Nâng cao hiệu quả áp dụng phong cách lãnh đạo tự do trong doanh nghiệp nhỏ và vừa: Nghiên cứu điển hình tại Việt Nam

Nội dung text: Nâng cao hiệu quả áp dụng phong cách lãnh đạo tự do trong doanh nghiệp nhỏ và vừa: Nghiên cứu điển hình tại Việt Nam

1. INTERNATIONAL CONFERENCE FOR YOUNG RESEARCHERS IN ECONOMICS & BUSINESS 2019 ICYREB 2019 IMPROVE THE APPLICATION OF LAISSEZ-FAIRE LEADERSHIP STYLE IN SMALL AND MEDIUM SIZED ENTERPRISES AN EMPIRICAL STUDY IN VIETNAM NÂNG CAO HIỆU QUẢ ÁP DỤNG PHONG CÁCH LÃNH ĐẠO TỰ DO TRONG DOANH NGHIỆP NHỎ VÀ VỪA: NGHIÊN CỨU ĐIỂN HÌNH TẠI VIỆT NAM Le Tien Dat Thuongmai University tiendatle1509@gmail.com ABSTRACT As leadership styles are the choice of leaders for their behavior and models of managing business, leadership styles play a decisive role in operational patterns and business performance of enterprises. Among leadership styles, laissez-faire style is the style in which the leaders hardly use their power to impact on their subordinates but empower subordinates to make decisions. This style has numerous drawbacks such as the poor involvement of leaders in the company business, the uncontrolled employees and the untimely guidance from the leaders to subordinates. However, if this style is effectively used, the high-ranking leaders can devote themselves to strategic matters rather than get tied down by trivial daily activities of the business and the freedom as well as the activeness of subordinates are fully respected and exploited. Therefore, how to use laissez-faire leadership style to take advantage of its benefits and limit its drawbacks is the question. In this study, to investigate the perceptions of Vietnamese SME managers with regard to the application of laissez-faire leadership style, fifty- one participants coming from different business fields were individually interviewed. Based on such investigation, implications on the proper application of laissez-faire leadership style that fits the specific business environment, working conditions, development phrases of the company and the personalities of leaders and subordinates are then provided. Research outcomes are expected to be beneficial to SME managers, training and consulting institutions in assisting Vietnamese SME managers to improve leadership effectiveness and company performance. The study also makes contribution to the knowledge development related to leadership in SMEs in developing countries such as Vietnam. Key words: Leadership, leadership styles, laissez-faire style, Vietnamese SMEs. TÓM TẮT Được xem như là sự lựa chọn của các nhà quản trị cho các hành vi và mô tuýp quản lý, phong cách lãnh đạo đóng vai trò quyết định đến hiệu quả hoạt động của doanh nghiệp. Trong số các phong cách lãnh đạo, phong cách tự do được biết đến là phong cách mà các nhà lãnh đạo hầu như không sử dụng quyền lực của mình để tác động để tác động đến cấp dưới, mà trao quyền cho cấp dưới ngay cả trong việc ra quyết định. Phong cách lãnh đạo này được cho là chứa đựng nhiều hạn chế như thiếu sự tham gia trực tiếp của các nhà lãnh đạo vào các hoạt động kinh doanh, nhân viên thiếu sự kiểm soát và thiếu các hướng dẫn kịp thời từ cấp trên. Tuy nhiên, nếu phong cách này được sử dụng một cách hiệu quả thì các nhà quản lý cấp cao sẽ có thể giành nhiều tâm sức cho các hoạt động mang tính chiến lược thay vì bị rằng buộc bởi các công việc mang tính sự vụ, đồng thời, sự tự do và chủ động của cấp dưới cũng được phát huy triệt để. Do đó, làm sao để có thể phát huy các lợi ích và giảm thiểu các hạn chế khi áp dụng phong cách lãnh đạo tự do là một vấn đề đáng quan tâm. Trong nghiên cứu này, để tìm hiểu nhận thức của các nhà quản lý doanh nghiệp nhỏ và vừa liên quan tới việc sử dụng phong cách lãnh đạo tự do, 51 nhà quản lý hoạt động trong các lĩnh vực khác nhau đã đồng ý và tham gia các cuộc phỏng vấn cá nhân. Dựa trên các ý kiến này, những hàm ý liên quan tới việc sử dụng phong cách lãnh đạo, trong sự cân nhắc về môi trường kinh doanh, điều kiện làm việc, tính cách của nhà lãnh đạo và cấp dưới, đã được đề xuất. Kết quả nghiên cứu được mong đợi là hữu ích cho bản thân các nhà quản lý, cũng như các tổ chức đào tạo/tư vấn trong việc nâng cao hiệu quả lãnh đạo nói riêng, hiệu quả hoạt động doanh nghiệp nói chung. Nghiên cứu cũng được kỳ vọng đóng góp cho sự phát triển lý thuyết liên quan tới hoạt động lãnh đạo doanh nghiệp nhỏ và vừa trong các nước phát triển như Việt Nam. Từ khóa: Lãnh đạo, phong cách lãnh đạo, phong cách lãnh đạo tự do, doanh nghiệp nhỏ và vừa Việt Nam. 363
