An Unleveraged Hotel Chain

            Marriot International has been facing a slump within their industry, along with their competitors. There is pressure from the competitors, but it is not “life threatening” as Arne Sorenson, President of Marriot International, puts it. This is because the Marriot has a slightly more effective strategy. Arne Sorenson explains how franchises are more than half of his company. This creates a safer bet for the organization when occupancy rates are low. Since most of the drastic slumps and booms affect the franchisees, the Marriott Corporation does not take the hit as hard. Sorenson explains how the national lodging industry is still performing just as badly as they were after the 9/11 incident. Consumers are changing their habits and technology is affecting the need for lodging. Business people now have the ability to use video conferencing for their meetings, rather than traveling to them just to attend.

            Sorenson’s leadership style for this situation consists of Complexity Leadership. The Marriott organization is a complex adaptive system. They are able to adjust and adapt to certain environmental changes, unlike their competitors. Within this system is an adaptive tension, which is the resource differentials within the system, and between the system and the environment that can lead to can improve performance according to the same measure. The adaptive tension for the Marriott is opening more franchises in an unstable economy. Sorenson creates a disequilibrium to create this change from the traditional lodging industry. In this situation, the franchisees are Sorenson’s enablers. These are the people who are led to facilitate connections. Sorenson allows these franchisees to take their own risks with the wicked problems caused by the environmental changes.

            Overall, Sorenson uses a Complexity Leadership style. His organization is a complex adaptive system which allows enablers to facilitate it. For everyone who is reading this blog post, do you believe this is the correct leadership style to apply to Arne Sorenson’s behavior in this situation? Also, do you believe that the franchisees are the enablers?

http://audiovideo.economist.com/

Posted by: Genise Logston

The Business of Obamacare

            Michael McCallister, CEO of Humana, has faced many challenges with the new health care reform law. It is said that health insurance companies have been immoral all along, and this new health care reform law is suppose to help Americans. Obama even stated, “Americans are being held hostage by health insurance companies,” meaning that the health insurers are the bad people. McCallister hates that people feel this way because all his employees wake up every day trying to do good things for people such as getting them through illnesses, protecting them from financial disaster, and preventing them from being sick. McCallister explains in his interview that the reason for rising premiums is from the aging population, new technology, and new drugs, not them just charging a high premium for no reason.

            Due to these issues, McCallister is trying to create stronger relationships with his consumers. McCallister loves the Medicare Advantage division of Humana, because it allows his employees to talk directly to the people. Humana loves the individual health insurance market because it allows them to talk to the people directly and receive feedback. Being able to talk to the customers and helping them is what drives the company to work hard. They are also trying to find ways to motivate behavior change with incentives and rewards such as fitness programs and other products.

            When looking at this situation, it is clear that McCallister is using the Contingency Theory leadership style. When looking at the Contingency model, it is shown that McCallister has poor leader-member relations. McCallister and his employees are currently trying to repair these relationships with the customers to by developing relationships with them. The customers currently feel betrayed by health insurance companies include Humana.

            McCallister’s situation also has low task structure. There are no clear cut requirements on how to create these relationships with the customers. There are also many different pathways McCallister can take to achieve the task of persuading the customers that his company is only there to help them, and not just to make a profit. They can make the customers happy through incentives, personalized conversations, friendly employees, and more. This task structure is also low because the completion of the task is unclear. Unless all the customers verbally state that they are happy and satisfied, McCallister will never know when he successfully completed his task. And lastly, McCallister has low task structure because there are many correct solutions to the task. Not all the same solutions will make every person happy, thus making individualized solutions for everyone.

            The position power that McCallister has is strong. Since he is the CEO of Humana, he has the legitimate power of holding a top position in the organization. He has the amount of authority a leader needs to reward or punish employees. It will motivate his employees to work hard on fixing this situation because he is the one signing their paychecks.

             After looking at these three situational factors, it is evident that McCallister’s preferred leadership style is at a 7. This means he is relationship motivated (high LPC), and is effective in moderately favorable situations. Based on the Contingency theory, McCallister is very concerned about relationships. Although many people believe that McCallister’s company is just trying to steal their money, he is taking the correct leadership style to help try and change their mindsets. I believe that this is the most effective leadership style for McCallister in this situation.

Do you guys believe that McCallister could be more effective if he used a different leadership approach to this situation?

http://money.cnn.com/2011/03/17/news/companies/leadership_michael_mccallister_humana.fortune/index.htm 

Posted by: Genise Logston

President Obama's Unfavorable Situation

President Barack Obama told reporters in Brasilia, Brazil that he has authorized the beginning of “limited military action in Libya” and stated that the U.S. is acting as “part of a broad coalition”. However, he did not specify exactly what he meant.  He said that the U.N. Security Council was dedicated to protecting the Libyan people and that he would keep the American people fully informed.

President Obama said all this after the U.S., France, Britain, Canada, and Italy began attempts at taking out Libyan leader Moammar Gadhafi’s air defenses.  While the president repeated several times that the U.S. would not be sending in troops, he did say that the Libyan leader was given the chance to avoid their invasion. However, Moammar Gadhafi continued to attack his own people and the danger of the Libyan people increased. President Obama said he was acting on the best interest of the United States and the world.

