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Summative Essay 74113118
Summative Essay 74113118
Module Title:
Module Code:
BS4S16-V1-15767
Tutor Name:
Yianna Orphanidou
Student Name:
74113118
Date of Submission:
Assignment Title:
to a contemporary organization.
1
INTRODUCTION
Utilizing a secondary research method, this summative essay will carry out a detailed
to the leadership of Chief Executive Officer of the Standard Oil Company, John Davison
Rockefeller. The essay will carry out a case study of the life of John D. Rockefeller as a
experiences, while considering the effect this had on shaping his leadership style as the
CEO of the Standard Oil Company. The second part of this essay will critically evaluate
the human relations and bureaucracy theories of management, critiquing these theories
and applying them to the current practice in a contemporary organization, Pact Inc. Pact
The not-for-profit sector which is also popularly known as the third sector (with
government knows as the first and businesses known as the second) consists of a set
of voluntary, private and charitable organizations and associations (Anheier, 2005). This
sector has gained increasing prominence over the years, giving birth to organizations
that are solely concerned with making social impact mostly in the areas of welfare
organizational goals, hence the need for proper and effective management and
States of America and operational in over 40 countries in Africa, Asia, Europe and the
Americas. Pact’s organizational vision is to create a world, where the people they serve
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are heard, capable and vibrant (Pact world, 2019). As a not-for-profit organization, Pact
environment. Pact is a top implementing partner for the United States Agency for
International Development (USAID). Pact is also financed by other donors such as the
President Emergency, Global Fund and other private funders including the Bill and
Melinda Gates Foundation, The Coca Cola Foundation and corporations (Pact world,
2019).
Executive Officer (CEO), who together with the board of directors oversee the
operations of the organization. Pact has various country offices that are directly led and
headquarters office. One of such country offices is Pact West Africa, which is the
country office for Nigeria, based in Nigeria. Pact’s policies and standards of operations
cut across all country offices, giving the organization a uniform standard and culture
globally. (Pact, 2017). Pact’s global organizational culture is that of creating a group of
organization that genuinely cares for every employee’s growth and welfare. Overtime,
this has been realized with testimonials from employees around the world (Pact World,
2020).
This essay will further analyze other leadership and management theories that have
been critically evaluated by various scholars ranging from the classical and
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analysis of leadership and management theories. The last part of the essay will be
focused on providing a critical evaluation of how well the discussed leadership and
management theories fit or do not fit into the reality of what is being practiced in the
Leadership Theories
The development of leadership as a concept and an area of research interest has been
around for centuries. Historical scholars such as Plato held the belief that one’s class
position was the singular factor for determining a leader (Gregory-Mina, 2009).
positing various theories to further explain the concept. Despite the myriad of leadership
definitions that exist, a universal definition of leadership was developed and agreed
upon during the first GLOBE conference in 1994, where 54 researchers from 38
describing what leadership means from their diverse lens. Most definitions of leadership
goals. In his book Leadership: Theory and Practice, Northouse defines leadership as “a
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process where an individual influences a group to attain a common goal” (Northouse,
2013). The term has also been defined as a process of influencing others to understand
and agree about what needs to be done and how. It also involves the process of
facilitating individual and collective efforts to achieve common goals (Jie-Hui Xu, 2017).
Similarly, Guzman, Muschard, Gerolamo, Kohl & Rozenfeld in their journal article
change by providing direction and aligning people with all the strategies required to fulfill
at relating leadership to the demands of society (Northouse, 2013). Some have argued
leadership originates from the trait theory of leadership (Northouse, 2013). This theory
suggests that a leader is different from a non-leader because of certain unique inborn
qualities he/she possesses that imbues the ability to lead. Proponents of this theory
often use statements like “He is a born leader” (Northouse, 2013). Following from the
trait’s theory, a behavioral approach to leadership was formed. Here, the actions of a
person and not qualities determine whether he/she is a leader. Another perspective,
which is referred to as the skills theory posit that a leader is someone who has certain
skills and competencies (Khan, Nawaz, Khan, 2016). Other scholars argued that
leadership is situational, which means that leadership can be differ based on particular
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Other contemporary theories of leadership have been put forward in a bid to further
and exchange (Khan, Nawaz, Khan, 2016). One of the most vastly studied one which is
the focus of this essay is the transformational leadership theory. This theory sees the
leader as transcending personal interests to prioritizing the needs of the needs of the
group. The transformational leader “attempts to induce followers to reorder their needs
by transcending self-interests and strive for higher order needs" (Bass and Bass, 2008).
