What are Tesla (Porters five forces) explanations, using the followings.
Get college assignment help at Smashing Essays Question What are Tesla (Porters five forces) explanations, using the followings. and how is the analysis of their strategies1. Bargaining Powers of Buyers2. Bargaining Powers of Suppliers3. Threat of New Entrances4. Threat of Substitution5. Degree of Rivalry6. Power of Stakeholders
MARUTI SUZUKI INDIA LIMITEDAfter India opened up its economy in
Question MARUTI SUZUKI INDIA LIMITEDAfter India opened up its economy in the early 1990s, the Indian automobile industry witnessed intense competition. Maruti Suzuki India Limited (Maruti) had been a dominant player in the Indian automobile industry since it began operations in 1981. Maruti was so popular that in India people had long used the word “Maruti” as a synonym for “car.” Maruti had experienced a dream run for three decades, achieving the largest market share in the passenger car industry in India. But for the first time after 28 years of consistent growth, Maruti experienced a fall in sales volume in 2012 (see Exhibit1). Even in 2014, after two years, it had not yet recovered. R.C. Bhargava, the chairman of Maruti, was concerned with how to turn things around. He knew that Maruti had little control over pricing, given the fierce competition in the sector. Despite the price of cars remaining stagnant over the last decade, Maruti and its competitors were experiencing declining sales. Prices of fuel had adversely affected demand. Input costs for manufacturing were increasing year after year. With such a dismal outlook for the automobile industry and with poor price maneuverability, how long could Maruti sustain profits? The chairman knew he had to decrease the costs of manufacturing and he was considering building a state-of-the-art plant in Gujarat. Would this reduce costs enough to help Maruti become more profitable?INDIAN PASSENGER CAR MARKETThe Indian passenger car market was the fastest growing in Asia, driven by India’s large population of1.28 billion and a low penetration of fewer than 12 cars per 1,000 people (see Exhibit 2). Prior to the 1990s, the Indian automobile sector was in poor shape compared to the automobile sectors in othercountries, largely because of demand-side constraints such as the low purchasing power of the averageIndian consumer. Before India’s economic liberalization, the majority of India’s population could not afford to buy a car, and car penetration was less than three per 1,000 people. After liberalization, with rising income levels of middle-class families, the demand for passenger cars went up steadily over the next 20 years. However, car penetration was still very low compared to in Brazil, Russia, China and developed countries (see Exhibit 2). From a supply-side perspective, the automobile industry had greatly benefited from liberalization, as international automobile manufacturers took advantage of India’s affordable yet highly trained engineers, establishing manufacturing operations throughout the country. Due to India’s huge pool of talent and rising income levels, India’s passenger car market had grown in terms of production and sales and was expected to grow further in coming years. Passenger vehicles in India could be broadly divided into three segments — passenger cars, utility vehicles and multi-purpose vehicles — with passenger cars contributing around 80 per cent of total sales volumes. As of 2014, this segment was expected to grow at a compound annual rate of 15 per cent for the next 15 to 20 years. Apart from domestic growth, automobile exports from India were predicted to grow at 12 per cent. It may be noted here that, in a low per capita income country like India, two-wheelers (motorcycles and scooters) constituted a major mode of transportation for the lower middle class, who would eventually graduate to the small-car segment. In most cities and towns, due to the poor quality of roads and excessive traffic congestion, motorcycles were the first choice for daily commutes. However, a car was considered a prized possession for a middle-class Indian family, even though it was not used on a daily basis. With rising income levels, this held great promise for car manufacturers, as fewer than 12 people per 1,000 owned a car in India, reflecting huge market potential.MAJOR COMPETITORS OF MARUTIThere were many players in the passenger car segment in India. Some of these players were domestic, such as Maruti, Tata and Mahindra. Others such as Hyundai, Honda and Toyota were from other Asian countries. The two companies with the largest market share in India were Maruti, at 49 per cent, and Hyundai, at 21 per cent (see Exhibit 3 for trends in the market share of Maruti and its competitors). Although there were many players in the luxury segment of the market such as Mercedes-Benz, BMW and Audi, there were few buyers who had the income to support such purchases. There were other competitors for Maruti such as Ford, GM, Nissan, Renault, Škoda and Volkswagen that competed in mini- and mid-segment cars. These companies had taken considerable market share from Maruti in recent years.MARUTI: THE COMPANYEstablished in 1981, Maruti enjoyed the largest market share in the Indian passenger car segment. In 2014, Maruti, with two production facilities at Gurgaon and Manesar (both in the National Capital Region of Delhi), had a production capacity of more than 1.4 million units per year. The production facilities had more than 12, 000 employees and produced more than 16 automobile models, each with multiple variants Examples of Maruti’s product offerings included small cars like the Maruti Alto, Wagon R and A-Star. Small cars made up 41.2 per cent of Maruti’s total sales units. In the compact car segment, Maruti offered cars such as the Swift, Estilo, Ritz and Celerio. This segment made up 24 per cent of Maruti’s total sales. In the mid-size segment, the company offered the SX4 and Dzire, which contributed19.1 per cent of sales. The sport utility vehicle segment made up just 5.8 per cent of sales and contributed less to Maruti’s profits than small and mid-segment cars. Finally, in the vans segment, the company was known for the Omni and Eeco, which contributed 9.6 per cent to its overall sales. The remaining sales came from other models of Maruti cars. From the Maruti 800 in 1983 up to the launch of the Celerio in February 2014, Maruti had rolled out model after model and exceeded customer expectations in terms of quality and value for money.Maruti focused on three key strategies to generate sales. First and foremost, its pricing strategy was very competitive. For example, in the small car segment, the Maruti Alto was priced 10-20 per cent lower than competing models such as the Hyundai Santro, Tata Indica and Chevrolet Spark (see Exhibit4). Second, Maruti spent a great deal on research and development to create more fuel-efficient engines. This decreased the cost of owning a car for a consumer; Indian customers were very sensitive regarding the fuel efficiency of vehicles, since fuel costs were high