Leadership Style and Power
i. Critically discuss the leadership styles of Catherine Walter and Graham Kraehe, with reference to appropriate course material.
Organizational issues and problems have been considered as one of the aspects that can bring the leadership ability of the people. It is when the management of a certain company is able to bring out all their managerial and leadership skills to solve the issues faced by the company. Consequently, leadership provides the organization critical edge to effectively country any threats from internal and external part of the business environment.
In the case provided, there are two leaders who have been given emphasis: Catherine Walter and Graham Kraehe. Based on the given case, it can be noted that both individuals have different leadership styles and approach. Catherine Walter can be considered as a charismatic leader. With the given situation of the company, Catherine Walter has been able to show his leadership ability in all business operations of NAB, specifically in times of the issue about the foreign exchange loss. It has been found out that in spite of the issues she has faced along with other board members of the company, Catherine Walter has been able to handle and manage the issue with the characteristics of being perseverance, charismatic, creative, innovative and empowering leaders (Goleman, 2000). In this case, it has been shown the Catherine Walter has all these characteristics which enable her to handle the problems with poised and dignity. According to her, organisations needs empowerment of people who work in the company to be able to transform the older style of the company which she said is not consistent with the need of the workforce (NAB Annual Report, 2004).
Catherine Walter can be considered as perseverance and empowering leader as she made salient arguments when she associated the privileges of limited-liability construct to problems like corporate social responsibility (CSR) and the expectations of the society for a corporation. Furthermore, she ha also argued that a leader must consider that the contexts of a limited-liability company, specifically given among employees should be broaden to attend to any aspects which affect the reputation of the company, particularly the perceptions that it generates for its care as well as consideration for the customers, human resources and the business environment.
Furthermore, another leadership characteristic of Walter as leader is being an entrepreneurial leader. She is perceived to have a strong achievement approach and sensible risk taking ability. In addition, Walter has also the tendency to take actions quickly when there are opportunities. As soon as Walter felts that she is becoming the scapegoat of the conflict and issue faced by NAB, she has shown her braveness to take risk and publicize the entire accounting issue to the media. But also she is a very impatient leader (Durbin, Dalglish, Miller 2003).
In the case of Graham Kraehe, it can be considered as an influential and democratic kind of leader. It is known the leadership composes the aptitude and skills to inspire as well as influence the behavior and the thinking of the people or the subordinates. It is a process of social influence in which an individual can able to provide the support and assistance for others to achieve common goal (Chemers, 1997). It can be said that the decision of Graham Kraehe to requisition an extraordinary board meeting to deal with the issue and Catherine Walter suggests that he is possess the democratic type of leadership. It can be perceived in the given case study that Kraehe looked for final decisions made by the other members of the corporation especially the shareholders. Nonetheless, the comment of Kraehe among shareholders that there was irreconcilable or incompatible differences among the Board members and Catherine Walter have shown that Kraehe was trying to control the final decisions of the board by influencing other shareholders and controlling important information.
It can be said that one of the leadership styles that can be perceived with Graham Kraehe is a pacesetting style and also a leader which communicates the pressures of change. Although, it was clearly shown in the case study how Walter and Kraehe argued on the issue, the composure of a leader is still seen on both parties. Accordingly, a pacesetting leader is described as the approach in which the leader sets a high standard of performance. He has the conscientiousness, the drive to achieve and the initiative but adopts the “Do as I do, now” policy, is low on empathy and collaboration and is impatient. It has, according to the author a negative impact on the overall working climate which happened to the NAB during the board meeting. Often, employees are overwhelmed by the demand for excellence by their boss, and consequently become either highly competent employees who constantly proves to the boss that they are worthy of his trust and can keep up with his high standards or become stagnant, for fear that they would fail to meet the boss’ expectations.
Other members of the board of NAB chose to become the latter, not only because they are overwhelmed by Kraehe’s work tempo, but also for the reason that Kraehe’s motivational approach is not effective. The employees’ willingness to exert higher levels of effort for the achievement of organizational goals is hindered by how Kraehe treats his subordinates. In his direct participation to the work, he sets standards for doing it, and if certain employees fail to keep up with him, he resorts to negative motivation. As a result, the morale of his subordinates is low, as evidenced by their unwillingness to perform better. As suggested by management specialists, the pacesetting style should be sparingly used. This style works best only when all the employees are self-motivated professionals, highly competent and need little direction and coordination, like in R&D and legal firms.
