framewoeks for manager

ARTICLE #2

Applied Insight

Tools, techniques, and framewoeks for managers

Putting leadership development at the heart of a major operations-improvement effort paid big dividends for a global industrial company.

Few companies can avoid big, periodic changes in the guts of their business. Whatever the cause- market maturation, a tough macro-economic environment, creeping costs, competitive struggles, or just a desire to improve — the potential responses are familiar: restructure supply chains; rethink relationships among sales, marketing, and other functions; boost the efficiency of manufacturing or service operations (or sometimes close them). Such changes start at the top and demand a relentless focus on nitty-gritty business details from leaders up and down the line.

Too often, however, senior executives overlook the “softer” skills their leaders will need to disseminate changes throughout the organization and make them stick. These skills include the ability to keep managers and workers inspired when they feel overwhelmed, to promote collaboration across organizational boundaries, or to help managers embrace change programs through dialogue, not dictation.

One global industrial company tackled these challenges by placing leadership development at the center of a major operational-improvement program that involved deploying a new production system across 200 plants around the world. While the need for operational change was clear — the performance of the company’s factories was inconsistent and in many cases far below that of competitors in terms of efficiency, productivity, and cost — so too were the organizational obstacles. Drives for improvement, for example, carried a stigma of incompetence; current performance was considered “good enough”; conflict tended to be passive-aggressive or was avoided entirely; and shop floor employees felt that they were treated as cogs and that their supervisors were enforcers. The effect of all this on employees was disengagement, a lack of trust in senior management, and a pervasive fear of making mistakes — a worry reinforced by the company’s strong culture of safety and of risk aversion.

These challenges were impossible to ignore, and that was probably a blessing in disguise: the senior team had to look beyond technical improvements and focus on helping the company’s leaders to master the personal behavioral changes needed to support the operational ones. To that end, the company mounted an intense, immersive, and individualized leadership program.1

The results are still unfolding, but after three years the company estimates that the improvement program has already boosted annual pretax operating income by about $1.5 billion a year. Furthermore, executives see the new leadership behavior as crucial to that ongoing success. Indeed, the senior executive who launched the program believes that without the inclusion of leadership development, it would have made only half the impact it actually did. She adds that the company has seen a tenfold return on its investment in each of the dozens of leaders trained thus far.

Scenes from the front lines of change

In this article, we’ll share the stories of three such leaders and examine how the changes they made in their leadership styles contributed to improved business results. Then we’ll step back and offer a few general leadership-development principles that we hope will be useful to other organizations contemplating large- scale, transformational changes.

Making sourcing more efficient

An executive we’ll call Annie is the company’s director of sourcing and logistics. Her charge: to help the sourcing operation improve its performance, from the mid- to the first quartile, without additional resources. Annie and her supervisor (the group’s vice president) concluded that the way to achieve this goal was to create a single global sourcing system instead of relying on the existing patchwork of regional and divisional ones. This approach would improve efficiency, take advantage of cheaper sources, and cut interaction costs.

But that meant engaging a global group of stakeholders, many of whom preferred acting independently. Some even mistrusted one another. The vice president knew that this problem would be very difficult for Annie; as he put it, “she used to move too fast, and people would miss her train.” Somehow, Annie had to build the skills — and quickly — to engage her colleagues on a journey where turning back was not an option.

Annie realized she needed to engage them not just intellectually but also emotionally, so they would become committed to the new approach and understand why it was better, even though many saw it as threatening to their autonomy and their ability to tailor services to local needs. Annie also recognized that she had a strong tendency to do all the work herself to ensure that it was done quickly and correctly. Learning to overcome that inclination would help her to articulate a more inspiring vision and bring more people on board. Along with a colleague who was going through leadership training at the same time, Annie worked on a number of skills, such as how to keep discussions focused on solutions and how to build on existing strengths to overcome resistance. She also developed 20 coaching vignettes, which helped her bring to life the mind-sets and behavior that had to change. These moves helped Annie establish the new vocabulary she needed to encourage colleagues to identify and eliminate issues that were getting in the way of the new sourcing approach.

As more than 1,000 employees across four regions adopted the new system, operational efficiencies quickly started to appear. What’s more, the effort encouraged interpersonal interactions that helped some employees overcome longstanding barriers to collaboration. The vice president highlighted the way the effort had encouraged North American employees to begin openly addressing issues they had with colleagues at a logistics service center in India, for example, and to move beyond mistrusting the workers there and resenting them for holding “exported jobs.” Such engagement skills spread across the network and began to take hold.

As collaboration improved, the cost savings grew: within 18 months, the sourcing group had eliminated the need for 50 positions (and helped the workers who held them to get new jobs elsewhere in the company). In the same time period, benchmarking suggested that the group as a whole had achieved first-quartile performance levels. What’s more, the experience strengthened Annie as a manager. “My answer might have been right before,” she says, “but it got richer.… I feel more confident. It is not about needing to prove myself anymore. I have much greater range and depth of influence.”