Just like the word love or democracy, a million definition of leadership exits, capturing
what it means to different people in different contexts. The concept of leadership has
been analyzed using countless theories which cannot all be mentioned here.
Leadership as a concept is still being largely researched, and hence cannot be seen to
John D Rockefeller was born on the 8 th of July 1839 in New York State, United States of
America. John however grew up in Pennsylvania, with his mother who was a Baptist
fanatic and a Father who was mostly absent and a known criminal and bigamist,
constantly moving his family to different cities in order to avoid the law catching up with
him (Lee, 2002). His father’s behavior became an image that John was determined to
avoid at any cost, having a deep hatred for a showy lifestyle. John’s mother was a
committed Baptist woman who devoted her time to brining up her children in the fear of
God. Following his mother’s leadership, John took church very seriously and was often
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referred to as ‘the deacon’ by most of his friends (Lee, 2002). He later went on to
become a full-time minister for a while before dropping it to learn accounting trade in
order to support his family financially. As the first son of the family, John had to grow up
really quick to act as the breadwinner of the family. At a young age, he was already
selling candy, turkey and any other thing he could find for profit (Lee, 2002). In later
years, John is noted to have said “I was trained from the beginning to work and to save.
I have always regarded it as a religious duty to get all I could honorably and to give all I
could. I was taught that way by the minister when I was a boy” (Lee, 2002). John’s
upbringing, faith and commitment to church was very critical to his principles and
worldview. (Lee, 2002). At the age of 23, John founded the Standard Oil Company in
1863 which became known as the greatest monopoly in America’s oil industry in the 20 th
century. John built the company to a great success that even after its dissolution by the
U.S. government, John became America’s first billionaire (Harvard Business School).
Transactional Leadership
for the more vastly studied transformational leadership. However, it will be good to
critically analyze this style of leadership as a unique style with its own characteristics
The concept was transactional leadership was first developed by Max Weber and then
approach followers with the intent to exchange one thing for another, this can be in the
form of the winning the followers commitment to the leaders goals and objectives by
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(Stewart, 2006). In explaining this further, Burns argues that in transactional leadership,
the leader and the follower are not bound together with the purpose of achieving
mutually similar goals, instead, since the relationship is based on an exchange, both the
leader and the follower acknowledges the power relations of the other and continue to
Leadership, Bernard Bass and Bruce Avolio further explain transactional leadership as
the exchange that occurs among leaders, colleagues and followers. Here, the leader
discussed the terms of reference of what is required with the follower, presenting the
conditions and rewards that the followers will receive upon fulfilling the terms of
reference (Bass and Avolio, 1994). They further refer to this type of leader as a
‘transactional operator’ who is only concerned about achieving his/her own personal
agenda without a genuine concern for the welfare of followers (Bass and Avolio, 1994).
Leaders in this category can be productive and successful by expecting and demanding
results. Also, followers will not always feel badly treated as long as there are rewards to
transactional, in the sense that he was often result-oriented to the extent that he was
aware of every detail of all activities happening in the Company. He was known to
micro-manage employees by going to the refinery to ensure that the workers aren’t
pausing on their efforts (Ron Chernow, 1998). He questioned every aspect of the work
and hurried employees into finishing tasks in order to improve productivity. In exchange
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for their commitment and hard work, all officers in the Company were granted stock in
The transactional leadership theory has been criticized for not rewarding personal
initiative and creativity of followers. Some studies also reveal that the transactional
theory of leadership fail to balance out the level of leaders actions and the nature of the
Transformational Leadership
theory which was first coined by Downton and was further expounded by leadership
expert James McGregor Burns postulates that transformational leaders are change
agents who motivate their followers to achieve their goals and vision, while empowering
them in the process (Jie-Hui Xu, 2017). This type of leadership is considerate of the
follower’s growth; hence the leader provides the follower with support, mentorship and
coaching, encouraging the follower to use their own abilities (Osula and Eddie, 2014).
related to personal factor towards the organization and a course that will yield certain
Burns (2003) in his book transforming leadership gives a clear definition of what it
the very condition or nature of a thing, a change into another substance, a radical
change in outward form or inner character, as when a frog is transformed into a prince,
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or a carriage maker into an auto-factory. It is change of this depth and breath that is
fostered by transforming leadership”. With the advent of the oil industry in America, the
industry was ridden with various woes, ranging from fire outbreaks, poor technology and
transportation system and the most daunting issue of waste involved in the refining
process, which was costing the industry a lot of profit. John D. Rockefeller through his
particularly the problem of waste (Lee, 2000). To do this, John found alternative uses
for many of the waste by-products and his company began selling them for profit.
