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Explore the importance of leadership in procurement and supply, including defining leadership attributes, roles, and functions. Learn how leadership supports supply chain innovation, influences corporate culture, and drives sustainability in supply chains.
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Leadership inProcurement and Supply Professional Diploma in Procurement and Supply
Defining leadership • Leadership may be seen as an interpersonal process of ‘getting others to follow’ or ‘getting people to do things willingly’ • Leadership may be exercised as an attribute of a person’s position in a group or organisation, or some other source of power and influence • Leadership may be seen as a role, a set of functions or a cluster of behaviours (goal articulation, direction, facilitation, assertive communication and so on).
Management and leadership Management Leadership Creating a sense of direction Communicating the vision Energising, inspiring and motivating • Planning and budgeting • Organising and staffing • Controlling and problem-solving
The importance of leadership • Leaders energise and support change, flexibility and adaptation • Leaders secure commitment • Leaders set direction • Leaders support, challenge and develop people • Leaders use a facilitate-empower style rather than a command-control style • As an explicitly interpersonal process, based on qualities such as interpersonal sensitivity, rapport and emotional intelligence, leadership supports relationship and trust building • Leaders use influence, rather than positional, structural or hierarchical power
HRM orientation to management and leadership • Replacing rules and controls with vision, cultural values and customer focus • Open communication and employee involvement • Collaborative employee relations • Empowered teamworking • A facilitative (rather than directive) style of leadership • Continuous learning and development, at an individual, team and organisational level
Horizontal structures • Chunked (team) structures: • creating and empowering smaller and more flexible units within the overall structure • Cross-functional structures: • matrix organisation, multi-skilled and cross-functional teams, quality and innovation circles etc. • Project management: • temporary structures, organised to focus on specific outputs or results, and drawing on cross-functional expertise and resources • Network structures: • loose, dynamic, informal affiliations of autonomous and broadly equal units or organisations • Virtual structures: • special forms of the network concept, in which individuals, teams and organisations operate, collaborate and co-ordinate their activities primarily through the use of ICT networks and tools
Influencing corporate culture • Leadership has a crucial role in the creation, shaping, maintenance (and changing) of corporate culture: • Acting as exemplars and role models for the values and behavioural expectations and norms of the culture • Encouraging examination and expression (and where necessary, challenging) of underlying assumptions and paradigms • Expressing the values and beliefs of the culture, through a wide range of leadership communications • Encouraging team members (and suppliers) to ‘own’ desirable values, beliefs and behaviours • Using human resource management mechanisms or supplier management mechanisms to reinforce desirable changes
Supporting supply chain innovation • Motivating and inspiring people to ‘think outside the box’ or ‘transcend the ordinary’ • Designing and developing an organisational environment which enables people to be innovative • Creating structures which facilitate multi-directional and cross-functional communication, synergies and the use of initiative • Creating an organisational climate which is open to new ideas, criticisms, problem identification and feedback • Developing innovation-relevant skills and capabilities in people and teams • Mobilising organisational resources to support innovation
Leadership and supply chain management The distinctive attributes and focus of leadership make it an essential tool for: • Supporting innovation in supply chains • Improvement of supply chain processes and performance • Developing sustainability, responsibility and ethics in supply chains
Leadership roles and activities • Creating a sense of direction, or finding a vision for something new • Communicating the vision, in a credible and compelling way • Energising, inspiring and motivating people, to translate the vision into achievement • Developing people, to enhance the long-term capability of the organisation • Creating, articulating, maintaining or changing organisational culture and values
Mullins’s 14 functions of the leader • Executive • Planner • Policy-maker • Source of expertise • External group representative • Controller of internal relations • Purveyor of rewards and punishment • Arbitrator and mediator • Exemplar or role model • Symbol of the group • Substitute for individual responsibility • Ideologist (source of values and standards) • Ideal parent figure (focus of positive emotions) • Scapegoat (focus of blame)
Leadership focus in procurement • Formulating procurement, supply chain and sourcing strategy and aligning it with corporate strategy • Integrating procurement activity within the organisation (and, increasingly, the wider supply chain) • Network leadership: drawing together and giving direction to multi-functional and multi-organisational ‘teams’; creating and managing partnerships • Securing internal and external stakeholder buy-in to procurement plans, initiatives and projects • Establishing and applying meaningful key performance indicators for procurement and supply chain activity • Ethical leadership, via procurement’s input to environmental and social sustainability and CSR goals
