Impacts of Leadership on Organisation’s Internal Environment

Impacts of Leadership on Organisation’s Internal Environment

Impacts of Leadership on Organisation’s Internal Environment

The contemporary business environment is highly dynamic and competitive. Baker (2013) enlightens that the numerous dynamics presents both opportunities and challenges to the contemporary organisation. In this regard, Schoemaker and Krupp (2015) provides that it is important for business leaders to develop and adopt business practices that can help their organisations to overcome challenges in the business environment and at the same time exploit any opportunities in the environment. This paper focuses on Jeff Bezos leadership in Amazon to show how he influences Amazon’s internal environment. The aim of the paper is to discuss how organisational leadership influences internal aspects of an organisation such as culture and structure and how these affect organisational change.

Amazon was founded in 1994 by Jeff Bezos as an online retail store to sell books (Stone, 2013). Under his leadership, the company has grown to become the biggest online market place and has expanded its portfolio from just books to different household goods such as electronics, food products and clothing among other products (Stone, 2013). Rossman (2016) opines that the secret of Amazon’s success is Jeff Bezos leadership which has ensured that the firm is able to offer effective and efficient customer focused solutions. Bezos leadership approach has facilitated the organisation’s flexibility and ability to change in response to changing market trends and consumer needs and preferences (Stone, 2013).  This has been beneficial to the organisation as contemporary businesses need to embrace change from time to time to enhance their survival and success in the modern business environment. To this end, it is essential to understand just how a leader’s approach to leadership affects the internal environment of an organisation and its effects on organisational change.

An in-depth look at Jeff Bezos leadership reveals that he utilises transformational leadership to run his organisation. Transformational leadership involves the process through which a leader interacts with his or her followers and creates effective and solid relationships that result to increased levels of trust, and both intrinsic and extrinsic motivation in both the leader and the followers (Schoemaker and Krupp, 2015). Avolio and Yammarino (2013) expounds that transformative leaders transform their followers to become better performers through being charismatic, and providing guidance and inspiration to followers.  In other words, transformative leaders emphasise on creating good organisational relationships that allow members coordinate and complement each other’s efforts towards the accomplishment of organisational goals.  In Amazon, Bezos engages transformational leadership in several ways. For instance, he emphasises on maintaining a culture where organisational members are given the autonomy to make important decisions relating to their work at Amazon. In fact, Bezos provides that the only way through which the organisation can respond to new changes in the environment is through fast decision making that can only be facilitated by giving organisation members the autonomy to make the best decision based on prevailing market needs (Stone, 2013).This has facilitated effective and efficient organisational change as fast decision making allows the organisation to adjust to the ever changing market environment easily.

As aforementioned, inspiration is a vital tenet of transformational leadership. Transformative leaders inspire their followers to achieve through mobilising their potentials and creating opportunities where their followers can utilise this potential (Blagg and Young, 2001). Looking at Amazon, it is clear that the leadership inspires the organisational members to become their best in several ways. For instance, Bezos likes to remind his employee that experimentation is what allowed him to start Amazon and therefore urges all organisational not to be afraid of experimenting new ways of doing things at Amazon (Rossman, 2016). In fact, Amazon provides that failure is just part of the success and therefore provides their employees with an opportunity to fail where necessary in their bid to improve the way the organisation undertakes its operations (Rossman, 2016). Inspiring employees and letting them know that failure is just part of the success process and that failure should not discourage a person from trying again has made Amazon an innovation power house (Baker,  2013). In fact, innovation facilitated the transition of Amazon from being a bookseller into a giant online market place where almost every household product is available. In other words, inspiration provided through transformative leadership allows for innovation which in turn affects organisational change positively as organisational members are constantly striving to improve how an organisation undertakes its operations.

Despite the positive impacts of transformative leadership, a close scrutiny on Amazon reveals that the approach also has its weaknesses. For instance, obsession on experimentation and innovation may have negative impacts on the organisation. Northouse (2015) provides that different people have different strengths and competencies. While some people may be good at experimenting and innovating, others may be good in other areas such as implementing new changes and innovations. To this end, encouraging all people to innovate and even make mistakes where necessary may encourage even people with bad ideas to put them in practice which may end up working against customer satisfaction levels. This may have a negative impact on organisations such as Amazon which emphasises on creating a competitive edge through enhancing a customer’s positive experience. To this end, it is clear that no single leadership approach can be suitable for all situations. While transformational leadership may be effective in facilitating good organisational relations to facilitate innovation and effective organisational change, transactional leadership may be required where necessary to reward and punish members that abuse their privileges. Transactional leadership is based on rewarding good performance and punishing members for unwanted behaviours as way of enhancing motivation.