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Qualification BTEC Level 4 HND Diploma in Business

Unit number and title Unit 4: Leadership and Management (5036)

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Student name Huynh Khanh Vy Student ID GBD210067

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Table of Contents

I. INTRODUCTION ................................................................................................................................................ 5

II. INTRODUCTION ABOUT THE COMPANY ........................................................................................................... 5

III. LEADERSHIP AND MANAGEMENT CONCEPTS .................................................................................................. 6

1. MANAGEMENT .................................................................................................................................................... 6
1.1 MANAGEMENT ........................................................................................................................................................... 6
1.2 MANAGER.................................................................................................................................................................. 6
2. LEADERSHIP ........................................................................................................................................................ 6
2.1 LEADERSHIP ...................................................................................................................................................... 6
2.2 LEADER ...................................................................................................................................................................... 6
3. THE KEY SKILLS AND COMPETENCIES OF EFFECTIVE LEADER AND MANAGER ........................................................................ 6
A) THE KEY SKILL OF EFFECTIVE MANAGER .............................................................................................................................. 6
B) THE COMPETENCES OF EFFECTIVE MANNAGER .................................................................................................................... 7
C) KEY SKILLS OF EFFECTIVE LEADER ...................................................................................................................................... 8
D) THE COMPETENCES OF EFFECTIVE OF LEADER ...................................................................................................................... 9
2. DIFFERENCE BETWEEN LEADERSHIP AND MANAGEMENT ............................................................................................... 9

IV. LEADERSHIP AND MANAGEMENT THEORIES ................................................................................................. 10

1. MANAGEMENT APPROACHES ............................................................................................................................ 10

2. LEADERSHIP THEORIES...................................................................................................................................... 12
A. BEHAVIORAL THEORY ................................................................................................................................................... 12
B. CONTINGENCY THEORY ................................................................................................................................................. 12

V. LEADERSHIP & MANAGEMENT STYLES ........................................................................................................... 13

1. MANAGEMENT STYLES ........................................................................................................................................ 13

2. LEADERSHIP STYLES ............................................................................................................................................ 15

VI. ORGANIZATIONAL CULTURE ......................................................................................................................... 15

1. TYPES OF ORGANIZATIONAL CULTURES ................................................................................................................. 15

2. VARIOUS FACTORS INFLUENCING THE DEVELOPMENT OF ORGANIZATIONAL CULTURE ...................................................... 17
3. THE IMPORTANCE OF ORGANIZATIONAL CULTURE ON ORGANIZATIONAL PERFORMANCE.................................................. 18

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VII. CONCLUSION ............................................................................................................................................... 19

REFERENCES ...................................................................................................................................................... 20

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I. Introduction
Leadership and management are critical to an organization's success and performance. The two terms are
commonly used interchangeably, yet their views are distinct. This essay will differentiate the two ideas,
construct leadership and management approaches, and critically assess Porsche leadership and
management theories, the company's impact on decision-making, and other elements influencing their
organizational culture

II. Introduction about the company

Porsche AG was founded in 1931 in Stuttgart, Germany. Over 100 years of operation, from the year
Porsche founder Ferdinand first launched the company manufacturing tanks with aluminum body to now.
Currently, the company has had a great influence on the automobile industry as well as affirming the brand
status. Porsche is a brand that holds a large share of high-performance sports cars. Although Porsche's
car price segment is quite high, its reputation is widely known because there are more than 650 dealers
and more than 100 showrooms around the world. In addition to the manufacture and maintenance of its
own vehicles, Porsche is also responsible for providing automobile services for other brands such as
Volkswagen, Audi, SEAT, and SKODA (Porsche, 2022).

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III. Leadership and Management concepts
1. Management

1.1 Management

According to Taylor (1911), management is the art of determining what you want to achieve and then
ensuring that it is accomplished in the most efficient and cost-effective manner possible.
The executives refer to the process of leveraging hierarchical resources to achieve authoritative goals
through the aspects of planning, organizing, and staffing, driving, and controlling (DuBrin, 2011).

