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Introduction The benefits of the utilization of the construction contracts include, the requirements of the agreement while performing home building, the contract paper preserves the rights of the contractor or builders, superintendent, principles and the other involved parties. In accordance with the Crown Build project case study, the building construction is located in the NSW area and it is going to be a four storey building with the fixed amount of AUD28 million and within a fixed timeline as mentioned in the contractual document of this building project and the contract has been signed under AS4000-1997 regulation. But in the middle of the project development, it has been detected that the beam size is incorrect and the contractor has provided notice to the principal and superintendent of the project. The superintendent has corrected the drawing with correct beam size and instructed to eradicate the implemented wrong beams. Now gradually the quantity of the handrails has increased with labour const and delivery delay. Now, the contractor can apply for different progress claims under different clauses. Task 1 The Australian building industry mainly follows the laws and regulations of ABIC or Australian Building Industry contracts, HIA or housing Industry of Australia and the government contracts. Each of the construction projects in Australia follows jurisdictions of Building and Construction Industry Security of Payment Act 1999 (NSW), Home Building Act 1989 that mainly focuses on the building activities of the NSW Area. For the residential building construction in the NSW area under Schedule 1 of Home Building ACT 1989 refers that the roof plumbing and Specialist work will be done in relation with dwelling. Governing law Clauses refers to the transactions between the parties that are mainly operated in the territories and the states and the parties generally maintain and follow the legislation attributes of Competition and Consumer Act 2010 (Cth) and the payment security legislation (Wang and Burdon, 2021). According to the considered mandatory of the general guidelines of the construction projects, the scope, timeline and the allocation of roles and responsibilities will be mentioned (Appendix 3) The payment schedule along with the provisional sum and the contract sum will be written and also the dispute resolution, relief damage, limitation clauses and available reliefs are also mentioned in the construction contracts. The general principles of the construction contracts uses different objectives such as the type of work
4 (commercial, design, residential), size and value of the contract, legislative requirements for state and the mention of the parties who are administering the contract paper such as architect, contractor, superintendent and the principles. In accordance with the Australian Standards (AS) there are different general conditions that are prepared by Standards Australian Committee. The general principles of construction contract laws are described here-AS 4000-1997: This contract is signed for the construction delivery purpose and is known as “general conditions of a contract”. AS 4901-1998: it is mainly as a sub-contract and it is used with the AS4000 principles. AS 4902-2000: this is mainly built for the construction delivery and design purpose and it is a variant of AS4000. AS4905-2002 is signed for the minor contract conditions and it is administered by the Superintendent. Thus, it is clear that the selection of the contract depends on the different circumstances but there is some general reflection- The amendments or the body of the contract, instruments of the contract or agreement that are written formally, and the annexure parts. Some basic features of AS4000 are- the contractor of a construction project is required to m\execute the completion of the construction project within a fixed timeline and at a lump sum price. It is important to sign the agreement with the clearly mentioned date of completion of the construction contracts, if the extension of time is required, and the contractor will have to provide a ‘qualifying cause of delay’ (Swift, 2019). The case study deals with the construction project of Crown build that is facing structural difficulties due to the proposed wrong beam size and this dispute can be resolved by the AS4000-1997 contractual agreement with the proper utilization of the clauses. The advantages of using the standards forms of the Australian contracts are- it can reduce the total cost, the scope of negotiation can be avoided with the signing of document and thus influences the speediness of the process, However, in the agreement, the rights of the both of the parties, the proper mentioning of the conditions of the contract, expected date of project completion, the date of work commencement and the other terms and conditions related to the construction project are clearly mentioned in the construction contracts. The benefits of the utilization of the construction contracts include, the requirements of the agreement while performing home building, the contract paper preserves the rights of the contractor or builders, superintendent, principles and the other involved parties. The construction contracts help to lay out the planning and conditions of the owner very clearly. It also ensures that the owner of the building and the contractor are performing together in order to achieve a
5 common target, The clear guidelines of the contracts helps to perform a better construction performance and the associate legislations add value to the protection of the builders and traders (Jones, 2021). In addition to that the changes can be possible if there is any evidential defect or damage or complaint occurs during the process.
