Question Paper Leadership and Change Management (MB3H1H) : October 2008

Section A : Basic Concepts (30 Marks)

This section consists of questions with serial number 1 - 30. Answer all questions. Each question carries one mark. Maximum time for answering Section A is 30 Minutes.
i exe .

1. In a business world that is constantly changing, an organization needs both leaders and managers, if they are to<Answer> survive and grow. Which of the following statements is/are not the characteristic(s) of leadership? I. II. III. IV. (a) (b) (c) (d) (e) Leadership deals with aligning people. Leadership provides a direction for change. Leadership involves motivating people. Leadership deals with organizing and staffing. Only (I) above Only (IV) above Both (I) and (III) above Both (II) and (III) above All (I), (II), (III) and (IV) above.

2. Which of the following attributes of effective leaders enhances integrity, which is a personal virtue of an<Answer> organization? (a) (b) (c) (d) (e) Self-awareness Self-regulation Motivation Empathy Social skills.

3. In which of the following leadership styles, the leader keeps his employees happy and creates harmony among <Answer> them thus ensuring better communication and sharing of ideas, while providing inspiration and building trust? (a) (b) (c) (d) (e) Autocratic style Authoritative style Benevolent style Coaching style Democratic style.

4. Tannenbaum and Schmidts continuum indicates different patterns of leadership behavior. In which of the<Answer> following patterns of behavior a leader arrives at a decision, seeks the approval of his subordinates and gives his subordinates an opportunity to understand its line of thinking and intentions? (a) (b) (c) (d) (e) (a) (b) (c) (d) (e) Leader as an announcer Leader as a seller Leader as a clarifier Leader as a senior partner Leader as seeker.

5. Which of the following subordinates do not have a certain amount of power in relation to the leader? Subordinates who have skills which are difficult to replace Subordinates who have exclusive information or knowledge Subordinates who maintain good relation with their leaders Subordinates whose jobs are crucial and have a high impact on the bosss performance Subordinates whose jobs are not related to other jobs in the organization.

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6. Persuasion skills can be improved by tailoring the arguments/presentation to the decision making style of the<Answer> leader in the group. In this regard, which of the following statements is/are not true regarding followers? (a) (b) (c) (d) (e) Followers are not early adopters Followers rely on past decisions made under similar circumstances Followers are the easiest to persuade Followers do not like innovative and new ideas Followers are responsible decision makers.

7. If a story teller talks about his experiences in his early career and in another company, the narrated experience <Answer> should relate to the companys current challenges. In such case, the components that are necessary for shaping great stories that build leadership is termed as (a) (b) (c) (d) (e) Level specific Dramatic Context-specific Learning value Use of role models.

8. Organizations take certain critical steps to bring about change or link leadership development to company goals. <Answer> In which of the following steps, companies use Kirkpatrick levels to quantify the impact of leadership programs on business results? (a) (b) (c) (d) (e) Future orientation Execution Integration Consciousness Evaluation of Development efforts.

9. According to Bennis and Nanus, which of the following learnings ensures long-term survival by bringing <Answer> change, renewal, and restructuring? (a) (b) (c) (d) (e) Individual learning Group learning Innovative learning Maintenance learning On job learning.

10.By using which of the following a leader can put the parties of a conflict situation at ease and demonstrate his <Answer> willingness to help them arrive at a mutually acceptable solution? (a) (b) (c) (d) (e) Passive listening Active listening Nonverbal communication Mediation skills Questioning skills.

11. The coaching that takes place when the subordinate is performing up to the expectations and wants to acquire<Answer> new skills to perform at higher levels is termed as (a) (b) (c) (d) (e) I. II. III. IV. (a) (b) (c) (d) (e) Performance management coaching Situational coaching Intensive coaching Performance enhancement coaching Formal coaching.

12.To be a successful coach one should not act as a Judge. Patient observer. Colleague. Teacher. Only (I) above Only (II) above Both (I) and (II) above Both (III) and (IV) above All (I), (II), (III) and (IV) above. 2

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13.Which of the following statements is/are true regarding the differences between work groups and teams? I. Work groups have single strong leader while leadership roles are shared by team members in teams based on needs and circumstances. II. Work groups have individual and mutual accountability where as in teams there is no scope for mutual accountability. III. The purpose of groups is always same as the mission of the organization but the team shapes its purpose by taking the top management expectations into consideration. (a) (b) (c) (d) (e) Only (I) above Only (II) above Both (I) and (III) above Both (II) and (III) above All (I), (II) and (III) above.

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14.Activities such as interviews, surveys, and experiments that generally involve more than one person can be<Answer> termed as (a) (b) (c) (d) (e) Team performances Organizational performances Individual performances Collective work-products Group activities.

15.In which of the following leadership approaches that foster team performance, the leader can address the team <Answer> directly about the urgency and importance of its mission and can also offer direct compensation for contribution to the team? (a) (b) (c) (d) (e) Spend time together Be concerned about first impressions Let the team redefine purpose and goals Value contribution and positive feedback Recruit for skill and potential.

16.Organizations are increasingly becoming conscious of the need to be more choosy about their CEOs. Human <Answer> resource departments are giving more attention to this issue. In this context, the task of selecting future CEOs can be disastrous, if (a) (b) (c) (d) (e) The incumbent CEO alone accomplishes the task A committee is assigned for the task The committee is cohesive and effective The committee does not have more than five members The committee evaluates the companys top management team and its leadership development.

17.Narcissistic leaders who work for long hours, sacrificing their personal lives by spending all their time and <Answer> energy at work and even when they are not in their workplace, they spend their time thinking and planning for work can be characterized as (a) (b) (c) (d) (e) Relentless Workaholics Power Hungry Ruthless Loyal towards the organization.

18.Jim Collins has classified different levels of leaders. Which of the following is not a characteristic of Level 5<Answer> leaders? (a) (b) (c) (d) (e) Level 5 leaders are a paradoxical blend of fierce and personal humility Level 5 leaders are stubborn and ruthless yet humble Level 5 leaders are often more bothered about their personal greatness than the companys greatness Level 5 leaders are highly ambitious for their company Level 5 leaders accomplish great things for their organizations and they never take credit.