relative to average income levels. Third, Maruti offered reliable after-sales service, backed by its extensive service networks. There were more than 15 competitors in the market and it was never easy for a company to retain more than 40 per cent of the market share. But Maruti had done it consistently over three decades. Maruti cars enjoyed a unique position in the Indian consumer’s mind. Maruti scored higher than its competitors in terms of price, fuel efficiency and reliability, and its sales were boosted by the promise of efficient after-sales service. The uncertainty of getting stuck on Indian roads due to machinery failure was effectively exploited by Maruti. As Maruti had a network of 3,053 service stations in 1,449 Indian cities, its promise of reliability wasunmatched by any of its competitors. In terms of fuel efficiency, Maruti cars provided an average of three kilometres more per litre of petrol/diesel compared to its competitors. The resale value of Maruti cars was also far higher than that of any of its competitors. Maruti offered its True Value used-car business, with more than 454 True Value outlets in 255 Indian cities, reassuring its customers that they would attain the highest resale value from any Maruti brand. For an Indian middle-class family planning to buy a new car, Maruti was the first and most obvious choice.COMPETING WITH MARUTI CARSMaruti had implemented very few price increases in its passenger car segments over the last 10-12 years.Nonetheless, competitors had emerged in each of these segments. Out of Maruti’s 16 car models, each model had anywhere from one to seven close competitors from Hyundai, Tata Motors, Volkswagen, Toyota, Honda or Chevrolet (see Exhibit 5). However, despite intense competition, Maruti had retained its leadership position in most segments. In fact, it was so pervasive a brand that some of its models competed among themselves. For example, its Alto model competed with the Maruti 800, and the Wagon R competed with the Ritz. Maruti had maintained its “people’s car” image since its inception by strategically keeping prices low and positioning entry-level cars for first-time buyers. Mini-segment cars, which constituted more than 80 per cent of Maruti’s total sales, carried price tags that were at least 20-30 per cent lower than those of their nearest competitors.The bestselling mini-segment models of Maruti were the Alto and the 800. The prices of these cars had remained stagnant for a long time. In fact, in many instances, the prices of these cars had been reduced. For example, the launch price of the Alto LX model was INR299,000 in 2002, and the price was subsequently reduced year after year until 2009, when the price was INR257,000, a reduction of approximately 14 per cent after seven years. The price of the 800 model was INR281,000 in 2002, which was reduced to INR221,000 in 2010, a drop of 21 per cent. The price of the Wagon R was reduced from INR359,000 to INR338,000 during the same period. However, Maruti was able to increase the price marginally for the compact and mid-size segment cars over this period, which boosted the revenue of the company.The passenger car market in India had witnessed intense price competition. It was so intense that not a single price change by any of the players had gone without a reaction from rival firms. If one looked carefully at all the models of the different brands, the intensity of the price war was evident. Specifically, in the case of the Maruti Alto, even Maruti’s close competitors — Hyundai and Tata — could not raise the prices of their cars over the years; they had to reduce the prices of their models to retain market share. For example, in April 2004, when the price of the Maruti Alto fell by around 7 to 8 per cent, the Hyundai Santro price correspondingly fell by 4.6 per cent. Similarly, in June 2009, when the Maruti Alto price fell by 8.8 per cent, the Hyundai Santro price fell by 7.7 per cent, while the Tata Indica price fell by 9.8 per cent. Though it was never easy for car manufacturers to reduce prices, they were left with no choice but to sell their products at reduced or stagnant prices. Even for the mid-size and compact segments, Maruti could not increase price when it wished to due to price competition. Though the company had been able to retain its leadership position, its market share had fallen over the years due to the intense price competition.In 2001, Maruti had total revenue of INR70.21 billion, which included other income with net sales. There was a steady rise in Maruti’s revenue even though sales volumes fell from 2011 to 2014. In 2014, Maruti registered sales revenue of INR445.43 billion, a rise of more than 500 per cent in 14 years (see Exhibit6). Even though Maruti could not raise the prices of its mini-segment cars, the rise in sales revenue was mainly due to a rise in unit sales and marginal increases in the prices of its compact cars.INPUT COSTSThe prices of raw materials for cars had risen significantly since 2001. Basic metal prices had increased sharply, except for the price of aluminum. Steel was the major raw material for cars, and the price of steel had increased by at least three times (see Exhibit7) since 2001. Apart from steel, other inputs for automobiles such as copper, lead and rubber (see Exhibit7) had gone up in cost by at least 240 per cent.Even the price of aluminum had experienced a marginal rise of 7 per cent. The only raw material for which there had been no significant price rise was palladium, but its usage in car-making was relatively negligible. Apart from these materials, the prices of other materials and inputs such as electricity and fuel had gone up during the same period. The rise in input prices had been as much as 300-400 per cent. Specifically, steel and rubber prices had significantly raised the cost of production.Labour CostsThe cost of labour had gone up significantly due to the rise in general price levels (inflation) in India. Though Maruti depended heavily on contractual labourers to cut down on labour costs, it had to keep pace with the market in terms of compensation and perks in order to retain employees. The wage disparity between Maruti’s regular employees and contractual employees in the past had led to HR issues that had given Maruti much bad publicity. The tragedies of the Manesar plant had forced Maruti to revisit the compensation packages given to its employees. This had resulted in further rising employee costs. The employee cost had been a mere INR1.99 billion in 2001, but had risen to INR10.69 billion in 2013-2014 (see Exhibit6). It may be noted that along with Maruti’s costs, the labour costs per unit for its competitors had also risen accordingly during the same time period.Selling CostsWith the automobile sector being so fiercely competitive, Maruti needed to spend a lot on promotional activities. The distribution and channel costs had also risen with the rise in fuel prices. For Maruti to retain its market share, it had to engage in extensive ad campaigns on television and through other promotional avenues. The cost of