Part A

Hertz Corporation is a car rental company in America with its headquarters located in Estero, Florida, and has a formidable global presence. It is regarded as the largest company in this industry based on the sales volume. The company was founded in 1918 by Jacobs Walter. Hertz’s objective is being the leader when it comes to equipment solutions and mobility all over the world. The company aims at achieving this objective by ensuring it offers its customers high-quality services and lowest costs possible. Creation of value for shareholders is also among the mechanisms being used by the organization in pursuit of its objective. Hertz is driven by the values of respect and responsibility, excellence and execution, innovation and integrity and diversity and discipline.

John P. Tague could be regarded as the primary leader of the organization. He was named the CEO of the organization in November 2014. Before his appointment as the CEO, Tague had acquired massive experience while undertaking different roles in various companies. This is an aspect that makes many employees and other executives to respect him. This is based on how people react or respond upon the mention of his name. It is easy to envisage the level of respect that they bear.

The CEO has three common leadership practices that are quite observable by anyone working within the organization. They include:

Delegation of Duties

The company is divided into various departments that are responsible for the execution of varying duties. The CEO ensures that these departments operate autonomously without external interference. The reason behind this practice is to ensure that there is the empowerment of the individuals working in the organization. When teams have the freedom of executing tasks in their desired manner,  the probability of personal growth increases significantly. This results in the acquisition of significant skills that would enable the organization to move forward (Kouzes & Posner, 2016). The employees have an increased sense of job satisfaction and motivation. This was among the practices that were quite vivid when the CEO took charge back in November 2014. It was believed that the reason behind this practice was to ensure that even the junior employees felt as being important members of the organization. This would have helped in the reduction of their turn-over.

Modeling the Way

The CEO is always keen on clarifying his values. It is easy for anyone to observe that he is quite principled. He has a way of doing things that he expects the people below him would emulate. In short, he is the type of person that tends to lead by example.  If he wants the employees to treat the customers well, he believes that they should be treated well too. The aspect cultivates a desire in them to extend the good things happening in their lives towards the customers. Since commencing his term at Hertz, the CEO has time and again developed standards of excellence with the expectation that employees would follow the lead. He has a great understanding that change has the prospect of overwhelming employees at any level of the organization.  The attribute has resulted in the adoption of interim goals in order to help the people to actualize small wins as they work towards attaining larger objectives. There are directions for people to follow when things do not seem clear, and this creates an opportunity for victory.

Inspiring a Shared Vision

Hertz’s CEO also has the tendency of inspiring shared visions. This is something that he initiated when he first came to the organization. All along, he has been creating images of what he expects the organization to become during his tenure. He has developed a way of making other employees view the organization from a similar perspective. The art of persuasion has been helpful in ensuring the others sail in similar dreams. Based on the way that the CEO carries his visions, it is evident that he has the belief in making a difference within the organization. There is the desire of making things better compared to how they are at present, and come up with a working formula that had not been instituted before. One fascinating feature with regards to this leadership practice is that the CEO knows it is difficult to command commitment, but it is quite easy to inspire it.

The leadership being experienced in Hertz at present has influenced the organizational culture in various ways. Among the cultures that have gained prominence is that of collaboration. There is improved collaboration for teams involved with the different departments in the organization. This can be observed based on how people execute their duties at the present. Collaboration prospects have been boosted by the aspect of enhancing delegation. When a junior employee is tasked with an activity, they ensure that they have involved their colleagues in the execution so as to ensure that they do the right thing. It is the desire of every employee to impress the people above them since it might result to better promotions in future (Safi, 2008). The best way to ensure that the work produced will be impressive is by working in partnership to cover all the vital areas. The leadership practice of creating a shared vision has also contributed to the improvement of collaboration prospects. When people have a similar vision, they will always work together to foresee its actualization.

Improved collaboration in the organization has seen a reduction in conflicts and improved creativity. The conflicts have reduced since everyone is working towards achieving something similar. It also becomes quite easy to agree on issues when there is a common goal at play. Creativity has improved due to the synergy that comes with collaborations. People are now combining their efforts in solving problems and identifying new prospects for the organization.

 

Part B

SWOT Analysis

Strengths

Brand name

Hertz Corporation derives a significant strength from its recognized brand name. Many consumers that are involved with the company have an idea of how long it has been in existence. Based on the fact that it has not collapsed for all those years, it means that there is something that the company is doing right. Consumers will always have this notion. This is because if there were ill practices towards the consumers, the brand would be long gone. This notion makes the consumers to remain loyal as they believe that their needs will be well catered for. As a result, Hertz has the ability to charge high prices for its services and products and still retain its employees. Consumers have already placed an additional value to the brand so they will not shift to the available substitutes due to the slight increase in price. This perspective helps the company to overcome competition from existing and new entrant organizations while making substantial profits at the same time.

