Week 3 - Business & Human Capital.

The Role of Leadership in Diverse and Inclusive

workplace for better competitiveness & Strategy

Learning Outcomes
Upon the completion of this week of study you will be able to:
LO.1 Apply critical understanding of operational trends, theories and frameworks associated
with financial management, marketing, and operations management used to translate strategy
into operational practice
LO.2 Gain an understanding of key relationships and engagement challenges and enablers
to create optimum conditions for operationalising strategy
LO.4 Evaluate key aspects of practical and achievable operational goals and objectives in order
to deliver the desired strategy outcomes

Contents
1.1 Introduction ............................................................................................................................... 2
1.2 Leadership and Human Capital ............................................................................................. 2
1.2.1 The four leadership behaviours .......................................................................................... 4
1.3 Theories of Leadership ............................................................................................................. 4
1.3.1 Trait Model of Leadership .................................................................................................. 4
1.3.2 Behaviour Model of Leadership ......................................................................................... 5
1.3.3 Flexible and adaptive leadership ........................................................................................ 6
1.4. Diverse and Inclusive Workplace towards better enhancement of market changes and
strategy development ...................................................................................................................... 9
1.5 Ethical Leadership .................................................................................................................. 10
References ..................................................................................................................................... 12

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1.1 Introduction
It is essential to have a leader who is a self-aware advocate for diversity and who possesses the
inclusive abilities necessary to capitalize on the differences that exist among the members of the
team in order to improve overall performance and business strategy.

1.2 Leadership and Human Capital

The "process through which an individual is able to influence, inspire, motivate, and guide
actions" is what we mean when we talk about leadership (Yukl, 1989). According to Yukl
(1989), leadership can be defined in terms of individual characteristics, leader behavior,
interaction patterns, role relationships, follower perceptions, influence over followers, influence
on task goals, and influence on organizational culture. Additionally, leadership can be defined in
terms of how followers perceive their role in the organization. Leadership is a phenomena that
may be described as a dynamic force of a person that is essentially responsible for motivating
and directing the efforts of the members of an organization to pursue the organization's goals
(DuBrin, 1995). In other words, leadership is a phenomena that may be defined as the ability of a
specific person to obtain the confidence and support that is necessary for the accomplishment of
the goals set forth by an organization. According to Baronien, et al. (2008), the most important
quality of a leader or manager is the ability to exert influence. A leader is defined as a member of
a group who wields the most sway over the activities of the other members of the group. Ability
to control and exert influence over other people is widely regarded as one of the most crucial
components of successful human interaction. The leader of the group motivates and stimulates
others to act, as well as provides instructions, mediates disagreements among the other members
of the group, and makes choices. Baronien, et al., (2008) defines the leader as a member of the
group who is acknowledged by other members of the group to make decisions related to the
activity of the group. The leader expresses his approval or disapproval of certain actions carried
out by members of the group. In addition, the leader inspires and encourages other members of
the group and takes the lead in any activity carried out by the group. It is essential to keep in
mind that management and leadership are two entirely separate ideas, despite the fact that
management cannot function without leadership and that leadership is integral part of
management.