Task 2 According to the case study of the Crown Build, the construction of the four storey building under Crown Build developer is facing structural deficiencies as the superintendent of the project has proposed wrong size of beams in the design paper. This issue has been resolved as the contractor has informed the superintendent and the superintendent has issued a new design with the correct size of the beams. Moreover, the superintendent has informed us to remove the used beams and replace them with the correct beams (Appendix 2). Now this situation has increased the amount of the stair handrails and thus it is enhancing the cost and the time period. In this case, the contractor will apply for the provision of the compensation rate from the superintendent as the dispute occurs due to the provision of incorrect information by the Superintendent. This is a communication problem in the construction management project. The construction project of the Crown Build has been made according to the law of AS 4000- 1997 thus it includes a fixed timeframe and fixed allocated cost. For the Crown Build project the time frame is 24 months and the allocated cost is AUD 28 million. But as the changes have been done in the building design along with the beam sizes, there is a qualifying cause of extension of the time period. Thus the contractor can apply for the delay delivery of the project and delay cost under the AS4000-1997 legislations (EL GEZERY, 2018). The contractor can apply for the EOT or the delay cost under AS4000 policy as the issue has been caused by the omission of the Superintendent. In this regard, the qualifying cause of delay compensable cause, 8.1 can be claimed for achieving the incurred cost due to the quantity enhancement of the stair handrails, labour cost and beam removal cost. Under clause number 25.3, the delay cost of the construction of Crown Build project involves the labour cost. In addition to that the clause number 11.2 is also applicable in this regard as the changes have been made and thus the costing structure is changing. The constructor can use the clause in order to include the additional expenses with the lump sum cost of the project. EOT can be applied in this case as there is a qualifying cause of delay as the mistake
6 has been done by the superintendent and the contractor can apply for achieving a relief. It cannot be ignored that the principal of the project has also omitted the mistake made by the superintendent in the beam size (Rıgga, 2019). In accordance with 34.2 clause number, the contractor of Crown build has already sent a notice to the superintendent and the principal to apply for EOT. This EOC will be received within 28 days after the claim has been done and the delay cost has a qualifying cause of delay under clause number Qualifying cause of delay, CC, 8.1. Task 3 According to the policies of AS4000, the contractor of Crown Build can claim for the expansion of the time frame in order to carry out WUC and the contractor needs to prepare a qualifying cause of delay statement with evidential attributes. There are fundamentally two types of qualifying cause of delay- i) it is applicable when any omission or mistake is made by the superintendent of a building construction project and ii) it is applicable when the mistake or default is made by the contractor of a building construction project or due to industrial and weather conditions (Van Der Westhuizen and Evans, 2019). In the case of the Crown Build project, the mistake has been performed by the superintendent of the building construction as in the initial design the superintendent has proposed an incorrect beam size which is shorter than the required beams. The Item number 23 can identify another factor about the qualifying cause of delay as it measures if the EOT is not grantable in this situation. After that the extension delay will be transformed into the calendar and the business days. Under clause number 34.2, the contractor will be liable to submit the delay notice and in this case the contractor of Crown Build has to submit proper documentation with the evidence of the beam fault to the superintendent of the building project and the principal (RUGINĂ, 2021). This documentation will include the cause of delay and the estimated delivery date of the project. In this regard it can be considered that claiming of EOC notice and delay notice are different notices issued by the contractor. The provision of EOC notice comes under clause number 34.2 and the delay notice provision comes under clause number 34.3. In accordance with the regulation of clause number 34.3, the contractor of Crown Build has to provide evidence regarding the fault in the beam size, responsible person and the extended timeline in the notice of the EOT. The process of claiming for EOT under AS4000 includes the submission and accessing of notice of delay with the evidences for ‘qualifying cause of delay’ under the clause number
7 34.2, provision of delay notice, EOT claiming notice under the clause number 34.3, delay damage claim as stated in the clause number 34.9 and 41.1 and the final assessment under the clause number 34.4 (Appendix 1). The dispute in the construction building project will come under 42.1 and the progress claim will be done as an activity of the payment security policy according to clause number 37.1 (Montalbán-Domingo et al. 2019). However, demonstration of the delay will be properly reported in the EOC notice. In accordance with the policies, the superintendent of the Crown Build project has taken mitigation steps in order to resolve the issue of the incorrect beam size. For taking effective steps, the superintendent has designed a new building drawing with correct beam size and instructed to remove the wrong beams that are already implemented in the building. However, clause number 34.9 is identifying the compensable cause under AS4000-1997. Due to the omission and the defaulted act of the superintendent, the clause number 1.1 stated that it is a subject of compensable cause. The item number 26 (Annexure Part A) can detect the other qualifying causes of damage delay and it also can be ‘Nil’ but the ‘Nil ‘refers that there is no additional cost found in the case. The quantum inclusion and the basics of claim need to be considered while preparing the notice for the damage delay claims. The contractor has to submit and keep updating the prepared claim as evidencing aspects for the delay. The clause number 34.4 includes both the non-qualifying and qualifying delay causes in the cases of the overlapped situation. In this case, it can be considered the prevention steps will be evaluated by the contractor to measure if the objectives are affecting his attributes or not. Moreover, according to clause number 42.1, the contractor can also provide a dispute notice if he found any disagreement with the proposal of the superintendent’s instruction (Adzoyi and Nani, 2021). The contractor can also involve incurred cost that has been increased due to the replacement of the shorter size beams, labour cost and the increased quantity of the handrails. These inclusions of the cost will be done under clause number 36.2. Task 4 There are fundamentally two reasons for claiming cost. Firstly, the incorrect beam size has extended the delivery date of the building construction and on the other hand the labour cost associated with the extension of the project and the removal and implementation of the newly proposed correct beams. These types of costs are regarded as the “global cost claim”. In this
8 regard the superintendent will be considered as a liable person to provide the compensation cost to the constructor or the builder. The clause number 36.2 indicates that the incurred cost structure can be claimed by Crown Build as the variation has occurred in the contractual cost structure. The cost claim will be made as the superintendent has made a mistake in the building drawing with incorrect beam size. In order to respond to the cost variation, the contractor will provide the incurred cost quotation and this quotation needs to be verified and sanctified by the superintendent as a sign of approval. This cost structure will include the additional cost of the raw materials, labour cost and the extension period cost. It will be called ‘cost plus agreement’. In accordance with the policies, the superintendent of the Crown Build project has taken mitigation steps in order to resolve the issue of the incorrect beam size. For taking effective steps, the superintendent has designed a new building drawing with correct beam size and instructed to remove the wrong beams that are already implemented in the building. However, clause number 34.9 is identifying the compensable cause under AS4000-1997 (Klee, 2018). Due to the omission and the defaulted act of thesuperintendent, the clause number 1.1 stated that it is a subject of compensable cause. According to clause 26, the expense claim will involve the additional cost with the lump sum cost in the contract. In addition to that the clause number 25.6 will be applicable as it indicates the delay labour cost that is a delay damage expense. The clause number 11.2 needs to be applied as there is a verified costing structure in the construction of the Crown build project. The clause number 26 will also include the additional costs with the main costing structure. Now the additional cost includes the labour cost, implemented beam removal cost, extension cost and the quantity increment cost of the handrails (Hastie, Sutrisna and Egbu, 2017). The value of the raw materials will be added in the additional cost structure according to the law of AS4000. Conclusion As the Crown Build project has been signed under the law AS 4000-1997, the financial and delay dispute will come under different clauses. The provision of EOC notice comes under clause number 34.2 and the delay notice provision comes under clause number 34.3. In addition to that the clause number 25.6 will be applicable as it indicates the delay labour cost that is a delay damage expense. Under clause number 25.3, the delay cost of the construction of Crown Build project involves the labour cost. In addition to that the clause number 11.2 is also applicable in this regard as the changes have been made in the cost structure.
