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Background of Woolworths Limited

Questions:

How Much An Effective Leadership Style Would Affect The Performance Of The Employee?

What Are The Leadership Issues Which Impact Employee Motivation Within The Business Operations Of Woolworths Limited?

What Is A Relationship Between Leadership Style And Employee Performance Into Retail Sector?

What Are The Possible Solutions To Improve The Leadership Style Of Leaders?

The research study is based on analyzing the leadership issues in Woolworths Limited. Woolworths Australia is one of the largest supermarket chains within Australia which are providing fresh food to people. This supermarket of Australia is owned by Woolworth Limited. Vann, Coleman and Simpson (2014) stated that leadership skill would encompass the capability of an individual to lead the workers and entire organization. A better leadership would help an organization to grow in the market with increasing into profitability as well as productivity. A leader helps to set direction, build a vision and create of something innovative to meet its organizational goals (Clarke 2013). Leadership should map where the organization need to go to win a high value in the marketplace. The leader should set direction, use of management skills to inspire and motivate people to go towards right direction for gaining of profitability.

This study analyzed the leadership issues in the supermarket and evaluated of new strategies to improve its marketing leadership position in the Australian marketplace. This provides an analysis of the contemporary position of Woolworths due to which its leadership position is affected and forecasted its performance in Australia with recommendations to improve it in the future. 

Woolworths has it’s headquarter in New South Wales, Australia and it is operated as a retailer throughout the supermarket, merchandise stores and petrol stations. Their retail products are consisted of fresh food, beverages, petroleum, grocery and others. As this supermarket is mainly based on food products, therefore health of the customers is the main concern of Woolworths. Therefore, leadership skills is required to take right decisions concerning on health of people. One of the main competitors of Woolworth is Coles. However, it is shown that Coles consists of 37 percent of the market share of Australia where Woolworths consists of 43 percent. Therefore, in order to gain more market share, Woolworths should require a great leader who would take proper decisions and inspire others to gain organizational goals (Woolworthsgroup.com.au, 2015). From few years, Woolworths was facing management issues such as lack of leadership skills to regain a sustainable sales momentum. Good leader should win customer trust and greater share into shopping basket.

Leadership and its impact on organizational growth

Figure 1: Logo of Woolworths Limited

(Source: Woolworthsgroup.com.au, 2015)

Retail sector are competitive especially the supermarket and to gain a competitive advantage into the marketplace the retail organization needs of good leader helps to gain market share and implement of new strategy. The aim of this research is to analyze the leadership practices and aspects into Woolworths Limited. A study on the leadership issues is conducted into a specific organization and country, Woolworths Limited as well as Australia respectively. Mostly, the study is analyzed the impacts of lack of leadership skills on level of employee motivation into Woolworths Limited. This research study provides a critique as well as application of the current theories of leadership. It also develops of leadership concepts and also theories to analyze the selected research topic. The aim is to evaluate of recent leadership theories which are developed by the researchers. This study is mainly about the effect of the leadership style on the performance of employee. Following are the research objectives:

  • To identify of leadership issues that impact the level of employee motivation
  • To explore of relationships between leadership style as well as employee performance
  • To analyze the significance of the leadership style into performance of employee
  • To develop of leadership model that shows a relationship among leadership style as well as employee performance
  • To provide solution to the identified leadership issues and provide proper recommendations for futur

Aydin, Sarier and Uysal (2013) stated that a leaderships is a process which can direct and influence the behaviour of the others towards accomplishment of gaols. () suggested that a leader should deal with organizational changes and focused on long term goals achievement. CEO of Woolworths, Bradford Banducci was being criticised for its poor trading performance. The supermarket is delayed into entering of convenience stores sector as well as set up of their online operations in selling of food. Du et al. (2013) demonstrated that there are challenges into retail industry due to streamlining the management team. Arnold et al. (2015) believed that an innovative marketing strategy will help Woolworths to proper into competitive market. It helps to enable of faster decisions throughout streamlined structures where the colleagues are empowering under the leadership roles. Collaboration among the team members also help into achieving of competitive advantage. Sometimes, the senior business leaders are caused delay in responding with the solutions which becomes out of date (Nanjundeswaraswamy and Swamy 2014). The main challenges that a store manager faces when they are successful into managing of stores include of managing a higher employer rate of turnover, delivery of quality services for the customers, increase into profit margin and reduction of inventory shrinkage. Leadership consists of many aspects like worker motivation, strategic planning and change management (Anderson and Sun 2017). In an attempt to cover all those aspects of the leadership in this single research will result into a poor research study. 