19.Which of the following do the narcissistic leaders use to convince other members in a meeting, that what he is<Answer> talking is plain common sense and truth? (a) (b) (c) (d) (e) Charisma Compelling vision Metaphors Empathy Self-esteem.

20.E-commerce needs a different outlook on manufacturing and commerce. But with e-commerce, organizations<Answer> can create competitive advantage through this function. In this context, which of the following is/are false regarding e-commerce? I. E-commerce does not simply cover the distance but it eliminates the distance. II. Leadership in the age of e-commerce is more about connecting technology than connecting people. III. E-commerce cannot operate in any market without maintaining a physical presence there. (a) (b) (c) (d) (e) Only (I) above Only (II) above Both (I) and (II) above Both (II) and (III) above All (I), (II) and (III) above.

21.According Larry E.Greiner, an organization evolves through five stages. In which of the following stages the <Answer> management does not communicate very frequently with the lower level management? (a) (b) (c) (d) (e) The creativity stage The stage of direction-setting The stage of decentralization The stage of coordination The stage of collaboration.

22.Systematic change is more focused and carefully constructed. It is often characterized by orderliness. The <Answer> following are the good examples for systematic change except (a) (b) (c) (d) (e) Quality improvements Work reprogramming Benchmarking Repositioning strategy Strategic planning.

23.Rejuvenation is an organic change that happens in many ways. Which of the following is underway in an <Answer> organization when its middle level managers are successful in inducing change by taking sound initiative? (a) (b) (c) (d) (e) Inadvertent rejuvenation Imperative rejuvenation Steady rejuvenation Driven rejuvenation Advertent rejuvenation.

24.Reform is a change that occurs in a calculated and systematic way. Which of the following reforms is meant to <Answer> bring about organic change directly and are steady and consistent? (a) (b) (c) (d) (e) Educated reform Imperative reform Energized reform Systematic reform Planned reform.

25.Which of the following statement(s) is/are true regarding organic change? I. Organic change is stimulated by specialists. II. Organic change is fragmented and anarchical in nature. III. Groups infusing such change may work at cross-purposes and engage in fighting over resources. (a) (b) (c) (d) (e) Only (I) above Only (II) above Both (I) and (II) above Both (II) and (III) above All (I), (II) and (III) above.

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26.The role of middle level managers is crucial in managing change. Which of the following statement(s) is/are not <Answer> true regarding middle level managers as change agents? I. Middle level managers connect and align between the top managements aspirations and strategic intent, market realities and the capabilities of work force. II. Middle level managers can not bring about change in the actions of people around them. III. They influence the actions of the people reporting to them as well as the people who they report to. (a) (b) (c) (d) (e) Only (I) above Only (II) above Both (I) and (II) above Both (II) and (III) above All (I), (II) and (III) above.

27.In some organizations, the senior HR people are referred to as change directors. In this context, which of the<Answer> following are true regarding the new roles of the HR department? I. II. III. IV. (a) (b) (c) (d) (e) To define companys vision in financial terms. To act as the guardian of companys culture. To play a key role in the development of business strategy. To train, educate and develop managers by providing the tools and techniques necessary for ushering in the desired change. Both (I) and (II) above Both (I) and (III) above (I), (II) and (IV) above (II), (III) and (IV) above All (I), (II), (III) and (IV) above.

28.Disruptive innovation helps the customer meet his needs, but at a far lower price and more conveniently. In this <Answer> context, which of the following is true regarding disruptive innovation? (a) (b) (c) (d) (e) Disruptive innovators compete against existing consumption The product or service that emerges out of disruptive innovation serves people who were either not served earlier or were used to poor service The product or service that emerges out of disruptive innovation serves people who were already being served well Disruptive innovation goes systematically There is a defined structure for disruptive innovation.

29.Transforming an organization requires initiative, cooperation and willingness of the employees and managers in <Answer> the organization to make sacrifices. In which of the following steps, suggested by John P. Kotter, the guiding coalition attempts to cash in on the credibility generated through short-term wins? (a) (b) (c) (d) (e) Establishing a sense of urgency Creating a guiding coalition Communicating the changing vision Scoring short-term wins Consolidating change.

30.Organizational culture is significantly influenced by the mental models the employees in an organization hold.<Answer> Which of the following is true regarding mental models of employees in an organization? (a) (b) (c) (d) (e) Changing the mental models of employees is one way to change organizational structure Mental models of employees are invaluable for day-to-day living Mental models of employees represent situation exactly as it is Mental models of employees determine how people see the world influence Mental models of employees influence organizational culture. END OF SECTION A

Section B : Caselets (50 Marks)

This section consists of questions with serial number 1 6. Answer all questions. Marks are indicated against each question. Detailed explanations should form part of your answer. Do not spend more than 110 - 120 minutes on Section B.

Caselet 1
Read the caselet carefully and answer the following questions:
<Answer> 1. The rate of change is going up, and corporations should be able to handle large and continuous change. Discuss how change management is evident at Lloyds. ( 9 marks)

2. What are the various types of change an organization can adopt? What kind of change was adopted at Lloyds? Justify. The rate of change is going up, and not just in a linear sense. That has huge implications for corporations. They have to be able to handle these large changes. And increasingly they have to be able to handle continuous change, not just episodic change. If the important project starts taking up additional time, leaders with a sense of urgency know to get low-priority stuff off their calendars. Richard Ward will never forget his first day as CEO of Lloyd's of London, the venerable specialty insurance market that brings together underwriters and brokers to insure everything from investment banks to the World Trade Center to the teeth used by the actress America Ferrera in the TV show Ugly Betty. Ward knew he would have to confront as CEO of Lloyds. The centuries-old organization had a great reputation and track record for insuring and paying out for some of the world's most extraordinary risks. But its claims processing was still stuck, in a sense, in the 17th century. I joined Lloyds that had not really changed its working practices or business practices and responded to technology in the past 320 years, Ward says. Processing claims was still a mostly hands-on, shoe-leather procedure. A broker would walk into Lloyds underwriting room in London some 5,000 people go in and out of this room every day and present documentation to one of Lloyds underwriters, also known as members. The underwriter would then make comments on the documents, give it back to the broker, and the broker would then physically take it to a loss adjuster and a lawyer. Because of the complexity of what Lloyds members insure, the documentation could be massive, for example, years of maintenance and engineering reports on a multimillion dollar oil rig. Its claims procedures produced so much paper that until recently, Lloyd's was transporting about four tons of paper every day from London to Kent, some 50 miles away, to be stored store in its back-office processing center. Ward knew an efficient electronic claims-processing procedure, which he began implementing in early 2007, was long overdue. But getting members to change their long-entrenched ways wasn't going to be easy. The system worked well it just didn't process claims as quickly as it might have. Many members, Ward recalls, didn't 6

