THE EFFECTS OF POVERTY ON LEADERSHIP EFFECTIVENESS

By

Solomon Fakinlede, PhD

Professor of Management

BaltimoreCityCommunity College, Baltimore, USA

ABSTRACT

This paper provides critical examination of three leadership theories: the contingency, charismatic, and transformational theories with the analysis of what each theory could accomplish in organizational development. In view of the non-homogeneous characteristic of our societies, we have, therefore analyzed how poverty and poor ethical standards could inadvertently affect leadership effectiveness. Nigeria’s size and management practices have given rise to massive corruption and poor ethical standards that became evident in the epileptic performances of both small and big businesses in the country. The police and the nation’s judicial systems have failed to carry out arrests and effective prosecutions of fraudster in the country. Subsequently, we have chosen as a case study, Integrated Color Laboratories, limited,a unique organizationin a poverty-riddled southwest-Nigeria. The company was examined for appropriate leadership model and its style of leadership was therefore matched with the problems posed by employees that were consistently poor in ethical compliance. The result was a constant approach by leadership to adjust strategies and cut corruption rather than focusing on expansion and company growth.

INTRODUCTION TO LEADERSHIP THEORIES

There is a conventional layman belief that the success or failure of an organization is determined by the quality of it leadership (Fiedler, 1967). It is further argued by this same school of thought that an organization cannot progress by itself or through its employees without a powerful leadership drive, hence the high monetary awards and honors bestowed on leaders. Sometimes, leaders are paid 10, 15, or 20 times more than foremen and clerks in the same organization but the boards of directors are always pleased with this type of actions. In further explication of this conviction, Fiedler contributed that laymen viewed managerial skills and abilities as independent of types and functions organizational settings. This means that a good first line manager is expected to be a good second line manager, just as a good class president is expected to be a good school president. Unfortunately, no matter how logical these thoughts may seem to the ordinary eyes, they are not exactly so in reality as leadership of organizations is not an experimental business where actions are taken with the hope that they will achieve the wanted results (Fiedler, 1967). The fact that a person performed well at one level of an organization did not mean that he will perform equally well at the other levels; either because his ability may not be sufficient for excellence at the new level or that he may be unable to adapt his behaviors to accommodate those other variables that are vital to the success of the organization at that new position. With this view came the Contingency theory of leadership.

In the early 1920-1940, researches gave rise to the fact that natural born leaders possess certain exceptional characteristics and physical traits that are not available in the rest of us (House, 1971). Subsequently, other theorists followed by examination of the traits of military and civilian leaders but most of these researcher found that a good number of important trait to possess is the trait that is commonly related to the task at hand. In the Path-Goal theory, House demonstrated that a leader is more successful by demonstrating that there is reward available to the followers by completing the tasks and illustrates the path (behaviors) by which these rewards may be obtained. The path-goal theory postulates further (House, 1971) that the most successful leaders are those who increase subordinate motivation by charting out and clarifying the paths to high performance, motivate their followers to achieve group and organizational goals; make sure that they have control over outcomes their subordinates desire; reward subordinates for performing at a higher level or achieving their work goals by giving them desired outcomes; and take into account their subordinates’ characteristics and the type of work they do.

CONTINGENCY LEADERSHIP THEORY

Fiedler (1967) defined leadership as the initiation of acts which result in a consistent pattern of group interaction and an exercise of authority including the making of decisions directed towards the solution of a mutual problem. He argued that a leader is the person who comes closest to representing the interest of the group the most and a person that has the clearest direction and purpose that gives the group enough confidence to follow and obey. A leader is a person that initiates the most creative changes in a group, persuades the group, organization, or nation to follow his direction without the use of force but through the use of ingenuity, charisma, or the power of office. He or she is therefore accepted to lead in as much as the aforementioned are ongoing or anticipated. Fiedler, in his definition asserted that leadership is an interpersonal relation in which power and influence are unevenly distributed between the leader and his subjects, so that the leader is able to direct and control the actions and behaviors of others to a greater extent than they direct and control his. According to Stogdill (1948, as cited in Fiedler, 1967), leader’s effectiveness could be defined in terms of the group's output, it's morale and the satisfactions of its members. In smaller groups in organizations, leadership owes its existence to the existence of the task groups and the completion of the task. Once the task is completed successfully or abandoned, the leadership is terminated.