Analysis of Leadership Issues in Woolworths Limited

Keskes (2014) stated that most of the retail organizations are required of strong leadership style which would stimulate the performance of employee. The retail organization, such as Woolworths Limited faces problems such as poor innovation, lower productivity and inability to achieve the performance targets. Those all identified problems are happened due to lack of strategic leadership style of the leaders (Choudhary, Akhtar and Zaheer 2013). It will affect the performance of the employee as they are not motivated towards their work and organizational goals. Therefore, there is a requirement of effective leader those can lead people to become more effective in the work. Leadership theories will help to understand the concept more accurately.

Figure 2: Key elements of leadership

(Source: Choudhary, Akhtar and Zaheer 2013, pp-437)

The research work is being designed to study the impact of the leadership style on the performance of the employee within Woolworths Limited. In order to achieve of objectives as well as goals, there should be a higher relationship among the leader as well as workers. Therefore, productivity should be increased within the supermarket which is based on higher performance of employee dependent on leadership style. Roueche, Baker and Rose (2014) categorized of various leadership style which is explained on scale to range from automatic throughout democratic to show the degree of authority as well as decision makers to make the power of leaders as well as employees. Ejere and Abasilim (2013) demonstrated that leadership style is involved of all the members of team to identify of required goals and develop strategies for reaching the organizational goals. This particular research study is explored to transformational and transactional leadership style and it discusses the impact of the employee towards the leaders and their performance into the retail sector in Australia.

Transformational leadership: In this type of leadership, the leaders are motivated the employees to exceed the expectations. The leader leads the employees by offering an organizational vision. The leaders of Woolworths Limited have lack of transformational leadership style that would affect the employee motivation and performance. Dumdum, Lowe and Avolio (2013) introduced that transformational leader should modify the attitudes of the employees. According to Shahhosseini, Silong and Ismaill (2013), transformational leaders should help the followers to gain organizational goals. The followers are encouraged by influencing the beliefs, attitudes, behaviour as well as organizational values. The employees are developed of trust as well as respect towards the leader and it wills to display of unexpected behaviour to execute the expectations of leader.

Possible solutions to improve leadership style

Transactional leadership: Breevaart et al. (2014) mentioned that this leadership style is that when the leaders are concerned on the achieving of the goals. The employees are rewarded to accomplish of the tasks. The leaders are more concerned towards the finish of the task and the employee’s performance. Both positive as well as negative reinforcements are to be achieved required results. Tyssen, Wald and Spieth (2014) criticized two of the dimensions for this type of leadership style such as contingent reward as well as expectation of management. Odumeru and Ogbonna (2013) stated that contingent reward is that the leaders use of rewards as well as promotion to give required results from the followers. Management expectation means the leaders are taking of correct actions when there is no control over the situations. The leaders should have anticipation behaviour.

Laissez faire leadership: The leaders should avoid of making decisions. They are unwilling to take of proper actions and avoid of the situations. The leaders are not providing feedback to the followers (Avolio and Yammarino 2013). The employees are not satisfied, unproductive as well as incompetent in the work. Therefore, they are not motivated to work.   

Figure 3: Theoretical model of leadership style

(Source: Tyssen, Wald and Spieth 2014, pp-370)

McCleskey (2014) stated that there is a relationship between leadership style as well as employee performance. Van Knippenberg and Sitkin (2013) argued that in another study it is seen that there is a positive correlation among the leadership style as well as employee performance that leads to job satisfaction. The retail manager of Woolworths should have leadership qualities so that they can gain as well as achieve the organizational outcomes. The leadership style influences the employee performance both internally and also externally (Tseng 2017). Transformational leadership style results into willingness of the employees towards the desired organizational goals. While observing the employee performance and their job satisfaction in context of the leadership, some of the predictions are being derived. Transformational leaders should foster towards the job satisfaction due to sense of ownerships (Birasnav 2014). They encourage the freedom of the employees and teach them their responsibilities.

