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DECLARATION RELATING to DISPOSITION of THESIS Rl�His Is to Certify Tl1at I Form 2 RETENTION THE UNIVERSITY OF NEW SOUTH WALES DECLARATION RELATING TO DISPOSITION OF THESIS rl�his is to certify tl1at I ........ J.q.4.Il: ..��.��.P.:�t� ... �t<i.<i..1-.�.t.q�........ ..... being a . Master of ca 1 11d date for the degree of.······Business···Admini·str·at·ion······ am fully a,vare of the policy of tl1e University relating to the retention and use of l1igher deg·ree tl1eses, 11a111ely that the U 11iversity retains the copies of a11y tl1esis subn1itted for exan1i11atio11, "a11d is free to allow tl1e thesis to be co11st1lted or borrowed. Subject to tl1e provisio11s of tl1c Copyrigl1t Act (1912-1950) the U11iversity 111ay issue the thesis i11 ,vl1ole or i11 part, i11 photostat or n1icrofil111 or other copyi11g 111edi u111. '' l11 tl1e light of tl1ese prov1s1011s I declare tl1at I wisl1 to retai11 111y ft1ll privileges of copyright i11 111y thesis a11d request that 11either tl1c ,vhole 11or a11y portio11 of the thesis 111ay be published by the lJ 11iYersity Libraria11 11or n1ay l1e a11thorise tl1e p11blicatio11 of the ,vl1ole or a11y })art of the tl1esis, a11d I further declare that this 1)rescrvatio11 of n1y copyrigl1t priYileges i11 tl1e thesis shall lapse fro111 the .... f.i.r.s.t ...... .day of .....January., ...... 19.87...... unless it shall previously have been exte11ded or reYoked i11 writi11g· over 1ny hand. Witness .. THE UNIVERSI� OF NEW This is to certify that I, John McKenzie Middleton� being a candidate for the degree of Master of Business Administratic declare that this 'rbesis, "The Concept of Leadership in a Business Organisation", bas not been submitted for a degree or similar award to any other University or Institution. Signature:. ( Witness: ,, I Date: •J:B&: CONCEPT OF LEADERSHIP IN A BUSINESS ORGANISATION -------------...-----------MAS'IER OF BUSINESS AIXINISTRATION JOHN McKENZIE MIDDLEmN DAm OF SUJ:W:ISSION: CHAPTER TABLE OF CON'IENTS PAGE I. SlThIMARY l II. INTRODlTCTIO~T 3 III. TIIB BUSINESS ORGANISATION 5 (A) Development of the Business Organisation 7 (B) The Environment 14 (C) The Framework 21 (D) The Formal Framework 24 (E) The Informal Framework 28 (F) The Military Organisation 33 (G) The Roman Catholic Church Organisation 42 IV. LEADERSJ-J IP 49 (A) Definition 49 (B) Theories and Results of Research (I) The individual 52 (II) Leadership - heredity or environmen.t 64 (III) The Situation 68 (IV) The Follower 71 ( V) The Group 74 (VI) The Effect of Stress 78 (VII) Authoritarian and Democratic Leadership 82 (VIII)Leadersr.ip and Cornmunication 88 CF.AP'IER TABLE OF COI~IJ.ENTS PAGE v. RELATIONSHIP OF LEADBRSHIP TO TEE BUSilIBSS ORGANISATION 92 VI. AN EXAMPLE OF BUSilIBSS ORGANISATION, THE EFFECT, DEVELOP~1ENT AND CLIMA'IE OF LEADERSHIP -- THE COLONIAL SUGAR REF1 INitlG COMPANY LTD. (A) Development of the Company 100 (B) The Environment 113 (C) The Framework 122 EIBLIO GF.APHY 138 ---.--------TABLE OF CHARTS CHART NO. OPPOSI'IE PAGE Nm,1BER 1. Organisation Structures 28 2. Organisation of c.s.R. 06. Ltd. 122 C.S.R. General Management Structure 125 4. Example of Organisation of Operating Division -- Australian Sugar Mills 128 5. Operational and Functional Spheres of Influence on the Mill Chief Chemist 129 THE CONCEPT OF LEADERSHIP IN A BUSINESS ORGANISATION. SUMMARY. The business organisation, as a segment ot society, is subject to social forces which constrain and limit its treedom ot action. ibe primary objective ot the business organisation to maintain itself, and the disunit,- ot the corporation shareholders, allow management to set its own ru.les. develop ita own growth potential, finance its own actions, and subject society to singularly one-sided propaganda. provided it sta~s within the social limits. nie nature of leadership in such an organisation is a function of leader, follower and situation, with all three making up group interaction. 'lheoriea on leadership have, in the past, emphasised each of the above variables~ with current research focusing on group interaction. '!he task situation and the basic needs of self, leading to concepts such as socio-group and psyche-group, are important features or leadership 1n the business organisation, particularly with increasing specialisation and the social complexity ot the "statf0 situation. - 2 - ib.e Colonial Sugar Refining Company is an ideal case study in that the development or the company, and the demands imposed on the role of leadership, can be traced over a long time span. Its dominating role in the sugar industry, ita quasi-governmental role. its recent wide diversification, all combine to produce a leadership climate unique in business. - 3 - CBAP'IER II. INTRO DUO TION. Management is a social science in that its object is to accomplish tasks with indiv~duals and with groups ot individuals. 