How Leadership Contributes In The Company's Success And Crisis Management
INTRODUCTION
A generic meaning of the term “leadership” is the ability to lead, influence, command, and guide people. A leader influences to direct and coordinate the activities of the members of a company i.e. an organized group toward the accomplishment of group objectives. In the words of John.C.Maxwell, “A leader is the one who knows the way, goes the way and shows the way.”
A company deals with the ever changing markets, customers, trends, and technologies. To effectively tackle these challenges, the company requires to harness the skills, ideas, and enthusiasm of the entire team channeling this to catapult the company to the peak of success, a good leadership plays a crucial role. Therefore, a leader is responsible for success of a company and is also responsible for crisis management.
ROLE OF A LEADER IN COMPANY’S SUCCESS
Leaders are heavily invested and relied upon to achieve success, inter alia, by leader’s capability to seamlessly tie the production factors of land, labour, capital and entrepreneurship together; and demonstrating right quality traits, abilities, and leadership skills. Some of the most important skills being:
a.Establishing company’s vision, mission and strategy;
b.Setting the organizational culture by fostering free and open communication with employees which paves the way for creativity and ingenuity;
c.Guidance and motivation of the team members;
d.Pushing the boundaries of productivity and invention by implementing brainstorming and mind mapping to develop ideas which will solve business problems.
The leader is also required to be equally capable in handling the crisis situations which are inevitable in any organization.
CRISIS MANAGEMENT
Undoubtedly, a leader’s both business skills and behavioral skills are pushed to limits in event of crisis. A leader exerts his authority to delegate orders and expect strict compliance while understanding and empathizing with the stress his team is under. While coming to a solution for the problem, the leader needs to demonstrates balance between the interests of the company as well as the employees.
The leader may minimise or deal with disasters like fire, or chemical hazards, etc., by complying with the legal requirements and implementing necessary safeguards required for the safety, health and welfare of the employees. For example, in accordance with the Factories Act 1948, an occupier of an establishment has to ensure the health, safety and welfare of all the workers while they are at work in the factory. It is obligatory for an employer/occupier to ensure the provision and maintenance of plant and systems of work that are safe and without health risks. Arrangements should be made to rectify risks involved in use, handling, storage and transport of articles and substances. Tools, equipment, machines, or products used must be organized properly guaranteeing the safety of workers. The employer is obliged to take care to protect the worker’s health and safety by providing the means of rescue, the first aid, and the cleanup; and arrangements and organization of the workplace. Further, the leader is envisaged with liability in case of mishaps in the factories. The Supreme Court in John Donald Mackenzie v. Chief Inspector of Factories, Bihar, 1961 II LLJ 412 (S.C. 3J) had held that unless it is shown that by the execution of a document or passing a resolution, ultimate control over a factory was completely transferred by the owner to another person, such person is not the occupier of the factory. Further, under the Employee’s Compensation Act 1928, it is the employer who is responsible to pay compensation to the workers who are injured in the course of duty. Therefore, it is the leader of the company who are responsible for the maintaining and ensuring safety and health of the workers and also liable in cases of mishaps.
Labor unrest is one type of crisis that is unique to unionized companies. The labor-related crises that they are likely to experience include strikes, picketing, violence, negative public perceptions etc. In these cases, it is the responsibility of the leader to resolve the situation by balancing the needs of the labour and the company, by understanding the needs of the labors and dealing with it accordingly. The leader may resort to legal remedies as provided under the Industrial Disputes Act, 1947 that provides for collective bargaining by negotiation and mediation and, failing that, voluntary arbitration or compulsory adjudication with the active participation of trade unions. A settlement arrived at through collective bargaining is binding.
CONCLUSION
Therefore, the leader of the company impacts the management of labor relations that is sine-qua-non in resolving the disputes between employers and labor unions in form of strikes, lockouts, etc. in order to promote efficiency, and a sustaining relationship between the employers and labor unions as well as to foster proactive remedies and solutions on the problems in the institution.
By - Anshul Prakash, Partner & Parag Bhide, Principal Associate, Khaitan & Co