The aspect of globalization also works to strengthen the company’s brand name. Hertz operates in almost 150 countries. A success of this magnitude enables local customers to have even more trust in the brand and its offerings.

Financial Leverage

Financial leverage accords the company the ability to acquire additional assets. Hertz’s balance sheet would be appealing to any financial institution hence acquiring funds to help move the company forward would not be a problem. In the long-run, this translates to increased profits. Financial leverage is more of a qualitative factor that competitors find difficult to overcome. Experience has shown that it is quite difficult for an organization to compete with another organization in the same industry that bears more resources.

Weaknesses

Research and Development

A greater insight into the company shows that the investments towards research and development are not quite sufficient. It is through research and development that an organization will have the ability to remain competitive in a given industry. Most of the technologies being used at Hertz seem to be outdated. The company has not placed more emphasis on acquisition of proprietary patents and technology. This gives competitors and opportunity to gain a competitive advantage.  A company might not have a huge resource base, but they can use favorable technology to compete with the big companies. Use of modern infrastructure and applications helps to enhance communication within an organization. Effectiveness is increased since there is a quick response and more deals are closed as a result. Sticking with outdated technology tends to leave customers with the feeling of frustration since most of their needs are not met. Employees are also affected by this aspect, and it detrimental to an organization since it can result in increased turn-over.

Lack of a funded Employee Pension Plan

Hertz tends to provide retirement benefits to their employees. The benefits normally include the financial pension plan. With the prevailing economic conditions, the company finds it difficult to land a company that would help in funding the costs incurred in the provision of pension plan benefits for the retired employees. This has resulted in the payment of the pensions out of the profits accrued. The aspect increases pressure on the company’s profit margin with regards to the current equity/debt financial situation. Likelihood of attracting new investors will be affected by this weakness.

Opportunities

New Services and Products

Hertz has not exhausted a range of products and services that they would make available to their consumers. Some services and products tend to become monotonous to consumers hence the need eradicate them and replace them with even better products and services. Embracing the practice of research and development will help in the realization of superior services and products. The introduction of new offerings will help the company in meeting the needs of the current consumers. The company will also have the ability to expand its business. In addition to retaining the existing customers, Hertz will have the ability to attract new consuming; who will be attracted to the new services and products on offer. However, ethical practices should be adhered to in this endeavor in order to ensure that remains to be feasible. This is because most consumers have become conscious with regards to ethical businesses. If the new products and services fail to meet certain ethical requirements, their prospect of being embraced by consumers is quite low.

New Acquisitions

Hertz has been operating in this industry for a long time. This means that it has acquired sufficient resources to enable it to acquire some of the small companies and those that are struggling within the industry. This aspect would help to bring synergy and reduce the level of competition hence result to increased revenues over time.

Threats

Intense Competition in the Industry

The competition in the service and rental industry will always be high. This is due to the fragmentation associated with the industry. Hertz has to fend off competition from smaller and global companies in quest of acquiring a substantial market share. The major threat that Hertz is facing currently and in future is that these companies tend to offer similar services and products at competitive prices. The price wars in the industry are a threat based on the profit margins that the company has been experiencing in the past. Lowering the prices to remain competitive only works up to a certain extent. A company might run itself out of business due to the loss of the necessary profitability that is required to remain operational.

Increased Cost of Fuel

The cost of fuel tends to fluctuate from time to time since the price is heavily dependent on prevailing economic conditions. Increase in fuel prices would prompt the airline industry to hike the ticket prices to cover the additional operational costs. Increased tickets cost will result in a decrease in the number of people willing to travel. Airport locations tend to provide Hertz with a large number of consumers with regards to rental services. Decreased air travel would mean a reduction in revenues for the company as a result. Increased fuel costs would also result to reduction in profitability from a general perspective due to an increase of the operations cost.

 

Part C

Strengths

Behavioral leadership theories can be used to evaluate the strengths entailed in Hertz CEO’s leadership practices. The theory is more concerned with the behaviors that are prevalent with certain leaders in various positions. It is believed that an individual’s behavior can be used to predict their influence and therefore be used as a determinant of their leadership success. The types of behaviors that are normally observed revolve around how the leaders tend to relate to their employees. The leader might either be people or task oriented.