1.2 Manager

A manager is in control of the group's work performance. Even when the authorization of others is
required, a manager has the formal authority to commit organizational resources (DuBrin, 2011).
Managers are accountable for completing tasks successfully with and via other people, as well as creating
and achieving the firm's objectives, through the execution of four key management capacities: planning,
organizing, leading, and controlling (Carpenter, et al., 2010).

2. Leadership
2.1 Leadership
Leadership is simply the acts that revolve around generating confidence and a supportive mentality across
a whole company in order to attain a certain objective (DuBrin, 2011). In addition, the author of the book
"Leadership: Theory and Practice" - Peter G. Northouse describes leadership as a strategy through which
one individual supports a group of individuals to attain a common objective.

2.2 Leader

A leader identifies opportunities for change and inspires others to strive toward a common goal. Leaders
may try to make their vision a reality while also concentrating on developing people (Morgan, 2020)

3. The key skills and competencies of effective leader and manager

a) The key skill of effective manager

Technical skills: Understanding and competency in a certain activity including methods, processes,
procedures, or techniques is referred to as technical skill. A well-developed technical talent can help you
advance to management. Intricate business knowledge, such as devising a marketing campaign, may also
be considered a technical talent (DuBrin, 2011).

Interpersonal (or HR) skill refers to a manager's ability to function effectively as a team member.
Communication skills are a crucial component of interpersonal skills and serve as the foundation for

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delivering and receiving messages on the job. Interpersonal skills are more crucial than technical abilities
in advancing to the top and offering leadership to others. Bilingualism is important for managers as well
as other workers (DuBrin, 2011).

Conceptual skill: The ability to see the organization as a whole is called to as conceptual competence. It
entails understanding how the many components of the organization are interdependent and how
changes in any one portion influence all of the others. Because senior managers have the greatest touch
with the outside world, conceptual skill is a priority for top-level management (DuBrin, 2011).

Diagnostic skill: Managers must combine technical, human, intellectual, and political abilities to address
issues, diagnostic skills are usually needed. Much of the potential excitement in a manager's job is around
identifying and resolving difficulties. (DuBrin, 2011).

Political skill: Managers who place too much emphasis on political skills at the detriment of accomplishing
substantive work are preoccupied with pleasing business insiders and boosting their own careers.
Managers apply political skills to get the authority required to achieve their goals. Too much time spent
on workplace politics detracts from dealing with customer issues and enhancing efficiency. (DuBrin, 2011).

b) The competences of effective manager

The skills, habits, motives, knowledge, and attitudes required to effectively manage people are termed as
management competencies.

Interpersonal communication includes the ability to recognize, analyze, and predict others' feelings,
problems, and thoughts; the ability to empathize and effectively communicate (Indeed , 2022).

Motivating others is about bringing people together and motivating them in order to achieve common
goals, which is used to encourage productivity (Indeed , 2022).

Problem Solving: When problems arise, good problem solvers are quick to prevent escalation of conflict
between employees, empower employees to seek information that improves their ability to develop and
assess a variety of potential solutions (Indeed , 2022).

Vision/planning which means having a vision is the ability to outline a clear and vivid plan to accomplish
shared objectives (Indeed , 2022).

Creativity/innovation: Creative people can see problems from new perspectives and generate insights
into problems. They are prepared to challenge the status quo and, where required, create new processes.
People that are creative can perceive challenges in fresh ways and come up with useful solutions (Indeed
, 2022).

Conflict resolution: Employee conflict will inevitably arise at some point. It is the responsibility of a leader
to find solutions that satisfy all sides engaged in a disagreement. Unresolved disagreements may affect

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relationships and have an influence on company culture, thus it's critical for leaders to improve their
conflict resolution skills (Indeed , 2022).

Delegation
Effective leaders recognize that they cannot achieve everything on their own. They are aware that they
will need the assistance of others in order to achieve goals.
They can quickly achieve goals by leveraging the knowledge of others since they know who is the greatest
match for each assignment. They successfully disperse duties by recognizing the talents of others (Indeed
, 2022).

Valuing Diversity: Every team member has their own system of beliefs, experiences, cultural backgrounds,
and ambitions. Good leaders provide a welcoming environment for all employees. They value each
person's unique talents and ideas and use them to achieve common goals (Indeed , 2022).

