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Organizational Structure & Leadership Style in M/s Larsen & Toubro , Mumbai.
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Organizational Structure & Leadership Style in M/s Larsen & Toubro , Mumbai.

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A project report by a group of Management stundents of NITIE, Mumbai on Organizational Structure & Leadership Style in L&T \'s Aerospace SBU in Mumbai.

A project report by a group of Management stundents of NITIE, Mumbai on Organizational Structure & Leadership Style in L&T \'s Aerospace SBU in Mumbai.

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  • 1. Larsen & Toubro Limited Principles of Organization & Management Assignment On Organizational structure and Leadership style In M/s Larsen & Toubro Limited Under the guidance of, Dr. Sumi Jha Asst. Professor,NITIE,Mumbai Group Members Ram Mohan Thakur (82) Ramchandra Chikhalagi (83) Ramesh babu (84) Rohit Ralh (85) S S Karthik Vignesh ( 86) Subhrajyoti Parida (124) Principles of Organization & Management Page 1
  • 2. Larsen & Toubro Limited INTRODUCTION Larsen & Toubro Limited is India’s premier technology driven company with leading edge capabilities in the fields related to Engineering, Infrastructure & Basic Industries. “It’s all about Imagineering” is the motto of LARSEN & TOURBO LIMITED profoundly known as L&T. L&T is one of India’s best-known multi-product engineering organizations involved in over thirty distinct field of engineering. Under the dynamic leadership of Mr. A.M. Naik, L&T has its presence worldwide and is one of the leading players in its product segments. VISION “L&T shall be a professionally-managed Indian multinational, committed to total customer satisfaction and enhancing shareholder value.” “L&T-ites shall be an innovative, entrepreneurial and empowered team constantly creating value and attaining global benchmarks.” “L&T shall foster a culture of caring, trust and continuous learning while meeting expectations of employees, stakeholders and society.” CURRENT SCENARIO In the decades that followed, the company grew into an engineering major under the guidance of leaders like Mr. N. M. Desai, Mr. U. V. Rao, Mr. S. D. Kulkarni and Mr. A. M. Naik. Today, L&T is one of India's biggest and best known industrial organizations with a reputation for technological excellence, high quality of products and services, and strong customer orientation. The company has manufacturing facilities in India, China, Oman and Saudi Arabia. It has a global supply network with offices in 10 locations worldwide, including Houston, London, Milan, Shanghai, and Seoul. It is also taking steps to grow its international presence. Manufacturing facilities: 12 Locations. Sales offices: worldwide. Principles of Organization & Management Page 2
  • 3. Larsen & Toubro Limited Branch offices: 10. Regional offices: 5. Resident representatives: 10. Registered head office: L&T House, Ballard Estate, and Mumbai. TECHNOLOGY The company meets the challenge with about five decades of experience in designing, manufacturing and installing plant and equipment’s for major projects in absorbing and adapting technology world wide, its skill in developing India and abroad. L & T expertise’s has grown out of its mastery over indigenous know-how, its versatility diversifying into various fields. Behind it all is the spirit of enterprise and an obsession for quality and customer service. BUSINESS RANGE 1. Core Sector - Heavy engineering, plant and equipment for steel, chemical, paper, cement, nuclear and space exploration. 2. Electrical - Electrical low-tension switchgear, Industrial drives and controls, Computer peripherals, Telecommunication equipment, Medical, Test and measuring instruments. 3. Others - Construction equipment, Industrial valves, Welding alloys, Petrol pumps, Rubber machinery, Shipping, and extrusion machinery. SALIENT FEATURES OF L&T 1. A public limited company. 2. Over one million shareholders. 3. A professional managed company. 4. Numerous subsidiary and associate companies. 5. Largest engineering and Construction Company in India. Principles of Organization & Management Page 3
  • 4. Larsen & Toubro Limited OVERVIEW – LARSEN &TOUBRO LIMITED The following diagram shows the business portfolio of Larsen & Toubro Limited Fig.1- Business Portfolio of Larsen & Toubro Limited HEAVY ENGINEERING DIVISION Heavy engineering division is one of the oldest division of L&T. Heavy Engineering division deals with the marketing, designing, engineering and manufacturing of “one off” equipment and machinery’s required for basic industries in the core sector, such as Fertilizers, Petroleum, Chemical, Power Plant, Cement, Nuclear, Aerospace, Defense, Oil, etc. L&T Heavy engineering division (HED) activities are organized under self reliant strategic business (SBU’s) catering to the needs of core sector industries through supply of equipment to process plant industries, Nuclear power, Defense & Aerospace sectors. Principles of Organization & Management Page 4
  • 5. Larsen & Toubro Limited Heavy engineering division has the art manufacturing facilities which are capable of meeting the challenges of technology, quality conformance & delivery, while ensuring cost competitiveness. HED is now at the threshold of a major growth phase in the world market with a successful entry into the new business of key equipment for coal gasification, viz. Coal gasifiers and Syngas coolers. Large number of critical Equipment have been exported to every continent including North America, Europe, The middle East, south Africa, the Former soviet union, Australia and Asia- pacific region. RANGE OF PRODUCTS Typical products manufactured including pressure vessels, ultra high pressure vessels, columns & towers, multi wall converters, high pressure heat exchanger, Reactor vessels, surface condensers, water heaters, end shield, steam generator, test separator, inlet manifold, propeller shafting, stern gears, missile launchers, cement machinery, mineral processing kilns, ship building all of which high technology and intricacies of manufacture. FUNCTIONAL GROUPS IN STRATEGIC BUSINESS UNITS OF HED The following are the functional units of Strategic business units Marketing & sales Design & product Engineering Material procurement & control Project Management Manufacturing Logistics Each of strategic business unit is almost self-reliant. Principles of Organization & Management Page 5
