The two retail companies picked are Walmart and Costco whose 2017 Financial statement links are provided below: WALMART https://www.nasdaq.com/symbol/ wmt/financials?query=income- statement COSTCO https://www.nasdaq.com/symbol/ cost/financials?query=income- statement Both organizations are well known brands and position themselves well with their customer base. Walmart’s value proposition is “We save people money so they can live better”. On the other hand, Costco’s value proposition is “All-in-one convenience and everyday affordability”. Both retailers focus on cost saving for their customers. Looking at their financial statements and by analyzing them a few key areas are evident when comparing the two organization. Looking at the current ratio and quick ratio we can determine the short-term solvency of each organization. The current ratio can be determined by dividing the assets by the liabilities. Walmart’s current ratio sits at 0.86 while Costco’s sits at 0.99. The quick ratio is c
One of the questions I thought about after the readings is that, do experts tend to naturally become leaders or do leaders rise to their position without necessary being an expert first (in that field)? Figure 1 from Germaine (2008) shows there is much overlap. Of course, there are many leaders who choose to remain individual contributors and there are many leaders who lead companies without necessarily knowing the details of their products. While both cases can occur, but I believe the former occurs more often (i.e. expertise first, then leadership). Expertise is a combination of traits, behaviors, and skills however, according to research done by Stogdill (1974) cited by Germaine, so to answer the question above I will consider each theory independently.
Behavior Theory: Leaders are made, not born (Russell, 2011). The leader can learn to be effective by observation, teaching, and experience. Self-enhancement items perceived by subordinates according to Germaine’s research that are part of Behavior Theory are drive, self-confidence, charisma, extraversion, and others.
Trait Theory: There are leadership traits in some people that are innate. Either you have them or you don’t (Russell, 2011). However, these leadership traits, such as confidence and charisma, were found to be attributes of expertise, which means they can be developed. One of the sources cited in the reading (Northouse, 2007) that the key traits from trait theory are intelligence, self-confidence, drive, and sociability – sound familiar? (from above)
Skills Theory: Evidence-based expertise items such as knowledge in the field and education credentials are part of expertise and can be learned/gained. Self-enhancement-based expertise items, the same confidence and charisma mentioned above, but also problem-solving skills, can also be learned.
Following these definitions, I determine that the leadership traits described in Behavior Theory is merely a subset of the traits covered under Skills Theory. Germaine argues that leadership traits and expertise traits converge on a common set of characteristics shown in Figure 1 of the reading and attached below, unifying knowledge, skills, and behavior components.
In conclusion, my thought process is as follows: leadership characteristics includes a set of behavioral traits (confidence, charisma, etc.), however these traits can be learned, but, to go above and beyond the leadership also needs knowledge, credentials, and problem-solving skills. So, behaviors, hard knowledge are both required for the effective leadership. Both are covered under Skills Theory and both can be learned. Aside from Germain’s work in 2006, I think the research by Northouse in 2007 best supports this holistic combination of traits for leadership.
Below are some of the other studies cited in the reading for reference:
(Conger & Kanungo, 1988) - followers make attributions of leadership abilities when they observe certain behaviors
(Tiberius, Smith, and Waisman, 1998) - expertise based on knowledge, skills, and talent
(Harvey, 2001) - charismatic leaders possess outstanding rhetorical ability
(Swanson & Holton, 2001) – experts are problem-solvers. Expertise is the combination of experience, problem-solving skills, and knowledge
(Judge, Bono, Ilies, and Gerhardt, 2002) – supports Goldberg’s Big-Five traits (1990) (e.g. extraversion, conscientiousness)
Germaine, M. (2008). Traits and Skills Theories as the Nexus between Leadership and Expertise: Reality or Fallacy? Paper presented at the Academy of Human Resource Development International Research Conference in the Americas (Panama City, FL, Feb 20-24, 2008). Retrieved from: http://files.eric.ed.gov/
Northouse, P. G. (2007). Leadership: theory and practice (4th ed.). Thousand Oaks, CA: Sage Publications.
Russell, E. (2011, Sept 8). Leadership theories and style: A transitional approach. General Douglas MacArthur Military Leadership Writing Competition.
Stogdill, R. M. (1974). Handbook of leadership: A survey of the literature. New York: Free Press.
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