Taking a deeper look at this decision, President Obama uses the contingency theory of leadership to address the current situation. First of all, the president’s leader-member relations are considered good. He has a high degree of subordinate trust and liking, and he also maintains many positive relationships with his followers. However, the task structure in this situation is low. Given the fact that Libya’s government raises a lot of uncertainty, President Obama and his allies’ path to accomplishment has many alternatives and is quite ambiguous. Also, task completion cannot be clearly demonstrated or verified because although Obama currently says no troops will be sent to Libya; there is a possibility that they will be needed there if a bigger crisis should occur. Lastly, President Obama has strong position power because he possesses the authority to reward or punish his followers by firing or hiring them, as well as offering raises in rank or pay.

Based on the contingency model, President Obama is most likely to receive a low LPC (least preferred coworker) score and would therefore be most successful as a task-motivated leader in this particular situation. Task-motivated leaders are concerned primarily with reaching a goal, which in this case is helping to save the oppressed Libyan people.  Fortunately, lower LPC scores like Obama’s tend to be most effective in very unfavorable or very favorable situations. The current situation with Libya causes Obama to lead in a very unfavorable situation. While many followers are opinionated about whether or not the U.S. should be involved in this crisis, the contingency theory of leadership helps prove that Obama can be an effective leader in this particular setting.

Do you think Obama is really doing what is best for the United States and for the world?

Posted By: Christine Burklin

http://blogs.wsj.com/washwire/2011/03/19/obama-on-libya-we-are-part-of-broad-coalition/?KEYWORDS=ceos

Bob Stoffel's "greener" vision for UPS

Bob Stoffel, the current CEO of UPS, has begun to create a new “greener” vision for his fortune 500 company. In the midst of many organizations converting to more “green” and environmentally friendly ways to operate, Stoffel is coming up with a new plan to make UPS the model company in the multi-international package shipping industry. Bob feels with the support and mentoring of many external technology experts he will be able to turn UPS into a more environmentally friendly and sustainable company, despite the company consisting of 100,000 trucks and 550 planes.

He started this project off just experimenting with just about every green technology on the market and now he is beginning to reduce UPS’s carbon emissions by millions of tons of waste per year. In this particular case Bob is experiencing a situation in which his actions are impacting the leaders, followers, and the situation at UPS. Stoffel’s leadership approach for this particular case and event can best be described in the path goal theory. Stoffel expects a great amount of effort from his subordinates(followers) to impact the overall performance of the company in hopes of obtaining a sustainable competitive advantage in the industry.

Stoffel must motivate all internal components of UPS to stay focused on making UPS a greener company, but he must remove any obstacles his followers face along the way.  Bob must be able to get his leaders and followers together on the new strategies that will help obtain the new vision of what the situation should become. Stoffel has set out clear, defined goals for his subordinates to follow along the path to become a more sustainable and environmentally friendly company. The subordinates have a high external locus of control in this situation as the outside competitors are competing to become more environmentally friendly as well. All of these characteristics and UPS’s already well established company, require an achievement oriented style of leadership. UPS has always help high standards and expectations for the company as they have always been able to excel. Now they are going down a path they have never ventured do before, do you think Bob Stoffel will be able to make UPS a more environmentally friendly and “greener” company?

http://money.cnn.com/2010/12/16/news/companies/csuite_ups_bob_stoffel.fortune/index.htm

Post by: Sean Gremillion

Obama's Dinner with Technology Executives

http://online.wsj.com/article/SB10001424052748704900004576152254129083120.html

As president of the United States, Obama has a lot of different jobs to take on.  One job that has become important to Obama is making sure that he works with private sectors to help boost and lift the economy.  In order to do this, he had a dinner with multiple technology executives such as Mark Zukerberg, Steve Jobs, and Eric Schmidt.  This dinner was set up in order to discuss topics that are going help combine the government and private sectors to work together and how they can all collaborate to help encourage kids to study math and science.

 I think that the LMX theory comes into play at this dinner.  Given that Obama is the President and these executives are CEO’s of large technology companies, it is easy to see that Obama has a large impact on these companies and vice versa.  Obama’s goal it seems is to keep these companies in his in-group to help create jobs for the people in the U.S. and expand the economy.  If they put their efforts together they are going to be able to be more effective.

At this event, it was a more laid back atmosphere and allowed Obama to talk to the executives as a whole as well as one-on-one.  I think that the contingency model also comes into play at this dinner.  As previously discussed leader-member relations in this situation are good and positive.  Because the atmosphere is at a dinner, the structure is low and the discussions may not always be about all business.  But, in this case, the position power is high because of Obama’s position in society and placement in government.  This rates Obama’s preferred leadership style at a 3 (low to middle LPC’s).  Therefore, I believe that Obama used the right style of leadership in this situation.  This is the biggest strength of this theory that it takes into consideration the impact of situations on leaders.  There is a right time and place to use different styles of leadership.  Obama knew that he had a good relationship with these executives and he invited them into a laid back atmosphere.

Do you think that the right type of leadership style was used?

--Posted by:  Devan Pritchett