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Issues in Global Business and Strategic Concepts Case Study Analysis of Hewlett-Packard (HP)
Executive Summary
In the contemporary business environment no organization is left untouched by the impact of globalization. Globalization is both a blessing and curse for organizations. It is mainly because with globalization companies are offered a number of scopes to expand and gain long term sustainability. But at the same time it raises a number of global issues that act as hindrance and thus adoption of successful strategies to overcome the same are highly critical. In this paper the case of Hewlett-Packard (referred to as HP from now on in this paper) is discussed in details with regards to global issues faced by the company, solutions crafted by them to overcome such issues, evaluation of solutions and finally proposing suggestions based on analysis. Based on analysis it was discovered that the major issues confronted by HP are four-fold. They are namely, ineffective strategic expansion through inorganic measures, cultural diversities, inabilities to cope up with changing nature of global business and lack of innovation and entrepreneurship skills. In order to combat these issues, HP has resorted to a number of strategies. Some of these strategies were successful like management of cultural diversities whereas others failed to achieve desired objectives. Upon in-depth analysis it was also revealed that mostly it is internal inabilities of HP that prohibits the company from overcoming global issues. The study finally proposes that HP needs to pursue turnaround strategy along with adoption of practices like lean management, transparent communication systems, whistle blowing and investments in research and development to support innovation for sustaineddevelopment in long run.
Introduction Hewlett-Packard, one of the prominent global IT giant has its roots in a rented car garage in Palo Alto by two Stanford classmates, Bill Hewlett and Dave Packard. Initially, with the impending resources constraints, the firm instigated with audio oscillators required in sound engineering but gradually over the years, through innovation and leadership, it developed a product portfolio encompassing hardware, software and allied services to an expansive clientele of both large and small and medium sized enterprises from public and private sectors across the globe (HP 2015) . From its inception in 1939, the company has evolved across seven business vertices: “Personal Systems, Printing, Enterprise Group, Enterprise Services, Software, HP Financial Services and Corporate Investments” and ranks 35 th in the latest list of most valuable brands of the world by the Forbes Magazine (Forbes 2015) . The firm is currently being spearheaded by Ms. Margaret Whitman as the CEO (Forbes 2015) . However, HP has its share of hardships and challenges as well especially emerging from the globalized economic business landscape where markets are approaching saturation, competition is getting intensified and technology is evolving at a rapid pace. Innovation is regarded as the sole saviour (Gault 2010; Atkinson & Ezell 2012) . This report presents that key strategic issues confronted by the IT titan and how the firm has succumbed to its wrong decisions and dubious strategic moves. The report explores each of the issue in-depth while critically analysing the firm’s subsequent strategies based on a thorough secondary investigation based on management theories and business information.
Background to Case Study
5 | Page As per the reports of Gartner (2015) , HP was the global number one firm in personal computer manufacturing from 2007 to the second quarter of 2013. It was then, Lenovo surpassed it. This is just the tip of the ice berg. The problems at HP are much graver. Strategic management has emerged as one of the most critical functions of contemporary organisations. Top level managers make strategies to tackle issues and complexities imposed by the excessively dynamic and complex businesses environment (SRINIVASAN 2014; Hitt et al. 2012; Orcullo 2008) . The decisions firms make for business have repercussions for years (Hitt et al. 2012) . HP is no exception to this. Firstly, it acquired Compaq Computer in 2001 in anticipation of leveraging the PC market globally and outshining the Asian counterparts. Strangely, the decision makers ignored the by now matured PC market and absence of internal innovation system at Compaq. Further, in 2010, HP again acquired financial crisis stricken Palm as a gateway to the emergent mobile devices market. This served no purpose as HP was a follower of Apple and Palm brought its own plethora of issues. Similar blunder was acquisition of software company Autonomy. HP wanted to ride on external sources of innovation and ignored the importance of internal innovation practices (Mourdoukoutas 2011) . Other strategic issues were that CEOs were getting changed quite often (four CEOs in seven years); HP’s tablet PC was a total flop and uncertainty about the key business segment: personal computers. There was a lot of internal unrest, feuds and scams etc. that made HP miss out on business opportunities. This led to the trajectory of declining revenues and bereaved market share (Bandler 2012) . These issues clubbed with extravagant acquisitions led to a massive downsizing initiative. This was also attributed to unnecessary focus on cost-cutting rather than innovation (Kalb 2012) . The case report explores these issues in light of the strategic management literature to bring out the impact of the strategic decisions that led to the misery of this renownedIT firm and also
6 | Page focusing on remedial measures through which HP can regain its glory through innovation for which it is was always known.
Methodology of Analysis The case is analysed on the basis of the data and information acquired from the secondary sources like published journal, article, books, literature review, articles published in magazines and newspapers. Only popular and authentic sources of information have been referred and duly acknowledged in the paper. Blogs and unworthy websites, books, journals have been ignored. Facts and figures are reported only based on company’s website, newspapers, business consultancies and government’s official websites. The analysis of the issues have been done through the case study mechanism where each issue is explained, linked with relevant theories and literature and then a solution is proposed based on the inferences.