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( 8 marks)

"want to change their very traditional business practices." To get started, Ward sought out those members who were dissatisfied with the status quo. Together they worked out a system that would allow the electronic processing of claims that were held in a central repository. There lawyers, loss adjusters, and even claimants could check on the documentation and the claims. The group set stretch targets for getting the new system adopted. By the end of 2007 they hoped Lloyds would be processing 90% of its claims electronically. By getting internal movers and shakers on board early, Ward was able to get about 30% of claims processed electronically by early 2007. After that, though, the adoption rate stalled. We started to plateau, Ward says. That's not unusual in a change program. So he switched gears, developing a naming and praising exercise in which he made a list of the top 10 performers in terms of using the new system. It worked: The day he released the first list, he got about 45 complaints from people who weren't on it. The numbers improved 15% literally overnight, Ward recalls. It had quite a dramatic impact. In addition to carrots, Ward used sticks, too. Those who were slow to use the high-tech system were asked to invest more capital to cover their underwriting risks. He describes this punitive lever with characteristic politesse: If you don't process claims electronically, he remembers telling members, Im afraid were going to ask you to keep more capital in the market because of your own inefficiencies. Finally, he launched a communication campaign that made him visit the CEOs of all the member companies. He knew that becoming personally involved and explaining the benefits to hesitant member company leaders would help him meet his goals. They had to know it would assist them in their business rather than be a threat to them, Ward says. It required a lot of legwork on my part. It required a lot of speeches, a lot of high-profile visits. Ward went out and looked for people and there are always some who knew there was a real problem that had to be dealt with. He worked initially with them. That's a big plus, but he still didn't use them enough to create urgency among a broader group of people. Next, he goes on to do what everybodys been taught to do in a change-management program, which is to get his team to come up with a plan and then execute on it. He suffered from what we see all the time: the change program goes well for a while and then it stalls. To Wards credit, instead of just getting frustrated and yelling at people, he immediately tried to get creative and come up with a way to get the program out of the stall. He came up with the name and praise exercise and the vast communication campaign. After initial successes, urgency tends to drop even among the people who feel it at the beginning. Communication efforts can keep pumping that up. Ward was able to use his communication campaign to push his adoption rate even higher, and eventually to beyond 90% of claims processed using the new high-tech system. That's really quite extraordinary. The kind of problem Ward faced is going to become more and more common. The vast majority of leaders dont handle this well. The beginning of the change process always has to do with getting a sense of urgency up high, and managers do not feel the urgency, even smart and sophisticated executives. These leaders don't see the complacency, either because it's just around the door and people don't tell them about it or because they see a lot of frantic activity. END OF CASELET 1

Caselet 2
Read the caselet carefully and answer the following questions: 3. Can you conclude that Smith possessed the characteristics of level 5 leaders? Justify your explanation. 4. In what way do you think Smith exhibited a level 5 leaders operating style? 7
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( 9 marks)
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( 9 marks)

In 1971, a seemingly ordinary man named Darwin E. Smith was named chief executive of Kimberly-Clark, a stodgy old paper company whose stock had fallen 36% behind the general market over the previous 20 years. Smith, the companys mild-mannered in-house lawyer, wasnt so sure the board had made the right choice a feeling that was reinforced when a Kimberly-Clark director pulled him aside and reminded him that he lacked some of the qualifications for the position. But CEO he was, and CEO he remained for 20 years. What a 20 years it was. In that period, Smith created a stunning transformation at Kimberly-Clark, turning it into the leading consumer paper-products company in the world. Under his stewardship, the company beat its rivals Scott Paper and Procter & Gamble. And in doing so, Kimberly-Clark generated cumulative stock returns that were 4.1 times greater than those of the general market, outperforming venerable companies such as Hewlett-Packard, 3M, Coca-Cola, and General Electric. As noted in a Harvard Business Review article, Kimberly-Clark is one of eleven companies on the Fortune 500 since 1965 that has been elevated from good to great and has maintained its transformed status. Mr. Smith was recognized for making this accomplishment possible. Mr. Smith achieved this transformation by building strength within the company. He redefined and raised corporate goals. To reach this end he persistently examined the companys leadership group, winnowing those who did not meet his specifications and promoting those who did. Mr. Smith also increased the geographical diversification of Kimberly-Clarks facilities. The emphasis he placed on consumer products was exemplified by the money he allotted to research and development ($111 million in 1987) and his decision not to give up on the fledgling diaper business, against much opposition. His vision helped lead HUGGIES diapers to its rank as the number 1 brand in the country today. Additionally, he strengthened the companys position in the tissue segment of the paper industry, pushing both Kimberly-Clark and its competitors to improve and strengthen their tissue technology and facilities. The financial strength of the industrys tissue segment today is testament to his efforts. During Mr. Smiths tenure as chairman and chief executive officer, Kimberly-Clark stockholders experienced returns of 19.6% annually, generating cumulative stock returns that were 4.1 times greater than those of the general market and outperforming venerable companies including industry rivals. It had been a welcomed change from the 20 years prior when Kimberly-Clark stock had fallen 36% behind the general market. Mr. Smith was the type of leader who gave credit for success to the employees, the managers, his predecessors, and the customers. Smiths turnaround of KimberlyClark is one the best examples in the twentieth century of a leader taking a company from merely good to truly great. Smith is an individual who blends extreme personal humility with intense professional will. According to a five-year research study, executives who possess this paradoxical combination of traits are catalysts for the statistically rare event of transforming a good company into a great one. Darwin Smith was identified as the one who has the highest level in a hierarchy of executive capabilities in the research. Leaders at the other levels in the hierarchy can produce high degrees of success, but not enough to elevate companies from mediocrity to sustained excellence. Darwin Smiths leadership qualities not only transformed a good company into a great one but he was able to get the right people on the bus and the wrong people off the bus and creating a culture of discipline. Good-to-great transformations dont happen without Level 5 leaders at the helm. They just dont. Level 5 leadership is counterintuitive. Indeed, it is counter-cultural. People generally assume that transforming companies from good to great requires larger-than-life leaders big personalities like Iacocca, Dunlap, Welch, and Gault, who make headlines and become celebrities. Compared to those CEOs, Darwin Smith seems to have come from Mars. Shy, unpretentious, even awkward, Smith shunned attention. When a journalist asked him to describe his management style, Smith just stared back at the scribe from the other side of his thick black-rimmed glasses. He was dressed unfashionably, like a farm boy wearing his first J.C. Penney suit. Finally, after a long and uncomfortable silence, he said: Eccentric. Needless to say, the Wall Street Journal did not publish a splashy feature on Darwin Smith. 8

