Transformational Leadership & Family Managed Enterprises
The novelty of this brief article lies in the roadmap it provides to the patriarchs in India and GCC to change the way they perceive, behave and act; view nurture and empower employees; and harness relationship to improve internal culture of family enterprises. Such transformation enhances participation of employees in decision making to acquire and utilise resources efficiently. Such initiatives complement innovation of products and services, resulting in growth and sustainability of family enterprises in India and GCC region, which was more of an exception than a norm. The impact of such a change benefits the economies of the region.
The roadmap presented in this project has not been reported thus far. If implemented rigorously may yield salutary results in the context of family enterprises.
Leadership Practice Change & Family Firms
This article explores how the adoption of transformational leadership by the patriarchs in India and GCC motivate them minimize reliance on autocratic practices, like direct, order, control, threaten, reprimand and punish, to govern the actions of employees and get jobs done in family enterprises. It reveals why the mitigation of reliance on such practices influences the patriarchs to abandon heightened focus on nepotism, generational knowledge transfer, empowerment of family members and their authorization. The exploration clarifies how such change is influenced when the patriarchs embrace transformational leadership traits, like idealized inspiration, inspirational motivation, intellectual stimulation and individualized consideration, which elevate learning, innovative capabilities and competencies of employees to deliver differentiated products, attain business excellence, sustain growth and compete.
Autocratic Leadership & Performance of Family Firms
Family enterprises in India and GCC are weak compared to global corporations, ill prepared to compete and circumvent challenges posed by economic and political changes. Such inabilities are influenced by the motivation of patriarchs of family enterprises to resist self-transformation, neglect performance improvement, attract and harness talent. These are the consequences of their misplaced faith in traditional leadership practices that demotivate employees, constrict team building, impoverish decision making, retard resource management efficiency and hinder development of new products and their delivery, constraining sales, cash-inflow, growth and the ability to prosper in a competitive environment.
Transformation & Relevance
Transformation of the above failures requires patriarchs in family enterprises in India and GCC to discard autocratic practices, adopt transformational leadership practices, harness talents, empower them to take business decisions and hand over power to deserving employees. Such actions are considered necessary to improve strategy development, decision making, management of business interests and wealth creation. These influence the growth of firms to satiate the aspirations of family members, investors and other stakeholders.
The leadership practice change is required to ensure the growth of the economies of India and GCC, which are supported heavily by private enterprises that are engaged in trading, financial services, real estate and construction. Family enterprises in these business segments grew rapidly upto 2007, which is attributed to favourable economic conditions, protectionist policies of governments, lax laws, easy access to fund and other resources.
However, the participation of India and countries in the GCC in World Trade Organization, subsequent liberalization of trade policies and resultant competition crippled the growth of family enterprises. Alteration of these requires patriarchs to adopt new leadership style, like transformational leadership, improve governance, change organizational structure, harness talents, mitigate centralization, revitalize strategic business units and take risks. Such initiatives are desired to change the family enterprises into thinking and responsive entities. They can be associated to the interest of patriarchs in family enterprises to repudiate the propensity to dictate, dominate, discipline, censure, punish employees and promote family kith and kin. The correction of such dysfunction is shaped by the adoption of transformational leadership qualities by patriarchs, empowering and authorizing employees to take decisions, innovate new products, improve performance and compete in a market.
Leadership Transformation & Family Firms
Patriarchs in family firms need to change and reject autocratic practices to motivate employees, enrich work culture and strengthen delivery of differentiated products. The realization of these is linked to the drive of patriarchs to decentralize, empathize, communicate objectively, intervene selectively and nurture talents. Patriarchs in family enterprises are required to cultivate such qualities to inspire employees to assume responsibilities, act objectively and attain the goals set. They represent change of patriarchs into transformational leaders, evoking passion of employees in family enterprises to attain lofty goals. The attainment of these enables such firms to grow and occupy a distinct position in a market. The validity of such assumptions has been assessed. It may shed light about how the adoption of transformational leadership by patriarchs enhances the resolve of employees to innovate differentiated products, deliver them and compete in global market.
This article unravels why the adoption of transformational leadership qualities by patriarchs-
· motivate employees in family enterprises to learn. It clarifies how learning enhances capabilities and competencies to innovate. Their elevation is central to organizational asset management excellence, product development and value delivery to the customers.
· stimulate culture change and promote learning. When a family firm is transformed into a learning entity, the elevation of intellectual prowess of employees is feasible. It empowers them. The graduation of family enterprises in India and GCC and their performance excellence are thus related.
The necessity for transformation of patriarchs and the importance of their adoption of transformational leadership style is established. An analysis of this paper helps to understand why autocratic practices of patriarchs stifle the dynamism of family enterprises to deliver products and services efficiently. The failure to deliver these is attributed to the faith and belief of patriarchs in centralization, close supervision, intervention and control to motivate employees to adhere to orders. Such actions diminish creativity of employees in family enterprises. The alteration of such repressive practices necessitates the adoption of the following traits:
Internalization of the traits enables patriarchs to behave in admirable ways, articulate vision of firms eloquently, challenge assumptions, take risk and solicit ideas, and attend to the needs of employees. Their passion to excel is influenced by such qualities. Central to such a change is transformation of family enterprises into learning organizations. The necessity to demonstrate conviction, challenge employees, inspire creativity and listen to their concerns is thus revealed.
Transformational Leadership & Relevance of Knowledge Management
The above inference justifies the need to embrace transformational leadership traits. But it does not explain which specific initiatives of patriarchs are desired to transform a family firm into a learning entity. Understanding about such initiatives is feasible when the works of major researchers are reviewed. The need to transfer the following knowledge types to elevate skills and capabilities of employees in family enterprises in India is understood-
The patriarchs of family enterprises in India and GCC are required to support endowment of such knowledge forms to improve resource management decisions. The attainment of this is feasible when they attach priority to mentoring and training of employees, rendering it possible to disseminate hitherto unknown knowledge to empower employees. Their empowerment is necessary to promote decentralization, new decisions, unique actions, product differentiation and stay ahead of competition.
The above analysis emphasises the need to explore how the transformational leadership traits when embraced by patriarchs enhance the abilities of employees in family enterprises to think and act judiciously. The exploration is required to find out how the traits influence their behavioural changes, inspiring employees to accept the patriarchs as role models and respect their views. Such inspiration heightens their motivation to explore new frontiers and sustain business excellence.