Issues and Problems Out of a number of issues faced by organizations like HP while undertaking business in a global platform some of the most critical ones are identified and discussed in this section. These issues primarily relate to four major areas strategic expansion through acquisition, cultural diversities, changing nature of global business management and innovation and entrepreneurship.
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Global Issues Affecting HP
Management of Cultural Diversity in Workforce
Frequently Changing CEO’s and Focus on Cost reduction against Innovation
Mass- Customization due to dynamic customer tastes and preferences
Ineffective Strategic Alliances and Acquisitions
Figure 1 Global Issues Affecting HP Source: Author
Strategic expansions are a road to market development and product development which helps companies to diversify their risks by thus gain long term sustainability. HP too in lieu of diversifications and expansions underwent a number of strategic alliances. But these alliances and acquisitions in many circumstances left the company in utter dismay (Bandler & Burke 2012) . A number of acquisitions by HP namely of companies like Autonomy, EDS, Palm, and Compaq resulted in huge losses for the company within a short span of time. The consequences were downfall of company’s market value. Though HP paid out 25 billion USD for acquiring Compaq but had to write it off in only 1.2 billion USD (Nuttall 2012) . Similarly, in 2012, in spite of the fact that HP paid 14 billion USD for acquiring EDS in 2008 but it was written off for only 8 billion USD (Nuttall 2012) . These two instances depict inability of HP to take right decisions to support strategic expansions through strategic alliances.
The second issue that was faced by HP in global arena was managing with dynamic consumer tastes and preferences. For companies in order to excel in global markets standardization is generally considered to be a preferable option (Powers & Loyka 2007) . But as HP planned to cater international markets, it was challenged with the problem of customized consumer requirements. The consumers not only sought for quality products but they also wanted tailor- made products that too with faster deliveries (Feitzinger & Lee, 1997 ; Huang et al, 2015) . Tailoring of products for consumers which are spread across the world at cost effective prices was highly challenging for HP. These changing customer requirements affected all business lines of HP ranging from computers to printers to medical related products. Thirdly, while operating successfully in international markets, HP has been also exposed to issues related to cultural diversities and business ethics. During its initial period, HP was facing problems related to understanding and managing diversities among employees culture that was prevalent within the company. It was mainly because people from differing cultures, origin and expertise from across the world were working for HP (Kamal & Ferdousi 2009) . Presently the organization employs more than 3 lakh people across the world and thus management of diversity is highly critical.
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Figure 2 Number of employees in HP between year 2001 to 2014
Source: (Statista 2015)
Another major issue faced by HP is related to entrepreneurship and innovation. Being in an industry that is exposed to dynamic business environment and is completely driven by technology, innovation is the key to its success (Brem & Voigt 2009) . But in many instances, it has been observed that the policies of HP were more driven by cost minimization rather than focusing on innovation (Kalb 2012) . As a result of which HP’s investment in research and development was reduced to a large extent. The major reasons put forward for the same was enhancement of organizational efficiency through massive cost reductions. Even Chief Executive Officers (CEOs) in HP have been changed very frequently which has affected its operations in global markets to a greater degree (Thibodeau 2012) . It is due to this a number of investors have switched over dumping HP’s share resulting a loss of approximately 60 billion USD in two years between 2010 to 2012 (Hartung 2012) .
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Solution To recover from problems identified above that have affected HP vehemently since a long time, the company has undertaken a number of steps to overcome the same. It is due to these measures that HP has been yet able to manage its position within top 10 among Fortune 500 companies (Bandler & Burke 2012) . For overcoming issues related to mass-customization through minimized costs, HP set up manufacturing and designing units in economies where cost of production is low primarily due to abundance availability of resources at lower costs (Porter 2008) . These countries were mainly those who belonged to Pacific Rim along with Indian subcontinent (Pearson Higher Education n.d.) . This helped the company to produce customized computers and servers at lower prices by capitalizing on costs related to human resources, taxes and impediment in shipping. Further such set ups helped HP to enhance efficiency in form of augmented production along with innovative designs, quality development and effective distribution mechanisms. Such activities helped HP in overcoming wastefulness that was acting as a hindrance in organization’s global operations ultimately resulting in enhancement of competitive edge (Porter 2008) . Management of diversity in HP has always been a major concern. With changing times and dynamics of diversities in workforce, HP has also been responsive towards them (refer annexure 1) and designed new strategies to cater diversities as depicted in figure below.
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Figure 3 HP Way of Diversity Management Source: (Kamal & Ferdousi 2009)
In order to support a strong work culture in HP that is free from all diversities related issues the company designed ‘open corporate policy’, ‘management by objectives’ and ‘management by walking around’ (Menke et al. 2006) . These policies were also adopted by the organization to support development of a culture that would in turn support innovation. Though HP has been suffering from a number of issues but under the leadership of its new CEO, Meg Whitman, the company has been able to stabilize its activities (Merchant 2012) . The company has enhanced efficiency and has been able to minimize costs also. Further under new leadership the organization has adopted ‘Turnaround’ strategy that will fetch HP with long term profitability and sustainability (Merchant 2012) . It is this innovation that motivated company to depart from its core business and venture into markets related to cloud, solutions and software were expected to fetch the company with higher profitability through increased margins (Dediu 2013) . Innovation has always been the driving factor for HP which is the reason behind emergence of Silicon Valley but then the same needs to be revived. Thus under the new strategic
12 | Page orientation, HP would focus on HP Multi Jet Fusion Technology and Sprout that will aid the company to rejuvenate its existence and thus gain long term sustainability (Moorhead 2014) . The benefits from these innovative technological solutions are yet to be realized (Moorhead 2014) . Irrespective of this fact, these innovative approaches are expected to revive HP’s declining position.