2. INTERNATIONAL CONFERENCE FOR YOUNG RESEARCHERS IN ECONOMICS & BUSINESS 2019 ICYREB 2019 1. Introduction Leadership styles have remarkable impacts on loyalty, trust and satisfaction of employees with enterprises and on the entire operational performance of enterprises as well. Selecting the appropriate leadership style may help the managers enhance their operation and management effectiveness. Particularly in SMEs, where the power gap between employers and employees is generally smaller, the involvement and commitment of employees to the company is normally higher, choosing the methods to encourage employees’ behaviors becomes more essential. In other words, each member in SMEs should have opportunities to show their capacity to push the development of the company, which also leads to their personal development. Thus, applying autocratic style, or democratic style, or laissez-faire style should be carefully considered. Due to the limited management skills and experiences, many Vietnamese SME managers face difficulties in managing human resources, particularly in making employees volunteer and excited to work. This paper investigates the perceptions of Vietnamese SME managers with regard to benefits and drawbacks of laissez-faire leadership style and then, provides suggestions to make the best use of this leadership style in Vietnamese SMEs. Previous studies mostly focus on the leadership style in big companies, and the research on the leadership styles in Vietnamese SMEs is lacked. Therefore, this paper is expected to fill the gap with regard to both theoretical and practical aspects. 2. Literature review 2.1. Leadership Styles and the Significance of Leadership Styles Generally, it can be seen that leadership is the capacities to impose influences on employees or organizations to urge them to take actions to meet the goals of the organizations. Leadership is to create motivations, instruct and encourage others so that they will be more eager to work to reach the set-forth targets. Leadership styles are the way a leader instructs his subordinates and encourages them to accomplish the goals that have been set before, a pattern of behavior that a leader chooses to impact on the behavior of employees (Mayowa, 2009). Leadership styles reflect personal features that stem from the characteristics of the leaders (DuBrin 2001). In his research, Dale Carnegie (2012), tried to evaluate the intellectual and emotional factors affecting the solidarity of employees in the working environment. The research indicated that the methods and behavior of high-ranking leaders are the core issue that needs caring about. Leadership styles may determine the competencies and qualifications of the recruited employees, resources and training programs, the communication with employees as well as the perks or working environment. In particular, Fang, Chang & Chen (2019) emphasizes the remarkable impacts of leadership styles on loyalty, trust and satisfaction of employees with enterprises and on the entire operational performance of enterprises as well. Leadership styles are considered to be related to the creativity at work in particular and work performance of each employee in general (Olawale, 2013). All things considered, it can be asserted that choosing an appropriate and effective leadership style is of great significance to the business performance of the enterprises. 2.2. Laissez-Faire Leadership Styles In the research of Kurt Lewin et al (1939) – a research considered as the pioneer study on leadership styles, based on the decision-making - he classified leadership styles into three main types, including autocratic style, democratic style and laissez-faire style. Accordingly, Laissez-faire leadership style, also referred to as delegative leadership, is the style in which leaders hardly use their power to impact on their subordinates but empower subordinates to make decisions. They inform followers of the tasks, tell them how they expect the work to be, provide necessary information, tools and resources but little guidance, supervision or controls. Followers are given maximum freedom to make decisions on actions, to solve any problems that arise along the working process but leaders still take responsibility for the actions and outcomes. 364
3. INTERNATIONAL CONFERENCE FOR YOUNG RESEARCHERS IN ECONOMICS & BUSINESS 2019 ICYREB 2019 Laissez-faire leadership style has its own pros as follows: (1) High-ranking leaders can devote themselves to strategic matters rather than get tied down by trivial daily activities of the business; (2) Freedom and activeness of subordinates are fully respected and exploited, which may bring subordinates the feelings of being valued, so they become more attached to the company. This style especially works when subordinates are expertise and knowledgeable in their particular field; (3) Leaders can easily win the trusts and supports from their followers. Nevertheless, the cons of laissez-faire leadership style are: (1) Leaders may gradually become uninvolved in the company’s business, which may result in the lack of cohesiveness at work; more seriously, their power may be overridden by ambitious subordinates and therefore cannot show their leadership roles; (2) Leaders cannot effectively control their followers and may become dependent on followers; gradually laissez-faire leaders may get passive and tend to avoid true leadership; (3) Without tight supervision and timely interference, the goals of the company may get off tracks, especially when followers are not fully aware of their roles in the team or do not receive timely guidance from their leaders. 