MNGT 320 RETHINKING LEADERSHIP

NAME: SAKSHI NEGI Course: BBA Business Studies Module: MNGT 320 GDGWI ID: 100078 Lancaster ID: 09403795 Cohort: 2010-2014 Word count: 2036

Leadership is lifting a persons vision to high sights, the raising of a persons performance to a higher standard, the building of a personality beyond its normal limitations. Peter Drucker said. (Forbes, 2012) Leadership is the ability of a superior to influence the behaviour of subordinate and persuade them to follow a particular course of action (Barnard, 1938). The key factor behind every organizations success is the leader. Leaders apply their leadership attributes such as ethics, values, beliefs, characters, skills and knowledge to carry out the process of leadership. (Bass, 1990). There are different theories that explain how people become leaders. The oldest is the great man theory which assumes that the capacity for leadership is inherent. According to this theory the great leaders are born, not made. The trait theory assumes that there are some qualities in people that make them leaders. There are different leadership styles that describe the qualities of leaders. Leaders change these leadership styles based on the situation according to situational leadership theory. The transformational theories focus upon the relationship between leaders and followers in which the leader motivates and inspires the subordinates. (Kendra cherry, 2012) The purpose of this assignment is to profile the leadership skills of Michael Dell, the chairman and CEO of Dell which is the leading online PC retailer.

Dell Inc. is an American MNC based in Round Rock, Texas, United States. It was founded by Michael Dell in 1984 at the age of 19 with $1000. The company develops, sells and supports computer and related products and services such as HDTVs, printers, cameras, MP3 players. The company is one of the largest information technology corporations in the world. According to the fortune magazine Dell Inc. is the 38th largest company in United States. (dell.com, 2014)

Michael Dells Biography:

Michael Dell is the chief executive officer and chairman of the board of directors of Dell Inc. He was born on 23rd February 1965 in Houston, USA. He has a net worth of around $14.6 billion and he is ranked as the 44th richest man in the world. At the age of 15 he disassembled his first computer, Apple II, and reassembled it to see if he could make his own computer. In the first year of college at the University of Texas in 1984, when he was 19 years old, he started his own business with only $1000 capital. His idea was to sell directly to customers rather than selling through the third party which made his product cheap. He sold personal computers from his university room on peoples requirement. Thus, this reduced the storage cost and allowed him to build customized PCs based on customers need. Michael Dell left college to focus on his new venture PCs limited which was later listed as Dell Computer Corporations in 1988. In 1992 Mr. Dell became the youngest CEO ever after Dell Computer Corporation was listed as one of the largest 500 companies in the world on the fortune 500. Dell changed its companys name to Dell Inc. and expanded its product line. Mr. Dell managed the company directly being the CEO for almost 20 years till 2004 when he resigned from the CEO post and became the chairman of the board of directors of Dell. However, he returned to manage the company as a CEO and replaced Mr. Kevin Rollins in 2007 at the request of the board due to 9% drop in the dell stock performance. Michael Dell spends a lot of money in philanthropic activities. In order to improve the life of children in USA and India, he and his wife Susan have formed the Michael and Susan Dell foundation. (Kasey Wehrum, 2009) Michael Dells Achievements: Michael dell led his company to become one of the largest companies in the world. According to fortune 500 it is ranked 41 out of the top American companies based on annual revenue. At the age of 27 he became the youngest entrepreneur to have his corporation listed in the fortune magazines list of top 500 companies. At the age of 24 he received entrepreneur of the year award from Inc. magazine, top CEO in American businesses from worth magazine and CEO of the year from financial world.

In 1987 Dell Computer Corporation became a public company and offered 3.5 million shares through IPO at a price of $8.5. In 1988 Dell opened its first international branch in United Kingdom. In 1996 the revenues of Dell Computer Corporation were boosted because of the revolutionary idea of selling PCs online. In 2003 new products were introduced by Dell such as television, printers and digital audio players to reflect their expansion beyond computers. Dell expanded their business by acquiring different businesses. In 1999 dell acquired ConvergeNet Technologies and acquired Alienware in 2006. Dell also acquired EqualLogic in 2008, Perot System in 2009 and Software-as-a-Service in 2010. In 2005 Forbes magazine identified Michael Dell as the 4th richest man in United States. (achievement.org, 2014) Michael Dells Skills Michael Dell possesses great leadership skills, some of them are as follows: 1. Visionary: the core idea behind Dell Computer Corporation was to provide computing technology in a more efficient way. The main question in his mind was how can we make the process of buying computers better? he had a clear vision and always focused on it. During his college days he once stated that he wanted to beat IBM and he achieved this goal in the following years when he started his own business. He has passed IBM in sales by recording revenue of about $7.8 billion a year. Michael Dell has a unique business philosophy and a powerful vision for the future. He wants a dedicated customer service, low-priced, high quality, and custom-made machines in his company. 2. Ready for any type of change: Dell decided to share his power with his long time partner Kevin Rollins when he realised that he didnt have all the right skills to change his company into a multi-product and multi-geography company. A new leadership model was developed under which there were two CEOs in one company. This model involved a lot of risk but Dell believed in a flexible organization and hence he was ready for any type of change. 3. Ability to learn and dedication: One of the first things I learned, though, was that there was a relationship between screwing up and learning: the more mistakes I made, the faster I learned. Michael Dell 4. Believe in consulting his staff: downward consultation was practiced by Michael Dell in order to gather opinions while deciding the right plan. He wanted all of his employees to be participative while deciding the plan so that they are motivated towards achieving the goal. 5. Train and develop people: dell knew that only if the company is devoted toward the long-term development and growth of the employees, they can help DELL implement its company strategy and achieve goals. 6. Action oriented leader: he believed that execution is more important than planning since output generates profit.