Having this little concern for interpersonal relations which characterize typical pacesetting leaders, other members of the board of NAB does not develop a sense of achievement in what they do like what Kraehe has been done during the meeting. The subtle threats, intimidation and embarrassment do not help their morale at all. Low morale has been found to equal low productivity, and this is exactly the case of Kraehe’s employees. Although this style of leadership is good for the type of followers who are committed, well-organized and highly proficient, this leadership style must not be used all the time. In this case, Kraehe has only successfully alienated his people, because of the lack of real appreciation on his part.
It can be concluded that the business environment is constantly changing and each leader must be able to respond effectively to these changes and the challenges ahead (Hamid, 2001). Each of the leaders, like in the case of Catherine Walter and Graham Kraehe, must play their leadership styles and role like professionals at all costs using the right attitude and behavior in handling issues like what they have faced within National Australian Bank
ii. What types of power do Walter and Kraehe have?
According human beings are considered as a social animals, which has the ability to gather, influence and often compete with each other for survival. To be able to execute and extend their influences as well as their manipulation on other individuals, which leads to gaining their own advantages and benefits, human beings grasp different types of power. Based on the case given about the National Australian Bank, both Catherine Walter who is the head of the audit committee and the only female among the board and Graham Kraehe which is the chairman of the directors, have exerted their influences and power to publicize the scandal which shows the extension in which the power issues and politics within a company could end up. It can be said that the balance of power among shareholders and the board members are one of the contentious issues faced by corporations.
In the case of Catherine Walter and Graham Kraehe, there are two types of power to be considered. This includes the personal and positional power. In line with the personal power, this type can be divided into three sources such as the expert, referent and the prestige. In analyzing the individual power, one can give emphasis on their work experience as well as their field of specialization or their skills. In line Graham Kraehe, it is perceived that he has extensive management, leadership and business experience. In the 40 years of his career in managerial position, and his becoming a Chief-executive officer of different wine and automobile industries, Kraehe can also be regarded to have the capability to lead diversified employees on various manufacturing industry to become a successful and efficient public company. Based on the case, it can be perceived that Kraehe is an expert for risk management and was recognize for his years of success and the attached success in his endeavors. Being a risk manager, he has the power to make risks an important asset of the corporation and enable the corporation to control the situation.
In the case of Catherine Walter, she has been a solicitor for over 20 years of her career and moved into an astonishing range of private sector and public sector’s boardrooms. She was a Director since 1995 and formerly a Commissioner of the City of Melbourne and a senior banking lawyer. In the break out of the scandal, Walter have shown her courage as well as her assertiveness and braveness to stand firm on her position and value, when she encountered criticisms and attacks from other members of the shareholders of NAB.
On the other hand, the positional power can be regarded as the rights officially given and provided by the company. It thus can be trimmed down into four-minor contexts such as coercive, legitimate, reward and information. In the case of NAB scandal, both Kraehe and Walter can be said to have these four types. For Kraehe, he became the Chairman of the risk committee while the other was the chairperson of this department. Furthermore, both of them were considered to be independent non-executive directors of the company and also the members of the Nomination Committee. In addition, both leaders had their legitimate power to control and manage as well as exercise their influence among other members of the corporation.
Moreover, their position as a Chairperson of their own department have revealed that both had formal control over various information and details from their part. As members of the Nomination committee, both are accountable for removing or selecting new Directors which show that they have the coercive and reward power in managing and controlling the Bard, and also other parts of the organisation (Principal Board Nomination Charter, 2005).
Based on the analysis, it can be concluded that both parties have their power within National Australia Bank and each has their ability to exercise their powers especially in times of having issues and problems. However, because of these abilities of both parties it resulted to a personality clash which resulted in more intense issues.
Chemers, M.M. (1997). An Integrative Theory of Leadership. Lawrence Erlbaum Associates.
Concise Annual Report 2003, National Australian Bank http://www.nabgroup.com/0,38453,00.html. Accessed on September 30, 2008.
Durbin, A, Dalglish, C, Miller, P (2003). “Leadership”, 2nd Asia-Pacific Edition, John Wiley & Sons Australia, Ltd..
Goleman, D 2000, ‘Leadership That Gets Results’, Harvard Business Review, March/April, pp. 78-90.
Hamid, H 2001, ‘Fluid leadership style is the way’, Business Times (Malaysia), February.
National Australia Bank (2004) The Year The Facts The Future: The Concise Annual Report 2004 http://www.nabgroup.com/vgnmedia/downld/Concise_NAB04.pdf accessed on September 30, 2008.
Principle Board Risk Committee Charter, National Australian Bank, 6th September 2006
www.nabgroup.com/vgnmedia/down ld/PBRC_Charter.pdf Accessed on September 30, 2008