But if you were to consider Smith to be soft or meek, you would be terribly mistaken. His lack of pretense was coupled with a fierce, even stoic, resolve toward life. Smith grew up on an Indiana farm and put himself through night school at Indiana University by working the day shift at International Harvester. One day, he lost a finger on the job. The story goes that he went to class that evening and returned to work the very next day. Eventually, this poor but determined Indiana farm boy earned admission to Harvard Law School. He showed the same iron will as CEO of Kimberly-Clark. Indeed, two months after Smith became CEO, doctors diagnosed him with nose and throat cancer and told him he had less than a year to live. He duly informed the board of his illness but said he had no plans to die anytime soon. Smith held to his demanding work schedule while commuting weekly from Wisconsin to Houston for radiation therapy. He lived 25 more years, 20 of them as CEO. Smiths ferocious resolve was crucial to the rebuilding of Kimberly-Clark, especially when he made the most dramatic decision in the companys history: sell the mills. Shortly after he took over, Smith and his team had concluded that the traditional core business coated paper was doomed to mediocrity. Its economics were bad and the competition weak. But, they reasoned, if Kimberly-Clark was thrust into the fire of the consumer paper-products business, better economics and world-class competition like Procter & Gamble would force it to achieve greatness or perish. And so, like the general who burned the boats upon landing on enemy soil, leaving his troops to either succeed or die, Smith announced that Kimberly-Clark would sell its mills even the namesake mill in Kimberly, Wisconsin. All proceeds would be thrown into the consumer business, with investments in brands like Huggies diapers and Kleenex tissues. The business media called the move stupid, and Wall Street analysts quickly downgraded the stock. But Smith never wavered. Twenty-five years later, Kimberly-Clark owned Scott Paper and beat Procter & Gamble in six of eight product categories. In retirement, Smith reflected on his exceptional performance by saying simply, I never stopped trying to become qualified for the job. END OF CASELET 2

Caselet 3
Read the caselet carefully and answer the following questions: 5. Why do you think leadership succession was a problem for Bobs company? Justify. 6. How do you think the initiatives implemented by RDA would have helped Bob and Bettys outlook towards leadership transition? Richard Dana Associates (RDA) was brought in by the owners of a family-owned business with complex relationship issues at a time preceding an anticipated leadership transition. Following individual and group coaching sessions, RDA was able to help the leadership separate personal issues, and codify practices through formal policies to allow the leadership group to focus on business issues without personal complications. At the end of RDA's engagement, the client was wellpositioned to begin developing a transition plan. Bob, founder, CEO, and owner of a 20-year-old, closely-held business, hoped to groom his 30-year-old son, Jack to take over the business in the next five years. The firm was currently co-run by Betty, the COO and Operations Manager. She was a longtime employee of the firm, and also had been Bob's life partner for most of that time. Both Jack and the firm were at a critical juncture, if Jack and the firm did not make a mutual commitment to each other in the next year or so, Jack would likely pursue alternative career options, closing a window of opportunity. And yet Jack was not privy to many of the decisions and financials underlying the company information that would allow him to make an objective decision about his future role in the firm and no plan existed to manage the transition. Jack and Bob's personal relationship had grown estranged, and both prone to intense emotional responses to work and personal issues. In addition, Betty felt that Jack did not accord her 9
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( 8 marks)
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appropriate respect in her role as COO, and was therefore concerned about her professional future as COO under Jack's leadership; she was also anxious that any transition be smooth to enable her continued personal relationship with Bob, the owner. The emotionally-charged relationships between the three key players resulted in both personal and professional command-and-control conflicts, preventing the three from working together to develop a smooth transition plan. Furthermore, Bob's existence did not reflect his stated succession plans, thereby making relationships with Betty and Jack even more complicated. Richard Dana Associates was engaged to help bring to light the interpersonal conflicts, to develop an action plan to bridge the communication gaps, and to start building the foundation for a longer-term succession. RDA began by conducting numerous strategic interviews with the three players both as individuals and in groups - to identify and air both personal and professional obstacles to a smooth transition. Each person aired their own particular concerns and articulated their specific personal goals. Based on these discussions, RDA worked with the three key players to identify concrete goals and changes including: Implementing unambiguous job descriptions to clarify roles amongst Bob, Jack, and Betty. Developing clear, formal, consistent policies and expectations and following through on their application to the entire firm. Both Bob and Jack had historically skirted many informal firm policies, leading to conflict with Betty and poor impressions among the staff. Initiating leadership training for Bob to help him to both set limits on Jack's unproductive behavior, but also to begin training Jack for future leadership. Forcing Bob to be less laissez-faire and more pro-active in giving Jack both a macro and micro understanding of the business so that he might assume leadership in the desired timeframe. Identifying specific times for Bob and Jack to repair their personal bond through everyday interactions. Sitting Betty and Jack down for RDA-facilitated meetings with clear agendas where they could vent, articulate underlying issues, identify the impact of their conflicts on the business, extract a workable foundation, and craft specific goals. Individual coaching for Bob, Jack, and Betty to help them examine and address their work issues objectively. Training in basic communication skills and relationship-building including using non-confrontational language, setting clear business agendas for interactions, emailing meeting summaries and assignments, objectively clarifying any differences that arose.

