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Assignment 2.1 Profitel Inc.

Which perspective of leadership best explains the problems experienced in this case?

Chapter 12, Leadership In Organizational Settings, discussed five perspectives of leadership – (1) competency, (2) behavioral, (3) contingency, (4) transformation, and (5) implicit. The competency perspective of leadership best explains the problems experienced by Profitel.

Profitel had many years of extreme profitability and minimal competition. As competitors entered into the telephone market, Profitel’s board of directors recognized that the competition in the cellular and voice over IP business posed a threat. The board responded by hiring an outsider to become the new CEO.

The board decided to hire Lars Peeters, an executive who served as the CEO for a publically traded European and CEO for a cellular telephone company in the United States. Lars appeared to be a perfect fit; he had extensive industry knowledge and global experience, a high-octane energy level, self-confidence, decisiveness and a persuasive style. Of the various leadership competencies listed in the text (personality, self-confidence, drive, integrity, leadership motivation, knowledge of the business, cognitive and practical intelligence and emotional intelligence), Lars appeared to have most of them.

However, McShane1 (pg. 352-355)points out that competency perspective have limitations and practical implication. The competency perspective assumes that all effective leaders have the same personal characteristics. Some competencies might not be important all of the time and an alternative combination of competencies may be equally successful. In addition, leaders tend to rely mainly on one style that is consistent with their personality and values. Competencies indicate leadership potential and not performance.

Lars Peeters’ leadership competency contributed to the problems experienced by Profitel. His strategy presented to the board was quite aggressive and...
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