Boosting yields at a factory

Conor, as we’ll call one European plant manager, needed to boost yields using the company’s new production system. In the past, the industrial giant would have assigned engineers steeped in lean production or Six Sigma to observe the shop floor, gather data, and present a series of improvements. Conor would then have told plant employees to implement the changes, while he gauged the results — a method consistent with his own instinctive command-and-control approach to leadership. But Conor and his superiors quickly realized that the old way wouldn’t succeed: only employees who actually did the work could identify the full range of efficiency improvements necessary to meet the operational targets, and no attempt to get them to do so would be taken seriously unless Conor and his line leaders were more collaborative.

Workers were skeptical. A survey taken at about this time (in 2009) showed that plant workers saw Conor and his team as distant and untrustworthy. Moreover, the company couldn’t use salary increases or overtime to boost morale, because of the ongoing global economic crisis.

Conor’s leadership training gave him an opportunity to reflect on the situation and provided simple steps he could take to improve it. He began by getting out of his office, visiting the shop floor, and really listening to the workers talk about their day-to-day experiences, their workflows, how their machines functioned, and where things went wrong. They’d kept all this information from him before. He made a point of starting meetings by inviting those present to speak, in part to encourage the group to find collective solutions to its problems.

Conor explained: “As I shared what I thought and felt more openly, I started to notice things I had not been aware of, as other people became more open. We’d had the lean tools and good technology for a long time. Transparency and openness were the real breakthrough.” As the new atmosphere took hold, workers began pointing out minor problems and additional areas for improvement specific to their corners of the plant; within just a few months its yields increased to 91 percent, from 87 percent. Today, yields run at 93 percent.

Closing a plant

Pierre, as we’ll call him, was managing a plant in France during the darkest days of the global financial crisis. His plant was soon to close as demand from several of its core customers went into a massive and seemingly irreversible tailspin. The company was in a tricky spot: it needed the know-how of its French workers to help transfer operations to a new production location in another country, and despite its customers’ problems it still had €20 million worth of orders to fulfill before the plant closed. Meanwhile, tensions were running high in France: other companies’ plant closures had sparked protests that in some cases led to violent reactions from employees. Given the charged situation, most companies were not telling workers about plant closures until the last minute.

Pierre was understandably nervous as he went through leadership training, where he focused intently on topics such as finding the courage to use honesty when having difficult conversations, as well as the value of empathic engagement. After a lengthy debate among company executives, Pierre decided to approach the situation with those values in mind. He announced the plant closing nine months before it would take place and was open with employees about his own fears. Pierre’s authenticity struck a chord by giving voice to everyone’s thoughts and feelings. Moreover, throughout the process of closing the plant, Pierre recounts, he spent some 60 percent of his time on personal issues, most notably working with his subordinates to assist the displaced workers in finding new jobs and providing them with individual support and mentoring (something other companies weren’t doing). He spent only about 40 percent on business issues related to the closure.

This honest engagement worked. Over the next nine months, the plant stayed open and fulfilled its orders, even as its workers ensured that their replacements in the new plant had the information they needed to carry on. It was the only plant in the industry to avoid violence and lockouts.

Lessons observed

While every change program is unique, the experiences of the industrial company’s managers offer insights into many of the factors that, we find, make it possible to sustain a profound transformation. Far too often, leaders ask everyone else to change, but in reality this usually isn’t possible until they firstchange themselves.

Tie training to business goals.

Leadership training can seem vaporous when not applied to actual problems in the workplace. The industrial company’s focus on teaching Pierre to have courageous conversations just as the ability to do so would be useful, for instance, was crucial as Pierre made arrangements to close his plant. In the words of another senior executive we spoke with, “If this were just a social experiment, it would be a waste of time. People need a ‘big, hairy goal’ and a context to apply these ideas.”

Build on strengths. The company chose to train managers who were influential in areas crucial to the overall transformation and already had some of the desired behavior — in essence, “positive deviants.” The training itself focused on personal mastery, such as learning to recognize and shift limiting mind-sets, turning difficult conversations into learning opportunities, and building on existing interpersonal strengths and managerial optimism to help broadly engage the organization.

Ensure sponsorship. Giving training participants access to formal senior-executive sponsors who can tell them hard truths is vital in helping participants to change how they lead. Moreover, the relationship often benefits the sponsor too. The operations vice president who encouraged Annie, for example, later asked her to teach him and his executive team some of the skills she had learned during her training.