  • 6. Larsen & Toubro Limited SUBJECT OF STUDY: AEROSPACE STRATEGIC BUSINESS UNIT Aerospace Strategic Business Unit mainly focuses on design, manufacture of products in the field of Aerospace and Aviation. L&T manufactures the motor casing of the Polar Satellite Launch Vehicle (PSLV) as well as the booster of the Geo-stationary Satellite Launch Vehicle (GSLV) also the assembly & subassembly of the SADM (SOLAR ARRAY DEPLOYMENT MECHANISM). L&T has been one of the major participants in the Indian Space programmes. It has a wide spectrum of customers which include Boeing and Airbus in the International Segment and ISRO, VSSC and HAL in the domestic segment. EXISITING ORGANIZATION STRUCTURE The prevalent structure in Aerospace SBU is more of functional type wherein a functional head has been assigned for each of the broadly categorized functions in the SBU vis-à-vis Design and Development (D&D), Project Management, Quality Control, Marketing, and Production. All the functional heads report to the Head of the Strategic Business Unit (SBU), i.e General Manager in this case. Each of the functional department is headed by a Dy. General Manager who is reported by Manager (s).Each of the Managers has Engineer (s) under his direction, and Engineers have Junior Engineers (or draftsmen in case of D&D) reporting to them. The detailed organizational structure followed in the concerned SBU is in the next page. Principles of Organization & Management Page 6
  • 7. Larsen & Toubro Limited LEADERSHIP TYPE(S) IN AEROSPACE SBU The leadership style followed in L & T Aerospace SBU is more of participative and free reign type i.e. Democratic and laissez-Faire type. (Based on feedbacks from L&T employees as per Annexure II, III and IV). There are five departments each headed by Deputy General Manager and have co-cordial relation within the group and subordinates. The General Manager has good control over all the departments. Principles of Organization & Management Page 7
  • 8. Larsen & Toubro Limited Aerospace SBU of L&T is facing problems such as Lack of cross-functional expertise is lacking which is required to manage the versatile aerospace business. Functional groups restricting their interest and professional commitment within their departments instead of taking it beyond to meet the organizational requirement as a whole Responsibilities not taken by the employees beyond their scope Feel of ownership of the project is absent and when a problem arises, people start playing the blame game Principles of Organization & Management Page 8
  • 9. Larsen & Toubro Limited LITERATURE REVIEWS A) ORGANIZATIONAL STRUCTURE I) “The common label used to describe it is 'Matrix' though there is at present no agreed definition of the term. Usually the name is applied to structures which involve some form of dual or multiple authorities, a 'two boss' situation. -Para 1, Pg.111, Knight,Kenneth, 1976, MATRIX ORGANIZATION: A REVIEW The Meaning of Matrix Organization As per the author, following is the meaning of the matrix organization “Matrix organization is seen as a 'mixed' organizational form in which the normal vertical hierarchy is 'overlayed' by some form of lateral authority, influence or communication. As a result it contains roles which are subject to dual influence and it emphasizes coordination through lateral relationships which cross departmental boundaries. The word 'overlay' is used frequently and expresses the same image as the word matrix itself. This is, that the normal hierarchical groupings of an organization (usually functional) can be represented by the columns, and the lateral, coordinating ones (often of project, product or business area) by the rows of a matrix or grid. The cells of the matrix contain people who belong to more than one grouping.” -Para 7 & 8, Pg.113, Knight,Kenneth,1976, MATRIX ORGANIZATION: A REVIEW Review w.r.t the organizational structure of L&T Aerospace SBU The existing organizational structure in Aerospace SBU of L&T is pre-dominantly functional type wherein the SBU has been departmentalized based on the key functional or business areas. Each of the functional areas has Managers reporting to the Head of that department, who in turn has Engineers and other junior level manpower to execute the directions from the management. All the heads of the functional areas ultimately report to the Head of the organization. Principles of Organization & Management Page 9
  • 10. Larsen & Toubro Limited Unlike in matrix type organization, as described by the author, as far as reporting to multiple authorities is concerned, managers, engineers and junior engineers report to only one authority and take directives from him only. In matrix type, roles and responsibilities tend to get influenced by lateral relationships which cross departmental boundaries, as the concerned personnel has to report to two bosses,(boss of his department and a lateral department) but same is the not the case of the functional type structure in our concerned organization , wherein directions and responsibilities flow linearly from top to bottom or vise-versa, within a department or a functional area. II) “The relationships organizations-suppliers-customers have recently known major changes in the structure of services and have made the organization develop its managerial and professional competencies in order to do project. The qualified organization is the most trust-worthy in the process of doing a project. The participation of an organization in doing projects depends on a multitude of factors. Out of these factors, the structural organization comes forth, as it represents the variable with the most important impact on a project’s quality, costs and lead time. From the organizational point of view, the matrix structure is frequently chosen for projects. The matrix structure generally coexists with the line structure. The two structures are contrastive. The line structure is based on the unity of command principle and is not open to cooperation and dialogue. The matrix structure encourages cooperation and communication, favours conflict, which is considered here a healthy and essential process. The matrix structure and the line structure claim their right to initiative. Conflict and the multidimensional integration of multiple hierarchies can be negotiated through the matrix structure.” -Abstract, Pg. 15, Constantinescu, Prof. Dumitru, Ph. D, 2007, THE DYNAMICS OF THE MATRICS STRUCTURE Review w.r.t the organizational structure of L&T Aerospace SBU Objective: Determine the contribution of organizational structure towards organizational capability to successfully execute projects, and grow as a qualified organization. Principles of Organization & Management Page 10
