ORGANIZATIONAL BEHAVIOR FALL 09 Perot Systems – Leadership Style

Group Members Muhammad Abdullah Syed Wasiq Abbas Samina Kidwai Saima Nazir

Agenda Introduction to the topic Leadership theories Situational theories Behavioral theories Contingency theories Case Study Analysis of the critical questions

Presentation Topic Leadership styles in Perot Systems Leadership The ability of an individual to influence a group towards the achievement of vision or set of goals.

Leadership Theories Situational Theories Leaders should choose the best course of action based upon situational variable. Behavioral Theories Behavioral theories of leadership are based upon the belief that great leaders are made, not born. Contingency Theories According to this theory, no leadership style is best in all situations. Success depends upon a number of variables, including the leadership style, qualities of the followers, and aspects of the situation.

Major Theories Ohio State University Study 2 dimensions of leadership Initiating Structure Managers define and tightly structure staff’s work. Consideration Managers nurture a feeling of mutual trust and strong interpersonal relations.

Major Theories University of Michigan Studies 2 dimensions of leadership Employee Oriented Leaders Take a personal interest in the their staff and actively seeking to nurture strong comradeship. Production Oriented Leaders “Lets just get the job done and done well” attitude.

Major Theories Fiedler’s Contingency Theory A successful group depends on Right match between a leader’s style of interaction & The degree of control and influence available to the leader in the situation

Perot Systems

The Case Title Perot Systems - Can a high performance company have a human side? Theme Comparison of different leadership styles applied at Perot Systems throughout its lifetime.

The Case – Company History Perot Systems An important IT services company in the US Founded in 1988 by Ross Perot Termed as one of the “400 best big companies” by Forbes Magazine As of 2004, termed as one of the fortune 1000 company by the Fortune Magazine

The Case – 3 CEOs Different leadership styles 3 CEOs with entirely different leadership styles Ross Perot Sr. Mort Meyerson Ross Perot Jr.

Ross Perot Sr. Ex military man with an authoritative style Loves to have ex military men as part of his team Started Electronic Data Systems (EDS) with $1000 in 1962 EDS was bought by GM for $2.5 billion in 1984 Perot became part of GM but could not stay there Started Perot Systems 2 years later EDS could not fit with GM and was sold out in 1996 Founded a new political party “Reform Party” Stepped down as Perot System’s CEO due to his new responsibilities

Mort Meyerson Ross’s successor as CEO His associate who helped build EDS Did not agree with Ross’s military style management Mentions incidents at EDS Projects were considered “Death Marches” People were expected to do whatever it takes to complete the task Loyalty was questioned in small incidents Agrees that EDS was financially very strong but people were not happy Wanted not to apply the same style at Perot Systems

Mort Meyerson – Applying the change Meyerson wanted Perot systems to have a human heart He wanted people to come first Started cleaning up the culture People who did not agree were asked to leave Gave around 60% of company shares to employees against various compensation plans Under Mort, the company won several important projects at big companies like Lockheed Martin Although people were happy, Perot Systems was not earning consistent profits

Ross Returns Mr. Perot feels things are not right so he comes back The military came back to Perot systems as Ross started restructuring the whole thing again. An IPO evaluation did not go as expected and Ross understood that his old style will not help anyone Ross turns control to his son Ross Perot Jr.

Ross Perot Jr. Also comes from a military background Served the air force for 8 years Adventure oriented First person to fly around the world in a helicopter Changed the company values Focus on company culture, people, honesty and ethics Helped the company earn over $1.5 billion in 2003 In 2004, Perot systems was among the top 50 federal contractors In 2004, the company had over associates worldwide.

Review Questions Q1: Comparison between Meyerson and Perot Sr.’s leadership styles based on Michigan and Ohio theories Q2: Use Fiedler’s contingency theory to explain how Meyeron’s or Perot’s style might be most appropriate on specific characteristics at Perot Systems. Q3: Evaluate Perot Jr.’s style from the view point of transformational leadership.

Meyerson Vs Perot Sr. – Michigan Theory MeyersonPerot Sr. Clearly an employee oriented style. Focused on people rather than profits Clearly a production oriented leader Wanted to achieve profits at the cost of everything else

Meyerson Vs Perot Sr. – Ohio Theory MeyersonPerot Sr. Followed a considerate style of leadership Wanted to have employee trust. E.g. sharing company stakes with the employees Followed the initiating structure of leadership Fond of having ex military men in the team who are good at defining and following orders without appreciating much questions

Fiedler’s theory on Meyerson and Perot Situation: Assignments termed as “Death Marches” Perot’s style was probably incorrect here. He continued his military mindset and thought that people had no choice but to abide Meyerson’s style would have helped here by focusing on people issues. If people are motivated, they will give in everything to make the project successful.

Fiedler’s theory on Meyerson and Perot Situation: Company loosing profitability Perot’s task oriented style could have helped in this situation the requirement is such a situation is to rectify the loss and increase profitability. Meyerson’s considerate style is not ideal in such cases. The leader must stay focused on the objective and expect people to understand the situation.

Perot Jr.’s style as transformational leadership Perot Jr. has the characteristics of a transformational leader. He learnt from the experience of his predecessors and applied a mix of both people and task oriented styles The people remained happy & motivated and the company started gaining profits. He changed the core values of the organization and the corporate culture. A leader who came, saw and conquered!

Thanks You QA