Create networks of change leaders. Change programs falter when early successes remain isolated inorganizational silos. To combat this problem, the industrial company deployed its leadership-development program globally to create a critical mass of leaders who shared the same vocabulary and could collaborate across geographic and organizational boundaries more effectively.

When Annie ran into trouble implementing the changes in some of the company’s locations in Asia, the personal network she’d created came to her rescue. A plant manager from Brazil, who had gone through the training with Annie, didn’t hesitate to get on a plane and spend a week helping the Asian supply chain leaders work through their problems. The company allowed him to do so even though this visit had nothing to do with his formal job responsibilities, thus sending an important signal that these changeswere important.

Another tactic the company employed was the creation of formal “mini-advisory boards”: groups of six executives, with diverse cultural and business perspectives, who went through leadership training together. The mutual trust these teammates developed made them good coaches for one another. Pierre, for example, reported getting useful advice from his board as he finalized his plans to talk with his plant employees. The boards also provide much-needed emotional support: “The hardest part of being at the forefront of change is just putting your shoes on every day,” noted one manager we talked to. “Getting together helps me do that.”

ARTICLE #2

Scholars and practitioners have identified transformational leadership and organizational culture as important factors that influence the development of learning organization. Yet, few studies have empirically examined the impact of transformational leadership and organizational culture on learning organization. This study proposes hypotheses to understand the impact of transformational leadership and organizational culture on the development of learning organization. Data was collected from the pharmaceutical sector and a comparison was drawn between India and Nepal. Results indicate transformational leadership and organizational culture have a positive influence in the development of learning organization. The implication of the findings and possible directions for future research are discussed.

Keywords: Learning Organization, Transformational Leadership, Generative and Adaptive Organizational Culture, Pharmaceutical Sector, India and Nepal.

INTRODUCTION

The concept of Learning Organization has received heightened attention from scholars and others in recent years. As per Jones and Hendry (1994) the term “Learning Organization” seems to have been coined around 1988 by Hayes et. al. in the USA and Pedlar et. al. in the UK but the origin of the word in the literature can be traced back to the 1920s. But the concept attracted much attention in the 1990’s when Peter Senge (1994) popularized this concept in his landmark book “The Fifth Discipline.”

In this era of competitive pressure, learning organization has gained popularity as the capacity for change and improvement is linked with learning and to obtain and sustain competitive advantage, organizations must enhance their learning capability and must be able to learn better and faster from their successes and failures, from within and from outside (Marquardt, 1996).

The extant literature has identified a number of factors that influence the development of learning organization. Fiol & Lyles (1985) suggest that the organization culture, the strategy, organization structure and the environment in which the organization operates influence the development of learning organization. Caudron (1993), Schien (1993), Garvin (1993), Marquardt (1996) have identified the important role culture plays in creating a learning organization.

Senge (1994) has identified a different role for leaders of learning organization. Similarly, many authors have emphasized the important role leadership plays in the development of the learning organization (Johnson, 1998; Prewitt, 2003; Sadler, 2003). The concept of culture is also one of the major variable and essential ingrethents in the development of a learning organization. Barrett (1995), Hershey et. al. (2000) suggest that a learning culturecharacterized by continuous learning from experience, experimentation, questioning and dialogue, is the only way to sustain a competitive advantage over the long term in an increasingly complex and turbulent environment.

Against this background, this article aims to understand the leadership style and the cultural transformation required to facilitate the transition to a learning organization. The type of leadership considered in this study is “transformational leadership”. Transformational leadership has been the subject of extensive research in the past decade but little research effort has been exerted to study the influence of transformational leadership in the development of learning organization. Much has been researched about organizational culture and change. However, much less effort has been expended in studying the cultural transformation required in organizations making the transition to a learning organization.

In view of the current state of literature, this article seeks to study the relationship between transformationalleadership style and learning organization as well as the relationship between organizational culture and learning organization. It aims to identify the key variables that will predict the dimensions of learning organization based on transformational leadership and organizational culture dimensions. It also seeks to investigate the difference in the development of learning organization between India and Nepal. To address these issues the article first highlights the role of leadership and organizational culture and provides an overview of the relevant literature as the basis for specifying the hypotheses. Then the method of the study is discussed, followed by presentation and discussion of the findings. The final section provides a summary and discusses implications for future research.

ROLE OF LEADERSHIP IN LEARNING ORGANIZATION

The competitive pressures of the present environment necessitates the need to focus on risk-taking and creativity, therefore traditional management styles which insist on compliance and enforcement of rules are now considered inappropriate. In such a scenario, developing new competencies and capabilities has gained importance and this places learning at the center of organizations. This has led to the development of new organizational forms known as “Learning Organization” and these organizations are more adaptive and flexible and tap the learning of individuals to improve organizational performance and enhance organizational learning.

