The corporate social responsibility of an organization or leadership style mainly focuses on the economic and ethical aspects. Through the CSR model the organizations integrate ethical regulations that the company follows in their business practice. The organization fulfills its responsibilities towards the community by implementing this model. It has been observed that often the people mistake corporate philanthropy as corporate social responsibility. Before analyzing the philanthropic activities of Carlos Slim Helu in connection with him ethical practice it is important get the theoretical knowledge about the corporate social responsibilities, philanthropy and ethics.
Corporate Social Responsibilities (CSR)
There can be several types of corporate social responsibilities. The ethical CSR is the organization’s fulfilling the ethical, legal and economic responsibilities (Suliman, Al-Khatib and Thomas 2016). While engaging in strategic CSR the organization engages in community services that help the company to achieve the strategic goals. In the altruistic CSR the leadership of an organization goes beyond the responsibilities of ethical CSR and engages in philanthropic responsibilities in order to help the needy community irrespective of its strength of benefit generating (Christensen, Mackey and Whetten 2014). Through various CSRs the company achieves various steps of development. In Corporate Social Responsibility along with the philanthropy, ethical and legal community standards, acting as a responsible corporate citizen and achieving sustainability.
Corporate philanthropy is just a part of the corporate social responsibility. The global environment of business and competitiveness are changing and to hold the value and reputation the corporate organizations engage in strategic philanthropic initiatives (Meister 2012). The corporate philanthropy can simply be defined as the organization’s engaging in greater cooperation with the communities.
Business ethics leads the company to think beyond the profit and involves in a business of trust and honesty. Most organizations set an ethical standard that they follow for achieving the efficiency and sustainability (Laasch and Conaway 2014). The companies think beyond just the traditional profit based practice and provides a foundation for moral values and business priorities. Many recent legal and ethical scandals have highlighted the need for ethical practice in the corporate organizations (Soltani 2014). The ethical practice surrounds the corporate social responsibilities and other aspects like the leadership style, addressing globalization, fair trade, social enterprise and sustainability.
The personal philanthropy of Carlos Slim been a support to his business interests
World’s richest man Carlos Slim Helu had engaged in significant philanthropic initiatives in Mexico through spreading internet. In recent past years his charitable foundation Telmex Foundation and Carlos Slim Foundation have donated about 8 billion. Carlos is donating 3 million in providing high speed internet through Connect2Compete to Latino families of USA (Katz and Levine 2015). Carlos has been engaged in various businesses like and philanthropic interests vary as well. He had donated 300000 bicycles to help the poor rural Mexican children, maternity care to a million of mothers and provided 800000 surgical operations free and 100000 bail bonds for first time convicts (Kandell 2013). Few have criticized Carlos Slim Helu’s philanthropy as they accuse him of manipulating the telecom business of the country by blocking other companies and the damage created by it cannot be compensated by his philanthropy (Davies 2015). He promises to donate a large part of his wealth to the community service in near future. The company has been donating charity for a long time in large number without any ethical compromise.
Leadership styles and theories
Traditional leadership styles
In the traditional leadership practice following are the certain styles that have been adapted by various organizational leaders. In the directive leadership type the leader instructs the subordinates what exactly they need to do in order to fulfill the organizational goal (Kalaluhi 2013). The leader holds the maximum authoritative power over the organizational activities. The autocratic leadership style is similar to this but with more emphasis on tasks as the leader does not let the subordinates take part in the decision making. In the consultative leadership style the leader asks for suggestions from the team members during the decision making (Gonos and Gallo 2013). This is also task oriented like the directive leadership style but values the opinions of the employees as well. The participative leadership style encourages the leader to act like a team member and discuss decisions among the team members (Girma 2016). Every other team member plays equal significant role in the final decision making. This style is also termed as the democratic leadership style. In the negotiative leadership style the leader initiates a political approach where he incorporates personal decisions and incentives are used for utilizing certain purposes. In the delegative leadership style the leader does not take active participation in the decision making and gives the responsibility to his team members.