Through the course of RDA's engagement, the requisite underlying systems were put in place job descriptions, policies and procedures, communication skills training, and relationship building. Jack was able to work at the firm productively. The dysfunctional behavior had stabilized and the three were better able to separate their business identities from their personal conflicts, and had begun working more as a team. The benefits of their improvements spread to the rest of the organization in the form of improved trust, increased productivity, and a less emotional work environment. By eliminating the personal obstacles, Bob and Betty were ready to envision a succession plan. RDA facilitated additional working sessions with Bob and Betty, to focus on their personal and business priorities. END OF CASELET 3 END OF SECTION B 10

Section C : Applied Theory (20 Marks)

This section consists of questions with serial number 7 8. Answer all questions. Marks are indicated against each question. Do not spend more than 25 -30 minutes on Section C.
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7. Singapore Airlines believes in cultivating the team performance in its Mission 2010 program to be implemented in the years to come. However, there are no guaranteed approaches to improve team performance. What approaches do you think that Singapore Airlines can adopt to ensure higher performance levels for their teams? 8. Mr. Vishal Dixit, CEO of Radico consultants believed that outcomes of innovation efforts are impossible to predict. But Clayton Christensen thinks that it is not so. According to Clayton, even an undesirable outcome has a cause. In this regard, discuss the various factors that affect disruptive innovation.

( 10 marks)
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( 10 marks)

END OF SECTION C END OF QUESTION PAPER

11

Suggested Answers Leadership and Change Management (MB3H1H) : October 2008

Section A : Basic Concepts
Answer 1. B Reason Only statement IV is not a characteristic of leadership because, management deals < TOP > with organizing and staffing. Statements (I), (II) and (III) are the characteristics of leadership. Self-regulation attributes of effective leaders enhances integrity, which is a personal < TOP > virtue of an organization In Benevolent style leadership styles the leader ensures better communication and< TOP > sharing of ideas, while providing inspiration and building trust. In leader as a clarifier pattern, the leader arrives at a decision, seeks the approval of < TOP > his subordinates and gives his subordinates an opportunity to understand its line of thinking and intentions. Subordinates whose jobs are not related to other jobs in the organization do not have< TOP > a certain amount of power in relation to the leader. Followers like innovative and new ideas but reliable ones. < TOP > If a story teller talks about his experiences in early career and in another company the < TOP > component that is necessary for shaping great stories that build leadership is termed as context specific. In evaluation of development efforts companies use Kirkpatrick levels to quantify the < TOP > impact of leadership programs on business results. According to Bennis and Nanus, Innovative learning ensures long-term survival by< TOP > bringing change, renewal, and restructuring. By using nonverbal communication a leader can put the parties at ease in a conflict < TOP > situation and demonstrate his willingness to help them arrive at a mutually acceptable situation. The coaching that takes place when the subordinate performs up to the expectations < TOP > and wants to acquire new skills to perform at higher levels is termed as performance enhancement coaching. Only ( I ) is correct. To be a successful coach one should not act as judge. < TOP > Only (II) is false. In work groups there is no scope for mutual accountability and < TOP > teams will have individual and mutual accountability. Activities such as interviews, surveys, and experiments that generally involve more < TOP > than one person can be termed as collective work-products. In value contribution and positive feedback approach the leader can address the team < TOP > directly about the urgency and importance of the mission and can also offer direct compensation for contribution to the team. The task of selecting future CEOs can be disastrous, if the incumbent CEO alone < TOP > accomplishes the task. The discussion is part of workaholics characteristics of narcissistic leaders. < TOP > Level 4 leaders are often more bothered about their personal greatness than the < TOP > companys greatness where as Level 5 leaders are not more bothered about their personal greatness. Narcissistic leaders use metaphors to convince other members in the meeting that < TOP > what he is talking is plain common sense and truth. The statements (II) and (III) are false. As leadership in the age of e-commerce is more< TOP > about connecting people than connecting technology. E-commerce can operate in any market without maintaining a physical presence there. 12

2. 3. 4.

B C C

5. 6. 7.

E D C

8. 9. 10.

E C C

11.

12. 13. 14. 15.

A C D D

16. 17. 18.

A B C

19. 20.

C D

21. 22. 23. 24. 25.

C D B C D

In the stage of decentralization the management does not communicate very < TOP > frequently with the lower level management. Repositioning strategy is an example for dramatic change. Hence the option (d) is the < TOP > answer. Imperative rejuvenation will take place when middle level managers are successful in < TOP > inducing change by taking sound initiative Energized reforms are meant to bring about organic change directly and are steady as< TOP > well as consistent. Statements (II) and (III) are true. Systematic change is stimulated by specialists. < TOP > Organic change is brought about by people at the grassroots level in the firm. Organic change is fragmented and anarchical in nature. Groups infusing such change may work at cross-purposes and engage in fighting over resources. Statements (II) are not true. Middle level managers can bring about change in the < TOP > actions of people around them. Statements (II), (III) and (IV) are true. Because, Companys vision is defined in < TOP > people terms. Disruptive innovators compete against non consumption and the product or service< TOP > that emerges out of disruptive innovation serves people who was either not served earlier or were used to poor service. In consolidating change, suggested by john P. Kotter, the guiding coalition attempts to< TOP > cash in on the credibility generated through short-term wins. Mental models of employees do not represent situation exactly as it is. They are the < TOP > approximations of reality.

26. 27. 28.

B D B

29. 30.