advertising on television had risen each year, resulting in increased spending on promotion. The promotion and television costs had risen from INR6.33 billion in 2001 to INR64.99 billion in 2014 (see Exhibit6). In per capita terms, expenses had risen from a mere INR18,069 to a whopping INR56,266 per car during the same period.KEEPING DOWN COSTSThe automobile industry was at a crossroads where the costs of raw materials and operations continued to increase substantially without a corresponding rise in the prices of the products sold. For companies in this sector, it was very difficult to sustain profit levels that met the expectations of stakeholders and the market. It seemed that the solution lay in the implementation of more efficient production. As prices had remained sticky for an extended period of time and costs kept rising, firms needed to innovate to bring costs down. Manufacturers continued to add new features to their products and in the process discovered cost-cutting measures.Maruti had been doing this successfully for more than two decades. However, in the scenario of rising costs, the company faced major challenges, as there was no cushion allowing it to pass on the burden to consumers. Any attempt on Maruti’s part to raise prices was met with a price cut by its rivals. Yet the rival firms were also facing the same challenges; in fact, the challenges were worse for them than for Maruti. The only alternative for the manufacturers was to keep the costs of production down throughincreased efficiency. As increasing the price for most Maruti models was out of the question, the only solution lay in achieving technical efficiency and economies of scale. The gap between the average cost and the price was quickly shrinking for each model. Therefore, to remain relevant in the market, Maruti had to innovate constantly to cut down costs and achieve the right scale of production. Achieving economies of scale was the only solution in the face of rising input and labour costs.FUEL PRICES AND DEMAND FOR PASSENGER CARSThe rise in the price of crude oil had not helped the cause of the automobile sector in India. Fuel prices had increased, which significantly impacted the growth of the sector. In 2014, while addressing the media, Maruti chairman R.C. Bhargava in fact put the blame for declining sales squarely on increases in the prices of petrol and diesel. These prices had increased by 20 per cent in the last two years, adversely impacting car sales. The price of petrol was deregulated in India and was linked to crude oil prices. The price of crude oil had increased from $25.64 per barrel in 2001 to around $110 per barrel in 2014 (see Exhibit7). Apart from the rise in crude prices, local taxes on petroleum products were very high in India, which further raised the prices. The diesel price was regulated and kept low through subsidies. This helped car manufacturers like Maruti to charge a premium on diesel cars. However, the price of diesel was slowly being deregulated in India. With a new union government that was firmly focused on reforms, the diesel price would soon be deregulated. Once this occurred, diesel variants of cars would lose their edge over petrol variants. The deregulated diesel price would further adversely impact the demand for automobiles in India.PROFITABILITYMaruti had been able to maintain a steady rise in profits despite challenges that were beyond the control of the company, such as increased costs and fuel prices that affected the demand for cars. In 2002, it posted a net profit of INR1.04 billion, a mere 1.5 per cent of net sales. In 2014, Maruti’s net profits had risen to INR27.83 billion or 6.3 per cent of net sales (see Exhibit6). Maruti remained focused on maximizing shareholders’ wealth despite the competitive market environment. Each year, Maruti’s financial results exceeded market expectations.DECISION TO ENTER GUJARATMaruti had been contemplating entering Gujarat and setting up a plant with an installed capacity of 300,000 units per year with an investment of INR60 billion. It was expected that any new facility would be more efficient, as it would use the latest technology and subsequently the cost of production would be lower. Therefore, once operational, the facility would help Maruti achieve better economies of scale so that it could compete better and sustain its profits. However, setting up a new plant was a messy affair in India, with regulations related to everything from land acquisition to obtaining clearances from several ministries. The Tata Nano’s Singur plant debacle was still fresh in everybody’s memory. Bhargava had various questions to consider. Could he find a way to increase prices to achieve higher profitability, thus avoiding the capital expenditure of building a plant? Would the building of a new plant really sustain profits or would it take so long that it would not be worth the initial investment? EXHIBIT 1: DOMESTIC SALES, EXPORTS AND TOTAL SALES (UNITS) OF MARUTI CARS 2013-142012-132011-122010-112009-102008-092007-082006-072005-062004-052003-042002-032001-022000-01 792167764842674924561822536301472122362426352404350814 11550411171434113369512710051018365Total Exports Domestic Source: Various annual reports of Maruti; “Our Financials,” Maruti Suzuki, www.marutisuzuki.com/financial.aspx, accessed September 12, 2014. EXHIBIT 2: MOTOR VEHICLE PRODUCTION, CAR PENETRATION AND PER CAPITA INCOME OF SELECT COUNTRIES Country Motor VehicleProduction (in 2014) AutomobileDensity (Cars per 1,000People) Per CapitaIncomein US$PPP in 2013-14 India 4,145,194 12 $3,843 China 19,271,808 44 $9,055 Brazil 3,342,617 178 $11,747 Russia 2,231,737 233 $17,518 U.K. 1,576,945 457 $36,569 France 1,967,765 481 $35,295 U.S. 10,328,884 423 $51,714 Japan 9,942,711 453 $35,855 Germany 5,649,269 517 $38,666 Note: Per capita income (PPP) refers to how many U.S. dollars are required to buy a pre-defined basket of commodities in different countries. It is different from the official exchange rate conversion of per capita income. It differs from country to country, based on the purchasing power of a currency in the domestic economy. For example, if one requires US$100 to buy a predefined basket in the United States, and if the same basket can be purchased in India for INR4,000, then the PPP exchange rate is INR40/US$1, whereas the official exchange rate is around INR60/US$1. Per capita income in US$PPP is a better indicator of the affordability of buying a car than nominal per capita income.Source: The World Bank, “Passenger cars (per 1,000 people),” http://data.worldbank.org/indicator/IS.VEH.PCAR.P3, accessed September 12, 2014.EXHIBIT 3: TRENDS IN MARKET SHARE OF MARUTI AND ITS COMPETITORS IN INDIA (Market Share in Percentages) Year Maruti Suzuki Hyundai Motors Tata Motors Mahindra
Imagine that you are receiving a foreign national into your
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This question was created from Project Risk Management Assessment Task.docx
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evaluate a business with a recent case of unethical behavior.