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Davies et al. (2006) assert that an organization that is managed by a manager-leader is distinct
from an organization that is managed by an administrative manager. To highlight the distinction,
Baronien et al. (2008), stated that many organizations are managed excessively while having
inadequate amounts of leadership. A social agreement between a leader and the people he leads
needs to be acknowledged for there to be effective leadership. The leader needs to be willing and
able to exert control over the outcomes of events by using their intelligence and abilities to
influence the actions of other people and must also have the ability to do so. The ability to lead
effectively depends on there being widespread consensus, aspirations, and dedication.
Kirkpatrick and Locke (1991) state that a leader should: - be concerned with the active
participation of team members; - review the team's objectives and organize its members; - be
aware of the benefits and drawbacks of the members of the team; - define the areas of
responsibility and the channels of communication.
Effective management, on the other hand, differs from effective leadership in that it is
determined by three primary types of management skills: - Technical skills, the ability to use
special measures, procedures, and techniques; - Skills of working with people, the ability to work
with people, understand them, and motivate them both individually and in groups; and -
Conceptual skills, the ability to coordinate and integrate all of the organization's activity,
particularly effective, long-term decisions. In addition, conceptual abilities are required in order
to think of the organization as a whole and grasp the connections among the many components
that are present in specific conditions in order to choose actions that are in the best interest of the
organization (Baronien, et al., 2008). When it comes to organizations, the phrase management
refers to the execution function of integrating structures and resources to ensure optimal delivery,
whereas the term leadership refers to the process of getting commitment from personnel. The
concept of a "leader" is typically understood to imply that there are subordinates or followers that
the leader is responsible for exercising some level of authority or control over. Kellerman (2004,
p. 44) notes that the Harvard Business School leadership theorist group, which was led by
Visagie and Linde (2010), began to differentiate between leaders and managers. According to
Visagie and Linde (2010), "a leader is an inspirational figure while the manager handles the
more administrative tasks and maintains organizational discipline".
Reliability and efficiency, on the one hand, must be weighed against the imperative of
imaginative adaptability to new challenges and possibilities, on the other. For a leader to be

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successful, he or she must find the right balance between these competing priorities in order to
be successful. Sometimes the competing ideals and tradeoffs result in behaviors that are
diametrically opposed to one another (e.g., controlling vs. empowering). Another measure of
flexible leadership is the degree to which a leader is able to maintain a healthy equilibrium
between conflicting moral standards and contrasting patterns of conduct in a manner that is
suitable for the circumstances (Kaiser et al., 2007). When pursuing a career in management, it is
not uncommon to advance from one job to another within the same organization or to a higher
position in a different organization during the course of one's career. The pattern of behavior that
is necessary for effective leadership frequently differs between the many sorts of management
jobs, as well as between positions in one company and positions in another organization with a
distinct mission or culture. The ability to successfully make these transitions from one job to
another is another indication of a leader who is flexible and adaptive.

1.2.1 The four leadership behaviours

• Directive – goal setting, task assignment, showing how to complete tasks and steps to
improve performance.
• Supportive – concern for subordinates and looking after their interests based on support
and mutual care.
• Participative – involving subordinates’ participation in decision making and mutually
establish goal setting.
• Achievement oriented – setting challenging goals and a clear expectation that they are
met, demonstrating belief in subordinates’ ability to achieve

1.3 Theories of Leadership

1.3.1 Trait Model of Leadership
The trait approach stresses leaders' personal characteristics. Earlier views of leadership linked
success to unusual qualities such as indefatigable energy, keen intuition, uncanny foresight, and
compelling persuasive powers. Recent characteristic study has focused mostly on managerial
motivation and specialized abilities, whereas earlier research emphasized personality traits and
general intelligence (Yukl, 1989). Balance is one of the key ideas derived from the trait-based

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perspective. In certain instances, balance refers to a reasonable level of a trait, such as need for
achievement, need for connection, self-confidence, risk-taking, initiative, decisiveness, and
assertiveness, as opposed to a very low or very high amount of the trait. In some situations,
balancing entails tempering one trait with another, such as tempering a strong desire for power
with the emotional maturity necessary to ensure that subordinates are empowered rather than
dominated. Sometimes it is necessary to strike a balance between competing values (Quinn &
Rohrbaugh, 1983). The requirement for continuity and predictability must be balanced with the
desire for change and innovation. Balance is not just the responsibility of individual leaders. In
some instances, a management team's balance is achieved by leaders with complimentary traits
that compensate for each other's flaws and accentuate each other's strengths (Bradford & Cohen,
1984).