  • 11. Larsen & Toubro Limited Variables: Managerial and professional competencies though matrix type structures, its comparison with line structures (i.e, only product, or functional organizations). Findings: Matrix structure can be adopted more easily in the organizations that have a project culture and are open towards multidimensional integration of multiple hierarchies. The implementation of the matrix structure is much more difficult for the organizations that are more adamant towards protection of single dimensional hierarchic authority, usually found in case of line structures. Conclusion: Matrix structure, as opined by author, facilitates multi scale communications, co operations, and healthy discussions from both vertical and lateral dimensions, as compared to line structure where it tends to become more important to preserve hierarchical territories. For successful execution of projects in terms of cost, quality and lead time , matrix structure is advisable owing to above findings. In the subject organization, the existing structure is more of functional type, but as expressed by the management, organization is in a process of transiting to a matrix structure, so as to make them more “qualified” and competent in handling projects. III) Objective: To investigate the organizational parameters that were hindering smooth transitions of a Hong Kong based PSU from inflexible functional structure to a matrix structure and understand the nature of problems arising out of cultural change at the work place, change in commitment level and professional obligations on account of change in organizational set up in any organization transiting from functional to matrix type structure. Variables: Cultural change, commitment level, defining of professional roles and obligations in matrix structure as compared to functional set up. Principles of Organization & Management Page 11
  • 12. Larsen & Toubro Limited Findings: Following important issues need to be addressed for successful and smooth transition from functional to matrix type of organization;- • “Change has to be culturally acceptable and promoted in a sensitive manner, • Commitment has to be built up in the group based upon relationships, • The role of the group is highly significant in successful change.” -Pg.673, Rowlinson, Steve. 2001, Matrix organizational structure, culture and Commitment: a Hong Kong public sector - case study of change Review w.r.t the organizational structure of L&T Aerospace SBU An organization undergoing transition from functional to matrix typefaces hindrances pertaining to cultural change, commitment level and degree of obligations which earlier existed. Author has determined that cultural change primarily involves change in roles, tasks, power and interpersonal capabilities due to transition in the organizational structure. It was found that the change in structure to matrix type called for decentralization and sharing of authority and decision making power along with more of open discussions , which was not so easily acceptable to employees and managers while the transitions was in progress. As far as commitment level is concerned, author has categorized commitment into affective, normative and continuance types. Employees working in the organizations undergoing change in structure were found to be having more continuance type of commitment (i.e, more comfortable with the existing pattern of organizational set up) and lesser affective commitment (i.e, commitment towards the organizational benefit as a whole) and normative commitment (i.e affinity and loyalty towards organization set guidelines and values for change in setup). Author has further emphasized that to counter above obstacles, it is required to culturally change the organization in a sensitive manner and encourage more of affective and normative commitments through forging of group based relationships. The existing organizational structure in the subject organization is functional type, and is similar to the case study carried out by the author which is under transition to matrix type. Based on the interviews conducted of several key personnel and employees in the organization, we could conclude Principles of Organization & Management Page 12
  • 13. Larsen & Toubro Limited that the management is quite cautiously bringing about the cultural change and the promoting more of affective and normative commitments among the employees and their bosses through various HR initiatives. IV) “No company is completely free of organization problems, and companies that use the matrix form arc no exception. Some of the ailments matrix organizations suffer, such as power struggles and collapse during an economic crunch, other companies suffer as well. But many of the problems a matrix organization falls prey to occur because of the nature of the matrix design itself. For instance, it is not difficult to understand how managers in a matrix organization, where there are dual chains of command, might develop too little or too much control, thus succumbing to anarchy or decision strangulation.” - Pg.131, Davis, Prof. Stanley M. & Lawrence, Prof. Paul R.,1978, Problems of matrix organizations - Against the above problems, author has suggested a few of the following preventive measures in an organization employing Matrix type structure: “Organizations should not rely too much on an informal or latent matrix to coordinate critical tasks. Relationships between functional and product managers should be explicit so that people are in approximate agreement about who is to do what under various circumstances. “ “Equal strength on the part of the two parties, however, will prevent struggles from reaching destructive heights. Friendly competition should be encouraged, but all-out combat severely punished.” - Para : Preventions , Pg.133 & 134, Davis, Prof. Stanley M. & Lawrence, Prof. Paul R.,1978, Problems of matrix organizations Review w.r.t the organizational structure of L&T Aerospace SBU In accordance to the author, like any other organizations, matrix structures organizations also have some drawbacks, primarily because of the design of matrix structure itself, where two authorities belonging to different dimensions tend to exercise their authority too much to an unhealthy level .The reporting agent also fails to perform owing to constant pressure of complying with a particular “boss”. Principles of Organization & Management Page 13