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Online movie rental subscription service Netflix utilizes a very nontraditional
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1. Determine the solution to the following two-person zero-sum game
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1. The soft goods department of a large department store
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Case summary of the Cleveland Clinic’s move to implement Servant
Question Case summary of the Cleveland Clinic’s move to implement Servant Leadership. Use additional research to dig into the particulars of the case that you find most compelling, including a description of the problems faced by Cleveland Clinic and the solutions and strategies they applied. The Ellikar article should be used as a backdrop to discuss some of the deeper obstacles that the leadership of Cleveland Clinic most likely faced as they were implementing a radical overhaul of their organization. Servant leadership is a concept that has gained increased notice within modern organizations. Its premise, as described over the last quarter century, was revived largely due to the writings of Robert Greenleaf (1977, 1998), which premised a servant first attitude, the raising of other servant leaders, and the potential impact on society. Considerable attention since has been devoted to attributes, measurements, and impact of servant leaders. Yet the servant leader may not be as welcome within organizations as we might first postulate. There is potential for significant differences and conflict between organizations and servant leaders. The intent of this article is to explore potential differences, and potential resolution strategies. The form of the modern organization has gone through a number of transformations, including scientific management, mass industrialization, management science as a discipline, six sigma quality movement, significant empowerment efforts, the rise of the computer and the information age, the proliferation of the network age, and most recently the early rise of bottom up organic organizations. Yet, it in every era of organizational transformation the tension between organizational pressures and human dynamics does not seem to have lessened. Warner (2007) humorously highlights one of Franz Kafka’s (1883-1924) unfinished manuscripts, called The Castle (1926), that told the story of a land surveyor who was hired to assist a small town and its castle baron. In a telling moment, the Superintendent says “‘You have been taken on as a Land Surveyor, as you say, but unfortunately we have no need of a Land Surveyor’” (p. 1025). Warner highlights that “arbitrary authority reduces the individual to uncomprehending powerlessness.” (p. 1024). This fictional narrative from almost a century ago hints at the frustrating paradox of bureaucracies that is experienced today within organizations. Similarly, Warner notes that Max Weber (1864- 1920), considered a foundational early writer on organizations, saw the dependence of organizations on a rationality that reduced members to feeling like a part of a machine, yet who in turn want to become a bigger part of that machine. Weber noted (1978) “the [audience’s] passion for bureaucratization drives us to despair” (p. 1024). It would appear that an organization’s drive to organize alienates the very people it is organizing. In the middle of the 20th century, efforts in leadership theory were aimed at creating an ideal approach that balances organizational drive with individual needs. These efforts included the optimized “9-9 manager” (Blake and Mouton, 1964), the situational manager (Hersey and Blanchard, 1969), and integrating organizations with adult personalities (Argyris, 1957). Professor Likert (1967) of Michigan pointedly asked why more organizations would not adapt an engaging open management style even when the evidence demonstrates its superiority in effectiveness. In the last quarter of the 20th century, leadership theory focused even more directly on the impact on others, including transformational leadership, change leadership, ethical leadership, team leadership, as well as servant leadership. It is possible that the increased complexity of organizational systems has highlighted the criticality of human interaction J. ELLIKER © 2016 D. Abbott Turner College of Business. 74 in order to achieve organizational objectives. People impact is no longer simply a good thing to recognize, it may well be the bottleneck to organizational outcomes. This long lasting phenomenon highlights a conflict in nature between organizations and the development of people. We can further explore this tension between organizations and people through the lens of servant leadership. This is a reasonable inquiry because of the nature of servant leadership with its emphasis on the development of people. There are hints of possible inherent conflicts. As recently as three years ago, Professor Heskett (2013) of Harvard asked why servant leadership is not more present. Yukl (2010) noted that potential consequences of servant leadership “are not all beneficial for an organization” (p. 421). Further, the nature of a possible inherent conflict is still largely unexplored. Therefore, of particular interest for this inquiry, is the interaction between organizations and servant leaders. If the nature and outcome of organizations and servant leadership are at odds, then both organizations and servant leaders would be wise to consider the points of conflict and remedial actions. For this study, we focus on two questions: Do the very natures, or ontologies of organizations and servant leadership collide, and if so, what strategies can be pursued by practicing servant leaders to effectively manage the conflict? We are interested in finding any pattern of possible conflict between servant leadership and organizations that can assist those practicing this leadership style to change the dynamic. An initial deductive model is introduced that includes three ontological premises, generally reflecting the Greenleaf (1977, 1998) model of servant leadership, and the Argyris (2009) model of organizations: First, servant leadership by nature exists to serve others, while organizations exist to accomplish a collective purpose. Second, servant leadership by nature operates by raising up a new generation of healthy leaders who will likely challenge existing organizational boundaries and methods, while organizations operate through processes and roles to accomplish goals towards its purpose. Finally, servant leadership survives over the long term by generating other leaders who in turn raise the healthy impact on larger communities, while, organizations survive by adapting to a changing environment. At each level of being, there appears to be potential conflict inherent between these two natures. LITERATURE REVIEW The Nature of Servant Leadership Servant leadership is an emerging concept, still in its infancy in modern scholarship yet rich in its ancient history, that helps to explain many experiences within an organization. Robert Greenleaf (1977, 1998) is noted as a core modern author of the concept, which at its core he defined as the desire to serve first, then lead as necessary. And along with this he introduced two core tests – do people grow healthier and stronger and wiser and more capable of leading themselves as a result of working with a servant UNDERSTANDING ONTOLOGICAL CONFLICT 75 SLTP. 3(2), 72-89 leader – and what is the effect on the least privileged in society? There has been a widening stream of research on the concept since then, including Stone, Russell, and Patterson (2003), Spears (2010), Savage-Austin and Honeycutt (2011), and Parris and Peachy (2012). There are also a number of summary texts that include the topic in an overview of leadership, including Northouse (2016), Yukl (2010), and Bass and Bass (2008). Parris and Peachy (2012) completed a systematic literature review of servant leadership studies and concluded several findings – that there is no consensus on its definition, there are multiple measures, it is being widely investigated, and it is a viable theory that helps organizations and followers. Stone, Russell and Patterson (2003) described the differences between servant leadership and transformational leadership, which asserts that the growth of people is paramount, regardless of organizational effects. “This tendency of the servant leader to focus on followers appears to be the primary factor that distinguishes servant leadership from transformational leadership” (p.2). Savage-Austin and Honeycutt (2011) stated that in comparison to other major theories of leadership, “none of these models illuminate the need for leaders to serve the followers.” Stone, Russell and Patterson (2003) suggest explicitly, and as the Yukl, Gordon and Taber (2002) taxonomy described implicitly, that servant leadership, along with transformational leadership, is a higher order model of behavioral leadership theory. Melchar and Bosco (2010) found that servant leadership can provide a successful alternative to other leadership styles such as autocratic, performance-maintenance, transactional, or transformational” (p. 84). There have been a number of attempts at measuring the nature of servant leadership, including Laub’s (1999) initiating work, Barbuto and Wheeler’s (2006) comparison work, and a comprehensive analysis by van Dierendonck and Nuijten (2011). Barbuto and Wheeler (2006) produced five servant leadership factors—altruistic calling, emotional healing, persuasive mapping, wisdom, and organizational stewardship. They found significant relations to transformational leadership, leader-member exchange, extra effort, satisfaction, and organizational effectiveness (p. 300). Hayden (2011), a doctoral student of Barbuto, empirically tested Robert Greenleaf’s (1977, 1998) seminal articulation of servant leadership. The four personal outcomes he theorized (health, wisdom, freedomautonomy, and service orientation) were tested against established dimensions of servant leadership. All correlations were significant and positive (p. ii). Barbuto and Hayden (2011) also tested the Barbuto and Wheeler measurement against the measurements of leader-member exchange. They indicated that “all five dimensions of servant leadership had significant relationships to LMX. The strongest predictor of LMX was the emotional healing component of servant leadership. This means those leaders who are perceived as able, and willing, to connect with colleagues on an emotional level (specifically in a healing context) build strong, positive relationships with these colleagues.” (p. 30). Although the data is early and mixed, there appears to be research supporting the positive impact of servant leadership. However, there may be an apparent conflict with servant leadership within organizations. As noted above James Heskett (2013) queried that despite the attractiveness of servant leadership, why isn’t it more prevalent? Yukl (2010) explained that the welfare J. ELLIKER © 2016 D. Abbott Turner College of Business. 76 or growth of the individuals may supersede the short term performance of the organization, or even the career of the servant leader. Stone, Russell and Patterson (2003) explained further that “the servant leader does not serve with a primary focus on results; rather the servant leader focuses on service itself” and that they “trust their followers to undertake actions that are in the best interest of the organization, even though the leaders do not primarily focus on organizational objectives” (p. 355). In this light, it is easy to see how organizational leaders who are held accountable for specific outcomes would find it difficult to trust fully servant leaders within their organizations. There have been a few specific phenomenological studies of servant leaders in organizations that highlight conflict. Savage-Austin and Honeycutt (2011) studied 15 servant leaders and summarized some of the servant leader barriers. Foster (2000) also detailed the barriers servant leaders face by interviewing 20 recognized servant leaders in a single corporation. These blockages to servant leadership focused on cultural barriers such as lack of trust, conflicting leadership styles, and lack of communication, and included some suggested remedies to be organizationally implemented. Foster noted the significant conflict between his participants and organizational barriers, and tended to support Greenleaf’s supposition that servant leaders should only work for other servant leaders. Chu (2011) studied the correlations between pastors’ conflict management style and servant leadership in churches. Garcia (2004) explored the relationship between transformational and transactional leadership with conflict style of the leader. The work of all the above researchers’ touches upon an important point. Servant leaders likely face conflict as they serve their organizations. But our understanding of the reason and nature of that conflict is only at the beginning stages, and therefore servant leaders are apt to be caught unaware of the phenomenon. This could lead to significant discouragement or departure of valuable leaders from organizations, and the possible reduction of servant leadership practices within organizations. The Nature of Organizations To investigate the interactions between organization and servant leaders we need to better understand the ontology or inherent nature of organizations. The study of organizations extends throughout history, including militaries, governments, townships, and collectives of worship. In the 20th century rise of business organizations, Frederick Taylor (1856-1915) introduced a systemized approach to creating a more “scientific” (1914) organization. This perspective on organizations exists to today, and in its modern form might be similar in some extent to the continuous improvement efforts out of Japan in the 1980’s and further adopted by the Baldridge and Kaizan initiatives in the US. Max Weber (1864-1920) considered the father of organizational theory, described the rise of the organization in the early 20th century, although his writings were not translated into English until mid-century (1978). In the mid-century organizational dynamic research includes Argyris (1957), Bennis (1966), and Likert (1967). Their research focused on the emerging large corporations, the need for bureaucratic methods of large scale functional tasks, and the rising need for human perspectives. Argyris (2009) provided many meaningful UNDERSTANDING ONTOLOGICAL CONFLICT 77 SLTP. 3(2), 72-89 observations on organizations in this light. They are helpful in observing the ontological nature of organizations, including the need for corrective feedback mechanisms, objectives, roles and departments. He stated that “the degree of dependency, submissiveness, and so on, tends to increase as one goes down the chain of command and as the job requirements and managerial controls direct the individual” (p. 58). Critically to our study, he stated that there are three organizational activities: “(1) achieving objectives, (2) maintaining the internal system, and (3) adapting to the external environment.” (p. 120). Modern organizational investigators include Wheatley (2006), Morgan (2006) and Yukl (2010). Here the emphasis has been on the changing nature of organizations from a more mechanized approach to an organic structure, where change is not linear, and organizations continue to include a complexity of interdependent systems and actors. As a result, organizations can be quite complex, responding to a demanding global stage, and sometimes hard to understand. Meyer and Bromley (2013) call