1 "His (the manager) moat important function is to reconcile, to co-ordinate. to compromise and to appraise the various viewpoints and talents under his direction to the end that each individual contributes his full measure to the business at band". In many ways, the manager must consider his job of managing in the same light tb~t the engineer considers the performance ot a machine. ~e machine bas a rated capacity and quality of performance which a good engineer will achieve in production; a very good engineer will achieve better than rated performance from the machine. In the sa:m.e w.y, a good manager will motivate and so influence his subordinates that they will work as effectively and as creatively in a given direction as they think: they are capable; a very good manager will achieve a performance 1. Crawford H. Greenwalt, ~e Uncommon Man, McGraw-Hill. New York, 1959~ P• 64. - 4 ~ that he thinks they are capable, and an even better manager will achieve a performance which neither he nor they think they are capable. The art/science of this individual and group influence~ called leadership, is the subject examined in the following pages. Leadership 1s a process which is influenced by environment and the demands of society. 'lb.us the business organisation, as a segment of society, is examined tor its social and organisational framework -- the climate ot leadership. Leadership is defined, and the theories and results ot leadership research are reviewed from the literature. Finally, atter leadership is related to the business organisation specifically, the Colonial Sugar Refining Company is examined as a social group, with attention being paid to the social strength and weaknesses influencing the leadership process. - 5 - CHAPTER III. THE BUSINESS ORGANISATION. Organisation means ditterent things to different people. To the sociologist, organisation is the means of an examination into the interactions of people, the classes of hierarchy of an enterprise. To the psychologist, organisation means an attempt to explain, predict and thereby influence individual and group behaviour in an enterprise. To the manager, organisation means the grouping together of tunct1onal components in the best possible combination so tbat the entetprise can achieve its objectives. 1he business organisation, reterred to in this paper, connotes the social and technological environment in which the business man exists. It is not only a configuration ot individual and group interaction; not only a composite ot individual motives or reactions ot need fulfilling desires; not only an architectural framework of tasks, responsibilities and relationships; but it is a small segment ot society, influenced by social pressures, whether they originate from within the legal enterprise or from those sections of society with which the enterprise comes in contact. There are also dehumanising pressures. such as - 6 - technological discoveries, techniques of work designed to engineer machine-like workers, and the loss ot 1nd1vidual identity in very large enterprises. In this business environment or society there are a number of smaller organisations. such as industry organisa­ tion, single enterprise organisation, or an organisation of a number of single enterprises not necessaril7 in the one industry-. In this paper, the discussion ot the business organisation will focus, in the main, on a single enterprise. ihe three main forms ot enterprise in operation to-day are the sole trader or sole proprietorship, the partnership, and the limited liability company which will be referred to tor simplicity as the corporation. Whilst it is theoretically possible for the sole trader or partnership to extend his business extensively in competition with large companies it 1s highly improbable as the advantages ot limited liability-• the ability to finance growth and the continuity ot the enterprise all tend to greatly advantage corporate structure. iheretore references to the business organisation or enterprise will, in most cases. embrace the corporation. To understand the modern business organisation one must examine its evolution and the development of attitudes which - 7 - tashioned its growth. (A) DEVELOPMENT OF BUSINESS ORGANISATION. Whilst the business organisation as we know it to-day has developed over several centuries, it is only within the last half century that it has reached a degree of sophisti­ cation and. complexity, part1cularl7 in the United States of \ America, necessitating the rise or a new breed of business administrators. Business impetus, in many ways, bas followed from the discoveries of science. In exploiting these scientific opportunities, business bas built its empires and created its unique society which is represented by the corporationo 'lhe industrial revolution in England heralded such discoveries aa the flying shuttle and spinning jenny, the use of coke instead of charcoal, the cylindrical air pump, the steam hammer and. the rolling mill• and the great discovery ot steam as a source of power. These were only a few ot the ways in which men forced change, a process which in itself was a revolution. 'lbe tradition·oriented society of previous centuries distrusted change and retarded creative etfort in the sciences.
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