Evaluation The present position of HP can be evaluated using the (Boston Consulting Group) BCG Model. The model is a matrix of 2×2 which depicts the position of a firm / product / service in terms of market share and market growth as depicted in diagram below.
In current situation HP which is predominantly operating in markets of personal computers is considered to be a market experiencing lower growth. In order to compete in the same, HP resorts to lower profit margins for sustaining competitive pressures (Kalb 2012) . Based on such facts it can be stated that presently HP is operating in the Dog category. This indicates presence of very minimum scope for the company in future if continued to do business in the same
13 | Page segment. The company is having a tough time in surviving with such a product portfolio. Further when the main priority of HP should be adoption of retrenchment strategy, HP on the contrary has been resorting to growth and diversification strategies. It is evident from the number of strategic acquisition that has been executed by HP. Retrenchment strategies provides an organization with opportunities to condense organizational operations and thus concentrate on selected few that will support company with long run financial stability and sustainability (Schermerhorn 2010) . In addition to the above without innovative approaches, it is almost impossible for HP to revive its position in such industry. The organizational system of the company is very intricate making it difficult for CEOs to understand the same (Enderle 2011) . Before they are in a position to understand and act, a new CEO emerges which has adversely affected HP’s growth and culture. Thus the major issue that is affecting HP is lack of effective leadership. None of the entrepreneurs so far who have been leading the organization have been able to prove their entrepreneurial skills as classified by the entrepreneurship model depicted below.
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Table of Contents TASK 1 3 1.1 Explain the link between strategic management and leadership 3 1.2 Analyse the impact of management and leadership styles on strategic decisions 5 1.3 Evaluate how leadership styles can be adapted to different situations 6 TASK 2 7 2.1 Review the impact that selected theories of management and leadership have on organizational strategy 7 2.2 Create a leadership strategy that supports organizational direction 9 TASK 3 11 3.1 Use appropriate methods to review current leadership requirements 11 3.2 Plan for the development of future situations requiring leadership 13 TASK 4 15 4.1 Plan the development of leadership skills for a specific requirement 15 4.2 Report on the usefulness of methods used to plan the development of leadership skills 17
TASK 1
1.1 Explain the link between strategic management and leadership Strategic management is defined as decisions taken by the managers in framing strategies in a way so as to augment organization’s performance and achieve competitive advantage (Thompson & Martin 2010) . Strategic leadership is referred as potentiality of a manager to utilize strategies and attain mission and vision of an organization as well as to guide and motivate other members of the organization to achieve organization’s objectives (Hill & Jones 2012) . Both leaders and managers act in the organization to achieve the common goal of the organization. Where managers are concerned about shaping strategic ideas and plans to achieve organizational goals leaders are concerned about undertaking strategic actions to attain the goal. The linkage between strategic management and leadership can be well described using the Drotter pipeline model which identifies six key passages through which a leader grows and is also helpful for the management to develop leaders in the organization (Charan et al. 2010) .
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Figure 1 Leadership Pipeline model Source: (Charan et al. 2010) .
As per the pipeline model in case of first passage that is transition of a leader from managing self to managing others, organization need to ensure that the leader understands what is the organization’s expectations. At this passage a leader need to develop effective communication skill, able to handle conflicts, delegate work properly and should seek 360 degree feedback for own improvement. In case of transition from managing others to managing managers, a leader should inhibit the role of a coach and mentor. Leader should be able to create a competent team and use organization resources effectively. In case of third passage from managing mangers to functional manager, a leader need to think and act strategically and should be aware of the recent trends. In the fourth transition from functional manger to business manager, a leader needs to have a shift in values and perceptions so as to handle the entire business functions. During the fifth passage, from business manager to group manager, a leader need to have the capability to
broader long term goals of an organization and undertake strategic decisions. In the sixth transition from group manager to enterprise manager that is the CEO need to be responsible for building leadership, implementing various decision making methods to cite a few (Charan et al. 2010) . Siemens needs to apply the Drotter pipeline model to overcome the leadership issues in the organization such as the case of bribery (News 2012) . Moreover, organization needs to improve the link between management and leader since employees are reluctant to report to the management in case of any operational issues (The Economists, 2014) .
1.2 Analyse the impact of management and leadership styles on strategic decisions Strategic decisions of an organization are influenced by a number of factors such as style and nature of organization’s leaders, organization’s life cycle stage to cite a few. Leadership style inhibited by mangers especially at the top level forms the most vital factor in shaping strategies for the organization. Developing a competitive and clear strategy is a challenging task and is dependent highly on skills and competencies of a leader. A leader needs to have a style exhibiting the ability of flexibility, bringing necessary changes in organizational culture, long term viewpoint and need to be proactive in anticipating the contingencies to cite a few (Anon 2008) . Management and leadership styles have a considerable impact on the strategic decisions of an organization which is evident from the various organizational issues encountered due to poor leadership style exhibited by Siemens ( Becker 2014) . The organization is believed to have poor communication system. Employees in the organization were unaware regarding the
management’s decision of undergoing for an organization’s restructure. Employees got information only through external parties such as reports from press or agencies, webcast to cite a few. Employees didn’t have any knowledge regarding their job securities as well. As per the recent information strategy of the organization employees were not considered to be a family as considered earlier and hence transparency in information was no more maintained by the management with its employees (Becker 2014) . This type of leadership behavior affected the organization’s business and reputation negatively. Some of the problems faced by Siemens includes losses in running solar power unit, interruption in high speed train deliveries resulting into a fine worth of nearly €116 million in the year 2013, inability to relate offshore wind farms with power grid resulting into a fine nearly to Euro 570 million in the year 2012 (Troianovski 2013) .