Provide high-impact performance feedback: Effective managers understand how to deliver regular
positive and constructive feedback in a way that inspires both under-performing and high-performing
employees in order to help them develop to their maximum potential ( Blum, 2014).

Maximize your leadership strengths: A strengths-based management style guarantees that managers are
aware of their own capabilities and engage with workers and the leadership team in a way that capitalizes
on their own skills. Effective managers are also aware of their workers' capabilities and intentionally offer
growth opportunities that capitalize on those skills ( Blum, 2014).

c) Key skills of effective leader

Here are the top skills that make a strong leader in the workplace.

Communication: Explain everything to workers, from corporate goals to specific tasks, in a clear and
concise manner (DuBrin, 2011).

Motivation: Empower employees to go above and beyond for the organization (DuBrin, 2011).

Delegating: Identify each employee's talents and allocate tasks to each employee depending on his or her
skill set (DuBrin, 2011).

Positivity: In the workplace, a pleasant attitude may go a long way. This contributes to a joyful and healthy
work atmosphere, especially during hectic and stressful times (DuBrin, 2011).

Trustworthiness: Employees will only trust leaders they respect, hence it is critical for the leader to exhibit
their honesty. By being transparent and honest, the leader encourages the same level of honesty in his or
her subordinates (DuBrin, 2011).

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Creativity: Leaders must make a number of decisions for which there is no obvious solution, thus they
must be able to think beyond the box (DuBrin, 2011).

Problem-solving: Leaders must use their ingenuity and practical expertise to tackle workplace difficulties
(DuBrin, 2011).

d) The competences of effective of leader

Integrity: Leaders with integrity are honest, humble, and dependable. Maintaining your company's or
organization's values and principles are some strategies for boosting your integrity. Admitting your faults
in an open and modest manner should be prioritized in all professional interactions. Doing the right thing
even when no one is looking is an example of integrity. (Indeed, 2020).

Problem-solving: To overcome difficulties in the workplace, leaders must apply their ingenuity and
practical expertise. Knowing the ins and outs of your job field is an important part of problem-solving.
Expert assistance may be obtained by researching the specifics of your career, workplace, and industry.
Investigate logical thinking abilities and how to use them in the job (Indeed, 2020).

Teamwork: The ability to work well with others is a key trait in a leader. Teamwork entails putting the
good of the collective ahead of personal gain. A good leader understands what each member of their team
can provide to a project. They are familiar enough with their team to understand and utilize their members'
strengths. An effective leader will be willing to give others the opportunity to excel and demonstrate skills,
willing to help people, etc (Indeed, 2020).

Responsible: Leaders responsible for underperformance are more resilient because those leaders who
take responsibility for their failures are sending an important signal to the market. They are saying that
they are aware of a situation and are doing everything in their power to fix it. So taking responsibility for
both success and failure makes the leader more believable instead of blaming and it triggers an unwanted
reaction (Barthélemy, 2014).

Giving and receiving feedbacks: Leaders should take in employee feedback to correct their own
shortcomings, otherwise this leader will continue to practice the same management style, resulting in a
disgruntled and unmotivation staffs. Leaders also need to give feedback to their employees. That is not
only to get the best output, but also to motivate and develop the staffs (Fond, 2020).
In addition, leaders also need to cultivate a number of other abilities such as agility, observation skills,
sensitivity management and diversity and so on.

2. Difference Between Leadership and Management

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According to Algahtani (2014), Management and leadership share activities such as dealing with a large
group of people and persuading personnel to achieve corporate goals. However, there are significant
distinctions between management and leadership. Leadership is more macroscopic than Management.
Having a vision is a must for any leader, leadership requires persuading a large group of individuals to
cooperate and work together. The task of a leader is to give the big picture, strategies, direction for the
organization to develop and so on. At the same time create motivation and inspiration for its employees.
As for the Management, it will be more formal and specific. The manager is a multi-directional relationship
of influence, developing plans, assigning tasks and budgets, and directing projects in a more specific way
to achieve goals. Management will be maintenance, focused on clear strategy, and effective control of
work applied in situations and based on logic and experimentation (DuBrin, 2011).

