Meg Whitman Leadership Case Study
PhD Bruce Avolio (2009) spent 50 years collecting data on the topic of whether leaders are born or made. In his findings, he discovered that most psychologist believe that the qualities needed to be a leader are innate and cannot be learned, however he and his contemporaries disagree. Based on various interviews, they found that parents were able to give the children the initial tools needed to lead. Parents would encourage their children to set challenging goals and should they fail, parents were able to turn it into a lesson of how to win next time.
Reflecting on the sports of my own son, I can agree with this point of view. Whenever his team did not win or he did not play his best, we would identify areas of improvement he could work on for the next game. Avolio and his colleagues were able to identify techniques to help those who aren’t born leaders, become a leader: “Visualize obstacles; set goals and find someone who will hold you accountable to them; seek and incorporate feedback from colleagues; reflect on your best and worst moments; train gradually; broaden your model of leadership to include a full range of styles; and honor high ethical standards. (Avolio, 2009) These are qualities held by Meg Whitman, former CEO of eBay. Although there are many types of leadership models, we will discuss Transactional, Authentic and Transformational leadership. They are defined as such: 1. Transactional leadership involves motivating and directing a group, through the pleasing of their own self-interest. 2. The Authentic leader is one who (A) not only knows them self, but also understands them self, (B) Is familiar with their own belief system and values and (C) Uses open and honest communication with subordinates and others when acting on their values and beliefs. . The Transformational leader can anticipate the future, encourage followers to embrace a new idea, develop new supporters and create them into leaders as well as guide the organization into a community of brave yet rewarded learners. (Hellriegel & Slocum Jr, 2010) Transaction Leadership As stated by Don Hellriegel and John Slocum (2010) Transactional Leadership entails motivating and directing a group, through the pleasing of their own self-interest. It’s kind of like dangling a carrot; you set the expectations and goals, while providing feedback and rewards.
A Transactional leader’s power comes from their official role in the company; their primary focus is controlling, organizing and planning. They have identified three components that are viewed as prompting the followers to achieve recognized performance goals. These components consist of: 1. Provide Contingent rewards: Although eBay’s work environment is casual and fun, they are strictly about business in a cheerful and informal way. Meg Whitman has made it apparent that expectations of employees are high. Employees are rewarded through reorganization; they have the opportunity to look forward to new challenges on a regular basis.
This could be considered a contingent reward because the leader has set and clearly defined goals to be obtained, in a short amount of time. In addition, Meg decided early on the direction she wants the company to take. By identifying the path early, Meg was able to acquire other businesses that would promote growth for eBay and fit the core of the business. 2. Exhibit active management by exception: Transactional leaders actively monitor the work performed by their subordinates. At eBay, they look for people who are energized by the mission alone.
The employees are given a chance to become acclimated to the company; through close monitoring employees are well managed and focused on high-impact projects. 3. Emphasize passive management by exception: With such emphasizes being placed on employees understanding the nature of their position and the accountability expectations, Meg Whitman and the management team at eBay, does not allow for deviations from the company’s standards, which demonstrates the passive management exception of a transactional leader. They do not wait for mistakes to occur so they can dole out punishments.
This transactional model is viewed as necessary but insufficient in maximizing leadership potential. (Hellriegel & Slocum Jr, 2010) Authentic Leadership Meg Whitman has established a line of trust and won the respect of her subordinates as well as that of other leaders and clients by having a vision to take eBay to a level of a household name. As an Authentic leader, one has to stimulate their followers; Meg Whitman does this through the offering of new challenges and giving the employees growth in a variety of areas. eBay employees are excited about the company’s mission; they are cheerful and are refreshed periodically as employees.
In addition, customers are also stimulated; the company utilizes e-mail, message boards, and virtual communities to create bonds with the customers and to monitor the behavior of both the seller and the buyer. Meg began creating hope by her promise to transform eBay from an on-line auction to a place that you can buy anything you want. She led many acquisitions to bring in businesses such as PayPal, Skype, Shopping. com and many more. These acquisitions only added to the core business of eBay for more strength. Trust is demonstrated by the millions of items that are listed each day by people from all over the world.
The employees at eBay are very clear of what is expected of them and they believe in the eBay mission. Although eBay looks like a dotcom business, surrounded by free sodas, souvenirs, figurines and beanie babies, the employees are all about business, statistics, numbers and the bottom-line results. Meg demonstrated her ability to be trusted when one of her employees took ill on a business trip; she left the company jet for him to get back home while she and the other employees took a commercial flight after they completed their business travels.
She stayed with him for hours until he was stable and spoke with his wife on the phone. Her display of compassion is just one attribute that raises the optimism of the employees and reflects her ability to be trusted. The Authentic Leadership model implies that this type of leadership, coupled with experience and discipline will result in superior organizational performance in the end (Hellriegel & Slocum Jr, 2010) Transformational Leadership Hellriegel and Slocum (2010) go on to discuss the key components of the Transformational Leadership Model.
The components that are inherent of a Transformational leader are: 1. Individualized consideration – the transformational leader will give individual attention to followers for the purpose of achievement and growth. New employees are given the opportunity to get a clear understanding of the business the first three months. They are well managed, their focus is guided in the direction of high-impact projects and they are clear of the expectations of their accountability. 2. Intellectual stimulation – transformational leaders encourage their employees to be innovative and become out of the box thinkers.