1.3.2 Behaviour Model of Leadership

The Behaviour Model of leadership depicts what actual leaders do to influence subordinates in
order to accomplish goals. The behavioral approach focuses on what leaders and managers do on
the job and the relationship between conduct and managerial effectiveness (Yukl, 1989).
Effective management is related to the nature of managerial activity. Managers must make
judgments based on incomplete and overwhelming information, and they require the
collaboration of several individuals over whom they have little official power. Other than
subordinates, many exchanges involve lateral peers, superiors, and outsiders. The nature of
managerial work is further illuminated by descriptive study on managerial decision making and
issue solving. The decision-making process is extremely political, and the majority of planning is
informal and adaptable to changing circumstances. Effective managers construct a mental agenda
comprising short- and long-term goals and strategies (Kotter, 1982). The manager uses the
network of relationships within and beyond the unit to implement plans and strategies. For
initiatives requiring significant innovations or influencing the distribution of power and
resources, the manager must build a coalition of supporters and sponsors, which may entail
increasing the network of contacts and allies (Kanter, 1983; Kaplan, 1984). Effective managers
are able to identify connections between the problems, difficulties, and opportunities they
encounter. By linking problems to one another and to informal objectives, a manager might

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identify possibilities to fix many problems simultaneously (Isenberg, 1984; McCall & Kaplan,
1985).

1.3.3 Flexible and adaptive leadership

Leadership that is both adaptable and flexible entails modifying one's conduct as the situation
demands. Numerous phrases have been used to characterize leaders who can effectively assess
the circumstance and adjust their behavior accordingly. These terms include flexible, adaptable,
nimble, and versatile, among others (Kaiser, Lindberg, & Craig, 2007; Pulakos, Arad, Donovan,
& Plamondon, 2000). There is substantial ambiguity in the management and leadership literature
regarding the nature and evaluation of flexible leadership. One explanation for the ambiguity is
that circumstances in which flexible leadership can emerge vary. For instance, a leader must be
flexible inside the same role as circumstances change, as well as while transitioning from one
sort of leadership position to another with different responsibilities and tasks.

As the rate of change within businesses quickens, the majority of managers and administrators
are finding that flexible and adaptable leadership is becoming increasingly crucial (Burke &
Cooper, 2004; Dess & Picken, 2000). Increased globalization and international commerce, rapid
technological change, shifting cultural values, a more diverse workforce, greater use of
outsourcing, new forms of social networking, increased use of virtual interaction, greater
visibility of leader actions (e.g., Internet), and concern for outcomes besides profits (e.g., ethical
actions, social responsibility) are examples of the types of changes that increase the need for
flexibility, adaptation, and innovation among leaders ( Burke & Cooper, 2004).

In a typical day or week, most leaders are responsible for a variety of responsibilities, and it is
often required to switch swiftly from one sort of activity to another (Mintzberg, 1973). Different
jobs typically necessitate distinct leadership styles. In addition, subordinates frequently differ in
terms of their experience, talents, values, and needs, and a leader's interactions with diverse
individuals should reflect these differences. For instance, it is fair to delegate more to
subordinates with good talents and a strong commitment to achieving task objectives.
Adaptability is also essential when a subordinate's abilities and motivations evolve over time. As
a subordinate gains expertise and confidence, it is fair to delegate more responsibilities. When an

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unexpected, out-of-the-ordinary event threatens to disrupt routine operations or cause harm to
people or property, the organization must respond quickly but appropriately to limit the negative
effects. How a leader handles these acute crises is indicative of his or her adaptability and
flexibility as a leader. Over a longer period of time, large changes in the external environment
present new challenges or possibilities for the organization, and it is often necessary to modify
strategies or tactics to ensure the organization's continuous existence and effectiveness.