IV. Leadership and management theories

1. Management Approaches
The following table illustrates how management approaches.

Management
Key authors Main contents
Approaches

Scientific
management: The use of scientific approaches to boost
Frederick W. individual workers' productivity.
Taylor (considered the Management was responsible for
The classical theory’s father); Henry Gantt, selecting, training, and assisting workers
approach Frank & in performing their tasks 'properly.'
Lillian Gilbreth Workers' responsibilities was simply to
embrace the new procedures and
perform properly (DuBrin, 2011)

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 The application of management
principles to the structure and
management of an organization. -
Created the idea of "universality
management" based on 14 principles:
division of labor/specialization;
matching power and responsibility;
the scalar chain of command; unity of
Administrative management: command; and subordination of
Henri Fayol & Max Weber individual interests (Henri Fayol).
Created the concept of bureaucracy;
organizations are divided into
jurisdictional areas (e.g., production,
marketing, sales, etc.) with specific
duties; authority to carry them out is
given to officials in charge; rules and
regulations are established to ensure
their fulfillment; managers get things
done because their orders are accepted
as legitimate and justified (Max Weber)
(DuBrin, 2011).
The Behavioral approach emphasizes
enhancing management by gaining a
better knowledge of people's
psychological composition (DuBrin,
2011). Psychology, sociology, and
anthropology are all used to investigate
human behavior. Moreover, this theory
focus on individual productivity and
through efficiency and organizational
Behavioral
The Hawthorne Studies structure (Gordon, 2022).
approach
The behavioral approach to
management is commonly thought to
have begun with the Hawthorne studies
in the late 1920s and early 1930s.
Hawthorne Studies: Provided new
insights into individual and group
behavior was systematically analyzed.

For example, Apple is one of the most organizations that employs Classical approaches and behavioral
approaches to staff management. To be more explicit, Apple follows to Frederick Taylor's (1915) scientific

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management style idea. Apple, for example, use an assembly line to reduce the time required to produce
a single product. The use of the production line not only allows Apple's manufacturing to be united
throughout the world, but it also allows them to easily manage production using machines. They also save
a significant amount of time and money by using machines rather than hiring employees to conduct the
task. Moreover, they make a concerted effort to motivate their employees to attain tough employment
objectives. Apple's proper goal-setting management is always eager to assist in the definition of
performance targets (iq-faq, 2021).

2. Leadership theories

a. Behavioral theory

Behavioral theories attempt to determine the styles of effective managers. The Ohio State University
Leadership Study identifies two distinct elements of leader behavior: task-focused thought and initiating
structure and social behavior of leaders (DuBrin, 2011).
Furthermore, role theory and managerial grid are two different behavioral theories. They concentrate on
the Managerial Grid which is part of a comprehensive management and leadership training program that
covers the basic beliefs and attitudes that influence behavior (DuBrin, 2011). This evaluated a leader's use
of the behavioral attributes "concern for people" and "concern for productivity" on a scale of 1 to 9.

For example, Jeff Benzo is mainly remembered as the chairman, CEO, and founder of Amazon, a
multinational technology corporation. Forbes magazine ranked him one of the world's wealthiest
individuals. He used behavioral theory when running his organization to become such an influential
person, such a brilliant leader. He employs the Management Grid theory, which was developed by Dr.
Robert R. Blake and Jane S. Mouton. Many leadership styles exist, according to this theory, resulting in two
parts of leadership: concern for productivity and respect for people. More precisely, he formed small
groups to focus on specific tasks and obstacles, allowing for more communication and a more effective
(easier and faster) method of identifying and eliminating problems. Large corporations are frequently
connected with hierarchies. He sets the company's ideals, values, and principles and then persuades his
people to adhere to them ( Sattar, 2018). A healthy competitive environment will also support the growth
of the organization and also motivate the teams. The CEO demonstrates a high level of trust in employees
by assigning responsibilities and tasks to work groups that will give them a sense of empowerment,
motivating them to work better (Denning, 2018). Jeff Bezos emphasis on allowing and pushing his people
to always push themselves to improve is critical, which is consistent with behavioral theory.

b. Contingency Theory

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According to this theory, there is no one approach or style of leadership that is suitable to all situations. In
other words, it understands that there may be factors impacting any given circumstance, and that a leader
must choose the right plan of action while keeping those variables in mind (Simplilearn, 2022).
"Effective leadership is about finding the proper balance between needs, context, and conduct,"
leadership scholars White and Hodgson said. The finest leaders not only have the correct attributes, but
also the capacity to gauge their followers' requirements, understand the situation, and act accordingly
(Simplilearn, 2022).