1.3 Evaluate how leadership styles can be adapted to different situations Leadership is concerned about the needs of the organization and employees working in the organization. All leadership styles cannot be adopted by a leader as per ones convenience or liking. A leader needs to act differently in varied situations and circumstances so as to solve complex problems at times. Leadership styles need to be tailored by the leaders of any organization as per the demand and necessities of a particular situation. It also includes recognizing what people in the organization demands and what are the challenges that an organization is currently facing (Murray 2010) . The senior management in the Siemens organization wanted to expand its business portfolio. The organization seeks to enter into the world of digitization and automation along with electrification so as to augment business profitability. The management aims at bringing a change in organizational culture for such expansion (The Economists, 2014) . In order to change
7 | Page organizational culture the leaders in Siemens need to adapt transformational leadership style. A transformational leader is characterized by the ability to persuade or inspire others. As expectation from the team member is high this type of leadership style will help Siemens to inspire its employees to participate in bringing about an organizational culture change required to meet business expectations. This will in turn improve the productivity level and engagement of its employees (Ricketts & Ricketts 2010) . Siemens need to improve its operational performance as failure in number of projects has affected the profitability of the organization considerably. Reasons of such failure being employees fright to report to the management at times when problems were encountered during project execution (The Economists, 2014) . Such situation demands the management to adopt a democratic and participative leadership style (Ricketts & Ricketts 2010) . As per this style that is transformational leadership, Siemens will be able to improve employee participation in successful completion of the project by giving them ownership and rewarding them for reporting in case of any project related issues.
TASK 2
2.1 Review the impact that selected theories of management and leadership have on organizational strategy Management and leadership are the two most powerful and dynamic tool commanding people and guiding the organization’s activities. There are many contemporary as well as sophisticated theories on management and leadership that had been proposed by theorists. Some of the theories are Transformational theory, Transactional theories, Behavioural theory, Functional theory,
8 | Page Great man theory, Situational theory, Trait theory to name a few (Chemers 2014 ; Gill 2006 ; Waite & Chiefs 2008) . The management and leadership theories that have been selected are transformational and transactional theories to review the impact of these theories on organization’s strategy. Transformational theories: Transformational theory was framed by Burns (1978) and later by Bass (1995, 1998) (Bass & Riggio 2006) . As per this theory a transformational leader has the capability and skill to persuade and motivate its team members for the successful accomplishment of organization’s objectives by aligning individual’s goals and values with the organization values and goals. Howell and Avolio (1993), affirmed that a transformational leader is characterized by five key traits which are inspiration, simulation, vision, team building and coaching (Bass & Riggio 2006) . There are four components of a transformational leader which are idealized influence, inspirational motivation, intellectual simulation and individual consideration. A transformational leader develops strong communication network in the organization by disseminating organization’s objectives and vision clearly to the organization’s members (Bass & Riggio 2006) . Impact on Organizational strategy: Since the organization, Siemens is targeting for a change in organizational culture so as to expand its business operations from electrification to digitization and automation it is essential to communicate to the employees the need and benefit of an organizational change and to persuade and motivate them for such change. Moreover, in Siemens interpersonal skills between management and employees is very poor due to huge communication gap. A transformational leader will be able to communicate properly the organization’s strategy and overcome resistant to culture change.
9 | Page Transactional theories: As per Burns (1978), a transactional leader is one who is task oriented and has the ability to guide its members in a specific direction so as to achieve organizational goals (Martin 2006) . A transactional leader is characterized by contingent reward and management by exception (Chemers 2014) . Followers need to follow the instructions and guidance of the transactional leader and the leader in turn rewards its followers. Apart from rewards a transactional leader adopts various other approaches in order to accomplish organization’s goals such as appealing to the group members, punishment, being aggressive to cite a few. However, involvement of transactional leaders as far as group activity is concerned is less and intervenes when the group displays underperformance (Martin 2006) . Impact on Organizational strategy:Siemens have been facing various operational issues such as project failures, late deliveries to cite a few. The company’s ethical dimension was at stake due to bribery issues. One of the major concerns of Siemens is employees’ unenthusiastic attitude to report any problem with management which in turn is hampering its organizational performance. A transactional leader will be able to motivate employees through reward and proper guidance to improve performance and execute work properly.
2.2 Create a leadership strategy that supports organizational direction Leaders at any level in the organization require having expertise and skills in certain areas. Some of these areas are knowledge and competencies in technological area, good communication and interpersonal skills, competent conceptual proficiency so as to frame strategic decisions and solve complex issues (Leatherman & Leatherman 2008) . Siemens in order to bring a change in its organizational culture and improve business productivity needs to frame a leadership strategy which will support its organizational direction and strategy. Some of the proposed strategies are:
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Self leadership: As per self leadership strategy a leader before leading other members in the organization need to be self influenced, self regulated and self committed. A leader needs to undergo self assessment so as to explore and identify that it possesses requisite skills, knowledge, qualities and nature of being an effective leader. It will help a leader to realize its capabilities to achieve organization’s success through the application of its skills and talents. Leaders at the Siemens organization need to align their vision with that of the organizational vision. A leader needs to be clear about organizational objectives, values and mission so that they can communicate the same clearly to other members of the organization and motivate them to attain the same (Neck 2006) . Team Building: Leaders at Siemens need to give priority in building an effective and productive team. People in an organization are from different ethnic and cultural backgrounds. Employees differ in terms of technical knowledge, skills, competencies, specializations as well. It is imperative for leaders to consider all these factors while building a team so as to maintain team cohesiveness and set team culture and values in alignment with the organizational culture and values (Malone 2009) . Clarity in role of every team members need to be maintained to avoid role conflict. Leaders also require taking the responsibility of assessing team performance and undertake team development process on continuous basis through effective training and development. This will help in improving productivity of team members and hence overall organizational performance will also improve (Malone 2009) . Mentoring: Mentoring refers to advising, motivating and inspiring to cite a few for uplifting employee’s behaviour. The main objective of a mentor is to help its mentee grow and develop in the organization (Rothwell & Chee 2013) . As per this strategy a leader in organization needs to play the role of a mentor that is advice and guides its employees so as to enhance employee’s
11 | Page motivation level. Siemens needs to adopt a mentoring approach to improve the productivity capacity and potentiality of its employees. This will also help the organization in building a learning organization as well. Through mentoring employees will be able to share the experience of leaders and gain knowledge through it which in turn will contribute to the overall success of the organization. Through this strategy Siemens will be in a position to develop an organizational culture which will exhibit high job satisfaction, less employee turnover and high level of employee development (Aubrey 2011) .
