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    TERM PAPERON

    MANAGEMENT PRACTICESAND

    ORGANISATIONAL BEHAVIOUR

    TOPIC: LEADERSHIP FAILURE

    Submitted to: Submitted

    by:

    Faculty of MPOB

    B31, 11008093

    RS10

    03

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    PREFACE

    AS MBA Degree requires equal attention practical as well as theoretical aspect of the

    business, various problems are to be dealt with in these courses, that is why research

    programs are there to give deep as well as through knowledge of the subjects.

    I have attempted to live up these requisites while preparing this term paper. It is part of

    professional courses. With the help of term paper we can able to understand the deep

    knowledge about the specific topic assign to us.

    It is hoped that this report meets the given expectations and various requirement of the

    research.

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    Acknowledgement

    I take this opportunity to present my votes of thanks to all those guidepost who really acted as

    lightening pillars to enlighten our way throughout this term paper that has led to successful

    and satisfactory completion of this study.

    I am very grateful to Silky Sehdev Mam for her support and valuable time given without

    which the project would not have been a success.

    Lastly, I am thankful to all those, particularly the various friends , who have been

    instrumental in creating proper, healthy and conductive environment and including new and

    fresh innovative ideas for us during the project, their help, it would have been extremely

    difficult for me to prepare the project in a time bound framework.

    Name: - ANKITA

    Reg. no: - 11008093

    Roll No: - B31

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    CONTENTS:

    Introduction to leadership & leadership failure

    Objectives of study

    Causes of leadership failure

    Review of literature

    Research methodology

    Analysis

    Limitations of study

    Conclusion

    Reference

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    LEADERSHIP

    Leadership is the art of getting someone else to do something you want done because he

    wants to do it. Leadership brings together the skills needed to do these things. Leaders help

    themselves and others to do the right things. They set direction, build an inspiring vision, and

    create something new. Leadership is about mapping out where you need to go to "win" as a

    team or an organization. Leadership is dynamic, vibrant, and inspiring.

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    LEADERSHIP FAILURE:

    Leaders fail for a variety of reasonsproduct lines no longer interest customers, services are

    no longer required, and companies reorganize and downsize. Nevertheless, a number of

    leaders fail for personal rather than structural or economic reasons. They may be skilled in a

    particular area, such as accounting, engineering, or sales. They fail because they can no

    longer rely solely on their own skills and effort; that is, they have been promoted into

    positions that require them to work through others to be successful. Because they are unable

    to build a team, their management careers come to a halt. Derailment is curiously

    understudied given the frequency with which it occurs. Leadership failure occurs when a

    leader get unable to perform well. This may be due to various factors like lack of proper

    communication, lack of coordination, poor communication skills, weak relationships, person

    or job mismatch, unclear expectations and sticking with old habits. Besides these factors

    stress and adaptability to new environments may be some major factors in the determination

    of failure or success.

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    OBJECTIVES OF THE STUDY:

    The main objectives of this study are:

    1) To study why leaders fail in the organisations

    2) To find out the factors responsible for the decline in the performance of the leaders in

    the organisation and high rate of failure of leaders (Like CEOs) in the organization.

    To discuss the various issues like moral issues regarding the failure of leadership and the role

    of top management in determining the success and failure of leadership

    LEADER: AN INTRODUCTION

    Leader is a person who gets his works done with the help of other people. Personality traits

    are of utmost importance in defining a leaders personality. A leader is a person who is

    agreeable, extravert, conscientious, emotionally stable and open to experiences. These factors

    are known as Big Five traits (Goldberg, 1981). These five traits define the personality of a

    leader. Research on Big Five has found relationship between these personality dimensions

    and job performance (M.R. Barrack and M. K. Mount, 1991). Individuals who are reliable,

    well planned and organized, hardworking and achievement oriented are more successful in

    handling a job task efficiently and effectively. A charismatic leader is the one who has a

    clear vision and the one who can express his vision in terms which can be understandable to

    others and who can take high personal risk, sense others ability and feelings and can engagein unconventional norms (J.A. Conger and R.N. Kanungo, 1998)

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    CAUSES OF LEADERSHIP FAILURE

    The following are some possible causes of business failure

    A shift in focus

    Poor communication

    Risk aversion

    Ethics slip

    Poor self management

    Lost love

    Cash flow problems

    Poor business planning

    Fall in demand for the product

    Rise in costs or a lack of control of costs

    We will give a brief overview of each.