3. Research methodology 3.1. Research Objective This study aims to examine the application of laissez-faire leadership style in Vietnamese SMEs to provide appropriate solutions for managers in adjusting their behaviors. In particular, this research sought to investigate the perceptions of Vietnamese SMEs with regard to benefits and drawbacks when applying this leadership style. Based on the literature on leadership styles and laissez-faire style as well as the opinions of participants, implications on the suitable use of laissez-faire leadership style are then offered. Research outputs are expected to be useful for SMEs and training institutions to help SME managers to adjust behavior to take advantage of laissez-faire style as well as to limit its drawbacks. The following main research question has been investigated and guides this study: What are the perceptions of Vietnamese SME managers with regard to the application of the laissez-faire leadership style in Vietnamese SMEs? 3.2. Data Collection In general, the qualitative interview technique is used in the studies where the perceptions of participants are investigated (Saunders, Lewis and Thornhill, 2012). In this study, using semi-structured interviews helps the researcher to better understand the benefits, drawbacks and application of the laissez- faire leadership style perceived by Vietnamese SMEs. By acquiring the answers, comments, explanation and experience from SME managers, the researcher has opportunities to develop qualitative data in both breadth and depth (Bryman & Bell 2011; Saunders, Lewis and Thornhill 2009). Participants join this research are SME managers coming from different business fields such as nutritional food, estate business, construction consultants, vocational education. 40 male managers (78.43%) and 11 female managers (18.5%) were individually interviewed. Interviews lasted for more or less 50 minutes and were recorded by electronic recorders. Most of these interviews were conducted at the offices of SME managers to create convenience for participants. The interview protocol developed from literatures was used to seek the opinions of different participants on common issues related to laissez-faire leadership style. 3.3. Data Analysis To analyze the qualitative data in this study, the step-by-step procedure suggested by Creswell (2014) was used to systemize the data analysis process. Accordingly, researchers are asked to organize the data, conduct a preliminary read-through of the database, code and organize themes, and organize the data in a format for interpretation. 365
4. INTERNATIONAL CONFERENCE FOR YOUNG RESEARCHERS IN ECONOMICS & BUSINESS 2019 ICYREB 2019 In the process of data analysis, the qualitative QSR support software Nvivo was used. The main themes and sub-themes are used as the “code” of Nvivo. The research results are presented in a descriptive manner, based on the main topics, sub-topics, examples, multi-dimensional views from the interviewees. Descriptive topics are mainly based on the content analyzed from the interviews. In addition, examples and comments by members are also cited directly to help the readers get the "feel" contained in the responses as well as the "lively" in actual business situations, adding to the persuasiveness of qualitative research. 4. Evidence 4.1. Benefits of Applying Laissez-Faire Leadership Style perceived by Vietnamese SME Managers * Reduce pressure on the leader and leader can focus on strategic issues In the opinions of Vietnamese SME leaders, one of the advantages of laissez-faire leadership style is that it reduces the workload for the leader. Accordingly, the leader with laissez-faire leadership style may assign work and let staff actively complete the work. The leader therefore has time to find new directions, make strategic planning for the organization. A leader shared: "I do not have to work with all employees, just with managers such as heads of departments”. Therefore, this leadership style is considered very flexible; the leader may focus on developing conceptual skills for important issues of the company. * Promote talents of subordinates and provide opportunities for subordinates to participate in the decision-making process - Improve the capacity and motivations of employees Smart use of the laissez leadership style is considered as a method to improve the capacity and motivations of employees. The leader with this leadership style often gives the right to make decisions and assigns the specific work to employees. Employees of these leaders often have the freedom to choose the way they work and how to accomplish their goals, "to do whatever they believe that it is right" or "overly creative”. As a result, they “feel respected, listened, feel themselves as important people, and thus they will work harder", "they are more confident and striving for the company". Laissez-faire leadership style also creates opportunities for employees to maximize their activeness. Employees actively provide ideas