Many theorists have pointed to various researches on leadership and argued that conventional leadership theories have pitched leadership style to two major clusters: autocratic/authoritarian or democratic/permissive leadership. These are leaders who to a greater or lesser extents share decision-making and coordination functions with the members of their groups or consistencies. All these approaches have worked at one time or the other in the past since they all hold that leaders must be decisive, directing and controlling (House, 1971; Stogdill,1948). However, Fiedler (1967) argued that despite that fact that different leaders under various approaches have succeeded in the past, research has shown that leaders will be more effective when they can rely on the support, creativity and willingness of cooperation of their followers. The theory of contingency leadership seeks to prove that there is actually no single way or approach to lead in order to become an effective leader. Fiedler explicated that while studies during World War II by other theorists exemplified personality traits he argued that most leadership theories have pointed to the conclusion that:

A man becomes a leader not only because of his personality attributes, but also on the basis of various situational factors (what the job requirements are, who is available, etc) and the interaction between the leader’s personality and the situation. While the leader is frequently chosen from among group’s more intelligent members, intelligence alone will not suffice. Likewise, the tall and the big, the dominant, the aggressive, the masculine and the visible are more likely to be chosen as leaders. But these and similar traits have turned out to be rather poorly correlated with the attainment of leadership status (p.10).

Hence, the success of a leader depends greatly on the situations at hand, the types of group, constituents or citizens he must lead and the task he must perform, hence this theory is set out to expatiate under which specific conditions various leadership styles are appropriate.

In conclusion, Fiedler asserted that leadership might not be a one directional assignment; one man may operate most effectively when his authority is strictly defined and circumscribed while another must be given considerable leeway and discretion. A leader’s style and direction reflects his individual’s preferences and needs. He brings his experience and style to bear on his assignments but his success at the job is dependent on the nature of work and the people he works with. Fiedler concluded that many leaders excel in staff work while others do well in line positions and that “some are known as specialists in trouble-shooting who thrive on turmoil and crisis while others perform best as administrators of well-running subunits of the organization” (p.248). In a sense, matching man with leadership situations become a task that individual organizations must complete in order for them to move successfully forward. The above principle of leadership identified that leadership success in the past was likely going to translate to success now only if the position and employee characteristics are the same.

CHARISMATIC LEADERSHIP

When we look back far in history, we discover that many people have help unto power for reasons less supported by science and democracy. In the past, most power holders have been patriarchic but they have held unto power because their institutions were rooted in the provision of recurrent and normal needs of the everyday people, argued Weber (1968). However, Max Weber analyzed further that the provision of all demands that go beyond those of everyday routine has been possible because of the instinctive abilities of the leaders, which were well beyond a simple human comprehension. These leaders have neither been office holders nor elected to a specific responsibilities but they have distinguished themselves in the times of crisis of physical, economic, ethnic and political natures, to the point that they have smoothened the common man much more than the holders of bureaucratic, patriarchal, and dictatorial authorities. Weber (1968) provided for a further description of charismatic leadership when he wrote that “the natural leaders in distress have been holders of specific gifts of the body and spirit; and these gifts have been believed to be supernatural, not accessible to everybody” (p.19). Charisma is not only inherent in leadership but in the performance of various acts. When people in the eyes of their followers are able to practice their intrinsic acts and rule by virtues of the special gifts of the body and spirits, the followers need no special order for the purposes of following their leaders. As argued by Weber, charisma knows only inner determination and inner restraints. The holder of charismatic power is controlled by his inner virtue and he/she sizes the opportunity and the tasks ahead and demands followership only by the power of success of the his task. Once his success is outstanding beyond common explanations in most cases and beyond replica in many others, his followers accept him as a master and they stay with him indefinitely unless he loses his charismatic authority (Weber, 1968).

Foundation and tenet of charisma

Charisma, by nature is an unstable form of leadership since at some point in time; the owner of charisma may feel forsaken by his God, his oracle or feel that virtue has gone out of him. Charismatic leadership is not formalized by a decree, legislation or election (Weber, 1968). It is held on the strength and ability of the owner to perform miracles and heroic deeds or displays ingenuity above any plausible explanations, if he is a political or tribal leader. Weber argued that the followers/subjects of charismatic leaders may extend a more active or passive recognition to the personal mission of the charismatic master but his power rests solely upon factual recognition and springs from faithful devotions. And as stressed further by Weber, this devotion is born of distress and enthusiasm and a genuine charismatic domination knows of no abstract legal codes and of no formal way of adjudication.

Charisma as further analyzed by Weber, is a highly important form of social structure. As a creative power, charisma recedes in the face of domination; hence, the need for social strata, privileged through existing socio-political and economic orders. But charisma is opposed to formalization; it does not seek legitimization of its authority by law, election, or formalized appointments. As Weber (1968) puts it,

Genuine charisma rests upon the legitimization of personal heroism or personal revelation. Yet precisely this quality of charisma as an extraordinary, supernatural, divine power transforms it into a suitable source for the legitimate acquisition of sovereign power by the successors of the charismatic hero (p.39).