    A Shift in Focus

    This shift can occur in several ways. Often, leaders simply lose sight of whats important.

    The laser-like focus that catapulted them to the top disappears, and they become distracted by

    the trappings of leadership, such as wealth and notoriety. Leaders are usually distinguished

    by their ability to think big. But when their focus shifts, they suddenly start thinking small.

    They micro manage, they get caught up in details better left to others, they become consumed

    with the trivial and unimportant. And to make matters worse, this tendency can be

    exacerbated by an inclination toward perfectionism.

    A more subtle leadership derailer is an obsession with doing rather than becoming. The

    good work of leadership is usually a result of who the leader is. What the leader does thenflows naturally from inner vision and character. It is possible for a leader to become too

    action oriented and, in the process, lose touch with the more important development of self.

    Poor Communication

    A lack of focus and its resulting disorientation typically lead to poor communication.

    Followers cant possibly understand a leaders intent when the leader him- or herself isnt

    sure what it is! And when leaders are unclear about their own purpose, they often hide their

    confusion and uncertainty in ambiguous communication.

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    Sometimes, leaders fall into the clairvoyance trap. In other words, they begin to believe that

    truly committed followers automatically sense their goals and know what they want without

    being told. Misunderstanding is seen by such managers as a lack of effort (or commitment)

    on the listeners part, rather than their own communication negligence..

    Risk Aversion

    Leaders at risk often begin to be driven by a fear of failure rather than the desire to succeed.

    Past successes create pressure for leaders. In fact, the longer a leader is successful, the higher

    his or her perceived cost of failure.

    When driven by the fear of failure, leaders are unable to take reasonable risks. They want to

    do only the tried and proven; attempts at innovation typically a key to their initial success

    diminish and eventually disappear.

    Ethics Slip

    A leaders credibility is the result of two aspects: what he or she does (competency) and who

    he or she is (character). A discrepancy between these two aspects creates an integrity

    problem.

    The highest principle of leadership is integrity. When integrity ceases to be a leaders top

    priority, when a compromise of ethics is rationalized away as necessary for the greater

    good, when achieving results becomes more important than the means to their achievement

    that is the moment when a leader steps onto the slippery slop of failure.

    Often such leaders see their followers as pawns, a mere means to an end, thus confusing

    manipulation with leadership. These leaders lose empathy. They cease to be people

    perceivers and become people pleasers, using popularity to ease the guilt of lapsed

    integrity.

    .

    Poor Self ManagementIf a leader doesnt take care of him- or herself, no one else will. Unless a leader is blessed to

    be surrounded by more-sensitive-than-normal followers, nobody will pick up on the signs of

    fatigue and stress. Leaders are often perceived to be superhuman, running on unlimited

    energy.

    While leadership is invigorating, it is also tiring. Leaders who fail to take care of their

    physical, psychological, emotional, and spiritual needs are headed for disaster.

    Lost Love

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    Leaders need to heed is a move away from their first love and dream. Paradoxically, the hard

    work of leadership should be fulfilling and even fun. But when leaders lose sight of the

    dream that compelled them to accept the responsibility of leadership, they can find

    themselves working for causes that mean little to them. They must stick to what they love,

    what motivated them at the first, to maintain the fulfilment of leadership.

    Cash Flow

    For many small and newly formed businesses, this is often the single most important

    reasons for the failure of business. The problem arises when the money coming into

    the company from sales is not enough to cover the cost of production. It is important

    to remember that it is a case of having the money to be able to pay debts when the

    debts are due, not simply generating enough revenue during a year to cover costs.

    Some firms have periods of time when they do not receive much revenue- a good

    example is company of toys. The peak times for toy sales is November and

    December it may be 80% of all the revenue it receives in a year is received during

    these two months. The firms have to survive for the rest of the year it will have

    staff , rent, insurance, taxes, energy and so on to pay for as well as costs incurred in

    manufacturing products throughout the year.

    Poor Business planning

    Many new businesses will have to put together a new business plan to present the

    bank before it receives loans or financial help. The time and effort put into these

    plans is crucial for success. Bad planning or poor information on which the plan is

    based is likely to lead to difficulties for the firm and will lead to a leadership failure.