to solve arising problems. Moreover, this leadership style may promote the roles of team-work when teams are assigned tasks and delegated initiatives to control the team performance. "And the group must try all their best to satisfy the trusts that the leader places on them”. - Create an open working environment Laissez-faire leadership style is also believed to create an open working environment in the group, as well as in the organization. “In the organization where this leadership style is applied, each member tends to be the owner of the organizations who can actively find solutions to the problems of the company". - Train capable executives And when "each member has the opportunity to be at the center of the company, has opportunities to provide ideas to solve the core problems posed in reality", the staff themselves have opportunities to be trained to become managers in the future. Table 1: Advantages of Laissez-Faire Leadership Style (Perceived by Vietnamese SME Managers) * Reduce pressure on the leader and leader can focus on strategic issues * Promote talents of subordinates and provide opportunities for subordinates to participate in the decision-making process 366
5. INTERNATIONAL CONFERENCE FOR YOUNG RESEARCHERS IN ECONOMICS & BUSINESS 2019 ICYREB 2019 - Improve the capacity and motivations of employees - Create an open working environment - Train capable executives 4.2. Drawbacks of Applying Laissez-Faire Leadership Style perceived by Vietnamese SME Managers * Cannot promote the roles of the leader - Reduce the power of the leader A major drawback of the laissez-faire leadership style, according to Vietnamese SME managers, is that this leadership style can reduce the power of the leader. In many cases, when the managers abuse this leadership style, they can trust and assign work, even assign the right to employees, but employees do not trust and respect the managers because all the activities are implemented by employees. The managers are responsible for leading activities but they hardly give their opinions and make decisions. And in some cases, "employees do not believe in the ability of the leader". And when leaders do not show their "prestige", they have difficulties in controlling subordinates. Even worse, the overuse of laissez-faire leadership style can "give employees the habit of acquiring power; the managers will be dependent on employees". - May cause depression for the leader As a consequence of the overuse of laissez-faire leadership style, "this style easily brings depression for leader, leading to arbitrary, neglectful attitudes in working. Employees are less afraid of the authority of the leader". * Difficult to control work Another major disadvantage of the laissez-faire leadership style is that the leader finds it difficult to control the timeline to complete the work as well as the quality of products. The leader assigns tasks and lets employees freely work with each other. As a result, he may become more distracted from work, unable to control subordinates and dependent on subordinates. Gradually, the roles of the leader decline and in many cases, the leader cannot "immediately correct the mistakes of employees, and slowly response to changes in the business environment". More seriously, when the leader leaves employees too much freedom to decide on their own tasks, it can lead to the situations where employees work without the management of the leader and consequently the leader loses his control. An undesirable consequence that some SME managers in this study have encountered is that employees "leave the company to set up their own business which may later on become the big competitors of the company”. * May miss the goals if staff are incompetent It can be said that laissez-faire leadership style is a style that is not easy to use, as many SME managers shared: "When the work is uncontrollable, the results will not be achieved and the leader will suffer from the negative consequences". Laissez-faire leadership style should be thoroughly promoted in the working environment where the awareness of most employees is at a certain level. Employees are required to have high self-esteem, solid professional knowledge, good responsibility for the results of the work they undertake. However, in Vietnam, the application of this style is relatively difficult, especially for SMEs, where almost all activities are related to low-tech and the qualifications of workers are relatively low. Moreover, the self- consciousness of workers in Vietnamese SMEs is not high enough, workers cannot control themselves as well as take responsibility for their work. If the leader cannot supervise the production process, the results will not be as the target. 367