New leadership styles
According to Burns (1978) the new leadership model can be categorized in the following terms.
Transactional leadership style
This leadership style allows the leaders to give the employees rewards because of their performance and effort. The leader focuses on bigger performance goals so that the organization achieves high performance vision. The leaders encourage the employees to engage in certain strategies in order to work for the desired vision. This leadership allows the employees to establish effective relationship among the team members by stressing on certain specific goals (Hamstra et al. 2014). The leadership style includes exception based management, contingent awards and laissez faire. The leader expects their employees to have the same commitment and employs training and motivation to enhance their performance.
Transformational leadership style
Transformational leadership enables the leader with the power to motivate and inspire the subordinates beyond just the assigned tasks (Wang, Demerouti and Le Blanc 2017). The leader can implement changes through this leadership style which is primarily based on the transformational model. The present situation gets improved through this style and most issues are resisted before they start affecting. Other than these there is charismatic leadership style that helps the leader to lead the employees towards his desired direction.
Theories of leadership
The theory that is most suitable discussing his leadership style would be Situational Leadership Theory. The Situational Leadership Model is developed by Ken Blanchard and Paul Hersey during 1970s. The situational leadership model is based the leader’s behavior including his words and actions both as presented to his subordinates (McCleskey 2014). The job related maturity plays major role in determining the leader’s behavior. The leadership and the management activities both are equally important for this model that successfully enhances the organizational performance. The four aspects that the model focuses on are Directing, coaching, participating and delegating.
The leadership approach of Carlos Slim Helu
The leadership contingency theories tell that no leadership style is best style as certain style is effective in certain situation. Therefore it is most effective for the leaders to be engaged in the various leadership styles like Carlon Slim Helu does. His leadership style is not definite as he changes it according to the situations. At certain section of his business he engages in autocratic leadership strategies focusing only on tasks and in other circumstances he applies transactional leadership style and gives more importance to people oriented projects. At certain phases the transformational leadership style is dominant as the specific schedules and gradual growth are in action. The leadership style of Caros Slim Helu thus can be defined as the mixed leadership style where transformational and transactional styles both get merged or separately used. However he is not considered to be a charismatic leader as Martinez (2013) discussed that not many people in the global market outside Mexico and USA know him (Combe 2014).
Maslow’s Need Hierarchy
The theories that focus more on the individual motivation through finding out personal needs are considered as the content theories of motivation. The classic definition defines motivation as an internal process of directing, energizing and sustaining human behavior (Reeve 2016). Psychological drives act as the key drivers for the motivation (Maslow 2013). If the leadership is able to establish proper motivation an effective relationship can be built between the employees and the organization (Kuppuswamy et al. 2017). Maslow has described five levels of need like psychological need, need for affection, safety, esteem and self actualization. The lower levels of the need hierarchy are fulfilled by the management leadership in order to get the maximum employee efficiency and improved organizational performance.
McClelland’s need theory
McClelland’s need theory discusses three types of need such as need for achievement, affiliation and power. According to McClelland the employees with high need for affiliation generally do not have much position power and need to work on building interpersonal relationships (McClelland 1965). People with high need for achievement show personal involvement in performing task and through performance feedbacks they aim to achieve difficult goals.
Process theories of motivation
In the equity theory the employees evaluate their performance at regular interval that leads them to realize the difference between his effort and the effort by his fellow employees. the expectancy theory highlights the involvement of the employees’ cognitive process and decides which process they prefer. The Porter Lawler model integrates all elements from other motivation theories and highlights that individual theory is not enough for achieving the goals and a more integrated approach is required (Lawler and Porter 1967).
Positive reinforcement allows the leaders to appreciate the employees with positive feedbacks if they are demonstrating positive performance. Reward is significant parts of the positive reinforce policies. Negative reinforce allows the leaders to eliminate undesirable consequences. Punishment ensures elimination of positive consequences to lower the chance of undesirable behavior. Extinction or lack of reinforcements can affect organizational behavior.