    Fall in Demand

    There are a number of reasons why demand might fall. Some of these might be to do with the

    business taking their eye of the ball not paying attentions to their customers need- perhaps the

    production is not upto scratch, perhaps the quality is poor, may be the price is too high- mostof these things are within the business control.

    Falling sales might be a sign that there might be something wrong with the product or the

    price or other aspect of the marketing mix. Sometimes the fall in sales might be as a result of

    the competition providing a better product or service- in part the business can do something

    about this they have to recognise it in the first place.

    Changing tastes, technology and fashion can cause demand for products to fall-the business

    needs to be aware of these trends.

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    Demand might fall for other reasons not in the firms control. It might be due to a change in

    economic climate of the country. If the economy experiencing a downturn then may be

    people may not have as much money to spend on the businesses products and services. Other

    factors might also lead to a fall in demand the product may have gone out of fashion ,may

    be peoples taste have changed all of these things could be an explanation.

    The important thing for a business is to try and recognise when demand changes and to

    understand why it is changing. If it does not then it can be too late and the business may fail

    leading to leadership failure.

    Rise in costs and lack of control over costs

    Costs of production can rise for a number of reasons. There may have been wage

    rises ,raw material prices might have increased, the business might have had to spend

    money on meeting on some new legislation or standard and so on .In many cases, a

    firm can plan for such changes and is able take them into account but if the costs rise

    unexpectedly, this can catch a firm off guard and tip them into insolvency

    Some firms face difficulties because they do not keep a close eye on their cost.

    Wastage in the workplace is a good example of this. Every price of paper, every nut,

    bolt ,screw, light left on tap left dripping and so on represents a cost to a business. If

    it does not keep control of these costs the problem can get worst. Staff using

    telephones to make personal call sending emails that are nothing to do with the

    business ,wasting paper or leaving PCs switched on all might be areas where a

    business might want to exert some control to keep cost control.

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    REVIEW OF LITERATURE

    LITRATURE REVIEW: 1

    Bentz (1985) essentially founded modern derailment research while analyzing the correlates

    of executive performance at Sears. He reported that among the persons with the appropriate

    positive characteristics (i.e., intelligence, confidence, ambition), a subset failed. Bentz

    catalogued the themes associated with failure (e.g., playing politics, moodiness, dishonesty)

    and concluded that the failed executives had an overriding personality defect or character

    flaw that alienated their subordinates and prevented them from building a team

    LITERATURE REVIEW: 2

    A study by James Bolt (1996), a consultant specializing in executive education, advocates athree-dimensional framework (business, leadership, and personal) for developing future

    leaders. The personal dimension is based on the belief that individuals cannot be effective

    leaders if they are ineffectual in their personal lives. The personal dimension concentrates on

    helping to clarify and develop the individual's purpose, vision, values, and talents to integrate

    work goals and priorities into his or her personal life. A leader can be successful if he is

    organised and can manage his personal life.

    LITERATURE REVIEW: 4

    Reports of Goleman (1995) and Cherniss (2004) suggest that EI might even play a larger

    role in leader success than IQ. Whether IQ or EI contributes the most in leader performanceis still debatable at this point. However, EI has been shown to play a significant role at all

    levels of leadership. Failure to adapt to the new environments and new positions is another

    big reason for the failure of leaders in the organizations. Study ofShannon Klie (2009) shows

    that there are many new leaders who fail because they rely on the behaviours which got them

    to the new position and dont want to learn new behaviours.

    LITERATURE REVIEW: 4

    Research of Schmidt & Hunter (1998), Sternberg (2001) and Thompson (2007) shows that

    cognitive ability of a leader directly effects performance of the leader. Schmidt and Hunter(1998) reviewed 85 years of leadership research and found that general mental ability (IQ)

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    was a strong predictor of leadership success. Over the past few years emotional intelligence

    has also become a important determinant for the determination of the failure or success of a

    leader. A large amount of data is available which shows that emotional intelligence is

    important to be considered for success or failure of a leader.

    LITERATURE REVIEW: 5

    Studies of Brown, Annie H. (2005) indicate that failure of leaders is related to lack of

    commitment, insensitivity, and lack of knowledge, close mindness, cultural differences, and

    lack of integrity, lack of support, lack of fairness, vision disparity and selfishness. So failure

    of leadership is not driven by a few factors. Rather it depends on a lot many factors.