6. INTERNATIONAL CONFERENCE FOR YOUNG RESEARCHERS IN ECONOMICS & BUSINESS 2019 ICYREB 2019 Table 2: Disadvantages of Laissez-Faire Leadership Style (Perceived by Vietnamese SME Managers) * Cannot promote the roles of leaders - Reduce the power of the leader - May create depression for managers * Difficult to control work * May miss the goals if staff are incompetent 5. Implications for appropriate application of laissez-faire leadership style 5.1. Specific Characteristics of Business Activities suited with Laissez-Faire Style - Apply to stable operation The development of companies may undergo the basic stages such as the initial stage of formation, the stage of stability and the stage of growth. The laissez-faire leadership is said to be effective when enterprises have entered a stable phase. When the enterprises have implemented a clear regulation and operation, individuals can work actively and have a high sense of responsibility, the laissez-faire leadership should be used. The leader can use laissez-faire leadership to create a comfortable working atmosphere and to connect employees together. - Apply to sectors which need high creativity and personality Laissez-faire leadership should also be used for enterprises operating in the areas that require high level of creativity from each employee. Some jobs need creativity, such as design or composition to promote the novelty and the beauty of products. Enterprises operating in highly fluctuating markets (exchange rates, interest rates, international commodity price indexes, securities, etc.) often apply the laissez-faire leadership so that functional departments can make timely decisions to keep up with market fluctuations. 5.2. Job Features suited with the Laissez-Faire Style - Apply when employee benefits are closely linked to responsibilities The laissez-faire style can also be used when the leader can closely associate the benefits with responsibilities of employees. At this point, the leader can assign part of the task or the entire task to a group of people in the company. - Apply for remote management The leader can also use the laissez-faire leadership when he wants to implement remote management. For example, just in case the leader is absent for a long time, employees will be allowed to handle the job. However, the leader is still able to keep track of the situation through the online reports. The important decision is made by the leader. The results are generally good and business is still running under control. When the leader cannot directly participate in the work as the team goes to the market to find customers, he may assign the head of team to control this work. - Apply to work which is hard to manage the whole processes The laissez-faire leadership should also be applied to jobs where the leader finds it difficult to manage the process, or when the leader chooses to assign the task. Then he just cares about the final result of the task and treats employees based on their results. 368
7. INTERNATIONAL CONFERENCE FOR YOUNG RESEARCHERS IN ECONOMICS & BUSINESS 2019 ICYREB 2019 - Apply when the leader can control the risks The leader can also use the laissez-faire leadership when he can control the risk. Even if the team faces any problem, the leader can deal with the problem in time. In other words, the leader needs to skillfully exploit the laissez-faire style, using it in a way that the leader can control the risks, after the strategic direction has been communicated to employees. It should be noted that the leader using the laissez-faire leadership needs to clarify the framework, limits, levels of empowerment for each level of employees and decision-making levels to ensure that the overall management is kept strictly under the target and direction. In particular, the leader must always ensure that the level of risks of empowerment is within control. The current trend encourages the use of laissez-faire leadership accompanied by the stricter establishment of the organization model, process, mechanism and market practices. As such, the leader can control the risks so that the ethical or operational risks of an individual or a functional department will not have negative impacts on the operations of the enterprises. In addition, the laissez-faire leadership is often associated with open design from the workspace to the environment and corporate culture (Google is a typical example of this style), creating continuous and smooth communication connection and information channels, so that all employees can maximize their creativity. 5.3. Specific Characteristics of the Leader suited with the Laissez-Faire Style - Apply to the leaders who are able to allocate and assign tasks effectively The laissez-faire leadership can be applied when the leader is able to allocate and assign work effectively. To do so, the leader will set priorities for the job and empower certain tasks. Employees are given the full trust and if they are able to handle the situation and determine what to do and how to do, the efficiency of the laissez-faire leadership will be very high. - Apply to the leaders who do not have experience or expertise knowledge The laissez-faire leadership can also be used in situations where the leader has employees with better expertise knowledge than himself. In this case, the leader cannot and should not cover everything but let every employee have full control of their work. In addition, this also allows the leader to improve his work performance. - Apply to the leaders who are the co-founders of the enterprise The laissez-faire leadership can also be applied to the co-founders of the enterprise. In many cases, with high capacity and responsibility, the co-founders of the enterprise can support the leader to manage certain areas of the business. 