In conclusions therefore, the owner of charisma is the owner of the divine endowment of power and talent therefore making the process of transfer of charismatic authority more perilous than a simple transfer of power. Hence, in all cases of the transfer of charisma, the process is never by general election or popular votes as it is by the current political process that we may know today. Despite the fact that many cultures may institute committees of elders or of divine persons to search for a new holder of charisma, the legitimacy of the new leader is acquired by the correctness of the process by which he is selected. In most cases by it been acquired in accordance with certain formalities, such as coronations as originally contained in the practice of the coronation of bishops, clergymen and kings, with the consent of the communities. This conclusion brings us to the examination of the third form of leadership: transformational leadership.

TRANSFORMATIONAL LEADERSHIP

Transformational leadership refers to those who by the application of their virtues, transform the nation or people from their old thinking rim to the new form from that business and orders have been carried out. The key to their abilities of transformation is their virtue, ingenuity or their charisma. However, no matter the reason for this epoch performance, the focus of this paper is how these leaders have been able to transform their societies. According to Burns (2003) “virtue refers to the old-fashioned norms of conduct – habits of action such as chastity, sobriety, cleanliness, honesty in personal relationships, and self-control. These characters are normally developed early in life, especially in the homes and under exemplary parental leadership” (p.28). Burns argued further that:

Transforming leaders define public values that embrace the supreme and enduring principles of a people. These values are the shaping ideas behind constitutions and laws and their interpretation. They are the essence of declaration of independence, revolutionary proclamation, momentous statements by leaders that go to the core meaning of events, that define what is at stake, such a the Getttysburg Address. Such values are not ordinarily part of the daily discourse of the citizenry. But at testing times when people confront the possibilities and the threat of great change, powerful foundational values are evoked. They are inspiration to people who seek and pursue change and they are the standard by which the realization of the highest intentions is measured. (P.29)

Transforming leadership: The African ancient experience

In the ancient Africa, just as in the medieval Europe, transfer of power has been accomplished with bloody confrontation and prolonged civil wars. In Africa, most especially, sibling, relatives and uncles have fought bitter battles because of the need to survive a vacant thrown. As asserted by Burns (2003), in this tense and grassy land, people had painfully tried out solutions for who succeeds whom in the positions of power by looking at various processes for the succession and legitimization that would foster less violence and more authoritative and beneficial results.

The transformational power of values

Good leaders embrace values, argued MacGregor Burns. Values are rooted in the provision of security, bread, employment, democracy and sustainable leadership. The stronger the value of a leader, the more empowering the leader is; hence, the principles of followership are not rooted in the beautiful speeches that leaders give, but in the heart of the values they bring to the thrown or the seat of government. From the ancient times to this modern day democracy, our leaders have used the power of values craftily to resolve conflicts, motivate the citizens, and improve the economy; subsequently improving their chances of transforming the society by transforming the followers.

MacGregor Burns added that values strengthen the whole fabric of leadership by helping to sustain mobilization and deepen followership bases during the times of conflicts and hardship. It helps strengthen leaders’ capacity to reach out to a wider array of communities and improve leaders’ ability at sustaining their rules. Burns concluded that:

Above all, values operationalized are weapons which empower leaders and followers in the transformation of the society. Not mere decorations on monuments or flourishes in statesmen’s speeches, the great public values of the enlightenment, inter-woven into people’s aspirations and expectations, are the weapons of a transforming leadership that would enhance their security and liberty, and so expand their opportunities to pursue happiness. (p.213)

CASE STUDY

LEADERSHIP OF SMALL BUSINESSES IN POVERTY STRICKEN COMMUNITY: INTEGRATED COLOR LABORATORY, NIGERIA

Integrated Color Laboratory was founded in year 2000 with the sole purpose of providing photofinishing and internet services to the people of Ondo and EkitiStates and the company was headquartered at Akure, the OndoState capital in Nigeria. The idea of incorporating internet services into the photofinishing activities of the company sprung up from the yarning of the people of the area since internet usages were gaining momentum around the world (Ball, et al. 2004) and in this rush, came various Internet Service Providers (ISPs) such as Gannet City, Direct-On-PC, LinkServe and others (Jidaw, 2005). The company then changed its name to Integrated Color and Computer Laboratory (Nigeria) Limited and added the internet line of service to its operations in 2001. The biggest challenge for the company however was in the area of human resources, since doing business in Nigeria involved what is usually referred to as the Nigerian factor, which means poor electricity supply, lack of security of property, and poor ethical compliance by the majority of employees (Shehu, 2004). Therefore, owning and operating a small business in Nigeria present unique ethical challenges to anyone because in spite of this country’s wealth as the 6th largest oil producer in the world, it remained the most corrupt nation on earth, just after Bangladesh and Haiti (Shehu, 2004; Transparency International, 2005). This level of corruption has permeated all sector of government and has spilled into the private sectors. However for most people, personal values for honesty and compassion developed out of family upbringing and individual determination.