Learning organization hence requires a leader who brings out the best in the followers, leadership that is more adaptive and flexible. Senge identified three leadership roles that are important for building a learning organization. “Leaders as designers”, “leaders as teachers”, and the “leaders as stewards”. Similarly, Marquardt (1996) identified six leadership roles in a learning organization. He considers the role of “instructor”, “coach” and “mentor” as the most important aspect of leadership in learning organization. In the role of “knowledge managers”, “colearners and model for learning”, leaders are learners themselves. As “architect and designers” and “coordinator” they are responsible for creating a learning environment motivating followers to perform at their best. Johnson (2002) considers visioning, empowerment and leader’s role in learning as crucial skills for leaders of learning organization.

ROLE OF ORGANIZATIONAL CULTURE IN LEARNING ORGANIZATION

At present times when the environment is highly competitive, where markets and products proliferate rapidly, a strong culture, which does not encourage innovation, proves to be a disadvantage to a firm. Organizations need to be flexible, adaptive and innovative to survive in this changing environment. The focus on flexibility, adaptability and innovation falls mainly within the domain of organizational culture, since organizational culture is integral to effective change initiatives and strategies (Bluedorn and Lundgren, 1993). The need for adaptive, flexible and innovative organizational culture within organizations in response to the turbulence and uncertainty in theorganizational environment has long been suggested. Kotter and Heskett (1992) identified the adaptive culture as the ‘optimal’ organizational culture and stated “only cultures that can help organizations anticipate and adapt to environmental change will be associated with superior performance over long periods of time”. Bass and Avolio (1993) also highlighted the importance of adaptive and flexible organizational culture and distinguish between transformational and transactional organizational culture. Transformational culture refers to those organizational cultures supportive of innovation, transformation and change and transactional cultures as those that maintain the status quo, are based on pre-established rules and structures, and inspire limited levels of commitment and motivation.

Research evidence suggests significant positive correlations between transformational cultures and desirableorganizational and individual outcomes (Parry and Proctor, 2000). An essential factor that adds value in transformational organizational culture is the degree to which it supports and promotes innovation and entrepreneurial activity. Within a rapidly changing and turbulent environment, innovation plays a crucial part in the long-term survival of an organization. In contrast, a “pure” transactional culture focuses on everything in terms of explicit and implicit contractual relationships’ (Bass and Avolio, 1993). They state that, in this sort of culture, individualism is very strong and therefore a concern for self-interest, rather than organizational aims, dominates. Thus, commitment is often short-term, existing to the extent of rewards provided by the organization (Bass, 1998). Transactional cultures has been found to correlate significantly and negatively with organizational and leadershipoutcomes (Parry and Proctor, 2000).

ROLE OF TRANSFORMATIONAL LEADERSHIP IN LEARNING ORGANIZATION

Leadership takes on a different role in a learning organization. To achieve the vision of learning organizationleadership capabilities must be developed. As identified by various authors’ leaders in learning organization need to communicate a clear and compelling vision of the future organization to obtain commitment from the organizationalmembers, encourage followers to respond to environmental uncertainty through creativity and innovativeness, change their mental models and encourage them to seek learning oriented behaviors and embrace continuous learning. These roles are suitable to a transformational leader as they are champions of technological innovation (Howell and Higgins, 1990), achieve successful transformation of an organization by aligning the organizationalvision, organizational design and management practices (Appelbaum et. al., 1998), change long held assumptions, values and beliefs and encourage employees to learn new behaviors (LeBrasseur et. al., 2002). Transformational leader are change agents, who take the responsibility for revitalizing an organization. They define the need for change, create new visions, mobilize commitment to those visions and ultimately transform an organization.

The present day environmental pressure necessitates the transformation to a learning organization. Changing from a traditional organization to a learning organization aims to transform traditional organization into a more responsive and effective organization that is able to withstand and survive the environmental pressure and hence improve its performance in the face of the turbulent environment. Environmental uncertainties are stressful to followers, as they do not understand the direction of change, the potential impact of the change, and the success of a particular response. Under such conditions, the idealized vision articulated by the leader provides a challenge and motivating force for change to the followers as it represents a perspective shared by all the followers and promises to meet their hopes and aspirations (Conger and Kanungo, 1987; Waldman et. al., 2001). This age of rapid change, calls for a new kind of leadership to enable organizations to transform and cope with the changes (Tichy and Ulrich, 1984). This new brand of leaders must have the ability to help the organization develop a vision of what it can be, to mobilize the organization to accept and work towards achieving the new vision, and to institutionalize the changes that must last over time. These new leaders are called transformational leaders and learning organizations require the leadership of the transformational leader who enables the members to make sense of the environmental uncertainty by continuous learning through the mechanism of organizational learning. A transformational leader with a shared vision and effective communication can enable members to understand the goals and aspirations of the learning organization, the importance of organizational learning in the transformation process and thus change their mental models and encourage them to seek learning-oriented behaviors and embrace continuous learning.