  • 14. Larsen & Toubro Limited In other words, performance level of junior level management is often hampered as they fall victim to the aggressive competition between the reporting authorities. As suggested by author, an organization can deal with such problem in matrix structure by confining the level of confrontation between the two bosses within friendly levels encouraging more of cooperation, thus preventing it from becoming an “all-out combat”. Besides this, organizations should make it mandatory for two bosses to come to an agreement to decide the magnitude of involvement and authority under several distinctly defined situations. This will help the organization is benefitting from the matrix structure. The subject organization has presently functional type structure, but in order to mitigate problems faced during project executions and become more professional competent, it is changing over to a matrix type. During this transit, the management is taking care of the above stated problems and also in the process of implementing the measures to avoid matrix related problems. V) Further to above, in the following abstract, authors have proposed “Emotional Intelligence” as a solution, to tackle the problems in Matrix type Organization:- “Despite its strengths, the matrix has inherent problems. Earlier studies have primarily addressed structural problems. In this paper, we identify four interpersonal challenges that impede matrix performance misaligned goals increase competition among employees, roles and responsibilities are unclear, decision-making is untimely and of possibly low quality, and silo-focused employees do not cooperate. We propose that emotionally intelligent employees can function better in the matrix. We offer solutions for both managers and employees to improve performance in matrix organizations by applying the four components of emotional intelligence, specifically, managing, understanding, using, and perceiving emotion, to each interpersonal challenge.” - Abstract , Pg.437 ,Sy, Thomas & Coˆte, Ste´phane ,2003, Emotional intelligence-A key ability to succeed in the matrix organization Review w.r.t the organizational structure of L&T Aerospace SBU Principles of Organization & Management Page 14
  • 15. Larsen & Toubro Limited Objective: Solving the problems in Matrix structure through Emotional Intelligence. Variables: Increase competition among employees, unclear roles and responsibilities, prolonged decision-making making it most possibly low quality, and lack of cooperation from silo-focused employees Findings: Four components of emotional intelligence, such as managing, understanding, using, and perceiving emotion, can be effectively employed in overcoming interpersonal challenges described above arising in a matrix organization. Conclusion: As discussed by the authors, matrix structure in large organizations seldom face the interpersonal challenges in the form of increased competition among employees, unclear roles and responsibilities, prolonged decision-making often leading to a low quality type, and lack of cooperation from silo-focused employees (those who restrict their loyalty towards a particular sub unit, and often keep the interest of their “favourite” sub unit above that of the organization as a whole. All these incidents, if not catered suitably, may start affecting the productivity of the organizations and gradually result to the collapse of the same. Author has advocated emotional intelligence as a key to harness success out of matrix structure. Emotional intelligence, as per author, has four vital components such as managing, understanding, using, and perceiving emotions, which an employee or his authority can develop to become emotionally intelligent enough to tackle the unhealthy conflicts in matrix type setups , encourage conducive and co-operative interactions among the different bosses and the employees, reduce silo- focused type of mentalities and hence, ultimately attribute to qualitative and organization friendly decisions. In the context of the subject organizations, as stated earlier, matrix type structure is under implementation. During this process, top management is taking every possible care for inculcating emotional intelligence in employees and managerial levels through dedicate HR related trainings schedules, so as to equip them with the right genre of interpersonal capabilities to face the challenges of matrix organizations. Principles of Organization & Management Page 15
  • 16. Larsen & Toubro Limited Suggestions On account of above reviews and findings from five different works, following are our suggestions. Matrix structure leads to decentralization of authority, open discussions, sharing of roles and tasks, develop multi-faceted capabilities in handling multi-dimensional functional areas, and hence, promote professional and managerial growth making the organizations more projects oriented. But these plus points also come with inherent structural and interpersonal problems, which need to be addressed through, Defining the sphere of authority for the cross functional bosses. Establishing an agreement between the heads of the cross functional depts. to demarcate their respective roles in case of different situations. Discouraging antagonism or unhealthy competitions among cross-functional depts. in matrix structure. Silo-focused attitude should be regulated and trained to dedicate their loyalty for the organization as a whole. Emotional intelligence should be encouraged by training the concerned personnel how to manage, understand, use, and perceive emotions in a matrix type setup. If the above issues are catered adequately in a matrix structured organization, then decision making can be made more effective and faster, it shall broaden the cross functional expertise of the employees and overall improve the productivity of the organization. In our organization which is the subject of study the present structure is functional type. It is primarily a strategic business unit of a much versatile and large organization, but it functions like self – reliant and autonomous set up. Principles of Organization & Management Page 16
