Divine Leadership in Business

Linkage to Business Performance

barretta61 — Thu, 21 Aug 2008 04:32:34 +0000

Sirota et al. (2005) describes building a positive workplace for employees as “winning the battle for the hearts of workers” (p.53), and they cite compelling evidence that illustrates the benefits of accomplishing this successfully. They created surveys that focused on questions such as whether employees were trusted to make their own decisions and make improvements to their own job, whether employees‘ achievements were recognized and rewarded, and whether the work environment was collaborative so that employees worked well together with minimal politics and conflicts. They issued these surveys to over 135,000 employees in 40 companies. From this data, they categorized the companies into high, moderate, and low morale, based on employees’ enthusiasm level. They then compared the stock market performance of each surveyed company with the performance of other companies in their industry. They found that the companies with high employee enthusiasm performed about 20% better than others in their industry, whereas the companies with moderate or low employee enthusiasm performed about 5% worse than others in their industry. The evidence shows that companies that are more divinely led experience better financial results.

Bibliography

barretta61 — Mon, 18 Aug 2008 03:23:17 +0000

The following sources have been or will be referenced on this blog:

Aburdene, P. (2005). Megatrends 2010: The rise of conscious capitalism. Charlottesville, VA: Hampton Roads.

Castells, M. (2000). The network enterprise: The culture, institutions, and organizations of the information economy. In The rise of the network society (pp.163 – 210). Malden, MA: Blackwell.

Collins, J. C., & Porras, J. I. (1994). Built to last: Successful habits of visionary companies. New York: HarperCollins.

Conlin, M. (1999, November 1). Religion in the workplace. Business Week, 151-158.

Der Hovanesian, M. (2003, July 28). Zen and the art of corporate productivity. Business Week, 56.

Eisler, R. (2002). Your work and community relationships: The widening circle of caring. In The power of partnership: Seven relationships that will change your life (pp. 61-87). Novato, CA: New World Library.

Garcia-Zamor, J.C. (2003). Workplace spirituality in the United States and the former East Germany. In Giacalone, R.A. & Jurkiewicz, C.L. (Eds.), Handbook of workplace spirituality and organizational performance. Armonk, NY: M.E. Sharpe.

Gunther, M. (2004). Faith and fortune: The quiet revolution to reform American business. New York: Crown Business.

Hoffman, W. (2006, November 6). Toyota gains ground: Supply chain initiatives help Toyota gain market share, sales in United States as rivals flounder. Trafficworld,15.

Kanter, R.M. (1989). When giants learn to dance: Mastering the challenge of strategy, management, & careers in the 1990’s. New York: Simon and Schuster.

Marques, J., Dhiman, S., & King, R. (2005). Spirituality in the workplace: Developing an integral model and a comprehensive definition. The Journal of American Academy of Business, 7(1), 81-91.

Nur, Y.A. & Organ, D.W. (2006). Selected organizational outcome correlates of spirituality in the workplace. Psychological Reports, 98, 111-120.

Pfeffer, J. (1998). The human equation: Building profits by putting people first. Boston: Presidents and Fellows of Harvard College.

Pfeffer, J. (2003). Business and the spirit: Management practices that sustain values. In Giacalone, R.A. & Jurkiewicz, C.L. (Eds.), Handbook of workplace spirituality and organizational performance. Armonk, NY: M.E. Sharpe.

Russo, M.V., & Fouts, P.A. (1997). A resource-based perspective on corporate environmental performance and profitability. Academy of Management Journal, 40(3), 534-560.

Sirota, D., Mischkind, L.A., & Meltzer, M.I. (2005). The enthusiastic employee: How companies profit by giving workers what they want. Upper Saddle River, NJ: Wharton School.

Networked Companies

barretta61 — Mon, 18 Aug 2008 03:05:30 +0000

Companies that embrace external parties as true partners in win-win partnerships to create strong networks of integrated services are outperforming companies that operate autonomously. Castells (2000) describes how large, multi-national corporations have created huge, extended networks by engaging smaller businesses as service providers. He cites evidence that large networks of companies are thriving in the global economy, whereas traditional companies that attempt to operate independently are ill-adapted to the global economy. To make these extended networks successful, the large corporations must relinquish their traditional command and control models and accept the smaller external parties as true partners (Castells, 2000).

Visionary Companies

barretta61 — Mon, 18 Aug 2008 02:57:50 +0000

Many companies that practice divine leadership have explicit goals to provide beneficial service to society, and in turn these companies generate higher levels of financial success as compared to their counterparts. Collins and Porras (1994) performed extensive historical research on eighteen extremely successful ’visionary’ companies that have been highly profitable for over 40 years to determine how they differed from comparison companies in the same industry that have profited for roughly the same number of years but have not been as successful. They found that the visionary companies shared several key traits that distinguished them from the group of comparison companies. One of the key differences they found is that the visionary companies have been clear that they exist for reasons beyond just making a profit. They understood that profits are important, but they were guided by a deeper ideology that provided a sense of purpose reflecting the values of the leaders. The ideologies for all of the visionary companies were founded upon making a positive contribution to society and providing a genuine service with true value to customers. Visionary companies consistently based their decisions on their ideology. One example provided was Merck, the visionary pharmaceutical giant, whose CEO said in 1950, “We try to never forget that medicine is for the people. It is not for profits. The profits follow, and if we have remembered that, they have never failed to appear” (p.94). In contrast, the comparison companies did not generally embrace a deep ideology and tended to base their decisions and practices on maximizing profits. The visionary companies, which focus on providing social benefits, have consistently been more profitable than the comparison companies (Collins & Porras, 1994).

Positive Work Environments

barretta61 — Mon, 18 Aug 2008 02:45:01 +0000

Divine leadership creates the most positive and satisfying work environments for employees, and in return the companies that practice this style of leadership generate the highest financial success. According to Garcia-Zamora (2003), a Harvard Business School study selected, from a list of 207 leading corporations, ten companies that placed a strong emphasis on showing appreciation for employees and ten companies that did not and then compared their profitability over an eleven-year period. They found that the companies with strong employee appreciation experienced dramatically higher profitability and in some cases they outperformed those without by 400 to 500% in terms of net earnings, return on investment, and shareholder value. Aburdene (2005) cites the example of a Watson Wyatt Worldwide study that surveyed 400 public firms. The companies with the most employee-friendly practices, such as flextime and an emphasis on employee development, generated stock market returns of 103 percent over five years while companies with the fewest generated returns of only 53 percent. Similarly, the winners of Fortune’s “100 Best Companies to Work For” contest, which surveys employees’ satisfaction with how they’re treated by their company, consistently outperformed the broader market by 300 percent over the last seven years (Aburdene, 2005). Sirota, Mischkind and Meltzer (2005) point out that for many years, generally the same companies appear on both Fortune’s “America’s Most Admired Corporations“, which is based on business performance and on Fortune’s “100 Best Companies to Work For”.