Motivation under the leadership of Carlos Slim
As we discussed in his philanthropy it has been noticed that he looks for every basic need not only of his employees but even non employees. The 10 principles by Carlos Slim that the employees of Telmex follow express how the needs of the employees are addressed (Helú 2017). The company provides the employees with basic psychological needs by giving them right wages. The company ensures the security of the employees as they believe the employees are the important asset of the company. Carlos Slim believes that the control of the company should not be limited just by the leaders the employees play significant role and the collaboration is necessary for the desired growth.
Power can be defined as the ability to influence people and it can come from various resources. French and Raven have explained that power can of two kinds such as organizational power and personal power. The personal power is more effective in maintaining the consumer satisfaction, employee efficiency and commitment than the organizational power. The coercive power from the organizational power has negative impact on the employee outcomes.
Sources of organizational power
Legitimate power is given to the person based on his position in the organizational hierarchy (Gregoire and Arendt 2014). The organization gives the specific person some specific power and he can use them according to the need of the organization. The formal authority is the leader of the organizational management and generally he holds the maximum power over the organizational activities. In the practice of legitimate power, the leader expresses his decisions and the subordinates follow those.
The reward power enables the leader to get the things done through rewards or incentives. The rewards can be monitory, promotional or through other means. The employees value the rewards most so the leaders can control and influence the employee behavior through the rewards.
Coercive power influences the leader to coerce the employees if they are not meeting their expectations (Pierro et al. 2013). This power is generated through imposing of certain strategies like strict deadlines or more work hours or punishment.
Sources of Personal power
The expert is someone who is recognized by his skills, knowledge and abilities. This power enables the expert to gain respect, reputation and influential power in the organizational hierarchy (Ojo, Ree and Carretta 2016). The legitimate power is achieved through the expert power. The employees attribute expertise and knowledge to the experts.
Referent power is largely depended on the individual personality(Ojo, Ree and Carretta 2016). The charismatic leader often shows this attributes as through his personal relationship with his employees he gets certain things done. As the employees like or respect the leader that provides the leader with this power.
Power of Carlos Slim
The expert power is related to the influence. Influence enables the leader to have an effect on the employees so that they work towards his intended way. The various sources of power seem to be completely separated but a close observation reveals that they are not so separated. The expert power from the personal power sources is more present in the evident. However experienced leaders like Carlos Slim, combines various sources of power depending upon the requirement of certain situations.
The business strategies and leadership styles Carlos Slim Helu has reached him the tip of the success. The long in depth discussion over his philanthropy, leadership style and power highlights that the business practice of Carlos Slim is not limited or static and cannot be defined by a single category. They are as varied as his number of various businesses. He understood the demand and implemented methods that were ahead of contemporary time. The motivation and leadership theories reflected on his business strategies but mostly in combination or with close relationship with one another. Carlos Slim Helu is a successful example of a global leader who has successfully set an example to the entire business world as an successful, effective and influential leader.
Burns, J.M., 1978. leadership. NY.
Christensen, L.J., Mackey, A. and Whetten, D., 2014. Taking responsibility for corporate social responsibility: The role of leaders in creating, implementing, sustaining, or avoiding socially responsible firm behaviors. The Academy of Management Perspectives, 28(2), pp.164-178.
Combe, C., 2014. Introduction to management. Oxford University Press.
Davies, R. (2015). Public Good by Private Means: How philanthropy shapes Britain (1st ed.). Alliance Publishing Trust.
Girma, S., 2016. The relationship between leadership style, job satisfaction and culture of the organization. IJAR, 2(4), pp.35-45.
Gonos, J. and Gallo, P., 2013. Model for leadership style evaluation. Management: journal of contemporary management issues, 18(2), pp.157-168.