E C

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Section B : Caselets
1. < TOP > The change management is evident at Lloyds because of the following ways Introduction: Ward wanted to bring about the change in the procedure of claims processing which was stuck for many years. He knew that his attempt of beginning the electronic processing claims would be a over due. The old practices had been established firmly in the minds of underwriters and brokers. The electronic processing system would allow lawyers, loss adjusters, and even claimants could check on the documentation and the claims. The change brought about can make the procedure better. Reason to change: The procedure of processing claims was not doing well at Lloyds. A broker had to walk into Lloyds underwriting room in London some 5,000 people go in and out of this room every day and present documentation to one of Lloyds underwriters. The underwriter would then make comments on the documents, give it back to the broker, and the broker would then physically take it to a loss adjuster and a lawyer. Lloyd's was transporting about four tons of paper every day from 50 miles away, to be stored store in its back-office processing center. Hence, Ward wanted to begin a system that would allow the electronic processing of claims that were held in a central repository so that lawyers, loss adjusters, and even claimants could check on the documentation and the claims. Challenges: Reputation Lloyds had a great reputation and track record for insuring and paying out for some of the world's most extraordinary risks. Ward had to take decisions that would not hinder the reputation of Lloyds. Complexity The complexity of what Lloyds members insure, the documentation could be massive, made up of, for example, years of maintenance and engineering reports on a multimillion dollar oil rig. Reluctance The moment when Ward joined Lloyds had not changed its working practices or business practices and it had not responded to technology in the past 320 years. Underwriters, also known as members didn't want to change their very traditional business practices. Difficulty to change Ward knew an efficient electronic claims-processing procedure, which he began implementing in early 2007, was long overdue. But getting members to change their long-entrenched ways wasn't going to be easy. Key Initiatives taken by Ward to bring about the change: Sought out: For a better start, Ward searched for members who were dissatisfied with the status quo and set target they hoped 90% of its claims to be processed electronically. Switching gears Initially, Ward was able to get about 30% of claims processed electronically by developing a naming and praising exercise in which he made a list of the top 10 performers in terms of using the new system. It worked: The day he released the first list, he got about 45 complaints from people who weren't on it. The numbers improved 15% literally overnight. Punitive lever Those who were slow to use the high-tech system were asked to invest more capital to cover their underwriting risks. He said that he is going to ask them to keep more capital in the market because of their own inefficiencies. Communication campaign The campaign helped him visiting the CEOs of all the member companies. He personally involved in explaining the benefits to hesitant member company leaders and let them know that it would assist them in their business rather than be a threat to them. Ward went out and looked for people and there are always some who knew there was a real problem that had to be dealt with. Endeavour Ward had done a lot of legwork on my part. It required a lot of speeches, a lot of high-profile visits. He suffered from what we see all the time: the change program goes well for a while and then it stalls. Instead of just getting frustrated and yelling at people, he immediately tried to get creative and come up with a way to get the program out of the stall. < TOP > Systematic Change As compared to dramatic change, systematic change is more focused and carefully constructed Systematic change is often characterized by orderliness. This type of change is attempted only after thorough planning and careful consideration. Organic Change While dramatic change is led by the formal leadership, and systematic change is stimulated 14

2.

3.

by specialists, organic change is brought about by people at the grassroots level in the firm. Organic change is fragmented and anarchical in nature. This change often emerges as a challenge to authority. Dramatic Change Top leaders in the organization attempt dramatic change in times of crisis or extraordinary opportunity. Some examples of dramatic change are: reducing costs, organizational restructuring, repositioning strategy, and changing the organizational mind-set The leadership resorts to dramatic change with the expectation that this initiative would be welcomed by everyone. But there is usually some covert or overt resistance. Change adopted at Lloyds: The change adopted by Ward, here represents dramatic change. Since dramatic change is often initiated by top management, Ward as a CEO had brought out the change from the top level. Top leaders in the organization like CEO attempts dramatic change in times of extraordinary opportunity, Ward had a tremendous opportunity to change the business practices by beginning the electronic claim processing. By initiating the change he was able to reduce the transportation cost as well. He had changed the mind set of Underwriters who are known as members that didn't want to change their traditional business practices. He said that he will ask them to keep more capital in the market because of their own inefficiencies. Besides, He personally involved in explaining the benefits to hesitant member company leaders and let them know that it would assist them in their business rather than be a threat to them. Finally, he was able to make every one accept his initiative. Change adopted at Lloyds is not brought about by people at the grassroots level in the firm. Ward had not adopted the change in fragments and the change was not anarchical in nature. Therefore, It is not said to be an organic change. Though Ward has started it slowly he did not attempt it after thorough planning or careful consideration. The change was also not focused and carefully constructed or characterized by orderliness. Hence, it does not does not represent a systematic change either. < TOP > Smith possessed the following characteristics of level 5 leaders: Fierce will. Level 5 leaders demonstrate their fierce will in ensuring superb results for their companies. They play most important role in transforming their companies that are merely good, to great. Once they are decided about what to do to ensure best long-term results, they will go through the process with unwavering resolve. Level 5 leaders inspire standards, build enduring and great companies against odds. Smith was not soft or meek. His lack of pretense was coupled with a fierce. Once, he lost a finger on the job despite, he went to class that evening and returned to work the very next day. He showed the same iron will as CEO, two months after Smith became CEO, doctors diagnosed him with cancer and told him he had less than a year to live but he said he had no plans to die anytime soon. Smiths ferocious resolve was crucial to the rebuilding of Kimberly-Clark, especially when he made the most dramatic decision in the companys history: sell the mills. Though, Smith and his team had concluded that the traditional core business coated paper was doomed to mediocrity. Its economics were bad and the competition weak. But, they reasoned, if Kimberly-Clark was thrust into the fire of the consumer paper-products business, better economics and world-class competition like Procter & Gamble would force it to achieve greatness or perish. Compelling humility. They shun public attention. They are never boastful. They are always happy to discuss at length about their company and the contribution of their people. Smith seems to have come from Mars. Shy, unpretentious, even awkward, Smith shunned attention. Mr. Smith used to give credit for success to the employees, the managers, his predecessors, and the customers. So he was never boastful. In retirement, Smith reflected on his saying that he had never stopped trying to become qualified for the job. Smith is an individual who blends extreme personal humility with intense professional will. Mr. Smith was responsible for the remarkable successes of Kimberly-Clark but he never admitted that. Level 5 leaders are quiet, and show calm determination when a task is to be accomplished. In case of poor results, they do not blame the external environment. Smith is an individual who blends extreme personal humility with intense professional will. According to a five-year research study, executives who possess this paradoxical combination of traits are catalysts for the statistically rare event of transforming a good company into a great one. Level 5 leaders are a paradoxial blend of fierce will and personal humility. They are stubborn and ruthless, yet they are humble. They are highly ambitious for their company, and rarely allow their ego to come in the way of organizations success. Though they accomplish great things for their organizations they never take credit. They attribute their remarkable accomplishments to their people, external factors, and sheer luck. They are inspired only by the greatness for their organizations. They expect their organizations to be even better after they leave. 15