The amount to which a leader makes appropriate adjustments to strategies and tactics is an
additional measure of adaptable and flexible leadership. It is essential for leaders to comprehend
the various situations that necessitate flexible and adaptive action. For each scenario, they must
be able to diagnose the circumstance and identify the right sorts of conduct. In addition, they
must be adept at employing a variety of actions. Leaders require mental models that assist
comprehension of the complicated impacts of their activities on various objectives, as well as the
necessity of balancing opposing values. Leaders must recognize and seize opportunities to raise
their self-awareness of pertinent qualities, abilities, and behaviors and to acquire vital skills
before they are required. Leaders should also understand their obligation to assist subordinates in
developing and employing the skills and behaviors necessary for flexible and adaptive
leadership. In a world full of change and uncertainty, it is difficult and stressful to be adaptable
and flexible, and leaders must have a strong commitment to doing what is required and ethical
(Yukl & Mahsud, 2010).

Transformational:
Transformational leadership refers to the process of influencing significant changes in the
attitudes and assumptions of organization members and fostering support for the mission,
objectives, and strategies of the company. The notion outlines a leadership process that is
primarily identified by its outcomes, such as significant changes in the culture and strategy of an
organization or social system. Transformational leadership incorporates a leader's influence on
subordinates, but the influence has the result of empowering subordinates to engage in the
organization's transformation. Thus, transformational leadership is typically considered as a
collaborative process involving the actions of leaders at many organizational levels and subunits,
not only the top executive (Bass and Riggio, 2006; Burns, 1978).

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Charisma or idealized influence, inspirational motivation, intellectual stimulation, and
individualized concern are the four facets of transformative leadership. Charisma, or idealized
influence, is the extent to which a leader's exemplary actions inspire followers to connect with
him or her. Leaders with charisma exhibit conviction, take stands, and appeal to the emotions of
their people. Inspirational motivation is the extent to which a leader articulates a vision that
followers find appealing and motivating. Leaders with inspirational motivation challenge their
followers with high standards, express optimism regarding future goal attainment, and create
significance for the current activity. Intellectual stimulation is the extent to which a leader
questions preconceived notions, takes calculated risks, and solicits followers' input. Leaders with
this quality inspire and promote their followers' inventiveness. Individualized consideration is
the extent to which a leader caters to the needs of each follower, acts as a mentor or coach for the
follower, and listens to the follower's worries and requirements (Judge & Piccolo, 2004).
Transactional:
Transactional leadership has three dimensions: contingent reward, management by exception—
active, and management by exception—passive. The degree to which the leader generates
constructive transactions or exchanges with followers is the contingent reward. The leader
specifies expectations and establishes rewards for satisfying these expectations. Management by
exception is, in general, the extent to which the leader takes corrective action based on the
outcomes of leader–follower interactions. The timeliness of the leader's action distinguishes
active management by exception from passive management by exception, according to Howell
and Avolio (1993). Active leaders observe the conduct of their followers, foresee potential
issues, and take corrective action before the conduct causes significant problems. Passive leaders
do not take action until the behavior has caused difficulties.

The augmentation effect is a "fundamental" (Bass & Avolio, 1993, p. 69) tenet of
transformational–transactional leadership theory that has been frequently discussed but rarely
tested. This tenet states that transformational leadership augments the influence of transactional
leadership. Bass (1998) defined the augmentation effect as the extent to which "transformational
leadership styles contribute to the additional effort and performance of followers by building on
a transactional base" (p. 5). Further, Bass (1999) asserted that the most effective leaders are both

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transformative and transactional (p. 21). Howell and Avolio (1993) concurred with this position,
adding that transformational leadership complements transactional leadership and that
transformational leadership is frequently utilized by effective leaders. The underlying
assumption of this argument is that transformational leadership must be based upon transactional
leadership. In fact, Bass (1998) suggested that transformational leadership cannot replace
transactional leadership (p. 21). The term augmentation, which means amplification or extension,
implies that something exists to be amplified or extended. According to Avolio (1999),
"transactions constitute the foundation of transformations" (p. 37). According to Bass's (1985)
theory, transactional leadership results in followers meeting expectations, at which point their
obligations are met and they are rewarded accordingly. According to Bass (1998),
transformational leadership is essential to drive people to go beyond expectations. This indicates
that transformational effects may not be feasible without the foundation of transactional
leadership.