Northouse (2015) analyzed that the leaders encourage the development of the employees, therefore the employees feel that their leaders are take care of them. In case of the transformational leaders, the reward system is not good. Therefore, the employees think that transactional leaders are better in this case as they provide a good reward and incentive system. Price and Weiss (2013) argued that the managers are more satisfied to those managers who are supportive. The employees are expected of good guidance and support from their supervisor, when it helps them to take any decisions. From the entire study, it is analyzed that the employee retention is higher in case of transactional leadership as comparison to the transformational leadership (Antonakis and House 2014). This transformational leadership style helps the employees to develop their skills by increasing of job satisfaction as well as organizational commitment. Therefore, most of the employees like the transactional leaders.

Impact of leadership style on employee performance

McGregor Theory X and theory Y is the best human motivation and management theories. This particular theory is applied by the managers in development of motivational factors used to motivate the employees towards their work. Lussier and Achua (2015) stated that theory X is analyzed the importance of the supervision, external rewards as well as penalties. According to this theory, the employees of Woolworths Limited should provide with financial incentives so that they should be motivated to work. As under this theory, it is assumed that the employees are lazy and they are not interested to work (Turnnidge and Côté 2016). Therefore, rewards as well as punishments are the best thing to motivate the workers. Based on this theory, the employees are not wish to work and take work related responsibility. On the other hand, theory Y is analyzed on the motivational role for satisfaction towards the job and encourages the employees to do their respective tasks without supervision. People are happy to work and they are already motivated towards their work (Roueche, Baker and Rose 2014). Therefore, there is no need of rewards as well as punishments of employees as they are already willing to work. According to this theory, the employees can achieve their goals by focused on efforts on the organizational objectives.

Herzberg’s hygiene model is another motivational theory which is based on two factors and therefore it is also a two factor theory. From the findings of this factor, it is analyzed that job are related to both satisfaction as well as dis-satisfaction (Shahhosseini, Silong and Ismaill 2013). The goal of this particular theory is to eliminate the factors of dissatisfaction and create of situations towards job satisfaction. The hygiene factors are included of fixing of poor as well as obstructive policies of the company. It provides of effective as well as supportive supervision. The factors create of supporting culture towards respect and dignity of the workers. The other Herzberg factors are related to job enrichment which provides more satisfaction to the workers (Tyssen, Wald and Spieth 2014). It provides an opportunity to achieve organizational goals, recognition of contributions of workers, provider of responsibilities to the team members and providing of opportunities to gain competitive advantage throughout interior promotions.

This particular research study is based on secondary data collection method. Choudhary, Akhtar and Zaheer (2013) guided that the researchers state that descriptive research method is suitable for this study as the information and data are gathered about the present existing condition of the leadership issues within the retail sector, Woolworths Limited. The case studies based on Woolworths are used to collect and investigate the information about the impact of the leadership style on the employee motivation and job satisfaction (Avolio and Yammarino 2013). The purpose of this study is to describe the situation of the organization where and why leadership issues are faced by the management. It exists at time of study and explores of specific phenomenon on the performance of the employees as well as organization. Leadership style provides a significant effect into the business as it affects from the senior towards top management level employees (Roueche, Baker and Rose 2014). It creates an organizational culture which would influence the employee’s performance in terms to meet with the deadlines of work.

Transformational and Transactional Leadership styles

The researcher is used of different types of methods on leadership to engage the leaders in the research. Collaborative learning helps to enable the participants to take part into the research study. As leadership is a complex and critical phenomenon, therefore it consists of various dimensions (Vann, Coleman and Simpson 2014). Various journal articles and case study on selected organization is used to gather information on the leadership styles used in the retail sector. Different leadership theories such as McGregor Theory X and theory Y and Herzberg’s hygiene model are used to find solutions for the identified leadership issues.

