LEADERSHIP AT AIG: DOES STYLE MATTER?
This case deals with executive leadership styles. In particular, this case deals with American International Group, the world’s insurance company, and its CEO Maurice “Hank” Greenberg. Greenberg, an autocratic leader, was recently deposed by his board of directors after problems emerged regarding possible earning manipulation. It describes his leadership style, reasons his two sons (former employees) left the company, and Martin Sullivan, Greenberg’s successor. Like his former boss, Sullivan micromanages the organization, but is well liked by employees.
1) To show students the impact of autocratic leadership style on employees.
2) To distinguish between micro and participative management in an organization.
3) To introduce the concept of leadership succession and its effects on organizations.
This case presents various leadership styles used by CEOs. It suggests that executives who uses a more participative leadership style are more likely to create an effective employee workplace.
Relationship to Part 4
The relationship of this case to part 4: leadership and its styles, possible motivation of employees through style, the encouragement of team work and communication. This case can draw on various theories in all four chapters of Part 4.
1. AIG Chairman and CEO Maurice “Hank” Greenberg was considered an autocratic leader and a micromanager by many employees; yet the company grew dramatically during his reign as CEO. Does leadership style matter as long as the company performs well and shareholders are satisfied with their return on investment?
Leadership does matter. A company may perform well, and shareholders may be satisfied with their return on investment, but on another level this style of leadership may do irreparable hard to employee effectiveness and morale. Eventually autocratic leadership will take it toll on the organization and its ability to operate effectively. Question
2. AIG’s new CEO Sullivan has been labeled a micromanager, but with a more pleasant personality. Can he, as a micromanager, develop a more participative leadership style? How?
It may be very difficult for a manager/leader to change his management and leadership style. There is indeed a time and place for autocratic leadership (e.g., when time is limited), but we know that participative leadership often produces better results. While it is often difficult for executives (managers) to let go and delegate more to underlings, AIG’s new CEO Sullivan can learn to develop a more participative leadership style. He must begin to create more teams, motivate more employees to participate in corporate activities, and communicate more effective. In part, his micromanagement style may be a result of following Greenberg’s lead. As Sullivan becomes more comfortable in his new role, he should be able to delegate more effectively, especially if he is to deal with more strategic corporate issues. Leadership is a very important aspect that is prominent in our professional life. If a team is led by an effective good leader, the team is more likely to perform well as per the expectations of the project. On the other hand, if the leader is a person who just issues orders and commands the tasks to be done, the team is demotivated and does tend to perform less than they actually can. If you are a working professional, you might have got an idea about the types of leadership styles and techniques. The working and managing style of a leader plays a very important part in making the leadership role effective.
There are various managers who adopt different leadership styles and methods for employee and process management. Each leadership style has its own methods, behavior, effects, and aspects. Participative leadership is a very significant leadership style...