  • 17. Larsen & Toubro Limited All these are affecting the productivity of the organization and also delaying the project deliveries. Hence, based on the interaction with the L&T authorities and feedbacks, it is recommended to implement Matrix type structure. In the proposed Matrix structure, functional heads can be placed linearly below the organization head (i.e., General Manager), and at the same time, heads of departments catering to specific products such as aerospace structures, engine components, casings and parts of launching vehicles etc. or based on the customer profile such as international, domestic, govt. sector or private sector customers, can be allocate vertical position in the structure. The operation and middle level management groups can be made to report to both functional and product/customer based departmental heads. In our view, matrix structure can mitigate the problems arising in L&T’s Aerospace SBU and improve the productivity of the same. LITERATURE REVIEWS B) LEADERSHIP STYLE I) Carter McNamara (1996) has given basic overview of leadership in organization. According to him a leader is interpreted as someone who sets direction in an effort and influences people to follow that direction. He explained leadership styles in following three ways- 1. The Autocrat: The Autocratic leader dominates team-members, using unilateralism to achieve a singular objective. This approach to leadership generally results in passive resistance from team-members and requires continual pressure and direction from the leader in order to get things done. Generally, an authoritarian approach is not a good way to get the best performance from a team. 2. The Laissez-Faire Manager: The Laissez-Faire manager exercises little control over his group, leaving them to sort out their roles and tackle their work, without participating in this process himself. In general, this approach leaves the team floundering with little direction or motivation. Principles of Organization & Management Page 17
  • 18. Larsen & Toubro Limited 3. The Democrat: The Democratic leader makes decisions by consulting his team, while still maintaining control of the group. The democratic leader allows his team to decide how the task will be tackled and who will perform which task. Aerospace SBU follows participative & free reign type of leadership style. Each task is discussed among the group and upon agreement by majority final decision is taken. The managers have very good control over the group members. They share the leadership power with subordinates. II) Leopold Vansina (1999) did an action research study, the purpose of which is to observe and explore the ways in which a successful general manager sets up and engages in a process of large organizational change of his business unit. Variables: Successful general managers have an open-systems framework and a holistic approach to organizations, which they want to “get to know” to move them towards success. Successful general managers focus action, search commitment and establish progress follow-ups. Findings: Eight shared features that typified their management behaviour were identified. First, these successful general managers manage with care the different interfaces of their companies: headquarters, the business, and the sociopolitical environments. Second, successful managers direct their efforts towards the “embodiment of purpose” within the whole company. Third, these managers manage the whole company, not just their boards. Fourth, they shape or strengthen the identity of their respective companies. Fifth, these managers are part of the system. They operate from within. Sixth, successful general managers build on the company’s foundations with simple means. Seventh, these managers exert personal leadership. Eighth, successful general managers work through people for whom they care. All of the successful general managers, when they still qualified in terms of age, were eventually promoted to the board. Conclusion: Pattern of eight behavioural characteristics of successful general managers is still valid but the way they achieve an “embodiment of purpose” is likely to be different. They cannot jump from the Principles of Organization & Management Page 18
  • 19. Larsen & Toubro Limited painful experiences of past restructuring programmes to enthusiastic commitments to new strategic objectives. Again she concluded that leaders have a great capacity to be with their people and to be in touch with the deeper emotional life of the organization. Managers in L&T handle their as well as subordinates’ board. As separate executives are appointed for each sector so there is well co-ordination between everyone. Here the above pattern of eight behavioural characteristics is not fully valid. The managers manage only their separate division not the whole company. They co-operate to get good output in each division. III) Amy H. Amy (2007) studied the facilitative leadership in learning organizations to consider how leaders contribute to and detract from learning at individual and organizational levels in the corporate context. Variables: The Fortune 500 Company was considered for the study. The participants gave the most emphasis to emotionally intelligent communication as a prominent feature of facilitative leadership. The study then proceeded with critical incident interviews with managers and their direct reports, resulting in a cross-case content analysis of four categories: