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ijcrb.webs.com INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS Effect of Leadership on Employees Performance in Multinational Pharmaceutical Companies in Pakistan Bilal Durrani Institute of Business and Management Sciences, Agricultural University,Peshawar Obaid Ullah Institute of business and management sciences, Agricultural University,Peshawar Sabeeh Ullah(Corresponding Author) Institute of business and management sciences, Agricultural University, Peshawar Abstract The study was conducted to examine the effect of leadership on employee‘s performance in multinational pharmaceutical companies in Pakistan. The leadership behaviors were assessed with respect to 5 factors (motivation, promoting challenging standards, visibility and availability, championing excellence and team working). Data was collected from 50 leaders through questionnaire by selecting 10 leaders from each 5 multinational pharmaceutical companies. The results were presented in terms of counts and percentages by reflecting their views regarding different opinions about mentioned factors and employees performance. Effective leadership behavior in motivational factor showed, 90% leaders apply different motivational techniques for employee satisfaction. While for visibility and availability factor more than 32% leaders at pharmaceutical companies lacking to approach their employees. It was reported by 85% respondents that promoting challenging standards, championing excellence and team working improves the performance of employees. Results showed that effective leadership developed significant (p < 0.05) relationship with employee‘s performance. Keywords: Leadership, Employee‘s performance, Motivation, Chi-square. COPY RIGHT © 2011 Institute of Interdisciplinary Business Research 286 JANUARY 2011 VOL 2, NO 9 Listed in ULRICH’S
ijcrb.webs.com INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS JANURAY 2011 VOL 2, NO 9 1. Introduction The world at present is experiencing a new economic paradigm characterized by speed and profit, which make organizations more challenging, flexible, creative and customer oriented. The concept of leadership is relevant to any aspect of ensuring effectiveness in organizations and in managing change. The effective leadership depends upon leaders, followers and situational environment. Without understanding leadership process nothing can be done to assure employees and organization performance. Early organization with authoritarian leaders who believed employees were intrinsically lazy transitioned into way to make work environments more conducive to increased productivity rates. According to human resource management employees are assets of organization and need to maintain and developed. Therefore the contemporary organizations are demanding charismatic leadership to empower, encourage and motivate employees to bring efficiency and effectiveness to increase productivity in organization. Leadership is the process of influencing others to understand and agree about what is to be done and how it can be done effectively and the process of facilitating individual and collective efforts to accomplish the shared objectives (Yukl, 2002). It was not until the early 19th century that leadership as a concept first appeared as a word in the English language (Davis & Cushing 1999). Effective leadership is about enabling ordinary people to produce extraordinary things in the face of challenge and change and to constantly turn in superior performance to the long-term benefit of all concerned (Charlton 2000). Effective leadership, workplace, learning & continuous improvement are now considered essential for an organization to remain competitive, (Sales & Cannon- Bowers 2001). The more recent definitions conceive leadership in terms of influence relationships, power differentials, persuasion, influence on goal achievement, role differentiation, reinforcement, initiation of structure, and perceived attributions of behavior (Bass, 1990). Leadership brings people, of all backgrounds, interests, values and cultural environments together, and provides them with opportunities in order to realize potential and goal optimization (Hesselbein et al.1996). Organizational culture has been argued as one of the most powerful and stable forces operating in organizations and can influence a firm's leadership, decision making, performance, internal development, and, strategic development (Howard, 1998). Leaders are able to define a goal, persuade others to assist in achieving that goal, and lead their teams to victory. Leadership is crucial to managers in the business world, but it also plays an important role for coaches, teachers, and parents. Understanding relationship between organizational leadership and employee‘s performance in shaping work attitude and organization development are challenges for contemporary organizations. In multinational pharmaceutical the following leadership problems are evident including customer focus, sales targets , communication and conflicts, process improvement, invention and innovation, employee involvement, lack of motivation among sales workforce (Iliyas, 2003) The mentioned effects of employees are therefore result in decreased commitment and subsequently job performance (Daft, 2003). Therefore, to resolve these problems and to create opportunities there is a need of smart people and smart organizations that will built their own future by introducing creative leadership process which include leader, followers and situation to introduce new ideas, innovation and adopting continuous change. The conceptual framework for this study taken from (Smith, 2001) who shows five key behaviors of a change agent i.e motivation, promoting tough standards, visible and COPY RIGHT © 2011 Institute of Interdisciplinary Business Research 287
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