The practice of delegating duties is strength since it shows that a leader is people oriented. It is through delegation that the junior staffs get the idea of how it feels like to run the affairs of the organization. There is an opportunity provided for skills enhancement and development. The level of morale at the workplace is expected to be high due to the autonomy created. There is a high level of commitment, which means that the organization stands to benefit in different ways (Derue et al., 2011). When a leader gives responsibilities to the junior employees, it makes them hungrier and ready to give their best when called upon. Behavioral theories of leadership have shown that being a good leader is not a matter of having the ability to do everything by oneself, but developing strategies that ensure everything is done by the most suitable personnel.

Modeling the way on the other hand, helps a leader to influence employees’ attitudes, thoughts and behaviors. Leading by example helps to curb elements of conflict that might be prevalent in a workforce that sees things differently hence leaning towards varied solutions. It is easier for a leader to translate intentions into reality when the act on messages and concepts that they pass to the employees. There are people who do the opposite of what they say and this result to the loss of credibility among the team members (Ford & Harding, 2015).

Inspiring a shared vision on its part helps to improve the team’s commitment towards actualizing desired goals. Some behaviors are usually learned, and once mastered they become part of an individual or team. With a shared vision, a team is always on the same page on the things that ought to be done. This reduces elements of conflicts hence promoting efficiency.

Weaknesses

Through the behavioral leadership theory, it is apparent that a leader might indulge in certain behaviors with good intentions, but the results do not materialize. This is based on various factors involved in the workforce. The employees might not be up to the task or the prevailing conditions are not favorable the behaviors in question.

When it comes to delegation of duties, it might result to overwhelming of employees. This is because the duties involved might be out of their desired or relevant scope. As a result, it takes more effort and time to get acquainted and execute them in the best way possible. There is a feasibility of things going wrong in the workplace. Junior employees will find it difficult to inform their superiors that they are not up to the task since they view this a as a chance to impress (Lussier & Achua, 2012). Due to lack of experience and knowhow, things work against them and a lot of time is wasted figuring what went wrong.

When it comes to leading the way, the weakness is imminent in that the leader is more tasks oriented. This behavioral leadership practice sees less concern being placed on the side of employees. More emphasis is normally on the operational procedures and organizational structure since the leader enjoys keeping control. This might be detrimental to the organization since some needs associated with employees are neglected. Employees are a vital element in any entity. Their actions and reactions are a great determinant of the success that would be actualized in an organization. Failure to heed their concerns and needs might result to poor performance, something that will affect the organization negatively (Derue et al., 2011).

Ensuring that there is a shared vision among the employees on the other hand, is not as easy as it sounds. There is the probability of resistance since not all employees will be inclined to the mechanisms being proposed to help in the attainment of the desired vision. This results to leaders forcing concepts upon the employees. This makes things worse since there are employees that will work with the attempt of sabotaging their leader to prove a point. Such actions normally result to division at the workplace, and it becomes difficult to achieve substantial results.

Recommendations

There are various practices associated with the behavioral theory that might lead to the success of an organization and the relevant leader. Among them is the ability to put more focus on employees rather than the tasks. When a certain behavior is more people-oriented, the prospect of success is usually high. This is because the employees normally have the feeling of belonging. When their concerns are put into consideration, there is a degree of motivation that comes with it (Lussier & Achua, 2012). The motivation will ensure that all the relevant tasks have been executed in the best way possible.

The practice of being able to recognize and encourage employees that show exemplary performance would go a long way into motivating others to follow the same direction. Finding innovative ways of celebrating goals that have been achieved brings more desire to move on to the next mission. This behavior helps to foster a sense of a community (Ford & Harding, 2015). Employees become more concerned with the things going around them due to the desire for improved performance.

Having the ability to adapt a leadership approach to suit specific circumstances and organizational context is also a favorable practice associated with behavioral theory. A great leader will have the understanding that “one size does not fit all” (Barrett, 2009). The characteristics of the employees and the organizational culture should be put into consideration to shape the relevant behavior accordingly.

 

References

Barrett, M. (2009). Eleven Leadership Practices That Will Change Your Life. Dog Ear       Publishing.

Derue, D. S., Nahrgang, J. D., Wellman, N., & Humphrey, S. E. (2011). Trait And Behavioral      Theories Of Leadership: An Integration And Meta-Analytic Test Of Their Relative       Validity. Personnel Psychology, 64(1), 7-52.

Ford, J., & Harding, N. (2015). Followers in leadership theory: Fiction, fantasy and illusion.         Leadership.

Kouzes, J., & Posner, B. (2016). The Leadership Challenge: How to Make Extraordinary Things   Happen in Organizations. John Wiley & Sons.

Lussier, R., & Achua, C. (2012). Leadership: Theory, Application, & Skill Development. Boston: Cengage Learning.

Safi, L. (2008). Leading with Compassion: Anchoring Leadership Practices in Prophetic   Traditions. Louay Safi.

 

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