For instance, For Contingency theory we have Oliver Blume (CEO of Porsche) as an example. According to
Blume, "Success is teamwork". For him, the decisive factors are courageous decision-making, cohesive
teamwork and the right strategic direction for the future. He pushed everyone in the company to work
with interest in the mission and focus of the team to achieve the common goal of the company, and usually
in the teams that work well, there will be a clear focus and purpose (AutomotiveWorld, 2020). To get
through the Covid crisis, Blume has also focused more on providing support, direction, and security to the
team. At the same time, making clear, quick, and pragmatic decisions is also important. "The quality of a
team depends on how it is led. That's true in business as well as in sport," with leadership closely related
to responsibility, organization, direction, he said. He outlined his guiding principles while still allowing
people to express the individuality, creativity and flexibility of employees. One can recognize that Blume
is a relationship-oriented leader focused on supporting, motivating, and developing the people on their
team and the relationships ( relation-oriented) (Porsche, 2020) within for the reasons above for how
Blume's leadership will make employees feel energized because they feel appreciated at work. Strong
effort comes from people who feel like they are making a difference and are a part of the company's
success. But some of the challenges of this leadership theory include that employees feel overwhelmed
and can sometimes cause conflict when working in groups. Blume allows its team to participate in input
and sometimes it also dilutes the business vision and no one has a clear view of the direction the company
needs to go. We can also overcome this shortcoming that we can continue to let employees contribute
good ideas, but the leader must carefully consider the actual situation of the company and apply new
ideas. Besides, it is also advisable to explain to everyone about the direction of the manager so that the
employees have a better view of that idea, so that the employees do not feel confused or overwhelmed
about the work.

V. Leadership & Management Styles

1. Management styles
Management style refers to how a manager planned, organizes, makes decisions, delegate, and supervises
their staff. A manager's management style relates to how they go about attaining their goals. The phrase
management style refers to how managers plan, organize, make decisions, delegate, and manage their
staff (Valamis, 2022). The table below shows some management styles:

a. Authoritarian management styles (autocratic style)

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Because of its focus on ongoing guidance and authority, this management style is perceived as controlling.
Authoritarian managers, on the other hand, wield considerable power and have total authority to make
choices based on continual monitoring of employees' development (Valamis, 2022).

Ferdinand Porsche is regarded as a great example of autocratic leadership. He is a gifted innovator who is
enthusiastic about the automotive industry. He is highly demanding and tries to ensure that his ideas are
realized in very particular ways. Porsche requires its employees to adhere to predetermined criteria and
standards. He is likewise goal-oriented and appears to be uninterested in undertakings such as tank
development. This autocratic style to leadership is one of the reasons he has been labeled a lousy leader.
He neglected to listen to his subordinates, which resulted in missed chances. Another argument to label
Ferdinand Porsche a terrible leader is his lack of understanding of the social backdrop. The businessman
made no contributions to the growth of his town or country, instead focusing on his firm and his
commercial ideals. He was not involved in many charity efforts, however he might play an important role
in the continent's reconstruction (IvyPanda, 2021). On the other hand, as long as the autocratic leader
knows the direction, everyone in the organization can expect clear goals and great concentration to
achieve them. Autocratic leadership also has some positive aspects such as faster decision making, strong
guidance will also increase the performance of inexperienced team members. In the case of Porsche, he
also brought a number of achievements to the company, as evidenced by Porsche being particularly
impressed by the business strategies adopted at Henry Ford's factory. Importantly, the innovator (Porsche)
has placed considerable emphasis on recruitment and management to assemble a group of professionals
and gain trust and appreciation (IvyPanda, 2021).

b. Participatory management style (democracy)

Managers and employees are all involved in the decision-making process in this model.
Employees are provided more knowledge about the organization and its aims, and they are encouraged
to come up with new ideas.
Management solicits employees' views, ideas, and opinions, collaborates with employees to make choices,
and then implements those decisions (Valamis, 2022).

