Organisations Contains the successful transformation stories of IBM, Apple, Southwest Airlines and StarbucksAnnexure VI Magloff (2018) Examples of Transformational Change – Nokia in 2011 – adopting new technology- Apple 1997 – Product Restructuring- McDonald’s 2006 – Market repositioning by CEO John Skinner- IBM – Transforming structure, vision and drive by CEO Lou GerstnerTable 6: Case Studies/ Organisational Change Stories on Transformational Leadership (Multiple sources)An broad literature suggests that transformational leadership empower strategy implementation.?3. Critical Review 3.1.
Identifying the Leadership in MTD-Walkers3.1.1 Employee Turnover Figure 11: New recruit in 2016/2017(Source- Annual Report 2016/17) Figure 12: Workforce of MTD-Walkers (Source- Annual Report 2016/17)3.
1.2. Training and Development Figure 13: Training and Development (Source- Annual Report 2016/17) Figure 14: Training Ideology (Source- Annual Report 2016/17)3.1.3. Communication, Pay and Equity Sharing?3.1.
4. Current Leadership in MTD-WalkersThrough the analysis following factors were identified on MTD-Walkers – Extremely high employee turnover rate- Ineffective communication policy- A clear chain of command (Figure 16: Company structure of MTD-Walkers PLC)- Above average rewards (Contingent Reward)It is evident that MTD-Walker has Transactional Leadership factors. The construction industry is facing a major labour shortage crisis and top of that MTD-Walker is experiencing a high turnover rate. The company is trying to retain employees by Contingent reward, yet without success.It was discovered in a survey that 65% of corporate-leaders were focusing on non-financial rewards, in the recent global survey of CEOs carried out by PWC (2011).
Furthermore, on a research conducted by Kovach (2001) among industrial blue-collar workers, it was observed that wages/salaries alone do not satisfy workers.Company’s present leadership has clearly failed to implement the strategy to obtain the expected result; therefore, it is suggested to adopt another leadership approach. ?4.
Interpretation or Discussion Strategy implementation certifies that the strategic goals, mission and vision of the organization are attained as successfully as planned (Thompson and Strickland, 2003). Strategic leadership has been identified as a major driver of effective and efficient strategy implementation. Leader’s role in enhancing the performance and innovation has been receiving increasing attention in recent times in the construction industry (Bossink, 2007) and MTD-Walkers PLC is no exception. Effective leadership is vital for every construction company and leadership style and its practice have an important role in the success of project management (Atwater and Spangler, 2004).
Trice and Beyer (1991), suggest that successful strategic management requires new form of leadership. New leadership should be Charismatic, Transformational, Visionary, magical and emphasised on routine change, commitment, extra-effort and proactive as suggested by Cooper (2005). Based on the organisational statics MTD-Walker’s current leadership has failed to implement the strategy to obtain the expected result, therefore, it is suggested to adopt another leadership approach.
Examples for once noticeable transactional type CEOs who resigned from their jobs are James Robinson from American Express, John Akers from IBM, and Eckhard Pfeiffer from Compaq (Lewis, Goodman and Fandit, 2001). These CEOs failed because their leadership was simply not fitting the highly dynamic business environment.Hitt et al., (2013) view transformational leadership as a style of strategic leadership and even reflect it as the most effective strategic leadership style, which involves motivating subordinates to exceed expectations, constantly enhancing their capabilities and placing the organization’s interest above their own. Transformational leaders develop and converse a vision and generate strategies to attain the vision by motivating subordinates to attempt for higher levels of accomplishment (Hitt et al., 2013).In his research on the influences of Transformational leadership on employee’s effective commitment to change at farmer’s associations in Taiwan Paul Chou (2013) found out that transformational leadership directly impact employee’s effective contribution to change, and also indirectly impact employee’s dedication to change through organizational support and dedication to the organization.
The findings of Muhammad Hussain Uddin (2013) in his research on banking sector of Pakistan indicated the significant relationship between the transformational leadership with organizational change and trust had the interceding role.Study in investigate the Role of Transformational Leadership in Organizational Change observed that intellectual skills, practical and social skills of managers have an important positive influence on organizational change. (Elham Gorgani et al., 2014).Transformational leadership is vital in facing today’s challenges.
These leaders will look ahead, analysing the environment and the competition, noticing emerging trends and new opportunities, preventing an imminent crisis (Gibson, 1998).McKinsey 7S model has been recognised as a most comprehensive implementation model and proper leadership is vital to successfully align its four soft factors and three hard factors. Idealised Influence facilitates aligning the three hard factors and whiles all four Transformational leadership factors positively influence aligning McKinsey’s four soft factors. Considering the impact of leadership on Strategy Implementation Higgins (2005) suggested a modification of McKinsey’s original “7S” model – an “8S” model (consisting of Strategy, Structure, Systems and processes, leadership Style, Staff, resources, Shared values, and Strategic performance) to aids managers better focus on strategy execution.12 activities was identified based on broad literature which can be categorised into four groups; planning, organising, leadership and controlling (Table 2). Transformational leadership is fully capable of successfully executing those activities which are proven by the countless number of real-world stories on how organisations and CEO’s successfully changed their organisations by embracing Transformational leadership practices.Ceridian has the best success story to present.