Employees are kept fresh by giving them new challenges often. They even have the opportunity to hear from the users, who have a chance to express their idea for improvements in the company. 3. Inspirational motivation – the transformational leader is capable of explaining their vision in such a way that the goals are understandable and easy for followers to identify necessary actions. The work environment is cheerful and informal, however the conversation with eBay employees consist of plans, systems, numbers and results. They understand the expectations and the bottom-line. They share the same vision as Ms.
Whitman and accept the vision as their own. The company looks for employees who are inspired by their mission, that their next-door neighbor has a chance to be successful without being a large corporation. 4. Idealized influence – transformational leaders exhibit the behaviors for which employees are to strive. Meg Whitman is a woman of vision, confidence and determination. Her experience at Procter & Gamble, Bain Consultant and Hasbro gave Meg the discipline needed to establish her position, with confidence, for eBay to become a full service Internet retailer, synonymous to Wal-mart.
As the strength of eBay and one of the best CEOs in America, Meg Whitman recognizes her growth as she states, “I’m a better leader, a better manager, a better executive than when I arrived as a youngster. I have learned how to manage a company that reinvents itself every couple of years’ (Hellriegel & Slocum Jr, 2010). The constant reorganizing of eBay not only gives Meg Whitman many opportunities to learn but also the other eBay employees. In addition, she will go out of her way for her employees as needed and the employees appreciates this display, which gives them a desire to doing the right thing.
Transforming eBay to a General Purpose Shopping Destination After becoming CEO, Meg began her quest to take the company to full-service Internet retailer. She identified the path and acquired other businesses to begin the growth process for eBay, these included PayPal, Skype, shopping. com, rent. com, On-line Classifieds and StubHub. The work environment is casual but the operation is corporate and executives function like brand manager; instead of products, they handle data. The employees recognize that Whitman is about statistics and bottom-line results; they not only have the numbers but they know them.
They also recognize the transition that eBay has made from a marketplace of collectibles to a diversified trading platform. Because the company does not manage inventory it makes it easier for the company to be profitable. Using e-mail, message boards and virtual communities, eBay is able to build relationships with buyers and sellers; all the while eBay is collecting fees on the tiniest transactions. The secret weapon for eBay is to continuously, expand the marketplace and services to communities around the world, not just the U. S. This is where all the acquisitions come into play. Hellriegel & Slocum Jr, 2010) Meg Whitman’s Leadership Style In the U. S. News & World Report, William Meyers describes Meg Whitman as one who leads with a gentle hand and uses delicate steering to influence relationships. (2005) It is surprising to learn that Meg works from a cube, ask lots of question and converse with employees, to include sharing the information that she learns. In many work environments, it is rare that the top-level executives will share anything with their employees or ask any concrete questions to learn what is truly happening in the company.
Transparency is her weapon of choice to earn her employees trust. Meg also utilizes two-way communication between the employees and the buyers for creating a collaborate network. Three strategies were identified: 1. You can’t control buyers or sellers. Meg recognizes that the buyers and seller do not work for her and if they choose not to, they do not have to show up for work. 2. People are generally good, so trust them. She initially learned this from Pierre Omidyar, founder of eBay. 3. Don’t assume you know more than the marketplace, you don’t! Meg listens for the purpose of learning to put together the right questions. Meyers, 2005) In Associated Content, Meg is described as a “charismatic leader who uses influence rather than force, and that influence inspires trust in her vision that leads to trust in her as a person” (Sexton, 2007). In the case, Meg’s employees have felt inspired to do the right things, because of her genuine act of kindness and compassion. The employees have opportunities for new challenges and they work in an environment that is casual and cheerful. She is upfront about her expectations, making it easy to trust. Her philosophy is work in collaboration with management, employees and the users to make eBay a better company.
When responsibilities and expectations are clearly laid out, there is no room for guessing and it creates an environment of respect. To establish trust in her customers, Meg leads by example through the distribution of power downward to the customer base. She recognizes that she does not have control over the customers; therefore, Meg handed over a tremendous amount of power to the merchants and the millions of buyers. Loyalty is glue that holds eBay, its employees and customers together, the company’s quick responses to various situations and anything that affects the spirit of the team.
In Fortune magazine Patricia Sellers (2004) states, “Whitman and her team are building and tuning what many consider to be the company of tomorrow – – a model 21st- century organization of minimal staff and maximal profitability. ” The success of eBay lies in the teamwork and the pursuit of individual goals, while working towards the company’s goals. Mr. Timothy Sexton finds Meg Whitman to be an attractive model for executive leadership. (2007) References Avolio, B. (2009, June 5). Are leaders born or made? Retrieved May 19, 2010, from Psychology Today: http://www. psychologytoday. com/articles/199909/are-leaders-born-or-made Hellriegel, D. & Slocum Jr, J. W. (2010). Organizational Behavior. Mason: Cengage Learning. Meyers, W. (2005, October 31). Keeping a gentle grip on power. Retrieved May 19, 2010, from U. S. News: http://www. usnews. com/usnews/news/articles/051031/31whitman. htm Sellers, P. (2004, Retrieved from Business Source Premier database. ). eBay’s secret (cover story). Fortune , pp. 150(8), 160-178. Sexton, T. (2007, February 20). eBay’s Meg Whitman: america’s greatest CEO? Retrieved May 19, 2010, from Associated Content: http://www. associatedcontent. com/article/151915/ebays_meg_whitman_americas_greatest. html? cat=3