Michael Dells Leadership Style Michael Dell has his own leadership style, he is considered as a transformational leader. Transformational leadership embraces change and also makes change. Change can be in the form of innovation which involves exploring new opportunities. Michael has a strong ability to change situations and create something new to benefit the organization. There is a volatile competition in the computer industry therefore there is a need of continuous change in the organization. Fortunately, due to the transformational leadership of Michael the company can keep up with the changing market conditions and make profits. Michael Dell has revolutionized the way computers are sold. He is committed to providing best products and services and there is a continuous improvement in the business model. Mr. Dell entered business with no managerial knowledge but as his knowledge of all parts of business grew he turned into a charismatic leader. He motivated people by gaining their respect and loyalty. In the early days of his company he used to hang out with his engineers who thought he was a shy person. Although people who worked closely with him described him as a likable young man who was slow to warm up with strangers.(successful leaders,1999) He is known for speaking in a quiet reflective manner and motivating people with his charisma and aggressiveness. His experience in the industry has made him a good public speaker. He is considered as the most innovative guy of this decade for marketing computers. According to his business associates he has an aggressive personality who can easily influence people. Mr Dell follows a situational leadership style since he changes his leadership style according to the situation to fit the conditions of his organization. He is an affiliative leader who creates harmony and builds emotional bonds. People working in DELL like him and have a sense of loyalty towards him. He has managed the company since its inception successfully and he is known as a warm guy with good characters. He is emotionally attached to his employees and therefore when Mr. Kevin Rollins became the CEO, the performance of the employees got affected and Mr. Dell had to come back. He is a peoples man and for him people come first. Affiliative leader is responsible to heal rifts in a team or motivate people during stressful circumstances. For instance, in April 1993, when John Medica was put in charge of the notebook division at DELL several products got cancelled because the development of these products was taking longer time than expected. It was decided that only Latitude XP will be produced. The engineers were de-motivated since they spent a lot of time and energy developing these products. Michael Dell reinforced the dells strategy in order to motivate the engineers and encouraged them to pull together to make Latitude XP a success. Michael Dell is definitely a democratic leader who forges consensus through participation. He believes in collaboration, team leadership, communication and getting input from valuable employees. According to Michael business is about building teams and talent in the organization. The diversity of ideas and input helps a lot in making better decisions and is the most important component of success. When some of the products failed or had to be scrapped Michael motivated the team to work hard on the next product. His democratic leadership can be seen when he called an amnesty after he regained full control of DELL as a
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CEO in 2007. The managers and executives at Dell where encouraged to bring problems to him without any fear of recrimination. Mr. Dell is an authoritative leader since he has a clear goal and always stays focused on it. He was autocratic while he made some important decisions in his early life. But later he became participative when he shared his management with Mr. Kevin Rollins. Conclusion There are many people who do not support the leadership style of Michael Dell. According to them his style of leadership has led to decrease in innovation since most of the computer companies today are focussed on reducing cost to match dells profit instead of coming up with innovative ideas with respect to the product. Dells leadership style and business model is concerned with reducing cost. He is considered as a good business man but not an innovative leader. A successful leader doesnt follow any particular style instead he changes his style of leadership according to the situation. The business environment is continually changing and leader must respond in the same way. Every leadership style has its pro and therefore the most important thing is to use the right one at just the right time and in the right measure. The most important learning from this assignment is that successful leaders have a clear goal and vision. Leaders motivate their subordinates to follow the same vision and organizational goals. Michael Dell has no fear of admitting his incapacities and whenever he misses some skills he gets someone capable of doing the job to help him manage the business. It is rightly said by Theodore M. Hesburgh The very essence of leadership is that you have to have vision. You cant blow an uncertain trumpet.

BIBLIOGRAPHY
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