Tim Cook, Apple's CEO, is also seen as a model of Participaroty (democratic) leadership. When the iWatch
idea began to take shape, Tim Cook preferred to outsource work to trusted members of his cabinet rather
than getting involved in the technological complexities. This assists employees in establishing an
agreement, especially among senior individuals, prior to making decisions. (Finanachill, 2021) He is often
described as "democratic" because he listens to various opinions, values input from members of his team,
and involves people in the decision-making processes. Perhaps that is why it has also contributed to the
success of Apple in recent years. Tim Cook's compensation as CEO has changed dramatically over the past
few years. How much he earns often depends on Apple's profits. In 2020, he grossed about $14.8 million.
In 2019, he earned about $11.6 million (Financhill, 2021). Proving that he has done his role very well in a

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large organization like Apple. However, there also be some unresolved challenges with the democratic
form of leadership: lack of control, low hierarchy lees focus on big picture strategy. There may be a
contradiction between participating and communicating to everyone in organization.

2. Leadership Styles

Transformational Style

This leadership style has a vision and focuses on changing ineffective systems and procedures.
Transformational leadership fosters useful and good transformation for individuals, with the ultimate goal
of inspiring and motivating subordinates to thrive ( Bass, et al., 2003).

Howard Schultz, the chairman and CEO of Starbucks - is seen as a transformational leader. Known as a
leader who cares about employees. Not only stopping at material rewards, the former Starbucks CEO also
pays attention to many other employee benefits such as proposing insurance programs for full-time and
part-time employees, paying tuition fees for employees. and collaborate with multiple support groups to
support the community. Besides, he also listens, supports employees, always respects and encourages
cultural diversity (Lam, 2017). He made his employees feel valued and respected, which in turn increases
their productivity. Schultz is a leader who kicked off the U.S.’s second coffee revolution. His employee-
focused leadership style left a template for other business owners to follow as they grow their own
enterprises, and Schultz grew a global brand in the process ( Biel, 2018).

VI. ORGANIZATIONAL CULTURE

1. Types of organizational cultures

According to Charle Handy, organizational culture is divided into four types, power, task, role, and person culture.
In this essay, we will focus on two types of corporate culture: power culture and person culture.

Power culture

A centralized culture that prioritizes important decision makers. May occur in small firms when the founder
dominates; may be stressed as a business expands and cannot be run entirely from the center (AQA, 2019).

Example: Power culture - although this type of culture is commonly used in small businesses it was adopted under
Steve Jobs, Apple Inc adopted this due to their emphasis on providing more quality anything else. Employees are
the most valuable asset of an enterprise, and only with positive and constructive motivational measures can
managers help employees develop 100% of their capabilities and make maximum contributions to the company.

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company results. This is an indispensable lesson in all HR classes. But with Steve, things are different. He does not
follow any of the traditional human resource management rules, if not completely contrary. An ordinary director
will call on employees to contribute good ideas so that the leader listens and chooses the best idea. Meanwhile,
Steve has an absolute belief in his own opinion, even to the point of obsession. He controls every aspect of a product
- Steve is known for being a perfectionist, and most of the final decisions come from his ideas. On one occasion, a
team member asked if they should do some market research to see what customers want, and Steve Jobs turned
away with his acumen, with him emphasizing the Being deeply interested in what the customer wants is different
from constantly asking what they want, it requires intuition and instinct about unformed desires (Isaacson, 2012).
As a young unknown, his vision and sheer force of will helped him achieve. However, the same resolve that helped
him thrive had a darker side—an autocracy and passion for perfection that made him tyrannical at times.

Although Steve Jobs brought some success to Apple Inc, the culture of power at Apple developed under Steve Jobs
had a number of disadvantages, including a lack of use of creativity and initiative on the part of Apple Inc. employees,
a high level of risk associated with decisions made, and decisions of a leader not facing criticism from lower
management ranks. Steve Jobs' pushing his ideas on others and making arbitrary judgments without consulting or
consulting anybody would raise the danger of decisions. The likelihood of making a mistake is really high. The
rigorous expectations of jobs impose a lot of strain on employees, making them prone to stress; the working
environment is always full of tension, and people don't always receive it. a pleasant working atmosphere, decreased
productivity, and so on.