CEO-David Ossip’s change leadership has transformed his company’s employees and the future route and he was recently listed on Glassdoor’s Highest Rated CEOs list. When he took over as CEO of the global human capital management technology company Ceridian, the workforce was highly disengaged, a Glassdoor rating below 2 and declining business results. David Ossip drove his company toward success using eight steps; identifying the need for change, improved communication, defined purpose – aligned values, a mission understood, clear vision, right people at right roles, measuring and taking action (Forbs, 2016).
(Please review Annexure II – Annexure VI for more case studies)Ideal project leaders can involve the subordinates at an individual level and motivate them, empower them and inspire them to contribute fully (Burke & Barron, 2007) and at the same time, bringing out the best in them. Transformational leadership is proven to enhance and influence the human capital.Transformational leadership is proven to enhance and influence the human capital. An extensive literature suggests that Transformational Leadership empowers successful Strategy Implementation in various industries. Therefore, it can be suggested that Strategy Implementation in the construction industry and MTD-Walkers PLC could also be benefitted by adopting Transformational Leadership practices. ?5. Conclusion Strategic leadership on Strategy implementation has influenced almost every surface in organizations.
Strategy implementation is the sum total of the activities and choices required for the execution of a strategic plan. Construction industry has been a major beneficiary of Sri Lanka’s rapid economic development over the past ten years. Effective leadership is important for every construction company and leadership styles and its practice vital for the success of project management (Atwater and Spangler, 2004). McKinsey 7S model has recognised as a most comprehensive implementation model and proper leadership is vital to successfully aligned its four soft factors (Style, Staff, Skills, and Shared Values) and three hard factors (Strategy, Structure, Systems). 12 activities were identified based on extensive literature which can be categorise into four groups; planning, organising, leadership and controlling (Table 2).Study findings revealed that current leadership of MTD-Walkers reflects Transactional leadership factors and the company is trying to retain workforce by using Contingency Reward. Case studies (Table 6 ; Annexure II-VI) of Ceridian, Steve Jobs, IBM and many more establish the fact that the effectiveness of Transactional leadership has been decreased and organisations and CEO’s all over the world are adopting the Transformational methods.
The study found a strong relationship between Transformational Leadership and successful Strategy Implementation. Transformational leadership directly impact employee’s effective contribution to change, and also indirectly impact employee’s dedication to change through organizational support and dedication to the organization. (Paul Chou, 2013). Multiple case studies and researches prove the positive effect of Transformational Leadership on Strategy Implementation. The findings shall not only be beneficial for MTD-Walkers but also for Sri Lanka Construction industry generally.
?6. Recommendation MTD-Walkers PLC’s current Transactional leadership style shall be changed or combined with Transformational leadership style according to the organisational requirements and leadership trends (Cooper, 2005)It is recommended for the company to do a thorough strategy analysis, Chose a suitable strategy (Formulation) and successfully implements the strategy by aligning leadership. Management of MTD-Walkers PLC should be a role model to subordinates, inspire visions, treat everybody with respect and dignity including third parties and leaders should be ambassadors of their organization (Bass, 1985).
Finally, leaders should be available for employee consultation at all the time.This study recommends that the MTD-Walkers PLC management should support subordinates to experiment new methods of doing their jobs, encourage cross-functional relations, challenge employee’s ideas and encourage for problems solving (Antonakis and House, 2002). In addition, leaders should be good in understanding team climate to ensure successful strategy implementation.
Intellectual stimulation strongly affects Strategy Implementation. This study therefore recommends that the management of MTD-Walkers PLC should ensure that improvements should encourage working job-rotations, cross- functional relations, and creating unity. Individual consideration also influences change management. The study recommends for site managers and employees to jointly involve in employee’s development actions and skills and tools for success should be provided to the staff (Antonakis and House, 2002).
Furthermore, team leaders shall listen and adopt employee’s ideas and feedbacks, communicate the strategy clearly and finally, leaders should keep informing subordinates on how their actual performance meets the plan and targets.?7. Reflection Strategic implementation without proper leadership cannot be succeeded. After I started researching on the impact of Leadership, especially Transformational Leadership on Strategy Implementation, I was captivated with the subject. I came to realise how challenging it is to include all my findings into a 4000 word document. This study gave me the opportunity to learn theories on both Strategic Management process and Leadership.
Case studies such as; Ceridian’s Story on how its CEO-David Ossip transformed the company, Steve Jobs leadership, etc. thought me how important leadership really is for the success of any organisation. Leadership trends, traits and qualities of today’s leaders inspired me to become somewhat like them. Construction industry has been a major beneficiary of Sri Lanka’s rapid economic development over the past ten years. Human capital is the most valuable and rare asset in Construction Industry.
My findings helped me understand the burning issues and Strategic challenges in the construction industry as well as MTD Walkers. Attempting to suggest recommendation to overcome those issues improved my analytical and logical skills. This study helped me to boost my knowledge, enhance leadership qualities and sharpen my academic writing and analytical skills. Ultimately this assignment intrigued my curiosity and made me thirsty for more knowledge.