the modern organization “social actors” and “structurally nonrational” (p. 366). For our purposes, we want to focus on a simple definition of an organization. As Argyris (2009) stated, “organizations are usually created to achieve objectives that can best be met collectively” (p. 35). In other words, an organization is a group of people (both internal and external) connected together for a common purpose. Junginger (2008) notes that “while every form of organizing involves people, resources, structure, and purpose, an organization requires a group of people that utilizes available resources in an agreed manner to pursue a common or shared purpose” (p.32). Bottazzi and Ferrario (2009) describe an organization as a “complex entity [to run] complex activities” (p. 228). This combined effort of people may seem to be an obvious statement, but its implications are significant for the servant leader. Combined efforts can be voluntary, involuntary, highly engaging of capabilities or highly controlled, networked to other organizations, a combination of internal and external resources, all of which impact individuals and leadership. The Interaction between Organizations and Servant Leadership From the beginning of organizational studies, there has been a parallel concern over the impact on human lives. Organizational theory includes the functions, objectives, behaviors, and results of focusing groups of people on specific outcomes. As we noted at the beginning, Warner (2007) highlighted a very early emerging conflict over the impact of organizational bureaucracies on people, from the 19th and early 20th century writings of Kafka and Weber. “Weber was deeply concerned with the concentration of power and the tragically dehumanizing nature of life in bureaucracies” (p. 505). Further, Weber (1978) notes the longevity of “bureaucratic machinery that will normally continue to function” even after a revolution or occupation. Argyris (1957) stated a premise that “healthy individuals will tend to have their self-actualization blocked or inhibited because of the demands of the formal organization” (p. 76). Rahim (2002) noted that “conflict and tension will go up as more people challenge the old ways of thinking and doing things” (p. 227). J. ELLIKER © 2016 D. Abbott Turner College of Business. 78 The nature and presence of conflict between individuals and organizations has been an area of significant concern. In speaking of the bureaucratic model of organization, Pondy (1967) indicated that “conflict is intimately tied up with the stability of the organization…conflict is a key variable in the feedback loops that characterize organizational behavior” (p. 297-298). If conflict between individuals and organizations are ubiquitous, then the practice of servant leadership, which is focused on the development of individuals, will also surface key areas of conflict. Savage-Austin and Honeycutt’s (2011) interviews of servant leaders mention several barriers to servant leaders within organizations, the most common being “culture, the fear of change… and the lack of knowledge regarding the philosophy of servant leadership practices… resulting in minimal inclusion of followers in the decision-making process” (p. 53). Parris and Peachy (2012) at the end of their comprehensive study of servant leadership commented that “servant leadership contrasts, traditional leader-first paradigm.which sadly…is at the heart of most organizations” (p. 390). Peterson, Galvin, and Lange (2012) sampled 126 CEO’s in technology organizations, and discovered different relationships between leadership styles and servant leadership, including a positive one between founder status and servant leadership, and that CEO servant leadership predicted subsequent firm performance (p. 565). Foster (2000) discovered barriers to the practice of servant leadership that included communications, development, middle management, rewards, and the understanding of servant leadership. But we can learn from conflict. It may well be one of the most valuable keys to understanding growth in both individuals and organizations. METHOD The intent of this article is to an initial deductive model of potential conflict between the nature of organizations and the nature of servant leadership. In this manner, we can follow the path of Argyris (2009) to climb to the “highest possible heights of abstraction,” postulate “the essential properties” of this conflict and then return “to the empirical world to test” (p. 149). A next step beyond this article would be to test our assumptions with identified servant leaders across a spectrum of organizations, and allow a grounded model to emerge. The deductive reasoning herein is straightforward. If both organizations and servant leaders are considered distinct entities with purpose and methodology, then the purpose or methodology of both can be compared. If there are noticeable differences in purpose and methodology, the potential for conflict exists. To achieve this comparison, a table is constructed that highlights three key questions of being: why it exists, how it may operate, and its long term need to survive. Then, within the table we present some preliminary answers to those questions from both the servant leader perspective and an organizational perspective. In both cases we are emphasizing the core nature of each entity. Finally, we take a logical leap to predict where potential moments of conflict could occur for those practicing servant leadership within an organization. In responding to the questions, we UNDERSTANDING ONTOLOGICAL CONFLICT 79 SLTP. 3(2), 72-89 are relying on a presumed ontology of servant leadership, most specifically around the three core concepts of Greenleaf (1977, 1998), and a presumed ontology of organizations, roughly parallel to Argyris (1957, 2009). A second table is then constructed to highlight potential moments of conflict, and ask our second question – what strategies should a practicing servant leader pursue to manage such conflicts? We again use deductive reasoning, and come to an initial model of action. Table 1 An Initial Model of Ontological Conflict Ontological Questions Servant Leadership Ontology Organization Ontology Potential Moments of Conflict for Those Practicing Servant Leadership Why does it exist? Leadership exists to serve others Individuals organized to accomplish a purpose When the pursuit of organizational purpose unintentionally dehumanizes its members in the accomplishment of that purpose. When the servant leader continues to organizationally serve others who are redirecting the organization without consensus. How does it tend to operate? Builds up a community of healthy new leaders Organizes and executes goals through roles, processes, tasks When the roles, processes and tasks overly restrict or reduce the capabilities of its new leaders. When emerging leaders challenge and change roles, processes, tasks and mission at a pace beyond organizational capacity. How does it survive for the long term? Generates a larger healthy community, including underprivileged Challenges itself when circumstances change When bureaucracy or autocratic power becomes dominant, less able to change, and less focused on growing new leadership. When the larger healthy community no longer is dependent on the organization. J. ELLIKER © 2016 D. Abbott Turner College of Business. 