On the basis of the above discussions the following hypothesis has been specified as the basis for focusing the empirical investigation:

Hypothesis 1: Transformational leadership has a significant and positive influence in building a learning organization.

ROLE OF ADAPTIVE AND GENERATIVE ORGANIZATIONAL CULTURE AND LEARNING ORGANIZATION

To make the transition to a learning organization, organizations require a culture that supports and facilitates this transformation. Schien, (1996) considers three cultures to be present in every organization: the operator culture, the engineering culture and the executive culture. If an organization attempts to reinvent itself and learn in a generative way then there has to be proper alignment among these three cultures otherwise the learning initiatives will be short lived. Through “dialogue” organizations can achieve mutual understanding among the three culturesand promote the value of trust, openness and communication to enhance learning. Paton and McCalman (2000) also consider open dialogue, experimentation and risk-taking as prerequisites to a learning culture.

The challenge for organizations in this present environment is to create contexts in which members continually learn and experiment, are innovative and strive for the creation of new ideas and new products, as it is not sufficient for organizations to respond, adapt and cope with the pressures of change (Barrett, 1995). The lifeblood of a learning organization is a free and open system for communicating information and knowledge as it encourages knowledge creation and enhances learning (Hill, 1996). Experiments are catalyst for creating new knowledge and learning andorganizational members should be encouraged to conduct experiments no matter what the outcome. McGiIl et. al. (1992) considers experimentation and risk taking as important values that promote a learning culture.

The prior literature provides the basis for expecting a relationship between organizational culture and learning organization and the following hypothesis has been specified as the basis for focusing the empirical investigation.

Hypothesis 2: A generative and adaptive culture will have a significant and positive relationship with the dimensions of a learning organization.

This study also seeks to investigate the difference in the development of learning organization between India and Nepal and the following hypothesis has been specified as the basis for focusing the empirical investigation.

Hypothesis 3: There will be no significant difference among the various dimensions of learning organization between India and Nepal.

The theoretical model depicting the framework for the study and the relationship among the hypothesis is shown in Figure 1 .

METHOD

Sample and Procedures

This is a comparative study designed to compare selected organizations in the pharmaceutical sector between Nepal and India. This industry was chosen for the study because improving organizational performance through learning has been a critical factor for company survival due to the industry’s rapid technological advances and highly competitive markets.

Four organizations each, from the pharmaceutical industry, were selected in both Nepal and India. Both countries are developing economies. In the past decade, India has advanced at an alarming rate and struggled to build and maintain sustainable competitive advantage in the present global scenario. Nepal is undergoing political and economic transformation and is opening up its economy to Foreign Direct Investment and Multi-nationals. Therefore, it was thought useful to compare selected companies in the two countries to see if there exist any differences in the development of learning organization and to explore how successful practices of one country could be utilized in the other countries.

Data was collected through a survey instrument and the sample consisted of a cross section of people including senior executives and managerial personnel from all the departments of the participating organizations. The sampling technique employed is convenience based non-probability sampling. According to Churchill (1979), this type of sampling can be adopted when the emphasis is on exploratory research. The researcher delivered the questionnaires to the organizations, in both the countries, personally and the completed questionnaires were collected from the respondents in the same manner. The respondents were assured of confidentiality and anonymity.

Measures

Transformational leadership was measured using a 28-item scale developed by Podsakoff et. al. (1990). This scale measures leadership orientation based on the dimensions of articulate vision, role model, foster goal acceptance, performance expectations, individual support, intellectual stimulation and transactional leader behavior. All items were rated on a 4-point scale with 1= “does not apply” and 4= “applies to a great extent.”

Organizational culture was measured using OCTAPACE developed by Pareek (1973). The OCTAPACE profile is a 40-item instrument that gives the profile of organization’s ethos in eight values (Openness, Confrontation, Trust, Authenticity, Proaction, Autonomy, Collaboration, Experimenting). The instrument contains two parts. In part one, values are stated in items 1 to 24 (three statements each of the eight values), and the respondents were required to check (on a 4-point scale ranging from 1= “not valued in the organization” to 4= “very highly valued in the organization”). Part two contains sixteen statements on beliefs, two each for eight values, and the respondent checks (on a 4-point scale ranging from 1= “few or no people in this organization share this belief to 4= “this belief is well shared in this organization “) how much each item is valued in her/his organization.

Learning Organization was measured using the Learning Organization Profile developed by Marquadt (1996). The profile is a 50-item instrument assessing five dimensions; learning dynamics, organization transformation, people empowerment, knowledge management, and technology application). All items were rated on a 4-point scale ranging from 1 does not apply) to 4 (applies to a great extent).