4.

The operating style of a Level 5 leader are: Disciplined People Smith created a culture of discipline in the organization. Being a level 5 leader he lead with the help of disciplined people, disciplined thought and disciplined action. He first identified disciplined people. He didnt have to manage them because they dont need to be managed. Through these disciplined or right people, he was able to manage the system. Then he attempted disciplined thought. Discipline is necessary to face hard facts. Also, disciplined people bring in the discipline necessary in the organization for executing ideas. Finally, disciplined action is necessary. This ensures the desired and expected results. First Who, then What Smith was able to get the right people on the bus and the wrong people off the bus. Leaders at the other levels in the hierarchy can produce high degrees of success, but not enough to elevate companies from mediocrity to sustained excellence. Smith was able to transform Kimberly-Clark merely good to truly great. Smith first identified the right people. The right people to work with are those who are willing to adapt to change. Smith was enthusiastic about moving in the new direction set by the leader. The right people are internally driven and motivated. A company cannot move in the right direction without such motivated people and it is important for the leader to identify these people and place them in positions of responsibility. Once this is over, and then only level 5 leaders turn to the task of setting new direction and strategy for making their organizations great. This approach has some obvious advantages: Once the right people are on the team, adapting to changes becomes relatively easy. The right people will not have motivational problems. A leader need not motivate them or monitor them closely.

< TOP >

The wrong people will not be of much use even when the firm is moving in the right direction. Welcome arguments and debates: Level 5 leaders encourage dialogue and debates before taking any decision. To create the right environment for the dialogue they establish a practice of regular meetings of general manager across various departments. Smith announced that Kimberly-Clark would sell its mills. All proceeds would be thrown into the consumer business, with investments in brands like Huggies diapers and Kleenex tissues. The business media called the move stupid, and Wall Street analysts quickly downgraded the stock. But Smith never wavered. 5. Tenure of CEOs in the current day has become shorter than what it used to be a decade ago. < TOP > This short tenure does not offer enough time to CEOs to groom their successors. Leadership succession also becomes a problem when organizations don't consider it an important issue worth years of preparation. These family businesses throw up some unique challenges for succession planning. Often the family firms are founded by an entrepreneur with a strong personality and tremendous determination.

Leadership succession was a problem for Bobs company in the following way: When Jack and the firm were in a critical juncture CEO, the founder of the organization, was not happy to appoint any outside person who is not a family member. Hence, Bob chose his son as the successor for his company. But Bob did not have time to groom his son, Jack. Jack was not informed to many of the decisions and financials associated with the company information that would allow him to make an objective decision about his future role in the firm and no plan existed to manage the transition. These are the very attributes which make him a successful leader. If Jack and the firm did not make a mutual commitment to each other in the next year or so, Jack would likely pursue alternative career options,
16

closing a window of opportunity. Jack and Bob's personal relationship had grown unfriendly and both had a tendency to intense emotional responses to work and personal issues. Betty felt that Jack did not accord her appropriate respect in her role as COO, and was therefore concerned about her professional future as COO under Jack's leadership. She was anxious that any transition be smooth to enable her continued personal relationship with Bob. The emotionally-charged relationships between the three key players resulted in both personal and professional command-and-control conflicts, preventing the three from working together to develop a smooth transition plan. Bob's existence did not reflect his stated succession plans, thereby making relationships with Betty and Jack even more complicated.
In such organizations, if proper succession planning is not done i.e. if the attributes of the founder (leader) are not inculcated in the successor, the organization may not survive. In such organizations it very often happens that though the leaders transfer their position, they do not transfer their power. 6. Initiatives implemented by RDA helped Bob and Bettys outlook towards leadership < TOP > transition. Richard Dana Associates was introduced to family-owned business of Bob at the time preceding an anticipated leadership transition. Bobs business had complex relationship issues. RDA allowed the leadership group to focus on business issues without personal complications among Bob, Jack, and Betty. RDA's engagement enabled the client to be wellpositioned for developing a transition plan. Initiatives: Richard Dana Associates brought to light the interpersonal conflicts. It developed an action plan to bridge the communications gaps. It built the foundation for a longer-term succession. RDA conducted numerous strategic interviews with the three players both as individuals and in groups to identify and tried to uncover both personal and professional obstacles to a smooth transition. Implementing unambiguous job descriptions to clarify roles amongst Bob, Jack, and Betty. RDA initiated leadership training for Bob to help him to both set limits on Jack's unproductive behavior, but also to begin training Jack for future leadership. Identifying specific times for Bob and Jack to repair their personal bond through everyday interactions.