Standard Oil is recorded to have developed over 300 by-products from oil waste, hence
reducing the profit loss in the oil industry of America at the time (Loborec & Weber,
2015)
Bass and Roggio (2006), further expound on the work of Burns by postulating that
leaders that are transformative not only cause a change in their followers but go ahead
to support the growth of followers into future leaders, by empowering them and being
attentive to their needs. These leaders also ensure that the goals of individual followers,
their own goals and the organizational goals are all aligned.
As a result of the positive relationship between that exists between the transformational
leader and the follower, these leaders tend to earn the trust and loyalty of their followers
and often have more committed and satisfied followers. The followers of a
expectations (Bass and Riggio, 2006). The employees of the Standard Oil Company
were often referred to themselves as the Standard Oil Family, with everyone being
treated right and working towards the fulfilment of the company’s goals and objectives
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(Loborec & Weber, 2015). Rockefeller gained the commitment and trust of his
employees by often working with them and appreciating their efforts, giving them long
fully-paid leave in order to get their highest performance. Most employees were known
to cut their leave short because of their commitment to the organizational goal and
the ability of a leader to create a compelling vision that followers can buy-into and
that transformative leaders are visionaries that aim to move their followers from being
only interested in their personal needs to being driven toward a higher and a more
two of these components – Idealized Influence. As the founder of the Standard oil
company, John D. Rockefeller was a man with high moral standards owing to his
upbringing by a stout Baptist mother. Throughout his lifetime, he was known to have
upheld the Christian faith strictly, being a non-drinker and not giving in to gambling.
John devoted a huge part of his time and profits from his company to philanthropy and
community service. The pressure of managing both charity and business almost cost
The other component that can be associated with John D. Rockefeller is ‘inspirational
motivation’. The Standard Oil Company began operations with only one refinery in
1863. However, this did not limit John D. Rockefeller’s vision of becoming the biggest
monopoly in the America’s oil industry. In growing his company, Rockefeller has an
inclusive vision that kept both him and his followers accountable to achieving the goals
of Standard Oil Company. In talking about his leadership, he is quoted to have made
the statement – “Good leadership consists of showing average people how to do the
As Bass and Avolio (1994) rightly pointed out, although transactional leadership have
the tendency to hinder the creativity and growth of the follower, it is often appreciated
for its ability to achieve the goals and objectives of the leader, albeit using an ‘the end
justifies the means’ approach. Transformational leadership on the other hand brings into
consideration the needs of the follower, with the leader being a role model, showing
genuine concern for the growth of the follower in order to achieve transformative change
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combined both of these leadership styles, applying them interchangeably as the
situation demands. This correlates with Bass conclusion, as opposed to what Burns
interdependent and not mutually exclusive. Successful leaders tend to utilize both
leadership styles based on the situation and the task to be achieved (Northouse, 2004).
Management Theories
The concept of management can be said to be as old as the human race. However,
despite the long-standing existence of the concept, scholars have and are still
Hence, according to Gerald Cole (2004), there is no general definition to the concept of
what this concept means. One of the first scholars to conceptualize the term
Agreeing with this definition, Brech (1957) explains that management is a social process
that involves the activities of coordinating, planning, controlling and motivating (Cole, 2004).
Similarly, Kootz and O’donnell (1984) states that management is an operational process,
noting that there five vital principles of management and these include, planning,
organizing, staffing, directing, leading and controlling (Mahmood, Basharat and Bashir,
2012)
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In giving a varying view of management, Tom Peters (1988) in his definition decides to
explore the concept of management by describing the roles of managers. Peters points out
that managers need to be obsessed with responding to customers, constants think of ways
encourages change and be visionary, and control using simple support systems (Cole,
2004).
In alignment with all these definitions, Gerard Cole in his book Management Theory and
further explore the concept more broadly. The first theories of management, often referred
to as the classical theories of management were developed by Henri Fayol and Taylor who
were actually practicing managers at the time the theories were developed (Cole, 2004).