Data Analysis

The hypotheses were tested using t-tests, correlational analysis and multiple regression analysis. To determine whether significant differences existed in the development of learning organization t-test was computed. In order to understand the relationship between the learning organization and the various dimensions of transformationalleadership as well as organizational culture Pearson’s Product Moment Correlation was computed. Regression is the determination of statistical relationship between two or more variables. Learning Organization was taken as the dependent or criterion variable and transformational leadership and organizational culture as the independent variables or predictor variables. Stepwise Multiple Regression was used.

RESULTS

Preliminary Analysis

First, a preliminary analysis was done with all of the survey items to test the scales’ psychometric properties. Those items that demonstrated adequate reliability (Cronbach alphas of above .60) were retained. Based on this analysis 25 items were retained in the Learning Organization Profile. All the items were retained in the transformationalleadership measure and OCTAPACE as these measures had adequate reliability. Intercorrelations also showed generally positive relationships.

Results and Findings

T-test of difference was conducted between Nepal and India on all the dimensions of learning organization. The findings suggested that organizations in the pharmaceutical sector in India showed the existence of some subsystems of the learning organization (learning dynamics, organization transformation, and technology application) as compared to Nepal.

Transforming to learning organization involves incorporating the five subsystems of the learning organization: learning dynamics, organization transformation, people empowerment, knowledge management and technology application (Marquadt, 1996). Attempting to become a learning organization without all five of these dimensions will be insufficient. If any of the subsystem is weak or absent, the effectiveness of the other subsystems is significantly weakened. India showed significant differences only in the dimension of learning dynamics, organization transformation and technology application. Though organizations in India did understand the importance of learning, the transformation was incomplete as the other two subsystems, people empowerment and knowledge management, was not present. The organizations in the pharmaceutical sector in Nepal are yet to understand the importance of learning and make the transition to a learning organization.

Hypothesis 3 was partially supported as no difference was found in the dimension of people empowerment and knowledge management between Nepal and India.

The result of correlational analysis shows that in India all the dimensions of transformational leadership, except for role model, show a significant and positive correlation with the dimension of learning organization. The dimension of role model did not show any significant correlation. In Nepal, too all the dimensions showed significant and positive correlations except for the dimension of role model, which did not show any significant correlation. Hypothesis 1 was accepted. With respect to organizational culture, in both the countries, all the dimensions of organizational culturewere significantly and positively related to learning organization. Except for the dimension of autonomy, that showed a negative but insignificant correlation in India whereas in Nepal it showed no significant correlation. Hypothesis 2 was also accepted.

To gain an insight into the relationships further between the independent and dependent variables and to identify the predictive relationships between the two sets of variables, if any, multiple regression analysis was done. There are two sets of equation. In the first set independent variables are the dimensions of transformational leadership. The dependent variable is the dimension of learning organization. Results indicate that in India foster acceptance of group goals accounted for 25.5% of the variance with a ß- coefficient of .505. An increase of 5.1% was observed when performance expectation entered in the equation taking the total variance to 30.9% with a ßcoefficient of .254. None of the other variables entered in the equation due to low level of tolerance. In Nepal foster acceptance of goals accounted for 37.5% of the variance with ß coefficient of .613. An increase of 12% was observed when individual consideration was entered in the equation taking the variance to 49.5% with a ß coefficient of .359. The other variables did not enter into the equation.

For the second set of equation, the independent variable is the dimension of organizational culture while the dependent variable is the dimension of learning organization. In India, it was observed openness accounted for 35.5% of the variance with a ß coefficient of .596. An increase of 10.6% was observed when proaction entered in the equation with a ß coefficient of .344. Finally, authenticity accounted for an increase of 3.7% taking the total variance to 49.8% with a negative ß coefficient of .204. None of the other variables entered the equation. In Nepal, openness accounted for 53.4% of the variance with a ß coefficient of .731. An increase of 7.5% was observed when proaction entered in the equation taking the total variance to 60.9% with a ß coefficient of .355. None of the other variables entered the equation.

DISCUSSION AND CONCLUSIONS

Transforming to learning organization has become an organizational imperative in the 21s1 century. Prior research has suggested that transformational leadership and a generative and adaptive culture are one of the most important factors that influence the development of learning organization. Based on prior research two hypotheses were proposed to understand the relationship between transformational leadership and learning organization and alsoorganizational culture and learning organization. A third hypothesis was proposed to investigate and compare if there existed any difference in the development of learning organization in Nepal and India.