Supply chain leadership • Motivating and inspiring supply chain partners to offer above-compliance levels of service, innovation, support and value addition • Utilising motivational and relationship-maintaining influencing approaches to change perceptions, attitudes and behaviours • Mobilising and developing resources and capabilities within the supply chain in support of development and improvement • Introducing changes in a constructive, supportive, relationship-maintaining and – where possible – collaborative manner • Facilitating collaboration and alliance-building between stakeholders in the supply network • Leading by example in desired standards of conduct and performance • Utilising influence to encourage the raising of standards in the supply chain
Leadership focus in the public and private sectors • Vision for the community and strategy • Change management • Motivation • Innovation and creativity • Alliance building
Leadership traits RM Stogdill suggests: Edwin Ghiselli suggests: Supervisory ability Occupational achievement Intelligence Self-actualisation need Self-assurance need Decisiveness • Adaptability to situations • Decisiveness • Persistence • Alertness to social environment • Dependability • Self-confidence • Ambition and achievement orientation • Dominance • Willingness to assume responsibility • Assertive communication • Tolerance of stress • Co-operation • Energy
The functional approach • Unlike the trait approach, the functional approach is helpful in drawing attention to: • The leadership context • The potential for leadership development • The potential for devolved leadership
Two-dimensional style models • Initiating structure • the concern with organising the work to be done, the definition of roles and the ways of getting jobs done • Consideration • the concern with the social organisation of the group, maintaining good relations and giving opportunities for group involvement and participation
Autocratic, democratic and laissez-faire • Authoritarian (or autocratic) style: • Power and authority for planning, organising and decision making are centralised in the hands of the leader, and all communication and interactions focus on or through him. • Democratic style: • Decision-making is decentralised, shared by team members via participative processes, and there is greater group interaction. • Laissez-faire (‘let them do it’) style: • The team is genuinely autonomous, organising its own work and making decisions.
Tells, sells, consults, joins • Tells (autocratic) • The leader makes decisions and issues instructions which must be obeyed without question. • Sells (persuasive) • The leader still makes decisions, but believes that team members must be motivated to accept them in order to carry them out properly. • Consults (participative) • The leader confers with team members and takes their views into account, although he retains the final say. • Joins (democratic) • Leader and team members make the decision together on the basis of consensus.
A continuum-based view Advantages Limitations It is still, essentially, a two-dimensional model of leadership and therefore simplifies complex dynamics. It only addresses the initial step of assigning tasks to subordinates It assumes that managers have sufficient information • Encouraging leaders to be behaviourally flexible • Giving leaders clear decision criteria for the selection of autocratic or democratic styles • Supporting employee development and empowerment, given time and opportunity
Fiedler’s contingency model • A structured, task-oriented or psychologically distant leadership style works best when the situation is either very favourable to the leader, or very unfavourable • A supportive, relational, participative or psychologically close leadership style works best when the situation is moderately favourable to the leader • ‘Group performance will be contingent upon the appropriate matching of leadership styles and the degree of favourableness of the group situation for the leader’
House’s four main types of leadership behaviour • Directive leadership • establishing clear goals and expectations; giving specific directions and instructions and so on • Supportive leadership • displaying concern for the needs and welfare of the team; being approachable; coaching and resourcing team members • Participative leadership • consulting with team members, and incorporating their input into decisions • Achievement-oriented leadership • showing confidence in team members’ capability, setting challenging goals, and expecting high standards or improvement
Leadership and charisma House (1976) argued that charisma can be learned or developed: • Role modelling: • setting an example, and consistently representing and demonstrating values which are positive and attractive for followers • Confidence building: • encouraging, giving positive feedback, communicating high expectations of followers, and expressing and demonstrating confidence in their ability • Goal articulation: • setting out clear goals for the team, in a way that is compelling to followers • Motive arousal: • inspiring followers with the desire or confidence to pursue the goals
Power in organisations • Power is processual: • It emerges out of processes of interaction in organisations (and supply chains): how power is gained and used in the ongoing ‘game’ of developing and implementing strategy. • Power is institutional: • radical theories of power, such as Marxist theory, insist that ultimately power is constituted in social and economic structures and institutions, external to the organisation. • Power is internal or organisational: • ‘While processual and institutional views are important, explanations of power effects within organisations may be incomplete if determined by power constituted in institutions outside the organisation, or if the organisation becomes an abstracted “arena” for the interplay of group processes… Organisations also possess power capacities of their own.’