From the entire research study, it is found that leadership skill would include the potential of an individual to provide of direct guide to the workers as well as entire retail organization. A better leadership would assist a group to grow up within the marketplace with growing into productivity as well as efficiency. The main leadership issues that a retail manager faces when they are winning into organization management comprise of managing an advanced employer rate of turnover, release of quality services for the customers, enlarge into profit margin as well as lessening of inventory reduction. Productivity should be improved within the supermarket which is found on superior performance of employee dependent relative on the various leadership styles. The employees are required to develop of belief as well as esteem towards the leader and it wills to present of unpredicted behaviour to implement the expectations of leader. The employees are accepted a good leadership as well as support from their manger and also supervisor, when it helps them to obtain any decisions. From the entire study, it is analyzed that the employee retention is higher in case of transactional leadership as comparison to the transformational leadership.

Management anticipation means the leaders are taking of accurate actions when there is no manage over the situations. The leaders should have expectation behaviour. According to the Theory X and theory Y, the employees of Woolworths Limited should offer with financial incentives so that they should be stimulated to work. As under this theory, it is supposed that the employees are lazy as well as they are not attracted to work. On the other hand, Herzberg hygienic factor, it provides a chance to accomplish of the organizational goals, appreciation of assistances of the workers, supplier of responsibilities to the workers as well as staffs and provided of opportunities to increase of competitive advantage all through the internal promotions.

Relationship between Leadership Style and Employee Performance

Conclusion

It is concluded that a successful working environment is characterized by an open communication at all the levels. An effective manager should always motivate as well as inspire the staffs on individual basis. The management of Woolworths should identify the requirements of their employees and identify the motivational factors. The supermarket is delayed into entering of convenience stores sector as well as set up of their online operations in selling of food due to lack of leadership skills. The management of the supermarket should start an incentive method in which the performance of employees is guided. The staff members should have authority to take possible steps to empower their jobs. Different leaders have different leadership style. The leaders should have authority to take possible decisions regarding the sake of the organization. The study is being focused on explore of different leadership styles into Woolworths to stimulate the performance of employees. It includes of execution of various duties, meeting the work deadlines and achievement of organizational goals. From the research methodology, it is observed that secondary data analysis method is used to gather data and information. The data provides that each planner should come up with different strategies and plans that will strategically position within highly competitive and complex business environments.

Following are some of the recommendations that are suggested to implement a good leadership style into Woolworths Limited:

Implement of transactional leadership: Woolworths should empower towards transactional leadership style to motivate their employees. The leaders are concerned on the achieving of the goals. The employees are being rewarded through incentive methods to accomplish of the tasks. The leaders are more concerned towards the finish of the task as well as best performance of employees. Proper leadership style should help to motivate the employees in their job.

More employee empowerment: There should be an increase into employee empowerment by development of the teams and measurement of power as well as authority to the employees. Therefore, the employees should ignite of the potentials; feel part of the organization and provide of maximum performance into the organizations.

References

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Antonakis, J. and House, R.J., 2014. Instrumental leadership: Measurement and extension of transformational–transactional leadership theory. The Leadership Quarterly, 25(4), pp.746-771.

Arnold, K.A., Connelly, C.E., Walsh, M.M. and Martin Ginis, K.A., 2015. Leadership styles, emotion regulation, and burnout. Journal of occupational health psychology, 20(4), pp.481-490.

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Aydin, A., Sarier, Y. and Uysal, S., 2013. The Effect of School Principals' Leadership Styles on Teachers' Organizational Commitment and Job Satisfaction. Educational sciences: Theory and practice, 13(2), pp.806-811.

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Woolworthsgroup.com.au (2015). Woolworths Supermarkets - Woolworths Group. [online] Woolworthsgroup.com.au. Available at: https://www.woolworthsgroup.com.au/page/about-us/our-brands/supermarkets/Woolworths [Accessed 17 Sep. 2017].

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