Findings based on Nepalese and Indian organizations in the telecommunication sector provide support for the expectation that transformational leaders have a positive influence in the development of a learning organization; a generative and adaptive organizational culture also has a positive influence in the development of a learning organization. A difference was found in the development of learning organization in Nepal and India and it was observed that some of the subsystems were found to be present in the organizations in India. However, attempting to become learning organization without incorporating all five systems is insufficient. The Pharmaceutical sector in India does understand the importance of learning but the absence of two subsystems weakened the efforts. Though the pharmaceutical sector in Nepal is facing stiff competition, they do not focus on learning to improve performance. The focus is more on short-term gains rather than long-term growth and survival.

Findings also suggest that leaders in both the countries under study do not demonstrate transformational leadershipcharacteristics. Though there is support for transformational leaders having a positive impact on the development of a learning organization, this could not be seen in both the countries under study. The reason for this could be the impact national culture has on the leadership style and influence tactics used by organizational leaders. The sample companies for the study were from Nepal and India where cultural values are relatively high in power distance. Pasa (2000) found in his study that leaders in cultures, which are high on collectivism and power distance value dimension, use the more directive forms of influencing tactics. The frequently perceived influence behaviors in suchcultures are “granted power/authority”, “taking over responsibility”, “rationalizing and involving” and “pressure”. The leaders use these influence behaviors to obtain obethence and compliance of followers. This is seen in the sample companies in both the countries where the leaders expected followers to comply rather than act on their own. This differs from the transformational leaders who create followers who are capable of handling challenges on their own. Since many aspects of leadership behavior can be learned the findings suggest that to facilitate die transition organizations should encourage managers to develop and display transformational leadership behaviors through training and mentoring processes.

Findings suggest that organizational culture in both the countries is not conducive to learning. In both the countries, openness and proaction contributed positively to predict learning organization. However, these are not the only cultural values that support and facilitate learning. Hence, the organizational culture cannot be considered as conducive to learning in both the countries. Though mere is support in the literature that organizational culture has an important role to play in the development of a learning organization, the organizational culture of the sample companies in both the countries did not support learning. While this study did not examine the dual link betweenleadership and culture, there is support in the literature for this dual link. Leaders shape the culture of an organization and the organizational culture also influences the leadership style of individuals and teams (Ogbonna and Harris, 2000). Bass and Avolio (1993) suggest that transformational leaders help to develop a transfonnationalculture and transformational cultures are necessary to create a flexible and adaptive culture, conducive to ongoing change and which promotes organizational learning. In both the countries under study, it is seen that the leaders do not demonstrate transfonnational leadership characteristics. As a result, they do not favor a generative and adaptiveculture, which is supportive of learning among organizational members.

The current findings also have several limitations. Firstly, the sample size could be expanded, as data collected from a larger number of companies will permit more powerful hypothesis test. This study was based on self-report data and so the findings may be biased by common method variance and spurious cause/effect inferences. Common method variance is a potential problem whenever data are collected from a single source. Having a single respondent for each variable does not allow to test with-in group agreement. This could be an important issue because the extant literature has indicated that different followers/employees may have different perceptions about their superior’sleadership style and organizational culture (Klein and House, 1995).

The generalizations occurring from this study are more conducive and limited to a particular group of employees who have been included in the study. In other words, the limitation comes from the sampling technique used, which is non-probability based convenience sampling. The major inherent drawback of this technique is that it does not provide the researcher with any kind of sound foundation for making general inferences about the population from which this sample is drawn.

This study has highlighted the importance of leadership and organizational culture. Besides these two factors, there are a number of other factors that influence the development of learning organization. A study of other factors would provide a fruitful insight into the development of learning organization. It would also be useful to study the interaction effect of transformational leadership and organizational culture and its impact on learning organization, which was not dealt with in this study

ARTICLE #3

Romanian managers and employees regarding this subject. Moreover, we also tried

to see how are managers motivating and rewarding their employee’s initiative and

creative ideas and how do employees feel about the changes that take place inside

the organization.

1. The main roles played in a change process

Change is the most frequent phenomenon of today’s reality and can be

found everywhere, so a good knowledge of how this process can be managed is

very important, no matter if we refer to organizations or to people. The pace of

change is accelerating continuously, and there is no perspective for it to slow down

very soon.

Managers can no longer focus on business as they usually did because the

pressure of the environment force organizations to adjust in order to survive and

prosper, and the main challenge is to manage change efficiently (Westover, 2010).

Even if change can be found everywhere, managers still have a delay on

responding properly and this behavior generate low results for their organizations

(Barbu, Năstase, 2010).

A vision for change is essential in order to deal with the environment’s

complexity, but not all changes should be reactive and done only when the current

situation of the organization is as bad as that changes become inevitable. Leaders

are the ones that should play the main role inside the organization not only because

of their long term vision and disposition for change, but also because they can

reduce the resistance to change by involving as many people as possible in this

process.

A strategic leader has a global vision of the organization as a whole, long

term thinking despite the numberless uncertainties of the environment and

encourages people to come with new ideas in order to make change possible inside

the organization (Năstase, 2010).