Gregoire, M.B. and Arendt, S.W., 2014. Leadership: Reflections over the past 100 years. Journal of the Academy of Nutrition and Dietetics, 114(5), pp.S10-S19.
Hamstra, M.R., Van Yperen, N.W., Wisse, B. and Sassenberg, K., 2014. Transformational and transactional leadership and followers’ achievement goals. Journal of Business and Psychology, 29(3), pp.413-425.
Helú, C. (2017). . Carlos Slim Helú .. Carlosslim.com. Retrieved 25 September 2017, from https://www.carlosslim.com/desde_ing.html
Kalaluhi, S., 2013, January. Leadership in context: The moderating effect of follower need for autonomy on directive leadership style, empowering leadership style, and leader effectiveness in volunteer organizations. In Global Conference on Business & Finance Proceedings (Vol. 8, No. 1, p. 139). Institute for Business & Finance Research.
Kandell, J. (2013). Carlos Slim's Giving Side: The Billionaire Is Ramping Up Philanthropy. Institutionalinvestor.com. Retrieved 25 September 2017, from https://www.institutionalinvestor.com/Article/3266168/Carlos-Slims-Giving-Side-The-Billionaire-Is-Ramping-Up-Philanthropy.html
Katz, V.S. and Levine, M.H., 2015. Connecting to Learn: Promoting Digital Equity among America's Hispanic Families. Joan Ganz Cooney Center.
Kuppuswamy, N., Saminathan, V., Udhayakumar, M., Vigneash, L. and Gopalakrishnan, P., 2017. The Role of Motivation on Employee Performance in an Organization.
Laasch, O. and Conaway, R., 2014. Principles of responsible management: Global sustainability, responsibility, and ethics. Nelson Education.
Lawler, E.E. and Porter, L.W., 1967. The effect of performance on job satisfaction. Industrial relations: A journal of Economy and Society, 7(1), pp.20-28.
Libert, B. (2014). What Businesses Can Learn from Maslow’s Hierarchy of Needs. Deloitte.wsj.com. Retrieved 25 September 2017, from https://deloitte.wsj.com/cfo/2014/10/07/what-businesses-can-learn-from-maslows-hierarchy-of-needs/
Maslow, A.H., 2013. A theory of human motivation. Simon and Schuster.
McClelland, D.C., 1965. Toward a theory of motive acquisition. American psychologist, 20(5), p.321.
McCleskey, J.A., 2014. Situational, transformational, and transactional leadership and leadership development. Journal of Business Studies Quarterly, 5(4), p.117.
Meister, J. (2012). Forbes Welcome. Forbes.com. Retrieved 25 September 2017, from https://www.forbes.com/sites/jeannemeister/2012/06/07/the-future-of-work-corporate-social-responsiblity-attracts-top-talent/
Ojo, A., Ree, M.J. and Carretta, T.R., 2016. The Correlation between Leadership Style and Leader Power. Air force research lab wright-patterson afb oh human performance wing (711th) human effectiveness directorate/warfighter interface division.
Pierro, A., Raven, B.H., Amato, C. and Bélanger, J.J., 2013. Bases of social power, leadership styles, and organizational commitment. International Journal of Psychology, 48(6), pp.1122-1134.
Reeve, J., 2016. A grand theory of motivation: Why not?. Motivation and Emotion, 40(1), pp.31-35.
Soltani, B., 2014. The anatomy of corporate fraud: A comparative analysis of high profile American and European corporate scandals. Journal of Business Ethics, 120(2), pp.251-274.
Suliman, A.M., Al-Khatib, H.T. and Thomas, S.E., 2016. Corporate Social Responsibility. Corporate Social Performance: Reflecting on the Past and Investing in the Future, p.15.
Wang, H.J., Demerouti, E. and Le Blanc, P., 2017. Transformational leadership, adaptability, and job crafting: The moderating role of organizational identification. Journal of Vocational Behavior, 100, pp.185-195.