triggers, beliefs, behaviours and outcomes. Findings: Learning leaders have several distinct characteristics and skills, but the study confirmed the importance of facilitative leadership while highlighting both cognitive and emotional aspects of learning. It also pinpointed mechanisms for institutionalizing learning. Conclusion: The study offers empirical support for the centrality of facilitative leadership while pinpointing communication competence and emotional intelligence as essential aspects of effective learning leadership. The employees in L & T are generally young and have higher chances of growth in case of promotion to upper level. During this course there is competition amongst all employees as performance is the main criteria for promotion. They are very intelligent but somewhat emotional in communication. The present leadership style is comfortable considering future status. Principles of Organization & Management Page 19
  • 20. Larsen & Toubro Limited IV) Tania Bucic, Linda Robinson and Prem Ramburuth (2010) did qualitative research utilizing the case study method. This research had two main objectives: (1) To identify leadership styles commonly implemented in teams to generate insights into what top management team (TMT) leaders do and how team members interpret their actions (2) To unveil how leadership styles influence learning in teams through qualitative empirical testing of the conceptual model initially proposed by Vera and Crossan (2004). Findings: The evidence showed that the leader has an effect on the team and leader’s leadership style is critical to team level learning and related performance. Ideal managerial leadership style is the ambidextrous leadership approach. Characterized by a combination of transformational and transactional leadership styles, ambidextrous leadership presents a leader with the capability to select and engage situation-appropriate leadership behaviours while maintaining a positive flow-on to subordinate teams. Conclusion: The leadership style (transformational, transactional or ambidextrous) adopted by the team leader has an operational effect on the development of learning as a strategic resource within the team and the organization. The ambidextrous approach is effective for exhibiting positive leadership and encouraging learning among teams and within organizations. Principles of Organization & Management Page 20
  • 21. Larsen & Toubro Limited The democratic leadership in L&T is very much similar to ambidextrous leadership. The managers and workers have good co-operation and exchange of ideas they own. As workers are sharper than the manager in specific sector so there is feedback and feed-forward learning. There is positive flow on to the subordinate teams. V) Bel (2010) studied about what type of leadership meets the needs of 21st century workforce i.e. what constitutes good leadership in today’s uncertain and challenging business environment. Findings: Several attributes are common to all innovative leaders. These include excellent communication skills, the ability to motivate others and to create a motivating working environment, the ability to collaborate with others and a real interest in involving, supporting, coaching and developing other members of the team. Innovative leaders are able to combine creativity with discipline. However, innovation can’t depend on an individual leadership. To be effective, innovative leadership needs to be embedded in the culture of an organization. Principles of Organization & Management Page 21
  • 22. Larsen & Toubro Limited Conclusion: The most effective leadership today is collaborative, non-hierarchical and transparent. Transparency is an important concept as it helps to build and maintain good relationships between management and employees, especially in times of uncertainty. E.g. A firm that needed to institute a round of redundancies. In this situation, traditional leaders might choose to keep employees in the dark about what was being planned. Transparent leaders share knowledge, help employees with future planning and thus create a reassuring environment even in difficult situations. Current research in the field of business sociology supports the value of transparent leadership, suggesting that transparent leadership helps to increase employees’ feelings of safety as well as their job satisfaction. Transparency may foster loyalty to such an extent that employees will leave an existing job and follow their leader to a new position. Alternately, leaders who do not exhibit transparency often find their employees have little trust in their leadership or personal loyalty to them resulting in behaviors such as excessive absenteeism. Leadership style in L & T aerospace unit is very close to being transparent and collaborative. Every problem or innovation is discussed within the group and then majority is given priority. The employees have trust in leadership of top management team. In the times of uncertainty there is good co-ordination between management and the workers. Principles of Organization & Management Page 22
  • 23. Larsen & Toubro Limited RECOMMENDATIONS A) ORGANISATION STRUCTURE All these are affecting the productivity of the organization and also delaying the project deliveries. Hence, based on the interaction with the L&T authorities and feedbacks, it is recommended to implement Matrix type structure. In the proposed Matrix structure, functional heads can be placed linearly below the organization head (i.e., General Manager), and at the same time, heads of departments catering to specific products such as aerospace structures, engine components, casings and parts of launching vehicles etc. or based on the customer profile such as international, domestic, govt. sector or private sector customers, can be allocate vertical position in the structure. The operation and middle level management groups can be made to report to both functional and product/customer based departmental heads. In our view, matrix structure can mitigate the problems arising in L&T’s Aerospace SBU and improve the productivity of the same. B) LEADERSHIP STYLE Production department should have Autocratic type of leadership style while other departments like marketing, project management, Research & development should follow the existing style of Democratic and Free-reign nature. Principles of Organization & Management Page 23