Every change takes time, effort and needs the support of the whole

organization. The role that employees have in a process of change is crucial, and

one of the main things that should be done in order to avoid crisis and resistance i

to make sure that every member of the organization is involved in the process

(Stanleigh, 2008; Smith, 2010).

John Kotter emphasized the importance of a good vision, a sense for

urgency and a strong team as the key factors of success in a change process,

arguing that most of the transformation efforts fail because managers are not aware

that a change process goes through a series of phases that require a considerable

length of time (Kotter, 1995).

In the classical organizations, the supposition that managers have much

more knowledge compared to their subordinates make them feel entitled to make

decisions without consulting or involving employees (Bibu et al., 2011). This

perception is also valid when we refer to change, so instead of being a force that

drives it, employees are rather a force of resistance to change. an emotional reaction or a behavioral one that has to do with the feeling of

losing control and uncertainty (Foster, 2010). Employees are the most powerful

source of resistance because they don’t feel involved and consulted when a change

occurs, so they try to reject the change as much as possible.

In most cases, the main perception is that resistance is something

destructive for the organization, affecting the success of any change effort and

making the change process even harder than it already is (Sweers, Desouza, 2010;

Smollan, 2011; Agboola, Salawu, 2011).

Even if in some situations resistance can have positive effects upon a

process of change, if that change is not appropriate for the organization, there is

still need to reduce this phenomenon in order to achieve the goals in a more

efficient way (Predişcan, Braduşanu, Roiban, 2013).

The roles played in a process of change are different, and managers,

leaders and employees should all be involved in the process of identifying the need

for change as being opportune in order to increase support for change and obtain

the desired results after the process is finished.

2. The role of Romanian employees in a process of change

There are many differences between organizations and the role that

employees may have regarding change depends first of all of the view that

managers have related to this subject and second of the existing management style

inside that particular organization.

In order to see what is the contribution of the Romanian employees in a

process of change we have tried first to establish appropriate research

methodologies, then we have identified the sample and in the end after gathering

and analyzing the data, we have made the interpretation.

2.1 Research methodology

The objective of this article is to show the results of the analysis regarding . he role that employees have in the process of change identification and

implementation, therefore, we considered appropriate to use a quantitative research

method for gathering the information, more specifically a questionnaire-based

survey, as well as a qualitative method by using a semi structured interview.

The process of data gathering was performed in June – July 2013,

exclusively online on various Romanian organizations from different industries

such as services, trading, manufacturing and public services, and it was addressed

to both managers and employees, in order to see which are the main views

regarding the topic.

In order to see which are the main initiators of change and what are the

reasons for them to implement change, we have formulated two different

hypotheses as follows:

H1: Most changes come from managers and owners; The two hypotheses mentioned above are based on the premise that

employees’ involvement in a process of change is minor, due to the fact that

managers are not aware of the advantages that can be provided by new creative

ideas and solutions of change generated by their staff.

2.2 Data analysis and interpretation

The information collected from the questionnaires, and the interviews was

processed using SPSS 17.

Of the 257 questionnaires distributed, 218 were validated and the

respondents were mainly managers from different levels (72% from a total of 218).

The percentage of the employees that were included in the study was 28%.

For a better understanding of how the employees are involved in a process

of change, we will present the results for each hypothesis.

H1: Most changes come from managers and owners

For the validation of this hypothesis, we have tried to identify how

frequent the proposals of improvement coming from employees, managers and

owners are leading to changes inside the organization. The results were: in 37.60%

of cases rarely the employees proposals lead to change, in 46.80% of cases the

proposals coming from owners are often a source of change while 55% of the

respondents consider that change ideas coming from managers are always

materialized. Thereby the hypothesis is valid.

The main reason why managers are the initiators of change comes from

their responsibility inside the organization which is to make sure that goals are

reached efficiently according to the strategy, yet this is not a reason strong enough. or them to be the only ones identifying the need for change.

Owners have the power to participate and decide on the changes that will

be made, as a result of their investment to the organization capital so the fact that

their opinion regarding change is important, shouldn’t be a surprise.

The minimum involvement of the employees for most of the Romanian

organizations can be explained by the fact that in our country, the power is still

very centralized, especially in small and medium sized companies, and the process

of delegation is not fully and accurately implemented. Most managers don’t seem

to understand the importance of encouraging employee participation not only for

their ideas of change that can be very effective but also for the fact that any change

needs the support of as many people as possible in order to reduce the inevitable

resistance that comes with it.

QUESTION #4 How can you bridge the gap between the four different generations in the labor market? What strategies can you implement to ensure solidarity and productivity?

QUESTION #5

Describe your dream organization and its organizational structure.