Forms and uses of power • Overt power • obvious, or transparent – through direct tactics such as physical or economic coercion, autocratic leadership, logical persuasion or the offering of incentives • Covert power • subtle, hidden or implied – through indirect tactics such as withholding information or excluding someone from a negotiation or network • Structural power • built into the situation, context or relationship
Sources of power in organisations • JRP French and BH Raven identify: • Legitimate power (or position power) • Expert power • Reward power (or ‘resource power’) • Referent power (or ‘personal power’) • Coercive power (or physical power) • Other researchers have added: • Connection power • Informational power • Negative power
Using expert power in procurement and supply • Staff authority • the term given to the expert power of a specialist giving advice or guidance to others, even though he has no direct line authority over their activities • Functional authority • the term used where an expert is given legitimate authority to direct the activities of others in the area of his expertise
Control in organisations • Direct control • Eg using orders and instructions, direct supervision, rules and regulations • Standardisation and specialisation (bureaucratic control or planning systems) • clear definition (or programming) of the parameters for action • Influencing • shaping the way that people think about what they should do, and bringing their values into line with those of the organisation • Performance targets and KPIs • the performance of the organisation is evaluated according to its ability to meet defined targets • Self control • personal motivation is used to influence the quality of employee input and conduct (control), without direct intervention (flexibility)
Power in supply chains • The use and leverage of buying power by large global purchasers may have the effect of: • Disempowering suppliers • Squeezing suppliers’ profit margins • Forcing suppliers to pursue unsustainable practices • Passing ‘top-down’ pressures down the supply chain • Robbing the buying organisation of the potential benefits of supply chain input • Stimulating scrutiny from regulatory bodies, media and pressure groups
Positive uses of power • Expert power may be used to develop and empower suppliers and supply chains • Referent power may be used to share and benchmark best practice standards, and to secure supply chain emulation of the buyer’s sustainability standards • Reward power may be used to exercise responsible influence over the supply chain, to secure compliance with desired sustainability standards • Reward power may be used to develop required capabilities and sustainability standards in the supply chain • Reward power may be exercised responsibly by the buying organisation through fair and sustainable pricing, rather than price leverage
Influencing and negotiation • Influencing is not a single event or series of events: it is a continual process. • Influencing need not be an intentional (or even conscious) process for either or both parties • Influencing need not involve conferring, or two-way presentation of arguments • Influencing need not end with an explicit joint agreement. • Influencing need not involve compromise or movement by both parties to reach middle ground
Objectives and outcomes of influencing attempts • Resistance • Intended influencees position themselves against the request, and actively attempt to avoid having to comply with it. • Compliance • Intended influencees are willing to do what is requested of them, but no more. • Internalisation • Intended influencees are brought to agree internally with the request, decision or viewpoint of the influencer
Facilitative communication skills • The use of questions and answers, to support information exchange • Presenting complex arguments in manageable segments • Summarising each section of a discussion or argument, to reinforce understanding • Asking for feedback, to check understanding • Sensitivity and flexibility to respond to verbal and non-verbal signals of where the other party is ‘up to’