The Classical Management theories which include, the scientific management theory
by Henri Fayol and the bureaucratic management theory developed by Max Weber, were all
developed with the aim of predicting employees behavior at the work place (Mahmood,
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Being the earliest postulated theories of management, the classical theories of
management were criticized for having some shortcomings particularly in the areas of
human relations. This led to the development of what is often referred to as the neoclassical
or human relations theories of management (Bittner, 2006). The primary concern of human
relations theorists were individual behavior and social relationships at the workplace. They
were interested in both employee satisfaction and the efficient use of resources (Cole,
2004). The development of the human relations theory is attributed to Elton Mayo. Other
proponents of the theory include McGregor, Maslow, Bernard among others (Bittner, 2006).
The concept of management is very broad, having various definitions and theories. For the
purpose of this essay, the bureaucratic and human relations theory of management will be
The bureaucratic theory of management was developed by sociologist Max Weber, his work
on bureaucracy has remained the foundation for the study of administrative excellence in
called was formulated in 1947 and the work was titled, ‘The Theory of Social and Economic
The theory is primarily concerned with two vital elements – having an organization with
a structured hierarchy and with a set of clearly defined rules that governs the
organization and its employees. Weber was convinced that the only way to efficiently
manage an organization in order to achieve the highest level of productivity was through
bureaucracy (Peek, 2020). Weber advocated for a rational form of organization, which
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will be bureaucratic. In Weber’s ideal bureaucratic organization, roles are defined within
a hierarchy, job holders are selected on merit and are required to be impartial and
subject to established organizational rules that guide their actions in the work place
(Cole, 2004). Weber argues that with the existence of established rules and practices,
officials of an organization are bound to be legitimate and not arbitrary. With this point
Weber declares that “Bureaucratic organizations are capable of achieving the highest
efficiency, and is in that sense, the most rational known means of carrying out
Additionally, Weber was of the opinion that formality and impersonality in the workplace
organizational goals are not confused with personal interests (Serpa and Ferreira,
2019). Weber advocated for an organizational system where employees roles and tasks
are clearly defined according to their various expertise with a strict culture of division of
Weber’s Bureaucratic Management Theory Contain Certain Key features (Peek, 2020)
that apply to Pact Inc. as a contemporary organization. These can be seen below:
structured hierarchically, in such a way that allows for the easy flow of information from
top to bottom and vice versa. He advocated that each layer of the hierarchy chain
should be provide direct supervision to the layers below them and be subject to the
hierarchical in nature with a Chief Executive Officer (CEO) at the peak of the hierarchy.
The CEO is supported by other executive officers who are responsible for leading
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various departments in the organization (Pact world, 2019). This set of executive
officers are referred to as ‘Vice Presidents’ and they report directly to the CEO. For
example, there is the Vice President of Pact Ventures, Vice President of Human
Resources, Vice President of Africa Programs etc. These Vice Presidents supervise the
‘Regional Directors’ who in turn supervise ‘Country Directors’ that are responsible for
command continues and cuts across managers, deputy managers, senior officers,
officers, assistants, interns and volunteers who are at the bottom of the chain (Pact
world, 2019).
Division of Labor: Here, employees are expected to have clearly defined roles and
responsibilities and be engaged only in tasks where they have expertise, in order to
ensure organizational efficiency. Weber believed that division of labor in this manner will
document which is referred to as a ‘job description’ that specifies their distinct roles and
responsibilities with their job position. This is given to each employee to ensure that
roles are clearly divided without having to overlap. To ensure that employees have the
required expertise to carry out the assignment in their job description, In Pact, the job
description document is used for the recruitment process prior to hiring an employee
(Pact, 2018). Also, there is also the departmentalization of the organization that ensures
clear division of labor. For instance, there is the procurement department, the finance
designated to particular departments according to their Job roles and all these
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departments are led by their various managers with clearly defined responsibilities as
selected equally, based on their technical competency and expertise for the job position.
Also, based on this, the employee’s salary should also be based on their job position in
the company and nothing else. Pact has an interesting policy that enforces this feature
of the bureaucratic theory. This policy is called the ‘conflict of interest policy’. (Pact,
2018). According to this policy, employees are required to indicate if they have any
relationship of any kind with proposed candidates for a job and they are also required to
be exempted form the selection process of such candidate. If these rules are not strictly
followed, then it will result in the automatic disqualification of the candidate regardless of
promoted based on their experience, achievements and technical competencies and not
based on personal favors or any other factor. In Pact, the promotion process for an
‘justification for promotion’ (Pact, 2018). This justification will include a description of the
achievements of the employee in the job position that he/she currently occupies, the
candidate for the higher position being desired. Based on the justification provided, then
the promotion request will be handled fairly by the human resource management
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department with final authorization from either the Country, Regional, Vice President or
organization should be clearly defined and enforced, this allows for employees to be in
tune with the standard of operations of the organization and to always know what is
expected of them without confusion. This according to Weber, helps for the smooth
running of the organization. Pact is well run and guided by a myriad of policies and rules
that govern the affairs of the organization and the behavior of employees. For instance,
Pact has the Pact Policy and Procedural Manual that is given and explained to every
employee upon onboarding and orientation (Pact, 2018). This manual contains policies
such as the ‘Sexual Harassment Policy’ which is being heavily enforced in the office.