  • 24. Larsen & Toubro Limited REFERENCES a) Knight, K., 1976, MATRIX ORGANIZATION: A REVIEW, Pg.111 & 113, Black Well Publishing Limited ,US b) Rowlinson, S.,2001, Matrix organizational structure, culture and commitment: a Hong Kong public sector- A case study of change, Construction Management and Economics , Issue 19 c) Davis, S. M. and Lawrence, P. R., 1978, Problems of matrix organizations, Pg.131, 133, & 134 , Harvard Business School Publishing House ,USA. d) Sy, T. and Coˆte, S., 2003, Emotional intelligence-A key ability to succeed in the matrix organization, Journal of Management Development, Volume: 23, Issue: 5. e) Amy H. A. 2008, “Leaders as facilitators of Individual and organisational learning”, Leadership and organization development journal, Vol. 29 No. 3, pp. 212-234 f) Bel, R., 2010, ‘‘Leadership and innovation: learning from the best’’, Global Business and Organizational Excellence (USA), Vol. 29 No. 2, pp. 47-61. g) Bucic, T., Robinson, L. and Ramburuth, P., 2010, “Effects of leadership style on team learning”, Journal of Workplace Learning, Vol. 22 No. 4, pp. 228-248 h) Goffee, R. and Jones, G., 2006, ‘‘Extraordinary leadership’’, Business Strategy Review, Vol. 17 No. 2, pp. 30-3 i) Vansina, L., 1999, “Leadership in Strategic Business Unit Management”, European Journal of work and organisational Psychology, Vol. 8 No. 1, pp. 87-108 j) Constantinescu, D., “ Leadership in matrix Organization” 2007, THE DYNAMICS OF THE MATRICS STRUCTURE Principles of Organization & Management Page 24
  • 25. Larsen & Toubro Limited Annexure-1 Questionnaire on Organizational structure The following questions are for purpose of course work only. Your response will be kept confidential and will not be used for any other purpose Name of the Department: Aerospace Strategic Business Unit No. of employees: 150 1. What is the type of Organisation structure followed? a) Functional b) Product c) Matrix d) Any other Comments (if any): Within the Strategic Business Unit, Functional structure is followed and Organisation as a whole follows product structure 2. Why the above structure is followed? Reason: Functional: 1. Responsibilities clearly defined 2. Expertise in job Various functions in the department: a) Design and development b) Production c) Quality control d) Marketing e) Project management group For the following questions give rating ranging from 1 to 5. 5 indicate Strong agreement and 1 indicates strong disagreement. 3. The organization’s goals and objectives are clear to me. Rating: 4 4. Employees have a shared understanding of what the organization is supposed to do. Rating: 3 Principles of Organization & Management Page 25
  • 26. Larsen & Toubro Limited 5. Roles and responsibilities within the group are understood. Rating: 5 6. Clear reporting structures have been established. Rating: 4 7. Employees at this organization have the right skill sets to perform their job functions. Rating: 5 8. My work group operates effectively as a unit. Rating: 4 9. Senior management sets high standards of excellence. Rating: 5 10. Senior management encourages collaboration across the organization. Rating: 4 11. Senior management treats employees fairly. Rating: 4 Principles of Organization & Management Page 26
  • 27. Larsen & Toubro Limited Questionnaire on Leadership (Replies from DGM) Annexure-II The following questions are for purpose of course work only. Your response will be kept confidential and will not be used for any other purpose. This questionnaire contains statements about leadership style beliefs. Next to each statement, circle the number that represents how strongly you feel about the statement by using the following scoring system: Almost Always True — 5 Frequently True — 4 Occasionally True — 3 Seldom True — 2 Almost Never True — 1 1. I always retain the final decision making authority within my department or team Rating: 1 2. I always try to include one or more employees in determining what to do and how to do it. However, I maintain the final decision making authority. Rating: 5 3. I and my employees always vote whenever a major decision has to be made. Rating: 4 4. I do not consider suggestions made by my employees as I do not have the time for them. Rating: 2 5. I ask for employee ideas and input on upcoming plans and projects. Rating: 3 6. For a major decision to pass in my department, it must have the approval of each individual or the majority. Rating: 4 7. I tell my employees what has to be done and how to do it. Rating: 3 Principles of Organization & Management Page 27
  • 28. Larsen & Toubro Limited 8. When things go wrong and I need to create a strategy to keep a project or process running on schedule, I call a meeting to get my employee's advice. Rating: 4 9. To get information out, I send it by email, memos, or voice mail; very rarely is a meeting called. My employees are then expected to act upon the information. Rating: 4 10. When someone makes a mistake, I tell them not to ever do that again and make a note of it. Rating: 2 11. I want to create an environment where the employees take ownership of the project. I allow them to participate in the decision making process. Rating: 5 12. I allow my employees to determine what needs to be done and how to do it. Rating: 5 13. New hires are not allowed to make any decisions unless it is approved by me first. Rating: 1 14. I ask employees for their vision of where they see their jobs going and then use their vision where appropriate. Rating: 5 15. My workers know more about their jobs than me, so I allow them to carry out the decisions to do their job. Rating: 4 16. When something goes wrong, I tell my employees that a procedure is not working correctly and I establish a new one. Rating: 2 17. I allow my employees to set priorities with my guidance. Rating: 5 18. I delegate tasks in order to implement a new procedure or process. Rating: 4 19. I closely monitor my employees to ensure they are performing correctly. Principles of Organization & Management Page 28