TASK 3
3.1 Use appropriate methods to review current leadership requirements For an organization it is inevitable to have competent and skilled leaders which will not only be a support to the employees but also aid in achievement of organizational objectives too. Leaders to a large extent are responsible for organizational success mainly becausetheir traits. Siemens presently is experiencing major restructuring which requires effective leadership skills. A complete overhaul of existing strategic approach is proposed in Siemens as it to a large extent suffers from issues related to bribery, inappropriate and inefficient communications, non- transparency in information sharing, instant decision making, late deliveries of contracts, casting off plans, declining profitability, negative impact on organizational image (Dietz & Gillespie 2012 ; The Economist 2013) . Along with this, existing organizational structure of Siemens designed by Peter Löscher with four major departments namely, energy, industry, health care infrastructure-and-cities was unable to support organizational operations and vision and thus resulted in internal operational inefficiencies (The Economist 2013) .
In order to review the leadership requirements of any organization for example Siemens in this case trait leadership theory is best applicable. It is mainly because this theory assists is indentifying varied traits required for an effective leader. Trait theory of leadership: The trait theory of leadership puts forward that definite set of characteristics establish the type of leadership that will be adopted by particular human being. These characteristics comprise of ability to take responsibilities, risks, authorities, approach and relationships with followers, capability of taking decisions, level of tolerance, level of self confidence, extent of social interactions, creative spirits are a few considered to be a few examples (Northouse 2012) . Along with a proficient leader should also posses skills related to efficient communication, management of time and stress, effective listening, planning, management of workforce, motivating workforce to name a few (Northouse 2012) . In order to review potential or current leadership requirements, the traits mainly required for leadership designation are identified (Mills et al. 2006) . Based on this list mapping between prospective leaders and leadership requirements is undertaken to determine the best suitable leader. With the help of trait leadership theory, an organization will not only be able to identify varied leadership traits required but also use them as benchmarks to critically scrutinize and assess leadership performance. Presently the culture of Siemens is infected with a number of issues mentioned above and thus change is highly essential. By adoption of this theory Siemens to a large extent will be in a position to identify the most appropriate leaders who will be successful in meeting the leadership requirements essential to bring about a change within the organization. Ultimately by identifying required leadership traits Siemens will be able to overcome organizational problems thereby smoothly undertaking overall restructuring and renovation of organizational set up. An effective
13 | Page leader with effective leadership qualities will be able to bring in innovative ideas for supporting organizational restructuring process and facilitate in bringing about a positive cultural change.
3.2 Plan for the development of future situations requiring leadership In order to efficiently execute their responsibilities and make appropriate decisions it is inevitable for leaders to be well informed along with being attentive peripheral activities within business environment (PriceWater House Coppers 2008) . Leaders also need to be conscious along with being responsive towards changes in technology, legal compliances and regulatory framework especially when operating on a global scale. Thus for leaders of Siemens need to consider not only the facets of business environment prevailing in Germany but also significantly consider the global ones also. For Siemens in order to grow economically in a sustained manner it is essential to foster leadership that will help the company is overcoming issues related to bribery, ineffective communication, and change resistance (Bradt 2013 ; Dietz & Gillespie 2012) . Along with these micro level issues, Siemens also need to overcome macro level issues related to declining organizational profitability and intensification of competition affecting Siemens’ basic existence (Bryant 2013) . The future goal of Siemens is specific which is defined in its statement of Vision2020 (Siemens 2014) . The statement outlines Siemens’s strong commitment towards gaining leadership by emerging as a sustainable company by consistently enhancing its performance and expanding business into company lucrative business ventures which will also trigger organizational growth (Siemens 2014) .Siemens’ dedication towards achievement of this vision is highly evident from the decisions taken by the organization. One such decision was changing its top management board along with shuffling of its teams responsible for corporate-oversight in the year 2013 (Boston 2013) . During these changes even the Chief Operating Officer (CEO) was also
14 | Page changed which was a shocking happening in Siemens (Bryant 2013) . Another massive jolt that was received by the people associated with Siemens was layoff of approximately 12000 employees under the organizational restructuring plan (Becker 2014) . This was mainly because these job cuts were not undertaken as a part of planned change. Further the employees were not very clearly communicated regarding the same which added to their utter dismay. In order to convert this ‘Vision 2020’ dream into reality having effective and efficient leadership for Siemens is the need of the hour. Highly result-oriented leaders with strong leadership are essential for different business functions of Siemens laid down under its matrix format ranging from manufacturing to finance, marketing to research and development and manpower management to administration (Trott 2008) . In order to aid in achievement of this vision of Siemens it is unavoidable for Siemens to have effective leaders. These leaders with their higher performance quotient will help in determining the course of action that needs to be pursued along with overcoming all the evils to which Siemens is presently subjected to. The future developments in Siemens are backed by principles of agility, leanness, flexibility and reliability (Bryant 2013) . Thus leadership requirement for Siemens needs to be developed accordingly. By appropriately planning for the future requirements, Siemens will be able to avoid situations that require sudden actions and thus proactively pursue control mechanisms through effective leadership.