80 DISCUSSION Table 1 details our first deductive results on the question of potential moments of conflict for those practicing servant leadership within organizations. For the first question – why does it exist – we can say that servant leadership exists to serve others, while organizations exist so that a group of people can accomplish a selected purpose. A potential moment of conflict for a servant leader within that organization could then arise if the pursuit of an organizational purpose begins to dehumanize its members. Situations that come to mind might include organizational layoffs, long and unusual working conditions, and intimidation of organizational members. The servant leader is called to challenge these actions and help the organization think through ethical and humane strategies to accomplish the overall organizational purpose. There could also be conflict in the other direction. For instance, if the servant leader continues to serve individuals who are actively redirecting the organizational purpose, the organization is called to challenge the servant leader. Instances that come to mind could include supporting a member who continues to fall short of his responsibilities, regardless of frequent counseling, or not taking command of a business situation when, as Greenleaf (1977, 1998) indicated, a servant leader also leads as necessary. The second question – how does it tend to operate – leads us to say that servant leaders build up a community of healthy new leaders, and organizations execute goals through roles, processes, and tasks. Potential moments of conflict then can arise in two situations. First when the roles, processes and tasks overly restrict or reduce the capabilities of its emerging new leaders. In this case the servant leader is called to coach new leaders in effective change management. Alternatively, when emerging leaders challenge and change roles, processes, tasks and mission at a pace beyond organizational capacity, the organization can challenge the servant leader to slow the pace of development. The third ontological question – how does it survive for the long term – leads us to say that servant leaders tend to build up healthy communities beyond their immediate circle of contacts. This occurs because the emerging healthy leaders, coached by the servant leader, expand their own impact into their families, communities and occasionally other organizations. In some ways, this is the most powerful impact of servant leadership. When one is asked – who was their favorite boss – the answer is often the one who believed in me and gave me room to grow. This has a multiplying effect over time – especially when that affected subordinate becomes a leader of others. On the organizational side of the question, organizations survive when they sustain a capacity to challenge themselves as the external environment changes. If not, organizational flexibility and life diminish. Both potential conflicts for servant leaders – when bureaucracy or autocratic power becomes dominant, less able to change, and new leadership becomes less critical – and when the health of the organization reduces its ability to sustain internal and external stakeholders – call for a decision on the part of those practicing servant leadership: Is it better to continue to advocate internal change or is it UNDERSTANDING ONTOLOGICAL CONFLICT 81 SLTP. 3(2), 72-89 time to depart and align with an organization more adapted to servant leadership principles. Greenleaf (1977) suggests it is best to follow other servant leaders, but occasionally that may not be a practical solution. We need to explore each of the levels of conflict as to their nature and possible resolution strategies. Based on our model, it would appear that there are potential conflict points between servant leadership and organizations – of all types. These points of contention logically originate in the differences between the ontology of each at all three levels – their purpose, their methodology of operating, and their survival mechanisms. We might describe the difference in why they exist as a people verses purpose difference. When purposes differ between parties, conflict arises. Similarly, we could describe operational differences as a people verses process difference. When ways of getting things done differ, conflict emerges. Finally, we could describe survival differences as a people verses power difference. Entities need to adapt to survive, but can resort to power when adaptation appears unreasonable. Conflict arises if either entity resorts to power. The reasonable next question is what strategy can a practicing servant leader pursue in managing such conflict. The servant leader, or those choosing to practice servant leadership principles, are called to resolve these ontological moments of conflict when they occur, or prevent them from occurring. For the sake of this deductive model, we are limiting our discussion to strategies of servant leadership, rather than organizational strategies to reduce conflict. Both are legitimate, and a few studies previously noted above focus on organizational strategies. However, we are concerned for the moment on the practice of servant leadership in this context. Conflict resolution strategies might include some classic options of confrontation, avoidance, negotiation, or integration. These should be tested and researched within the community of servant leaders. Further, there may be some resolution strategies unique to servant leadership, such as self-sacrifice or what we might call a non-confrontational “judoflip” that converts the energy of the controlling power into organic power. But if we continue our deductive methodology, and pursue Aristotle’s methodology of finding the mean or balanced approach towards ethics, we may be able to discover some early hints of successful servant leadership strategies of conflict resolution. Further, we can compare these strategies to insights from some prior researchers. Table 2 takes the conclusions of Table 1, and then describes an Aristotle-like “golden mean of conduct” (Loomis, 1943, p. xxxiii) between the two extremes of conflict between the organization and the servant leader. Thus, a reasonable strategy emerges for servant leaders to either integrate solutions or avoid unnecessary conflict. We then discuss each strategy. J. ELLIKER © 2016 D. Abbott Turner College of Business. 82 Table 2 Possible Servant Leader Resolution Strategies Ontological Questions (from Table 1) Potential Moments of Conflict for Those Practicing Servant Leadership (from Table 1) Possible Servant Leader Resolution Strategy (between the conflict extremes) Why does it exist? When the pursuit of organizational purpose unintentionally dehumanizes its members in the accomplishment of that purpose When the servant leader continues to organizationally serve others who are redirecting the organization without consensus “People verses Purpose” In people verses purpose conflicts, the servant leader must either be a member of the senior organizational staff, or have consistent access to that group of leaders. This increases openness to challenge and growth in both individuals and the organization. How does it tend to operate? When the roles, processes and tasks overly restrict or reduce the capabilities of its new leaders When emerging leaders challenge and change roles, processes, tasks and mission at a pace beyond organizational capacity “People verses Process” In people verse process conflicts, the servant leader should encourage high levels of member engagement. This increases innovation, excellence, and growth of emerging leaders. How does it survive for the long term? When bureaucracy or autocratic power becomes dominant, less able to change, and less focused on growing new leadership When the larger healthy community no longer is dependent on the organization “People vs Power” In people verses power conflicts, the servant leader should model a self-sacrificial path that neither seeks power or independence. UNDERSTANDING ONTOLOGICAL CONFLICT 83 SLTP. 3(2), 72-89 People verse Purpose Conflicts First, when either organizational dehumanization or radical redirection emerges as people verses purpose conflicts, it suggests that servant leaders must choose a middle ground of either being a direct member of the senior organizational staff, or at minimum have