    LITERATURE REVIEW: 6

    Challenger, Gray & Christmas (2005) studied that CEOs are being replaced at a record high

    rate of 7.6 per business day. Over 28% of these CEOs were in position less than three years,

    and 13% less than one year. Sometimes performance of the leaders who were performingreally well in the past start declining suddenly. Some leaders find themselves unable to

    handle their new positions and end up leaving their jobs. This is because the skills and

    strengths that help someone climb the executive ranks aren't the same ones needed to survive

    and thrive once there. To succeed, leaders need to know which old behaviours and beliefs to

    let go of and which ones to pick up.

    LITERATURE REVIEW: 7

    According to a 2006 study by Indiana University's Kelley School of business in

    Bloomington, IN the most common reasons for leaders not working out are: poorcommunication skills, weak relationships, person or job mismatch, unclear expectations and

    sticking with old habits. But then question arises what is in the case of leadership at big

    picture like at Enron? Research shows that this is due to stress and its impact on emotional

    and cognitive abilities (Thompson, 2005)

    LITERATURE REVIEW:8

    Study of Henry L.Thompson (2007) signifies that Tleaders often make bad decisions because

    of high levels of stress. When a leader face a stressful situation, various hormones and

    neurotransmitter which help him/her gain a short term increase in strength, concentration andreaction time. But if these conditions persist for long time, they can bring with them some

    unwanted effects. The stressful conditions which stay for longer durations effects the Pre

    Frontal Cortex (PFC). If stress level reaches its extreme, it turns off the PFC which further

    decreases IQ. Along with this stress turns on another portion of brain which is called

    amygdale. This portion of brain causes a high state of emotion and a very highly sensitive

    mental state. So a leader loses his control on emotions in this state. This results in wrong

    decisions and failure of leadership.

    LITERATURE REVIEW: 9

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    Studies ofPierre Casse andEoin Banahan (May 2010) suggest that some leaders get failed

    due to Trap of success . With the great power comes great responsibility. But at the core of

    leadership there are three symptoms which signify the loophole in leadership. These are: self

    delusion, complacency and ego. Self delusion results in a belief of self invincibility in leader.

    He starts believing that people who dont agree with him are wrong. So he requires yes menaround him. Complacency is the feeling of satisfaction with whatever you have. When a

    leader start being complacent, he starts to feel comfortable in the way things are. This

    resistance to change can be a big reason of failure. It is often the case that deep down inside

    and sometimes it is not so deep inside, the leader knows he should change. He is clever

    enough to be aware of the new balance in the situation and the need to re-invent him but that

    requires actions that can be very difficult for the leader who has been the origin of a big

    success. He will have to admit that what worked in the past is no longer valid, he is lost and

    does not have the new answers, he needs help. To admit such truths is an assault on the

    leader's ego. This trap leads to failure which can be catastrophic for leader and the

    organization.

    LITERATURE REVIEW: 10

    Study ofNatalia Hakimi,Daan Van Knippenberg and Steffen Giessner(Sep 2010) show that

    Leader empowering behaviour is an important criterion for leadership effectiveness.

    Conscientious of leader is an important factor for determining his effectiveness. Success or

    failure of leadership depends upon various factors. It can be the trust of leader in the

    followers performance or the level to which persons think a leader is reliable.

    .

    RESEARCHMETHDOLOGY

    The methodology used was secondary research. Data and findings from the research papers

    and articles of other people was selected by exploratory methods and reviewed. Brief review

    of all the articles and papers studied has been given in the Review of Literature. These all

    articles were studied deeply to gather maximum knowledge of the know hows of the

    Leadership failure. There have been only a few studies on leadership failure in general but a

    lot of studies were available discussing various factors which contribute to the success and

    failure of leadership.

    ANALYSIS

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    After conducting this study it was found that failure and success depends upon various

    factors. Leaders fail because of the lack of adaptability, poor communication skills, weak

    relationships, person or job mismatch, unclear expectations, lack of commitment,

    insensitivity, lack of knowledge, close mindness, cultural differences, lack of integrity, lack

    of support, lack of fairness, vision disparity selfishness and unbearable level of stress. BigFive traits are required in a good leader and they reflect the bright side of personality of a

    leader but there is a dark side of the personality of a person which can make subordinates

    feel like aliens and can prevent them from acting as a team . The leader with the Big five

    traits might posses this dark side too. This will result in the failure of leadership for sure.