5.4. Specific Characteristics of the Employees suited with the Laissez-Faire Style - Apply to employees with high working capacity and good creativity The leaders may consider the use of the laissez-faire leadership when the capacity of their employees is high. When employees have good understanding and experience of the work, and can work independently, they can make their own decisions without consulting their leader. All the same, the laissez-faire leadership should also be used when the leader has gained full trusts from his employees. - Apply to stubborn employees The laissez-faire leadership can also be used for employees of strong personalities who want to be listened to and respected rather than simply follow the one-way order from the leader. However, in this case, the leader should only use the laissez-faire leadership when employees are good enough, that is, when they know what to do and how to do and they work for the benefits of the enterprises. 369
8. INTERNATIONAL CONFERENCE FOR YOUNG RESEARCHERS IN ECONOMICS & BUSINESS 2019 ICYREB 2019 Table 3: Solutions related to the context of application of the laissez-faire leadership to the SMEs in Vietnam * Business activity - Stable phase - Sectors which require innovation and creativity * Job features - When benefits and responsibilities are closely linked - For remote management - Work which is hard to manage processes - When the leader can control the risks * Leader characteristics - New leaders - Leaders who can allocate and assign work effectively - Leaders who are the co-founders of the enterprise - Leaders who do not have experience and expertise knowledge * Employee qualities - Employees with high responsibility, concentration on work and want to be listened to - Employees with high working capacity and good creativity In addition to the above factors of business activities, job features, leader characteristics and employee quality, Vietnamese SME managers when applying laissez-faire leadership style should also consider some Vietnamese culture features which may affect to the management. For example, the workers in Vietnamese SMEs are not highly self-disciplined. When they have too much freedom, they may be lazy and lack motivation to gain better achievement. The lack of responsibilities in working may make Vietnamese employees in SMEs just do what they are asked by the leaders. At that time, “freedom may mean do nothing”. Also, a number of Vietnamese SME managers are not highly professional and capable enough to make the best use of laissez-faire leadership style. When the tasks are assigned too much to employees, SME managers may become lazy and rely on subordinates. Furthermore, the gap between employers and employees in Vietnamese SMEs are normally small, and thus, when the freedom is too much provided, the manager may lose their power to manage the business. Therefore, Vietnamese SME managers should also know how to balance among leadership styles. 6. Conclusions Selecting the suitable leadership style to adjust leadership behaviors is essential for leaders in enhancing management effectiveness. The paper has provided the discussion on the pros and cons of laissez-faire leadership style, based on the review of literatures related to leadership style and laissez-faire style. The recommendation for the appropriate use of this leadership style was then described. The paper is expected to make contribution to business performance of SMEs as well as to the theoretical development related to leadership in SMEs in developing countries. REFERENCE [1] Bryman, A & Bell, E 2011, Business Research Methods, 3rd edn., Oxford University Press, USA. [2] Creswell, JW 2014, Research Design: Qualitative, Quantitative and Mixed Method Approaches, 4th edn., SAGE Thousand Oaks Calif. 370
9. INTERNATIONAL CONFERENCE FOR YOUNG RESEARCHERS IN ECONOMICS & BUSINESS 2019 ICYREB 2019 [3] DuBrin, AJ 2001, Leadership: Research findings, practice, skills ,, Boston, MA, Houghton Mifflin. [4] Fang, C-H, Chang, S-T & Chen, G-L 2009, Applying Structural Equation Model to Study of the Relationship Model among leadership style, satisfaction, Organization commitment and Performance in hospital industry, IEEE, [5] Lewin, K, Lippitt, R & White, RK 1939, 'Patterns of Aggressive Behavior in Experimentally Created “Social Climates”', The Journal of Social Psychology, vol. 10, no. 2, pp. 269-299. [6] Olawale, T 2013, Leadership Style: Impact on employee, thesis, Lahti University of Applied Sciences. [7] Saunders, M, Lewis, P and Thornhill, A. 2012, Reseach Methods for Business Students, 5th edn., Pearson Education Limited, UK. 371