consistent access to that group of leaders, in order to reduce that conflict. This increases senior leader openness to integrating the purposes of both organization and people growth. Servant leadership is not necessarily an abandonment of senior positional power. Rather, it is the ability to either set aside positional power, or use that power on behalf of growing others. This can be exercised at all levels of leadership, and increases the congruency between leadership and individuals within the organization – the very goal of Argyris’ work (2009). Further, Melchar and Bosco (2010) stated that “the modeling of servant leadership by strategic level managers can an organizational culture in which servant leaders develop among lower-level managers” (p. 84). Dominance between those with leadership power and those without, lowers the ability to serve each other. In a recent study on housing negotiations between parties, Asher (2015) stated that a key obstacle to resolutions is “the unwillingness or incapacity of the previously dominant party to experience a shift in attitude about the previously subordinate party’s capacity to exercise power and impose costs” (p. 49). Alternatively, those practicing servant leadership at a senior level can strategically help an organization that exists to serve. This was part of Greenleaf’s (1977, 1998) original vision, as well as others. Korten (1984) in espousing strategic organizational practice in the public arena said “the strategic organization represents … a proactive commitment to the ideal that the purpose of organization is to serve the needs of people, while facilitating the human growth of all participants” (p. 341). There is something very positively powerful about senior positional leadership that exercises servant leadership actions. It tends to give confidence in people rather than an over reliance on restrictive tasks. People verses Process Conflicts When people capacity verses operational task limitation conflict occurs, the servant leader is a natural fit for encouraging organizational membership engagement. Servant leadership naturally engages talent at all levels in bringing their innovative solutions to difficult operational problems. This assists growth in both individuals and organizations. Burke and Ng (2006) similarly suggest that “organizations will need greater commitment and engagement of staff in order to remain competitive” (p. 93). Junginger (2008) in discussing the emerging nature of a product design into “human-centered design” (p.3) described how a company could actually organize along those principles. Intuit’s (Ramsey and Finney, 2015) organizational engagement model, where individuals can be rationally engaged (paid well, benefits, good environment), emotionally engaged (I work on a good team with a strong mission), and/or inspirationally engaged (we are out to change the world), the servant leader can coach individuals and other leaders along that spectrum. Organizational membership engagement is an apparent key for the servant leader to reduce conflict. However, this strategy presupposes the prior strategy of senior leadership J. ELLIKER © 2016 D. Abbott Turner College of Business. 84 engagement or access. Otherwise, conflict that occurs in this operational realm, and rises for resolution at a more senior level, will be difficult to resolve. People verses Power Conflicts Finally, a key conflict that needs to be resolved by those exercising servant leadership is one that focuses on the long term survival of both organizations and servant-led communities. As an organization grows larger and more dominant in its sphere of influence, it tends to rely on its perceived power, and become less able to change. Paradoxically, as a servant-led community grows in its ability to function independently and healthy, it may begin to sense an ability to walk away from its original organization. To avoid these two extremes, a self-sacrificial servant leadership strategy can model a way towards both organizational and community humilities. Sachdeva, Iliev, Ekhtiari and Dehghani (2015) recently revisited the famous runaway streetcar ethics problem, and found that “people approve of self-sacrifice more than directly harming another person to achieve the same outcome” (p. 1). Choi and Mai-Dalton (1999) discussed the effects on followers of leader self-sacrifice. To resolve many of these ontological issues, those practicing servant leadership are often called to self-sacrifice for the good and growth of others. This may mean voluntarily setting aside the servant leader’s career goals or the short term performance of the company (Yukl, 2010). Oddly, it may be that this more selfless strategy on the part of the servant leader becomes the beginning of growth on the part of both the organization and emerging servant leaders. CONCLUSION Servant leadership has a unique place in organizational life. It provides for the recognition and growth of talent throughout the organization, the ability of the organization to thrive through the growth of others, and the possibility of affecting a larger community. But the interaction between organizations and servant leadership has its conflict and risks. These risks can be classified by ontological questions, including why each force exists, how they operate, and how they survive over the long term. The above ontological model provides a preliminary answer that yes, such conflict likely exists, and presents three possible strategies of resolution for those practicing servant leadership within organizations to consider, including encouraging organization engagement, senior leadership engagement, and a self-sacrificial approach. This model presents an interesting parallel to Argyris’ (1957, 2009) hypothesis on the integration of the individual and the organization where “the organization will tend to develop unintended consequences when there is a lack of congruency between the individual needs and organizational demands” (2009, p. 67). One practicing servant leadership within an organization, often finds themselves at this point of tension between the individual and the organization. All of this suggests something we might call The Human Organization, to borrow a phrase from Likert (1967) where we can actualize that which has been imagined, researched and proposed – generating growth through a living organism. This calls for the active involvement of servant leadership in order to generate and sustain growth for individuals within and outside the boundaries of any organization. UNDERSTANDING ONTOLOGICAL CONFLICT 85 SLTP. 3(2), 72-89 Limitations and Next Steps There are very significant limitations to the above study. It is deductively based as a first phase in a modified grounded theory research approach. Although it is informed through current research on servant leadership, the ontological conflict theory has yet to be tested in either qualitative or quantitative field studies. Second, although the model takes into account the nature of both organizations and servant leadership, our resolution discussion focused on actions that could be initiated by servant leadership. Organizational strategies are also quite legitimate. Finally, since we are taking an ontological view of servant leadership and organizations, we could explore differences well beyond the current or past century, and into both ancient and non-western histories. There are a number of potential follow-up studies that could shed light on this area of servant leadership and organizational interaction. These could include a mixed method that compares this deductive work with grounded theory from practicing servant leaders. By more fully understanding this dynamic, the practice of servant leadership can continue to have a positive impact on both individuals and organizations.
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