Leadership style — practice questions

Step 1: Analyse Autocratic Phase (Year 1)

• Style: Autocratic. The founder made all decisions.
• Data: 2 projects delivered; 66% staff turnover (2 of 3 developers).
• Analysis: The style achieved output but was detrimental to morale, as shown by the high turnover. This is a classic drawback of long-term autocratic leadership. The financial cost of replacing two developers would also be significant.

Step 2: Analyse Democratic Phase (Year 2)

• Style: Democratic. The founder involved the new, experienced team in decisions.
• Data: 5 projects delivered; 0% turnover.
• Analysis: This aligns with Hersey-Blanchard's situational theory: as follower readiness (ability and willingness) increased, a more participative style became effective. Productivity per person increased (from 0.67 to 1.0 projects/person) and retention was perfect, indicating high job satisfaction.

Step 3: Analyse Laissez-Faire Phase (Year 3)

• Style: Laissez-faire.
• Data: 0 prototypes in 6 months.
• Analysis: Even with a highly skilled team, a complete lack of direction or clear goals led to failure. This shows that laissez-faire leadership is not simply 'leaving people alone'; it requires clear objectives and accountability structures to be effective.

Step 4: Quantitative Evaluation

• Productivity Change: Productivity per developer increased from $2/3 \approx 0.67$ projects/dev in Year 1 to $5/5 = 1.0$ projects/dev in Year 2, a 49% increase.
• Turnover Impact: The turnover rate dropped from 66% to 0%. This saved significant costs associated with recruitment and training, and maintained team knowledge.
• Conclusion: The data quantitatively supports the shift from an autocratic to a democratic style as the team matured, leading to improved productivity and retention. The failure of the laissez-faire approach highlights its risks without proper goal-setting.

Step 1: Calculate Initial Performance

• Initial Daily Output: 800 units
• Initial Daily Errors: $5\% \times 800 = 0.05 \times 800 = 40$ defective units.

Step 2: Calculate Performance After Leadership Change

• New Daily Output: 920 units
• New Daily Errors: $3\% \times 920 = 0.03 \times 920 = 27.6 \approx 28$ defective units.

Step 3: Calculate Percentage Changes

• Percentage Change in Output: $\% \text{ Change} = \frac{\text{New Value} - \text{Old Value}}{\text{Old Value}} \times 100\%$ $\text{Output Change} = \frac{920 - 800}{800} \times 100\% = \frac{120}{800} \times 100\% = 15\% \text{ increase}$
• Percentage Reduction in Error Rate: The rate itself dropped from 5% to 3%. The percentage reduction is: $\text{Reduction} = \frac{5\% - 3\%}{5\%} \times 100\% = \frac{2\%}{5\%} \times 100\% = 40\% \text{ reduction}$

Step 4: Evaluate the Leadership Change

• Analysis: The introduction of transformational leadership techniques led to a quantifiable improvement in performance: a 15% increase in productivity and a 40% reduction in the error rate.
• Conclusion: This demonstrates that moving beyond a simple transactional (reward/punishment) system to a transformational one that inspires and intellectually stimulates employees can have significant positive effects on both the quantity and quality of work. The numerical data provides strong evidence for the effectiveness of this change in this specific context.