1.4. Diverse and Inclusive Workplace towards better enhancement of market changes and
strategy development
Diversity and inclusion are related concepts, but they are not interchangeable. Diversity refers to
the composition or representation of an entity. Inclusion refers to the degree to which the
contributions, presence, and opinions of diverse groups of individuals are appreciated and
integrated into an environment (Grissom, 2018).
A workforce that is diverse in terms of age, country of origin, religion, nationality, sexual
orientations, gender, offers a variety of perspectives and points of view. These features can,
among other things, assist the organization in developing innovative new goods and customer
service strategies. Considering the impact of diversity and inclusion initiatives, the benefits of
workplace diversity include higher revenue, more innovation, improved decision-making, equal
access, being treated fairly, higher rates of job acceptance when qualified candidates are offered
positions, and superior performance compared to competitors (Kirton & Greene, 2021).
Respecting the distinct needs, opinions, and capabilities of each team member allows equitable
employers to outperform their rivals. As a result, diverse and inclusive workplaces inspire
greater employee engagement and trust.

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The development of a marketing strategy that takes into account diversity, equality, and
inclusion practices can result in the acquisition of more devoted clients and the presentation of
your brand to a much wider audience. Every single marketing effort ought to consider diversity
an integral component on a daily basis towards better strategy development. A more user-centric
approach to your creative work, including advertising, is required if you want to increase the
diversity of your marketing activities. This is not the same as making an advertisement with the
goal of satisfying each and every potential buyer. A varied team has a better chance of breaking
into new markets since its members come from a variety of different cultural backgrounds, racial
backgrounds, religious beliefs, political perspectives, and other types of diversity. In today's
technologically advanced society, diversity is one of the most important tools for fostering
innovation (Hayes, 2021). When working in a workplace that is rich in diversity, you get a more
well-rounded perspective of the issues that need to be solved. Ideas that are created from
experiences that are based on various forms of diversity might eventually lead to the creation of
an inventive solution that addresses an issue that exists in society.

1.5 Ethical Leadership

The demonstration of appropriate behavior in accordance with acknowledged principles and
values by corporate leaders both inside and outside of the workplace is a key component of what
is known as ethical leadership. Ethical leadership is about demonstrating strong moral beliefs
that will point out wrongdoings (even when it may help their business) and showing what is right
at the foundation of being an ethical leader. This can be done through a leader's words and deeds.
Leaders who uphold ethical standards set an example for the rest of the organization and have the
expectation that their words and deeds will be accepted and followed with the same level of
conviction by their employees (Feng, Wang, Lawton, & Luo, 2019). The various advantages of
ethical leadership have been the subject of research conducted by healthcare experts over the
course of time and have been emphasized in a great number of examples of companies that have
achieved great success. The following are a few illustrations of the many advantages associated
with ethical leadership. In today's digital and fast-paced world, where a single image can
completely destroy a brand, upholding moral brand standards has taken on an even greater level
of significance. Ethical leadership may significantly boost the public's perception of a company's
brand simply by behaving and acting properly. Leading, inspiring, and encouraging people while

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also making them feel accountable for their work are all essential components of ethical
leadership. When this occurs, it is possible to have better success in company since employees
are more fulfilled while they are working. Customers are no longer satisfied with simply
purchasing a "good product;" rather, they want their acquisitions to adhere to a code of ethics
(Feng, Wang, Lawton, & Luo, 2019). Any company that can demonstrate that it makes ethically
sound choices and decisions will be successful. Building trust with your staff members and
earning their trust in return are two essential components of ethical leadership. An rise in
personnel loyalty is more than attainable provided that individuals experience less threat and
have a reduced level of disagreement to the path the company is taking. When a company
upholds clear ethical and moral standards, the likelihood of that company attracting investment
increases since these standards inspire confidence among investors in general. They are working
to establish a positive brand image and a positive general impression in the market in order to
attract potential collaborations (Feng, Wang, Lawton, & Luo, 2019).

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