TASK 4
4.1 Plan the development of leadership skills for a specific requirement
15 | Page Leadership plays a dominant role in crafting of organizational strategies that facilitates an organization is gaining competitive edge thus gaining long run sustainability and profitability. It is the leader which helps in shaping organizational vision along with varied strategic objectives that needs to be pursued for achievement of the same. Thus a leader lays the foundations for organizational culture and defines philosophy of an organization. In order to achieve theexpectedfuturistic situation, the leadership skills required in Siemens should be based upon the following parameters: Ethical Behavior to Restore Positive Image: The negative image due to rampant bribery practiced in Siemens is one of the most important challenges that present leaders needs to work upon (Dietz & Gillespie 2012) . Thus the focus would be on restoring positive image. In order to do so, the leaders need to preach and practice ethical behavior by defining values and developing standards for the same (Pelletier & Bligh 2008) . These values and standards will act as guidelines and thus inspire followers to fall in pursuit. Change Orientation: The present culture of Siemens which is 166-year old is highly resistant to change (Bradt 2013) . But in order to realize this vision developing a culture that is dynamic and not resistant to change is the only way out. Thus the leader should prepare its followers for tomorrow by motivating them to have a flexible approach towards change. Cultural change which with a more open attitude towards change is to be encouraged by the leader (Bradt 2013) . Effective Communications: Instances in Siemens highlight that presence of huge communication gaps within the system has not only plagued the organization but also resulted in occurrences of such massive problems. The leader thus should encourage two way communications along with promoting communication transparency. In order to do so, advanced
16 | Page technology should be adopted that would promote free flow of information across all functions and departments of Siemens thereby connecting global operations and employees working in different nations (Hernez-Broome & Hughes 2004) . In order to develop the above identified skills an integrated approach in which workshop learning and on-the-job learning will be developed (Nelson et al. 2011) . The plan would comprise of formal leadership development programs and action learning. Formal Leadership Development Programs: Siemens has been an acknowledged for its efforts undertaken to develop leaders from within the organization. The company has a personalized leadership development program that focuses on development of leadership by concentrating on 9 major perspectives namely, strategic-creativity, management of change,enlargement of teams, value, compassion towards intercultural aspects, focus and achievement of business results, alliances and persuasion, leadership and orientation towards customers (Inside HR 2014) . This leadership programs should be promoted more aggressively and concentrate on specific leadership skills required for overcoming current issues outlined above. Action Learning: In action learning leaders will be subjected to real life situations occurring within Siemens and thus learn while resolving practical issues (Saks et al. 2010) . Basically leaders will be either exposed to such problems with which are not common or to similar situations in unusual environment (Nelson et al. 2011) . This will nourish leadership skills among potential leaders by testing their existing capabilities.
4.2 Report on the usefulness of methods used to plan the development of leadership skills
The plan for development of leadership skills will only be successful when leaders resort to self- awareness plans. These plans help them in identifying their potential competencies and weak points which they can improvise upon when subjected to planned integrated leadership development approach (Raelin 2006) . The foundation of effective leadership and its development is laid upon experiences by a leader in different settings namely workshop learning and on-the- job learning. The basic objective of any leadership skills development program is to enhance an individual’s attitude, skills and knowledge thereby raising his or her efficiency levels to perform effectively in present and future circumstances. The usefulness of the above methods will be explored from dependability and honesty, self learning, and futuristic perspectives. Dependability and Honesty Perspective: Integrity implies consistency of performance delivered by a leader. The chosen methods for leadership development will primarily focus on enhancing leader’s behavior in a positive and ethical direction which will thus motivate followers to perform on similar lines (Peterson 2004) . To bring about a complete change within Siemens, transformational and charismatic leadership is required which is possible only when the leadership development models are based upon this perspective. These methods would focus on nurturing leadership skills by focusing on brining about change within the organization with ethical perspectives along with exercising control on intentions to be involved in negative or unethical activities (Palanski & Yammarino 2009) . With the aid of dependability and honesty perspective a leader will be in a position to resolve issues arising at differing organizational levels and thus smoothenachievement of Siemens’ vision. Self-Learning: Individualistic development is at the core of any leadership development program. These development programs would foster self-learning among leaders through the
18 | Page process of self-discovery of individual strengths and weaknesses (Raelin 2006) . The leaders by having an understanding about self will be able to take measures to overcome weaknesses and convert strengths in competitive advantages (Kolb 2014) . Self-learning will help leaders to take knowledgeable actions. The integrated leadership development program in Siemens will also focus on this perspective and thus will be useful in enhancing leadership skills. Futuristic Perspective: For leaders to be able to take proactive actions it is essential to have a futuristic perspective (popularly known as vision). Based on the present circumstances they should be in a position to forecast the future and take actions accordingly. These leadership development programs in Siemens will help in developing this futuristic perspective among organizational employees especially among potential leaders (Wang et al. 2005) . In a dynamic business environment in which companies are striving develop human assets to gain competitive advantage developing effective leaders is highly significant (Kolb 2014) . Developing leaders requires investment of scare resources and thus organizations need to be cautious while determining methods for doing so. Siemens is already experiencing a tough time and in on the verge of complete organizational change. Thus the leadership development programs need to consider this aspect and successful help the organization to undergo change. Ultimately the usefulness of leadership development programs will be tested during this hard- hitting time faced by Siemens.
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