  • 29. Larsen & Toubro Limited Rating: 3 20. When there are differences in role expectations, I work with them to resolve the differences. Rating: 5 21. Each individual is responsible for defining their job. Rating: 5 22. I like the power that my leadership position holds over subordinates. Rating: 2 23. I like to use my leadership power to help subordinates grow. Rating: 4 24. I like to share my leadership power with my subordinates. Rating: 3 25. Employees must be directed or threatened with punishment in order to get them to achieve the organizational objectives. Rating: 2 26. Employees will exercise self-direction if they are committed to the objectives. Rating: 5 27. Employees have the right to determine their own organizational objectives. Rating: 3 28. Employees seek mainly security. Rating: 1 29. Employees know how to use creativity and ingenuity to solve organizational problems. Rating: 4 30. My employees can lead themselves just as well as I can. Rating: 4 Conclusion: Autocratic nature: 19 Participative nature: 45 Free reign nature: 41 Principles of Organization & Management Page 29
  • 30. Larsen & Toubro Limited Questionnaire on Leadership (Replies from DGM) Annexure-III The following questions are for purpose of course work only. Your response will be kept confidential and will not be used for any other purpose. This questionnaire contains statements about leadership style beliefs. Next to each statement, circle the number that represents how strongly you feel about the statement by using the following scoring system: Almost Always True — 5 Frequently True — 4 Occasionally True — 3 Seldom True — 2 Almost Never True — 1 1. I always retain the final decision making authority within my department or team Rating: 2 2. I always try to include one or more employees in determining what to do and how to do it. However, I maintain the final decision making authority. Rating: 4 3. I and my employees always vote whenever a major decision has to be made. Rating: 4 4. I do not consider suggestions made by my employees as I do not have the time for them. Rating: 1 5. I ask for employee ideas and input on upcoming plans and projects. Rating: 5 6. For a major decision to pass in my department, it must have the approval of each individual or the majority. Rating: 4 7. I tell my employees what has to be done and how to do it. Rating: 2 8. When things go wrong and I need to create a strategy to keep a project or process running on schedule, I call a meeting to get my employee's advice. Rating: 4 9. To get information out, I send it by email, memos, or voice mail; very rarely is a meeting called. My employees are then expected to act upon the information. Principles of Organization & Management Page 30
  • 31. Larsen & Toubro Limited Rating: 4 10. When someone makes a mistake, I tell them not to ever do that again and make a note of it. Rating: 3 11. I want to create an environment where the employees take ownership of the project. I allow them to participate in the decision making process. Rating: 5 12. I allow my employees to determine what needs to be done and how to do it. Rating: 5 13. New hires are not allowed to make any decisions unless it is approved by me first. Rating: 2 14. I ask employees for their vision of where they see their jobs going and then use their vision where appropriate. Rating: 4 15. My workers know more about their jobs than me, so I allow them to carry out the decisions to do their job. Rating: 4 16. When something goes wrong, I tell my employees that a procedure is not working correctly and I establish a new one. Rating: 3 17. I allow my employees to set priorities with my guidance. Rating: 5 18. I delegate tasks in order to implement a new procedure or process. Rating: 4 19. I closely monitor my employees to ensure they are performing correctly. Rating: 2 20. When there are differences in role expectations, I work with them to resolve the differences. Rating: 5 21. Each individual is responsible for defining their job. Rating: 5 22. I like the power that my leadership position holds over subordinates. Rating: 2 23. I like to use my leadership power to help subordinates grow. Rating: 4 Principles of Organization & Management Page 31
  • 32. Larsen & Toubro Limited 24. I like to share my leadership power with my subordinates. Rating: 4 25. Employees must be directed or threatened with punishment in order to get them to achieve the organizational objectives. Rating: 2 26. Employees will exercise self-direction if they are committed to the objectives. Rating: 4 27. Employees have the right to determine their own organizational objectives. Rating: 4 28. Employees seek mainly security. Rating: 1 29. Employees know how to use creativity and ingenuity to solve organizational problems. Rating: 4 30. My employees can lead themselves just as well as I can. Rating: 5 Autocratic nature: 20 Participative nature: 44 Free reign nature: 43 Questionnaire on Work Culture Annexure-IV Principles of Organization & Management Page 32
  • 33. Larsen & Toubro Limited The following questions are for purpose of course work only. Your response will be kept confidential and will not be used for any other purpose. For the following questions give rating ranging from 1 to 5. 5 indicate Strong agreement and 1 indicates strong disagreement. 1. I gain satisfaction from my current job responsibilities. Rating: 4, 5, 4, 4, 4 2. I have the opportunity to further develop my skills and abilities Rating: 3, 4, 4, 5, 4 3. My work adds value to the organization. Rating: 4, 3, 4, 4, 5 4. Employees consult each other when they need support. Rating: 4, 5, 4, 5, 4 5. When disagreements occur, they are addressed promptly in order to resolve them. Rating: 3, 5, 4, 4, 5 6. I receive the information I need to perform my job well. Rating: 4, 5, 3, 4, 5 7. I am clear on how my job supports the department's overall objectives. Rating: 4, 3, 5, 4, 5 8. When I need help, I can ask others in my work group for suggestions or ideas. Rating: 4, 5, 4, 5, 4 9. My direct supervisor makes sure I have clear goals to achieve. Rating: 4, 5, 4, 4, 4 10. I enjoy being a part of this organization Rating: 5, 4, 3, 5, 4 Note: This interview is carried among 5 people. Principles of Organization & Management Page 33
  • 34. Larsen & Toubro Limited Email Correspondence Annexure - V Principles of Organization & Management Page 34