Academic journal article SA Journal of Industrial Psychology

The Role of Leadership in Shaping Organisational Climate: An Example from the Fast Moving Consumer Goods Industry

Academic journal article SA Journal of Industrial Psychology

The Role of Leadership in Shaping Organisational Climate: An Example from the Fast Moving Consumer Goods Industry

Article excerpt

Introduction

Key focus of the study

Today's changing technological landscape presents organisations, leaders and employees with a multitude of challenges and opportunities. Increasing volatility and turbulence characterise the business world. According to the 2012 International Labour Organization (ILO) Report on global employment trends, the world faces the 'urgent challenge' of creating 600 million productive jobs within the next 10 years in order to generate and achieve sustainable growth and preserve social cohesion (see ILO [n.d.]). In addition, The Global Competitiveness Report 2011- 2012 showed that South Africa ranked fourth (of 144 countries surveyed) in financial market development. This shows confidence in the South African market, whereas confidence is only slowly returning to other countries across the globe. The report also showed that South Africa performs relatively well in complex areas like business sophistication (38th), innovation (41st), benefiting from sound scientific research institutions (30th) and strong collaboration between universities and the business sector in innovation (26th).

However, South Africa needs to address a number of weaknesses. They include poor labour market efficiency, which rigid hiring and termination of employment practices (139th) characterise, the inflexibility of organisations in determining compensation (138th) and significant tensions in employee-employer relationships (138th). All these problems require strong leadership and high quality relationships between employees and leaders so that they can work together to find appropriate solutions.

Therefore, it is essential to improve leadership and the organisational climate that is necessary for improved productivity, market share growth and profitability. This is important, given South Africa's unique position of being an emerging market economy with a diverse workforce, affirmative action policies and an open economy that gives its workforce little protection.

To address these weaknesses and to improve South Arica's overall competitiveness, researchers need to undertake empirical studies. These studies should explain the nature, and confirm the existence, of a relationship between leadership style and organisational climate in South Africa and how it can affect employees' motivation levels, job performance and job satisfaction (Cloete, 2011; Greyvenstein, 1982).

Background to the study

Researchers have conducted and recorded extensive research on leadership and various organisational outcomes (Haakonsson, Burton, Obel & Lauridsen, 2008). A number of studies have explored the relationship between leadership and organisational culture (Block, 2003; Mineo, 2009; Ogbonna & Harris, 2000), leadership and employee engagement (Lockwood, 2008; Stroud, 2009), leadership and organisational performance (Chung & Lo, 2007; Jing, Avery & Bergsteiner, 2011; O'Regan, Ghobadian & Sims, 2005; Rowold, 2011) and leadership and productivity (Kungis, 2006).

A number of studies have explored and investigated the relationship between leadership and climate across the globe (Bishop, 2003; Cloete, 2011; Sawati, Anwar & Majoka, 2011; Tajasom & Ahmad, 2011). However, there is still a dearth of empirical studies that explain the nature, and confirm the existence, of a relationship between leadership style and organisational climate in South Africa (Cloete, 2011). This topic is particularly interesting because of South Africa's unique position of being an emerging market economy that a diverse workforce, affirmative action policies and an open economy characterise.

Whilst it is clear that there is a relationship between leadership and various measures of organisational outcomes, only a few studies have provided valuable insights into the relationship between leadership and climate.

For example, Tajasom and Ahmad (2011) explored the effect of leadership style on school climate from the perspective of teachers in Malaysia. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.