RDAs facilitated meetings by sitting Betty and Jack down would have made Betty understand the transition better and her threat to the respect in her role as COO would have been eliminated. Her anxiety that any transition be smooth to enable her continued personal relationship with Bob would be reduced. Benefits: Jack was able to work at the firm productively. The dysfunctional behavior had stabilized and the three were better able to separate their business identities from their personal conflicts, and had begun working more as a team. The improved trust, increased productivity, and a less emotional work environment. By eliminating the personal obstacles, Bob and Betty would have been able to foresee the succession plan with clear sense. The additional working sessions with Bob and Betty would have enabled to focus on their personal and business priorities. Because they were able to better isolate their business and personal issues, Bob would 17

have well positioned to consider the viability of a leadership transition, while factoring in historical financials. Bob would have been able to realize the current economic conditions. Bob would have been compensation for the key players, his estate plan, a potential buy-in plan, and a tangible transition plan. The engagement with RDA uncovered the complexity Bob would have realized he needed more time to prepare to leave the business on some levels he would want Jack to run it. He would have realized it was not an attractive choice for Jack. Based on their work with RDA, they would have been able to confront a much clearer choice, with an objective understanding of the factors impacting all three parties.

Section C: Applied Theory

7. Leadership approaches that Singapore Airlines can adopt to ensure higher performance < TOP > levels for their teams: Though there are no guaranteed approaches to improve team performance, yet some approaches mentioned below can help in ensuring higher performance levels. Recruit For Skill and Skill Potential In general the management starts thinking about the skills required in a team only after the team has been created. This seems to be a wrong approach. People should be selected based on their existing skills and their ability to learn new skills in the future, and not on the basis of personalities. Be Concerned About First Impressions Initial impressions matter a lot. Members of potential team look for signals in the first meeting to confirm, suspend, or dispel their assumptions and concerns. They observe people in authority (team leaders; executives who setup, oversee, or influence team formation) very carefully. A leader has to reflect on what he is doing and what he is saying and realize that he is being observed critically. Spend Time Together Team members have to spend a lot time (both scheduled and unscheduled) together at least at the beginning. Such collective spending of time can bring in creative insights and personal bonding. A leader has to ensure that the members of the team interact. He needs to understand that when they are interacting, higher intelligence, which is far superior to that of any single member in the team, is at work. Unfortunately executives and managers are not used to deliberately spending time with their subordinates. They need to change this behavior. Successful teams have always spent lot of time together learning how to be coherent teams. Spending time together does not just mean time spent physically together. It also includes time spent interacting through electronic means, fax, or phone. Frame Necessary Guidelines to Govern Team Behavior Guidelines help teams to bring about predictability in their behavior. Guidelines help teams to fulfill their purpose and achieve organizational goals. A leader can setup guidelines on issues such as attendance for meetings, matters to be discussed, the level of secrecy to be maintained, the analytic approach that is going to be followed, and the contribution of members to team's performance etc. Promote a Culture of Urgency and High Standards A leader must make his team members believe that the team is there to accomplish an urgent and worthwhile purpose. The more urgent and meaningful the team's purpose is, the better will be the team's performance. Teams generally perform better while they experience demanding and compelling situations. This is the reason why' organizations with high performance ethics can form successful to easily at short notice. Value Contribution and Positive Feedback Teams, like individuals need positive reinforcement. So a leader has to give positive feedback to his team members. Giving recognition is also important because it creates, and affirms desirable and new behaviors that improve team performance. A leader can give recognition and rewards in different ways. He can, for example, address the team directly about the urgency and importance of its mission. He can also offer direct compensation for contribution to the team. 18

Identify Tasks That Can be Accomplished Immediately Effective teams trace their cohesiveness and optimism to key performance oriented events. A leader has to set some challenging goals for his team in the initial stages. These goals should be such that they can be accomplished in the early stages. Let the Team Redefine Purpose and Goals A team can commit the mistake of assuming that all the information it needs is available in the collective experience and knowledge of its members. A leader must ensure that his team always has access to the latest information because this can help the team to understand its performance challenges better. This motivate understanding can further the team to reinvent and redefine its common purposes, goals, and approaches. 8. < TOP > Factors that affect disruptive innovation The general belief is that outcomes of innovation efforts are impossible to predict. But Clayton Christensen thinks that it is not so. According to him, even an undesirable outcome has a cause. Outcomes appear random because all the variables that affect successful innovation are not known. If these variables are understood and managed, innovation will be less risky. Christensen classifies the variables into four sets: taking root in disruption, the necessary scope to succeed, leveraging the right capabilities, and disrupting competitors, not customers. Taking Root in Disruption: Many previously successful companies that fall from their dominant position in a market are not badly managed. In fact, they are well managed. These companies listen to their best customers. They help them meet their needs. But they also commit themselves, willingly or unwillingly, to strategies that restrain their ability to Unleash disruptive innovations: they concentrate on the most profitable segments of the market, and make significant investments in them. Some new companies employ strategies to create sustaining innovations. They create better products than those offered by incumbents in the market, and sell these to the customers of the incumbent firms. But Christensen's research indicates that, this type of company is likely to succeed in only 6 out of 100 times. Degree of Integration: The degree of integration of the company's production process determines the nature, scope and. success of innovation. Highly integrated companies manufacture and sell proprietary components or products. They have a wide range of product lines and are into different businesses. When the product functionality is less than the customer's expectation of it, companies compete by producing better products. In such a scenario, engineers by to fix the pieces of their systems together in as efficient way as possible. This is to ensure the best performance with the available technology. At this stage technology is the barrier. Innovations at this point are aimed at pushing back the technological barriers. Integrated firms are better placed to address this task; they do not need to convince or force the suppliers of components to innovate as in the case of non-integrated firms. For example, it was only when IBM, Apple Computers, RCA, Xerox, and AT&T became fully integrated companies, that they were able to address technological challenges systematically. Leveraging the Right Capabilities: Disruptive innovations fail to materialize when the organization fails to create the right environment for them Disruptive innovations fail under three circumstances: 1) When the organization has limited resources to support them. Inadequate resources might disallow innovations. 2) Organizations are limited by their processes. Unsuitable processes can restrain innovations from becoming effective. 3) The organization's values could also be hostile to disruptive innovation. Bringing simplicity and convenience to customers: A disruptive innovation succeeds when it brings simplicity and convenience into what the customer is doing. It must minimize the need for customers to change their lives in easy they are not inclined to do. An innovation should aim at disrupting the competitors and not the customers. In order to find what the customer is doing observation is necessary. A popular method to know what customer is doing to conduct market research.
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