People or person culture: Employees in certain organizations believe that they are more important than
the organization. These companies adhere to a culture known as person culture. Individuals in a person
culture are more concerned with themselves than with the organization.

Example: Bento for Business is expense management software that helps small businesses control
employee spending with smart employee debit cards. It can be seen that Bento company tends to follow
person culture. Several members of the company's leadership team extend their mentorship outside of
the office to support team members in all parts of their life, assisting employees in becoming more human.
This attitude of aiding and supporting one another throughout the organization, from employees to
customers and partners. When one employee expressed trepidation about speaking with the CEO, they
began holding regular sessions to boost their confidence, discussing both personal and professional issues
and aspirations. Employees feel appreciated in all parts of their lives, including professional and personal
goals, regardless of their level (Reiners, 2022).

Porsche's corporate culture

Porsche has always strived to raise morale and promote corporate culture. The company also expects
extraordinary results in terms of corporate profits. To achieve this, today and in the future, Porsche relies
on employees and managers who have a do-it-yourself mindset and are always ready to go the extra mile.
They are driven by a passion for their special products. That motivates them to constantly look for
improvements, and to regularly test and optimize structures. Porsche employees sometimes think in

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unusual ways, and Porsche supports this because it values independence and individuality - along with
teamwork and mutual support (Porsche, 2022).

According to Porsche, Porsche Culture is unique. "While our strategy explains 'what we do', our corporate
culture statement reflects 'who we are'." The Porsche's corporate culture statement features four core
concepts that make it easy to visualize 'who we are': (Porsche, 2022)

• Herzblut: stands for the passion and enthusiasm that fuel combined efforts of Porsche to find
the best solutions every single day. Porsche will continue to live the Porsche legend and work
with pleasure and pride on innovative products for our customers.
• Pioniergeis stands for how we started – as a small company with a workshop mentality that
delighted the world with its sports cars. Porsche will continue to stand for an entrepreneurial
spirit and the courage to take new and unknown roads and generate unique and sustainable
solutions.
• Sportlichkeit stands for our mindset. We love challenges, act rapidly and are unfailingly
respectful and fair in doing so. We will continue to measure ourselves by the highest standards,
seek competition and maintain our flexibility despite strong growth.
• One family stands for our team, which keeps its down-to-earth approach even when enjoying
the greatest success. We seek to further this mentality and to promote respectful and
appreciative teamwork characterised by openness and diversity.

2. Various factors influencing the development of organizational culture

An organization's culture represents its values, philosophies, policies, and practices. It provides employees
with a feeling of direction while also controlling how they interact with one another. The work culture
pulls all workers together and unifies them in the workplace.

There are various aspects that influence organizational culture such as history, Nature of business & its
primary function, Strategy, size, etc but in this essay we will discuss more deeply about the nature of
business and its functions.

Nature of business & its primary function

This includes the range and quality of products and services provided, the importance of reputation and
the type of customers. The primary function of the organization will determine the nature of the
technological processes and methods of undertaking work, which in turn also affect structure and culture.

One of the reasons for the incredible success of the Porsche engine business is the culture reflected in the
attitude of former boss Wendelin Wiedeking. 'Porsche's philosophy is to go first to the customer, then to
the workers, then to the suppliers and finally to the shareholders. Wiedeking said that when the first three
people are happy, so are the shareholders. Compare this to the typical view of US and UK-based businesses

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that often place 'shareholder culture' as paramount. These differences in outlook and culture help explain
why the high-end integration between BMW and Rover Cars and later Chrysler and Mercedes-Benz was
such a failure (PRonan,n.d).