Pact also has the ‘Pact Code of Conduct and Ethics Manual’ which explains how Pact
handles fraud, money laundering and theft. This policy is also available for all
employees so that they are aware of what is expected of them (Pact, 2017).
management, with its principles still being largely utilized by most contemporary
organizations. However, this theory has been largely criticized for ignoring the human factor
(Mahmood, Basharat and Bashir, 2012). While Pact Inc. in its organizational modus
operandi reveal clear practices of the principles of the bureaucratic theory of management,
It combines this with the practice of the fundamentals of the human relations theory of
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Human Relations Theory of Management: Elton Mayo Hawthorne Experiment
The Human Relations Theory of Management originated from the Hawthorn Studies
executed between 1924 to 1932 by Elton Mayo and Fritz Roethlisberger. The Hawthorn
studies was first carried out to test the effect of the physical environment and conditions
on the productivity and efficiency of workers (Business News Daily, 2020). However, in
carrying out this experiment, Elton and Fritz observed that workers productivity
increased significantly when workers were being observed by others, because during
the study, senior officials visited the workplace to observe the workers during the
experiment. This discovery led them to conclude that workers are more productive and
efficient when they have relations with their colleagues or management. Hence, if
workers feel like they are ‘seen’ by their supervisors, then they will be motivated perform
better (Business News Daily, 2020). With this discovery, Elton Mayo concluded that
“the needs of workers were often based on sentiment (belonging to a group and
thus having a sense of value) and that this could lead to conflicts with managers,
In his book Management Theory and Practice, Cole (2004) notes that Elton Mayo’s
Hawthorn Studies which originally started as a study into the effect of physical
conditions on workers, ended as a series of studies on the effect of social factors (group
According to Cole (2004), the most significant finding of the Hawthorne experiment
revealed that social relations at the workplace was to be placed on the same pedestal of
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Elton Mayo’s Hawthorn Experimented is credited with the following findings:
group, as this is how they think and act (Kwok, 2015). In Pact, there are
structures that have been put in place to ensure that workers can see themselves
as members of a group. One of this is the annual staff retreat, where all staff get
to be laid back and interact with both supervisors, and subordinates without all
the work pressure. Pact also encourages group culture by having an established
2. Money is not the sole motivator. Elton found that workers are more satisfied
than when they are only offered monetary of good working conditions (Cole,
voted and the winner is publicly recognized and appreciated (Pact 2018). Also,
are often sponsored to take trainings and courses, at the end of which they are
informal groups, which exercise strong social controls over the employee (Kwok,
2015).
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4. Group bonding and collaboration at the work place must be consciously
developed, as this does not occur by accident (Kwok, 2015). Group bonding at
5. The social needs of workers should be catered for by supervisors and managers
so that they can ensure that workers feel motivated enough to work towards
fulfilling the organizational goals and not against it (Kwok, 2015). In Pact, all
their supervisees (Pact 2018). The purpose of this check-in is to discuss the
mental health of the employee, catch up on tasks for the week and discuss other
The Hawthorn experiments no doubt revealed the social/human factor lacking in other
experiment furthered the humanization of work (Cole, 2004). The findings revealed by
contemporary organizations like Pact Inc. However, Elton’s Mayo’s human relations
theory of management has been criticized as giving managers the power to mentally get
employees to accept less pay while thriving on workers need for social acceptance and
relations (Bruce and Nyland, 2011). Hence, it can be said that in applying the theories of
management and practices between the classical and human relations theories of
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Conclusion
leadership, applying it to the leadership style of John Davison Rockefeller. Flowing from
the analysis carried out above, we see that although, John was more of a transformative
his company, Standard Oil into America’s greatest monopoly in the oil industry. This
theories and how they can both be applied as leadership styles to achieve the best
outcomes.
The human relations and bureaucratic management theories of leadership were also
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management practices. Balancing these two theories of management, have aided Pact
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