    Leadership competences are assessed as emotional,

    managerial, and intellectual competences (EQ, MQ, IQ, respectively). Persistence is defined

    as a main characteristic of successful leaders. Persistent people stick to an idea or to a task

    and see it through to its logical conclusion. Successful individuals and organizations learn not

    to accept initial setbacks and continue pursuing a goal. The personality of the executivemanager and the team he is selecting is the key to determine the success or failure of leaders

    and teams. Managers with an average level of cognitive skills tend to select managers with

    the same or lower level of cognitive skills and style. So the skills of a leader and team do play

    important role in the success or failure of leadership.

    Trap of success also at as a major reason

    for the failure of leadership. Leaders who attain new positions in the firms feel uncomfortable

    to change the way they worked at their previous positions. Sometimes they suffer from self

    obsession, complacency and ego. This results in the ignorance of suggestions and respect of

    subordinates. A leader who is not able to keep his team aggregated has more chances of

    failure than any other leader.

    LIMITATIONS OF THE STUDY:

    This study focused on the failure of leaders due to individual reasons mainly. There are many

    other factors such as organizations condition, environmental conditions and structure of the

    organization which can lead to failure of organization and leadership. So further researches

    on this topic can focus on these aspects to explore more information about this topic.

    CONCLUSION

    Failure of leadership is something which can be of great concern for the people and

    organizations concerned. No one sets out to do a bad job as a leader. After all it has probably

    taken you years of hard work and personal sacrifice to achieve a leadership role. Sadly for

    many the excitement of achieving a leadership role is often short lived. At top levels failure

    level of leaders has been quite high in past few years. Success and failure of leadership

    doesnt depend upon a bunch of factors only. A leader is a person who has makes sure that

    everything is being done though through others only, still it is a thing which everybody cant

    do. So when a leader fails to manage his team, it poses a threat for the success of the task

    assigned to that team. So all these factors like stress, adaptability, lack of commitment, lackof confidence and lack of Big Five traits accounts for the failure or success of the leaders.

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    Factors like Big Five traits matter to be viewed only at the time of recruitments to select right

    person for the right job. But there are some factors which account for success or failure of

    leaders in the real life situations. These include persistence, emotional intelligence, level of

    cognitive skills of leader and the team he has chosen. Leader should be strong enough to

    handle any situation but not rude. A good leadership traits are- kind and humble but notweak, proud but not arrogant, humorous but not silly. Leaders should avoid trait like bad,

    arrogant, corrupt, evil etc.

    REFERENCES

    1) Challenger, Gray & Christmas, Inc. (2005). Biggest CEO turnover year on record.

    http://www.challengergray.com

    2) Thompson, H. (2005). The impact of stress on the Bar On EQ-i reported scores and a

    proposed model of inquiry. High Performing Systems, Inc., Technical Report 15-5.

    http://www.hpsys.com

    3) Schmidt, F. L., & Hunter, J. E. (1998). The validity and utility of selection methods in

    personnel psychology: Practical and theoretical implications of 85 years of research

    findings.Psychological Bulletin, 124, 262- 274.

    http://www.hpsys.com

    4) Sternberg, X. (2001). http://www.hpsys.com

    5) Cherniss, C. (2004). The business case for emotional intelligence. Retrieved June 10,

    2005, from The Consortium for Research on Emotional Intelligence in Organizations.

    http://www.eiconsortium.org

    6) Goleman, D. (1995). Emotional intelligence: Why it can matter more than IQ. New

    York, NY: Bantam Books

    http://www.hpsys.com

    7) Shannon Klie. Canadian HR Reporter. Toronto: Apr 20, 2009. Vol. 22, Iss. 8; pg. 12, 2

    pgs, Failing to adapt linked to leadership failure

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    8) Brown, Annie H., Ph.D., Walden University, 2005, A study of leadership failure:

    Perceptions of leaders within a community college system

    9) 'Success' - a leadership trap

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    Pierre Casse, Eoin Banahan.Training Journal. Ely: May 2010. pg. 46

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    10) leader Empowering Behaviour: The Leader's Perspective, Natalia Hakimi,Daan Van

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    11) Bolt, J. (1996), "Developing three-dimensional leaders", in Hesselbein, F.,Goldsmith, M. and Beckhard, R. (Eds), The Leader of the Future, Jossey-Bass, San

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