When Porsche focuses on service and its customers build loyalty with them, making them feel valued, it
makes it more likely that Porsche products will be widely introduced, bring quite a lot of benefits for
businesses. The proof is that Wendelin Wiedeking has been Porsche's savior, credited by many with
rescuing the company from certain bankruptcy when he took over in 1993. Since then, Porsche's popularity
has been recorded. The company then posted record annual profits while staying true to its product goals.
In many ways, it achieved the impossible under Wiedeking's guidance (Autocar, 2009). On the other hand,
when a business focuses only on customers, sometimes it will not be able to meet those needs because
customer needs will always change, which means that your customer focused business needs to have
resources, such as finance, staff and time, to continuously keep up with customer needs. This can be a
problem for small businesses, as it can be costly and lead to employee burnout.

3. The importance of organizational culture on organizational performance

Organizational culture influences every aspect of the company, from punctuality and tone to contract
conditions and employee benefits. When the workplace culture is in sync with workers' needs, they are
more likely to feel at ease, supported, and respected. Companies that value culture are more likely to
weather difficult times and changes in the business environment and emerge stronger (Wong, 2020).

It can be said that corporate culture has played an important role in the success of Porsche. Porsche's
organizational culture has created flexibility and trust, keeping teams motivated, at Porsche giving people
the freedom to choose the time they want in the office, they can easily combine both professional and
personal goals. And that looks like a charm to their motivation. Perks like flexible working hours, paid time
off, longer days off, or sponsored health checks not only make people feel valued, but also more focused
on mission and growth their profession (Anon., 2022). For that reason, Porsche keeps its list of benefits
long and regularly updated, giving a strong incentive to people and organizations. These factors all
contribute to the performance of the business, making the business grow more and more, achieving the
expected goals.

Moreover, leadership and management styles under Ferdinand Porsche era were essential to shaping
organizational culture of Porsche. His leadership style tended to be more authoritarian than democratic,
but both were extremely effective in setting a tone for company existence that would domino into design-
centric focus on driving factors such as technology, engineering and performance. Porsche also benefitted
from Ferdinand Porsche's management style as it helped them establish their own automotive company
in 1948 which has become one of the most popular luxury car makers in the world today (Porsche, 2017).
Regardless of the era of Porsche leaders, Porsche has always established their ambition, mission, values
and commitment to the goal through their management style, which includes a stimulating and
empowering leadership style. Thus, we can see that Porsche has constantly changed and strengthened the
organization to grow more and more. They stimulated all employees with creative inspiration and

18
innovative thinking with art competitions and initiatives. And many viewers praised that the new direction
was very interesting to hear in-depth strategic planning. That is why Porsche continues to develop its
contribution to the markets with close cooperation between regulators based on transparency and
accountability being an important role. This type of strategy allows for increased confidence from
stakeholders in avoiding any deviation between the behaviors of managers as they lead investment
projects.

VII. Conclusion
Leadership is nothing if it does not create a management structure based on systems, and management
would be nothing without the work of leadership as the backbone of ideas. The above essay has presented
the concepts of leadership and management, and talked about the importance of organizational culture
to organizational performance through practical examples.

19
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 Index of comments

2.1 Khánh Vy,

What you did well
- You provided definition of leader and leadership (P1 achieved)
- You provided the key skills and competences of effective leader (P1 achieved)
- You provided definition of manager and management (P2 achieved)
- You provided the key skills and competences of effective manager (P2 achieved)
- You provided various examples of leadership and management theories with real- life application example (P1-
P2 achieved)
- You provided a difference between management and leadership (P1- P2 achieved)
- You discussed different leadership and management styles with examples of different organization (P3
achieved)
- You discuss organizational cultures of organization (P4 achieved)
- You identify and explain various factors influencing the development of organizational culture (P4 achieved)
- You analyzed the positive and negative impacts of applying leadership and management theories on
organizational performance (M1 achieved)
- You provide critically evaluated the strengths and weaknesses of different leadership and management theories
(D1 achieved)
- You explained and compare how different leadership and management styles would impact on decision making
(M2 achieved)
- You evaluated the importance of organizational culture on organizational performance in the organization (M3
achieved)
- You critically evaluate important of leadership and management styles in setting an organization culture via
provide different of Ford cultures under different leadership (D1 achieved)
What you did less well
- The paper should be organized more logically
What need to be improved
- Enhance quality of references
Good work! Keep it up
Final Grade: P1, P2, P3, P4, M1, M2, M3, D1

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